Tarjeta Naranja S.A.
Financial Statements
For the fiscal year commenced January 1, 2013 and ended December 31,
2013, presented on a comparative basis
(Free Translation from the Original in Spanish for Publication in Argentina)
Tarjeta Naranja S.A.
(Free Translation from the Original in Spanish for Publication in Argentina)
Financial Statements
For the fiscal year commenced January 1, 2013 and ended December 31, 2013, presented on a
comparative basis
Table of Contents
Annual Report
Statement of Income
Statement of Other Comprehensive Income
Statement of Financial Position
Statement of Changes in Shareholders’ Equity
Statement of Cash Flows
Notes to the Financial Statements
Additional Information to the Notes to the Financial Statements as required by Section 12 of
Chapter III, Title IV, of the amended regulations of the National Securities Commission (C.N.V.)
(N.T. 2013).
Summary of Activity
Independent Auditors’ Report
Supervisory Committee’s Report
2013 Annual Report
TARJETA NARANJA S.A.
Annual Report as of December 31, 2013
In compliance with legal provisions and the by-laws, Tarjeta Naranja S.A. submits this Annual
Report, together with the Statement of Financial Position, Statement of Income, Statement of
Changes in Shareholders' Equity, Statement of Cash Flows and the corresponding notes and
schedules, for the 19th fiscal year of the Company, ended December 31, 2013.
FINANCIAL CONDITION
(Information Presented in Thousands of Pesos)
During 2013, Tarjeta Naranja continued consolidating its position and managed to increase its
market share in the Argentine credit cards market.
This year open accounts exceeded 2.5 million and taking into consideration additional cardholders,
the Company has 3.7 million customers. Meanwhile, the number of authorized cards is 6.9 million,
including Tarjeta Naranja, Tarjeta Naranja Visa, Tarjeta Naranja Mastercard and Tarjeta Naranja
American Express. In turn, transactions increased by 15.73% and average consumption by open
account increased by 26.13%.
At fiscal year-end, net operating income amounted to AR$ 3,418,747, representing a 30% increase
as compared to 2012 and consolidating the prior year’s positive trend in generating income. Such
income is explained by the 36% increase in net income from services and the 19% increase in net
income from financing.
Operating expenses increased by 35% as compared to the prior year, mainly due to the rise in
labor costs changed by trade union agreements, the increase in tax disbursements and rates, and
other operating expenses.
As a result, net income increased by 13%, as compared to 2012, and at fiscal year-end,
consolidated net income amounted to AR$ 489,713.
The shareholders’ equity at year-end amounted to AR$ 1,942,084 and the distribution of dividends
for AR$ 110,000 was approved at the Ordinary Shareholders’ Meeting held on March 22, 2013.
SOURCES OF FINANCING
During FY 2013, Tarjeta Naranja carried out the following transactions regarding debt issuance and
sources of financing.
Bank and Financial Loans
New loans were obtained from several banks in the aggregate amount of AR$ 670 million. In turn,
loans and checking account overdrafts were extended in the aggregate amount of AR$ 233 million.
In FY 2013, loan principal and interest payments were made in the amount of AR$ 566 million.
Financial Leases
In FY 2013, financial lease payments due were made in the amount of AR$ 26 million.
Notes (“Obligaciones Negociables”)
Within the framework of the Global Program for the Issuance of Notes (“Obligaciones
Negociables”), Class XX, XXI, XXII and XXIII Notes were placed for AR$ 789 million. Principal and
interest on Notes were paid in the amount of AR$ 707 million.
Foreign Currency Debt Hedging
At fiscal year-end, we have forward transactions and other investments to hedge cash flow risks of
foreign currency-denominated debt.
Other Available Sources
We have a credit line available that has not been used related to a commitment signed with Banco
Galicia for AR$ 100 million.
SIGNIFICANT EVENTS DURING FISCAL YEAR 2013
2013: Let’s Join Together Again
We ended 2012 convinced that to take on challenges and face changes, we needed to support us
and work together, organizing a great team with our employees, cardholders and merchants
("Comercios Amigos"). Therefore, “Let’s Join Together Again” was the motto that inspired us
throughout 2013. In the words of David Ruda, our CEO, "we recover the concept of teaming, reunification, which means being together, combining ideas and adding projects so that everything
may go better for all of us. And if the need to change arises from this relationship, then don't be
afraid. Let’s change! In this context, and for everyone to listen thereto, we want to shout: Give me
your hand, it is necessary for us to join together again!
Summer
Once more, the summer operation integrated actions at the main tourist centers and a number of
benefits such as discounts of up to 20% at the best restaurants, three-installment and 0% interest
rate plan (named “Zeta”) at supermarkets and gas stations, and exclusive benefits at hotels,
entertainment, travel agencies and transportation companies, among others.
This year the traditional Naranja Show combined in Mar del Plata and Carlos Paz two exclusive
recitals performed by Diego Torres with dazzling firework shows. Over 250,000 persons enjoyed
these shows, and cardholders and the public in general were provided with a unique experience.
“Financieramente Incorrectos” (Financially Incorrect) Campaign
In an evolution of the “Financieramente Incorrectos” (Financially Incorrect) campaign launched in
2012, where we revealed Tarjeta Naranja’s essence, this year we presented a second part
intended to communicate our products. The campaign, designed by the BBDO agency, reflected a
core message: “it is possible to change from a No to a Yes (“Zi” instead of “Sí” in Spanish, which is
written wrong on purpose to include the letter Z) with the Z Plan”, an innovative product that
provides our cardholders with more freedom upon purchasing decision-making.
Through a saga of three commercials that appeal to humor and feelings, we managed to share the
attributes that make us different reinforcing the value proposal we provide to our more than 3.7
million customers throughout the country.
Argentina’s National Soccer Team: Light Blue, White and Naranja (Orange)!
As official sponsor of Argentina’s National Soccer Team, Tarjeta Naranja continued supporting the
national team in all official qualifying rounds for 2014 Brazil World Cup and friendly games. In order
to continue consolidating the brand throughout the country, we carried out branding actions in
seven matches, and offered special benefits and promotions for cardholders, such as the exclusive
presale in all games.
In addition, we developed an advertising spot to celebrate before everybody the qualification for
Brazil World Cup, which was communicated on TV, printed media and social networks. The piece
was developed through a modern digital animation technique and portrays the arrival of our team of
stars to Maracaná Stadium with the dream to be World Champions.
“Un gol, un potrero” (One Goal, One Soccer Field)
Relying on the fact that the “Un Gol, un Potrero” (One Goal, One Soccer Field) program expresses
and shares the joy we feel to support the Argentina’s National Soccer Team, we continued working
hard on this initiative as focal point of the sponsorship. Through this Social Responsibility program,
which is aimed at fostering sports among children, since 2011, we have remodeled 78 sports
areas of schools, community centers and neighborhood clubs so that more than 15,000 children
throughout the country enjoy practicing sports. The participation continues growing, with over 3,250
enrolled institutions throughout the country and more than 75,000 Facebook friends voting for
winners.
Naranja Store
One year after its launch, Naranja Store consolidates itself in the e-commerce world with sales
made in 2013 amounting to AR$ 15 million. With an increasing number of transactions, Tarjeta
Naranja’s online purchasing site currently connects more than 200 Merchants (“Comercios
Amigos”) throughout the country with 10,000 active cardholders at the platform, who are allowed to
access selected products with distinctive plans, promotions and benefits. Through this alternative
purchasing channel, Tarjeta Naranja offers more convenient proposals for its users and continues
strengthening the relationship with its Merchants (“Comercios Amigos”) in the country.
Other Products and Services
 Convivimos, Tarjeta Naranja’s monthly magazine, consolidated itself in 2013 as leader
among the subscribed publications in Argentina, with a circulation of 550,000 issues and
more than two million readers. Thought for the whole family, the magazine of the
Company’s publishing division directly reaches thousands of houses throughout the
country. In December, we celebrated this achievement with a special edition, which
presented Lionel Messi on the cover and an exclusive interview.
 As new service for cardholders, we implemented the cell phone top-ups by means of the
tarjetanaranja.com web services. Throughout 2013, top-ups amounted to over AR$ 100
million.
 Tarjeta Naranja offers a wide range of products as regards personal insurance, which
amounted to 2.4 million policies in force at fiscal year-end.
 Services on your cell phone, whereby cardholders may control their operations and
receive text messaging with information about each purchase made, due dates, payments
made, withdrawals, transfer notices and balance queries. In 2013, the number of
customers who use it increased by 16% in 2013, reaching 1,200,000 persons.
Innovation
In 2013, we reinforced the space for open innovation, “Ideas Naranja” (Naranja Ideas), a
collaborative platform that invites the community to propose ideas and vote or comment others’
ideas based on the instruction given by Tarjeta Naranja. Calls took place in June and September
this year with two new questions. In June the trigger was: Which new product or service would you
like Tarjeta Naranja to offer? And in September we asked: How would you like a brand to surprise
you when you visit its stores? This was earmarked for generating innovative ideas to continue
improving the service quality. People’s participation was very important, and over 10,000 ideas and
260,000 visits to the innovación.tarjetanaranja.com site were received.
“Martes Financieramente Incorrectos” (Financially Incorrect Tuesdays)
During 2013, promotional actions were performed, which became distinctive as compared to
competitors and were positively valued by customers, who increased the use of their cards. The
most outstanding promotion was “Martes financieramente incorrectos” (Financially incorrect
Tuesdays), which offered a 15% discount without limit on large brands throughout the country.
From March to June and from September to December, cardholders could take advantage of this
benefit at more than 2,100 points of sale of subscribed brands. For the Mother’s Day in October,
the discount increased to 20%.
In addition, there were ongoing promotions with discounts and 0% interest installment plans in all
sectors. Many agreements were entered into with top brands in Argentina, such as FIAT, Movistar,
Claro, DirecTV, Dexter, Falabella, Phillips, Disco Virtual, LAN, Musimundo, Garbarino, Frávega,
Walmart, ADT, Libertad and Jumbo, among others. Likewise, special promotions with renowned
stores of each city were carried out in every region throughout the country.
One Million Friends on Facebook
We continued participating in the different social platforms with the commitment to providing
customer services, talking to our community of friends, sharing colorful news, exclusive benefits
and publications of interest. In November, we reached the spectacular amount of one million
friends on Facebook, which at fiscal year-end stood at 1,051,700. This makes us become the
financial sector institution in Argentina with the highest amount of friends on this social
network. In turn, in Twitter we began the year with 6,752 followers. At the end of 2013, they
amounted to 31,800.
To reward the work performed on social networks, the Interactive Advertising Bureau (IAB), agency
that regulates the global digital advertising, awarded us two prizes for the “2013 Best Digital
Campaigns”. The prized initiatives were Lovekedin (Golden Prize), developed for the Valentine’s
Day and #Quieromichulengo (Bronze Prize), launched to increase participation in Twitter under the
framework of the Financially Incorrect campaign.
Actions for Merchants (“Comercios Amigos”)
During 2013, actions, events and initiatives specially intended for our Merchants (“Comercios
Amigos”) were carried out.
We made an alliance with Google and with this, we granted an exclusive benefit to our
countrywide subscribed stores, which could access to Google AdWords, an online advertising
solutions package furnished with effective tools to boost their businesses.
In September, we held the fifth edition of the Contest of Naranja’s Windows, in which over 1,000
stores throughout the country participated, with the instruction to create original windows where the
orange color played a leading role. With the designer Benito Fernández as member of the jury, the
winners were chosen. The first prize was a trip to Paris and the second one a trip to Río de
Janeiro, both for two persons.
Throughout the year, Tarjeta Naranja invited stores to participate in training conferences about
several matters in order to strengthen the relationship by providing them with a different value
proposal. The conferences held in Rosario, Bahía Blanca, Mar del Plata, Resistencia and Neuquén
should be highlighted, whereat Paula Molinari, a Leadership and Change Management specialist,
lectured. In addition, the Company’s directors, who specially traveled to force a closer relationship
with stores, attended these events.
Branch Network
At fiscal year-end, Tarjeta Naranja has a network of 215 service centers throughout the country.
This network includes 166 branches and 49 points of sale, distributed as follows: 9 in the City of
Buenos Aires, 26 in Greater Buenos Aires, 20 in the rest of the Province of Buenos Aires, 18 in
Santa Fe, 50 in Córdoba, 4 in Chubut, 9 in Entre Ríos, 8 in Río Negro, 9 in Tucumán, 7 in
Corrientes, 2 in La Pampa, 6 in Misiones, 3 in San Luis, 2 in Tierra del Fuego, 5 in Catamarca, 3 in
Chaco, 3 in Formosa, 5 in Jujuy, 5 in La Rioja, 5 in Neuquén, 9 in Salta, 2 in Santa Cruz and 5 in
Santiago del Estero.
During the year, Tarjeta Naranja continued increasing its presence in the Autonomous City of
Buenos Aires (CABA, as per its initials in Spanish) and the rest of the country. We opened seven
branches, distributed in Villa Crespo and Villa del Parque (CABA); in Mina Clavero and La Calera
(Córdoba), Puerto Iguazú (Misiones), Perico (Jujuy) and San Miguel de Tucumán. Additionally, we
moved ten branches to different parts of the country in order to improve the customer’s experience.
In August, we opened offices in the neighborhood of Balvanera, in the City of Buenos Aires.
Administrative and commercial areas were established therein in order to connect and supply
branches in the area.
Ongoing Improvement with LEAN
This year we began a change adopting the LEAN methodology in Tarjeta Naranja’s processes,
along with the international consulting firm McKinsey. The purpose is to streamline the operation,
increase efficiency and improve the customer’s experience ensuring the quality of our products and
services.
We started up with two very important processes for the customer, Contact Center and Collections,
and then we continued working on the network of Stores and Processing. To perform this task, fulltime interdisciplinary teams were formed, which during four months diagnosed, designed, piloted
and launched improvements removing activities that do not add value and increasing the capacity
of work teams through simple tools. During 2014, LEAN will continue being applied to other
processes.
New Tools to Assess Credit Risk
In 2013, we introduced tools that allow us to assess the risk level associated with each applicant
and/or customer and achieved an objective credit risk management at the Origination, Behavior
and Collection instances. Through these Scoring Models, we improved the customer segmentation
by risk and achieved an increased efficiency in the processes related to Account Additions, and
Collection and Account Management, in addition to making decision criteria consistent and
improving the quality of the response to the customer.
2013 with New Cards
In August this year, new designs were launched for all cards issued by the Company in order to
align them with the last design trends. From that date to the fiscal year-end, 1,954,678 cards were
delivered with the new image.
Casa Naranja
In order to respond to the Company’s growth and group a significant part of Employees from Nonbusiness Areas in the same place, during 2013, we continued with the works for the new
sustainable headquarters in the City of Córdoba. It is a 12-story building with a first floor, occupies
18,800 m2, will accommodate 700 employees and will be added to the other real property that
Naranja has in the same block. It will be the first building in Córdoba to be awarded the LEED
(Leadership in Energy & Environmental Design) certification, which implies very important
contributions regarding eco-efficiency. At the end of fiscal year 2013, the building achieved a 65%
progress and is expected to be completed towards the end of 2014.
Tarjeta Naranja Perú
The Company continued developing the business in Peru, where it began operations in 2011. At
fiscal year-end, the affiliate has 11 branches in Lima, a team of 487 employees and 80,671 active
cards. Tarjeta Naranja Perú resulted from an association with Banco de Crédito del Perú (BCP),
main private bank in such country.
Employee Management
Tarjeta Naranja’s organizational culture places people first. Therefore, the Human Resources
management is focused on keeping an excellent work environment and fostering the ongoing
development of employees.
During 2013, 283 people joined the firm and headcount amounted to 4,049 employees throughout
the country by year-end. In-house contests and promotions were carried out as a result of being
interested in providing multiple development opportunities, thus encouraging individual growth.
Focused on training, more than 2,600 training courses were taught, most of which were under the
charge of 505 in-house trainers of the Company, who are employees who assume the task of
transferring knowledge.
Seeking the ongoing improvement, the Performance Assessment process was renewed, which
takes place twice a year for the purpose of achieving that results better reflect each employee’s
performance, and thus be able to identify improvement opportunities. We also added changes in
the Democratic Assessment, an instrument to know employees’ satisfaction level with respect to
their leaders.
For the strategic purpose of being among the best companies to work for in Argentina, Tarjeta
Naranja continued performing actions to achieve an excellent work environment. In November
2013, as part of the Environment Diagnosis process, the in-house environment survey was
conducted, which seeks to know the employees’ perceptions of the different actions implemented
at the Organization. Aspects to be improved were identified and the results of the improvements
implemented, as a result of the diagnosis made in 2012, were assessed.
Additionally, to supplement our in-house measurements of the environment with an external view
that allows us to compare us with other companies, in August this year we worked again along with
Great Place to Work (GPTW) in preparing a diagnosis. The invitation to participate in this
measurement was extended to all the Company’s employees and leaders. The results obtained
continue placing us as one of the best companies to work for in the country.
Technology and Processes
During the year, investments continued being made in the technological upgrade and the
development of improvements in the applications, with a great dedication of resources to the
strategic support for the Company’s growth.
In order to achieve that cardholders and stores may virtually provide all services in the branch
network, we began implementing Naranja Online. This development improves the web
functionalities through a new Service-Oriented Architecture (SOA), which provides the best
usability practices of online information.
In seeking to optimize the performance of our processing system for branches, contact center
and other areas, improvements were made in storage hardware and applications, thus managing to
reduce the time of processes.
We continued making progress with the Communications initiative, which consists in sending our
customers information about the status of their proceedings through non-traditional channels, such
as e-mail and SMS. Accordingly, during the year, 10 million notices were sent per month.
In addition, we implemented an application for the sale through non-traditional channels by
means of the contact center, web site and social networks. This allows customers to request their
card from any place, around the clock, without the need to go to a branch.
To provide further facilities to customers, who may easily pay at outsourced institutions, we
developed a technology that allows cardholders to pay their account statement by solely showing
their national identity cards.
In order to process the data volume generated by each Company’s area, a Business Intelligence
(BI) tool was implemented, which allows providing support information for strategic decisionmaking, according to Tarjeta Naranja’s current and future needs.
Prevention of Asset Laundering and Funding of Terrorist Activities
Tarjeta Naranja has internal control policies and procedures to ensure that its products and
services are not used for criminal purposes. During 2013, initiatives, such as the acquisition of the
Systech Vigía tool in its profile and monitoring modules, which are integrated into the already
existing Vigía Lista module, were implemented to mitigate the risk. With this, we achieved a
comprehensive understanding of customers and their behavior, which allows us to detect irregular
situations related to asset laundering, financing of terrorist activities and/or fraud. In addition, it
makes it easier to record the detected cases and assign an individual Laundering Risk Rating (IRL,
as per its initials in Spanish) to each customer.
We strengthened control processes and in order to have updated information about those
customers with higher consumption, we requested documentation supporting revenues, as well as
supplementary information regarding them.
All of the Company’s employees received in-house training and education regarding this matter at
three complexity levels depending on their positions. Furthermore, the members of the Control and
Prevention Committee and the Anti-laundering Unit received external training.
Corporate Social Responsibility
Tarjeta Naranja understands that the long-term growth should be supported with a sustainable
management that considers and includes the community and the neediest groups. All programs
encouraged by the Company include the contribution from Employees, Cardholders, Merchants
(“Comercios Amigos”) and Suppliers. All employees, who move themselves to start up each
program, actively took part in the multiple initiatives developed this year. Some of the most
outstanding are:
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Débito Solidario (Solidary Debit) Program: Tarjeta Naranja has been carrying out this
program for 17 years, which consists in collecting the contributions cardholders donate
through automatic credit card debit to be fully delivered to different non-profit organizations
throughout the country. In 2013, AR$ 36,795,921 was collected by these means.
Apadrinando Escuelas (Support for Schools) Program: In order to foster equal
opportunities for public primary school children throughout the country, a joint work with
Sponsor Merchants (“Comercios Amigos”), which also make an economic contribution to
meet children’s and institutions’ needs, has been conducted since 1999. The year ends
with 361 Sponsored Schools and 406 Sponsor Merchants (“Comercios Amigos”).
Apadrinando Comedores (Support for Community Kitchens) Program: through the
work of volunteers at community or soup kitchens from different districts of the country, we
have sought to help with food, education, clothing and recreation of children for 10 years.
In 2013, 208 volunteers promoted actions at 39 organizations by providing 3,482 children
with relief, affection and assistance.
Primary and Secondary School Scholarship Program: together with FONBEC, we
implemented this program whereby 96 sponsors, all Naranja’s employees, made
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
contributions for 100 sponsored children. The purpose is to enable outstanding children
and young people to continue their studies avoiding school dropout.
Paper Recycling Program: During the year, 120,000 kg of out-of-use paper were
recycled, which represented income amounting to AR$ 86,674 that was allocated to the
programs.
Inclusion of Individuals with Disabilities: We continued hiring people with disabilities
and five employees are currently working in different areas of the Company.
For further information about the programs, we recommend reading the Informe de
Actividades de Responsabilidad Social 2013 (2013 Report on Social Responsibility
Activities) available on tarjetanaranja.com
Recognitions
Tarjeta Naranja continues consolidating its leadership and positioning among the most recognized
companies in the country. During 2013, the Company continued winning recognitions and awards.
It is worth mentioning, the prize awarded by ZonaJobs, an Argentine leading employment site that
conducted a survey of more than 20,000 employees to prepare a ranking of the most qualified
companies to develop the work life. Tarjeta Naranja was ranked second among “The Best
Companies Qualified by Their Employees” (“Las empresas mejor calificadas por sus
empleados”) and third among “The Most Valued Companies” (“Las empresas más
valoradas”), on which people would like to work.
Naranja also had a significant place in the rankings of the most influential press publications in the
rd
country. In August, it was included in the 23 place in the “The 100 Companies with the Best
Reputation in Argentina” (“Las 100 empresas con mejor reputación del país”) ranking
published by Clarín Newspaper. In the same month, El Cronista newspaper placed us sixth in its
“The 100 Companies with the Highest Turnover” (“Las 100 empresas que más facturan”)
th
ranking and in December we were placed 36 in the “The 100 Companies with Best Image”
(“Ranking de las 100 empresas con mejor imagen”) ranking published by Ámbito Financiero
newspaper.
Moreover, creativity and communication strategy were recognized with important prizes: a Silver
Effie Award for the Financially Incorrect campaign, in addition to a Grand Prix and FePI prize for
the advertising spot carried out for the classification of the National Soccer Team. These are in
addition to the above-mentioned prizes for the “2013 Best Digital Campaigns” awarded by the
Interactive Advertising Bureau.
PROJECTIONS AND OUTLOOK FOR 2014
2014: Restart
After a year of intense activity, we propose ourselves to consider it ended and start again with the
intention of making 2014 a better year for everybody. In the words of David Ruda, Tarjeta Naranja’s
CEO: “Restart is to start again. Start from scratch, over and out, reset. It is to clear our minds of the
memories of difficult times and fill our hearts with new, ambitious, daring, different projects that
allow us to follow a different path to arrive different places.”
With this spirit we began a new fiscal year, in which the Company will focus on consolidating its
presence and share in the market of the City and Province of Buenos Aires, keeping its leadership
in the rest of the country.
During 2014, we will work on broadening the customer’s experience, increasing efficiency in all
areas and achieving improvements in processes with the support of the LEAN methodology.
Adopting this system in several key processes is one of the most important steps taken in 2013
that will be continued. We will continue changing other processes and we will work to ensure that
the improvements achieved are maintained over time, applying the tools and the same enthusiasm
with which they started.
With the mission to continue adding value to customers, we will work on increasing multichanneling. We will seek to make available to Cardholders and Merchants (“Comercios Amigos”)
multiple ways to access all Tarjeta Naranja’s services simply and easily. Thus, we will continue
developing management tools to boost Naranja’s online service. We will also continue working on
providing facility and comfort for customers to obtain and pay their account statement.
In order to optimize internal communication, we will implement a Collaborative Network, a tool
that will foster participation and encourage employees to share information. Its main advantages
will be the access to collective knowledge, the stimulation of joint work and the leading roles of
employees.
As official sponsor of Argentina’s National Soccer Team and due to 2014 Brazil World Cup, we
will conduct a strong institutional campaign with activities and special benefits for Cardholders and
Merchants (“Comercios Amigos”), where the main purpose will be the loyalty of this audience. In
line therewith, the Corporate Social Responsibility “Un gol, un potrero” program will be boost and
will play an important role this year.
During 2014, we seek to continue launching innovative products to the market, which are added to
Tarjeta Naranja’s array of products and services.
Towards the last quarter of the year, we expect to move to and operate the new headquarters in
Córdoba, which will be called Casa Naranja and will be a milestone in the Company’s history.
Regarding economic aspects, we will continue adapting to the real macroeconomic situation, which
has a significant influence on the course of our operations.
THE BOARD OF DIRECTORS
Schedule: Report on the Degree of Compliance with the Code on Corporate Governance
Compliance
Noncompliance
Report or Explain
Total Partial
PRINCIPLE I. MAKE THE RELATIONSHIP TRANSPARENT AMONG THE ISSUER, THE GROUP HEADED THEREBY AND/OR OF WHICH IT IS A MEMBER AND ITS
RELATED PARTIES
Recommendation
From a business viewpoint, Tarjeta Naranja S.A. is controlled by Tarjetas Regionales S.A., a member of Grupo
I.1: Ensure the
X
Financiero Galicia S.A. This structure allows taking advantage of significant synergies. All business relationships with
disclosure by the
group companies, whether permanent or occasional in nature, are built under normal and usual market conditions. In
Management Body
accordance with professional accounting standards and as suggested by the best practices, the Company reports
of the applicable
related party transactions in notes to the financial statements. The information disclosed includes the significant
policies to the
transactions performed with shareholders and managers under usual market conditions.
Issuer’s
relationship with
Pursuant to the Company’s Code of Ethics, Tarjeta Naranja considers the transparency of information as the basic
the group headed
principle that shall govern its relationship with shareholders, thus ensuring that the information reported to them, the
thereby and/or of
appropriate markets and to said markets’ regulatory bodies, is true and complete. Said information shall accurately
which it is a
reflect the Company’s financial condition and results of its operations, and shall be reported within the terms specified
member and its
and in compliance with the other requirements set forth in the applicable standards and general principles of market
related parties.
operations as well as those related to good corporate governance assumed by the Company.
Recommendation
I.2: Ensure the
existence of
mechanisms that
would prevent
conflicts of
interests.
X
Tarjeta Naranja has a Code of Ethics, which establishes the patterns of behavior related to business objectivity and
the identification of possible conflicts of interests.
In addition, the Company’s Code of Ethics sets forth the duty to avoid acting on behalf of the Company in those
situations that pose any type of personal interest or where either the person involved or his/her close relatives may
personally benefit from a business opportunity in which the Company may be involved. Neither is it allowed to perform
business or professional activities at the same time than those carried out for the Company, which in any way may
compete with any of the Company’s businesses.
In the event any conflict of interest arises due to employment reasons or of any other kind, the facts shall be reported
with no delay to the appropriate Manager.
Additionally, those who may have any influence on Tarjeta Naranja’s business decisions (or any of their close
relatives) may not have a significant financial interest; for example, as a shareholder or administrator, in any of Tarjeta
Naranja S.A.’s suppliers, without the prior written consent by Tarjeta Naranja S.A.’s Board of Directors.
Compliance
Noncompliance
Report or Explain
Total Partial
PRINCIPLE I. MAKE THE RELATIONSHIP TRANSPARENT AMONG THE ISSUER, THE GROUP HEADED THEREBY AND/OR OF WHICH IT IS A MEMBER AND ITS
RELATED PARTIES
Recommendation
Pursuant to the Code of Ethics and the Confidentiality Agreement signed by any member of the organization upon
I.3: Prevent the
X
joining the Company, such member agrees not to state, disseminate, disclose or report to third parties the information
misuse of inside
he/she may obtain or be provided to perform his/her duties and not to use it for his/her own benefit. Tarjeta Naranja’s
information.
employees or those contracted thereby, such as in the cases of external audits or consulting firms, shall refrain from
using confidential information for their own benefit and/or for the benefit of third parties (by virtue of the provisions set
out in the Code of Ethics and, generally, in the contracts executed therewith). This includes the fact that the
employees shall refrain from transferring confidential information to another person who then trades Tarjeta Naranja
S.A.’s securities, including call or put options on such securities, as well as from trading securities of any other
Company whose value could be affected by Tarjeta Naranja’s decisions that have not been released to the public yet,
as well as call or put options on such securities.
PRINCIPLE II. LAY THE BASIS FOR A SOUND MANAGEMENT AND SUPERVISION OF THE ISSUER
Recommendation
II. 1: Ensure that
X
the Management
Body assumes the
management and
supervision of the
Issuer and its
strategic
orientation
II.1.1.1 Approved
The Board of Directors annually reviews, submits for discussion and approves the strategic plan from which the
strategic plan,
X
management goals arise, as well as it approves the annual budget. This is entered into the Minutes of the Board of
management goals
Directors' meetings. The Committee for Information Integrity monthly follows up the approved plans and, if
and annual
appropriate, the Board of Directors determines the necessary adjustments.
budgets approved
by the
Management
Body.
II.1.1.2 Policy on
There is a policy on investments and financing approved by the Board of Directors.
investments and
X
financing approved
by the
Management
Body.
Compliance
Noncompliance
Report or Explain
Total Partial
PRINCIPLE II. LAY THE BASIS FOR A SOUND MANAGEMENT AND SUPERVISION OF THE ISSUER
II.1.1.3 Policy on
The Board of Directors is in charge of managing Tarjeta Naranja S.A., and approving and monitoring that the general
corporate
X
policies and strategies are implemented, particularly:
governance
approved by the
• The strategic or business plan, as well as the annual management and budget goals;
Management Body.
• The policy on investments and financing;
• The policy on corporate governance;
• The policy on corporate social responsibility;
• Policies on risk monitoring and management and any other policy aimed at the regular monitoring of internal
information and control systems;
• The development of ongoing training programs for directors and senior officers;
• The entity’s Code of Ethics;
• The policies on personnel compensation, economic incentives and performance evaluations;
• The policy on selection of suppliers and their treatment, avoiding the concentration of activities and conflicts of
interests;
• Senior Management’s powers and responsibilities.
Additionally, the Board of Directors monitors compliance with the internal control and the regulatory framework, and
the entity's risk profile, analyzing management reports prepared for Senior Management.
The Board of Directors considers that establishing an adequate internal control is essential to meet the goals defined.
Accordingly, internal audit processes play a key role within the organization.
II.1.1.4. Policy to
select, evaluate and
compensate firstclass managers
approved by the
Management Body.
X
The Human Resources Department sets policies on selection to fill vacancies at all organization levels, according to
each position description. Internal contests, evaluations of potentials and external recruitments through specialized
consulting firms are carried out to evaluate candidates and select them.
Evaluations consider compliance with goals and qualitative aspects of each one’s performance based on the required
skills and corporate values.
Compensation is established based on salary bands defined according to the responsibilities assigned to each of the
positions.
All these policies are approved by the Board of Directors.
II.1.1.5. Policy to
assign
responsibilities to
first-class managers
approved by the
Management Body.
X
The issuer has position descriptions for all organization levels. The necessary skills for the performance in each
position are described in such position descriptions, as well as the responsibilities assigned thereto.
According to the position levels, descriptions are approved by each division and, in the case of descriptions of firstclass manager positions, they are approved by the Management Body.
Compliance
Noncompliance
Report or Explain
Total
Partial
PRINCIPLE II. LAY THE BASIS FOR A SOUND MANAGEMENT AND SUPERVISION OF THE ISSUER
II.1.1.6 Supervision
With the information about the evaluation process and an evaluation of potential performed by first-class human
of succession
X
resources consulting firms, the Human Resources Division annually prepares a map of talents, identifying risk areas (as
plans of first-class
to positions and persons) to be covered and the most suitable successors for each case, as well as the potential of each
managers
of Tarjeta Naranja’s Managers. With the successors identified, the skills required for each position defined by the Board
approved by the
of Directors and Senior Management and the results of evaluations, development plans are prepared in order to ensure
Management Body.
that Tarjeta Naranja always has the necessary talents to guarantee the success of its management. The outcome of the
process described above is finally submitted to and approved by the Board of Directors and translates into specific and
personalized action plans.
II.1.1.7. Policy on
The policy on Corporate Social Responsibility is reviewed by the Board of Directors, which approves the actions to be
Corporate Social
X
performed in each fiscal year. It follows up the actions through the reports annually submitted by the Social Responsibility
Responsibility
area.
approved by the
Management Body.
The policies implemented are mainly focused on the following aspects:

II.1.1.8 Policy on
comprehensive risk
management and
internal control and
fraud prevention
approved by the
Management Body.
X
Our community: Apadrinando Escuelas (Support for Schools); Apadrinando Comedores (Support for Community
Kitchens); Missions; Débito Solidario (Solidary Debit); Un Gol, un Potrero (One Goal, One Soccer Field); actions carried
out from the branches in the communities where we are; cultural actions. Scholarships for primary and secondary school
students. Schoolwork transition program for six-year students of marginal schools; Internship program for secondary
schools: Donation of technological equipment.

Environment: Sale of out-of-use paper to be recycled (eco-efficient paper); ecological bags; remanufactured
toners and safe destruction of casings; recycling and final disposal of technological waste; campaign of bottle caps; cans
for work (sculpture built with cans of food that are then donated to non-profit organizations).

Our Employees: Training; the Best Place to Work; work environment; personnel selection; honors and
recognitions; hiring of people with different abilities.

Our Customers: Assured quality; means of contact and communication with our customers.
Tarjetas Regionales, the controlling company, has a specific area for the risk analysis that supplements the analyses
performed by the Issuer.
Tarjeta Naranja has several committees reporting to the Board of Directors, such as the Audit Committee, the Control
and Prevention of Money Laundering Committee and the Committee for Information Integrity. All these Committees
ensure that financial internal control systems are sufficient, adequate and efficient, as well as the proper operation of the
controls related to fraud detection, prevention of money laundering and the transparency of the entity’s information.
Thus, the Audit Committee quarterly supervises the progress of the annual audit plan, which, along with the Committee
for Information Integrity, is intended to identify critical risks. During each meeting, the Audit Committee receives
information from the internal audit department about the most significant events and the recommendations arising from
its work, as well as the status of the recommendations issued in prior years, always for the sake of helping create an
adequate control environment.
In addition, the Prevention of Money Laundering and Funding of Terrorist Activities Committee meets every two months
to show the results of controls and prevention of asset laundering, funding of terrorist activities and other illegal
activities, in accordance with effective legal and administrative rules, in order to reduce and eliminate civil, criminal or
commercial-type responsibilities for the organization.
Compliance
Noncompliance
Report or Explain
Total Partial
PRINCIPLE II. LAY THE BASIS FOR A SOUND MANAGEMENT AND SUPERVISION OF THE ISSUER
II.1.1.9 Policy on
The Company’s Directors and Managers are trained enough to perform duties in their positions. The training plans
ongoing training for
X
managed by Human Resources aimed thereat include subjects related to strategy, management, trends, among
the members of the
others. Additionally, if the position requires so, the necessary technical training courses are added for the several
Management Body
positions.
and first-class
managers.
II.1.2 Other
significant policies
N/A
approved by the
Management Body
II.1.3 Policy
The Board of Directors meets at least once per month and, as required by any of the directors, it is in charge of
intended for
X
Tarjeta Naranja S.A.'s general management and makes all the necessary decisions to fulfill said task. The members
ensuring the
of the Board of Directors also take part, to a higher or lesser extent, in the committees created. Therefore, they are
availability of
continuously informed about the entity’s course of business and become aware of the decisions made by such
material
bodies, which are transcribed into minutes.
information for the
Additionally, the Board of Directors receives a monthly report prepared by the Chief Executive Officer, prepared by
Management Body
the Management Control area, the purpose of which is to report the material issues and events addressed at the
and a direct
different meetings held between him and Senior Management. The Board of Directors becomes aware of such
consultation way
reports, evidencing so in minutes.
for managerial staff
symmetrically for
executive, external
and independent
members and in
advance.
II.1.4 Matters
The different processes have scorecards, whose indicators allow the different management divisions to monitor the
submitted for the
X
Company's activity and risk. A compliance parameter, a slight excess range and an undesired excess range have
Management
been defined for each indicator. The last two have contingency plans associated therewith, which specify the actions
Body’s approval,
to be taken upon excesses. The indicators that are included within an unacceptable range are reported to
accompanied by
Management, together with the remediation plan to be followed to redress the situation.
risk analyses and
The management information is monthly submitted to the Committee for Information Integrity and the Board of
acceptable risk
Directors.
level.
Tarjetas Regionales, the controlling company, has a specific area for the risk analysis that supplements the analyses
performed by the Issuer.
Recommendation
II.2:
Ensure an effective
business
management
control.
X
Compliance
Noncompliance
Report or Explain
Total Partial
PRINCIPLE II. LAY THE BASIS FOR A SOUND MANAGEMENT AND SUPERVISION OF THE ISSUER
II.2.1 The
Compliance with the annual budget and business plan is verified during the Board of Directors’ meetings held
Management Body
X
monthly by analyzing the management control report submitted by the Chief Executive Officer. The matters
verifies compliance
approved, as well as the changes introduced in planning, are entered into minutes.
with the annual
budget and
business plan.
II.2.2 The
The Management Body generally verifies the first-class managers’ performance upon assessing compliance with the
Management Body
X
year’s strategic plan. It individually validates the goals assigned to each of them and the qualitative aspects of the
verifies first-class
individual performance based on the required skills and corporate values.
managers'
performance.
Recommendation
II.3: Report the
X
Management
Body’s
performance
evaluation process
and the related
impact.
II.3.1 Each
The Bylaws regulate the frequency of meetings, the appointment of the Chairman, the term of office, the scheme of
member of the
X
valid sessions and guarantees granted by directors. Each director fully meets the provisions set out in the Company’s
Management Body
Bylaws. At the Company, there are no Special Regulations governing the Management Body's operation, other than
complies with the
the provisions set out in the Corporate Bylaws.
Corporate Bylaws
and, as the case
may be, with the
Regulations
governing the
Management
Body’s operation.
Specify the main
guidelines set out
in the Regulations.
State the degree of
compliance with
the Corporate
Bylaws and
Regulations.
Compliance
Noncompliance
Report or Explain
Total Partial
PRINCIPLE II. LAY THE BASIS FOR A SOUND MANAGEMENT AND SUPERVISION OF THE ISSUER
II.3.2 The
As established by the Companies Law, the results of the Board of Directors’ performance are approved by the
Management Body
X
shareholders at the Ordinary Shareholders' Meeting, along with the approval of the financial statements.
discloses the
The Board of Directors provides thorough explanations in its Annual Report and answers all the questions asked at
results of its
the Shareholders' Meeting, but it refrains from expressing an opinion on its performance, by virtue of legal
performance
restrictions. The assessment is conducted by the shareholders at the Shareholders’ Meeting, taking as well into
considering the
consideration the informed opinion of the Supervisory Committee.
goals set at the
beginning of the
period, so that the
shareholders may
assess the degree
of compliance with
such goals, which
contemplate both
financial and nonfinancial aspects.
Furthermore, the
Management Body
submits a
diagnosis about
the degree of
compliance with
the policies
mentioned in
Recommendation
II, points II.1.1.and
II.1.2.
Recommendation
II.4:
X
That the number of
external and
independent
members
represents a
significant
proportion in the
Management
Body.
Compliance
Noncompliance
Report or Explain
Total Partial
PRINCIPLE II. LAY THE BASIS FOR A SOUND MANAGEMENT AND SUPERVISION OF THE ISSUER
II.4.1 The
Tarjeta Naranja S.A.’s Board of Directors is the highest management body of the Company. It is made up of eight
proportion of
X
non-independent Directors and five non-independent alternate Directors, who should have the necessary knowledge
executive, external
and skills to clearly understand their corporate governance responsibilities and duties, and act as faithfully and
and independent
diligently as a good businessperson does.
members (the
Tarjeta Naranja S.A. complies with the appropriate standards regarding the total number of directors. Its Bylaws also
latter defined by
provide for the flexibility necessary to adapt the number of directors to the possible changes in the conditions in which
the regulations of
the entity carries out its activities, from five to nine directors. As Tarjeta Naranja S.A. does not publicly offer its
this Commission)
shares, but debt securities, it is not required to have a given number of independent directors.
of the
The General Shareholders’ Meeting has the power to establish the number of directors and appoint them.
Management Body
The policy on the appointment of directors is the responsibility of the Shareholders’ Meeting. Tarjeta Naranja S.A.’s
corresponds with
Board of Directors does not take part in such decisions, as its members have no decision-making power at the
the Issuer’s capital
Shareholders’ Meeting.
structure. Specify.
II.4.2. During the
Taking into account the information provided in the preceding point, over the last few years, the Shareholders’ Meeting
current year,
X
has not set a policy regarding the proportion of independent directors. Neither are there shareholders' agreements
through a General
aimed at appointing members of the Management Body.
Shareholders’
During the year elapsed, the independence of the members of the Board of Directors has not been challenged and
Meeting, the
there have been no abstentions due to conflict of interests.
shareholders
agreed on a policy
aimed at having a
proportion of at
least 20% of
independent
members of total
members of the
Management
Body.
Recommendation
The members of the Board of Directors are appointed by the Shareholders’ Meeting, pursuant to effective laws. As
II.5: Agree on the
X
regards first-class managers, the Company deems it appropriate for the Board of Directors to appoint them. Tarjeta
existence of
Naranja S.A.’s policy (reflected in its Code of Ethics) requires first-class executives to be people who qualify therefor
standards and
by virtue of their appropriate education and experience, and who perform their duties professionally, ethically and
procedures
responsibly.
inherent to the
selection and
proposal of
members of the
Management Body
and first-class
managers.
Compliance
Noncompliance
Report or Explain
Total Partial
PRINCIPLE II. LAY THE BASIS FOR A SOUND MANAGEMENT AND SUPERVISION OF THE ISSUER
II.5.1 The Issuer has
The Company does not currently have an Appointment Committee, because it considers the procedures currently
an Appointment
X
followed to appoint first-class managers to be adequate and effective. For the time being, the Company considers that
Committee
the introduction of such committee may become excessively bureaucratic for the current structure. However, it does
not disregard the possibility of implementing it in the future, if deemed advisable.
II.5.1.1
N/A
II.5.1.2
N/A
II.5.1.3
N/A
II.5.1.4
N/A
II.5.1.5
N/A
II.5.2
N/A
II.5.2.1.
N/A
II.5.2.2
N/A
II.5.2.3
N/A
II.5.2.4
N/A
II.5.2.5
N/A
II.5.2.6
II.5.2.7
N/A
II.5.3
N/A
N/A
Recommendation
Most of Tarjeta Naranja S.A.’s directors are employees of the Company itself, of the controlling company or of group
II.6: Assess whether
X
companies. Directors manage and monitor the tasks related to Tarjeta Naranja S.A.’s areas and the Board of
it is advisable for
Directors, as a body itself, approves the related guidelines and strategies. There is no limitation as regards the fact
members of the
that directors can perform their duties at other entities that are not part of the group, but the shareholders select
Management Body
directors and syndics in such a way that they always perform duties at similar companies.
and/or syndics
As regards syndics, whereas Argentine laws provide them a legality control function, Tarjeta Naranja S.A. considers
and/or members of
there are no impediments for syndics to take part in different Supervisory Syndics’ Committees. Moreover, if that
the Oversight
happens in companies related by control relationships, it is deemed a considerable advantage when analyzing
Committee to
businesses or activities that are common between them and their interaction in the bodies.
perform duties at
several Issuers.
Recommendation
II.7: Ensure the
X
training and
development of
members of the
Management Body
and first-class
managers of the
Issuer.
Compliance
Noncompliance
Report or Explain
Total Partial
PRINCIPLE II. LAY THE BASIS FOR A SOUND MANAGEMENT AND SUPERVISION OF THE ISSUER
II.7.1 The Issuer
As regards Senior Management’s training, Tarjeta Naranja has training and development programs, designed on a
has ongoing
X
personalized basis, which include courses in information security and internal and external frauds, as well as refresher
Training Programs
courses in technical, leadership and management matters. With respect to training in prevention of money laundering
related to the
and funding of terrorist activities, and SOX (Sarbanes-Oxley) matters, Tarjeta Naranja S.A. has managed such training
existing needs of
for those persons directly engaged in the matter.
the Issuer for the
members of the
Management Body
and first-class
managers, which
include matters
about their roles
and
responsibilities, the
comprehensive
business risk
management,
specific business
knowledge and the
related regulations,
the dynamics of
corporate
governance and
corporate social
responsibility
matters. In the
case of the
members of the
Audit Committee,
international
accounting,
auditing and
internal control
standards, as well
as specific capital
market regulations.
Compliance
Noncompliance
Report or Explain
Total Partial
PRINCIPLE II. LAY THE BASIS FOR A SOUND MANAGEMENT AND SUPERVISION OF THE ISSUER
II.7.2 The Issuer,
The members of the Board of Directors and Senior Management are free and supported by the Company to carry out
through other
X
the training courses deemed advisable.
means not
mentioned in II.7.1,
encourages the
Management Body
and first-class
managers to be
constantly trained
so as to
supplement their
education level
thus adding value
to the Issuer. State
how this is done.
PRINCIPLE III. GUARANTEE AN EFFECTIVE POLICY TO IDENTIFY, ASSESS, MANAGE AND DISCLOSE THE BUSINESS RISK
Recommendation
III: The
X
Management Body
shall have a policy
on the
comprehensive
business risk
management and
monitors its
appropriate
implementation.
Compliance
Noncompliance
Report or Explain
Total Partial
PRINCIPLE III. GUARANTEE AN EFFECTIVE POLICY TO IDENTIFY, ASSESS, MANAGE AND DISCLOSE THE BUSINESS RISK
III.1 The Issuer has
The nature of the Company's operations and the characteristics of its customer base expose it to several risks,
policies on
X
primarily related to market risks (including the effects of changes in exchange rates and interest rates) and capital,
comprehensive
credit and liquidity risks. In order to manage the volatility related to these exposures, Management carries out an
business risk (on
ongoing risk monitoring, measurement and identification process. In addition to the analyses performed by the Board
compliance with
of Directors and Management, risk analyses have been performed by the controlling company through a specific area
strategic,
created to such end.
operating,
As regards the credit risk management related to cash, cash equivalents and deposits with banks and financial
financial,
institutions, the Company has an investment and credit assessment policy from the financial institution.
accounting
In connection with the risk associated with its customers' credit positions, the Company actively monitors the credit
reporting, laws and
reliability of its customers in order to mitigate the credit risk. Furthermore, Tarjeta Naranja S.A. has a strong policy to
regulations goals,
address customers’ payment in arrears.
among others).
The Company has a liquidity policy that is monitored through annual, monthly and daily cash estimates, analyzing the
Describe the most
needs and/or surpluses generated, evaluating the availability of cash and the available financing alternatives.
significant aspects
Also, the credit lines borrowed are strengthened by executing commitment agreements that allow having cash
thereof.
immediately, both in normal financial context and in market liquidity contraction situations.
The operations performed by the Company and its subsidiaries are potentially exposed to foreign currency exchange
rate fluctuations mainly due to amounts outstanding of notes (“obligaciones negociables”) denominated in U.S.
dollars. As the policy of the Company and its subsidiaries is based on mitigating the exchange rate risk related to its
business and operations, a series of hedging transactions were performed with respect to the foreign currencydenominated debt in order to hedge the exchange rate risk to which they would be otherwise exposed.
The Company is exposed to interest rate risks due to financings obtained through the issuance of notes
(“obligaciones negociables”) and borrowing of financial leases and loans at variable rate. In all cases of loans and
notes (“obligaciones negociables”) with variable rate, the applicable rate is private Badlar.
Compliance
Noncompliance
Report or Explain
Total Partial
PRINCIPLE III. GUARANTEE AN EFFECTIVE POLICY TO IDENTIFY, ASSESS, MANAGE AND DISCLOSE THE BUSINESS RISK
III.2 There is a Risk
One of Tarjeta Naranja S.A.’s responsibilities is to implement a sensible risk management. Therefore, risk
Management
X
management has been assigned to different divisions, which deal with the management of credit, financial, fraud and
Committee inside
asset laundering risks, among others. The following are the goals of these areas:
the Management
• Actively and comprehensively manage and monitor the several risks taken, ensuring compliance with internal
Body or General
policies and regulations in force.
Division. Report on
• Ensure that the Board of Directors understands the risks to which it is exposed, proposing how to cover them.
the existence of
• Help strengthen the risk culture.
manuals of
• Design and suggest policies and procedures to mitigate and control risks.
procedures and
• Escalate risk exceptions to the General Division.
detail the main risk
factors that are
specific to the
Issuer or its activity
and the mitigation
actions
implemented. If
there is not such a
Committee, the risk
management
supervision role
performed by the
Audit Committee
shall be described.
Also, specify the
degree of
interaction
between the
Management Body
or its committees
with the Issuer’s
General Division in
relation to the
comprehensive
business risk
management.
Compliance
Noncompliance
Report or Explain
Total Partial
PRINCIPLE III. GUARANTEE AN EFFECTIVE POLICY TO IDENTIFY, ASSESS, MANAGE AND DISCLOSE THE BUSINESS RISK
III.3 There is an
In addition to the considerations disclosed in the preceding recommendation, for this duty there is a specific area at
independent
X
the controlling company.
function within the
Issuer’s General
Division that
implements the
comprehensive risk
management
policies (Risk
Management
Officer function or
equivalent one).
Specify.
III.4
We have aligned the internal control system for the financial information, following the criteria set out in the “Internal
Comprehensive
X
Control Framework” issued by COSO (Committee of Sponsoring Organizations of the Treadway Commission), with
risk management
the requirements set forth by Section 404 of US Sarbanes-Oxley Act, a process that is monitored by the Audit
policies are
Committee. These regulations require submitting, along with the annual audit, a report on the Company’s
permanently
management in connection with the design and maintenance, as well as a periodic assessment, of the internal
updated according
control system for financial reporting, together with our external auditor’s report.
to authoritative
The internal audit area has planned to certify the internal audit activity under International Standards for the
recommendations
Professional Practice of Internal Auditing, issued by The Institute of Internal Auditors based in USA. With this, we
and methodologies
seek to determine whether the audit activity is performed in conformity with the standards defined in the International
in the field. State
Framework for the Professional Practice of Internal Auditing, under the Standards issued by The Institute of Internal
which.
Auditors based in USA.
III.5 The
Management Body
reports the results
of monitoring risk
management
performed jointly
with the General
Division in the
financial
statements and the
Annual Report.
Specify the main
aspects of the
above disclosures.
X
The outcome of risk management is reported to the Board of Directors and is disclosed in notes to the financial
statements, specifically in Note 4, which refers to the financial risk management and where the credit, liquidity, market
and capital management risks are analyzed. Such financial statements are submitted for the approval of the
Shareholders’ Meeting.
Compliance
Noncompliance
Report or Explain
Total Partial
PRINCIPLE IV. SAFEGUARD THE INTEGRITY OF FINANCIAL INFORMATION WITH INDEPENDENT AUDITS
Recommendation
IV: Ensure the
X
independence and
transparency of the
duties the Audit
Committee and the
External Auditor
are entrusted with.
IV.1 The
As shown above, TN is not required to have independent directors since it does not publicly offer its shares, but debt
Management
X
securities. Therefore, the members of the Audit Committee are dependent directors. Moreover, directors meet the
Body, when
principles defined in Tarjeta Naranja S.A.’s Code of Ethics.
appointing the
members of the
Audit Committee,
considering that
most of them shall
be independent,
assesses whether
it is advisable to be
chaired by an
independent
member.
Compliance
Noncompliance
Report or Explain
Total Partial
PRINCIPLE IV. SAFEGUARD THE INTEGRITY OF FINANCIAL INFORMATION WITH INDEPENDENT AUDITS
IV.2 There is an internal
Tarjeta Naranja S.A. has an internal control system implemented by the Board of Directors and Senior
audit function that reports
X
Management. Internal and External Audit independently monitor such system, with unrestricted access to the
to the Audit Committee or
entity's sectors and information. The Issuer has an Internal Audit area fully independent from the other operating
the Management Body’s
areas, as well as from the controlling company, whose mission is to assess and monitor the effectiveness of the
Chairperson and that is
internal control system with the purpose of ensuring compliance with applicable laws and regulations.
responsible for assessing
Furthermore, the Audit Committee monitors such compliance. All Tarjeta Naranja's employees are responsible
the internal control
for complying with the internal control, the internal and external regulations and corporate governance rules.
system.
Internal Audit is responsible for assessing and monitoring the effectiveness of the internal control system in order
State whether the Audit
to provide reasonable assurance about whether the following goals are attained:
Committee or the
• Effectiveness and efficiency of operations
Management Body
• Reliability of the accounting information
annually assesses the
• Compliance with applicable laws and regulations
performance of the
The area complies with an annual work plan, the planning and scope of which are based on identifying and
internal audit area and
assessing the entity’s risks.
the degree of
It periodically issues reports on the progress of follow-ups on findings, and the plans or actions to redress the
independence of its
situation. These reports are submitted to the Audit Committee to be addressed at such body’s meeting.
professional work,
The area is working on a project to be certified by the Institute of Internal Auditors in Argentina.
understanding as such
that the professionals in
charge of such function
are independent from the
other operating areas and
meet independence
requirements with respect
to the controlling
shareholders or related
entities that have a
material influence on the
Issuer.
Also specify whether the
internal audit function
performs its work in
conformity with the
International Standards
for the Professional
Practice of Internal
Auditing issued by The
Institute of Internal
Auditors (IIA).
Compliance
Noncompliance
Report or Explain
Total
Partial
PRINCIPLE IV. SAFEGUARD THE INTEGRITY OF FINANCIAL INFORMATION WITH INDEPENDENT AUDITS
IV.3 The members of the
The Audit Committee has a close relationship with the external auditors, which allows it to thoroughly analyze
Audit Committee
X
the significant aspects of the audit of financial statements and obtain detailed information about work planning
annually assess the
and progress. The Audit Committee also assesses the services rendered by our external auditors, determines
suitability, independence
whether their independence condition is met, as required by applicable laws, and monitors their performance in
and performance of the
order to ensure that it is satisfactory.
External Auditors
appointed by the
Shareholders’ Meeting.
Describe the significant
aspects of the
procedures used to
perform the assessment.
IV.4 The Issuer has a
Regarding the turnover of the members of the External Audit, Tarjeta Naranja is governed by the policies defined
policy on the turnover of
X
by its controlling company. In this respect, given the particular characteristics of the business, the turnover of the
the members of the
audit firm is deemed inadequate, mainly due to the complexity of the businesses to be controlled and audited
Supervisory Committee
and the lengthy period of time it would take a person who is completely unfamiliar with the function to start to
and/or the External
understand such businesses. However, the turnover of the signing partner, who turns over every a five-year
Auditor, and, in the case
period, is deemed adequate.
of the latter, if turnover
includes the external
audit firm or only natural
persons.
Compliance
Noncompliance
Total Partial
PRINCIPLE V. RESPECT THE SHAREHOLDERS’ RIGHTS
Recommendation V.1:
Ensure that the
X
shareholders have
access to the Issuer’s
information.
V.1.1 The
Management Body
X
fosters periodic
informative meetings
with the shareholders,
which take place at the
same time with the
presentation of the
interim financial
statements. Specify
stating the number
and frequency of
meetings held in the
course of the year.
V.1.2 The Issuer has
mechanisms for
X
reporting to investors
and a specialized area
to answer inquiries. It
also has a web site,
which may be
accessed by
shareholders and
other investors and
which allows an
access channel for
them to establish
contact between them.
Specify.
Recommendation V.2:
Encourage the active
X
participation of all
shareholders.
Report or Explain
The interim financial statements are addressed at Board of Directors’ meetings. In Tarjeta Naranja S.A.’s case,
the Board of Directors is made up of executives from the controlling company or group companies. Accordingly, it
is not deemed necessary to foster informative meetings other than the Board of Directors’ meetings that approve
the financial statements to submit them to the shareholders.
The Company has a web site, where financial information is provided and, upon any inquiry, members of the
Board of Directors assist investors. Furthermore, Tarjeta Naranja S.A. periodically submits corporate and financial
information through the web page of the CNV, the Stock Exchange and MAE. The Company also has telephone
lines to answer inquiries.
Compliance
Noncompliance
Report or Explain
Total
Partial
PRINCIPLE V. RESPECT THE SHAREHOLDERS’ RIGHTS
V.2.1. The
In the particular case of Tarjeta Naranja, it is not necessary to take any measures aimed at promoting attendance
Management
X
to Shareholders’ Meetings, because shares are concentrated in two shareholders, both of whom are members of
Body takes
the group to which it belongs.
measures to
encourage the
participation of
all the
shareholders
at the General
Shareholders’
Meetings.
Specify by
differentiating
the measures
required by law
from those
voluntarily
offered by the
Issuer to its
shareholders.
V.2.2. The
Tarjeta Naranja considers that this type of regulations are not necessary since, as explained above, it only has two
General
X
shareholders, both of whom are members of the same group to which it belongs. Consequently, the information
Shareholders’
flows well in advance prior to decision-making.
Meeting has
Regulations to
govern its
operation,
which ensure
that the
information is
available well
in advance for
decisionmaking.
Describe the
main
guidelines
thereof.
Compliance
Noncompliance
Report or Explain
Total
Partial
PRINCIPLE V. RESPECT THE SHAREHOLDERS’ RIGHTS
V.2.3 The
Given Tarjeta Naranja S.A.’s share distribution, the implementation of special mechanisms is not necessary for the
mechanisms
X
minority shareholders to propose matters to be discussed at the General Shareholders’ Meeting.
implemented
by the Issuer
are applicable
so that the
minority
shareholders
propose
matters to be
discussed at
the General
Shareholders’
Meeting, in
conformity with
the provisions
set out in
effective
regulations.
Specify the
results.
V.2.4 The
As explained above with respect to Tarjeta Naranja’s share distribution, the application of these policies is not
Issuer has
X
necessary.
policies to
encourage the
participation of
the most
significant
shareholders,
such as
institutional
investors.
Specify.
Compliance
Noncompliance
Report or Explain
Total Partial
PRINCIPLE V. RESPECT THE SHAREHOLDERS’ RIGHTS
V.2.5 At the
To date, no decision has been made regarding the implementation of a Code on Corporate Governance. However,
Shareholders’
X
the Company does not disregard the possibility of implementing it.
Meetings, where
members of the
Management
Body are
proposed, the
following is
informed prior to
voting: (i) each
candidate’s
position
regarding
whether to
adopt or not a
Code on
Corporate
Governance;
and (ii) the
grounds for
such position.
Recommendation
Tarjeta Naranja S.A. has outstanding non-endorsable registered ordinary shares, entitled to one vote per share.
V.3: Ensure the
X
Even in the case where as established in the Bylaws, non-endorsable registered preferred shares were issued, they
principle of equity
would be also entitled to only one vote per share. Over the last three years, the structure of outstanding shares has
between share and
not changed, of which 100% are non-endorsable registered ordinary shares.
vote.
Recommendation
Tarjeta Naranja publicly offers debt securities, rather than shares. As all the shareholders are part of the same group,
V.4: Establish
X
it was not deemed necessary to date to anticipate any specific mechanisms of protection against takeovers.
mechanisms of
protection for all
shareholders
against takeovers.
Compliance
Noncompliance
Report or Explain
Total Partial
PRINCIPLE V. RESPECT THE SHAREHOLDERS’ RIGHTS
Recommendation
Up to February 2012, Tarjetas Regionales S.A. owned 80% of shares, whereas Fedler S.A. and Dusner S.A. owned
V.5: Increase the
X
10% of shares each. Since then, Tarjetas Regionales S.A. has owned 99% of shares and Tarjetas Cuyanas S.A.
percentage of
owns the remaining 1%. The Company has no shares under the public offer system and, therefore, does not foster
outstanding shares
spreading its capital.
on capital.
Recommendation
V.6: Ensure that
X
there is a
transparent policy
on dividends.
V.6.1 The Issuer
The Bylaws provide that, realized and liquid profits will be allocated as follows: a) 5% until reaching 20% of capital
has a policy on the
X
stock to Legal Reserve; b) Board of Directors’ and Supervisory Committee’s compensation; c) the balance will be
distribution of
distributed among the shareholders as cash dividends within one year as from their approval – in proportion to their
dividends provided
respective payments – except as otherwise decided by the Ordinary Shareholders’ Meeting.
in the Corporate
Bylaws and
approved by the
Shareholders’
Meeting. Such
policy establishes
the conditions to
distribute cash
dividends or
shares. If there is
such a policy, state
the criteria,
frequency and
conditions that
shall be met for the
payment of
dividends.
Compliance
Noncompliance
Report or Explain
Total Partial
PRINCIPLE V. RESPECT THE SHAREHOLDERS’ RIGHTS
V.6.2 The Issuer
Tarjeta Naranja S.A.'s policy on distribution of profits is based on an adequate return on the capital invested by
has documented
X
shareholders and complies with the effective principles and regulations, including an analysis of the entity's resulting
processes to
liquidity and solvency situation if distribution were carried out.
prepare the
The Shareholders’ Meeting is the one which annually decides on the proposal of allocation of the Issuer’s
proposal for
Unappropriated Retained Earnings, after meeting the legal and statutory reserves required, as well as the voluntary
allocation of the
ones, if such a decision were made, carry forwards to new fiscal year and/or payment of dividends.
Issuer’s
Unappropriated
The last distribution of dividends was approved through the Ordinary Shareholders’ Meeting held on March 22, 2013.
Retained Earnings
that result in legal,
statutory and
voluntary reserves,
carry forwards to
new fiscal year
and/or payment of
dividends.
Specify those
processes and
detail the Minutes
of the General
Shareholders’
Meeting whereby
the distribution of
dividends (in cash
or shares) was or
was not approved,
if this is not
provided in the
Corporate Bylaws.
PRINCIPLE VI. KEEP A DIRECT AND RESPONSIBLE RELATION WITH THE COMMUNITY
Recommendation
VI: Provide the
X
community with the
disclosure of
matters relating to
the Issuer and a
channel of direct
communication
with the Company.
Compliance
Noncompliance
Report or Explain
Total Partial
PRINCIPLE VI. KEEP A DIRECT AND RESPONSIBLE RELATION WITH THE COMMUNITY
VI.1 The Issuer has
Tarjeta Naranja S.A. has a web page of the Company, which can be freely accessed, which is permanently updated
an updated web
X
and whereby the Company’s financial information may be accessed. Through such page, users may contact and
site of public
leave their inquiries, which are answered promptly. There is a blog, an online chat channel where visitors may read
access, which does
and comment on new products, advertising, promotions, technological and operating advances for the purpose of
not only furnish
making products and services jointly with customers, as well as presence on Facebook and Twitter. Furthermore,
material
Tarjeta Naranja S.A. periodically submits corporate and financial information through the web page of the CNV, the
information of the
Stock Exchange and MAE.
Company
(Corporate Bylaws,
group, members of
the Management
Body, financial
statements Annual
Report, among
others), but it also
gathers inquiries of
users in general.
Compliance
Noncompliance
Report or Explain
Total Partial
PRINCIPLE VI. KEEP A DIRECT AND RESPONSIBLE RELATION WITH THE COMMUNITY
VI.2 The Issuer
Tarjeta Naranja shares the social and environmental performance with its customers, employees, suppliers and the
issues an annual
X
entire community by annually publishing the Report on Activities, which systematizes the information about the
Report for Social
actions taken in connection with Social Responsibility. This report is divided into areas. These are as follows:
and Environment

Our community: Apadrinando Escuelas (Support for Schools); Apadrinando Comedores (Support for
Responsibility
Community Kitchens); Missions; Aporte Solidario (Solidary Contribution); Un Gol, un Potrero” (One Goal, One
purposes, which
Soccer Field); actions carried out from the branches in the communities where we are; cultural actions.
are verified by an

Environment: biodegradable cards; paper recycling; eco-efficient paper; ecological bags; remanufactured
independent
toners and safe destruction of casings; recycling and final disposal of technological waste.
External Auditor. If

Our Employees: Training; the Best Place to Work; work environment; personnel selection; honors and
any, state the legal
recognitions.
or geographic

Our Customers: Assured quality; means of contact and communication with our customers.
scope or coverage
The report is available on our web page.
thereof and where
This supplements the Annual Report where the financial performance is published and is a key tool to report the
it is available.
policies, practices and programs fostered by the entity in the country, in addition to the improvements made year
Specify the
after year.
standards or
initiatives adopted
to carry out its
policy on corporate
social responsibility
(Global Reporting
Initiative and/or the
Global United
Nations Compact,
ISO 26.000,
SA8000,
Development
Goals for the
Millennium, SGE
21-Foretica, AA
1000, Ecuadorian
Principles, among
others).
Compliance
Noncompliance
Report or Explain
Total Partial
PRINCIPLE VII. COMPENSATE FAIRLY AND RESPONSIBLY
Recommendation
VII: Establish clear
X
policies on the
compensation of
the members of the
Management Body
and first-class
managers, with
special focus on
establishing
conventional or
statutory limitations
based on the
existence or
inexistence of
profits.
VII.1. The Issuer
Tarjeta Naranja S.A. does not have a Compensation Committee, because it considers the procedures currently
has a
X
followed to be adequate and effective. For the time being, the Company considers that the introduction of such
Compensation
committee may become excessively bureaucratic for the current structure. However, it does not disregard the
Committee:
possibility of implementing it in the future, if deemed advisable.
VII.1.1 made up of
at least three
N/A
members of the
Management
Body, mostly
independent ones.
VII.1.2 chaired by
an independent
N/A
member of the
Management Body
VII.1.3 that has
members who
N/A
prove to have
adequate skills and
experience in
human resources
policies-related
matters.
VII.1.4 that meets
at least twice a
N/A
year.
Compliance
Noncompliance
Total Partial
PRINCIPLE VII. COMPENSATE FAIRLY AND RESPONSIBLY
VII.1.5 whose
decisions are not
N/A
necessarily binding
for the General
Shareholders'
Meeting or for the
Oversight
Committee, but for
consultation
purposes as
regards the
compensation of
the members of the
Management Body.
VII.2 If there is a
Compensation
N/A
Committee:
VII.2.1
N/A
VII.2.2
N/A
VII.2.3
N/A
VII.2.4
N/A
VII.2.5
N/A
VII.2.6
N/A
VII.2.7
N/A
VII.3 If the policies
applied by the
N/A
Issuer’s
Compensation
Committee that
were not
mentioned in the
preceding point are
considered
important to be
mentioned.
Report or Explain
Compliance
Noncompliance
Total Partial
PRINCIPLE VII. COMPENSATE FAIRLY AND RESPONSIBLY
VII.4. If there is no
Compensation
Committee, explain
how the duties
described in VII. 2
are performed
within the
Management Body
itself.
X
Report or Explain
The Directors’ compensation is decided by the General Shareholders’ Meeting, within the limits established by the
effective law and regulations, which is adequate enough so as to attract and retain competent directors. The
managerial staff is compensated based on bands that are equal internally and compete externally based on market
compensation values. The policy on the issue also indicates that the compensation offered are in a level that is
enough so as to attract and retain competent managers.
Compliance
Noncompliance
Total Partial
PRINCIPLE VIII. ENCOURAGE BUSINESS ETHICS
Recommendation
VIII: Ensure ethical
X
behaviors at the
Issuer.
VIII.1. The Issuer
has a Business
X
Code of Conduct.
State the main
guidelines and
whether it is
publicly known.
Such code is
signed by, at least,
the members of the
Management Body
and first-class
managers. Indicate
whether its
application to
suppliers and
customers is
encouraged.
Report or Explain
Tarjeta Naranja seeks a work environment that fosters honesty, proactivity, responsibility, security, data
confidentiality, respect for the law and business loyalty.
To manage to have a pleasant workplace requires basing daily relationships on mutual respect, trust, and kind
and easy to get on with manner, both between workmates and bosses, and suppliers and customers, performing
all activities with the highest ethical, labor and personal principles.
In this respect, Tarjeta Naranja’s Code of Ethics, which governs all the Company’s members, is intended to
provide the main basics for all the Company's members to act in the same way and with the same values in the
face of similar situations. The trust provided by shareholders, customers and the public in general largely depends
on compliance with these principles.
Compliance
Noncompliance
Total Partial
PRINCIPLE VIII. ENCOURAGE BUSINESS ETHICS
VIII.2 The Issuer
has mechanisms to
X
receive any
unlawful or
unethical behavior
reporting, either
personally or
electronically,
ensuring that the
information
furnished is aligned
with the highest
confidentiality and
integrity standards,
as well as the
record and
conservation of the
information. State
whether the service
to receive and
assess reporting is
rendered by the
Issuer’s personnel
or by external and
independent
professionals for
further protection of
those who report
these events.
Report or Explain
Tarjeta Naranja has a process called Democratic Assessment, which is carried out with a tool where all the
Company's employees assess their leaders and where they can provide their opinion on any employee from their
same area or not, as well as write a letter to the Company’s Senior Management and Chairman about any aspect
deemed necessary, event unlawful or unethical behavior reporting. This tool has been used for more than 15
years. Such assessment is made through an electronic system and the information included therein is given
confidential treatment.
Compliance
Noncompliance
Total
Partial
PRINCIPLE VIII. ENCOURAGE BUSINESS ETHICS
VIII.3. The Issuer has
policies, processes and
X
systems to manage
and resolve the
reporting mentioned in
point VIII.2. Make a
description of the most
significant aspects
thereof and indicate the
Audit Committee’s
degree of involvement
in such resolutions,
particularly in that
reporting associated
with internal control
matters for accounting
reporting and as
regards the behaviors
of the members of the
Management Body and
first-class managers.
PRINCIPLE IX: BROADEN THE SCOPE OF THE CODE
Recommendation IX:
Foster the inclusion of
X
provisions related to
good corporate
governance practices in
the Corporate Bylaws.
Report or Explain
Reporting is made to the CEO or Board of Directors' Chairman, depending on to whom the person reports. Reporting is
managed by them, who make the Audit Committee become involved, if appropriate, providing a personalized treatment to
each reporting.
In addition, the Code of Ethics contemplates a procedure to escalate and treat reporting.
Given the essentially ever-changing nature of principles and recommendations inherent to good corporate governance, and its
recent implementation internationally, locally and at corporate level, Tarjeta Naranja S.A. does not deem it very advisable for
the time being to include good corporate governance practices in the Corporate Bylaws, due to its eminent static nature and
difficult to be changed, notwithstanding that some of such provisions are included, such as the allocation of profits at fiscal
year-end. The Company believes for the time being that adopting internal Codes of Ethics allows and will allow developing the
desired behaviors in this regard. However, the gradual inclusion in the future of some of the provisions in the Corporate
Bylaws is not disregarded, as long as it is deemed advisable.
Tarjeta Naranja S.A.
(Free Translation from the Original in Spanish for Publication in Argentina)
Legal Domicile:
Sucre 151 – Córdoba
Principal Line of Business: Credit Card Administrator
19th Fiscal Year
Financial Statements
For the fiscal year commenced January 1, 2013 and ended
December 31, 2013, presented on a comparative basis
Figures stated in thousands of Argentine Pesos
Date of Registration with the Public Registry of Commerce:
Of Bylaws:
December 12, 1995
Registration Number with the Public Registry of
Commerce:
No. 1363 Fo. 5857 Vol. 24/95
Date of Expiration of Company’s Bylaws:
December 12, 2094
CAPITAL STATUS (Note 2.19)
Shares
Number
Voting Rights per
Share
Type
Subscribed
Paid-in
In Thousands of AR$
Ordinary shares with a face value of AR$
2,400 10,000
1
2,400
24,000
24,000
24,000
24,000
Information on the Controlling Company:
Company’s Name:
Tarjetas Regionales S.A.
Legal Domicile:
Belgrano 1415 Piso 1° – Mendoza
Principal Line of Business:
Financial and investment activities. Its principal line of business
is to invest in nonbanking credit card issuers and in companies
that perform services supplementary to the abovementioned
activity (holding company).
Interest in the Shareholders’ Equity:
99%
Percentage of Votes:
99%
1
TARJETA NARANJA S.A.
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012
(Free Translation from the Original in Spanish for Publication in
Argentina)
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Statement of Income
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
12.31.2013
Note
Revenues from Services
6
Expenses from Services
7
Net Income from Services
12.31.2012
In Thousands of AR$
2,434,519
1,785,669
(284,392)
(210,019)
2,150,127
1,575,650
Revenues from Financing
8
2,065,851
1,453,885
Expenses from Financing
9
(848,613)
(430,047)
1,217,238
1,023,838
51,382
35,760
3,418,747
2,635,248
(489,544)
(365,868)
2,929,203
2,269,380
Net Income from Financing
Net Income from Short-term Investments
10
Total Operating Income
Provision for Credit Losses
11
Total Operating Income, Net of Provision for Credit Losses
Personnel Expenses
12
(993,730)
(808,098)
Taxes and Rates
13
(422,676)
(285,077)
Advertising Expenses
Depreciation of Property, Plant and Equipment and Amortization of Intangible
Assets
14
(105,578)
(106,428)
15
(38,946)
(31,174)
Other Operating Expenses
16
(598,197)
(366,252)
(2,159,127)
(1,597,029)
Total Operating Expenses
Net Income from Investments in Associates and Other Companies
Loss from Investments in Associates and Other Companies
17
Income before Income Tax
Income Tax
18
Net Income for the Fiscal Year
770,076
672,351
(15,365)
(8,939)
754,711
663,412
(264,998)
(231,803)
489,713
431,609
204.05
179.84
Earnings per share
Basic and Diluted Earnings per Share
The notes are an integral part of the financial statements.
3
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Statement of Other Comprehensive Income
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
12.31.2013
Note
Net Income for the Fiscal Year
12.31.2012
In Thousands of AR$
489,713
431,609
3,195
1,930
Other Comprehensive Income for the Fiscal Year
3,195
1,930
Total Comprehensive Income for the Fiscal Year
492,908
433,539
205.38
180.64
Other Comprehensive Income:
Reserve for Translation Differences Related to Foreign Operations
19
Earnings per share
Basic and Diluted Earnings per Share
The notes are an integral part of the financial statements.
4
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Statement of Financial Position
As of December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
Note
12.31.2013
12.31.2012
Note
In Thousands of AR$
ASSETS
12.31.2013
12.31.2012
In Thousands of AR$
LIABILITIES
CURRENT ASSETS
CURRENT LIABILITIES
Cash and Cash Equivalents
20
854,948
413,798
Investments
21
100,610
24,010
Receivables from Services
22
9,016,500
6,622,494
Other Receivables
23
230,211
70,617
Total Current Assets
10,202,269
7,130,919
NON-CURRENT ASSETS
Accounts Payable
27
5,199,159
3,555,512
Bank and Financial Loans
28
1,613,661
982,449
Compensation and Social Security Charges
29
200,687
165,853
Tax Charges
30
145,188
110,218
Other Liabilities
31
10,616
11,235
Provision for Income Tax
18
65
30,404
7,169,376
4,855,671
Total Current Liabilities
NON-CURRENT LIABILITIES
Receivables from Services
22
144,587
173,499
Investments
21
-
28,611
Other Receivables
23
111,938
39,566
Deferred Income Tax Assets
Investments in Associates and Other Companies
18
24
177,829
26,271
138,841
20,683
Property, Plant and Equipment
25
159,105
142,080
Intangible Assets
26
83,766
96,058
703,496
639,338
Total Non-Current Assets
Bank and Financial Loans
28
1,771,458
1,340,053
Provisions
32
22,847
15,357
Total Non-Current Liabilities
1,794,305
1,355,410
Total Liabilities
8,963,681
6,211,081
1,942,084
1,559,176
10,905,765
7,770,257
SHAREHOLDERS’ EQUITY
Total Assets
10,905,765
7,770,257
Total Liabilities and Shareholders' Equity
The notes are an integral part of the financial statements.
5
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Statement of Changes in Shareholders’ Equity
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
Attributable to the Company’s Shareholders
Shareholders’ Contributions
Balances as of 01.01.2013
Capital
Stock
(Note 2.19)
Capital Stock
Integral
Adjustment
Reserves
Legal
Reserve
Subtotal
Discretionary
Reserve
Reserve for
Translation
Differences
Related to
Foreign
Operations
(Note 19)
Reserve for
Conduction of
New
Operations
Undistributed
Profits
NonControlling
Interest
Total
Shareholders’
Equity
24,000
26,622
50,622
10,125
58,000
1,006,890
2,155
431,384
-
1,559,176
Net Income for the Fiscal Year
-
-
-
-
-
-
-
489,713
-
489,713
Other Comprehensive Income
-
-
-
-
-
-
3,195
-
-
3,195
-
-
-
-
-
-
-
(110,000)
-
(110,000)
24,000
24,000
26,622
26,622
50,622
50,622
10,125
10,125
58,000
58,000
321,384
1,328,274
-
5,350
225
(321,384)
489,713
1,106,665
298
1,942,084
1,225,935
Net Income for the Fiscal Year
Tarjetas Mira S.A. Merger
Adjustment of Undistributed Profits due
to Establishment of Reserve
-
-
-
-
-
-
-
431,609
-
(298)
431,609
(298)
-
-
-
-
-
225
-
(225)
-
-
Other Comprehensive Income
Distribution of Cash Dividends decided
pursuant to Minutes of Shareholders’
Meeting No. 34 dated 04.11.2012
Establishment of Reserve for
Conduction of New Operations decided
pursuant to Minutes of Shareholders'
Meeting No. 34 dated 04.11.2012
Balances as of 12.31.2012
-
-
-
-
-
-
1,930
-
-
1,930
-
-
-
-
-
-
-
(100,000)
-
(100,000)
24,000
26,622
50,622
10,125
58,000
1,006,665
1,006,890
2,155
(1,006,665)
431,384
-
1,559,176
Distribution of Cash Dividends decided
pursuant to Minutes of Shareholders’
Meeting No. 35 dated 03.22.2013
Establishment of Reserve for
Conduction of New Operations decided
pursuant to Minutes of Shareholders'
Meeting No. 35 dated 03.22.2013
Balances as of 12.31.2013
Balances as of 01.01.2012
The notes are an integral part of the financial statements.
6
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Statement of Cash Flows
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
Note
12.31.2013
12.31.2012
In Thousands of AR$
CASH FLOW AND CASH EQUIVALENTS FROM OPERATING ACTIVITIES
Net Income for the Fiscal Year
489,713
431,609
Plus Income Tax Accrued during the Fiscal Year
Plus Interest and Other Financial Expenses Accrued during the Fiscal Year, Net of
Interest and Other Financial Income Accrued
Adjustments to Calculate Net Cash Flow and Cash Equivalents from Operating
Activities:
264,998
231,803
494,765
289,188
38
987,195
671,888
Changes in Operating Assets
39
(2,932,164)
(2,162,336)
Changes in Operating Liabilities
NET CASH FLOW AND CASH EQUIVALENTS USED IN OPERATING
ACTIVITIES
40
(383,154)
(312,581)
(1,078,647)
(850,429)
Non-cash Equivalent Investments, Net of Collections
(30,082)
(49,256)
Decrease in Cash – Tarjeta Mira S.A. as of 03.31.12
-
(428)
CASH FLOW AND CASH EQUIVALENTS FROM INVESTING ACTIVITIES
Payments for Property, Plant and Equipment Purchases
25
(45,642)
(41,126)
Payments for Intangible Assets Purchases
26
(50,315)
(54,825)
231
194
(17,234)
(17,090)
(143,042)
(162,531)
490,000
423,000
Collection of Dividends – Tarjetas Cuyanas S.A.
Contribution to Associates
NET CASH FLOW AND CASH EQUIVALENTS USED IN INVESTING
ACTIVITIES
CASH FLOW AND CASH EQUIVALENTS FROM FINANCING ACTIVITIES
Bank Loans Obtained
33
Checking Account Overdrafts Obtained
180,000
-
788,541
(110,000)
514,064
(100,000)
Payment of Principal and Interest on Bank and Financial Loans
(591,501)
(287,995)
Payment of Principal and Interest on Notes (“Obligaciones Negociables”)
(707,422)
(379,228)
(33,810)
(28,471)
(1,063)
(21,529)
1,644,489
865,962
1,659,234
985,803
437,545
(27,157)
3,605
2,766
NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS
441,150
(24,391)
Cash and Cash Equivalents at the Beginning of the Fiscal Year
413,798
438,189
854,948
413,798
Notes (“Obligaciones Negociables”) Issued
Payment of Dividends – Fiscal Years 2012/2011
35
Payment of Other Financial Expenses and Tax on Bank Credits and Debits
Payments of Hedge Contracts, Net of Collections
Increase in Accounts Payable
NET CASH FLOW AND CASH EQUIVALENTS GENERATED BY FINANCING
ACTIVITIES
GROSS INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS
Increase Resulting from Foreign Exchange Gain Attributable to Cash and Cash
Equivalents
Cash and Cash Equivalents at Fiscal Year-End
37
The notes are an integral part of the financial statements.
7
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
Notes to the Financial Statements
(In the notes, figures are stated in thousands of Argentine Pesos, except otherwise noted)
Note 1 – General Information
Note 2 – Summary of Significant Accounting Policies
Note 3 – Financial Risk Management
Note 4 – Additional Information to the Financial Statements as of December 31, 2013 and 2012
Note 5 – Segment Reporting
Note 6 – Revenues from Services
Note 7 – Expenses from Services
Note 8 – Revenues from Financing
Note 9 – Expenses from Financing
Note 10 – Net Income from Short-term Investments
Note 11 – Provision for Credit Losses
Note 12 – Personnel Expenses
Note 13 – Taxes and Rates
Note 14 – Advertising Expenses
Note 15 - Depreciation of Property, Plant and Equipment and Amortization of Intangible Assets
Note 16 – Other Operating Expenses
Note 17 – Loss from Investments in Associates and Other Companies
Note 18 – Income Tax
Note 19 – Reserve for Translation Differences Related to Foreign Operations
Note 20 – Cash and Cash Equivalents
Note 21 – Investments
Note 22 – Receivables from Services
Note 23 – Other Receivables
Note 24 – Investments in Associates and Other Companies
Note 25 – Property, Plant and Equipment
Note 26 – Intangible Assets
Note 27 – Accounts Payable
Note 28 – Bank and Financial Loans
Note 29 – Compensation and Social Security Charges
Note 30 – Tax Charges
Note 31 – Other Liabilities
Note 32 – Provisions
Note 33 – Bank and Financial Loans
Note 34 – Financial Leases
Note 35 – Notes (“Obligaciones Negociables”)
Note 36 – Foreign Currency Hedge Contracts
Note 37 – Cash and Cash Equivalents of the Statement of Cash Flows
Note 38 – Adjustments to Calculate Net Cash Flow and Cash Equivalents from Operating Activities
Note 39 – Changes in Operating Assets
Note 40 – Changes in Operating Liabilities
Note 41 – Changes in the Corporate Structure
Note 42 – Balances and Transactions with Companies and Related Parties
Note 43 – Restricted Assets
Note 44 – Tarjeta Naranja S.A.’s Investments Abroad
Note 45 – Information about Expenses and their Allocation under Section 64 Subsection b) of Law 19550
Note 46 – Foreign currency Assets and Liabilities
Note 47 – Portfolio Assignment
8
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 1 – GENERAL INFORMATION
Tarjeta Naranja S.A. (hereinafter, “the Company”) was organized as a corporation in the Province of Córdoba
on September 1, 1995. The Company is a leading credit-card company in Argentina. Its main business is to
create, develop, direct, manage, market, exploit and operate credit and/or debit and/or purchase and/or
similar card systems. The Company may hold an interest in the capital stock of other companies rendering
supplementary services to the financial activity, which are allowed by the Argentine Central Bank (BCRA).
These financial statements were approved for their issuance by the Company’s Board of Directors on
February 17, 2014.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The main accounting policies applied to the preparation of these financial statements are detailed below.
These policies have been consistently applied to all fiscal years presented, except otherwise noted.
2.1 Basis for Preparation
The Company’s financial statements have been prepared in accordance with International Financing
Reporting Standards (IFRS) and IFRIC interpretations (CINIIF as per its initials in Spanish) applicable to
entities reporting under IFRS.
The preparation of financial statements under IFRS requires using certain critical accounting estimates. In
addition, this preparation requires Management to make its judgment in the process of applying the
Company’s accounting policies. The areas involving a higher level of judgment or complexity or the areas in
which the assumptions and estimates are material to the financial statements are stated in Note 4.1.6
Significant Accounting Estimates and Judgments.
2.1.1 Changes in Accounting Policies and Breakdowns
(a) New and Amended Standards Adopted by the Company.
The following standards have been adopted by the Company for the first time in the fiscal year
commenced January 1, 2013 and have a material effect therefor:
Amendment to IFRS 7 “Financial Instruments: Disclosures”: This amendment includes new disclosures
to facilitate the comparison between those entities that prepare their financial statements under IFRS
and those that prepare them in accordance with US GAAP.
IFRS 13 “Fair Value Measurement”: This standard seeks to increase consistency and reduce complexity
by providing an exact definition of fair value and a single source for fair value measurement, as well as
disclosure requirements for its use in IFRS. The requirements, which are aligned with IFRS and US
GAAP, do not extend the use of fair value accounting, but provide guidance on how it should be applied
when its use is required or permitted by other standards within IFRS.
9
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.1 Basis for Preparation (Continued)
2.1.1 Changes in Accounting Policies and Breakdowns (Continued)
(b) New Standards and Interpretations that Have Not Been Implemented Yet
Some new standards, amendments and interpretations are effective for the fiscal years commenced
after January 1, 2013 and have not been applied in preparing these financial statements. None of them
are expected to have a material effect on the Company’s financial statements, except for the following:
Amendment to IAS 32 “Financial Instruments: Presentation” regarding the offsetting of assets and
liabilities: These amendments relate to the guidance in IAS 32 “Financial Instruments: Presentation” and
clarify some of the requirements for offsetting financial assets and liabilities in the statement of financial
position. The date when this amendment starts to be effective is January 1, 2014.
Amendment to IAS 36 “Impairment of Assets” regarding the recoverable value disclosure: This
amendment refers to the disclosure regarding the recoverable value of impaired assets if such amount
is based on the fair value less costs of disposal. The date when this amendment starts to be effective is
January 1, 2014.
IFRS 9 “Financial Instruments”: Amendments regarding the application of hedging accounting were
published in November 2013 to allow entities to better reflect their risk management-related activities in
their financial statements. At this fiscal year-end, the Company is assessing the possible impact on the
financial statements of both this phase of the project of IFRS 9 and that regarding the impairment of
assets. The International Accounting Standards Board (IASB) is expected to complete all phases of
IFRS 9 during 2014, the effective date of which is not earlier than January 1, 2017.
There are no other IFRS or IFRIC interpretations that are not yet effective and that are expected to have
a material effect on the Company.
2.2 Segment Reporting
The entity has disclosed the segment reporting, as established by IFRS 8 “Operating Segments”.
An operating segment is that component of the entity whose financial information is separately available and
is regularly used by the General Management in decision-making regarding how to allocate resources and
assess the business performance.
Reportable segments are one or more operating segments with similar characteristics, distribution systems
and regulatory environments.
Operating segments are presented consistently with the internal information furnished to the maximum
authority in decision-making relating to the Company’s operation, which, in the case of Tarjeta Naranja S.A.,
is the Board of Directors.
10
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.3 Functional and Presentation Currency
The figures included in the financial statements of the different entities that are part of the Company were
measured using their functional currency, i.e., the currency of the primary economic environment where each
Company operates. The financial statements are presented in Argentine Pesos, which is the Company’s
functional and presentation currency. For investments abroad, the currency of each country has been
defined as functional currency since it is the currency of the primary economic environment where those
entities operate.
The results of operations and financial position of the affiliated companies and associates that have a
functional currency different from the Company’s presentation currency are translated into the presentation
currency, as follows:
- The assets and liabilities at fiscal year-end are translated at the exchange rate as of that date.
- Revenues and expenses are translated at the average exchange rate (unless such average does not
represent a fair approximation of the cumulative effect of exchange rates effective as of the date of each
transaction, in which case such revenues and expenses are translated at the exchange rate effective as
of the date of each transaction).
- The resulting foreign exchange gains / (losses) are presented in other comprehensive income.
When an investment is sold or disposed of, either fully or partially, foreign exchange gains / (losses) are
recognized in the statement of income as part of the gain / (loss) on sale/disposal.
2.4 Foreign Currency Assets and Liabilities
Foreign currency assets and liabilities have been stated at the buying or selling exchange rates, as
appropriate, in force at fiscal year-end.
Monetary items denominated in foreign currency are translated again at the exchange rates effective as of
the closing date of the financial statements. Non-monetary items valued at their fair values, which are
denominated in foreign currency, are translated again at the exchange rates effective as of the date when fair
values were estimated. Non-monetary items, which were valued at historical cost in foreign currency, are not
translated again.
Foreign exchange gains / (losses) are recognized in the line “Expenses from Financing” in the statement of
income during the year when they arose.
11
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.5 Financial Instruments
Financial instruments, other than derivatives, are defined as any contract that simultaneously gives rise to a
financial asset of one entity and a financial liability or equity instrument of another entity.
IFRS 9 “Financial Instruments” introduces new classification and measurement requirements for financial
assets and liabilities and their derecognition. Such IFRS requires that all financial assets that are included in
the scope of IAS 39 “Financial Instruments: Recognition and Measurement” are subsequently measured at
amortized cost or fair value. Specifically, debt investments that are held within a business model, whose
objective is to collect contractual cash flows, and that have contractual cash flows that are solely payments
of principal or interest on the principal amount outstanding, are usually measured at amortized cost at later
accounting year-ends. All the other debt or equity investments are measured at fair values at later
accounting year-ends.
Such IFRS permits its early application. The Company has opted for the early application of the first phase of
IFRS 9 as from the fiscal year commenced January 1, 2012.
As set out in IFRS 9, financial assets are classified into the following categories:
(a) Financial Assets at Amortized Cost
A financial asset is classified in this category if it meets the following conditions: The objective of the entity's
business model is to hold the asset in order to collect contractual cash flows and if the contractual terms
entitle collection of cash flows on specified dates that are principal and interest.
In this category, the Company has classified the following financial assets: receivables from services,
investments in time deposits, investments in notes (“obligaciones negociables”), investments in government
securities and other receivables.
(b) Financial Assets at Fair Value
If both conditions referred to in the preceding point are not met, the asset is classified in the category “Fair
Value”.
In this category, the Company has classified the following financial assets: cash and cash equivalents
(except for investments in time deposits), investments in mutual funds, interests in companies on which it has
no control, joint control or significant influence, and balances under hedging transactions.
12
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.6 Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, time deposits in financial institutions and other highly
liquid short-term investments with an original maturity of three months or less, and with a not very significant
risk of changes in their value.
The placements of funds in time deposits were valued at the estimated cash price upon the transaction, plus
interest and financial components accrued based on the effective rate calculated at that time.
Investments in mutual funds were measured at fair value. Changes in fair value are accounted for in the
statement of income.
2.7 Investments
The placements of funds in notes (“obligaciones negociables”) and government securities were valued at the
estimated cash price upon the transaction, plus interest and financial components accrued based on the
effective rate calculated at that time.
Investments in mutual funds that do not qualify as cash equivalents were measured at fair value. Changes in
fair value are accounted for in the statement of income.
2.8 Receivables from Services and Other Receivables
Receivables from services include the amounts payable by customers, both for credit-card consumption and
loans granted.
Receivables from services have been initially recognized at market value and have been subsequently
valued at amortized cost using the effective interest rate method. They are disclosed net of the allowance for
credit losses, if applicable, calculated according to the guidelines set out in Note 2.9 below.
2.9 Impairment of Financial Assets – Allowance for Credit Losses
At each fiscal year-end, the Company analyzes whether there is objective evidence that a financial asset or
group of financial assets is impaired. The loss on impairment of financial assets is recognized when there is
objective evidence of impairment as a result of one or more events occurred after the initial recognition of the
financial asset and such event has impact on estimated cash flows for such financial asset or group of
financial assets.
Under IFRS, for the calculation of the allowance for credit losses, the Company analyzes the historical losses
of its portfolio in order to estimate the losses related to receivables from services incurred as of the date of
the financial statements, but that have not been individually identified, according to the guidelines set out in
IAS 39.
13
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.9 Impairment of Financial Assets – Allowance for Credit Losses (Continued)
In addition, the historical ratios are adjusted, if appropriate, to include recent information that reflects the
economic conditions as of the closing date of the financial statements, trends of behavior in the industry,
geographic or customer concentrations in each portfolio segment and any other information that could affect
the estimation of the allowance for credit losses related to receivables from services. Several factors may
affect Management’s estimation of the allowance for credit losses, including the volatility of the likelihood of
loss, migrations and estimates of the severity of losses.
The book value of the asset is reduced through the account “Allowance for Credit Losses” and the amount of
loss or recovery, as the case may be, is recognized in the statement of income.
2.10 Investments in Associates and Other Companies
Associates are all the companies over which the Company exercises significant influence, but not control
and where it usually holds from 20% to 50% of voting rights. Investments in associates are recorded using
the equity method. Under this method, the investment is initially recognized at cost and the value at closing
increases or decreases to recognize Tarjeta Naranja S.A.’s interest in each company’s income (loss) after
the acquisition date.
Tarjeta Naranja S.A.’s interest in associates’ income / (loss) is recognized as income / (loss) from
investments in associates in the statement of income. Changes in shareholders’ equity that are not net
income / (loss) are charged to shareholders’ equity reserves (and, if appropriate, they are included in other
comprehensive income).
As of December 31, 2013, the Company holds 5% of the ordinary shares of Cobranzas Regionales S.A. The
following factors and circumstances evidence that the Company has significant influence (as defined in IAS
28 “Investments in Associates”) over Cobranzas Regionales S.A. and, therefore, the investment therein is
valued by the equity method in these financial statements:
a) Representation in the management board.
b) Involvement in policy setting processes.
c) Transactions of relative importance between Tarjeta Naranja S.A. and Cobranzas Regionales S.A.
d) Exchange of managerial staff.
14
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.10 Investments in Associates and Other Companies (Continued)
The following is information about the companies over which Tarjeta Naranja S.A. exercises significant
influence as of December 31, 2013 and 2012:
Company
Percentage of
Shares and
Voting Rights
Activity
Cobranzas Regionales S.A.
5%
Integral Advisory Services for Credit Risk
Analysis
Tarjeta Naranja Perú S.A.C.
24%
Commercial and Investing Activities
2.11 Derivatives
Differences originated from the application of the measurement criteria detailed in Note 36, corresponding to
derivatives considered hedge instruments effective to cover cash flow risks, have been recognized in the
statement of income, taking into consideration such items affect net income for the fiscal year.
Derivatives are foreign currency hedge contracts to cover its cash flows exposure arising from Class XIII and
Class XVI, Series I (amortized at prior fiscal year-end) and Series II (amortized at this fiscal year-end), Notes
(“Obligaciones Negociables”). See also Note 4.c – Market Risk – Exchange Rate-associated Risks.
2.12 Income Tax
Income tax is recognized in these financial statements according to the deferred tax method, thus
recognizing the effect of the temporary differences between accounting and tax measurements of assets and
liabilities. The main temporary differences stem from the allowance for credit losses, the provision for
contingencies and, to a lesser extent, the differences with regard to the charge for depreciation of Property,
Plant and Equipment.
For purposes of determining the deferred assets and liabilities, the 35% tax rate that is expected to be in
force at the moment of their reversal has been applied to the temporary differences identified, under the legal
regulations enacted at the date of these financial statements. They are recognized in the statement of
financial position as long as it is deemed likely that the Company will have enough future taxable income
against which deferred income tax assets may be applied.
The breakdown and changes of deferred income tax assets and liabilities are explained in detail in Note 18.
15
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.13 Property, Plant and Equipment
Property, Plant and Equipment are recorded at historical cost, net of depreciation and impairment losses, if
applicable. The historical cost includes the expenses that are directly attributable to the acquisition of assets.
The costs of adapting and improving stores are capitalized as Property, Plant and Equipment only when
investments improve the conditions of the asset, irrespective of those originally established.
The costs subsequently incurred are included in the values of the asset only provided that it is likely for the
asset to generate future economic benefits and their cost is reliably measured. The value of replaced parts is
written off. The other maintenance and repair costs are charged to income during the fiscal year when they
are incurred.
Depreciation charges have been calculated following the straight-line method based on the estimated useful
life of the assets, applying annual rates enough so as to write off their values at the end of their estimated
useful life, according to the following parameters.
Group of Assets
Real Property
Cost of Adapting Stores
Furniture and Fixtures
Hardware
Facilities and Improvements
Years of Estimated Useful Life
50
Term of Lease Agreement
10
5
10
The residual value of assets is reviewed and adjusted, if necessary, as of each fiscal year-end. Changes in
the criteria originally established are recognized, as the case may be, as a change of estimate.
The value of assets is impaired at their recoverable value if the accounting residual value exceeds their
estimated recoverable value, when they are reviewed for impairment when events or circumstances that
indicate that their book value may not be recovered have arisen.
16
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.14 Intangible Assets
Intangible assets are those non-monetary assets, without physical substance, that are identifiable either
because of being separable or because of deriving from legal or contractual rights. They are recorded when
they may be reliably measured and it is likely for them to generate benefits for the Company.
(a) Patents and Software
Patents and software are initially recognized at cost as of the acquisition date. Patents and software that
have a definite useful life are recorded at cost, less the accumulated amortization. Amortization is calculated
by the straight-line method to adjust the cost to their estimated useful lives, which do not exceed five years.
(b) Other Intangible Assets
Other Intangible Assets amount to AR$ 5,027 as of December 31, 2013 and 2012, remaining unchanged in
both years. Such item is related to the acquisition of a business unit, which includes the publication, sale and
distribution of the magazine Convivimos. Such asset is not amortized because it has an indefinite useful life.
The possibility for them to generating future income is periodically examined in order to analyze the possible
impairment thereof.
2.15 Accounts Payable
Accounts payable represent the obligations to pay stores and for goods and services acquired from suppliers
in the normal course of business. They are disclosed in current liabilities if their payment falls due in a term
shorter than or equal to one year.
They are initially recognized at fair value and subsequently measured at amortized cost using the effective
interest rate method.
2.16 Bank and Financial Loans and Other Liabilities
Bank and financial loans are initially recognized at fair value, net of the costs directly attributable to obtaining
them. They are subsequently valued at amortized cost using the effective interest rate method.
2.17 Leases
Leases are classified as financial when all the risks and benefits associated with the ownership of the asset
are substantially transferred. All the other ones are considered to be operating leases.
The assets acquired through a financial lease are recorded as non-current assets and are originally
measured at the lower of the present value of the minimum future payments or fair value. The related
payable to the lessor is reflected in liabilities. The financial cost is accrued based on the effective rate and is
included in “Financial Costs”.
Financial lease agreements are explained in detail in Note 34 to these financial statements.
17
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.18 Provisions
Provisions have been made as set out in IAS 37 to cover possible contingencies of a labor, commercial, civil
or tax nature and for miscellaneous risks that could lead to obligations for the Company. When estimating
their amounts and the possibility of occurrence, the opinion of the Company’s advisors and the insurance
policies purchased by the Company have been taken into consideration.
At the date of these financial statements, the Company's Management believes there are no elements that
make it possible to determine there may be other contingencies that could occur and thus generate a
negative impact on the economic and financial position of the Company.
The breakdown and changes of provisions are disclosed in Note 32.
2.19 Capital Stock
The capital stock is represented by non-endorsable registered ordinary shares, with a face value of AR$
10,000 per share.
CAPITAL STATUS
Shares
Number
Voting Rights per
Share
Type
2,400 Ordinary shares with a face value of AR$ 10,000
2,400
1
Subscribed
Paid-in
In Thousands of AR$
24,000
24,000
24,000
24,000
2.20 Revenue Recognition
(a) Revenues from Services
Account Maintenance Fee
Revenues related to the account statement are recognized in the month of its issuance.
Fees
Fee revenues are recognized upon the customer’s purchase.
Revenues from Third-Party Portfolio Managed
Commissions earned on the third-party portfolio managed are recognized when the service is provided.
18
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.20 Revenue Recognition (Continued)
(a) Revenues from Services (Continued)
Revenues from Convivimos Magazine
Revenues from Convivimos Magazine are recognized upon being accrued (billing to the customer), when all
the necessary costs to obtain the respective revenue are also incurred.
Revenues from Marketing
Revenues from marketing different products are recognized when the service is provided.
Card Renewal Fees
Revenues from card renewals are recognized upon billing to the customer, when all the necessary costs to
obtain the respective revenue are also incurred.
Other Revenues from Services
The other revenues from services are recognized in the fiscal year when the service was provided.
(b) Revenues from Financing
Interest earned is recorded based on the accrual period, by applying the effective rate method.
2.21 Statement of Cash Flows
The Company has chosen to prepare the statement of cash flows by the indirect method and considers cash
on hand, time deposits in financial institutions, highly-liquid short-term investments and with a not very
significant risk of changes in their value, and bank overdrafts with an original maturity of three months or less
to be cash. Overdrafts, if any, are classified as “Bank and Financial Loans” in current liabilities in the
Statement of Financial Position.
19
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 3 – FINANCIAL RISK MANAGEMENT
The Company’s activities expose it to several financial risks: market risk (including the exchange rate risk
and the fair value interest rate risk), credit risk and liquidity risk.
There were no changes in the risk department or in risk management policies from the last fiscal year-end.
Information relating to December 31, 2013 and 2012 is disclosed in Note 4 below.
NOTE 4 – ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS AS OF DECEMBER 31,
2013 AND 2012
4.1 Financial Risk Management
4.1.1 Financial Risk Factors
The nature of the Company's operations and the characteristics of its customer base expose it to several
risks, primarily related to market risks (including the effects of changes in exchange rates and interest rates)
capital, credit and liquidity risks. In order to manage the volatility related to these exposures, Management
carries out an ongoing risk monitoring, measurement and identification process. For each exposure deriving
from the variation in exchange rates, the Company may perform transactions with derivatives in order to
manage potential adverse impacts on the Company's financial performance. Such transactions are carried
out according to internal policies and defined hedging practices.
20
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS AS OF DECEMBER 31,
2013 AND 2012 (Continued)
4.1
Financial Risk Management (Continued)
4.1.1 Financial Risk Factors (Continued)
(a) Credit Risk
The credit risk arises from certain liquid assets, deposits with banks and financial institutions, as well as
customer credit exposures, including other remaining loans and committed transactions.
As regards the credit risk management related to cash, cash equivalents and deposits with banks and
financial institutions, the Company has an investment and credit assessment policy from the financial
institution. According to such policy, the entities in which it may invest are determined based on its credit
rating and the amount allocated to each of them should correspond with the financial institution’s and Tarjeta
Naranja’s shareholders' equity. The maximum percentage to be invested in an entity is also set considering
the total investments.
In addition, in connection with the risk associated with its customers' credit positions, the Company actively
monitors the credit reliability of its customers in order to mitigate the credit risk.
In order to manage and control the credit risk for the customer portfolio, the Company implemented a credit
and credit assessment policy for each customer so as to provide the following guidelines in this regard, with
the main features:







Use tools to analyze and assess the risk that best suits the customer's profile.
Establish guidelines to grant cards and loans based on the customer’s solvency.
Grant credit limits to each customer based on the assessment of each customer’s particular
situation, generally without requiring guarantees and taking into account the customer's monthly
income, among other aspects.
Credit atomization.
Geographic diversity.
Sixty-nine per cent of accounts have a total credit limit lower than AR$ 18.
Monitor customers’ degree of compliance on an ongoing basis.
In this respect, five different credit limits have been defined in Tarjeta Naranja S.A.: (i) the Monthly Balance
Limit, which is set based on the applicant's net income and which is the maximum amount in the aggregate
for a customer’s monthly installments; (ii) the Long-term Purchase Limit, which is the maximum amount for
the customer to purchase in 6 or more installments; (iii) Total Indebtedness Limit, which is equivalent to the
aggregation of the Long-term Purchase Limit and three times the Monthly Balance Limit (“Total Indebtedness
Limit”): which is the maximum amount that may be owed to Tarjeta Naranja S.A. by customers for any and all
amounts owed; and (iv) the Maximum Balance Limit for Cash Advances, which represents 50% of the Longterm Purchase Limit, for a maximum amount of AR$ 2.5 ("Maximum Balance Limit for Cash Advances"),
which is the maximum amount for cash withdrawals; (v) the Limit for Loans to be repaid up to 18 months.
21
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS AS OF DECEMBER 31,
2013 AND 2012 (Continued)
4.1 Financial Risk Management (Continued)
4.1.1 Financial Risk Factors (Continued)
(a) Credit Risk (Continued)
Furthermore, Tarjeta Naranja S.A. has a strong policy to address customers’ payment in arrears, as follows:
A)
At an early arrears stage, i.e., shorter than 90 days, the debtor has a series of products, each of which
is designed for a specific instance of arrears that allows the debtor to redress the situation of
temporary arrears in order to settle payables to the Company.
To qualify for the products, the customer always has to pay the first installment of the plan or deliver at
least 7% of the debt outstanding.
B)
At a late arrears stage, i.e., as from 90 days, the account is closed, all the terms granted are cancelled
and the outstanding amount is automatically assigned to a law firm for collection.
This term is restricted to 60 days for those customers that have a financing product with such a level of
arrears in payment.
The risk of default under a loan may vary in each customer’s particular case, depending — among other
factors — on each customer’s own economic situation. The Company assesses the uncollectibility risk and
sets allowances, which are calculated based on the criterion described under caption 2.9 in Note 2 to these
financial statements, and such allowances are deemed adequate for the recognition of possible losses
arising from credit losses.
Due to the nature of this activity, there is no risk of credit risk concentration in this group of debtors, since
credit cards are given to a large number of customers, being none of them significant, who carry out a very
wide range of activities.
In this sense and taking into account the foregoing, the Company has approved the following credit card
limits for customers as of December 31, 2013 and 2012:
12.31.2013
12.31.2012
In Thousands of AR$
4,772,717
3,799,873
24,571,621
20,237,699
36,176,641
29,130,488
Monthly Balance Limit
Long-term Purchase Limit
Total Indebtedness Limit
22
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS AS OF DECEMBER 31,
2013 AND 2012 (Continued)
4.1 Financial Risk Management (Continued)
4.1.1 Financial Risk Factors (Continued)
(a) Credit Risk (Continued)
Maximum Exposure to Credit Risk:
The following table shows the maximum gross exposure to credit risk, disregarding guarantees or other
credit improvements:
12.31.2013
12.31.2012
In Thousands of AR$
Receivables from Services
9,161,087
6,795,993
For the assets recorded in the financial statements, the exposures established are based on the net book
amounts of the respective allowance for credit losses, as disclosed in the statement of financial position.
Receivables from Services neither Due nor Impaired:
Loans that are neither due nor impaired are those in arrears for less than 30 days. However, a minimum
technical allowance is set therefor. The amount outstanding of such receivables from services is as follows:
12.31.2013
12.31.2012
In Thousands of AR$
Receivables from Services (A)
5,398,109
3,760,387
Receivables from Services Not Due and Impaired:
Loans that are not due and impaired are those in arrears for less than 30 days and that, due to their
segmentation characteristics, have been included in the allowance for credit losses. The amount outstanding
of such receivables from services is as follows:
12.31.2013
12.31.2012
In Thousands of AR$
Receivables from Services (B)
2,728,081
23
2,251,441
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS AS OF DECEMBER 31,
2013 AND 2012 (Continued)
4.1 Financial Risk Management (Continued)
4.1.1 Financial Risk Factors (Continued)
(a) Credit Risk (Continued)
Receivables from Services Due and Impaired:
Loans that are due and impaired are those in arrears for more than 30 days and that, due to their
segmentation characteristics, have been included in the allowance for credit losses. The amount outstanding
of such receivables from services is as follows:
12.31.2013
12.31.2012
In Thousands of AR$
Receivables from Services (C)
1,034,897
12.31.2013
784,165
12.31.2012
In Thousands of AR$
Receivables from Services Addition of (A) + (B) + (C) (Note
22)
9,161,087
6,795,993
In relation to the impairment of receivables from services, due to the nature of the Company’s activities and
customer portfolio, no financial assets that have been determined to be individually impaired are recorded.
24
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS AS OF DECEMBER 31,
2013 AND 2012 (Continued)
4.1 Financial Risk Management (Continued)
4.1.1 Financial Risk Factors (Continued)
(b) Liquidity Risk
The Company has a liquidity policy that is monitored through annual, monthly and daily cash estimates,
analyzing the needs and/or surpluses generated, evaluating the availability of cash and the available
financing alternatives. Projected cash inflows and outflows for the next months are weekly analyzed and
decisions focused on obtaining optimum credit lines are made in order to attain the goals set.
Also, the credit lines borrowed are reinforced by executing commitment agreements that allow having cash
immediately, both in normal financial context and in market liquidity contraction situations.
With respect to Bank and Financial Loans, which includes instruments such as bank and financial loans,
checking account overdrafts, financial leases and notes (“obligaciones negociables”) publicly offered,
regarding the short- and long-term allocation, provided that the market allows it, the Company’s aim is to
keep a balanced allocation of debt due dates, giving priority to long-term debt.
The table below breaks down financial liabilities by contractual due date considering the amounts accrued as
of December 31, 2013:
Less than
3 Months
From 3
to 12
Months
December 31, 2013
In Thousands of AR$
From 1
From 2
to 2
to 5
Years
Years
Over 5
Years
Total
Financial Liabilities
Accounts Payable
Bank and Financial Loans
Total Financial Liabilities
3,636,699
1,562,460
-
-
-
5,199,159
429,574
1,184,087
793,618
872,510
105,330
3,385,119
4,066,273
2,746,547
793,618
872,510
105,330
8,584,278
25
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS AS OF DECEMBER 31,
2013 AND 2012 (Continued)
4.1. Financial Risk Management (Continued)
4.1.1 Financial Risk Factors (Continued)
(b) Liquidity Risk (Continued)
The table below breaks down financial liabilities by contractual due date considering the amounts accrued as
of December 31, 2012:
Less than
3 Months
From 3
to 12
Months
December 31, 2012
In Thousands of AR$
From 1
From 2
to 2
to 5
Years
Years
Over 5
Years
Total
Financial Liabilities
Accounts Payable
3,411,956
143,556
-
-
-
3,555,512
210,906
771,543
310,910
987,552
41,591
2,322,502
3,622,862
915,099
310,910
987,552
41,591
5,878,014
Bank and Financial Loans
Total Financial Liabilities
(c) Market Risk
Exchange Rate-associated Risks
The Company’s operations are potentially exposed to foreign currency exchange rate fluctuations mainly due
to amounts outstanding of notes (“obligaciones negociables”) denominated in U.S. dollars. As the
Company’s policy is based on mitigating the exchange rate risk related to its business and operations, a
series of forward foreign currency hedging transactions were performed with respect to the foreign currencydenominated debt in order to hedge the exchange rate risk to which they would be otherwise exposed.
Derivatives are foreign currency hedge contracts executed by the Company to cover its cash flows exposure
arising from Class XIII, Class XVI Series I (amortized at the prior fiscal year-end) and Class XVI Series II
(amortized at this fiscal year-end) Notes (“Obligaciones Negociables”). Note 36 lists the effective contracts
as of December 31, 2013 and 2012.
Derivative instruments signed were agreed by the Company’s Management for the risk management of
financial variables and as a hedging strategy adopted to minimize the economic risk involved in the
appreciation or depreciation of currencies arising from the volatility of foreign currency exchange rates and
its impact on the related cash flows.
26
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS AS OF DECEMBER 31,
2013 AND 2012 (Continued)
4.1 Financial Risk Management (Continued)
4.1.1 Financial Risk Factors (Continued)
(c) Market Risk (Continued)
Derivative instruments are initially recognized at fair value at the beginning date of the contract and are
subsequently measured at fair value, charged to income / (loss).
As of December 31, 2013, the Company had recorded AR$ 115,602 at present values in current assets
(which was disclosed in the line “Other Receivables”), with a contra account amounting to AR$ 135,943 in
“Income from Financing” to reflect changes in the accounting measurement accrued to date.
The variation in the U.S. dollar exchange rate during fiscal year 2013 was a 33% increase in both the selling
and buying exchange rates. The change related to the bank and financial loan undertaken by the Company
was reflected in income (loss), net of income tax in the amount of AR$ 225,277.
In addition, the Company has cash and investments in foreign currency, the change of which resulted in a
foreign exchange gain during fiscal year 2013, which was reflected in income (loss), net of income tax in the
amount of AR$ 11,692.
The following table shows the sensitivity towards a possible 25% and 35% change p.a. both in the buying
and selling U.S. dollar exchange rates.
Estimated Sensitivity on Debt, Net of Investments in Foreign Currency and
Derivative Contracts
As of December 31, 2013
(In Thousands of AR$)
Variation in the
Exchange Rate
(%)
Peso Devaluation with respect to
the Foreign Currency
Peso Devaluation with respect to
the Foreign Currency
Peso Revaluation with respect to
the Foreign Currency
Peso Revaluation with respect to
the Foreign Currency
Increase / (Decrease) in Income
(Loss), Net of Income Tax
Exchange rate
Derivatives
Effect on Income
(Loss), Net of
Income Tax and
Shareholders’
Equity
25% (*)
(200,591)
180,319
(20,272)
35% (*)
(280,827)
185,014
(95,813)
(25%) (*)
200,591
(180,319)
20,272
(35%) (*)
280,827
(185,014)
95,813
(*) Considering that as of January 31, 2014, the U.S. dollar rate was AR$ 8.02 per U.S. dollar.
27
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS AS OF DECEMBER 31,
2013 AND 2012 (Continued)
4.1 Financial Risk Management (Continued)
4.1.1 Financial Risk Factors (Continued)
(c) Market Risk (Continued)
If the U.S. dollar increased by a 25% p.a., the annual loss, net of income tax for the debt, net of foreign
currency investments would amount to AR$ 200,591 as a result of a higher expense for foreign exchange
losses. Otherwise, if the U.S. dollar decreased by such percentage, the effect on income (loss), net of
income tax would be income for the same amount.
Also, if the U.S. dollar increased by 25% p.a. for the derivative contracts as of December 31, 2013, the
annual income, net of income tax would amount to AR$180,319. Otherwise, if the U.S. dollar decreased by
such percentage, the effect on income (loss), net of income tax would be loss for the same amount.
If the U.S. dollar increased by a 35% p.a., the annual loss, net of income tax for the debt, net of foreign
currency investments would amount to AR$ 280,827 as a result of a higher expense for foreign exchange
losses. Otherwise, if the U.S. dollar decreased by such percentage, the effect on income (loss), net of
income tax would be income for the same amount. Such income (loss) would be absorbed by effective
hedge contracts as of that date.
Also, if the U.S. dollar increased by 35% p.a. for the derivative contracts as of December 31, 2013, the
annual income, net of income tax would amount to AR$ 185,014. Otherwise, if the U.S. dollar decreased by
such percentage, the effect on the income (loss), net of income tax would be loss for the same amount.
As of December 31, 2012, the Company had recorded at present values AR$ 1,631 (disclosed in “Bank and
Financial Loans”) in current liabilities and AR$ 958 (disclosed in “Other Receivables”) in current assets, with
a contra account amounting to AR$ 4,817 in “Expenses from Financing” to reflect changes in the accounting
measurement accrued to date.
The variation in the U.S. dollar exchange rate during fiscal year 2012 was a 14% increase in both the selling
and buying exchange rates. The change related to the bank and financial loan undertaken by the Company
was reflected in the income (loss), net of income tax in the amount of AR$ 92,388.
In addition, the most significant assets in foreign currency were held in cash to meet obligations in U.S.
dollars. The change therein resulted in a foreign exchange gain during fiscal year 2012, which was reflected
in the income (loss), net of income tax in the amount of AR$ 3,514.
Interest Rate-associated Risks
The Company is exposed to interest rate risks due to financings obtained through the issuance of notes
(“obligaciones negociables”) and borrowing of financial leases, checking account overdrafts and loans at
variable rate. In all cases, the applicable rate is private Badlar (the interest rate for time deposits amounting
to over AR$ 1,000,000, with a 30/35-day term in private banks, published by the Argentine Central Bank on
its web page (www.bcra.gov.ar)).
28
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS AS OF DECEMBER 31,
2013 AND 2012 (Continued)
4.1. Financial Risk Management (Continued)
4.1.1 Financial Risk Factors (Continued)
(c) Market Risk (Continued)
As of December 31, 2013 and 2012, the average Badlar was 16.99% and 13.84%, respectively. A charge to
loss, net of income tax was generated in the amount of AR$ 208,929 and AR$ 89,191 for 2013 and 2012,
respectively.
The following table summarizes the percentage of principal of bank and financial loans at the effective
variable and fixed interest rates as of December 31, 2013 and 2012:
As of December 31, 2013
Amount (in Thousands of
Percentage
AR$)
Fixed Interest
Rate
Variable
Interest Rate
As of December 31, 2012
Amount (in Thousands of
Percentage
AR$)
1,543,190
47%
1,286,631
57%
1,762,621
3,305,811
53%
987,488
2,274,119
43%
The Company’s financing strategy is to manage the interest expense using a combination of fixed and
variable interest rates.
The following table shows the sensitivity towards a possible additional variation in interest rates for next year,
considering the debt breakdown as of December 31, 2013:
Additional
Variation in
Interest Rate
Decrease in Interest Rate
Increase in Interest Rate
4%
4%
Increase /
(Decrease) in
Income (Loss), Net
of Income Tax
In Thousands of
AR$
33,703
(33,703)
Increase /
(Decrease) in
Shareholders’
Equity
In Thousands of
AR$
33,703
(33,703)
If the applicable rate to the obligations assumed at variable rate increased by 400 basis points, the annual
additional loss, net of income tax, would be AR$ 33,703 as a result of a higher interest expense. Otherwise,
if the rate decreased by such percentage, additional income would be for the same amount.
29
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS AS OF DECEMBER 31,
2013 AND 2012 (Continued)
4.1. Financial Risk Management (Continued)
4.1.1 Financial Risk Factors (Continued)
(c) Market Risk (Continued)
The following table shows the sensitivity for fiscal year 2013 estimated as of December 31, 2012 towards a
possible additional variation in interest rates, considering the debt breakdown as of that date:
Increase /
(Decrease) in
Income (Loss), Net
of Income Tax
In Thousands of
AR$
Additional
Variation in
Interest Rate
Decrease in Interest Rate
Increase in Interest Rate
4%
4%
Increase /
(Decrease) in
Shareholders’
Equity
In Thousands of
AR$
19,457
(19,457)
19,457
(19,457)
If the applicable rate to the obligations assumed at variable rate had increased by 400 basis points, the
annual additional loss, net of income tax, would have been AR$ 19,457 as a result of a higher interest
expense. Otherwise, if the rate had decreased by such percentage, additional income would have been for
the same amount.
4.1.2 Capital Management
The Company seeks to keep an adequate indebtedness level as it should meet certain commitments
assumed by virtue of loans obtained and notes (“obligaciones negociables”) issued and to continue as a
going concern. The indebtedness ratio as of December 31, 2013 and 2012 is as follows:
December 31, 2013
December 31, 2012
Total Debt
Minus: Cash and Cash Equivalents
Net Debt
In Thousands of AR$
8,963,681
(854,948)
8,108,733
6,211,081
(413,798)
5,797,283
Total Shareholders’ Equity
1,942,084
1,559,176
10,050,817
7,356,459
4.18
3.72
Total Capital
Indebtedness Ratio
30
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS AS OF DECEMBER 31,
2013 AND 2012 (Continued)
4.1. Financial Risk Management (Continued)
4.1.2.
Capital Management (Continued)
As of December 31, 2013 and 2012, capital status was as follows:
Approved by
Capital Stock
Face Value
Body
Date
Date of
Registration with
the Public
Registry of
Commerce
In Thousands of
AR$
Subscribed, Issued and Paid in
Capital Increase due to Merger with Tarjetas
del Sur S.A.
Capital Increase due to Merger with Tarjeta
Comfiar S.A.
Total
Extraordinary
Shareholders'
12,000 Meeting
Extraordinary
Shareholders'
6,600 Meeting
Extraordinary
Shareholders'
5,400 Meeting
24,000
09.04.95
12.12.95
02.16.01
05.03.01
10.02.03
03.24.04
Furthermore, the following is presented in compliance with Resolution No. 368 of the National Securities
Commission (C.N.V.):
2011
Capital Stock at the Beginning of the Fiscal Year
Total
24,000
24,000
2012
24,000
24,000
2013
24,000
24,000
4.1.3 Fair Value Estimation
The table below includes the analysis of financial instruments that are measured at fair value, classified by
hierarchy, according to the measurement method used. The different levels have been defined as follows:
a)
Level 1: (Unadjusted) quoted prices in active markets for identical assets and liabilities.
b)
Level 2: Inputs other than quoted market prices included within Level 1 that are observable for
the asset or liability, either directly (i.e., prices) or indirectly (i.e., price derivatives).
c)
Level 3: Inputs are unobservable inputs for the asset or liability (i.e., unobservable inputs).
31
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS AS OF DECEMBER 31,
2013 AND 2012 (Continued)
4.1. Financial Risk Management (Continued)
4.1.3.
Fair Value Estimation (Continued)
The following table discloses the Company’s assets and liabilities, which are measured at fair value as of
December 31, 2013 and 2012:
As of December 31, 2013
In Thousands of AR$
Level 1
Level 2
Total
Amount
Level 3
Assets
Cash and Cash Equivalents
Investments in Mutual Funds
Investments in Associates and Other
Companies
Balances under Hedging Transactions
Total Assets
As of December 31, 2012
In Thousands of AR$
374,581
62,436
-
-
374,581
62,436
115,602
552,619
-
4,051
4,051
4,051
115,602
556,670
Level 1
-
Level 2
Total
Amount
Level 3
Assets
Cash and Cash Equivalents
Investments in Mutual Funds
Investments in Associates and Other
Companies
Balances under Hedging Transactions
266,502
2,547
-
-
266,502
2,547
958
270,007
-
2,941
2,941
2,941
958
272,948
Balances under Hedging Transactions
1,631
-
-
1,631
Total Liabilities
1,631
-
-
1,631
Total Assets
Liabilities
The fair value of financial instruments traded in active markets is based on quoted prices as of the reporting
date. A market is considered to be active if quoted prices are readily and regularly available from an
exchange, dealer, broker, industry group, pricing service or regulatory agency, and those prices represent
actual and regularly occurring market transactions on an arm’s length basis. The market quoted price used
for financial assets held by the entity is the current offer price. These instruments are included in Level 1.
The fair value of financial instruments that are not traded in an active market is measured using valuation
techniques. These valuation techniques maximize the use of market information, when available, and
depend the least possible on the entity’s specific estimates.
32
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS AS OF DECEMBER 31,
2013 AND 2012 (Continued)
4.1. Financial Risk Management (Continued)
4.1.3 Fair Value Estimation (Continued)
If all material inputs required to measure an instrument are observable, the instrument is included in Level 2.
If one or more material inputs are not based on observable market inputs, instruments are included in Level
3.
Additionally, the comparison between the fair value and the book value of the Company’s financial assets
and liabilities as of December 31, 2013 and 2012 is disclosed below:
December 31, 2013
In Thousands of AR$
Book Value
Fair Value
Financial Assets
Cash and Cash Equivalents
Receivables from Services
Investments
Other Receivables
Balances under Hedging Transactions
Investments in Associates and Other
Companies
854,948
9,161,087
100,610
226,547
115,602
854,948
8,947,570
100,610
226,547
115,602
4,051
4,051
10,462,845
10,249,328
Financial Liabilities
Accounts Payable
Bank and Financial Loans
5,199,159
3,385,119
5,142,926
3,385,119
Total Financial Liabilities
8,584,278
8,528,045
Total Financial Assets
33
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS AS OF DECEMBER 31,
2013 AND 2012 (Continued)
4.1. Financial Risk Management (Continued)
4.1.3.
Fair Value Estimation (Continued)
December 31, 2012
In Thousands of AR$
Book Value
Fair Value
Financial Assets
Cash and Cash Equivalents
Receivables from Services
Investments
Other Receivables
Balances under Hedging Transactions
Investments in Associates, Joint
Ventures and Other Companies
413,798
6,795,993
52,621
109,225
958
2,941
2,941
Total Financial Assets
7,375,536
7,274,829
Financial Liabilities
Accounts Payable
Balances under Hedging Transactions
Bank and Financial Loans
3,555,512
1,631
2,320,871
3,521,813
1,631
2,320,871
Total Financial Liabilities
5,878,014
5,844,315
34
413,798
6,695,286
52,621
109,225
958
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS AS OF DECEMBER 31,
2013 AND 2012 (Continued)
4.1. Financial Risk Management (Continued)
4.1.4.
Financial Instruments by Category
The following are the amounts of financial assets and liabilities classified by category, as set out in IFRS 9 as
of December 31, 2013 and 2012:
Assets / Liabilities Measured at Fair Value
December 31, 2013
In Thousands of AR$
Assets /
Liabilities at
Fair Value
Held for
Intermediation
Assets /
Liabilities at
Amortized
Cost
Derivatives
Total
Amount
Financial Assets
480,367
9,161,087
38,174
854,948
9,161,087
100,610
-
-
4,051
-
115,602
-
226,547
115,602
226,547
140,094
115,602
9,906,175
10,462,845
-
-
-
5,199,159
3,385,119
5,199,159
3,385,119
-
-
-
8,584,278
8,584,278
Cash and Cash Equivalents
Receivables from Services
Investments
Investments in Associates, Joint
Ventures and Other Companies
Balances under Hedging
Transactions
Other Receivables
234,487
62,436
140,094
-
4,051
-
-
Total Financial Assets
300,974
Accounts Payable
Bank and Financial Loans
Total Financial Liabilities
-
Financial Liabilities
35
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS AS OF DECEMBER 31,
2013 AND 2012 (Continued)
4.1. Financial Risk Management (Continued)
4.1.4.
Financial Instruments by Category (Continued)
Assets / Liabilities Measured at Fair Value
December 31, 2012
In Thousands of AR$
Assets /
Liabilities at
Fair Value
Held for
Intermediation
Assets /
Liabilities at
Amortized
Cost
Derivatives
Total
Amount
Financial Assets
Cash and Cash Equivalents
Receivables from Services
Investments
Investments in Associates, Joint
Ventures and Other Companies
Balances under Hedging
Transactions
Other Receivables
124,628
2,547
141,874
-
-
147,296
6,795,993
50,074
413,798
6,795,993
52,621
2,941
-
-
-
2,941
-
-
958
-
109,225
958
109,225
Total Financial Assets
130,116
141,874
958
7,102,588
7,375,536
Accounts Payable
Balances under Hedging
Transactions
Bank and Financial Loans
-
-
-
3,555,512
3,555,512
-
-
1,631
-
2,320,871
1,631
2,320,871
Total Financial Liabilities
-
-
1,631
5,876,383
5,878,014
Financial Liabilities
4.1.5 Accounting Estimates and Judgments
Estimates and judgments are continuously assessed and are based on past experience and other factors,
including expectations of future events that are deemed reasonable under the circumstances.
4.1.6 Significant Accounting Estimates and Judgments
The Company makes estimates and assumptions on the future. The resulting accounting estimates, by
definition, will be rarely equal to the related actual figures. The estimates and judgments that have a
significant risk of giving rise to a material adjustment to the book amounts of assets and liabilities in the
following fiscal year are explained below.
36
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS AS OF DECEMBER 31,
2013 AND 2012 (Continued)
4.1. Financial Risk Management (Continued)
4.1.6. Significant Accounting Estimates and Judgments (Continued)
(a) Estimated Loss for Impairment of Financial Assets Recorded at Amortized Cost
The Company follows the guidance in IAS 39 to calculate the allowance for credit losses related to its
portfolio of receivables from services and other receivables. For this estimation, the Company evaluates the
customers’ historical patterns of behavior, among other factors, as well as the existing macroeconomic
conditions at fiscal year-end, as explained in detail in Note 2.9.
(b) Income Tax
The Company is subject to income tax. As explained in detail in Note 2.12, income tax is recognized in
these financial statements by applying the deferred income tax method, thus recognizing the assets and
liabilities related to the temporary differences identified in calculating taxable income. Such differences will
have an effect on income tax and the provisions for deferred income taxes in the year when they are made.
(c) Provisions
The Company is subject to several claims, lawsuits and other legal proceedings, including customers’
claims. The potential loss for the Company in relation to these claims is estimated considering the
information provided by the legal advisors, as explained in detail in Note 32.
4.1.7 Material Judgments upon Applying the Company’s Accounting Policies
No material judgments have been made upon applying the accounting policies.
37
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 5 – SEGMENT REPORTING
Segment Reporting as of 12.31.2013
Córdoba
Northwest
of
Argentina
Central
Region
Patagonia
Northeast
of
Argentina
Greater
Buenos
Aires
South
Inside the
Province
of
Buenos
Aires
Greater
Buenos
Aires
West
Gold
CABA
Nonallocable
Total
In Thousands of AR$
Revenues from Services
Expenses from Services
Net Income from Services
Revenues from Financing
Expenses from Financing
Net Income from Financing
Net Income from Short-term
Investments
Provision for Credit Losses
Depreciation of Property, Plant and
Equipment
Amortization of Intangible Assets
Other Operating Expenses
Loss from Investments in Associates
and Other Companies
Income Tax
Net Income / (Loss) for the Fiscal
Year
484,173
(56,560)
427,613
257,358
(105,718)
151,640
256,778
(29,996)
226,782
224,955
(92,407)
132,548
475,617
(55,560)
420,057
449,878
(184,802)
265,076
253,818
(29,650)
224,168
266,978
(109,670)
157,308
418,229
(48,856)
369,373
393,583
(161,676)
231,907
123,248
(14,397)
108,851
105,049
(43,152)
61,897
126,243
(14,747)
111,496
102,424
(42,074)
60,350
88,102
(10,292)
77,810
73,495
(30,190)
43,305
172,975
(20,206)
152,769
167,057
(68,624)
98,433
35,336
(4,128)
31,208
25,074
(10,300)
14,774
-
2,434,519
(284,392)
2,150,127
2,065,851
(848,613)
1,217,238
6,401
(45,875)
5,595
(37,084)
11,189
(75,225)
6,640
(37,587)
9,789
(85,948)
2,613
(59,266)
2,548
(67,047)
1,828
(23,080)
4,155
(42,305)
624
(16,127)
-
51,382
(489,544)
(1,350)
(204,017)
(1,193)
(170,204)
(2,519)
(310,213)
(1,053)
(163,593)
(2,828)
(287,803)
(1,763)
(163,021)
(1,697)
(168,228)
(1,867)
(99,370)
(1,553)
(141,547)
(1,403)
(86,475)
(7,301)
(14,419)
(325,710)
(24,527)
(14,419)
(2,120,181)
-
-
-
-
-
-
-
-
-
-
(15,365)
(264,998)
(15,365)
(264,998)
334,412
156,444
308,365
185,883
234,490
(50,689)
(62,578)
(1,374)
69,952
(57,399)
(627,793)
489,713
38
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 5 – SEGMENT REPORTING (Continued)
Segment Reporting as of 12.31.2012
Córdoba
Northwest
of
Argentina
Central
Region
Patagonia
Northeast
of
Argentina
Greater
Buenos
Aires
South
Inside the
Province
of
Buenos
Aires
Greater
Buenos
Aires
West
Gold
Nonallocable
CABA
Total
In Thousands of AR$
Revenues from Services
Expenses from Services
Net Income from Services
Revenues from Financing
Expenses from Financing
Net Income from Financing
Net Income from Short-term
Investments
Provision for Credit Losses
Depreciation of Property, Plant and
Equipment
Amortization of Intangible Assets
Other Operating Expenses
Loss from Investments in Associates
and Other Companies
Income Tax
Net Income / (Loss) for the Fiscal
Year
357,352
(42,029)
315,323
178,943
(52,930)
126,013
195,088
(22,945)
172,143
162,843
(48,167)
114,676
360,157
(42,359)
317,798
319,184
(94,412)
224,772
191,301
(22,500)
168,801
190,870
(56,458)
134,412
310,089
(36,471)
273,618
276,116
(81,673)
194,443
83,595
(9,832)
73,763
71,285
(21,085)
50,200
79,442
(9,343)
70,099
64,822
(19,174)
45,648
60,098
(7,068)
53,030
49,125
(14,531)
34,594
131,733
(15,494)
116,239
129,235
(38,227)
91,008
16,814
(1,978)
14,836
11,462
(3,390)
8,072
-
1,785,669
(210,019)
1,575,650
1,453,885
(430,047)
1,023,838
4,402
(33,674)
4,005
(27,505)
7,851
(60,658)
4,695
(30,656)
6,791
(67,269)
1,753
(42,154)
1,594
(44,237)
1,208
(17,272)
3,179
(34,544)
282
(7,899)
-
35,760
(365,868)
(2,693)
(137,120)
(566)
(108,547)
(1,422)
(199,278)
(1,016)
(99,448)
(1,470)
(188,153)
(1,073)
(149,305)
(1,241)
(145,824)
(975)
(78,968)
(810)
(103,829)
(1,018)
(75,056)
(8,659)
(10,231)
(280,327)
(20,943)
(10,231)
(1,565,855)
-
-
-
-
-
-
-
-
-
-
(8,939)
(231,803)
(8,939)
(231,803)
272,251
154,206
289,063
176,788
217,960
(66,816)
(73,961)
(8,383)
71,243
(60,783)
(539,959)
431,609
39
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 5 – SEGMENT REPORTING (Continued)
Segment Reporting as of 12.31.2013
Córdoba
Northwest
of
Argentina
Central
Region
Patagonia
Northeast
of
Argentina
Greater
Buenos
Aires
South
Greater
Buenos
Aires
West
Inside
the
Province
of
Buenos
Aires
Gold
Nonallocable
CABA
Total
In Thousands of AR$
ASSETS
Cash and Cash Equivalents
Receivables from Services
130,299
102,949
195,865
99,961
150,711
39,416
36,722
27,002
61,844
10,179
-
854,948
1,396,198
1,103,138
2,098,772
1,071,119
1,614,927
422,353
393,486
289,342
662,680
109,072
-
9,161,087
-
-
-
-
-
-
-
-
-
-
730,625
730,625
18,174
7,099
16,594
6,328
16,942
8,034
7,811
5,476
6,319
11,782
54,546
159,105
1,544,671
1,213,186
2,311,231
1,177,408
1,782,580
469,803
438,019
321,820
730,843
131,033
785,171
10,905,765
Accounts Payable
827,360
585,621
1,102,452
691,236
906,494
238,844
245,618
174,553
353,998
72,983
-
5,199,159
Bank and Financial Loans
Compensation and Social Security
Charges
515,911
407,621
775,518
395,790
596,733
156,064
145,397
106,915
244,867
40,303
-
3,385,119
15,466
13,630
26,021
10,309
24,981
14,076
14,869
8,971
11,499
8,426
52,439
200,687
-
-
-
-
-
-
-
-
-
-
178,716
178,716
1,358,737
1,006,872
1,903,991
1,097,335
1,528,208
408,984
405,884
290,439
610,364
121,712
231,155
8,963,681
Other Assets
Property, Plant and Equipment
Total Assets
LIABILITIES
Other Liabilities
Total Liabilities
40
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 5 – SEGMENT REPORTING (Continued)
Segment Reporting as of 12.31.2012
Northwest
of
Argentina
Central
Region
Córdoba
Patagonia
Northeast
of
Argentina
Greater
Buenos
Aires
South
Greater
Buenos
Aires
West
Inside
the
Province
of
Buenos
Aires
Gold
CABA
Nonallocable
Total
In Thousands of AR$
ASSETS
Cash and Cash Equivalents
Receivables from Services
65,229
49,417
94,001
49,108
73,142
18,485
16,397
13,292
30,945
3,782
-
413,798
1,071,277
811,605
1,543,821
806,524
1,201,239
303,583
269,297
218,298
508,231
62,118
-
6,795,993
-
-
-
-
-
-
-
-
-
-
418,386
418,386
18,272
3,840
9,648
6,895
9,972
7,281
8,420
6,617
5,497
6,896
58,742
142,080
1,154,778
864,862
1,647,470
862,527
1,284,353
329,349
294,114
238,207
544,673
72,796
477,128
7,770,257
Accounts Payable
599,491
409,923
763,226
479,971
611,723
151,114
146,045
104,223
247,536
42,260
-
3,555,512
Bank and Financial Loans
Compensation and Social Security
Charges
366,106
277,362
527,594
275,626
410,518
103,748
92,031
74,602
173,686
21,229
-
2,322,502
11,323
10,259
20,328
8,701
20,062
14,553
14,439
8,511
9,499
7,675
40,503
165,853
-
-
-
-
-
-
-
-
-
-
167,214
167,214
976,920
697,544
1,311,148
764,298
1,042,303
269,415
252,515
187,336
430,721
71,164
207,717
6,211,081
Other Assets
Property, Plant and Equipment
Total Assets
LIABILITIES
Other Liabilities
Total Liabilities
41
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 6 – REVENUES FROM SERVICES
12.31.2013
12.31.2012
In Thousands of AR$
Account Maintenance Fee
Fees
Revenues from Third-Party Portfolio Managed
Other Fees
Card Renewal Fees
Granting Fees
TN Personal Loans Granting Fees
Revenues from Convivimos Magazine
Other Revenues from Services
Total
722,661
715,661
408,444
301,637
105,519
6,171
2,415
86,765
85,246
2,434,519
536,637
517,118
319,871
203,987
83,076
11,829
9,047
47,802
56,302
1,785,669
NOTE 7 – EXPENSES FROM SERVICES
12.31.2013
12.31.2012
In Thousands of AR$
Printing and Distribution of Statements and Payments to
Merchants (“Comercios Amigos”)
Expenses from Call Center Services
Opening of Accounts
Text Messaging Services
Special Promotions
Convivimos Magazine-Related Costs
Other Expenses from Services
Total
(111,457)
(69,409)
(16,768)
(17,827)
(10,993)
(46,298)
(11,640)
(284,392)
(83,946)
(52,935)
(15,908)
(14,486)
(8,723)
(22,317)
(11,704)
(210,019)
NOTE 8 – REVENUES FROM FINANCING
12.31.2013
12.31.2012
In Thousands of AR$
Merchants (“Comercios Amigos”) Interest
Interest on Financing through Credit Cards
Interest on Personal Loans
Compensatory Interest
Penalty Interest
Revenues from Lawsuits
Income due to Change in Net Fair Value Adjustments on
Derivative and Hedging Activities
Total
42
597,379
940,014
53,048
215,994
106,384
17,089
417,287
629,583
162,999
155,081
76,158
12,777
135,943
2,065,851
1,453,885
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 9 – EXPENSES FROM FINANCING
12.31.2013
12.31.2012
In Thousands of AR$
Interest on Notes ("Obligaciones Negociables")
Bank Interest
Foreign Exchange Loss
Loss due to Change in Net Fair Value Adjustments on
Derivative and Hedging Activities
Tax on Bank Debits and Credits
Other Expenses from Financing
Total
(289,558)
(215,346)
(328,593)
(161,301)
(116,509)
(136,729)
(11,489)
(3,627)
(848,613)
(4,817)
(7,819)
(2,872)
(430,047)
NOTE 10 – NET INCOME FROM SHORT-TERM INVESTMENTS
12.31.2013
12.31.2012
In Thousands of AR$
Interest on Time Deposits
Interest on Government Securities
Income from Notes (“Obligaciones Negociables”)
Income from Mutual Funds
Total
28,721
851
2,102
19,708
51,382
27,943
513
430
6,874
35,760
NOTE 11 – PROVISION FOR CREDIT LOSSES
12.31.2013
12.31.2012
In Thousands of AR$
Provision for Credit Losses
Recovery of the Allowance for Credit Losses
Total
(542,111)
52,567
(489,544)
(413,070)
47,202
(365,868)
NOTE 12 – PERSONNEL EXPENSES
12.31.2013
12.31.2012
In Thousands of AR$
Compensation and Social Security Charges
Bonuses for the Staff
Entertainment and Travel Expenses and Per Diem
Other Personnel Expenses
Total
(833,439)
(98,929)
(26,722)
(34,640)
(993,730)
43
(661,798)
(77,493)
(29,378)
(39,429)
(808,098)
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 13 – TAXES AND RATES
12.31.2013
12.31.2012
In Thousands of AR$
(240,096)
(155,016)
(99,575)
(72,323)
(73,800)
(50,740)
(9,205)
(6,998)
(422,676)
(285,077)
Turnover Tax
Tax on Bank Debits and Credits
Trade and Industry Tax
Other Taxes, Rates and Contributions
Total
NOTE 14 – ADVERTISING EXPENSES
12.31.2013
12.31.2012
In Thousands of AR$
(61,526)
(63,935)
(10,809)
(8,973)
(23,348)
(20,277)
(9,895)
(13,243)
(105,578)
(106,428)
National Advertising
Commercial Promotions
Regional Advertising
Other Advertising
Total
NOTE 15 – DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT AND AMORTIZATION OF
INTANGIBLE ASSETS
12.31.2013
12.31.2012
In Thousands of AR$
(24,527)
(20,943)
(14,419)
(10,231)
(38,946)
(31,174)
Depreciation of Property, Plant and Equipment
Amortization of Intangible Assets
Total
44
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 16 – OTHER OPERATING EXPENSES
12.31.2013
12.31.2012
In Thousands of AR$
Rentals
Regular Mail Services
Donations
Electricity, Natural Gas and Communications
Bank and Financial Expenses
Collection Expenses
Expenses for Commercial Reports and Procedures for the
Collection of Amounts in Arrears
Directors and Supervisory Committee Members' Fees
Third Parties’ Fees
Insurance and Security Services
Stationery and Office Supplies
Maintenance of Equipment and Real Property
Cleaning Expenses
Other Income and Expenses
Total
(51,044)
(25,358)
(1,276)
(33,334)
(15,972)
(72,858)
(36,747)
(18,144)
(898)
(26,987)
(8,712)
(51,199)
(39,991)
(11,183)
(118,126)
(63,985)
(16,803)
(39,155)
(12,809)
(96,303)
(598,197)
(30,471)
(8,800)
(49,982)
(40,657)
(12,456)
(22,366)
(9,532)
(49,301)
(366,252)
NOTE 17 – LOSS FROM INVESTMENTS IN ASSOCIATES AND OTHER COMPANIES
12.31.2013
12.31.2012
In Thousands of AR$
Loss from Investment in TN Perú S.A.C.
Income from Investment in Tarjetas Cuyanas S.A.
Income from Investment in Cobranzas Regionales S.A.
Total
45
(17,015)
1,341
309
(15,365)
(9,845)
676
230
(8,939)
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 18 – INCOME TAX
The following table shows the changes of deferred income tax assets and liabilities:
Net Deferred
Income Tax
Assets
Income Tax
Payable
Income Tax
Accrued during the
Fiscal Year
In Thousands of AR$
Balances at the Beginning of Fiscal Year 2012
Increase in Taxable Income during Fiscal Year 2011
89,520
(238,669)
(252,083)
1,122
(1,257)
(135)
-
239,926
-
(279,867)
(231,668)
138,841
(279,867)
(231,803)
(1,029)
1,136
107
-
278,731
-
(305,122)
(265,105)
(305,122)
(264,998)
(2)
Payment of Income Tax - 2011 (3)
Income Tax Accrued during the Fiscal Year
48,199
Balances as of December 31, 2012
Decrease in Taxable Income during Fiscal Year
2012 (5)
Payment of Income Tax – 2012 (6)
Income Tax Accrued during the Fiscal Year
40,017
Balances as of December 31, 2013
177,829
(1)
(4)
(7)
(1) It corresponds to the income tax amount that, pursuant to the estimations made by the Company’s Management as of February 13,
2012, should have been paid in May 2012 according to the taxable income accrued during the fiscal year ended December 31,
2011.
(2) It corresponds to a correction of the provision for income tax estimated at the end of fiscal year 2011.
(3) It corresponds to income tax for fiscal year 2011 paid by the Company.
(4) It corresponds to the income tax amount that, pursuant to the estimations made by the Company’s Management as of February 13,
2013, should have been paid in May 2013 according to the taxable income accrued during the fiscal year ended December 31,
2012.
(5) It corresponds to a correction of the provision for income tax estimated at the end of fiscal year 2012.
(6) It corresponds to income tax for fiscal year 2012 paid by the Company.
(7) It corresponds to the income tax amount that, pursuant to the estimations made by the Company’s Management at the date of these
financial statements, shall be paid in May 2014 according to the taxable income accrued during the fiscal year ended December 31,
2013.
As of December 31, 2013 and December 31, 2012, the net assets derived from the information included in
the previous table amount to AR$ 177,829 and AR$ 138,841, respectively. Their composition as of those
dates is detailed below:
Balances as of
December 31, 2012
Receivables from Services
Investments
Property, Plant and Equipment
Accounts Payable
Compensation and Social Security Charges
Bank and Financial Loans
Provision for Contingencies
Others
Totals
134,858
(102)
(327)
44
53
(668)
4,390
593
138,841
46
Increase / (Decrease)
during the Fiscal
Year
In Thousands of AR$
38,611
276
301
193
186
1,312
(1,891)
38,988
Balances as of
December 31, 2013
173,469
174
(26)
44
246
(482)
5,702
(1,298)
177,829
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 18 – INCOME TAX (CONTINUED)
The income tax amount estimated by Management, net of prepayments, as of December 31, 2013 and
December 31, 2012 is as follows:
12.31.2013
Provision for Income Tax
Prepayment
12.31.2012
(305,122)
305,057
(279,867)
249,463
(65)
(30,404)
Income Tax Payable
The following table shows the reconciliation of income tax charged to loss as of December 31, 2013 and
2012 to that which would result from applying the tax rate in force to book income:
12.31.2013
12.31.2012
In Thousands of AR$
Income for the Fiscal Year before Income Tax
Tax Rate in Force
Loss for the Fiscal Year at the Tax Rate
Permanent Differences at the Tax Rate:
- Loss from Interest in Other Companies
- Non-taxable Income (1)
- Donations and Other Non-deductible Expenses
- Others
- Allowance for Long-term Investments in Companies
Difference between the Tax Return and the Provision for Income Tax –
Fiscal Years 2012 / 2011
Total Income Tax Charge for the Fiscal Year
754,711
35%
(264,149)
663,412
35%
(232,194)
(5,378)
6,285
(177)
(1,686)
-
(3,526)
6,130
(126)
(2,349)
397
107
(264,998)
(135)
(231,803)
(1) It mainly corresponds to the income / (loss) from transactions carried out in Tierra del Fuego, net of indirect charges.
47
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 18 – INCOME TAX (CONTINUED)
The following table shows the reconciliation of income tax charged to income to tax assessed for the period
for tax purposes:
12.31.2013
12.31.2012
In Thousands of AR$
Total Income Tax Charge Recorded for the Fiscal Year
- Temporary Differences at the Tax Rate
- Adds:
Accrual of Interest on Investments
Allowance for Credit Losses
Reversal of the Provision for Contingencies
Bonuses Payable
Depreciation of Property, Plant and Equipment
Valuation of Bank and Financial Loans
Others
Tax Loss Carry-forwards
Allowance for Impairment of Value
Difference between the Tax Return and the Provision for Income Tax – Fiscal
Years 2012 / 2011
Total Tax for the Fiscal Year Determined for Tax Purposes
Income Tax Prepayments
Income Tax Payable
(264,998)
(231,803)
(276)
(38,611)
(1,312)
(193)
(301)
(186)
1,891
-
388
(55,345)
5,538
17
249
332
(142)
84
(442)
(1,136)
(305,122)
1,257
(279,867)
305,057
249,463
(65)
(30,404)
NOTE 19 – RESERVE FOR TRANSLATION DIFFERENCES RELATED TO FOREIGN OPERATIONS
The change in the reserve for translation differences disclosed in the Statement of Other Comprehensive
Income was as follows:
12.31.2013
12.31.2012
In Thousands of AR$
2,155
225
Balance at the Beginning of the Reserve for Translation
Increase in the Reserve for Translation Related to Foreign Operations for the Fiscal
Year Ended December 31, 2013 and 2012
Balance of the Reserve for Translation Differences Related to Foreign Operations
48
3,195
5,350
1,930
2,155
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 20 – CASH AND CASH EQUIVALENTS
12.31.2013
12.31.2012
In Thousands of AR$
83,312
21,720
99,258
35,743
480,367
147,296
140,094
141,874
2,737
16,669
49,180
50,496
854,948
413,798
Cash in Banks – Checking Account
Cash and Petty Cash
Time Deposits
Mutual Funds
Deposits Abroad
Collections to be Deposited
Total
NOTE 21 – INVESTMENTS
12.31.2013
12.31.2012
In Thousands of AR$
15,195
38,174
6,268
62,436
2,547
100,610
24,010
Current
Investment in Government Securities
Investment in Notes (“Obligaciones Negociables”)
Mutual Funds
Total
Non-current
Investment in Notes (“Obligaciones Negociables”)
Total
-
28,611
28,611
Below is a breakdown of the main characteristics of investments effective as of December 31, 2013:
Investment
Currency
Date
09/19/2012
US$
10/19/2012
10/23/2012
09/09/2013
10/08/2013
12/06/2013
12/27/2013
12/30/2013
US$
AR$
AR$
AR$
AR$
AR$
AR$
Investment
Notes (“Obligaciones
Negociables”) Cresud
Class X Series 5 Tranche
II
Notes (“Obligaciones
Negociables”) YPF Class
IX
Fima Capital Plus “C”
Fima Capital Plus “C”
Axis Renta Fija Cobertura
Fima Capital Plus “C”
Fima Capital Plus “C”
Fima Capital Plus “C”
Maturity
Date
2,333
06/23/2014
Fixed at
7.75%
15,131
17,115
3,500
N/A
N/A
N/A
N/A
N/A
N/A
10/19/2014
N/A
N/A
N/A
N/A
N/A
N/A
Fixed at
5%
N/A
N/A
N/A
N/A
N/A
N/A
22,697
2,371
3,000
2,000
3,000
30,000
20,000
17,115
2,371
-
(*) It corresponds to the principal amount as of the indicated dates in Argentine Pesos.
49
Interest
Rate /
Price
Book
Book
Value as
Value as
of
of
12.31.2013 12.31.2012
(*)
(*)
Amount in
Thousands
of US$
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 22 – RECEIVABLES FROM SERVICES
12.31.2013
12.31.2012
In Thousands of AR$
9,507,916
7,009,583
(710,592)
(503,458)
224,136
124,226
(4,960)
(7,857)
9,016,500
6,622,494
Current
Credit Card Debtors
Allowances for Credit Losses – Credit Card
Personal Loans Debtors
Allowances for Credit Losses – Personal Loans
Total
Non-current
Credit Card Debtors
Personal Loans Debtors
Total
143,257
1,330
144,587
170,612
2,887
173,499
Changes in the Account Allowance for Credit Losses
Balances at the Beginning of the Fiscal Year
Increases for the Fiscal Year
Increase due to Merger with Tarjeta Mira S.A. as of
12.31.11
Decrease due to Sale of Portfolio to Tarjetas del Mar S.A.
Applications and Uses
Balances at Fiscal Year-end
12.31.2013
12.31.2012
In Thousands of AR$
511,315
255,917
542,111
413,070
(337,874)
715,552
4,716
(6,466)
(155,922)
511,315
Memorandum Accounts
Additionally, as of December 31, 2013 and December 31, 2012, the Company recorded under memorandum
accounts AR$ 969,433 and AR$ 693,752, respectively, in respect of those receivables from services that are
considered uncollectible, considering as such those in arrears for more than 360 days.
50
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 23 – OTHER RECEIVABLES
12.31.2013
12.31.2012
In Thousands of AR$
44,736
11,865
572
596
13,237
15,403
6,683
4,068
46,329
31,771
3,052
5,956
115,602
958
230,211
70,617
Current
Sundry Receivables
Deposits for Checking Account Attachments
Prepaid Expenses
Life Insurance Receivable
Commissions Receivable
Advance Payments to Suppliers
Balances under Hedging Transactions
Total
Non-current
Sundry Receivables
Security Deposits
Prepaid Expenses
Total
108,255
1,993
1,690
111,938
51
37,259
1,491
816
39,566
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 24 – INVESTMENTS IN ASSOCIATES AND OTHER COMPANIES
Issuer Information
Issuing Company
Interest
Percentage
Book Value
as of
12.31.2013
Book Value
as of
12.31.2012
Principal Line of
Business
Class of
Shares
Number of
Shares
(2)
Face Value
of Shares
(1)
Balances as of 12.31.2013
Capital
(1)
In Thousands of AR$
Cobranzas Regionales S.A.
Tarjeta Naranja Perú S.A.C.
Tarjetas Cuyanas S.A.
Totals
5%
24%
1%
737
21,483
427
17,315
4,051
2,941
26,271
20,683
Shareholders’
Equity
Income /
(Loss)
In Thousands of AR$
Integral Advisory
Services for Credit
Risk Analysis
Ordinary
registered
shares
10,000
Commercial and
Investing Activities
Ordinary
registered
shares
Credit Card
Administrator
Ordinary
registered
shares
(1) Values are stated in each company’s local currency based on its country of origin.
(2) Values are stated in units.
52
0.1
1,000
14,735
6,190
88,741,047
0.001
88,741
89,514
(57,584)
3,233,283
0.01
32,333
423,533
146,380
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 25 – PROPERTY, PLANT AND EQUIPMENT
ORIGINAL VALUE
DEPRECIATION
NET BOOK VALUE
Value at
the
Beginning
of the
Fiscal
Year
Deletes
Land
Real Property
Cost of Adapting Stores
Furniture and Fixtures
Hardware
Facilities and
Improvements
Vehicles
Adaptation of Stores in
Progress
26,935
22,637
91,526
24,677
64,527
(15)
(3,944)
1,417
24,732
1,915
3,257
1,001
1,558
2,715
26,935
24,054
117,244
28,150
66,555
(4,765)
(58,289)
(15,380)
(37,791)
1,204
3
37,948
3
(5)
-
5,769
-
2,095
-
45,807
3
(18,212)
(3)
-
(3)
-
8,267
(1,330)
8,552
(7,369)
8,120
-
-
-
-
Totals as of 12.31.2013
276,520
(5,294)
45,642
-
316,868
(134,440)
1,204
-
(24,527)
Totals as of 12.31.2012
223,249
(2,855)
56,126
-
276,520
(116,137)
2,640
-
(20,943)
(134,440)
Adds
Value at
Fiscal Yearend
Transfers
Accumulated
at the
Beginning of
the Fiscal
Year
Deletes
Transfers
For the
Fiscal
Year
Accumulated
at Fiscal
Year-end
12.31.2013
12.31.2012
(354)
(10,816)
(1,711)
(7,952)
(5,119)
(69,105)
(17,091)
(44,536)
26,935
18,935
48,139
11,059
22,019
26,935
17,872
33,237
9,297
26,736
(3,694)
-
(21,909)
(3)
23,898
-
19,736
-
-
8,120
8,267
(157,763)
159,105
In Thousands of AR$
53
142,080
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 26 – INTANGIBLE ASSETS
INTANGIBLE ASSETS
ORIGINAL VALUE
Items
Patents and Software
Value at
the
Beginning
of the
Fiscal Year
Deletes
AMORTIZATION
Value at
Fiscal
Year-end
Adds
Accumulated
at the
Beginning of
the Fiscal
Year
Deletes
NET BOOK VALUE
For the
Fiscal Year
Accumulated
at Fiscal Yearend
12.31.2013
12.31.2012
123,713
(48,188)
50,315
125,840
(32,682)
-
(14,419)
(47,101)
78,739
91,031
5,027
-
-
5,027
-
-
-
-
5,027
5,027
Totals as of 12.31.2013
128,740
(48,188)
50,315
130,867
(32,682)
-
(14,419)
(47,101)
83,766
Totals as of 12.31.2012
73,993
(78)
54,825
128,740
(22,477)
26
(10,231)
(32,682)
Other Intangible Assets
54
96,058
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 27 – ACCOUNTS PAYABLE
12.31.2013
12.31.2012
In Thousands of AR$
5,074,886
3,427,825
63,278
79,791
20,293
14,875
40,702
33,021
5,199,159
3,555,512
Current
Merchants (“Comercios Amigos”)
Suppliers
Life Insurance Payable
Collections on Account of Third Parties Payable
Total
NOTE 28 – BANK AND FINANCIAL LOANS
12.31.2013
Current
Notes (“Obligaciones Negociables”)
Bank and Financial Loans
Financial Leases
Balances under Hedging Transactions
Checking Account Overdrafts
Total
12.31.2012
In Thousands of AR$
779,498
444,458
692,162
485,655
2,774
3,272
1,631
139,227
47,433
1,613,661
982,449
Non-current
Notes (“Obligaciones Negociables”)
Bank and Financial Loans
Financial Leases
Total
1,566,097
89,091
116,270
1,771,458
1,191,401
96,982
51,670
1,340,053
NOTE 29 – COMPENSATION AND SOCIAL SECURITY CHARGES
12.31.2013
12.31.2012
In Thousands of AR$
44,984
53,755
48,979
43,015
50,919
39,397
37,076
25,138
18,729
4,548
200,687
165,853
Current
Salaries Payable
Social Security Charges
Provisions
Bonuses for the Staff
Rewards for the Staff
Total
55
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 30 – TAX CHARGES
12.31.2013
12.31.2012
In Thousands of AR$
Trade and Industry Tax Payable
Tax Withholdings and Additional Tax Withholdings Made
from Third Parties
Value-added Tax Payable
Turnover Tax Payable
Total
7,205
5,607
47,029
72,862
18,092
145,188
32,922
58,579
13,110
110,218
NOTE 31 – OTHER LIABILITIES
12.31.2013
Current
Fees Payable to Directors and Supervisory Committee
Advanced Payments to Directors
Other Miscellaneous Liabilities
Total
56
12.31.2012
In Thousands of AR$
11,183
(1,472)
905
10,616
8,800
(920)
3,355
11,235
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 32 – PROVISIONS
This account includes the estimated amounts to face risks of probable occurrence, which, if they occur, will
give rise to a loss for the Company.
(1) Legal Claims:
The Company is subject to several claims, lawsuits and other legal proceedings, including customers’ claims,
where a third party is claiming payments for alleged damages, refunds for losses or compensation. The
potential debt for the Company with respect to such claims, lawsuits and other legal proceedings cannot be
certainly estimated. Management periodically reviews the progress of each of the significant issues and
calculates the potential financial exposure.
A provision is booked when a potential loss derived from a claim or legal proceeding is deemed likely and the
amount can be fairly estimated.
At the date of issuance of these financial statements, the Company’s situation with the Argentine Association
of Consumers and Users Protection (ADECUA, as per its initials in Spanish) is as follows:
In 2008, ADECUA brought a legal action against Tarjeta Naranja for undue collection of the life insurance
charge payable. In 2009, the parties signed a transactional agreement, where it was agreed to decrease the
amount of collection of the life insurance charge payable and allow customers to claim the reimbursement of
a portion of the amounts collected, if applicable, by filing an individual request. This agreement was
approved by the court and all the requirements established by the judge hearing the case were met, to such
an extent that, once the term to comply with the court decision had elapsed, all the acts performed by Tarjeta
Naranja were submitted to the judge, without any objection by the latter to the outcome of the proceedings.
In 2013, the same court summons the parties to a hearing and after it the court issues a decision, whereby it
understands that the amounts collected for the life insurance payable should be reimbursed to all the
customers from whom this charge had been collected and not only those who had requested the
reimbursement, as provided by the agreement previously approved. The decision was appealed before the
respective Court of Appeals considering that the Company carried out all the actions undertaken in due time
and manner and proved so before the judge hearing the case. Therefore, we believe that the outcome of the
proceedings should not have a material financial effect.
Provisions for contingent losses reflect a fair estimation of the losses to be incurred based on the information
made available by Management as of the date of the preparation of the financial statements and considering
the lawsuits to which Tarjeta Naranja is a party. These estimations are mainly prepared with the assistance
provided by the legal advisors.
(2) Tax Claims:
As of the date of these financial statements, the Company is in the following situation with respect to certain
Provincial Tax Boards and the Argentine IRS (Administración Federal de Ingresos Públicos – “AFIP”):
Provincial Tax Boards
The Company has a dispute with the General Tax Board of the Province of Córdoba regarding turnover tax
claimed for tax periods running from January 1997 to May 2003.
57
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 32 – PROVISIONS (CONTINUED)
(2) Tax Claims (Continued):
On July 30, 2010, the Court of Appeals in Federal Administrative Matters declared null and void the
resolutions passed by the General Tax Board. The General Tax Board appealed the decision and, at the
date of these financial statements, the case is pending a decision by the Supreme Court of Justice of the
Province of Córdoba.
The full amount claimed by the Tax Board of the Province of Córdoba, plus additional charges, amounted to
AR$ 1,205 at the time of the last calculation. As of December 31, 2013 and 2012, this amount, including the
respective interest, totaled AR$ 2,095 and AR$ 1,975, respectively.
At the date of these financial statements, the provisions booked in liabilities related to the cases described
above had been adjusted based on the opinion of the legal advisors, the judicial case law referred to above
and the favorable evolution thereof.
Likewise, the Tax Boards of the Provinces of Catamarca and Chubut have made claims for the same items.
As of December 31, 2013, such claims totaled AR$ 1,832 and AR$ 3,437, respectively. As of December 31,
2012, such amounts totaled AR$ 1,832 and AR$ 2,716, respectively.
Concerning the issues described above, Tarjeta Naranja S.A.'s Board of Directors, based on tax advisors'
opinions, considers the taxes involved have been appropriately calculated according to legal regulations
currently in force, and those tax authorities’ claims have no legal or technical grounds. Therefore, the
Company is currently exercising — and will exercise in the future — its constitutional rights in order to clarify
and settle said issues. However, the Company — as in all cases where a judicial litigation is involved and
based on a prudence criterion — has included certain provisions into the Company’s liabilities, which are
determined based on the opinion of tax advisors and considering the evolution of the cases described above.
Argentine IRS (“Administración Federal de Ingresos Públicos” - AFIP)
Tarjeta Naranja S.A. has lodged appeals before the Federal Tax Court with regard to the adjustments made
by the AFIP. Such adjustments had to do with the method to be used for the deduction of credit losses when
determining the Income Tax, corresponding to fiscal years 1999 and 2000.
The Argentine Supreme Court of Justice, in rulings related to Tarjeta Naranja S.A. and Banco Francés S.A.,
has issued favorable decisions with regard to controversies over the method used for the deduction of credit
losses that was similar to the Company’s. In addition, in May 2011, the Federal Tax Court issued a similar
decision in a case related to Tarjetas Cuyanas S.A. This supported the criterion for the deduction of credit
losses adopted by the Company.
In May 2012, the Federal Tax Court issued a decision in favor of the Company for the tax periods 1999 and
2000 referred to above, where it decided to revoke the Decisions that determined the adjustments, with costs
awarded against the AFIP. On December 19, 2013, and in the face of the appeal filed by the AFIP, the Court
of Appeals in Federal Administrative Matters dismissed the appeal filed by the former, confirming the
judgment entered by the Federal Tax Court and thus validating the Company’s tax criterion.
58
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 32 – PROVISIONS (CONTINUED)
As of the date of these financial statements, the provisions booked in liabilities related to the cases described
above had been adjusted based on the opinion of the tax advisors, the administrative and judicial case law
referred to above and the favorable evolution thereof.
The breakdown and changes of contingent liabilities as of December 31, 2013 are as follows:
Tax Matters
Consumer Protection
Labor Matters
Damages
Others
Total
Balance at
the
Beginning
of the
Fiscal Year
11,781
10
2,493
553
520
15,357
Adds
5,633
5,967
2,469
276
698
15,043
Deletes
(6,483)
(10)
(795)
(128)
(30)
(7,446)
Payments
Balance at
Fiscal
Year-end
(107)
(107)
In addition, the breakdown and changes of contingent liabilities as of December 31, 2012 are as
follows:
Tax Matters
Consumer Protection
Labor Matters
Damages
Others
Total
Balance at
the
Beginning
of the
Fiscal Year
14,715
10
1,901
527
8,037
25,190
Adds
10,447
1,125
151
105
11,828
59
Deletes
(13,381)
(533)
(125)
(7,622)
(21,661)
Balance at
Fiscal
Year-end
11,781
10
2,493
553
520
15,357
10,824
5,967
4,167
701
1,188
22,847
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 33 – BANK AND FINANCIAL LOANS
Bank Loans Obtained
With the purpose of financing its business transactions, the Company took out the following bank loans, the main characteristics of which with regard to the
obligations outstanding as of December 31, 2013 are summarized as follows, in chronological order:
Institution
Currency
of the
Loan
Date of
Disbursement
Maturity
Date
Term
Loan
Amount
Outstanding
Principal
Amount as of
12.31.2013
Guaranty
Principal Payments
Interest Payments
Banco
Hipotecario
S.A.
Pesos
(AR$)
08/04/2010
01/29/2014
b)
1275
days
b)
15,000
15,000
None
One payment at maturity
Monthly
Banco Itaú
Argentina S.A.
Pesos
(AR$)
09/30/2011
09/07/2015
c)
1438
days
c)
11,000
11,000
None
One payment at maturity
Monthly
Banco
Patagonia S.A.
Pesos
(AR$)
10/05/2011
10/02/2014
d)
1093
days d)
15,000
15,000
None
One payment at maturity
Monthly
Banco
Santander Río
S.A.
Pesos
(AR$)
03/16/2012
03/16/2014
2 years
10,000
3,333
None
3 consecutive quarterly
installments of AR$ 3,333
each. The first principal
payment is due on 09/16/2013
Quarterly
Banco de
Galicia y Bs.
As. S.A.
Pesos
(AR$)
04/24/2012
04/24/2014
e)
2 years
e)
50,000
50,000
None
One payment at maturity
Monthly
Syndicate
f)
Pesos
(AR$)
05/18/2012
05/19/2014
731 days
60,000
24,000
None
5 quarterly installments of AR$
12,000. The first principal
payment is due on 05/20/2013
Quarterly
Industrial and
Commercial
Bank of China
(Argentina)
S.A.
Pesos
(AR$)
06/04/2012
05/30/2014
g)
725 days
g)
20,000
20,000
None
One payment at maturity
Monthly
60
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 33 – BANK AND FINANCIAL LOANS (CONTINUED)
Bank Loans Obtained (Continued)
Term
Loan
Amount
Outstanding
Principal
Amount as of
12.31.2013
Guaranty
Principal Payments
Interest Payments
06/19/2014
h)
723 days
h)
20,000
20,000
None
One payment at maturity
Monthly
07/03/2012
06/27/2014
i)
724 days
i)
15,000
15,000
None
One payment at maturity
Quarterly
Pesos
(AR$)
09/14/2012
09/16/2014
j)
732 days
j)
20,000
20,000
None
One payment at maturity
Upon maturity
Banco Itaú
Argentina S.A.
Pesos
(AR$)
09/17/2012
09/07/2015
k)
1085 days
k)
15,000
15,000
None
One payment at maturity
Monthly
Banco Itaú
Argentina S.A.
Pesos
(AR$)
10/15/2012
10/05/2014
720 days
15,000
15,000
None
One payment at maturity
Monthly
Banco de
Galicia y Bs.
As. S.A.
Pesos
(AR$)
01/09/2013
01/09/2014
l)
1 year
15,000
15,000
None
One payment at maturity
Monthly
One payment at maturity
Monthly
One payment at maturity
Monthly
Institution
Currency
of the
Loan
Date of
Disbursement
Maturity
Date
Banco
Patagonia S.A.
Pesos
(AR$)
06/26/2012
Banco
Santander Río
S.A.
Pesos
(AR$)
Banco de
Galicia y Bs.
As. S.A.
Banco
Supervielle
S.A.
Pesos
(AR$)
02/01/2013
02/03/2014
367 days
20,000
20,000
Banco Ciudad
de Buenos
Aires
Pesos
(AR$)
02/08/2013
02/08/2014
1 year
90,000
90,000
61
A percentage of
the amounts
collected by
Tarjeta Naranja
S.A.
a)
None
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 33 – BANK AND FINANCIAL LOANS (CONTINUED)
Bank Loans Obtained (Continued)
Institution
Currency
of the
Loan
Date of
Disbursement
Maturity
Date
Term
Loan
Amount
Outstanding
Principal
Amount as of
12.31.2013
Guaranty
Principal Payments
Interest Payments
Banco de
Galicia y Bs.
As. S.A.
Pesos
(AR$)
02/14/2013
02/14/2014
1 year
6,000
6,000
None
One payment at maturity
Upon maturity
Banco Itaú
Argentina S.A.
Pesos
(AR$)
04/16/2013
04/16/2014
1 year
20,000
20,000
None
One payment at maturity
Monthly
Banco Itaú
Argentina S.A.
Pesos
(AR$)
05/17/2013
05/16/2014
364
days
19,000
19,000
None
One payment at maturity
Monthly
Banco de
Servicios y
Transacciones
S.A.
Pesos
(AR$)
05/27/2013
05/27/2014
1 year
10,000
10,000
None
One payment at maturity
Monthly
Banco
Patagonia S.A.
Pesos
(AR$)
05/29/2013
05/21/2014
357
days
45,000
45,000
None
One payment at maturity
Monthly
Banco de
Servicios y
Transacciones
S.A.
Pesos
(AR$)
06/26/2013
06/26/2014
1 year
3,000
3,000
None
One payment at maturity
Monthly
Industrial and
Commercial
Bank of China
(Argentina)
S.A.
Pesos
(AR$)
07/16/2013
07/16/2014
1 year
15,000
15,000
None
One payment at maturity
Monthly
62
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 33 – BANK AND FINANCIAL LOANS (CONTINUED)
Bank Loans Obtained (Continued)
Institution
Currency of
the Loan
Date of
Disbursement
Maturity
Date
Term
Loan
Amount
Outstanding
Principal
Amount as of
12.31.2013
Guaranty
Principal Payments
Interest Payments
Banco
Credicoop
Coop. Ltdo.
Pesos
(AR$)
09/03/2013
09/03/2014
1 year
10,000
10,000
None
One payment at maturity
Monthly
Pesos
(AR$)
09/04/2013
09/04/2014
1 year
25,000
25,000
None
One payment at maturity
Monthly
Pesos
(AR$)
09/17/2013
09/17/2014
1 year
5,000
5,000
None
One payment at maturity
Monthly
Banco Comafi
S.A.
Pesos
(AR$)
09/23/2013
03/23/2014
180
days
20,000
20,000
None
One payment at maturity
Monthly
Banco Itaú
Argentina S.A.
Pesos
(AR$)
09/27/2013
09/17/2015
720
days
19,000
19,000
None
One payment at maturity
Monthly
Banco Comafi
S.A
Pesos
(AR$)
09/30/2013
03/29/2014
180
days
10,000
10,000
None
One payment at maturity
Monthly
Banco Itaú
Argentina S.A.
Pesos
(AR$)
10/15/2013
10/05/2015
720
days
10,000
10,000
None
One payment at maturity
Monthly
Banco Itaú
Argentina S.A.
Pesos
(AR$)
10/15/2013
10/10/2014
360
days
18,000
18,000
None
One payment at maturity
Monthly
Banco
Supervielle
S.A.
Banco
Supervielle
S.A.
63
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 33 – BANK AND FINANCIAL LOANS (CONTINUED)
Bank Loans Obtained (Continued)
Institution
Currency of
the Loan
Date of
Disbursement
Maturity
Date
Term
Loan
Amount
Outstanding
Principal
Amount as of
12.31.2013
Guaranty
Principal Payments
Interest Payments
Nuevo Banco
Pesos
2
de Santa Fe
10/31/2013
10/31/2015
10,000
9,167
None
Monthly
Monthly
(AR$)
years
S.A.
Industrial and
Commercial
Pesos
364
Bank of China
11/22/2013
11/21/2014
10,000
10,000
None
One payment at maturity
Monthly
(AR$)
days
(Argentina)
S.A.
Banco
Pesos
364
Santander Río
11/29/2013
11/28/2014
15,000
15,000
None
One payment at maturity
Quarterly
(AR$)
days
S.A.
Banco de
Pesos
Galicia y Bs.
12/10/2013
12/10/2014 1 year
15,000
15,000
None
One payment at maturity
Quarterly
(AR$)
As. S.A.
Banco de
Pesos
Galicia y Bs.
12/27/2013
12/27/2014 1 year
50,000
50,000
None
One payment at maturity
Quarterly
(AR$)
As. S.A.
a) See Note 43.
b) On August 2, 2013, a 180-day extension was signed. Therefore, the new maturity date is January 29, 2014.
c) On September 19, 2013, a 718-day extension was signed. Therefore, the new maturity date is September 7, 2015.
d) On October 2, 2013, a 365-day extension was signed. Therefore, the new maturity date is October 2, 2014.
e) On April 24, 2013, a 365-day extension was signed. Therefore, the new maturity date is April 24, 2014.
f) Loan obtained through a group of financial institutions, such as Nuevo Banco de Santa Fe S.A., Banco de La Pampa S.E.M., Banco de Crédito y Securitización S.A., Banco de la Ciudad de
Buenos Aires, Banco de Servicios y Transacciones S.A. and Banco Santander Río S.A. The latter also performs the role of arranger and administrative agent.
g) On May 30, 2013, a 365-day extension was signed. Therefore, the new maturity date is May 30, 2014.
h) On June 26, 2013, a 358-day extension was signed. Therefore, the new maturity date is June 19, 2014.
i) On June 28, 2013, a 364-day extension was signed. Therefore, the new maturity date is June 27, 2014.
j) On September 16, 2013, a 365-day extension was signed. Therefore, the new maturity date is September 16, 2014.
k) On September 17, 2013, a 720-day extension was signed. Therefore, the new maturity date is September 7, 2015.
l) On January 9, 2014, the loan was repaid.
64
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 33 – BANK AND FINANCIAL LOANS (CONTINUED)
Bank Loans Obtained (Continued)
Covenants Undertaken:
In the loan agreements entered into with Banco Supervielle S.A., the Company agreed to comply with the
following covenants:
Not to assign for the use or enjoyment, not to grant as loan for consumption and/or as a gratuitous loan,
not to lease or grant a lease, not to grant a security interest and/or guaranty and/or not to create trusts
and/or carry out an assignment of its rights, whether fiduciary or not, and/or personal rights whatsoever
with regard to more than 35% of its present or future assets, and/or goods and/or rights and/or revenues
already received or to be received in the future, and not to carry out transactions that could result in the
aforementioned without advance written consent by the Bank, except for such asset disposals or leases
carried out during the ordinary course of the Company’s business and the proceeds of which are again
used, completely, for the Company’s business activities.
In turn, in the syndicated loan agreement entered into, the Company agreed to comply with the following
covenants:
(i)
Not to guarantee third-party debts, including subsidiaries and affiliates, or else become a surety
and/or collateral guarantor with regard thereto, for an annual accumulated amount higher than 10%
of the Company’s total assets.
(ii)
Not to make investments in or else grant loans to: (a) its shareholders, directors and employees, and
(b) its subsidiaries and affiliates, for an annual accumulated amount exceeding 10% of the
Company’s shareholders’ equity, except for those investments or the granting of loans carried out
during the ordinary course of the Company’s business.
(iii) Not to sell, assign, transfer, lease or else dispose in any other way of all of its property plant and
equipment or a significant part thereof that represent an amount higher than 25% of the Company’s
total assets, individually or as a whole, during the currency of the loan, except for such asset
disposals or leases carried out during the ordinary course of the Company’s business and the
proceeds of which are again used, completely, for the Company's business activities (including,
without limitation, the credit assignments under financial trusts).
(iv) Not to incur debt, unless at the date of incurring debt all of the following requirements are met:
a)
b)
c)
(v)
The Total Liabilities to Shareholders’ Equity Ratio does not exceed 6 to 1;
The Indebtedness to Shareholders’ Equity Ratio does not exceed 4 to 1;
After having incurred such debt, the Company’s shareholders’ equity is higher than AR$
850,000.
The Company shall be able to distribute cash dividends among shareholders as long as the
abovementioned shareholders' equity ratios are kept.
65
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 33 – BANK AND FINANCIAL LOANS (CONTINUED)
Bank Loans Obtained (Continued)
Covenants Undertaken (Continued):
(vi)
Neither the Company nor its subsidiaries shall levy, undertake or else allow the existence of any
lien on all or part of their goods or assets, including intangible assets or present or future revenues,
as from the first business day immediately following the date of the agreement, except for the
permitted liens.
At the date of these financial statements, the Company has complied with the abovementioned covenants
undertaken.
Financial Loans Obtained
With the purpose of financing its business transactions, the Company took out the following financial
loans, the main characteristics of which with regard to the obligations outstanding as of December 31,
2013 are summarized as follows:
Institution
Currency
of the
Loan
Date of
Disbursement
Maturity Date
Term
Loan
Amount
Outstanding
Principal
Amount as of
12.31.2013
Guaranty
Principal
Payments
Interest
Payments
Tarjetas
Regionales
S.A.
Pesos
(AR$)
08/10/2012
08/10/2014
2
years
55,000
55,000
None
One payment
at maturity
Quarterly
Tarjetas
Regionales
S.A.
Pesos
(AR$)
04/22/2013
05/10/2015
748
days
30,000
30,000
None
One payment
at maturity
Monthly
66
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 33 – BANK AND FINANCIAL LOANS (CONTINUED)
Checking Account Overdrafts
The Company has taken out and used the following checking account overdrafts, the main characteristics
of which with regard to the obligations outstanding are summarized as follows, in chronological order:
Institution
HSBC Bank Argentina
S.A.
Banco Macro S.A.
Banco Santander Rio
S.A.
Banco Santander Rio
S.A.
HSBC Bank Argentina
S.A.
Banco Santander Rio
S.A.
Overdraft
Currency
Pesos
(AR$)
Pesos
(AR$)
Pesos
(AR$)
Pesos
(AR$)
Pesos
(AR$)
Pesos
(AR$)
Date of
Constitution
Maturity Date
Overdraft
Amount (*)
Amortization
Interest
Payments
06/04/2013
06/04/2014
22,000
Upon maturity
Monthly
07/10/2013
07/10/2014
50,000
Upon maturity
Monthly
07/18/2013
01/14/2014 (a)
10,000
Upon maturity
Quarterly
07/25/2013
01/21/2014 (a)
9,000
Upon maturity
Quarterly
10/09/2013
01/09/2014 (a)
21,000
Upon maturity
Monthly
11/29/2013
05/28/2014
25,000
Upon maturity
Quarterly
(*) It corresponds to the principal amount outstanding as of the indicated dates in Argentine Pesos.
(a) These overdrafts were settled upon maturity.
Memorandum Accounts
Additionally, as of December 31, 2013, the Company recorded AR$ 100,000 under memorandum
accounts, which represent the unused amount of the Company’s commitment to Banco Galicia, executed
in September 2013, which expires on September 30, 2014.
Moreover, as of December 31, 2012, the Company recorded AR$ 100,000 under memorandum accounts,
which represented the unused amount of the Company’s commitment to Banco Galicia, executed in
September 2012, which expired on September 2, 2013.
67
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 34 – FINANCIAL LEASES
The Company has entered into financial lease agreements, the main characteristics of which are detailed
below:
Subject-matter
Month of
Agreement
Execution
Institution
November
2007
Banco de
Galicia y
Buenos Aires
S.A.
Real Property
Located in the
City of Córdoba,
at Humberto
Primo Street (a)
July 2008
Banco de
Galicia y
Buenos Aires
S.A.
Real Property
Located in the
City of Córdoba,
at Jujuy Street (b)
July 2008
Banco de
Galicia y
Buenos Aires
S.A.
October 2012
Banco de
Galicia y
Buenos Aires
S.A.
Real Property
Located in Río
Grande
Real Property
Located in the
City of Córdoba,
at Jujuy and Bv.
Mitre Streets
Installments
Lease Payments
Payment
Method
Purchase Option
121
60 lease payments of AR$
15 and 61 lease payments of
AR$ 3, plus interest at a
variable rate. In both cases,
interest is computed based
on the Corrected Survey
Rate for Private Banks, plus
a 5.5% spread
Monthly
AR$ 48 at the time of
paying the last
installment
121
AR$ 70, plus interest at a
variable rate based on the
Corrected Survey Rate for
Private Banks, plus a 6%
spread
Monthly
AR$ 1,100 at the time
of paying the last
installment
121
AR$ 18, plus interest at a
variable rate based on the
Corrected Survey Rate for
Private Banks, plus a 6%
spread
Monthly
AR$ 400 at the
time of paying the
last installment
121
AR$ 119 plus interest at a
variable rate based on the
Corrected Survey Rate for
Private Banks plus a 6%
spread
Monthly
AR$ 435 at the
time of paying the
last installment
a) On December 6, 2010, the Company signed with Banco de Galicia y Buenos Aires S.A. an addendum to the lease agreement
for financing the construction of a building on the real property located at Humberto Primo Street. Subsequently, on October 30,
2012, a new addendum was signed, which, together with the previous one, are part of a new transaction.
b) The agreement was signed on July 7, 2010, when the minutes of real estate reception were drawn up.
The following are the minimum lease payments as of December 31, 2013 and the related present value:
Present Value of
Minimum Lease
Payments
12.31.2013
8,015
2,774
25,092
10,939
109,191
105,331
(23,254)
119,044
119,044
Minimum Lease
Payments
Less than One Year
From 1 to 5 Years
Over 5 Years
Minus Future Financing Charges
Present Value of Minimum Lease Payments
12.31.2013
Included in the Financial Statements as:
Current Financial Lease
Non-current Financial Lease
Total
2,774
116,270
119,044
68
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 35 – NOTES (“OBLIGACIONES NEGOCIABLES”)
As of December 31, 2013, the Company has the Global Program approved by Resolutions No. 15220,
No. 15361, No. 15785, No. 16319, No. 16571 and No. 16822 of the C.N.V. outstanding.
Authorized Amount
(In Thousands of
U.S. dollars)
Type of Note
Term of Program
Date of Approval by
Shareholders’
Meeting
Approval by the
C.N.V.
650,000 (*)
Simple notes, not convertible into
shares
5 years
03/08/2012
Resolution No. 16822
dated 05.23.2012
(*) The Company’s Shareholders’ Meeting held on July 14, 2005 authorized the creation of a Global Program for the Issuance of
Notes for a maximum outstanding amount of US$ 50,000 to be placed by means of a public offering. On October 26, 2005, the
C.N.V. authorized the creation of the global program and the public offering of each series of notes issued under such Program
through Resolution No. 15220 of that date.
The Shareholders’ Meeting held on March 3, 2006, in turn, authorized to increase the amount of said Global Program of Notes
by US$ 100,000, thus resulting in a total maximum amount of US$ 150,000. Such increase was authorized by the C.N.V.
through Resolution No. 15361 dated March 26, 2006.
On October 31, 2007, the Company’s Shareholders’ Meeting approved to increase said Program’s amount up to a maximum
outstanding amount of US$ 350,000 or its equivalent amount in any other currency. Such increase was authorized by the C.N.V.
through Resolution No. 15785 dated November 16, 2007. On March 26, 2010, the Shareholders’ Meeting approved the
extension of the term during which such program would be effective. On April 27, 2010, the C.N.V. authorized such extension
through Resolution No. 16319.
Later, the Company’s Shareholders’ Meeting held on April 1, 2011 approved to increase said Program’s amount up to a
maximum outstanding amount of US$ 450,000 or its equivalent amount in any other currency. Such increase was authorized by
the C.N.V. through Resolution No. 16571 dated May 24, 2011.
Finally, on March 8, 2012, the Company’s Shareholders’ Meeting approved to increase said Program’s amount up to a
maximum outstanding amount of US$ 650,000 or its equivalent amount in any other currency. Such increase was authorized by
the C.N.V. through Resolution No. 16822 dated May 23, 2012.
69
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 35 – NOTES (“OBLIGACIONES NEGOCIABLES”) (CONTINUED)
Below is a breakdown of the main characteristics of notes and their balances as of December 31, 2013
and December 31, 2012:
Date of
Placement
Currency
Class
Number
Amount in
Thousands
Type
72
months
Term
Interest
Rate /
Price
Authorized
by C.N.V. on
01/28/2017
Fixed at 9%
p.a.
01/14/2011
1,305,000
984,000
Maturity Date
Book Value (*)
12.31.13
12.31.12
01/28/2011
US$ (1)
XIII
200,000
Simple notes,
not convertible
into shares
06/14/2011
AR$ (2)
XIV
Series II
79,852
Simple notes,
not convertible
into shares
21
months
03/14/2013
Floating
Badlar rate
+ 3.40%
06/06/2011
-
26,623
12/19/2011
US$ (3)
XVI
Series II
13,947
Simple notes,
not convertible
into shares
731 days
12/19/2013
Fixed at
8.75%
p.a.
12/07/2011
-
68,620
04/24/2012
AR$ (4)
XVII
Series I
34,610
Simple notes,
not convertible
into shares
365 days
04/24/2013
Fixed at
16.25%
p.a.
04/13/2012
-
34,610
04/24/2012
AR$ (4)
XVII
Series II
165,390
Simple notes,
not convertible
into shares
548 days
10/24/2013
Floating
Badlar rate
+ 2.10%
04/13/2012
-
165,390
08/07/2012
AR$ (5)
XVIII
Series I
46,421
Simple notes,
not convertible
into shares
270 days
05/04/2013
Fixed at
17.7%
p.a.
07/26/2012
-
46,421
08/07/2012
AR$ (5)
XVIII
Series II
102,315
Simple notes,
not convertible
into shares
549 days
02/07/2014
Floating
Badlar rate
+ 4.00%
07/26/2012
102,315
102,315
10/30/2012
AR$ (6)
XIX
Series I
52,980
Simple notes,
not convertible
into shares
270 days
07/27/2013
Fixed at
19%
p.a.
10/19/2012
-
52,980
10/30/2012
AR$ (6)
XIX
Series II
112,345
Simple notes,
not convertible
into shares
547 days
04/30/2014
Floating
Badlar rate
+ 4.19%
10/19/2012
112,345
112,345
02/07/2013
AR$ (7)
XX Series
II
208,136
Simple notes,
not convertible
into shares
546 days
08/07/2014
Floating
Badlar rate
+ 4.25%
01/24/2013
208,136
-
05/17/2013
AR$ (8)
XXI Series
II
201,800
Simple notes,
not convertible
into shares
549 days
11/17/2014
Floating
Badlar rate
+ 4.39%
05/08/2013
201,800
-
08/09/2013
AR$ (9)
XXII
Series I
42,023
Simple notes,
not convertible
into shares
270 days
05/06/2014
Fixed at
21%
p.a.
07/18/2013
42,023
-
08/09/2013
AR$ (9)
XXII
Series II
114,020
Simple notes,
not convertible
into shares
549 days
02/09/2015
Floating
Badlar rate
+ 3.75%
07/18/2013
114,020
-
12/04/2013
AR$ (10)
XXIII
Series I
35,000
Simple notes,
not convertible
into shares
270 days
08/31/2014
Fixed at
24.5%
p.a.
11/20/2013
35,000
-
12/04/2013
AR$ (10)
XXIII
Series II
152,174
Simple notes,
not convertible
into shares
547 days
06/04/2015
Floating
Badlar rate
+ 4.5%
11/20/2013
152,174
-
(*) It corresponds to the principal amount outstanding as of the indicated dates in Argentine Pesos.
70
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 35 – NOTES (“OBLIGACIONES NEGOCIABLES”) (CONTINUED)
(1)
On January 28, 2011, the Company issued and placed its Class XIII Notes for a total amount of US$ 200,000. Principal will be
paid in three annual installments. Such installments will be paid on January, 28, 2015, January 28, 2016 and January 28,
2017, respectively.
(2) On June 14, 2011, the Company issued and placed its Class XIV Notes for a total amount of AR$ 99,852. This issuance was
carried out in two series: Series I for a total amount of AR$ 20,000 and Series II for a total amount of AR$ 79,852. Series I
principal was settled in one installment upon maturity, whereas Series II principal was settled in three quarterly installments.
(3) On December 19, 2011, the Company issued and placed its Class XVI Notes for a total amount of US$ 35,109, which, as
specified by the issuance conditions, were converted into AR$ 150,347. This issuance was carried out in two series: Series I
for US$ 21,162 and Series II for US$ 13,947. The principal of both Series was settled upon maturity.
(4) On April 24, 2012, the Company issued and placed its Class XVII Notes for a total amount of AR$ 200,000. This issuance was
carried out in two series: Series I for a total amount of AR$ 34,610 and Series II for a total amount of AR$ 165,390. Principal
of both Series was settled upon maturity.
(5) On August 7, 2012, the Company issued and placed its Class XVIII Notes for a total amount of AR$ 148,736. This issuance
was carried out in two series: Series I for a total amount of AR$ 46,421 and Series II for a total amount of AR$ 102,315.
Series I principal was settled upon maturity, whereas Series II principal will be also settled in one installment upon maturity.
(6) On October 30, 2012, the Company issued and placed its Class XIX Notes for a total amount of AR$ 165,325. This issuance
was carried out in two series: Series I for a total amount of AR$ 52,980 and Series II for a total amount of AR$ 112,345. Series
I principal was settled upon maturity, whereas Series II principal will be also settled in one installment upon maturity.
(7) On February 7, 2013, the Company issued and placed its Class XX Notes for a total amount of AR$ 243,524. This issuance
was carried out in two series: Series I for a total amount of AR$ 35,388 and Series II for a total amount of AR$ 208,136. Series
I principal was settled upon maturity, whereas Series II principal will be also settled in one installment upon maturity.
(8) On May 17, 2013, the Company issued and placed its Class XXI Notes for a total amount of AR$ 201,800 (Series II). Principal
will be settled in one installment upon maturity. The Company decided not to issue Series I.
(9) On August 9, 2013, the Company issued and placed its Class XXII Notes for a total amount of AR$ 156,043. This issuance
was carried out in two series: Series I for AR$ 42,023 and Series II for AR$ 114,020. The principal of both series will be settled
in one installment upon maturity.
(10) On December 4, 2013, the Company issued and placed its Class XXIII Notes for a total amount of AR$ 187,174. This
issuance was carried out in two series: Series I for AR$ 35,000 and Series II for AR$ 152,174. The principal of both series will
be settled in one installment upon maturity.
On December 18, 2013, the Company’s Board of Directors approved the issuance of Class XXIV Notes
(“Obligaciones Negociables”) under the Global Program for the Issuance of Short-, Mid- and/or LongTerm Notes (“Obligaciones Negociables”) for a maximum outstanding amount of up to US$ 650,000 (or
its equivalent in other currencies). The notes to be issued will be called Class XXIV Notes (“Obligaciones
Negociables”), in two series, Series I and II. The total global face value of Class XXIV Notes
(“Obligaciones Negociables”) may reach the maximum amount of up to AR$ 250,000.
Covenants Undertaken:
Furthermore, it is worth noting that in the Price Supplement of Class XIII Notes, the Company has
undertaken the following covenants, among others, with regard to the holders of such Notes:
(i)
The Company will not incur debt, unless at the date of incurring debt (a) the Total Liabilities to
Shareholders’ Equity Ratio does not exceed 6 to 1, (b) the Indebtedness to Shareholders’ Equity
Ratio does not exceed 4:1, and (c) after having incurred such debt, the Company’s shareholders’
equity is higher than AR$ 300,000.
(ii)
The Company will not levy any lien or else allow any lien to be levied, except for the permitted liens
(liens existing at the time of the issuance of Notes, their renewals and those liens set forth by the
law) with regard to all the other assets, when the total amount of the liens does not exceed 15% of
the Company's total assets for short-term debt and 10% of the Company’s total assets for long-term
debt.
(iii) The Company will not be able to dispose of its assets, unless: (a) it receives a consideration at
market value, (b) 75% of the consideration is in cash, (c) the proceeds of the sale are used within
365 days to (i) pay off debt, (ii) make investments in capital assets in a related company, a permitted
business or a related business, or else (iii) reinvest or purchase additional assets.
71
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 35 – NOTES (“OBLIGACIONES NEGOCIABLES”) (CONTINUED)
Covenants Undertaken (Continued):
In turn, in the Price Supplement of Class XVIII, XIX, XX, XXI, XXII and XXIII Notes, the Company has
undertaken the following covenant with regard to the holders of such Notes:
(i)
The Company will not levy any lien or else allow any lien to be levied, except for the permitted liens —
such liens existing at the date of the Price Supplement or those to be levied in the future with regard to
all the other assets—, when the total amount of the liens does not exceed 25% of the Company’s total
assets.
At the date of these financial statements, the Company has complied with the abovementioned covenants
undertaken.
NOTE 36 – FOREIGN CURRENCY HEDGE CONTRACTS
The Company has carried out hedging transactions by signing foreign currency hedge contracts to cover its
cash flows exposure arising from Class XIII and Class XVI, Series II, Notes, based on the following:
Counterparty
Hedge Amount as
of 12.31.2013 (In
Thousands of
Pesos)
Hedge Amount
(In Thousands
of U.S. dollars)
Hedge Amount
as of 12.31.2012
(In Thousands
of Pesos)
Expiration
Date of the
Contract
Banco de Galicia y Buenos Aires S.A.
1,000
-
4,994
01/31/2013
Banco de Galicia y Buenos Aires S.A.
5,000
-
24,971
01/31/2013
Banco de Galicia y Buenos Aires S.A.
5,000
-
24,971
01/31/2013
Banco de Galicia y Buenos Aires S.A.
12,000
-
59,931
01/31/2013
Banco de Galicia y Buenos Aires S.A.
4,000
-
19,977
01/31/2013
Banco de Galicia y Buenos Aires S.A.
10,000
-
49,942
01/31/2013
Banco de Galicia y Buenos Aires S.A.
8,000
-
39,954
01/31/2013
Banco de Galicia y Buenos Aires S.A.
10,000
-
49,942
01/31/2013
Banco de Galicia y Buenos Aires S.A.
5,000
-
24,971
01/31/2013
Compañía Financiera Argentina S.A.
7,000
-
34,960
01/31/2013
Banco de Galicia y Buenos Aires S.A.
10,000
-
49,968
02/01/2013
Banco de Galicia y Buenos Aires S.A.
10,000
-
50,663
02/28/2013
Banco de Galicia y Buenos Aires S.A.
10,000
-
50,663
02/28/2013
Banco de Galicia y Buenos Aires S.A.
5,000
-
25,331
02/28/2013
Banco de Galicia y Buenos Aires S.A.
5,000
-
25,331
02/28/2013
Banco de Galicia y Buenos Aires S.A.
5,000
-
25,331
02/28/2013
Banco de Galicia y Buenos Aires S.A.
10,000
-
50,663
02/28/2013
Compañía Financiera Argentina S.A.
3,000
-
15,198
02/28/2013
Banco de Galicia y Buenos Aires S.A.
5,000
-
25,693
03/27/2013
Banco de Galicia y Buenos Aires S.A.
5,000
-
25,693
03/27/2013
Compañía Financiera Argentina S.A.
15,000
-
77,077
03/27/2013
72
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 36 - FOREIGN CURRENCY HEDGE CONTRACTS (CONTINUED)
Counterparty
Hedge Amount
(In Thousands
of U.S. dollars)
Hedge Amount
as of 12.31.2013
(In Thousands of
Pesos)
Hedge Amount
as of 12.31.2012
(In Thousands of
Pesos)
Expiration
Date of the
Contract
Banco de Galicia y Buenos Aires S.A.
5,000
-
25,693
03/27/2013
Compañía Financiera Argentina S.A.
10,000
-
51,385
03/27/2013
Banco de Galicia y Buenos Aires S.A.
5,000
-
25,693
03/27/2013
Banco de Galicia y Buenos Aires S.A.
10,000
-
51,385
03/27/2013
Banco de Galicia y Buenos Aires S.A.
10,000
-
51,385
03/27/2013
Banco de Galicia y Buenos Aires S.A.
5,000
-
25,693
03/27/2013
Banco de Galicia y Buenos Aires S.A.
6,000
-
30,831
03/27/2013
Banco de Galicia y Buenos Aires S.A.
5,000
-
26,133
04/30/2013
Banco de Galicia y Buenos Aires S.A.
5,000
-
26,133
04/30/2013
Banco de Galicia y Buenos Aires S.A.
5,800
37,836
-
01/02/2014
Banco de Galicia y Buenos Aires S.A.
10,000
65,235
-
01/02/2014
Banco de Galicia y Buenos Aires S.A.
10,000
65,235
-
01/02/2014
Banco de Galicia y Buenos Aires S.A.
3,000
19,570
-
01/02/2014
Banco de Galicia y Buenos Aires S.A.
3,000
19,570
-
01/02/2014
Banco de Galicia y Buenos Aires S.A.
4,200
27,399
-
01/02/2014
Banco de Galicia y Buenos Aires S.A.
20,000
136,985
-
01/31/2014
Banco de Galicia y Buenos Aires S.A.
8,000
54,794
-
01/31/2014
Compañía Financiera Argentina S.A.
17,200
117,807
-
01/31/2014
Compañía Financiera Argentina S.A.
10,000
68,493
-
01/31/2014
Banco de Galicia y Buenos Aires S.A.
10,000
68,493
-
01/31/2014
Banco de Galicia y Buenos Aires S.A.
3,000
20,548
-
01/31/2014
Compañía Financiera Argentina S.A.
42,400
290,408
-
01/31/2014
Compañía Financiera Argentina S.A.
14,300
101,530
-
02/28/2014
200
1,420
-
02/28/2014
Banco de Galicia y Buenos Aires S.A.
Banco de Galicia y Buenos Aires S.A.
1,500
10,650
-
02/28/2014
Banco de Galicia y Buenos Aires S.A.
15,000
109,060
-
03/31/2014
Banco de Galicia y Buenos Aires S.A.
20,000
145,413
-
03/31/2014
Banco de Galicia y Buenos Aires S.A.
10,000
74,450
-
04/30/2014
Banco de Galicia y Buenos Aires S.A.
4,000
30,939
-
05/30/2014
1,465,835
1,070,555
TOTAL
73
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 36 - FOREIGN CURRENCY HEDGE CONTRACTS (CONTINUED)
In the contracts signed, the parties agree that the transaction will be settled without physical delivery of the
underlying currency. This means that these contracts shall be performed through the difference between
the spot exchange rate effective on the settlement date and the agreed forward exchange-rate, based on
the following: (i) if on the settlement date the spot exchange rate for the settlement is higher than the
agreed forward exchange rate, the counterparty undertakes to pay the Company an amount equivalent to
the above-mentioned exchange-rate difference, multiplied by the amount of foreign currency hedged, (ii) if
on the settlement date the spot exchange rate for the settlement is lower than the agreed forward exchange
rate, the Company undertakes to pay the counterparty an amount equivalent to the above-mentioned
exchange-rate difference, multiplied by the amount of foreign currency hedged; and (iii) if on the settlement
date the spot exchange rate for the settlement is the same as the agreed forward exchange rate, the
parties will not be entitled to make any claim whatsoever to each other.
As of December 31, 2013, the Company has recorded at present values AR$ 115,602 in assets and
AR$135,943 in the Statement of Income for the effective contracts during the fiscal year to reflect changes
in the accounting measurement accrued to date.
As of December 31, 2012, the Company had recorded at present values AR$ 1,631 in liabilities and
AR$958 in assets, and AR$4,817 in the Statement of Income for the effective contracts during the fiscal
year to reflect changes in the accounting measurement accrued to date.
Memorandum Accounts:
The Company recorded AR$ 1,465,837 and AR$ 1,070,555 in memorandum accounts as of December 31,
2013 and December 31, 2012, respectively, corresponding to the face values pesified to date for the
abovementioned foreign currency hedging transactions agreed.
74
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 37 – CASH AND CASH EQUIVALENTS – STATEMENT OF CASH FLOWS
12.31.2013
12.31.2012
In Thousands of AR$
234,487
124,628
620,461
289,170
854,948
413,798
Cash
Placements of Cash-equivalent Funds
Total
NOTE 38 – ADJUSTMENTS TO CALCULATE THE NET CASH FLOW AND CASH EQUIVALENTS
FROM OPERATING ACTIVITIES
Provision for Credit Losses
Provision for Contingencies, Net of Recoveries
Provision for Compensation and Social Security Charges
Provision for Fees Payable to Directors and Members of the
Supervisory Committee
Unsettled (Income)/Loss Due to Change in Net Fair Value Adjustments
on Derivative and Hedging Activities
Foreign Exchange Loss
Loss from Investments in Associates and Other Companies
Net Loss as of 03.31.12 – Tarjeta Mira S.A.
Decrease in Property, Plant & Equipment
Decrease in Intangible Assets
Depreciation of Property, Plant and Equipment
Amortization of Intangible Assets
Total
12.31.2013
12.31.2012
In Thousands of AR$
542,111
413,070
7,597
(9,792)
106,724
81,851
11,183
8,800
(115,602)
328,593
15,365
4,090
48,188
24,527
14,419
987,195
673
136,729
8,939
419
25
20,943
10,231
671,888
NOTE 39 – CHANGES IN OPERATING ASSETS
12.31.2013
12.31.2012
In Thousands of AR$
(2,906,404)
(2,147,375)
(25,760)
(14,961)
(2,932,164)
(2,162,336)
Increase in Receivables from Services
Increase in Other Receivables
Total
75
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 40 – CHANGES IN OPERATING LIABILITIES
Decrease in Compensation and Social Security Charges
Increase in Tax Charges
Income Tax Payments
Decrease in Other Liabilities
Contingency Payments
Total
12.31.2013
12.31.2012
In Thousands of AR$
(71,890)
(30,808)
34,970
35,740
(334,325)
(312,183)
(11,802)
(5,330)
(107)
(383,154)
(312,581)
NOTE 41 – CHANGES IN THE CORPORATE STRUCTURE
During FY 2012, Dusner S.A. and Fedler S.A. transferred 480 shares, representing 20% of the capital stock
of Tarjeta Naranja S.A. to its controlling company, Tarjetas Regionales S.A. In turn, Tarjetas Regionales
S.A. transferred 24 shares, representing 1% of the capital stock of Tarjeta Naranja S.A., to Tarjetas
Cuyanas S.A. Consequently, Tarjetas Regionales’ interest in the Company’s shareholders’ equity
increased to 99%.
On March 8, 2012, the merger of Tarjeta Naranja S.A. (merging company) with Tarjeta Mira S.A. (merged
company), along with the merger plan, were approved. Such merger plan established that the merger
would be effective as from April 1, 2012.
On March 30, 2012, Tarjetas Regionales S.A. transferred to Tarjeta Naranja S.A. 32,333 shares,
representing 1% of the capital stock of Tarjetas Cuyanas S.A.
In June 2012, Tarjeta Naranja Dominicana S.A.’s shareholders decided to sell Banco Múltiple León S.A.
(holder of the remaining 50% interest in Tarjeta Naranja Dominicana S.A.’s capital stock) Tarjeta Naranja
Dominicana S.A.’s right related to customers and to start the liquidation of the company.
In September 2013, Tarjeta Naranja Dominicana S.A.’s shareholders decided to dissolve and finally
liquidate such company.
76
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 42 – BALANCES AND TRANSACTIONS WITH COMPANIES AND RELATED PARTIES
Tarjeta Naranja S.A. is controlled by Tarjetas Regionales S.A., with legal domicile at Belgrano 1415,
1st floor, City of Mendoza, which holds 2,376 shares, representing a 99% interest in the capital stock.
Banco de Galicia y Buenos Aires S.A., with legal domicile at Tte. Gral. Juan D. Perón 407,
Autonomous City of Buenos Aires, has a 57.97% interest in Tarjetas Regionales S.A., while Galicia
(Cayman) Ltd. —entity controlled by Banco de Galicia y Buenos Aires S.A.— holds a 19.03% interest.
In turn, Banco de Galicia y Buenos Aires S.A. is controlled by Grupo Financiero Galicia S.A., with
legal domicile at Tte. Gral. Juan D. Perón 456, 2nd floor, Autonomous City of Buenos Aires, with a
95.02% interest.
Tarjetas Cuyanas S.A. is a corporation incorporated in Argentina, with domicile at Belgrano 1415, City
of Mendoza, Argentina, which holds 24 shares, representing 1% of the Company's capital stock.
The following are Tarjeta Naranja S.A.’s balances with related companies as of December 31, 2013:
Companies under Section 33 of Law No. 19550
Banco de Galicia
y Buenos Aires
S.A.
Tarjetas
Regionales S.A.
Total
In Thousands of AR$
ASSETS
Cash and Cash Equivalents
Other Receivables
273,957
107,748
-
273,957
107,748
Total Current Assets as of 12.31.2013
Total Assets as of 12.31.2013
LIABILITIES
Accounts Payable
Bank and Financial Loans
381,705
381,705
-
381,705
381,705
34,826
162,266
57,545
34,826
219,811
Total Current Liabilities as of 12.31.2013
Bank and Financial Loans
197,092
125,978
57,545
30,000
254,637
155,978
Total Non-current Liabilities as of
12.31.2013
125,978
30,000
155,978
Total Liabilities as of 12.31.2013
323,070
87,545
410,615
77
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 42 – BALANCES AND TRANSACTIONS WITH COMPANIES AND RELATED PARTIES (CONTINUED)
The following are Tarjeta Naranja S.A.’s balances with other related parties as of December 31, 2013:
Other Related Parties
Cobranzas
Regionales
S.A.
TN Perú
S.A.C.
Galicia
Seguros S.A.
Procesadora
Regional
Tarjetas del
Mar S.A.
Compañía
Financiera
Argentina
S.A.
Parque Azul
S.R.L.
Total
In Thousands of AR$
ASSETS
Cash and Cash Equivalents
Other Receivables
Total Current Assets as of 12.31.13
Total Assets as of 12.31.2013
LIABILITIES
Accounts Payable
Total Current Liabilities as of 12.31.13
Total Liabilities as of 12.31.2013
5,925
5,925
5,925
2
2
2
9,278
9,278
9,278
-
24
24
24
-
130,389
53,689
184,078
184,078
130,389
68,918
199,307
199,307
-
3,423
3,423
3,423
-
206
206
206
-
3,222
3,222
3,222
-
6,851
6,851
6,851
78
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 42 – BALANCES AND TRANSACTIONS WITH COMPANIES AND RELATED PARTIES
(CONTINUED)
The following are the transactions carried out by Tarjeta Naranja S.A. with related companies during
the fiscal year ended December 31, 2013:
Companies under Section 33 of Law No.
19550
Banco de Galicia y Bs.
As. S.A.
Tarjetas Regionales
S.A.
In Thousands of AR$
REVENUES
Revenues from Services
Interest on Time Deposits and Interest-bearing Checking
Accounts
Income due to Change in Net Fair Value Adjustments on
Derivative and Hedging Activities
Total as of 12.31.2013
EXPENSES
Rentals
Bank Interest
Bank Expenses
Collection Expenses
Total as of 12.31.2013
79
397,384
-
17,198
-
84,033
498,615
-
431
48,477
9,788
3,382
62,078
18,624
18,624
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 42 – BALANCES AND TRANSACTIONS WITH COMPANIES AND RELATED PARTIES (CONTINUED)
The following are the transactions carried out by Tarjeta Naranja S.A. with other related parties during the fiscal year ended December 31, 2013:
Other Related Parties
Cobranzas
Regionales
S.A.
Galicia
Seguros
S.A.
Parque
Azul
S.R.L.
Key
Management
Staff
Golden
S.A.
Colores
S.A.
Compañía
Financiera
Argentina
S.A.
Tarjetas
del Mar
S.A.
TN Perú
S.A.C.
Procesadora
Regional
S.A.
In Thousands of AR$
REVENUES
Revenues from Services
Revenues from Financing
Interest on Time Deposits and Interestbearing Checking Accounts
Income due to Change in Net Fair Value
Adjustments on Derivative and Hedging
Activities
Total as of 12.31.2013
EXPENSES
Expenses from Services
Rentals
Professional Fees
Salaries
Total as of 12.31.2013
319
-
123,261
-
924
767
-
-
-
-
-
5,949
-
-
-
-
-
-
-
-
5,399
-
-
-
319
123,261
1,691
-
-
-
51,910
57,309
-
5,949
-
43,941
43,941
-
-
5,818
5,818
997
997
296
296
-
287
287
-
2,571
2,571
80
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 42 – BALANCES AND TRANSACTIONS WITH COMPANIES AND RELATED PARTIES
(CONTINUED)
The following are Tarjeta Naranja S.A.’s balances with related companies as of December 31, 2012:
Companies under Section 33 of Law No. 19550
Banco de Galicia y
Buenos Aires S.A.
Tarjetas Regionales
S.A.
Total
In Thousands of AR$
ASSETS
Cash and Cash Equivalents
Other Receivables
Total Current Assets as of 12.31.2012
Total Assets as of 12.31.2012
LIABILITIES
Accounts Payable
Bank and Financial Loans
Total Current Liabilities as of 12.31.2012
Bank and Financial Loans
Total Non-current Liabilities as of
12.31.2012
Total Liabilities as of 12.31.2012
82,484
17,534
100,018
100,018
-
82,484
17,534
100,018
100,018
17,681
112,987
130,668
57,502
1,673
1,673
55,000
17,681
114,660
132,341
112,502
57,502
188,170
55,000
56,673
112,502
244,843
81
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 42 – BALANCES AND TRANSACTIONS WITH COMPANIES AND RELATED PARTIES (CONTINUED)
The following are Tarjeta Naranja S.A.’s balances with other related parties as of December 31, 2012:
Other Related Parties
Cobranzas
Regionales
S.A.
TN Perú
S.A.C.
Procesadora
Regional S.A.
Tarjetas
del Mar
S.A.
Parque
Azul S.R.L.
Compañía
Financiera
Argentina
S.A.
Tarjeta
Naranja
Dominicana
S.A. (in
liquidation)
Total
In Thousands of AR$
ASSETS
Cash and Cash Equivalents
Other Receivables
Total Current Assets as of 12.31.2012
Total Assets as of 12.31.2012
LIABILITIES
Accounts Payable
Bank and Financial Loans
Other Liabilities
Total Current Liabilities as of
12.31.2012
Total Liabilities as of 12.31.2012
999
999
999
-
-
31
31
31
-
40,366
335
40,701
40,701
413
413
413
40,366
1,778
42,144
42,144
-
3,871
906
392
-
1,216
1,954
-
67
-
-
6,217
67
2,122
-
4,777
4,777
392
392
1,216
1,216
1,954
1,954
67
67
-
8,406
8,406
82
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 42 – BALANCES AND TRANSACTIONS WITH COMPANIES AND RELATED PARTIES
(CONTINUED)
The following are the transactions carried out by Tarjeta Naranja S.A. with related companies during the
fiscal year ended December 31, 2012:
Companies under Section 33 of Law No. 19550
Banco de Galicia y Bs.
Tarjetas Regionales
As. S.A.
S.A.
In Thousands of AR$
REVENUES
Revenues from Services
Interest on Time Deposits and Interest-bearing Checking Accounts
Total as of 12.31.2012
296,445
-
11,241
-
307,686
-
EXPENSES
Rentals
337
-
24,329
4,718
Bank Expenses
4,293
-
Loss due to Change in Net Fair Value Adjustments on Derivative
and Hedging Activities
4,440
-
Collection Expenses
1,946
-
35,345
4,718
Bank Interest
Total as of 12.31.2012
83
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 42 – BALANCES AND TRANSACTIONS WITH COMPANIES AND RELATED PARTIES (CONTINUED)
The following are the transactions carried out by Tarjeta Naranja S.A. with other related parties during the fiscal year ended December
31, 2012:
Other Related Parties
Cobranzas
Regionales
S.A.
Galicia Seguros
S.A.
Parque
Azul
S.R.L.
Key
Management
Staff
Golden
S.A.
Colores
S.A.
Compañía
Financiera
Argentina S.A.
Tarjeta Naranja
Dominicana
S.A. (in
liquidation)
654
-
-
Procesadora
Regional S.A.
In Thousands of AR$
REVENUES
Revenues from Services
Revenues from Financing
Interest on Time Deposits and
Interest-bearing Checking
Accounts
Total as of 12.31.12
EXPENSES
Expenses from Services
Rentals
Professional Fees
Loss due to Change in Net Fair
Value Adjustments on Derivative
and Hedging Activities
Salaries
Total as of 12.31.12
73
-
30,957
-
668
474
-
-
-
-
-
-
-
-
-
-
6,862
-
-
73
30,957
1,142
-
-
-
6,862
654
-
33,600
-
-
-
1,000
-
302
-
-
-
2,916
-
-
-
-
-
-
-
77
-
-
-
-
-
4,764
-
-
-
-
-
33,600
-
-
4,764
1,000
302
77
-
2,916
84
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 43 - RESTRICTED ASSETS
Liens in Force
As of December 31, 2013 and 2012, liens for a total amount of AR$ 572 and AR$ 596, respectively, have
been levied on funds deposited in checking accounts opened by the Company at several financial
institutions. Since the appropriate defenses have been filed during such legal proceedings to safeguard the
Company’s interests, the seized funds have been included in these financial statements under “Other
Receivables”.
Furthermore, as of December 31, 2013 and 2012, the Company has paid AR$ 350 as guarantees
regarding certain tax issues. Since: i) these funds will not be available for the Company until the legal
actions requiring said guarantees are finally settled, and ii) the Company’s management has filed all the
defense actions granted by applicable laws to safeguard the Company's interests, these funds have been
included in these financial statements under "Other Receivables".
Guaranty in respect of Bank Loans in Force
Tarjeta Naranja S.A. has guaranteed through the Company's collection accounts the repayment of the loan
borrowed from Banco Supervielle S.A. dated February 1, 2013. Such guarantee establishes that the funds
held in the Company’s collection accounts must be allocated in a certain fixed order, in the first place, to
the payment of principal and interest due under the relevant loans, on the applicable payment dates. Said
procedure will remain in force until the abovementioned loan is repaid in full. As of December 31, 2013, the
outstanding principal amount corresponding to the loan guaranteed as explained above amounts to AR$
20,000. The outstanding principal amount as of December 31, 2012 corresponding to the loans guaranteed
as explained above amounted to AR$ 73,700.
On the other hand, there are other restrictions, as described in Note 33 above, for loan agreements entered
into with Banco Supervielle S.A. and the Syndicate of Banks, and such restrictions indicated in Note 35
above, for Class XIII, XVIII, XIX, XX, XXI, XXII and XXIII Notes (“Obligaciones Negociables”).
Security Deposits
As of December 31, 2013 and 2012, the Company has paid AR$ 1,993 and AR$ 1,491, respectively, for
security related to certain real property lease agreements. These funds have been included in these
financial statements under "Other Receivables".
Restriction on the Distribution of Dividends
The Company’s Ordinary and Extraordinary Shareholders’ Meeting held on March 16, 2006 resolved to
define the following policy for the distribution of dividends: i) to keep under Undistributed Profits, those
retained earnings corresponding to fiscal years prior to 2005 and, therefore, not to distribute them as
dividends, and ii) to set the maximum limit for the distribution of dividends at 25% of the realized and liquid
profits of each fiscal year as from fiscal year 2005. These restrictions shall remain in force while the
Company's shareholders’ equity remain below AR$ 300,000. Thus, the policy for the distribution of
dividends approved by the Company’s Board of Directors at its meeting held on January 4, 2006, has been
ratified.
85
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 43 - RESTRICTED ASSETS (Continued)
Restriction on the Distribution of Dividends (Continued)
Furthermore, in the Price Supplement of Class XIII Notes, the Company agreed not to distribute dividends:
i) that exceed 50% of the Company’s net income accrued since January 1, 2011 plus the net income
accrued during the fiscal year ended December 31, 2010, and ii) when (a) the Total Liabilities to
Shareholders’ Equity Ratio does not exceed 6 to 1, (b) the Indebtedness to Shareholders’ Equity Ratio
does not exceed 4:1.
NOTE 44 – TARJETA NARANJA S.A.’S INVESTMENTS ABROAD
Republic of Peru:
On July 6, 2011, the Company purchased 240 shares of Tarjeta Naranja Perú S.A.C., what represents a
24% stake in this company.
Tarjeta Naranja Perú is a company duly incorporated under the laws of Peru, which sole purpose is to
develop the “Tarjeta Naranja” business model for the promotion and business and operational
management of a credit card to be issued and marketed in Peru by Banco de Crédito del Perú. This credit
card will be targeted at mass consumption segments.
Tarjeta Naranja Perú S.A.C. started its business activities in the Republic of Peru in September 2011. For
that purpose, Tarjeta Naranja S.A. made a first capital contribution on September 14, 2011, for the amount
of AR$ 1,288; and a second capital contribution of AR$ 5,784 on September 16, 2011.
On December 15, 2011, Tarjeta Naranja Perú S.A.C.’s shareholders held a General Shareholders’ Meeting
where the following decisions were made: i) capital increase through capitalization of other receivables in
favor of the company, and ii) capital increase through new contributions. For that purpose, Tarjeta Naranja
S.A. made a capital contribution amounting to AR$ 3,031 in December 2011.
On May 3, 2012, Tarjeta Naranja Perú S.A.C.’s Board of Directors, in exercising the powers granted by
Tarjeta Naranja Perú S.A.C.’s General Shareholders’ Meeting held on December 15, 2011, and by virtue of
what was decided therein, agreed on a new capital increase and the capitalization of other receivables in
favor of the company in the amount of AR$ 6,975.
On September 13, 2012, Tarjeta Naranja Perú S.A.C.’s shareholders held a General Shareholders’
Meeting, whereat they agreed to increase capital and to capitalize other receivables in favor of the
company in the amount of AR$ 10,579.
On May 6, 2013, Tarjeta Naranja Perú S.A.C.’s General Shareholders’ Meeting agreed to increase capital
again and to capitalize other receivables in favor of the company in the amount of AR$ 8,919.
On September 13, 2013, Tarjeta Naranja Perú S.A.C.’s Board of Directors, in exercising the powers
granted by Tarjeta Naranja Perú S.A.C.’s General Shareholders’ Meeting held on May 6, 2013, and by
virtue of what was decided therein, agreed on a new capital increase and the capitalization of other
receivables in favor of the company in the amount of AR$ 9,070.
At the date of these financial statements, the capital contributions described above had been paid in.
86
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 45 – INFORMATION ABOUT EXPENSES AND THEIR ALLOCATION UNDER SECTION 64
SUBSECTION B) OF LAW 19550
Totals as of
12.31.2013
Items
Administrative
Expenses
Marketing
Expenses
Totals as of
12.31.2012
In Thousands of AR$
Directors and Supervisory Committee Members' Fees
11,183
11,183
-
8,800
Bonuses for the Staff
98,929
30,668
68,261
77,493
Compensation and Social Security Charges
833,439
219,757
613,682
661,798
Taxes and Rates
422,676
108,780
313,896
285,077
Entertainment and Travel Expenses and Per Diem
26,722
7,489
19,233
29,378
Maintenance of Equipment and Real Property
39,155
39,155
-
22,366
Depreciation of Property, Plant and Equipment
24,527
17,169
7,358
20,943
Amortization of Intangible Assets
14,419
14,419
-
10,231
Rentals
51,044
3,421
47,623
36,747
Stationery and Office Supplies
16,803
2,635
14,168
12,456
Opening of Accounts
16,768
-
16,768
15,908
105,578
-
105,578
106,428
Publicity and Advertising
Donations
Electricity, Natural Gas and Communications
Third Parties’ Fees
1,276
1,276
-
898
33,334
12,892
20,442
26,987
118,126
64,112
54,014
49,982
Insurance and Security Services
63,985
1,885
62,100
40,657
Bank and Financial Expenses
15,972
15,972
-
8,712
Regular Mail Services
Expenses for Commercial Reports and Procedures for
the Collection of Amounts in Arrears
25,358
6,465
18,893
18,144
39,991
39,991
-
30,471
Collection Expenses
72,858
72,858
-
51,199
142,583
56,913
85,670
100,434
46,298
46,298
-
22,317
General Expenses
Convivimos Magazine-Related Expenses
Printing and Distribution of Statements and Payments
to Merchants (“Comercios Amigos”)
111,457
-
111,457
83,946
Cleaning Expenses
12,809
1,647
11,162
9,532
Special Promotions
10,993
-
10,993
8,723
Expenses from Call Center Services
69,409
68,308
1,101
52,935
Text Messaging Services
17,827
23
17,804
14,486
2,443,519
843,316
1,600,203
589,324
1,217,724
Totals as of 12.31.2013
(1)
Totals as of 12.31.2012
(1)
1,807,048
(1) Total marketing and administrative expenses correspond with the amount of the lines “Expenses from Services” and “Total
Operating Expenses” in the Statement of Income.
87
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 46 – FOREIGN CURRENCY ASSETS AND LIABILITIES
Items
Amount and Type
of Foreign
Currency (in
thousands of U.S.
dollars)
Current
Exchange
Rate
Amount in
Argentine
Currency as
of 12.31.13
Amount in
Argentine
Currency as
of 12.31.12
In Thousands of AR$
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents
Deposits in Argentina
US$
297
6.485
1,925
1,131
Deposits Abroad
US$
422
6.485
2,737
16,669
Investment in Notes (“Obligaciones Negociables”)
US$
5,887
6.485
38,174
6,268
Investment in Government Securities
US$
-
-
15,195
US$
-
-
2,210
US$
985
6,386
1,712
49,222
43,185
-
28,611
691
521
Investments
Receivables from Services
Other Receivables
Sundry Receivables
6.485
Total Current Assets
NON-CURRENT ASSETS
Investments
Investment in Notes (“Obligaciones Negociables”)
US$
-
US$
107
Other Receivables
Security Deposits
6.485
Total Non-Current Assets
Total Assets
691
29,132
49,913
72,317
LIABILITIES
CURRENT LIABILITIES
Accounts Payable
Merchants (“Comercios Amigos”)
US$
37
6.525
242
283
Collections on Account of Third Parties
US$
445
6.525
2,903
148
US$
7,175
6.525
46,820
103,333
49,965
103,764
1,300,196
976,833
Total Non-Current Liabilities
1,300,196
976,833
Total Liabilities
1,350,161
1,080,597
Bank and Financial Loans
Notes (“Obligaciones Negociables”)
Total Current Liabilities
NON-CURRENT LIABILITIES
Bank and Financial Loans
Notes (“Obligaciones Negociables”)
US$
199,264
US$: United States dollars.
88
6.525
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2013 and 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 47 – PORTFOLIO ASSIGNMENT
On October 31, 2013, Tarjeta Naranja S.A. (“the Company”), in its capacity as Assignor entered into a
Credit Portfolio Assignment agreement with Cohen S.A. Sociedad de Bolsa, as Assignee, and
Crediticia S.A. and Gorvix S.A. as original subscribers and holders, whereby the Company assigned
and transferred to the Assignee its portfolio for a total amount of AR$ 11,079 at a price amounting to
AR$ 946.
89
90
Tarjeta Naranja S.A.
Additional Information to the Notes to the Financial Statements
As of December 31, 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
1. LEGAL SYSTEMS
There are no significant or specific legal systems entailing contingent expiration or
resurgence of benefits envisaged by those regulations.
2. COMPANY ACTIVITIES
Indicators of the Company’s activities are described in the Summary of Activity.
3. CLASSIFICATION OF BALANCES OF RECEIVABLES FROM SERVICES, OTHER
RECEIVABLES AND DEFERRED INCOME TAX ASSETS BY MATURITY DATE
a) Past-due Receivables from Services and Other Receivables as of December 31, 2013
Receivables from
Other
Services
Receivables
In Thousands of AR$
42,284
342,808
182,869
162,749
231,171
19
961,881
19
(578,411)
383,470
19
Before 12.31.12
Between 12.31.12 and 06.30.13
Between 06.30.13 and 09.30.13
Between 09.30.13 and 11.30.13
Between 11.30.13 and 12.31.13
Subtotal
Allowance for Credit Losses (1)
Total Past-due Receivables
(1) The difference of AR$ 137,141 with respect to the total allowance for credit losses for AR$ 715,552
corresponds to a global allowance for the (undue) performing commercial portfolio.
b) Other Receivables and Deferred Income Tax Assets with No Fixed Term as of
December 31, 2013
No Fixed Term
(1)
Other
Deferred Income
Receivables
Tax Assets
In Thousands of AR$
(1)
2,683
177,829
Other Receivables with No Fixed Term: AR$ 690 are disclosed as other current receivables and AR$ 1,993
are disclosed as other non-current receivables in the statement of financial position.
90
Tarjeta Naranja S.A.
Additional Information to the Notes to the Financial Statements
As of December 31, 2013 (Continued)
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
a) Receivables from Services and Other Receivables to Become Due as of December 31,
2013
Receivables
Other
from Services Receivables
In Thousands of AR$
Current
03.31.14
06.30.14
09.30.14
12.31.14
Non-current
5,650,732
1,801,187
921,288
396,964
218,699
3,601
3,601
3,601
144,587
109,945
4. CLASSIFICATION OF DEBT BALANCES BY MATURITY DATE
a) Past-due Debts as of December 31, 2013
There are no past-due debts as of December 31, 2013.
b) Debts with No Fixed Term as of December 31, 2013
As of December 31, 2013, we have AR$ 8 of qualification bonds received from Directors,
as required by Law No. 19550.
c) Debts to Become Due as of December 31, 2013
Compensation
and Social
Tax
Security
Charges
Charges
In Thousands of AR$
Bank and
Financial
Loans
Accounts
Payable
Provision
for Income
Tax
Other
Liabilities
Current
03.31.14
06.30.14
09.30.14
12.31.14
Non-current
4,996,282
202,725
68
84
429,574
416,764
425,554
341,769
163,611
37,076
-
145,188
-
65
-
897
9,711
-
-
1,771,458
-
-
-
-
91
Tarjeta Naranja S.A.
Additional Information to the Notes to the Financial Statements
As of December 31, 2013 (Continued)
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
5. CLASSIFICATION OF RECEIVABLES FROM SERVICES, OTHER RECEIVABLES AND
DEFERRED INCOME TAX ASSETS BY THEIR FINANCIAL EFFECTS
a) Receivables from Services, Other Receivables and Deferred Income Tax Assets in
Argentine Pesos and U.S. dollars
Receivables
from Services
Deferred
Income Tax
Assets
Other
Receivables
In Thousands of AR$
9,876,639
335,072
(715,552)
-
In Argentine Pesos
Allowance for Credit Losses AR$
In Foreign Currency
Allowance for Credit Losses US$
-
177,829
-
7,077
-
-
b) The balances of Receivables from Services, Other Receivables and Deferred Income
Tax Assets are not subject to any adjustment clause.
c) Interest-bearing and Non-interest bearing Receivables
Deferred
Income Tax
Assets
In Thousands of AR$
Receivables
from Services
Other
Receivables
Interest-bearing Balances
3,639,748
-
-
Non-interest Bearing Balances
6,236,891
342,149
177,829
6. CLASSIFICATION OF DEBTS BY THEIR FINANCIAL EFFECTS
a) Debts to Become Due in Argentine Pesos and U.S. dollars
Accounts
Payable
In Argentine
Pesos
In Foreign
Currency
Bank and
Financial
Loans
Compensation
Tax
and Social
Charges
Security Charges
In Thousands of AR$
Provision
Other
for Income
Liabilities
Tax
5,196,014
2,038,103
200,687
145,188
65
10,616
3,145
1,347,016
-
-
-
-
b) Debt balances are not subject to any adjustment clause.
92
Tarjeta Naranja S.A.
Additional Information to the Notes to the Financial Statements
As of December 31, 2013 (Continued)
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
c)
Interest-bearing and Non-interest bearing Debts
Bank and
Financial
Loans
Accounts
Payable
Compensation
and Social
Security Charges
Provision
Other
for Income
Liabilities
Tax
Tax
Charges
In Thousands of AR$
Interest-bearing
Balances
Non-interest
Bearing Balances
-
5,199,159
3,305,811
-
-
-
-
79,308
200,687
145,188
65
10,616
7. INVESTMENT IN COMPANIES
The Company holds a 5% interest in Cobranzas Regionales S.A., a 24% interest in Tarjeta
Naranja Perú S.A.C. and a 1% interest in Tarjetas Cuyanas S.A.
8. RECEIVABLES FROM OR LOANS GRANTED TO DIRECTORS AND SUPERVISORY
COMMITTEE MEMBERS
As of December 31, 2013, there are advances to directors and supervisory committee
members for AR$ 1,472, but there are no receivables from or loans granted to supervisory
committee members’ or directors' relatives up to the second grade of consanguinity, except
for the regular use of their credit cards.
9. INVENTORY
The Company does not have any inventories.
10. VALUATION OF INVENTORIES
The Company does not have any inventories.
11. TECHNICAL REVALUATION OF PROPERTY, PLANT AND EQUIPMENT
The Company does not have any property, plant and equipment that have been technically
revaluated.
93
Tarjeta Naranja S.A.
Additional Information to the Notes to the Financial Statements
As of December 31, 2013 (Continued)
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
12. OBSOLETE PROPERTY, PLANT AND EQUIPMENT
The Company does not have any obsolete property, plant and equipment bearing book
value.
13. INVESTMENT IN OTHER COMPANIES
There are no investments in companies in excess of the maximum value set forth by
Section 31 of the Argentine Commercial Companies Law.
14. RECOVERABLE VALUES
The recoverable value of property, plant and equipment is their value in use determined by
the possibility of absorbing depreciation charges with the income reported by the Company.
94
Tarjeta Naranja S.A.
Additional Information to the Notes to the Financial Statements
As of December 31, 2013 (Continued)
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
15. INSURANCE
The following are the insurance policies hired by the Company:
INSURANCE
POLICY No.
INSURANCE
COMPANY
830107
ACE SEGUROS
81263443
ZURICH
160013430
ZURICH
10288618
ZURICH
81263426
INSURANCE TYPE
EXPIRATION
DATE
INSURED AMOUNT
(In Thousands)
BOOK VALUE
Civil Liability Insurance
Homeowners Insurance
Policy
Salta 1659 Street
Rosario
05/22/2014
AR$ 20,000
04/15/2014
AR$ 600
04/15/2014
AR$ 10,000
-
04/15/2014
AR$ 250
-
ZURICH
Civil Liability Insurance
Insurance against Fire
(Merlo 2165, Castelar,
Province of Buenos
Aires).
Homeowners Insurance
Policy
Carlos Pellegrini 345
Rosario
04/15/2014
AR$ 600
-
582651
NACION
Motorbike Insurance
04/15/2014
AR$ 10,000
-
100184
Galicia Vida S.A.
-
-
10288618
ZURICH
Credit Insurance
Insurance against Fire
(Sebastian Costa 567,
Tres Arroyos, Province
of Buenos Aires).
AR$ 452
-
500605
Galicia Vida S.A.
-
-
210145096
Monthly
Renewal
04/15/2014
ZURICH
Group Life Insurance
required by Law
Surety – Security for
lease of real property
(Aguilar 2461 Piso 4
depto B)
Annual Renewal
AR$ 50
-
210135019
ZURICH
Administrative Surety –
Injunction Bond
Annual Renewal
AR$ 2,743
-
40000156
ZURICH
08/31/2014
AR$ 1,000
-
616640
Cauciones S.A.
Annual Renewal
AR$ 1,004
-
260011152
ZURICH
03/15/2014
US$ 25,000
-
81303622
ZURICH
Construction and
Assembly
Homeowners Insurance
Policy (Rosario) Gral
Juan M. Pueyrredon
346/348
04/05/2014
AR$ 850
-
184511
NACION
Operational All Risk
Policy / Theft
04/15/2014
AR$ 391,569
-
Personal Accident
Insurance (by employee)
Surety for the Finance
Ministry of the Province
of Córdoba
95
Monthly
Renewal
-
Tarjeta Naranja S.A.
Additional Information to the Notes to the Financial Statements
As of December 31, 2013 (Continued)
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
16. ALLOWANCES
Current allowances exceed 2% of shareholders’ equity. Under IFRS, for the calculation of
the allowance for credit losses, the Company analyzes the historical losses of its portfolio in
order to estimate the losses related to receivables from services incurred as of the date of
the financial statements, but that have not been individually identified, according to the
guidelines set out in IAS 39. In addition, the historical ratios are adjusted, if appropriate, to
include recent information that reflects the economic conditions as of the closing date of the
financial statements, trends of behavior in the industry, geographic or customer
concentrations in each portfolio segment and any other information that could affect the
estimation of the allowance for credit losses related to receivables from services. Several
factors may affect Management’s estimation of the allowance for credit losses, including the
volatility of the likelihood of loss, migrations and estimates of the severity of losses.
17. CONTINGENCIES
There are no significant contingent situations as of December 31, 2013, which have not
been given accounting recognition.
18. DIVIDENDS ON PREFERRED SHARES
There are no preferred shares.
19. RESTRICTIONS ON THE DISTRIBUTION OF UNDISTRIBUTED PROFITS
Restrictions on the distribution of undistributed profits are detailed in notes 33 and 43 to the
financial statements as of December 31, 2013.
96
Tarjeta Naranja S.A.
Summary of Activity
As of December 31, 2013
(Free Translation from the Original in Spanish for Publication in Argentina)
As of December 31, 2013, we have 2.51 million open accounts, thus achieving a 7.5% growth
when compared to the previous year. These customers made more than 118 million purchases
during the fiscal year, what represents an interannual 16% increase. If we measure the average
consumption per active account during such period, there was a 26% increase at current
values.
Also, these operating indicators were accompanied by Income before Income Tax amounting to
AR$ 755 million, whereas the shareholders’ equity exceeded AR$ 1,942 million.
Financial Aspects
Within the framework of the Global Program of Notes (“Obligaciones Negociables”), in February
the Company issued Class XX Notes for a total of AR$ 243.5 million, in May Class XXI Notes
for a total of AR$ 201.8 million, in August Class XXII Notes for a total of AR$ 156 million and in
December Class XXIII Notes for a total of AR$ 187.2 million.
In turn, during the fiscal year, loans and checking account overdrafts were taken for AR$ 670
million, and others were extended for AR$ 233 million.
Throughout the fiscal year, payments on account of amortization of principal and interest related
to Notes (“Obligaciones Negociables”), Bank Loans and Financial Leases were made for AR$
1,109.9 million and US$ 33.2 million.
Evolution
During the year, we added six stores to our branch network: Villa Crespo and Villa del Parque in
CABA; Perico in the Province of Jujuy; Puerto Iguazú in the Province of Misiones, and La
Calera and Mina Clavero in the Province of Córdoba. Furthermore, we continued making
progress in the construction of the new corporate building in the city of Córdoba.
Outlook
During 2014, we will work on broadening the customer’s experience, increasing efficiency in all
areas and achieving improvements in processes with the support of the LEAN methodology.
Adopting this system in several key processes is one of the most important steps taken in 2013
that will be continued in 2014. We will continue changing other processes and we will work to
ensure that the improvements achieved are maintained over time
Regarding economic aspects, we will continue adapting to the real macroeconomic situation,
which has a significant influence on the course of our operations.
97
Tarjeta Naranja S.A.
Summary of Activity
As of December 31, 2013 (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
TARJETA NARANJA S.A.’S COMPARATIVE STATISTICAL DATA FOR CURRENT AND
PREVIOUS FISCAL YEARS
(This information is not within the scope of the Independent Auditors’ Report)
TARJETA NARANJA S.A.’S USERS
12.31.13
Open Accounts (in Thousands)
Monthly Average Consumption by Active
Account (AR$ at Face Value)
12.31.12
12.31.11
2,506
2,331
2,073
1,176
932
761
TARJETA NARANJA S.A.’S STORES
12.31.13
12.31.12
12.31.11
Transactions within the Last Quarter (in
Thousands)
30,433
27,839
23,573
Average Fee
2.74%
2.70%
2.89%
NUMBER OF AUTHORIZED CREDIT CARDS FOR TARJETA NARANJA S.A. (in
Thousands)
12.31.13
12.31.12
12.31.11
Tarjeta Naranja
3,665
3,427
3,097
Visa
2,711
2,348
1,822
519
478
422
34
32
30
Mastercard
Amex
98
Tarjeta Naranja S.A.
Summary of Activity
As of December 31, 2013 (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
COMPARATIVE CHART OF FINANCIAL POSITION (in Thousands of AR$)
12.31.13
10,202,269
703,496
10,905,765
7,169,376
1,794,305
8,963,681
1,942,084
1,942,084
-
Current Assets
Non-current Assets
Assets
Current Liabilities
Non-current Liabilities
Liabilities
Shareholders’ Equity
Attributable to the Company's Shareholders
Attributable to the Non-controlling Interest
12.31.12
7,130,919
639,338
7,770,257
4,855,671
1,355,410
6,211,081
1,559,176
1,559,176
-
12.31.11
5,382,589
449,596
5,832,185
3,569,497
1,036,753
4,606,250
1,225,935
1,225,637
298
COMPARATIVE CHART OF STATEMENTS OF INCOME (in Thousands of AR$)
Total Operating Income
Total Operating Income, Net of Provision for
Credit Losses
Total Operating Expenses
Loss from Investments in Associates and
Other Companies
Income before Income Tax
Income Tax
Net Income for the Fiscal Year
Net Income for the Fiscal Year Attributable to
the Company’s Shareholders
Net Loss for the Fiscal Year Attributable to
the Non-Controlling Interest
Reserve for Translation Differences Related
to Foreign Operations
Comprehensive Income for the Fiscal Year
Comprehensive Income for the Fiscal Year
Attributable to the Company’s Shareholders
Comprehensive Loss for the Fiscal Year
Attributable to the Non-Controlling Interest
99
12.31.13
3,418,747
12.31.12
2,635,248
12.31.11
1,843,421
2,929,203
(2,159,127)
2,269,380
(1,597,029)
1,785,249
(1,055,894)
(15,365)
754,711
(264,998)
489,713
(8,939)
663,412
(231,803)
431,609
(2,604)
726,751
(252,083)
474,668
489,713
431,609
474,693
-
-
(25)
3,195
492,908
1,930
433,539
225
474,893
492,908
433,539
474,918
-
-
(25)
Tarjeta Naranja S.A.
Summary of Activity
As of December 31, 2013 (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
RATIOS
Liquidity
Indebtedness
Solvency
Tied-up capital
Profitability for the Fiscal Year
12.31.13
1.423
4.615
0.217
0.065
0.280
100
12.31.12
1.469
3.984
0.251
0.082
0.310
12.31.11
1.508
3.757
0.266
0.077
0.461
(Free Translation from the Original in Spanish for Publication in Argentina)
SUPERVISORY COMMITTEE’S REPORT
To the Directors and Shareholders of
Tarjeta Naranja S.A.
Legal Domicile: Sucre 151
CÓRDOBA-ARGENTINA
1.
In our capacity as members of the Supervisory Committee, we have examined Tarjeta
Naranja S.A.’s financial statements as of December 31, 2013, which include the Annual
Report, the Inventory, the Statement of Financial Position as of December 31, 2013, the
Statement of Income, the Statement of Other Comprehensive Income, and the Statements of
Changes in Shareholders’ Equity and Cash Flows for the fiscal year ended December 31,
2013, and explanatory and supplementary notes. The preparation and issuance of those
financial statements are the responsibility of the Company.
2. The Company’s Board of Directors is responsible for the preparation and fairly presentation of
these financial statements in accordance with International Financial Reporting Standards
(IFRS), adopted by the Argentine Federation of Professional Councils in Economic Sciences
(FACPCE) as professional accounting standards and added by the National Securities
Commission (C.N.V.) to its regulations, as approved by the International Accounting Standards
Board (IASB).
Our responsibility is to express a conclusion based on the examination we performed with
the scope specified in paragraph 3 below.
3. Our examination was carried out in accordance with standards applicable in Argentina to
members of the Supervisory Committee. These standards require our examination to be
performed in accordance with the professional auditing standards applicable in Argentina
and include verifying the fairness of the relevant information disclosed in the documents
examined and its consistency with the remaining information concerning corporate
decisions we have learnt about, as disclosed in minutes, and the conformity of those
decisions with the law and the bylaws insofar as concerns formal and documental aspects.
For purposes of our professional work, we have reviewed the work performed by the
external auditors of Tarjeta Naranja S.A., Price Waterhouse & Co. S.R.L., who issued their
audit report on February 17, 2014, without any qualified opinion. An audit requires that the
auditor plans and performs the audit to obtain reasonable assurance that the financial
statements are free of material misstatements or significant errors. An audit includes
examining, on a selective-test basis, the judgmental elements supporting the information
disclosed in the financial statements. An audit also includes assessing the accounting
standards used and the significant estimates made by the Company, as well as evaluating
the overall financial statement presentation. We have not assessed the business criteria
regarding the different areas of the Company, as these matters are the Company’s exclusive
responsibility.
We also report that, in compliance with the legality control that is part of our field of
competence, during this period we have applied the other procedures described in Section
294 of Law No. 19550, which we deemed necessary according to the circumstances,
including —among others— controlling the constitution and survival of the Directors' bond.
We believe that the work we performed provides a reasonable basis for our opinion.
4. In our opinion – within the scope mentioned above – Tarjeta Naranja S.A.’s financial statements
present fairly, in all material respects, the financial position as of December 31, 2013, the
operating income, the changes in the shareholders' equity and the cash flows for the year then
ended, in accordance with International Financial Reporting Standards. Those financial
statements give consideration to all significant facts and circumstances which are known to us. As
regards the Board of Directors’ Annual Report, the Report on the Degree of Compliance with the
Code on Corporate Governance and the Summary of Activity and Additional Information, we
have no observations to make, and the assertions on future events are the exclusive responsibility
of the Board of Directors. In compliance with the legality control that is part of our field of
competence, we have no observations to make.
Furthermore, we report the following: a) the accompanying financial statements and the
corresponding inventory stem from accounting records kept, in all formal aspects, in compliance
with legal regulations prevailing in Argentina; b) as called for by Section 21, Chapter III, Part VI,
Title II of the Regulations issued by the Argentine National Securities Commission concerning
the independence of external auditors as well as the quality of the auditing policies applied by
them and the Company’s accounting policies, the abovementioned external auditor’s report
includes a representation indicating that the auditing standards in force have been applied, these
standards include independence requirements, and contain no observations relative to the
application of said professional accounting standards, and c) we have applied the procedures
concerning anti-money laundering and anti-terrorist financing procedures, as established in the
respective professional standards issued by the Professional Council in Economic Sciences of the
Province of Córdoba.
Córdoba, February 17, 2014.
Jorge F. Gregorat
For the Supervisory Committee
2