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CASH AND CASH EQUIVALENTS AND INVESTMENTS. ADDITIONAL INFORMATION ON THE CONSOLIDATED STATEMENTS OF CASH FLOWS
12 Months Ended
Dec. 31, 2020
CASH AND CASH EQUIVALENTS AND INVESTMENTS. ADDITIONAL INFORMATION ON THE CONSOLIDATED STATEMENTS OF CASH FLOWS  
CASH AND CASH EQUIVALENTS AND INVESTMENTS. ADDITIONAL INFORMATION ON THE CONSOLIDATED STATEMENTS OF CASH FLOWS

NOTE 4 – CASH AND CASH EQUIVALENTS AND INVESTMENTS. ADDITIONAL INFORMATION ON THE CONSOLIDATED STATEMENTS OF CASH FLOWS

a)   Cash and cash equivalents and Investments

 

 

 

 

 

 

 

 

As of December 31, 

 

    

2020

    

2019

Cash and cash equivalents

 

 

 

 

Cash and Banks

 

4,645

 

2,339

Time deposits

 

3,546

 

957

Mutual funds (a)

 

8,797

 

31,531

Government bonds at fair value

 

1,539

 

 —

Total cash and cash equivalents

 

18,527

 

34,827

Investments

 

  

 

  

Current

 

  

 

  

Government bonds at fair value

 

5,054

 

404

Government bonds at amortized cost

 

126

 

180

Mutual funds (a)

 

1,442

 

87

Allowance for credit risk (b)

 

(80)

 

(87)

Total current investments

 

6,542

 

584

Non- current

 

 

 

  

Government bonds at amortized cost

 

342

 

2,692

Investments in associates (c)

 

2,026

 

1,531

2003 Telecommunications Fund

 

 1

 

 1

Allowance for credit risk (b)

 

(217)

 

(1,333)

Total non-current investments

 

2,152

 

2,891

Total investments

 

8,694

 

3,475

 

(a)

As of December 31, 2020, includes $194 in Cash and cash equivalents which availability is restricted between 30 and 60 days, according to contractual provisions and $1,372 in Investments in guarantee of financial operations.

(b)

Constituted following the expected credit losses parameters provided by IFRS 9 as a consequence of a significant increase in these financial instruments’ credit risk.

(c)

Information on Investments in associates is detailed below:

Financial position information:

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

    

 

    

Percentage of capital

    

 

    

 

 

 

 

 

 

 

stock owned and

 

Valuation as of

 

Valuation as of

Companies

 

Main activity

Country

voting rights

 

12.31.2020

 

12.31.2019

Ver TV. (1)

 

Cable television station

 

Argentina

 

49.00

 

1,219

 

847

TSMA (1) (2) (3)

 

Cable television station

 

Argentina

 

50.10

 

454

 

344

La Capital Cable (1) (2)

 

Closed-circuit television

 

Argentina

 

50.00

 

348

 

334

Other minor investments in associates at equity method (4)

 

  

 

  

 

  

 

 5

 

 6

Total

 

  

 

  

 

  

 

2,026

 

1,531

 

(1)

Data about the issuer arise from extra-accounting information.

(2)

Direct and indirect interest.

(3)

Despite owning a percentage higher than a 50% of interest, the Company does not have the control in accordance with the requirements of IFRS.

(4)

The variation is included in Other financial results, net - RECPAM.

 

Earnings (losses) information:

 

 

 

 

 

 

 

 

 

 

Years ended December 31, 

 

    

2020

    

2019

    

2018

Ver TV

 

372

 

(223)

 

297

TSMA

 

110

 

(59)

 

151

La Capital Cable

 

14

 

27

 

46

Total

 

496

 

(255)

 

494

 

Movements in the allowance of current credit risk are as follows:

 

 

 

 

 

 

 

 

December 31, 

 

    

2020

    

2019

At the beginning of the fiscal year

 

(87)

 

 —

Additions – Exchange differences

 

(50)

 

 —

Additions – Risk of doubtful government bonds results

 

(16)

 

(1,552)

Reclassifications

 

(503)

 

 —

Uses (includes RECPAM)

 

576

 

1,465

At the end of the year

 

(80)

 

(87)

 

Movements in the allowance of non-current credit risk are as follows:

 

 

 

 

 

 

 

 

December 31, 

 

    

2020

    

2019

At the beginning of the fiscal year

 

(1,333)

 

 —

Additions – Exchange differences

 

(220)

 

 —

Additions – Risk of doubtful government bonds results

 

(42)

 

(1,945)

Reclassifications

 

503

 

 —

Uses (includes RECPAM)

 

875

 

612

At the end of the year

 

(217)

 

(1,333)

 

Restructuring of Government Bonds

 

In April 2020, the PEN, through Decree No. 391/20 and the Government of the Province of Buenos Aires, established a restructuring of certain National and Provincial Government Bonds issued under foreign law through the invitation to lenders to exchange those bonds for others, subject to new issuance conditions.

Furthermore, the exchange offer for the restructuring of foreign currency-denominated government bonds issued under argentine law was approved in August 2020.

In May, July and August 2020, the Company submitted several exchange offers of its bonds portfolio that could be exchanged, in accordance with the established conditions and procedures provided to each case.

The exchange of the National and Provincial Bonds issued under foreign and argentine laws took place in early September 2020. As of the date of these consolidated financial statements, the exchange of the Province of Buenos Aires Government Bonds was still pending.

b)   Additional information on the consolidated statements of cash flows

The Company applies the indirect method to reconcile the net income for the year with the cash flows generated by its operations.

For purposes of the consolidated statements of cash flows, cash and cash equivalents comprise cash, bank current accounts and short-term highly liquid investments (with a maturity of three months or less from the date of acquisition). Bank overdrafts are disclosed in the consolidated statement of financial position as financial debts and its flows in the cash flow statements as proceed and payment of financial debt, because they are part of the short-term financial structure of Telecom and its subsidiaries.

Changes in assets/liabilities components:

 

 

 

 

 

 

 

 

 

 

December 31,

 

    

2020

    

2019

    

2018

Net (increase) decrease in assets

 

  

 

  

 

  

Trade receivables

 

(7,313)

 

4,441

 

(8,570)

Other receivables

 

(647)

 

154

 

(1,872)

Inventories

 

(197)

 

633

 

(23)

 

 

(8,157)

 

5,228

 

(10,465)

Net decrease in liabilities

 

  

 

  

 

  

Trade payables

 

(7,019)

 

(23,095)

 

(16,393)

Salaries and social security payables

 

476

 

1,733

 

592

Taxes payables

 

1,135

 

1,339

 

(4,253)

Other liabilities and provisions

 

(5,800)

 

(5,648)

 

(4,878)

 

 

(11,208)

 

(25,671)

 

(24,932)

 

Main Financing activities components

The following table presents the main financing activities components:

 

 

 

 

 

 

 

 

Bank overdrafts

 

 —

 

10,925

 

4,558

Notes

 

28,075

 

30,660

 

 —

Bank and other financial entities loans

 

24,830

 

36,723

 

53,600

Loans for purchase of equipment

 

3,123

 

1,344

 

 —

Total financial debt proceeds

 

56,028

 

79,652

 

58,158

Bank overdrafts

 

(6,908)

 

(1)

 

 —

Notes

 

(9,621)

 

(4,162)

 

(8,178)

Bank and other financial entities loans

 

(46,624)

 

(45,532)

 

(701)

Loans for purchase of equipment

 

(2,240)

 

 —

 

(570)

Total payment of debt

 

(65,393)

 

(49,695)

 

(9,449)

Bank overdrafts

 

(3,967)

 

(1,321)

 

(197)

Notes

 

(5,701)

 

(1,537)

 

(3,161)

Bank and other financial entities loans

 

(9,038)

 

(9,699)

 

(5,000)

By NDF, purchase of equipment and others

 

(2,145)

 

1,811

 

560

Total payment of interest and related expenses

 

(20,851)

 

(10,746)

 

(7,798)

 

Main non-cash operating transactions

Main non-cash operating transactions and that were eliminated from the consolidated statement of cash flows are the following:

 

 

 

 

 

 

 

 

PP&E and intangible assets acquisition financed with accounts payable

 

19,652

 

20,922

 

18,906

Dividends payment with investments not considered as cash and cash equivalents

 

25,713

 

 —

 

 —

Accounts payable payment with CDB loan proceeds

 

249

 

 —

 

 —

Other receivables offset with income tax liabilities

 

26

 

 —

 

 —

Trade receivables offset with government bonds

 

468

 

 —

 

 —

 

Cash dividends collected

Brief information on cash dividends collected by the Company is provided below:

 

 

 

 

 

 

 

 

 

 

 

    

Cash Dividends Collected

 

 

 

 

 

 

Current currency

 

 

 

 

Currency of the

 

as of December 31,

Year

    

Company

    

transaction date

    

2020

2020

 

Ver TV

 

50

 

57

 

 

TSMA

 

21

 

23

 

 

 

 

71

 

80

2019

 

Ver TV

 

97

 

172

 

 

TSMA

 

41

 

72

 

 

La Capital Cable

 

 5

 

 8

 

 

 

 

143

 

252

2018

 

Ver TV

 

18

 

56

 

 

TSMA

 

 8

 

23

 

 

La Capital Cable

 

15

 

38

 

 

 

 

41

 

117

 

Cash and non-cash assets dividends from the Company and its subsidiaries

Non-cash assets dividends

Telecom Argentina’s General Extraordinary Shareholders’ Meeting held on November 13, 2020 resolved to distribute non- cash assets dividends as follows: i) Global Bonds of the Argentine Republic amortizable in US dollars maturing on July 9, 2030 (the “2030 Global Bonds”), for a nominal value of US$157,642,897, and ii) Global Bonds of the Argentine Republic amortizable in US dollars maturing on July 9, 2035 (the “2035 Global Bonds”) for a nominal value of US$271,896,177.

Consequently, and considering that the valuation of the mentioned non-cash assets dividends was $24,723,374,678 Argentine pesos ($25,713 in current currency as of December 31, 2020), the “Voluntary Reserve for Future Cash Dividends” amounting to $6,600 in current currency as of December 31, 2020 was fully withdraw and the “Voluntary Reserve to maintain the Company’s level of investments in capital assets and the current level of solvency” was partially withdraw in $19,113 in current currency as of December 31, 2020.

Brief information on cash dividends of the Company and its subsidiaries is provided below:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

    

    

    

    

 

    

    

 

    

    

    

    

 

 

 

 

 

 

Distributed amount

 

 

 

Amount paid in

 

 

 

 

 

 

 

 

 

Current currency

 

 

 

current currency

 

 

 

 

 

 

Currency of the

 

as of December 31,

 

 

 

as of December

Year

    

Company

    

Distribution month

    

transaction date

    

2020

    

Payment month

    

31, 2020

2020

 

Núcleo

 

April 2020

 

 

295

 

367

 

May 2020

 

191

 

 

Núcleo

 

April 2020

 

 

 —

 

 —

 

October 2020

 

176

 

 

 

 

 

 

 

295

 

367

 

 

 

367

2019

 

Telecom

 

April 2019

 

 

6,300

 

11,798

 

May 2019

 

11,072

 

 

Telecom

 

August 2019

 

 

7,045

 

11,346

 

August 2019

 

11,346

 

 

Telecom

 

October 2019

 

(1)

17,387

 

25,603

 

October 2019

 

25,603

 

 

Núcleo

 

April 2019

 

 

197

 

356

 

May 2019

 

347

 

 

 

 

 

 

 

30,929

 

49,103

 

 

 

48,368

2018

 

Telecom

 

December 2017

 

 

-

 

-

 

January 2018

 

12,386

 

 

Telecom

 

January 2018

 

(2)

13,007

 

39,508

 

February 2018

 

38,580

 

 

Telecom

 

January 2018

 

 

6,866

 

20,857

 

March 2018

 

19,909

 

 

Núcleo

 

April 2018

 

 

135

 

381

 

March 2018

 

380

 

 

 

 

 

 

 

20,008

 

60,746

 

 

 

71,255

 

(1)        The General Ordinary Shareholders’ Meeting held on October 10, 2019 resolved to distribute US$300 million in cash dividends to be paid in US dollars (freely available) equivalent to $17,387 according to the exchange rate of BCRA Com “A” 3,500 issued on October 9, 2019 ($57.9).

(2)        Includes $5,641 and $4,503 of anticipated cash dividends pursuant to Section 224, 2nd paragraph of the LGS related to the net income (liquid and realized) of the period January 1st, 2017 and September 30, 2017 arising from the Telecom Argentina’s and Cablevision’s stand-alone basis financial statements as of September 30, 2017, respectively, that were subsequently ratified by the General Ordinary Shareholders’ Meeting held on April 25, 2018.

Additional information required by IAS 7

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

 

 

 

 

Exchange

 

 

 

 

 

 

 

 

 

 

differences

 

 

 

 

Balances

 

 

 

 

 

, currency

 

Balances

 

 

as of

 

 

 

 

 

translation

 

as of

 

 

December 31,

 

Cash

 

 

 

adjustments and

 

December 31,

 

    

2019

    

Flows

    

Accrued interest

    

others

    

2020

Bank overdrafts

 

13,219

 

(6,908)

 

 —

 

(2,358)

 

3,953

Securities' caution - principal

 

419

 

(313)

 

 —

 

(106)

 

 —

Bank and other financial entities loans – principal

 

95,552

 

(21,481)

 

 —

 

(*)    6,992

 

81,063

Notes - principal

 

55,171

 

18,454

 

 —

 

(3,303)

 

70,322

NDF

 

510

 

(1,831)

 

 —

 

1,848

 

527

Loans for purchase of equipment

 

5,705

 

883

 

 —

 

28

 

6,616

Accrued interest and related expenses

 

36,352

 

(19,195)

 

13,974

 

6,588

 

37,719

Total current and non-current financial debt (Note 13)

 

206,928

 

(30,391)

 

13,974

 

9,689

 

200,200

 

(*) Includes $249 of loans with the CDB Bank (Note 13) that do not represent cash movement.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exchange

 

 

 

 

 

 

 

 

 

 

differences

 

 

 

 

Balances

 

 

 

 

 

, currency

 

Balances

 

 

as of

 

 

 

 

 

translation

 

as of

 

 

December 31,

 

Cash

 

 

 

adjustments and

 

December 31,

 

    

2018

    

Flows

    

Accrued interest

    

others

    

2019

Bank overdrafts

 

4,766

 

10,924

 

 —

 

(2,471)

 

13,219

Securities' caution - principal

 

 —

 

419

 

 —

 

 —

 

419

Bank and other financial entities loans – principal

 

98,863

 

(9,228)

 

 —

 

5,917

 

95,552

Notes – principal

 

33,669

 

26,498

 

 —

 

(4,996)

 

55,171

NDF

 

209

 

(1,195)

 

 —

 

1,496

 

510

Loans for purchase of equipment

 

4,354

 

1,344

 

 —

 

 7

 

5,705

Accrued interest and related expenses

 

24,247

 

(12,721)

 

15,109

 

9,717

 

36,352

Total current and non-current financial debt (Note 13)

 

166,108

 

16,041

 

15,109

 

9,670

 

206,928