Colombian Commercial Code - Decree 410 of 1971 - Book II - Of Corporations - Part I - Partnership Agreement - Chapter VIII - Auditor - From Article 203 to Article 217

COLOMBIAN COMMERCIAL CODE

CHAPTER VIII

Auditor

Article 203 .- Auditor must have:

1. Stock companies;

2. Branches of foreign companies, and

3. The companies in which, by law or by statute, the administration does not relate to all partners, where provided any number of excluded members of the administration representing at least twenty percent of the capital.

Article 204 .- The choice of auditor to be by absolute majority of the assembly or board members.

In limited by shares, the auditor shall be elected by a majority vote of the limited partners.

The branches of foreign companies shall designate the competent body in accordance with the statutes.

Article 205 .- There may be statutory auditors:

1. Those who are associated with the same company or any of its affiliates, or those who are associates or employees of the parent company;

2. Those linked by marriage or kinship within the fourth degree, first or second civil degree of affinity or are associates of the directors and executive officers, the clerk auditor or accountant of the same company, and

3. Those who play in the same company or its subsidiaries other charges.

Whoever is elected as auditor, may not play in the same company or its subsidiaries any other office during the respective period.

Article 206 .- In societies where the board work period shall be the auditor of that, but in any case be removed at any time, with the vote of half plus one of the shares present at the meeting.

Article 207 .- The functions of the auditor:

1. Ensure that transactions entered into or performing on behalf of society conform to the requirements of the statutes, decisions of the general assembly and board;

2. Give appropriate consideration, in writing, to the assembly or board of trustees, the board or manager, as the case of irregularities occurring in the functioning of society and the development of their business;

3. Collaborate with government agencies engaged in inspection and surveillance companies, and submit reports that may be required or as requested;

4. Ensure that regularly carry the company's accounts and minutes of meetings of the assembly, board members and board, and duly preserved because society correspondence and records of accounts, giving instructions for such purposes;

5. Regularly inspect the goods of society and try to take timely measures for the conservation or safety of themselves and she has custody of any other title;

6. Provide instructions, practice inspections and request the necessary reports to establish permanent control over social values;

7. Authorize signing any balance is made with an opinion or report;

8. Convene the meeting or the board of partners for extraordinary meetings when deemed necessary, and

9. Fulfill any other duties specified by legislation or statute and those that remain compatible with earlier entrusted to it by the assembly or board members.

Paragraph .- In societies that is purely discretionary charge of the auditor, it shall perform the functions expressly indicate the bylaws or the board of trustees, the vote required for the creation of the office, in the absence of express provision of the statutes and specific instructions from the shareholders' meeting or general assembly, shall exercise the functions mentioned in this article. However, if there is a CPA, you can not authorize his firm's financial position, or opinion on them.

Article 208 .- The opinion or report of the auditor on the balance sheets shall state, at least:

1. If you have obtained the necessary information to perform their functions;

2. If in the course of the review have been followed procedures recommended by the technical auditing of accounts;

3. If in his opinion the accounts are kept according to legal rules and accounting techniques, and whether the transactions comply with the statutes and decisions of the assembly or board of directors, if any;

4. If the balance sheet and profit and loss statement have been taken faithfully from the book, and if in his opinion the first presents fairly, in accordance with generally accepted accounting standards, the respective financial position at the end of the period reviewed, and the second reflects the results of its operations in that period, and

5. Reservations or qualifications you may have about the faithfulness of the financial statements.

Article 209 .- Auditor's report to the assembly or meeting of shareholders shall state:

1. If the acts of the directors of the company comply with the statutes and the orders or instructions of the assembly or meeting of shareholders;

2. If the correspondence, accounting vouchers and books of registry certificates of shares, if any, are carried and stored properly and

3. If and adequate internal control measures, conservation and custody of the assets of the Company or third parties that are held by the company.

Article 210 .- When circumstances dictate, according to the assembly or the board of trustees, the reviewer may have assistants or other employees freely appointed and removed by him, who will work under the direction and responsibility, the compensation fixed by the assembly or board partners, without prejudice to the reviewers have ancillary staff or hired and paid by them freely.

The auditor will only be under the jurisdiction of the assembly or board members.

Article 211 .- The auditor liable for damages caused to the company, its partners or third parties for negligence or misconduct in the performance of their duties.

Article 212 .- The auditor who knowingly authorized balances with serious inaccuracies, or surrender to the assembly or the board of partners such inaccuracies reports shall incur the penalties provided in the Penal Code for falsification in private documents, plus the temporary injunction or short to hold the office of auditor.

Article 213 .- The auditor is entitled to intervene in the proceedings of the assembly or the board of trustees, and the governing boards or boards of directors, without the right to vote, when summoned to them. Also entitled to inspect at any time the account books, minute books, correspondence, records of accounts and other papers of the society.

Article 214 .- The auditor shall keep complete secrecy about the events or facts known to you in his tenure and will only communicate or report in the manner and cases expressly provided by law.

Article 215 .- The auditor must be a public accountant. No person shall be appointed as a reviewer for more than five corporations.

However, when associations are designated as accounting firms or statutory auditors, they shall appoint a public accountant for each Statutory who operates the office personally, in terms of (Article 12 of Act 145 of 1960) *. In the absence of the appointed act alternates.

* Article 4. Law 43 of 1990.

Article 216 .- The auditor does not fulfill the duties prescribed by law, or that meets irregularly or negligent, or missing the reserve prescribed in Article 214 shall be punished with fine up to twenty thousand pesos, or suspension from office from one month to one year according to the seriousness of the offense or omission. In case of recidivism will double previous sanctions may be imposed permanent injunction or permanent holding office of auditor, according to the seriousness of the offense.

Article 217 .- The penalties provided in the preceding article shall be imposed by the Superintendency of Corporations, even if companies are not subject to surveillance, or by the Banking Superintendency for companies controlled by it.

These sanctions will be imposed ex officio or upon complaint of any person.