Support Committees to Board of Directors

Objective: to support GFNorte’s Board of Directors in monitoring the management, performance and execution of the Group’s businesses and of their controlling individuals, considering the relevance that these have in the financial, administrative, and legal situation of the Group; as well as in the execution of the agreements approved in the General Shareholders’ Meeting.

Structure: integrated exclusively by independent Board Members, with at least three board members, all designated by GFNorte’s Board of Directors, and proposed by its Chairman.

Each member of the Committee has the right for one vote; resolutions must be approved by a majority vote of the attending members, in the event of a tie, the Chairman of the Board shall have the deciding vote. In the event that a board member has a conflict of interest with any specific matter, he should abstain to participate in the voting process, not affecting the required quorum for Committee.

* The Audit and Corporate Practices Committee’s Chairman is appointed and/or removed of his position exclusively by the General Shareholders’ Meeting, and is not able to preside over the Board of Directors.

Sessions

• Frequency: As many times as necessary.
• Request: convened by:
  • Chairman of the board of Directors
  • 25% of the Members
  • GFNorte’s CEO
  • CAPS Chairman

Faculties

1. Request the opinion of independent experts in such cases where it is judged to be convenient, for the appropriate performance of their functions.
2. Have full availability of book, registers, facilities and the support of the employees’ entities under its responsibility.
3. Require relevant officers and other employees of GFNorte and the financial entities comprising it, reports regarding the elaboration of financial and of any other type of information that it considers necessary for the execution of their duties.
4. Do research on the possible non-fulfillment of those with knowledge regarding operational policies and guidelines, the Internal Control System, internal audit and accounting registration system, either of the Group or the financial entities, through an examination of documentation, registrations and other proof or evidence, to the extent necessary to fulfill this supervision.
5. Receive observations expressed by shareholders, Board Members, relevant officers, employees and, by any third party in general, regarding matters referred to in the previous paragraph, as well as to carry out actions that are reasonable in their opinion in connection with such observations.
6. Request periodic meetings with the relevant officers, as well as the delivery of any type of information related to the internal control and internal audit of the Group or the financial entities that comprise it.
7. Meet with the Board of Director, relevant GFNorte’s officers, internal comptroller, Internal and external auditor, authorities and investors.

Functions

The Committee, in the development of its activities, shall establish the necessary procedures for the general performance of its duties. In any case, Committee members shall take as a basis for their activities, information prepared by the Internal Comptroller, Internal and External Auditors as well as by General Management.

Below, functions per area are detailed:

Internal Control Systems

• Monitor the establishment of mechanisms and internal controls that enable verification that acts by GFNorte and its financial entities adhere to applicable regulations, as well as implement methodologies that make it possible to check compliance with the foregoing. (LRAF Article 57 Section II Subsection p).
• Report the situation of the internal control system to the Board of Directors of GFNorte and the financial institutions it is accountable for or legal entities in which it exercises control, including irregularities detected, if the case. (LRAF Article 57 Section II Subsection d).

Financial and Accounting Information

• Discuss and revise GFNorte’s financial statements with the persons responsible for its preparation, and based on that, to recommend or not recommend the Board’s approval. (LRAF Article 57 Section II Subsection c).
• Review significant accounting and reporting issues, including complex or unusual transactions as well as professional declarations and recent regulations, and understand its impact on the financial statements.
• Review the verdict of the annual financial statements with Management and with the Internal and External Auditors, prior to submission to regulatory authorities.
• Select and approve the hiring of the independent expert who will perform impairment testing of goodwill.
• Review the results of the goodwill impairment test.

Internal Comptroller

• Follow-up on the Internal Comptroller’s activities, keeping the Board informed of its performance. (CUB Article 144).
• Review the report of management that the person responsible for the Internal Comptroller’s functions shall deliver to the Committee and the CEO at least twice a year. (CUB Article 167).
• Review the reports presented by the Internal Comptroller on the results of the inspection visits carried out by supervising agencies.

Internal Audit

• Follow-up on the Internal Auditor’s activities, keeping the Board informed of its performance. (CUB Article 144)
• Monitor the independence of the Internal Audit area with regards to the other business and administrative units. Any lack of independence must be reported to the Board. (CUB Article 156 Section IV)
• Inform the Board of Internal Audit’s situation in GFNorte, its financial or legal entities or corporations in which it exercises control, including any detected irregularities, if the case. (LRAF Article 57 Section II Subsection d)
• Approve the Statutes of Internal Audit’s function.
• With the prior opinion of the CEO, to approve the annual work program of the Internal Audit area. (CUB Article 156 Section VIII). If the case, amendments to the referred annual program should be presented for Committee’s approval in the following session from the requirement.
• Review, based on reports from the Internal Audit area and the External Auditor, at least once a year or when required by the CNBV, that the Internal Audit program is carried out in accordance with appropriate quality standards in accounting matters and internal controls, and that the activities of the Internal Audit area are carried out effectively. (CUB Article 156 Section III)
• Revise the report prepared by the head of Internal Audit functions on the results of its management, at least every six months or as frequently as the Committee requires. The foregoing, notwithstanding that the head of Internal audit functions learns of, immediately, the detection of any deficiency or deviation identified in the exercise of their functions and that according to the Internal Control system is considered significant or relevant. (CUB article 161).
• Approve the hiring of service providers for the external evaluation of the quality of Internal Audit’s performance.
• Revise the results of internal and external quality assessments carried out for Internal Audit’s functions and where appropriate, to follow-up on the implementation of certain recommendations.
• Review, at least annually, the organization’s structure, capabilities and the adequacy of resources allocated to the Internal Audit area for the performance of its functions and, where appropriate, approve actions required in order to ensure the greatest effectiveness in the fulfillment of its objectives and goals.
• Meet regularly with the Internal Auditor, without the presence of management for comments and observations on the progress of its work. (CMPC Practice 23, Section IV).

External Audit

• Follow-up on External Audit activities, keeping the Board informed of its performance. (CUB Article 144)
• Monitor the independence of the External Auditors obtaining their statements in this regard and evaluating the nature of the additional services provided.
• Review the External Auditor’s report on elements to be considered to define the scope of their audit and develop a work plan.
• Review External Audit’s detailed work plan, including the hours assigned to each job and its cost.
• Evaluate the performance of the legal entity providing GFNorte’s external audit services, as well as analyze the verdict, opinions or reports drawn up and signed the External Auditor. For this purpose, the Committee may require the presence of the External Auditor when deemed appropriate and without prejudice must reunite with the Committee at least once a year. (LRAF Article 57 Section II Subsection b).
• Meet periodically with the External Auditor, without the presence of management, for comments and observations on the progress of its work. (CMPC Practice 23 Section IV).

Shareholder’s Meetings and Board of Directors Agreements

• Monitor that the CEO fulfills the agreements made between the Shareholders’ Assemblies and the Board of Directors of GFNorte, according to the instructions which, if the case, are dictated by the Assembly or the Board. (LRAF Article 57 Section II Subsection o).

Authorizations from the Board of Directors and Shareholder Rights

• Monitor that the Board the topics that correspond to it and respects the shareholders’ rights in accordance that established in the LRAF, as well as policies derived from them to. (LRAF Article 57 Section II Subsection g, in relation to Articles 39 Section III and 65). The other regulations established by the LRAF or in GFNorte’s bylaws, in accordance with the functions assigned by the LRAF.

Prevention of Conflicts of Interests

• The implementation of the Conflicts of Interests’ Prevention System, aiming at every moment to work according to GFNorte’s financial entities’ strategies and objectives, taking the preventive and corrective measures to rectify any deficiency detected in a reasonable term, complying with the features of the referred measures. (LARF, Article 14 and General Rules for Financial Groups, article 7).

In the area of Corporate Practices
Opinions for approval by the Board of Directors

• Policies and guidelines for the use or enjoyment of assets that make up GFNorte’s patrimony, as well as financial institutions and other legal entities that exercise control, through related people.
• Acts, each individually, with Related People, proposed to celebrate with GFNorte.
• Policies for the granting of joint loans, loans or any type of credit or guarantee to Related People.
• Acts that are executed, either simultaneously or successively, which by their nature may be considered as one and that are intended to be carried out by GFNorte or financial institutions that are members of the financial group, in the span of one fiscal year, when they are unusual or non-recurring, or when their amount fits into any of the cases referred to by the LRAF.
• The appointment and, if the case, dismissal of GFNorte’s CEO and this comprehensive remuneration, as well as policies for the designation and comprehensive remuneration of other relevant managers.
• Any waivers so that a Board member, relevant officer or person with authority may take advantage of business opportunities for, or on behalf of third parties, corresponding to GFNorte or the financial institutions that comprise it.

In the area of Audit
Opinions for approval by the Board of Directors

• Guidelines in the areas of Internal Control and Internal Audit for GFNorte and the financial institutions under its responsibility.
• GFNorte’s accounting policies, adjusted to the LRAF.
• GFNorte’s financial statements.
• Hiring the corporation that will provide the external audit services and, if the case, supplementary or complementary services to the external audit services.
• When the Board of Directors’ decisions are not consistent with the Committee’s views, the CEO shall be instructed to disclose such circumstances to the General Shareholders’ Assembly that takes place after this Act, as well as the CNBV, within ten working days of the corresponding determination.

Report to the Board of Directors

• The Chairman of the Committee should draw up an annual report* on the activities that correspond to such organ and submit it to the Board of Directors.
• Prepare an opinion of the CEO’s report on the business’ progress and submit it for consideration to the Board of Directors for subsequent submission to the Shareholders’ Meeting, relying on, among other things, the External Auditor’s opinion.
• Support the Board of Directors in the preparation of the report on major accounting policies and criteria and information following the preparation of financial information.
• Support the Board of Directors in the preparation of the report on intervened operations and activities in accordance with the LRAF. To prepare the report, as well as opinions, the Committee should hear from relevant officers; in the case of any difference of opinion with the latter, such differences should be incorporated into the aforementioned reports and opinions.
• Inform the Board of important irregularities detected in the exercise of functions and, where appropriate, the corrective actions taken or proposals for action to be implemented.
• A progress report in the review of the financial statements’ External Auditor, as well as the result of the reviewed verdict of the annual financial statements.

In the area of Corporate Practices
Annual Report

• Observations regarding the performance of relevant managers.
• Acts with Related Persons, during the period reported, detailing the more significant characteristics.
• Emolument or comprehensive remuneration packages for the CEO and relevant executives.
• Any exemptions granted by the Board so that a Board member, relevant Director or person with authority, can take advantage of business opportunities for himself or on behalf of third parties, that correspond to GFNorte or to financial institutions under its responsibility
• Observations made by commissioned supervisors of the financial institutions of the financial group, or the CNBV for GFNorte, as a result of supervision of the same.

In the area of Audit
Annual Report

• The state of the Internal Control and Internal Audit systems of GFNorte, of financial institutions or companies in which it exercises control and, where appropriate, the description of its deficiencies and deviations, as well as aspects requiring improvement, taking into account the opinions, reports, press releases and the opinion of the External Auditor as well as reports issued by independent experts who rendered services during the period the report covers.
• The mention and follow-up of implemented preventive and corrective measures based on the results of investigations related to non-compliance with guidelines and operational policies and accounting records, of either GFNorte or financial institutions that it is responsible for.
• Evaluation of the performance of the legal entity providing external audit services and the External Auditor responsible for this.
• The description and assessment of additional or complementary services provided, and if the case, the legal entity responsible for performing the external audit, as well as those provided by independent experts.
• The main results of revisions to financial statements of GFNorte and the financial institutions under its responsibility.
• The description and effects of modifications to approved accounting policies during the period that the report covers.
• Measures adopted for relevant observations made by shareholders, Board members, relevant officers, employees and, in general, any third party, with respect to accounting, internal controls and issues related to internal or external auditor, issues arising from allegations based on facts considered to be irregular in the administration.
• Follow-up on agreements from the Shareholder’s Meetings and the Board of Directors’ Meetings.

Objective: To manage the risks that the Institution is exposed to and ensure that operations are carried out in accordance with the objectives, policies and procedures of Comprehensive Risk Management, as well as to the global limits of risk exposure approved by the Board.

Structure: According to the applicable regulation, the CPR should be comprised of at least two members of the Board of Directors (one of whom will preside); the CEO and the Responsible for the Comprehensive Risk Management Unit.

The Board Members comprising the CPR should be independent members.

Each member has the right for a vote, and resolutions must be approved by a majority vote of the attending members.

Sessions

• Frequency: Monthly.

Functions: The CPR performs the following functions:

Propose to the Board of Directors:

• The objectives, guidelines and policies for Comprehensive Risk Management, as well as their modifications.
• Global Limits for risk exposure and, if the case, Specific Limits for Risk Exposure considering consolidated risk, broken down by business unit or risk factor, its origin and causes, considering what is established in Articles 79 to 86 Bis 2 of the general applicable rules for Credit Institutions, as well as; if the case, Risk Tolerance Levels.
• The mechanisms for implementing corrective actions.
• The special cases or circumstances in which the specified global limits may be exceeded.
• At least once a year, the Capital Sufficiency Evaluation, including the capital estimates and, if the case, the capitalization plan.
• The Contingency Plan and amendments.

Approve:

• The Specific Limits for Risk Exposure and the risk tolerance levels when the Board delegates any powers for this purpose, as well as the liquidity risk indicators referred to in Article 81, Section VIII of the General provisions applicable to credit institution.
• The methodology and procedures used to identify, measure, supervise, limit, control, inform and reveal the different types of risk, as well as their modifications.
• The Models, parameters, scenarios, assumptions, including those relating to stress tests referred to in Annex 12-B of the General Provisions applicable to credit institutions, which are used to perform the assessment of Capital Sufficiency and that will be used to carry out the valuation, measurement and control of risks proposed by the unit for the comprehensive risk management which must be commensurate with the technology of the institution.
• Methodologies to identify, value, measure and control the risks of new operations, products and services that the Institution seeks to offer in the market.
• Corrective plans proposed by the CEO under the terms established in Article 69 of the General Provisions applicable to credit institutions.
• Technical evaluation of Comprehensive Risk Management’s aspects referred in Article 77 of the General Provisions applicable to credit institutions, published in the Official Gazette or Diario Oficial (second section) on December 2, 2005 and its presentation to the Board of Directors and the CNBV, as well as the report resulting from the technical evaluation carried out.
• Manuals for Comprehensive Risk Management, in accordance with the objectives, limitations and policies established by the Board of Directors referred in the last paragraph of Article 78 of the General Provisions applicable to credit institutions, published by the Official Gazette or Diario Oficial (second section) on December 2, 2005.
• The appointment or removal of the person responsible of the Comprehensive Risk Management Unit, which must be ratified by the Board of Directors.
• The methodology to estimate quantitative and qualitative impacts of the operative contingencies referred to in Article 74, section XI of the General Provisions applicable to credit institutions.

Inform the Board about:

• At least quarterly, report to the Board of Directors, the risk profile and the fulfillment of the capital estimate contained in the of the institution’s Adequacy of Capital Assessment, as well as the negative effects that may occur in the operation of the institution. Likewise, it shall inform the Board in the session immediately following, or in an extraordinary session if necessary, on failure to comply with the desired risk profile, risk exposure limits and risk tolerance levels, as well as, if the case, the capitalization plan referred to in Article 2 Bis 117c of the General Provisions applicable to credit institutions.
• The corrective measures taken, including those on the Capital Projections Plan and, if the case, the capitalization plan as provided in Article 69 of the General Provisions applicable to credit institutions.
• Inform the Board, at least once a year, on the outcome of testing the effectiveness of the Business Continuity Plan.

Review at Least Once a Year:

• Mechanisms for the implementation of corrective measures.
• Specific risk exposure limits and tolerance levels when the Board delegates powers for this purpose, as well as the liquidity risk indicators referred to in Article 81, Section VIII of the General Provisions applicable to credit institutions.
• The methodology and procedures to identify, measure, oversee, limit, control, inform and disclose the different types of risk to which the institution is exposed, as well as their changes.
• The Models, parameters, scenarios, assumptions, including those relating to stress tests referred to in Annex 12-B of the General Provisions applicable to credit institutions, used to assess capital adequacy and to carry out the valuation, measurement and control of risks proposed by the unit for the comprehensive risk management which must be commensurate with the technology of the institution.

Appoint or Remove:

• The person responsible of the Comprehensive Risk Management Unit, which must be ratified by the Board of Directors.

^*The Risk Policies Committee ensures, at all times, knowledge of all personnel involved in risk taking, of the global and specific limits for discretionary risks, as well as tolerance levels for non-discretionary risks.

Objective: Aims to appropriately compensate staff of the Institution, protecting the integrity, stability, competitiveness and financial soundness of the same, supporting GFNorte's Board of Directors in its functions relating to the Compensation System, through the approval of determinations in human resources subject and the establishment of a regulatory framework, undertaking implementation, maintenance and evaluation activities regarding the Compensation System.

Structure: According to the applicable regulation, the Human Resources Committee must be comprised by at least two Proprietary Board Members, of which at least one must be independent (who shall preside); the Responsible of the Comprehensive Risk Management; one representative of the finance planning or budget elaboration department; and the Internal Audit, which will have voice but no vote.

The Chairman, listening to the opinion of GFNorte’s CEO, may appoint alternate members when one member ceases to be part of this Committee.

Each member has the right for a vote, and resolutions must be approved by a majority vote of the attending members. In the event of a tie, the Chairman of the Human Resources Committee shall have the deciding vote.

*Thomas S. Heather Rodriguez is Chairman of the Committee since April 2024.

Sessions

Frequency: Quarterly, being free to meet more or less often, when the issues demand it.

Functions

• Propose for approval of the Board of Directors :
  • The compensation policies and procedures, consistent with reasonable risk taking, as well as any modifications made to them.
  • Employees or personnel who hold any position, mandate, commission or any other legal title, which will be subject to the paragraph of Compensation System related to risk taking.
  • The special cases or circumstances in which someone might exempt the application of approved compensation policies.

Compensation System

• Implement and maintain the Compensation System related to risk taking, which must consider the differences between the different administrative, control and business units as well as the risks inherent to the activities performed by people subject to the Compensation System related to risk taking. For this purpose, the Committee shall receive and consider the reports of the Unit for Risk Management and any other area that the same Committee deems appropriate, on the implications of risk policies and procedures for compensation.
• Inform all relevant staff, about policies and procedures of compensation, ensuring at all times the understanding by stakeholders regarding the methods for the determination, integration and delivery of their compensation, applicable risk adjustments, the deferral of extraordinary compensations and any other mechanisms applicable to their remuneration.
• Prior to the DMD of Human Resources proceeds to deliver the percentage of Deferred Compensation that corresponds to each employee subject to deferral system, the Human Resources Committee shall report the results of the evaluation exercise to
  • The Financial Group’s CEO: Results of risk analysis of Managing Directors under his charge before being presented to each of them.
  • The Chairman of the Board: Results of the risk analysis of the Financial Group’s CEO.
• Hiring, when deemed necessary, external consultants on compensation schemes and risk management, which contribute to design compensation schemes, avoiding any conflict of interest.
• Define and update the guidelines that frame the retention plan (in shares) for executives of the Institution subject to the Compensation System associated with risks, and to interpret, manage, modify and, where appropriate, propose to the Board the termination of the retention plan.
  • Take any necessary action for the effective and timely execution of the retention plan for officers subject to the Compensation System.
  • Report to the Board of Directors, when deemed appropriate on matters relevant to retention plan for officers subject to the Compensation System.
• Report to the Board of Directors at least semiannually, on the operation of the Compensation System, and any time when exposure to risk assumed by the Institution, administrative, control and business units or people subject to the Compensation System, could result in an adjustment to such Compensation System.

In the Extraordinary General Shareholders’ Meeting held on October 17, 2011, it was approved to create this Committee, in order to do so, Article Thirty-seven Bis-1 was included in the Corporate Bylaws.

On August 19, 2016, GFNorte’s Extraordinary General Shareholders’ Meeting approved the amendment to Article Forty-four of GFNorte’s Corporate Bylaws regarding the integration and operation of the Nominations Committee.

Structure: The Nominations Committee is comprised of at least seven members, who shall be part of the Board of Directors and of whom four must be Independent Members and one, the Chairman of the Board, who will preside the Committee.

Each member has the right for a vote, and resolutions must be approved by a majority vote of the attending members. In the event of a tie, the Chairman of the Nominations Committee shall have the deciding vote.

Sessions

• Frequency: At least once a year or when convened by the Chairman.

Functions

• Propose for approval by the Shareholders’ Assembly the appointment of the members of the Company’s Board of Directors, the financial entities or sub holdings.
• Elaborate an opinion regarding the persons who will hold the position of CEO at the Company, the financial entities and if the case, sub holdings, without prejudice to the faculties assigned to the Audit and Corporate Practices’ Committee in terms of Article Thirty-three, paragraph III, section d) of these Bylaws.
• Propose for approval by the Shareholders’ Assembly or by the Board of Directors, the compensation for the members of the Board of Directors and Committees of the Company, financial entities and sub holdings.
• Propose for approval by the Shareholders’ Assembly or by the Board of Directors, the removal of members of the Board of Directors of the Company, financial entities and sub holdings.

The operation of the Nominations Committee is subject to the policies and guidelines approved by GFNorte’s Board of Directors.

In the Ordinary General Shareholders’ Meeting held in July 2011, it was approved to constitute the following Regional Boards of the Company:

• Northern,
• Northwest,
• Metropolitan,
• Western and
• Peninsular.

Also, in the General Shareholders´ Meeting held in April 2013, it was approved the creation of the:

• Central Regional Board.

Objective: To give opinions and advice on trends and opportunities in their region, as well as those issues that the Board of Directors submit to their consideration and, it will function as an organism to reach the business community in each region.

Structure: It will be constituted by the number of members determined by GFNorte´s Chairman of the Board of Directors, who have the technical quality, honesty and satisfactory credit history, as well as extensive knowledge and experience in the financial, legal or administrative fields, to develop their activities in the respective regions.

The Members of each Regional Board are elected, and if the case, removed by the Chairman of the Board of Directors. The members remain in office for 2 years, with the possibility of being reelected for any number of times.

Sessions

• Frequency: At least once a year or when convened by GFNorte´s Chairman of the Board of Directors.

In the sessions, GFNorte’s officers related to particular regions, pointed out by the Chairman of the Board of Directors, are present.

Objective: To support Banorte’s Board of Directors in the definition and update of the Internal Control System’s (ICS) objectives and the guidelines for their implementation; as well as in its evaluation. To supervise that financial information and accounting are prepared in accordance with the guidelines, dispositions and applicable accounting principles, and will follow on the external and internal audit activities and internal comptrollership, informing the Board regarding the development of the aforementioned.

Structure: Comprised exclusively by Independent Members and for at least 3 and up to 5 Members designated by the Banorte’s Board of Directors, proposed by the Chairman of such body.

Sessions

Frequency: Whenever is needed.

Faculties

The Committee as the support government body to the Board of Directors, will have the faculty to comply with duties and perform the functions defined in the following operating rules

1. Request the opinion of independent experts in such cases where it is judged to be convenient, for the appropriate performance of their functions.
2. Have full availability of book, registers, facilities and the support of the employees’ entities under its responsibility.
3. Require involved officers of the financial entities under its responsibility, reports regarding the elaboration of financial and of any other type of information that it considers necessary for the execution of their duties.
4. Meet with the Board of Director, relevant GFNorte’s officers, internal comptroller, Internal and external auditor, authorities and investors.

Functions

The Committee, in the development of its activities, will stablish the necessary procedures for the general performance of its duties. In any case, Committee members shall take as a basis for their activities, information prepared by the Internal Comptroller, Internal and External Auditors as well as by the Management.

Below are the detailed functions by area:

Internal Control System

• Hold a permanent and updated register of the ICS objectives, guidelines for implementation as well as manuals considered relevant for the operation, which shall be elaborated by the responsible for the Internal Control functions.
• Review and oversee with the support of the responsible for the Internal Control functions that such relevant manuals comply with the ICS.
• Review together with the Management the relevant manuals previously refered to, as well as the Code of Conduct, at least once a year or when significant changes in the operation occur.
• Review along internal and external audit the implementation of the ICS, assessing its efficiency and effectiveness.
• Review the report the CEO shall present at least annually to the Board of Directors and the Committee regarding the performance of his activities for the duly implementations of the ICS, as well as its operation.
• Review the report that Internal Audit shall prepare regarding the follow-up on detected deficiencies or relevant deviation, so they can be timely restored.

Accounting and Financial Information

• Assist the Board of Directors in the revision of the annual and intermediate financial information and in the release process, relying on the Internal and External Auditors’ work.
• Oversee that the financial and accounting information is formulated in accordance with the applicable guidelines and dispositions, as well as with applicable accounting principles.
• Review significant accounting and reporting issues, including complex or unusual transactions, as well as professional opinions and recent regulations, and to understand their impact in the financial statements.
• Review with Management and the Internal and External Auditors, the audited annual financial statements, before their presentation to regulatory authorities.
• Review with Management and the Internal and External Auditors, the opinion of the internal accounting control, which shall be released every two years, before their presentation to regulatory authorities.
• Select and approve the hiring of the independent expert who will perform impairment testing of goodwill.
• Review the results of the goodwill impairment test.
• Prepare the internal policies aiming to establish guidelines and procedures related to the management and, if the case, destruction of the books, registers documents and other information related to accounting that have been or will be object of microfilm or recording.

Internal Comptroller

• Follow-up on the Internal Comptroller’s activities, keeping the Board informed of its performance.
• Review the report of management that the person responsible for the Internal Comptroller’s functions shall deliver to the Committee and the CEO at least twice a year.
• Review the reports presented by the Internal Comptroller on the results of the inspection visits carried out by supervising agencies.

Sales Practices

• Approve the appointment of the responsible person for oversee the compliance of applicable provisions on advised investment services, who shall comply with the requirements and functions established in the general provisions on investment services issued by SHCP.
• Review the report that the responsible for overseeing the compliance of applicable provisions on advised investment services, which will contain the main findings, and shall be presented to the Board through this Committee, as well as to the Commission at least twice a year.

Internal Audit

• Follow-up on the Internal Auditor’s activities, keeping the Board informed of its performance.
• Monitor the independence of the Internal Audit area with regards to the other business and administrative units. Any lack of independence must be reported to the Board.
• Approve the Bylaws of Internal Audit’s function as well as the applicable methodology and policies to review the quality of internal control of main operations, called Models of Risk Evaluation (MER).
• With the prior opinion of the CEO, to approve the annual work program of the Internal Audit area. If the case, amendments to the referred annual program should be presented for the approval of the Committee, in the next session.
• Review, based on reports from the Internal Audit area and the External Auditor, at least once a year or when required by the CNBV, that the Internal Audit program is carried out in accordance with appropriate quality standards in accounting matters and internal controls, and that the activities of the Internal Audit area are carried out effectively.
• Review the report prepared by the head of Internal Audit functions on the results of its management, at least every six months or as frequently as the Committee requires. The foregoing, notwithstanding that the head of Internal audit functions learns of, immediately, the detection of any deficiency or deviation identified in the exercise of their functions and that according to the Internal Control System is considered significant or relevant.
• Approve the hiring of service providers for the external evaluation of the quality of Internal Audit’s performance.
• Review the results of internal and external quality assessments carried out for Internal Audit’s functions and where appropriate, to follow-up on the implementation of certain recommendations.
• Review, at least annually, the organization’s structure, capabilities and the adequacy of resources allocated to the Internal Audit area for the performance of its functions and, where appropriate, approve actions required in order to ensure the greatest effectiveness in the fulfillment of its objectives and goals.
• Meet regularly with the Internal Auditor, without the presence of management for comments and observations on the progress of its work.

External Audit

• Follow-up on External Audit activities, keeping the Board informed of its performance.
• Monitor the independence of the External Auditors obtaining their statements in this regard and evaluating the nature of the additional services provided.
• Review the External Auditor’s report on elements to be considered to define the scope of their audit and develop a work plan.
• Review External Audit’s detailed work plan, including the hours assigned to each job and its cost.
• Evaluate the performance of the External Auditor and the quality of his opinion and reports prepared in compliance with the applicable general provisions, including comments made by the CNBV, and inform the Board of Directors of the results.
• Meet periodically with the External Auditor, without the presence of management, for comments and observations on the progress of its work.

Credit

• Review the CEO’s report which shall be prepared at least quarterly to the Board, the Risk Committee and the Audit committee regarding the detected deviations of the objectives guidelines, policies, procedures, strategies and current provisions on credit.
• Review the report internal audit of credit prepare shall prepare at least once a year and which will be presented to the Board, the Risk Committee and the Audit Committee, regarding its findings.
• Approve the annual loan review and the simple of clients to be included in each entity’s review.
• Check the results report on the loan review.

Comprehensive Risk Management

• Review the Internal Audit report with the results of the audit on the Comprehensive Risk Management, which be carried out at least once a year or at the end of the fiscal year. This report shall be presented to the Board, the Risk Committee and the CEO and be submitted to the CNBV.
• Select and approve the hiring of the suppliers of technical assessment on Comprehensive Risk Management matters, according to internal policies for suppliers hiring.
• Review the report of the technical assessment on Comprehensive Risk Management matters, which will be carried out at least every two fiscal years and shall be presented for approval to the Risk Committee and the Board, and be submitted to the CNBV.

Derivatives

• Release a document in which the Committee expresses that it complies with the requirements set forth in the rules to carry out derivative transactions issued by Banco de Mexico, as a necessary element to manage the authorization to hold proprietary derivative transactions.
• Select and approve the hiring of the independent expert to valid valuation and risk measurement models according to internal policies for suppliers hiring.
• Review the results of the valuation and risk measurement models approval, which shall be made at least once a year by independent experts.

Commission Agents

• Approve the hiring of commission agents to carry out an operative process or data base management that may be executed partially or totally abroad or by foreign residents.
• Review the performance report of commission agents to be delivered to the Board, the Audit Committee or CEO, as well as the compliance of provisions related to such service.
• Review the result of the audits carried out every two years to verify the compliance with Chapter XI of the hiring of commission agents if the CUB, as well as what is set forth in Annexes 52 and 58 accordingly.

Money Laundering and Terrorism Financing

• Approve, by proposal of the Communication and Control Committee, the policies and procedures Manual to prevent money laundering and terrorism financing, as well as any amendment to this document.
• Review the result of the work of Internal Audit or independent external auditors of assessing and ruling annually the compliance of Provisions set forth in articles 115 of the LIC and 87-D and 95-Bis of the LGOAAC. This revision shall be presented to the CEO and Communication and Control Committee, and be submitted to the CNBV.

Online Banking

• Review the reports of incidents of Online Banking, which shall be presented to the Audit and Risks Committees in the immediate following session of the event involved, in order to adopt measures to prevent and avoid these incidents again.
• Review the reports to be presented to the Audit and Risks Committee, each time these meet; therefore correlating to information from clients' claims with fraud event.

Autocorrection Program

• Provide an opinion on the autocorrection programs to be submitted for authorization of the CNBV, CONDUSEF, or IPAB, when the institution, in the development of its activities, or the Audit Committee, as a result of its functions, detect irregularities or non-compliance of what is set forth in the LIC and other applicable regulations.
• Autocorrection programs shall be signed off by the Chairman of the Committee and be presented to the Board in the immediate following session of the request for authorization presented before CNBV, CONDUSEF or IPAB, accordingly.
• Follow up on the implementation of the authorized autocorrection programs and inform the advance, to the Board, CEO, CNBV, CONDUSEF or IPAB, accordingly.

^*Other duties and responsibilities necessary for the performance of its functions.