Source - RNS
RNS Number : 3861K
Grupo Clarin S.A.
10 April 2018
 

 

 

 

GRUPO CLARIN S.A.

Grupo Clarín Responds Shareholder Information Request

 

 

Buenos Aires, Argentina, April 10, 2018, 

 

Grupo Clarín S.A. ("Grupo Clarín", "GCLA" or "the Company" - BCBA: GCLA; LSE: GCLA) announced today that on April 9, 2018, the Company informed the Argentine Securities Commission and the Buenos Aires Stock Exchange that it had exchanged notes with a shareholder in connection with the agenda of the Ordinary Annual Shareholders' Meeting to be held on 19 April 2018.

 

Attached as Exhibit A is a free translation of the Company's response.

 

Enquiries:

 

In Buenos Aires:

Agustín Medina Manson/Patricio Gentile

Grupo Clarín

Tel: +5411 4309 7215

Email: [email protected] 

 

In London:

Alex Money

Jasford IR

Tel: +44 20 3289 5300

Email: [email protected] 

 

In New York:

Melanie Carpenter

I-advize Corporate Communications

Tel: +1 212 406 3692

Email: [email protected]

 

 



EXHIBIT A

 

FREE TRANSLATION                                                                                                   

 

Buenos Aires, 9 April 2018

 

To the Shareholder of

Grupo Clarín S.A.

National Social Security Administration (ANSES)

Fondo de Garantía de Sustentabilidad

By Hand

Attn: Mr. Ignacio Álvarez Pizzo

 

Dear Sir,

 

I, Agustín Medina Manson, in my capacity as Person in Charge of Relations with the Market of Grupo Clarín S.A. (hereinafter, interchangeably, the "Company" or "Grupo Clarín") hereby address You in response to your request for information, issued by e-mail dated 26 March 2018.

 

Pursuant to the General Companies Law No. 19,550, we hereby respond to your request as follows:

 

1)   Detail of the shareholder composition as of the date hereof. (Please do not include the shareholder registry of Caja de Valores; instead plese include a summary chart that specifies the percentages corresponding to the controlling shareholder and the float, by class of shares, total votes and total shares).

 

As reflected in the Annual Financial Statements of the Company as of 31.12.2017, its equity capital is of Ps. 106,776,004 represented by: 28,226,683 common, nominative, non-endorsable Class "A" shares, with a par value of Ps. 1 and entitled to five votes per share; 69,203,544 common, book-entry Class "B" shares, with a par value of Ps. 1 and entitled to one vote per share; and 9,345,777 common, nominative, non-endorsable Class "C" shares, with a par value of Ps. 1 and entitled to one vote per share.

 

The Company keeps a record of the Class A and Class C Shares.  According to that registry, GC Dominio S.A., controlling shareholder holds 28,226,683 common, nominative, non-endorsable Class "A" shares, with a par value of Ps. 1 and entitled to 5 votes per share, representing 26.44% of the equity capital and 64.24% of the votes of the Company.  GS Unidos, LLC holds 9,345,777 common, nominative, non-endorsable Class "C" shares, with a par value of Ps. 1 and entitled to one vote per share, representing 8.75% of the equity capital and 4.25% of the votes of the Company.

 

The Registry of Class "B" shares is kept by Caja de Valores S.A. The total number of Class "B" shares is 69,203,544 shares with a par value of Ps. 1 and entitled to 1 vote per share, of which 1,485 are treasury shares.  The remaining 69,202,059 Class "B" shares represent 64.81% if of the equity capital and 31.5% of the votes of the Company.

 

2)   Executed copy of the Minutes of the Board of Directors that calls an Extraordinary Shareholders' Meeting.

 

We hereby state for the record that the Board of Directors has called an Ordinary Shareholders' Meeting and not an Extraordiary Shareholders' Meeting as indicated in the request. The minutes of the Board of Directors that calls an Ordinary Shareholders' Meeting, with due identification of the signors, was made available to the general public through the Autopista de Información Financiera ("AIF") [online electronic disclosure system used by public companies] on 20.3.2018 under ID No. 4-563818-D. Notwithstanding the above, we enclose herein copy of such minutes.

 

3)   Current Composition of the Board of Directors (directors and alternate directors) with the dates on which they were appointed, and inform on the term of their office.

 

According to the minutes of the shareholders' meeting held on 27.04.2017 (ID 4-481778-D) and minutes of the meeting of the Board of Directors held on 28.04.2017 (ID 4-480331-D) and minutes of the meetings of the Board of Directors considering the resignation of certain members of the Board on 10.11.2017 (ID 4-537164-D) and 27.12.2017 (ID 4-548573-D), the current composition of the Board of Directors of the Company is the following:

 

Chairman: Jorge Carlos Rendo; Vice-Chairman: Héctor Mario Aranda; Directors: Horacio Eduardo Quirós, Martín Gonzalo Etchevers, Ignacio Rolando Driollet, Francisco Iván Acevedo, Lorenzo Calcagno, Alberto César Menzani, Gonzalo Blaquier, Sebastián Salaber.  Alternate Directors: Antonio Aranda, Juan Ignacio Giglio, Carlos Rebay, Luis Germán Fernández, Francisco Saravia and Gervasio Colombres. The terms of office of all of the abovementioned directors and alternate directors last one year.

 

4)   With respect to the following points of the agenda, we request:

 

a.   (Point 2) Consideration of the documents set forth under Section 234, subsection 1 of Law No. 19,550 and related laws, corresponding to fiscal year No. 19 ended 31 December 2017.

 

If such documents have not been published on the AIF, we ask that you provide a copy of the accounting documents set forth under Section 234 of Law No. 19,550 approved and signed by the Board of Directors, Syndics and External Auditor, as well as any other supporting information that may accompany the point.

 

As indicated by You, the accounting documents corresponding to the fiscal year No. 19 ended on 31.12.17 is available to the shareholders on AIF (ID 4-560903-D dated 9.03.18). We hereby also state for the record that they are available on the Company's website (www.grupoclarin.com.ar) under the tab "Investor Relations".

 

b.   (Point 3)  Consideration of the performance of the members of the Board of Directors.

 

Information referring to the performance of the Board of Directors with specific individual identification of the members.

 

Certain members of the Board of Directors carried out technical administrative functions.  These are Messrs. Jorge C. Rendo, Horacio E. Quiros, Alejandro A. Urricelqui-until 28 April 2017-and  Pablo C. Casey until the date of his resignation.  In addition, Messrs. Francisco Iván Acevedo and Martín G. Etchevers carried out technical administrative functions as from the date of their appointment as Directors.

 

The description of the technical administrative functions carried out by Messrs. Rendo, Urricelqui and Casey has been included in the responses to the requests formulated by ANSES on 15 April 2014, 15 April 2015, 20 April 2016 and 17 April 2017.  Notwithstanding that, and as we did when we responded to the request made in April 2017, we include it below:

 

Mr. Jorge Carlos Rendo is the Corporate Director of External Relations.

 

His functions as Corporate Director of External Relations consist in establishing, developing and maintaining relationships with the Company, governmental agencies, professional associations, business chambers, companies, universities, NGOs, National and International Press and Communications entities; external professional groups.  He is responsible for the management of the Company's reputation.  He develops plans, programs and procedures aimed at strengthening the relations of the companies of Grupo Clarín with the community, businesses, governmental agencies and other public and private entities.  He is responsible for the institutional relations of Grupo Clarín and of all its companies with the National Government, Provincial and municipal Governments, decentralised agencies, business entities, public welfare entities, national and international Press organisations, companies and individuals.  He is also in charge of the design of Corporate Social Responsibility policies and the design and implementation of the corporate communications strategy to develop the image, the brands and the relations of the company with society in the national and international fields, guaranteeing a clear identity before the various interest groups.

 

Mr. Alejandro Alberto Urricelqui was the Corporate Financial Director responsible for the financial direction of Grupo Clarín until the date of his resignation.  As such, he supervised all areas of the Finances of the companies that comprise Grupo Clarín, directed the financial planning and led all financial aspects of the operations of the company as a whole.  He developed investment policies, oversaw the financial evolution of businesses, the creation of new companies, the solicitation of partners and investors and the relations with national and international sources of financing, banks, stock exchanges and national and international private investors.  The Corporate Financial Director advised businesses about the way to accomplish their objectives and to create investment capital.  He also managed financing through equity and loans, used financial models aimed at predicting results, negotiated and structured management information to make financial decisions, made contact with the parties involved in transactions and participated in negotiations, assessed financial risks.  In his capacity as Corporate Financial Director, he intervened in discussions about tax and insurance matters; interacted with investors, accountants, lawyers, financial and tax experts, regulating agencies; decided with respect to proposals of competitive offers and formal business presentations; identified mergers and acquisitions, and additionally managed and invested monetary funds.


Mr. Pablo César Casey was the Institutional Relations Manager until the date of his resignation.  As such, he had among his functions the planning, development and implementation of institutional relation strategies.  To that end, he developed plans, programs and procedures aimed at strengthening the relations of the companies of Grupo Clarín with the community, businesses, governmental agencies and other public and private entities.  He promoted and maintained the management of agreements at the institutional level.  He analysed the institutional commitments created for the companies pursuant to national and international agreements and acted to care for their due compliance.

 

He participated and collaborated in institutional activities of the Company, the Board of Directors and other upper-level bodies of the companies.

 

He carried out other related functions at the request of the Company's Management, always protecting the corporate interest of the Company.

 

He represented the Company institutionally before business entities related with the activity of the Company and its subsidiaries.

 

Horacio E. Quirós is the Director of Corporate Affairs.

 

As Director of Corporate Affairs he is responsible for the compliance by the Company and its subsidiaries, of all corporate aspects that require sound management and corporate governance.  He ensures compliance with all laws, procedures and riles that govern the creation of companies and the fulfilment of their corporate obligations.  He maintains fluid contact with members and authorities of corporate oversight agencies in order to fulfil his duties.  In addition, he maintains contact with lawyers, auditors, syndics and supervisory commissions.  He also participates in the boards of directors of several of the Company's subsidiaries and presides over some of them.  He advises and cooperates in the search for the greatest functional coherence of the organizational structure, seeking to ensure an effective articulation between each of the corporate areas, and their relationship and support of the business units.  He leads or participates in special projects.

 

Francisco Iván Acevedo is the Director of Corporate Control.

 

As Director of Corporate Control, his main functions involve general oversight at the corporate level, the management control of businesses, of the consolidation and the review process for annual budgets, the preparation of financial statements, for their presentation to the various company organs, the execution of internal audit reviews, of the studies of investment projects, of the preparation of macro economic reports, the creation of policies and procedures and the proposals and implementation of improvements in processes.

 

Martin G. Etchevers is Manager of External Communications.  Among his functions are the strategic planning and implementation of the corporate communication of Grupo Clarín.  Thus, he develops plans and programs to strengthen the reputation and image of the company and its brands, both nationally and internationally.  He is also responsible for the representation of Grupo Clarín before professional chambers and media companies. He also promotes and maintains institutional links with various companies, the media, government institutions and society as a whole.

 

c.   (Point 4)  Consideration of the compensation of the members of the Board of Directors for the fiscal year ended 31 December 2017. Authorisation to the Board of Directors to pay advances on compensation for fiscal year 2018, subject to the decision of the shareholders at the next Shareholders' Meeting at which compensation of the members of the Board of Directors is considered;

 

We request information with respect to the proposal relating to fees to the Board of Directors for the year 2017.  We ask that you inform the aggregate amount that is proposed as fees and the amount proposed for technical administrative functions.  Also, inform how many members of the Board of Directors collect fees and how many collect compensation for technical administrative tasks.  Also, if the amount of fees for the Board of Directors includes fees for the members of the Audit Committee.  If so, report hoy many collect additional fees as members of such committee.

 

We ask that you inform if any Directors are also under an employment relationship, and if so, how many and what is the amount of their salary compensation.

 

In addition, we ask that you inform the amounts paid as fees to the Board of Directors and for technical administrative functions for the years 2014, 2015 and 2016 with the same breakdown indicated above.

 

Finally, we ask that you confirm if the aggregate amounts approved for the years 2016, 2015 and 2014 were Ps. 12,610,000, Ps. 9,700,000 and Ps. 7,306,854, respectively.

 

All this for the purpose of analysing such amounts in relation with market values and the limitations set forth under Article 261 of the General Companies Law.

 

With respect to the payment of advanced fees, inform the breakdown of the amount proposed for each director and each concept as well as any other supporting information that may be added to this point.

 

The proposal for advanced fees for the year 2018 is estimated at Ps. 19,284,000.

 

As provided under Section 75 of Decree No. 1023/2013 and Interpretative Criterion No. 45, the Company has informed the CNV through the AIF as restricted access information, the individual compensation of Directors and syndics.

 

The Directors who are members of the Audit Committee do not receive additional compensation to perform their functions as members of such committee.

 

Messrs. Jorge C. Rendo and Horacio E. Quirós are employees of the Company and as such, they are compensated with salaries for the tasks they carry out with the Company and also receive compensation as members of the Board of Directors. Messrs. Alejandro A. Urricelqui and Pablo C. Casey were employees of the Company and as such, they were compensated with salaries for the tasks they carried out with the Company and also received compensation as members of the Board of Directors.

 

Messrs. Francisco Iván Acevedo and Martín G. Etchevers, who became full members of the Board of Directors during the course of this year are also employees of the Company and are compensated with salaries for the tasks they carry out with the Company and also receive compensation as members of the Board of Directors.

 

The Chart of Allocations to the Board for the fiscal year ended on 31.12.2017 was submitted to the Argentine Securities Commission through AIF (ID 4-563607-D dated 20 March 2018).

 

As reflected in the respective minutes of the shareholders' meetings that consider the financial statements corresponding to fiscal years 2016, 2015 and 2014, made available to the Shareholders on the AIF under ID Nos. 4-481778-D, 4-386653-D and 4-303498-D, respectively, the amounts paid to Directors have been the following:

 

Shareholders' Meeting held on 28 April 2015 - Fiscal Year ended 31.12.2014: All directors of the Company received fees for their work as Directors for an aggregate amount of Ps. 7,306,854 according to the following detail: (i) Directors appointed by Class "A": Ps. 4,706,284, (ii) Directors appointed by Class "B": Ps. 1,403,142, and (iii) Directors appointed by Class "C": Ps. 1,197,428.  In addition, among all directors, Messrs. Jorge C. Rendo, Alejandro A. Urricelqui, Pablo C. Casey and Saturnino Herrero Mitjans carried out technical administrative functions as employees of the Company, and received compensation in 2014 in an aggregate amount of Ps. 14,957,642, all as duly reported to the CNV pursuant to applicable laws.

 

Shareholders' Meeting held on 25 April 2016 - Fiscal Year ended 31.12.2015: All directors of the Company received fees for their work as Directors for an aggregate amount of Ps. 9,700,000 according to the following detail: (i) Directors appointed by Class "A": Ps. 6,096,000, (ii) Directors appointed by Class "B": Ps. 1,800,000, and (iii) Directors appointed by Class "C": Ps. 1,800,000.  In addition, among all directors, Messrs. Jorge C. Rendo, Alejandro A. Urricelqui, Pablo C. Casey and Horacio E. Quirós carried out technical administrative functions as employees of the Company, and received compensation in 2015 in an aggregate amount of Ps. 14,682,498.

 

Shareholders' Meeting held on 27 April 2017 - Fiscal Year ended 31.12.2016: All directors of the Company received fees for their work as Directors for an aggregate amount of Ps. 12,610,000 according to the following detail: (i) Directors appointed by Class "A": Ps. 7,930,000, (ii) Directors appointed by Class "B": Ps. 2,340,000, and (iii) Directors appointed by Class "C": Ps. 2,340,000.  In addition, among all directors, only Messrs. Alejandro A. Urricelqui, Pablo C. Casey, Horacio E. Quirós and Jorge C. Rendo carried out technical administrative functions as employees of the Company, and received compensation in 2016 in an aggregate amount of Ps. 22,480,861.

 

We note that Directors who are employees of the Company have been compensated with salaries (not directors' fee advances) in aggregate until 31.12.2017, in the amount of Ps. 28,711,668.

 

With respect to your concern about the amounts advanced during fiscal year 2017, the amount was of Ps 15,132,000.

 

d.   (Point 5)  Consideration of the performance of members of the Supervisory Committee

 

Information relating to the performance of the Supervisory Committee with express individualisation of its members.

 

The Supervisory Committee of Grupo Clarín S.A. is composed by the members Messrs. Hugo E. López, Carlos Di Candia and Pablo San Martín, appointed at the General Annual Ordinary Shareholders' Meeting of the Company held on 27 April 2017.  As presented in our response to your request relating to the annual shareholders' meeting held in 2017, the duties of the syndics are set forth under the General Companies Law under Section 294.  In connection with the abovementioned duties, and as stated in response to the request submitted by ANSES on 15 April 2014, 2015, 20 April 2016 and 18 April 2017, the members of the Supervisory Committee during fiscal year 2017 have: (i) overseen the management of the Company, examining the books and such documents as they have judged convenient, at least once every three (3) months; (ii) verified in the same way and with the same regularity the cash, cash equivalents and securities held by the Company as well as its obligations and their fulfilment; (iii) attended all the meetings of the Board of Directors and Shareholders' Meetings; (iv) controlled the creation and maintenance of the Directors' guarantees; (v) presented quarterly and annual reports on the economic and financial condition of the Company, and given their opinion on the Board's annual report, the inventory and financial statements; (vi) overseen that the corporate bodies have duly complied with the law, bylaws and shareholders' decisions.

 

e.   (Point 6)  Consideration of the compensation of the members of the Supervisory Committee for the fiscal year ended 31 December 2017. Authorisation to the Board of Directors to pay advances on compensation for fiscal year 2018, subject to the decision of the shareholders at the next Shareholders' Meeting at which compensation of the members of the Supervisory Committee is considered

 

With respect to the proposal of fees for the Supervisory Committee, we request the breakdown of the proposed amount by syndic and the amount advanced by syndic during the year 2017. In addition, we ask that you confirm if the amounts approved for the years 2016, 2015 and 2014 were of Ps. 1,650,000, Ps. 700,000 and Ps. 600,000 respectively.

 

With respect to the payment of advanced fees, inform the breakdown of the amount proposed for each director and each concept as well as any other supporting information that may be added to this point.

 

The proposal for advanced fees for the year 2018 is estimated at Ps. 774,000 for each member of the Supervisory Committee.

 

As provided under Section 75 of Decree No. 1023/2013 and Interpretative Criterion No. 45, the Company has informed the CNV through the AIF as restricted access information, the individual compensation of Directors and syndics.

 

The proposal for advances during fiscal year 2017 is estimated at Ps. 660,000 for each member of the Supervisory Committee.

 

As reflected in the respective minutes of the shareholders' meetings held in 2016, 2015 and 2014, made available to the Shareholders on the AIF under ID Nos. 4-481778-D, 4-386653-D and 4-303498-D, respectively, the amounts paid to the Members of the Supervisory Committee have been the following:

 

Shareholders' Meeting held on 28 April 2015 - Fiscal Year ended 31.12.2014. Pesos three hundred twenty five thousand (Ps. 325,000) to each member. Total amount: Ps. 975,000

 

Shareholders' Meeting held on 25 April 2016 - Fiscal Year ended 31.12.2015. Pesos four thousand twenty three thousand (Ps. 423,000) to each member. Total amount: Ps. 1,269,000

 

Shareholders' Meeting held on 27 April 2017 - Fiscal Year ended 31.12.2016. Pesos five hundred fifty thousand (Ps. 550,000) to each member. Total amount: Ps. 1,650,000, which matches the amount indicated by you.

 

The fee advance proposal approved for 2017 was of Ps. 660,000 for each member of the Supervisory Commission.

 

f.    (Point 7) Consideration of the application of the Company's Retained Earnings as of 31 December 2017, which are of Ps. 851,733,740. The Board proposes the following allocation: i) To increase in the existing reserve for future dividends, in the amount of Ps. 200,000,000, ii) to increase the reserve to ensure liquidity of the Company and its subsidiaries in the amount of: Ps. 150,000,000 and iii) to increase the reserve for illiquid results in the amount of Ps. 501,733,740.

 

We ask that you confirm in the proposal that will be submitted to consideration at this shareholders' meeting is the one that is specified in the corresponding point of the Agenda or if it will be amended.  All this in order to assess its viability.

 

In connection with the reserve for future dividends, we ask that you inform the grounds of the proposal and its reasonableness, as well as any other information that you deem relevant on this point.  All this in order to assess the convenience of this allocation instead of proposing the distribution of cash dividends. In addition, we ask that you indicate the time when you estimate that the reserve will be disaffected in order to effectively distribute dividends.

 

Also, inform if there is an estimated timeline for payment that limits the amount or term of the allocation.

 

We also ask for a detail of the evolution of the Reserve for Future Dividends.  Specify its current composition, the date on which it was created and its latest movements.

 

In connetion with the three reserves to which you intend to allocate the results of the year, we ask that you specify the reason and convenience of such allocation clearly and in detail, expressing if such allocation is reasonable and whether or not it responds to a prudent administration, as set forth under Articles 66.3 and 70 of the General Companies Law.  In addition, we ask that you provide a detail of the evolution of such reserves.  Specify their current composition, the date on which they were created and their latest movements.

 

In the first place, we note that the Board of Directors' proposal that will be submitted to the consideration of the shareholders at this meeting will be the one that is specified in the corresponding point of the agenda, and the shareholders will be the ones who will decide on the allocation of the retained earnings as of the end of the year 2017.

 

The Company is a holding company, whose individual operations, as shown in the Statement of Cashflows included in the financial statements of the Company, do not generate funds but instead consume cash. Its results are originated primarily as a consequence of the operations of its subsidiaries, and therefore its liquidity depends, among other things, on the distribution of dividends by the companies in which Grupo Clarín S.A. participates-which have to attend to their investment needs and interest payments on their indebtedness-, on contribution that other subsidiaries may require, and on the cashflows of the operating and financial activities expected for the future.  Media companies face the challenge of digital transformation and the development of a new business model without compromising their journalistic independence and the quality of their content within a mature market.  In the past, the subsidiaries of Grupo Clarín that participate in this business have required financial assistance and may require it in the future in order to carry out that transformation.  In addition, not all results generated by its subsidiaries were liquid results.

 

As a result of the above, the proposal of the Board of Directors for the allocation of Retained Earnings as of 31 December 2017, between the Optional Reserve for Future Dividends, the Reserve to Ensure Liquidity of the Company and its Subsidiaries and the Reserve for Illiquid Results, was based on an estimation of the liquidity at the disposal of the Company, considering the distribution of dividends proposed by each of the Boards of Directors of the companies in which Grupo Clarín participates, the cashflows from operating activities and from financing expected for the future.

 

That is why the Board of Directors of the Company considers that the proposed allocation is reasonable and follows a criterion of prudent management of contingencies and level of liquidity that is adequate to its operations and its structure as a holding company.

 

In connection with the timing of the release of reserves, it will depend of the decision that the shareholders' may adopt at a shareholders' meeting, Consequently, to date there is no estimated payment schedule.

 

The current composition of the Reserve for Future Dividends is of Ps. 1,071,751,261. It was created at the shareholders' meeting held on 26 April 2012.  The composition of the Reserve to Ensure Liquidity of the Company and its Subsidiaries as of 31.12.2017 is of Ps. 390,090,541.  It was created at the shareholders' meeting held on 27 April 2017. The amount of the Reserve for Illiquid Results as of 31.12.2017 is of Ps. 257,959,160.  It was created at the shareholders' meeting held on 26 April 2012.

 

The evolution of the reserves has been as follows:



Reserve for Future

Dividends

Reserve to Ensure

Liquidity of Company

and Subs.

Reserve for

Illiquid Results






Shareholders' Meeting of

26/4/2012



694,371,899

Shareholders' Meeting of

25/4/2016

1,584,929,369



Shareholders' Meeting of

27/4/2017

1,000,000,000

1,050,041,832


Spinoff of Balances

1/5/2017

-1,813,178,108

-659,951,291

-436,412,739

Total as of 31.12.2017


1,071,751,261

390,090,541

257,959,160

 

g.   (Point 8) Appointment of the members and alternate members of the Board of Directors;

 

We ask for information relating to the proposal for the appointment of the members of the Board of Directors and the duration in their respective positions.

 

To date the Company has not received any proposal from any shareholder with respect to the appointment of the members and alternate members of the Board of Directors. The term of office is one year.

 

h.   (Point 9) Appointment of the members and alternate members of the Supervisory Committee;

 

We ask for information relating to the proposal for the appointment of the members of the Supervisory Committee and the duration in their respective positions.

 

To date, the Board has not received any proposal from any shareholder with respect to the appointment of the members and alternate members of the Supervisory Committee. The term of office is one year.

 

i.    (Point 10) Approval of the annual budget of the Audit Committee;

 

We request the proposal for the budget of the Audit Committee for the year 2018.  In addition, we ask that you inform the real amount executed for this purpose in fiscal years 2017, 2016, and 2015. Finally, confirm if the amounts approved for the last three years were Ps. 800,000, Ps. 700,000 and Ps. 600,000.

 

The Board of Directors has proposed that the amount of the annual budget of the Audit Committee for fiscal year 2018 be of Ps. 850,000 (ID No. 4-563818-D dated 20 March 2018).

 

We inform that the amounts of the budget of the Audit Committee duly approved by the shareholders at the shareholders' meetings held in 2015 (year 2014), 2016 (year 2015) and 2017 (year 2016), uploaded onto the AIF under ID Nos. 4-303498-D, 4-386653-D and 4-481778-D, respectively, were fully executed and the amounts were those stated in your note.

 

j.    (Point 11) Consideration of the fees of the External Auditor for the fiscal year ended 31 December 2015;

 

Inform on the proposal of the compensation payable for the audit of the financial statements corresponding to the year 2017, specifying in there were any changes in the tasks performed compared to those performed with respect to the financial statements of the previous year.  If there was a substantial increase, please explain the reasons for such increase.

 

In addition, we ask that you confirm the if the amounts approved for the Years 2016, 2015 and 2014 were Ps. 2,221,000, Ps. 2,118,000 and Ps. 1,579,600, respectively.

 

The proposed compensation to the external auditor for the audit of the financial statements for the year 2017 is of Ps. 2,395,000.

 

There was no change with respect to the tasks performed on the financial statements of the previous year.  Below we inform the tasks included in the compensation indicated above:

 

-              the issuance of its limited review report on the financial statements, both individual and consolidated, for the interim periods ended 31 March, 30 June and 30 September of each year;

-              the issuance of its audit report on the individual and consolidated financial statements as of 31 December of each year;

-              the issuance of its audit reports on the consolidated financial statements issued in the English language, to be filed with the LSE as of 31 December of each year.

 

The amounts for the years 2016, 2015 and 2014 that you state were the ones that were duly approved.

 

k.   (Point 12) "Appointment of the Company's External Auditor".

 

We request the proposal relating to the appointment of the Certifying Accountant for the year 2018.

 

The Board of Directors of the Company has decided to propose to the Shareholders that the firm Price Waterhouse & Co. SRL continue as the Company's External Auditors. The certified public accountants Carlos Alberto Pace and Alejandro Javier Rosa, both belonging to the firm Price Waterhouse & Co. SRL (PWC) will act as Auditor and Alternate Auditor, respectively.

 

We state for the record that this response, together with your request, shall be made available to the general public through AIF and the Buenos Aires Stock Exchange.

 

We are at your disposal to make any clarifications that you may deem relevant.

 

Sincerely,

 

/s/ Agustín Medina Manson

Representative of Relations with the Market

 


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