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Corporate Governance Practices NCG°385

Last update
10/10/25 3:12 AM

Operation and composition of the board

Practice Adopted

A

The Board of Directors has a procedure or mechanism for the induction of each new board member, which aims to facilitate the process of obtaining information about:

  1. The businesses, matters and risks, including those on sustainability, that are considered most relevant, as well as the reasons why in the Board's opinion they meet that condition.

    Explanation:
    The Company adopts this practice by incorporating the businesses, matters and risks considered relevant in the Company's Annual Report into a matter that will form part of the induction as well as relevant parts of the annual Sustainability Report (drafted according to the requirements of GRI4) available at https://www.aguasandinas.cl/la-empresa/desarrollo-sustentable/reporte-de-sustentabilidad, approved by the Board of Directors.

    - Additionally, the new board member is informed about the risk map that the Board of Directors reviews and analyzes in compliance with information provided by the Company's management every six months.
 SI
  1. The relevant stakeholders identified by the entity as well as the reasons why in the Board's opinion they possess this quality, and the main mechanisms that are used to understand expectations and maintain a stable and lasting relationship with them.

    Explanation:
    - The Company adopts this practice based on information contained in its Sustainability Report, in which stakeholder groups are identified annually, as well as mechanisms to maintain a strong dialogue with the community.
 SI
  1. The mission, vision, strategic objectives, principles and values that should guide the actions of the company, its directors and staff, and the policies of inclusion, diversity, sustainability and risk management approved by the Board of Directors.

    Explanation:
    - The Company adopts this practice considering that during the induction process of new Board Members issues such as the Company's mission, vision, strategic objectives, principles and values, sustainability, and risk management are covered; Additionally, the Company has become certified in the Chilean Norm 3262 about Gender Equality and Reconciliation of Work, Family and Personal Life Management Systems, and has created the People and Diversity business unit, whose main role is to generate proposals related to inclusion and diversity. All of these matters will also become a part of the induction to new Board Members. This will be done conjointly with the principles contained in the Code of Ethics approved by the Board of Directors and available at https://www.aguasandinasinversionistas.cl/en/corporate-governance/compliance/code-ethics
 SI
  1. The most relevant legal framework applicable to the entity, its Board of Directors and its senior executives.

    Explanation:
    - The Company adopts this practice, having an induction process that includes the most relevant legal framework applicable to the entity, its Board of Directors and its senior executives.
 SI
  1. The duties of care, confidentiality, loyalty, diligence and information that under current legislation are owed by each member of the Board of Directors, using examples of the most relevant cases, sanctions or pronouncements of such duties that have occurred in the last year at the national level.

    Explanation:
    - The Company adopts this practice, developing it based on applicable rules and jurisprudence that serves to illustrate to the Board Members the extent of the referenced duties.
 SI
  1. The main agreements adopted in the last 2 years prior to beginning their role and the reasons taken into consideration for adopting such agreements.

    Explanation:
    - The Company adopts this practice by making the referenced minutes available to the new member, which includes the reasoning taken into consideration for the adoption of such agreements.
 SI
  1. The most relevant items of the quarterly and annual financial statements of the last year, together with its relevant explanatory notes, as well as the accounting criteria applied in producing such financial statements.

    Explanation:
    - The Company adopts this practice by including these issues in the induction process, following consistently applied accounting criteria.
 SI
  1. That which, in the opinion of the Board of Directors, is a conflict of interest and how in its opinion, or following the Code or Manual established for this purpose, and without prejudice to those conflicts of interest specifically addressed by law, situations which might present a conflict of interest should be addressed.

    Explanation:
    - The Company adopts this practice in accordance with its "Board of Directors Code of Conduct Regarding Conflicts of Interest" from March 2013, available at https://www.aguasandinasinversionistas.cl/en/corporate-governance/documents/board-directors-code-conduct
 SI

B

The Board of Directors has a procedure or ongoing training mechanism of the Board of Directors for updating knowledge, that:

  1. Defines at least annually the issues around which training will be carried out to its members and the calendar of training sessions for the following year.

    Explanation:
    - The Company adopts this practice by using a training procedure for updating knowledge. The Board of Directors also has the ability to invite people it deems necessary to understand their technical or professional opinion concerning any issue considered relevant, without prejudice to the ability of the same board to contract advisors as it deems appropriate.

    - Additionally, the Company uses a definition in this sense for determining training for its executives.
 SI
  1. As part of these matters includes best practices of corporate governance that have been adopted by other entities at the local and international level.

    Explanation:
    - The Company adopts this practice by including in its analysis those best practices that have been adopted locally and internationally that serve to resolve actual needs detected within the Company.
 SI
  1. As part of these issues includes the main advancements that have occurred in the last year at the local and international level regarding inclusion, diversity, and the sustainability reports.

    Explanation:
    - The Company adopts this practice, incorporating these issues within its annual training policy.
 SI
  1. As part of these issues includes the main risk management tools, including those regarding sustainability, that have been implemented in the last year at the local and international level.

    Explanation:
    - The Company adopts this practice, incorporating these issues within its annual training policy.
 SI
  1. As part of these issues includes the most relevant cases, sanctions or pronouncements that have occurred in the past year at the national and international level with the duties of care, confidentiality, loyalty, diligence and information.

    Explanation:
    - The Company adopts this practice, giving ongoing attention to the cases, sanctions or pronouncements that in its judgment are relevant for demonstrating to its Board Members the extent of its fiduciary duties.
 SI
  1. As part of these issues includes a review of examples of situations that produce a conflict of interest in the board and ways in which those conflicts can be avoided or resolved in the best corporate interest.

    Explanation:
    - Although the Company does adopts this practice, these issues are regulated and consistently reviewed by the Board of Directors, being included in this manner both in the Code of Ethics and the Board of Directors Code of Conduct Regarding Conflicts of Interest, available at the URL addresses indicated above.
 SI
  1. Annually distribute the matters concerning which board training activities have been conducted over the past year.

    Explanation:
    - The Company adopts this practice, providing in the training procedure that the matters concerning which board training activities were conducted over the prior year shall be incorporated in the annual report, with the goal of informing shareholders and the general public.
 SI

C

The Board of Directors has a policy for contracting experts that advise it on accounting, tax, financial, legal or other matters:

  1. That includes the possibility of veto by one or more Board Members for contracting a particular advisor.

    Explanation:
    The Company does not adopt this practice, considering that these matters shall be resolved by the Board of Directors through agreements.
 NO
  1. Requirement that at least one of its members contracts an advisor for the matter they require.

    Explanation:
    - The Company does not adopt this practice, given that these matters are vested in the Board of Directors so that they are reviewed in a legally constituted place, deliberated upon, and result in adopting agreements. Without prejudice to the above, any board member, and at any moment, can propose contracting a particular advisor in benefit of the corporate interest, which should be agreed to by the Board of Directors.
 NO
  1. Which provides for the dissemination, at least once a year, of the advice solicited and not contracted, specifying the reasons for which the Board of Directors adopted this decision in particular, which should also be duly noted in the minutes of the corresponding meeting

    Explanation:
    - The Company does not adopt this practice, with the goal of not infringing the confidentiality of the business matters nor revealing strategic information, without prejudice that the minutes of the corresponding board meetings that address these issues should state the reasons for the agreement.
 NO

D

The Board of Directors meets at least quarterly with the external auditing company in charge of auditing the financial statements to examine:

Explanation:
The Company adopts this practice in part, given that it has set at least 2 meetings per year with the external auditing company.		 NO
  1. The auditing program or plan.

    Explanation:
    - It is partially adopted considering that this analysis is carried out on a lesser frequency than that proposed.
 NO
  1. Possible differences detected in the auditing regarding accounting practices, administrative systems and internal auditing

    Explanation:
    - It is partially adopted considering that this analysis is carried out for a shorter period than that proposed.
 NO
  1. Possible serious deficiencies that may have been detected and those unusual situations that due to their nature should be communicated to the competent financial authorities.

    Explanation:
    - It is partially adopted considering that this analysis is carried out for a shorter period than that proposed.
 NO
  1. The results of the annual auditing program.

    Explanation:
    - It is partially adopted considering that this analysis is carried out for a shorter period than that proposed.
 NO
  1. Possible conflicts of interest that could exist regarding the auditing company or its staff, both in soliciting other services from the company or the members of its corporate group, as in other situations

    Explanation:
    - It is partially adopted considering that this analysis is carried out for a shorter period than that proposed.
 NO

E

The Board of Directors meets at least quarterly with the company's risk management unit or equivalent responsible party, to analyze:

Explanation:
The Company adopts this practice in part, given that it addresses these issues twice a year, without prejudice that the Board of Directors is informed monthly by the CEO and the executive directors of the main aspects of the company's management		 NO
  1. The adequate functioning of the risk management process.

    Explanation:
    - The Company adopts this practice in part, given that these matters are addressed with a lesser frequency than that proposed.
 NO
  1. The risk matrix used by the unit as well as the main risk sources and methodologies for the detection of new risks and the probability and impact of the occurrence for the most relevant risks.

    Explanation:
    - The Company adopts this practice in part, given that these matters are addressed with a lesser frequency than that proposed.
 NO
  1. The recommendations and improvements that, in the opinion of the unit, are relevant to carry out to best manage the company's risks.

    Explanation:
    - The Company adopts this practice, since the person in charge of the risk unit discloses the solutions and improvements that must be implemented in the Company's risk management.
 NO
  1. The contingency plans designed to react to the materialization of critical events, including the continuity of the Board of Directors in crisis situations.

    Explanation:
    - The Board of Directors is informed of the Company's contingency plans, but with a different frequency and scope of review than what is proposed in this practice.
 NO

F

The Board of Directors meets at least quarterly with the internal auditing unit, compliance officer or equivalent responsible party, to analyze:

Explanation:
The Internal Auditing unit meets annually with the Committee of Board Members, and eith the Board of Directors.		 NO
  1. The annual auditing program or plan.

    Explanation:
    - It is partially adopted in the terms indicated above, and with an annual frequency beginning in 2016.
 NO
  1. Any serious deficiencies that may have been detected and those irregularities that due to their nature should be communicated to the competent reviewing authorities or to the Public Prosecutor.

    Explanation:
    - This practice is adopted however, it is conducted on an annual basis.
 NO
  1. The recommendations and improvements that in the opinion of the unit should be relevant to carry out to minimize the occurrence of irregularities or fraud.

    Explanation:

    - This practice is adopted, since the Internal Audit Sub-Management, in its quarterly reports, presents said recommendations and conclusions.

 NO
  1. The effectiveness of the crime prevention model implemented by the company.

    Explanation:
    - From the implementation date of the Crime Prevention Model, the Company has reviewed the effectiveness of the model. In order to do this, the Board meets with the person in charge of the model twice a year in order to review in detail the incidents which have occurred, the claims which have been received, and the investigations which have occurred, in addition to the preventive measures and plans which have been implemented in order to abide by it.
 NO

G

The Board of Directors meets at least quarterly with the unit of Social Responsibility, Sustainable Development or responsible party with an equivalent function, to analyze:

  1. The effectiveness of the policies approved by the Board of Directors to disseminate internally within the organization, to its shareholders and to the general public the benefits of diversity and inclusion within the company.

    Explanation:
    - The Company partially adopts this practice, through the Board of Directors’ annual analysis and approval of the Sustainability Report. Furthermore, the Company is currently reviewing its sustainability strategy, which considers identifying and measuring the aforementioned matters.
 NO
  1. The organizational, social or cultural barriers detected that could be inhibiting the natural diversity were such barriers not to exist.

    Explanation:

    - The Company adopts this practice, since the Sustainability Committee reviews said matters and reports it quarterly to the Board of Directors.

 NO
  1. The usefulness and acceptance that the disseminated sustainability reports have had for the company's relevant stakeholders

    Explanation:
    - The Company is currently reviewing its sustainability strategy, which includes identifying and measuring these issues for the 2018-2022 period.
 NO

H

The Board of Directors includes, each year, the carrying out of site visits to the different offices and facilities of the company, to know:

Explanation:
The Company adopts this practice by establishing the review of the matters indicated below through informal visits to the Company's different offices and facilities, and through direct contact on the ground with their respective responsible parties and employees.		 SI
  1. The status and operations of these offices and facilities.

    Explanation:
    - The Company adopts this practice as it considers it valuable for the social interest, and puts it into practice through informal visits to the different dependencies and direct contact with their respective managers and workers, without there being a specific protocol for this purpose. During 2021, despite the pandemic situation, a visit was made to the company's facilities.
 SI
  1. The main functions and concerns of those who work in them.

    Explanation:
    - The Company adopts this practice by considering it valuable for the corporate interest, and puts it into practice through informal visits to the different offices and direct contact with their respective officers.
 SI
  1. The recommendations and improvements that in the opinion of those responsible for such premises and facilities would be pertinent to conduct to improve the functioning of the same.

    Explanation:
    - The Company adopts this practice by considering it valuable for the corporate interest, and puts it into practice through informal visits to the different offices and direct contact with their respective officers.
 SI

I

Of the meetings held for each point referred to in letters d) through f) above, at least one meeting for each point is held without the presence of the company's CEO.

Explanation:
- The aforementioned meetings usually take place with the presence of the CEO, however, for certain cases qualified by the Board of Directors, these meetings are held without him.		 NO

J

The Board of Directors has a formal procedure in place for ongoing improvement.

  1. To detect and implement future improvements in its organization and operations.

    Explanation:
    - The Company adopts this practice given that every two years the Board is evaluated by a third party, process that will be conducted again in 2018.
 SI
  1. To detect those areas where members can strengthen and continue improving.

    Explanation:
    - The Company does not adopt this practice given that the Board of Directors is an entity and its strengthening and improvement should be dealt with together and not regarding individual Board Members.
 NO
  1. To detect and reduce organizational, social or culture barriers that could be inhibiting the natural diversity of capacities, visions, characteristics, and conditions that would exist in the Board of Directors if such barriers were not present.

    Explanation:
    - The Company does not adopt this practice, however it is currently evaluating its implementation.
 NO
  1. That, without prejudice to legal obligations, it expressly includes the determination of a minimum number of regular meetings, the average minimum amount of in-person and remote time dedicated to them, and how far in advance the summons should be sent and the necessary background information for proper conduct of the meetings, recognizing the particular characteristics of the entity as well as the diversity of experiences, conditions and knowledge in the Board of Directors, according to the complexity of the matters to be discussed.

    Explanation:
    - The Company does not adopt this practice, given the impossibility of establishing ex ante the minimum formalities of the subjects to be discussed by the Board of Directors due to their variance and relevance.
    - Additionally, it is the individual responsibility of each board member to comply with its functions with a degree of diligence and care that the law requires, without prejudice that the Company should expect and demand of its Board Members that they dedicate the care and time necessary for meeting their fiduciary duties and the best business interest.
 NO
  1. That expressly includes the change, in the event it is relevant, of the structure of the organization and operations of the Board of Directors in contingency or crisis situations.

    Explanation:

    - The Company adopts this practice since the Board of Directors agreed that in situations of contingency or crisis defined by the President, he may call for its constitution by the means of communication available to him such as email, telephone, WhatsApp, text message , etc, indicating the place where the session will be held and the matters to be discussed in order to deal with the crisis. They may also meet remotely through technological means, without the need for face-to-face attendance, and one of the assistant directors may act as secretary.

 NO
  1. That includes the advice of an external expert for detecting and implementing these future improvements or strengthening areas.

    Explanation:
    - The Company adopts this practice given that every two years the Board is evaluated by a third party, process that s will be conducted again in 2018.
 SI
  1. Regarding the detection referred to in numbers i through iii above, it is done at least on an annual basis.

    Explanation:
    - The Company conducts an evaluation of the Board of Directors every two years, and will do so again in 2018.
 NO

K

The Board of Directors has an information system in operation and access for each board member that:

  1. Permits them to access, in a secure, remote and ongoing manner, all of the minutes and documents reviewed for each session of the Board of Directors for the last 3 years, in accordance with the sorting mechanism that facilitates its indexing and information searching.

    Explanation:
    - The Company has implemented a virtual folder with the purpose of storing the information of the Board sessions, allowing the remote access of all the directors to the minutes and records of the sessions of the last 3 years, and especially the documents of the current Board of Directors session.
 YES
  1. Permits them to access, in a secure and remote manner without prejudice to the legal obligations regarding time periods for mailing and content of the requests, all of the minutes and documents that synthesize all matters which will be addressed in each meeting, and all background information that will be presented in such session or additional information necessary to prepare for them.

    Explanation:
    - The Company adopts this practice by sharing in the Board of Directors' virtual folder the minutes or documents that summarize all the matters that will be discussed in the respective session and the background that will be presented in the session.
 YES
  1. Permits access to that referred to in number ii above, at least 5 days in advance of the respective meeting.

    Explanation:
    - The Company adopts this practice as background information is made available in the Virtual Folder within 3 and 5 days prior to the respective board meeting.
 YES
  1. Permits access in a secure, remote and ongoing manner to the Company's system of complaints.

    Explanation:
    - The Company does not adopt this practice, given the confidentiality of the complaints, without prejudice to periodic reviews of this matter.
 NO
  1. Permits the review of the definitive text of the minutes of each board meeting.

    Explanation:
    - The Company adopts this practice, providing such background information to the Board Members by electronic means.
 YES
  1. Permits the review of that referred to in number v. above, no less than 5 days following the respective board meeting.

    Explanation:
    - The Company does not adopt this practice, given that it is not possible to establish ex ante the minimum time in this regard, due to the varying range of matters addressed by the Board of Directors.
 NO

Of the relationship between the company, its shareholders and the general public.

Practice Adopted

A

The Board of Directors has implemented a formal procedure in practice so that the company's shareholders can inform themselves about:

  1. At least 3 months prior to the shareholders' meeting in which Board Members will be elected, information concerning the diversity of skills, conditions, experiences and visions that in the opinion of the Board of Directors is advisable to include so that the board in the best situation to ensure the corporate interest.

    Explanation:
    - The Company does not adopt this practice, however, it is currently revising this matter.
 NO
  1. Before the corresponding vote, that maximum number of boards which, in the opinion of the Board of Directors, is advisable for Board Members to hold who may be elected by the shareholders.

    Explanation:
    - The Company does not adopt this practice, given that it is the individual responsibility of each board member to comply with their functions with the degree of diligence and care that the law requires.

    - Without prejudice to the above, the Company should expect and demand of its Board Members that they dedicate the care and time necessary to fulfill their fiduciary duties and the best business interest.
 NO
  1. Before the corresponding vote, the experience, profession or position of the board member candidate.

    Explanation:
    - The Company adopts this practice by making the curriculum vitae of the respective board member candidate available to the Meeting before the vote, in the event that the candidates have included their CV.
 SI
  1. Before the corresponding vote, if the board member candidate maintains or has maintained in the last 18 months contractual, commercial or other relations with the controller of the company, or its major competitors or suppliers.

    Explanation:
    - The Company does adopt this practice, by making available to the Meeting this background information, if any, along with that indicated in the preceding paragraph.
 NO

B

The Board of Directors has implemented a mechanism, system or procedure that permits:

  1. The shareholders to participate and exercise their right to vote remotely, in the same opportunity that the rest of the shareholders are physically present in the meeting.

    Explanation:
    - The Company does not adopt this practice, however it engages in ongoing analysis of the technical needs to do so.
 NO
  1. The shareholders to observe, in a remote manner and in real time, what takes place during the shareholders' meetings.

    Explanation:
    - The Company does not adopt this practice, however it engages in ongoing analysis of the technical needs to do so.
 NO
  1. The general public to become informed in real time of the agreements adopted in the shareholders meetings.

    Explanation:
    - The Company does not adopt this practice, however it engages in ongoing analysis of the technical needs to do so.
 NO
  1. The general public to become informed of the agreements adopted at the shareholders' meetings, with less than a 5-minute time lag between voting on the respective agreement.

    Explanation:
    - The Company does not adopt this practice, however it engages in ongoing analysis of the technical needs to do so.
 NO

C

The Board of Directors has approved a policy and established formal procedures with the goal of annually providing information to the public regarding:

  1. The policies adopted by the company concerning social responsibility and sustainable development.

    Explanation:
    - The Company adopts this practice since the Board of Directors annually approves the Sustainability Report that specifically deals with these issues, and which is available at www.aguasandinasinversionistas.cl.
 SI
  1. The stakeholders identified by the company as relevant, as well as the reasons why such groups posses this quality.

    Explanation:
    - The Company adopts this practice by annually reporting on the Company's relevant stakeholders to the public in its Sustainability Report.
 SI
  1. The company's relevant risks, including sustainability risks, as well as the primary sources of those risks.

    Explanation:
    - The Company adopts this practice by including this information in its Annual Report and where relevant in the Sustainability Report.
 SI
  1. The indicators measured by the company in terms of social responsibility and sustainable development.

    Explanation:
    - The Company does not adopt this practice, however, it is a component of the "FTSE4Good Emerging Index," index which measures the Company's performance in environmental, social, and corporate governance matters. The Company is also a component of the "Dow Jones Sustainability Emerging Markets Index," whose indicators mark best-in-class performance in sustainability matters.
 NO
  1. The existence of goals and developments made by sustainability indicators.

    Explicación:
    - The Company does not adopt this practice, however it has approved the creation of a Sustainability Committee which will revise the Company’s Sustainability Strategy in order to identify these matters and measure their obtained results.
 NO

D

For the purposes of defining the policies, indicators and reporting format referred to in paragraph c) above, has followed international standards such as, for example, the guidelines contained in ISO 26000: 2010, or the Reporting and Dissemination Principles and Standards of the "Global Reporting Initiative" or of the "International Integrated Reported Council."

Explanation:
- Despite not fully complying with the indicated practices due to not having formal policies or practices to that effect, this particular practice is complied with because the Company's indicators are managed in accordance with GRI G4, and there is an Integrated Report carried out according to this standard.		 SI

E

The company has a unit for relations with shareholders, investors and press that.

  1. Allows them to resolve doubts about the company, its businesses, primary risks, financial, economic or legal status, and the entity's publicly known businesses.

    Explanation:
    - The Company has an Investor Relations unit that complies with these functions.
 SI
  1. Has people who, at a minimum, are fluent in English to respond to questions from non-Spanish speakers.

    Explanation:
    - The Investor Relations unit complies with this practice, having staff trained for communicating in English in the envisioned manner. Additionally, the Company's page for investors has an English version.
 SI
  1. Is the only entity authorized by the Board of Directors to respond to such questions from shareholders, investors and the press.

    Explanation:
    - The Company does not adopt this practice, given that these functions are also in the hands of the CEO and other spokespeople of the Company.
 NO

F

The Board of Directors has a formal procedure in place for continuous improvement:

  1. To detect and implement future improvements in procedures for elaborating and disseminating the company's disclosures to the market so that they are easy to understand by the public.

    Explanation:
    - The Company complies with this policy, having a procedure through which it reviews the form in which such communications have been made to the public..
 SI
  1. To detect and implement possible improvements in the procedures for elaborating and disseminating the company's disclosures to the market, with the goal that such communications are provided to the market in a timely manner.

    Explanation:
    - The Company complies with this policy, having a procedure through which it reviews the opportunities in which such communications have been made to the market.
 SI
  1. That includes the advice of an external expert for detecting and implementing these future improvements.

    Explanation:
    - The Company does not adopt this practice, given that it has not detected the existence of conflicts of interest between the generation and delivery of information to the public, nor has it been deemed necessary to contract a third party for such purposes.
 NO
  1. In which the detection referenced in numbers i and ii above is conducted at least on an annual basis.

    Explanation:
    - The Company complies with this policy, carrying out such analysis on an annual basis.
 SI

G

The company has an updated website through which shareholders can access all public information, in a simple and easy-to-access manner.

Explanation:
- The Company complies with this policy, and all public information can be accessed through its website at www.aguasandinas.cl and www.aguasandinasinversionistas.cl		 SI

On risk management and control.

Practice Adopted

A

The Board of Directors has implemented a formal Risk Management and Control process which is currently in place and which:

  1. Has as general guidelines the risk management policies approved by the Board of Directors.

    Explanation:
    - The Company adopts this practice, given that the Board of Directors has approved a procedure by which each management division makes a survey of its main risks and proposes actions that should be implemented for their mitigation, which should be implemented by the respective management and with the knowledge of internal auditors. In turn, the general management determines which of the risks appear to be most relevant, regarding those for which a more exhaustive monitoring should be conducted, documenting the evidence to later evaluate compliance with the committed actions.
 SI
  1. Has a Risk Management Unit or equivalent, in charge of the detection, quantification, monitoring and communication of risks, and which reports directly to the Board of Directors.

    Explanation:
    - The Company partially adopts this practice, through the work of the Company's Safety and Continuity business unit, who is in charge of managing incidents and emergencies. This area has procedure through which the different business units detect, quantify, monitor, and communicate their risks. The results and the implemented management system are reported to the Board every six months.
 NO
  1. Has an Internal Auditing Unit or equivalent responsible for verifying the effectiveness and compliance with the policies, procedures, controls and codes approved by the Board of Directors, and which reports directly to the board.

    Explanation:
    - The Company partially adopts this practice, given that it already has an Auditing unit or equivalent that does not report to the Board of Directors but rather to the CEO.
 NO
  1. Incorporate within the process of quantifying, monitoring and communicating both direct risks to the entity and indirect risks that may arise from the different companies of the business group to which the entity belongs.

    Explanation:
    - The Company adopts this practice, given that the Company's risk map includes indirect risks derived from subsidiaries.
 SI
  1. Considers the potential impact from risks of economic, social and environmental sustainability to which the Company is exposed.

    Explanation:
    - The Company adopts this practice, given that within the criteria of impact and probability, operational, economic, environmental, and social risks are considered.
 SI
  1. Uses as a guide the principles, guidelines and national and international guidelines such as, for example, those developed by “The Committee of Sponsorship Organizations” (COSO) or contained in the “Control Objectives for Information and Related Technology” (COBIT) created by ISACA or the ISO 31000:2009 and ISO 31004:2013.

    Explanation:
    - This practice is adopted by using COSO as a guide.
 SI
  1. Includes a Code of Conduct or equivalent document approved by the Board of Directors and reviewed annually, which defines the principles and guidelines that should guide the action of the company's staff and board.

    Explanation:
    - The Company adopts this practice, given that it revises its Code of Ethics annually.
 SI
  1. Includes the information and ongoing training of all staff, regardless of the contractual relationship with the company, regarding the policies, procedures, controls and codes implemented for risk management.

    Explanation:
    - The Company adopts this practice as it implements in Compliance Risk Control System. This includes training for Company workers and its suppliers regarding the Company’s risk management policies. Additionally, the Safety and Business Continuity business unit is developing a Risk Management System which incorporates information and training in the indicated terms.
 SI
  1. Is reviewed and updated at least annually.

    Explanation:
    - The Company adopts this practice, given that the Ethics Code is reviewed annually.
 SI

B

The Board of Directors has implemented a formal procedure that is in effect:

  1. To channel complaints of any irregularities or illegal acts on behalf of staff whatever the contractual tie- shareholders, clients, suppliers or third parties external to the company.

    Explanation:
    - The Company adopts this practice, by making its complaints channel available anyone through the internet, which in turn is administered by an external company (Fundación Generación Empresarial).
 SI
  1. That guarantees the anonymity of the complainant.

    Explanation:
    - The Company adopts this practice since complaints through the complaints channel, whether related to the Code of Ethics or to the Model of Crime Prevention are anonymous.
 SI
  1. That allows the complainant to know the status of their complaint.

    Explanation:
    - The Company adopts this practice by allowing complainants to enter the complaints channel to verify the status of their complaint.
 SI
  1. That it is brought to the attention of its staff, shareholders, clients, suppliers and third parties, both through trainings and through the company's website.

    Explanation:
    - The Company adopts this practice, given that the complaints channel can be accessed on the internet through www.aguasandians.cl
 SI

C

The Board of Directors has implemented a formal procedure that is in effect:

  1. To detect and reduce organizational, social or culture barriers that could be inhibiting the skills, conditions, experiences and visions that, without those barriers, would have occurred naturally in the organization.

    Explanation:
    - The Company is certified in the Chilean Standard 3262 on Management Systems for Gender Equality and Reconciliation of Work, Family and Personal Life. This was made known to the Board and it establishes the framework to define the Company’s global strategy in order to eliminate the mentioned barriers. In this context, the Gender Equality and Reconciliation of Work, Family and Personal Life Policy was created. Furthermore, the People and Diversity business unit was created, whose main objective is the creation of proposals in matters of diversity and inclusion, founded upon the principles established in the Code of Ethics.
 SI
  1. To identify the diversity of skills, conditions, experiences and visions that its senior executives should possess.

    Explanation:
    - The Company does not adopt this practice however, the contracting and/or internal promotion of such senior executives is based on merit and competence, without procedures that give preference to the contracting of one over the other. The Company is certified in the Chilean Standard 3262 on Management Systems for Gender Equality and Conciliation of Work, Family and Personal Life. This was made known to the Board and it establishes the framework to define the Company’s global strategy in order to eliminate the mentioned barriers. In this context, the Gender Equality and Reconciliation of Work, Family and Personal Life Policy was created. Furthermore, the People and Diversity business unit was created, whose main objective is the creation of proposals in matters of diversity and inclusion, founded upon the principles established in the Code of Ethics.
 NO
  1. To identify among the company's employees, potential replacements of the CEO and other senior executives, in carrying out the identification process described in number ii above.

    Explanation:
    - The Company does not adopt this practice, other than having a succession process for upper management.
 NO
  1. To replace the CEO and other senior executives in a timely manner, and transfer their functions and relevant information in the face of their pending absence, minimizing the impact it would have on the organization.

    Explanation:

    - The Company adopts this practice, given that in the event of the permanent or imminent absence of the General Manager, the board of directors may hire the services of a head hunter company or another company that provides similar services, or opt for the direct hiring of the replacement, and must consider in special ways the technical suitability, educational level, experience and/or any other relevant factor regarding the person who will fill the vacancy.

    - In case of permanent or imminent absence of any main executive, the General Manager must seek the prompt hiring of a replacement following the same criteria established for the replacement of the General Manager.

    - In both of the above cases, the outgoing executive will be required to submit a report on all the pending matters that were in his care, indicating the status of each one, the associated risks, the people who are working on the matter and the suggested steps to follow. . In the case of the General Manager, it will be delivered to the Chairman of the Board of Directors, and in the case of the main executives, to the General Manager.   
 SI
  1. In that the detection referred to in numbers i and ii above is performed at least annually.

    Explanation:
    - The Company does not adopt this practice in full, however it regularly takes steps to identify the diversity of skills, knowledge, conditions, experiences and visions its senior executives should possess.
 NO

D

The Board of Directors has implemented a formal procedure that is in effect:

  1. To review, at least annually, salary structures and compensation policies and indemnification of the CEO and other senior executives, in order to detect and correct any incentives that these executives expose the company to risks that are not consistent with defined policies on the subject or the commission of any crimes.

    Explanation:
    - The Company adopts this practice by establishing that the compensation policies for managers and senior executives should include not only the goals achieved, considering EBITDA and the Company's net profits, but also other elements including compliance with individual objectives defined by upper management, related for example to compliance with the assigned budget, accident indicators, prevention of workplace accidents and client service indicators, among others.
 SI
  1. That includes the advice of a third party external to the company that supports the Board of Directors, and the committee of Board Members when appropriate, in the review of that referred to in number i. above.

    Explanation:
    - The Company does not adopt this practice, given that they are functions the Board of Directors is capable of assuming directly.
 NO
  1. That includes the dissemination of the salary structures and compensation policies and indemnification to the CEO and other senior executives, on the website of the company.

    Explanation:
    - The Company does not adopt this practice with the goal of not impacting the labor rights and confidentiality that the Company adheres to in its executive plan.
 NO
  1. That includes submitting such salary structures and policies to the shareholder approval.

    Explanation:
    - The Company does not adopt this practice, given that the shareholders already possess the legal right to limit the administrative activities of the Board of Directors and assume them directly (Cfr. Art. 67 Inc. 2° N 7) Law N° 18,046.
 NO

Evaluation by a third party.

Practice Adopted

A

Self-assessment of the Board of Directors regarding the adoption of practices contained in current regulations:

  1. Has been reviewed and validated by a third party external to the company.

    Explanation:
    - The Company does not adopt this practice, given that the company directly analyzes, deliberates upon and adopts agreements regarding the adoption of the practices contained in the current regulations, notwithstanding that it does contract external advisors for related matters, with the goal of adopting decisions based on the same.
 NO
  1. The person or team of people that conducted the review and validation possess the verified experience of at least 5 years in evaluating control processes and effectiveness, or in the provision of professional advisory or consulting services in the design and implementation of processes, risk management or continuous improvement.

    Explanation:
    - The Company does not adopt this practice, given that in its consideration these issues correspond to the Board of Directors without requiring the intervention of third parties.
 NO
  1. The entity or people who conducted the review and validation are supervised by the Superintendency or foreign public or private entity with similar competency.

    Explanation:
    - The Company does not adopt this practice, given that in its consideration these issues correspond to the Board of Directors without requiring the intervention of third parties.
 NO
  1. The group or people who conducted the review and validation belong to an list established by the national stock exchange of entities that meet the conditions defined by the exchange to certify the self-assessment referred to in the current regulations.

    Explanation:
    - The Company does not adopt this practice, given that in its consideration these issues correspond to the Board of Directors without requiring the intervention of third parties.
 NO

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