Corporate Governance Policies and Procedures Compendium. Inversiones Aguas Metropolitanas S.A. December 2015

Corporate Governance Policies and Procedures Compendium. Inversiones Aguas Metropolitanas S.A December 2015 1

A. GENERAL ASPECTS. As part of the implementation of good corporate governance standards, and in accordance with the provisions of the General Regulation N 385, issued by the Superintendency of Securities and Insurance, the board of directors of Inversiones Aguas Metropolitana S.A. (Hereinafter, interchangeably, "IAM", the "Society", the "Corporation" or the "Company"), at its meeting N 12/2015 on December 16, 2015, has adopted a series of policies and other agreements on such matters. Thus, the implementation of policies and agreements approved by the board on matters of Corporate Governance require certain procedures, mechanisms or systems to function. All of the aforementioned policies, protocols and respective procedures are herein contained in this document called Compendium of Policies and Procedures on Corporate Governance (hereinafter the "Compendium"). This Compendium contains the policies and procedures approved to implement the agreements and practices that the board of IAM has voluntarily adopted concerning Corporate Governance. B. COMPENDIUM STRUCTURE. This Compendium takes into consideration the best practices of corporate governance in accordance with the actions of the Company, international experience, and the latest legal and regulatory reforms. In order to facilitate understanding of the scope of the resolutions adopted by the board of the Company, these are presented in the same order and following the numbering used by the General Regulation of the Superintendency of Securities and Insurance N 385 of June 8, 2015. 2

C. POLICIES AND PROCEDURES ON CORPORATE GOVERNANCE PRACTICES OF INVERSIONES AGUAS METROPOLITANAS S.A. I. Section 1.a) NCG N 385. On the Performance and Composition of the Board Induction of New Directors Policies: In the board meeting held on December 16, 2015 the board agreed that each time the renewal of the board occurs, during the first few weeks the new board begins operations the CEO and/or other managers shall make one or more presentations that will aim to inform new directors about the company, its businesses, risks, policies, procedures, principle accounting policies and the most relevant legal framework applicable to the company and its board. Similarly, in the case of a vacancy of a board member, the board shall carry out the appropriate induction of a replacement board member, designated as interim. To this end, during the first weeks after taking office, the various managers of the Company shall meet with the replacement board member to deliver the aforementioned information. Procedure To implement that policy, at the same meeting, the board agreed to adopt the following procedure for induction of new board members: 1. Introduction. This document establishes the induction process through which every new board member of the Company must follow. 2. Purpose. To facilitate the new board member's knowledge and understanding of materials relevant to the Company, which include fundamental aspects of it, its business and the operation of the board of directors. 3. Development. 3.1 Through the delivery of background information. The CEO will provide the new director, within 15 working days from which he or she accepts the appointment, a physical or virtual folder as the case may be that shall contain, at a minimum, the following information: 3

Subject (i) The business, matters and risks, including those regarding sustainability, which are considered most relevant, and reasons why in the opinion of the board they are considered as such. (ii) The relevant stakeholders that the organization has identified and the reasons why in the opinion of the board they have this condition, and the main mechanisms used to understand expectations and maintain stable and lasting relationship with them. (iii) The mission, vision, strategic objectives, principles and values that should guide the actions of the company, its directors and staff, and risk management policies approved by the board. (iv) The most relevant legal framework applicable to the entity, the board and its top executives. (v) The duties of care, confidentiality, loyalty, diligence Information to deliver 1. Sustainability Report of the subsidiary Aguas Andinas S.A. 2. Copy of the board meeting that approves the Sustainability Report of the subsidiary Aguas Andinas S.A. 3. Company bylaws and authoritative structure. 4. Code of Ethics. 5. Crime Prevention Model. 6. Social Responsibility Policy of the subsidiary Aguas Andinas S.A. 7. Code of Conduct of the Board of Directors in Relation to Conflicts of Interest. 8. Manual of Information Management of Interest to the Market. 9. Annual Report for the past year. 10. Copy of all policies adopted under SVS-NCG 385: Establishing standards for the Communication of information regarding corporate governance practices adopted by publicly traded companies. 11. Presentations developed for this purpose 12. Law N 18,045 Law on Securities Market. 13. Law N 18,046 Corporations Law. 14. Regulation Law on Corporations. 15. Law Nº 20,393 Law that establishes Criminal Liability for Legal Persons. 16. SVS-NCG 270: Publicity of policies and procedures relating to the acquisition or transfer of securities of the entity and to the management and disclosure to the market. 17. SVS-NCG 314: The sending of legal, economic and financial information over the internet (SEIL System). 18. SVS-NCG 385: Establishing standards for the Communication of information regarding corporate governance practices adopted by publicly traded companies. 19. Legal report with a conceptual explanation of fiduciary duties of the director towards 4

and information that under the current legislation are borne by each member of the board, through the use of examples of the most relevant cases, sanctions or pronouncements that have occurred in the past year at the local level regarding those duties. (vi) The main resolutions adopted in the last 2 years prior to the start of its mandate and the reasons taken into account in reaching such agreements or to rule out other options evaluated. (vii) The most significant items in the quarterly and annual financial statements of the last year together with the accompanying explanatory notes, in addition to the accounting criteria applied in the preparation of such financial statements. (viii) That which in the opinion of the board of directors is a conflict of interest and how in its opinion, or under the Code or Manual established for this purpose, and without prejudice to those conflicts of interest expressly addressed by law, the situations in which one or more conflicts can arise should be treated. stakeholders, and their embodiment in the current legislation. 20. Summaries of relevant recent cases. 21. Copy of minutes of regular and special board meetings for the last two years. 22. Delivery of the respective report on Accounting and Internal Auditing. 23. A copy of the Board of Directors Code of Conduct in Relation to Conflicts of Interest. 3.2 Through inaugural workshops. With prior coordination with the new director, the CEO and other senior executives of the Company shall give different presentations, which will address at a minimum the following subjects: - History / description of the Company. - Mission / vision. 5

- Ownership structure. - Organization of the Company, including descriptions of key functions. - Business environment: applicable regulations and rules. - Review of balance sheets, income statements and cash flows. - Major investment projects. - Significant accounting criteria. - Risk management in relation to the subsidiary Aguas Andinas S.A. - Financial situation of the Company. - Accounting policies. - Internal Controls. - Aspects of financial risk: portfolio, debt, guarantees, etc. - Interview with Company executives. - Visits to the representative facilities of the subsidiary. - Market analysis. - Description of platforms and systems in use. - Security Policy. - State of judgments and demands. - Existing risks and contingencies. - Regulations applicable to the business. - Authoritative structure. 4. Person responsible for the action. The person responsible for carrying out the process of induction is the secretary of the board. To do so, they should coordinate the delivery of relevant information with the staff under their supervision, on the specific aspects mentioned in this procedure and the participation at the meetings indicated in the previous number. 6

II. Section 1.b) NCG N 385 Of the Functioning and Composition of the Board of Directors Refresher Training Policy: At the board meeting held on December 16, 2015, the board agreed that the following year trainings will be held for its members, considering as part of the matters covered by such trainings the following: (i) (ii) (iii) (iv) (v) best practices of corporate governance that have been adopted by other entities at the local and international levels. major developments that have occurred in the past year locally and internationally with regard to inclusion, diversity and sustainability reports. major risk management tools, including those regarding sustainability, which have been implemented in the past year locally and internationally. the most relevant cases, sanctions or pronouncements that have occurred in the last year locally and internationally related to the duties of care, confidentiality, loyalty, diligence and information. review of examples of situations which constitute a conflict of interest in the board and the ways in which these conflicts of interest may be avoided or resolved in the company's best interests. Procedure: For the implementation of that policy, at the same meeting, the board agreed to adopt the following procedure for refresher training: 1. Introduction. This document establishes the permanent training process that the board of the Company undergoes. 2. Purpose. To update board members so that they can carry out their functions on the basis of updated progress and trends to the particular situation of the Company. 3. Development. 3.1 Updating of knowledge regarding best practices in corporate governance that have been adopted by other entities at the local and international levels. During the third quarter of each year, a presentation to the Board will be made that includes a review of best corporate governance practices adopted during the last year by companies 7

of a similar nature of the Company in the Chilean and international markets based on publicly available information. 3.2 Major developments that have occurred in the past year locally and internationally with regard to inclusion, diversity and sustainability reports. During the third quarter of each year, a presentation to the Board will be made that includes the review of the advances made in the past year by companies of similar nature to the Company in the Chilean and international markets based on publicly available information. 3.3 Main risk management tools, including those regarding sustainability, which have been implemented in the past year locally and internationally. During the third quarter of each year, a presentation will be made to the Board that considers the review of major risk management tools implemented in the past year by companies of similar nature to the Company in the Chilean and international markets based on publicly available information. 3.4 Update on the most relevant cases, sanctions or pronouncements that have occurred in the past year at the local and international levels related to the duties of care, reservation, loyalty, diligence and information. During the third quarter of each year, a presentation will be made to the Board on this matter, identifying by nature of the analyzed duty (care, confidentiality, loyalty, diligence and information) the cases or matters occurring during the last period that are useful to directors for a more extensive understanding of the fulfillment of those fiduciary duties 3.5 Review of examples of situations which constitute a conflict of interest in the board and ways in which these conflicts of interest may be avoided or resolved in the best interests of the company. During the third quarter of each year, a presentation will be made to the Board on this matter, identifying situations and cases or matters related to the subject that are useful to board members to gain a more extensive understanding of the matter. 3.6. Communication. The matters concerning which training activities for the board of directors have taken place over the previous year will be incorporated in the annual report. 4. Person responsible for the action. The person responsible for annually coordinating the training process is the Secretary of the Board, and shall agree with the president of the board as to the dates and matters concerning which the meetings referring to such practices are conducted, and should 8

propose in the board's calendar of activities the dates defined for such purposes, as well as specific matters and presenters in charge of them. 9

III. Section 1.d) NCG N 385 Of the Functioning and Composition of the Board of Directors Relationship with External auditors Policy: In the board meeting held on December 16, 2015 the board of directors agreed to adopt as practice that, at least twice a year, the board will meet with the auditing firm that is responsible for auditing the financial statements, in order to analyze: i) the annual auditing program; ii) any differences detected in the audit regarding the accounting practices, administrative systems and internal auditing; iii) any serious deficiencies that may have been detected and any irregular situations which by their nature should be communicated to the competent regulatory agencies; iv) the results of the annual auditing program; v) the possible conflicts of interest that may exist in connection with the auditing firm or its personnel, both in the provision of other services to the company or to the companies within its corporate group, and for other situations; and vi) analyze the financial statements. The meetings with representatives of the auditing company will still take place without the presence of the managers and senior executives of the Company. Procedure To implement the referenced policy, in the same session the board of directors agreed to approve the following procedures for the meeting with external auditors: 1. Introduction. This document establishes the procedure for meeting, at least 2 times a year, with the external auditors of the Company. 2. Objective. To facilitate the understanding of the reports of the external auditors, as well as allow direct contact between them and the board of directors. 3. Development. 10

The CEO shall send a meeting request to the external auditors to the meetings of the Board of Directors in which the annual financial statements are to be approved, as well as those in which the internal control letter is presented. The presentation of the external auditors shall take place without the presence of the managers and principle executives of the Company. 4. Person responsible for the action. The person responsible for coordinating, twice a year, that the board of directors meets with the auditing company that is in charge of auditing the financial statements is the CEO of the Company, with the duty of proposing in the board activities calendar the dates defined for such purposes. 11

IV. Section 1.j) NCG N 385 Of the Functioning and Composition of the Board of Directors Continuous improvement process: Evaluation of the Board of Directors Policy: In the board meeting held on December 16, 2015, the board agreed to use a formal process of continuous improvement, to identify and implement possible improvements in its organization and operation, considering the advice of an outside consultant to the Company for the detection and implementation of these possible improvements or areas to strengthen. The consultancy will be held on a biennial basis, starting in 2016. Procedure: For the implementation of the referenced policy, in the same session the board of directors agreed to approve the following procedure: 1. Introduction. This document establishes the manner in which the aforementioned consulting shall be accomplished. 2. Purpose. To establish the procedure for detecting and implementing possible improvements in the organization and functioning of the board of directors. 3. Development. The Board of Directors shall agree on a biennial basis to carry out a self-evaluation, in order to identify and implement improvements in its organization and operation. For this purpose the CEO must submit at least two proposals in this regard, prepared by external consultants with proven experience in the field, from which the board will decide with whom to carry out the evaluation. The consultant will submit a report of their work, with the conclusions obtained, which shall be made available to the Board, the entity that will manage the report in a confidential manner. 4. Person responsible for the action. The person responsible for coordinating the advice of an expert consultant independent of the company on a biennial basis is the CEO of the Company, who shall propose in the board activities calendar the dates defined for this purpose. 12

V. Section 1.k) NCG N 385 Of the Functioning and Composition of the Board of Directors Access to Information by the Board Member Policy: In the board meeting held on December 16, 2015, the board agreed to use an information system that allows each board member to access in a secure, remote manner and in sufficient time, the minutes or documents that synthesize the matters to be discussed at each meeting and other background information to be submitted, needed to be prepared for the meeting. This system will also allow each board member to review the final text of the minutes of that meeting. Procedure: For the implementation of the referenced policy, in the same session the board of directors approved the following system of access to information for the board member: 1. Introduction. This document establishes the process of board member access to relevant information in relation to the matters to be addressed at the board meeting and formal aspects of these. 2. Purpose. To establish the procedure by which relevant information for the proper conduct of the board of director meetings is made available to the board member. 3. Development. a. Concerning background of analysis in the board of directors. The CEO, in sufficient time prior to the respective meeting, shall send to the board members by e-mail the agenda of the matters that will be discussed at the meeting and other background information that will be presented, necessary for preparing for the same. It shall be the responsibility of the CEO to collect and make available to the President the referenced information, in sufficient time to allow the information to be made available to the board members under the terms indicated. b. Concerning the minutes of the board of directors meeting. Once the corresponding board meeting has concluded and in sufficient time prior to the next meeting, the secretary of the board shall provide to the board members a draft of the minutes of the respective meeting sent by e-mail for comments, being the duty of 13

the board members to submit their comments to the secretary of the board using the same means. 14

VI. Section 2.a) NCG N 385 Of the Relationship between the Company, the Shareholders, and the General Public Information to Shareholders Policy: In the board meeting held on December 16, 2015, it was agreed to adopt a policy regarding the information to be delivered to shareholders concerning candidates for the position of board member, through which shareholders can obtain information about the experience, profession or occupation of the candidate for board member, as well as whether they have maintained relevant relationships with the controller of the Company or its main competitors or suppliers, to the extent that candidates have submitted the relevant information to the Company. Procedure: For the implementation of the referenced policy, in the same session the board of directors approved the following procedure for information to shareholders: 1. Introduction. This document sets out the procedure to be followed to inform shareholders of the qualities of a candidate for board member before the election. 2. Purpose. To establish the procedure by which shareholders are informed about the experience, profession or occupation of the candidate for board member, as well as whether the candidate has maintained relevant relationships with the controller of the Company or its main competitors or suppliers. 3. Procedures. 3.1 General considerations. Any natural person can be elected as a board member of the Company who has free control of their assets and who is not included in one of the cases that are expressly indicated in articles Nº 35 and Nº 36 of Law Nº 18,046. For their part, in order to be an independent board member, they must comply further with the conditions established in article 50(a) of Law N 18,046. 3.2 Application process. Those wishing to promote the candidacy of any person for a position of board member or those wishing to apply directly, can do so by submitting to the CEO of the Company their personal background information or that of the person proposed, by delivery at the 15

headquarters of the Company, Av. Presidente Balmaceda 1398, Santiago, attaching the information they want to be presented to the public through the website of the Company. For these purposes, it is proposed that the candidates submit at a minimum the following information: - Curriculum Vitae with a summary of studies and experience and professional profile; and - Report if they maintain or in the last 18 months have maintained contractual, commercial or other types of relationships with the controller of the Company, or its principle competitors or suppliers, understanding "controller" under the terms defined in article 97 of Law N 18,045 on the Securities Market. It shall not be the responsibility of the Company to verify the accuracy of the background information that are delivered, but rather its responsibility will be limited to receiving and making the information available to the shareholders via its website. 3.3 Provision of information. The CEO will provide shareholders, at least 2 working days prior to the Meeting, all documents and information that have been delivered to the Company in respect of each candidate for board member to date. The background received for each applicant to the board that has been requested will be included in the website of the Company. 16

VII. Section 2.f) NCG N 385 Of the Relationship between the Company, the Shareholders and the General Public Formal Procedure of Continuous Operational Improvement for the communication of information to the market Policy: In the board meeting held on December 16, 2015, the board of directors agreed to annually evaluate the adequacy, timeliness and relevance of the various communications that the company has sent to the market in the past year, in order to discuss possible improvements that could be made in the process of sending information regarding the company to the general public, both in the sense that the information is easily understood, as well as that such communications be provided to the market in a timely manner. Procedure: For the implementation of the referenced policy, in the same session the board of directors agreed to approve the following formal procedure for continuous operational improvement: 1. Introduction. This document establishes the procedure that should be followed in order to improve the information of the Company made available to the market. 2. Purpose. To develop mechanisms to facilitate the analysis, understanding and evaluation of the adequacy, timeliness and relevance of information the Company discloses to the market, so that the board may determine the need to increase the quality of it or to implement improvements in the analysis and evaluation process of information to be delivered in the future. 3. Procedure. This procedure considers the revision of any disclosure of Information that the Company provides to the market. The board will evaluate annually the adequacy, timeliness and relevance of the various communications that the company has sent to the market in the past year, in order to discuss possible improvements that could be made in the process of sending company information to the general public, both in the sense that they are easily understood, as well as that such communications are provided to the market in a timely manner. 17

The board of directors may request additional or complementary information of the CEO and must consider whether the information was revealed in a sufficient, timely and relevant manner, and should take into special account if (i) the Company was requested to supplement the information; (ii) the requested supplementation was made and what it contained; (iii) the number of entities that communicated with the Company; and (iv) the nature of the communications received. The board of directors, in the meeting corresponding to the month of December of each year, shall review the information received in this respect, with a duty to decide on the content thereof and, if it deems necessary, propose measures to improve the form, timing and relevance of the information provided by the Company. It shall be the responsibility of the board of directors to define the mechanisms that permit the improvement of information of the Company that is provided to the general public, if it is necessary. 4. Person responsible for the action. The person responsible for coordinating the date on which the Board of Directors will assess the adequacy, timeliness and relevance of the various communications that the Company has sent to the market in the last year, is the CEO of the same, who must propose in the board activities calendar the dates set for that purpose. 18

VIII. Section 3. b) NCG N 385 Risk management and control Complaints Channel Policy: In the board meeting held on December 16, 2015 the board agreed to channel complaints as contemplated in the Crime Prevention Model, published at www.iam.cl, through which will be channeled those complaints related to the Crime Prevention Model and the Code of Ethics. The system will enable the complainant to know the status of their complaint. In the case of complaints under the Crime Prevention Model they can be anonymous, while for those relating to the Code of Ethics the identification of the complainant is required. Procedure: For the implementation of the referenced policy, in the same session the board agreed to approve the following procedure for the channeling of complaints: 1. Introduction. This document establishes the procedure agreed to by the Board of Directors, to channel the complaints received under the Code of Ethics and the Crime Prevention Model. 2. Purpose. To create mechanisms to adequately administer such complaints. 3. Procedure. The complaints channel considers that this should be done by writing to the offices of the Prevention Officer, located at Av. Presidente Kennedy No. 4,700 Floor 6, Vitacura, all in accordance with the provisions of the Crime Prevention Model. 19

IX. Section 3. c) NCG N 385 Risk management and control Replacement of managers or senior executives Policy: In the board meeting held on December 16, 2015 the board agreed to approve a procedure to facilitate the proper functioning of the company faced with the replacement or loss of the CEO or senior executives. Procedure: For the implementation of the referenced policy, in the same session the board of directors agreed to approve the following procedure for the replacement of managers and senior executives: 1. Introduction. The present document establishes the procedure agreed to by the Board for the succession of management. 2. Purpose. To create mechanisms that facilitate the adequate functioning of the Company faced with the replacement or loss of managers or senior executives. 3. Procedure. In case of the permanent absence of the CEO, the board may engage the services of a headhunting firm or other company providing similar services, or opt for the direct recruitment of the replacement, with a duty to consider in a special method the technical suitability, educational level, experience and/or any other relevant factor for the person that will fill the vacancy. In the case of the permanent absence of a senior executive, the CEO shall seek to promptly hire a replacement, following the aforementioned criteria. To the extent possible, it shall ensure that every manager or senior executive who leaves office submits a report of all outstanding issues that were in their care, indicating the status of each, the associated risks, people who are working on the matter and recommended future steps. For the CEO the report must be delivered to the president of the board of directors, and in the case of senior executives to the CEO. 20

X. Section 3. d) NCG N 385 Of risk management and control Executive compensation Policy: In the board meeting held on December 16, 2015, the board agreed to a compensation policy for the CEO and senior executives, which include not only considering the goals achieved based on the EBITDA and net income of the company, but also other elements such as the achievement of individual goals set by senior management, for example related to the implementation of the allocated budget, indicators of accidents in the workplace, prevention of accidents in the workplace and indicators of customer service, among others, in order to seek to promote appropriate incentives, reducing the risk that the executives expose the Company to which are not consistent with the policies defined on the subject or which could lead to the commission of any illegal activities. Procedure: For the implementation of the referenced policy, in the same session the board of directors approved the following procedure for the determination of executive compensation: 1. Introduction. This document establishes the procedure agreed by the Board of Directors for determining a compensation policy for the executives of the Company 2. Purpose. In order to prevent that certain compensation policies and indemnification of managers and senior executives of the company create incentives for executives to expose the company to risks which are not consistent with the policies defined in the subject or to the commission of any unlawful acts, the company has adopted guidelines and procedures that address this issue. 3. Procedure. In view of the above, compensation policies for managers and senior executives must understand not only the goals achieved based on EBITDA and net income of the company, but also the fulfillment of individual goals set by senior management, for example related to compliance with the allocated budget, indicators of accidents in the workplace, prevention of accidents in the workplace, and indicators of customer service, among others. 21

D) UPDATES AND CUSTODY The updating and custody of the policies and procedures contemplated in this compendium correspond to the CEO. E) ENTRY INTO FORCE OF THE POLICIES AND PROCEDURES The policies and procedures contained in this Compendium are in force since its approval at the regular meeting of the Board of Directors of the Company on December 16, 2015. 22