GCLA.L Regulatory News (GCLA)

GRUPO CLARIN S.A.

Grupo Clarín Responds Shareholder Information Request

On 15 April 2020, 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 2020.

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

Enquiries:

In Buenos Aires:

Agustín Medina Manson

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, 15 April 2020

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 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 20 March 2020.

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 plaese 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).

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

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 March 2020 under ID No. 2592220.

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 30 April 2019 (ID 2494875, 10 July 2019), minutes of the meeting of the Board of Directors at which positions were allocated, held on 7 May 2019 (ID 2468607, dated 8 May 2019), 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 Gabriel Riportella, Horacio Eduardo Quirós and Ignacio Rolando Driollet. Alternate Directors: Francisco Iván Acevedo, Martín Gonzalo Etchevers, Patricia Miriam Colugio, Eloisa Prieri Belmonte, Eugenio Eduardo Sosa Mendoza, Marcelo Fernando Boncagni, Carlos Rebay, Luis Germán Fernández; Lucas Puente Solari y 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:

a. (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. 21 ended 31 December 2019.

As indicated by You, the accounting documents corresponding to the economic year No. 21 ended on 31 December 2019 is available to the shareholders on AIF (ID 2586458 dated 9 March 2020). 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".

We confirm that the financial statements corresponding to 31 December 2019 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).

b. (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.

The members of the Board of Directors have worked on matters relating to the management of the Company. In order to make decisions, the members of the Board of Directors met regularly with advisors and auditors. In addition, the members of the Board of Directors who are in the Audit Committee, have devoted themselves to the analysis and study of the matters submitted to their consideration and performed the tasks assigned to such Committee under the Capital Markets Law. They have also met with advisors and auditors of the Company in order to have full knowledge of the matters under discussion. We point out, among other matters under their responsibility, that the directors have overseen the execution of action plans, have developed Corporate Social Responsibility policies and overseen compliance therewith, designed the corporate communication strategy and overseen compliance therewith, worked on the corporate governance structure, carried out studies of investment projects, prepared macro economic reports, created policies and procedures. The annual report of the Audit Committee that reports on its actions during the fiscal year ended on 31 December 2019 was published on the AIF on 9 March 2020 under ID No. 2585710.

Next we include 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.

c. (Point 4) Consideration of the compensation of the members of the Board of Directors (Ps. 37,775,887 allocated amount) corresponding to the economic year ended 31 December 2019, 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 2019 is of Ps. 21,446,000 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 9 March 2020 with respect to the reasonableness of the fee proposal made by the Board of Directors. Minutes of such resolution were published on the AIF on 9 March 2020, ID 2585708.

The amount proposed for technical-administrative functions developed by directors who are also employees is of Ps. 16,329,887, thus adding up to PS. 37,775,887.

The Chart of Allocations to the Board of Directors for the year ended 31 December 2019 was submitted to the Argentine Securities Commission through the AIF on 27 March 2020, ID 2593370.

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 2019 yielded a computable loss under the Rules of the Argentine Securities Commission.

In addition, we confirm that: i) the aggregate amount of Director's fees, including compensation for the performance of technical-administrative functions, for the economic year 2016 approved by the Shareholders at the Annual Ordinary Shareholders' Meeting held on 27 April 2017 was of Ps. 35,090,861, ii) the aggregate amount of Director's fees, including compensation for the performance of technical-administrative functions, for the economic year 2017 approved by the Shareholders at the Annual Ordinary Shareholders' Meeting held on 19 April 2018 was of Ps. 43,843,668, and iii) the aggregate amount of Director's fees, including compensation for the performance of technical-administrative functions, for the economic year 2018 approved by the Shareholders at the Annual Ordinary Shareholders' Meeting held on 30 April 2019 was of Ps. 35,403,930.

d. (Point 5) "Authorisation to the Board of Directors to pay advanced fees for the year 2020 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 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 documents provided under Article 234 of the General Companies Law corresponding to the year 2020. Notwithstanding the above, the Board of Directors has not proposed their amount. With respect to the breakdown by director and by type of compensation, we expect that the Board of Directors will take into account the functions performed and/or special commissions [in which the Director participates] and/or the independent nature of the position.

e. (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 2019 are the following:

Hugo E. López Member

Carlos A. P. Di Candia Member

Adriana Estela Piano Member

Jorge de la M. 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 the such duties, the members of the Supervisory Committee during fiscal year 2019 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.

f. (Point 7) Consideration of the compensation of the members of the Supervisory Committee for the economic year ended 31 December 2019. Authorisation to the Board of Directors to pay advances on compensation for economic year 2020, 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 2019, the shareholders authorized the payment of advances to members of the Supervisory Committee for up to an aggregate amount of Ps. 3,000,000.

The proposed fees to members of the supervisory committee for the year 2019 is estimated at Ps. 2,394,000 according to the following detail: i) Hugo E. López and Carlos A. P. Di Candia: Ps. 801,000 each from 1 January 2019 to 31 December 2019, ii) Adriana Estela Piano: Ps. 534,000 from 1 May 2019 to 31 December 2019, and iii) Daniel Hirsch from 1 January 2019 to 30 April: Ps. 258,000.

We confirm that the amount approved for Fiscal Years 2016, 2017 and 2018 was of Ps. 1,650,000, Ps. 1,980,000 and Ps. 2,322,000, respectively.

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 2020. Notwithstanding the above, the Board of Directors has not proposed their amount. If the payment of advances is approved by the shareholders, the Board of Directors will determine the form of their allocation.

g. (Point 8) Consideration of the application of the Company's Retained Earnings as of 31 December 2019, which yielded a negative result of Ps. 1,507,321,349. 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 as of the month preceding the occurrence of the Shareholders' Meeting.

As mentioned in the point of the agenda, Article 11 of Chapter III, Title IV of the Rules of the CNV (as restated in 2013) literally provides:

"For the absorption of the negative balance of the "Retained Earnings" account, as of the closing of the fiscal year to be considered by the shareholders, the following order of priority in the allocation of the balance shall be followed:

i. Reserved earnings (voluntary, provided in the bylaws and statutory, in that order);

ii. Equity contributions, as described in Article 3º Point 5.a) of this Chapter;

iii. Issuance premiums and negotiation premiums for treasury shares (when that category has a positive balance);

iv. Other equity instruments (when legal and feasible for the company);

v. overall equity adjustment; and

vi. equity capital."

Therefore, and given that, as expressed in the Annual Report, at the Shareholders' Meeting held on 30 April 2019, the shareholders resolved to absorb the negative results with the full amount of the available reserves and, given that the there are no equity contributions pursuant to paragraph ii of the abovementioned Article, the Board of Directors submits to the consideration of the shareholders, the absorption of the negative balance of the account Retained Earnings by reversing the issuance premium in part, thus following applicable rules.

h. (Point 9) "Appointment of the members and alternate members of the Board of Directors".

The Board of Directors has not made any proposal in connection with this point.

i. (Point 10) "Appointment of the members and alternate members of the Supervisory Committee".

The Board of Directors has not made any proposal in connection with this point of the agenda.

j. (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 2020 be of Ps. 1,000,000 (ID No. 2453364 dated 20 March 2020).

We inform that the Ps. 900,000 of the budget of the Audit Committee duly approved by the shareholders at the shareholders' meetings held on 30 April 2019 were fully executed.

The amount approved for 2018 was of Ps. 850,000.

k. (Point 12) "Consideration of the fees of the External Auditor for the economic year ended 31 December 2019".

The proposed compensation to the external auditor, Price Waterhouse & Co. S.R.L., for the year 2019 is of Ps. 4,369,000, 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 2019, compared to the previous year;

- the issuance of its audit report on the parent-company only and consolidated financial statements as of 31 December 2019, compared to the previous year; and

- the issuance of its audit reports on the consolidated financial statements as of 31 December 2019, compared to the previous year, issued in the English language, to be filed with the LSE.

The amount for the year 2018 that you state was the one that was duly approved.

l. (Point 13) "Appointment of the Company's External Auditor".

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 and that certified public accountants Alejandro Javier Rosa and Carlos Alberto Pace, both belonging to the firm Price Waterhouse & Co. SRL (PWC) act as Auditor and Alternate Auditor, respectively.

The Audit Committee of the Company has issued a favourable opinion with respect to the appointment of the firm Price Waterhouse & Co. SRL as set forth in the minutes of the meeting of said committee dated 19 March 2020, uploaded onto the AIF on 20 March 2020 under ID 2592221.

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