I have audited the separate financial statements
of Grupo Aval Acciones y Valores S.A. (the Company), which comprise the special-purpose separate statement of financial position as of
November 30, 2021 and the special-purpose separate statements of income, other comprehensive income, changes in equity and cash flows
for the eleven-month period then ended and their respective notes that include the summary of significant accounting policies and other
explanatory notes.
In my opinion, the above mentioned
separate financial statements, prepared in accordance with information taken faithfully from Accounting Ledgers and attached to this report,
present fairly, in all material aspects, the separate financial position of the Company as of November 30, 2021, the separate results
of its operations, and its separate cash flows for the eleven-month period then ended, in conformity with Accounting and Financial Reporting
Standards accepted in Colombia for the preparation of special-purpose financial statements.
I conducted my audit in accordance with International Standards
on Auditing (ISAs) accepted in Colombia. My responsibilities under those standards are further described in the “Statutory Auditor’s
Responsibilities for the Audit of the Separate Financial Statements” section of my report. I am independent from the Company in
accordance with the Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for Accountants (IESBA
Code), included in the Information Assurance Standards accepted in Colombia together with the ethical requirements established in Colombia
that are relevant to my audit of the separate financial statements. I also have fulfilled my other ethical responsibilities in accordance
with these requirements and the IESBA Code. I consider that the audit evidence I have obtained is sufficient and appropriate to provide
a basis for my opinion.
I draw attention to Note
2.1 to the financial statements, which describes the Basis of Accounting. The financial statements attached to this report have been prepared
to assist the Company in the spin-off process it is currently pursuing on its subsidiary BAC Holding International CORP before the Financial
Superintendence of Colombia. As a result of the foregoing, these financial statements may not be adequate for other purposes. My opinion
is not modified in relation to this matter.
I have determined that there
are no Key Audit Matters that should be reported in my report.
The special-purpose separate statements
of income, other comprehensive income, changes in equity and cash flows for the eleven-month period ended on November 30, 2020, are presented
exclusively for comparison purposes, and were not audited by me, as it was not required.
Responsibilities of Management and Those
Charged with Governance regarding the separate financial statements
Management is responsible
for the preparation of these separate financial statements in accordance with Accounting and Financial Reporting Standards accepted in
Colombia for the preparation of special-purpose financial statements. This responsibility includes designing, implementing, and maintaining
the internal control that Management considers necessary for the preparation of separate financial statements that are free from material
misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that
are reasonable in the circumstances.
In preparing the separate financial statements, Management
is responsible for assessing the Company’s ability to continue as a going concern; for disclosing, as applicable, matters related
to going concern; and for using the going concern accounting basis unless Management either intends to liquidate the Company or to cease
operations or has no realistic alternative but to do so.
Those Charged with Governance
are responsible for overseeing the Company’s financial reporting process.
Statutory Auditor’s responsibilities
for the audit of the separate financial statements
My objectives are to obtain reasonable
assurance about whether the separate financial statements, considered as a whole, are free from material misstatement, whether due to
fraud or error, and to issue an Audit Report that includes my opinion. Reasonable assurance is a high level of assurance but is not a
guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence
the users’ economic decisions made on the basis of these separate financial statements.
As part of an audit conducted in accordance
with ISAs, I exercise professional judgment and maintain professional skepticism throughout the audit. I also:
I communicate to Those Charged
with the Company’s Governance regarding, among other matters, the planned scope and timing for the audit, as well as the significant
audit findings, including any significant deficiencies in internal control that I identify during my audit.
I also provide Those Charged
with Governance with confirmation that I have complied with the relevant ethical independence requirements and that I have disclosed to
them all relationships and other matters that may reasonably be considered to bear on my independence, and where applicable, related safeguards.
From the matters communicated
with Those Charged with Governance, I determine the matters that were of most significance in the audit of the current period's separate
financial statements and, therefore, are the Key Audit Matters. I describe these matters in my Auditor's Report unless law or regulation
prevents public disclosure about the matter or when, in extremely exceptional circumstances, I determine that a matter should not be disclosed
in my report because the adverse consequences of doing so would reasonably outweigh the benefits to the public interest of such communication.
Based on the result of my
tests, in my opinion during the period from January 1 to November 30, 2021, the information contained in the self-assessment statements
of contributions to the Comprehensive Social Security System –in particular information on affiliates and their salary base for
determining contributions, has been taken from the accounting records and supports. The Company is not in arrears for contributions to
the Comprehensive Social Security System.
EXHIBIT
1
SOCIEDAD
BENEFICIARIA AVAL SAS
Statement
of financial position
(Stated
in Colombian pesos)
|
|
|
As
of November 30, 2021
|
|
Assets
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
Cash
and cash equivalents
|
Ps.
|
1
|
|
Total
current assets
|
Ps.
|
1
|
|
|
|
|
|
Liabilities
|
|
-
|
|
Total
liabilities
|
|
-
|
|
|
|
|
|
Shareholders' equity
|
|
|
|
Subscribed and paid capital
|
|
1
|
|
Net income
|
|
-
|
|
Total
shareholders' equity
|
|
1
|
|
|
|
|
|
Total
liabilities and shareholders' equity
|
Ps.
|
1
|
|
|
|
|
|
|
|
|
SOCIEDAD
BENEFICIARIA AVAL SAS
Statement
of income
(Stated in Colombian pesos)
|
|
|
As
of November 30, 2021
|
|
|
|
|
|
Operating revenue
|
Ps.
|
-
|
|
Total operating revenue
|
|
-
|
|
|
|
|
|
Expenses, net
|
|
|
|
Administrative
expenses
Other expenses
Operating income
Financial
expenses
|
|
-
-
-
-
|
|
|
|
|
|
Earnings before taxes
|
|
-
|
|
|
|
|
|
Income
tax expense
|
|
-
|
|
|
|
|
|
Net Income
|
Ps.
|
-
|
|
|
|
|
|
Other
comprehensive income (OCI), net of taxes
|
|
-
|
|
|
|
|
|
Comprehensive income
|
Ps.
|
-
|
|
|
|
|
|
Comprehensive income, net
|
|
-
|
|
|
|
|
|
Net Earnings per Share
|
Ps.
|
0.00
|
SOCIEDAD
BENEFICIARIA AVAL SAS
Statement
of shareholders' equity
(Stated in Colombian pesos)
|
|
|
Subscribed
and paid capital
|
|
Net Income
|
|
Shareholders' equity
|
|
|
|
|
|
|
|
|
|
Balance as of the beginning of November 22nd, 2021
|
$
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
Subscribed and paid
capital Shareholders'
|
|
1
|
|
-
|
|
1
|
|
|
|
|
|
|
|
|
|
Balance as of November 30th, 2021
|
$
|
1
|
|
-
|
|
1
|
SOCIEDAD
BENEFICIARIA AVAL SAS
Statement
of cash flow
(Stated
in Colombian pesos)
|
|
|
As
of November 30, 2021
|
|
|
|
|
|
Cash flow from operating activity:
|
|
|
|
Net Income
|
Ps.
|
-
|
|
|
|
|
|
Net cash used in operating activities
|
|
-
|
|
|
|
|
|
Cash flow from investing activities:
|
|
|
|
Net cash used in investing activities
|
|
-
|
|
|
|
|
|
Cash
flow from financing activities:
Beginning
capital
|
|
1
|
|
Net cash from financing activities
|
|
1
|
|
Change in cash and cash equivalents
|
|
1
|
|
Cash and cash equivalents as of the beginning
of the period
|
|
-
|
|
Cash and cash equivalents as of the end of
the period
|
Ps.
|
1
|
Matilde
del Pilar Martínez Torrado
Certified
Public Accountant
Universidad
Central
Independent
auditor’s report
To
the Shareholder of SOCIEDAD BENEFICIARIA AVAL S.A.S.
Opinion
I
have audited the initial financial statements of SOCIEDAD BENEFICIARIA AVAL S.A.S. which include the statement of financial position
as of November 22nd 2021, the statement of other comprehensive income, the statement of Shareholders’ equity and the statement
of cash flow to that date, as well as the explanatory notes of the financial statements which include a summary of significant accounting
policies.
In
my opinion, the accompanying financial statements present fairly, in all material aspects, the financial position of SOCIEDAD BENEFICIARIA
AVAL S.A.S. as of November 22nd 2021, as well as its results and the corresponding cash flow to that date, in accordance to the Generally
Accepted Accounting Standards in Colombia.
Basis
of opinion
I
conducted my audit in accordance with International Standards on Auditing (ISAs) accepted in Colombia. My responsibilities under those
standards are further described in the “Statutory Auditor’ Responsibilities for the Audit of the Consolidated Financial Statements”
section of my report.
I
am independent of the Group in accordance with the Accountant’s Professional Code of Ethics issued by the International Ethics
Standards Board for Accountants (IESBA Code), included in the Information Assurance Standards accepted in Colombia, and I have fulfilled
my other ethical responsibilities in accordance with these requirements and the IESBA Code mentioned.
I
believe that the audit evidence I have obtained is enough and appropriate to provide a basis for my opinion.
Responsibilities
of Management and those in charge with the Company for the financial statements
Management
is responsible for the fair preparation and presentation of these financial statements in accordance with Accounting and Financial Reporting
Standards accepted in Colombia, and the internal control that management considers necessary for the preparation of these financial statements
that are free from material misstatement, whether due to fraud o error.
Calle 138 No 11 B 61 Apt 808 Bogotá
Phone 3003237490
Matilde del Pilar Martínez Torrado
Certified Public Accountant
Universidad Central
In
preparing the financial statements, management is responsible for assessing the Company’s ability to continue operating, disclosing,
as applicable, matters related to the continuity of the Company and using accounting basis of an operating company, unless management
either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those
in charge with company governance are responsible for overseeing the Company financial reporting process.
Independent
Auditor’s responsibilities for the audit of the financial statements
My
objectives are to obtain reasonable assurance about whether the financial statements, considered as a whole, are free from material
misstatement, whether due to fraud or error, and to issue an audit report that include my opinion. Reasonable assurance is a high
level of assurance but is not a guarantee that an audit conducted in accordance with ISAs accepted in Colombia, I will always detect
a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or
in aggregate, they could reasonably be expected to influence the users’ economic decisions taken based on these consolidated
financial statements.
As
part of an audit conducted in accordance with ISAs, I exercise professional judgment and maintain professional skepticism throughout
the audit.
Identify
and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence that is enough and appropriate to provide a basis for my opinion.
The
risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain
an understanding of internal control relevant for the audit in order to design audit procedures that are appropriate in the circumstances.
and not for the purpose of expressing an opinion on the effectiveness of the entity's internal control.
Conclude
on the appropriateness use of the going concern hypothesis by management and, based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going
concern. If I would conclude that a material uncertainty exists, I am required to draw attention in my statutory auditor’s report
to the related disclosure in the consolidated financial statements or, if such disclosure is inadequate, to modify my opinion.
Calle 138 No 11 B 61 Apt 808 Bogotá
Phone 3003237490
Matilde del Pilar Martínez Torrado
Certified Public Accountant
Universidad Central
My
conclusions are based on the audit evidence obtained up to the date of my report. However, future events or conditions may cause the
Company ceases to continue as a going concern.
Evaluate
the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements
represent the underlying transactions and events in a manner that achieves fair presentation.
Another
responsibility is to communicate with those responsible for the company's Governance relating the scope and timing of the planned audit,
the significant findings, as well as any significant internal control deficiencies identified during the audit.
In
addition, provide those charged with governance of the company with a statement that I have complied with the applicable ethical requirements
relating to independence, and to communicate with them about all relationships and other matters that may affect my independence and,
when appropriate, the corresponding safeguards.
Due to the fact that the company is still in its initial
day, I have not issued any communication to the company´s officers on matters related to the audit of the financial statements.
/s/ Matilde del Pilar Martínez Torrado
Matilde
del Pilar Martínez Torrado
Certified Public Accountant TP-37.049-T
Bogotá, Colombia
November
30, 2021
Calle 138 No 11 B 61 Apt 808 Bogotá
Phone 3003237490
EXHIBIT 2
GRUPO AVAL ACCIONES Y VALORES S.A.
PROFORMA FINANCIAL INFORMATION
SEPARATE PROFORMA FINANCIAL STATEMENTS
AS OF NOVEMBER 30, 2021
(Stated in millions of Colombian pesos)
|
|
|
Reported balances
|
|
Transaction effect (1)
|
|
Proforma balances
|
|
Assets
|
|
|
|
|
|
|
|
Current assets
|
Ps.
|
550,504
|
Ps.
|
-
|
Ps.
|
550,504
|
|
Total current assets
|
Ps.
|
550,504
|
|
-
|
|
550,504
|
|
Non-current Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in subsidiaries and associates
|
|
24,928,600
|
|
(6,977,416)
|
|
17,951,184
|
|
Property and equipment
|
|
5,606
|
|
-
|
|
5,606
|
|
Deferred tax assets
|
|
128
|
|
-
|
|
128
|
|
Total non-current Assets
|
|
24,934,334
|
|
(6,977,416)
|
|
17,956,918
|
|
Total assets
|
Ps.
|
25,484,838
|
Ps.
|
(6,977,416)
|
Ps.
|
18,507,422
|
|
|
|
|
|
|
|
|
|
Liabilities and shareholders’ equity
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
Accounts payable
|
|
504,197
|
|
-
|
|
504,197
|
|
Other non-financial liabilities
|
|
40,503
|
|
-
|
|
40,503
|
|
Total current liabilities
|
|
544,700
|
|
-
|
|
544,700
|
|
|
|
|
|
|
|
|
|
Long-term liabilities
|
|
|
|
|
|
|
|
Borrowings at amortized cost, non current
|
|
525,773
|
|
-
|
|
525,773
|
|
Outstanding bonds, non current
|
|
1,124,520
|
|
-
|
|
1,124,520
|
|
Total long-term liabilities
|
|
1,650,293
|
|
-
|
|
1,650,293
|
|
Total liabilities
|
|
2,194,993
|
Ps.
|
-
|
Ps.
|
2,194,993
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity
|
|
|
|
|
|
|
|
Subscribed and paid capital
|
|
22,281
|
|
-
|
|
22,281
|
|
Additional Paid-in capital
|
|
8,612,936
|
|
-
|
|
8,612,936
|
|
Retained earnings
|
|
10,357,987
|
|
(7,331,951)
|
|
3,026,036
|
|
Net income
|
|
3,131,688
|
|
1,354,379
|
|
4,486,067
|
|
Other comprehensive income
|
|
1,164,953
|
|
(999,844)
|
|
165,109
|
|
Total shareholders' equity
|
Ps.
|
23,289,845
|
Ps.
|
(6,977,416)
|
Ps.
|
16,312,429
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders’ equity
|
Ps.
|
25,484,838
|
Ps.
|
(6,977,416)
|
Ps.
|
18,507,422
|
(1) See notes 1 and 3
The attached notes are an integral part of the
proforma financial information.
GRUPO AVAL ACCIONES Y VALORES S.A.
PROFORMA FINANCIAL INFORMATION
SEPARATE PROFORMA FINANCIAL STATEMENTS
FOR THE ELEVEN MONTH PERIODED ENDED NOVEMBER
30, 2021
(Stated in millions of Colombian pesos)
|
|
|
Reported balances
|
|
Transaction effect (1)
|
|
Proforma balances
|
|
Operating revenue
|
|
|
|
|
|
|
|
Equity method income, net
|
Ps.
|
3,080,671
|
|
603,083
|
|
3,683,754
|
|
Other revenue from ordinary activities
|
|
262,920
|
|
-
|
|
262,920
|
|
Total operating revenue
|
|
3,343,591
|
|
603,083
|
|
3,946,674
|
|
|
|
|
|
|
|
|
|
Expenses, net
|
|
|
|
|
|
|
|
Administrative expenses
|
|
(74,082)
|
|
-
|
|
(74,082)
|
|
Other expenses
|
|
(163)
|
|
-
|
|
(163)
|
|
Losses from exchange differences
|
|
(50)
|
|
-
|
|
(50)
|
|
Operating income
|
|
3,269,296
|
|
603,083
|
|
3,872,379
|
|
|
|
|
|
|
|
|
|
Financial expenses
|
|
(88,451)
|
|
-
|
|
(88,451)
|
|
|
|
|
|
|
|
|
|
Earnings before taxes
|
Ps.
|
3,180,845
|
|
603,083
|
|
3,783,928
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
(49,157)
|
|
-
|
|
(49,157)
|
|
|
|
|
|
|
|
|
|
Net Income
|
Ps.
|
3,131,688
|
|
603,083
|
|
3,734,771
|
|
Net income from discontinued operations
|
|
-
|
|
751,295
|
|
751,295
|
|
Net Earnings per Share
|
Ps.
|
3,131,688
|
|
1,354,379
|
|
4,486,067
|
(1) See note 1 and 3
The attached notes are an integral part of the
proforma financial information.
GRUPO AVAL ACCIONES Y VALORES S.A.
PROFORMA FINANCIAL INFORMATION
SEPARATE PROFORMA FINANCIAL STATEMENTS
AS OF NOVEMBER 30, 2021
(Stated in millions of Colombian pesos)
NOTE
1. TRANSACTIONS’ DESCRIPTION
The separate proforma financial information of
Grupo Aval (hereinafter "the Group") has been prepared to provide the effect of the following transaction:
|
|
(i)
|
Spin-off of BAC Holding International Corp “BAC Holding” (formerly Leasing Bogotá Panamá)
at the Grupo Aval level: Grupo Aval will carry out the spin-off of the direct participation of approximately 51.5% in BAC Holding in favor
of Grupo Aval’s shareholders, resulting from the spin-off of the 75% of Banco de Bogotá's stake in BAC Holding as described
below:
|
Banco de Bogotá will carry out
a spin-off through which it will transfer the ownership of fifty-eight million eighty-two thousand three hundred twenty-six (58,082,326)
shares issued by BAC Holding International Corp. owned by Banco de Bogotá, representing 75.00000032281765% of the total capital
of BAC Holding International Corp. (the "Business Unit") to the shareholders of Banco de Bogotá..
NOTE 2. PREPARATION BASIS
The separate proforma financial information was
based on and should be read in conjunction with:
|
|
·
|
Condensed
interim separate financial statements of Grupo Aval as of November 30, 2021 and its attached notes.
|
|
|
·
|
Separate
and consolidated proforma financial information of Banco de Bogotá.
|
|
|
·
|
The
separate proforma financial information represents the financial information reported in the financial statements as of November 30,
2021, adjusted with the accounting effects of the transactions described in Note 1, which are presented as if they had occurred on November
30, 2021 for illustrative purposes only. The accounting effects of such transactions were determined based on accounting criteria developed
in accordance with the Accounting and Financial Reporting Standards accepted in Colombia and, where not provided for therein, considering
the requirements of IAS 8 - Accounting Policies, Changes in Accounting Estimates and Errors.
|
Given the special purpose of the proforma financial
information, it should not be understood as general purpose financial statements prepared under Accounting and Financial Reporting Standards
accepted in Colombia.
The historical separate financial statements have
been adjusted to allow the following proforma events:
|
|
·
|
Those
that are directly attributable to the transactions described;
|
|
|
·
|
Those
that can be supported by facts; and
|
|
|
·
|
Those
related to separate proforma financial information that are expected to have a continuing impact on separate results.
|
The proforma financial information does not necessarily
indicate the performance or financial situation that Grupo Aval would have had if the transactions described had been completed as of
November 30, 2021, nor is it intended to project Grupo Aval's financial situation or results in the future.
The following is a summary of the main accounting
criteria applied to the transaction that have the most relevant impact on the proforma financial information:
|
|
1.
|
Spin-off between entities under common control:
|
The spin-off of the 75% stake in BAC
Holding does not generate a profit or loss in the financial statements of Grupo Aval, since it is carried out at book value, as it is
a transaction between entities under common control. As a result of the spin-off, 100% of the investment in the subsidiary is derecognized
and an investment as an associate is recognized for the remaining 25% stake in BAC Holding.
|
|
2.
|
Loss of control in subsidiaries:
|
Loss of control in subsidiaries is
recognized in accordance with the criteria established in IFRS 10 Consolidated Financial Statements; as follows:
a) The investment
in a subsidiary is derecognized.
b) The retained interest is measured
at fair value and the difference with respect to its carrying value is recognized in the statement of income for the period in which the
loss of control occurs.
c) The amounts accumulated in Other
Comprehensive Income related to such investments are realized in earnings for the period as net gain on deconsolidation or in retained
earnings, as appropriate, in accordance with the requirements of the standards that gave rise to them, on the same basis as would have
been required if the related assets or liabilities had been disposed of.
d) Income and expenses that do not
continue as discontinued operations are reclassified to profit or loss for the period.
e) The retained interest is classified
in the appropriate category, which, by maintaining significant influence, is presented as an investment in an associate. Subsequently,
the investment in associate is recognized by the equity method.
|
|
3.
|
Relevant judgments and estimates:
|
In the preparation of the separate proforma
financial information, the judgments made in the application of the accounting policies and in the sources and key assumptions of the
estimates with a significant effect on the proforma financial information are as follows: Measurement at fair value of the remaining 25%
investment in BAC Holding.
NOTE
3. PROFORMA ADJUSTMENTS
The separate proforma financial information reflects
the essential adjustments to give effect to the transactions described in Note 1, which mainly includes the following:
1. Presentation as a discontinued operations of
68.74% of the income generated by BAC Holding from the participation in the results of the eleven month period ended November 30, of 2021,
which are included in the results of Banco de Bogotá.
2. Presentation in the results of continued operations
of the 68.74% participation over the remaining 25% of BAC Holding in the results of the eleven month period ended November 30, of 2021.
3. Full derecognition of the investment in BAC
Holding at its book value and transfer to investment in associate of the book value attributable to the remaining interest of 25%, with
its corresponding net effect on equity, when reducing the 100% interest in the investment in BAC Holding to 25%.
4. Remeasurement effects of the remaining investments
in BAC Holding, classified as investments in associates, as detailed below:
|
|
a)
|
Loss of control of BAC Holding (LBP) (in process):
|
Recognition of the remaining 25% investment
in BAC Holding at fair value. For purposes of the preparation of the proforma financial information, the book value of the remaining 25%
in BAC Holding was considered, taking in consideration that the valuation study of BAC Holding is in the process of being prepared by
external specialists.
|
|
5.
|
Reclassification of the amounts accumulated in Other Comprehensive Income, in accordance with the requirements
of the standards that gave rise to them. These items include mainly the realization of the cumulative effects of hedging strategies for
accounting hedges of net investment abroad, both the balances of the hedged items and the balances of the hedging instruments, adjustments
for conversion of financial statements of foreign subsidiaries of BAC Holding, valuation and adjustments for impairment of debt instruments
and their corresponding tax effects.
|
EXHIBIT 2
SOCIEDAD BENEFICIARIA AVAL SAS
Statement of financial position (Proforma)
(Stated in millions of Colombian pesos)
|
|
|
|
As of November 30, 2021
|
|
Assets
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Investments in subsidiaries
|
|
Ps.
|
7,078,150
|
|
|
Total assets
|
|
Ps.
|
7,078,150
|
|
|
|
|
|
|
|
Liabilities
|
|
Ps.
|
-
|
|
|
Total liabilities
|
|
|
-
|
|
|
|
|
|
|
|
|
Shareholders' equity
|
|
|
|
|
|
|
Subscribed and paid capital
|
|
|
22,281
|
|
|
|
Additional Paid-in capital
|
|
|
7,055,869
|
|
|
Total shareholders' equity
|
|
|
7,078,150
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders' equity
|
|
Ps.
|
7,078,150
|
Annex 3
Grupo Aval Acciones y Valores S.A.’s shareholders with a shareholding
of more than 1% November 30, 2021 are:
|
GRUPO AVAL ACCIONES Y VALORES S.A.
|
|
Shareholder
|
Number of Shares
|
Ownership
|
|
Adminegocios S.A.S.
|
6,124,549,634
|
27.49%
|
|
Actiunidos S.A.
|
3,716,373,854
|
16.68%
|
|
El Zuque S.A.
|
1,519,206,452
|
6.82%
|
|
Inversiones Escorial S.A.
|
1,270,118,990
|
5.70%
|
|
Socineg S.A.
|
1,216,398,085
|
5.46%
|
|
Aminversiones S.A.
|
1,129,207,612
|
5.07%
|
|
Intrassets Trading S.A.
|
986,514,816
|
4.43%
|
|
Rendifin S.A.
|
800,858,578
|
3.59%
|
|
Inversegovia S.A.
|
403,605,252
|
1.81%
|
|
Jara Albarracin Manuel Guillermo
|
320,278,052
|
1.44%
|
|
Fondo Pensiones Obligator. Porvenir Mayor Riesgo
|
319,901,509
|
1.44%
|
|
Inverprogreso S.A.
|
312,015,211
|
1.40%
|
|
Bienes y Comercio S.A.
|
278,007,490
|
1.25%
|
|
JPMorgan Chase Bank NA FBO Holders of DR (Aval ADR)
|
271,939,060
|
1.22%
|
|
Fondo Bursatil Ishares Colcap
|
269,512,606
|
1.21%
|
|
Fondo de Pensiones Obligatorias Porvenir Moderado
|
261,036,648
|
1.17%
|
|
Otros Accionistas
|
3,081,493,310
|
13.83%
|
|
TOTAL
|
22,281,017,159
|
100.00%
|
Annex 3
Sociedad Beneficiaria Aval’s shareholders as of November 30,
2021 Are:
|
SOCIEDAD BENEFICIARIA AVAL
|
|
Shareholder
|
Number of Shares
|
Ownership
|
|
Grupo Aval Acciones y Valores S.A.
|
1
|
100.00%
|
|
TOTAL
|
1
|
100.00%
|
METRIX FINANZAS
INDEPENDENT VALUATION REPORT
Terms of Exchange of the BAC Holding International
Corp. (formerly LBP) Spin-Off in favor of Sociedad Beneficiaria Aval S.A.S.
13/01/2022
Metrix Finanzas (Mejoracinco S.A.S.) has relied
on information provided by Grupo Aval, its subsidiaries and information obtained from publicly available sources. Metrix Finanzas did
not proceed to independently audit the information received and, consequently, does not guarantee (express or implied) as to the truthfulness,
accuracy or completeness of the information and opinions contained herein, or any other written or oral information provided to any interested
party or its advisors.
Metrix Finanzas assumes no responsibility or liability
for any loss incurred as a result of the use of the information in this study and assumes no liability for any loss or damage that may
be caused by acts or omissions presented in this document.
It should be taken into consideration that in any
valuation exercise, both objective and subjective factors are used, which means that the value obtained is only a reference point.
It should also be noted that the value of the company
may vary over time, as may the valuation parameters used. The above may be caused by changes in the macroeconomic environment, in the
expectations of the evolution of the business, its risks or other factors.
|
|
2.
|
Description of the Transaction
|
Background
+ Banco de Bogotá ("BdB") is 100%
owner of BAC Holding International Corp ("BHI"),
+ Subject to the required approvals, BdB intends
to spin off 75% of its interest in BHI in favor of Sociedad Beneficiaria Bogotá S.A.S.
+ In consideration of the spin-off, as a result
of receiving the spun-off asset (75% of BHI), Sociedad Beneficiaria Bogotá S.A.S. will issue 331,280,555 shares in favor of BdB
shareholders. This number of shares is identical to the number of outstanding shares of BdB.
+ As a result of the foregoing, for each share
that BdB's shareholders hold in that entity, they will receive an equal number of shares in Sociedad Beneficiaria Bogotá S.A.S.
+ Metrix Finanzas performed an independent valuation
of BdB and Sociedad Beneficiaria Bogotá S.A.S.
+ For the purpose of establishing the exchange
ratio of the spin-off of BdB, the valuation of Sociedad Beneficiaria Bogotá S.A.S. corresponds to 75% of the value of BHI.
+ Grupo Aval Acciones y Valores S.A. ("Grupo
Aval") incorporated Sociedad Beneficiaria Bogotá S.A.S. with a capital of 1 peso and 1 share, solely for the purpose of acting
as beneficiary company in the spin-off of BdB and its subsequent merger with BHI. AS shareholder of Sociedad Beneficiaria Bogotá
S.A.S. before the spin-off (with 1 peso), Grupo Aval will receive a fraction of a share of Sociedad Beneficiaria Bogotá S.A.S.,
which, in accordance with the provisions of the bylaws of BdB and the merger with BHI, will be repurchased by Sociedad Beneficiaria Bogotá
S.A.S.
+ Once the spin-off of BdB has been completed,
Grupo Aval will be the shareholder of 68.7% of the shares of Sociedad Beneficiaria Bogotá S.A.S.
Description and Purpose
+ Subject to the required approvals, Grupo Aval
intends to spin-off all of its interest in Sociedad Beneficiaria Bogotá S.A.S. in favor of Sociedad Beneficiaria Aval S.A.S.
+ Grupo Aval incorporated Sociedad Beneficiaria
Aval S.A.S. with a capital of 1 peso and 1 share, solely for the purpose of acting as the beneficiary company of the spin-off of Grupo
Aval and its subsequent merger with BHI.
+ Relating the spin-off, as a result of receiving
the spun-off assets (68.7% of the shares of Sociedad Beneficiaria Bogotá S.A.S.), Sociedad Beneficiaria Aval S.A.S., will issue
22,281,017,159 shares in favor of Grupo Aval shareholders. This number of shares is identical to the number of outstanding shares of Grupo
Aval. As of November 30, 2021, the 22,281,017,159 outstanding shares of Grupo Aval are composed of 15,122,739,992 common shares and 7,158,277,167
preferred shares.
+ As a result of the foregoing, for each share
that Grupo Aval's shareholders hold in that entity, they will receive an equal number of shares in Sociedad Beneficiaria Aval S.A.S.
+ Metrix carried out an independent valuation of
Grupo Aval and Sociedad Beneficiaria Aval S.A.S.
+ For the purpose of establishing the exchange
ratio of the spin-off of Grupo Aval, the valuation of Sociedad Beneficiaria Aval S.A.S. corresponds to 68.7% of the value of Sociedad
Beneficiaria Bogotá S.A.S., value established by Metrix Finanzas in the exercise of valuation of the spin-off of BdB.
+ As shareholder of Sociedad Beneficiaria Aval
S.A.S. before the spin-off (with 1 peso), Grupo Aval will receive a fraction of a share of Sociedad Beneficiaria Aval S.A.S., which, in
accordance with the provisions of its bylaws, will be repurchased by the latter company.
Valuation Purpose: Determine the
terms of exchange of the shares that Grupo Aval intends to spin off in favor of Sociedad Beneficiaria Aval S.A.S. as part of the spin-off
process of 75% of Banco de Bogotá's shareholding in BHI.
Source: Grupo Aval
|
|
3.
|
Parts involved in the Transaction
|
Grupo Aval Acciones y Valores S.A. (hereinafter
the "Company" or "Grupo Aval") is a corporation that was incorporated by Public Deed number 0043 of January 7, 1994;
its domicile is located at Carrera 13 No. 26A - 47, Bogotá, D.C., Colombia. It is an entity regulated by Law 1870 of 2017. This
norm specifies that these entities will be subject to inspection and surveillance of the Colombian Superintendency of Finance in its capacity
as Financial Holding Company.
Its corporate purpose is directed to the purchase
and sale of shares, bonds and securities of entities belonging to the financial system and other commercial entities. In the development
of its corporate purpose, the Company may acquire and negotiate all kinds of securities, of free circulation in the market, and securities
in general; promote the creation of all kinds of related or complementary companies with the corporate purpose.
The subscribed and paid-in capital of Grupo Aval
is divided into common shares and preferred shares. All shares, common and preferred, represent the same economic interest, except that
preferred shares have the right to receive a minimum dividend, which will be paid preferentially with respect to that corresponding to
common shares, provided that a dividend has been declared from the resources legally available for such purpose. If dividends are declared,
the minimum dividend in favor of preferred shares will be one Colombian peso ($1.00) per share per semester, provided that this minimum
preferential dividend exceeds the dividend declared for common shares. Otherwise, i.e., if the minimum preferred dividend is not higher
than the dividend declared
for common shares, only the value of the dividend
declared for each common share will be recognized for each preferred share. 1
Ownership structure Grupo Aval
Source: Financial Statements Grupo Aval
|
|
3.2.
|
Sociedad Beneficiaria Aval S.A.S.
|
Sociedad Beneficiaria Aval S.A.S. is a company
incorporated for the purpose of acting as beneficiary company of the spin-off of Grupo Aval and its subsequent merger with BHI. Its equity
corresponds to 68.74% of the shares of Sociedad Beneficiaria Bogotá S.A.S.
In turn, Sociedad Beneficiaria Bogotá S.A.S.
is a company incorporated for the purpose of acting as the beneficiary company of the spin-off of Banco de Bogotá. Its equity corresponds
to 75% of the shares of BHI.
BAC Holding International Corp.
BAC Holding International Corp. "BHI"
(formerly Leasing Bogota, S. A. Panama (LBP)) is incorporated under the Corporation Law of the Republic of Panama since 1972. This company
changed its corporate name on September 17, 2021. BHI is wholly owned by Banco de Bogotá S.A., a bank authorized in the Republic
of Colombia, which in turn is a subsidiary of Grupo Aval Acciones y Valores, S. A., an entity domiciled in the Republic of Colombia.
Banco de Bogotá owns 100% of the shares
of BAC Credomatic, Inc. which provides through its indirect subsidiary BAC International Bank, Inc. a Panamanian banking institution,
a wide variety of financial services to individuals and institutions mainly in Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua
and Panama. BHI acquired in 2020 99.57% of the common shares of Multi Financial Group Inc. (MFG), a Panamanian banking institution. Multi
Financial Group Inc. provides through its subsidiaries a wide variety of financial services to individuals and institutions primarily
in Panama.
1 Prospectus - Grupo Aval Acciones y
Valores S.A. non-voting preferred dividend shares.
As of September 30, 2021, BHI ceased to be a shareholder
of Multi Financial Group, Inc. ("MFG"), whose ownership was transferred to Multi Financial Holding Inc. ("MFH"), a
company 100% owned by Banco de Bogotá S.A.
|
|
4.
|
Metrix Finanzas, independent technical advisor
|
Metrix Finanzas was hired by Grupo Aval Acciones
y Valores to determine the terms of exchange of the shares in the spin-off process of 75% of its shareholding in BHI in favor of the shareholders
of Banco de Bogotá including Grupo Aval Acciones y Valores S.A. and subsequently the spin-off of the corresponding pro rata in
favor of its own shareholders.
Pursuant to the
functions set forth in literal B of art. 11.2.1.4. 50 of Decree 2555 of 2010 with respect to issuers of securities subject to the exclusive
control of the Colombian Superintendency of Finance (SFC) and in order to adequately comply with the requirements necessary for the SFC
to issue the respective authorizations in accordance with the principles of speed, efficiency and economy that govern administrative actions,
Metrix Finanzas developed an independent technical study through which it determined the value of the entities and the exchange ratio
of the transaction described above as required by law and regulation for this type of transactions.
This report is submitted by Mejoracinco S.A.S.,
a company incorporated under Colombian law, identified with commercial registration No. 00908448 of December 21, 1998 and N.I.T. 830.053.289-1
as stated in the certificate of existence and representation previously submitted. Mejoracinco S.A.S. has 22 years of operation in accounting
and financial matters and operates the Metrix Finanzas brand. The attached document presents the relevant experiences in which Mejoracinco
S.A.S. has acted as financial advisor in matters relevant to the preparation of this document.
Address: Avenida Calle 72 # 6 – 30, Floor
2- Bogotá- Colombia.
e-mail: jhmelguizo@metrixfinanzas.com
Phone: (+57) 6012120735
The following individuals participated in the preparation
of this valuation report, whose academic background and experience is reflected and accredited in the resumes previously submitted:
+ Jorge Hernán Melguizo.
+ Yolanda María Fadul.
+ Juan Pablo Espitia.
+ Daniel Machuca Acevedo.
+ Sergio Aldair Clavijo.
|
|
5.
|
Valuation accounting considerations
|
Metrix Finanzas developed the valuation of Grupo
Aval using the Group's separate financial statements. This valuation includes the projections and dividends of Banco de Bogotá,
Banco de
Occidente, Banco Popular, Banco AV Villas, Corporación
Financiera Colombiana, Porvenir and BAC Holding International (formerly Leasing Bogotá Panamá).
In accordance with Colombian law, Grupo Aval is
required to prepare separate and consolidated financial statements. The separate financial statements serve as the basis for the distribution
of dividends and other appropriations by the shareholders. The separate and consolidated financial statements are submitted to the Shareholders'
Meeting for approval.
The Company's separate financial statements are
those financial statements where the investments in subsidiary companies are recorded under the equity method, that is, they are recorded
at their acquisition cost and are periodically adjusted by the changes in the parent company's equity interest in the net assets of the
subsidiaries, minus the dividends received from them in cash and the effect of the adjustments resulting from the homogenization to the
parent company's accounting policies. The result for the period of Grupo Aval includes its participation in the result for the period
of the subsidiaries, as well as in the Other Comprehensive Income of the subsidiaries. At the end of each year-end, Grupo Aval performs
a qualitative and quantitative evaluation for impairment of its investments. Grupo Aval applies the exceptions contemplated in External
Circular 036 of 2014 of the Colombian Superintendency of Finance, regarding the classification, valuation and accounting of investments,
with respect to the separate financial statements.
Associated companies are those entities where there
is no control, but the Group does have significant influence and are accounted for by the equity method. They are presented in the financial
statements as "investments in associates". Grupo Aval exercises significant influence in another entity if it owns directly
or indirectly 20% or more of the voting power in the investee, unless it can be clearly demonstrated that such influence does not exist.
The equity method is a method of accounting according to which the investment is initially recorded at cost and is subsequently periodically
adjusted for changes in the equity interest of the parent company, less dividends received from them in cash and the effect of adjustments
resulting from the homogenization to the parent company's accounting policies. The result for the period of the Aval Group includes its
participation in the result for the period of the associate, as well as in the Other Comprehensive Income of the associates.
Loans
/ Assets (%)
Source: Colombian Superintendency of Finance
Investments
/ Assets (%)
Source: Colombian Superintendency of Finance
Gross
Loans (Ps. billions)
Source: Colombian Superintendency of Finance
Nominal
GDP growth vs Gross loans
Source: Colombian Superintendency of Finance
Gross
loans composition
Source: Colombian Superintendency of Finance
Commercial
gross loans (Ps billions)
Source: Colombian Superintendency of Finance
Consumer
gross loans (Ps billions)
Source: Colombian Superintendency of Finance
Mortgages
gross loans (Ps billions)
Source: Colombian Superintendency of Finance
Commercial gross loans growth
Source: Colombian Superintendency of Finance
Consumer
gross loans growth
Source: Colombian Superintendency of Finance
Mortgages
gross loans growth
Source: Colombian Superintendency of Finance
Nominal GDP growth vs Commercial gross loans
Source: Colombian Superintendency of Finance
Nominal GDP growth vs Consumer gross loans
Source: Colombian Superintendency of Finance
Nominal
GDP growth vs Mortgages gross loans
Source: Colombian Superintendency of Finance
Subsidiaries, affiliates, and associates / Investments
(%)
Source: Colombian Superintendency of Finance
Saving
accounts, time deposits, checking accounts and investments (Ps billions)
Source: Colombian Superintendency of Finance
Saving accounts, time deposits and checking accounts composition
Source: Colombian Superintendency of Finance
Saving
accounts (Ps. billions)
Source: Colombian Superintendency of Finance
Time
deposits (Ps. billions)
Source: Colombian Superintendency of Finance
Checking
accounts (Ps. Billions)
Source: Colombian Superintendency of Finance
Net
Income (Ps. Billions)
Source: Colombian Superintendency of Finance
Total
Solvency Ratio (%)
Source: Colombian Superintendency of Finance
Total Solvency ratio= Technical capital / (Risk-weighted
assets + market risk + operational risk).
Net
Interest Margin
Source: Colombian Superintendency of Finance
ROA (%)
Source: Colombian Superintendency of Finance
ROE
(%)
Source: Colombian Superintendency of Finance
Deposits
/ Loans
Source: Colombian Superintendency of Finance
Cost
of Risk (%)
Source: Colombian Superintendency of Finance
90
days time deposit rate
Source: Colombian Superintendency of Finance
General
purpose commercial interest rate
Source: Colombian Superintendency of Finance
Consumer
credit cards interest rate
Source: Colombian Superintendency of Finance
Consumer
interest rate excluding credit cards
Source: Colombian Superintendency of Finance
Comparable
financial institutions in Latin America
Source:
Feedback from 2021 Latam London Conference – Morgan Stanley (Sep 20,2021)
|
|
7.
|
Methodology of valuation
|
|
|
7.1.
|
Projection methodology for financial statements
|
In this section, we detail the valuation methodology
implemented by Metrix Finanzas. This methodology was executed calculating the present value of Grupo Aval's dividends. According to this,
Metrix Finanzas performed the following intermediate steps:
+ Separate financial statements were projected
for each of Grupo Aval's subsidiaries and subordinates.
|
|
·
|
Banco de Bogotá, Banco de Occidente, Banco Popular and Banco AV Villas: The financial information
used was as of November 2021. Regarding the Financial information dated September 2021 was extracted from de Superintendency of Finance
and the information dated for October and November was provided by Grupo Aval.
|
|
|
·
|
Corficolombiana: The financial information used was as of October 2021. The financial information dated
October 2021 was extracted from the interim financial statements provided by Grupo Aval. Furthermore, Metrix received Corficolombiana's
projections and business plans for the period 2021-2026.
|
|
|
·
|
Porvenir: The financial information used was obtain from the projections made by Deloitte.
|
|
|
·
|
BAC: The Financial statements as of September 2021, that were used was provided by Banco de Bogotá.
|
|
|
·
|
MFG: Metrix Finanzas used MFG projections provided by Banco de Bogotá.
|
+ The Projections for Grupo Aval and each entity
were made in billions of Colombian pesos (Ps. Billions). Regarding the investments, results and operations in foreign currencies were
denominated in Colombian pesos, using the exchange rate stablished in the Medium-Term Fiscal Framework (in Spanish “MFMP”).
+ Grupo Aval’s profits were calculated for
each of its subsidiaries, in accordance with the equity participation method.
+ Grupo Aval’s dividends were calculated
from each one of its subsidiaries, according to its percentage of participation in them.
+ We projected the Financial Statements of Grupo
Aval and the flow of dividends to be distributed.
+Grupo Aval, its subsidiaries and associates defined
a business strategy for the projection path, which is reflected in this document, with the purpose of presenting an independent valuation
of the companies. Metrix Finanzas reflected the aformetioned strategy in the assumptions used for the
projection of the of each of the entities and Grupo
Aval. The details of the assumptions used in the valuations performed by Metrix Finanzas can be found in chapter 7.4 of this document.
+ Banco de Bogotá: In October 2021, Banco
de Bogotá and BAC were valued as of September 30, 2021, using financial statements dated July 31, 2021 and June 30, 2021, respectively.
In November 2021, upon request, the aforementioned valuation was updated as of October 31, 2021, which it was completed in December 2021.
+ Grupo Aval: In December 2021, Banco de Occidente,
Banco Popular and Banco AV Villas were valued dated October 31, 2021 using financial statements as of October 31, 2021.
+ In December 2021, it was requested to update
the value of all companies as of November 30, 2021. These monthly updates are intended to reflect the economic realities in each month.
However, they do not change the long-term projections since the companies' explicit strategy has not undergone any relevant changes.
The Valuation Method used was the dividend flow
discounting.
Dividend discount model
This methodology is widely applied in companies
in various sectors, which are not CAPEX intensive and in which working capital is not one of the most relevant variables for value calculation.
Damodaran (2012) suggests that banks, on average, have small or no CAPEX cost and low working capital requirements. Additionally, a shareholder
of a company receives dividend income from the company.
+ Advantages
|
|
·
|
This methodology is with greater methodological basis and widely used.
|
|
|
·
|
Detailed forecast of each financial item linked to cash flow generation in the company's operation.
|
|
|
·
|
The value of the company comes from its ability to generate value for investors.
|
+ Disadvantages
|
|
·
|
It depends on the quality of the information available on the company and the sector to which it belongs.
|
|
|
·
|
Quite sensitive to the estimate of the perpetuity rate.
|
|
|
7.3.
|
Macroeconomic assumptions for Colombia
|
+ Gross Domestic Product (GDP-PIB)
The macroeconomic information used is sourced from
the International Monetary Fund (IMF).2
|
2.022
|
PIB 2022
|
3.8%
|
|
2.023
|
PIB 2023
|
3.3%
|
|
2.024
|
PIB 2024
|
3.4%
|
|
2.025
|
PIB 2025
|
3.4%
|
|
2.026
|
PIB 2026
|
3.5%
|
+ Inflation
The macroeconomic information used is sourced from
the International Monetary Fund (IMF).3
|
2.022
|
Inflation 2022
|
3.54%
|
|
2.023
|
Inflation 2023
|
3.04%
|
|
2.024
|
Inflation 2024
|
3.04%
|
|
2.025
|
Inflation 2025
|
2.99%
|
|
2.026
|
Inflation 2026
|
3.01%
|
The GDP and inflation variables were used to calculate
the portfolio growth indicator against nominal GDP growth.
+ Market Representative Exchange
Rate (TRM)
We used the Colombian Ministry of Finance's medium-term
fiscal framework exchange rate for 2021.
|
2.022
|
TRM 2022
|
3,744
|
COP/USD
|
|
2.023
|
TRM 2023
|
3,822
|
COP/USD
|
|
2.024
|
TRM 2024
|
3,903
|
COP/USD
|
|
2.025
|
TRM 2025
|
3,985
|
COP/USD
|
|
2.026
|
TRM 2026
|
4,068
|
COP/USD
|
This variable was used to convert the accounts
reflected in dollars.
2
International Monetary Fund, World Economic Outlook Database, October 2021
3 Idem
|
|
7.4.
|
Valuation model assumptions
|
|
|
7.4.1.
|
Financial projections
|
+ The valuation is made with a discount date of
November 30, 2021.
+ Projections are made over a 5-year forecast.
+ A growth rate is used for dividends between 2026
and 2031. From 2032 onwards a terminal value is calculated with a perpetual long-term growth rate.
+ For the calculation of taxes, is use as a basis
the legal rate established by Law 2155 of 2021
+ Grupo Aval provided us the calculations under
the following methodologies:
|
|
o
|
Risk-weighted assets calculation methodology.
|
|
|
o
|
Methodology for calculating the Primary Capital (Capital Primario Ordinario).
|
|
|
o
|
Total Capital calculation methodology.
|
|
|
7.4.2.
|
Loan portfolio projections
|
For Metrix Finanzas, the years 2020 and 2021 are
considered atypical years for the normal performance of the financial institutions subject to these valuations. The financial behavior
of the year 2019 is considered the last year of normal behavior before the pandemic. In meetings with officials of the entities, it was
confirmed that the current portfolio placement strategy will not be modified in the near future. Metrix Finance took into account the
following considerations in the projection of the banks' portfolio:
+ The portfolio projection for the period from
2022 to 2026 was made by type of loan (mortgage, consumer, commercial, etc.).
+ As a basis, the historical portfolio growth was
used for mortgage, commercial and consumer portfolio types, which represent 99% of the banks' total portfolio.
+ Portfolio projections for 2022-2026 remain constant
by type of loan. The above, taking into account that the banks' placement strategy remains unchanged. According to this strategy, mortgage
and consumer loans will grow faster than the commercial portfolio, increasing the share in the banks' total portfolio.
+ In the projections for each bank, the portfolio
growth rates are by type of loan as follows:
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7.4.2.2.
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Banco de Occidente
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7.5.
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Projection results by entity.
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Founded in 1870, Banco de Bogotá S.A. is
the oldest financial institution in Colombia. It is a subsidiary of Grupo Aval, the leading financial group in Colombia.
Banco de Bogotá covers the entire national
territory and develops international operations through agreements with banks , its branches and foreign agencies around the world; Also,
it offers banking services to individuals, companies and SMEs.
Source:
Colombian Superintendency of Finance
Source: Colombian Superintendency of Finance and
projections from Metrix Finanzas
Source: Colombian Superintendency of Finance and
projections from Metrix Finanzas
Equity method of accounting
+ BHI: Metrix Finanzas conducted an independent
valuation of BHI, the results of which are presented in this report. From this valuation, the value of the Profit Sharing Method (MPU)
was taken from Banco de Bogotá.
+Porvenir: The MPU value for Porvenir was taken
from the valuation report dated on June 2021 by Deloitte.
+MPU
projections for Corficolombiana, MFG and other companies were provided by Banco de Bogotá.
Source: Projections from Metrix Finanzas
Source: Colombian Superintendency of Finance and
projections from Metrix Finanzas
Grupo BAC Credomatic is one of the leading financial
holding companies in Central America. Through its subsidiary banks, it offers financial services in El Salvador, Guatemala, Honduras,
Nicaragua, Costa Rica and Panama.
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7.5.3.
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Banco De Occidente
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Founded in 1965 in Cali, Banco de Occidente belongs
to Grupo Aval Acciones y Valores, which owns 72.3% of the bank. It currently has a network of 195 branches in Colombia, as well as subsidiaries
in Panama and Barbados.
Source: Colombian Superintendency of Finance
Source: Colombian Superintendency of Finance
Source:
Colombian Superintendency of Finance and Metrix Finanzas projections
Source: Colombian Superintendency of Finance and
Metrix Finanzas projections
Incorporated in 1950, started operations in Manizales.
Up to the date has a network of over 200 branches.
Grupo Aval Acciones y Valores S.A. is the main
shareholder of the bank with a stake of 93,7%.
Source:
Colombian Superintendency of Finance
Source: Colombian Superintendency of Finance and
Metrix Finanzas projections
Source:
Colombian Superintendency of Finance and Metrix Finanzas projections
Source: Colombian Superintendency of Finance and
Metrix Finanzas projections
Incorporated in 1972 as “Corporación
de Ahorro y Vivienda4 Las Villas” and in 1997 it became
a subsidiary of Grupo Aval Acciones y Valores.
Initially founded as a specialized bank for the
financing of the construction industry.
Grupo
Aval Acciones y Valores S.A currently owns the 79,9% of the shares of Banco AV Villas.
Source:
Colombian Superintendency of Finance
Source: Colombian Superintendency of Finance and
Metrix Finanzas projections
4 The equivalent to a Thrift. A specialized
financial entity in Home Loans.
Source:
Colombian Superintendency of Finance and Metrix Finanzas projections
Source: Colombian Superintendency of Finance and
Metrix Finanzas projections
Metrix Finance used financial information from
the financial institution as of October 2021. The financial information as of October 2021 was taken from the interim financial statements
provided by Grupo Aval. Additionally, Metrix Finanzas received the projections and business plans developed by Corficolombiana for the
period 2021-2026.
Metrix Finanzas did not perform tax or accounting
analyses, nor did it issue an opinion on the business plans or on the assumptions submitted by Banco de Bogotá.
Forecasts:
This section describes the main accounts that were
used in the projection. Corficolombiana participates in the following businesses:
+ Treasury investments.
+ Investment Banking.
+ Strategic portfolio:
Source: Corficolombiana
Summary of projections
Source: Corficolombiana
Source: Corficolombiana
7.5.7 Porvenir
Incorporated in 1991 as a pension fund. Its current
functions include the administration of pension and severance funds, as well as the administration of the trusts5
constituted by the territorial entities.
Among its main shareholders are Banco de Bogotá
(36.5%), Banco de Occidente (24.16%), Grupo Aval (20.0%), Fiduciaria Bogotá (10.4%) and Fiduciaria de Occidente (8.9%).
Source: Deloitte valuation of Porvenir
Source: Deloitte valuation of Porvenir
5 “Patrimonios Autónomos”
for its denomination in Spanish.
Source: Deloitte valuation of Porvenir
Source: Deloitte valuation of Porvenir
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8.
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Grupo Aval valuation results
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Grupo Aval Acciones y Valores S.A. is the holding
company of Aval Financial Conglomerate, one of the main financial groups in Latin America, with presence in 12 countries. Grupo Aval is
one of the largest financial groups in Colombia and the leading banking group in Central America according its level of assets.
Under Grupo Aval's projection scenario described
in section "8.1 Grupo Aval Financial Statements", the Group generates profits during all projection years, generating dividends
each year. Therefore, preferred and common shares will receive the same dividend. As a result of the above, the same price is estimated
for common and preferred shares.
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8.1.
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Grupo Aval’s Financial Statements
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Source: Grupo Aval and projections from Metrix
Finanzas
Source: Grupo Aval and projections from Metrix
Finanzas
Source: Grupo Aval and projections from Metrix
Finanzas
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8.2.1.
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Perpetual Growth Rate
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Source: Metrix Finanzas
An industry-weighted discount rate was used for
each of Grupo Aval's investments.
+ For Porvenir the discount rate defined
by Deloitte in its valuation was used. (12,16%).
+
For the investments corresponding to the banking sector, a discount rate was used derived from the Capital Asset Pricing Model (CAPM)
methodology. The main variables are presented below:
Source: Metrix Finanzas
The weighted discount rate of Grupo Aval is 11.92%.
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8.2.3.
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Sociedad Beneficiaria Bogotá S.A.S. valuation
|
Representative market exchange rate (TRM) June
30, 2021 = 3,756.67 / TRM October 31, 2021 = 3,784.44 / TRM November 30, 2021 = 4,010.98
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8.2.4.
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Grupo Aval valuation:
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8.2.5.
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Sensitivity analysis:
|
The following is the sensitivity of the share price
in relation to the cost of equity and the perpetual growth rate.
Considerations
|
|
1.
|
Sociedad Beneficiaria Aval S.A.S. is a new company that, prior to the completion of the spin-off, will
have 1 outstanding share with a par value of COP 1.
|
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|
2.
|
Grupo Aval as the Spin-off Company has a total of 22,281,017,159 issued and outstanding shares.
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3.
|
Grupo Aval partially spins off its equity (68.74% of the shares of Sociedad Beneficiaria Bogotá
S.A.S.) for the benefit of Sociedad Beneficiaria Aval S.A.S. The spun off equity value is COP 7,392,100,768,056* corresponding to 227,710,487
of the outstanding shares of Sociedad Beneficiaria Bogotá S.A.S.
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Shareholders
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Ps. Value
|
Ownership
|
|
Grupo Aval
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7.392.100.768.056*
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0.999999999999865
|
|
Initial capital Sociedad Beneficiaria Aval S.A.S.
|
1
|
0.000000000000135
|
*Value corresponding at November 30,
2021 (USD 3,575 MM x 0.75 x 0.6874) exchange rate as of November 30, 2021: 4,010.98
Exchange ratio
|
|
1.
|
As a consideration for the contributions made by Grupo Aval, Sociedad Beneficiaria Aval S.A.S. will issue
in favor of Grupo Aval's shareholders 22,281,017,159 shares, maintaining for the Sociedad Beneficiaria Aval S.A.S. the same stake over
the total issued and outstanding shares held by the shareholders of Grupo Aval S.A.S.
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2.
|
The value per share delivered the shareholders of Grupo Aval will be: COP 7.392.100.768.056 / 22.281.017.159
= COP 331,77.
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3.
|
The initial shareholder of Sociedad Beneficiaria Aval S.A.S. will be entitled for the fraction of its
stake in the equity of Sociedad Beneficiaria Aval S.A.S. (COP 1), the fraction of 0.003014 over one single share (COP 1 / 331.77 = 0.003014).
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Shareholders
|
Number of shares
|
Ownership
|
|
Grupo Aval
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22,281,017,159
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0.999999999999865
|
|
Sociedad Beneficiaria Aval S.A.S
|
0.0030140
|
0.000000000000135
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CONTACT INFORMATION
Av. Calle 72 No 6 – 30 Piso. | Bogota, Colombia
jhmelguizo@metrixfinanzas.com
+57 6012120735 / 6012104239
www.metrixfinanzas.com
This page has been left in blank
intentionally
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: January 31, 2022
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GRUPO AVAL ACCIONES Y VALORES S.A.
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By:
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/s/ Jorge Adrián Rincón Plata
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Name:
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Jorge Adrián Rincón Plata
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Title:
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Chief Legal Counsel
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