EX-99.1 2 ex99-1.htm EX-99.1

Free translation from the original prepared in Spanish for publication in Argentina

 

 

 

 

 

 

 

 

 

 

 

UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

 

AS OF MARCH, 31, 2021

AND FOR THE THREE-MONTH PERIOD THEN ENDED AS OF MARCH, 31, 2021

PRESENTED IN COMPARATIVE FORMAT

 

 

 
 

 

 

 

Free translation from the original prepared in Spanish for publication in Argentina

 

 

REVIEW REPORT ON THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

 

To the President and Directors of

Pampa Energía S.A.

Legal address: Maipú, 1

Autonomous City of Buenos Aires

Tax Code No.: 30-52655265-9

 

Introduction

 

We have reviewed the accompanying consolidated condensed interim financial statements of Pampa Energía S.A. (hereinafter called “the Company”) and its subsidiaries, including the consolidated statement of financial position at March 31, 2021, the consolidated statement of comprehensive income for the three-month period ended March 31, 2021, the consolidated statements of changes in equity and of cash flows for the three-month period then ended, and the selected explanatory notes.

 

The balances and other information for the fiscal year 2020 and its interim periods is an integral part of the Financial Statements mentioned above; therefore, they must be considered in connection with those Financial Statements.

 

Board's responsibility

 

The Board of Directors of the Company is responsible for the preparation and presentation of the financial statements in accordance with International Financial Reporting Standards, adopted by the Argentine Federation of Professional Councils in Economic Sciences (FACPCE, for its acronym in Spanish) as professional accounting standards and included by the National Securities Commission (CNV, for its acronym in Spanish) in its regulations, as approved by the International Accounting Standards Board (IASB), and is therefore responsible for the preparation and presentation of the consolidated condensed interim financial statements mentioned in the first paragraph, in accordance with International Accounting Standard 34 Interim Financial Information (IAS 34). 

 

Scope of our review

 

Our review was limited to the application of the procedures established under International Standards on Review Engagements ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity, adopted as a review standard in Argentina by Technical Pronouncement No. 33 of the FACPCE and approved by the International Auditing and Assurance Standards Board (IAASB). A review of interim financial information consists of inquiries of Company staff responsible for preparing the information included in the consolidated condensed interim Financial Statements and of analytical and other review procedures. This review is substantially less in scope than an audit examination conducted in accordance with international standards on auditing and consequently it does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion on the financial position, the consolidated comprehensive income, or the consolidated cash flows of the Company.

 

 

Price Waterhouse & Co. S.R.L., Bouchard 557, piso 8°, C1106ABG - City Autonomous of Buenos Aires

T: +(54.11) 4850.0000, F: +(54.11) 4850.1800, www.pwc.com/ar

 

 

Price Waterhouse & Co. S.R.L. is a member firm of the global network of PricewaterhouseCoopers International Limited (PwCIL). Each of the firms is a separate legal entity that does not act as a proxy for PwCIL or any other network member firm.

 

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Conclusion

On the basis of our review, nothing has come to our attention that make us think that the consolidated condensed interim Financial Statements mentioned in the first paragraph of this report have not been prepared, in all material respects, in accordance with International Accounting Standard 34.

 

Report on compliance with current regulations

 

In accordance with current regulations, we report, in connection with Pampa Energía S.A., that:

a)   the consolidated condensed interim financial statements of Pampa Energía S.A. are recorded to the “Inventory and Balance Sheet” book, and complies in what is a matter of our competence, with the provisions of the General Companies Law and in the pertinent resolutions of the National Securities Commission;

 

b)   the individual condensed interim financial statements of Pampa Energía S.A. arise from accounting records kept in their formal aspects in accordance with legal regulations,

 

c)    we have read the Summary of Activity (“Reseña Informativa”), on which, as regards those matters that are within our competence, we have no observations to make;

 

d)   as of March 31, 2021 the debt accrued by Pampa Energía S.A. in favor of the Argentine Integrated Social Security System according to the Company's accounting records amounted to $ 151.1 millions, none of which was claimable at that date;

 

Autonomous City of Buenos Aires, May 11, 2021.

 

 

PRICE WATERHOUSE & CO. S.R.L.

 

 

 

(Partner)

Carlos Martín Barbafina

 

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GLOSSARY OF TERMS

The following are not technical definitions, but they are helpful for the reader’s understanding of some terms used in the notes to the unaudited consolidated condensed interim financial statements of the Company.

 

Terms   Definitions
ADR   American Depositary Receipt
CAMMESA   Compañía Administradora del Mercado Eléctrico Mayorista S.A.
CB   Corporate Bonds 
CIESA   Compañía de inversiones de energía S.A.
Citelec   Compañía Inversora en Transmisión Eléctrica Citelec S.A.
CNV   Comisión Nacional de Valores – Argentine Securities Commission
CTB   Central Térmica Barragán S.A
Ecuador TLC   Ecuador TLC S.A.
Edenor   Empresa Distribuidora y Comercializadora Norte S.A.
ENARGAS   National Regulator of Gas 
ENRE    National Regulatory Authority of Electricity 
Greenwind   Greenwind S.A.
HIDISA   Hidroeléctrica Diamante S.A.
HINISA   Hidroeléctrica Los Nihuiles S.A.
IASB   International Accounting Standards Board
MLC   Foreign Exchange Market
NIC   International Accounting Standards 
NIIF   International Financial Reporting Standards
NYSE   New York Stock Exchange
OCP   Oleductos de Crudo Pesados Ltd
PACOSA   Pampa Comercializadora S.A.
PEB   Pampa Energía Bolivia S.A. 
PEN   National Executive Branch
PISA   Pampa Inversiones S.A.
Refinor   Refinería del Norte S.A.
RTI   Tariff Structure Review 
SE   Secretary of Energy
SEC   Security and Exchange Comission
SEE   Secretary of Electrical Energy

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GLOSSARY OF TERMS: (Continuation)

Terms   Definitions
TGS   Transportadora de Gas del Sur S.A.
TJSM   Termoeléctrica José de San Martín S.A.
TMB   Termoeléctrica Manuel Belgrano S.A.
The Company / Pampa   Pampa Energía S.A.
The Group   Pampa Energía S.A. and its subsidiaries
Transba   Empresa de Transporte de Energía Eléctrica por Distribución Troncal de la Provincia de Buenos Aires Transba S.A.
Transelec   Transelec Argentina S.A.
Transener   Compañía de Transporte de Energía Eléctrica en Alta Tensión Transener S.A.
US$   U.$. Dollar

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UNAUDITED CONSOLIDATED CONDENSED INTERIM

STATEMENT OF COMPREHENSIVE INCOME

For the three-month period ended March 31, 2021

presented in comparative format (see Note 5.1)

(In millions of Argentine Pesos (“$”))

 

  Note   03.31.2021   03.31.2020
           
Revenue 8   28,635   18,036
Cost of sales 9   (16,353)   (11,161)
Gross profit     12,282   6,875
           
Selling expenses 10.1   (542)   (599)
Administrative expenses 10.2   (2,016)   (1,536)
Exploration expenses 10.3   (7)   (4)
Other operating income 10.4   976   709
Other operating expenses 10.4   (3,050)   (458)
Impairment of property, plant and equipment, intangible assets and inventories     -   (4,316)
Impairment of financial assets     (103)   (69)
Share of profit from associates and joint ventures 5.2.2   2,226   2,069
Operating income      9,766   2,671
           
Finance income 10.5   165   142
Finance costs 10.5   (3,986)   (2,643)
Other financial results 10.5   (2,061)   (409)
Financial results, net     (5,882)   (2,910)
Profit before income tax     3,884   (239)
Income tax 10.6   (715)   439
Profit of the period from continuing operations     3,169   200
Profit of the period from discontinued operations 5.1   525   743
Profit of the period     3,694   943
           
           
Other comprehensive income           
Items that will not be reclassified to profit or loss          
Exchange differences on translation     10,256   6,435
Items that may be reclassified to profit or loss          
Exchange differences on translation     1,165   62
Other comprehensive income of the period from continuing operations     11,421   6,497
Other comprehensive income of the year from discontinued operations 5.1   4,435   4,722
Other comprehensive income of the period     15,856   11,219
Total comprehensive income of the period     19,550   12,162

 

 

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UNAUDITED CONSOLIDATED CONDENSED INTERIM

STATEMENT OF COMPREHENSIVE INCOME (Continuation)

For the three-month period ended March 31, 2021

presented in comparative format (see Note 5.1)

(In millions of Argentine Pesos (“$”))

 

 

 

  Note   03.31.2021   03.31.2020
Total income of the period attributable to:          
Owners of the company     3,152   775
Non - controlling interest     542   168
      3,694   943
           
Total income of the period attributable to owners of the Company:          
Continuing operations      3,150   360
Discontinued operations      2   415
      3,152   775
           
Total comprehensive income of the period attributable to:          
Owners of the Company     15,317   9,795
Non - controlling interest     4,233   2,367
      19,550   12,162
           
Total comprehensive  income of the period attributable to owners of the Company:          
Continuing operations      14,530   4,658
Discontinued operations      787   5,137
      15,317   9,795
           
Earnings per share attributable to the equity holders of the Company during the period          
Basic and diluted earnings per share from continuing operations 13.2   2.17   0.22
Basic and diluted earnings per share from discontinued operations 13.2   0.00   0.25
Total basic and diluted earnings per share  13.2   2.17   0.47

 

The accompanying notes are an integral part of these unaudited consolidated condensed interim financial statements.

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UNAUDITED CONSOLIDATED CONDENSED INTERIM STATEMENT

OF FINANCIAL POSITION

As of March 31, 2021

presented in comparative format

(In millions of Argentine Pesos (“$”))

 

  Note   03.31.2021   12.31.2020
ASSETS          
NON-CURRENT ASSETS          
Property, plant and equipment 11.1   147,018   135,445
Intangible assets 11.2   3,754   3,455
Right-of-use assets     926   867
Deferred tax assets 11.3   9,230   9,082
Investments in joint ventures and associates 5.2.2   56,571   46,229
Financial assets at amortized cost 12.1   9,222   8,428
Financial assets at fair value through profit and loss 12.2   1,030   942
Other assets     60   57
Trade and other receivables 12.3   3,302   3,631
Total non-current assets     231,113   208,136
           
CURRENT ASSETS          
Inventories 11.4   12,471   9,766
Financial assets at amortized cost 12.1   1,144   2,062
Financial assets at fair value through profit and loss 12.2   28,340   27,382
Derivative financial instruments     8   1
Trade and other receivables 12.3   31,622   28,678
Cash and cash equivalents 12.4   9,254   11,900
Total current assets     82,839   79,789
Assets classified as held for sale 5.1   141,419   123,603
Total assets     455,371   411,528

 

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UNAUDITED CONSOLIDATED CONDENSED INTERIM STATEMENT

OF FINANCIAL POSITION (Continuation)

As of March 31, 2021

presented in comparative format

(In millions of Argentine Pesos (“$”))

 

  Note   03.31.2021   12.31.2020
SHAREHOLDERS´ EQUITY          
Share capital 13   1,451   1,451
Share capital adjustment     7,605   7,605
Share premium     19,950   19,950
Treasury shares     4   4
Treasury shares adjustment     24   24
Treasury shares cost     (2,363)   (235)
Legal reserve     3,703   3,703
Voluntary reserve     60,899   60,899
Other reserves     (693)   (759)
Retained earnings      35,279   (1,825)
Other comprehensive income     7,643   29,430
Equity attributable to owners of the company     133,502   120,247
Non-controlling interest     32,864   28,631
Total equity     166,366   148,878
           
LIABILITIES          
NON-CURRENT LIABILITIES          
Investments in joint ventures  and associates 5.2.2   168   161
Provisions 11.5   12,805   9,326
Income tax  11.6   11,540   11,004
Taxes payables     128   128
Deferred tax liabilities 11.3   -   93
Defined benefit plans     1,710   1,460
Borrowings 12.5   126,169   115,428
Trade and other payables 12.6   1,542   1,418
Total non-current liabilities      154,062   139,018
           
CURRENT LIABILITIES          
Provisions 11.5   1,502   1,379
Income tax  11.6   556   897
Taxes payables     3,751   3,030
Defined benefit plans     289   298
Salaries and social security payable      1,316   1,935
Derivative financial instruments     5   40
Borrowings 12.5   17,577   20,377
Trade and other payables 12.6   11,074   9,778
Total current liabilities      36,070   37,734
Liabilities associated to assets classified as held for sale 5.1   98,873   85,898
Total liabilities      289,005   262,650
Total liabilities and equity     455,371   411,528

 

The accompanying notes are an integral part of these unaudited consolidated condensed interim financial statements.

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UNAUDITED CONSOLIDATED CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY

For the three-month period ended March 31, 2021

presented in comparative format

(In millions of Argentine Pesos (“$”))

 

  Equity holders of the company   Retained earnings            
  Share capital   Share capital adjustment   Share premium   Treasury shares   Treasury shares adjustment   Treasury shares cost   Legal reserve   Voluntary reserve   Other reserves (1)   Other comprehensive income / (loss)    Retained earnings (Accumulated losses)   Subtotal   Non-controlling interest   Total equity
Balance as of December 31, 2019 1,677   9,826   19,570   71   27   (2,527)   1,753   17,727   (771)   15,668   51,844   114,865   29,397   144,262
Constitution of legal and voluntary reserve -   -   -   -   -   -   -   -   -   -   -   -   -   -
Capital reduction -   -   -   -   -   -   -   -   -   -   -   -   -   -
Stock compensation plans 1   3   (12)   (1)   (3)   45   -   -   (16)   -   -   17   -   17
Acquisition of own shares  (86)   -   401   86   -   (2,554)   -   -   -   -   -   (2,153)   (481)   (2,634)
Dividends provided for pay -   -   -   -   -   -   -   -   -   -   -   -   -   -
Profit for the three-month period -   -   -   -   -   -   -   -   -   -   775   775   168   943
Other comprehensive income for the three-month period -   -   -   -   -   -   -   -   -   3,455   5,565   9,020   2,199   11,219
Balance as of March 31, 2020 1,592   9,829   19,959   156   24   (5,036)   1,753   17,727   (787)   19,123   58,184   122,524   31,283   153,807
                                                       
Constitution of legal and voluntary reserve  -   -   -   -   -   -   1,950   49,894   -   -   (51,844)   -   -   -
Capital reduction -   -   -   (293)   (2,224)   9,239   -   (6,722)   -   -   -   -   (1,546)   (1,546)
Stock compensation plans -   -   -   -   -   -   -   -   28   -   -   28   -   28
Acquisition of own shares (141)   (2,224)   (9)   141   2,224   (4,438)   -   -   -   -   -   (4,447)   (11)   (4,458)
Dividends provided for pay -   -   -   -   -   -   -   -   -   -   -   -   (519)   (519)
Loss for the complementary nine-month period -   -   -   -   -   -   -   -   -   -   (32,222)   (32,222)   (8,689)   (40,911)
Other comprehensive income for the complementary nine-month period -   -   -   -   -   -   -   -   -   10,307   24,057   34,364   8,113   42,477
Balance as of December 31, 2020 1,451   7,605   19,950   4   24   (235)   3,703   60,899   (759)   29,430   (1,825)   120,247   28,631   148,878

 

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UNAUDITED CONSOLIDATED CONDENSED

INTERIM STATEMENT OF CHANGES IN EQUITY (Continuation)

For the three-month period ended March 31, 2021

presented in comparative format

(In millions of Argentine Pesos (“$”))

 

 

 

  Equity holders of the company   Retained earnings            
  Share capital   Share capital adjustment   Share premium   Treasury shares   Treasury shares adjustment   Treasury shares cost   Legal reserve   Voluntary reserve   Other reserves (1)   Other comprehensive income / (loss)    Retained earnings (Accumulated losses)   Subtotal   Non-controlling interest   Total equity
Balance as of December 31, 2020 1,451   7,605   19,950   4   24   (235)   3,703   60,899   (759)   29,430   (1,825)   120,247   28,631   148,878
Acquisition of own shares -   -   -   -   -   (2,148)   -   -   -   -   -   (2,148)   -   (2,148)
Stock compensation plans -   -   -   -   -   20   -   -   66   -   -   86   -   86
Profit for the three-month period -   -   -   -   -   -   -   -   -   -   3,152   3,152   542   3,694
Other comprehensive income for the three-month period -   -   -   -   -   -   -   -   -   5,849   6,316   12,165   3,691   15,856
Balance as of March 31, 2021 1,451   7,605   19,950   4   24   (2,363)   3,703   60,899   (693)   35,279   7,643   133,502   32,864   166,366

 

 

The accompanying notes are an integral part of these unaudited consolidated condensed interim financial statements

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UNAUDITED CONSOLIDATED CONDENSED INTERIM

STATEMENT OF CASH FLOWS

For the three-month period ended March 31, 2021

presented in comparative format (see Note 5.1)

(In millions of Argentine Pesos (“$”))

 

  Note   03.31.2021   03.31.2020
Cash flows from operating activities:          
Profit of the period from continuing operations     3,169   200
Adjustments to reconcile net profit to cash flows generated by operating activities: 14.1   10,872   8,445
Changes in operating assets and liabilities 14.2   (2,630)   (391)
Net cash generated by operating activities from discontinued operations 5.1   4,096   2,099
Net cash generated by operating activities     15,507   10,353
Cash flows from investing activities:          
Payment for property, plant and equipment     (2,204)   (3,429)
Payment for public securities and shares, net     (2,570)   (4,478)
Payments for capital integration in associates      (772)   (190)
Collections for sales of shares in companies and property, plant and equipment     2   38
Dividends received     -   119
(Pay) Colletionfrom loans, net     (71)   141
Recovery of investment funds, net     1,496   10,552
Net cash (used in) generated by investing activities from discontinued operations 5.1   (2,113)   86
 Net cash (used in) generated by investing activities     (6,232)   2,839
           
Cash flows from financing activities:          
Proceeds from borrowings     2,503   200
Payment of  borrowings     (4,616)   (4,214)
Payment of  borrowings interests     (4,687)   (4,123)
Payment for acquisition of own shares     (2,148)   (2,634)
Repurchase and redemption of corporate bonds     -   (2,501)
Payments of leases     (43)   (80)
Net cash used in financing activities from discontinued operations 5.1   (114)   (66)
Net cash used in financing activities     (9,105)   (13,418)
           
Increase (Decrease) in cash and cash equivalents     170   (226)
           
Cash and cash equivalents at the begining of the year 12.4   11,900   13,496
Cash and cash equivalents at the begining of the year reclasified to assets classified as held for sale     4,362   -
Exchange difference generated by cash and cash equivalents     (280)   (487)
Cash and cash equivalents at the end of the period reclasified to assets classified as held for sale     (6,898)   -
Increase (decrease) in cash and cash equivalents     170   (226)
Cash and cash equivalents at the end of the period 12.4   9,254   12,783

 

 

The accompanying notes are an integral part of these unaudited condensed interim financial statements

 

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NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM

FINANCIAL STATEMENTS

For the three-month period ended March 31, 2021

presented in comparative format

(In millions of Argentine Pesos (“$”))

 

 

NOTE 1: GENERAL INFORMATION

1.1 General information of the Company

The Company is a fully integrated power company in Argentina which directly and through its subsidiaries, participates in the electric energy and gas value chains.

In the generation segment, the Company, directly and through its subsidiaries and joint ventures, has a 4,955 MW installed capacity, which represents approximately 12% of Argentina’s installed capacity, being one of the fourth largest independent generator in the country. Additionally, the Company is currently undergoing a process to expand its capacity by 295 MW.

In the distribution segment, the Company has a controlling interest in Edenor, the largest electricity distributor in Argentina, which has approximately 3.2 million customers and a concession area covering the Northern part of the City of Buenos Aires and Northwestern Greater Buenos Aires On account of the divestment mentioned in Note 5.1, all Edenor’s assets and liabilities have been classified as held for sale as of March 31, 2021, and the associated results and cash flows, for each of the three-month periods ended March 31, 2021 and 2020, are disclosed under discontinued operations.

In the oil and gas segment, the Company is one of the leading oil and natural gas producers in Argentina, with operations in 13 production areas and 5 exploratory areas and a production level of 6.7 million m3/day of natural gas and 4.2 thousand barrels of oil equivalent per day for oil during the three-month period ended March 31, 2021. Its main natural gas production blocks are located in the Provinces of Neuquén and Río Negro.

In the petrochemical segment the operations are based in the Argentine Republic, where the Company operates three high-complexity plants that produce styrene, synthetic rubber and polystyrene, with a local market share between 85% and 97%.

Finally, through its holding and others segment, the Company participates in the electricity and gas transportation businesses. In the transmission business, the Company jointly controls Citelec, which has a controlling interest in Transener, a company engaged in the operation and maintenance of a 21,104 km high-voltage electricity transmission network in Argentina with an 85% share in the Argentine electricity transmission market. In the gas transportation business, the Company jointly controls CIESA, which has a controlling interest in TGS, a company holding a concession for the transportation of natural gas with 9,231 km of gas pipelines in the center, west and south of Argentina, and which is also engaged in the processing and sale of natural gas liquids through the Cerri Complex, located in Bahía Blanca, in the Province of Buenos Aires. Besides, the Company owns a 28.5% direct interest in Refinor, which has a refinery with an installed capacity of 25.8 kb of oil per day and 91 gas stations. Additionally, the segment includes advisory services provided to related companies.

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Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

NOTE 1: (Continuation)

 

1.2Economic context in which the Company operates

The Company operates in a complex economic context, which volatility was deepened by the outbreak of the COVID-19 locally and internationally.

In 2021, as a result of the new increase in infection levels, the governments of different countries in the world, including the Argentine Government, temporarily reimplemented some measures, such as restrictions on movement of the population.

As regards measures that directly affected the generation sector’s economic and financial situation, it is worth highlighting that, despite the claims made by generators, the suspension of the automatic adjustment mechanism for the spot remuneration —which applications was scheduled as from March 2020 pursuant to SE Resolution No. 31/20— continued in the first quarter of 2021 and, if maintained, may compromise the sector’s liquidity and creditworthiness, hindering the proper maintenance of assets and placing the availability of power facilities at stake.

Besides, recently certain social conflicts and wage protest demonstrations mostly during the month of April, prevented the freedom of movement on routes in the Province of Neuquén and, even though no significant impact has been verified on the production by the Company’s assets in this basin during the protest roadblocks, they have affected the ordinary execution of the works committed by the Company under the GasAr Plan, and may hinder the timely and proper compliance with the agreed investment plan and the committed volumes of gas over the following months. The Company has sent the respective Force Majeure communications to the SE, CAMMESA and the Gas Distribution Companies with which it has executed gas supply agreements for the volumes awarded under the GasAr Plan.

It is impossible to foresee how measures will continue evolving and their impact on the economy in general and the Company in particular, or to which extent the Company’s business and the results of its operations will be affected in the future.

The Company’s Management permanently monitors the evolution of the variables affecting its business to define its course of action and identify potential impacts on its assets and financial position.

The Company’s Consolidated Condensed Interim Financial Statements should be read in the light of these circumstances.

 

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Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

 

NOTE 2: REGULATORY FRAMEWORK

 

2.1 Generation

 

2.1.1 Fuel supply for thermal power plants

 

As from the application of the GasAr Plan, an operating assignment scheme was established for firm transportation and gas contracts entered into by generators. Under this assignment, agents should waive all claims regarding the application of SE Resolution No. 354/20, which established a new dispatch order for generation units based on the fuel supplied for their operation in accordance with a centralized dispatch scheme. The Company executed this assignment with CAMMESA, setting certain guidelines for the calculation of fuel costs to support their Energía Plus contracts.

 

2.1.2 Seasonal Programming

 

SE Resolution No. 24/21, published in the B.O. on January 15, 2021, approved the seasonal programming for the November 2020-April 2021 period. Seasonal prices remain unchanged until the month of April 2021, with reference prices being those in effect since 2019. In turn, the stabilized price set by SEE Provision No. 75/18 for transmission in the extra high voltage system and the distributor-based main distribution price have remained unchanged.

 

As from April 2021, pursuant to SE Resolution No. 131/21 (amended by SE Resolutions No. 154/21 and 204/21), the reference price for power for the GUDI peak demand increases from $ 3,042/MWh to $ 5,748/MWh (except for public health and education organizations and agencies), reducing the gap with the actual cost and, consequently, subsidies. The remaining prices for electricity applicable to the end demand have not been modified.

 

2.2 Natural Gas Market

 

2.2.1 Argentine Natural Gas Production Promotion Plan (“GasAr Plan”)

 

On March 9, 2021 Resolution No. 169/21 was published in the BO, which awarded natural gas volumes offered under the GasAr Plan, Round II Tender. In this sense, the Company was awarded a volume of 0.70 million m3/day, 0.90 million m3/day and 1 million m3/day for the months of June, July and August-September 2021, respectively, and 0.86 million m3/day to meet the winter peak demand for the years 2022 through 2024, at a price of US$ 4.68 MMbtu.

 

With this tender, Pampa’s injection commitment increases to 9 million m3 per day for the 2021-2024 winter periods which, compared to 2020, represents a 15% year-on-year production increase and a 28% increase in the winter period, the months with the largest gas supply needs in the country.

 

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Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

 

NOTE 2: (Continuation)

 

2.2.2 Natural Gas Export Procedure

 

On April 27, 2021, pursuant to SE Resolution No. 360/21, a new procedure was regulated for the authorization of natural gas exports that contemplates the firm condition and the preferential order for GasAr Plan’s awardees and abrogates the previous procedure established by SGE Resolution No. 417/19 and SHC Provision No. 284/19. Furthermore, prior to the granting of each permit, the enforcement authority will perform a comprehensive and systemic analysis safeguarding the supply to the Argentine domestic market since, once authorized on a firm basis, it may not be further reviewed.

 

2.3 Gas transportation

 

TGS’s tariff situation

 

The public hearing to discuss the transitional tariff regime pursuant to Executive Order No. 1,020/20 took place on March 16, 2021. As planned, in the hearing TGS submitted its tariff increase proposal, calculated at 58.6%, effective as from April 1, 2021. This increase has been calculated based on the financial needs to meet operating and financial costs, capital expenditures and taxes, which were calculated taking into consideration the evolution of the inflation rate over a 12-month period as from its beginning. The requested increase contemplates no return, but only the funds necessary to meet obligations.

 

Additionally, in the public hearing TGS denied and rejected the arguments put forward by ENARGAS in its audit and used in support of Executive Order No. 1,020/20 to convene the hearing, which consider that the current natural gas transportation tariff is not fair, reasonable or transparent, specifically regarding the questioning of the update factors used in the RTI finished in March 2017.

 

On April 28, 2021, the ENARGAS submitted to TGS a final consolidated project for a Transitory Renegotiation Agreement pursuant to Executive Order No. 1,020/20, whereby:

 

-It does not grant a transitory tariff update, keeping unchanged the tariff schemes approved by ENARGAS in April 2019.
-It establishes that as from May 2021 and until the Final Renegotiation Agreement enters into effect, the ENARGAS will recalculate the transportation tariffs effective at the time with validity as from April 1, 2022.
-It does not establish a mandatory investments plan.
-It establishes the prohibition to: i) distribute dividends; and ii) early cancel financial and commercial debts taken on with shareholders, acquire other companies or grant loans.

 

On April 30, 2021 and through a note sent to this entity, TGS expressed that, given the context in which it develops its activities and the proposed terms and conditions, it is not feasible for TGS to enter into the Transitory Renegotiation Agreement, which does not recognize any tariff increase for the company.

 

As of the date of issuance of these Consolidated Condensed Interim Financial Statements, the ENARGAS has not yet expressed its position on the answer submitted by TGS. Within this framework, TGS is analyzing the actions to take to safeguard its rights and thus attain a fair and reasonable tariff for natural gas transportation.

 

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Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

 

NOTE 2: (Continuation)

 

2.4 Transmission

 

Transener and Transba’s tariff situation

 

On January 19, 2021, pursuant to Resolution No. 17/21 the ENRE launched the proceeding for the transitory adjustment of tariffs of the transmission public utility aiming to establish a Transitional Tariff Regime until reaching a Final Renegotiation Agreement, and summoning Transportation Companies. In this sense, a request for the information necessary to begin this process was received, and Transener has complied with this requirement, prioritizing the operating costs and capital expenditures required to maintain service quality.

 

On March 3, 2021, pursuant to Resolutions No. 54/21 and 55/21, the ENRE convened a Public Hearing for March 29, 2021 to provide information and gather feedback on the Transitional Tariff Regime for Transener and Transba, respectively, within the RTI Process and prior to the definition of tariffs.

 

On April 14, 2021, the Public Hearing Closing Report was published, the final resolution by the ENRE being pending as of the date of issuance of these Consolidated Condensed Interim Financial Statements.

 

Besides, on July 3, 2018 the ENRE informed of the launching of the proceeding for the determination of the remuneration to Independent Transmission Companies in the exploitation stage: TIBA (Transba), the Fourth Line (Transener), YACYLEC and LITSA. In this respect, on October 8, 2018, information on costs, investments and tariff claims corresponding to the Fourth Line and TIBA were submitted to the ENRE. As of the date hereof, the ENRE has not issued a resolution with the results of the analysis of the requested information.

 

2.5Regulations on access to the free exchange market (“MLC”)

 

The main regulations on MLC inflows and outflows issued by the BCRA in the quarterly period ended March 31, 2021 are summarized below:

 

The need for BCRA’s prior authorization to access the MLC for the cancellation of principal of foreign financial debts with foreign affiliates is extended from March 31, 2021 to June 30, 2021 inclusive.

 

The BCRA extended the obligation to submit a refinancing plan for certain debts and principal maturities scheduled until December 31, 2021, maintaining the following criteria: (i) access to the MLC for up to 40% of the principal amount, within the original term; and (ii) the refinancing of the principal balance, through new foreign indebtedness with an average life of 2 years. Debts with principal maturities for amounts of US$ 2,000,000 are exempted from the obligation to submit such indebtedness plan, and will have access to the MLC.

 

14

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Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

 

NOTE 2: (Continuation)

 

BCRA Communication “A” 7196 established, among other modifications, a series of measures aiming to make regulations more flexible so as to facilitate the exchange or financing of private-sector liabilities abroad that have been entered and settled through the MLC and concerted as from January 7, 2021, such as: (i) the extension of the term before the maturity date to access the MLC for the cancellation of principal and interest of foreign financial debts or debt securities publicly registered in the country and denominated in foreign currency; and (ii) the possibility to accumulate funds originating from the collection of goods and services exports in foreign and/or domestic accounts destined to guarantee the payment of maturities of debts concerted as from January 2021, among others. Furthermore, the BCRA created a Registry of Foreign Exchange Information of Exporters and Importers of Goods as a requirement to access the MLC as from May 1, 2021 for forex outflow transactions, including swaps and arbitrations. This requirement will not apply in case of access to the MLC for the cancellation of financing denominated in foreign currency granted by local financial entities. Obliged subjects should enroll in this registry by March 31 each year and report any change in the recorded information within 15 business days of its occurrence. The Company has been declared an obliged subject by the BCRA, and has already enrolled in this registry as of the date of these Consolidated Condensed Interim Financial Statements.

 

On April 8, 2021, the BCRA regulated the Investment Promotion Regime for Exports created by DNU No. 234/21 which, among other issues, establishes the possibility to apply foreign exchange collections to projects under such regime for certain transactions, as long as the requirements set forth by the provision are met.

 

More information on Argentina’s foreign exchange regulations can be found at the Central Bank’s website: www.bcra.gov.ar.

 

 

NOTE 3: BASIS OF PREPARATION

The Argentine Securities and Exchange Commission (CNV), under Title IV: “Periodic Reporting System”- Chapter III: “Provisions applicable to the form of presentation and valuation of financial statements” - Section 1 of its Rules, has provided for the application of Technical Resolution No. 26 (TR 26) of the Argentine Federation of Professional Councils in Economic Sciences (FACPCE), as amended, which adopts International Financing Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) for certain entities covered by the public offering regime set forth by Act No. 17811, whether on account of their capital stock or corporate bonds, or because they have requested an authorization to be covered by such regime.

These Condensed Interim Financial Statements for the three-month period ended March 31, 2021 have been prepared pursuant to the provisions of IAS 34, “Interim Financial Information”, are expressed in million pesos and were approved for their issuance by the Company’s Board of Directors on May 11, 2021.

The information included in the consolidated condensed interim financial statements is recorded in US dollars, which is the Company’s functional currency and, in accordance with CNV requirements, is presented in pesos, the legal currency in Argentina.

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Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

 

NOTE 3: (Continuation)

This condensed interim financial information had been prepared under the historical cost convention, modified by the measurement of financial assets at fair value through profit or loss. These financial statements do not include all the information that would be required for complete annual financial statements and, therefore, they should be read together with the annual financial statements as of December 31, 2020, which have been prepared under IFRS.

 

These consolidated condensed interim financial statements for the three-month period ended March 31, 2021 have not been audited. The Company’s management estimates they include all the necessary adjustments to state fairly the results of operations for each period. The results for the three-month period ended March 31, 2021, does not necessarily reflect in proportion the Company’s results for the complete year.

 

The accounting policies have been consistently applied to all entities within the Group.

Comparative information

The information as of December 31, 2020 and for the tree-month period ended March 31, 2020, disclosed for comparative purposes arises from the consolidated financial statements as of that date and the figures, with the exception of :

(i)The results corresponding to the electricity distribution segment have been disclosed under “Discontinued operations” in the Statement of Comprehensive Income on account of the execution of the contract for the sale of the 51% interest in Edenor (see Note 5.1).
(ii)Commercial interest figures have been reclassified from financial income to the other operating income to maintain consistency with this period’s figures in accordance with the change of policy detailed in Note 4 to the Consolidated Financial Statements as of December 31, 2020.
(iii)The presentation in the consolidated statement of comprehensive income of the losses from the impairment of financial assets (including the reversal of losses or profits from the value impairment, if applicable), made pursuant to IAS 1, has been calculated in accordance with the policy described in Note 4 to the Consolidated Financial Statements as of December 31, 2020.

Additionally, certain non-significant reclassifications have been made to those financial statements´ figures to keep the consistency in the presentation with the figures of the current period.

 

16

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Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

 

NOTE 4: ACCOUNTING POLICIES

The accounting policies applied in these consolidated condensed interim financial statements are consistent with those used in the consolidated financial statements for the last fiscal year, which ended on December 31, 2020.

 

New accounting standards, amendments and interpretations issued by the IASB adopted by the Company

 

The Company has applied the following standards and / or amendments for the first time as of January 1, 2021:

 

- Amendments to IFRS 9 – “Financial Instruments”, IAS 39 – “Financial instruments: Presentation”, IFRS 7 – “Financial Instruments: Disclosures”, IFRS 4 – “Insurance Contracts” and IFRS 16 – “Leases” (amended in August 2020).

 

The application of the detailed standards and amendments did not have any impact on the results of the operations or the financial position of the Company.

 

NOTE 5: GROUP STRUCTURE

 

5.1Assets held for sale, associated liabilities and discontinued operations

 

The results for the quarterly periods ended March 31, 2021 and 2020 corresponding to the divestment of the stake in Edenor have been disclosed under "Discontinued operations" of the Consolidated Condensed Interim Statement of Comprehensive Income, and all Edenor’s assets and liabilities have been classified as held for sale as of March 31, 2021 and December 31, 2020.

 

As of the date of issuance of these Condensed Interim Financial Statements, the approval by the ENRE necessary for the closing of the sale of the Company’s 51% stake in Edenor is still pending.

 

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Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

 

NOTE 5: (Continuation)

 

The statement of comprehensive income associated with the discontinued operations is disclosed below:

 

  Distribution of energy
  03.31.2021   03.31.2020
Revenue 21,023   20,531
Cost of sales (16,599)   (16,456)
Gross profit  4,424   4,075
       
Selling expenses (1,548)   (1,284)
Administrative expenses (1,080)   (827)
Other operating income 550   334
Other operating expenses (751)   (323)
Impairment of property, plant and equipment  (696)   -
Impairment of financial assets (667)   (417)
Operating income  232   1,558
       
Gain on monetary position, net 5,417   1,677
Finance income 14   274
Finance costs (4,431)   (1,219)
Other financial results 134   (705)
Financial results, net 1,134   27
Income before income tax 1,366   1,585
       
Income tax (841)   (842)
Profit of the period from discontinued operations 525   743

 

 

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Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

 

NOTE 5: (Continuation)

 

  Distribution of energy
  03.31.2021   03.31.2020
Other comprehensive income (loss)      
Items that will not be reclassified to profit or loss      
Exchange differences on translation 4,435   4,790
Items that may be reclassified to profit or loss      
Exchange differences on translation -   (68)
Other comprehensive income of the period from discontinued operations 4,435   4,722
       
Total comprehensive income of the period from discontinued operations 4,960   5,465
       
       
Total income of the period from discontinued operations attributable to:      
Owners of the company 2   415
Non - controlling interest 523   328
  525   743
       
Total comprehensive income of the period from discontinued operations attributable to:      
Owners of the company 787   5,137
Non - controlling interest 4,173   328
  4,960   5,465

 

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Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

 

NOTE 5: (Continuation)

 

The consolidated statement of cash flows related to discontinued operations as of March 31, 2021 and 2020 is presented below:

 

  03.31.2021   03.31.2020
       
Net cash generated by operating activities 4,096   2,099
Net cash (used in) generated by investing activities from discontinued operations (2,113)   86
Net cash used in financing activities (114)   (66)
       
Increase in cash and cash equivalents from discontinued operations 1,869   2,119
       
       
Cash and cash equivalents at the begining of the year 4,362   440
Effect of devaluation and inflation on cash and cash equivalents 667   (19)
Increase in cash and cash equivalents 1,869   2,119
Cash and cash equivalents at the end of the period 6,898   2,540

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Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

 

NOTE 5: (Continuation)

 

As of March 31, 2021 and December 31, 2020, the assets and liabilities that comprise the assets held for sale and associated liabilities are:

 

  03.31.2021   12.31.2020
ASSETS      
NON-CURRENT ASSETS      
Property, plant and equipment 113,916   99,721
Right-of-use assets 381   280
Investments in joint ventures and associates 11   11
Financial assets at amortized cost 160   239
Trade and other receivables 33   42
Total non-current assets 114,501   100,293
       
CURRENT ASSETS      
Inventories 2,080   1,873
Financial assets at amortized cost 162   78
Financial assets at fair value through profit and loss 2,529   2,222
Trade and other receivables 15,249   14,775
Cash and cash equivalents 6,898   4,362
Total current assets 26,918   23,310
Assets classified as held for sale 141,419   123,603
       
LIABILITIES      
NON-CURRENT LIABILITIES      
Provisions 2,783   2,431
Deferred revenue 1,462   1,471
Deferred tax liabilities 27,044   23,709
Defined benefit plans 918   749
Salaries and social security payable  352   303
Borrowings 9,023   8,261
Trade and other payables 7,627   6,806
Total non-current liabilities  49,209   43,730
       
CURRENT LIABILITIES      
Provisions 353   358
Deferred revenue 37   37
Income tax  144   -
Taxes payables 1,233   1,793
Defined benefit plans 84   84
Salaries and social security payable  3,352   3,734
Derivative financial instruments 1   1
Borrowings 376   143
Trade and other payables 44,084   36,018
Total current liabilities  49,664   42,168
Liabilities associated to assets classified as held for sale 98,873   85,898

 

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Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

NOTE 5: (Continuation)

 

5.2 Interest in subsidiaries, associates and joint ventures

5.2.1 Subsidiaries information

 

Unless otherwise indicated, the capital stock of the subsidiaries consists of common shares, each granting the right to one vote. The country of the registered office is also the principal place where the subsidiary develops its activities.

 

            03.31.2021   12.31.2020
Company   Country   Main activity   Direct and indirect participation %   Direct and indirect participation %
Generación Argentina S.A.U   Argentina   Generation   100.00%   100.00%
Edenor (1)   Argentina   Distribution of energy   57.12%   57.12%
Enecor S.A.   Argentina   Transportation of electricity   69.99%   69.99%
HIDISA   Argentina   Generation   61.00%   61.00%
HINISA   Argentina   Generation   52.04%   52.04%
PACOSA   Argentina   Trader   100.00%   100.00%
PEB   Bolivia   Investment   100.00%   100.00%
EcuadorTLC   Ecuador   Oil   100.00%   100.00%
Energía Operaciones ENOPSA S.A.    Ecuador   Oil   100.00%   100.00%
Trenerec S.A.   Ecuador   Investment   100.00%   100.00%
PE Energía Ecuador LTD   Gran Cayman   Investment   100.00%   100.00%
EISA   Uruguay   Investment   100.00%   100.00%
PISA   Uruguay   Investment   100.00%   100.00%
TGU   Uruguay   Gas transportation   51.00%   51.00%
Corod   Venezuela   Oil   100.00%   100.00%
Petrolera San Carlos S.A.   Venezuela   Oil   100.00%   100.00%

 

(1)Corresponds to effective interest considering treasury shares in Edenor’s effect (55.14% nominal interest). This stake in Edenor is disclosed under assets classified as held for sale.
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Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

 

NOTE 5: (Continuation)

 

5.2.2 Associates and joint ventures information

The following table presents the main activity and information from the financial statements used for valuation and percentages of participation in associates and joint ventures:

 

        Information about the issuer    
    Main activity   Date   Share capital   Profit (loss) of the period / year   Equity   Direct and indirect participation %
Associates                        
Refinor   Refinery   12.31.2020   92   (578)   5,081   28.50%
OCP   Investment   03.31.2021   9,241   424   18,467   15.91%
TGS (1)   Transport of gas   03.31.2021   756   3,909   78,488   3.185%
                         
Joint ventures                    
CIESA (1)   Investment   03.31.2021   639   1,988   40,096   50%
Citelec (2)   Investment   03.31.2021   556   233   16,486   50%
Greenwind   Generation   03.31.2021   5   27   (566)   50%
CTB   Generation   03.31.2021   8,558   1,893   34,761   50%

 

(1) The Company holds a 3.185% directan and indirect interest in TGS and a 50% interest in CIESA, a company that holds a 51% interest in the share capital of TGS. therefore, the Company has an indirect participation of 25.50% in TGS

As of March 31, 2021 the quotation of TGS´s ordinary shares and ADR published on the BCBA and the NYSE was $ 139.10 and U$S 4.83 per share, respectively, granting to Pampa (direct and indirect) ownership an approximate stake market value of $ 31.700 million.

(2) Through a 50% interest, the company jointly controls Citelec, company that controls Transener with 52.65% of the shares and votes. As a result, the Company has an indirect participation of 26.33% in Transener.

 

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Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

 

NOTE 5: (Continuation)

 

The details of the balances of investments in associates and joint ventures is as follows:

 

  03.31.2021   12.31.2020
Disclosed in non-current assets      
Associates      
Refinor 1,860   1,626
OCP 2,088   195
TGS 3,306   2,076
Other 1   -
Total associates 7,255   3,897
Joint ventures      
CIESA 23,693   20,138
Citelec 8,243   7,195
CTB 17,380   14,999
Total joint ventures 49,316   42,332
Total associates and joint ventures 56,571   46,229
Disclosed in non-current liabilities      
Joint ventures      
Greenwind (1) (168)   (161)
Total joint ventures (168)   (161)

 

(1)It receives financial assistance from the partners.

 

 

The following tables show the breakdown of the result from investments in associates and joint ventures:

 

  03.31.2021   03.31.2020
Associates      
Refinor  5   60
OCP 73   101
TGS 113   64
  191   225
       
Joint ventures      
CIESA 960   1,015
CTB 946   596
Citelec  116   236
Greenwind 13   (3)
  2,035   1,844
  2,226   2,069

 

24

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Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

NOTE 5: (Continuation)

 

The evolution of investments in associates and joint ventures is as follows:

  03.31.2021   03.31.2020
At the beginning of the year 46,068   30,373
Dividend reversal 1,645   -
Dividends -   (119)
Advance dividends -   (298)
Increases (1) 772   190
Share of profit  2,226   2,069
Exchange differences on translation 5,692   2,568
At the end of the period 56,403   34,783

 

(1)Corresponding to the acquisition of 100,000 shares and 1,714,923 ADRs of TGS at an acquisition cost of US$ 8.8 million and 635,380 ADRs at an acquisition cost of US$ 4.7 million during the three-month periods ended December 31, 2021 and 2020, respectively.

 

 

5.2.3 Investment in CTB

 

Financial Trust Agreement

 

On April 13, 2021, the ninth amendment to the Enarsa-Barragán Trust Agreement was entered into among CTB, in its capacity as trustor, BICE Fideicomisos S.A., in its capacity as trustee, and CAMMESA, in its capacity as assigned debtor, in order to include the new payment schedule effective as from the partial early redemption of the VRDs issued under the Enarsa-Barragán Financial Trust for a total amount of US$ 130 million executed on October 16, 2020.

 

As of the date of issuance of these Consolidated Condensed Interim Financial Statements, the total outstanding VRDs (amortization installments plus deferred interest, pursuant to the definition of these terms in the Trust Agreement) amount to US$ 93.7 million.

 

 

5.2.4 Investment in OCP

 

Contingent liabilities

 

The constitutional protection proceeding brought against OCP by several organizations and natural persons alleging the infringement of several constitutional rights upon the occurrence of the Force Majeure event in 2020 was denied in the second instance by Orellana’s Provincial Court of Justice.

 

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Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

 

NOTE 6: RISKS

6.1 Critical accounting estimates and judgments

The preparation of these unaudited consolidated condensed interim financial statements requires the Company’s Management to make future estimates and assessments, to apply critical judgment and to establish assumptions affecting the application of accounting policies and the amounts of disclosed assets and liabilities, and income and expenses.

Mentioned estimates and judgments are evaluated on a continuous basis and are based on past experiences and other reasonable factors under the existing circumstances. Actual future results might differ from the estimates and evaluations made at the date of preparation of these unaudited condensed interim financial statements.

In the preparation of these unaudited condensed interim financial statements, management judgements on applying the Company’s accounting policies and sources of information used for the respective estimates are the same as those applied in the Financial Statements for the year ended December 31, 2020.

 

6.2 Financial risk management

The Company’s activities are subject to several financial risks: market risk (including the exchange rate risk, the interest rate risk and price risk), credit risk and liquidity risk.

No significant changes have arisen in risk management policies since last year.

It should be noted that the Company operates in an economic context which main variables have recently suffered significant volatility as a result of political and economic events both domestically and internationally, as described in Note 1.2.

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Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

NOTE 7: SEGMENT INFORMATION

 

The Company is an integrated energy company in Argentina, which mainly participates in the electricity and oil and gas value chains.

 

Through its own activities, subsidiaries and share holdings in joint ventures and associates, and based on the business nature, customer portfolio and risks involved, the following business segments were identified:

Electricity Generation, mainly consisting of the Company’s direct and indirect interests in HINISA, HIDISA, Greenwind, CTB, TMB, TJSM and through its own electricity generation activities through Central Térmica Güemes, Piedra Buena, Piquirenda, Loma de la Lata, Genelba, EcoEnergía, Pilar, I. White, the Pichi Picún Leufú hydroelectric complex and the wind power park Pampa Energía II and III.

Electricity Distribution, consisting of the Company’s direct interest in Edenor. As of March 31, 2021 and 2020, the Company has classified the results corresponding to the divestment mentioned in Note 5.1 as discontinued operations

Oil and Gas, mainly consisting of the Company’s own interests in oil and gas areas and through its direct interest in PACOSA and indirectly in OCP.

Petrochemicals, comprising the Company’s own styrenics operations and the catalytic reformer plant operations conducted in Argentine plants.

Holding and Other Business, principally consisting of interests in joint businesses CITELEC and CIESA and their respective subsidiaries, which hold the concession over the high voltage electricity transmission nationwide and over gas transportation in the South of the country, respectively, interests in the associate Refinor, holding activities and financial investment transactions.

 

The Company manages its operating segment based on its individual net results in U.S. dollars.

 

27

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Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

 

NOTE 7: (Continuation)

 

    in million of US$   in million of $
Consolidated profit and loss information for the three-month period ended March 31, 2021   Generation   Distribution
of energy		   Oil and gas   Petrochemicals   Holding and others   Eliminations   Consolidated   Consolidated
Revenue   161   -   51   103   6   -   321   28,635
Intersegment revenue   -   -   28   -   -   (28)   -   -
Cost of sales   (79)   -   (52)   (82)   -   28   (185)   (16,353)
Gross profit   82   -   27   21   6   -   136   12,282
                                 
Selling expenses   -   -   (4)   (3)   -   -   (7)   (542)
Administrative expenses   (7)   -   (10)   (1)   (5)   -   (23)   (2,016)
Exploration expenses   -   -   -   -   -   -   -   (7)
Other operating income   6   -   4   -   1   -   11   976
Other operating expenses   (1)   -   (16)   -   (16)   -   (33)   (3,050)
Impairment of financial assets   -   -   (1)   -   -   -   (1)   (103)
Share of profit from associates and joint ventures   11   -   2   -   13   -   26   2,226
Operating income (loss)   91   -   2   17   (1)   -   109   9,766
                                 
Finance income   1   -   1   -   -   -   2   165
Finance costs   (12)   -   (32)   (1)   -   -   (45)   (3,986)
Other financial results   (17)   -   (21)   (1)   15   -   (24)   (2,061)
Financial results, net   (28)   -   (52)   (2)   15   -   (67)   (5,882)
Profit (loss) before income tax   63   -   (50)   15   14   -   42   3,884
                                 
Income tax   (16)   -   17   (4)   (5)   -   (8)   (715)
Profit (loss) for the period from continuing operations   47   -   (33)   11   9   -   34   3,169
Profit for the period from discontinued operations   -   5   -   -   -   -   5   525
Profit (loss) for the period   47   5   (33)   11   9   -   39   3,694
                                 
Depreciation and amortization   22   -   20   1   -   -   43   3,838

 

28

Free translation from the original prepared in Spanish for publication in Argentina

 

 

Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

 

NOTE 7: (Continuation)

 

    in million of US$   in million of $
Consolidated profit and loss information for the three-month period ended March 31, 2021   Generation   Distribution
of energy		   Oil and gas   Petrochemicals   Holding and others   Eliminations   Consolidated   Consolidated
Total profit (loss) attributable to:                                
Owners of the company   47   (1)   (33)   11   9   -   33   3,152
Non - controlling interest   -   6   -   -   -   -   6   542
                                 
                                 
Consolidated statement of financial position as of March 31, 2021                                
Assets   1,627   1,427   1,059   131   797   (87)   4,954   455,371
Liabilities   546   1,075   1,300   129   183   (87)   3,146   289,005
                                 
Additional consolidated information as of March 31, 2021                                
Increases in property, plant and equipment, intangibles assets and right-of-use assets   1   -   29   1   -   -   31   2,736

 

29

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Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

NOTE 7: (Continuation)

 

    in million of US$   in million of $
Consolidated profit and loss information for the three-month period ended March 31, 2020   Generation   Distribution
of energy		   Oil and gas   Petrochemicals   Holding and others   Eliminations   Consolidated   Consolidated
Revenue   134   -   77   73   6   -   290   18,036
Intersegment revenue   -   -   10   -   -   (10)   -   -
Cost of sales   (56)   -   (65)   (71)   -   10   (182)   (11,161)
Gross profit   78   -   22   2   6   -   108   6,875
                                 
Selling expenses   (1)   -   (7)   (2)   -   -   (10)   (599)
Administrative expenses   (8)   -   (11)   (1)   (5)   -   (25)   (1,536)
Exploration expenses   -   -   -   -   -   -   -   (4)
Other operating income   8   -   -   -   3   -   11   709
Other operating expenses   (2)   -   (2)   (1)   (3)   -   (8)   (458)
Impairment of property, plant and equipment, intangible assets and inventories   (56)   -   -   (11)   -   -   (67)   (4,316)
Impairment of financial assets   -   -   -   -   (1)   -   (1)   (69)
Share of profit (loss) from joint ventures and associates    10   -   2   -   20   -   32   2,069
Operating income (loss)   29   -   4   (13)   20   -   40   2,671
                                 
Finance income   1   -   2   -   -   -   3   142
Finance costs   (15)   -   (27)   (1)   -   -   (43)   (2,643)
Other financial results   (1)   -   (11)   3   5   -   (4)   (409)
Financial results, net   (15)   -   (36)   2   5   -   (44)   (2,910)
Profit (loss) before income tax   14   -   (32)   (11)   25   -   (4)   (239)
                                 
Income tax    (1)   -   6   4   (1)   -   8   439
Profit (loss) for the period from continuing operations   13   -   (26)   (7)   24   -   4   200
Profit for the period from discontinued operations   -   12   -   -   -   -   12   743
Profit (loss) for the period   13   12   (26)   (7)   24   -   16   943
                                 
                                 
Depreciation and amortization   23   20   27   -   -   -   70   4,431

 

 

30

Free translation from the original prepared in Spanish for publication in Argentina

 

 

Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

NOTE 7: (Continuation)

 

    in million of US$   in million of $
Consolidated profit and loss information for the three-month period ended March 31, 2020   Generation   Distribution
of energy		   Oil and gas   Petrochemicals   Holding and others   Eliminations   Consolidated   Consolidated
Total profit (loss) attributable to:                                
Owners of the company   16   7   (26)   (7)   24   -   14   775
Non - controlling interest   (3)   5   -   -   -   -   2   168
                                 
                                 
                                 
                                 
Consolidated statement of financial position as of December 31,2020                                
Assets   1,377   1,500   1,107   113   1,543   (122)   5,518   411,528
Liabilities   661   1,052   1,273   127   145   (122)   3,136   262,650
                                 
Additional consolidated information as of March 31, 2020                                
Increases in property, plant and equipment, intangibles assets and right-of-use assets   22   22   19   -   -   -   63   3,884

 

 

The accounting criteria used by the different subsidiaries for measuring the segments’ results, assets and liabilities are consistent with those used in the financial statements. Assets and liabilities are assigned based on the segment’s activity.

 

 

31

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Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

NOTE 8: REVENUE

 

  03.31.2021   03.31.2020
       
Energy sales to the Spot Market 3,138   3,649
Energy sales by supply contracts 8,685   4,239
Fuel self-supply 2,462   443
Other sales 85   31
Generation sales subtotal 14,370   8,362
       
Oil, gas and liquid sales 4,305   4,483
Other sales 173   297
Oil and gas sales subtotal 4,478   4,780
       
Petrochemicals products 9,196   4,515
Petrochemicals sales subtotal 9,196   4,515
       
Technical assistance services  and administartion sales 588   376
Other  3   3
Holding and others subtotal 591   379
Total revenue 28,635   18,036

 

 

32

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Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

NOTE 9: COST OF SALES

 

  03.31.2021   03.31.2020
Inventories at the beginning of the year 9,766   9,175
       
Plus: Charges for the period      
Purchases of inventories, energy and gas  8,407   3,083
Salaries and social security charges 1,100   787
Benefits to employees 229   170
Accrual of defined benefit plans 107   59
Works contracts, fees and compensation for services 1,080   1,008
Depreciation of property, plant and equipment 3,683   2,935
Intangible assets amortization 22   90
Right-of-use assets amortization 21   23
Transport of energy 119   73
Transportation and freights 506   286
Consumption of materials 369   225
Penalties 22   15
Maintenance 755   288
Canons and royalties 1,119   736
Environmental control 68   112
Rental and insurance 547   302
Surveillance and security 52   94
Taxes, rates and contributions 66   60
Other 38   (23)
Subtotal 18,310   10,323
       
Exchange differences on translation 748   585
       
Less: Inventories at the end of the period (12,471)   (8,922)
Total cost of sales 16,353   11,161

 

33

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Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

NOTE 10: OTHER ITEMS OF THE STATEMENT OF COMPREHENSIVE INCOME

 

10.1 SELLING EXPENSES

 

  03.31.2021   03.31.2020
Salaries and social security charges 68   53
Benefits to employees 4   5
Fees and compensation for services 79   37
Compensation agreements  7   18
Depreciation of property, plant and equipment 1   1
Taxes, rates and contributions 213   139
Transport  157   328
Other 13   18
Total selling expenses 542   599

 

10.2 ADMINISTRATIVE EXPENSES

 

  03.31.2021   03.31.2020
Salaries and social security charges 600   393
Benefits to employees 81   81
Accrual of defined benefit plans 173   128
Fees and compensation for services 585   426
Compensation agreements 93   35
Directors' and Syndicates' fees 206   201
Depreciation of property, plant and equipment 111   80
Consumption of materials 9   6
Maintenance 36   39
Transport and per diem 6   16
Rental and insurance 18   13
Surveillance and security 6   11
Taxes, rates and contributions 31   39
Communications 22   24
Other 39   44
Total administrative expenses 2,016   1,536

 

34

Free translation from the original prepared in Spanish for publication in Argentina

 

 

Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

NOTE 10: (Continuation)

 

10.3 EXPLORATION EXPENSES

 

  03.31.2021   03.31.2020
Geological and geophysical expenses 7   4
Total exploration expenses 7   4

 

 

10.4 OTHER OPERATING INCOME AND EXPENSES

 

  03.31.2021   03.31.2020
Other operating income      
Insurrance recovery -   31
Services to third parties 37   64
Profit for property, plant and equipment sale 13   -
Reversal of contingencies  -   61
Natural Gas Surplus Injection Promotion Program 226   -
Commercial interests 651   523
Other 49   30
Total other operating income 976   709
       
Other operating expenses      
Provision for contingencies (1,367)   (112)
Provision asset retirement obligation (1,317)   -
Decrease in property, plant and equipment  -   (58)
Allowance for tax credits -   (19)
Tax on bank transactions  (206)   (185)
Donations and contributions (18)   (20)
Institutional promotion (63)   (28)
Other (79)   (36)
Total other operating expenses (3,050)   (458)

 

35

Free translation from the original prepared in Spanish for publication in Argentina

 

 

Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

NOTE 10: (Continuation)

 

10.5 FINANCIAL RESULTS

 

03.31.2021   03.31.2020
Finance income      
Financial interest 12   10
Other interest 153   132
Total finance income 165   142
       
Finance cost      
Commercial interest (6)   (6)
Fiscal interest (58)   (45)
Financial interest (1) (3,741)   (2,398)
Other interest (67)   (35)
Other financial expenses (114)   (159)
Total financial expenses (3,986)   (2,643)
       
Other financial results      
Foreign currency exchange difference, net 849   307
Changes in the fair value of financial instruments (3,039)   (1,526)
Gains (losses) from present value measurement 139   (138)
Results for the repurchase of corporate bonds -   939
Other financial results (10)   9
Total other financial results (2,061)   (409)
       
Total financial results, net (5,882)   (2,910)

 

(1) Net of $ 303 million capitalized in property, plant and equipment for the three-month period ended March 31, 2020.

36

Free translation from the original prepared in Spanish for publication in Argentina

 

 

Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

NOTE 10: (Continuation)

 

10.6 INCOME TAX AND MINIMUM NOTIONAL INCOME TAX

 

The breakdown of income tax charge is:

 

  03.31.2021   03.31.2020
Current tax  7   1,808
Deferred tax  720   (2,101)
Difference in the estimate of previous fiscal year income tax and the income tax statement (12)   (146)
Total loss (income) tax 715   (439)

 

Below is a reconciliation between income tax expense and the amount resulting from application of the tax rate on the income before taxes:

 

  03.31.2021   03.31.2020
Profit (loss) before income tax 3,884   (239)
Current tax rate 30%   30%
Result at the tax rate 1,165   (72)
Share of profit of associates and joint ventures (663)   (624)
Non-taxable results (4)   (423)
Effects of exchange differences and other results associated with the valuation of the currency, net 2,146   1,241
Adjustment of valuation of property, plant and equipment and intangible assets (5,206)   (2,297)
Effect of tax rate change in deferred tax 45   429
Adjustment effect for tax inflation  3,073   1,570
Difference in the estimate of previous fiscal year income tax and the income tax statement 66   (263)
Non-deductible cost 67   -
Other 26   -
Total  loss (income) tax 715   (439)

 

37

Free translation from the original prepared in Spanish for publication in Argentina

 

 

Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

 

NOTE 11: NON-FINANCIAL ASSETS AND LIABILITIES

 

11.1 PROPERTY, PLANT AND EQUIPMENT

 

    Original values
Type of good   At the beginning    Increases (1)   Impairment   Transfers   Decreases   Traslation effect   At the end 
             
             
Land   1,108   -   -   -   -   103   1,211
Buildings   11,546   -   -   10   -   1,077   12,633
Equipment and machinery   114,597   5   -   2,257   -   10,766   127,625
Wells   64,301   12   -   1,292   -   6,047   71,652
Mining property   21,267   -   -   -   -   1,984   23,251
Vehicles   450   3   -   -   (5)   37   485
Furniture and fixtures and software equipment   4,400   11   -   49   (19)   404   4,845
Communication equipments   104   -   -   -   -   10   114
Materials and spare parts   2,572   344   -   (271)   -   234   2,879
Petrochemical industrial complex   1,433   -   -   25   -   135   1,593
Work in progress   11,095   2,173   -   (3,296)   -   1,058   11,030
Advances to suppliers   1,343   188   -   (66)   -   128   1,593
Other goods   210   -   -   -   -   20   230
Total at 03.31.2021   234,426   2,736   -   -   (24)   22,003   259,141
Total at 03.31.2020   313,337   3,884   (5,550)   -   (301)   23,883   335,253

 

 

(1) Net of $ 303 million capitalized in property, plant and equipment for the three-month period ended March 31, 2020. There are no capitalized financial costs in the three-month period ended March 31, 2021.

 

38

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Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

NOTE 11: (Continuation)

 

    Depreciation   Net book values
Type of good   At the beginning    Decreases    Impairment   For the period (1)    Traslation effect   At the end   At the end   At 12.31.2020
                 
                 
Land   -   -   -   -   -   -   1,211   1,108
Buildings   (5,103)   -   -   (154)   (481)   (5,738)   6,895   6,443
Equipment and machinery   (36,672)   -   -   (2,026)   (3,503)   (42,201)   85,424   77,925
Wells   (38,705)   -   -   (1,176)   (3,655)   (43,536)   28,116   25,596
Mining property   (13,522)   -   -   (272)   (1,272)   (15,066)   8,185   7,745
Vehicles   (346)   5   -   (15)   (29)   (385)   100   104
Furniture and fixtures and software equipment   (3,718)   19   -   (78)   (342)   (4,119)   726   682
Communication equipments   (61)   -   -   (3)   (6)   (70)   44   43
Materials and spare parts   (87)   -   -   (5)   (9)   (101)   2,778   2,485
Petrochemical industrial complex   (690)   -   -   (63)   (67)   (820)   773   743
Work in progress   -   -   -   -   -   -   11,030   11,095
Advances to suppliers   -   -   -   -   -   -   1,593   1,343
Other goods   (77)   -   -   (3)   (7)   (87)   143   133
Total at 03.31.2021   (98,981)   24   -   (3,795)   (9,371)   (112,123)   147,018    
Total at 03.31.2020   (103,281)   199   2,326   (4,297)   (7,980)   (113,033)   222,220    
Total at 12.31.2020                               135,445

 

(1)Includes $ 1.281 million corresponding to discontinued operations for the three-month period for March 31, 2020.

39

Free translation from the original prepared in Spanish for publication in Argentina

 

 

Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

 

NOTE 11: (Continuation)

 

 

11.2 INTANGIBLE ASSETS

 

    Original values
Type of good   At the beginning   Impairment   Traslate Effect   At the end
       
       
Concession agreements   1,608   -   150   1,758
Goodwill   2,912   -   272   3,184
Intangibles identified in acquisitions of companies   587   -   54   641
Total at 03.31.2021   5,107   -   476   5,583
Total at 03.31.2020   18,619   (2,784)   1,413   17,248

    Depreciation
Type of good   At the beginning   Impairment   For the year (1)   Traslate Effect   At the end
         
         
Concession agreements   (1,407)   -   (14)   (132)   (1,553)
Intangibles identified in acquisitions of companies   (245)   -   (8)   (23)   (276)
Total at 03.31.2021   (1,652)   -   (22)   (155)   (1,829)
Total at 03.31.2020   (9,551)   2,398   (111)   (734)   (7,998)

    Net book values    
Type of good   At the end   At 12.31.2020
     
         
Concession agreements   205   201
Goodwill   3,184   2,912
Intangibles identified in acquisitions of companies   365   342
Total at 03.31.2021   3,754    
Total at 03.31.2020   9,250    
Total at 12.31.2020       3,455

(1)Includes $ 21 million corresponding to discontinued operations for the three-month period for March 31, 2020.

 

40

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Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

NOTE 11: (Continuation)

 

11.3 DEFERRED TAX ASSETS AND LIABILITIES AND INCOME TAX

 

The composition of the deferred tax assets and liabilities is as follows:

 

  03.31.2021   12.31.2020
Tax loss carryforwards 9,671   10,609
Intangible assets 4   260
Trade and other receivables 527   519
Financial assets at fair value through profit and loss 3   -
Cash and cash equivalents -   2
Trade and other payables 257   217
Salaries and social security payable  82   270
Defined benefit plans 490   442
Provisions 3,234   2,373
Adjustment for tax inflation 225   288
Other 78   109
Deferred tax asset 14,571   15,089
Property, plant and equipment (429)   (1,291)
Adjustment for tax inflation (111)   (131)
Investments in companies (2,155)   (2,155)
Intangible assets (737)   (917)
Inventory (607)   (478)
Trade and other receivables (1,009)   (559)
Financial assets at fair value through profit and loss (62)   (340)
Taxes payables (231)   (229)
Deferred tax liabilities (5,341)   (6,100)

 

Deferred tax assets and liabilities are offset in the following cases: a) when there is a legally enforceable right to offset tax assets and liabilities; and b) when deferred income tax charges are associated with the same fiscal authority. The following amounts, determined after their adequate offset, are disclosed in the statement of financial position:

 

  03.31.2021   12.31.2020
Deferred tax asset 9,230   9,082
Deferred tax liabilities -   (93)
Deferred tax liabilities, net 9,230   8,989

41

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Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

NOTE 11: (Continuation)

 

11.4 INVENTORIES

 

03.31.2021   12.31.2020
       
Materials and spare parts 7,495   6,656
Advances to suppliers 719   261
In process and finished products 4,257   2,849
Total 12,471   9,766

 

11.5 PROVISIONS

 

  03.31.2021   12.31.2020
Non-Current      
Provisions for contingencies 9,562   7,608
Asset retirement obligation and dismantling of wind turbines 1,821   1,621
Environmental remediation 1,392   67
Other provisions 30   30
Total Non-Current 12,805   9,326
       
Current      
Provisions for contingencies 1,150   1,052
Asset retirement obligation and dismantling of wind turbines 194   177
Environmental remediation 157   149
Other provisions 1   1
Total Current 1,502   1,379

 

42

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Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

 

NOTE 11: (Continuation)

 

The evolution of provisions is shown below:

 

    03.31.2021
    Contingencies   Asset retirement obligation and dismantling of wind turbines   Environmental remediation
             
At the beginning of the year   8,660   1,798   216
Increases   1,312   46   1,319
Decreases   (13)   -   (2)
Exchange differences on translation   753   171   17
Reversal of unused amounts   -   -   (1)
At the end of the period   10,712   2,015   1,549

 

Provision for contingencies

 

As of the date of issuance of these Consolidated Condensed Interim Financial Statements, the Company has recorded provisions at the best estimate of the disbursements necessary to meet the claims associated with the progress of the procedural stages of the following proceedings:

 

(i)On April 30, 2021, Petrobras Operaciones S.A. (“POSA”) filed its claim memorial in the international arbitration proceeding brought by POSA against the Company for alleged breaches to the Agreement for the transfer of the 33.6% interest in the “Río Neuquén” Concession.

 

(ii)On April 29, 2021, the Company submitted its claim memorial and Petrobras International Braspetro B.V. (“PIB BV”) filed its counter-memorial in the international arbitration proceeding brought by the Company against PIB BV, and the counterclaim filed by the latter.

 

Provision for environmental remediation expenses

 

The Province of La Pampa has submitted a claim to the Company regarding the abandonment of certain wells and the execution of certain tasks associated with the relinquishment of the Jagüel de los Machos and Medanito blocks (which took place in 2015 and 2016, respectively).

 

The Company has challenged the different administrative acts passed by the provincial authorities (including the governor’s executive order) and is addressing claims for the Jagüel de los Machos block in the judicial jurisdiction. Even though the province answered the complaint in the month of March, the Company has started negotiations to resolve the dispute, agreeing on the suspension of procedural time limits.

 

As regards these claims, and based on the progress of the ongoing negotiations, the Company has recorded a US$ 11.9 million provision in the quarter for the estimate of the remediation work costs to be incurred in these blocks.

 

43

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Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

 

NOTE 11: (Continuation)

 

    03.31.2020
    Contingencies   Asset retirement obligation and dismantling of wind turbines   For environmental remediation
             
At the beginning of the year   8,379   1,327   139
Increases   193   31   31
Decreases   (31)   -   (2)
Exchange differences on translation   428   103   10
Reversal of unused amounts   (220)   -   -
Gain on monetary position, net   (5)   -   -
At the end of the period   8,744   1,461   178

 

11.6 Income tax

 

  03.31.2021   12.31.2020
Non-current      
Income tax 11,540   11,004
Total non-current 11,540   11,004
       
Current      
Income tax, net of witholdings and advances 556   897
Total current 556   897

 

 

NOTE 12: FINANCIAL ASSETS AND LIABILITIES

 

12.1 FINANCIAL ASSETS AT AMORTIZED COST

 

  03.31.2021   12.31.2020
Non-current      
Term deposit 9,222   8,428
Total non-current 9,222   8,428
       
Current      
Public securities (1) 1,144   2,062
Total current 1,144   2,062

 

(1)Public securities were received pursuant to the mechanism set forth by Resolution SGE No. 54/19 for the settlement of receivables under the Natural Gas Surplus Injection Promotion Programs.

 

44

Free translation from the original prepared in Spanish for publication in Argentina

 

 

Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

 

NOTE 12: (Continuation)

 

12.2. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS

 

  03.31.2021   12.31.2020
Non-current      
Shares 1,030   942
Total non-current 1,030   942
       
Current      
Government securities  18,191   17,223
Shares 4,318   2,442
Investment funds 5,831   7,717
Total current 28,340   27,382

 

12.3 Trade and Other receivables

 

Note   03.31.2021   12.31.2020
Non-Current          
Other     5   4
Trade receivables, net     5   4
           
Non-Current          
Tax credits     596   453
Related parties 16   2,518   2,413
Prepaid expenses     96   38
Allowance for tax credits     (5)   (5)
Other     92   728
Other receivables, net     3,297   3,627
           
Total non-current     3,302   3,631

45

Free translation from the original prepared in Spanish for publication in Argentina

 

 

Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

NOTE 12: (Continuation)

 

  Note   03.31.2021   12.31.2020
Current          
Receivables from MAT     1,392   1,242
CAMMESA     15,627   14,941
Receivables from oil and gas sales      3,279   1,974
Receivables from petrochemistry sales     4,206   3,303
Related parties 16   506   298
Other     288   329
Allowance for doubtful accounts     (1,471)   (1,352)
Trade receivables, net     23,827   20,735
           
Current          
Tax credits     418   405
Advances to suppliers      40   28
Advances to employees     8   11
Related parties 16   2,037   3,474
Prepaid expenses     1,777   304
Receivables for non-electrical activities     325   449
Financial credit     -   295
Guarantee deposits     126   221
Contractual penalty to collect     109   284
Insurance to recover     375   520
Expenses to be recovered     648   720
Natural Gas Surplus Injection Promotion Program     225   -
Other     1,720   1,241
Allowance for other receivables     (13)   (9)
Other receivables, net     7,795   7,943
           
Total current     31,622   28,678

 

46

Free translation from the original prepared in Spanish for publication in Argentina

 

 

Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

NOTE 12: (Continuation)

 

The movements in the allowance for the impairment of trade receivables are as follows:

03.31.2021   12.31.2020
At the beginning  1,352   2,000
Allowance for impairment 80   464
Utilizations -   (137)
Exchange differences on translation 39   23
Gain on monetary position, net -   1
At the end of the period 1,471   2,351

 

(1)Includes $ 417 million corresponding to discontinued operations for the three-month period for March 31, 2020.

 

 

The movements in the allowance for the impairment of other receivables are as follows:

 

03.31.2021   12.31.2020
At the beginning  14   311
Allowance for impairment 6   67
Exchange differences on translation -   18
Reversal of unused amounts (2)   (41)
At the end of the period 18   355

 

 

12.4 CASH AND CASH EQUIVALENTS

 

  03.31.2021   12.31.2020
Cash 15   13
Banks 4,940   5,869
Investment funds 4,299   6,018
Total 9,254   11,900

 

47

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Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

NOTE 12: (Continuation)

 

12.5 BORROWINGS

 

  03.31.2021   12.31.2020
Non-Current      
Financial borrowings 6,669   6,285
Corporate bonds 119,500   109,143
Total Non-Current 126,169   115,428
       
Current      
Bank overdrafts -   3,059
Financial borrowings 8,607   7,436
Corporate bonds 8,970   9,882
Total Current 17,577   20,377
Total 143,746   135,805

 

As of March 31, 2021 and December 31, 2020 the fair value of the Company’s CBs amount approximately to $ 113,649 million and $ 11,193 million, respectively. Such values were calculated on the basis of the determined market price of the Company’s CBs at the end of each period (fair value level 1).

 

The carrying amounts of short-term borrowings approximate their fair value due to their short-term maturity.

 

The remaining long-term borrowings were measured at amortized cost, which does not differ significantly from its fair value.

 

As of the issuance of these financial statements, the Company is in compliance with the covenants provided for in loans.

48

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Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

NOTE 12: (Continuation)

 

The evolution of the consolidated loans over the quarterly periods ended March 31, 2021 and 2020 are disclosed below.

 

  Note   03.31.2021   03.31.2020
At the beginning      135,805   116,603
Proceeds from borrowings     2,503   200
Payment of borrowings     (4,616)   (4,214)
Accrued interest     3,740   2,647
Payment of borrowings' interests     (4,687)   (4,123)
Net foreign currency exchange difference     (1,284)   98
Results for the repurchase of corporate bonds 10.5   -   (939)
Costs capitalized in property, plant and equipment 11.1   -   303
Gain on monetary position, net     -   (38)
Repurchase and redemption of corporate bonds     -   (2,567)
Other comprehensive loss     12,285   7,774
At the end of the period     143,746   115,744

 

Loans and other financial transactions

 

During the three-month period ended March 31, 2021, the Company incurred new short-term financing with local financial entities for $ 200 million and repaid $ 3,200 million at maturity. After March 31, 2021, the Company repaid at maturity financial loans in the amount of $ 1,500 million.

 

During the three-month period ended March 31, 2021, the Company has received disbursements in the amount of US$ 16.3 million under the credit facilities taken out with BNP. After the closing of the quarter, the Company has received additional disbursements in the amount of US$ 10 million.

 

49

Free translation from the original prepared in Spanish for publication in Argentina

 

 

Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

NOTE 12: (Continuation)

12.6 TRADE AND OTHER PAYABLES

 

      03.31.2021   12.31.2020
Non-Current          
Compensation agreements      614   561
Lease liability     923   852
Other     5   5
Other payables     1,542   1,418
Total non-current     1,542   1,418

Note   03.31.2021   12.31.2020
Current          
Suppliers     8,973   7,775
Customer advances     160   184
Related parties 16   469   420
Other     -   25
Trade payables     9,602   8,404
           
Compensation agreements      110   86
Lease liability     158   150
Advances received for sales of subsidiary     1,002   1,044
Other     202   94
Other payables     1,472   1,374
           
Total current     11,074   9,778

 

Due to the short-term nature of the payables and other payables, their carrying amount is considered to be the same as their fair value. For most other non-current liabilities, fair values are not significantly different from their book values either.

 

50

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Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

NOTE 12: (Continuation)

 

12.7 FAIR VALUE OF FINANCIAL INSTRUMENTS

 

The following table shows the Company’s financial assets and liabilities measured at fair value as of March 31, 2021 and December 31, 2020:

 

As of March 31, 2021   Level 1   Level 2   Level 3   Total
Assets                
Financial assets at fair value through
profit and losss		                
Government securities   18,191   -   -   18,191
Shares   4,318   -   1,030   5,348
Investment funds   5,831   -   -   5,831
Cash and cash equivalents                
Investment funds   4,299   -   -   4,299
Derivative financial instruments   -   8   -   8
Other receivables   -   119   -   119
Assets classified as held for sale (1)   960   9,200   -   10,160
Total assets   33,599   9,327   1,030   43,956
                 
Liabilities                 
Derivative financial instruments   -   5   -   5
Total liabilities    -   5   -   5

 

As of December 31, 2020   Level 1   Level 2   Level 3   Total
Assets                
Financial assets at fair value through
 profit and losss		                
Government securities   17,223   -   -   17,223
Shares   2,442   -   942   3,384
Investment funds   7,717   -   -   7,717
Cash and cash equivalents                
Investment funds   6,018   -   -   6,018
Derivative financial instruments   -   1   -   1
Other receivables   -   214   -   214
Assets classified as held for sale (1)   5,148   -   -   5,148
Total assets   38,548   215   942   39,705
                 
Liabilities                
Derivative financial instruments   -   40   -   40
Total liabilities   -   40   -   40

 

(1)Corresponding to the net assets and liabilities held for sale on account of the divestment of Edenor’s stake.

 

51

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Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

 

NOTE 12: (Continuation)

 

The techniques used for the measurement of assets at fair value with changes in income, classified as Level 2 and 3, are detailed below:

- Derivative Financial Instruments: calculated from variations between market prices at the closing date of the period, and the amount at the time of the contract.

- Shares: they were determined based on Income approach through the Indirect Cash Flow method (net present value of expected future cash flows) and the discount rates used were estimated taking the Weighted Average Cost of Capital (“WAAC”) rate as a parameter.

 

 

NOTE 13: EQUITY COMPONENTS

 

 

13.1Share Capital

As of March 31, 2021, the capital stock amounts to $ 1,455 million, including $ 4 million of treasury shares.

 

13.1.1 Acquisition of the Company’s own shares

Program 9, approved by the Company’s Board of Directors on March 1, 2021 for a maximum amount of US$ 30 million and an initial term of 120 calendar days, is in effect as of March 31, 2021, under which shares may be acquired up to a maximum price of US$ 16 per ADR and $ 92.16 per common share. As of the date of issuance of these Consolidated Condensed Interim Financial Statements, the Company has not acquired any own shares under this program.

During the three-month period ended March 31, 2021, the Company directly and indirectly acquired 1.8 million own ADRs for a value of US$ 24.2 million. After March 31, 2021, the Company directly and indirectly acquired 0.7 million own shares for a value of US$ 9.2 million.

 

 

13.1Earning per share

 

Basic

 

Basic earnings per share are calculated by dividing the result attributable to the Company’s equity interest holders by the weighted average of outstanding common shares during the year.

 

Diluted

Diluted earnings per share are calculated by adjusting the weighted average of outstanding common shares to reflect the conversion of all dilutive potential common shares.

 

52

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Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

NOTE 13: (Continuation)

Potential common shares will be deemed dilutive only when their conversion into common shares may reduce the earnings per share or increase losses per share of the continuing business. Potential common shares will be deemed anti-dilutive when their conversion into common shares may result in an increase in the earnings per share or a decrease in the losses per share of the continuing operations.

The calculation of diluted earnings per share does not entail a conversion, the exercise or another issuance of shares which may have an anti-dilutive effect on the losses per share, or where the option exercise price is higher than the average price of ordinary shares during the period, no dilutive effect is recorded, being the diluted earning per share equal to the basic. As of March 31, 2021 and 2020, the Company does not hold any significant potential dilutive shares, therefore there are no differences with the basic earnings per share.

  03.31.2021   03.31.2020
Earning for continuing operations attributable to the equity holders of the Company  3,150   360
Weighted average amount of outstanding shares 1,451   1,641
Basic and diluted earnings per share from continued operations 2.17   0.22
       
       
Earning for discontinued operations attributable to the equity holders of the Company  2   415
Weighted average amount of outstanding shares 1,451   1,641
Basic and diluted earnings per share from
 discontinued operations		 0.00   0.25
       
Earning attributable to the equity holders of the Company  3,152   775
Weighted average amount of outstanding shares 1,451   1,641
Basic and diluted earnings  per share 2.17   0.47

 

53

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Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

 

NOTE 14: STATEMENT OF CASH FLOWS’ COMPLEMENTARY INFORMATION

 

14.1 ADJUSTMENTS TO RECONCILE NET PROFIT TO CASH FLOWS GENERATED BY OPERATING ACTIVITIES

 

  Note   03.31.2021   03.31.2020
Income tax 10.6   715   (439)
Accrued interest     3,057   1,820
Depreciations and amortizations 9, 10.1 and 10.2   3,838   3,129
Constitution of allowances, net 10.4 and 10.1   103   88
Provision of provisions and tax payables, net 10.4   1,367   51
Share of profit from joint ventures and associates 5.2.2   (2,226)   (2,069)
Accrual of defined benefit plans 9, 10.1 and 10.2   280   187
Net exchange differences 10.5   (849)   (307)
Result from measurement at present value 10.5   (139)   138
Changes in the fair value of financial instruments 10.5   3,310   2,320
Results from property, plant and equipment sale  10.3 and 10.4   (13)   58
Results for the repurchase of corporate bonds 10.5   -   (939)
Provision of environmental remediation 10.4   1,317   -
Impairment of property, plant and equipment, intangible assets and inventories     -   4,316
Compensation agreements  10.1 and 10.2   100   53
Other     12   39
Total adjustments to reconcile net profit to cash flows generated by operating activities     10,872   8,445

 

 

54

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Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

NOTE 14: (Continuation)

 

14.2 CHANGES IN OPERATING ASSETS AND LIABILITIES

 

      03.31.2021   03.31.2020
Increase in trade receivables and other receivables     (353)   (1,289)
Increase in inventories     (1,957)   (146)
Increase in trade payables and other payables     75   1,729
Decrease in salaries and social security payable      (609)   (334)
Decrease in defined benefit plans     (38)   (24)
Increase (Decrease) in tax payables      610   (580)
(Decrease) Increase in provisions     (79)   15
Income tax and minimum notional income tax paid     (69)   (89)
(Payments) Proceeds from derivative financial instruments, net   (210)   327
Total changes in operating assets and liabilities     (2,630)   (391)

 

 

14.3 SIGNIFICANT NON-CASH TRANSACTIONS

 

      03.31.2021   03.31.2020
Acquisition of property, plant and equipment through an increase in trade payables     (1,098)   (1,050)
Borrowing costs capitalized in property, plant and equipment     -   (303)
Increase in interests in associates through a decrease in other loans     (1,645)   -
Decrease in interests in associates through a decrease in other payables     -   (298)

  

55

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Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

 

NOTE 15: CONTINGENT LIABILITIES AND ASSETS

 

The main events taking place in the three-month period ended March 31, 2021 regarding contingent liabilities reported in the consolidated financial statements as of December 31, 2020 are detailed below:

 

Environmental claims

 

-In the case file brought by Fundación SurfRider for alleged signs of environmental affectation in the City of Mar del Plata, the CSJN sustained the jurisdiction of the civil and commercial courts of Mar del Plata and referred the case back to first instance.

 

The main changes for the three-month period ended March 31, 2021 regarding contingent assets reported in the Consolidated Financial Statements as of December 31, 2020 are detailed below:

 

Administrative claims

 

-In the administrative litigation complaint brought by Central Térmica Loma la Lata S.A. (currently Pampa) against the Federal Government regarding the renewal and recognition of costs associated with natural gas supply agreements and, subsidiarily, requesting the redress of the damages sustained on account of the contractual breach during the January-March 2016 period, the evidentiary stage has been closed. In the complaint for the April 2016 through October 2018 period, the opening of the evidentiary period has been requested.

 

-In the proceeding whereby the Company filed a declaratory judgment action against the Province of Neuquén upon the determination of the expiration of the Veta Escondida block’s concession term, the rendering of judgment was requested and the CSJN has set a preliminary hearing.

 

-On March 31, 2021, the Company submitted a Preliminary Administrative Claim against the National Ministry of Economy to claim the owed amount, plus the applicable interest, assumed by the Federal Government during the term of validity of PEN Executive Order No. 1,053/18 on account of the exchange difference between the price of the gas purchased by gas distributors and that recognized in their final tariffs during the April 2018 - March 2019 period.

 

 

Civil and commercial claims

 

-As of the date of issuance of these Consolidated Condensed Interim Financial Statements, the first stages of the international arbitration proceeding brought by Ecuador TLC, in its capacity as assignee of the Ecuadorian company Petromanabí S.A., against the Republic of Ecuador, have already begun.

 

-Ecuador TLC has brought an arbitration claim against Petroecuador before the arbitration and mediation center of the Chamber of Commerce of Quito as a result of certain breaches to the transportation agreement entered into on December 31, 2008.
56

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Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

 

NOTA 16: RELATED PARTIES´ TRANSACTIONS

 

 

16.1 Balances with related parties:

 

As of March 31, 2021   Trade receivables   Other receivables   Trade  payables
  Current   Non Current   Current   Current
Associates and joint ventures                
CTB   28   -   -   -
Greenwind   35   -   -   439
OCP   -   -   1,501   -
Refinor   90   -   -   22
TGS   350   2,518   479   -
Transener   -   -   -   8
Other related parties                
SACDE   3   -   5   -
Other   -   -   52   -
    506   2,518   2,037   469

 

As of December 31, 2020   Trade receivables   Other receivables   Trade  payables
  Current   Non Current   Current   Current
Associates and joint ventures                
CTB   15   -   -   -
Greenwind   20   -   -   383
OCP   -   -   2,993   -
Refinor   147   -   1   15
SACME   -   -   -   21
TGS   115   2,413   430   -
Transener   -   -   -   1
Other related parties                
SACDE   1   -   3   -
Other   -   -   47   -
    298   2,413   3,474   420

 

57

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Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

NOTE 16: (Continuation)

 

16.2 Operations with related parties:

 


Operations for the three-month period		  
Sales of goods and services (1)
 Purchases of goods and services (2) Fees for services (3) Other operating expenses and income (4)
  2021   2020   2021   2020   2021   2020   2021   2020  
Associates and joint ventures                                  
CTB   36   25   -   -   -   -   -   -  
Greenwind    15   11   -   -   -   -   -   -  
Refinor    166   356   (104)   (65)   -   -   (12)   (5)  
TGS    738   393   (709)   (446)   -   -   -   -  
Transener   -   -   (12)   (4)   -   -   -   -  
                                   
Other related parties                                  
Fundación   -   -   -   -   -   -   (18) - (18) -
SACDE    -   -   -   -   -   -   3   (3) -
Salaverri, Dellatorre, Burgio & Wetzler    -   -   -   -   (7) - (8)   -   -  
    955   785   (825)   (515)   (7)   (8)   (27)   (26)  
                                   
(1) Corresponds mainly to advisory services provided in the field of technical assistance and sales of gas and refined products.
(2) Imputed cost of sales. Correspond mainly to natural gas transportation services, purchases of refined products and other services.
(3) Disclosed within administrative expenses.
(4)  Corresponds mainly to donations,

 

58

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Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

NOTE 16: (Continuation)

 


Operations for the three-month period		   Finance income (1) Finance expenses (2) Dividends received 
  2020   2020   2020   2020   2021   2020  
Associates and joint ventures                          
Citelec   -   -   -   (12)   -   -  
Greenwind    -   7   -   -   -   -  
OCP   27   19   -   -   -   119  
TGS    59   47   -   -   -   -  
                           
Other related parties                          
                           
SACDE    -   1   -   -   -   -  
    86   74   -   (12)   -   119  
(1) Corresponds mainly to financial leases and accrued interest on loans granted.      
(2) Corresponds to accrued interest on loans received.      

 

59

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Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

 

NOTE 17: ASSETS AND LIABILITIES IN CURRENCIES OTHER THAN PESOS

 

  Type   Amount in currencies other than pesos   Exchange rate (1)   Total
03.31.2021		   Total
12.31.2020
       
ASSETS                  
                 
NON-CURRENT ASSETS                  
Financial assets at amortized cost US$                      100.2   92.00                      9,222                      8,428
Other receivables US$                        28.3   92.00                      2,600                      3,131
Total non-current assets                              11,822                    11,559
                 
CURRENT ASSETS                  
                   
Financial assets at fair value through profit and loss US$                      238.8   92.00                    21,967                    16,928
Financial assets at amortized cost US$                        12.4   92.00                      1,144                      2,062
Derivative financial instruments US$                          0.1   92.00                             8                              -
Trade and other receivables US$                      162.2   92.00                    14,920                    14,966
  EUR                          0.1   108.10                             7                         456
Cash and cash equivalents US$                        52.4   92.00                      4,820                      5,714
  U$                          3.7   2.08                             8                             9
Total current assets                              42,874                    40,135
Assets classified as held for sale US$                        17.5   92.00                      1,607                      1,968
  EUR                        0.05   108.10                             5                             5
  CHF                        0.03   97.44                             3                             3
  JPY                           55   0.832                           45                           45
                                 1,660                      2,021
Total assets                              56,356                    53,715
                   
LIABILITIES                  
                   
NON-CURRENT LIABILITIES                  
Provisions US$                      131.8   92.00                    12,128                      8,694
Borrowings US$                   1,371.4   92.00                  126,169                  115,428
Trade and other payables US$                        16.8   92.00                      1,541                      1,418
Total non-current liabilities                             139,838                  125,540
                   
CURRENT LIABILITIES                  
Provisions US$                        15.9   92.00                      1,465                      1,342
Taxes payables US$                        15.6   92.00                      1,434                      1,307
Salaries and social security payable  US$                          0.1   92.00                             8                             7
  US$                          0.1   92.00                             5                           40
Borrowings US$                        46.3   92.00                      4,259                      4,028
Trade and other payables US$                        62.3   92.00                      5,731                      4,775
  EUR                          5.6   108.10                         610                         635
Total current liabilities                               13,512                    12,134
Liabilities associated to assets classified as held for sale US$                      119.8   92.00                    11,023                    10,056
  EUR                          0.0   108.10                             4                           28
  CHF                          0.1   97.44                             5                              -
                               11,032                    10,084
Total liabilities                             164,382                  147,758
Net Position Liability                           (108,026)                   (94,043)

(1) Exchange rate in force at March 31, 2021 according to the National Bank of Argentine for U.S. dollars (US$), euros (EUR), Swiss francs (CHF), Uruguayos pesos (U$) and yen (JPY).

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Free translation from the original prepared in Spanish for publication in Argentina

 

 

Notes to the unaudited consolidated condensed interim financial statements (continuation)

For the three-month period ended March 31, 2021, presented in comparative format

(In millions of Argentine Pesos (“$”))

NOTE 18: DOCUMENTATION SAFEKEEPING

 

On August 14, 2014, the National Securities Commission issued General Resolution No. 629, which introduced modifications to the provisions applicable to the keeping and conservation of corporate and accounting books and commercial documentation. To such effect, the Company and its subsidiary Edenor, have sent non-sensitive work papers and information corresponding to the periods not covered by the statute of limitations for their keeping in the Administración de Archivos S.A (AdeA)’s data warehouse located at Ruta 36, km 34.5, Florencio Varela, Provincia de Buenos Aires and in the Iron Mountain Argentina S.A.’s data warehouses located at the following addresses:

 

-Azara 1245 –C.A.B.A.
-Don Pedro de Mendoza 2163 –C.A.B.A.
-Amancio Alcorta 2482 C.A.B.A.
-San Miguel de Tucumán 601, Carlos Spegazzini, Municipality of Ezeiza, Province of Buenos Aires.

 

A list of the documentation delivered for storage, as well as the documentation provided for in Article 5.a.3) Section I, Chapter V, Title II of the PROVISIONS (2013 regulatory provisions and amending rules), is available at the Company headquarters.

 

NOTE 19: SUBSEQUENT EVENTS

General Ordinary and Extraordinary Shareholders’ Meeting

 

On April 29, 2021, the Company’s General Ordinary and Extraordinary Shareholders’ Meeting resolved:

 

-To approve the allocation of results for the fiscal year ended December 31, 2020, which amounted to a $ 31,447 million loss, and the total retained earnings, which totaled a loss of $ 1,825 million, resolving that: (i) the currency translation difference charged to retained earnings should be allocated as follows: $ 1,500 million to the legal reserve and $ 27,589 million to the voluntary reserve; and (ii) the balance, that is, the amount of $30,914 million, should be allocated to the voluntary reserve to absorb the negative balance of retained earnings.

 

-To reduce the capital stock through the cancellation of 56,581,600 shares, which is pending registration with the Public Registry, the capital stock thus decreasing from $ 1,455,501,255 to $1,398,919,655.

 

 

 

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