UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of March, 2017
EMPRESA DISTRIBUIDORA Y COMERCIALIZADORA NORTE S.A. (EDENOR)
(DISTRIBUTION AND MARKETING COMPANY OF THE NORTH )
(Translation of Registrant's Name Into English)
Argentina
(Jurisdiction of incorporation or organization)
Av. del Libertador 6363,
12th Floor,
City of Buenos Aires (A1428ARG),
Tel: 54-11-4346-5000
(Address of principal executive offices)
(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)
Form 20-F
X
Form 40-F
(Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)
Yes
No
X
(If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-
.)
AUDIT COMMITTEE´S REPORT
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2016
Buenos Aires, March 8, 2017
To the Directors and Shareholders of
EMPRESA DISTRIBUIDORA Y COMERCIALIZADORA
NORTE S.A. (EDENOR S.A.)
Av. Del Libertador 6363, 11th floor
City of Buenos Aires
In our capacity as members of the Audit Committee of Empresa Distribuidora y Comercializadora Norte S.A. (“EDENOR S.A.” or “the Company”) and in compliance with the rules set forth by the Argentine National Securities Commission (
Comisión Nacional de Valores
, hereinafter “CNV”), we are pleased to submit to your consideration the following report on the treatment given by the Audit Committee to the issues for which it is responsible, all for the year ended December 31, 2016 (hereinafter “the fiscal year”).
I.
DUTIES AND RESPONSIBILITIES OF THE AUDIT COMMITTEE
A brief summary of the main duties and responsibilities of the Audit Committee is included below:
-
As regards reporting, internal control and risk management:
A-
To oversee external audit, assess its compliance with independence requirements, its audit plans and performance, expressing an opinion on such issues in the annual report and informing on external auditors´ fees and payment of other services rendered by auditing firms as well as by any other firms for auditing, accounting, IT, internal control and financial and administrative advisory services, as well as any payment for courses delivered in connection with those issues and, if applicable, to express an opinion on:
1.
The Board of Directors´ proposal to appoint or remove external auditors.
2.
Requests for special audits submitted by non-controlling shareholders (none in the fiscal year).
B.
To assess internal audit plans and performance, expressing an opinion thereon in the annual report.
C.
To oversee internal control and, as part of it, the operation and reliability of the administrative and accounting system.
D.
To monitor enforcement of the Company´s information policies on risk-management.
E.
To assess compliance with the rules of conduct applicable to the Company.
F.
To monitor effective operation of a channel to be used by the Company´s officers and personnel to submit accounting, internal control and auditing complaints.
G.
To monitor reliability of the financial information and information on relevant facts submitted to the CNV and to stock exchanges and securities markets working in conjunction with it.
-
Other duties:
H.
To
render an opinion on agreements
executed with related parties for amounts in excess of 1% of the Company’s Shareholders’
Equity, as stated in the most recently approved Balance Sheet, submitted to its
consideration by the Board of Directors or by one of its members in relation to
whether they qualify as arm’s length transactions.
I.
To render an opinion on
any case of conflict of interest, fully disclosing them to the market.
J.
To render an opinion on
the reasonableness
of the proposals made by the Board of Directors in connection with fees and
stock option plans
for directors and managers.
K.
To implement the training
program.
L.
Every year, to prepare an
action plan for the relevant fiscal year and report it to the Board of
Directors and to the Supervisory Committee.
M.
Every year, to analyze adequacy
of the Committee´s Rules and to inform any changes proposed to the Board of
Directors for their review and approval.
N.
To provide each and every
report, opinion or decision required by the rules in force.
O.
To render an opinion on
compliance with legal requirements and on the reasonableness of issuing terms and
conditions, in
case of issue of shares or convertible securities that exclude or restrict preemptive
rights (none in the fiscal year).
P.
To inform on the Board of
Directors´ resolution required in case of other purchases of treasury stock (none
in the fiscal year).
Q.
To render an opinion on
public tender offer of shares under voluntary delisting (none in the fiscal
year).
R.
To consider any other
issue timely delegated upon it by the Board of Directors, as well as to carry
out any other duty imposed on it by the Law (none in the fiscal year).
The following section
describes the relevant duties and responsibilities applicable during the fiscal
year. Nevertheless, for the sake of their understanding, we suggest reading the
relevant provisions (Law No. 26.831, Sections 64, 72, 73, 98, 108 and 110, CNV´s
Rules, Title II, Chapter III, Section V, Paragraph 18) and the Company´s Audit
Committee´s Rules.
II.
TREATMENT GIVEN BY THE
AUDIT COMMITTEE TO THE ISSUES ABOVE
On February 29, 2016, the
Audit Committee approved its work plan for the 2016 fiscal year, which was
submitted to the Board of Directors and to the Supervisory Committee.
Below please find a summary of the
treatment given by the Audit Committee to the issues under its scope of responsibility
as described above, except for those issues mentioned in I.A.2, I.O., I.P., I.Q.
and I.R., as they are not applicable. In such regard, we describe the main tasks performed and
the conclusions in relation to each one of the relevant duties and
responsibilities.
A.
External Audit
On March 8, 2016, the
Board of Directors proposed to appoint Price Waterhouse & Co. S.R.L. as the
Company´s external auditors for the fiscal year, with Mr. Sergio Cravero as
regular auditor and Mr. Norberto Fabián Montero as alternate auditor.
On April 11, 2016, the
Audit Committee accepted the Board of Directors´ proposal.
On April 28, 2016, the
Shareholders´ Meeting appointed said auditors as proposed by the Board of
Directors.
In order to assess if the quality of the work performed by the external auditors provides a reasonable level of assurance on the documents subject to its examination, we have analyzed the following aspects to the extent they relate to such purpose:
1.
Background information of the external auditing firm and particularly personal and professional data of regular and alternate auditors as regards their skills and independence, including, but not limited to, the following tasks:
a.
Reading the sworn statements required under section 104, Law No. 26.831.
b.
Analyzing auditors´ independence policies and quality control.
c.
Collecting information on their training and education, experience, working methods, working teams and clients.
d.
Obtaining a statement by auditors in relation to their independence.
e.
Discussing the issues above with the Company´s officers.
2.
Development of auditing tasks basically through meetings with auditors where the following issues were analyzed and evaluated, among others:
a.
Enforcement of the relevant policies and application of working methods.
b.
General planning of tasks.
c.
Tasks carried out in key areas.
d.
Most important written communications between auditors and the Company´s officers.
e.
Outcome of the most important works and relevant conclusions.
f.
Criteria used in connection with key accounting and auditing matters.
3.
Analysis of reports prepared by auditors upon completion of their work, including, but not limited to, the following:
a.
Audit reports on financial statements as of December 31, 2016 and on the review of the relevant Executive Summary and supplementary information requested by Buenos Aires Stock Exchange (
Bolsa de Comercio de Buenos Aires
) and by CNV.
b.
Limited review reports on condensed interim financial statements as of March 31, June 30 and September 30, 2016 and on the review of the applicable Executive Summaries and of the supplementary information requested by Buenos Aires Stock Exchange and by CNV.
4.
Services rendered by external auditors for a total invoicing amount in the fiscal year of AR$5,070,225 as auditing services and as other services intended to build trust in third parties.
In accordance with the provisions of the Audit Committee´s Internal Rules, it is our responsibility to further inform on fees for services rendered by other professionals during the fiscal year in connection with auditing, accounting, IT, internal control and financial and administrative advisory issues, as well as those related to courses delivered on those issues. In such regard, we inform on the relevant fees for the 2016 fiscal year.
SERVICES RENDERED
|
|
AMOUNT
(IN PESOS)
|
|
|
|
Internal Audit and Internal Control
|
|
2,143,714.-
|
Information System Consulting
|
|
883,048.-
|
Accounting Consulting
|
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164,960.-
|
Tax Consulting
|
|
616,225.-
|
Financial and Administrative Consulting
|
|
919,183.-
|
|
|
4,727,130.-
|
As a result of the work performed as
described and for the purposes above, no significant issue has come to our
attention that, in our opinion, we should mention in relation to the external
auditors appointed by the Meeting for the fiscal year, as regards their
engagement, independence, skills, performance, reports and services requested to
them by the Company during said fiscal year. Accordingly, we believe that
external audit planning and development during the fiscal year were
satisfactory as regards their purposes to offer a proper level of reliability
of the audited information.
B.
Internal Audit
Internal Audit is an independent,
objective, assurance and consulting activity that adds
value to and improves the Company´s operations. It helps the Company
accomplish its organizational objectives by bringing a systematic, disciplined
approach to evaluate and improve the effectiveness of risk management, control,
and governance processes. Internal Audit Management is focused on ascertaining
if the risk management scheme and corporate governance and control processes designed
and executed by management are appropriate and effectively work to ensure that:
a)
risks are properly identified
and managed.
b)
interaction by different groups
across corporate governance is appropriate.
c)
critical information (whether
information on finance, management or operations) is complete, accurate,
reliable and appropriate.
d)
actions taken by
employees are in line with applicable policies, rules, procedures, laws and
regulations.
e)
resources are
economically acquired, efficiently used and properly protected.
f)
goals are achieved and
approved plan and programs are implemented.
g)
quality and continuous
improvement are developed in all the organization´s processes.
Our work in connection
with internal audit does not cover those matters related to the efficiency and
effectiveness of operations as we believe that they are out of our scope of
responsibility.
For the purposes of
evaluating whether Internal Audit Management duly complied with its relevant
duties and responsibilities, we have analyzed the following tasks:
1.
Review
of the following elements, to the extent they are related to the purpose
described above:
a.
Mission,
duties and working methods of the Internal Audit Management in line with its
Internal Audit General Rule.
b.
Organizational
and reporting structures.
c.
Its
staff´s key skills.
d.
Annual
working plan.
2.
Regular
meetings held with the Internal Audit Management to follow-up full
implementation of the audit plan and analyze results of works done.
As a result of our work, performed
for the purposes and with the scope already mentioned, no relevant issue has
come to our attention that, in our opinion, we should mention in relation to
the organization, independence, oversight and implementation of tasks performed
during the fiscal year, or to the communication of their results. In view of
the foregoing, it is our opinion
that planning and development of the internal audit work performed by said
Management during the fiscal year were appropriate in relation to its purposes
as mentioned before, except that we express no opinion on the work done in
relation to the efficiency and effectiveness of operations as they are out of
our scope of responsibility.
C.
Internal Control
As described above, internal control
comprises the rules, systems, skills and attitudes of the personnel intended,
among other purposes, to protect the shareholders’ equity, ensure reliability
and appropriate disclosure of the Company´s financial information and relevant
events and emphasize compliance with laws, regulations and rules passed by the
Company, particularly those related to accounting and financial matters.
Our work in connection
with internal control did not cover those matters related to the efficiency and
effectiveness of operations as we believe that they are out of our scope of responsibility.
In order to assess if the Company’s
internal control in general, and its administrative and accounting system in
particular (an integral part thereof), duly fulfills the purposes mentioned
above, to which we have limited the scope of our work, we have performed the
following tasks:
1.
Discussion of matters
related to the Company´s internal control and its administrative and accounting system with the Company´s key
officers.
2.
Consideration
of tasks mentioned in item B above.
3.
Analysis
of related work performed by external auditors and their results.
4.
Analysis
of tasks performed by the Company in compliance with the applicable provisions
of the Sarbanes-Oxley Act:
As the Company is subject to and governed by the
provisions of the Sarbanes-Oxley Act, it must perform all tasks required to
certify internal control as prescribed by said Act.
The Audit Committee has been informed of the tasks
already performed and has analyzed their results.
The Audit Committee need not make any comment on the
work done or the results obtained.
As a result of our work, performed
for the purposes and with the scope already mentioned, no relevant issue has
come to our attention that, in our opinion, we should mention particularly in
relation to the Company´s internal control and administrative and accounting
system, that was properly dealt with by the Company during the fiscal year, limiting this
conclusion to the internal control aspects related to protection of the Company´s
shareholders’ equity,
compliance
with applicable rules and regulations and reliability
and appropriate disclosure of financial-accounting information and relevant
events.
D.
Risk Management
Audit Committee´s responsibilities
in relation to risk management consist in overseeing implementation of the Company´s
information policies on risk management.
For the purposes of
evaluating implementation of the Company´s information policies on risk
management, we have conducted the following tasks:
1.
Reading
the Company’s rule on Risk Analysis.
2.
Considering
the work performed by the Company in that sense up to the date hereof and its
results.
3.
Defining
the extent to which identified and assessed risks, if applicable, were properly
informed, in accordance with statutory, regulatory, professional (on accounting
issues) and the Company´s applicable rules.
As a result of our work,
performed for the purposes and with the scope already mentioned, no relevant
issue has come to our attention that, in our opinion, we should mention as a
deviation from the implementation of the Company´s information policies on risk
management
nor from statutory or regulatory
rules and from the accounting profession as regards risk information.
E.
Rules of Conduct
In relation to our
responsibility of assessing compliance with applicable rules of conduct, our
work was focused, as regards members of the Company´s governing body and other
officers reporting to accounting and financial areas, on matters related to the
transparency, reliability and adequate disclosure of financial information and
relevant events and due application and protection of Shareholders´ Equity. In
this respect, we have considered those standards established by statutory, regulatory
and the Company’s own rules and regulations.
Our work was limited to
those matters of which we were aware in our capacity as Company´s Directors, of
works conducted in relation to other matters under the Committee´s scope of
responsibility (particularly those mentioned in items B and C) and the
following tasks:
1.
Reviewing
most important rules approved by the Company, including the Code of Ethics and
related standards and policies.
2.
Considering
the Supervisory Committee´s reports.
3.
Discussing
all issues above with the Company´s key officers.
As a result of our work,
performed for the purposes and with the scope already mentioned, no relevant
issue has come to our attention that, in our opinion, we should mention in
relation to the compliance with the rules of conduct referred to above.
F.
Complaints related to
Accounting and Auditing Matters
In compliance with the
rules applicable to the Company, it has implemented a complaint channel for all
persons working in the Company to submit to the Audit Committee´s consideration
any claims and complaints related to accounting, internal control and auditing
matters that they may deem appropriate, guaranteeing concealed identity and
confidentiality upon the complainant´s request.
We believe that said
channel has worked effectively and helped fulfill the Audit Committee´s
responsibilities as mentioned above.
The Committee has no
issue to mention or note in connection with operation of the complaint cannel, analysis
of information received or the results obtained as regards its scope of
responsibility.
G.
Financial Information and
Information on Relevant Events
For the purposes of
assessing the reliability of the financial information and information on
relevant events filed with the CNV and with the markets where the Company´s
shares are traded, we have conducted the tasks described below.
Our responsibility in this
respect does not include performance of examinations according to audit
standards and therefore, we have not performed them. The scope of our work has
been limited to the tasks described below and therefore, our conclusion on the
information included below should not be interpreted as a professional opinion
on it but rather as a description of the results of tasks performed. In
relation to the financial statements for the fiscal year, external auditors and
the Supervisory Committee are the parties responsible for issuing the
applicable reports. We have relied, in part, on the work carried out by them.
Our work covered the
following documents:
a. The financial
statements for the fiscal year ended December 31, 2016 and the interim financial
statements for the periods ended March 31, June 30 and September 30, 2016.
b.
The executive summaries required by the CNV´s Rules for the fiscal year and for
the interim periods mentioned in the preceding item.
c. The supplementary
information required by the Buenos Aires Stock Exchange and CNV for the fiscal
year and for the interim periods mentioned above.
d. The Board of Directors´
Annual Report for the fiscal year.
e. Communications on
relevant events and on key financial information other than the financial
information referred to above filed with the CNV and with the markets where the
Company´s shares are traded.
In relation to these
documents, and for the purpose and with the scope already mentioned, we have
carried out the following tasks:
1.
Analysis
of the main accounting policies of the Company.
2.
Consideration
of the work performed as provided for in items A to F above and their results
as regards the documents described above.
3.
Discussion
of key accounting matters with external auditors, members of the Supervisory
Committee and the Company´s key officers.
4.
Analysis
of the documents mentioned in items a) to c) hereof, as applicable and prior to
their issue, with external auditors, members of the Supervisory Committee and the Company´s
key officers.
5.
Analysis
of the Annual Report for the fiscal year, of the work performed on it by the
external auditor and its discussion with the Company´s key officers.
6.
Analysis
of the information mentioned in item e), considering the provisions of
paragraph 7 and discussing it with the Company´s relevant officers as deemed necessary.
7.
Verification of the
inclusion of all the relevant events and circumstances of which we were aware
at the time of its issue.
8.
Consideration
of related tasks to be conducted by the Disclosure Committee.
As a result of our work,
performed for the purposes and with the scope already mentioned and that
comprised the tasks listed above, no material comment has come to our
attention, that, in our opinion, should be made to the information mentioned above
nor to the policies, procedures
or controls related to their preparation.
H.
Agreements with Related
Parties
Our responsibility in this respect
consists in approving transactions with related parties for a relevant amount
submitted to our consideration by the Company´s Board of Directors or by any of
its members and expressing an opinion on whether they have been agreed as arm’s
length transactions.
Pursuant to Act No. 26.831, Section
72, we have considered as relevant amount that amount equal to 1% of the
Shareholders´ Equity, as reflected in the Balance Sheet most recently approved
by the Shareholder´s Meeting.
In fulfillment of our responsibility,
during the fiscal year, on February 29, 2016, we expressed a favorable opinion
as regards the contractual terms and conditions with Orígenes Seguro de Vida.
During the fiscal year, the Board of
Directors has not approved any other agreement with related parties for a
relevant amount nor are we aware of any other relevant agreement with related
parties.
I.
Conflicts of Interest
During the tasks
performed by us, both in our capacity as members of the Audit Committee and as
the Company´s Directors, we were not aware of any relevant case in which a
member of any governing body has been involved in any conflict of interest, in breach
of statutory, regulatory and the Company´s rules and regulations.
In addition, we inform
that:
1.
After
reading and conceptually analyzing the financial statements, we verified that
the information on transactions with parent companies, subsidiaries and related
companies is posted on them by the Company as provided for by statutory,
regulatory and professional applicable rules.
2.
We
have discussed with the external auditors the work performed by them in
connection with the reliability of the information mentioned in the item above.
3.
We
have verified that the Supervisory Committee has made no comment in that
respect in its reports.
Based on the work
performed by us, as described above, we were not aware of any relevant comment
to be made by us as regards our responsibility to inform any case of conflict
of interest.
J.
Proposal of Directors´
Fees
In relation to our responsibility of
expressing an opinion on the reasonability
of fees
payable to Directors, we inform that on April 11, 2016, the Committee decided
on the reasonability
of the proposal
of fees payable to Directors
for 2015 fiscal year.
K.
Training Plan
On November 24, 2016, the Committee
approved its new training plan for the next fiscal year. The Committee has
fully executed its prior training plan.
L.
Work Plan
On February 23, 2017, the
Committee approved its work plan for 2017 fiscal year.
M.
Adequacy of the
Committee’s Rules
The Committee has reviewed
the adequacy of the Committee´s Rules and resolved that no changes were necessary.
N.
Reports Issued
As set forth in the paragraphs
above, the Committee has issued all relevant and/or required reports (see
paragraphs A, H and J).
III.
GENERAL CONCLUSION
As described above, in our capacity as members of the Company´s Audit Committee, we have carried out several tasks in fulfillment of the responsibilities assumed by us pursuant to statutory, regulatory and the Company´s rules and regulations.
As a result of the tasks described above, and as already expressed, we are not aware of any situation that, in our opinion, should be particularly mentioned in this report in relation to the responsibilities we have assumed.
Eduardo L. Llanos
|
Lucas Amado
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Maximiliano Fernández
|
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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Empresa Distribuidora y Comercializadora Norte S.A.
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By:
|
/s/ Leandro Montero
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Leandro Montero
|
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Chief Financial Officer
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Date: March 14, 2017
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