ETHICS AND COMPLIANCE

Transcription

1 2 ETHICS AND COMPLIANCE ETHICS AND COMPLIANCE GRI [102-17] INTERNAL AND EXTERNAL MECHANISMS OF COUNCIL ON ETHICS Internal and external mechanisms of council on ethics Internal: Conduct Committee - Governance Committee - Compliance Directorate Internal support: Audit Management - Risk Management - Legal Managements External: External audits - Support Consultancy GRI [205-1] NUMBER AND PERCENTAGE OF OPERATIONS ASSESSED IN TERMS OF CORRUPTION AND SIGNIFICANT RISKS IDENTIFIED Operations assessed in terms of corruption related risks Total number of operations Number of operations assessed in terms of corruption risks 5 5 Percentage of operations assessed 38.46% 38.46% Significant corruption risks identified in the reporting period Manipulation of purchases or bids to favor a private (suppliers) GRI [205-2] COMMUNICATION AND TRAINING ABOUT ANTI-CORRUPTION POLICIES AND PROCEDURES Training on the organization s policies and procedures to fight against fraud, corruption, assets laundering and terrorism financing President and Vice Presidents 10 8 Employees 9,515 4,879 Suppliers Communities Total 10,290 4,958 Training on the organization s policies and procedures to fight against fraud, corruption, 2017 assets laundering and terrorism financing No. % Total number of Board Members 7 Number and porcentage of members of the highest governance body that have been informed and trained on the organization s policies and procedures to fight fraud, corruption, asset laundering and financing terrorism 7 100% Number and porcentage of members of the highest governance body that ave received training on the fight against corruption 7 100%

2 Appendix 3 GRI [205-3] CONFIRMED INCIDENTS OF CORRUPTION AND ACTIONS TAKEN Confirmed incidents of corruption and actions taken Number of confirmed incidents of corruption 2 Actions taken Incidents Actions taken 1. Tampering in Purchases and Procurement 1. Blocking a vendor 2. Termination of agreement, employees involved 2. Undisclosed conflict of interest 2. Termination of agreement, employees involved GRI [206-1] LEGAL ACTIONS FOR ANTI COMPETITIVE BEHAVIOR, ANTI TRUST AND MONOPLY PRACTICES Number of legal actions pending or completed during the reporting period in which the organizations has been identified as a participant 2 Main outcomes of completed legal actions, including any decisiones or judgements Legal actions Principales resultados 1. Sanction issued by the Superintendence of Industry and Commerce -SIC- (December 2017) about The appeal for reconsideration was filed. Ruling is pending. alleged infringements to the protection of competition regimen in Colombia. 2. Sanction issued by the Superintendence of Industry and Commerce -SIC- (2008) about the alleged commission of competition-restrictive practices. This resolution was submitted to an appeal for reconsideration and upheld afterwards by the SIC in January Argos demanded this resolution before the Colombian Administrative Jurisdiction, and in ruling dated December 3, 2012, the Cundinamarca Administrative Court declared both resolutions void, thus granting exemption to the company and its legal representative from all fines. The SIC decided to appeal and the final decision is to be made by the Council of State. 3. USA - Southeast Ready Mix, LLC and Mayson Concrete, Inc. v. Argos North America Corp. et al. Case in investigation - preliminary status. 4. USA - Pro Slab, Inc. v. Argos North America Corp. et al. Case in investigation - preliminary status. GRI [419-1/307-1] NON COMPLIANCE WITH SOCIAL AND ECONOMIC REGULATIONS/ NON COMPLIANCE WITH ENVIRONMENTAL LAWS AND REGULATIONS Non compliance with social, economic and environmental regulations Social and economic regulation Environmental laws and regulation Total monetary value of significant fines 0 0 Total number of non monetary sanctions 0 0 Cases brought through dispute resolution mechanisms 0 0

3 4 ETHICS AND COMPLIANCE GRI [415-1] POLITICAL CONTRIBUTIONS AND OTHER EXPENDITURES Political contributions and other expenditures Currency Political contributions and other expenditures COP $2,076,232,806 $2,334,157,832 $1,727,604,933 $1,873,577,641 Coverage (as % of income) Incomes 100% 100% 100% 100% NOTE: The values of the previous years were modified by the change of methodology for calculating the contributions. [A-ETH2] LARGEST EXPENDITURES IN THE REPORTING PERIOD # Name of the organization 1 Camacol 2 Asocreto 3 ADOCEM 4 5 Cámara Colombiana de la Infraestructura ANDI- Asociación Nacional de Empresarios Type of organization Industry trade group Description of the organization Total amount paid in the reporting period National non-profit trade $381,644,800 Non-profit entity $334,524,679 National non-profir trade $223,697,284 National non-profit trade $ 184,067,151 Non-profit $ 126,705,712 Note: The main contributions were done to Camacol and to Asocreto (Colombian organizations). Throught Camacol we supported issues related to the development of construction industry and throught ASOCRETO we supported issues related to the concrete sector. [A-ETH1] ENVIRONMENTAL, SOCIAL AND HUMAN RIGHTS COMPLAINTS RECEIVED Communities Impacts on the natural environment 32 Impacts on mobility 7 Impacts on water 0 Impacts on air 0 Noise effects 2 Effects of vibrations (tranquility, rest, enjoyment) 1 Visual impacts 0 Damage/impact on private property 6 Unfullfilled committments 5 Road unsafety 11 Total received cases en Case follow up and open cases from 2016 up to januray 1st Total casos en gestión en Total cases closed in Cases closed with legal or administrative actions 0

4 Appendix 5 Labor relations Disrespect, bad working environment 40 Possible Human Rights violations - harrassment, abuse or corporal punishment - labor harrassment 15 Possible Human Rights violations - rest and working hours 2 Possible Human Rights violations - discrimination 5 Possible Human Rights violations - freedom of, to unionize and the effective recognition of the right to collective bargaining 1 Compensation that doesn t comply with the law 0 Total received cases en Case follow up and open cases from 2016 up to januray 1st Total cases managed in Total cases closed in Cases closed with legal or administrative actions 15 Corrupción Give/receive illegal payments 18 Complaints of situations of un declared conflicts of interests 6 Purchasing/ bid manipulation 7 Bribe/ FCPA 1 Total received cases en Case follow up and open cases from 2016 up to januray 1st Total cases managed in Total cases closed in Cases closed with legal or administrative actions 2

5 6 ETHICS AND COMPLIANCE [A-TAX1] TAXES PAID BY COUNTRY A-TAX1 TAXES PAID BY COUNTRY Country Revenue Operating Profit Federal Income Tax Sales Tax State Tax Property Tax Wealth tax Others Total COP USD COP USD COP USD COP USD COP USD COP USD COP USD COP USD COP USD Cementos Argos 9, ,170,547 3,264,123, ,731,014, ,310, ,894,344,486 66,044, ,956,107, ,096,528 26,915,207,194 9,120,893 36,339,005,762 12,314,383 20,315,277,436 6,884,341 43,155,493,083 14,624, ,575,435, ,085,300 Colombia 2,875,000,039, ,265,841 37,683,436,911 12,769,977 64,541,737,558 21,871, ,559,198,000 83,552, ,200,947,766 2,440,222 20,315,049,000 6,884,264 24,309,985,202 8,238, ,926,917, ,986,885 USA 4,641,250,824,502 1,572,804, ,819,665,793 97,534,909 1,020,585, ,851 3,221,446,768 1,091,668 1,071,822, ,214 21,300,737,742 7,218, ,947,225 43,697 26,743,540,006 9,062,719 Honduras 500,298,397, ,538, ,119,509,811 64,087,887 64,734,238,912 21,936,820 43,534,483,121 14,752,751 25,843,384,473 8,757, ,171,129 87, ,420,207,480 3,531, ,790,485,115 49,065,886 Panamá 705,813,012, ,182, ,293,559,453 64,146,868 56,867,270,885 19,270,900 48,430,296,288 16,411, ,569, , ,036,571, , ,799,708,123 36,191,759 Surinam 28,789,988,478 9,756,209 (5,559,642,491) (1,884,024) - - 2,441,724, , ,441,724, ,440 Curazao Haití 155,921,303,463 52,837,843 (19,134,528,785) (6,484,215) 2,303,574, ,624 4,249,633,371 1,440, ,724,445 36, , ,877, ,537 7,428,038,761 2,517,177 Puerto Rico 118,723,945,354 40,232,585 (13,355,185,691) (4,525,739) 191,811,100 65,000 6,276,007,403 2,126, ,322,675,398 2,142, ,216,028, ,082 14,006,522,066 4,746,461 Dominican Republic 133,665,240,184 45,295,818 14,176,172,010 4,803,951 3,871,046,323 1,311,801 24,186,086,454 8,196, ,337,737 95,338 28,338,470,514 9,603,201 Saint Marteen 18,187,738,019 6,163,371 (1,988,402,391) (673,820) ,319, , ,957,524 91, ,276, ,865 Antigua & Barbuda 19,230,250,802 6,516,653 1,436,783, , ,845, , ,982, , ,828, ,543 Saint Thomas French Guiana 55,615,527,807 18,846,716 (1,180,507,345) (400,045) 1,364,079, , ,179, , ,789,226 92,103 2,318,048, ,529 Virgin Islands 379,734,902, ,682,692 (4,579,846,311) (1,551,996) - - 1,104,066, , ,106,808,990 1,391,695 5,210,875,420 1,765,836 TAX POLICY Cementos Argos tax policy is aligned with our Corporate Governance Code, which provides the framework for the relationship among the different stakeholders and aims for transparency and proper information management and the officials responsibility. Argos tax strategy is also aligned with our Code of Business Conduct, which develops the principles of the Code of Good Governance for Argos employees, implementing the disclosure of financial information and transparency policy regarding Argos and its subsidiaries financial statements. Taxes are paid in accordance with all relevant rules and regulations of the countries in which we operate. Our fiscal strategy efficiently supports the operation and consolidation of procedures and protocols for transparency and management accountability, implementation and regulatory compliance of each country, by Cementos Argos and its subsidiaries, which in turn results in the best interest of its shareholders. We believe that a coherent and responsible tax strategy is an essential element of sustainability. Based on this background, we have adopted the following tax principles, which are essential for the proper management of our strategy: Compliance: Taxes are paid in accordance with the rules and regulations of the countries in which we operate, seeking to comply not only with the letter but also with the spirit and of the law. Likewise, our employees must comply with the Code of Conduct. Argos has zero tolerance for tax avoiding practices. Relationship with tax authorities: We promote an open, constructive and respectful dialogue with the tax authorities, based on all relevant facts and circumstances. We do not try to avoid taxes through "artificial" structures in tax havens. Rational Business: Taxes are paid according to businesses and benefits in countries where value is created, according to national and international regulation and standards and implementing arm's length principles. Transparency: Argos tax and fiscal situation approach is handled with a philosophy of transparency. Disclosures are made in accordance with the provisions of the existing rules governing each country as well as information requirements and IFRS. Transfer Pricing: The Company and its subsidiaries comply with the application of the arm s length standards, regarding the valuation of the cross border transactions between related companies. Taxable profits are not artificially shifted out of their jurisdiction and the tax base reported by the Company in the countries reflects the economic activity undertaken therein. The tax planning execution looks toward avoiding the economic double taxation; however, taxes are paid in accordance with all relevant regulations of the countries in which Argos operate.