Non-Financial Information

business or contracts


Art. 3.2.2.1 of the Code of Good Corporate Governance of the Colombian Securities Exchange (BVC) establishes the obligation to report about business and contracts executed during each quarter of a year which, due to their amount, required the approval of the BVC Board of Directors, indicating the purpose of the business or contract, as well as their date and the name (personal or commercial) the contractor.

In consideration of the above, we report that during the third (III) Quarter of 2017, the Exchange did not enter into contracts that, due to their amounts, required the authorization of the Board of Directors. Nor did it enter into contracts among its directors, managers, senior executives and legal representatives, including their relatives, partners or others with a relationship of a non-business nature.

research and processes


Administrative Investigations and Judicial Procedures - First Semester Closing 2017

The following link contains a list of judicial processes in which the Colombian Stock Exchange S.A. is currently involved:

JUDICIAL PROCESSES

sanctions or fines


The Colombian Securities Exchange reports that during the Third (3rd) Quarter of 2017, no fines or material sanctions were levied on it by the judicial or administrative authorities.

biannual risk report


RISK MANAGEMENT REPORT

Risk Management Report I Semester 2017

biannual report from the internal auditor


Below is the biannual report from the Internal Auditor:

2016 Second Semester Report presented in - January 2017

tax auditor


Election Process

Below you will be able to view a summary of the evaluation process that the Exchange applied to the Tax Auditor proposals submitted by some of the candidates to the position, that were considered by the General Assembly of Shareholders of the Colombian Securites Exchange on March 30, 2016.

EVALUATION - TAX AUDITOR SELECTION PROCESS


Election Results

The General Shareholders’ Meeting, in the ordinary session of March 30, 2016 selected the firm KPMG Ltd. as the entity's Tax Auditor for the period April 2016– March 2017 and approved the budgetary allocation recommended by management for the same period. In addition, the attestation of the income share that the fees paid by BVC represent, in regards to the total revenue of the Fiscal Audit firm and in regards to the total revenue of this firm coming from this activity for the 2015 and 2016 periods, issued by the accounting firm KPMG Ltda.

Fees certification 2015 and 2016


Functions

In accordance with the contract for provisioning of services as Tax Auditor entered into between the Exchange and KPMG Ltda., with the following being the scope of the referenced Contract:

"The services that are the subject of this contract will be carried out by THE CONTRACTOR within the scope of the existing regulatory framework. En consecuencia, las funciones de Revisoría Fiscal, serán principalmente aquellas establecidas en el articulo 207 y siguientes del Código de Comercio, en concordancia con lo dispuesto en el artículo 79 del Estatuto Orgánico del Sistema Financiero, las reglamentaciones expedidas por la Superintendencia Financiera de Colombia sobre la materia, las normas que regulan el ejercicio de la actividad de la Revisoría Fiscal a saber: Law 43 of 1990, Law 222 of 1995, as well as which are applicable to LA BOLSA, the Company Bylaws, the Code of Good Corporate Governance of LA BOLSA, and the present Contract.

THE CONTRACTOR in execution of the subject of this contract, must at minimum perform the activities described below:

  1. Provide the services inherent in the role of Tax Auditor in accordance with generally accepted accounting principles in Colombia - COLGAAP and the obligations set forth in the following standards:

    1. Artículos 203 al 217 de Código de Comercio y siguientes, así como las normas que los modifiquen, adicionen o deroguen.
    2. Circular Básica Jurídica, expedida por la Superintendencia Financiera de Colombia y todas las normas que la modifiquen, adicionen o deroguen.
    3. Circular Básica Contable, expedida por la Superintendencia Financiera de Colombia y todas las normas que la modifiquen, adicionen o deroguen.
    4. Circular externa 038 de 2013 expedida por la Superintendencia Financiera de Colombia y las normas que la modifiquen, adicionen o deroguen.


2. Comply with the provisions set forth in the Bylaws LA BOLSA which require the following responsibilities, headed by the Tax Auditor: (i) oversee that Management complies with the specific duties established by the oversight bodies, especially those related to reporting requirements, and the Code of Good Corporate Governance; and (ii) report relevant findings to company bodies and shareholders. The foregoing pursuant to the Code of Good Governance and the Bylaws of LA BOLSA.

3. Assessment the effectiveness of the information technology (IT) controls necessary to ensure the reliability of financial information. The foregoing is especially important under LA BOLSA is an infrastructure provider offering significant support to its systems operations.

4. Audit the financial statements of LA BOLSA, referencing the provisions set forth in the regulatory framework currently in effect relating to International Financial Reporting Standards (IFRS), principally Law 1314 of 2009, Decrees 3023 and 3024 of 2013 and other standards that develop, modify or complement them.

Para el desarrollo de la auditoría de estados financieros deberá aplicar las normas internacionales de auditoría –NIAs.

The following systems are considered as primary subjects of the Tax Audit process: Fixed Income System (Mec plus), Stock System (including X-Stream and the MILA infrastructure), Derivatives System (X-Stream), electronic Access Services (SAE) and the SAP ERP system. The main characteristics of the platform that supports the referenced applications is described in Appendix Number 4 of the TERMS OF REFERENCE.

THE CONTRACTOR obliged to submit at the satisfaction of LA BOLSA, with the following deliverables at minimum:

1. Detailed timetable of the activities to be carried out during the performance of the Contract. Said timetable must be presented for the validation and acceptance of LA BOLSA.

2. Reports on the results of the process implemented, as follows:

a. Reports with the findings and recommendations arising from the audit of the financial statements of LA BOLSA (under COLGAAP and under NIIF).

b. Certifications issued in compliance with its activities.

c. Review, signing and audit of the intermediate financial statements pursuant to the provisions issued by the Financial Superintendency of Colombia.

d. Reports on the financial statements of LA BOLSA under COLGAAP and NIIF, with the annual cutoff, duly reported. Said reports shall be issued in Spanish and in English.

The report on the financial statements under IFRS although it is not mandatory in respect to the effective period 2014, will be disclosed to the interest groups of LA BOLSA.

e. Reports with conclusions and recommendations on the following topics:

i. Compliance reviews of the standards and instructions of the operational risk management systems (Basic Accounting Circular), money laundering and terrorism risk (Basic Financial System Statute and internal manual) and information security (Basic Legal Circular).

ii. Reviews and assessments aimed at establishing the effectiveness of the internal control measures, preservation and custody of the assets of LA BOLSA or to third parties in the possession of LA BOLSA.

iii. Other issues verified by the firm in compliance with its legal obligations that warrant being reported to management on risks or deficiencies for the relevant measures to be taken.

f. Reports on the results of the assessment tasks on the general and applicable controls relative to the accounting and financial cycle.

g. Annual report on the effectiveness and adequacy of the Internal Control System LA BOLSA.

h. Biannual follow-up reports on the progress of LA BOLSA with respect to findings and recommendations.

i. Quarterly reports relating to compliance with the work plan agreed to with LA BOLSA".


conflict resolution


The differences that arise between shareholders and the management and the company, and also those that arise among shareholders or arise between shareholders and the management, regarding the completion, interpretation, execution, termination or development of the social contract, or during the liquidation of the company, that cannot be solved by a direct agreement by the parties, will be resolved by anArbitration Court. The arbitration will also extend to the obligation to indemnify against damages, as well as their quantification.

When the amount demanded is above one thousand (1000) legal monthly minimum salaries in force (SMMLV) in Colombia, the Arbitration Court will be formed by three (3) arbiters, that will be designed by agreement of the parties, or else, by the Centro de Arbitraje y Conciliaciones Mercantiles of the Bogota Chamber of Commerce. When the amount demanded is equal to or less than one thousand (1000) legal monthly minimum salaries in force (SMMLV) in Colombia, the Arbitration Court will be formed by one (1) arbiter, that will be designated by agreement of the parties, or else, by the Centro de Arbitraje y Conciliaciones Mercantiles of the Bogota Chamber of Commerce.

The arbiter, or arbiters to be designated, must be a registered lawyer, they will follow the letter of the law, and will accept the fees established by the Centro de Arbitraje y Conciliaciones Mercantiles of the Bogota Chamber of Commerce. The Arbitration Court will be located in the city of Bogota, and will be governed by the laws of Colombia.