Separate Financial Statements

NOTES TO THE SEPARATE FINANCIAL STATEMENTS OF GRUPO ARGOS S.A. As at DECEMBER 31, 2015 and 2014, and JANUARY 1, 2014 (In millions of Colombian pesos, except when otherwise indicated) NOTE 1: GENERAL INFORMATION Grupo Argos S.A. (hereinafter the Company) is a Colombian company incorporated through Public Deed No. 472 / February 27, 1934, of the Second Notary of Medellín. Its headquarters is in Medellín (Colombia) with the address: Carrera 43A 1A Sur 143. Its term is until February 27, 2033, and is extendable. The Company's corporate purpose is to invest in all types of movable and immovable property, in particular stocks, quotas or shares of equity, or any other shareholding in companies, entities, organizations, funds, or any other legal figure that allows the investment of resources. Moreover, it may invest in commercial papers, fixed income securities and the equity markets, whether they are listed on a securities exchange or not. In any case, issuers and/or recipients of the investment may be public, private or mixed, domestic or foreign. The Company may create public or private companies of any kind, or enter into partnerships with already established companies. Partnerships allowed by this clause may include companies that have a corporate purpose different from its own, provided said partnership is in the best interests of the Group. Grupo Argos S.A. is the parent company of Grupo Empresarial Argos, and through its subsidiaries, it participates in strategic infrastructure sectors: cement, energy, large-scale infrastructure and concessions, ports, coal and real estate. It is a public limited company listed on the Colombian Securities Exchange, like Cementos Argos S.A. (cement), Celsia S.A. E.S.P. (energy) and Organización de Ingeniería Internacional Grupo Odinsa S.A. (concessions and infrastructure). Additionally, the Company has strategic investments in companies listed on the securities exchange and private companies with a solid investment portfolio. On the Colombian Securities Exchange, Grupo Argos S.A. is an issuer of common and preferred shares aimed at strategic investors, private investment funds, pension funds, stock brokerage firms and investors in general (individuals and companies) interested in participating in the country's securities exchange. On February 26, 2016, the Board of Directors authorized the issuance of the separate financial statements for the Group, corresponding to the year ended December 31, 2015. NOTE 2: BASIS FOR PRESENTATION AND RELEVANT ACCOUNTING POLICIES 2.1. Compliance Statement Grupo Argos S.A., pursuant to the legal provisions issued by Law 1314 / 2009, implemented by Decrees 2420 and 2496 / 2015, prepares its separate financial statements in accordance with the Generally Accepted Accounting and Financial Reporting Standards in Colombia (NCIF, for the Spanish original), which are based on the International Financial Reporting Standards (IFRS), along with their interpretations, translated into Spanish and issued by the International Accounting Standards Board (IASB) on December 31, 2012. In addition, the Company applies the following accounting criteria, which are different from the IFRS issued by the IASB, in order to comply with current laws, decrees and other standards. Decree 2496 / December 23, 2015 Through which it is established that investments in subsidiaries must be reported in the books of the parent or controlling company by the equity method for the separate financial statements in accordance with Article 35 of Law 222 / 1995. Decree 2496 of December 23, 2015 - Through which the parameters for establishing post-employment benefits in response to IAS 19 are determined, which must correspond to Decree 2783 / 2001, as a best market estimate. This decree establishes the actuarial assumptions for calculating future salary and pension increases, the real technical interest rate applicable, and the method of calculating expected income increases for active and retired personnel. Public Notice 36 / 2014 of the Financial Superintendence of Colombia - The accounting treatment of the net positive differences generated in the application of NCIF for the first time cannot be distributed to offset losses, carry out capitalization processes, distribute profits and/or dividends, or be reported as reserves, and they may only be disposed of when they are effectively realized with third parties other than related parties, according to the principles of NCIF. The net negative differences will not be calculated Separate Financial Statements - 2015 1

for technical equity, minimum capital for operation or other legal controls for the preparers of financial information that are securities issuers subject to control. Decree 2784 / 2012 and Decree 3023 / 2013 regulate the preparation of financial statements based on the International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS), the International Financial Reporting Standards Interpretations Committee (IFRIC) and the Standing Interpretations Committee (SIC) and the Conceptual Framework for Financial Reporting issued through December 31, 2012, and published by the IASB in 2013. In addition, to prepare and present the financial statements, the instructions decreed by the Financial Superintendence of Colombia, through Public Notice 007 / 2015 are considered. For all previous periods and through the end of the fiscal year on December 31, 2014, the Company prepared its separate financial statements according to the generally accepted accounting principles in Colombia. For all legal purposes, the preparation of the Financial Statements as at December 31, 2014 and 2013, shall be the last Financial Statements pursuant to Decrees 2649 and 2650 / 1993, and the current regulations in Colombia as at that date. The separate financial statements for the fiscal year ended December 31, 2015, are the first that have been prepared in accordance with the NCIF. Section 2.3 includes information on how the Company adopted the NCIF for the first time. 2.2. Basis of Preparation and Accounting Policies 2.2.1. Basis of Preparation As defined in its bylaws, the Company has defined the yearly account cut-off date to prepare and disclose its general financial statements as December 31 for each period. For legal purposes in Colombia, the main financial statements are the separate financial statements, and they are the basis for the distribution of dividends and other allocations. They are expressed in Colombian pesos because it is the presentation or reporting currency for all purposes and all the values have been rounded to the closest unit of millions, except when otherwise indicated. The functional currency is the Colombian peso, which is the currency in the main economic environment where the Company operates. The Company's financial statements as at December 31, 2015 are the first financial statements prepared using the Generally Accepted Accounting and Financial Reporting Standards in Colombia (NCIF). These financial statements have been prepared using the historical cost, except for the revaluation of certain financial instruments that are measured at fair value at the end of each reporting period, as well as some assets and liabilities that are measured at amortized cost. Historical cost is generally based on the fair value of the remuneration delivered in the exchange of goods and services. The fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as at the measurement date, regardless of whether the price is directly observable or estimated using another measurement technique. When estimating the fair value of an asset or liability, the Company takes into account the characteristics of the asset or liability if the market participants consider those characteristics when valuing the asset or liability on the date of measurement. For the purposes of measurement and/or disclosure in these financial statements, fair value is established on this basis, except measurements that have some similarities to fair value, but that are not fair value, such as net realizable value in IAS 2 or value-in-use in IAS 36. Furthermore, for the purposes of financial reporting, fair value measurements are categorized as Level 1, 2 or 3, based on the degree to which the fair value measurement entries are observable and their importance as a whole. These levels are described below: Level 1 entries are prices quoted (not adjusted) in active markets for identical assets and liabilities to which the entity has access on the date of measurement. Level 2 entries are entries different from the prices quoted included in Level 1, and which are directly or indirectly observable for an asset or liability. Level 3 entries are non-observable entries for an asset or liability. Through the end of the fiscal year as at December 31, 2014, the Company prepared its annual financial statements using generally accepted accounting principles in Colombia (COL-GAAP). Financial information corresponding to the fiscal year ending on December 31, 2014, included in these separate financial statements for comparison purposes, has been modified and is presented in accordance with the NCIF. The effects of changes from COL-GAAP, applied as at December 31, 2014 and January 1, 2014, to the NCIF are explained in the reconciliations described in detail in Section 2.3. Separate Financial Statements - 2015 2

The Company has applied the accounting policies, judgments, estimates and relevant accounting assumptions described in Note 4. The Group has also considered the exceptions and extensions presented in IFRS 1 - First-time Adoption of International Financial Reporting Standards, which are described below. The separate financial statements were prepared to comply with the legal provisions of statutory information to which the Company is subject as an independent legal entity. Therefore, they do not consolidate the assets, liabilities, equity or income of the subsidiaries, nor do they include the adjustments or eliminations necessary to present the consolidated statement of financial position and statement of income for the Company and its subsidiaries. The investment in these companies is reported by the equity method as indicated below. These separate financial statements are presented to the General Meeting of Shareholders. They serve as the basis upon which dividends and other allocations are distributed. These statements must be read together with the Company's consolidated financial statements. Reconciliation of Income: Separate income 371,801 201,042 PPA adjustment of Organización de Ingeniería Internacional S.A. 3,725 - Profit from sale of Cementos Argos S.A. (259,547) - Policy for changes in shareholding of Celsia S.A. E.S.P. and Cementos Argos S.A. (10,150) 826 Adjustment in the minority holdings in associates (28,417) (44,547) Equity method on associates and joint ventures 298,444 416,942 Equity method on associates from the consolidated statement of Organización de Ingeniería Internacional S.A. 27,112 - Deferred tax 2,288 3,942 Elimination of operating and non-operating dividends in associates (74,214) (56,509) New PPA adjustments of Organización de Ingeniería Internacional S.A. (881) - Sales of shares in Grupo de Inversiones Suramericana S.A. (29,161) (563) Consolidated income 301,000 521,133 2.2.2. Relevant Accounting Policies Relevant accounting policies that Grupo Argos S.A. applies when preparing its separate financial statements are presented below in detail: 1) Financial Assets Financial assets are initially reported at fair value plus (less) transaction costs that are directly attributable, except for those that are measured afterward at fair value through profit or loss. The Company subsequently measures financial assets at amortized cost or fair value, following the business model for managing financial assets and the instrument s characteristics of contractual cash flows. A financial asset is measured afterward at amortized cost using the effective interest rate if the asset is held within a business model with the objective of holding it to obtain contractual cash flows and the contractual terms that it grants. This is on specific dates, and cash flows are only capital plus interest payments on the pending capital value. Financial assets not measured at amortized cost are measured afterward at fair value through profit or loss. However, for investments in capital instruments that are not held for trading purposes, the Company may opt to, irrevocably and at the time of initial reporting, present gains or losses from the fair value measurement to other comprehensive income. In the disposal of investments at fair value through other comprehensive income, the accumulated value of gains or losses is directly transferred to retained earnings, not reclassified as income for the period. Cash dividends received from these investments are reported to the Separate Financial Statements - 2015 3

statement of comprehensive income. The Company has chosen to measure some of its investments in capital instruments at fair value through other comprehensive income. a) Impairment of financial assets: At the end of each reporting period, the Company assesses whether there is objective evidence that a financial asset or group of financial assets measured at amortized cost have been impaired. If there is any evidence of impairment, the value of the loss is measured as the difference between the asset s carrying amount and the present value of estimated future cash flows, excluding future credit losses that have not been incurred, discounted with the original effective interest rate of the financial asset. To report impairment loss, the carrying amount of the associated asset is reduced and the loss is reported to the statement of comprehensive income. The existence of objective evidence of impairment is assessed individually for significant financial assets and collectively for financial assets that are not individually significant. Among the objective evidence that a portfolio of accounts receivable may be impaired, the Company's past experience should be included with respect to payment collection, an increase in the number of delayed payments in the portfolio that exceed the average credit period, as well as observable changes in local and national economic conditions that are related to the failure to make such payments. For financial assets recorded at amortized cost, the impairment loss is the difference between the asset s carrying amount and the current value of estimated future cash flow, discounted at the financial asset s original effective interest rate. b) Derecognition of financial assets: A financial asset or a part of it is derecognized in the statement of financial position when it is sold, is transferred, expires or when control is lost over the contractual rights or over the cash flows of the instrument. If the Company does not substantially retain or transfer all of the risks and advantages inherent to the property and maintains control over the transferred asset, it will report its share in the asset and the associated obligation for the amounts that it will have to pay. If the Company substantially retains all of the risks and advantages inherent to the property of a transferred financial asset, it will keep reporting the financial asset and it will also report a collateral loan for the revenue received. In the total derecognition of a financial asset, the difference between the asset's carrying amount and the amount of the remuneration received that had been reported in other comprehensive income and accumulated in equity is reported to the statement of income. 2) Financial Liabilities and Equity Instruments a) Classification as a debt or equity: Debt and equity instruments are classified as financial liabilities or as equity, based on the terms of the contractual agreement and the definitions of a financial liability and equity instrument. b) Equity instruments: An equity instrument is any contract that shows evidence of residual interest in an entity s assets after deducting all its liabilities. Equity instruments issued by an entity of the Company report revenue received, net of direct issuance costs. The repurchase of equity instruments belonging to the Company is directly reported and deducted as equity. No gain or loss is reported to the statement of income that is a result of the purchase, sale, issuance or cancellation of the Company s own equity instruments. c) Compound instruments: The components of compound instruments (mandatory convertible bonds) issued by the Company are classified separately as financial liabilities and equity depending on the terms of the contractual agreement and the definitions of financial liability and equity instrument. A conversion option that will be settled by exchanging a fixed cash amount or another financial asset for a set number of the Company's equity instruments is an equity instrument. As at the date of issue, the fair value of a liability component is calculated using the current market interest rate for similar, nonconvertible debt. This amount is recorded as a liability at amortized cost, using the effective interest rate method until it is extinguished at the time of conversion or the instrument maturity date. The conversion option classified as equity is determined by deducting the amount of the liability component from the fair value of the whole compound instrument. This is reported and included in the statement of equity, net of income tax, and its measurement may not be subsequently reapplied. In addition, the conversion option classified as equity will remain as equity until it has been exercised, in which case, the balance reported on the statement of equity will be transferred as a premium in share issues. No gain or loss will be reported to the statement of income at the time of conversion or expiration of the conversion option. Separate Financial Statements - 2015 4

The transaction costs related to issuing the convertible instruments will be allocated to the liability components and equity in proportion to the breakdown of gross revenue. Transaction costs related to the equity component will be directly reported on the statement of equity. Transaction costs related to the liability component are included in the carrying amount of the liability component and are amortized over the life of the convertible instruments using the effective interest rate method. d) Financial liabilities: Financial liabilities are classified at fair value through profit or loss or as 'other financial liabilities'. i. Financial liabilities at fair value through profit or loss: Financial liabilities at fair value through profit or loss include financial liabilities held-for-trading and financial liabilities designated upon initial reporting at fair value though profit or loss. A financial liability is classified as held-for-trading if: It has been acquired primarily for short-term resale; or At the time of initial reporting, it forms part of a financial instrument portfolio managed by the Company and there is evidence of a recent current pattern of short-term benefits; or It is a derivative that has not been designated or effective as a hedging instrument or collateral. A financial liability (that is not held-for-trading) may also be designated as a financial liability at fair value through profit or loss at the time of initial reporting if: Said designation eliminates or significantly reduces an inconsistency in measurement or reporting that could arise; or The financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its return is evaluated based on fair value, in accordance with the risk management documented by the Company or its investment strategy, and information on the Company is provided internally on such basis; or It forms part of a contract that contains one or more implicit instruments. IFRS 9 allows any combined contract to be designated at fair value through profit and loss. Financial liabilities at fair value through profit or loss are reported at fair value, reporting any gain or loss arising from the new measurement to the statement of income. Any net gain or loss reported to the statement of income incorporates any interest paid on the financial liability and it is included in the 'other gains and losses' entry. Fair value is determined as described in Section 2.2.1 Basis of Preparation. ii. Other financial liabilities: Other financial liabilities (including loans and trade and other accounts payable) are measured afterward at amortized cost using the effective interest rate method. The effective interest rate method is a method used to calculate the amortized cost of a financial liability and to charge the financial expense over the relevant period. The effective interest rate is the discount rate that gives an equal balance of cash flows receivable or payable (including all fees and points paid or received that form part of the effective interest rate, the transaction costs and other premiums or discounts), estimated over the expected life of the financial liability, or when sufficient, over a shorter period with the net carrying amount at the time of initial reporting. iii. Collateral contract: A collateral contract is an agreement that requires that the issuer makes specific payments to reimburse the holder for any loss incurred by the debtor's failure to make the payments on the established date pursuant to the terms of the debt security. Collateral contracts issued by an entity are initially measured at their fair value, and if they are not expressed as financial instruments at fair value through profit and loss, they are subsequently measured at the greater between: The amount of the debt established according to IAS 37; and The initially reported amount less, when appropriate, the accumulated amortization reported in accordance with the policies for reporting ordinary revenue. Separate Financial Statements - 2015 5

iv. Derecognition of a financial liability: The Company will derecognize a financial liability if, and only if, the Company's obligations are settled or met, or they expire. The difference between the derecognized financial liability's carrying amount and the compensation paid and payable is reported to the statement of income. 3) Financial Derivatives Financial derivatives are measured at fair value through comprehensive income. Some derivatives included in other financial instruments (implicit derivatives) are treated as separate derivatives when their risk or characteristics are not closely related to those of the main contract and are not recorded at fair value with their unrealized losses and profits included in the statement of income. Certain transactions with derivatives that do not qualify to be reported as derivatives for hedging are treated and reported as derivatives for trading, even when they provide hedging effective for managing risk positions. For those derivatives that are qualified to be reported as derivatives for hedging, at the start of the hedging relationship, the Company formally designates and documents the relationship, as well as the risk management objective and the strategy for hedging. The documentation includes the identification of a hedging instrument, the part or transaction hedged, the nature of the risk being hedged and how the Company will evaluate the efficacy of changes in fair value of the hedging instrument when compensating for the exposure against changes in fair value of the hedged entry or in cash flows attributable to the hedged risk. Such hedging instruments are expected to be highly effective in compensating for changes in fair value or in cash flows, and they are constantly evaluated to determine that they have really been that effective throughout the reporting periods for which they were designated. For purposes of hedge accounting and standards applicable to the Company, hedging instruments are classified and reported as follows, once the strict criteria for their reporting have been met: a) Hedging instruments at fair value: When hedging exposure to changes in fair value of reported assets and liabilities or of firm, unreported commitments. The change in fair value of a derivative for hedging is reported to the statement of comprehensive income in the statement of income section as a financial cost or revenue. The change in fair value of the hedged entry attributable to the hedged risk is reported as part of the carrying amount for the hedged entry, and is also reported on the statement of comprehensive income in the statement of income section as a financial cost or revenue. b) Cash flow hedging instruments: When hedging exposure to a variation in cash flows attributed to either a particular risk associated with a reported asset or liability or to a highly probable foreseen transaction, or to the exchange rate risk in a firm, unreported commitment. Accounting for cash flow hedges has the objective of reporting variations in the fair value of a hedging instrument to other comprehensive income to apply them to the statement of income when and at the rate that the hedged entry affects the same. Derivative losses will only be reported to the statement of income when they occur. The effective portion of the gain or loss resulting from measuring the hedging instrument is immediately reported to other comprehensive income, while the ineffective portion is immediately reported to the statement of comprehensive income in the statement of income section as a financial cost. Amounts reported in other comprehensive income are reclassified to the statement of comprehensive income in the statement of income section when the hedged transaction affects income, as well as when the hedged finance revenue or expense is reported, or when the foreseen transaction takes place. When the hedged entry is the cost of a non-financial asset or liability, the amounts reported in other comprehensive income are reclassified at the initial carrying amount of the non-financial asset or liability. If the foreseen transaction or the firm commitment is no longer expected to take place, the accumulated gain or loss previously reported in other comprehensive income is reclassified to the statement of comprehensive income in the statement of income section. If the hedging instrument expires or is sold, is resolved or is exercised without a subsequent replacement or renewal of one hedging instrument for another hedging instrument, or if its designation as a hedging instrument is revoked, any accumulated gain or loss previously reported in other comprehensive income remains there until the foreseen operation or the firm commitment affects the income. Separate Financial Statements - 2015 6

4) Fair Value Measurements The fair value is the price that could be received from selling an asset or paid by transferring a liability in an orderly transaction between market participants on the date of measurement. The fair value of all financial assets and liabilities is determined on the date the financial statements are presented for reporting or disclosing in the notes to the financial statements. Judgments include such data as liquidity risk, credit risk and volatility. Changes in the hypotheses as for those factors could affect the reported fair value of the financial instruments. 5) Foreign Currency Transactions in currency different from the entity s functional currency (foreign currency) are reported using the current exchange rates on the dates of said operations. At the end of each reporting period, the monetary entries denominated in foreign currency are reconverted at the current exchange rates for that date. Non-monetary entries reported at fair value are reconverted at the current exchange rates on the date said fair value was determined. Non-monetary entries measured at historical cost are not converted. Exchange rate differences for the non-monetary entries are reported on the statement of income for the period in which they arise, except for: Exchange rate differences resulting from loans denominated in foreign currency related to assets under construction for future productive use, which are included in the cost of such assets as they are considered an adjustment to costs because of the interest on such loans denominated in foreign currency, provided they do not exceed the costs for loans of a liability with similar characteristics in the Company's functional currency. Exchange rate differences resulting from transactions related to hedges of exchange rate risk. Exchange rate differences resulting from monetary entries of receivables or payables related to operations abroad for which there is no plan nor is it possible to generate payment (thus forming part of the net investment in the operation abroad), which are initially reported in other comprehensive income and reclassified from the statement of equity to the statement of income upon reimbursement of the non-monetary entries. In the disposal of a business abroad (i.e., the disposal of all the Company s shares in a business abroad, or a disposal that involves a partial sale of a share in a joint arrangement or an associate that includes a business abroad for which the retained share is converted to a financial asset), all accumulated exchange rate differences on the statement of equity related to that transaction attributable to the Company s owners are reclassified to the statement of income. In addition, as regards the partial disposal of a subsidiary (which includes a business abroad), the entity will again attribute the proportional part of the accumulated amount of exchange rate differences to minority holdings and they are not reported on the statement of income. In any other partial disposal (i.e., partial disposal of associates or joint arrangements that do not involve the Company's loss of significant influence or joint control), the entity will only reclassify the proportional part of the accumulated exchange rate differences to the statement of income. Adjustments to goodwill and fair value of identifiable acquired assets and liabilities generated during the acquisition of a business abroad are considered assets and liabilities for said operation and are converted at the current exchange rate at the end of each reporting period. Exchange rate differences that arise will be reported in other comprehensive income and accumulated equity. 6) Impairment of Tangible and Intangible Assets At the end of each period, the Company assesses the existence of indications that an asset may be impaired. The recoverable value of an asset or cash-generating unit is estimated when it is not possible to estimate the recoverable amount of an individual asset when impairment is detected or, at minimum, annually for intangible assets with an indefinite useful life and intangible assets that are no longer in use. When a fair and consistent distribution basis is identified, the common assets are also allocated to the individual cash-generating units or distributed to the smallest groups of cash-generating units for which a basis can be identified. The recoverable value of an asset is the greater amount between the fair value less cost of sale, whether it be of an asset or a cash-generating unit, and its value-in-use. When estimating the value-in-use, the estimated future cash flows are discounted from current value using a before-tax discount rate that reflects current market valuations with respect to the money's temporary value and the specific risks for the asset for which the estimated future cash flows have not been adjusted. When the carrying amount of an asset or a cash-generating unit exceeds its recoverable value, the asset is considered impaired and its value is reduced to the recoverable amount. Separate Financial Statements - 2015 7

When impairment loss is later reversed, the carrying amount of the asset (or cash-generating unit) increases to the revised estimate for its recoverable amount, ensuring that the increased carrying amount does not exceed the carrying amount that would have been calculated if the impairment loss for said asset (or cash-generating unit) was not reported in previous years. The reversal of an impairment loss is automatically reported to the statement of income. 7) Taxes This policy describes the income tax that represents the sum of the current income tax payable and deferred tax. It also includes wealth tax. a) Current income tax: Current income tax assets and liabilities for the period are measured by the values that are expected to be recovered from or paid to the tax authority. Current income tax expense reported is based on taxable income rather than profit or loss on the books. Said income is taxed at the income tax rate for the current year, and in accordance with the provisions in the country s tax law. Tax rates and regulations used to calculate such values are those in force or substantially approved at the end of the reporting period and that generate taxable profits. b) Deferred tax: Deferred tax is reported on the temporary difference between the carrying amount of the assets and liabilities included in the financial statements and the corresponding tax bases used to establish tax earnings. A deferred tax liability is generally reported for all temporary tax differences. A deferred tax asset is reported for all deductible temporary differences as long as it is probable that the entity will have future taxable earnings with which to offset these temporary deductible differences. These assets and liabilities are not reported if the temporary differences arise from initial reporting of other assets and liabilities in a transaction that does not affect tax earnings or accounting profit. A deferred tax liability should be reported for temporary taxable differences associated with investments in subsidiaries and associates, and shares in joint ventures, with the exception of those in which the Company can control the reversal of the temporary difference and when there is the possibility that it cannot be reversed in the near future. Deferred tax assets that arise from temporary deductible differences associated with such investments and shares are only reported as long as it is probable that the entity will have future taxable profits available with which to offset these temporary differences and when there is the possibility that they can be reversed in the near future. The carrying amount of a deferred tax asset should be subject to review at the end of every reporting period and should be reduced when it is considered probable that there will not be sufficient taxable profits available in the future to allow the full or partial recovery of the asset. Deferred tax assets and liabilities should be measured at the tax rates expected to be applied in the period in which the asset is realized or the liability is paid, based on the rates (and tax laws) that have been approved or practically approved and in the final approval phase by the end of the reporting period. The measurement of deferred tax assets and liabilities reflects the tax consequences that result from how the entity expects to recover or settle the carrying amount of its assets or liabilities at the end of the reporting period. c) Wealth tax: Through Law 1739 / December 23, 2014, the National Government established wealth tax, which is applied for the possession of wealth (gross equity less current debts) equal to or greater than COP 1,000 as at January 1, 2015, January 1, 2016, and January 1, 2017. The Company reports this tax on the statement of income (operating expense). The marginal rate that applies to the Company is 1.15% for 2015, 1% for 2016 and 0.4% for 2017. 8) Intangible Assets a) Intangible assets acquired separately: Intangible assets with a definite useful life acquired separately are reported at cost less accumulated amortization and accumulated impairment loss. Amortization is reported using the straight-line method over estimated useful life. The estimated useful life and depreciation method are reviewed at the end of each reporting period, and the effect of any change in the estimation is recorded on a prospective basis. Intangible assets with an indefinite useful life acquired separately are reported at cost less any accumulated impairment loss. b) Internally generated intangible assets: Disbursements originating from research activities are reported as an expense for the period in which they are incurred. An internally generated intangible asset as a result of development activities (or the development phase of an internal project) is reported if, and only if, the conditions indicated below are met: Separate Financial Statements - 2015 8

Technically, it is possible to complete the production of an intangible asset in such a way that it becomes available for use or sale. The intention is to complete the intangible asset in question, to use or sell it. The Company can use or sell the intangible asset. It is clear how the intangible asset will generate probable future economic benefits. Appropriate technical, financial or other resources are available to complete development and use or sell the intangible asset. The Company can reliably measure the expenditure attributable to the intangible asset during its development. The amount initially reported for an internally generated intangible asset will be the total expense incurred from the moment the asset meets the previously established conditions for reporting. When an internally generated intangible asset cannot be reported, development expenses are reported to the statement of income for the period in which they were incurred. After its initial reporting, an internally generated intangible asset will be reported at cost less accumulated amortization and accumulated impairment losses, over the same base as intangible assets that are acquired separately. c) Derecognition of intangible assets: An intangible asset is derecognized at the time of its disposal, or when future economic benefits from its use or disposal are not expected. The gains or losses that arise from derecognizing the carrying amount of an intangible asset, measured as the difference between the net income from the sale and carrying amount of the asset, are reported to the statement of income when the asset is derecognized. 9) Investments in Subsidiaries Grupo Argos S.A. controls a company when it has power over it, is exposed to or has a right to variable returns from its involvement in the company and has the ability to influence such returns, because of such power. The Company evaluates whether or not it has control over a company if the events and circumstances indicate there are changes in one or more of the three control elements mentioned above. When evaluating control, among other things, it considers the existing substantive rights to vote, the contractual agreements signed between the entity and other parties and the rights and ability to appoint and remove key members of management. When the Company holds less than a majority of the voting rights in a company, but said voting rights are sufficient for it to unilaterally exert its influence to direct relevant activities of said company, it has control over the company. The Company considers all relevant actions and circumstances to evaluate whether the Company's rights to vote are sufficient or not to ensure control, which include: The percentage of the Company s voting rights compared to the percentage and distribution of voting rights held by other companies. Potential rights to vote held by the Company and other shareholders or other parties. Rights derived from contractual agreements. Any additional event or circumstance that indicates that the Company has, or does not have, the current ability to direct relevant activities when decisions must be made, including voting patterns in previous meetings of shareholders. The Company must make estimates and assumptions that affect the reported amounts of assets and liabilities, revenue, costs and expenses, and the disclosures of assets and liabilities as at the date of the separate financial statements. The critical accounting judgments and key sources of estimation made by the Company are described in Note 4. Investments in subsidiaries are measured by the equity method in the separate financial statements. 10) Investments in Associates and Joint Arrangements Separate Financial Statements - 2015 9

An associate is an entity over which the Company has significant influence, which means the power to intervene in the financial policy and operational decisions of the company, without having to have absolute or joint control over it. A joint venture is a joint arrangement whereby the parties that have joint control have a right to the net assets of the arrangement. Joint control is the contractually agreed shared control that exists only when the decisions over the relevant activities require the unanimous consent of the parties that share control. A joint operation is a joint arrangement through which the parties that have joint control of the arrangement have a right to the assets and obligations associated with the liabilities under the arrangement. Investment in associates and joint ventures is recorded at cost in the separate financial statements. The Company must report a joint operation when: The contractual agreement is not structured through a separate vehicle; or The contractual agreement is structured through a separate vehicle, but through evaluation, it is clear the Company has the right to assets and obligations associated with liabilities under the agreement but not rights to the net assets under the agreement. The Company must consider the following aspects to report a joint operation: the legal format of the separate vehicle, the clauses of the contractual agreement and, when applicable, other factors and circumstances. The agreement to which it is a party must establish the rights of the parties to the assets and the obligations associated with liabilities under the agreement, the rights to revenue from ordinary activities and the obligations for expenses assumed by the parties. The Company must report the following on its financial statements for its share in a joint operation: Its assets, including its share in assets held jointly. Its liabilities, including its share in liabilities incurred jointly. Its revenue from ordinary activities derived from the sale of its share in the product of the joint operation. Its share in the revenue from ordinary product sales activities carried out by the joint operation; and its expenses, including its share in the expenses incurred jointly. The Company must account for the assets, liabilities, profits from ordinary activities and expenses related to its share in a joint operation in accordance with the applicable policies, particularly related to assets, liabilities, revenue from ordinary activities and expenses. When the Company is a joint operator and conducts sales or contributes to assets in a joint operation, it must account for the transaction as follows: It must report gains and losses derived from this transaction only in the proportion of holdings with the other parties in the joint operation. If the transaction provides evidence of a reduction in the net realizable value of the assets or an impairment loss, the Company must report total losses. When the Company is a joint operator and carries out a transaction to purchase assets derived in a joint operation, it must account for the transaction as follows: It will report its share on the statement of income only when it resells these assets to a third party. If the transaction provides evidence of a reduction in the net realizable value of the assets or an impairment loss, the Company must report its share in these losses. When the Company is a party to a joint operation, but does not have joint control over the operation, it must account its share in the manner indicated above only if it has a right to the assets and obligations associated with liabilities under the joint operation. Separate Financial Statements - 2015 10

If the Company participates in a joint operation, but does not have joint control over the operation, nor the right to assets and obligations associated with liabilities under the joint operation, it must account its share in the joint operation in accordance with the applicable IFRS. 11) Investment Properties Investment properties are those that are held to generate rental and/or increase capital (including investment properties under construction for said purposes). In the Company, an investment property is measured at cost, which is the purchase price and all costs directly associated with the investment property. The Company excludes costs derived from daily maintenance for the purposes of measuring an investment property. Said costs must be reported on the statement of income for the period they are incurred. The following must also be excluded: Start-up costs (unless they are necessary to ensure the investment property is in conditions for use). Operating losses incurred before the investment property reaches the planned level of occupancy. Abnormal amounts of waste, labor or other resources incurred during the property s construction or development. At a later date, the Company measures all its investment properties at cost, following the property, plant and equipment guidelines. 12) Non-current Assets Held for Sale and Discontinued Operations The non-current assets and the groups of assets held for sale are classified as held for sale if their carrying amount will be recovered through a sales transaction instead of their continued use. These assets or groups of assets are presented separately as current assets and liabilities in the statement of financial position for the lower amount between their carrying amount and their fair value less costs of sale, and they are not depreciated or amortized from the date of their classification. This condition is considered met only when the sale is highly probable and the asset (or group of assets for disposal) is available for immediate sale in its current state, subject only to the terms that are normal and commonly expected for sales of these assets (or group of assets for disposal). Management must be committed to the sale, which should be reported as a finalized sale within the period of one year from the date of classification. When the Company is committed to a sales plan that involves the sale of the investment or a portion of an investment, the investment or portion of the investment that will be sold is classified as held for sale when it meets the aforementioned criteria. Revenue, costs and expenses derived from a discontinued operation are presented separately from those derived from continuous activities in a single entry after income tax on the separate statement of comprehensive income for the current period and the comparison period of the previous year, even when the Company retains a minority holding in the subsidiary after the sale. 13) Property, Plant and Equipment Fixed assets include the amount of land, real estate, personal property, vehicles, IT equipment and other facilities owned by the Company, and that are used in its operations. The Company reports an item of property, plant and equipment when it is probable that the asset will generate future economic benefits, it is expected to be used for a period greater than one year, all risks and benefits inherent to the property have been received and its value can be reliably measured. Fixed assets are measured at cost less accumulated depreciation and accumulated impairment losses, if applicable. Commercial discounts, rebates and other similar items are deducted from the fixed asset's acquisition cost. Assets under construction for management purposes are reported at cost less any reported impairment loss. The cost includes professional fees and in the case of qualified assets, the borrowing costs capitalized pursuant to the Company s accounting policy. Said properties are classified in the appropriate categories of property, plant and equipment when construction is complete and they are ready for their intended use. The depreciation of these assets, like in the case of other property assets, starts when the assets are ready for use. Land reported under property is not depreciated. Separate Financial Statements - 2015 11

Assets held under a finance lease are depreciated over the estimated useful life equal to that of assets held. However, when there is not reasonable assurance that the property will be obtained at the end of the lease period, the assets are depreciated over the shortest term between their lease period and useful life. A property, plant and equipment entry will be derecognized at the time of its disposal or when it is not expected that future economic benefits will arise from the continued use of the asset. The gain or loss from retiring or derecognizing property, plant and equipment is calculated as the difference between gains from sales and the asset's carrying amount, and it is reported to the statement of income. Residual values, useful lives and depreciation methods for assets are reviewed and adjusted prospectively at the close of each fiscal year, if required. 14) Provisions Provisions are reported when the Company has a present legal or implicit obligation as a result of a past event, and it is probable that it will have to use resources to settle the obligation, and a reliable estimation of the obligation s value can be made. In cases where the Company expects to partially or totally reimburse the provision, the reimbursement is reported as a separate asset, only in those cases where such reimbursement is practically certain and the amount of the accounts receivable can be reliably measured. Management uses its best estimate to establish provisions for future expenses required to liquidate the present obligation, and they are discounted using a risk-free rate. The corresponding expense for provisions is presented on the statement of comprehensive income, net of any reimbursement. The increase in the provision due to the passing of time is reported as a financial expense on the statement of comprehensive income. The Company reports present obligations derived from an onerous contract as provisions. An onerous contract is one where the inevitable costs of complying with the obligations therein exceed the economic benefits expected to be received. Possible obligations that may arise from past events or the existence of which will be confirmed only by the occurrence or not of one or more uncertain events in the future that are not entirely under the control of the Company are not reported on the statement of financial position, but are disclosed as contingent liabilities. The financial statements have been prepared based on the Company s operations, and as at December 31, 2015, there were no material uncertainties related to events or conditions that could raise important doubts as to the capacity of Grupo Argos S.A. to continue operations. 15) Inventory Goods acquired with the intention of being sold in the ordinary course of business or being consumed when providing services are classified as inventory. The inventory is measured at acquisition cost. The Company reports a decrease in the value of inventories if the cost is greater than the net realizable value. The net realizable value is the estimated sale price under normal business conditions, less estimated finishing costs and estimated costs needed to complete the sale. The inventories include urban planning works and real estate for sale. Inventory for real estate properties is measured at acquisition cost and a decrease is reported if the cost is greater than the net realizable value. The net realizable value is the estimated sale price under normal business conditions, less estimated finishing costs and estimated costs needed to complete the sale. 16) Revenue Recognition Revenue is calculated at the fair value of the remuneration received or receivable. Revenue is reduced by discounts or rebates and other similar allocations estimated for customers. Separate Financial Statements - 2015 12