FAQ

FAQ

ADR

What is the OTC market?

This is a market which, by its initials, means ‘over the counter’. In this market, a network of stock brokers, or market creators, called “market makers” trade the shares that are not registered in the U. S. stock markets, such as the New York Stock Exchange – NYSE, Amex or Nasdaq. Information about operations performed and registered in the OTC market are published weekly in the “PINK SHEETS”.​

What would the relationship be between the ADRs and Grupo SURA’s ordinary shares?

The price of an ADR is the price of the shares in the local market, adjusted by the number of shares that constitute the ADR, and multiplied times the rate of exchange. This is why the prices for the shares in the local market and in the United States are very similar, because any distortion is arbitrated and corrected quickly ty investors who have access to both markets. In our case, an ADR represents 2 ordinary shares of the Company, identified with the ticker symbol GIVSY.​

What implications or risk would be involved in registering the ADRs?

Registering our ADRs involves additional risks that the company has considered and that involve political risk and foreign exchange risk. Political risk is associated with the changes in the price of the ADRs due to any political instability that might take place in Colombia. The foreign exchange risk has to do with the volatility of the rate of exchange between the Colombian peso and the US dollar. A devaluation of the rate of exchange in Colombia would lead to a lower dollar price for the ADR.​

Why register Grupo SURA Level I ADRs?

To access international capital markets. Promote liquidity and, therefore, a higher appreciation of the shares. Increase equity by expanding and diversifying the shareholder base. Obtain greater international recognition for the Company and diversify alternatives to obtain resources. Enter the North American market at a low cost. Make it easier for investors to acquire shares in the Company. Possibility of going to Levels I and II. Reduce legal uncertainty for foreign investors.​​

How are ADRs traded?

The ADRs can be traded in the North American Market the same way shares are traded in the local market, with the difference that the dividends are paid in dollars. To do this, a U.S. financial institution buys a group of our shares and arranges them in groups that are then re-issued in some local exchanges. To do this, we must provide the same detailed financial information that we provide for the Colombian Financial Superintendence (Superintendecia Financiera de Colombia) and the sponsor bank, also known as the Depository Bank, in this case the Bank of New York Mellon (BONY), which will also define the ratio between the number of ADRs and the original shares.​

Who is the depository of the ADRs?

​The depository, which in this case is the Bank of New York Mellon (BONY), in addition to being responsible for the shares of Grupo de Inversiones Suramericana as issuer in the United States, carries out all the procedures to meet the requirements of the SEC (Securities and Exchange Commission), do the promotion, and then register them in the U.S. market. In addition, it acts as liaison between the Company and the investors in the U.S. Market, i.e., receives the information about us which is then published in the North American market, pays the dividends that the companies wishes to distribute, gets in touch with the brokers to ensure the best deals for the securities, and keeps the owners of the ADRs informed about any event that might affect the price of the securities.​

What kinds of ADRs are there?

Level 3: Primary Public Offering. This modality allows companies to issue new shares US investors. They are listed in American Stock Exchanges. This level includes stricter rules, similar to those applicable to United States companies.

Having a Level 3 program means that the company is not only taking some of the shares to trade them in the United States, but it also puts out an issue to obtain capital. The company must publish a public offering prospectus. In addition, the company must publish a quarterly report of its results, and any information to investors must be disclosed to the SEC. Rule 144a: Primary Private Offering. Like Level 3, it refers to the issue of new shares by the company. However, the ADRs are not listed in American stock exchanges but rather are placed among institutional investors (Qualified Institutional Buyers - QIBs).

This program is similar to Level 3 with respect to the formalities that the issuer must comply with for the SEC. ADR’s issued under this program may only be sold to non-institutional investors two years after they are placed. Global Offering. – GDR: In this modality, the company places its shares in international markets, either publicly or privately. The program is usually structured as a Rule 144A in the United States and a public GDR offering outside the U.S., without restrictions.​

What is an ADR – American Depository Receipt?

An ADR is a negotiable security that represents shares from a company established outside the United States, in the American market.​

Dividends

Who is the issuer?

​It is the party responsible for the obligations contained in the security document.

What are the values of a share?

Nominal value: this is the amount of money represented by the title at a time of issue. Equity or intrinsic value: this is the result of dividing the company´s net equity by the number of shares outstanding. Market value: this is the value of each share in the public securities market.​

What is the general shareholders assembly?

​It is the meeting of a company´s shareholders, convened as required by the company´s bylaws. Its main tasks are to check the company´s management and financial results, elect the members of the board of directors, allocate profits, and distribute dividends.

What is a direct depositor?

It is the institution through which the shares were purchased, or whoever that institution appoints. At the time of purchase, the shareholder signs a mandate agreement with the direct depositor to represent him or her before Deceval, managing and keeping custody of the shares purchased. And as representative, to carry out all the activities involved, including being responsible for transferring the dividends ordered and paid to the shareholder.

What is Deceval?

​The centralized securities deposit of Colombia (Depósito Centralizado de Valores de Colombia - DECEVAL S.A.) is the institution that receives securities in deposit for administration and custody. It helps simplify and expedite operations for market agents, and reduce the costs and risks associated with the physical handling of the securities, using a high-technology, highly secure computerized system.​

How are dividends paid?

Dividends may be paid in cash or in shares. If they are paid in cash, for every share owned, you will receive a certain amount of money which will be determined by the General shareholders assembly. If dividends are distributed in shares, you will receive one share for every X number of shares owned. For example, you will receive one (1) share for every one hundred (100) shares owned).​

What are dividends?

This is the return on the investment that is awarded proportionately to the number of shares owned, paid with resources obtained from the company´s profits during a specific period. Dividends may be paid in cash or in shares. The decision to distribute dividends among the shareholders is made by the General assembly, which also defines the frequency and manner of payment of said dividends.​

Grupo SURA

What does Grupo SURA do?

Grupo SURA as a company, does not produce goods or services. It invests in shares of companies that do. It’s ¨product¨ is a sound investment portfolio represented by the shares of Grupo de Inversiones Suramericana, which are traded in the Colombian Stock Exchange (Bolsa de Valores de Colombia) under the stock symbol GRUPOSURA and offers dividends and returns to its shareholders.​

Where is Grupo SURA´s headquarters located?

The headquarters are located in Carrera 43 A # 5 A 113 Medellín, Colombia; investor relations phone number: 01 8000 521 555​

What are Grupo SURA´s lines of business?

Grupo SURA directly and through its affiliates, participates in several companies in sectors such as insurance, social security, financial, cement, food, and others.

When was Grupo de Inversiones Suramericana S.A. Establishedit ?

It was established in December 1997 as a result of splitting the company Suramericana de Seguros, to separate the insurance operations from the investment activities, and it became the parent company.​

Investor relations

What is an investment portfolio?

​It is a combination of financial assets owned by the same person, be an individual or legal entity, to achieve returns and profits due to the appreciation of the shares, and from the payment of dividends and interest, and not a benefit from the purchase and sale of the securities. A portfolio is diversified when the assets combine securities from different issuers, returns, ways to pay interest, and risks.​

Share

What is the trading price of a share?

The trading price is the price at which the security is purchased and sold. The initial trade price of a share at the beginning of a trading round is the base trading price.​

What is tradability?

A measure of the level of liquidity of a share in the stock market. How easy it is to trade the securities in the stock market.​

What are the indicators used for variable income investments?

Índice General de la Bolsa de Valores de Colombia IGBC (Colombian stock exchange general index): this reflects the variations in the price of the shares. This is defined as the stock indicator for the ordinary market of Bolsa de Valores de Colombia. This is the most representative and responsive tool to evaluate the stock market´s evolution and trends. The stock tradability Index (Índice de bursatilidad accionaria IBA): measures the tradability or liquidity of a share and is determined by the trading frequency and the average volumes traded. Medium, low, or minimum tradability. Dividend Yield: this shows the return on the investment with respect to the price of the share in the market.​

What factors should be considered when making an investment?

When making an investment, keep in mind the following: the risk, which is the probability of having a result different from what is expected. Return: this is the revenue provided by an investment through its various modalities: interest, dividends, etc., depending on the type of investment. Liquidity: how easy it is to dispose of the resources invested. Term: The time needed to be able to use the money invested.​

Who are Grupo SURA´s major shareholders?

As of March 31, 2017, the major shareholders are: Grupo Argos and affiliates, 27.4%; pension funds 25.1%; international funds 21.8%; Grupo Nutresa 10.3%; institutional investors11.1%; individual investors 4.3%

Who is Grupo SURA´s independent audit firm?

The independent audit firm is Ernst & Young Audit S.A.S.

What is the average daily volume of Grupo Sura´s shares traded?

The average daily volume traded during 2016 was approximately $8,808 million pesos in common shares, and $5,410 million pesos in preferred shares through Bolsa de Valores de Colombia.​

How are Grupo SURA shares identified in the stock exchange? (stock symbol)

Grupo SURA´s common share is traded in Bolsa de Valores de Colombia under the stock symbol GRUPOSURA; and preferential shares are traded as PFGRUPSURA.

How many outstanding Grupo SURA shares are there?

We currently have 581,977,548 shares outstanding.

How can I purchase Grupo SURA shares?

​Shares can be purchased or sold through a stockbroker and are traded in the Colombian Stock exchange (Bolsa de Valores de Colombia).​

What is the deposit certificate?

The deposit certificate is a nonnegotiable, informational document which certifies delivery to the underwriters of the securities registered in the account. The deposit certificate includes, among other things, the account, which is the number assigned by Deceval to identify investors with the Depository, the species (type) which is a description to identify the security, and the balance, which is the number of shares purchased. The certificate of deposit is not transferable and does not represent the security deposited.​

What rights does a share confer?

A share confers political and economic rights. Economic rights refer to the participation in the company’s profits (dividends), the benefits calculated as the difference between the purchase and the sales price (appreciation), and the right to buy new shares issued by the company (underwriting rights). Political Rights refer to the fact that the shareholder can participate and vote in the general shareholders assembly and review the company’s books within the time limits established for that purpose.​

What is a share?

It is a variable income title that allows anyone to own a part of the company that issues the security, making him or her a shareholder, with political and economic rights. Investors must consider investments in shares as medium and long-term investment, but they may sell the share at any time, taking into account the market liquidity.​

What is a share’s intrinsic value?

It is also called equity or book value. It is obtained by dividing the total equity by the number of outstanding shares.​

What is the return of an investment in shares subject to?

The return on the shares is subject to the appreciation of the share in the market (the difference between the purchase and the sale price) and the dividend distributed by the company each year.​

What are the tax benefits for investors?

Usually, dividends received are exempt from income taxes because that tax has already been paid by the issuing entity. Each issuer notifies its shareholders, at the time the dividend is approved, the non-taxed percentage of the dividend. In addition, profits obtained from the purchase and sale of shares defined as having high- and medium tradability, are not considered revenue or windfall profits for the beneficiaries.​

What is a centralized securities depository?

It is a specialized institution that receives in deposit dematerialized securities for their custody, administration, settlement, and payment, using the accounting record system called a book entry.

What is a dematerialized share?

It is a share that is not physically represented by a paper title but rather by a certificate issued by the institution that provides the services of administration and custody of the dematerialized share. In Colombia, the institution that provides this service is Depósito Centralizado de Valores - Deceval S.A.; through this system, the risk involved in handling physical titles for the holders is eliminated and, at the same time, transactions in the secondary market are expedited and collecting dividends is made easier.