cepu_item7
Exhibit 7
EXHIBIT III
General Resolution No. 797 of the Argentine Securities
Commission
A) DUTIES OF THE BOARD OF DIRECTORS
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Principles
I. The company shall be led by a
professional and trained Board of Directors, which shall be in
charge of founding the bases necessary to ensure the sustainable
success of the company. The Board of Directors is the guardian of
the company and of the rights of all its Shareholders.
II. The Board of Directors shall be in
charge of determining and promoting corporate culture and values.
In its performance, the Board of Directors shall ensure compliance
with the highest ethical and integrity standards in the best
interest of the company.
III. The Board of Directors shall be in
charge of ensuring a strategy inspired in the vision and mission of
the company, which shall be aligned with its values and culture.
The Board of Directors shall be constructively involved with
management to ensure the correct development, execution, monitoring
and change of the company’s strategy.
IV. The Board of Directors shall exert
permanent control and supervision of the company’s
management, ensuring that management takes actions directed at the
implementation of the strategy and business plan approved by the
Board of Directors.
V. The Board of Directors shall count
with the necessary mechanisms and policies to perform its duties
and the ones of each of its members in an efficient and effective
way.
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Recommended Practice (“RP”) 1. The Board of Directors
generates a work ethics culture and establishes the vision, mission
and values of the company.
Central
Puerto S.A. Board of Directors (hereinafter, the
“Company”
or “CPSA”
indistinctly) approved the following: a) the Code of Corporate
Governance (“CGS” for its acronym in
Spanish) 10/3/2017, which was updated on 27/12/2018 and 10/03/2020,
and b) the Integrity Plant
(the “Program”) dated
13/8/2018, which includes the Code of Corporate
Governance (“CDCE”).
The CDCE is the result of the good practices
directors, managers, heads and all the personnel must follow when
performing their business operations and during the development of
their activities. Among these, the following stand out: (I) the
relationship with clients, shareholders, suppliers, the public
sector and employees; (ii) intellectual and industrial property,
and proprietary information; and (iii) conflict of
interest.
A
printed copy of the CDCE was distributed to the employees, and it
is also published in the Company’s intranet and
website.
CPSA has defined the mission,
vision and values, which are described as
follows:
Mission: To produce electrical
energy in an effective and efficient way, contributing to the
supply of electrical demand with quality, and managing business in
a way so as to create value for the Company as well for society, in
a sustainable way and in harmony with the
environment.
Vision: To be recognized as the
leading company in the production of electrical energy in
Argentina, for its participation in the market, and for the
excellence in the operation and profitability. To accompany the
technological evolution of the industry at the national, regional
and world level, adapting its asset portfolio to such
evolution.
Values: a) To manage the
quality of its processes to ensure an adequate availability,
reliability and safety in the production of its generation units so
as to satisfy its clients requirements, b) To manage safety and
health at work preserving the integrity of people and its goods and
of third parties’, c) To develop an environmental management
aimed at the sustainable development, d) To maximize the value of
its shareholders investment in a sustainable way in time, as well
as having in mind the general responsibilities of the Company, e)
To promote the development of its human capital, not only as better
professionals but also as better persons.
RP 2. The Board
of Directors sets the general strategy of the company and approves
the strategic plan developed by management. Doing so, the Board of
Directors takes into consideration environmental, social and
corporate governance factors. The Board of Directors supervises its
implementation through the use of key performance indicators and
taking into account the best interest of the company and all its
shareholders.
The Company’s general
policies and strategies are approved by the Board of Directors. The
Board of Directors considers and approves the Annual Business Plan
(“Annual
Plan”), which is prepared by the general management
and involves control policies on the handling of Company’s
matters; an annual budget; operations and mechanisms planning to
control the performance of the general management and the
compliance with objectives.
In
the Performance Reports (the “Performance Reports”),
the evolution of the Annual Plan is
presented.
To such
end, the Board of Directors meets to consider the Performance
Report for each month or previous months, as appropriate. Moreover,
in such meetings, the decisions central to the Company’s
management are taken, compliance with set objectives are assessed
and reviewed; and, if necessary, the deviations from the approved
budget. Monitoring of the different business variables, such as
economic, financial and environmental, as well as the consideration
of the reports made by the external and/or internal auditors and/or
hired consultants, is part of this analysis.
RP 3. The Board of Directors supervises management and ensures that
it develops, implements and keeps an adequate internal control
system with clear report lines.
The
Board of Directors verifies the General Management’s
performance and compliance with the goals set when considering the
Performance Reports and the approval of CPSA’s Financial
Statements. Under the supervision of the Supervisory Committee, the
General Management, together with Managers and the Company’s
employees, has implemented a robust and effective internal control
system under COSO (Committee of
Sponsorship Organization of the Treadway) parameters and
standards, so as to provide a reasonable safety degree regarding
the pursuit of objectives within the following categories: Efficacy
and efficiency of operations; Reliability of the financial
information and Compliance with laws, regulations and standards
applicable.
All the
financial origin information reviewed, discussed and approved by
the Board of Directors is based on safety, reliability and
robustness provided by COSO framework.
RP 4. The Board of Directors designs the structures and the
practices of corporate governance, appoints the responsible one for
its implementations, it monitors their effectiveness and suggests
changes, should they be necessary.
The
Company’s Board of Directors approved the CGS (Code of
Corporate Governance, which includes the structures and practices
of corporate governance), making the adaptations it considered
necessary and appropriate; and it has annually considered the CGS
Code, as the General Resolution No. 622/2013 of the Argentine
Securities Commission (“CNV”).
As per
decided at the Board of Directors’ meeting on March 10, 2020,
the Board of Directors has appointed the person to act as Manager
of the Company’s Legal Counseling giving him the duties of
Corporate Secretary of the Company, who will implement and monitor
the effectiveness of the corporate governance practices through the
revision and updating of the Corporate Governance Code and the
Report stated in CNV General Resolution No. 797/19, as well as to
ensure its compliance with the exercise of its duties as described
in answer to RP 9 and 14. The Legal Counseling Manager is also the
Head of Market Relations, under the terms of Law No. 26 831 and CNV
Regulations.
RP 5. The members of the Board of Directors have enough time to
exercise their duties professionally and efficiently. The Board of
Directors and its committees have clear and formalized rules for
its functioning and organization, which are spread through the
Company’s website.
The
members of the Board of Directors are recognized people in the
business area and have extensive experience, as well as knowledge
and proper professional training for the performance of their
duties.
The members of the Board of Directors have a high level of
attendance to the Board of Directors’ and Committee Meetings
they participate in. The functioning rules of the Board of
Directors are established in the Company’s Bylaws, which
is published on the Company’s website and in the Argentine
Business Entities Act.
Regarding
the functioning of the Supervisory Committee, the Board of
Directors approved the Supervisory Committee Internal Regulations
on 9/5/2003. And it was amended on 5/3/2015 and 5/8/2015. The
Internal Regulations were promptly submitted before the
CNV.
B) CHAIR IN THE BOARD OF DIRECTORS AND CORPORATE
SECRETARIAT
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Principles
VI. The Chairman of the Board of
Directors is in charge of ensuring effective compliance with the
duties by Board of Directors and of leading its members. The
Chairman must generate a positive work dynamics and promote the
constructive participation of the Boards’ members, as well as
ensuring the members count with the necessary elements and
information for taking decisions. Such also applies to the Chairs
of each Board of Directors’ Committee regarding the task
under their scope.
VII. The Board of Directors’
Chairman shall lead processes and establish structures searching
for commitment, objectivity and competition among members of the
Board of Directors, as well as the improvement of the bodies’
functioning in its entirety and its evolution as per the needs of
the company.
VIII. The Board of Directors’
Chairman shall ensure that the Board of Directors in its entirety
is involved and responsible for the general manager’s
succession.
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RP 6. The Chairman of the Board of Directors is responsible for the
good organization of the Board of Directors’ meetings, the
preparation of the agenda -ensuring the collaboration form the rest
of the members and ensuring that they receive the materials in a
timely manner so that they can participate in an efficient and
informed way in the meetings. The Committees’ Chairmen have
the same responsibilities for their meetings.
CPSA’s
Chairman, as per CGS, defines the Agenda for the Board of
Directors’ Meetings, in which all the matters whose
consideration has been requested by the general manager or other
directors are included.
The
Chairman, through the Corporate Secretary of the Company, ensures
that the Directors receive the information and the documentation
necessary for the consideration and decision of the matters to be
considered.
RP 7. The
Board of Directors’ Chairman ensures the correct internal
functioning of the Board of Directors through the implementation of
formal procedures of annual assessment.
Up to
date, the Company has not implemented a formal annual assessment
since in accordance with the Argentine Business Entities Act, it is
at the Shareholders’ Meeting that the Board of
Directors’ performance is annually assessed. The results of
the Board of Directors’ performance are annually presented on
the Company’s Annual Report and, regarding the Supervisory
Committee, through the Supervisory Committee’s Annual Report,
which is considered by the Company’s Board of Directors.
Moreover, and at least quarterly, the Company’s performance
and indirectly the Board of Director’s performance are
evaluated on the Performance Report.
Notwithstanding
the foregoing, during the ongoing period, the implementation of
annual assessment procedures will be proposed.
RP 8. The Chairman generates a positive and constructive working
space for all the members of the Board of Directors and ensures
they receive continuous training to keep updated and to comply with
their duties correctly.
The
Chairman of the Board of Directors generates a positive and
constructive working space for all the members of the Board of
Directors. The directors of the Company, even outside the meetings
of the Board, shall be kept informed about the business of the
Company. To that end, they may have conversation with the Chairman,
other directors, the General Manager and the internal and external
auditors, being able to exchange different opinions and/or
inquiries in such regard. Moreover, the directors revise the
material they receive for the Board of Directors’ meetings so
that they can prepare themselves in advance for the meetings and
even make inquiries to the general management or to the different
managers that correspond.
As
needs in the Company appear, as well as needs regarding the
directors’ role and responsibility, the training of the
members of the Board of Directors is defined. Such training may be
entrusted to external counselors or internally to the
Company’s personnel. As an example, during the period ended
December 31, 2019, the Directors received training regarding the
Corporate Criminal Responsibility Act.
RP 9. The Corporate Secretariat supports the Board of
Directors’ Chairman in the effective administration of the
Board and collaborates in the communication among shareholders, the
Board of Directors and management.
In the
meeting dated March 10, 2020, the Company’s Board of
Directors appointed the Company’s Legal Counseling Manager as
Corporate Secretary of CPSA, being his main duty to assist the
Company’s Chairman in the effective administration of the
Board of Directors, collaborating with the communication among
shareholders, the Board and management.
Regarding
shareholders, the Corporate Secretary is responsible for the
Company’s complying with the regulations in force,
particularly through the communication to the Market of the
relevant facts and through making available the information and
documentation in every Shareholders’ Meeting. The individual
performing the Corporate Secretary’s duties is also
responsible for Market Relations, acting in coordination with the
Investor Relations Officer.
The
Corporate Secretary acts also as a link between the Company’s
Board of Directors and management, providing the Board and the
Supervisory Committee with the information and the documentation
required to all the areas of CPSA’s management, whether
in-person, by telephone, email or videoconferences.
The
Corporate Secretary collaborates with the Company’s Chairman
and acts as link between this and the General Manager, in the
coordination of CPSA’s Board of Directors’ Meetings
both regarding call; periodicity; definition of the Agenda of each
of the meetings, presenter of each matter, sending of information
and documentation to directors and statutory auditor, attendance of
directors and statutory auditors to meetings, quorum calculation
and voting, drafting and sending of minutes to directors, recording
to the corresponding Minutes Book and subsequent
signature.
Moreover,
the Corporate Secretary is responsible for coordinating and making
the orientation plan for the new directors of the
Company.
RP 10. The Board of Directors’ Chairman ensures the
participation of all its members in the development and approval of
a succession plan for the Company’s General
Manager.
During
the meeting held on March 10, 2020, the Company’s Board of
Directors approved appointing CPSA’s Chief Operating Officer
(“COO”) as successor of the Company’s General
Manager.
Within
the Company’s management organization chart, he currently has
under his charge the operation and trade duties of CPSA’s
management, reporting directly to the Company’s General
Manager.
The
Company will assess the implementation of a succession
plan.
C) FORMATION, APPOINTMENT AND SUCCESSION OF THE BOARD OF
DIRECTORS
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Principles
IX. The Board shall count with adequate
independence and diversity levels allowing it to take decisions in
the best interest of the company, avoiding group thinking and
individual or dominant group decision taking within the
Board.
X. The
Board of Directors shall ensure that the company counts with formal
procedures for the proposal and nomination of candidates to fill
positions in the Board within a succession plan.
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RP
11. The Board has, at least, two members having an independent
capacity as per the criteria in force established by the Argentine
Securities Commission.
Currently,
the Company’s Board of Directors has 3 (three) independent
directors.
As it
stems from the Bylaws, the Company’s direction and management
shall be in charge of a Board of Directors formed by 11 (eleven)
directors and the same number or lower of deputy directors, as the
Shareholders’ Meeting may fix.
In that
regard, the following is established as the Company’s policy:
that the independent directors’ proportion in the Board of
Directors shall be, at least, one third of the total members of the
Board of Directors.
RP 12. The Company has a Nominations Committee, which is formed by
at least 3 (three) members and is led by an independent director.
In case of leading the Nominations Committee, the Board of
Directors’ Chairman shall abstain from participating in the
appointment of its own successor.
The
Company does not have a Nominations Committee since it considers
that the proposal of authorities for election should not stem from
the Company proper so as to make the election have an independence
line. Therefore, it gives it shareholders the proposal duty over
the list. This way, there are no suggestions from the Board that
may influence in the Shareholders’ decision. Consequently,
the election and appointment of the members of CPSA’s Board
of Directors is reserved to the exclusive decision of its
shareholders as per the Company’s Bylaws and the Argentine
Business Entities Act No. 19 550.
RP 13. The Board of Directors, through the Nomination Committee,
develops a succession plan for its members, which plan guides the
candidates preselection procedure to fill positions and takes into
consideration non-binding recommendations made by its members, the
General Manager and Shareholders.
The
shareholders choose Deputy Directors, which shall replace Directors
as per the Company’s Bylaws and the provision of the
Argentine Business Entities Act No. 19 550.
CPSA,
both through the Employment Policy and the Code of Business
Conduct, grants full equal job opportunities to people
qualified to perform a task, without taking into account race, sex,
religion or origin, or other differentiation factor beyond the ones
determined by law. All persons complying with the eligibility
requirements for the positions they aspire to shall have the same
level of opportunities in all the aspects of the employment
relationship, including recruitment, hiring, promotions, transfers,
compensation levels, selection for training and development, and
employment termination. CPSA is committed to promote gender and
opportunity equality to promote diversity and integration of all
the work team and personnel. Therefore, CPSA considers that
diversity produces positive results at human level and a means to
comply with its principles, such as integrity and team work. To
that end, it expresses these values in its annual report and the
Code of Corporate Governance so as to guide, but not influence, its
Shareholders’ decisions. In line with the abovementioned, as
stated in the previous item, the Company does not have a
Nominations Committee proposing candidates so as not to influence
through suggestions to Shareholders, who are in charge of making
proposals to the Shareholders’ Meeting and approve them among
their pairs with full independence from the Board of Directors and
fully involved in carrying out the best election to guarantee
-among them- the Company’s way, and ensuring the separate
effective functioning of each corporate body.
RP 14. The Board of Directors implements a guidance program for its
new members elected.
In the
meeting dated March 10, 2020, the Company’s Board of
Directors approved a guidance plan for the new directors elected
exercising their duties as Directors of the Company for the first
time.
The
Corporate Secretary is in charge of coordinating with the new
directors, the date and hour in which the guidance plan shall
commence in the Company’s offices. On such date, the new
directors attending the Company’s address are received by the
Company’s General Manager together with the Corporate
Secretary and different managers of CPSA, who will consider the
following matters:
a)
Information
regarding the company’s structure and its organizational
culture-
b)
Personal
information of the directors so as to form the file of each of the
new directors, being able to carry out the corresponding procedures
before supervision entities, including but not limited to the
Argentine Securities Commission, Bolsas y Mercados Argentinos S.A.,
the Buenos Aires Stock Exchange, Caja de Valores [Argentine
Securities Central Depositary], Business Entities Registry for the
City of Buenos Aires, the Security Exchange Commission, and any
other competent supervisory entity.
c)
The Corporate
Secretary informs on relevant aspects of Corporate Governance, such
as the main items on the Code of Corporate Governance; general
regulation on the functioning of the Board of Directors and
Shareholders’ Meeting; the development of the Board of
Directors’ meetings; the functioning of the Supervisory
Committee; among others.
d)
The Environmental
Counselor informs regarding the Quality (ISO 9001) and
Environmental (ISO 14001) Management System. The necessary concepts
for the improvement of the environment and of quality shall be
informed so as to raise more awareness in the new directors on the
Company’s policies regarding optimization of water, energy,
paper and waste.
e)
The Health and
Safety Area shall be the one informing the new officer regarding
the precautions needed to avoid work accidents and shall deliver
the Basic Health and Safety Standards.
f)
The Company’s
Internal Auditor makes a general presentation on the existent
control structure in the Company, as well as of the internal and
external audit system. Moreover, it informs the general guidelines
of the following documents: (I) Code of Business Conduct; (ii) the
Integrity Plan; (iii) Anti-Fraud Policy; (iv) Insider Trading
Policy; (v) Procedure for treatment of complaints.
g)
The Corporate
Secretary shows the new directors the meeting room in which the
Board of Directors’ Meetings shall be held and coordinates a
tour around the plant.
h)
The Corporate
Secretary evidences the delivery of the following documents to the
Directors: (i) Bylaws, (ii) Code of Corporate Governance, (iii)
Code of Business Conduct, (iv) Insider Trader Policy, (v) Anti-Fraud Policy, (vi) Treatment
procedure of complaints to infringement of CDCE, (vii) Gift Policy,
(viii) Policy of Relations with the Public Sector, (ix) Policy of
hospitality and presents procedure, (x) Transactions Policy with
Related Parties, and (xi) Integrated Policy of Environment, Quality
and Occupational Safety. And
i)
It is informed that
the Company’s website includes such financial and
non-financial information, and whose spreading is required by the
Argentine Securities Commission; the Buenos Aires Stock Exchange,
the Security Exchange Commission and the New York Stock
Exchange.
The
presentation of the new directors is made in the first Board of
Directors’ meeting to which they attend.
D) REMUNERATION
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Principles
XI. The Board of Directors must create
incentives through remuneration in order to align Management
– presided by the General Manager – and the Board of
Directors itself with the long-term interests of the Company so
that all Directors comply with their obligations regarding all the
shareholders equally.
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15. The Company has a Remuneration Committee formed by at least
three (3) members. Members are completely independent or
non-executive.
Nowadays,
the Company has a Remuneration Committee, which is formed by the
General Manager, the Human Resources Manager and the Chairman of
the Board of Directors.
The
remunerations of the members of the Company are fixed and updated,
based on the evolution of inflation and the salaries in the general
energy market. If an increase for performance is requested, the
Remuneration Committee gathers and evaluates the application in
order to define whether it is feasible based on the
background.
RP 16. The Board of Directors, through the Remuneration Committee,
sets forth a remuneration policy for the General Manager and the
members of the Board of Directors.
The
fees of the Directors of the Company are approved during the
Shareholders’ Meetings. The global amount of the fees in no
case shall exceed the limits established by the Argentine Business
Entities Act and CNV regulations.
The
Board of Directors defines the advance payment of fees of
Directors, and the percentage increase of the monthly remuneration
of the General Manager, as this is different from the regular
percentage adjustment for the Company’s
employees.
As
established by the Code of Corporate Governance of the Company, the
remuneration levels must be sufficient to lure and retain competent
directors.
The
remunerations of the members of the Company are fixed and updated
based on the evolution of inflation and the salaries in the general
energy market. If an increase for performance is requested, the
Remuneration Committee gathers and evaluates the application in
order to define whether it is feasible based on the
background.
E) CONTROL ENVIRONMENT
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Principles
XII. The Board of Directors must ensure
the existence of a control environment, formed by internal controls
developed by Management, internal audit, risk management,
regulatory compliance and external audit, which sets forth the
lines of defense necessary to ensure the integrity of the
company’s operations and its financial reports.
XIII. The Board of Directors must ensure
the existence of an integral risk management system, which enables
Management and the Board of Directors to direct the company
efficiently towards its strategic goals.
XIV. The Board of Directors must ensure
the existence of a company or department (based on the size and
complexity of business, the nature of its operations and the risks
it faces) in charge of the internal audit of the company. This
audit must be independent and objective in order to assess and
audit the internal control, the corporate governing processes and
the risk management of the company, and it must have
clearly-established report lines.
XV. The Supervisory Committee of the
Board of Directors shall be formed by qualified and experienced
members and must comply with its duties in a transparent and
independent manner.
XVI. The Board of Directors must
establish proper procedures to safeguard the independent and
effective performance of the External Auditors.
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RP 17. The Board of Directors shall determine the level of risk
that the company wants to face and it also supervises and ensures
the existence of a comprehensive management risk system which
identifies, evaluates and decides on the course of action and
monitors the risks the company faces, including but not limited to,
environmental, corporate risks and such risks inherent to the
business in the short and long term.
The
General Management and the Vice-Chairman of the Company, prior to
the commencement of the Budget Process, carry out an analysis of
the risks of the industry, including the consideration per
occurrence probability and economic impact. It is delivered to
Senior Management, who analyzes, proposes and discusses the
content. Strategic, operational, financial, regulatory and
compliance risks are reviewed. Once they are reviewed and discussed
in person, a document is drafted with the analysis and final
consideration from which the budget and the Annual Plan are
prepared. The Board of Directors considers and approves the
business Annual Plan, which is updated with the monthly
presentation of the Company’s management
reports.
At
least once during the fiscal period, the General Manager and the
Vice-Chairman of the Company will review and update the Risks Stock
and its consideration with Senior Management
(Monitoring).
RP 18. The Board of Directors monitors and reviews the
effectiveness of the independent internal audit and ensures the
resources for the implementation of an annual audit plan based on
the risks and a direct report line to the Supervisory
Committee.
The
Company has an internal audit department with a direct report line
to the Supervisory Committee and General Manager. The Board of
Directors delegates to the Supervisory Committee the activities of
approval of an Annual Audit Plan, the monitoring of its
implementation, its effectiveness, the allocation of resources for
its performance. The Audit Plan sets forth audit and compliance
activities which are carried out by the audit department, and it is
prepared based on the risks considered by impact and occurrence
probability.
Annually,
the Board of Directors evaluates: a) the Annual Report for the
previous period and b) the Action Plan for the ongoing period, both
prepared by the Supervisory Committee.
RP 19. The internal auditor or the members of the internal audit
department are independent and highly qualified.
All
members of the internal audit department are professionals in the
field of Economic Sciences and are highly qualified in the matters
of internal audit, ethics, risk management and compliance. The
Company has a training budget for the department and selects
first-level entities and universities for the necessary training
activities. In addition, all members of the internal audit
department are members of the Internal Auditors Institute (IAIA)
and the Argentine Association of Ethics and Compliance. The
internal audit department is independent from Management and they
report directly to the Supervisory Committee and General
Management.
RP 20. The Board of Directors has a Supervisory Committee, which
acts pursuant to its regulations. The Committee is mostly formed
and presided by independent directors, and it does not include the
General Manager. Most of its members have professional experience
in the financial and accounting fields.
The
Board of Directors has a Supervisory Committee, which acts pursuant
to its regulations duly approved by the Board of Directors and
submitted before the CNV. Such regulations set forth the purpose of
the Committee and its functions, which include among others: a) to
provide their opinion regarding the appointment of external
auditors to be hired by the Company and to safeguard their
independence; b) to supervise the functioning of the internal
control systems and the administrative-accounting system, as well
as its reliability and to supervise all the financial information
submitted before the CNV and the markets, pursuant to the
applicable Informative Regime; c) to supervise the application of
policies regarding the risk management of the Company; d) to
provide their opinion regarding the reasonability of the fees and
option plans proposals on the shares of CPSA directors and
administrators made by the governing body; e) to provide their
opinion regarding compliance with legal obligations and the
reasonability of the conditions of the issue of shares and
convertible securities into shares, in case of capital increase
which excludes or limits the right of preference; f) to verify
compliance with the applicable conduct regulations; g) to provide a
justified opinion regarding the operations with related parties in
the cases established by Law no. 26 381 and CNV Regulations and
pursuant to the provisions set forth by the Policy of transactions
by related parties; h) to provide a justified opinion pursuant to
the provisions of CNV when there exists or there may exist a
conflict of interest in the Company. Annually, the Supervisory
Committee must prepare an Action Plan for the period under
consideration, which must be approved by the Board of Directors of
the Company.
The
Supervisory Committee is formed by three directors, most of whom
must be independent. One of the members of the Supervisory
Committee is appointed financial expert.
RP 21. The Board of Directors, upon the opinion of the Supervisory
Committee, approves a policy of selection and monitoring of
external auditors, which establishes the indicators that must be
considered when providing the recommendation to the Shareholders
Meeting regarding keeping or replacing the external
auditor.
The
Supervisory Committee provides its opinion regarding the
appointment of the external auditors to be hired by the Company and
safeguards their independence. In addition, the Supervisory
Committee must consider whether such services comply with the SEC
and CNV regulations.
The
Supervisory Committee shall annually perform an evaluation of the
commitment, the efficiency and independence of the work of the
external auditor. Moreover, the Supervisory Committee considers if
such services comply with SEC AND CNV regulations. Annually, the
Supervisory Committee shall annually evaluate the commitment,
efficiency and independence of the external auditor’s
performance. This revision shall be made from the information
provided by the different Managing departments of the Company,
which interact with the external auditors and have the necessary
knowledge in order to define their compliance based on the
parameters exposed. Then, it will be presented as a report to the
Supervisory Committee for the consideration of the Board of
Directors.
F) ETHICS, INTEGRITY AND COMPLIANCE
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Principles
XVII. The Board of Directors must design
and establish appropriate structures and practices to promote a
culture of ethics, integrity and compliance with the regulations
that prevent, detect and address corporate failures or serious
personal failures.
XVIII. The Board of Directors shall
ensure the establishment of formal mechanisms to prevent, or
otherwise, deal with any conflict of interest that may arise in the
administration and management of the company. The company must have
formal procedures that aim at ensuring that the transactions
between related parties are carried out in the best interest of the
company and the equal treatment of all its
shareholders.
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RP 22. The Board of Directors approves a Code of Ethics and Conduct
which reflects the values and principles of ethics and integrity,
as well as the culture of the company. The Code of Ethics and
Conduct is communicated and applicable to all directors, managers
and employees of the Company.
Integrity
is understood as a key value for performing commercial activities.
It expects all the personnel of the Company to act with loyalty,
honesty, transparency and strictly complying with the legislation
and the national and international regulations which apply to the
Company. Therefore, the Company has developed an Integrity Plan,
which has been duly approved by the Board of Directors. Nowadays,
the Integrity Plan is formed by the Code of Business Conduct
(CDCE), and different policies and procedures.
The
CDCE is the result of good practices that the directors, managers,
heads and the whole personnel must comply with in the course of
business operations and the development of their activities. In
that regard, the CDCE contains: a) general principles, including but not
limited to: a) the relationship with clients, shareholders,
suppliers and employees; and b) principles of individual behavior,
which include: i) health and hygiene, industrial safety and
environment; ii) safety of people, documentation and equity; iii)
relationship between employees; iv) harassment; v) relationship
between clients and suppliers; vi) relationship with public sector;
vii) confidentiality; viii) intellectual and industrial property;
ix) conflict of interest; x) privileged information; and xi)
politics in the field of the Company; xii) employment of electronic
means and systems of the Company; xiii) accounting records and
procedures; xiv) fraud, acts contrary to the CDCE and the channel
to report claims.
Employees
receive a printed copy of the CDCE and it is published both in the
intranet of the Company and in the website of the Company. In the
context of the Orientation Plan for new directors, a copy of the
CDCE is provided.
RP 23. The Board of Directors establishes and periodically reviews
the dimension and economic capacity of an Ethics and Integrity Plan
based on the risks. Management visibly and unequivocally supports
the Plan, and appoints an internal employee responsible for the
development, coordination, supervision and evaluation of the Plan
regarding its efficiency on a regular basis. The Plan establishes
the following: (i) regular trainings for the directors,
administrators and employees on matters of ethics, integrity and
compliance; (ii) internal channels to report complaints, open to
third parties and properly disseminated; (iii) a protection policy
against retaliation; and an internal investigation system that
respects the rights of the persons under investigation and imposes
effective penalties to the breach of the Code of Ethics and
Conduct; (iv) integrity policies in competitive processes; (v)
mechanisms for the regular analysis of risks, monitoring and
assessment of the Plan; and (vi) procedures that confirm the
integrity and trajectory of third parties or business parties
(including due diligence for the verification of irregularities,
torts or the existence of vulnerability during corporate
transformation and acquisitions), including suppliers,
distributors, service providers, agents and brokers.
The
Board of Directors establishes and periodically reviews the
dimension and economic capacity of a Plan based on risks. The Board
of Directors appoints an internal employee of the Company who is in
charge of the development, coordination and supervision of the Plan
as Compliance Officer. The Compliance Officer regularly reports to
the Supervisory Committee about the progress of the Plan and its
efficiency. From the approval of the Plan by the Board of
Directors, the Compliance Officer is responsible for its
coordination, supervision and compliance, and he shall report: (i)
on a regular basis, to the Supervisory Committee regarding the
follow-up of its implementation and any news about the compliance
with the Plan; and (ii) to the Board of Directors, upon its request
or when the circumstances require so.
The
Supervisory Committee periodically requires from the Compliance
Officer a report on the implementation of the Plan. Nowadays, this
Plan is formed by a Compliance Risk Mapping and, in addition to the
CDCE, different policies which include, among others: a) Anti-fraud
Policy; b) Hospitality and presents Policy; c) Gifts Policy; d)
Insider Trading Policy (use of proprietary information), e) Policy
of relations with the public sector. Moreover, the Company has a
Treatment Policy of Reports of Breach of the CDCE, which can be
delivered through mailboxes installed in the Company, e-mail,
intranet or through a hired service specialized in complaints
management. A Training Program is part of the Plan.
RP 24. The Board of Directors ensures the existence of formal
mechanisms to prevent and deal with conflicts of interest. In the
case of transactions between related parties, the Board of
Directors approves a policy which establishes the role of each
corporate body and defines how to identify, administer and disclose
such transactions detrimental to the Company or just to some
investors.
Through
the CDCE, which is part of the Plan, the Company has implemented
effective mechanisms to facilitate the prevention, handling and
disclosure of conflicts of interest that may arise between
shareholders, key executives, stakeholders and members of the Board
of Directors, and among them. Directors may contract with the
Company only in relation to the activities included in its
corporate purpose and market conditions, pursuant to Law no. 26 831
and CNV regulations.
The
Company has a Policy of Transactions with Related Parties, which
has been approved by the Supervisory Committee. In addition, the
Internal Audit area monitors compliance with the aforementioned
policy, and in case an operation outside these parameters is
detected, it is reported to the Supervisory Committee.
G) PARTICIPATION OF SHAREHOLDERS AND STAKEHOLDERS
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Principles
XIX. The company must treat all its
Shareholders equally. It must ensure equal access to
non-privileged, relevant information for their decision-making at
the Shareholder’s Meetings.
XX. The company must promote active
participation and proper information to all the Shareholders,
especially when deciding upon the Board of Directors.
XXI. The company must have a transparent
Dividends Distribution Policy aligned with the
strategy.
XXII. The company must take into
consideration the interest of its stakeholders.
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RP 25. The Company’s website discloses financial and
non-financial information, providing equal and duly access to all
its Investors. The website has a specialized area for Investors
inquires.
In
addition to the duly widespread of the information, whose
publication is required by the regulations in force, the Company
publishes information through its website that complies with high
standards of confidentiality and integrity and it tends to the
conservation and record of information.
In
addition, the website has all the relevant information, whose
publication is required by the CNV, the Buenos Aires Stock
Exchange, SEC, and the New York Stock Exchange (“NYSE”).
The
Company’s website will be in charge of the Head of Investors
Relations of CPSA. It will be updated upon the occurrence of events
which require so, and it shall be the responsibility of each area
to inform said circumstance which must be reported in the website
of the Company.
This
way, through its website, the Company ensures its shareholders
equal access to non-privileged, relevant information for their
decision-making at the Meetings of the Company. In addition, the
website establishes proper mechanisms for the direct consultation
from the community about any inquiry about the Company. Based on
all the foregoing, each interested shareholder or investor may
communicate the inquiries they deem necessary to the Investors
Relations area via e-mail, telephone or a meeting in person. The
Company has a specialized area to answer all the consultations from
shareholders and other investors.
RP 26. The Board of Directors must ensure there is an
identification and classification procedure of its stakeholders and
a communication channel with them.
During
the 2020 period, the Board of Directors will prepare an
identification and
classification procedure of its stakeholders and a communication
channel with them.
RP 27. The Board of Directors provides to the Shareholders, prior
to their Meeting, a “provisional information package”
which enables Shareholders- through a formal communication channel
– to make non-binding comments and to share dissenting
opinions towards the recommendations made by the Board of
Directors. At the moment of providing the definite information
package, the Board of Directors must expressly decide on the
comments received that are deemed necessary.
The
Board of Directors guarantees at all times equal treatment among
all shareholders. For that purpose, the Board of Directors
safeguards the respect for the minority shareholders’ rights
in compliance with the mechanisms set forth in the Argentine
Business Entities Act and the regulations of the CNV, SEC and NYSE,
which promote the attendance and participation of minority
shareholders at the Shareholders’ Meetings. Therefore, all
CPSA’s shareholders: a) have effective mechanisms to be
represented at the Shareholders’ Meetings; b) have access to
information of the Company, which is publicly available, in a duly
and comprehensive fashion, through the different means established
by the regulation, including its website www.centralpuerto.com.
This website includes the updated information and the contact
information available. This way, shareholders have sufficient
information to consider, approve or reject the matters which are
put for their consideration at the Shareholders’
Meetings.
RP 28. The Company’s Bylaws enable Shareholders to receive
the information packages for the Shareholders’ Meetings
through virtual means and to participate in the Meetings via
electronic means of communication which enable simultaneous
transmission of sound, images and words, ensuring the principle of
equal treatment of all participants.
After
the experience acquired through the period ended December 31, 2020,
the Board of Directors will assess the adequation of the Bylaws to
incorporate the possibility of holding meetings through the use of
electronic means of communication which enable simultaneous
transmission of sound, image and words, ensuring the principle of
equal treatment of all participants, pursuant to the guidelines of
the CNV. This way, the Company aims at the modernization of its
meetings in order to ensure their development in the event of any
contingency.
RP 29. The Dividends Distribution Policy is in line with the
strategy and clearly establishes the criteria, frequency and
conditions under which the dividends distribution will be
performed.
CPSA
has a dividend
policy which was approved by the Board of Directors on March
10, 2020. Pursuant to such document, the Policy establishes
guidelines in order to maintain proper balance between the Company
results, the amounts to be distributed as dividends, the available
liquidity and the investment plans of the Company, so that a clear,
transparent and consistent practice is established for all
shareholders, potential investors and other stakeholders of the
Company.
Once
the guidelines for the dividends distribution established in Items
1 and 2 of the Policy are complied with, the Board of Directors
will prepare a proposal for the dividends distribution for the
consideration of the Shareholders’ Meetings. As a general
rule, the Board of Directors will favor the efficient use of
capital in its recommendations, so that it is aligned with the
strategy of the Company. For that purpose, the Board of Directors
carries out an assessment of several factors, including:
operational results, the financial situation, the level of capital,
development projects and investment and acquisition
opportunities.
Osvaldo
Arturo Reca
Chairman
Central
Puerto S.A.
