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## PRINCIPLE 

26. It seems advisable management receives compensa- tion that is at least partly determined by the compa- ny’s results, so as to ensure they meet the goal of maximizing value for the company’s shareholders. (Principle V.I.5.) 

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## REASONS FOR THE CHOSEN OPTION 

Part of management’s compensation is linked to the corporation’s results through a profit sharing and perfor- mance bonds program. 

## ECONOMIC RELATIONS WITH OTHER COMPANIES DUE TO LOANS THAT COMMIT MORE THAN 10% OF THE STOCKHOLDER’S EQUITY OF THE ISSUING ENTITY 

To date, there are no loans with other companies that compromise more than 10% of SPCC’s property. 

## ADMINISTRATIVE, JUDICIAL OR ARBITRATION PROCEEDINGS 

LITIGATION: See Note to Consolidated Financial State- ments. 

## CHANGES OF THOSE RESPONSIBLE FOR THE PREPARATION AND REVISION OF THE FINANCIAL INFORMATION 

José N. Chirinos acts as Director of Comptroller and Fi- nance, and Marco A. García acts as Finance Manager. 

## INFORMATION RELATED TO STOCK EXCHANGED IN THE STOCK MARKET 

## Common Stock: 

On November 29, 1995, the Company offered to ex- change the recently issued common shares for all and any labor shares of the Peruvian Branch of the Company, at a ratio of one common share per four S-1 shares and one common share per five S-2 shares. The exchange expired on December 29, 1995, with 80.8% of the total labor outstanding stock exchanged for 11,479,667 common shares. These common shares are quoted in New York 

Stock Exchange and the Lima Stock Exchange, and are entitled to one vote per share. 

Along with the exchange of labor shares, the holders of common shares of the Company exchanged their shares for class A common shares, with the right to five votes per share. 

The class A common shares and the common shares have a nominal value of $0.01 per share. 

## CORPORATE BONDS: 

In November 2001, the Company was authorized by CONASEV to increase the $200 million program, approved in 2000, to $750 million; as part of this program, on April, 2003, the Company placed $25 millions in corporate bonds with a face value of $1,000 each, with investors in Peru. This issue matures in 2010 and has a floating interest rate equivalent to Libor + 2.375%. In addition, on May, 2003, the Company placed $25 million in corporate bonds with a face value of $1,000 each, with investors in Peru; this issue matures in 2010 and has a floating interest equiva- lent to Libor + 2.3125%. On February 2002, the Company placed $25.9 million in corporate bonds; this issue ma- tures in 2012 and has a floating interest rate equivalent to Libor + 3.00%. On December 2001, the Company placed 73.1 millions; this issue matures in 2011 and has a floating 

interest rate equivalent to Libor + 3.00%. In July and De- cember 2000, the Company placed $30 millions and $20 millions in corporate bonds; both issues mature in 2007 and generate a nominal interest rate of 8.75%. 

In January 2005, the Company opened a credit line worth US$200 million with a group of banks syndicated by Ci- tibank. On January 27, 2005, the Company paid US$150 million to repay bonds worth that amount issued in 2001, 2002 and 2003. In addition disbursements for US$20 millions and US$30 millions were made as prepayment on the balance of prior bond issues. The new credit line was opened for 5 years at LIBOR plus 1.25% on the first year; the spread will start increasing on the third year, and will increase 0.125% every year thereafter. Principal amortization will start on the third loan year. The Com- pany will pay bondholders a 1% or US$2 million penalty on advance repayment. 

As of December 31, 2004, $199.0 millions out of the $750-million program have already been issued. 

In the month of June 1997, the Company placed $50 mil- lions in corporate bonds with the same face value and the same market as the issues mentioned in the previ- ous paragraph. Nominal interest rate was set at 8.01% (8.25% effective), and will mature in June of 2004. 

