Regarding the information related to the "Paradise Papers", ISA informs the public that

• In 2014, ISA incorporated Linear Systems Re Ltd., a captive insurance company of this business group, with the purpose of obtaining the best technical and economic conditions in the countries where it has presence for the assurance of its and its affiliates' and subsidiaries' assets at the reinsurance market. This captive company transfers 100% of the high credit rating reinsurers which have the capacity to cover critical operating risks of business operations. This company was incorporated pursuant the Good Corporate Governance Standards the holding has and complying with the applicable regulations.

• Companies from the transmission sector have a limited offer for insuring its assets, given that the risks they are exposed to are not the most desire by the insurance market, and therefore, it is not easy to obtain the best coverages. This is the main reason ISA, after analyzing several risk transfer alternatives, found a captive insurance company as the best option to handling its assets' risk.

• There is no regulation for these companies in Colombia. Therefore, Linear Systems Re Ltd was incorporated in Bermuda, after performing all the necessary analyzes. In Bermuda, a highly developed legal framework was found for captive insurance companies as well as a consolidated insurance and reinsurance ecosystem, and the availability of specialized service suppliers needed for its operation. This makes easy for ISA and any international and Colombian business group to effectively and efficiently manage their risks in Bermuda under the Bermuda Monetary Authority (BMA).

• ISA reports the income generated by this affiliate in its financial statements, which are audited by Ernst & Young, statutory auditor for the holding. From the taxing perspective, when ISA receives dividends, taxes are liquidated and paid in Colombia. Linear Systems Re Ltd., is a company which only purpose is the management and transference of risks and consequently it has not granted loans to any of the holding companies.

• It is important to note that Bermuda has an effective exchange of information with the Colombian Government and it is not included in the list of tax havens countries, pursuant to Decrees 1996 and 2095 of October 07 and 21, 2017, both enacted by the Ministry of Finance and Public Credit. This aspect was paramount for the ISA's Board of Directors when incorporating Linear Systems Re Ltd.

ISA was one of the companies to which the Espectador newspaper and Plataforma de Periodismo, jointly asked for information about Linear Systems Re Ltd which is domiciled in Bermuda. Their request was received in September, which was promptly and clearly answered by ISA.

ISA is always available to disclose any information about the way it conducts its businesses.

November 07, 2017