Monitoring architecture

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Internal Control Architecture

Grupo Argos is committed to strengthening and constantly improving its internal control systems. This allows it to have proactive risk management. Likewise, the Company encourages appropriate corporate behavior, transparent and efficient management, always in compliance of the laws.

For these purposes, the Board of Directors has a solid control environment within the Company and subsidiaries where it seeks to:

 

  1. Validate the bases of the internal control system, promoting a culture of risk prevention.
  2.  Define the roles and responsibilities of the internal control system with clearly established reporting lines.
  3. Implement in a coordinated manner the risk management schemes in the business administration.
  4. Monitor the operation of internal control systems and define the actions required for their improvement.
  5. Adopt actions and recommendations to manage risks and improve internal control systems.
  6. Consolidate and unify the accounting criteria, including the disclosure and presentation of financial information.

 

This coordination is carried out in Grupo Argos and its subsidiaries through a common and shared vision of the following bodies:

 

Audit, Finance and Risks Committee

The Audit, Finance and Risk Committee supports the Board of Directors in the supervising the effectiveness of the internal control system and the risk management system, the sufficiency and reliability of the financial information, for making decisions regarding the control and improvement of the activity of the Company and its Directors.

 

Internal Audit

Grupo Argos has a department responsible for Internal Audit which depends directly on the Audit, Finance and Risk Committee. It develops an independent activity that evaluates the quality and effectiveness of the control system in an objective manner and provides consulting and advice in order to add value in the execution of the Company's operations. It also helps to meet its goals with a systematic and disciplined approach to evaluate and improve the efficiency of the risk management system, controls and governance process.

It also contributes to preventing risks and permanently identifies and communicates opportunities for improvement, using knowledge, information and technology.

The Internal Audit evaluates the compliance with the Code of Good Governance and reports its results to the Sustainability and Corporate Governance Committee.

 

Profile of the Internal Auditor: Juan Fernando Fernández

 

Compliance

Grupo Argos has a department in charge of promoting the design of procedures aimed at ensuring compliance with all the regulations applicable to the Company, proposing the policies that favor adequate compliance of business conduct and designing training in regard to relevant matters.

 

Risks

The ongoing identi­fication, measurement, treatment, and monitoring of the risks to which the organization is exposed has the aim of assessing, in an agile and proactive manner, the positive and negative impacts that can affect the achievement of strategic objectives and thus business performance.

 

As such, risk management is the combination of managing talent, processes, projects, and facilities, as well as implementing mechanisms for preventing and mitigating the risks identi­fied. Moreover, the construction of a proactive culture of awareness and self-control regarding risk management.

Grupo Argos has a risk map, based on the business cycle that consists of the vision of the different systems of its activity as a whole, formed by the interrelation of groups and processes of the different activities that it develops.

 

External Control Architecture

 

Statutory Auditor

Grupo Argos has a Statutory Auditor which is in charge of the firm KPMG S.A.S, who fulfills the functions set forth in the Commercial Code and is subject to what is provided therein, with no disregard to the provisions of other regulations and by the Shareholders Assembly, as long as it is compatible with its legal obligations.

The Statutory Auditor’s report to the Assembly of Shareholders includes, in addition to the requirements inferred by law, the declaration of being an independent firm and the relevant findings made so that the Shareholders and other Investors have the necessary information to make decisions about the corresponding values.

Neither the Statutory Auditor, nor the natural persons or companies related to this, perform or provide services different from those of their position neither for Grupo Argos nor for any of its subsidiaries.

 

Colombian Superintendence of Finance

Grupo Argos is subject to the exclusive audit of the Colombian Superintendence of Finance. The Superintendence auditing is carried out over the exercise of the activity of issuance and over those aspects or circumstances that may impact the development of such activity.