13 Apr 2021 15:33
GRUPO CLARIN S.A.
Grupo Clarín Responds Shareholder Information Request
On 12 April 2021, Grupo Clarín S.A. (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 30 April 2021.
Attached as Exhibit A is a free translation of the Company's response.
Enquiries:
In Buenos Aires:
Samantha Olivieri / Valentina López
Grupo Clarín
Tel: +5411 4309 7215
Email: investors@grupoclarin.com
In London:
Alex Money
Jasford IR
Tel: +44 20 3289 5300
Email: alexm@jasford.com
In New York:
Melanie Carpenter
I-advize Corporate Communications
Tel: +1 212 406 3692
Email: clarin@i-advize.com
EXHIBIT A
FREE TRANSLATION
Buenos Aires, 12 April 2021
To the Shareholder of
Grupo Clarín S.A.
National Social Security Administration (ANSES)
Fondo de Garantía de Sustentabilidad
By Hand
Attn: Coordinator of Corporate Affairs Mrs. Paola Rolotti
Dear Madam,
I, Jorge C. Rendo, in my capacity as President 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 31 March 2021.
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 include detail of the shareholder registry, specifying the percentages corresponding to each shareholder with more than 5% participation, per class of shares; indicating the number of votes and the number of shares.
GC Dominio S.A. | 28,226,683(*) | Class "A" common, nominative, non-endorsable shares | 26.44% | 64.24% |
Anses (FGS) | 9,609,365(**) | Class "B" book-entry shares | 9.00% | 4.37% |
ELHN Grupo Clarín New York Trust | 28,377,302 (**) | Class "B" book-entry shares | 26.58% | 12.92% |
HHM Grupo Clarín New York Trust | 12,446,303 (**) | Class "B" book-entry shares | 11.66% | 5.67% |
GS Unidos LLC | 9,345,777 (*) | Class "C" common, nominative, non-endorsable shares | 8.75% | 4.25% |
Remainder of Class B shares | 18,770,574(***) | Class "B" book-entry shares | 17.58% | 8.54% |
(*) According to Registry of common, nominative, non-endorsable Class A and C shares carried by the Company.
(**) According to certificate issued by Caja de Valores S.A. delivered to the Company.
(***) The registry of Class B common book-entry shares is carried by Caja de Valores S.A.
(****) Difference due to rounding.
2) Executed copy of the Minutes of the Board of Directors that calls an Ordinary and Extraordinary Shareholders' Meeting.
The minutes of the Board of Directors that calls an Ordinary and Extraordinary 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] under ID No. 2726159.
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 for the appointment of authorities on 30 April 2020 (ID 2608102), minutes of the meeting of the Board of Directors at which positions were allocated, held on the same date (ID 2605786), the current composition of the Board of Directors of the Company is the following:
Chairman: Jorge Carlos Rendo; Vice-Chairman: Héctor Mario Aranda; Directors: Felipe Noble Herrera, Alma Rocio Aranda, Horacio Ezequiel Magnetto, Francisco Pagliaro, Lorenzo Calcagno, Andrés Riportella, Horacio Eduardo Quirós and Ignacio Rolando Driollet. Alternate Directors: Francisco Iván Acevedo, Martín Gonzalo Etchevers, Patricia Miriam Colugio, Alberto Pedro Marina, Eugenio Eduardo Sosa Mendoza, Marcelo Fernando Boncagni, Carlos Rebay, Luis Germán Fernández; Lucas Puente Solari and Alfredo Enrique Kahrs.
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:
(Point 2) Consideration of the documents set forth under Section 234, subsection 1 of Law No. 19,550 and related laws, corresponding to economic year No. 22 ended 31 December 2020.
Notwithstanding the fact that the accounting documents corresponding to the economic year ended on 31 December 2020 are available to the shareholders on AIF under ID No. 2721639 and in the Company's website (www.grupoclarin.com.ar) under the tab "Investor Relations - Financial Statements", attached is a copy in pdf format of the accounting documents executed by the President of the Board of Directors, President of the Supervisory Commission and External Auditor and the digital legalization of the Professional Counsel of Economic Sciences.
We confirm that the financial statements corresponding to 31 December 2020 that are submitted to the consideration of the shareholders are expressed in constant currency as of that date. For the restatement, [the Company] used the Consumer Price Index (CPI) published by the INDEC, as set forth under note 2.1.1 to the parent-company only financial statements. The Company has presented such financial statements in accordance with IAS 29 (Financial Reporting in Hyperinflationary Economies) and pursuant to CNV Resolution No. 777/18 (published in the Official Gazette on 28 December 2018).
(Point 3) Consideration of the performance of the members of the Board of Directors.
The composition of the Board of Directors of the Company is the one set forth in our response to point 2, above.
In light of the impact of the pandemic caused by the spread of COVID-19, the macroeconomic variables continued to deteriorate together with a profound deceleration and recession of the national economy.
Even though audio-visual, radio and graphic communication services, which are the main lines of business of the Company's operation have been excepted from the Preventive and Mandatory Social Isolation (ASPO, for their Spanish acronym) and the audience levels have been maintained, the Directors had to analyse with special care and attention the decisions concerning the management of the Company in order to adapt the Company's subsidiaries to the country's and the market's economic situation, after being affected by the situation caused by the sanitary emergency. We note that, among other matters under the Board's functions, the directors have overseen and adapted the implementation of the action plans to the new circumstances, have developed Social Responsibility policies and have overseen their implementation, have overseen the fulfilment of the Company's corporate communication strategy, working actively on the structure of corporate governance, preparing macroeconomic reports.
Given that we can foresee that the sanitary emergency situation will continue to affect the economic situation of the country as well as the levels of demand in the markets in which the Company operates, mainly as a result of cuts in advertising budgets, the Directors will remain in close contact with their advisors and auditors in order to make the best decisions for the Company.
The Directors who are members of the Audit Committee have undertaken the analysis and study of the matters submitted to their consideration, devoting themselves to the tasks of such Committee pursuant to the Capital Markets Law. They also met with advisors and auditors of the Company in order to have full knowledge of the matters that had to be dealt with in such a peculiar year. The annual report of the Audit Committee that reports on its actions during the fiscal year ended on 31 December 2020, dated as of 11 March 2021, was published on the AIF under ID No. 2721308.
Next we include-as we did in previous years-a description of the technical-administrative tasks performed by the members of the Board of Directors who are also employees of the Company.
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 organization'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. Horacio Ezequiel Magnetto is a Governmental Affairs Analyst.
As Governmental Affairs Analyst his main function is to cooperate in the maintenance of the relations of Grupo Clarín S.A. and its subsidiaries with the various areas of the national, provincial and municipal governmental administrations. For such purpose, he develops connections at all levels in order to maintain a sustainable and long-term relationship. In addition, he is also responsible for supporting the management of all matters that have to do with the Government. For such purpose, he researches and analyses legislative matters and other provisions that may affect the activities of the companies that belong to Grupo Clarín S.A., prepares reports and presentations and cooperates with the area manager in advising on and implementing projects related to communication companies.
(Point 4) Consideration of the compensation of the members of the Board of Directors (Ps. 44,920,826 allocated amount) corresponding to the economic year ended 31 December 2020, which resulted in a loss under the Rules of the Argentine Securities Commission.
The fee proposal made by the Board of Directors for the year 2020 is of Ps. 23,101,752 to be allocated among the directors who carried out technical-administrative functions and/or special commissions and/or independent directors. In that regard, we hereby state for the record that the Company's Audit Committee issued an opinion dated 10 March 2021 with respect to the reasonableness of the fee proposal made by the Board of Directors. Minutes of such resolution were published on the AIF under ID No. 2720799.
In addition to the above, the compensation for technical-administrative functions developed by directors who are also employees were of Ps. 21,819,074.
The Chart of Allocations to the Board of Directors was submitted to the Argentine Securities Commission through the AIF under ID No. 2726461.
Messrs. Jorge C. Rendo and Horacio Ezequiel Magnetto are employees and, as such, are compensated with salaries. Pursuant to Article 75 of Decree No. 1023/2013 and Interpretative Criterion No. 45, the Company informed the CNV through the AIF the individual compensation of Directors and Syndics as restricted access information.
As shown under the point of the agenda copied above, the economic year ended 31 December 2020 yielded a computable loss under the Rules of the Argentine Securities Commission.
Next, we provide the requested information about the global amounts approved for fiscal years 2019 and 2018.
. | |||
Global Amount | Ps. 35,403,930 | Ps. 37,775,887 | Ps. 44,920,826 |
Number of Directors | 10 | 10 | 10 |
Average amount per director - annual | Ps. 3,540,393 | Ps. 3,777,589 | Ps. 4,492,083 |
Average amount per director - monthly | Ps. 295,033 | Ps. 314,799 | Ps. 374,340 |
Nominal increase | Ps. -8,439,738 | Ps. 2,371,957 | Ps. 7,144,939 |
Percentage increase | -19% | 7% | 19% |
(Point 5) "Authorisation to the Board of Directors to pay advanced fees for the year 2021 to directors who perform technical-administrative functions and/or special commissions and/or are independent directors, subject to the decision of the shareholders at the next meeting that considers the compensation of the members of the Board of Directors".
The Board shall request the authorisation of the Shareholders to pay advanced fees for the economic year 2021 to the members of the Board of Directors who perform technical-administrative functions and/or special commissions and/or are independent directors, subject to the decision of the shareholders at the annual meeting that considers the compensation of the members of the Board of Directors.
Notwithstanding the above, the Company has not received any proposal from the controlling shareholder in that regard. With respect to the term, we estimate that-if approved-will be paid monthly taking into account, for purposes of their allocation, the technical-administrative functions and/or special commissions [in which the Director participates] and/or the independent nature of the position.
(Point 6) "Consideration of the performance of members of the Supervisory Committee"
The members of the Supervisory Committee of Grupo Clarín S.A. appointed at the General Annual Ordinary Shareholders' Meeting of the Company held on 30 April 2020 are the following:
Hugo E. López Member
Carlos A. P. Di Candia Member
Adriana Estela Piano Member
Jorge de la Maria M de Hoz Alternate Member
Miguel Ángel Mazzei Alternate Member
Silvia Andrea Tedín Alternate Member
As presented in prior responses, the duties of the syndics are specified in the General Companies Law, Article 294. In connection with such duties, the members of the Supervisory Committee during fiscal year 2020 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, through the videoconference system Microsoft Teams, all the meetings of the Board of Directors, Audit Committee and Shareholders' Meetings held remotely as a consequence of the rise of COVID 19 and the regulations issued as a result by the National Executive Branch and the Argentine Securities Commission;
(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;
(vii) Provided assurance about the legality of the decisions adopted at the meetings of the Board of Directors, Audit Committee and the Shareholders in which they participated through the videoconference system Microsoft Teams, and [the Company's] compliance with rules applicable to remote meetings issued by the Argentine Securities Commission (CNV Resolution No. 830/2020).
(Point 7) Consideration of the compensation of the members of the Supervisory Committee for the economic year ended 31 December 2020. Authorisation to the Board of Directors to pay advances on compensation for economic year 2021, subject to the decision of the shareholders at the next Shareholders' Meeting at which compensation of the members of the Supervisory Committee is considered.
At the Annual Ordinary Shareholders' Meeting held on 30 April 2020, the shareholders authorized the payment of advances to members of the Supervisory Committee for up to an aggregate amount of Ps. 3,500,000.
The proposed fees to members of the supervisory committee for the year 2020 is estimated at Ps. 2,403,000. The amount advanced per syndic during fiscal year 2020 was of Ps. 801,000.
. | |||
Amount | Ps. 1,980,000 | Ps. 2,322,000 | Ps. 2,394,000 |
With respect to advances, the Board of Directors will request authorization for the payment of advances to the syndics, subject to the approval of the shareholders at the shareholders' meeting at which they consider the documents provided under Article 234 of the General Companies Law corresponding to the year 2021. Notwithstanding the above, the controlling shareholder has not made any proposal in that regard. If the payment of advances is approved by the shareholders, the Board of Directors will determine the form of their allocation.
(Point 8) Consideration of the application of the Company's Retained Earnings as of 31 December 2020, which yielded a negative result of Ps. 285,662,483. The Board of Directors proposes [that the Company] absorb the negative retained earnings pursuant to Article 11, Chapter III, Title IV of the Rules of the Argentine Securities Commission (as restated in 2013), as follows: i) by partially reversing the Issuance Premium.
First, we point out that the proposal of the Board of Directors that will be submitted to the consideration of the shareholders at this meeting is specified in the language of the point of the agenda. Pursuant to CNV General Resolution No. 777/2018, the figures set forth in the proposal shall be adjusted by applying the corresponding price index as of the month preceding the occurrence of the Shareholders' Meeting.
Next, we provide detail of the evolution of the Issuance Premium specifying the date it was created and its latest movements.
Grupo Clarín - Evolution of the Issuance Premium | ||
In currency as of 31.12.2020 | ||
Balance as of 31 December 2017 | 12,028,623,327 | |
General Ordinary Shareholders' Meeting of 30 April 2019: | ||
- partial reversal of the Issuance Premium to absorb negative retained earnings | (2,638,923,085) | (*) |
General Ordinary Shareholders' Meeting of 30 April 2020: | ||
- partial reversal of the Issuance Premium to absorb negative retained earnings | (2,052,076,145) | (*) |
Balance as of 31-12-2020 | 7,337,624,097 | |
(*) See Note 7 to the parent-company only financial statements as of 31 December 2020. | ||
(Point 9) "Appointment of the members and alternate members of the Board of Directors".
The Company has not received any proposal in connection with this point.
(Point 10) "Appointment of the members and alternate members of the Supervisory Committee".
The Company has not received any proposal in connection with this point of the agenda.
(Point 11) "Approval of the annual budget of the Audit Committee".
The Board of Directors has proposed that the amount of the annual budget of the Audit Committee for fiscal year 2021 be of Ps. 1,200,000 (ID No. 2726159). The actual amount executed by the Audit Committee in fiscal year 2020 was of Ps. 1,000,000.
The amount approved for 2018 was of Ps. 850,000. The amount approved for 2019 was of Ps. 900,000.
(Point 12) "Consideration of the fees of the External Auditor for the economic year ended 31 December 2020".
The proposed compensation to the external auditor, Price Waterhouse & Co. S.R.L. (ID No. 2726159), for the year 2020 is of Ps. 5,377,000, corresponding to work relating to:
- 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 2020, compared to the previous year;
- the issuance of its audit report on the parent-company only and consolidated financial statements as of 31 December 2020, compared to the previous year; and
- the issuance of its audit reports on the consolidated financial statements as of 31 December 2020, compared to the previous year, issued in the English language, to be filed with the LSE.
The amount for the years 2019 and 2018 were of Ps. 4,369,000 and Ps. 3,421,000, respectively.
(Point 13) "Appointment of the Company's External Auditor".
The Board of Directors of the Company has decided to propose to the Shareholders (ID No. 2726159) that the firm Price Waterhouse & Co. (PWC) continue as the Company's External Auditors and that certified public accountants Alejandro Javier Rosa act as Auditor and Messrs. Reinaldo Sergio Cravero and Ezequiel Luis Mirazón act as Alternate Auditors, all of them belonging to the firm Price Waterhouse & Co. (PWC).
The Audit Committee of the Company has issued a favourable opinion with respect to the appointment of the firm Price Waterhouse & Co. (PWC) as set forth in the minutes of the meeting of said committee dated 23 March 2021, uploaded onto the AIF under ID 2726242.
(Point 14) Amendment of Article Sixteen of the Company's Bylaws.
Given the exceptional circumstances undergone worldwide during 2020 as a result of the expansion and spread of COVID 19, which led to the imposition of the ASPO and, later, the DISPO, as well as the issuance of Resolution 830/20 of the Argentine Securities Commission that permitted holding meetings of the Board of Directors remotely and, given that even though the Company's bylaws provides for the holding of remote board meetings, counting for the purpose of quorum only those members who are [physically] present (a situation that was impossible during the ASPO) and taking into account that the situation caused by COVID 19 remains current and uncertain, the Board of Directors proposed to amend the Bylaws in order to count for purposes of quorum both the directors who are physically present as well as those who participate remotely using a system that transmits simultaneously sound, images and words.
Therefore, the Board proposes the following language: "ARTICLE SIXTEEN: The Board of Directors functions with the majority of its members (full members or alternate members acting in place of the full members) and adopts its decisions with the favourable vote of the absolute majority of all directors (full members or alternate members acting in place of the full members). The Board may also function with its members communicated with each other using a means to broadcast simultaneously sound, images and words, calculating for purposes of quorum both the directors who are present physically as well as those who participate remotely using a means of simultaneous transmission of sound, images and words. In the event of remote participation of any members (i) the minutes of the meeting will be written within five (5) days of the meeting, within which term they shall also be executed by those members who were present in person and a member of the supervisory body; (ii) the minutes will state expressly the names of those full members (or alternate members acting in place of the full members) of the Board who participate remotely, as well as the broadcast means used for the communication with members present in person; and (iii) the supervisory body will state for the record that the decisions adopted by the Board were lawful decisions, in full compliance of any applicable law and regulations of the Argentine Securities Commission."
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/ Jorge C. Rendo
President