The Company has prepared a Code of Conduct and Eth- ics and Internal SPCC Conduct Regulations dealing with  Major Events, Reserved Information and other Communi- cations. These regulations were approved by the Board of  Directors and apply also to our Internal Audit Manage- ment Office.  11. The Board will perform certain key functions,  namely: Evaluating, approving and guiding the corporation’s  strategy; determining the company’s main action  plans, risk follow-up, monitoring and management  policies; design its annual budgets and business  plans, and monitor their implementation; oversee the  company’s main expenses, investments, acquisitions  and sales.  (Principle V.D.1) X The Board approves the corporation’s development  strategy, objectives, annual goals and action plans. Every  quarter the Board reviews the Company’s progress in  meeting its objectives, although Management performs  this function on a daily and monthly basis. Every year, the  Board approves the expenditures budget and operation  expenses, and the capital investments for operations and  projects alike. 12. The Board will perform certain key functions,  namely: Screening, monitoring and, if needed, replacing se- nior management and fix their remuneration. (Principle V.D.2) X The Chairman of the Board, in coordination with Man- agement or the Compensations Committee, will establish  the remuneration of senior management and evaluate  their performance. If appropriate, it will take the mea- sures aimed at replacing them with professionals with the  competencies needed to manage the Corporation.  its Board and Management.  (Principle IV.F, first paragraph) REASONS FOR THE CHOSEN OPTION COMPLIANCE PRINCIPLE 0  1  2  3  4  SOUTHERN PERU COPPER CORPORATION 36. SOUTHERN PERU COPPER CORPORATION 37. The number of Board members and their appointment  are clearly set forth in the Company’s bylaws. A formal  procedure is in place to appoint and decide the Board’s  allowance. To this end, the Board has created the  Appointments/Corporate Governance Committee. 14. The Board will perform certain key functions,  namely: Monitor and follow up likely conflicts of interest be- tween management, Board members and sharehold- ers, including fraud in using corporate assets and  abuse in transactions amongst stakeholders.  (Principle V.D.4) X The Company’s Code of Conduct and Ethics establishes  the guidelines to address conflicts of interest.  In addition, likely conflicts of interest or transactions  amongst stakeholders are reported by Management  to the Board’s Audit Committee, which in turn will  evaluate and monitor them, and report to the Board on  these eventual conflicts. The Committee has in place a  procedure for filing complaints open to any shareholder,  worker or stakeholder group wishing to use it.  13. The Board will perform certain key functions,  namely: Evaluate senior management’s and Board mem- bers’ compensation, and ensuring the procedure  for appointing Board members will be both formal  and transparent. (Principle V.D.3)  X 15. The Board will perform certain key functions,  namely: To ensure the Company’s accounting system and  financial statements are independently audited, and  that the appropriate control systems–in particular  X The Board meets this requirement fully through its de- tailed monitoring of the status and appropriateness of  the Company’s accounting systems and Financial State- ments.  COMPLIANCE PRINCIPLE REASONS FOR THE CHOSEN OPTION 0  1  2  3  4 