Quinsa - Audit Committee Report

December 31, 2005, for filing with the Securities and Exchange Commission. The Committee has selected, subject to ratification by the Board and the Company's shareholders, the selection of the Company's external auditors.

b) Composition of the Audit Committee

The Audit Committee consisted of the following members:

The Committee members were appointed by the Board of Directors as per resolution reflected in the minutes of the meeting of the Board of Directors of August 18, 2005. Floreal H. Crespo was named as the Committee’s “financial expert” after being determined by the Board to satisfy the applicable requirements for financial expertise established by the Securities and Exchange Commission (the “SEC”).

The mandate for the members of the committee will run for a term of one fiscal year. All members qualify as independent and none carry out executive duties in the company, in accordance with the applicable regulations of the CNV and the SEC.

The Committee has been assigned an annual budget that includes both economic and human resources allocated to the Committee. This budget is approved by the Board.

The tasks performed by the Committee are remunerated. The Board of Directors approved the annual compensation of the members of the Audit Committee at the beginning of its mandate.

c) Principal responsibilities

The basic role of the Audit Committee is to provide support to the Board of Directors in its oversight functions through its review of the Company’s financial reporting process, including the periodic review of the process involved in the preparation of economic and financial information, the Company’s internal financial controls, the independence of the external auditor, and compliance by the Company with legal and regulatory requirements.

Principal functions:

To issue an opinion on the Board proposal for the appointment of external auditors to be hired by the Company, and ensure their independence once appointed.
To supervise the operation of the internal control systems and the administration and accounting systems, as well as the reliability of the latter and of all information on financial matters or other significant events submitted to institutions in compliance with the applicable information reporting regime or other regulatory entities.
To examine the Company’s practices and policies on the evaluation and management of risks.
To issue a grounded opinion regarding acts and contracts entered into with related parties involving material amounts.
To examine, together with management, the Company’s policies in relation to the issue of management information (press releases) to be provided to external bodies.
To evaluate the performance, responsibilities, and budget of the Internal Audit Department, and review its work program, as well as its interaction with theexternal auditor.