-

Consolidated financial statements for the 2019 period

(Prepared under International Financial Reporting Standards as adopted by the European Union)

(1)		NATURE, ACTIVITIES AND COMPOSITION OF THE GROUP	10
(2)		BASIS OF PRESENTATION	12
	(a)	Regulatory framework on financial information	12
	(b)	Functional and presentation currency	13
	(c)	Comparative information	13
	(d)	Relevant accounting estimates, assumptions and judgements used when applying accounting principles	13
	(e)	Standards and interpretations adopted since 01 January 2019	14
	(f)	Impact assessment of the adoption of IFRS 16	15
	(g)	Standards and interpretations issued but not effective at 1 January 2019	15
(3)		DISTRIBUTION OF PROFIT	16
(4)		CONSOLIDATION PRINCIPLES	16
	(a)	Subsidiaries	17
	(b)	Joint Ventures	17
	(c)	Business combinations	18
	(d)	Harmonisation of account items	18
	(e)	Consolidated group	18
	(f)	Changes to the composition of the Group	22
(5)		ACCOUNTING PRINCIPLES	24
	(a)	Investment property and intangible assets	24
	(b)	Leases	24
	(c)	Financial instruments	25
	(d)	Derivative financial instruments and accounting of hedging transactions	27
	(e)	Measurement techniques and assumptions applicable to fair value measurement	28
	(f)	Treasury shares of the Parent Company	29
	(g)	Distributions to shareholders	30
	(h)	Cash and cash equivalents	30
	(i)	Employee benefits	30
	(j)	Payments based on shares	30
	(k)	Provisions	30
	(l)	Revenue recognition	31
	(m)	Lease of investment property to third parties	31
	(n)	Profit/ (loss) from the disposal of investment property	32
	(o)	Income tax	32
	(p)	Segment reporting	33

	(q)	Classification of assets and liabilities as current and non-current	33
	(r)	Environmental information	33
	(s)	Statement of cash flows	33
	(t)	Non-current assets held for sale and liabilities connected to non-current assets
		held for sale	34
(6)		SEGMENT REPORTING	34
	(a)	Operating segments	34
	(b)	Geographical segments	41
(7)		INVESTMENT PROPERTY	42
(8)		OPERATING LEASES – LESSOR	48
(9)		EQUITY-ACCOUNTED INVESTEES	50
(10)		NON-CURRENT ASSETS HELD FOR SALE AND LIABILITIES CONNECTED TO ASSETS HELD FOR SALE	50
(11)		FINANCIAL ASSETS BY CATEGORY	53
	(a)	Classification of financial assets by category	53
	(b)	Classification of financial assets by maturity	54
(12)		TRADE AND OTHER RECEIVABLES	54
	(a)	Impairment	55
(13)		CASH AND CASH EQUIVALENTS	55
(14)		NET EQUITY	55
	(a)	Capital	55
	(b)	Issue premium	57
	(c)	Other reserves	57
	(d)	Value adjustments	59
	(e)	Treasury shares	59
	(f)	Paid dividends and return of issue premium	60
(15)		EARNINGS PER SHARE	60
		(i) Basic	60
	(ii)	Diluted	61
(16)		FINANCIAL LIABILITIES BY CATEGORY	62
	(a)	Classification of financial liabilities by category	62
	(b)	Classification of financial liabilities by maturity	63
(17)		FINANCIAL LIABILITIES FROM BORROWINGS	63
	(a)	Main characteristics of debt from bonds	63
	(b)	Main characteristics of bank borrowings	64
	(c)	Derivatives	67
	(d)	Movements of cash under financial liabilities from borrowings	69
(18)		OTHER NON-CURRENT FINANCIAL LIABILITIES	70

(19)		TRADE AND OTHER PAYABLES	70
(20)		INFORMATION ON THE AVERAGE NUMBER OF DAYS PAYABLE OUTSTANDING	70
(21)		PUBLIC ENTITIES AND TAXATION	71
	(a)	Balances with Public Entities	71
	(b)	Reconciliation of accounting profit and taxable income	72
	(c)	Reconciliation between the accounting result and the corporate income tax result	74
	(d)	Periods pending verification and inspections	75
	(e)	Reporting requirements for SOCIMIs pursuant to Law 11/2009 amended by Law 16/2012	75
(22)		RISK MANAGEMENT POLICY	75
	(a)	Financial risk factors	75
(23)		REVENUE	81
(24)		OTHER OPERATING EXPENSES	81
(25)		FINANCE PROFIT	82
(26)		EMPLOYEE BENEFITS EXPENSE	82
(27)		PROFIT FOR THE PERIOD	83
(28)		RELATED PARTY BALANCES AND TRANSACTIONS	84
	(a)	Related party balances and transactions	84
	(b)	Information on the Parent Company's directors and senior management personnel of the Group	85
	(c)	Transactions other than ordinary business or under terms differing from market conditions carried out by the Directors	86
	(d)	Investments and positions held by Directors and their related parties in other companies	86
(29)		EMPLOYEE INFORMATION	86
(30)		AUDIT FEES	87
(31)		EVENTS AFTER THE REPORTING PERIOD	87
(32)		EXPLANATION ADDED FOR TRANSLATION TO ENGLISH	87

LAR ESPAÑA REAL ESTATE SOCIMI, S.A. AND SUBSIDIARIES Consolidated Statement of Financial Position 31 December 2019

(Expressed in thousands of Euros)

(Translation of financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to the Company (see Note 2). In the event of a discrepancy, the Spanishlanguage version prevails)

Assets	Note	31.12.2019	31.12.2018
Intangible assets		2	8,556
Investment property	7	1,449,344	1,363,646
Equity-accounted investees
	9	5,100	4,627
Non-current financial assets	11	13,149	11,426
Trade and long-term other receivables	11, 12	3,857	2,733
Total non-current assets		1,471,452	1,390,988
Non-current assets held for sale	10	103,790	78,081
Trade and other receivables	11, 12	14,644	13,762
Other current financial assets	11	189	3,268
Other current assets		2,650	4,176
Cash and cash equivalents	13	160,527	191,328
Total current assets		281,800	290,615
Total assets		1,753,252	1,681,603

The accompanying Notes 1 to 32 and Appendix I form an integral part of the consolidated statement of financial position at 31 December 2019.

LAR ESPAÑA REAL ESTATE SOCIMI, S.A. AND SUBSIDIARIES Consolidated Statement of Financial Position 31 December 2019

(Expressed in thousands of Euros)

(Translation of financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to the Company (see Note 2). In the event of a discrepancy, the Spanishlanguage version prevails)

Equity and Liabilities	Note	31.12.2019	31.12.2018
Capital	14	175,267	186,438
Issue premium	14	475,130	476,301
Other reserves and other contributions	14	254,358	220,289
Retained earnings	14, 15	80,730	129,308
Treasury shares	14	(762)	(1,228)
Value adjustments	14	(1,943)	(2,610)
Total net equity		982,780	1,008,498
Financial liabilities from issue of bonds
and other marketable securities	16, 17a	139,376	139,077
Bank borrowings	16, 17b	506,641	428,400
Deferred tax liabilities	16, 21	17,201	19,405
Derivatives	16, 17c	2,846	1,892
Other non-current liabilities	16, 18	19,593	17,240
Total non-current liabilities		685,657	606,014
Liabilities connected to non-current assets held
for sale	10	1,570	810
Financial liabilities from issue of bonds
and other marketable securities	16, 17a	3,482	3,482
Bank borrowings	16, 17b	41,127	6,461
Derivatives	16, 17c	2,393	2,179
Short-term debt with Group companies and associates	28a	3,199	-
Trade and other payables	19	33,044	54,159
Total current liabilities		84,815	67,091
Total equity and liabilities		1,753,252	1,681,603

The accompanying Notes 1 to 32 and Appendix I form an integral part of the consolidated statement of financial position at 31 December 2019.

LAR ESPAÑA REAL ESTATE SOCIMI, S.A. AND SUBSIDIARIES Consolidated Statement of Comprehensive Income for the period ended 31 December 2019

(Expressed in thousands of Euros)

(Translation of financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to the Company (see Note 2). In the event of a discrepancy, the Spanishlanguage version prevails)

Consolidated Statement of Comprehensive Income	Note	2019	2018
Revenue	6	81,128	77,841
Other income		3,274	3,733
Employee benefits expense	26	(424)	(502)
Depreciation charges		-	(307)
Other operating expenses	24	(25,726)	(55,148)
Changes to the fair value of investment property	7, 10	40,037	70,471
Profit/(loss) from the disposal of investment property	7, 10	1,008	28,541
Profit/(loss) from operating activities		99,297	124,629
Financial income	25	12	27,927
Financial costs	25	(18,977)	(16,786)
Inclusion of financial expenses in assets	7, 25	659	-
Changes in the fair value of financial instruments	25	(1,836)	(1,024)
Share in profit/(loss) for the period
of equity-accounted companies	9	473	(899)
Profit for the period from continuing operations		79,628	133,847
Income tax	21	1,102	(4,539)
Profit for the period		80,730	129,308
Basic earnings per share (in Euros)	15	0.90	1.38
Diluted earnings per share (in Euros)	15	0.90	1.37
Consolidated Statement of Comprehensive Income		2019	2018
Profit for the period (I)	27	80,730	129,308

Other comprehensive income directly recognised in net equity (II)	14d	(821)	(1,952)
Other amounts transferred to the income statement (III) Total Comprehensive Income (I)+(II)+(III)	14d	1,488 81,397	1,005 128,361

The accompanying Notes 1 to 32 and Appendix I form an integral part of the Consolidated Statement of Comprehensive Income for the period ended 31 December 2019.

LAR ESPAÑA REAL ESTATE SOCIMI, S.A. AND SUBSIDIARIES Consolidated Statement of Changes in Net Equity for the period ended 31 December 2019

(Expressed in thousands of Euros)

	Capital	Issue premium	Other reserves	Other contributions	Retained earnings	Treasury shares	Value adjustments (Note 14d)	Total net equity
Balance at 31 December 2017	185,248	487,349	111,614	240	135,606	(175)	(1,663)	918,219
Total income and expenses recognised in the period Transactions with equity holders or owners:	-	-	-	-	129,308	-	(947)	128,361
Capital increases	4,279	16,645	-	-	-	-	-	20,924
Capital decreases Distribution of profit:	(3,089)	-	(9,865)	-	-	12,954	-	-
To reserves	-	-	118,333	-	(118,333)	-	-	-
To dividends	-	-	-	-	(17,273)	-	-	(17,273)
Return of the issue premium	-	(27,693)	-	-	-	-	-	(27,693)
Treasury shares	-	-	(33)	-	-	(14,007)	-	(14,040)
Balance at 31 December 2018	186,438	476,301	220,049	240	129,308	(1,228)	(2,610)	1,008,498
First application of IFRS 16 (Note 2f)	-	-	5,146	-	-	-	-	5,146
Balance at 01 January 2019	186,438	476,301	225,195	240	129,308	(1,228)	(2,610)	1,013,644
Total income and expenses recognised in the period Transactions with equity holders or owners:	-	-	-	-	80,730	-	667	81,397
Capital increases (Notes 14 a and b)	1,243	5,182	-	-	-	-	-	6,425
Capital decreases (Note 14a)	(12,414)	-	(34,011)	-	-	46,425	-	-
Distribution of profit:
To reserves	-	-	63,061	-	(63,061)	-	-	-
To Dividends (Note 14f)	-	-	-	-	(66,247)	-	-	(66,247)
Return of the issue premium (Note 14f)	-	(6,353)	-	-	-	-	-	(6,353)
Treasury shares (Note 14e)	-	-	(16)	-	-	(45,959)	-	(45,975)
Other operations	-	-	(111)	-	-	-	-	(111)
Balance at 31 December 2019	175,267	475,130	254,118	240	80,730	(762)	(1,943)	982,780

The accompanying Notes 1 to 32 and Appendix I form an integral part of the consolidated statement of changes in equity for the period ended 31 December 2019.

LAR ESPAÑA REAL ESTATE SOCIMI, S.A. AND SUBSIDIARIES Consolidated Statement of Cash Flows for the period ended 31 December 2019

(Expressed in thousands of Euros)

	Notes	2019	2018
A) Cash flows from operating activities		16,797	19,102
Profit/(loss) before tax		79,628	133,847
Adjustments to the profit/(loss)		(21,150)	(108,113)
Profit/(loss) from adjustments to fair value of investment property	7, 10	(40, 037)	(70,471)
Amortisation of fixed assets		-	307
Impairment adjustments	24	226	(190)
Financial income	25	(12)	(27,927)
Financial costs	25	18,977	16,786
Inclusion of financial expenses in assets	7, 25	(659)	-
Changes in the fair value of financial instruments	25	1,836	1,024
Share in associates' profit/(loss) for the period	9	(473)	899
Profit/(loss) from the disposal of investment property	7	(1,008)	(28,541)
Changes in operating assets and liabilities		(26,247)	6,508
Trade and other receivables		(1,061)	(2,820)
Other current and non-current assets		(981)	(2,873)
Trade and other payables		(24,205)	12,201
Other cash flows from operating activities		(15,434)	(13,140)
Interest paid	17	(15,446)	(13,140)
Interest collected		12	-

B) Cash flows from investing activities		(53,114)	139,536
Payments for investments		(134,373)	(161,281)
Outflow of liquid in business acquisitions		-	(33,331)
Investment property	7, 10	(134,373)	(127,950)
Proceeds from sales on investments and dividends		81,259	300,817
Other financial assets		-	3,448
Associates		-	50,295
Inflow of cash in business sales	2g	3,000	52,929
Disposal of investment property	7	78,259	194,145
C) Cash flows from financing activities		5,613	(16,009)
Payments made and received for equity instruments		(39,551)	6,884
Cash proceeds from issuing capital	16	6,425	20,924
Acquisition/disposal of equity instruments	16	(45,976)	(14,040)
Receivables and payments for financial liability instruments		117,764	22,073
Issue of:
Bank borrowings	17	156,955	83,540
Debt with Group companies and associates	28	3,100	-
Refunds and amortization of:
Bank borrowings	17	(42,291)	(61,467)
Payments for dividends and remuneration from other equity instruments
Dividends paid	14f	(72,600)	(44,966)
D) Cash and cash equivalents in non-current assets held for sale	13	(97)	3,082
E) Net increase/decrease in cash or cash equivalents		(30,801)	145,711
F) Cash and cash equivalents at the beginning of the period		191,328	45,617
G) Cash and cash equivalents at the end of the period		160,527	191,328

Notes 1 to 32 and Appendix I form an integral part of the consolidated statement of cash flows for the period ended 31 December 2019.

(1) NATURE, ACTIVITIES AND COMPOSITION OF THE GROUP

Lar España Real Estate SOCIMI, S.A. (hereinafter the Parent Company or Lar España) was incorporated with limited liability under Spanish law on 17 January 2014 for an indefinite duration as Lar España Real Estate, S.A. Its name was changed to the current name on 6 February 2014.

Its registered office is located at Calle Rosario Pino 14-16, 28020 Madrid.

According to its articles of association, the Group's Parent Company's statutory activity consists of the following:

The acquisition and development of urban properties for lease.
The holding of investments in the capital of other SOCIMIs (listed corporations for investment in the real estate market - Spanish "REITs") or in other entities not resident in Spain that have an identical statutory activity and are subject to a regime similar to that applicable to SOCIMIs, insofar as they have a legal or statutory obligation to distribute profits.
The holding of investments in the capital of other resident or non-resident entities in Spain, the main activity of which is the acquisition of urban properties for lease. These entities must be subject to the same regime established for SOCIMIs insofar as they have a legal or statutory obligation to distribute profits and must also comply with the investment requirements stipulated in Article 3 of SOCIMIs Law.
The holding of shares or investments in property collective investment undertakings governed by Law 35/2003 of 4 November on collective investment undertakings or the rule that replaces in the future.
In addition to the economic activity derived from the principal statutory activity, SOCIMIs may carry out complementary activities. These are understood to be activities that do not amount to more than 20% of the total earnings of the Group in each tax period or those which can be considered complementary pursuant to prevailing legislation.

Lar España Real Estate SOCIMI, S.A. and its subsidiaries and associates (hereinafter the "Group"), the details of which are discussed in Note 4e, have as their main activity the acquisition and management of shopping centres and may invest to a lesser extent in other assets for rent or for direct sale (commercial premises, industrial premises, logistics centres, offices, residential products).

Lar España Real Estate SOCIMI, S.A. has been listed on the Spanish Stock Exchanges and the Spanish automated quotation system since 05 March 2014 (Note 14).

The Parent Company and the companies in which it participates (except Inmobiliaria Juan Bravo 3, S.L., LE Offices Marcelo Spínola 42, S.L.U. and Lar España Inversión Logística IV, S.L.U.) are regulated by Law 11/2009 of 26 October, amended by Law 16/2012 of 27 December governing SOCIMIs, which determines the requirements for filing under this tax regime, including the following:

SOCIMIs must invest at least 80% of their assets in urban properties for lease, in land for the development of urban properties for lease, provided that development commences within three years after the acquisition, or in the capital or equity of other entities referred to in Article 2.1 of Law 11/2009.

Asset value will be based on the average of the asset values reflected in the consolidated quarterly balance sheets for the period. To calculate this value, the Parent Company chose to replace the carrying amount of the items comprising those balance sheets with their market value, which would apply to all the balance sheets for the period. For these purposes, cash or receivables derived from transfers of these properties or investments, if any, carried out in the current period or previous periods shall not be included provided, in the latter case, that the period for reinvestment stipulated in Article 6 of the aforementioned Law has not expired.

Furthermore, at least 80% of income for the tax period and for financial year, excluding that derived from the transfer of those investments and properties held for carrying out the principal statutory activity, once the holding period mentioned in the following section has elapsed, must originate from property leases and dividends or shares in profits arising from said investments.

This will be calculated as a percentage of consolidated profit if the company is the parent of a group in accordance with the criteria established in Article 42 of the Spanish Code of Commerce, irrespective of domicile and of the obligation to draw up consolidated financial statements. This group shall comprise solely the SOCIMIs and other entities referenced in which Article 2.1 of the above Law.

1. The properties that comprise the SOCIMI's assets must be leased for at least three years. The period of time during which the properties have been available for lease, up to a maximum of one year, shall be included for the purposes of this calculation. This period shall be calculated as follows:
2. a) For properties included in the SOCIMI's holdings prior to availing of the regime, from the starting date of the first tax period in which the special tax regime established in the Law is applied, provided that on that date the asset was leased or available for lease. Otherwise, the provisions of the following point shall apply.
3. b) For properties developed or acquired subsequently by the Company, from the date on which they were leased or available for lease for the first time.

For shares or investments in the entities referred to in Article 2.1 of the aforementioned Law, they should be maintained as assets on the SOCIMI's balance sheet for at least three years from their acquisition or, where applicable, from the start of the first tax period in which the special tax regime established in the above Law is applied.

1. SOCIMIs and Spanish resident investees that have chosen to avail themselves of the special SOCIMI tax regime, after having satisfied any relevant trade obligations, shall be obligated to distribute the profit received in the period as dividends to their shareholders, where the distribution must be adopted within six months after each year-end, as follows:
2. a) All profits deriving from dividends or shares of profits distributed by the entities referred to in Article 2.1 of Law 11/2009.
b) At least 50% of the profits derived from the transfer of the properties and shares or equity investments referred to in Article 2.1 of Law 11/2009, held for the purpose of complying with the principal statutory activity, realised once the periods mentioned in Article 3.2 of Law 11/2009 have elapsed. The remainder of these profits must be reinvested in other properties or equity investments to be held for the purpose of complying with the statutory activity, within three years after the transfer date. Otherwise, these profits must be distributed in full together with any profits obtained during the period in which the reinvestment period expires. If the items in which the investment is made are transferred in the period during which they must be held, the associated profits must be distributed in full together with any profits obtained during the period in which the items were transferred. The mandatory distribution of profits does not apply to any portion of profits attributable to periods in which the Company will not be taxed under the special regime provided for by that law.
c) At least 80% of the remaining profits obtained.

The dividend must be paid within one month following the date of the distribution agreement.

Likewise, as set forth in Article 3 of the Law 11/2009, the entity/entities of the Group shall no longer be included in the special tax regime established in said Law and shall begin paying taxes under the general corporate income tax regime in the same tax period in which any of the following circumstances arise:

It is excluded from trading on regulated markets or in a multi-lateral trading system.
It substantially breaches the information obligations referenced in Article 11 of said Law, unless the report for the following period corrects such breach.
It fails to adopt the total or partial distribution or payment of the dividends under the terms and within the periods referenced in Article 6 of said Law. In this case, taxation under the general regime shall take place in the tax period referencing the reporting period in which the profits giving rise to said dividends were earned.
It waives the application of this special tax regime.
It fails to fulfil any other requirements stipulated in said Law in order for the entity/entities to be able to apply the special tax regime, except where the failure to fulfil said requirement is corrected within the following period. Nevertheless, the breach of the period referenced in Article 3.3 on the maximum period for holding leased assets of said Law shall not lead to exclusion from the special tax regime.

The exclusion from the special tax regime will prevent the entity from choosing to apply the special tax regime established in said Law again, until at least three years since the end of the last tax period in which the entity was included under the special tax regime.

(2) BASIS OF PRESENTATION

(a) Regulatory framework on financial information

The accompanying consolidated financial statements for the period ended 31 December 2019 have been prepared on the basis of the accounting records of Lar España Real Estate SOCIMI, S.A. and subsidiaries, and in accordance with:

The Spanish Code of Commerce and related mercantile legislation
International Financial Reporting Standards as adopted by the European Union (IFRS-EU) through Regulation (EC) No 1606/2002/EC of the European Parliament and Law 62/2003 of 31 December, on tax, administrative and social measure
Any mandatory regulations approved by Spain's Accounting and Audit Institute to implement the Spanish General Chart of Accounts and its supplementary rules
All other applicable Spanish accounting principles
Law 11/2009 of 26 October, as amended by Law 16/2012 of 27 December, which governs SOCIMIs.

In order to accurately present the consolidated equity and consolidated financial position of Lar España Real Estate SOCIMI, S.A. and subsidiaries at 31 December 2019 and the consolidated financial performance, changes in consolidated cash flows and consolidated changes in net equity for the 2019 period, these consolidated financial statements have been prepared applying the regulations in force at 31 December 2019.

(b) Functional and presentation currency

The figures disclosed in the consolidated financial statements for the period ended 31 December 2019 are expressed in thousands of Euros, which is the functional and presentation currency of the Parent Company.

(c) Comparative information

In accordance with the international financial reporting standards adopted by the European Union, the information contained in these consolidated financial statements corresponding to the annual period ended 31 December 2018 is presented for comparative purposes together with the information related to the 2019 period.

The application of the main accounting policies in 2019 and 2018 was uniform and, therefore, there were no transactions or operations that were recognised under different accounting policies that could give rise to discrepancies in the interpretation of the comparative figures for the two periods, except for the first-time impact of IFRS 16 described in Note 2f.

(d) Relevant accounting estimates, assumptions and judgements used when applying accounting principles

The information included in the consolidated financial statements is the responsibility of the Directors of the Group's Parent Company.

Relevant accounting estimates and judgements, and other estimates and assumptions have to be made when applying the Group's accounting policies to prepare its consolidated financial statements in accordance with IFRS-EU.

The following is a summary of the items requiring a greater degree of judgement or which are more complex, or where the assumptions and estimates made are significant to the preparation of the consolidated financial statements.

(i) Relevant accounting estimates and assumptions

Calculation of fair value of investment property by applying measurement models (Note 7)
Measurement of assets and liabilities held for sale (see Note 10)
Compliance with the requirements that regulate SOCIMIs (Notes 1 and 22)
Measurement adjustment for customer insolvencies. (Note 22)
Assessment of provisions and contingencies (Note 5k)
Financial risk management (see Note 22)
Determination of the fair value and nature of derivative financial instruments (Note 17).
(ii) Changes in accounting estimates

Although estimates are calculated by the Parent Company's Directors based on the best information available at 31 December 2019, future events may require changes be made to these estimates in subsequent years. The effect on the consolidated financial statements of any changes arising from the adjustments to be made in subsequent periods would be recognised prospectively, in accordance with the provisions of IAS 8.

(e) Standards and interpretations adopted since 01 January 2019

The following mandatory standards and interpretations already adopted by the European Union entered into force in 2019 and, where applicable, have been used by the Group to prepare the accompanying consolidated financial statements for 2019:

IFRS 16 Leases. This substitutes IAS 17 and the associated interpretations. The main change is a sole accounting model for tenants that includes all leases in the balance sheet.
Amendment to IFRS 9 Prepayment Features with Negative Compensation. This amendment permits the measurement at amortised cost of certain financial assets that can be cancelled in advance for an amount less than the outstanding amount of principal and interest on such principal.
IFRIC 23 Uncertainty over Income Tax Treatments (published in June 2017). This interpretation describes how the registry and measurement criteria under IAS 12 are to be applied when there is uncertainty regarding the tax authority's acceptance of a given tax treatment used by the entity.
Amendment to IAS 28 Long-term Interest in Associates and Joint Ventures. This clarifies that IFRS 9 must be applied to long-term interest in an associate or joint venture if the equity method is not used.
Changes to IFRS 3 Business combinations Annual improvement cycle 2015-2017. Acquisition of joint control over a joint operation that constitutes a business.
Changes to IFRS 11 Joint ventures Annual improvement cycle (2015-2017). Acquisition of joint control over a joint operation, which constitutes a business.
Changes to IFRS 12 Income tax Annual improvement cycle 2015-2017. Recognition of the tax impact of the remuneration of financial instruments classified as equity.
Changes to IAS 23 Borrowing costs Annual improvement cycle 2015-2017. Capitalisation of interest on outstanding financing, specific to a ready-to-use asset.
Amendment to IAS 19 Amendment, reduction or settlement of a plan. It clarifies how to calculate the service cost for the current period and the net interest for the remainder of an annual period when there is a change, reduction or settlement of a defined benefit plan.

According to the Directors' best estimate, the aforesaid standards and interpretations have not significantly affected these consolidated financial statements, with the exception of IFRS 16, which is discussed further below.

(f) Impact assessment of the adoption of IFRS 16

IFRS 16 - Leases

IFRS 16 establishes the principles for the recognition, measurement, presentation and disclosure of leases. This standard supersedes IAS 17, and applies to annual periods that have begun on or after 01 January 2019.

IFRS 16 has introduced a single lease accounting model for lessees that requires the recording of assets and liabilities for all leases longer than 12 months, with a recording similar to that used for past financial leases. In relation to the lessor's accounting, the accounting requirements previously in force under IAS 17 are substantially maintained. The directors did not consider that there had been a significant impact on the consolidated financial statements and, accordingly, there was no first-time application of this concept.

The other main change was the amendment of IAS 40 as a result of the entry into force of IFRS 16, which implies that the rights of use that the Group operates under a lease have been classified and, therefore, valued, like other investment property, at fair value in accordance with the criteria established in IAS 40. This change led the Group to classify the right to use the area where the Megapark Barakaldo recreation area is located under "investment property". This right was classified under "intangible assets" until 31 December 2018 for a carrying amount of EUR 8,554 thousand. The effect of this regulatory change is that said asset is recorded at a greater amount in that it is now measured at its fair value, which at 01 January 2019 was EUR 5,146 thousand. This figure was recorded as a change in the opening balance of "other reserves" under Consolidated Net Equity.

(g) Standards and interpretations issued but not effective at 1 January 2019

At the date of approval of these consolidated financial statements, the following standards and interpretations had been issued by the IASB but had not yet entered into force, either because the date on which they become effective is subsequent to the date of the consolidated financial statements or because they have not yet been adopted by the European Union:

(i) New regulations not yet approved for use in the European Union
- IFRS 17 Insurance Contracts (published in May 2017). This replaces IFRS 4, which includes the principles for the recognition, measurement, presentation and disclosure of insurance contracts with the objective of ensuring that the entity provides relevant and accurate information that allows financial information users to determine the effect insurance contracts have on the financial statements.
(ii) Amendments and/or interpretations adopted for use in the European Union
- Amendment to IFRS 3 Definition of "business" (published October 2018). Improvements to the definition of "business".
- Changes to IFRS 9, IAS 39 and IFRS 7 Interest rate benchmark reform (published in September 2019). Changes to la IFRS 9, IAS 39 and IFRS 7 pertaining to the current benchmark indices reform.

(iii)Amendments and/or interpretations not yet adopted for use in the European Union

Amendments to IAS 1 and IAS 8 Definition of "material". Amendments to IAS 1 and IAS 8 to align the definition of "material" with that used in the Conceptual Framework.

According to the Directors' best estimate, the aforesaid standards and interpretations would not significantly affect the Group's consolidated financial statements.

(3) DISTRIBUTION OF PROFIT

The proposal for allocating the Parent Company's profits for the 2019 period to be presented to the General Shareholders' Meeting is the following:

	Euros
Basis of allocation
Profit for the period	61,111,111
Distribution
Legal reserve	6,111,111
Dividends	55,000,000

The dividend per share to be distributed resulting from the proposal for allocating the profit is EUR 0.6276 per share.

(4) CONSOLIDATION PRINCIPLES

Companies in which the Group holds a majority of voting rights in the representative or decision-making bodies, or which are effectively managed by the Group, are fully consolidated; entities that are managed through joint control with third parties are accounted for using the equity method.

The Group companies have been consolidated using the financial statements for the annual period ended 31 December 2019.

(a) Subsidiaries

Subsidiaries are entities, including structured entities, over which the Parent Company, either directly or indirectly through subsidiaries, exercises control.

The Parent Company controls a subsidiary when it is subject, or has rights, to receive variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. The Parent Company has power over a subsidiary when it has current substantive rights that give it the ability to direct the relevant activities. The Parent Company is exposed, or has rights, to variable returns from its involvement with the subsidiary when the returns from its involvement have the potential to vary as a result of the subsidiary's economic performance.

The income, expenses and cash flows of subsidiaries are included in the consolidated financial statements from their acquisition date, which is the date on which the Group obtained effective control of the aforementioned subsidiaries. Subsidiaries are excluded from the scope of consolidation as of the date on which control is yielded.

Transactions and balances with Group companies and unrealised gains or losses have been eliminated upon consolidation.

The subsidiaries' accounting policies have been adapted to Group accounting policies for like transactions and other events in similar circumstances.

The annual accounts or financial statements of the subsidiaries used in the consolidation process reference the same submission date and for the same period as those of the Parent Company.

Details of the subsidiaries and their relevant information are presented in Appendix I to the Notes to the consolidated financial statements.

(b) Joint Ventures

Joint ventures are understood as contractual agreements whereby two or more entities ("venturers") take part in entities (jointly controlled) or carry out operations or hold assets such that any strategic decision of a financial or operational nature that affects them requires the unanimous consent of all venturers.

In the consolidated financial statements, joint ventures are measured using the equity method, which consists of incorporating the net asset value and goodwill, if any, of the investment held in the associate into the consolidated statement of financial position item, "Equity-accounted investees". The net profit or loss for each period corresponding to the percentage of the investment in these companies is reflected in the Consolidated Statement of Comprehensive Income as "Share in profit/ (loss) for the period of equity-accounted investees".

Details of the joint ventures and relevant information thereon are presented in Appendix I to the Notes on the consolidated financial statements.

(c) Business combinations

The Group applies the acquisition method for business combinations. The acquisition date is the date on which the Group obtains control of the acquiree. The consideration transferred is calculated as the sum of the acquisition-date fair values of the transferred assets, the liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree. Acquisition costs such as professional fees are not included in the cost of the business combination and are recognised in the Consolidated Statement of Comprehensive Income.

The contingent consideration, where applicable, is measured at the acquisition-date fair value. Any subsequent change to the fair value of the contingent consideration is recognised in the consolidated income statement, unless the change occurs within the one-year period established as the provisional accounting period, in which case it is reflected as a change in goodwill.

Goodwill is calculated as the difference between the sum of the consideration transferred, plus non-controlling interests, plus the fair value of any previously held investment in the acquiree, less the acquiree's identifiable net assets.

Should the acquisition cost of identifiable net assets be below their fair value, the lesser amount shall be recognised in the Consolidated Statement of Comprehensive Income for the period.

(d) Harmonisation of account items

The accounting policies of the Parent Company have been applied to all companies of the consolidated Group, in order to present the different items in the consolidated financial statements in a standardised format. Therefore, in general, uniform measurement standards have been applied.

In 2019, the same date has been used for the closing date of the financial statements of all the companies included in the scope of consolidation, or the closing dates have been temporarily standardised to match that of the Parent Company.

(e) Consolidated group

The companies included in the consolidated Group and the consolidation method used at 31 December 2019 and 31 December 2018 are as follows:

2019 Period

Company	Inclusion	Activity	% stakes	Consolidation method
Inmobiliaria Juan Bravo 3, S.L. (i)	On acquisition	Property leasing and development	50%	Shareholding
LE Logistic Alovera I y II, S.A.U.	On incorporation	Leasing of property	100%	Global
LE Logistic Alovera III y IV, S.L.U.	On acquisition	Leasing of property	100%	Global
LE Logistic Almussafes, S.L.U.	On acquisition	Leasing of property	100%	Global
LE Retail Hiper Ondara, S.L.U.	On acquisition	Leasing of property	100%	Global
LE Offices Joan Miró 21, S.L.U.	On acquisition	Leasing of property	100%	Global
LE Retail VidaNova Parc, S.L.U.	On acquisition	Leasing of property	100%	Global
LE Retail Galaria, S.L.U.	On acquisition	Leasing of property	100%	Global
LE Retail Villaverde, S.L.U.	On incorporation	Leasing of property	100%	Global
LE Retail Alisal, S.A.U.	On incorporation	Leasing of property	100%	Global
LE Retail As Termas, S.L.U.	On acquisition	Leasing of property	100%	Global
LE Offices Eloy Gonzalo 27, S.A.U.	On acquisition	Leasing of property	100%	Global
LE Retail Hiper Albacenter, S.A.U.	On incorporation	Leasing of property	100%	Global
LE Retail El Rosal, S.L.U.	On acquisition	Leasing of property	100%	Global
LE Retail Lagoh, S.L.U. (formerly Lar España Shopping Centres VIII, S.LU.)	On incorporation	Leasing of property	100%	Global
LE Retail Sagunto II, S.L.U.	On incorporation	The acquisition and development of properties for lease	100%	Global
LE Retail Vistahermosa, S.L.U.	On incorporation	Leasing of property	100%	Global
Lar España Inversión Logística IV, S.L.U.	On incorporation	The acquisition and development of properties for lease	100%	Global
LE Retail Anec Blau, S.L.U.	On incorporation	Leasing of property	100%	Global
LE Retail Albacenter, S.L.U.	On incorporation	Leasing of property	100%	Global
LE Retail Txingudi, S.L.U.	On incorporation	Leasing of property	100%	Global
LE Retail Las Huertas, S.L.U.	On incorporation	Leasing of property	100%	Global
LE Offices Marcelo Spínola 42, S.L.U.	On incorporation	Leasing of property	100%	Global
LE Retail Gran Vía de Vigo, S.A.U.	On acquisition	Leasing of property	100%	Global
LE Retail Abadía, S.L.U.	On acquisition	Leasing of property	100%	Global
LE Retail Hipermercados I, S.L.U.	On acquisition	Leasing of property	100%	Global

Company	Inclusion	Activity	% stakes	Consolidation method
LE Retail Hipermercados II, S.L.U.	On acquisition	Leasing of property	100%	Global
LE Retail Hipermercados III, S.L.U.	On acquisition	Leasing of property	100%	Global
LE Retail Rivas, S.L.U.	On acquisition	Leasing of property	100%	Global
LE Retail Cordoba Sur, S.L.U. (formerly Global Pérgamo, S.L.U.)	On acquisition	The acquisition and development of properties for lease	100%	Global

2018 Period

Company	Inclusion	Activity	% stakes	Consolidation method
Inmobiliaria Juan Bravo 3, S.L. (i)	On acquisition	Property leasing and development	50%	Shareholding
LE Logistic Alovera I y II, S.A.U.	On incorporation	Leasing of property	100%	Global
LE Logistic Alovera III y IV, S.L.U.	On acquisition	Leasing of property	100%	Global
LE Logistic Almussafes, S.L.U.	On acquisition	Leasing of property	100%	Global
LE Retail Hiper Ondara, S.L.U.	On acquisition	Leasing of property	100%	Global
LE Offices Joan Miró 21, S.L.U.	On acquisition	Leasing of property	100%	Global
LE Retail VidaNova Parc, S.L.U.	On acquisition	Leasing of property	100%	Global
LE Retail Galaria, S.L.U.	On acquisition	Leasing of property	100%	Global
LE Retail Villaverde, S.L.U.	On incorporation	Leasing of property	100%	Global
LE Retail Alisal, S.A.U.	On incorporation	Leasing of property	100%	Global
LE Retail As Termas, S.L.U.	On acquisition	Leasing of property	100%	Global
LE Offices Eloy Gonzalo 27, S.A.U.	On acquisition	Leasing of property	100%	Global
LE Retail Hiper Albacenter, S.A.U.	On incorporation	Leasing of property	100%	Global
LE Retail El Rosal, S.L.U.	On acquisition	Leasing of property	100%	Global
LE Retail Lagoh, S.L.U. (formerly Lar España Shopping Centres VIII, S.LU.)	On incorporation	The acquisition and development of properties for lease	100%	Global
LE Retail Sagunto II, S.L.U.	On incorporation	The acquisition and development of properties for lease	100%	Global
LE Retail Vistahermosa, S.L.U.	On incorporation	Leasing of property	100%	Global
Lar España Inversión Logística IV, S.L.U.	On incorporation	The acquisition and development of properties for lease	100%	Global
LE Retail Anec Blau, S.L.U.	On incorporation	Leasing of property	100%	Global

Notes to the consolidated financial statements

Annual period ended 31 December 2019

Company	Inclusion	Activity	% stakes	Consolidation method
LE Retail Albacenter, S.L.U.	On incorporation	Leasing of property	100%	Global
LE Retail Txingudi, S.L.U.	On incorporation	Leasing of property	100%	Global
LE Retail Las Huertas, S.L.U.	On incorporation	Leasing of property	100%	Global
LE Offices Marcelo Spínola 42, S.L.U.	On incorporation	Leasing of property	100%	Global
LE Retail Gran Vía de Vigo, S.A.U.	On acquisition	Leasing of property	100%	Global
LE Retail Abadía, S.L.U.	On acquisition	Leasing of property	100%	Global
LE Retail Hipermercados I, S.L.U.	On acquisition	Leasing of property	100%	Global
LE Retail Hipermercados II, S.L.U.	On acquisition	Leasing of property	100%	Global
LE Retail Hipermercados III, S.L.U.	On acquisition	Leasing of property	100%	Global
LE Retail Rivas, S.L.U.	On acquisition	Leasing of property	100%	Global

(i) Inmobiliaria Juan Bravo 3, S.L. is included in the consolidated financial statements using the equity method, in accordance with IFRS 11, because, as stipulated in the articles of association and shareholder agreements, it is jointly controlled by Lar España Real Estate SOCIMI, S.A. and LVS II LUX XIII, S.a.r.l.

(f) Changes to the composition of the Group

Note 4.e. and Appendix I of the consolidated financial statements provide relevant information regarding the Group companies that were fully consolidated and those that were included using the equity method.

Additions to the scope of the consolidation for the 2019 period

On 15 January 2019, the Parent Company acquired 100% of the shares of the company LE Retail Cordoba Sur, S.L.U. (formerly Global Pergamo, S.L.U.), a newly-constituted company which had only the amount paid as share capital for EUR 4 thousand from Latorre & Asociados Consultoría, S.L. for a total amount of EUR 4 thousand.

Exclusions from the scope of the consolidation for the 2018 period

On 16 January 2018, the Parent Company sold 100% of the company shares in its subsidiary LE Offices Egeo, S.A.U. to Inmobiliaria Colonial, SOCIMI, S.A. for a base price of EUR 49,098 thousand and for a floating price of EUR 2,124 thousand linked to the measurement of the asset at 31 December 2018. This floating price was accrued in its entirety in the 2018 period and was collected in 2019. The amount of net assets of LE Offices Egeo, S.A.U. at the time of sale totalled EUR 48,316 thousand, where the sale therefore made for a profit of EUR 2,906 thousand recorded under "Profit/(loss) from the disposal of investment property" of the 2018 Consolidated Statement of Financial Position. The value of the investment property and the treasury at the time of sale totalled EUR 76,673 thousand and EUR 369 thousand, respectively.

The sale of the holdings was effected after the property assets were held as leases for three years as required by the Law on SOCIMIs (Note 1).

On 27 September 2017, the Parent Company sold 100% of the company shares in its subsidiary LE Offices Arturo Soria, S.L.U. to Inmobiliaria Colonial, SOCIMI, S.A., with EUR 876 thousand pending collection at 31 December 2018, corresponding to the variable price accrued in such year and recognised under the "Income/loss from sale of real estate investments" on the consolidated statement of financial position for the year.

Business combinations carried out since the 2018 period

On 6 February 2018, the Parent Company acquired 100% of the stakes in Legaro Spain, S.L.U., (now LE Retail Rivas, S.L.U.) from CSRE I Spanish Holding, S.L.U.

The information on the acquired company and the consideration transferred in the business combination is as follows:

Company	Principal Activity	Date of acquisition	Percentage of shareholding (voting rights) acquired	Transferred consideration (thousands of Euros)
LE Retail Rivas, S.L.U.	Leasing of property	06/02/2018	100%	35,361

There are no contingent consideration assets or liabilities associated with this business combination.

	Thousands of Euros
	Carrying	Value
	amount	adjustment	Fair value

Investment property	53,202	10,353	63,555
Trade and other receivables	156	-	156
Other assets	798	-	798
Cash and cash equivalent assets	2,030	-	2,030
Deferred tax liabilities	-	(2,588)	(2,588)
Bank borrowings	(27,460)	-	(27,460)
Other long-term financial liabilities	(730)	-	(730)
Trade and other payables	(400)	-	(400)
Total net assets	27,596	7,765	35,361
Transferred consideration for the			35,361
100%

The total amount paid by the Parent Company was EUR 35,361 thousand, of which EUR 3,519 thousand was used to cancel the loan held by LE Retail Rivas, S.L.U. with its previous shareholders at the date of acquisition.

The assets attributed with the fair value correspond to investment property. The main asset of the acquired company was the Rivas Futura Business Park in Madrid, the fair value of which when purchased was EUR 63,555 thousand. Said asset is leased to several tenants, through lease contracts for the commercial premises that constitute the asset.

The methodology used to calculate the fair value consisted in preparing income and expense, updated at the date of the business combination using a market discount rate. The residual value was obtained by applying a return rate to the net profits or losses from the last projected period.

On the date of acquisition, based on IAS 12 on Income Tax, "Deferred tax liabilities" included 25% of the difference between the carrying amount and the fair value of the asset because of the capital gains that will be taxed in the future when the asset is sold.

The Group first identified the various assets and liabilities acquired in order to calculate the fair value thereof. With regard thereto, with the exception of the investment property, the Group did not identify significant differences compared to the carrying amounts at which they were recorded in the financial statements of the acquired business. No contingent liabilities were recognised in the business combination.

The profit and loss and income from leasing activities incorporated in the 2018 period since the date of acquisition and included in the consolidated income statement for the 2018 period amounted to EUR (78) thousand and EUR 3,290 thousand, respectively.

If the acquisition had taken place on 01 January 2018 (the beginning date of each accounting period of the acquired company), the results and income, both contributed to the Group, would have changed by EUR 93 thousand and EUR 551 thousand. The Directors have used the income received from 01 January 2018 when determining said amounts.

On 6 February 2018, the Company changed its name to LE Retail Rivas, S.L.U. Likewise, on 10 August 2018 the company requested the ability to avail itself of the special tax regime for SOCIMIs, said taxation being retroactive to 01 January 2018.

The net cash flow in the acquisition would be:

	Thousands of Euros
Cash paid: - For stakes	35,361
Less: Cash and cash equivalents	(2,030)
Total	33,331

(5) ACCOUNTING PRINCIPLES

(a) Investment property and intangible assets

Investment property is property, including that which is under construction or being developed for future use as investment property, which is earmarked totally or partially to earn income or for capital appreciation or both, rather than for use in the production or supply of goods or services, for administrative purposes within the Group or for sale in the ordinary course of business.

Assets classified as investment property are in operation and occupied by various tenants. These properties are intended for lease to third parties. The Directors of the Parent Company, at the date these financial statements were prepared, do not consider the disposal of these assets in the upcoming year to be very likely and have therefore decided to maintain these assets in the consolidated statement of financial position as investment property, except those assets discussed in the adjoined Note 10.

Investment property is presented at fair value at the reporting date and is not depreciated. Profits or losses derived from changes in the fair value of the investment property are recognised when they arise.

Execution and finance costs are capitalised during the period in which the works are carried out. When the asset enters into service it is recognised at fair value.

When determining the fair value of its investment property, the Group commissions independent appraisers with to appraise all of its assets at least on 30 June and 31 December of each period. Buildings are appraised individually, taking into consideration each of the lease contracts in force at the appraisal date. Buildings with areas that have not been rented out are appraised on the basis of estimated future rent, minus a marketing period.

As a general rule, intangible assets are initially valued at their purchase price or cost of production. These assets are subsequently reduced by the corresponding accumulated amortisation and, where appropriate, impairment losses. Said assets are amortised based on their useful lives.

(b) Leases

(i) Classification of leases

The Group classifies leases as finance leases when substantially all the risks and rewards incidental to ownership of the leased asset are transferred to the lessee under the terms and conditions of the lease. Otherwise they are classified as operating leases. The Group has not engaged in any finance lease transactions.

(ii) Operating leases

Lessor accounting records

Assets leased to third parties under operating lease contracts are presented according to their nature.

Operating lease income, net of incentives granted, is recognised as income on a straight-line basis over the lease term.

Contingent leases are recognised as income when it is probable that they will be obtained, which is generally when the conditions agreed in the contract arise.

(c) Financial instruments

(i) Classification of financial instruments

Financial instruments are recognised when the Group becomes party to the contract or legal transaction, in accordance with the terms set out therein and are classified at initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the economic substance of the contractual arrangement and the definitions of a financial asset, a financial liability and an equity instrument in IAS 32 Financial Instruments: Presentation. The Group reclassifies financial assets when the business model for the management thereof is changed. The Group does not reclassify financial liabilities.

At 31 December 2019 the Group mainly has the following financial assets and liabilities: deposits, receivables, treasury, financial debt, hedging derivatives and payables. With the exception of the derivatives, which are discussed in Note 5d, all financial assets and liabilities are measured at amortised cost.

Financial assets and liabilities measured at amortised cost

The Group classifies loans and receivables and financial liabilities (including trade and other payables) under financial assets and liabilities at amortised cost.

This item comprises non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They mainly represent security deposits received from lessees and placed with public bodies or bank deposits and accrued interest receivable on the deposits. These assets are reported as current unless they mature more than twelve months after the reporting date, in which case they are classified as noncurrent. Loans and receivables generated in exchange for cash deliveries or current transactions are included under financial assets with associates and trade and other receivables in the consolidated statement of financial position, and the security deposits and guarantees are shown under non-current financial assets or other current financial assets, according to when they mature.

These financial assets liabilities at amortised cost are initially recognized at their fair value, approximately the directly attributable transaction costs incurred, and they are subsequently measured at amortised cost, using the effective interest rate method.

(ii) Impairment and uncollectibility of financial assets

The Group recognises a value adjustment for credit losses expected of the financial assets measured at amortised cost.

At each year-end the Group measures the value adjustment as the equivalent of the credit losses expected in the following twelve months, for financial assets whose credit risk has not significantly increased since their initial recognition or when the Group believes that the credit risk of a financial asset is no longer significantly greater.

Expected credit losses comprise the difference between the contractual cash flows and the expected cash flows, both in terms of amount and duration.

If the financial asset is secured by collateral, impairment is determined based on the present value of the cash flows that could be generated from the foreclosure of the asset, less foreclosing and sale costs, discounted at the original effective interest rate. If the financial asset is not secured by collateral, the Group applies the same criteria when the foreclosure is considered probable.

The Group considers cash and cash equivalents to have low credit risk pursuant to the credit rankings of the banks where the cash and the deposits are deposited.

The Group calculates expected credit losses for trade receivables for the entire life of the financial assets as a group, given that all of these assets are receivables from leases. Expected credit losses are estimated based on all receivables once same pass maturity by more than 90 days, based on the projected and past information that is reasonably available.

After outstanding receivables pass maturity by more than 90 days they are considered irrecoverable and are derecognised, regardless of whether the Group continues to actively manage the collection thereof through negotiations or the legal system. Any subsequent recovery of derecognised amounts is recognised as credit risk gains.

(iii)Derecognitions, changes and cancellations of financial assets

Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire or have been transferred and the Group has substantially transferred all the risks and benefits of ownership thereof.

(iv) Derecognition and modifications of financial liabilities

The Group derecognises all or part of a financial liability when it either discharges the liability by paying the creditor, or is legally released from primary responsibility for the liability, either by process of law or by the creditor.

The exchange of debt instruments between the Group and the counterparty or substantial modifications of initially recognised liabilities are accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability, provided the instruments have substantially different terms.

The Group considers the terms substantially different if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective interest rate, is at least 10% different from the discounted present value of the remaining cash flows of the original financial liability.

If the exchange is accounted for as an extinguishment of the financial liability, any costs or fees incurred are recognised as part of the gain or loss on the extinguishment. If the exchange is not accounted for as an extinguishment, any costs or fees incurred adjust the carrying amount of the liability and are amortised over the remaining term of the modified liability.

(v) Offsetting principles

A financial asset and a financial liability are offset only when the Group currently has the legally enforceable right to offset the recognised amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

(d) Derivative financial instruments and accounting of hedging transactions

Derivative financial instruments are initially recognised as explained above for financial assets and liabilities. Derivative financial instruments that do not meet the criteria for accounting hedges explained below are classified and measured as financial assets and liabilities at fair value through profit or loss. Derivative financial instruments that meet the criteria for accounting hedges are initially recognised at fair value through net equity. In both cases the specific profit, loss or cash flow component related to the hedging instrument that is excluded from the measurement of the hedging efficiency is recognised as financial income or expense, as appropriate.

The Group uses derivative financial instruments to cover the risks to which its activities, operations and future cash flows are susceptible. These risks are mainly changes in interest rates.

At the beginning of the hedges, the Group formally documents and designs the hedging relationships and the target and the strategy the Group uses for said hedges. Such documentation includes identification of the hedging instrument, the hedged item, the nature of the hedged risk and how the Group measures the effectiveness of the hedge.

Hedging transactions are only accounted for when there is an economic relationship between the hedged item and the hedging instrument, when the credit risk does not have a dominant effect on the value adjustments stemming from such economic relationship and when the hedging ratio of the hedging relationship is the same as the ratio of the amount of the hedged item that the Group actually uses to hedge such amount of the hedged item. Nonetheless, such designation must not represent an imbalance between the weights of the hedged item and the hedging instrument that results in an ineffective hedge, regardless of whether such effectiveness is recognised, that could lead to an accounting result that contradicts the purpose of the hedge accounting.

At the beginning of the hedging relationship and on an ongoing basis, the Group evaluates whether the relationship meets the effectiveness requirements prospectively. The Group evaluates the effectiveness at the close of each accounting period or when there are major changes that affect the effectiveness requirements.

The Group performs a qualitative evaluation of the effectiveness, provided the fundamental conditions of the instrument and the hedged item coincide. When the fundamental conditions do not fully coincide, the Group uses a hypothetical derivative with fundamental conditions that are identical to those of the hedged item to evaluate and measure the ineffectiveness.

In order to measure the ineffectiveness, the Group considers the time value of money, such that the hedged item is determined in terms of present value and therefore the change in the value of the hedged item includes the effect of the time value.

(i) Discontinued posting of hedges

If a hedging relationship ceases to meet the effectiveness requirements associated with the hedging ratio, but the risk management target for this relationship has not changed, the Group adjusts the hedging ratio so the hedging relationship criteria can be met (rebalancing). Rebalancing is done by adjusting the amount of the hedged item or the hedging instrument in an existing hedging relationship in order to maintain a hedging relationship that meets the effectiveness requirements. The Group posts rebalancing as a continuation of the hedging relationship. On the rebalancing date, the Group determines the ineffectiveness of the relationship and recognises any ineffectiveness in profit or loss.

The Group ceases to post the hedging prospectively only when all or part of the hedging relationship ceases to meet the relevant requirements. This includes situations in which the hedging instrument expires or is sold, terminated or exercised. To this end, the substitution or renewal of a hedging instrument is not considered the expiration or termination thereof, provided the transaction is consistent with the documented risk management target of the Group. At that time, any cumulative profit or loss corresponding to the hedging instrument that has been recognised under net equity remains in net equity until the envisaged transaction takes place. When the hedged transaction is not expected to take place, the cumulative net profit or loss recognised in net equity is transferred to the consolidated statement of comprehensive income.

At 31 December 2019, after evaluating previous periods, the hedging relationships corresponding to the interest rate hedging financial instruments contracted by the Group companies LE Retail El Rosal, S.L.U., LE Retail As Termas, S.L.U. and LE Retail Hiper Ondara, S.L.U., were classified as ineffective. Therefore, the Group recognised the change in fair value of said instruments in the amount of EUR 711 thousand on the Consolidated Statement of Comprehensive Income. In addition, at 31 December 2019, the impact on the income statement of recycling equity of the financial instruments of LE Retail El Rosal, S.L.U. and LE Retail As Termas, S.L.U., and LE Retail Hiper Ondara,S.L.U., totalled EUR 1,125 thousand (Note 17c).

The fair value of the various derivative financial instruments is calculated using the measurement techniques described in the following note.

(e) Measurement techniques and assumptions applicable to fair value measurement

Fair values of financial assets and liabilities are determined as follows:

The fair values of financial assets and liabilities with standard terms and conditions that are traded on active markets and cash assets are determined by referencing the prices listed on the market.
The fair value of other financial assets and liabilities (excluding derivative instruments) are determined according to the measurement models generally accepted on the cash flow discount basis using prices of observable market transactions and contributor quotes for similar instruments.
The fair value of interest rate derivatives is calculated by updating future settlements between the fixed and variable rate, according to implicit market interest rates, which are obtained from long-term swap rate curves. Implicit volatility is used for the calculation through formulas for option pricing and for measurement of cap and floor fair values.

Furthermore, in the measurement of the derivative financial instruments, the risk incidental to the hedged element or position must be effectively eliminated throughout the expected term of the hedge and the fact that the financial derivative was contracted specifically to hedge certain balances or transactions and the manner in which that effective hedge was expected to be achieved and measured must be documented. In addition, with the adoption of IFRS 13, the incidental risk requires that the credit risk of the parties involved in the contract, both one's own risk and that of the counterparty, be included in the measurement of derivatives. The Group applied the discounted cash flow methodology, using a discount rate affected by the Group's specific risk.

The financial instruments measured subsequent to their initial recognition at fair value are classified under levels 1-3, based on the degree to which the fair value is observable.

Level 1: listed price (unadjusted) on active markets for identical assets or liabilities.
Level 2: observable inputs other than the listed prices used in Level 1 for assets or liabilities, directly (i.e., such as prices) or indirectly (i.e., derived from prices).
Level 3: assets referencing measurement techniques, including inputs for assets or liabilities that are not based on observable market data (unobservable inputs).

The Group's financial assets and liabilities measured at fair value at 31 December 2019 are as follows:

		Thousands of Euros
	Level 1	Level 2	Level 3	Total
Derivative financial liabilities (see Note 17c)	-	5,239	-	5,239
	-	5,239	-	5,239

The Group's financial assets and liabilities measured at fair value at 31 December 2018 are as follows:

		Thousands of Euros
	Level 1	Level 2	Level 3	Total
Derivative financial liabilities (see Note 17c)	-	4,071	-	4,071
	-	4,071	-	4,071

Additionally, Note 7 includes information regarding the determination of the fair value of investment property, pursuant to the measurement techniques described in said note.

(f) Treasury shares of the Parent Company

The Group's acquisition of equity instruments of the Parent Company is recognised separately at cost of acquisition in the consolidated statement of financial position as a decrease in equity, irrespective of the reason for the purchase. Any gains or losses in transactions with own equity instruments are not recognised.

The subsequent depreciation of the equity instruments of the Parent Company entails a capital decrease equivalent to the par value of the shares. Any positive or negative difference between the purchase price and the par value of the shares is debited or credited to reserve accounts.

Transaction costs related to equity instruments are accounted for as a decreased net equity.

(g) Distributions to shareholders

Dividends are in cash and are recognised as a decrease in equity when approved by the Shareholders' General Meeting.

The Parent Company files taxes under the special regime for SOCIMIs. Pursuant to Article 6 of Law 11/2009 of 26 October 2009, amended by Law 16/2012 of 27 December, SOCIMIs adopting the special tax regime are required to distribute profit for the period as dividends to shareholders after settling all corresponding trading obligations, as per the terms discussed in Note 1. The dividend distribution must be agreed within six months after each period end and the dividend paid within one month from the date of the agreement.

(h) Cash and cash equivalents

Cash and cash equivalents include cash on hand and demand bank deposits in financial institutions. This category also includes other short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. An investment qualifies as a cash equivalent when it has a maturity of less than three months from the date of acquisition.

(i) Employee benefits

Short-term employee benefits comprise employee remuneration other than termination benefits that are expected to be settled wholly before twelve months after the end of the reporting period in which the employees render the related services.

The Group recognises the expected cost of profit-sharing and bonus plans for workers when it has a present legal or constructive obligation to make such payments as a result of past events and a reliable estimate of the obligation can be made.

(j) Payments based on shares

The Group recognises, on one hand, goods and services received as an asset or an expense, according to the nature thereof, when same is received, and on the other, the corresponding liability if the transaction is settled with an amount that is based on the value of the equity instruments.

(k) Provisions

In preparing the consolidated financial statements, the Parent Company's Directors differentiate between:

(i) Provisions: balances payable covering present obligations arising from past events, the cancellation of which is likely to cause an outflow of resources, but are uncertain as to amount and/or time of cancellation.

(ii) Contingent liabilities: possible obligations that arise from past events and whose future existence depends on the occurrence or non-occurrence of one or more future events not under the control of the Company.

The consolidated financial statements include all the relevant provisions that are more likely than not to entail an obligation. Unless they are considered remote, contingent liabilities are not recognised in the consolidated financial statements, but information on same is provided in the notes to the report.

Provisions are measured at the present value of the best possible estimate of the amount that will be required to settle or transfer the liability, taking into account the information available on the event and the consequences thereof; the adjustments that arise due to updating said provisions are recognised as financial expenses as they accrue.

The compensation to be received from a third party on settlement of the obligation, provided that there is no doubt that said reimbursement will be received, is recognised as an asset, except when there is a legal relationship whereby a portion of the risk has been externalised as a result of which the Group is not liable; in this situation, the compensation will be taken into account for the purpose of estimating the amount in which the corresponding provision, where appropriate, will be stated.

(l) Revenue recognition

Revenue from leases is recognised at the fair value of the consideration received or receivable therefrom.

Discounted and waived rent is recognised by allocating the total amount of rent waived during the rent-free period or of the bonus on a straight-line basis over all the periods in which the tenant's contract is in force. Should the rental contract end sooner than expected, the unrecognised portion of the outstanding rent or bonus will be recorded in the last period prior to contract termination.

(m) Lease of investment property to third parties

The principal activity of the companies that form the Group comprises the acquisition and lease of shopping centres and business parks. However, it may invest on a smaller scale in other assets for rent or for direct sale (commercial premises, office buildings, logistics bays, logistics centres and/or residential products). Group revenue originates from the lease of this investment property to third parties.

Revenue derived from the lease of investment property is recognised in accordance to the stage of completion at the reporting date when the outcome of the transaction can be reliably estimated. The Group companies recognise revenue from leases on a monthly basis in accordance with the terms and amounts agreed in the different agreements with their tenants. This revenue is recognised only when it can be measured reliably and it is probable that the economic benefits derived from the lease will be received.

When the outcome of the transaction involving the rendering of services cannot be estimated reliably, revenue is recognised only to the extent that the recognised expenses are recoverable.

Invoices issued to tenants include EUR 24,533 thousand (EUR 20,689 thousand at 31 December 2018) rebilled for communal charges (shared utility costs, services related to the management of the property, taxes, etc.). This amount is presented, according to its nature, compensated the relevant expense under "Other operating expenses" in the accompanying Consolidated Statement of Comprehensive Income at 31 December 2019.

The Group regularly assesses whether any service provision contracts are onerous and, where applicable, recognises the necessary provisions.

(n) Profit/ (loss) from the disposal of investment property

Income from disposals of investment property is recognised on an accruals basis, i.e. when the goods or services in question are provided rather than when the cash is actually received or disbursed. Said income is measured at the fair value of the consideration received, less any sales costs, rather than the carrying amount of the transferred asset.

Income from sales is recognised when the risks and benefits inherent to the ownership of the sold property are transferred to the purchaser and the day-to-day management and effective control over said asset are not retained.

(o) Income tax

(i) General regime

The income tax expense or tax income includes the part related to the current income tax expense or tax income and the part corresponding to the deferred tax expense or income.

The current tax is the amount that the Group satisfies as a consequence of the fiscal settlements of the income tax related to a period. Deductions and other tax relief applicable to payable taxes, excluding withholdings and payments on account, and tax loss carryforwards applied in the current reporting period are accounted for as a decrease in current tax.

Deferred tax income or expenses derived from the recognition and cancellation of deferred tax assets and liabilities. These include temporary differences measured at the amount expected to be payable or recoverable originating from the differences between the carrying amounts of the assets and liabilities and their tax values, as well as the tax-loss carryforwards pending compensation and any receivables due to tax deductions that have not been fiscally applied. These amounts are recognised by applying the temporary difference or deduction corresponding to the tax rate at which they are expected to be recovered or settled.

The Group companies availing themselves of the general corporate income tax regime are Inmobiliaria Juan Bravo 3, S.L.U. (included using the equity method), LE Offices Marcelo Spínola 42, S.L.U. and Lar España Inversión Logística IV, S.L.U.

(ii) Tax regime for SOCIMIs

The Parent Company and the subsidiaries (with the exception of Inmobiliaria Juan Bravo 3, S.L., LE Offices Marcelo Spínola 42, S.L.U. and Lar España Inversión Logística IV, S.L.U.) file tax returns under the special regime for SOCIMIs. This tax regime, following the amendment introduced by Law 16/2012 of 27 December, is based on paying a corporate income tax rate of zero percent, provided certain requirements are met (Note 1).

Pursuant to the ninth article of Law 11/2009 of 26 October, amended by Law 16/2012 of 27 December, governing SOCIMIs, the entity shall be subject to a special tax rate of 19% on the total amount of dividends or shares in profits distributed among shareholders with an interest in the entity exceeding 5%, when such dividends are tax-exempt or are taxed at a rate of less than 10% at the shareholders' seat of economic activity. Where applicable, this special tax must be paid by the SOCIMI within two months of the dividend distribution date. The Group has established a procedure ensuring that shareholders confirm their tax status and, where applicable, 19% of the amount of the dividend distributed to the shareholders that do not meet the aforementioned tax requirements is withheld.

(p) Segment reporting

An operating segment is a component of the Group that engages in business activities from which it may earn revenue and incur expenses, whose operating results are regularly reviewed by the Group's chief operating decision-maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

(q) Classification of assets and liabilities as current and non-current

The Group classifies assets and liabilities in the consolidated statement of financial position as current and non-current. To this end, assets and liabilities are classified as current if they meet the following criteria:

Assets are classified as current when they are expected to be realised or are intended for sale or consumption in the Group's normal operating cycle, they are held primarily for the purpose of trading, they are expected to be realised within twelve months after the reporting date or are cash or a cash equivalent, unless the assets may not be exchanged or used to settle a liability, for at least twelve months after the reporting date.
Liabilities are classified as current when they are expected to be settled in the Group's normal operating cycle, they are held primarily for the purpose of trading, they are due to be settled within twelve months after the reporting date or the Group does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

(r) Environmental information

The Group takes measures to prevent, reduce and repair any damage caused to the environment by its activities.

Expenses derived from environmental activities are recognised as operating expenses in the period in which they are incurred. However, due to its nature, the Group's activity does not have a significant impact on the environment.

(s) Statement of cash flows

The statement of cash flows has been prepared using the indirect method and the following expressions and definitions:

Cash flows: inflows and outflows of cash and cash equivalents, the latter being short-term, highly liquid investments not subject to significant risk of changes in value.
Operating activities: the Group's usual activities and other activities that cannot be classified as investing or financing activities.
Investing activities: the acquisition, sale or other disposal of long-term assets and other investments not included under cash and cash equivalents.
Financing activities: activities that result in changes in the size and composition of equity and of liabilities that do not form part of operating activities.

(t) Non-current assets held for sale and liabilities connected to non-current assets held for sale

The Group classifies a non-current asset or a disposal group, as well as directly connected liabilities, as being held for sale when a decision has been made to sell same and such sale is expected to happen within the next twelve months.

These assets or disposal groups are measured at their carrying amount or fair value after deducting the necessary sales costs, whichever is less.

Assets classified as non-current and held for sale are not amortised, but at the date of each balance sheet the appropriate value adjustments are made so the carrying value does not exceed the fair value minus sales costs.

Income and expenses generated by non-current assets and disposal groups comprising elements held for sale that do not meet the requirements to be classified as discontinued operations are recognised in the Consolidated Statement of Comprehensive Income that corresponds to the nature of said asset, disposal group or liability.

(6) SEGMENT REPORTING

(a) Operating segments

At 31 December 2019 the Group comprises the operating segments listed below, with the following income and principal services:

Shopping centres: Txingudi, Las Huertas, Hipermercado Albacenter, Anec Blau, Portal de la Marina, Albacenter, As Termas, Hipermercado Portal de la Marina, El Rosal, VidaNova Parc, Lagoh, Gasolinera As Termas, Parque Comercial Megapark Barakaldo, Parque Comercial Vistahermosa, Gran Vía de Vigo, Parque Comercial y Galería Abadía, Portfolio Supermercados and Parque Comercial Rivas.
Logistics bays and office buildings: In 2019 and 2018, all the Group's offices and logistics bays were sold as they were not core assets in accordance with the latest approved business plan (see Note 7 and 10).
Residential: Shareholding in Inmobiliaria Juan Bravo 3, S.L., the developer of a housing block on Calle Juan Bravo in Madrid, which have been delivered virtually in full as of the date these financial statements were drawn up.

The profit generated by each segment and by each asset within each segment is used as a measure of its performance because the Group considers this to be the most relevant information with which to assess the profits generated by specific segments as compared with other groups that operate in these businesses.

Information broken down by segment of these activities in 2019 and 2018 are as follows:

Notes to the consolidated financial statements

Annual period ended 31 December 2019

Consolidated Statement of Comprehensive Income

	Thousands of Euros
	2019
	Shopping centres	Logistics and office buildings	Residential (Stakes in associates)	Head Office and Central Services *	Total
Revenue from external customers:
Revenue from leases	80,900	228	-	-	81,128
Total revenue	80,900	228	-	-	81,128
Other income	2,469	77	-	728	3,274
Changes to the fair value of investment property	40,037	-	-	-	40,037
Employee benefits expense Depreciation charges	-	-	-	(424)	(424)
Other operating expenses **	(21,230)	(510)	-	(3,986)	(25,726)
Profit/(loss) from the disposal of investment property	-	1,008	-	-	1,008
Profit/(loss) from operating activities	102,176	803	-	(3,682)	99,297
Net finance cost **	(19,860)	10	-	(292)	(20,142)
Profit/(loss) for the period of joint ventures accounted for using the equity method	-	-	473	-	473
Profit for the period from continuing operations	82,316	813	473	(3,974)	79,628
Income tax expense/income	-	1,102	-	-	1,102
	82,316	1,915	473	(3,974)	80,730

* The line item "Head office and central services" mainly comprises the corporate income and expenses that cannot be assumed by the Group's Parent Company.

** In the 2019 period, the Parent Company rebilled the amount corresponding to "Operating expenses" to the subsidiaries. The amount attributable to shopping centres at 31 December 2019 amounted to EUR 11,425 thousand, EUR 72 thousand to office buildings and the remainder to corporate units. In addition, the Parent Company rebilled the amount corresponding to "Financial expenses accrued on the bonds" to subsidiaries. The amount attributable to shopping centres amounted to EUR 4,364 thousand.

Notes to the consolidated financial statements

Annual period ended 31 December 2019

Consolidated Statement of Comprehensive Income	Thousands of Euros 2018
	Shopping centres	Office buildings	Logistics bays	Residential (Stakes in associates)	Head Office and Central Services *	Total
Revenue from external customers:
Revenue from leases	73,218	1,582	3,041	-	-	77,841
Total revenue	73,218	1,582	3,041	-	-	77,841
Other income	3,706	26	1	-	-	3,733
Changes to the fair value of investment property	55,601	9,017	5,853	-	-	70,471
Employee benefits expense	-	-	-	-	(502)	(502)
Depreciation charges	(307)	-	-	-	-	(307)
Other operating expenses **	(44,386)	(4,553)	(2,271)	-	(3,938)	(55,148)
Profit/(loss) from the disposal of investment property	3,119	8,400	17,022	-	-	28,541
Profit/(loss) from operating activities	90,951	14,472	23,646	-	(4,440)	124,629
Net finance cost **	(14,967)	(1,918)	(758)	27,890	(130)	10,117
Profit/(loss) for the period of joint ventures accounted for using the equity method	-	-	-	(899)	-	(899)
Profit for the period from continuing operations	75,984	12,554	22,888	26,991	(4,570)	133,847
Income tax expense/income	(231)	(2,205)	(2,103)	-	-	(4,539)
	75,753	10,349	20,785	26,991	(4,570)	129,308

* The line item "Head office and central services" mainly comprises the corporate income and expenses that cannot be assumed by the Group's Parent Company.

** In the 2018 period, the Parent Company rebilled the amount corresponding to "Operating expenses" to the subsidiaries. The amount of EUR 35,485 thousand was attributable to shopping centres at 31 December 2018. Of said amount EUR 3,728 thousand was attributable to office buildings, EUR 2,069 thousand to logistics bays and the rest is held under the Head Office. In addition, the Parent Company rebilled the amount corresponding to "Financial expenses accrued on the bonds" to subsidiaries. The amount of EUR 2,440 thousand was attributable to shopping centres, EUR 1,152 thousand was attributable to office buildings, EUR 758 thousand to logistics bays.

Notes to the consolidated financial statements

Annual period ended 31 December 2019

Consolidated Statement of Financial Position	Thousands of Euros
	31 December 2019
	Shopping centres	Logistics and office buildings	Residential (Stakes in associates)	Head Office and other Central Services	Total
Intangible assets	2	-	-	-	2
Investment property	1,449,344	-	-	-	1,449,344
Equity-accounted investees	-	-	5,100	-	5,100
Non-current financial assets	13,149	-	-	-	13,149
Trade and long-term other receivables	3,857	-	-	-	3,857
Total non-current assets	1,466,352	-	5,100	-	1,471,452
Non-current assets held for sale	103,790	-	-	-	103,790
Trade and other receivables	12,321	256	-	2,067	14,644
Other current financial assets	85	-	-	104	189
Other current assets	2,265	40	-	345	2,650
Cash and cash equivalents	93,633	29,191	-	37,703	160,527
Total current assets	212,094	29,487	-	40,219	281,800
Total assets	1,678,446	29,487	5,100	40,219	1,753,252

37

Notes to the consolidated financial statements

Annual period ended 31 December 2019

Consolidated Statement of Financial Position

	Thousands of Euros
	31 December 2019
	Shopping centres	Logistics and office buildings	Residential (Stakes in associates)	Head Office and other Central Services	Total
Liabilities connected to non-current assets held for sale	1,570	-	-	-	1,570
Financial liabilities from issue of bonds and other marketable securities	142,858	-	-	-	142,858
Bank borrowings	547,768	-	-	-	547,768
Deferred tax liabilities	17,201	-	-	-	17,201
Derivatives	5,239	-	-	-	5,239
Other non-current liabilities	19,548	6	-	39	19,593
Debt with Group companies and associates	-	-	3,199	-	3,199
Trade and other payables	29,465	1,422	-	2,157	33,044
Total current and non-current liabilities	763,649	1,428	3,199	2,196	770,472

Notes to the consolidated financial statements

Annual period ended 31 December 2019

Consolidated Statement of Financial Position	Thousands of Euros
		31 December 2018
	Shopping centres	Office Buildings	Logistics bays	Residential (Stakes in associates)	Head Office and other Central Services	Total
Intangible assets	8,556	-	-	-	-	8,556
Investment property	1,363,339	-	307	-	-	1,363,646
Financial assets with associates	-	-	-	-	-	-
Equity-accounted investees	-	-	-	4,627	-	4,627
Non-current financial assets	11,332	94	-	-	-	11,426
Trade and long-term other receivables	2,733	-	-	-	-	2,733
Total non-current assets	1,385,960	94	307	4,627	-	1,390,988
Non-current assets held for sale	-	78,081	-	-	-	78,081
Trade and other receivables	10,254	620	488	-	2,400	13,762
Other current financial assets	3,139	-	-	-	129	3,268
Other current assets	3,639	-	56	-	481	4,176
Cash and cash equivalents	35,980	20,669	1,117	-	133,562	191,328
Total current assets	53,012	99,370	1,661	-	136,572	290,615
Total assets	1,438,972	99,464	1,968	4,627	136,572	1,681,603

Notes to the consolidated financial statements

Annual period ended 31 December 2019

Consolidated Statement of Financial Position

	Thousands of Euros 31 December 2018

	Shopping centres	Office buildings	Logistics bays	Residential (Stakes in associates)	Head Office and other Central Services	Total
Liabilities connected to non-current assets held for sale	-	810	-	-	-	810
Financial liabilities from issue of bonds and other marketable securities	-	-	-	-	142,559	142,559
Bank borrowings	434,861	-	-	-	-	434,861
Deferred tax liabilities	17,201	2,204	-	-	-	19,405
Derivatives	4,071	-	-	-	-	4,071
Other non-current liabilities	17,100	140	-	-	-	17,240
Trade and other payables	38,373	1,101	2,799	-	11,886	54,159
Total current and non-current liabilities	511,606	4,255	2,799	-	154,445	673,105

(b) Geographical segments

Revenue and assets by geographical segment are presented on the basis of the location of the assets.

The table below summarises, by geographical area, the revenue, investment property (including those classified as non-current assets held for sale) and intangible assets (solely those that generate income) of each of the Group's assets:

	Thousands of Euros
	31 December 2019
	Revenue	%	Investment property	Non-current assets held for sale (Note 10)	Intangible assets	%
Basque Country	17,307	21.34	217,336	64,040	-	18.13
Galicia	15,666	19.31	254,980	-	-	16.43
Community of Valencia	14,939	18.41	233,345	-	-	15.04
Castile–La Mancha	9,064	11.17	151,220	-	-	9.75
Castile and León	8,134	10.03	110,900	11,580	-	7.89
Catalonia	5,245	6.47	102,063	-	-	6.58
Community of Madrid	4,463	5.50	67,500	-	-	4.35
Andalusia	4,408	5.43	312,000	-	-	20.11
Balearic Islands	851	1.05	-	11,870	-	0.77
Cantabria	481	0.59	-	6,710	-	0.43
Navarre	372	0.46	-	5,260	-	0.34
La Rioja	198	0.24	-	2,760	-	0.18
	81,128	100.00	1,449,344	102,220	-	100.00

	31 December 2018
	Revenue	%	Investment property	Non-current assets held for sale (Note 10)	Intangible assets	%
Basque Country	17,408	22.36	273,296	-	8,554	19.46
Galicia	15,315	19.68	260,560	-	-	17.99
Community of Valencia	12,473	16.02	240,932	-	-	16.63
Castile–La Mancha	11,583	14.89	143,760	-	-	9.92
Castile and León	7,779	9.99	122,810	-	-	8.48
Catalonia	6,593	8.47	97,060	-	-	6.70
Community of Madrid	4,268	5.48	67,500	76,400	-	9.93
Balearic Islands	840	1.08	11,547	-	-	0.80
Navarre	779	1.00	5,579	-	-	0.39
Cantabria	608	0.78	6,187	-	-	0.43
La Rioja	195	0.25	2,415	-	-	0.16
Andalusia	-	-	132,000	-	-	9.11
	77,841	100.00	1,363,646	76,400	8,554	100.00

Thousands of Euros

The Group carries out its activity entirely in Spain.

(7) INVESTMENT PROPERTY

At 31 December 2019 the investment property owned by the Group mainly comprises 15 shopping centres and business parks, 2 hypermarkets (Ondara and Albacenter), 2 petrol stations and 22 commercial premises, and the land on which these are located, which are held to obtain rental income and are therefore not occupied by the Group.

Investment property is presented at fair value.

The Group has recognised the following investment property at fair value at 31 December 2019 and 31 December 2018:

	Thousands of Euros
	Investment property
	31.12.2019	31.12.2018
Shopping centres and single-tenant commercial properties	1,449,344	1,362,339
Logistics bays and other assets	-	1,307
	1,449,344	1,363,646

The composition and movements that had occurred in the accounts included under the heading "Investment property" in the Group's consolidated financial statement of financial position at 31 December 2019 and 2018 were as follows:

	Thousands of Euros
	31.12.2019	31.12.2018

Balance at the beginning of the period	1,363,646	1,306,350
Additions for the period	133,669	123,000
Inclusion of financial expenses in assets	659	-
Transfers, first application of IFRS 16 (Note 2f)	13,700	-
Non-current assets held for sale (Note 5t)	(102,550)	(169,382)-
Change to the scope of consolidation (Note 4f)	-	63,555
Sale of property	(307)	(25,207)
Changes in fair value	40,527	65,330
Balance at the end of the period	1,449,344	1,363,646
Fair value	1,449,344	1,363,646

Additions and changes to the scope

2019 Period

		Thousands of Euros
Type of asset	Company	Additions
Shopping centre	Lagoh (a)	109,718
Shopping centre	Anec Blau (b)	9,648
Business Park	Megapark Barakaldo (b)	1,866
Shopping centre	Portal de la Marina (b)	2,103
Shopping centre	El Rosal (b)	2,451
Shopping centre	Parque Abadía (b)	1,422
Shopping centre	Hiper Albacenter (b)	1,470
Business Park	Megapark Ocio (b)	1,123
-	Improvements to other assets and fit outs (c)	3,868
		133,669

(a) This amount corresponds to the construction of the Lagoh shopping centre in Seville by the company LE Retail Lagoh, S.L.U. (formerly Lar España Shopping Centres VIII, S.LU.) In 2019 construct costs were incurred in the amount of EUR 111,718 thousand and the shopping centre began operating on 27 September 2019. In addition, the initial purchase price of the land was decreased by EUR 2,000 thousand, as per the agreement reached by the parties.
(b) The amounts mainly correspond to renovations performed on the Anec Blau, Megapark Ocio, Megapark, Portal de la Marina, El Rosal, Parque Abadía and Hiper Albacenter property assets.
(c) This amount refers to improvements and fit-outs effected in the period in the rest of the assets in the Group's portfolio.

The investment commitments referencing investment property totalled EUR 3,444 thousand at 31 December 2019.

		Thousands of Euros
Type of asset	Company	Additions	Changes to the scope
Shopping centre	Abadía (a)	14,352	-
Shopping centre	Rivas (Note 4f)	-	63,555
Shopping centre	Lagoh (b)	51,769	-
Shopping centre	M4-2 (c)	1,000	-
Business Park	VidaNova Parc (d)	27,550	-
Offices	Eloy Gonzalo (e)	3,598	-
Business Park	Megapark Barakaldo (f)	6,598	-
Shopping centre	Portal de la Marina (f)	2,695	-
Shopping centre	Albacenter (f)	2,326	-
-	Improvements to other assets and fit-outs (g)	13,112	-
		123,000	63,555

2018 Period

(a) This amount corresponds to the acquisition of the Shopping Centre in Parque Abadía, Toledo. On 20 February 2018, the Parent Company formalised the purchase deed for the shopping centre for EUR 14,352 thousand, taking into account the expenses directly associated with said purchase.
(b) This amount corresponds to the construction of the Lagoh shopping centre in Seville by the company LE Retail Lagoh, S.L.U. (formerly Lar España Shopping Centres VIII, S.LU.). In the 2018 period EUR 47,269 thousand in construction costs were incurred. In addition, the company formalised the acquisition of an adjacent plot of land measuring 12,000 m2 for EUR 4,500 thousand.
(c) This amount corresponds to LE Retail Sagunto II, S.L.U.'s purchase of a plot in Sagunto for EUR 1,000 thousand.
(d) This amount corresponds to the construction of a VidaNova Parc shopping centre in Sagunto by the company LE Retail VidaNova Parc, S.L.U. In the 2018 period EUR 27,550 thousand in construction costs were incurred.
(e) This amount refers to the comprehensive renovations that were completed in the 2018 period for the Eloy Gonzalo office building.
(f) The amounts mainly correspond to renovations performed on the Megapark, Portal de la Marina and Albacenter property assets.
(g) This amount refers to improvements and fit-outs effected in the period in the rest of the assets in the Group's portfolio.

Sale of property

On 01 October 2019, the sale of four plots located in Cheste, Valencia to the company E-Cross Circuito Cheste, S.L.U. was formalised for EUR 1,284 thousand net of VAT, giving rise to gains of EUR 977 thousand, net of the expenses associated with the disposal. Such gains were recognised under "Profit/(loss) from the disposal of investment property" in the Consolidated Statement of Comprehensive Income. At 31 December 2019, the full amount of the sale had been collected. The sale was carried out by the Group company Lar España Inversión Logística IV, S.L.U., which requested its exit from the SOCIMI regime in 2018 and, therefore, began to file tax under the general corporate income tax regime.

On 28 December 2018, the sale of the unencumbered Joan Miró 21 office building was signed with Grantham Invest, S.L. for EUR 28,800 thousand, earning capital gains of EUR 4,618 thousand, net of the expenses associated with said sale, which were recorded under "Profit/(loss) from the disposal of investment property" in the Consolidated Statement of Comprehensive Income, with the 3-year holding period required by the SOCIMI Regime having been completed on the aforesaid date.

In addition, on 15 October 2018 the sale of land in Sagunto to Inmobiliaria Noroto, S.L. was signed for EUR 1,025 thousand, with there being no profits or losses from the sale at the consolidated level. This sale took place before completing the 3-year period for maintaining the asset under lease as required by the SOCIMI regime, and therefore the amount of EUR 232 thousand was accrued in corporate income tax in 2018.

Disclosures on the fair value of investment property

Details of the assets measured at fair value and the hierarchy in which they are classified are as follows:

	Thousands of Euros
	2019
	Total	Level 1	Level 2	Level 3
Recurrent fair value measurements
Investment property Shopping centres and single-tenant commercial properties
- Land	312,607	-	-	312,607
- Buildings	1,136,737	-	-	1,136,737
Industrial bays
- Land	-	-	-	-
Total assets measured recurrently at fair value	1,449,344	-	-	1,449,344
	Thousands of Euros
		2018
	Total	Level 1	Level 2	Level 3
Recurrent fair value measurements
Investment property Shopping centres and single-tenant commercial properties
- Land	340,225	-	-	340,225
- Buildings	1,023,114	-	-	1,023,114
Industrial bays
- Land	307	-	-	307
Total assets measured recurrently at fair value	1,363,646	-	-	1,363,646

No assets have been transferred between the different levels during the period. At 31 December 2019 and 2018, details of the gross leasable area and occupancy rate by line of business are as follows:

	Square metres
	2019 (*)		2018 ()(*)
	Gross leasable area	Occupancy rate	Gross leasable area	Occupancy rate
Shopping centres and single tenant commercial properties	534,398	94.64%	509,755	92.00%

(*) The Huertas and Txingudi shopping centres, as well as the Portfolio supermarkets, which are classified as held for sale, have occupancy rates of 92.4%, 98.9% and 100%, and measure 6,267 square meters, 10,712 square meters and 27,909 square meters, respectively, said square meters having not been included.

(**) The square meters of the Lagoh site have not been taken into account, as at 31 December 2018 it was under construction. At 31 December 2019 the Lagoh site measured 69,720 square meters and the occupancy rate was 99.2%.

(***) The Eloy Gonzalo and Cardenal Marcelo Spínola office buildings, which were classified as held for sale, have occupancy rates of 100% and 21.5%, and measure 6,401 sq. meters and 8,875 square meters, respectively, said square meters having not been included.

All investment properties that are rented or are expected to be rented under leases are classified as investment properties. In accordance with IAS 40, the fair value of the investment property has been determined by professionally accredited external independent appraisal companies with recent experience in the locations and categories of the properties being appraised. Independent appraisal companies determine the fair value of the Group's investment property portfolio every six months (June and December) or on a quarterly basis in the case of assets undergoing construction or comprehensive renovations.

The appraisal is conducted in accordance with the Professional Standards published by The Royal Institution of Chartered Surveyors ("Red Book"), based in the United Kingdom.

The methodology used to calculate the market value of investment assets comprises updating the projections for 10 years' worth of income and expense for each asset, which shall subsequently be updated at the reporting date using a market discount rate. The residual value at the end of year 11 is calculated by applying a rate of return ("exit yield" or "cap rate") to the net income projections for year 11. The market values thus obtained are analysed by calculating and analysing the yield capitalisation implicit in these values. The projections are aimed at reflecting the Group's best estimate, reviewed by the appraiser, of the future income and expenses of the real estate assets.

The appraisal companies that performed the measurements of the Group's investment property at 31 December 2019 and 31 December 2018 are Jones Lang Lasalle España and Cushman & Wakefield.

Fees paid by the Group to the appraisal companies for measurements in the 2019 and 2018 periods are as follows:

	Thousands of Euros
	2019 Period	2018 Period

Appraisal services	121	208
	121	208

Assumptions used in measurements

In terms of calculating the fair value of investment property, including those classified as "Noncurrent assets held for sale" (Note 10), the material unobservable input data used to measure the fair value correspond to rental income, the Exit Yield and the discount cash flow rate used in projections. Quantitative information on the material unobservable input data used to measure the fair value is shown below:

	2019		2018
	Exit Yield	Discount rate	Exit Yield	Discount rate
Shopping centres and single-tenant commercial properties	5.25 – 7.80	7.15–10.75	5.00 - 7.00 (*)	7.49 - 11.02 (*)
Office buildings	-	-	4.21 - 4.32 (**)	5.05 - 7.35 (**)

(*) The data for Lagoh are not included, as at 31 December 2018 they were being developed. (**) All of these were classified as non-current assets held for sale (Note 10).

In terms of income, the amounts per square meter used in the measurement at 31 December 2019 ranged from EUR 7.7 to EUR 21.7 (EUR 7.7 to EUR 28.4 at 31 December 2018), depending on the type of asset and the location thereof. The income growth rates used in the

projections are mainly based on the CPI.

Sensitivity analysis of the assumptions used

The effect on consolidated assets and the consolidated assets and the consolidated statement of comprehensive income of a one-quarter percentage point, one-half percentage point and one percentage point variation in the discount rate, income and exit yields with respect to investment property, including those classified as non-current assets held for sale, would be as follows:

Change in discount rate

			Thousands of Euros
			31.12.2019
		Assets			Consolidated Comprehensive Income
	0.25%	0.50%	1%	0.25%	0.50%	1%
Discount rate increase	(25,474)	(52,654)	(102,447)	(25,474)	(52,654)	(102,447)
Discount rate decrease	27,862	56,944	113,679	27,862	56,944	113,679
	Thousands of Euros
	31.12.2018
		Assets			Consolidated Comprehensive Income
	0.25%	0.50%	1%	0.25%	0.50%	1%
Discount rate increase	(27,370)	(51,958)	(103,355)	(27,370)	(51,958)	(103,355)
Discount rate decrease	28,529	52,524	107,000	28,529	52,524	107,000

Change in income

		Thousands of Euros 31.12.2019

		Assets		Consolidated Comprehensive Income
	0.25%	0.50%	1%	0.25%	0.50%	1%
Income increase	1,762	3,368	6,651	1,762	3,368	6,651
Income decrease	(1,558)	(3,373)	(6,561)	(1,558)	(3,373)	(6,561)

		Thousands of Euros
		31.12.2018
		Assets			Consolidated Comprehensive Income
	0.25%	0.50%	1%	0.25%	0.50%	1%
Income increase	399	1,733	5,254	399	1,733	5,254
Income decrease	(2,902)	(4,531)	(8,028)	(2,902)	(4,531)	(8,028)

Change in Exit Yield

		Thousands of Euros
		31.12.2019
		Assets			Consolidated Comprehensive Income
	0.25%	0.50%	1%	0.25%	0.50%	1%
Exit Yield increase	(35,975)	(69,149)	(128,029)	(35,975)	(69,149)	(128,029)
Exit Yield decrease	39,360	82,580	182,506	39,360	82,580	182,506
		Thousands of Euros
				31.12.2018
		Assets			Consolidated Comprehensive Income
	0.25%	0.50%	1%	0.25%	0.50%	1%
Exit Yield increase	(13,729)	(49,571)	(114,623)	(13,729)	(49,571)	(114,623)
Exit Yield decrease	69,637	115,767	216,611	69,637	115,767	216,611

The details of "Changes in fair value of investment property" in the Consolidated Statement of Comprehensive Income at 31 December 2019 and 31 December 2018 are as follows:

	2019		2018
	Thousands of Euros		Thousands of Euros
	Investment property	Non-current assets held for sale	Investment property	Non-current assets held for sale
Shopping centres and single tenant commercial properties	40,527	(490)	55,401	200
Office buildings	-	-	9,929	(912)
Logistics bays	-	-	-	5,853
	40,527	(490)	65,330	5,141

(8) OPERATING LEASES – LESSOR

At 31 December 2019 the Group has the shopping centres and single-tenant commercial properties leased to third parties under operating leases.

Future minimum payments receivable under non-cancellable operating leases, taking into account those assets classified as non-current assets held for sale (Note 10), are as follows:

		Thousands of Euros
	31.12.2019*	31.12.2018*
Less than one year One to five years	88,970 195,748	73,429 162,755
Over five years	131,077	131,137
	415,795	367,321

* This does not include the effect of the bonuses in the amount of EUR 2,549 thousand in 2019 (EUR 1,415 thousand in 2018), at less than one year, EUR 1,256 thousand in 2019 (EUR 688 thousand in 2018), at one to five years and EUR 0 in 2019 (EUR 2 thousand in 2018) at more than five years.

The majority of lease contracts between the Group and its customers stipulate a fixed income and, where applicable, a floating income based on the performance of the tenants' activity.

The following table shows the ten tenants that generated the most income in 2019 and 2018 as well as their main characteristics.

2019 Period

Position	Trade name	Project	% of total rent	% of total accumulated rent	Maturity*	Sector
1	Grupo Inditex	Anec Blau/Albacenter/El Rosal/As Termas/Lagoh/Gran Vía de Vigo/Portal de la Marina	7.64	7.64	2025-2034	Textile/Fashion
2	Centros Comerciales Carrefour, S.A.	El Rosal/Gran Vía de Vigo/Hiper Portal de la Marina	5.29	12.93	2051	Retail/Hypermarket
3	Eroski Sociedad Cooperativa	Hiper Albacenter/Portfolio supermarkets	5.10	18.03	2020-2051	Retail
4	Mediamarkt, S.A.	Megapark/Parque Abadía/Vistahermosa/As Termas/Rivas/Lagoh	3.92	21.95	2021-2044	Technology
5	Decathlon España, S.A.	Megapark/Abadía/VidaNova Parc	3.07	25.02	2036-2043	Retail
6	Leroy Merlin España S.L.U.	VidaNova Parc/Vistahermosa	2.62	27.64	2041-2058	DIY
7	Tendam Retail, S.A.	Albacenter/Anec Blau/As Termas/Abadía/Huertas/Rosal/Gran Vía de Vigo/Vistahermosa/Txingudi/Megapark/VidaNova Parc/Portal de la Marina/Lagoh	2.63	30.27	2020-2030	Textile/Fashion
8	Conforama España, S.A.	Parque Abadía/VidaNova Parc/Rivas/Megapark	2.47	32.74	2028-2038	Home
9	Alcampo, S.A.	Vistahermosa/Parque Abadía	1.99	34.73	2055-2061	Retail/Hypermarket
10	C&A Modas, S.L.U.	Anec Blau/As Termas/Portal de la Marina/Gran Vía de Vigo/Abadía/VidaNova Parc	1.98	36.71	2023-2038	Textile/Fashion

* The information above references the contracts that were in force during the 2019 period, where the effect of income linearisation was not taken into account. Furthermore, the maturity of contracts refers to the final date of the contract, although the contract may have the option for early termination.

2018 Period

Position	Trade name	Project	% of total rent	% of total accumulated rent	Maturity*	Sector

1	Grupo Inditex	Anec Blau/Albacenter/El Rosal/As Termas/Portal de la Marina/Gran Vía de Vigo	7.31	7.31	2025-2034	Textile/Fashion
2	Centros Comerciales Carrefour, S.A.	Alovera II/El Rosal/Gran Vía de Vigo/Hiper Portal de la Marina	7.20	14.51	2028-2060	Retail/Hypermarket
3	Eroski Sociedad Cooperativa	Hiper Albacenter/As Termas/Portfolio supermarkets	5.62	20.13	2019-2051	Retail
4	Mediamark, S.A.	Megapark/Nuevo Alisal/Parque Abadía/Vistahermosa/Villaverde/As Termas/Rivas	4.38	24.51	2023-2041	Technology
5	Decathlon España, S.A.	Megapark/Abadía/VidaNova Parc	3.02	27.53	2036-2043	Retail
6	Conforama España, S.A.	Abadía/VidaNova Parc/Rivas/Megapark	2.61	30.14	2028-2038	Retail
7	El Corte Inglés, S.A.	Megapark/Galaria/Gran Vía de Vigo/Rivas	2.42	32.56	2020-2029	Retail
8	Tendam Retail, S.A.	Albacenter/Anec Blau/As Termas/Abadía/Huertas/Rosal/Gran Vía de Vigo/Vistahermosa/Txingudi/Megapark/VidaNova Parc/Portal de la Marina	2.23	34.79	2019-2030	Textile/Fashion
9	Alcampo, S.A.	Vistahermosa/Abadía	2.05	36.84	2055-2061	Retail/Food Industry
	Hennes &	Anec Blau/Albacenter/El Rosal/As Termas/Portal
10	Mauritz, S.L.	de la Marina/Gran Vía de Vigo/Txingudi	1.93	38.77	2022-2047	Textile/Fashion

* The information above references the contracts that were in force during the 2018 period, where the effect of income linearisation was not taken into account. Furthermore, the maturity of contracts refers to the final date of the contract, although the contract may have the option for early termination.

(9) EQUITY-ACCOUNTED INVESTEES

The details by company at 31 December 2019 and 31 December 2018 of equity-accounted investees as well as the result attributable to the Group are as follows:

	Thousands of Euros
		31 December 2019		31 December 2018
	Investments	Result attributable to the Group	Investments	Result attributable to the Group
Inmobiliaria Juan Bravo 3, S.L.	5,100	473	4,627	(899)
Total	5,100	473	4,627	(899)

Net assets provided by this company are broken down in Appendix I.

(10) NON-CURRENT ASSETS HELD FOR SALE AND LIABILITIES CONNECTED TO ASSETS HELD FOR SALE

As established in International Financial Reporting Standard 5 "Non-current assets held for sale and discontinued operations", those assets in the process of being divested with committed sale plans were reclassified. Specifically, two shopping centres owned by the Group companies LE Retail Las Huertas, S.L.U. and LE Retail Txingudi, S.L.U. and the commercial premises owned by the Group companies LE Retail Hipermercados I, S.L.U., LE Retail Hipermercados II, S.L.U. and LE Retail Hipermercados III, S.L.U. are in this situation.

In accordance with IAS 40, and the exception applicable under IFRS 5, investment property classified as non-current assets held for sale was recognised at fair value, the change in fair value thereof since being posted under non-current assets held for sale has led to the recognition of a loss, according to the latest appraisals, in the amount of EUR 490 thousand. Such loss is recognised under "Changes to the fair value of investment property" in the attached Consolidated Statement of Comprehensive Income. The assumptions used in the measurement are broken down, along with the other investment property, in Note 7 above. Similarly, the amount of improvements and fit-outs carried out in 2019 on non-current assets held for sale amounted to EUR 704 thousand (EUR 4,950 thousand in 2018).

	Thousands of Euros
	Assets		Liabilities
	31.12.2019	31.12.2018	31.12.2019	31.12.2018

LE Retail Las Huertas, S.L.U. (a)	11,832	-	252	-
LE Retail Txingudi, S.L.U. (a)	37,246	-	726	-
LE Retail Hipermercados I, S.L.U. (a)	18,784	-	204	-
LE Retail Hipermercados II, S.L.U. (a)	18,643	-	203	-
LE Retail Hipermercados III, S.L.U. (a)	17,285	-	185	-
LE Offices Eloy Gonzalo 27, S.L.U. (b)	-	41,023	-	705
LE Offices Marcelo Spínola, S.L.U. (c)	-	37,058	-	105
	103,790	78,081	1,570	810

The different assets and liabilities reclassified as held for sale are detailed below:

(a) The Group presents the directly related assets and liabilities of LE Retail Las Huertas, S.L.U., LE Retail Txingudi, S.L.U., LE Retail Hipermercados I, S.L.U., LE Retail Hipermercados II, S.L.U. and LE Retail Hipermercados III, S.L.U. as non-current assets held for sale, since it expects to sell the shopping centres and commercial premises owned by said companies in the short term.
(b) On 31 January 2019 the sale of the unencumbered Cardenal Marcelo Spínola 42 office building to a subsidiary of Invesco for EUR 36,975 thousand was signed. This sale meant capital gains, net of any expenses associated with said disposal, in the amount of EUR 25 thousand, which were recorded under "Profit/(loss) from the disposal of investment property" in the Consolidated Statement of Comprehensive Income.

The sale was carried out by the Group company LE Offices Marcelo Spínola 42, S.L.U., which requested its exclusion from the SOCIMI regime in 2018 and, therefore, will be taxed under the general corporate income tax regime. At 31 December 2018, a deferred tax liability corresponding to the corporate income tax payable from the remeasurement recorded of Marcelo Spínola in accordance with IAS 40 had been recognised for an amount of EUR 2,204 thousand. Said amount, after the sale of the property was carried out in 2019, has been applied against profit tax results (Note 21).

(c) On 24 April 2019, the sale of the Eloy Gonzalo 27 office building, free of charge, to Swiss Life REF European Properties for EUR 40,000 thousand net of VAT was signed, giving rise to a net loss of EUR 56 thousand on the expenses associated with the disposal, which was recognised under "Profit/ (loss) from the disposal of investment property" in the Consolidated Statement of Comprehensive Income. At the time of the sale, the 3-year holding period required by the SOCIMI Regime had been completed.
(d) In the first quarter of 2018, in accordance with the management plans, the logistics segment was classified under non-current assets held for sale. On 18 July 2018, the sale of the logistics portfolio, comprising the logistics bays of Alovera, Almussafes and part of the land being developed in Cheste, was signed with Mopelia Properties 2018, S.L. for EUR 119,645 thousand (excluding VAT), earning capital gains net of the expenses associated with said divestment totalling EUR 17,022 thousand recorded under "Profit/ (loss) from the disposal of investment property" in the Consolidated Statement of Comprehensive Income. At the time of sale, all the property assets satisfied the 3-year holding period required by the SOCIMI Regime, except that in Cheste, assets owned by Lar España Inversión Logística IV, S.L.U., which is taxed under the general corporate income tax regime. The divested assets were under guarantee through directly associated finical liabilities.
(e) On 12 March 2018, the sale of the unencumbered Villaverde Shopping Centre was signed with Pierre Plus Scpi in the amount of EUR 12,255 thousand, earning capital gains net of the expenses associated with said divestment totalling EUR 912 thousand recorded under "Profit/(loss) from the disposal of investment property" in the Consolidated Statement of Comprehensive Income, with the 3-year holding period required by the SOCIMI Regime having been completed on the aforesaid date. The financial liabilities associated with the property assets, which totalled EUR 4,602 thousand, have been settled in full with the funds obtained from the sale.
(f) On 12 March 2018, the sale of the unencumbered Nuevo Alisal single-tenant commercial premise park was signed with Pierre Plus Scpi in the amount of EUR 20,920 thousand, earning capital gains net of the expenses associated with said divestment totalling EUR 1,607 thousand recorded under "Profit/(loss) from the disposal of investment property" in the Consolidated Statement of Comprehensive Income, with the 3-year holding period required by the SOCIMI Regime having been completed on the aforesaid date. The financial liabilities associated with the property assets, which totalled EUR 7,403 thousand, have been settled in full with the funds obtained from the sale.
(g) On 3 August 2018, the sale of the unencumbered Galaria single-tenant commercial premise park was signed with Fructiregions Europe in the amount of EUR 11,500 thousand, earning capital gains net of the expenses associated with said divestment totalling EUR 600 thousand recorded under "Profit/(loss) from the disposal of investment property" in the Consolidated Statement of Comprehensive Income, with the 3-year holding period required by the SOCIMI Regime having been completed on the aforesaid date. The financial liabilities associated with the property assets, which totalled EUR 4,210 thousand, have been settled in full with the funds obtained from the sale.

	LE Retail Las Huertas, S.L.U.	LE Retail Txingudi, S.L.U.	LE Retail Hipermercados I, S.L.U.	LE Retail Hipermercados II, S.L.U.	LE Retail Hipermercados III, S.L.U.	Total
Non-current assets held for sale	11,832	37,246	18,784	18,643	17,285	103,790
Investment property	11,580	36,520	18,580	18,440	17,100	102,220
Non-current financial assets	180	405	204	134	166	1,089
Cash and cash equivalents	72	321	-	69	19	481
Liabilities connected to non-current assets held for sale	(252)	(726)	(203)	(204)	(185)	(1,570)
Other current liabilities	(252)	(726)	(203)	(204)	(185)	(1,570)
Non-current assets held for sale	11,580	36,520	18,581	18,439	17,100	102,220

The details of the assets and liabilities classified as held for sale at 31 December 2019 are as follows:

The details of the assets and liabilities classified as held for sale at 31 December 2018 were as follows:

	LE Offices Eloy Gonzalo, S.A.U.	LE Offices Marcelo Spínola, S.L.U.	Total
Non-current assets held for sale	41,023	37,058	78,081
Investment property	39,400	37,000	76,400
Non-current financial assets	69	58	127
Trade and other receivables	1,171	-	1,171
Cash and cash equivalents	383	-	383
Liabilities connected to non-current assets held for sale	(705)	(105)	(810)
Other current liabilities	(244)	(105)	(349)
Trade and other payables	(461)	-	(461)
Non-current assets held for sale	40,318	36,953	77,271

(11) FINANCIAL ASSETS BY CATEGORY

(a) Classification of financial assets by category

	Thousands of Euros
	2019		2018
	Non-current Current		Non-current	Current
	Carrying amount	Carrying amount	Carrying amount	Carrying amount
Non-current financial assets	13,149	-	11,426	-
Other financial assets	-	189	-	3,268
Client receivables for sales and rendering of services (Note 12)	3,857	2,531	2,733	2,137
Advances to suppliers	-	1,474	-	784
Public Entities, other receivables (Note 21)	-	10,639	-	10,841
Total	17,006	14,833	14,159	17,030

The carrying amount of financial assets recognised at cost or amortised cost does not differ from their fair value.

"Non-current financial assets" mainly comprise the security deposits and guarantees received from the tenants of the investment property mentioned in Note 7, which the Group has deposited with the corresponding public bodies.

At 31 December 2019, "Public Entities, other receivables" mainly comprises the Value Added Tax pending return related to the investments made in the Lagoh development in Seville in the amount of EUR 3,884 thousand (Note 21).

(b) Classification of financial assets by maturity

The classification of financial assets by maturity is as follows:

	2019
	Thousands of Euros
	Less than 1 year	1 to 5 years	Indefinite	Total
Non-current financial assets	-	17	13,132	13,149
Other financial assets	189	-	-	189
Client receivables for sales and rendering of services	2,531	3,857	-	6,388
Advances to suppliers	1,474	-	-	1,474
Public Entities, other receivables (Note 21)	10,639	-	-	10,639
	14,833	3,874	13,132	31,839

	2018
	Thousands of Euros
	Less than 1 year	1 to 5 years	Indefinite	Total
Non-current financial assets	-	33	11,393	11,426
Other financial assets	3,268	-	-	3,268
Client receivables for sales and rendering of services	2,137	2,733	-	4,870
Advances to suppliers	784	-	-	784
Public Entities, other receivables (Note 21)	10,841	-	-	10,841
	17,030	2,766	11,393	31,189

(12) TRADE AND OTHER RECEIVABLES

Details of trade and other receivables at 31 December 2019 and 2018 are as follows:

2019 Thousands of Euros		2018 Thousands of Euros

			-
1,273	-	1,346	-
445	3,857	575	2,733
1,474	-	784	-
10,639	-	10,841	-
(865)	-	(822)	-
14,644	3,857	13,762	2,733
	1,678	-	1,038

(a) Impairment

Movement in impairment and uncollectibility measurement allowances for amounts payable to the Group by the tenants is as follows:

	Thousands of Euros
	2019	2018
Balance at 31 December 2018	822	772
Impairment losses (Note 24) Reversals of impairment losses (Note 24)	688 (645)	318 (268)
Balance at 31 December 2019	865	822

In the 2019 period derecognitions were recorded for irrecoverable credits in the amount of EUR 182 thousand (EUR 140 thousand in 2018).

(13) CASH AND CASH EQUIVALENTS

Details of cash and cash equivalents at 31 December 2019 and 2018 are as follows:

		Thousands of Euros
	2019	2018
Banks	160,527	191,328
Total	160,527	191,328

After ending the treasury share repurchase programs (Note 14), which temporarily suspended the liquidity agreement with a financial intermediary pursuant to terms of Circular 3/2007, of 19 December by the Spanish Securities Market Commission on liquidity agreements for the purposes of accepting same as a market practice and other relevant regulations, the agreement was renewed with the financial intermediary JB Capital Markets. By virtue of said liquidity agreements, a restricted amount of EUR 500 thousand is kept in the treasury and a maximum of 63,000 shares are kept for the sale of treasury shares.

On 14 January 2020 a new share repurchase program was formalised leaving the aforementioned liquidity program temporarily suspended (Note 31).

(14) NET EQUITY
(a) Capital

At 31 December 2019 the share capital of Lar España Real Estate SOCIMI, S.A. amounts to EUR 175,267 thousand (EUR 186,438 thousand at 31 December 2018) represented by 87,633,730 registered shares (93,219,044 registered shares at 31 December 2018), represented through book entries, with a par value of EUR 2 each, completely subscribed and paid, all granting the same rights.

On 10 June 2019, by virtue of the resolution adopted by the Board of Directors on 07 June 2019, the Parent Company increased share capital by a nominal amount of EUR 1,243 thousand through the issue of shares (621,337 ordinary shares with a par value of EUR 2 par value) with a share premium of EUR 5,182 thousand. This capital increase has been subscribed by Grupo

Lar Inversiones Inmobiliarias, S.A. in compliance with the provisions of the Investment Management Agreement, which establishes that the manager must invest the post-tax performance fee in the subscription of the capital increase carried out by the Parent in accordance with the terms of the aforementioned agreement. This capital increase was carried out with the exclusion of pre-emptive subscription rights and delegation to the Board of Directors for the execution of the resolution. The new shares issued within the framework of said increase shall be subject to a three-year lock-up period imposed by the Lar Group, pursuant to the terms of the Investment Management Agreement subscribed with Lar España.

Similarly, on 10 June 2019, by virtue of the resolution adopted by the Board of Directors on 07 June 2019, the Parent Company reduced capital by EUR 6,506 thousand, corresponding to 3,252,820 shares of EUR 2 par value each, representing 3.5% of share capital. The capital decrease was charged against unrestricted reserves by appropriating to a restricted capital redemption reserve EUR 6,506 thousand, an amount equal to the par value of the redeemed shares. The shares were amortised through the use of treasury shares, the value of which at the time of the capital decrease totalled EUR 24,743 thousand.

On 20 December 2019, pursuant to the Board of Directors' resolution in 19 December 2019, the Parent Company reduced capital by EUR 5,908 thousand, corresponding to 2,953,831 shares of EUR 2 par value each and representing 3.2% of share capital. The capital decrease was charged against unrestricted reserves by appropriating EUR 5,908 thousand to a restricted capital redemption reserve, an amount equal to the par value of the redeemed shares. The shares were redeemed through the use of treasury shares, the value of which at the time of the capital decrease totalled EUR 21,682 thousand. On 30 December 2019 the deed reflecting the capital decrease carried out on 20 December 2019 was entered at the Commercial Registry.

On 7 May 2018, the Board of Directors approved an increase in share capital of EUR 20,924 thousand in par value by issuing shares in the amount of EUR 4,279 thousand (2,139,437 ordinary shares with a par value of EUR 2) and an issue premium in the amount of EUR 16,645 thousand. This capital increase was subscribed by Grupo Lar Inversiones Inmobiliarias, S.A. in compliance with the provisions of the Investment Management Agreement, which establishes that the manager must invest the post-tax performance fee in the subscription of the capital increase carried out by the Parent in accordance with the terms of the aforementioned agreement. This capital increase was performed without a pre-emptive subscription right and by delegating powers to execute the agreement to the Board of Directors.

On 28 December 2018, by virtue of the resolution adopted by the Board of Directors held on 20 December 2018, the Company reduced capital by EUR 3,089 thousand, corresponding to 1,544,490 shares of with a par value of EUR 2 each, representing 1.63% of the share capital. The capital decrease was charged against unrestricted reserves by appropriating an amount equal to the par value of the redeemed shares to a capital redemption reserve. This reserve will be restricted. The shares were amortised through the use of treasury shares, the value of which at the time of the capital decrease totalled EUR 12,954 thousand.

All of the shares of the company, Lar España Real Estate SOCIMI, S.A., are quoted on the official Madrid, Barcelona, Bilbao and Valencia Stock Exchanges.

The quoted price at 31 December 2019 was EUR 7.10 per share and the average price per share in the 2019 period was EUR 7.46. (In the 2018 period the average price per share was EUR 7.45 and the quoted price was EUR 8.91 per share.)

The breakdown of the Parent Company's main shareholders at 31 December 2019 is as follows:

	%

LVS II Lux XII S.a.r.l.	20.7%
Grupo Lar Inversiones Inmobiliarias, S.A.	11.5%
Franklin Templeton Institutional, LLC	7.9%
Santa Lucia S.A. Cia de Seguros	5.2%
Brandes Investment Partners, L.P.	5.0%
Blackrock Inc.	3.7%
Other shareholders with an interest of less than 3%	46.0%
Total	100.00%

(b) Issue premium

The Revised Spanish Companies Act expressly provides for the use of share premium to increase share capital and does not stipulate any specific restrictions as to its use, provided that the Company's equity is not reduced to less than its share capital as a result of any distribution.

On 25 April 2019, the distribution of dividends from the 2018 period against the share premium was approved for the amount of EUR 6,647 thousand, taking into account all issued shares.

On 19 April 2018, the distribution of dividends from the 2017 period against the share premium was approved for the amount of EUR 27,714 thousand, where the effect of having the treasury shares was EUR 21 thousand.

At 31 December 2019, the Group's share premium amounted to EUR 475,130 thousand (EUR 476,301 thousand at 31 December 2018).

(c) Other reserves

The breakdown of this category as at 31 December 2019 and 2018 is the following:

		Thousands of Euros
	31.12.2019	31.12.2018
Legal reserve	10,879	2,968
Amortised capital reserve	15,503	3,089
Other Parent Company Reserves	(42,726)	2,393
Consolidated reserves	270,462	211,599
Other shareholder contributions	240	240
Total	254,358	220,289

Reserve movements in 2019 and 2018 were as follows:

	Thousands of Euros 2019

	Parent Company Reserves	Consolidated Reserves	Total Reserves
Opening balance	8,690	211,599	220,289
First application of IFRS 16 (Note 2f)	-	5,146	5,146
Balance at 01 January 2019	8,690	216,745	225,435
Profit/(loss) for 2018	75,591	53,717	129,308
Distribution of Dividends for the period	(66,247)	-	(66,247)
Capital decrease	(34,011)	-	(34,011)
Result from treasury shares	(16)	-	(16)
Other operations	(111)	-	(111)
Closing balance	(16,104)	270,462	254,358

	Thousands of Euros
	2018
	Parent Company Reserves	Consolidated Reserves	Total Reserves
Opening balance	5,860	105,994	111,854
Profit/(loss) for 2017	18,213	117,393	135,606
Distribution of Dividends for the period	(17,273)	-	(17,273)
Exclusions from the scope of consolidation	11,788	(11,788)	-
Capital decrease	(9,865)	-	(9,865)
Result from treasury shares	(33)	-	(33)
Closing balance	8,690	211,599	220,289

(i) Legal reserve

The legal reserve is to be provided for in compliance with Article 274 of the Spanish Companies Act, which requires that companies transfer 10% of profits for the period to a legal reserve until this reserve reaches an amount equal to 20% of the share capital.

The legal reserve is not distributable to shareholders and if it is used to offset losses, in the event that no other reserves are available, the reserve must be replenished with future profits.

At 31 December 2019 the Company's legal reserve totals EUR 10,879 thousand (EUR 2,968 at 31 December 2018). Therefore, the legal reserve at 31 December 2019 is not fully provided for.

Pursuant to Law 11/2009 which governs SOCIMIs, the legal reserve of companies that have opted to avail themselves of the special tax regime provided by this Law may not exceed 20% of their share capital. The articles of association of these companies may not stipulate any restricted reserve other than the legal reserve.

(ii) Amortised capital reserve

This reserve includes the nominal amount of the treasury shares depreciated in the capital decreases carried out on 20 December 2019, 10 June 2019 and 28 December 2018, in the total amount of EUR 15,503 thousand. The provision and availability of this reserve shall be held to the same requirements demanded for the capital decrease, in line with the provisions of Article 335 c) of the Spanish Companies Act, the redacted text of which was approved by Royal Legislative Decree 1/2010, of 02 July (Spanish Companies Act).

(d) Value adjustments

This category on the consolidated statement of financial position includes the amount of changes to the value of financial derivatives designated as cash flow hedging instruments. The movement of the balance of this entry, in thousands of Euros, is presented below:

	Thousands of Euros
	2019	2018
Opening balance	(2,610)	(1,663)
Changes in fair value of hedges in the
period recognised directly in equity	(821)	(1,952)
Other amounts transferred to the income statement	1,488	1,005
Closing balance	(1,943)	(2,610)

(e) Treasury shares

At 31 December 2019, the Company has treasury shares with an acquisition cost of EUR 762 (EUR 1,228 thousand at 31 December 2018).

Movement during the 2019 and 2018 periods was as follows:

2019 Period

	Number of shares	Thousands of Euros
31 December 2018	164,925	1,228
Additions	6,240,541	46,715
Derecognitions	(94,995)	(756)
Capital decreases (Note 14a)	(6,206,651)	(46,425)
31 December 2019	103,820	762

2018 Period

	Number of shares	Thousands of Euros
31 December 2017	19,880	175
Additions	3,456,153	30,300
Derecognitions	(1,766,618)	(16,293)
Capital decreases (Note 14a)	(1,544,490)	(12,954)
31 December 2018	164,925	1,228

The average selling price of treasury shares in 2019 was EUR 7.77 per share (EUR 8.33 in 2018). Furthermore, losses for the period ended 31 December 2019 amounted to Euros 16 thousand (EUR 33 thousand in losses at 31 December 2018) and were recognised under "Other Reserves" on the Consolidated Statement of Financial Position.

The dates 28 February 2019 and 18 December 2019 marked the end of the share repurchase programs formalised between the Company and its liquidity supplier, said programs having a target of a maximum of 3,160,000 and 4,660,000 shares, respectively. After ending the treasury share repurchase programs, which temporarily suspended the liquidity agreement with a financial intermediary pursuant to terms of Circular 3/2007, of 19 December by the Spanish Securities Market Commission on liquidity agreements for the purposes of accepting same as a market practice and other relevant regulations, the agreement was renewed with the financial intermediary JB Capital Markets. By virtue of said liquidity agreements, a restricted amount of EUR 500 thousand is kept in the treasury and a maximum of 63,000 shares are kept for the sale of treasury shares.

On 14 January 2020 a new share repurchase program was formalised leaving the aforementioned liquidity program temporarily suspended (Note 31).

(f) Paid dividends and return of issue premium

On 25 April 2019, the Parent Company's General Shareholders' Meeting approved the distribution of a dividend of EUR 68,353 thousand, at EUR 0.73 per share (taking into account all the shares issued) and recognised in profit and loss for the 2018 period, and of EUR 6,647 thousand, at EUR 0.07 per share (taking into account all the shares issued), charged to the share premium.

The amount distributed totalled EUR 72,600 thousand (once the amount corresponding to treasury shares had been deducted, as this is not taken from the Parent Company's equity), taking into consideration the approved amount per share and the shares in circulation at the time of the approval by the Shareholders' Meeting held on 25 April 2019. The distributed dividend was paid on 24 May 2019.

(15) EARNINGS PER SHARE

(i) Basic

Basic earnings per share are calculated by dividing the profit for the year attributable to the ordinary shareholders of the Parent Company by the weighted average number of ordinary shares in circulation during the period, excluding treasury shares.

Details of the calculation of basic earnings per share are as follows:

	31.12.2019	31.12.2018
Profit for the period attributable to equity instrument holders of the Parent Company (in thousands of Euros)	80,730	129,308
Weighted average number of ordinary shares in circulation (number of shares)	89,879,866	93,404,258
Basic earnings per share (in Euros)	0.90	1.38

The average number of ordinary shares in circulation is determined as follows:

	31.12.2019	31.12.2018

Ordinary shares at the beginning of the period	93,219,044	92,624,097
Share capital increase (weighted effect)	347,268	1,107,818
Capital decrease (weighted effect)	(2,068,888)	(12,694)
Average effect of treasury shares	(1,617,558)	(314,963)
Weighted average number of ordinary shares
in circulation at 31 December (shares)	89,879,866	93,404,258

(ii) Diluted

Diluted earnings per share are calculated by adjusting profit for the year attributable to equity holders of the Parent Company and the weighted average number of ordinary shares in circulation for the effects of all dilutive potential ordinary shares; that is, as if all potential ordinary shares treated as dilutive had been converted.

As indicated in Note 28, the Parent Company has entered into an Investment Manager Agreement with the manager, for which a performance fee is payable. The amount of this variable remuneration shall be settled, at the Parent Company's choice, in cash (which the manager shall subsequently use to subscribe any issued shares) or in treasury shares, with cash being the option chosen in all the years in which the fee was accrued. Pursuant to the terms in paragraphs 46 and 47A of IAS 33 and bearing in mind that at 31 December 2019 the manager had completely provided the service, all the potential ordinary shares that the Parent Company could deliver to the manager must be considered diluted. However, given that at 31 December 2019 and based on the Directors' best estimate no performance fee was accrued (Note 28a), the Parent Company does not have potentially dilutive shares at year-end.

The calculation of earnings per diluted share is as follows (in Euros):

	31.12.2019	31.12.2018
Profit after income tax Weighted shares in circulation Ordinary potential shares	80,729,544 89,879,866 -	129,307,528 93,404,258 577,721
Earnings per diluted share	0.90	1.37

(16) FINANCIAL LIABILITIES BY CATEGORY

(a) Classification of financial liabilities by category

The classification of financial liabilities by category at 31 December 2019 and at 31 December 2018 is as follows:

	Thousands of Euros 2019

	Non-current	Current
	Carrying amount	Carrying amount (*)
Carried at fair value:
Derivatives	2,846	2,393
Carried at amortised cost:
Financial liabilities from issue of bonds and other marketable securities	139,376	3,482
Bank borrowings	506,641	41,127
Other financial liabilities	19,593	-
Short-term debt with Group companies and associates	-	3,199
Trade and other payables:
Trade payables	-	30,656
Public Entities, other payables	-	2,368
Customer advances	-	20
Total financial liabilities	668,456	83,245

*Liabilities connected to non-current assets held for sale are not included.

		Thousands of Euros 2018

	Non-current	Current
	Carrying amount	Carrying amount (*)
Carried at fair value:
Derivatives	1,892	2,179
Carried at amortised cost:
Financial liabilities from issue of bonds and other marketable securities	139,077	3,482
Bank borrowings	428,400	6,461
Other financial liabilities	17,240	-
Trade and other payables:
Trade payables	-	48,223
Public Entities, other payables	-	5,686
Customer advances	-	250
Total financial liabilities	586,609	66,281

*Liabilities connected to non-current assets held for sale are not included.

At 31 December 2019 and 2018 the carrying amounts of the financial liabilities recorded at amortised cost do not differ significantly from the fair value.

(b) Classification of financial liabilities by maturity

Details by maturity of financial liabilities at 31 December 2019 and 31 December 2018 are as follows:

					2019 Thousands of Euros
	2020	2021	2022	2023	2024 and subsequent years	Indefinite	Total
Financial liabilities from issue of bonds (a)	3,482	-	140,000	-	-	-	143,482
Bank borrowings (a)	41,227	9,722	114,509	173,018	218,697	-	557,173
Derivatives	2,538	-	817	1,884	-	-	5,239
Other financial liabilities	-	-	-	-	-	19,593	19,593
Trade and other payables	33,044	-	-	-	-	-	33,044
Debt with Group companies and associates	3,199	-	-	-	-	-	3,199
Total	83,490	9,722	255,326	174,902	218,697	19,593	761,730

					2018
					Thousands of Euros
				2023
	2019	2020	2021	2022	and	Indefinite	Total
					subsequent
				years

Financial liabilities from issue of bonds (a)	3,482	-	-	140,000	-	-	143,482
Bank borrowings (a)	6,461	78,837	5,437	109,731	241,796	-	442,262
Derivatives	2,179	410	-	681	801	-	4,071
Other financial liabilities	-	-	-	-	-	17,240	17,240
Trade and other payables	54,159	-	-	-	-	-	54,159
Total	66,281	79,247	5,437	250,412	242,597	17,240	661,214

(a) The effect of valuing financial liabilities from bonds and bank borrowings at amortised cost decreases the nominal value of the liabilities reflected above by EUR 624 thousand and EUR 8,262 thousand, respectively in the 2019 period (EUR 923 thousand and EUR 7,401 thousand in the 2018 period).

(17) FINANCIAL LIABILITIES FROM BORROWINGS

(a) Main characteristics of debt from bonds

On 21 January 2015 the Parent Company's Board of Directors approved the issue of simple bonds up to a maximum amount of EUR 200 million, following approval by the then-sole shareholder of the Parent Company on 5 February 2014.

In this respect, on 19 February 2015 the Parent Company carried out a placement of bonds amounting to a total of EUR 140 million, each with a nominal value of EUR 100 thousand.

The main characteristics of the issue are therefore as follows:

Issuer: Lar España Real Estate SOCIMI, S.A.
Amount of the issue: EUR 140,000 thousand.
Nominal value of each bond: EUR 100 thousand.
Maturity: 7 years. In certain circumstances the early amortisation of this instrument is possible.
Interest rate: 2.9%.
Nature of the issue: Simple bonds.
Guarantees: Guarantee on the financial investments of the Parent Company and mortgages and ordinary first-tier pledges up to a maximum amount of 20% of the placement. The mortgaged assets are as follows: the Txingudi, Albacenter, Las Huertas, Albacenter Hipermercado, Anec Blau shopping centres and the Eroski hypermarkets. An ordinary pledge has also been established on the shares in LE Retail Txingudi, S.L.U., LE Retail Huertas, S.L.U., LE Retail Albacenter, S.L.U., LE Retail Anec Blau, S.L.U., LE Retail Hipermercados I, S.L.U., LE Retail Hipermercados II, S.L.U and LE Retail Hipermercados III, S.L.U.

The issuance expenses associated with this issue amounted to EUR 1,995 thousand, which were recorded by reducing the debt. In 2019, EUR 299 thousand of these expenses (EUR 289 thousand in 2018) have been charged to the entry "Financial expenses" on the Consolidated Statement of Comprehensive Incomes for the period. Interest accrued at 31 December 2019 totalled EUR 4,060 thousand (EUR 4,060 thousand at 31 December 2018), EUR 3,482 thousand of which was outstanding at 31 December 2019 to be paid in February of 2020.

At 31 December 2019, the investment assets that had been pledged as collateral for bonds have a fair value of EUR 267,983 thousand and correspond to the aforesaid assets, all of which comprise investment property that belongs 100% to the subsidiaries of the Parent Company.

Covenants

With respect to the bonds, the issue includes the fulfilment of certain ratios by the Group, calculated using the consolidated financial statements.

An Interest Coverage Ratio equal to or greater than 1.25%, calculated as EBITDA over financial expenses for the period.
The Loan-to-Value Ratio must be 65% or less, calculated by dividing the consolidated financial debt by the total consolidated value of the asset.

In addition the Group undertook to establish new guarantees in those cases in which the Interest Hedging Ratio is less than 1.75 and the Loan-to-Value Ratio is greater than 60%.

The Directors believe the ratios are met at 31 December 2019 without the need for additional guarantees and they believe these ratios will be met in 2020.

(b) Main characteristics of bank borrowings

The terms and conditions of the bank borrowings are as follows:

Notes to the consolidated financial statements

Annual period ended 31 December 2019

			Thousands of euros
			Amount available	Amount available	Carrying amount	Carrying amount
Institution	Effective rate (%)	Maturity	31.12.2019	31.12.2018	31.12.2019	31.12.2018	Guarantee

LE Retail As Termas, S.L.U.	Euribor 3M + 1.80% spread	25 June 2020	37,345	37,345	37,245	37,210	As Termas shopping centre (b)
LE Retail El Rosal, S.L.U.	Euribor 3M + 1.75% spread	7 July 2030	50,000	50,000	49,441	49,304	El Rosal shopping centre (b)
LE Retail Hiper Ondara, S.L.U.	Euribor 3M + 1.7% spread	24 February 2023	97,000	97,000	96,319	95,990	Megapark shopping centre (a)(b)(c)
LE Retail Hiper Ondara, S.L.U.	Euribor 3M + 1.7% spread	24 February 2023	60,000	60,000	58,646	58,240	Portal de la Marina shopping centre (a)(b)(c)
LE Retail Gran Vía de Vigo, S.A.U.	Euribor 3M + 1.75% spread	14 March 2022	82,400	82,400	81,204	80,779	Gran Vía de Vigo shopping centre (a)(b)(c)
LE Retail Vistahermosa, S.L.U.	Euribor 3M + 1.85% spread	2 March 2022	21,550	21,550	21,340	21,225	Vistahermosa business park (a)(b)
LE Retail Abadía, S.L.U.	1.80 (until 23/11/20) - Euribor 3M + 1.75% spread	23 May 2024	34,750	34,750	34,122	34,092	Abadía business park (a)(b)
LE Retail Abadía, S.L.U.	1.93 (until 23/11/20) - Euribor 3M + 1.75% spread	23 May 2024	7,310	8,685	7,230	7,068	Abadía shopping centre (a)(b)
LE Retail Hiper Ondara, S.L.U.	Euribor 3M + 1.7% spread	24 February 2023	8,250	8,250	4,786	4,741	Megapark shopping centre (a)(b)(c)
LE Retail VidaNova Parc, S.L.U.	Euribor 12M + 2.10% spread	14 September 2020	-	24,000	-	18,359	VidaNova Parc
LE Retail VidaNova Parc, S.L.U.	Euribor 3M + 1.85% spread	31 December 2024	28,000	-	27,248	-	VidaNova Parc
LE Retail Rivas, S.L.U.	1.90	20 December 2024	34,500	27,500	34,286	27,432	Rivas business park (b)
LE Retail Lagoh, S.L.U.	Euribor 3M +2 (+2.25 until September 2019)	29 June 2025	98,500	98,500	95,889	-	Lagoh shopping centre (b)
LE Retail Lagoh, S.L.U.	Euribor 3M + 2.25% spread	30 June 2020	4,000	4,000	-	421	Lagoh shopping centre
Lar España Real Estate SOCIMI, S.A.	Euribor 12M + 1.20% spread	16 May 2020	25,000	25,000	-	-	-
Lar España Real Estate SOCIMI, S.A.	1.25	25 October 2025	70,000	70,000	12	-	Lagoh shopping centre (b)
			658,605	648,980	547,768	434,861

(a) In addition to the mortgage security of the loan, the Group companies have pledged current accounts and credit accounts derived from the lease contract of the property on shares.

(b) With respect to said mortgage loans, there are certain clauses linked to the keeping of the LTV "Loan To Value" ratio below 50%-70%. If the LTV is not kept below 50%-70%, all or part of the debt will mature early. Furthermore, the loans corresponding to the companies LE Retail As Termas, S.L.U., LE Retail El Rosal, S.L.U., LE Retail Hiper de Ondara, S.L.U., LE Retail Villaverde, S.L.U., LE Retail Vistahermosa, S.L.U., LE Retail Gran Via de Vigo, S.A.U., LE Retail Abadía, S.L.U., LE Retail Lagoh, S.L.U., LAR España Real Estate SOCIMI, S.A. and LE Retail Rivas, S.L.U. have clauses on the maintenance of a minimum Debt Service Coverage Ratio between 1.1% and 3%. If the DSCR is not kept between said figures, all or part of the debt will mature early.

(c) In addition to the previously mentioned ratios, there are clauses linked to keeping the shopping centre's occupancy rate above 85%. If the occupancy rate does not meet this minimum, all or part of the debt will mature early.

The financial expenses accrued on these loans in the 2019 period totalled EUR 10,862 thousand (EUR 9,715 thousand in 2018). Accrued, unpaid interest at 31 December 2019 totalled EUR 1,038 thousand (EUR 1,039 thousand at 31 December 2018).

The main changes that occurred in the period ended 31 December 2019 are as follows:

In 2019, the Group company LE Retail Lagoh, S.L.U. (formerly Lar España Shopping Centres VIII, S.L.U.) drew down EUR 98,500 thousand associated with the syndicated loan agreement signed on 29 June 2018 with Banco Santander, S.A. acting as agent bank. The purpose of the loan is to partially fund the investment costs necessary for the development of the shopping centre owned by the company and not covered by share capital contributions and finance the payment of fees, taxes and expenses inherent to the granting of financing documents. The amount of the disbursed loan pending return at any given moment shall accrue interest on a daily basis, as of the date of the contract until same is fully amortised, on the basis of a 360-year day. Interest shall be calculated per calendar day over each interest period, including the first day and excluding the last day, by applying the 3-month Euribor calculation, plus a margin of 2.25% over the construction period, then subsequently a 2.0% spread.

The effect of accounting at amortised cost at the date the debt was contracted was EUR 3,473 thousand, which at 31 December 2018 were recorded under "Other current assets" as the debt had not been drawn down. Following its disposal, the Company reclassified these amounts under "Bank Borrowings".

On 19 December 2019, the Group company LE Retail Rivas, S.L.U. requested a EUR 7,000 thousand increase for the loan that the company holds with Banco Bilbao Vizcaya Argentaria, S.A., which as of this date has a total nominal amount of EUR 34,500 thousand. In addition, the novation stipulated a bullet for the loan, which matures five years after the date of the signing. The purpose of the loan is to partially fund the investment costs of the built shopping centre that are not covered by share capital contributions and to finance the payment of fees, taxes and expenses inherent to the granting of the financing documents. Interest, after the novation, shall be calculated using the number of calendar days elapsed in each interest period, including the first day and excluding the last, by applying a fixed interest rate of 1.90%. The effect of posting the additional formalisation expenses after the novation was signed at amortised cost totalled EUR 185 thousand.
On 20 December 2019, the Group company LE Retail VidaNova Parc, S.L.U. refinanced the current debt associated with the loan agreement the company held with Caixabank, S.A for a total amount of EUR 24,000 thousand. In 2019, EUR 3,372 thousand of this total amount was drawn down, with the total amount drawn down being EUR 22,208 thousand. After said loan was cancelled the company signed a new agreement with Banco Bilbao Vizcaya Argentaria, S.A. for a total amount of EUR 28,000 thousand. The purpose of the loan is to partially fund the investment costs necessary for the development of the shopping centre owned by the company and not covered by share capital contributions and finance the payment of fees, taxes and expenses inherent to the granting of financing documents. Interest of the new loan shall be calculated using the number of calendar days elapsed in each interest period, including the first day and excluding the last, by applying the Euribor 3M calculation plus a 1.85% spread. The effect of posting at amortised cost as at the date the borrowing was formalised totalled EUR 759 thousand.
On 16 May 2019, the Company renewed the credit facility with Bankinter in the amount of EUR 25,000 thousand. Withdrawals may be made up to the limit established at any time by virtue of cheques, transfer orders, account charges or any other order of payment accepted by Bankinter. The maturity date on which the amount drawn down must be fully repaid is 16 May 2020. Interest accrues quarterly and the interest rate is 12-month Euribor plus a spread of 1.20%. It has commissions for having a 4.5% balance surplus. The fee for not withdrawing from the facility is 0.02% of the average balance that is not withdrawn and returned in the quarter. At 31 December 2019 the balance of said credit facility was not negative, with EUR 20,083 thousand having been withdrawn and repaid during the year.

The financing agreements signed by the Group require compliance with certain financial ratios. The Directors believe that they are complied with at 31 December 2019 and expect them to be satisfactorily complied with while the agreements remain in force.

(c) Derivatives

The details of the derivative financial instruments as at 31 December 2019 and 31 December 2018 are as follows:

	Thousands of Euros
	2019	2018
Non-current	2,846	1,892
Interest rate
Current	2,393	2,179
Interest rate
	5,239	4,071

To determine the fair value of interest rate derivatives, the Parent Company uses the cash flow discount on the basis of the implicit amounts determined by the Euro interest rate curve according to the market conditions on the date of measurement.

These financial instruments were classified as level 2 according to the calculation categories established in IFRS 7.

Derivatives contracted by the Group at 31 December 2019 and 31 December 2018 and their fair values at said dates are as follows (in thousands of Euros):

			Thousands of Euros
	Contracted interest rate	Fair value at 31/12/2019	Fair value at 31/12/2018
				Notional	Maturity
LE Retail El Rosal, S.L.U.	0.44%	325	643	50,000	2030
LE Retail As Termas, S.L.U.	0.53%	177	459	37,345	2020
LE Retail Hiper Ondara, S.L.U. (Megapark)	0.22%	1,642	870	97,000	2023
LE Retail Hiper Ondara, S.L.U. (Portal de la Marina)	0.31%/0.39%	1,250	769	60,000	2023
LE Retail Hiper Ondara, S.L.U. (Megapark Ocio)	0.35%	100	69	4,675	2023
LE Retail Gran Vía de Vigo, S.A.U.	0.29%	1,244	1,088	82,400	2022
LE Retail Vistahermosa, S.L.U	0.12%	247	173	21,550	2022
LE Retail VidaNova Parc, S.L.U.	0.00%	254	-	28,000	2024
		5,239	4,071

On 20 December 2019 the Group company LE Retail VidaNova Parc, S.L.U. signed the refinancing discussed in Note 17b alongside an IRS hedging derivative. This IRS hedging instrument contract will accrue interest on a quarterly basis, which shall be paid on the last day of each Interest Period. The reference interest rate applied is made up of a fixed component of 0.00% and a variable component based on the three-month Euribor. The notional amount of the derivative totalled EUR 28,000 thousand and the maturity date is 31 December 2024, as per the terms signed under the hedged bank borrowings. After the documentation regarding the hedging effectiveness of the financial instrument has been reviewed, the Company's Directors, based on their best estimate, have determined that the hedge is effective. The derivative is posted at fair value with changes in net equity (Note 5d).

The hedging relationships of interest rate hedging financial instruments contracted by the companies LE Retail El Rosal, S.L.U., LE Retail As Termas, S.L.U. and LE Retail Hiper de Ondara, S.L.U. were classified as ineffective as at 31 December 2019. In this respect, the Group recognised the change in fair value of said instruments in the negative amount of EUR 711 thousand on the Consolidated Income Statement, in addition to the effect of reversing the amount recorded under equity corresponding to LE Retail El Rosal, S.L.U., LE Retail As Termas, S.L.U., and LE Retail Hiper Ondara, S.L.U., for EUR 1,125 thousand.

The effect of the 50-basis-point change in the estimated interest rate on liabilities and on the income statement before taxes would be as follows:

		Thousands of Euros
Scenario	Liabilities	Net Equity	Consolidated profit before tax
50-point interest rate increase	3,564	(1,869)	(1,695)
50-point interest rate decrease	(5,599)	3,863	1,736

(d) Movements of cash under financial liabilities from borrowings

In the 2019 and 2018 periods the movement of cash of the Group's financial debt is as follows:

	Opening balance	New debt	Initial amortised cost	Principal paid	Interest paid	Interest accrual (Note 25)(*)	Changes in fair value	Closing balance
		Cash flow		Cash flow	Cash flow
Financial liabilities from issue of bonds	142,559	-	-	-	(4,060)	4,359	-	142,858
Bank borrowings	434,861	156,955	(4,417)	(42,291)	(9,022)	11,682	-	547,768
Debt with Group companies Derivatives	- 4,071	3,100 -	- -	- -	(23) (2,341)	122 2,341	- 1,168	3,199 5,239
	581,491	160,055	(4,417)	(42,291)	(15,446)	18,504	1,168	699,064

2019 Period

2018 Period

	Opening balance	Balance of Liabilities linked to non-current assets held for sale (Note 10)	New debt	Initial amortised cost	Principal paid	Interest paid	Accrued interest (*)	Changes in fair value	Changes to the scope (Note 2g)	Closing balance
			Cash		Cash	Cash
			flow		flow	flow
Financial liabilities from issue of bonds Bank borrowings Derivatives	142,269 366,745 2,098	- 45,982 -	- 86,476 -	- (2,936) -	- (61,467) -	(4,060) (6,932) (2,148)	4,350 9,715 2,148	- - 1,973	- (2,722) -	142,559 434,861 4,071
	511,112	45,982	86,476	(2,936)	(61,467)	(13,140)	16,213	1,973	(2,722)	581,491

(*) Taking the effect of formalization expenses into account.

(18) OTHER NON-CURRENT FINANCIAL LIABILITIES

At 31 December 2019 the Group includes under "Other non-current financial liabilities" EUR 19,593 thousand (EUR 17,240 thousand at 31 December 2018) that comprise security deposits delivered to the Group by the various tenants of the commercial premises located in its properties. This amount generally represents two months' rent and will be reimbursed at the end of the contract term.

(19) TRADE AND OTHER PAYABLES

Details of trade and other payables at 31 December 2019 and 2018 are as follows:

	Thousands of Euros
	2019	2018
Trade payables (a)	29,364	38,413
Trade payables, associated companies (b)	1,173	9,694
Customer advances	20	250
Salaries payable	119	116
Public Entities, other payables (Note 21)	2,368	5,686
	33,044	54,159

(a) The item "Trade payables" at 31 December 2019, includes EUR 17,792 thousand that correspond to outstanding amounts stemming from the development and renovations associated with the investment property owned by the Group. Of this amount EUR 10,902 thousand correspond to outstanding amounts related to the development of the Lagoh shopping centre owned by LE Retail Lagoh, S.L.U. (formerly Lar España Shopping Centres VIII, S.L.U.), which began operations on 27 September 2019.

(b) "Trade payables, related companies" includes EUR 646 thousand related to the fixed remuneration and the variable remuneration to be paid to the Manager and accrued in the period (Note 28).

(20) INFORMATION ON THE AVERAGE NUMBER OF DAYS PAYABLE OUTSTANDING

Below appears the information required by the third additional Provision of Law 15/2010, of 5 July (amended by the second final Provision of Law 31/2014, of 3 December), which has been prepared pursuant to the Resolution of 29 January 2016 by Spain's Accounting and Audit Institute on the information to be included in the report on the consolidated financial statements in terms of the average number of days payable outstanding to suppliers in commercial transactions.

	2019	2018
	Days	Days
Average number of days payable outstanding to suppliers	34	25
Ratio of paid operations	21	25
Ratio of operations pending payment	95	49
	Thousands of	Thousands of
	Euros	Euros
Total effected payments	321,785	240,888
Total pending payments	23,371	61,153

Pursuant to the Resolution by Spain's Accounting and Audit Institute on the calculation of the average number of days payable outstanding to suppliers in these consolidated financial statements, commercial transactions corresponding to the delivery of goods or rendering of services accrued since the date Law 31/2014 of 3 December entered into force were taken into consideration, although this has been exclusively regarding companies based in Spain that have been fully or proportionally integrated.

Trade payables as they relate to goods and services included in "Short-term suppliers, related companies", "Suppliers, Group and associates" and "Sundry creditors" of the current liability of the balance sheet are considered suppliers, for the exclusive purpose of providing the information established in this Resolution. These refer excursively to the Spanish institutions included in the consolidable Group.

"Average number of days payable outstanding to suppliers" is understood to mean the time passed between the delivery of goods or the rendering of services by the supplier and the material payment of the transaction.

The maximum legal payment period applicable to the Company in the 2014/15 period according to Law 3/2004, of 29 December containing measures to combat late payments in commercial transactions and in accordance with the transitory provisions established in Law 15/2010, of 5 July, is 60 days until the publication of Law 11/2013 of 26 July and 30 days as of the publication of said Law and as of today's date (unless the conditions established in same are met, which would allow said maximum payment period to be extended to 60 days).

(21) PUBLIC ENTITIES AND TAXATION

(a) Balances with Public Entities

		Thousands of Euros
Receivables	31.12.2019	31.12.2018
Taxation authorities, VAT recoverable	7,137	8,965
Taxation authorities, other withholdings	1,186	1,876
Taxation authorities, other recoverable	2,316	-
	10,639	10,841

	Thousands of Euros
Payables	31.12.2019	31.12.2018
Taxation authorities, VAT payable (Note 16)	1,194	3,276
Taxation authorities, personal income tax payable (Note 16)	87	71
Taxation authorities, corporate income tax payable (Note 21b)	1,082	2,335
Social Security contributions payable	5	4
Deferred tax liabilities (Note 2)	17,201	19,405
	19,569	25,091

The amounts posted under "Taxation authorities, VAT payable" mainly refer to the deductible VAT accrued in the development of the Lagoh shopping centre (Note 11), EUR 3,884 thousand of which was pending return at 31 December 2019.

The amount under "Taxation authorities, other recoverable" corresponds to the amount paid by the company LE Logistic Alovera I y II, S.A.U. in respect of a contested tax assessment relating to transfer tax and stamp duty on the acquisition in 2014 of the logistics warehouses owned by this company. On 17 April 2019, the Company lodged an economic-administrative appeal against the above assessment decision and, at the date of authorisation for issue of these accounts no administrative decision had yet been received in this regard. Nonetheless, with the assistance of the Group's tax advisors, the directors simultaneously filed a ruling request with the Directorate-General of Taxes in response to which they received a non-binding favourable ruling on 25 September 2019. Based on their best estimate, the above amount is thus considered recoverable.

(b) Reconciliation of accounting profit and taxable income

At 31 December 2019, the Parent Company and the subsidiaries were taxed under the SOCIMI tax regime, with the exception of LE Offices Marcelo Spínola, S.L.U and Lar España Inversiones Logísticas IV, S.L.U. which requested their exclusion from the SOCIMI tax regime in 2018. Similarly, LE Retail Córdoba Sur, S.L.U., acquired by the Group on 15 January 2019 (Note 2g), requested to avail itself of the special SOCIMI tax regime on 26 July 2019, so that the application thereof will be retroactive to 01 January 2019.

At 31 December 2019 and 31 December 2018, the taxable fiscal base comprises the following items:

	Thousands of Euros		Thousands of Euros
	Tax regime for SOCIMIs	General regime	Tax regime for SOCIMIs	General regime
	31.12.2019	31.12.2019	31.12.2018	31.12.2018
Profit before tax from continuing operations	79,628		133,847
Consolidation adjustments:	31,092		8,208
Aggregated profit from continuing operations before tax Permanent differences	100,311 (1,994)	10,409 7	134,873 (2,806)	7,182 -
Temporary differences	3,342	(4)	1,666	(4)
Generation/(Offset) of negative tax bases Tax base	- 101,659	(5,140) 5,272	- 129,194	2,162 9,340
Tax payable (0%/25%)	-	1,318	-	2,335
Withholdings/deductions Instalment payments	- -	- (236)	- -	- -
Corporate income tax payable	-	1,082	-	2,335

At 31 December 2019, the current corporate income tax payable for the period corresponds to the tax payable by the company LAR España Inversión Logística IV, S.L.U. after the 2019 sale of the plots it owned in Cheste, as well as to the amount payable by the company LE Offices Marcelo Spínola 42, S.L.U., after the sale in 2019 of the Cardenal Marcelo Spínola 42 office building (Note 10).

Deferred tax assets and liabilities

At 31 December 2019, the Parent Company's Directors do not expect any asset to be sold before the three-year time limit expires, which is the reason the deferred tax liabilities for the increase in value (IAS 40) have been calculated at the 0% tax rate for all the companies included under the SOCIMI regime.

Likewise, the Group has not recorded deferred tax assets for the temporary differences that increase the tax base because the applicable rate is calculated at 0%.

Regarding the deferred tax liability in the amount of EUR 17,201 thousand, it stemmed from the purchase of the companies LE Retail Gran Vía de Vigo, S.A.U., LE Retail Abadía, S.L.U., LE Retail Hipermercados I, S.L.U., LE Retail Hipermercados II, S.L.U., LE Retail Hipermercados III, S.L.U. and LE Retail Rivas, S.L.U as a result of the change to fair value of its assets at the time of the business combination, given that at the time of the acquisition the companies at hand were not taxed under the special SOCIMI regime. The change in the 2019 balance corresponds to the application of the deferred tax liability corresponding to LE Offices Marcelo Spínola 42, S.L.U. after the sale of the property owned by the company (Note 10).

(c) Reconciliation between the accounting result and the corporate income tax result

The reconciliation of the corporate income tax result at 31 December 2019 and 31 December 2018 is as follows:

	Thousands of Euros		Thousands of Euros
	Tax regime for SOCIMIs	General regime	Tax regime for SOCIMIs	General regime
	31.12.2019	31.12.2019	31.12.2018	31.12.2018
Profit before tax from continuing operations		79,628		133,847
Consolidation adjustments	31,092		8,208
Aggregated profit from continuing operations before tax Unrecognised tax losses incurred / (offset)	100,311	10,409	134,873	7,182
	-	(5,140)	-	2,162
Permanent differences	(1,994)	7	(2,806)	-
Temporary differences	3,342	(4)	1,666	(4)
Notional tax payable (0% -25%)	-	1,318	-	2,335
Previous years' corporate income tax correction Mov. PID consolidated (Notes 10 and	-	(210)	-	(7)
21b)	-	(2,211)	-	2,211
Corporate income tax expense/income	-	(1,102)	-	4,539

The details of the current and deferred corporate income tax result, respectively, are as follows:

	Thousands of Euros
	2019	2018
Current corporate income tax result	1,109	2,328
Deferred corporate income tax result	(2,211)	2,211
	(1,102)	4,539

(d) Periods pending verification and inspections

In accordance with current legislation, taxes cannot be considered definitive until they have been inspected and agreed by the taxation authorities or before the inspection period of four years has elapsed. At the 2019 reporting date, the last four fiscal years of the Group are open to inspection.

On 11 December 2019, partial inspection and verification proceedings began regarding Corporate Income Tax, Value Added Tax, Work and Professional Income Withholdings, Investment Income Withholdings, and Non-resident Tax Withholdings for the periods from 2015-2019 for the company Lar España Real Estate Socimi, S.A. The scope of this procedure is strictly limited to properly verifying the taxation percentages of the Regional Taxation Authorities.

The Parent Company's Directors consider that the aforementioned taxes have been adequately settled, and consequently, even if discrepancies were to arise in the interpretation of prevailing standards with respect to the tax treatment of operations, the accompanying financial statements would not be significantly affected by any resulting liabilities.

(e) Reporting requirements for SOCIMIs pursuant to Law 11/2009 amended by Law 16/2012

SOCIMI reporting requirements are broken down in the individual financial statements of each of the Group companies.

(22) RISK MANAGEMENT POLICY

(a) Financial risk factors

The Group's activities are exposed to various financial risks: market risk, credit risk, liquidity risk and interest rate risk in cash flows. The Group's global risk management programme focuses on uncertainty in the financial markets and aims to minimise the potential adverse effects on the Group's profits.

The senior management of the Group manages risks in accordance with policies approved by the board of directors. Senior management identifies, evaluates and mitigates financial risks in close collaboration with the Group's operational units. The board of directors issues global risk management policies in writing, as well as policies for specific issues such as market risk, interest rate risk, liquidity risk and investments of cash surpluses.

(i) Market risk

In light of current conditions in the property sector, the Group has established specific measures that it plans to adopt to minimise their impact on its financial position.

The application of these measures is dependent on the outcome of the sensitivity analyses that the Group performs periodically. These analyses take the following factors into consideration:

The economic environment in which the Group performs its activity: The design of various economic scenarios with different key variables that can affect the Group (interest rates, share price, occupancy rates of investment property, etc.). The identification of variables that are interconnected and their degree of connection.
The effect of the 5-point change in the floating interest rate on bank borrowings translates to an effect totalling EUR 507 thousand in the consolidated income statement.
The time frame within which the assessment is made: The time frame for the analysis and the potential deviations should be taken into account.

(ii) Credit risk

Defined as the risk of financial loss for the Group if a customer or counterparty fails to discharge its contractual obligations.

The Group is not significantly exposed to credit risk. The Group has policies in place to limit customer credit risk and it manages its exposure to credit recovery risk as part of its normal activities.

The Group has formal procedures in place to detect impairment of trade receivables. By means of these procedures and the individual analysis by business area, delays in payment can be detected and methods for estimating the impairment loss can be established.

The maximum exposure to credit risk for loans and other receivables at the reporting date of the consolidated statement of financial position is as follows:

		Thousands of Euros
	Note	2019	2018

Non-current financial assets	11	13,149	11,426
Other current financial assets	11	189	3,268
Other current assets	11	2,650	4,176
Trade and other receivables	12	14,644	13,762
Cash and cash equivalents	13	160,527	191,328
		191,159	223,960

Group policy for impairment of trade receivables stipulates that a provision must be made for debt lasting more than 90 days for the full amount outstanding, less any security deposits and guarantees pledged by the debtor.

	Thousands of Euros 2019
	Not past due	Less than 3 months	Between 3 months and 6 months	Between 6 months and 1 year	Total
Operating lease receivables (Note 12)	102	131	377	1,068	1,678
Total assets	102	131	377	1,068	1,678

	Thousands of Euros
	2018
	Not past due	Less than 3 months	Between 3 months and 6 months	Between 6 months and 1 year	Total
Operating lease receivables	22	117	229	670	1,038
Total assets	22	117	229	670	1,038

At 31 December 2019 and 2018, the Group has recognised impairment on all trade receivables at risk of default (90 days), thus covering the maximum exposure at risk. Impairment of receivables by geographical region representing the Group's activities is as follows:

	2019	2018
Community of Valencia	345	311
Basque Country	55	201
Galicia	84	140
Castilla La Mancha	116	94
Catalonia	38	73
Castile and León	227	3
	865	822

Cash and cash equivalents

At 31 December 2019 the Group has cash totalling EUR 160,527 thousand (EUR 191,328 thousand at 31 December 2018), which represents its maximum exposure to the risk associated with these assets. Cash is held at banks and financial institutions.

(iii) Liquidity risk

Defined as the risk that the Group will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.

The Group applies a prudent policy to cover its liquidity risks based on having sufficient liquidity to meet its obligations when they fall due in both normal and stressed conditions, without incurring unacceptable losses or placing the Group's reputation at risk.

The Group's exposure to liquidity risk at 31 December 2019 and 31 December 2018 is shown below. The following tables show the analysis of financial liabilities by remaining contractual maturity dates.

	2019 Thousands of Euros

			3
	Less than	1 to 3	months	More than
	1 month	months	to 1 year	1 year	Indefinite	Total
Liabilities connected to non-current assets held for sale	1,570	-	-	-	-	1,570
Financial liabilities from issue of bonds	-	3,482	-	139,376	-	142,858
Bank borrowings	-	-	41,127	515,946	-	557,073
Derivatives	-	-	2,393	2,846	-	5,239
Other non-current liabilities	-	-	-	-	19,593	19,593
Deferred tax liabilities	-	-	-	-	17,201	17,201
Trade and other payables	779	1,313	30,952	-	-	33,044
Debt with Group companies	-	3,199	-	-	-	3,199

Total	2,349	7,994	74,472	658,168	36,794	779,777

				2018
	Thousands of Euros
	Less than 1 month	1 to 3 months	3 months to 1 year	More than 1 year	Indefinite	Total
Liabilities connected to non-current assets held for sale	810	-	-	-	-	810
Financial liabilities from issue of bonds	-	3,482	-	139,077	-	142,559
Bank borrowings	295	745	5,421	428,400	-	434,861
Derivatives	-	-	2,179	1,892	-	4,071
Other non-current liabilities	-	-	-	-	17,240	17,240
Deferred tax liabilities	-	-	-	-	19,405	19,405
Trade and other payables	27,244	-	26,915	-	-	54,159
Debt with Group companies	-	-	-	-	-	-
Total	28,349	4,227	34,515	569,369	36,645	673,105

In addition, the Group has securities granted for the amount of EUR 1,885 thousand (EUR 8,396 thousand at 31 December 2018), mostly related to investment property under construction in 2019. In their best estimate, the Group Directors do not expect any obligation to materialise as a result thereof.

(iv) Cash flow and fair value interest rate risks

At 31 December 2019 the Group holds short-term fixed-rate financial assets (deposits) to generate a return on cash surpluses not invested in investment property. Fixed-rate financial assets are for the most part independent of market interest rate fluctuations.

At the reporting date, income and cash flows from the Group's operating activities are mostly unaffected by fluctuations in market interest rates.

(v) Tax risk

As mentioned in Note 1, the Parent Company and part of the subsidiaries thereof have availed themselves of the special tax regime for SOCIMIs.

Among the obligations that the Parent Company must comply with are some that are more formalistic in nature, such as the inclusion of the term SOCIMI in the corporate name, the inclusion of certain information in the notes to the individual financial statements, listing on a stock exchange, etc., and others that additionally require the preparation of estimates and the application of rulings by the Management (determination of tax income, income tests, asset tests, etc.) that may be complex, especially considering that the SOCIMI Regime is relatively recent and its development has been carried out, fundamentally, through the response of the General Directorate of Taxation to queries raised by different companies. In this sense, the Group's Management, with the support of its tax consultants, has verified that regime requirements have been satisfied and concluded that at 31 December 2019 all requirements have been satisfied. Management considered the income test non-compliance in 2018 to have since been corrected. This non-compliance was an extraordinary situation caused by the positive result after having returned the loan granted to Inmobiliaria Juan Bravo 3, S.L. (Note 28a). Therefore, the Group shall continue to avail itself of the SOCIMI tax regime, and this has been taken into account when drawing up these consolidated financial statements.

Should the Group not satisfy the requirements established in the Regime or the Shareholders' Meeting of said Companies not approve the dividend distribution proposed by the Board of Directors, calculated in accordance with the requirements set forth in the aforementioned law, the companies would be in breach of said law and, consequently, would have to file their tax returns under the general tax regime rather than that applicable to SOCIMIs (Note 1).

(vi) Capital management

The Group is essentially financed with its own capital and financial debt. The Group resorted to market financing through mortgage-backed loans to fund the acquisition of new investments. In addition, the Group issued bonds in 2015.

The Group manages its capital with the aim of safeguarding its capacity to continue operating as a going concern, so as to continue providing shareholder remuneration and benefiting other stakeholders, while maintaining an optimum capital structure to reduce the cost of capital.

To maintain and adjust the capital structure, the Group can adjust the amount of dividends payable to shareholders (within the limits established by the SOCIMI regime), reimburse capital, issue shares or dispose of assets to reduce debt.

Like other groups in the sector, the Group controls its capital structure based on the leverage ratio. This ratio is calculated as net debt divided by the sum of said net debt and the total capital. Net debt is the sum of financial debt (bonds, mortgages and derivatives) less cash and cash equivalents. Total capital is the sum of share capital and the issue premium.

	Thousands of Euros
	31.12.2019	31.12.2018
Total financial debt (Notes 11 and 17)	695,865	581,491
Less, Cash and cash equivalents (Note 13)	(160,527)	(191,328)
Net debt	535,338	390,163
Total capital (capital + premium)	650,397	662,739
Total	1,185,735	1,052,902
Leverage ratio	45.15%	37.10%

(23) REVENUE

The details of revenue are presented in Note 6, in conjunction with segment reporting.

(24) OTHER OPERATING EXPENSES

Details of other expenses are as follows:

	Thousands of Euros
	2019	2018
Independent professional services	16,499	45,597
Insurance premiums	534	590
Bank fees and commissions	60	180
PR and advertising	2,096	1,129
Taxes	4,908	5,415
Impairment losses and uncollectibility of trade and other receivables (Note 12a)	225	190
Remuneration of the Board of Directors (Note 28b) (*)	590	590
Other expenses	814	1,457
	25,726	55,148

(*) Includes the non-executive secretary's remuneration.

The decrease in the amount recorded under "Independent professional services" is mainly due to the failure in 2019 to accrue the Performance Fee and Divestment Fee associated with the agreement held with the manager, Grupo LAR (Note 28a).

(25) FINANCE PROFIT

The details of the finance profit at 31 December 2019 and 31 December 2018 are as follows:

	Thousands of Euros
	2019	2018
Financial income
Financial income from loans (Note 28a)	-	27,921
Financial income from deposits	12	6
Financial costs
Financial expenses due to bank borrowings (Note 17b)	(11,862)	(8,088)
Financial expenses due to bonds (Note 17a)	(4,359)	(4,350)
Financial expenses due to bonds (Note 17c)	(2,341)	(2,736)
Financial expenses from debt with Group companies and associates (Note 28a)	(122)	-
Other financial expenses	(293)	(1,612)
Inclusion of financial expenses in assets	659	-
Changes in the fair value of financial instruments (Note 17c)	(1,836)	(1,024)
	(20,142)	10,117

(26) EMPLOYEE BENEFITS EXPENSE

Details of employee benefits expense at 31 December 2019 and 2018 are as follows:

		Thousands of Euros
	2019	2018
Salaries and wages	368	437
Other benefits and taxes	56	65
	424	502

(27) PROFIT FOR THE PERIOD

Each company's contribution to consolidated profit for the period is as follows:

	Thousands of Euros
	2019*	2018*
Lar España Real Estate SOCIMI, S.A.	(6,338)	67,153
LE Logistic Alovera I y II, S.A.U.	(23)	(3,765)
LE Retail Hiper Albacenter, S.A.U.	2,408	(287)
LE Offices Egeo, S.A.U.	-	(61)
LE Retail Alisal, S.A.U.	6	(632)
LE Offices Eloy Gonzalo 27, S.A.U.	(426)	7,802
LE Retail As Termas, S.L.U.	2,235	2,573
LE Retail Portal de la Marina, S.L.U.	-	-
LE Logistic Alovera III y IV, S.L.U.	14	(1,062)
LE Logistic Almussafes, S.L.U.	177	3
LE Retail Hiper Ondara, S.L.U.	(4,527)	9,655
LE Offices Joan Miró 21, S.L.U.	1	3,826
LE Retail Megapark, S.L.U.	-	-
LE Retail VidaNova Parc, S.L.U.	(2,342)	6,748
LE Retail El Rosal, S.L.U.	2,509	1,502
LE Retail Galaria, S.L.U.	(84)	(777)
LE Retail Lagoh, S.L.U.	70,304	23,046
LE Retail Vistahermosa, S.L.U.	1,490	564
LE Retail Sagunto II, S.L.U.	424	(219)
LE Retail Las Huertas, S.L.U.	(654)	147
LE Retail Gran Vía de Vigo, S.A.U.	(859)	10,013
LE Offices Marcelo Spínola 42, S.L.U.	187	(2,856)
LE Retail Anec Blau, S.L.U.	(2,912)	2,120
LE Retail Albacenter, S.L.U.	360	1,769
LE Retail Txingudi, S.L.U.	527	(1,024)
Lar España Inversión Logística IV, S.L.U.	1,382	(393)
LE Retail Villaverde, S.L.U.	6	(873)
Inmobiliaria Juan Bravo 3, S.L.	4,020	(899)
LE Retail Abadía, S.L.U.	5,766	4,843
LE Retail Hipermercados I, S.L.U.	1,706	120
LE Retail Hipermercados II, S.L.U.	1,767	168
LE Retail Hipermercados III, S.L.U.	138	268
LE Retail Rivas, S.L.U.	2,380	4,375
LE Retail Cordoba Sur, S.L.U.	(14)	-
Profit before income tax	79,628	133,847
Income tax	1,102	(4,539)
Profit after income tax	80,730	129,308

* The elimination of amounts the Parent Company rebilled to subsidiaries is not included.

(28) RELATED PARTY BALANCES AND TRANSACTIONS

(a) Related party balances and transactions

Management agreement with Grupo Lar

On 19 February 2018, the Parent Company entered into an agreement with its management company, Grupo Lar Inversiones Inmobiliarias, S.A. (the "Management Company"), for the purpose of renewing the terms of the Investment Management Agreement. According to the aforementioned novation, the IMA will be effective for 4 years from 1 January 2018. In addition, the structure of the fees corresponding to the Management Company (fixed fee or base fee and variable fee or performance fee) was modified. The base fee payable to the Management Company shall be calculated on the basis of an annual amount equivalent to whichever is the higher between (i) EUR 2 million or (ii) the sum of (a) 1.00% of the value of the EPRA NAV (EPRA net asset value) (excluding net cash) at 31 December of the previous year up to an amount of EUR 1 billion or less, and (b) 0.75% of the value of the EPRA NAV (excluding net cash) at 31 December of the previous year in relation to the amount exceeding EUR 1 billion.

The base fee accrued by the manager totalled EUR 9,877 thousand in 2019 (EUR 8,740 thousand in 2018) (net of the expenses discounted as per the management agreement formalised between the parties, which amounted to EUR 398 thousand) recorded under "Other operating expenses" on the Consolidated Statement of Comprehensive Income. At 31 December 2019, the amount of EUR 646 thousand was pending payment (EUR 756 thousand at 31 December 2018).

Likewise, the performance fee to be paid to the Management Company shall be 16% of any increase the Group sees in its EPRA NAV above 10% and 4% of any increase the Parent Company sees in its market capitalisation above 10%. Both figures shall be corrected pursuant to the circumstances described in the IMA and the fee shall be subject to an overall limit equal to 3% of the Group's EPRA NAV at 31 December of the previous period. Pursuant to Clause 7.2.2 of the management agreement, Grupo Lar Inversiones Inmobiliarias, S.A. must use the amount earned as the Performance Fee (after deducting the applicable corporate income tax amount) to subscribe any shares that the Parent Company may issue, or by choice of the Parent Company, to acquire same's treasury shares.

In terms of the floating amount, no figures were recorded at 31 December 2019, such that the Directors of the Parent Company believe that developments of the EPRA NAV and market capitalisation at year-end did not reach either minimum established in the IMA for the accrual thereof (EUR 8,566 thousand at 31 December 2018).

In addition, the manager was entitled, under the original Investment Management Agreement (IMA), to receive a fee linked to the sale of investment property, when the amount of said sales was equal to or greater than EUR 100 million. In this regard, in 2018 the manager accrued EUR 17,898 million derived from the sales that took place in said year. Said amount was settled as at 31 December 2018.

Other contracts with related parties

The Group has also signed a contract with a related company, Gentalia 2006, S.L., (a whollyowned subsidiary of Grupo Lar Inversiones Inmobiliarias, S.A.) for the provision of services related to the administration of the property assets. At 31 December 2019 the expense incurred in this connection amounted to EUR 3,544 thousand (EUR 2,516 thousand at 31 December 2018), of which EUR 527 thousand had not yet been paid at 31 December 2019 (EUR 390 thousand at 31 December 2018).

Other balances and transactions with related parties

On 01 April 2019, a liquidity facility was arranged between Lar España Real Estate SOCIMI, S.A., the Parent of the Group, and Inmobiliaria Juan Bravo 3, S.L., whereby Lar España Real Estate SOCIMI, S.A. may dispose of a maximum amount of EUR 7,000 thousand, maturing on 31 March 2020. This liquidity facility yields a fixed interest rate of 5.95% of the drawn capital payable on the due date. In 2019 interest accrued in the amount of EUR 122 thousand, EUR 99 thousand of which is pending payment. At 31 December 2019, the amount drawn down totalled EUR 3,100 thousand.

Also in 2018, the Company received repayment for two loans granted to Inmobiliaria Juan Bravo 3, S.L. The first was for a nominal amount of EUR 61,303 thousand, having been acquired in 2015 for EUR 40,000 thousand due to the insolvency of the investee. The second, granted on 11 January 2016, amounted to EUR 2,000 thousand. Following the repayment of both loans, the Company recorded positive finance income of EUR 21,303 thousand, corresponding to the difference between the price for which it purchased the first loan from a financial institution and its nominal value.

Likewise, in 2018, the finance income accruing on the loans amounted to EUR 6,618 thousand, in respect of both fixed and variable interest, calculated based on the estimated free cash flow of Inmobiliaria Juan Bravo 3, S.L. No finance income of any kind has accrued for these items in 2019.

(b) Information on the Parent Company's directors and senior management personnel of the Group

The remuneration received by the members of the Board of Directors and senior management personnel of the Group during 2019 and 2018, classified by item, is as follows:

	Thousands of Euros
		2019			2018
	Salaries Allowances		Insurance premiums	Salaries	Allowances	Insurance premiums
Board of directors	-	590	120*	-	590	194*
Senior management personnel	368	-	-	437	-	-

*The amount of civil liability insurance premiums for damages from acts or omissions corresponds to the company's Board of Directors and Senior Management.

Allowances for the Board of Directors include EUR 85 thousand for the non-executive Secretary of the Board of Directors (EUR 85 thousand at 31 December 2018).

At 31 December 2019 the Company had 7 Board Members: 5 men and 2 women. (At 31 December 2018 the company had 7 Board members: 5 men and 2 women.)

At 31 December 2019 and 2018 the Group has no pension, life insurance, stock options or compensation obligations with former or current members of the Board of Directors or Senior Management personnel of the Parent Company.

At 31 December 2019 and 2018 no advances or loans have been extended to members of the Board or Senior Management.

(c) Transactions other than ordinary business or under terms differing from market conditions carried out by the Directors

Apart from the transactions with related parties listed above, in 2019 the Directors have not carried out any transactions other than ordinary business or with conditions other than market conditions with related parties or with Group companies.

(d) Investments and positions held by Directors and their related parties in other companies

The Directors of the Parent Company and their related parties have had no conflicts of interest requiring disclosure in accordance with Article 229 of the Revised Spanish Companies Act.

(29) EMPLOYEE INFORMATION

The average headcount of the Group at 31 December 2019 and 2018, distributed by category, is as follows:

	2019	2018
Professional category
Senior management personnel	3	4

Total	3	4

The distribution of Group personnel by sex at 31 December 2019 and 2018 is as follows:

	Number
	2019		2018
	Female	Male	Female	Male
Senior management personnel	1	2	1	3
Total	1	2	1	3

In the 2019 and 2018 periods the Company had no employees with a 33% or greater disability.

(30) AUDIT FEES

During 2019 and 2018, fees for audit and other related services charged to the Group by the auditor of the consolidated financial statements, Deloitte, S.L., and by companies belonging to the Deloitte network, as well as fees for services charged by the auditors of the individual financial statements of the companies included in the consolidation and for the entities related thereto through control, shared property or management were as follows (in thousands of Euros):

	Thousands of Euros
	31.12.2019	31.12.2018
Audit and related services
Audit services	309	326
Other verification services	137	81
Professional services
Other services	-	254
Total	446	661

(31) EVENTS AFTER THE REPORTING PERIOD

On 14 January 2020 a new share repurchase program has been signed between Lar España and its liquidity provider, aimed at a maximum of 4,500,000 shares, representing 5% of the share capital, which may be acquired for a price not exceeding (a) the price of the last independent transaction or (b) the highest independent offer at that date at the trading venue where the purchase takes place. This programme will last until 14 October 2020 at the latest. The former programme temporarily suspends the liquidity agreement with a financial intermediary per the provisions of the Spanish National Securities Market Commission Circular 3/2007 of 19 December 2007 on liquidity contracts for the purposes of their acceptance as market practice and other applicable regulations, according to which it maintains a restricted amount of Euros 500 thousand in cash and a maximum of 63,000 shares for the sale-purchase of treasury stock.

(32) EXPLANATION ADDED FOR TRANSLATION TO ENGLISH

These financial statements are presented on the basis of the regulatory financial reporting framework applicable to the Company (see Note 2.a). Certain accounting practices applied by the Company that conform with that regulatory framework may not conform with other generally accepted accounting principles and rules.

Appendix I

LAR ESPAÑA REAL ESTATE SOCIMI, S.A. AND SUBSIDIARIES Information on Group companies 31 December 2019

a) Subsidiaries

				% of Participation	Thousands of euros
		Type of			Share	Operating				Total
Company	Activity	entity	Direct	Total	capital	profit/(loss)	Profit/(loss)	Dividends	Other equity	equity (a)
LE Logistic Alovera I y II, S.A.U.	Leasing of property	Subsidiary	100	100	60	(44)	(24)	-	3,579	3,615
LE Retail Hiper Albacenter, S.A.U.	Leasing of property	Subsidiary	100	100	60	36	36	(32)	14,004	14,068
LE Retail Alisal, S.A.U.	Leasing of property	Subsidiary	100	100	60	(1)	6	(5)	2,278	2,339
LE Offices Eloy Gonzalo 27, S.A.U.	Leasing of property	Subsidiary	100	100	60	20,395	20,427	(15,079)	344	5,752
LE Retail As Termas, S.L.U.*	Leasing of property	Subsidiary	100	100	4	3,126	2,031	(1,828)	32,480	32,687
LE Logistic Alovera III y IV, S.L.U.	Leasing of property	Subsidiary	100	100	4	10	14	(12)	646	652
LE Logistic Almussafes, S.L.U.	Leasing of property	Subsidiary	100	100	4	169	177	(159)	2,969	2,991
LE Retail Hiper Ondara, S.L.U.*	Leasing of property	Subsidiary	100	100	4	9,279	2,683	(2,415)	135,742	136,014
LE Offices Joan Miró 21, S.L.U.*	Leasing of property	Subsidiary	100	100	4	(7)	1	(1)	798	802
LE Retail VidaNova Parc, S.L.U.*	Leasing of property	Subsidiary	100	100	4	2,151	1,217	(1,095)	28,433	28,559
LE Retail El Rosal, S.L.U.*	Leasing of property	Subsidiary	100	100	3	1,675	423	(381)	23,079	23,124
LE Retail Galaria, S.L.U.	Leasing of property	Subsidiary	100	100	4	(6)	(84)	-	504	424
LE Retail Lagoh, S.L.U.*	Leasing of property	Subsidiary	100	100	3	930	(210)	-	115,665	115,458
LE Retail Sagunto II, S.L.U.	The acquisition and development of	Subsidiary	100	100	3	(16)	(16)	-	1,532	1,519
	properties for lease
LE Retail Vistahermosa, S.L.U.*	Leasing of property	Subsidiary	100	100	3	1,408	867	(781)	21,490	21,579
Lar España Inversión Logística IV, S.L.U.	The acquisition and development of	Subsidiary	100	100	3	1,377	1,246	-	697	1,946
	properties for lease
LE Retail Villaverde, S.L.U.	Leasing of property	Subsidiary	100	100	3	-	6	(5)	1,758	1,762
LE Retail Anec Blau, S.L.U.*	Leasing of property	Subsidiary	100	100	3	39	39	(35)	82,980	82,987
LE Retail Albacenter, S.L.U.	Leasing of property	Subsidiary	100	100	3	1,009	1,009	(908)	33,724	33,828
LE Retail Txingudi, S.L.U.	Leasing of property	Subsidiary	100	100	3	893	893	(804)	32,482	32,574
LE Retail Las Huertas, S.L.U.	Leasing of property	Subsidiary	100	100	3	220	220	-	12,588	12,811
LE Offices Marcelo Spínola, S.L.U.	Leasing of property	Subsidiary	100	100	3	9,029	8,058	-	(1,499)	6,562
LE Retail Gran Vía de Vigo, S.A.U.*	Leasing of property	Subsidiary	100	100	502	5,731	3,538	-	26,958	30,998
LE Retail Abadía, S.L.U.*	Leasing of property	Subsidiary	100	100	7,204	3,258	2,298	(1,861)	16,926	24,567
LE Retail Hipermercados I, S.L.U.	Leasing of property	Subsidiary	100	100	3	674	674	(606)	14,808	14,879
LE Retail Hipermercados II, S.L.U.	Leasing of property	Subsidiary	100	100	3	679	679	(611)	14,936	15,007
LE Retail Hipermercados III, S.L.U.	Leasing of property	Subsidiary	100	100	3	615	615	(554)	13,684	13,748
LE Retail Rivas, S.L.U.*	Leasing of property	Subsidiary	100	100	3	2,372	1,697	(1,528)	27,361	27,533
LE Retail Cordoba Sur, S.L.U.	The acquisition and development of	Subsidiary	100	100	4	(14)	(14)	-	947	937
	properties for lease
					8,023	64,987	48,506	(28,700)	661,893	689,722

* Company audited by Deloitte, S.L.

All the companies are domiciled at Calle Rosario Pino 14-16, Madrid.

Appendix I

LAR ESPAÑA REAL ESTATE SOCIMI, S.A. AND SUBSIDIARIES Information on Group companies 31 December 2019

b) Joint venture

					% of Participation			Thousands of euros
Company	Registered office	Activity	Auditor	Type of entity	Direct	Total	Share capital	Operating profit/(loss)	Profit/(loss)	Dividends	Other equity
Inmobiliaria Juan Bravo 3, S.L.	Rosario Pino 14- 16, Madrid	Property leasing and development	Deloitte	Associate	50	50	3,483	4,375	6,060	-	(3,151)

LAR ESPAÑA REAL ESTATE SOCIMI, S.A. AND SUBSIDIARIES Information on Group companies 31 December 2018

a) Subsidiaries

			% of Participation			Thousands of euros
Company	Activity	Type of entity	Direct	Total	Share capital	Operating profit/(loss)	Profit/(loss)	Dividends	Other equity	Total equity (a)
LE Logistic Alovera I y II, S.A.U.	Leasing of property	Subsidiary	100	100	60	31,642	31,670	(16,050)	169	15,849
LE Retail Hiper Albacenter, S.A.U.	Leasing of property	Subsidiary	100	100	60	200	200	(111)	12,432	12,581
LE Retail Alisal, S.A.U.	Leasing of property	Subsidiary	100	100	60	4,145	4,110	(2,098)	2,162	4,234
LE Offices Eloy Gonzalo 27, S.A.U.	Leasing of property	Subsidiary	100	100	60	(1,783)	(1,783)	-	19,314	17,591
LE Retail As Termas, S.L.U.*	Leasing of property	Subsidiary	100	100	4	1,815	630	-	28,227	28,861
LE Logistic Alovera III y IV, S.L.U.	Leasing of property	Subsidiary	100	100	4	5,724	5,725	(2,935)	97	2,891
LE Logistic Almussafes, S.L.U.	Leasing of property	Subsidiary	100	100	4	4,238	4,239	(2,185)	2,525	4,583
LE Retail Hiper Ondara, S.L.U.*	Leasing of property	Subsidiary	100	100	4	5,559	657	-	122,115	122,776
LE Offices Joan Miró 21, S.L.U.*	Leasing of property	Subsidiary	100	100	4	6,081	5,496	-	13,794	19,294
LE Retail VidaNova Parc, S.L.U.*	Leasing of property	Subsidiary	100	100	4	373	(236)	-	22,796	22,564
LE Retail El Rosal, S.L.U.*	Leasing of property	Subsidiary	100	100	3	(438)	(1,805)	-	23,246	21,444
LE Retail Galaria, S.L.U.	Leasing of property	Subsidiary	100	100	4	3,310	3,261	(1,665)	(1)	1,599
LE Retail Lagoh, S.L.U.*	The acquisition and development of properties for lease	Subsidiary	100	100	3	(3,036)	(3,184)	-	94,344	91,163
LE Retail Sagunto II, S.L.U.	The acquisition and development of properties for lease	Subsidiary	100	100	3	4	4	-	1,532	1,539
LE Retail Vistahermosa, S.L.U.*	Leasing of property	Subsidiary	100	100	3	413	(167)	-	20,169	20,005
Lar España Inversión Logística IV, S.L.U.	The acquisition and development of	Subsidiary	100	100	3	7,676	5,575	(5,165)	(9)	404
	properties for lease
LE Retail Villaverde, S.L.U.	Leasing of property	Subsidiary	100	100	3	3,161	3,054	(1,598)	1,651	3,110
LE Retail Anec Blau, S.L.U.*	Leasing of property	Subsidiary	100	100	3	1,025	1,025	(554)	77,989	78,463
LE Retail Albacenter, S.L.U.	Leasing of property	Subsidiary	100	100	3	220	220	-	30,638	30,861
LE Retail Txingudi, S.L.U.	Leasing of property	Subsidiary	100	100	3	(21)	(21)	-	30,637	30,619
LE Retail Las Huertas, S.L.U.	Leasing of property	Subsidiary	100	100	3	1	1	-	11,960	11,964
LE Offices Marcelo Spínola, S.L.U.	Leasing of property	Subsidiary	100	100	3	(2,158)	(2,158)	-	28,590	26,435
LE Retail Gran Vía de Vigo, S.A.U.*	Leasing of property	Subsidiary	100	100	502	2,430	226	-	21,831	22,559
LE Retail Abadía, S.L.U.*	Leasing of property	Subsidiary	100	100	7,204	2,151	1,199	(827)	14,617	22,193
LE Retail Hipermercados I, S.L.U.	Leasing of property	Subsidiary	100	100	3	346	346	(343)	13,929	13,935
LE Retail Hipermercados II, S.L.U.	Leasing of property	Subsidiary	100	100	3	370	370	(317)	14,064	14,120
LE Retail Hipermercados III, S.L.U.	Leasing of property	Subsidiary	100	100	3	262	262	(215)	12,803	12,853
LE Retail Rivas, S.L.U.*	Leasing of property	Subsidiary	100	100	3	422	(185)	-	25,593	25,411
					8,019	74,132	58,731	(34,063)	647,214	679,901

* Company audited by Deloitte, S.L.

All the companies are domiciled at Calle Rosario Pino 14-16, Madrid.

LAR ESPAÑA REAL ESTATE SOCIMI, S.A. AND SUBSIDIARIES Information on Group companies 31 December 2018

b) Joint venture

				% of Participation			Thousands of euros
Company	Registered office	Activity	Auditor	Type of entity	Direct	Total	Share capital	Operating profit/(loss)	Profit/(loss)	Dividends	Other equity
Inmobiliaria Juan Bravo 3, S.L.	Rosario Pino 14- 16, Madrid	Property leasing and development	Deloitte	Associate	50	50	3,483	26,067	17,513	-	(3,151)

Management report for the period ended 31 December 2019

1 Situation of the Group

1.1 Organisational structure and operations

The Group is a group of companies that was created in 2014 with an externalised management structure. It has designated Grupo Lar Inversiones Inmobiliarias, S.A. as exclusive manager, a company that has fifty years of experience in the property market and a long history of generating value through various property cycles in the last decades, and that has alliances with some of the most internationally renowned investors.

Strategic management, allocation of resources, risk management and corporate control, as well as accounting and financial reports are among the main responsibilities of the Group's Board of Directors.

The Group carries out its activity with the following types of assets:

Shopping centres: the rental of shopping centre and single-tenant commercial premises.

The Group focuses its strategy on searching for shopping centres with great potential for growth and with opportunities of improvement in asset management, mainly those where there is the possibility to replace or expand.

Offices: the rental of offices.

The Group implemented a plan to build up the value of assets in its portfolio in order to maximise shareholder returns from divesting in said assets.

Logistics: the rental of logistics bays.

The Group implemented a plan to build up the value of assets in its portfolio in order to maximise shareholder returns from divesting in said assets.

Residential.

The Group made an exception investment in the luxury residential market in Madrid, through the joint development (50%) of the Lagasca99 project with PIMCO. The development, most of which has already been delivered, is not in response to a strategic line in envisaged in the future business plans

The Group's investment policy focuses mainly on the following:

On assets the company considers to be strategic assets, mainly commercial parks and shopping centres.
Investment opportunities in mid-sized assets that offer great management possibilities, avoiding those segments where competition may be greater.
Risk diversification, expanding throughout Spain mainly in shopping centre investments.

The company maintains a robust pipeline that offers it security as regards the achievement of its

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Management report for the period ended 31 December 2019

investment plans as forecast.

2 Evolution and result of the businesses

2.1 Introduction

At the 2019 reporting date, the Group's ordinary revenue amounted to EUR 81,128 thousand, corresponding to the business in which the Group is engaged: the rental business.

During 2019 the Group incurred "Other expenses" amounting to EUR 25,726 thousand, corresponding essentially to the fees for management provided by Grupo Lar Inversiones Inmobiliarias, S.A. to the Group (EUR 9,877 thousand), and recurrent services that are directly linked to the everyday management of the assets (supplies, IBI -propertytax-, etc.) by the amount of EUR 10,263 thousand.

Earnings before interest, taxes, depreciation and amortisation (EBITDA is calculated as the result of the operations, net of the change in fair value of investment property, net of amortisation expenses) stood at EUR 59,260 thousand.

The appreciation in value during 2019 of the assets held by the Group at 31 December 2019, according to the independent valuation conducted by Cushman & Wakefield and JLL at the close of the financial year is EUR 40,037 thousand.

The financial result was negative amount of EUR 20,142 thousand.

The Group's profit for the period was EUR 80,730 thousand.

By area of activity, we should be emphasised:

A significant percentage of the Group's revenue is the result of rent from retail centres, accounting for 99.7% of total revenue, as opposed to 0.3% from offices.
Around 38% of rental revenue is generated by the Megapark, Gran Vía de Vigo and Portal de la Marina.

As at 31 December of 2019, the Group occupied across its whole business 94.6% the gross leasable area (GLA), the occupancy rate at retail centres being 94.7%. Retail parks occupancy stands at 96.4% and 100% at the retail units. Anec Blau´s data has not been taken into account because the asset is going through a comprehensive refurbishment project.

As at 31 December of 2019, the Group has a portfolio of real estate rental projects covering shopping centres (392,490 sqm), retail parks (158,887sqm) and retail units (27,909 sqm). The overall total gross leasable area of 579,286 sqm.

Management report for the period ended 31 December 2019

2.2 Other financial indicators

As at 31 December of 2019, the Group revealed the following financial indicators:

Working capital (calculated as the difference between current assets and current liabilities) EUR 196,986 thousand (EUR 223,524 thousand as at 31 December 2018).
Liquidity ratio (calculated as the ratio of current assets to current liabilities) 3.3 (4.3 as of 31 December 2018).
Solvency ratio (calculated as the quotient of the sum of net assets and non-current liabilities in the numerator and denominator, non-current assets) 1.1 (1.2 as of 31 December 2018).

These ratios represent particularly high values, indicating that the Group enjoys a sufficient level of liquidity and a high degree of safety margin in order to meet its payments.

The ROE (Return on Equity), which measures the profitability obtained by the Group on its own shares, totals 8.21% (13.42% as of 31 December 2018). This is calculated as the quotient of the profit for the last 12 months and the Company's net equity, averaged over the last four quarters.

The ROA (Return on Assets), which measures the efficiency of the Group's total assets, regardless of the source of funding used, i.e. the capacity of a company's assets to generate profit, is 4.70% (8.03% as of 31 December 2018), This is calculated as the quotient of the profit for the last 12 months and the Company's total assets, averaged over the last four quarters.

In accordance with the recommendations issued by the European Securities and Markets Authority (ESMA) regarding the calculation and determination of Alternative Performance Measures used by the Company's Management in taking financial and operational decisions, sections 3 and 6 of the "Full yearly report 2019", which was published on the same date as these Financial Statements and explanatory notes, state how the EPRA (European Public Real Estate Association) indicators are calculated and defined.

2.3 Environment and staff issues

Environment

The Group undertakes operations the main aim of which is to prevent, reduce or rectify any damage which it could cause to the environment as a result of its activities. However, given its nature, the Group's operations have no significant environmental impact.

Personnel

As at 31 December of 2019 the Group has 3 employees (2 men and 1 woman). Said employees are classified as Senior Management. In the 2019 period the Company has had no employees with a 33% or greater disability.

Management report for the period ended 31 December 2019

3 Liquidity and capital resources

3.1 Liquidity and capital resources

At 31 December 2019, the Group's financial debt amounted to EUR 695,865 thousand, taking into account the debt classified as non-current assets held for sale. The level of debt is related to the purchases of the As Termas, el Rosal, Megapark, Portal de la Marina, Vistahermosa, Gran Vía de Vigo, Lagoh, Parque Abadía, Rivas Futura and VidaNova Parc shopping center, This also includes the bonds issued by the Parent Company in 2015 and a credit line arranged by the Parent Company.

As at 31 December of 2019, the Group's short-term financial debt stands at EUR 47,002 thousand.

The Group intends its debt's maturity profile to be in line with its ability to generate cash flow to cover the debt.

On 31 January 2019, the unencumbered sale of an office building at Calle Cardenal Marcelo Spinola 42 Madrid was signed with an INVESCO company named IRE-RE Espinola, S.L.U. for an amount of EUR 37,000 thousand, and a net loss of EUR 25 thousand was obtained on the expenses associated with the sale, recorded under "Profits or Losses from the Disposal of Investment Property" in the Consolidated Statement of Comprehensive Income.

On 24 April 2019, the unencumbered sale of an office building at Calle Eloy Gonzalo 27 Madrid was signed with an SwissLife company named CARFEN SPV 2018, S.L., for an amount of EUR 40,000 thousand, and a net gain of EUR 56 thousand was obtained on the expenses associated with the sale, recorded under "Profits or Losses from the Disposal of Investment Property" in the Consolidated Statement of Comprehensive Income.

On 1st October 2019, the unencumbered sale of fourth plots intended for logistical use in Cheste (Valencia) was signed with an E-Cross Circuito Cheste, S.L.U., for an amount of EUR 1,284 thousand, and a net gain of EUR 977 thousand was obtained on the expenses associated with the sale, recorded under "Profits or Losses from the Disposal of Investment Property" in the Consolidated Statement of Comprehensive Income.

On 19 December 2019, the Group company LE Retail Rivas, S.L.U. requested a EUR 7,000-thousand increase for the loan that the company holds with Banco Bilbao Vizcaya Argentaria, S.A., which as of this date has a total nominal amount of EUR 34,500 thousand. In addition, the novation stipulated a bullet for the loan, which matures five years after the date of the signing. The purpose of the loan is to partially fund the investment costs of the built shopping centre that are not covered by share capital contributions and to finance the payment of fees, taxes and expenses inherent to the granting of the financing documents. Interest, after the novation, shall be calculated using the number of calendar days elapsed in each interest period, including the first day and excluding the last, by applying a fixed quarterly interest rate of 1.95%. The effect of posting the additional formalisation expenses after the novation was signed at amortised cost totalled EUR 185 thousand.

On 20 December 2019, the Group company LE Retail VidaNova Parc, S.L.U. refinanced the current debt associated with the loan agreement the company held with Caixabank, S.A for a total amount of EUR 24,000 thousand. In 2019, EUR 3,372 thousand of this total amount was drawn down, with the total amount drawn down being EUR 17,208 thousand. After said loan was cancelled the company signed a new agreement with Banco Bilbao Vizcaya Argentaria, S.A. for a total amount of EUR 28,000

Management report for the period ended 31 December 2019

thousand. The purpose of the loan is to partially fund the investment costs necessary for the development of the shopping centre owned by the company and not covered by share capital contributions and finance the payment of fees, taxes and expenses inherent to the granting of financing documents. Interest of the new loan shall be calculated using the number of calendar days elapsed in each interest period, including the first day and excluding the last, by applying the Euribor 3M calculation plus a 1.85% spread. The effect of posting at amortised cost as at the date the borrowing was formalized totalled EUR 759 thousand.

3.2 Analysis of contractual obligations and off-balance-sheet operations

As at 31 December 2019, the Group has investment commitments referencing investment property totalled EUR 3,444 thousand, over and above those mentioned in point 3.1 or in the explanatory notes of the consolidated report.

As at 31 December of 2019, the Group does not present off-balance-sheet transactions that have had, or are expected to have, a significant effect on the financial position of the Group, the revenue and expenditure structure, the operating result, liquidity, capital expenses or on own resources.

4 Main risks and uncertainties

The Group is exposed to a variety of risk factors arising from the nature of its business. The Group's Board of Directors is responsible for approving the risk management and control policy, and it assumes responsibility for identifying the Group's main risks and supervising the internal oversight systems; it is informed by the Audit and Control Committee. The Group's Risk Management and Control System identifies, groups, manages and control risks that could potentially affects said Group in the areas that make up the Group's corporate risk map, which is adequately reported in the Annual Corporate Governance Report.

5 Significant circumstances occurring after the close

No important circumstances arose after the reporting period other than those mentioned under postclosing events.

6 Information on the foreseeable evolution of the Group

After the volume of investments made since March 2014, active property management capacity will be key in upcoming years.

This active management strategy will lead to an increase in current income and in profitability with respect to purchase price. All of this will be reflected in the increased value of the assets in our portfolio.

The Group will, however, continue to analyse any investment opportunities that may be attractive and thus continue to generate value for its shareholders.

With the appropriate reservations given the current situation, we believe that the Group will be in a position to continue making progress in 2020 and in subsequent years.

Management report for the period ended 31 December 2019

7 R&D&I activities

Due to the inherent characteristics of the companies that make up the Group, and their activities and structure, the Group does not usually conduct any research, development and innovation initiatives. However, Lar España remains committed to becoming the leader of the transformation of the retail sector, by creating new, more efficient and digital methods of interacting with external and internal customers (Customer Journey Experience).

8 Acquisition and disposal of treasury stock

The Parent Company formalised a share buy-back programme between Lar España and its liquidity provider, aimed at a maximum of 4,660,000 shares, representing 5% of the share capital, which may be acquired at a price no greater than (a) the price of the last independent transaction or (b) the highest independent offer at that time in the business centre where the purchase is made. The maximum deadline for this programme was 25 December 2019.

The aforesaid programme suspends the liquidity agreement with a financial intermediary pursuant to the terms of Circular 3/2007, of 19 December by the Spanish Securities Market Commission on liquidity agreements for the purposes of accepting same as a market practice and other applicable regulations, such that a restricted amount of EUR 500 thousand is held in the Treasury and there is a maximum of 63,000 shares available for purchase/sale as treasury shares.

On 28 February 2019 and 17 December 2019 marked the end of the share repurchase programs formalised between the Company and its liquidity supplier, said programs having a target of a maximum of 3,160,000 and 4,660,000 shares, respectively. After ending the treasury share repurchase programs, which temporarily suspended the liquidity agreement with a financial intermediary pursuant to terms of Circular 3/2007, of 19 December by the Spanish Securities Market Commission on liquidity agreements for the purposes of accepting same as a market practice and other relevant regulations, the agreement was renewed with the financial intermediate JB Capital Markets. By virtue of said liquidity agreements, a restricted amount of EUR 500 thousand is kept in the treasury and a maximum of 63,000 shares are kept for the sale of treasury shares.

The acquisitions were carried out within the framework of a discretionary treasury share management contract, of which the Spanish Securities Market Commission (CNMV) was notified in compliance with the recommendations published by said body on 18 July 2013.

As of 31 December 2019, the share price was EUR 7.10.

As of 31 December 2019, the Company holds a total of 103,820 shares, representing 0.1% of total issued shares.

On 10 June 2019, pursuant to the Board of Directors' resolution in 7 June 2019, the Parent Company reduced capital by EUR 6,506 thousand, corresponding to 3,252,820 shares of EUR 2 par value each and representing 3.5% of share capital. The capital reduction was charged against unrestricted reserves by appropriating to a capital redemption reserve an amount equal to the par value of the redeemed shares. This reserve will be restricted. The shares were redeemed using treasury shares, the value of which at the capital reduction date was EUR 24,743 thousand.

On 20 December 2019, pursuant to the Board of Directors' resolution in 19 December 2019, the Parent

Management report for the period ended 31 December 2019

Company reduced capital by EUR 5,908 thousand, corresponding to 2,953,831 shares of EUR 2 par value each and representing 3.5% of share capital. The capital decrease was charged against unrestricted reserves by appropriating EUR 5,908 thousand to a restricted capital redemption reserve, an amount equal to the par value of the redeemed shares. The shares were redeemed through the use of treasury shares, the value of which at the time of the capital decrease totalled EUR 21,682 thousand. On 30 December 2019 the deed reflecting the capital decrease carried out on 20 December 2019 was entered at the Commercial Registry.

9 Other relevant information

9.1 Stock exchange information

The initial share price at the start of the year was EUR 7.33 and the nominal value at the reporting date was EUR 7.10. During 2019, the average price per share was EUR 7.46.

It is important to take into consideration that in April 2019, the following capital increase was effected, where same was fully subscribed by Grupo Lar Inversiones Inmobiliarias by virtue of the formalised management contract.

The issue of 621,337 shares with a nominal value of EUR 2 plus an issue premium of EUR 8.34 per share.

The Group does not currently have a credit rating from the principal international rating agencies.

9.2 Dividend policy

On 25 April 2019, the General Shareholders' Meeting approved the distribution of a dividend of EUR 68,353 thousand, at EUR 0.73 per share (considering all the shares issued) with a charge to 2018 profit, and a dividend of EUR 6,647 thousand or EUR 0.07 per share (considering all outstanding shares) with a charge to the share premium.

9.3 Average number of days payable outstanding to suppliers

The average number of days payable outstanding to suppliers is 33, complying with the maximum legal payment period applicable to the Company in the year 2019 according to Law 3/2004, of 29 December containing measures to combat late payments in commercial transactions and in accordance with the transitory provisions established in Law 15/2010, of 5 July.

10 Annual Corporate Governance Report

To the effects of Article 538 of the Spanish Companies Act, it is stated for the record that the 2019 Annual Corporate Governance Report forms part of this Director's Report.

Management report for the period ended 31 December 2019

11 Events after the reporting period

Preparation of the consolidated financial statements Yearly period ended on 31 December 2019 and statement of compliance of LAR ESPAÑA REAL ESTATE SOCIMI, S.A.

At their meeting held on 13 February 2020, pursuant to the requirements of Article 253 of the Revised Spanish Companies Act and Article 37 of the Spanish Code of Commerce, the Directors of Lar España Real Estate SOCIMI, S.A. (hereinafter the "Company" or "Lar España") drew up the consolidated financial statements and consolidated management report for the period ended 31 December 2019. The consolidated financial statements comprise the adjoined documents that precede this writ and are labelled on the adjoined folios of ordinary paper. All of said folios have been endorsed by the Vice-Secretary of the Board of Directors and this last sheet has been signed by all the members of the Board of Directors.

According to the provisions of Royal Decree 1362/2007, of 19 October, (Article 8.1 b) the undersigning Directors of Lar España and Subsidiaries (the "Group"), hereby declare that:

To the best of their knowledge, the consolidated financial statements of Lar España and its subsidiaries for the annual period ended 31 December 2019, prepared in accordance with applicable accounting principles, present fairly the equity, financial position and results of the Group and that the consolidated management report accompanying the consolidated financial statements includes an accurate analysis of the development and business results and position of the Company and the companies included in its consolidation perimeter as a whole, along with a description of the main risks and uncertainties that they face.

Signatories:

Mr José Luis del Valle Doblado (Chairman) Mr. José Luis del Valle Doblado (on behalf

of Mr. Alec Emmott)

Mr Roger Maxwell Cooke Ms Leticia Iglesias Herraiz

Mr Miguel Pereda Espeso Mr. José Luis del Valle Doblado (on behalf of Mr. Laurent Luccioni)

Ms Isabel Aguilera Navarro

Madrid, 13 February 2020

*The Director Mr Laurent Luccioni and the Director Mr. Alec Emmott attended the meeting via telephone and approved the financial statements. As such, the financial statements were drawn up and Mr José Luis del Valle Doblado was expressly authorised to sign the statements on behalf of Mr Luccioni and Mr Alec Emmott.

^A ^p ^p ^e ⁿ ^d i x ^I

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^R ^o ^s ^a r i o ^P i n ^o ¹ ⁴ ^O ¹ ⁶ , ^M ^a ^d ^r i d .

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^Y ^e ^s ^N ^o ^X

l a s s C	N u e r o f m b s h a r e s	n i t p a r v a l u e U	n i t n o . o f v o t i n g r i g h t s U	i g i f f e h t s r D r e n t

^A . 2 ^L i s ^t t h ^e ^c ^o ^m ^p ^a ⁿ ^y ' s ^s i g ⁿ i f i c ^a ⁿ ^t ^d i r ^e ^c ^t ^a ⁿ ^d i n ^d i r ^e ^c ^t ^s ^h ^a ^r ^e ^h ^o l d ^e ^r ^s ^a ^t ^y ^e ^a ^r Æ e ⁿ ^d , ^e ^x ^c l u ^d i n ^g ^d i r ^e ^c t o ^r ^s :

N a e o r c o p a n y m m	N u e r o f m b	n d i r e c t v o t i n g r i g h t s I	% o f t o t a l
n a e o f m s h a r e h o l d e r	d i r e c t v o t i n g r i g h t s	N a e o r c o p a n y n a e o f m m m t h e d i r e c t s h a r e h o l d e r	N u e r o f m b v o t i n g r i g h t s	v o t i n g r i g h t s
I N B L A C K R O C K C	0		2 , 7 7 8 , 4 9 7	3 . 6 7 9 %
B R A N D E S I N V E S T M E N T S , L . P . P A R T N E R	0		4 , 5 5 5 , 4 8 9	1 % 5 . 0 3
L I N F R A N K I N T I O T E R N A N A L S M A L L C A P G R O W T H F U N D	4 , 5 7 0 , 5 0 1		0	4 . 9 3 4 %
L I N F R A N K T E M P L E T O N I N S T I T U T I O N A L , L L C	0	F T I F ï F r a n k l i n E u r o p e a n a l l S m i d r o w t h M C a p G F u n d T ï F r a n k l i n I n t e r n a t i o n a l F G a l l C r o w t h S m a p G F u n d	7 , 3 2 2 , 7 7 3	7 . 9 0 5 %
G R U P O L A R I N S I O V E R N E S I N I L I A I A M O B R S , S . A	9 , 4 7 6 , 4 0 0		0	1 0 . 0 0 0 %
P I M I I C O B R A V O , L . P . F U N D	0	I I L U X X I I S . À . R . L . L V S	1 8 , 1 5 7 , 4 5 9	2 0 . 0 4 4 %
I A S . A S A N T A L U C I A C D E S E G U R O S	3 , 6 2 4 , 5 9 3		1 , 2 3 7 , 8 9 0	1 6 % 5 . 2
I N B L A C K R O C K C	0		2 , 7 7 8 , 4 9 7	3 . 6 7 9 %

^I ⁿ ^d i c ^a t e t h ^e ^m ^o ^s ^t ^s i g ⁿ i f i c ^a ⁿ ^t ^m ^o ^v ^e ^m ^e ⁿ t s i n t h ^e ^s ^h ^a ^r ^e ^h ^o l d ^e ^r ^s t r ^u ^c t u ^r ^e ^d ^u ^r i n ^g t h ^e f i n ^a ⁿ ^c i a ^l ^y ^e ^a ^r :

I n ² ⁰ 1 9 , ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^h ^a ^s ^c ^a r r i e ^d ^o ^u ^t ^a ⁿ i n ^c r e ^a ^s ^e ^a ⁿ ^d t w ^o ^c ^a ^p i t a ^l r e ^d ^u ^c t i o ⁿ ^s , i n ^a ^d ^d i t i o ⁿ t o ^c ^o ⁿ t i n ^u i n ^g ^w i t h i t ^s ^s ^h ^a r e ^b ^u ^y ^b ^a ^c ^k ^p r o ^g r a ^m .

^T ^h ^e ^c ^a ^p i t a ^l i n ^c r e ^a ^s ^e ^w ^a ^s ^a ^p ^p r o ^v ^e ^d ^a ^t t h ^e ^G ^e ⁿ ^e r a ^l ^S ^h ^a r e ^h ^o l d ^e ^r ^s ' ^M ^e ^e t i n ^g ^o ⁿ ^A ^p r i l ² ⁵ , ² ⁰ 1 9 ^a ⁿ ^d ^w ^a ^s ^p r e ^s ^e ⁿ t e ^d t o t h ^e ^p ^u ^b l i ^c ^o ⁿ ^J ^u ⁿ ^e 1 0 , ² ⁰ 1 9 . ^T ^h ^e ^o ^p ^e r a t i o ⁿ ^h ^a ^s ^b ^e ^e ⁿ ^f ^u l l ^y ^s ^u ^b ^s ^c r i ^b ^e ^d ^a ⁿ ^d ^p ^a i d ^u ^p ^b ^y i t ^s ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^c ^o ^m ^p ^a ⁿ ^y , ^G r u ^p ^o ^L ^a ^r I n ^v ^e ^r ^s i o ⁿ ^e ^s I n ^m ^o ^b i l i a r i a ^s , ^S . A . ( " ^G r u ^p ^o ^L ^a ^r " ) , t h r o ^u ^g ^h t h ^e ^d ⁱ ^s ^b ^u ^r ^s ^e ^m ^e ⁿ ^t ^o ^f t h ^e ^a ^m ^o ^u ⁿ ^t r e ^c ^e ⁱ ^v ^e ^d ^a ^s ^a ^p ^e ^r ^f ^o r m ^a ⁿ ^c ^e ^f ^e ^e . ^T ^h ^e ^s ^h ^a r e ^c ^a ^p i t a ^l ^w ^a ^s i n ^c r e ^a ^s ^e ^d ^b ^y ^a ⁿ ^a ^m ^o ^u ⁿ ^t ^o ^f 1 , 2 ⁴ ² , 6 ⁷ ⁴ . 0 ⁰ ^e ^u r o ^s t h r o ^u ^g ^h t h ^e ⁱ ^s ^s ^u ^a ⁿ ^c ^e ^o ^f ⁶ ² 1 , 3 ³ ⁷ r e ^g ⁱ ^s t e r e ^d ^s ^h ^a r e ^s ^o ^f t w ^o ^e ^u r o ^s ^o ^f ⁿ ^o ^m i n ^a ^l ^v ^a l u ^e ^e ^a ^c ^h , ^a ^t ^a ^u ⁿ i t ⁱ ^s ^s ^u ^a ⁿ ^c ^e r a t e ^o ^f 1 0 . 3 ⁴ ^e ^u r o ^s .

^T ^h ^e ^f i r ^s ^t ^c ^a ^p i t a ^l r e ^d ^u ^c t i o ⁿ ^w ^a ^s ^m ^a ^d ^e t h r o ^u ^g ^h ^a ^m ^o r t i ^z ^a t i o ⁿ ^o ^f ^o ^w ⁿ ^s ^h ^a r e ^s t h ^a ^t ^w ^a ^s ^a ^p ^p r o ^v ^e ^d ^b ^y t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y , ^d ^a t e ^d ^J ^u ⁿ ^e ⁷ , ² ⁰ 1 9 . ^T ^h ^e ^s ^h ^a r e ^c ^a ^p i t a ^l ^o ^f ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^h ^a ^s ^b ^e ^e ⁿ r e ^d ^u ^c ^e ^d ^b ^y ⁶ , 5 ⁰ ⁵ , 6 ⁴ ⁰ . 0 ⁰ ^e ^u r o ^s ^a ^s ^a ^c ^o ⁿ ^s ^e ^q ^u ^e ⁿ ^c ^e ^o ^f t h ^e ^a ^m ^o r t i ^z ^a t i o ⁿ ^o ^f ³ , 2 ⁵ ² , 8 ² ⁰ ^o ^w ⁿ ^s ^h ^a r e ^s ^o ^f t w ^o ^e ^u r o ^s ^o ^f ⁿ ^o ^m i n ^a ^l ^v ^a l u ^e ^e ^a ^c ^h .

^T ^h ^e ^s ^e ^c ^o ⁿ ^d ^c ^a ^p i t a ^l r e ^d ^u ^c t i o ⁿ ^w ^a ^s ^m ^a ^d ^e ^o ⁿ ^D ^e ^c ^e ^m ^b ^e ^r ² ⁰ ^a ⁿ ^d ^a ^p ^p r o ^v ^e ^d ^o ⁿ ^D ^e ^c ^e ^m ^b ^e ^r 1 9 ^b ^y t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s , ^u ⁿ ^d ^e ^r t h ^e ^d ^e l e ^g ^a t i o ⁿ ^m ^a ^d ^e ^b ^y t h ^e ^o r d i n ^a ^r ^y ^G ^e ⁿ ^e r a ^l ^M ^e ^e t i n ^g ^o ^f ^s ^h ^a r e ^h ^o l d ^e ^r ^s ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^h ^e l d ^o ⁿ ^M ^a ^y ² ⁹ , ² ⁰ 1 7 . T ^h ⁱ ^s ^o ^p ^e r a t i o ⁿ ^h ^a ^s r e ^d ^u ^c ^e ^d t h ^e ^c ^a ^p i t a ^l ^s t o ^c ^k ^b ^y ⁵ , 9 ⁰ ⁷ , 6 ⁶ ² ^e ^u r o ^s ^a ^s ^a r e ^s ^u l t ^o ^f t h ^e ^a ^m ^o r t i ^z ^a t i o ⁿ ^o ^f ² , 9 ⁵ ³ , 8 ³ ¹ ^o ^w ⁿ ^s ^h ^a r e ^s ^o ^f t w ^o ^e ^u r o ^s ^o ^f ⁿ ^o ^m i n ^a ^l ^v ^a l u ^e ^e ^a ^c ^h .

^F ^o l l o ^w i n ^g t h ^e ^e ^x ^e ^c ^u t i o ⁿ ^o ^f t h ^e ^c ^a ^p i t a ^l r e ^d ^u ^c t i o ⁿ , t h ^e ^C ^o ^m ^p ^a ⁿ ^y ' s ^s ^h ^a r e ^c ^a ^p i t a ^l ^h ^a ^s ^b ^e ^e ⁿ ^s ^e ^t ^a ^t 1 7 ⁵ , 2 ⁶ ⁷ , 4 ⁶ ⁰ ^e ^u r o ^s , r e ^p r e ^s ^e ⁿ t e ^d ^b ^y ⁸ ⁷ , 6 ³ ³ , 7 ³ ⁰ r e ^g ⁱ ^s t e r e ^d ^s ^h ^a r e ^s ^o ^f t w ^o ^e ^u r o ^s ^o ^f ⁿ ^o ^m i n ^a ^l ^v ^a l u ^e ^e ^a ^c ^h .

^T ^h ^e ^s ^h ^a r e ^b ^u ^y ^b ^a ^c ^k ^p r o ^g r a ^m ⁱ ^s ^e ^x ^p l a i n ^e ^d i n ^s ^e ^c t i o ⁿ ^s ^A . 8 ^a ⁿ ^d ^A . 9 ^o ^f t h ⁱ ^s r e ^p ^o r t .

I n ^a ^d ^d i t i o ⁿ , ^d ^u r i n ^g ² ⁰ 1 9 t h ^e r e ^h ^a ^s ^b ^e ^e ⁿ ^a ^v ^a r i a t i o ⁿ i n ^s ^h ^a r e ^h ^o l d ^e ^r ^s ^w i t h ^s ⁱ ^g ⁿ ⁱ ^f ⁱ ^c ^a ⁿ ^t ^h ^o l d i n ^g ^s , ^w ^h ⁱ ^c ^h ^a ^c ^c ^o r d i n ^g t o ^a r t i ^c l e ⁸ ^o ^f t h ^e ^b ^y l a ^w ^a r e t h ^o ^s ^e ^w i t h ^a ^p ^e ^r ^c ^e ⁿ t a ^g ^e ^e ^q ^u ^a ^l t o ^o ^r ^g r e ^a t e ^r t h ^a ⁿ ⁵ % . ^S ^a ⁿ t a ^L ^u ^c i a ^S . A . r e ^a ^c ^h ^e ^d ^a ^s ⁱ ^g ⁿ ⁱ ^f ⁱ ^c ^a ⁿ ^t ^p ^a r t i ^c i p ^a t i o ⁿ ^q ^u ^o t a ^o ^f ⁵ . 2 1 6 % ^d ^a t e ^d ^M ^a ^r ^c ^h 1 2 , ² ⁰ 1 9 . ^T ^h r e ^a ^d ⁿ ^e ^e ^d l e ^A ^s ^s ^e ^t ^s ^o l d i t ^s ^h ^o l d i n ^g ^s t h ^a ^t r e ^a ^c ^h ^e ^d ^a ^p ^a r t i ^c i p ^a t i o ⁿ ^q ^u ^o t a ^o ^f ⁵ . 0 ² ⁴ % . ^T ^h ^e ^s ^a l e ^h ^a ^s ^b ^e ^e ⁿ ^c ^a r r i e ^d ^o ^u ^t i n ^a ^p ^h ^a ^s ^e ^d ^m ^a ⁿ ⁿ ^e ^r i n ^s ^e ^v ^e r a ^l ^s ^e ^s ^s i o ⁿ ^s ^o ^f ^s ^a l e ^o ^f ^s ^h ^a r e ^s .

^O ⁿ ^J ^u ^l ^y ⁸ , ² ⁰ 1 9 ^P I M ^C ^O ^B ^R ^A ^V ^O I I ^F ^u ⁿ ^d . ^L . P . ^s t a t e ^d t h ^a ^t ^h ^e ^h ^a ^d ^c r o ^s ^s ^e ^d t h ^e ² ⁰ % t h r e ^s ^h ^o l d ^a ^s ^a r e ^s ^u l t ^o ^f t h ^e ^c ^h ^a ⁿ ^g ^e i n ^v ^o t i n ^g r i ^g ^h ^t ^s ^o ^f t h ^e ⁱ ^s ^s ^u ^e r . ^T ^h ⁱ ^s ^f ^a ^c ^t ^w ^a ^s ⁿ ^o t i ^f i e ^d t o t h ^e ^C ^N ^M ^V , ⁿ ^o t i f y i n ^g t h ^a ^t t h ^e ^d ^a t e ^o ⁿ ^w ^h ⁱ ^c ^h ^s ^a i d t h r e ^s ^h ^o l d ^w ^a ^s ^c r o ^s ^s ^e ^d ^w ^a ^s ^J ^u ⁿ ^e ⁷ , ² ⁰ 1 9 , r e ^a ^c ^h ^e ^d ² ⁰ . 0 ⁴ ⁴ % .

N a e o r c o p a n y n a e o f m m m s h a r e h o l d e r	r a n s a c t i o n d a t e T	r a n s a c t i o n a c k g r o u n d T b
S . A S A N T A L U C Í A	1 2 / 0 3 / 2 0 1 9	s h a r e s P u r c h a s e o f a b o v e t h e t h r e s h o l d " S i g n i f i c a n t o f P a r t i c i p a t i o n " i n t h e c o m p a n y .
I N S I O G R U P O L A R V E R N E S I N I L I A I A S , S . A M O B R	1 0 / 0 6 / 2 0 1 9	I n c r e a s e i n p a r t i c i p a t i o n d u e t o c a p i t a l i n c r e a s e .
S . A L A R E S P A Ñ A	1 0 / 0 6 / 2 0 1 9	e d u c t i o n s h a r e s t o R o f d u e o r t i z a t i o n s h a r e s . a m o f o w n
P I M I I F U C O B R A V O N D L . P .	1 0 / 0 6 / 2 0 1 9	I n c r e a s e i n s h a r e p e r c e n t a g e t o t h e o r t i z a t i o n d u e a m o f s h a r e s o w n e d b y L A R S . A E s p a ñ a
T H R E A D N E E D L E A S S E T	s e v e r a l	S a l e o f s h a r e s . P r e v i o u s l y i t q u o t a h i g h e r t h a n t h e h a d a t h r e s h o l d " S i g n i f i c a n t o f

		P a r t i c i p a t i o n s " .
S . A L A R E S P A Ñ A	2 0 / 1 2 / 2 0 1 9	e d u c t i o n s h a r e s t o R o f d u e o r t i z a t i o n s h a r e s . a m o f o w n

^A . ³ ^C ^o ^m ^p l e t e t h ^e f o l l o ^w i n ^g t a ^b l e ^s ^d ^e t a i l i n ^g t h ^e ^d i r ^e ^c t o ^r ^s ^w ^h ^o ^h ^a ^v ^e ^v ^o t i n ^g ^s ^h ^a ^r ^e ^s i n t h ^e ^c ^o ^m ^p ^a ⁿ ^y :

N a e o r c o p a n y m m	N u e r o f m b	n d i r e c t v o t i n g I	t o t a l o f
d i r e c t o r n a e o f m	d i r e c t v o t i n g r i g h t s	d i r e c t N u e r o f m b v o t i n g r i g h t s	N u e r o f m b d i r e c t v o t i n g r i g h t s	v o t i n g r i g h t s
a l l e J o s é L u i s d e l V	0	o r , S I C , S . A E u g e m A V	2 2 , 4 2 5	0 . 0 2 5 %
g u i l e r a I s a b e l A	2 , 6 2 0		2 , 6 2 0	0 . 0 0 3 %
l e c o t t A E m m	1 , 1 5 5		1 , 1 5 5	0 . 0 0 1 %
e l l R o g e r M a x w C o o k e	2 , 5 0 0		2 , 5 0 0	0 . 0 0 3 %
i g u e l P e r e d a M	2 9 , 9 0 5		2 9 , 9 0 5	0 . 0 3 2 %
L e t i c i a I g l e s i a s	3 5 0		3 5 0	0 . 0 0 0 %

t o t a l v o t i n g r i g h t s h e l d t h e o f y o a r d o f b b	0 . 0 6 4 %
d i r e c t o r s

^C ^o ^m ^p l e t e t h ^e f o l l o ^w i n ^g t a ^b l e ^d ^e t a i l i n ^g t h ^e ^d i r ^e ^c t o ^r ^s ^w ^h ^o ^h ^a ^v ^e ^s t o ^c ^k ^o ^p t i o ⁿ ^s i n t h ^e ^c ^o ^m ^p ^a ⁿ ^y :

N a e o r m c o p a n y m n a e o f m d i r e c t o r	N u e r o f m b d i r e c t v o t i n g r i g h t s	n d i r e c t I N a e m t h e o f d i r e c t s h a r e h o l d e r	v o t i n g r i g h t s N u e r o f m b v o t i n g r i g h t s	N u e r o f m b e q u i v a l e n t s h a r e s	o f t o t a l v o t i n g r i g h t s

^A . ⁴ ^W ^h ^e ^r ^e ^a ^p ^p l i c ^a ^b l e , l i s ^t f a ^m i l y , ^c ^o ^m ^m ^e ^r ^c i a l , ^c ^o ⁿ t r ^a ^c t u ^a ^l ^o ^r ^c ^o ^r ^p ^o ^r ^a t e ^r ^e l a t i o ⁿ ^s ^h i p ^s ^b ^e t w ^e ^e ⁿ ^s i g ⁿ i f i c ^a ⁿ ^t ^s ^h ^a ^r ^e ^h ^o l d ^e ^r ^s , t o t h ^e ^e ^x t e ⁿ ^t t h ^a ^t t h ^e ^c ^o ^m ^p ^a ⁿ ^y i s ^a ^w ^a ^r ^e ^o ^f t h ^e ^m , ^u ⁿ l e ^s ^s t h ^e ^y ^a ^r ^e ^s ^c ^a ⁿ t l y ^m ^a t e ^r i a ^l ^o ^r ^d ^e ^r ⁱ ^v ^e f r ^o ^m t h ^e ^c ^o ^m ^p ^a ⁿ ^y ' s ^o ^r ^d i n ^a ^r ^y ^c ^o ^u ^r ^s ^e ^o ^f ^b ^u ^s i n ^e ^s ^s :

N a e o r c o p a n y n a e o f m m m r e l a t e d p a r t y	y p e o f T r e l a t i o n s h i p	r i e f d e s c r i p t i o n B
i g u e l P e r e d a r u p o M y G L a r		i g u e l P e r e d a p a r t o f t h e P e r e d a M i s
I n v e r s i o n e s I n m o b i l i a r i a s ,		i l y , o w r u p o I n v e r s i o n e s f a m n e r o f G L a r
S . A		I n m o b i l i a r i a s , S . A

^A . ⁵ ^W ^h ^e ^r ^e ^a ^p ^p l i c ^a ^b l e , l i s ^t ^c ^o ^m ^m ^e ^r ^c i a l , ^c ^o ⁿ t r ^a ^c t u ^a ^l ^o ^r ^c ^o ^r ^p ^o ^r ^a t e ^r ^e l a t i o ⁿ ^s ^h i p ^s ^b ^e t w ^e ^e ⁿ ^s i g ⁿ i f i c ^a ⁿ ^t ^s ^h ^a ^r ^e ^h ^o l d ^e ^r ^s ^a ⁿ ^d t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^a ⁿ ^d / ^o ^r i t s ^g ^r ^o ^u ^p , ^u ⁿ l e ^s ^s t h ^e ^y ^a ^r ^e ^s ^c ^a ⁿ t l y ^m ^a t e ^r i a ^l ^o ^r ^d ^e ^r ⁱ ^v ^e f r ^o ^m t h ^e ^c ^o ^m ^p ^a ⁿ ^y ' s ^o ^r ^d i n ^a ^r ^y ^c ^o ^u ^r ^s ^e ^o ^f ^b ^u ^s i n ^e ^s ^s :

N a e o r c o p a n y n a e o f m m m	y p e o f T	r i e f d e s c r i p t i o n
r e l a t e d p a r t y		B
I I L U X X I I , L V S	r e l a t i o n s h i p o n t r a c t u a l C	f i r s t r e f u s a l i n r e l a t i o n t o R i g h t o f
S . A . R . L ( P I M ) C O	" S u b s c r i p t i o n	c e r t a i n o p p o r t u n i t i e s t o j o i n t l y i n v e s t
	A g r e e m e n t "	i n r e s i d e n t i a l p r o p e r t i e s . s e r v i c e a n d
	o n t r a c t u a l C
r u p o I n v e r s i o n e s G L a r	" I n v e s t m e n t	e n t a g r e e m C o m p a n y m a n a g e m e n t
I n m o b i l i a r i a s , S . A	M a n a g e m e n t
	A g r e e m e n t "

^A . ⁶ ^I ⁿ ^d i c ^a t e ^w ^h ^e t h ^e ^r t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^h ^a ^s ^b ^e ^e ⁿ ⁿ ^o t i f i e ^d ^o ^f ^a ⁿ ^y ^a ^g ^r ^e ^e ^m ^e ⁿ t s ^b ^e t w ^e ^e ⁿ ^s ^h ^a ^r ^e ^h ^o l d ^e ^r ^s ^w i t h i n t h ^e ^m ^e ^a ⁿ i n ^g ^o ^f ^a ^r t i c l e ^s ⁵ ³ ⁰ ^a ⁿ ^d ⁵ ³ ¹ ^o ^f t h ^e ^S ^p ^a ⁿ i s ^h ^C ^o ^r ^p ^o ^r ^a t e ^E ⁿ t e ^r ^p ^r i s ^e ^s ^A ^c ^t ^P ^r ^o ^v i d ^e ^a ^b ^r i e ^f ^d ^e ^s ^c ^r i p t i o ⁿ ^a ⁿ ^d l i s ^t t h ^e ^s ^h ^a ^r ^e ^h ^o l d ^e ^r ^s ^b ^o ^u ⁿ ^d ^b ^y t h ^e ^m , ^a ^s ^a ^p ^p l i c ^a ^b l e :

^Y ^e ^s ^N ^o ^X

h a r e h o l d e r s o u n d y S b b a g r e e e n t m	o f s h a r e c a p i t a l a f f e c t e d	r i e f d e s c r i p t i o n o f a g r e e e n t m B

^I ⁿ ^d i c ^a t e ^w ^h ^e t h ^e ^r t h ^e ^c ^o ^m ^p ^a ⁿ ^y i s ^a ^w ^a ^r ^e ^o ^f t h ^e ^e ^x i s t e ⁿ ^c ^e ^o ^f ^a ⁿ ^y ^c ^o ⁿ ^c ^e ^r t e ^d ^a ^c t i o ⁿ ^s ^a ^m ^o ⁿ ^g i t s ^s ^h ^a ^r ^e ^h ^o l d ^e ^r ^s . ^I ^f ^s ^o , ^d ^e ^s ^c ^r ⁱ ^b ^e ^b ^r i e f l y .

^Y ^e ^s ^N ^o ^X

a r t i e s t o t h e c o n c e r t e d P a c t i o n s	o f s h a r e c a p i t a l a f f e c t e d	r i e f d e s c r i p t i o n t h e o f c o n c e r t e d a c t i o n B

^E ^x ^p ^r ^e ^s ^s l y i n ^d i c ^a t e ^a ⁿ ^y ^c ^h ^a ⁿ ^g ^e i n , ^o ^r ^b ^r ^e ^a ^k Æ u ^p ^o f , ^s ^a i d ^c ^o ⁿ ^c ^e ^r t e ^d ^a ^c t i o ⁿ ^s ^o ^r ^a ^g ^r ^e ^e ^m ^e ⁿ t s ^d ^u ^r i n ^g t h ^e ^y ^e ^a ^r .

^A . ⁷ ^I ⁿ ^d i c ^a t e ^w ^h ^e t h ^e ^r ^a ⁿ ^y ⁿ ^a t u ^r ^a ^l ^o ^r l e ^g ^a ^l ^p ^e ^r ^s ^o ⁿ ^s ^c ^u ^r ^r ^e ⁿ t l y ^e ^x ^e ^r ^c i s ^e ^o ^r ^m ^a ^y ^e ^x ^e ^r ^c i s ^e ^c ^o ⁿ t r ^o ^l ^o ^v ^e ^r t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^p ^u ^r ^s ^u ^a ⁿ ^t t o ^a ^r t i c l e ⁵ ^o ^f t h ^e ^S ^p ^a ⁿ i s ^h ^S ^e ^c ^u ^r i t i e ^s ^M ^a ^r ^k ^e ^t ^A ^c t . ^I ^f ^s ^o , i d ^e ⁿ t i f y t h ^e ^m .

^Y ^e ^s ^N ^o ^X

N a e o r c o p a n y n a e m m m

s e r v a t i o n s O b

^A . ⁸ ^C ^o ^m ^p l e t e t h ^e f o l l o ^w i n ^g t a ^b l e ^s ^o ⁿ t h ^e ^c ^o ^m ^p ^a ⁿ ^y ' s t r ^e ^a ^s ^u ^r ^y ^s t o ^c ^k :

^t ^y ^e ^a ^r ^e ⁿ ^d :

N u e r o f m b h e l d s h a r e s d i r e c t l y	h e l d N u e r o f s h a r e s m b i n d i r e c t l y ( * )	o f t o t a l s h a r e c a p i t a l
1 0 3 , 8 2 0	0	0 . 1 2 %

( * ) ^H ^e l d t h ^r ^o ^u ^g ^h :

N a e o r c o p a n y n a e m m m t h e d i r e c t s h a r e h o l d e r o f	h e l d d i r e c t l y N u e r o f s h a r e s m b
/ A N	/ A N
L T O T A

^E ^x ^p l a i n ^a ⁿ ^y ^s i g ⁿ i f i c ^a ⁿ ^t ^v ^a ^r i a t i o ⁿ ^s ^a ^r i s i n ^g ^d ^u ^r i n ^g t h ^e f i n ^a ⁿ ^c i a ^l ^y ^e ^a ^r , ^p ^u ^r ^s ^u ^a ⁿ ^t t o ^S ^p ^a ⁿ i s ^h ^R ^o ^y ^a ^l ^D ^e ^c ^r ^e ^e ¹ ³ ⁶ ² / 2 ⁰ ⁰ ⁷ :

^A . ⁹ ^D ^e t a i l t h ^e t e ^r ^m ^s ^a ⁿ ^d ^c ^o ⁿ ^d i t i o ⁿ ^s ^o ^f t h ^e ^a ^u t h ^o ^r i s ^a t i o ⁿ ^c ^o ⁿ f e ^r ^r ^e ^d ^a ^t t h ^e ^g ^e ⁿ ^e ^r ^a ^l ^m ^e ^e t i n ^g t o t h ^e ^b ^o ^a ^r ^d ^o ^f ^d i r ^e ^c t o ^r ^s t o i s ^s ^u ^e , ^b ^u ^y ^b ^a ^c ^k ^o ^r ^s ^e l l t r ^e ^a ^s ^u ^r ^y ^s t o ^c ^k .

^A ^s ^e ^s t a ^b l i ^s ^h ^e ^d i n ^a r t i ^c l e ⁵ . n ^o ^f t h ^e ^R ^e ^g ^u l a t i o ⁿ ^s ^o ^f t h ^e ^G ^e ⁿ ^e r a ^l ^S ^h ^a r e ^h ^o l d ^e ^r ^s ' ^M ^e ^e t i n ^g , i t ⁱ ^s t h ^e r e ^s ^p ^o ⁿ ^s ⁱ ^b i l i t ^y ^o ^f t h ^e ^B ^o ^a r d t o ^a ^u t h ^o r i ^z ^e t h ^e ^d ^e r i ^v ^a t i ^v ^e ^a ^c ^q ^u ⁱ ^s i t i o ⁿ ^o ^f ^o ^w ⁿ ^s ^h ^a r e ^s .

^A ^t t h ^e ^G ^e ⁿ ^e r a ^l ^M ^e ^e t i n ^g ^o ^f ^O r d i n ^a ^r ^y ^S ^h ^a r e ^h ^o l d ^e ^r ^s ^h ^e l d i n ^M ^a ^y ² ⁰ 1 7 , i t ^w ^a ^s ^a ^g r e ^e ^d t o ^d ^e l e ^g ^a t e t o t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s , ^f ^o ^r ^a t e r m ^o ^f ^f ⁱ ^v ^e ^y ^e ^a ^r ^s , t h ^e ^a ^u t h ^o r i ^z ^a t i o ⁿ ^f ^o ^r t h ^e ^d ^e r i ^v ^a t i ^v ^e ^a ^c ^q ^u ⁱ ^s i t i o ⁿ ^o ^f ^o ^w ⁿ ^s ^h ^a r e ^s i n ^a ^c ^c ^o r d ^a ⁿ ^c ^e ^w i t h t h ^e l i m i t ^s ^a ⁿ ^d r e ^q ^u i r e ^m ^e ⁿ ^t ^s ^e ^s t a ^b l i ^s ^h ^e ^d i n t h ^e ^L ^a ^w ^o ⁿ ^C ^a ^p i t a ^l ^C ^o ^m ^p ^a ⁿ i e ^s , ^e ^x ^p r e ^s ^s ^l ^y ^e ^m ^p ^o ^w ^e r i n ^g ^y ^o ^u t o r e ^d ^u ^c ^e , ^w ^h ^e r e ^a ^p ^p r o ^p r i a t e , t h ^e ^s ^h ^a r e ^c ^a ^p i t a ^l ^o ⁿ ^c ^e ^o ^r ^s ^e ^v ^e r a ^l t i m ^e ^s i n ^o r d ^e ^r t o ^p r o ^c ^e ^e ^d ^w i t h t h ^e ^a ^m ^o r t i ^z ^a t i o ⁿ ^o ^f t h ^e ^o ^w ⁿ ^s ^h ^a r e ^s ^a ^c ^q ^u i r e ^d . ^D ^e l e ^g ^a t i o ⁿ ^o ^f ^p ^o ^w ^e ^r ^s t o t h ^e ^B ^o ^a r d ^f ^o ^r t h ^e ^e ^x ^e ^c ^u t i o ⁿ ^o ^f t h ^e i n ^d ⁱ ^c ^a t e ^d ^a ^g r e ^e ^m ^e ⁿ t .

^D ^u r i n ^g ² ⁰ 1 9 , t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^h ^a ^s ^c ^a r r i e ^d ^o ^u ^t t h ^e ^a ^c ^q ^u ⁱ ^s i t i o ⁿ ^a ⁿ ^d ^a ^m ^o r t i ^z ^a t i o ⁿ ^o ^f ^o ^w ⁿ ^s ^h ^a r e ^s ^a ^c ^c ^o r d i n ^g t o t h ^e ^p ^o ^w ^e ^r ^d ^e l e ^g ^a t e ^d ^b ^y t h ^e ^G ^e ⁿ ^e r a ^l ^M ^e ^e t i n ^g ^o ^f ^O r d i n ^a ^r ^y ^S ^h ^a r e ^h ^o l d ^e ^r ^s .

^A . 9 ^b i s ^E ^s t i ^m ^a t e ^d f r ^e ^e f l o ^a t :

s t i a t e d f r e e f l o a t E m	6 7 . 7 %
----------------------------------------------------	--------------

^A . ¹ ⁰ ^I t e ^m i s ^e ^a ⁿ ^y ^r ^e ^s t r i c t i o ⁿ ^s ^o ⁿ t h ^e ^a ^b i l i t y t o t r ^a ⁿ ^s f e ^r ^s ^e ^c ^u ^r i t i e ^s ^a ⁿ ^d / ^o ^r ^e ^x ^e ^r ^c i s ^e ^v ^o t i n ^g ^r i g ^h t s . ^S ^p ^e ^c i f i c ^a l l y i n ^d i c ^a t e t h ^e ^e ^x i s t e ⁿ ^c ^e ^o ^f ^a ⁿ ^y ^r ^e ^s t r i c t i o ⁿ ^s i n t e ⁿ ^d ^e ^d t o ⁱ ^m ^p ^e ^d ^e t h ^e ^c ^o ^m ^p ^a ⁿ ^y ' s t a ^k ^e ^o ^v ^e ^r ^b ^y ^m ^e ^a ⁿ ^s ^o ^f ^s ^h ^a ^r ^e ^p ^u ^r ^c ^h ^a ^s ^e ^s ^o ⁿ t h ^e ^o ^p ^e ⁿ ^m ^a ^r ^k ^e t .

^I ⁿ ^d i c ^a t e ^w ^h ^e t h ^e ^r t h ^e ^r ^e ^a ^r ^e ^a ⁿ ^y l e ^g ^a ^l ^r ^e ^s t r i c t i o ⁿ ^s ^o ⁿ t h ^e ^e ^x ^e ^r ^c i s ^e ^o ^f ^v ^o t i n ^g ^r i g ^h t s :

^e ^s ^X ^N ^o

^D ^e ^s ^c ^r i p t i o ⁿ ^o ^f t h ^e ^r ^e ^s t r i c t i o ⁿ ^s

^P ^u ^r ^s ^u ^a ⁿ ^t t o ^s ^e ^c t i o ⁿ ⁷ . 2 . 2 ^o ^f t h ^e ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^a ^g r e ^e ^m ^e ⁿ ^t ^s ⁱ ^g ⁿ ^e ^d ^b ^e t w ^e ^e ⁿ ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^R ^e ^a ^l ^E ^s t a t e ^a ⁿ ^d ^G r u ^p ^o ^L ^a r , t h ^e ^s ^h ^a r e ^s ^a ^c ^q ^u i r e ^d ^b ^y t h ^e ^M ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^C ^o ^m ^p ^a ⁿ ^y i n r e l a t i o ⁿ t o t h ^e ^p ^e ^r ^f ^o r m ^a ⁿ ^c ^e ^f ^e ^e ^a r e ^s ^u b j ^e ^c ^t t o ^a t h r e ^e ^ï ^y ^e ^a ^r l o ^c ^k ï u ^p .

^A . ¹ ¹ ^I ⁿ ^d i c ^a t e ^w ^h ^e t h ^e ^r ^a ⁿ ^y ^m ^e ^a ^s ^u ^r ^e ^s ^h ^a ^v ^e ^b ^e ^e ⁿ ^a ^d ^o ^p t e ^d ^a ^t t h ^e ^g ^e ⁿ ^e ^r ^a ^l ^m ^e ^e t i n ^g ^w i t h t h ^e ^a ⁱ ^m ^o ^f ⁿ ^e ^u t r ^a l i s i n ^g ^a ^h ^y ^p ^o t h ^e t i c ^a ^l t a ^k ^e ^o ^v ^e ^r ^b i d ^w i t h i n t h ^e ^m ^e ^a ⁿ i n ^g ^o ^f ^S ^p ^a ⁿ i s ^h ^L ^a ^w ⁶ / 2 ⁰ ⁰ ⁷ .

^Y ^e ^s ^N ^o ^X

^I ^f ^s ^o , ^e ^x ^p l a i n t h ^e ^m ^e ^a ^s ^u ^r ^e ^s ^a ^p ^p ^r ^o ^v ^e ^d ^a ⁿ ^d t h ^e t e ^r ^m ^s ^u ⁿ ^d ^e ^r ^w ^h i c ^h t h ^e ^y ^c ^o ^u l d ^b ^e ^r ^e ⁿ ^d ^e ^r ^e ^d ^u ⁿ ^e ⁿ f o ^r ^c ^e ^a ^b l e :

^A . ¹ ² ^I ⁿ ^d i c ^a t e ^w ^h ^e t h ^e ^r t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^h ^a ^s i s ^s ^u ^e ^d ^a ⁿ ^y ^s ^e ^c ^u ^r i t i e ^s t h ^a ^t ^a ^r ^e ⁿ ^o ^t t r ^a ^d ^e ^d ^o ⁿ ^a ^r ^e ^g ^u l a t e ^d ^E ^u ^r ^o ^p ^e ^a ⁿ ⁿ i o ⁿ ^e ^x ^c ^h ^a ⁿ ^g ^e .

^Y ^e ^s ^N ^o ^X

^I ^f ^s ^o , i n ^d i c ^a t e t h ^e ^v ^a ^r i o ^u ^s ^c l a ^s ^s ^e ^s ^o ^f ^s ^h ^a ^r ^e ^s , l i s t i n ^g t h ^e ^r i g ^h t s ^a ⁿ ^d ^o ^b l i g ^a t i o ⁿ ^s ^c ^o ⁿ f e ^r ^r ^e ^d i n ^r ^e ^s ^p ^e ^c ^t ^o ^f ^e ^a ^c ^h ^c l a ^s ^s .

^G ^E ^N ^E ^R ^A ^L ^M ^E ^E ^T I N ^G

^B . ¹ ^I ⁿ ^d i c ^a t e t h ^e ^q ^u ^o ^r ^u ^m f o ^r ^v ^a l i d l y ^c ^a l l i n ^g t h ^e ^s ^h ^a ^r ^e ^h ^o l d ^e ^r ^s ' ^m ^e ^e t i n ^g t o ^o ^r ^d ^e ^r ^a ⁿ ^d ^d ^e t a i l ^a ⁿ ^y ^d i f f e ^r ^e ⁿ ^c ^e ^s ^w i t h ^r ^e ^s ^p ^e ^c ^t t o t h ^e ^m i n ⁱ ^m ^u ^m ^q ^u ^o ^r ^u ^m ^s ^s t i p ^u l a t e ^d i n t h ^e ^S ^p ^a ⁿ i s ^h ^C ^o ^r ^p ^o ^r ^a t e ^E ⁿ t e ^r ^p ^r i s ^e ^s ^A ^c t .

^Y ^e ^s ^N ^o ^X

	d i f f e r e n t t o a r t . 1 9 3 q u o r u m t h e p a n i s h o r p o r a t e o f S C n t e r p r i s e s f o r v o t i n g c t o n E A g e n e r a l r e s o l u t i o n s	d i f f e r e n t t o a r t . 1 9 4 q u o r u m t h e p a n i s h o r p o r a t e o f S C n t e r p r i s e s f o r v o t i n g c t o n E A s p e c i a l a t t e r s i n c l u d e d i n a r t . m 1 9 4
r e q u i r e d u o r u a t Q m f i r s t c a l l
r e q u i r e d u o r u a t Q m c a l l s e c o n d

^B . 2 ^I ⁿ ^d i c ^a t e ^a ⁿ ^d ^d ^e t a i l ^a ⁿ ^y ^d i f f e ^r ^e ⁿ ^c ^e ^s ^b ^e t w ^e ^e ⁿ t h ^e ^r ^u l e ^s ^g ^o ^v ^e ^r ⁿ i n ^g t h ^e ^a ^d ^o ^p t i o ⁿ ^o ^f ^c ^o ^r ^p ^o ^r ^a t e ^r ^e ^s ^o l u t i o ⁿ ^s ^a ⁿ ^d t h ^e ^r ^e ^g ⁱ ^m ^e ^s ^e ^t f o ^r t h i n t h ^e ^S ^p ^a ⁿ i s ^h ^C ^o ^r ^p ^o ^r ^a t e ^E ⁿ t e ^r ^p ^r i s ^e ^s ^A ^c t :

^Y ^e ^s ^N ^o ^X

^D ^e ^s ^c ^r ⁱ ^b ^e ^a ⁿ ^y ^d i f f e ^r ^e ⁿ ^c ^e ^s f r ^o ^m t h ^e ^p ^r ^o ^v i s i o ⁿ ^s ^s ^e ^t f o ^r t h i n t h ^e ^S ^p ^a ⁿ i s ^h ^C ^o ^r ^p ^o ^r ^a t e ^E ⁿ t e ^r ^p ^r i s ^e ^s ^A ^c t :

p a n i s h S t h e m 1 9 4 . 1 % s t i p u l a t e d f o r r e s o l u t i o n r a t i f i c a t i o n	o r p o r a t e n t e r p r i s e s f o r c t C E A a t t e r s p r o v i d e d f o r i n a r t i c l e t h e r e o f	a j o r i t y m
t h e d i f f e r e n c e s e s c r i e D b

^B . ³ ^I ⁿ ^d i c ^a t e t h ^e ^r ^u l e ^s ^g ^o ^v ^e ^r ⁿ i n ^g t h ^e ^a ^m ^e ⁿ ^d ^m ^e ⁿ ^t ^o ^f t h ^e ^c ^o ^m ^p ^a ⁿ ^y ' s ^b ^y l a ^w ^s . ^S ^p ^e ^c i f i c ^a l l y , i n ^d i c ^a t e t h ^e ^m ^a ^j ^o ^r i t i e ^s ^r ^e ^q ^u i r ^e ^d t o ^a ^m ^e ⁿ ^d t h ^e ^b ^y l a ^w ^s ^a ⁿ ^d ^a ⁿ ^y ^r ^u l e ^s i n ^p l a ^c ^e f o ^r ^p ^r ^o t e ^c t i n ^g ^s ^h ^a ^r ^e ^h ^o l d ^e ^r ^s ' ^r i g ^h t s i n t h ^e ^s ^e i n ^s t a ⁿ ^c ^e ^s .

^T ^h ^e ^g ^e ⁿ ^e r a ^l l e ^g ^a ^l r e ^g i m ^e ⁱ ^s ^a ^p ^p l i ^c ^a ^b l e . ^T ^h ^e r e ⁱ ^s ⁿ ^o ^s ^p ^e ^c ⁱ ^f ⁱ ^c r u l e t h ^a ^t ^c ^o ⁿ t e ^m ^p l a t e ^s t h ^e ^m ^o ^d ⁱ ^f ⁱ ^c ^a t i o ⁿ ^o ^f t h ^e ^A r t i ^c l e ^s ^o ^f ^A ^s ^s ^o ^c i a t i o ⁿ .

^B . ⁴ ^I ⁿ ^d i c ^a t e t h ^e ^a t t e ⁿ ^d ^a ⁿ ^c ^e f i g ^u ^r ^e ^s f o ^r t h ^e ^s ^h ^a ^r ^e ^h ^o l d ^e ^r ^m ^e ^e t i n ^g ^s ^h ^e l d ^d ^u ^r i n ^g t h ^e ^y ^e ^a ^r t o ^w ^h i c ^h t h i s ^r ^e ^p ^o ^r ^t ^r ^e l a t e ^s ^a ⁿ ^d ^d ^u ^r i n ^g t h ^e ^p ^r i o ^r ^y ^e ^a ^r :

	t t e n d a n c e d a t a A % % %
e n e r a l G	a t t e n d i n g i n	a t t e n d i n g	c o r r e s p o n d e n c e	v o t i n g	o t a l T
m d a t e e e t i n g	p e r s o n	y p r o x y b	o t e s c a s t V	t h e r O
1 9 / 0 4 / 2 0 1 8	5 . 8 9 3	6 8 . 5 1	e l e c t r o n i c a l l y 0 . 0 0 5	0	7 4 . 4 1 5
2 5 / 0 4 / 2 0 1 9	1 2 . 8 2 9	6 4 . 0 0	0 . 0 0 5	0 . 2 7 8	7 7 . 1 1 1

^B . ⁵ ^I ⁿ ^d i c ^a t e ^w ^h ^e t h ^e ^r t h ^e ^b ^y l a ^w ^s ⁱ ^m ^p ^o ^s ^e ^a ⁿ ^y ^m i n ⁱ ^m ^u ^m ^r ^e ^q ^u i r ^e ^m ^e ⁿ ^t ^o ⁿ t h ^e ⁿ ^u ^m ^b ^e ^r ^o ^f ^s ^h ^a ^r ^e ^s ^r ^e ^q ^u i r ^e ^d t o ^a t t e ⁿ ^d t h ^e ^g ^e ⁿ ^e ^r ^a ^l ^m ^e ^e t i n ^g .

^Y ^e ^s ^N ^o ^X

^B . ⁶ ^S ^e ^c t i o ⁿ ^r ^e ^p ^e ^a l e ^d
^B . ⁷ ^I ⁿ ^d i c ^a t e t h ^e ^a ^d ^d ^r ^e ^s ^s ^a ⁿ ^d ^m ^o ^d ^e ^o ^f ^a ^c ^c ^e ^s ^s i n ^g ^c ^o ^r ^p ^o ^r ^a t e ^g ^o ^v ^e ^r ⁿ ^a ⁿ ^c ^e ^c ^o ⁿ t e ⁿ ^t ^o ⁿ ^y ^o ^u ^r ^c ^o ^m ^p ^a ⁿ ^y ' ^s ^w ^e ^b ^s i t e ^a ^s ^w ^e l l ^a ^s ^o t h ^e ^r ^g ^e ⁿ ^e ^r ^a ^l ^m ^e ^e t i n ^g ^r ^e l a t e ^d ^d i s ^c l o ^s ^u ^r ^e ^s ^w ^h i c ^h ^m ^u ^s ^t ^b ^e ^p ^r ^o ^v i d ^e ^d t o ^s ^h ^a ^r ^e ^h ^o l d ^e ^r ^s ^o ⁿ t h ^e ^c ^o ^r ^p ^o ^r ^a t e ^w ^e ^b ^s i t e .

^h t t p ^s : / / w ^w ^w . l a r e ^s ^p ^a ⁿ ^a . ^c ^o ^m / ^g ^o ^b i e r n ^o ^ï ^c ^o r p ^o r a t i ^v ^o / ^j ^u ⁿ t a ^ï ^g ^e ⁿ ^e r a l ï o r d i n ^a r i a ï 2 ⁰ 1 9

^C ^O ^R ^P ^O ^R ^A ^T ^E ^G ^O ^V ^E ^R ^N ^A ^N ^C ^E ^S ^T ^R ^U ^C ^T ^U ^R ^E

^C . 1 ^o ^a ^r ^d ^o ^f ^D i r ^e ^c t o ^r ^s

^C . 1 . 1 . ^S t a t e t h ^e ^m ^a ^x ⁱ ^m ^u ^m ^a ⁿ ^d ^m i n ⁱ ^m ^u ^m ⁿ ^u ^m ^b ^e ^r ^o ^f ^d i r ^e ^c t o ^r ^s ^s t i p ^u l a t e ^d i n t h ^e ^c ^o ^m ^p ^a ⁿ ^y ' s ^b ^y l a ^w ^s :

d i r e c t o r s a x i u n u e r o f M m m m b	1 5
i n i d i r e c t o r s u n u e r o f M m m m b	5

^C . 1 . 2 . ^F i l l i n t h ^e f o l l o ^w i n ^g t a ^b l e ^w i t h t h ^e ^b ^o ^a ^r ^d ^m ^e ^m ^b ^e ^r ^s ' ^d ^e t a i l s :

N a e o r c o p a n y m m d i r e c t o r n a e o f m	i r e c t o r D c l a s s	o s i t i o n o n P t h e o a r d b	a t e o f f i r s t D m a p p o i n t e n t	a t e o f l a s t D m a p p o i n t e n t	l e c t i o n E p r o c e d u r e
a l l e J o s é L u i s d e l V	I n d e p e n d e n t	h a i r m C a n	0 5 / 0 2 / 2 0 1 4	2 9 / 0 5 / 2 0 1 7	o t a p p l i c a b l e N
l e c o t t A E m m	I n d e p e n d e n t	i r e c t o r D	0 5 / 0 2 / 2 0 1 4	2 9 / 0 5 / 2 0 1 7	o t a p p l i c a b l e N
R o g e r C o o k e	I n d e p e n d e n t	i r e c t o r D	0 5 / 0 2 / 2 0 1 4	2 9 / 0 5 / 2 0 1 7	o t a p p l i c a b l e N
i g u e l P e r e d a M	P r o p r i e t a r y	i r e c t o r D	0 5 / 0 2 / 2 0 1 4	2 9 / 0 5 / 2 0 1 7	o t a p p l i c a b l e N
L a u r e n t L u c c i o n i	P r o p r i e t a r y	i r e c t o r D	2 9 / 0 5 / 2 0 1 7	2 9 / 0 5 / 2 0 1 7	o t a p p l i c a b l e N
g u i l e r a I s a b e l A	I n d e p e n d e n t	i r e c t o r D	2 9 / 0 5 / 2 0 1 7	1 9 / 0 4 / 2 0 1 8	o o p t i o n C r a t i f i e d t h e b y o a r d B
L e t i c i a I g l e s i a s	I n d e p e n d e n t	i r e c t o r D	1 6 / 1 0 / 2 0 1 8	2 5 / 0 4 / 2 0 1 9	o o p t i o n C r a t i f i e d t h e b y o a r d B

^T ^o t a ^l ⁿ ^u ^m ^b ^e ^r ^o ^f ^d i r ^e ^c t o ^r ^s ⁷

^I ⁿ ^d i c ^a t e ^a ⁿ ^y ^m ^e ^m ^b ^e ^r ^s ^w ^h ^o ^s t e ^p ^p ^e ^d ^d ^o ^w ⁿ ^d ^u ^r i n ^g t h ^e ^r ^e ^p ^o ^r t i n ^g ^p ^e ^r i o ^d :

^T ^h ^e r e ^h ^a ^v ^e ^b ^e ^e ⁿ ⁿ ^o ^c ^e ^s ^s ^a t i o ⁿ ^s i n t h ^e ^p ^e r i o ^d .

^C . 1 . 3 . ^F i l l i n t h ^e f o l l o ^w i n ^g t a ^b l e ^s ^o ⁿ t h ^e ^v ^a ^r i o ^u ^s ^c l a ^s ^s ^e ^s ^o ^f ^d i r ^e ^c t o ^r ^s ^h i p ^s :

^E ^X ^E ^C ^T ^I ^V ^E ^D ^I ^R ^E ^C ^T ^O ^R ^S

d i r e c t o r N a e o r c o p a n y n a e o f m m m	o s i t i o n t h e a t c o p a n y P m

T o t a l n u m o f e x e c u t i v e d i r e c t o r s b e r
o f t o t a l b o a r d % m e m b e r s

^E ^X ^T ^E ^R ^N ^A ^L ^P ^R ^O ^P ^R ^I ^E ^T ^A ^R ^Y ^D ^I ^R ^E ^C ^T ^O ^R ^S

N a e o r c o p a n y n a e m m m d i r e c t o r o f	t h e s i g n i f i c a n t s h a r e h o l d e r N a e o r c o p a n y n a e o f m m m r e p r e s e n t e d p r o p o s i n g t h e a p p o i n t o r e n t m
i g u e l P e r e d a M E s p e s o	r u p o I n v e r s i o n e s I n m o b i l i a r i a s , S . A G L a r
. L a u r e n t L u c c i o n i D	I I L U X X I I , S . A . R . L . ( P I M L V S C O )

o t a l n u p r o p r i e t a r y d i r e c t o r s e r o f T m b %	2
o f t o t a l o a r d e e r s b m m b	2 8 . 5 7 %

^N ^a ^m ^e ^o ^r ^c ^o ^m ^p ^a ⁿ ^y ⁿ ^a ^m ^e ^o ^f ^d i r ^e ^c t o ^r ^B ^a ^c ^k ^g ^r ^o ^u ⁿ ^d ^M r . ^J ^o ^s ^é ^L ^u ⁱ ^s ^d ^e ^l ^V ^a l l e ^M r . ^J ^o ^s ^é ^L ^u ⁱ ^s ^d ^e ^l ^V ^a l l e ^D ^o ^b l a ^d ^o ⁱ ^s ^a ⁿ i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^e ^x t e r n ^a ^l ^d i r e ^c t o ^r ^o ^f ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^a ⁿ ^d ^C ^h ^a i r m ^a ⁿ ^o ^f t h ^e ^B ^o ^a r d . ^H ^e ^w ^a ^s ^a ^p ^p ^o i n t e ^d ^d i r e ^c t o ^r ^o ^f ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^b ^y ^G r u ^p ^o ^L ^a ^r I n ^v ^e ^r ^s i o ⁿ ^e ^s I n ^m ^o ^b i l i a r i a ^s , ^S . A . , t h ^e t h ^e ⁿ ^s ^o l e ^s ^h ^a r e ^h ^o l d ^e ^r ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y , t h ^e ^F ^e ^b r u ^a ^r ^y ⁵ , ² ⁰ 1 4 , ^a ⁿ ^d r e ^ï ^e l e ^c t e ^d ^a ^s ^a ⁿ i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^e ^x t e r n ^a ^l ^d i r e ^c t o r , ^a ^t t h ^e ^p r o ^p ^o ^s ^a ^l ^o ^f t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^a ⁿ ^d ^f ^o l l o ^w i n ^g ^a ^f ^a ^v ^o r a ^b l e r e ^p ^o r t ^f r o ^m t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s , ^b ^y t h ^e ^O r d i n ^a ^r ^y ^G ^e ⁿ ^e r a ^l ^S ^h ^a r e ^h ^o l d ^e ^r ^s ^M ^e ^e t i n ^g ^o ^f ^M ^a ^y ² ⁹ , ² ⁰ 1 7 . ^O ⁿ ^F ^e ^b r u ^a ^r ^y ⁶ , ² ⁰ 1 4 t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^a ^p ^p ^o i n t e ^d ^h i m ^a ^s ^C ^h ^a i r m ^a ⁿ ^a ⁿ ^d ^m ^e ^m ^b ^e ^r ^a ⁿ ^d ^C ^h ^a i r m ^a ⁿ ^o ^f t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e , ^a ^p ^o ^s i t i o ⁿ ^h ^e ^h ^e l d ^u ⁿ t i l ^M ^a ^y ² ⁹ , ² ⁰ 1 7 , ^d ^a t e ^o ⁿ ^w ^h ⁱ ^c ^h ^h ^e ^s ^u ^b ^m i t t e ^d t o t h ^e ^B ^o ^a r d ^h ⁱ ^s r e ^s ⁱ ^g ⁿ ^a t i o ⁿ ^a ^s ^C ^h ^a i r m ^a ⁿ ^o ^f t h ^e ^C ^o ^m ^m i t t e ^e , ^s i n ^c ^e t h ^e ⁿ ^V ^o ^c ^a ^l ^o ^f i t . ^M r . ^d ^e ^l ^V ^a l l e ^h ^a ^s ^e ^x t e ⁿ ^s ⁱ ^v ^e ^e ^x ^p ^e r i e ⁿ ^c ^e i n t h ^e ^b ^a ⁿ ^k i n ^g ^a ⁿ ^d ^e ⁿ ^e ^r ^g ^y ^s ^e ^c t o ^r ^s . ^F r o ^m 1 9 ⁸ ⁸ t o ² ⁰ ⁰ ² ^h ^e ^h ^e l d ^v ^a r i o ^u ^s ^p ^o ^s i t i o ⁿ ^s ^a ^t ^B ^a ⁿ ^c ^o ^S ^a ⁿ t a ⁿ ^d ^e r , ^o ⁿ ^e ^o ^f t h ^e l a ^r ^g ^e ^s ^t ^f i n ^a ⁿ ^c i a ^l i n ^s t i t u t i o ⁿ ^s i n ^S ^p ^a i n . I n 1 9 ⁹ ⁹ ^h ^e ^w ^a ^s ^a ^p ^p ^o i n t e ^d ^S ^e ⁿ i o ^r ^E ^x ^e ^c ^u t i ^v ^e ^V ⁱ ^c ^e ^P r e ^s i d ^e ⁿ ^t ^a ⁿ ^d ^C ^F ^O ^o ^f t h ^e ^b ^a ⁿ ^k ( 1 9 ⁹ ⁹ ï 2 ⁰ ⁰ ² ) . ^S ^u ^b ^s ^e ^q ^u ^e ⁿ t l ^y ^h ^e ^w ^a ^s ^C ^h i e ^f ^S t r a t e ^g ^y ^a ⁿ ^d ^D ^e ^v ^e l o ^p ^m ^e ⁿ ^t ^O f f ⁱ ^c ^e ^r ^o ^f ^I ^b ^e r d r o l a , ^o ⁿ ^e ^o ^f t h ^e ^m ^a i n ^S ^p ^a ⁿ ⁱ ^s ^h ^e ⁿ ^e ^r ^g ^y ^c ^o ^m ^p ^a ⁿ i e ^s ( ² ⁰ ⁰ ² ï 2 ⁰ ⁰ ⁸ ) , ^C ^h i e ^f ^E ^x ^e ^c ^u t i ^v ^e ^O f f ⁱ ^c ^e ^r ^o ^f ^S ^c ^o t t i ^s ^h ^P ^o ^w ^e ^r ( ² ⁰ ⁰ ⁷ ï 2 ⁰ ⁰ ⁸ ) , ^C ^h i e ^f ^S t r a t e ^g ^y ^a ⁿ ^d ^R ^e ^s ^e ^a ^r ^c ^h ^O f f ⁱ ^c ^e ^r ^o ^f ^I ^b ^e r d r o l a ( ² ⁰ ⁰ ⁸ ^ï ² ⁰ 1 0 ) ^a ⁿ ^d ^A ^d ^v ⁱ ^s ^o ^r t o t h ^e ^P r e ^s i d ^e ⁿ ^t ^f r o ^m t h ^e ^w i n ^d t u ^r ^b i n ^e ^m ^a ⁿ ^u ^f ^a ^c t u r e ^r ^G ^a ^m ^e ^s ^a ( ² ⁰ ¹ ¹ ï 2 ⁰ 1 2 ) . ^C ^u r r e ⁿ t l ^y , ^M r . ^d ^e ^l ^V ^a l l e ⁱ ^s ^W ⁱ ^z i n ^k ^B ^a ⁿ ^k ^A ^d ^m i n ⁱ ^s t r a t o ^r ^B ^o ^a r d ^C ^h ^a i r m ^a ⁿ ; ^D i r e ^c t o ^r ^o ^f ^A ^b ^e ⁿ ^g ^o ^a , ^S . A . , ^w ^h ⁱ ^c ^h ^p r o ^v i d ^e ^s i n ⁿ ^o ^v ^a t i ^v ^e t e ^c ^h ⁿ ^o l o ^g ⁱ ^c ^a ^l ^s ^o l u t i o ⁿ ^s ^f ^o ^r ^s ^u ^s t a i n ^a ^b l e ^d ^e ^v ^e l o ^p ^m ^e ⁿ ^t ; ^D i r e ^c t o ^r ^o ^f t h ^e i n ^s ^u r a ⁿ ^c ^e ^g r o ^u ^p ^O ^c ^a ^s ^o ^a ⁿ ^d ^C ^o ^u ⁿ ^s ^e l o ^r ^o ^f t h ^e I n ^s t i t u t o ^d ^e ^C ^o ⁿ ^s ^e ^j ^e r o ^s ^ï ^A ^d ^m i n ⁱ ^s t r a ^d ^o r e ^s . ^M r . ^J ^o ^s ^é ^L ^u ⁱ ^s ⁱ ^s ^a ^M i n i n ^g ^E ⁿ ^g i n ^e ^e ^r ^f r o ^m t h ^e ^P ^o ^l ^y t e ^c ^h ⁿ ⁱ ^c ^U ⁿ ⁱ ^v ^e ^r ^s i t ^y ( ^M ^a ^d r i d , ^S ^p ^a i n ) , ⁿ ^u ^m ^b ^e ^r ^o ⁿ ^e ^o ^f ^h ⁱ ^s ^p r o ^m ^o t i o ⁿ , ^a ⁿ ^d ^M ^a ^s t e ^r i n ^S ^c i e ⁿ ^c ^e ^a ⁿ ^d ^N ^u ^c l e ^a ^r ^E ⁿ ^g i n ^e ^e ^r ^f r o ^m t h ^e ^M ^a ^s ^s ^a ^c ^h ^u ^s ^e t t ^s I n ^s t i t u t e ^o ^f ^T ^e ^c ^h ⁿ ^o l o ^g ^y ( ^C ^a ^m ^b r i d ^g ^e , ^U ^S ^A ) . ^F ^u r t h ^e r m ^o r e , ^M r . ^d ^e ^l ^V ^a l l e ^h ^o l d ^s ^a ^M ^B ^A ^w i t h ^H ⁱ ^g ^h ^D ⁱ ^s t i n ^c t i o ⁿ ^f r o ^m ^H ^a ^r ^v ^a r d ^B ^u ^s i n ^e ^s ^s ^S ^c ^h ^o ^o ^l ( ^B ^o ^s t o ⁿ , ^U ^S ^A ) . ^M ^r ^s . ^L ^e t i ^c i a ^I ^g l e ^s i a ^s ^L ^e t i ^c i a ^I ^g l e ^s i a ^s ^H ^e r r a ⁱ ^z ⁱ ^s ^a ⁿ i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^e ^x t e r n ^a ^l ^d i r e ^c t o ^r ^o ^f ^L ^a ^r ^E ^s ^p ^a ^ñ ^a . ^S ^h ^e ^w ^a ^s ^a ^p ^p ^o i n t e ^d ^d i r e ^c t o ^r ^o ^f ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^b ^y t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y , ^b ^y t h ^e ^c ^o ^ï ^o ^p t a t i o ⁿ ^s ^y ^s t e ^m , ^a ^t i t ^s ^m ^e ^e t i n ^g ^o ^f ^O ^c t o ^b ^e ^r 1 6 , ² ⁰ 1 8 , ^d ^a t e ^o ⁿ ^w ^h ⁱ ^c ^h t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^a ^l ^s ^o ^a ^p ^p ^o i n t e ^d ^h ^e ^r ^a ^s ^a ^m ^e ^m ^b ^e ^r ^o ^f t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e ^a ⁿ ^d

^E ^X ^T ^E ^R ^N ^A ^L ^I ^N ^D ^E ^P ^E ^N ^D ^E ^N ^T ^D ^I ^R ^E ^C ^T ^O ^R ^S

	P r e s i d e n t o f t h e e , b e i n g r a t i f i e d a p p o i n t m t h e e n e r a l s a m h i s e n t b y G e e t i n g S h a r e h o l d e r s h e l d p r i l 2 5 , 2 0 1 9 . M o f o n A
	L e t i c i a I g l e s i a s e x t e n s i v e e x p e r i e n c e i n r e g u l a t i o n M r s . h a s a n d s u p e r v i s i o n s e c u r i t i e s a r k e t s f i n a n c i a l o f m a n d s e r v i c e s . H e b e g a n c a r e e r i n 1 9 8 7 i n t h e u d i t i v i s i o n r t h u r h i s A D o f A A n d e r s e n . e t w 1 9 8 9 d e v e l o p e d p r o f e s s i o n a l c a r e e r i n t h e B e e n a n d 2 0 0 7 , h e h i s a t i o n a l S e c u r i t i e s a r k e t i s s i o n F r o m t o ( C ) N M C o m m N M V 2 0 0 7 1 3 t h e o r n I n s t i t u t e S p a i n 2 0 h e w a s C E O a t S w A c c o u n t C e n s u s o f I C b e t w 1 3 1 7 i n d e p e n d e n t ( J C E ) A l s o , e e n 2 0 a n d 2 0 s h e w a s a n d i r e c t o r t h e o a r d i r e c t o r s a r e o s t r u m o f B o f D o f B a n c o M N ( B M N ) , e l l a s t h e E x e c u t i v e i t t e e , P r e s i d e n t t h e a s w a m e m b e r o f C o m m o f l o b a l i s s i o n t h e u d i t i t t e e . G R i s k C o m m a n d a m e m b e r o f A C o m m u r i n g 1 7 1 8 i n d e p e n d e n t d i r e c t o r D 2 0 a n d 2 0 h e s e r v e d a s a n a t S e r v i c i o s F i n a n c i e r o s , E F C e l l a s h a i r m o f t h e J o i n t A b a n c a , a s w C a n u d i t a n d i t t e e . S i n c e 1 0 8 A R i s k C o m m M a y 2 h e h a s b e e n a m e m b e r t h e o a r d i r e c t o r s o r p o r a c i ó n a n c a r i a , o f B o f D o f A b a n c a C B h a i r m o f t h e u d i t a n d p l i a n c e i t t e e C a n A C o m C o m m a n d a m e m b e r o f t h e p r e h e n s i v e i t t e e . S i n c e p r i l 1 9 , C o m R i s k C o m m A 2 0 s h e i s I n d e p e n d e n t i r e c t o r h a i r m t h e u d i t i t t e e D a n d C a n o f A C o m m o f E , S . A A E N A S M
	r s . L e t i c i a d e g r e e i n u s i n e s s A i n i s t r a t i o n M h a s a E c o n o m i c s a n d B d m f r o m t h e n i v e r s i d a d P o n t i f i c i a i l l a s I C U d e C o m ( A D E ) H e i s a t h e f f i c i a l e g i s t r y u d i t o r s S p a i n ( R ) m e m b e r o f O R o f A o f O A C , P a t r o n I S S p e c i a l p l o y m e n t e r e l l o f F u n d a c i ó n P R O D E m e n t C a s w b e r o f t h e o a r d i r e c t o r s o f t h e I C u s i n e s s l u b . a s a m e m B o f D A D E B C
r . A l e c o t t M E m m	r . A l e c o t t i s i n d e p e n d e n t e x t e r n a l d i r e c t o r o f L a r M E m m a n E s p a ñ a . a p p o i n t e d d i r e c t o r r u p o I n v e r s i o n e s H e w a s o f L a r E s p a ñ a b y G L a r I n m o b i l i a r i a s t h e t h e n s o l e s h a r e h o l d e r t h e S A , o f C o m p a n y , o n F e b r u a r y 1 4 r e ï e l e c t e d i n d e p e n d e n t e x t e r n a l d i r e c t o r , a t t h e 5 , 2 0 a n d p r o p o s a l t h e p p o i n t m u n e r a t i o n i t t e e o f A e n t s a n d R e m C o m m a n d a f t e r f a v o r a b l e r e p o r t f r o m t h e o a r d i r e c t o r s , b y t h e o r d i n a r y a B o f D e n e r a l M e e t i n g s h a r e h o l d e r s G o f o f 1 7 . o a r d i r e c t o r s t h e a p p o i n t e d M a y 2 9 , 2 0 T h e B o f D o f C o m p a n y h i m b e r o f t h e p p o i n t m u n e r a t i o n i t t e e a s a m e m A e n t s a n d R e m C o m m F e b r u a r y 1 4 . o n 6 , 2 0
	r . A l e c o t t h a s b r o a d p r o f e s s i o n a l c a r e e r i n r e a l e s t a t e l i s t e d M E m m a u n l i s t e d i n E u r o p e r e s i d e s i n P a r i s . o r k e d a n d a n d H e w a s C E O F o n c i è r e b e t w 1 9 9 7 ( ) ( S F L ) C E O o f S o c i é t é L y o n n a i s e e e n a n d s u b s e q u e n t l y e x e c u t i v e t o u n t i l 2 0 1 2 . 2 0 0 7 , a n d a s a n a d v i s o r S F L
	c u r r e n t l y i r e c t o r o f E u r o p r o p e r t y o n s u l t i n g , a n d s i n c e H e i s D C 2 0 1 1 i r e c t o r S . A E u r o p r o p e r t y ( o n h e i s D o f C e G e R E A L b e h a l f o f o n s u l t i n g t h e i t t e e C ) H e i s a l s o a m e m b e r o f a d v i s o r y c o m m o f e i n b e r g e a l E s t a t e P a r t n e r s I / I I ) W R ( W R E P . H e h a s b e e n a m e m b e r o f t h e o y a l I n s t i t u t i o n h a r t e r e d I C s i n c e 1 9 7 1 . ( M ) R o f C S u r v e y o r s R S f r o m T r i n i t y o l l e g e b r i d g e , U n i t e d i n g d o m ( C ) H e h a s a n M A C a m K

r . R M o g e r M . C o o k e	r . e l l i n d e p e n d e n t e x t e r n a l M R o g e r M a x w C o o k e M B E i s a n d i r e c t o r o f L a r E s p a ñ a . H a p p o i n t e d d i r e c t o r o f L a r E s p a ñ a e w a s b y r u p o I n v e r s i o n e s I n m o b i l i a r i a s , t h e t h e n s o l e s h a r e h o l d e r G L a r S A t h e F e b r u a r y 1 4 r e ï e l e c t e d i n d e p e n d e n t o f C o m p a n y , o n 5 , 2 0 a n d e x t e r n a l d i r e c t o r , t h e p r o p o s a l t h e p p o i n t m a t o f A e n t s a n d u n e r a t i o n i t t e e a f t e r f a v o r a b l e r e p o r t f r o m t h e R e m C o m m a n d a o a r d i r e c t o r s , t h e o r d i n a r y e n e r a l e e t i n g B o f D b y G M o f s h a r e h o l d e r s 1 7 . o a r d i r e c t o r s t h e o n M a y 2 9 , 2 0 T h e B o f D o f a p p o i n t e d h i m h a i r m t h e C o m p a n y a s m e m b e r a n d C a n o f p p o i n t m u n e r a t i o n i t t e e F e b r u a r y 1 4 . A e n t s a n d R e m C o m m o n 6 , 2 0
	r . R p r o f e s s i o n a l w i t h o r e t h a n M o g e r M . C o o k e i s a m 3 0 y e a r s o f e x p e r i e n c e i n r e a l e s t a t e . I n 1 9 8 0 j o i n e d t h e o f f i c e h e L o n d o n o f a k e f i e l d , w h e r e p a r t i c i p a t e d i n t h e d r a f t i n g o f t h e C u s h m a n & W h e v a l u a t i o n s t a n d a r d s . F r o m 1 9 9 5 u n t i l t h e 1 3 ( R e d B o o k ) e n d o f 2 0 h e l d t h e p o s i t i o n a k e f i e l d S p a i n , h e o f C E O o f C u s h m a n & W p l a c i n g t h e i n l e a d i n g p o s i t i o n i n t h e s e c t o r . c o m p a n y a
	I n 1 7 , r . a r d e d E l i z a b e t h I I i t h 2 0 M R o g e r w a s a w b y Q u e e n w a n t o r i t i s h p a n i e s i n S p a i n t o n g l o ï M B E f o r h i s s e r v i c e s B c o m a n d A t r a d e i n v e s t m e n t . S p a n i s h a n d
	h o l d s d e g r e e i n E s t a t e S u r v e y i n g f r o m T r e n t D R o g e r a U r b a n P o l y t e c h n i c n i v e r s i t y o t t i n g h a m n i t e d i n g d o m ( ) U N , U K a n d i s c u r r e n t l y b e r o f t h e o y a l I n s t i t u t i o n h a r t e r e d a m e m R o f C S u r v e y o r s I C n t i l 1 6 , c h a i r e d t h e r i t i s h ( F R S ) U M a y 2 0 h e B C h a m b e r o f i n S p a i n . s i n c e S e p t e m 1 7 , r . C o m m e r c e A l s o , b e r 2 0 M R o g e r e l l i s C h a i r m o f t h e E d i t o r i a l B o a r d o f I b e r i a n P r o p e r t y M a x w a n a n d s i n c e h a i r m I C i n S p a i n . J a n u a r y 2 0 2 0 i s C a n o f R S
g u i l e r a M r s . I s a b e l A	g u i l e r a a v a r r o i n d e p e n d e n t e x t e r n a l d i r e c t o r o f M r s . I s a b e l A N i s a n a s a p p o i n t e d d i r e c t o r o f L a r E s p a ñ a t h e o a r d L a r E s p a ñ a . S h e w b y B i r e c t o r s t h e t h e c o ï o p t a t i o n s y s t e m i t s o f D o f C o m p a n y , b y , a t e e t i n g 1 7 , d a t e t h e o a r d i r e c t o r s m o n M a y 2 9 , 2 0 o n w h i c h B o f D a p p o i n t e d b e r o f t h e u d i t a n d o n t r o l C i t t e e a l s o h e r a s a m e m A C o m m a p p o i n t m b e i n g r a t i f i e d t h e e n e r a l e e t i n g , h i s e n t b y G M o f S h a r e h o l d e r s h e l d p r i l 1 9 , 2 0 1 8 . o n A
	g u i l e r a d e v e l o p e d p r o f e s s i o n a l c a r e e r i n M r s . I s a b e l A h a s h e r d i f f e r e n t p a n i e s i n v a r i o u s s e c t o r s P r e s i d e n t c o m a n d h a s b e e n o f S p a i n P o r t u g a l e n e r a l E l e c t r i c , G e n e r a l i r e c t o r i n S p a i n a n d o f G D P o r t u g a l o f G o o g l e , C h i e f O p e r a t i n g f f i c e r o f t h e o t e l e s a n d O N H H r o u p , C h i e f E x e c u t i v e f f i c e r S p a i n , I t a l y P o r t u g a l f r o m G O f o r a n d e l l C p u t e r o r p o r a t i o n . H p a r t o f t h e o a r d D o m C e h a s a l s o b e e n B o f i r e c t o r s v a r i o u s p a n i e s I n d r a S i s t e m a r e D o f c o m s u c h a s a s , M o s t r u m S p a i n , L a u r e a t e I n c r o u p . D N B a n k , A e g o n o r E g a s a G o ñ a g u i l e r a c u r r e n t l y d i r e c t o r r u p o I s a b e l A i s a o f G C e m e x , B a n c a F a r m a f a c t o r i n g , i g h t e c h O r y z o n G e n o m i c s , H P S ( H P a y m e n t S y s t e m a k i n g S c i e n c e . s ) a n d M
	d e g r e e i n r c h i t e c t u r e , u i l d i n g M r s . I s a b e l h a s a A B a n d U r b a n P l a n n i n g f r o m t h e r c h i t e c t u r e i n H i g h e r T e c h n i c a l S c h o o l o f A S e v i l l e , p l e t e d t h e a s t e r ' s e g r e e i n e r c i a l h a s c o m M D C o m m a r k e t i n g a t I E , t h e I E S E e n e r a l M M a n a g e m e n t a n d M G a n a g e m e n t P r o g r a m t h e P r o g r a m S e n i o r u s i n e s s a n d f o r B M a n a g e m e n t a n d e a d i n g I n s t i t u t i o n s t h e T e l m I n s t i t u t e . S h e c u r r e n t l y L o f S a n o i s a n s s o c i a t e P r o f e s s o r S t r a t e g y I n n o v a t i o n A a t E S A D E a n d a a n d o n s u l t a n t . C

o t a l n u o f i n d e p e n d e n t d i r e c t o r s e r T m b %	5
t o t a l o f o a r d e e r s b m m b	1 . 4 3 % 7

^L i s ^t ^a ⁿ ^y i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^d i r ^e ^c t o ^r ^s ^w ^h ^o ^r ^e ^c ^e i v ^e f r ^o ^m t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^o ^r ^a ⁿ ^y ^o ^f i t s ^g ^r ^o ^u ^p ^c ^o ^m ^p ^a ⁿ i e ^s ^a ⁿ ^y ^a ^m ^o ^u ⁿ ^t ^o ^r ^b ^e ⁿ ^e f i t ^o t h ^e ^r t h ^a ⁿ t h ^e i r ^r ^e ^m ^u ⁿ ^e ^r ^a t i o ⁿ ^a ^s ^d i r ^e ^c t o ^r ^s , ^a l o ⁿ ^g ^w i t h t h ^o ^s ^e t h ^a ^t ^c ^u ^r ^r ^e ⁿ t l y ^h ^a ^v ^e ^o ^r ^h ^a ^v ^e ^h ^a ^d ^d ^u ^r i n ^g t h ^e ^r ^e ^p ^o ^r t i n ^g ^p ^e ^r i o ^d ^a ^b ^u ^s i n ^e ^s ^s ^r ^e l a t i o ⁿ ^s ^h i p ^w i t h t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^o ^r ^a ⁿ ^y ^c ^o ^m ^p ^a ⁿ ^y ^w i t h i n i t s ^g ^r ^o ^u ^p , ^e i t h ^e ^r ^d i r ^e ^c t l y ^o ^r i n t h ^e i r ^c ^a ^p ^a ^c i t y ^a ^s ^s i g ⁿ i f i c ^a ⁿ ^t ^s ^h ^a ^r ^e ^h ^o l d ^e ^r , ^d i r ^e ^c t o ^r ^o ^r ^s ^e ⁿ i o ^r ^e ^x ^e ^c ^u t i v ^e ^o ^f ^a ⁿ ^e ⁿ t i t y ^p ^a ^r t y t o ^s ^u ^c ^h ^a ⁿ ^a ^r ^r ^a ⁿ ^g ^e ^m ^e ⁿ t .

^I ^f ^s ^o , i n ^c l u ^d ^e ^a ^s ^u ^b ^s t a ⁿ t i a t e ^d ^s t a t e ^m ^e ⁿ ^t f r ^o ^m t h ^e ^b ^o ^a ^r ^d ^a ^r ^g ^u i n ^g t h ^e ^r ^e ^a ^s ^o ⁿ ^s f o ^r ^w ^h i c ^h i t ^b ^e l i e ^v ^e ^s t h ^e ^d i r ^e ^c t o ^r i n ^q ^u ^e ^s t i o ⁿ ^c ^a ⁿ ^c ^a ^r ^r ^y ^o ⁿ i t s ^d ^u t i e ^s ^a ^s ^a ⁿ i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^d i r ^e ^c ^t ^o ^r .

N a e o r c o p a n y n a e o f m m m d i r e c t o r	e s c r i p t i o n t h e r e l a t i o n s h i p o f D	s t a n t i a t e d s t a t e u e n t S b m

^O ^T ^H ^E ^R ^E ^X ^T ^E ^R ^N ^A ^L ^D ^I ^R ^E ^C ^T ^O ^R ^S

^I ^d ^e ⁿ t i f y t h ^e ^o t h ^e ^r ^e ^x t e ^r ⁿ ^a ^l ^d i r ^e ^c t o ^r ^s ^a ⁿ ^d l i s ^t t h ^e ^r ^e ^a ^s ^o ⁿ ^s ^w ^h ^y t h ^e ^y ^c ^a ⁿ ⁿ ^o ^t ^b ^e ^c ^o ⁿ ^s i d ^e ^r ^e ^d ^p ^r ^o ^p ^r i e t a ^r ^y ^o ^r i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^a ⁿ ^d t h ^e l i n ^k ^s t h ^e ^y ^m ^a i n t a i n ^w i t h ^e i t h ^e ^r t h ^e ^c ^o ^m ^p ^a ⁿ ^y , i t s ^s ^e ⁿ i o ^r ^o f f i c ^e ^r ^s ^o ^r i t s ^s ^h ^a ^r ^e ^h ^o l d ^e ^r ^s :

N a e o r c o p a n y n a e o f m m m d i r e c t o r	e a s o n s R	e l a t e d p a n y , o f f i c e r c o R m s h a r e h o l d e r o r

o t a l n u o f o t h e r e x t e r n a l d i r e c t o r s e r T m b %
t o t a l o f e e r s m m b

^L i s ^t ^a ⁿ ^y ^c ^h ^a ⁿ ^g ^e ^s i n ^d i r ^e ^c t o ^r ^c l a ^s ^s i f i c ^a t i o ⁿ ^d ^u ^r i n ^g t h ^e ^r ^e ^p ^o ^r t i n ^g ^p ^e ^r i o ^d :

N a e o r c o p a n y n a e o f m m m d i r e c t o r	a t e o f c h a n g e D	r e v i o u s c l a s s o f P d i r e c t o r s h i p	u r r e n t c l a s s C d i r e c t o r s h i p o f

^C . 1 . 4 ^F i l l i n t h ^e f o l l o ^w i n ^g t a ^b l e ^d ^e t a i l i n ^g t h ^e ⁿ ^u ^m ^b ^e ^r ^o ^f f e ^m ^a l e ^d i r ^e ^c t o ^r ^s ^s ^e ^r ^v i n ^g ^o ⁿ t h ^e ^b ^o ^a ^r ^d ^d ^u ^r i n ^g t h ^e l a ^s ^t f o ^u ^r ^y ^e ^a ^r ^s ^a ⁿ ^d t h ^e i r ^c l a ^s ^s i f i c ^a t i o ⁿ :

	f e a l e d i r e c t o r s N u e r o f m b m		d i r e c t o r s h i p c a t e g o r y o f e a c h
	2 0 1 9	2 0 1 8	2 0 1 7	2 0 1 6	2 0 1 9	2 0 1 8	2 0 1 7	2 0 1 6
x e c u t i v e E	0	0	0	0	0	0	0	0
r o p r i e t a r y P	0	0	0	0	0	0	0	0
n d e p e n d e n t I	2	2	1	0	4 0 %	4 0 %	2 0 %	0
t h e r e x t e r n a l O	0	0	0	0	0	0	0	0
o t a l : T	2	2	1	0	2 9 %	2 9 %	1 4 %	0

^C . 1 . 5 ^O ^u t l i n ^e t h ^e ^m ^e ^a ^s ^u ^r ^e ^s t a ^k ^e ⁿ , i f ^a ⁿ ^y , t o ^e ⁿ ^d ^e ^a ^v ^o ^u ^r t o i n ^c l u ^d ^e ^e ⁿ ^o ^u ^g ^h ^w ^o ^m ^e ⁿ ^o ⁿ t h ^e ^b ^o ^a ^r ^d t o ^a ^c ^h i e ^v ^e ^b ^a l a ⁿ ^c ^e ^d ^g ^e ⁿ ^d ^e ^r ^r ^e ^p ^r ^e ^s ^e ⁿ t a t i o ⁿ .

^A r t i ^c l e ³ ⁴ . 4 ^o ^f t h ^e ^A r t i ^c l e ^s ^o ^f ^A ^s ^s ^o ^c i a t i o ⁿ ^s t a t e t h ^a ^t t h ^e ^s ^h ^a r e ^h ^o l d ^e ^r ^s i n ^g ^e ⁿ ^e r a ^l ^m ^e ^e t i n ^g ^a ⁿ ^d t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^s ^h ^o ^u l d ^a t t e ^m ^p ^t t o ^f ^o ^s t e ^r ^b ^a l a ⁿ ^c ^e ^d ^g ^e ⁿ ^d ^e ^r r e ^p r e ^s ^e ⁿ t a t i o ⁿ ^o ⁿ t h ^e ^B ^o ^a r d .

^O ⁿ ^D ^e ^c ^e ^m ^b ^e ^r ² ⁷ , ² ⁰ 1 7 , ^a r t i ^c l e ⁸ . 6 ^o ^f t h ^e ^R ^e ^g ^u l a t i o ⁿ ^s ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^w ^e r e ^a ^m ^e ⁿ ^d ^e ^d t o ^s ^p ^e ^c ⁱ f y t h ^a ^t t h ^e ^B ^o ^a r d ^w i l l ^e ⁿ ^s ^u r e t h ^a ^t t h ^e ^s ^e l e ^c t i o ⁿ ^o ^f i t ^s ^m ^e ^m ^b ^e ^r ^s ^f ^a ^v ^o ^r ^s ^b ^o ^a r d r o ^o ^m ^d ⁱ ^v ^e ^r ^s i t ^y i n t e r m ^s ^o ^f ^e ^x ^p ^e r i e ⁿ ^c ^e , ^k ⁿ ^o ^w l e ^d ^g ^e , t r a i n i n ^g , ^a ^g ^e , ^d ⁱ ^s ^a ^b i l i t ^y ^a ⁿ ^d ^g ^e ⁿ ^d ^e ^r ^a ⁿ ^d t h ^a ^t ⁿ ^o i m ^p l i ^c i t ^b i a ^s l e ^a ^d ^s t o ^a ⁿ ^y ^f ^o r m ^o ^f ^d ⁱ ^s ^c r i m i n ^a t i o ⁿ . I n ^p ^a r t i ^c ^u l a r , t h ^e ^B ^o ^a r d ⁱ ^s t o ^f ^a ^c i l i t a t e t h ^e ^s ^e l e ^c t i o ⁿ ^o ^f ^f ^e ^m ^a l e ^b ^o ^a r d ^m ^e ^m ^b ^e ^r ^s ^b ^y ^e ^s t a ^b l i ^s ^h i n ^g t h ^e r e l e ^v ^a ⁿ ^t ^d ⁱ ^v ^e ^r ^s i t ^y ^p ^o l i ^c ^y ^a ⁿ ^d ^g ^u i d ^e l i n ^e ^s .

I n ^a ^d ^d i t i o ⁿ , ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^d r e ^w ^u ^p ^a ^d i r e ^c t o ^r ^s ^e l e ^c t i o ⁿ ^a ⁿ ^d ^a ^p ^p ^o i n t m ^e ⁿ ^t ^P ^o l i ^c ^y , ^a ^p ^p r o ^v ^e ^d ^b ^y t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^o ⁿ ^J ^a ⁿ ^u ^a ^r ^y ² ⁰ , ² ⁰ 1 6 , ^w ^h ⁱ ^c ^h ^f ^o ^s t e ^r ^s ^b ^o ^a r d r o ^o ^m ^d ⁱ ^v ^e ^r ^s i t ^y i n t e r m ^s ^o ^f ^k ⁿ ^o ^w l e ^d ^g ^e , ^s ^k i l l ^s , ^e ^x ^p ^e r i e ⁿ ^c ^e , ^a ⁿ ^d ^g ^e ⁿ ^d ^e r . ^T ^h ^e ^p ^o l i ^c ^y , r e ^v i e ^w ^e ^d ^a ⁿ ^d ^a ^p ^p r o ^v ^e ^d ^a ^g ^a i n ^b ^y t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^o ⁿ ^D ^e ^c ^e ^m ^b ^e ^r ² ⁰ , ² ⁰ 1 8 , ^e ^m ^p ^h ^a ^s ⁱ ^s ^e ^s t h ^e ^p r o ^v ⁱ ^s i o ⁿ ^s t h ^a ^t ^w ^o ^u l d ^f ^o ^s t e ^r ^d ⁱ ^v ^e ^r ^s i t ^y i n t h ^e ^B ^o ^a r d ^a ⁿ ^d ^p ^u ^r ^s ^u ^e ^s t h ^e t a ^r ^g ^e ^t ^o ^f ^h ^a ^v i n ^g ^a ^t l e ^a ^s ^t ³ ⁰ % ^o ^f ^a l l ^B ^o ^a r d ^m ^e ^m ^b ^e ^r ^s ^b ^e ^f ^e ^m ^a l e ^b ^y ² ⁰ ² ⁰ .

^C . 1 . 6 ^I ⁿ ^d i c ^a t e ^w ^h ^e t h ^e ^r t h ^e ⁿ ^o ^m i n ^a t i o ⁿ ^c ^o ^m ^m i t t e ^e ^h ^a ^s t a ^k ^e ⁿ ^a ⁿ ^y ^m ^e ^a ^s ^u ^r ^e ^s t o ^e ⁿ ^s ^u ^r ^e t h ^e ^p ^r ^o ^c ^e ^s ^s ^o ^f f i l l i n ^g ^b ^o ^a ^r ^d ^v ^a ^c ^a ⁿ ^c i e ^s i s ⁿ ^o ^t ⁱ ^m ^p l i c i t l y ^b i a ^s ^e ^d ^a ^g ^a i n ^s ^t f e ^m ^a l e ^c ^a ⁿ ^d i d ^a t e ^s , ^a ⁿ ^d ^w ^h ^e t h ^e ^r t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^m ^a ^k ^e ^s ^a ^c ^o ⁿ ^s ^c i o ^u ^s ^e f f o ^r ^t t o ^s ^e ^e ^k ^o ^u ^t f e ^m ^a l e ^c ^a ⁿ ^d i d ^a t e ^s t h ^a ^t ^m ^a t c ^h t h ^e ^r ^e ^q ^u i r ^e ^d ^p ^r ^o f i l e :

^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^h ^a ^s ^a ^d i r e ^c t o ^r ^s ^e l e ^c t i o ⁿ ^a ⁿ ^d ^a ^p ^p ^o i n t m ^e ⁿ ^t ^P ^o l i ^c ^y ( ^w ^h ⁱ ^c ^h ^w ^a ^s ^a ^p ^p r o ^v ^e ^d ^b ^y t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^a ⁿ ^d t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^o ⁿ ² ⁰ ^J ^a ⁿ ^u ^a ^r ^y ² ⁰ 1 6 ) . ^T ^h ^a ^t ^p ^o l i ^c ^y ⁱ ^s ^d ^e ^s ⁱ ^g ⁿ ^e ^d t o ^f ^o ^s t e ^r ^b ^o ^a r d r o ^o ^m ^d ⁱ ^v ^e ^r ^s i t ^y i n t e r m ^s ^o ^f ^k ⁿ ^o ^w l e ^d ^g ^e ^a ⁿ ^d ^s ^k i l l ^s , ^e ^x ^p ^e r i e ⁿ ^c ^e ^a ⁿ ^d ^g ^e ⁿ ^d ^e r . ^T ^h ⁱ ^s ^p ^o l i ^c ^y , r e ^v i e ^w ^e ^d ^a ⁿ ^d ^a ^p ^p r o ^v ^e ^d ^a ^g ^a i n ^b ^y t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^o ⁿ ^D ^e ^c ^e ^m ^b ^e ^r ² ⁰ , ² ⁰ 1 8 , ^e ^m ^p ^h ^a ^s ⁱ ^s ^e ^s t h ^e ^p r o ^v ⁱ ^s i o ⁿ ^s t h ^a ^t ^w ^o ^u l d ^f ^o ^s t e ^r ^d ⁱ ^v ^e ^r ^s i t ^y i n t h ^e ^B ^o ^a r d ^a ⁿ ^d ^p ^u ^r ^s ^u ^e ^s t h ^e t a ^r ^g ^e ^t ^o ^f ^h ^a ^v i n ^g ^a ^t l e ^a ^s ^t ³ ⁰ % ^o ^f ^a l l ^b ^o ^a r d ^m ^e ^m ^b ^e ^r ^s ^b ^e ^f ^e ^m ^a l e ^b ^y ² ⁰ ² ⁰ .

^F ^o l l o ^w i n ^g t h ^e ^a ^p ^p ^o i n t m ^e ⁿ ^t ^o ^f ^a ⁿ ^e ^w ^f ^e ^m ^a l e ^d i r e ^c t o ^r i n ² ⁰ 1 8 , t h ^e ^C ^o ^m ^p ^a ⁿ ^y ⁱ ^s ^v ^e ^r ^y ^c l o ^s ^e t o ^d ^e l i ^v ^e r i n ^g t h ^a ^t t a ^r ^g ^e t . I n ^d ^e ^e ^d , ^f ^e ^m ^a l e ^d i r e ^c t o ^r ^s ^c ^u r r e ⁿ t l ^y ^a ^c ^c ^o ^u ⁿ ^t ^f ^o ^r ² ⁹ % ^o ^f ^a l l ^b ^o ^a r d ^m ^e ^m ^b ^e ^r ^s ^h i p .

^T ^h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^v ^e r i ^f i e ^s ^c ^o ^m ^p l i a ⁿ ^c ^e ^w i t h t h ⁱ ^s ^p ^o l i ^c ^y ^a ⁿ ⁿ ^u ^a l l ^y ^a ⁿ ^d r e ^p ^o r t ^s ^o ⁿ i t ^s ^f i n ^d i n ^g ^s i n t h ^e ^A ⁿ ⁿ ^u ^a ^l ^C ^o r p ^o r a t e ^G ^o ^v ^e r n ^a ⁿ ^c ^e ^R ^e ^p ^o r t . ^M ^o r e ^o ^v ^e r , t h ^a ^t ^C ^o ^m ^m i t t e ^e ^s t r i ^v ^e ^s t o ^m ^a ^k ^e ^s ^u r e t h ^e ^c ^a ⁿ ^d i d ^a t e ^s ^p ^u ^t ^f ^o r w ^a r d ^a r e ^s ^u f f ⁱ ^c i e ⁿ t l ^y ^h ^o ⁿ ^o ^u r a ^b l e , ^s ^u i t a ^b l e , ^s ^o ^l ^v ^e ⁿ t , ^c ^o ^m ^p ^e t e ⁿ t , ^e ^x ^p ^e r i e ⁿ ^c ^e ^d , ^q ^u ^a l i ^f i e ^d , t r a i n ^e ^d , ^a ^v ^a i l a ^b l e ^a ⁿ ^d ^c ^o ^m ^m i t t e ^d t o t h ^e i r ^d ^u t i e ^s , t h ^a ^t t h ^e ^c ^a ⁿ ^d i d ^a t e ^s ^e l e ^c t i o ⁿ ^p r o ^c ^e ^s ^s r e ^s ^u l t ^s i n ^a ^d ^e ^q ^u ^a t e ^b ^a l a ⁿ ^c ^e i n t h ^e ^b ^o ^a r d r o ^o ^m ^a ^s ^a ^w ^h ^o l e , ^e ⁿ r i ^c ^h ^e ^s t h ^e ^d ^e ^c ⁱ ^s i o ⁿ ï m ^a ^k i n ^g ^p r o ^c ^e ^s ^s ^a ⁿ ^d ^h ^e l p ^s ^p r e ^v ^e ⁿ ^t ^c ^o ⁿ ^f l i ^c ^t ^s ^o ^f i n t e r e ^s ^t ^s ^u ^c ^h t h ^a ^t t h ^e ^c ^o ^m ^m ^o ⁿ i n t e r e ^s ^t ^a l w ^a ^y ^s ^p r e ^v ^a i l ^s ^o ^v ^e ^r i n ^d ⁱ ^v i d ^u ^a ^l i n t e r e ^s ^t ^s .

^L i k ^e ^w ⁱ ^s ^e , ^b ^o t h t h ^e ^C ^o ^m ^m i t t e ^e ^a ⁿ ^d t h ^e ^B ^o ^a r d r e ^v i e ^w ^e ^d t h ⁱ ^s ⁱ ^s ^s ^u ^e ^a ^t t h ^e ^e ⁿ ^d ^o ^f ² ⁰ 1 9 ; ^a ⁿ ^d ^f i n ^a l l ^y , ^a ^m ^o ^d ⁱ ^f ⁱ ^c ^a t i o ⁿ ^o ^f t h ^e ^R ^e ^g ^u l a t i o ⁿ ^s ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^a ⁿ ^d ^a ⁿ ^e ^w r e ^g ^u l a t i o ⁿ ^f ^o ^r t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^w ^e r e ^a ^p ^p r o ^v ^e ^d , ^w i t h t h ^e ^o b j ^e ^c t i ^v ^e ^o ^f ^c ^o ^m ^p i l i n ^g i n t h ^e i n t e r n ^a ^l r e ^g ^u l a t i o ⁿ ^s ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^b ^o t h t h ^e r e ^c ^o ^m ^m ^e ⁿ ^d ^a t i o ⁿ ^s ^o ^f t h ^e ^C ^N ^M ^V ^c ^o ⁿ t a i n ^e ^d i n ^b ^o t h t h ^e ^T ^e ^c ^h ⁿ ⁱ ^c ^a ^l ^G ^u i d ^e ¹ / ² ⁰ 1 9 ^o ⁿ ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^s ^a ^s i n ^L ^a ^w ¹ 1 / 2 ⁰ 1 8 , ^o ^f ^D ^e ^c ^e ^m ^b ^e ^r ² ⁸ , ^a ^m ^o ⁿ ^g ^o t h ^e ^r ^s , r e ^g ^a r d i n ^g ^d ⁱ ^v ^e ^r ^s i t ^y .

i n ^a t i o ⁿ ^c ^o

i t t e ^e

^C . ¹ . ⁶ . ^b ^E ^m ^m ^m ' ^s ^a ⁿ ⁿ ^u ^a ^l ^c ^h ^e ^c ^k ^o ⁿ ^c ^o ^m ^p l i a ⁿ ^c ^e ^w i t h t h ^e ^d i r ^e ^c t o ^r ^s ^e l e ^c t i o ⁿ ^p ^o l i c ^y . ^I ⁿ ^p ^a ^r t i c ^u l a ^r , ^d ^e ^s ^c ^r ⁱ ^b ^e ^h ^o ^w t h ^e ^p ^o l i c ^y ^p ^u ^r ^s ^u ^e ^s t h ^e ^g ^o ^a ^l ^o ^f ^h ^a ^v i n ^g ^a ^t l e ^a ^s ^t ³ ⁰ % ^o ^f t o t a ^l ^b ^o ^a ^r ^d ^p l a ^c ^e ^s ^o ^c ^c ^u ^p i e ^d ^b ^y ^w ^o ^m ^e ⁿ ^d i r ^e ^c t o ^r ^s ^b ^e f o ^r ^e t h ^e ^y ^e ^a ^r ² ⁰ ² ⁰ :

^x ^p l a i n t h ^e ^r ^e ^s ^u l t s ^o ^f t h ^e ⁿ ^o

i s

^T ^h ^e ^d i r e ^c t o ^r ^s ^e l e ^c t i o ⁿ ^P ^o l i ^c ^y ^w ^a ^s ^d r a ^w ⁿ ^u ^p i n ² ⁰ 1 5 ^a ⁿ ^d ^a ^p ^p r o ^v ^e ^d ^b ^y t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^a ⁿ ^d t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^o ⁿ ^J ^a ⁿ ^u ^a ^r ^y ² ⁰ , ² ⁰ 1 6 . I t ^s ^p ^e ^c ⁱ ^f ⁱ ^c ^a l l ^y ^s t a t e ^s t h ^e t a ^r ^g ^e ^t ^o ^f ^h ^a ^v i n ^g ³ ⁰ % ^o ^f i t ^s ^m ^e ^m ^b ^e ^r ^s ^h i p ^o ^c ^c ^u ^p i e ^d ^b ^y ^w ^o ^m ^e ⁿ ^b ^y ² ⁰ ² ⁰ . ^T ^h ^e ^s ^e l e ^c t i o ⁿ ^p ^o l i ^c ^y ^w ^a ^s ^a ^l ^s ^o r e ^v i e ^w ^e ^d i n ² ⁰ 1 8 ^w i t h t h ^e ^a i m ^o ^f ^e ^m ^p ^h ^a ^s ⁱ ^s i n ^g t h ^e ^p r o ^v ⁱ ^s i o ⁿ ^s t h ^a ^t ^w ^o ^u l d ^f ^o ^s t e ^r t h ^e ^d ⁱ ^v ^e ^r ^s i t ^y i n t h ^e ^B ^o ^a r d , ^a ^m ^o ⁿ ^g ^o t h ^e ^r ^s .

I n ² ⁰ 1 8 , ^a ^f ^e ^m ^a l e i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^d i r e ^c t o ^r ^w ^a ^s ^a ^p ^p ^o i n t e ^d t o t h ^e ^b ^o ^a r d ^w i t h ^a ^v i e ^w t o ^d ^e l i ^v ^e r i n ^g t h ^e t a ^r ^g ^e ^t ^s ^e ^t ^b ^y t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e . ^F ^e ^m ^a l e ^b ^o ^a r d r o ^o ^m r e ^p r e ^s ^e ⁿ t a t i o ⁿ ⁱ ^s ^c ^u r r e ⁿ t l ^y ^a ^t ² ⁹ % , ^p r a ^c t i ^c ^a l l ^y t h ^e t a ^r ^g ^e t e ^d ³ ⁰ % .

^L i k ^e ^w ⁱ ^s ^e , ^a ^s ^m ^e ⁿ t i o ⁿ ^e ^d i n t h ^e ^u ^p ^p ^e ^r ^s ^e ^c t i o ⁿ ^C . 1 . 6 , ^a ^t t h ^e ^e ⁿ ^d ^o ^f t h ^e ^y ^e ^a ^r ² ⁰ 1 9 , t h ^e ^R ^e ^g ^u l a t i o ⁿ ^s ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^w ^e r e r e ^v ⁱ ^s ^e ^d ^a ⁿ ^d ^a ⁿ ^e ^w ^o ^w ⁿ ^R ^e ^g ^u l a t i o ⁿ ^f ^o ^r t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^w ^a ^s ^a ^p ^p r o ^v ^e ^d , ^w i t h t h ^e ^o b j ^e ^c t i ^v ^e ^o ^f ^c ^o l l e ^c t i n ^g i n t h ^e i n t e r n ^a ^l r e ^g ^u l a t i o ⁿ ^s ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y , ^b ^o t h t h ^e r e ^c ^o ^m ^m ^e ⁿ ^d ^a t i o ⁿ ^s ^o ^f t h ^e ^C ^N ^M ^V ^c ^o ⁿ t a i n ^e ^d ^b ^o t h i n ^T ^e ^c ^h ⁿ ⁱ ^c ^a ^l ^G ^u i d ^e 1 / 2 ⁰ 1 9 ^o ⁿ ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^s ^a ⁿ ^d i n ^L ^a ^w ¹ 1 / 2 ⁰ 1 8 , ^o ^f ^D ^e ^c ^e ^m ^b ^e ^r ² ⁸ , ^a ^m ^o ⁿ ^g ^o t h ^e ^r ^s , r e ^g ^a r d i n ^g ^d ⁱ ^v ^e ^r ^s i t ^y .

^C . 1 . 7 ^E ^x ^p l a i n ^h ^o ^w ^s ^h ^a ^r ^e ^h ^o l d ^e ^r ^s ^w i t h ^s i g ⁿ i f i c ^a ⁿ ^t ^h ^o l d i n ^g ^s ^a ^r ^e ^r ^e ^p ^r ^e ^s ^e ⁿ t e ^d ^o ⁿ t h ^e ^b ^o ^a ^r ^d :

^A r t i ^c l e ⁸ . 3 ^o ^f t h ^e ^B ^o ^a r d ^R ^e ^g ^u l a t i o ⁿ ^s ^s t i p ^u l a t e ^s t h ^a ^t t h ^e ^B ^o ^a r d ^m ^u ^s ^t ^e ⁿ ^d ^e ^a ^v ^o ^u ^r t h ^a ^t ^a ^m ^o ⁿ ^g ^e ^x t e r n ^a ^l ^d i r e ^c t o ^r ^s , t h ^e r e l a t i o ⁿ ^b ^e t w ^e ^e ⁿ ^p r o ^p r i e t a ^r ^y ^m ^e ^m ^b ^e ^r ^s ^a ⁿ ^d i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^s ^s ^h ^o ^u l d ^m ^a ^t ^c ^h t h ^e ^p r o ^p ^o r t i o ⁿ ^b ^e t w ^e ^e ⁿ t h ^e ^c ^a ^p i t a ^l r e ^p r e ^s ^e ⁿ t e ^d ^o ⁿ t h ^e ^b ^o ^a r d ^b ^y ^p r o ^p r i e t a ^r ^y ^d i r e ^c t o ^r ^s ^a ⁿ ^d t h ^e r e ^m ^a i n ^d ^e ^r ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y ' s ^c ^a ^p i t a l .

^F ^u r t h ^e r , ^a r t i ^c l e ⁸ . 4 ^o ^f t h ^e ^R ^e ^g ^u l a t i o ⁿ ^s ^s t i p ^u l a t e ^s t h ^a ^t t h ^e ^B ^o ^a r d ^m ^u ^s ^t ^p r e ^v ^e ⁿ ^t ^d ⁱ ^s ^c r i m i n ^a t i o ⁿ ^a ^m ^o ⁿ ^g ^s ^h ^a r e ^h ^o l d ^e ^r ^s i n t e r m ^s ^o ^f ^b ^o ^a r d r o ^o ^m ^a ^c ^c ^e ^s ^s ^v i a ^p r o ^p r i e t a ^r ^y ^d i r e ^c t o ^r ^s ^h i p ^s .

^C . 1 . 8 ^E ^x ^p l a i n ^a ⁿ ^y ^r ^e ^a ^s ^o ⁿ ^s ^w ^h ^y ^p ^r ^o ^p ^r i e t a ^r ^y ^d i r ^e ^c t o ^r ^s ^h ^a ^v ^e ^b ^e ^e ⁿ ^a ^p ^p ^o i n t e ^d ^a ^t t h ^e ^u ^r ^g i n ^g ^o ^f ^s ^h ^a ^r ^e ^h ^o l d ^e ^r ^s ^c ^o ⁿ t r ^o l l i n ^g l e ^s ^s t h ^a ⁿ ³ % ^o ^f ^c ^a ^p i t a l :

N a e o r c o p a n y n a e o f m m m s h a r e h o l d e r	e a s o n s R

^I ⁿ ^d i c ^a t e ^w ^h ^e t h ^e ^r ^a ⁿ ^y f o ^r ^m ^a ^l ^r ^e ^q ^u ^e ^s t s f o ^r ^a ^b ^o ^a ^r ^d ^s ^e ^a ^t f r ^o ^m ^s ^h ^a ^r ^e ^h ^o l d ^e ^r ^s ^w ^h ^o ^s ^e ^e ^q ^u i t y i n t e ^r ^e ^s ^t i s ^e ^q ^u ^a ^l t o ^o ^r ^g ^r ^e ^a t e ^r t h ^a ⁿ t h ^a ^t ^o ^f ^o t h ^e ^r ^s ^a ^p ^p l y i n ^g ^s ^u ^c ^c ^e ^s ^s f u l l y f o ^r ^a ^p ^r ^o ^p ^r i e t a ^r ^y ^d i r ^e ^c t o ^r ^s ^h i p ^h ^a ^v ^e ^b ^e ^e ⁿ ^r ^e ^j ^e ^c t e ^d . ^I ^f ^s ^o , ^e ^x ^p l a i n ^w ^h ^y t h ^e ^s ^e ^r ^e ^q ^u ^e ^s t s ^h ^a ^v ^e ⁿ ^o ^t ^b ^e ^e ⁿ ^e ⁿ t e ^r t a i n ^e ^d .

^Y ^e ^s ^N ^o ^X

N a e o r c o p a n y n a e o f m m m s h a r e h o l d e r	x p l a n a t i o n E

^C . 1 . 9 ^I ⁿ ^d i c ^a t e ^w ^h ^e t h ^e ^r ^a ^d i r ^e ^c t o ^r ^h ^a ^s ^r ^e ^s i g ⁿ ^e ^d f r ^o ^m ^o f f i c ^e ^b ^e f o ^r ^e t h ^e i r t e ^r ^m ^o ^f ^o f f i c ^e ^e ^x ^p i r ^e ^d , ^w ^h ^e t h ^e ^r ^a ⁿ ^y ^s ^u ^c ^h ^d i r ^e ^c t o ^r ^h ^a ^s ^s t a t e ^d t h ^e i r ^r ^e ^a ^s ^o ⁿ ^s t o t h ^e ^b ^o ^a ^r ^d ^a ⁿ ^d ^h ^o ^w , ^a ⁿ ^d , i f i n ^w ^r i t i n ^g t o t h ^e ^e ⁿ t i r ^e ^b ^o ^a ^r ^d , ^e ^x ^p l a i n t h ^e ^r ^e ^a ^s ^o ⁿ ^s ^g i v ^e ⁿ :

^Y ^e ^s ^N ^o ^X

^C . 1 . 1 ⁰ ^I ⁿ ^d i c ^a t e , i f ^a ^p ^p ^r ^o ^p ^r i a t e , ^a ⁿ ^y ^p ^o ^w ^e ^r ^s ^d ^e l e ^g ^a t e ^d t o t h ^e ^c ^h i e ^f ^e ^x ^e ^c ^u t i v ^e ^o f f i c ^e ^r ( ^s ) :

^Y ^e ^s ^N ^o ^X

N a e o r c o p a n y n a e o f m m m s h a r e h o l d e r	r i e f d e s c r i p t i o n B

^C . 1 . 1 ¹ ^N ^a ^m ^e ^a ⁿ ^y ^d i r ^e ^c t o ^r ^s ^w ^h ^o ^a ^r ^e ^a l s ^o ^e ^x ^e ^c ^u t i v ^e ^s ^o ^r ^d i r ^e ^c t o ^r ^s ^o ^f ^o t h ^e ^r ^c ^o ^m ^p ^a ⁿ i e ^s t h ^a ^t f o ^r ^m ^p ^a ^r ^t ^o ^f t h ^e l i s t e ^d ^c ^o ^m ^p ^a ⁿ ^y ^g ^r ^o ^u ^p :

N a e o r c o p a n y m m	e g i s t e r e d o f t h e n a e g r o u p R m	o s i t i o n P	t h e y o h a v e D
d i r e c t o r n a e o f m	c o p a n y m		e x e c u t i v e d u t i e s ?
i g u e l P e r e d a M E s p e s o	I S T I C L E L O G A L O V E R A I Y	h a i r m o f t h e o a r d C a n B	N o
	I I , S . A . U	i r e c t o r s o f D
i g u e l P e r e d a M E s p e s o	I L L I S A L , S . A . U L E R E T A A	h a i r m o f t h e o a r d C a n B i r e c t o r s o f D	N o
i g u e l P e r e d a M E s p e s o	I L I P E L E R E T A H R , S . A . U A L B A C E N T E R	h a i r m o f t h e o a r d C a n B i r e c t o r s o f D	N o
i g u e l P e r e d a M E s p e s o	F F I C L E O E S E L O Y 2 7 , S . A . U G O N Z A L O	h a i r m o f t h e o a r d C a n B i r e c t o r s o f D	N o
i g u e l P e r e d a M E s p e s o	I L L E R E T A A S T E R M A S , S . L . U	h a i r m o f t h e o a r d C a n B i r e c t o r s o f D	N o
i g u e l P e r e d a M E s p e s o	I S T I C I I I L E L O G A L O V E R A I V , S . L . U Y	h a i r m o f t h e o a r d C a n B i r e c t o r s o f D	N o
i g u e l P e r e d a M E s p e s o	I S T I C L E L O G A L M U S S A F E S , S . L . U	h a i r m o f t h e o a r d C a n B i r e c t o r s o f D	N o
i g u e l P e r e d a M E s p e s o	I L I P E L E R E T A H R O N D A R A , S . L . U	h a i r m o f t h e o a r d C a n B i r e c t o r s o f D	N o
i g u e l P e r e d a M E s p e s o	F F I C I R 1 , L E O E S J O A N M Ó 2 S . L . U	h a i r m o f t h e o a r d C a n B i r e c t o r s o f D	N o
i g u e l P e r e d a M E s p e s o	I L I D L E R E T A V A N O V A , S . L . U . ( p r e v i o u s l y P A R C I L L E R E T A S A G U N T O , S . L . U . )	h a i r m o f t h e o a r d C a n B i r e c t o r s o f D	N o
i g u e l P e r e d a M E s p e s o	I L L , S . L . U L E R E T A E L R O S A	h a i r m o f t h e o a r d C a n B i r e c t o r s o f D	N o
i g u e l P e r e d a M E s p e s o	I L I A , S . L . U L E R E T A G A L A R	h a i r m o f t h e o a r d C a n B i r e c t o r s o f D	N o
i g u e l P e r e d a M E s p e s o	I N L A R E S P A Ñ A V E R S I Ó N Í S T I C I V , S . L . U L O G A	i r e c t o r a c t i n g j o i n t D ( s e v e r a l l y a n d )	N o
i g u e l P e r e d a M E s p e s o	I L L E R E T A I S T A , S . L . U V H E R M O S A	h a i r m o f t h e o a r d C a n B i r e c t o r s o f D	N o
i g u e l P e r e d a M E s p e s o	I L , S . L . U L E R E T A L A G O H ( p r e v i o u s l y L A R E S P A Ñ A P P I N I I I , S H O G C E N T R E S V S . L . U . )	h a i r m o f t h e o a r d C a n B i r e c t o r s o f D	N o
i g u e l P e r e d a M E s p e s o	I L I I , L E R E T A S A G U N T O S . L . U . ( p r e v i o u s l y L A R F F I C I , E S P A Ñ A O E S V S . L . U . )	h a i r m o f t h e C a n o a r d B o f i r e c t o r s D	N o

i g u e l P e r e d a M E s p e s o	I L I L L A L E R E T A V V E R D E ,	h a i r m o f t h e o a r d C a n B	N o
	S . L . U	i r e c t o r s o f D
i g u e l P e r e d a M E s p e s o	I L L E R E T A A L B A C E N T E R ,	h a i r m o f t h e o a r d C a n B	N o
	S . L . U	i r e c t o r s o f D
i g u e l P e r e d a M E s p e s o	F F I C L E O E S M A R C E L O	h a i r m o f t h e o a r d C a n B	N o
	S P I N 4 2 , S . L . U O L A	i r e c t o r s o f D
i g u e l P e r e d a M E s p e s o	I L L E R E T A L A S H U E R T A S ,	h a i r m o f t h e o a r d C a n B	N o
	S . L . U	i r e c t o r s o f D
i g u e l P e r e d a M E s p e s o	I L X I N I , L E R E T A T G U D	h a i r m o f t h e o a r d C a n B	N o
	S . L . U	i r e c t o r s o f D
i g u e l P e r e d a M E s p e s o	I L L E R E T A A N E C B L A U ,	h a i r m o f t h e o a r d C a n B	N o
	S . L . U	i r e c t o r s o f D
i g u e l P e r e d a M E s p e s o	I L L E R E T A G R A N V Í A D E	h a i r m o f t h e o a r d C a n B	N o
	I G , S . A . U V O	i r e c t o r s o f D
i g u e l P e r e d a M E s p e s o	I L , S . L . U L E R E T A A B A D Í A	h a i r m o f t h e o a r d C a n B	N o
		i r e c t o r s o f D
i g u e l P e r e d a M E s p e s o	I L L E R E T A	h a i r m o f t h e o a r d C a n B	N o
	I P E R I , S . L . U H M E R C A D O S	i r e c t o r s o f D
i g u e l P e r e d a M E s p e s o	I L L E R E T A	h a i r m o f t h e o a r d C a n B	N o
	I P E R I I , S . L . U H M E R C A D O S	i r e c t o r s o f D
i g u e l P e r e d a M E s p e s o	I L L E R E T A	h a i r m o f t h e o a r d C a n B	N o
	I P E R I I I , S . L . U H M E R C A D O S	i r e c t o r s o f D
i g u e l P e r e d a M E s p e s o	I L I V S , S . L . U L E R E T A R A	h a i r m o f t h e o a r d C a n B	N o
		i r e c t o r s o f D
i g u e l P e r e d a M E s p e s o	I L L E R E T A C O R D O B A S U R ,	h a i r m o f t h e o a r d C a n B	N o
	S . L . U . ( p r e v i o u s l y G L O B A L	i r e c t o r s o f D
	, S . L . U P E R G A M O . )
i g u e l P e r e d a M E s p e s o	I N I L I A I A M O B R J U A N	i r e c t o r o f t h e o a r d D B o f	N o
	S . L . B R A V O 3	i r e c t o r s D
e l l C R o g e r M a x w o o k e	I N I L I A I A M O B R J U A N	h a i r m o f t h e o a r d C a n B	N o
	S . L . B R A V O 3	i r e c t o r s o f D

^C . 1 . 1 ² ^L i s ^t ^a ⁿ ^y ^c ^o ^m ^p ^a ⁿ ^y ^b ^o ^a ^r ^d ^m ^e ^m ^b ^e ^r ^s ^w ^h ^o l i ^k ^e ^w i s ^e ^s i t ^o ⁿ t h ^e ^b ^o ^a ^r ^d ^s ^o ^f ^d i r ^e ^c t o ^r ^s ^o ^f ^o t h ^e ^r ⁿ ^o ⁿ Æ g ^r ^o ^u ^p ^c ^o ^m ^p ^a ⁿ i e ^s t h ^a ^t ^a ^r ^e l i s t e ^d ^o ⁿ ^o f f i c i a ^l ^s ^e ^c ^u ^r i t i e ^s ^m ^a ^r ^k ^e t s , ^o t h ^e ^r t h ^a ⁿ ^y ^o ^u ^r ^o ^w ⁿ ^g ^r ^o ^u ^p , i n ^s ^o f a ^r ^a ^s t h ^e ^s ^e ^h ^a ^v ^e ^b ^e ^e ⁿ ^r ^e ^p ^o ^r t e ^d t o t h ^e ^c ^o ^m ^p ^a ⁿ ^y :

N a e o r c o p a n y n a e o f m m m d i r e c t o r	e g i s t e r e d t h e n a e o f R m g r o u p c o p a n y	o s i t i o n P
	m
a l l e J o s e L u i s d e l V	b e n g o a , S . A A	I n d e p e n d e n t D i r e c t o r
g u i l e r a I s a b e l A	O r y z o n G e n o m i c s	I n d e p e n d e n t D i r e c t o r
L e t i c i a I g l e s i a s	o r p o r a c i ó n A b a n c a C a n c a r i a B	I n d e p e n d e n t D i r e c t o r h a i r m o f t h e u d i t C a n A o n t r o l C i t t e e a n d C o m m t h e a n d M e m b e r o f I n t e g r a l R i t t e e i s k C o m m
	E , S . A A E N A S M	I n d e p e n d e n t D i r e c t o r h a i r m o f t h e u d i t C a n A i t t e e C o m m

^C . 1 . 1 ³ ^I ⁿ ^d i c ^a t e ^w ^h ^e t h ^e ^r t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^h ^a ^s ^a ⁿ ^y ^r ^u l e ^s ^a ^b ^o ^u ^t t h ^e ⁿ ^u ^m ^b ^e ^r ^o ^f ^d i r ^e ^c t o ^r ^s ^h i p ^s i t s ^b ^o ^a ^r ^d ^m ^e ^m ^b ^e ^r ^s ^c ^a ⁿ ^h ^o l d ^a ⁿ ^d i f ^s ^o ^e ^x ^p l a i n t h ^e ^m :

^Y ^e ^s ^X ^N ^o

x p l a n a t i o n t h e r u l e s o f E
p a n y ' s d i r e c t o r s s i t o n t h e b o a r d s t o o t h e r l i s t e d p a n i e s i n T h e C o m m a y o f u p f o u r c o m (
a d d i t i o n t o t h a t o f t h e r t i c l e 1 9 . 4 t h e o a r d e g u l a t i o n s . C o m p a n y ) . A o f B R

^C . 1 . 1 ⁴ ^S ^e ^c t i o ⁿ ^r ^e ^p ^e ^a l e ^d

^C . 1 . 1 ⁵ ^I t e ^m i s ^e t o t a ^l ^r ^e ^m ^u ⁿ ^e ^r ^a t i o ⁿ ^p ^a i d t o t h ^e ^m ^e ^m ^b ^e ^r ^s ^o ^f t h ^e ^b ^o ^a ^r ^d ^o ^f ^d i r ^e ^c t o ^r ^s ^a ^s ^a ^w ^h ^o l e :

u n e r a t i o n ( t h o u s a n d s o a r d r e o f e u r o s ) m	5 0 4
B s e r v i n g d i r e c t o r s i n o f p e n s i o n o u n t a c c r u e d y r e s p e c t A m b e n t i t l e e n t s ( t h o u s a n d s o f e u r o s ) m
f o r d i r e c t o r s i n o f p e n s i o n o u n t a c c r u e d y e r r e s p e c t A m b m e n t i t l e e n t s ( t h o u s a n d s o f e u r o s ) m

^C . 1 . 1 ⁶ ^I ^d ^e ⁿ t i f y t h ^e ^m ^e ^m ^b ^e ^r ^s ^o ^f ^s ^e ⁿ i o ^r ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^w ^h ^o ^a ^r ^e ⁿ ^o ^t ^e ^x ^e ^c ^u t i v ^e ^d i r ^e ^c t o ^r ^s ^a ⁿ ^d i n ^d i c ^a t e t o t a ^l ^r ^e ^m ^u ⁿ ^e ^r ^a t i o ⁿ ^a ^c ^c ^r ^u i n ^g t o t h ^e ^m ^d ^u ^r i n ^g t h ^e ^r ^e ^p ^o ^r t i n ^g ^p ^e ^r i o ^d :

N a e o r c o p a n y n a e m m m	o s i t i o n ( s ) P
r m e n t i a J o n A M e n d a z a	o r p o r a t e i r e c t o r C D a n d C F O
u e r r e r o T r e v i j a n o S u s a n a G	i r e c t o r L e g a l D a n d d e p u t y s e c r e t a r y t h e b o a r d o f
e r n á n P e d r o r i b e H S a n L ó p e z d e U	i r e c t o r I n v e s t o r D o f e l a t i o n s R
o t a l s e n i o r u n e r a t i o n ( i n t h o u s a n d s

o t a l s e n i o r u n e r a t i o n ( i n t h o u s a n d s a n a g e e n t r e o f T m m m	3 6 8
e u r o s )

^C . 1 . 1 ⁷ ^I ⁿ ^d i c ^a t e t h ^e i d ^e ⁿ t i t y ^o ^f ^a ⁿ ^y ^b ^o ^a ^r ^d ^m ^e ^m ^b ^e ^r ^s ^w ^h ^o l i ^k ^e ^w i s ^e ^s i t ^o ⁿ t h ^e ^b ^o ^a ^r ^d ^s ^o ^f ^d i r ^e ^c t o ^r ^s ^o ^f ^c ^o ^m ^p ^a ⁿ i e ^s ^h ^a ^v i n ^g ^s i g ⁿ i f i c ^a ⁿ ^t ^s ^h ^a ^r ^e ^h ^o l d i n ^g ^s ^a ⁿ ^d / ^o ^r t h ^e i r ^g ^r ^o ^u ^p ^c ^o ^m ^p ^a ⁿ i e ^s :

N a e o r c o p a n y n a e o f m m m d i r e c t o r	o p a n y n a e o f C m m s i g n i f i c a n t s h a r e h o l d e r	o s i t i o n P
i g u e l P e r e d a M	r u p o I n v e r s i o n e s G L a r I n m o b i l i a r i a s , S . A	C E O

^D ^e ^s ^c ^r ⁱ ^b ^e ^a ⁿ ^y ^r ^e l e ^v ^a ⁿ ^t ^r ^e l a t i o ⁿ ^s ^h i p ^s ^o t h ^e ^r t h ^a ⁿ t h ^o ^s ^e i n ^d i c ^a t e ^d ^u ⁿ ^d ^e ^r t h ^e ^p ^r ^e ^v i o ^u ^s ^h ^e ^a ^d i n ^g t h ^a ^t l i n ^k ^m ^e ^m ^b ^e ^r ^s ^o ^f t h ^e ^b ^o ^a ^r ^d ^w i t h ^s i g ⁿ i f i c ^a ⁿ ^t ^s ^h ^a ^r ^e ^h ^o l d ^e ^r ^s ^a ⁿ ^d / ^o ^r t h ^e i r ^g ^r ^o ^u ^p ^c ^o ^m ^p ^a ⁿ i e ^s :

N a e o r c o p a n y n a e o f m m m r e l a t e d d i r e c t o r	N a e o r c o p a n y n a e o f m m m r e l a t e d s i g n i f i c a n t s h a r e h o l d e r	e s c r i p t i o n o f D r e l a t i o n s h i p
i g u e l P e r e d a M	r u p o I n v e r s i o n e s G L a r I n m o b i l i a r i a s , S . A	i g u e l P e r e d a p a r t o f M i s t h e P e r e d a i l y , f a m r u p o o w n e r o f G L a r I n v e r s i o n e s I n m o b i l i a r i a s , S . A

^C . 1 . 1 ⁸ ^I ⁿ ^d i c ^a t e ^w ^h ^e t h ^e ^r t h ^e ^b ^o ^a ^r ^d ^r ^e ^g ^u l a t i o ⁿ ^s ^w ^e ^r ^e ^a ^m ^e ⁿ ^d ^e ^d ^d ^u ^r i n ^g t h ^e ^y ^e ^a ^r :

^Y ^e ^s ^X ^N ^o

^D ^e ^s ^c ^r i p t i o ⁿ ^o ^f t h ^e ^a ^m ^e ⁿ ^d ^m ^e ⁿ t s :

^A r t i c l e ^s ⁵ ( " ^C ^o ^m ^p ^e t e ⁿ ^c ^e ^s ^o ^f t h ^e ^B ^o ^a r d " ) , ⁸ ( " ^Q ^u ^a l i t a t i v ^e ^c ^o ^m ^p ^o ^s i t i o ⁿ " ) , 1 5 ( " ^A ^p ^p ^o i n t m ^e ⁿ t s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e . ^C ^o ^m ^p ^o ^s i t i o ⁿ , ^c ^o ^m ^p ^e t e ⁿ ^c i e ^s ^a ⁿ ^d ^o ^p ^e r a t i o ⁿ " ) , 1 9 ( " ^A ^p ^p ^o i n t m ^e ⁿ ^t ^o ^f ^d i r e ^c t o r s " ) ^a ⁿ ^d ² ⁸ ( " ^G ^e ⁿ ^e r a ^l ^O ^b l i g ^a t i o ⁿ ^s ^o ^f t h ^e ^D i r e ^c t o r " ) ^o ^f t h ^e ^R ^e ^g ^u l a t i o ⁿ ^s ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o r s ^o ^f ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^R ^e ^a ^l ^E ^s t a t e ^S ^O ^C I M I , ^S ^A ^h ^a ^v ^e ^b ^e ^e ⁿ ^m ^o ^d ⁱ ^f i e ^d .

^T ^h ^e ^m ^o ^d ⁱ ^f ⁱ ^c ^a t i o ⁿ ^o ^f t h ^e ^R ^e ^g ^u l a t i o ⁿ ^s ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y ⁱ ^s i n t e ⁿ ^d ^e ^d t o i n ^c ^o r p ^o r a t e , ^f i r ^s t , t h ^e ^b ^a ^s ⁱ ^c ^p r i n ^c i p l e ^s ^a ⁿ ^d ^c r i t e r i a ^o ^f t h ^e ^T ^e ^c ^h ⁿ ⁱ ^c ^a ^l ^G ^u i d ^e ^o ^f t h ^e ^C ^N ^M ^V 1 / 2 ⁰ 1 9 ^o ⁿ ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^s ^a ⁿ ^d , i n ^c ^o ⁿ ⁿ ^e ^c t i o ⁿ t h ^e r e ^w i t h , i n ^c ^o r p ^o r a t e ^e ^x ^p r e ^s ^s ^l ^y ^c ^e r t a i n ^R ^e ^c ^o ^m ^m ^e ⁿ ^d ^a t i o ⁿ ^s ^o ^f t h ^e ^C ^o ^d ^e ^o ^f ^G ^o ^o ^d ^G ^o ^v ^e r n ^a ⁿ ^c ^e t h ^a ^t t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^c ^o ^m ^p l i e ^s ^w i t h ^a ⁿ ^d , ^s ^e ^c ^o ⁿ ^d ^l ^y , ^c ^o l l e ^c ^t t h ^e ⁿ ^o ^v ^e l t i e ^s i n t r o ^d ^u ^c ^e ^d i n t h ^e ^C ^a ^p i t a ^l ^C ^o ^m ^p ^a ⁿ i e ^s ^L ^a ^w ^b ^y ^L ^a ^w ¹ 1 / 2 ⁰ 1 8 i n r e l a t i o ⁿ t o ^d ⁱ ^v ^e ^r ^s i t ^y i n t h ^e ^c ^o ^m ^p ^o ^s i t i o ⁿ ^o ^f t h ^e ^B ^o ^a r d ^a ⁿ ^d ^w i t h t h ^e ^c ^o ^m ^p ^e t e ⁿ ^c ^e ^s ⁿ ^o ⁿ ï d ^e l e ^g ^a ^b l e ^o ^f t h ⁱ ^s ^b ^o ^d ^y .

^L i k ^e ^w ⁱ ^s ^e , i t ⁱ ^s ^p r o ^p ^o ^s ^e ^d t o i n t r o ^d ^u ^c ^e ^c ^e r t a i n ^m ^o ^d ⁱ ^f ⁱ ^c ^a t i o ⁿ ^s ^o ^f ^a t e ^c ^h ⁿ ⁱ ^c ^a ^l ⁿ ^a t u r e , r e ^p l a ^c i n ^g t h ^e r e ^f ^e r e ⁿ ^c ^e t o ^a ⁿ ^o r m r e ^p ^e ^a l e ^d ^b ^y t h ^e ^c ^u r r e ⁿ ^t ^L ^a ^w ³ / 2 ⁰ 1 5 , ^o ^f ^M ^a ^r ^c ^h ³ ⁰ , r e ^g ^u l a t i n ^g t h ^e ^e ^x ^e ^r ^c ⁱ ^s ^e ^o ^f t h ^e ^h ⁱ ^g ^h ^p ^o ^s i t i o ⁿ ^o ^f t h ^e ^G ^e ⁿ ^e r a ^l ^S t a t e ^A ^d ^m i n ⁱ ^s t r a t i o ⁿ , ^a ⁿ ^d ^e l i m i n ^a t i n ^g ^a r t i ^c l e ² ⁸ ( " ^G ^e ⁿ ^e r a ^l ^o ^b l i ^g ^a t i o ⁿ ^s ^o ^f t h ^e ^d i r e ^c t o ^r " ) t h ^e r e ^f ^e r e ⁿ ^c ^e t o t h ^e ^d i r e ^c t o ^r ^s ^w ^h ^o ^m ^u ^s ^t ^p r o ^v i d ^e t h ^e i r ^s t r a t e ^g ⁱ ^c ^v ⁱ ^s i o ⁿ ^a r e " t o ^a ^g r e ^a t e ^r ^e ^x t e ⁿ ^t t h ^e i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t " , ^s i n ^c ^e ^a l l ^d i r e ^c t o ^r ^s ^m ^u ^s ^t ^p r o ^v i d ^e ^s ^u ^c ^h ^s t r a t e ^g ⁱ ^c ^v ⁱ ^s i o ⁿ ^f r o ^m t h ^e i r ^u ⁿ ⁱ ^q ^u ^e ^c ^a ^p ^a ^c i t ^y , ^w ^h ^a t e ^v ^e ^r t h ^e i r ^c ^a t e ^g ^o ^r ^y .

^C . 1 . 1 ⁹ ^I ⁿ ^d i c ^a t e t h ^e ^p ^r ^o ^c ^e ^d ^u ^r ^e ^s f o ^r ^s ^e l e ^c t i n ^g , ^a ^p ^p ^o i n t i n ^g , ^r ^e Æ e l e ^c t i n ^g , ^e ^v ^a l u ^a t i n ^g ^a ⁿ ^d ^r ^e ^m ^o ^v i n ^g ^d i r ^e ^c t o ^r ^s . ^L i s ^t t h ^e ^c ^o ^m ^p ^e t e ⁿ ^t ^b ^o ^d i e ^s ^a ⁿ ^d t h ^e ^p ^r ^o ^c ^e ^s ^s ^e ^s ^a ⁿ ^d ^c ^r i t e ^r i a ^u ^s ^e ^d f o ^r ^e ^a ^c ^h ^o ^f t h ^e ^s ^e ^p ^r ^o ^c ^e ^d ^u ^r ^e ^s .

^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^h ^a ^s ^a ^d i r e ^c t o ^r ^s ^e l e ^c t i o ⁿ ^P ^o l i ^c ^y , ^w ^h ⁱ ^c ^h ^w ^a ^s ^a ^p ^p r o ^v ^e ^d ^b ^y t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^o ⁿ ² ⁰ ^J ^a ⁿ ^u ^a ^r ^y ² ⁰ 1 6 , ^a ⁿ ^d ^u ^p ^d ^a t e ^d ^b ^y ^B ^o ^a r d ^a ^g r e ^e ^m ^e ⁿ ^t ^o ^f ^D ^e ^c ^e ^m ^b ^e ^r ² ⁰ , ² ⁰ 1 8 . I t ^w ^a ^s ^d ^e ^s ⁱ ^g ⁿ ^e ^d ^w i t h t h ^e ^f ^o l l o ^w i n ^g ^o b j ^e ^c t i ^v ^e ^s i n ^m i n ^d :

^a . ^B ^e i n ^g ^c ^o ⁿ ^c r e t e ^a ⁿ ^d ^v ^e r i ^f i a ^b l e .
^b . ^A ^s ^s ^u r i n ^g t h ^a ^t r e ^s ^o l u t i o ⁿ ^s t o ^a ^p ^p ^o i n ^t ^o ^r r e ï e l e ^c ^t ^d i r e ^c t o ^r ^s ^a r e ^u ⁿ ^d ^e r p i n ⁿ ^e ^d ^b ^y ^p r i o ^r ^a ⁿ ^a ^l ^y ^s ⁱ ^s ^o ^f t h ^e ^B ^o ^a r d ' s ⁿ ^e ^e ^d ^s .
^c . ^D ^u ^l ^y ^f ^o ^s t e r i n ^g ^d ⁱ ^v ^e ^r ^s i t ^y i n t e r m ^s ^o ^f ^s ^k i l l ^s , ^b ^a ^c ^k ^g r o ^u ⁿ ^d ^s ^a ⁿ ^d ^g ^e ⁿ ^d ^e r .

. ^M ^a ^k i n ^g ^a ^c ^o ⁿ ^c ^e r t e ^d ^e f f ^o r t t o ^e ⁿ ^s ^u r e t h ^a ^t ^b ^y ² ⁰ ² ⁰ ^a ^t l e ^a ^s ^t ³ ⁰ % ^o ^f ^a l l ^m ^e ^m ^b ^e ^r ^s ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^a r e ^f ^e ^m ^a l e .

^T ^h ^e ^c r i t e r i a ^s ^e ^t ^d ^o ^w ⁿ i n t h ^a ^t ^p ^o l i ^c ^y ^a r e t h ^e ^f ^o l l o ^w i n ^g :

¹ . ^D i r ^e ^c t o ^r ^a ^p t i t u ^d ^e ^s

^D i r e ^c t o ^r ^s ^m ^u ^s ^t ( i ) ^B ^e ^p ^e r s ^o n s o f ^g ^o ^o ^d ^r e p ^u t e ^a ⁿ ^d ^p ^r o f e s ^s i o ⁿ ^a l s t a ⁿ ^d i n g .

^T ^h ^e ^y ^c ^o ^m ^b i n ^e ^p r o ^f ^e ^s ^s i o ⁿ ^a ^l ^a ⁿ ^d ^c ^o ^m ^m ^e ^r ^c i a ^l ^h ^o ⁿ ^o ^u r a ^b i l i t ^y , ^h ^a ^v i n ^g ^s ^h ^o ^w ⁿ ^a ^p ^e ^r ^s ^o ⁿ ^a l , ^c ^o ^m ^m ^e ^r ^c i a ^l ^a ⁿ ^d ^p r o ^f ^e ^s ^s i o ⁿ ^a ^l ^c ^o ⁿ ^d ^u ^c ^t t h ^a ^t ^c ^a ^s ^t ^s ⁿ ^o ^d ^o ^u ^b ^t ^o ⁿ t h ^e i r ^a ^b i l i t ^y t o ^p ^e ^r ^f ^o r m ^a ^s ^o ^u ⁿ ^d ^a ⁿ ^d ^p r u ^d ^e ⁿ ^t ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^o ^f t h ^e ^c ^o ^m ^p ^a ⁿ ^y .

^O ⁿ t h ^e ^o t h ^e ^r ^h ^a ⁿ ^d , ^a ^c ^a ⁿ ^d i d ^a t e ^s ^h ^a l l ^b ^e ^u ⁿ ^d ^e ^r ^s t o ^o ^d t o l a ^c ^k t h ^e ^s ^e ^a t t r i ^b ^u t e ^s ^w ^h ^e ⁿ :

i . ^T ^h ^e ^y ^h ^a ^v ^e ^b ^e ^e ⁿ ^d ^e ^c l a r e ^d ^b ^a ⁿ ^k r u ^p ^t ^o ^r ^a r e ^p ^a r t ^y t o ^a ⁿ i n ^s ^o ^l ^v ^e ⁿ ^c ^y ^a ^g r e ^e ^m ^e ⁿ t , ^w ^h ^e t h ^e ^r i n ^S ^p ^a i n ^o ^r ^a ^b r o ^a ^d , ^w i t h ^o ^u ^t ^h ^a ^v ^e ^b ^e ^e ⁿ ^d ⁱ ^s ^c ^h ^a ^r ^g ^e ^d ^o ^r t h ^e t e r m ^s ^o ^f t h ^e ^a ^g r e ^e ^m ^e ⁿ ^t ^f ^u l l ^y ^c ^o ^m ^p l i e ^d ^w i t h ;
i i . ^T ^h ^e ^y ^a r e ^b ^e i n ^g ^p r o ^s ^e ^c ^u t e ^d ^o r , i n t h ^e ^c ^a ^s ^e ^o ^f t h ^e ^p r o ^c ^e ^e ^d i n ^g ^s r e ^f ^e r r e ^d t o i n t i t l e ^s I I ^a ⁿ ^d I I I ^o ^f ^b ^o ^o ^k I V ^o ^f ^S ^p ^a i n ' s ^C r i m i n ^a ^l ^P r o ^s ^e ^c ^u t i o ⁿ ^A ^c t , ^h ^a ^v ^e ^b ^e ^e ⁿ i n ^d ⁱ ^c t e ^d ;
i i i . ^T ^h ^e ^y ^h ^a ^v ^e ^a ^c r i m i n ^a ^l r e ^c ^o r d ^f ^o ^r ^a ⁿ ^y ^o ^f t h ^e ^f ^o l l o ^w i n ^g ^c r i m ^e ^s : ^f r a ^u ^d , t a ^x ^e ^v ^a ^s i o ⁿ , ^c r i m i n ^a ^l ^b ^a ⁿ ^k r u ^p ^t ^c ^y , ^d ⁱ ^s l o ^y ^a ^l ^c ^u ^s t o ^d ^y ^o ^f ^d ^o ^c ^u ^m ^e ⁿ ^t ^s , t h ^e ^f ^t ^o ^f t r a ^d ^e ^s ^e ^c r e ^t ^s , ^m ^o ⁿ ^e ^y l a ^u ⁿ ^d ^e r i n ^g , ^e ^m ^b ^e ^z ^z l e ^m ^e ⁿ ^t ^o ^f ^p ^u ^b l i ^c ^f ^u ⁿ ^d ^s , t h ^e ^d ⁱ ^s ^c ^o ^v ^e ^r ^y ^a ⁿ ^d ^d ⁱ ^s ^c l o ^s ^u r e ^o ^f t r a ^d ^e ^s ^e ^c r e ^t ^s , ^p r o ^p ^e r t ^y ï r e l a t e ^d ^c r i m ^e ; ^o ^r
i v . ^T ^h ^e ^y ^h ^a ^v ^e ^b ^e ^e ⁿ ^b ^a ⁿ ⁿ ^e ^d ^o ^r ^s ^u ^s ^p ^e ⁿ ^d ^e ^d , ^u ⁿ ^d ^e ^r ^c r i m i n ^a ^l ^o ^r ^a ^d ^m i n ⁱ ^s t r a t i ^v ^e l a ^w , ^f r o ^m ^h ^o l d i n ^g ^p ^u ^b l i ^c ^o f f ⁱ ^c ^e ^o ^r ^f r o ^m ^a ^d ^m i n ⁱ ^s t e r i n ^g ^o ^r ^m ^a ⁿ ^a ^g i n ^g ^f i n ^a ⁿ ^c i a ^l i n ^s t i t u t i o ⁿ ^s .

I n t h ^e ^c ^a ^s ^e ^o ^f l e ^g ^a l ï p ^e ^r ^s ^o ⁿ ^d i r e ^c t o ^r ^s , t h ^e ^a ^b ^o ^v ^e r e ^q ^u i r e ^m ^e ⁿ ^t ^s ^m ^u ^s ^t ^b ^e ^m ^e ^t ^b ^y ^b ^o t h t h ^e ⁿ ^a t u r a ^l ^p ^e ^r ^s ^o ⁿ r e ^p r e ^s ^e ⁿ t i n ^g t h ^e l a t t e ^r ^a ⁿ ^d t h ^e l e ^g ^a l ï p ^e ^r ^s ^o ⁿ ^d i r e ^c t o ^r i t ^s ^e ^l ^f .

( i i ) ^H ^a ^v ^e ^a ^d ^e ^q ^u ^a t e e x ^p ^e ^r t i s ^e ^a ⁿ ^d e x ^p ^e ^r i e ⁿ ^c ^e t o ^c ^a ^r r y ^o ^u ^t t h ^e i r ^d ^u t i e s

^T ^h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^m ^u ^s ^t ^c ^o ^m ^p r i ^s ^e ^p r o ^f ^e ^s ^s i o ⁿ ^a ^l ^s ^w i t h ^a ^d ^e ^q ^u ^a t e ^e ^x ^p ^e r t i ^s ^e ^a ⁿ ^d ^e ^x ^p ^e r i e ⁿ ^c ^e . ^H ^o ^w ^e ^v ^e r , i t ⁱ ^s ⁿ ^o ^t ⁿ ^e ^c ^e ^s ^s ^a ^r ^y ^f ^o ^r ^a l l ^d i r e ^c t o ^r ^s t o ^p ^o ^s ^s ^e ^s ^s t h ^e ^s ^a ^m ^e l e ^v ^e ^l ^o ^f ^e ^x ^p ^e r t i ^s ^e ^a ⁿ ^d ^e ^x ^p ^e r i e ⁿ ^c ^e ^s ^o l o ⁿ ^g ^a ^s t h ^e ^b ^o ^a r d ^a ^s ^a ^w ^h ^o l e ^h ^a ^s t h ^e r i ^g ^h ^t ^c ^o ^m ^b i n ^a t i o ⁿ ^o ^f ^b ^o t h .

( i i i ) ^B ^e i n ^a ^p o s i t i o ⁿ t o ^g ^o ^v ^e ^r ⁿ t h ^e ^c ^o ^m ^p ^a n y ^w ^e l l

^T ^h ^e ^d i r e ^c t o ^r ^s ^m ^u ^s ^t ^b ^e i n ^a ^p ^o ^s i t i o ⁿ t o ^d ⁱ ^s ^c ^h ^a ^r ^g ^e t h ^e i r ^d ^u t i e ^s ^a ⁿ ^d ^c ^o ^m ^p ^l ^y ^w i t h t h ^e i r l e ^g ^a l l ^y ^ï i m ^p ^o ^s ^e ^d ^a ⁿ ^d ^b ^y l a ^w ^ï ^s t i p ^u l a t e ^d ^d ^u t i e ^s ^w i t h ^d ^u ^e ^d i l i ^g ^e ⁿ ^c ^e , ^b ^e ^a r i n ^g i n ^m i n ^d t h ^e ⁿ ^a t u r e ^o ^f t h ^e ^p ^o ^s i t i o ⁿ ^a ⁿ ^d t h ^e ^d ^u t i e ^s ^a ^s ^s ^o ^c i a t e ^d ^w i t h ^e ^a ^c ^h . ^T ^o t h ⁱ ^s ^e ⁿ ^d t h ^e ^y ^m ^u ^s ^t :

i . ^D ^e ^v ^o t e ^s ^u f f ⁱ ^c i e ⁿ ^t t i m ^e t o t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^a ⁿ ^d ^a ^d ^o ^p ^t ^a ^p ^p r o ^p r i a t e ^m ^e ^a ^s ^u r e ^s ^f ^o ^r ^e ⁿ ^s ^u r i n ^g i t ^s ^c ^o r r e ^c ^t ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^a ⁿ ^d ^c ^o ⁿ t r o l .
i i . ^G ^e ^t ^f r o ^m t h ^e ^C ^o ^m ^p ^a ⁿ ^y t h ^e l e ^v ^e ^l ^o ^f i n ^f ^o r m ^a t i o ⁿ t h ^e ^y ⁿ ^e ^e ^d t o ^c ^o r r e ^c t l ^y ^f ^u ^l ^f i l t h ^e i r ^o ^b l i ^g ^a t i o ⁿ ^s .
i i i . ^D ^e ^v ^o t e ^s ^u f f ⁱ ^c i e ⁿ ^t t i m ^e t o ^b ^e ^c ^o ^m i n ^g i n ^f ^o r m ^e ^d , t o ^f ^a ^m i l i a r i ^s i n ^g t h ^e ^m ^s ^e ^l ^v ^e ^s ^w i t h t h ^e ^C ^o ^m ^p ^a ⁿ ^y ' s ^p ^a r a ^d ⁱ ^g ^m ^a ⁿ ^d ^b ^u ^s i n ^e ^s ^s ^p ^e ^r ^f ^o r m ^a ⁿ ^c ^e ^a ⁿ ^d t o ^p ^a r t i ^c i p ^a t i n ^g i n t h ^e ^m ^e ^e t i n ^g ^s ^o ^f t h ^e ^b ^o ^a r d ^a ⁿ ^d ^a ⁿ ^y ^o ^f t h ^e ^c ^o ^m ^m i t t e ^e ^s ^o ⁿ ^w ^h ⁱ ^c ^h t h ^e ^y ^s i t .
i v . I n ^f ^o r m t h ^e ^o t h ^e ^r ^m ^e ^m ^b ^e ^r ^s ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^o ^f ^a ⁿ ^y ^d i r e ^c ^t ^o ^r i n ^d i r e ^c ^t ^c ^o ⁿ ^f l i ^c ^t ^s t h ^e ^y ^o ^r t h ^e i r r e l a t e ^d ^p ^a r t i e ^s ^m ^a ^y ^h ^a ^v ^e ^v ⁱ ^s ^ï ^à ^ï ^v i s t h ^e ^C ^o ^m ^p ^a ⁿ ^y ' s i n t e r e ^s ^t ^s .

² . ^F ^o ^s t e ^r i n ^g t h ^e ^d i v ^e ^r ^s i t y i n t h ^e ^o ^a ^r ^d ^o ^f ^D i r ^e ^c t o ^r ^s

^T ^h ^e ^c ^o ^m ^p ^o ^s i t i o ⁿ ^o ^f t h ^e ^B ^o ^a r d ^a ⁿ ^d i t ^s ^C ^o ^m ^m i t t e ^e ^s ^m ^u ^s ^t ^a ^l ^s ^o ^b ^e t a ^k ^e ⁿ i n t o ^a ^c ^c ^o ^u ⁿ ^t ^d ^u r i n ^g t h ^e ^s ^e l e ^c t i o ⁿ ^p r o ^c ^e ^s ^s , ^b ^e i n ^g ⁿ ^e ^c ^e ^s ^s ^a ^r ^y t o ^c ^o ⁿ ^s i d ^e ^r ^D i r e ^c t o ^r ^s ^w i t h ^s ^u f f ⁱ ^c i e ⁿ ^t ^d ⁱ ^v ^e ^r ^s i t ^y i n ^e ^d ^u ^c ^a t i o ⁿ , ^e ^x ^p ^e r i e ⁿ ^c ^e ^a ⁿ ^d ^k ⁿ ^o ^w l e ^d ^g ^e , ^g ^e ⁿ ^d ^e r , ^a ^g ^e ^o ^r ^d ⁱ ^s ^a ^b i l i t ^y i n ^o r d ^e ^r t o ^c ^o ^m ^p ^l ^y ^w i t h t h ^e l e ^g ^a ^l r e ^q ^u i r e ^m ^e ⁿ ^t ^s ^a ^s ^w ^e l l ^a ^s t h ^e ^g ^o ^o ^d ^g ^o ^v ^e r n ^a ⁿ ^c ^e r e ^c ^o ^m ^m ^e ⁿ ^d ^a t i o ⁿ ^s i n r e l a t i o ⁿ t o t h ^e ^c ^o ^m ^p ^o ^s i t i o ⁿ .

I n t h ⁱ ^s r e ^g ^a r d , t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^w i l l ^e ⁿ ^s ^u r e t h ^a ^t ^p r o ^c ^e ^d ^u r e ^s ^a r e i n l i n ^e ^w i t h t h ^e ^a ^b ^o ^v ^e ^a ⁿ ^d ^w i l l ^p r o ^m ^o t e t h ^e ² ⁰ ² ⁰ ^g ^o ^a ^l ^o ^f ^b ^e i n ^g ^a ^t l e ^a ^s ^t ³ ⁰ % ^o ^f t h ^e ^B ^o ^a r d ^f ^e ^m ^a l e , ^e ⁿ ^s ^u r i n ^g ^a ^t t h ^e ^s ^a ^m ^e t i m ^e t h ^e ^c ^u l t u r a ^l ^d ⁱ ^v ^e ^r ^s i t ^y ^a ⁿ ^d i n t e r n ^a t i o ⁿ ^a ^l ^e ^x ^p ^e r i e ⁿ ^c ^e .

³ . ^D i r ^e ^c t o ^r ^s ^e l e ^c t i o ⁿ ^a ⁿ ^d ^a ^p ^p ^o i n ^t ^m ^e ⁿ ^t ^p ^r ^o ^c ^e ^d ^u ^r ^e

^T ^h ^e ^p r o ^c ^e ^s ^s ^o ^f ^s ^e l e ^c t i n ^g ^a ⁿ ^d ^a ^p ^p ^o i n t i n ^g ^d i r e ^c t o ^r ^s ⁱ ^s ^a r t i ^c ^u l a t e ^d ^a r o ^u ⁿ ^d ^f ^o ^u ^r ^k ^e ^y ^s t e ^p ^s :

³ . ¹ . ^P ^r ^o ^p ^o ^s ^a ^l

^T ^h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^m ^u ^s ^t ^f i r ^s ^t ^a ⁿ ^a ^l ^y ^s ^e t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ' s ⁿ ^e ^e ^d ^s , ^s ^e t t i n ^g ^o ^u ^t i t ^s ^f i n ^d i n ^g ^s i n ^a ⁿ ^e ^x ^p l a ⁿ ^a t o ^r ^y r e ^p ^o r t ^w ^h ⁱ ^c ^h i t ^w i l l ^p ^u ^b l i ^s ^h ^o ⁿ t h ^e ^o ^c ^c ^a ^s i o ⁿ ^o ^f t h ^e ^c ^a l l t o t h ^e ^A ⁿ ⁿ ^u ^a ^l ^G ^e ⁿ ^e r a ^l ^M ^e ^e t i n ^g ^a ^t ^w ^h ⁱ ^c ^h t h ^e ^s ^h ^a r e ^h ^o l d ^e ^r ^s ^w i l l ^b ^e ^a ^s ^k ^e ^d t o r a t i f y t h ^e ^a ^p ^p ^o i n t m ^e ⁿ ^t ^o ^r r e ï e l e ^c t i o ⁿ ^o ^f ^e ^a ^c ^h ^d i r e ^c t o r , t o ^w ^h ⁱ ^c ^h ^e ⁿ ^d :

ⁱ . I t ^w i l l ^e ^v ^a l u ^a t e t h ^e ^u ⁿ ⁱ ^v ^e ^r ^s ^e ^o ^f ^s ^k i l l ^s , ^k ⁿ ^o ^w l e ^d ^g ^e ^a ⁿ ^d ^e ^x ^p ^e r i e ⁿ ^c ^e ⁿ ^e ^e ^d ^e ^d ^o ⁿ t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s . ^A ^g ^a i n ^s ^t t h ⁱ ^s ^b ^a ^c ^k ^d r o ^p , i t ^w i l l ^d ^e ^f i n ^e t h ^e ^d ^u t i e ^s ^a ⁿ ^d ^a ^p t i t u ^d ^e ^s r e ^q ^u i r e ^d ^o ^f t h ^e ^c ^a ⁿ ^d i d ^a t e ^s t o ^f i l l ^e ^a ^c ^h ^v ^a ^c ^a ⁿ ^c ^y ^a ⁿ ^d ^a ^s ^s ^e ^s ^s t h ^e t i m ^e ^a ⁿ ^d ^d ^e ^d ⁱ ^c ^a t i o ⁿ ⁿ ^e ^e ^d ^e ^d ^s ^o t h ^a ^t t h ^e ^y ^c ^a ⁿ ^d ^u ^l ^y ^p ^e ^r ^f ^o r m t h ^e i r r e ^m i t .

i i . I t ^w i l l ^e ^s t a ^b l i ^s ^h ^a t a ^r ^g ^e t e ^d l e ^v ^e ^l ^o ^f r e ^p r e ^s ^e ⁿ t a t i o ⁿ ^f ^o ^r t h ^e ^g ^e ⁿ ^d ^e ^r i n ^m i n ^o r i t ^y ^o ⁿ t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^a ⁿ ^d ^w i l l ^e ^s t a ^b l i ^s ^h ^g ^u i d ^e l i n ^e ^s ^f ^o ^r ^h ^o ^w t o ^a ^c ^h i e ^v ^e t h ⁱ ^s t a ^r ^g ^e t .

³ . ² . ^C ^a ⁿ ^d i d ^a ^c ^y ^p ^r ^e ^s ^e ⁿ t a t i o ⁿ

^C ^a ⁿ ^d i d ^a t e ^s ^m ^u ^s ^t ^p r e ^s ^e ⁿ ^t t h ^e i n ^f ^o r m ^a t i o ⁿ i t e ^m ⁱ ^s ^e ^d ^b ^e l o ^w ^a ^t ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ' s ^h ^e ^a ^d ^o f f ⁱ ^c ^e . ^T ^h ^e ^d ^o ^c ^u ^m ^e ⁿ ^t ^s ^m ^u ^s ^t ^b ^e ^e i t h ^e ^r ^o r i ^g i n ^a ^l ^o ^r ^c ^e r t i ^f i e ^d ^c ^o ^p i e ^s ^a ⁿ ^d t h ^e i n ^f ^o r m ^a t i o ⁿ ^p ^a ^c ^k ^a ^g ^e ^s ^h ^o ^u l d ^b ^e ^a ^d ^d r e ^s ^s ^e ^d t o t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e .

ⁱ . ^N ^a t u r a ^l ^p ^e ^r ^s ^o ⁿ ^s : ^a ^p ^h ^o t o ^c ^o ^p ^y ^o ^f t h ^e i r ⁿ ^a t i o ⁿ ^a ^l i d ^e ⁿ t i t ^y ^c ^a r d ^o ^r ^p ^a ^s ^s ^p ^o r t ^a ⁿ ^d i n ^f ^o r m ^a t i o ⁿ ^a ^b ^o ^u ^t t h ^e i r ^e f f ^e ^c t i ^v ^e ^p l a ^c ^e ^o ^f r e ^s i d ^e ⁿ ^c ^e , ^e ï m ^a i l ^a ^d ^d r e ^s ^s ^a ⁿ ^d ^c ^o ⁿ t a ^c ^t t e l e ^p ^h ^o ⁿ ^e ⁿ ^u ^m ^b ^e ^r ( ^s ) .

i i . ^L ^e ^g ^a ^l ^p ^e ^r ^s ^o ⁿ ^s : ^a ^p ^h ^o t o ^c ^o ^p ^y ^o ^f t h ^e ^c ^o r r e ^s ^p ^o ⁿ ^d i n ^g ^d ^e ^e ^d ^s ^o ^f i n ^c ^o r p ^o r a t i o ⁿ , t h ^e ^c ^o ⁿ ^s ^o l i d ^a t e ^d t e ^x ^t ^o ^f t h ^e ^p r e ^v ^a i l i n ^g ^b ^y l a ^w ^s , ^e ï m ^a i l ^a ^d ^d r e ^s ^s ^a ⁿ ^d ^c ^o ⁿ t a ^c ^t t e l e ^p ^h ^o ⁿ ^e ⁿ ^u ^m ^b ^e ^r ( ^s ) .

i i i . ^C ^e r t i ^f ⁱ ^c ^a t i o ⁿ ^o ^f ^f ^a ^m i l i a r i t ^y ^w i t h t h ^e ^c ^o ^m ^p ^a ⁿ ^y ' s ^A r t i ^c l e ^s ^o ^f ^A ^s ^s ^o ^c i a t i o ⁿ ^a ⁿ ^d ^o t h ^e ^r i n t e r n ^a ^l r u l e ^s ^a ⁿ ^d r e ^g ^u l a t i o ⁿ ^s ^a ⁿ ^d ^a ^c ^c ^e ^p t a ⁿ ^c ^e ^o ^f t h ^e i r t e r m ^s ^a ⁿ ^d ^c ^o ⁿ ^d i t i o ⁿ ^s .

i v . ^C ^e r t i ^f ⁱ ^c ^a t i o ⁿ ^o ^f ^p ^o ^s ^s ^e ^s ^s i o ⁿ ^o ^f ^a ^d ^e ^q ^u ^a t e ^e ^x ^p ^e r t i ^s ^e ^a ⁿ ^d ^e ^x ^p ^e r i e ⁿ ^c ^e .

. ^C ^e r t i ^f ⁱ ^c ^a t i o ⁿ ^o ^f r e ^a ^d i n ^e ^s ^s ^a ⁿ ^d ^a ^b i l i t ^y t o ^g ^o ^v ^e r n t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^w ^e l l .

^v ⁱ . ^C ^e r t i ^f ⁱ ^c ^a t i o ⁿ ^o ^f t h ^e r e ^p ^u t a t i o ⁿ ^a ⁿ ^d ^p r o ^f ^e ^s ^s i o ⁿ ^a ^l ^s t a ⁿ ^d i n ^g r e ^q ^u i r e ^d i n t h ⁱ ^s ^p ^o l i ^c ^y .

³ . ³ . ^E ^v ^a l u ^a t i o ⁿ ^o ^f t h ^e ^c ^a ⁿ ^d i d ^a ^c ^y

^H ^a ^v i n ^g ^v ^e r i ^f i e ^d t h ^e ^d ^o ^c ^u ^m ^e ⁿ t a t i o ⁿ r e ^c ^e ⁱ ^v ^e ^d ^a ⁿ ^d ^o ⁿ ^c ^e t h ^e ^s ^e ^v ^e ⁿ ^w ^o r k i n ^g ^d ^a ^y ^p ^e r i o ^d ^f ^o ^r ^c ^o r r e ^c t i n ^g ^o ^r ^c l a r i f y i n ^g t h ^e i n ^f ^o r m ^a t i o ⁿ ^f ^u r n ⁱ ^s ^h ^e ^d ^h ^a ^s ^e l a ^p ^s ^e ^d , ⁱ ^f r e ^q ^u i r e ^d , t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^h ^a ^s ^s ^e ^v ^e ⁿ ^w ^o r k i n ^g ^d ^a ^y ^s ^a ^t ^m ^o ^s ^t t o ⁱ ^s ^s ^u ^e i t ^s ^e ^x ^p l a ⁿ ^a t o ^r ^y r e ^p ^o r t ^a ⁿ ^d ^f ^o l l o ^w t h ^e ^p r o ^c ^e ^d ^u r e ^d ^e ^s ^c r i ^b ^e ^d ⁿ ^e ^x ^t :

ⁱ . I n t h ^e ^e ^v ^e ⁿ ^t t h ^a ^t t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^b ^e l i e ^v ^e ^s t h ^a ^t t h ^e ^c ^a ⁿ ^d i d ^a t e ^p r e ^s ^e ⁿ ^t ^s t h ^e r e ^q ^u i r e ^d ^a ^p t i t u ^d ^e ^s , i t ^w i l l ^s ^u ^b ^m i t ^a ^p r o ^p ^o ^s ^a ^l ^f ^o ^r ^h ⁱ ^s / h ^e ^r ^a ^p ^p ^o i n t m ^e ⁿ t / r e ï e l e ^c t i o ⁿ ^a ^c ^c ^o ^m ^p ^a ⁿ i e ^d ^b ^y ^a ^c ^o ^p ^y ^o ^f t h ^e i n ^f ^o r m ^a t i o ⁿ r e ^c ^e ⁱ ^v ^e ^d t o t h ^e ^B ^o ^a r d

^o ^f ^D i r e ^c t o ^r ^s .

i i . ^I ^f t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e : ( ^a ) ^h ^a ^s r e ^a ^s ^o ⁿ ^a ^b l e ^d ^o ^u ^b ^t ^s ^a ^b ^o ^u ^t ^w ^h ^e t h ^e ^r t h ^e ^p r o ^p ^o ^s ^e ^d ^c ^a ⁿ ^d i d ^a t e ^m ^e ^e ^t ^s ^a l l ^o ^f t h ^e r e ^q ^u i r e ^m ^e ⁿ ^t ^s ^e ⁿ ^v ⁱ ^s ^a ^g ^e ^d i n t h ⁱ ^s ^p ^o l i ^c ^y ^o ^r i n ^a ^p ^p l i ^c ^a ^b l e l e ^g ⁱ ^s l a t i o ⁿ ; ( ^b ) ^f ^e ^e ^l ^s t h ^a ^t t h ^e ^a ^p ^p ^o i n t m ^e ⁿ ^t ^o ^f t h ^e ^p r o ^p ^o ^s ^e ^d ^c ^a ⁿ ^d i d ^a t e ^c ^o ^u l d i m ^p ^l ^y ^s ^u ^b ^s t a ⁿ t i a ^l i m ^p ^a i r m ^e ⁿ ^t ^o ^f t h ^e ^e ^x ^p ^e r t i ^s ^e ^a ⁿ ^d ^e ^x ^p ^e r i e ⁿ ^c ^e ^o ^f t h ^e ^m ^e ^m ^b ^e ^r ^s ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^a ^p ^p r a ⁱ ^s ^e ^d ^a ^s ^a ^w ^h ^o l e ; ^o ^r ( ^c ) ^b ^e l i e ^v ^e ^s t h ^a ^t t h ^e ^p r o ^p ^o ^s ^e ^d ^c ^a ⁿ ^d i d ^a t e ^d ^o ^e ^s ⁿ ^o ^t ^m ^e ^e ^t ^o ⁿ ^e ^o ^r ^m ^o r e ^o ^f t h ^e r e ^q ^u i r e ^m ^e ⁿ ^t ^s ^e ^s t a ^b l i ^s ^h ^e ^d i n t h ⁱ ^s ^p ^o l i ^c ^y ^o ^r ^a ^p ^p l i ^c ^a ^b l e l e ^g ⁱ ^s l a t i o ⁿ ^f ^o ^r ^q ^u ^a l i ^f ⁱ ^c ^a t i o ⁿ ^a ^s ^a ^p ^t ^f ^o ^r t h ^e ^p ^o ^s t , i t ^s ^h ^a l l ^s ^e ⁿ ^d t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^a r e ^p ^o r t ^s ^u ^b ^s t a ⁿ t i a t i n ^g t h ^e ^c i r ^c ^u ^m ^s t a ⁿ ^c ^e ^s ^w ^h ⁱ ^c ^h i n i t ^s ^o ^p i n i o ⁿ ^c ^a ^s ^t ^d ^o ^u ^b ^t ^o ^v ^e ^r t h ^e ^c ^a ⁿ ^d i d ^a t e ' s ^s ^u i t a ^b i l i t ^y ^o ^r ^g ⁱ ^v ^e r i ^s ^e t o i t ^s ⁿ ^e ^g ^a t i ^v ^e ^a ^s ^s ^e ^s ^s ^m ^e ⁿ t , ^a ^c ^c ^o ^m ^p ^a ⁿ i e ^d ^b ^y ^a ^c ^o ^p ^y ^o ^f t h ^e i n ^f ^o r m ^a t i o ⁿ r e ^c ^e ⁱ ^v ^e ^d .

³ . ⁴ . ^A ^p ^p ^o i n ^t ^m ^e ⁿ ^t

^T ^h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s t h ^e ⁿ ^h ^a ^s ³ ⁰ ^w ^o r k i n ^g ^d ^a ^y ^s t o ^a ⁿ ^a ^l ^y ^s ^e t h ^e ^d i r e ^c t o ^r ^a ^p ^p ^o i n t m ^e ⁿ ^t ^p r o ^p ^o ^s ^a ^l ^s ^m ^a ^d ^e ^b ^y t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^a ^f t e ^r ^w ^h ⁱ ^c ^h i t ^m ^u ^s ^t ^s ^u ^b ^m i t t h ^e ^c ^o r r e ^s ^p ^o ⁿ ^d i n ^g r e ^s ^o l u t i o ⁿ ^s t o t h ^e ^s ^h ^a r e ^h ^o l d ^e ^r ^s ^f ^o ^r ^a ^p ^p r o ^v ^a ^l i n ^g ^e ⁿ ^e r a ^l ^m ^e ^e t i n ^g .

I n t h ^e ^e ^v ^e ⁿ ^t ^o ^f r e ï e l e ^c t i o ⁿ ^o ^f ^d i r e ^c t o ^r ^s , t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^w i l l ^e ^v ^a l u ^a t e , ^b ^e ^f ^o r e ^p r o ^p ^o ^s i n ^g t h ^e r e ï e l e ^c t i o ⁿ ^o ^f ^d i r e ^c t o ^r ^s t o t h ^e ^G ^e ⁿ ^e r a ^l ^M ^e ^e t i n ^g ^o ^f ^S ^h ^a r e ^h ^o l d ^e ^r ^s ^a ⁿ ^d ^w i t h t h ^e ^a ^b ^s t e ⁿ t i o ⁿ ^o ^f t h ^e ^a f f ^e ^c t e ^d ^d i r e ^c t o ^r ^s , t h ^e ^q ^u ^a l i t ^y ^o ^f t h ^e ^w ^o r k ^a ⁿ ^d t h ^e ^d ^e ^d ⁱ ^c ^a t i o ⁿ ^o ^f t h ^e ^d i r e ^c t o ^r ^s ^p r o ^p ^o ^s ^e ^d ^d ^u r i n ^g t h ^e ^p r e ^c ^e ^d i n ^g ^m ^a ⁿ ^d ^a t e .

I n t h ^e ^e ^v ^e ⁿ ^t ^o ^f ^d i r e ^c t o ^r ^a ^p ^p ^o i n t m ^e ⁿ ^t ^s ^b ^y ^m ^e ^a ⁿ ^s ^o ^f ^c ^o ï o ^p t i o ⁿ , t h ^e ^p r o ^c ^e ^d ^u r e ^d ^e ^s ^c r i ^b ^e ^d ^a ^b ^o ^v ^e ^m ^u ^s ^t ^b ^e ^f ^o l l o ^w ^e ^d ^a ⁿ ^d t h ^e ^a ^p ^p ^o i n t m ^e ⁿ ^t ^m ^u ^s ^t ^b ^e r a t i ^f i e ^d ^a ^t t h ^e ^f i r ^s ^t ^A ⁿ ⁿ ^u ^a ^l ^G ^e ⁿ ^e r a ^l ^M ^e ^e t i n ^g ^c ^e l e ^b r a t e ^d ^a ^f t e ^r t h ^e ^a ^p ^p ^o i n t m ^e ⁿ t . ^T ^h ^e ^c ^o r r e ^s ^p ^o ⁿ ^d i n ^g ^m ^o t i o ⁿ ^m ^u ^s ^t ^b ^e ^a ^c ^c ^o ^m ^p ^a ⁿ i e ^d ^b ^y ^a ⁿ ^e ^x ^p l a ⁿ ^a t o ^r ^y r e ^p ^o r t ⁱ ^s ^s ^u ^e ^d ^b ^y t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e , ^w ^h ⁱ ^c ^h ^m ^u ^s ^t ^b ^e ^p ^u ^t i n t h ^e ^p ^u ^b l i ^c ^d ^o ^m ^a i n i n ^c ^o ⁿ ^j ^u ⁿ ^c t i o ⁿ ^w i t h t h ^e ^G ^e ⁿ ^e r a ^l ^M ^e ^e t i n ^g ^c ^a l l ⁿ ^o t i ^c ^e .

^A ^t t h ^e t i m ^e ^o ^f ^a ^p ^p ^o i n t m ^e ⁿ ^t ^o ^f ^a ⁿ ^e ^w ^d i r e ^c t o r , ^h ^e ^m ^u ^s ^t ^f ^o l l o ^w ^a t r a i n i n ^g ^p r o ^g r a ^m ^f ^o ^r ⁿ ^e ^w ^d i r e ^c t o ^r ^s ^e ^s t a ^b l i ^s ^h ^e ^d ^b ^y t h ^e ^C ^o ^m ^p ^a ⁿ ^y , ^s ^o t h ^a ^t ^h ^e ^c ^a ⁿ ^a ^c ^q ^u i r e ^a ^q ^u ⁱ ^c ^k ^a ⁿ ^d ^s ^u f f ⁱ ^c i e ⁿ ^t ^k ⁿ ^o ^w l e ^d ^g ^e ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y , ^a ^s ^w ^e l l ^a ^s i t ^s ^c ^o r p ^o r a t e ^g ^o ^v ^e r n ^a ⁿ ^c ^e r u l e ^s .

⁴ . ^D i r ^e ^c t o ^r ^e ^v ^a l u ^a t i o ⁿ ^a ⁿ ^d ^r ^e ^m ^o ^v ^a ^l

^D i r e ^c t o ^r ^e ^v ^a l u ^a t i o ⁿ ^s ^h ^a l l t a ^k ^e t w ^o ^f ^o r m ^s :

ⁱ . ^A ⁿ ⁿ ^u ^a ^l ^a ^s ^s ^e ^s ^s ^m ^e ⁿ ^t ^o ^f ^d i r e ^c t o ^r ^q ^u ^a l i ^f ⁱ ^c ^a t i o ⁿ ^s : ^E ^v ^e ^r ^y ^y ^e ^a r , i n t h ^e ^m ^o ⁿ t h ^o ^f ^J ^a ⁿ ^u ^a ^r ^y , t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^w i l l ^s ^e ⁿ ^d ^a l l t h ^e ^d i r e ^c t o ^r ^s ^a ^q ^u ^e ^s t i o ⁿ ⁿ ^a i r e , t h ^e ^p ^u r p ^o ^s ^e ^o ^f ^w ^h ⁱ ^c ^h ⁱ ^s t o ^v ^e r i f y t h ^a ^t t h ^e ^y ^c ^o ⁿ t i n ^u ^e t o ^m ^e ^e ^t t h ^e ^a ^p t i t u ^d ^e ^s r e ^q ^u i r e ^d ^o ^f t h ^e ^p ^o ^s t . ^T ^h ^e ^d i r e ^c t o ^r ^s ^h ^a ^v ^e 1 5 ^c ^a l e ⁿ ^d ^a ^r ^d ^a ^y ^s t o ^f i l l ^o ^u t , ^s ⁱ ^g ⁿ ^a ⁿ ^d r e t u r n t h ^e ^f ^o r m . ^T ^h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^w i l l t h ^e ⁿ ^a ⁿ ^a ^l ^y ^s ^e t h ^e ^a ⁿ ^s ^w ^e ^r ^s r e ^c ^e ⁱ ^v ^e ^d ^a ⁿ ^d ^p r o ^c ^e ^e ^d ^a ^s ^f ^o l l o ^w ^s i n t h ^e ^e ^v ^e ⁿ ^t i t ^d ^e t e ^c ^t ^s ^a ⁿ i n ^c i d ^e ⁿ ^t i n t h ⁱ ^s r e ^s ^p ^e ^c t .
i i . ^A ^d ï h ^o ^c ^a ^s ^s ^e ^s ^s ^m ^e ⁿ ^t i n t h ^e ^e ^v ^e ⁿ ^t ^o ^f ^s ^p ^e ^c i a ^l ^c i r ^c ^u ^m ^s t a ⁿ ^c ^e ^s : ^E ^a ^c ^h ^d i r e ^c t o ^r ⁱ ^s i n ^d ⁱ ^v i d ^u ^a l l ^y r e ^s ^p ^o ⁿ ^s ⁱ ^b l e ^f ^o ^r ⁿ ^o t i f y i n ^g t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e i m ^m ^e ^d i a t e ^l ^y , i n ^w r i t i n ^g ^a ⁿ ^d i n ^d ^e t a i l ^o ^f ^a ⁿ ^y ^e ^v ^e ⁿ ^t ^o ^r ^c i r ^c ^u ^m ^s t a ⁿ ^c ^e ^s t h ^a ^t ^c ^o ^u l d ^h ^a ^v ^e ^a ^s ⁱ ^g ⁿ ⁱ ^f ⁱ ^c ^a ⁿ ^t i m ^p ^a ^c ^t ^o ⁿ t h ^e ^a ^s ^s ^e ^s ^s ^m ^e ⁿ ^t ^o ^f ^h ⁱ ^s ^o ^r ^h ^e ^r ^s ^u i t a ^b i l i t ^y ^f ^o ^r t h ^e ^p ^o ^s ^t i n t e r m ^s ^o ^f t h ^e ^a ^p t i t u ^d ^e r e ^q ^u i r e ^m ^e ⁿ ^t ^s ^d ^e ^f i n ^e ^d i n t h ⁱ ^s ^p ^o l i ^c ^y ^a ⁿ ^d i n ^p r e ^v ^a i l i n ^g l e ^g ⁱ ^s l a t i o ⁿ . ^T ^h ^e ^d i r e ^c t o ^r ^s ^a r e l i a ^b l e ^f ^o ^r ^a ⁿ ^y ^d ^a ^m ^a ^g ^e ^s t o t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^c ^a ^u ^s ^e ^d ^b ^y ^a ⁿ ^y ^f ^a i l u r e t o r e ^p ^o r t ^o ^r ^d ^e l a ^y i n r e ^p ^o r t i n ^g ^a ⁿ ^y ^c i r ^c ^u ^m ^s t a ⁿ ^c ^e ^s ^a f f ^e ^c t i n ^g ^h ⁱ ^s ^o ^r ^h ^e ^r ^s ^u i t a ^b i l i t ^y .

^W ^h ^e ⁿ ^e ^v ^e ^r t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ⁱ ^s ⁿ ^o t i ^f i e ^d ^o ^f ^c i r ^c ^u ^m ^s t a ⁿ ^c ^e ^s ^w ^h ⁱ ^c ^h ^a ^d ^v ^e ^r ^s ^e ^l ^y ^a f f ^e ^c ^t ^a ^d i r e ^c t o ^r ' s ^s ^u i t a ^b i l i t ^y ^a ^s ^s ^e ^s ^s ^m ^e ⁿ ^t ^o ^r i t l e ^a r n ^s ^o ^f t h ^e i r ^e ^x ⁱ ^s t e ⁿ ^c ^e ^a ^s ^p ^a r t ^o ^f ^a ⁿ ^a ⁿ ⁿ ^u ^a ^l r e ^v i e ^w , i t ^w i l l ^d ^e ^c i d ^e ^w ^h ^e t h ^e ^r ^o ^r ⁿ ^o ^t i t ⁱ ^s ⁿ ^e ^c ^e ^s ^s ^a ^r ^y t o t e ^m ^p ^o r a r i l ^y ^o ^r ^p ^e r m ^a ⁿ ^e ⁿ t l ^y ^s ^u ^s ^p ^e ⁿ ^d t h ^e ^a f f ^e ^c t e ^d ^p ^a r t ^y .

^C . 1 . 2 ⁰ ^E ^x ^p l a i n t h ^e ^e ^x t e ⁿ ^t t o ^w ^h i c ^h t h ^e ^a ⁿ ⁿ ^u ^a ^l ^r ^e ^v i e ^w ^o ^f t h ^e ^b ^o ^a ^r ^d ' ^s ^p ^e ^r f o ^r ^m ^a ⁿ ^c ^e ^h ^a ^s l e ^d t o ⁱ ^m ^p ^o ^r t a ⁿ ^t ^c ^h ^a ⁿ ^g ^e ^s i n t e ^r ^m ^s ^o ^f i t s i n t e ^r ⁿ ^a ^l ^o ^r ^g ^a ⁿ ⁱ ^z ^a t i o ⁿ ^a ⁿ ^d t h ^e ^p ^r ^o ^c ^e ^d ^u ^r ^e ^s ^a ^p ^p l i c ^a ^b l e t o i t s ^a ^c t i v i t i e ^s :

^A ^s ^a ^c ^o ⁿ ^s ^e ^q ^u ^e ⁿ ^c ^e ^o ^f t h ^e ^e ^v ^a l u ^a t i o ⁿ ^p r o ^c ^e ^s ^s ^c ^a r r i e ^d ^o ^u t , ^a ⁿ ^d i n ^a ^c ^c ^o r d ^a ⁿ ^c ^e ^w i t h t h ^e ^b ^e ^s ^t ^C ^o r p ^o r a t e ^G ^o ^v ^e r n ^a ⁿ ^c ^e ^p r a ^c t i ^c ^e ^s , t h ^e r e ^c ^o ^m ^m ^e ⁿ ^d ^a t i o ⁿ ^s ^o ^f t h ^e ^C ^N ^M ^V i n ^s ^e ^c t i o ⁿ ³ ^o ^f t h ^e ^T ^h i r d ^S ^e ^c t i o ⁿ ^o ^f ^T ^e ^c ^h ⁿ ⁱ ^c ^a ^l ^G ^u i d ^e 1 / 2 ⁰ 1 9 , t h ^e ^g ^e ⁿ ^e r a ^l r e ^q ^u ^e ^s ^t ^s ^o ^f ^s t a ^k ^e ^h ^o l d ^e ^r ^s ^a ⁿ ^d , ^a ^s ^p r o ^v i d ^e ^d i n ^a r t i ^c l e ⁵ ^o ^f t h ^e ⁿ ^e ^w ^R ^e ^g ^u l a t i o ⁿ ^s ^o ^f t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e , t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^C ^o ^m ^m i t t e ^e ^h ^a ^s ^b ^e ^e ⁿ ^w ^o r k i n ^g ^d ^u r i n ^g ² ⁰ 1 9 , i n ^c ^o ^o r d i n ^a t i o ⁿ ^w i t h ^a l l t h ^e ^m ^e ^m ^b ^e ^r ^s ^o ^f t h ^e ^B ^o ^a r d , i n t h ^e ^a ⁿ ^a ^l ^y ^s ⁱ ^s ^o ^f t h ^e ^c ^o ^m ^p ^o ^s i t i o ⁿ ^o ^f t h ^e ^B ^o ^a r d , ^a ^s ^w ^e l l ^a ^s i n t h ^e ^p r e ^p ^a r a t i o ⁿ ^o ^f ^a ^m ^a t r i ^x t h ^a ^t ^d ^e ^f i n ^e ^s t h ^e ⁿ ^e ^c ^e ^s ^s ^a ^r ^y ^c ^o ^m ^p ^e t e ⁿ ^c ^e ^s ^o ^f t h ^e ^B ^o ^a r d ^f ^o ^r t h ^e ^p r o ^p ^e ^r ^f ^u ⁿ ^c t i o ⁿ i n ^g ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^a ⁿ ^d t h ^e ^m ^a i n ^s ^k i l l ^s ^a ⁿ ^d ^k ⁿ ^o ^w l e ^d ^g ^e ^o ^f t h ^e ^D i r e ^c t o ^r ^s . I n t h ⁱ ^s ^c ^o ⁿ t e ^x t , ^a ^t t h ^e ^e ⁿ ^d ^o ^f t h ^e ^y ^e ^a r , t h ^e ^f ^o l l o ^w i n ^g ^c ^o ^m ^p ^e t e ⁿ ^c ^y ^m ^a t r i ^x ^w ^a ^s ^a ^p ^p r o ^v ^e ^d t h ^a ^t ^s ^u ^m ^m ^a r i ^z ^e ^s i n ^a ^v ^e ^r ^y ^s ^y ⁿ t h ^e t i ^c ^w ^a ^y t h ^e ^c ^a ^p ^a ^c i t i e ^s t h ^a ^t t h ^e ^B ^o ^a r d ^c ^o ⁿ ^s i d ^e ^r ^s ^m ^o ^s ^t r e l e ^v ^a ⁿ ^t ^f ^o ^r t h ^e ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y , ^p ^o i n t i n ^g ^o ^u ^t t h ^e ^m ^o ^s ^t ^o ^u ^t ^s t a ⁿ ^d i n ^g ^a ^s ^p ^e ^c ^t ^s ^o ^f t h ^e ^p r o ^f i l e ^o ^f ^e ^a ^c ^h ^o ^f t h ^e ^D i r e ^c t o ^r ^s . ^T ^h ⁱ ^s ^m ^a t r i ^x i n ⁿ ^o ^w ^a ^y r e ^f l e ^c ^t ^s t h ^e ^e ⁿ t i r e ^c ^a ^p ^a ^c i t ^y ^o ^f t h ^e ^m ^e ^m ^b ^e ^r ^s ^o ^f t h ^e ^B ^o ^a r d , ^b ^u ^t ^o ⁿ ^l ^y t h ^o ^s ^e i n ^e ^a ^c ^h ^o ^f t h ^e ^D i r e ^c t o ^r ^s ^c ^a ⁿ ^b ^e ^c ^o ⁿ ^s i d ^e r e ^d ^e ^x ^p ^e r t , ^a ^m ^o ⁿ ^g t h ^o ^s ^e ^p r e ^v i o ^u ^s ^l ^y ^d ^e ^f i n ^e ^d ^a ^s ^e ^s ^s ^e ⁿ t i a l .

	P o s i t i o n / i t t e e s C o m m	t i o n i t y a l N a	S e c t o r i a l : s t t e / R e a l E R e t i / a t i n g s R a l a	S e c t o r i A r c h i t e c t u :r e / a l T o w n n n i n g / p l a n g i n e e r i n g	I T	F i n n c e a	A u d i t / R i s k s
J o s e L u i s D e V e l a l l i r m ( C h n ) a a	e c u t i v e o n i r m N C h E x n I n d e a e n d e n t / a p b e r A & M C C e m	n i s h S p a		E X		X	X
e t i c i L I g e s i a s l a	I n d e e n d e n t p i r e c t o r / D i r m C h n A & a C C a	n i s h S p a				X	X
I s b e e r A g u i a l l a	I n d e e n d e n t p i r e c t o r / D e m A & C C m b e r	n i s h S p a		X	X	X
R o g e r C o o k e	I n d e e n d e n t p i r e c t o r / D i r m C h n A & a R C a	r i t i s h B	X
i g u e M P e r e d l a	P r o i e t r y p i r e c t o r / D a e m A & R C m b e r	n i s h S p a	X			X
u r e n t L u c c i o n i L a	P r o i e t r y p i r e c t o r / D a e m A & R C m b e r	F r e n c h	X			X
A e c m m o t l E	I n d e e n d e n t p i r e c t o r / D e m A & b e r R C m	r i t i s h B	X

^C ^a ^p ^a ^b i l i t ^y ^M ^a t r i ^x ^o ⁿ t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^o ^f ^L ^a ^r ^E ^s ^p ^a ^ñ ^a

^C ^a ^p ^a ^b i l i t ^y ^M ^a t r i ^x ^o ⁿ t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^o ^f ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ( ^c ^o ⁿ t i n ^u ^a t i o ⁿ )

	I n t e r n t i o n	t h e r O	I n v e s t o r /	T e m n d	S G	F u n c t i o n s o f f i r s t
	a l m r k e t a	i r e c t o r s D	s t d e r k e h o	a a t e n t	E	e c u t i v e / C e O
	a		e d g e k n o w a l	e n t m n a l g e m		x E
J o s e L u i s D e	X	X	l X	a a	X	X
V e l
a l l i r m ( C h n )

e t i c i L	X	X	X	X		X
I g e s i a s
l b a I s e	X	X		X		X
e r A g u i a l
R o g e r C o o k e l a	X			X	X	X
i g u e P e r e d M	X		X	X	X	X
u r e n t l a L	X	X	X			X
u c c i o n i L a
A e c m m o t	X	X	X		X	X

^C . 1 . 2 ⁰ . ^b i s ^D ^e ^s ^c ^r ⁱ ^b ^e t h ^e ^e ^v ^a l u ^a t i o ⁿ ^p ^r ^o ^c ^e ^s ^s ^a ⁿ ^d t h ^e ^a ^r ^e ^a ^s ^e ^v ^a l u ^a t e ^d ^b ^y t h ^e ^b ^o ^a ^r ^d , ^w i t h t h ^e ^a ^s ^s i s t a ⁿ ^c ^e ^o ^f ^a ⁿ ^e ^x t e ^r ⁿ ^a ^l f a ^c i l i t a t o ^r ^a ^s t h ^e ^c ^a ^s ^e ^m ^a ^y ^b ^e , ^w i t h ^r ^e ^s ^p ^e ^c ^t t o t h ^e ^d i v ^e ^r ^s i t y ^o ^f i t s ^m ^e ^m ^b ^e ^r ^s ^h i p ^a ⁿ ^d ^c ^o ^m ^p ^e t e ⁿ ^c ^e ^s , t h ^e ^p ^e ^r f o ^r ^m ^a ⁿ ^c ^e ^a ⁿ ^d ^m ^e ^m ^b ^e ^r ^s ^h i p ^o ^f i t s ^c ^o ^m ^m i t t e ^e ^s , t h ^e ^p ^e ^r f o ^r ^m ^a ⁿ ^c ^e ^o ^f t h ^e ^c ^h ^a i r ^m ^a ⁿ ^o ^f t h ^e ^b ^o ^a ^r ^d ^o ^f ^d i r ^e ^c t o ^r ^s ^a ⁿ ^d t h ^e ^c ^o ^m ^p ^a ⁿ ^y ' ^s ^c ^h i e ^f ^e ^x ^e ^c ^u t i v ^e ^a ⁿ ^d t h ^e ^p ^e ^r f o ^r ^m ^a ⁿ ^c ^e ^a ⁿ ^d ^c ^o ⁿ t r ⁱ ^b ^u t i o ⁿ ^o ^f ^e ^a ^c ^h i n ^d i v i d ^u ^a ^l ^d i r ^e ^c t o ^r .

^A r t i ^c l e 1 8 ^o ^f t h ^e ^R ^e ^g ^u l a t i o ⁿ ^s ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^e ^s t a ^b l i ^s ^h ^e ^s t h ^a ^t t h ^e ^B ^o ^a r d ^w i l l ^e ^v ^a l u ^a t e i t ^s ^p ^e ^r ^f ^o r m ^a ⁿ ^c ^e ^o ⁿ ^c ^e ^a ^y ^e ^a ^r ^a ⁿ ^d ^a ^d ^o ^p t , ⁱ ^f ⁿ ^e ^c ^e ^s ^s ^a ^r ^y , ^a ⁿ ^a ^c t i o ⁿ ^p l a ⁿ t h ^a ^t ^c ^o r r e ^c ^t ^s ^d ^e ^f ⁱ ^c i e ⁿ ^c i e ^s i n :

· ^T ^h ^e ^q ^u ^a l i t ^y ^a ⁿ ^d ^e f f ⁱ ^c i e ⁿ ^c ^y ^o ^f t h ^e ^f ^u ⁿ ^c t i o ⁿ i n ^g ^o ^f t h ^e ^B ^o ^a r d
· ^D ⁱ ^v ^e ^r ^s i t ^y i n t h ^e ^c ^o ^m ^p ^o ^s i t i o ⁿ ^a ⁿ ^d ^c ^o ^m ^p ^e t e ⁿ ^c ^e ^s ^o ^f t h ^e ^B ^o ^a r d .
· ^T ^h ^e ^p ^e ^r ^f ^o r m ^a ⁿ ^c ^e ^o ^f t h ^e ^C ^h ^a i r m ^a ⁿ ^o ^f t h ^e ^B ^o ^a r d .
· ^T ^h ^e ^p ^e ^r ^f ^o r m ^a ⁿ ^c ^e ^a ⁿ ^d ^c ^o ⁿ t r i ^b ^u t i o ⁿ ^o ^f ^e ^a ^c ^h ^d i r e ^c t o r , ^p ^a ^y i n ^g ^s ^p ^e ^c i a ^l ^a t t e ⁿ t i o ⁿ t o t h ^o ^s ^e r e ^s ^p ^o ⁿ ^s ⁱ ^b l e ^f ^o ^r t h ^e ^d ⁱ f f ^e r e ⁿ ^t ^c ^o ^m ^m i t t e ^e ^s ^o ^f t h ^e ^B ^o ^a r d .
· ^T ^h ^e ^o ^p ^e r a t i o ⁿ ^a ⁿ ^d ^c ^o ^m ^p ^o ^s i t i o ⁿ ^o ^f t h ^e ^B ^o ^a r d ^c ^o ^m ^m i t t e ^e ^s .

I n ^a ^d ^d i t i o ⁿ , ^a r t i ^c l e 1 8 ^o ^f t h ^e ^R ^e ^g ^u l a t i o ⁿ ^s ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s , ^p t . 3 ^s t a t e ^s t h ^a ^t ^e ^v ^e ^r ^y t h r e ^e ^y ^e ^a ^r ^s t h ^e ^B ^o ^a r d ^w i l l ^b ^e ^a ^s ^s ⁱ ^s t e ^d t o ^c ^a r r ^y ^o ^u ^t ^s ^u ^c ^h ^e ^v ^a l u ^a t i o ⁿ ^b ^y ^a ⁿ ^e ^x t e r n ^a ^l ^c ^o ⁿ ^s ^u l t a ⁿ t .

I n t h ⁱ ^s ^c ^o ⁿ t e ^x t , i n ² ⁰ 1 9 t h ^e ^B ^o ^a r d , ^a ^f t e ^r r e ^q ^u ^e ^s t i n ^g t h r e ^e ^d ⁱ f f ^e r e ⁿ ^t ^p r o ^p ^o ^s ^a ^l ^s ^f r o ^m i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^e ^x ^p ^e r t ^s , ^a ^p ^p r o ^v ^e ^d t h ^e ^h i r i n ^g ^o ^f ^a ⁿ ^e ^x t e r n ^a ^l ^c ^o ⁿ ^s ^u l t a ⁿ ^t t o ^c ^a r r ^y ^o ^u ^t t h ^e ^e ^v ^a l u ^a t i o ⁿ ^o ^f t h ^e ^f ^u ⁿ ^c t i o ⁿ i n ^g ^o ^f t h ^e ^B ^o ^a r d i n ² ⁰ 1 8 , ^a l l ^u ⁿ ^d ^e ^r t h ^e ^c ^o ^o r d i n ^a t i o ⁿ ^a ⁿ ^d ^s ^u ^p ^e ^r ^v ⁱ ^s i o ⁿ ^o ^f t h ^e ^C ^h ^a i r m ^a ⁿ ^o ^f t h ^e ^B ^o ^a r d ^a ⁿ ^d i n ^c ^o ^o r d i n ^a t i o ⁿ ^w i t h t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e .

· ^F i r ^s t , t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^C ^o ^m ^m i t t e ^e ^a ⁿ ^a ^l ^y ^z ^e ^d t h ^a ^t t h ^e r e ^w ^e r e ⁿ ^o ^c ^o ⁿ ^f l i ^c ^t ^s ^o ^f i n t e r e ^s ^t ^w i t h t h ^e ^s ^e l e ^c t e ^d ^c ^o ⁿ ^s ^u l t a ⁿ ^t ( ^G ^e ^o ^r ^g ^e ^s ^o ⁿ ) t h ^a ^t ^c ^o ^u l d ^u ⁿ ^d ^e r m i n ^e i t ^s i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^c ^e . ^A ^f t e ^r ^v ^e r i f y i n ^g t h ^a ^t ^G ^e ^o ^r ^g ^e ^s ^o ⁿ ^p r o ^v i d ^e ^s ^a ^d ^v ⁱ ^s ^o ^r ^y ^s ^e ^r ^v ⁱ ^c ^e ^s t o t h ^e ^D ^e ^p ^a r t m ^e ⁿ ^t ^o ^f I n ^v ^e ^s t o ^r ^a ⁿ ^d ^S ^h ^a r e ^h ^o l d ^e ^r ^R ^e l a t i o ⁿ ^s ^o ^f ^L ^a ^r ^E ^s ^p ^a ^ñ ^a i n ^m ^a t t e ^r ^s ^o ^f i d ^e ⁿ t i ^f ⁱ ^c ^a t i o ⁿ ^o ^f ^s ^h ^a r e ^h ^o l d ^e ^r ^s , ^p r o ^x ^y ^s ^o l i ^c i t a t i o ⁿ ^o ⁿ t h ^e ^B ^o ^a r d ^a ⁿ ^d ^o ^r ^g ^a ⁿ ⁱ ^z ^a t i o ⁿ ^o ^f r o ^a ^d ^s ^h ^o ^w ^s i n t h ^e ^m ^a t t e ^r ^o ^f ^E ^S ^G , i t ^w ^a ^s ^v ^e r i ^f i e ^d t h ^a ^t i n ⁿ ^o ^c ^a ^s ^e ^h ^a ^s ^G ^e ^o ^r ^g ^e ^s ^o ⁿ ^h ^a ^s ^b ^e ^e ⁿ i n ^v ^o ^l ^v ^e ^d i n ^p r o ^c ^e ^s ^s ^e ^s ^o ^f ^s ^e l e ^c t i o ⁿ ^o ^r ^a ^p ^p ^o i n t m ^e ⁿ ^t ^o ^f ^a ^d i r e ^c t o ^r ^o ^r i n ^m ^a t t e ^r ^s r e l a t e ^d t o r e ^m ^u ⁿ ^e r a t i o ⁿ . ^A ^f t e ^r i n ^f ^o r m i n ^g t o t h ^e ^B ^o ^a r d ^o ^f ^s ^u ^c ^h ^a ⁿ ^d ^c ^o ⁿ ^f i r m i n ^g t h ^a ^t t h ^e r e ⁱ ^s ⁿ ^o r e ^a ^s ^o ⁿ t o ^u ⁿ ^d ^e r m i n ^e i t ^s i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^c ^e , t h ^e ^c ^o ⁿ t r a ^c t i n ^g ^o ^f ^G ^e ^o ^r ^g ^e ^s ^o ⁿ ^w ^a ^s ^a ^p ^p r o ^v ^e ^d t o ^c ^a r r ^y ^o ^u ^t t h ^e ^e ^v ^a l u ^a t i o ⁿ ^o ^f t h ^e ^B ^o ^a r d .
· ^R ^e ^g ^a r d i n ^g t h ^e ^m ^e t h ^o ^d ^o l o ^g ^y ^u ^s ^e ^d , ^G ^e ^o ^r ^g ^e ^s ^o ⁿ , ^a ^s ^a ⁿ ^e ^x t e r n ^a ^l ^a ^d ^v ⁱ ^s ^o r , ^h ^a ^s l e ^d t h ^e ^e ^v ^a l u ^a t i o ⁿ ^p r o ^c ^e ^s ^s ^o ^f t h ^e ^B ^o ^a r d , i t ^s ^m ^e ^m ^b ^e ^r ^s ^a ⁿ ^d i t ^s ^C ^o ^m ^m i t t e ^e ^s , ^w i t h t h ^e ^c ^o l l a ^b ^o r a t i o ⁿ ^o ^f t h ^e ^S ^e ^c r e t a ^r ^y ^o ^f t h ^e ^B ^o ^a r d ^a ⁿ ^d t h ^e ^D ^e ^p ^u ^t ^y ^S ^e ^c r e t a ^r ^y i n ^p ^a r t ^o ^f t h ^e ^p r o ^c ^e ^s ^s i n ^o r d ^e ^r t o ^e ⁿ ^s ^u r e ^o b j ^e ^c t i ^v i t ^y ^a ⁿ ^d ^c ^o ⁿ ^f i d ^e ⁿ t i a l i t ^y t h ^e r e ^o f ; ^a l w ^a ^y ^s i n

^c ^o l l a ^b ^o r a t i o ⁿ ^w i t h t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^C ^o ^m ^m i t t e ^e ^a ⁿ ^d ^u ⁿ ^d ^e ^r t h ^e ^s ^u ^p ^e ^r ^v ⁱ ^s i o ⁿ ^a ⁿ ^d ^o ^r ^g ^a ⁿ ⁱ ^z ^a t i o ⁿ ^o ^f t h ^e ^C ^h ^a i r m ^a ⁿ ^o ^f t h ^e ^B ^o ^a r d .

^F i r ^s t , ^e ^a ^c ^h ^m ^e ^m ^b ^e ^r ^o ^f t h ^e ^B ^o ^a r d ^w ^a ^s ^p ^e ^r ^s ^o ⁿ ^a l l ^y i n t e ^r ^v i e ^w ^e ^d ^b ^y ^G ^e ^o ^r ^g ^e ^s ^o ⁿ , ^g ^a t h ^e r i n ^g t h ^e ^c ^o ⁿ ^c l u ^s i o ⁿ ^s ^o ^f t h ⁱ ^s ^a ⁿ ^a ^l ^y ^s ⁱ ^s i n t h ^e ^d ^o ^c ^u ^m ^e ⁿ ^t " I n t e ^r ^v i e ^w ^s ^A ⁿ ^a ^l ^y ^s ⁱ ^s " . ^L i k ^e ^w ⁱ ^s ^e , t h ^e ^m ^o ^s ^t r e l e ^v ^a ⁿ ^t i n ^v ^e ^s t o ^r ^s ^a ⁿ ^d ^p r o ^x ^y ^a ^d ^v ⁱ ^s ^o ^r ^s , ^c ^o ^m ^p l e t e ^d ^s ^o ^m ^e ^q ^u ^e ^s t i o ⁿ ⁿ ^a i r e ^s ^e l a ^b ^o r a t e ^d ^b ^y ^G ^e ^o ^g ^e ^s ^o ⁿ , ^w ^h ⁱ ^c ^h ^s ^y ^s t e ^m ^a t i ^z ^e ^d t h ^e i n ^f ^o r m ^a t i o ⁿ ^e ^x t r a ^c t e ^d ^f r o ^m t h ^e ^q ^u ^e ^s t i o ⁿ ⁿ ^a i r e ^s , ^c ^o l l e ^c t i n ^g ^a l l t h i s i n t h ^e ^d ^o ^c ^u ^m ^e ⁿ ^t " ^P ^e r c ^e ^p t i o ⁿ ^A ⁿ ^a l y ^s i s " . ^A ^d ^d i t i o ⁿ ^a l l y , t h ^e i n t e r n ^a ^l ^s t r u ^c t u r e ^a ⁿ ^d ^f ^u ⁿ ^c t i o ⁿ i n ^g ^o ^f t h ^e ^B ^o ^a r d ^a ⁿ ^d ^C ^o ^m ^m i t t e ^e ^s ^w ^e r e ^a ⁿ ^a ^l ^y ^z ^e ^d ^a ⁿ ^d ^a ^c ^o ^m ^p ^a r a t i ^v ^e ^e ^x ^e ^r ^c ⁱ ^s ^e ^w ^a ^s ^c ^a r r i e ^d ^o ^u ^t ^w i t h ^o t h ^e ^r ^c ^o ^m ^p ^a r a ^b l e ^c ^o ^m ^p ^a ⁿ i e ^s ( ⁿ ^a t i o ⁿ ^a ^l ^a ⁿ ^d i n t e r n ^a t i o ⁿ ^a ^l ) ^o ^f t h ^e ^m ^a i n ^c ^o r p ^o r a t e ^g ^o ^v ^e r n ^a ⁿ ^c ^e ^p ^a r a ^m ^e t e ^r ^s .

· ^T ^h ^e ^e ^v ^a l u ^a t i o ⁿ ^c ^a r r i e ^d ^o ^u ^t i n ² ⁰ 1 9 ^h ^a ^s ^a ⁿ ^a ^l ^y ^z ^e ^d t h ^e ^f ^o l l o ^w i n ^g ⁱ ^s ^s ^u ^e ^s : ( ⁱ ) ^s t r u ^c t u r e ^a ⁿ ^d ^o ^p ^e r a t i o ⁿ ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^o ^f ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ; ( i i ) t h ^e ^p ^e ^r ^c ^e ^p t i o ⁿ ^s ^a ⁿ ^d ^v ^a l u ^a t i o ⁿ ^s ^o ^f ^e ^a ^c ^h ^o ^f t h ^e ^d i r e ^c t o ^r ^s , t h ^e ^c ^h ^a i r m ^e ⁿ ^o ^f t h ^e ^B ^o ^a r d ^a ⁿ ^d ^C ^o ^m ^m i t t e ^e ^s ^a ⁿ ^d t h ^e ^s ^e ^c r e t a r i a ^t ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y ; ( i i i ) t h ^e ^p ^e ^r ^c ^e ^p t i o ⁿ ^o ^f t h ^e ^m ^o ^s ^t r e l e ^v ^a ⁿ ^t i n ^v ^e ^s t o ^r ^s ^a ⁿ ^d ^p r o ^x ^y ^a ^d ^v ⁱ ^s ^o ^r ^s ; ^a ⁿ ^d ( ⁱ ^v ) t h ^e ^m ^a i n ^p ^a r a ^m ^e t e ^r ^s ^o ^f ^c ^o r p ^o r a t e ^g ^o ^v ^e r n ^a ⁿ ^c ^e ^w i t h r e ^s ^p ^e ^c ^t t o ^c ^o ^m ^p ^a r a ^b l e ^c ^o ^m ^p ^a ⁿ i e ^s .
· ^T ^h ^e ^m ^a i n ^c ^o ⁿ ^c l u ^s i o ⁿ ^o ^f t h ^e ^e ^v ^a l u ^a t i o ⁿ ^p r o ^c ^e ^s ^s ^w ^a ^s t h ^a ^t t h ^e ^B ^o ^a r d ^a ⁿ ^d ^C ^o ^m ^m i t t e ^e ^s ^h ^a ^d ^w ^o r k ^e ^d ^e f f ⁱ ^c i e ⁿ t l ^y ^d ^u r i n ^g ² ⁰ 1 8 , t h ^e ^B ^o ^a r d ⁱ ^s i n ^v ^e ^r ^y ^g ^o ^o ^d ^s ^h ^a ^p ^e , ⁱ ^s ^b ^a l a ⁿ ^c ^e ^d ^a ⁿ ^d i n ^a ^c ^c ^o r d ^a ⁿ ^c ^e ^w i t h t h ^e ^b ^e ^s ^t ^c ^o r p ^o r a t e ^g ^o ^v ^e r n ^a ⁿ ^c ^e ^p r a ^c t i ^c ^e ^s . I t ⁱ ^s ^a ^w ^e l l ^c ^o ^h ^e ^s ⁱ ^v ^e ^B ^o ^a r d , t h ^e ^p ^o ^s i t i ^v ^e ^p ^e ^r ^c ^e ^p t i o ⁿ t h ^a ^t ^a l l t h ^e ^d i r e ^c t o ^r ^s ^h ^a ^v ^e r e ^g ^a r d i n ^g t h ^e ^C ^h ^a i r m ^a ⁿ ^o ^f t h ^e ^B ^o ^a r d ^a ⁿ ^d t h ^e ^p ^e ^r ^f ^o r m ^a ⁿ ^c ^e ^o ^f t h ^e i r ^d ^u t i e ^s ^b ^e i n ^g ^u ⁿ ^a ⁿ i m ^o ^u ^s . I n ^p ^a r t i ^c ^u l a r , ^b ^o t h t h ^e ^c ^o ^m ^p ^o ^s i t i o ⁿ ( ^d ⁱ ^v ^e ^r ^s i t ^y , ^k ⁿ ^o ^w l e ^d ^g ^e ^a ⁿ ^d ^e ^x ^p ^e r i e ⁿ ^c ^e ^o ^f t h ^e ^m ^e ^m ^b ^e ^r ^s ^o ^f t h ^e ^B ^o ^a r d ^a ⁿ ^d t h ^e i r ^C ^o ^m ^m i t t e ^e ^s ^a ⁿ ^d , i n ^p ^a r t i ^c ^u l a r , ^o ^f t h ^e i r ^C ^h ^a i r m ^a ⁿ ^s , ^d ^e ^d ⁱ ^c ^a t i o ⁿ ^a ⁿ ^d ^c r i t i ^c ^a ^l ^a t t i t u ^d ^e t h ^e r e ^o ^f ) ^a ⁿ ^d t h ^e ^f ^u ⁿ ^c t i o ⁿ i n ^g ^o ^f t h ^e ^B ^o ^a r d ^a ⁿ ^d t h ^e ^C ^o ^m ^m i t t e ^e ^s ( ^f r e ^q ^u ^e ⁿ ^c ^y , ^d ^u r a t i o ⁿ ^a ⁿ ^d ^e f f ^e ^c t i ^v ^e ⁿ ^e ^s ^s ^o ^f t h ^e i r ^m ^e ^e t i n ^g ^s , ^a t t e ⁿ ^d ^a ⁿ ^c ^e ^a ^t ^m ^e ^e t i n ^g ^s ^o ^f t h ^e i r ^m ^e ^m ^b ^e ^r ^s , ^a ^g ^e ⁿ ^d ^a ^o ^f t h ^e ^m ^e ^e t i n ^g ^s , ^e ^x ^e ^r ^c ⁱ ^s ^e ^o ^f t h ^e i r ^c ^o ^m ^p ^e t e ⁿ ^c ^e ^s , ^a ⁿ ^d ^a ^d ^v ⁱ ^c ^e , i n ^c l u ^d i n ^g ^e ^x t e r n ^a ^l ^a ^d ^v ⁱ ^c ^e ⁱ ^f ⁿ ^e ^c ^e ^s ^s ^a ^r ^y ) ^w ^e r e ^a ^s ^s ^e ^s ^s ^e ^d ^v ^e ^r ^y ^p ^o ^s i t i ^v ^e ^l ^y . I t ^w ^a ^s ^a ^l ^s ^o ^f ^o ^u ⁿ ^d t h ^a ^t t h ^e ^C ^o ^m ^p ^a ⁿ ^y ⁱ ^s ^a ^b ^e ⁿ ^c ^h ^m ^a r k ^f ^o ^r ^c ^o ^m ^p l i a ⁿ ^c ^e ^a ⁿ ^d i m ^p l e ^m ^e ⁿ t a t i o ⁿ ^o ^f t h ^e ^m ^a i n ^c ^o r p ^o r a t e ^g ^o ^v ^e r n ^a ⁿ ^c ^e ^p ^a r a ^m ^e t e ^r ^s .
· ^A r e ^a ^s ^o ^f i m ^p r o ^v ^e ^m ^e ⁿ ^t ^w ^e r e ^d ^e t e ^c t e ^d , ^s ^u ^c ^h ^a ^s t h ^e ⁿ ^e ^e ^d t o ^d ^e ^v ^e l o ^p ^a ^m ^a t r i ^x ^o ^f ^c ^a ^p ^a ^b i l i t i e ^s ^o ^f t h ^e ^B ^o ^a r d , r e ^v i e ^w t h ^e r e ^m ^u ⁿ ^e r a t i o ⁿ ^o ^f t h ^e ^M ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t t e ^a ^m ^a ⁿ ^d t h ^e ^D i r e ^c t o ^r ^s , ^d ^e ^l ^v ^e i n t o t h ^e ^s ^u ^c ^c ^e ^s ^s i o ⁿ ^p l a ⁿ ^s , t h ^e i m ^p l e ^m ^e ⁿ t a t i o ⁿ ^o ^f t h ^e ⁿ ^e ^w t e ^c ^h ⁿ ⁱ ^c ^a ^l ^g ^u i d ^e ^o ^f t h ^e ^C ^N ^M ^V ^o ⁿ ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^C ^o ^m ^m i t t e ^e ^s , ^a ^s ^s ^e ^s ^s t h ^e ^a ^d ^v ⁱ ^s ^a ^b i l i t ^y ^o ^f ^a ^p ^p ^o i n t i n ^g ^a ^v ⁱ ^c ^e ^C ^h ^a i r m ^a ⁿ ^o ^r t h ^e ^o b j ^e ^c t i ^v ^e t h ^a ^t ^m ^o r e t h ^a ⁿ ⁵ ⁰ % ^o ^f t h ^e ^m ^e ^m ^b ^e ^r ^s ^o ^f t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^s ^C ^o ^m ^m i t t e ^e ^w ^e r e i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ t .
· ^T ^h ^e ^B ^o ^a r d ^a ^p ^p r o ^v ^e ^d ^a ⁿ ^a ^c t i o ⁿ ^p l a ⁿ t o ^c ^o ^m ^p ^l ^y ^w i t h t h ^e ^s ^e ^a ⁿ ^d ^o t h ^e ^r r e ^c ^o ^m ^m ^e ⁿ ^d ^a t i o ⁿ ^s t h ^a ^t ^h ^a ^v ^e ^a l r e ^a ^d ^y ^b ^e ^e ⁿ i m ^p l e ^m ^e ⁿ t e ^d . ^T ^h ^u ^s , ^a ^m ^o ⁿ ^g ^o t h ^e ^r ⁱ ^s ^s ^u ^e ^s , t h ^e ^f ^o l l o ^w i n ^g ^w ^a ^s ^a ^d ^d r e ^s ^s ^e ^d i n ² ⁰ 1 9 : ( ⁱ ) t h ^e ^a ^d ^e ^q ^u ^a ^c ^y ^o ^f t h ^e r e ^m ^u ⁿ ^e r a t i o ⁿ ^o ^f ^b ^o t h i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^D i r e ^c t o ^r ^s ^a ⁿ ^d ^S ^e ⁿ i o ^r ^E ^x ^e ^c ^u t i ^v ^e ^s ^h ^a ^s ^b ^e ^e ⁿ r e ^v i e ^w ^e ^d , ( i i ) ^a ⁿ ^a ^m ^e ⁿ ^d ^m ^e ⁿ ^t t o t h ^e ^B ^o ^a r d ^R ^e ^g ^u l a t i o ⁿ ^s ^a ⁿ ^d t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e ^R ^e ^g ^u l a t i o ⁿ ^s ^h ^a ^s ^b ^e ^e ⁿ ^a ^p ^p r o ^v ^e ^d , ( i i i ) ^a ⁿ ^e ^w ^R ^e ^g ^u l a t i o ⁿ ^o ^f t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^h ^a ^s ^b ^e ^e ⁿ ^a ^p ^p r o ^v ^e ^d ; ( ⁱ ^v ) i t ^h ^a ^s ^d ^e ^e ^p ^e ⁿ ^e ^d ⁱ ^s ^s ^u ^e ^s ^s ^u ^c ^h ^a ^s ^s ^u ^c ^c ^e ^s ^s i o ⁿ ^p l a ⁿ ^s ^o ^r t h ^e ^c ^o ⁿ ^v ^e ⁿ i e ⁿ ^c ^e ^o ^f ^a ^p ^p ^o i n t i n ^g ^a ^v ⁱ ^c ^e ^C ^h ^a i r m ^a ⁿ ; ^a ⁿ ^d ( ^v ) ^a ^c ^o ^m ^p ^e t e ⁿ ^c ^y ^m ^a t r i ^x ^o ^f t h ^e ^B ^o ^a r d ^h ^a ^s ^b ^e ^e ⁿ ^d ^e ^v ^e l o ^p ^e ^d ^a ⁿ ^d ^a ^p ^p r o ^v ^e ^d .
^C . ¹ . ² ⁰ . t e ^r ^G i v ^e ^a ^b ^r ^e ^a ^k ^d ^o ^w ⁿ , ^a ^s t h ^e ^c ^a ^s ^e ^m ^a ^y ^b ^e , ^o ^f t h ^e ^b ^u ^s i n ^e ^s ^s ^d ^e ^a l i n ^g ^s t h ^a ^t t h ^e f a ^c i l i t a t o ^r ^o ^r ^a ⁿ ^y ^c ^o ^m ^p ^a ⁿ ^y i n i t s ^c ^o ^r ^p ^o ^r ^a t e ^g ^r ^o ^u ^p ^m ^a i n t a i n ^s ^w i t h t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^o ^r ^a ⁿ ^y ^c ^o ^m ^p ^a ⁿ ^y i n i t s ^c ^o ^r ^p ^o ^r ^a t e ^g ^r ^o ^u ^p .

^G ^e ^o ^r ^g ^e ^s ^o ⁿ ^p r o ^v i d ^e ^s ^a ^d ^v ⁱ ^s ^o ^r ^y ^s ^e ^r ^v ⁱ ^c ^e ^s t o t h ^e ^D ^e ^p ^a r t m ^e ⁿ ^t ^o ^f I n ^v ^e ^s t o ^r ^R ^e l a t i o ⁿ ^s ^o ^f ^L ^a ^r

^E ^s ^p ^a ^ñ ^a i n ^m ^a t t e ^r ^s ^o ^f i d ^e ⁿ t i ^f ⁱ ^c ^a t i o ⁿ ^o ^f ^s ^h ^a r e ^h ^o l d ^e ^r ^s , ^p r o ^x ^y ^s ^o l i ^c i t a t i o ⁿ ^a ^t t h ^e ^M ^e ^e t i n ^g ^a ⁿ ^d ^o ^r ^g ^a ⁿ ⁱ ^z ^a t i o ⁿ ^o ^f r o ^a ^d ^s ^h ^o ^w ^s i n t h ^e ^m ^a t t e ^r ^o ^f ^E ^S ^G . I n ⁿ ^o ^c ^a ^s ^e t h ^e ^y ^h ^a ^v ^e ^b ^e ^e ⁿ i n ^v ^o ^l ^v ^e ^d i n t h ^e ^s ^e l e ^c t i o ⁿ ^o ^r ^a ^p ^p ^o i n t m ^e ⁿ ^t ^o ^f ^a ^d i r e ^c t o ^r ^o ^r i n ^m ^a t t e ^r ^s r e l a t e ^d t o r e ^m ^u ⁿ ^e r a t i o ⁿ ^o ^r i n ^a ⁿ ^y ^o t h ^e ^r ^m ^a t t e ^r ^s r e l a t e ^d t o t h ^e ^B ^o ^a r d ^o ^r ^D i r e ^c t o ^r ^s t h ^a ^t ^c ^o ^u l d ^c ^o ^m ^p r o ^m ⁱ ^s ^e ^y ^o ^u ^r i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^c ^e .

^C . 1 . 2 ¹ ^I ⁿ ^d i c ^a t e t h ^e ^c i r ^c ^u ^m ^s t a ⁿ ^c ^e ^s ^u ⁿ ^d ^e ^r ^w ^h i c ^h ^d i r ^e ^c t o ^r ^s ^a ^r ^e ^o ^b l i g ^e ^d t o ^r ^e ^s i g ⁿ .

^A ^c ^c ^o r d i n ^g t o ^A r t i ^c l e ² ³ ^o ^f t h ^e ^R ^e ^g ^u l a t i o ⁿ ^s ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s :

^T ^h ^e ^d i r e ^c t o ^r ^s ^m ^u ^s ^t ^m ^a ^k ^e t h ^e i r ^p ^o ^s i t i o ⁿ ^a ^v ^a i l a ^b l e t o t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^a ⁿ ^d ^f ^o r m ^a l i ^z ^e , ⁱ ^f ^d ^e ^e ^m ^e ^d ^a ^p ^p r o ^p r i a t e , t h ^e ^c ^o r r e ^s ^p ^o ⁿ ^d i n ^g r e ^s ⁱ ^g ⁿ ^a t i o ⁿ i n t h ^e ^f ^o l l o ^w i n ^g ^c ^a ^s ^e ^s :

^a . ^W ^h ^e ⁿ t h ^e ^y l e ^a ^v ^e t h ^e ^e ^x ^e ^c ^u t i ^v ^e ^p ^o ^s i t i o ⁿ ^s t o ^w ^h ⁱ ^c ^h t h ^e i r ^a ^p ^p ^o i n t m ^e ⁿ ^t ^a ^s ^d i r e ^c t o ^r ^w ^a ^s ^a ^s ^s ^o ^c i a t e ^d .

^b . ^W ^h ^e ⁿ t h ^e ^y ^a r e i n ^v ^o ^l ^v ^e ^d i n ^a ⁿ ^y ^o ^f t h ^e ^c ^a ^s ^e ^s ^o ^f i n ^c ^o ^m ^p ^a t i ^b i l i t ^y ^o ^r ^s t a t u t o ^r ^y ^o ^r ^s t a t u t o ^r ^y ^p r o ^h ⁱ ^b i t i o ⁿ .

^c . ^W ^h ^e ⁿ t h ^e ^y ^a r e ^s ^e r i o ^u ^s ^l ^y ^a ^d ^m ^o ⁿ ⁱ ^s ^h ^e ^d ^b ^y t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^f ^o ^r ^h ^a ^v i n ^g ^b r e ^a ^c ^h ^e ^d t h ^e i r ^o ^b l i ^g ^a t i o ⁿ ^s ^a ^s ^d i r e ^c t o ^r ^s .

^d . ^W ^h ^e ⁿ t h ^e i r ^p ^e r m ^a ⁿ ^e ⁿ ^c ^e ^o ⁿ t h ^e ^B ^o ^a r d ^m ^a ^y ^j ^e ^o ^p ^a r d ⁱ ^z ^e ^o ^r ^d ^a ^m ^a ^g ^e t h ^e i n t e r e ^s ^t ^s , ^c r e ^d i t ^o ^r r e ^p ^u t a t i o ⁿ ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^o ^r ^w ^h ^e ⁿ t h ^e r e ^a ^s ^o ⁿ ^s ^f ^o ^r ^w ^h ⁱ ^c ^h t h ^e ^y ^w ^e r e ^a ^p ^p ^o i n t e ^d ^d ⁱ ^s ^a ^p ^p ^e ^a ^r ( ^f ^o ^r ^e ^x ^a ^m ^p l e , ^w ^h ^e ⁿ ^a ^p r o ^p r i e t a ^r ^y ^d i r e ^c t o ^r ^d ⁱ ^s ^c ^a r d ^s t h ^e i r ^p ^a r t i ^c i p ^a t i o ⁿ i n t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^o ^r r e ^d ^u ^c ^e i t i n ^a r e l e ^v ^a ⁿ ^t ^m ^a ⁿ ⁿ ^e ^r ^a ^s i n ^d ⁱ ^c ^a t e ^d i n ^s ^e ^c t i o ⁿ ^e . ^b ^e l o ^w ) .

^e . ^W ^h ^e ⁿ t h ^e ^y ^a r e ^p ^a r t ^o ^f ^m ^o r e t h ^a ⁿ ^f ^o ^u ^r ^b ^o ^a r d ^s ^o ^f ^d i r e ^c t o ^r ^s ^o ^f ^o t h ^e ^r l i ^s t e ^d ^c ^o ^m ^p ^a ⁿ i e ^s ( ^o t h ^e ^r t h ^a ⁿ t h ^e ^C ^o ^m ^p ^a ⁿ ^y ) .

^f . I n t h ^e ^c ^a ^s ^e ^o ^f ^p r o ^p r i e t a ^r ^y ^d i r e ^c t o ^r ^s ( ⁱ ) ^w ^h ^e ⁿ t h ^e ^s ^h ^a r e ^h ^o l d ^e ^r t h ^e ^y r e ^p r e ^s ^e ⁿ ^t ^s ^e l l ^s i t ^s ^s ^h ^a r e ^h ^o l d i n ^g i n i t ^s ^e ⁿ t i r e ^t ^y ^o ^r r e ^d ^u ^c ^e ^s i t i n ^a r e l e ^v ^a ⁿ ^t ^m ^a ⁿ ⁿ ^e ^r ^a ⁿ ^d , ( i i ) i n t h ^e ^c ^o r r e ^s ^p ^o ⁿ ^d i n ^g ⁿ ^u ^m ^b ^e r , ^w ^h ^e ⁿ ^s ^a i d ^s ^h ^a r e ^h ^o l d ^e ^r r e ^d ^u ^c ^e ^s i t ^s ^s ^h ^a r e ^h ^o l d i n ^g t o ^a l e ^v ^e ^l t h ^a ^t r e ^q ^u i r e ^s t h ^e r e ^d ^u ^c t i o ⁿ ^o ^f t h ^e ⁿ ^u ^m ^b ^e ^r ^o ^f ^p r o ^p r i e t a ^r ^y ^d i r e ^c t o ^r ^s .

I n t h ^e ^e ^v ^e ⁿ ^t t h ^a t , ^b ^y r e ^s ⁱ ^g ⁿ ^a t i o ⁿ ^o ^r ^f ^o ^r ^a ⁿ ^y ^o t h ^e ^r r e ^a ^s ^o ⁿ , ^a ^d i r e ^c t o ^r ^c ^e ^a ^s ^e ^s ^o f f ⁱ ^c ^e ^b ^e ^f ^o r e t h ^e ^e ⁿ ^d ^o ^f ^h ⁱ ^s t e r m , ^h ^e ^m ^u ^s ^t ^e ^x ^p l a i n t h ^e r e ^a ^s ^o ⁿ ^s i n ^a l e t t e ^r t h ^a ^t ^h ^e ^w i l l ^s ^e ⁿ ^d t o ^a l l t h ^e ^m ^e ^m ^b ^e ^r ^s ^o ^f t h ^e ^B ^o ^a r d .

^T ^h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^m ^a ^y ^o ⁿ ^l ^y ^p r o ^p ^o ^s ^e t h ^e ^d ⁱ ^s ^m ⁱ ^s ^s ^a ^l ^o ^f ^a ⁿ i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^d i r ^e ^c t o ^r ^b ^e ^f ^o r e t h ^e ^s t a t u t o ^r ^y t e r m ^h ^a ^s ^e l a ^p ^s ^e ^d ^w ^h ^e ⁿ ^a ^j ^u ^s ^t ^c ^a ^u ^s ^e ^e ^x ⁱ ^s ^t ^s , ^a ^s ^a ^s ^s ^e ^s ^s ^e ^d ^b ^y t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s . I n ^p ^a r t i ^c ^u l a r , i t ^w i l l ^b ^e ^u ⁿ ^d ^e ^r ^s t o ^o ^d t h ^a ^t t h ^e r e ⁱ ^s ^j ^u ^s ^t ^c ^a ^u ^s ^e ^w ^h ^e ⁿ t h ^e ^d i r e ^c t o ^r ^h ^a ^d ^b r e ^a ^c ^h ^e ^d t h ^e ^d ^u t i e ^s i n ^h ^e r e ⁿ ^t t o ^h ⁱ ^s ^p ^o ^s i t i o ⁿ ^o ^r ^h ^a ^d i n ^c ^u r r e ^d i n ^a ⁿ ^y ^w ^a ^y i n t h ^e i m ^p ^e ^d i m ^e ⁿ ^t ^d ^e ^s ^c r i ^b ^e ^d i n t h ^e ^d ^e ^f i n i t i o ⁿ ^o ^f i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^d i r e ^c t o ^r ^e ^s t a ^b l i ^s ^h ^e ^d i n ^c ^u r r e ⁿ ^t r e ^g ^u l a t i o ⁿ ^s ^o r , i n ^h ⁱ ^s ^d ^e ^f ^e ^c t , i n t h ^e r e ^c ^o ^m ^m ^e ⁿ ^d ^a t i o ⁿ ^s ^o ^f ^g ^o ^o ^d ^c ^o r p ^o r a t e ^g ^o ^v ^e r n ^a ⁿ ^c ^e ^a ^p ^p l i ^c ^a ^b l e t o t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^a ^t ^a l l t i m ^e ^s .

^C . 1 . 2 ² ^S ^e ^c t i o ⁿ ^r ^e ^p ^e ^a l e ^d

^e ^s ^c ^r ⁱ

^C . 1 . 2 ³ ^A ^r ^e ^q ^u ^a l i f i e ^d ^m ^a ^j ^o ^r i t i e ^s ^o t h ^e ^r t h ^a ⁿ t h ^o ^s ^e ^p ^r ^e ^s ^c ^r ⁱ ^b ^e ^d ^b ^y l a ^w ^r ^e ^q ^u i r ^e ^d f o ^r ^a ⁿ ^y ^d ^e ^c i s i o ⁿ ^s ?

^Y ^e ^s ^N ^o ^X

^D ^b

^e t h ^e ^d i f f e ^r ^e ⁿ ^c ^e ^s , i f ^a ⁿ ^y :

^C . 1 . 2 ⁴ ^E ^x ^p l a i n i f t h ^e ^r ^e ^a ^r ^e ^o t h ^e ^r ^s ^p ^e ^c i f i c ^r ^e ^q ^u i r ^e ^m ^e ⁿ t s , ^o t h ^e ^r t h ^a ⁿ t h ^o ^s ^e ^e ^s t a ^b l i s ^h ^e ^d f o ^r ^d i r ^e ^c t o ^r ^s , f o ^r ^b ^e i n ^g ^a ^p ^p ^o i n t e ^d ^c ^h ^a i r ^m ^a ⁿ ^o ^f t h ^e ^b ^o ^a ^r ^d .

^Y ^e ^s ^N ^o ^X

^D ^e ^s ^c ^r i p t i o ⁿ ^o ^f t h ^e ^r ^e ^q ^u i r ^e ^m ^e ⁿ t s

^C . 1 . 2 ⁵ ^I ⁿ ^d i c ^a t e ^w ^h ^e t h ^e ^r t h ^e ^c ^h ^a i r ^m ^a ⁿ ^h ^a ^s t h ^e ^c ^a ^s t i n ^g ^v ^o t e :

^Y ^e ^s ^X ^N ^o

^M ^a t t e ^r ^s f o ^r ^w ^h i c ^h t h ^e ^c ^h ^a i r ^m ^a ⁿ ^h ^a ^s t h ^e ^c ^a ^s t i n ^g ^v ^o t e

^T ^h ^e ^a ^g r e ^e ^m ^e ⁿ ^t ^s ^s ^h ^a l l ^b ^e ^a ^d ^o ^p t e ^d ^b ^y ^a ⁿ ^a ^b ^s ^o l u t e ^m ^a ^j ^o r i t ^y ^o ^f t h ^e ^c ^o ⁿ ^c ^u r r e ⁿ ^t ^d i r e ^c t o ^r ^s , ^p r e ^s ^e ⁿ ^t ^o ^r r e ^p r e ^s ^e ⁿ t e ^d , ^a ^t t h ^e ^m ^e ^e t i n ^g , ^e ^x ^c ^e ^p ^t ^w ^h ^e ⁿ t h ^e ^L ^a ^w , t h ^e ^s ^e ^B ^y l a ^w ^s ^o ^r t h ^e ^R ^e ^g ^u l a t i o ⁿ ^s ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^p r o ^v i d ^e ^f ^o ^r ^o t h ^e ^r ^m ^a ^j ^o r i t i e ^s . I n ^c ^a ^s ^e ^o ^f ^a t i e , t h ^e ^C ^h ^a i r m ^a ⁿ ^w i l l ^h ^a ^v ^e ^a ^v ^o t e ^o ^f ^q ^u ^a l i t ^y . ^A r t ³ ⁹ . 2 ^C ^o r p ^o r a t e ^B ^y l a ^w ^s .

^T ^h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e ^w i l l ^b ^e ^v ^a l i d ^l ^y ^c ^o ⁿ ^s t i t u t e ^d ^w ^h ^e ⁿ ^h ^a ^l ^f , ^p l u ^s ^o ⁿ ^e ^o ^f t h ^e ^d i r e ^c t o ^r ^s ^w ^h ^o ^a r e ^p ^a r t ^o ^f t h ^e ^C ^o ^m ^m i t t e ^e , ^p r e ^s ^e ⁿ ^t t h ^e i r r e ^s ^o l u t i o ⁿ ^s ^b ^y ^m ^a ^j ^o r i t ^y ^v ^o t e . I n ^c ^a ^s ^e ^o ^f ^a t i e , t h ^e ^C ^h ^a i r m ^a ⁿ ^w i l l ^h ^a ^v ^e ^a ^v ^o t e ^o ^f ^q ^u ^a l i t ^y . ^A r t ⁴ ² . 3 ^B ^y l a ^w ^s , ^A r t . 1 4 . 5 ^o ^f t h ^e ^B ^o ^a r d ^R ^e ^g ^u l a t i o ⁿ ^s ^a ⁿ ^d ^A r t . ⁸ . 2 ^R ^e ^g ^u l a t i o ⁿ ^s ^o ^f t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e .

^T ^h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^w i l l ^b ^e ^v ^a l i d ^l ^y ^c ^o ⁿ ^s t i t u t e ^d ^w ^h ^e ⁿ t h ^e ^m ^a ^j ^o r i t ^y ^o ^f i t ^s ^m ^e ^m ^b ^e ^r ^s ^a ⁿ ^d t h ^e i r ^a ^g r e ^e ^m ^e ⁿ ^t ^s ^w i l l ^b ^e ^a ^d ^o ^p t e ^d ^b ^y ^m ^a ^j ^o r i t ^y ^v ^o t e . I n ^c ^a ^s ^e ^o ^f ^a t i e , t h ^e ^C ^h ^a i r m ^a ⁿ ^o ^f t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^w i l l ^h ^a ^v ^e ^a ^q ^u ^a l i t ^y ^v ^o t e . ^A r t i ^c l e 1 5 . 7 ^o ^f t h ^e ^B ^o ^a r d ^R ^e ^g ^u l a t i o ⁿ ^s ( ⁿ ^e ^w ^a r t i ^c l e 1 5 . 6 ) ^a ⁿ ^d ^A r t . ⁸ . ¹ ^o ^f t h ^e ⁿ ^e ^w ^R ^e ^g ^u l a t i o ⁿ ^s ^o ^f t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e .

^C . 1 . 2 ⁶ ^I ⁿ ^d i c ^a t e ^w ^h ^e t h ^e ^r t h ^e ^b ^y l a ^w ^s ^o ^r t h ^e ^b ^o ^a ^r ^d ^r ^e ^g ^u l a t i o ⁿ ^s ^s ^e ^t ^a ⁿ ^y ^a ^g ^e l i ^m i t f o ^r ^d i r ^e ^c t o ^r ^s :

^Y ^e ^s ^N ^o ^X

^g ^e l i ^m i t f o ^r ^c ^h ^a i r ^m ^a ⁿ

^m C^E ^O ^A

i t ^f ^o ^r

^g ^e ^l ⁱ

^C . 1 . 2 ⁷ ^I ⁿ ^d i c ^a t e ^w ^h ^e t h ^e ^r t h ^e ^b ^y l a ^w ^s ^o ^r ^b ^o ^a ^r ^d ^r ^e ^g ^u l a t i o ⁿ ^s ^s ^e ^t ^a ⁿ ^y l i ^m i t ^o ⁿ t h ^e t e ^r ^m ^o ^f ^o f f i c ^e ^o ^f i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^d i r ^e ^c t o ^r ^s ^d i f f e ^r ^e ⁿ ^t f r ^o ^m t h ^a ^t ^s t i p ^u l a t e ^d ^b ^y l a ^w :

^g ^e ^l ⁱ ^m

i t ^f ^o ^r ^d i r ^e ^c ^t ^o ^r ^s

e s Y	N o	X

^M ^a ^x ⁱ ^m ^u ^m t e ^r ^m ^o ^f ^o f f i c ^e ( ^y ^e ^a ^r ^s )

^C . 1 . 2 ⁸ ^I ⁿ ^d i c ^a t e ^w ^h ^e t h ^e ^r t h ^e ^b ^y l a ^w ^s ^o ^r ^b ^o ^a ^r ^d ^r ^e ^g ^u l a t i o ⁿ ^s ^s t i p ^u l a t e ^s ^p ^e ^c i f i c ^r ^u l e ^s ^g ^o ^v ^e ^r ⁿ i n ^g t h ^e ^a ^p ^p ^o i n ^t ^m ^e ⁿ ^t ^o ^f ^p ^r ^o ^x i e ^s f o ^r ^b ^o ^a ^r ^d ^v ^o t i n ^g ^p ^u ^r ^p ^o ^s ^e ^s , t h ^e ^m ^a ⁿ ⁿ ^e ^r f o ^r ^s ^o ^d ^o i n ^g ^a ⁿ ^d , ^s ^p ^e ^c i f i c ^a l l y , t h ^e ^m ^a ^x ⁱ ^m ^u ^m ⁿ ^u ^m ^b ^e ^r ^o ^f ^p ^r ^o ^x ^y ^a ^p ^p ^o i n ^t ^m ^e ⁿ t s ^a ^d i r ^e ^c t o ^r ^m ^a ^y ^h ^o l d ; ^s t a t e ^w ^h ^e t h ^e ^r ^a ⁿ ^y l i ^m i t ^h ^a ^s ^b ^e ^e ⁿ ⁱ ^m ^p ^o ^s ^e ^d ^o ⁿ t h ^e ^m ^a t t e ^r ^s ^w ^h i c ^h ^c ^a ⁿ ^b ^e ^d ^e l e ^g ^a t e ^d ^b ^e ^y ^o ⁿ ^d t h ^e l i ^m i t s l a i d ^d ^o ^w ⁿ i n l e ^g i s l a t i o ⁿ . ^I ^f ^s ^o , ^d ^e ^s ^c ^r ⁱ ^b ^e ^s ^u ^c ^h ^r ^u l e ^s ^b ^r i e f l y .

I n ^a ^c ^c ^o r d ^a ⁿ ^c ^e ^w i t h ^a r t i ^c l e 1 7 . 2 ^o ^f t h ^e ^B ^o ^a r d ^R ^e ^g ^u l a t i o ⁿ ^s , ^d i r e ^c t o ^r ^s ^a r e r e ^q ^u i r e ^d t o ^d ^o ^e ^v ^e ^r ^y t h i n ^g i n t h ^e i r ^p ^o ^w ^e ^r t o ^a t t e ⁿ ^d ^B ^o ^a r d ^m ^e ^e t i n ^g ^s . ^W ^h ^e ⁿ t h ^e ^y ^a ^b ^s ^o l u t e ^l ^y ^c ^a ⁿ ⁿ ^o ^t ^a ^v ^o i d ^d ^o i n ^g ^s ^o i n ^p ^e ^r ^s ^o ⁿ , t h ^e ^y ^m ^a ^y ^g r a ⁿ ^t ^p r o ^x ^y t o ^a ⁿ ^o t h ^e ^r ^B ^o ^a r d ^m ^e ^m ^b ^e r , i n ^w r i t i n ^g ^a ⁿ ^d ^o ⁿ t h ^e ^o ^c ^c ^a ^s i o ⁿ ^o ^f ^e ^a ^c ^h ^m ^e ^e t i n ^g , i n ^d ⁱ ^c ^a t i n ^g t h ^e ^o ^p ^p ^o r t u ⁿ ^e ^v ^o t i n ^g i n ^s t r u ^c t i o ⁿ ^s ^a ⁿ ^d ⁿ ^o t i f y i n ^g t h ^e ^C ^h ^a i r m ^a ⁿ ^o ^f t h ^e ^B ^o ^a r d ^o ^f t h ^e ^p r o ^x ^y .

^C . 1 . 2 ⁹ ^I ⁿ ^d i c ^a t e t h ^e ⁿ ^u ^m ^b ^e ^r ^o ^f ^b ^o ^a ^r ^d ^m ^e ^e t i n ^g ^s ^h ^e l d ^d ^u ^r i n ^g t h ^e ^y ^e ^a ^r , i n ^d i c ^a t i n ^g t h ^e ⁿ ^u ^m ^b ^e ^r ^o ^f t i ^m ^e ^s , i f ^a ⁿ ^y , t h ^e ^b ^o ^a ^r ^d ^m ^e ^t ^w i t h ^o ^u ^t i t s ^c ^h ^a i r ^m ^a ⁿ i n ^a t t e ⁿ ^d ^a ⁿ ^c ^e . ^T ^h i s ^c ^a l c ^u l a t i o ⁿ ^s ^h ^o ^u l d i n ^c l u ^d ^e ^p ^r ^o ^x i e ^s ^a ^p ^p ^o i n t e ^d ^w i t h ^s ^p ^e ^c i f i c ^v ^o t i n ^g i n ^s t r ^u ^c t i o ⁿ ^s ^a ^s ^a t t e ⁿ ^d ^a ⁿ ^c ^e ^s :

e e t i n g s N u e r o f o a r d m b b m	1 7
e e t i n g s h e l d i t h o u t t h e c h a i r i n N u e r o f o a r d w a n m b b m m
a t t e n d a n c e	0

^I ^f t h ^e ^c ^h ^a i r ^m ^a ⁿ i s ^a ⁿ ^e ^x ^e ^c ^u t i v ^e ^d i r ^e ^c t o ^r , i n ^d i c ^a t e t h ^e ⁿ ^u ^m ^b ^e ^r ^o ^f ^m ^e ^e t i n ^g ^s ^h ^e l d ^w i t h ^o ^u ^t t h ^e ^a t t e ⁿ ^d ^a ⁿ ^c ^e ^o ^f ^a ⁿ ^y ^e ^x ^e ^c ^u t i v ^e ^d i r ^e ^c t o ^r i n ^p ^e ^r ^s ^o ⁿ ^o ^r ^b ^y ^p ^r ^o ^x ^y ^a ⁿ ^d ^c ^h ^a i r ^e ^d ^b ^y t h ^e l e ^a ^d i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^d i r ^e ^c t o ^r .

e e t i n g s N u e r o f m b m

^I ⁿ ^d i c ^a t e t h ^e ⁿ ^u ^m ^b ^e ^r ^o ^f ^m ^e ^e t i n ^g ^s t h ^e ^v ^a ^r i o ^u ^s ^b ^o ^a ^r ^d ^c ^o ^m ^m i t t e ^e ^s ^h ^e l d ^d ^u ^r i n ^g t h ^e ^y ^e ^a ^r :

e x e c u t i v e i t t e e e e t i n g s N u e r o f c o m b m m m	/ A N
a u d i t & c o n t r o l c o i t t e e e e t i n g s N u e r o f m b m m m	1 0
a p p o i n t e n t s u n e r a t i o n i t t e e e e t i n g s N u e r o f a n d r e c o m b m m m m m	6
i n a t i o n i t t e e e e t i n g s N u e r o f n o c o m b m m m m	/ A N
u n e r a t i o n i t t e e e e t i n g s N u e r o f r e c o m b m m m m	/ A N
s u s t a i n a i l i t y i t t e e e e t i n g s N u e r o f c o m b b m m m	/ A N

^C . 1 . 3 ⁰ ^I ⁿ ^d i c ^a t e t h ^e ⁿ ^u ^m ^b ^e ^r ^o ^f ^b ^o ^a ^r ^d ^m ^e ^e t i n ^g ^s ^h ^e l d ^d ^u ^r i n ^g t h ^e ^y ^e ^a ^r ^w i t h ^a l l ^m ^e ^m ^b ^e ^r ^s i n ^a t t e ⁿ ^d ^a ⁿ ^c ^e . ^T ^h i s ^c ^a l c ^u l a t i o ⁿ ^s ^h ^o ^u l d i n ^c l u ^d ^e ^p ^r ^o ^x i e ^s ^a ^p ^p ^o i n t e ^d ^w i t h ^s ^p ^e ^c i f i c ^v ^o t i n ^g i n ^s t r ^u ^c t i o ⁿ ^s ^a ^s ^a t t e ⁿ ^d ^a ⁿ ^c ^e ^s :

I n ² ⁰ 1 9 , t h ^e r e ^h ^a ^v ^e ^b ^e ^e ⁿ 1 7 ^B ^o ^a r d ^m ^e ^e t i n ^g ^s ^a ⁿ ^d ^o ⁿ t h r e ^e ^o ^c ^c ^a ^s i o ⁿ ^s ^m ^o r e ^a ^g r e ^e ^m ^e ⁿ ^t ^s ^h ^a ^v ^e ^b ^e ^e ⁿ ^a ^d ^o ^p t e ^d ^f ^o l l o ^w i n ^g t h ^e ^v ^o t i n ^g ^p r o ^c ^e ^d ^u r e i n ^w r i t i n ^g ^a ⁿ ^d ^w i t h ^o ^u ^t ^a ^s ^e ^s ^s i o ⁿ .

^T ^h ^e ^d i r e ^c t o ^r ^s ^a t t e ⁿ ^d ^e ^d ^a l l ^m ^e ^e t i n ^g ^s ^p ^e ^r ^s ^o ⁿ ^a l l ^y ^e ^x ^c ^e ^p ^t i n ^a ^s i n ^g l e ^s ^e ^s ^s i o ⁿ i n ^w ^h ⁱ ^c ^h ^M ^s . ^I ^s ^a ^b ^e ^l ^A ^g ^u i l e r a ^w ^a ^s r e ^p r e ^s ^e ⁿ t e ^d ^b ^y t h ^e ^C ^h ^a i r m ^a ⁿ ^h ^a ^v i n ^g ^g r a ⁿ t e ^d ^p r o ^x ^y i n ^h ^e ^r ^f ^a ^v ^o ^r ^w i t h ^s ^p ^e ^c ⁱ ^f ⁱ ^c ^v ^o t i n ^g i n ^s t r u ^c t i o ⁿ ^s .

e e t i n g s h e l d i t h a l l i n a t t e n d a n c e N u e r o f w e e r s m b m m m b %	1 7
a t t e n d a n c e t o t a l v o t e s i n t h e o v e r c a s t y e a r	1 0 0 %

^C . 1 . 3 ¹ ^I ⁿ ^d i c ^a t e ^w ^h ^e t h ^e ^r t h ^e ^s ^e ^p ^a ^r ^a t e ^a ⁿ ^d ^c ^o ⁿ ^s ^o l i d ^a t e ^d ^a ⁿ ⁿ ^u ^a ^l f i n ^a ⁿ ^c i a ^l ^s t a t e ^m ^e ⁿ t s ^a ^r ^e ^c ^e ^r t i f i e ^d ^p ^r i o ^r t o t h ^e i r ^p ^r ^e ^s ^e ⁿ t a t i o ⁿ t o t h ^e ^b ^o ^a ^r ^d ^o ^f ^d i r ^e ^c t o ^r ^s f o ^r ^a ^p ^p ^r ^o ^v ^a l :

^Y ^e ^s ^N ^o ^X

^I ^d ^e ⁿ t i f y , i f ^a ^p ^p ^r ^o ^p ^r i a t e , t h ^e ^p ^e ^r ^s ^o ⁿ ( ^s ) ^c ^e ^r t i f y i n ^g t h ^e ^s ^e ^p ^a ^r ^a t e ^a ⁿ ^d ^c ^o ⁿ ^s ^o l i d ^a t e ^d

N a e m	o s i t i o n P

^C . 1 . 3 ² ^E ^x ^p l a i n t h ^e ^m ^e ^c ^h ^a ⁿ i s ^m ^s , i f ^a ⁿ ^y , ^e ^s t a ^b l i s ^h ^e ^d ^b ^y t h ^e ^b ^o ^a ^r ^d ^o ^f ^d i r ^e ^c t o ^r ^s t o ^p ^r ^e ^v ^e ⁿ ^t t h ^e ^s ^e ^p ^a ^r ^a t e ^a ⁿ ^d ^c ^o ⁿ ^s ^o l i d ^a t e ^d f i n ^a ⁿ ^c i a ^l ^s t a t e ^m ^e ⁿ t s f r ^o ^m ^b ^e i n ^g ^p ^r ^e ^s ^e ⁿ t e ^d ^a ^t t h ^e ^g ^e ⁿ ^e ^r ^a ^l ^s ^h ^a ^r ^e ^h ^o l d ^e ^r ^s ' ^m ^e ^e t i n ^g ^w i t h ^a ^q ^u ^a l i f i e ^d ^a ^u ^d i t ^r ^e ^p ^o ^r ^t .

I n ^k ^e ^e ^p i n ^g ^w i t h ^a r t i ^c l e ⁴ 1 . 3 ^o ^f t h ^e ^B ^o ^a r d ^R ^e ^g ^u l a t i o ⁿ ^s , t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^m ^u ^s ^t ^e ⁿ ^d ^e ^a ^v ^o ^u ^r t o ^a ^u t h ^o r i ^s ^e t h ^e ^a ⁿ ⁿ ^u ^a ^l ^f i n ^a ⁿ ^c i a ^l ^s t a t e ^m ^e ⁿ ^t ^s ^s ^u ^c ^h t h ^a ^t t h ^e ^y ^d ^o ⁿ ^o ^t ^g ⁱ ^v ^e r i ^s ^e t o r e ^s ^e r v ^a t i o ⁿ ^s ^o ^r ^q ^u ^a l i f i c ^a t i o ⁿ ^s i n t h ^e ^a ^u ^d i t o r ' s r e ^p ^o r t . I n t h ^e ^u ⁿ l i ^k ^e l y i n ^s t a ⁿ ^c ^e t h ^a ^t t h ^e ^y ^w ^e r e t o ^a r i ^s ^e , ^b ^o t h t h ^e ^C ^h ^a i r m ^a ⁿ ^o ^f t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e ^a ⁿ ^d t h ^e ^e ^x t e r n ^a ^l ^a ^u ^d i t o ^r ^m ^u ^s ^t ^p r o ^v i d ^e ^s ^h ^a r e ^h ^o l d ^e ^r ^s ^w i t h ^a ^c l e ^a ^r ^a ^c ^c ^o ^u ⁿ ^t ^o ^f t h ^e ^c ^o ⁿ t e ⁿ ^t ^o ^f ^s ^u ^c ^h r e ^s ^e ^r ^v ^a t i o ⁿ ^s ^o ^r ^q ^u ^a l i ^f ⁱ ^c ^a t i o ⁿ ^s . ^N ^o ⁿ ^e t h ^e l e ^s ^s , ^w ^h ^e ⁿ t h ^e ^B ^o ^a r d ^c ^o ⁿ ^s i d ^e ^r ^s t h ^a ^t i t ^s ^c r i t e r i a ^s ^h ^o ^u l d ^p r e ^v ^a i l , i t ^s ^h ^a l l ^p ^u ^b l i ^c ^l ^y ^d ⁱ ^s ^c l o ^s ^e t h ^e ^c ^o ⁿ t e ⁿ ^t ^a ⁿ ^d ^s ^c ^o ^p ^e ^o ^f t h ^e ^d ⁱ ^s ^c r e ^p ^a ⁿ ^c ^y .

^T ^h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e ´ ^s ^R ^e ^g ^u l a t i o ⁿ i n ^d ⁱ ^c ^a t e ^s i n ^a r t i ^c l e ⁵ . 1 . i i i t h ^a ^t t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e ^w i l l ^e ⁿ ^s ^u r e t h ^a ^t t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^s ^u ^b ^m i t ^s t h ^e ^f i n ^a ⁿ ^c i a ^l ^s t a t e ^m ^e ⁿ ^t ^s t o t h ^e ^G ^e ⁿ ^e r a ^l ^S ^h ^a r e ^h ^o l d ^e ^r ^s ' ^M ^e ^e t i n ^g ^w i t h ^o ^u ^t ^a ⁿ ^y l i m i t a t i o ⁿ ^s ^o ^r r e ^s ^e ^r ^v ^a t i o ⁿ ^s i n t h ^e ^a ^u ^d i t i n ^g r e ^p ^o r t ^a ⁿ ^d t h ^a t , i n t h ^e ^e ^x ^c ^e ^p t i o ⁿ ^a ^l ^c ^a ^s ^e ^s i n ^w ^h ⁱ ^c ^h t h ^e r e ^a r e r e ^s ^e ^r ^v ^a t i o ⁿ ^s , ^b ^o t h t h ^e ^C ^h ^a i r m ^a ⁿ ^o ^f t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e ^a ⁿ ^d t h ^e ^a ^u ^d i t o ^r ^s ^w i l l ^c l e ^a r l ^y ^e ^x ^p l a i n t o t h ^e ^s ^h ^a r e ^h ^o l d ^e ^r ^s t h ^e ^c ^o ⁿ t e ⁿ ^t ^a ⁿ ^d ^s ^c ^o ^p ^e ^o ^f t h ^e ^s ^e l i m i t a t i o ⁿ ^s ^o ^r r e ^s ^e ^r ^v ^a t i o ⁿ ^s .

^C . 1 . 3 ³ ^I ^s t h ^e ^s ^e ^c ^r ^e t a ^r ^y ^o ^f t h ^e ^b ^o ^a ^r ^d ^a l s ^o ^a ^d i r ^e ^c t o ^r ?

^Y ^e ^s ^N ^o ^X

^I ^f t h ^e ^s ^e ^c ^r ^e t a ^r ^y i s ⁿ ^o ^t ^a ^d i r ^e ^c t o ^r , ^p l e ^a ^s ^e f i l l ^o ^u ^t t h ^e f o l l o ^w i n ^g t a ^b l e :

t h e s e c r e t a r y N a e o r c o p a n y n a e o f m m m	e p r e s e n t a t i v e R
e z ï A J u a n G ó m c e b o

^C . 1 . 3 ⁴ ^S ^e ^c t i o ⁿ ^r ^e ^p ^e ^a l e ^d

^C . 1 . 3 ⁵ ^I ⁿ ^d i c ^a t e t h ^e ^m ^e ^c ^h ^a ⁿ i s ^m ^s , i f ^a ⁿ ^y , ^e ^s t a ^b l i s ^h ^e ^d ^b ^y t h ^e ^c ^o ^m ^p ^a ⁿ ^y t o ^p ^r ^e ^s ^e ^r ^v ^e t h ^e i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^c ^e ^o ^f t h ^e ^a ^u ^d i t o ^r , f i n ^a ⁿ ^c i a ^l ^a ⁿ ^a l y ^s t s , i n ^v ^e ^s ^t ^m ^e ⁿ ^t ^b ^a ⁿ ^k ^s ^a ⁿ ^d ^r ^a t i n ^g ^a ^g ^e ⁿ ^c i e ^s .

^A r t i ^c l e ⁵ ^o ^f t h ^e ^R ^e ^g ^u l a t i o ⁿ ^s ^o ^f t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e , ^a ^c ^c ^o r d i n ^g t o i t ^s l a ^s ^t ^m ^o ^d ⁱ ^f ⁱ ^c ^a t i o ⁿ ^o ^f ^D ^e ^c ^e ^m ^b ^e ^r 1 2 , ² ⁰ 1 9 , ^e ^s t a ^b l i ^s ^h ^e ^s t h ^a t , ^w i t h ^o ^u ^t ^p r e ^j ^u ^d ⁱ ^c ^e t o ^a ⁿ ^y ^o t h ^e ^r t a ^s ^k ^s t h ^a ^t ^m ^a ^y ^b ^e ^a ^s ^s ⁱ ^g ⁿ ^e ^d ^a ^t ^a ⁿ ^y t i m ^e ^b ^y t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s , t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e ^w i l l ^e ^x ^e ^r ^c ⁱ ^s ^e , ^a ^m ^o ⁿ ^g ^o t h ^e ^r ^s , t h ^e ^f ^o l l o ^w i n ^g ^s ^p ^e ^c ⁱ ^f ⁱ ^c ^b ^a ^s ⁱ ^c ^f ^u ⁿ ^c t i o ⁿ ^s t o ^m ^a i n t a i n t h ^e i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^c ^e ^o ^f t h ^e ^e ^x t e r n ^a ^l ^a ^u ^d i t o ^r :

^c . I n r e l a t i o ⁿ t o t h ^e ^e ^x t e r n ^a ^l ^a ^u ^d i t o ^r :

1 . ^T ^o ^s ^u ^b ^m i t t o t h ^e ^B ^o ^a r d t h ^e ^p r o ^p ^o ^s ^a ^l ^s ^f ^o ^r t h ^e ^s ^e l e ^c t i o ⁿ , ^a ^p ^p ^o i n t m ^e ⁿ t , r e ï e l e ^c t i o ⁿ ^a ⁿ ^d r e ^p l a ^c ^e ^m ^e ⁿ ^t ^o ^f t h ^e ^e ^x t e r n ^a ^l ^a ^u ^d i t o r , t a ^k i n ^g r e ^s ^p ^o ⁿ ^s ⁱ ^b i l i t ^y ^f ^o ^r t h ^e ^s ^e l e ^c t i o ⁿ ^p r o ^c ^e ^s ^s , i n ^a ^c ^c ^o r d ^a ⁿ ^c ^e ^w i t h t h ^e ^p r o ^v ⁱ ^s i o ⁿ ^s ^o ^f t h ^e ^a ^p ^p l i ^c ^a ^b l e r e ^g ^u l a t i o ⁿ ^s , ^a ^s ^w ^e l l ^a ^s t h ^e ^c ^o ⁿ ^d i t i o ⁿ ^s ^o ^f t h ^e i r ^h i r i n ^g , ^a ⁿ ^d ^f ^o ^r t h ⁱ ^s ^p ^u r p ^o ^s ^e ^s ^h ^a l l :

¹ ^s t . ^d ^e ^f i n ^e t h ^e ^a ^u ^d i t o ^r ' s ^s ^e l e ^c t i o ⁿ ^p r o ^c ^e ^d ^u r e ; ^a ⁿ ^d

² ⁿ ^d . ^I ^s ^s ^u ^e ^a ^m ^o t i ^v ^a t e ^d ^p r o ^p ^o ^s ^a ^l t h ^a ^t ^w i l l ^c ^o ⁿ t a i n ^a ^t l e ^a ^s ^t t w ^o ^a l t e r n ^a t i ^v ^e ^s ^f ^o ^r t h ^e ^a ^u ^d i t o ^r ' s ^s ^e l e ^c t i o ⁿ , ^e ^x ^c ^e ^p ^t i n t h ^e ^c ^a ^s ^e ^o ^f r e ï e l e ^c t i o ⁿ ^o ^f t h ^e ^a ^u ^d i t o r .

^R ^e ^c ^e ⁱ ^v ^e r e ^g ^u l a ^r i n ^f ^o r m ^a t i o ⁿ ^f r o ^m t h ^e ^e ^x t e r n ^a ^l ^a ^u ^d i t o ^r ^o ⁿ t h ^e ^a ^u ^d i t ^p l a ⁿ ^a ⁿ ^d t h ^e r e ^s ^u l t ^s ^o ^f i t ^s ^e ^x ^e ^c ^u t i o ⁿ ^a ⁿ ^d ^v ^e r i f y t h ^a ^t ^s ^e ⁿ i o ^r ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t t a ^k ^e ^s i n t o ^a ^c ^c ^o ^u ⁿ ^t i t ^s r e ^c ^o ^m ^m ^e ⁿ ^d ^a t i o ⁿ ^s .

² . ^E ^s t a ^b l i ^s ^h t h ^e ^a ^p ^p r o ^p r i a t e r e l a t i o ⁿ ^s ^h i p ^s ^w i t h t h ^e ^a ^c ^c ^o ^u ⁿ ^t ^a ^u ^d i t o ^r ^s t o r e ^c ^e ⁱ ^v ^e i n ^f ^o r m ^a t i o ⁿ ^o ⁿ t h ^o ^s ^e ⁱ ^s ^s ^u ^e ^s t h ^a ^t ^m ^a ^y ^p ^o ^s ^e ^a t h r e ^a ^t t o t h ^e i r i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^c ^e , ^f ^o ^r ^c ^o ⁿ ^s i d ^e r a t i o ⁿ ^b ^y t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e , ^a ⁿ ^d ^a ⁿ ^y ^o t h ^e ^r ^s r e l a t e ^d t o t h ^e ^d ^e ^v ^e l o ^p ^m ^e ⁿ ^t ^p r o ^c ^e ^s ^s ^o ^f t h ^e ^a ^u ^d i t ^o ^f ^a ^c ^c ^o ^u ⁿ ^t ^s ^a ⁿ ^d , ^w ^h ^e r e ^a ^p ^p r o ^p r i a t e , t h ^e ^a ^u t h ^o r i ^z ^a t i o ⁿ ^o ^f ^s ^e ^r ^v ⁱ ^c ^e ^s ^o t h ^e ^r t h ^a ⁿ t h ^o ^s ^e ^p r o ^h ⁱ ^b i t e ^d , i n t h ^e t e r m ^s ^p r o ^v i d ^e ^d i n t h ^e ^a ^p ^p l i ^c ^a ^b l e r e ^g ^u l a t i o ⁿ ^s , ^a ^s ^w ^e l l ^a ^s t h ^o ^s ^e ^o t h ^e ^r ^c ^o ^m ^m ^u ⁿ ⁱ ^c ^a t i o ⁿ ^s ^p r o ^v i d ^e ^d ^f ^o ^r i n t h ^e ^a ^c ^c ^o ^u ⁿ ^t ^s ^a ^u ^d i t l e ^g ⁱ ^s l a t i o ⁿ ^a ⁿ ^d i n t h ^e r e ^m ^a i n i n ^g ^a ^u ^d i t i n ^g ^s t a ⁿ ^d ^a r d ^s .

I n ^a ⁿ ^y ^c ^a ^s ^e , i t ^m ^u ^s ^t r e ^c ^e ⁱ ^v ^e ^a ⁿ ⁿ ^u ^a l l ^y ^f r o ^m t h ^e ^a ^c ^c ^o ^u ⁿ ^t ^a ^u ^d i t o ^r ^s ^w r i t t e ⁿ ^c ^o ⁿ ^f i r m ^a t i o ⁿ ^o ^f t h ^e i r i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^c ^e ^f r o ^m t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^o ^r ^e ⁿ t i t i e ^s l i n ^k ^e ^d t o i t ^d i r e ^c t l ^y ^o ^r i n ^d i r e ^c t l ^y , ^a ^s ^w ^e l l ^a ^s ^d ^e t a i l e ^d ^a ⁿ ^d i n ^d ⁱ ^v i d ^u ^a l i ^z ^e ^d i n ^f ^o r m ^a t i o ⁿ ^o ^f t h ^e ^a ^d ^d i t i o ⁿ ^a ^l ^s ^e ^r ^v ⁱ ^c ^e ^s ^o ^f ^a ⁿ ^y ^k i n ^d ^p r o ^v i d ^e ^d ^a ⁿ ^d t h ^e ^c ^o r r e ^s ^p ^o ⁿ ^d i n ^g ^f ^e ^e ^s r e ^c ^e ⁱ ^v ^e ^d ^f r o ^m t h ^e ^s ^e ^e ⁿ t i t i e ^s ^b ^y t h ^e ^e ^x t e r n ^a ^l ^a ^u ^d i t o ^r ^o ^r ^b ^y t h ^e ^p ^e ^r ^s ^o ⁿ ^s ^o ^r ^e ⁿ t i t i e ^s l i n ^k ^e ^d t o i t , i n ^a ^c ^c ^o r d ^a ⁿ ^c ^e ^w i t h t h ^e ^p r o ^v ⁱ ^s i o ⁿ ^s ^o ^f t h ^e l e ^g ⁱ ^s l a t i o ⁿ ^o ⁿ t h ^e ^a ^u ^d i t i n ^g ^o ^f t h ^e ^a ^c ^c ^o ^u ⁿ ^t ^s .

³ . ^I ^s ^s ^u ^e ^a ⁿ ⁿ ^u ^a l l ^y , ^p r i o ^r t o t h ^e ^a ^c ^c ^o ^u ⁿ ^t ^a ^u ^d i t r e ^p ^o r t , ^a r e ^p ^o r t t h ^a ^t ^w i l l ^e ^x ^p r e ^s ^s ^a ⁿ ^o ^p i n i o ⁿ ^o ⁿ ^w ^h ^e t h ^e ^r t h ^e i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^c ^e ^o ^f t h ^e ^a ^u ^d i t o ^r ^s ^o ^r ^a ^u ^d i t ^f i r m ^s ⁱ ^s ^c ^o ^m ^p r o ^m ⁱ ^s ^e ^d , ^w ^h ⁱ ^c ^h ^w i l l ^b ^e ^a ^v ^a i l a ^b l e t o ^s ^h ^a r e ^h ^o l d ^e ^r ^s ^a ⁿ ^d i n ^v ^e ^s t o ^r ^s t h r o ^u ^g ^h ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y ' s ^w ^e ^b ^s i t e i n ^a ^d ^v ^a ⁿ ^c ^e ^o ^f t h ^a ^t ^o ^f t h ^e ^O r d i n ^a ^r ^y ^G ^e ⁿ ^e r a l . ^T ^h ⁱ ^s r e ^p ^o r t ^m ^u ^s ^t ^c ^o ⁿ t a i n , i n ^a ⁿ ^y ^c ^a ^s ^e , t h ^e ^m ^o t i ^v ^a t e ^d ^v ^a l u ^a t i o ⁿ ^o ^f t h ^e ^p r o ^v ⁱ ^s i o ⁿ ^o ^f ^e ^a ^c ^h ^a ⁿ ^d ^e ^v ^e ^r ^y ^o ⁿ ^e ^o ^f t h ^e ^a ^d ^d i t i o ⁿ ^a ^l ^s ^e ^r ^v ⁱ ^c ^e ^s r e ^f ^e r r e ^d t o i n t h ^e ^p r e ^v i o ^u ^s l e t t e ^r i n ^d ⁱ ^v i d ^u ^a l l ^y ^c ^o ⁿ ^s i d ^e r e ^d ^a ⁿ ^d ^a ^s ^a ^w ^h ^o l e , ^o t h ^e ^r t h ^a ⁿ t h ^e l e ^g ^a ^l ^a ^u ^d i t ^a ⁿ ^d i n r e l a t i o ⁿ t o t h ^e r e ^g i m ^e ^o ^f i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^c ^e ^o ^r ^w i t h t h ^e r e ^g ^u l a t i o ⁿ ^s ^g ^o ^v ^e r n i n ^g t h ^e ^a ^c t i ^v i t ^y ^o ^f ^a ^u ^d i t i n ^g ^a ^c ^c ^o ^u ⁿ ^t ^s .

⁴ . ^P r e ^s ^e ^r ^v ^e t h ^e i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^c ^e ^o ^f t h ^e ^e ^x t e r n ^a ^l ^a ^u ^d i t o ^r i n t h ^e ^e ^x ^e ^r ^c ⁱ ^s ^e ^o ^f i t ^s ^f ^u ⁿ ^c t i o ⁿ ^s ^a ⁿ ^d , t o t h ⁱ ^s ^e ⁿ ^d : ( ⁱ ) ^s ^u ^p ^e ^r ^v ⁱ ^s ^e t h ^a ^t t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^c ^o ^m ^m ^u ⁿ ⁱ ^c ^a t e ^s t h ^e ^c ^h ^a ⁿ ^g ^e ^o ^f ^a ^u ^d i t o ^r ^a ^s r e l e ^v ^a ⁿ ^t t o t h ^e ^N ^a t i o ⁿ ^a ^l ^S ^e ^c ^u r i t i e ^s ^M ^a r k ^e ^t ^C ^o ^m ^m ⁱ ^s ^s i o ⁿ ^a ⁿ ^d ^a ^c ^c ^o ^m ^p ^a ⁿ i e ^s i t ^w i t h ^a ^s t a t e ^m ^e ⁿ ^t ^o ⁿ t h ^e ^p ^o ^s ^s ⁱ ^b l e ^e ^x ⁱ ^s t e ⁿ ^c ^e ^o ^f ^d ⁱ ^s ^a ^g r e ^e ^m ^e ⁿ ^t ^s ^w i t h t h ^e ^o ^u ^t ^g ^o i n ^g ^a ^u ^d i t o ^r ^a ⁿ ^d , ⁱ ^f t h ^e ^y ^h ^a ^d ^e ^x ⁱ ^s t e ^d , ^o ^f t h ^e i r ^c ^o ⁿ t e ⁿ ^t ; ( i i ) ^e ⁿ ^s ^u r e t h ^a ^t t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^a ⁿ ^d t h ^e ^a ^u ^d i t o ^r r e ^s ^p ^e ^c ^t t h ^e ^c ^u r r e ⁿ ^t r e ^g ^u l a t i o ⁿ ^s ^o ⁿ t h ^e ^p r o ^v ⁱ ^s i o ⁿ ^o ^f ^s ^e ^r ^v ⁱ ^c ^e ^s ^o t h ^e ^r t h ^a ⁿ t h ^o ^s ^e ^o ^f ^a ^u ^d i t i n ^g ^a ⁿ ^d , i n ^g ^e ⁿ ^e r a l , t h ^e ^o t h ^e ^r ^s t a ⁿ ^d ^a r d ^s ^e ^s t a ^b l i ^s ^h ^e ^d t o ^e ⁿ ^s ^u r e t h ^e i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^c ^e ^o ^f t h ^e ^a ^u ^d i t o ^r ^s ; ^a ⁿ ^d ( i i i ) t h ^a ^t i n ^c ^a ^s ^e ^o ^f r e ^s ⁱ ^g ⁿ ^a t i o ⁿ ^o ^f t h ^e ^e ^x t e r n ^a ^l ^a ^u ^d i t o ^r ^e ^x ^a ^m i n ^e t h ^e ^c i r ^c ^u ^m ^s t a ⁿ ^c ^e ^s t h ^a ^t ^w ^o ^u l d ^h ^a ^v ^e ^m ^o t i ^v ^a t e ^d i t .

⁵ . I n t h ^e ^c ^a ^s ^e ^o ^f ^g r o ^u ^p ^s , ^f ^a ^v ^o ^r t h ^a ^t t h ^e ^g r o ^u ^p ^a ^u ^d i t o ^r ^b ^e r e ^s ^p ^o ⁿ ^s ⁱ ^b l e ^f ^o ^r t h ^e ^a ^u ^d i t ^s ^o ^f t h ^e ^c ^o ^m ^p ^a ⁿ i e ^s t h ^a ^t i n t e ^g r a t e i t .

⁶ . ^E ⁿ ^s ^u r e t h ^a ^t t h ^e ^e ^x t e r n ^a ^l ^a ^u ^d i t o ^r ' s ^w ^o r k ^d ^o ^e ^s ⁿ ^o ^t ^c ^o ^m ^p r o ^m ⁱ ^s ^e i t ^s ^q ^u ^a l i t ^y ^o ^r i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^c ^e .

⁷ . ^E ⁿ ^s ^u r e t h ^a ^t t h ^e ^e ^x t e r n ^a ^l ^a ^u ^d i t o ^r ^h ^o l d ^s ^a ⁿ ^a ⁿ ⁿ ^u ^a ^l ^m ^e ^e t i n ^g ^w i t h t h ^e ^f ^u l l ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s t o i n ^f ^o r m ^h i m ^a ^b ^o ^u ^t t h ^e ^w ^o r k ^d ^o ⁿ ^e ^a ⁿ ^d t h ^e ^e ^v ^o l u t i o ⁿ ^o ^f t h ^e ^a ^c ^c ^o ^u ⁿ t i n ^g ^a ⁿ ^d r i ^s ^k ^s i t u ^a t i o ⁿ ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y .

⁸ . ^M ^a ^k ^e ^a ^f i n ^a ^l ^e ^v ^a l u ^a t i o ⁿ ^a ^b ^o ^u ^t t h ^e ^a ^u ^d i t o ^r ' s ^p ^e ^r ^f ^o r m ^a ⁿ ^c ^e ^a ⁿ ^d ^h ^o ^w i t ^h ^a ^s ^c ^o ⁿ t r i ^b ^u t e ^d t o t h ^e ^q ^u ^a l i t ^y ^o ^f t h ^e ^a ^u ^d i t ^a ⁿ ^d t h ^e i n t e ^g r i t ^y ^o ^f t h ^e ^f i n ^a ⁿ ^c i a ^l i n ^f ^o r m ^a t i o ⁿ .

^A ^s ^f ^o ^r ^f i n ^a ⁿ ^c i a ^l ^a ⁿ ^a ^l ^y ^s ^t ^s , i n ^v ^e ^s t m ^e ⁿ ^t ^b ^a ⁿ ^k ^s ^a ⁿ ^d r a t i n ^g ^a ^g ^e ⁿ ^c i e ^s , ^a ⁿ ^y ^c ^o ⁿ t r a ^c ^t ⁱ ^s ^s ^u b j ^e ^c ^t t o ^c ^o ⁿ t r o ^l ^s t o ^a ^v ^o i d ^a ⁿ ^y ^p r o ^b l e ^m ^o ^f i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^c ^e ^a ⁿ ^d / ^o ^r ^c ^o ⁿ ^f l i ^c ^t ^s ^o ^f i n t e r e ^s t . ^E ^s ^p ^e ^c i a l l ^y r e l e ^v ^a ⁿ ^t ⁱ ^s t h ^e ^p r o ^c ^e ^d ^u r e ^f ^o l l o ^w ^e ^d ^f ^o ^r t h ^e ^h i r i n ^g ^o ^f ^a ^s ^s ^e ^t ^v ^a l u ^a t i o ⁿ ^s , ^w ^h ⁱ ^c ^h r e ^q ^u i r e ^s t h ^e ^a ^p ^p r o ^v ^a ^l ^o ^f t h ^e ^s ^e ^c ^o ⁿ t r a ^c ^t ^s ^f r o ^m t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e ^a ⁿ ^d t h ^e ^B ^o ^a r d .

^T ^h ^e ^C ^o ^m ^m ^u ⁿ ⁱ ^c ^a t i o ⁿ ^a ⁿ ^d ^C ^o ⁿ t a ^c ^t ^P ^o l i ^c ^y ^w i t h ^s ^h ^a r e ^h ^o l d ^e ^r ^s ^a ⁿ ^d i n ^v ^e ^s t o ^r ^s , ^a ^p ^p r o ^v ^e ^d i n

^D ^e ^c ^e ^m ^b ^e ^r ² ⁰ 1 7 , ^a ⁿ ^d ^u ^p ^d ^a t e ^d i n ^D ^e ^c ^e ^m ^b ^e ^r ² ⁰ 1 8 , ^u ⁿ ^d ^e ^r t h ^e ^s ^u ^p ^e ^r ^v ⁱ ^s i o ⁿ ^o ^f t h ^e ^C ^o ^m ^m i t t e ^e , ^h ^a ^s t h ^e ^p ^u r p ^o ^s ^e ^o ^f ^d ^e l i m i t i n ^g , ^a ⁿ ^a ^l ^y ^z i n ^g ^a ⁿ ^d ^d ^e ^v ^e l o ^p i n ^g t h ^e ^m ^a i n i n ^s t r u ^m ^e ⁿ ^t ^s , ^c ^h ^a ⁿ ⁿ ^e ^l ^s ^a ⁿ ^d i n ^f ^o r m ^a t i o ⁿ ^m ^e ^c ^h ^a ⁿ ⁱ ^s ^m ^s ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^w i t h i t ^s ^s ^h ^a r e ^h ^o l d ^e ^r ^s , i n ^v ^e ^s t o ^r ^s , ^v ^o t i n ^g ^a ^d ^v ⁱ ^s ^o ^r ^s ( ^p r o ^x ^y ^a ^d ^v ⁱ ^s ^o ^r ^s ) ^a ⁿ ^d ^o t h ^e ^r i n t e r e ^s ^t ^g r o ^u ^p ^s , t h ^e ^c ^o ^m ^m ^u ⁿ ⁱ ^c ^a t i o ⁿ ^a ⁿ ^d i n ^f ^o r m ^a t i o ⁿ ^s t r a t e ^g ^y ^b ^e i n ^g ^a ^f ^a i t h ^f ^u ^l r e ^f l e ^c t i o ⁿ ^o ^f i t ^s ^c ^o ^m ^m i t m ^e ⁿ ^t t o t h ^e ^s ^e i n t e r e ^s ^t ^g r o ^u ^p ^s .

^T ^h ^e ^b ^a ^s ⁱ ^c ^p r i n ^c i p l e ^s ^o ^f i t ^a r e :

^a ) ^T r u t h ^f ^u l n ^e ^s ^s , t r a ⁿ ^s ^p ^a r e ⁿ ^c ^y ^a ⁿ ^d ^e ^q ^u ^a l i t ^y ^o ^f t h ^e i n ^f ^o r m ^a t i o ⁿ ^c ^o ^m ^m ^u ⁿ ⁱ ^c ^a t e ^d .

) ^S t r i ^c ^t ^c ^o ^m ^p l i a ⁿ ^c ^e , i n ^a t i m ^e ^l ^y ^m ^a ⁿ ⁿ ^e r , ^w i t h t h ^e l e ^g ^a l l ^y ^e ^s t a ^b l i ^s ^h ^e ^d ^c ^o ^m ^m ^u ⁿ ⁱ ^c ^a t i o ⁿ ^a ⁿ ^d i n ^f ^o r m ^a t i o ⁿ ^o ^b l i ^g ^a t i o ⁿ ^s .

) ^P r o t e ^c t i o ⁿ ^o ^f t h ^e l e ^g i t i m ^a t e r i ^g ^h ^t ^s ^a ⁿ ^d i n t e r e ^s ^t ^s ^o ^f ^a l l ^s ^h ^a r e ^h ^o l d ^e ^r ^s . ^P r o ^v ⁱ ^s i o ⁿ ^o ^f ^a ^d ^e ^q ^u ^a t e ^c ^o ^m ^m ^u ⁿ ⁱ ^c ^a t i o ⁿ ^c ^h ^a ⁿ ⁿ ^e ^l ^s ^f ^o ^r ^s ^h ^a r e ^h ^o l d ^e ^r ^s t o ^e ^x ^e ^r ^c ⁱ ^s ^e t h ^e i r r i ^g ^h ^t t o i n ^f ^o r m ^a t i o ⁿ . ^d ) ^E ^q ^u ^a ^l t r e ^a t m ^e ⁿ ^t i n t h ^e r e ^c ^o ^g ⁿ i t i o ⁿ ^a ⁿ ^d ^e ^x ^e ^r ^c ⁱ ^s ^e ^o ^f t h ^e r i ^g ^h ^t ^s ^o ^f ^a l l ^s ^h ^a r e ^h ^o l d ^e ^r ^s .

^e ) ^C ^o ⁿ t i n ^u ^o ^u ^s ^d i a l o ^g ^u ^e , ^a ^c ^c ^e ^s ^s ⁱ ^b i l i t ^y ^a ⁿ ^d ^s ^p ^e ^e ^d ^o ^f i n ^f ^o r m ^a t i o ⁿ . ^T ^h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^o ^f ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^w i l l ^a ^t ^a l l t i m ^e ^s ^e ⁿ ^s ^u r e t h ^a ^t ^c ^o ^m ^m ^u ⁿ ⁱ ^c ^a t i o ⁿ ^a ⁿ ^d i n ^f ^o r m ^a t i o ⁿ ^w i t h i t ^s ^s ^h ^a r e ^h ^o l d ^e ^r ^s , i n ^v ^e ^s t o ^r ^s , ^v ^o t i n ^g ^a ^d ^v ⁱ ^s ^o ^r ^s ^a ⁿ ^d ^o t h ^e ^r i n t e r e ^s ^t ^g r o ^u ^p ^s ⁱ ^s ^c ^o ⁿ t i n ^u ^e ^d , ^f ^a ^c i l i t a t i n ^g ^p ^e r m ^a ⁿ ^e ⁿ ^t ^a ^c ^c ^e ^s ^s t o t h ^e ^v ^a r i o ^u ^s ^c ^o ^m ^m ^u ⁿ ⁱ ^c ^a t i o ⁿ ^c ^h ^a ⁿ ⁿ ^e ^l ^s .

) ^C ^o ^m ^m i t m ^e ⁿ ^t ^a ⁿ ^d ^p r o ^m ^o t i o ⁿ ^o ^f t h ^e i n ^f ^o r m ^e ^d ^p ^a r t i ^c i p ^a t i o ⁿ ^o ^f ^s ^h ^a r e ^h ^o l d ^e ^r ^s i n t h ^e ^G ^e ⁿ ^e r a ^l ^M ^e ^e t i n ^g ^o ^f t h ^e ^e ^x ^e ^r ^c ⁱ ^s ^e ^o ^f t h ^e i r r i ^g ^h ^t ^s .

I n ^a ^d ^d i t i o ⁿ , t h ^e ^C ^o ^m ^m ^u ⁿ ⁱ ^c ^a t i o ⁿ ^P ^o l i ^c ^y ^a ⁿ ^d ^c ^o ⁿ t a ^c ^t ^w i t h ^s ^h ^a r e ^h ^o l d ^e ^r ^s ^h ^a ^s ^a ^s ^p ^e ^c ⁱ ^f ⁱ ^c ^s ^e ^c t i o ⁿ ^o ⁿ " ^C ^o ⁿ f e r e ⁿ ^c ^e ^s f o ^r i n ^v ^e ^s t o r s , ^a ⁿ ^a l y ^s t s , ^p r e ^s ^s ^a ⁿ ^d ^o t h ^e ^r i n t e r e ^s t e ^d ^p ^a r t i e ^s " ^w ^h ^e r e i t ⁱ ^s ^s t a t e ^d t h ^a ^t ^L ^a ^r ^E ^s ^p ^a ^ñ ^a , ^w i t h t h ^e ^p ^a r t i ^c i p ^a t i o ⁿ ^o ^f i t ^s t o ^p ^e ^x ^e ^c ^u t i ^v ^e ^s , ^w i l l ^c r e ^a t e ^s ^u ^c ^h ^c ^o ⁿ ^f ^e r e ⁿ ^c ^e ^s t o r e ^p ^o r t ^o ⁿ t h ^e ^p r o ^g r e ^s ^s ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^a ⁿ ^d i t ^s ^p r o ^j ^e ^c ^t ^s , ^a l w ^a ^y ^s t a ^k i n ^g i n t o ^a ^c ^c ^o ^u ⁿ ^t t h ^e ^p r i n ^c i p l e ^o ^f ⁿ ^o ^t ^p r o ^v i d i n ^g i n ^f ^o r m ^a t i o ⁿ t h ^a ^t ^h ^a ^s ⁿ ^o ^t ^b ^e ^e ⁿ ^p r e ^v i o ^u ^s ^l ^y ^m ^a ^d ^e ^p ^u ^b l i ^c ^a ⁿ ^d t h ^e ^p ^a r i t ^y ^o ^f t r e ^a t m ^e ⁿ ^t ^o ^f ^s ^h ^a r e ^h ^o l d ^e ^r ^s .

I n ^a ^c ^c ^o r d ^a ⁿ ^c ^e ^w i t h t h ^e ^p r o ^v ⁱ ^s i o ⁿ ^s ^o ^f t h ^e ^R ^e ^g ^u l a t i o ⁿ ^s ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^L ^a ^r ^E ^s ^p ^a ^ñ ^a , t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e ^s ^h ^a l l ^b ^e r e ^s ^p ^o ⁿ ^s ⁱ ^b l e ^f ^o ^r t h ^e ^p ^e r i o ^d ⁱ ^c ^s ^u ^p ^e ^r ^v ⁱ ^s i o ⁿ ^o ^f ^b ^o t h t h ^e ^c ^o ⁿ t e ⁿ ^t ^a ⁿ ^d t h ^e ^a ^p ^p l i ^c ^a t i o ⁿ ^a ⁿ ^d ^d ^e ^v ^e l o ^p ^m ^e ⁿ ^t ^o ^f t h ⁱ ^s ^C ^o ^m ^m ^u ⁿ ⁱ ^c ^a t i o ⁿ ^a ⁿ ^d ^C ^o ⁿ t a ^c ^t ^P ^o l i ^c ^y ^w i t h ^s ^h ^a r e ^h ^o l d ^e ^r ^s , i n ^f ^o r m i n ^g ^a l l ^o ^f t h ⁱ ^s t o t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^a ⁿ ^d ^m ^a ^y ^p r o ^p ^o ^s ^e t h ^e i m ^p r o ^v ^e ^m ^e ⁿ ^t ^p r o ^p ^o ^s ^a ^l ^s i t ^d ^e ^e ^m ^s ^a ^p ^p r o ^p r i a t e .

^C . 1 . 3 ⁶ ^I ⁿ ^d i c ^a t e ^w ^h ^e t h ^e ^r t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^h ^a ^s ^c ^h ^a ⁿ ^g ^e ^d ^e ^x t e ^r ⁿ ^a ^l ^a ^u ^d i t o ^r ^d ^u ^r i n ^g t h ^e ^y ^e ^a ^r . ^I ^f ^s ^o , i d ^e ⁿ t i f y t h ^e ^o ^u t g ^o i n ^g ^a ⁿ ^d i n ^c ^o ^m i n ^g ^a ^u ^d i t o ^r :

e s Y		N o	X
----------	--	--------	---

u t g o i n g a u d i t o r O	i n g a u d i t o r n c o I m

^I ⁿ t h ^e ^e ^v ^e ⁿ ^t ^o ^f ^d i s ^a ^g ^r ^e ^e ^m ^e ⁿ t s ^w i t h t h ^e ^o ^u t g ^o i n ^g ^a ^u ^d i t o ^r , ^e ^x ^p l a i n t h ^e ^s ^u ^b ^s t a ⁿ ^c ^e t h ^e ^r ^e ^o f :

^Y ^e ^s ^N ^o ^X

x p l a n a t i o n t h e d i s a g r e e e n t s o f E m

^C . 1 . 3 ⁷ ^I ⁿ ^d i c ^a t e ^w ^h ^e t h ^e ^r t h ^e ^a ^u ^d i t f i r ^m ^p ^e ^r f o ^r ^m ^s ⁿ ^o ⁿ Æ a ^u ^d i t ^w ^o ^r ^k f o ^r t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^a ⁿ ^d / ^o ^r i t s ^g ^r ^o ^u ^p . ^I ^f ^s ^o , ^s t a t e t h ^e f e ^e ^s i t ^r ^e ^c ^e i v ^e ^s f o ^r ^s ^u ^c ^h ^w ^o ^r ^k ^a ⁿ ^d t h ^e ^p ^e ^r ^c ^e ⁿ t a ^g ^e t h ^e ^y ^r ^e ^p ^r ^e ^s ^e ⁿ ^t ^o ^f t o t a ^l f e ^e ^s i n ^v ^o i c ^e ^d t o t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^a ⁿ ^d / ^o ^r i t ^s ^g ^r ^o ^u ^p .

e s Y		N o	X
----------	--	--------	---

	o p a n y C m	r o u p G	o t a l T
f o r n o n Æ a u d i t w ( t h o u s a n d s e e s o r k o f e u r o s ) F	0	0	0 %
e e s f o r n o n ) a u d i t w / t o t a l a m F o r k o u n t i n v o i c e d b y t h ( % e a u d i t f i r m )	0 %	0 %	0

^C . 1 . 3 ⁸ ^I ⁿ ^d i c ^a t e ^w ^h ^e t h ^e ^r t h ^e ^a ^u ^d i t ^r ^e ^p ^o ^r ^t ^o ⁿ t h ^e ^p ^r ^e ^v i o ^u ^s ^y ^e ^a ^r ' s f i n ^a ⁿ ^c i a ^l ^s t a t e ^m ^e ⁿ t s i s ^q ^u ^a l i f i e ^d ^o ^r i n ^c l u ^d ^e ^s ^r ^e ^s ^e ^r ^v ^a t i o ⁿ ^s . ^I ^f ^s ^o , i n ^d i c ^a t e t h ^e ^a ^c ^c ^o ^u ⁿ ^t ^g i v ^e ⁿ t o ^s ^h ^a ^r ^e ^h ^o l d ^e ^r ^s ^b ^y t h ^e ^c ^h ^a i r ^m ^a ⁿ ^o ^f t h ^e ^a ^u ^d i t ^c ^o ^m ^m i t t e ^e ^o ^f t h ^e i r ^s ^c ^o ^p ^e ^a ⁿ ^d ^c ^o ⁿ t e ⁿ t .

^Y ^e ^s ^N ^o ^X

x p l a n a t i o n t h e o f r e a s o n s E

^C . 1 . 3 ⁹ ^S t a t e t h ^e ⁿ ^u ^m ^b ^e ^r ^o ^f ^c ^o ⁿ ^s ^e ^c ^u t i v ^e ^y ^e ^a ^r ^s t h ^e ^c ^u ^r ^r ^e ⁿ ^t ^a ^u ^d i t f i r ^m ^h ^a ^s ^b ^e ^e ⁿ ^a ^u ^d i t i n ^g t h ^e ^a ⁿ ⁿ ^u ^a ^l f i n ^a ⁿ ^c i a ^l ^s t a t e ^m ^e ⁿ t s ^o ^f t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^a ⁿ ^d / ^o ^r i t s ^g ^r ^o ^u ^p . ^L ⁱ ^k ^e ^w i s ^e , i n ^d i c ^a t e ^h ^o ^w ^m ^a ⁿ ^y ^y ^e ^a ^r ^s t h ^e ^c ^u ^r ^r ^e ⁿ ^t ^a ^u ^d i t f i r ^m ^h ^a ^s ^b ^e ^e ⁿ ^a ^u ^d i t i n ^g t h ^e ^a ⁿ ⁿ ^u ^a ^l f i n ^a ⁿ ^c i a ^l ^s t a t e ^m ^e ⁿ t s ^a ^s ^a ^p ^e ^r ^c ^e ⁿ t a ^g ^e ^o ^f t h ^e t o t a ^l ⁿ ^u ^m ^b ^e ^r ^o ^f ^y ^e ^a ^r ^s f o ^r ^w ^h i c ^h t h ^e f i n ^a ⁿ ^c i a ^l ^s t a t e ^m ^e ⁿ t s ^h ^a ^v ^e ^b ^e ^e ⁿ ^a ^u ^d i t e ^d :

	o p a n y C m	r o u p G
o f c o n s e c u t i v e N u m b e r y e a r s	6	6

	o p a n y C m	r o u p G

	o p a n y C m	r o u p G
a u d i t e d t h e c u r r e n t a u d i t f i r m N u m b e r o f y e a r s b y / n u m b e r o f	1 0 0	1 0 0
t h e p a n y ' s f i n a n c i a l s t a t e m a u d i t e d ( % ) y e a r s c o m e n t s h a v e b e e n

^C . ¹ . ⁴ ⁰ ^I ⁿ ^d i c ^a t e ^w ^h ^e t h ^e ^r t h ^e ^r ^e ^a ^r ^e ^p ^r ^o ^c ^e ^d ^u ^r ^e ^s i n ^p l a ^c ^e f o ^r ^d i r ^e ^c t o ^r ^s t o ^r ^e ^c ^e i v ^e ^e ^x t e ^r ⁿ ^a ^l ^a ^d ^v i c ^e :

^Y ^e ^s ^X ^N ^o

^D ^e t a i l s ^o ^f t h ^e ^p ^r ^o ^c ^e ^d ^u ^r ^e :

^A r t i ^c l e ² ⁶ ^o ^f t h ^e ^B ^o ^a r d ^R ^e ^g ^u l a t i o ⁿ ^s ^s t i p ^u l a t e ^s :

¹ . I n ^o r d ^e ^r t o ^h ^e l p t h ^e ^m ^f ^u ^l ^f i l t h ^e i r ^d ^u t i e ^s , ^a ⁿ ^y ^o ^f t h ^e ^d i r e ^c t o ^r ^s ^m ^a ^y ^s ^e ^e ^k t h ^e ^a ^s ^s ⁱ ^s t a ⁿ ^c ^e t h ^e ^y ⁿ ^e ^e ^d ^f r o ^m t h ^e ^C ^o ^m ^p ^a ⁿ ^y . ^T ^o t h ⁱ ^s ^e ⁿ ^d , t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^w i l l ^e ⁿ ^a ^b l e t h ^e ^a ^p ^p r o ^p r i a t e ^c ^h ^a ⁿ ⁿ ^e ^l ^s , ^w ^h ⁱ ^c ^h , i n ^s ^p ^e ^c i a ^l ^c i r ^c ^u ^m ^s t a ⁿ ^c ^e ^s , ^m ^a ^y i n ^c l u ^d ^e ^e ^x t e r n ^a ^l ^a ^d ^v ⁱ ^s ^o ^r ^y ^s ^e ^r ^v ⁱ ^c ^e ^s ^w ^h ^o ^s ^e ^c ^o ^s ^t ^w ^o ^u l d ^b ^e ^b ^o r n ^e ^b ^y t h ^e ^C ^o ^m ^p ^a ⁿ ^y . ^A ⁿ ^y ^s ^u ^c ^h ^e ⁿ ^g ^a ^g ^e ^m ^e ⁿ ^t ^m ^u ^s ^t ⁿ ^e ^c ^e ^s ^s ^a r i l ^y r e l a t e t o ^s ^p ^e ^c ⁱ ^f ⁱ ^c ^p r o ^b l e ^m ^s ^o ^f ^a ^c ^e r t a i n ^s ^c ^a l e ^a ⁿ ^d ^c ^o ^m ^p l e ^x i t ^y ^a r i ^s i n ^g i n t h ^e ^p ^e ^r ^f ^o r m ^a ⁿ ^c ^e ^o ^f t h ^e i r ^d ^u t i e ^s .

² . ^T ^h ^e ^d ^e ^c ⁱ ^s i o ⁿ t o ^h i r e ^e ^x t e r n ^a ^l ^a ^d ^v ⁱ ^s ^e ^r ^s ^a ^t ^a ^c ^o ^s ^t t o t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^m ^u ^s ^t ^b ^e ⁿ ^o t i ^f i e ^d t o t h ^e ^C ^h ^a i r m ^a ⁿ ^a ⁿ ^d ^m ^a ^y ^b ^e ^v ^e t o ^e ^d ^b ^y t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ⁱ ^f i t ^c ^a ⁿ ^c ^e r t i f y t h ^a ^t :

a . I t ⁱ ^s ⁿ ^o ^t ⁿ ^e ^c ^e ^s ^s ^a ^r ^y t o ^d ^u ^e ^p ^e ^r ^f ^o r m ^a ⁿ ^c ^e ^o ^f t h ^e ^d ^u t i e ^s i n ^c ^u ^m ^b ^e ⁿ ^t ^u ^p ^o ⁿ t h ^e ^e ^x t e r n ^a ^l ^d i r e ^c t o ^r ^s ;
b . I t ^s ^c ^o ^s ^t ⁱ ^s ⁿ ^o ^t r e ^a ^s ^o ⁿ ^a ^b l e i n l i ^g ^h ^t ^o ^f t h ^e ^s ^c ^a l e ^o ^f t h ^e ⁱ ^s ^s ^u ^e ^o ^r i n r e l a t i o ⁿ t o t h ^e

^C ^o ^m ^p ^a ⁿ ^y ' s ^a ^s ^s ^e t s ^o ^r r e ^v ^e ⁿ ^u ^e ^s ; ^o ^r

c . ^T ^h ^e ^e ^x ^p ^e r t i s ^e ^s ^o ^u ^g ^h ^t ^c ^a ⁿ ^b ^e ^a ^d ^e ^q ^u ^a t e l y f u r n i s ^h ^e ^d ^b ^y t h ^e ^C ^o ^m ^p ^a ⁿ ^y ' s ^o ^w ⁿ ^e ^x ^p ^e r t ^s ^a ⁿ ^d ^s ^p ^e ^c i a l i ^s ^t ^s .
^C . 1 . 4 ¹ ^I ⁿ ^d i c ^a t e ^w ^h ^e t h ^e ^r t h ^e ^r ^e ^a ^r ^e ^p ^r ^o ^c ^e ^d ^u ^r ^e ^s f o ^r ^p ^r ^o ^v i d i n ^g ^d i r ^e ^c t o ^r ^s ^w i t h t h ^e i n f o ^r ^m ^a t i o ⁿ t h ^e ^y ⁿ ^e ^e ^d t o ^p ^r ^e ^p ^a ^r ^e f o ^r t h ^e ^m ^e ^e t i n ^g ^s ^o ^f t h ^e ^g ^o ^v ^e ^r ⁿ i n ^g ^b ^o ^d i e ^s ^s ^u f f i c i e ⁿ t l y i n ^a ^d ^v ^a ⁿ ^c ^e :

^Y ^e ^s ^X ^N ^o

^D ^e t a i l s ^o ^f t h ^e ^p ^r ^o ^c ^e ^d ^u ^r ^e :

^A r t i ^c l e 1 6 ^o ^f t h ^e ^B ^o ^a r d ^R ^e ^g ^u l a t i o ⁿ ^s ^e ^s t a ^b l i ^s ^h ^e ^s t h ^e ^f ^o l l o ^w i n ^g ^u ⁿ ^d ^e ^r ^h ^e ^a ^d i n ^g ^s ³ ^a ⁿ ^d ⁴ :

3 . ^B ^o ^a r d ^m ^e ^e t i n ^g ^s ^m ^u ^s ^t ^b ^e ^c ^a l l e ^d ^b ^y t h ^e ^S ^e ^c r e t a ^r ^y ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^o ^r ^w ^h ^o ^e ^v ^e ^r ^s ^u ^b ^s t i t u t e ^s ^h i m i n t h ⁱ ^s t a ^s ^k , ^a ^s ^d ^u ^l ^y ^a ^u t h ^o r i ^s ^e ^d ^b ^y i t ^s ^C ^h ^a i r m ^a ⁿ , ^u ^s i n ^g ^a ⁿ ^y ^m ^e t h ^o ^d t h ^a ^t ^e ⁿ ^s ^u r e ^s ⁿ ^o t i c ^e ^d ^e l i v ^e r y . ^M ^e ^e t i n ^g ^s ^m ^u ^s ^t ^b ^e ^c ^a l l e ^d ^w i t h ^a ^t l e ^a ^s ^t t h r e ^e ^d ^a ^y ^s ' ⁿ ^o t i ^c ^e . ^T ^h ^e ^c ^a l l ⁿ ^o t i ^c ^e ^m ^u ^s ^t ^a l w ^a ^y ^s i n ^c l u ^d ^e t h ^e ^m ^e ^e t i n ^g ^a ^g ^e ⁿ ^d ^a ^a ⁿ ^d ^b ^e ^a ^c ^c ^o ^m ^p ^a ⁿ i e ^d ^b ^y t h ^e r e l e ^v ^a ⁿ ^t i n ^f ^o r m ^a t i o ⁿ , ^d ^u ^l ^y ^s ^u ^m ^m ^a r i ^z ^e ^d ^a ⁿ ^d ^d ^o ^c ^u ^m ^e ⁿ t e ^d .

⁴ . ^T ^h ^e ^C ^h ^a i r m ^a ⁿ ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^h ^a ^s t h ^e ^p ^o ^w ^e ^r t o ^c ^a l l ^e ^x t r a ^o r d i n ^a ^r ^y ^B ^o ^a r d ^m ^e ^e t i n ^g ^s ^w ^h ^e ⁿ ^e ^v ^e ^r ^h ^e ^b ^e l i e ^v ^e ^s t h ^e ^c i r ^c ^u ^m ^s t a ⁿ ^c ^e ^s ^s ^o ^w ^a r r a ⁿ t , ^w ^a ⁱ ^v i n ^g t h ^e ^m i n i m ^u ^m ⁿ ^o t i ^c ^e ^p ^e r i o ^d ^a ⁿ ^d ^o t h ^e ^r r e ^q ^u i r e ^m ^e ⁿ ^t ^s ^s ^e ^t ^o ^u ^t ^a ^b ^o ^v ^e ^f ^o ^r ^o r d i n ^a ^r ^y ^m ^e ^e t i n ^g ^s . ^N ^o t w i t h ^s t a ⁿ ^d i n ^g t h ^e ^f ^o r e ^g ^o i n ^g , ^a ⁿ ^e f f ^o r t ^m ^u ^s ^t ^b ^e ^m ^a ^d ^e t o ^p r o ^v i d ^e t h ^e ^d i r e ^c t o ^r ^s ^w i t h ^a ⁿ ^y r e ^q ^u i r e ^d ^d ^o ^c ^u ^m ^e ⁿ t a t i o ⁿ ^s ^u f f ⁱ ^c i e ⁿ t l ^y i n ^a ^d ^v ^a ⁿ ^c ^e ^o ^f t h ^e ^e ^x t r a ^o r d i n ^a ^r ^y ^m ^e ^e t i n ^g .

I n ^a ^d ^d i t i o ⁿ , ^a r t i ^c l e ² ⁵ ^o ^f t h ^e ^B ^o ^a r d ^R ^e ^g ^u l a t i o ⁿ ^s ^s t i p ^u l a t e ^s :

¹ . ^D i r e ^c t o ^r ^s ^m ^a ^y r e ^q ^u ^e ^s ^t i n ^f ^o r m ^a t i o ⁿ ^a ^b ^o ^u ^t ^a ⁿ ^y ^m ^a t t e ^r ^f ^a l l i n ^g ^w i t h i n t h ^e ^p ^u ^r ^v i e ^w ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s , t o ^w ^h ⁱ ^c ^h ^e ⁿ ^d t h ^e ^y ^m ^a ^y ^e ^x ^a ^m i n ^e t h ^e ^C ^o ^m ^p ^a ⁿ ^y ' s ^b ^o ^o ^k ^s , ^a ^c ^c ^o ^u ⁿ t i n ^g r e ^c ^o r d ^s ^a ⁿ ^d ^o t h ^e ^r ^d ^o ^c ^u ^m ^e ⁿ t a t i o ⁿ . ^T ^h ⁱ ^s r i ^g ^h ^t t o i n ^f ^o r m ^a t i o ⁿ ^a ^p ^p l i e ^s t o ^a l l ^s ^u ^b ^s i d i a r i e ^s ^a ⁿ ^d , ^w ^h ^e r e ^v ^e ^r ^p r a ^c t i ^c ^a ^b l e , i n ^v ^e ^s t e ^e ^s .

² . I n ^f ^o r m ^a t i o ⁿ r e ^q ^u ^e ^s ^t ^s ^s ^h ^o ^u l d ^b ^e ^a ^d ^d r e ^s ^s ^e ^d t o t h ^e ^S ^e ^c r e t a ^r ^y ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s , ^w ^h ^o ^w i l l l e ^t t h ^e ^C ^h ^a i r m ^a ⁿ ^o ^f t h ^e ^B ^o ^a r d ^a ⁿ ^d ^a ^p ^p r o ^p r i a t e ^c ^o ⁿ t a ^c ^t ^p ^e ^r ^s ^o ⁿ ^w i t h i n t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^k ⁿ ^o ^w .

3 . ^T ^h ^e ^S ^e ^c r e t a ^r ^y ^s ^h ^a l l ^w ^a r n t h ^e ^d i r e ^c t o ^r i n ^q ^u ^e ^s t i o ⁿ ^o ^f t h ^e ^c ^o ⁿ ^f i d ^e ⁿ t i a ^l ⁿ ^a t u r e ^o ^f t h ^e i n ^f ^o r m ^a t i o ⁿ r e ^q ^u ^e ^s t e ^d ^a ⁿ ^d ^p r o ^v i d ^e ^d ^a ⁿ ^d ^o ^f ^h ⁱ ^s / h ^e ^r ^c ^o ⁿ ^f i d ^e ⁿ t i a l i t ^y ^d ^u ^t ^y ^u ⁿ ^d ^e ^r t h ^e ^s ^e ^B ^o ^a r d ^R ^e ^g ^u l a t i o ⁿ ^s .

⁴ . ^T ^h ^e ^C ^h ^a i r m ^a ⁿ ^m ^a ^y ^d ^e ⁿ ^y t h ^e i n ^f ^o r m ^a t i o ⁿ r e ^q ^u ^e ^s t e ^d ⁱ ^f ^h ^e ^c ^o ⁿ ^s i d ^e ^r ^s : ( ⁱ ) i t ⁱ ^s ⁿ ^o ^t r e ^q ^u i r e ^d ^f ^o ^r ^d ^u ^e ^p ^e ^r ^f ^o r m ^a ⁿ ^c ^e ^o ^f t h ^e ^d ^u t i e ^s i n ^c ^u ^m ^b ^e ⁿ ^t ^u ^p ^o ⁿ t h ^e ^d i r e ^c t o ^r ; ^o ^r ( i i ) i t ^s ^c ^o ^s ^t i s ⁿ ^o ^t r e ^a ^s ^o ⁿ ^a ^b l e i n l i g ^h ^t ^o ^f t h ^e ^s ^c ^a l e ^o ^f t h ^e i s ^s ^u ^e ^o ^r i n r e l a t i o ⁿ t o t h ^e ^C ^o ^m ^p ^a ⁿ ^y ' s ^a ^s ^s ^e t s ^o ^r r e ^v ^e ⁿ ^u ^e ^s .

^C . 1 . 4 ² ^I ⁿ ^d i c ^a t e ^w ^h ^e t h ^e ^r t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^h ^a ^s ^a ⁿ ^y ^r ^u l e ^s ^o ^b l i g i n ^g ^d i r ^e ^c t o ^r ^s t o i n f o ^r ^m t h ^e ^b ^o ^a ^r ^d ^o ^f ^a ⁿ ^y ^c i r ^c ^u ^m ^s t a ⁿ ^c ^e t h ^a ^t ^m i g ^h ^t ^h ^a ^r ^m t h ^e ^o ^r ^g ^a ⁿ i s ^a t i o ⁿ ' s ^g ^o ^o ^d ⁿ ^a ^m ^e ^o ^r ^r ^e ^p ^u t a t i o ⁿ ^a ⁿ ^d t e ⁿ ^d ^e ^r i n ^g t h ^e i r ^r ^e ^s i g ⁿ ^a t i o ⁿ ^a ^s t h ^e ^c ^a ^s ^e ^m ^a ^y ^b ^e :

^Y ^e ^s ^X ^N ^o

^D ^e t a i l s ^o ^f t h ^e ^r ^u l e ^s

^A r t i ^c l e ³ ⁶ ^o ^f t h ^e ^B ^o ^a r d ^R ^e ^g ^u l a t i o ⁿ ^s ^s t i p ^u l a t e ^s :

¹ . ^D i r e ^c t o ^r ^s ^m ^u ^s ^t i n ^f ^o r m t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^o ^f t h ^e ^s ^h ^a r e ^s t h ^e ^y ^h ^o l d i n i t ^e i t h ^e ^r ^d i r e ^c t l ^y ^o ^r ^v i a t h ^e ^p ^e ^r ^s ^o ⁿ ^s i n ^d ⁱ ^c ^a t e ^d i n ^a r t i ^c l e ³ ¹ ^o ^f t h ^e ^B ^o ^a r d ^R ^e ^g ^u l a t i o ⁿ ^s , ^a l l ^o ^f ^w ^h ⁱ ^c ^h i n ^k ^e ^e ^p i n ^g ^w i t h t h ^e ^p r o ^v ⁱ ^s i o ⁿ ^s ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y ' s I n t e r n ^a ^l ^C ^o ^d ^e ^o ^f ^C ^o ⁿ ^d ^u ^c ^t i n ^S ^e ^c ^u r i t i e ^s ^M ^a r k ^e ^t ^s .

² . ^D i r e ^c t o ^r ^s ^m ^u ^s ^t ^a ^l ^s ^o i n ^f ^o r m t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^o ^f ^d i r e ^c t o ^r ^s ^h i p ^s ^h ^e l d ^a ^t ^o t h ^e ^r l i ^s t e ^d

^c ^o ^m ^p ^a ⁿ i e ^s ^a ⁿ ^d , i n ^g ^e ⁿ ^e r a l , ^o ^f ^f ^a ^c ^t ^s , ^c i r ^c ^u ^m ^s t a ⁿ ^c ^e ^s ^o ^r ^s i t u ^a t i o ⁿ ^s ^o ^f ^p ^o t e ⁿ t i a ^l ^s ⁱ ^g ⁿ ⁱ ^f ⁱ ^c ^a ⁿ ^c ^e ^w i t h r e ^s ^p ^e ^c ^t t o t h ^e i r ^p ^e ^r ^f ^o r m ^a ⁿ ^c ^e ^a ^s ^d i r e ^c t o ^r ^s ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y , ^a ^s ^p r o ^v i d ^e ^d ^f ^o ^r i n t h ^e ^s ^e ^R ^e ^g ^u l a t i o ⁿ ^s .

3 . ^D i r e ^c t o ^r ^s ^m ^u ^s ^t ^s i m i l a r l ^y i n ^f ^o r m t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^o ^f ^a ⁿ ^y ^c i r ^c ^u ^m ^s t a ⁿ ^c ^e t h ^a ^t ^c ^o ^u l d ^h ^a r m t h ^e ^C ^o ^m ^p ^a ⁿ ^y ' s ⁿ ^a ^m ^e ^o ^r r e ^p ^u t a t i o ⁿ , ^w i t h ^p ^a r t i ^c ^u l a ^r ^m ^e ⁿ t i o ⁿ ^o ^f ^a ⁿ ^y ^c r i m i n ^a ^l ^c ^h ^a ^r ^g ^e ^s ^b r o ^u ^g ^h ^t ^a ^g ^a i n ^s ^t t h ^e ^m ^a ⁿ ^d t h ^e ^p r o ^g r e ^s ^s ^o ^f ^a ⁿ ^y ^s ^u ^b ^s ^e ^q ^u ^e ⁿ ^t ^p r o ^c ^e ^e ^d i n ^g ^s . ^I ^f ^a ^d i r e ^c t o ^r ⁱ ^s i n ^d ⁱ ^c t e ^d ^o ^r t r i e ^d ^f ^o ^r ^a ⁿ ^y ^o ^f t h ^e ^c r i m ^e ^s i t e ^m ⁱ ^s ^e ^d i n ^a r t i ^c l e ² 1 3 ^o ^f t h ^e ^C ^o r p ^o r a t e ^E ⁿ t e r p r i ^s ^e ^s ^A ^c t , t h ^e ^B ^o ^a r d ^m ^u ^s ^t i n ^v ^e ^s t i ^g ^a t e t h ^e ^m ^a t t e ^r ^a ^s ^q ^u ⁱ ^c ^k ^l ^y ^a ^s ^p ^o ^s ^s ⁱ ^b l e ^a ⁿ ^d , i n ^v i e ^w ^o ^f t h ^e ^s ^p ^e ^c ⁱ ^f ⁱ ^c ^c i r ^c ^u ^m ^s t a ⁿ ^c ^e ^s , ^d ^e ^c i d ^e ^w ^h ^e t h ^e ^r ^o ^r ⁿ ^o ^t t o ^c ^a l l ^o ⁿ t h ^a ^t ^d i r e ^c t o ^r t o r e ^s ⁱ ^g ⁿ .

^A r t i ^c l e ² ³ ^o ^f t h ^e ^B ^o ^a r d ^R ^e ^g ^u l a t i o ⁿ ^s ^e ^s t a ^b l i ^s ^h ^e ^s ^a ^s ^w ^e l l t h ^e ^c i r ^c ^u ^m ^s t a ⁿ ^c ^e ^s ^u ⁿ ^d ^e ^r ^w ^h ⁱ ^c ^h ^d i r e ^c t o ^r ^s ^a r e ^o ^b l i ^g ^e ^d t o r e ^s ⁱ ^g ⁿ . ^S ^e ^e ^s ^e ^c t i o ⁿ 1 . 2 1 .

^C . 1 . 4 ³ ^I ⁿ ^d i c ^a t e ^w ^h ^e t h ^e ^r ^a ⁿ ^y ^m ^e ^m ^b ^e ^r ^o ^f t h ^e ^b ^o ^a ^r ^d ^o ^f ^d i r ^e ^c t o ^r ^s ^h ^a ^s ⁿ ^o t i f i e ^d t h ^e ^c ^o ^m ^p ^a ⁿ ^y t h ^a ^t ^h ^e ^o ^r ^s ^h ^e ^h ^a ^s ^b ^e ^e ⁿ i n ^d i c t e ^d ^o ^r t r i e ^d f o ^r ^a ⁿ ^y ^o ^f t h ^e ^o f f e ⁿ ^c ^e ^s l i s t e ^d i n ^a ^r t i c l e ² ¹ ³ ^o ^f t h ^e ^S ^p ^a ⁿ i s ^h ^C ^o ^r ^p ^o ^r ^a t e ^E ⁿ t e ^r ^p ^r i s ^e ^s ^A ^c t :

^e ^s ^N ^o ^X

d i r e c t o r N a e o f m	f f e n c e O	s e r v a t i o n s O b

^I ⁿ ^d i c ^a t e ^w ^h ^e t h ^e ^r t h ^e ^b ^o ^a ^r ^d ^h ^a ^s ^a ⁿ ^a l y ^s ^e ^d t h ^e ^c ^a ^s ^e . ^I ^f ^s ^o , ^g i v ^e ^a ^s ^u ^b ^s t a ⁿ t i a t e ^d ^e ^x ^p l a ⁿ ^a t i o ⁿ ^o ^f t h ^e ^d ^e ^c i s i o ⁿ t a ^k ^e ⁿ ^a ^s t o ^w ^h ^e t h ^e ^r ^o ^r ⁿ ^o ^t t h ^e ^d i r ^e ^c t o ^r i n ^q ^u ^e ^s t i o ⁿ ^s ^h ^o ^u l d ^r ^e ^m ^a i n i n ^o f f i c ^e ^a ⁿ ^d , ^a ^s ^w ^a ^r ^r ^a ⁿ t e ^d , ^o ^u t l i n ^e t h ^e ^a ^c t i o ⁿ ^s t a ^k ^e ⁿ ^o ^r ^p l a ⁿ ⁿ ^e ^d ^b ^y t h ^e ^b ^o ^a ^r ^d ^o ^f ^d i r ^e ^c t o ^r ^s ^a ^s ^o ^f t h ^e ^d ^a t e ^o ^f t h i s ^r ^e ^p ^o ^r t .

^Y ^e ^s ^N ^o

e c i s i o n / a c t i o n t a k e n D	s t a n t i a t e d e x p l a n a t i o n u S b

^C . 1 . 4 ⁴ ^L i s ^t ^a ⁿ ^y ^s i g ⁿ i f i c ^a ⁿ ^t ^a ^g ^r ^e ^e ^m ^e ⁿ t s ^e ⁿ t e ^r ^e ^d i n t o ^b ^y t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^w ^h i c ^h t a ^k ^e ^e f f e ^c t , ^a l t e ^r ^o ^r t e ^r ^m i n ^a t e ^u ^p ^o ⁿ ^a ^c ^h ^a ⁿ ^g ^e ^o ^f ^c ^o ⁿ t r ^o ^l ^o ^f t h ^e ^c ^o ^m ^p ^a ⁿ ^y f o l l o ^w i n ^g ^a t a ^k ^e ^o ^v ^e ^r ^b i d ^a ⁿ ^d t h ^e ^e f f e ^c t s t h ^e ^r ^e ^o f .
^C . 1 . 4 ⁵ ^I ⁿ ^d i c ^a t e ( i n ^d i v i d ^u ^a l l y ^a ⁿ ^d ^o ⁿ ^a ^g ^g ^r ^e ^g ^a t e ) t h ^e ^a ^g ^r ^e ^e ^m ^e ⁿ t s ^b ^e t w ^e ^e ⁿ t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^a ⁿ ^d i t s ^d i r ^e ^c t o ^r ^s , ^o f f i c ^e ^r ^s ^o ^r ^e ^m ^p l o ^y ^e ^e ^s t h ^a ^t ^p ^r ^o ^v i d ^e f o ^r t e ^r ^m i n ^a t i o ⁿ ^b ^e ⁿ ^e f i t s ^o ^r ^g ^u ^a ^r ^a ⁿ t e ^e ^o ^r ^g ^o l d ^e ⁿ ^p ^a ^r ^a ^c ^h ^u t e ^c l a ^u ^s ^e ^s ^u ^p ^o ⁿ t h ^e i r ^r ^e ^s i g ⁿ ^a t i o ⁿ ^o ^r ^u ⁿ f a i r ^d i s ^m i s ^s ^a ^l ^o ^r t e ^r ^m i n ^a t i o ⁿ ^o ^f t h ^e ^e ^m ^p l o ^y ^m ^e ⁿ ^t ^r ^e l a t i o ⁿ ^s ^h i p ^a ^s ^a ^r ^e ^s ^u l t ^o ^f ^a t a ^k ^e ^o ^v ^e ^r ^b i d ^o ^r ^o t h ^e ^r ^k i n ^d ^o ^f t r ^a ⁿ ^s ^a ^c t i o ⁿ .

e n e f i c i a r i e s N u e r o f m b b
e n e f i c i a r y y p e o f T b	e s c r i p t i o n o f t h e a g r e e e n t D m

^I ⁿ ^d i c ^a t e ^w ^h ^e t h ^e ^r t h ^e ^s ^e ^a ^g ^r ^e ^e ^m ^e ⁿ t s ^m ^u ^s ^t ^b ^e ^r ^e ^p ^o ^r t e ^d t o ^a ⁿ ^d / ^o ^r ^a ^p ^p ^r ^o ^v ^e ^d ^b ^y t h ^e ^g ^o ^v ^e ^r ⁿ i n ^g ^b ^o ^d i e ^s ^o ^f t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^o ^r i t s ^g ^r ^o ^u ^p :

	d i r e c t o r s o a r d o f	e e t i n g e n e r a l G m
a u t h o r i s i n g t h e o d y c l a u s e s B	B

	e s Y	N o
s h a r e h o l d e r s i n f o r t h e s e c l a u s e s i n r e e d o f g e n e r a l A m
e e t i n g ? m

^C . 2 . ^o ^a ^r ^d ^c ^o ^m ^m i t t e ^e ^s

^C . 2 . 1 ^L i s ^t ^a l l t h ^e ^b ^o ^a ^r ^d ^c ^o ^m ^m i t t e ^e ^s , t h ^e i r ^m ^e ^m ^b ^e ^r ^s ^a ⁿ ^d t h ^e i r ^m ^a ^k ^e Æ u ^p i n t e ^r ^m ^s ^o ^f ^p ^r ^o ^p ^r i e t a ^r ^y ^a ⁿ ^d i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^d i r ^e ^c t o ^r ^s :

^E ^X ^E ^C ^T ^I ^V ^E ^O ^R ^S ^T ^E ^E ^R ^I ^N ^G ^C ^O ^M ^M ^I ^T ^T ^E ^E

N a e m	o s i t i o n P	c a t e g o r y J o b

e x e c u t i v e d i r e c t o r s % o f
p r o p r i e t a r y d i r e c t o r s % o f
i n d e p e n d e n t d i r e c t o r s % o f
o t h e r e x t e r n a l d i r e c t o r s % o f

^E ^x ^p l a i n t h ^e ^d ^u t i e ^s ^v ^e ^s t e ^d i n t h i s ^c ^o ^m ^m i t t e ^e , ^d ^e ^s ^c ^r ⁱ ^b ^e i t s ^p ^r ^o ^c ^e ^d ^u ^r ^e ^s ^a ⁿ ^d ^r ^u l e ^s ^o ^f ^o ^r ^g ^a ⁿ i s ^a t i o ⁿ ^a ⁿ ^d ^o ^p ^e ^r ^a t i o ⁿ ^a ⁿ ^d ^s ^u ^m ^m ^a ^r i s ^e t h ^e ^m ^o ^s ^t ⁱ ^m ^p ^o ^r t a ⁿ ^t ^a ^c t i v i t i e ^s ^u ⁿ ^d ^e ^r t a ^k ^e ⁿ ^b ^y i t ^d ^u ^r i n ^g t h ^e ^r ^e ^p ^o ^r t i n ^g ^p ^e ^r i o ^d .

^D ^u t i e ^s

^W i t h ^o ^u ^t ^p r e ^j ^u ^d ⁱ ^c ^e t o t h ^e ^a ^u t h ^o r i t ^y t h ^a ^t ^m ^a ^y ^b ^e ^g r a ⁿ t e ^d t o ^a ⁿ ^y ^p ^e ^r ^s ^o ⁿ , t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^m ^a ^y ^s ^e ^t ^u ^p ^a ^p ^e r m ^a ⁿ ^e ⁿ ^t ^E ^x ^e ^c ^u t i ^v ^e ^C ^o ^m ^m i t t e ^e . ^T ^h ^e r u l e ^s ^f ^o ^r ^g ^o ^v ^e r n i n ^g ^a ⁿ ^d ^o ^p ^e r a t i o ⁿ ^o ^f t h ^e ^E ^x ^e ^c ^u t i ^v ^e ^o ^r ^S t e ^e r i n ^g ^C ^o ^m ^m i t t e ^e ^a r e ^s ^e ^t ^f ^o r t h i n ^a r t i ^c l e ⁴ ¹ ^o ^f t h ^e ^A r t i ^c l e ^s ^o ^f ^A ^s ^s ^o ^c i a t i o ⁿ ^a ⁿ ^d ^a r t i ^c l e 1 3 ^o ^f t h ^e ^B ^o ^a r d ^R ^e ^g ^u l a t i o ⁿ ^s .

^O ^r ^g ^a ⁿ i s ^a t i o ⁿ ^a ⁿ ^d ^o ^p ^e ^r ^a t i o ⁿ

^T ^h ^e ^E ^x ^e ^c ^u t i ^v ^e ^C ^o ^m ^m i t t e ^e ^s ^h ^a l l ^c ^o ^m ^p r i ^s ^e ^a ^t l e ^a ^s ^t t h r e ^e ^a ⁿ ^d ^a ^t ^m ^o ^s ^t ^s ^e ^v ^e ⁿ ^m ^e ^m ^b ^e ^r ^s , ^a ⁿ ^d i t ^m ^a ^y ^a ^l ^s ^o ^a ^p ^p ^o i n ^t ^a ^C ^h i e ^f ^E ^x ^e ^c ^u t i ^v ^e ^O f f ⁱ ^c ^e ^r ^a ^t t h ^e ^p r o ^p ^o ^s ^a ^l ^o ^f t h ^e ^C ^h ^a i r m ^a ⁿ ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ; t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^m ^a ^y ^d ^e l e ^g ^a t e i n t h ^e ^m , ^o ⁿ ^a t e ^m ^p ^o r a ^r ^y ^o ^r ^p ^e ^r ^m ^a ⁿ ^e ⁿ ^t ^b ^a ^s ⁱ ^s , ^a ⁿ ^y ^a ⁿ ^d ^a l l ^p ^o ^w ^e ^r ^s t h ^a ^t ^a r e ⁿ ^o ^t r e ^s ^e ^r ^v ^e ^d t o t h ^e ^B ^o ^a r d ^u ⁿ ^d ^e ^r l a ^w . ^V ^a l i d ^d ^e l e ^g ^a t i o ⁿ ^a ⁿ ^d t h ^e ^d ^e ^s ⁱ ^g ⁿ ^a t i o ⁿ ^o ^f t h ^e ^m ^e ^m ^b ^e ^r ^s ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s t o ^s ^u ^c ^h ^p ^o ^s i t i o ⁿ ^s ^s ^h ^a l l r e ^q ^u i r e t h ^e ^f ^a ^v ^o r a ^b l e ^v ^o t e ^o ^f t w ^o ï t h i r d ^s ^o ^f t h ^e ^m ^e ^m ^b ^e ^r ^s ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^a ⁿ ^d ^s ^h ^a l l ⁿ ^o ^t t a ^k ^e ^e f f ^e ^c ^t ^u ⁿ t i l t h ^e r e ^s ^o l u t i o ⁿ ^h ^a ^s ^b ^e ^e ⁿ ^d ^u ^l ^y r e ^g ⁱ ^s t e r e ^d i n t h ^e ^C ^o ^m ^p ^a ⁿ i e ^s ^R ^e ^g ⁱ ^s t e r .

^T ^h ^e ^C ^o ^m ^p ^a ⁿ ^y ^s ^h ^a l l ^e ⁿ ^d ^e ^a ^v ^o ^u r , t o t h ^e ^e ^x t e ⁿ ^t ^p ^o ^s ^s ⁱ ^b l e , t o ^h ^a ^v ^e t h ^e ^c ^o ^m ^p ^o ^s i t i o ⁿ ^o ^f t h ^e ^E ^x ^e ^c ^u t i ^v ^e ^C ^o ^m ^m i t t e ^e ^m i r r o ^r t h ^a ^t ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s i n t e r m ^s ^o ^f t h ^e ^m ⁱ ^x ^o ^f ^d i r e ^c t o ^r ^t ^y ^p ^e ^s . ^T ^h ^e ^S ^e ^c r e t a ^r ^y ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^s ^h ^a l l ^a ^l ^s ^o ^s ^e ^r ^v ^e ^a ^s t h ^e ^S ^e ^c r e t a ^r ^y ^o ^f t h ^e ^E ^x ^e ^c ^u t i ^v ^e ^C ^o ^m ^m i t t e ^e .

^T ^h ^e ^C ^h ^a i r m ^a ⁿ ^o ^f t h ^e ^E ^x ^e ^c ^u t i ^v ^e ^C ^o ^m ^m i t t e ^e ^s ^h ^a l l r e ^p ^o r t t o t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^o ⁿ t h ^e ^m ^a t t e ^r ^s ^d ^e ^b ^a t e ^d ^a ⁿ ^d r e ^s ^o l u t i o ⁿ ^s t a ^k ^e ⁿ ^a ^t i t ^s ^m ^e ^e t i n ^g ^s ; i t ^s ^h ^a l l r e ^c ^o r d t h ^e ^m i n ^u t e ^s ^o ^f ^a l l i t ^s ^m ^e ^e t i n ^g ^s ^a ⁿ ^d ^s ^u ^b ^m i t ^c ^o ^p i e ^s t h ^e r e ^o ^f t o ^a l l ^o ^f t h ^e ^B ^o ^a r d ^m ^e ^m ^b ^e ^r ^s .

^A ^c t i v i t i e ^s

^N ^o t e t h ^a ^t ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^d i d ⁿ ^o ^t ^a ^v ^a i l ^o ^f t h ⁱ ^s ^p ^o ^w ^e ^r t o ^s ^e ^t ^u ^p ^a ⁿ ^E ^x ^e ^c ^u t i ^v ^e ^C ^o ^m ^m i t t e ^e i n ² ⁰ 1 9 .

^I ⁿ ^d i c ^a t e ^w ^h ^e t h ^e ^r t h ^e ^c ^o ^m ^p ^o ^s i t i o ⁿ ^o ^f t h ^e ^e ^x ^e ^c ^u t i v ^e ^o ^r ^s t e ^e ^r i n ^g ^c ^o ^m ^m i t t e ^e ^r ^e f l e ^c t s t h ^e ^r ^e ^p ^r ^e ^s ^e ⁿ t a t i o ⁿ ^o ⁿ t h ^e ^b ^o ^a ^r ^d ^o ^f t h ^e ^d i f f e ^r ^e ⁿ ^t ^c l a ^s ^s ^e ^s ^o ^f ^d i r ^e ^c t o ^r ^s :

^Y ^e ^s ^N ^o

N a e m	o s i t i o n P	c a t e g o r y J o b
L e t i c i a I g l e s i a s	h a i r m C a n	I n d e p e n d e n t
a l l e J o s é L u i s d e l V	M e m b e r	I n d e p e n d e n t
g u i l e r a I s a b e l A	M e m b e r	I n d e p e n d e n t
e z ï A J u a n G ó m c e b o	S e c r e t a r y	o n ï b o a r d N
		m e m b e r

^f ⁿ ^o t , ^d ^e ^s ^c ^r ⁱ ^b ^e t h ^e ^c ^o ^m ^p ^o ^s i t i o ⁿ ^o ^f t h ^e ^e ^x ^e ^c ^u t i v ^e ^o ^r ^s t e ^e ^r i n ^g ^c ^o ^m ^m i t t e ^e ^A ^D ^I ^T ^C ^O ^M ^M ^I ^T ^T ^E ^E

p r o p r i e t a r y d i r e c t o r s % o f	0
i n d e p e n d e n t d i r e c t o r s % o f	1 0 0
o t h e r e x t e r n a l d i r e c t o r s % o f	0

^D ^u t i e ^s

^A ^s ^d ^e ^s ^c r i ^b ^e ^d i n ^a r t i ^c l e ⁴ ² . 2 ^o ^f t h ^e ^B ^y l a ^w ^s ^o ^f ^L ^a ^r ^E ^s ^p ^a ^ñ ^a , i n ^a r t i ^c l e 1 4 . 3 ^o ^f i t ^s ^R ^e ^g ^u l a t i o ⁿ ^s ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s , ^a ⁿ ^d i n ^A r t i ^c l e ⁵ . ¹ ^o ^f t h ^e ^R ^e ^g ^u l a t i o ⁿ ^s ^o ^f t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e , ^a ⁿ ^d ^w i t h ^o ^u ^t ^p r e ^j ^u ^d ⁱ ^c ^e t o ^o t h ^e ^r t a ^s ^k ^s t h ^a ^t ^w ^e r e l e ^g ^a l l ^y ^a t t r i ^b ^u t a ^b l e t o i t ^o ^r ^e ⁿ t r u ^s t e ^d ^b ^y t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s , t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e ^s ^h ^a l l ^h ^a ^v ^e , ^a ^t ^a ^m i n i m ^u ^m , t h ^e ^f ^o l l o ^w i n ^g ^m ^a i n r e ^s ^p ^o ⁿ ^s ⁱ ^b i l i t i e ^s :

^a ) ^R ^e ^g ^a r d i n ^g t h ^e ^s ^u ^p ^e ^r ^v ⁱ ^s i o ⁿ ^o ^f ^f i n ^a ⁿ ^c i a ^l i n ^f ^o r m ^a t i o ⁿ :

( ⁱ ) I t ^s ^h ^a l l i n ^f ^o r m t h ^e ^G ^e ⁿ ^e r a ^l ^M ^e ^e t i n ^g ^o ^f ^s ^h ^a r e ^h ^o l d ^e ^r ^s ^a ^b ^o ^u ^t ⁱ ^s ^s ^u ^e ^s r a ⁱ ^s ^e ^d ^b ^y t h ^e ^s ^h ^a r e ^h ^o l d ^e ^r ^s i n ^m ^a t t e ^r ^s r e l a t e ^d t o t h ^e i r ^c ^o ^m ^p ^e t e ⁿ ^c ^e .

( i i ) ^S ^u ^p ^e ^r ^v ⁱ ^s ^e t h ^e ^p r o ^c ^e ^s ^s ^o ^f ^p r e ^p ^a r i n ^g ^a ⁿ ^d ^p r e ^s ^e ⁿ t i n ^g r e ^g ^u l a t e ^d ^f i n ^a ⁿ ^c i a ^l i n ^f ^o r m ^a t i o ⁿ ; ( i i i ) ^E ⁿ ^s ^u r e t h ^a ^t t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^s ^e ^e ^k ^s t o ^p r e ^s ^e ⁿ ^t t h ^e ^a ^c ^c ^o ^u ⁿ ^t ^s t o t h ^e ^G ^e ⁿ ^e r a ^l ^M ^e ^e t i n ^g ^o ^f ^s ^h ^a r e ^h ^o l d ^e ^r ^s ^w i t h ^o ^u ^t l i m i t a t i o ⁿ ^s ^o ^r ^q ^u ^a l i ^f ⁱ ^c ^a t i o ⁿ ^s

( ⁱ ^v ) I n ^f ^o r m t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s , i n ^a ^d ^v ^a ⁿ ^c ^e , ^a ^b ^o ^u ^t t h ^e ^f i n ^a ⁿ ^c i a ^l i n ^f ^o r m ^a t i o ⁿ t h ^a t , ^d ^u ^e t o i t ^s ^s t a t u ^s ^a ^s ^a l i ^s t e ^d ^c ^o ^m ^p ^a ⁿ ^y , t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^m ^u ^s ^t ^p ^u ^b l i ^s ^h ^p ^e r i o ^d ⁱ ^c ^a l l ^y

^b ) I n r e l a t i o ⁿ t o t h ^e ^s ^u ^p ^e ^r ^v ⁱ ^s i o ⁿ ^o ^f i n ^f ^o r m ^a t i o ⁿ ^s ^y ^s t e ^m ^s ^a ⁿ ^d i n t e r n ^a ^l ^c ^o ⁿ t r o ^l :

( ⁱ ) ^S ^u ^p ^e ^r ^v ⁱ ^s ^e t h ^e ^p r e ^p ^a r a t i o ⁿ ^p r o ^c ^e ^s ^s ^a ⁿ ^d t h ^e i n t e ^g r i t ^y ^o ^f t h ^e ^f i n ^a ⁿ ^c i a ^l i n ^f ^o r m ^a t i o ⁿ r e l a t e ^d t o t h ^e ^C ^o ^m ^p ^a ⁿ ^y

( i i ) ^P ^e r i o ^d ⁱ ^c ^a l l ^y ^s ^u ^p ^e ^r ^v ⁱ ^s ^e t h ^e ^e f f ^e ^c t i ^v ^e ⁿ ^e ^s ^s ^o ^f t h ^e i n t e r n ^a ^l ^c ^o ⁿ t r o ^l ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^a ⁿ ^d i t ^s ^G r o ^u ^p ^a ^s ^w ^e l l ^a ^s t h ^e ^a ^c t i ^v i t ^y ^o ^f t h ^e i n t e r n ^a ^l ^a ^u ^d i t ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y

( i i i ) ^E ^s t a ^b l i ^s ^h ^a ⁿ ^d ^s ^u ^p ^e ^r ^v ⁱ ^s ^e ^a ^m ^e ^c ^h ^a ⁿ ⁱ ^s ^m t h ^a ^t ^a l l o ^w ^s ^e ^m ^p l o ^y ^e ^e ^s ^a ⁿ ^d ^a ⁿ ^y t h i r d ^p ^a r t ^y t o ^c ^o ^m ^m ^u ⁿ ⁱ ^c ^a t e , i n ^a ^c ^o ⁿ ^f i d ^e ⁿ t i a ^l ^m ^a ⁿ ⁿ ^e ^r ^a ⁿ ^d , ⁱ ^f ^d ^e ^e ^m ^e ^d ^a ^p ^p r o ^p r i a t e , ^a ⁿ ^o ⁿ ^y ^m ^o ^u ^s , i r r e ^g ^u l a r i t i e ^s ^o ^f ^p ^o t e ⁿ t i a ^l ^s ⁱ ^g ⁿ ⁱ ^f ⁱ ^c ^a ⁿ ^c ^e

^c ) I n r e l a t i o ⁿ t o t h ^e ^e ^x t e r n ^a ^l ^a ^u ^d i t o ^r :

( ⁱ ) ^S ^u ^b ^m i t t o t h ^e ^B ^o ^a r d t h ^e ^p r o ^p ^o ^s ^a ^l ^s ^f ^o ^r t h ^e ^s ^e l e ^c t i o ⁿ , ^a ^p ^p ^o i n t m ^e ⁿ t , r e ï e l e ^c t i o ⁿ ^a ⁿ ^d r e ^p l a ^c ^e ^m ^e ⁿ ^t ^o ^f t h ^e ^e ^x t e r n ^a ^l ^a ^u ^d i t o ^r

( i i ) ^E ^s t a ^b l i ^s ^h t h ^e ^a ^p ^p r o ^p r i a t e r e l a t i o ⁿ ^s ^h i p ^s ^w i t h t h ^e ^a ^c ^c ^o ^u ⁿ ^t ^a ^u ^d i t o ^r ^s t o r e ^c ^e ⁱ ^v ^e i n ^f ^o r m ^a t i o ⁿ ^o ⁿ t h ^o ^s ^e ⁱ ^s ^s ^u ^e ^s t h ^a ^t ^m ^a ^y ^p ^o ^s ^e ^a t h r e ^a ^t t o t h ^e i r i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^c ^e ( i i i ) ^I ^s ^s ^u ^e ^a ⁿ ⁿ ^u ^a l l ^y , ^p r i o ^r t o t h ^e ^a ^c ^c ^o ^u ⁿ ^t ^a ^u ^d i t r e ^p ^o r t , ^a r e ^p ^o r t i n ^w ^h ⁱ ^c ^h ^a ⁿ ^o ^p i n i o ⁿ ^w i l l ^b ^e ^e ^x ^p r e ^s ^s ^e ^d ^a ^s t o ^w ^h ^e t h ^e ^r t h ^e i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^c ^e ^o ^f t h ^e ^a ^c ^c ^o ^u ⁿ ^t ^a ^u ^d i t o ^r ^s . ( ⁱ ^v ) ^P r e ^s ^e ^r ^v ^e t h ^e i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^c ^e ^o ^f t h ^e ^e ^x t e r n ^a ^l ^a ^u ^d i t o ^r i n t h ^e ^e ^x ^e ^r ^c ⁱ ^s ^e ^o ^f ^h ⁱ ^s ^f ^u ⁿ ^c t i o ⁿ ^s . ^L i k ^e ^w ⁱ ^s ^e , t o ^f ^a ^v ^o ^r t h ^a ^t t h ^e ^g r o ^u ^p ^a ^u ^d i t o ^r ^a ^s ^s ^u ^m ^e ^s t h ^e r e ^s ^p ^o ⁿ ^s ⁱ ^b i l i t ^y ^o ^f t h ^e ^a ^u ^d i t ^s ^o ^f t h ^e ^c ^o ^m ^p ^a ⁿ ^y t h ^a ^t i n t e ^g r a t e i t , ^e ⁿ ^s ^u r i n ^g t h ^a ^t t h ^e r e ^m ^u ⁿ ^e r a t i o ⁿ ^o ^f t h ^e ^e ^x t e r n ^a ^l ^a ^u ^d i t o ^r ^d ^o ^e ^s ⁿ ^o ^t ^c ^o ^m ^p r o ^m ⁱ ^s ^e i t ^s ^q ^u ^a l i t ^y ^o ^r i t ^s i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^c ^e .

^d ) I n r e l a t i o ⁿ t o t h ^e ^s ^u ^p ^e ^r ^v ⁱ ^s i o ⁿ ^o ^f ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^a ⁿ ^d r i ^s ^k ^c ^o ⁿ t r o ^l :

( ⁱ ) ^s ^u ^p ^e ^r ^v ⁱ ^s ^e t h ^e ^e f f ^e ^c t i ^v ^e ⁿ ^e ^s ^s ^o ^f t h ^e i n t e r n ^a ^l ^c ^o ⁿ t r o ^l ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^a ⁿ ^d i t ^s ^G r o ^u ^p , ^a ^s ^w ^e l l ^a ^s i t ^s r i ^s ^k ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^s ^y ^s t e ^m ^s ;

( i i ) ^S ^u ^p ^e ^r ^v ⁱ ^s ^e t h ^e i n t e r n ^a ^l ^c ^o ⁿ t r o ^l ^a ⁿ ^d r i ^s ^k ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^f ^u ⁿ ^c t i o ⁿ .

( i i i ) I n r e l a t i o ⁿ t o r i ^s ^k ^p ^o l i ^c ^y ^a ⁿ ^d ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ t , i d ^e ⁿ t i f y t h ^e ^d ⁱ f f ^e r e ⁿ ^t ^t ^y ^p ^e ^s ^o ^f r i ^s ^k , t h ^e ^d ^e t e r m i n ^a t i o ⁿ ^o ^f ^a ^c ^c ^e ^p t a ^b l e r i ^s ^k l e ^v ^e ^l ^s , t h ^e ^p l a ⁿ ⁿ ^e ^d ^m ^e ^a ^s ^u r e ^s , ^a ⁿ ^d t h ^e i n ^f ^o r m ^a t i o ⁿ ^a ⁿ ^d i n t e r n ^a ^l ^c ^o ⁿ t r o ^l ^s ^y ^s t e ^m ^s , ^a ^s ^w ^e l l ^a ^s t h ^e i r ^a ⁿ ⁿ ^u ^a ^l r e ^e ^v ^a l u ^a t i o ⁿ , ^a ^t l e ^a ^s t .

^e ) I n r e l a t i o ⁿ t o t h ^e ^o ^b l i ^g ^a t i o ⁿ ^s ^o ^f l i ^s t e ^d ^C ^o ^m ^p ^a ⁿ i e ^s , i n ^f ^o r m t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s , ^p r i o ^r t o t h ^e ^a ^d ^o ^p t i o ⁿ ^o ^f ^d ^e ^c ⁱ ^s i o ⁿ ^s ^w i t h ^a ^s ⁱ ^g ⁿ ⁱ ^f ⁱ ^c ^a ⁿ ^t i m ^p ^a ^c ^t ^o ⁿ t h ^e ^C ^o ^m ^p ^a ⁿ ^y , ^w ^h ⁱ ^c ^h ^c ^o ^u l d i m ^p ^a i r t h ^e t r a ⁿ ^s ^p ^a r e ⁿ ^c ^y ^o ^f t h ^e ^g r o ^u ^p , ^a ^s ^w ^e l l ^a ^s r e l a t e ^d t r a ⁿ ^s ^a ^c t i o ⁿ ^s t h ^a ^t ^a r e ^d ^e ^f i n ^e ^d ^b ^y ^c ^u r r e ⁿ ^t l e ^g ⁱ ^s l a t i o ⁿ , ^e ^c ^o ⁿ ^o ^m ⁱ ^c ^c ^o ⁿ ^d i t i o ⁿ ^s ^a ⁿ ^d ^a ^c ^c ^o ^u ⁿ t i n ^g i m ^p ^a ^c ^t i n r e l a t i o ⁿ t o r i ^s ^k ^p ^o l i ^c ^y ^a ⁿ ^d ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ t , ^a ⁿ ^d ^a ⁿ ^y ^m ^o ^d ⁱ ^f ⁱ ^c ^a t i o ⁿ ^o ^f t h ^e i n t e r n ^a ^l r u l e ^s ^o ^f ^c ^o ⁿ ^d ^u ^c t .

^f ) I n r e l a t i o ⁿ t o t h ^e ^c ^o r p ^o r a t e ^g ^o ^v ^e r n ^a ⁿ ^c ^e ^o ^b l i ^g ^a t i o ⁿ ^s ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y :

( ⁱ ) ^S ^u ^p ^e ^r ^v ⁱ ^s ^e ^c ^o ^m ^p l i a ⁿ ^c ^e ^w i t h l e ^g ^a ^l r e ^q ^u i r e ^m ^e ⁿ ^t ^s ^a ⁿ ^d i n t e r n ^a ^l r e ^g ^u l a t i o ⁿ ^s ,

( i i ) ^P ^e r i o ^d ⁱ ^c ^a l l ^y r e ^v i e ^w t h ^e i n t e r n ^a ^l ^c ^o r p ^o r a t e ^g ^o ^v ^e r n ^a ⁿ ^c ^e r e ^g ^u l a t i o ⁿ ^s

( i i i ) ^P r o ^m ^o t e t h ^e ^c ^o r p ^o r a t e ^g ^o ^v ^e r n ^a ⁿ ^c ^e ^s t r a t e ^g ^y ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y

( ⁱ ^v ) ^S ^u ^p ^e ^r ^v ⁱ ^s ^e t h ^e ^c ^o ^m ^m ^u ⁿ ⁱ ^c ^a t i o ⁿ ^a ⁿ ^d r e l a t i o ⁿ ^s ^h i p ^s t r a t e ^g ^y ^w i t h ^s ^h ^a r e ^h ^o l d ^e ^r ^s ^a ⁿ ^d i n ^v ^e ^s t o ^r ^s , i n ^c l u ^d i n ^g ^s ^m ^a l l ^a ⁿ ^d ^m ^e ^d i u ^m ^s ^h ^a r e ^h ^o l d ^e ^r ^s .

( ^v ) ^E ^v ^a l u ^a t e ^e ^v ^e ^r ^y t h i n ^g r e l a t e ^d t o ⁿ ^o ⁿ ^ï ^f i n ^a ⁿ ^c i a ^l r i ^s ^k ^s , ^c ^o ^o r d i n ^a t e t h ^e ^p r o ^c ^e ^s ^s ^o ^f r e ^p ^o r t i n ^g ⁿ ^o ⁿ ^ï ^f i n ^a ⁿ ^c i a ^l ^a ⁿ ^d ^d ⁱ ^v ^e ^r ^s i t ^y i n ^f ^o r m ^a t i o ⁿ , ^o r i e ⁿ ^t t h ^e ^C ^o ^m ^p ^a ⁿ ^y r e ^g ^a r d i n ^g ^c ^o r p ^o r a t e r e ^p ^u t a t i o ⁿ

^g ) ( ^v ⁱ ) I n ^f ^o r m , ^p r i o ^r t o i t ^s ^a ^p ^p r o ^v ^a l , t h ^e ^a ⁿ ⁿ ^u ^a ^l ^c ^o r p ^o r a t e ^g ^o ^v ^e r n ^a ⁿ ^c ^e r e ^p ^o r t ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y

^h ) ^O t h ^e ^r ^f ^u ⁿ ^c t i o ⁿ ^s ^o ^f t h ^e ^C ^o ^m ^m i t t e ^e ^a r e :

( ⁱ ) ^s ^u ^p ^e ^r ^v ⁱ ^s ^e t h ^e ^c ^a ^l ^c ^u l a t i o ⁿ ^o ^f t h ^e ^c ^o ^m ^m ⁱ ^s ^s i o ⁿ ^s r e ^c ^e ⁱ ^v ^e ^d ^b ^y t h ^e ^M ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^C ^o ^m ^p ^a ⁿ ^y i n t h ^e ^p ^e ^r ^f ^o r m ^a ⁿ ^c ^e ^o ^f i t ^s ^f ^u ⁿ ^c t i o ⁿ ^s ;

( i i ) ^N ^a ^m ^e ^a ⁿ ^d ^s ^u ^p ^e ^r ^v ⁱ ^s ^e t h ^e ^s ^e ^r ^v ⁱ ^c ^e ^s ^o ^f ^e ^x t e r n ^a ^l ^v ^a l u ^a t i o ⁿ ^s i n r e l a t i o ⁿ t o t h ^e ^v ^a l u ^a t i o ⁿ ^o ^f t h ^e ^a ^s ^s ^e ^t ^s ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y .

( i i i ) ^A ⁿ ^y ^o t h ^e ^r r e ^p ^o r t ^a ⁿ ^d ^p r o ^p ^o ^s ^a ^l ^f ^u ⁿ ^c t i o ⁿ ^e ⁿ t r u ^s t e ^d t o i t ^b ^y t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s , ^w i t h ^a ^g ^e ⁿ ^e r a ^l ^o ^r ^p ^a r t i ^c ^u l a ^r ⁿ ^a t u r e .

( i ^v ) ^A ⁿ ^y ^o t h ^e ^r ^c ^o ^m ^p ^e t e ⁿ ^c ^e ^o ^r ^f ^u ⁿ ^c t i o ⁿ ^a t t r i ^b ^u t e ^d t o i t ^b ^y ^L ^a ^w , ^B ^y l a ^w ^s ^o ^r ^B ^o ^a r d ^R ^e ^g ^u l a t i o ⁿ ^s

^O ^r ^g ^a ⁿ i s ^a t i o ⁿ ^a ⁿ ^d ^o ^p ^e ^r ^a t i o ⁿ

^T ^h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e ^s ^h ^a l l ^c ^o ⁿ ^s ⁱ ^s ^t ^o ^f ^a ^m i n i m ^u ^m ^o ^f t h r e ^e ^a ⁿ ^d ^a ^m ^a ^x i m ^u ^m ^o ^f ^f ⁱ ^v ^e ^d i r e ^c t o ^r ^s , ^a ^p ^p ^o i n t e ^d ^b ^y t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^f r o ^m ^a ^m ^o ⁿ ^g t h ^e ^e ^x t e r n ^a ^l ^o ^r ⁿ ^o ⁿ ^ï ^e ^x ^e ^c ^u t i ^v ^e ^d i r e ^c t o ^r ^s . ^T ^h ^e ^B ^o ^a r d ^w i l l ^a ^l ^s ^o ^d ^e t e r m i n ^e ^w ^h ^o ^w i l l ^s ^e ^r ^v ^e ^a ^s ^C ^h ^a i r m ^a ⁿ , ^e ^s ^p ^e ^c i a l l ^y t a ^k i n ^g i n t o ^a ^c ^c ^o ^u ⁿ ^t t h ^e i r ^k ⁿ ^o ^w l e ^d ^g ^e ^a ⁿ ^d ^e ^x ^p ^e r i e ⁿ ^c ^e i n ^a ^c ^c ^o ^u ⁿ t i n ^g , ^a ^u ^d i t i n ^g ^o ^r r i ^s ^k ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^a ⁿ ^d ^m ^o ^s ^t ^o ^f t h ^e ^s ^e ^m ^e ^m ^b ^e ^r ^s ^w i l l ^b ^e i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^d i r e ^c t o ^r ^s . ^T ^h ^e ^C ^h ^a i r m ^a ⁿ ^o ^f t h ^e ^C ^o ^m ^m i t t e ^e ^m ^u ^s ^t ^b ^e r e ^p l a ^c ^e ^d ^e ^v ^e ^r ^y t h r e ^e ^y ^e ^a ^r ^s , ^a ⁿ ^d ^m ^a ^y ^b ^e r e ï e l e ^c t e ^d ^a ^f t e ^r ^a ^p ^e r i o ^d ^o ^f ^o ⁿ ^e ^y ^e ^a ^r ^h ^a ^s ^e l a ^p ^s ^e ^d ^s i n ^c ^e ^h ⁱ ^s / ^h ^e ^r t e r m i n ^a t i o ⁿ . ^T ^h ^e ^p ^o ^s i t i o ⁿ ^o ^f

^S ^e ^c r e t a ^r ^y ^a ⁿ ^d ^V ⁱ ^c ^e ^S ^e ^c r e t a ^r ^y ^s ^h ^a l l ^b ^e ^h ^e l d ^b ^y t h ^e ^S ^e ^c r e t a ^r ^y ^a ⁿ ^d ^V ⁱ ^c ^e ^S ^e ^c r e t a ^r ^y ^o ^f t h ^e ^B ^o ^a r d .

^T ^h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e ^s ^h ^a l l ^m ^e ^e t , ^o r d i n ^a r i l ^y , ^q ^u ^a r t e r l ^y ^a ⁿ ^d , i n ^a ⁿ ^y ^c ^a ^s ^e , ^w ^h ^e ⁿ ^e ^v ^e ^r i t ⁱ ^s ^c ^o ⁿ ^v ^e ⁿ i e ⁿ ^t ^f ^o ^r t h ^e ^p r o ^p ^e ^r ^p ^e ^r ^f ^o r m ^a ⁿ ^c ^e ^o ^f i t ^s ^f ^u ⁿ ^c t i o ⁿ ^s .

^T ^h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e ^w i l l ^b ^e ^v ^a l i d ^l ^y ^c ^o ⁿ ^s t i t u t e ^d ^w ^h ^e ⁿ t h ^e ^m ^a ^j ^o r i t ^y ^o ^f i t ^s ^m ^e ^m ^b ^e ^r ^s ^a t t e ⁿ ^d , ^p r e ^s ^e ⁿ ^t ^o ^r r e ^p r e ^s ^e ⁿ t e ^d . ^T ^h ^e ^a ^g r e ^e ^m ^e ⁿ ^t ^s ^w i l l ^b ^e ^a ^d ^o ^p t e ^d ^b ^y ^a ^m ^a ^j ^o r i t ^y ^o ^f ^c ^o ⁿ ^c ^u r r e ⁿ ^t ^m ^e ^m ^b ^e ^r ^s , ^p r e ^s ^e ⁿ ^t ^o ^r r e ^p r e ^s ^e ⁿ t e ^d .

I t ^w i l l ^b ^e ^o ^b l i ^g ^e ^d t o ^a t t e ⁿ ^d t h ^e ^s ^e ^s ^s i o ⁿ ^s ^o ^f t h ^e ^C ^o ^m ^m i t t e ^e ^a ⁿ ^d t o ^p r o ^v i d ^e t h ^e ^m ^w i t h t h ^e i r ^c ^o l l a ^b ^o r a t i o ⁿ ^a ⁿ ^d ^a ^c ^c ^e ^s ^s t o t h ^e i n ^f ^o r m ^a t i o ⁿ ^a ^v ^a i l a ^b l e t o t h ^e ^m , ^a ⁿ ^y ^m ^e ^m ^b ^e ^r ^o ^f t h ^e ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t t e ^a ^m ^o ^r t h ^e ^s t a f f ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y t h ^a ^t ^w ^a ^s r e ^q ^u i r e ^d ^f ^o ^r t h ⁱ ^s ^p ^u r p ^o ^s ^e . ^T ^h ^e ^C ^o ^m ^m i t t e ^e ^m ^a ^y ^a ^l ^s ^o r e ^q ^u i r e ^a t t e ⁿ ^d ^a ⁿ ^c ^e ^a ^t i t ^s ^m ^e ^e t i n ^g ^s ^o ^f t h ^e ^c ^o ^m ^p ^a ⁿ ^y ' s ^a ^u ^d i t o ^r ^s .

^T ^h ^e ^m ^a t t e ^r ^s ^w i t h i n t h ^e ^c ^o ^m ^p ^e t e ⁿ ^c ^e ^o ^f t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e ^w ^e r e r e ^o r d ^e r e ^d ^f ^o ^r ^c ^o ^m ^p l i a ⁿ ^c ^e ^w i t h ^T ^e ^c ^h ⁿ ⁱ ^c ^a ^l ^G ^u i d ^e ³ / 2 ⁰ 1 7 ^o ^f t h ^e ^C ^N ^M ^V .

^L i k ^e ^w ⁱ ^s ^e , ^o ⁿ ^D ^e ^c ^e ^m ^b ^e ^r ² ⁷ , ² ⁰ 1 7 , ^a ⁿ ^O ^p ^e r a t i n ^g ^R ^e ^g ^u l a t i o ⁿ ^o ^f t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e ^w ^a ^s ^a ^p ^p r o ^v ^e ^d , ^w ^h ⁱ ^c ^h ^p r o ^v i d ^e ^s , i n ^a ^d ^d i t i o ⁿ t o t h ^e ^a ^b ^o ^v ^e , t h ^a ^t t h ^e ^m ^e ^m ^b ^e ^r ^s ^o ^f t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e ^w i l l ^h ^o l d t h ^e i r ^p ^o ^s i t i o ⁿ ^f ^o ^r ^a ^m ^a ^x i m ^u ^m ^p ^e r i o ^d ^o ^f t i m ^e . t h r e ^e ^y ^e ^a ^r ^s , ^b ^e i n ^g ^a ^b l e t o ^b ^e r e ï e l e ^c t e ^d ^o ⁿ ^e ^o ^r ^m ^o r e t i m ^e ^s ^f ^o ^r ^p ^e r i o ^d ^s ^o ^f ^e ^q ^u ^a ^l ^m ^a ^x i m ^u ^m ^d ^u r a t i o ⁿ ^a ⁿ ^d , i n ^a ⁿ ^y ^c ^a ^s ^e , t h ^e ^m ^e ^m ^b ^e ^r ^s ^o ^f t h ^e ^C ^o ^m ^m i t t e ^e ^w i l l ^c ^e ^a ^s ^e t h ^e i r ^p ^o ^s i t i o ⁿ ^w ^h ^e ⁿ t h ^e ^y ^d ^o ^s ^o i n t h ^e i r ^c ^a ^p ^a ^c i t ^y ^a ^s ^D i r e ^c t o ^r ^s ^o ^r ^w ^h ^e ⁿ ^s ^o ^a ^g r e ^e ^d ^b ^y t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s .

^A ^c t i v i t i e ^s

^T ^h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e ^m ^e ^t 1 0 t i m ^e ^s ^d ^u r i n ^g ² ⁰ 1 9 .

^T ^h ^e ^m ^a i n ^a ^c t i ^v i t i e ^s ^d ^e ^v ^e l o ^p ^e ^d ^b ^y t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e ^d ^u r i n ^g ^f ⁱ ^s ^c ^a ^l ^y ^e ^a ^r ² ⁰ 1 9 ^h ^a ^v ^e ^b ^e ^e ⁿ t h ^e ^f ^o l l o ^w i n ^g :

¹ ) ^R ^e ^g ^a r d i n ^g t h ^e ^s ^u ^p ^e ^r ^v ⁱ ^s i o ⁿ ^o ^f ^f i n ^a ⁿ ^c i a ^l i n ^f ^o r m ^a t i o ⁿ :

• ^R ^e ^v i e ^w ^o ^f t h ^e ^p ^e r i o ^d ⁱ ^c ^f i n ^a ⁿ ^c i a ^l i n ^f ^o r m ^a t i o ⁿ : t h ^e ^C ^o ^m ^m i t t e ^e ^h ^a ^s ^s ^u ^p ^e ^r ^v ⁱ ^s ^e ^d t h ^e ^p r o ^c ^e ^s ^s ^o ^f ^p r e ^p ^a r i n ^g ^a ⁿ ^d t h ^e i n t e ^g r i t ^y ^o ^f t h ^e ^q ^u ^a r t e r l ^y ^a ⁿ ^d ^s ^e ^m i ï a ⁿ ⁿ ^u ^a ^l ^f i n ^a ⁿ ^c i a ^l i n ^f ^o r m ^a t i o ⁿ , ^b ^o t h i n ^d ⁱ ^v i d ^u ^a ^l ^a ⁿ ^d ^c ^o ⁿ ^s ^o l i d ^a t e ^d , t h ^a ^t t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^m ^u ^s ^t ^s ^u ^p ^p ^l ^y t o t h ^e ^m ^a r k ^e ^t ^a ⁿ ^d ^s ^e ⁿ ^d t o t h ^e ^C ^N ^M ^V ^b ^y ^v i r t u ^e ^o ^f i t ^s ^o ^b l i ^g ^a t i o ⁿ ^s ^o ^f ^p ^e r i o ^d ⁱ ^c i n ^f ^o r m ^a t i o ⁿ ^a ^s ^a l i ^s t e ^d ^c ^o ^m ^p ^a ⁿ ^y . ^R ^e ^v i e ^w ^o ^f t h ^e ^a ⁿ ⁿ ^u ^a ^l ^a ^c ^c ^o ^u ⁿ ^t ^s
• ^R ^e ^v i e ^w ^o ^f t h ^e ^a ⁿ ⁿ ^u ^a ^l ^a ^c ^c ^o ^u ⁿ ^t ^s : ^T ^h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e , i n ^o r d ^e ^r t o ^p r e ^v ^e ⁿ ^t t h ^e i n ^d ⁱ ^v i d ^u ^a ^l ^a ⁿ ^d ^c ^o ⁿ ^s ^o l i d ^a t e ^d ^a ⁿ ⁿ ^u ^a ^l ^a ^c ^c ^o ^u ⁿ ^t ^s ^f ^o r m ^u l a t e ^d ^b ^y t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^f r o ^m ^b ^e i n ^g ^p r e ^s ^e ⁿ t e ^d ^a ^t t h ^e ^G ^e ⁿ ^e r a ^l ^M ^e ^e t i n ^g ^w i t h ^q ^u ^a l i ^f ⁱ ^c ^a t i o ⁿ ^s i n t h ^e ^a ^u ^d i t r e ^p ^o r t . I t ⁱ ^s ⁿ ^o t e ^d t h ^a ^t t h ^e ^a ^u ^d i t r e ^p ^o r t ^s ^o ^f t h ^e i n ^d ⁱ ^v i d ^u ^a ^l ^a ⁿ ^d ^c ^o ⁿ ^s ^o l i d ^a t e ^d ^a ⁿ ⁿ ^u ^a ^l ^a ^c ^c ^o ^u ⁿ ^t ^s ^o ^f ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^f ^o ^r t h ^e ^y ^e ^a ^r ^e ⁿ ^d ^e ^d ^D ^e ^c ^e ^m ^b ^e ^r ³ 1 , ² ⁰ 1 8 ^d i d ⁿ ^o ^t ^p r e ^s ^e ⁿ ^t ^e ^x ^c ^e ^p t i o ⁿ ^s .

² ) ^R ^e ^g ^a r d i n ^g t h ^e ^s ^u ^p ^e ^r ^v ⁱ ^s i o ⁿ ^o ^f i n ^f ^o r m ^a t i o ⁿ ^s ^y ^s t e ^m ^s ^a ⁿ ^d i n t e r n ^a ^l ^c ^o ⁿ t r o ^l :

• I n t e r n ^a ^l ^A ^u ^d i t ^S ^u ^p ^e ^r ^v ⁱ ^s i o ⁿ : t h ^e ^C ^o ^m ^m i t t e ^e ^h ^a ^s ^a ^p ^p r o ^v ^e ^d t h ^e ^o r i e ⁿ t a t i o ⁿ ^a ⁿ ^d i t ^s ^w ^o r k ^p l a ⁿ ^s , ^m ^a ^k i n ^g ^s ^u r e t h ^a ^t i t ^s ^a ^c t i ^v i t ^y ^w ^a ^s ^m ^a i n ^l ^y ^f ^o ^c ^u ^s ^e ^d ^o ⁿ t h ^e r e l e ^v ^a ⁿ ^t r i ^s ^k ^s ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y . I n ^p ^a r t i ^c ^u l a r , i t ^h ^a ^s ^a ^p ^p r o ^v ^e ^d t h ^e ^w ^o r k ^d ^o ⁿ ^e i n t h ^e ² ⁰ 1 8 ^a ^u ^d i t ^p l a ⁿ ^a ^s ^w ^e l l ^a ^s t h ^e ² ⁰ 1 9 ^a ^u ^d i t ^p l a ⁿ .
• ^S ^u ^p ^e ^r ^v ⁱ ^s i o ⁿ ^o ^f t h ^e i n ^f ^o r m ^a t i o ⁿ ^a ⁿ ^d i n t e r n ^a ^l ^c ^o ⁿ t r o ^l ^s ^y ^s t e ^m ^s : ^D ^u r i n ^g ^f ⁱ ^s ^c ^a ^l ^y ^e ^a ^r ² ⁰ 1 9 , ^a ⁿ ^d i n r e l a t i o ⁿ t o t h ^e ^C ^o ^m ^p ^a ⁿ ^y ' s I C ^F ^R , t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e ^h ^a ^s ^a ⁿ ^a ^l ^y ^z ^e ^d t h ^e i n t e r n ^a ^l ^c ^o ⁿ t r o ^l ^s ^y ^s t e ^m ^s , ^b ^e i n ^g i n ^f ^o r m ^e ^d ^b ^y t h ^e i n t e r n ^a ^l ^a ^u ^d i t o ^r i n ^d ⁱ f f ^e r e ⁿ ^t ^m ^e ^e t i n ^g ^s ^a ^b ^o ^u ^t t h ^e ^p r o ^g r e ^s ^s ^o ^f t h ^e r e ^v i e ^w ^p r o ^c ^e ^s ^s . I n r e l a t i o ⁿ t o ^f ⁱ ^s ^c ^a ^l ^y ^e ^a ^r ² ⁰ 1 9 , t h ^e ^e ^x t e r n ^a ^l ^a ^u ^d i t o ^r ^h ^a ^s ⁱ ^s ^s ^u ^e ^d ^a r e ^p ^o r t ^o ^f ^a ^g r e ^e ^d ^p r o ^c ^e ^d ^u r e ^s , i n l i n ^e ^w i t h ^w ^h ^a ^t ^w ^a ^s ^d ^o ⁿ ^e i n ^p r e ^v i o ^u ^s ^y ^e ^a ^r ^s .

³ ) I n r e l a t i o ⁿ t o t h ^e ^s ^u ^p ^e ^r ^v ⁱ ^s i o ⁿ ^o ^f r e l a t i o ⁿ ^s ^a ⁿ ^d t h ^e i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^c ^e ^o ^f t h ^e ^e ^x t e r n ^a ^l ^a ^u ^d i t o ^r :

• ^P r o ^p ^o ^s ^a ^l ^f ^o ^r t h ^e ^a ^p ^p ^o i n t m ^e ⁿ t , r e ï e l e ^c t i o ⁿ , r e ^p l a ^c ^e ^m ^e ⁿ ^t ^o ^f t h ^e ^e ^x t e r n ^a ^l ^a ^u ^d i t o ^r : ^T ^h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e ^h ^a ^s ^a ⁿ ^a ^l ^y ^z ^e ^d t h ^e ^p r o ^p ^o ^s ^a ^l ^f ^o ^r t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^f ^o ^r t h ^e ^a ^p ^p ^o i n t m ^e ⁿ ^t ^o ^f t h ^e ^e ^x t e r n ^a ^l ^a ^u ^d i t o ^r ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^f ^o ^r t h ^e ^y ^e ^a ^r ² ⁰ 1 9 , ^f ^o ^r ^s ^u ^b ^s ^e ^q ^u ^e ⁿ ^t ^s ^u ^b ^m ⁱ ^s ^s i o ⁿ t o t h ^e ^G ^e ⁿ ^e r a ^l ^M ^e ^e t i n ^g ^o ^f ^S ^h ^a r e ^h ^o l d ^e ^r ^s , ^a ^g r e ^e i n ^g t o ^p r o ^p ^o ^s ^e t o t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s t h ^e r e ⁿ ^e ^w ^a ^l ^o ^f t h ^e ^c ^u r r e ⁿ ^t ^e ^x t e r n ^a ^l ^a ^u ^d i t o ^r ^f ^o ^r ^a ^p ^e r i o ^d ^o ^f ^o ⁿ ^e ^y ^e ^a r .
• ^S ^u ^p ^e ^r ^v ⁱ ^s i o ⁿ ^o ^f t h ^e r e l a t i o ⁿ ^s ^a ⁿ ^d i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^c ^e ^o ^f t h ^e ^E ^x t e r n ^a ^l ^A ^u ^d i t : ^T ^h ^e ^A ^c ^c ^o ^u ⁿ ^t ^s ^A ^u ^d i t ^L ^a ^w ^a ⁿ ^d ^s ^e ^c t i o ⁿ ⁴ , ^f ^u ⁿ ^c t i o ⁿ ^f ) , ^o ^f ^a r t i ^c l e ⁵ ² ⁹ ^q ^u ^a t e r d ^e ^c i e ^s ^o ^f t h ^e ^C ^a ^p i t a ^l ^C ^o ^m ^p ^a ⁿ i e ^s ^L ^a ^w r e ^q ^u i r e t h ^a ^t t h ^e ^A ^u ^d i t ^C ^o ^m ^m i t t e ^e ⁱ ^s ^s ^u ^e ^a ⁿ ⁿ ^u ^a l l ^y , i n ^c ^h ^a r a ^c t e ^r ^p r i o ^r t o t h ^e ^a ^u ^d i t r e ^p ^o r t , ^a r e ^p ^o r t ^e ^x ^p r e ^s ^s i n ^g ^a ⁿ ^o ^p i n i o ⁿ ^o ⁿ t h ^e i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^c ^e ^o ^f t h ^e ^a ^u ^d i t o ^r ^s . ^O ⁿ t h ^e ^b ^a ^s ⁱ ^s ^o ^f t h ⁱ ^s r e ^q ^u i r e ^m ^e ⁿ ^t ^a ⁿ ^d t h ^e ^c ^o ⁿ ^f i r m ^a t i o ⁿ ^o ^f i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^c ^e r e ^c ^e ⁱ ^v ^e ^d ^f r o ^m t h ^e ^a ^u ^d i t o ^r ^s t h r o ^u ^g ^h ^a l e t t e ^r ^d ^a t e ^d ^F ^e ^b r u ^a ^r ^y 1 3 , ² ⁰ ² ⁰ , t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e ^h ^a ^s ^c ^o ⁿ ^c l u ^d ^e ^d t h ^a ^t t h ^e r e ^a r e ⁿ ^o ^o b j ^e ^c t i ^v ^e r e ^a ^s ^o ⁿ ^s t o ^q ^u ^e ^s t i o ⁿ t h ^e i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^c ^e ^o ^f t h ^e ^a ^u ^d i t o ^r i n ^f ⁱ ^s ^c ^a ^l ^y ^e ^a ^r ² ⁰ 1 9 .
⁴ ) ^R ^e ^g ^a r d i n ^g t h ^e ^s ^u ^p ^e ^r ^v ⁱ ^s i o ⁿ ^o ^f ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^a ⁿ ^d r i ^s ^k ^c ^o ⁿ t r o ^l :

I n t h ⁱ ^s ^m ^a t t e r , t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e ^h ^a ^s ^c ^a r r i e ^d ^o ^u ^t ^d ⁱ f f ^e r e ⁿ ^t ^a ^c t i ^v i t i e ^s ^s ^u ^c ^h ^a ^s t h ^e r e ^v i e ^w ^a ⁿ ^d ^a ^p ^p r o ^v ^a ^l ^o ^f t h ^e ⁿ ^e ^w r i ^s ^k ^m ^a ^p , ^a ^f t e ^r ^e ^x ^p l a i n i n ^g t h ^e I n t e r n ^a ^l ^A ^u ^d i t o ^r t h ^a ^t t h ^e ^C ^o ^m ^p ^a ⁿ ^y ' s r i ^s ^k ^c ^o ⁿ t r o ^l l e ^v ^e ^l ^s ^a r e ^v ^e ^r ^y ^h ^e ^a l t h ^y ^a ⁿ ^d ^e ^x ^p l a i n i n ^g t h ^e ^c ^h ^a ⁿ ^g ^e ^s i n t h ^e ^P r i o r i t ^y r i ^s ^k ^s ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y . I n ^a ^d ^d i t i o ⁿ , t h ^e ^e ^x t e r n ^a ^l ^a ^u ^d i t o ^r i n ^f ^o r m ^e ^d t h ^e ^C ^o ^m ^m i t t e ^e ^a ^b ^o ^u ^t t h ^e ^m ^a i n r i ^s ^k ^a ^s ^p ^e ^c ^t ^s ^f ^o ^r t h ^e ^C ^o ^m ^p ^a ⁿ ^y t h ^a ^t ^w ^e r e ^b ^e i n ^g ^e ^x ^a ^m i n ^e ^d , ^c ^o ⁿ ^f i r m i n ^g t h ^a ^t ⁿ ^o ⁱ ^s ^s ^u ^e t h ^a ^t ^s ^h ^o ^u l d ^b ^e ^o ^f ^c ^o ⁿ ^c ^e r n ^w ^a ^s ^d ^e t e ^c t e ^d .

⁵ ) I n r e l a t i o ⁿ t o t h ^e ^c ^o r p ^o r a t e ^g ^o ^v ^e r n ^a ⁿ ^c ^e ^o ^b l i ^g ^a t i o ⁿ ^s ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y :

• ^S ^u ^p ^e ^r ^v ⁱ ^s i o ⁿ ^o ^f ^c ^o ^m ^p l i a ⁿ ^c ^e ^w i t h ^c ^o r p ^o r a t e ^g ^o ^v ^e r n ^a ⁿ ^c ^e r e ^g ^u l a t i o ⁿ ^s : ^T ^h ^e ^C ^o ^m ^m i t t e ^e ^h ^a ^s r e ^v i e ^w ^e ^d ^a ⁿ ^d ^a ^c ^c ^e ^p t e ^d t h ^e ^A ⁿ ⁿ ^u ^a ^l ^C ^o r p ^o r a t e ^G ^o ^v ^e r n ^a ⁿ ^c ^e ^R ^e ^p ^o r t ^f ^o ^r t h ^e ² ⁰ 1 8 ^f i n ^a ⁿ ^c i a ^l ^y ^e ^a r , ^w ^h ⁱ ^c ^h , i n ^a ^c ^c ^o r d ^a ⁿ ^c ^e ^w i t h t h ^e ^w ^o r d i n ^g ^o ^f ^a r t i ^c l e ⁵ ³ ⁸ ^o ^f t h ^e ^C ^a ^p i t a ^l ^C ^o ^m ^p ^a ⁿ i e ^s ^L ^a ^w , ^m ^u ^s ^t ^b ^e i n ^c l u ^d ^e ^d i n ^a ^s ^e ^p ^a r a t e ^s ^e ^c t i o ⁿ , i n t h ^e ^M ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^R ^e ^p ^o r t t h ^a ^t ^a ^c ^c ^o ^m ^p ^a ⁿ i e ^s t h ^e ^A ⁿ ⁿ ^u ^a ^l ^A ^c ^c ^o ^u ⁿ ^t ^s , ^D ^u r i n ^g t h ^e ^y ^e ^a ^r ² ⁰ 1 9 t h ^e ^C ^o ^m ^m i t t e ^e ^h ^a ^s r e ^v i e ^w ^e ^d t h ^e i n t e r n ^a ^l ^c ^o r p ^o r a t e ^g ^o ^v ^e r n ^a ⁿ ^c ^e r e ^g ^u l a t i o ⁿ ^s , i n ^p ^a r t i ^c ^u l a r , ^h ^a ^s ^a ^g r e ^e ^d t o ⁱ ^s ^s ^u ^e ^a ^f ^a ^v ^o r a ^b l e r e ^p ^o r t r e ^g ^a r d i n ^g t h ^e ^p r o ^p ^o ^s ^e ^d ^c ^h ^a ⁿ ^g ^e ^s i n t h ^e ^R ^e ^g ^u l a t i o ⁿ ^s ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s t o ^a ^d ^a ^p ^t i t t o t h ^e ^T ^e ^c ^h ⁿ ⁱ ^c ^a ^l ^G ^u i d ^e 1 / 2 ⁰ 1 9 ^o ^f t h ^e ^C ^N ^M ^V ^o ⁿ ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^s ^a ⁿ ^d ^s ^e ⁿ ^d t o t h ^e ^B ^o ^a r d ^f ^o ^r ^f i n ^a ^l ^a ^p ^p r o ^v ^a ^l t h ^e ⁿ ^e ^w ^p r o ^p ^o ^s ^a ^l ^f ^o ^r t h ^e ^R ^e ^g ^u l a t i o ⁿ ^s ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s .
⁶ ) I n r e l a t i o ⁿ t o t h ^e ^o ^b l i ^g ^a t i o ⁿ ^s ^o ^f l i ^s t e ^d ^c ^o ^m ^p ^a ⁿ i e ^s :

^T ^h ^e ^C ^o ^m ^m i t t e ^e ^w ^a ^s i n ^f ^o r m ^e ^d ^o ^f t h ^e ^m ^a i n t e r m ^s ^o ^f t h ^e ^d ^e ^v ^e l o ^p ^m ^e ⁿ ^t ^o ^f t h ^e ^s ^h ^a r e r e ^p ^u ^r ^c ^h ^a ^s ^e ^p r o ^g r a ^m i m ^p l e ^m ^e ⁿ t e ^d ^b ^y t h ^e ^C ^o ^m ^p ^a ⁿ ^y , t h ^e ^c ^u r r e ⁿ ^t ^s i t u ^a t i o ⁿ ^a ⁿ ^d t h ^e ^p r o ^p ^o ^s ^a ^l ^f ^o ^r t h ^e ^f ^u t u r e , ^p ^o ^s i t i ^v ^e ^l ^y i n ^f ^o r m i n ^g ^s ^a i d ^p r o ^p ^o ^s ^a ^l ^f ^o ^r i t ^s ^e l e ^v ^a t i o ⁿ t o t h ^e ^B ^o ^a r d , ^a ⁿ ^d ^a ^l ^s ^o ^a ⁿ ^a ^l ^y ^z ^e ^d t h ^e ^s i t u ^a t i o ⁿ ^o ^f ^S ^h ^a r e ^p r i ^c ^e ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y , ^a ^g r e ^e i n ^g t o ^c ^o ⁿ t i n ^u ^o ^u ^s ^l ^y ^m ^o ⁿ i t o ^r i t .

⁷ ) ^O t h ^e ^r ^f ^u ⁿ ^c t i o ⁿ ^s ^o ^f t h ^e ^C ^o ^m ^m i t t e ^e

^T ^h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e ^h ^a ^s ^a ^d ^d i t i o ⁿ ^a l l ^y ^a t t r i ^b ^u t e ^d t h ^e ^f ^o l l o ^w i n ^g ^p ^o ^w ^e ^r ^s :

· ^S ^u ^p ^e ^r ^v ⁱ ^s ^e t h ^e ^c ^a ^l ^c ^u l a t i o ⁿ ^o ^f ^C ^o ^m ^m i t t e ^e ^s ^p ^a i d t o t h ^e ^M ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^C ^o ^m ^p ^a ⁿ ^y ^f ^o ^r t h ^e ^p ^e ^r ^f ^o r m ^a ⁿ ^c ^e ^o ^f i t ^s ^f ^u ⁿ ^c t i o ⁿ ^s .

· ^N ^a ^m ^e ^a ⁿ ^d ^s ^u ^p ^e ^r ^v ⁱ ^s ^e t h ^e ^s ^e ^r ^v ⁱ ^c ^e ^s ^o ^f ^e ^x t e r n ^a ^l ^v ^a l u ^a t i o ⁿ ^s i n r e l a t i o ⁿ t o t h ^e ^p ^e r i o ^d ⁱ ^c ^v ^a l u ^a t i o ⁿ ^o ^f t h ^e ^a ^s ^s ^e ^t ^s ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y .

^d ^e ⁿ t i f y t h ^e ^m ^e ^m ^b ^e ^r ^o ^f t h ^e ^a ^u ^d i t ^c ^o ^m ^m i t t e ^e ^w ^h ^o ^h ^a ^s ^b ^e ^e ⁿ ^a ^p ^p ^o i n t e ^d ^w i t h ^r ^e ^g ^a ^r ^d t o ^h i s ^o ^r ^h ^e ^r ^k ⁿ ^o ^w l e ^d ^g ^e ^a ⁿ ^d ^e ^x ^p ^e ^r i e ⁿ ^c ^e i n ^a ^c ^c ^o ^u ⁿ t i n ^g ^a ⁿ ^d / ^o ^r ^a ^u ^d i t i n ^g ^a ⁿ ^d ^s t a t e ^h ^o ^w ^m ^a ⁿ ^y ^y ^e ^a ^r ^s t h ^e ^c ^h ^a i r ^o ^f t h i s ^c ^o ^m ^m i t t e ^e ^h ^a ^s ^h ^e l d t h i s ^p ^o ^s ^t .

t h e d i r e c t o r i t h s p e c i a l i s t e x p e r t i s e N a e o f w m	L e t i c i a I g l e s i a s
t h e i t t e e c h a i r h e l d t h e N o . o f y e a r s c o h a s m m p o s t	1

N a e m	o s i t i o n P	l a s s o f C
		d i r e c t o r
e l l C R o g e r M a x w o o k e	h a i r m C a n	I n d e p e n d e n t
l e c o t t A E m m	M e m b e r	I n d e p e n d e n t
i g u e l P e r e d a M	M e m b e r	P r o p r i e t a r y
L a u r e n t L u c c i o n i	M e m b e r	P r o p r i e t a r y
e z ï A J u a n G ó m c e b o	S e c r e t a r y	o n ï b o a r d N
		m e m b e r

^A ^P ^P ^O ^I ^N ^T ^M ^E ^N ^T ^S ^A ^N ^D ^R ^E ^M ^U ^N ^E ^R ^A ^T ^I ^O ^N ^C ^O ^M ^M ^I ^T ^T ^E ^E

p r o p r i e t a r y d i r e c t o r s % o f	5 0
i n d e p e n d e n t d i r e c t o r s % o f	5 0
o t h e r e x t e r n a l d i r e c t o r s % o f	0

^T ^h ^e ^B ^o ^a r d ^R ^e ^g ^u l a t i o ⁿ ^s ^e ^s t a ^b l i ^s ^h , i n l i n ^e ^w i t h t h ^e ^R ^e ^c ^o ^m ^m ^e ⁿ ^d ^a t i o ⁿ ⁴ ⁷ , t h ^a ^t t h ^e ^m ^a ^j ^o r i t ^y ^o ^f t h ^e ^m ^e ^m ^b ^e ^r ^s ^s ^h ^o ^u l d ^b ^e i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ t . ^T ^h ^e ^C ^o ^m ^p ^a ⁿ ^y ^s ^e ^e ^k ^s t o ^c ^o ^m ^p ^l ^y ^w i t h t h ⁱ ^s r e ^q ^u i r e ^m ^e ⁿ ^t ^a ^s ^s ^o ^o ⁿ ^a ^s t h ^e r e ^a r e ^v ^a ^c ^a ⁿ ^c i e ^s i n t h ^e ^B ^o ^a r d , ^a ⁿ ^d t h ^e r e ^f ^o r e ^h ^a ^s ⁿ ^o ^t ^a ^m ^e ⁿ ^d ^e ^d t h ^e ^B ^o ^a r d ^R ^e ^g ^u l a t i o ⁿ i n t h ⁱ ^s r e ^g ^a r d . I n t h ^a ^t r e ^s ^p ^e ^c t , t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^h ^a ^s ^p ^u ^r ^s ^u ^e ^d ^a ^d ⁱ f f ^e r e ⁿ ^t ^c ^o ^m ^p ^o ^s i t i o ⁿ ^o ^f t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^a ⁿ ^d ^o ^f t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e ( ^c ^o ^m ^p ^o ^s ^e ^d ^o ^f t h ^e ^o t h ^e ^r t h r e ^e i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^d i r e ^c t o ^r ^s ) i n ^o r d ^e ^r t o ^a ^c ^h i e ^v ^e t h ^e i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^c ^e ^o ^f t h ^e t w ^o ^b ^o ^d i e ^s ^a ⁿ ^d ^a ^h ⁱ ^g ^h ^e ^r ^p ^a r t i ^c i p ^a t i o ⁿ ^o ^f ^a l l t h ^e ^e ^x t e r n ^a ^l ^d i r e ^c t o ^r ^s i n ^d ⁱ f f ^e r e ⁿ ^t ^C ^o ^m ^m i t t e ^e ^s . ^N ^o t w i t h ^s t a ⁿ ^d i n ^g , t h ^e i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^c ^e ^o ^f t h ^e ^d ^e ^c ⁱ ^s i o ⁿ ^s ^m ^a ^d ^e ^b ^y t h ^e ^C ^o ^m ^m i t t e ^e ⁱ ^s ^g ^u ^a r a ⁿ t e ^e ^d ^a ^s l o ⁿ ^g ^a ^s t h ^e r e ^a r e ⁿ ^o ^e ^x ^e ^c ^u t i ^v ^e ^d i r e ^c t o ^r ^s ^a ⁿ ^d t h ^e ^C ^h ^a i r m ^a ⁿ ^o ^f t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^s ^C ^o ^m ^m i t t e ^e , ^w ^h ^o ⁱ ^s i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ t , ^h ^a ^s ^a ^c ^a ^s t i n ^g ^v ^o t e i n t h ^e ^e ^v ^e ⁿ ^t ^o ^f ^a ^d r a ^w .

^E ^x ^p l a i n t h ^e ^d ^u t i e ^s ^v ^e ^s t e ^d i n t h i s ^c ^o ^m ^m i t t e ^e , ^d ^e ^s ^c ^r ⁱ ^b ^e i t s ^p ^r ^o ^c ^e ^d ^u ^r ^e ^s ^a ⁿ ^d ^r ^u l e ^s ^o ^f ^o ^r ^g ^a ⁿ i s ^a t i o ⁿ ^a ⁿ ^d ^o ^p ^e ^r ^a t i o ⁿ ^a ⁿ ^d ^s ^u ^m ^m ^a ^r i s ^e t h ^e ^m ^o ^s ^t ⁱ ^m ^p ^o ^r t a ⁿ ^t ^a ^c t i v i t i e ^s ^u ⁿ ^d ^e ^r t a ^k ^e ⁿ ^b ^y i t ^d ^u ^r i n ^g t h ^e ^r ^e ^p ^o ^r t i n ^g ^p ^e ^r i o ^d .

^D ^u t i e ^s

I n ^a ^c ^c ^o r d ^a ⁿ ^c ^e ^w i t h ^a r t i ^c l e ⁴ ³ . 2 ^o ^f t h ^e ^B ^y l a ^w ^s ^a ⁿ ^d ^w i t h ^a r t i ^c l e 1 5 . 4 ^o ^f t h ^e ^B ^o ^a r d ^R ^e ^g ^u l a t i o ⁿ ^s ^a ⁿ ^d ^a r t i ^c l e ⁵ . ¹ ^o ^f t h ^e ⁿ ^e ^w ^R ^e ^g ^u l a t i o ⁿ ^s ^o ^f t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e , ^a ⁿ ^d ^w i t h ^o ^u ^t ^p r e ^j ^u ^d ⁱ ^c ^e t o ^o t h ^e ^r ^f ^u ⁿ ^c t i o ⁿ ^s t h ^a ^t ^w ^e r e l e ^g ^a l l ^y ^a t t r i ^b ^u t a ^b l e ^o ^r ^a ^s ^s ⁱ ^g ⁿ ^e ^d ^b ^y t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^o ^f ^A ^d ^m i n ⁱ ^s t r a t i o ⁿ , t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^w i l l ^h ^a ^v ^e , ^a ^t ^a ^m i n i m ^u ^m , t h ^e ^f ^o l l o ^w i n ^g ^b ^a ^s ⁱ ^c r e ^s ^p ^o ⁿ ^s ⁱ ^b i l i t i e ^s :

^a . ^C ^o ^m ^p ^e t e ⁿ ^c ^e ^s r e l a t e ^d t o t h ^e ^c ^o ^m ^p ^o ^s i t i o ⁿ ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^a ⁿ ^d i t ^s ^c ^o ^m ^m i t t e ^e ^s

i . ^A ^d ^v ⁱ ^c ^e ^a ⁿ ^d r e ^v i e ^w t h ^e ^c r i t e r i a t h ^a ^t ^m ^u ^s ^t ^b ^e ^f ^o l l o ^w ^e ^d ^f ^o ^r t h ^e ^c ^o ^m ^p ^o ^s i t i o ⁿ ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^a ⁿ ^d t h ^e ^s ^e l e ^c t i o ⁿ ^o ^f ^c ^a ⁿ ^d i d ^a t e ^s ^a ⁿ ^d , i n ^p ^a r t i ^c ^u l a r , ^e ^v ^a l u ^a t e t h ^e ^s ^k i l l ^s , ^k ⁿ ^o ^w l e ^d ^g ^e ^a ⁿ ^d ^e ^x ^p ^e r i e ⁿ ^c ^e ⁿ ^e ^c ^e ^s ^s ^a ^r ^y i n t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s . ^F ^o ^r t h ^e ^s ^e ^p ^u r p ^o ^s ^e ^s , i t ^w i l l ^d ^e ^f i n ^e t h ^e ⁿ ^e ^c ^e ^s ^s ^a ^r ^y ^f ^u ⁿ ^c t i o ⁿ ^s ^a ⁿ ^d ^s ^k i l l ^s i n t h ^e ^c ^a ⁿ ^d i d ^a t e ^s t h ^a ^t ^m ^u ^s ^t ^f i l l ^e ^a ^c ^h ^v ^a ^c ^a ⁿ ^c ^y ^a ⁿ ^d ^e ^v ^a l u ^a t e t h ^e t i m ^e ^a ⁿ ^d ^d ^e ^d ⁱ ^c ^a t i o ⁿ ⁿ ^e ^c ^e ^s ^s ^a ^r ^y ^f ^o ^r t h ^e ^m t o ^e f f ^e ^c t i ^v ^e ^l ^y ^p ^e ^r ^f ^o r m t h ^e i r ^d ^u t i e ^s , ^e ⁿ ^s ^u r i n ^g t h ^a ^t ⁿ ^o ⁿ ï e ^x ^e ^c ^u t i ^v ^e ^d i r e ^c t o ^r ^s ^h ^a ^v ^e ^s ^u f f ⁱ ^c i e ⁿ ^t ^a ^v ^a i l a ^b i l i t ^y ^o ^f t i m ^e ^f ^o ^r t h ^e ^c ^o r r e ^c ^t ^d ^e ^v ^e l o ^p ^m ^e ⁿ ^t ^o ^f i t ^s ^f ^u ⁿ ^c t i o ⁿ ^s . ^F ^o ^r t h ^e ^s ^e ^p ^u r p ^o ^s ^e ^s , t h ^e ^C ^o ^m ^m i t t e ^e ^w i l l ^p ^e r i o ^d ⁱ ^c ^a l l ^y ^d ^e ^v ^e l o ^p ^a ⁿ ^d ^u ^p ^d ^a t e ^a ^m ^a t r i ^x ^w i t h t h ^e ⁿ ^e ^c ^e ^s ^s ^a ^r ^y ^c ^o ^m ^p ^e t e ⁿ ^c i e ^s ^o ^f t h ^e ^B ^o ^a r d t h ^a ^t ^d ^e ^f i n ^e ^s t h ^e ^s ^k i l l ^s ^a ⁿ ^d ^k ⁿ ^o ^w l e ^d ^g ^e ^o ^f t h ^e ^c ^a ⁿ ^d i d ^a t e ^s ^f ^o ^r ^d i r e ^c t o ^r ^s , ^e ^s ^p ^e ^c i a l l ^y t h ^o ^s ^e ^o ^f ^e ^x ^e ^c ^u t i ^v ^e ^s ^a ⁿ ^d i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^s .
i i . ^E ^s t a ^b l i ^s ^h ^a r e ^p r e ^s ^e ⁿ t a t i o ⁿ ^o b j ^e ^c t i ^v ^e ^f ^o ^r t h ^e ^s ^e ^x l e ^s ^s r e ^p r e ^s ^e ⁿ t e ^d ^o ⁿ t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^a ⁿ ^d ^d ^e ^v ^e l o ^p ^g ^u i d ^e l i n ^e ^s ^o ⁿ ^h ^o ^w t o ^a ^c ^h i e ^v ^e ^s ^u ^c ^h ^g ^o ^a l , ^p r o ^p ^o ^s i n ^g t o t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s t h ^e ^p ^o l i ^c ^y ^o ^f ^d ⁱ ^v ^e ^r ^s i t ^y ^o ^f ^d i r e ^c t o ^r ^s ^b ^a ^s ^e ^d ^o ⁿ , ^a ^m ^o ⁿ ^g ^o t h ^e ^r ^s , t h ^e ^c r i t e r i a ^o ^f ^a ^g ^e , ^d ⁱ ^s ^a ^b i l i t ^y , t r a i n i n ^g , ^p r o ^f ^e ^s ^s i o ⁿ ^a ^l ^e ^x ^p ^e r i e ⁿ ^c ^e ^a ⁿ ^d ^g ^e ⁿ ^d ^e r .
i i i . ^T ^o ^e ⁿ ^s ^u r e ^a ⁿ ⁿ ^u ^a l l ^y ^c ^o ^m ^p l i a ⁿ ^c ^e ^w i t h t h ^e ^c r i t e r i a ^f ^o ^r t h ^e ^p r o ^m ^o t i o ⁿ ^o ^f ^d ⁱ ^v ^e ^r ^s i t ^y i n t h ^e ^c ^o ^m ^p ^o ^s i t i o ⁿ ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^e ^s t a ^b l i ^s ^h ^e ^d ^b ^y t h ^e ^C ^o ^m ^p ^a ⁿ ^y , ^w ^h ⁱ ^c ^h ^w i l l ^b ^e r e ^p ^o r t e ^d i n t h ^e ^A ⁿ ⁿ ^u ^a ^l ^C ^o r p ^o r a t e ^G ^o ^v ^e r n ^a ⁿ ^c ^e ^R ^e ^p ^o r t .
ⁱ ^v . ^A ^d ^v ⁱ ^s ^e t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^o ⁿ t h ^e ^m ^o ^s ^t ^c ^o ⁿ ^v ^e ⁿ i e ⁿ ^t ^c ^o ⁿ ^f ⁱ ^g ^u r a t i o ⁿ ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s i t ^s ^e ^l ^f ^a ⁿ ^d i t ^s ^C ^o ^m ^m i t t e ^e ^s r e ^g ^a r d i n ^g ^s ⁱ ^z ^e ^a ⁿ ^d ^b ^a l a ⁿ ^c ^e ^b ^e t w ^e ^e ⁿ t h ^e ^d ⁱ f f ^e r e ⁿ ^t ^c l a ^s ^s ^e ^s ^o ^f ^d i r e ^c t o ^r ^s ^e ^x ⁱ ^s t i n ^g ^a ^t ^a ⁿ ^y t i m ^e . ^T ^o t h ⁱ ^s ^e ⁿ ^d , t h ^e ^C ^o ^m ^m i t t e ^e ^w i l l ^p ^e r i o ^d ⁱ ^c ^a l l ^y r e ^v i e ^w t h ^e ^s t r u ^c t u r e ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^a ⁿ ^d i t ^s ^c ^o ^m ^m i t t e ^e ^s , ^e ^s ^p ^e ^c i a l l ^y ^w ^h ^e ⁿ ^v ^a ^c ^a ⁿ ^c i e ^s ^o ^c ^c ^u ^r ^w i t h i n t h ^o ^s ^e ^b ^o ^d i e ^s .
^v . ^P ^e r i o ^d ⁱ ^c ^a l l ^y ^c ^h ^e ^c ^k t h ^e ^c ^a t e ^g ^o ^r ^y ^o ^f ^d i r e ^c t o ^r ^s . ^s ^a ^w . I n ^f ^o r m ^o ^r ^f ^o r m ^u l a t e ^p r o ^p ^o ^s ^a ^l ^s r e ^g ^a r d i n ^g t h ^e ^a ^p ^p ^o i n t m ^e ⁿ ^t ^o ^r ^s ^e ^p ^a r a t i o ⁿ ^o ^f t h ^e ^m ^e ^m ^b ^e ^r ^s t h ^a ^t ^m ^u ^s ^t ^b ^e ^p ^a r t ^o ^f ^e ^a ^c ^h ^o ^f t h ^e ^C ^o ^m ^m i t t e ^e ^s .
^b . ^C ^o ^m ^p ^e t e ⁿ ^c ^e ^s r e l a t e ^d t o t h ^e ^s ^e l e ^c t i o ⁿ ^o ^f ^c ^a ⁿ ^d i d ^a t e ^s ^f ^o ^r ^d i r e ^c t o ^r ^s ^a ⁿ ^d ^s ^e ⁿ i o ^r ^e ^x ^e ^c ^u t i ^v ^e ^s
- i . ^S ^e l e ^c ^t t h ^e ^p ^o ^s ^s ⁱ ^b l e ^c ^a ⁿ ^d i d ^a t e ^s t o ^b ^e , ^w ^h ^e r e ^a ^p ^p r o ^p r i a t e , ^a ^p ^p ^o i n t e ^d ^d i r e ^c t o ^r ^s ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^a ⁿ ^d ^s ^u ^b ^m i t t h ^e i r ^p r o ^p ^o ^s ^a ^l ^s ^o ^r r e ^p ^o r t ^s , ^a ^s ^a ^p ^p r o ^p r i a t e , t o t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s t h r o ^u ^g ^h i t ^s ^C ^h ^a i r m ^a ⁿ .
- i i . ^B r i n ^g t o t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s t h ^e ⁿ ^o ^m i n ^a t i o ⁿ ^p r o ^p ^o ^s ^a ^l ^s ( ^f ^o ^r t h ^e i r ^a ^p ^p ^o i n t m ^e ⁿ ^t ^b ^y ^c ^o ï o ^p t i o ⁿ ^o ^r ^f ^o ^r ^s ^u ^b ^m ⁱ ^s ^s i o ⁿ t o t h ^e ^d ^e ^c ⁱ ^s i o ⁿ ^o ^f t h ^e ^G ^e ⁿ ^e r a ^l ^S ^h ^a r e ^h ^o l d ^e ^r ^s ' ^M ^e ^e t i n ^g ) ^o ^f t h ^e i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^d i r e ^c t o ^r ^s , ^a ^s ^w ^e l l ^a ^s t h ^e ^p r o ^p ^o ^s ^a ^l ^s ^f ^o ^r t h ^e r e ï e l e ^c t i o ⁿ ^o ^f ^s ^a i d ^d i r e ^c t o ^r ^s ^b ^y t h ^e ^G ^e ⁿ ^e r a ^l ^M ^e ^e t i n ^g .
- i i i I n ^f ^o r m , ^a ^t t h ^e r e ^q ^u ^e ^s ^t ^o ^f t h ^e ^C ^h ^a i r m ^a ⁿ ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s , t h ^e ⁿ ^o ^m i n ^a t i o ⁿ ^p r o ^p ^o ^s ^a ^l ^s ( ^f ^o ^r t h ^e i r ^a ^p ^p ^o i n t m ^e ⁿ ^t ^b ^y ^c ^o ï o ^p t a t i o ⁿ ^o ^r ^f ^o ^r ^s ^u ^b ^m ⁱ ^s ^s i o ⁿ t o t h ^e ^d ^e ^c ⁱ ^s i o ⁿ ^o ^f t h ^e ^G ^e ⁿ ^e r a ^l ^S ^h ^a r e ^h ^o l d ^e ^r ^s ' ^M ^e ^e t i n ^g ) ^o ^f t h ^e r e ^m ^a i n i n ^g ^d i r e ^c t o ^r ^s , ^a ^s ^w ^e l l ^a ^s t h ^e ^p r o ^p ^o ^s ^a ^l ^s ^f ^o ^r r e ï e l e ^c t i o ⁿ ^o ^f ^s ^a i d ^d i r e ^c t o ^r ^s ^b ^y ^T ^h ^e ^G ^e ⁿ ^e r a ^l ^M ^e ^e t i n ^g
- ⁱ ^v . ^P r e ^p ^a r e t h ^e r e ^p ^o r t r e ^f ^e r r e ^d t o i n ^a r t i ^c l e ⁵ . 6 ^o ^f t h ^e ^B ^o ^a r d ^R ^e ^g ^u l a t i o ⁿ ^s ^a ⁿ ^d ^v ^e r i f y ^a ⁿ ⁿ ^u ^a l l ^y ^c ^o ^m ^p l i a ⁿ ^c ^e ^w i t h t h ^e ^p ^o l i ^c ^y ^f ^o ^r t h ^e ^s ^e l e ^c t i o ⁿ ^o ^f ^d i r e ^c t o ^r ^s , r e ^p ^o r t i n ^g i t i n t h ^e ^a ⁿ ⁿ ^u ^a ^l ^c ^o r p ^o r a t e ^g ^o ^v ^e r n ^a ⁿ ^c ^e r e ^p ^o r t . I n ^p ^a r t i ^c ^u l a r , t h ^e ^C ^o ^m ^m i t t e ^e ^w i l l ^e ⁿ ^s ^u r e t h ^a t , ^w ^h ^e ⁿ ⁿ ^e ^w ^v ^a ^c ^a ⁿ ^c i e ^s ^a r e ^p r o ^v i d ^e ^d ^o ^r ^w ^h ^e ⁿ ^a ^p ^p ^o i n t i n ^g ⁿ ^e ^w ^d i r e ^c t o ^r ^s , t h ^e ^s ^e l e ^c t i o ⁿ ^p r o ^c ^e ^d ^u r e ^s ^d ^o ⁿ ^o ^t ^s ^u f f ^e ^r ^f r o ^m i m ^p l i ^c i t ^b i a ^s ^e ^s t h ^a ^t ^m ^a ^y i m ^p ^l ^y ^a ⁿ ^y ^d ⁱ ^s ^c r i m i n ^a t i o ⁿ ^a ⁿ ^d , i n ^p ^a r t i ^c ^u l a r , t h ^a ^t ^m ^a ^y ^h i n ^d ^e ^r t h ^e ^s ^e l e ^c t i o ⁿ ^o ^f ^f ^e ^m ^a l e ^d i r e ^c t o ^r ^s .
- ^v . I n ^f ^o r m t h ^e ^p r o ^p ^o ^s ^a ^l ^s ^o ^f t h ^e ^C ^h ^a i r m ^a ⁿ ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^o ^r t h ^e ^C ^E ^O r e ^g ^a r d i n ^g t h ^e ^a ^p ^p ^o i n t m ^e ⁿ ^t ^o ^r ^s ^e ^p ^a r a t i o ⁿ ^o ^f ^s ^e ⁿ i o ^r ^m ^a ⁿ ^a ^g ^e ^r ^s .
^c . ^C ^o ^m ^p ^e t e ⁿ ^c ^e ^s r e l a t e ^d t o t h ^e ^p r o ^c ^e ^s ^s ^o ^f ^a ^p ^p ^o i n t m ^e ⁿ ^t ^o ^f i n t e r n ^a ^l ^p ^o ^s i t i o ⁿ ^s ^o ^f t h ^e ^B ^o ^a r d

^o ^f ^D i r e ^c t o ^r ^s

i . I n ^f ^o r m ^p r o ^p ^o ^s ^a ^l ^s r e ^g ^a r d i n ^g t h ^e ^a ^p ^p ^o i n t m ^e ⁿ ^t ^o ^r ^s ^e ^p ^a r a t i o ⁿ ^o ^f t h ^e ^C ^h ^a i r m ^a ⁿ ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s .
i i . I n ^f ^o r m t h ^e ^p r o ^p ^o ^s ^a ^l ^s ^o ^f t h ^e ^C ^h ^a i r m ^a ⁿ ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s r e ^g ^a r d i n ^g t h ^e ^a ^p ^p ^o i n t m ^e ⁿ ^t ^o ^r ^s ^e ^p ^a r a t i o ⁿ ^o ^f t h ^e ^C ^E ^O .
i i i . ^E ^x ^a ^m i n ^e ^o ^r ^o ^r ^g ^a ⁿ ⁱ ^z ^e t h ^e ^s ^u ^c ^c ^e ^s ^s i o ⁿ ^o ^f t h ^e ^C ^h ^a i r m ^a ⁿ ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^a ⁿ ^d t h ^e ^C ^h i e ^f ^E ^x ^e ^c ^u t i ^v ^e ^O f f ⁱ ^c ^e ^r ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^a ⁿ ^d , ^w ^h ^e r e ^a ^p ^p r o ^p r i a t e , ^m ^a ^k ^e ^p r o ^p ^o ^s ^a ^l ^s t o t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^s ^o t h ^a ^t ^s ^u ^c ^h ^s ^u ^c ^c ^e ^s ^s i o ⁿ ^o ^c ^c ^u ^r ^s i n ^a ⁿ ^o r d ^e r l ^y ^a ⁿ ^d ^p l a ⁿ ⁿ ^e ^d ^m ^a ⁿ ⁿ ^e r , ^p r e ^p ^a r i n ^g ^a ^s ^u ^c ^c ^e ^s ^s i o ⁿ ^p l a ⁿ ^f ^o ^r t h ⁱ ^s ^p ^u r p ^o ^s ^e . .
ⁱ ^v . ^A ^d ^v ⁱ ^c ^e t h ^e ^p r o ^p ^o ^s ^a ^l ^s ^o ^f t h ^e ^C ^h ^a i r m ^a ⁿ ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s r e ^g ^a r d i n ^g t h ^e ^a ^p ^p ^o i n t m ^e ⁿ ^t ^o ^r ^s ^e ^p ^a r a t i o ⁿ ^o ^f t h ^e ^V ⁱ ^c ^e ^C ^h ^a i r m ^a ⁿ ^o ^r ^V ⁱ ^c ^e ï C ^h ^a i r ^s ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s .
^v . ^B r i n ^g t o t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s t h ^e ^p r o ^p ^o ^s ^a ^l ^f ^o ^r t h ^e ^a ^p ^p ^o i n t m ^e ⁿ ^t ^o ^f ^a ⁿ I n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^C ^o ^o r d i n ^a t i n ^g ^D i r e ^c t o r , ^w ^h ^o ^w i l l ^b ^e ^e ^s ^p ^e ^c i a l l ^y ^e ^m ^p ^o ^w ^e r e ^d i n t h ^e ^e ^v ^e ⁿ ^t t h ^a ^t t h ^e ^C ^h ^a i r m ^a ⁿ ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^e ^x ^e ^r ^c ⁱ ^s ^e ^s ^e ^x ^e ^c ^u t i ^v ^e ^f ^u ⁿ ^c t i o ⁿ ^s , ^a ⁿ ^d t o i n ^f ^o r m t h ^e ^p r o ^p ^o ^s ^a ^l ^o ^f t h ^e i r ^s ^e ^p ^a r a t i o ⁿ .
^v i . ^A ^d ^v ⁱ ^c ^e ^o ^f t h ^e ^p r o ^p ^o ^s ^a ^l ^s ^o ^f t h ^e ^C ^h ^a i r m ^a ⁿ ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s r e ^g ^a r d i n ^g t h ^e ^a ^p ^p ^o i n t m ^e ⁿ ^t ^o ^r r e ^m ^o ^v ^a ^l ^o ^f t h ^e ^s ^e ^c r e t a ^r ^y ^a ⁿ ^d , ^w ^h ^e r e ^a ^p ^p r o ^p r i a t e , ^o ^f t h ^e ^D ^e ^p ^u ^t ^y ^s ^e ^c r e t a ^r ^y ^o ^r ^D ^e ^p ^u ^t ^y ^s ^e ^c r e t a r i e ^s ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s , ^o ^f t h ^e ^s ^e ^c r e t a ^r ^y ^g ^e ⁿ ^e r a ^l ^a ⁿ ^d ^o ^f t h ^e l e ^g ^a ^l ^c ^o ^u ⁿ ^s ^e l .
^d . ^C ^o ^m ^p ^e t e ⁿ ^c ^e ^s r e l a t e ^d t o t h ^e ^a ^s ^s ^e ^s ^s ^m ^e ⁿ ^t ^o ^f ^d i r e ^c t o ^r ^s
- i . ^E ^s t a ^b l i ^s ^h ^a ⁿ ^d ^o ^v ^e ^r ^s ^e ^e ^a ⁿ ^a ⁿ ⁿ ^u ^a ^l ^p r o ^g r a ^m ^o ^f ^e ^v ^a l u ^a t i o ⁿ ^a ⁿ ^d ^c ^o ⁿ t i n ^u ^o ^u ^s r e ^v i e ^w ^o ^f t h ^e ^q ^u ^a l i ^f ⁱ ^c ^a t i o ⁿ , t r a i n i n ^g ^a ⁿ ^d , ^w ^h ^e r e ^a ^p ^p r o ^p r i a t e , i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^c ^e , ^a ^s ^w ^e l l ^a ^s t h ^e ^m ^a i n t e ⁿ ^a ⁿ ^c ^e ^o ^f t h ^e ⁿ ^e ^c ^e ^s ^s ^a ^r ^y ^c ^o ⁿ ^d i t i o ⁿ ^s ^f ^o ^r t h ^e ^e ^x ^e ^r ^c ⁱ ^s ^e ^o ^f t h ^e ^p ^o ^s i t i o ⁿ ^o ^f ^d i r e ^c t o ^r ^a ⁿ ^d ^m ^e ^m ^b ^e ^r ^o ^f ^a ^c ^e r t a i n ^C ^o ^m ^m i t t e ^e , ^a ⁿ ^d ^p r o ^p ^o ^s i n ^g ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s t h ^e ^m ^e ^a ^s ^u r e ^s i t ^d ^e ^e ^m ^s ^a ^p ^p r o ^p r i a t e i n t h ⁱ ^s r e ^g ^a r d . I n ^p ^a r t i ^c ^u l a r , i t ^w i l l ^p ^e r i o ^d ⁱ ^c ^a l l ^y ^d ^e ^s ⁱ ^g ⁿ ^a ⁿ ^d ^o ^r ^g ^a ⁿ ⁱ ^z ^e ^k ⁿ ^o ^w l e ^d ^g ^e ^u ^p ^d ^a t e ^p r o ^g r a ^m ^s ^f ^o ^r t h ^e ^d i r e ^c t o ^r ^s .
- i i . ^C ^o ⁿ ^d ^u ^c ^t i n ^c ^o ^o r d i n ^a t i o ⁿ ^w i t h t h ^e ^C ^h ^a i r m ^a ⁿ ^o ^f t h ^e ^B ^o ^a r d ^a ⁿ ^d ^w i t h t h ^e ^c ^o l l a ^b ^o r a t i o ⁿ , ^w ^h ^e r e ^a ^p ^p r o ^p r i a t e , ^o ^f t h ^e I n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^C ^o ^o r d i n ^a t i n ^g ^D i r e ^c t o r , t h ^e ^a ⁿ ⁿ ^u ^a ^l ^e ^v ^a l u ^a t i o ⁿ ^o ^f t h ^e ^f ^u ⁿ ^c t i o ⁿ i n ^g ^o ^f t h ^e ^B ^o ^a r d ^a ⁿ ^d i t ^s ^c ^o ^m ^m i t t e ^e ^s , i n ^c l u ^d i n ^g t h ^e ^p ^e ^r ^f ^o r m ^a ⁿ ^c ^e ^e ^v ^a l u ^a t i o ⁿ ^o ^f t h ^e ^C ^h ^a i r m ^a ⁿ ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^a ⁿ ^d t h ^e ^C ^h i e ^f ^E ^x ^e ^c ^u t i ^v ^e ^O f f ⁱ ^c ^e r , ^a ⁿ ^d ^s ^u ^b ^m i t t o t h ^e ^B ^o ^a r d t h ^e r e ^s ^u l t ^s ^o ^f i t ^s ^e ^v ^a l u ^a t i o ⁿ t o ^g ^e t h ^e ^r ^w i t h ^a ^p r o ^p ^o ^s ^a ^l ^f ^o ^r ^a ⁿ ^a ^c t i o ⁿ ^p l a ⁿ ^o ^r ^w i t h r e ^c ^o ^m ^m ^e ⁿ ^d ^a t i o ⁿ ^s t o ^c ^o r r e ^c ^t t h ^e ^p ^o ^s ^s ⁱ ^b l e ^d ^e ^f ⁱ ^c i e ⁿ ^c i e ^s ^d ^e t e ^c t e ^d ^o ^r i m ^p r o ^v ^e i t ^s ^f ^u ⁿ ^c t i o ⁿ i n ^g .
^e . ^C ^o ^m ^p ^e t e ⁿ ^c ^e ^s r e l a t e ^d t o t h ^e ^s ^e ^p ^a r a t i o ⁿ ^a ⁿ ^d ^d ⁱ ^s ^m ⁱ ^s ^s ^a ^l ^o ^f ^d i r e ^c t o ^r ^s
- i . I n ^f ^o r m t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^a ^b ^o ^u ^t t h ^e ^p r o ^p ^o ^s ^a ^l ^s ^f ^o ^r t h ^e ^s ^e ^p ^a r a t i o ⁿ ^o ^f ⁿ ^o ⁿ ^ï i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^d i r e ^c t o ^r ^s i n t h ^e ^e ^v ^e ⁿ ^t ^o ^f ⁿ ^o ⁿ ^ï ^c ^o ^m ^p l i a ⁿ ^c ^e ^w i t h t h ^e ^d ^u t i e ^s i n ^h ^e r e ⁿ ^t t o t h ^e ^p ^o ^s i t i o ⁿ ^o ^f ^d i r e ^c t o ^r ^o ^r ^f ^o ^r ^h ^a ^v i n ^g i n ^c ^u r r e ^d i n ^a ⁿ ^u ⁿ ^e ^x ^p ^e ^c t e ^d ^w ^a ^y i n ^a ⁿ ^y ^o ^f t h ^e ^c i r ^c ^u ^m ^s t a ⁿ ^c ^e ^s ^o ^f r e ^s ⁱ ^g ⁿ ^a t i o ⁿ ^o ^r t e r m i n ^a t i o ⁿ , i n ^a ^c ^c ^o r d ^a ⁿ ^c ^e ^w i t h t h ^e l a ^w ^o ^r I n t e r n ^a ^l r e ^g ^u l a t i o ⁿ ^s ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y .
- i i . ^P r o ^p ^o ^s ^e t o t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s t h ^e ^p r o ^p ^o ^s ^a ^l ^s ^f ^o ^r t h ^e ^s ^e ^p ^a r a t i o ⁿ ^o ^f i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^d i r e ^c t o ^r ^s i n ^c ^a ^s ^e ^o ^f ^b r e ^a ^c ^h ^o ^f t h ^e ^d ^u t i e ^s i n ^h ^e r e ⁿ ^t t o t h ^e ^p ^o ^s i t i o ⁿ ^o ^f ^d i r e ^c t o ^r ^o ^r ^f ^o ^r ^h ^a ^v i n ^g i n ^c ^u r r e ^d i n ^a ⁿ ^u ⁿ ^e ^x ^p ^e ^c t e ^d ^w ^a ^y i n ^a ⁿ ^y ^o ^f t h ^e ^c i r ^c ^u ^m ^s t a ⁿ ^c ^e ^s ^o ^f r e ^s ⁱ ^g ⁿ ^a t i o ⁿ ^o ^r t e r m i n ^a t i o ⁿ , i n ^a ^c ^c ^o r d ^a ⁿ ^c ^e ^w i t h t h ^e l a ^w ^o ^r i n t e r n ^a ^l r e ^g ^u l a t i o ⁿ ^s ^o ^f t h ^e ^s ^o ^c i e ^t ^y .
^f . ^C ^o ^m ^p ^e t e ⁿ ^c ^e ^s r e l a t e ^d t o r e ^m ^u ⁿ ^e r a t i o ⁿ ^o ^f ^d i r e ^c t o ^r ^s ^a ⁿ ^d ^s ^e ⁿ i o ^r ^e ^x ^e ^c ^u t i ^v ^e ^s
- i . ^P r o ^p ^o ^s ^e t o t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s t h ^e r e ^m ^u ⁿ ^e r a t i o ⁿ ^p ^o l i ^c ^y ^f ^o ^r ^d i r e ^c t o ^r ^s ^a ⁿ ^d ^s ^e ⁿ i o ^r ^e ^x ^e ^c ^u t i ^v ^e ^s .
- i i . ^P ^e r i o ^d ⁱ ^c ^a l l ^y r e ^v i e ^w t h ^e r e ^m ^u ⁿ ^e r a t i o ⁿ ^p ^o l i ^c ^y ^f ^o ^r ^d i r e ^c t o ^r ^s ^a ⁿ ^d ^s ^e ⁿ i o ^r ^e ^x ^e ^c ^u t i ^v ^e ^s , i n ^c l u ^d i n ^g r e ^m ^u ⁿ ^e r a t i o ⁿ ^s ^y ^s t e ^m ^s ^w i t h ^s ^h ^a r e ^s ^a ⁿ ^d t h ^e i r ^a ^p ^p l i ^c ^a t i o ⁿ , ^a ^s ^w ^e l l ^a ^s ^e ⁿ ^s ^u r e t h ^a ^t t h ^e i r i n ^d ⁱ ^v i d ^u ^a ^l r e ^m ^u ⁿ ^e r a t i o ⁿ ⁱ ^s ^p r o ^p ^o r t i o ⁿ ^a t e t o t h ^o ^s ^e ^p ^a i d ^b ^y t h ^e ^o t h ^e ^r ^d i r e ^c t o ^r ^s ^a ⁿ ^d ^s ^e ⁿ i o ^r ^m ^a ⁿ ^a ^g ^e ^r ^s ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y , ^a ^s ^w ^e l l ^a ^s ^e ⁿ ^s ^u r i n ^g ^b ^y i t ^s ^o ^b ^s ^e ^r ^v ^a ⁿ ^c ^e , ^b ^e i n ^g ^a ^b l e t o ^p r o ^p ^o ^s ^e i t ^s ^m ^o ^d ⁱ ^f ⁱ ^c ^a t i o ⁿ ^a ⁿ ^d ^u ^p ^d ^a t e t o t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s .
- i i i . ^P r o ^p ^o ^s ^e t o t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s t h ^e i n ^d ⁱ ^v i d ^u ^a ^l r e ^m ^u ⁿ ^e r a t i o ⁿ ^o ^f ⁿ ^o ⁿ ï e ^x ^e ^c ^u t i ^v ^e ^d i r e ^c t o ^r ^s , t a ^k i n ^g i n t o ^a ^c ^c ^o ^u ⁿ ^t t h ^e ^f ^u ⁿ ^c t i o ⁿ ^s ^a ⁿ ^d r e ^s ^p ^o ⁿ ^s ⁱ ^b i l i t ^y ^a t t r i ^b ^u t e ^d t o ^e ^a ^c ^h ^d i r e ^c t o r .
- ⁱ ^v . ^P r o ^p ^o ^s ^e t h ^e i n ^d ⁱ ^v i d ^u ^a ^l r e ^m ^u ⁿ ^e r a t i o ⁿ ^o ^f ^e ^x ^e ^c ^u t i ^v ^e ^d i r e ^c t o ^r ^s ^a ⁿ ^d t h ^e ^o t h ^e ^r ^b ^a ^s ⁱ ^c ^c ^o ⁿ ^d i t i o ⁿ ^s ^o ^f t h ^e i r ^c ^o ⁿ t r a ^c ^t ^s ^f ^o ^r ^a ^p ^p r o ^v ^a ^l ^b ^y t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s , i n ^c l u ^d i n ^g ^a ⁿ ^y ^c ^o ^m ^p ^e ⁿ ^s ^a t i o ⁿ t h ^a ^t ^m ^a ^y ^b ^e ^s ^e ^t ^f ^o ^r t h ^e ^e ^v ^e ⁿ ^t ^o ^f ^e ^a r l ^y t e r m i n ^a t i o ⁿ ^o ^f t h ^e i r ^d ^u t i e ^s ^a ⁿ ^d t h ^e ^a ^m ^o ^u ⁿ ^t ^s t o ^b ^e ^p ^a i d ^b ^y t h ^e ^C ^o ^m ^p ^a ⁿ ^y i n ^c ^o ⁿ ^c ^e ^p ^t ^o ^f i n ^s ^u r a ⁿ ^c ^e ^p r e ^m i u ^m ^s ^o ^r ^c ^o ⁿ t r i ^b ^u t i o ⁿ ^s t o ^s ^a ^v i n ^g ^s ^s ^y ^s t e ^m ^s , i n ^a ⁿ ^y ^c ^a ^s ^e i n ^a ^c ^c ^o r d ^a ⁿ ^c ^e ^w i t h t h ^e ^p r o ^v ⁱ ^s i o ⁿ ^s ^o ^f t h ^e i n t e r n ^a ^l r e ^g ^u l a t i o ⁿ ^s ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^a ⁿ ^d , i n ^p ^a r t i ^c ^u l a r , i n ^a ^c ^c ^o r d ^a ⁿ ^c ^e ^w i t h t h ^e r e ^m ^u ⁿ ^e r a t i o ⁿ ^p ^o l i ^c ^y ^a ^p ^p r o ^v ^e ^d ^b ^y t h ^e ^G ^e ⁿ ^e r a ^l ^M ^e ^e t i n ^g ^o ^f ^S ^h ^a r e ^h ^o l d ^e ^r ^s .
- ^v . I n ^f ^o r m ^a ⁿ ^d ^s ^u ^b ^m i t t o t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s t h ^e ^p r o ^p ^o ^s ^a ^l ^s ^o ^f t h ^e ^C ^h ^a i r m ^a ⁿ ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^o ^r t h ^e ^C ^h i e ^f ^E ^x ^e ^c ^u t i ^v ^e ^O f f ⁱ ^c ^e ^r r e ^g ^a r d i n ^g t h ^e r e ^m ^u ⁿ ^e r a t i o ⁿ ^s t r u ^c t u r e ^o ^f ^s ^e ⁿ i o ^r ^m ^a ⁿ ^a ^g ^e ^r ^s ^a ⁿ ^d t h ^e ^b ^a ^s ⁱ ^c ^c ^o ⁿ ^d i t i o ⁿ ^s ^o ^f t h ^e i r ^c ^o ⁿ t r a ^c ^t ^s , i n ^c l u ^d i n ^g ^a ⁿ ^y ^c ^o ^m ^p ^e ⁿ ^s ^a t i o ⁿ ^o ^r ^c ^o ^m ^p ^e ⁿ ^s ^a t i o ⁿ t h ^a ^t ^m ^a ^y ^b ^e ^s ^e ^t ^f ^o ^r t h ^e ^a ^s ^s ^u ^m ^p t i o ⁿ ^o ^f ^s ^e ^p ^a r a t i o ⁿ .
- ^v i . ^R ^e ^v i e ^w t h ^e ^c ^o ⁿ ^d i t i o ⁿ ^s ^o ^f t h ^e ^c ^o ⁿ t r a ^c ^t ^s ^o ^f ^e ^x ^e ^c ^u t i ^v ^e ^d i r e ^c t o ^r ^s ^a ⁿ ^d ^s ^e ⁿ i o ^r ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^a ⁿ ^d ^v ^e r i f y t h ^a ^t t h ^e ^y ^a r e ^c ^o ⁿ ^s ⁱ ^s t e ⁿ ^t ^w i t h ^c ^u r r e ⁿ ^t r e ^m ^u ⁿ ^e r a t i o ⁿ ^p ^o l i ^c i e ^s .
- ^v i i . ^E ⁿ ^s ^u r e ^c ^o ^m ^p l i a ⁿ ^c ^e ^w i t h t h ^e ^C ^o ^m ^p ^a ⁿ ^y ' s ^c ^o ^m ^p ^e ⁿ ^s ^a t i o ⁿ ^p r o ^g r a ^m ^s ^a ⁿ ^d i n ^f ^o r m t h ^e ^d ^o ^c ^u ^m ^e ⁿ ^t ^s t o ^b ^e ^a ^p ^p r o ^v ^e ^d ^b ^y t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^f ^o ^r ^g ^e ⁿ ^e r a ^l ^d ⁱ ^s ^c l o ^s ^u r e r e ^g ^a r d i n ^g i n ^f ^o r m ^a t i o ⁿ ^o ⁿ r e ^m ^u ⁿ ^e r a t i o ⁿ , i n ^c l u ^d i n ^g t h ^e ^A ⁿ ⁿ ^u ^a ^l ^R ^e ^p ^o r t ^o ⁿ ^D i r e ^c t o ^r ^s ' ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^a ⁿ ^d t h ^e ^c ^o r r e ^s ^p ^o ⁿ ^d i n ^g ^s ^e ^c t i o ⁿ ^s ^o ^f t h ^e ^A ⁿ ⁿ ^u ^a ^l ^c ^o r p ^o r a t e ^g ^o ^v ^e r n ^a ⁿ ^c ^e r e ^p ^o r t ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y , ^a ^s ^w ^e l l ^a ^s ^v ^e r i f y i n ^g t h ^e i n ^f ^o r m ^a t i o ⁿ ^o ⁿ r e ^m ^u ⁿ ^e r a t i o ⁿ ^o ^f ^d i r e ^c t o ^r ^s ^a ⁿ ^d ^s ^e ⁿ i o ^r ^e ^x ^e ^c ^u t i ^v ^e ^s ^c ^o ⁿ t a i n ^e ^d i n t h ^e ^d ⁱ f f ^e r e ⁿ ^t ^c ^o r p ^o r a t e ^d ^o ^c ^u ^m ^e ⁿ ^t ^s .
- ^v i i i . I n ^f ^o r m , ^o ⁿ ^a ^m ^a ⁿ ^d ^a t o ^r ^y ^b ^a ^s ⁱ ^s ^a ⁿ ^d ^p r i o ^r t o i t ^s ^a ^p ^p r o ^v ^a ^l ^b ^y t h ^e ^c ^o ^m ^p ^e t e ⁿ ^t ^c ^o r p ^o r a t e ^b ^o ^d ^y , t h ^e r e ^m ^u ⁿ ^e r a t i o ⁿ ^e ^s t a ^b l i ^s ^h ^e ^d ^f ^o ^r t h ^e i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^d i r e ^c t o ^r ^s ^o ^f ^o t h ^e ^r ^G r o ^u ^p ^c ^o ^m ^p ^a ⁿ i e ^s .
^g . ^C ^o ^m ^p ^e t e ⁿ ^c ^e ^s r e l a t e ^d t o ^c ^o r p ^o r a t e ^s ^o ^c i a ^l r e ^s ^p ^o ⁿ ^s ⁱ ^b i l i t ^y ^a ⁿ ^d ^s ^u ^s t a i n ^a ^b i l i t ^y :
- i . ^B ^e ^a ^w ^a r e ^o ^f , ^p r o ^m ^o t e , ^g ^u i d ^e ^a ⁿ ^d ^s ^u ^p ^e ^r ^v ⁱ ^s ^e t h ^e ^a ^c t i o ⁿ ^s , ^p r a ^c t i ^c ^e ^s ^a ⁿ ^d ^s t r a t e ^g ^y ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y i n ^m ^a t t e ^r ^s ^o ^f ^c ^o r p ^o r a t e ^s ^o ^c i a ^l r e ^s ^p ^o ⁿ ^s ⁱ ^b i l i t ^y ^a ⁿ ^d ^s ^u ^s t a i n ^a ^b i l i t ^y , ^a ^s ^s ^e ^s ^s i n ^g t h ^e i r ^d ^e ^g r e ^e ^o ^f ^c ^o ^m ^p l i a ⁿ ^c ^e , ^a ⁿ ^d r e ^p ^o r t ^o ⁿ i t t o t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^o r , ^w ^h ^e r e ^a ^p ^p r o ^p r i a t e , t o t h ^e ^E ^x ^e ^c ^u t i ^v ^e ^C ^o ^m ^m i t t e ^e .
- i i . ^R ^e ^v i e ^w t h ^e ^c ^o r p ^o r a t e r e ^s ^p ^o ⁿ ^s ⁱ ^b i l i t ^y ^p ^o l i ^c ^y ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y , ^e ⁿ ^s ^u r i n ^g t h ^a ^t i t ⁱ ^s ^o r i e ⁿ t e ^d t o t h ^e ^c r e ^a t i o ⁿ ^o ^f ^v ^a l u ^e , i n ^c l u ^d i n ^g i t ^s ^m ^o ⁿ i t o r i n ^g ^a ⁿ ^d ^e ^v ^a l u ^a t i o ⁿ ^a ⁿ ^d ^s ^u ^p ^e ^r ^v ⁱ ^s ^e i t ^s ^d ^e ^g r e ^e ^o ^f ^c ^o ^m ^p l i a ⁿ ^c ^e . ^T ^h ^e r e ^p ^o r t t h ^a t , ⁱ ^f ^a ^p ^p l i ^c ^a ^b l e , t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^o ⁿ t h ^e ^c ^o r p ^o r a t e ^s ^o ^c i a ^l r e ^s ^p ^o ⁿ ^s ⁱ ^b i l i t ^y ^p ^o l i ^c ^y ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^w i l l ^b ^e ^p r e ^p ^a r e ^d ^u ^s i n ^g ^a ⁿ ^y ^o ^f t h ^e i n t e r n ^a t i o ⁿ ^a l l ^y ^a ^c ^c ^e ^p t e ^d ^m ^e t h ^o ^d ^o l o ^g i e ^s ^a ⁿ ^d ^w i l l ^b ^e ^a ^v ^a i l a ^b l e t o ^s ^h ^a r e ^h ^o l d ^e ^r ^s ^a ⁿ ^d i n ^v ^e ^s t o ^r ^s t h r o ^u ^g ^h t h ^e ^w ^e ^b ^s i t e ^o ^f t h ^e

^C ^o ^m ^p ^a ⁿ ^y ^w ^e l l i n ^a ^d ^v ^a ⁿ ^c ^e ^o ^f t h ^e ^O r d i n ^a ^r ^y ^G ^e ⁿ ^e r a ^l ^M ^e ^e t i n ^g .

i i i . ^S ^u ^p ^e ^r ^v ⁱ ^s ^e ^a ⁿ ^d ^e ^v ^a l u ^a t e t h ^e r e l a t i o ⁿ ^s ^h i p ^p r o ^c ^e ^s ^s ^e ^s ^w i t h t h ^e ^d ⁱ f f ^e r e ⁿ ^t i n t e r e ^s ^t ^g r o ^u ^p ^s .

^h . ^E ⁿ ^s ^u r e t h ^a ^t ^a ⁿ ^y ^c ^o ⁿ ^f l i ^c ^t ^s ^o ^f i n t e r e ^s ^t ^d ^o ⁿ ^o ^t ^p r e ^j ^u ^d ⁱ ^c ^e t h ^e i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^c ^e ^o ^f t h ^e ^e ^x t e r n ^a ^l ^a ^d ^v ⁱ ^c ^e ^p r o ^v i d ^e ^d t o t h ^e ^C ^o ^m ^m i t t e ^e i n r e l a t i o ⁿ t o t h ^e ^e ^x ^e ^r ^c ⁱ ^s ^e ^o ^f i t ^s ^f ^u ⁿ ^c t i o ⁿ ^s . I n t h ^e ^d ^e ^v ^e l o ^p ^m ^e ⁿ ^t ^a ⁿ ^d ^e ^x ^e ^r ^c ⁱ ^s ^e ^o ^f i t ^s ^f ^u ⁿ ^c t i o ⁿ ^s , t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^w i l l t a ^k ^e i n t o ^a ^c ^c ^o ^u ⁿ ^t t h ^e ^p r i n ^c i p l e ^s ^a ⁿ ^d ^c r i t e r i a ^e ^s t a ^b l i ^s ^h ^e ^d i n ^T ^e ^c ^h ⁿ ⁱ ^c ^a ^l ^G ^u i d ^e 1 / 2 ⁰ 1 9 ^o ⁿ ^a ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d r e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^o ^f t h ^e ^N ^a t i o ⁿ ^a ^l ^S ^e ^c ^u r i t i e ^s ^M ^a r k ^e ^t ^C ^o ^m ^m i t t e ^e ^o ^f ^F ^e ^b r u ^a ^r ^y ² ⁰ , ² ⁰ 1 9 , ⁿ ^o t w i t h ^s t a ⁿ ^d i n ^g t h ^e i r ^a ^d ^a ^p t a t i o ⁿ t o t h ^e ^p ^a r t i ^c ^u l a ^r ^c i r ^c ^u ^m ^s t a ⁿ ^c ^e ^s ^a ⁿ ^d ^c ^h ^a r a ^c t e r i ^s t i ^c ^s ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^a ⁿ ^d i t ^s ^G r o ^u ^p , ^a l w ^a ^y ^s ^f ^o l l o ^w i n ^g t h ^e ^p r i n ^c i p l e ^o ^f ^p r o ^p ^o r t i o ⁿ ^a l i t ^y . ^T ^h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^s ^h ^a l l ^a ⁿ ⁿ ^u ^a l l ^y ^e ^s t a ^b l i ^s ^h ^a ⁿ ^a ^c t i o ⁿ ^p l a ⁿ t h ^a ^t ^w i l l ^c ^o ⁿ t e ^m ^p l a t e t h ^e ^m ^a i n ^a ^c t i ^v i t i e ^s ^o ^f t h ^e ^C ^o ^m ^m i t t e ^e ^d ^u r i n ^g t h ^e ^y ^e ^a ^r i n r e l a t i o ⁿ t o t h ^e ^f ^u ^l ^f i l l m ^e ⁿ ^t ^o ^f i t ^s ^f ^u ⁿ ^c t i o ⁿ ^s , ^o ^f ^w ^h ⁱ ^c ^h i t ^w i l l r e ^p ^o r t t o t h ^e ^B ^o ^a r d , t o ^w ^h ⁱ ^c ^h i t ^w i l l r e ^s ^p ^o ⁿ ^d ^f ^o ^r t h ^e ^w ^o r k ^p ^e ^r ^f ^o r m ^e ^d .

^O ^r ^g ^a ⁿ i s ^a t i o ⁿ ^a ⁿ ^d ^o ^p ^e ^r ^a t i o ⁿ

^T ^h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^s ^h ^a l l ^c ^o ⁿ ^s ⁱ ^s ^t ^o ^f ^a ^m i n i m ^u ^m ^o ^f t h r e ^e ^a ⁿ ^d ^a ^m ^a ^x i m ^u ^m ^o ^f ^f ⁱ ^v ^e ^d i r e ^c t o ^r ^s , ^a ^p ^p ^o i n t e ^d ^b ^y t h ^e ^B ^o ^a r d i t ^s ^e ^l ^f , ^f r o ^m ^a ^m ^o ⁿ ^g t h ^e ^e ^x t e r n ^a ^l ^d i r e ^c t o ^r ^s , ^a ^t t h ^e ^p r o ^p ^o ^s ^a ^l ^o ^f t h ^e ^C ^h ^a i r m ^a ⁿ ^o ^f t h ^e ^B ^o ^a r d , ^e ⁿ ^s ^u r i n ^g t h ^a ^t ^m ^o ^s ^t ^o ^f t h ^e ^m ^a r e i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^d i r e ^c t o ^r ^s

^T ^h ^e ^B ^o ^a r d ^s ^h ^a l l ^a ^p ^p ^o i n ^t t h ^e ^C ^h ^a i r m ^a ⁿ ^o ^f t h ^e ^C ^o ^m ^m i t t e ^e ^f r o ^m ^a ^m ^o ⁿ ^g t h ^e ^d i r e ^c t o ^r ^s ^w ^h ^o ^a r e ^p ^a r t ^o ^f ^s ^a i d ^C ^o ^m ^m i t t e ^e . ^F ^o ^r ^h ⁱ ^s ^p ^a r t , t h ^e ^p ^o ^s i t i o ⁿ ^o ^f ^S ^e ^c r e t a ^r ^y ^a ⁿ ^d ^D ^e ^p ^u ^t ^y ^S ^e ^c r e t a ^r ^y ^o ^f t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^w i l l ^b ^e ^h ^e l d ^b ^y t h ^o ^s ^e ^w ^h ^o ^o ^c ^c ^u ^p ^y ^s ^u ^c ^h ^p ^o ^s i t i o ⁿ ^s ^o ⁿ t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s .

^T ^h ^e ^m ^e ^m ^b ^e ^r ^s ^o ^f t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^w i l l ^h ^a ^v ^e ^a ^d ^e ^q ^u ^a t e ^k ⁿ ^o ^w l e ^d ^g ^e , ^s ^k i l l ^s ^a ⁿ ^d ^e ^x ^p ^e r i e ⁿ ^c ^e t o t h ^e ^f ^u ⁿ ^c t i o ⁿ ^s t h ^e ^y ^a r e ^c ^a l l e ^d t o ^p ^e ^r ^f ^o r m ^a ⁿ ^d , ^w ^h ^e ⁿ ^e ^v ^e ^r t h ⁱ ^s ⁱ ^s ^p ^o ^s ^s ⁱ ^b l e i n ^a ^c ^c ^o r d ^a ⁿ ^c ^e ^w i t h t h ^e ^p r i n ^c i p l e ^o ^f ^p r o ^p ^o r t i o ⁿ ^a l i t ^y , i t ^w i l l ^b ^e ^e ⁿ ^d ^e ^a ^v ^o r e ^d ( ⁱ ) t h ^a ^t t h ^e ^m ^e ^m ^b ^e ^r ^s ^o ^f t h ^e ^C ^o ^m ^m i t t e ^e , i n ^a ^s ^a ^w ^h ^o l e , ^b ^e ^d ^e ^s ⁱ ^g ⁿ ^a t e ^d t a ^k i n ^g i n t o ^a ^c ^c ^o ^u ⁿ ^t t h ^e i r ^k ⁿ ^o ^w l e ^d ^g ^e ^a ⁿ ^d ^e ^x ^p ^e r i e ⁿ ^c ^e i n ^a r e ^a ^s ^s ^u ^c ^h ^a ^s ^h ^u ^m ^a ⁿ r e ^s ^o ^u ^r ^c ^e ^s , ^s ^e l e ^c t i o ⁿ ^o ^f ^d i r e ^c t o ^r ^s ^a ⁿ ^d ^m ^a ⁿ ^a ^g ^e ^r ^s ^a ⁿ ^d ^d ^e ^s ⁱ ^g ⁿ ^o ^f ^p ^o l i ^c i e ^s ^a ⁿ ^d ^c ^o ^m ^p ^e ⁿ ^s ^a t i o ⁿ ^p l a ⁿ ^s ; ^a ⁿ ^d ( i i ) ^f ^a ^v ^o ^r ^d ⁱ ^v ^e ^r ^s i t ^y i n r e l a t i o ⁿ t o ^g ^e ⁿ ^d ^e r , ^p r o ^f ^e ^s ^s i o ⁿ ^a ^l ^e ^x ^p ^e r i e ⁿ ^c ^e , ^s ^k i l l ^s , ^p ^e ^r ^s ^o ⁿ ^a ^l ^a ^b i l i t i e ^s , ^s ^e ^c t o r a ^l ^k ⁿ ^o ^w l e ^d ^g ^e ^o ^r i n t e r n ^a t i o ⁿ ^a ^l ^e ^x ^p ^e r i e ⁿ ^c ^e ; ^a l l ^o ^f t h ⁱ ^s t a ^k i n ^g i n t o ^a ^c ^c ^o ^u ⁿ ^t t h ^e l i m i t a t i o ⁿ ^s ^a r i ^s i n ^g ^f r o ^m t h ^e ^s ^m ^a l l e ^r ^s ⁱ ^z ^e ^o ^f t h ^e ^C ^o ^m ^m i t t e ^e ^w ^h ^e ⁿ ^c ^o ^m ^p ^a r e ^d t o t h ^e ^B ^o ^a r d .

^T ^h ^e ^d i r e ^c t o ^r ^s ^w ^h ^o ^a r e ^p ^a r t ^o ^f t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^w i l l ^h ^o l d t h ^e i r ^p ^o ^s i t i o ⁿ ^s ^w ^h i l e t h ^e i r ^a ^p ^p ^o i n t m ^e ⁿ ^t ^a ^s ^d i r e ^c t o ^r ^s ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y r e ^m ^a i n ^s i n ^e f f ^e ^c t , ^u ⁿ l e ^s ^s t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^a ^g r e ^e ^s ^o t h ^e r w ⁱ ^s ^e .

^T ^h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^w i l l ^m ^e ^e t , ^u ^s ^u ^a l l ^y , ^a ^t l e ^a ^s ^t t h r e ^e t i m ^e ^s ^a ^y ^e ^a r . ^L i k ^e ^w ⁱ ^s ^e , i t ^w i l l ^m ^e ^e ^t ^a ^t t h ^e r e ^q ^u ^e ^s ^t ^o ^f ^a ⁿ ^y ^o ^f i t ^s ^m ^e ^m ^b ^e ^r ^s ^a ⁿ ^d ^e ^a ^c ^h t i m ^e ^c ^o ⁿ ^v ^e ⁿ ^e ^d ^b ^y i t ^s ^C ^h ^a i r m ^a ⁿ , ^w ^h ^o ^m ^u ^s ^t ^d ^o ^s ^o ^w ^h ^e ⁿ ^e ^v ^e ^r t h ^e ^B ^o ^a r d ^o ^r i t ^s ^C ^h ^a i r m ^a ⁿ r e ^q ^u ^e ^s ^t ^s t h ^e ⁱ ^s ^s ^u ^a ⁿ ^c ^e ^o ^f ^a r e ^p ^o r t ^o ^r t h ^e ^a ^d ^o ^p t i o ⁿ ^o ^f ^p r o ^p ^o ^s ^a ^l ^s ^a ⁿ ^d , i n ^a ⁿ ^y ^c ^a ^s ^e , ^w ^h ^e ⁿ ^e ^v ^e ^r i t r e ^s ^u l t ^s ^C ^o ⁿ ^v ^e ⁿ i e ⁿ ^t ^f ^o ^r t h ^e ^p r o ^p ^e ^r ^d ^e ^v ^e l o ^p ^m ^e ⁿ ^t ^o ^f i t ^s ^f ^u ⁿ ^c t i o ⁿ ^s . ^E ^v ^e ^r ^y ^e f f ^o r t ^s ^h ^a l l ^b ^e ^m ^a ^d ^e t o ^e ⁿ ^s ^u r e t h ^a ^t t h ^e ^m ^e ^e t i n ^g ^s ^o ^f t h ^e ^C ^o ^m ^m i t t e ^e t a ^k ^e ^p l a ^c ^e ^w ^e l l i n ^a ^d ^v ^a ⁿ ^c ^e ^o ^f t h ^e ^m ^e ^e t i n ^g ^s ^o ^f t h ^e ^B ^o ^a r d . ^T ^h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^s ^h ^a l l ^b ^e ^v ^a l i d ^l ^y ^c ^o ⁿ ^s t i t u t e ^d ^w ^h ^e ⁿ t h ^e ^m ^a ^j ^o r i t ^y ^o ^f i t ^s ^m ^e ^m ^b ^e ^r ^s ^a ⁿ ^d t h ^e i r ^a ^g r e ^e ^m ^e ⁿ ^t ^s ^a t t e ⁿ ^d , ^p r e ^s ^e ⁿ ^t ^o ^r r e ^p r e ^s ^e ⁿ t e ^d . ^T ^h ^e ^y ^w i l l ^a ^d ^o ^p ^t ^b ^y ^m ^a ^j ^o r i t ^y ^v ^o t e . I n ^c ^a ^s ^e ^o ^f ^a t i e , t h ^e ^C ^h ^a i r m ^a ⁿ ^o ^f t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^w i l l ^h ^a ^v ^e ^a ^q ^u ^a l i t ^y ^v ^o t e .

^T ^h ^e ^C ^o ^m ^m i t t e ^e ^s ^h ^o ^u l d ^c ^o ⁿ ^s ^u l t t h ^e ^C ^h ^a i r m ^a ⁿ , ^e ^s ^p ^e ^c i a l l ^y ^w ^h ^e ⁿ ^d ^e ^a l i n ^g ^w i t h ^m ^a t t e ^r ^s r e l a t e ^d t o ^e ^x ^e ^c ^u t i ^v ^e ^d i r e ^c t o ^r ^s ^a ⁿ ^d ^s ^e ⁿ i o ^r ^m ^a ⁿ ^a ^g ^e ^r ^s .

^O ⁿ ^D ^e ^c ^e ^m ^b ^e ^r 1 2 , ² ⁰ 1 9 , ^a ⁿ ^O ^p ^e r a t i n ^g ^R ^e ^g ^u l a t i o ⁿ ^o ^f t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^w ^a ^s ^a ^p ^p r o ^v ^e ^d i n ^o r d ^e ^r t o ^d ^e ^v ^e l o ^p ^A r t i ^c l e 1 5 ^o ^f t h ^e ^B ^o ^a r d ^R ^e ^g ^u l a t i o ⁿ ^s , i n ^c ^o r p ^o r a t i n ^g t h ^e ^b ^a ^s ⁱ ^c ^a ^s ^p ^e ^c ^t ^s r e ^g ^a r d i n ^g t h ^e ^c ^o ^m ^p ^o ^s i t i o ⁿ , ^f ^u ⁿ ^c t i o ⁿ ^s ^a ⁿ ^d ^f ^u ⁿ ^c t i o ⁿ i n ^g ^o ^f t h ^e ^C ^o ^m ^m i t t e ^e i n ^c l u ^d ^e ^d i n t h ^e ^T ^e ^c ^h ⁿ ⁱ ^c ^a ^l ^G ^u i d ^e 1 / 2 ⁰ 1 9 ^o ^f t h ^e ^C ^N ^M ^V . ^T ^h ^e ^B ^o ^a r d

^R ^e ^g ^u l a t i o ⁿ ^s ^w ^e r e ^a ^l ^s ^o ^m ^o ^d ⁱ ^f i e ^d ^f ^o ^r t h ^e ^s ^e ^s ^a ^m ^e ^p ^u r p ^o ^s ^e ^s .

^c t i v i t i e ^s

^D ^u r i n ^g ² ⁰ 1 9 t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^h ^e l d ⁶ ^m ^e ^e t i n ^g ^s ^a ⁿ ^d ^c ^a r r i e ^d ^o ^u ^t t h ^e ^f ^o l l o ^w i n ^g ^a ^c t i ^v i t i e ^s :

¹ ) ^R ^e ^g ^a r d i n ^g t h ^e ^c ^o ^m ^p ^o ^s i t i o ⁿ ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^a ⁿ ^d i t ^s ^C ^o ^m ^m i t t e ^e ^s ^a ⁿ ^d t h ^e ^p r o ^c ^e ^s ^s ^o ^f ^d ^e ^s ⁱ ^g ⁿ ^a t i n ^g i n t e r n ^a ^l ^p ^o ^s i t i o ⁿ ^s ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^a ⁿ ^d ^s ^e ⁿ i o ^r ^e ^x ^e ^c ^u t i ^v ^e ^s :

• ^A ⁿ ^a l y ^s i s ^o ^f t h ^e ^p ^o ^s ^s i b l e i n ^c ^o ^m ^p ^a t i b i l i t i e ^s ^o ^f ^t ^w ^o ^o ^f i t s ^d i r e ^c t o r s ^b ^e f o r e t h ^e i r ^a ^p ^p ^o i n t m ^e ⁿ ^t ^a ^s ^m ^e ^m ^b ^e ^r ^s ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^o ^f ^o t h ^e ^r ^e ⁿ t i t i e ^s , ^c ^o ⁿ ^c l u ^d i n ^g t h ^a ^t ⁿ ^e i t h ^e ^r ^b ^y t h ^e ⁿ ^u ^m ^b ^e ^r ^o ^f ^m ^e ^e t i n ^g ^s ^a ⁿ ^d ^w ^o r k l o ^a ^d r e ^q ^u i r e ^m ^e ⁿ t , ⁿ ^o ^r ^b ^y t h ^e ^c ^o r p ^o r a t e ^o b j ^e ^c ^t ^s ^o ^f t h ^e ^c ^o ^m ^p ^a ⁿ i e ^s , ⁿ ^o ^r ^b ^y t h ^e ⁿ ^u ^m ^b ^e ^r ^o ^f ^c ^o ^m ^m i t t e ^e ^o ^f ^w ^h ⁱ ^c ^h t h ^e ^d i r e ^c t o ^r ^s ^a r e ^p ^a r t ^o ^f t h ^e r e ^w ^a ^s ⁿ ^o r e ^a ^s ^o ⁿ ^f ^o ^r i n ^c ^o ^m ^p ^a t i ^b i l i t ^y t o ^a ^c ^c ^e ^p ^t t h ^e ^c ^h ^a ^r ^g ^e ^s .
• I n r e ^s ^p ^o ⁿ ^s ^e t o t h ^e ^b ^e ^s ^t ^p r a ^c t i c ^e ^s ^o ^f ^C ^o r p ^o r a t e ^G ^o ^v ^e r n ^a ⁿ ^c ^e , t o t h ^e r e ^c ^o ^m ^m ^e ⁿ ^d ^a t i o ⁿ ^s ^o ^f t h ^e ^C ^N ^M ^V i n ^s ^e ^c t i o ⁿ ³ ^o ^f t h ^e ^T ^h i r d ^S ^e ^c t i o ⁿ ^o ^f ^T ^e ^c ^h ⁿ ⁱ ^c ^a ^l ^G ^u i d ^e 1 / 2 ⁰ 1 9 , t h ^e ^g ^e ⁿ ^e r a ^l r e ^q ^u ^e ^s ^t ^s ^o ^f t h ^e ^s t a ^k ^e ^h ^o l d ^e ^r ^s ^a ⁿ ^d , ^a ^s ^p r o ^v i d ^e ^d i n ^a r t i ^c l e ⁵ ^o ^f t h ^e ⁿ ^e ^w ^R ^e ^g ^u l a t i o ⁿ ^s ^o ^f t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e , t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^C ^o ^m ^m i t t e ^e ^h ^a ^s ^w ^o r k ^e ^d ^d ^u r i n ^g ² ⁰ 1 9 , i n ^c ^o ^o r d i n ^a t i o ⁿ ^w i t h t h ^e ^f ^u l l ^B ^o ^a r d , i n t h ^e ^a ⁿ ^a ^l ^y ^s ⁱ ^s ^o ^f t h ^e ^c ^o ^m ^p ^o ^s i t i o ⁿ ^o ^f t h ^e ^B ^o ^a r d , ^a ^s ^w ^e l l ^a ^s i n t h ^e ^e l a ^b ^o r a t i o ⁿ ^o ^f ^a ^m ^a t r i ^x t h ^a ^t ^d ^e ^f i n ^e ^s t h ^e ⁿ ^e ^c ^e ^s ^s ^a ^r ^y ^c ^o ^m ^p ^e t e ⁿ ^c ^e ^s ^o ^f t h ^e ^B ^o ^a r d ^f ^o ^r t h ^e ^p r o ^p ^e ^r ^f ^u ⁿ ^c t i o ⁿ i n ^g ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^a ⁿ ^d t h ^e ^m ^a i n ^s ^k i l l ^s ^a ⁿ ^d ^k ⁿ ^o ^w l e ^d ^g ^e ^o ^f t h ^e ^D i r e ^c t o ^r ^s . I n t h ⁱ ^s ^c ^o ⁿ t e ^x t , ^a ^t t h ^e ^e ⁿ ^d ^o ^f t h ^e ^y ^e ^a r , t h ^e ^c ^o ^m ^p ^e t e ⁿ ^c ^y ^m ^a t r i ^x ^e ^x ^p l a i n ^e ^d i n ^s ^e ^c t i o ⁿ ^C . 1 . 2 ⁰ ^w ^a ^s ^a ^p ^p r o ^v ^e ^d , ^w ^h ⁱ ^c ^h ^s ^u ^m ^m ^a r i ^z ^e ^s i n ^a ^v ^e ^r ^y ^s ^y ⁿ t h ^e t i ^c ^w ^a ^y t h ^e ^c ^a ^p ^a ^c i t i e ^s t h ^a ^t t h ^e ^B ^o ^a r d ^c ^o ⁿ ^s i d ^e ^r ^s ^m ^o ^s ^t r e l e ^v ^a ⁿ ^t ^f ^o ^r t h ^e ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y , ^p ^o i n t i n ^g ^o ^u ^t t h ^e ^m ^o ^s ^t i m ^p ^o r t a ⁿ ^t ^a ^s ^p ^e ^c ^t ^s ^o ^f t h ^e ^p r o ^f i l e ^o ^f ^e ^a ^c ^h ^O ⁿ ^e ^o ^f t h ^e ^D i r e ^c t o ^r ^s . ^T ^h ⁱ ^s ^m ^a t r i ^x i n ⁿ ^o ^w ^a ^y r e ^f l e ^c ^t ^s t h ^e t o t a l i t ^y ^o ^f t h ^e ^c ^a ^p ^a ^c i t i e ^s ^o ^f t h ^e ^m ^e ^m ^b ^e ^r ^s ^o ^f t h ^e ^B ^o ^a r d , ^b ^u ^t ^o ⁿ ^l ^y t h ^o ^s ^e i n ^w ^h ⁱ ^c ^h ^e ^a ^c ^h ^o ^f t h ^e ^D i r e ^c t o ^r ^s ^c ^a ⁿ ^b ^e ^c ^o ⁿ ^s i d ^e r e ^d ^e ^x ^p ^e r t , ^a ^m ^o ⁿ ^g t h ^o ^s ^e ^p r e ^v i o ^u ^s ^l ^y ^d ^e ^f i n ^e ^d ^a ^s ^e ^s ^s ^e ⁿ t i a l .
• ^A ^p ^p r o ^v ^a ^l ^o ^f t h ^e ^p r o ^p ^o ^s ^a ^l f o ^r t h ^e ^a ^p ^p ^o i n t m ^e ⁿ ^t ^o ^f ^a ⁿ ^e ^w I n t e r n ^a ^l ^A ^u ^d i t o r , ^a l s ^o ^a ^g r e ^e i n ^g t o ^s ^u ^b ^m i t t h ^e ^p r o ^p ^o ^s ^a ^l t o t h ^e ^d ^e ^c ⁱ ^s i o ⁿ ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s .
) ^R ^e ^g ^a r d i n ^g t h ^e ^s ^e l e ^c t i o ⁿ ^o ^f ^c ^a ⁿ ^d i d ^a t e ^s ^f ^o ^r ^D i r e ^c t o ^r ^s :
• T ^h ^e ^C ^o ^m ^m i t t e ^e r e ^v i e ^w ^e ^d ^a ⁿ ^d ^a ^p ^p r o ^v ^e ^d t h ^e ^R ^e ^p ^o r t ^o ^f t h ^e ^C ^o ^m ^m i t t e ^e ^o ⁿ t h ^e r a t i ^f ⁱ ^c ^a t i o ⁿ ^o ^f t h ^e ^a ^p ^p ^o i n t m ^e ⁿ ^t ^o ^f ^M ^r ^s . ^L ^e t i ^c i a ^I ^g l e ^s i a ^s ^a ^s ^a ⁿ i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^d i r e ^c t o ^r ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y , ^a ^l ^s ^o ^a ^g r e ^e t o ^s ^e ⁿ ^d i t t o t h ^e ^B ^o ^a r d ^f ^o ^r ^f i n ^a ^l ^a ^p ^p r o ^v ^a l , ^a r e ^p ^o r t t h ^a ^t ^w ^a ^s ^m ^a ^d ^e ^a ^v ^a i l a ^b l e t o ^s ^h ^a r e ^h ^o l d ^e ^r ^s ^a ^t t h ^e t i m ^e ^o ^f t h ^e ^c ^o ⁿ ^v ^e ⁿ i n ^g ^o ^f t h ^e ^O r d i n ^a ^r ^y ^G ^e ⁿ ^e r a ^l ^M ^e ^e t i n ^g ^o ^f ^S ^h ^a r e ^h ^o l d ^e ^r ^s .
³ ) ^R ^e ^g ^a r d i n ^g t h ^e ^e ^v ^a l u ^a t i o ⁿ ^a ⁿ ^d r e ï e l e ^c t i o ⁿ ^o ^f ^d i r e ^c t o ^r ^s :
- • ^A ⁿ ^a l y ^s i s ^o ^f t h ^e ^a ^b ^s ^e ⁿ ^c ^e ^o ^f ^c ^o ⁿ f l i c t s ^o ^f i n t e r e ^s ^t ^a ⁿ ^d ^h ⁱ r i n ^g ^G ^e ^o ^r ^g ^e ^s ^o ⁿ ^a ^s ^a ⁿ ^e ^x t e r n ^a ^l ^a ^d ^v ⁱ ^s ^o ^r t o ^c ^a r r ^y ^o ^u ^t t h ^e ^e ^v ^a l u ^a t i o ⁿ ^o ^f t h ^e ^B ^o ^a r d , i t ^s ^m ^e ^m ^b ^e ^r ^s ^a ⁿ ^d i t ^s ^C ^o ^m ^m i t t e ^e ^s i n ² ⁰ 1 8 . ^C ^o ^o r d i n ^a t i o ⁿ ^a ⁿ ^d ^s ^u ^p ^e ^r ^v ⁱ ^s i o ⁿ ^o ^f t h ^e ^B ^o ^a r d ' s ^e ^v ^a l u ^a t i o ⁿ ^p r o ^c ^e ^s ^s . I n t h ⁱ ^s ^c ^o ⁿ t e ^x t , ^a ⁿ ^a ^l ^y ^s ⁱ ^s ^o ^f t h ^e ^s t r u ^c t u r e ^a ⁿ ^d ^o ^p ^e r a t i o ⁿ ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^o ^f ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ; ^o ^f t h ^e ^p ^e ^r ^c ^e ^p t i o ⁿ ^s ^a ⁿ ^d ^v ^a l u ^a t i o ⁿ ^s ^o ^f ^e ^a ^c ^h ^o ^f t h ^e ^d i r e ^c t o ^r ^s , t h ^e ^c ^h ^a i r m ^e ⁿ ^o ^f t h ^e ^B ^o ^a r d ^a ⁿ ^d ^C ^o ^m ^m i t t e ^e ^s ^a ⁿ ^d t h ^e ^s ^e ^c r e t a r i a ^t ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y ; ^o ^f t h ^e ^p ^e ^r ^c ^e ^p t i o ⁿ ^o ^f t h ^e ^m ^o ^s ^t r e l e ^v ^a ⁿ ^t i n ^v ^e ^s t o ^r ^s ^a ⁿ ^d ^p r o ^x ^y ^a ^d ^v ⁱ ^s ^o ^r ^s ; ^a ⁿ ^d ^o ^f t h ^e ^m ^a i n ^p ^a r a ^m ^e t e ^r ^s ^o ^f ^c ^o r p ^o r a t e ^g ^o ^v ^e r n ^a ⁿ ^c ^e ^w i t h r e ^s ^p ^e ^c ^t t o ^c ^o ^m ^p ^a r a ^b l e ^c ^o ^m ^p ^a ⁿ i e ^s .
- • ^F ^o l l o ^w i n ^g t h ^e ^e ^v ^a l u ^a t i o ⁿ ^p r o ^c ^e ^s ^s , ^a ⁿ ^a l y ^s i s ^o ^f t h ^e r e ^c ^o ^m ^m ^e ⁿ ^d ^a t i o ⁿ ^s ^a ⁿ ^d t h ^e ^a ^c t i o ⁿ ^p l a ⁿ ^p r o ^p ^o ^s ^e ^d ^b ^y ^G ^e ^o ^r ^g ^e ^s ^o ⁿ , ^a ^g r e ^e i n ^g t o r e ^v i e ^w t h ^e ^c ^o ⁿ ^c l u ^s i o ⁿ ^s ^o ^f t h ^e ^e ^v ^a l u ^a t i o ⁿ i n t h ^e ^p l e ⁿ ^a ^r ^y ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s t o i m ^p l e ^m ^e ⁿ ^t t h ^e ^h ⁱ ^g ^h ^e ^s ^t ⁿ ^u ^m ^b ^e ^r ^o ^f r e ^c ^o ^m ^m ^e ⁿ ^d ^a t i o ⁿ ^s , t h ^u ^s i m ^p r o ^v i n ^g t h ^e ^f ^u ⁿ ^c t i o ⁿ i n ^g ^o ^f t h ^e ^B ^o ^a r d ^a ⁿ ^d ^c ^o ⁿ t i n ^u i n ^g ^b ^e i n ^g

^a r e ^f ^e r e ⁿ ^c ^e i n t e r m ^s ^o ^f ^c ^o r p ^o r a t e ^g ^o ^v ^e r n ^a ⁿ ^c ^e .

⁴ ) ^R ^e ^g ^a r d i n ^g r e ^m ^u ⁿ ^e r a t i o ⁿ :

• ^A ^p ^p r o ^v ^a ^l ^o ^f t h ^e i m ^p l e ^m ^e ⁿ t a t i o ⁿ ^o ^f ^a l o ⁿ ^g ï t e r m i n ^c ^e ⁿ t i ^v ^e ^p l a ⁿ ^f ^o ^r t h ^e ^d i r e ^c t o ^r ^s ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y
• ^A l s ^o ^w i t h r e ^s ^p ^e ^c ^t t o ^e ^x ^e ^c ^u t i v ^e ^s , t h ^e ^C ^o ^m ^m i t t e ^e ^a ⁿ ^a ^l ^y ^z ^e ^d t h ^e ^c ^o ^m ^p ^o ⁿ ^e ⁿ ^t ^s ^o ^f i t ^s r e ^m ^u ⁿ ^e r a t i o ⁿ ^p ^a ^c ^k ^a ^g ^e ^s , ^a ^s ^s ^e ^s ^s i n ^g t h ^e ^c ^o ⁿ ^v ^e ⁿ i e ⁿ ^c ^e ^o ^f ^b ^e i n ^g ^a ^d ^j ^u ^s t e ^d t o ^a ^d ^a ^p ^t t h ^e ^m t o ^m ^a r k ^e ^t ^c ^o ⁿ ^d i t i o ⁿ ^s , ^a ^g r e ^e i n ^g t o ^s ^u ^b ^m i t t o t h ^e ^B ^o ^a r d t h ^e ^p r o ^p ^o ^s ^a ^l t o ( ⁱ ) r e ^v i e ^w t h ^e ^f ⁱ ^x ^e ^d ^c ^o ^m ^p ^o ⁿ ^e ⁿ ^t ^s ^o ^f r e ^m ^u ⁿ ^e r a t i o ⁿ ^a ⁿ ^d ( i i ) ^c ^o ^m ^m ⁱ ^s ^s i o ⁿ ^a ⁿ i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^c ^o ⁿ ^s ^u l t a ⁿ ^t t o ^s t u ^d ^y t h ^e ^m ^a r k ^e ^t ^c ^o ⁿ ^d i t i o ⁿ ^s t h ^a ^t ^w ^o ^u l d ^c ^o r r e ^s ^p ^o ⁿ ^d t o t h ^e ^s ^p ^e ^c ⁱ ^f ⁱ ^c ^p r o ^f i l e ^s ^o ^f t h ^e t h r e ^e ^m ^a ⁿ ^a ^g ^e ^r ^s , ^w i t h t h ^e i d ^e ^a ^o ^f ^b ^e i n ^g ^a ^b l e t o ^a ^s ^s ^e ^s ^s t h ^e i r ^c ^o ⁿ ^c l u ^s i o ⁿ ^s ^a ⁿ ^d / ^o ^r r e ^c ^o ^m ^m ^e ⁿ ^d ^a t i o ⁿ ^s .
• I n r e l a t i o ⁿ t o i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^d i r e ^c t o r s , t h ^e ^A ^p ^p ^o i n t m ^e ⁿ t s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^a ^g r e ^e ^d t o ^c ^o ^m ^m ⁱ ^s ^s i o ⁿ ^a ^c ^o ^m ^p ^a r a t i ^v ^e ^e ^x ^e ^r ^c ⁱ ^s ^e ^o ^f t h ^e r e ^m ^u ⁿ ^e r a t i o ⁿ ^o ^f i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^d i r e ^c t o ^r ^s ^o ^f ^c ^o ^m ^p ^a r a ^b l e ^c ^o ^m ^p ^a ⁿ i e ^s t o ^a ^s ^s ^e ^s ^s t h ^e ^a ^d ^v ⁱ ^s ^a ^b i l i t ^y ^o ^f ^p r o ^p ^o ^s i n ^g t h ^e r e ^v ⁱ ^s i o ⁿ ^o ^f t h ^e i r r e ^m ^u ⁿ ^e r a t i o ⁿ . ^T ^h ⁱ ^s ^c ^o ^m ^p ^a r a t i ^v ^e ^a ⁿ ^a ^l ^y ^s ⁱ ^s ^h ^a ^s ^b ^e ^e ⁿ ^c ^a r r i e ^d ^o ^u ^t ^b ^y ^W i l l i ^s ^T ^o ^w ^e ^r ^s ^W ^a ^t ^s ^o ⁿ ^a ^f t e ^r ^h ^a ^v i n ^g ^m ^a ^d ^e ^a ^c ^o ⁿ t e ^s ^t ^b ^e t w ^e ^e ⁿ t h r e ^e ^d ⁱ f f ^e r e ⁿ ^t i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^f i r m ^s .
• T ^h ^e ^C ^o ^m ^m i t t e ^e r e ^v i e ^w ^e ^d ^a ⁿ ^d ^a ^p ^p r o ^v ^e ^d t h ^e ^A ⁿ ⁿ ^u ^a ^l ^R ^e ^p ^o r t ^o ⁿ ^D i r e ^c t o ^r ^s ' ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^c ^o r r e ^s ^p ^o ⁿ ^d i n ^g t o t h ^e ² ⁰ 1 8 ^f i n ^a ⁿ ^c i a ^l ^y ^e ^a ^r i n ^a ^c ^c ^o r d ^a ⁿ ^c ^e ^w i t h t h ^e ^p r o ^v ⁱ ^s i o ⁿ ^s ^o ^f ^a r t i ^c l e ⁵ ⁴ ¹ ^o ^f t h ^e ^C ^a ^p i t a ^l ^C ^o ^m ^p ^a ⁿ i e ^s ^L ^a ^w ^b ^y ^s ^e ⁿ ^d i n ^g i t t o t h ^e ^B ^o ^a r d ^f ^o ^r ^f i n ^a ^l ^a ^p ^p r o ^v ^a ^l ^a ⁿ ^d ^s ^u ^b ^s ^e ^q ^u ^e ⁿ ^t r e ^f ^e r r a ^l t o t h ^e ^G ^e ⁿ ^e r a ^l ^M ^e ^e t i n ^g ^o ^f ^S ^h ^a r e ^h ^o l d ^e ^r ^s
• ^F i n ^a l l y , t h ^e ^C ^o ^m ^m i t t e ^e r e ^v i e ^w ^e ^d t h ^e ^p r o ^p ^o ^s ^a ^l ^o ^f ^g l o ^b ^a ^l ^o b j ^e ^c t i ^v ^e ^s ^o ^f t h ^e ^d i r e ^c t o ^r ^s ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^f ^o ^r ² ⁰ 1 9 ^a ^s ^w ^e l l ^a ^s t h ^e ^d ^e ^g r e ^e ^o ^f ^c ^o ^m ^p l i a ⁿ ^c ^e ^w i t h t h ^o ^s ^e ^o ^f ² ⁰ 1 8 .
⁵ ) ^R ^e ^g ^a r d i n ^g ^C ^o r p ^o r a t e ^S ^o ^c i a ^l ^R ^e ^s ^p ^o ⁿ ^s ⁱ ^b i l i t ^y ^a ⁿ ^d ^S ^u ^s t a i n ^a ^b i l i t ^y :
• ^S ^u ^p ^e r v i s i o ⁿ ^o ^f t h ^e ^a ^s ^p ^e ^c t s ^o ^f ^c ^o r p ^o r a t e ^s ^o ^c i a ^l r e ^s ^p ^o ⁿ ^s ⁱ ^b i l i t ^y ( ^C ^S ^R ) ^a ⁿ ^d ^s ^u ^s t a i n ^a ^b i l i t ^y ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y . I n t h ⁱ ^s r e ^g ^a r d , ^a ^m ^o ⁿ ^g ^o t h ^e ^r ⁱ ^s ^s ^u ^e ^s , t h ^e ^a ^c t i o ⁿ ^s ^c ^a r r i e ^d ^o ^u ^t i n ² ⁰ 1 8 ^a ⁿ ^d ^c ^o ^m ^p l i a ⁿ ^c ^e ^w i t h t h ^e ^C ^S ^R ^p ^o l i ^c ^y ^w ^e r e r e ^v i e ^w ^e ^d , ^a ⁿ ^a ^c t i o ⁿ ^p l a ⁿ ^f ^o ^r ² ⁰ 1 9 ^w ^a ^s ^e ^s t a ^b l i ^s ^h ^e ^d ^a ⁿ ^d t h ^e ^C ^o ^m ^m i t t e ^e ^s t r e ^s ^s ^e ^d t h ^e i m ^p ^o r t a ⁿ ^c ^e ^o ^f ^c ^o ⁿ t i n ^u i n ^g t o ^m ^o ⁿ i t o ^r ^s ^u ^s t a i n ^a ^b i l i t ^y ^a ⁿ ^d ^s ^u ^s t a i n ^a ^b i l i t ^y ⁱ ^s ^s ^u ^e ^s . ^C ^S ^R ^s i n ^c ^e t h ^e ^y ^a r e ^b ^e ^c ^o ^m i n ^g i n ^c r e ^a ^s i n ^g ^l ^y r e l e ^v ^a ⁿ ^t i n t h ^e i n ^v ^e ^s t m ^e ⁿ ^t ^m ^a r k ^e t , ^a ^l ^s ^o ^p r o ^m ^o t i n ^g ^a ⁿ ^d ^p r o ^m ^o t i n ^g ^a ^c t i o ⁿ ^s ^a ⁿ ^d i m ^p r o ^v ^e ^m ^e ⁿ ^t ^s i n t h ⁱ ^s ^a r e ^a .
⁶ ) ^O t h ^e ^r ^a ^c t i o ⁿ ^s
• ^R ^e ^v i e ^w ^a ⁿ ^d ^p r o ^p ^o ^s ^a ^l ^o ^f ^m ^o ^d ⁱ ^f ⁱ ^c ^a t i o ⁿ ^o ^f t h ^e ^R ^e ^g ^u l a t i o ⁿ ^s ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s t o ^a ^d ^a ^p ^t i t t o ^T ^e ^c ^h ⁿ ⁱ ^c ^a ^l ^G ^u i d ^e 1 / 2 ⁰ 1 9 ^o ^f t h ^e ^C ^N ^M ^V , ^p r e ^p ^a r i n ^g ^a ⁿ ^d ^a ^l ^s ^o ^a ^g r e ^e i n ^g t o ^s ^u ^b ^m i t t o t h ^e ^B ^o ^a r d ^a ^p r o ^p ^o ^s ^a ^l ^f ^o ^r ^a ^R ^e ^g ^u l a t i o ⁿ ^o ^f t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^f ^o ^r ^f i n ^a ^l ^a ^p ^p r o ^v ^a l .
• ^A ^p ^p r o ^v ^a ^l ^o ^f t h ^e ^a ⁿ ⁿ ^u ^a ^l ^p l a ⁿ ^o ^f ^a ^c t i v i t i e ^s ^o ^f t h ^e ^C ^o ^m ^m i t t e ^e ^f ^o ^r ² ⁰ ² ⁰ .

^C ^O ^M ^M ^I ^T ^T ^E ^E

N a e m	o s i t i o n P	l a s s o f C d i r e c t o r

o f e x e c u t i v e d i r e c t o r s %
-------------------------------------------------	--

o f p r o p r i e t a r y d i r e c t o r s %
o f i n d e p e n d e n t d i r e c t o r s %
o f o t h e r e x t e r n a l d i r e c t o r s %

^C . 2 . 2 ^F i l l ^o ^u ^t t h ^e f o l l o ^w i n ^g t a ^b l e i n ^d i c ^a t i n ^g t h ^e ⁿ ^u ^m ^b ^e ^r ^o ^f f e ^m ^a l e ^d i r ^e ^c ^t ^o ^r ^s ^r ^e ^p ^r ^e ^s ^e ⁿ t e ^d ^o ⁿ t h ^e ^b ^o ^a ^r ^d ^c ^o ^m ^m i t t e ^e ^s ^o ^v ^e ^r t h ^e l a ^s ^t f o ^u ^r ^y ^e ^a ^r ^s :

	f e a l e d i r e c t o r s N u e r o f m b m
	2 0 1 9 N u e r m b %	2 0 1 8 N u e r m b %	2 0 1 7 N u e r m b %	2 0 1 6 N u e r m b %
x e c u t i v e i t t e e c o E m m	N A	N A	N A	N A
u d i t c o i t t e e A m m	2 – 6 7 %	2 – 6 7 %	1 ï 3 3 %	0
p p o i n t e n t s a n d A m
u n e r a t i o n i t t e e r e c o m m m	0	0	0	0
i n a t i o n i t t e e N o c o m m m	N A	N A	N A	N A
u n e r a t i o n i t t e e e c o R m m m	N A	N A	N A	N A
i t t e e c o m m	N A	N A	N A	N A

^C . 2 . 3 ^S ^e ^c t i o ⁿ ^r ^e ^p ^e ^a l e ^d

^C . 2 . 4 ^S ^e ^c t i o ⁿ ^r ^e ^p ^e ^a l e ^d

^C . 2 . 5 ^I ⁿ ^d i c ^a t e , ^a ^s ^a ^p ^p ^r ^o ^p ^r i a t e , ^w ^h ^e t h ^e ^r t h ^e ^r ^e ^a ^r ^e ^a ⁿ ^y ^r ^e ^g ^u l a t i o ⁿ ^s ^g ^o ^v ^e ^r ⁿ i n ^g t h ^e ^b ^o ^a ^r ^d ^c ^o ^m ^m i t t e ^e ^s , ^w ^h ^e ^r ^e t h ^e ^y ^a ^r ^e ^a ^v ^a i l a ^b l e f o ^r ^c ^o ⁿ ^s ^u l t a t i o ⁿ ^a ⁿ ^d ^a ⁿ ^y ^a ^m ^e ⁿ ^d ^m ^e ⁿ t s t o t h ^e ^s ^a ^m ^e ^d ^u ^r i n ^g t h ^e f i n ^a ⁿ ^c i a ^l ^y ^e ^a ^r . ^S t a t e ^w ^h ^e t h ^e ^r ^a ⁿ ^y ^a ⁿ ⁿ ^u ^a ^l ^r ^e ^p ^o ^r ^t ^h ^a ^s ^b ^e ^e ⁿ ^d ^r ^a ^w ⁿ ^u ^p ^v ^o l u ⁿ t a ^r i l y ^o ⁿ t h ^e ^a ^c t i v i t i e ^s ^o ^f ^e ^a ^c ^h ^c ^o ^m ^m i t t e ^e .

^T ^h ^e ^R ^e ^g ^u l a t i o ⁿ ^s ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s r e ^g ^u l a t e t h ^e ^o ^p ^e r a t i o ⁿ ^o ^f t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ( ^A r t i ^c l e 1 5 ) ^a ⁿ ^d t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e ( ^A r t i ^c l e 1 4 ) . ^T ^h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e ^a ⁿ ^d t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^h ^a ^v ^e t h ^e i r ^o ^w ⁿ r e ^g ^u l a t i o ⁿ ^s ^o ^f ^o ^p ^e r a t i o ⁿ , ^a ^p ^p r o ^v ^e ^d ^o ⁿ ^D ^e ^c ^e ^m ^b ^e ^r ² ⁷ , ² ⁰ 1 7 ^a ⁿ ^d ^D ^e ^c ^e ^m ^b ^e ^r 1 2 , ² ⁰ 1 9 r e ^s ^p ^e ^c t i ^v ^e ^l ^y . ^A l l t h ^e ^s ^e r e ^g ^u l a t i o ⁿ ^s ^a r e ^a ^v ^a i l a ^b l e ^a ^t t h ^e ^f ^o l l o ^w i n ^g l i n ^k ^o ⁿ t h ^e ^c ^o r p ^o r a t e ^w ^e ^b ^s i t e :

^h t t p : / / l a r e ^s ^p ^a ⁿ ^a . ^c ^o ^m / ^g ^o ^b i e r n ^o ^ï ^c ^o r p ^o r a t i ^v ^o / n ^o r m ^a ^s ï i n t e r n ^a ^s ï d ^e ^ï ^g ^o ^b i e r n ^o /

I n ² ⁰ 1 8 , t h ^e r e ^m ^u ⁿ ^e r a t i o ⁿ ^p ^o l i c ^y ^w ^a ^s ^c ^o ^m ^p l e t e ^d ^w i t h ^a ^d ^o ^c ^u ^m ^e ⁿ ^t ^o ⁿ ' ' ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^P ^o l i c ^y f o ^r t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o r s ' , ^a ^v ^a i l a ^b l e ^a ^t t h ^e f o l l o ^w i n ^g l i n ^k ^o ⁿ t h ^e ^c ^o r p ^o r a t e ^w ^e ^b ^s i t e :

^h t t p : / / l a r e ^s ^p ^a ⁿ ^a . ^c ^o ^m / ^g ^o ^b i e r n ^o ^ï ^c ^o r p ^o r a t i ^v ^o / n ^o r m ^a ^s ï i n t e r n ^a ^s ï d ^e ^ï ^g ^o ^b i e r n ^o /

^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^e l a ^b ^o r a t e ^s ^a ⁿ ⁿ ^u ^a ^l r e ^p ^o r t ^s ^o ⁿ t h ^e ^c ^o ^m ^p ^o ^s i t i o ⁿ ^a ⁿ ^d ^a ^c t i ^v i t i e ^s ^o ^f t h ^e ^c ^o ^m ^m i t t e ^e ^s ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^a ⁿ ^d ^m ^a ^k ^e ^s t h ^e ^m ^a ^v ^a i l a ^b l e t o ^s ^h ^a r e ^h ^o l d ^e ^r ^s ^o ⁿ t h ^e ^o ^c ^c ^a ^s i o ⁿ ^o ^f t h ^e ^O r d i n ^a ^r ^y ^G ^e ⁿ ^e r a ^l ^M ^e ^e t i n ^g .

^C . 2 . 6 ^S ^e ^c t i o ⁿ ^r ^e ^p ^e ^a l e ^d

R^E ^L ^A ^T ^E ^D ^P ^A ^R ^T ^Y ^A ^N ^D ^I ^N ^T ^R ^A ^Y ^G ^R ^O ^U ^P ^T ^R ^A ^N ^S ^A ^C ^T ^I ^O ^N ^S

D . 1 . ^O ^u t l i n ^e t h ^e ^p ^r ^o ^c ^e ^d ^u ^r ^e , i f ^a ⁿ ^y , i n ^p l a ^c ^e f o ^r ^a ^p ^p ^r ^o ^v i n ^g ^r ^e l a t e ^d Æ p ^a ^r t y ^a ⁿ ^d i n t r ^a Æ g ^r ^o ^u ^p t r ^a ⁿ ^s ^a ^c t i o ⁿ ^s .

^T ^h ^e ^B ^o ^a r d ' s ^c ^o ^m ^p ^e t e ⁿ ^c ^e ^s i n ^c l u ^d ^e ^a ^p ^p r o ^v i n ^g , ^s ^u b j ^e ^c ^t t o ^a ^p r i o ^r r e ^p ^o r t ^b ^y t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e , r e l a t e ^d ï p ^a r t ^y t r a ⁿ ^s ^a ^c t i o ⁿ ^s , ^a ^s ^d ^e ^f i n ^e ^d ^u ⁿ ^d ^e ^r ^p r e ^v ^a i l i n ^g ^a ^p ^p l i ^c ^a ^b l e l e ^g ⁱ ^s l a t i o ⁿ ( ^a r t i ^c l e ⁵ . 4 . o ^o ^f t h ^e ^B ^o ^a r d ^R ^e ^g ^u l a t i o ⁿ ^s ) .

^T ^h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e ' s ^d ^u t i e ^s i n ^c l u ^d ^e r e ^p ^o r t i n ^g t o t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^b ^e ^f ^o r e t h ^e l a t t e ^r t a ^k ^e ^s t h ^e ^c ^o r r e ^s ^p ^o ⁿ ^d i n ^g ^d ^e ^c ⁱ ^s i o ⁿ ^s r e ^g ^a r d i n ^g r e l a t e ^d ï p ^a r t ^y t r a ⁿ ^s ^a ^c t i o ⁿ ^s , ^a ^s ^d ^e ^f i n ^e ^d ^u ⁿ ^d ^e ^r ^p r e ^v ^a i l i n ^g ^a ^p ^p l i ^c ^a ^b l e l e ^g ⁱ ^s l a t i o ⁿ ( ^a r t i ^c l e 1 4 . 3 . d . i i i ^o ^f t h ^e ^B ^o ^a r d ^R ^e ^g ^u l a t i o ⁿ ^s ) .

^H ^o ^w ^e ^v ^e r , ^B ^o ^a r d ^a ^u t h ^o r i ^s ^a t i o ⁿ ^s ^h ^a l l ⁿ ^o ^t ^b ^e r e ^q ^u i r e ^d ^f ^o ^r r e l a t e ^d ï p ^a r t ^y t r a ⁿ ^s ^a ^c t i o ⁿ ^s t h ^a ^t ^s i m ^u l t a ⁿ ^e ^o ^u ^s ^l ^y ^m ^e ^e ^t t h ^e ^f ^o l l o ^w i n ^g t h r e ^e ^c ^o ⁿ ^d i t i o ⁿ ^s : ( ⁱ ) t h ^e ^y ^a r e ^g ^o ^v ^e r n ^e ^d ^b ^y ^s t a ⁿ ^d ^a r d ^ï ^f ^o r m ^a ^g r e ^e ^m ^e ⁿ ^t ^s ^a ^p ^p l i e ^d ^o ⁿ ^a ⁿ ^a ^c r o ^s ^s ï t h ^e ^ï ^b ^o ^a r d ^b ^a ^s ⁱ ^s t o ^a l a ^r ^g ^e ⁿ ^u ^m ^b ^e ^r ^o ^f ^c ^u ^s t o ^m ^e ^r ^s ; ( i i ) t h ^e ^y ^g ^o t h r o ^u ^g ^h ^a ^t ^m ^a r k ^e ^t r a t e ^s , ^g ^e ⁿ ^e r a l l ^y ^s ^e ^t ^b ^y t h ^e ^p ^e ^r ^s ^o ⁿ ^s ^u ^p ^p ^l ^y i n ^g t h ^e ^g ^o ^o ^d ^s ^o ^r ^s ^e ^r ^v ⁱ ^c ^e ^s ; ^a ⁿ ^d ( i i i ) t h ^e i r ^a ^m ^o ^u ⁿ ^t ⁱ ^s ⁿ ^o ^m ^o r e t h ^a ⁿ 1 % ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y ' s ^a ⁿ ⁿ ^u ^a ^l r e ^v ^e ⁿ ^u ^e ^s ( ^a r t i ^c l e ³ ⁷ . 3 ^o ^f t h ^e ^B ^o ^a r d ^R ^e ^g ^u l a t i o ⁿ ^s ) .

^T ^h ^e I n ^v ^e ^s t m ^e ⁿ ^t ^M ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^A ^g r e ^e ^m ^e ⁿ ^t i n ^f ^o ^r ^c ^e ^b ^e t w ^e ^e ⁿ ^G r u ^p ^o ^L ^a ^r I n ^v ^e ^r ^s i o ⁿ ^e ^s I n ^m ^o ^b i l i a r i a ^s , ^S . A . ^a ^s ^M ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^C ^o ^m ^p ^a ⁿ ^y ^a ⁿ ^d ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^R ^e ^a ^l ^E ^s t a t e ^S ^O ^C I M I , ^S . A . ^a ^s t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^M ^a ⁿ ^a ^g ^e ^d , ^e ⁿ t e r e ^d i n t o ^o ⁿ 1 2 ^F ^e ^b r u ^a ^r ^y ² ⁰ 1 4 , ^a ⁿ ^d i t ^s r e ⁿ ^e ^w ^a ^l ^a ⁿ ^d ^m ^o ^d ⁱ ^f ⁱ ^c ^a t i o ⁿ ^c ^a r r i e ^d ^o ^u ^t ^o ⁿ ^J ^a ⁿ ^u ^a ^r ^y 1 9 , ² ⁰ 1 8 , ^a ⁿ ^d ^m ^a ^k ^e ^d ^e f f ^e ^c t i ^v ^e ^J ^a ⁿ ^u ^a ^r ^y 1 , ² ⁰ 1 8 , ^s ^p ^e ^c ⁱ ^f i e ^s t h ^a t , ^w i t h ^o ^u ^t ^p r e ^j ^u ^d ⁱ ^c ^e t o t h ^e ^p r e r o ^g ^a t i ^v ^e ^s ^a ⁿ ^d ^c ^o ^m ^p ^e t e ⁿ ^c ^e ^s t h ^a ^t t h ^e ^M ^a ⁿ ^a ^g ^e ^r ^h ^a ^s t o ^a ^c ^t ^o ⁿ ^b ^e ^h ^a ^l ^f ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y i n t h ^e ^f r a ^m ^e ^w ^o r k ^o ^f ^s ^a i d ^c ^o ⁿ t r a ^c t , ^w i l l r e ^q ^u i r e ^p r i o ^r ^e ^x ^p r e ^s ^s ^a ^p ^p r o ^v ^a ^l i n ^w r i t i n ^g ^b ^y t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^o ^f ^L ^a ^r ^E ^s ^p ^a ^ñ ^a , ^a ^m ^o ⁿ ^g ^o t h ^e ^r ^s , " t r ^a n s ^a ^c t i o n s ^a ⁿ ^d ^s i t u ^a t i o n s ^w i t h ^r ^e l a t e ^d ^p ^a ^r t i e s t h ^a ^t ^m a y ^g i v ^e ^r i s ^e t o ^a ^c ^o n f l i c ^t o f i n t e ^r e s ^t ^s i t u ^a t i o ⁿ i n ^r ^e l a t i o ⁿ t o t h ^e ^M ^a ⁿ a g ^e ^r ^a ⁿ ^d t h ^e ^M ^a ⁿ a g ^e ^m ^e ⁿ ^t T ^e ^a ^m , i n ^c l u ^d i n g ^a n y t r ^a n s ^a ^c t i o ⁿ ^w i t h t h i r ^d ^p ^a ^r t i e s ^u ⁿ ^d ^e ^r ^w ^h i c ^h t h ^e ^M ^a ⁿ a g ^e ^r i s ^e ⁿ t i t l e ^d t o ^r ^e ^c ^e i v ^e ^a n y ^c ^o ^m ^p ^e n s ^a t i o ⁿ , ^c ^o ^m ^m i s ^s i o ⁿ ^o ^r ^r ^e t r ⁱ ^b ^u t i o ⁿ " ( ^c l a ^u ^s ^e ⁵ ( ⁱ ^x ) )

D . 2 . ^L i s ^t ^a ⁿ ^y t r ^a ⁿ ^s ^a ^c t i o ⁿ ^s ^c ^o ⁿ ^s i d ^e ^r ^e ^d ^s i g ⁿ i f i c ^a ⁿ ^t ^b ^y ^v i r t u ^e ^o ^f t h ^e i r ^a ^m ^o ^u ⁿ ^t ^o ^r ^s ^u ^b ^s t a ⁿ ^c ^e ^b ^e t w ^e ^e ⁿ t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^o ^r i t s ^g ^r ^o ^u ^p ^c ^o ^m ^p ^a ⁿ i e ^s ^a ⁿ ^d t h ^e ^c ^o ^m ^p ^a ⁿ ^y ' s ^s i g ⁿ i f i c ^a ⁿ ^t ^s ^h ^a ^r ^e ^h ^o l d ^e ^r ^s :

N a e o r c o p a n y n a e o f m m m s i g n i f i c a n t s h a r e h o l d e r	N a e o r c o p a n y m m t h e n a e o f c o p a n y m m i t s o r g r o u p c o p a n y m	a t u r e t h e N o f r e l a t i o n s h i p	a t u r e t h e N o f t r a n s a c t i o n	o u n t A m ( t h o u s a n d s o f e u r o s )
r u p o I n v e r s i o n e s G L a r I n m o b i l i a r i a s S . A	r u p o I n v e r s i o n e s G L a r I n m o b i l i a r i a s S . A	o n t r a c t C	M a n a g e m e n t c o n t r a c t	9 , 8 7 7
r u p o I n v e r s i o n e s G L a r I n m o b i l i a r i a s S . A	e n t a l i a 2 0 0 6 , S . L G	o n t r a c t C	M a n a g e m e n t c o n t r a c t	3 , 5 4 4

D . 3 . ^L i s ^t t r ^a ⁿ ^s ^a ^c t i o ⁿ ^s ^c ^o ⁿ ^s i d ^e ^r ^e ^d ^s i g ⁿ i f i c ^a ⁿ ^t ^b ^y ^v i r t u ^e ^o ^f t h ^e i r ^a ^m ^o ^u ⁿ ^t ^o ^r ^s ^u ^b ^s t a ⁿ ^c ^e ^b ^e t w ^e ^e ⁿ t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^o ^r i t s ^g ^r ^o ^u ^p ^c ^o ^m ^p ^a ⁿ i e ^s ^a ⁿ ^d t h ^e ^c ^o ^m ^p ^a ⁿ ^y ' s ^d i r ^e ^c t o ^r ^s ^a ⁿ ^d / ^o ^r ^o f f i c ^e ^r ^s :

t h e N a e o r c o p a n y n a e o f m m m d i r e c t o r s o f f i c e r s a n d / o r	N a e o r c o p a n y m m t h e r e l a t e d n a e o f m p a r t y	e l a t i o n s h i p R	a t u r e t h e N o f t r a n s a c t i o n	o u n t A m ( t h o u s a n d s o f e u r o s )

D . 4 . ^R ^e ^p ^o ^r ^t ^a ⁿ ^y ^s i g ⁿ i f i c ^a ⁿ ^t t r ^a ⁿ ^s ^a ^c t i o ⁿ ^s ^u ⁿ ^d ^e ^r t a ^k ^e ⁿ ^b ^y t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^w i t h ^o t h ^e ^r ^c ^o ^m ^p ^a ⁿ i e ^s i n i t s ^g ^r ^o ^u ^p t h ^a ^t ^a ^r ^e ⁿ ^o ^t ^e l i ^m i n ^a t e ^d i n t h ^e ^p ^r ^o ^c ^e ^s ^s ^o ^f ^d ^r ^a ^w i n ^g ^u ^p t h ^e ^c ^o ⁿ ^s ^o l i d ^a t e ^d f i n ^a ⁿ ^c i a ^l ^s t a t e ^m ^e ⁿ t s ^a ⁿ ^d ^w ^h ^o ^s ^e ^p ^u ^r ^p ^o ^s ^e ^o ^r t e ^r ^m ^s f a l l ^o ^u t s i d ^e t h ^e ^c ^o ^m ^p ^a ⁿ ^y ' s ^o ^r ^d i n ^a ^r ^y ^c ^o ^u ^r ^s ^e ^o ^f ^b ^u ^s i n ^e ^s ^s :

^R ^e ^g ^a ^r ^d l e ^s ^s ^o ^f t h ^e i r ^m ^a t e ^r i a l i t y , ^r ^e ^p ^o ^r ^t ^a ⁿ ^y i n t r ^a ^g ^r ^o ^u ^p t r ^a ⁿ ^s ^a ^c t i o ⁿ ^s ^p ^e ^r f o ^r ^m ^e ^d ^w i t h ^e ⁿ t i t i e ^s ^d ^o ^m i c i l e ^d i n ^c ^o ^u ⁿ t r i e ^s ^o ^r t e ^r ^r i t o ^r i e ^s ^c ^o ⁿ ^s i d ^e ^r ^e ^d t a ^x ^h ^a ^v ^e ⁿ ^s :

t h e N a e o f g r o u p c o p a n y m m	r i e f d e s c r i p t i o n t h e o f t r a n s a c t i o n B	o u n t A m ( t h o u s a n d s o f e u r o s )

D . 5 . ^I ⁿ ^d i c ^a t e t h ^e ^a ^m ^o ^u ⁿ t s ^o ^f ^r ^e l a t e ^d Æ p ^a ^r t y t r ^a ⁿ ^s ^a ^c t i o ⁿ ^s ^c ^a ^r ^r i e ^d ^o ^u t .

D . 6 . ^L i s ^t t h ^e ^m ^e ^c ^h ^a ⁿ i s ^m ^s ^e ^s t a ^b l i s ^h ^e ^d t o ^d ^e t e ^c t , ^a ⁿ ^a l y ^s ^e ^a ⁿ ^d ^r ^e ^s ^o l v ^e ^a ⁿ ^y ^p ^o ^s ^s ⁱ ^b l e ^c ^o ⁿ f l i c t s ^o ^f i n t e ^r ^e ^s ^t ^b ^e t w ^e ^e ⁿ t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^a ⁿ ^d / ^o ^r i t s ^g ^r ^o ^u ^p , ^a ⁿ ^d i t s ^d i r ^e ^c t o ^r ^s , ^o f f i c ^e ^r ^s ^o ^r ^s i g ⁿ i f i c ^a ⁿ ^t ^s ^h ^a ^r ^e ^h ^o l d ^e ^r ^s .

^A r t i ^c l e ³ ¹ ^o ^f t h ^e ^B ^o ^a r d ^R ^e ^g ^u l a t i o ⁿ ^s

^A ^c ^o ⁿ ^f l i ^c ^t ^o ^f i n t e r e ^s ^t ⁱ ^s ^d ^e ^e ^m ^e ^d t o ^e ^x ⁱ ^s ^t i n ^s i t u ^a t i o ⁿ ^s i n ^w ^h ⁱ ^c ^h t h ^e i n t e r e ^s ^t ^s ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^o ^r i t ^s ^g r o ^u ^p ^c ^o ^m ^p ^a ⁿ i e ^s ^a ⁿ ^d t h ^e ^p ^e ^r ^s ^o ⁿ ^a ^l i n t e r e ^s ^t ^s ^o ^f t h ^e ^d i r e ^c t o ^r ^c l a ^s ^h , ^d i r e ^c t l ^y ^o ^r i n ^d i r e ^c t l ^y . ^T ^h ^e ^d i r e ^c t o ^r ^s ^h ^a l l ^b ^e ^d ^e ^e ^m ^e ^d t o ^h ^a ^v ^e ^a ^p ^e ^r ^s ^o ⁿ ^a ^l i n t e r e ^s ^t i n ^a ^m ^a t t e ^r ^w ^h ^e ⁿ t h ^a ^t ^m ^a t t e ^r ^a f f ^e ^c ^t ^s ^h i m ^o ^r ^a ^p ^e ^r ^s ^o ⁿ r e l a t e ^d t o ^h i m ^o r , i n t h ^e ^c ^a ^s ^e ^o ^f ^a ^p r o ^p r i e t a ^r ^y ^d i r e ^c t o r , t h ^e ^s ^h ^a r e ^h ^o l d ^e ^r ( ^s ) t h ^a ^t ^p r o ^p ^o ^s ^e ^d ^h ⁱ ^s ^a ^p ^p ^o i n t m ^e ⁿ ^t ^o ^r ^p ^e ^r ^s ^o ⁿ ^s r e l a t e ^d ^d i r e ^c t l ^y ^o ^r i n ^d i r e ^c t l ^y t o t h ^e ^m .

^F ^o ^r ^B ^o ^a r d r e ^g ^u l a t i o ⁿ ^p ^u r p ^o ^s ^e ^s , t h ^e ^f ^o l l o ^w i n ^g ^d ^e ^f i n i t i o ⁿ ^s ^a ^p ^p ^l ^y :

a . ^P ^e ^r ^s ^o ⁿ ^s r e l a t e ^d t o ⁿ ^a t u r a ^l ^p ^e ^r ^s ^o ⁿ ^d i r e ^c t o ^r ^s :
- ⁱ . ^T ^h ^e i r ^s ^p ^o ^u ^s ^e ^s ^o ^r ^s ⁱ ^g ⁿ ⁱ ^f ⁱ ^c ^a ⁿ ^t ^o t h ^e ^r ^s .

i i . ^T ^h ^e ^a ⁿ ^c ^e ^s t o ^r ^s , ^d ^e ^s ^c ^e ⁿ ^d ^a ⁿ ^t ^s ^a ⁿ ^d ^s ⁱ ^b l i n ^g ^s ^o ^f t h ^e ^d i r e ^c t o ^r ^a ⁿ ^d ^o ^f t h ^e ^s ^p ^o ^u ^s ^e ( ^o ^r ^s ⁱ ^g ⁿ ⁱ ^f ⁱ ^c ^a ⁿ ^t ^o t h ^e ^r ) ^o ^f t h ^e ^d i r e ^c t o r .

i i i . ^T ^h ^e ^s ^p ^o ^u ^s ^e ^s ^o ^f t h ^e ^a ⁿ ^c ^e ^s t o ^r ^s , ^d ^e ^s ^c ^e ⁿ ^d ^a ⁿ ^t ^s ^a ⁿ ^d ^s ⁱ ^b l i n ^g ^s ^o ^f t h ^e ^d i r e ^c t o r .

i v . ^T ^h ^e ^c ^o ^m ^p ^a ⁿ i e ^s ^o ^r ^e ⁿ t i t i e ^s ^a ^t ^w ^h ⁱ ^c ^h t h ^e ^d i r e ^c t o ^r ^o ^r ^a ⁿ ^y ^o ^f ^h ⁱ ^s r e l a t e ^d ^p ^a r t i e ^s , ^d i r e ^c t l ^y ^o ^r t h r o ^u ^g ^h ^a r e ^p r e ^s ^e ⁿ t a t i ^v ^e , ^f ^u ^l ^f i l ^s ^a ⁿ ^y ^o ^f t h ^e ^c i r ^c ^u ^m ^s t a ⁿ ^c ^e ^s ^c ^o ⁿ t e ^m ^p l a t e ^d i n ^a r t i ^c l e ⁴ ² ^o ^f ^S ^p ^a i n ' s ^C ^o ^d ^e ^o ^f ^C ^o ^m ^m ^e ^r ^c ^e .

^v . ^T ^h ^e ^c ^o ^m ^p ^a ⁿ i e ^s ^o ^r ^e ⁿ t i t i e ^s ^a ^t ^w ^h ⁱ ^c ^h t h ^e ^d i r e ^c t o ^r ^o ^r ^a ⁿ ^y ^o ^f ^h ⁱ ^s r e l a t e ^d ^p ^a r t i e ^s , ^d i r e ^c t l ^y ^o ^r t h r o ^u ^g ^h ^a r e ^p r e ^s ^e ⁿ t a t i ^v ^e , ^h ^o l d ^s ^a ^d i r e ^c t o ^r ^s ^h i p ^o ^r ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^p ^o ^s i t i o ⁿ ^o ^r ^f r o ^m ^w ^h ⁱ ^c ^h ^h ^e r e ^c ^e ⁱ ^v ^e ^s ^a ⁿ ^y ^c ^o ^m ^p ^e ⁿ ^s ^a t i o ⁿ ^f ^o ^r ^a ⁿ ^y r e ^a ^s ^o ⁿ .

^v ⁱ . I n t h ^e ^c ^a ^s ^e ^o ^f ^p r o ^p r i e t a ^r ^y ^d i r e ^c t o ^r ^s , ^a ^d ^d i t i o ⁿ ^a l l ^y , t h ^e ^s ^h ^a r e ^h ^o l d ^e ^r ^s ^a ^p ^p ^o i n t i n ^g ^h i m ^a ^s t h ^e i r r e ^p r e ^s ^e ⁿ t a t i ^v ^e .

b . ^P ^e ^r ^s ^o ⁿ ^s r e l a t e ^d t o l e ^g ^a ^l ^p ^e ^r ^s ^o ⁿ ^d i r e ^c t o ^r ^s :

ⁱ . ^T ^h ^e ^s ^h ^a r e ^h ^o l d ^e ^r ^s ^o ^f t h ^e ^s ^e l e ^g ^a ^l ^e ⁿ t i t i e ^s t h ^a ^t ^f ^u ^l ^f i l ^a ⁿ ^y ^o ^f t h ^e ^c i r ^c ^u ^m ^s t a ⁿ ^c ^e ^s ^c ^o ⁿ t e ^m ^p l a t e ^d i n ^a r t i ^c l e ⁴ ² ^o ^f ^S ^p ^a i n ' s ^C ^o ^d ^e ^o ^f ^C ^o ^m ^m ^e ^r ^c ^e .

i i . ^T ^h ^e ^c ^o ^m ^p ^a ⁿ i e ^s i n t h ^e ^s ^a ^m ^e ^g r o ^u ^p , ^a ^s ^g r o ^u ^p ⁱ ^s ^d ^e ^f i n ^e ^d i n ^a r t i ^c l e ⁴ ² ^o ^f ^o ^f ^S ^p ^a i n ' s ^C ^o ^d ^e ^o ^f ^C ^o ^m ^m ^e ^r ^c ^e , ^a ⁿ ^d t h ^e i r ^o ^w ⁿ ^e ^r ^s .

i i i . T ^h ^e ^s ^e l e ^g ^a ^l ^e ⁿ t i t i e ^s ' ⁿ ^a t u r a ^l ^p ^e r s ^o ⁿ r e ^p r e ^s ^e ⁿ t a t i v ^e ^s , ^d i r e ^c t o r s , ^d ^e f a ^c t o ^o ^r ^b ^y l a ^w , l i ^q ^u i d ^a t o ^r ^s ^a ⁿ ^d l e ^g ^a ^l r e ^p r e ^s ^e ⁿ t a t i ^v ^e ^s ^w i t h ^g ^e ⁿ ^e r a ^l ^p ^o ^w ^e ^r ^o ^f ^a t t o r n ^e ^y .

i v . ^T ^h ^e ^p ^e ^r ^s ^o ⁿ ^s ^w ^h ^o ^a r e ^c ^o ⁿ ^s i d ^e r e ^d r e l a t e ^d ^p ^a r t i e ^s ^o ^f t h ^e r e ^p r e ^s ^e ⁿ t a t i ^v ^e ^o ^f t h ^e l e ^g ^a ^l ^p ^e ^r ^s ^o ⁿ ^d i r e ^c t o ^r i n ^k ^e ^e ^p i n ^g ^w i t h t h ^e ^a ^b ^o ^v ^e ^p r o ^v ⁱ ^s i o ⁿ ^s ^w i t h r e ^s ^p ^e ^c ^t t o ⁿ ^a t u r a ^l ^p ^e ^r ^s ^o ⁿ ^d i r e ^c t o ^r ^s .

^D i r e ^c t o ^r ^s ^a r e ^o ^b l i ^g ^e ^d t o r e ^p ^o r t t h ^e ^e ^x ⁱ ^s t e ⁿ ^c ^e ^o ^f ^c ^o ⁿ ^f l i ^c ^t ^s ^o ^f i n t e r e ^s ^t t o t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^a ⁿ ^d ^a ^b ^s t a i n ^f r o ^m i n t e ^r ^v ^e ⁿ i n ^g ^a ^s ^C ^o ^m ^p ^a ⁿ ^y r e ^p r e ^s ^e ⁿ t a t i ^v ^e i n t h ^e t r a ⁿ ^s ^a ^c t i o ⁿ ^u ⁿ ^d ^e r l ^y i n ^g t h ^e ^c ^o ⁿ ^f l i ^c ^t i n ^q ^u ^e ^s t i o ⁿ , ^e ^x ^c ^e ^p ^t ^a ^s ^c ^a ^r ^v ^e ^d ^o ^u ^t i n ^a ^p ^p l i ^c ^a ^b l e l e ^g ⁱ ^s l a t i o ⁿ .

I n t e r n ^a ^l ^S ^e ^c ^u r i t i e ^s ^M ^a r k ^e ^t ^s ^C ^o ^d ^e ^o ^f ^C ^o ⁿ ^d ^u ^c ^t

^A ^c ^o ⁿ ^f l i ^c ^t ^o ^f i n t e r e ^s ^t ⁱ ^s ^d ^e ^e ^m ^e ^d t o ^e ^x ⁱ ^s ^t ^w ^h ^e ⁿ t h ^e ^B ^o ^u ⁿ ^d ^P ^a r t i e ^s ^m ^e ^e ^t ^a ⁿ ^y ^o ^f t h ^e ^f ^o l l o ^w i n ^g ^c ^o ⁿ ^d i t i o ⁿ ^s i n r e l a t i o ⁿ t o t h ^e ^e ⁿ t i t i e ^s r e ^f ^e r r e ^d t o i n t h ⁱ ^s ^a r t i ^c l e :

¹ . ^S ^e ^r ^v ^e ^s ^a ^s ^a ^d i r e ^c t o ^r ^o ^r ^s ^e ⁿ i o ^r ^e ^x ^e ^c ^u t i ^v ^e .

² . ^O ^w ⁿ ^s ^a ^s ⁱ ^g ⁿ ⁱ ^f ⁱ ^c ^a ⁿ ^t i n t e r e ^s ^t ( ^u ⁿ ^d ^e ^r ^s t o ^o ^d i n t h ^e ^c ^a ^s ^e ^o ^f ^a ^c ^o ^m ^p ^a ⁿ ^y l i ^s t e ^d ^o ⁿ ^a ⁿ ^y ^o f f ⁱ ^c i a ^l ^S ^p ^a ⁿ ⁱ ^s ^h ^o ^r ^f ^o r e ⁱ ^g ⁿ ^s t o ^c ^k ^e ^x ^c ^h ^a ⁿ ^g ^e ^a ^s t h ^e ^s ^h ^a r e ^h ^o l d i n ^g ^s r e ^f ^e r r e ^d t o i n ^a r t i ^c l e ⁵ ³ ^o ^f t h ^e ^S ^p ^a ⁿ ⁱ ^s ^h ^S ^e ^c ^u r i t i e ^s ^M ^a r k ^e ^t ^s ^A ^c ^t ^a ⁿ ^d ^e ⁿ ^a ^c t i n ^g r e ^g ^u l a t i o ⁿ ^s , ^a ⁿ ^d i n t h ^e ^c ^a ^s ^e ^o ^f ^u ⁿ l i ^s t e ^d ^S ^p ^a ⁿ ⁱ ^s ^h ^o ^r ^f ^o r e ⁱ ^g ⁿ ^c ^o ^m ^p ^a ⁿ i e ^s , ^a ⁿ ^y ^d i r e ^c ^t ^o ^r i n ^d i r e ^c ^t ^s ^h ^a r e ^h ^o l d i n ^g ^o ^f ^o ^v ^e ^r t w ^e ⁿ ^t ^y ^p ^e ^r ^c ^e ⁿ ^t ^o ^f ⁱ ^s ^s ^u ^e ^d ^s ^h ^a r e ^c ^a ^p i t a ^l ) .

3 . ^H ^a ^s ^k i n ^s ^h i p ^w i t h i n t h ^e ^s ^e ^c ^o ⁿ ^d ^d ^e ^g r e ^e ^b ^y ^a f f i n i t ^y ^o ^r t h i r d ^d ^e ^g r e ^e ^o ^f ^c ^o ⁿ ^s ^a ⁿ ^g ^u i n i t ^y ^w i t h t h ^e ^C ^o ^m ^p ^a ⁿ ^y ' s ^d i r e ^c t o ^r ^s , ^o ^w ⁿ ^e ^r ^s ^o ^f ^s ⁱ ^g ⁿ ⁱ ^f ⁱ ^c ^a ⁿ ^t ^s ^h ^a r e ^h ^o l d i n ^g ^s ^o ^r ^s ^e ⁿ i o ^r ^e ^x ^e ^c ^u t i ^v ^e ^s .

⁴ . ^H ^a ^s ^s ⁱ ^g ⁿ ⁱ ^f ⁱ ^c ^a ⁿ ^t ^c ^o ⁿ t r a ^c t u ^a ^l r e l a t i o ⁿ ^s ^h i p ^s , ^d i r e ^c ^t ^o ^r i n ^d i r e ^c t .

^C ^o ⁿ ^f l i ^c t e ^d ^B ^o ^u ⁿ ^d ^P ^a r t i e ^s ^m ^u ^s ^t ^o ^b ^s ^e ^r ^v ^e t h ^e ^f ^o l l o ^w i n ^g ^g ^e ⁿ ^e r a ^l ^c ^o ^d ^e ^s ^o ^f ^c ^o ⁿ ^d ^u ^c ^t :

^I ⁿ ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^c ^e : ^B ^o ^u ⁿ ^d ^P ^a r t i e ^s ^m ^u ^s ^t ^a ^c ^t i n ^g ^o ^o ^d ^f ^a i t h i n ^w ^h ^a ^t t h ^e ^y ^c ^o ⁿ ^s i d ^e ^r t o ^b ^e t h ^e i n t e r e ^s ^t ^s ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^a ⁿ ^d i t ^s ^s ^h ^a r e ^h ^o l d ^e ^r ^s , i r r e ^s ^p ^e ^c t i ^v ^e ^o ^f t h ^e i r ^o ^w ⁿ ^o ^r ^o t h ^e ^r i n t e r e ^s ^t ^s . ^A ^c ^c ^o r d i n ^g ^l ^y t h ^e ^y ^m ^u ^s ^t r e ^f r a i n ^f r o ^m ^p l a ^c i n ^g t h ^e i r ^o ^w ⁿ i n t e r e ^s ^t ^s ^o ^v ^e ^r t h ^o ^s ^e ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y , ^a ⁿ ^d ^f r o ^m ^p l a ^c i n ^g t h ^e i n t e r e ^s ^t ^s ^o ^f ^o ⁿ ^e ^s ^h ^a r e ^h ^o l d ^e ^r ^o ^v ^e ^r t h ^o ^s ^e ^o ^f ^o t h ^e ^r ^s .

^A ^b ^s t e ⁿ t i o ⁿ : ^B ^o ^u ⁿ ^d ^P ^a r t i e ^s ^m ^u ^s ^t ^a ^b ^s t a i n ^f r o ^m ^p ^a r t i ^c i p ^a t i n ^g i n ^o ^r i n ^f l u ^e ⁿ ^c i n ^g ^d ^e ^c ⁱ ^s i o ⁿ ^s t h ^a ^t ^m ^a ^y ^a f f ^e ^c ^t ^c ^o ⁿ ^f l i ^c t e ^d ^p ^e ^r ^s ^o ⁿ ^s ^o ^r ^e ⁿ t i t i e ^s ^a ⁿ ^d ^f r o ^m ^o ^b t a i n i n ^g ^c ^o ⁿ ^f i d ^e ⁿ t i a ^l i n ^f ^o r m ^a t i o ⁿ ^c ^o ⁿ ^c ^e r n i n ^g t h ^e ^c ^o ⁿ ^f l i ^c ^t i n ^q ^u ^e ^s t i o ⁿ .

^D i s ^c l o ^s ^u ^r ^e : ^B ^o ^u ⁿ ^d ^P ^a r t i e ^s ^m ^u ^s ^t ⁿ ^o t i f y t h ^e ^h ^e ^a ^d ^o ^f ^c ^o ^m ^p l i a ⁿ ^c ^e ^o ^f ^p ^o t e ⁿ t i a ^l ^c ^o ⁿ ^f l i ^c ^t ^s ^o ^f i n t e r e ^s ^t ^d ^e r i ^v i n ^g ^f r o ^m t h ^e i r ^a ^c t i ^v i t i e ^s ^o ^u ^t ^s i d ^e ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y , t h ^e i r ^f ^a ^m i l ^y r e l a t i o ⁿ ^s ^h i p ^s , t h ^e i r ^p ^e ^r ^s ^o ⁿ ^a ^l ^f i n ^a ⁿ ^c ^e ^s ^o ^r ^a r i ^s i n ^g ^o ⁿ ^a ⁿ ^y ^o t h ^e ^r ^g r o ^u ⁿ ^d ^s ^w i t h :

. ^T ^h ^e ^C ^o ^m ^p ^a ⁿ ^y ^o ^r ^a ⁿ ^y ^o ^f t h ^e ^c ^o ^m ^p ^a ⁿ i e ^s ^c ^o ^m ^p r i ^s i n ^g ^G r u ^p ^o ^L ^a ^r ^E ^s ^p ^a ^ñ ^a .

b . ^S ⁱ ^g ⁿ ⁱ ^f ⁱ ^c ^a ⁿ ^t ^s ^u ^p ^p l i e ^r ^s ^o ^r ^c ^u ^s t o ^m ^e ^r ^s ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^o ^r t h ^e ^c ^o ^m ^p ^a ⁿ i e ^s ^c ^o ^m ^p r i ^s i n ^g ^G r u ^p ^o ^L ^a ^r ^E ^s ^p ^a ^ñ ^a .

c . ^E ⁿ t i t i e ^s ^d ^e ^v ^o t e ^d t o t h ^e ^s ^a ^m ^e ^b ^u ^s i n ^e ^s ^s ^a ^s ^o ^r t h ^a ^t ^c ^o ^m ^p ^e t e ^w i t h t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^o ^r ^a ⁿ ^y ^o ^f i t ^s ^s ^u ^b ^s i d i a r i e ^s .

^A ⁿ ^y ^q ^u ^e ^s t i o ⁿ ^s r e ^g ^a r d i n ^g ^a ^p ^o t e ⁿ t i a ^l ^c ^o ⁿ ^f l i ^c ^t ^o ^f i n t e r e ^s ^t ^m ^u ^s ^t ^b ^e ^a ^d ^d r e ^s ^s ^e ^d t o t h ^e ^h ^e ^a ^d ^o ^f ^c ^o ^m ^p l i a ⁿ ^c ^e . ^T ^h ^e ^f i n ^a ^l ^d ^e ^c ⁱ ^s i o ⁿ ⁱ ^s ^u l t i m ^a t e ^l ^y t h ^e r e ^s ^p ^o ⁿ ^s ⁱ ^b i l i t ^y ^o ^f t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e .

^C ^o ^d ^e ^o ^f ^C ^o ⁿ ^d ^u ^c ^t

^A ^c ^o ⁿ ^f l i ^c ^t ^o ^f i n t e r e ^s ^t ⁱ ^s ^u ⁿ ^d ^e ^r ^s t o ^o ^d t o ^a r i ^s ^e ^w ^h ^e ⁿ ^e ^v ^e ^r ^a ⁿ ^y ^o ^f t h ^e ^B ^o ^u ⁿ ^d ^P ^a r t i e ^s ^w ^h ^o ^m ^u ^s ^t ^d ^e ^c i d ^e , ^p ^e ^r ^f ^o r m ^o ^r ^o ^m i t ^a ⁿ ^a ^c t i o ⁿ , i n t h ^e ^c ^o ^u ^r ^s ^e ^o ^f ^h ⁱ ^s ^o ^r ^h ^e ^r ^j ^o ^b ^d ^u t i e ^s , ^f ^a ^c ^e ^s t h ^e ^o ^p t i o ⁿ ^o ^f ^c ^h ^o ^o ^s i n ^g ^b ^e t w ^e ^e ⁿ t h ^e i n t e r e ^s ^t ^s ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^a ⁿ ^d ^h ⁱ ^s / h ^e ^r ^o ^w ⁿ i n t e r e ^s ^t ^s ^o ^r t h ^o ^s ^e ^o ^f ^a t h i r d ^p ^a r t ^y , ^s ^u ^c ^h t h ^a ^t ^c ^h ^o ^o ^s i n ^g t h ^o ^s ^e ^o ^f ^e i t h ^e ^r ^o ^f t h ^e l a t t e ^r t w ^o ^w ^o ^u l d ^b ^e ⁿ ^e ^f i t ^a t h i r d ^p ^a r t ^y , ^g ⁱ ^v i n ^g r i ^s ^e t o ^a ^g ^a i n t h ^a ^t ^w ^o ^u l d ^o t h ^e r w ⁱ ^s ^e ⁿ ^o ^t ^a ^c ^c r u ^e .

D . 7 . ^I ^s ^m ^o ^r ^e t h ^a ⁿ ^o ⁿ ^e ^g ^r ^o ^u ^p ^c ^o ^m ^p ^a ⁿ ^y l i s t e ^d i n ^S ^p ^a i n ?

^Y ^e ^s ^N ^o ^X

^I ^d ^e ⁿ t i f y t h ^e ^s ^u ^b ^s i d i a ^r i e ^s l i s t e ^d i n ^S ^p ^a i n :

^L i s t e ^d ^s ^u ^b ^s i d i a ^r i e ^s

^I ⁿ ^d i c ^a t e ^w ^h ^e t h ^e ^r t h ^e t y ^p ^e ^o ^f ^a ^c t i v i t y t h ^e ^y ^e ⁿ ^g ^a ^g ^e i n , ^a ⁿ ^d ^a ⁿ ^y ^b ^u ^s i n ^e ^s ^s ^d ^e ^a l i n ^g ^s ^b ^e t w ^e ^e ⁿ t h ^e ^m , ^a ^s ^w ^e l l ^a ^s ^b ^e t w ^e ^e ⁿ t h ^e ^s ^u ^b ^s i d i a ^r ^y ^a ⁿ ^d ^o t h ^e ^r ^g ^r ^o ^u ^p ^c ^o ^m ^p ^a ⁿ i e ^s , ^h ^a ^v ^e ^b ^e ^e ⁿ ^p ^u ^b l i c l y ^a ⁿ ^d ^a ^c ^c ^u ^r ^a t e l y ^d ^e f i n ^e ^d :

^Y ^e ^s ^N ^o

^D ^e f i n ^e ^a ⁿ ^y ^b ^u ^s i n ^e ^s ^s ^d ^e ^a l i n ^g ^s ^b ^e t w ^e ^e ⁿ t h ^e ^p ^a ^r ^e ⁿ ^t ^c ^o ^m ^p ^a ⁿ ^y ^a ⁿ ^d t h ^e l i s t e ^d ^s ^u ^b ^s i d i a ^r ^y , ^a ^s ^w ^e l l ^a ^s ^b ^e t w ^e ^e ⁿ t h ^e l i s t e ^d ^s ^u ^b ^s i d i a ^r ^y ^a ⁿ ^d ^o t h ^e ^r ^g ^r ^o ^u ^p ^c ^o ^m ^p ^a ⁿ i e ^s : E

E . 1 . ^E ^x ^p l a i n t h ^e ^s ^c ^o ^p ^e ^o ^f t h ^e ^c ^o ^m ^p ^a ⁿ ^y ' s ^r i s ^k ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^s ^y ^s t e ^m , i n ^c ^l ^u ^d i n ^g t h ^e f i s ^c ^a ^l ^r i s ^k ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^s ^y ^s t e ^m .

^T ^h ^e i n t e ^g r a t e ^d ^e ⁿ t e r p r i ^s ^e r i ^s ^k ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ( ^E ^R ^M ) ^s ^y ^s t e ^m ^o ^f ^d ^e ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^R ^e ^a ^l ^E ^s t a t e ^S ^O ^C I M I , ^S . A . ^a ⁿ ^d ^s ^u ^b ^s i d i a r i e ^s ( ^h ^e r e i n ^a ^f t e r , ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ) ^h ^a ^s ^b ^e ^e ⁿ i m ^p l e ^m ^e ⁿ t e ^d ^a ^t t h ^e ^c ^o r p ^o r a t e l e ^v ^e ^l ^a ⁿ ^d ⁱ ^s ^d ^e ^s ⁱ ^g ⁿ ^e ^d t o ^m i t i ^g ^a t e t h ^e r i ^s ^k ^s ( i n ^c l u ^d i n ^g ^f ⁱ ^s ^c ^a ^l r i ^s ^k ^s ) t o ^w ^h ⁱ ^c ^h t h ^e ^o ^r ^g ^a ⁿ ⁱ ^s ^a t i o ⁿ ⁱ ^s ^e ^x ^p ^o ^s ^e ^d ^o ⁿ ^a ^c ^c ^o ^u ⁿ ^t ^o ^f i t ^s ^b ^u ^s i n ^e ^s ^s ^a ^c t i ^v i t i e ^s .

^T ^h ⁱ ^s ^S ^y ^s t e ^m ^h ^a ^s ^b ^e ^e ⁿ ^d ^e ^s ^c r i ^b ^e ^d ^a ⁿ ^d ^d ^e ^v ^e l o ^p ^e ^d i n t h ^e ^R ⁱ ^s ^k ^C ^o ⁿ t r o ^l ^a ⁿ ^d ^M ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^P ^o l i ^c ^y ^a ^p ^p r o ^v ^e ^d ^b ^y t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^o ^f ^L ^a ^r ^E ^s ^p ^a ^ñ ^a , ^w ^h ⁱ ^c ^h ^e ^s t a ^b l i ^s ^h ^e ^s ^a ^m ^e t h ^o ^d ^o l o ^g ^y t o i d ^e ⁿ t i f y , ^e ^v ^a l u ^a t e , ^p r i o r i t i ^z ^e ^a ⁿ ^d ^m ^a ⁿ ^a ^g ^e r i ^s ^k ^s i n ^a ⁿ ^e f f ^e ^c t i ^v ^e ^w ^a ^y , t a ^k i n ^g i n t o ^a ^c ^c ^o ^u ⁿ ^t t h ^e ^c i r ^c ^u ^m ^s t a ⁿ ^c ^e ^s ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^a ⁿ ^d t h ^e ^e ^c ^o ⁿ ^o ^m ⁱ ^c ^a ⁿ ^d r e ^g ^u l a t o ^r ^y ^e ⁿ ^v i r o ⁿ ^m ^e ⁿ ^t ^w ^h ^e r e i t ^o ^p ^e r a t e ^s . ^T ^h ^e ^s ^y ^s t e ^m ' s ^o ^v ^e r r i d i n ^g ^g ^o ^a ^l ⁱ ^s t o ^g ^u ^a r a ⁿ t e ^e r e ^a ^s ^o ⁿ ^a ^b l e ^a ^s ^s ^u r a ⁿ ^c ^e t h ^a ^t t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^w i l l ^b ^e ^a ^b l e t o ^a ^c ^h i e ^v ^e i t ^s ^s t r a t e ^g ⁱ ^c , ^o ^p ^e r a t i n ^g , r e ^p ^o r t i n ^g ^a ⁿ ^d ^c ^o ^m ^p l i a ⁿ ^c ^e ^o b j ^e ^c t i ^v ^e ^s . ^T ^h ^e ^s ^y ^s t e ^m ⁱ ^s ^a l i ^g ⁿ ^e ^d ^w i t h t h ^e ^k ^e ^y ^g ^u i d ^e l i n ^e ^s ^e ^s t a ^b l i s ^h ^e ^d i n t h ^e " ^E ⁿ t e r p r i s ^e ^R i s ^k ^M ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^ï I n t e ^g r a t e ^d ^F r a ^m ^e ^w ^o r k . ^C ^o ^m ^m i t t e ^e ^o ^f ^S ^p ^o ⁿ ^s ^o r i n ^g ^O ^r ^g ^a ⁿ ⁱ ^z ^a t i o ⁿ ^s ^o ^f t h ^e ^T r e ^a ^d ^w ^a ^y ^C ^o ^m ^m ⁱ ^s ^s i o ⁿ ( C ^O ^S ^O ) " r e ^p ^o r t ( h ^e r e i n ^a f t e r , ^C ^O ^S ^O ) .

^A ^s ^s ^e ^t ^o ^u ^t i n i t ^s ^E ^R ^M ^s ^y ^s t e ^m , ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^v i e ^w ^s r i ^s ^k ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^a ^s ^a ^c ^o ⁿ t i n ^u ^o ^u ^s ^a ⁿ ^d ^d ^y ⁿ ^a ^m ⁱ ^c ^p r o ^c ^e ^s ^s ^w ^h ⁱ ^c ^h ^e ⁿ ^c ^o ^m ^p ^a ^s ^s ^e ^s t h ^e ^f ^o l l o ^w i n ^g ^s t e ^p ^s :

· I d ^e ⁿ t i ^f ⁱ ^c ^a t i o ⁿ ^a ⁿ ^d ^a ^s ^s ^e ^s ^s ^m ^e ⁿ ^t ^o ^f t h ^e r i ^s ^k ^s t h ^a ^t ^m ^a ^y ^a f f ^e ^c ^t t h ^e ^o ^r ^g ^a ⁿ ⁱ ^s ^a t i o ⁿ , ^e ^v ^a l u ^a t i n ^g t h ^e i r ^p r o ^b ^a ^b i l i t ^y ^o ^f ^o ^c ^c ^u r r e ⁿ ^c ^e ^a ⁿ ^d ^p ^o t e ⁿ t i a ^l i m ^p ^a ^c t .
· I d ^e ⁿ t i ^f ⁱ ^c ^a t i o ⁿ ^o ^f t h ^e ^c ^o ⁿ t r o ^l ^s i n ^p l a ^c ^e ^f ^o ^r ^m i t i ^g ^a t i n ^g t h ^e ^s ^e r i ^s ^k ^s .
· I d ^e ⁿ t i ^f ⁱ ^c ^a t i o ⁿ ^o ^f t h ^e ^p r o ^c ^e ^s ^s ^e ^s i n ^w ^h ⁱ ^c ^h t h ^e ^s ^e r i ^s ^k ^s ^a r e ^g ^e ⁿ ^e r a t e ^d ^a ⁿ ^d ^c ^o ⁿ t r o ^l ^s ^p ^e ^r ^f ^o r m ^e ^d , ^d ^e t e r m i n i n ^g t h ^e r e l a t i o ⁿ ^s ^h i p ^b ^e t w ^e ^e ⁿ t h ^e ^o ^r ^g ^a ⁿ ⁱ ^s ^a t i o ⁿ ' s ^k ^e ^y r i ^s ^k ^s ^a ⁿ ^d ^p r o ^c ^e ^s ^s ^e ^s .
· ^E ^v ^a l u ^a t i o ⁿ ^o ^f t h ^e ^e f f ^e ^c t i ^v ^e ⁿ ^e ^s ^s ^o ^f t h ^e ^c ^o ⁿ t r o ^l ^s i n ^p l a ^c ^e t o ^m i t i ^g ^a t e t h ^e ^s ^e r i ^s ^k ^s .
· ^D ^e ^s ⁱ ^g ⁿ ^o ^f ^a ^c t i o ⁿ ^p l a ⁿ ^s i n r e ^s ^p ^o ⁿ ^s ^e t o t h ^e r i ^s ^k ^s i d ^e ⁿ t i ^f i e ^d .
· ^R ⁱ ^s ^k ^m ^o ⁿ i t o r i n ^g ^a ⁿ ^d r e ^p ^o r t i n ^g .
· ^O ⁿ ^g ^o i n ^g ^e ^v ^a l u ^a t i o ⁿ ^o ^f t h ^e ^s ^u i t a ^b i l i t ^y ^a ⁿ ^d ^e f f ^e ^c t i ^v ^e ⁿ ^e ^s ^s ^o ^f t h ^e ^s ^y ^s t e ^m i n ^u ^s ^e ^a ⁿ ^d ^b ^e ⁿ ^c ^h ^m ^a r k i n ^g ^o ^f ^b ^e ^s ^t ^p r a ^c t i ^c ^e ^s ^a ⁿ ^d r e ^c ^o ^m ^m ^e ⁿ ^d ^a t i o ⁿ ^s i n r i ^s ^k ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ t .

^U l t i m ^a t e ^l ^y , ^h ^a ^v i n ^g i d ^e ⁿ t i ^f i e ^d t h ^e r i ^s ^k ^s ^a ⁿ ^d ^a ⁿ ^a ^l ^y ^s ^e ^d t h ^e ^s ^u i t a ^b i l i t ^y ^a ⁿ ^d ^e f f ^e ^c t i ^v ^e ⁿ ^e ^s ^s ^o ^f t h ^e ^d ^e ^c ⁱ ^s i o ⁿ ^s t a ^k ^e ⁿ t o ^m i t i ^g ^a t e t h ^e ^m , ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ t , ^u ⁿ ^d ^e ^r t h ^e ^s ^u ^p ^e ^r ^v ⁱ ^s i o ⁿ ^o ^f t h ^e i n t e r n ^a ^l ^a ^u ^d i t ^f ^u ⁿ ^c t i o ⁿ , ^e ^s t a ^b l i ^s ^h ^e ^s r i ^s ^k ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^p r i o r i t i e ^s ^a ⁿ ^d t h ^e ^m ^e ^a ^s ^u r e ^s t o ^b ^e i m ^p l e ^m ^e ⁿ t e ^d , ^e ⁿ ^s ^u r i n ^g t h ^a ^t t h ^e ^C ^o ^m ^p ^a ⁿ ^y ' s ^p r o ^c ^e ^s ^s ^e ^s ^a r e ^p ^e ^r ^f ^o r m ^e ^d ^a ⁿ ^d ^w ^o r k i n ^g ^a ^s i n t e ⁿ ^d ^e ^d .

E . 2 . ^I ^d ^e ⁿ t i f y t h ^e ^b ^o ^d i e ^s ^r ^e ^s ^p ^o ⁿ ^s ⁱ ^b l e f o ^r ^d ^e ^s i g ⁿ i n ^g ^a ⁿ ^d ⁱ ^m ^p l e ^m ^e ⁿ t i n ^g t h ^e ^e ⁿ t e ^r ^p ^r i s ^e ^s ^y ^s t e ^m f o ^r ^m ^a ⁿ ^a ^g i n ^g ^r i s ^k ^s , i n ^c l u ^d i n ^g f i s ^c ^a ^l ^r i s ^k ^s .

^T ^h ^e ^E ^R ^M ^s ^y ^s t e ^m ^a f f ^e ^c ^t ^s ^a ⁿ ^d i n ^v ^o ^l ^v ^e ^s ^a l l ^o ^f t h ^e ^o ^r ^g ^a ⁿ ⁱ ^s ^a t i o ⁿ ' s ^s t a f f . ^D ^u ^e t o t h ^e ^s ^p ^e ^c ⁱ ^f ⁱ ^c ^c ^h ^a r a ^c t e r i ^s t i ^c ^s ^o ^f ^L ^a ^r ^E ^s ^p ^a ^ñ ^a , ^c ^e r t a i n r i ^s ^k ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^a ^c t i ^v i t i e ^s ^a r e ^p ^e ^r ^f ^o r m ^e ^d ^b ^y ^s ^p ^e ^c i a l i ^s ^t ^s ^e ^r ^v ⁱ ^c ^e ^p r o ^v i d ^e ^r ^s ^w ^h ⁱ ^c ^h ^a ^s ^s ⁱ ^s ^t ^w i t h ^s ⁱ ^g ⁿ ⁱ ^f ⁱ ^c ^a ⁿ ^t ^p r o ^c ^e ^s ^s ^e ^s ^s ^u ^c ^h ^a ^s :

· I n ^v ^e ^s t m ^e ⁿ ^t ^a ⁿ ^d ^a ^s ^s ^e ^t ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ t , ^p ^e ^r ^f ^o r m ^e ^d ^p r i m ^a r i l ^y ^b ^y ^G r u ^p ^o ^L ^a ^r
· ^P r e ^p ^a r a t i o ⁿ ^o ^f t h ^e ^o ^r ^g ^a ⁿ ⁱ ^s ^a t i o ⁿ ' s ^f i n ^a ⁿ ^c i a l , ^a ^c ^c ^o ^u ⁿ t i n ^g ^a ⁿ ^d t a ^x i n ^f ^o r m ^a t i o ⁿ
· ^R ^e ^g ^u l a ^r ^a ^s ^s ^e ^t ^v ^a l u ^a t i o ⁿ ^s / a ^p ^p r a ⁱ ^s ^a ^l ^s

^H ^o ^w ^e ^v ^e r , ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^f ^o l l o ^w ^s ^d ^e t a i l e ^d ^p r o ^c ^e ^s ^s ^e ^s ^f ^o ^r ^s ^u ^p ^e ^r ^v ⁱ ^s i n ^g t h ^e t h i r d ^p ^a r t i e ^s r e ^s ^p ^o ⁿ ^s ⁱ ^b l e ^f ^o ^r t h ^e ^s ^e ^o ^u ^t ^s ^o ^u ^r ^c ^e ^d ^s ^e ^r ^v ⁱ ^c ^e ^s t o ^e ⁿ ^s ^u r e t h ^a ^t t h ^e ^s ^e ^s ^u ^p ^p l i e ^r ^s ^p ^e ^r ^f ^o r m t h ^e ^a ^c t i ^v i t i e ^s ^c ^o ⁿ t e ^m ^p l a t e ^d i n t h ^e ^E ^R ^M ^m ^o ^d ^e l .

^T ^h ^e ^m ^a i n ^p ^a r t i ^c i p ^a ⁿ ^t ^s i n t h ^e ^E ^R ^M ^m ^o ^d ^e ^l ^a r e :

^P ^r ^o ^c ^e ^s ^s ^m ^a ⁿ ^a ^g ^e ^r ^o ^r ^o ^w ⁿ ^e ^r ^o ^r ^o ^f t h ^e ^b ^u ^s i n ^e ^s ^s ^u ⁿ i t

^T ^h ^e ^s ^e ^p ^e ^o ^p l e ^a r e ^d i r e ^c t l ^y r e ^s ^p ^o ⁿ ^s ⁱ ^b l e ^f ^o ^r ^m ^a ⁿ ^a ^g i n ^g r i ^s ^k i n i t ^s ^e ^v ^e ^r ^y ^d ^a ^y ^m ^a ⁿ ⁱ ^f ^e ^s t a t i o ⁿ ^s ; t h ^e i r ^w ^o r k ^e ⁿ ^c ^o ^m ^p ^a ^s ^s ^e ^s t h ^e i d ^e ⁿ t i ^f ⁱ ^c ^a t i o ⁿ , ^a ⁿ ^a ^l ^y ^s ⁱ ^s , ^a ^s ^s ^e ^s ^s ^m ^e ⁿ ^t ^a ⁿ ^d ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^o ^f t h ^e r i ^s ^k ^s ^w ^h ⁱ ^c ^h ^a r e ^c r u ^c i a ^l t o ^d ^e l i ^v ^e ^r ^y ^o ^f t h ^e ^o b j ^e ^c t i ^v ^e ^s ^s ^e ^t ^f ^o ^r ^e ^a ^c ^h ^a r e ^a , ^u ⁿ ^d ^e ^r t h ^e ^s ^c ^o ^p ^e ^o ^f ^c ^u r r e ⁿ ^t ^b ^u ^s i n ^e ^s ^s ^p l a ⁿ ^s .

^R i s ^k ^o f f i c ^e ^r

^T ^h ^e r i ^s ^k ^o f f ⁱ ^c ^e ^r ' s ^j ^o ^b ⁱ ^s t o ^a ⁿ ^a ^l ^y ^s ^e ^a ⁿ ^d ^c ^o ⁿ ^s ^o l i d ^a t e t h ^e r i ^s ^k i n ^f ^o r m ^a t i o ⁿ ^p r e ^p ^a r e ^d ^b ^y t h ^e ^p r o ^c ^e ^s ^s ^o ^w ⁿ ^e ^r ^s , ^w ^h ⁱ ^c ^h ⁱ ^s ^g r a ^d ^u ^a l l ^y ^c ^r ^y ^s t a l l i ^s i n ^g i n t h ^e ^f ^o r m ^o ^f ' r i ^s ^k ^f i l e ^s ' . ^H ^e ^o ^r ^s ^h ^e ⁱ ^s ^a ^l ^s ^o t a ^s ^k ^e ^d ^w i t h i d ^e ⁿ t i f y i n ^g ⁿ ^e ^w ^e ^v ^e ⁿ ^t ^s , ^g ^a t h ^e r i n ^g ^a ⁿ ^d ^a ^s ^s ^e ^s ^s i n ^g i n ^f ^o r m ^a t i o ⁿ r e ^g ^a r d i n ^g t h ^e ^k ^e ^y r i ^s ^k i n ^d ⁱ ^c ^a t o ^r ^s i n t r i n ^s ⁱ ^c t o t h ^e ^C ^o ^m ^p ^a ⁿ ^y ' s ^p r o ^c ^e ^s ^s ^e ^s ^a ⁿ ^d ^p r o ^p ^o ^s i n ^g ^a ⁿ ^y ^m ^o ⁿ i t o r i n ^g ^a ^c t i o ⁿ ^p l a ⁿ ^s , ^a ^s r e ^q ^u i r e ^d . ^O ⁿ ^c ^e t h ^e ^p r i o r i t ^y r i ^s ^k ^f ^a ^c t o ^r ^s ^h ^a ^v ^e ^b ^e ^e ⁿ i d ^e ⁿ t i ^f i e ^d , t h ^e ' r i ^s ^k ^f i l e ^s ' ^a r e ^a l l o ^c ^a t e ^d t o t h ^e ^p ^a r t i e ^s r e ^s ^p ^o ⁿ ^s ⁱ ^b l e ^f ^o ^r t h ^e i r ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^a ⁿ ^d ^c ^o ⁿ t r o l .

^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r ^o ^l ^C ^o ^m ^m i t t e ^e

I n ^a ^c ^c ^o r d ^a ⁿ ^c ^e ^w i t h t h ^e ^p r o ^v ⁱ ^s i o ⁿ ^s ^o ^f ^a r t i ^c l e 1 4 ^o ^f t h ^e ^R ^e ^g ^u l a t i o ⁿ ^s ^o ^f t h ^e ^B ^o ^a ^r ^d ^o ^f ^D i r e ^c t o ^r ^s ^a ⁿ ^d ^a r t i ^c l e ⁵ ^o ^f t h ^e ^R ^e ^g ^u l a t i o ⁿ ^s ^o ^f t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e , i t ⁱ ^s ^e ⁿ t r u ^s t e ^d , ^a ^m ^o ⁿ ^g ^o t h ^e ^r ^s , ^w i t h t h ^e ^f ^o l l o ^w i n ^g ^f ^u ⁿ ^c t i o ⁿ ^s :

· ^S ^u ^p ^e ^r ^v ⁱ ^s i n ^g t h ^e ^e f f ^e ^c t i ^v ^e ⁿ ^e ^s ^s ^o ^f t h ^e i n t e r n ^a ^l ^c ^o ⁿ t r o ^l ^a ⁿ ^d r i ^s ^k ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^s ^y ^s t e ^m ^s ^a ⁿ ^d , i n ^p ^a r t i ^c ^u l a r , r e ^v i e ^w i n ^g t h ^e ^m t o ^m ^a ^k ^e ^s ^u r e t h ^e ^m ^a i n r i ^s ^k ^s ^a r e ^p r o ^p ^e r l ^y i d ^e ⁿ t i ^f i e ^d , ^m ^a ⁿ ^a ^g ^e ^d ^a ⁿ ^d ^d ⁱ ^s ^c l o ^s ^e ^d .
· ^S ^u ^p ^e ^r ^v ⁱ ^s i n ^g t h ^e i n t e r n ^a ^l r i ^s ^k ^c ^o ⁿ t r o ^l ^a ⁿ ^d ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^f ^u ⁿ ^c t i o ⁿ .
· I d ^e ⁿ t i f y t h ^e ^d ⁱ f f ^e r e ⁿ ^t ^t ^y ^p ^e ^s ^o ^f r i ^s ^k ( ^o ^p ^e r a t i o ⁿ ^a l , t e ^c ^h ⁿ ^o l o ^g ⁱ ^c ^a l , ^f i n ^a ⁿ ^c i a l , l e ^g ^a l , r e ^p ^u t a t i o ⁿ ^a ^l ) t h ^a ^t t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^f ^a ^c ^e ^s , i n ^c l u ^d i n ^g , ^a ^m ^o ⁿ ^g ^f i n ^a ⁿ ^c i a ^l ^o ^r ^e ^c ^o ⁿ ^o ^m ⁱ ^c , ^c ^o ⁿ t i n ^g ^e ⁿ ^t l i a ^b i l i t i e ^s ^a ⁿ ^d ^o t h ^e ^r ^o f f ^ï ^b ^a l a ⁿ ^c ^e ^s ^h ^e ^e ^t r i ^s ^k ^s .
· ^T ^h ^e ^d ^e t e r m i n ^a t i o ⁿ ^o ^f r i ^s ^k l e ^v ^e ^l ^s t h ^a ^t t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^c ^o ⁿ ^s i d ^e ^r ^s ^a ^c ^c ^e ^p t a ^b l e .
· I d ^e ⁿ t i f y i n ^g ^m ^e ^a ^s ^u r e ^s ^f ^o ^r ^m i t i ^g ^a t i n ^g t h ^e i d ^e ⁿ t i ^f i e ^d r i ^s ^k ^s .
· I d ^e ⁿ t i f y i n ^g t h ^e i n t e r n ^a ^l r e ^p ^o r t i n ^g ^a ⁿ ^d ^c ^o ⁿ t r o ^l ^s ^y ^s t e ^m ^s t o ^b ^e ^u ^s ^e ^d t o ^c ^o ⁿ t r o ^l ^a ⁿ ^d ^m ^a ⁿ ^a ^g ^e t h ^e ^s ^a i d r i ^s ^k ^s .

I n l i ^g ^h ^t ^o ^f t h ^e ^a ^b ^o ^v ^e , t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e ⁱ ^s t a ^s ^k ^e ^d ^w i t h ^m ^o ⁿ i t o r i n ^g ^a ^p ^p l i ^c ^a t i o ⁿ ^o ^f t h ^e ^R ⁱ ^s ^k ^C ^o ⁿ t r o ^l ^a ⁿ ^d ^M ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^P ^o l i ^c ^y ^d ^e ^f i n ^e ^d ^b ^y t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s . ^T ^h ⁱ ^s ^P ^o l i ^c ^y i n ^c l u ^d ^e ^s t h ^e ^v ^a r i o ^u ^s ^c l a ^s ^s ^e ^s ^o ^f r i ^s ^k t o ^w ^h ⁱ ^c ^h t h ^e ^o ^r ^g ^a ⁿ ⁱ ^s ^a t i o ⁿ ⁱ ^s ^e ^x ^p ^o ^s ^e ^d ( ^s t r a t e ^g ⁱ ^c , ^o ^p ^e r a t i o ⁿ ^a l , ^c ^o ^m ^p l i a ⁿ ^c ^e ^a ⁿ ^d ^f i n ^a ⁿ ^c i a ^l ) , i n ^c l u ^d i n ^g ^f ⁱ ^s ^c ^a ^l r i ^s ^k ^s ( ^p ^a ^y i n ^g ^c l o ^s ^e ^a t t e ⁿ t i o ⁿ t o ^o ^v ^e ^r ^s ⁱ ^g ^h ^t ^o ^f t h ^e r e ^q ^u i r e ^m ^e ⁿ ^t ^s ^a ^s ^s ^o ^c i a t e ^d ^w i t h t h ^e ^R ^E I T r e ^g i m ^e ) . ^L ^a ^s t l ^y , t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e ^h ^a ^s t o r e ^p ^o r t t o t h ^e ^B ^o ^a r d ^o ⁿ i t ^s ^a ^c t i ^v i t i e ^s t h r o ^u ^g ^h ^o ^u ^t t h ^e ^c ^o ^u ^r ^s ^e ^o ^f t h ^e ^y ^e ^a r .

^o ^a ^r ^d ^o ^f ^D i r ^e ^c t o ^r ^s

T ^h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o r s i s t h ^e ^b ^o ^d ^y t a ^s ^k ^e ^d ^w i t h ^a ^p ^p r o ^v i n ^g t h ^e ^G r o ^u ^p ' s ^R i s ^k ^C ^o ⁿ t r o ^l ^a ⁿ ^d ^M ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^P ^o l i ^c ^y .

I t ^a ^s ^s ^u ^m ^e ^s , ^a ^m ^o ⁿ ^g ^o t h ^e ^r ^p ^o ^w ^e ^r ^s , t h ^e ^d ^u ^t ^y ^o ^f i d ^e ⁿ t i f y i n ^g t h ^e ^C ^o ^m ^p ^a ⁿ ^y ' s ^m ^a i n r i ^s ^k ^s ^a ⁿ ^d ^s ^u ^p ^e ^r ^v ⁱ ^s i n ^g t h ^e i n t e r n ^a ^l ^c ^o ⁿ t r o ^l ^s ^y ^s t e ^m ^s , t o ^w ^h ⁱ ^c ^h ^e ⁿ ^d i t ⁱ ^s ^k ^e ^p ^t i n ^f ^o r m ^e ^d ^b ^y i t ^s ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e .

E . 3 . ^S t a t e t h ^e ^m ^a i n ^r i s ^k ^s t h ^a ^t ^c ^o ^u l d ^p ^r ^e ^v ^e ⁿ ^t t h ^e ^c ^o ^m ^p ^a ⁿ ^y f r ^o ^m ^a ^c ^h i e ^v i n ^g i t s ^b ^u ^s i n ^e ^s ^s t a ^r ^g ^e t s .

^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^h ^a ^s i d ^e ⁿ t i ^f i e ^d t h ^e r i ^s ^k ^s t h ^a ^t ^c ^o ^u l d ^j ^e ^o ^p ^a r d ⁱ ^s ^e i t ^s ^a ^b i l i t ^y t o ^a ^c ^h i e ^v ^e i t ^s ^o b j ^e ^c t i ^v ^e ^s ^a ⁿ ^d ^s ^u ^c ^c ^e ^s ^s ^f ^u l l ^y ^e ^x ^e ^c ^u t e i t ^s ^s t r a t e ^g i e ^s . I n ^o r d ^e ^r t o i d ^e ⁿ t i f y t h ^e ^s ^e r i ^s ^k ^s , ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ' s ^e ^x ^p ^e r i e ⁿ ^c ^e i n

t h ^e r e ^a ^l ^e ^s t a t e ^s ^e ^c t o ^r ^a ⁿ ^d t h ^e ^C ^o ^m ^p ^a ⁿ ^y ' s ^s ^p ^e ^c ⁱ ^f ⁱ ^c ^c i r ^c ^u ^m ^s t a ⁿ ^c ^e ^s ^w ^e r e ^f ^a ^c t o r e ^d i n , ^a ^s ^w ^e r e t h ^e ^m ^e ^d i u ^m ï t e r m ^s t r a t e ^g ⁱ ^c i n i t i a t i ^v ^e ^s ^c ^o ⁿ t e ^m ^p l a t e ^d ^b ^y t h ^e ^f i r m .

^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^h ^a ^s ^a ⁿ ^u ^p ^d ^a t e ^d r i ^s ^k ^m ^a ^p ^d ^e ^p ⁱ ^c t i n ^g t h ^e ^u ⁿ ⁱ ^v ^e ^r ^s ^e ^o ^f r i ^s ^k ^s t h ^a ^t ^c ^o ^u l d ^a f f ^e ^c ^t t h ^e ^o ^r ^g ^a ⁿ ⁱ ^s ^a t i o ⁿ . ^T ^h ^e r i ^s ^k ^s l i ^s t e ^d ^b ^e l o ^w ^a r e t h ^e r i ^s ^k ^s t h ^a ^t ^h ^a ^v ^e ^b ^e ^e ⁿ ^p r i o r i t i ^s ^e ^d ^b ^y ^L ^a ^r ^E ^s ^p ^a ^ñ ^a i n t h ^e ^w ^a ^k ^e ^o ^f t h ⁱ ^s r i ^s ^k ^m ^a ^p ^p i n ^g ^e ^x ^e ^r ^c ⁱ ^s ^e , ^u ^p ^d ^a t e ^d ^a ⁿ ⁿ ^u ^a l l ^y ; i n ² ⁰ 1 9 , i t ^m ^a ⁿ ^a ^g ^e ^d ^a ⁿ ^d ^m ^o ⁿ i t o r e ^d t h ^e ^s ^e r i ^s ^k ^s ^a ^d ^e ^q ^u ^a t e ^l ^y , ^a ^p r o ^c ^e ^s ^s ^w ^h ⁱ ^c ^h ^w i l l ^b ^e ^o ⁿ ^g ^o i n ^g i n t h ^e ^y ^e ^a ^r ^s t o ^c ^o ^m ^e :

· ^C ^o ^m ^p l i a ⁿ ^c ^e ^w i t h t h ^e r e ^q ^u i r e ^m ^e ⁿ ^t ^s ^o ^f t h ^e ^S ^O ^C I M ^I r e ^g i m ^e .
· ^S ^a l e ï p ^u ^r ^c ^h ^a ^s ^e ^o ^f r e ^a ^l ^e ^s t a t e ^a ^s ^s ^e ^t ^s , ^p l a ⁿ ⁿ i n ^g , i n ^f ^o r m ^a t i o ⁿ ^a ⁿ ^d ^e ^x ^e ^c ^u t i o ⁿ .
· ^L ^o ^s ^s ^o ^f ^v ^a l u ^e ^o ^f r e ^a ^l ^e ^s t a t e , ^m ^a i n ^l ^y ^a ^s ^a r e ^s ^u l t ^o ^f ^v ^a r i a t i o ⁿ ^s t h ^a ^t ^m ^a ^y ^a f f ^e ^c ^t t h ^e ^e ^c ^o ⁿ ^o ^m ⁱ ^c ^c ^y ^c l e i n ^g ^e ⁿ ^e r a l , ^o ^r t h ^e r e ^a ^l ^e ^s t a t e ^s ^e ^c t o ^r i n ^p ^a r t i ^c ^u l a r .
· ^P ^o l i t i ^c ^a ^l ^s i t u ^a t i o ⁿ ^a ⁿ ^d ^s ^o ^c i o ï e ^c ^o ⁿ ^o ^m ⁱ ^c ^f ^a ^c t o ^r ^s ( ^p ^o l i t i ^c ^a ^l i n ^s t a ^b i l i t ^y , ^c ^h ^a ⁿ ^g ^e i n t h ^e ^e ^c ^o ⁿ ^o ^m ⁱ ^c ^c ^y ^c l e , i n ^c ^o ⁿ ^s ^u ^m ^p t i o ⁿ ^p ^a t t e r n ^s , i n ^c r e ^a ^s i n ^g ^d ⁱ ^g i t a l i ^z ^a t i o ⁿ , ^e ^t ^c . ) .
· I n ^v ^e ^s t m ^e ⁿ ^t / ^A ^s ^s ^e ^t ^M ^a ⁿ ^a ^g ^e ^r ^u ⁿ i t .
· ^C ^y ^b ^e ^r ^s ^e ^c ^u r i t ^y .
· ^R ^e t e ⁿ t i o ⁿ ^o ^f i n t e r n ^a ^l t a l e ⁿ t .
· I n ^c r e ^a ^s ^e ^d ^c ^o ^m ^p ^e t i t i o ⁿ , ^b ^o t h ^f ^o ^r ^c ^o ^m ^p ^e t i t i ^v ^e ^a ^c t i o ⁿ ^s ^a ⁿ ^d ^f ^o ^r ^a ^g r e ^a t e ^r ^p r o l i ^f ^e r a t i o ⁿ ^o ^f ^a l t e r n ^a t i ^v ^e ^p r o ^d ^u ^c ^t ^s .
· ^M ^a r k ^e ^t ^s i t u ^a t i o ⁿ t h ^a ^t ^m ^a ^y ^a ^d ^v ^e ^r ^s ^e ^l ^y ^a f f ^e ^c ^t t h ^e ^m ^a t e r i a l i ^z ^a t i o ⁿ ^o ^f i n ^v ^e ^s t m ^e ⁿ ^t / ^d ⁱ ^v ^e ^s t m ^e ⁿ ^t ^o ^p ^p ^o r t u ⁿ i t i e ^s .
· ^R ^e ^g ^u l a t i o ⁿ ^s ^a ⁿ ^d r e ^g ^u l a t o ^r ^y ^c ^h ^a ⁿ ^g ^e ^s .
· ^C ^o ⁿ ^f i d ^e ⁿ t i a l i t ^y .
· ^T ^e ^c ^h ⁿ ^o l o ^g ⁱ ^c ^a ^l i n ^f r a ^s t r u ^c t u r e .

^T ^h ^e r i ^s ^k ^m ^o ⁿ i t o r i n ^g ^p r o ^c ^e ^s ^s ^c ^o ⁿ ^s ⁱ ^s ^t ^s ^o ^f t r a ^c ^k i n ^g ^a l l i n t e r n ^a ^l ^a ⁿ ^d ^e ^x t e r n ^a ^l ^v ^a r i a ^b l e ^s t h ^a ^t ^c ^o ^u l d ^h ^e l p ^a ⁿ t i ^c i p ^a t e ^o ^r ^f ^o r e ^s ^e ^e t h ^e ^m ^a t e r i a l i ^s ^a t i o ⁿ ^o ^f t h ^e ^s ^e ^o ^r ^o t h ^e ^r r i ^s ^k ^s ^o ^f r e l e ^v ^a ⁿ ^c ^e t o t h ^e ^L ^a ^r ^E ^s ^p ^a ^ñ ^a .

E . 4 . ^S t a t e ^w ^h ^e t h ^e ^r t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^h ^a ^s ^a ^d ^e f i n ^e ^d ^r i s ^k t o l e ^r ^a ⁿ ^c ^e t h ^r ^e ^s ^h ^o l d , i n ^c l u ^d i n ^g ^w i t h ^r ^e ^s ^p ^e ^c ^t f i s ^c ^a ^l ^r i s ^k

^T ^h ^e r i ^s ^k ^m ^a ^p ⁱ ^s t h ^e t o ^o ^l ^u ^s ^e ^d ^b ^y ^L ^a ^r ^E ^s ^p ^a ^ñ ^a t o i d ^e ⁿ t i f y ^a ⁿ ^d ^a ^s ^s ^e ^s ^s i t ^s r i ^s ^k ^s . ^A l l t h ^e r i ^s ^k ^s ^c ^o ⁿ t e ^m ^p l a t e ^d , i n ^c l u ^d i n ^g t a ^x r i ^s ^k ^s , ^a r e ^e ^v ^a l u ^a t e ^d ^c ^o ⁿ ^s i d ^e r i n ^g ^v ^a r i o ^u ^s i n ^d ⁱ ^c ^a t o ^r ^s ^o ^f i m ^p ^a ^c ^t ^a ⁿ ^d l i k ^e l i h ^o ^o ^d .

^L ^a ^r ^E ^s ^p ^a ^ñ ^a ' ^s ^E ^R ^M ^s ^y ^s t e ^m ^d ^e f i n ^e ^s r i s ^k t o l e r a ⁿ ^c ^e ^a ^s " t h ^e ^a ^c ^c e p t a ^b l e l e ^v ^e ^l o f ^v ^a ^r i a t i o ⁿ i n ^o ^u t c ^o ^m e s ^r ^e l a t i v ^e t o t h ^e ^a ^c ^h i e ^v ^e ^m ^e ⁿ ^t o f ^o ^b j ^e ^c t i v e s " . T ^h ^e ^p r o ^p ^o ^s ^e ^d r i s ^k t o l e r a ⁿ ^c ^e ^c r i t e r i a ^a r e ^u ^s ^e ^d t o ^p r i o r i t i ^s ^e ^a ⁿ ^d i t e ^m ⁱ ^s ^e t h ^e l e ^v ^e ^l ^o ^f ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^a ⁿ ^d ^m ^o ⁿ i t o r i n ^g ^a ^s ^s ⁱ ^g ⁿ ^e ^d t o ^e ^a ^c ^h r i ^s ^k ^c ^a t e ^g ^o ^r ^y . ^A ^c ^c ^o r d i n ^g ^l ^y , t h ^e ^m ^o r e ^c r i t i ^c ^a ^l t h ^e ^o b j ^e ^c t i ^v ^e ^w i t h ^w ^h ⁱ ^c ^h ^a ⁿ i d ^e ⁿ t i ^f i e ^d r i ^s ^k ⁱ ^s ^a ^s ^s ^o ^c i a t e ^d , t h ^e l o ^w ^e ^r t h ^e l e ^v ^e ^l ^o ^f t o l e r a ⁿ ^c ^e ^a ^c ^c ^e ^p t e ^d ^b ^y ^L ^a ^r ^E ^s ^p ^a ^ñ ^a .

^A ^g ^a i n ^s ^t t h ⁱ ^s ^b ^a ^c ^k ^d r o ^p , t h r e ^e l e ^v ^e ^l ^s ^o ^f r i ^s ^k ^h ^a ^v ^e ^b ^e ^e ⁿ ^d ^e ^f i n ^e ^d : ^h ⁱ ^g ^h , ^m ^e ^d i u ^m ^a ⁿ ^d l o ^w , ^d ^e ^p ^e ⁿ ^d i n ^g ^o ⁿ ^h ^o ^w ^c r i t i ^c ^a ^l t h ^e ^o b j ^e ^c t i ^v ^e ^w i t h ^w ^h ⁱ ^c ^h t h ^e r i ^s ^k ⁱ ^s ^a ^s ^s ^o ^c i a t e ^d ⁱ ^s ^d ^e ^e ^m ^e ^d . ^T ^h ^e r i ^s ^k t o l e r a ⁿ ^c ^e ^d ^e t e r m i n ^a t i o ⁿ ^s ^y ^s t e ^m ⁱ ^s r e ^v i e ^w ^e ^d ^a ^t l e ^a ^s ^t ^a ⁿ ⁿ ^u ^a l l ^y ^b ^y t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e .

E . 5 . ^S t a t e t h ^e ^r i s ^k ^s , i n ^c l u ^d i n ^g f i s ^c ^a ^l ^r i s ^k ^s , t h ^a ^t ^m ^a t e ^r i a l i s ^e ^d ^d ^u ^r i n ^g t h ^e ^r ^e ^p ^o ^r t i n ^g ^p ^e ^r i o ^d .

^D ^u r i n ^g t h ^e ^y ^e ^a ^r ² ⁰ 1 9 , t h ^e r e ^h ^a ^s ^b ^e ^e ⁿ ⁿ ^o ^k ⁿ ^o ^w l e ^d ^g ^e ^o ^f t h ^e ^m ^a t e r i a l i ^z ^a t i o ⁿ ^o ^f ^a ⁿ ^y r i ^s ^k ^o ^f ^a ⁿ ^y ^t ^y ^p ^e , i n ^c l u ^d i n ^g t h ^o ^s ^e ^o ^f ^a ^f ⁱ ^s ^c ^a ^l ⁿ ^a t u r e , t h ^a ^t ^h ^a ^s ^h ^a ^d ^a ^s ⁱ ^g ⁿ ⁱ ^f ⁱ ^c ^a ⁿ ^t i m ^p ^a ^c ^t ^o ⁿ t h ^e ^a ^c ^h i e ^v ^e ^m ^e ⁿ ^t ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y ' s ^o b j ^e ^c t i ^v ^e ^s .

E . 6 . ^O ^u t l i n ^e t h ^e ^r ^e ^s ^p ^o ⁿ ^s ^e ^a ⁿ ^d ^m ^o ⁿ i t o ^r i n ^g ^p l a ⁿ ^s f o ^r t h ^e ^c ^o ^m ^p ^a ⁿ ^y ' s ^k ^e ^y ^r i s ^k f a ^c t o ^r ^s ,

i n ^c l u ^d i n ^g f i s ^c ^a ^l ^r i s ^k f a ^c t o ^r ^s

^T ^h ^e ^s ^p ^e ^c ⁱ ^f ⁱ ^c ^c ^h ^a r a ^c t e r i ^s t i ^c ^s ^o ^f ^L ^a ^r ^E ^s ^p ^a ^ñ ^a , ^c ^o ^u ^p l e ^d ^w i t h t h ^o ^s ^e ^o ^f t h ^e ^b ^u ^s i n ^e ^s ^s ^s ^e ^c t o ^r i n ^w ^h ⁱ ^c ^h i t ^o ^p ^e r a t e ^s , ^m ^a ^k ^e i t ^o ^f t a ⁿ t a ^m ^o ^u ⁿ ^t i m ^p ^o r t a ⁿ ^c ^e t o ^c ^o r r e ^c t l ^y ^m ^o ⁿ i t o ^r ^a ⁿ ^d ^u ^p ^d ^a t e t h ^e ^v ^a r i o ^u ^s r i ^s ^k ^s t o ^w ^h ⁱ ^c ^h t h ^e ^o ^r ^g ^a ⁿ ⁱ ^s ^a t i o ⁿ ⁱ ^s ^e ^x ^p ^o ^s ^e ^d , i n ^c l u ^d i n ^g t a ^x r i ^s ^k ^s .

^T ^h ^e l e ^v ^e ^l ^a ⁿ ^d ^f r e ^q ^u ^e ⁿ ^c ^y ^w i t h ^w ^h ⁱ ^c ^h i t ^m ^o ⁿ i t o ^r ^s t h ^e r i ^s ^k ^s i d ^e ⁿ t i ^f i e ^d ^v ^a r i e ^s ^a ^s ^a ^f ^u ⁿ ^c t i o ⁿ ^o ^f t h ^e ^p ^e ^r ^c ^e ⁱ ^v ^e ^d i m ^p ^o r t a ⁿ ^c ^e ^o ^r ^c r i t i ^c ^a l i t ^y ^o ^f t h ^e ^s ^e r i ^s ^k ^f ^a ^c t o ^r ^s ^a ⁿ ^d t h ^e l e ^v ^e ^l ^o ^f ^e f f ^e ^c t i ^v ^e ⁿ ^e ^s ^s ^o ^f t h ^e ^c ^o ⁿ t r o ^l ^s ^c ^u r r e ⁿ t l ^y i n ^p l a ^c ^e . ^A ^c ^c ^o r d i n ^g ^l ^y , ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^h ^a ^s ^d ^e ^f i n ^e ^d ^d ⁱ f f ^e r e ⁿ ^t ^s ^c ^e ⁿ ^a r i o ^s ^f ^o ^r ^m ^a ⁿ ^a ^g i n ^g i t ^s r i ^s ^k ^s : ^a ) ^e ^x ^h ^a ^u ^s t i ^v ^e ^a ⁿ ^a ^l ^y ^s ⁱ ^s ^o ^f t h ^e r i ^s ^k ^s ^d ^e ^e ^m ^e ^d ^h ⁱ ^g ^h ^l ^y ^c r i t i ^c ^a ^l t o ^a ^c ^h i e ^v i n ^g ^a ⁿ ^a ^d ^e ^q ^u ^a t e l e ^v ^e ^l ^o ^f ^c ^o ⁿ t r o ^l ; ^b ) ^a ^s ^s ^e ^s ^s ^m ^e ⁿ ^t ^a ⁿ ^d ^s ^u ^r ^v ^e i l l a ⁿ ^c ^e ^o ^f r i ^s ^k ^s ^d ^e ^e ^m ^e ^d ^o ^f ^m ^e ^d i u ^m i m ^p ^o r t a ⁿ ^c ^e t o ^a ^c ^h i e ^v i n ^g ^a ^d ^e ^q ^u ^a t e ^c ^o ⁿ t r o ^l ^a ^s ^a ^f ^u ⁿ ^c t i o ⁿ ^o ^f t h ^e r e ^a ^l l e ^v ^e ^l ^o ^f r i ^s ^k ; ^a ⁿ ^d ^c ) r a t i o ⁿ ^a l i ^s ^a t i o ⁿ ^a ⁿ ^d ^o ^p t i m ⁱ ^s ^a t i o ⁿ ^o ^f t h ^e ^c ^o ⁿ t r o ^l ^s ^a ^p ^p l i e ^d t o r i ^s ^k ^s ^o ^f r e l a t i ^v ^e ^l ^y l e ^s ^s i m ^p ^o r t a ⁿ ^c ^e . ^B ^a ^s ^e ^d ^o ⁿ t h ^e ^s ^e l e ^v ^e ^l ^s , ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^h ^a ^s ^e ^s t a ^b l i ^s ^h ^e ^d ^f ^o ^u ^r ^k i n ^d ^s ^o ^f ^s t r a t e ^g i e ^s i n r e l a t i o ⁿ t o t h ^e l e ^v ^e ^l ^o ^f r i ^s ^k ^a ^s ^s ^u ^m ^e ^d i n ^e ^a ^c ^h i n ^s t a ⁿ ^c ^e :

· ^R ^e ^d ^u ^c t i o ⁿ : t h ⁱ ^s i m ^p l i e ^s ^u ⁿ ^d ^e r t a ^k i n ^g r e ^s ^p ^o ⁿ ^s ^e ^a ^c t i ^v i t i e ^s ^d ^e ^s ⁱ ^g ⁿ ^e ^d t o r e ^d ^u ^c ^e t h ^e ^p r o ^b ^a ^b i l i t ^y ^o ^f ^o ^c ^c ^u r r e ⁿ ^c ^e ^o ^r i m ^p ^a ^c ^t ^o ^f t h ^e r i ^s ^k , ^o ^r ^b ^o t h ^s i m ^u l t a ⁿ ^e ^o ^u ^s ^l ^y . ^T ^h ⁱ ^s ^m ^a ^y ^e ⁿ t a i l t h ^e i n t r o ^d ^u ^c t i o ⁿ ^o ^f ⁿ ^e ^w ^c ^o ⁿ t r o ^l ^s ^o ^r t h ^e i m ^p r o ^v ^e ^m ^e ⁿ ^t ^o ^f ^e ^x ⁱ ^s t i n ^g ^o ⁿ ^e ^s .
· ^S ^h ^a r i n ^g : ^a r i ^s ^k ' s ^p r o ^b ^a ^b i l i t ^y ^o ^f ^o ^c ^c ^u r r e ⁿ ^c ^e ^o ^r i m ^p ^a ^c ^t ^c ^a ⁿ ^b ^e r e ^d ^u ^c ^e ^d ^b ^y t r a ⁿ ^s ^f ^e r r i n ^g ^o ^r ^s ^h ^a r i n ^g ^a ^p ^o r t i o ⁿ ^o ^f t h ^a ^t r i ^s ^k ( ^e . ^g . , ^v i a i n ^s ^u r a ⁿ ^c ^e ^p ^o l i ^c i e ^s ) .
· ^A ^v ^o i d ^a ⁿ ^c ^e : t h ⁱ ^s i m ^p l i e ^s ^w i t h ^d r a ^w ^a ^l ^f r o ^m t h ^e r i ^s ^k ^ï ^g ^e ⁿ ^e r a t i n ^g ^a ^c t i ^v i t i e ^s . I n t h ⁱ ^s i n ^s t a ⁿ ^c ^e , t h ^e r i ^s ^k r e ^s ^p ^o ⁿ ^s ^e ^m ^a ^y ^b ^e t o ^g ^e ^t ^o ^u ^t ^o ^f ^a ^g ⁱ ^v ^e ⁿ ^b ^u ^s i n ^e ^s ^s ^u ⁿ i t ^o ^r l i n ^e ^a ⁿ ^d / o ^r ^d ^e ^c i d ^e ⁿ ^o ^t t o ^p ^u ^r ^s ^u ^e ⁿ ^e ^w ^b ^u ^s i n ^e ^s ^s ^a ^c t i ^v i t i e ^s ^a ^s ^s ^o ^c i a t e ^d ^w i t h ^s ^u ^c ^h r i ^s ^k ^s .
· ^A ^c ^c ^e ^p t a ⁿ ^c ^e : i n t h ⁱ ^s i n ^s t a ⁿ ^c ^e ⁿ ^o ^a ^c t i o ⁿ ⁱ ^s t a ^k ^e ⁿ t o ^m ^o ^d ⁱ f y t h ^e r i ^s ^k ' s ^p r o ^b ^a ^b i l i t ^y ^o ^r i m ^p ^a ^c ^t ; r i ^s ^k ⁱ ^s ^a ^s ^s ^u ^m ^e ^d ^a ^t i t ^s i n ^h ^e r e ⁿ ^t l e ^v ^e ^l ^a ^s t h ⁱ ^s ⁱ ^s ^d ^e ^e ^m ^e ^d ^a ^p ^p r o ^p r i a t e ^f ^o ^r t h ^e ^a ^c t i ^v i t ^y ^a ⁿ ^d ^e ^s t a ^b l i ^s ^h ^e ^d ^o b j ^e ^c t i ^v ^e ^s .

^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^p r i o r i t i ^s ^e ^s ^a ^c t i o ⁿ ^p l a ⁿ ^s ^d ^e ^p ^e ⁿ ^d i n ^g ^o ⁿ ^h ^o ^w ^c r i t i ^c ^a ^l t h ^e r i ^s ^k ^s ^b ^e i n ^g ^m i t i ^g ^a t e ^d ^a r e , t h ^e ^c ^o ^s t / ^b ^e ⁿ ^e ^f i t ^a ⁿ ^a ^l ^y ^s ⁱ ^s ^o ^f t h ^e ^p r o ^p ^o ^s ^e ^d ^c ^o ^u ^r ^s ^e ^o ^f ^a ^c t i o ⁿ ^a ⁿ ^d ^a ^v ^a i l a ^b l e r e ^s ^o ^u ^r ^c ^e ^s . ^T ^o t h ⁱ ^s ^e ⁿ ^d , t h ^e ^o ^r ^g ^a ⁿ ⁱ ^s ^a t i o ⁿ ' s ^m ^o ^s ^t ^s ⁱ ^g ⁿ ⁱ ^f ⁱ ^c ^a ⁿ ^t r i ^s ^k ^s ^h ^a ^v ^e ^b ^e ^e ⁿ i d ^e ⁿ t i ^f i e ^d ; ^w ^o r k ^h ^a ^s ^b ^e ^g ^u ⁿ ^o ⁿ ^d ^o ^c ^u ^m ^e ⁿ t i n ^g t h ^e ^s ^e r i ^s ^k ^s i n i n ^d ⁱ ^v i d ^u ^a ^l r i ^s ^k ^f i l e ^s i n ^o r d ^e ^r t o ^e ⁿ ^a ^b l e ^e ⁿ ^h ^a ⁿ ^c ^e ^d ^m ^o ⁿ i t o r i n ^g . ^T ^h ^e ^s ^e ^f i l e ^s ^s ^p ^e ^c ⁱ f y t h ^e ^c ^o ⁿ t r o ^l ^s i n ^p l a ^c ^e ^a ⁿ ^d t h ^e ^k ^e ^y i n ^d ⁱ ^c ^a t o ^r ^s ( ^K ^R ^I ^s ) t h ^a ^t ^e ⁿ ^a ^b l e ^a ⁿ t i ^c i p ^a t i o ⁿ ^a ⁿ ^d / o ^r ^m ^o ⁿ i t o r i n ^g ^o ^f t h ^e ^a ^s ^s ^o ^c i a t e ^d r i ^s ^k ^s . ^T ^h ^e ^p l a ⁿ ⁱ ^s t o ^f ^u r t h ^e ^r ^a ^d ^v ^a ⁿ ^c ^e t h ⁱ ^s r i ^s ^k ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^a ⁿ ^d ^m ^o ⁿ i t o r i n ^g ^p r o ^c ^e ^s ^s i n t h ^e ^y ^e ^a ^r ^s t o ^c ^o ^m ^e .

I t ^s ^h ^o ^u l d ^b ^e ⁿ ^o t e ^d t h ^a t , ^a ^t l e ^a ^s ^t ^a ⁿ ⁿ ^u ^a l l ^y , t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e ^o ^f ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^a ⁿ ^a ^l ^y ^z ^e ^s t h ^e ^v ^a l i d i t ^y ^o ^f t h ^e ^O ^r ^g ^a ⁿ ⁱ ^z ^a t i o ⁿ ' s ^R ⁱ ^s ^k ^M ^a ^p ^a ⁿ ^d ^p r o ^c ^e ^e ^d ^s t o i n ^c ^o r p ^o r a t e , ^m ^o ^d ⁱ f y ^o ^r ^d ⁱ ^s ^c ^a r d t h ^e r i ^s ^k ^s t h ^a ^t ^a r e ⁿ ^e ^c ^e ^s ^s ^a ^r ^y ^d ^u ^e t o ^c ^h ^a ⁿ ^g ^e ^s i n t h ^e ^s t r a t e ^g ⁱ ^c ^o b j ^e ^c t i ^v ^e ^s , ^o ^r ^g ^a ⁿ ⁱ ^z ^a t i o ⁿ ^a ^l ^s t r u ^c t u r e , ⁿ ^e ^w r i ^s ^k ^s , ^c ^u r r e ⁿ ^t r e ^g ^u l a t i o ⁿ ^s , ^e ^t ^c .

I N^T ^E ^R ^N ^A ^L ^C ^O ^N ^T ^R ^O ^L ^O ^V ^E ^R ^F ^I N ^A ^N ^C ^I A ^L ^R ^E ^P ^O ^R ^T ^I N ^G ( ^I C ^F ^R )

^D ^e ^s ^c ^r ⁱ ^b ^e t h ^e ^m ^e ^c ^h ^a ⁿ i s ^m ^s ^c ^o ^m ^p ^r i s i n ^g t h ^e ^r i s ^k ^c ^o ⁿ t r ^o ^l ^a ⁿ ^d ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^s ^y ^s t e ^m ^s ^a ^s t h ^e ^y ^a f f e ^c ^t ^y ^o ^u ^r ^c ^o ^m ^p ^a ⁿ ^y ' s i n t e ^r ⁿ ^a ^l ^c ^o ⁿ t r ^o ^l ^o ^v ^e ^r f i n ^a ⁿ ^c i a ^l ^r ^e ^p ^o ^r t i n ^g ( ^I ^C ^F ^R ) ^s ^y ^s t e ^m

. 1 . ^T ^h ^e ^e ⁿ t i t y ' s ^c ^o ⁿ t r ^o ^l ^e ⁿ ^v i r ^o ⁿ ^m ^e ⁿ ^t

^I ⁿ ^d i c ^a t e t h ^e ^e ^x i s t e ⁿ ^c ^e ^o ^f ^a ^t l e ^a ^s ^t t h ^e f o l l o ^w i n ^g ^c ^o ^m ^p ^o ⁿ ^e ⁿ t s , ^d ^e ^s ^c ^r ⁱ ^b i n ^g t h ^e i r ^m ^a i n ^c ^h ^a ^r ^a ^c t e ^r i s t i c ^s :

F . 1 . 1 . ^T ^h ^e ^b ^o ^d i e ^s ^a ⁿ ^d / ^o ^r f u ⁿ ^c t i o ⁿ ^s ^r ^e ^s ^p ^o ⁿ ^s ⁱ ^b l e f o ^r : ( ⁱ ) t h ^e ^e ^x i s t e ⁿ ^c ^e ^a ⁿ ^d ^r ^e ^g ^u l a ^r ^u ^p ^d ^a t i n ^g ^o ^f ^a ^s ^u i t a ^b l e , ^e f f e ^c t i v ^e ^I ^C ^F ^R ^s ^y ^s t e ^m ; ( i i ) i t s ⁱ ^m ^p l e ^m ^e ⁿ t a t i o ⁿ ; ^a ⁿ ^d ( i i i ) i t s ^m ^o ⁿ i t o ^r i n ^g .

^T ^h ^e i n t e r n ^a ^l ^c ^o ⁿ t r o ^l ^o ^v ^e ^r ^f i n ^a ⁿ ^c i a ^l r e ^p ^o r t i n ^g ( ^h ^e r e i n ^a ^f t e r , I C ^F ^R ) ^s ^y ^s t e ^m ^h ^a ^s ^b ^e ^e ⁿ ^d ^e ^s ⁱ ^g ⁿ ^e ^d ^a ⁿ ^d ^c ^o ⁿ ^f ⁱ ^g ^u r e ^d t o ^p r o ^v i d ^e r e ^a ^s ^o ⁿ ^a ^b l e ^a ^s ^s ^u r a ⁿ ^c ^e ^a ^s t o t h ^e r e l i a ^b i l i t ^y ^o ^f t h ^e ^f i n ^a ⁿ ^c i a ^l i n ^f ^o r m ^a t i o ⁿ ^d ⁱ ^s ^c l o ^s ^e ^d t o t h ^e ^m ^a r k ^e ^t ^s .

^T ^h ^e ^b ^o ^d i e ^s r e ^s ^p ^o ⁿ ^s ⁱ ^b l e ^f ^o ^r t h ^e ^e ^x ⁱ ^s t e ⁿ ^c ^e ^a ⁿ ^d / o ^r ^o ^v ^e ^r ^s ⁱ ^g ^h ^t ^o ^f ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ' s I C ^F ^R ^m ^o ^d ^e ^l ^a r e :

^o ^a ^r ^d ^o ^f ^D i r ^e ^c t o ^r ^s

^T ^h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ⁱ ^s ^u l t i m ^a t e ^l ^y r e ^s ^p ^o ⁿ ^s ⁱ ^b l e ^f ^o ^r t h ^e ^e ^x ⁱ ^s t e ⁿ ^c ^e ^a ⁿ ^d ^m ^a i n t e ⁿ ^a ⁿ ^c ^e ^o ^f ^a ^s ^u i t a ^b l e ^a ⁿ ^d ^e f f ^e ^c t i ^v ^e I C ^F ^R ^s ^y ^s t e ^m .

^T ^o t h ⁱ ^s ^e ⁿ ^d , ^a r t i ^c l e ⁵ ^o ^f t h ^e ^B ^o ^a r d ^R ^e ^g ^u l a t i o ⁿ ^s r e ^s ^e ^r ^v ^e ^s t h ^e ^f ^o l l o ^w i n ^g ^p ^o ^w ^e ^r t o t h ^e ^B ^o ^a r d i n ^p l e ⁿ ^a ^r ^y ^s ^e ^s ^s i o ⁿ :

· ^T ^h ^e ^s ^u ^p ^e ^r ^v ⁱ ^s i o ⁿ ^o ^f t h ^e ^p r o ^c ^e ^s ^s ^o ^f ^p r e ^p ^a r i n ^g ^a ⁿ ^d ^p r e ^s ^e ⁿ t i n ^g t h ^e ^f i n ^a ⁿ ^c i a ^l i n ^f ^o r m ^a t i o ⁿ ^a ⁿ ^d t h ^e ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t r e ^p ^o r t , ^w ^h ⁱ ^c ^h ^w i l l i n ^c l u ^d ^e , ^w ^h ^e r e ^a ^p ^p r o ^p r i a t e , t h ^e ^m ^a ⁿ ^d ^a t o ^r ^y ⁿ ^o ⁿ ^ï ^f i n ^a ⁿ ^c i a ^l i n ^f ^o r m ^a t i o ⁿ , ^a ^s ^w ^e l l ^a ^s t h ^e ^a ^p ^p r o ^v ^a ^l ^o ^f t h ^e ^f i n ^a ⁿ ^c i a ^l i n ^f ^o r m ^a t i o ⁿ t h ^a t , ^d ^u ^e t o i t ^s ^s t a t u ^s ^a ^s ^a l i ^s t e ^d ^c ^o ^m ^p ^a ⁿ ^y , t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^m ^u ^s ^t ^m ^a ^k ^e ^p ^u ^b l i ^c ^p ^e r i o ^d ⁱ ^c ^a l l ^y .
· ^A ^p ^p r o ^v i n ^g t h ^e r i ^s ^k ^c ^o ⁿ t r o ^l ^a ⁿ ^d ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^p ^o l i ^c ^y ^a ⁿ ^d t h ^e ^p ^e r i o ^d ⁱ ^c ^m ^o ⁿ i t o r i n ^g ^o ^f t h ^e i n t e r n ^a ^l i n ^f ^o r m ^a t i o ⁿ ^a ⁿ ^d ^c ^o ⁿ t r o ^l ^s ^y ^s t e ^m ^s .

^T ^o ^a ^c ^h i e ^v ^e t h ^e ^s ^e ^o b j ^e ^c t i ^v ^e ^s , t h ^e ^B ^o ^a r d ⁱ ^s ^a ^s ^s ⁱ ^s t e ^d ^b ^y i t ^s ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e , ^w ^h ⁱ ^c ^h ⁱ ^s t a ^s ^k ^e ^d ^w i t h ^s ^u ^p ^e ^r ^v ⁱ ^s i o ⁿ ^o ^f t h ^e I C ^F ^R ^s ^y ^s t e ^m ( ^w i t h t h ^e ^h ^e l p ^o ^f t h ^e i n t e r n ^a ^l ^a ^u ^d i t ^f ^u ⁿ ^c t i o ⁿ ) . I t ⁱ ^s ^a ^d ^d i t i o ⁿ ^a l l ^y ^s ^u ^p ^p ^o r t e ^d ^b ^y t h ^e ^w ^o r k ^p ^e ^r ^f ^o r m ^e ^d ^b ^y t h ^e ^p r o ^c ^e ^s ^s ^o ^w ⁿ ^e ^r ^s ^a ⁿ ^d / o ^r t h ^e r e ^s ^p ^o ⁿ ^s ⁱ ^b l e ^o ^f t h ^e ^b ^u ^s i n ^e ^s ^s ^u ⁿ i t ^s t a ^s ^k ^e ^d ^w i t h i m ^p l e ^m ^e ⁿ t a t i o ⁿ ^o ^f t h ^e I C ^F ^R ^s ^y ^s t e ^m ^a ⁿ ^d t h ^e ^f i r m ' s ^C ^o r p ^o r a t e & ^F i n ^a ⁿ ^c i a ^l ^M ^a ⁿ ^a ^g ^e ^m ^e ⁿ t , ^w ^h ⁱ ^c ^h ⁱ ^s ^u l t i m ^a t e ^l ^y r e ^s ^p ^o ⁿ ^s ⁱ ^b l e ^f ^o ^r ^e ⁿ ^s ^u r i n ^g t h ^e ^s ^y ^s t e ^m ⁱ ^s ^a ^d ^e ^q ^u ^a t e ^a ⁿ ^d ^e f f ^e ^c t i ^v ^e .

^E ^a ^c ^h t i m ^e t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^a ^u t h ^o r i ^s ^e ^s ^a ⁿ ⁿ ^u ^a ^l ^f i n ^a ⁿ ^c i a ^l ^s t a t e ^m ^e ⁿ ^t ^s ^f ^o ^r ⁱ ^s ^s ^u ^e , i n ^c ^o ⁿ ^j ^u ⁿ ^c t i o ⁿ ^w i t h ^a ^p ^p r o ^v ^a ^l ^o ^f t h ^e ^a ⁿ ⁿ ^u ^a ^l ^c ^o r p ^o r a t e ^g ^o ^v ^e r n ^a ⁿ ^c ^e r e ^p ^o r t , i t ^a ^p ^p r o ^v ^e ^s ^a ⁿ ^d ^v ^a l i d ^a t e ^s t h ^e ^e ^x ⁱ ^s t e ⁿ ^c ^e ^o ^f ^a ⁿ ^e f f ^e ^c t i ^v ^e I C ^F ^R ^s ^y ^s t e ^m ^a ⁿ ^d i t ^s ^d ^e ^s ^c r i p t i o ⁿ .

^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r ^o ^l ^C ^o ^m ^m i t t e ^e

^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^e ^s t a ^b l i ^s ^h ^e ^s i n ^A r t i ^c l e 1 4 ^o ^f i t ^s ^R ^e ^g ^u l a t i o ⁿ ^s ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^a ⁿ ^d i n ^A r t i ^c l e ⁵ ^o ^f t h ^e ^R ^e ^g ^u l a t i o ⁿ ^s ^o ^f t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e , ^w ^h ⁱ ^c ^h i t ^h ^a ^s ^a ^m ^o ⁿ ^g i t ^s ^c ^o ^m ^p ^e t e ⁿ ^c ^e ^s :

· ^P ^e r i o ^d ⁱ ^c ^a l l ^y ^s ^u ^p ^e ^r ^v ⁱ ^s ^e t h ^e ^e f f ^e ^c t i ^v ^e ⁿ ^e ^s ^s ^o ^f t h ^e i n t e r n ^a ^l ^c ^o ⁿ t r o ^l ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^a ⁿ ^d i t ^s ^g r o ^u ^p , ^a ^s ^w ^e l l ^a ^s t h ^e ^a ^c t i ^v i t ^y ^o ^f t h ^e i n t e r n ^a ^l ^a ^u ^d i t ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y , ^d ⁱ ^s ^c ^u ^s ^s i n ^g , t o ^g ^e t h ^e ^r ^w i t h t h ^e ^a ^c ^c ^o ^u ⁿ ^t ^a ^u ^d i t o ^r ^s , t h ^e ^s ⁱ ^g ⁿ ⁱ ^f ⁱ ^c ^a ⁿ ^t ^w ^e ^a ^k ⁿ ^e ^s ^s ^e ^s ^o ^f t h ^e i n t e r n ^a ^l ^c ^o ⁿ t r o ^l ^s ^y ^s t e ^m ^d ^e t e ^c t e ^d i n t h ^e ^d ^e ^v ^e l o ^p ^m ^e ⁿ ^t ^o ^f t h ^e ^a ^u ^d i t .
· ^S ^u ^p ^e ^r ^v ⁱ ^s ^e t h ^e ^p r o ^c ^e ^s ^s ^o ^f ^p r e ^p ^a r a t i o ⁿ ^a ⁿ ^d ^p r e ^s ^e ⁿ t a t i o ⁿ ^o ^f ^m ^a ⁿ ^d ^a t o ^r ^y ^f i n ^a ⁿ ^c i a ^l i n ^f ^o r m ^a t i o ⁿ

F

^a ⁿ ^d ^s ^u ^b ^m i t r e ^c ^o ^m ^m ^e ⁿ ^d ^a t i o ⁿ ^s ^o ^r ^p r o ^p ^o ^s ^a ^l ^s t o t h ^e ^a ^d ^m i n ⁱ ^s t r a t i ^v ^e ^b ^o ^d ^y , ^a i m ^e ^d ^a ^t ^s ^a ^f ^e ^g ^u ^a r d i n ^g i t ^s i n t e ^g r i t ^y .

^A ^s ^a r e ^s ^u l t , t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e ' s ^w ^o r k ⁱ ^s ^a r t i ^c ^u l a t e ^d ^a ⁿ ^d ^f ^o ^c ^u ^s ^e ^d ^a r o ^u ⁿ ^d ^f ^o ^u ^r ^m ^a i n ^a r e ^a ^s :

· ^T ^h ^e r i ^s ^k i d ^e ⁿ t i ^f ⁱ ^c ^a t i o ⁿ ^a ⁿ ^d i n t e r n ^a ^l ^c ^o ⁿ t r o ^l ^s ^y ^s t e ^m
· ^T ^h ^e r e ^v i e ^w ^a ⁿ ^d ^a ^p ^p r o ^v ^a ^l ^o ^f ^f i n ^a ⁿ ^c i a ^l i n ^f ^o r m ^a t i o ⁿ
· ^T ^h ^e ^e ^x t e r n ^a ^l ^a ^u ^d i t ^o ^f t h ^e ^a ⁿ ⁿ ^u ^a ^l ^f i n ^a ⁿ ^c i a ^l ^s t a t e ^m ^e ⁿ ^t ^s
· ^C ^o ^m ^p l i a ⁿ ^c ^e ^w i t h t h ^e l a ^w ^a ⁿ ^d t h ^e ^C ^o ^m ^p ^a ⁿ ^y ' s ^b ^o ^d ^y ^o ^f i n t e r n ^a ^l r u l e ^s ^a ⁿ ^d r e ^g ^u l a t i o ⁿ ^s

^T ^h ^e ^s ^u ^p ^e ^r ^v ⁱ ^s i o ⁿ ^a ^c t i ^v i t ^y ^o ^f t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e ^c ^o ⁿ ^s ⁱ ^s ^t ^s i n ^e ⁿ ^s ^u r i n ^g t h ^e ^e f f ^e ^c t i ^v ^e ⁿ ^e ^s ^s ^o ^f t h ^e I C ^F ^R , ^o ^b t a i n i n ^g ^s ^u f f ⁱ ^c i e ⁿ ^t ^e ^v i d ^e ⁿ ^c ^e ^o ^f i t ^s ^c ^o r r e ^c ^t ^d ^e ^s ⁱ ^g ⁿ ^a ⁿ ^d ^o ^p ^e r a t i o ⁿ , ^w ^h ⁱ ^c ^h r e ^q ^u i r e ^s ^e ^v ^a l u ^a t i n ^g t h ^e ^p r o ^c ^e ^s ^s ^o ^f i d ^e ⁿ t i ^f ^y i n ^g t h ^e r i ^s ^k ^s t h ^a ^t ^m ^a ^y ^a f f ^e ^c ^t t h ^e ^f ^a i t h ^f ^u ^l i m ^a ^g ^e ^o ^f t h ^e ^f i n ^a ⁿ ^c i a ^l i n ^f ^o r m ^a t i o ⁿ , ^v ^e r i f y t h ^a ^t t h ^e r e ^a r e ^c ^o ⁿ t r o ^l ^s t o ^m i t i ^g ^a t e t h ^e ^m ^a ⁿ ^d t h ^a ^t t h ^e ^y ^w ^o r k ^e f f ^e ^c t i ^v ^e ^l ^y .

I t ^a ^l ^s ^o ^c ^o ⁿ ^s ⁱ ^s ^t ^s ^o ^f r e ^v i e ^w i n ^g , ^a ⁿ ^a ^l ^y ^z i n ^g ^a ⁿ ^d ^c ^o ^m ^m ^e ⁿ t i n ^g ^o ⁿ t h ^e ^f i n ^a ⁿ ^c i a ^l ^a ⁿ ^d t h ^e I C ^F ^R i n ^f ^o r m ^a t i o ⁿ ^w i t h t h ^e ^M ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^a ⁿ ^d ^w i t h t h ^e ^a ^u ^d i t o ^r ^s , i n t e r n ^a ^l ^a ⁿ ^d ^e ^x t e r n ^a l , t o ^e ⁿ ^s ^u r e t h ^a ^t t h ^e ^a ^c ^c ^o ^u ⁿ t i n ^g ^c r i t e r i a ^a ^p ^p l i e ^d ^a r e ^c ^o r r e ^c ^t ^a ⁿ ^d t h ^e i n ^f ^o r m ^a t i o ⁿ ^p r o ^v i d ^e ^d ⁱ ^s ^c ^o ^m ^p l e t e ^a ⁿ ^d ^c ^o ⁿ ^s ⁱ ^s t e ⁿ ^t ^w i t h t h ^e ^o ^p ^e r a t i o ⁿ ^s , ^a ⁿ ^d t h ^a ^t t h ^e I C ^F ^R ⁱ ^s ^s ^u i t a ^b l e ^f ^o ^r ^a ^c ^h i e ^v i n ^g i t ^s ^o b j ^e ^c t i ^v ^e ^s ^a ⁿ ^d ^h ^a ^s ^f ^u ⁿ ^c t i o ⁿ ^e ^d ^e f f ⁱ ^c i e ⁿ t l ^y t h r o ^u ^g ^h ^o ^u ^t t h ^e ^y ^e ^a r .

^L i k ^e ^w ⁱ ^s ^e , t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e ^v ^e r i ^f i e ^s t h ^a ^t t h ^e I C ^F ^R t a ^k ^e ^s i n t o ^a ^c ^c ^o ^u ⁿ ^t ^a l l ^a ^s ^p ^e ^c ^t ^s ^e ^s t a ^b l i ^s ^h ^e ^d i n t h ^e r e ^c ^o ^m ^m ^e ⁿ ^d ^a t i o ⁿ ^s ^o ^f t h ^e ^C ^N ^M ^V ^a ⁿ ^d r e ^p ^o r t ^s i t ^s ^c ^o ⁿ ^c l u ^s i o ⁿ ^s t o t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s .

^C ^o ^r ^p ^o ^r ^a t e ^a ⁿ ^d ^F i n ^a ⁿ ^c i a ^l ^M ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t

^T ^h ^e ^C ^o r p ^o r a t e & ^F i n ^a ⁿ ^c i a ^l ^M ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t t e ^a ^m ⁱ ^s r e ^s ^p ^o ⁿ ^s ⁱ ^b l e ^f ^o ^r t h ^e ^d ^e ^s ⁱ ^g ⁿ , i m ^p l e ^m ^e ⁿ t a t i o ⁿ ^a ⁿ ^d ^w ^o r k i n ^g ^s ^o ^f t h ^e I C ^F ^R ^s ^y ^s t e ^m , ^w ^h ⁱ ^c ^h ^e f f ^o r t i n ^c l u ^d ^e ^s :

· ^D ^e ^f i n i n ^g , ^p r o ^p ^o ^s i n ^g ^a ⁿ ^d i m ^p l e ^m ^e ⁿ t i n ^g ^a ^m ^o ^d ^e ^l ^f ^o ^r ^g ^e ⁿ ^e r a t i n ^g ^f i n ^a ⁿ ^c i a ^l i n ^f ^o r m ^a t i o ⁿ .
· ^D ^e ^f i n i n ^g , i m ^p l e ^m ^e ⁿ t i n ^g ^a ⁿ ^d ^d ^o ^c ^u ^m ^e ⁿ t i n ^g t h ^e I C ^F ^R ^s ^y ^s t e ^m .
· ^A ^s ^s ⁱ ^s t i n ^g t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e i n ^p r e ^p ^a r i n ^g t h ^e ^f i n ^a ⁿ ^c i a ^l ^s t a t e ^m ^e ⁿ ^t ^s ^a ⁿ ^d ^o t h ^e ^r ^f i n ^a ⁿ ^c i a ^l i n ^f ^o r m ^a t i o ⁿ ^a ⁿ ^d i n ^s ^e l e ^c t i n ^g t h ^e ^c r i t e r i a ^u ^s ^e ^d i n t h ^e ^p r o ^c ^e ^s ^s .
· ^V ^e r i f y i n ^g , ^a ^t l e ^a ^s ^t ^a ⁿ ⁿ ^u ^a l l ^y , t h ^e ^c ^o ^m ^p r e ^h ^e ⁿ ^s ⁱ ^v ^e ⁿ ^e ^s ^s ^a ⁿ ^d ^s ^u i t a ^b i l i t ^y ^o ^f I C ^F ^R ^d ^o ^c ^u ^m ^e ⁿ t a t i o ⁿ ^a ⁿ ^d ^p ^e ^r ^f ^o r m ^a ⁿ ^c ^e .
· ^R ^e ^p ^o r t i n ^g ^o ⁿ ^d ^e ^v ^e l o ^p ^m ^e ⁿ ^t ^s i n t e r m ^s ^o ^f I C ^F ^R ^d ^o ^c ^u ^m ^e ⁿ t a t i o ⁿ t o t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e ^a ⁿ ^d t o t h ^e I n t e r n ^a ^l ^A ^u ^d i t ^S ^e ^r ^v ⁱ ^c ^e ^s ^o t h ^e ^y ^a r e ^f ^a ^m i l i a ^r ^w i t h ^a ⁿ ^d ^c ^a ⁿ ^a ^p ^p r a ⁱ ^s ^e ^s ^u ^c ^h ^d ^e ^v ^e l o ^p ^m ^e ⁿ ^t ^s .

^I ⁿ t e ^r ⁿ ^a ^l ^A ^u ^d i t ^S ^e ^r ^v i c ^e

^T ^h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e ^h ^a ^s t a ^s ^k ^e ^d t h ^e I n t e r n ^a ^l ^A ^u ^d i t ^S ^e ^r ^v ⁱ ^c ^e ^w i t h ^a ^s ^s ⁱ ^s t i n ^g i t ^w i t h ^s ^u ^p ^e ^r ^v ⁱ ^s i o ⁿ ^o ^f t h ^e I C ^F ^R ^s ^y ^s t e ^m , ^w ^h ⁱ ^c ^h r e ^m i t ^s ^p ^e ^c ⁱ ^f ⁱ ^c ^a l l ^y i n ^c l u ^d ^e ^s :

· ^S ^u ^p ^e ^r ^v ⁱ ^s ^e t h ^e ^s ^u f f ⁱ ^c i e ⁿ ^c ^y ^a ⁿ ^d ^e f f ^e ^c t i ^v ^e ⁿ ^e ^s ^s ^o ^f t h ^e I C ^F ^R ^a ⁿ ^d ^o ^f t h ^e ^g ^e ⁿ ^e r a ^l ^a ⁿ ^d ^p r o ^c ^e ^s ^s ^c ^o ⁿ t r o ^l ^s .
· ^C ^o l l a ^b ^o r a t i n ^g ^o ⁿ t h ^e ^d ^e ^f i n i t i o ⁿ ^a ⁿ ^d ^c l a ^s ^s ⁱ ^f ⁱ ^c ^a t i o ⁿ ^o ^f i n ^c i d ^e ⁿ ^t ^s ^a ⁿ ^d ^o ⁿ t h ^e ^d ^e ^s ⁱ ^g ⁿ ^o ^f ^a ⁿ ^y r e ^q ^u i r e ^d ^a ^c t i o ⁿ ^p l a ⁿ ^s ^a ⁿ ^d ^m ^o ⁿ i t o r i n ^g t h ^e l a t t e r .
· ^R ^e ^p ^o r t i n ^g t o t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e ^o ⁿ t h ^e i n ^c i d ^e ⁿ ^t ^s ^d ^e t e ^c t e ^d ^d ^u r i n ^g

t h ^e ^e ^v ^a l u ^a t i o ⁿ ^a ⁿ ^d ^o ^v ^e ^r ^s ⁱ ^g ^h ^t ^p r o ^c ^e ^s ^s .

· ^A ^s ^s ⁱ ^s t i n ^g ^C ^o r p ^o r a t e & ^F i n ^a ⁿ ^c i a ^l ^M ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t t o ^p r e ^p ^a r e r e ^p ^o r t ^s ^o ⁿ t h ^e ^s t a t u ^s ^a ⁿ ^d ^d ^e ^s ^c r i p t i o ⁿ ^o ^f t h ^e I C ^F ^R ^s ^y ^s t e ^m .

^P ^r ^o ^c ^e ^s ^s ^o ^w ⁿ ^e ^r ^s i n ^v ^o l v ^e ^d i n t h ^e f i n ^a ⁿ ^c i a ^l ^r ^e ^p ^o ^r t i n ^g ^p ^r ^o ^c ^e ^s ^s

^T ^h ^e ^p ^a r t i e ^s r e ^s ^p ^o ⁿ ^s ⁱ ^b l e ^f ^o ^r t h ^e ^v ^a r i o ^u ^s ^p r o ^c ^e ^s ^s ^e ^s r e l a t e ^d t o t h ^e ^g ^e ⁿ ^e r a t i o ⁿ ^o ^f ^f i n ^a ⁿ ^c i a ^l i n ^f ^o r m ^a t i o ⁿ , ^w ^h ^e t h ^e ^r i n t e r n ^a ^l ^o ^r ^e ^x t e r n ^a l , ^m ^u ^s ^t ^p ^e ^r ^f ^o r m ^s ^p ^e ^c ⁱ ^f ⁱ ^c ^a ^c t i ^v i t i e ^s , ^a ^s ^d ⁱ ^c t a t e ^d ^b ^y ^C ^o r p ^o r a t e & ^F i n ^a ⁿ ^c i a ^l ^M ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^g ^u i d ^e l i n ^e ^s , ^w i t h ^a ^v i e ^w t o :

· ^D ^e ^f i n i n ^g , ^d ^o ^c ^u ^m ^e ⁿ t i n ^g , ^a ⁿ ^d ^u ^p ^d ^a t i n ^g t h ^e i n t e r n ^a ^l ^p r o ^c ^e ^s ^s ^e ^s ^a ⁿ ^d ^p r o ^c ^e ^d ^u r e ^s .
· ^E ^x ^e ^c ^u t i n ^g t h ^e ^c ^o ⁿ t r o ^l ^a ^c t i ^v i t i e ^s ^a ^s ^d ^e ^s ⁱ ^g ⁿ ^e ^d ^a ⁿ ^d i n t e ⁿ ^d ^e ^d ^a ⁿ ^d ^d ^o ^c ^u ^m ^e ⁿ t i n ^g ^e ^v i d ^e ⁿ ^c ^e ^o ^f t h ^e i r ^p ^e ^r ^f ^o r m ^a ⁿ ^c ^e ^f ^o ^r t r a ^c ^e ^a ^b i l i t ^y ^p ^u r p ^o ^s ^e ^s .
· ^R ^e ^p ^o r t i n ^g t o ^C ^o r p ^o r a t e & ^F i n ^a ⁿ ^c i a ^l ^M ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^o ⁿ ^a ⁿ ^y ^c ^h ^a ⁿ ^g ^e t o t h ^e i r ^m ^o ^d ^u ^s ^o ^p ^e r a ⁿ ^d ⁱ ^o ^r t r a ⁿ ^s ^a ^c t i o ⁿ ^s t h ^a ^t ^c ^o ^u l d t r i ^g ^g ^e ^r t h ^e ⁿ ^e ^e ^d t o ^u ^p ^d ^a t e ^h ^o ^w t h ^e i r ^p r o ^c ^e ^s ^s ^e ^s ^a ⁿ ^d ^c ^o ⁿ t r o ^l ^s ^a r e ^d ^e ^f i n ^e ^d ^a ⁿ ^d ^d ^o ^c ^u ^m ^e ⁿ t e ^d ^a ⁿ ^d ^o ⁿ ^a ⁿ ^y ^c ^o ⁿ t r o ^l ^s ^h ^o r t ^c ^o ^m i n ^g ^s t h ^e ^y ^m ^a ^y ^d ^e t e ^c t .
· ^D ^e ^f i n i n ^g ^a ⁿ ^d i m ^p l e ^m ^e ⁿ t i n ^g ^a ^c t i o ⁿ ^p l a ⁿ ^s i n r e ^s ^p ^o ⁿ ^s ^e t o i n ^c i d ^e ⁿ ^t ^s ^o ^b ^s ^e ^r ^v ^e ^d ^w i t h i n t h ^e i r ^s ^p ^h ^e r e ^o ^f r e ^s ^p ^o ⁿ ^s ⁱ ^b i l i t ^y .

^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^h ^a ^s ^o ^u ^t ^s ^o ^u ^r ^c ^e ^d t h ^e ^p ^e ^r ^f ^o r m ^a ⁿ ^c ^e ^o ^f ^c ^e r t a i n ^m ^a t e r i a ^l ^f i n ^a ⁿ ^c i a ^l r e ^p ^o r t i n ^g ^a ^c t i ^v i t i e ^s t o ^s ^p ^e ^c i a l i ^s ^t t h i r d ^p ^a r t i e ^s ( i n ^c l u ^d i n ^g i n ^v ^e ^s t m ^e ⁿ ^t ^a ⁿ ^d ^a ^s ^s ^e ^t ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ t , ^p r e ^p ^a r a t i o ⁿ ^o ^f i t ^s ^f i n ^a ⁿ ^c i a l , ^a ^c ^c ^o ^u ⁿ t i n ^g ^a ⁿ ^d t a ^x i n ^f ^o r m ^a t i o ⁿ ^a ⁿ ^d ^p ^e r i o ^d ⁱ ^c ^a ^p ^p r a ⁱ ^s ^a ^l ^o ^f i t ^s ^a ^s ^s ^e ^t ^s ) . I n r e ^s ^p ^e ^c ^t ^o ^f t h ^e I C ^F ^R ^f ^u ⁿ ^c t i o ⁿ , ^C ^o r p ^o r a t e & ^F i n ^a ⁿ ^c i a ^l ^M ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^e ⁿ ^s ^u r e ^s t h ^a ^t t h ^e ^s ^e ^s ^e ^r ^v ⁱ ^c ^e ^p r o ^v i d ^e ^r ^s ^p ^e ^r ^f ^o r m t h ^e ^c ^o ⁿ t r o ^l ^s t h ^a t , ^d ^e ^s ^p i t e ^b ^e i n ^g ^e ^x ^e ^c ^u t e ^d ^b ^y t h ^e l a t t e r , ^h ^a ^v ^e ^b ^e ^e ⁿ i d ^e ⁿ t i ^f i e ^d ^a ^s ^k ^e ^y ^c ^o ⁿ t r o ^l ^s ^f ^o ^r t h ^e I C ^F ^R ^s ^y ^s t e ^m . ^A ^s ^p ^a r t ^o ^f t h ⁱ ^s ^m ^o ^d ^e l , ^s ^u ^p ^e ^r ^v ⁱ ^s i o ⁿ ^o ^f t h ^e I n t e r n ^a ^l ^A ^u ^d i t ^S ^e ^r ^v ⁱ ^c ^e ⁱ ^s t a ^s ^k ^e ^d t o t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e .

F . 1 . 2 . ^T ^h ^e ^e ^x i s t e ⁿ ^c ^e ^o ^r ^o t h ^e ^r ^w i s ^e ^o ^f t h ^e f o l l o ^w i n ^g ^c ^o ^m ^p ^o ⁿ ^e ⁿ t s , ^e ^s ^p ^e ^c i a l l y i n ^c ^o ⁿ ⁿ ^e ^c t i o ⁿ ^w i t h t h ^e f i n ^a ⁿ ^c i a ^l ^r ^e ^p ^o ^r t i n ^g ^p ^r ^o ^c ^e ^s ^s :

^T ^h ^e ^d ^e ^p ^a ^r ^t ^m ^e ⁿ t s ^a ⁿ ^d / ^o ^r ^m ^e ^c ^h ^a ⁿ i s ^m ^s i n ^c ^h ^a ^r ^g ^e ^o f : ( ⁱ ) t h ^e ^d ^e ^s i g ⁿ ^a ⁿ ^d ^r ^e ^v i e ^w ^o ^f t h ^e ^o ^r ^g ^a ⁿ i s ^a t i o ⁿ ^a ^l ^s t r ^u ^c t u ^r ^e ; ( i i ) ^d ^e f i n i n ^g ^c l e ^a ^r l i n ^e ^s ^o ^f ^r ^e ^s ^p ^o ⁿ ^s ⁱ ^b i l i t y ^a ⁿ ^d ^a ^u t h ^o ^r i t y , ^w i t h ^a ⁿ ^a ^p ^p ^r ^o ^p ^r i a t e ^d i s t r ⁱ ^b ^u t i o ⁿ ^o ^f ^d ^u t i e ^s ^a ⁿ ^d f u ⁿ ^c t i o ⁿ ^s ; ^a ⁿ ^d ( i i i ) ^d ^e ^p l o ^y i n ^g ^p ^r ^o ^c ^e ^d ^u ^r ^e ^s ^s ^o t h i s ^s t r ^u ^c t u ^r ^e i s ^c ^o ^m ^m ^u ⁿ i c ^a t e ^d ^e f f e ^c t i v ^e l y t h ^r ^o ^u ^g ^h ^o ^u ^t t h ^e ^c ^o ^m ^p ^a ⁿ ^y :

^C ^o r p ^o r a t e & ^F i n ^a ⁿ ^c i a ^l ^M ^a ⁿ ^a ^g ^e ^m ^e ⁿ t , ^f ^o l l o ^w i n ^g t h ^e ^g ^u i d ^e l i n ^e ^s ^s ^e ^t ^b ^y t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s , ^e ⁿ ^s ^u r e ^s t h ^e ^e ^x ⁱ ^s t e ⁿ ^c ^e ^o ^f ^a ⁿ ^a ^d ^e ^q ^u ^a t e ^o ^r ^g ^a ⁿ ⁱ ^s ^a t i o ⁿ ^a ^l ^s t r u ^c t u r e , ^a l l o ^c ^a t i o ⁿ ^o ^f r o l e ^s ^a ⁿ ^d ^a ^c ^c ^o ^u ⁿ t a ^b i l i t ^y ^a ⁿ ^d t h ^e ^s t a ^g ^g ^e r e ^d ^d ^e ^p l o ^y ^m ^e ⁿ ^t ^o ^f ^s ^u f f ⁱ ^c i e ⁿ ^t ^p r o ^c ^e ^d ^u r e ^s , ^w ^h ⁱ ^c ^h ^a r e ^a l l o ^c ^a t e ^d ^a ^m ^o ⁿ ^g t h ^e ^p ^a r t i e ^s i n t e ^r ^v ^e ⁿ i n ^g i n t h ^e ^p r o ^c ^e ^s ^s ^e ^s .

^T ^h ^e ^C ^o r p ^o r a t e ^D i r e ^c t o ^r & ^C ^F ^O ^c ^a ⁿ ^c ^a l l ^o ⁿ t h ^e r e ^s ^o ^u ^r ^c ^e ^s , ^w ^h ^e t h ^e ^r i n t e r n ^a ^l ^o ^r ^e ^x t e r n ^a l , ^h ^e ^o ^r ^s ^h ^e ⁿ ^e ^e ^d ^s t o ^m ^a ⁿ ^a ^g ^e t h ^e ^d ⁱ f f ^e r e ⁿ ^t ^a ^c t i ^v i t i e ^s ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y , ^f ^o ^r ^a ^s ^s ⁱ ^s t a ⁿ ^c ^e ^a ⁿ ^d ^a ^d ^v ⁱ ^c ^e . ^A ^g ^a i n ^s ^t t h ⁱ ^s ^b ^a ^c ^k ^d r o ^p , ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^h ^a ^s ^e ⁿ t e r e ^d i n t o ^a ^M ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^A ^g r e ^e ^m ^e ⁿ ^t ^w i t h ^G r u ^p ^o ^L ^a ^r ^u ⁿ ^d ^e ^r ^w ^h ⁱ ^c ^h t h ^e ^M ^a ⁿ ^a ^g ^e ^r ^u ⁿ ^d ^e r t a ^k ^e ^s t o ^d ^e ^v ^o t e t h ^e ^s t a f f ^a ⁿ ^d r e ^s ^o ^u ^r ^c ^e ^s ⁿ ^e ^e ^d ^e ^d t o ^f ^u ^l ^f i l i t ^s ^f ^u ⁿ ^c t i o ⁿ ^s , i n ^c l u ^d i n ^g i t ^s ^f i n ^a ⁿ ^c i a ^l r e ^p ^o r t i n ^g r e l a t e ^d ^d ^u t i e ^s .

^L ^a ^r ^E ^s ^p ^a ^ñ ^a ' ^s I C ^F ^R ^M ^a ⁿ ^u ^a ^l ^p r o ^v i d ^e ^s t h ^a ^t ^w ^h ^e ⁿ ^e ^v ^e ^r t h ^e ^s ^e r v i c ^e ^s ^p r o ^v i d ^e ^d ^b ^y ^a " ^s ^e r v i c ^e ^o r g ^a ⁿ i s ^a t i o ⁿ " ^a r e ^p ^a r t ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y ' ^s ^I T ^s ^y ^s t e ^m , t h ^e ^y ^m ^u ^s ^t ^b ^e ^e ⁿ ^c ^o ^m ^p ^a ^s ^s ^e ^d ^b ^y t h ^e I F ^R ^S ^e ^v ^a l u ^a t i o ⁿ ^p r o ^c ^e ^s ^s ^e i t h ^e ^r ^b ^y ^m ^e ^a ⁿ ^s ^o ^f ^s ^p ^e ^c ⁱ ^f ⁱ ^c ^a ⁿ ^d ^d i r e ^c ^t ^a ^s ^s ^e ^s ^s ^m ^e ⁿ ^t ^o ^f t h ^e ^c ^o ⁿ t r o ^l ^s ^a ^p ^p l i e ^d ^b ^y t h ^e ^s ^e ^r ^v ⁱ ^c ^e ^o ^r ^g ^a ⁿ ⁱ ^s ^a t i o ⁿ ^o ^r ^b ^y ^o ^b t a i n i n ^g ^a ⁿ i n t e r n ^a t i o ⁿ ^a l l ^y r e ^c ^o ^g ⁿ ⁱ ^s ^e ^d ^S ^S ^A ^E ^c ^e r t i ^f ⁱ ^c ^a t e ( ^S t a t e ^m ^e ⁿ ^t ^o ⁿ ^S t a ⁿ ^d ^a r d ^s ^f ^o ^r ^A t t e ^s t a t i o ⁿ ^E ⁿ ^g ^a ^g ^e ^m ^e ⁿ ^t ^s ^N ^o . 1 6 , ^R ^e ^p ^o r t i n ^g ^o ⁿ ^C ^o ⁿ t r o ^l ^s ^a ^t ^a ^S ^e ^r ^v ⁱ ^c ^e ^O ^r ^g ^a ⁿ ⁱ ^z ^a t i o ⁿ ) ^o ^r ^b ^y ^c ^a r r ^y i n ^g ^o ^u ^t ^a l t e r n ^a t i ^v ^e ^p r o ^c ^e ^d ^u r e ^s . ^A ^t t h ^e ^m ^o ^m ^e ⁿ ^t t h ^e ^s ^e ^c ^o ⁿ ^d ^o ^p t i o ⁿ ⁱ ^s ^b ^e i n ^g ^c ^a r r i e ^d ^o ^u t , t h r o ^u ^g ^h ^a t h i r d ^p ^a r t ^y ^c ^o ⁿ ^f i r m ^a t i o ⁿ , ^w ^h ^o ^p r o ^v i d ^e ^s ^a ^c ^c ^o ^u ⁿ t i n ^g ^s ^e ^r ^v ⁱ ^c ^e ^s .

· ^C ^o ^d ^e ^o ^f ^c ^o ⁿ ^d ^u ^c ^t , ^a ^p ^p ^r ^o ^v ⁱⁿ ^g ^b ^o ^d ^y , ^d ⁱ^s ^s ^e ^m ⁱⁿ ^a ^t i o ⁿ ^a ⁿ ^d ⁱⁿ ^s ^t^r ^u ^c ^t i o ⁿ , ^p ^r ⁱⁿ ^c ⁱ^p ^l^e ^s ^a ⁿ ^d v ^a ^l u ^e ^s ^c ^o ^v ^e ^r ^e ^d ( s ^t a ^t i n ^g ^w ^h ^e ^t h ^e ^r ⁱ t ^m ^a ^k ^e ^s ^s ^p ^e ^c ⁱ f i c ^r ^e ^f e ^r ^e ⁿ ^c ^e ^t o ^r ^e ^c ^o ^r ^d ^k ^e ^e ^p ⁱ n ^g ^a ⁿ ^d f i n ^a ⁿ ^c ⁱ a ^l ^r ^e ^p ^o ^r ^t i n ^g ) , ^b ^o ^d ^y ⁱ n ^c ^h ^a ^r ^g ^e ^o ^f ⁱ n ^v ^e ^s ^t i g ^a ^t i n ^g ^b ^r ^e ^a ^c ^h ^e ^s ^a ⁿ ^d ^p ^r ^o ^p ^o ^s ⁱ n ^g c^o ^r ^r ^e ^c ^t i v ^e ^o ^r ^d ⁱ s ^c ⁱ p ^l i n ^a ^r ^y ^a ^c ^t i o ⁿ .

L ^a ^r ^E ^s ^p ^a ^ñ ^a ^h ^a ^s ^a ^C ^o ^d ^e ^o ^f ^C ^o ⁿ ^d ^u ^c ^t , ^w ^h ⁱ c ^h ^a ⁱ m ^s ^t o ^e ^s ^t a ^b ^l i s ^h ^t h ^e ^c ^o ⁿ ^d ^u ^c ^t ^g ^u ⁱ d ^e ^l i n ^e ^s ^t h ^a ^t w ⁱ l l ^r e ^g ^u ^l a ^t e ^t h ^e ^b ^e ^h ^a ^v ⁱ o ^r ^o ^f ^a ^l l ^t h ^o ^s ^e ^a ^c ^t i n ^g ^o ⁿ ^b ^e ^h ^a ^l f ^o ^f ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^a ⁿ ^d ⁱ t s ^s ^u ^b ^s ⁱ d ⁱ a ^r i e ^s . T h ⁱ^s ^C ^o ^d ^e ' s ^s ^c ^o ^p ^e ^o ^f ^a ^p ^p ^l i c ^a ^t i o ⁿ ^e ^x ^t^e ⁿ ^d ^s ^t^o ^t^h ^e ^m ^e ^m ^b ^e ^r^s ^o ^f ^t^h ^e ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^t^e ^a ^m ^o ^f G ^r^u ^p ^o ^L ^a ^r , ⁱⁿ ⁱ t s ^c ^a ^p ^a ^c ⁱ t y ^a ^s ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ' s ^M ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^C ^o ^m ^p ^a ⁿ ^y , ^a ⁿ ^d ^a ⁿ ^y ^o ^t^h ^e ^r ^p ^e ^r^s ^o ⁿ w^h ⁱ c ^h ^c ^o ^u ^l d ^b ^e ^r e ^l a ^t e ^d ^t o ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^e ^v ^e ⁿ ⁱ f ^t h ^e ^y ^a ^r e ⁿ ^o ^t ^e ^m ^p ^l o ^y ^e ^e ^s .

T ^h ^e ^b ^o ^d ^y ^r e ^s ^p ^o ⁿ ^s ⁱ b ^l e ^f o ^r ^e ⁿ ^s ^u ^r i n ^g ^d ^u ^e ^c ^o ^m ^p ^l i a ⁿ ^c ^e ^w ⁱ t h , ^u ^p ^d ^a ^t i n ^g ^o ^f ^a ⁿ ^d ^d ⁱ s ^s ^e ^m ⁱ n ^a ^t i o ⁿ o^f ^t h ^e ^C ^o ^d ^e ⁱ s ^t h ^e ^A ^u ^d ⁱ t ^a ⁿ ^d ^C ^o ⁿ ^t r o ^l ^C ^o ^m ^m ⁱ t t e ^e .

P ^r i n ^c ⁱ p ^l e ⁴ , ^r e ^g ^a ^r d ⁱ n ^g ^t h ^e ^r e ^c ^o ^r d ⁱ n ^g ^o ^f ^t r a ⁿ ^s ^a ^c ^t i o ⁿ ^s ^a ⁿ ^d ^t h ^e ^f i n ^a ⁿ ^c ⁱ a ^l ^r e ^p ^o ^r t i n ^g ^p ^r o ^c ^e ^s ^s s ^p ^e ^c ⁱ f i e ^s ^t^h ^a ^t "^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^p ^l^e ^d^g ^e^s ^t^o ^e ⁿ^s ^u ^r ^e ^t^h ^a ^t ^t^h ^e ^C ^o ^m ^p ^a ⁿ^y ' s ^f ⁱⁿ ^a ⁿ ^c ⁱ^a ^l ⁱ n f ^o ^r ^m ^a ^t i o ⁿ , ^m o s ^t ^p ^a ^r t i c ^u l a ^r l y i t s ^a ⁿ ⁿ ^u ^a l f i n ^a ⁿ ^c i a ^l ^s t a t e ^m ^e ⁿ t s , ^r e f l e ^c t s i t s ^f i n ^a ⁿ ^c i a ^l ^r ^e ^a l i t y , i n ^k ^e e p i n g ^w i t h a p ^p l i c ^a ^b l e ^g ^e ⁿ ^e ^r ^a l l y ^a ^c ^c e p t e ^d ^a ^c ^c ^o ^u ⁿ t i n g ^p ^r i n ^c i p l e s ^a ⁿ ^d i n t e ^r ⁿ ^a t i o ⁿ ^a ^l ^f i n ^a ⁿ ^c i a ^l ^r e p ^o ^r t i n g ^s t a ⁿ ^d ^a ^r d s . ^T ^o t h i s ^e ⁿ ^d , ⁿ ^o ^p ^r o f e s ^s i o ⁿ ^a ^l ^m a y ^c ^o ⁿ ^c ^e ^a ^l ^o ^r ^d i s t o ^r ^t t h ^e i n f ^o ^r ^m ^a t i o ⁿ ^c ^o ⁿ t a i n ^e ^d i n t h ^e ^C ^o ^m ^p ^a n y ' ^s ^a ^c ^c ^o ^u ⁿ t i n g ^r e g i s t e r s ^a ⁿ ^d ^r e p ^o ^r t s , ^w ^h i c ^h ^m u s ^t ^b ^e ^c ^o ^m ^p l e t e , ^a ^c ^c ^u ^r ^a t e ^a ⁿ ^d ^p ^r ^e ^c i s ^e .

T ^h ^e ^f ^a i l u ^r ^e t o ^h ^o ⁿ e s t l y ^r e p ^o ^r ^t t h ^e ^C ^o ^m ^p ^a n y ' sf i n ^a ⁿ ^c i a ^l i n f ^o ^r ^m ^a t i o ⁿ , ^w ^h ^e t h ^e ^r i n t e ^r ⁿ ^a l l y ^ß t o ^e ^m ^p l o y ^e e s , ^s ^u ^b ^s i d i a ^r i e s , ^d e p ^a ^r t m ^e ⁿ t s , i n t e ^r ⁿ ^a ^l ^b ^o ^d i e s , ^g ^o ^v ^e ^r ⁿ i n g ^b ^o ^d i e s , ^e t c . ^ß ^o ^r e x t e ^r ⁿ ^a l l y ^ß t o ^a ^u ^d i t o r s , ^s ^h ^a ^r ^e ^h ^o l d ^e r s / i n ^v e s t o r s , ^r e g ^u l a t o r y ^b ^o ^d i e s , ^m ^e ^d i a , ^e t c . ^ß ^v i o l a t e s t h i s ^C ^o ^d ^e . ^T ^h ^e ^d ^e l i v ^e r y o f i n ^c ^o ^r ^r ^e ^c ^t i n f ^o ^r ^m ^a t i o ⁿ , i t s i n ^c ^o ^r ^r ^e ^c ^t ^c ^o n f i g ^u ^r ^a t i o ⁿ ^o ^r ^a n y ^a t t e ^m ^p ^t t o ^c ^o n f u s ^e i t s ^r ^e ^c i p i e ⁿ t s ^a ^r ^e ^s i m i l a ^r l y ^d ^e ^e ^m ^e ^d t o ^c ^o n s t i t u t e ^f i n ^a ⁿ ^c i a ^l ^r e p ^o ^r t i n g mⁱ s ^c ^o ⁿ ^d ^u ^c ^t " .

· '^W ^h ⁱ s ^t l e ^ë b ^l o ^w ⁱ n ^g ' ^c ^h ^a ⁿ ⁿ ^e ^l , ^f o ^r ^t h ^e ^p ^u ^r ^p ^o ^s ^e ^o ^f ^r ^e ^p ^o ^r ^t i n ^g ^a ⁿ ^y ⁱ r ^r ^e ^g ^u ^l a ^r ⁱ t i e ^s ^o ^f ^a f i n ^a ⁿ ^c ⁱ a ^l ^o ^r ^a ^c ^c ^o ^u ⁿ ^t i n ^g ⁿ ^a ^t u ^r ^e , ^a ^s ^w ^e ^l l ^a ^s ^b ^r ^e ^a ^c ^h ^e ^s ^o ^f ^t h ^e ^c ^o ^d ^e ^o ^f ^c ^o ⁿ ^d ^u ^c ^t ^a ⁿ ^d m ^a ^l p ^r ^a ^c ^t i c ^e ^w ⁱ t h ⁱ n ^t h ^e ^o ^r ^g ^a ⁿ ⁱ s ^a ^t i o ⁿ ^t o ^t h ^e ^a ^u ^d ⁱ t ^c ^o ^m ^m ⁱ t t e ^e , ^s ^t a ^t i n ^g ^w ^h ^e ^t h ^e ^r r^e ^p ^o ^r ^t s ^m ^a ^d ^e ^t h ^r ^o ^u ^g ^h ^t h ⁱ s ^c ^h ^a ⁿ ⁿ ^e ^l ^a ^r ^e ^k ^e ^p ^t ^c ^o ⁿ ^f i d ^e ⁿ ^t i a ^l .

A ^c ^c ^o ^r d ⁱ n ^g ^t o ^a ^r t i c ^l e ¹ 4 . 3 . b . i v ^o ^f ^t h ^e ^B ^o ^a ^r d ^R ^e ^g ^u ^l a ^t i o ⁿ ^s , ⁱ t ^w ⁱ l l ^b ^e ^t h ^e ^r e ^s ^p ^o ⁿ ^s ⁱ b ⁱ l i t y ^o ^f ^t h ^e A ^u ^d ⁱ t ^a ⁿ ^d ^C ^o ⁿ ^t r o ^l ^C ^o ^m ^m ⁱ t t e ^e ^t o ^e ^s ^t a ^b ^l i s ^h ^a ⁿ ^d ^s ^u ^p ^e ^r v ⁱ s ^e ^a ^m ^e ^c ^h ^a ⁿ ⁱ s ^m ^t h ^a ^t ^a ^l l o ^w ^s ^L ^a ^r E ^s ^p ^a ^ñ ^a ^e ^m ^p ^l o ^y ^e ^e ^s ^a ⁿ ^d ⁱ n ^t e ^r e ^s ^t ^g ^r o ^u ^p ^s ^t o ^c ^o ^m ^m ^u ⁿ ⁱ c ^a ^t e ^c ^o ⁿ ^f i d ^e ⁿ ^t i a ^l l y ^a ⁿ ^d , ⁱ f ^d ^e ^e ^m ^e ^d a ^p ^p ^r o ^p ^r i a ^t e , ^a ⁿ ^o ⁿ ^y ^m ^o ^u ^s ^l y , ⁱ r r e ^g ^u ^l a ^r i t i e ^s ^o ^f ^p ^o ^t e ⁿ ^t i a ^l ^s ⁱ g ⁿ ⁱ f i c ^a ⁿ ^c ^e , ^e ^s ^p ^e ^c ⁱ a ^l l y ^f i n ^a ⁿ ^c ⁱ a ^l ^a ⁿ ^d a^c ^c ^o ^u ⁿ ^t i n ^g , ^t h ^a ^t ^w ^a ^r n ^w ⁱ t h ⁱ n ^t h ^e ^C ^o ^m ^p ^a ⁿ ^y .

L ^a ^r ^E ^s ^p ^a ^ñ ^a ^h ^a ^s ^a ^R ^e ^g ^u ^l a ^t i o ⁿ ^f o ^r ^t h ^e ^O ^p ^e ^r a ^t i o ⁿ ^o ^f ^t h ^e ^W ^h ⁱ s ^t l e ^ú ^b ^l o ^w ⁱ n ^g ^C ^h ^a ⁿ ⁿ ^e ^l ^w ^h ^e ^r e ^b ^y a ⁿ ^y ^p ^a ^r t y ^b ^o ^u ⁿ ^d ^b ^y ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ' s ^C ^o ^d ^e ^o ^f ^C ^o ⁿ ^d ^u ^c ^t ^o ^r ^b ^y ^a ⁿ ^y ^p ^r^e ^v ^a ⁱ l i n ^g ^l^e ^g ⁱ^s ^l^a ^t i o ⁿ ^o ^r o ^t h ^e ^r ^b ^o ^d ^y ^o ^f ⁱ n ^t e ^r n ^a ^l ^r u ^l e ^s ^w ^h ^o ^b ^e ^l i e ^v ^e ^s ^t h ^e ^y ^a ^r e ^b ^e ⁱ n ^g ^b ^r e ^a ^c ^h ^e ^d ^c ^a ⁿ ^p ^r e ^s ^e ⁿ ^t ^a ^c ^o ^m ^p ^l a ⁱ n ^t o^r ^c ^l a ⁱ m ^w ⁱ t h ^t h ^e ^a ⁱ m ^o ^f ^m ^a ^k ⁱ n ^g ^t h ^e ⁱ s ^s ^u ^e ^k ⁿ ^o ^w ⁿ ^a ⁿ ^d ^h ^a ^v ⁱ n ^g ⁱ t ^r e ^s ^o ^l v ^e ^d .

T ^h ^e ^W ^h ⁱ s ^t l e ^ú b ^l o ^w ⁱ n ^g ^C ^h ^a ⁿ ⁿ ^e ^l ^a ^p ^p ^l i e ^s ^t o ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^a ⁿ ^d ^o ^t h ^e ^r ^p ^r o ^f e ^s ^s ⁱ o ⁿ ^a ^l s ^b ^o ^u ⁿ ^d ^b ^y t h^e ^C ^o ^d ^e ^o ^f ^C ^o ⁿ ^d ^u ^c ^t ^a ⁿ ^d ^m ^a ^y ^b ^e ^u ^s ^e ^d ^b ^y ^t^h ^e ^C ^o ^m ^p ^a ⁿ ^y ' s ⁱⁿ ^t^e ^rⁿ ^a ^l ^o ^r ^e ^x ^t^e ^rⁿ ^a ^l ^s ^t^a ^k ^e ^h ^o ^l^d ^e ^r^s .

L^a ^r ^E ^s ^p ^a ^ñ ^a ^h ^a ^s ^t h ^e ^f o ^l l o ^w ⁱ n ^g ^c ^h ^a ⁿ ⁿ ^e ^l s ^f o ^r ^l o ^d ^g ⁱ n ^g ^c ^o ^m ^p ^l a ⁱ n ^t s / c ^l a ⁱ m ^s :

C^o ^r p ^o ^r a ^t e ^w ^e ^b ^s ⁱ t e : ^h ^t t p : / / l a ^r e ^s ^p ^a ⁿ ^a . c ^o ^m
^D e^d ⁱ c ^a ^t e ^d ^e ^ú m ^a ⁱ l ⁱ n ^b ^o ^x : ^c ^a ⁿ ^a ^l d ^e ⁿ ^u ⁿ ^c ⁱ a ^s @ ^l a ^r e ^s ^p ^a ⁿ ^a . c ^o ^m
A^c ^o ⁿ ^f i d ^e ⁿ ^t i a ^l ^e ^x ^p ^l a ⁿ ^a ^t o ^r y ^l e ^t t e ^r

A ^l l ^o ^f ^t h ^e ^s ^e ^c ^h ^a ⁿ ⁿ ^e ^l s ^f o ^r ^p ^r e ^s ^e ⁿ ^t i n ^g ^c ^o ^m ^p ^l a ⁱ n ^t s ^a ^r e ^a ^v ^a ⁱ l a ^b ^l e ² ⁴ / ⁷ ⁱ n ^o ^r d ^e ^r ^t o ^e ⁿ ^s ^u ^r e o ^p ^t i m ^a ^l ^e ^f f e ^c ^t i v ^e ⁿ ^e ^s ^s ^a ⁿ ^d ^r^o ^u ⁿ ^d ^ú t h ^e ^ú^c ^l^o ^c ^k ^a ^v ^a ⁱ l a ^b ⁱ l i t y ^f^o ^r ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ' s ^e ^m ^p ^l^o ^y ^e ^e ^s ^a ⁿ ^d s^t a ^k ^e ^h ^o ^l d ^e ^r s .

^I ⁿ ^o ^r d ^e ^r ^t o ^e ⁿ ^s ^u ^r e ^e ^f f e ^c ^t i v ^e ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^o ^f ^t h ^e ^W ^h ⁱ s ^t l e ^ú b ^l o ^w ⁱ n ^g ^C ^h ^a ⁿ ⁿ ^e ^l , ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^h ^a ^s s^e ^t ^u ^p ^a ⁿ ^E ^t h ⁱ c ^s ^C ^o ^m ^m ⁱ t t e ^e ^w ^h ^o ^s ^e ^m ^a ⁱ n ^d ^u ^t i e ^s ^a ^r e ^t h ^e ^f o ^l l o ^w ⁱ n ^g :

R^e ^c ^e ⁱ p ^t ^a ⁿ ^d ^c ^l a ^s ^s ⁱ f i c ^a ^t i o ⁿ ^o ^f ^t h ^e ^c ^o ^m ^p ^l a ⁱ n ^t s ^r e ^c ^e ⁱ v ^e ^d
C^o ^o ^r d ⁱ n ^a ^t i o ⁿ ^o ^f ^t h ^e ⁱ n ^v ^e ^s ^t i g ^a ^t i v ^e ^e ^f f o ^r t ^r e ^q ^u ⁱ r e ^d ^t o ^f o ^l l o ^w ^u ^p ^o ⁿ ^e ^a ^c ^h ^c ^o ^m ^p ^l a ⁱ n ^t
^I ^m ^p ^o ^s ⁱ t i o ⁿ ^o ^f ^t h ^e ^c ^o ^r r e ^s ^p ^o ⁿ ^d ⁱ n ^g ^d ⁱ s ^c ⁱ p ^l i n ^a ^r y ^m ^e ^a ^s ^u ^r e ^s
P^r^e ^p ^a ^r^a ^t i o ⁿ ^o ^f ^p ^e ^r i o ^d ⁱ^c ^r^e ^p ^o ^r t s ^o ⁿ ^t^h ^e ^c ^h ^a ⁿ ⁿ ^e ^l ' s ^a ^c ^t i v ⁱ t i e ^s ^a ⁿ ^d ^w ^o ^r^k ⁱⁿ ^g ^s

T ^h ^e ^E ^t h ⁱ c ^s ^C ^o ^m ^m ⁱ t t e ^e ^o ^f ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ⁱ s ^m ^a ^d ^e ^u ^p ^o ^f ^t h ^e ^p ^e ^r s ^o ⁿ ^w ^h ^o ^h ^e ^a ^d ^s ^u ^p ^t h ^e ⁱ n ^t e ^r n ^a ^l a ^u ^d ⁱ t ^f u ⁿ ^c ^t i o ⁿ , ^t h ^e ^S ^e ^c ^r e ^t a ^r y ^o ^f ^t h ^e ^B ^o ^a ^r d ^o ^f D i r e ^c ^t o ^r s ^a ⁿ ^d ^t h ^e ^C ^h ^a ⁱ r m ^a ⁿ ^o ^f ^t h ^e ^A ^u ^d ⁱ t ^a ⁿ ^d C^o ⁿ ^t r o ^l ^C ^o ^m ^m ⁱ t t e ^e .

T ^h ^e ^C ^o ^d ^e ^o ^f ^C ^o ⁿ ^d ^u ^c ^t ^a ⁿ ^d ^t h ^e ^O ^p ^e ^r a ^t i n ^g ^R ^u ^l e ^s ^G ^o ^v ^e ^r n ⁱ n ^g ^t h ^e ^W ^h ⁱ s ^t l e ^ú b ^l o ^w ⁱ n ^g ^C ^h ^a ⁿ ⁿ ^e ^l a ^r^e ^a ^v ^a ⁱ l a ^b ^l^e ^o ⁿ ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ' s ^c ^o ^r^p ^o ^r^a ^t^e ^w ^e ^b ^s ⁱ t e . ^T h ^e ^s ^e ^d ^o ^c ^u ^m ^e ⁿ ^t s ^o ^u ^t l i n ^e ^t h ^e ^p ^r o ^c ^e ^d ^u ^r e ^s t o^b ^e ^f o ^l l o ^w ^e ^d ⁱ n ^h ^a ⁿ ^d ^l i n ^g ^a ⁿ ^y ⁱ n ^c ⁱ d ^e ⁿ ^t s ^r e ^p ^o ^r t e ^d .

· ^T ^r ^a ⁱ n ⁱ n ^g ^a ⁿ ^d ^r ^e ^f r ^e ^s ^h ^e ^r ^c ^o ^u ^r ^s ^e ^s ^f o ^r ^p ^e ^r ^s ^o ⁿ ⁿ ^e ^l ⁱ n ^v ^o ^l v ^e ^d ⁱ n ^p ^r ^e ^p ^a ^r ⁱ n ^g ^a ⁿ ^d ^r ^e ^v ⁱ e ^w ⁱ n ^g f i n ^a ⁿ ^c ⁱ a ^l ⁱ n ^f o ^r ^m ^a ^t i o ⁿ ^o ^r ^e ^v ^a ^l u ^a ^t i n ^g ^I ^C ^F ^R , ^w ^h ⁱ c ^h ^a ^d ^d ^r ^e ^s ^s , ^a ^t ^l e ^a ^s ^t , ^a ^c ^c ^o ^u ⁿ ^t i n ^g ^r ^u ^l e ^s , a^u ^d ⁱ t i n ^g , ⁱ n ^t e ^r ⁿ ^a ^l ^c ^o ⁿ ^t r ^o ^l ^a ⁿ ^d ^r ⁱ s ^k ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t .

C ^o ^r p ^o ^r a ^t e & ^F ⁱ n ^a ⁿ ^c ⁱ a ^l ^M ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t , ⁱ n ⁱ t s ^c ^a ^p ^a ^c ⁱ t y ^a ^s ^t h ^e ^p ^a ^r t y ^r e ^s ^p ^o ⁿ ^s ⁱ b ^l e ^f o ^r ^t h ^e ^d ^e ^s ⁱ g ⁿ , i m ^p ^l e ^m ^e ⁿ ^t a ^t i o ⁿ ^a ⁿ ^d ^o ^p ^e ^r a ^t i o ⁿ ^o ^f ^t h ^e ^I ^C ^F ^R ^s ^y ^s ^t e ^m , ⁱ s ^o ^b ^l i g ^e ^d ^t o ^m ^a ^k ^e ^s ^u ^r e ^t h ^a ^t ^a ^l l ^s ^t a ^f f i n ^v ^o ^l^v ^e ^d ⁱⁿ ^p ^r^e ^p ^a ^r i n ^g ^t^h ^e ^G ^r^o ^u ^p ' s ^f i n ^a ⁿ ^c ⁱ^a ^l ^s ^t^a ^t^e ^m ^e ⁿ ^t^s ^h ^a ^v ^e ^r^e ^c ^e ⁱ^v ^e ^d ^s ^u ^f f i c ⁱ^e ⁿ ^t ^a ⁿ ^d ^u ^p ^ú t o ^ú^d ^a ^t^e ^t r a ⁱⁿ ⁱⁿ ^g ^o ⁿ ^t^h ^e ^I ⁿ ^t^e ^rⁿ ^a ^t i o ⁿ ^a ^l ^F ⁱⁿ ^a ⁿ ^c ⁱ^a ^l ^R ^e ^p ^o ^r t i n ^g ^S ^t^a ⁿ ^d ^a ^r^d ^s ( I F ^R ^S ) ^a ⁿ ^d ^t^h ^e ⁱⁿ ^t^e ^rⁿ ^a ^l c ^o ⁿ ^t r o ^l ^o ^v ^e ^r ^f i n ^a ⁿ ^c ⁱ a ^l ^r e ^p ^o ^r t i n ^g ^p ^r i n ^c ⁱ p ^l e ^s . ^C ^o ^r p ^o ^r a ^t e & ^F ⁱ n ^a ⁿ ^c ⁱ a ^l ^M ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^d ⁱ r e ^c ^t l y v ^a ^l i d ^a ^t e ^s ^w ⁱ t h ^t h ^e ^a ^c ^c ^o ^u ⁿ ^t i n ^g ^e ^x ^p ^e ^r t , ^s ^u ^b ^c ^o ⁿ ^t r a ^c ^t e ^d ^f o ^r ^t h ^e ^p ^r e ^p ^a ^r a ^t i o ⁿ ^o ^f ^t h ^e ^f i n ^a ⁿ ^c ⁱ a ^l ú a ^c ^c ^o ^u ⁿ ^t i n ^g ⁱ n ^f o ^r m ^a ^t i o ⁿ , ^t h ^e ^t r a ⁱ n ⁱ n ^g ^a ⁿ ^d ^k ⁿ ^o ^w ^l e ^d ^g ^e ^o ^f ^t h ^e ^t e ^a ^m ^s ^a ^s ^s ⁱ g ⁿ ^e ^d ^t o ^t h ^e ^s ^e a ^c ^t i v ⁱ t i e ^s ⁱ n ^r e ^l a ^t i o ⁿ ^t o ^t h ^e ^r e ^g ^u ^l a ^t i o ⁿ ^s ^r e ^q ^u ⁱ r e ^d ⁱ n ^o ^r d ^e ^r ^t o ^e ⁿ ^s ^u ^r e ^t h ^e ^r e ^l i a ^b ⁱ l i t y ^o ^f ^t h ^e i n^f o ^r m ^a ^t i o ⁿ ^f i n ^a ⁿ ^c ⁱ a ^l .

D i r e ^c ^t o ^r ^C ^o ^r p ^o ^r a ^t e & ^C ^F ^O , ^r e ^s ^p ^o ⁿ ^s ⁱ b ^l e ^f o ^r ^I ^C ^F ^R , ^h ^a ^s ^e ^x ^t e ⁿ ^s ⁱ v ^e ^t r a ⁱ n ⁱ n ^g ⁱ n ^a ^c ^c ^o ^u ⁿ ^t i n ^g a ⁿ ^d ^f i n ^a ⁿ ^c ⁱ a ^l ^r e ^p ^o ^r t i n ^g ^a ^s ^a ^r e ^s ^u ^l t ^o ^f ^a ^u ^d ⁱ t ^e ^x ^p ^e ^r i e ⁿ ^c ^e ⁱ n ^a ^c ^c ^o ^u ⁿ ^t i n ^g ^a ⁿ ^d ^f i n ^a ⁿ ^c ⁱ a ^l m^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t .

D u ^r i n ^g ^t h ^e ^y ^e ^a ^r , ^t h ^e ^C ^o ^r p ^o ^r a ^t e & ^F ⁱ n ^a ⁿ ^c ⁱ a ^l ^M ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ⁱ s ⁱ n ^f o ^r m ^e ^d ^o ^f ^a ⁿ ^y ^c ^h ^a ⁿ ^g ^e ^s ^t h ^a ^t a ^f f e ^c ^t ^t h ^e ^p ^r e ^p ^a ^r a ^t i o ⁿ ^a ⁿ ^d ^s ^u ^p ^e ^r v ⁱ s ⁱ o ⁿ ^o ^f ^f i n ^a ⁿ ^c ⁱ a ^l ⁱ n ^f o ^r m ^a ^t i o ⁿ , ^b ^o ^t h ^t h ^r o ^u ^g ^h ^s ^u ^b ^s ^c ^r i p ^t i o ⁿ ^s t o ⁱ n ^f o ^r m ^a ^t i o ⁿ ^p ⁱ l l s ^a ⁿ ^d ⁿ ^e ^w ^s ^l e ^t t e ^r s ^f r o ^m ^e ^x ^t e ^r n ^a ^l ^s ^o ^u ^r c ^e ^s , ^a ^s ^w ^e ^l l ^a ^s ^t h ^r o ^u ^g ^h ^a ^t t e ⁿ ^d ^a ⁿ ^c ^e a ^t ^c ^o ⁿ ^f e ^r e ⁿ ^c ^e ^s ^a ⁿ ^d ^s ^e ^m ⁱ n ^a ^r s ^s ^p ^e ^c ⁱ f i c ^m ^a ^t e ^r i a ^l s ^a ⁿ ^d ^t e ^c ^h ⁿ ⁱ c ^a ^l ^u ^p ^d ^a ^t i n ^g ^o ^r g ^a ⁿ ⁱ ^z ^e ^d ^b ^y ^e ^x ^p ^e ^r t c^o ^m ^p ^a ⁿ ⁱ e ^s ⁱ n ^f i n ^a ⁿ ^c ⁱ a ^l ^r e ^g ^u ^l a ^t i o ⁿ ^s , ^a ^c ^c ^o ^u ⁿ ^t i n ^g ^a ⁿ ^d ^a ^u ^d ⁱ t i n ^g .

L ^a ^r ^E ^s ^p ^a ^ñ ^a ^h ^a ^s ^a ^r e ^l a ^t i v ^e ^l y ^s ^m ^a ^l l ^s ^t a ^f f ^w ^h ⁱ c ^h ⁱ s , ^h ^o ^w ^e ^v ^e ^r , ^b ^o ^l s ^t e ^r e ^d ^b ^y ^t h ^e ^a ^s ^s ⁱ s ^t a ⁿ ^c ^e p ^r o ^v ⁱ d ^e ^d ^b ^y ^e ^x ^t e ^r n ^a ^l ^a ^d ^v ⁱ s ^e ^r s ⁱ n ^c ^e ^r t a ⁱ n ^a ^r e ^a ^s , ^s ^p ^e ^c ⁱ f i c ^a ^l l y ⁱ n ^c ^l u ^d ⁱ n ^g , ^a ^s ^d ^e ^t a ⁱ l e ^d ⁱ n ^o ^t h ^e ^r s ^e ^c ^t i o ⁿ ^s , ^s ^o ^m ^e ^o ^f ^t h ^e ^a ^c ^t i v ⁱ t i e ^s ^r e ^l a ^t e ^d ^t o ^t h ^e ^f i n ^a ⁿ ^c ⁱ a ^l ^s ^t a ^t e ^m ^e ⁿ ^t ^p ^r e ^p ^a ^r a ^t i o ⁿ ^p ^r o ^c ^e ^s ^s ^a ⁿ ^d t h^e ⁱ m ^p ^l e ^m ^e ⁿ ^t a ^t i o ⁿ ^a ⁿ ^d ^r o ^l l o ^u ^t ^o ^f ^t h ^e ^I ^C ^F ^R ^s ^y ^s ^t e ^m .

L ^a ^r ^E ^s ^p ^a ^ñ ^a ^s ^e ^l e ^c ^t s ^t h ^e ^s ^e ^r v ⁱ c ^e ^o ^r g ^a ⁿ ⁱ s ^a ^t i o ⁿ ^s ^t o ^w ^h ⁱ c ^h ⁱ t ^o ^u ^t s ^o ^u ^r c ^e ^s ^t h ^e ^s ^e ^a ^c ^t i v ⁱ t i e ^s r i g ^o ^r o ^u ^s ^l y ^s ^o ^t h ^a ^t ⁱ t ^w ^o ^r k ^s ^w ⁱ t h ^s ^p ^e ^c ⁱ a ^l i s ^t ^f i r m ^s ^o ^f ^r e ⁿ ^o ^w ⁿ ^e ^d ^p ^r e ^s ^t i g ^e ^t h ^a ^t ^a ^r e ^c ^h ^o ^s ^e ⁿ ^f o ^r t h ^e ⁱ r ^q ^u ^a ^l i t y ^a ⁿ ^d ^e ^x ^p ^e ^r t i s ^e . ^C ^o ^r p ^o ^r a ^t e & ^F ⁱ n ^a ⁿ ^c ⁱ a ^l ^M ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^e ⁿ ^s ^u ^r e ^s ^t h ^a ^t ^t h ^e ^s ^e a ^d ^v ⁱ s ^o ^r s ⁱ n ^d ^e ^e ^d ^h ^a ^v ^e ^t h ^e ^e ^x ^p ^e ^r t i s ^e ^r e ^q ^u ⁱ r e ^d ^a ⁿ ^d ^c ^o ⁿ ^t i n ^u ^o ^u ^s ^l e ^a ^r n ⁱ n ^g ^p ^o ^l i c ⁱ e ^s ⁱ n ^r e ^s ^p ^e ^c ^t ^o ^f t h^e ^s ^e ^a ^r e ^a ^s ^o ^f ^e ^x ^p ^e ^r t i s ^e .

^I ⁿ ^a ^d ^d ⁱ t i o ⁿ , ^t h ^e ^I ⁿ ^t e ^r n ^a ^l ^A ^u ^d ⁱ t ^P ^l a ⁿ ^p ^r e ^p ^a ^r e ^d ^b ^y ^t h ^e ^I ⁿ ^t e ^r n ^a ^l ^A ^u ^d ⁱ t ^S ^e ^r v ⁱ c ^e ^a ⁿ ^d ^a ^p ^p ^r o ^v ^e ^d b ^y ^t h ^e ^A ^u ^d ⁱ t ^a ⁿ ^d ^C ^o ⁿ ^t r o ^l ^C ^o ^m ^m ⁱ t t e ^e ^o ^f ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^c ^o ⁿ ^t e ^m ^p ^l a ^t e ^s ^t h ^e ^t r a ⁱ n ⁱ n ^g ⁿ ^e ^e ^d ^e ^d ^b ^y t h^e ^p ^e ^o ^p ^l e ⁱ n ^v ^o ^l v ^e ^d ⁱ n ^t h ^e ^s ^e ^m ^a ^t t e ^r s .

F . 2 . ^F ⁱ n ^a ⁿ ^c ⁱ a ^l ^r ^e ^p ^o ^r ^t i n ^g ^r ⁱ s ^k ^a ^s ^s ^e ^s ^s ^m ^e ⁿ ^t

^R ^e ^p ^o ^r ^t ^a ^t ^l e ^a ^s ^t :

F . 2 . 1 . ^T ^h ^e ^m ^a ⁱ n ^c ^h ^a ^r ^a ^c ^t e ^r ⁱ s ^t i c ^s ^o ^f ^t h ^e ^r ⁱ s ^k ⁱ d ^e ⁿ ^t i f i c ^a ^t i o ⁿ ^p ^r ^o ^c ^e ^s ^s , ⁱ n ^c ^l u ^d ⁱ n ^g ^r ⁱ s ^k ^s ^o ^f e^r ^r ^o ^r ^o ^r ^f r ^a ^u ^d , ^s ^t a ^t i n ^g ^w ^h ^e ^t h ^e ^r :

· ^T ^h ^e ^p ^r ^o ^c ^e ^s ^s ^e ^x ⁱ^s ^t^s ^a ⁿ ^d ⁱ^s ^d ^o ^c ^u ^m ^e ⁿ ^t^e ^d .

T h ^e ^p ^r o ^c ^e ^s ^s ^o ^f ⁱ d ^e ⁿ ^t i f y ⁱ n ^g ^f i n ^a ⁿ ^c ⁱ a ^l ^r e ^p ^o ^r t i n ^g ^r i s ^k ^s , ⁱ n ^c ^l u ^d ⁱ n ^g ^r i s ^k ^s ^o ^f ^e ^r r o ^r ^o ^r ^f r a ^u ^d , ⁱ s o ⁿ ^e ^o ^f ^t^h ^e ^m ^o ^s ^t ⁱ^m ^p ^o ^r t a ⁿ ^t ^a ^s ^p ^e ^c ^t^s ^o ^f ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ' s ^I ^C ^F ^R ^m ^e ^t^h ^o ^d ^o ^l^o ^g ^y . ^T h ⁱ s ^p ^r o ^c ^e ^s ^s ⁱ s d ^o ^c ^u ^m ^e ⁿ ^t e ^d ⁱ n ^a ⁿ ⁱ n ^t e ^r n ^a ^l ^m ^e ^t h ^o ^d ^o ^l o ^g ^y ^g ^u ⁱ d ^e ^e ^x ^p ^l a ⁱ n ⁱ n ^g ^t h ^e ^I ^C ^F ^R ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^a ⁿ ^d ^a ^s ^s ^e ^s ^s ^m ^e ⁿ ^t ^p r o ^c ^e ^s ^s : " I n t e r n ^a ^l ^C ^o ⁿ t r o ^l ^o ^v ^e ^r ^F i n ^a ⁿ ^c i a ^l ^R ^e ^p ^o r t i n ^g ( I C ^F ^R ) ^M ^a ⁿ ^u ^a ^l ^o ^f ^G r u ^p ^o L ^a ^r ^E ^s ^p ^a ^ñ ^a ^R ^e ^a ^l ^E ^s ^t a ^t e ^S ^O ^C I M I " .

L ^a ^r ^E ^s ^p ^a ^ñ ^a ^h ^a ^s ^a ^s ^s ^e ^s ^s ^e ^d ^t h ^e ^r i s ^k ^a ^s ^s ^o ^c ⁱ a ^t e ^d ^w ⁱ t h ⁱ t s ^f i n ^a ⁿ ^c ⁱ a ^l ^a ^c ^c ^o ^u ⁿ ^t s . ^H ^a ^v ⁱ n ^g d ^e ^t e ^r m ⁱ n ^e ^d ^t h ^e ^l e ^v ^e ^l ^o ^f ^r i s ^k ^a ^s ^s ^o ^c ⁱ a ^t e ^d ^w ⁱ t h ^e ^a ^c ^h ^a ^c ^c ^o ^u ⁿ ^t , ^t h ^e ^m ^o ^s ^t ^s ⁱ g ⁿ ⁱ f i c ^a ⁿ ^t ^r i s ^k ^s ^w ^e ^r e r e ^l a ^t e ^d ^w ⁱ t h ^t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^p ^r o ^c ^e ^s ^s ^e ^s ^w ^h ⁱ c ^h ^g ^e ⁿ ^e ^r a ^t e ^a ⁿ ^d ^c ^o ⁿ ^t r o ^l ⁱ t s ^m ^a ^t e ^r i a ^l ^f i n ^a ⁿ ^c ⁱ a ^l i n ^f o ^r m ^a ^t i o ⁿ . ^T h ^e ^p ^u ^r p ^o ^s ^e ^o ^f ^t h ⁱ s ^m ^a ^p ^p ⁱ n ^g ^e ^x ^e ^r c ⁱ s ^e ⁱ s ^t o ⁱ d ^e ⁿ ^t i f y ^t h ^e ^p ^r o ^c ^e ^s ^s ^e ^s ^o ^r ^b ^u ^s ⁱ n ^e ^s ^s u ⁿ ⁱ t s ^w ⁱ t h ⁱ n ^t h ^e ^G ^r o ^u ^p ^o ^f ^g ^r e ^a ^t e ^s ^t ⁱ m ^p ^o ^r t a ⁿ ^c ^e ⁱ n ^t e ^r m ^s ^o ^f ^f i n ^a ⁿ ^c ⁱ a ^l ⁱ n ^f o ^r m ^a ^t i o ⁿ g^e ⁿ ^e ^r a ^t i o ⁿ .

L ⁱ k ^e ^w ⁱ s ^e , ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^h ^a ^s ^d ^o ^c ^u ^m ^e ⁿ ^t e ^d ^t h ^e ^m ^o ^s ^t ^s ⁱ g ⁿ ⁱ f i c ^a ⁿ ^t ^p ^r o ^c ^e ^s ^s ^e ^s ^t h ^r o ^u ^g ^h ^a ⁿ ^a ^r r a ^t i v ^e , a ^f l o ^w ^c ^h ^a ^r t ^a ⁿ ^d ^a ^m ^a ^t r i x ^o ^f ^r i s ^k ^s ^a ⁿ ^d ^c ^o ⁿ ^t r o ^l s . ^T h ⁱ s ^d ^o ^c ^u ^m ^e ⁿ ^t a ^t i o ⁿ ⁱ d ^e ⁿ ^t i f i e ^s ^a ⁿ ^d a ⁿ ^a ^l y ^z ^e ^s , ^a ^m ^o ⁿ ^g ^o ^t h ^e ^r s , ^t r a ⁿ ^s ^a ^c ^t i o ⁿ ^f l o ^w ^s , ^p ^o ^s ^s ⁱ b ^l e ^r i s ^k ^s ^o ^f ^e ^r r o ^r ^o ^r ^f r a ^u ^d ⁱ n ^t h ^e ^f i n ^a ⁿ ^c ⁱ a ^l i n ^f o ^r m ^a ^t i o ⁿ , ^a ^s ^w ^e ^l l ^a ^s ^t h ^o ^s ^e ^k ^e ^y ^c ^o ⁿ ^t r o ^l s ^e ^s ^t a ^b ^l i s ^h ^e ^d ⁱ n ^t h ^e ^C ^o ^m ^p ^a ⁿ ^y , ^w ^h ⁱ c ^h ^a ^d ^e ^q ^u ^a ^t e ^l y m ⁱ t i g ^a ^t e ^a ⁿ ^d ^w ⁱ t h ^t h ^e ⁿ ^e ^c ^e ^s ^s ^a ^r y ^a ⁿ ^t i c ⁱ p ^a ^t i o ⁿ ^t h ^e ^r i s ^k ^s ^a ^s ^s ^o ^c ⁱ a ^t e ^d ^w ⁱ t h ^t h ^e ^p ^r o ^c ^e ^s ^s . D u ^r i n ^g t h ^e ^y ^e ^a ^r ² ⁰ ¹ ⁹ , ^t h ⁱ s ^d ^o ^c ^u ^m ^e ⁿ ^t a ^t i o ⁿ ^h ^a ^s ^b ^e ^e ⁿ ^r e ^v ⁱ e ^w ^e ^d , ^u ^p ^d ^a ^t e ^d ^a ⁿ ^d ^c ^o ^m ^p ^l e ^t e ^d , ^o ^b ^t a ⁱ n ⁱ n ^g a ^m ^o ^r e ^e ^f f i c ⁱ e ⁿ ^t ^m ^o ^d ^e ^l , ^a ^d ^a ^p ^t e ^d ^t o ^t h ^e ^o ^b ^j ^e ^c ^t i v ^e ^s ^o ^f ^f i n ^a ⁿ ^c ⁱ a ^l ⁱ n ^f o ^r m ^a ^t i o ⁿ , ^a ⁿ ^d ^f o ^c ^u ^s ^e ^d ^o ⁿ m^a ^t e ^r i a ^l ^p ^r o ^c ^e ^s ^s ^e ^s , ^b ^o ^t h ^q ^u ^a ⁿ ^t i t a ^t i v ^e ^l y ^a ⁿ ^d ^q ^u ^a ^l i t a ^t i v ^e ^l y .

· ^T ^h ^e ^p ^r ^o ^c ^e ^s ^s ^c ^o ^v ^e ^r ^s ^a ^l^l ^f i n ^a ⁿ ^c ⁱ^a ^l ^r ^e ^p ^o ^r ^t i n ^g ^o ^b ^j ^e ^c ^t i v ^e ^s (^e ^x ⁱ^s ^t^e ⁿ ^c ^e ^a ⁿ ^d ^o ^c ^c ^u ^r ^r ^e ⁿ ^c ^e ; c ^o ^m ^p ^l e ^t e ⁿ ^e ^s ^s ; ^v ^a ^l u ^a ^t i o ⁿ ; ^p ^r ^e ^s ^e ⁿ ^t a ^t i o ⁿ , ^d ⁱ s ^c ^l o ^s ^u ^r ^e ^a ⁿ ^d ^c ^o ^m ^p ^a ^r ^a ^b ⁱ l i t y ; ^a ⁿ ^d ^r ⁱ g ^h ^t s ^a ⁿ ^d o^b ^l i g ^a ^t i o ⁿ ^s ) , ⁱ s ^u ^p ^d ^a ^t e ^d ^a ⁿ ^d ^w ⁱ t h ^w ^h ^a ^t ^f r ^e ^q ^u ^e ⁿ ^c ^y .

T h ^e ^d ^o ^c ^u ^m ^e ⁿ ^t a ^t i o ⁿ ^p ^r e ^p ^a ^r e ^d ^f o ^r ^e ^a ^c ^h ^o ^f ^t h ^e ^s ⁱ g ⁿ ⁱ f i c ^a ⁿ ^t ^p ^r o ^c ^e ^s ^s ^e ^s ⁱ n ^c ^l u ^d ^e ^s , ^a ^m ^o ⁿ ^g ^o ^t h ^e ^r e ^l e ^m ^e ⁿ ^t s , ^a ^m ^a ^t r i x ^o ^f ^r i s ^k ^s ^a ⁿ ^d ^c ^o ⁿ ^t r o ^l s . ^T h ⁱ s ^d ^o ^c ^u ^m ^e ⁿ ^t ^l i n ^k ^s ^t h ^e ^f i n ^a ⁿ ^c ⁱ a ^l ^r i s ^k ^s ^a ^t ^t h ^e p ^r o ^c ^e ^s ^s ^l e ^v ^e ^l ^w ⁱ t h ^t h ^e ^c ^o ⁿ ^t r o ^l ( ^s ) ^t h ^a ^t ^m ⁱ t i g ^a ^t e ^s ⁱ t . ^T h ^e ^s ^e ^m ^a ^t r i c ^e ^s ^a ^r e ^d ^e ^s ⁱ g ⁿ ^e ^d ^t o ^d ^e ^t a ⁱ l t h ^e ^r e ^l a ^t i o ⁿ ^s ^h ⁱ p ^s ^b ^e ^t w ^e ^e ⁿ ^r i s ^k ^s ^a ⁿ ^d ^c ^o ⁿ ^t r o ^l s ^a ^t ^t h ^e ^p ^r o ^c ^e ^s ^s ^l e ^v ^e ^l ^a ⁿ ^d ^t o ^f a ^c ⁱ l i t a ^t e ^t h ^e e ^v ^a ^l u ^a ^t i o ⁿ ^o ^f ^t h ^e ^e ^f f e ^c ^t i v ^e ⁿ ^e ^s ^s ^o ^f ^t h ^e ^d ^e ^s ⁱ g ⁿ ^o ^f ^t h ^e ⁱ m ^p ^l a ⁿ ^t e ^d ^s ^y ^s ^t e ^m , ^v ^e ^r i f y ⁱ n ^g ^t h ^a ^t ^a ^l l r i s ^k ^s ^h ^a ^v ^e ^b ^e ^e ⁿ ^m ⁱ t i g ^a ^t e ^d ^b ^y ^t h ^e ^c ^o ⁿ ^t r o ^l s ^a ^s ^s ^o ^c ⁱ a ^t e ^d ^w ⁱ t h ^t h ^e ^m . ^A ^m ^o ⁿ ^g ^t h ^e ⁱ n ^f o ^r m ^a ^t i o ⁿ t h ^a ^t ^t h ^e ^m ^a ^t r i c ^e ^s ⁱ n ^c ^o ^r p ^o ^r a ^t e , ^t h ^e ^y ⁱ n ^c ^l u ^d ^e ^t h ^e ^a ^s ^s ^e ^r t i o ⁿ ^s ^o ^r ^s ^p ^e ^c ⁱ f i c ^c ^o ⁿ ^t r o ^l ^o ^b ^j ^e ^c ^t i v ^e ^s ⁱ n r e ^l a ^t i o ⁿ ^t o ^t h ^e ⁱ d ^e ⁿ ^t i f i e ^d ^r i s ^k : ⁱ n ^t e ^g ^r i t y , ^e ^x ⁱ s ^t e ⁿ ^c ^e ^a ⁿ ^d ^o ^c ^c ^u ^r r e ⁿ ^c ^e , ^r i g ^h ^t s ^a ⁿ ^d ^o ^b ^l i g ^a ^t i o ⁿ ^s , m^e ^a ^s ^u ^r e ^m ^e ⁿ ^t ^a ⁿ ^d ^v ^a ^l u ^a ^t i o ⁿ , ^p ^r e ^s ^e ⁿ ^t a ^t i o ⁿ .

· ^A ^s ^p ^e ^c ⁱ f i c ^p ^r ^o ^c ^e ^s ^s ⁱ^s ⁱⁿ ^p ^l^a ^c ^e ^t^o ^d ^e ^f i n ^e ^t^h ^e ^s ^c ^o ^p ^e ^o ^f ^c ^o ⁿ ^s ^o ^l i d ^a ^t i o ⁿ , ^w ⁱ t h ^r ^e ^f^e ^r ^e ⁿ ^c ^e ^t^o t h ^e ^p ^o ^s ^s ⁱ b ^l e ^e ^x ⁱ s ^t e ⁿ ^c ^e ^o ^f ^c ^o ^m ^p ^l e ^x ^c ^o ^r ^p ^o ^r ^a ^t e ^s ^t r ^u ^c ^t u ^r ^e ^s , ^s ^p ^e ^c ⁱ a ^l ^p ^u ^r ^p ^o ^s ^e ^v ^e ^h ⁱ c ^l e ^s , h^o ^l d ⁱ n ^g ^c ^o ^m ^p ^a ⁿ ⁱ e ^s , ^e ^t c .

^A r t i c l e ⁵ ^o ^f t h ^e ^B ^o ^a r d ^R ^e ^g ^u l a t i o ⁿ ^s ^s t a t e ^s t h ^a ^t t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o r s " r e ^s ^e r v ^e ^s t h ^e ^p ^o ^w ^e ^r t o ^d ^e ^f i n ^e t h ^e ^s t r u ^c t u r e ^o ^f t h ^e ^c ^o r p ^o r a t e ^g r o ^u ^p " .

A ^g ^a ⁱ n ^s ^t ^t h ⁱ s ^b ^a ^c ^k ^d ^r o ^p , ^e ^a ^c ^h ^y ^e ^a ^r , ^C ^o ^r p ^o ^r a ^t e & ^F ⁱ n ^a ⁿ ^c ⁱ a ^l ^M ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t , ^w ⁱ t h ^t h ^e c ^o ^l l a ^b ^o ^r a ^t i o ⁿ ^o ^f ^t h ^e ^L ^e ^g ^a ^l D e ^p ^a ^r t m ^e ⁿ ^t , ^t a ^k ^e ^s ^r e ^s ^p ^o ⁿ ^s ⁱ b ⁱ l i t y ^f o ^r ^c ^o ⁿ ^t i n ^u ^a ^l l y ^a ⁿ ^a ^l y ^s ⁱ n ^g ^t h ^e c ^o ^m ^p ^a ⁿ ⁱ e ^s ^a ^d ^d ^e ^d ^t o ^t h ^e ^s ^c ^o ^p ^e ^o ^f ^c ^o ⁿ ^s ^o ^l i d ^a ^t i o ⁿ ^a ⁿ ^d ⁿ ^o ^t i f y ⁱ n ^g ^a ⁿ ^y ^s ^u ^c ^h ^a ^d ^d ⁱ t i o ⁿ ^s ^t o ^t h ^e A^u ^d ⁱ t ^a ⁿ ^d ^C ^o ⁿ ^t r o ^l ^C ^o ^m ^m ⁱ t t e ^e , ^e ⁿ ^a ^b ^l i n ^g ^k ⁿ ^o ^w ^l e ^d ^g ^e ^o ^f ^t h ^e ^c ^o ^m ^p ^a ⁿ ⁱ e ^s ⁱ n ^c ^l u ^d ^e ^d ^a ^t ^a ^l l ^t i m ^e ^s .

O ⁿ ^e ^o ^f ^t^h ^e ^A ^u ^d ⁱ^t ^a ⁿ ^d ^C ^o ⁿ ^t r o ^l ^C ^o ^m ^m ⁱ t t e ^e ' s ^d ^u ^t i e ^s ⁱ^s ^t^o ^s ^u ^p ^e ^r^v ⁱ^s ^e ^t^h ^e ^p ^r^o ^c ^e ^s ^s ^o ^f ^d ^r^a ^w ⁱⁿ ^g u ^p ^a ⁿ ^d ^p ^r e ^s ^e ⁿ ^t i n ^g ^t h ^e ^f i n ^a ⁿ ^c ⁱ a ^l ⁱ n ^f o ^r m ^a ^t i o ⁿ ^t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^h ^a ^s ^t o ^d ⁱ s ^c ^l o ^s ^e . ^S ^p ^e ^c ⁱ f i c ^a ^l l y , t h ^e ^A ^u ^d ⁱ^t ^a ⁿ ^d ^C ^o ⁿ ^t r o ^l ^C ^o ^m ^m ⁱ t t e ^e ^r^e ^v ⁱ^e ^w ^s ^t^h ^e ^G ^r^o ^u ^p ' s ^c ^o ⁿ ^s ^o ^l i d ^a ^t^e ^d ^f i n ^a ⁿ ^c ⁱ^a ^l ⁱⁿ ^f^o ^r^m ^a ^t i o ⁿ oⁿ ^t h ^e ^o ^c ^c ^a ^s ⁱ o ⁿ ^o ^f ^e ^a ^c ^h ^q ^u ^a ^r t e ^r l y ^c ^l o ^s ^e .

· ^T ^h ^e ^p ^r ^o ^c ^e ^s ^s ^a ^d ^d ^r ^e ^s ^s ^e ^s ^o ^t h ^e ^r ^t y ^p ^e ^s ^o ^f ^r ⁱ s ^k ( o ^p ^e ^r ^a ^t i o ⁿ ^a ^l , ^t e ^c ^h ⁿ ^o ^l o ^g ⁱ c ^a ^l , ^f i n ^a ⁿ ^c ⁱ a ^l , ^l e ^g ^a ^l , r ^e ^p ^u ^t a ^t i o ⁿ ^a ^l , ^e ⁿ ^v ⁱ r ^o ⁿ ^m ^e ⁿ ^t a ^l , ^e ^t c . ) ⁱ n ^s ^o ^f a ^r ^a ^s ^t h ^e ^y ^m ^a ^y ^a ^f f e ^c ^t ^t h ^e ^f i n ^a ⁿ ^c ⁱ a ^l s^t a ^t e ^m ^e ⁿ ^t s .

T h ^e ^p ^r o ^c ^e ^s ^s ^o ^f ⁱ d ^e ⁿ ^t i f y ⁱ n ^g ^t h ^e ^r i s ^k ^o ^f ^f i n ^a ⁿ ^c ⁱ a ^l ^r e ^p ^o ^r t i n ^g ^e ^r r o ^r ^t a ^k ^e ^s ⁱ n ^t o ^c ^o ⁿ ^s ⁱ d ^e ^r a ^t i o ⁿ ^t h ^e i m ^p ^a ^c ^t ^o ^f ^a ^l l ^c ^l a ^s ^s ^e ^s ^o ^f ^r i s ^k ^s , ^w ^h ^e ^t h ^e ^r ^o ^p ^e ^r a ^t i o ⁿ ^a ^l , ^t e ^c ^h ⁿ ^o ^l o ^g ⁱ c ^a ^l , ^f i n ^a ⁿ ^c ⁱ a ^l , ^l e ^g ^a ^l , r e ^p ^u ^t a ^t i o ⁿ ^a ^l , ^e ⁿ ^v ⁱ r o ⁿ ^m ^e ⁿ ^t a ^l , ^o ^r ^t a ^x ^ú r e ^l a ^t e ^d , ⁱ n ^s ^o ^f a ^r ^a ^s ^t h ^e ^y ^c ^o ^u ^l d ^a ^f f e ^c ^t ^t h ^e ^q ^u ^a ^l i t y ^a ⁿ ^d r e^l i a ^b ⁱ l i t y ^o ^f ^t^h ^e ^C ^o ^m ^p ^a ⁿ ^y ' s ^f i n ^a ⁿ ^c ⁱ^a ^l ⁱⁿ ^f^o ^r^m ^a ^t i o ⁿ .

A^d ^d ⁱ t i o ⁿ ^a ^l l y , ^t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^h ^a ^s ^a ^R ⁱ s ^k ^C ^o ⁿ ^t r o ^l ^a ⁿ ^d ^M ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^P ^o ^l i c ^y ^w ^h ⁱ c ^h :

^D e ^s ^c ^r i b ^e ^s ^a ⁿ ^d ^a ⁿ ^a ^l y ^s ^e ^s ^t h ^e ^c ^o ^m ^p ^o ⁿ ^e ⁿ ^t s ^a ⁿ ^d ^a ^c ^t i v ⁱ t i e ^s ^o ^f ^t h ^e ^r i s ^k ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t p^r o ^c ^e ^s ^s ^p ^e ^r ^s ^e :
^D e ^f i n ^e ^s ^t h ^e ^o ^r g ^a ⁿ ⁱ s ^a ^t i o ⁿ ^a ^l ^a ^p ^p ^r o ^a ^c ^h ^a ⁿ ^d ^t h ^e ^r o ^l e ^s ^a ⁿ ^d ^d ^u ^t i e ^s ⁿ ^e ^e ^d ^e ^d ^f r o ^m ^a ⁿ eⁿ ^t e ^r p ^r i s ^e ^r i s ^k ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ( ^E ^R ^M ) ^s ^t a ⁿ ^d ^p ^o ⁱ n ^t .
^D e^f i n ^e ^s ^t h ^e ^m ^o ^d ^e ^l ^f o ^r ^m ^o ⁿ ⁱ t o ^r i n ^g ( ⁱ n ^f o ^r m ^a ^t i o ⁿ ^a ⁿ ^d ^r e ^p ^o ^r t i n ^g ) ^E ^R ^M ^a ^c ^t i v ⁱ t i e ^s .
O^u ^t l i n ^e ^s ^t h ^e ^c ^r i t e ^r i a ^f o ^r ^u ^p ^d ^a ^t i n ^g ^t h ^e ^E ^R ^M ^s ^y ^s ^t e ^m .

· ^W^h ⁱ c ^h ^o ^f ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ' s ^g ^o ^v ^e ^r ⁿ ⁱ n ^g ^b ^o ^d ⁱ e ^s ⁱ s ^r ^e ^s ^p ^o ⁿ ^s ⁱ b ^l e ^f ^o ^r ^o ^v ^e ^r ^s ^e ^e ⁱ n ^g ^t h ^e ^p ^r ^o ^c ^e ^s ^s .

A ^s ^e ^s ^t a ^b ^l i s ^h ^e ^d ^b ^y ^t h ^e ⁱ n ^t e ^r n ^a ^l ^r e ^g ^u ^l a ^t i o ⁿ ^s ( ^a ^r t i c ^l e ⁴ ² ^o ^f ^t h ^e ^S ^o ^c ⁱ a ^l ^S ^t a ^t u ^t e ^s ^o ^f ^L ^a ^r ^E ^s ^p ^a ^ñ ^a , a ^r t i c ^l e ¹ 4 ^o ^f ^t h ^e ^R ^e ^g ^u ^l a ^t i o ⁿ ^s ^o ^f ^t h ^e ^B ^o ^a ^r d ^o ^f D i r e ^c ^t o ^r s , ^a ⁿ ^d ^a ^r t i c ^l e ⁵ ^o ^f ^t h ^e ^R ^e ^g ^u ^l a ^t i o ⁿ ^s ^o ^f t h ^e ^A ^u ^d ⁱ t ^a ⁿ ^d ^C ^o ⁿ ^t r o ^l ^C ^o ^m ^m ⁱ t t e ^e ) , ^t h ^e ^A ^u ^d ⁱ t ^a ⁿ ^d ^C ^o ⁿ ^t r o ^l ^C ^o ^m ^m ⁱ t t e ^e ⁱ s ^r e ^s ^p ^o ⁿ ^s ⁱ b ^l e ^f o ^r ^S ^u ^p ^e ^r v ⁱ s ^e ^t h ^e ^e ^f f e ^c ^t i v ^e ⁿ ^e ^s ^s ^o ^f ^t h ^e ⁱ n ^t e ^r n ^a ^l ^c ^o ⁿ ^t r o ^l ^o ^f ^t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^a ⁿ ^d ^o ^f ^t h ^e ^r i s ^k m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^s ^y ^s ^t e ^m ^s , ⁱ n ^c ^l u ^d ⁱ n ^g ^f i s ^c ^a ^l ^o ⁿ ^e ^s , ^a ⁿ ^d ^s ^p ^e ^c ⁱ f i c ^a ^l l y ^o ^f ^t h ^e ^I ⁿ ^t e ^r n ^a ^l ^F ⁱ n ^a ⁿ ^c ⁱ a ^l ^I ⁿ ^f o ^r m ^a ^t i o ⁿ ^C ^o ⁿ ^t r o ^l ^S ^y ^s ^t e ^m .

F . 3 . C^o ⁿ ^t r ^o ^l ^a ^c ^t i v ⁱ t i e ^s

^I ⁿ ^d ⁱ c ^a ^t e ^t h ^e ^e ^x ⁱ s ^t e ⁿ ^c ^e ^o ^f ^a ^t ^l e ^a ^s ^t ^t h ^e ^f o ^l l o ^w ⁱ n ^g ^c ^o ^m ^p ^o ⁿ ^e ⁿ ^t s ^a ⁿ ^d ^s ^p ^e ^c ⁱ f y ^t h ^e ⁱ r ^m ^a ⁱ n c^h ^a ^r ^a ^c ^t e ^r ⁱ s ^t i c ^s :

F . 3 . 1 . ^P r ^o ^c ^e ^d ^u ^r ^e ^s ^f o ^r ^r ^e ^v ⁱ e ^w ⁱ n ^g ^a ⁿ ^d ^a ^u ^t h ^o ^r ⁱ s ⁱ n ^g ^f i n ^a ⁿ ^c ⁱ a ^l ⁱ n ^f o ^r ^m ^a ^t i o ⁿ ^a ⁿ ^d ^t h ^e d ^e ^s ^c ^r ⁱ p ^t i o ⁿ ^o ^f ^t h ^e ^I ^C ^F ^R ^t o ^b ^e ^d ⁱ s ^c ^l o ^s ^e ^d ^t o ^t h ^e ^m ^a ^r ^k ^e ^t , ⁱ n ^d ⁱ c ^a ^t i n ^g ^t h ^e ^c ^o ^r ^r ^e ^s ^p ^o ⁿ ^d ⁱ n ^g l i n ^e ^s ^o ^f ^r ^e ^s ^p ^o ⁿ ^s ⁱ b ⁱ l i t y , ^a ^s ^w ^e ^l l ^a ^s ^d ^o ^c ^u ^m ^e ⁿ ^t a ^t i o ⁿ ^a ⁿ ^d ^f l o ^w ^c ^h ^a ^r ^t s ^o ^f ^a ^c ^t i v ⁱ t i e ^s ^a ⁿ ^d c ^o ⁿ ^t r ^o ^l s ( i n ^c ^l u ^d ⁱ n ^g ^t h ^o ^s ^e ^a ^d ^d ^r ^e ^s ^s ⁱ n ^g ^t h ^e ^r ⁱ s ^k ^o ^f ^f r ^a ^u ^d ) ^f o ^r ^e ^a ^c ^h ^t y ^p ^e ^o ^f ^t r ^a ⁿ ^s ^a ^c ^t i o ⁿ t h ^a ^t ^m ^a ^y ^m ^a ^t e ^r ⁱ a ^l l y ^a ^f f e ^c ^t ^t h ^e ^f i n ^a ⁿ ^c ⁱ a ^l ^s ^t a ^t e ^m ^e ⁿ ^t s , ⁱ n ^c ^l u ^d ⁱ n ^g ^p ^r ^o ^c ^e ^d ^u ^r ^e ^s ^f o ^r ^t h ^e c ^l o ^s ⁱ n ^g ^o ^f ^a ^c ^c ^o ^u ⁿ ^t s ^a ⁿ ^d ^f o ^r ^t h ^e ^s ^e ^p ^a ^r ^a ^t e ^r ^e ^v ⁱ e ^w ^o ^f ^c ^r ⁱ t i c ^a ^l ^j ^u ^d ^g ^e ^m ^e ⁿ ^t s , ^e ^s ^t i m ^a ^t e ^s , v^a ^l u ^a ^t i o ⁿ ^s ^a ⁿ ^d ^p ^r ^o ^j ^e ^c ^t i o ⁿ ^s .

^A ^s ^s t i p ^u l a t e ^d i n ^a r t i c l e ⁴ ⁰ . 3 ^o ^f t h ^e ^B ^o ^a r d ^R ^e ^g ^u l a t i o ⁿ ^s , t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o r s ^e ^s t a ^b l i s ^h ^e ^s " t h ^e ^p ^r ^e ^c i s ^e ^m ^e a s ^u ^r e s ⁿ ^e ^e ^d ^e ^d t o ^e n s ^u ^r ^e t h ^a ^t t h ^e ^h ^a ^f ^l ^ß ^y ^e ^a ^r l y ^a ⁿ ^d ^q ^u ^a ^r t e ^r l y ^f i n ^a ⁿ ^c i a ^l i n f ^o ^r ^m ^a t i o ⁿ , ^a ⁿ ^d ^a n y ^o t h ^e ^r i n f ^o ^r ^m ^a t i o ⁿ t h ^a ^t ^w ^a ^r ^r ^a ⁿ t s ^p ^u ^b l i c ^d i s ^c l o s ^u ^r ^e i n ^k ^e e p i n g ^w i t h ^p ^r ^u ^d ^e ⁿ ^t ^s t r ^a t e g ^y , i s ^p ^r e p ^a ^r ^e ^d a p ^p l y i n g t h ^e ^s ^a ^m ^e ^p ^r i n ^c i p l e s , ^c ^r i t e ^r i a ^a ⁿ ^d ^p ^r o f e s ^s i o ⁿ ^a l p ^r ^a ^c t i c e s a s ^a ^r ^e u s ^e ^d t o ^d ^r ^a ^w u p t h ^e ^a ⁿ ⁿ ^u ^a l f i n ^a ⁿ ^c i a ^l ^s t a t e ^m ^e ⁿ t s ^s ^o t h ^a ^t t h ^e i n t e ^r i m i n f ^o ^r ^m ^a t i o ⁿ i s a s ^r ^e l i a ^b l e a s t h ^e ^a ⁿ ⁿ ^u ^a ^l ^d i s ^c l o s ^u ^r e s " .

T h ^e ^B ^o ^a ^r d ^o ^f D i r e ^c ^t o ^r s ⁱ s ^u ^l t i m ^a ^t e ^l y ^r e ^s ^p ^o ⁿ ^s ⁱ b ^l e ^f o ^r ^t h ^e ^e ^x ⁱ s ^t e ⁿ ^c ^e ^a ⁿ ^d ^m ^a ⁱ n ^t e ⁿ ^a ⁿ ^c ^e ^o ^f ^a ⁿ a ^p ^p ^r o ^p ^r i a ^t e ^a ⁿ ^d ^e ^f f e ^c ^t i v ^e ^I ^C ^F ^R ^s ^y ^s ^t e ^m ^a ⁿ ^d ^h ^a ^s ^a ^u ^t h ^o ^r i t y ^o ^v ^e ^r ^t h ^e ^f i n ^a ⁿ ^c ⁱ a ^l ^r e ^p ^o ^r t i n ^g ^f u ⁿ ^c ^t i o ⁿ . ^I ^t ^a ^l s ^o ^a ^p ^p ^r o ^v ^e ^s ^t h ^e ^R ⁱ s ^k ^C ^o ⁿ ^t r o ^l ^a ⁿ ^d ^M ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^P ^o ^l i c ^y ^a ⁿ ^d ^t h ^e ^p ^e ^r i o ^d ⁱ c ^m ^o ⁿ ⁱ t o ^r i n ^g ^o ^f ^t h ^e i n ^t e ^r n ^a ^l ⁱ n ^f o ^r m ^a ^t i o ⁿ ^a ⁿ ^d ^c ^o ⁿ ^t r o ^l ^s ^y ^s ^t e ^m ^s ^e ^s ^t a ^b ^l i s ^h ^e ^d ^b ^y ^L ^a ^r ^E ^s ^p ^a ^ñ ^a . ^I ⁿ ^o ^r d ^e ^r ^t o ^c ^a ^r r y ^o ^u ^t ^t h ^e ^s ^e f u ⁿ ^c ^t i o ⁿ ^s , ⁱ t ^h ^a ^s ^t h ^e ^s ^u ^p ^p ^o ^r t ^o ^f ^t h ^e ^A ^u ^d ⁱ t ^a ⁿ ^d ^C ^o ⁿ ^t r o ^l ^C ^o ^m ^m ⁱ t t e ^e ^w ^h ^o , ^w ⁱ t h ^t h ^e ^c ^o ^l l a ^b ^o ^r a ^t i o ⁿ ^o ^f t h ^e ^U ^P ^S , ⁱ^s ^e ⁿ ^t r u ^s ^t^e ^d ^w ⁱ t h ^t^h ^e ^f^u ⁿ ^c ^t i o ⁿ ^o ^f ^s ^u ^p ^e ^r^v ⁱ^s ⁱⁿ ^g ^a ⁿ ^d ^e ^v ^a ^l^u ^a ^t i n ^g ^t^h ^e ^G ^r^o ^u ^p ' s ^I ^C ^F ^R . ^T h ^e B ^o ^a ^r d ^o ^f D i r e ^c ^t o ^r s ^a ^l s ^o ^h ^a ^s ^t h ^e ^s ^u ^p ^p ^o ^r t ^o ^f ^t h ^o ^s ^e ^r e ^s ^p ^o ⁿ ^s ⁱ b ^l e ^f o ^r ^t h ^e ^p ^r o ^c ^e ^s ^s ^e ^s ^a ⁿ ^d ^t h ^e ^C ^o ^r p ^o ^r a ^t e & ^F ⁱ n ^a ⁿ ^c ⁱ a ^l ^M ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^a ^s ^r e ^s ^p ^o ⁿ ^s ⁱ b ^l e ^f o ^r ^e ⁿ ^s ^u ^r i n ^g ^t h ^a ^t ⁱ t ⁱ s ^a ^d ^e ^q ^u ^a ^t e ^a ⁿ ^d ^e ^f f e ^c ^t i v ^e .

L ^a ^r ^E ^s ^p ^a ^ñ ^a ^p ^u ^b ^l i c ^l y ^d ⁱ s ^c ^l o ^s ^e ^s ^f i n ^a ⁿ ^c ⁱ a ^l ⁱ n ^f o ^r m ^a ^t i o ⁿ ^q ^u ^a ^r t e ^r l y . ^T ^h ⁱ s ⁱ n ^f o ^r m ^a ^t i o ⁿ ⁱ s ^p ^r e ^p ^a ^r e ^d ^b ^y a ^s ^p ^e ^c ⁱ a ^l i s ^t ^e ^x ^t e ^r n ^a ^l ^f i r m ^a ⁿ ^d ^r e ^v ⁱ e ^w ^e ^d ^b ^y ^C ^o ^r p ^o ^r a ^t e & ^F ⁱ n ^a ⁿ ^c ⁱ a ^l ^M ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t . ^T ^h ^e ⁱ n ^f o ^r m ^a ^t i o ⁿ i s^s ^u ^b ^s ^e ^q ^u ^e ⁿ ^t l y ^s ^e ⁿ ^t ^t o ^t h ^e ^A ^u ^d ⁱ t ^a ⁿ ^d ^C ^o ⁿ ^t r o ^l ^C ^o ^m ^m ⁱ t t e ^e ^f o ^r ^r e ^v ⁱ e ^w .

T h ⁱ s ^p ^r o ^c ^e ^s ^s ⁱ s ^d ^o ^c ^u ^m ^e ⁿ ^t e ^d ⁱ n ^a ⁿ ⁱ n ^t e ^r n ^a ^l ^m ^e ^t h ^o ^d ^o ^l o ^g ^y ^g ^u ⁱ d ^e ^e ^x ^p ^l a ⁱ n ⁱ n ^g ^t h ^e ^I ^C ^F ^R ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^a ⁿ ^d ^a ^s ^s ^e ^s ^s ^m ^e ⁿ ^t ^p r o ^c ^e ^s ^s : " I n t e r n ^a ^l ^C ^o ⁿ t r o ^l ^o ^v ^e ^r ^F i n ^a ⁿ ^c i a ^l ^R ^e ^p ^o r t i n ^g ( I C ^F ^R ) ^M ^a ⁿ ^u ^a ^l ^o ^f ^G r u ^p ^o ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^R ^e ^a ^l ^E ^s t a t e ^S ^O ^C I M I " .

T h ^e ^C ^o ^m ^p ^a ⁿ ^y ' s ^I ^C ^F ^R ^p ^r i n ^c ⁱ^p ^l^e ^s , ^d ^e ^f i n ⁱ t i o ⁿ ^s ^a ⁿ ^d ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^c ^r i t e ^r i a ^a ^r^e ^d ^o ^c ^u ^m ^e ⁿ ^t^e ^d ⁱⁿ ⁱ t s ^I ^C ^F ^R ^M ^a ⁿ ^u ^a ^l .

^I ⁿ ^r^e ^c ^e ⁿ ^t ^y ^e ^a ^r^s , ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^h ^a ^s ^d ^o ^c ^u ^m ^e ⁿ ^t^e ^d ^t^h ^e ^o ^r^g ^a ⁿ ⁱ^s ^a ^t i o ⁿ ' s ^G ^e ⁿ ^e ^r^a ^l ^C ^o ⁿ ^t r o ^l^s ^a ⁿ ^d ^t^h ^e ^m ^o ^s ^t sⁱ g ⁿ ⁱ f i c ^a ⁿ ^t ^p ^r o ^c ^e ^s ^s ^e ^s , ^s ^p ^e ^c ⁱ f i c ^a ^l l y ^t h ^o ^s ^e ⁱ t e ^m ⁱ s ^e ^d ^b ^e ^l o ^w :

· C^l o ^s ⁱ n ^g ^o ^f ^F ⁱ n ^a ⁿ ^c ⁱ a ^l ^S ^t a ^t e ^m ^e ⁿ ^t s ^a ⁿ ^d ^C ^o ⁿ ^s ^o ^l i d ^a ^t i o ⁿ
· A^s ^s ^e ^t ^v ^a ^l u ^a ^t i o ⁿ ^s
· R^e ⁿ ^t a ^l ⁱ n ^c ^o ^m ^e
· ^I ⁿ ^v ^e ^s ^t m ^e ⁿ ^t s
· C^a ^s ^h ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t
· ^F ⁱ n ^a ⁿ ^c ⁱ n ^g
· M^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^o ^f ^a ^c ^c ^o ^u ⁿ ^t s ^p ^a ^y ^a ^b ^l e ^ú ^P ^r o ^m ^o ^t i o ⁿ ^p ^r o ^j ^e ^c ^t s
· M^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^o ^f ^a ^c ^c ^o ^u ⁿ ^t s ^p ^a ^y ^a ^b ^l e ^ú ^M ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^f e ^e ^s
· D i s^p ^o ^s ^a ^l s

^I ⁿ ^a ^d ^d ⁱ t i o ⁿ ^t o ^t h ^e ^I ^C ^F ^R ^o ^v ^e ^r s ⁱ g ^h ^t ^p ^r o ^c ^e ^s ^s ( ^t a ^s ^k ^e ^d ^t o ^t h ^e ^A ^u ^d ⁱ t ^a ⁿ ^d ^C ^o ⁿ ^t r o ^l ^C ^o ^m ^m ⁱ t t e ^e ^w ⁱ t h ^t h ^e a ^s ^s ⁱ s ^t a ⁿ ^c ^e ^o ^f ^t h ^e ^I ⁿ ^t e ^r n ^a ^l ^A ^u ^d ⁱ t ^S ^e ^r v ⁱ c ^e ) , ^t h ^e ^I ^C ^F ^R ^M ^a ⁿ ^u ^a ^l ^o ^f ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^c ^o ⁿ ^t e ^m ^p ^l a ^t e ^s ^t h ^e p ^e ^r f o ^r m ^a ⁿ ^c ^e ^o ^f ^a ⁿ ^a ⁿ ⁿ ^u ^a ^l ⁱ n ^t e ^r n ^a ^l ^e ^v ^a ^l u ^a ^t i o ⁿ ⁱ n ^t e ⁿ ^d ^e ^d ^t o ^e ⁿ ^s ^u ^r e ^t h ^a ^t ^t h ^e ^I ^C ^F ^R ^c ^o ⁿ ^t r o ^l s ^r e ^m ^a ⁱ n v ^a ^l i d , ^w ^e ^l l ú d ^e ^s ⁱ g ⁿ ^e ^d ^a ⁿ ^d ^c ^a ^p ^a ^b ^l e ^o ^f ^d ^e ^l i v ^e ^r i n ^g ^t h ^e ⁱ n ^t e ⁿ ^d ^e ^d ^o ^b ^j ^e ^c ^t i v ^e ^s . D u ^r i n ^g ^f i s ^c ^a ^l ^y ^e ^a ^r ² ⁰ ¹ ⁹ , t h ^e ^C ^o ^r p ^o ^r a ^t e & ^F ⁱ n ^a ⁿ ^c ⁱ a ^l ^M ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^h ^a ^s ^c ^o ⁿ ^t i n ^u ^e ^d ^w ⁱ t h ^t h ^e ^p ^r o ^c ^e ^s ^s ^o ^f ^p ^r o ^g ^r e ^s ^s ⁱ v ^e i m ^p ^l e ^m ^e ⁿ ^t a ^t i o ⁿ ^o ^f ^t h ^e ^p ^o ^l i c ⁱ e ^s ^a ⁿ ^d ^p ^r o ^c ^e ^d ^u ^r e ^s ⁱ n ^c ^l u ^d ^e ^d ⁱ n ^t h ^e ^I ^C ^F ^R ^M ^a ⁿ ^u ^a ^l ^a ⁿ ^d ^h ^a ^s ^r e ^v ⁱ e ^w ^e ^d a ⁿ ^d ^u ^p ^d ^a ^t e ^d ^t h ^e ^d ^o ^c ^u ^m ^e ⁿ ^t a ^t i o ⁿ ^r e ^l a ^t e ^d ^t o ^s ⁱ g ⁿ ⁱ f i c ^a ⁿ ^t ^p ^r o ^c ^e ^s ^s ^e ^s ^w ⁱ t h ^t h ^e ^o ^b ^j ^e ^c ^t i v ^e ^o ^f ^a ^c ^h ⁱ e ^v ⁱ n ^g a ^s ^y ^s ^t e ^m ^o ^f ⁱ n ^t e ^r n ^a ^l ^c ^o ⁿ ^t r o ^l ^m ^o ^r e ^e ^f f i c ⁱ e ⁿ ^t ^a ⁿ ^d ^a ^d ^a ^p ^t e ^d ^t o ^t h ^e ^o ^b ^j ^e ^c ^t i v ^e ^s ^o ^f ^f i n ^a ⁿ ^c ⁱ a ^l ⁱ n ^f o ^r m ^a ^t i o ⁿ , w^h ⁱ c ^h ^c ^o ^v ^e ^r s ^a ^l l ^m ^a ^t e ^r i a ^l ^p ^r o ^c ^e ^s ^s ^e ^s , ^b ^o ^t h ^q ^u ^a ⁿ ^t i t a ^t i v ^e ^l y ^a ⁿ ^d ^q ^u ^a ^l i t a ^t i v ^e ^l y .

F . 3 . 2 . ^I ⁿ ^t e ^r ⁿ ^a ^l ^c ^o ⁿ ^t r ^o ^l ^p ^o ^l i c ⁱ e ^s ^a ⁿ ^d ^p ^r ^o ^c ^e ^d ^u ^r ^e ^s ^f o ^r ^I ^T ^s ^y ^s ^t e ^m ^s ( i n ^c ^l u ^d ⁱ n ^g ^s ^e ^c ^u ^r ^e ^a ^c ^c ^e ^s ^s , c ^o ⁿ ^t r ^o ^l ^o ^f ^c ^h ^a ⁿ ^g ^e ^s , ^s ^y ^s ^t e ^m ^o ^p ^e ^r ^a ^t i o ⁿ , ^c ^o ⁿ ^t i n ^u ⁱ t y ^a ⁿ ^d ^s ^e ^g ^r ^e ^g ^a ^t i o ⁿ ^o ^f ^d ^u ^t i e ^s ) ^g ⁱ v ⁱ n ^g s ^u ^p ^p ^o ^r ^t ^t o ^k ^e ^y ^c ^o ^m ^p ^a ⁿ ^y ^p ^r ^o ^c ^e ^s ^s ^e ^s ^r ^e ^g ^a ^r ^d ⁱ n ^g ^t h ^e ^p ^r ^e ^p ^a ^r ^a ^t i o ⁿ ^a ⁿ ^d ^p ^u ^b ^l i c ^a ^t i o ⁿ ^o ^f f i n^a ⁿ ^c ⁱ a ^l ⁱ n ^f o ^r ^m ^a ^t i o ⁿ .

L ^a ^r ^E ^s ^p ^a ^ñ ^a ^h ^a ^s ^o ^u ^t s ^o ^u ^r c ^e ^d ⁱ t s ^a ^c ^c ^o ^u ⁿ ^t i n ^g ^s ^e ^r v ⁱ c ^e ^s ^t o ^a ^s ^p ^e ^c ⁱ a ^l i s ^t ^f i r m . ^A ^s ^a ^r e ^s ^u ^l t , ^t h ^e ^C ^o ^m ^p ^a ⁿ ^y d ^o ^e ^s ⁿ ^o ^t ^h ^a ^v ^e ^p ^r o ^p ^r i e ^t a ^r y ^I ^T s ^y ^s ^t e ^m ^s ^o ^f ^s ⁱ g ⁿ ⁱ f i c ^a ⁿ ^c ^e ^t o ^t h ^e ^p ^r e ^p ^a ^r a ^t i o ⁿ ^a ⁿ ^d ^p ^u ^b ^l i c ^a ^t i o ⁿ ^o ^f ⁱ t s f i n ^a ⁿ ^c ⁱ a ^l ⁱ n ^f o ^r m ^a ^t i o ⁿ . ^H ^o ^w ^e ^v ^e ^r , ^t h ^e ^C ^o ^r p ^o ^r a ^t e & ^F ⁱ n ^a ⁿ ^c ⁱ a ^l ^M ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^e ⁿ ^s ^u ^r e ^s ^t h ^a ^t ^t h ^e c ^o ⁿ ^t r a ^c ^t e ^d ^e ⁿ ^t i t y ^h ^a ^s ^a ^c ^e ^r t i f i e ^d ⁱ n ^f o ^r m ^a ^t i o ⁿ ^s ^e ^c ^u ^r i t y ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^s ^y ^s ^t e ^m ⁱ n ^a ^c ^c ^o ^r d ^a ⁿ ^c ^e ^w ⁱ t h I S ^O ² ⁷ ⁰ ⁰ ¹ , ⁱⁿ ^a ^d ^d ⁱ t i o ⁿ ^t^o ^c ^o ⁿ ^s ^t^a ⁿ ^t l y ^m ^o ⁿ ⁱ t o ^r i n ^g ^a ⁿ ^d ^s ^u ^p ^e ^r^v ⁱ^s ⁱⁿ ^g ^b ^o ^t^h ^t^h ^e ^o ^u ^t^s ^o ^u ^r^c ⁱⁿ ^g ^c ^o ⁿ ^t r a ^c ^t aⁿ ^d ^t h ^e ^f i n ^a ⁿ ^c ⁱ a ^l ⁱ n ^f o ^r m ^a ^t i o ⁿ ^r e ^p ^o ^r t e ^d ^b ^y ^t h ^e ^t h ⁱ r d ^p ^a ^r t y ^t o ^p ^r e ^v ^e ⁿ ^t ⁱ t ^f r o ^m ^c ^o ⁿ ^t a ⁱ n ⁱ n ^g ^e ^r r o ^r s .

F . 3 . 3 . ^I ⁿ ^t e ^r ⁿ ^a ^l ^c ^o ⁿ ^t r ^o ^l ^p ^o ^l i c ⁱ e ^s ^a ⁿ ^d ^p ^r ^o ^c ^e ^d ^u ^r ^e ^s ^f o ^r ^o ^v ^e ^r ^s ^e ^e ⁱ n ^g ^t h ^e ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^o ^f o ^u ^t s ^o ^u ^r ^c ^e ^d ^a ^c ^t i v ⁱ t i e ^s ^a ⁿ ^d ^o ^f ^t h ^e ^a ^p ^p ^r ^a ⁱ s ^a ^l , ^c ^a ^l c ^u ^l a ^t i o ⁿ ^o ^r ^v ^a ^l u ^a ^t i o ⁿ ^s ^e ^r ^v ⁱ c ^e ^s c ^o ^m ^m ⁱ s ^s ⁱ o ⁿ ^e ^d ^f r ^o ^m ⁱ n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^e ^x ^p ^e ^r ^t s , ^w ^h ^e ⁿ ^t h ^e ^s ^e ^m ^a ^y ^m ^a ^t e ^r ⁱ a ^l l y ^a ^f f e ^c ^t ^t h ^e f i n^a ⁿ ^c ⁱ a ^l ^s ^t a ^t e ^m ^e ⁿ ^t s .

^S ⁱ n ^c ^e ⁱ t ^h ^a ^s ^o ^u ^t s ^o ^u ^r c ^e ^d ^s ^o ^m ^e ^o ^f ⁱ t s ^f i n ^a ⁿ ^c ⁱ a ^l ^r e ^p ^o ^r t i n ^g ^a ^c ^t i v ⁱ t i e ^s ^t o ^a ^t h ⁱ r d ^p ^a ^r t y ^t h ^a ^t ⁱ s ⁿ ^o ^t ^p ^a ^r t o ^f ^G ^r u ^p ^o ^L ^a ^r , ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^h ^a ^s ⁱ d ^e ⁿ ^t i f i e ^d ^a ^l l ^o ^f ^t h ^e ^o ^r g ^a ⁿ ⁱ s ^a ^t i o ⁿ ^s ^t h ^a ^t ^p ^r o ^v ⁱ d ^e ⁱ t ^w ⁱ t h ^s ^e ^r v ⁱ c ^e ^s ⁱ n t h ^e ^v ^a ^r i o ^u ^s ^b ^u ^s ⁱ n ^e ^s ^s ^p ^r o ^c ^e ^s ^s ^e ^s , ^d ^e ^t e ^r m ⁱ n ⁱ n ^g ^t h ^e ⁱ m ^p ^a ^c ^t ^o ^f ^t h ^e ⁱ r ^a ^c ^t i v ⁱ t i e ^s ^o ⁿ ^t h ^e ^f i n ^a ⁿ ^c ⁱ a ^l r e^p ^o ^r t i n ^g ^s ^y ^s ^t e ^m .

^S ^p ^e ^c ⁱ f i c ^a ^l l y , ^t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^h ^a ^s ⁱ d ^e ⁿ ^t i f i e ^d ^c ^e ^r t a ⁱ n ^s ^e ^r v ⁱ c ^e ^s ^p ^r o ^v ⁱ d ^e ^d ^b ^y ^t h ⁱ r d ^p ^a ^r t i e ^s ^w ^h ⁱ c ^h ^a ^r e

c ^o ⁿ ^s ⁱ d ^e ^r e ^d ^p ^a ^r t ^o ^f ⁱ t s ^f i n ^a ⁿ ^c ⁱ a ^l ^r e ^p ^o ^r t i n ^g ^s ^y ^s ^t e ^m . ^T h ^e ^s ^e ^s ^e ^r v ⁱ c ^e ^s ⁱ n ^c ^l u ^d ^e ^t h ^e ^a ⁿ ^a ^l y ^s ⁱ s ^p ^e ^r f o ^r m ^e ^d t o ^d ^o ^c ^u ^m ^e ⁿ ^t ^a ⁿ ^d ^a ^s ^s ^e ^s ^s ^t h ^e ^I ^C ^F ^R ^s ^y ^s ^t e ^m , ^w ⁱ t h ^t h ^e ^o ^u ^t s ^o ^u ^r c ⁱ n ^g ^o ^f ^t h ^e ^a ^c ^c ^o ^u ⁿ ^t i n ^g ^f u ⁿ ^c ^t i o ⁿ ^a ⁿ ^d t h ^e ^h ^a ^l f ú y ^e ^a ^r l y ^a ^s ^s ^e ^t ^a ^p ^p ^r a ⁱ s ^a ^l s ^t o ^a ^c ^c ^r e ^d ⁱ t e ^d ^a ⁿ ^d ⁱ n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^e ⁿ ^t i t i e ^s ^s ^t a ⁿ ^d ⁱ n ^g ^o ^u ^t ⁱ n ^t h ⁱ s r e^s ^p ^e ^c ^t .

A ^s ^f o ^r ^t h ^e ^p ^o ^l i c ⁱ e ^s ^a ⁿ ^d ^p ^r o ^c ^e ^d ^u ^r e ^s ⁱ n ^p ^l a ^c ^e ^f o ^r ^e ^v ^a ^l u ^a ^t i n ^g ^a ⁿ ^d ^o ^v ^e ^r s ^e ^e ⁱ n ^g ^t h ^e ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^o ^f o ^u ^t s ^o ^u ^r c ^e ^d ^a ^c ^t i v ⁱ t i e ^s , ^t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^h ^a ^s ^e ^x ^h ^a ^u ^s ^t i v ^e ^e ^x ^t e ^r n ^a ^l ^a ^d ^v ⁱ s ^o ^r ^e ⁿ ^g ^a ^g ^e ^m ^e ⁿ ^t ^p ^r o ^c ^e ^d ^u ^r e ^s ^t h ^a ^t a ^r^e ^d ^e ^s ⁱ^g ⁿ ^e ^d ^t^o ^e ⁿ ^s ^u ^r^e ^t^h ^e ^p ^r^o ^v ⁱ^d ^e ^r^s ' ^c ^o ^m ^p ^e ^t^e ⁿ ^c ^e , ⁱⁿ ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^c ^e , ^e ^x ^p ^e ^r t i s ^e ^a ⁿ ^d ^l^e ^g ^a ^l ^k ⁿ ^o ^w ^ú^h ^o ^w w ⁱ t h ^r e ^s ^p ^e ^c ^t ^t o ^t h ^e ^s ^e ^r v ⁱ c ^e ^s ^p ^r o ^v ⁱ d ^e ^d . ^A ^d ^d ⁱ t i o ⁿ ^a ^l l y , ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^p ^e ^r i o ^d ⁱ c ^a ^l l y ^c ^a ^r r i e ^s ^o ^u ^t e ^v ^a ^l u ^a ^t i o ⁿ ^w ^o ^r k ^o ⁿ ^t h ^e ^k ^e ^y ^c ^o ⁿ ^t r o ^l s ^c ^a ^r r i e ^d ^o ^u ^t ^b ^y ^t h ⁱ r d ^ú p ^a ^r t y ^s ^e ^r v ⁱ c ^e ^p ^r o ^v ⁱ d ^e ^r s , ^t o ^v ^e ^r i f y ^t h ^e ⁱ r c^o ^r r e ^c ^t ^f u ⁿ ^c ^t i o ⁿ ⁱ n ^g .

A ^l l ^o ^f ^t h ^e ⁱ n ^f o ^r m ^a ^t i o ⁿ ^p ^r e ^p ^a ^r e ^d ^b ^y ⁱ n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^e ^x ^p ^e ^r t s ^d ^e ^e ^m ^e ^d ^m ^a ^t e ^r i a ^l ⁱ n ^r e ^s ^p ^e ^c ^t ^o ^f ^t h ^e f i n ^a ⁿ ^c ⁱ^a ^l ^s ^t^a ^t^e ^m ^e ⁿ ^t^s ⁱ^s ^r^e ^v ⁱ^e ^w ^e ^d ^a ⁿ ^d ^v ^a ^l i d ^a ^t^e ^d ^b ^y ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ' s ^C ^o ^r^p ^o ^r^a ^t^e & ^F ⁱⁿ ^a ⁿ ^c ⁱ^a ^l M^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t .

F . 4 . ^I ⁿ ^f o ^r ^m ^a ^t i o ⁿ ^a ⁿ ^d ^c ^o ^m ^m ^u ⁿ ⁱ c ^a ^t i o ⁿ

^I ⁿ ^d ⁱ c ^a ^t e ^t h ^e ^e ^x ⁱ s ^t e ⁿ ^c ^e ^o ^f ^a ^t ^l e ^a ^s ^t ^t h ^e ^f o ^l l o ^w ⁱ n ^g ^c ^o ^m ^p ^o ⁿ ^e ⁿ ^t s ^a ⁿ ^d ^s ^p ^e ^c ⁱ f y ^t h ^e ⁱ r ^m ^a ⁱ n c^h ^a ^r ^a ^c ^t e ^r ⁱ s ^t i c ^s :

F . 4 . 1 . ^A ^s ^p ^e ^c ⁱ f i c ^f u ⁿ ^c ^t i o ⁿ ⁱ n ^c ^h ^a ^r ^g ^e ^o ^f ^d ^e ^f i n ⁱ n ^g ^a ⁿ ^d ^m ^a ⁱ n ^t a ⁱ n ⁱ n ^g ^a ^c ^c ^o ^u ⁿ ^t i n ^g ^p ^o ^l i c ⁱ e ^s ( a ^c ^c ^o ^u ⁿ ^t i n ^g ^p ^o ^l i c ⁱ e ^s ^a ^r ^e ^a ^o ^r ^d ^e ^p ^a ^r ^t m ^e ⁿ ^t ) ^a ⁿ ^d ^s ^e ^t t l i n ^g ^d ^o ^u ^b ^t s ^o ^r ^d ⁱ s ^p ^u ^t e ^s ^o ^v ^e ^r ^t h ^e ⁱ r i n ^t e ^r ^p ^r ^e ^t a ^t i o ⁿ , ^w ^h ⁱ c ^h ⁱ s ⁱ n ^r ^e ^g ^u ^l a ^r ^c ^o ^m ^m ^u ⁿ ⁱ c ^a ^t i o ⁿ ^w ⁱ t h ^t h ^e ^t e ^a ^m ⁱ n ^c ^h ^a ^r ^g ^e ^o ^f o^p ^e ^r ^a ^t i o ⁿ ^s .

C ^o ^r p ^o ^r a ^t e & ^F ⁱ n ^a ⁿ ^c ⁱ a ^l ^M ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ⁱ s ^r e ^s ^p ^o ⁿ ^s ⁱ b ^l e ^f o ^r ⁱ n ^f o ^r m ⁱ n ^g ^a ⁿ ^d ^c ^o ^m ^m ^u ⁿ ⁱ c ^a ^t i n ^g , ⁱ n ^t e ^r n ^a ^l l y a ⁿ ^d ^e ^x ^t e ^r n ^a ^l l y , ^t h ^e ^m ^a ⁱ n ^a ^c ^c ^o ^u ⁿ ^t i n ^g ^p ^o ^l i c ⁱ e ^s ^a ^p ^p ^l i e ^d ^a ⁿ ^d ^f o ^r ^r e ^s ^o ^l v ⁱ n ^g ^a ⁿ ^y ^q ^u ^e ^r i e ^s ^a ^b ^o ^u ^t ^t h ^e ⁱ r a^p ^p ^l i c ^a ^t i o ⁿ .

L ^a ^r ^E ^s ^p ^a ^ñ ^a ^h ^a ^s ^a ⁿ ^e ^f f e ^c ^t i v ^e ^a ⁿ ^d ^d ^u ^l y ^ú a ^p ^p ^r o ^v ^e ^d ^A ^c ^c ^o ^u ⁿ ^t i n ^g ^P ^o ^l i c ^y ^M ^a ⁿ ^u ^a ^l ^e ⁿ ^c ^o ^m ^p ^a ^s ^s ⁱ n ^g , ⁱ n ^a s ^t r u ^c ^t u ^r e ^d ^m ^a ⁿ ⁿ ^e ^r , ^t h ^e ^a ^c ^c ^o ^u ⁿ ^t i n ^g ^r u ^l e ^s , ^p ^o ^l i c ⁱ e ^s ^a ⁿ ^d ^c ^r i t e ^r i a ^b ^e ⁱ n ^g ^a ^p ^p ^l i e ^d ⁱ n ^g ^e ⁿ ^e ^r a ^l ^a ^t ^a ^l l ^o ^f t h^e ^o ^r^g ^a ⁿ ⁱ^s ^a ^t i o ⁿ ' s ^c ^o ^m ^p ^a ⁿ ⁱ^e ^s .

T h ^e ^b ^o ^o ^k ^ú k ^e ^e ^p ⁱ n ^g ^p ^r o ^c ^e ^s ^s ^p ^e ^r ^s ^e ⁱ s ^h ^a ⁿ ^d ^l e ^d ^a ^t ^p ^r e ^s ^e ⁿ ^t ^b ^y ^a ⁿ ^o ^u ^t s ^o ^u ^r c ^e ^d , ^p ^r e ^s ^t i g ⁱ o ^u ^s , ^s ^p ^e ^c ⁱ a ^l i s ^t f i r m ^w ^h ⁱ c ^h ⁱ s ^w ^o ^r k ⁱ n ^g ^w ⁱ t h ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^o ⁿ ^t h ^e ^d ^e ^f i n ⁱ t i o ⁿ ^a ⁿ ^d ^a ^p ^p ^l i c ^a ^t i o ⁿ ^o ^f ^a ^c ^c ^o ^u ⁿ ^t i n ^g ^c ^r i t e ^r i a , i n ^k ^e ^e ^p ⁱ n ^g ^w ⁱ t h ^p ^r e ^v ^a ⁱ l i n ^g ^l e ^g ⁱ s ^l a ^t i o ⁿ . ^T ^h ⁱ s ^p ^r o ^c ^e ^s ^s ⁱ s ^s ^u ^p ^e ^r v ⁱ s ^e ^d ^c ^o ⁿ ^t i n ^u ^a ^l l y ^b ^y ^C ^o ^r p ^o ^r a ^t e & ^F ⁱ n ^a ⁿ ^c ⁱ a ^l ^M ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t , ^w ^h ⁱ c ^h ^r e ^p ^o ^r t s ^t o ^t h ^e ^A ^u ^d ⁱ t ^a ⁿ ^d ^C ^o ⁿ ^t r o ^l ^C ^o ^m ^m ⁱ t t e ^e ^o ⁿ ^t h ^e ^p ^r o ^g ^r e ^s ^s ^m ^a ^d ^e o ⁿ ^a ^r e ^g ^u ^l a ^r ^b ^a ^s ⁱ s . ^A ^d ^d ⁱ t i o ⁿ ^a ^l l y , ^a ⁿ ^d ^w ^h ^e ⁿ ⁿ ^e ^c ^e ^s ^s ^a ^r y , ^t h ^e ^c ^r i t e ^r i a ^a ^d ^o ^p ^t e ^d ^w ⁱ t h ^a ^c ^c ^o ^u ⁿ ^t i n ^g e ^x ^p ^e ^r t s ^o ^r ^o ^t h ^e ^r ^a ^d ^v ⁱ s ^o ^r s ^t o ^r e ^s ^o ^l v ^e ^a ⁿ ^y ^d ^o ^u ^b ^t ^o ^r ^p ^o ^s ^s ⁱ b ^l e ^c ^o ⁿ ^f l i c ^t ^a ^r i s ⁱ n ^g ^f r o ^m ^t h ^e ⁱ n ^t e ^r p ^r e ^t a ^t i o ⁿ o^f ^a ⁿ ^y ^s ^t a ⁿ ^d ^a ^r d ^a ^r e ^c ^o ⁿ ^f i r m ^e ^d .

L ^a ^s ^t l y , ^t h ^e ^B ^o ^a ^r d ^o ^f D i r e ^c ^t o ^r s ^a ^p ^p ^r o ^v ^e ^s ^t h ^e ^f i n ^a ⁿ ^c ⁱ a ^l ⁱ n ^f o ^r m ^a ^t i o ⁿ ^w ^h ⁱ c ^h ^t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^m ^u ^s ^t r e^p ^o ^r t ^p ^e ^r i o ^d ⁱ c ^a ^l l y ⁱ n ⁱ t s ^c ^a ^p ^a ^c ⁱ t y ^a ^s ^a ^l i s ^t e ^d ^e ⁿ ^t i t y .

F . 4 . 2 . ^M e ^c ^h ^a ⁿ ⁱ s ^m ^s ⁱ n ^s ^t a ⁿ ^d ^a ^r ^d ^f o ^r ^m ^a ^t ^f o ^r ^t h ^e ^c ^a ^p ^t u ^r ^e ^a ⁿ ^d ^p ^r ^e ^p ^a ^r ^a ^t i o ⁿ ^o ^f ^f i n ^a ⁿ ^c ⁱ a ^l i n ^f o ^r ^m ^a ^t i o ⁿ , ^w ^h ⁱ c ^h ^a ^r ^e ^a ^p ^p ^l i e ^d ^a ⁿ ^d ^u ^s ^e ^d ⁱ n ^a ^l l ^u ⁿ ⁱ t s ^w ⁱ t h ⁱ n ^t h ^e ^e ⁿ ^t i t y ^o ^r ^g ^r ^o ^u ^p , a ⁿ ^d ^s ^u ^p ^p ^o ^r ^t ⁱ t s ^m ^a ⁱ n ^f i n ^a ⁿ ^c ⁱ a ^l ^s ^t a ^t e ^m ^e ⁿ ^t s ^a ⁿ ^d ^a ^c ^c ^o ^m ^p ^a ⁿ ^y ⁱ n ^g ⁿ ^o ^t e ^s ^a ^s ^w ^e ^l l ^a ^s dⁱ s ^c ^l o ^s ^u ^r ^e ^s ^c ^o ⁿ ^c ^e ^r ⁿ ⁱ n ^g ^I ^C ^F ^R .

A ^s ^a ^l r e ^a ^d ^y ⁿ ^o ^t e ^d ⁱ n ^s ^e ^c ^t i o ⁿ ^F . 4 . ¹ ^a ^b ^o ^v ^e , ^t h ^e ^b ^o ^o ^k ^ú k ^e ^e ^p ⁱ n ^g ^p ^r o ^c ^e ^s ^s ^a ⁿ ^d ^t h ^e ^p ^r e ^p ^a ^r a ^t i o ⁿ ^o ^f ^t h ^e C ^o ^m ^p ^a ⁿ ^y ' s ⁱⁿ ^d ⁱ^v ⁱ^d ^u ^a ^l ^a ⁿ ^d ^c ^o ⁿ ^s ^o ^l i d ^a ^t^e ^d ^f i n ^a ⁿ ^c ⁱ^a ^l ^s ^t^a ^t^e ^m ^e ⁿ ^t^s ^h ^a ^v ^e ^b ^e ^e ⁿ ^o ^u ^t^s ^o ^u ^r^c ^e ^d ^t^o ^a p^r e ^s ^t i g ⁱ o ^u ^s , ^s ^p ^e ^c ⁱ a ^l i s ^t ^f i r m .

^N ^e ^v ^e ^r t h ^e ^l e ^s ^s , ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^a ⁿ ^d ^t h ^e ^e ^x ^t e ^r n ^a ^l ^f i r m ^t h ^a ^t ^p ^r o ^v ⁱ d ^e ^s ^t h ^e ^a ^c ^c ^o ^u ⁿ ^t i n ^g ^s ^e ^r v ⁱ c ^e ^s ^h ^a ^v ^e m ^e ^c ^h ^a ⁿ ⁱ s ^m ^s ^f o ^r ^t h ^e ^c ^a ^p ^t u ^r e ^a ⁿ ^d ^p ^r e ^p ^a ^r a ^t i o ⁿ ^o ^f ^f i n ^a ⁿ ^c ⁱ a ^l ⁱ n ^f o ^r m ^a ^t i o ⁿ , ^c ^o ⁿ ^f i g ^u ^r e ^d ^w ⁱ t h ^a ^d ^e ^q ^u ^a ^t e f o ^r m ^a ^t s ^a ⁿ ^d ^a ^p ^p ^l i c ^a ^t i o ⁿ ^s , ^w ^h ⁱ c ^h ^a ^r e ^u ^s ^e ^d ^o ⁿ ^a ⁿ ^a ^c ^r o ^s ^s ^ú t h ^e ^ú b ^o ^a ^r d ^b ^a ^s ⁱ s ^a ^t ^a ^l l ^G ^r o ^u ^p ^u ⁿ ⁱ t s ^a ⁿ ^d c ^o ^m ^p ^a ⁿ ⁱ e ^s . ^I ⁿ ^a ^d ^d ⁱ t i o ⁿ , ^t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^h ^a ^s ^e ^s ^t a ^b ^l i s ^h ^e ^d ^a ^d ^e ^q ^u ^a ^t e ^c ^o ⁿ ^t r o ^l s ^o ^v ^e ^r ^t h ^e ^f i n ^a ⁿ ^c ⁱ a ^l p^r e ^p ^a ^r a ^t i o ⁿ ^a ⁿ ^d ^r e ^p ^o ^r t i n ^g ^p ^r o ^c ^e ^s ^s . ^L ^a ^s ^t l y , ^C ^o ^r p ^o ^r a ^t e & ^F ⁱ n ^a ⁿ ^c ⁱ a ^l ^M ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^s ^u ^p ^e ^r v ⁱ s ^e ^s ^a ⁿ ^d

r e^v ⁱ e ^w ^s ^t h ^e ^f i n ^a ⁿ ^c ⁱ a ^l ⁱ n ^f o ^r m ^a ^t i o ⁿ ^b ^e ^f o ^r e ^p ^r e ^s ^e ⁿ ^t i n ^g ⁱ t ^t o ^t h ^e ^A ^u ^d ⁱ t ^a ⁿ ^d ^C ^o ⁿ ^t r o ^l ^C ^o ^m ^m ⁱ t t e ^e .

F . 5 . ^S y^s ^t e ^m ^m ^o ⁿ ⁱ t o ^r ⁱ n ^g

^I ⁿ ^d ⁱ c ^a ^t e ^t h ^e ^e ^x ⁱ s ^t e ⁿ ^c ^e ^o ^f ^a ^t ^l e ^a ^s ^t ^t h ^e ^f o ^l l o ^w ⁱ n ^g ^c ^o ^m ^p ^o ⁿ ^e ⁿ ^t s , ^d ^e ^s ^c ^r ⁱ b ⁱ n ^g ^t h ^e ⁱ r ^m ^a ⁱ n c^h ^a ^r ^a ^c ^t e ^r ⁱ s ^t i c ^s :

F . 5 . 1 . ^D e ^s ^c ^r ⁱ b ^e ^t h ^e ^I ^C ^F ^R ^m ^o ⁿ ⁱ t o ^r ⁱ n ^g ^a ^c ^t i v ⁱ t i e ^s ^p ^e ^r ^f o ^r ^m ^e ^d ^b ^y ^t h ^e ^a ^u ^d ⁱ t ^c ^o ^m ^m ⁱ t t e ^e , i n ^c ^l u ^d ⁱ n ^g ^a ⁿ ⁱ n ^d ⁱ c ^a ^t i o ⁿ ^o ^f ^w ^h ^e ^t h ^e ^r ^t h ^e ^e ⁿ ^t i t y ^h ^a ^s ^a ⁿ ⁱ n ^t e ^r ⁿ ^a ^l ^a ^u ^d ⁱ t ^f u ⁿ ^c ^t i o ⁿ w ^h ^o ^s ^e ^c ^o ^m ^p ^e ^t e ⁿ ^c ⁱ e ^s ⁱ n ^c ^l u ^d ^e ^s ^u ^p ^p ^o ^r ^t i n ^g ^t h ^e ^a ^u ^d ⁱ t ^c ^o ^m ^m ⁱ t t e ^e ⁱ n ⁱ t s ^r ^o ^l e ^o ^f m ^o ⁿ ⁱ t o ^r ⁱ n ^g ^t h ^e ⁱ n ^t e ^r ⁿ ^a ^l ^c ^o ⁿ ^t r ^o ^l ^s ^y ^s ^t e ^m , ⁱ n ^c ^l u ^d ⁱ n ^g ^I ^C ^F ^R . ^A ^l s ^o ^d ^e ^s ^c ^r ⁱ b ^e ^t h ^e s ^c ^o ^p ^e ^o ^f ^t h ^e ^I ^C ^F ^R ^a ^s ^s ^e ^s ^s ^m ^e ⁿ ^t ^c ^o ⁿ ^d ^u ^c ^t e ^d ⁱ n ^t h ^e ^y ^e ^a ^r ^a ⁿ ^d ^t h ^e ^p ^r ^o ^c ^e ^d ^u ^r ^e ^f o ^r ^t h ^e p ^e ^r ^s ^o ⁿ ⁱ n ^c ^h ^a ^r ^g ^e ^t o ^c ^o ^m ^m ^u ⁿ ⁱ c ^a ^t e ⁱ t s ^f i n ^d ⁱ n ^g ^s . ^S t a ^t e ^a ^l s ^o ^w ^h ^e ^t h ^e ^r ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y h ^a ^s ^a ⁿ ^a ^c ^t i o ⁿ ^p ^l a ⁿ ^s ^p ^e ^c ⁱ f y ⁱ n ^g ^c ^o ^r ^r ^e ^c ^t i v ^e ^m ^e ^a ^s ^u ^r ^e ^s ^f o ^r ^a ⁿ ^y ^f l a ^w ^s ^d ^e ^t e ^c ^t e ^d , ^a ⁿ ^d w^h ^e ^t h ^e ^r ⁱ t ^h ^a ^s ^t a ^k ^e ⁿ ^s ^t o ^c ^k ^o ^f ^t h ^e ⁱ r ^p ^o ^t e ⁿ ^t i a ^l ⁱ m ^p ^a ^c ^t ^o ⁿ ⁱ t s ^f i n ^a ⁿ ^c ⁱ a ^l ⁱ n ^f o ^r ^m ^a ^t i o ⁿ .

T h ^e ^A ^u ^d ⁱ t ^a ⁿ ^d ^C ^o ⁿ ^t r o ^l ^C ^o ^m ^m ⁱ t t e ^e ⁱ s ^t h ^e ^a ^d ^v ⁱ s ^o ^r y ^b ^o ^d ^y ^t h ^r o ^u ^g ^h ^w ^h ⁱ c ^h ^t h ^e ^B ^o ^a ^r d ^o ^f D i r e ^c ^t o ^r s s ^u ^p ^e ^r v ⁱ s ^e ^s ^t h ^e ^I ^C ^F ^R ^s ^y ^s ^t e ^m . ^A ^g ^a ⁱ n ^s ^t ^t h ⁱ s ^b ^a ^c ^k ^d ^r o ^p , ^a ^r t i c ^l e ¹ 4 ^o ^f ^t h ^e ^B ^o ^a ^r d ^R ^e ^g ^u ^l a ^t i o ⁿ ^s a ^t t r i b ^u ^t e ^s ^m ^u ^l t i p ^l e ^d ^u ^t i e ^s ^t o ^t h ^e ^A ^u ^d ⁱ t ^a ⁿ ^d ^C ^o ⁿ ^t r o ^l ^C ^o ^m ^m ⁱ t t e ^e , ^s ^p ^e ^c ⁱ f i c ^a ^l l y ⁱ n ^c ^l u ^d ⁱ n ^g ^t h ^e f o^l l o ^w ⁱ n ^g :

· " ^S ^u p ^e ^r ^v ⁱ s ⁱ n g ^t h ^e ^e f f ^e ^c ^t i ^v ^e ⁿ ^e s ^s ^o f ^t h ^e ⁱ n ^t e ^r ⁿ ^a ^l ^c ^o ⁿ ^t r ^o ^l s ^o f ^t h ^e ^C ^o ^m ^p ^a ⁿ y ^a ⁿ ^d ⁱ t s ^g ^r ^o ^u p ^a ⁿ ^d o f i t s ^e ⁿ t e r p ^r i s ^e ^r i s ^k ^m ^a ⁿ a g ^e ^m ^e ⁿ ^t ^s ^y ^s ^t e ^m ^s " .
· " ^A ⁿ ^a ^l y ^s ⁱ n g , ⁱ n ^c ^o ⁿ ^j ^u ⁿ ^c ^t i o ⁿ ^w ⁱ t h ^t h ^e ^e ^x ^t e ^r ⁿ ^a ^l ^a ^u ^d ⁱ t o ^r , ^a ⁿ y ^m ^a ^t e ^r ⁱ a ^l ⁱ n ^t e ^r ⁿ ^a ^l ^c ^o ⁿ ^t r ^o ^l ^s ^y ^s t e ^m ^w ^e ^a ^k ⁿ e s ^s e s ^u ⁿ ^c ^o ^v ^e ^r ^e ^d ^d ^u ^r i n g t h ^e ^a ^u ^d i t ^p ^r ^o ^c ^e s ^s " .
· " ^M ^o ⁿ ⁱ t o ^r ⁱ n g ^t h ^e ^p ^r ^o ^c ^e s ^s ^o f ^d ^r ^a ^w ⁱ n g ^u p ^a ⁿ ^d ^d ⁱ s ^c ^l o s ⁱ n g ^r ^e g ^u ^l a ^t e ^d ^f ⁱ n ^a ⁿ ^c ⁱ a ^l i n f^o ^r ^m ^a ^t i o ⁿ " .

T h ^e ^A ^u ^d ⁱ t ^a ⁿ ^d ^C ^o ⁿ ^t r o ^l ^C ^o ^m ^m ⁱ t t e ^e ^h ^a ^s ^t h ^e ^s ^u ^p ^p ^o ^r t ^o ^f ^t h ^e ^U ^P ^S ^f o ^r ^t h ^e ^s ^u ^p ^e ^r v ⁱ s ⁱ o ⁿ ^o ^f ^t h ^e ^I ^C ^F ^R . ^S ^p ^e ^c ⁱ f i c ^a ^l l y , ^t h ^e ^S ^t a ^t u ^t e ^o ^f ^t h ^e ^I ⁿ ^t e ^r n ^a ^l ^A ^u ^d ⁱ t ^F ^u ⁿ ^c ^t i o ⁿ , ^u ^p ^d ^a ^t e ^d ⁱ n ^t h ⁱ s ^y ^e ^a ^r , ^a ^t t r i b ^u ^t e ^s ^t o ^t h ^e ^U ^P ^S , ^a ^m ^o ⁿ ^g ^o ^t h ^e ^r s , ^t h ^e ^f o ^l l o ^w ⁱ n ^g ^f u ⁿ ^c ^t i o ⁿ ^s : ^t h ^e ^r e ^f o ^r e , ^t h ^e ^a ^c ^t i v ⁱ t y ^o ^f ^t h ⁱ s ^S ^e ^r ^v ⁱ c ^e ⁱ n ^c ^l u ^d ^e ^s t h^e ^f o ^l l o ^w ⁱ n ^g ^t a ^s ^k ^s :

· ^S ^u ^p ^e ^r v ⁱ s ^e ^t h ^e ^q ^u ^a ^l i t y ^a ⁿ ^d ^r e ^l i a ^b ⁱ l i t y ^o ^f ^f i n ^a ⁿ ^c ⁱ a ^l ^a ⁿ ^d ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ⁱ n ^f o ^r m ^a ^t i o ⁿ , ⁱ n p ^a ^r t i c ^u ^l a ^r , ^o ^f ^t h ^e ^r e ^g ^u ^l a ^t e ^d ⁱ n ^f o ^r m ^a ^t i o ⁿ ^t h ^a ^t ^t h ^e ^G ^r o ^u ^p ^m ^u ^s ^t ^p ^r o ^v ⁱ d ^e ^t o ^t h ^e m^a ^r k ^e ^t s .
· E ⁿ ^s ^u ^r e ^t h ^e ^p ^r o ^p ^e ^r ^f u ⁿ ^c ^t i o ⁿ ⁱ n ^g ^o ^f ^t h ^e ⁱ n ^t e ^r n ^a ^l ^f i n ^a ⁿ ^c ⁱ a ^l ⁱ n ^f o ^r m ^a ^t i o ⁿ ^c ^o ⁿ ^t r o ^l ^s ^y ^s ^t e ^m ( I ^C ^F ^R ) ^e ^s ^t^a ^b ^l i s ^h ^e ^d ⁱⁿ ^t^h ^e ^G ^r^o ^u ^p , ^p ^r^o ^p ^o ^s ⁱⁿ ^g ^t^h ^e ⁱ^m ^p ^r^o ^v ^e ^m ^e ⁿ ^t ^r^e ^c ^o ^m ^m ^e ⁿ ^d ^a ^t i o ⁿ ^s ⁱ^t d^e ^e ^m ^s ^a ^p ^p ^r o ^p ^r i a ^t e .
· C ^h ^e ^c ^k ^t h ^e ⁱ m ^p ^l e ^m ^e ⁿ ^t a ^t i o ⁿ ^o ^f ^t h ^e ^c ^o ^r r e ^c ^t i v ^e ^m ^e ^a ^s ^u ^r e ^s ^a ^p ^p ^r o ^v ^e ^d ^t o ^a ^d ^d ^r e ^s ^s ^t h ^e w ^e ^a ^k ⁿ ^e ^s ^s ^e ^s ^o ^f ^t h ^e ^r i s ^k ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^a ⁿ ^d ⁱ n ^t e ^r n ^a ^l ^c ^o ⁿ ^t r o ^l ^s ^y ^s ^t e ^m ^t h ^a ^t ^h ^a ^v ^e ^b ^e ^e ⁿ r e^v ^e ^a ^l e ^d .

T h ^e ^I ⁿ ^t e ^r n ^a ^l ^A ^u ^d ⁱ t ^P ^l a ⁿ ⁱ s ^a ^p ^p ^r o ^v ^e ^d ^a ⁿ ⁿ ^u ^a ^l l y ^b ^y ^t h ^e ^A ^u ^d ⁱ t ^a ⁿ ^d ^C ^o ⁿ ^t r o ^l ^C ^o ^m ^m ⁱ t t e ^e ^a ^t ^t h ^e ^e ⁿ ^d o ^f ^e ^a ^c ^h ^y ^e ^a ^r ^o ^r ⁱ n ^t h ^e ^e ^a ^r l y ^m ^o ⁿ ^t h ^s ^o ^f ^t h ^e ^f o ^l l o ^w ⁱ n ^g ^y ^e ^a ^r . ^T h ⁱ s ^P ^l a ⁿ ^d ^e ^f i n ^e ^s ^a ^p ^r o ^g ^r a ^m ^o ^f ^w ^o ^r k b ^y ^p ^r o ^c ^e ^s ^s ^e ^s ⁱ n ^c ^l u ^d ⁱ n ^g , ^o ⁿ ^a ^r e ^g ^u ^l a ^r ^b ^a ^s ⁱ s , ^t h ^e ^s ^u ^p ^e ^r v ⁱ s ⁱ o ⁿ ^o ^f ^t h ^e ^p ^r o ^p ^e ^r ⁱ m ^p ^l e ^m ^e ⁿ ^t a ^t i o ⁿ ^o ^f t h ^e ^I ^C ^F ^R , ^r e ^v ⁱ e ^w ^o ^f ^t h ^e ^d ^o ^c ^u ^m ^e ⁿ ^t a ^t i o ⁿ ^t h ^a ^t ⁱ s ^p ^a ^r t ^o ^f ⁱ t , ^a ⁿ ^d ^t h ^e ^r e ^v ⁱ e ^w ^o ^f ^t h ^e ^e ^f f e ^c ^t i v ^e ⁿ ^e ^s ^s o ^f ^t h ^e ^c ^o ⁿ ^t r o ^l s ^d ^e ^f i n ^e ^d . ^P ^e ^r i o ^d ⁱ c ^a ^l l y , ^a ^t ^l e ^a ^s ^t ^q ^u ^a ^r t e ^r l y , ^t h ^e ^U ^P ^S ^r e ^p ^o ^r t s ^d ⁱ r e ^c ^t l y ^t o ^t h ^e ^A ^u ^d ⁱ t aⁿ ^d ^C ^o ⁿ ^t r o ^l ^C ^o ^m ^m ⁱ t t e ^e ^o ⁿ ^t h ^e ^l e ^v ^e ^l ^o ^f ^c ^o ^m ^p ^l i a ⁿ ^c ^e ^w ⁱ t h ^t h ^e ^P ^l a ⁿ ^a ⁿ ^d ^t h ^e ^r e ^s ^u ^l t s ^o ^f ⁱ t s ^w ^o ^r k .

T ^h ^e ^I ^C ^F ^R ^M ^a ⁿ ^u ^a ^l ^p ^r o ^v ⁱ d ^e ^s ^f o ^r ^t h ^e ^a ⁿ ⁿ ^u ^a ^l ^e ^v ^a ^l u ^a ^t i o ⁿ ^a ⁿ ^d ^s ^u ^p ^e ^r v ⁱ s ⁱ o ⁿ ^o ^f ^t h ^e ^d ⁱ f f e ^r e ⁿ ^t c ^o ^m ^p ^o ⁿ ^e ⁿ ^t s ^t h ^e ^r e ^o ^f . ^I ⁿ ^t h ⁱ s ^s ^e ⁿ ^s ^e , ^t h ^r o ^u ^g ^h ^o ^u ^t ^t h ^e ^y ^e ^a ^r ² ⁰ ¹ ⁹ ⁱ t ^h ^a ^s ^b ^e ^e ⁿ ^r e ^v ⁱ e ^w ^e ^d ^a ⁿ ^d ^u ^p ^d ^a ^t e ^s h ^a ^v ^e ^b ^e ^e ⁿ ⁱ n ^t r o ^d ^u ^c ^e ^d ⁱ n ^t h ^e ^d ^o ^c ^u ^m ^e ⁿ ^t a ^t i o ⁿ ^c ^o ^r r e ^s ^p ^o ⁿ ^d ⁱ n ^g ^t o ^a ^l l ^s ⁱ g ⁿ ⁱ f i c ^a ⁿ ^t ^p ^r o ^c ^e ^s ^s ^e ^s . L ⁱ k ^e ^w ⁱ s ^e , ^w ^o ^r k ^h ^a ^s ^b ^e ^e ⁿ ^c ^a ^r r i e ^d ^o ^u ^t ^t o ^v ^e ^r i f y ^t h ^e ^o ^p ^e ^r a ^t i o ⁿ ^o ^f ^c ^o ⁿ ^t r o ^l s , ^a ^m ^o ⁿ ^g ^o ^t h ^e ^r s , ⁱ n ^t h ^e p ^r^o ^c ^e ^s ^s ^e ^s ^o ^f ^a ^s ^s ^e ^t ^v ^a ^l^u ^a ^t i o ⁿ , ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^a ⁿ ^d ^r^e ^g ⁱ^s ^t r a ^t i o ⁿ ^o ^f ^t^h ^e ^M ^a ⁿ ^a ^g ^e ^r ' s ^f^e ^e ^s , ^a ⁿ ^d ⁱⁿ r e ^l a ^t i o ⁿ ^t o ^c ^o ^m ^p ^l i a ⁿ ^c ^e ^w ⁱ t h ^t h ^e ^S ^O ^C ^I ^M ^I ^r e ^g ⁱ m ^e , ^w ⁱ t h ^o ^u ^t ^f i n ^d ⁱ n ^g ^s ⁱ g ⁿ ⁱ f i c ^a ⁿ ^t ⁱ n ^c ⁱ d ^e ⁿ ^t s . ^T ^h ^e D i r e^c ^t o ^r a ^t e ^a ⁿ ^d ^t h ^e ^A ^u ^d ⁱ t ^a ⁿ ^d ^C ^o ⁿ ^t r o ^l ^C ^o ^m ^m ⁱ t t e ^e ^h ^a ^v ^e ^r e ^c ^e ⁱ v ^e ^d ^t h ^e ⁱ n ^f o ^r m ^a ^t i o ⁿ

c^o ^r r e ^s ^p ^o ⁿ ^d ⁱ n ^g ^t o ^t h ^e ^d ^e ^v ^e ^l o ^p ^m ^e ⁿ ^t ^o ^f ^t h ^e ⁱ n ^d ⁱ c ^a ^t e ^d ^a ^c ^t i v ⁱ t i e ^s .

A ^d ^d ⁱ t i o ⁿ ^a ^l l y , ^t h ^e ^C ^o ^r p ^o ^r a ^t e & ^F ⁱ n ^a ⁿ ^c ⁱ a ^l ^M ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^a ⁿ ^d ^t h ^e ^A ^u ^d ⁱ t ^a ⁿ ^d ^C ^o ⁿ ^t r o ^l ^C ^o ^m ^m ⁱ t t e ^e c ^a ^r r y ^o ^u ^t ^a ^r e ^v ⁱ e ^w ^p ^r o ^c ^e ^s ^s ^o ^f ^t h ^e ^q ^u ^a ^r t e ^r l y ^f i n ^a ⁿ ^c ⁱ a ^l ⁱ n ^f o ^r m ^a ^t i o ⁿ ^s ^e ⁿ ^t ^t o ^t h ^e ^C ^N ^M ^V , ⁱ n a^c ^c ^o ^r d ^a ⁿ ^c ^e ^w ⁱ t h ^t h ^e ^e ^s ^t a ^b ^l i s ^h ^e ^d ^s ^c ^h ^e ^d ^u ^l e ^s .

F . 5 . 2 . ^I ⁿ ^d ⁱ c ^a ^t e ^w ^h ^e ^t h ^e ^r ^t h ^e ^r ^e ⁱ s ^a ^d ⁱ s ^c ^u ^s ^s ⁱ o ⁿ ^p ^r ^o ^c ^e ^d ^u ^r ^e ^w ^h ^e ^r ^e ^b ^y ^t h ^e ^a ^u ^d ⁱ t o ^r ( p ^u ^r ^s ^u ^a ⁿ ^t t o ^T ^A ^S ) , ^t h ^e ⁱ n ^t e ^r ⁿ ^a ^l ^a ^u ^d ⁱ t ^f u ⁿ ^c ^t i o ⁿ ^a ⁿ ^d ^o ^t h ^e ^r ^e ^x ^p ^e ^r ^t s ^c ^a ⁿ ^r ^e ^p ^o ^r ^t ^a ⁿ ^y s ⁱ g ⁿ ⁱ f i c ^a ⁿ ^t ⁱ n ^t e ^r ⁿ ^a ^l ^c ^o ⁿ ^t r ^o ^l ^w ^e ^a ^k ⁿ ^e ^s ^s ^e ^s ^e ⁿ ^c ^o ^u ⁿ ^t e ^r ^e ^d ^d ^u ^r ⁱ n ^g ^t h ^e ⁱ r ^r ^e ^v ⁱ e ^w ^o ^f ^t h ^e ^f ⁱ n ^a ⁿ ^c ⁱ a ^l ^s ^t a ^t e ^m ^e ⁿ ^t s ^o ^r ^o ^t h ^e ^r ^a ^s ^s ⁱ g ⁿ ^m ^e ⁿ ^t s ^t o ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ' s ^s ^e ⁿ ⁱ o ^r ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t a ⁿ ^d ⁱ t s ^a ^u ^d ⁱ t ^c ^o ^m ^m ⁱ t t e ^e ^o ^r ^b ^o ^a ^r ^d ^o ^f ^d ⁱ r ^e ^c ^t o ^r ^s . ^S t a ^t e ^a ^l s ^o ^w ^h ^e ^t h ^e ^r ^t h ^e ^e ⁿ ^t i t y ^h ^a ^s aⁿ ^a ^c ^t i o ⁿ ^p ^l a ⁿ ^t o ^c ^o ^r ^r ^e ^c ^t ^o ^r ^m ⁱ t i g ^a ^t e ^t h ^e ^w ^e ^a ^k ⁿ ^e ^s ^s ^e ^s ^f o ^u ⁿ ^d .

A ^s ^a ^l r e ^a ^d ^y ⁿ ^o ^t e ^d , ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ⁱ s ⁱ m ^p ^l e ^m ^e ⁿ ^t i n ^g ⁱ t s ^I ^C ^F ^R ^s ^y ^s ^t e ^m ^a ⁿ ^d ^d ^o ^c ^u ^m ^e ⁿ ^t i n ^g ^t h ^e ^m ^o ^s ^t c ^r i t i c ^a ^l ^p ^r o ^c ^e ^s ^s ^e ^s ^g ^r a ^d ^u ^a ^l l y . ^I ^t ⁱ s ^w ^o ^r t h ⁿ ^o ^t i n ^g ⁱ n ^t h ⁱ s ^r e ^s ^p ^e ^c ^t ^t h ^a ^t ^C ^o ^r p ^o ^r a ^t e ^M ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t m ^e ^e ^t s ^r e ^g ^u ^l a ^r l y ^w ⁱ t h ^t h ^e ^e ^x ^t e ^r n ^a ^l ^a ^u ^d ⁱ t o ^r ^o ^r ^o ^t h ^e ^r ^a ^d ^v ⁱ s ^o ^r s ^t o ^d ⁱ s ^c ^u ^s ^s ⁱ t s ^p ^r o ^p ^o ^s ^e ^d ^f i n ^a ⁿ ^c ⁱ a ^l r e^p ^o ^r t i n ^g ^c ^r i t e ^r i a ^a ⁿ ^d ^t h ^e ^l e ^v ^e ^l ^o ^f ^p ^r o ^g ^r e ^s ^s ^m ^a ^d ^e ^o ⁿ ^d ^e ^v ^e ^l o ^p ⁱ n ^g ^t h ^e ^I ^C ^F ^R ^s ^y ^s ^t e ^m .

^I ⁿ ^a ^d ^d ⁱ t i o ⁿ , ^a ^l l ^r e ^q ^u ⁱ r e ^d ^s ^t e ^p ^s ^w ^e ^r e ^t a ^k ^e ⁿ ^t o ^e ⁿ ^a ^b ^l e ^t h ^e ^p ^r o ^v ⁱ s ⁱ o ⁿ ^s ^o ^f ^t h ^e ^B ^o ^a ^r d ^R ^e ^g ^u ^l a ^t i o ⁿ ^s wⁱ t h ^r e ^s ^p ^e ^c ^t ^t o ⁱ t s ^m ^a ⁿ ^d ^a ^t e ^t o ^t h ^e ^A ^u ^d ⁱ t ^a ⁿ ^d ^C ^o ⁿ ^t r o ^l ^C ^o ^m ^m ⁱ t t e ^e , ^s ^p ^e ^c ⁱ f i c ^a ^l l y ^t h ^a ^t ^o ^f :

· A ⁿ ^a ^l y ^s ⁱ n ^g , ⁱ n ^c ^o ⁿ ^j ^u ⁿ ^c ^t i o ⁿ ^w ⁱ t h ^t h ^e ^e ^x ^t e ^r n ^a ^l ^a ^u ^d ⁱ t o ^r , ^a ⁿ ^y ^m ^a ^t e ^r i a ^l ⁱ n ^t e ^r n ^a ^l ^c ^o ⁿ ^t r o ^l s ^y ^s ^t e ^m ^w ^e ^a ^k ⁿ ^e ^s ^s ^e ^s ^u ⁿ ^c ^o ^v ^e ^r e ^d ^d ^u ^r i n ^g ^t h ^e ^a ^u ^d ⁱ t ^p ^r o ^c ^e ^s ^s ^a ⁿ ^d ^a ^d ^o ^p ^t i n ^g ^t h ^e ^o ^p ^p ^o ^r t u ⁿ ^e m ^e ^a ^s ^u ^r e ^s ^f o ^r ^a ^d ^d ^r e ^s ^s ⁱ n ^g ^t h ^e ^m , ^a ^s ^r e ^q ^u ⁱ r e ^d . ^I ⁿ ^t h ⁱ s ^r e ^g ^a ^r d , ^d ^u ^r i n ^g ^t h ^e ^y ^e ^a ^r ² ⁰ ¹ ⁹ , ^t h ^e a ^c ^c ^o ^u ⁿ ^t ^a ^u ^d ⁱ t o ^r s ^h ^a ^v ^e ^a ^t t e ⁿ ^d ^e ^d ³ ^m ^e ^e ^t i n ^g ^s ^o ^f ^t h ^e ^A ^u ^d ⁱ t ^a ⁿ ^d ^C ^o ⁿ ^t r o ^l ^C ^o ^m ^m ⁱ t t e ^e . ^I ⁿ t h ^e ^s ^e ^s ^e ^s ^s ⁱ o ⁿ ^s , ^t h ^e ^a ^c ^c ^o ^u ⁿ ^t ^a ^u ^d ⁱ t o ^r s ⁱ n ^f o ^r m ^t h ^e ^C ^o ^m ^m ⁱ t t e ^e ^o ^f ^t h ^e ⁱ m ^p ^o ^r t a ⁿ ^t ^a ^u ^d ⁱ t m ^a ^t t e ^r s ⁱ d ^e ⁿ ^t i f i e ^d ⁱ n ^t h ^e ^c ^o ^u ^r s ^e ^o ^f ^t h ^e ^w ^o ^r k ^a ⁿ ^d , ⁱ f ^a ^p ^p ^l i c ^a ^b ^l e , ^o ^f ^t h ^e ^s ⁱ g ⁿ ⁱ f i c ^a ⁿ ^t w ^e ^a ^k ⁿ ^e ^s ^s ^e ^s ^o ^f ⁱ n ^t e ^r n ^a ^l ^c ^o ⁿ ^t r o ^l , ⁱ n ^a ^d ^d ⁱ t i o ⁿ ^t o ^t h ^e ^r e ^c ^o ^m ^m ^e ⁿ ^d ^a ^t i o ⁿ ^s ⁱ d ^e ⁿ ^t i f i e ^d ^t h ^a ^t a^l l o ^w ⁱ m ^p ^r o ^v ⁱ n ^g ^t h ^e ^I ⁿ ^t e ^r n ^a ^l ^c ^o ⁿ ^t r o ^l ^s ^y ^s ^t e ^m ^o ^f ^t h ^e ^C ^o ^m ^p ^a ⁿ ^y .
· E ^s ^t a ^b ^l i s ^h ⁱ n ^g ^t h ^e ^o ^p ^p ^o ^r t u ⁿ ^e ^r e ^l a ^t i o ⁿ ^s ^h ⁱ p ^w ⁱ t h ^t h ^e ^a ^u ^d ⁱ t o ^r ⁱ n ^o ^r d ^e ^r ^t o ^r e ^c ^e ⁱ v ^e ^f e ^e ^d ^b ^a ^c ^k o ⁿ ^a ⁿ ^y ⁱ s ^s ^u ^e ^s ^t h ^a ^t ^c ^o ^u ^l d ^j ^e ^o ^p ^a ^r d ⁱ s ^e ⁱ t s ⁱ n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^c ^e , ^f o ^r ^t h ^e ^p ^u ^r p ^o ^s ^e ^o ^f ^a ⁿ ^a ^l y ^s ⁱ s ^b ^y t h ^e ^A ^u ^d ⁱ t ^a ⁿ ^d ^C ^o ⁿ ^t r o ^l ^C ^o ^m ^m ⁱ t t e ^e ^o ^r ^f o ^r ^a ⁿ ^y ^o ^t h ^e ^r ^p ^u ^r p ^o ^s ^e ^r e ^l a ^t e ^d ^t o ^t h ^e ^a ^u ^d ⁱ t i n ^g p ^r o ^c ^e ^s ^s , ^a ⁿ ^d ^t o ^c ^h ^a ⁿ ⁿ ^e ^l ^t h ^e ^o ^t h ^e ^r ^c ^o ^m ^m ^u ⁿ ⁱ c ^a ^t i o ⁿ ^s ^p ^r o ^v ⁱ d ^e ^d ^f o ^r ⁱ n ^p ^r e ^v ^a ⁱ l i n ^g ^a ^u ^d ⁱ t l e^g ⁱ s ^l a ^t i o ⁿ ^a ⁿ ^d ^o ^t h ^e ^r ^a ^u ^d ⁱ t ^s ^t a ⁿ ^d ^a ^r d ^s .

F . 6 . ^O t h^e ^r ^r ^e ^l e ^v ^a ⁿ ^t ^d ⁱ s ^c ^l o ^s ^u ^r ^e ^s

^N ^o ^t ^a ^p ^p ^l i c ^a ^b ^l e .

F . 7 . ^E ^x ^t e ^r ⁿ ^a ^l ^a ^u ^d ⁱ t o ^r ^r ^e ^p ^o ^r ^t

^S t a^t e ^w ^h ^e ^t h ^e ^r :

F . 7 . 1 . ^T ^h ^e ^I ^C ^F ^R ⁱ n ^f o ^r ^m ^a ^t i o ⁿ ^s ^u ^p ^p ^l i e ^d ^t o ^t h ^e ^m ^a ^r ^k ^e ^t ^h ^a ^s ^b ^e ^e ⁿ ^r ^e ^v ⁱ e ^w ^e ^d ^b ^y ^t h ^e ^e ^x ^t e ^r ⁿ ^a ^l a ^u ^d ⁱ t o ^r , ⁱ n ^w ^h ⁱ c ^h ^c ^a ^s ^e ^t h ^e ^c ^o ^r ^r ^e ^s ^p ^o ⁿ ^d ⁱ n ^g ^r ^e ^p ^o ^r ^t ^s ^h ^o ^u ^l d ^b ^e ^a ^t t a ^c ^h ^e ^d . ^O t h ^e ^r ^w ⁱ s ^e , e^x ^p ^l a ⁱ n ^t h ^e ^r ^e ^a ^s ^o ⁿ ^s ^f o ^r ^t h ^e ^a ^b ^s ^e ⁿ ^c ^e ^o ^f ^t h ⁱ s ^r ^e ^v ⁱ e ^w .

T ^h ^e ^e ^x ^t^e ^rⁿ ^a ^l ^a ^u ^d ⁱ t o ^r ' s ^r^e ^p ^o ^r^t ^o ⁿ ^t^h ^e ^I ^C ^F ^R ⁱⁿ ^f^o ^r^m ^a ^t i o ⁿ ^s ^u ^p ^p ^l i e ^d ^b ^y ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^t^o ^t^h ^e ^m ^a ^r^k ^e ^t i s^a ^t t a ^c ^h ^e ^d ^t o ^t h ⁱ s ^d ^o ^c ^u ^m ^e ⁿ ^t ^a ^s ^a ⁿ ^a ^p ^p ^e ⁿ ^d ⁱ x .

^D ^E ^G ^R ^E ^E ^O ^F ^C ^O ^M ^P ^L ^I A ^N ^C ^E ^W ^I T ^H ^C ^O ^R ^P ^O ^R ^A ^T ^E ^G ^O ^V ^E ^R ^N ^A ^N ^C ^E R^E ^C ^O ^M ^M ^E ^N ^D ^A ^T ^I O ^N ^S

^I ⁿ ^d ⁱ c ^a ^t e ^t h ^e ^d ^e ^g ^r ^e ^e ^t o ^w ^h ⁱ c ^h ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ⁱ s ⁱ n ^c ^o ^m ^p ^l i a ⁿ ^c ^e ^w ⁱ t h ^t h ^e ^r ^e ^c ^o ^m ^m ^e ⁿ ^d ^a ^t i o ⁿ ^s ^o ^f ^t h ^e ^G o ^o ^d ^G o^v ^e ^r ⁿ ^a ⁿ ^c ^e ^C ^o ^d ^e ^f o ^r ^l i s ^t e ^d ^c ^o ^m ^p ^a ⁿ ⁱ e ^s .

^I ^f ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^d ^o ^e ^s ⁿ ^o ^t ^c ^o ^m ^p ^l y ^o ^r ^o ⁿ ^l y ^p ^a ^r ^t i a ^l l y ^c ^o ^m ^p ^l i e ^s ^w ⁱ t h ^a ⁿ ^y ^o ^f ^t h ^e ^r ^e ^c ^o ^m ^m ^e ⁿ ^d ^a ^t i o ⁿ ^s , p ^r ^o ^v ⁱ d ^e ^a ^d ^e ^t a ⁱ l e ^d ^e ^x ^p ^l a ⁿ ^a ^t i o ⁿ ^f o ^r ^s ^o ^d ^o ⁱ n ^g ^s ^u ^c ^h ^t h ^a ^t ^s ^h ^a ^r ^e ^h ^o ^l d ^e ^r ^s , ⁱ n ^v ^e ^s ^t o ^r ^s ^a ⁿ ^d ^t h ^e ^m ^a ^r ^k ^e ^t i n ^g ^e ⁿ ^e ^r ^a ^l ^h ^a ^v ^e ^s ^u f f ⁱ^c ⁱ^e ⁿ ^t ⁱⁿ ^f ^o ^r ^m ^a ^t i o ⁿ ^t^o ^a ^s ^s ^e ^s ^s ^t^h ^e ^c ^o ^m ^p ^a ⁿ ^y '^s ^c ^o ^u ^r ^s ^e ^o ^f ^a ^c ^t i o ⁿ ⁱⁿ ^t^h ⁱ^s r^e ^s ^p ^e ^c ^t . ^G ^e ⁿ ^e ^r ^a ^l ^e ^x ^p l a ⁿ ^a ^t i o ⁿ ^s ^a ^r ^e ⁿ ^o ^t ^a ^c ^c ^e ^p ^t ^a ^b l e .

¹ . ^T ^h ^e ^b ^y ^l a ^w ^s ^o ^f ^l i s ^t e ^d ^c ^o ^m ^p ^a ⁿ ⁱ e ^s ^s ^h ^o ^u ^l d ⁿ ^o ^t ^p ^l a ^c ^e ^a ⁿ ^u ^p ^p ^e ^r ^l i m ⁱ t ^o ⁿ ^t h ^e ^v ^o ^t e ^s ^t h ^a ^t ^c ^a ⁿ ^b ^e c ^a ^s ^t ^b ^y ^a ^s ⁱ n ^g ^l e ^s ^h ^a ^r ^e ^h ^o ^l d ^e ^r , ^o ^r ⁱ m ^p ^o ^s ^e ^o ^t h ^e ^r ^o ^b ^s ^t a ^c ^l e ^s ^t o ^t h ^e ^t a ^k ^e ^o ^v ^e ^r ^o ^f ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^b ^y m^e ^a ⁿ ^s ^o ^f ^s ^h ^a ^r ^e ^p ^u ^r ^c ^h ^a ^s ^e ^s ^o ⁿ ^t h ^e ^m ^a ^r ^k ^e ^t .

C^o ^m ^p ^l i a ⁿ ^t ^X ^E ^x ^p ^l a ⁱ n

² . ^W h ^e ⁿ ^a ^d ^o ^m ⁱ n ^a ⁿ ^t ^a ⁿ ^d ^a ^s ^u ^b ^s ⁱ d ⁱ a ^r ^y ^c ^o ^m ^p ^a ⁿ ^y ^a ^r ^e ^s ^t o ^c ^k ^m ^a ^r ^k ^e ^t ^l i s ^t e ^d , ^t h ^e ^t w ^o ^s ^h ^o ^u ^l d p^r ^o ^v ⁱ d ^e ^d ^e ^t a ⁱ l e ^d ^d ⁱ s ^c ^l o ^s ^u ^r ^e ^o ⁿ :

^a ) ^T ^h ^e ^t y ^p ^e ^o ^f ^a ^c ^t i v ⁱ t y ^t h ^e ^y ^e ⁿ ^g ^a ^g ^e ⁱ n , ^a ⁿ ^d ^a ⁿ ^y ^b ^u ^s ⁱ n ^e ^s ^s ^d ^e ^a ^l i n ^g ^s ^b ^e ^t w ^e ^e ⁿ ^t h ^e ^m , ^a ^s w^e ^l l ^a ^s ^b ^e ^t w ^e ^e ⁿ ^t h ^e ^s ^u ^b ^s ⁱ d ⁱ a ^r ^y ^a ⁿ ^d ^o ^t h ^e ^r ^g ^r ^o ^u ^p ^c ^o ^m ^p ^a ⁿ ⁱ e ^s ;
^b ) ^T ^h ^e ^m ^e ^c ^h ^a ⁿ ⁱ s ^m ^s ⁱ n ^p ^l a ^c ^e ^t o ^r ^e ^s ^o ^l v ^e ^p ^o ^s ^s ⁱ b ^l e ^c ^o ⁿ ^f l i c ^t s ^o ^f ⁱ n ^t e ^r ^e ^s ^t .

C^o ^m ^p ^l i a ⁿ ^t ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n ^N ^o ^t ^a ^p ^p ^l i c ^a ^b ^l e ^X

³ . ^D u ^r ⁱ n ^g ^t h ^e ^a ⁿ ⁿ ^u ^a ^l ^g ^e ⁿ ^e ^r ^a ^l ^m ^e ^e ^t i n ^g ^t h ^e ^c ^h ^a ⁱ r ^m ^a ⁿ ^o ^f ^t h ^e ^b ^o ^a ^r ^d ^s ^h ^o ^u ^l d ^v ^e ^r ^b ^a ^l l y ⁱ n ^f o ^r ^m s ^h ^a ^r ^e ^h ^o ^l ^d ^e ^r ^s ⁱⁿ ^s ^u f f ⁱ^c ⁱ^e ⁿ ^t ^d ^e ^t^a ⁱ^l ^o ^f ^t^h ^e ^m ^o ^s ^t ^r ^e ^l^e ^v ^a ⁿ ^t ^a ^s ^p ^e ^c ^t^s ^o ^f ^t^h ^e ^c ^o ^m ^p ^a ⁿ ^y '^s ^c ^o ^r ^p ^o ^r ^a ^t^e g ^o ^v ^e ^r ⁿ ^a ⁿ ^c ^e , ^s ^u ^p ^p ^l e ^m ^e ⁿ ^t i n ^g ^t h ^e ^w ^r ⁱ t t e ⁿ ⁱ n ^f o ^r ^m ^a ^t i o ⁿ ^c ⁱ r ^c ^u ^l a ^t e ^d ⁱ n ^t h ^e ^a ⁿ ⁿ ^u ^a ^l ^c ^o ^r ^p ^o ^r ^a ^t e g^o ^v ^e ^r ⁿ ^a ⁿ ^c ^e ^r ^e ^p ^o ^r ^t . ^I ⁿ ^p ^a ^r ^t i c ^u ^l a ^r :

^a ) C^h ^a ⁿ ^g ^e ^s ^t a ^k ⁱ n ^g ^p ^l a ^c ^e ^s ⁱ n ^c ^e ^t h ^e ^p ^r ^e ^v ⁱ o ^u ^s ^a ⁿ ⁿ ^u ^a ^l ^g ^e ⁿ ^e ^r ^a ^l ^m ^e ^e ^t i n ^g .

^b ) ^T ^h ^e ^s ^p ^e ^c ⁱ f i c ^r ^e ^a ^s ^o ⁿ ^s ^f o ^r ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ⁿ ^o ^t ^f o ^l l o ^w ⁱ n ^g ^a ^g ⁱ v ^e ⁿ ^G o ^o ^d ^G o ^v ^e ^r ⁿ ^a ⁿ ^c ^e ^C ^o ^d ^e r^e ^c ^o ^m ^m ^e ⁿ ^d ^a ^t i o ⁿ , ^a ⁿ ^d ^a ⁿ ^y ^a ^l t e ^r ⁿ ^a ^t i v ^e ^p ^r ^o ^c ^e ^d ^u ^r ^e ^s ^f o ^l l o ^w ^e ^d ⁱ n ⁱ t s ^s ^t e ^a ^d .

^o ^m ^p ^l i a ⁿ ^t ^X ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n

⁴ . ^T ^h ^e ^c ^o ^m ^p ^a ⁿ ^y ^s ^h ^o ^u ^l d ^d ^r ^a ^w ^u ^p ^a ⁿ ^d ⁱ m ^p ^l e ^m ^e ⁿ ^t ^a ^p ^o ^l i c ^y ^o ^f ^c ^o ^m ^m ^u ⁿ ⁱ c ^a ^t i o ⁿ ^a ⁿ ^d ^c ^o ⁿ ^t a ^c ^t s w ⁱ t h ^s ^h ^a ^r ^e ^h ^o ^l d ^e ^r ^s , ⁱ n ^s ^t i t u ^t i o ⁿ ^a ^l ⁱ n ^v ^e ^s ^t o ^r ^s ^a ⁿ ^d ^p ^r ^o ^x ^y ^a ^d ^v ⁱ s ^o ^r ^s ^t h ^a ^t ^c ^o ^m ^p ^l i e ^s ⁱ n ^f u ^l l ^w ⁱ t h m ^a ^r ^k ^e ^t ^a ^b ^u ^s ^e ^r ^e ^g ^u ^l a ^t i o ⁿ ^s ^a ⁿ ^d ^a ^c ^c ^o ^r ^d ^s ^e ^q ^u ⁱ t a ^b ^l e ^t r ^e ^a ^t m ^e ⁿ ^t ^t o ^s ^h ^a ^r ^e ^h ^o ^l d ^e ^r ^s ⁱ n ^t h ^e ^s ^a ^m ^e p^o ^s ⁱ t i o ⁿ .

^T h ⁱ s ^p ^o ^l i c ^y ^s ^h ^o ^u ^l ^d ^b ^e ^d ⁱ s ^c ^l o ^s ^e ^d ^o ⁿ ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ' s ^w ^e ^b ^s ⁱ t e , ^c ^o ^m ^p ^l e ^t e ^w ⁱ t h ^d ^e ^t a ⁱ l s ^o ^f ^h ^o ^w ⁱ t h ^a ^s ^b ^e ^e ⁿ ^p ^u ^t ⁱ n ^t o ^p ^r ^a ^c ^t i c ^e ^a ⁿ ^d ^t h ^e ⁱ d ^e ⁿ ^t i t i e ^s ^o ^f ^t h ^e ^r ^e ^l e ^v ^a ⁿ ^t ⁱ n ^t e ^r ^l o ^c ^u ^t o ^r ^s ^o ^r ^t h ^o ^s ^e ^c ^h ^a ^r ^g ^e ^d wⁱ t h ⁱ t s ⁱ m ^p ^l e ^m ^e ⁿ ^t a ^t i o ⁿ .

C^o ^m ^p ^l i a ⁿ ^t ^X ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n

⁵ . ^T ^h ^e ^b ^o ^a ^r ^d ^o ^f ^d ⁱ r ^e ^c ^t o ^r ^s ^s ^h ^o ^u ^l d ⁿ ^o ^t ^m ^a ^k ^e ^a ^p ^r ^o ^p ^o ^s ^a ^l ^t o ^t h ^e ^g ^e ⁿ ^e ^r ^a ^l ^m ^e ^e ^t i n ^g ^f o ^r ^t h ^e d ^e ^l e ^g ^a ^t i o ⁿ ^o ^f ^p ^o ^w ^e ^r ^s ^t o ⁱ s ^s ^u ^e ^s ^h ^a ^r ^e ^s ^o ^r ^c ^o ⁿ ^v ^e ^r ^t i b ^l e ^s ^e ^c ^u ^r ⁱ t i e ^s ^w ⁱ t h ^o ^u ^t ^p ^r ^e ^ë e ^m ^p ^t i v ^e s^u ^b ^s ^c ^r ⁱ p ^t i o ⁿ ^r ⁱ g ^h ^t s ^f o ^r ^a ⁿ ^a ^m ^o ^u ⁿ ^t ^e ^x ^c ^e ^e ^d ⁱ n ^g ² ⁰ % ^o ^f ^c ^a ^p ⁱ t a ^l ^a ^t ^t h ^e ^t i m ^e ^o ^f ^s ^u ^c ^h ^d ^e ^l e ^g ^a ^t i o ⁿ .

^W h ^e ⁿ ^a ^b ^o ^a ^r ^d ^a ^p ^p ^r ^o ^v ^e ^s ^t h ^e ⁱ s ^s ^u ^a ⁿ ^c ^e ^o ^f ^s ^h ^a ^r ^e ^s ^o ^r ^c ^o ⁿ ^v ^e ^r ^t i b ^l e ^s ^e ^c ^u ^r ⁱ t i e ^s ^w ⁱ t h ^o ^u ^t ^p ^r ^e ^ë ^e ^m ^p ^t i v ^e s ^u ^b ^s ^c ^r ⁱ p ^t i o ⁿ ^r ⁱ g ^h ^t s , ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^s ^h ^o ^u ^l d ⁱ m ^m ^e ^d ⁱ a ^t e ^l y ^p ^o ^s ^t ^a ^r ^e ^p ^o ^r ^t ^o ⁿ ⁱ t s ^w ^e ^b ^s ⁱ t e ^e ^x ^p ^l a ⁱ n ⁱ n ^g t h^e ^e ^x ^c ^l u ^s ⁱ o ⁿ ^a ^s ^e ⁿ ^v ⁱ s ^a ^g ^e ^d ⁱ n ^c ^o ^m ^p ^a ⁿ ^y ^l e ^g ⁱ s ^l a ^t i o ⁿ .

C^o ^m ^p ^l i a ⁿ ^t ^X ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n

⁶ . ^L i s ^t e ^d ^c ^o ^m ^p ^a ⁿ ⁱ e ^s ^d ^r ^a ^w ⁱ n ^g ^u ^p ^t h ^e ^f o ^l l o ^w ⁱ n ^g ^r ^e ^p ^o ^r ^t s ^o ⁿ ^a ^v ^o ^l u ⁿ ^t a ^r ^y ^o ^r ^c ^o ^m ^p ^u ^l s ^o ^r ^y ^b ^a ^s ⁱ s s ^h ^o ^u ^l d ^p ^u ^b ^l i s ^h ^t h ^e ^m ^o ⁿ ^t h ^e ⁱ r ^w ^e ^b ^s ⁱ t e ^w ^e ^l l ⁱ n ^a ^d ^v ^a ⁿ ^c ^e ^o ^f ^t h ^e ^a ⁿ ⁿ ^u ^a ^l ^g ^e ⁿ ^e ^r ^a ^l ^m ^e ^e ^t i n ^g , ^e ^v ^e ⁿ ⁱ f t h^e ⁱ r ^d ⁱ s ^t r ⁱ b ^u ^t i o ⁿ ⁱ s ⁿ ^o ^t ^o ^b ^l i g ^a ^t o ^r ^y :

^a ) ^R ^e ^p ^o ^r ^t ^o ⁿ ^a ^u ^d ⁱ t o ^r ⁱ n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^c ^e .

^b ) ^R ^e ^v ⁱ e ^w ^s ^o ^f ^t h ^e ^o ^p ^e ^r ^a ^t i o ⁿ ^o ^f ^t h ^e ^a ^u ^d ⁱ t ^c ^o ^m ^m ⁱ t t e ^e ^a ⁿ ^d ^t h ^e ⁿ ^o ^m ⁱ n ^a ^t i o ⁿ ^a ⁿ ^d r^e ^m ^u ⁿ ^e ^r ^a ^t i o ⁿ ^c ^o ^m ^m ⁱ t t e ^e .

^c ) ^A ^u ^d ⁱ t ^c ^o ^m ^m ⁱ t t e ^e ^r ^e ^p ^o ^r ^t ^o ⁿ ^t h ⁱ r ^d ^ë p ^a ^r ^t y ^t r ^a ⁿ ^s ^a ^c ^t i o ⁿ ^s .
^d ) ^R ^e ^p ^o ^r ^t ^o ⁿ ^c ^o ^r ^p ^o ^r ^a ^t e ^s ^o ^c ⁱ a ^l ^r ^e ^s ^p ^o ⁿ ^s ⁱ b ⁱ l i t y ^p ^o ^l i c ^y .

^o ^m ^p ^l i a ⁿ ^t ^X ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n

⁷ . ^T ^h ^e ^c ^o ^m ^p ^a ⁿ ^y ^s ^h ^o ^u ^l d ^b ^r ^o ^a ^d ^c ^a ^s ^t ⁱ t s ^g ^e ⁿ ^e ^r ^a ^l ^m ^e ^e ^t i n ^g ^s ^l i v ^e ^o ⁿ ^t h ^e ^c ^o ^r ^p ^o ^r ^a ^t e ^w ^e ^b ^s ⁱ t e .

C^o ^m ^p ^l i a ⁿ ^t ^X ^E ^x ^p ^l a ⁱ n

⁸ . ^T ^h ^e ^a ^u ^d ⁱ t ^c ^o ^m ^m ⁱ t t e ^e ^s ^h ^o ^u ^l d ^s ^t r ⁱ v ^e ^t o ^e ⁿ ^s ^u ^r ^e ^t h ^a ^t ^t h ^e ^b ^o ^a ^r ^d ^o ^f ^d ⁱ r ^e ^c ^t o ^r ^s ^c ^a ⁿ ^p ^r ^e ^s ^e ⁿ ^t ^t h ^e c ^o ^m ^p ^a ⁿ ^y ' s ^a ^c ^c ^o ^u ⁿ ^t s ^t o ^t h ^e ^g ^e ⁿ ^e ^r ^a ^l ^m ^e ^e ^t i n ^g ^w ⁱ t h ^o ^u ^t ^l i ^m ⁱ t a ^t i o ⁿ ^s ^o ^r ^q ^u ^a ^l i ^f ⁱ c ^a ^t i o ⁿ ^s ⁱ n ^t h ^e a ^u ^d ⁱ t o ^r ' s ^r ^e ^p ^o ^r ^t . ^I ⁿ ^t h ^e ^e ^x ^c ^e ^p ^t i o ⁿ ^a ^l ^c ^a ^s ^e ^t h ^a ^t ^q ^u ^a ^l i ^f ⁱ c ^a ^t ⁱ o ⁿ ^s ^e ^x ⁱ s ^t , ^b ^o ^t h ^t h ^e ^c ^h ^a ⁱ r ^m ^a ⁿ ^o ^f ^t h ^e a ^u ^d ⁱ t ^c ^o ^m ^m ⁱ t t e ^e ^a ⁿ ^d ^t h ^e ^a ^u ^d ⁱ t o ^r ^s ^s ^h ^o ^u ^l d ^g ⁱ v ^e ^a ^c ^l e ^a ^r ^a ^c ^c ^o ^u ⁿ ^t ^t o ^s ^h ^a ^r ^e ^h ^o ^l d ^e ^r ^s ^o ^f ^t h ^e ⁱ r ^s ^c ^o ^p ^e aⁿ ^d ^c ^o ⁿ ^t e ⁿ ^t .

^o ^m ^p ^l i a ⁿ ^t ^X ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n

⁹ . ^T ^h ^e ^c ^o ^m ^p ^a ⁿ ^y ^s ^h ^o ^u ^l d ^d ⁱ s ^c ^l o ^s ^e ⁱ t s ^c ^o ⁿ ^d ⁱ t i o ⁿ ^s ^a ⁿ ^d ^p ^r ^o ^c ^e ^d ^u ^r ^e ^s ^f o ^r ^a ^d ^m ⁱ t t i n ^g ^s ^h ^a ^r ^e o ^w ⁿ ^e ^r ^s ^h ⁱ p , ^t h ^e ^r ⁱ g ^h ^t ^t o ^a ^t t e ⁿ ^d ^g ^e ⁿ ^e ^r ^a ^l ^m ^e ^e ^t i n ^g ^s ^a ⁿ ^d ^t h ^e ^e ^x ^e ^r ^c ⁱ s ^e ^o ^r ^d ^e ^l e ^g ^a ^t i o ⁿ ^o ^f ^v ^o ^t i n ^g rⁱ g ^h ^t s , ^a ⁿ ^d ^d ⁱ s ^p ^l a ^y ^t h ^e ^m ^p ^e ^r ^m ^a ⁿ ^e ⁿ ^t l y ^o ⁿ ⁱ t s ^w ^e ^b ^s ⁱ t e .

^S u ^c ^h ^c ^o ⁿ ^d ⁱ t i o ⁿ ^s ^a ⁿ ^d ^p ^r ^o ^c ^e ^d ^u ^r ^e ^s ^s ^h ^o ^u ^l d ^e ⁿ ^c ^o ^u ^r ^a ^g ^e ^s ^h ^a ^r ^e ^h ^o ^l d ^e ^r ^s ^t o ^a ^t t e ⁿ ^d ^a ⁿ ^d ^e ^x ^e ^r ^c ⁱ s ^e ^t h ^e ⁱ r r ⁱ g ^h ^t s ^a ⁿ ^d ^b ^e ^a ^p ^p ^l i e ^d ⁱ n ^a ⁿ ^o ⁿ ^ë d ⁱ s ^c ^r ⁱ m ⁱ n ^a ^t o ^r ^y ^m ^a ⁿ ⁿ ^e ^r .

C^o ^m ^p ^l i a ⁿ ^t ^X ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n

¹ ⁰ . ^W h ^e ⁿ ^a ⁿ ^a ^c ^c ^r ^e ^d ⁱ t e ^d ^s ^h ^a ^r ^e ^h ^o ^l d ^e ^r ^e ^x ^e ^r ^c ⁱ s ^e ^s ^t h ^e ^r ⁱ g ^h ^t ^t o ^s ^u ^p ^p ^l e ^m ^e ⁿ ^t ^t h ^e ^a ^g ^e ⁿ ^d ^a ^o ^r ^s ^u ^b ^m ⁱ t n^e ^w ^p ^r ^o ^p ^o ^s ^a ^l s ^p ^r ⁱ o ^r ^t o ^t h ^e ^g ^e ⁿ ^e ^r ^a ^l ^m ^e ^e ^t i n ^g , ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^s ^h ^o ^u ^l d :

^a ) ^I ^m ^m ^e ^d ⁱ a ^t e ^l y ^c ⁱ r ^c ^u ^l a ^t e ^t h ^e ^s ^u ^p ^p ^l e ^m ^e ⁿ ^t a ^r ^y ⁱ t e ^m ^s ^a ⁿ ^d ⁿ ^e ^w ^p ^r ^o ^p ^o ^s ^a ^l s .

^b ) ^D i s ^c ^l o ^s ^e ^t h ^e ^m ^o ^d ^e ^l ^o ^f ^a ^t t e ⁿ ^d ^a ⁿ ^c ^e ^c ^a ^r ^d ^o ^r ^p ^r ^o ^x ^y ^a ^p ^p ^o ⁱ n ^t m ^e ⁿ ^t ^o ^r ^r ^e ^m ^o ^t e ^v ^o ^t i n ^g ^f o ^r ^m d ^u ^l y ^m ^o ^d ⁱ f i e ^d ^s ^o ^t h ^a ^t ⁿ ^e ^w ^a ^g ^e ⁿ ^d ^a ⁱ t e ^m ^s ^a ⁿ ^d ^a ^l t e ^r ⁿ ^a ^t i v ^e ^p ^r ^o ^p ^o ^s ^a ^l s ^c ^a ⁿ ^b ^e ^v ^o ^t e ^d ^o ⁿ ⁱ n t h^e ^s ^a ^m ^e ^t e ^r ^m ^s ^a ^s ^t h ^o ^s ^e ^s ^u ^b ^m ⁱ t t e ^d ^b ^y ^t h ^e ^b ^o ^a ^r ^d ^o ^f ^d ⁱ r ^e ^c ^t o ^r ^s .

^c ) ^P u ^t ^a ^l l ^t h ^e ^s ^e ⁱ t e ^m ^s ^o ^r ^a ^l t e ^r ⁿ ^a ^t i v ^e ^p ^r ^o ^p ^o ^s ^a ^l s ^t o ^t h ^e ^v ^o ^t e ^a ^p ^p ^l y ⁱ n ^g ^t h ^e ^s ^a ^m ^e ^v ^o ^t i n ^g r ^u ^l e ^s ^a ^s ^f o ^r ^t h ^o ^s ^e ^s ^u ^b ^m ⁱ t t e ^d ^b ^y ^t h ^e ^b ^o ^a ^r ^d ^o ^f ^d ⁱ r ^e ^c ^t o ^r ^s , ^w ⁱ t h ^p ^a ^r ^t i c ^u ^l a ^r ^r ^e ^g ^a ^r ^d ^t o p^r ^e ^s ^u ^m ^p ^t i o ⁿ ^s ^o ^r ^d ^e ^d ^u ^c ^t i o ⁿ ^s ^a ^b ^o ^u ^t ^t h ^e ^d ⁱ r ^e ^c ^t i o ⁿ ^o ^f ^v ^o ^t e ^s .

^d ) ^A ^f t e ^r ^t h ^e ^g ^e ⁿ ^e ^r ^a ^l ^m ^e ^e ^t i n ^g , ^d ⁱ s ^c ^l o ^s ^e ^t h ^e ^b ^r ^e ^a ^k ^d ^o ^w ⁿ ^o ^f ^v ^o ^t e ^s ^o ⁿ ^s ^u ^c ^h ^s ^u ^p ^p ^l e ^m ^e ⁿ ^t a ^r ^y i t e^m ^s ^o ^r ^a ^l t e ^r ⁿ ^a ^t i v ^e ^p ^r ^o ^p ^o ^s ^a ^l s .

C^o ^m ^p ^l i a ⁿ ^t ^X ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n ^N ^o ^t ^a ^p ^p ^l i c ^a ^b ^l e

¹ ¹ . ^I ⁿ ^t h ^e ^e ^v ^e ⁿ ^t ^t h ^a ^t ^a ^c ^o ^m ^p ^a ⁿ ^y ^p ^l a ⁿ ^s ^t o ^p ^a ^y ^f o ^r ^a ^t t e ⁿ ^d ^a ⁿ ^c ^e ^a ^t ^t h ^e ^g ^e ⁿ ^e ^r ^a ^l ^m ^e ^e ^t i n ^g , ⁱ t ^s ^h ^o ^u ^l d f i r^s ^t ^e ^s ^t a ^b ^l i s ^h ^a ^g ^e ⁿ ^e ^r ^a ^l , ^l o ⁿ ^g ^ë t e ^r ^m ^p ^o ^l i c ^y ⁱ n ^t h ⁱ s ^r ^e ^s ^p ^e ^c ^t .

C^o ^m ^p ^l i a ⁿ ^t ^X ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n ^N ^o ^t ^a ^p ^p ^l i c ^a ^b ^l e

¹ ² . ^T ^h ^e ^B ^o ^a ^r ^d ^o ^f ^D i r ^e ^c ^t o ^r ^s ^s ^h ^o ^u ^l d ^p ^e ^r ^f o ^r ^m ⁱ t s ^d ^u ^t i e ^s ^w ⁱ t h ^u ⁿ ⁱ t y ^o ^f ^p ^u ^r ^p ^o ^s ^e ^a ⁿ ^d i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^j ^u ^d ^g ^e ^m ^e ⁿ ^t , ^a ^c ^c ^o ^r ^d ⁱ n ^g ^t h ^e ^s ^a ^m ^e ^t r ^e ^a ^t m ^e ⁿ ^t ^t o ^a ^l l ^s ^h ^a ^r ^e ^h ^o ^l d ^e ^r ^s ⁱ n ^t h ^e ^s ^a ^m ^e ^p ^o ^s ⁱ t i o ⁿ . ^I ^t ^s ^h ^o ^u ^l ^d ^b ^e ^g ^u ⁱ ^d ^e ^d ^a ^t ^a ^l l ^t i ^m ^e ^s ^b ^y ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ' s ^b ^e ^s ^t ⁱ n ^t e ^r ^e ^s ^t , ^u ⁿ ^d ^e ^r ^s ^t o ^o ^d ^a ^s ^t h ^e c ^r ^e ^a ^t i o ⁿ ^o ^f ^a ^p ^r ^o ^f i t a ^b ^l e ^b ^u ^s ⁱ n ^e ^s ^s ^t h ^a ^t ^p ^r ^o ^m ^o ^t e ^s ⁱ t s ^s ^u ^s ^t a ⁱ n ^a ^b ^l e ^s ^u ^c ^c ^e ^s ^s ^o ^v ^e ^r ^t i m ^e , ^w ^h ⁱ l e m^a ^x ⁱ m ⁱ s ⁱ n ^g ⁱ t s ^e ^c ^o ⁿ ^o ^m ⁱ c ^v ^a ^l u ^e .

^I ⁿ ^p ^u ^r ^s ^u ⁱ n ^g ^t h ^e ^c ^o ^r ^p ^o ^r ^a ^t e ⁱ n ^t e ^r ^e ^s ^t , ⁱ t ^s ^h ^o ^u ^l d ⁿ ^o ^t ^o ⁿ ^l y ^a ^b ⁱ d ^e ^b ^y ^l a ^w ^s ^a ⁿ ^d ^r ^e ^g ^u ^l a ^t i o ⁿ ^s ^a ⁿ ^d c ^o ⁿ ^d ^u ^c ^t ⁱ t s ^e ^l f ^a ^c ^c ^o ^r ^d ⁱ n ^g ^t o ^p ^r ⁱ n ^c ⁱ p ^l e ^s ^o ^f ^g ^o ^o ^d ^f a ⁱ t h , ^e ^t h ⁱ c ^s ^a ⁿ ^d ^r ^e ^s ^p ^e ^c ^t ^f o ^r ^c ^o ^m ^m ^o ⁿ ^l y a ^c ^c ^e ^p ^t e ^d ^c ^u ^s ^t o ^m ^s ^a ⁿ ^d ^g ^o ^o ^d ^p ^r ^a ^c ^t i c ^e ^s , ^b ^u ^t ^a ^l s ^o ^s ^t r ⁱ v ^e ^t o ^r ^e ^c ^o ⁿ ^c ⁱ l e ⁱ t s ^o ^w ⁿ ⁱ n ^t e ^r ^e ^s ^t s ^w ⁱ t h ^t h ^e l e ^g ⁱ t i m ^a ^t e ⁱ n ^t e ^r ^e ^s ^t s ^o ^f ⁱ t s ^e ^m ^p ^l o ^y ^e ^e ^s , ^s ^u ^p ^p ^l i e ^r ^s , ^c ^l i e ⁿ ^t s ^a ⁿ ^d ^o ^t h ^e ^r ^s ^t a ^k ^e ^h ^o ^l d ^e ^r ^s , ^a ^s ^w ^e ^l l ^a ^s ^w ⁱ t h t h^e ⁱ m ^p ^a ^c ^t ^o ^f ⁱ t s ^a ^c ^t i v ⁱ t i e ^s ^o ⁿ ^t h ^e ^b ^r ^o ^a ^d ^e ^r ^c ^o ^m ^m ^u ⁿ ⁱ t y ^a ⁿ ^d ^t h ^e ⁿ ^a ^t u ^r ^a ^l ^e ⁿ ^v ⁱ r ^o ⁿ ^m ^e ⁿ ^t .

C^o ^m ^p ^l i a ⁿ ^t ^X ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n

¹ ³ . ^T ^h ^e ^b ^o ^a ^r ^d ^o ^f ^d ⁱ r ^e ^c ^t o ^r ^s ^s ^h ^o ^u ^l d ^h ^a ^v ^e ^a ⁿ ^o ^p ^t i m ^a ^l ^s ⁱ ^z ^e ^t o ^p ^r ^o ^m ^o ^t e ⁱ t s ^e ^f f i c ⁱ e ⁿ ^t ^f u ⁿ ^c ^t i o ⁿ ⁱ n ^g a ⁿ ^d ^m ^a ^x ⁱ m ⁱ s ^e ^p ^a ^r ^t i c ⁱ p ^a ^t i o ⁿ . ^T ^h ^e ^r ^e ^c ^o ^m ^m ^e ⁿ ^d ^e ^d ^r ^a ⁿ ^g ^e ⁱ s ^a ^c ^c ^o ^r ^d ⁱ n ^g ^l y ^b ^e ^t w ^e ^e ⁿ ^f i v ^e ^a ⁿ ^d f i f t e^e ⁿ ^m ^e ^m ^b ^e ^r ^s .

^o ^m ^p ^l i a ⁿ ^t ^X ^E ^x ^p ^l a ⁱ n

¹ ⁴ . ^T ^h ^e ^b ^o ^a ^r ^d ^o ^f ^d ⁱ r ^e ^c ^t o ^r ^s ^s ^h ^o ^u ^l d ^a ^p ^p ^r ^o ^v ^e ^a ^d ⁱ r ^e ^c ^t o ^r ^s ^e ^l e ^c ^t i o ⁿ ^p ^o ^l i c ^y ^t h ^a ^t :

^a ) ^I ^s ^c ^o ⁿ ^c ^r ^e ^t e ^a ⁿ ^d ^v ^e ^r ⁱ f i a ^b ^l e ;
^b ) ^E n ^s ^u ^r ^e ^s ^t h ^a ^t ^a ^p ^p ^o ⁱ n ^t m ^e ⁿ ^t ^o ^r ^r ^e ^ë e ^l e ^c ^t i o ⁿ ^p ^r ^o ^p ^o ^s ^a ^l s ^a ^r ^e ^b ^a ^s ^e ^d ^o ⁿ ^a ^p ^r ⁱ o ^r ^a ⁿ ^a ^l y ^s ⁱ s ^o ^f t h^e ^b ^o ^a ^r ^d ' s ⁿ ^e ^e ^d ^s ; ^a ⁿ ^d
^c ) ^F ^a ^v ^o ^u ^r ^s ^a ^d ⁱ v ^e ^r ^s ⁱ t y ^o ^f ^k ⁿ ^o ^w ^l e ^d ^g ^e , ^e ^x ^p ^e ^r ⁱ e ⁿ ^c ^e ^a ⁿ ^d ^g ^e ⁿ ^d ^e ^r .

^T ^h ^e ^r ^e ^s ^u ^l t s ^o ^f ^t h ^e ^p ^r ⁱ o ^r ^a ⁿ ^a ^l y ^s ⁱ s ^o ^f ^b ^o ^a ^r ^d ⁿ ^e ^e ^d ^s ^s ^h ^o ^u ^l d ^b ^e ^w ^r ⁱ t t e ⁿ ^u ^p ⁱ n ^t h ^e ⁿ ^o ^m ⁱ n ^a ^t i o ⁿ c ^o ^m ^m ⁱ t t e ^e ' s ^e ^x ^p ^l a ⁿ ^a ^t o ^r ^y ^r ^e ^p ^o ^r ^t , ^t o ^b ^e ^p ^u ^b ^l i s ^h ^e ^d ^w ^h ^e ⁿ ^t h ^e ^g ^e ⁿ ^e ^r ^a ^l ^m ^e ^e ^t i n ^g ⁱ s ^c ^o ⁿ ^v ^e ⁿ ^e ^d ^t h ^a ^t wⁱ l l ^r ^a ^t i f y ^t h ^e ^a ^p ^p ^o ⁱ n ^t m ^e ⁿ ^t ^a ⁿ ^d ^r ^e ^ë e ^l e ^c ^t i o ⁿ ^o ^f ^e ^a ^c ^h ^d ⁱ r ^e ^c ^t o ^r .

^T ^h ^e ^d ⁱ r ^e ^c ^t o ^r ^s ^e ^l e ^c ^t i o ⁿ ^p ^o ^l i c ^y ^s ^h ^o ^u ^l d ^p ^u ^r ^s ^u ^e ^t h ^e ^g ^o ^a ^l ^o ^f ^h ^a ^v ⁱ n ^g ^a ^t ^l e ^a ^s ^t ³ ⁰ % ^o ^f ^t o ^t a ^l ^b ^o ^a ^r ^d p^l a ^c ^e ^s ^o ^c ^c ^u ^p ⁱ e ^d ^b ^y ^w ^o ^m ^e ⁿ ^d ⁱ r ^e ^c ^t o ^r ^s ^b ^e ^f o ^r ^e ^t h ^e ^y ^e ^a ^r ² ⁰ ² ⁰ .

^T ^h ^e ⁿ ^o ^m ⁱ n ^a ^t i o ⁿ ^c ^o ^m ^m ⁱ t t e ^e ^s ^h ^o ^u ^l d ^r ^u ⁿ ^a ⁿ ^a ⁿ ⁿ ^u ^a ^l ^c ^h ^e ^c ^k ^o ⁿ ^c ^o ^m ^p ^l i a ⁿ ^c ^e ^w ⁱ t h ^t h ^e ^d ⁱ r ^e ^c ^t o ^r s^e ^l e ^c ^t i o ⁿ ^p ^o ^l i c ^y ^a ⁿ ^d ^s ^e ^t ^o ^u ^t ⁱ t s ^f i n ^d ⁱ n ^g ^s ⁱ n ^t h ^e ^a ⁿ ⁿ ^u ^a ^l ^c ^o ^r ^p ^o ^r ^a ^t e ^g ^o ^v ^e ^r ⁿ ^a ⁿ ^c ^e ^r ^e ^p ^o ^r ^t .

C^o ^m ^p ^l i a ⁿ ^t ^X ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n

¹ ⁵ . ^P r ^o ^p ^r ⁱ e ^t a ^r ^y ^a ⁿ ^d ⁱ n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^d ⁱ r ^e ^c ^t o ^r ^s ^s ^h ^o ^u ^l d ^o ^c ^c ^u ^p ^y ^a ⁿ ^a ^m ^p ^l e ^m ^a ^j ^o ^r ⁱ t y ^o ^f ^b ^o ^a ^r ^d p ^l a ^c ^e ^s , ^w ^h ⁱ l e ^t h ^e ⁿ ^u ^m ^b ^e ^r ^o ^f ^e ^x ^e ^c ^u ^t i v ^e ^d ⁱ r ^e ^c ^t o ^r ^s ^s ^h ^o ^u ^l d ^b ^e ^t h ^e ^m ⁱ n ⁱ m ^u ^m ^p ^r ^a ^c ^t i c ^a ^l ^b ^e ^a ^r ⁱ n ^g ⁱ n mⁱ n ^d ^t h ^e ^c ^o ^m ^p ^l e ^x ⁱ t y ^o ^f ^t h ^e ^c ^o ^r ^p ^o ^r ^a ^t e ^g ^r ^o ^u ^p ^a ⁿ ^d ^t h ^e ^o ^w ⁿ ^e ^r ^s ^h ⁱ p ⁱ n ^t e ^r ^e ^s ^t s ^t h ^e ^y ^c ^o ⁿ ^t r ^o ^l .

C^o ^m ^p ^l i a ⁿ ^t ^X ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n

¹ ⁶ . ^T ^h ^e ^p ^e ^r ^c ^e ⁿ ^t a ^g ^e ^o ^f ^p ^r ^o ^p ^r ⁱ e ^t a ^r ^y ^d ⁱ r ^e ^c ^t o ^r ^s ^o ^u ^t ^o ^f ^a ^l l ⁿ ^o ⁿ ^ë e ^x ^e ^c ^u ^t i v ^e ^d ⁱ r ^e ^c ^t o ^r ^s ^s ^h ^o ^u ^l d ^b ^e ⁿ ^o g ^r ^e ^a ^t e ^r ^t h ^a ⁿ ^t h ^e ^p ^r ^o ^p ^o ^r ^t i o ⁿ ^b ^e ^t w ^e ^e ⁿ ^t h ^e ^o ^w ⁿ ^e ^r ^s ^h ⁱ p ^s ^t a ^k ^e ^o ^f ^t h ^e ^s ^h ^a ^r ^e ^h ^o ^l d ^e ^r ^s ^t h ^e ^y ^r ^e ^p ^r ^e ^s ^e ⁿ ^t aⁿ ^d ^t h ^e ^r ^e ^m ^a ⁱ n ^d ^e ^r ^o ^f ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ' s ^c ^a ^p ⁱ t a ^l .

^T ^h ⁱ s ^c ^r ⁱ t e ^r ⁱ o ⁿ ^c ^a ⁿ ^b ^e ^r ^e ^l a ^x ^e ^d :

^a ) ^I ⁿ ^l a ^r ^g ^e ^c ^a ^p ^c ^o ^m ^p ^a ⁿ ⁱ e ^s ^w ^h ^e ^r ^e ^f e ^w ^o ^r ⁿ ^o ^e ^q ^u ⁱ t y ^s ^t a ^k ^e ^s ^a ^t t a ⁱ n ^t h ^e ^l e ^g ^a ^l ^t h ^r ^e ^s ^h ^o ^l d ^f o ^r sⁱ g ⁿ ⁱ f i c ^a ⁿ ^t ^s ^h ^a ^r ^e ^h ^o ^l d ⁱ n ^g ^s .

^b ) ^I ⁿ ^c ^o ^m ^p ^a ⁿ ⁱ e ^s ^w ⁱ t h ^a ^p ^l u ^r ^a ^l i t y ^o ^f ^s ^h ^a ^r ^e ^h ^o ^l d ^e ^r ^s ^r ^e ^p ^r ^e ^s ^e ⁿ ^t e ^d ^o ⁿ ^t h ^e ^b ^o ^a ^r ^d ^b ^u ^t ⁿ ^o ^t o^t h ^e ^r ^w ⁱ s ^e ^r ^e ^l a ^t e ^d .

C^o ^m ^p ^l i a ⁿ ^t ^X ^E ^x ^p ^l a ⁱ n

¹ ⁷ . ^I ⁿ ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^d ⁱ r ^e ^c ^t o ^r ^s ^s ^h ^o ^u ^l d ^b ^e ^a ^t ^l e ^a ^s ^t ^h ^a ^l f ^o ^f ^a ^l l ^b ^o ^a ^r ^d ^m ^e ^m ^b ^e ^r ^s . ^H ^o ^w ^e ^v ^e ^r , ^w ^h ^e ⁿ ^t h ^e c ^o ^m ^p ^a ⁿ ^y ^d ^o ^e ^s ⁿ ^o ^t ^h ^a ^v ^e ^a ^l a ^r ^g ^e ^m ^a ^r ^k ^e ^t ^c ^a ^p ⁱ t a ^l i s ^a ^t i o ⁿ , ^o ^r ^w ^h ^e ⁿ ^a ^l a ^r ^g ^e ^c ^a ^p ^c ^o ^m ^p ^a ⁿ ^y ^h ^a ^s s ^h ^a ^r ^e ^h ^o ^l d ^e ^r ^s ⁱ n ^d ⁱ v ⁱ d ^u ^a ^l l y ^o ^r ^c ^o ⁿ ^c ^e ^r ^t e ^d ^l y ^c ^o ⁿ ^t r ^o ^l l i n ^g ^o ^v ^e ^r ³ ⁰ ^p ^e ^r ^c ^e ⁿ ^t ^o ^f ^c ^a ^p ⁱ t a ^l , ⁱ n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t dⁱ r ^e ^c ^t o ^r ^s ^s ^h ^o ^u ^l d ^o ^c ^c ^u ^p ^y , ^a ^t ^l e ^a ^s ^t , ^a ^t h ⁱ r ^d ^o ^f ^b ^o ^a ^r ^d ^p ^l a ^c ^e ^s .

C^o ^m ^p ^l i a ⁿ ^t ^X ^E ^x ^p ^l a ⁱ n

¹ ⁸ . C ^o ^m ^p ^a ⁿ ⁱ e ^s ^s ^h ^o ^u ^l d ^p ^o ^s ^t ^t h ^e ^f o ^l l o ^w ⁱ n ^g ^d ⁱ r ^e ^c ^t o ^r ^p ^a ^r ^t i c ^u ^l a ^r ^s ^o ⁿ ^t h ^e ⁱ r ^w ^e ^b ^s ⁱ t e ^s , ^a ⁿ ^d ^k ^e ^e ^p t h^e ^m ^p ^e ^r ^m ^a ⁿ ^e ⁿ ^t l y ^u ^p ^d ^a ^t e ^d :

^a ) ^B ^a ^c ^k ^g ^r ^o ^u ⁿ ^d ^a ⁿ ^d ^p ^r ^o ^f e ^s ^s ⁱ o ⁿ ^a ^l ^e ^x ^p ^e ^r ⁱ e ⁿ ^c ^e .

^b ) ^D i r ^e ^c ^t o ^r ^s ^h ⁱ p ^s ^h ^e ^l d ⁱ n ^o ^t h ^e ^r ^c ^o ^m ^p ^a ⁿ ⁱ e ^s , ^l i s ^t e ^d ^o ^r ^o ^t h ^e ^r ^w ⁱ s ^e , ^a ⁿ ^d ^o ^t h ^e ^r ^p ^a ⁱ d a^c ^t i v ⁱ t i e ^s ^t h ^e ^y ^e ⁿ ^g ^a ^g ^e ⁱ n , ^o ^f ^w ^h ^a ^t e ^v ^e ^r ⁿ ^a ^t u ^r ^e .

^c ) ^S t a ^t e ^m ^e ⁿ ^t ^o ^f ^t h ^e ^d ⁱ r ^e ^c ^t o ^r ^c ^l a ^s ^s ^t o ^w ^h ⁱ c ^h ^t h ^e ^y ^b ^e ^l o ⁿ ^g , ⁱ n ^t h ^e ^c ^a ^s ^e ^o ^f ^p ^r ^o ^p ^r ⁱ e ^t a ^r ^y dⁱ r ^e ^c ^t o ^r ^s ⁱ n ^d ⁱ c ^a ^t i n ^g ^t h ^e ^s ^h ^a ^r ^e ^h ^o ^l d ^e ^r ^t h ^e ^y ^r ^e ^p ^r ^e ^s ^e ⁿ ^t ^o ^r ^h ^a ^v ^e ^l i n ^k ^s ^w ⁱ t h .

^d ) ^T ^h ^e ^d ^a ^t e ^s ^o ^f ^t h ^e ⁱ r ^f i r ^s ^t ^a ^p ^p ^o ⁱ n ^t m ^e ⁿ ^t ^a ⁿ ^d ^s ^u ^b ^s ^e ^q ^u ^e ⁿ ^t ^r ^e ^ë e ^l e ^c ^t i o ⁿ ^a ^s ^b ^o ^a ^r ^d m^e ^m ^b ^e ^r ^s , ^a ⁿ ^d ;

^e ) ^S h^a ^r ^e ^s ^h ^e ^l d ⁱ n ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^a ⁿ ^d ^a ⁿ ^y ^o ^p ^t i o ⁿ ^s ^o ⁿ ^t h ^e ^s ^a ^m ^e . ¹ ⁹ . ^F ^o ^l l o ^w ⁱ n ^g ^v ^e ^r ⁱ f i c ^a ^t i o ⁿ ^b ^y ^t h ^e ⁿ ^o ^m ⁱ n ^a ^t i o ⁿ ^c ^o ^m ^m ⁱ t t e ^e , ^t h ^e ^a ⁿ ⁿ ^u ^a ^l ^c ^o ^r ^p ^o ^r ^a ^t e ^g ^o ^v ^e ^r ⁿ ^a ⁿ ^c ^e r ^e ^p ^o ^r ^t ^s ^h ^o ^u ^l d ^d ⁱ s ^c ^l o ^s ^e ^t h ^e ^r ^e ^a ^s ^o ⁿ ^s ^f o ^r ^t h ^e ^a ^p ^p ^o ⁱ n ^t m ^e ⁿ ^t ^o ^f ^p ^r ^o ^p ^r ⁱ e ^t a ^r ^y ^d ⁱ r ^e ^c ^t o ^r ^s ^a ^t ^t h ^e ^u ^r ^g ⁱ n ^g o ^f ^s ^h ^a ^r ^e ^h ^o ^l d ^e ^r ^s ^c ^o ⁿ ^t r ^o ^l l i n ^g ^l e ^s ^s ^t h ^a ⁿ ³ ^p ^e ^r ^c ^e ⁿ ^t ^o ^f ^c ^a ^p ⁱ t a ^l ; ^a ⁿ ^d ^e ^x ^p ^l a ⁱ n ^a ⁿ ^y ^r ^e ^j ^e ^c ^t i o ⁿ ^o ^f ^a f o ^r ^m ^a ^l ^r ^e ^q ^u ^e ^s ^t ^f o ^r ^a ^b ^o ^a ^r ^d ^p ^l a ^c ^e ^f r ^o ^m ^s ^h ^a ^r ^e ^h ^o ^l d ^e ^r ^s ^w ^h ^o ^s ^e ^e ^q ^u ⁱ t y ^s ^t a ^k ^e ⁱ s ^e ^q ^u ^a ^l ^t o ^o ^r ^g ^r ^e ^a ^t e ^r t h^a ⁿ ^t h ^a ^t ^o ^f ^o ^t h ^e ^r ^s ^a ^p ^p ^l y ⁱ n ^g ^s ^u ^c ^c ^e ^s ^s ^f u ^l l y ^f o ^r ^a ^p ^r ^o ^p ^r ⁱ e ^t a ^r ^y ^d ⁱ r ^e ^c ^t o ^r ^s ^h ⁱ p .

^o ^m ^p ^l i a ⁿ ^t ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n ^N ^o ^t ^a ^p ^p ^l i c ^a ^b ^l e ^X

² ⁰ . ^P r ^o ^p ^r ⁱ e ^t a ^r ^y ^d ⁱ r ^e ^c ^t o ^r ^s ^s ^h ^o ^u ^l d ^r ^e ^s ⁱ g ⁿ ^w ^h ^e ⁿ ^t h ^e ^s ^h ^a ^r ^e ^h ^o ^l d ^e ^r ^s ^t h ^e ^y ^r ^e ^p ^r ^e ^s ^e ⁿ ^t ^d ⁱ s ^p ^o ^s ^e ^o ^f t h ^e ⁱ r ^o ^w ⁿ ^e ^r ^s ^h ⁱ p ⁱ n ^t e ^r ^e ^s ^t ⁱ n ⁱ t s ^e ⁿ ^t i r ^e ^t y . ^I ^f ^s ^u ^c ^h ^s ^h ^a ^r ^e ^h ^o ^l d ^e ^r ^s ^r ^e ^d ^u ^c ^e ^t h ^e ⁱ r ^s ^t a ^k ^e ^s , ^t h ^e ^r ^e ^b ^y l o ^s ⁱ n ^g ^s ^o ^m ^e ^o ^f ^t h ^e ⁱ ^r ^e ⁿ ^t i t l e ^m ^e ⁿ ^t ^t o ^p ^r ^o ^p ^r ⁱ e ^t a ^r ^y ^d ⁱ ^r ^e ^c ^t o ^r ^s , ^t h ^e ^l a ^t t e ^r ' s ⁿ ^u ^m ^b ^e ^r ^s ^h ^o ^u ^l ^d ^b ^e r^e ^d ^u ^c ^e ^d ^a ^c ^c ^o ^r ^d ⁱ n ^g ^l y .

C^o ^m ^p ^l i a ⁿ ^t ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n ^N ^o ^t ^a ^p ^p ^l i c ^a ^b ^l e ^X

² ¹ . ^T ^h ^e ^b ^o ^a ^r ^d ^o ^f ^d ⁱ r ^e ^c ^t o ^r ^s ^s ^h ^o ^u ^l d ⁿ ^o ^t ^p ^r ^o ^p ^o ^s ^e ^t h ^e ^r ^e ^m ^o ^v ^a ^l ^o ^f ⁱ n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^d ⁱ r ^e ^c ^t o ^r ^s ^b ^e ^f o ^r ^e t h ^e ^e ^x ^p ⁱ r ^y ^o ^f ^t h ^e ⁱ r ^t e ⁿ ^u ^r ^e ^a ^s ^m ^a ⁿ ^d ^a ^t e ^d ^b ^y ^t h ^e ^b ^y ^l a ^w ^s , ^e ^x ^c ^e ^p ^t ^w ^h ^e ^r ^e ^t h ^e ^y ^f i n ^d ^j ^u ^s ^t ^c ^a ^u ^s ^e , b ^a ^s ^e ^d ^o ⁿ ^a ^p ^r ^o ^p ^o ^s ^a ^l ^f r ^o ^m ^t h ^e ⁿ ^o ^m ⁱ n ^a ^t i o ⁿ ^c ^o ^m ^m ⁱ t t e ^e . ^I ⁿ ^p ^a ^r ^t i c ^u ^l a ^r , ^j ^u ^s ^t ^c ^a ^u ^s ^e ^w ⁱ l l ^b ^e p ^r ^e ^s ^u ^m ^e ^d ^w ^h ^e ⁿ ^d ⁱ r ^e ^c ^t o ^r ^s ^t a ^k ^e ^u ^p ⁿ ^e ^w ^p ^o ^s ^t s ^o ^r ^r ^e ^s ^p ^o ⁿ ^s ⁱ b ⁱ l i t i e ^s ^t h ^a ^t ^p ^r ^e ^v ^e ⁿ ^t ^t h ^e ^m ^a ^l l o ^c ^a ^t i n ^g s ^u ^f f i c ⁱ e ⁿ ^t ^t i m ^e ^t o ^t h ^e ^w ^o ^r ^k ^o ^f ^a ^b ^o ^a ^r ^d ^m ^e ^m ^b ^e ^r , ^o ^r ^a ^r ^e ⁱ n ^b ^r ^e ^a ^c ^h ^o ^f ^t h ^e ⁱ r ^f i d ^u ^c ⁱ a ^r ^y ^d ^u ^t i e ^s ^o ^r c ^o ^m ^e ^u ⁿ ^d ^e ^r ^o ⁿ ^e ^o ^f ^t h ^e ^d ⁱ s ^q ^u ^a ^l i f y ⁱ n ^g ^g ^r ^o ^u ⁿ ^d ^s ^f o ^r ^c ^l a ^s ^s ⁱ f i c ^a ^t i o ⁿ ^a ^s ⁱ n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^e ⁿ ^u ^m ^e ^r ^a ^t e ^d i n^a ^p ^p ^l i c ^a ^b ^l e ^l e ^g ⁱ s ^l a ^t i o ⁿ .

^T ^h ^e ^r ^e ^m ^o ^v ^a ^l ^o ^f ⁱ n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^d ⁱ r ^e ^c ^t o ^r ^s ^m ^a ^y ^a ^l s ^o ^b ^e ^p ^r ^o ^p ^o ^s ^e ^d ^w ^h ^e ⁿ ^a ^t a ^k ^e ^o ^v ^e ^r ^b ⁱ d , ^m ^e ^r ^g ^e ^r o ^r ^s ⁱ ^m ⁱ l a ^r ^c ^o ^r ^p ^o ^r ^a ^t e ^t ^r ^a ⁿ ^s ^a ^c ^t i o ⁿ ^a ^l t e ^r ^s ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ' s ^c ^a ^p ⁱ t a ^l ^s ^t ^r ^u ^c ^t ^u ^r ^e , ^p ^r ^o ^v ⁱ ^d ^e ^d ^t h ^e c ^h ^a ⁿ ^g ^e ^s ⁱ n ^b ^o ^a ^r ^d ^m ^e ^m ^b ^e ^r ^s ^h ⁱ p ^e ⁿ ^s ^u ^e ^f r ^o ^m ^t h ^e ^p ^r ^o ^p ^o ^r ^t i o ⁿ ^a ^l i t y ^c ^r ⁱ t e ^r ⁱ o ⁿ ^s ^e ^t ^o ^u ^t ⁱ n r ^e ^c ^o ^m ^m ^e ⁿ ^d ^a ^t i o ⁿ ¹ ⁶ .

C^o ^m ^p ^l i a ⁿ ^t ^X ^E ^x ^p ^l a ⁱ n

² ² . C ^o ^m ^p ^a ⁿ ⁱ e ^s ^s ^h ^o ^u ^l d ^e ^s ^t a ^b ^l i s ^h ^r ^u ^l e ^s ^o ^b ^l i g ⁱ n ^g ^d ⁱ r ^e ^c ^t o ^r ^s ^t o ⁱ n ^f o ^r ^m ^t h ^e ^b ^o ^a ^r ^d ^o ^f ^a ⁿ ^y c ⁱ^r ^c ^u ^m ^s ^t^a ⁿ ^c ^e ^t^h ^a ^t ^m ⁱ^g ^h ^t ^h ^a ^r ^m ^t^h ^e ^o ^r ^g ^a ⁿ ⁱ^s ^a ^t i o ⁿ ' ^s ⁿ ^a ^m ^e ^o ^r ^r ^e ^p ^u ^t^a ^t i o ⁿ , ^t^e ⁿ ^d ^e ^r ⁱⁿ ^g ^t^h ^e ⁱ^r r ^e ^s ⁱ g ⁿ ^a ^t i o ⁿ ^a ^s ^t h ^e ^c ^a ^s ^e ^m ^a ^y ^b ^e , ^w ⁱ t h ^p ^a ^r ^t i c ^u ^l a ^r ^m ^e ⁿ ^t i o ⁿ ^o ^f ^a ⁿ ^y ^c ^r ⁱ m ⁱ n ^a ^l ^c ^h ^a ^r ^g ^e ^s ^b ^r ^o ^u ^g ^h ^t a^g ^a ⁱ n ^s ^t ^t h ^e ^m ^a ⁿ ^d ^t h ^e ^p ^r ^o ^g ^r ^e ^s ^s ^o ^f ^a ⁿ ^y ^s ^u ^b ^s ^e ^q ^u ^e ⁿ ^t ^t r ⁱ a ^l .

^T ^h ^e ^m ^o ^m ^e ⁿ ^t ^a ^d ⁱ r ^e ^c ^t o ^r ⁱ s ⁱ n ^d ⁱ c ^t e ^d ^o ^r ^t r ⁱ e ^d ^f o ^r ^a ⁿ ^y ^o ^f ^t h ^e ^o ^f f e ⁿ ^c ^e ^s ^s ^t a ^t e ^d ⁱ n ^c ^o ^m ^p ^a ⁿ ^y l e ^g ⁱ s ^l a ^t i o ⁿ , ^t h ^e ^b ^o ^a ^r ^d ^o ^f ^d ⁱ r ^e ^c ^t o ^r ^s ^s ^h ^o ^u ^l d ^o ^p ^e ⁿ ^a ⁿ ⁱ n ^v ^e ^s ^t i g ^a ^t i o ⁿ ^a ⁿ ^d , ⁱ n ^l i g ^h ^t ^o ^f ^t h ^e ^p ^a ^r ^t i c ^u ^l a ^r c ⁱ r ^c ^u ^m ^s ^t a ⁿ ^c ^e ^s , ^d ^e ^c ⁱ d ^e ^w ^h ^e ^t h ^e ^r ^o ^r ⁿ ^o ^t ^h ^e ^o ^r ^s ^h ^e ^s ^h ^o ^u ^l d ^b ^e ^c ^a ^l l e ^d ^o ⁿ ^t o ^r ^e ^s ⁱ g ⁿ . ^T ^h ^e ^b ^o ^a ^r ^d s ^h ^o ^u ^l d ^g ⁱ v ^e ^a ^r ^e ^a ^s ^o ⁿ ^e ^d ^a ^c ^c ^o ^u ⁿ ^t ^o ^f ^a ^l l ^s ^u ^c ^h ^d ^e ^t e ^r ^m ⁱ n ^a ^t i o ⁿ ^s ⁱ n ^t h ^e ^a ⁿ ⁿ ^u ^a ^l ^c ^o ^r ^p ^o ^r ^a ^t e g^o ^v ^e ^r ⁿ ^a ⁿ ^c ^e ^r ^e ^p ^o ^r ^t .

^o ^m ^p ^l i a ⁿ ^t ^X ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n

² ³ . ^D i r ^e ^c ^t o ^r ^s ^s ^h ^o ^u ^l d ^e ^x ^p ^r ^e ^s ^s ^c ^l e ^a ^r ^o ^p ^p ^o ^s ⁱ t i o ⁿ ^w ^h ^e ⁿ ^t h ^e ^y ^f e ^e ^l ^a ^p ^r ^o ^p ^o ^s ^a ^l ^s ^u ^b ^m ⁱ t t e ^d ^f o ^r ^t h ^e b^o ^a ^r ^d ' ^s ^a ^p ^p ^r ^o ^v ^a ^l ^m ⁱ^g ^h ^t ^d ^a ^m ^a ^g ^e ^t^h ^e ^c ^o ^r ^p ^o ^r ^a ^t^e ⁱⁿ ^t^e ^r ^e ^s ^t . ^I ⁿ ^p ^a ^r ^t i c ^u ^l^a ^r , ⁱⁿ ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t^s ^a ⁿ ^d

o ^t h ^e ^r ^d ⁱ r ^e ^c ^t o ^r ^s ⁿ ^o ^t ^s ^u ^b ^j ^e ^c ^t ^t o ^p ^o ^t e ⁿ ^t i a ^l ^c ^o ⁿ ^f l i c ^t s ^o ^f ⁱ n ^t e ^r ^e ^s ^t ^s ^h ^o ^u ^l d ^s ^t r ^e ⁿ ^u ^o ^u ^s ^l y ^c ^h ^a ^l l e ⁿ ^g ^e ^a ⁿ ^y d^e ^c ⁱ s ⁱ o ⁿ ^t h ^a ^t ^c ^o ^u ^l d ^h ^a ^r ^m ^t h ^e ⁱ n ^t e ^r ^e ^s ^t s ^o ^f ^s ^h ^a ^r ^e ^h ^o ^l d ^e ^r ^s ^l a ^c ^k ⁱ n ^g ^b ^o ^a ^r ^d ^r ^e ^p ^r ^e ^s ^e ⁿ ^t a ^t i o ⁿ .

^W h ^e ⁿ ^t h ^e ^b ^o ^a ^r ^d ^m ^a ^k ^e ^s ^m ^a ^t e ^r ⁱ a ^l ^o ^r ^r ^e ⁱ t e ^r ^a ^t e ^d ^d ^e ^c ⁱ s ⁱ o ⁿ ^s ^a ^b ^o ^u ^t ^w ^h ⁱ c ^h ^a ^d ⁱ r ^e ^c ^t o ^r ^h ^a ^s e ^x ^p ^r ^e ^s ^s ^e ^d ^s ^e ^r ⁱ o ^u ^s ^r ^e ^s ^e ^r ^v ^a ^t i o ⁿ ^s , ^t h ^e ⁿ ^h ^e ^o ^r ^s ^h ^e ^m ^u ^s ^t ^d ^r ^a ^w ^t h ^e ^p ^e ^r ^t i n ^e ⁿ ^t ^c ^o ⁿ ^c ^l u ^s ⁱ o ⁿ ^s . ^D i r ^e ^c ^t o ^r ^s ^r ^e ^s ⁱ g ⁿ ⁱ n ^g ^f o ^r ^s ^u ^c ^h ^c ^a ^u ^s ^e ^s ^s ^h ^o ^u ^l d ^s ^e ^t ^o ^u ^t ^t h ^e ⁱ r ^r ^e ^a ^s ^o ⁿ ^s ⁱ n ^t h ^e ^l e ^t t e ^r ^r ^e ^f e ^r ^r ^e ^d ^t o ⁱ n t h^e ⁿ ^e ^x ^t ^r ^e ^c ^o ^m ^m ^e ⁿ ^d ^a ^t i o ⁿ .

^T ^h ^e ^t e ^r ^m ^s ^o ^f ^t h ⁱ s ^r ^e ^c ^o ^m ^m ^e ⁿ ^d ^a ^t i o ⁿ ^a ^l s ^o ^a ^p ^p ^l y ^t o ^t h ^e ^s ^e ^c ^r ^e ^t a ^r ^y ^o ^f ^t h ^e ^b ^o ^a ^r ^d , ^e ^v ^e ⁿ ⁱ f ^h ^e ^o ^r ^s ^h ^e i sⁿ ^o ^t ^a ^d ⁱ r ^e ^c ^t o ^r .

^o ^m ^p ^l i a ⁿ ^t ^X ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n ^N ^o ^t ^a ^p ^p ^l i c ^a ^b ^l e

² ⁴ . ^D i r ^e ^c ^t o ^r ^s ^w ^h ^o ^g ⁱ v ^e ^u ^p ^t h ^e ⁱ r ^p ^l a ^c ^e ^b ^e ^f o ^r ^e ^t h ^e ⁱ r ^t e ⁿ ^u ^r ^e ^e ^x ^p ⁱ r ^e ^s , ^t h ^r ^o ^u ^g ^h ^r ^e ^s ⁱ g ⁿ ^a ^t i o ⁿ ^o ^r o ^t h ^e ^r ^w ⁱ s ^e , ^s ^h ^o ^u ^l d ^s ^t a ^t e ^t h ^e ⁱ r ^r ^e ^a ^s ^o ⁿ ^s ⁱ n ^a ^l e ^t t e ^r ^t o ^b ^e ^s ^e ⁿ ^t ^t o ^a ^l l ^m ^e ^m ^b ^e ^r ^s ^o ^f ^t h ^e ^b ^o ^a ^r ^d . ^W h ^e ^t h ^e ^r ^o ^r ⁿ ^o ^t ^s ^u ^c ^h ^r ^e ^s ⁱ g ⁿ ^a ^t i o ⁿ ⁱ s ^d ⁱ s ^c ^l o ^s ^e ^d ^a ^s ^a ^m ^a ^t e ^r ⁱ a ^l ^e ^v ^e ⁿ ^t , ^t h ^e ^m ^o ^t i v ^a ^t i n ^g ^f a ^c ^t o ^r ^s s^h ^o ^u ^l d ^b ^e ^e ^x ^p ^l a ⁱ n ^e ^d ⁱ n ^t h ^e ^a ⁿ ⁿ ^u ^a ^l ^c ^o ^r ^p ^o ^r ^a ^t e ^g ^o ^v ^e ^r ⁿ ^a ⁿ ^c ^e ^r ^e ^p ^o ^r ^t .

C^o ^m ^p ^l i a ⁿ ^t ^X ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n ^N ^o ^t ^a ^p ^p ^l i c ^a ^b ^l e

² ⁵ . ^T ^h ^e ⁿ ^o ^m ⁱ n ^a ^t i o ⁿ ^c ^o ^m ^m ⁱ t t e ^e ^s ^h ^o ^u ^l d ^e ⁿ ^s ^u ^r ^e ^t h ^a ^t ⁿ ^o ⁿ ^ë e ^x ^e ^c ^u ^t i v ^e ^d ⁱ r ^e ^c ^t o ^r ^s ^h ^a ^v ^e ^s ^u ^f f i c ⁱ e ⁿ ^t t i m^e ^a ^v ^a ⁱ l a ^b ^l e ^t o ^d ⁱ s ^c ^h ^a ^r ^g ^e ^t h ^e ⁱ r ^r ^e ^s ^p ^o ⁿ ^s ⁱ b ⁱ l i t i e ^s ^e ^f f e ^c ^t i v ^e ^l y .

^T ^h ^e ^b ^o ^a ^r ^d ^o ^f ^d ⁱ r ^e ^c ^t o ^r ^s ^r ^e ^g ^u ^l a ^t i o ⁿ ^s ^s ^h ^o ^u ^l d ^l a ^y ^d ^o ^w ⁿ ^t h ^e ^m ^a ^x ⁱ m ^u ^m ⁿ ^u ^m ^b ^e ^r ^o ^f ^c ^o ^m ^p ^a ⁿ ^y b^o ^a ^r ^d ^s ^o ⁿ ^w ^h ⁱ c ^h ^d ⁱ r ^e ^c ^t o ^r ^s ^c ^a ⁿ ^s ^e ^r ^v ^e .

C^o ^m ^p ^l i a ⁿ ^t ^X ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n

² ⁶ . ^T ^h ^e ^b ^o ^a ^r ^d ^s ^h ^o ^u ^l d ^m ^e ^e ^t ^w ⁱ t h ^t h ^e ⁿ ^e ^c ^e ^s ^s ^a ^r ^y ^f r ^e ^q ^u ^e ⁿ ^c ^y ^t o ^p ^r ^o ^p ^e ^r ^l y ^p ^e ^r ^f o ^r ^m ⁱ t s ^f u ⁿ ^c ^t i o ⁿ ^s , e ⁱ g ^h ^t ^t i m ^e ^s ^a ^y ^e ^a ^r ^a ^t ^l e ^a ^s ^t , ⁱ n ^a ^c ^c ^o ^r ^d ^a ⁿ ^c ^e ^w ⁱ t h ^a ^c ^a ^l e ⁿ ^d ^a ^r ^a ⁿ ^d ^a ^g ^e ⁿ ^d ^a ^s ^s ^e ^t ^a ^t ^t h ^e ^s ^t a ^r ^t ^o ^f ^t h ^e y^e ^a ^r , ^t o ^w ^h ⁱ c ^h ^e ^a ^c ^h ^d ⁱ r ^e ^c ^t o ^r ^m ^a ^y ^p ^r ^o ^p ^o ^s ^e ^t h ^e ^a ^d ^d ⁱ t i o ⁿ ^o ^f ⁱ n ⁱ t i a ^l l y ^u ⁿ ^s ^c ^h ^e ^d ^u ^l e ^d ⁱ t e ^m ^s .

C^o ^m ^p ^l i a ⁿ ^t ^X ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n

² ⁷ . ^D i r ^e ^c ^t o ^r ^a ^b ^s ^e ⁿ ^c ^e ^s ^s ^h ^o ^u ^l d ^b ^e ^k ^e ^p ^t ^t o ^t h ^e ^b ^a ^r ^e ^m ⁱ n ⁱ m ^u ^m ^a ⁿ ^d ^q ^u ^a ⁿ ^t i f i e ^d ⁱ n ^t h ^e ^a ⁿ ⁿ ^u ^a ^l c ^o ^r ^p ^o ^r ^a ^t e ^g ^o ^v ^e ^r ⁿ ^a ⁿ ^c ^e ^r ^e ^p ^o ^r ^t . ^I ⁿ ^t h ^e ^e ^v ^e ⁿ ^t ^o ^f ^a ^b ^s ^e ⁿ ^c ^e , ^d ⁱ r ^e ^c ^t o ^r ^s ^s ^h ^o ^u ^l d ^d ^e ^l e ^g ^a ^t e ^t h ^e ⁱ r ^p ^o ^w ^e ^r ^s o^f ^r ^e ^p ^r ^e ^s ^e ⁿ ^t a ^t i o ⁿ ^w ⁱ t h ^t h ^e ^a ^p ^p ^r ^o ^p ^r ⁱ a ^t e ⁱ n ^s ^t r ^u ^c ^t i o ⁿ ^s .

C^o ^m ^p ^l i a ⁿ ^t ^X ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n

² ⁸ . ^W h ^e ⁿ ^d ⁱ r ^e ^c ^t o ^r ^s ^o ^r ^t h ^e ^s ^e ^c ^r ^e ^t a ^r ^y ^e ^x ^p ^r ^e ^s ^s ^c ^o ⁿ ^c ^e ^r ⁿ ^s ^a ^b ^o ^u ^t ^s ^o ^m ^e ^p ^r ^o ^p ^o ^s ^a ^l ^o ^r , ⁱ n ^t h ^e ^c ^a ^s ^e ^o ^f ^d ⁱ ^r ^e ^c ^t o ^r ^s , ^a ^b ^o ^u ^t ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ' s ^p ^e ^r ^f o ^r ^m ^a ⁿ ^c ^e , ^a ⁿ ^d ^s ^u ^c ^h ^c ^o ⁿ ^c ^e ^r ⁿ ^s ^a ^r ^e ⁿ ^o ^t ^r ^e ^s ^o ^l v ^e ^d ⁱ n ^t h ^e m ^e ^e ^t i n ^g , ^t h ^e ^y ^s ^h ^o ^u ^l d ^b ^e ^r ^e ^c ^o ^r ^d ^e ^d ⁱ n ^t h ^e ^m ⁱ n ^u ^t e ^b ^o ^o ^k ⁱ f ^t h ^e ^p ^e ^r ^s ^o ⁿ ^e ^x ^p ^r ^e ^s ^s ⁱ n ^g ^t h ^e ^m ^s ^o r^e ^q ^u ^e ^s ^t^s .

C^o ^m ^p ^l i a ⁿ ^t ^X ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n ^N ^o ^t ^a ^p ^p ^l i c ^a ^b ^l e

² ⁹ . ^T ^h ^e ^c ^o ^m ^p ^a ⁿ ^y ^s ^h ^o ^u ^l d ^p ^r ^o ^v ⁱ d ^e ^s ^u ⁱ t a ^b ^l e ^c ^h ^a ⁿ ⁿ ^e ^l s ^f o ^r ^d ⁱ r ^e ^c ^t o ^r ^s ^t o ^o ^b ^t a ⁱ n ^t h ^e ^a ^d ^v ⁱ c ^e ^t h ^e ^y n ^e ^e ^d ^t o ^c ^a ^r ^r ^y ^o ^u ^t ^t h ^e ⁱ r ^d ^u ^t i e ^s , ^e ^x ^t e ⁿ ^d ⁱ n ^g ⁱ f ⁿ ^e ^c ^e ^s ^s ^a ^r ^y ^t o ^e ^x ^t e ^r ⁿ ^a ^l ^a ^s ^s ⁱ s ^t a ⁿ ^c ^e ^a ^t ^t h ^e c^o ^m ^p ^a ⁿ ^y ' s ^e ^x ^p ^e ⁿ ^s ^e .

^o ^m ^p ^l i a ⁿ ^t ^X ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n

³ ⁰ . ^R ^e ^g ^a ^r ^d ^l e ^s ^s ^o ^f ^t h ^e ^k ⁿ ^o ^w ^l e ^d ^g ^e ^d ⁱ r ^e ^c ^t o ^r ^s ^m ^u ^s ^t ^p ^o ^s ^s ^e ^s ^s ^t o ^c ^a ^r ^r ^y ^o ^u ^t ^t h ^e ⁱ r ^d ^u ^t i e ^s , ^t h ^e ^y ^s ^h ^o ^u ^l d a^l s ^o ^b ^e ^o ^f f e ^r ^e ^d ^r ^e ^f r ^e ^s ^h ^e ^r ^p ^r ^o ^g ^r ^a ^m ^m ^e ^s ^w ^h ^e ⁿ ^c ⁱ r ^c ^u ^m ^s ^t a ⁿ ^c ^e ^s ^s ^o ^a ^d ^v ⁱ s ^e .

^o ^m ^p ^l i a ⁿ ^t ^X ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n

³ ¹ . ^T ^h ^e ^a ^g ^e ⁿ ^d ^a ^s ^o ^f ^b ^o ^a ^r ^d ^m ^e ^e ^t i n ^g ^s ^s ^h ^o ^u ^l d ^c ^l e ^a ^r ^l y ⁱ n ^d ⁱ c ^a ^t e ^o ⁿ ^w ^h ⁱ c ^h ^p ^o ⁱ n ^t s ^d ⁱ r ^e ^c ^t o ^r ^s ^m ^u ^s ^t a ^r ^r ⁱ v ^e ^a ^t ^a ^d ^e ^c ⁱ s ⁱ o ⁿ , ^s ^o ^t h ^e ^y ^c ^a ⁿ ^s ^t u ^d ^y ^t h ^e ^m ^a ^t t e ^r ^b ^e ^f o ^r ^e ^h ^a ⁿ ^d ^o ^r ^g ^a ^t h ^e ^r ^t o ^g ^e ^t h ^e ^r ^t h ^e ^m ^a ^t e ^r ⁱ a ^l t h^e ^y ⁿ ^e ^e ^d .

^F ^o ^r ^r ^e ^a ^s ^o ⁿ ^s ^o ^f ^u ^r ^g ^e ⁿ ^c ^y , ^t h ^e ^c ^h ^a ⁱ r ^m ^a ⁿ ^m ^a ^y ^w ⁱ s ^h ^t o ^p ^r ^e ^s ^e ⁿ ^t ^d ^e ^c ⁱ s ⁱ o ⁿ ^s ^o ^r ^r ^e ^s ^o ^l u ^t i o ⁿ ^s ^f o ^r ^b ^o ^a ^r ^d a ^p ^p ^r ^o ^v ^a ^l ^t h ^a ^t ^w ^e ^r ^e ⁿ ^o ^t ^o ⁿ ^t h ^e ^m ^e ^e ^t i n ^g ^a ^g ^e ⁿ ^d ^a . ^I ⁿ ^s ^u ^c ^h ^e ^x ^c ^e ^p ^t i o ⁿ ^a ^l ^c ⁱ r ^c ^u ^m ^s ^t a ⁿ ^c ^e ^s , ^t h ^e ⁱ r i n ^c ^l u ^s ⁱ o ⁿ ^w ⁱ l l ^r ^e ^q ^u ⁱ r ^e ^t h ^e ^e ^x ^p ^r ^e ^s ^s ^p ^r ⁱ o ^r ^c ^o ⁿ ^s ^e ⁿ ^t , ^d ^u ^l y ^m ⁱ n ^u ^t e ^d , ^o ^f ^t h ^e ^m ^a ^j ^o ^r ⁱ t y ^o ^f ^d ⁱ r ^e ^c ^t o ^r ^s p^r ^e ^s ^e ⁿ ^t .

^o ^m ^p ^l i a ⁿ ^t ^X ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n

³ ² . ^D i r ^e ^c ^t o ^r ^s ^s ^h ^o ^u ^l d ^b ^e ^r ^e ^g ^u ^l a ^r ^l y ⁱ n ^f o ^r ^m ^e ^d ^o ^f ^m ^o ^v ^e ^m ^e ⁿ ^t s ⁱ n ^s ^h ^a ^r ^e ^o ^w ⁿ ^e ^r ^s ^h ⁱ p ^a ⁿ ^d ^o ^f ^t h ^e vⁱ e ^w ^s ^o ^f ^m ^a ^j ^o ^r ^s ^h ^a ^r ^e ^h ^o ^l d ^e ^r ^s , ⁱ n ^v ^e ^s ^t o ^r ^s ^a ⁿ ^d ^r ^a ^t i n ^g ^a ^g ^e ⁿ ^c ⁱ e ^s ^o ⁿ ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^a ⁿ ^d ⁱ t s ^g ^r ^o ^u ^p .

^o ^m ^p ^l i a ⁿ ^t ^X ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n

³ ³ . ^T ^h ^e ^c ^h ^a ⁱ r ^m ^a ⁿ , ^a ^s ^t h ^e ^p ^e ^r ^s ^o ⁿ ^c ^h ^a ^r ^g ^e ^d ^w ⁱ t h ^t h ^e ^e ^f f i c ⁱ e ⁿ ^t ^f u ⁿ ^c ^t i o ⁿ ⁱ n ^g ^o ^f ^t h ^e ^b ^o ^a ^r ^d ^o ^f d ⁱ^r ^e ^c ^t^o ^r ^s , ⁱⁿ ^a ^d ^d ⁱ t i o ⁿ ^t^o ^t^h ^e f u ⁿ ^c ^t i o ⁿ ^s ^a ^s ^s ⁱ^g ⁿ ^e ^d ^b ^y ^l^a ^w ^a ⁿ ^d ^t^h ^e ^c ^o ^m ^p ^a ⁿ ^y '^s ^b ^y ^l^a ^w ^s , ^s ^h ^o ^u ^l ^d p ^r ^e ^p ^a ^r ^e ^a ⁿ ^d ^s ^u ^b ^m ⁱ t ^t o ^t h ^e ^b ^o ^a ^r ^d ^a ^s ^c ^h ^e ^d ^u ^l e ^o ^f ^m ^e ^e ^t i n ^g ^d ^a ^t e ^s ^a ⁿ ^d ^a ^g ^e ⁿ ^d ^a ^s ; ^o ^r ^g ^a ⁿ ⁱ s ^e ^a ⁿ ^d c ^o ^o ^r ^d ⁱ n ^a ^t e ^r ^e ^g ^u ^l a ^r ^e ^v ^a ^l ^u ^a ^t i o ⁿ ^s ^o ^f ^t h ^e ^b ^o ^a ^r ^d ^a ⁿ ^d , ^w ^h ^e ^r ^e ^a ^p ^p ^r ^o ^p ^r ⁱ a ^t e , ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ' s ^c ^h ⁱ e ^f e ^x ^e ^c ^u ^t i v ^e ^o ^f f i c ^e ^r ; ^e ^x ^e ^r ^c ⁱ s ^e ^l e ^a ^d ^e ^r ^s ^h ⁱ p ^o ^f ^t h ^e ^b ^o ^a ^r ^d ^a ⁿ ^d ^b ^e ^a ^c ^c ^o ^u ⁿ ^t a ^b ^l e ^f o ^r ⁱ t s ^p ^r ^o ^p ^e ^r f u ⁿ ^c ^t i o ⁿ ⁱ n ^g ; ^e ⁿ ^s ^u ^r ^e ^t h ^a ^t ^s ^u ^f f i c ⁱ e ⁿ ^t ^t i m ^e ⁱ s ^g ⁱ v ^e ⁿ ^t o ^t h ^e ^d ⁱ s ^c ^u ^s ^s ⁱ o ⁿ ^o ^f ^s ^t r ^a ^t e ^g ⁱ c ⁱ s ^s ^u ^e ^s , ^a ⁿ ^d a^p ^p ^r ^o ^v ^e ^a ⁿ ^d ^r ^e ^v ⁱ e ^w ^r ^e ^f r ^e ^s ^h ^e ^r ^c ^o ^u ^r ^s ^e ^s ^f o ^r ^e ^a ^c ^h ^d ⁱ r ^e ^c ^t o ^r , ^w ^h ^e ⁿ ^c ⁱ r ^c ^u ^m ^s ^t a ⁿ ^c ^e ^s ^s ^o ^a ^d ^v ⁱ s ^e .

C^o ^m ^p ^l i a ⁿ ^t ^X ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n

³ ⁴ . ^W h ^e ⁿ ^a ^l e ^a ^d ⁱ n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^d ⁱ r ^e ^c ^t o ^r ^h ^a ^s ^b ^e ^e ⁿ ^a ^p ^p ^o ⁱ n ^t e ^d , ^t h ^e ^b ^y ^l a ^w ^s ^o ^r ^b ^o ^a ^r ^d ^o ^f ^d ⁱ r ^e ^c ^t o ^r ^s r ^e ^g ^u ^l a ^t i o ⁿ ^s ^s ^h ^o ^u ^l d ^g ^r ^a ⁿ ^t ^h ⁱ m ^o ^r ^h ^e ^r ^t h ^e ^f o ^l l o ^w ⁱ n ^g ^p ^o ^w ^e ^r ^s ^o ^v ^e ^r ^a ⁿ ^d ^a ^b ^o ^v ^e ^t h ^o ^s ^e ^c ^o ⁿ ^f e ^r ^r ^e ^d b ^y ^l a ^w : ^c ^h ^a ⁱ r ^t h ^e ^b ^o ^a ^r ^d ^o ^f ^d ⁱ r ^e ^c ^t o ^r ^s ⁱ n ^t h ^e ^a ^b ^s ^e ⁿ ^c ^e ^o ^f ^t h ^e ^c ^h ^a ⁱ r ^m ^a ⁿ ^o ^r ^v ⁱ c ^e ^c ^h ^a ⁱ r ^m ^e ⁿ ; ^g ⁱ v ^e v ^o ⁱ c ^e ^t o ^t h ^e ^c ^o ⁿ ^c ^e ^r ⁿ ^s ^o ^f ⁿ ^o ⁿ ^ë e ^x ^e ^c ^u ^t i v ^e ^d ⁱ r ^e ^c ^t o ^r ^s ; ^m ^a ⁱ n ^t a ⁱ n ^c ^o ⁿ ^t a ^c ^t s ^w ⁱ t h ⁱ n ^v ^e ^s ^t o ^r ^s ^a ⁿ ^d s ^h ^a ^r ^e ^h ^o ^l d ^e ^r ^s ^t o ^h ^e ^a ^r ^t h ^e ⁱ r ^v ⁱ e ^w ^s ^a ⁿ ^d ^d ^e ^v ^e ^l o ^p ^a ^b ^a ^l a ⁿ ^c ^e ^d ^u ⁿ ^d ^e ^r ^s ^t a ⁿ ^d ⁱ n ^g ^o ^f ^t h ^e ⁱ r ^c ^o ⁿ ^c ^e ^r ⁿ ^s , e ^s ^p ^e ^c ⁱ a ^l l y ^t h ^o ^s ^e ^t o ^d ^o ^w ⁱ t h ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ' s ^c ^o ^r ^p ^o ^r ^a ^t e ^g ^o ^v ^e ^r ⁿ ^a ⁿ ^c ^e ; ^a ⁿ ^d ^c ^o ^o ^r ^d ⁱ n ^a ^t e ^t h ^e c ^h ^a ⁱ ^r ^m ^a ⁿ ' s ^s ^u ^c ^c ^e ^s ^s ⁱ o ⁿ ^p ^l a ⁿ .

³ ⁵ . ^T h ^e ^b ^o ^a ^r ^d ^s ^e ^c ^r ^e ^t a ^r ^y ^s ^h ^o ^u ^l ^d ^s ^t ^r ⁱ ^v ^e ^t o ^e ⁿ ^s ^u ^r ^e ^t h ^a ^t ^t h ^e ^b ^o ^a ^r ^d ' s ^a ^c ^t i o ⁿ ^s ^a ⁿ ^d ^d ^e ^c ⁱ s ⁱ o ⁿ ^s ^a ^r ^e i n ^f o ^r ^m ^e ^d ^b ^y ^t h ^e ^g ^o ^v ^e ^r ⁿ ^a ⁿ ^c ^e ^r ^e ^c ^o ^m ^m ^e ⁿ ^d ^a ^t i o ⁿ ^s ^o ^f ^t h ^e ^G o ^o ^d ^G o ^v ^e ^r ⁿ ^a ⁿ ^c ^e ^C ^o ^d ^e ^o ^f ^r ^e ^l e ^v ^a ⁿ ^c ^e t o^t h ^e ^c ^o ^m ^p ^a ⁿ ^y .

C^o ^m ^p ^l i a ⁿ ^t ^X ^E ^x ^p ^l a ⁱ n

³ ⁶ . ^T ^h ^e ^b ^o ^a ^r ^d ⁱ n ^f u ^l l ^s ^h ^o ^u ^l d ^c ^o ⁿ ^d ^u ^c ^t ^a ⁿ ^a ⁿ ⁿ ^u ^a ^l ^e ^v ^a ^l u ^a ^t i o ⁿ , ^a ^d ^o ^p ^t i n ^g , ^w ^h ^e ^r ^e ⁿ ^e ^c ^e ^s ^s ^a ^r ^y , ^a ⁿ a^c ^t i o ⁿ ^p ^l a ⁿ ^t o ^c ^o ^r ^r ^e ^c ^t ^w ^e ^a ^k ⁿ ^e ^s ^s ^d ^e ^t e ^c ^t e ^d ⁱ n :

^a ) ^T ^h ^e ^q ^u ^a ^l i t y ^a ⁿ ^d ^e ^f f i c ⁱ^e ⁿ ^c ^y ^o ^f ^t^h ^e ^b ^o ^a ^r ^d ' ^s ^o ^p ^e ^r ^a ^t i o ⁿ .

^b ) ^T ^h ^e ^p ^e ^r ^f o ^r ^m ^a ⁿ ^c ^e ^a ⁿ ^d ^m ^e ^m ^b ^e ^r ^s ^h ⁱ p ^o ^f ⁱ t s ^c ^o ^m ^m ⁱ t t e ^e ^s .

^c ) ^T ^h ^e ^d ⁱ v ^e ^r ^s ⁱ t y ^o ^f ^b ^o ^a ^r ^d ^m ^e ^m ^b ^e ^r ^s ^h ⁱ p ^a ⁿ ^d ^c ^o ^m ^p ^e ^t e ⁿ ^c ^e ^s .

^d ) ^T h ^e ^p ^e ^r ^f ^o ^r ^m ^a ⁿ ^c ^e ^o ^f ^t h ^e ^c ^h ^a ⁱ ^r ^m ^a ⁿ ^o ^f ^t h ^e ^b ^o ^a ^r ^d ^o ^f ^d ⁱ ^r ^e ^c ^t o ^r ^s ^a ⁿ ^d ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ' s ^c ^h ⁱ e ^f e^x ^e ^c ^u ^t i v ^e .

^e ) ^T ^h ^e ^p ^e ^r ^f o ^r ^m ^a ⁿ ^c ^e ^a ⁿ ^d ^c ^o ⁿ ^t r ⁱ b ^u ^t i o ⁿ ^o ^f ⁱ n ^d ⁱ v ⁱ d ^u ^a ^l ^d ⁱ r ^e ^c ^t o ^r ^s , ^w ⁱ t h ^p ^a ^r ^t i c ^u ^l a ^r ^a ^t t e ⁿ ^t i o ⁿ t o^t h ^e ^c ^h ^a ⁱ r ^m ^e ⁿ ^o ^f ^b ^o ^a ^r ^d ^c ^o ^m ^m ⁱ t t e ^e ^s .

^T ^h ^e ^e ^v ^a ^l u ^a ^t i o ⁿ ^o ^f ^b ^o ^a ^r ^d ^c ^o ^m ^m ⁱ t t e ^e ^s ^s ^h ^o ^u ^l d ^s ^t a ^r ^t ^f r ^o ^m ^t h ^e ^r ^e ^p ^o ^r ^t s ^t h ^e ^y ^s ^e ⁿ ^d ^t h ^e ^b ^o ^a ^r ^d ^o ^f d ⁱ r ^e ^c ^t o ^r ^s , ^w ^h ⁱ l e ^t h ^a ^t ^o ^f ^t h ^e ^b ^o ^a ^r ^d ⁱ t s ^e ^l f ^s ^h ^o ^u ^l d ^s ^t a ^r ^t ^f r ^o ^m ^t h ^e ^r ^e ^p ^o ^r ^t ^o ^f ^t h ^e ⁿ ^o ^m ⁱ n ^a ^t i o ⁿ c^o ^m ^m ⁱ t t e ^e .

^E v ^e ^r ^y ^t h ^r ^e ^e ^y ^e ^a ^r ^s , ^t h ^e ^b ^o ^a ^r ^d ^o ^f ^d ⁱ r ^e ^c ^t o ^r ^s ^s ^h ^o ^u ^l d ^e ⁿ ^g ^a ^g ^e ^a ⁿ ^e ^x ^t e ^r ⁿ ^a ^l ^f a ^c ⁱ l i t a ^t o ^r ^t o ^a ⁱ d ⁱ n ^t h ^e e ^v ^a ^l ^u ^a ^t i o ⁿ ^p ^r ^o ^c ^e ^s ^s . ^T h ⁱ s ^f ^a ^c ⁱ l i t a ^t o ^r ' s ⁱ n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^c ^e ^s ^h ^o ^u ^l ^d ^b ^e ^v ^e ^r ⁱ ^f ⁱ e ^d ^b ^y ^t h ^e ⁿ ^o ^m ⁱ n ^a ^t i o ⁿ c^o ^m ^m ⁱ t t e ^e .

^A ⁿ ^y ^b ^u ^s ⁱ n ^e ^s ^s ^d ^e ^a ^l i n ^g ^s ^t h ^a ^t ^t h ^e ^f a ^c ⁱ l i t a ^t o ^r ^o ^r ^m ^e ^m ^b ^e ^r ^s ^o ^f ⁱ t s ^c ^o ^r ^p ^o ^r ^a ^t e ^g ^r ^o ^u ^p ^m ^a ⁱ n ^t a ⁱ n ^w ⁱ t h t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^o ^r ^m ^e ^m ^b ^e ^r ^s ^o ^f ⁱ t s ^c ^o ^r ^p ^o ^r ^a ^t e ^g ^r ^o ^u ^p ^s ^h ^o ^u ^l d ^b ^e ^d ^e ^t a ⁱ l e ^d ⁱ n ^t h ^e ^a ⁿ ⁿ ^u ^a ^l ^c ^o ^r ^p ^o ^r ^a ^t e g^o ^v ^e ^r ⁿ ^a ⁿ ^c ^e ^r ^e ^p ^o ^r ^t .

^T ^h ^e ^p ^r ^o ^c ^e ^s ^s ^f o ^l l o ^w ^e ^d ^a ⁿ ^d ^a ^r ^e ^a ^s ^e ^v ^a ^l u ^a ^t e ^d ^s ^h ^o ^u ^l d ^b ^e ^d ^e ^t a ⁱ l e ^d ⁱ n ^t h ^e ^a ⁿ ⁿ ^u ^a ^l ^c ^o ^r ^p ^o ^r ^a ^t e g^o ^v ^e ^r ⁿ ^a ⁿ ^c ^e ^r ^e ^p ^o ^r ^t .

C^o ^m ^p ^l i a ⁿ ^t ^X ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n

³ ⁷ . ^W h ^e ⁿ ^a ⁿ ^e ^x ^e ^c ^u ^t i v ^e ^c ^o ^m ^m ⁱ t t e ^e ^e ^x ⁱ s ^t s , ⁱ t s ^m ^e ^m ^b ^e ^r ^s ^h ⁱ p ^m ⁱ ^x ^b ^y ^d ⁱ r ^e ^c ^t o ^r ^c ^l a ^s ^s ^s ^h ^o ^u ^l d r ^e ^s ^e ^m ^b ^l e ^t h ^a ^t ^o ^f ^t h ^e ^b ^o ^a ^r ^d . ^T ^h ^e ^s ^e ^c ^r ^e ^t a ^r ^y ^o ^f ^t h ^e ^b ^o ^a ^r ^d ^s ^h ^o ^u ^l d ^a ^l s ^o ^a ^c ^t ^a ^s ^s ^e ^c ^r ^e ^t a ^r ^y ^t o ^t h ^e e^x ^e ^c ^u ^t i v ^e ^c ^o ^m ^m ⁱ t t e ^e .

^o ^m ^p ^l i a ⁿ ^t ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n ^N ^o ^t ^a ^p ^p ^l i c ^a ^b ^l e ^X

³ ⁸ . ^T ^h ^e ^b ^o ^a ^r ^d ^s ^h ^o ^u ^l d ^b ^e ^k ^e ^p ^t ^f u ^l l y ⁱ n ^f o ^r ^m ^e ^d ^o ^f ^t h ^e ^b ^u ^s ⁱ n ^e ^s ^s ^t r ^a ⁿ ^s ^a ^c ^t e ^d ^a ⁿ ^d ^d ^e ^c ⁱ s ⁱ o ⁿ ^s ^m ^a ^d ^e b ^y ^t h ^e ^e ^x ^e ^c ^u ^t i v ^e ^c ^o ^m ^m ⁱ t t e ^e . ^T ^o ^t h ⁱ s ^e ⁿ ^d , ^a ^l l ^b ^o ^a ^r ^d ^m ^e ^m ^b ^e ^r ^s ^s ^h ^o ^u ^l d ^r ^e ^c ^e ⁱ v ^e ^a ^c ^o ^p ^y ^o ^f ^t h ^e c ^o ^m ^m ⁱ t t e ^e ' s ^m ⁱ n ^u ^t e ^s .

C^o ^m ^p ^l i a ⁿ ^t ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n ^N ^o ^t ^a ^p ^p ^l i c ^a ^b ^l e ^X

³ ⁹ . ^A ^l l ^m ^e ^m ^b ^e ^r ^s ^o ^f ^t h ^e ^a ^u ^d ⁱ t ^c ^o ^m ^m ⁱ t t e ^e , ^p ^a ^r ^t i c ^u ^l a ^r ^l y ⁱ t s ^c ^h ^a ⁱ r ^m ^a ⁿ , ^s ^h ^o ^u ^l d ^b ^e ^a ^p ^p ^o ⁱ n ^t e ^d ^w ⁱ t h r ^e ^g ^a ^r ^d ^t o ^t h ^e ⁱ r ^k ⁿ ^o ^w ^l e ^d ^g ^e ^a ⁿ ^d ^e ^x ^p ^e ^r ⁱ e ⁿ ^c ^e ⁱ n ^a ^c ^c ^o ^u ⁿ ^t i n ^g , ^a ^u ^d ⁱ t i n ^g ^a ⁿ ^d ^r ⁱ s ^k ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t m ^a ^t t e ^r ^s . ^A ^m ^a ^j ^o ^r ⁱ t y ^o ^f ^c ^o ^m ^m ⁱ t t e ^e ^p ^l a ^c ^e ^s ^s ^h ^o ^u ^l d ^b ^e ^h ^e ^l d ^b ^y ⁱ n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^d ⁱ r ^e ^c ^t o ^r ^s .

C^o ^m ^p ^l i a ⁿ ^t ^X ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n

⁴ ⁰ . ^L i s ^t e ^d ^c ^o ^m ^p ^a ⁿ ⁱ e ^s ^s ^h ^o ^u ^l d ^h ^a ^v ^e ^a ^u ⁿ ⁱ t ⁱ n ^c ^h ^a ^r ^g ^e ^o ^f ^t h ^e ⁱ n ^t e ^r ⁿ ^a ^l ^a ^u ^d ⁱ t ^f u ⁿ ^c ^t i o ⁿ , ^u ⁿ ^d ^e ^r ^t h ^e s ^u ^p ^e ^r ^v ⁱ s ⁱ o ⁿ ^o ^f ^t h ^e ^a ^u ^d ⁱ t ^c ^o ^m ^m ⁱ t t e ^e , ^t o ^m ^o ⁿ ⁱ t o ^r ^t h ^e ^e ^f f e ^c ^t i v ^e ⁿ ^e ^s ^s ^o ^f ^r ^e ^p ^o ^r ^t i n ^g ^a ⁿ ^d ^c ^o ⁿ ^t r ^o ^l s ^y ^s ^t e ^m ^s . ^T h ⁱ^s ^u ⁿ ⁱ^t ^s ^h ^o ^u ^l ^d ^r ^e ^p ^o ^r ^t f u ⁿ ^c ^t i o ⁿ ^a ^l^l ^y ^t^o ^t^h ^e ^b ^o ^a ^r ^d '^s ⁿ ^o ⁿ ^ë^e ^x ^e ^c ^u ^t i v ^e ^c ^h ^a ⁱ^r ^m ^a ⁿ ^o ^r ^t^h ^e c^h ^a ⁱ r ^m ^a ⁿ ^o ^f ^t h ^e ^a ^u ^d ⁱ t ^c ^o ^m ^m ⁱ t t e ^e .

C^o ^m ^p ^l i a ⁿ ^t ^X ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n

⁴ ¹ . ^T ^h ^e ^h ^e ^a ^d ^o ^f ^t h ^e ^u ⁿ ⁱ t ^h ^a ⁿ ^d ^l i n ^g ^t h ^e ⁱ n ^t e ^r ⁿ ^a ^l ^a ^u ^d ⁱ t ^f u ⁿ ^c ^t i o ⁿ ^s ^h ^o ^u ^l d ^p ^r ^e ^s ^e ⁿ ^t ^a ⁿ ^a ⁿ ⁿ ^u ^a ^l ^w ^o ^r ^k p ^r ^o ^g ^r ^a ^m ^m ^e ^t o ^t h ^e ^a ^u ^d ⁱ t ^c ^o ^m ^m ⁱ t t e ^e , ⁱ n ^f o ^r ^m ⁱ t ^d ⁱ r ^e ^c ^t l y ^o ^f ^a ⁿ ^y ⁱ n ^c ⁱ d ^e ⁿ ^t s ^a ^r ⁱ s ⁱ n ^g ^d ^u ^r ⁱ n ^g ⁱ t s i m^p ^l e ^m ^e ⁿ ^t a ^t i o ⁿ ^a ⁿ ^d ^s ^u ^b ^m ⁱ t ^a ⁿ ^a ^c ^t i v ⁱ t i e ^s ^r ^e ^p ^o ^r ^t ^a ^t ^t h ^e ^e ⁿ ^d ^o ^f ^e ^a ^c ^h ^y ^e ^a ^r .

C^o ^m ^p ^l i a ⁿ ^t ^X ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n ^N ^o ^t ^a ^p ^p ^l i c ^a ^b ^l e

⁴ ² . ^T ^h ^e ^a ^u ^d ⁱ t ^c ^o ^m ^m ⁱ t t e ^e ^s ^h ^o ^u ^l d ^h ^a ^v ^e ^t h ^e ^f o ^l l o ^w ⁱ n ^g ^f u ⁿ ^c ^t i o ⁿ ^s ^o ^v ^e ^r ^a ⁿ ^d ^a ^b ^o ^v ^e ^t h ^o ^s ^e ^l e ^g ^a ^l l y a^s ^s ⁱ g ⁿ ^e ^d .

¹ . ^W i t h^r ^e ^s ^p ^e ^c ^t ^t o ⁱ n ^t e ^r ⁿ ^a ^l ^c ^o ⁿ ^t r ^o ^l ^a ⁿ ^d ^r ^e ^p ^o ^r ^t i n ^g ^s ^y ^s ^t e ^m ^s :

^a ) ^M o ⁿ ⁱ t o ^r ⁱ n ^g ^t h ^e ^p ^r ^e ^p ^a ^r ^a ^t i o ⁿ ^a ⁿ ^d ^t h ^e ⁱ n ^t e ^g ^r ⁱ t y ^o ^f ^t h ^e ^f i n ^a ⁿ ^c ⁱ a ^l ⁱ n ^f o ^r ^m ^a ^t i o ⁿ c ^o ⁿ ^c ^e ^r ⁿ ⁱ n ^g ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^a ⁿ ^d , ^w ^h ^e ^r ^e ^a ^p ^p ^r ^o ^p ^r ⁱ a ^t e , ^t h ^e ^g ^r ^o ^u ^p , ^c ^h ^e ^c ^k ⁱ n ^g ^f o ^r ^c ^o ^m ^p ^l i a ⁿ ^c ^e w ⁱ t h ^l e ^g ^a ^l ^p ^r ^o ^v ⁱ s ⁱ o ⁿ ^s , ^t h ^e ^a ^d ^e ^q ^u ^a ^t e ^d ^e ^m ^a ^r ^c ^a ^t i o ⁿ ^o ^f ^t h ^e ^c ^o ⁿ ^s ^o ^l i d ^a ^t i o ⁿ ^p ^e ^r ⁱ m ^e ^t e ^r , ^a ⁿ ^d ^t h ^e c^o ^r ^r ^e ^c ^t ^a ^p ^p ^l i c ^a ^t i o ⁿ ^o ^f ^a ^c ^c ^o ^u ⁿ ^t i n ^g ^p ^r ⁱ n ^c ⁱ p ^l e ^s .

^b ) ^M o ⁿ ⁱ t o ^r ^t h ^e ⁱ n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^c ^e ^o ^f ^t h ^e ^u ⁿ ⁱ t ^h ^a ⁿ ^d ^l i n ^g ^t h ^e ⁱ n ^t e ^r ⁿ ^a ^l ^a ^u ^d ⁱ t ^f u ⁿ ^c ^t i o ⁿ ; ^p ^r ^o ^p ^o ^s ^e t h ^e ^s ^e ^l e ^c ^t i o ⁿ , ^a ^p ^p ^o ⁱ n ^t m ^e ⁿ ^t , ^r ^e ^ë e ^l e ^c ^t i o ⁿ ^a ⁿ ^d ^r ^e ^m ^o ^v ^a ^l ^o ^f ^t h ^e ^h ^e ^a ^d ^o ^f ^t h ^e ⁱ n ^t e ^r ⁿ ^a ^l ^a ^u ^d ⁱ t s ^e ^r ^v ⁱ c ^e ; ^p ^r ^o ^p ^o ^s ^e ^t h ^e ^s ^e ^r ^v ⁱ c ^e ' s ^b ^u ^d ^g ^e ^t ; ^a ^p ^p ^r ^o ^v ^e ⁱ t s ^p ^r ⁱ o ^r ⁱ t i e ^s ^a ⁿ ^d ^w ^o ^r ^k ^p ^r ^o ^g ^r ^a ^m ^m ^e ^s , e ⁿ ^s ^u ^r ⁱ n ^g ^t h ^a ^t ⁱ t ^f o ^c ^u ^s ^e ^s ^p ^r ⁱ m ^a ^r ⁱ l y ^o ⁿ ^t h ^e ^m ^a ⁱ n ^r ⁱ s ^k ^s ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ⁱ s ^e ^x ^p ^o ^s ^e ^d ^t o ; ^r ^e ^c ^e ⁱ v ^e r ^e ^g ^u ^l a ^r ^r ^e ^p ^o ^r ^t ë b ^a ^c ^k ^s ^o ⁿ ⁱ t s ^a ^c ^t i v ⁱ t i e ^s ; ^a ⁿ ^d ^v ^e ^r ⁱ f y ^t h ^a ^t ^s ^e ⁿ ⁱ o ^r ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^a ^r ^e ^a ^c ^t i n ^g ^o ⁿ t h^e ^f i n ^d ⁱ n ^g ^s ^a ⁿ ^d ^r ^e ^c ^o ^m ^m ^e ⁿ ^d ^a ^t i o ⁿ ^s ^o ^f ⁱ t s ^r ^e ^p ^o ^r ^t s .

^E s ^t a ^b ^l i s ^h ^a ⁿ ^d ^s ^u ^p ^e ^r ^v ⁱ s ^e ^a ^m ^e ^c ^h ^a ⁿ ⁱ s ^m ^w ^h ^e ^r ^e ^b ^y ^s ^t a ^f f ^c ^a ⁿ ^r ^e ^p ^o ^r ^t , ^c ^o ⁿ ^f i d ^e ⁿ ^t i a ^l l y ^a ⁿ ^d , ⁱ f a ^p ^p ^r ^o ^p ^r ⁱ a ^t e ^a ⁿ ^d ^f e ^a ^s ⁱ b ^l e , ^a ⁿ ^o ⁿ ^y ^m ^o ^u ^s ^l y , ^a ⁿ ^y ^s ⁱ g ⁿ ⁱ f i c ^a ⁿ ^t ⁱ r ^r ^e ^g ^u ^l a ^r ⁱ t i e ^s ^t h ^a ^t ^t h ^e ^y ^d ^e ^t e ^c ^t i n^t h ^e ^c ^o ^u ^r ^s ^e ^o ^f ^t h ^e ⁱ r ^d ^u ^t i e ^s , ⁱ n ^p ^a ^r ^t i c ^u ^l a ^r ^f i n ^a ⁿ ^c ⁱ a ^l ^o ^r ^a ^c ^c ^o ^u ⁿ ^t i n ^g ⁱ r ^r ^e ^g ^u ^l a ^r ⁱ t i e ^s .

² . ^W i t h^r ^e ^s ^p ^e ^c ^t ^t o ^t h ^e ^e ^x ^t e ^r ⁿ ^a ^l ^a ^u ^d ⁱ t o ^r :

^a ) ^I ⁿ ^v ^e ^s ^t i g ^a ^t e ^t h ^e ⁱ s ^s ^u ^e ^s ^g ⁱ v ⁱ n ^g ^r ⁱ s ^e ^t o ^t h ^e ^r ^e ^s ⁱ g ⁿ ^a ^t i o ⁿ ^o ^f ^t h ^e ^e ^x ^t e ^r ⁿ ^a ^l ^a ^u ^d ⁱ t o ^r , ^s ^h ^o ^u ^l d t hⁱ s ^c ^o ^m ^e ^a ^b ^o ^u ^t .

^b ) ^E n ^s ^u ^r ^e ^t h ^a ^t ^t h ^e ^r ^e ^m ^u ⁿ ^e ^r ^a ^t i o ⁿ ^o ^f ^t h ^e ^e ^x ^t e ^r ⁿ ^a ^l ^a ^u ^d ⁱ t o ^r ^d ^o ^e ^s ⁿ ^o ^t ^c ^o ^m ^p ^r ^o ^m ⁱ s ^e ⁱ t s ^q ^u ^a ^l i t y ^o ^r ⁱ n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^c ^e .

^c ) ^E n ^s ^u ^r ^e ^t h ^a ^t ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ⁿ ^o ^t i f i e ^s ^a ⁿ ^y ^c ^h ^a ⁿ ^g ^e ^o ^f ^e ^x ^t e ^r ⁿ ^a ^l ^a ^u ^d ⁱ t o ^r ^t o ^t h ^e ^C ^N ^M ^V a ^s ^a m ^a ^t e ^r ⁱ a ^l ^e ^v ^e ⁿ ^t , ^a ^c ^c ^o ^m ^p ^a ⁿ ⁱ e ^d ^b ^y ^a ^s ^t a ^t e ^m ^e ⁿ ^t ^o ^f ^a ⁿ ^y ^d ⁱ s ^a ^g ^r ^e ^e ^m ^e ⁿ ^t s ^a ^r ⁱ s ⁱ n ^g ^w ⁱ t h ^t h ^e o^u ^t g ^o ⁱ n ^g ^a ^u ^d ⁱ t o ^r ^a ⁿ ^d ^t h ^e ^r ^e ^a ^s ^o ⁿ ^s ^f o ^r ^t h ^e ^s ^a ^m ^e .

^d ) ^E n ^s ^u ^r ^e ^t h ^a ^t ^t h ^e ^e ^x ^t e ^r ⁿ ^a ^l ^a ^u ^d ⁱ t o ^r ^h ^a ^s ^a ^y ^e ^a ^r ^l y ^m ^e ^e ^t i n ^g ^w ⁱ t h ^t h ^e ^b ^o ^a ^r ^d ⁱ n ^f u ^l l ^t o ⁱ n ^f o ^r ^m i t ^o ^f ^t h ^e ^w ^o ^r ^k ^u ⁿ ^d ^e ^r ^t a ^k ^e ⁿ ^a ⁿ ^d ^d ^e ^v ^e ^l o ^p ^m ^e ⁿ ^t s ⁱ n ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ' s ^r ⁱ s ^k ^a ⁿ ^d ^a ^c ^c ^o ^u ⁿ ^t i n ^g p^o ^s ⁱ t i o ⁿ ^s .

^e ) ^E n ^s ^u ^r ^e ^t h ^a ^t ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^a ⁿ ^d ^t h ^e ^e ^x ^t e ^r ⁿ ^a ^l ^a ^u ^d ⁱ t o ^r ^a ^d ^h ^e ^r ^e ^t o ^c ^u ^r ^r ^e ⁿ ^t ^r ^e ^g ^u ^l a ^t i o ⁿ ^s ^o ⁿ t h ^e ^p ^r ^o ^v ⁱ s ⁱ o ⁿ ^o ^f ⁿ ^o ⁿ ^ë a ^u ^d ⁱ t ^s ^e ^r ^v ⁱ c ^e ^s , ^l i ^m ⁱ t s ^o ⁿ ^t h ^e ^c ^o ⁿ ^c ^e ⁿ ^t ^r ^a ^t i o ⁿ ^o ^f ^t h ^e ^a ^u ^d ⁱ t o ^r ' s ^b ^u ^s ⁱ n ^e ^s ^s aⁿ ^d ^o ^t h ^e ^r ^r ^e ^q ^u ⁱ r ^e ^m ^e ⁿ ^t s ^c ^o ⁿ ^c ^e ^r ⁿ ⁱ n ^g ^a ^u ^d ⁱ t o ^r ⁱ n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^c ^e .

C^o ^m ^p ^l i a ⁿ ^t ^X ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n

⁴ ³ . ^T ^h ^e ^a ^u ^d ⁱ t ^c ^o ^m ^m ⁱ t t e ^e ^s ^h ^o ^u ^l d ^b ^e ^e ^m ^p ^o ^w ^e ^r ^e ^d ^t o ^m ^e ^e ^t ^w ⁱ t h ^a ⁿ ^y ^c ^o ^m ^p ^a ⁿ ^y ^e ^m ^p ^l o ^y ^e ^e ^o ^r m^a ⁿ ^a ^g ^e ^r , ^e ^v ^e ⁿ ^o ^r ^d ^e ^r ⁱ n ^g ^t h ^e ⁱ r ^a ^p ^p ^e ^a ^r ^a ⁿ ^c ^e ^w ⁱ t h ^o ^u ^t ^t h ^e ^p ^r ^e ^s ^e ⁿ ^c ^e ^o ^f ^a ⁿ ^o ^t h ^e ^r ^s ^e ⁿ ⁱ o ^r ^o ^f f i c ^e ^r .

C^o ^m ^p ^l i a ⁿ ^t ^X ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n

⁴ ⁴ . ^T ^h ^e ^a ^u ^d ⁱ t ^c ^o ^m ^m ⁱ t t e ^e ^s ^h ^o ^u ^l d ^b ^e ⁱ n ^f o ^r ^m ^e ^d ^o ^f ^a ⁿ ^y ^f u ⁿ ^d ^a ^m ^e ⁿ ^t a ^l ^c ^h ^a ⁿ ^g ^e ^s ^o ^r ^c ^o ^r ^p ^o ^r ^a ^t e t r ^a ⁿ ^s ^a ^c ^t i o ⁿ ^s ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ⁱ s ^p ^l a ⁿ ⁿ ⁱ n ^g , ^s ^o ^t h ^e ^c ^o ^m ^m ⁱ t t e ^e ^c ^a ⁿ ^a ⁿ ^a ^l y ^s ^e ^t h ^e ^o ^p ^e ^r ^a ^t i o ⁿ ^a ⁿ ^d r ^e ^p ^o ^r ^t ^t o ^t h ^e ^b ^o ^a ^r ^d ^b ^e ^f o ^r ^e ^h ^a ⁿ ^d ^o ⁿ ⁱ t s ^e ^c ^o ⁿ ^o ^m ⁱ c ^c ^o ⁿ ^d ⁱ t i o ⁿ ^s ^a ⁿ ^d ^a ^c ^c ^o ^u ⁿ ^t i n ^g ⁱ m ^p ^a ^c ^t ^a ⁿ ^d , ^w ^h ^e ⁿ a^p ^p ^l i c ^a ^b ^l e , ^t h ^e ^e ^x ^c ^h ^a ⁿ ^g ^e ^r ^a ^t i o ^p ^r ^o ^p ^o ^s ^e ^d .

C^o ^m ^p ^l i a ⁿ ^t ^X ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n ^N ^o ^t ^a ^p ^p ^l i c ^a ^b ^l e

⁴ ⁵ . ^R ⁱ s ^k ^c ^o ⁿ ^t r ^o ^l ^a ⁿ ^d ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^p ^o ^l i c ^y ^s ^h ^o ^u ^l d ^s ^p ^e ^c ⁱ f y ^a ^t ^l e ^a ^s ^t :

^a ) ^T ^h ^e ^d ⁱ f f e ^r ^e ⁿ ^t ^t y ^p ^e ^s ^o ^f ^f i n ^a ⁿ ^c ⁱ a ^l ^a ⁿ ^d ⁿ ^o ⁿ ^ë f i n ^a ⁿ ^c ⁱ a ^l ^r ⁱ s ^k ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ⁱ s ^e ^x ^p ^o ^s ^e ^d ^t o ( i n ^c ^l u ^d ⁱ n ^g ^o ^p ^e ^r ^a ^t i o ⁿ ^a ^l , ^t e ^c ^h ⁿ ^o ^l o ^g ⁱ c ^a ^l , ^f i n ^a ⁿ ^c ⁱ a ^l , ^l e ^g ^a ^l , ^s ^o ^c ⁱ a ^l , ^e ⁿ ^v ⁱ r ^o ⁿ ^m ^e ⁿ ^t a ^l , ^p ^o ^l i t i c ^a ^l a ⁿ ^d ^r ^e ^p ^u ^t a ^t i o ⁿ ^a ^l ^r ⁱ s ^k ^s ) , ^w ⁱ t h ^t h ^e ⁱ n ^c ^l u ^s ⁱ o ⁿ ^u ⁿ ^d ^e ^r ^f i n ^a ⁿ ^c ⁱ a ^l ^o ^r ^e ^c ^o ⁿ ^o ^m ⁱ c ^r ⁱ s ^k ^s ^o ^f c^o ⁿ ^t i n ^g ^e ⁿ ^t ^l i a ^b ⁱ l i t i e ^s ^a ⁿ ^d ^o ^t h ^e ^r ^o ^f f ë b ^a ^l a ⁿ ^c ^e ^ë s ^h ^e ^e ^t ^r ⁱ s ^k ^s .

^b ) ^T ^h ^e ^d ^e ^t e ^r ^m ⁱ n ^a ^t i o ⁿ ^o ^f ^t h ^e ^r ⁱ s ^k ^l e ^v ^e ^l ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^s ^e ^e ^s ^a ^s ^a ^c ^c ^e ^p ^t a ^b ^l e .

^c ) ^T ^h ^e ^m ^e ^a ^s ^u ^r ^e ^s ⁱ n ^p ^l a ^c ^e ^t o ^m ⁱ t i g ^a ^t e ^t h ^e ⁱ m ^p ^a ^c ^t ^o ^f ⁱ d ^e ⁿ ^t i f i e ^d ^r ⁱ s ^k ^e ^v ^e ⁿ ^t s ^s ^h ^o ^u ^l d ^t h ^e ^y o^c ^c ^u ^r .

^d ) ^T ^h ^e ⁱ n ^t e ^r ⁿ ^a ^l ^r ^e ^p ^o ^r ^t i n ^g ^a ⁿ ^d ^c ^o ⁿ ^t r ^o ^l ^s ^y ^s ^t e ^m ^s ^t o ^b ^e ^u ^s ^e ^d ^t o ^c ^o ⁿ ^t r ^o ^l ^a ⁿ ^d ^m ^a ⁿ ^a ^g ^e ^t h ^e a^b ^o ^v ^e ^r ⁱ s ^k ^s , ⁱ n ^c ^l u ^d ⁱ n ^g ^c ^o ⁿ ^t i n ^g ^e ⁿ ^t ^l i a ^b ⁱ l i t i e ^s ^a ⁿ ^d ^o ^f f ë b ^a ^l a ⁿ ^c ^e ^ë s ^h ^e ^e ^t ^r ⁱ s ^k ^s .

C^o ^m ^p ^l i a ⁿ ^t ^X ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n

⁴ ⁶ . C ^o ^m ^p ^a ⁿ ⁱ e ^s ^s ^h ^o ^u ^l d ^e ^s ^t a ^b ^l i s ^h ^a ^r ⁱ s ^k ^c ^o ⁿ ^t r ^o ^l ^a ⁿ ^d ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^f u ⁿ ^c ^t i o ⁿ ⁱ n ^t h ^e ^c ^h ^a ^r ^g ^e ^o ^f o ⁿ ^e ^o ^f ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ' s ⁱ n ^t e ^r ⁿ ^a ^l ^d ^e ^p ^a ^r ^t ^m ^e ⁿ ^t ^o ^r ^u ⁿ ⁱ t s ^a ⁿ ^d ^u ⁿ ^d ^e ^r ^t h ^e ^d ⁱ ^r ^e ^c ^t ^s ^u ^p ^e ^r ^v ⁱ s ⁱ o ⁿ ^o ^f ^t h ^e a ^u ^d ⁱ t ^c ^o ^m ^m ⁱ t t e ^e ^o ^r ^s ^o ^m ^e ^o ^t h ^e ^r ^d ^e ^d ⁱ c ^a ^t e ^d ^b ^o ^a ^r ^d ^c ^o ^m ^m ⁱ t t e ^e . ^T ^h ⁱ s ^f u ⁿ ^c ^t i o ⁿ ^s ^h ^o ^u ^l d ^b ^e e^x ^p ^r ^e ^s ^s ^l y ^c ^h ^a ^r ^g ^e ^d ^w ⁱ t h ^t h ^e ^f o ^l l o ^w ⁱ n ^g ^r ^e ^s ^p ^o ⁿ ^s ⁱ b ⁱ l i t i e ^s :

^a ) ^E n ^s ^u ^r ^e ^t h ^a ^t ^r ⁱ s ^k ^c ^o ⁿ ^t r ^o ^l ^a ⁿ ^d ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^s ^y ^s ^t e ^m ^s ^a ^r ^e ^f u ⁿ ^c ^t i o ⁿ ⁱ n ^g ^c ^o ^r ^r ^e ^c ^t l y ^a ⁿ ^d , s ^p ^e ^c ⁱ f i c ^a ^l l y , ^t h ^a ^t ^m ^a ^j ^o ^r ^r ⁱ s ^k ^s ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ⁱ s ^e ^x ^p ^o ^s ^e ^d ^t o ^a ^r ^e ^c ^o ^r ^r ^e ^c ^t l y ⁱ d ^e ⁿ ^t i f i e ^d , m^a ⁿ ^a ^g ^e ^d ^a ⁿ ^d ^q ^u ^a ⁿ ^t i f i e ^d .

^b ) ^P a ^r ^t i c ⁱ p ^a ^t e ^a ^c ^t i v ^e ^l y ⁱ n ^t h ^e ^p ^r ^e ^p ^a ^r ^a ^t i o ⁿ ^o ^f ^r ⁱ s ^k ^s ^t r ^a ^t e ^g ⁱ e ^s ^a ⁿ ^d ⁱ n ^k ^e ^y ^d ^e ^c ⁱ s ⁱ o ⁿ ^s ^a ^b ^o ^u ^t t h^e ⁱ r ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t .

^c ) ^E n ^s ^u ^r ^e ^t h ^a ^t ^r ⁱ s ^k ^c ^o ⁿ ^t r ^o ^l ^a ⁿ ^d ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^s ^y ^s ^t e ^m ^s ^a ^r ^e ^m ⁱ t i g ^a ^t i n ^g ^r ⁱ s ^k ^s ^e ^f f e ^c ^t i v ^e ^l y ⁱ n t h^e ^f r ^a ^m ^e ^o ^f ^t h ^e ^p ^o ^l i c ^y ^d ^r ^a ^w ⁿ ^u ^p ^b ^y ^t h ^e ^b ^o ^a ^r ^d ^o ^f ^d ⁱ r ^e ^c ^t o ^r ^s .

C^o ^m ^p ^l i a ⁿ ^t ^X ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n

⁴ ⁷ . ^A ^p ^p ^o ⁱ n ^t e ^e ^s ^t o ^t h ^e ^a ^p ^p ^o ⁱ n ^t m ^e ⁿ ^t s ^a ⁿ ^d ^r ^e ^m ^u ⁿ ^e ^r ^a ^t i o ⁿ ^c ^o ^m ^m ⁱ t t e ^e – ^o ^r ^o ^f ^t h ^e ⁿ ^o ^m ⁱ n ^a ^t i o ⁿ c ^o ^m ^m ⁱ t t e ^e ^a ⁿ ^d ^r ^e ^m ^u ⁿ ^e ^r ^a ^t i o ⁿ ^c ^o ^m ^m ⁱ t t e ^e , ⁱ f ^s ^e ^p ^a ^r ^a ^t e ^l y ^c ^o ⁿ ^s ^t i t u ^t e ^d – ^s ^h ^o ^u ^l d ^h ^a ^v ^e ^t h ^e ^r ⁱ g ^h ^t b ^a ^l a ⁿ ^c ^e ^o ^f ^k ⁿ ^o ^w ^l e ^d ^g ^e , ^s ^k ⁱ l l s ^a ⁿ ^d ^e ^x ^p ^e ^r ⁱ e ⁿ ^c ^e ^f o ^r ^t h ^e ^f u ⁿ ^c ^t i o ⁿ ^s ^t h ^e ^y ^a ^r ^e ^c ^a ^l l e ^d ^o ⁿ ^t o ^d ⁱ s ^c ^h ^a ^r ^g ^e . ^T ^h ^e ^m ^a ^j ^o ^r ⁱ t y ^o ^f ^t h ^e ⁱ r ^m ^e ^m ^b ^e ^r ^s ^s ^h ^o ^u ^l d ^b ^e ⁱ n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^d ⁱ r ^e ^c ^t o ^r ^s .

C^o ^m ^p ^l i a ⁿ ^t ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^X ^E ^x ^p ^l a ⁱ n

T h ^e ^C ^o ^m ^p ^a ⁿ ^y ^f u ^l l y ^c ^o ^m ^p ^l i e ^s ^w ⁱ t h ^t h ^e ^f i r s ^t ^p ^a ^r t ^o ^f ^t h ^e ^r e ^c ^o ^m ^m ^e ⁿ ^d ^a ^t i o ⁿ , ^g ⁱ v ^e ⁿ ^t h ^a ^t ^t h ^e ^m ^e ^m ^b ^e ^r s o ^f ^t h ^e ^A ^p ^p ^o ⁱ n ^t m ^e ⁿ ^t s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e ^r a ^t i o ⁿ ^C ^o ^m ^m ⁱ t t e ^e ^a ^r e ^d ^e ^s ⁱ g ⁿ ^a ^t e ^d ^m ^a ^k ⁱ n ^g ^s ^u ^r e ^t h ^a ^t ^t h ^e ^y ^h ^a ^v ^e a ^p ^p ^r o ^p ^r i a ^t e ^k ⁿ ^o ^w ^l e ^d ^g ^e , ^s ^k ⁱ l l s ^a ⁿ ^d ^e ^x ^p ^e ^r i e ⁿ ^c ^e ^t o ^t h ^e ^f u ⁿ ^c ^t i o ⁿ ^s ^t h ^e ^y ^a ^r e ^c ^a ^l l e ^d ^u ^p ^o ⁿ ^t o ^c ^a ^r r y ^o ^u ^t . W ^h ^e ⁿ ⁱ t ^c ^o ^m ^e ^s ^t o ⁱ f ^t h ^e ^m ^a ^j ^o ^r i t y ^o ^f ^t h ^e ^s ^e ^m ^e ^m ^b ^e ^r s ^a ^r e ⁱ n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^d ⁱ r e ^c ^t o ^r s , ^t h ^e ^B ^o ^a ^r d R ^e ^g ^u ^l a ^t i o ⁿ ^s ^e ^s ^t a ^b ^l i s ^h ^e ^s ^t h ^a ^t ^t h ^e ^m ^a ^j ^o ^r i t y ^o ^f ^t h ^e ^m ^e ^m ^b ^e ^r s ^s ^h ^o ^u ^l d ^b ^e ⁱ n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t . ^T ^h ^e ^C ^o ^m ^p ^a ⁿ ^y s ^e ^e ^k ^s ^t o ^c ^o ^m ^p ^l y ^w ⁱ t h ^t h ⁱ s ^r e ^q ^u ⁱ r e ^m ^e ⁿ ^t ^a ^s ^s ^o ^o ⁿ ^a ^s ^t h ^e ^r e ^a ^r e ^v ^a ^c ^a ⁿ ^c ⁱ e ^s ⁱ n ^t h ^e ^B ^o ^a ^r d , ^a ⁿ ^d ^t h ^e ^r e ^f o ^r e h ^a ^s ⁿ ^o ^t ^a ^m ^e ⁿ ^d ^e ^d ^t h ^e ^B ^o ^a ^r d ^R ^e ^g ^u ^l a ^t i o ⁿ ⁱ n ^t h ⁱ s ^r e ^g ^a ^r d . ^I ⁿ ^t h ^a ^t ^r e ^s ^p ^e ^c ^t , ^t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^h ^a ^s ^p ^u ^r s ^u ^e ^d ^a d ⁱ f f e ^r e ⁿ ^t ^c ^o ^m ^p ^o ^s ⁱ t i o ⁿ ^o ^f ^t h ^e ^A ^p ^p ^o ⁱ n ^t m ^e ⁿ ^t s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e ^r a ^t i o ⁿ ^C ^o ^m ^m ⁱ t t e ^e ^a ⁿ ^d ^o ^f ^t h ^e ^A ^u ^d ⁱ t ^a ⁿ ^d C ^o ⁿ ^t r o ^l ^C ^o ^m ^m ⁱ t t e ^e ( ^c ^o ^m ^p ^o ^s ^e ^d ^o ^f ^t h ^e ^o ^t h ^e ^r ^t h ^r e ^e ⁱ n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^d ⁱ r e ^c ^t o ^r s ) ⁱ n ^o ^r d ^e ^r ^t o ^a ^c ^h ⁱ e ^v ^e ^t h ^e i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^c ^e ^o ^f ^t h ^e ^t w ^o ^b ^o ^d ⁱ e ^s ^a ⁿ ^d ^a ^h ⁱ g ^h ^e ^r ^p ^a ^r t i c ⁱ p ^a ^t i o ⁿ ^o ^f ^a ^l l ^t h ^e ^e ^x ^t e ^r n ^a ^l ^d ⁱ r e ^c ^t o ^r s ⁱ n ^d ⁱ f f e ^r e ⁿ ^t C ^o ^m ^m ⁱ t t e ^e ^s . ^N ^o ^t w ⁱ t h ^s ^t a ⁿ ^d ⁱ n ^g , ^t h ^e ⁱ n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^c ^e ^o ^f ^t h ^e ^d ^e ^c ⁱ s ⁱ o ⁿ ^s ^m ^a ^d ^e ^b ^y ^t h ^e ^C ^o ^m ^m ⁱ t t e ^e ⁱ s g ^u ^a ^r a ⁿ ^t e ^e ^d ^a ^s ^l o ⁿ ^g ^a ^s ^t h ^e ^r e ^a ^r e ⁿ ^o ^e ^x ^e ^c ^u ^t i v ^e ^d ⁱ r e ^c ^t o ^r s ^a ⁿ ^d ^t h ^e ^C ^h ^a ⁱ r m ^a ⁿ ^o ^f ^t h ^e ^A ^p ^p ^o ⁱ n ^t m ^e ⁿ ^t s ^a ⁿ ^d R^e ^m ^u ⁿ ^e ^r a ^t i o ⁿ ^s ^C ^o ^m ^m ⁱ t t e ^e , ^w ^h ^o ⁱ s ⁱ n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t , ^h ^a ^s ^a ^c ^a ^s ^t i n ^g ^v ^o ^t e ⁱ n ^t h ^e ^e ^v ^e ⁿ ^t ^o ^f ^a ^d ^r a ^w .

⁴ ⁸ . ^L a ^r ^g ^e ^c ^a ^p ^c ^o ^m ^p ^a ⁿ ⁱ e ^s ^s ^h ^o ^u ^l d ^o ^p ^e ^r ^a ^t e ^s ^e ^p ^a ^r ^a ^t e ^l y ^c ^o ⁿ ^s ^t i t u ^t e ^d ^a ^p ^p ^o ⁱ n ^t m ^e ⁿ ^t s ^a ⁿ ^d r^e ^m ^u ⁿ ^e ^r ^a ^t i o ⁿ ^c ^o ^m ^m ⁱ t t e ^e ^s .

^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n ^N ^o ^t ^a ^p ^p ^l i c ^a ^b ^l e ^X

⁴ ⁹ . ^T h ^e ⁿ ^o ^m ⁱ n ^a ^t i o ⁿ ^c ^o ^m ^m ⁱ t t e ^e ^s ^h ^o ^u ^l ^d ^c ^o ⁿ ^s ^u ^l t ^w ⁱ t h ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ' s ^c ^h ^a ⁱ ^r ^m ^a ⁿ ^a ⁿ ^d ^c ^h ⁱ e ^f e^x ^e ^c ^u ^t i v ^e , ^e ^s ^p ^e ^c ⁱ a ^l l y ^o ⁿ ^m ^a ^t t e ^r ^s ^r ^e ^l a ^t i n ^g ^t o ^e ^x ^e ^c ^u ^t i v ^e ^d ⁱ r ^e ^c ^t o ^r ^s .

^W h ^e ⁿ ^t h ^e ^r ^e ^a ^r ^e ^v ^a ^c ^a ⁿ ^c ⁱ e ^s ^o ⁿ ^t h ^e ^b ^o ^a ^r ^d , ^a ⁿ ^y ^d ⁱ r ^e ^c ^t o ^r ^m ^a ^y ^a ^p ^p ^r ^o ^a ^c ^h ^t h ^e ⁿ ^o ^m ⁱ n ^a ^t i o ⁿ c^o ^m ^m ⁱ t t e ^e ^t^o ^p ^r ^o ^p ^o ^s ^e ^c ^a ⁿ ^d ⁱ^d ^a ^t^e ^s ^t^h ^a ^t ⁱ^t ^m ⁱ^g ^h ^t ^c ^o ⁿ ^s ⁱ^d ^e ^r ^s ^u ⁱ t a ^b ^l^e .

^o ^m ^p ^l i a ⁿ ^t ^X ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n

⁵ ⁰ . ^T ^h ^e ^r ^e ^m ^u ⁿ ^e ^r ^a ^t i o ⁿ ^c ^o ^m ^m ⁱ t t e ^e ^s ^h ^o ^u ^l d ^o ^p ^e ^r ^a ^t e ⁱ n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t l y ^a ⁿ ^d ^h ^a ^v ^e ^t h ^e ^f o ^l l o ^w ⁱ n ^g f uⁿ ^c ^t i o ⁿ ^s ⁱ n ^a ^d ^d ⁱ t i o ⁿ ^t o ^t h ^o ^s ^e ^a ^s ^s ⁱ g ⁿ ^e ^d ^b ^y ^l a ^w :

^a ) ^P r^o ^p ^o ^s ^e ^t o ^t h ^e ^b ^o ^a ^r ^d ^t h ^e ^s ^t a ⁿ ^d ^a ^r ^d ^c ^o ⁿ ^d ⁱ t i o ⁿ ^s ^f o ^r ^s ^e ⁿ ⁱ o ^r ^o ^f f i c ^e ^r ^c ^o ⁿ ^t r ^a ^c ^t s .

) ^M oⁿ ⁱ t o ^r ^c ^o ^m ^p ^l i a ⁿ ^c ^e ^w ⁱ t h ^t h ^e ^r ^e ^m ^u ⁿ ^e ^r ^a ^t i o ⁿ ^p ^o ^l i c ^y ^s ^e ^t ^b ^y ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y .

^c ) ^P e ^r ⁱ o ^d ⁱ c ^a ^l l y ^r ^e ^v ⁱ e ^w ^t h ^e ^r ^e ^m ^u ⁿ ^e ^r ^a ^t i o ⁿ ^p ^o ^l i c ^y ^f o ^r ^d ⁱ r ^e ^c ^t o ^r ^s ^a ⁿ ^d ^s ^e ⁿ ⁱ o ^r ^o ^f f i c ^e ^r ^s , i n ^c ^l u ^d ⁱ n ^g ^s ^h ^a ^r ^e ^ë b ^a ^s ^e ^d ^r ^e ^m ^u ⁿ ^e ^r ^a ^t i o ⁿ ^s ^y ^s ^t e ^m ^s ^a ⁿ ^d ^t h ^e ⁱ r ^a ^p ^p ^l i c ^a ^t i o ⁿ , ^a ⁿ ^d ^e ⁿ ^s ^u ^r ^e ^t h ^a ^t t h ^e ⁱ r ⁱ n ^d ⁱ v ⁱ d ^u ^a ^l ^c ^o ^m ^p ^e ⁿ ^s ^a ^t i o ⁿ ⁱ s ^p ^r ^o ^p ^o ^r ^t i o ⁿ ^a ^t e ^t o ^t h ^e ^a ^m ^o ^u ⁿ ^t s ^p ^a ⁱ d ^t o ^o ^t h ^e ^r ^d ⁱ r ^e ^c ^t o ^r ^s aⁿ ^d ^s ^e ⁿ ⁱ o ^r ^o ^f f i c ^e ^r ^s ⁱ n ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y .

^d ) ^E n ^s ^u ^r ^e ^t h ^a ^t ^c ^o ⁿ ^f l i c ^t s ^o ^f ⁱ n ^t e ^r ^e ^s ^t ^d ^o ⁿ ^o ^t ^u ⁿ ^d ^e ^r ^m ⁱ n ^e ^t h ^e ⁱ n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^c ^e ^o ^f ^a ⁿ ^y ^e ^x ^t e ^r ⁿ ^a ^l a^d ^v ⁱ c ^e ^t h ^e ^c ^o ^m ^m ⁱ t t e ^e ^e ⁿ ^g ^a ^g ^e ^s .

^e ) ^V e ^r ⁱ f y ^t^h ^e ⁱⁿ ^f ^o ^r ^m ^a ^t i o ⁿ ^o ⁿ ^d ⁱ ^r ^e ^c ^t^o ^r ^a ⁿ ^d ^s ^e ⁿ ⁱ^o ^r ^o f f ⁱ^c ^e ^r ^s ' ^p ^a ^y ^c ^o ⁿ ^t^a ⁱⁿ ^e ^d ⁱⁿ ^c ^o ^r ^p ^o ^r ^a ^t^e ^d ^o ^c ^u ^m ^e ⁿ ^t s , ⁱ n ^c ^l ^u ^d ⁱ n ^g ^t h ^e ^a ⁿ ⁿ ^u ^a ^l ^d ⁱ ^r ^e ^c ^t o ^r ^s ' ^r ^e ^m ^u ⁿ ^e ^r ^a ^t i o ⁿ ^s ^t a ^t e ^m ^e ⁿ ^t .

C^o ^m ^p ^l i a ⁿ ^t ^X ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n

⁵ ¹ . ^T ^h ^e ^r ^e ^m ^u ⁿ ^e ^r ^a ^t i o ⁿ ^c ^o ^m ^m ⁱ t t e ^e ^s ^h ^o ^u ^l d ^c ^o ⁿ ^s ^u ^l t ^w ⁱ t h ^t h ^e ^c ^h ^a ⁱ r ^m ^a ⁿ ^a ⁿ ^d ^c ^h ⁱ e ^f ^e ^x ^e ^c ^u ^t i v ^e , e^s ^p ^e ^c ⁱ a ^l l y ^o ⁿ ^m ^a ^t t e ^r ^s ^r ^e ^l a ^t i n ^g ^t o ^e ^x ^e ^c ^u ^t i v ^e ^d ⁱ r ^e ^c ^t o ^r ^s ^a ⁿ ^d ^s ^e ⁿ ⁱ o ^r ^o ^f f i c ^e ^r ^s .

C^o ^m ^p ^l i a ⁿ ^t ^X ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n

⁵ ² . ^T ^h ^e ^t e ^r ^m ^s ^o ^f ^r ^e ^f e ^r ^e ⁿ ^c ^e ^o ^f ^s ^u ^p ^e ^r ^v ⁱ s ⁱ o ⁿ ^a ⁿ ^d ^c ^o ⁿ ^t r ^o ^l ^c ^o ^m ^m ⁱ t t e ^e ^s ^s ^h ^o ^u ^l d ^b ^e ^s ^e ^t ^o ^u ^t ⁱ n ^t h ^e b ^o ^a ^r ^d ^o ^f ^d ⁱ r ^e ^c ^t o ^r ^s ^r ^e ^g ^u ^l a ^t i o ⁿ ^s ^a ⁿ ^d ^a ^l i g ⁿ ^e ^d ^w ⁱ t h ^t h ^o ^s ^e ^g ^o ^v ^e ^r ⁿ ⁱ n ^g ^l e ^g ^a ^l l y ^m ^a ⁿ ^d ^a ^t o ^r ^y ^b ^o ^a ^r ^d c ^o ^m ^m ⁱ t t e ^e ^s ^a ^s ^s ^p ^e ^c ⁱ f i e ^d ⁱ n ^t h ^e ^p ^r ^e ^c ^e ^d ⁱ n ^g ^s ^e ^t s ^o ^f ^r ^e ^c ^o ^m ^m ^e ⁿ ^d ^a ^t i o ⁿ ^s . ^T ^h ^e ^y ^s ^h ^o ^u ^l d ⁱ n ^c ^l u ^d ^e ^a ^t l e^a ^s ^t ^t h ^e ^f o ^l l o ^w ⁱ n ^g ^t e ^r ^m ^s :

^a ) C ^o ^m ^m ⁱ t t e ^e ^s ^s ^h ^o ^u ^l d ^b ^e ^f o ^r ^m ^e ^d ^e ^x ^c ^l u ^s ⁱ v ^e ^l y ^b ^y ⁿ ^o ⁿ ^ë e ^x ^e ^c ^u ^t i v ^e ^d ⁱ r ^e ^c ^t o ^r ^s , ^w ⁱ t h ^a m^a ^j ^o ^r ⁱ t y ^o ^f ⁱ n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t s .

^b ) ^T ^h ^e ^y ^s ^h ^o ^u ^l d ^b ^e ^c ^h ^a ⁱ r ^e ^d ^b ^y ⁱ n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^d ⁱ r ^e ^c ^t o ^r ^s .

^c ) ^T ^h ^e ^b ^o ^a ^r ^d ^s ^h ^o ^u ^l d ^a ^p ^p ^o ⁱ n ^t ^t h ^e ^m ^e ^m ^b ^e ^r ^s ^o ^f ^s ^u ^c ^h ^c ^o ^m ^m ⁱ t t e ^e ^s ^w ⁱ t h ^r ^e ^g ^a ^r ^d ^t o ^t h ^e k ⁿ ^o ^w ^l e ^d ^g ^e , ^s ^k ⁱ l l s ^a ⁿ ^d ^e ^x ^p ^e ^r ⁱ e ⁿ ^c ^e ^o ^f ⁱ t s ^d ⁱ ^r ^e ^c ^t o ^r ^s ^a ⁿ ^d ^e ^a ^c ^h ^c ^o ^m ^m ⁱ t t e ^e ' s ^t e ^r ^m ^s ^o ^f r ^e ^f e ^r ^e ⁿ ^c ^e ; ^d ⁱ s ^c ^u ^s ^s ^t h ^e ⁱ r ^p ^r ^o ^p ^o ^s ^a ^l s ^a ⁿ ^d ^r ^e ^p ^o ^r ^t s ; ^a ⁿ ^d ^p ^r ^o ^v ⁱ d ^e ^r ^e ^p ^o ^r ^t ë b ^a ^c ^k ^s ^o ⁿ ^t h ^e ⁱ r a^c ^t i v ⁱ t i e ^s ^a ⁿ ^d ^w ^o ^r ^k ^a ^t ^t h ^e ^f i r ^s ^t ^b ^o ^a ^r ^d ^p ^l e ⁿ ^a ^r ^y ^f o ^l l o ^w ⁱ n ^g ^e ^a ^c ^h ^c ^o ^m ^m ⁱ t t e ^e ^m ^e ^e ^t i n ^g .

^d ) ^T ^h ^e ^y ^m ^a ^y ^e ⁿ ^g ^a ^g ^e ^e ^x ^t e ^r ⁿ ^a ^l ^a ^d ^v ⁱ c ^e , ^w ^h ^e ⁿ ^t h ^e ^y ^f e ^e ^l ⁱ t ⁿ ^e ^c ^e ^s ^s ^a ^r ^y ^f o ^r ^t h ^e ^d ⁱ s ^c ^h ^a ^r ^g ^e ^o ^f t h^e ⁱ r ^f u ⁿ ^c ^t i o ⁿ ^s .

^e ) ^M e ^e ^t i n ^g ^p ^r ^o ^c ^e ^e ^d ⁱ n ^g ^s ^s ^h ^o ^u ^l d ^b ^e ^m ⁱ n ^u ^t e ^d ^a ⁿ ^d ^a ^c ^o ^p ^y ^m ^a ^d ^e ^a ^v ^a ⁱ l a ^b ^l e ^t o ^a ^l l ^b ^o ^a ^r ^d m^e ^m ^b ^e ^r ^s .

C^o ^m ^p ^l i a ⁿ ^t ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n ^N ^o ^t ^a ^p ^p ^l i c ^a ^b ^l e ^X

⁵ ³ . ^T ^h ^e ^t a ^s ^k ^o ^f ^s ^u ^p ^e ^r ^v ⁱ s ⁱ n ^g ^c ^o ^m ^p ^l i a ⁿ ^c ^e ^w ⁱ t h ^c ^o ^r ^p ^o ^r ^a ^t e ^g ^o ^v ^e ^r ⁿ ^a ⁿ ^c ^e ^r ^u ^l e ^s , ⁱ n ^t e ^r ⁿ ^a ^l ^c ^o ^d ^e ^s ^o ^f c ^o ⁿ ^d ^u ^c ^t ^a ⁿ ^d ^c ^o ^r ^p ^o ^r ^a ^t e ^s ^o ^c ⁱ a ^l ^r ^e ^s ^p ^o ⁿ ^s ⁱ b ⁱ l i t y ^p ^o ^l i c ^y ^s ^h ^o ^u ^l d ^b ^e ^a ^s ^s ⁱ g ⁿ ^e ^d ^t o ^o ⁿ ^e ^b ^o ^a ^r ^d c ^o ^m ^m ⁱ t t e ^e ^o ^r ^s ^p ^l i t ^b ^e ^t w ^e ^e ⁿ ^s ^e ^v ^e ^r ^a ^l , ^w ^h ⁱ c ^h ^c ^o ^u ^l d ^b ^e ^t h ^e ^a ^u ^d ⁱ t ^c ^o ^m ^m ⁱ t t e ^e , ^t h ^e ⁿ ^o ^m ⁱ n ^a ^t i o ⁿ c ^o ^m ^m ⁱ t t e ^e , ^t h ^e ^c ^o ^r ^p ^o ^r ^a ^t e ^s ^o ^c ⁱ a ^l ^r ^e ^s ^p ^o ⁿ ^s ⁱ b ⁱ l i t y ^c ^o ^m ^m ⁱ t t e ^e , ^w ^h ^e ^r ^e ^o ⁿ ^e ^e ^x ⁱ s ^t s , ^o ^r ^a ^d ^e ^d ⁱ c ^a ^t e ^d c ^o ^m ^m ⁱ t t e ^e ^e ^s ^t a ^b ^l i s ^h ^e ^d ^a ^d ^h ^o ^c ^b ^y ^t h ^e ^b ^o ^a ^r ^d ^u ⁿ ^d ^e ^r ⁱ t s ^p ^o ^w ^e ^r ^s ^o ^f ^s ^e ^l f ë o ^r ^g ^a ⁿ ⁱ s ^a ^t i o ⁿ , ^w ⁱ t h ^a ^t t h^e ^l e ^a ^s ^t ^t h ^e ^f o ^l l o ^w ⁱ n ^g ^f u ⁿ ^c ^t i o ⁿ ^s :

^a ) ^M o ⁿ ⁱ t o ^r ^c ^o ^m ^p ^l i a ⁿ ^c ^e ^w ⁱ t h ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ' s ⁱ n ^t e ^r ⁿ ^a ^l ^c ^o ^d ^e ^s ^o ^f ^c ^o ⁿ ^d ^u ^c ^t ^a ⁿ ^d ^c ^o ^r ^p ^o ^r ^a ^t e g^o ^v ^e ^r ⁿ ^a ⁿ ^c ^e ^r ^u ^l e ^s .

^b ) ^O v ^e ^r ^s ^e ^e ^t h ^e ^c ^o ^m ^m ^u ⁿ ⁱ c ^a ^t i o ⁿ ^a ⁿ ^d ^r ^e ^l a ^t i o ⁿ ^s ^s ^t r ^a ^t e ^g ^y ^w ⁱ t h ^s ^h ^a ^r ^e ^h ^o ^l d ^e ^r ^s ^a ⁿ ^d ⁱ n ^v ^e ^s ^t o ^r ^s , i n^c ^l u ^d ⁱ n ^g ^s ^m ^a ^l l ^a ⁿ ^d ^m ^e ^d ⁱ u ^m ^ë s ⁱ ^z ^e ^d ^s ^h ^a ^r ^e ^h ^o ^l d ^e ^r ^s .

^c ) ^P e ^r ⁱ^o ^d ⁱ^c ^a ^l^l ^y ^e ^v ^a ^l ^u ^a ^t^e ^t^h ^e ^e f f ^e ^c ^tⁱ ^v ^e ⁿ ^e ^s ^s ^o ^f ^t^h ^e ^c ^o ^m ^p ^a ⁿ ^y '^s ^c ^o ^r ^p ^o ^r ^a ^t^e ^g ^o ^v ^e ^r ⁿ ^a ⁿ ^c ^e s ^y ^s ^t e ^m , ^t o ^c ^o ⁿ ^f i r ^m ^t h ^a ^t ⁱ t ⁱ s ^f u ^l f i l l i n ^g ⁱ t s ^m ⁱ s ^s ⁱ o ⁿ ^t o ^p ^r ^o ^m ^o ^t e ^t h ^e ^c ^o ^r ^p ^o ^r ^a ^t e ⁱ n ^t e ^r ^e ^s ^t ^a ⁿ ^d c^a ^t e ^r ⁱ n ^g , ^a ^s ^a ^p ^p ^r ^o ^p ^r ⁱ a ^t e , ^t o ^t h ^e ^l e ^g ⁱ t i m ^a ^t e ⁱ n ^t e ^r ^e ^s ^t s ^o ^f ^r ^e ^m ^a ⁱ n ⁱ n ^g ^s ^t a ^k ^e ^h ^o ^l d ^e ^r ^s .

^d ) ^R e ^v ⁱ e ^w ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ' s ^c ^o ^r ^p ^o ^r ^a ^t e ^s ^o ^c ⁱ a ^l ^r ^e ^s ^p ^o ⁿ ^s ⁱ b ⁱ l i t ^y ^p ^o ^l i c ^y , ^e ⁿ ^s ^u ^r ⁱ n ^g ^t h ^a ^t ⁱ t ⁱ s g^e ^a ^r ^e ^d ^t o ^v ^a ^l u ^e ^c ^r ^e ^a ^t i o ⁿ .

^e ) ^M o ⁿ ⁱ t o ^r ^c ^o ^r ^p ^o ^r ^a ^t e ^s ^o ^c ⁱ a ^l ^r ^e ^s ^p ^o ⁿ ^s ⁱ b ⁱ l i t y ^s ^t r ^a ^t e ^g ^y ^a ⁿ ^d ^p ^r ^a ^c ^t i c ^e ^s ^a ⁿ ^d ^a ^s ^s ^e ^s ^s ^c ^o ^m ^p ^l i a ⁿ ^c ^e i n^t h ^e ⁱ r ^r ^e ^s ^p ^e ^c ^t .

^f ) ^M oⁿ ⁱ t o ^r ^a ⁿ ^d ^e ^v ^a ^l ^u ^a ^t e ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ' s ⁱ n ^t e ^r ^a ^c ^t i o ⁿ ^w ⁱ t h ⁱ t s ^s ^t a ^k ^e ^h ^o ^l ^d ^e ^r ^g ^r ^o ^u ^p ^s .

^g ) ^E v ^a ^l u ^a ^t e ^a ^l l ^a ^s ^p ^e ^c ^t s ^o ^f ^t h ^e ⁿ ^o ⁿ ^ë f i n ^a ⁿ ^c ⁱ a ^l ^r ⁱ s ^k ^s ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ⁱ s ^e ^x ^p ^o ^s ^e ^d ^t o , ⁱ n ^c ^l u ^d ⁱ n ^g o^p ^e ^r ^a ^t i o ⁿ ^a ^l , ^t e ^c ^h ⁿ ^o ^l o ^g ⁱ c ^a ^l , ^l e ^g ^a ^l , ^s ^o ^c ⁱ a ^l , ^e ⁿ ^v ⁱ r ^o ⁿ ^m ^e ⁿ ^t a ^l , ^p ^o ^l i t i c ^a ^l ^a ⁿ ^d ^r ^e ^p ^u ^t a ^t i o ⁿ ^a ^l ^r ⁱ s ^k ^s .

^h ) C ^o ^o ^r ^d ⁱ n ^a ^t e ⁿ ^o ⁿ ^ë f i n ^a ⁿ ^c ⁱ a ^l ^a ⁿ ^d ^d ⁱ v ^e ^r ^s ⁱ t y ^r ^e ^p ^o ^r ^t i n ^g ^p ^r ^o ^c ^e ^s ^s ^e ^s ⁱ n ^a ^c ^c ^o ^r ^d ^a ⁿ ^c ^e ^w ⁱ t h a^p ^p ^l i c ^a ^b ^l e ^l e ^g ⁱ s ^l a ^t i o ⁿ ^a ⁿ ^d ⁱ n ^t e ^r ⁿ ^a ^t i o ⁿ ^a ^l ^b ^e ⁿ ^c ^h ^m ^a ^r ^k ^s .

^o ^m ^p ^l i a ⁿ ^t ^X ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n

⁵ ⁴ . ^T ^h ^e ^c ^o ^r ^p ^o ^r ^a ^t e ^s ^o ^c ⁱ a ^l ^r ^e ^s ^p ^o ⁿ ^s ⁱ b ⁱ l i t y ^p ^o ^l i c ^y ^s ^h ^o ^u ^l d ^s ^t a ^t e ^t h ^e ^p ^r ⁱ n ^c ⁱ p ^l e ^s ^o ^r ^c ^o ^m ^m ⁱ t m ^e ⁿ ^t s t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^w ⁱ l l ^v ^o ^l u ⁿ ^t a ^r ⁱ l y ^a ^d ^h ^e ^r ^e ^t o ⁱ n ⁱ t s ^d ^e ^a ^l i n ^g ^s ^w ⁱ t h ^s ^t a ^k ^e ^h ^o ^l d ^e ^r ^g ^r ^o ^u ^p ^s , ^s ^p ^e ^c ⁱ f y ⁱ n ^g a^t ^l e ^a ^s ^t :

^a ) ^T ^h ^e ^g ^o ^a ^l s ^o ^f ⁱ t s ^c ^o ^r ^p ^o ^r ^a ^t e ^s ^o ^c ⁱ a ^l ^r ^e ^s ^p ^o ⁿ ^s ⁱ b ⁱ l i t y ^p ^o ^l i c ^y ^a ⁿ ^d ^t h ^e ^s ^u ^p ^p ^o ^r ^t ⁱ n ^s ^t r ^u ^m ^e ⁿ ^t s t o^b ^e ^d ^e ^p ^l o ^y ^e ^d .

^b ) ^T ^h ^e ^c ^o ^r ^p ^o ^r ^a ^t e ^s ^t r ^a ^t e ^g ^y ^w ⁱ t h ^r ^e ^g ^a ^r ^d ^t o ^s ^u ^s ^t a ⁱ n ^a ^b ⁱ l i t y , ^t h ^e ^e ⁿ ^v ⁱ r ^o ⁿ ^m ^e ⁿ ^t ^a ⁿ ^d ^s ^o ^c ⁱ a ^l i s^s ^u ^e ^s .

^c ) C ^o ⁿ ^c ^r ^e ^t e ^p ^r ^a ^c ^t i c ^e ^s ⁱ n ^m ^a ^t t e ^r ^s ^r ^e ^l a ^t i v ^e ^t o : ^s ^h ^a ^r ^e ^h ^o ^l d ^e ^r ^s , ^e ^m ^p ^l o ^y ^e ^e ^s , ^c ^l i e ⁿ ^t s , s ^u ^p ^p ^l i e ^r ^s , ^s ^o ^c ⁱ a ^l ^w ^e ^l f a ^r ^e ⁱ s ^s ^u ^e ^s , ^t h ^e ^e ⁿ ^v ⁱ r ^o ⁿ ^m ^e ⁿ ^t , ^d ⁱ v ^e ^r ^s ⁱ t y , ^f i s ^c ^a ^l ^r ^e ^s ^p ^o ⁿ ^s ⁱ b ⁱ l i t y , r^e ^s ^p ^e ^c ^t ^f o ^r ^h ^u ^m ^a ⁿ ^r ⁱ g ^h ^t s ^a ⁿ ^d ^t h ^e ^p ^r ^e ^v ^e ⁿ ^t i o ⁿ ^o ^f ⁱ l l e ^g ^a ^l ^c ^o ⁿ ^d ^u ^c ^t .

^d ) ^T ^h ^e ^m ^e ^t h ^o ^d ^s ^o ^r ^s ^y ^s ^t e ^m ^s ^f o ^r ^m ^o ⁿ ⁱ t o ^r ⁱ n ^g ^t h ^e ^r ^e ^s ^u ^l t s ^o ^f ^t h ^e ^p ^r ^a ^c ^t i c ^e ^s ^r ^e ^f e ^r ^r ^e ^d ^t o a^b ^o ^v ^e , ^a ⁿ ^d ⁱ d ^e ⁿ ^t i f y ⁱ n ^g ^a ⁿ ^d ^m ^a ⁿ ^a ^g ⁱ n ^g ^r ^e ^l a ^t e ^d ^r ⁱ s ^k ^s .

^e ) ^T ^h ^e ^m ^e ^c ^h ^a ⁿ ⁱ s ^m ^s ^f o ^r ^s ^u ^p ^e ^r ^v ⁱ s ⁱ n ^g ⁿ ^o ⁿ ^ë f i n ^a ⁿ ^c ⁱ a ^l ^r ⁱ s ^k , ^e ^t h ⁱ c ^s ^a ⁿ ^d ^b ^u ^s ⁱ n ^e ^s ^s ^c ^o ⁿ ^d ^u ^c ^t .

^f ) C^h ^a ⁿ ⁿ ^e ^l s ^f o ^r ^s ^t a ^k ^e ^h ^o ^l d ^e ^r ^c ^o ^m ^m ^u ⁿ ⁱ c ^a ^t i o ⁿ , ^p ^a ^r ^t i c ⁱ p ^a ^t i o ⁿ ^a ⁿ ^d ^d ⁱ a ^l o ^g ^u ^e .

^g ) ^R ^e ^s ^p ^o ⁿ ^s ⁱ b ^l e ^c ^o ^m ^m ^u ⁿ ⁱ c ^a ^t i o ⁿ ^p ^r ^a ^c ^t i c ^e ^s ^t h ^a ^t ^p ^r ^e ^v ^e ⁿ ^t ^t h ^e ^m ^a ⁿ ⁱ p ^u ^l a ^t i o ⁿ ^o ^f ⁱ n ^f o ^r ^m ^a ^t i o ⁿ aⁿ ^d ^p ^r ^o ^t e ^c ^t ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ' s ^h ^o ⁿ ^o ^u ^r ^a ⁿ ^d ⁱ n ^t e ^g ^r ⁱ t y .

C^o ^m ^p ^l i a ⁿ ^t ^X ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n

⁵ ⁵ . ^T ^h ^e ^c ^o ^m ^p ^a ⁿ ^y ^s ^h ^o ^u ^l d ^r ^e ^p ^o ^r ^t ^o ⁿ ^c ^o ^r ^p ^o ^r ^a ^t e ^s ^o ^c ⁱ a ^l ^r ^e ^s ^p ^o ⁿ ^s ⁱ b ⁱ l i t y ^d ^e ^v ^e ^l o ^p ^m ^e ⁿ ^t s ⁱ n ⁱ t s ^d ⁱ ^r ^e ^c ^t o ^r ^s ' ^r ^e ^p ^o ^r ^t ^o ^r ⁱ n ^a ^s ^e ^p ^a ^r ^a ^t e ^d ^o ^c ^u ^m ^e ⁿ ^t , ^u ^s ⁱ n ^g ^a ⁿ ⁱ n ^t e ^r ⁿ ^a ^t i o ⁿ ^a ^l l y ^a ^c ^c ^e ^p ^t e ^d m^e ^t h ^o ^d ^o ^l o ^g ^y .

C^o ^m ^p ^l i a ⁿ ^t ^X ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n

⁵ ⁶ . ^D i r ^e ^c ^t o ^r ^r ^e ^m ^u ⁿ ^e ^r ^a ^t i o ⁿ ^s ^h ^o ^u ^l d ^b ^e ^s ^u ^f f i c ⁱ e ⁿ ^t ^t o ^a ^t t r ^a ^c ^t ⁱ n ^d ⁱ v ⁱ d ^u ^a ^l s ^w ⁱ t h ^t h ^e ^d ^e ^s ⁱ r ^e ^d p ^r ^o ^f i l e ^a ⁿ ^d ^c ^o ^m ^p ^e ⁿ ^s ^a ^t e ^t h ^e ^c ^o ^m ^m ⁱ t m ^e ⁿ ^t , ^a ^b ⁱ l i t i e ^s ^a ⁿ ^d ^r ^e ^s ^p ^o ⁿ ^s ⁱ b ⁱ l i t y ^t h ^a ^t ^t h ^e ^p ^o ^s ^t d ^e ^m ^a ⁿ ^d ^s , ^b ^u ^t ⁿ ^o ^t ^s ^o ^h ⁱ g ^h ^a ^s ^t o ^c ^o ^m ^p ^r ^o ^m ⁱ s ^e ^t h ^e ⁱ n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^j ^u ^d ^g ^e ^m ^e ⁿ ^t ^o ^f ⁿ ^o ⁿ ^ë e ^x ^e ^c ^u ^t i v ^e dⁱ r ^e ^c ^t o ^r ^s .

C^o ^m ^p ^l i a ⁿ ^t ^X ^E ^x ^p ^l a ⁱ n

⁵ ⁷ . ^V a ^r ⁱ a ^b ^l e ^r ^e ^m ^u ⁿ ^e ^r ^a ^t i o ⁿ ^l i n ^k ^e ^d ^t o ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^a ⁿ ^d ^t h ^e ^d ⁱ ^r ^e ^c ^t o ^r ' s ^p ^e ^r ^f ^o ^r ^m ^a ⁿ ^c ^e , ^t h ^e a ^w ^a ^r ^d ^o ^f ^s ^h ^a ^r ^e ^s , ^o ^p ^t i o ⁿ ^s ^o ^r ^a ⁿ ^y ^o ^t h ^e ^r ^r ⁱ g ^h ^t ^t o ^a ^c ^q ^u ⁱ r ^e ^s ^h ^a ^r ^e ^s ^o ^r ^t o ^b ^e ^r ^e ^m ^u ⁿ ^e ^r ^a ^t e ^d ^o ⁿ ^t h ^e b ^a ^s ⁱ s ^o ^f ^s ^h ^a ^r ^e ^p ^r ⁱ c ^e ^m ^o ^v ^e ^m ^e ⁿ ^t s , ^a ⁿ ^d ^m ^e ^m ^b ^e ^r ^s ^h ⁱ p ^o ^f ^l o ⁿ ^g ^ë t e ^r ^m ^s ^a ^v ⁱ n ^g ^s ^s ^c ^h ^e ^m ^e ^s ^s ^u ^c ^h ^a ^s p^e ⁿ ^s ⁱ o ⁿ ^p ^l a ⁿ ^s ^s ^h ^o ^u ^l d ^b ^e ^c ^o ⁿ ^f i n ^e ^d ^t o ^e ^x ^e ^c ^u ^t i v ^e ^d ⁱ r ^e ^c ^t o ^r ^s .

^T ^h ^e ^c ^o ^m ^p ^a ⁿ ^y ^m ^a ^y ^c ^o ⁿ ^s ⁱ d ^e ^r ^t h ^e ^s ^h ^a ^r ^e ^ë b ^a ^s ^e ^d ^r ^e ^m ^u ⁿ ^e ^r ^a ^t i o ⁿ ^o ^f ⁿ ^o ⁿ ^ë e ^x ^e ^c ^u ^t i v ^e ^d ⁱ r ^e ^c ^t o ^r ^s p ^r ^o ^v ⁱ d ^e ^d ^t h ^e ^y ^r ^e ^t a ⁱ n ^s ^u ^c ^h ^s ^h ^a ^r ^e ^s ^u ⁿ ^t i l ^t h ^e ^e ⁿ ^d ^o ^f ^t h ^e ⁱ r ^m ^a ⁿ ^d ^a ^t e . ^T ^h ⁱ s ^c ^o ⁿ ^d ⁱ t i o ⁿ , ^h ^o ^w ^e ^v ^e ^r , w ⁱ l l ⁿ ^o ^t ^a ^p ^p ^l y ^t o ^s ^h ^a ^r ^e ^s ^t h ^a ^t ^t h ^e ^d ⁱ r ^e ^c ^t o ^r ^m ^u ^s ^t ^d ⁱ s ^p ^o ^s ^e ^o ^f ^t o ^d ^e ^f r ^a ^y ^c ^o ^s ^t s ^r ^e ^l a ^t e ^d ^t o ^t h ^e ⁱ r a^c ^q ^u ⁱ s ⁱ t i o ⁿ .

C^o ^m ^p ^l i a ⁿ ^t ^X ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n

⁵ ⁸ . ^I ⁿ ^t h ^e ^c ^a ^s ^e ^o ^f ^v ^a ^r ⁱ a ^b ^l e ^a ^w ^a ^r ^d ^s , ^r ^e ^m ^u ⁿ ^e ^r ^a ^t i o ⁿ ^p ^o ^l i c ⁱ e ^s ^s ^h ^o ^u ^l d ⁱ n ^c ^l u ^d ^e ^l i m ⁱ t s ^a ⁿ ^d t e ^c ^h ⁿ ⁱ c ^a ^l ^s ^a ^f e ^g ^u ^a ^r ^d ^s ^t o ^e ⁿ ^s ^u ^r ^e ^t h ^e ^y ^r ^e ^f l e ^c ^t ^t h ^e ^p ^r ^o ^f e ^s ^s ⁱ o ⁿ ^a ^l ^p ^e ^r ^f o ^r ^m ^a ⁿ ^c ^e ^o ^f ^t h ^e b ^e ⁿ ^e ^f i c ⁱ a ^r ⁱ e ^s ^a ⁿ ^d ⁿ ^o ^t ^s ⁱ m ^p ^l y ^t h ^e ^g ^e ⁿ ^e ^r ^a ^l ^p ^r ^o ^g ^r ^e ^s ^s ^o ^f ^t h ^e ^m ^a ^r ^k ^e ^t s ^o ^r ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ' s ^s ^e ^c ^t o ^r , o^r ^c ⁱ r ^c ^u ^m ^s ^t a ⁿ ^c ^e ^s ^o ^f ^t h ^a ^t ^k ⁱ n ^d .

^I ⁿ ^p ^a ^r ^t i c ^u ^l a ^r , ^v ^a ^r ⁱ a ^b ^l e ^r ^e ^m ^u ⁿ ^e ^r ^a ^t i o ⁿ ⁱ t e ^m ^s ^s ^h ^o ^u ^l d ^m ^e ^e ^t ^t h ^e ^f o ^l l o ^w ⁱ n ^g ^c ^o ⁿ ^d ⁱ t i o ⁿ ^s :

^a ) ^B ^e ^s ^u ^b ^j ^e ^c ^t ^t o ^p ^r ^e ^d ^e ^t e ^r ^m ⁱ n ^e ^d ^a ⁿ ^d ^m ^e ^a ^s ^u ^r ^a ^b ^l e ^p ^e ^r ^f o ^r ^m ^a ⁿ ^c ^e ^c ^r ⁱ t e ^r ⁱ a ^t h ^a ^t ^f a ^c ^t o ^r ^t h ^e rⁱ s ^k ^a ^s ^s ^u ^m ^e ^d ^t o ^o ^b ^t a ⁱ n ^a ^g ⁱ v ^e ⁿ ^o ^u ^t c ^o ^m ^e .

^b ) ^P r ^o ^m ^o ^t e ^t h ^e ^l o ⁿ ^g ^ë t e ^r ^m ^s ^u ^s ^t a ⁱ n ^a ^b ⁱ l i t y ^o ^f ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^a ⁿ ^d ⁱ n ^c ^l u ^d ^e ⁿ ^o ⁿ ^ë f i n ^a ⁿ ^c ⁱ a ^l c ^r ⁱ t e ^r ⁱ a ^t h ^a ^t ^a ^r ^e ^r ^e ^l e ^v ^a ⁿ ^t ^f ^o ^r ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ' s ^l o ⁿ ^g ^ë t e ^r ^m ^v ^a ^l u ^e , ^s ^u ^c ^h ^a ^s ^c ^o ^m ^p ^l i a ⁿ ^c ^e ^w ⁱ t h i t sⁱ n ^t e ^r ⁿ ^a ^l ^r ^u ^l e ^s ^a ⁿ ^d ^p ^r ^o ^c ^e ^d ^u ^r ^e ^s ^a ⁿ ^d ⁱ t s ^r ⁱ s ^k ^c ^o ⁿ ^t r ^o ^l ^a ⁿ ^d ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^p ^o ^l i c ⁱ e ^s .

^c ) ^B ^e ^f o ^c ^u ^s ^e ^d ^o ⁿ ^a ^c ^h ⁱ e ^v ⁱ n ^g ^a ^b ^a ^l a ⁿ ^c ^e ^b ^e ^t w ^e ^e ⁿ ^t h ^e ^d ^e ^l i v ^e ^r ^y ^o ^f ^s ^h ^o ^r ^t , ^m ^e ^d ⁱ u ^m ^a ⁿ ^d ^l o ⁿ ^g ^ë t e ^r ^m ^o ^b ^j ^e ^c ^t i v ^e ^s , ^s ^u ^c ^h ^t h ^a ^t ^p ^e ^r ^f o ^r ^m ^a ⁿ ^c ^e ^ë r ^e ^l a ^t e ^d ^p ^a ^y ^r ^e ^w ^a ^r ^d ^s ^o ⁿ ^g ^o ⁱ n ^g ^a ^c ^h ⁱ e ^v ^e ^m ^e ⁿ ^t , m ^a ⁱ n ^t a ⁱ n ^e ^d ^o ^v ^e ^r ^s ^u ^f f i c ⁱ e ⁿ ^t ^t i m ^e ^t o ^a ^p ^p ^r ^e ^c ⁱ a ^t e ⁱ t s ^c ^o ⁿ ^t r ⁱ b ^u ^t i o ⁿ ^t o ^l o ⁿ ^g ^ë t e ^r ^m ^v ^a ^l u ^e c ^r ^e ^a ^t i o ⁿ . ^T ^h ⁱ s ^w ⁱ l l ^e ⁿ ^s ^u ^r ^e ^t h ^a ^t ^p ^e ^r ^f o ^r ^m ^a ⁿ ^c ^e ^m ^e ^a ^s ^u ^r ^e ^m ^e ⁿ ^t ⁱ s ⁿ ^o ^t ^b ^a ^s ^e ^d ^s ^o ^l e ^l y ^o ⁿ ^o ⁿ ^e ^ë o ^f f , o^c ^c ^a ^s ⁱ o ⁿ ^a ^l ^o ^r ^e ^x ^t r ^a ^o ^r ^d ⁱ n ^a ^r ^y ^e ^v ^e ⁿ ^t s .

C^o ^m ^p ^l i a ⁿ ^t ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n ^N ^o ^t ^a ^p ^p ^l i c ^a ^b ^l e ^X

⁵ ⁹ . ^A ^m ^a ^j ^o ^r ^p ^a ^r ^t ^o ^f ^v ^a ^r ⁱ a ^b ^l e ^r ^e ^m ^u ⁿ ^e ^r ^a ^t i o ⁿ ^c ^o ^m ^p ^o ⁿ ^e ⁿ ^t s ^s ^h ^o ^u ^l d ^b ^e ^d ^e ^f e ^r ^r ^e ^d ^f o ^r ^a ^l o ⁿ ^g e ⁿ ^o ^u ^g ^h ^p ^e ^r ⁱ o ^d ^t o ^e ⁿ ^s ^u ^r ^e ^t h ^a ^t ^p ^r ^e ^d ^e ^t e ^r ^m ⁱ n ^e ^d ^p ^e ^r ^f o ^r ^m ^a ⁿ ^c ^e ^c ^r ⁱ t e ^r ⁱ a ^h ^a ^v ^e ^e ^f f e ^c ^t i v ^e ^l y ^b ^e ^e ⁿ m^e ^t .

C^o ^m ^p ^l i a ⁿ ^t ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n ^N ^o ^t ^a ^p ^p ^l i c ^a ^b ^l e ^X

⁶ ⁰ . ^R ^e ^m ^u ⁿ ^e ^r ^a ^t i o ⁿ ^l i n ^k ^e ^d ^t o ^c ^o ^m ^p ^a ⁿ ^y ^e ^a ^r ⁿ ⁱ n ^g ^s ^s ^h ^o ^u ^l d ^b ^e ^a ^r ⁱ n ^m ⁱ n ^d ^a ⁿ ^y ^q ^u ^a ^l i f i c ^a ^t i o ⁿ ^s s^t a ^t e ^d ⁱ n ^t h ^e ^e ^x ^t e ^r ⁿ ^a ^l ^a ^u ^d ⁱ t o ^r ' s ^r ^e ^p ^o ^r ^t ^t h ^a ^t ^r ^e ^d ^u ^c ^e ^t h ^e ⁱ ^r ^a ^m ^o ^u ⁿ ^t .

C^o ^m ^p ^l i a ⁿ ^t ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n ^N ^o ^t ^a ^p ^p ^l i c ^a ^b ^l e ^X

⁶ ¹ . ^A ^m ^a ^j ^o ^r ^p ^a ^r ^t ^o ^f ^e ^x ^e ^c ^u ^t i ^v ^e ^d ⁱ ^r ^e ^c ^t o ^r ^s ' ^v ^a ^r ⁱ a ^b ^l e ^r ^e ^m ^u ⁿ ^e ^r ^a ^t i o ⁿ ^s ^h ^o ^u ^l ^d ^b ^e ^l i n ^k ^e ^d ^t o ^t h ^e a ^w ^a ^r ^d ^o ^f ^s ^h ^a ^r ^e ^s ^o ^r ^f i n ^a ⁿ ^c ⁱ a ^l ⁱ n ^s ^t r ^u ^m ^e ⁿ ^t s ^w ^h ^o ^s ^e ^v ^a ^l u ^e ⁱ s ^l i n ^k ^e ^d ^t o ^t h ^e ^s ^h ^a ^r ^e ^p ^r ⁱ c ^e .

C^o ^m ^p ^l i a ⁿ ^t ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n ^N ^o ^t ^a ^p ^p ^l i c ^a ^b ^l e ^X

⁶ ² . ^F ^o ^l l o ^w ⁱ n ^g ^t h ^e ^a ^w ^a ^r ^d ^o ^f ^s ^h ^a ^r ^e ^s , ^s ^h ^a ^r ^e ^o ^p ^t i o ⁿ ^s ^o ^r ^o ^t h ^e ^r ^r ⁱ g ^h ^t s ^o ⁿ ^s ^h ^a ^r ^e ^s ^d ^e ^r ⁱ v ^e ^d ^f r ^o ^m t h ^e ^r ^e ^m ^u ⁿ ^e ^r ^a ^t i o ⁿ ^s ^y ^s ^t e ^m , ^d ⁱ r ^e ^c ^t o ^r ^s ^s ^h ^o ^u ^l d ⁿ ^o ^t ^b ^e ^a ^l l o ^w ^e ^d ^t o ^t r ^a ⁿ ^s ^f e ^r ^a ⁿ ^u ^m ^b ^e ^r ^o ^f ^s ^h ^a ^r ^e ^s e ^q ^u ⁱ v ^a ^l e ⁿ ^t ^t o ^t w ⁱ c ^e ^t h ^e ⁱ r ^a ⁿ ⁿ ^u ^a ^l ^f i ^x ^e ^d ^r ^e ^m ^u ⁿ ^e ^r ^a ^t i o ⁿ , ^o ^r ^t o ^e ^x ^e ^r ^c ⁱ s ^e ^t h ^e ^s ^h ^a ^r ^e ^o ^p ^t i o ⁿ ^s ^o ^r o^t h ^e ^r ^r ⁱ g ^h ^t s ^o ⁿ ^s ^h ^a ^r ^e ^s ^f o ^r ^a ^t ^l e ^a ^s ^t ^t h ^r ^e ^e ^y ^e ^a ^r ^s ^a ^f t e ^r ^t h ^e ⁱ r ^a ^w ^a ^r ^d .

^T ^h ^e ^a ^b ^o ^v ^e ^c ^o ⁿ ^d ⁱ t i o ⁿ ^w ⁱ l l ⁿ ^o ^t ^a ^p ^p ^l y ^t o ^a ⁿ ^y ^s ^h ^a ^r ^e ^s ^t h ^a ^t ^t h ^e ^d ⁱ r ^e ^c ^t o ^r ^m ^u ^s ^t ^d ⁱ s ^p ^o ^s ^e ^o ^f ^t o d ^e ^f r ^a ^y ^c ^o ^s ^t s ^r ^e ^l a ^t e ^d ^t o ^t h ^e ⁱ r ^a ^c ^q ^u ⁱ s ⁱ t i o ⁿ .

C^o ^m ^p ^l i a ⁿ ^t ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n ^N ^o ^t ^a ^p ^p ^l i c ^a ^b ^l e ^X

⁶ ³ . C ^o ⁿ ^t r ^a ^c ^t u ^a ^l ^a ^r ^r ^a ⁿ ^g ^e ^m ^e ⁿ ^t s ^s ^h ^o ^u ^l d ⁱ n ^c ^l u ^d ^e ^p ^r ^o ^v ⁱ s ⁱ o ⁿ ^s ^t h ^a ^t ^p ^e ^r ^m ⁱ t ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^t o r ^e ^c ^l a ⁱ m ^v ^a ^r ⁱ a ^b ^l e ^c ^o ^m ^p ^o ⁿ ^e ⁿ ^t s ^o ^f ^r ^e ^m ^u ⁿ ^e ^r ^a ^t i o ⁿ ^w ^h ^e ⁿ ^p ^a ^y ^m ^e ⁿ ^t ^w ^a ^s ^o ^u ^t ^o ^f ^s ^t e ^p ^w ⁱ t h ^t h ^e ^d ⁱ ^r ^e ^c ^t o ^r ' s ^a ^c ^t ^u ^a ^l ^p ^e ^r ^f ^o ^r ^m ^a ⁿ ^c ^e ^o ^r ^b ^a ^s ^e ^d ^o ⁿ ^d ^a ^t a ^s ^u ^b ^s ^e ^q ^u ^e ⁿ ^t l ^y ^f ^o ^u ⁿ ^d ^t o ^b ^e ^m ⁱ s ^s ^t a ^t e ^d .

C^o ^m ^p ^l i a ⁿ ^t ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n ^N ^o ^t ^a ^p ^p ^l i c ^a ^b ^l e ^X

⁶ ⁴ . ^T ^e ^r ^m ⁱ n ^a ^t i o ⁿ ^p ^a ^y ^m ^e ⁿ ^t s ^s ^h ^o ^u ^l d ⁿ ^o ^t ^e ^x ^c ^e ^e ^d ^a ^f i ^x ^e ^d ^a ^m ^o ^u ⁿ ^t ^e ^q ^u ⁱ v ^a ^l e ⁿ ^t ^t o ^t w ^o ^y ^e ^a ^r ^s ^o ^f ^t h ^e ^d ⁱ ^r ^e ^c ^t o ^r ' s ^t o ^t a ^l ^a ⁿ ⁿ ^u ^a ^l ^r ^e ^m ^u ⁿ ^e ^r ^a ^t i o ⁿ ^a ⁿ ^d ^s ^h ^o ^u ^l ^d ⁿ ^o ^t ^b ^e ^p ^a ⁱ ^d ^u ⁿ ^t i l ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^c ^o ⁿ ^f ⁱ ^r ^m ^s t h^a ^t ^h ^e ^o ^r ^s ^h ^e ^h ^a ^s ^m ^e ^t ^t h ^e ^p ^r ^e ^d ^e ^t e ^r ^m ⁱ n ^e ^d ^p ^e ^r ^f o ^r ^m ^a ⁿ ^c ^e ^c ^r ⁱ t e ^r ⁱ a .

C^o ^m ^p ^l i a ⁿ ^t ^P ^a ^r t i a ^l l y ^c ^o ^m ^p ^l i a ⁿ ^t ^E ^x ^p ^l a ⁱ n ^N ^o ^t ^a ^p ^p ^l i c ^a ^b ^l e ^X

O ^T ^H ^E ^R ^I N ^F ^O ^R ^M ^A ^T ^I O ^N ^O ^F ^I N ^T ^E ^R ^E ^S ^T H

¹ . ^I ^f ^y ^o ^u ^c ^o ⁿ ^s ⁱ d ^e ^r ^t h ^a ^t ^t h ^e ^r ^e ⁱ s ^a ⁿ ^y ^m ^a ^t e ^r ⁱ a ^l ^c ^o ^r ^p ^o ^r ^a ^t e ^g ^o ^v ^e ^r ⁿ ^a ⁿ ^c ^e ^r ^e ^l a ^t e ^d ^m ^a ^t t e ^r ^r ^e ^l a ^t i n ^g t o ^y ^o ^u ^r ^c ^o ^m ^p ^a ⁿ ^y ^o ^r ⁱ t s ^g ^r ^o ^u ^p ^t h ^a ^t ^h ^a ^s ⁿ ^o ^t ^b ^e ^e ⁿ ^a ^d ^d ^r ^e ^s ^s ^e ^d ^a ⁿ ^y ^w ^h ^e ^r ^e ^e ^l s ^e ⁱ n ^t h ⁱ s ^r ^e ^p ^o ^r ^t t h ^a ^t ⁱ s ⁿ ^e ^c ^e ^s ^s ^a ^r ^y ^t o ^p ^r ^o ^v ⁱ d ^e ^a ^m ^o ^r ^e ^c ^o ^m ^p ^r ^e ^h ^e ⁿ ^s ⁱ v ^e ^a ⁿ ^d ^s ^u ^b ^s ^t a ⁿ ^t i a ^t e ^d ^p ⁱ c ^t u ^r ^e ^o ^f ^c ^o ^r ^p ^o ^r ^a ^t e g ^o ^v ^e ^r ⁿ ^a ⁿ ^c ^e ^s ^t r ^u ^c ^t u ^r ^e ^o ^r ^p ^r ^a ^c ^t i c ^e ^s ^a ^t ^y ^o ^u ^r ^c ^o ^m ^p ^a ⁿ ^y ^o ^r ⁱ t s ^g ^r ^o ^u ^p , ^o ^u ^t l i n ^e ^t h ^e ^m ^b ^r ⁱ e ^f l y h^e ^r ^e .
² . ^Y o ^u ^m ^a ^y ⁱ n ^c ^l u ^d ^e ⁱ n ^t h ⁱ s ^s ^e ^c ^t i o ⁿ ^o ^t h ^e ^r ^r ^e ^l e ^v ^a ⁿ ^t , ^b ^u ^t ⁿ ^o ^t ^r ^e ⁱ t e ^r ^a ^t i v ^e , ⁱ n ^f o ^r ^m ^a ^t i o ⁿ , c^l a ^r ⁱ f i c ^a ^t i o ⁿ ^o ^r ^q ^u ^a ^l i f i c ^a ^t i o ⁿ ^r ^e ^l a ^t e ^d ^t o ^t h ^e ^e ^a ^r ^l i e ^r ^s ^e ^c ^t i o ⁿ ^s ^o ^f ^t h ⁱ s ^r ^e ^p ^o ^r ^t .

T h ^e ^b ^r e ^a ^k ^d ^o ^w ⁿ ^o ^f ^t h ^e ⁱ n ^d ⁱ r e ^c ^t ^a ⁿ ^d ^d ⁱ r e ^c ^t ^h ^o ^l d ^e ^r s ^o ^f ^s ⁱ g ⁿ ⁱ f i c ^a ⁿ ^t ⁱ n ^t e ^r e ^s ^t s ⁱ n ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^r e ^p ^o ^r t e ^d i n ^s ^e ^c ^t i o ⁿ ^A . ² ^c ^o ^r r e ^s ^p ^o ⁿ ^d ^s ^w ⁱ t h ^t^h ^o ^s ^e ^r^e ^g ⁱ^s ^t^e ^r^e ^d ^a ^t ^t^h ^e ^C ^N ^M ^V ' s ^s ^h ^a ^r^e ^h ^o ^l^d ^e ^r ^r^e ^c ^o ^r^d ^s ^a ^t ^t^h ^e ^t i m ^e o^f ^b ^e ^e ⁿ ^r e ^c ^o ^r d ^e ^d .

^T ^h i s ^a ⁿ ⁿ ^u ^a ^l ^c ^o r p ^o r a t e ^g ^o ^v ^e r n ^a ⁿ ^c ^e r e ^p ^o r t ^w ^a ^s ^a ^p ^p r o ^v ^e ^d ^b ^y t h ^e ^C ^o ^m ^p ^a ⁿ ^y ' s ^B ^o ^a r d ^o ^f ^D i r e ^c t o r s oⁿ ^F ^e ^b ^r^u ^a ^r^y ¹³ t h , ² ⁰ ² ⁰ .

^S p ^e ^c ⁱ f i c ^a ^l l y , ⁱ n ^d ⁱ c ^a ^t e ^w ^h ^e ^t h ^e ^r ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ⁱ s ^s ^u ^b ^j ^e ^c ^t ^t o ^t h ^e ^c ^o ^r ^p ^o ^r ^a ^t e ^g ^o ^v ^e ^r ⁿ ^a ⁿ ^c ^e l e ^g ⁱ s ^l a ^t i o ⁿ ^o ^f ^a ⁿ ^y ^c ^o ^u ⁿ ^t r ^y ^o ^t h ^e ^r ^t h ^a ⁿ ^S p ^a ⁱ n ^a ⁿ ^d , ⁱ f ^s ^o , ⁱ n ^c ^l u ^d ^e ^a ⁿ ^y ^m ^a ⁿ ^d ^a ^t o ^r ^y ^d ⁱ s ^c ^l o ^s ^u ^r ^e ^s t h^a ^t ^a ^r ^e ^d ⁱ f f e ^r ^e ⁿ ^t ^f r ^o ^m ^t h ^o ^s ^e ^r ^e ^q ^u ⁱ r ^e ^d ^f o ^r ^t h ⁱ s ^r ^e ^p ^o ^r ^t .

³ . ^S t a ^t e ^a ^l s ^o ^w ^h ^e ^t h ^e ^r ^t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^v ^o ^l u ⁿ ^t a ^r ⁱ l y ^s ^u ^b ^s ^c ^r ⁱ b ^e ^s ^t o ^o ^t h ^e ^r ^b ^u ^s ⁱ n ^e ^s ^s ^e ^t h ⁱ c ^s ^o ^r c ^o ^r ^p ^o ^r ^a ^t e ^g ^o ^v ^e ^r ⁿ ^a ⁿ ^c ^e ^c ^o ^d ^e ^s , ^w ^h ^e ^t h ^e ^r ⁱ n ^t e ^r ⁿ ^a ^t i o ⁿ ^a ^l , ^s ^e ^c ^t o ^r ^ë s ^p ^e ^c ⁱ f i c ^o ^r ^o ^t h ^e ^r . ^I ^f ^s ^o , i d ^e ⁿ ^t i f y ^t h ^e ^c ^o ^d ^e ^s ^a ^p ^p ^l i e ^d ^a ⁿ ^d ^t h ^e ^d ^a ^t e ^o ^f ^a ^d ^h ^e ^s ⁱ o ⁿ . ^S t a ^t e ^s ^p ^e ^c ⁱ f i c ^a ^l l y ^w ^h ^e ^t h ^e ^r ^t h ^e c ^o ^m ^p ^a ⁿ ^y ^s ^u ^b ^s ^c ^r ⁱ b ^e ^s ^t o ^t h ^e ^G o ^o ^d ^T ^a ^x ^P r^a ^c ^t i c ^e ^C ^o ^d ^e ( o ^f ² ⁰ ^J ^u ^l y ² ⁰ ¹ ⁰ ) .

^I ⁿ ^d ⁱ c ^a ^t e ^w ^h ^e ^t h ^e ^r ^a ⁿ ^y ^d ⁱ r ^e ^c ^t o ^r ^s ^v ^o ^t e ^d ^a ^g ^a ⁱ n ^s ^t ^o ^r ^a ^b ^s ^t a ⁱ n ^e ^d ^f r ^o ^m ^v ^o ^t i n ^g ^o ⁿ ^t h ^e ^a ^p ^p ^r ^o ^v ^a ^l o^f ^t h ⁱ s ^r ^e ^p ^o ^r ^t :

^Y e ^s ^N ^o ^X

N a m e o r c o m p a n y n a m e o f a n y d i r e c t o r s o d i d n o t v o t e i n f a v o u r o f a u t o r i s i n g w h h t i s r e p o r t f o r i s s u e . h	R e a s o n ( v o t e c a s t a g a i n s t a b s t e n t i o n n o n Ô a t t e n d a n c e )	p l a n a t i o n f o r t e h E x r e a s o n g i v e n

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LAR ESPAÑA REAL ESTATE SOCIMI, S.A.

Financial Statements and Management Report 31 December 2019

Prepared in compliance with Royal Decree 1514/2007, of 16 November, which approved the Spanish General Chart of Accounts, taking into consideration the industry adaptations and amendments approved subsequently thereto.

(1)		NATURE AND ACTIVITIES OF THE COMPANY	10
(2)		BASIS OF PRESENTATION	13
		Regulatory framework on financial information	13
		Fair image	13
		Non-mandatory accounting principles applied	13
		Critical issues regarding the measurement and estimation of uncertainties	14
		Comparative information	14
		Grouping together of items	14
		Changes in accounting criteria	14
		Correction of errors	14
		Functional and presentation currency	14
(3)		DISTRIBUTION OF PROFIT	15
(4)		RECORD AND MEASUREMENT STANDARDS	15
		Financial instruments	15
		Own equity instruments held by the Company	19
		Distributions to shareholders	19
		Cash and cash equivalents	19
		Short-term employee benefits	19
		Payments based on shares	19
		Provisions and contingencies	19
		Recognition of income	20
		Taxes on profits	21
		Classification of assets and liabilities as current and non-current	22
		Environmental assets and liabilities	22
		Transactions between Group companies	22
		Statement of cash flows	22
		Non-current assets held for sale	23
(5)		INVESTMENT PROPERTY	23
(6)		INVESTMENTS IN GROUP COMPANIES AND ASSOCIATES	25
	(a)	Investments in equity instruments	25
(7)		FINANCIAL ASSETS BY CATEGORY	29
	(a)	Classification of financial assets by category	29
(8)		NON-CURRENT ASSETS HELD FOR SALE	29
(9)		NET EQUITY	30
		Capital	30
		Issue premium	31
		Reserves	32
		Treasury shares	33
		Dividends paid	34
(10)		FINANCIAL LIABILITIES BY CATEGORY	34
		Classification of financial liabilities by category	34
		Classification of financial liabilities by maturity	35
		Financial liabilities from borrowings	35
(11)		TRADE AND OTHER PAYABLES	38
(12)		INFORMATION ON THE AVERAGE NUMBER OF DAYS PAYABLE

	OUTSTANDING	38
(13)	PUBLIC ENTITIES AND TAXATION	39
(a)	Balances with public entities	39
(b)	Periods pending verification and inspections	40
(c)	Reporting requirements for SOCIMIs pursuant to Law 11/2009 amended
	by Law 16/2012	41
(14)	RISK MANAGEMENT POLICY	44
(a)	Financial risk factors	44
(b)	Capital management	47
(15)	INCOME AND EXPENSES	48
(a)	Net turnover	48
(b)	Personnel expenses	48
(c)	Other operating expenses	49
(16)	RELATED PARTY BALANCES AND TRANSACTIONS	49
(a)	Transactions and balances between the Company and related parties	49
(b)	Details of transactions and balances held with related parties	51
(c)	Information relating to Directors and Senior Management staff of the Company	55
(d)	Transactions other than ordinary business or under terms differing from market
	conditions carried out by the Directors	56
(e)	Investments and positions in other companies held by the Directors and their
	related parties	56
(17)	EMPLOYEE INFORMATION	58
(18)	AUDIT FEES	58
(19)	EVENTS AFTER THE REPORTING PERIOD	59
(20)	EXPLANATION ADDED FOR TRANSLATION TO ENGLISH	59

LAR ESPAÑA REAL ESTATE SOCIMI, S.A. Balance Sheet at 31 December 2019

(Expressed in thousands of Euros)

Assets	Note	31.12.2019	31.12.2018

Investment property		97	98
Land	5	40	40
Buildings	5	57	58
Long-term investments in Group companies and associates		757,436	710,170
Equity instruments	6a	757,436	710,170
Total non-current assets		757,533	710,268
Non-current assets held for sale	8	-	19,834
Trade and other receivables		21,338	50,889
Client receivables for sales and rendering of services		58	76
Clients, Group companies and associates	16	19,593	48,732
Sundry debtors		840	840
Current tax assets	13a	847	1,241
Investments in Group companies and associates	16	28,700	-
Other financial assets		28,700	-
Short-term financial investments	7a	99	3,127
Other financial assets		99	3,127
Short-term accruals		346	481
Cash and cash equivalents		26,703	133,562
Treasury	14	26,703	133,562
Total current assets		77,186	207,893
Total assets		834,719	918,161

The accompanying Notes 1 to 20 and Appendix I form an integral part of the balance sheet at 31 December 2019.

LAR ESPAÑA REAL ESTATE SOCIMI, S.A. Balance Sheet at 31 December 2019

(Expressed in thousands of Euros)

Net Equity and Liabilities	Note	31.12.2019	31.12.2018
Share capital
Capital		175,267	186,438
Issued capital	9a	175,267	186,438
Issue premium	9b	475,130	476,301
Reserves	9c	(48,942)	(24,641)
Legal and statutory		10,879	2,968
Other reserves		(59,821)	(27,609)
(Treasury stock)	9d	(762)	(1,228)
Other shareholder contributions		240	240
Profit for the period	3	61,111	76,082
Total equity		662,044	713,192

Long-term borrowings		139,415	139,114
Bonds and other marketable securities	10	139,376	139,077
Other financial liabilities	10	39	37
Total non-current liabilities		139,415	139,114

Short-term borrowings		3,494	3,482
Bonds and other marketable securities	10	3,482	3,482
Bank borrowings		12	-
Short-term debt with Group companies and associates	10, 16	27,608	50,487

Trade and other payables		2,158	11,886
Short-term suppliers, related companies	11, 16	646	9,303
Sundry creditors	11	347	328
Personnel (salaries payable)	11	119	116
Other Public Entity payables	11, 13	1,046	2,139
Total current liabilities		33,260	65,855
Total equity and liabilities		834,719	918,161

The accompanying Notes 1 to 20 and Appendix I form an integral part of the balance sheet at 31 December 2019.

LAR ESPAÑA REAL ESTATE SOCIMI, S.A. Income Statement for 2019

(Expressed in thousands of Euros)

	Note	2019	2018
On-going transactions
Net turnover		71,813	86,721
Income from investments in equity instruments	4h, 15a, 16	67,449	38,941
Income from investments in Group companies and associates	16	-	27,921
Income from rebilling financial expenses within the Group	15a, 16	4,364	4,352
Income from the sale of equity instruments	6a	-	15,507
Other operating income		109	1
Non-core and other current operating income		109	1
Staff expenses		(423)	(502)
Salaries and wages	15b	(367)	(437)
Benefits	15b	(56)	(65)
Other operating expenses		(2,076)	(2,783)
External services	15c	(2,081)	(2,776)
Taxes	15c	(4)	(7)
Losses on, impairment of and change in allowances for trade operations		9	-
Amortisation of fixed assets	5	(1)	(1)
Impairment and profits/(losses) from disposals of financial instruments		(3,547)	(2,796)
Impairment and losses	6a	(3,547)	(2,796)
Operating profit/(loss)		65,875	80,640
Financial income		1	6
From negotiable securities and other financial instruments		1	6
From third parties		1	6
Finance expenses	10c	(4,765)	(4,564)
Borrowings with Group companies and associates		(234)	(84)
Borrowings with third parties		(4,531)	(4,480)
Finance profit		(4,764)	(4,558)
Profit/(loss) before tax		61,111	76,082
Income tax	13b	-	-
Profits/(losses) for the period from on-going transactions		61,111	76,082
Profit for the period		61,111	76,082

The accompanying Notes 1 to 20 and Appendix I form an integral part of the income statement for 2019.

LAR ESPAÑA REAL ESTATE SOCIMI, S.A. Statement of Changes in Net Equity for 2019

A) Statement of recognised income and expenses for 2019

(Expressed in thousands of Euros)

	2019	2018
Income statement result	61,111	76,082
Total income and expense recognised directly in net equity	-	-
Total transfers to the income statement	-	-
Total recognised income and expenses	61,111	76,082

The accompanying Notes 1 to 20 and Appendix I form an integral part of the statement of changes in equity for 2019.

LAR ESPAÑA REAL ESTATE SOCIMI, S.A. Statement of Changes in Net Equity for 2019

B) Statement of Total Changes in Net Equity at 31 December 2019

(Expressed in thousands of Euros)

(Translation of financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to the Company (see Note 2). In the event of a discrepancy, the Spanish-language version prevails)

	Issued capital	Issue premium	Reserves	Treasury stock	Other shareholder contributions	Profit for the period	Total
Balance at 31 December 2017	185,248	487,349	(16,682)	(175)	240	19,211	675,191
Recognised income and expenses	-	-	-	-	-	76,082	76,082
Transactions with equity holders or owners	4,279	16,645	-	-	-	-	20,924
Capital increases Distribution of profit	(3,089)	-	(9,865)	12,954	-	-	-
To reserves	-	-	1,938	-	-	(1,938)	-
To dividends	-	-	-	-	-	(17,273)	(17,273)
Return of the issue premium	-	(27,693)	-	-	-	-	(27,693)
Treasury shares	-	-	(33)	(14,007)	-	-	(14,040)
Other operations	-	-	1	-	-	-	1
Balance at 31 December 2018	186,438	476,301	(24,641)	(1,228)	240	76,082	713,192
Recognised income and expenses Transactions with equity holders or owners	-	-	-	-	-	61,111	61,111
Capital increases (Note 9a)	1,243	5,182	-	-	-	-	6,425
Capital decreases (Note 9a) Distribution of profit	(12,414)	-	(34,011)	46,425	-	-	-
To reserves	-	-	9,835	-	-	(9,835)	-
To Dividends (Note 9a)	-	-	-	-	-	(66,247)	(66,247)
Return of the issue premium	-	(6,353)	-	-	-	-	(6,353)
Treasury shares (Note 9d)	-	-	(16)	(45,959)	-	-	(45,975)
Other changes	-	-	(109)	-	-	-	(109)
Balance at 31 December 2019	175,267	475,130	(48,942)	(762)	240	61,111	662,044

The accompanying Notes 1 to 20 and Appendix I form an integral part of the statement of changes in net equity for 2019.

LAR ESPAÑA REAL ESTATE SOCIMI, S.A. Statement of Cash Flows for 2019 (Expressed in thousands of Euros)

	Note	2019	2018
Cash flows from operating activities
Profit/(loss) before tax		61,111	76,082
Adjustments to the profit/(loss)		(59,137)	(75,014)
Amortisation of fixed assets (+)	5	1	1
Impairment adjustments (+/-)	6a	3,547	2,796
Income from stakes in equity instruments (-)	16	(67,449)	(38,941)
Income from investments in Group companies and associates (-) Finance income (-)	16	- (1)	(27,921) (6)
Income from disposals of shareholdings (-)	6a	-	(15,507)
Financial expenses (+)	10	4,765	4,564
Changes in operating assets and liabilities		19,883	- (27,363)
Debtors and other receivables (+/-)		29,433	(22,161)
Creditors and other payables (+/-)		(9,716)	(4,927)
Other current assets (+/-)		164	(128)
Other current and non-current liabilities (+/-) Other cash flows from operating activities		2 29,263	(147) 48,357
Interest payments (-)		(4,220)	(4,060)
Receipt of dividends (+)	16	33,483	52,417
Cash flows from operating activities		51,120	22,062
Cash flows from investing activities
Payments for investments (-)		(95,270)	(155,379)
Group companies and associates	6a	(95,266)	(155,253)
Loans to Group companies and associates		-	-
Acquisition of equity instruments Other financial assets	6a	(4) -	- (126)

Proceeds from divestments (+)		72,555	246,741
Group companies and associates	6a	69,555	143,162
Disposal of equity instruments	6a	3,000	53,284
Loans to Group companies and associates	16	-	50,295
Cash flows from investing activities		(22,715)	91,362
Cash flows from financing activities
Payments made and received for equity instruments		(39,551)	6,885
Issue of equity instruments (+)	9	6,425	20,924
Disposal of equity instruments (+/-)	9	(45,976)	(14,039)
Receivables and payments for financial liability instruments a) Issue of:		(23,113)	50,403
Bank borrowings (+)	10	20,083	-
Debt with Group companies and associates (+)	16	-	50,403
b) Returns of:
Bank borrowings (-)	10	(20,083)	-
Debt with Group companies and associates (-)	16	(23,113)	-
Payments for dividends and remuneration from other equity instruments		(72,600)	(44,966)
Dividends (-)	9	(72,600)	(44,966)
Cash flows from financing activities		(135,264)	12,322
Net increase / decrease in cash or cash equivalents		(106,859)	125,746
Cash or cash equivalents at the beginning of the period		133,562	7,816
Cash or cash equivalents at the end of the period		26,703	133,562

The accompanying Notes 1 to 20 and Appendix I form an integral part of the statement of cash flows for 2019.

(1) NATURE AND ACTIVITIES OF THE COMPANY

Lar España Real Estate SOCIMI, S.A. (hereinafter the Company or Lar España) was incorporated with limited liability under Spanish law on 17 January 2014 for an indefinite duration as Lar España Real Estate, S.A. Its name was changed to the current name on 6 February 2014.

Its registered office is located at Calle Rosario Pino 14-16, 28020 Madrid.

According to its articles of association, the Company's statutory activity consists of the following:

1. The acquisition and development of urban properties for lease.
1. The holding of investments in the capital of other SOCIMIs (listed corporations for investment in the real estate market - Spanish "REITs") or in other entities not resident in Spain that have an identical statutory activity and are subject to a regime similar to that applicable to SOCIMIs, insofar as they have a legal or statutory obligation to distribute profits.
1. The holding of investments in the capital of other resident or non-resident entities in Spain, the main activity of which is the acquisition of urban properties for lease. These entities must be subject to the same regime established for SOCIMIs insofar as they have a legal or statutory obligation to distribute profits and must also comply with the investment requirements stipulated in Article 3 of Law 11/2009 of 26 October 2009, amended by Law 16/2012 of 27 December 2012 which governs SOCIMIs.
1. The holding of shares or investments in property collective investment undertakings governed by Law 35/2003 of 4 November on collective investment undertakings, amended by Royal Decree 83/2015 of 13 February 2015 on collective investment undertakings.
1. In addition to the economic activity derived from the principal statutory activity, SOCIMIs may carry out complementary activities. These are understood to be activities that do not amount to more than 20% of the total earnings of the Company in each tax period or those which can be considered complementary pursuant to current prevailing legislation.

The principal activity of Lar España Real Estate SOCIMI, S.A. comprises the holding of investments in the capital of other resident or non-resident entities in Spain whose main activity is the acquisition of urban properties for lease. The functional currency of the Company is the Euro.

Lar España Real Estate SOCIMI, S.A. has been listed on the Madrid, Barcelona, Bilbao and Valencia Stock Exchanges and the Spanish automated quotation system since 05 March 2014. Lar España Real Estate SOCIMI, S.A., as a company included under the SOCIMI tax regime, is regulated by Law 11/2009 of 26 October 2009, as amended by Law 16/2012 of 27 December 2012, which governs SOCIMIs, namely:

SOCIMIs must invest at least 80% of their assets in urban properties for lease, in land for the development of urban properties for lease, provided that development commences within

three years after the acquisition, or in the capital or equity of other entities referred to in Article 2.1 of Law 11/2009.

Asset value will be based on the average of the asset values reflected in the consolidated quarterly balance sheets for the period. To calculate this value, the Company chose to replace the carrying amount of the items comprising those balance sheets with their market value, which would apply to the four balance sheets for the period. For these purposes, cash or receivables derived from transfers of these properties or investments, if any, carried out in the current period or previous periods shall not be included provided, in the latter case, that the period for reinvestment stipulated in Article 6 of the aforementioned Law has not expired.

Furthermore, at least 80% of income for the tax period and corresponding to each period, excluding that derived from the transfer of those investments and properties held for the purpose of carrying out the principal statutory activity, once the holding period mentioned in the following section has elapsed, must originate from property leases and dividends or shares in profits arising from said investments.

This will be calculated as a percentage of consolidated profit if the company is the parent of a group in accordance with the criteria established in Article 42 of the Spanish Code of Commerce, irrespective of domicile and of the obligation to draw up consolidated financial statements. This Group shall comprise solely the SOCIMIs and other entities to which Article 2.1 of the above Law refers.

1. The properties that constitute the SOCIMI's assets must be leased for at least three years. The period of time during which the properties have been available for lease, up to a maximum of one year, shall be included for the purposes of this calculation. The period shall be calculated as follows:
2. a) For properties included in the SOCIMI's holdings prior to availing of the regime, from the starting date of the first tax period in which the special tax regime established in the Law is applied, provided that on that date the asset was leased or available for lease. Otherwise, the provisions of the following point shall apply.
3. b) For properties developed or acquired subsequently by the Company, from the date on which they were leased or available for lease for the first time.

1. SOCIMIs and Spanish resident investees that have chosen to avail themselves of the special SOCIMI tax regime, after having satisfied any relevant trade obligations, shall be obligated to distribute the profit received in the period as dividends to their shareholders, where the distribution must be adopted within six months after each year-end, as follows:
2. a) All profits deriving from dividends or shares of profits distributed by the entities referenced in Article 2.1 of Law 11/2009.
3. b) At least 50% of the profits derived from the transfer of the properties and shares or equity investments referred to in Article 2.1 of Law 11/2009, held for the purpose of complying with the principal statutory activity, realised once the periods mentioned in Article 3.2 of

Law 11/2009 have elapsed. The remainder of these profits must be reinvested in other properties or equity investments to be held for the purpose of complying with the statutory activity, within three years after the transfer date. Otherwise, these profits must be distributed in full together with any profits obtained during the period in which the reinvestment period expires. If the items in which the investment is made are transferred in the period during which they must be held, the associated profits must be distributed in full together with any profits obtained during the period in which the items were transferred. The mandatory distribution of profits does not apply to any portion of profits attributable to periods in which the Company will not be taxed under the special regime provided for by that law.

c) At least 80% of the remaining profits obtained.

The dividend must be paid within one month following the date of the distribution agreement.

Likewise, as detailed in Article 3 of the Law 11/2009 on SOCIMIs, the entity shall no longer be included in the special tax regime established in said Law, and shall begin paying taxes under the general Corporate Income Tax regime, in the same tax period in which any of the following circumstances arise:

The exclusion from trading on regulated markets or in a multi-lateral trading system.
The substantial breach of the information obligations referenced in Article 11 of said Law, unless the following report corrects such breach.
The failure to agree to the total or partial distribution or payment of the dividends under the terms and within the periods referenced in Article 6 of said Law. In this case, taxation under the general regime shall take place in the tax period referencing the reporting period in which the profits giving rise to said dividends were made.
The renouncement of the application of this special tax regime.
The failure to fulfil any other requirements stipulated in said Law in order for the entity to apply the special tax regime, except where the failure to fulfil said requirement is corrected within the following period. Nevertheless, the breach of the period referenced in Article 3.3 of this law on the 3-year leasing period for assets shall not lead to exclusion from the special tax regime.

As mentioned in Note 6, the Company owns shares in subsidies and associates. Consequently, the Company is the parent of a Group of companies in accordance with current legislation. Presenting the consolidated financial statements is necessary, in accordance with generally accepted accounting principles and regulations, to fairly present the Group's financial condition, results from operating activities, changes in net equity and cash flows. The information on investments in Group companies and associates is presented in Appendix I.

On 13 February 2020 the Directors of the Company have drawn up the 2019 consolidated financial statements for Lar España Real Estate SOCIMI, S.A. and the subsidiaries thereof, which reflect EUR 80,730 thousand in consolidated profits, EUR 982,780 thousand in consolidated net equity and EUR 1,753,252 thousand in consolidated total assets. The consolidated figures were taken from the consolidated financial statements drawn up by the Company based on the International Financial Reporting Standards, adopted by the European Union, and other provisions of the framework regulations on financial information to which the Group is subject in Spain.

(2) BASIS OF PRESENTATION

Regulatory framework on financial information

These financial statements were prepared by the Directors in accordance with the framework regulations on financial information to which the Company is subject, which is that established in:

1. The Spanish Code of Commerce and related mercantile legislation
1. The Spanish General Chart of Accounts, approved by Royal Decree 1514/2007, which was modified by Royal Decree 602/2016, and its industry adaptations
1. Any mandatory regulations approved by Spain's Accounting and Audit Institute to implement the Spanish General Chart of Accounts and its supplementary rules
1. Law 11/2009 of 26 October, as amended by Law 16/2012 of 27 December 2012, which governs SOCIMIs
1. All other applicable Spanish accounting principles.

Fair image

The Financial Statements have been obtained from the Company's accounting records and are presented in accordance with the regulatory framework for financial information in such a way that they give a true and fair view of the equity, the financial position and the results of the Company, and cash flows during the financial year under review. These financial statements, which were prepared by the Directors on 13 February 2020, will be submitted for approval at the General Shareholders' Meeting, and they are expected to be approved without any changes. The 2018 financial statements were approved by the General Shareholders' Meeting held on 25 April 2019.

These financial statements do not include any information or itemisations that do not need further details given their qualitative unimportance and were not considered material or to have relative importance according to the concept of materiality or relative importance as defined in the conceptual framework of the Spanish General Chart of Accounts (PGC 2007).

Non-mandatory accounting principles applied

No non-mandatory accounting principles have been applied. Furthermore, the Directors have prepared these financial statements by taking into account all the compulsory accounting principles and standards with a significant effect thereon. There is no mandatory accounting principle that has not been applied.

Critical issues regarding the measurement and estimation of uncertainties

In preparing the adjoined financial statements, estimates have been made that are based on historical data and on other factors which are considered reasonable in accordance with current circumstances, and that constitute the basis for establishing the book value of those assets, liabilities, income, expenses and commitments whose values are not easily determined using other sources. The Company reviews these estimates on an ongoing basis.

These estimates were made on the basis of the best available information at the end of the 2019 period; nevertheless, it is possible that future events may make it necessary to modify them (either up or down) in coming years. If necessary, any changes would be made prospectively.

The following are the main assumptions made regarding the future and other sources regarding the uncertainty of the year-end estimates that could significantly affect the financial statements in the upcoming year:

1. The market value of certain financial instruments (Note 6)
1. Assessment of provisions and contingencies (Note 4g)
1. Financial risk management (Note 14)
1. Compliance with the requirements that regulate SOCIMIs (Notes 1 and 14).

Comparative information

The same accounting criteria were applied in the 2018 and 2019 periods, such that there were no operations or transactions that were recorded using different accounting principles that could lead to discrepancies in the interpretation of the comparative figures for the two periods.

Grouping together of items

In order to facilitate the comprehension of the balance sheet, certain items of the balance sheet, the income statement and the statement of changes in equity and the statement of cash flows are presented as a group, though the disaggregated information is included in the corresponding Notes of the report, insofar as it is significant.

Changes in accounting criteria

During the period ended 31 December 2019 there were no changes in accounting criteria with respect to those applied when preparing the financial statements of 2018.

Correction of errors

In preparing the attached financial statements, no significant error has been detected that has required that the amounts included in the financial statement for 2018 be re-stated.

Functional and presentation currency

The figures disclosed in the financial statements are expressed in thousands of Euros rounded to the nearest thousand, the Euro being the functional and presentation currency of the Company.

(3) DISTRIBUTION OF PROFIT

The proposed distribution of profit for the period, which was prepared by the Company's Directors and will be submitted for approval at the General Shareholders' Meeting, is as follows:

	Euros
Basis of allocation
Profit for the period Issue premium	61,111,111 -
Distribution of profit
Legal reserve Dividends	6,111,111 55,000,000

The dividend per share to be distributed resulting from the proposal for allocating the profit is EUR 0.6276 per share.

(4) RECORD AND MEASUREMENT STANDARDS

Pursuant to Note 2, the Company has applied the accounting policies in accordance with the accounting principles and standards stipulated in the Commercial Code, which are implemented in the current Spanish General Chart of Accounts (PGC 2007), industry adaptations and subsequent amendments thereto, as well as in other mercantile legislation in force at the yearend of these financial statements. Accordingly, only those policies that are specific to the Company's activity and those considered significant due to the nature of the Company's activities are indicated below:

Financial instruments

(i) Classification of financial instruments

Financial instruments are classified on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the economic substance of the contractual arrangement and the definitions of a financial asset, a financial liability and an equity instrument.

The Company classifies financial instruments into the various categories according to the Company's intentions and characteristics at the time of initial recognition.

(ii) Offsetting principles

A financial asset and a financial liability are offset only when the Company currently has the enforceable right to offset the recognised amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

(iii) Loans and receivables

This item comprises non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They basically consist of receivables from Group companies. They are included in current assets, except for maturities greater than twelve months as of the date of the balance sheet which are classified as non-current assets. Loans and receivables generated in exchange for cash deliveries or commercial transactions are included under "Trade and other receivables" on the accompanying balance sheet.

These financial assets are initially measured at fair value, including directly attributable transaction costs, and subsequently carried at amortised cost, recognising accrued interest at the effective interest rate, which is the discount rate that matches the instrument's carrying amount with all estimated cash flows to maturity. Nevertheless, trade receivables falling due in less than one period are carried at their nominal amount on both initial recognition and subsequent measurement, provided that the effect of not discounting the cash flows is immaterial.

At least at the end of the period, the necessary impairment losses are recognised when there is objective evidence that not all the amounts receivable will be collected.

(iv) Investments in equity in Group, multi-group and associated companies:

Those companies related to the Company through a relationship of control are considered to be Group companies, and companies over which the Company holds significant influence are considered to be associates. Furthermore, the jointly-controlled category includes those companies over which control is held, by virtue of an agreement, together with one or more partners.

Investments in Group companies are generally recorded initially at the fair value of the consideration plus directly attributable transaction costs.

Any fees paid to legal advisors or other related professionals who may be involved in the acquisition of investments in equity in Group companies granting control over a subsidiary are recorded directly in the income statement for the period in which they are incurred.

After initial measurement, investments in Group and multi-group companies and associates are measured at cost, unless their recoverable value is less than their carrying amount, in which case they are measured at cost less any accumulated impairment. Said adjustments are equal to the difference between the recoverable value and the book value of the shareholdings at the date of measurement. Give that the Company is a holding company, it presents value adjustments made to investments in Group companies under "Operating profit/(loss)".

In this sense, given the real estate nature of the investees, their recoverable value is closely tied to the measurement of their property assets. In order to calculate the recoverable amount of such investments the Company calculates their fair value, the best estimate of which is the net equity of the investee adjusted for any unrealised gains present at the measurement date, as they are supported by independent expert appraisals.

Accordingly, in order to calculate the fair value of the property investment owned by Group companies and associates, the Company's Management entrusts independent appraisers that have no relation to the Group at year-end with the appraisal of all their property assets on 31 December. The measurement of this investment is conducted in accordance with the statements of the RICS Valuation - Professional Standards published by The Royal Institution of Chartered Surveyors ("Red Book"), based in the United Kingdom.

Specifically, buildings are appraised individually, taking into consideration each of the

lease contracts in force at the appraisal date. The methodology used to calculate the market value of properties being rented consists of preparing 10 years' worth of income and expense projections for each type of asset, which will subsequently be updated on the date of the statement of financial condition for each review period using a market discount rate. The residual amount at the end of year 11 is calculated applying a rate of return ("exit yield") to the net income projections for year 11.

The market values thus obtained are analysed by calculating and analysing the yield capitalisation implicit in these values. Both the rate of return and the discount rate are defined in accordance with local property companies and considering the conditions prevailing in the institutional market, and the reasonableness of the market value thus obtained, which is tested in terms of initial gain.

In terms of buildings with areas that have not been rented out, they are measured on the basis of estimated future rent, minus a marketing period.

(v) Impairment of financial assets

A financial asset or a group of financial assets is impaired and impairment losses are incurred if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset and the event or events have an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

Impairment of financial assets carried at amortised cost.

The amount of the impairment loss of financial assets carried at amortised cost is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset's original effective interest rate. For floating-rate financial assets, the effective interest rate corresponding to the measurement date under the contractual conditions is used. When calculating assets under guarantee, any sales costs pertaining to the allocation thereof shall be discounted at the effective interest rate.

The Company recognises the impairment loss and uncollectibility of loans and receivables and debt instruments by recognising an allowance account for financial assets, which is charged against profit and loss and is reversible in subsequent periods up to the amortised cost the assets would have had if the impairment loss had not been recognised.

(vi) Financial liabilities

Financial liabilities, including trade and other payables, are initially recognised at fair value, adjusted for directly attributable transaction costs, and subsequently carried at amortised cost using the effective interest method. Said effective interest rate is the discount rate that matches the instrument's carrying amount with the expected future flow of payments to the maturity date of the liability.

Nevertheless, trade payables falling due in less than one year that have no contractual interest rate are carried at their nominal amount on both initial recognition and subsequent measurement, since the effect of discounting the cash flows is immaterial.

(vii) Derecognition of financial assets

Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire or have been transferred and the Company has transferred substantially all the risks and rewards of ownership.

The derecognition of a financial asset in its entirety implies the recognition of results as the difference between the carrying amount and the total consideration received, less transaction expenses, including assets obtained or liabilities assumed and any deferred profit or loss in income and expenses recognised in equity.

(viii) Derecognition of financial liabilities

The Company derecognises all or part of a financial liability when it either discharges the liability by paying the creditor, or is legally released from primary responsibility for the liability either by process of law or by the creditor.

The exchange of debt instruments between the Company and the counterparty or substantial modifications of initially recognised liabilities are accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability, providing the instruments have substantially different terms.

The Company considers the terms are substantially different if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective interest rate, is at least 10% different from the discounted present value of the remaining cash flows of the original financial liability.

If the exchange is accounted for as an extinguishment of the financial liability, any costs or fees incurred are recognised in the income statement as part of the result of the extinguishment. If the exchange is not accounted for as an extinguishment, any costs or fees incurred adjust the carrying amount of the liability and are amortised over the remaining term of the modified liability. In the latter case, a new effective interest rate is calculated on the modification date which is that which makes the current value of the flows to be paid according to the new conditions equal to the carrying amount of the financial liability on said date.

The difference between the carrying amount of a financial liability, or part of a financial liability, extinguished or transferred to a third party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised by the Company in the income statement.

If the Company delivers non-monetary assets as payment of debt, it recognises the difference between the fair value thereof and their carrying amount as operating profit and the difference between the value of the debt that is extinguished and the fair value of the assets as a financial result. If the company delivers inventories, the relevant sales transaction for same is recognised at the fair value and the change in inventories at the carrying amount.

Own equity instruments held by the Company

The Company's acquisition of equity instruments is presented separately at the cost of acquisition in the balance sheet as a reduction in its own capital. For transactions carried out with own equity instruments no result is recognised in the income statement, rather it is directly recorded as reserve.

The subsequent redemption of the equity instruments entails a capital decrease equivalent to the par value of the shares. Any positive or negative difference between the purchase price and the par value of the shares is debited or credited to reserves.

Transaction costs related to own equity instruments, including issue costs associated with a business combination, are accounted for as a reduction in reserves, net of any tax effect.

Dividends associated with equity instruments are recognised as a reduction in equity when approved by the shareholders.

Distributions to shareholders

Dividends are effective and recognised as decreased net equity when approved by the General Shareholders' Meeting.

Cash and cash equivalents

Cash and cash equivalents include cash on hand and demand deposits in financial institutions. They also include other short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. An investment qualifies as a cash equivalent when it has a maturity of less than three months from the date of acquisition.

Short-term employee benefits

The Company recognises the expected cost of profit-sharing and bonus plans when it has a present legal or implicit obligation to make such payments as a result of past events and a reliable estimate of the obligation can be made.

Payments based on shares

The Company recognises, on one hand, goods and services received as an asset or an expense, according to the nature thereof, when same is received, and on the other, the corresponding liability if the transaction is settled with an amount that is based on the value of the equity instruments.

Provisions and contingencies

In preparing the financial statements, the Company's Directors differentiate between:

a. Provisions: balances payable covering present obligations arising from past events, the cancellation of which is likely to cause an outflow of resources, but are uncertain as to amount and/or time of cancellation.
b. Contingent liabilities: possible obligations that arise from past events and whose future existence depends on the occurrence or non-occurrence of one or more future events not under the control of the Company.

The financial statements include all the relevant provisions that are more likely than not to entail an obligation. Unless they are considered remote, contingent liabilities are not recognised in the financial statements, but information on same is provided in the notes to the report.

The compensation to be received from a third party on settlement of the obligation, provided that there is no doubt that said reimbursement will be received, is recognised as an asset, except when there is a legal relationship whereby a portion of the risk has been externalised as a result of which the Company is not liable; in this situation, the compensation will be taken into account for the purpose of estimating the amount in which the corresponding provision, where appropriate, will be stated.

Recognition of income

Pursuant to the publication in September 2009 on the consultation included in Gazette No. 79 of the Institute of Accounting and Account Auditing (ICAC), due to the Company's being a holding company, it presents income from dividends received from subsidiaries, financial income from financing granted thereto and income from disposing of equity instruments as net turnover.

Income from investments in equity instruments

Discretionary dividends accrued after the acquisition of shares are recognised as income in the income statement when the subsidiary's shareholders approve the shareholder's right to receive them.

If distributed dividends are clearly derived from profits generated prior to the acquisition date because amounts have been distributed which are higher than the profits generated by the investee between the acquisition date and the moment the decision to distribute the dividends is taken, the difference is accounted for as a reduction in the carrying amount of the investment and is not recognised as income.

Any distribution of available reserves, which comprises the share premium and other shareholder contributions, is treated as a "distribution of profits" operation, and consequently, income will be recognised at the moment of approval, providing the investee has generated profits since the acquisition date in excess of the reserves being distributed.

Income from receivables with Group companies and associates

Income from receivables with Group companies and associates is recognised using the effective interest method and dividends are recognised when the shareholder's right to receive same has been declared, as explained in the previous section. In any case, interest and dividends from financial assets accrued after the acquisition are recognised as income in the income statement.

Income from the sale of shareholdings

Income from the sale of equity instruments is recognised when the risks and benefits inherent to the ownership of the sold asset are transferred to the purchaser and the day-to-day management and effective control over said asset are not retained.

Rebilling of costs to Group companies

(i) Interests related to liabilities

The Company classifies financial costs rebilled to Group companies as income when their shareholdings are the collateral for the bond or instead they own assets with a mortgage guarantee on said bond. The Company's distribution approach is based on the relative weight of the underlying market value of each pledged property asset of the investees over the total market value (calculated based on the latest available appraisal from the period immediately prior to 31 December of each period) of such property assets at the beginning of the relevant period.

(ii) Rebilling of costs from service organisations and independent professionals

The Company does not classify costs passed on to its subsidiaries for services received from service organisations and independent professionals as income from the provision of services. The invoicing for these items is included under "External services" on the accompanying income statement, net of expenses paid by the Company for said items. Said rebilled costs total EUR 15,861 thousand in 2019 (EUR 37,049 thousand in 2018).

Taxes on profits

(i) General regime

The income tax expense or tax income includes the part related to the current income tax expense or tax income and the part corresponding to the deferred tax expense or income.

The current tax is the amount that the Company satisfies as a consequence of the fiscal settlements of the income tax related to a period. Deductions and other tax relief applicable to payable taxes, excluding withholdings and payments on account, and tax loss carry-forwards applied in the current reporting period are accounted for as a reduction in current tax.

to the tax rate at which they are expected to be recovered or settled.

(ii) Tax regime for SOCIMIs

This tax regime, following the amendment introduced by Law 16/2012 of 27 December 2012, is based on paying a corporate income tax rate of 0%, provided certain requirements are met.

Pursuant to the ninth article of Law 11/2009 of 26 October 2009, amended by Law 16/2012 of 27 December 2012, governing SOCIMIs, the entity shall be subject to a special tax rate of 19% on the total amount of dividends or shares in profits distributed among shareholders with an interest in the entity exceeding 5%, when such dividends are tax-exempt or are taxed at a rate of less than 10% at the shareholders' seat of economic activity. The Company has established a procedure whereby shareholders confirm their tax status and, where applicable, 19% of the amount of the dividend distributed among the shareholders that do not meet the tax requirements mentioned in Note 1 is withheld.

Classification of assets and liabilities as current and non-current

"Current" assets are defined as those assets related to the normal operating cycle generally expected in a year, and also those assets expected to mature or to be disposed or to be settled in the short term at year-end, financial assets held for trading, with the exception of financial derivatives with a settlement period greater than one year and cash and cash equivalents. Assets not meeting these requirements are classified as non-current.

Similarly, "current" liabilities are defined as liabilities related to the normal operating cycle, financial liabilities held for trading, with the exception of financial derivatives with a settlement period greater than one year, and in general all obligations that will mature or terminate in the short term. Otherwise, they are classified as non-current.

Environmental assets and liabilities

Assets considered to be environmental assets are those used on a lasting basis in the Company's operations, the main purpose of which is to minimise the environmental impact and protect and improve the environment, including reducing or eliminating future pollution.

The Company's activity does not have a significant environmental impact due to the nature thereof.

Transactions between Group companies

Transactions between Group companies are carried out at market value and are recognised at the fair value of the consideration paid or collected, except those transactions pertaining to mergers, divisions and non-monetary contributions of business. The difference between said value and the agreed amount is recorded according to the underlying economic substance.

Statement of cash flows

The statement of cash flows has been prepared using the indirect method and the following expressions and definitions:

Cash flows: inflows and outflows of cash and cash equivalents, the latter being short-term, highly liquid investments not subject to significant risk of changes in value.
Operating activities: the Company's usual activity and other activities that cannot be classified as investing or financing activities.
Investing activities: the acquisition, sale or other disposal of long-term assets and other investments not included in cash and cash equivalents.
Financing activities: activities that result in changes in the size and composition of equity and of liabilities that do not form part of operating activities.

Non-current assets held for sale

The Company classifies a non-current asset or a disposal group as being held for sale when a decision has been made to sell same and such sale is expected to happen within the next twelve months.

These assets or disposal groups are measured at their carrying amount or fair value after deducting the necessary sales costs, whichever is less.

Income and expenses generated by non-current assets and disposal groups comprising elements held for sale that do not meet the requirements to be classified as discontinued operations are recognised in the income statement item according to the nature thereof.

(5) INVESTMENT PROPERTY

The composition and movements that had occurred in the accounts included under Investment Property were as follows:

Land	Buildings	Total
40	60	100
		-
40	60	100
-	(2)	(2)
-	(1)	(1)
-	(3)	(3)
40	57	97
	-	Thousands of Euros 2019 -

	Thousands of Euros
	2018
	Land	Buildings	Total
Cost at 1 January 2018	40	60	100
Additions	-	-	-
Cost at 31 December 2018	40	60	100
Accumulated amortisation at 1 January 2018	-	(1)	(1)
Allocations	-	(1)	(1)
Accumulated amortisation at 31 December 2018	-	(2)	(2)
Carrying amount at 31 December 2018	40	58	98

The investment properties owned by the Company comprise an office building and a permanent security post, which provides management services to the entire Abadía business park located in Toledo. Said business park is owned by LE Retail Abadía, S.L.U., which is in turn completely owned by Lar España Real Estate SOCIMI, S.A.

(6) INVESTMENTS IN GROUP COMPANIES AND ASSOCIATES

(a) Investments in equity instruments

The breakdown of investments in Group companies and associates at 31 December 2019 and 2018 is as follows (also see the information in Annex I):

Stocks in Group Companies (all at 100%)

	Thousands of Euros 2019

Company	Opening balance	Acquisitions	Transfers (Note 8)	Voluntary contributions	Derecogniti ons due to available reserves	Derecog	Closing balance

LE Logistic Alovera I y II, S.A.U.	60	-	-	3,409	-	-	3,469
LE Retail Hiper Albacenter, S.L.U.	12,480	-	-	1,573	-	-	14,053
LE Retail Alisal, S.A.U.	2,210	-	-	117	-	-	2,327
LE Offices Eloy Gonzalo 27, S.A.U.	-	-	19,834	5,918	(19,724)	-	6,028
LE Retail As Termas, S.L.U.	28,532	-	-	4,027	-	-	32,559
LE Offices Joan Miró, S.L.U.	13,798	-	-	980	(13,975)	-	803
LE Logistic Alovera III y IV, S.L.U.	101	-	-	550	-	-	651
LE Logistic Almussafes, S.L.U.	2,529	-	-	445	-	-	2,974
LE Retail Hiper Ondara, S.L.U.	113,729	-	-	15,669	-	-	129,398
LE Retail Vidanova Parc, S.L.U.	24,068	-	-	6,126	-	-	30,194
LE Retail Galaria, S.L.U.	4	-	-	505	-	-	509
LE Retail El Rosal, S.L.U.	32,067	-	-	3,476	(2,000)	-	33,543
Lar España Shopping Centres VIII, S.L.U.	96,854	-	-	24,507	(1)	-	121,360
LE Retail Vistahermosa, S.L.U.	20,345	-	-	1,562	-	-	21,907
LE Retail Sagunto II, S.L.U.	1,536	-	-	-	-	-	1,536
Lar España Inversión Logística IV, S.L.U.	111	-	-	590	-	-	701
LE Retail Villaverde, S.L.U.	1,653	-	-	119	(12)	-	1,760
LE Offices Marcelo Spínola, S.L.U.	31,564	-	-	4,531	(30,579)	-	5,516
LE Retail Albacenter, S.L.U.	30,734	-	-	3,042	-	-	33,776
LE Retail Anec Blau, S.L.U.	78,785	-	-	4,785	-	-	83,570
LE Retail Gran Vía de Vigo, S.L.U.	53,932	-	-	5,238	-	-	59,170
LE Retail Las Huertas, S.L.U.	12,196	-	-	627	-	-	12,823
LE Retail Txingudi, S.L.U.	30,761	-	-	1,866	-	-	32,627
LE Retail Abadía, S.L.U.	34,780	-	-	2,069	-	-	36,849
LE Retail Hipermercados I, S.L.U.	14,735	-	-	880	-	-	15,615
LE Retail Hipermercados II, S.L.U.	15,955	-	-	872	-	-	16,827
LE Retail Hipermercados III, S.L.U.	14,643	-	-	881	-	-	15,524
LE Retail Rivas, S.L.U.	33,361	-	-	1,952	-	-	35,313
LE Retail Cordoba Sur,S.L.U.	-	4	-	950	-	-	954
	701,523	4	19,834	97,266	(66,291)	-	752,336

Thousands of Euros

Stocks in Associates

	Thousands of Euros
		2019
Company	Opening balance	Additions	Impairment recorded	Impairment reversal	Returns	Closing balance
Inmobiliaria Juan Bravo 3, S.L.	8,647	-	(3,547)	-	-	5,100
	8,647	-	(3,547)	-	-	5,100

Stocks in Group Companies (all at 100%)

	2018
Company	Opening balance	Acquisitions	Voluntary contributions	Returns	Transfers	Derecog.	Closing balance

LE Logistic Alovera I y II, S.A.U.	42,594	-	2,242	(44,776)	-	-	60
LE Retail Hiper Albacenter, S.L.U.	11,909	-	1,071	(500)	-	-	12,480
LE Retail Alisal, S.A.U.	-	-	2,508	(9,379)	9,081	-	2,210
LE Offices Eloy Gonzalo 27, S.A.U.	15,260	-	4,574	-	(19,834)	-	-
LE Retail As Termas, S.L.U.	30,125	-	1,607	(3,200)	-	-	28,532
LE Offices Joan Miró, S.L.U.	10,392	-	3,906	(500)	-	-	13,798
LE Logistic Alovera III y IV, S.L.U.	9,838	-	263	(10,000)	-	-	101
LE Logistic Almussafes, S.L.U.	8,092	-	2,437	(8,000)	-	-	2,529
LE Retail Hiper Ondara, S.L.U.	6,778	-	465	(7,239)	113,725	-	113,729
LE Retail Vidanova Parc, S.L.U.	21,426	-	4,956	(2,314)	-	-	24,068
LE Retail Megapark, S.L.U.	77,182	-	3,671	(8,200)	(72,653)	-	-
LE Retail Galaria, S.L.U.	-	-	198	(5,007)	4,813	-	4
LE Retail El Rosal, S.L.U.	33,059	-	2,008	(3,000)	-	-	32,067
Lar España Shopping Centres VIII, S.L.U.	46,292	-	51,022	(460)	-	-	96,854
LE Retail Vistahermosa, S.L.U.	21,949	-	896	(2,500)	-	-	20,345
LE Retail Sagunto II, S.L.U.	3	-	1,533	-	-	-	1,536
Lar España Inversión Logística IV, S.L.U.	2,423	-	3,988	(6,300)	-	-	111
LE Retail Villaverde, S.L.U.	-	-	1,861	(5,397)	5,189	-	1,653
LE Offices Marcelo Spínola, S.L.U.	30,314	-	1,250	-	-	-	31,564
LE Retail Albacenter, S.L.U.	29,376	-	2,558	(1,200)	-	-	30,734
LE Retail Anec Blau, S.L.U.	78,579	-	3,505	(3,300)	-	-	78,784
LE Retail Gran Vía de Vigo, S.L.U.	57,040	-	2,992	(6,100)	-	-	53,932
LE Retail Las Huertas, S.L.U.	12,439	-	457	(700)	-	-	12,196
LE Retail Portal de la Marina, S.L.U.	39,318	-	3,754	(2,000)	(41,072)	-	-
LE Retail Txingudi, S.L.U.	30,280	-	1,380	(900)	-	-	30,760
LE Retail Abadía, S.L.U.	29,059	-	13,920	(8,200)	-	-	34,779
LE Retail Hipermercados I, S.L.U.	15,146	-	240	(650)	-	-	14,736
LE Retail Hipermercados II, S.L.U.	16,416	-	240	(700)	-	-	15,956
LE Retail Hipermercados III, S.L.U.	15,044	-	240	(640)	-	-	14,644
LE Retail Rivas, S.L.U.	-	35,361	-	(2,000)	-	-	33,361
	690,333	35,361	119,742	(143,162)	(751)	-	701,523

Stocks in Associates

		Thousands of Euros 2018

Company	Opening balance	Additions	Impairment recorded	Impairment reversal	Returns	Closing balance

Inmobiliaria Juan Bravo 3, S.L.	11,443	-	(2,796)	-	-	8,647
	11,443	-	(2,796)	-	-	8,647

Movement in investments in equity instruments 2019

On 11 January 2019, the sole shareholder of LE Offices Joan Miró, S.L.U approved a reimbursement of shareholder contributions totalling Euros 13,975 thousand, which has been recognised by reducing the carrying amount of investments in Group companies in the accompanying balance sheet, as detailed in the table above. During 2019, the sole shareholder of this subsidiary approved the distribution of supplementary dividends with a charge to 2018 profit and interim dividends with a charge to 2019 profit, amounting to Euros 5,497 thousand, which have been recognised under income from dividends in the accompanying income statement (see notes 15a and 16b.
On 15 January 2019, the Company acquired 100% of the shares of the company LE Retail Cordoba Sur, S.L.U. (formerly called Global Pergamo, S.L.U.) from Latorre & Asociados Consultoría, S.L. for a total of EUR 4 thousand, having also voluntarily contributed a total of EUR 950 thousand to the company. These amounts will be recovered through the collection of the cash flows of the project in which said company is the SPV.
In March, LE Offices Marcelo Spínola, S.L.U. approved the reimbursement of shareholder contributions and share premium for a total of Euros 32,461 thousand, of which Euros 1,883 thousand has been recognised as a distribution of profit under income from dividends in the accompanying income statement (see notes 15a and 16b), while the remainder has been recognised as a reduction in the value of investments in Group companies.
On 24 April 2019 the Company reclassified 100% of the shares held in LE Offices Eloy Gonzalo 27, S.A.U. as shareholdings in Group companies. At 31 December 2018 such shares were classified as non-current assets held for sale, given the sale of the property asset owned by this company instead of the shareholdings in said company. Additionally, during the year, the sole shareholder approved a deduction from available reserves of Euros 23,106 thousand, of which Euros 3,382 thousand has been recognised as a distribution of profits under income from dividends in the accompanying income statement (see notes 15a and 16b) while the remainder has been recognised as a reduction in the value of investments in Group companies. On 31 December 2019, the sole shareholder of this subsidiary approved the distribution of an interim dividend with a charge to 2019 profit of Euros 15,079 thousand, which has been recorded as a distribution of profit under income from dividends in the accompanying income statement (see notes 15a and 16b).
On 18 December 2019, LE Retail El Rosal, S.L.U. approved the reimbursement of shareholder contributions amounting to Euros 2,000 thousand, with an equivalent reduction in the value of investments in Group companies.
On 31 December 2019, the Company impaired its shareholding in the associate Inmobiliaria Juan Bravo 3, S.L. by EUR 3,547 thousand based on the Directors' best estimate of the recoverable value thereof, after having delivered, as of the date of drawing up these financial statements, all of the dwellings of the development owned by the investee.

Movement in investments in equity instruments 2018

In 2018, the Company made contributions and received contribution returns in the amount of EUR 119,742 thousand and 143,162 thousand respectively.
On 31 December 2018, the Company classified 100% of the shareholdings in LE Offices Eloy Gonzalo 27, S.A.U. as non-current assets held for sale, based on the decision to sale same and the expectation that such sale will happen in the short-term (Note 8).
On 31 December 2018, the Company impaired its shareholding in the associate Inmobiliaria Juan Bravo 3, S.L. by EUR 2,796 thousand based on the Directors' best estimate of the recoverable value thereof at said date.
On 19 September 2018 a merger took place when LE Retail Hiper Ondara, S.L.U. absorbed the subsidiaries LE Retail Megapark, S.L.U. and LE Retail Portal de la Marina, S.L.U. As a result of the merger, the Absorbed Companies were wound up but not liquidated and all their assets and liabilities were transferred en bloc and by means of universal succession to the Absorbing Company, pursuant to the terms of Articles 22 and 23 of Law 3/2009, of 4 April, on Structural Changes in Companies. Therefore, the amount corresponding to the shareholdings of the absorbed companies was transferred to the absorbing company.
On 6 February 2018, the Company acquired 100% of shareholdings in the company Legaro Spain, S.L. (currently called LE Retail Rivas, S.L.U.) from the company CSRE I Spanish Holding, S.L.U. for a total of EUR 35,361 thousand, EUR 3,519 thousand of which was used to cancel the Group loan held by the company as at the acquisition date. In addition, contribution returns were carried out in the amount of EUR 2,000 thousand.
On 16 January 2018, after having executed the purchase option signed on 27 September 2017, Lar España Real Estate SOCIMI, S.A. transferred all of the shares in its subsidiary LE Offices Egeo, S.A.U. to Inmobiliaria Colonial SOCIMI, S.A. for a total base price of EUR 49,098 thousand and a floating price of EUR 2,124 thousand tied to the measurement of the asset at 31 December 2018, which was accrued as a whole. Said subsidiary was 100% owned by Lar España Real Estate SOCIMI, S.A. and in turn owns the Egeo office building located in Madrid. The result of the operation, after a EUR 14 thousand price adjustment, was a profit of EUR 14,631 thousand recorded under "Income from disposing of equity instruments" on the adjoined income statement (Note 15 a). The value of the shareholding at the time of sale totalled EUR 36,577 thousand and was classified under "Non-current assets held for sale".

The sale of the aforesaid shareholding was carried out after having held the property asset for lease for three years as required by the SOCIMIs Law (Note 1).

On 27 September 2017, the Company sold 100% of the shareholdings in its subsidiary LE Offices Arturo Soria, S.L.U. from the company Inmobiliaria Colonial, SOCIMI, S.A. for a base price of EUR 19,640 thousand and a floating price of EUR 876 thousand tied to the measurement of the asset at 31 December 2018, which was accrued as a whole in 2018.

(7) FINANCIAL ASSETS BY CATEGORY

(a) Classification of financial assets by category

The classification of financial assets held by the Company at 31 December 2019 and 2018 by category is as follows:

	Thousands of Euros
	2019		2018
	Non-current	Current	Non current	Current
Other financial assets	-	99	-	3,127
Investments in Group companies and associates (Note 16b)	-	28,700	-	-
Trade and other receivables
Customers from sales and services rendered	-	58	-	76
Customers, Group companies and associates (Note 16b)	-	19,593	-	48,732
Sundry debtors	-	840	-	840
Current tax assets (Note 13)	-	847	-	1,241
Total financial assets	-	50,137	-	54,016

The carrying amount of financial assets recognised at cost or amortised cost does not differ significantly from their fair value.

At 31 December 2018, "Other financial assets" mainly included the amounts of EUR 876 thousand and EUR 2,124 thousand. These amounts were outstanding and corresponded, respectively, to the floating price of the sales operations regarding the shareholdings in the companies LE Offices Arturo Soria, S.L.U. and LE Offices Egeo, S.A.U. (Note 6a). At 31 December 2019, said amount had been collected.

The line item "Investments in Group companies and associates" mainly includes the interim dividend of Group companies and associates distributed using the profit for 2019 (Note 16b).

(8) NON-CURRENT ASSETS HELD FOR SALE

As per the business plan of the Group, the Parent Company of which is the Company, the Group was at 31 December 2018 in the process of disposing of non-core assets, including the company LE Offices Eloy Gonzalo 27, S.A.U., which owns an office building. Therefore, given that the requirements established in the Spanish General Chart of Accounts for classifying such assets as "non-current assets held for sale" were met as at 31 December 2018, 100% of the shares held in said company were reclassified.

On 24 April 2019, the office building owned by said company — and not the Company's shares therein — was sold, such that the shares were reclassified under "Investments in Group companies and associates" on the adjoined balance sheet (Note 6a).

(9) NET EQUITY

The composition and movements in equity are presented in the statement of changes in net equity.

Capital

On 10 June 2019, by virtue of the resolution adopted by the Board of Directors on 7 June 2019, the Parent increased share capital by a nominal amount of EUR 1,243 thousand through the issue of shares (621,337 ordinary shares with a par value of EUR 2 par value) with a share premium of EUR 5,182 thousand. This capital increase has been subscribed by Grupo Lar Inversiones Inmobiliarias, S.A. in compliance with the provisions of the Investment Manager Agreement, which establishes that the manager must invest the post-tax performance fee in the subscription of the capital increase carried out by the Parent in accordance with the terms of the aforementioned agreement. This capital increase was carried out with the exclusion of preemptive subscription rights and delegation to the Board of Directors for the execution of the resolution. The new shares issued within the framework of said increase shall be subject to a three-year lock-up period imposed by the Lar Group, pursuant to the terms of the Investment Manager Agreement subscribed with Lar España.

Similarly, on 10 June 2019, by virtue of the resolution adopted by the Board of Directors on 7 June 2019, the Parent reduced capital by EUR 6,506 thousand, corresponding to 3,252,820 shares of EUR 2 par value each, representing 3.5% of share capital. The capital decrease was charged against unrestricted reserves by appropriating to a restricted capital redemption reserve EUR 6,506 thousand, an amount equal to the par value of the redeemed shares. The shares were amortised through the use of treasury shares, the value of which at the time of the capital decrease totalled EUR 24,743 thousand.

On 20 December 2019, by virtue of the resolution adopted by the Board of Directors on 19 December 2019, the Parent Company reduced capital by EUR 5,908 thousand, corresponding to 2,953,831 shares of EUR 2 par value each, representing 3.2% of share capital. The capital decrease was charged against unrestricted reserves by appropriating to a restricted capital redemption reserve EUR 5,908 thousand, an amount equal to the par value of the redeemed shares. The shares were redeemed through the use of treasury shares, the value of which at the time of the capital decrease totalled EUR 21,682 thousand. On 30 December 2019 the deed reflecting the capital decrease carried out on 20 December 2019 was entered ate the Commercial Registry.

On 7 May 2018, the Board of Directors approved an increase in share capital of EUR 20,924 thousand in par value by issuing shares in the amount of EUR 4,279 thousand (2,139,437 ordinary shares with a par value of EUR 2) and an issue premium in the amount of EUR 16,645 thousand. This capital increase was subscribed by Grupo Lar Inversiones Inmobiliarias, S.A. in compliance with the provisions of the Investment Manager Agreement, which establishes that the manager must invest the post-tax performance fee in the subscription of the capital increase carried out by the Parent in accordance with the terms of the aforementioned agreement. This capital increase was performed without a pre-emptive subscription right and by delegating powers to execute the agreement to the Board of Directors.

On 28 December 2018, by virtue of the resolution adopted by the Board of Directors held on 20 December 2018, the Company reduced capital by EUR 3,089 thousand, corresponding to 1,544,490 shares of with a par value of EUR 2 each, representing 1.63% of the share capital. The capital decrease was charged against unrestricted reserves by appropriating to a capital redemption reserve an amount equal to the par value of the redeemed shares. This reserve will be restricted. The shares were amortised through the use of treasury shares, the value of which at the time of the capital decrease totalled EUR 12,954 thousand.

All of the shares of the company, Lar España Real Estate SOCIMI, S.A., are quoted on the official Madrid, Barcelona, Bilbao and Valencia Stock Exchanges.

The list value at 31 December 2019 is EUR 7.10 per share and the average list price for 2019 is EUR 7.46 per share (in 2018, EUR 7.45 and EUR 8.91 respectively).

	%
LVS II Lux XII S.a.r.l.	20.7%
Grupo Lar Inversiones Inmobiliarias, S.A.	11.5%
Franklin Templeton Institutional, LLC	7.9%
Santa Lucía S.A. Cía. de Seguros	5.2%
Brandes Investment Partners, L.P.	5.0%
Blackrock Inc.	3.7%
Other shareholders with an interest of less than 3%	46.0%
Total	100.00%

The breakdown of the Company's main shareholders at 31 December 2019 is as follows:

Issue premium

The Revised Spanish Companies Act expressly provides for the use of share premium to increase share capital and does not stipulate any specific restrictions as to its use.

This reserve is unrestricted provided that the Company's equity is not reduced to less than its share capital as a result of any distribution.

On 25 April 2019 the resolution was adopted to pay a return against the issue premium in the amount of EUR 6,647 thousand, taking into account all issued shares.

At 31 December 2019, the Group's share premium amounted to EUR 475,130 thousand (EUR 476,301 thousand at 31 December 2018).

Reserves

The breakdown of this category as at 31 December 2019 and 2018 is the following:

	Thousands of Euros
	31.12.2019	31.12.2018
Legal reserve	10,879	2,968
Amortised capital reserve	15,502	3,089
Other reserves	(75,323)	(30,698)
Total	(48,942)	(24,641)

Reserve movements in 2019 and 2018 were as follows:

	Thousands of	Thousands of
	Euros	Euros
	2019	2018
	Reserves	Reserves
Opening balance	(24,641)	(16,682)
Profit/(loss) for the financial year	9,835	1,938
Capital decreases	(34,011)	(9,865)
Result from treasury shares	(16)	(33)
Other changes	(109)	1
Closing balance	(48,942)	(24,641)

(i) Legal reserve

The legal reserve is not distributable to shareholders and if it is used to offset losses, in the event that no other reserves are available, the reserve must be replenished with future profits.

At 31 December 2019 the Company's legal reserve totals EUR 10,879 thousand (EUR 2,968 at 31 December 2018). Therefore, the legal reserve at 31 December 2019 is not fully provided for.

(ii) Amortised capital reserve

(iii) Other reserves

These reserves mainly comprise expenses related to the incorporation and capital increases through share issues, capital decreases against unrestricted reserves and other nondistributed profits.

Treasury shares

At 31 December 2019, the Company has treasury shares with an acquisition cost of EUR 762 (EUR 1,228 thousand at 31 December 2018).

Movement during the 2019 and 2018 periods was as follows:

	Number of shares	Thousands of Euros
31 December 2018	164,925	1,228
Additions	6,240,541	46,715
Derecognitions	(94,995)	(756)
Capital decreases (Note 9a)	(6,206,651)	(46,425)
31 December 2019	103,820	762
	Number of shares	Thousands of Euros
31 December 2017	19,880	175
Additions	3,456,153	30,300
Derecognitions	(1,766,618)	(16,293)
Capital decreases (Note 9a)	(1,544,490)	(12,954)
31 December 2018	164,925	1,228

After ending the treasury share repurchase programs, which temporarily suspended the liquidity agreement with a financial intermediary pursuant to terms of Circular 3/2007, of 19 December by the Spanish Securities Market Commission on liquidity agreements for the purposes of accepting same as a market practice and other relevant regulations, the agreement was renewed with the financial intermediate JB Capital Markets. By virtue of said liquidity agreements, a restricted amount of EUR 500 thousand is kept in the treasury and a maximum of 63,000 shares are kept for the sale of treasury shares.

On 14 January 2020 a new share repurchase program has been signed between Lar España and its liquidity provider leaving the aforementioned liquidity program temporarily suspended (Note 19).

Dividends paid

On 25 April 2019, the Company's General Shareholders' Meeting approved the distribution of a dividend of EUR 68,353 thousand, at EUR 0.73 per share (taking into account all the shares issued) and recognised in profit and loss for the 2018 period, and of EUR 6,647 thousand, at EUR 0.07 per share (taking into account all the shares issued), charged to the share premium.

The amount distributed totalled EUR 72,600 thousand (once the amount corresponding to treasury shares had been deducted, as this is not taken from the Company's equity), taking into consideration the approved amount per share and the shares in circulation at the time of the approval by the Shareholders' Meeting held on 25 April 2019. The distributed dividend was paid on 24 May 2019.

(10) FINANCIAL LIABILITIES BY CATEGORY

Classification of financial liabilities by category

The classification of financial liabilities by category and class at 31 December 2019 and 2018 is as follows:

	Thousands of Euros
	2019		2018
	Non-current	Current	Non current	Current
Debt and payables
Financial liabilities from issue of bonds	139,376	3,482	139,077	3,482
Other financial liabilities with third parties	39	-	37	-
Bank borrowings	-	12	-	-
Short-term borrowings with Group companies and associates (Note 16)	-	27,608	-	50,487
Trade and other payables (Note 11)	-	2,158	-	11,886
Total financial liabilities	139,415	33,260	139,114	65,855

At 31 December 2019 and 2018 the carrying amounts of the financial liabilities recorded at amortised cost do not differ from the fair value.

Classification of financial liabilities by maturity

The details by maturity of the Company's financial liabilities at 31 December 2019 and 2018 are as follows:

					2019
					Thousands of Euros
	2020	2021	2022	2023	2024 and remaining years	Indefinite	Total
Debt from issue of bonds (a)	3,482	-	140,000	-	-	-	143,482
Other financial liabilities - security deposits and other	-	-	-	-	-	39	39
Bank borrowings	12	-	-	-	-	-	12
Short-term borrowings with Group companies and associates	27,608	-	-	-	-	-	27,608
Trade and other payables	2,158	-	-	-	-	-	2,158
Total	33,260	-	140,000	-	-	39	173,299

					2018
	2019	2020	2021	2022	Thousands of Euros 2023 and remaining years	Indefinite	Total
Debt from issue of bonds (a)	3,482	-	-	140,000	-	-	143,482
Other financial liabilities - security deposits and other	-	-	-	-	-	37	37
Short-term borrowings with Group companies and associates	50,487	-	-	-	-	-	50,487
Trade and other payables	11,886	-	-	-	-	-	11,886
Total	65,855	-	-	140,000	-	37	205,892

(a) The effect of measuring the financial liabilities from bank bonds at amortised cost amounts decreases the nominal value of these liabilities by EUR 624 thousand (EUR 923 thousand due to bonds in 2018).

(b) This amount corresponds to the current accounts pledged with subsidiaries. Although these accounts mature on 31 December 2019, they are tacitly extended on an annual basis.

Financial liabilities from borrowings

i) Main characteristics of debt from bonds

On 21 January 2015 the Company's Board of Directors approved the issue of simple bonds up to a maximum amount of EUR 200 million, following approval by the then-sole

shareholder of the Company on 5 February 2014.

In this respect, on 19 February 2015 the Company carried out a final bond issue in the amount of EUR 140 million, each with a nominal value of EUR 100 thousand.

The main characteristics of the issue are therefore as follows:

Issuer: Lar España Real Estate SOCIMI, S.A.
Amount of the issue: EUR 140,000 thousand.
Nominal value of each bond: EUR 100 thousand.
Maturity: 7 years. In certain circumstances the early amortisation of this instrument is possible.
Interest rate: 2.9%.
Nature of the issue: Simple bonds.
Guarantees: Guarantees, which appear below, were established up to a maximum amount of 20% of the placement: Mortgaged assets at 31 December 2019 are as follows: the Txingudi, Albacenter, Las Huertas, Albacenter Hipermercado and Anec Blau shopping centres and the Eroski hypermarkets. An ordinary pledge has also been established on the shares in LE Retail Txingudi, S.L.U., LE Retail Huertas, S.L.U., LE Retail Albacenter, S.L.U., LE Retail Anec Blau, S.L.U., LE Retail Hipermercados I, S.L.U., LE Retail Hipermercados II, S.L.U and LE Retail Hipermercados III, S.L.U.

The issuance expenses associated with this issue amounted to EUR 1,995 thousand, which were recorded by reducing the debt. In 2019, EUR 299 thousand (EUR 289 thousand in 2018) of said expenses were posted under "Financial expenses" on the income statement for the year. Interest accrued at 31 December 2019 totalled EUR 4,060 thousand (EUR 4,060 thousand at 31 December 2018), EUR 3,482 thousand of which was outstanding at 31 December 2019 to be paid in February of 2020.

At 31 December 2019, assets pledged as collateral for the bonds have a fair value of EUR 267,983 thousand and refer to the aforementioned, all of which are property investments owned by companies that are in turn completely owned by the Company.

Covenants

With respect to the bonds, the issue entails the Group's obligation to fulfil certain ratios calculated using the consolidated financial statements.

An Interest Coverage Ratio equal to or greater than 1.25%, calculated as EBITDA over financial expenses for the period.
A Loan-to-Value Ratio equal to or lesser than 65%, calculated as consolidated financial debt over the total consolidated value of the asset.

Furthermore, the Group has undertaken to establish new guarantees in those cases where the Interest Coverage Ratio is under 1.75% and the Loan-to-Value Ratio is greater than 60%.

The Directors believe the ratios are met at 31 December 2019 without the need for additional guarantees and they believe these ratios will be met in 2020.

ii) Short-term debt with Group companies and associates

On 01 April 2019, a liquidity facility was signed with the associate Inmobiliaria Juan Bravo 3, S.L., whereby Lar España Real Estate SOCIMI, S.A. may dispose of a maximum amount of EUR 7,000 thousand, maturing on 31 March 2020. This liquidity facility yields a fixed interest rate of 5.95% of the drawn capital payable on the due date. The amount drawn down at 31 December 2019 totals EUR 3,100 thousand, with the accrued interest amounting to EUR 122 thousand, of which EUR 99 thousand euros are pending payment (Note 16).

In addition, in 2018 current accounts were formalised with subsidiaries. The sums of these accounts at 31 December 2019 totalled EUR 24,410 thousand (EUR 50,487 thousand at 31 December 2018). Said current accounts accrue fixed interest at a rate of 0.21% and any interest is payable yearly. The formalised contracts are tacitly renewed for one-year periods, unless express notification to the contrary is received.

Financial interest accrued in 2019 amounted to an expense of EUR 112 thousand (EUR 84 thousand in 2018), such interest being recorded under "Financial expenses - Borrowings with Group companies and associates" (Note 16).

iii) Bank borrowings

On 16 May 2019, the Company renewed the credit facility with Bankinter in the amount of EUR 25,000 thousand. Withdrawals may be made up to the limit established at any time by virtue of cheques, transfer orders, account charges or any other order of payment accepted by Bankinter. The maturity date on which the amount drawn down must be fully repaid is 14 May 2020. Interest accrues quarterly and the interest rate is 12-month EURIBOR plus a spread of 1.20%. It has commissions for having a 4.5% balance surplus. At 31 December 2019 the balance of said credit facility was not negative, having drawn down and repaid EUR 20,083 thousand during the year.

In addition, on 26 October 2018 the Company formalised a funding line in the amount of EUR 70,000 thousand with the European Investment Bank ("EIB"). Said loan matures 7 years from the first withdrawal. At 31 December 2019 no sum has been used. The non-use fee is calculated based on the amounts of the unused and the repaid credit, with ten daily basis points per annum. The fee started to accrue one year from the date the funding was signed and totals EUR 12 thousand. The last date on which this funding line is available is 26 October 2020.

In terms of the funding from the EIB, the Company undertakes to maintain, at all time, on the basis of the consolidated financial statements of the Group of the which it is the Parent Company, a Loan to Value Ratio of less than 50%, a debt service coverage ratio greater than or equal to 2.5x and a net financial debt / net equity ratio of less than 1.0x.

(11) TRADE AND OTHER PAYABLES

The details of trade and other payables at 31 December 2019 and 2018 are as follows:

	Thousands of Euros
	31.12.2019 31.12.2018
Trade payables	347	328
Suppliers, related companies (Note 16)	646	9,303
Personnel	119	116
Other Public Entity borrowings (Note 13)	1,046	2,139
Total	2,158	11,886

(12) INFORMATION ON THE AVERAGE NUMBER OF DAYS PAYABLE OUTSTANDING

Information appears below, as required by Additional Provision Three of Act 15/2010 of 5 July (amended through the Final Second Provision of Act 31/2014, of 3 December), drawn up in accordance with the Decision of 29 January 2016 by the Spanish Accounting and Audit Institute (ICAC), on information to be included in the report on the financial statements regarding the average payment period to suppliers in commercial transactions.

	2019	2018
	Days	Days
Average number of days payable outstanding to suppliers	18	13
Ratio of paid operations	18	13
Ratio of operations pending payment	68	136
	Thousands of Euros	Thousands of Euros
Total effected payments	28,654	51,709
Total pending payments	59	93

In accordance with the Decision by ICAC, commercial transactions referring to deliveries of goods or provisions of services accrued as of the date Act 31/2014 of 3 December took effect were taken into account when calculating the average payment period to suppliers.

"Suppliers", for the exclusive purpose of providing the information envisaged in this Decision, are those trade payables to suppliers of goods and services included under "Short-term suppliers, related parties" and "Sundry payables" under the current liabilities on the balance sheet.

(13) PUBLIC ENTITIES AND TAXATION

(a) Balances with public entities

The details of balances held with public entities at 31 December 2019 and 2018 are as follows:

2019	2018
Thousands of Euros	Thousands of Euros
847	1,241
	1,241

2019	2018
Thousands of Euros	Thousands of Euros
961	2,076
80	59
5	4
1,046	2,139
	847

The amount recorded under "Taxation authorities, other withholdings" mostly comprises withholdings from income from loans granted to associated companies in 2018 that the Company has requested be returned in the Corporate Income Tax for said year.

(b) Reconciliation of accounting profits and losses and taxable income

At 31 December 2019 and 2018, the taxable fiscal base comprises the following items:

	Thousands of Euros
	31.12.2019	31.12.2018

Profit before taxes	61,111	76,082
Permanent differences	(2,170)	(5,164)
Temporary differences	(3,538)	-
Taxable income (tax loss)	62,479	70,918
Tax payable (0%)	-	-
Corporation tax expense/income	-	-

As of the 2014 period the Company is included under the SOCIMI tax regime. Pursuant to what is established therein, the tax rate applicable to the tax base is 0%, such that no expense has been recorded for Corporate Income Tax.

Deferred tax assets and liabilities

The Company has not recorded deferred tax assets for the temporary differences because the applicable rate is calculated at 0%.

(c) Periods pending verification and inspections

The Company's directors consider that the aforementioned taxes have been adequately settled, and consequently, even if discrepancies were to arise in the interpretation of prevailing standards with respect to the tax treatment of operations, the accompanying financial statements would not be significantly affected by any resulting liabilities.

(d) Reporting requirements for SOCIMIs pursuant to Law 11/2009 amended by Law 16/2012

2019 Period a) Reserves from periods prior to the application of the tax regime provided in Law 11/2009, amended by Law 16/2012 of 27 - December 2019 profits proposed to be distributed to reserves: EUR 6,111 thousand to the legal reserve. 2018 profits proposed to be distributed to reserves: EUR 7,608 thousand to legal reserve and EUR 121 thousand to voluntary reserve. 2017 profits proposed to be distributed to reserves: EUR 1,921 thousand to legal reserve and EUR 4 thousand to voluntary b) Reserves for each period in which the special tax regime reserve. provided by that Law is applicable 2016 profits proposed to be distributed to reserves: EUR 380 thousand to legal reserve and EUR 4 thousand to voluntary reserve. 2015 profits to be distributed to reserves: EUR 501 thousand to the legal reserve and EUR 6 thousand to voluntary reserves. 2014 profits to be distributed to reserves: EUR 166 thousand to the legal reserve and EUR 167 thousand to voluntary reserves. 2019 profits: EUR 2,176 thousand. a. Profits from income subject to the general income tax rate 2018 profits: EUR 5,165 thousand. b. Profits from income subject to a tax rate of 19% -





2019 profits: EUR 58,935 thousand. 2018 profits: EUR 70,917 thousand. 2017 profits: EUR 19,211 thousand. c. Profits from income subject to a tax rate of 0% 2016 profits: EUR 3,800 thousand. 2015 profits: EUR 5,006 thousand. 2014 profits: EUR 1,664 thousand.
Proposed dividend distribution for 2019: EUR 55,000 thousand. Dividend distribution for 2018: EUR 68,353 thousand. c) Dividends distributed against profits for each period in which Dividend distribution for 2017: EUR 17,286 thousand. the tax regime provided by this Law is applicable Dividend distribution for 2016: EUR 3,416 thousand. Dividend distribution for 2015: EUR 4,499 thousand. Dividend distribution for 2014: EUR 1,331 thousand.
a. Dividends from income subject to the general income tax Proposed dividend distribution for 2018: EUR 5,165 thousand. rate
b. Dividends from income subject to a tax rate of 18% (2009) - and 19% (2010 to 2012)
Proposed dividend distribution for 2019: EUR 55,000 thousand. Dividend distribution for 2018: EUR 68,353 thousand. c. Dividends from income subject to a tax rate of 0% Dividend distribution for 2017: EUR 17,286 thousand. Dividend distribution for 2016: EUR 3,416 thousand. Dividend distribution for 2015: EUR 4,499 thousand. Dividend distribution for 2014: EUR 1,331 thousand. d) Distributed dividends charged against reserves -

			2019 Period
	a. income tax rate	Distribution charged against reserves subject to the general	-
	b. of 19%	Distribution charged against reserves subject to a tax rate	-
	c. of 0%	Distribution charged against reserves subject to a tax rate	- Distribution of dividends from 2018 against the issue premium: EUR 6,647 thousand. - Distribution of dividends from 2017 against the issue premium: EUR 27,714 thousand. - Distribution of dividends from 2016 against the issue premium: EUR 26,565 thousand. - Distribution of dividends from 2015 against the issue premium: EUR 7,521 thousand.
e)	referenced in c) and d) above	Date of the agreement on the distribution of the dividends	2019 dividends: Pending approval. 2018 dividends: 25/04/2019 2017 dividends: 19/04/2018 2016 dividends: 29/05/2017 2015 dividends: 21/04/2016 2014 dividends: 27/04/2015
f)	income subject to this special regime	Date of acquisition of properties for lease that generate	2016 Period: Txingudi shopping centre: 24 March 2014 Las Huertas shopping centre: 24 March 2014 Albacenter shopping centre: 30 July 2014 Anec Blau shopping centre: 31 July 2014 Marcelo Spínola office building: 31 July 2014 2015 Period: Txingudi shopping centre: 24 March 2014 Las Huertas shopping centre: 24 March 2014 Albacenter shopping centre: 30 July 2014 Anec Blau shopping centre: 31 July 2014 Marcelo Spínola office building: 31 July 2014 2014 Period: Txingudi shopping centre: 24 March 2014 Las Huertas shopping centre: 24 March 2014 Albacenter shopping centre: 30 July 2014 Anec Blau shopping centre: 31 July 2014 Marcelo Spínola office building: 31 July 2014
	g) Date of acquisition of shares in the capital of the entities referenced in Article 2.1 of this Law.		 LE Logistic Alovera I y II, S.A.U.: 23 July 2014  LE Retail Hiper Albacenter, S.A.U. 4 November 2014  LE Retail Alisal, S.A.U.: 04 November 2014  LE Offices Eloy Gonzalo 27, S.A.U.: 18 December 2014  LE Retail As Termas, S.L.U. 18 December 2014  LE Logistic Almussafes, S.L.U.: 04 March 2015  LE Logistic Alovera III y IV, S.L.U.: 04 March 2015  LE Retail Hiper Ondara, S.L.U.: 09 June 2015  LE Offices Joan Miró 21, S.L.U.: 04 March 2015  LE Retail El Rosal, S.L.U.: 07 July 2015

	2019 Period
	 LE Retail Vidanova Parc, S.L.U.: 26 March 2015
	 LE Retail Megapark, S.L.U.: 29 May 2015
	 LE Retail Galaria, S.L.U.: 20 July 2015
	 Lar España Shopping Centres VIII, S.L.U.: 04 August 2015
	 LE Retail Vistahermosa, S.L.U.: 04 August 2015
	 LE Retail Sagunto II, S.L.U.: 04 August 2015
	 LE Retail Villaverde, S.L.U.: 21 September 2015
	 LE Retail Anec Blau, S.L.U.: 29 April 2016
	 LE Retail Albacenter, S.L.U.: 29 April 2016
	 LE Retail Txingudi, S.L.U.: 29 April 2016
	 LE Retail Las Huertas, S.L.U.: 29 April 2016
	 LE Retail Portal de la Marina, S.L.U.: 41.22% on 30 March 2016 and 58.78% on 10 October 2014.
	 LE Retail Gran Vía de Vigo, S.A.U.: 15 September
	2016
	 LE Retail Abadía, S.L.U. 27 March 2017 2016
	 LE Retail Hipermercados I, S.L.U: 27 March 2017
	 LE Retail Hipermercados II, S.L.U: 27 March 2017
	 LE Retail Hipermercados III, S.L.U: 27 March 2017
	 LE Retail Rivas, S.L.U.: 06 February 2018
	 LE Retail Cordoba Sur, S.L.U.: 15 January 2019

	- Investment property:
	Txingudi shopping centre
	Las Huertas shopping centre
	Albacenter shopping centre
	Anec Blau shopping centre
	Albacenter hypermarket
	As Termas shopping centre
	Portal de la Marina hypermarket El Rosal shopping centre
	Portal de la Marina shopping centre
	As Termas petrol station
h) Identification of the asset included in the 80% mentioned in	Lagoh shopping centre
Article 3.1 of this Law	Vidanova Parc business park
	Megapark shopping centre
	Vistahermosa business park
	Gran Vía de Vigo shopping centre Abadía business park and shopping centre
	Eroski Hypermarkets
	Megapark recreation area
	Rivas business park
	Lagoh shopping centre



	- Capital investments:  LE Logistic Alovera I y II, S.A.U.: 23 July 2014  LE Retail Hiper Albacenter, S.A.U.: 04 November 2014

	2019 Period
	 LE Retail Alisal, S.A.U.: 04 November 2014
	 LE Offices Eloy Gonzalo 27, S.A.U.: 18 December 2014
	 LE Retail As Termas, S.L.U.: 18 December 2014
	 LE Logistic Almussafes, S.L.U.: 04 March 2015
	 LE Logistic Alovera III y IV, S.L.U.: 04 March 2015
	 LE Retail Hiper Ondara, S.L.U.: 09 June 2015
	 LE Offices Joan Miró 21, S.L.U.: 04 March 2015
	 LE Retail El Rosal, S.L.U.: 07 July 2015
	 LE Retail Vidanova Parc, S.L.U.: 26 March 2015
	 LE Retail Galaria, S.L.U.: 20 July 2015
	 Lar España Shopping Centres VIII, S.L.: 04 August 2015
	 LE Retail Vistahermosa, S.L.U.: 04 August 2015
	 LE Retail Sagunto II, S.L.: 04 August 2015
	 LE Retail Villaverde, S.L.U.: 21 September 2015
	 LE Retail Anec Blau, S.L.U.: 29 April 2016
	 LE Retail Albacenter, S.L.U.: 29 April 2016
	 LE Retail Txingudi, S.L.U.: 29 April 2016
	 LE Retail Las Huertas, S.L.U.: 29 April 2016
	 LE Retail Gran Vía de Vigo, S.A.U.: 15 September 2016
	 LE Retail Abadía, S.L.U.: 27 March 2017
	 LE Retail Hipermercados I, S.L.U: 27 March 2017
	 LE Retail Hipermercados II, S.L.U: 27 March 2017
	 LE Retail Hipermercados III, S.L.U: 27 March 2017
	 LE Retail Rivas, S.L.U.: 06 February 2018
	 LE Retail Cordoba Sur, S.L.U.: 15 January 2019

i) Reserves from periods in which the special tax regime provided in this Law was applicable that have been applied in the tax period other than for the distribution thereof or to offset losses. The period from which these reserves have been taken must be specified.	-

(14) RISK MANAGEMENT POLICY

(a) Financial risk factors

The Company's activities are exposed to various financial risks: market risk, credit risk, liquidity risk and interest rate risk in cash flows and the risk associated with the special SOCIMI tax regime. The Company's global risk management plan focuses on the uncertainty of the financial markets and tries to minimise the possible adverse effects on its financial profitability.

The senior management of the Company manages risks in accordance with policies approved by the board of directors. Senior management identifies, evaluates and mitigates financial risks in close collaboration with the Company's operational units. The board of directors issues global risk management policies in writing, as well as policies for specific issues such as market risk, interest rate risk, liquidity risk and investments of cash surpluses.

(i) Market risk

In light of current conditions in the property sector, the Company has established specific measures that it plans to adopt to minimise their impact on its financial position.

The application of these measures is dependent on the outcome of the sensitivity analyses that the Company performs periodically. These analyses take the following factors into consideration:

The economic environment in which the Group performs its activity: The design of various economic scenarios with different key variables that can affect the companies of the Group (interest rates, share price, occupancy rates of investment property, etc.). The identification of variables that are interconnected and their degree of connection.
The time frame within which the assessment is made: The time frame for the analysis and the potential deviations should be taken into account.

Cash and cash equivalents

At 31 December 2019 the Company has cash in the amount of EUR 26,703 thousand, which is represents its greatest exposure to risk in terms of these assets (EUR 133,562 thousand at 31 December 2018).

Cash and cash equivalents are held at banks and financial institutions with a high credit rating.

After ending the treasury share repurchase programs (Note 9), which temporarily suspended the liquidity agreement with a financial intermediary pursuant to terms of Circular 3/2007, of 19 December by the Spanish Securities Market Commission on liquidity agreements for the purposes of accepting same as a market practice and other relevant regulations, the agreement was renewed with the financial intermediate JB Capital Markets. By virtue of said liquidity agreements, a restricted amount of EUR 500 thousand is kept in the treasury and a maximum of 63,000 shares are kept for the sale of treasury shares.

On 14 January 2020 a new share repurchase program has been signed between Lar España and its liquidity provider leaving the aforementioned liquidity program temporarily suspended (Note 19).

(ii) Liquidity risk

Defined as the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.

The Company applies a prudent policy to cover its liquidity risks based on having sufficient liquidity to meet its obligations when they fall due in both normal and stressed conditions, without incurring unacceptable losses or placing the Company's reputation at risk.

The Company's exposure to liquidity risk at 31 December 2019 and 2018 is detailed below. The following tables show the analysis of financial liabilities by remaining contractual maturity dates.

	2019 Thousands of Euros

	Less than 1 month	1 to 3 months	3 months to 1 year	More than 1 year	Indefinite	Total
Financial liabilities from issue of bonds (*)	-	3,482	-	140,000	-	143,482
Other non-current liabilities - security deposits and guarantees	-	-	-	-	39	39
Bank borrowings	-	-	12	-	-	12
Debt with Group companies and associates (a)	-	-	27,608	-	-	27,608
Trade and other payables	1,071	1,087	-	-	-	2,158
Total	1,071	4,569	27,620	140,000	39	173,299

	2018 Thousands of Euros

	Less than 1 month	1 to 3 months	3 months to 1 year	More than 1 year	Indefinite	Total
Financial liabilities from issue of bonds (*)	-	3,482	-	140,000	-	143,482
Other non-current liabilities - security deposits and guarantees	-	-	-	-	37	37
Debt with Group companies and associates (a)	-	-	50,487	-	-	50,487
Trade and other payables	2,583	9,303	-	-	-	11,886
Total	2,583	12,785	50,487	140,000	37	205,892

(a) This amount corresponds to the current accounts pledged with subsidiaries. Although these accounts mature on 31 December 2018, they are tacitly extended on an annual basis.

* The effect of measuring the financial liabilities from bonds at amortised cost amounts, which mature in 2022, decreases the nominal value of these liabilities by EUR 623 thousand (EUR 923 thousand in 2018).

(iii) Cash flow and fair value interest rate risks

At 31 December 2019 the Company does not have any short-term deposits at fixed interest.

At the reporting date, income and cash flows from the Company's operating activities are not significantly affected by fluctuations in market interest rates. At 31 December 2019 the Company has a financial liability for simple bonds issued for a nominal amount of EUR 140,000 thousand at a fixed rate and does not have any amounts drawn down from bank borrowings (see Note 10).

(iv) Tax risk

As mentioned in Note 1, the Company and part of the subsidiaries thereof have availed themselves of the special tax regime for SOCIMIs.

Among the obligations that the Company must comply with are some that are more formalistic in nature, such as the inclusion of the term SOCIMI in the corporate name, the inclusion of certain information in the notes to the individual financial statements, being listed on a stock exchange, etc., and others that additionally require the preparation of estimates and the application of rulings by the Management (determination of tax income, income tests, asset tests, etc.) that may be complex, especially considering that the SOCIMI Regime is relatively recent and its development has been carried out, fundamentally, through the General Directorate of Taxation's response to queries raised by different companies. In this sense, the Group's Management, with the support of its tax consultants, has verified that regime requirements have been satisfied and concluded that at 31 December 2019 all requirements have been satisfied. Management considered the income test non-compliance in 2018 to have since been corrected. This non-compliance was an extraordinary situation caused by the positive result after having returned the loan granted to Inmobiliaria Juan Bravo 3, S.L. (Note 16a). Therefore, the Company shall continue to avail itself of the SOCIMI tax regime, and this has been taken into account when drawing up these financial statements.

Should the Group not satisfy the requirement established in the Regime or the Company's Shareholders' Meeting not approve the dividend distribution proposed by the Board of Directors, calculated in accordance with the requirements set forth in the aforementioned law, the companies would be in breach of said law and, consequently, would have to file their tax returns under the general tax regime rather than that applicable to SOCIMIs (Note 1).

(b) Capital management

The Company is essentially financed with its own capital and financial debt. The Company resorted to market financing through mortgage-backed loans or other means of funding to fund the acquisition of new investments. In addition, in 2015 the Company carried out a bond issue (Note 10).

The Company manages its capital with the aim of safeguarding its capacity to continue operating as a going concern, so as to continue providing shareholder remuneration and benefiting other stakeholders, while maintaining an optimum capital structure to reduce the cost of capital.

To maintain and adjust the capital structure, the Company can adjust the amount of dividends payable to shareholders (within the limits established by the SOCIMI regime), reimburse capital, issue shares or dispose of assets to reduce debt.

(15) INCOME AND EXPENSES

(a) Net turnover

Distribution of the net turnover for the 2019 and 2018 financial years, by business category and by geographical market is as follows:

	2019	2018
	Thousands of Euros	Thousands of Euros
Income from investments in equity instruments:
Income from dividends (Note 16a)	62,184	38,941
Income from the distribution of available reserves (see notes 6 and 16a)	5,265	-
Income from loans with Group companies and associates (Note 16a)	-	27,921
Income from invoicing financial expenses within the Group (Note 16a)	4,364	4,352
Income from disposing of equity instruments (Note 7a)	-	15,507
	71,813	86,721

	2019	2018
	Thousands of Euros	Thousands of Euros
Spain	71,813	86,721
	71,813	86,721

(b) Personnel expenses

Details of employee benefit expenses at 31 December 2019 and 2018 are as follows:

	Thousands of Euros
	2019	2018
Salaries and wages	367	437
Other benefits and taxes	56	65
	423	502

(c) Other operating expenses

	Thousands of Euros
	2019	2018
Independent professional services	1,541	1,417
Insurance premiums	126	250
Bank fees and commissions	9	8
PR and advertising	112	97
Supplies	3	2
Other expenses	290	1,002
Losses on, impairment of and change in allowances for trade operations	(9)	-
Taxes	4	7
	2,076	2,783

On 31 December 2019 Lar España Real Estate SOCIMI, S.A. invoiced the subsidiaries it completely controls a total of EUR 15,861 thousand for management support services provided to these companies during the year (EUR 37,049 thousand at 31 December 2018). The decrease in the invoiced amount is mainly due to the failure in 2019 to accrue the Performance Fee and Divestment Fee associated with the agreement held with the manager, Grupo LAR (Note 16a). This amount appears net of the expenses included under "Independent professional services" (Note 16a).

(16) RELATED PARTY BALANCES AND TRANSACTIONS

(a) Transactions and balances between the Company and related parties

Manager agreement with Grupo Lar

On 12 February 2014, the Company signed an Investment Manager Agreement with Grupo Lar Inversiones Inmobiliarias, S.A. (hereinafter "the Manager") for the rendering of management services by Grupo Lar Inversiones Inmobiliarias, S.A., including, among others, the acquisition and management of property assets on behalf of the Company and the financial management thereof.

On 19 February 2018 the Company entered into a new agreement with the manager, in order to novate the terms of the Investment Manager Agreement. According to the aforementioned novation, the IMA will be effective for 4 years from 1 January 2018. In addition, the structure of the fees corresponding to the Management Company (fixed fee or base fee and variable fee or performance fee) has been modified. As of 2018, the base fee to be paid to the Management Company is calculated based on the annual equivalent of the greater between (i) EUR 2 million and (ii) the sum of (a) 1.00% of EPRA NAV (excluding net cash) at 31 December for the previous period up to EUR 1,000 million and (b) 0.75% of the EPRA NAV (excluding net cash) at 31 December for the previous year for any amount that exceeds EUR 1,000 million.

The fixed amount accrued by the manager totalled EUR 9,877 thousand (EUR 8,740 thousand at 31 December 2018) (net of any expenses discounted based on the manager agreement formalised between the parties, which totalled EUR 398 thousand) and is recorded under "Other operating expenses" on the adjoined Income Statement and was subsequently rebilled to subsidiaries (Note 15c). At 31 December 2019, the amount of EUR 646 thousand was pending payment (EUR 756 thousand at 31 December 2018).

In terms of the floating amount, no figures were recorded at 31 December 2019, such that the Directors of the Company believe that developments of the EPRA NAV and market capitalisation at year-end did not reach either minimum established in the IMA for the accrual thereof (EUR 8,566 thousand at 31 December 2018).

Rebilling between Group companies

In 2019, as in previous years, the Company has formalized service provision and management agreements with companies in its group for the period ended 31 December 2019, where the expenses of this nature incurred by the Company on the behalf of the Group companies are passed on.

In this sense, in 2019, the Company has invoiced EUR 15,861 thousand, net of VAT, for management support services (37,049 thousand in 2018). The Company's distribution approach is based on the relative weight of the underlying market value of each pledged property asset of the investees over the total market value (calculated based on the latest available appraisal from the period immediately prior to 31 December of each period) of such property assets at the beginning of the relevant period.

Likewise, the Company has entered into agreements with the Group companies owning assets used to guarantee the issued bonds (Note 10) in order to pass on the financial cost thereof. The amount passed on as at 31 December 2019 for this item totalled EUR 4,364 thousand (EUR 4,352 thousand in 2018) and is recorded under "Net turnover". The Company's distribution approach is based on the relative weight of the underlying market value of each pledged property asset of the investees over the total market value (calculated based on the latest available appraisal from the period immediately prior to 31 December of each period) of such property assets at the beginning of the relevant period.

Income from receivables and shareholdings in Group, multi-group and associated companies

The amount of income the Company collects in terms of the dividends received from subsidiaries totalled EUR 62,185 thousand in 2019 (EUR 38,941 thousand in 2018). Of this amount, EUR 28,700 thousand corresponds to interim dividends distributed against the profit for 2019 of investees, where the remainder corresponds to the final dividends distributed against the profit for 2018 after the distribution of the profit of investees was approved.

Additionally, during 2019 the Company recognised income from the distribution of available reserves of Euros 5,265 thousand (none in 2018) (see notes 4h, 6a and 15a).

Also in 2018, the Company received repayment for two loans granted to Inmobiliaria Juan Bravo 3, S.L. The first was for a nominal amount of Euros 61,303 thousand, having been acquired in 2015 for EUR 40,000 thousand due to the insolvency of the investee. The second, granted on 11 January 2016, amounted to EUR 2,000 thousand. Following the repayment of both loans, the Company recorded positive finance income of EUR 21,303 thousand, corresponding to the difference between the price for which it purchased the first loan from a financial institution and its nominal value.

Short-term debt with Group companies and associates

At 31 December 2019, the availed amount totalled EUR 3,100 thousand.

In addition, the Company has formalized current accounts with subsidiaries. The sums of these accounts at 31 December 2019 totalled EUR 24,410 thousand (EUR 50,487 thousand at 31 December 2018). Said current accounts accrue fixed interest at a rate of 0.21% and any interest is payable yearly. The accounts mature yearly and are tacitly renewed for one-year periods, unless express notification to the contrary is received.

(b) Details of transactions and balances held with related parties

Transactions and balances with related parties in the 2019 and 2018 periods are as follows:

			2019
	Thousands of Euros Balances
	Loans and receivables		Trade payables	Current account	Transactions Income (*)	Expense
Balances with Group and related parties	Long-term	Short-term	Short-term	Short-term
Balances with Group companies
LE Retail Txingudi, S.L.U.	-	1,094	-	-	1,533	-
LE Retail Las Huertas, S.L.U.	-	349	-	-	489	-
LE Retail Anec Blau, S.L.U.	-	2,861	-	-	3,975	-
LE Retail Albacenter, S.L.U.	-	1,285	-	-	1,766	-
LE Offices Marcelo Spínola, S.L.U.	-	-	-	-	12	-
LE Logistic Alovera I y II, S.A.U.	-	-	-	(903)	-	(21)
LE Offices Eloy Gonzalo 27, S.A.U.	-	-	-	-	60	(23)
LE Retail As Termas, S.L.U.	-	791	-	-	634	-
LE Logistic Alovera III y IV, S.L.U.	-	-	-	(216)	-	(4)
LE Logistic Almussafes, S.L.U.	-	-	-	(2,756)	-	(8)
LE Retail Hiper Ondara, S.L.U.	-	3,173	-	(15,734)	2,603	(33)
LE Offices Joan Miró 21, S.L.U.	-	-	-	(416)	-	(7)
LE Retail Vidanova Parc, S.L.U.	-	518	-	-	428	-
LE Retail Galaria, S.L.U.	-	-	-	-	-	-
Lar España Shopping Centres VIII, S.L.U.	-	2,755	-	-	2,260	-
LE Retail Vistahermosa, S.L.U.	-	447	-	-	369	-
LE Retail Gran Vía de Vigo, S.A.U.	-	1,818	-	-	1,276	-
LE Retail Hiper Albacenter, S.A.U.	-	498	-	-	698	-
LE Retail Alisal, S.A.U	-	-	-	(2,223)	-	(7)
LE Retail El Rosal, S.L.U.	-	1,012	-	-	816	-
LE Retail Villaverde, S.L.U.	-	-	-	(1,656)	-	(5)
LE Retail Abadía, S.L.U.	-	752	-	-	622	-
LE Retail Hipermercados I, S.L.U.	-	534	-	-	749	-
LE Retail Hipermercados II, S.L.U.	-	531	-	-	744	-
LE Retail Hipermercados III, S.L.U.	-	492	-	-	689	-
Lar España Inversión Logística IV, S.L.U.	-	-	-	(505)	-	(4)
LE Retail Rivas, S.L.U.	-	603	-	-	498	-
LE Retail Sagunto II, S.L.U.	-	6	-	-	5	-
LE Retail Cordoba Sur, S.L.U.:	-	-	-	-	-	-
Inmobiliaria Juan Bravo 3, S.L.	-	74	-	(3,199)	-	(122)
Dividends (i)	-	28,700	-	-	62,185	-
Income from the distribution of available reserves (notes 15a and 6a)	-	-	-	-	5,265	-
Grupo Lar Inversiones Inmobiliarias, S.A.	-	-	(646)	-	-	-
	-	48,293	(646)	(27,608)	87,676	(234)

(*) Income from rebilling that is presented net of any external service expense, in accordance with Note 4h, totalled EUR 15,861 thousand at 31 December 2019.

(i) The details of the dividends recorded in 2019 are as follows:

Company	Interim dividends over profit and loss at 31/12/2019	Final dividends over profit and loss at 31/12/2018	Total
LE Retail Alisal, S.A.U	5	2,011	2,016
LE Logistic Almussafes, S.L.U.	159	2,054	2,213
LE Logistic Alovera I y II, S.A.U.	-	15,621	15,621
LE Logistic Alovera III y IV, S.L.U.	12	2,790	2,802
LE Retail As Termas, S.L.U.	1,828	557	2,385
LE Retail Galaria, S.L.U.	-	1,598	1,598
LE Retail Hiper Albacenter, S.A.U.	32	89	121
LE Retail Hiper Ondara, S.L.U.	2,415	657	3,072
LE Offices Eloy Gonzalo 27, S.A.U.	15,079	-	15,079
LE Offices Joan Miró 21, S.L.U.	1	5,496	5,497
LE Retail Villaverde, S.L.U.	5	1,456	1,461
LE Retail Vistahermosa, S.L.U	781	-	781
LE Retail Gran Vía de Vigo, S.A.	-	181	181
LE Retail Abadía, S.L.U.	1,861	132	1,993
LE Retail Hipermercados I, S.L.U.	606	3	609
LE Retail Hipermercados II, S.L.U.	611	53	664
LE Retail Hipermercados III, S.L.U.	554	47	601
LE Retail Anec Blau, S.L.U.	35	266	301
LE Retail Txingudi, S.L.U.	804	-	804
LE Retail Albacenter, S.L.U.	908	176	1,084
LE Retail Las Huertas, S.L.U.	-	1	1
Lar España Inversión Logística IV, S.L.U.	-	293	293
LE Retail Rivas, S.L.U.	1,528	-	1,528
LE Retail Vidanova Parc, S.L.U.	1,095	-	1,095
Le Retail Sagunto II, S.L.U.	-	4	4
LE Retail El Rosal, S.L.U.	381	-	381
Total	28,700	33,485	62,185

The interim dividends over profit and loss at 31 December 2019 were approved on 31 December 2019 and were paid on 21 January 2020.

			2018
	Thousands of Euros
		Balances			Transactions
		Loans and receivables	Trade payables	Current account	Income (*)	Expense
Balances with Group and related parties	Long-term	Short-term	Short-term	Short-term
Balances with Group companies
LE Retail Txingudi, S.L.U.	-	1,819	-	-	1,543	-
LE Retail Las Huertas, S.L.U.	-	611	-	-	518	-
LE Retail Anec Blau, S.L.U.	-	2,974	-	-	2,534	-
LE Retail Albacenter, S.L.U.	-	2,368	-	-	1,770	-
LE Offices Marcelo Spínola, S.L.U.	-	1,871	-	-	1,587	-
LE Logistic Alovera I y II, S.A.U.	-	1,778	-	17,152	1,508	(27)
LE Offices Eloy Gonzalo 27, S.A.U.	-	1,874	-	-	1,588	-
LE Retail As Termas, S.L.U.	-	2,552	-	-	2,172	-
LE Logistic Alovera III y IV, S.L.U.	-	380	-	3,002	322	(2)
LE Logistic Almussafes, S.L.U.	-	287	-	4,801	244	(1)
LE Retail Hiper Ondara, S.L.U.	-	10,270	-	15,701	8,817	(1)
LE Offices Joan Miró 21, S.L.U.	-	652	-	-	561	-
LE Retail Vidanova Parc, S.L.U.	-	1,084	-	-	931	-
LE Retail Galaria, S.L.U.	-	193	-	293	166	-
Lar España Shopping Centres VIII, S.L.U.	-	2,669	-	-	2,299	-
LE Retail Vistahermosa, S.L.U.	-	1,499	-	-	1,291	-
LE Retail Gran Vía de Vigo, S.A.U.	-	5,058	-	-	4,328	-
LE Retail Hiper Albacenter, S.A.U.	-	724	-	-	614	-
LE Retail Alisal, S.A.U	-	112	-	4,228	96	(7)
LE Retail El Rosal, S.L.U.	-	3,368	-	-	2,873	-
LE Retail Villaverde, S.L.U.	-	117	-	3,108	99	(5)
LE Retail Abadía, S.L.U.	-	1,986	-	-	1,711	-
LE Retail Hipermercados I, S.L.U.	-	858	-	-	727	-
LE Retail Hipermercados II, S.L.U.	-	849	-	-	720	-
LE Retail Hipermercados III, S.L.U.	-	858	-	-	728	-
Lar España Inversión Logística IV, S.L.U.	-	144	-	2,202	124	(2)
LE Retail Rivas, S.L.U.	-	1,777	-	-	1,530	-
Inmobiliaria Juan Bravo 3, S.L.	-	-	-	-	27,921	(39)
Dividends (i)	-	-	-	-	38,941	-
Grupo Lar Inversiones Inmobiliarias, S.A.	-	-	(9,185)	-	-	(35,086)
	-	48,732	(9,185)	50,487	108,263	(35,170)

(i) The details of the dividends recorded in 2018 are as follows:

Company	Interim dividends over profit and loss at 31/12/2018	Dividend over profit and loss at 31/12/2017	Total
LE Retail Alisal, S.A.U	2,098	54	2,152
LE Logistic Almussafes, S.L.U.	2,185	76	2,261
LE Logistic Alovera I y II, S.A.U.	16,050	437	16,487
LE Logistic Alovera III y IV, S.L.U.	2,936	245	3,181
LE Retail As Termas, S.L.U.	-	183	183
LE Retail Galaria, S.L.U.	1,664	30	1,694
LE Retail Hiper Albacenter, S.A.U.	111	24	135
LE Retail Hiper Ondara, S.L.U.	-	28	28
LE Offices Joan Miró 21, S.L.U.	-	-	-
LE Retail Megapark, S.L.U.	-	553	553
LE Retail Villaverde, S.L.U.	1,597	47	1,644
LE Retail Vistahermosa, S.L.U	-	125	125
LE Retail Portal de la Marina, S.L.U.	-	595	595
LE Retail Gran Vía de Vigo, S.A.	-	1,002	1,002
LE Retail Abadía, S.L.U.	827	38	865
LE Retail Hipermercados I, S.L.U.	343	264	607
LE Retail Hipermercados II, S.L.U.	317	192	509
LE Retail Hipermercados III, S.L.U.	215	128	343
LE Retail Anec Blau, S.L.U.	554	360	914
LE Retail Txingudi, S.L.U.	-	106	106
LE Retail Albacenter, S.L.U.	274	-	274
LE Retail Las Huertas, S.L.U.	56	-	56
LAR España Inversión Logística IV, S.L.U.	5,165	-	5,165
Total	34,392	4,487	38,879

The interim dividends over profit and loss at 31 December 2018 were approved and paid on 27 December 2018.

(c) Information relating to Directors and Senior Management staff of the Company

The remuneration received by the members of the board of directors and senior management personnel of the Group during 2019 and 2018, classified by item, is as follows:

The Board of Directors received EUR 590 thousand in allowances (EUR 590 thousand in 2018). At 31 December 2019, allowances for the Board of Directors include EUR 85 thousand for the non-executive secretary of the Board of Directors (EUR 85 thousand at 31 December 2018).

In 2019 senior management staff received EUR 368 thousand in salaries and wages (EUR 437 thousand in 2018).

The amount of civil liability insurance premiums for directors and senior management covering damages resulting from acts or omissions totalled EUR 120 thousand (EUR 194 thousand in 2018).

At 31 December 2019 and 2018 the Company has no pension, life insurance, stock options or compensation obligations with former or current members of the Board of Directors or Senior Management personnel of the Company.

At 31 December 2019 and 2018 no advances or loans have been extended to Members of the Board or Senior Management.

At 31 December 2019 and 2018 the Company has 7 Directors: 5 men and 2 women.

(d) Transactions other than ordinary business or under terms differing from market conditions carried out by the Directors

Apart from the transactions with related parties listed above, in 2019 the Directors of the Company and members of its Board of Directors have not carried out any transactions other than ordinary business or under terms that differ from market conditions with said Company or any other Group company.

(e) Investments and positions in other companies held by the Directors and their related parties

The Directors of the Company and their related parties have had no conflicts of interest requiring disclosure in accordance with Article 229 of the Revised Spanish Companies Act.

Notwithstanding the above, it is hereby stated that the board member Mr Miguel Pereda Espeso holds the following positions in other companies:

i. Board Member of Grupo Lar Inversiones Inmobiliarias S.A. (managing company of the Company). Grupo Lar Inversiones Inmobiliarias, S.A. (the then sole shareholder of the Company) and the General Shareholders' Meeting saved this situation of potential conflict of interest by appointing Miguel Pereda as board member of Lar España Real Estate SOCIMI, S.A. on 5 February 2014 and 29 May 2017, respectively.
ii. Chairperson of the Board of Villamagna, S.A.
iii. Sole Administrator of Fomento del Entorno Natural, S.A. in which he is also a shareholder (holding property of 13.85% of the shares).
iv. In addition, Miguel Pereda Espeso holds positions in subsidiaries of Grupo Lar Inversiones Inmobiliarias S.A. as indicated below:

Company	Position/Role	Number of Shares	% of Participation
Grupo Lar Inversiones Inmobiliarias, S.A.	Executive Committee Director and Secretary	5,605	24.95%
Grupo Lar Europa del Este, S.L.U.	Director	N/A	N/A
Grupo Lar Holding Iberia, S.A.U.	President and Chief Executive Officer	N/A	N/A
Inmobérica de Gestión, S.L.U.	Sole Administrator	N/A	N/A
Grupo Lar Terciario, S.L.U. (until 10 June 2019, when the company was wound up by virtue of the merger through absorption of Grupo Lar Holding Iberia, S.A.U.)	President of the Board of Directors	N/A	N/A
Grupo Lar Unidad Terciario, S.L.U.	Sole Administrator	N/A	N/A
Global Caronte, S.L.U.	Joint and Several Administrator	N/A	N/A
Global Byzas, S.L.U.	Sole Administrator	N/A	N/A
Oficinas Calle Albarracín, S.L.U.	Sole Administrator	N/A	N/A
HRE INVERSIONES II, S.L. (formerly HRE INVESTMENT II, B.V.)	Sole Administrator	N/A	N/A
Desarrollos Ibéricos Lar, S.L.U.	Joint and Several Administrator	N/A	N/A
Grupo Lar Desarrollo Suelo, S.L.U.	Joint and Several Administrator	N/A	N/A
Proaktivo Servicios Generales, S.L.U.	Sole Administrator	N/A	N/A
Parque Castilleja, S.L.	Chairperson and Several and Joint Managing Director	N/A	N/A
Grupo Lar Grosvenor Servicios Dos, S.L.	Individual representing the Sole Administrator of Grupo Lar Terciario, S.L.	N/A	N/A
Inversiones Yarmuk, S.A.	Individual representing the Liquidator of Global Byzas, S.L.U.	N/A	N/A
Grupo Lar Oficinas Europeas, S.A.U.	Sole Administrator	N/A	N/A
Acacia Inmuebles, S.L.	President of the Board of Directors	N/A	N/A
Inmuebles Logísticos Iberia, S.L.	President of the Board of Directors	N/A	N/A

Notwithstanding the above, the board member Mr Miguel abstained from participating in those decisions that might have created a conflict of interest.

(17) EMPLOYEE INFORMATION

The average headcount of the Company at 31 December 2019 and 2018, distributed by category, is as follows:

	2019	2018
Professional category
Senior management	3	4
personnel
Total	3	4

Furthermore, the distribution of the Company's personnel by sex at the end of the 2019 and 2018 was as follows:

	2019		2018
	Female	Male	Female	Male
Professional category Senior management personnel	1	2	1	2
Total	1	2	1	2

Salaries, wages and similar expenses corresponding to these employees at 31 December 2019 totalled EUR 368 thousand (EUR 437 thousand at 31 December 2018).

In 2019 and 2018 the Company did not employ anyone with a disability greater than or equal to 33%.

(18) AUDIT FEES

In 2019 and 2018, the professional fees charged for auditing and other services provided by the Company's audit firm, Deloitte S.L., or by a company related thereto by through shared ownership, management or a control relationship, were as follows (in thousands of Euros):

	Thousands of Euros
	2019	2018
Audit and related services
Audit services	163.5	148.5
Other verification services	101.6	12.0
Professional services
Other services	-	250.0
Total	265.1	410.5

(19) EVENTS AFTER THE REPORTING PERIOD

(20) EXPLANATION ADDED FOR TRANSLATION TO ENGLISH

Information on Group Companies 31 December 2019

a) Subsidiaries

				% of Participation			Thousands of Euros
Company	Activity	Type of entity	Direct	Total	Share capital	Operating profit/(loss)	Profit/(loss)	Dividends	Other equity	Total equity (a)	Market value (b)	Carrying amount (c)	Implicit capital gains (d=b-c)	Carrying amount of investment (e)
LE Logistic Alovera I y II,	Leasing of property	Subsidiary	100	100	60	(44)	(24)	-	3,579	3,615	-	-	-	3,469
S.A.U. LE Retail Hiper Albacenter,	Leasing of property	Subsidiary	100	100	60	36	36	(32)	14,004	14,068	19,100	14,095	5,005	14,053
S.A.U. LE Retail	Leasing of property	Subsidiary	100	100	60	(1)	6	(5)	2,278	2,339	-	-	-	2,327
Alisal, S.A.U. LE Offices Eloy Gonzalo	Leasing of property	Subsidiary	100	100	60	20,395	20,427	(15,079)	344	5,752	-	-	-	6,028
27, S.A.U. LE Retail As Termas,	Leasing of property	Subsidiary	100	100	4	3,126	2,031	(1,828)	32,480	32,687	86,260	68,476	17,784	32,559
S.L.U.* LE Logistic Alovera III y	Leasing of property	Subsidiary	100	100	4	10	14	(12)	646	652	-	-	-	651
IV, S.L.U. LE Logistic Almussafes,	Leasing of property	Subsidiary	100	100	4	169	177	(159)	2,969	2,991	-	-	-	2,974
S.L.U. LE Retail Hiper Ondara,	Leasing of property	Subsidiary	100	100	4	9,279	2,683	(2,415)	135,741	136,014	345,566	271,495	74,071	129,398
S.L.U.* LE Offices Joan Miró 21,	Leasing of property	Subsidiary	100	100	4	(7)	1	(1)	798	802	-	-	-	803
S.L.U. LE Retail Vidanova Parc, S.L.U.	Leasing of property	Subsidiary	100	100	4	2,151	1,217	(1,095)	28,433	28,559	55,000	45,854	9,146	30,194

Information on Group Companies 31 December 2019

				% of Participation		Thousands of Euros
Company	Activity	Type of entity	Direct	Total	Share capital	Operating profit/(loss)	Profit/(loss)	Dividends	Other equity	Total equity (a)	Market value (b)	Carrying amount (c)	Implicit capital gains (d=b-c)	Carrying amount of investment (e)
LE Retail El	Leasing of property	Subsidiary	100	100	3	1,675	423	(381)	23,079	23,124	110,900	70,364	40,536	33,543
Rosal, S.L.U.*
LE Retail	Leasing of property	Subsidiary	100	100	4	(6)	(84)	-	504	424	-	-	-	509
Galaria, S.L.U.
LE Retail	Leasing of property	Subsidiary	100	100	3	930	(210)	-	115,665	115,458	312,000	214,639	97,361	121,360
Lagoh, S.L.U.*
LE Retail	The acquisition and	Subsidiary	100	100	3	(16)	(16)	-	1,532	1,519	1,445	1,227	218	1,536
Sagunto II,	development of
S.L.U.	properties for lease
LE Retail	Leasing of property	Subsidiary	100	100	3	1,408	867	(781)	21,490	21,579	50,500	42,238	8,262	21,907
Vistahermosa, S.L.U.*
Lar España	The acquisition and	Subsidiary	100	100	3	1,377	1,246	-	697	1,946	-	-	-	701
Inversión	development of
Logística IV, S.L.U.	properties
LE Retail	Leasing of property	Subsidiary	100	100	3	-	6	(5)	1,758	1,762	-	-	-	1,760
Villaverde,
S.L.U.
LE Retail	Leasing of property	Subsidiary	100	100	3	39	39	(35)	82,980	82,987	102,063	86,699	15,364	83,570
Anec Blau,
S.L.U.*
LE Retail	Leasing of property	Subsidiary	100	100	3	1,009	1,009	(908)	33,724	33,828	44,600	32,282	12,318	33,776
Albacenter,
S.L.U.
LE Retail	Leasing of property	Subsidiary	100	100	3	893	893	(804)	32,482	32,574	36,520	30,027	6,493	32,627
Txingudi,
S.L.U.
LE Retail Las	Leasing of property	Subsidiary	100	100	3	220	220	-	12,588	12,811	11,580	11,697	(117)	12,823
Huertas,
S.L.U.
LE Offices	Leasing of property	Subsidiary	100	100	3	9,029	8,058	-	(1,499)	6,562	-	-	-	5,516
Marcelo

Information on Group Companies 31 December 2019

				% of Participation	Thousands of Euros
Company	Activity	Type of entity	Direct	Total	Share capital	Operating profit/(loss)	Profit/(loss)	Dividends	Other equity	Total equity (a)	Market value (b)	Carrying amount (c)	Implicit capital gains (d=b-c)	Carrying amount of investment (e)
Spínola,
S.L.U.
LE Retail Gran Vía de Vigo, S.A.U.*	Leasing of property	Subsidiary	100	100	502	5,731	3,538	-	26,958	30,998	166,890	105,234	61,656	59,170
LE Retail	Leasing of property	Subsidiary	100	100	7,204	3,258	2,298	(1,861)	16,926	24,567	87,520	63,850	23,670	36,849
Abadía, S.L.U.*
	Leasing of property
LE Retail Hipermercados I, S.L.U.	Leasing of property	Subsidiary	100	100	3	674	674	(606)	14,808	14,879	18,580	14,241	4,339	15,615
	Leasing of property
LE Retail Hipermercados II, S.L.U.	Leasing of property	Subsidiary	100	100	3	679	679	(611)	14,936	15,007	18,440	14,458	3,982	16,827
LE Retail Hipermercados	Leasing of property	Subsidiary	100	100	3	615	615	(554)	13,684	13,748	17,100	13,113	3,987	15,524
III, S.L.U. LE Retail	Leasing of property	Subsidiary	100	100	3	2,372	1,697	(1,528)	27,361	27,533	67,500	51,903	15,597	35,313
Rivas, S.L.U.*
LE Retail Cordoba Sur, S.L.U.:	The acquisition and development of properties	Subsidiary	100	100	4	(14)	(14)	-	947	937	-	-	-	954
					8,023	64,987	48,506	(28,700)	661,893	689,722	1,551,564	1,151,892	399,672	752,336

* Company audited by Deloitte, S.L.

All the companies are domiciled at Calle Rosario Pino 14-16, Madrid.

Information on Group Companies 31 December 2019

b) Joint venture

					% of Participation			Thousands of Euros
Company	Registered office	Activity	Auditor	Type of entity	Direct	Total	Share capital	Operating profit/(loss)	Profit/(loss)	Dividends	Other equity	Carrying amount of investment
Inmobiliaria Juan Bravo 3, S.L.	Rosario Pino 14- 16, Madrid	Property leasing and development	Deloitte	Associate	50	50	3,483	4,375	6,060	-	(3,151)	5,100

Information on Group Companies 31 December 2018

a) Subsidiaries

				% of Participation					Thousands of Euros
Company	Activity	Type of entity	Direct	Total	Share capital	Operating profit/(loss)	Profit/(loss)	Dividends	Other equity	Total equity (a)	Market value (b)	Carrying amount (c)	Implicit capital gains (d=b-c)	Carrying amount of investment (e)
LE Logistic Alovera I y II,	Leasing of property	Subsidiary	100	100	60	31,642	31,670	(16,050)	169	15,849	-	-	-	60
S.A.U. LE Retail Hiper Albacenter, S.A.U.	Leasing of property	Subsidiary	100	100	60	200	200	(111)	12,432	12,581	15,390	12,758	2,632	12,480
LE Retail Alisal, S.A.U.	Leasing of property	Subsidiary	100	100	60	4,145	4,110	(2,098)	2,162	4,234	-	-	-	2,210
LE Offices Eloy Gonzalo 27, S.A.U.	Leasing of property	Subsidiary	100	100	60	(1,783)	(1,783)	-	19,314	17,591	39,400	18,547	20,853	19,834
LE Retail As	Leasing of property	Subsidiary	100	100	4	1,815	630	-	28,227	28,861	85,500	67,931	17,569	28,531
Termas, S.L.U.* LE Logistic Alovera III y	Leasing of property	Subsidiary	100	100	4	5,724	5,725	(2,935)	97	2,891	-	-	-	101
IV, S.L.U. LE Logistic Almussafes,	Leasing of property	Subsidiary	100	100	4	4,238	4,239	(2,185)	2,525	4,583	-	-	-	2,529
S.L.U. LE Retail Hiper	Leasing of property	Subsidiary	100	100	4	5,559	657	-	122,115	122,776	339,735	275,034	64,701	113,729
Ondara, S.L.U.* LE Offices Joan Miró 21,	Leasing of property	Subsidiary	100	100	4	6,081	5,496	-	13,794	19,294	-	-	-	13,799
S.L.U.* LE Retail Vidanova Parc,	Leasing of property	Subsidiary	100	100	4	373	(236)	-	22,796	22,564	59,687	47,209	12,478	24,068
S.L.U. LE Retail El Rosal, S.L.U.	Leasing of property	Subsidiary	100	100	3	(438)	(1,805)	-	23,246	21,444	110,210	71,761	38,449	32,067
LE Retail	Leasing of property	Subsidiary	100	100	4	3,310	3,261	(1,665)	(1)	1,599	-	-	-	4

Information on Group Companies 31 December 2018

				% of Participation			Thousands of Euros
Company	Activity	Type of entity	Direct	Total	Share capital	Operating profit/(loss)	Profit/(loss)	Dividends	Other equity	Total equity (a)	Market value (b)	Carrying amount (c)	Implicit capital gains (d=b-c)	Carrying amount of investment (e)
Galaria, S.L.U.
LE Retail Lagoh, S.L.U.*	The acquisition and development of properties for lease	Subsidiary	100	100	3	(3,036)	(3,184)	-	94,344	91,163	132,000	104,262	27,738	96,854
LE Retail Sagunto II, S.L.U.	The acquisition and development of properties for lease	Subsidiary	100	100	3	4	4	-	1,532	1,539	1,223	1,223	-	1,536
LE Retail Vistahermosa, S.L.U.*	Leasing of property	Subsidiary	100	100	3	413	(167)	-	20,169	20,005	50,540	42,903	7,637	20,345
Lar España Inversión Logística IV, S.L.U.	The acquisition and development of properties for lease	Subsidiary	100	100	3	7,676	5,575	(5,165)	(9)	404	307	307	-	111
LE Retail Villaverde, S.L.U.	Leasing of property	Subsidiary	100	100	3	3,161	3,054	(1,598)	1,651	3,110	-	-	-	1,653
LE Retail Anec Blau, S.L.U.*	Leasing of property	Subsidiary	100	100	3	1,025	1,025	(554)	77,989	78,463	97,060	78,745	18,315	78,785
LE Retail Albacenter, S.L.U.	Leasing of property	Subsidiary	100	100	3	220	220	-	30,638	30,861	44,960	31,993	12,967	30,734
LE Retail Txingudi, S.L.U.	Leasing of property	Subsidiary	100	100	3	(21)	(21)	-	30,637	30,619	37,500	30,640	6,860	30,761
LE Retail Las Huertas, S.L.U.	Leasing of property	Subsidiary	100	100	3	1	1	-	11,960	11,964	12,600	11,842	758	12,196
LE Offices Marcelo Spínola, S.L.U.	Leasing of property	Subsidiary	100	100	3	(2,158)	(2,158)	-	28,590	26,435	37,000	27,629	9,371	31,564
LE Retail Gran Vía de Vigo, S.A.U.*	Leasing of property	Subsidiary	100	100	502	2,430	226	-	21,831	22,559	173,000	106,947	66,053	53,932
LE Retail	Leasing of property	Subsidiary	100	100	7,204	2,151	1,199	(827)	14,617	22,193	83,410	63,110	20,300	34,780

Information on Group Companies 31 December 2018

				% of Participation	Thousands of Euros
Company	Activity	Type of entity	Direct	Total	Share capital	Operating profit/(loss)	Profit/(loss)	Dividends	Other equity	Total equity (a)	Market value (b)	Carrying amount (c)	Implicit capital gains (d=b-c)	Carrying amount of investment (e)
Abadía, S.L.U.*
LE Retail	Leasing of property Leasing of property	Subsidiary	100	100	3	346	346	(343)	13,929	13,935	17,734	14,427	3,307	14,735
Hipermercados I, S.L.U.
	Leasing of property
LE Retail Hipermercados	Leasing of property	Subsidiary	100	100	3	370	370	(317)	14,064	14,120	17,541	14,647	2,894	15,955
II, S.L.U.
LE Retail	Leasing of property	Subsidiary	100	100	3	262	262	(215)	12,803	12,853	17,749	13,284	4,465	14,643
Hipermercados III, S.L.U.
LE Retail Rivas,	Leasing of property	Subsidiary	100	100	3	422	(185)	-	25,593	25,411	67,500	52,586	14,914	33,361
S.L.U.*
					8,019	74,132	58,731	(34,063)	647,214	679,901	1,440,046	1,087,785	352,261	721,357

* Company audited by Deloitte, S.L.

All the companies are domiciled at Calle Rosario Pino 14-16, Madrid.

b) Joint venture

					% of Participation						Thousands of Euros
Company	Registered office	Activity	Auditor	Type of entity	Direct	Total	Share capital	Operating profit/(loss)	Profit/(loss)	Dividends	Other equity	Carrying amount of investment
Inmobiliaria Juan Bravo 3, S.L.	Rosario Pino 14- 16, Madrid	Property leasing and development	Deloitte	Associate	50	50	3,483	26,067	17,513	-	(3,151)	8,647

Management report for the period ended 31 December 2019

1 Position of the Company

1.1 Organisational structure and functional operation

The Company is a recent establishment with an externalised management structure. It has designated Grupo Lar Inversiones Inmobiliarias, S.A. as exclusive manager, a company that has more than forty years of experience in the property market and a long history of generating value through various property cycles in the last decades, and that has alliances with some of the most internationally renowned investors.

Strategic management, allocation of resources, risk management and corporate control, as well as accounting and financial reports are among the main responsibilities of the Company's Board of Directors.

Group companies, most of which are 100% owned by the Company, with the exception of IJB (50%), carry out their activity with the following types of assets:

Shopping centres: the rental of shopping centre and single-tenant commercial premises.

Offices: the rental of offices.

The Group implemented a plan to build up the value of assets in its portfolio in order to maximise shareholder returns from divesting in said assets

Logistics: the rental of logistics bays.

The Group implemented a plan to build up the value of assets in its portfolio in order to maximise shareholder returns from divesting in said assets.

Residential.

The Company's investment policy focuses mainly on the following:

On assets the company considers to be strategic assets, mainly commercial parks and shopping centres.
Investment opportunities in mid-sized assets that offer great management possibilities, avoiding those segments where competition may be greater.
Risk diversification, expanding throughout Spain mainly in shopping centre investments.

The company maintains a robust pipeline that offers it security as regards the achievement of its investment plans as forecast.

Management report for the period ended 31 December 2019

2 Development and business results

2.1 Introduction

At the 2019 reporting date, the Company's revenue amounted to EUR 71,813 thousand, which corresponded to returns from dividends received from investee companies, financial income from financing granted to same and returns from the disposal of equity instruments in accordance with their standing as holding companies.

The operating result before amortisations, provisions and interest (EBITDA, is calculated as the result of the operations, net of amortisation expenses) presents a positive result of EUR 69,423 thousand.

The negative financial result was EUR 4,764 thousand.

The Company's profit for the period amounts to EUR 61,111 thousand.

2.2 Other financial indicators

At 31 December 2019, the Company presents the following financial indicators:

Working capital (calculated as the difference between current assets and current liabilities) EUR 43,926 thousand (EUR 142,038 thousand at 31 December 2018).
Liquidity ratio (calculated as the ratio of current assets to current liabilities) 2.32 (3.16 at 31 December 2018).
Solvency ratio (calculated as non-current liabilities and equity divided by non-current assets 1.06 (1.20 at 31 December 2018).

These ratios represent particularly high values, indicating that the Company enjoys a sufficient level of liquidity and a high degree of safety margin in order to meet its payments.

The ROE ("Return on Equity"), which measures the Company's rate of return divided by its equity, is 9.23% (it was 10.67% as of 31 December 2018). This is calculated as the quotient of the profit for the last 12 months and the Company's net equity at 31 December 2019.

The ROA ("Return on Assets"), which measures the efficiency of the Company's total assets, regardless of the source of funding used, i.e. the capacity of a company's assets to generate profit, is 7.32% (8.29% as of 31 December 2018). This is calculated as the quotient of the profit for the last 12 months and the Company's total assets at 31 December 2019.

In accordance with the recommendations issued by the European Securities and Markets Authority (ESMA) regarding the calculation and determination of Alternative Performance Measures used by the Company's Management in taking financial and operational decisions, sections 3 and 6 of the "Full year report 2019", which was published on the same date as these Financial Statements and explanatory notes, state how the EPRA (European Public Real Estate Association) indicators are calculated and defined.

Management report for the period ended 31 December 2019

2.3 Matters regarding the environment and personnel

Environment

The Company takes measures to prevent, reduce and repair the damage caused to the environment by its activities. However, due to its nature, the Company's activity does not have a significant impact on the environment.

Personnel

At 31 December 2019 the Company has 3 employees (2 men and 1 woman). Said employees are classified as Senior Management. In the 2019 period the Company has had no employees with a 33% or greater disability.

3 Liquidity and capital resources

3.1 Liquidity and capital resources

In this sixth year of activity, the Company obtained liquidity mainly through:

Credit and funding lines with Bankinter (EUR 25,000 thousand, EURIBOR 12M + 1.20% with maturity 05/16/2020).
Divestments of assets and current accounts with Group companies.

3.2 Analysis of contractual obligations and off-balance-sheet transactions

The Company does not have any contractual obligations that imply an outflow of liquid resources at 31 December 2019 beyond those mentioned in point 3.1.

At 31 December 2019, the Company does not present off-balance-sheet transactions that have had, or are expected to have, a significant effect on the financial position of the Company, the expenditure structure, the operating result, liquidity, capital expenses or on own resources.

4 Main risks and uncertainties

The Company is exposed to a variety of risk factors arising from the nature of its business. The Company's Board of Directors is responsible for approving the risk management and control policy, and it assumes responsibility for identifying the Company's main risks and supervising the internal oversight systems; it is informed by the Audit and Oversight Committee. The Group's Risk Management and Control System identifies, groups, manages and control risks that could potentially affects said Group in the areas that make up the Group's corporate risk map, which is adequately reported in the Annual Corporate Governance Report.

5 Significant circumstances occurring after the close

No important circumstances arose after the reporting period other than those mentioned under post-closing events.

Management report for the period ended 31 December 2019

6 Information on the foreseeable evolution of the Company

After the investment volume carried out since March 2014, active property management capacity will be key in upcoming years.

This active management strategy will lead to an increase in current income and in the profitability with respect to the purchase price. All of this will be reflected in the greater value of the assets in our portfolio.

The Company will, however, continue to analyse any investment opportunities that may be attractive and thus continue to generate value for its shareholders.

Based on available information and the current business plans, we believe that the Company will be in a position to continue making progress in 2020 and in subsequent years.

7 R&D+i activities

Due to the inherent characteristics of the companies that make up the Company, and their activities and structure, the Company does not usually conduct any research, development and innovation initiatives.

8 Acquisition and disposal of treasury stock

The average selling price of treasury shares was EUR 7.77 per share in 2019 (EUR 8.33 in 2018). The result at 31 December 2019 amounted to 16 thousand euros (33 thousand euros at 31 December 2018) was recorded under Other Reserves on the balance sheet.

Management report for the period ended 31 December 2019

At of 31 December 2019 the share price was EUR 7.10.

As of 31 December 2019, the Parent Company holds a total of 103,820 shares, representing 0.1% of total issued shares.

On 10 June 2019, pursuant to the Board of Directors' resolution in 29 May 2019, the Parent Company reduced capital by EUR 6,506 thousand, corresponding to 3,252,820 shares of EUR 2 par value each and representing 3.5% of share capital. The capital reduction was charged against unrestricted reserves by appropriating to a capital redemption reserve an amount equal to the par value of the redeemed shares. This reserve will be restricted. The shares were redeemed using treasury shares, the value of which at the capital reduction date was EUR 24,743 thousand.

On 20 December 2019, pursuant to the Board of Directors' resolution in 19 December 2019, the Parent Company reduced capital by EUR 5,908 thousand, corresponding to 2,953,831 shares of EUR 2 par value each and representing 3.2% of share capital. The capital reduction was charged against unrestricted reserves by appropriating to a capital redemption reserve an amount equal to the par value of the redeemed shares. This reserve will be restricted. The shares were redeemed using treasury shares, the value of which at the capital reduction date was EUR 21,682 thousand.

9 Other relevant information

9.1 Stock exchange information

The initial share price at the start of the year was EUR 7.33 and the nominal value at year end was EUR 7.10. During 2019, the average price per share was EUR 7.46.

The issue of 621,337 shares with a nominal value of EUR 2 plus an issue premium of EUR 8.34 per share.

The Company does not currently have a credit rating from the principal international rating agencies.

9.2 Dividend policy

The total pay-out was EUR 72,600 thousand (after deducting the amount corresponding to treasury shares, which does not leave the Parent Company's equity and totals EUR 2,227 thousand in dividends charged to profit and EUR 173 thousand in dividends charged to the share premium), given the amount per share approved and shares outstanding at the time of approval by the General Shareholders' Meeting on 25 April 2019. The dividend pay-out was settled in full on 24 May

Management report for the period ended 31 December 2019

2019.

9.3 Average number of days payable outstanding to suppliers

The average number of days payable outstanding to suppliers is 18, complying with the maximum legal payment period applicable to the Company in the year 2019 according to Law 3/2004, of 29 December containing measures to combat late payments in commercial transactions and in accordance with the transitory provisions established in Law 15/2010, of 5 July.

10 Annual Corporate Governance Report

To the effects of Article 538 of the Spanish Companies Act, it is stated for the record that the 2019 Annual Corporate Governance Report forms part of this Director's Report.

11 Events after the reporting period

Preparation of accounts and management report for 2019 and statement of compliance of LAR ESPAÑA REAL ESTATE SOCIMI, S.A.

At their meeting held on 13 February 2020, pursuant to the requirements of Article 253 of the Revised Spanish Companies Act and Article 37 of the Spanish Code of Commerce, the Directors of Lar España Real Estate SOCIMI, S.A. (hereinafter the "Company" or "Lar España") drew up the financial statements and management report for the period ended 31 December 2019. The financial statements are incorporated based on the adjoined documents that precede this writ and are labelled on the adjoined folios of ordinary paper. All of said folios have been endorsed by the Vice-Secretary of the Board of Directors and this last sheet has been signed by all the members of the Board of Directors.

According to the provisions of Royal Decree 1362/2007, of 19 October, (Article 8.1 b) the undersigning directors of Lar España, hereby declare that:

To the best of their knowledge, the financial statement for the year ended 31 December 2019, prepared in accordance with applicable accounting principles, present fairly the equity, financial position and results of the Company and that the management report accompanying the financial statements includes a reliable analysis of the development and business results and position of the Company together with a description of the principal risks and uncertainties that it faces.

Signatories:

Mr José Luis del Valle Doblado (Chairman) Mr. José Luis del Valle Doblado (on behalf of Mr. Alec Emmott)

Mr Roger Maxwell Cooke Ms Leticia Iglesias Herraiz

Mr Miguel Pereda Espeso Mr José Luis del Valle Doblado (on behalf of Mr Laurent Luccioni)

Ms Isabel Aguilera Navarro

Madrid, 13 February 2020

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----------------------------------------------------	--------------

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^Y ^e ^s ^N ^o ^X

	d i f f e r e n t t o a r t . 1 9 3 q u o r u m t h e p a n i s h o r p o r a t e o f S C n t e r p r i s e s f o r v o t i n g c t o n E A g e n e r a l r e s o l u t i o n s	d i f f e r e n t t o a r t . 1 9 4 q u o r u m t h e p a n i s h o r p o r a t e o f S C n t e r p r i s e s f o r v o t i n g c t o n E A s p e c i a l a t t e r s i n c l u d e d i n a r t . m 1 9 4
r e q u i r e d u o r u a t Q m f i r s t c a l l
r e q u i r e d u o r u a t Q m c a l l s e c o n d

^Y ^e ^s ^N ^o ^X

p a n i s h S t h e m 1 9 4 . 1 % s t i p u l a t e d f o r r e s o l u t i o n r a t i f i c a t i o n	o r p o r a t e n t e r p r i s e s f o r c t C E A a t t e r s p r o v i d e d f o r i n a r t i c l e t h e r e o f	a j o r i t y m
t h e d i f f e r e n c e s e s c r i e D b

	t t e n d a n c e d a t a A % % %
e n e r a l G	a t t e n d i n g i n	c o r r e s p o n d e n c e a t t e n d i n g		v o t i n g	o t a l T
m d a t e e e t i n g	p e r s o n	y p r o x y b	o t e s c a s t V	t h e r O
1 9 / 0 4 / 2 0 1 8	5 . 8 9 3	6 8 . 5 1	e l e c t r o n i c a l l y 0 . 0 0 5	0	7 4 . 4 1 5
2 5 / 0 4 / 2 0 1 9	1 2 . 8 2 9	6 4 . 0 0	0 . 0 0 5	0 . 2 7 8	7 7 . 1 1 1

^Y ^e ^s ^N ^o ^X

^B . ⁶ ^S ^e ^c t i o ⁿ ^r ^e ^p ^e ^a l e ^d
^B . ⁷ ^I ⁿ ^d i c ^a t e t h ^e ^a ^d ^d ^r ^e ^s ^s ^a ⁿ ^d ^m ^o ^d ^e ^o ^f ^a ^c ^c ^e ^s ^s i n ^g ^c ^o ^r ^p ^o ^r ^a t e ^g ^o ^v ^e ^r ⁿ ^a ⁿ ^c ^e ^c ^o ⁿ t e ⁿ ^t ^o ⁿ ^y ^o ^u ^r ^c ^o ^m ^p ^a ⁿ ^y ' ^s ^w ^e ^b ^s i t e ^a ^s ^w ^e l l ^a ^s ^o t h ^e ^r ^g ^e ⁿ ^e ^r ^a ^l ^m ^e ^e t i n ^g ^r ^e l a t e ^d ^d i s ^c l o ^s ^u ^r ^e ^s ^w ^h i c ^h ^m ^u ^s ^t ^b ^e ^p ^r ^o ^v i d ^e ^d t o ^s ^h ^a ^r ^e ^h ^o l d ^e ^r ^s ^o ⁿ t h ^e ^c ^o ^r ^p ^o ^r ^a t e ^w ^e ^b ^s i t e .

^h t t p ^s : / / w ^w ^w . l a r e ^s ^p ^a ⁿ ^a . ^c ^o ^m / ^g ^o ^b i e r n ^o ^ï ^c ^o r p ^o r a t i ^v ^o / ^j ^u ⁿ t a ^ï ^g ^e ⁿ ^e r a l ï o r d i n ^a r i a ï 2 ⁰ 1 9

^C ^O ^R ^P ^O ^R ^A ^T ^E ^G ^O ^V ^E ^R ^N ^A ^N ^C ^E ^S ^T ^R ^U ^C ^T ^U ^R ^E

^C . 1 ^o ^a ^r ^d ^o ^f ^D i r ^e ^c t o ^r ^s

^C . 1 . 1 . ^S t a t e t h ^e ^m ^a ^x ⁱ ^m ^u ^m ^a ⁿ ^d ^m i n ⁱ ^m ^u ^m ⁿ ^u ^m ^b ^e ^r ^o ^f ^d i r ^e ^c t o ^r ^s ^s t i p ^u l a t e ^d i n t h ^e ^c ^o ^m ^p ^a ⁿ ^y ' s ^b ^y l a ^w ^s :

d i r e c t o r s a x i u n u e r o f M m m m b	1 5
i n i d i r e c t o r s u n u e r o f M m m m b	5

^C . 1 . 2 . ^F i l l i n t h ^e f o l l o ^w i n ^g t a ^b l e ^w i t h t h ^e ^b ^o ^a ^r ^d ^m ^e ^m ^b ^e ^r ^s ' ^d ^e t a i l s :

N a e o r c o p a n y m m d i r e c t o r n a e o f m	i r e c t o r D c l a s s	o s i t i o n o n P t h e o a r d b	a t e o f f i r s t D m a p p o i n t e n t	a t e o f l a s t D m a p p o i n t e n t	l e c t i o n E p r o c e d u r e
a l l e J o s é L u i s d e l V	I n d e p e n d e n t	h a i r m C a n	0 5 / 0 2 / 2 0 1 4	2 9 / 0 5 / 2 0 1 7	o t a p p l i c a b l e N
l e c o t t A E m m	I n d e p e n d e n t	i r e c t o r D	0 5 / 0 2 / 2 0 1 4	2 9 / 0 5 / 2 0 1 7	o t a p p l i c a b l e N
R o g e r C o o k e	I n d e p e n d e n t	i r e c t o r D	0 5 / 0 2 / 2 0 1 4	2 9 / 0 5 / 2 0 1 7	o t a p p l i c a b l e N
i g u e l P e r e d a M	P r o p r i e t a r y	i r e c t o r D	0 5 / 0 2 / 2 0 1 4	2 9 / 0 5 / 2 0 1 7	o t a p p l i c a b l e N
L a u r e n t L u c c i o n i	P r o p r i e t a r y	i r e c t o r D	2 9 / 0 5 / 2 0 1 7	2 9 / 0 5 / 2 0 1 7	o t a p p l i c a b l e N
g u i l e r a I s a b e l A	I n d e p e n d e n t	i r e c t o r D	2 9 / 0 5 / 2 0 1 7	1 9 / 0 4 / 2 0 1 8	o o p t i o n C r a t i f i e d t h e b y o a r d B
L e t i c i a I g l e s i a s	I n d e p e n d e n t	i r e c t o r D	1 6 / 1 0 / 2 0 1 8	2 5 / 0 4 / 2 0 1 9	o o p t i o n C r a t i f i e d t h e b y o a r d B

^T ^o t a ^l ⁿ ^u ^m ^b ^e ^r ^o ^f ^d i r ^e ^c t o ^r ^s ⁷

^I ⁿ ^d i c ^a t e ^a ⁿ ^y ^m ^e ^m ^b ^e ^r ^s ^w ^h ^o ^s t e ^p ^p ^e ^d ^d ^o ^w ⁿ ^d ^u ^r i n ^g t h ^e ^r ^e ^p ^o ^r t i n ^g ^p ^e ^r i o ^d :

^T ^h ^e r e ^h ^a ^v ^e ^b ^e ^e ⁿ ⁿ ^o ^c ^e ^s ^s ^a t i o ⁿ ^s i n t h ^e ^p ^e r i o ^d .

^C . 1 . 3 . ^F i l l i n t h ^e f o l l o ^w i n ^g t a ^b l e ^s ^o ⁿ t h ^e ^v ^a ^r i o ^u ^s ^c l a ^s ^s ^e ^s ^o ^f ^d i r ^e ^c t o ^r ^s ^h i p ^s :

^E ^X ^E ^C ^T ^I ^V ^E ^D ^I ^R ^E ^C ^T ^O ^R ^S

d i r e c t o r N a e o r c o p a n y n a e o f m m m	o s i t i o n t h e a t c o p a n y P m

T o t a l n u m o f e x e c u t i v e d i r e c t o r s b e r
o f t o t a l b o a r d % m e m b e r s

^E ^X ^T ^E ^R ^N ^A ^L ^P ^R ^O ^P ^R ^I ^E ^T ^A ^R ^Y ^D ^I ^R ^E ^C ^T ^O ^R ^S

N a e o r c o p a n y n a e m m m d i r e c t o r o f	t h e s i g n i f i c a n t s h a r e h o l d e r N a e o r c o p a n y n a e o f m m m r e p r e s e n t e d p r o p o s i n g t h e a p p o i n t o r e n t m
i g u e l P e r e d a M E s p e s o	r u p o I n v e r s i o n e s I n m o b i l i a r i a s , S . A G L a r
. L a u r e n t L u c c i o n i D	I I L U X X I I , S . A . R . L . ( P I M L V S C O )

o t a l n u p r o p r i e t a r y d i r e c t o r s e r o f T m b %	2
o f t o t a l o a r d e e r s b m m b	2 8 . 5 7 %

^N ^a ^m ^e ^o ^r ^c ^o ^m ^p ^a ⁿ ^y ⁿ ^a ^m ^e ^o ^f ^d i r ^e ^c t o ^r ^B ^a ^c ^k ^g ^r ^o ^u ⁿ ^d ^M r . ^J ^o ^s ^é ^L ^u ⁱ ^s ^d ^e ^l ^V ^a l l e ^M r . ^J ^o ^s ^é ^L ^u ⁱ ^s ^d ^e ^l ^V ^a l l e ^D ^o ^b l a ^d ^o ⁱ ^s ^a ⁿ i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^e ^x t e r n ^a ^l ^d i r e ^c t o ^r ^o ^f ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^a ⁿ ^d ^C ^h ^a i r m ^a ⁿ ^o ^f t h ^e ^B ^o ^a r d . ^H ^e ^w ^a ^s ^a ^p ^p ^o i n t e ^d ^d i r e ^c t o ^r ^o ^f ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^b ^y ^G r u ^p ^o ^L ^a ^r I n ^v ^e ^r ^s i o ⁿ ^e ^s I n ^m ^o ^b i l i a r i a ^s , ^S . A . , t h ^e t h ^e ⁿ ^s ^o l e ^s ^h ^a r e ^h ^o l d ^e ^r ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y , t h ^e ^F ^e ^b r u ^a ^r ^y ⁵ , ² ⁰ 1 4 , ^a ⁿ ^d r e ^ï ^e l e ^c t e ^d ^a ^s ^a ⁿ i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^e ^x t e r n ^a ^l ^d i r e ^c t o r , ^a ^t t h ^e ^p r o ^p ^o ^s ^a ^l ^o ^f t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^a ⁿ ^d ^f ^o l l o ^w i n ^g ^a ^f ^a ^v ^o r a ^b l e r e ^p ^o r t ^f r o ^m t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s , ^b ^y t h ^e ^O r d i n ^a ^r ^y ^G ^e ⁿ ^e r a ^l ^S ^h ^a r e ^h ^o l d ^e ^r ^s ^M ^e ^e t i n ^g ^o ^f ^M ^a ^y ² ⁹ , ² ⁰ 1 7 . ^O ⁿ ^F ^e ^b r u ^a ^r ^y ⁶ , ² ⁰ 1 4 t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^a ^p ^p ^o i n t e ^d ^h i m ^a ^s ^C ^h ^a i r m ^a ⁿ ^a ⁿ ^d ^m ^e ^m ^b ^e ^r ^a ⁿ ^d ^C ^h ^a i r m ^a ⁿ ^o ^f t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e , ^a ^p ^o ^s i t i o ⁿ ^h ^e ^h ^e l d ^u ⁿ t i l ^M ^a ^y ² ⁹ , ² ⁰ 1 7 , ^d ^a t e ^o ⁿ ^w ^h ⁱ ^c ^h ^h ^e ^s ^u ^b ^m i t t e ^d t o t h ^e ^B ^o ^a r d ^h ⁱ ^s r e ^s ⁱ ^g ⁿ ^a t i o ⁿ ^a ^s ^C ^h ^a i r m ^a ⁿ ^o ^f t h ^e ^C ^o ^m ^m i t t e ^e , ^s i n ^c ^e t h ^e ⁿ ^V ^o ^c ^a ^l ^o ^f i t . ^M r . ^d ^e ^l ^V ^a l l e ^h ^a ^s ^e ^x t e ⁿ ^s ⁱ ^v ^e ^e ^x ^p ^e r i e ⁿ ^c ^e i n t h ^e ^b ^a ⁿ ^k i n ^g ^a ⁿ ^d ^e ⁿ ^e ^r ^g ^y ^s ^e ^c t o ^r ^s . ^F r o ^m 1 9 ⁸ ⁸ t o ² ⁰ ⁰ ² ^h ^e ^h ^e l d ^v ^a r i o ^u ^s ^p ^o ^s i t i o ⁿ ^s ^a ^t ^B ^a ⁿ ^c ^o ^S ^a ⁿ t a ⁿ ^d ^e r , ^o ⁿ ^e ^o ^f t h ^e l a ^r ^g ^e ^s ^t ^f i n ^a ⁿ ^c i a ^l i n ^s t i t u t i o ⁿ ^s i n ^S ^p ^a i n . I n 1 9 ⁹ ⁹ ^h ^e ^w ^a ^s ^a ^p ^p ^o i n t e ^d ^S ^e ⁿ i o ^r ^E ^x ^e ^c ^u t i ^v ^e ^V ⁱ ^c ^e ^P r e ^s i d ^e ⁿ ^t ^a ⁿ ^d ^C ^F ^O ^o ^f t h ^e ^b ^a ⁿ ^k ( 1 9 ⁹ ⁹ ï 2 ⁰ ⁰ ² ) . ^S ^u ^b ^s ^e ^q ^u ^e ⁿ t l ^y ^h ^e ^w ^a ^s ^C ^h i e ^f ^S t r a t e ^g ^y ^a ⁿ ^d ^D ^e ^v ^e l o ^p ^m ^e ⁿ ^t ^O f f ⁱ ^c ^e ^r ^o ^f ^I ^b ^e r d r o l a , ^o ⁿ ^e ^o ^f t h ^e ^m ^a i n ^S ^p ^a ⁿ ⁱ ^s ^h ^e ⁿ ^e ^r ^g ^y ^c ^o ^m ^p ^a ⁿ i e ^s ( ² ⁰ ⁰ ² ï 2 ⁰ ⁰ ⁸ ) , ^C ^h i e ^f ^E ^x ^e ^c ^u t i ^v ^e ^O f f ⁱ ^c ^e ^r ^o ^f ^S ^c ^o t t i ^s ^h ^P ^o ^w ^e ^r ( ² ⁰ ⁰ ⁷ ï 2 ⁰ ⁰ ⁸ ) , ^C ^h i e ^f ^S t r a t e ^g ^y ^a ⁿ ^d ^R ^e ^s ^e ^a ^r ^c ^h ^O f f ⁱ ^c ^e ^r ^o ^f ^I ^b ^e r d r o l a ( ² ⁰ ⁰ ⁸ ^ï ² ⁰ 1 0 ) ^a ⁿ ^d ^A ^d ^v ⁱ ^s ^o ^r t o t h ^e ^P r e ^s i d ^e ⁿ ^t ^f r o ^m t h ^e ^w i n ^d t u ^r ^b i n ^e ^m ^a ⁿ ^u ^f ^a ^c t u r e ^r ^G ^a ^m ^e ^s ^a ( ² ⁰ ¹ ¹ ï 2 ⁰ 1 2 ) . ^C ^u r r e ⁿ t l ^y , ^M r . ^d ^e ^l ^V ^a l l e ⁱ ^s ^W ⁱ ^z i n ^k ^B ^a ⁿ ^k ^A ^d ^m i n ⁱ ^s t r a t o ^r ^B ^o ^a r d ^C ^h ^a i r m ^a ⁿ ; ^D i r e ^c t o ^r ^o ^f ^A ^b ^e ⁿ ^g ^o ^a , ^S . A . , ^w ^h ⁱ ^c ^h ^p r o ^v i d ^e ^s i n ⁿ ^o ^v ^a t i ^v ^e t e ^c ^h ⁿ ^o l o ^g ⁱ ^c ^a ^l ^s ^o l u t i o ⁿ ^s ^f ^o ^r ^s ^u ^s t a i n ^a ^b l e ^d ^e ^v ^e l o ^p ^m ^e ⁿ ^t ; ^D i r e ^c t o ^r ^o ^f t h ^e i n ^s ^u r a ⁿ ^c ^e ^g r o ^u ^p ^O ^c ^a ^s ^o ^a ⁿ ^d ^C ^o ^u ⁿ ^s ^e l o ^r ^o ^f t h ^e I n ^s t i t u t o ^d ^e ^C ^o ⁿ ^s ^e ^j ^e r o ^s ^ï ^A ^d ^m i n ⁱ ^s t r a ^d ^o r e ^s . ^M r . ^J ^o ^s ^é ^L ^u ⁱ ^s ⁱ ^s ^a ^M i n i n ^g ^E ⁿ ^g i n ^e ^e ^r ^f r o ^m t h ^e ^P ^o ^l ^y t e ^c ^h ⁿ ⁱ ^c ^U ⁿ ⁱ ^v ^e ^r ^s i t ^y ( ^M ^a ^d r i d , ^S ^p ^a i n ) , ⁿ ^u ^m ^b ^e ^r ^o ⁿ ^e ^o ^f ^h ⁱ ^s ^p r o ^m ^o t i o ⁿ , ^a ⁿ ^d ^M ^a ^s t e ^r i n ^S ^c i e ⁿ ^c ^e ^a ⁿ ^d ^N ^u ^c l e ^a ^r ^E ⁿ ^g i n ^e ^e ^r ^f r o ^m t h ^e ^M ^a ^s ^s ^a ^c ^h ^u ^s ^e t t ^s I n ^s t i t u t e ^o ^f ^T ^e ^c ^h ⁿ ^o l o ^g ^y ( ^C ^a ^m ^b r i d ^g ^e , ^U ^S ^A ) . ^F ^u r t h ^e r m ^o r e , ^M r . ^d ^e ^l ^V ^a l l e ^h ^o l d ^s ^a ^M ^B ^A ^w i t h ^H ⁱ ^g ^h ^D ⁱ ^s t i n ^c t i o ⁿ ^f r o ^m ^H ^a ^r ^v ^a r d ^B ^u ^s i n ^e ^s ^s ^S ^c ^h ^o ^o ^l ( ^B ^o ^s t o ⁿ , ^U ^S ^A ) . ^M ^r ^s . ^L ^e t i ^c i a ^I ^g l e ^s i a ^s ^L ^e t i ^c i a ^I ^g l e ^s i a ^s ^H ^e r r a ⁱ ^z ⁱ ^s ^a ⁿ i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^e ^x t e r n ^a ^l ^d i r e ^c t o ^r ^o ^f ^L ^a ^r ^E ^s ^p ^a ^ñ ^a . ^S ^h ^e ^w ^a ^s ^a ^p ^p ^o i n t e ^d ^d i r e ^c t o ^r ^o ^f ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ^b ^y t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y , ^b ^y t h ^e ^c ^o ^ï ^o ^p t a t i o ⁿ ^s ^y ^s t e ^m , ^a ^t i t ^s ^m ^e ^e t i n ^g ^o ^f ^O ^c t o ^b ^e ^r 1 6 , ² ⁰ 1 8 , ^d ^a t e ^o ⁿ ^w ^h ⁱ ^c ^h t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^a ^l ^s ^o ^a ^p ^p ^o i n t e ^d ^h ^e ^r ^a ^s ^a ^m ^e ^m ^b ^e ^r ^o ^f t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e ^a ⁿ ^d

^E ^X ^T ^E ^R ^N ^A ^L ^I ^N ^D ^E ^P ^E ^N ^D ^E ^N ^T ^D ^I ^R ^E ^C ^T ^O ^R ^S

	P r e s i d e n t o f t h e e , b e i n g r a t i f i e d a p p o i n t m t h e e n e r a l s a m h i s e n t b y G e e t i n g S h a r e h o l d e r s h e l d p r i l 2 5 , 2 0 1 9 . M o f o n A
	L e t i c i a I g l e s i a s e x t e n s i v e e x p e r i e n c e i n r e g u l a t i o n M r s . h a s a n d s u p e r v i s i o n s e c u r i t i e s a r k e t s f i n a n c i a l o f m a n d s e r v i c e s . H e b e g a n c a r e e r i n 1 9 8 7 i n t h e u d i t i v i s i o n r t h u r h i s A D o f A A n d e r s e n . e t w 1 9 8 9 d e v e l o p e d p r o f e s s i o n a l c a r e e r i n t h e B e e n a n d 2 0 0 7 , h e h i s a t i o n a l S e c u r i t i e s a r k e t i s s i o n F r o m t o ( C ) N M C o m m N M V 2 0 0 7 1 3 t h e o r n I n s t i t u t e S p a i n 2 0 h e w a s C E O a t S w A c c o u n t C e n s u s o f I C b e t w 1 3 1 7 i n d e p e n d e n t ( J C E ) A l s o , e e n 2 0 a n d 2 0 s h e w a s a n d i r e c t o r t h e o a r d i r e c t o r s a r e o s t r u m o f B o f D o f B a n c o M N ( B M N ) , e l l a s t h e E x e c u t i v e i t t e e , P r e s i d e n t t h e a s w a m e m b e r o f C o m m o f l o b a l i s s i o n t h e u d i t i t t e e . G R i s k C o m m a n d a m e m b e r o f A C o m m u r i n g 1 7 1 8 i n d e p e n d e n t d i r e c t o r D 2 0 a n d 2 0 h e s e r v e d a s a n a t S e r v i c i o s F i n a n c i e r o s , E F C e l l a s h a i r m o f t h e J o i n t A b a n c a , a s w C a n u d i t a n d i t t e e . S i n c e 1 0 8 A R i s k C o m m M a y 2 h e h a s b e e n a m e m b e r t h e o a r d i r e c t o r s o r p o r a c i ó n a n c a r i a , o f B o f D o f A b a n c a C B h a i r m o f t h e u d i t a n d p l i a n c e i t t e e C a n A C o m C o m m a n d a m e m b e r o f t h e p r e h e n s i v e i t t e e . S i n c e p r i l 1 9 , C o m R i s k C o m m A 2 0 s h e i s I n d e p e n d e n t i r e c t o r h a i r m t h e u d i t i t t e e D a n d C a n o f A C o m m o f E , S . A A E N A S M
	r s . L e t i c i a d e g r e e i n u s i n e s s A i n i s t r a t i o n M h a s a E c o n o m i c s a n d B d m f r o m t h e n i v e r s i d a d P o n t i f i c i a i l l a s I C U d e C o m ( A D E ) H e i s a t h e f f i c i a l e g i s t r y u d i t o r s S p a i n ( R ) m e m b e r o f O R o f A o f O A C , P a t r o n I S S p e c i a l p l o y m e n t e r e l l o f F u n d a c i ó n P R O D E m e n t C a s w b e r o f t h e o a r d i r e c t o r s o f t h e I C u s i n e s s l u b . a s a m e m B o f D A D E B C
r . A l e c o t t M E m m	r . A l e c o t t i s i n d e p e n d e n t e x t e r n a l d i r e c t o r o f L a r M E m m a n E s p a ñ a . a p p o i n t e d d i r e c t o r r u p o I n v e r s i o n e s H e w a s o f L a r E s p a ñ a b y G L a r I n m o b i l i a r i a s t h e t h e n s o l e s h a r e h o l d e r t h e S A , o f C o m p a n y , o n F e b r u a r y 1 4 r e ï e l e c t e d i n d e p e n d e n t e x t e r n a l d i r e c t o r , a t t h e 5 , 2 0 a n d p r o p o s a l t h e p p o i n t m u n e r a t i o n i t t e e o f A e n t s a n d R e m C o m m a n d a f t e r f a v o r a b l e r e p o r t f r o m t h e o a r d i r e c t o r s , b y t h e o r d i n a r y a B o f D e n e r a l M e e t i n g s h a r e h o l d e r s G o f o f 1 7 . o a r d i r e c t o r s t h e a p p o i n t e d M a y 2 9 , 2 0 T h e B o f D o f C o m p a n y h i m b e r o f t h e p p o i n t m u n e r a t i o n i t t e e a s a m e m A e n t s a n d R e m C o m m F e b r u a r y 1 4 . o n 6 , 2 0
	r . A l e c o t t h a s b r o a d p r o f e s s i o n a l c a r e e r i n r e a l e s t a t e l i s t e d M E m m a u n l i s t e d i n E u r o p e r e s i d e s i n P a r i s . o r k e d a n d a n d H e w a s C E O F o n c i è r e b e t w 1 9 9 7 ( ) ( S F L ) C E O o f S o c i é t é L y o n n a i s e e e n a n d s u b s e q u e n t l y e x e c u t i v e t o u n t i l 2 0 1 2 . 2 0 0 7 , a n d a s a n a d v i s o r S F L
	c u r r e n t l y i r e c t o r o f E u r o p r o p e r t y o n s u l t i n g , a n d s i n c e H e i s D C 2 0 1 1 i r e c t o r S . A E u r o p r o p e r t y ( o n h e i s D o f C e G e R E A L b e h a l f o f o n s u l t i n g t h e i t t e e C ) H e i s a l s o a m e m b e r o f a d v i s o r y c o m m o f e i n b e r g e a l E s t a t e P a r t n e r s I / I I ) W R ( W R E P . H e h a s b e e n a m e m b e r o f t h e o y a l I n s t i t u t i o n h a r t e r e d I C s i n c e 1 9 7 1 . ( M ) R o f C S u r v e y o r s R S f r o m T r i n i t y o l l e g e b r i d g e , U n i t e d i n g d o m ( C ) H e h a s a n M A C a m K

r . R M o g e r M . C o o k e	r . e l l i n d e p e n d e n t e x t e r n a l M R o g e r M a x w C o o k e M B E i s a n d i r e c t o r o f L a r E s p a ñ a . H a p p o i n t e d d i r e c t o r o f L a r E s p a ñ a e w a s b y r u p o I n v e r s i o n e s I n m o b i l i a r i a s , t h e t h e n s o l e s h a r e h o l d e r G L a r S A t h e F e b r u a r y 1 4 r e ï e l e c t e d i n d e p e n d e n t o f C o m p a n y , o n 5 , 2 0 a n d e x t e r n a l d i r e c t o r , t h e p r o p o s a l t h e p p o i n t m a t o f A e n t s a n d u n e r a t i o n i t t e e a f t e r f a v o r a b l e r e p o r t f r o m t h e R e m C o m m a n d a o a r d i r e c t o r s , t h e o r d i n a r y e n e r a l e e t i n g B o f D b y G M o f s h a r e h o l d e r s 1 7 . o a r d i r e c t o r s t h e o n M a y 2 9 , 2 0 T h e B o f D o f a p p o i n t e d h i m h a i r m t h e C o m p a n y a s m e m b e r a n d C a n o f p p o i n t m u n e r a t i o n i t t e e F e b r u a r y 1 4 . A e n t s a n d R e m C o m m o n 6 , 2 0
	r . R p r o f e s s i o n a l w i t h o r e t h a n M o g e r M . C o o k e i s a m 3 0 y e a r s o f e x p e r i e n c e i n r e a l e s t a t e . I n 1 9 8 0 j o i n e d t h e o f f i c e h e L o n d o n o f a k e f i e l d , w h e r e p a r t i c i p a t e d i n t h e d r a f t i n g o f t h e C u s h m a n & W h e v a l u a t i o n s t a n d a r d s . F r o m 1 9 9 5 u n t i l t h e 1 3 ( R e d B o o k ) e n d o f 2 0 h e l d t h e p o s i t i o n a k e f i e l d S p a i n , h e o f C E O o f C u s h m a n & W p l a c i n g t h e i n l e a d i n g p o s i t i o n i n t h e s e c t o r . c o m p a n y a
	I n 1 7 , r . a r d e d E l i z a b e t h I I i t h 2 0 M R o g e r w a s a w b y Q u e e n w a n t o r i t i s h p a n i e s i n S p a i n t o n g l o ï M B E f o r h i s s e r v i c e s B c o m a n d A t r a d e i n v e s t m e n t . S p a n i s h a n d
	h o l d s d e g r e e i n E s t a t e S u r v e y i n g f r o m T r e n t D R o g e r a U r b a n P o l y t e c h n i c n i v e r s i t y o t t i n g h a m n i t e d i n g d o m ( ) U N , U K a n d i s c u r r e n t l y b e r o f t h e o y a l I n s t i t u t i o n h a r t e r e d a m e m R o f C S u r v e y o r s I C n t i l 1 6 , c h a i r e d t h e r i t i s h ( F R S ) U M a y 2 0 h e B C h a m b e r o f i n S p a i n . s i n c e S e p t e m 1 7 , r . C o m m e r c e A l s o , b e r 2 0 M R o g e r e l l i s C h a i r m o f t h e E d i t o r i a l B o a r d o f I b e r i a n P r o p e r t y M a x w a n a n d s i n c e h a i r m I C i n S p a i n . J a n u a r y 2 0 2 0 i s C a n o f R S
g u i l e r a M r s . I s a b e l A	g u i l e r a a v a r r o i n d e p e n d e n t e x t e r n a l d i r e c t o r o f M r s . I s a b e l A N i s a n a s a p p o i n t e d d i r e c t o r o f L a r E s p a ñ a t h e o a r d L a r E s p a ñ a . S h e w b y B i r e c t o r s t h e t h e c o ï o p t a t i o n s y s t e m i t s o f D o f C o m p a n y , b y , a t e e t i n g 1 7 , d a t e t h e o a r d i r e c t o r s m o n M a y 2 9 , 2 0 o n w h i c h B o f D a p p o i n t e d b e r o f t h e u d i t a n d o n t r o l C i t t e e a l s o h e r a s a m e m A C o m m a p p o i n t m b e i n g r a t i f i e d t h e e n e r a l e e t i n g , h i s e n t b y G M o f S h a r e h o l d e r s h e l d p r i l 1 9 , 2 0 1 8 . o n A
	g u i l e r a d e v e l o p e d p r o f e s s i o n a l c a r e e r i n M r s . I s a b e l A h a s h e r d i f f e r e n t p a n i e s i n v a r i o u s s e c t o r s P r e s i d e n t c o m a n d h a s b e e n o f S p a i n P o r t u g a l e n e r a l E l e c t r i c , G e n e r a l i r e c t o r i n S p a i n a n d o f G D P o r t u g a l o f G o o g l e , C h i e f O p e r a t i n g f f i c e r o f t h e o t e l e s a n d O N H H r o u p , C h i e f E x e c u t i v e f f i c e r S p a i n , I t a l y P o r t u g a l f r o m G O f o r a n d e l l C p u t e r o r p o r a t i o n . H p a r t o f t h e o a r d D o m C e h a s a l s o b e e n B o f i r e c t o r s v a r i o u s p a n i e s I n d r a S i s t e m a r e D o f c o m s u c h a s a s , M o s t r u m S p a i n , L a u r e a t e I n c r o u p . D N B a n k , A e g o n o r E g a s a G o ñ a g u i l e r a c u r r e n t l y d i r e c t o r r u p o I s a b e l A i s a o f G C e m e x , B a n c a F a r m a f a c t o r i n g , i g h t e c h O r y z o n G e n o m i c s , H P S ( H P a y m e n t S y s t e m a k i n g S c i e n c e . s ) a n d M
	d e g r e e i n r c h i t e c t u r e , u i l d i n g M r s . I s a b e l h a s a A B a n d U r b a n P l a n n i n g f r o m t h e r c h i t e c t u r e i n H i g h e r T e c h n i c a l S c h o o l o f A S e v i l l e , p l e t e d t h e a s t e r ' s e g r e e i n e r c i a l h a s c o m M D C o m m a r k e t i n g a t I E , t h e I E S E e n e r a l M M a n a g e m e n t a n d M G a n a g e m e n t P r o g r a m t h e P r o g r a m S e n i o r u s i n e s s a n d f o r B M a n a g e m e n t a n d e a d i n g I n s t i t u t i o n s t h e T e l m I n s t i t u t e . S h e c u r r e n t l y L o f S a n o i s a n s s o c i a t e P r o f e s s o r S t r a t e g y I n n o v a t i o n A a t E S A D E a n d a a n d o n s u l t a n t . C

o t a l n u o f i n d e p e n d e n t d i r e c t o r s e r T m b %	5
t o t a l o f o a r d e e r s b m m b	1 . 4 3 % 7

N a e o r c o p a n y n a e o f m m m d i r e c t o r	e s c r i p t i o n t h e r e l a t i o n s h i p o f D	s t a n t i a t e d s t a t e u e n t S b m

^O ^T ^H ^E ^R ^E ^X ^T ^E ^R ^N ^A ^L ^D ^I ^R ^E ^C ^T ^O ^R ^S

N a e o r c o p a n y n a e o f m m m d i r e c t o r	e a s o n s R	e l a t e d p a n y , o f f i c e r c o R m s h a r e h o l d e r o r

o t a l n u o f o t h e r e x t e r n a l d i r e c t o r s e r T m b %
t o t a l o f e e r s m m b

^L i s ^t ^a ⁿ ^y ^c ^h ^a ⁿ ^g ^e ^s i n ^d i r ^e ^c t o ^r ^c l a ^s ^s i f i c ^a t i o ⁿ ^d ^u ^r i n ^g t h ^e ^r ^e ^p ^o ^r t i n ^g ^p ^e ^r i o ^d :

N a e o r c o p a n y n a e o f m m m d i r e c t o r	a t e o f c h a n g e D	r e v i o u s c l a s s o f P d i r e c t o r s h i p	u r r e n t c l a s s C d i r e c t o r s h i p o f

	f e a l e d i r e c t o r s N u e r o f m b m			d i r e c t o r s h i p c a t e g o r y o f e a c h
	2 0 1 9	2 0 1 8	2 0 1 7	2 0 1 6	2 0 1 9	2 0 1 8	2 0 1 7	2 0 1 6
x e c u t i v e E	0	0	0	0	0	0	0	0
r o p r i e t a r y P	0	0	0	0	0	0	0	0
n d e p e n d e n t I	2	2	1	0	4 0 %	4 0 %	2 0 %	0
t h e r e x t e r n a l O	0	0	0	0	0	0	0	0
o t a l : T	2	2	1	0	2 9 %	2 9 %	1 4 %	0

^C . 1 . 5 ^O ^u t l i n ^e t h ^e ^m ^e ^a ^s ^u ^r ^e ^s t a ^k ^e ⁿ , i f ^a ⁿ ^y , t o ^e ⁿ ^d ^e ^a ^v ^o ^u ^r t o i n ^c l u ^d ^e ^e ⁿ ^o ^u ^g ^h ^w ^o ^m ^e ⁿ ^o ⁿ t h ^e ^b ^o ^a ^r ^d t o ^a ^c ^h i e ^v ^e ^b ^a l a ⁿ ^c ^e ^d ^g ^e ⁿ ^d ^e ^r ^r ^e ^p ^r ^e ^s ^e ⁿ t a t i o ⁿ .

^C . 1 . 6 ^I ⁿ ^d i c ^a t e ^w ^h ^e t h ^e ^r t h ^e ⁿ ^o ^m i n ^a t i o ⁿ ^c ^o ^m ^m i t t e ^e ^h ^a ^s t a ^k ^e ⁿ ^a ⁿ ^y ^m ^e ^a ^s ^u ^r ^e ^s t o ^e ⁿ ^s ^u ^r ^e t h ^e ^p ^r ^o ^c ^e ^s ^s ^o ^f f i l l i n ^g ^b ^o ^a ^r ^d ^v ^a ^c ^a ⁿ ^c i e ^s i s ⁿ ^o ^t ⁱ ^m ^p l i c i t l y ^b i a ^s ^e ^d ^a ^g ^a i n ^s ^t f e ^m ^a l e ^c ^a ⁿ ^d i d ^a t e ^s , ^a ⁿ ^d ^w ^h ^e t h ^e ^r t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^m ^a ^k ^e ^s ^a ^c ^o ⁿ ^s ^c i o ^u ^s ^e f f o ^r ^t t o ^s ^e ^e ^k ^o ^u ^t f e ^m ^a l e ^c ^a ⁿ ^d i d ^a t e ^s t h ^a ^t ^m ^a t c ^h t h ^e ^r ^e ^q ^u i r ^e ^d ^p ^r ^o f i l e :

i n ^a t i o ⁿ ^c ^o

i t t e ^e

^x ^p l a i n t h ^e ^r ^e ^s ^u l t s ^o ^f t h ^e ⁿ ^o

i s

^C . 1 . 7 ^E ^x ^p l a i n ^h ^o ^w ^s ^h ^a ^r ^e ^h ^o l d ^e ^r ^s ^w i t h ^s i g ⁿ i f i c ^a ⁿ ^t ^h ^o l d i n ^g ^s ^a ^r ^e ^r ^e ^p ^r ^e ^s ^e ⁿ t e ^d ^o ⁿ t h ^e ^b ^o ^a ^r ^d :

^C . 1 . 8 ^E ^x ^p l a i n ^a ⁿ ^y ^r ^e ^a ^s ^o ⁿ ^s ^w ^h ^y ^p ^r ^o ^p ^r i e t a ^r ^y ^d i r ^e ^c t o ^r ^s ^h ^a ^v ^e ^b ^e ^e ⁿ ^a ^p ^p ^o i n t e ^d ^a ^t t h ^e ^u ^r ^g i n ^g ^o ^f ^s ^h ^a ^r ^e ^h ^o l d ^e ^r ^s ^c ^o ⁿ t r ^o l l i n ^g l e ^s ^s t h ^a ⁿ ³ % ^o ^f ^c ^a ^p i t a l :

N a e o r c o p a n y n a e o f m m m s h a r e h o l d e r	e a s o n s R

^Y ^e ^s ^N ^o ^X

N a e o r c o p a n y n a e o f m m m s h a r e h o l d e r	x p l a n a t i o n E

^Y ^e ^s ^N ^o ^X

^C . 1 . 1 ⁰ ^I ⁿ ^d i c ^a t e , i f ^a ^p ^p ^r ^o ^p ^r i a t e , ^a ⁿ ^y ^p ^o ^w ^e ^r ^s ^d ^e l e ^g ^a t e ^d t o t h ^e ^c ^h i e ^f ^e ^x ^e ^c ^u t i v ^e ^o f f i c ^e ^r ( ^s ) :

^Y ^e ^s ^N ^o ^X

N a e o r c o p a n y n a e o f m m m s h a r e h o l d e r	r i e f d e s c r i p t i o n B

^C . 1 . 1 ¹ ^N ^a ^m ^e ^a ⁿ ^y ^d i r ^e ^c t o ^r ^s ^w ^h ^o ^a ^r ^e ^a l s ^o ^e ^x ^e ^c ^u t i v ^e ^s ^o ^r ^d i r ^e ^c t o ^r ^s ^o ^f ^o t h ^e ^r ^c ^o ^m ^p ^a ⁿ i e ^s t h ^a ^t f o ^r ^m ^p ^a ^r ^t ^o ^f t h ^e l i s t e ^d ^c ^o ^m ^p ^a ⁿ ^y ^g ^r ^o ^u ^p :

N a e o r c o p a n y m m	e g i s t e r e d o f t h e n a e g r o u p R m	o s i t i o n P	t h e y o h a v e D
d i r e c t o r n a e o f m	c o p a n y m		e x e c u t i v e d u t i e s ?
i g u e l P e r e d a M E s p e s o	I S T I C L E L O G A L O V E R A I Y	h a i r m o f t h e o a r d C a n B	N o
	I I , S . A . U	i r e c t o r s o f D
i g u e l P e r e d a M E s p e s o	I L L I S A L , S . A . U L E R E T A A	h a i r m o f t h e o a r d C a n B i r e c t o r s o f D	N o
i g u e l P e r e d a M E s p e s o	I L I P E L E R E T A H R , S . A . U A L B A C E N T E R	h a i r m o f t h e o a r d C a n B i r e c t o r s o f D	N o
i g u e l P e r e d a M E s p e s o	F F I C L E O E S E L O Y 2 7 , S . A . U G O N Z A L O	h a i r m o f t h e o a r d C a n B i r e c t o r s o f D	N o
i g u e l P e r e d a M E s p e s o	I L L E R E T A A S T E R M A S , S . L . U	h a i r m o f t h e o a r d C a n B i r e c t o r s o f D	N o
i g u e l P e r e d a M E s p e s o	I S T I C I I I L E L O G A L O V E R A I V , S . L . U Y	h a i r m o f t h e o a r d C a n B i r e c t o r s o f D	N o
i g u e l P e r e d a M E s p e s o	I S T I C L E L O G A L M U S S A F E S , S . L . U	h a i r m o f t h e o a r d C a n B i r e c t o r s o f D	N o
i g u e l P e r e d a M E s p e s o	I L I P E L E R E T A H R O N D A R A , S . L . U	h a i r m o f t h e o a r d C a n B i r e c t o r s o f D	N o
i g u e l P e r e d a M E s p e s o	F F I C I R 1 , L E O E S J O A N M Ó 2 S . L . U	h a i r m o f t h e o a r d C a n B i r e c t o r s o f D	N o
i g u e l P e r e d a M E s p e s o	I L I D L E R E T A V A N O V A , S . L . U . ( p r e v i o u s l y P A R C I L L E R E T A S A G U N T O , S . L . U . )	h a i r m o f t h e o a r d C a n B i r e c t o r s o f D	N o
i g u e l P e r e d a M E s p e s o	I L L , S . L . U L E R E T A E L R O S A	h a i r m o f t h e o a r d C a n B i r e c t o r s o f D	N o
i g u e l P e r e d a M E s p e s o	I L I A , S . L . U L E R E T A G A L A R	h a i r m o f t h e o a r d C a n B i r e c t o r s o f D	N o
i g u e l P e r e d a M E s p e s o	I N L A R E S P A Ñ A V E R S I Ó N Í S T I C I V , S . L . U L O G A	i r e c t o r a c t i n g j o i n t D ( s e v e r a l l y a n d )	N o
i g u e l P e r e d a M E s p e s o	I L L E R E T A I S T A , S . L . U V H E R M O S A	h a i r m o f t h e o a r d C a n B i r e c t o r s o f D	N o
i g u e l P e r e d a M E s p e s o	I L , S . L . U L E R E T A L A G O H ( p r e v i o u s l y L A R E S P A Ñ A P P I N I I I , S H O G C E N T R E S V S . L . U . )	h a i r m o f t h e o a r d C a n B i r e c t o r s o f D	N o
i g u e l P e r e d a M E s p e s o	I L I I , L E R E T A S A G U N T O S . L . U . ( p r e v i o u s l y L A R F F I C I , E S P A Ñ A O E S V S . L . U . )	h a i r m o f t h e C a n o a r d B o f i r e c t o r s D	N o

i g u e l P e r e d a M E s p e s o	I L I L L A L E R E T A V V E R D E ,	h a i r m o f t h e o a r d C a n B	N o
	S . L . U	i r e c t o r s o f D
i g u e l P e r e d a M E s p e s o	I L L E R E T A A L B A C E N T E R ,	h a i r m o f t h e o a r d C a n B	N o
	S . L . U	i r e c t o r s o f D
i g u e l P e r e d a M E s p e s o	F F I C L E O E S M A R C E L O	h a i r m o f t h e o a r d C a n B	N o
	S P I N 4 2 , S . L . U O L A	i r e c t o r s o f D
i g u e l P e r e d a M E s p e s o	I L L E R E T A L A S H U E R T A S ,	h a i r m o f t h e o a r d C a n B	N o
	S . L . U	i r e c t o r s o f D
i g u e l P e r e d a M E s p e s o	I L X I N I , L E R E T A T G U D	h a i r m o f t h e o a r d C a n B	N o
	S . L . U	i r e c t o r s o f D
i g u e l P e r e d a M E s p e s o	I L L E R E T A A N E C B L A U ,	h a i r m o f t h e o a r d C a n B	N o
	S . L . U	i r e c t o r s o f D
i g u e l P e r e d a M E s p e s o	I L L E R E T A G R A N V Í A D E	h a i r m o f t h e o a r d C a n B	N o
	I G , S . A . U V O	i r e c t o r s o f D
i g u e l P e r e d a M E s p e s o	I L , S . L . U L E R E T A A B A D Í A	h a i r m o f t h e o a r d C a n B	N o
		i r e c t o r s o f D
i g u e l P e r e d a M E s p e s o	I L L E R E T A	h a i r m o f t h e o a r d C a n B	N o
	I P E R I , S . L . U H M E R C A D O S	i r e c t o r s o f D
i g u e l P e r e d a M E s p e s o	I L L E R E T A	h a i r m o f t h e o a r d C a n B	N o
	I P E R I I , S . L . U H M E R C A D O S	i r e c t o r s o f D
i g u e l P e r e d a M E s p e s o	I L L E R E T A	h a i r m o f t h e o a r d C a n B	N o
	I P E R I I I , S . L . U H M E R C A D O S	i r e c t o r s o f D
i g u e l P e r e d a M E s p e s o	I L I V S , S . L . U L E R E T A R A	h a i r m o f t h e o a r d C a n B	N o
		i r e c t o r s o f D
i g u e l P e r e d a M E s p e s o	I L L E R E T A C O R D O B A S U R ,	h a i r m o f t h e o a r d C a n B	N o
	S . L . U . ( p r e v i o u s l y G L O B A L	i r e c t o r s o f D
	, S . L . U P E R G A M O . )
i g u e l P e r e d a M E s p e s o	I N I L I A I A M O B R J U A N	i r e c t o r o f t h e o a r d D B o f	N o
	S . L . B R A V O 3	i r e c t o r s D
e l l C R o g e r M a x w o o k e	I N I L I A I A M O B R J U A N	h a i r m o f t h e o a r d C a n B	N o
	S . L . B R A V O 3	i r e c t o r s o f D

N a e o r c o p a n y n a e o f m m m d i r e c t o r	e g i s t e r e d t h e n a e o f R m g r o u p c o p a n y	o s i t i o n P
	m
a l l e J o s e L u i s d e l V	b e n g o a , S . A A	I n d e p e n d e n t D i r e c t o r
g u i l e r a I s a b e l A	O r y z o n G e n o m i c s	I n d e p e n d e n t D i r e c t o r
L e t i c i a I g l e s i a s	o r p o r a c i ó n A b a n c a C a n c a r i a B	I n d e p e n d e n t D i r e c t o r h a i r m o f t h e u d i t C a n A o n t r o l C i t t e e a n d C o m m t h e a n d M e m b e r o f I n t e g r a l R i t t e e i s k C o m m
	E , S . A A E N A S M	I n d e p e n d e n t D i r e c t o r h a i r m o f t h e u d i t C a n A i t t e e C o m m

^C . 1 . 1 ³ ^I ⁿ ^d i c ^a t e ^w ^h ^e t h ^e ^r t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^h ^a ^s ^a ⁿ ^y ^r ^u l e ^s ^a ^b ^o ^u ^t t h ^e ⁿ ^u ^m ^b ^e ^r ^o ^f ^d i r ^e ^c t o ^r ^s ^h i p ^s i t s ^b ^o ^a ^r ^d ^m ^e ^m ^b ^e ^r ^s ^c ^a ⁿ ^h ^o l d ^a ⁿ ^d i f ^s ^o ^e ^x ^p l a i n t h ^e ^m :

^Y ^e ^s ^X ^N ^o

x p l a n a t i o n t h e r u l e s o f E
p a n y ' s d i r e c t o r s s i t o n t h e b o a r d s t o o t h e r l i s t e d p a n i e s i n T h e C o m m a y o f u p f o u r c o m (
a d d i t i o n t o t h a t o f t h e r t i c l e 1 9 . 4 t h e o a r d e g u l a t i o n s . C o m p a n y ) . A o f B R

^C . 1 . 1 ⁴ ^S ^e ^c t i o ⁿ ^r ^e ^p ^e ^a l e ^d

u n e r a t i o n ( t h o u s a n d s o a r d r e o f e u r o s ) m
B s e r v i n g d i r e c t o r s i n o f p e n s i o n o u n t a c c r u e d y r e s p e c t A m b e n t i t l e e n t s ( t h o u s a n d s o f e u r o s ) m
f o r d i r e c t o r s i n o f p e n s i o n o u n t a c c r u e d y e r r e s p e c t A m b m e n t i t l e e n t s ( t h o u s a n d s o f e u r o s ) m

^C . 1 . 1 ⁶ ^I ^d ^e ⁿ t i f y t h ^e ^m ^e ^m ^b ^e ^r ^s ^o ^f ^s ^e ⁿ i o ^r ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^w ^h ^o ^a ^r ^e ⁿ ^o ^t ^e ^x ^e ^c ^u t i v ^e ^d i r ^e ^c t o ^r ^s ^a ⁿ ^d i n ^d i c ^a t e t o t a ^l ^r ^e ^m ^u ⁿ ^e ^r ^a t i o ⁿ ^a ^c ^c ^r ^u i n ^g t o t h ^e ^m ^d ^u ^r i n ^g t h ^e ^r ^e ^p ^o ^r t i n ^g ^p ^e ^r i o ^d :

N a e o r c o p a n y n a e m m m	o s i t i o n ( s ) P
r m e n t i a J o n A M e n d a z a	o r p o r a t e i r e c t o r C D a n d C F O
u e r r e r o T r e v i j a n o S u s a n a G	i r e c t o r L e g a l D a n d d e p u t y s e c r e t a r y t h e b o a r d o f
e r n á n P e d r o r i b e H S a n L ó p e z d e U	i r e c t o r I n v e s t o r D o f e l a t i o n s R
o t a l s e n i o r u n e r a t i o n ( i n t h o u s a n d s

o t a l s e n i o r u n e r a t i o n ( i n t h o u s a n d s a n a g e e n t r e o f T m m m	3 6 8
e u r o s )

^C . 1 . 1 ⁷ ^I ⁿ ^d i c ^a t e t h ^e i d ^e ⁿ t i t y ^o ^f ^a ⁿ ^y ^b ^o ^a ^r ^d ^m ^e ^m ^b ^e ^r ^s ^w ^h ^o l i ^k ^e ^w i s ^e ^s i t ^o ⁿ t h ^e ^b ^o ^a ^r ^d ^s ^o ^f ^d i r ^e ^c t o ^r ^s ^o ^f ^c ^o ^m ^p ^a ⁿ i e ^s ^h ^a ^v i n ^g ^s i g ⁿ i f i c ^a ⁿ ^t ^s ^h ^a ^r ^e ^h ^o l d i n ^g ^s ^a ⁿ ^d / ^o ^r t h ^e i r ^g ^r ^o ^u ^p ^c ^o ^m ^p ^a ⁿ i e ^s :

N a e o r c o p a n y n a e o f m m m d i r e c t o r	o p a n y n a e o f C m m s i g n i f i c a n t s h a r e h o l d e r	o s i t i o n P
i g u e l P e r e d a M	r u p o I n v e r s i o n e s G L a r I n m o b i l i a r i a s , S . A	C E O

N a e o r c o p a n y n a e o f m m m r e l a t e d d i r e c t o r	N a e o r c o p a n y n a e o f m m m r e l a t e d s i g n i f i c a n t s h a r e h o l d e r	e s c r i p t i o n o f D r e l a t i o n s h i p
i g u e l P e r e d a M	r u p o I n v e r s i o n e s G L a r I n m o b i l i a r i a s , S . A	i g u e l P e r e d a p a r t o f M i s t h e P e r e d a i l y , f a m r u p o o w n e r o f G L a r I n v e r s i o n e s I n m o b i l i a r i a s , S . A

^C . 1 . 1 ⁸ ^I ⁿ ^d i c ^a t e ^w ^h ^e t h ^e ^r t h ^e ^b ^o ^a ^r ^d ^r ^e ^g ^u l a t i o ⁿ ^s ^w ^e ^r ^e ^a ^m ^e ⁿ ^d ^e ^d ^d ^u ^r i n ^g t h ^e ^y ^e ^a ^r :

^Y ^e ^s ^X ^N ^o

^D ^e ^s ^c ^r i p t i o ⁿ ^o ^f t h ^e ^a ^m ^e ⁿ ^d ^m ^e ⁿ t s :

^C . 1 . 1 ⁹ ^I ⁿ ^d i c ^a t e t h ^e ^p ^r ^o ^c ^e ^d ^u ^r ^e ^s f o ^r ^s ^e l e ^c t i n ^g , ^a ^p ^p ^o i n t i n ^g , ^r ^e Æ e l e ^c t i n ^g , ^e ^v ^a l u ^a t i n ^g ^a ⁿ ^d ^r ^e ^m ^o ^v i n ^g ^d i r ^e ^c t o ^r ^s . ^L i s ^t t h ^e ^c ^o ^m ^p ^e t e ⁿ ^t ^b ^o ^d i e ^s ^a ⁿ ^d t h ^e ^p ^r ^o ^c ^e ^s ^s ^e ^s ^a ⁿ ^d ^c ^r i t e ^r i a ^u ^s ^e ^d f o ^r ^e ^a ^c ^h ^o ^f t h ^e ^s ^e ^p ^r ^o ^c ^e ^d ^u ^r ^e ^s .

^a . ^B ^e i n ^g ^c ^o ⁿ ^c r e t e ^a ⁿ ^d ^v ^e r i ^f i a ^b l e .
^b . ^A ^s ^s ^u r i n ^g t h ^a ^t r e ^s ^o l u t i o ⁿ ^s t o ^a ^p ^p ^o i n ^t ^o ^r r e ï e l e ^c ^t ^d i r e ^c t o ^r ^s ^a r e ^u ⁿ ^d ^e r p i n ⁿ ^e ^d ^b ^y ^p r i o ^r ^a ⁿ ^a ^l ^y ^s ⁱ ^s ^o ^f t h ^e ^B ^o ^a r d ' s ⁿ ^e ^e ^d ^s .
^c . ^D ^u ^l ^y ^f ^o ^s t e r i n ^g ^d ⁱ ^v ^e ^r ^s i t ^y i n t e r m ^s ^o ^f ^s ^k i l l ^s , ^b ^a ^c ^k ^g r o ^u ⁿ ^d ^s ^a ⁿ ^d ^g ^e ⁿ ^d ^e r .

^T ^h ^e ^c r i t e r i a ^s ^e ^t ^d ^o ^w ⁿ i n t h ^a ^t ^p ^o l i ^c ^y ^a r e t h ^e ^f ^o l l o ^w i n ^g :

¹ . ^D i r ^e ^c t o ^r ^a ^p t i t u ^d ^e ^s

^D i r e ^c t o ^r ^s ^m ^u ^s ^t ( i ) ^B ^e ^p ^e r s ^o n s o f ^g ^o ^o ^d ^r e p ^u t e ^a ⁿ ^d ^p ^r o f e s ^s i o ⁿ ^a l s t a ⁿ ^d i n g .

^O ⁿ t h ^e ^o t h ^e ^r ^h ^a ⁿ ^d , ^a ^c ^a ⁿ ^d i d ^a t e ^s ^h ^a l l ^b ^e ^u ⁿ ^d ^e ^r ^s t o ^o ^d t o l a ^c ^k t h ^e ^s ^e ^a t t r i ^b ^u t e ^s ^w ^h ^e ⁿ :

i . ^T ^h ^e ^y ^h ^a ^v ^e ^b ^e ^e ⁿ ^d ^e ^c l a r e ^d ^b ^a ⁿ ^k r u ^p ^t ^o ^r ^a r e ^p ^a r t ^y t o ^a ⁿ i n ^s ^o ^l ^v ^e ⁿ ^c ^y ^a ^g r e ^e ^m ^e ⁿ t , ^w ^h ^e t h ^e ^r i n ^S ^p ^a i n ^o ^r ^a ^b r o ^a ^d , ^w i t h ^o ^u ^t ^h ^a ^v ^e ^b ^e ^e ⁿ ^d ⁱ ^s ^c ^h ^a ^r ^g ^e ^d ^o ^r t h ^e t e r m ^s ^o ^f t h ^e ^a ^g r e ^e ^m ^e ⁿ ^t ^f ^u l l ^y ^c ^o ^m ^p l i e ^d ^w i t h ;
i i . ^T ^h ^e ^y ^a r e ^b ^e i n ^g ^p r o ^s ^e ^c ^u t e ^d ^o r , i n t h ^e ^c ^a ^s ^e ^o ^f t h ^e ^p r o ^c ^e ^e ^d i n ^g ^s r e ^f ^e r r e ^d t o i n t i t l e ^s I I ^a ⁿ ^d I I I ^o ^f ^b ^o ^o ^k I V ^o ^f ^S ^p ^a i n ' s ^C r i m i n ^a ^l ^P r o ^s ^e ^c ^u t i o ⁿ ^A ^c t , ^h ^a ^v ^e ^b ^e ^e ⁿ i n ^d ⁱ ^c t e ^d ;
i i i . ^T ^h ^e ^y ^h ^a ^v ^e ^a ^c r i m i n ^a ^l r e ^c ^o r d ^f ^o ^r ^a ⁿ ^y ^o ^f t h ^e ^f ^o l l o ^w i n ^g ^c r i m ^e ^s : ^f r a ^u ^d , t a ^x ^e ^v ^a ^s i o ⁿ , ^c r i m i n ^a ^l ^b ^a ⁿ ^k r u ^p ^t ^c ^y , ^d ⁱ ^s l o ^y ^a ^l ^c ^u ^s t o ^d ^y ^o ^f ^d ^o ^c ^u ^m ^e ⁿ ^t ^s , t h ^e ^f ^t ^o ^f t r a ^d ^e ^s ^e ^c r e ^t ^s , ^m ^o ⁿ ^e ^y l a ^u ⁿ ^d ^e r i n ^g , ^e ^m ^b ^e ^z ^z l e ^m ^e ⁿ ^t ^o ^f ^p ^u ^b l i ^c ^f ^u ⁿ ^d ^s , t h ^e ^d ⁱ ^s ^c ^o ^v ^e ^r ^y ^a ⁿ ^d ^d ⁱ ^s ^c l o ^s ^u r e ^o ^f t r a ^d ^e ^s ^e ^c r e ^t ^s , ^p r o ^p ^e r t ^y ï r e l a t e ^d ^c r i m ^e ; ^o ^r
i v . ^T ^h ^e ^y ^h ^a ^v ^e ^b ^e ^e ⁿ ^b ^a ⁿ ⁿ ^e ^d ^o ^r ^s ^u ^s ^p ^e ⁿ ^d ^e ^d , ^u ⁿ ^d ^e ^r ^c r i m i n ^a ^l ^o ^r ^a ^d ^m i n ⁱ ^s t r a t i ^v ^e l a ^w , ^f r o ^m ^h ^o l d i n ^g ^p ^u ^b l i ^c ^o f f ⁱ ^c ^e ^o ^r ^f r o ^m ^a ^d ^m i n ⁱ ^s t e r i n ^g ^o ^r ^m ^a ⁿ ^a ^g i n ^g ^f i n ^a ⁿ ^c i a ^l i n ^s t i t u t i o ⁿ ^s .

( i i ) ^H ^a ^v ^e ^a ^d ^e ^q ^u ^a t e e x ^p ^e ^r t i s ^e ^a ⁿ ^d e x ^p ^e ^r i e ⁿ ^c ^e t o ^c ^a ^r r y ^o ^u ^t t h ^e i r ^d ^u t i e s

( i i i ) ^B ^e i n ^a ^p o s i t i o ⁿ t o ^g ^o ^v ^e ^r ⁿ t h ^e ^c ^o ^m ^p ^a n y ^w ^e l l

i . ^D ^e ^v ^o t e ^s ^u f f ⁱ ^c i e ⁿ ^t t i m ^e t o t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^a ⁿ ^d ^a ^d ^o ^p ^t ^a ^p ^p r o ^p r i a t e ^m ^e ^a ^s ^u r e ^s ^f ^o ^r ^e ⁿ ^s ^u r i n ^g i t ^s ^c ^o r r e ^c ^t ^m ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t ^a ⁿ ^d ^c ^o ⁿ t r o l .
i i . ^G ^e ^t ^f r o ^m t h ^e ^C ^o ^m ^p ^a ⁿ ^y t h ^e l e ^v ^e ^l ^o ^f i n ^f ^o r m ^a t i o ⁿ t h ^e ^y ⁿ ^e ^e ^d t o ^c ^o r r e ^c t l ^y ^f ^u ^l ^f i l t h ^e i r ^o ^b l i ^g ^a t i o ⁿ ^s .
i i i . ^D ^e ^v ^o t e ^s ^u f f ⁱ ^c i e ⁿ ^t t i m ^e t o ^b ^e ^c ^o ^m i n ^g i n ^f ^o r m ^e ^d , t o ^f ^a ^m i l i a r i ^s i n ^g t h ^e ^m ^s ^e ^l ^v ^e ^s ^w i t h t h ^e ^C ^o ^m ^p ^a ⁿ ^y ' s ^p ^a r a ^d ⁱ ^g ^m ^a ⁿ ^d ^b ^u ^s i n ^e ^s ^s ^p ^e ^r ^f ^o r m ^a ⁿ ^c ^e ^a ⁿ ^d t o ^p ^a r t i ^c i p ^a t i n ^g i n t h ^e ^m ^e ^e t i n ^g ^s ^o ^f t h ^e ^b ^o ^a r d ^a ⁿ ^d ^a ⁿ ^y ^o ^f t h ^e ^c ^o ^m ^m i t t e ^e ^s ^o ⁿ ^w ^h ⁱ ^c ^h t h ^e ^y ^s i t .
i v . I n ^f ^o r m t h ^e ^o t h ^e ^r ^m ^e ^m ^b ^e ^r ^s ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^o ^f ^a ⁿ ^y ^d i r e ^c ^t ^o ^r i n ^d i r e ^c ^t ^c ^o ⁿ ^f l i ^c ^t ^s t h ^e ^y ^o ^r t h ^e i r r e l a t e ^d ^p ^a r t i e ^s ^m ^a ^y ^h ^a ^v ^e ^v ⁱ ^s ^ï ^à ^ï ^v i s t h ^e ^C ^o ^m ^p ^a ⁿ ^y ' s i n t e r e ^s ^t ^s .

² . ^F ^o ^s t e ^r i n ^g t h ^e ^d i v ^e ^r ^s i t y i n t h ^e ^o ^a ^r ^d ^o ^f ^D i r ^e ^c t o ^r ^s

³ . ^D i r ^e ^c t o ^r ^s ^e l e ^c t i o ⁿ ^a ⁿ ^d ^a ^p ^p ^o i n ^t ^m ^e ⁿ ^t ^p ^r ^o ^c ^e ^d ^u ^r ^e

^T ^h ^e ^p r o ^c ^e ^s ^s ^o ^f ^s ^e l e ^c t i n ^g ^a ⁿ ^d ^a ^p ^p ^o i n t i n ^g ^d i r e ^c t o ^r ^s ⁱ ^s ^a r t i ^c ^u l a t e ^d ^a r o ^u ⁿ ^d ^f ^o ^u ^r ^k ^e ^y ^s t e ^p ^s :

³ . ¹ . ^P ^r ^o ^p ^o ^s ^a ^l

³ . ² . ^C ^a ⁿ ^d i d ^a ^c ^y ^p ^r ^e ^s ^e ⁿ t a t i o ⁿ

i v . ^C ^e r t i ^f ⁱ ^c ^a t i o ⁿ ^o ^f ^p ^o ^s ^s ^e ^s ^s i o ⁿ ^o ^f ^a ^d ^e ^q ^u ^a t e ^e ^x ^p ^e r t i ^s ^e ^a ⁿ ^d ^e ^x ^p ^e r i e ⁿ ^c ^e .

. ^C ^e r t i ^f ⁱ ^c ^a t i o ⁿ ^o ^f r e ^a ^d i n ^e ^s ^s ^a ⁿ ^d ^a ^b i l i t ^y t o ^g ^o ^v ^e r n t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^w ^e l l .

^v ⁱ . ^C ^e r t i ^f ⁱ ^c ^a t i o ⁿ ^o ^f t h ^e r e ^p ^u t a t i o ⁿ ^a ⁿ ^d ^p r o ^f ^e ^s ^s i o ⁿ ^a ^l ^s t a ⁿ ^d i n ^g r e ^q ^u i r e ^d i n t h ⁱ ^s ^p ^o l i ^c ^y .

³ . ³ . ^E ^v ^a l u ^a t i o ⁿ ^o ^f t h ^e ^c ^a ⁿ ^d i d ^a ^c ^y

^o ^f ^D i r e ^c t o ^r ^s .

³ . ⁴ . ^A ^p ^p ^o i n ^t ^m ^e ⁿ ^t

⁴ . ^D i r ^e ^c t o ^r ^e ^v ^a l u ^a t i o ⁿ ^a ⁿ ^d ^r ^e ^m ^o ^v ^a ^l

^D i r e ^c t o ^r ^e ^v ^a l u ^a t i o ⁿ ^s ^h ^a l l t a ^k ^e t w ^o ^f ^o r m ^s :

ⁱ . ^A ⁿ ⁿ ^u ^a ^l ^a ^s ^s ^e ^s ^s ^m ^e ⁿ ^t ^o ^f ^d i r e ^c t o ^r ^q ^u ^a l i ^f ⁱ ^c ^a t i o ⁿ ^s : ^E ^v ^e ^r ^y ^y ^e ^a r , i n t h ^e ^m ^o ⁿ t h ^o ^f ^J ^a ⁿ ^u ^a ^r ^y , t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^w i l l ^s ^e ⁿ ^d ^a l l t h ^e ^d i r e ^c t o ^r ^s ^a ^q ^u ^e ^s t i o ⁿ ⁿ ^a i r e , t h ^e ^p ^u r p ^o ^s ^e ^o ^f ^w ^h ⁱ ^c ^h ⁱ ^s t o ^v ^e r i f y t h ^a ^t t h ^e ^y ^c ^o ⁿ t i n ^u ^e t o ^m ^e ^e ^t t h ^e ^a ^p t i t u ^d ^e ^s r e ^q ^u i r e ^d ^o ^f t h ^e ^p ^o ^s t . ^T ^h ^e ^d i r e ^c t o ^r ^s ^h ^a ^v ^e 1 5 ^c ^a l e ⁿ ^d ^a ^r ^d ^a ^y ^s t o ^f i l l ^o ^u t , ^s ⁱ ^g ⁿ ^a ⁿ ^d r e t u r n t h ^e ^f ^o r m . ^T ^h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^w i l l t h ^e ⁿ ^a ⁿ ^a ^l ^y ^s ^e t h ^e ^a ⁿ ^s ^w ^e ^r ^s r e ^c ^e ⁱ ^v ^e ^d ^a ⁿ ^d ^p r o ^c ^e ^e ^d ^a ^s ^f ^o l l o ^w ^s i n t h ^e ^e ^v ^e ⁿ ^t i t ^d ^e t e ^c ^t ^s ^a ⁿ i n ^c i d ^e ⁿ ^t i n t h ⁱ ^s r e ^s ^p ^e ^c t .
i i . ^A ^d ï h ^o ^c ^a ^s ^s ^e ^s ^s ^m ^e ⁿ ^t i n t h ^e ^e ^v ^e ⁿ ^t ^o ^f ^s ^p ^e ^c i a ^l ^c i r ^c ^u ^m ^s t a ⁿ ^c ^e ^s : ^E ^a ^c ^h ^d i r e ^c t o ^r ⁱ ^s i n ^d ⁱ ^v i d ^u ^a l l ^y r e ^s ^p ^o ⁿ ^s ⁱ ^b l e ^f ^o ^r ⁿ ^o t i f y i n ^g t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e i m ^m ^e ^d i a t e ^l ^y , i n ^w r i t i n ^g ^a ⁿ ^d i n ^d ^e t a i l ^o ^f ^a ⁿ ^y ^e ^v ^e ⁿ ^t ^o ^r ^c i r ^c ^u ^m ^s t a ⁿ ^c ^e ^s t h ^a ^t ^c ^o ^u l d ^h ^a ^v ^e ^a ^s ⁱ ^g ⁿ ⁱ ^f ⁱ ^c ^a ⁿ ^t i m ^p ^a ^c ^t ^o ⁿ t h ^e ^a ^s ^s ^e ^s ^s ^m ^e ⁿ ^t ^o ^f ^h ⁱ ^s ^o ^r ^h ^e ^r ^s ^u i t a ^b i l i t ^y ^f ^o ^r t h ^e ^p ^o ^s ^t i n t e r m ^s ^o ^f t h ^e ^a ^p t i t u ^d ^e r e ^q ^u i r e ^m ^e ⁿ ^t ^s ^d ^e ^f i n ^e ^d i n t h ⁱ ^s ^p ^o l i ^c ^y ^a ⁿ ^d i n ^p r e ^v ^a i l i n ^g l e ^g ⁱ ^s l a t i o ⁿ . ^T ^h ^e ^d i r e ^c t o ^r ^s ^a r e l i a ^b l e ^f ^o ^r ^a ⁿ ^y ^d ^a ^m ^a ^g ^e ^s t o t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^c ^a ^u ^s ^e ^d ^b ^y ^a ⁿ ^y ^f ^a i l u r e t o r e ^p ^o r t ^o ^r ^d ^e l a ^y i n r e ^p ^o r t i n ^g ^a ⁿ ^y ^c i r ^c ^u ^m ^s t a ⁿ ^c ^e ^s ^a f f ^e ^c t i n ^g ^h ⁱ ^s ^o ^r ^h ^e ^r ^s ^u i t a ^b i l i t ^y .

^C . 1 . 2 ⁰ ^E ^x ^p l a i n t h ^e ^e ^x t e ⁿ ^t t o ^w ^h i c ^h t h ^e ^a ⁿ ⁿ ^u ^a ^l ^r ^e ^v i e ^w ^o ^f t h ^e ^b ^o ^a ^r ^d ' ^s ^p ^e ^r f o ^r ^m ^a ⁿ ^c ^e ^h ^a ^s l e ^d t o ⁱ ^m ^p ^o ^r t a ⁿ ^t ^c ^h ^a ⁿ ^g ^e ^s i n t e ^r ^m ^s ^o ^f i t s i n t e ^r ⁿ ^a ^l ^o ^r ^g ^a ⁿ ⁱ ^z ^a t i o ⁿ ^a ⁿ ^d t h ^e ^p ^r ^o ^c ^e ^d ^u ^r ^e ^s ^a ^p ^p l i c ^a ^b l e t o i t s ^a ^c t i v i t i e ^s :

	P o s i t i o n / i t t e e s C o m m	t i o n i t y a l N a	S e c t o r i a l : s t t e / R e a l E R e t i / a t i n g s R a l a	S e c t o r i A r c h i t e c t u :r e / a l T o w n n n i n g / p l a n g i n e e r i n g	I T	F i n n c e a	A u d i t / R i s k s
J o s e L u i s D e V e l a l l i r m ( C h n ) a a	e c u t i v e o n i r m N C h E x n I n d e a e n d e n t / a p b e r A & M C C e m	n i s h S p a		E X		X	X
e t i c i L I g e s i a s l a	I n d e e n d e n t p i r e c t o r / D i r m C h n A & a C C a	n i s h S p a				X	X
I s b e e r A g u i a l l a	I n d e e n d e n t p i r e c t o r / D e m A & C C m b e r	n i s h S p a		X	X	X
R o g e r C o o k e	I n d e e n d e n t p i r e c t o r / D i r m C h n A & a R C a	r i t i s h B	X
i g u e M P e r e d l a	P r o i e t r y p i r e c t o r / D a e m A & R C m b e r	n i s h S p a	X			X
u r e n t L u c c i o n i L a	P r o i e t r y p i r e c t o r / D a e m A & R C m b e r	F r e n c h	X			X
A e c m m o t l E	I n d e e n d e n t p i r e c t o r / D e m A & b e r R C m	r i t i s h B	X

^C ^a ^p ^a ^b i l i t ^y ^M ^a t r i ^x ^o ⁿ t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^o ^f ^L ^a ^r ^E ^s ^p ^a ^ñ ^a

^C ^a ^p ^a ^b i l i t ^y ^M ^a t r i ^x ^o ⁿ t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^o ^f ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ( ^c ^o ⁿ t i n ^u ^a t i o ⁿ )

	I n t e r n t i o n	t h e r O	I n v e s t o r /	T e m n d	S G	F u n c t i o n s o f f i r s t
	a l m r k e t a	i r e c t o r s D	s t d e r k e h o	a a t e n t	E	e c u t i v e / C e O
	a		e d g e k n o w a l	e n t m n a l g e m		x E
J o s e L u i s D e	X	X	l X	a a	X	X
V e l
a l l i r m ( C h n )

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e t i c i L	X	X	X	X		X
I g e s i a s
l b a I s e	X	X		X		X
e r A g u i a l
R o g e r C o o k e l a	X			X	X	X
i g u e P e r e d M	X		X	X	X	X
u r e n t l a L	X	X	X			X
u c c i o n i L a
A e c m m o t	X	X	X		X	X

· ^T ^h ^e ^q ^u ^a l i t ^y ^a ⁿ ^d ^e f f ⁱ ^c i e ⁿ ^c ^y ^o ^f t h ^e ^f ^u ⁿ ^c t i o ⁿ i n ^g ^o ^f t h ^e ^B ^o ^a r d
· ^D ⁱ ^v ^e ^r ^s i t ^y i n t h ^e ^c ^o ^m ^p ^o ^s i t i o ⁿ ^a ⁿ ^d ^c ^o ^m ^p ^e t e ⁿ ^c ^e ^s ^o ^f t h ^e ^B ^o ^a r d .
· ^T ^h ^e ^p ^e ^r ^f ^o r m ^a ⁿ ^c ^e ^o ^f t h ^e ^C ^h ^a i r m ^a ⁿ ^o ^f t h ^e ^B ^o ^a r d .
· ^T ^h ^e ^p ^e ^r ^f ^o r m ^a ⁿ ^c ^e ^a ⁿ ^d ^c ^o ⁿ t r i ^b ^u t i o ⁿ ^o ^f ^e ^a ^c ^h ^d i r e ^c t o r , ^p ^a ^y i n ^g ^s ^p ^e ^c i a ^l ^a t t e ⁿ t i o ⁿ t o t h ^o ^s ^e r e ^s ^p ^o ⁿ ^s ⁱ ^b l e ^f ^o ^r t h ^e ^d ⁱ f f ^e r e ⁿ ^t ^c ^o ^m ^m i t t e ^e ^s ^o ^f t h ^e ^B ^o ^a r d .
· ^T ^h ^e ^o ^p ^e r a t i o ⁿ ^a ⁿ ^d ^c ^o ^m ^p ^o ^s i t i o ⁿ ^o ^f t h ^e ^B ^o ^a r d ^c ^o ^m ^m i t t e ^e ^s .

· ^F i r ^s t , t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^C ^o ^m ^m i t t e ^e ^a ⁿ ^a ^l ^y ^z ^e ^d t h ^a ^t t h ^e r e ^w ^e r e ⁿ ^o ^c ^o ⁿ ^f l i ^c ^t ^s ^o ^f i n t e r e ^s ^t ^w i t h t h ^e ^s ^e l e ^c t e ^d ^c ^o ⁿ ^s ^u l t a ⁿ ^t ( ^G ^e ^o ^r ^g ^e ^s ^o ⁿ ) t h ^a ^t ^c ^o ^u l d ^u ⁿ ^d ^e r m i n ^e i t ^s i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^c ^e . ^A ^f t e ^r ^v ^e r i f y i n ^g t h ^a ^t ^G ^e ^o ^r ^g ^e ^s ^o ⁿ ^p r o ^v i d ^e ^s ^a ^d ^v ⁱ ^s ^o ^r ^y ^s ^e ^r ^v ⁱ ^c ^e ^s t o t h ^e ^D ^e ^p ^a r t m ^e ⁿ ^t ^o ^f I n ^v ^e ^s t o ^r ^a ⁿ ^d ^S ^h ^a r e ^h ^o l d ^e ^r ^R ^e l a t i o ⁿ ^s ^o ^f ^L ^a ^r ^E ^s ^p ^a ^ñ ^a i n ^m ^a t t e ^r ^s ^o ^f i d ^e ⁿ t i ^f ⁱ ^c ^a t i o ⁿ ^o ^f ^s ^h ^a r e ^h ^o l d ^e ^r ^s , ^p r o ^x ^y ^s ^o l i ^c i t a t i o ⁿ ^o ⁿ t h ^e ^B ^o ^a r d ^a ⁿ ^d ^o ^r ^g ^a ⁿ ⁱ ^z ^a t i o ⁿ ^o ^f r o ^a ^d ^s ^h ^o ^w ^s i n t h ^e ^m ^a t t e ^r ^o ^f ^E ^S ^G , i t ^w ^a ^s ^v ^e r i ^f i e ^d t h ^a ^t i n ⁿ ^o ^c ^a ^s ^e ^h ^a ^s ^G ^e ^o ^r ^g ^e ^s ^o ⁿ ^h ^a ^s ^b ^e ^e ⁿ i n ^v ^o ^l ^v ^e ^d i n ^p r o ^c ^e ^s ^s ^e ^s ^o ^f ^s ^e l e ^c t i o ⁿ ^o ^r ^a ^p ^p ^o i n t m ^e ⁿ ^t ^o ^f ^a ^d i r e ^c t o ^r ^o ^r i n ^m ^a t t e ^r ^s r e l a t e ^d t o r e ^m ^u ⁿ ^e r a t i o ⁿ . ^A ^f t e ^r i n ^f ^o r m i n ^g t o t h ^e ^B ^o ^a r d ^o ^f ^s ^u ^c ^h ^a ⁿ ^d ^c ^o ⁿ ^f i r m i n ^g t h ^a ^t t h ^e r e ⁱ ^s ⁿ ^o r e ^a ^s ^o ⁿ t o ^u ⁿ ^d ^e r m i n ^e i t ^s i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^c ^e , t h ^e ^c ^o ⁿ t r a ^c t i n ^g ^o ^f ^G ^e ^o ^r ^g ^e ^s ^o ⁿ ^w ^a ^s ^a ^p ^p r o ^v ^e ^d t o ^c ^a r r ^y ^o ^u ^t t h ^e ^e ^v ^a l u ^a t i o ⁿ ^o ^f t h ^e ^B ^o ^a r d .
· ^R ^e ^g ^a r d i n ^g t h ^e ^m ^e t h ^o ^d ^o l o ^g ^y ^u ^s ^e ^d , ^G ^e ^o ^r ^g ^e ^s ^o ⁿ , ^a ^s ^a ⁿ ^e ^x t e r n ^a ^l ^a ^d ^v ⁱ ^s ^o r , ^h ^a ^s l e ^d t h ^e ^e ^v ^a l u ^a t i o ⁿ ^p r o ^c ^e ^s ^s ^o ^f t h ^e ^B ^o ^a r d , i t ^s ^m ^e ^m ^b ^e ^r ^s ^a ⁿ ^d i t ^s ^C ^o ^m ^m i t t e ^e ^s , ^w i t h t h ^e ^c ^o l l a ^b ^o r a t i o ⁿ ^o ^f t h ^e ^S ^e ^c r e t a ^r ^y ^o ^f t h ^e ^B ^o ^a r d ^a ⁿ ^d t h ^e ^D ^e ^p ^u ^t ^y ^S ^e ^c r e t a ^r ^y i n ^p ^a r t ^o ^f t h ^e ^p r o ^c ^e ^s ^s i n ^o r d ^e ^r t o ^e ⁿ ^s ^u r e ^o b j ^e ^c t i ^v i t ^y ^a ⁿ ^d ^c ^o ⁿ ^f i d ^e ⁿ t i a l i t ^y t h ^e r e ^o f ; ^a l w ^a ^y ^s i n

· ^T ^h ^e ^e ^v ^a l u ^a t i o ⁿ ^c ^a r r i e ^d ^o ^u ^t i n ² ⁰ 1 9 ^h ^a ^s ^a ⁿ ^a ^l ^y ^z ^e ^d t h ^e ^f ^o l l o ^w i n ^g ⁱ ^s ^s ^u ^e ^s : ( ⁱ ) ^s t r u ^c t u r e ^a ⁿ ^d ^o ^p ^e r a t i o ⁿ ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s ^o ^f ^L ^a ^r ^E ^s ^p ^a ^ñ ^a ; ( i i ) t h ^e ^p ^e ^r ^c ^e ^p t i o ⁿ ^s ^a ⁿ ^d ^v ^a l u ^a t i o ⁿ ^s ^o ^f ^e ^a ^c ^h ^o ^f t h ^e ^d i r e ^c t o ^r ^s , t h ^e ^c ^h ^a i r m ^e ⁿ ^o ^f t h ^e ^B ^o ^a r d ^a ⁿ ^d ^C ^o ^m ^m i t t e ^e ^s ^a ⁿ ^d t h ^e ^s ^e ^c r e t a r i a ^t ^o ^f t h ^e ^C ^o ^m ^p ^a ⁿ ^y ; ( i i i ) t h ^e ^p ^e ^r ^c ^e ^p t i o ⁿ ^o ^f t h ^e ^m ^o ^s ^t r e l e ^v ^a ⁿ ^t i n ^v ^e ^s t o ^r ^s ^a ⁿ ^d ^p r o ^x ^y ^a ^d ^v ⁱ ^s ^o ^r ^s ; ^a ⁿ ^d ( ⁱ ^v ) t h ^e ^m ^a i n ^p ^a r a ^m ^e t e ^r ^s ^o ^f ^c ^o r p ^o r a t e ^g ^o ^v ^e r n ^a ⁿ ^c ^e ^w i t h r e ^s ^p ^e ^c ^t t o ^c ^o ^m ^p ^a r a ^b l e ^c ^o ^m ^p ^a ⁿ i e ^s .
· ^T ^h ^e ^m ^a i n ^c ^o ⁿ ^c l u ^s i o ⁿ ^o ^f t h ^e ^e ^v ^a l u ^a t i o ⁿ ^p r o ^c ^e ^s ^s ^w ^a ^s t h ^a ^t t h ^e ^B ^o ^a r d ^a ⁿ ^d ^C ^o ^m ^m i t t e ^e ^s ^h ^a ^d ^w ^o r k ^e ^d ^e f f ⁱ ^c i e ⁿ t l ^y ^d ^u r i n ^g ² ⁰ 1 8 , t h ^e ^B ^o ^a r d ⁱ ^s i n ^v ^e ^r ^y ^g ^o ^o ^d ^s ^h ^a ^p ^e , ⁱ ^s ^b ^a l a ⁿ ^c ^e ^d ^a ⁿ ^d i n ^a ^c ^c ^o r d ^a ⁿ ^c ^e ^w i t h t h ^e ^b ^e ^s ^t ^c ^o r p ^o r a t e ^g ^o ^v ^e r n ^a ⁿ ^c ^e ^p r a ^c t i ^c ^e ^s . I t ⁱ ^s ^a ^w ^e l l ^c ^o ^h ^e ^s ⁱ ^v ^e ^B ^o ^a r d , t h ^e ^p ^o ^s i t i ^v ^e ^p ^e ^r ^c ^e ^p t i o ⁿ t h ^a ^t ^a l l t h ^e ^d i r e ^c t o ^r ^s ^h ^a ^v ^e r e ^g ^a r d i n ^g t h ^e ^C ^h ^a i r m ^a ⁿ ^o ^f t h ^e ^B ^o ^a r d ^a ⁿ ^d t h ^e ^p ^e ^r ^f ^o r m ^a ⁿ ^c ^e ^o ^f t h ^e i r ^d ^u t i e ^s ^b ^e i n ^g ^u ⁿ ^a ⁿ i m ^o ^u ^s . I n ^p ^a r t i ^c ^u l a r , ^b ^o t h t h ^e ^c ^o ^m ^p ^o ^s i t i o ⁿ ( ^d ⁱ ^v ^e ^r ^s i t ^y , ^k ⁿ ^o ^w l e ^d ^g ^e ^a ⁿ ^d ^e ^x ^p ^e r i e ⁿ ^c ^e ^o ^f t h ^e ^m ^e ^m ^b ^e ^r ^s ^o ^f t h ^e ^B ^o ^a r d ^a ⁿ ^d t h ^e i r ^C ^o ^m ^m i t t e ^e ^s ^a ⁿ ^d , i n ^p ^a r t i ^c ^u l a r , ^o ^f t h ^e i r ^C ^h ^a i r m ^a ⁿ ^s , ^d ^e ^d ⁱ ^c ^a t i o ⁿ ^a ⁿ ^d ^c r i t i ^c ^a ^l ^a t t i t u ^d ^e t h ^e r e ^o ^f ) ^a ⁿ ^d t h ^e ^f ^u ⁿ ^c t i o ⁿ i n ^g ^o ^f t h ^e ^B ^o ^a r d ^a ⁿ ^d t h ^e ^C ^o ^m ^m i t t e ^e ^s ( ^f r e ^q ^u ^e ⁿ ^c ^y , ^d ^u r a t i o ⁿ ^a ⁿ ^d ^e f f ^e ^c t i ^v ^e ⁿ ^e ^s ^s ^o ^f t h ^e i r ^m ^e ^e t i n ^g ^s , ^a t t e ⁿ ^d ^a ⁿ ^c ^e ^a ^t ^m ^e ^e t i n ^g ^s ^o ^f t h ^e i r ^m ^e ^m ^b ^e ^r ^s , ^a ^g ^e ⁿ ^d ^a ^o ^f t h ^e ^m ^e ^e t i n ^g ^s , ^e ^x ^e ^r ^c ⁱ ^s ^e ^o ^f t h ^e i r ^c ^o ^m ^p ^e t e ⁿ ^c ^e ^s , ^a ⁿ ^d ^a ^d ^v ⁱ ^c ^e , i n ^c l u ^d i n ^g ^e ^x t e r n ^a ^l ^a ^d ^v ⁱ ^c ^e ⁱ ^f ⁿ ^e ^c ^e ^s ^s ^a ^r ^y ) ^w ^e r e ^a ^s ^s ^e ^s ^s ^e ^d ^v ^e ^r ^y ^p ^o ^s i t i ^v ^e ^l ^y . I t ^w ^a ^s ^a ^l ^s ^o ^f ^o ^u ⁿ ^d t h ^a ^t t h ^e ^C ^o ^m ^p ^a ⁿ ^y ⁱ ^s ^a ^b ^e ⁿ ^c ^h ^m ^a r k ^f ^o ^r ^c ^o ^m ^p l i a ⁿ ^c ^e ^a ⁿ ^d i m ^p l e ^m ^e ⁿ t a t i o ⁿ ^o ^f t h ^e ^m ^a i n ^c ^o r p ^o r a t e ^g ^o ^v ^e r n ^a ⁿ ^c ^e ^p ^a r a ^m ^e t e ^r ^s .
· ^A r e ^a ^s ^o ^f i m ^p r o ^v ^e ^m ^e ⁿ ^t ^w ^e r e ^d ^e t e ^c t e ^d , ^s ^u ^c ^h ^a ^s t h ^e ⁿ ^e ^e ^d t o ^d ^e ^v ^e l o ^p ^a ^m ^a t r i ^x ^o ^f ^c ^a ^p ^a ^b i l i t i e ^s ^o ^f t h ^e ^B ^o ^a r d , r e ^v i e ^w t h ^e r e ^m ^u ⁿ ^e r a t i o ⁿ ^o ^f t h ^e ^M ^a ⁿ ^a ^g ^e ^m ^e ⁿ ^t t e ^a ^m ^a ⁿ ^d t h ^e ^D i r e ^c t o ^r ^s , ^d ^e ^l ^v ^e i n t o t h ^e ^s ^u ^c ^c ^e ^s ^s i o ⁿ ^p l a ⁿ ^s , t h ^e i m ^p l e ^m ^e ⁿ t a t i o ⁿ ^o ^f t h ^e ⁿ ^e ^w t e ^c ^h ⁿ ⁱ ^c ^a ^l ^g ^u i d ^e ^o ^f t h ^e ^C ^N ^M ^V ^o ⁿ ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^C ^o ^m ^m i t t e ^e ^s , ^a ^s ^s ^e ^s ^s t h ^e ^a ^d ^v ⁱ ^s ^a ^b i l i t ^y ^o ^f ^a ^p ^p ^o i n t i n ^g ^a ^v ⁱ ^c ^e ^C ^h ^a i r m ^a ⁿ ^o ^r t h ^e ^o b j ^e ^c t i ^v ^e t h ^a ^t ^m ^o r e t h ^a ⁿ ⁵ ⁰ % ^o ^f t h ^e ^m ^e ^m ^b ^e ^r ^s ^o ^f t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^s ^C ^o ^m ^m i t t e ^e ^w ^e r e i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ t .
· ^T ^h ^e ^B ^o ^a r d ^a ^p ^p r o ^v ^e ^d ^a ⁿ ^a ^c t i o ⁿ ^p l a ⁿ t o ^c ^o ^m ^p ^l ^y ^w i t h t h ^e ^s ^e ^a ⁿ ^d ^o t h ^e ^r r e ^c ^o ^m ^m ^e ⁿ ^d ^a t i o ⁿ ^s t h ^a ^t ^h ^a ^v ^e ^a l r e ^a ^d ^y ^b ^e ^e ⁿ i m ^p l e ^m ^e ⁿ t e ^d . ^T ^h ^u ^s , ^a ^m ^o ⁿ ^g ^o t h ^e ^r ⁱ ^s ^s ^u ^e ^s , t h ^e ^f ^o l l o ^w i n ^g ^w ^a ^s ^a ^d ^d r e ^s ^s ^e ^d i n ² ⁰ 1 9 : ( ⁱ ) t h ^e ^a ^d ^e ^q ^u ^a ^c ^y ^o ^f t h ^e r e ^m ^u ⁿ ^e r a t i o ⁿ ^o ^f ^b ^o t h i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^t ^D i r e ^c t o ^r ^s ^a ⁿ ^d ^S ^e ⁿ i o ^r ^E ^x ^e ^c ^u t i ^v ^e ^s ^h ^a ^s ^b ^e ^e ⁿ r e ^v i e ^w ^e ^d , ( i i ) ^a ⁿ ^a ^m ^e ⁿ ^d ^m ^e ⁿ ^t t o t h ^e ^B ^o ^a r d ^R ^e ^g ^u l a t i o ⁿ ^s ^a ⁿ ^d t h ^e ^A ^u ^d i t ^a ⁿ ^d ^C ^o ⁿ t r o ^l ^C ^o ^m ^m i t t e ^e ^R ^e ^g ^u l a t i o ⁿ ^s ^h ^a ^s ^b ^e ^e ⁿ ^a ^p ^p r o ^v ^e ^d , ( i i i ) ^a ⁿ ^e ^w ^R ^e ^g ^u l a t i o ⁿ ^o ^f t h ^e ^A ^p ^p ^o i n t m ^e ⁿ ^t ^s ^a ⁿ ^d ^R ^e ^m ^u ⁿ ^e r a t i o ⁿ ^C ^o ^m ^m i t t e ^e ^h ^a ^s ^b ^e ^e ⁿ ^a ^p ^p r o ^v ^e ^d ; ( ⁱ ^v ) i t ^h ^a ^s ^d ^e ^e ^p ^e ⁿ ^e ^d ⁱ ^s ^s ^u ^e ^s ^s ^u ^c ^h ^a ^s ^s ^u ^c ^c ^e ^s ^s i o ⁿ ^p l a ⁿ ^s ^o ^r t h ^e ^c ^o ⁿ ^v ^e ⁿ i e ⁿ ^c ^e ^o ^f ^a ^p ^p ^o i n t i n ^g ^a ^v ⁱ ^c ^e ^C ^h ^a i r m ^a ⁿ ; ^a ⁿ ^d ( ^v ) ^a ^c ^o ^m ^p ^e t e ⁿ ^c ^y ^m ^a t r i ^x ^o ^f t h ^e ^B ^o ^a r d ^h ^a ^s ^b ^e ^e ⁿ ^d ^e ^v ^e l o ^p ^e ^d ^a ⁿ ^d ^a ^p ^p r o ^v ^e ^d .
^C . ¹ . ² ⁰ . t e ^r ^G i v ^e ^a ^b ^r ^e ^a ^k ^d ^o ^w ⁿ , ^a ^s t h ^e ^c ^a ^s ^e ^m ^a ^y ^b ^e , ^o ^f t h ^e ^b ^u ^s i n ^e ^s ^s ^d ^e ^a l i n ^g ^s t h ^a ^t t h ^e f a ^c i l i t a t o ^r ^o ^r ^a ⁿ ^y ^c ^o ^m ^p ^a ⁿ ^y i n i t s ^c ^o ^r ^p ^o ^r ^a t e ^g ^r ^o ^u ^p ^m ^a i n t a i n ^s ^w i t h t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^o ^r ^a ⁿ ^y ^c ^o ^m ^p ^a ⁿ ^y i n i t s ^c ^o ^r ^p ^o ^r ^a t e ^g ^r ^o ^u ^p .

^C . 1 . 2 ¹ ^I ⁿ ^d i c ^a t e t h ^e ^c i r ^c ^u ^m ^s t a ⁿ ^c ^e ^s ^u ⁿ ^d ^e ^r ^w ^h i c ^h ^d i r ^e ^c t o ^r ^s ^a ^r ^e ^o ^b l i g ^e ^d t o ^r ^e ^s i g ⁿ .

^A ^c ^c ^o r d i n ^g t o ^A r t i ^c l e ² ³ ^o ^f t h ^e ^R ^e ^g ^u l a t i o ⁿ ^s ^o ^f t h ^e ^B ^o ^a r d ^o ^f ^D i r e ^c t o ^r ^s :

^C . 1 . 2 ² ^S ^e ^c t i o ⁿ ^r ^e ^p ^e ^a l e ^d

^e ^s ^c ^r ⁱ

^C . 1 . 2 ³ ^A ^r ^e ^q ^u ^a l i f i e ^d ^m ^a ^j ^o ^r i t i e ^s ^o t h ^e ^r t h ^a ⁿ t h ^o ^s ^e ^p ^r ^e ^s ^c ^r ⁱ ^b ^e ^d ^b ^y l a ^w ^r ^e ^q ^u i r ^e ^d f o ^r ^a ⁿ ^y ^d ^e ^c i s i o ⁿ ^s ?

^Y ^e ^s ^N ^o ^X

^D ^b

^e t h ^e ^d i f f e ^r ^e ⁿ ^c ^e ^s , i f ^a ⁿ ^y :

^Y ^e ^s ^N ^o ^X

^D ^e ^s ^c ^r i p t i o ⁿ ^o ^f t h ^e ^r ^e ^q ^u i r ^e ^m ^e ⁿ t s

^C . 1 . 2 ⁵ ^I ⁿ ^d i c ^a t e ^w ^h ^e t h ^e ^r t h ^e ^c ^h ^a i r ^m ^a ⁿ ^h ^a ^s t h ^e ^c ^a ^s t i n ^g ^v ^o t e :

^Y ^e ^s ^X ^N ^o

^M ^a t t e ^r ^s f o ^r ^w ^h i c ^h t h ^e ^c ^h ^a i r ^m ^a ⁿ ^h ^a ^s t h ^e ^c ^a ^s t i n ^g ^v ^o t e

^C . 1 . 2 ⁶ ^I ⁿ ^d i c ^a t e ^w ^h ^e t h ^e ^r t h ^e ^b ^y l a ^w ^s ^o ^r t h ^e ^b ^o ^a ^r ^d ^r ^e ^g ^u l a t i o ⁿ ^s ^s ^e ^t ^a ⁿ ^y ^a ^g ^e l i ^m i t f o ^r ^d i r ^e ^c t o ^r ^s :

^Y ^e ^s ^N ^o ^X

^g ^e l i ^m i t f o ^r ^c ^h ^a i r ^m ^a ⁿ

^m C^E ^O ^A

i t ^f ^o ^r

^g ^e ^l ⁱ

^g ^e ^l ⁱ ^m

i t ^f ^o ^r ^d i r ^e ^c ^t ^o ^r ^s

e s Y	N o	X

^M ^a ^x ⁱ ^m ^u ^m t e ^r ^m ^o ^f ^o f f i c ^e ( ^y ^e ^a ^r ^s )

e e t i n g s N u e r o f o a r d m b b m	1 7
e e t i n g s h e l d i t h o u t t h e c h a i r i n N u e r o f o a r d w a n m b b m m
a t t e n d a n c e	0

e e t i n g s N u e r o f m b m

^I ⁿ ^d i c ^a t e t h ^e ⁿ ^u ^m ^b ^e ^r ^o ^f ^m ^e ^e t i n ^g ^s t h ^e ^v ^a ^r i o ^u ^s ^b ^o ^a ^r ^d ^c ^o ^m ^m i t t e ^e ^s ^h ^e l d ^d ^u ^r i n ^g t h ^e ^y ^e ^a ^r :

e x e c u t i v e i t t e e e e t i n g s N u e r o f c o m b m m m	/ A N
a u d i t & c o n t r o l c o i t t e e e e t i n g s N u e r o f m b m m m	1 0
a p p o i n t e n t s u n e r a t i o n i t t e e e e t i n g s N u e r o f a n d r e c o m b m m m m m	6
i n a t i o n i t t e e e e t i n g s N u e r o f n o c o m b m m m m	/ A N
u n e r a t i o n i t t e e e e t i n g s N u e r o f r e c o m b m m m m	/ A N
s u s t a i n a i l i t y i t t e e e e t i n g s N u e r o f c o m b b m m m	/ A N

^C . 1 . 3 ⁰ ^I ⁿ ^d i c ^a t e t h ^e ⁿ ^u ^m ^b ^e ^r ^o ^f ^b ^o ^a ^r ^d ^m ^e ^e t i n ^g ^s ^h ^e l d ^d ^u ^r i n ^g t h ^e ^y ^e ^a ^r ^w i t h ^a l l ^m ^e ^m ^b ^e ^r ^s i n ^a t t e ⁿ ^d ^a ⁿ ^c ^e . ^T ^h i s ^c ^a l c ^u l a t i o ⁿ ^s ^h ^o ^u l d i n ^c l u ^d ^e ^p ^r ^o ^x i e ^s ^a ^p ^p ^o i n t e ^d ^w i t h ^s ^p ^e ^c i f i c ^v ^o t i n ^g i n ^s t r ^u ^c t i o ⁿ ^s ^a ^s ^a t t e ⁿ ^d ^a ⁿ ^c ^e ^s :

e e t i n g s h e l d i t h a l l i n a t t e n d a n c e N u e r o f w e e r s m b m m m b %	1 7
a t t e n d a n c e t o t a l v o t e s i n t h e o v e r c a s t y e a r	1 0 0 %

^Y ^e ^s ^N ^o ^X

^I ^d ^e ⁿ t i f y , i f ^a ^p ^p ^r ^o ^p ^r i a t e , t h ^e ^p ^e ^r ^s ^o ⁿ ( ^s ) ^c ^e ^r t i f y i n ^g t h ^e ^s ^e ^p ^a ^r ^a t e ^a ⁿ ^d ^c ^o ⁿ ^s ^o l i d ^a t e ^d

N a e m	o s i t i o n P

^C . 1 . 3 ² ^E ^x ^p l a i n t h ^e ^m ^e ^c ^h ^a ⁿ i s ^m ^s , i f ^a ⁿ ^y , ^e ^s t a ^b l i s ^h ^e ^d ^b ^y t h ^e ^b ^o ^a ^r ^d ^o ^f ^d i r ^e ^c t o ^r ^s t o ^p ^r ^e ^v ^e ⁿ ^t t h ^e ^s ^e ^p ^a ^r ^a t e ^a ⁿ ^d ^c ^o ⁿ ^s ^o l i d ^a t e ^d f i n ^a ⁿ ^c i a ^l ^s t a t e ^m ^e ⁿ t s f r ^o ^m ^b ^e i n ^g ^p ^r ^e ^s ^e ⁿ t e ^d ^a ^t t h ^e ^g ^e ⁿ ^e ^r ^a ^l ^s ^h ^a ^r ^e ^h ^o l d ^e ^r ^s ' ^m ^e ^e t i n ^g ^w i t h ^a ^q ^u ^a l i f i e ^d ^a ^u ^d i t ^r ^e ^p ^o ^r ^t .

^C . 1 . 3 ³ ^I ^s t h ^e ^s ^e ^c ^r ^e t a ^r ^y ^o ^f t h ^e ^b ^o ^a ^r ^d ^a l s ^o ^a ^d i r ^e ^c t o ^r ?

^Y ^e ^s ^N ^o ^X

^I ^f t h ^e ^s ^e ^c ^r ^e t a ^r ^y i s ⁿ ^o ^t ^a ^d i r ^e ^c t o ^r , ^p l e ^a ^s ^e f i l l ^o ^u ^t t h ^e f o l l o ^w i n ^g t a ^b l e :

t h e s e c r e t a r y N a e o r c o p a n y n a e o f m m m	e p r e s e n t a t i v e R
e z ï A J u a n G ó m c e b o

^C . 1 . 3 ⁴ ^S ^e ^c t i o ⁿ ^r ^e ^p ^e ^a l e ^d

^C . 1 . 3 ⁵ ^I ⁿ ^d i c ^a t e t h ^e ^m ^e ^c ^h ^a ⁿ i s ^m ^s , i f ^a ⁿ ^y , ^e ^s t a ^b l i s ^h ^e ^d ^b ^y t h ^e ^c ^o ^m ^p ^a ⁿ ^y t o ^p ^r ^e ^s ^e ^r ^v ^e t h ^e i n ^d ^e ^p ^e ⁿ ^d ^e ⁿ ^c ^e ^o ^f t h ^e ^a ^u ^d i t o ^r , f i n ^a ⁿ ^c i a ^l ^a ⁿ ^a l y ^s t s , i n ^v ^e ^s ^t ^m ^e ⁿ ^t ^b ^a ⁿ ^k ^s ^a ⁿ ^d ^r ^a t i n ^g ^a ^g ^e ⁿ ^c i e ^s .

^c . I n r e l a t i o ⁿ t o t h ^e ^e ^x t e r n ^a ^l ^a ^u ^d i t o ^r :

¹ ^s t . ^d ^e ^f i n ^e t h ^e ^a ^u ^d i t o ^r ' s ^s ^e l e ^c t i o ⁿ ^p r o ^c ^e ^d ^u r e ; ^a ⁿ ^d

^T ^h ^e ^C ^o ^m ^m ^u ⁿ ⁱ ^c ^a t i o ⁿ ^a ⁿ ^d ^C ^o ⁿ t a ^c ^t ^P ^o l i ^c ^y ^w i t h ^s ^h ^a r e ^h ^o l d ^e ^r ^s ^a ⁿ ^d i n ^v ^e ^s t o ^r ^s , ^a ^p ^p r o ^v ^e ^d i n

^T ^h ^e ^b ^a ^s ⁱ ^c ^p r i n ^c i p l e ^s ^o ^f i t ^a r e :

^a ) ^T r u t h ^f ^u l n ^e ^s ^s , t r a ⁿ ^s ^p ^a r e ⁿ ^c ^y ^a ⁿ ^d ^e ^q ^u ^a l i t ^y ^o ^f t h ^e i n ^f ^o r m ^a t i o ⁿ ^c ^o ^m ^m ^u ⁿ ⁱ ^c ^a t e ^d .

^C . 1 . 3 ⁶ ^I ⁿ ^d i c ^a t e ^w ^h ^e t h ^e ^r t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^h ^a ^s ^c ^h ^a ⁿ ^g ^e ^d ^e ^x t e ^r ⁿ ^a ^l ^a ^u ^d i t o ^r ^d ^u ^r i n ^g t h ^e ^y ^e ^a ^r . ^I ^f ^s ^o , i d ^e ⁿ t i f y t h ^e ^o ^u t g ^o i n ^g ^a ⁿ ^d i n ^c ^o ^m i n ^g ^a ^u ^d i t o ^r :

e s Y		N o	X
----------	--	--------	---

u t g o i n g a u d i t o r O	i n g a u d i t o r n c o I m

^I ⁿ t h ^e ^e ^v ^e ⁿ ^t ^o ^f ^d i s ^a ^g ^r ^e ^e ^m ^e ⁿ t s ^w i t h t h ^e ^o ^u t g ^o i n ^g ^a ^u ^d i t o ^r , ^e ^x ^p l a i n t h ^e ^s ^u ^b ^s t a ⁿ ^c ^e t h ^e ^r ^e ^o f :

^Y ^e ^s ^N ^o ^X

x p l a n a t i o n t h e d i s a g r e e e n t s o f E m

e s Y		N o	X
----------	--	--------	---

	o p a n y C m	r o u p G	o t a l T
f o r n o n Æ a u d i t w ( t h o u s a n d s e e s o r k o f e u r o s ) F	0	0	0 %
e e s f o r n o n ) a u d i t w / t o t a l a m F o r k o u n t i n v o i c e d b y t h ( % e a u d i t f i r m )	0 %	0 %	0

^Y ^e ^s ^N ^o ^X

x p l a n a t i o n t h e o f r e a s o n s E

	o p a n y C m	r o u p G
o f c o n s e c u t i v e N u m b e r y e a r s	6	6

	o p a n y C m	r o u p G

	o p a n y C m	r o u p G
a u d i t e d t h e c u r r e n t a u d i t f i r m N u m b e r o f y e a r s b y / n u m b e r o f	1 0 0	1 0 0
t h e p a n y ' s f i n a n c i a l s t a t e m a u d i t e d ( % ) y e a r s c o m e n t s h a v e b e e n

^C . ¹ . ⁴ ⁰ ^I ⁿ ^d i c ^a t e ^w ^h ^e t h ^e ^r t h ^e ^r ^e ^a ^r ^e ^p ^r ^o ^c ^e ^d ^u ^r ^e ^s i n ^p l a ^c ^e f o ^r ^d i r ^e ^c t o ^r ^s t o ^r ^e ^c ^e i v ^e ^e ^x t e ^r ⁿ ^a ^l ^a ^d ^v i c ^e :

^Y ^e ^s ^X ^N ^o

^D ^e t a i l s ^o ^f t h ^e ^p ^r ^o ^c ^e ^d ^u ^r ^e :

^A r t i ^c l e ² ⁶ ^o ^f t h ^e ^B ^o ^a r d ^R ^e ^g ^u l a t i o ⁿ ^s ^s t i p ^u l a t e ^s :

a . I t ⁱ ^s ⁿ ^o ^t ⁿ ^e ^c ^e ^s ^s ^a ^r ^y t o ^d ^u ^e ^p ^e ^r ^f ^o r m ^a ⁿ ^c ^e ^o ^f t h ^e ^d ^u t i e ^s i n ^c ^u ^m ^b ^e ⁿ ^t ^u ^p ^o ⁿ t h ^e ^e ^x t e r n ^a ^l ^d i r e ^c t o ^r ^s ;
b . I t ^s ^c ^o ^s ^t ⁱ ^s ⁿ ^o ^t r e ^a ^s ^o ⁿ ^a ^b l e i n l i ^g ^h ^t ^o ^f t h ^e ^s ^c ^a l e ^o ^f t h ^e ⁱ ^s ^s ^u ^e ^o ^r i n r e l a t i o ⁿ t o t h ^e

^C ^o ^m ^p ^a ⁿ ^y ' s ^a ^s ^s ^e t s ^o ^r r e ^v ^e ⁿ ^u ^e ^s ; ^o ^r

c . ^T ^h ^e ^e ^x ^p ^e r t i s ^e ^s ^o ^u ^g ^h ^t ^c ^a ⁿ ^b ^e ^a ^d ^e ^q ^u ^a t e l y f u r n i s ^h ^e ^d ^b ^y t h ^e ^C ^o ^m ^p ^a ⁿ ^y ' s ^o ^w ⁿ ^e ^x ^p ^e r t ^s ^a ⁿ ^d ^s ^p ^e ^c i a l i ^s ^t ^s .
^C . 1 . 4 ¹ ^I ⁿ ^d i c ^a t e ^w ^h ^e t h ^e ^r t h ^e ^r ^e ^a ^r ^e ^p ^r ^o ^c ^e ^d ^u ^r ^e ^s f o ^r ^p ^r ^o ^v i d i n ^g ^d i r ^e ^c t o ^r ^s ^w i t h t h ^e i n f o ^r ^m ^a t i o ⁿ t h ^e ^y ⁿ ^e ^e ^d t o ^p ^r ^e ^p ^a ^r ^e f o ^r t h ^e ^m ^e ^e t i n ^g ^s ^o ^f t h ^e ^g ^o ^v ^e ^r ⁿ i n ^g ^b ^o ^d i e ^s ^s ^u f f i c i e ⁿ t l y i n ^a ^d ^v ^a ⁿ ^c ^e :

^Y ^e ^s ^X ^N ^o

^D ^e t a i l s ^o ^f t h ^e ^p ^r ^o ^c ^e ^d ^u ^r ^e :

^A r t i ^c l e 1 6 ^o ^f t h ^e ^B ^o ^a r d ^R ^e ^g ^u l a t i o ⁿ ^s ^e ^s t a ^b l i ^s ^h ^e ^s t h ^e ^f ^o l l o ^w i n ^g ^u ⁿ ^d ^e ^r ^h ^e ^a ^d i n ^g ^s ³ ^a ⁿ ^d ⁴ :

I n ^a ^d ^d i t i o ⁿ , ^a r t i ^c l e ² ⁵ ^o ^f t h ^e ^B ^o ^a r d ^R ^e ^g ^u l a t i o ⁿ ^s ^s t i p ^u l a t e ^s :

^C . 1 . 4 ² ^I ⁿ ^d i c ^a t e ^w ^h ^e t h ^e ^r t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^h ^a ^s ^a ⁿ ^y ^r ^u l e ^s ^o ^b l i g i n ^g ^d i r ^e ^c t o ^r ^s t o i n f o ^r ^m t h ^e ^b ^o ^a ^r ^d ^o ^f ^a ⁿ ^y ^c i r ^c ^u ^m ^s t a ⁿ ^c ^e t h ^a ^t ^m i g ^h ^t ^h ^a ^r ^m t h ^e ^o ^r ^g ^a ⁿ i s ^a t i o ⁿ ' s ^g ^o ^o ^d ⁿ ^a ^m ^e ^o ^r ^r ^e ^p ^u t a t i o ⁿ ^a ⁿ ^d t e ⁿ ^d ^e ^r i n ^g t h ^e i r ^r ^e ^s i g ⁿ ^a t i o ⁿ ^a ^s t h ^e ^c ^a ^s ^e ^m ^a ^y ^b ^e :

^Y ^e ^s ^X ^N ^o

^D ^e t a i l s ^o ^f t h ^e ^r ^u l e ^s

^A r t i ^c l e ³ ⁶ ^o ^f t h ^e ^B ^o ^a r d ^R ^e ^g ^u l a t i o ⁿ ^s ^s t i p ^u l a t e ^s :

² . ^D i r e ^c t o ^r ^s ^m ^u ^s ^t ^a ^l ^s ^o i n ^f ^o r m t h ^e ^C ^o ^m ^p ^a ⁿ ^y ^o ^f ^d i r e ^c t o ^r ^s ^h i p ^s ^h ^e l d ^a ^t ^o t h ^e ^r l i ^s t e ^d

^C . 1 . 4 ³ ^I ⁿ ^d i c ^a t e ^w ^h ^e t h ^e ^r ^a ⁿ ^y ^m ^e ^m ^b ^e ^r ^o ^f t h ^e ^b ^o ^a ^r ^d ^o ^f ^d i r ^e ^c t o ^r ^s ^h ^a ^s ⁿ ^o t i f i e ^d t h ^e ^c ^o ^m ^p ^a ⁿ ^y t h ^a ^t ^h ^e ^o ^r ^s ^h ^e ^h ^a ^s ^b ^e ^e ⁿ i n ^d i c t e ^d ^o ^r t r i e ^d f o ^r ^a ⁿ ^y ^o ^f t h ^e ^o f f e ⁿ ^c ^e ^s l i s t e ^d i n ^a ^r t i c l e ² ¹ ³ ^o ^f t h ^e ^S ^p ^a ⁿ i s ^h ^C ^o ^r ^p ^o ^r ^a t e ^E ⁿ t e ^r ^p ^r i s ^e ^s ^A ^c t :

^e ^s ^N ^o ^X

d i r e c t o r N a e o f m	f f e n c e O	s e r v a t i o n s O b

^Y ^e ^s ^N ^o

e c i s i o n / a c t i o n t a k e n D	s t a n t i a t e d e x p l a n a t i o n u S b

^C . 1 . 4 ⁴ ^L i s ^t ^a ⁿ ^y ^s i g ⁿ i f i c ^a ⁿ ^t ^a ^g ^r ^e ^e ^m ^e ⁿ t s ^e ⁿ t e ^r ^e ^d i n t o ^b ^y t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^w ^h i c ^h t a ^k ^e ^e f f e ^c t , ^a l t e ^r ^o ^r t e ^r ^m i n ^a t e ^u ^p ^o ⁿ ^a ^c ^h ^a ⁿ ^g ^e ^o ^f ^c ^o ⁿ t r ^o ^l ^o ^f t h ^e ^c ^o ^m ^p ^a ⁿ ^y f o l l o ^w i n ^g ^a t a ^k ^e ^o ^v ^e ^r ^b i d ^a ⁿ ^d t h ^e ^e f f e ^c t s t h ^e ^r ^e ^o f .
^C . 1 . 4 ⁵ ^I ⁿ ^d i c ^a t e ( i n ^d i v i d ^u ^a l l y ^a ⁿ ^d ^o ⁿ ^a ^g ^g ^r ^e ^g ^a t e ) t h ^e ^a ^g ^r ^e ^e ^m ^e ⁿ t s ^b ^e t w ^e ^e ⁿ t h ^e ^c ^o ^m ^p ^a ⁿ ^y ^a ⁿ ^d i t s ^d i r ^e ^c t o ^r ^s , ^o f f i c ^e ^r ^s ^o ^r ^e ^m ^p l o ^y ^e ^e ^s t h ^a ^t ^p ^r ^o ^v i d ^e f o ^r t e ^r ^m i n ^a t i o ⁿ ^b ^e ⁿ ^e f i t s ^o ^r ^g ^u ^a ^r ^a ⁿ t e ^e ^o ^r ^g ^o l d ^e ⁿ ^p ^a ^r ^a ^c ^h ^u t e ^c l a ^u ^s ^e ^s ^u ^p ^o ⁿ t h ^e i r ^r ^e ^s i g ⁿ ^a t i o ⁿ ^o ^r ^u ⁿ f a i r ^d i s ^m i s ^s ^a ^l ^o ^r t e ^r ^m i n ^a t i o ⁿ ^o ^f t h ^e ^e ^m ^p l o ^y ^m ^e ⁿ ^t ^r ^e l a t i o ⁿ ^s ^h i p ^a ^s ^a ^r ^e ^s ^u l t ^o ^f ^a t a ^k ^e ^o ^v ^e ^r ^b i d ^o ^r ^o t h ^e ^r ^k i n ^d ^o ^f t r ^a ⁿ ^s ^a ^c t i o ⁿ .

e n e f i c i a r i e s N u e r o f m b b
e n e f i c i a r y y p e o f T b	e s c r i p t i o n o f t h e a g r e e e n t D m

	d i r e c t o r s o a r d o f	e e t i n g e n e r a l G m
a u t h o r i s i n g t h e o d y c l a u s e s B	B

	e s Y	N o
s h a r e h o l d e r s i n f o r t h e s e c l a u s e s i n r e e d o f g e n e r a l A m
e e t i n g ? m

^C . 2 . ^o ^a ^r ^d ^c ^o ^m ^m i t t e ^e ^s

^E ^X ^E ^C ^T ^I ^V ^E ^O ^R ^S ^T ^E ^E ^R ^I ^N ^G ^C ^O ^M ^M ^I ^T ^T ^E ^E

N a e m	o s i t i o n P	c a t e g o r y J o b

e x e c u t i v e d i r e c t o r s % o f
p r o p r i e t a r y d i r e c t o r s % o f
i n d e p e n d e n t d i r e c t o r s % o f
o t h e r e x t e r n a l d i r e c t o r s % o f

^D ^u t i e ^s

^O ^r ^g ^a ⁿ i s ^a t i o ⁿ ^a ⁿ ^d ^o ^p ^e ^r ^a t i o ⁿ

^A ^c t i v i t i e ^s

^Y ^e ^s ^N ^o

N a e m	o s i t i o n P	c a t e g o r y J o b
L e t i c i a I g l e s i a s	h a i r m C a n	I n d e p e n d e n t
a l l e J o s é L u i s d e l V	M e m b e r	I n d e p e n d e n t
g u i l e r a I s a b e l A	M e m b e r	I n d e p e n d e n t
e z ï A J u a n G ó m c e b o	S e c r e t a r y	o n ï b o a r d N
		m e m b e r

^f ⁿ ^o t , ^d ^e ^s ^c ^r ⁱ ^b ^e t h ^e ^c ^o ^m ^p ^o ^s i t i o ⁿ ^o ^f t h ^e ^e ^x ^e ^c ^u t i v ^e ^o ^r ^s t e ^e ^r i n ^g ^c ^o ^m ^m i t t e ^e ^A ^D ^I ^T ^C ^O ^M ^M ^I ^T ^T ^E ^E

p r o p r i e t a r y d i r e c t o r s % o f	0
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o t h e r e x t e r n a l d i r e c t o r s % o f	0