Country Code Survey Page 1 of 16. Superintendencia Financiera de Colombia (Colombian financial regulator) Consultation of Country Code Survey

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1 Country Code Survey Page 1 of 16 Superintendencia Financiera de Colombia (Colombian financial regulator) Código País (Country Code) Consultation of Country Code Survey Type of issuer: 043 Cement Issuer: 005 CEMENTOS ARGOS S.A. Date (ddmmyyyy) Registration number: Issuer name: CEMENTOS ARGOS S.A. Issuer TIN: Name of legal representative: CEMENTOS ARGOS S.A. I.D Period evaluated (ddmmyyyy): Code assigned by SFC: 43 5 Legal corporate nature: S.A. (Stock Corporation) I. GENERAL SHAREHOLDERS ASSEMBLY Question 1 Question: At the last General Shareholders Assembly, were the shareholders provided timely at their registered office with the necessary documents to be informed about the topics to be treated? (Measure 1) Question 2 Question: Does the information provided to the shareholders contain any proposals about candidates for the Board of Directors? (Measure 2) o Yes No At the Assembly of 2010, there was no vote concerning the Board of Directors. According to the company s by-laws, the Board is elected for a period of 2 years. Question 3 Proposition: In case the issuer is associated with a parent company or a subsidiary, select yes or no. Otherwise, select not applicable. Question: Did the issuer provide the shareholders with the financial information of the issuer s parent company or subsidiary? (Measure 2) o N/A Question 4

2 Country Code Survey Page 2 of 16 Proposition: In case the issuer has a webpage, select yes or no. Otherwise, select not applicable. Question: Were the summons to the last General Shareholders Assembly and any other information that was relevant for the development of the latter published on the issuer s webpage? (Measure 3) o N/A Question 5 Question: Were the different topics to be treated dealt with according to the agenda established by the Shareholders Assembly during the evaluated period? (Measure 4) Development the assembly Question 6 Proposition: In case the terms of the glossary were segregated, select yes or no. Otherwise, select not applicable. Question: Was the segregation approved by the General Shareholders Assembly? (Measure 5) Question 7 Proposition: In case the terms of the glossary were segregated, select yes or no. Otherwise, select not applicable. Question: Was the segregation included in the summons to the General Shareholders Assembly where it was adopted? (Measure 6) Summons for the assembly Question 8 Proposition: In case the corporate purpose of the issuer was changed, select yes or no. Otherwise, select not applicable. Question: Was the change of the corporate purpose included in the summons to the General Shareholders Assembly where it was adopted? (Measure 6) Development of the assembly Question 9 Proposition: If any waiver to the subscription pre-emptive right was adopted at the Shareholders Assembly, select yes or no. Otherwise, select not applicable. Question: Was the waiver to the subscription pre-emptive right included in the summons to the Assembly where it was adopted? o Yes N/A o Yes N/A o Yes N/A o Yes N/A

3 Country Code Survey Page 3 of 16 (Measure 6) Question 10 Proposition: If the Shareholders Assembly modified its corporate domicile, select yes or no. Otherwise, select not applicable. Question: Was the corporate domicile change included in the summons to the Assembly where it was adopted? (Measure 6) Question 11 Proposition: If the Shareholders Assembly adopted an early dissolution, select yes or no. Otherwise, select not applicable. Question: Was the early dissolution included in the summons to the Assembly where it was adopted? o Yes N/A o Yes N/A Question 12 Question: Does the issuer have electronic communication channels to allow shareholders who can t attend the Shareholders Assembly to access the information about its development? (Measure 7) o Yes No Given the significant number of shareholders that usually attend the assembly, it was decided that the use of these channels, which are quite expensive, did not offer any real benefit to the shareholders. Approval of relevant operations Question 13 Proposition: Select yes or no if during the period in question, relevant operations with business associates were undertaken, other than those to whom both of the following conditions apply: a. Operations carried out at market rates, generally established by the party who acts as provider of the good or service in question; b. Regular operations carried out by the issuer, which are not material. Otherwise, select not applicable. Question: Were the relevant operations carried out with business associates, as referred to in the proposition section (except if they can t be carried out as a result of legal provision issued by the issuer itself), approved by the General Shareholders Assembly? (Measure 8) o Yes N/A Rights and fair treatment of shareholders Question 14 Question: Does the issuer disclose the rights and obligations inherent to the position of shareholder to the public clearly, accurately, and completely?

4 Country Code Survey Page 4 of 16 (Measure 9) Question 15 Question: Has the issuer permanently disclosed the types of shares issued to the public? (Measure 10) Question 16 Question: Has the issuer permanently disclosed the amount of shares issued to the public? (Measure 10) Question 17 Question: Has the issuer permanently disclosed the number of shares reserved for each type of shares to the public? (Measure 10) Question 18 Question: Does the issuer have internal operating regulations for the General Shareholders Assembly? (Measure 11) Question 19 Proposition: If the issuer has internal General Shareholders Assembly operating regulations, select yes or no. Otherwise, select not applicable. Question: Do the internal General Shareholders Assembly operating regulations include measures about its summoning process? (Measure 11) Question 20 Proposition: If the issuer has internal Shareholders Assembly Operating regulations, select yes or no. Otherwise, select not applicable. Question: Do the internal General Shareholders Assembly operating regulations include measures on its performance? (Measure 11) o N/A o N/A II. BOARD OF DIRECTORS Question 21

5 Country Code Survey Page 5 of 16 Question: Is the Board of Directors composed of an odd number of members, adequate for the appropriate performance of its functions? (Measure 12) Question 22 Question: Does the issuer s Board of Directors meet at least once a month? (Measure 13) o Yes No As stipulated in the company s by-laws, the Board of Directors must meet at least once per quarter. When required, extraordinary meetings are held. Question 23 Question: Does the Board of Directors have internal operating regulations? (Measure 14) Question 24 Question: Were the internal Board of Directors operating regulations shared with all the issuer s shareholders? (Measure 14) Question 25 Question: Are the internal Board of Directors operating regulations binding for all its members? (Measure 14) Question 26 Question: Do the internal Board of Directors operating regulations include the topic of the information that must be available to the Board of Directors first-time members, and also the general issues suggested in Measure 18? (Measure 14) Question 27 Question: Do the internal Board of Directors operating regulations require the identification, in the meeting minutes, of supporting documents that were used in the decision-making process, as well as the o N/A o N/A o N/A o N/A

6 Country Code Survey Page 6 of 16 reasons for approval or rejection in such decision and, in general, the suggestions included in measure 19? (Measure 14) Question 28 Question: Do the internal Board of Directors regulations stipulate the period prior to the Board of Directors meeting within which the information has to be submitted to the members, and, in general, the recommendations of Measure 20? (Measure 14) o N/A Question 29 Question: Is the period prior to the meeting in which the information has to be submitted to the Board members, which is established in the internal operating regulations, less than two (2) days? (Measure 20) o Yes No o N/A The regulations require that the documents to be considered in each meeting be sent at least 2 days in advance. Question 30 Question: Do the internal Board of Directors regulations define the channels that may be used by the Board of Directors members to obtain the information presented to them prior to the meeting? (Measure 20) Question 31 Question: Do the internal Board of Directors operating regulations allow for the possibility to contract an external advisor to contribute with elements of judgment needed to adopt certain decisions, at the request of any of its members? (Measure 22) Question 32 Question: Do the internal Board of Director s operating regulations o N/A o N/A o N/A

7 Country Code Survey Page 7 of 16 specify the conditions under which this entity may contract an external advisor to contribute with elements of judgment needed to adopt certain decisions, at the request of any of its members? (Measure 22) Question 33 Question: When a member of the Board of Directors is appointed, does the issuer analyze if the potential member meets the qualifications, experience, and professional background requirements for an optimum performance in their functions? (Measure 15) Question 34 Question: Is the majority of the members of the Board of Directors, or of the entity that acts as such, independent? (Measure 16) o Yes No The Board of Directors is composed of five members, two of which meet the requirements, stipulated by Law 964 of 2005, to be considered independent members. Duties and rights of the members of the Board of Directors Question 35 Question: Do the members of the Board of Directors report the existence of any direct or indirect relations they might have with any stakeholders, and that may result in situations of conflict of interest or affect their opinion or vote? (Measure 17) The Code of Good Governance requires the disclosure of such relationships. However, during 2010, no such cases were reported. Question 36 Question: Does the issuer provide its first-time members of the Board of Directors with enough information for them to acquire knowledge about the issuer specifically and the sector in which they are active in general? (Measure 18). Question 37 Question: Does the issuer provide its first-time members of the Board of Directors with information concerning the responsibilities, obligations and powers that come with their position? (Measure 18) Question 38 Question: Do the Board of Directors meeting minutes mention the studies, grounds, and other sources of information that serve as the basis in the decision-

8 Country Code Survey Page 8 of 16 making process? (Measure 19) Question 39 Question: Do the Board of Directors meeting minutes include the reasons for agreement or disagreement considered during the decision-making process? (Measure 19) The internal Board of Directors operating regulations stipulate that in the event of a vote, each member s reasons supporting their vote should be mentioned. However, during 2010, all proposals were adopted unanimously. Question 40 Question: Does the issuer provide the Board of Directors members with the relevant information for decision-making, based on the agenda contained in the summons, at least two days in advance? (Measure 20) Question 41 Proposition: If the issuer s Board of Directors has deputy members, respond yes or no. Otherwise, respond not applicable. Question: Does the issuer have ways of allowing the Deputy Members to be permanently informed about the topics submitted to the consideration of the Board of Directors, so that whenever the main board members are replaced, deputies have enough knowledge to carry out this task? (Measure 21) o Yes N/A Question 42 Question: Does the issuer have a budget allocation to back the eventual hiring of an external advisor by the Board of Directors, at the request of any of its members, to contribute with the elements of judgment needed to adopt certain proposals? (Measure 22) Support committees Question 43 appointment and remuneration matters, among others, respond yes or no. Otherwise, respond not applicable. Question: Does the Appointments and Remuneration Committee include at least one member of the Board of Directors? (Measure 23) o Yes N/A

9 Country Code Survey Page 9 of 16 Question 44 appointment and remuneration matters, among others, respond yes or no. Otherwise, respond not applicable. Question: Does the Appointment and Remunerations Committee help the Board of Directors in the performance review of the top management, meaning the CEO and the level immediately below? (Measure 24) Question 45 appointment and remuneration matters, among others, respond yes or no. Otherwise, respond not applicable. Question: Does the Appointment and Remunerations Committee propose a remuneration and salary policy for the issuer s employees, including the top management? (Measure 24) Question 46 appointment and remuneration matters, among others, respond yes or no. Otherwise, respond not applicable. Question: Does the Appointment and Remunerations Committee propose the appointment, remuneration, and removal of the CEO or whoever acts as such? (Measure 24) Question 47 appointment and remuneration matters, among others, respond yes or no. Otherwise, respond not applicable. Question: Does the Appointment and Remunerations Committee propose the objective criteria used by the issuer to hire its main executives? (Measure 24) Question 48 corporate governance matters, among others, respond yes or no. o Yes N/A o Yes N/A o Yes N/A o Yes N/A o Yes N/A

10 Country Code Survey Page 10 of 16 Otherwise, respond not applicable. Question: Does the Corporate Governance Committee include at least one member of the Board of Directors? (Measure 23) Question 49 corporate governance matters, among others, respond yes or no. Otherwise, respond not applicable. Question: Does the Corporate Governance Committee tend to ensure that shareholders and the market in general have complete, truthful and timely access to the issuer s information that has to be disclosed? (Measure 25) Question 50 corporate governance matters, among others, respond yes or no. Otherwise, respond not applicable. Question: Does the Corporate Governance Committee report about the performance of the Auditing Committee? (Measure 25) o Yes N/A o Yes N/A Question 51 corporate governance matters, among others, respond yes or no. Otherwise, respond not applicable. Question: Does the Corporate Governance Committee review and assess the way in which the Board of Directors complied with its duties throughout the period? (Measure 25) Question 52 corporate governance matters, among others, respond yes or no. Otherwise, respond not applicable. Question: Does the Corporate Governance Committee monitor the negotiations undertaken by the Board members with shares issued by the company or by other companies of the same group? (Measure 25) o Yes N/A o Yes N/A

11 Country Code Survey Page 11 of 16 Question 53 corporate governance matters, among others, respond yes or no. Otherwise, respond not applicable. Question: Does the Corporate Governance Committee supervise compliance with the remuneration policy of the administrators? (Measure 25) o Yes N/A Question 54 Question: In addition to the functions established by the law or the by-laws of the company, does the Auditing Committee pronounce itself, by means of a written report, regarding the possible operations to be carried out with business partners? (Measure 26) Question 55 Question: In addition to the functions established by the law or the by-laws of the company, does the Auditing Committee ensure that the possible future operations with business partners are carried out within market conditions and do not put the fair treatment among shareholders at risk? (Measure 26) Question 56 Question: In addition to the functions established by the law or the by-laws of the company, does the Auditing Committee establish the policies, criteria, and practices that the issuer will use for recollecting, spreading, and disclosing its financial information? (Measure 26) Question 57 Question: In addition to the functions established by the law or the by-laws of the company, does the Auditing Committee define mechanisms to consolidate the information of the issuer s control agencies and submit it to the Board of Directors? (Measure 26) III. DISCLOSURE OF FINANCIAL AND NON-FINANCIAL INGORMATION Question 58

12 Country Code Survey Page 12 of 16 Question: Does the issuer have a contact or attention point available to its shareholders that can be used as a communication channel between the shareholders and the issuer? (Measure 27) Question 59 Question: When the issuer considers that the response given to an investor can imply an advantageous position for him/her, does the issuer ensure access to such response to the other investors immediately, in accordance with the mechanisms that the issuer has established for this purpose, and under the same economic conditions? (Measure 28) Question 60 Question: Can a group of shareholders request specialized audits? (Measure 29) Question 61 Proposition: If a group of shareholders can request specialized audits, respond yes or no. Otherwise, respond not applicable. Question: Is there a procedure that specifies the share percentage needed to request specialized audits? (Measure 30) o N/A Question 62 Proposition: If a group of shareholders can request specialized audits, respond yes or no. Otherwise, respond not applicable. Question: Is there a procedure that specifies the reasons why the initial percentage to request specialized audits was defined? (Measure 30) o Yes No o N/A There is no procedure that specifies the reasons why 15% was established as the minimum percentage to be able to request specialized audits. When the Code of Good Governance was approved, the Board considered it low enough to allow minority shareholders to have access to this mechanism, yet high enough to avoid abuse or ungrounded requests of audits. Question 63 Proposition: If a group of shareholders can request specialized audits, respond yes or no. Otherwise, respond not applicable. Question: Is there a procedure that specifies the requirements for the request of a specialized audit? o N/A Question 64

13 Country Code Survey Page 13 of 16 Proposition: If a group of shareholders can request specialized audits, respond yes or no. Otherwise, respond not applicable. Question: Is there a procedure specifying who is in charge of the specialized audit and how they are appointed? (Measure 30) Question 65 Proposition: If a group of shareholders can request specialized audits, respond yes or no. Otherwise, respond not applicable. Question: Is there a procedure specifying who must bear the cost for the specialized audit? (Measure 30) Question 66 Proposition: If a group of shareholders can request specialized audits, respond yes or no. Otherwise, respond not applicable. Question: Are the deadlines set for each stage or step of the procedure regarding the hiring of a specialized audit precise? (Measure 30) o N/A o N/A o N/A Information for the market Question 67 Question: Are there any mechanisms, provided by the issuer, to allow the disclosure of material findings resulting from internal control activities to shareholders and other investors? (Measure 31) Question 68 Question: Does the issuer disclose general policies concerning remuneration and any other economic benefits given to: (Measure32) the members of the Board of Directors? the Legal Representative? the Fiscal Auditor? external advisors? external auditors? The information concerning the remuneration of the Board members and the Fiscal Auditor is given as soon as it is approved by the General Shareholders Assembly. The remuneration of external advisors and auditors is published in the Management Report, specifically in the attachment that refers to information included in Article 446 of the Commercial Code. On the webpage, the remuneration mechanism established by the company for its top executives is published. Question 69

14 Country Code Survey Page 14 of 16 Question: Does the issuer disclose contracts signed by its directors, managers, chief executives and legal representatives to the market, including their relatives, partners and other related parties? (Measure 33). The company s webpage has a section dedicated to this type of disclosure. However, during 2010, there were no such contracts, making it unnecessary to disclose anything. Question 70 Question: Does the issuer disclose its internal norms about conflict resolution to the market? (Measure 34) Question 71 Question: Does the issuer disclose the criteria applicable to negotiations carried out by directors, managers, and operators with shares and other securities issued by the company, i.e. the right of preference, to the market? (Measure 35) Question 72 Question: Does the issuer disclose the CVs of members of the Board of Directors and the internal control members, and if these latter don t exist, of the members of equivalent entities, as well as those belonging to legal representatives to the market, in order to demonstrate their qualifications and experience regarding the management skills needed for their assigned tasks? (Measure 36) Fiscal Auditor Question 73 Question: Did the issuer appoint individuals or companies that received revenues from the company and/or from their business associates that represent more than 25% of their last annual income as fiscal auditors? (Measure 37) o Yes No The people appointed as fiscal auditors are completely independent from the company and its business associates. Question 74 Question: Do the issuer or its business associates hire other services from the fiscal auditor besides the audit? (Measure 38) o Yes No Respecting the policies of the company, contracts signed with the Fiscal Auditor only include services that are directly related to their functions. Question 75 Question: Do the contracts between the issuer and the fiscal auditor include

15 Country Code Survey Page 15 of 16 clauses regarding the turnover of natural persons performing the audit within a five (5) year period? (Measure 39) Question 76 Question: Does the issuer demand the fiscal auditor to wait at least two (2) years before a person who has been rotated assumes responsibility for the audit of the same company again? (Measure 39) IV. CONFLICT RESOLUTION Question 77 Question: Does the issuer take the necessary measures to inform its shareholders of the jurisdictional procedures available to them to enforce their rights before the Superintendencia Financiera de Colombia (the financial regulator)? (Measure 40) Question 78 Question: Has the issuer adopted the means of direct settlement for the resolution of conflicts that arise between the issuer and shareholders, between shareholders and managers, and among shareholders? (Measure 41) o Yes No The by-laws of the company state that these conflicts must be settled through an arbitration tribunal without the need of a direct settlement. Question 79 Question: Does the issuer foresee an alternate solution for conflicts that arise between the issuer and the shareholders, between shareholders and managers, and among shareholders? (Measure 41) Question 80 Optional question Question: Should there be corporate governance practices different from those recommended by the Code of Best Corporate Practices, the issuer can describe them here. Cementos Argos is a company convinced of the importance of establishing and maintaining Good Governance practices. Furthermore, in its function as a member of the Círculo de Compañías, it is committed to become a promoter of such practices.

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