Tarjetas Cuyanas S.A.
Financial Statements
For the fiscal year ended December 31, 2012,
presented on a comparative basis
(Free Translation from the Original in Spanish for Publication in Argentina)
Tarjetas Cuyanas S.A.
Financial Statements
For the fiscal year ended December 31, 2012,
presented on a comparative basis
Table of Contents
Letter to the Shareholders
Statement of Comprehensive Income
Balance Sheet
Statement of Changes in Shareholders’ Equity
Statement of Cash Flows
Notes to the Financial Statements
Summary of Events
Report of Independent Accountants
Statutory Audit Committee’s Report
Tarjetas Cuyanas S.A.
(Free Translation from the Original in Spanish for Publication in Argentina)
Registered Office:
Belgrano 1415 – City of Mendoza
Principal Line of Business:
Credit Card Administrator
Fiscal Year No. 18
Financial Statements
For the fiscal year ended December 31, 2012,
presented on a comparative basis
Figures stated in thousands of Pesos
Registration with the Office of Public Records (DRP): File No. 3250, page 1
Registration Date:
Of Bylaws:
November 30, 1995
Of Latest Amendment:
August 15, 2008
Date of Expiration of Company’s Bylaws:
November 29, 2094
CAPITAL STRUCTURE
(Note 2.5.16)
Amount
Shares
Type
Voting Rights
per Share
3,233,283 Book-entry, common shares entitling
to one vote per share and for a face
value of AR$ 10 each
3,233,283
1
Subscribed
Paid-in and
Registered
In Thousands of AR$
32,333
32,333
32,333
32,333
Information on the Controlling Company:
Company’s Name:
Registered Office:
Principal Line of Business:
Equity Interest:
Percentage of Votes:
Tarjetas Regionales S.A.
Belgrano 1415 1st floor – City of Mendoza
Financial and investment activities. Its principal line of
business is to invest in (holding company) nonbanking credit
card issuers and in companies that perform services
supplementary to the abovementioned activity.
99%
99%
2
Tarjetas Cuyanas S.A.
Registration Number with the Public Registry of Commerce: File No. 3250
Statement of Comprehensive Income
For the fiscal year ended December 31, 2012,
presented on a comparative basis (Free Translation from the Original in Spanish for Publication in
Argentina)
12.31.12
Note
12.31.11
In Thousands of AR$
453,782
313,918
(77,211)
(53,720)
376,571
260,198
Revenues from Services
Expenses from Services
Net Income from Services
6
7
Revenues from Financing
Expenses from Financing
Net Income from Financing
8
9
291,566
(135,548)
156,018
180,467
(72,833)
107,634
Net Income from Short-term Investments
10
17,809
8,658
550,398
376,490
Total Net Operating Income
Provision for Credit Losses, Net of Recoveries
11
(118,497)
(16,848)
Taxes and Rates
Personnel Expenses
Advertising Expenses
Depreciation of Property, Plant and Equipment, and Amortization
of Intangible Assets
Other Net Operating Expenses
Total Operating Expenses
12
13
14
(54,189)
(174,849)
(18,179)
(35,963)
(120,973)
(14,149)
15
16
(13,149)
(34,657)
(295,023)
(9,681)
(31,434)
(212,200)
17
136,878
3,586
147,442
117
18
140,464
(48,017)
147,559
(51,883)
92,447
95,676
Net Income before Investments in Other Companies
Income from Valuation of Investments in Other Companies
Income before Income Tax
Income Tax
Comprehensive Income for the Fiscal Year Attributable to the
Company’s Shareholders (1)
The notes on pages 40 through 45 are an integral part of these financial statements.
(1) Earnings per basic and diluted shares are detailed in Note 36.
3
Tarjetas Cuyanas S.A.
Registration Number with the Public Registry of Commerce: File No. 3250
Balance Sheet
As of December 31, 2012, 2011 and 2010
Figures stated in thousands of Pesos (Free Translation from the Original in Spanish for Publication in Argentina)
12.31.12
Note
12.31.11
12.31.10
In Thousands of
AR$
12.31.12
Note
ASSETS
12.31.11
12.31.10
In Thousands of AR$
LIABILITIES
CURRENT ASSETS
Cash and Cash Equivalents
CURRENT LIABILITIES
197,145
Investments
19
20
12,998
-
Receivables from Services
21
1,381,291
1,065,956
Other Receivables
22
10,972
11,261
1,602,406
1,130,005
Total Current Assets
52,788
44,400 Accounts Payable
26
569,720
430,594
321,282
27
519,526
347,711
288,424
28
20,735
14,444
7,639
5,827 Taxes Payable
29
23,198
16,191
11,366
805,040 Other Liabilities
30
8,033
4,242
2,043
18
29,830
24,696
19,191
1,171,042
837,878
649,945
27
220,587
114,172
66,218
34
5,616
5,861
5,659
226,203
120,033
71,877
6,449 Total Liabilities
Shareholders' Equity Attributable to the
60,345 Company’s Shareholders
1,397,245
957,911
721,822
300,266
227,281
143,563
865,385 Total Liabilities and Shareholders' Equity
1,697,511
1,185,192
865,385
- Bank and Financial Payables
754,813 Salaries and Payroll Taxes
NON-CURRENT ASSETS
Provision for Income Tax (Net)
Investments
20
12,262
-
Receivables from Services
21
9,470
18,220
Other Receivables
22
420
334
Deferred Income Tax Assets
18
38,523
18,906
Investments in Other Companies
23
15,592
-
Property, Plant and Equipment
24
8,669
8,899
Intangible Assets
25
10,169
8,828
95,105
55,187
1,697,511
1,185,192
Total Non-current Assets
Total Assets
- Total Current Liabilities
24,176
395 NON-CURRENT LIABILITIES
23,093 Bank and Financial Payables
246 Provisions
5,986 Total Non-current Liabilities
The notes on pages 40 through 54 are an integral part of these financial statements.
4
Tarjetas Cuyanas S.A.
Registration Number with the Public Registry of Commerce: File No. 3250
Statement of Changes in Shareholders’ Equity
For the fiscal year ended December 31, 2012,
presented on a comparative basis
Figures stated in thousands of Pesos (Free Translation from the Original in Spanish for Publication
in Argentina)
Attributable to the Company’s Shareholders
Capital
Stock
Discretionary
Reserve
Legal Reserve
Unappropriate
d Retained
Earnings
Total
Sharehold
ers’ Equity
In Thousands of AR$
Balances as of 12.31.10
32,333
4,906
-
106,324
143,563
-
-
-
95,676
95,676
-
-
-
(11,958)
(11,958)
-
1,560
-
(1,560)
-
Balances as of 12.31.11
32,333
6,466
-
188,482
227,281
Balances as of 12.31.11
32,333
6,466
-
188,482
227,281
-
-
-
92,447
92,447
-
-
-
(19,462)
(19,462)
-
-
169,020
(169,020)
-
32,333
6,466
169,020
92,447
300,266
Net Income for the Fiscal Year
Distribution of Cash Dividends Decided Pursuant to
Minutes of Shareholders’ Meeting Dated March 31,
2011
Creation of a Legal Reserve Decided Pursuant to
Minutes of Shareholders’ Meeting Dated March
31, 2011
Net Income for the Fiscal Year
Distribution of Cash Dividends Decided Pursuant to
Minutes of Shareholders’ Meeting Dated April 9,
2012
Discretionary Reserve Decided Pursuant to
Minutes of Shareholders’ Meeting Dated April 9,
2012
Balances as of 12.31.12
5
Tarjetas Cuyanas S.A.
Registration Number with the Public Registry of Commerce: File No. 3250
Statement of Cash Flows
For the fiscal year ended December 31, 2012,
presented on a comparative basis
Figures stated in thousands of Pesos (Free Translation from the Original in Spanish for Publication in Argentina)
Note
12.31.12
12.31.11
In Thousands of AR$
NET CASH FLOW FROM OPERATING ACTIVITIES
Net Income for the Period
Income Tax Accrued During the Fiscal Year
Interest, Adjustments and Other Financial Income (Expenses) Accrued During the
Fiscal Year, Unpaid
92,447
48,017
95,676
51,883
5,645
3,981
Adjustments to Calculate Net Cash Flow from Operating Activities
31
166,517
58,939
Changes in Operating Assets
Changes in Operating Liabilities
32
33
(435,488)
(62,762)
(337,540)
(41,838)
(185,624)
(168,899)
Decrease / (Increase) in Short-term Investments
(Increase) / Decrease in Investments
Collection of Dividends
Payments for Purchases of Investments in Other Companies
Payments for Property, Plant and Equipment Purchases
Payments for License and Software Development Purchases
1,040
(25,260)
1,000
(13,006)
(5,092)
(9,168)
(276)
363
(7,504)
(7,469)
NET CASH FLOW USED IN INVESTING ACTIVITIES
(50,486)
(14,886)
139,126
(19,462)
435,978
200,500
(316,183)
(50,588)
(1,039)
109,312
(11,958)
249,832
104,500
(198,633)
(54,074)
(1,940)
388,332
197,039
152,222
13,254
44,749
31,637
174
(142)
197,145
44,749
-
6,999
197,145
51,748
NET CASH FLOW USED IN OPERATING ACTIVITIES
NET CASH FLOW FROM INVESTING ACTIVITIES
NET CASH FLOW FROM FINANCING ACTIVITIES
Increase in Accounts Payable
Payment of Dividends
Issuance of Corporate Bonds
Loans Received
Payment of Principal and Interest on Corporate Bonds
Payment of Principal and Interest on Bank and Financial Payables and Others
Gain (Loss) on Futures Transactions Settled
NET CASH FLOW PROVIDED BY FINANCING ACTIVITIES
NET INCREASE IN CASH AND CASH EQUIVALENTS
Cash / Cash Equivalents and Bank Overdrafts at the Beginning of the Fiscal Year
Exchange Difference – Gain/(Loss)
Cash / Cash Equivalents and Bank Overdrafts at Fiscal Year-end
2.5.5
Bank Overdrafts
Cash and Cash Equivalents at Fiscal Year-end
The notes on pages 51 through 52 are an integral part of these financial statements.
6
Tarjetas Cuyanas S.A.
(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 Pesos, except otherwise noted)
Note 1 – General Information
Note 2 – Basis for Preparation and Adoption of International Financial Reporting Standards (IFRS)
Note 3 – Financial Risk Management
Note 4 – Additional Information on the Financial Statements as of December 31, 2012 and 2011
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, Net of Recoveries
Note 12 – Taxes and Rates
Note 13 – Personnel Expenses
Note 14 – Advertising Expenses
Note 15 – Depreciation of Property, Plant and Equipment, and Amortization of Intangible Assets
Note 16 – Other Net Operating Expenses
Note 17 – Income from Valuation of Investments in Other Companies
Note 18 – Income Tax
Note 19 – Cash and Cash Equivalents
Note 20 – Investments
Note 21 – Receivables from Services
Note 22 – Other Receivables
Note 23 – Investments in Other Companies
Note 24 – Property, Plant and Equipment
Note 25 – Intangible Assets
Note 26 – Accounts Payable
Note 27 – Bank and Financial Payables
Note 28 – Salaries and Payroll Taxes
Note 29 – Taxes Payable
Note 30 – Other Liabilities
Note 31 – Adjustments to Calculate Net Cash Flow and Cash Equivalents from Operating Activities
Note 32 – Changes in Operating Assets
Note 33 – Changes in Operating Liabilities
Note 34 – Provisions
Note 35 – Corporate Bonds
Note 36 – Earnings per Share
Note 37 – Changes in the Group’s Structure
Note 38 – Receivables from/Payables to and Transactions with Companies under Section 33, Law No. 19550
and Other Related Parties
Note 39 – Restricted Assets
Note 40 – Bank Loans
Note 41 – Breakdown by Term of Investments, Receivables and Payables
Note 42 – Information Required by Section 64, Subsection (b) of Law No. 19550
Note 43 – Foreign Currency Hedge Contract
Note 44 – Subsequent Events
7
Tarjetas Cuyanas S.A.
Notes to the Financial Statements
For the fiscal year ended December 31, 2012,
presented on a comparative basis
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 1 – GENERAL INFORMATION
Tarjetas Cuyanas S.A. (hereinafter, ―the Company‖) was organized as a corporation in the Province of Mendoza
on November 1, 1995. 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). In addition, it may collect federal, provincial and municipal taxes on behalf of the
Government and other governmental agencies involved. It may also make collections itself or through third
parties from private organizations.
NOTE 2 – BASIS FOR PREPARATION AND ADOPTION OF INTERNATIONAL FINANCIAL REPORTING
STANDARDS (IFRS)
2.1 Requirements for Transition to IFRS
The National Securities Commission (CNV) has established — through its General Resolutions No. 562/09 and
576/10 — the application of Technical Resolutions No. 26 and 29 issued by the Argentine Federation of
Professional Councils in Economic Sciences (FACPCE), which adopt the International Financial Reporting
Standards (IFRS) issued by the International Accounting Standards Board (IASB) for certain entities included in
the public offering system prescribed in Law No. 17811, whether for their capital stock or corporate bonds or
because these entities have requested an authorization to be included in this system.
The application of such standards is mandatory for the Company as from the fiscal year beginning January 1,
2012.
Therefore, the date of transition to IFRS for the Company, as established in IFRS 1 ―First-time Adoption of
IFRS‖, is January 1, 2011.
8
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – BASIS FOR PREPARATION AND ADOPTION OF INTERNATIONAL FINANCIAL REPORTING
STANDARDS (Continued)
2.1 Requirements for Transition to IFRS (Continued)
Note 2.4 discloses a reconciliation of balance sheet and statement of income figures related to the financial
statements issued in conformity with Argentine generally accepted accounting principles applicable to the
Company (hereinafter, ―Argentine GAAP‖) as of the transition date (December 31, 2010), and as of the adoption
date (December 31, 2011), to the figures presented under IFRS in these financial statements, as well as the
effects of cash flow adjustments.
The preparation of these financial statements, in conformity with IFRS, requires the Company’s Management to
make certain estimates and assumptions that may affect the book amounts of assets and liabilities, the
disclosure of contingent assets and liabilities as of the date of the financial statements and the book amounts of
income and expenses for the fiscal years reported. Actual figures may differ from those estimates.
2.2 Optional IFRS Exemptions
The following are the applicable exemptions and exceptions considering IFRS 1 and that were used in
converting Argentine GAAP to IFRS. IFRS 1 allows entities that adopt IFRS for the first time to consider certain
one-off exemptions from the principle of retrospectively applying certain IFRS effective for the closing dates of
the financial statements as of December 31, 2012. Such exemptions have been established by the IASB to
streamline the first-time application of such standards.
Below are the optional exemptions applicable to the Company under IFRS 1:
Deemed Cost of Property, Plant & Equipment: The cost of Property, Plant and Equipment, restated
according to Argentine GAAP, has been adopted as deemed cost as of the date of transition to IFRS
because it is similar to the cost or depreciated cost under IFRS, which is adjusted to reflect the changes in a
general or specific price index.
The Company has not made use of other exemptions available in IFRS 1 as they are not applicable to its
operations as of the transition date.
9
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – BASIS FOR PREPARATION AND ADOPTION OF INTERNATIONAL FINANCIAL REPORTING
STANDARDS (Continued)
2.3 Mandatory IFRS Exemptions
Below are the mandatory exemptions applicable to the Company under IFRS 1:
1. Estimates: The Company reviewed the significant estimates as of December 31, 2010 (date of transition to
IFRS), which are consistent with the estimates made as of the same date under Argentine GAAP, except for
the allowance for credit losses. Note 2.4 below discloses the effect of the difference in the calculation
methods between Argentine GAAP and IFRS for this estimate.
2. Other mandatory exceptions established in IFRS 1, which have not been applied since they are not material
to the Company, are as follows:
Derecognition of financial assets and liabilities
Hedge accounting
Non-controlling interests
Embedded derivatives
2.4 Reconciliations Required
As required by the provisions of FACPCE Technical Resolutions Nos. 26 and 29 and IFRS 1, the reconciliations
of the shareholders’ equity calculated according to Argentine GAAP and that calculated under IFRS as of
December 31, 2011 and December 31, 2010 and the reconciliation of comprehensive income for the fiscal year
ended December 31, 2011 are included below. In this regard, in preparing reconciliations, the Company
considered those IFRS that are applicable to the preparation of its annual financial statements as of December
31, 2012.
10
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – BASIS FOR PREPARATION AND ADOPTION OF INTERNATIONAL FINANCIAL REPORTING
STANDARDS (Continued)
2.4 Reconciliations Required (Continued)
A. Balance Sheet Reconciliation
As of December 31, 2011 and December 31, 2010:
Argentine Adjustme
nts/
GAAP
Reclassif
Amounts
ications
IFRS
Amounts
December 31, 2010
In Thousands of AR$
Argentine Adjustment
s/
GAAP
Reclassific
Amounts
ations
IFRS
Amounts
December 31, 2011
In Thousands of AR$
ASSETS
Cash and Cash Equivalents
Receivables from Services
Other Receivables
Total Current Assets
Receivables from Services
Other Receivables
Deferred Income Tax Assets
Investments in Other Companies
Property, Plant and Equipment
Intangible Assets
Total Non-current Assets
Total Assets
44,400
782,236
5,827
832,463
24,176
13,890
246
5,986
6,449
50,747
883,210
(27,423)
(27,423)
(13,495)
23,093
9,598
(17,825)
44,400
754,813
5,827
805,040
24,176
395
23,093
246
5,986
6,449
60,345
865,385
52,788
1,065,956
11,261
1,130,005
18,220
19,240
8,899
8,828
55,187
1,185,192
LIABILITIES
Accounts Payable
Bank and Financial Payables
Salaries and Payroll Taxes
Taxes Payable
Other Liabilities
Provision for Income Tax
Total Current Liabilities
Bank and Financial Payables
Provisions
Total Non-current Liabilities
Total Liabilities
Shareholders’ Equity
321,282
288,424
7,639
30,557
2,043
649,945
66,218
5,659
71,877
721,822
161,388
(19,191)
19,191
(17,825)
321,282
288,424
7,639
11,366
2,043
19,191
649,945
66,218
5,659
71,877
721,822
143,563
430,594
347,711
14,444
40,887
4,242
837,878
114,172
5,861
120,033
957,911
227,281
(18,906)
18,906
(24,696)
24,696
-
52,788
1,065,956
11,261
1,130,005
18,220
334
18,906
8,899
8,828
55,187
1,185,192
430,594
347,711
14,444
16,191
4,242
24,696
837,878
114,172
5,861
120,033
957,911
227,281
11
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – BASIS FOR PREPARATION AND ADOPTION OF INTERNATIONAL FINANCIAL REPORTING
STANDARDS (Continued)
2.4 Reconciliations Required (Continued)
B. Statement of Comprehensive Income Reconciliation
As of December 31, 2011:
Argentin
e GAAP
Amounts
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
Total Net Operating Income
Provision for Credit Losses
Taxes and Rates
Personnel Expenses
Advertising Expenses
Depreciation of Property, Plant and
Equipment
Other Net Operating Expenses
Total Operating Expenses
Net Income before Investments in
Other Companies
Income from Valuation of
Investments in Other Companies
Income before Income Tax
Income Tax
Comprehensive Income for the
Fiscal Year Attributable to the
Company’s Shareholders
Adjustme
nts/
Reclassifi
cations
IFRS
Amounts
December 31, 2011
In Thousands of AR$
313,918
313,918
(53,720)
(53,720)
260,198
260,198
180,467
(72,833)
107,634
-
180,467
(72,833)
107,634
8,658
8,658
376,490
(44,271)
27,423
376,490
(16,848)
(35,963)
(120,973)
(14,149)
-
(35,963)
(120,973)
(14,149)
(9,680)
(31,435)
(212,200)
-
(9,680)
(31,435)
(212,200)
120,019
27,423
147,442
117
-
117
120,136
(42,285)
27,423
(9,598)
147,559
(51,883)
77,851
17,825
95,676
12
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – BASIS FOR PREPARATION AND ADOPTION OF INTERNATIONAL FINANCIAL REPORTING
STANDARDS (Continued)
2.4 Reconciliations Required (Continued)
C. Significant Statement of Cash Flows Reclassifications
Below are the significant reclassifications made in the Statement of Cash Flows:
-
Under Argentine GAAP, the variation in accounts payable was disclosed in changes in operating
liabilities and under IFRS was disclosed as cash flow provided by financing activities.
-
Under Argentine GAAP, cash and cash equivalents were considered to be the amounts of cash on hand
and in banks, and highly-liquid short-term investments with an original maturity of three months or less.
Bank overdrafts were disclosed as cash flow provided by financing activities. Under IFRS, the following
were considered as cash and cash equivalents: cash on hand and in banks, highly-liquid short-term
investments with an original maturity of three months or less and bank overdrafts.
D. Explanation of Adjustments
(a) Change in Estimating the Allowance for Credit Losses
Under Argentine GAAP, the allowance for credit losses was recognized, through the date of transition to IFRS,
based on the assessment of the customers’ repayment ability, the debtor's degree of compliance with
contractual payments and the guarantees securing transactions, according to the best practices and the
minimum allowance for credit losses required by the Argentine Central Bank from financial institutions in
Argentina.
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 accrued 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. This model, called Markov Chain, is used by different
European and U.S. financial institutions to estimate the allowances for credit losses under IFRS.
The adjustment for the change in estimating the allowance for credit losses as of the date of transition to IFRS
represents a decrease in the shareholders’ equity as of that date amounting to thousands of AR$ 27,423. No
differences resulted from the change in criterion as of December 31, 2011.
(b) Tax Effect of IFRS Adjustments
It represents the income tax effect of the abovementioned IFRS adjustment.
The tax effect of the IFRS adjustment represents an increase in the shareholders’ equity as of the transition date
of thousands of AR$ 9,598. No differences resulted from the change in criterion as of December 31, 2011.
13
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – BASIS FOR PREPARATION AND ADOPTION OF INTERNATIONAL FINANCIAL REPORTING
STANDARDS (Continued)
2.5 Accounting Policies
The most significant accounting policies used in preparing these financial statements, which are consistent with
those used in the previous fiscal year, are as follows:
2.5.1 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 Board of Directors 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. The maximum authority in decision-making related to
the Company’s operation to allocate resources and assess performance is Tarjetas Cuyanas S.A.’s Board of
Directors.
2.5.2 Functional and Presentation Currency
The figures included in the Company’s financial statements were measured using its functional currency, i.e., the
currency of the primary economic environment where the Company operates. The financial statements are
presented in Argentine Pesos, which is the Company’s functional and presentation currency.
2.5.3 Foreign Currency Assets and Liabilities
Foreign currency assets and liabilities have been stated at the buying or selling exchange rates in force at fiscal
year-end.
Exchange differences were recognized in the line ―Expenses from Financing‖ in the Statement of
Comprehensive Income during the fiscal year when they arose.
14
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – BASIS FOR PREPARATION AND ADOPTION OF INTERNATIONAL FINANCIAL REPORTING
STANDARDS (Continued)
2.5 Accounting Policies (Continued)
2.5.4 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 measured at amortized cost or fair value.
Specifically, investments in debt instruments that are held within a business model, whose objective is to collect
contractual cash flows, and that solely consist in payments of principal or interest on the principal amount
outstanding, are measured at amortized cost. All the other investments in debt or equity instruments are
measured at fair values.
Such IFRS shall be applied for the fiscal years beginning on or after January 1, 2015. Early application is
permitted. The Company has opted for the early application as from the fiscal year beginning 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 the contractual terms entitle
collection of cash flows on specified dates that are solely principal and interest.
In this category, the Company has classified the following financial assets: Receivables from Services, Time
Deposits (included in the account ―Cash and Cash Equivalents‖), Investments in Debt Securities (included in the
account ―Investments‖) and Other Receivables.
(b) Financial Assets at Fair Value
If any of both conditions referred to in the preceding point is not met, the asset is classified in this category.
In this category, the Company has classified the following financial assets: Cash on Hand, Cash in Banks and
Mutual Funds (included in the account ―Cash and Cash Equivalents‖) and investments in companies on which no
control, joint control or significant influence is exercised.
15
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – BASIS FOR PREPARATION AND ADOPTION OF INTERNATIONAL FINANCIAL REPORTING
STANDARDS (Continued)
2.5 Accounting Policies (Continued)
2.5.5 Cash and Cash Equivalents
The following components are considered to be included in this account, in the Statement of Cash Flows, as
long as there are no restrictions on the availability:
- Cash, including deposits with financial institutions.
- Cash equivalents, including those investments with an original maturity of three months or less from their
placement, mutual funds and others, net of restricted assets and bank overdrafts. Bank overdrafts are classified
as ―Bank and Financial Payables‖ in Current Liabilities in the Balance Sheet.
Cash considered in the Statement of Cash Flows is broken down as follows:
12.31.12
12.31.11
In Thousands of AR$
Cash
Cash and Due from Banks (Note 19)
Short-term Investments (Note 19)(1)
Overdrafts (Note 40)
Total
26,559
170,586
197,145
20,299
31,449
(6,999)
44,749
(1) It corresponds to total short-term investments net of restricted assets. (See Note 39).
2.5.6 Investments
The placements of funds in government securities and corporate bonds were valued at their amortized cost.
The investments in mutual funds, as well as the investments in companies on which no control, joint control or
significant influence is exercised, were measured at their fair value. Changes in fair value were accounted for in
the Statement of Comprehensive Income.
2.5.7 Receivables from Services and Other Receivables
Receivables from services include the amounts payable by customers for credit-card consumption, loans granted
and service fees and others.
Receivables from Services and Other Receivables have been initially recognized at fair 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 2.5.8 below.
16
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – BASIS FOR PREPARATION AND ADOPTION OF INTERNATIONAL FINANCIAL REPORTING
STANDARDS (Continued)
2.5 Accounting Policies (Continued)
2.5.8 Impairment of Financial Assets – Allowance for Credit Losses
Impairment of Financial Assets
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.
Allowance for Credit Losses
The allowance for credit losses is recognized as further described in Note 2.4.d.
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 Comprehensive Income.
2.5.9 Derivatives
Derivatives are initially recognized at fair value at the date of execution of the contract and are subsequently
measured at fair value, charged to income, except a specific treatment under hedge accounting should be given.
The method to recognize the gain or loss resulting from each valuation depends, therefore, on whether the
derivative is designated as hedge instrument and, if applicable, on the nature of the risk inherent to the item
hedged. As of December 31, 2012 and December 31, 2011, the derivatives recorded by the Company do not
meet the requirements set out in the standard for them to qualify as effective hedging. Therefore, the Company
has not applied hedge accounting.
Derivatives are forward currency sale contracts to hedge cash flow risks arising from Class VI, Series I and II,
Corporate Bonds.
17
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – BASIS FOR PREPARATION AND ADOPTION OF INTERNATIONAL FINANCIAL REPORTING
STANDARDS (Continued)
2.5 Accounting Policies (Continued)
2.5.10 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 the purpose 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. Deferred assets are recognized in the balance
sheet 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.
2.5.11 Property, Plant and Equipment
Property, Plant and Equipment were valued at historical acquisition 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 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
Cost of Adapting Stores
Furniture and Office Supplies
Hardware
Fixtures and Improvements
Years of Estimated Useful
Life
Term of Lease Agreement
5 years
2 years
5 years
18
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – BASIS FOR PREPARATION AND ADOPTION OF INTERNATIONAL FINANCIAL REPORTING
STANDARDS (Continued)
2.5 Accounting Policies (Continued)
2.5.11 Property, Plant and Equipment (Continued)
Changes in the criteria originally established are recognized, as the case may be, as a change of estimate.
The value of assets is impaired if the accounting residual value exceeds their estimated recoverable value.
Property, Plant and Equipment are reviewed for impairment when events or circumstances that indicate that their
book value may not be recovered have arisen.
The Company estimates the book value of property, plant and equipment does not exceed their value in use
under the current conditions.
2.5.12 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 economic benefits for the Company.
Patents and software are recognized at their historical cost as of the acquisition date, net of amortization and
impairment loss, if applicable. Amortization is calculated by the straight-line method based on their estimated
useful lives, which do not exceed five years.
The value of assets is impaired if the accounting residual value exceeds their estimated recoverable value.
Property, plant and equipment are reviewed for impairment when events or circumstances that indicate that their
book value may not be recovered have arisen.
The Company estimates the book value of intangible assets does not exceed their value in use under the current
conditions.
2.5.13 Accounts Payable
Accounts payable represent the obligations to pay merchants (comercios amigos) and payables 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.
2.5.14 Bank and Financial Payables and Other Liabilities
Bank and financial payables, and corporate bonds are initially recognized at their fair value. They are
subsequently valued at amortized cost using the effective interest rate method.
19
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – BASIS FOR PREPARATION AND ADOPTION OF INTERNATIONAL FINANCIAL REPORTING
STANDARDS (Continued)
2.5 Accounting Policies (Continued)
2.5.15 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 legal 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 contingencies, other than those recorded, that could occur and thus
generate a negative impact on the Company’s financial position.
The breakdown and changes of provisions are disclosed in Note 34.
2.5.16 Capital Stock
The capital stock is represented by non-endorsable registered common shares, with a face value of AR$ 10 per
share.
As of December 31, 2012, capital stock was as follows:
Approved by
Capital Stock
AR$
Subscribed, paid-in and registered
Subscribed, paid-in and registered
Subscribed, paid-in and registered
Body
100,000 Bylaws
Unanimous
Special
1,900,000 Shareholders’ Meeting
Unanimous
Special
30,332,830 Shareholders’ Meeting
Date
Registration Date
11.01.95
11.30.95
09.10.96
08.23.99
12.18.06
05.15.08
32,332,830
2.5.17 Revenue Recognition
(a) Revenues from Services
Revenues from services are recognized in the fiscal year when the service is provided, once the revenue may be
reliably measured and future economic benefits are likely to be generated for the Company.
20
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – BASIS FOR PREPARATION AND ADOPTION OF INTERNATIONAL FINANCIAL REPORTING
STANDARDS (Continued)
2.5 Accounting Policies (Continued)
2.5.17 Revenue Recognition (Continued)
(b) Revenues from Financing
Revenues from financing are accounted for when they are accrued, by applying the effective interest rate
method.
2.6 Changes in Accounting Policies
(a) New and Amended Standards Adopted by the Company.
The Company early adopted IFRS 9, as described in Note 2.5.4.
As of the date of these financial statements, there are no other IFRS or IFRIC interpretations that are effective
for the first time for the fiscal year beginning on or after January 1, 2012 and that are expected to have a material
effect on the Company.
(b) New Standards, Amendments and Interpretations Published that Have Not Become Effective Yet for the
Fiscal Years Beginning on or after January 1, 2012 and that Have Not Been Early Adopted.
IFRS 13 “Fair Value Measurement” 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 mostly aligned with U.S. GAAP (accounting standards in force
in the USA), 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 IFRS or U.S. GAAP. The Company still has to assess the full
effect of IFRS 13 and intends to adopt IFRS 13 no later than the accounting period beginning on or after January
1, 2013.
NOTE 3 – FINANCIAL RISK MANAGEMENT
The Company’s activities expose it to several financial risks: market risk (including the exchange rate risk, the
fair value interest rate risk and the price risk), credit risk and liquidity risk.
There were no changes in the Company’s risk department from the last closing or in risk management policies.
Information relating to December 31, 2012 and 2011 is disclosed in Note 4 below.
21
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – INFORMATION ON THE FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012 AND 2011
1. Financial Risk Management
1.1 Financial Risk Factors
The nature of the Company's operations and the characteristics of its customer portfolio expose it to several
risks, primarily related to market risks (including the effects of changes in exchange rates and interest rates) and
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.
(a) Credit Risk
The credit risk refers to the risk that one of the parties breaches its contractual obligations, resulting in a financial
loss for the Company. The credit risk arises from deposits with banks and financial institutions, as well as
customer credit exposures, including other remaining loans and committed transactions.
As regards the risk management related to deposits with banks and financial institutions, the Board of Directors
approved the Company's credit assessment and investment policy to provide a framework for generating
businesses aimed at achieving an appropriate relation between the risk taken and profitability. The guidelines of
such policy are as follows:
 Placements shall be made with financial institutions or mutual funds that have a minimum short-term local
currency rating of ―A1‖, according to the rating agency Fitch Ratings or its available equivalent according
to other rating agencies. Investments made in financial institutions may not exceed individually 15%
(fifteen per cent) of the Company’s shareholders’ equity. The same shall be applicable to mutual funds.
 In addition, the investments made in financial institutions may not exceed 5% (five per cent) of their
shareholders’ equity. The same shall be applicable to mutual funds as regards their equity.
The total placement (Time Deposits + Mutual Funds) with each institution under no circumstances shall
exceed the maximum allowed to be deposited in a time deposit, determined pursuant to the
aforementioned guidelines.
 Up to 20% (twenty per cent) out of total investments in each financial institution or mutual fund may be
invested. This amount rises to 35% (thirty-five per cent) if the target financial institution has a credit line
(borrowed or contingent) of at least thousands of AR$ 10,000.
 Investments placed in financial institutions rated ―A2" shall be exceptionally allowed, provided that the
Company has a line borrowed from such institution. The placement, in addition to the other restrictions,
may not exceed the amount of the line.
22
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – INFORMATION ON THE FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012 AND 2011
(Continued)
1. Financial Risk Management (Continued)
1.1 Financial Risk Factors (Continued)
(a) Credit Risk (Continued)
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, for the
following purposes:
 Achieve a proper segmentation of the customer portfolio.
 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.
 Monitor customers’ degree of compliance on an ongoing basis.
 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, the
number of family members, among other aspects.
In this respect, seven different credit limits have been set: (I) monthly balance limit, which is 50% of the income
presented and will be the maximum amount in the aggregate of the installments that shall be paid monthly; (II)
short-term installment plan limit, which is three times the monthly balance limit and is the maximum amount with
which the customer may purchase in two to six installments; (III) the total debt limit and long-term installment
plans, which is five times the monthly balance limit, which will be the maximum amount with which the customer
may purchase in seven or more installments and will also be the maximum amount that the customer may owe
to the card company on every account. This available balance also includes a product called Nevaplan (Neva),
where the maximum amount that may be used will be three times the monthly balance limit and it may be paid in
one, two or three installments not accruing interest or six, nine or twelve installments, accruing interest; (IV) ATM
cash withdrawal limit or advance granted by tellers, which is a fixed amount of AR$ 700, that may be withdrawn
in cash; if an ATM withdrawal is made, it may be paid in one to six installments; if cash is withdrawn at a
branch's teller (advance), it is discounted in a single payment from the next-month account statement; (V) limit
for loans, which is equal to the short-term installment plan limit and may be chosen up to eighteen months; this
amount is subject to the customer’s credit check; (VI) limit on cell phone top-ups, which is a maximum amount of
AR$ 450 for which customers may top up their cell phones credit and settle it in a single payment in next–month
account statement; (VII) balance limit with Tarjeta Nevada Visa, which uses and shares the same monthly
balance limit and the short-term installment plan limit of its Tarjeta Nevada.
23
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – INFORMATION ON THE FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012 AND 2011
(Continued)
1. Financial Risk Management (Continued)
1.1 Financial Risk Factors (Continued)
(a) Credit Risk (Continued)
Furthermore, Tarjetas Cuyanas S.A. has a strong policy to address customers’ payment in arrears, as follows:
If the account statement cannot be settled upon maturity, two options are offered:
(1) If the outstanding amount cannot be settled upon maturity, the customer is offered an installment plan or
express friend loan upon maturity, which allows financing the outstanding amount from two to six installments,
which are added to the amount that falls due in 30 days.
(2) The option of an installment plan or friend loan upon maturity, which consists in financing the total debt,
including past due amounts and those to fall due from six to twenty-four installments. The first installment is paid
at the moment or making a downpayment. This plan is enabled provided that there are limits to be able to do so.
Limits increase as each installment is paid. In cases of more than 24 installments and up to 36 installments,
authorization from the branch head is required.
Two options are offered in the "yellow" status (30 days in arrears):
(1) An installment plan (installment paid at the moment) or express friend loan (downpayment), which allows
financing the past due amount and that to fall due from two to six installments.
(2) Make an installment plan (installment paid at the moment) or friend loan (downpayment) in a yellow status for
the total debt, including past due amounts and those to fall due from six to twenty-four installments. In cases of
more than 24 installments and up to 36 installments, authorization from the branch head is required. For this
plan, the account is disabled until paying 50% of the installment options made.
In the ―principal‖ status (60 days in arrears), the possibility offered is settlement with a principal installment plan,
which may be also made by the collection agent at the respective address or friend loan of principal, which
implies financing the total debt (past due amounts and those to fall due) from six to twelve installments, at any
collection entity, or up to thirty-six installments at branches. The first installment payment or downpayment is
made at the moment. For this plan, the account is disabled until paying 50% of the installment options made.
If, after this stage, customers do not pay the plans previously chosen, they will be offered the possibility of
financing the total debt, but this time the installment plan or friend loan chosen will be disabled until 70% of
installment options made are settled.
24
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – INFORMATION ON THE FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012 AND 2011
(Continued)
1. Financial Risk Management (Continued)
1.1 Financial Risk Factors (Continued)
(a) Credit Risk (Continued)
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. Tarjetas Cuyanas S.A. assesses the uncollectibility risk and sets
allowances, which are calculated based on the criterion described in Note 2.5.8 to these financial statements,
and such allowances are deemed adequate for the recognition of losses incurred for credit losses under IFRS.
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 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, 2012 and December 31, 2011:
Monthly Purchase Limit
Short-term Limit
Total Indebtedness and Long-term Limit
12.31.12
In Thousands of
AR$
717,861
2,221,010
3,283,669
12.31.11
In Thousands of
AR$
520,708
1,602,980
2,456,795
Maximum Exposure to Credit Risk:
The following table shows the maximum gross exposure to credit risk, disregarding guarantees or other credit
improvements:
Receivables from Services (Net of Allowances)
Total
12.31.12
In Thousands of
AR$
1,390,761
1,390,761
12.31.11
In Thousands of
AR$
1,084,176
1,084,176
For the assets recorded in the financial statements, the exposures established are based on the net book
amounts of the respective allowances for credit losses, as disclosed in the balance sheet.
25
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – INFORMATION ON THE FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012 AND 2011
(Continued)
1. Financial Risk Management (Continued)
1.1 Financial Risk Factors (Continued)
(a) Credit Risk (Continued)
Receivables from Services Not Impaired:
Receivables that are not impaired are those in arrears for less than 30 days. However, a minimum allowance is
set therefor, as described in Note 2.5.8. The amount outstanding of such receivables from services as of
December 31, 2012 and December 31, 2011 is as follows:
Receivables from Services (A)
12.31.12
In Thousands of
AR$
1,400,910
12.31.11
In Thousands of
AR$
1,078,406
Receivables from Services Impaired
Receivables that are impaired are those in arrears for more than 30 days. The amount outstanding of such
receivables from services is as follows:
Receivables from Services (B)
Receivables from Services Addition of (A) + (B)
(See Note 21)
12.31.12
In Thousands of
AR$
130,587
12.31.11
In Thousands of
AR$
65,548
12.31.12
In Thousands of
AR$
12.31.11
In Thousands of
AR$
1,531,497
1,143,954
(b) Liquidity Risk
The Company has a liquidity policy, which consists in having a cash amount equal to the amount required to
meet cash needs for the next four months, according to future cash flow estimates.
In this respect, it prepares annual, monthly and daily cash estimates, analyzing the needs and/or surpluses
generated, evaluating the availability of cash and the available financing alternatives. To such end, through the
Financial Division’s meetings, 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.
26
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – INFORMATION ON THE FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012 AND 2011
(Continued)
1. Financial Risk Management (Continued)
1.1 Financial Risk Factors (Continued)
(b) Liquidity Risk (Continued)
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.
Regarding the short- and long-term debt breakdown, 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 as of December 31, 2012:
Less than 3
Months
December 31, 2012
In Thousands of AR$
From 3 to
From 1 to
12 Months
2 Years
Total
Financial Liabilities
Accounts Payable
Bank and Financial Payables
Total Financial Liabilities
539,603
183,516
723,119
30,117
336,010
366,127
220,587
220,587
569,720
740,113
1,309,833
The table below breaks down financial liabilities by contractual due date as of December 31, 2011:
Less than 3
Months
December 31, 2011
In Thousands of AR$
From 3 to
From 1 to
12 Months
2 Years
Total
Financial Liabilities
Accounts Payable
Bank and Financial Payables
Total Financial Liabilities
153,201
7,324
160,525
277,393
340,387
617,780
114,172
114,172
430,594
461,883
892,477
The derivatives portfolio as of December 31, 2011 is included in the ―Less than 3 months‖ range because these
contracts are managed and settled based on net fair values.
27
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – INFORMATION ON THE FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012 AND 2011
(Continued)
1. Financial Risk Management (Continued)
1.1 Financial Risk Factors (Continued)
(c) Market Risk
Exchange Rate-associated Risks
Certain operations of the Company are potentially exposed to foreign currency exchange rate fluctuations mainly
due to amounts outstanding of corporate bonds denominated in U.S. Dollars. As the Company’s policy is based
on mitigating the exchange rate risk, a series of hedge transactions were performed with respect to the foreign
currency-denominated debt in order to hedge the exchange rate risk to which it would be otherwise exposed.
Derivatives entered into by the Company are forward currency sale contracts to hedge cash flow risks arising
from Class VI, Series I and II, Corporate Bonds. As of December 31, 2012, the breakdown was as follows:
Hedge Amount (In
Thousands of U.S.
Dollars)
Hedge Amount
(In Thousands of
Pesos) as of
12.31.12
Hedge
Expiration
Date
Banco de Galicia y Buenos
Aires S.A.
7,184
36,395
02/28/13
TOTAL
7,184
36,395
Counterparty
As of December 31, 2011, the breakdown was as follows:
Hedge Amount (In
Thousands of U.S.
Dollars)
Hedge Amount
(In Thousands of
Pesos) as of
12.31.11
Hedge
Expiration
Date (1)
Banco de Galicia y Buenos
Aires S.A.
26,006
113,232
01/31/12
TOTAL
26,006
113,232
Counterparty
(1) Renewed upon maturity.
28
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – INFORMATION ON THE FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012 AND 2011
(Continued)
1. Financial Risk Management (Continued)
1.1 Financial Risk Factors (Continued)
(c) Market Risk (Continued)
Exchange Rate-associated Risks (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.
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. However, as the hedge does not meet all the requirements set out in IFRS, the Company has
not applied hedge accounting to record these instruments.
The variation in the U.S. Dollar exchange rate during fiscal year 2012 was a 14 % increase. The effect of such
variation on the Company’s bank and financial payable was reflected as a loss in income/ (loss) for fiscal year
2012 amounting to thousands of AR$ 12,268 (before income tax), disregarding hedging.
In addition, the most significant assets in foreign currency are held in cash and in investments to meet
obligations in foreign currency. They resulted in an exchange difference gain during fiscal year 2012, which was
reflected in income for the fiscal year in the amount of thousands of AR$ 1,322 (before income tax).
29
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – INFORMATION ON THE FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012 AND 2011
(Continued)
1. Financial Risk Management (Continued)
1.1 Financial Risk Factors (Continued)
(c) Market Risk (Continued)
Exchange Rate-associated Risks (Continued)
The following table shows the sensitivity towards a possible additional 19% change in the U.S. Dollar exchange
rate, disregarding the effect of hedge contracts, in the Statement of Comprehensive Income and the Statement
of Changes in Shareholders’ Equity before income tax.
Variation in the
Exchange Rate
(%)
As of December 31, 2012:
(In Thousands of AR$)
Increase /
(Decrease) in
Income before
Taxes
Increase /
(Decrease) in
Shareholders’
Equity
Peso Devaluation with respect to the
Foreign Currency
19%
(2,487)
(2,487)
Peso Revaluation with respect to the
Foreign Currency
-19%
2,487
2,487
If the U.S. Dollar had increased by an additional 19%, the impact on the Company’s income before taxes would
have been a loss amounting to thousands of AR$ 2,487 as a result of a higher cost for exchange difference.
Otherwise, if the U.S. Dollar had decreased by such percentage, the effect on income before taxes would have
been income for the same amount.
The variation in the U.S. Dollar exchange rate during fiscal year 2011 was an 8 % increase. The effect of such
variation on the Company’s bank and financial payable was reflected as a loss in income/ (loss) for fiscal year
2011 amounting to thousands of AR$ 8,857 (before income tax), disregarding hedging.
In addition, the most significant assets in foreign currency are held in cash to meet obligations in foreign
currency. They resulted in an exchange difference gain during fiscal year 2011, which was reflected in income
for fiscal year 2011 in the amount of thousands of AR$ 142 (before income tax).
30
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – INFORMATION ON THE FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012 AND 2011
(Continued)
1. Financial Risk Management (Continued)
1.1 Financial Risk Factors (Continued)
(c) Market Risk (Continued)
Exchange Rate-associated Risks (Continued)
The following table shows the sensitivity towards a possible additional 5% change in the U.S. Dollar exchange
rate, disregarding the effect of hedge contracts, in the Statement of Comprehensive Income and the Statement
of Changes in Shareholders’ Equity before income tax.
Variation in the
Exchange Rate
(%)
As of December 31, 2011:
(In Thousands of AR$)
Increase /
(Decrease) in
Income before
Taxes
Increase /
(Decrease) in
Shareholders’
Equity
Peso Devaluation with respect to the
Foreign Currency
5%
(3,637)
(3,637)
Peso Revaluation with respect to the
Foreign Currency
-5%
3,637
3,637
If the U.S. Dollar had increased by an additional 5%, the impact on the Company’s income before taxes would
have been a loss amounting to thousands of AR$ 3,637 as a result of a higher cost for exchange difference.
Otherwise, if the U.S. Dollar had decreased by such percentage, the effect on income before taxes would have
been income for the same amount.
Interest Rate-associated Risks
The Company is exposed to interest rate risks due to financings obtained through the issuance of corporate
bonds and borrowing of loans at variable rate. In all cases of loans and corporate bonds with variable rate, the
applicable rate is the private Badlar rate (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).
As of December 31, 2012 and 2011, the average Badlar rate was 13.88% and 13.35%, respectively, generating
a charge to loss, net of taxes, amounting to thousands of AR$ 76,574 and AR$ 40,961 for 2012 and 2011,
respectively (included in the line ―Interest on Financing and Other Items‖ in expenses from financing).
31
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – INFORMATION ON THE FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012 AND 2011
(Continued)
1. Financial Risk Management (Continued)
1.1 Financial Risk Factors (Continued)
(c) Market Risk (Continued)
Interest Rate-associated Risks (Continued)
The following table summarizes the percentage of principal of bank and financial payables at the effective
variable and fixed interest rates as of December 31, 2012 and 2011:
Fixed Interest Rate
Variable Interest Rate
As of December 31, 2012
Amounts
In Thousands
Percentage
of AR$
150,084
20%
582,716
80%
As of December 31, 2011
Amounts
In Thousands of
Percentage
AR$
198,171
44%
253,015
56%
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 variation in interest rates in the Statement of
Comprehensive Income and the Statement of Changes in Shareholders’ Equity before income tax as of
December 31, 2012.
As of December 31, 2012
Variation in Interest
Rate (%)
Decrease in Interest Rate
Increase in Interest Rate
-4%
4%
Increase / (Decrease)
in Income before
Taxes
In Thousands of AR$
Increase /
(Decrease) in
Shareholders’
Equity
In Thousands of
AR$
80,880
(80,880)
80,880
(80,880)
If the rate applicable to the obligations assumed at variable rate had increased by an additional 4%, the impact
on the Company’s income before taxes would have been a loss amounting to thousands of AR$ 80,880 as a
result of a higher interest cost. Otherwise, if the rate had decreased by such percentage, the effect on income
before taxes would have been income for the same amount.
32
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – INFORMATION ON THE FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012 AND 2011
(Continued)
1. Financial Risk Management (Continued)
1.1 Financial Risk Factors (Continued)
(c) Market Risk (Continued)
Interest Rate-associated Risks (Continued)
The following table shows the sensitivity towards a possible variation in interest rates in the Statement of
Comprehensive Income and the Statement of Changes in Shareholders’ Equity before income tax as of
December 31, 2011.
As of December 31, 2011
Variation in Interest
Rate (%)
Decrease in Interest Rate
Increase in Interest Rate
-5%
5%
Increase / (Decrease)
in Income before
Taxes
In Thousands of AR$
Increase /
(Decrease) in
Shareholders’
Equity
In Thousands of
AR$
23,046
(23,046)
23,046
(23,046)
If the rate applicable to the obligations assumed at variable rate had increased by an additional 5%, the impact
on the Company’s income before taxes would have been a loss amounting to thousands of AR$ 23,046 as a
result of a higher interest cost. Otherwise, if the rate had decreased by such percentage, the effect on income
before taxes would have been income for the same amount.
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 corporate bonds issued and to continue as a going concern. The indebtedness
ratio as of December 31, 2012 and 2011 is as follows:
Total Debt
12.31.12
12.31.11
In Thousands of In Thousands of
AR$
AR$
1,397,245
957,911
Less: Cash and Cash Equivalents
(197,145)
(52,788)
Net Debt
1,200,100
905,123
Shareholders’ Equity
Net Debt + Shareholders’ Equity
300,266
1,500,366
227,281
1,132,404
3.99
3.98
Indebtedness Ratio
33
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – INFORMATION ON THE FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012 AND 2011
(Continued)
1. Financial Risk Management (Continued)
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).
The following table discloses the Company’s assets and liabilities, which are measured at fair value as of
December 31, 2012 and 2011:
As of December 31, 2012
In Thousands of AR$
Financial Assets
Level 1
Level 2
Level 3
Total
Amount
61,666
-
-
15,592
61,666
15,592
23
-
-
23
61,689
-
15,592
77,281
Foreign-currency Derivatives
-
-
-
-
Total Financial Liabilities
-
-
-
-
Cash and Cash Equivalents (Except for Investments in Time Deposits)
Investments in Other Companies
Foreign-currency Derivatives
Total Financial Assets
Financial Liabilities
As of December 31, 2011
In Thousands of AR$
Financial Assets
Cash and Cash Equivalents (Except for
Investments in Time Deposits)
Total Financial Assets
Level 1
Level 2
Level 3
Total
Amount
41,632
-
-
41,632
41,632
-
-
41,632
Foreign-currency Derivatives
326
-
-
326
Total Financial Liabilities
326
-
-
326
Financial Liabilities
34
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – INFORMATION ON THE FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012 AND 2011
(Continued)
1. Financial Risk Management (Continued)
1.3 Fair Value Estimation (Continued)
The fair value of financial instruments traded in active markets is based on quoted prices as of the date of the
financial statements. A market is considered to be active if quoted prices are readily and regularly available from
a 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 and include cash
and cash equivalents, as well as foreign-currency derivatives.
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. 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, 2012 and 2011 is disclosed below:
December 31, 2012
In Thousands of AR$
Book Value
Fair Value
Financial Assets
Cash and Cash Equivalents
Receivables from Services
Other Receivables
Total Financial Assets
197,145
1,390,761(1)
11,392
1,599,298
197,145
1,563,099
11,392
1,771,636
Financial Liabilities
Accounts Payable
Bank and Financial Payables
569,720
740,113
560,108
643,336
1,309,833
1,203,444
Total Financial Liabilities
(1) It corresponds to total receivables from services net of the allowance for credit losses for thousands of AR$ 140,736.
35
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – INFORMATION ON THE FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012 AND 2011
(Continued)
1. Financial Risk Management (Continued)
1.3 Fair Value Estimation (Continued)
December 31, 2011
In Thousands of AR$
Book Value
Fair Value
Financial Assets
Cash and Cash Equivalents
Receivables from Services
Other Receivables
Total Financial Assets
52,788
1,084,176(1)
11,595
1,148,559
52,788
1,143,477
11,595
1,207,860
Financial Liabilities
Accounts Payable
Bank and Financial Payables
430,594
461,883
428,028
441,244
Total Financial Liabilities
892,477
869,272
(1) It corresponds to total receivables from services net of the allowance for credit losses for thousands of AR$ 59,778.
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, 2012 and 2011:
December 31,
2012
In Thousands of AR$
Financial Assets
Cash and Cash Equivalents
Receivables from Services
Investments in Other
Companies
Other Receivables
Total Financial Assets
Financial Liabilities
Accounts Payable
Bank and Financial
Payables
Total Financial Liabilities
Assets / Liabilities Measured at Fair Value
Assets /
Held for
Liabilities at
Derivatives
Intermediation
Fair Value
Assets / Liabilities at
Amortized Cost
Total
Amount
26,559
-
35,107
-
-
135,479
1,390,761
197,145
1,390,761
15,592
-
-
-
15,592
42,151
35,107
23
23
11,369
1,537,609
11,392
1,614,890
-
-
-
569,720
569,720
-
740,113
740,113
-
-
1,309,833
1,309,833
-
36
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – INFORMATION ON THE FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012 AND 2011
(Continued)
1. Financial Risk Management (Continued)
1.4 Financial Instruments by Category (Continued)
December 31,
2011
In Thousands of AR$
Financial Assets
Cash and Cash Equivalents
Receivables from Services
Other Receivables
Total Financial Assets
Financial Liabilities
Accounts Payable
Bank and Financial
Payables
Total Financial Liabilities
Assets / Liabilities Measured at Fair Value
Assets /
Held for
Liabilities at
Derivatives
Intermediation
Fair Value
Assets / Liabilities at
Amortized Cost
Total
Amount
20,299
20,299
21,333
21,333
-
11,156
1,084,176
11,595
1,106,927
52,788
1,084,176
11,595
1,148,559
-
-
-
430,594
430,594
326
461,557
461,883
326
892,151
892,477
-
-
NOTE 5 – SEGMENT REPORTING
The Company’s Management analyzes, follows up and controls its businesses based on the following
geographic segments: Mendoza, San Juan, San Luis, Northwest Argentina and South Argentina.
37
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 5 – SEGMENT REPORTING (Continued)
Below are the results of operations by segment for the fiscal years ended December 31, 2012 and 2011:
Item
Mendoza
San Juan
Northwest
South
Argentina Argentina
(1)
(2)
In Thousands of AR$
San Luis
Nonallocable
Total
Fiscal Year Ended December 31,
2012
Revenues from Services
212,220
51,015
30,229
117,551
42,767
-
Expenses from Services
34,462
9,501
5,227
22,091
5,930
-
77,211
Revenues from Financing
129,989
33,863
21,121
73,918
32,675
-
291,566
Expenses from Financing
73,088
13,203
8,268
28,835
12,154
-
135,548
Provision for Credit Losses, Net
Depreciation of Property, Plant and
Equipment
Amortization of Intangible Assets
Net Income from Short-term
Investments
Income Tax
35,267
10,211
9,818
47,068
16,133
-
118,497
2,894
4,255
385
566
204
300
1,387
2,041
452
665
-
5,322
7,827
8,231
-
2,061
-
1,225
-
4,558
-
1,734
-
48,017
17,809
48,017
Net Income
65,495
13,905
6,750
952
5,345
-
92,447
313,918
Fiscal Year Ended December 31,
2011
Revenues from Services
453,782
150,621
36,751
22,818
75,325
28,403
-
Expenses from Services
25,005
6,052
3,754
14,572
4,337
-
53,720
Revenues from Financing
Expenses from Financing
Provision for Credit Losses, Net
Depreciation of Property, Plant and
Equipment
Amortization of Intangible Assets
Net Income from Short-term
Investments
Income Tax
84,601
37,943
6,100
21,788
7,797
1,700
14,285
5,118
1,597
41,294
15,426
5,323
18,499
6,549
2,128
-
180,467
72,833
16,848
2,391
2,650
325
361
164
182
1,333
1,478
378
419
-
4,591
5,090
4,065
-
1,025
-
632
-
2,157
-
779
-
51,883
8,658
51,883
Net Income for the Fiscal Year
65,126
13,035
8,033
4,189
5,293
95,676
(1) Northwest Argentina comprises the Provinces of: La Rioja, Catamarca, Tucumán, Santiago, Salta (Capital, Oran and Metan) and Jujuy.
(2) South Argentina comprises the Provinces of: La Pampa, Neuquén and Río Negro.
38
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 5 – SEGMENT REPORTING (Continued)
The financial position by segment as of December 31, 2012 is as follows:
ASSETS
Segment Reporting as of 12.31.2012
Northwest
Mendoza San Juan
San Luis
Argentina
(1)
South
Argentina
(2)
Nonallocable
Total
Cash and Cash Equivalents
85,187
22,947
13,687
55,005
20,319
-
197,145
Receivables from Services
600,958
161,877
96,554
388,034
143,338
-
1,390,761
1,057
4,054
1,126
3,921
1,234
-
11,392
Investments
-
-
-
-
-
25,260
25,260
Deferred Income Tax Assets
-
-
-
-
-
38,523
38,523
Investments in Other Companies
-
-
-
-
-
15,592
15,592
7,021
252
190
742
464
-
8,669
10,169
-
-
-
-
-
10,169
704,392
189,130
111,557
447,702
165,355
79,375
1,697,511
Accounts Payable
246,180
66,312
39,553
158,957
58,718
-
569,720
Bank and Financial Payables
Other Receivables
Property, Plant and Equipment
Intangible Assets
Total Assets
LIABILITIES
445,078
60,470
36,068
144,952
53,545
-
740,113
Salaries and Payroll Taxes
11,790
1,182
874
5,175
1,714
-
20,735
Taxes Payable
15,891
924
1,063
5,267
53
-
23,198
Other Liabilities
8,033
-
-
-
-
-
8,033
-
-
-
-
-
29,830
29,830
726,972
128,888
77,558
314,351
114,030
5,616
35,446
5,616
1,397,245
Provision for Income Tax, Net
Provisions
Total Liabilities
(1) Northwest Argentina comprises the Provinces of: La Rioja, Catamarca, Tucumán, Santiago, Salta (Capital, Oran and Metan) and
Jujuy.
(2) South Argentina comprises the Provinces of: La Pampa, Neuquén and Río Negro.
39
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 5 – SEGMENT REPORTING (Continued)
The financial position by segment as of December 31, 2011 is as follows:
ASSETS
Segment Reporting as of 12.31.2011
Northwest
Mendoza San Juan
San Luis
Argentina
(1)
South
Argentina
(2)
Nonallocable
Total
Cash and Cash Equivalents
22,408
6,424
4,119
14,197
5,640
-
52,788
Receivables from Services
460,212
131,944
84,607
291,581
115,832
-
1,084,176
5,078
2,489
609
2,581
838
-
11,595
Other Receivables
Deferred Income Tax Assets
-
-
-
-
-
18,906
18,906
Property, Plant and Equipment
6,987
316
17
898
681
-
8,899
Intangible Assets
8,828
-
-
-
-
-
8,828
503,513
141,173
89,352
309,257
122,991
18,906
1,185,192
Accounts Payable
182,779
52,403
33,603
115,805
46,004
-
430,594
Bank and Financial Payables
209,950
53,274
34,161
117,729
46,769
-
461,883
8,212
824
609
3,605
1,194
-
14,444
Taxes Payable
12,107
635
313
2,781
355
Other Liabilities
4,242
-
-
-
-
-
4,242
Provision for Income Tax, Net
-
-
-
-
-
24,696
24,696
Provisions
-
-
-
-
-
5,861
5,861
417,290
107,136
68,686
239,920
94,322
30,557
957,911
Total Assets
LIABILITIES
Salaries and Payroll Taxes
Total Liabilities
16,191
(1) Northwest Argentina comprises the Provinces of: La Rioja, Catamarca, Tucumán, Santiago, Salta (Capital, Oran and Metan) and Jujuy.
(2) South Argentina comprises the Provinces of: La Pampa, Neuquén and Río Negro.
40
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 6 – REVENUES FROM SERVICES
Fiscal Year
Ended
12.31.12
12.31.11
In Thousands of AR$
Merchants’ (comercios amigos) fees
Revenues from Account Statement
Issuance
Plan Fees
164,538
124,112
117,485
43,374
75,160
21,602
Commission Earned on Sale of Insurance
Commissions Earned on Loans
33,590
31,931
26,554
21,685
Commission Earned on Other Brands
24,038
19,429
Revenues from CIMA Magazine
21,169
13,973
Card Renewal
Other Revenues from Services
16,350
1,307
10,339
1,064
453,782
313,918
Total Revenues from Services
NOTE 7 – EXPENSES FROM SERVICES
Fiscal Year
Ended
12.31.12
12.31.11
In Thousands of AR$
Account Statement Cost
Collection Expenses
SMS Service
CIMA Magazine Cost
Center of Authorizations
Other Expenses from Services
Card Issuance Cost
Total Expenses from Services
16,825
21,293
4,658
12,631
1,666
19,045
11,999
15,206
3,877
8,245
1,374
12,647
1,093
372
77,211
53,720
NOTE 8 – REVENUES FROM FINANCING
Fiscal Year
Ended
12.31.12
12.31.11
In Thousands of AR$
Interest on Financing
Interest on Payment in Arrears and Penalty
Interest
239,738
150,504
51,828
29,963
Total Revenues from Financing
291,566
180,467
41
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 9 – EXPENSES FROM FINANCING
Fiscal Year
Ended
12.31.12
12.31.11
In Thousands of AR$
Interest on Financing and Other Items
Exchange Difference
Loss on Futures Transactions
123,767
11,093
688
62,173
8,999
1,661
Total Expenses from Financing
135,548
72,833
NOTE 10 – NET INCOME FROM SHORT-TERM INVESTMENTS
Fiscal Year
Ended
12.31.12
12.31.11
In Thousands of AR$
Interest on Investments in Time Deposits
Income from Mutual Funds
Interest on Investments
Total Net Income from Short-term
Investments
15,009
2,097
703
7,700
958
-
17,809
8,658
NOTE 11 – PROVISION FOR CREDIT LOSSES, NET OF RECOVERIES
Fiscal Year
Ended
12.31.12
12.31.11
In Thousands of AR$
Provision for Credit Losses
Recoveries of Receivables
Total Provision for Credit Losses
129,105
(10,608)
118,497
26,981
(10,133)
16,848
42
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 12 – TAXES AND RATES
Fiscal Year Ended
12.31.12
12.31.11
In Thousands of AR$
Turnover Tax
Tax on Bank Debits and Credits
Other Taxes, Rates and Assessments
Total Taxes and Rates
32,605
13,453
20,347
11,048
8,131
4,568
54,189
35,963
NOTE 13 – PERSONNEL EXPENSES
Fiscal Year Ended
12.31.12
12.31.11
In Thousands of AR$
Salaries and Payroll Taxes
Personnel Bonuses
158,821
5,479
106,938
5,417
Travel Expenses and Per Diems
5,074
3,742
Other Personnel Expenses
5,475
4,876
174,849
120,973
Total Personnel Expenses
NOTE 14 – ADVERTISING EXPENSES
Fiscal Year
Ended
12.31.12
12.31.11
In Thousands of AR$
National Advertising
Business Promotions
Total Advertising Expenses
8,293
9,886
6,141
8,008
18,179
14,149
NOTE 15 – DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT AND AMORTIZATION OF
INTANGIBLE ASSETS
Fiscal Year
Ended
12.31.12
12.31.11
In Thousands of AR$
Depreciation of Property, Plant and
Equipment
Amortization of Intangible Assets
Total Depreciation of Property, Plant
and Equipment, and Amortization of
Intangible Assets
5,322
7,827
4,591
5,090
13,149
9,681
43
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 16 – OTHER NET OPERATING EXPENSES
Fiscal Year
Ended
12.31.12
12.31.11
In Thousands of AR$
Rentals
Electricity, Gas and Communications
Third parties’ Fees
Cleaning Services
Directors’ Fees
Reporting Process and Other
Bank and Financial Expenses
Stationery and Office Supplies
Other Income and Expenses / Miscellaneous
Security and Insurance
7,782
4,457
1,680
3,443
4,660
10,371
2,648
2,033
(7,937)
5,520
6,007
3,099
881
2,337
3,800
11,200
1,856
1,169
(2,781)
3,866
Total Other Net Operating Expenses
34,657
31,434
NOTE 17 – INCOME FROM VALUATION OF INVESTMENTS IN OTHER COMPANIES
Fiscal Year
Ended
12.31.12
12.31.11
In Thousands of AR$
Tarjeta Naranja S.A.
Cobranzas Regionales S.A.
Total Income from Valuation of Investments
in Other Companies
3,586
-
117
3,586
117
44
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(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
Balances as of December 31, 2010
23,093
Income Tax Accrued during the Fiscal Year (1)
(4,187)
-
Other Items
2010 Income Tax Payment
Balances as of December 31, 2011
Provision for
Income Tax
Income Tax
Accrued
In Thousands of AR$
28,577
15,821
47,696
426
-
51,883
-
(29,003)
18,906
-
47,696
51,883
Other Items
-
45
-
2011 Income Tax Payment
-
(47,741)
-
Income Tax Accrued during the Fiscal Year (2)
19,617
67,634
48,017
Balances as of December 31, 2012
38,523
67,634
48,017
(1)
It relates to the income tax proportion that, based on the estimations made by Management, should be paid in May 2012
according to the taxable income accrued during the fiscal year ended December 31, 2011.
(2)
It relates to the income tax amount that, based on the estimations made by Management at the date of these financial statements,
should be paid in May 2013 according to the taxable income accrued during the fiscal year ended December 31, 2012.
The income tax amount payable estimated by Management, net of prepayments, as of December 31, 2012,
December 31, 2011 and December 31, 2010, is as follows:
12.31.12
Provision for Income Tax
Prepayment
Balance of the Provision for Income Tax Payable
12.31.11
In Thousands of AR$
(67,634)
(47,696)
37,804
23,000
(29,830)
(24,696)
12.31.10
(28,577)
9,386
(19,191)
As of December 31, 2012 and December 31, 2011, the net deferred income tax assets derived from the
information included in the previous tables amount to thousands of AR$ 38,523 and AR$ 18,906, respectively.
Their composition as of those dates is detailed below:
Allowance for Credit Losses
Financial Charges
Others
Totals
Balances as of
Charge to Income
12.31.11
for the Fiscal Year
In Thousands of AR$
17,045
17,232
3,590
193
(1,729)
2,192
18,906
19,617
Balances
as of
12.31.12
34,277
3,783
463
38,523
45
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(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 as of December 31, 2012 and
2011 to that which would result from applying the tax rate in force to book income:
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 Investments in Other Companies
- Others
Total Income Tax Charge for the Fiscal Year
12.31.12
In Thousands
of AR$
140,464
35%
49,162
12.31.11
In Thousands
of AR$
147,559
35%
51,646
(1,255)
110
48,017
(41)
277
51,883
The following chart shows the reconciliation of income tax charged to income to the tax assessed for the fiscal
year for tax purposes:
Total Book Income Tax Charge for the Fiscal Year
- Temporary Differences at the Tax Rate
- Additions/(Deletions)
Allowance for Credit Losses
12.31.12
In Thousands
of AR$
12.31.11
In Thousands
of AR$
48,017
51,883
17,232
(4,014)
193
1,881
2,192
(2,054)
67,634
47,696
Financial Charges
Others
Total Tax for the Fiscal Year Assessed for Tax Purposes
NOTE 19 – CASH AND CASH EQUIVALENTS
12.31.12
Cash in Banks
Cash and Petty Cash
Time Deposits (1)
Mutual Funds
Total Cash and Cash Equivalents
(1)
12.31.11
In Thousands of AR$
10,023
16,536
135,479
35,107
197,145
5,819
14,480
11,156
21,333
52,788
12.31.10
4,551
9,763
20,862
9,224
44,400
As of December 31, 2012, out of these investments thousands of AR$ 135,479 relate to investments easily converted into cash,
which are included in the Statement of Cash Flows. As of December 31, 2011, thousands of AR$ 1,040 relate to restricted
investments (see Note 39) and thousands of AR$ 10,116 relate to investments easily converted into cash, which are included in
the Statement of Cash Flows.
46
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 20 – INVESTMENTS
12.31.12
12.31.11
In Thousands of AR$
12.31.10
Current
Government Securities
Corporate Bonds
Total Current Investments
10,102
2,896
12,998
-
-
Non-current
Corporate Bonds
Total Non-current Investments
12,262
12,262
-
-
-
NOTE 21 – RECEIVABLES FROM SERVICES
12.31.12
Current
Trade Debtors
Interest and Administrative Charges to be Accrued
Subtotal
Allowance for Credit Losses
Total Current Receivables from Services
Non-current
Trade Debtors
Interest and Administrative Charges to be Accrued
Total Non-current Receivables from Services
12.31.11
In Thousands of AR$
1,683,703
(161,676)
12.31.10
1,522,027
(140,736)
1,381,291
1,216,526
(90,792)
1,125,734
(59,778)
1,065,956
878,226
(60,081)
818,145
(63,332)
754,813
11,533
(2,063)
9,470
22,404
(4,184)
18,220
29,291
(5,115)
24,176
Changes in the allowance for credit losses as of December 31, 2012, December 31, 2011 and December 31,
2010 are as follows:
12.31.12
Balances at Beginning of the Fiscal Year
Increases for the Period / Fiscal Year
Uses and Recoveries for the Period / Fiscal
Year
Allowance for Credit Losses as of Fiscal
Year-end
12.31.11
In Thousands of AR$
12.31.10
59,778
129,105
63,332
26,981
42,417
66,293
(48,147)
(30,535)
(45,378)
140,736
59,778
63,332
47
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 22 – OTHER RECEIVABLES
12.31.12
Current
Court Deposits
Advances Receivable
Insurance, Rentals and Other Prepaid Expenses
Advances to Personnel
Advances to Suppliers and Other Receivables
Exchange Rate Hedge
Receivables from Advertising and Others
Cards, Promotion Materials
Total Other Current Receivables
Non-current
Security Deposits
Total Other Non-current Receivables
12.31.11
In Thousands of AR$
12.31.10
1,092
1,583
1,024
204
23
4,843
2,203
10,972
4,993
1,121
402
459
3,184
1,102
11,261
1,318
733
707
185
200
2,032
652
5,827
420
420
334
334
395
395
48
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 23 – INVESTMENTS IN OTHER COMPANIES
Issuing Company
Face
Value
Type
Amount
Interest
Percentage
Book
Value
12.31.12
Book
Value
12.31.11
Principal Line of
Business
INFORMATION ON THE ISSUING COMPANY
Latest Accounting Information
Registered Office
Date
Capital
Income
Stock
In Thousands of AR$
Tarjeta Naranja
S.A.
10,000
24
1%
15,592
of
Equity
Interest
-
Sucre 151 –
Córdoba
12.31.12
50,622
431,609
1,559,176
NOTE 24 – PROPERTY, PLANT AND EQUIPMENT
ORIGINAL VALUES
At the
Beginnin
g of the
Fiscal
Year
Increases
At Fiscal
year-end
Main Account
Land
Leasehold Improvements
Fixtures
Hardware
Furniture and Office
Supplies
Totals as of 12.31.12
Totals as of 12.31.11
6,857
6,613
19,820
In Thousands of AR$
95
95
1,066
7,923
817
7,430
2,251
22,071
of Votes
In Thousands of AR$
Credit Card
Administrator
Non-endorsable registered
common shares entitled to
one vote each
Percentage
Shareholder
s’ Equity
DEPRECIATION
Accumulate
For the Fiscal Year
d at the
Beginning of
the Fiscal
Year
Percentag Increases
e%
NET BOOK VALUE AS OF
Accumulated
at Fiscal Yearend
12.31.12
In Thousands of AR$
95
5,891
2,032
5,139
2,291
19,421
2,650
5,021
4,264
16,346
(a)
20
50
870
875
3,075
20
502
3,164
1,601
5,322
4,591
33,615
28,293
8,669
3,902
863
4,765
2,662
37,192
29,688
5,092
7,504
42,284
37,191
28,293
23,702
(a) Depreciation of improvements is calculated based on the term of the real property lease agreement.
12.31.11
1,836
2,349
3,474
1,240
8,899
1%
1%
49
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 25 – INTANGIBLE ASSETS
ORIGINAL VALUES
At the
Beginning
of the Fiscal
Year
Increases
AMORTIZATION
For the Fiscal Year
At Fiscal
Year-end
Accumulated
at the
Beginning of
the Fiscal
Year
NET BOOK VALUE AS OF
Percentage %
Increases
Main Account
Application Software
Totals as of 12.31.12
Totals as of 12.31.11
23,677
23,677
16,208
In Thousands of AR$
9,168
32,845
9,168
32,845
7,469
23,677
14,849
14,849
9,759
50% (a)
7,827
7,827
5,090
Accumulated
at Fiscal
Year-end
12.31.12
In Thousands of AR$
22,676
10,169
22,676
10,169
14,849
(a) The percentage relates to most of the account. However, the account includes software in the aggregate amount of thousands of AR$ 4,097, which is amortized over five years.
12.31.11
8,828
8,828
50
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 26 – ACCOUNTS PAYABLE
12.31.12
Merchants (Comercios Amigos)
Suppliers
Sundry Provisions
Collections on Account of Third Parties
Total Accounts Payable
12.31.11
In Thousands of AR$
554,376
419,691
4,986
4,489
9,408
6,024
950
390
569,720
430,594
12.31.10
313,601
2,165
4,808
708
321,282
NOTE 27 – BANK AND FINANCIAL PAYABLES
Current
Corporate Bonds
Bank Loans
Overdrafts
Exchange Rate Hedge
Leases Payable
Others
Total Current Bank and Financial Payables
Non-current
Corporate Bonds
Bank Loans
Total Non-current Bank and Financial
Payables
12.31.12
12.31.11
In Thousands of AR$
12.31.10
252,794
266,732
519,526
159,245
181,134
6,999
326
7
347,711
170,451
103,489
11,999
608
1,134
743
288,424
202,254
18,333
104,172
10,000
8,829
57,389
220,587
114,172
66,218
NOTE 28 – SALARIES AND PAYROLL TAXES
12.31.12
Employer and Employee Contributions to be
Deposited
Provision for Personnel Bonuses, Vacation
and Others
Total Salaries and Payroll Taxes Payable
12.31.11
In Thousands of AR$
12.31.10
7,771
4,766
2,454
12,964
9,678
5,185
20,735
14,444
7,639
51
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 29 – TAXES PAYABLE
12.31.12
Turnover Tax Payable
Tax Withholdings and Collections Made
from Third Parties
Stamp Tax Payable
VAT Balance Payable
Miscellaneous
Total Taxes Payable
12.31.11
In Thousands of AR$
3,366
2,303
12.31.10
1,416
6,497
4,594
3,117
3,060
9,586
689
23,198
2,116
6,988
190
16,191
1,608
5,040
185
11,366
NOTE 30 – OTHER LIABILITIES
12.31.12
Directors’ Security Deposits
Directors’ and Statutory Auditors’ Fees
Miscellaneous
Advanced Payments to Directors
Total Other Liabilities
12.31.11
In Thousands of AR$
5
5
4,660
3,800
3,743
822
(375)
(385)
8,033
4,242
NOTE 31 – ADJUSTMENTS TO CALCULATE THE NET CASH FLOW AND CASH
EQUIVALENTS RESULTING FROM OPERATING ACTIVITIES
Allowance for Credit Losses
Provisioning for Contingencies, Net of Recoveries
Provision for Vacation Payable
Provision for Bonuses Payable
Provision for Directors’ and Statutory Auditors' Fees
(Gain) on Futures Transactions – Net of Settlements
Exchange Differences
Income from Investments in Other Companies
Depreciation of Property, Plant and Equipment
Amortization of Intangible Assets
Total
12.31.12
12.31.11
In Thousands of AR$
129,105
26,981
(245)
201
8,057
5,784
4,635
3,889
4,660
3,800
(351)
(279)
11,093
8,999
(3,586)
(117)
5,322
4,591
7,827
5,090
166,517
58,939
12.31.10
5
2,181
(143)
2,043
52
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 32 – CHANGES IN OPERATING ASSETS
Increase in Receivables from Services
Decrease / (Increase) in Other Receivables
Total
12.31.12
12.31.11
In Thousands of AR$
(435,690)
(332,168)
202
(5,372)
(435,488)
(337,540)
NOTE 33 – CHANGES IN OPERATING LIABILITIES
Decrease in Salaries and Payroll Taxes
Decrease in Taxes Payable and Provision for Income Tax
Decrease in Other Liabilities
Total
12.31.12
12.31.11
In Thousands of AR$
(6,400)
(2,872)
(55,493)
(37,365)
(869)
(1,601)
(62,762)
(41,838)
NOTE 34 – 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. Provisions for losses reflect a fair estimation of the
losses to be incurred based on the information made available by Management as of the date of preparation of
the financial statements. 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 the Federal
Public Revenue Authority (Administración Federal de Ingresos Públicos – AFIP) and the General Tax Board
(Dirección General de Rentas - DGR) of the Province of Mendoza:
(a) Federal Public Revenue Authority:
On December 19, 2003, Argentine tax authorities (AFIP-DGI) notified the Company about a resolution whereby
such agency made an ex-officio income tax assessment for 1998. The claim made by tax authorities for the tax
amounts to thousands of AR$ 566 for principal and thousands of AR$ 2,073 for interest (excluding fines).
The assessment is based on a challenge made by such collecting agency as regards credit losses the Company
considered in this category in its tax return for such tax period.
53
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 34 – PROVISIONS (Continued)
(2) Tax Claims (Continued)
(a) Federal Public Revenue Authority (Continued)
It is noteworthy that the tax claim is grounded on dismissing the criterion subject to observation for the Company
to deduct credit losses.
After several stages of the proceedings and favorable decisions, on September 28, 2012, the Company was
notified of the judgment entered on September 6, 2012 by the Court of Appeals in Administrative Matters, Room
V, whereby the appeal filed by tax authorities was dismissed. Accordingly, the Company decided to reverse the
provisions previously made.
(b) Municipal Claims:
During FY 2007, the Company began receiving notices from some municipalities of the Provinces of Mendoza
and San Luis.
In these notices, municipal agencies claim the payment of taxes for the Company’s advertising and publicity in
these cities. The Company has filed in each case the relevant answers to these notices in the understanding that
the claims are not according to law and should not be absorbed by the Company. The evolution of each dispute
has been different in the various jurisdictions.
In view of the facts described above and those that occurred in the past, the Company has decided to make
provisions for a portion of the claims, although it understands that it has enough legal grounds so as to support
the position held to date and that it will continue supporting in the different administrative or court environments.
Municipal claims total thousands of AR$ 5,819 as of December 31, 2012 (as of December 31, 2011, they total
thousands of AR$ 3,739), excluding interest and fines.
The breakdown and changes of the provisions recorded as of December 31, 2012 are as follows:
Type
Balance
12.31.11
Tax Claims
Municipal Claims
Labor Claims
Others
1,822
3,289
562
188
Total
5,861
Deletes
Adds
Payments
In Thousands of AR$
1,670
(147)
272
(150)
25
(14)
1,917
(311)
Recoveri
es
Balance
12.31.12
(1,822)
(28)
(51)
-
4,784
633
199
(1,901)
5,616
54
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 34 – PROVISIONS (Continued)
(2) Tax Claims (Continued)
The breakdown and changes of the provisions recorded during the year ended December 31, 2011 are as
follows:
Balance
12.31.10
Type
Adds
Deletes
Payments
Recoveries
Tax Claims
Municipal Claims
Labor Claims
Others
1,781
3,206
591
81
In Thousands of AR$
41
1,469
(1,240)
160
(189)
107
-
Total
5,659
1,777
(1,429)
Balance
12.31.11
(146)
-
1,822
3,289
562
188
(146)
5,861
NOTE 35 – CORPORATE BONDS
The Company has issued corporate bonds according to the programs and characteristics described below. The
book principal, plus financial income (expenses) accrued as of December 31, 2012 of the respective series,
amounts to thousands of AR$ 455,048 (as of December 31, 2011, they amount to thousands of AR$ 263,417),
out of which thousands of AR$ 252,794 (as of December 31, 2011, AR$ 159,245) was disclosed as current and
thousands of AR$ 202,254 (as of December 31, 2011, AR$ 104,172) as non-current.
A) Global Program for a Maximum Aggregate Amount of US$ 80,000,000
On March 22, 2007, the Company’s Shareholders’ Meeting authorized to increase the amount of the Global
Program of Corporate Bonds effective for a maximum amount of US$ 35,000,000 by US$ 45,000,000, resulting
in a maximum aggregate amount of US$ 80,000,000. This increase was, in turn, approved by the National
Securities Commission through Resolution No. 15627 dated May 2, 2007.
Below is the history of the effective program:
Authorized Amount in US$
(U.S. Dollars)
(*)
Type of Corporate
Bond
Simple, not convertible
into shares
US$ 35,000,000 (Extension
Simple, not convertible
of the term)
into shares
US$ 80,000,000 (Increase of Simple, not convertible
the Program)
into shares
(*) Or its equivalent in other currencies.
US$ 35,000,000
Term of
Program
Date of Approval by
Shareholders’ Meeting
5 years
10.21.99 ratified on 11.22.99
5 years
01.06.05 ratified on 01.17.05
5 years
03.22.07 ratified on 04.09.07
Approval by CNV
Resolution No. 13217
dated 01.20.00
Resolution No. 15006
dated 01.27.05
Resolution No. 15627
dated 05.02.07
55
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 35 – CORPORATE BONDS (Continued)
The Company had the following corporate bonds outstanding issued under this Global Program, the principal of
which was fully settled on June 14, 2012.
Date of
Issuance
Series
Face Value
Type of Corporate
Bond
Estimated
Term
Rate
Book value
12.31.12
12.31.11
In Thousands of AR$
06.14.07
XVIII
AR$
200,063,500
Simple, not
convertible into
shares
5 years
12%
-
10,015
Issuance
Authorized by
the CNV
05.24.07 and
06.14.07
B) Global Program for a Maximum Aggregate Amount of US$ 120,000,000
On April 6, 2010, the Company’s Board of Directors approved the draft informative prospectus for the issuance
of simple corporate bonds for US$ 120,000,000, which, in turn, was approved by the National Securities
Commission through Resolution No. 16328 dated May 18, 2010.
Below is the history of the effective program:
Authorized Amount in US$
(U.S. Dollars)
(*)
Type of Corporate
Bond
Simple, not
convertible into
shares
(*) Or its equivalent in other currencies.
US$ 120,000,000
Term of
Program
5 years
Date of Approval by
Shareholders’ Meeting
03.30.10 ratified on 04.06.10
Approval by CNV
Resolution No. 16328
dated 05.18.10
56
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 35 – CORPORATE BONDS (Continued)
The Company has the following corporate bonds outstanding issued under this Global Program:
Date of
Issuance
Corporat
e Bond
Class No.
Face Value
Type of
Corporate
Bond
Term
Book value
In Thousands of
AR$
12.31.12 12.31.11
Issuance
Authorized
by the CNV
Maturity
Date
Rate
-
51,750
04.06.11
04.15.11
Class IV
AR$
50,000,000
Simple, not
convertible
into shares
270
days
01.10.12
Simple
arithmetic
average of
private Badlar
rates, plus a
2.85% spread
07.29.11
Class V
Series I
AR$
12,931,000
Simple, not
convertible
into shares
270
days
04.24.12
14%
-
13,066
07.21.11
81,252
76,533
07.21.11
07.29.11
Class V
Series II
AR$
77,305,000
Simple, not
convertible
into shares
550
days
01.29.13
Simple
arithmetic
average of
private Badlar
rates, plus a 4%
spread
10.04.11
Class VI
Series I
US$
18,882,579
Simple, not
convertible
into shares
365
days
10.04.12
7.5%
-
81,191
09.21.11
10.04.11
Class VI
Series II
US$
7,183,840
Simple, not
convertible
into shares
731
days
10.04.13
8.5%
36,347
30,862
09.21.11
-
-
01.16.12
45,571
-
01.16.12
01.24.12
Class VII
Series I
AR$
106,130,952
Simple, not
convertible
into shares
270
days
10.19.12
01.24.12
Class VII
Series II
AR$
43,869,048
Simple, not
convertible
into shares
547
days
07.24.13
Simple
arithmetic
average of
private Badlar
rates, plus a
2.19% spread
Simple
arithmetic
average of
private Badlar
rates, plus a
2.80% spread
57
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 35 – CORPORATE BONDS (Continued)
Date of
Issuance
Corporat
e Bond
Class No.
07.31.12
Class VIII
Series I
Face Value
Type of
Corporate Bond
AR$
50,725,000
Simple, not
convertible into
shares
Book value
In Thousands of
AR$
12.31.12 12.31.11
Issuance
Authorized
by the CNV
Term
Maturity
Date
Rate
270
days
04.27.13
17.75%
52,307
-
07.18.12
101,983
-
07.18.12
07.31.12
Class VIII
Series II
AR$
99,275,000
Simple, not
convertible into
shares
549
days
01.31.14
Simple
arithmetic
average of
private
Badlar
rates, plus a
3.75%
spread
11.20.12
Class IX
Series I
AR$
33,375,000
Simple, not
convertible into
shares
270
days
08.17.13
19.25%
33,788
-
11.06.12
05.20.14
Simple
arithmetic
average of
private
Badlar
rates, plus a
4.50%
spread
103,800
-
11.06.12
11.20.12
Class IX
Series II
AR$
102,603,00
0
Simple, not
convertible into
shares
546
days
- Class IV
During the fiscal year, the principal outstanding of Class IV Corporate Bonds for AR$ 50,000,000 was fully
settled on January 10, 2012.
- Class V
On June 1, 2011, the Company’s Board of Directors approved the issuance of Class V Corporate Bonds, to be
issued in one or two series, for a maximum global face value of up to thousands of AR$ 100,000. On July 29,
2011, the Company placed the respective Series I and II Corporate Bonds for a face value of thousands of AR$
12,931 and thousands of AR$ 77,305, respectively, according to the following characteristics:
- Series I: The principal will be paid in only one installment within 270 days as from the date of issuance.
Corporate Bonds accrue interest at an annual fixed nominal rate of 14%. Interest was paid on October 27, 2011,
January 25, 2012 and on the maturity date, April 24, 2012. As of September 30, 2012, the Company settled
principal and interest for Class V Series I Corporate Bonds.
58
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 35 – CORPORATE BONDS (Continued)
- Class V (Continued)
- Series II: The principal will be paid in only one installment within 550 days as from the date of issuance.
Corporate Bonds accrue interest at a variable rate, which will be equal to the benchmark rate (private Badlar 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), plus a cut-off margin equal to 4%. Interest is payable on October 29, 2011, January 29,
2012, April 29, 2012, July 29, 2012, October 29, 2012 and the maturity date, January 29, 2013.
- Class VI
On August 31, 2011, the Company’s Board of Directors approved the issuance of Class VI Corporate Bonds, to
be issued in one or two series, for a maximum global face value of up to US$ 50,000. On October 4, 2011, the
Company placed the respective Corporate Bonds Series I and Series II for a face value of thousands of US$
18,883 and thousands of US$ 7,184, respectively, according to the following characteristics:
- Series I: The principal will be paid in only one installment within 365 days as from the date of issuance.
Corporate Bonds accrue interest at an annual fixed nominal rate of 7.5%. Interest is payable on January 4, 2012,
April 4, 2012, July 4, 2012 and on the maturity date, October 4, 2012.
- Series II: The principal will be paid in only one installment within 731 days as from the date of issuance.
Corporate Bonds accrue interest at an annual fixed nominal rate of 8.5%. Interest is payable on January 4, 2012,
April 4, 2012, July 4, 2012, October 4, 2012, January 4, 2013, April 4, 2013, July 4, 2013 and on the maturity
date, October 4, 2013.
- Class VII
On January 6, 2012, the Company’s Board of Directors approved the issuance of Class VII Corporate Bonds, to
be issued in one or two series, for a maximum global face value of up to thousands of AR$ 150,000. On January
24, 2012, the Company placed the respective Series I and II Corporate Bonds for a face value of thousands of
AR$ 106,131 and thousands of AR$ 43,869, respectively, according to the following characteristics:
- Series I: The principal will be paid in only one installment within 270 days as from the date of issuance.
Corporate Bonds accrue interest at a variable rate, which will be equal to the benchmark rate (private Badlar 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), plus a cut-off margin equal to 2.19%. Interest will be payable on April 23, 2012, July 22,
2012, and on the maturity date, October 19, 2012.
- Series II: The principal will be paid in only one installment within 547 days as from the date of issuance.
Corporate Bonds accrue interest at a variable rate, which will be equal to the benchmark rate (private Badlar 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), plus a cut-off margin equal to 2.80%. Interest will be payable on April 24, 2012, July 24,
2012, October 24, 2012, January 24, 2013, April 24, 2013 and the maturity date, July 24, 2013.
59
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 35 – CORPORATE BONDS (Continued)
- Class VIII
On June 13, 2012, the Company’s Board of Directors approved the issuance of Class VIII Corporate Bonds, to
be issued in one or two series, for a maximum global face value of up to thousands of AR$ 150,000. On July 27,
2012, the Company placed the respective Series I and II Corporate Bonds for a face value of thousands of AR$
50,725 and thousands of AR$ 99,275, respectively, according to the following characteristics:
- Series I: The principal will be paid in only one installment within 270 days as from the date of issuance.
Corporate Bonds will accrue interest at an annual fixed nominal rate of 17.75%. Interest will be payable on
October 29, 2012, January 27, 2013, and on the maturity date, April 27, 2013.
- Series II: The principal will be paid in only one installment within 549 days as from the date of issuance.
Corporate Bonds will accrue interest at a variable rate, which will be equal to the benchmark rate (private Badlar
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), plus a cut-off margin equal to 3.75%. Interest will be payable on October 31, 2012,
January 31, 2013, April 30, 2013, July 31, 2013, October 31, 2013 and the maturity date, January 31, 2014.
- Class IX
On September 21, 2012, the Company’s Board of Directors approved the issuance of Class IX Corporate Bonds,
to be issued in one or two series, for a maximum global face value of up to thousands of AR$ 150,000. On
November 20, 2012, the Company placed the respective Series I and II Corporate Bonds for a face value of
thousands of AR$ 33,375 and thousands of AR$ 102,603, respectively, according to the following
characteristics:
- Series I: The principal will be paid in only one installment within 270 days as from the date of issuance.
Corporate Bonds will accrue interest at an annual fixed nominal rate of 19.25%. Interest will be payable on
February 18, 2013, May 19, 2013, and on the maturity date, August 17, 2013.
- Series II: The principal will be paid in only one installment within 546 days as from the date of issuance.
Corporate Bonds will accrue interest at a variable rate, which will be equal to the benchmark rate (private Badlar
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), plus a cut-off margin equal to 4.50%. Interest will be payable on February 20, 2013,
May 20, 2013, August 20, 2013, November 20, 2013, February 20, 2014 and the maturity date, May 20, 2014.
60
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 36 – EARNINGS PER SHARE
Below is a breakdown of the earnings per share as of December 31, 2012 and December 31, 2011:
Net Income for the Fiscal Year Stated in Pesos
Number of Common Shares Subscribed and Paid-in
Earnings per Common Share:
Basic
Diluted
12.31.12
12.31.11
In Thousands of AR$
92,447
95,676
3,233,283
3,233,283
28.59
28.59
29.59
29.59
The Company has neither issued preferred shares nor debt securities convertible into shares.
NOTE 37 – CHANGES IN THE GROUP’S STRUCTURE
On August 16, 2011, the Company transferred to its controlling company, Tarjetas Regionales S.A., 1,230 nonendorsable registered shares, with face value of AR$ 100 each and entitled to one vote per share, representing
12.30% of the capital stock of its subsidiary, Cobranzas Regionales S.A.
In addition, on March 23, 2012, the Company received from Tarjetas Regionales S.A. an offer to buy 24 nonendorsable registered common shares of Tarjeta Naranja S.A., with a face value of AR$ 10,000 each and
entitled to one vote per share, representing 1% of the capital stock and votes. The price offered was the equity
value they represent according to Tarjetas Naranja S.A.’s shareholders’ equity as per the accounting records as
of February 29, 2012 (thousands of AR$ 13,006), which was paid in cash by the Company.
NOTE 38 – RECEIVABLES FROM/PAYABLES TO AND TRANSACTIONS WITH COMPANIES UNDER
SECTION 33, LAW NO. 19550 AND OTHER RELATED PARTIES
Tarjetas Cuyanas S.A. is controlled by Tarjetas Regionales S.A., with registered office at Belgrano 1,415, City of
Mendoza, which holds 3,200,950 shares, representing a 99% interest in the Company’s capital stock. Banco de
Galicia y Buenos Aires S.A., with registered office at Tte. Gral. Juan D. Perón 407, Autonomous City of Buenos
Aires, has a 19.03% interest in Tarjetas Regionales S.A. In turn, Banco de Galicia y Buenos Aires S.A. is
nd
controlled by Grupo Financiero Galicia S.A., with registered office at Tte. Gral. Juan D. Perón 456, 2 floor,
Autonomous City of Buenos Aires, with a 94.93% interest.
Additionally, Tarjeta Naranja S.A., with registered office at Sucre 151, City of Córdoba, holds 32,333 shares,
representing 1% of Tarjetas Cuyanas S.A.’s capital stock.
61
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 38 – RECEIVABLES FROM/PAYABLES TO AND TRANSACTIONS WITH COMPANIES UNDER
SECTION 33, LAW NO. 19550 AND OTHER RELATED PARTIES (Continued)
The following are Tarjetas Cuyanas S.A.’s receivables from/payables to Companies under Section 33, Law
19550 as of December 31, 2012:
Companies under Section 33, Law No. 19550
Banco de Galicia
y Buenos Aires
S.A.
Tarjetas Regionales
S.A.
Total Companies
under Section 33,
Law No. 19550
In Thousands of AR$
ASSETS
Cash and Cash Equivalents
Other Receivables
133,847
1,236
-
133,847
1,236
Total Current Assets as of 12.31.12
135,083
-
135,083
Total Assets as of 12.31.12
135,083
-
135,083
LIABILITIES
Bank and Financial Payables
Other Liabilities
61,701
2,882
15,456
-
77,157
2,882
Total Current Liabilities as of 12.31.12
64,583
15,456
80,039
Total Liabilities as of 12.31.12
64,583
15,456
80,039
The following are Tarjetas Cuyanas S.A.’s receivables from/payables to other related parties as of December 31,
2012:
Other Related Parties
Cobranzas
Regionales
S.A.
Tarjeta Naranja
S.A.
Key Management
Staff
Total
In Thousands of AR$
ASSETS
Investments in Other Companies
Total Non-current Assets as of
12.31.12
-
15,592
-
15,592
-
15,592
-
15,592
Total Assets as of 12.31.12
-
15,592
-
15,592
856
LIABILITIES
Accounts Payable
-
-
856
Other Liabilities
Total Current Liabilities as of
12.31.12
-
-
4,285
4,285
856
-
4,285
5,141
Total Liabilities as of 12.31.12
856
-
2,285
5,141
62
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 38 – RECEIVABLES FROM/PAYABLES TO AND TRANSACTIONS WITH COMPANIES UNDER
SECTION 33, LAW NO. 19550 AND OTHER RELATED PARTIES (Continued)
The following are the transactions carried out by Tarjetas Cuyanas S.A. with Companies under Section 33, Law
19550 during the fiscal year ended December 31, 2012:
Companies under Section 33, Law No. 19550
Banco de Galicia y
Tarjetas
Total Companies
Bs. As. S.A.
Regionales S.A.
under Section 33,
Law No. 19550
In Thousands of AR$
REVENUES
Revenues from Services
Income from Time Deposits and Others
Total as of 12.31.12
EXPENSES
Bank Interest on Loans
Bank Expenses
Loss on Hedge Transactions
Total as of 12.31.12
34,810
9,679
44,489
-
34,810
9,679
44,489
14,892
2,240
280
17,412
1,287
1,287
16,179
2,240
280
18,699
The following are the transactions carried out by Tarjetas Cuyanas S.A. with other related parties during the
period ended December 31, 2012:
Other Related Parties
Galicia
Seguros
S.A.
REVENUES
Revenues from Services
Income from Investments in Other Companies
Total as of 12.31.12
EXPENSES
Directors’ and Statutory Auditors’ Fees
Collection Fees
Total as of 12.31.12
Cobranzas
Regionales
S.A.
Key
Management
Staff
In Thousands of AR$
Tarjeta Naranja
S.A.
Total
33,590
33,590
-
3,586
3,586
-
33,590
3,586
37,176
-
11,240
11,240
-
4,660
4,660
4,660
11,240
15,900
63
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 38 – RECEIVABLES FROM/PAYABLES TO AND TRANSACTIONS WITH COMPANIES UNDER
SECTION 33, LAW NO. 19550 AND OTHER RELATED PARTIES (Continued)
The following are Tarjetas Cuyanas S.A.’s receivables from/payables to Companies under Section 33, Law
19550 as of December 31, 2011:
Companies under Section 33, Law No. 19550
Banco de Galicia y Buenos Aires
S.A.
Total Companies under Section 33, Law
No. 19550
In Thousands of AR$
ASSETS
Cash and Cash Equivalents
10,240
10,240
Total Current Assets as of 12.31.11
10,240
10,240
Total Assets as of 12.31.11
10,240
10,240
LIABILITIES
Bank and Financial Payables
82,957
82,957
Total Current Liabilities as of 12.31.11
82,957
82,957
Total Liabilities as of 12.31.11
82,957
82,957
The following are Tarjetas Cuyanas S.A.’s receivables from/payables to other related parties as of December 31,
2011:
Other Related Parties
Cobranzas
Regionales
S.A.
Key Management
Staff
Total
In Thousands of AR$
LIABILITIES
Accounts Payable
Other Liabilities
Total Current Liabilities as of
12.31.11
Total Liabilities as of 12.31.11
1,360
-
3,415
1,360
3,415
1,360
3,415
4,775
1,360
3,415
4,775
64
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 38 – RECEIVABLES FROM/PAYABLES TO AND TRANSACTIONS WITH COMPANIES UNDER
SECTION 33, LAW NO. 19550 AND OTHER RELATED PARTIES (Continued)
The following are the transactions carried out by Tarjetas Cuyanas S.A. with Related Companies under Section
33, Law 19550 during the period ended December 31, 2011:
Companies under Section 33, Law No. 19550
Banco de Galicia y Bs. As.
Total
S.A.
In Thousands of AR$
REVENUES
Revenues from Services
Interest
21,685
5,103
21,685
5,103
Total as of 12.31.11
EXPENSES
Bank Interest on Loans
Bank Expenses
Loss on Hedge Transactions
26,788
26,788
14,941
1,239
1,661
14,941
1,239
1,661
Total as of 12.31.11
17,841
17,841
The following are the transactions carried out by Tarjetas Cuyanas S.A. with other related parties during the
period ended December 31, 2011:
Other Related Parties
Compañía
Financiera
Argentina S.A.
In Thousands of AR$
Galicia Seguros
S.A.
Cobranzas
Regionales S.A.
Key Management
Staff
26,554
-
-
-
26,554
-
-
129
-
129
-
117
-
-
117
26,554
117
129
-
26,800
Total
REVENUES
Revenues from Services
Interest
Income from Investments in Other
Companies
Total as of 12.31.11
EXPENSES
Directors’ and Statutory Auditors’
Fees
Collection Fees
Total as of 12.31.11
-
7,417
3,800
-
3,800
7,417
-
7,417
3,800
11,217
NOTE 39 - RESTRICTED ASSETS
As of December 31, 2012, there are no restricted assets included in the account ―Cash and Cash Equivalents‖.
As of December 31, 2011, the time deposits included in the account ―Cash and Cash Equivalents‖ amounting to
thousands of AR$ 1,040 were restricted because such amounts were offered as security for collection
agreements signed with the General Tax Board of the Province of Mendoza (thousands of AR$ 940) and
Banelsip S.A. (thousands of AR$ 100).
65
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 39 - RESTRICTED ASSETS (Continued)
The Company’s Ordinary and Extraordinary Shareholders’ Meeting held on April 11, 2006 resolved to define the
following policy for the distribution of dividends: i) to keep under undistributed profits, such accumulated earnings
corresponding to fiscal years prior to 2005 and, therefore, not to distribute them as dividends, and ii) to set as
maximum limit for the distribution of dividends 25% of the liquid and realized income for each fiscal year as from
fiscal year 2005.
66
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 40 – BANK 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 are
summarized as follows, in chronological order: The book principal, plus financial income (expenses) accrued as of December 31, 2012, amounts to
thousands of AR$ 285,065 (as of December 31, 2011, they amount to thousands of AR$ 191,134), out of which thousands of AR$ 266,732 (as of
December 31, 2011, thousands of AR$ 181,134) was disclosed as current and thousands of AR$ 18,333 (as of December 31, 2011, thousands of
AR$ 10,000) as non-current.
Bank
Currency
of the
Loan
Date of
Disbursement
Maturity
Date
Term
Loan
Amount (In
Thousand
s of AR$)
Outstanding
Principal Amount
as of 12.31.12
(In Thousands of
AR$)
Guaranty
Principal Payments
th
Banco de
Galicia y
Buenos
Aires S.A.
Pesos
(AR$)
01/31/2011
01/31/2013
2 years
10,000
10,000
None
One payment upon maturity on
01/31/13.
Banco de
Patagonia
S.A.
Pesos
(AR$)
01/23/2012
01/22/2013
1 year
20,000
20,000
None
One payment upon maturity on
01/22/13.
Banco de
Galicia y
Buenos
Aires S.A.
(renewal)
Interest Payments
Quarterly, due on the 30 day
of each quarter. The first
interest payment is due on
04/30/11.
rd
Monthly, due on the 23 day
of each month. The first
interest payment is due on
02/23/12.
th
Pesos
(AR$)
01/30/2012
01/29/2013
1 year
5,000
5,000
None
One payment upon maturity on
01/29/13.
Quarterly, due on the 29 day
of each quarter. The first
interest payment is due on
04/29/12.
None
Monthly payment with a sixmonth grace period as from
10/16/12.
Monthly, due on the 30 day
of each month. The first
interest payment is due on
04/19/12.
th
Banco de
San Juan
S.A.
Pesos
(AR$)
03/20/2012
03/16/2013
1 year
3,000
1,536
67
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 40 – BANK LOANS (Continued)
Date
of
Disburseme
nt
Loan
Amount (In
Thousand
s of AR$)
Outstanding
Principal
Amount as of
12.31.12
(In Thousands
of AR$)
Bank
Currency
of the
Loan
Banco de
Servicio y
Transacciones
S.A.
Pesos
(AR$)
03/23/2012
03/22/2013
1 year
10,000
10,000
None
Banco de San
Juan S.A.
Pesos
(AR$)
03/29/2012
03/29/2013
1 year
9,000
4,599
None
Banco
Santander Río
S.A.
Pesos
(AR$)
04/03/2012
04/03/2014
2
years
5,000
5,000
None
Banco de
Galicia y
Buenos Aires
S.A.
Pesos
(AR$)
04/04/2012
04/04/2013
1 year
20,000
20,000
None
Banco de San
Juan S.A.
Pesos
(AR$)
04/11/2012
04/11/2013
1 year
5,000
3,382
None
55,000
Coupon
portfolio
equal to the
principal
outstanding,
plus a 15%
haircut.
Banco de
Patagonia S.A.
(1)
Maturity
Date
Term
Guaranty
Principal Payments
Interest Payments
rd
Pesos
(AR$)
05/07/2012
11/07/2013
18
months
55,000
Monthly, due on the 23 day
of each month. The first
interest payment is due on
04/23/12.
th
Monthly, due on the 29 day
Monthly payment with a sixof each calendar month.
month grace period as from
The first interest payment is
10/29/12.
due on 04/29/12.
rd
Quarterly, due on the 3
Payment in three installments
day of each quarter. The
on 10/03/13, 01/03/14 and
first interest payment is due
04/03/14.
on 07/03/12.
th
Monthly, due on the 4 day
One payment upon maturity
of each calendar month.
on 04/04/13.
The first interest payment is
due on 05/04/12.
th
Monthly, due on the 11 day
Monthly payment as from
of each calendar month.
11/11/12.
The first interest payment is
due on 05/11/12.
One payment upon maturity
on 03/22/13.
th
Payment in four installments
on 02/07/13, 05/07/13,
08/07/13 and 11/07/13.
Quarterly, due on the 7
day of each quarter. The
first interest payment is due
on 08/07/12.
68
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 40 – BANK LOANS (Continued)
Bank
Currency
of the
Loan
Banco de
Servicio y
Transacciones
S.A.
(renewal)
Pesos
(AR$)
Date of
Disburseme
nt
Maturity
Date
Term
Loan
Amount (In
Thousand
s of AR$)
Outstanding
Principal Amount
as of 12.31.12
(In Thousands of
AR$)
Guaranty
Principal Payments
Interest Payments
None
One payment upon maturity
on 05/08/13.
Monthly, due on the 8 day of
each month. The first interest
payment is due on 06/08/12.
None
One payment upon maturity
on 05/10/13.
Monthly, due on the 10 day
of each calendar month. The
first interest payment is due
on 06/10/12.
None
One payment upon maturity
on 05/14/13.
Quarterly, due on the 14 day
of each quarter. The first
interest payment is due on
08/14/12.
th
05/08/2012
05/08/2013
1 year
10,000
10,000
th
Banco de
Patagonia S.A.
Banco de
Galicia y
Buenos Aires
S.A.
(renewal)
Pesos
(AR$)
05/10/2012
05/10/2013
1 year
15,000
15,000
th
Pesos
(AR$)
05/14/2012
05/14/2013
1 year
25,000
25,000
th
Banco Itaú
S.A.
Pesos
(AR$)
05/16/2012
05/16/2013
1 year
6,000
6,000
None
One payment upon maturity
on 05/16/13.
Banco Itaú
S.A.
Pesos
(AR$)
05/16/2012
05/16/2013
1 year
4,000
4,000
None
One payment upon maturity
on 05/16/13.
Banco
Supervielle
S.A.
Pesos
(AR$)
05/18/2012
05/18/2013
1 year
17,000
17,000
None
One payment upon maturity
on 05/18/13.
Banco
Credicoop
S.A.
Pesos
(AR$)
06/14/2012
06/14/2013
1 year
10,000
10,000
None
Monthly payment as from
01/12/13.
Monthly, due on the 16 day
of each calendar month. The
first interest payment is due
on 06/16/12.
th
Monthly, due on the 16 day
of each calendar month. The
first interest payment is due
on 06/16/12.
th
Monthly, due on the 18 day
of each calendar month. The
first interest payment is due
on 06/18/12.
th
Monthly, due on the 14 day
of each calendar month. The
first interest payment is due
on 07/14/12.
69
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 40 – BANK LOANS (Continued)
Date of
Disburseme
nt
Loan
Amount (In
Thousand
s of AR$)
Bank
Currency
of the
Loan
Banco Itaú
S.A.
(renewal)
Pesos
(AR$)
06/29/2012
06/28/2013
1 year
12,000
Banco
Comafi S.A.
(renewal)
Pesos
(AR$)
08/09/2012
02/05/2013
6
months
Tarjetas
Regionales
S.A.
Pesos
(AR$)
08/10/2012
Banco
Hipotecario
S.A.
(Renewal)
Pesos
(AR$)
08/22/2012
Banco de
San Juan
S.A.
Pesos
(AR$)
Banco
Santander
Río S.A.
Pesos
(AR$)
Maturity
Date
Term
Outstanding
Principal Amount
as of 06.30.12 (In
Thousands of
AR$)
Guaranty
Principal Payments
12,000
None
One payment upon maturity
on 06/28/13.
10,000
10,000
None
One payment upon maturity
on 02/05/13.
08/10/2014 2 years
15,000
15,000
None
One payment upon maturity
on 08/10/14.
02/18/2013
6
months
15,000
15,000
None
One payment upon maturity
on 02/18/13.
09/12/2012
09/12/2013
1 year
3,000
3,000
12/03/2012
12/03/2013
1 year
3.500
3,500
Interest Payments
th
None
None
Monthly payment as from
01/12/13.
One payment upon maturity
on 12/03/13.
Monthly, due on the 28 day
of each calendar month.
The first interest payment is
due on 07/28/12
th
Monthly, due on the 9 day
of each month. The first
interest payment is due on
09/09/12.
th
Quarterly, due on the 10
day of each quarter. The
first interest payment is due
on 11/10/12.
th
Monthly, due on the 22 day
of each calendar month.
The first interest payment is
due on 09/22/12.
th
Monthly, due on the 12 day
of each calendar month.
The first interest payment is
due on 10/12/12.
Quarterly, due on the
following dates: 03/04/13,
06/03/13, 08/30/13 and
12/03/13.
70
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 40 – BANK LOANS (Continued)
(1) The syndicated loan with Banco Patagonia S.A. has been secured by the Company with a pledge
through the assignment of part of the asset portfolio in the necessary amount to the extent that the
amount of principal and accumulated accrued interest are not lower than 1.15 times the principal
amount of the syndicated loan.
As of December 31, 2012, the Company recorded such security for thousands of AR$ 63,251 in
memorandum accounts. During this fiscal year, the Company complied with this obligation.
Overdrafts
The Company made a special agreement with Banco de Galicia y Buenos Aires S.A., which allows having
financing available, if necessary. The following are the conditions of such agreement:
Bank
Agreement
Date
Maturity
Date
Amount
In
Thousan
ds of
AR$
Banco de
Galicia y
Buenos Aires
S.A. (account
5999/6)
09.03.12
09.03.13
25,000
Commiss
ion
Rate
2%
Private banks Badlar rate + 475 points
As of December 31, 2012, the Company had not used such agreement. As of December 31, 2011, the
Company had used thousands of AR$ 6,999.
71
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 41 – BREAKDOWN BY TERM OF INVESTMENTS, RECEIVABLES AND PAYABLES
As of December 31, 2012, the breakdown of investments, receivables and payables according to their
estimated collection or payment term is as follows:
Assets
Investments
(2)
To Become Due
Q1 2013
Q2 2013
Q3 2013
Q4 2013
Q1 2014 and Thereafter
Subtotal
Past Due
Total as of 12.31.12
Not Accruing Explicit Interest
Accruing Interest at Fixed and/or Variable
Rate
Total as of 12.31.12
Receivables from
Services
(1)
In Thousands of AR$
Other
Receivables
170,586
170,586
170,586
-
1,209,189
200,872
98,172
27,735
11,533
1,547,501
147,735
1,695,236
573,477
10,962
420
11,382
10
11,392
11,392
170,586
1,121,759
-
170,586
1,695,236
11,392
(1) Including interest and administrative charges to accrue in the amount of thousands of AR$ 163,739 and the allowance for
credit losses amounting to thousands of AR$ 140,736 has not been deducted. Receivables from services, plus explicit interest,
accrue interest at an annual average rate of 43.41%.
(2) Investments accrue interest at an annual average rate of 16.67% and are included in the account ―Cash and Cash
Equivalents‖.
Payables
Bank and
Financial
Payables
(3)
Accounts
Payable
Salaries and
Payroll Taxes
Taxes
Payable
Other
Liabilities
Provision for Income
Tax
In Thousands of AR$
To Become Due
Q1 2013
Q2 2013
Q3 2013
Q4 2013
Q1 2014 and Thereafter
Subtotal
No Fixed Term
Total as of 12.31.12
539,603
30,118
569,720
569,720
Not Accruing Explicit Interest
Accruing Interest at Fixed and/or
Variable Rate
Total as of 12.31.12
(3)
183,516
187,184
94,281
54,545
220,587
740,113
740,113
12,678
8,057
20,735
20,735
23,198
23,198
23,198
3,368
4,660
8,028
5
8,033
29,830
29,830
29,830
569,720
-
20,735
23,198
8,033
-
740,113
-
-
-
29,830
-
569,720
740,113
20,735
23,198
8,033
29,830
See information about rates in Note 35 and Note 40.
72
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 41 – BREAKDOWN BY TERM OF INVESTMENTS, RECEIVABLES AND PAYABLES
(Continued)
As of December 31, 2011, the breakdown of investments, receivables and payables according to their
estimated collection or payment term is as follows:
Assets
Investments
(2)
Receivables from
Services
(1)
In Thousands of AR$
Other
Receivables
To Become Due
Q1 2012
Q2 2012
Q3 2012
Q4 2012
Q1 2013 and Thereafter
Subtotal
Past Due
Total as of 12.31.2011
Not Accruing Explicit Interest
Accruing Interest at Fixed and/or Variable
Rate
Total as of 12.31.2011
(1)
(2)
32,489
32,489
32,489
-
866,143
170,809
81,465
27,212
22,404
1,168,033
70,897
1,238,930
495,560
11,261
334
11,595
11,595
11,595
32,489
743,370
-
32,489
1,238,930
11,595
Including interest and administrative charges to accrue in the amount of thousands of AR$ 94,976 and the allowance for
credit losses amounting to thousands of AR$ 59,778 has not been deducted. Receivables from services, plus explicit
interest, accrue interest at an annual average rate of 37.21%.
Investments accrue interest at an annual average rate of 20% and are included in the account ―Cash and Cash
Equivalents‖.
Payables
Bank and
Financial
Payables
(3)
Accounts
Payable
Salaries and
Payroll Taxes
Taxes
Payable
Other
Liabilities
Provision for Income
Tax
In Thousands of AR$
To Become Due
Q1 2012
Q2 2012
Q3 2012
Q4 2012
Q1 2013 and Thereafter
Subtotal
No Fixed Term
Total as of 12.31.11
399,256
170,988
8,656
16,191
437
-
29,872
1,430
36
430,594
430,594
103,447
38,276
35,000
114,172
461,883
461,883
5,788
14,444
14,444
16,191
16,191
3,800
4,237
5
4,242
24,696
24,696
24,696
Not Accruing Explicit Interest
Accruing Interest at Fixed and/or
Variable Rate
Total as of 12.31.11
430,594
-
14,444
16,191
4,242
24,696
-
461,883
-
-
-
-
430,594
461,883
14,444
16,191
4,242
24,696
(3)
See information about rates in Note 35 and Note 40.
73
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 42 – Information Required by Section 64, Subsection (b) of Law No. 19550
For the fiscal year ended December 31, 2012, presented on a comparative basis.
Items
Total as of
12.31.12
Marketing
Expenses
Administrative
Expenses
Total as of
12.31.11
In Thousands of AR$
Salaries and Payroll Taxes
158,821
84,175
74,646
106,938
Advertising and Publicity
29,729
29,729
-
19,459
Turnover Tax
32,605
32,605
-
20,347
Collection Fees
Cards, Settlements and Account
Statements
21,293
1,634
19,659
15,206
18,859
18,859
-
15,291
Taxes, Rates and Stamp Taxes
21,584
5,176
16,408
15,617
General Expenses
10,662
6,133
4,529
6,836
Rentals
7,782
5,058
2,724
6,008
Data Center
6,358
-
6,358
5,433
Armored Car Transportation
8,721
-
8,721
5,499
Amortization of Intangible Assets
7,827
4,148
3,679
5,090
Personnel Bonuses
4,619
2,679
1,940
3,909
Personnel Expenses
5,474
1,180
4,294
4,875
Directors’ and Statutory Auditors’ Fees
Depreciation of Property, Plant and
Equipment
4,660
-
4,660
3,800
5,322
2,821
2,501
4,590
Entertainment, Travel and Per Diems
5,074
1,256
3,818
3,742
Bank Expenses and Commissions
3,856
-
3,856
2,932
Electricity and Communications
4,457
2,852
1,605
3,099
Security Services
4,266
3,157
1,109
3,099
Business Reports
3,602
3,602
-
2,990
Provision for Lawsuits
148
-
148
1,777
Maintenance and Cleaning
3,443
2,410
1,033
2,337
Discounts
Personnel Bonuses and
Compensation
3,875
3,875
-
1,769
860
189
671
1,509
Stationery and Office Supplies
2,032
1,077
955
1,170
Insurance
1,254
1,216
38
767
Professional Fees
Expenses for Claims Related to
Delinquent Debtors
1,680
773
907
881
681
-
681
547
420
583
420
525
58
341
380,547
215,549
164,998
148,963
117,058
Sale Commissions
Third-party Services
Totals as of 12.31.12
Totals as of 12.31.11
163
266,021
74
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 43 – FOREIGN CURRENCY HEDGE CONTRACT
The Company has made hedging transactions by signing forward foreign currency hedge contracts to
hedge its cash flows exposures derived from Class VI Corporate Bonds:
Counterparty
Hedge Amount (In
Thousands of U.S.
Dollars)
Banco de Galicia y Buenos
Aires S.A.
Banco de Galicia y Buenos
Aires S.A.
TOTAL
Hedge Amount as of
12.31.12 (In
Thousands of AR$)
Hedge Amount as of
12.31.11 (In
Thousands of AR$)
7,183
36,395
-
02/28/2013
26,066
36,395
113,232
113,232
01/31/2012
Hedge
Expiration Date
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 abovementioned 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, 2011, the Company had recorded at present values thousands of AR$ 326 in
liabilities, with a contra account in the statement of income, which is a loss amounting to thousands of AR$
1,661 to reflect changes in the accounting measurement accrued to date.
As of December 31, 2012, the Company had recorded at present values thousands of AR$ 23 in assets,
with a contra account in the statement of income, which is a loss amounting to thousands of AR$ 688 to
reflect changes in the accounting measurement accrued to date.
Memorandum Accounts
The Company had recorded AR$ 36,395 and AR$ 113,232 in memorandum accounts as of December 31,
2012 and December 31, 2011, respectively, corresponding to the face values pesified to date for the
abovementioned foreign currency hedging transactions agreed.
75
Tarjetas Cuyanas S.A.
Notes to the Financial Statements (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 44 – SUBSEQUENT EVENTS
- New Issuance of Class X Corporate Bonds
On January 9, 2013, the Company’s Board of Directors approved the issuance of Class X Corporate
Bonds, to be issued in one or two series, for a maximum global face value of up to thousands of AR$
200,000.
- Series I: For a benchmark face value of thousands of AR$ 40,000. The principal will be paid in only one
installment within 270 days as from the date of issuance. Corporate Bonds will accrue interest at a fixed
rate. Interest will be payable on a quarterly basis.
- Series II: For a benchmark face value of thousands of AR$ 60,000. The principal will be paid in only one
installment within 18 days as from the date of issuance. Corporate Bonds will accrue interest at a variable
rate, which will be equal to the benchmark rate (private Badlar 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), plus a
cut-off margin. Interest will be payable on a quarterly basis.
At the date of these financial statements, this issuance process has not finished yet.
76
Tarjetas Cuyanas S.A.
Summary of Events
as of December 31, 2012
Figures stated in thousands of Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
1.
Comments on the activities for Q4 2012 (1):
•
In October, the point-of-sale in Chamical (province of La Rioja), which was operating at Correo
Argentino’s building rendering services to more than 1,000 customers, was moved to an
exclusive store to improve services.
•
The second Quality Meeting was held in October, with the attendance of area heads from the
Head Office. The purpose of the meeting was to establish ―back and forth‖ relationships between
branches and the Head Office to achieve satisfied external customers, what as well implies
satisfied internal customers.
•
Since November, 12 employees from different branches, who collaborated with the program,
joined the Quality Committee. Their purpose was to review the quality program guidelines and
work together to achieve the fast implementation of the program’s contents.
•
The fourth Quality Meeting was held in December, where the program was extended to area
supervisors from the Head Office.
•
In November, a business agreement was entered into with Mendoza Plaza Shopping, one of the
largest shopping centers in the province of Mendoza. The promotion is the granting of a 20%
th
rd
th
discount on Monday, November 26 , and December 3 . and 10 .
.
•
With the purpose of automating our processes even more and optimizing the procedures
followed by the Credit Risk division, the Operations area is working together with Procesadora
Regional in the development of a score system. Once implemented, this system shall work
jointly with Apercuen to achieve a complete and objective analysis of our potential customers.
•
A national design contest was launched to change the Company’s uniform in 2013. Proposals
from all over the country were received. The selection was carried out by executives,
administrative staff and branch personnel. The two finalist models were presented at the yearend party so that all attendants could choose the winning design.
•
The year-end party for all the employees was held in November. It was held in El Santo de
Rodeo del Medio party facilities and stadium, in the province of Mendoza. 1,300 people
attended, between Nevada’s personnel, guests invited by the group, and suppliers. At the party
the Company awarded prizes for good performance and productivity, and attendants voted and
chose the new 2013 uniform.
•
The Company announced the results of the Great Place to Work Survey in November. Tarjeta
Nevada was included in the ranking of the companies with the best work environment in
th
Argentina, achieving the 13 place in the category of companies with over 1,000 employees.
77
Tarjetas Cuyanas S.A.
Summary of Events (Continued)
as of December 31, 2012
Figures stated in thousands of Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
•
The Company is negotiating jointly with Tarjeta Naranja, for the fourth consecutive year, the fees
to be paid to mail companies for the rendering of services. The purpose of conducting joint
negotiations is to achieve lower prices and better service quality and to work with the best mail
company in each area without affecting structures.
•
The advertising campaign consisted in institutional communication in mass media, graphic
advertising, social networks and special publications with Low Prices and Merchants (Comercios
Amigos) adhered to Nevaplan, with 6 and 12 installments not accruing interest.
•
Institutional campaign: 7 installments not accruing interest. It was mounted in radio, TV, graphic
media, static public spaces and digital public spaces, and banner in digital newspapers. 18
business alliances were entered into with leading Merchants (Comercios Amigos).
•
In December, the business closing was carried out in all our branches, aimed at strengthening
the relationship with Merchants (Comercios Amigos).
•
The last raffle of the Comprá, Pagá y Ganá (Buy, Pay and Win) promotion was carried out. The
prizes were free statements and three brand new cars. The winner was from General Roca,
province of Río Negro.
•
Layout inclusion in Salta, Chilecito and Tucumán 1 branches.
•
During the quarter, actions called ―Semana de Locos‖ (Crazy Week) were carried out, with
distinctive plans and mass communication aimed at supporting PreciosBajos.com.
(1) This information is not within the scope of the Report of Independent Accountants.
78
Tarjetas Cuyanas S.A.
Summary of Events (Continued)
as of December 31, 2012
Figures stated in thousands of Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
2.
Below we disclose the balance sheet structure, comparatively with that for the prior fiscal year:
12.31.12
12.31.11
In Thousands of AR$
Current Assets
3.
1,602,406
1,130,005
Non-current Assets
95,105
55,187
Total
1,697,511
1,185,192
Current Liabilities
Non-current
Liabilities
1,171,042
837,878
226,203
120,033
Subtotal
Shareholders’
Equity
1,397,245
957,911
300,266
227,281
Total
1,697,511
1,185,192
Below we disclose the income statement structure, comparatively with that for the prior fiscal
year:
12.31.12
12.31.11
In Thousands of AR$
Total Net Operating Income
Provision for Credit Losses, Net of Recoveries
Total Operating Expenses
Income before Investments in Other Companies
Income from Valuation of Investments in Other
Companies
Income before Income Tax
Income Tax
Net Income for the Period
550,398
(118,497)
(295,023)
136,878
376,490
(16,848)
(212,200)
147,442
3,586
117
140,464
(48,017)
92,447
147,559
(51,883)
95,676
79
Tarjetas Cuyanas S.A.
Summary of Events (Continued)
as of December 31, 2012
Figures stated in thousands of Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
4.
Below we disclose the cash flow statement structure, comparatively with that for the prior fiscal
year:
12.31.12
12.31.11
In Thousands of AR$
Cash Used in Operating Activities
Cash Used in Investing Activities
Cash Provided by Financing Activities
Total Cash Provided by During the Fiscal Year
5.
12.31.12
(1)
12.31.11
550,398
376,490
468,564
429,593
This information is not within the scope of the Report of Independent Accountants.
Comparative ratios with the prior fiscal year:
12.31.12
7.
(168,899)
(14,886)
197,039
13,254
The statistical data disclosed below evidence the evolution of the activity level:
Net Operating Income
Account Statements Issued
(1)
6.
(185,624)
(50,486)
388,332
152,222
12.31.11
Liquidity
1.368
1.349
Solvency
0.215
0.237
Capital Assets
0.056
0.047
Profitability
0.350
0.516
Projects for the next quarter (1):
•
During the first months of 2013, the branches located at Tunuyán and General Alvear in the
province of Mendoza will move to larger stores to improve customer service.
•
A second branch will be opened in San Juan, with the purpose of improving customer service
rendered to cardholders.
•
The Company plans to end the implementation of the teller platform (CONVAL) and its
related modules.
80
Tarjetas Cuyanas S.A.
Summary of Events (Continued)
as of December 31, 2012
Figures stated in thousands of Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
•
The first stage in the implementation of the Planning Hyperion system shall end in 2013. This
system was developed for the management and planning of business and shall be focused
on the creation of management and projection reports that help the Company achieve
comprehensive improvement.
•
In 2013, the Company will be working on the opening of the Account Statement Printing
Center in the province of Tucumán, thus printing some statements in Tucumán and others in
Salta and Jujuy. This opening will allow the Company have lower printing volumes and thus
speed up processing times and the delivery to the home of cardholders in each area.
•
The 2013 Annual Convention shall take place, where 150 leaders from Nevada will meet to
plan for the year, introduce new leaders and maintain and spread our culture and the
expected business results.
•
Launch of the ADB System within Goal 4. This system shall allow the automatic issuance of
reports and warnings regarding the main Human Resources indicators.
•
Publication of the 2012 Corporate Social Responsibility Manual, including all the actions
carried out at branches and at the Head Office.
•
With the purpose of providing our members with a tool for the beginning of the school year,
we will offer a business plan consisting in 7 installments not accruing interest.
•
Actions aimed at creating loyalty and attracting more members shall be performed through
social networks both for Valentine’s Day and Women's Day.
•
We will continue carrying out distinctive actions to handle our portfolio of inactive customers.
(1) This information is not within the scope of the Report of Independent Accountants.
81
Tarjetas Cuyanas S.A.
Additional Information to the Notes to the Financial Statements
as of December 31, 2012
Figures stated in thousands of Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
1. LEGAL SYSTEMS
There are no legal systems other than those reported.
2. CLASSIFICATION OF BALANCES OF RECEIVABLES FROM SERVICES AND OTHER
RECEIVABLES BY MATURITY DATE
a. Past due receivables from services as of fiscal year-end:
Past Due Amount as of
12.31.12
In Thousands of AR$
Past Due Between 10.01.12 and 12.31.12
63,146
Past Due Between 07.01.12 and 09.30.12
38,447
Past Due Between 04.01.12 and 06.30.12
21,538
Past Due Between 01.01.12 and 03.31.12
24,604
Total
147,735
c. Receivables from services and other receivables to become due as of December 31, 2012.
Receivables
from Services
Other
Receivables
(1)
To Become Due Between 01.01.13 and 03.31.13
To Become Due Between 04.01.13 and 06.30.13
In Thousands of AR$
1,271,890
10,962
200,872
-
To Become Due Between 07.01.13 and 09.30.13
98,172
-
To Become Due Between 10.01.13 and 12.31.13
27,735
-
To Become Due in Q1 2014 and thereafter
Total Receivables from Services to Become Due
11,533
420
1,610,202
11,382
(1) Including interest and administrative charges to accrue in the amount of thousands of AR$ 163,739 and the allowance for
credit losses amounting to thousands of AR$ 140,736 has not been deducted. Receivables from services, plus explicit
interest, accrue interest at an annual average rate of 43.41%.
82
Tarjetas Cuyanas S.A.
Additional Information to the Notes to the Financial Statements (Continued)
Figures stated in thousands of Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
3. CLASSIFICATION OF BALANCES OF PAYABLES BY MATURITY DATE
a.
There are no past-due debts as of December 31, 2012.
b.
Payables with no fixed term as of December 31, 2012 amount to thousands of AR$ 5 and
relate to other liabilities.
c.
Payables to become due as of December 31, 2012.
Bank and
Financial
Payables
Accounts
Payable
Salaries and
Payroll Taxes
Taxes
Other
Provision for Income
Payable Liabilities
Tax
In Thousands of AR$
To Become Due Between
01.01.13 and 03.31.13
To Become Due Between
04.01.13 and 06.30.13
To Become Due Between
07.01.13 and 09.30.13
To Become Due Between
10.01.13 and 12.31.13
To Become Due in Q1
2014 and thereafter
Total Payables to Become
Due
539,603
183,516
12,678
23,198
3,368
-
30,117
187,184
8,057
-
4,660
29,830
-
94,281
-
-
-
-
-
54,545
-
-
-
-
-
220,587
-
-
-
-
569,720
740,113
20,735
23,198
8,028
29,830
4.CLASSIFICATION OF BALANCES OF RECEIVABLES
RECEIVABLES BY THEIR FINANCIAL EFFECTS
FROM
SERVICES
AND
a. Receivables from services and other receivables in pesos and U.S. Dollars.
Receivables from
Other Receivables
Services
In Thousands of AR$
In Argentine Pesos
1,695,236
11,392
In U.S. Dollars
1,695,236
11,392
Total
OTHER
83
Tarjetas Cuyanas S.A.
Additional Information to the Notes to the Financial Statements (Continued)
Figures stated in thousands of Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
4.CLASSIFICATION OF BALANCES OF RECEIVABLES FROM
RECEIVABLES BY THEIR FINANCIAL EFFECTS (Continued)
SERVICES
AND
OTHER
b. The balances of receivables from services and other receivables are not subject to any
adjustment clause.
c. Interest-bearing and non-interest bearing receivables from services and other receivables
Receivables from
Services
(1)
Other Receivables
In Thousands of AR$
Non-interest Bearing Balances
573,477
11,392
Interest-bearing Balances
1,121,759
-
Total
1,695,236
11,392
(1) Including interest and administrative charges to accrue in the amount of thousands of AR$ 163,739 and the allowance for
credit losses amounting to thousands of AR$ 140,736 has not been deducted. Receivables from services, plus explicit
interest, accrue interest at an annual average rate of 43.41%.
5.CLASSIFICATION OF PAYABLES BY THEIR FINANCIAL EFFECTS
a.
Payables in Pesos and U.S. Dollars.
Accounts Payable
Bank and
Financial
Payables
Salaries and
Payroll Taxes
Taxes
Payable
Other
Liabilitie
s
Provision for
Income Tax
In Thousands of AR$
In
Argentine
Pesos
In
U.S.
Dollars
Total
569,720
703,766
20,735
23,198
8,033
29,830
569,720
36,347
740,113
20,735
23,198
8,033
29,830
b. Balances of payables are not subject to any adjustment clause.
84
Tarjetas Cuyanas S.A.
Additional Information to the Notes to the Financial Statements (Continued)
Figures stated in thousands of Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
5.CLASSIFICATION OF PAYABLES BY THEIR FINANCIAL EFFECTS (Continued)
c.
Interest-bearing and non-interest bearing payables.
Accounts
Payable
Bank and
Financial
Payables
Salaries and
Payroll Taxes
Taxes
Payable
Other
Liabilities
Provision
for Income
Tax
In Thousands of AR$
Non-interest
Balances
Bearing
Interest-bearing Balances
Total
569,720
-
20,735
23,198
8,033
29,830
569,720
740,113
740,113
20,735
23,198
8,033
29,830
6.INVESTMENTS IN COMPANIES UNDER SECTION 33, LAW No. 19550
The Company has a 1% interest in the capital stock and votes of Tarjeta Naranja S.A. This
information, along with receivables from or payables to such company, is further described in Note
38.
7.RECEIVABLES FROM OR LOANS GRANTED TO DIRECTORS AND STATUTORY AUDITORS
As of December 31, 2012, Directors’ and Statutory Auditors’ Fees payable (net of advances)
amount to thousands of AR$ 4,285 and, except as mentioned in notes to the financial statements,
there are no receivables from or loans granted to statutory auditors, directors, directors’ and
statutory auditors’ relatives up to the second degree of consanguinity for the fiscal year ended
December 31, 2012.
8. INVENTORY
The Company does not have any inventories.
9. VALUATION OF INVENTORIES
The Company does not have any inventories.
10. TECHNICAL REVALUATION OF PROPERTY, PLANT AND EQUIPMENT
The Company does not have any property, plant and equipment that have been technically
revaluated.
11. OBSOLETE PROPERTY, PLANT AND EQUIPMENT
The Company does not have any obsolete property, plant and equipment bearing book value.
85
Tarjetas Cuyanas S.A.
Additional Information to the Notes to the Financial Statements (Continued)
Figures stated in thousands of Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
12. INVESTMENTS IN OTHER COMPANIES
There are no investments in other companies, except for the one referred to in point 6 of this
additional information.
13. 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.
14.
INSURANCE
The following are the insurance policies hired by the Company.
Insured Assets
Risk
Covered
Insured Amount
Book Value
In Thousands of AR$
Buildings,
Leasehold
Improvements
Fire and Civil Liability
Furniture and Office Supplies,
Hardware and Fixtures
Theft and Breakage
15.
13,480
2,127
6,473
6,542
ALLOWANCES AND PROVISIONS
Provisions and the allowance for credit losses exceed 2% of the 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 accrued
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 (see Note 2.4.D).
16.
CONTINGENCIES
There are no significant contingent situations as of December 31, 2012, which were not given
accounting recognition or disclosed in notes to the financial statements, as the case may be.
86
Tarjetas Cuyanas S.A.
Additional Information to the Notes to the Financial Statements (Continued)
Figures stated in thousands of Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
17.
IRREVOCABLE ADVANCES TOWARDS FUTURE SHARE SUBSCRIPTIONS
There are no advances towards future subscriptions.
18.
DIVIDENDS ON PREFERRED SHARES
There are no cumulative unpaid dividends on preferred shares.
87
REPORT OF INDEPENDENT ACCOUNTANTS
To the Chairman and Directors of
Tarjetas Cuyanas S.A.
Legal domicile: Belgrano 1415
Mendoza
C.U.I.T. No.: 30-68419570-7
Mendoza, February 13, 2013.
1. We have performed an audit of Tarjetas Cuyanas S.A.'s enclosed financial statements,
which include the Balance Sheet as of December 31, 2012, the Statement of
Comprehensive Income, the Statement of Changes in Shareholders’ Equity and the
Statement of Cash Flows for the fiscal year ended on that date, and a summary of the
most relevant accounting policies and other explanatory information. The amounts and
other information related to fiscal year 2012 are an integral part of the audited financial
statements mentioned above and, therefore, shall be considered in connection with
such financial statements.
2. The Company’s Board of Directors is responsible for the preparation and fair
presentation of these financial statements, in conformity with International Financial
Reporting Standards (IFRS), adopted by the Argentine Federation of Professional
Councils in Economic Sciences (FACPCE) as professional accounting standards and
included by the National Securities Commission (CNV) in its regulations, and as
approved by the International Accounting Standards Board (IASB). Furthermore, the
Board of Directors is responsible for the existence of the internal controls it deems
necessary to enable the preparation of financial statements free of significant
deviations resulting from errors or irregularities. Our responsibility is to express an
opinion on the financial statements, based on the audit we performed within the scope
described in paragraph 3.
3. Our examination was carried out in accordance with the auditing standards applicable
in Argentina. Said auditing standards require auditors to plan and carry out the auditing
work in order to obtain reasonable assurance that the financial statements are free of
material errors, and form an opinion on the fairness of the relevant information
disclosed in the financial statements. An audit involves examining, on a selective test
basis, the evidence supporting the amounts and 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 believe that the audit performed provides a
reasonable basis for our opinion.
4. In our opinion, the financial statements mentioned in paragraph 1 fairly present, in all
material respects, the financial condition of Tarjetas Cuyanas S.A. as of December 31,
2012, and its comprehensive income and cash flows for the fiscal year then ended,
pursuant to the International Financial Reporting Standards.
88
5. As called for by the regulations in force, we report the following with regard to Tarjetas
Cuyanas S.A.:
a) The financial statements of Tarjetas Cuyanas S.A. have been transcribed to the
―Inventory and Balance Sheet‖ book and, insofar as concerns our field of competence,
are in compliance with the provisions of the Corporations Law, and the pertinent
resolutions of the National Securities Commission;
b) The financial statements of Tarjetas Cuyanas S.A. stem from accounting record
systems kept in all formal respects as called for by prevailing legal regulations, which
systems maintain the security and integrity conditions based on which they were
authorized by the National Securities Commission;
c) We have read the informative review and the additional information to the notes to the
financial statements required by Section 68 of the Buenos Aires Stock Exchange
regulations and, insofar as concerns our field of competence, we have no observations
to make;
d) As of December 31, 2012, Tarjetas Cuyanas S.A.’s accrued debt with the Argentine
Integrated Social Security System, which stems from the accounting records kept by
the Company, amounted to AR$ 5,841,273, which was not yet due at that date.
e) As required by Article 4 of General Resolution No. 400 issued by the CNV, which
modifies Article 18, Subarticle e) of Section III.9.1 of the Standards set forth by the
CNV, we report that the total fee amount billed to the Company for professional
auditing and related services in the fiscal year ended December 31, 2012, represents:
e.1) 91.61 % of total fees billed to the Company for services in that fiscal year;
e.2) 3.27 % of total fees billed to the Company, its controlling, controlled, and related
companies for auditing and related services in that fiscal year;
e.3)2.85 % of total fees billed to the Company, its controlling, controlled and related
companies for services in that fiscal year.
89
STATUTORY AUDIT COMMITTEE’S REPORT
To the Directors and Shareholders of
Tarjetas Cuyanas S.A.
Belgrano 1415 Piso 1°
City of Mendoza
1. In our capacity as Statutory Audit Committee, we have performed an examination of the financial
statements of Tarjetas Cuyanas S.A. as of December 31, 2012, which include the Letter to the
Shareholders, the Balance Sheet as of December 31, 2012, the Statement of Comprehensive Income,
the Statement of Changes in Shareholders' Equity and the Statement of Cash Flows for the twelvemonth period ended December 31, 2012 and explanatory and supplementary notes. The preparation
and issuance of such financial statements are the Company's responsibility.
2. The Company’s Board of Directors is responsible for the preparation and fair presentation of these
financial statements in conformity with International Financial Reporting Standards (IFRS), adopted by
the Argentine Federation of Professional Councils in Economic Sciences (FACPCE) as professional
accounting standards and included by the National Securities Commission (CNV) in its regulations,
and as approved by the International Accounting Standards Board (IASB).
Our responsibility is to express a conclusion based on the examination we performed within the scope
specified in paragraph 3.
3. Our examination was carried out in accordance with standards applicable in Argentina to members of
the Statutory Audit Committee. These standards require our examination of the financial statements to
be performed in accordance with the professional auditing standards applicable in Argentina and to
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. To conduct our professional work, we have reviewed the
work performed by the external auditors of Tarjetas Cuyanas S.A., Price Waterhouse & Co. S.R.L.,
who issued their audit report on February 13, 2013, 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, with the scope described above, Tarjetas Cuyanas S.A.’s financial statements can
reasonably show, in all material aspects, their financial condition as of December 31, 2012, the results
90
of its operations, the changes in its shareholders' equity and the cash flow for the fiscal year then
ended, in accordance with the 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’ Letter to the Shareholders, the report on the degree of compliance
with the Code on Corporate Governance and the Summary of Events 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 Resolution No. 368 of 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 observed, which include independence requirements, and contain no
qualifications regarding the application of said professional accounting standards.
City of Mendoza, February 13, 2013.
________________________
Norberto Corizzo
On behalf of the Statutory Audit Committee
STATUTORY AUDIT COMMITTEE No. 83
In the city of Mendoza, on February 13, 2013, the undersigned members of the Statutory Audit
Committee hold a meeting, being the chairman Norberto D. Corizzo, who calls the meeting to order at
6:00 p.m. STATUTORY AUDIT COMMITTEE’S REPORT AS OF DECEMBER 31, 2012 (TWELVEMONTH PERIOD CORRESPONDING TO FISCAL YEAR NO. 18, ENDING ON DECEMBER 31,
2012). The Chairman states that, as is known by the Statutory Auditors since they have been working
thereon, the Company’s Board of Directors presented in due time the Financial Statements as of
December 31, 2012, for the twelve-month period corresponding to fiscal year No. 18 ending on
December 31, 2012, as well as the Summary of Events and Additional Information required by the
Buenos Aires Stock Exchange for the purpose of its examination and opinion pursuant to what is set
forth by Section 294, Subsection 5) of Act 19550. Since the Statutory Audit Committee carried out the
examination of the aforementioned financial statements, it is capable of issuing an opinion thereon,
and so it can act on it. After an exchange of opinions on the issue, the Statutory Audit Committee
unanimously approves the following report: To the Directors and Shareholders of Tarjetas Cuyanas
S.A.
4. In our capacity as Statutory Audit Committee, we have performed an examination of the financial
statements of Tarjetas Cuyanas S.A. as of December 31, 2012, which include the Letter to the
Shareholders, the Balance Sheet as of December 31, 2012, the Statement of Comprehensive Income,
the Statement of Changes in Shareholders' Equity and the Statement of Cash Flows for the twelve-
91
month period ended December 31, 2012, and explanatory and supplementary notes. The preparation
and issuance of such financial statements are the Company's responsibility.
5.
The Company’s Board of Directors is responsible for the preparation and fair presentation of the
abovementioned financial statements, in conformity with International Financial Reporting Standards
(IFRS), adopted by the Argentine Federation of Professional Councils in Economic Sciences
(FACPCE) as professional accounting standards and included by the National Securities Commission
(CNV) in its regulations, and as approved by the International Accounting Standards Board (IASB).
Our responsibility is to express a conclusion based on the examination we performed within the scope
specified in paragraph 3 below.
6. Our examination was carried out in accordance with standards applicable in Argentina to members of
the Statutory Audit 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. To conduct our professional work, we have reviewed the work performed by the
external auditors of Tarjetas Cuyanas S.A., Price Waterhouse & Co. S.R.L., who issued their audit
report on February 13, 2013, 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.
5. In our opinion, with the scope described above, Tarjetas Cuyanas S.A.’s financial statements can
reasonably show, in all material aspects, their financial condition as of December 31, 2012, the results
of its operations, the changes in its shareholders' equity and the cash flow for the fiscal year then
ended, in accordance with the 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’ Letter to the Shareholders, the report on the degree of compliance with the Code
on Corporate Governance and the Summary of Events 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 Resolution No. 368 of the National
Securities Commission (―CNV‖) 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 report of independent accountants includes a representation indicating that the
auditing standards in force have been observed, which standards include independence
92
requirements, and contains no observations relative to the application of said professional accounting
standards.
Mendoza, February 13, 2013. Signed by Norberto Corizzo.
Norberto D. Corizzo, Miguel Angel Nicastro and Enrique Garda Olaciregui are appointed so that any of
them, indistinctively, signs the Statutory Audit Committee’s report and the corresponding accounting
documentation on behalf of Tarjetas Cuyanas S.A.’s Statutory Audit Committee.
Having no further matters to discuss, the meeting is adjourned by the Chairman at 6:25 p.m., after having
drawn up, read and approved these minutes, which the attendants sign in agreement.
Enrique Garda Olaciregui
D.Corizzo
Miguel A. Nicastro.
Norberto
MINUTES OF BOARD OF DIRECTORS' MEETING No. 441
In the City of Mendoza, on February 13, 2013, the undersigned directors of the Company hold a meeting at
TARJETAS CUYANAS’s registered office, located at Belgrano 1415 in this city, where Norberto D. Corizzo, CPA,
attended in his capacity as Statutory Auditor. The meeting begins at 6:30 pm to address the following items of the
Agenda:
1) CONSIDERATION OF THE FINANCIAL STATEMENTS FOR FISCAL YEAR No. 18 BEGINNING
JANUARY 1, 2012 AND ENDED DECEMBER 31, 2012
In this respect, the following documentation related to fiscal year No. 18 beginning January 1, 2012 and ended
December 31, 2012 is unanimously approved: Inventory, Balance Sheet, Statement of Comprehensive Income,
Statement of Changes in Shareholders’ Equity, Statement of Cash Flows, Notes to the Financial Statements and
Schedules, as well as the Summary of Events and Additional Information Required by Buenos Aires Stock
Exchange, which have been transcribed into the Inventory and Financial Statements Book No. 8 on folio 338 et seqq.
2) LETTER TO THE SHAREHOLDERS FOR FISCAL YEAR No. 18 BEGINNING JANUARY 1, 2012 AND
ENDED DECEMBER 31, 2012: Below the text thereof is transcribed, which is also approved:
To the Shareholders of Tarjetas Cuyanas S.A.
In compliance with effective legal provisions and bylaws, the Board of Directors is pleased to submit for the
Shareholders’ consideration this Letter to the Shareholders, Summary of Events and Financial Statements, as well as
the supplementary notes and schedules, for the fiscal year ended December 31, 2012.
In the Letter to the Shareholders, we will reflect the significant events for such year and we will also project the
Company's outlook and growth for the next fiscal year, as set out in Section 66 of Companies Law.
Opening New Doors
A new customer service center was opened, GUAYMALLEN SHOPPING MALL BRANCH, located in one of the
most important shopping malls in the city of Mendoza. The launch thereof was supported by a business action
jointly with VEA Supermarkets to offer a 12-installment business plan, not accruing interest and the first installment
for free.
The SAN MARTIN BRANCH in the Province of Mendoza was moved to a much larger and comfortable store both
for external and internal customers. In addition to this moving, a business action was carried out jointly with VEA
Supermarkets to offer a 15-installment business plan, not accruing interest and the first installment for free.
Furthermore, there was a strong communication in the area with the presence of sales representatives, who
93
distributed leaflets at the main streets of the department, by automobile, by fixing them on the public road and by
throwing them under the door.
In order to provide better customer and collection services, the RODEO DE LA CRUZ BRANCH in the Province of
Mendoza was moved to a new store. It has the new layout for Express Customer Services.
We tried out a new customer service format called MICRO-BRANCH, located in TUPUNGATO – MENDOZA. It
has the same attributes as a branch (tellers, box, store service, employees) and reports to the TUNUYÁN Branch for
logistics and operating support (sales, recovery of members in arrears).
The VILLA MERCEDES BRANCH in the Province of San Luis was moved in August. With this new store, we
managed to have space for customer services and our employees' comfort.
The CHAMICAL POINT-OF-SALE (Province of La Rioja), which currently operated at Correo Argentino’s
building responding to more than 1,000 customers, was moved in October to an exclusive store to improve services.
The TUNUYÁN BRANCH, in the Province of Mendoza, will be moved in January 2013 to a larger store to improve
services.
Committed to Quality
The FIRST NATIONAL MEETING ON CUSTOMER SERVICE took place on May 28 and 29.
Area leaders and branch heads attended at that time. The spirit of the meeting was to give strength and continuity to
the PROGRAMA DE CALIDAD NEVADA (NEVADA QUALITY PROGRAM) already under way, the beginning of
which was in August 2011. At these two intensive work sessions, progress was made with respect to the diagnosis of
the current situation regarding customer service in rooms and the proposal for specific improvements and solutions
for each marketplace. A Customer Service workshop was taught and we took advantage of this opportunity to
introduce an improvement group, the Quality Program Committee, whose main duty is to assist branches in all kinds
of doubts and in posing joint integrated solutions.
To celebrate the world environment day, the cleaning week took place on June 5. We engaged the whole company in
the initiative to keep workplaces in order and clean.
To encourage personnel to keep this habit, in July and August a contest was held among areas, where winners were
given prizes such as thermal insulated glasses, breakfasts, playrooms.
New studies of services at branches through the mystery shopper method have been carried out under the Service
Quality Program, where significant improvements were detected, as compared to the previous study, and several
issues on which we should work to be more efficient and kind were identified.
In October, the SECOND MEETING ON QUALITY was held. At this time, each HEAD OFFICE'S AREA HEAD
took part therein, the purpose of which was to join efforts between branches and Head Office, with two-way
relationships to achieve satisfied external customers, which implies satisfied internal customers.
As from November, the QUALITY COMMITTEE and twelve employees of the program from different branches
came together. Their purpose is to review the guidelines of the quality program and work together to achieve the
immediate implementation of the contents of the program.
In December, the FOURTH MEETING ON QUALITY was held, where the program was taught to HEAD
OFFICE’S AREA SUPERVISORS.
Generating Benefits for Our Members and Merchants (“Comercios Amigos”)
The SCHOOL CAMPAIGN was supported by the NEVAPLAN AND INTEREST-FREE SIX-INSTALLMENT
business plans (only for subscribed stores). Business actions have been performed, with the participation of stores at
15 branches.
In order to increase the placement of additional services at branches, the COMPARTI (SHARE) CAMPAIGN was
started up, which offered a rise in the 20% cap subject to credit check only for the marketplaces of Centro 1 and
Tunuyán (Province of Mendoza), La Pampa, Neuquén, San Luis, Cipolletti, Zapala, Catamarca and Chilecito
(Province of La Rioja).
A 20% discount promotion at subscribed stores every Mondays in April was communicated jointly with the
PALMARES SHOPPING MALL. With this action, we add alliances with stores and make our Godoy Cruz Branch
known, which is next to Palmares.
The FATHER’S DAY action was performed, which included the promotion of 6 and 12 installments, not accruing
interest, for stores in the industry related to the date, with differential conditions.
94
We continued supporting the dissemination of our ―LOW PRICES" gateway, enabling interest-free 24-installment
plans for purchases on selected days. We also boosted sales and account activation in Northwest Argentina, with
special 15- and 12-installment plans, with one installment for free. We continued working to position this channel as
the most important online store in the provinces, with 310 stores and over 11,500 products published.
The food chain MC DONALD’S was added to our network of merchants (“comercios amigos”) in Mendoza and San
Juan.
A strategic alliance was made with CINEMACENTER, whereby a benefit is granted to all our customers once a
week.
A strategic agreement was made with PERSONAL, offering a 20% discount and 12 installments not accruing interest
for the purchase of new equipment to all our customers.
From April to September, training courses were taught to merchants (“comercios amigos”) in all the marketplaces
where Tarjeta Nevada is present.
As in the last five years, the event called Truco entre Amigos (Trick-taking Card Game among Friends) was carried
out to celebrate the friendship day with our Merchants (“Comercios Amigos”). Over 500 owners and people
responsible for merchants took part in such event.
The limit on online cell phone top-ups increased to AR$ 450 and a higher credit was released, thus changing the
credit limit affecting from the monthly balance limit to the total debt limit.
Our customer loyalty action continued during 2012, rewarding them for the payment of the account statement on the
first due date, a raffle of four brand-new automobiles and the discount on the payment of account statements.
A business agreement is reached in November with Mendoza Plaza Shopping Mall, one of the largest shopping malls
in the Province of Mendoza. The promotion consists in a 20% discount for Mondays November 26, December 3 and
10.
Nevada: ―A SOCIAL BEING‖
Companies increasingly rely on social networks as a business tool, especially to expedite customer service, for
prompt replies and solution to inquiries.
By remaining on the cutting edge of technology, Tarjeta Nevada created its accounts in Twitter (@tarjeta_nevada)
and Facebook (facebook.com/TarjetaNevada.SitioOficial), where we seek to provide a space for free dialogue and
conversation to furnish information about our products and services. In addition, we share the latest news, events and
the best promotions. We receive suggestions and solve any inquiry that our fan or follower may have in this respect.
We invite and encourage them to leave comments, being convinced that these comments will allow us to exchange
ideas and experiences. We seek to provide always the best service, as well as to develop products and services
increasingly closer to the users’ needs.
―We commit to answering your comments and solve your inquiries. We work for and because of you!‖
Who are we nowadays on social networks?
Our community is made up of 80,000 fans of Facebook and more than 800 followers in Twitter, and includes a blog
and channel in YouTube.
This 2012 we ended a cycle and we have new challenges, being convinced that we are achieving our goals day by
day: strengthen Tarjeta Nevada’s presence on social networks, and create and interact with an audience, a
community focused on and material to our brand.
Procedures for the Collection of Amounts in Arrears
In January, we added a new resource to the staff of area supervisors of arrears. We have seven in the aggregate to be
able to cover visits and training courses, if required, to all branches in the country every month.
In order to obtain new telephone numbers to contact our customers, the cycle to update the data obtained by our
collection agents is kept, who check and load them into the system in no later than 48 hours. We have surveyed
4,422 new telephone numbers through December.
Additionally, from the Pre-judicial management, manual arrangements are made on our customer databases, which
consist in adding digits and looking for new telephone numbers. With this campaign, 3,723 telephone numbers were
surveyed and arranged in November.
For the purpose of automating even more our processes and optimizing the procedures carried out by the Credit Risk
Area, the Operations Area is working together with Procesadora Regional on developing a score system. Once
95
implemented, this system will work jointly with Apercuen to achieve a complete and objective analysis of our
potential customers.
Human Resources
In January, the Human Resources Division processed for the first time Tarjeta Nevada’s payroll in the Meta 4
System. With this new system, the processing time, the issuance of accounting information and all the filings of
social security taxes and trade union dues were reduced.
Under the caption ―Inspiring Trust‖, the ―2012 Annual Convention‖ for Tarjeta Nevada’s executives was held at
Howard Johnson Hotel in the city of Merlo (Province of San Luis) in March. During two days and with a total of 150
participants, the Franklin Covey Methodology was used at a full-time workshop and ended with a second outdoor
session and talk about General San Martín.
In February and March, 2011 Performance Evaluations were performed for the whole personnel.
The first meeting of executives from the Human Resources Divisions of the whole group was held in April, which
was called upon and coordinated by Valeria Venegas (Galicia Bank). Galicia and Galicia Seguros, CFA, Tarjeta
Naranja and Tarjeta Nevada attended such meeting. During 2012, good Human Resources practices and experiences
were shared every two months. The year ended with a meeting held in the Province of Mendoza. The schedule of
meetings will continue every two months throughout 2013.
The Commerce Employees Center (CEC) agreement was calculated in May, a non-wage 24% increase in: base pay +
fixed items (wage tickets/bonuses for length of service). The following are not included in the base: commissions
and productivity bonuses: The increase will be paid in two non-cumulative installments: 15% in May and 9% in
November, 24% in the aggregate.
The Middle-Management Program teaching was completed for all the new 2012 applicants.
The planning of meetings for the program “A solas con RRHH” (Alone with HR) was completed in December.
A national design contest was launched to change the 2013 uniform. Countrywide proposals were received. Selection
was made with executives, administrative and branch personnel, and the two finalist models were taken to the yearend party for all the people to choose the winner.
The calendar of annual celebrations was completed (mother’s day, father’s day, children’s day, and spring day).
These celebrations are useful to increase the sense of belonging and it is an investment highly valued by our
employees, who actively take part therein.
The Labor Gymnastics program was completed for the Head Office Group and work with these actions began at the
branches located in Salta, Jujuy, San Juan, Tucumán, Catamarca, La Rioja and several ones in Mendoza. This
program allows us to improve positions at workplaces and work on prevention.
The year-end party was held in November for the whole personnel. It took place in the function room and stadium El
Santo in Rodeo del Medio in the Province of Mendoza. One thousand three hundred persons including Nevada’s
personnel, the group’s guests and suppliers attended it. Awards for good performance and productivity were given in
the ceremony, and the new 2013 uniform was also introduced and voted.
The result of the Great Place to Work Survey was made known in November. Tarjeta Nevada was within the ranking
of the best great place to work companies in the country and was ranked 13 for the category of over 1,000
employees.
The annual Corporate Social Responsibility actions were completed both in Mendoza and in Salta, by launching the
2012 Nevada Training Center. Unemployed individuals of our society were trained in teller services, call center
operators and front-desk services to enable their work placement. The teachers were personnel from our company
(Head Office and Branches) and Human Resources – Training was in charge of the coordination.
During all Fridays of the year and under the caption “Viernes Seguros” (Safe Fridays), the Health & Safety
Department worked on the prevention and awareness of critical matters of the area. This helped us raise awareness
about matters related to both occupational health, and prevention of accidents and diseases. During the year, brigade
teams were organized, and fire and earthquake evacuation drills were made.
Regarding the headcount during 2012, 54 new employees were hired, totaling, 1,270 people as of December 31,
2012.
Our Technology
96
Following the Company’s policy, this has been a year of adequate investments in technology, which has allowed us
to value the installed capacity and readaptation of internal processes with respect to data processing. We emphasized
on optimizing services, and using and reusing the available infrastructure to improve services to our internal and
external clients.
In connection with our Development Department, we continued betting on the reengineering of our processes and,
although we made progress, their changes and upgrade, in some cases, were more complex than as estimated since a
consensus on the analysis of the variables involved was reached with the different areas of the Company and with a
forward-looking approach.
We should also highlight the overwork implied by meeting the requirements of External Audits and, over the last few
time, the audit conducted by the Central Bank. Although we have duly complied with it, these unscheduled tasks
caused us to restructure the department looking for the functionality to bring to good terms the responses to emerging
requisitions.
Logistics
Reengineering of Plastic Embossing: Generation of lists and plastics at the same time, with the order decided by the
post office to expedite their processing and later distribution.
Partial Proportional Plastic Renewal: We managed to generate renewal on a daily and proportional basis for each
post office according to Nevada's production capacity. We thus managed to keep an ongoing flow of product
deliveries to the post office and, hence, avoid bottlenecks at each process stage.
Electronic File Rendering: This exchange of electronic information with the post office allows knowing the online
status of each plastic held by the post office or, failing that, the return back to us has already been made. The cycle is
expected to be completed and started up as of March 2013.
Plastic Rendering at the Branch: it helps expedite the time of loading into the system and plastic reprocessing. In
2012, we managed to implement the plastic management at the branch at 18 stores. All of them will be completed for
2013.
Training of Branch Personnel in New Logistics System: Near 85 employees from different branches and with
different duties have already been trained. These training courses have been taught at Head Office, in which the
different sectors of the area took part. .
A new Statistics task is defined within the logistics areas, focusing more on results, analysis of each management and
making the appropriate adjustments.
Telephone audits have been conducted (in addition to Tarjeta Naranja's cycle) to assess the performance of the
account statement distribution in areas selected at random and that allow detecting problems in distribution.
Database Standardization and Parameterization: Standardization and validation of all the provinces where Nevada is
currently located was completed in 2012. This means that upon loading data about the address into the system, the
latter does not allow loading data manually for these provinces, but the option should be selected from a pull-down
menu.
The fees payable to post offices for their service provision is negotiated jointly with Tarjeta Naranja for the fourth
consecutive year. The purposes of the joint negotiation are to obtain better prices, improve the quality of the service
provision and work with the best post office in each area without spoiling structures.
Financial Condition (Information Presented in Thousands of Pesos)
The fiscal year consolidated net income amounted to AR$ 92,447, while the operating income was AR$ 136,878.
The Shareholders’ Equity amounted to AR$ 300,266 at the end of the year, 32.11% higher than in 2011.
Sources of Financing
Within the Global Program for the Issuance of Corporate Bonds, the following issuances were made:
* Class VII Corporate Bond for AR$ 150 million.
* Class VIII Corporate Bond for AR$ 150 million.
* Class IX Corporate Bond for AR$ 136 million.
During 2012, the Company borrowed loans from the capital market and from different banks of the financial system
to meet its obligations.
We borrowed bank loans amounting to 277.5 million Pesos, which fall due in 2012, 2013 and 2014.
97
At fiscal year-end, there are available and unused credit lines related to agreements signed with financial institutions
for AR$ 25,000. As of December 31, the Company had not used the available credit lines.
Projects and Outlook for 2013
To continue introducing good practices through the Service Quality Program, the purpose is to improve services and
how we treat our customers providing higher value-added to contact. It consists in creating good practices and habits
of service and creating follow-up and ongoing improvement tools, such as training and daily work at branches and
Head Office.
The implementation of the teller system (CONVAL) and its associated modules is expected to be completed.
In 2013, the first stage of implementation of Planning Hyperion, a system developed for the business management
and planning, will be completed. It will be focused on generating management and projection reports, which will
contribute to the Company’s overall improvement.
In February 2013, Tarjetas Cuyanas will seek to place a new issuance of Corporate Bonds for a maximum global
face value of AR$ 200,000,000 in two series, under the Global Program of Corporate Bonds. This will facilitate the
continuity of the projected coverage plan for the coming years, resulting in a better performance of branches, new
products and services, a broader customer portfolio and the hiring of new employees.
For next year, we are working on opening an Account Statement Printing Center in the Province of Tucumán, a part
of which will be in Tucumán and others in Salta and Jujuy. This opening will allow us to decompress the printing
volume and thus expedite the processing time and the distribution to our card holders’ addresses in each area.
The Visa product will be included in the new system to follow up pieces. We continue making progress on the claim
and logistics statistics modules and we will continue working on the standardization of the historical databases of
Delinquent customers and our Merchants (“Comercios Amigos”).
The 2013 Annual Convention was held, in which 150 leaders from Nevada participate to plan the year, introduce
new leaders, and keep and disseminate our culture and the expected business results.
The ADB system within Meta 4 is launched. This system will allow automatically issuing reports and traffic signals
of the main Human Resources indicators.
The 2012 Corporate Social Responsibility Manual will be published, with all the actions taken at branches and Head
Office.
A target will be implemented for the branches of the 90-day line. With this we seek a higher recovery in this line,
which is one of the first ones that sets the highest allowances. The work range for collection agents is broader. They
have the 30-, 60- and 90-day portfolio to work on and the work methodology is changed. There is a total of 250 visits
per collection agent, plus 200 calls (they currently work on only 350 cases with visits). The yellow status portfolio
will be divided by payment history to work on really the necessary ones and discard those that pay voluntarily. We
will work with different strategies from the branches in Northwest Argentina for the 30-day line to be aligned with
the rest of the country. We will work jointly with Cobranzas Regionales to increase the percentage of contacts and
reach at least 60% per week.
As regards the Extrajudicial Management, the policies on debt reduction will be restructured by fitting to the arrears
as per our registries and projecting an improvement in our interest recovery depending on the instance.
The Judicial Management restructuring is projected, creating a Legal Affairs Department in order to optimize our
controls, make processes faster and increase recovery.
In order to improve services to our card holders in the Province of San Juan, a second branch will be opened in the
city of such province.
Report on the Code on Corporate Governance
In compliance with the provisions of General Resolution No. 606/2012 of the National Securities Commission
(CNV), the Company’s Board of Directors approves, through its inclusion as Schedule I of this Letter to the
Shareholders, the report on the degree of compliance with the Code on Corporate Governance identified as Schedule
IV of Chapter XXXIII of CNV Regulations.
Acknowledgments
The Board of Directors expresses its gratitude and highlights the effort and dedication of all the Company’s
members, as well as Card Holders, subscribed Merchants (“Comercios Amigos”), who largely contribute to attaining
goals. We also thank our shareholders for the trust placed in Management throughout the year.
98
Mendoza, February 13, 2013.
THE BOARD OF DIRECTORS
Schedule I: Report on the Degree of Compliance with the Code on Corporate Governance
Compliance
Full
Partial
Noncomplia
nce
Report
Explain
or
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
I.1:
From
a
business
Ensure the disclosure by X
viewpoint,
Tarjetas
the Management Body
Cuyanas
S.A.
is
of the applicable policies
controlled by Tarjetas
to
the
Issuer’s
Regionales
S.A.,
a
relationship with the
member
of
Grupo
group headed thereby
Financiero Galicia S.A.
and/or of which it is a
This structure allows
member and its related
taking advantage of
parties.
significant synergies. All
business
relationships
with group companies,
whether permanent or
occasional in nature, are
built under normal and
usual market conditions.
In
accordance
with
professional accounting
standards
and
as
suggested by the best
practices, the Company
reports related party
transactions in notes to
the financial statements.
The
information
disclosed includes the
significant transactions
performed
with
shareholders
and
managers under usual
market conditions.
Pursuant to the Code of
Business
Ethical
Conduct,
Tarjetas
Cuyanas S.A. considers
the
transparency
of
information as the basic
principle
that
shall
govern its relationship
99
with shareholders, thus
ensuring
that
the
information reported to
them, the appropriate
markets and to said
markets’
regulatory
bodies, is true and
complete.
Said
information
shall
accurately reflect the
Company’s
financial
condition and results of
its operations, and shall
be reported within the
terms specified and in
compliance with the
other requirements set
forth in the applicable
standards and general
principles of market
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.
Recommendation
I.3:
Prevent the misuse of
inside information.
X
X
Tarjetas Cuyanas S.A.
has a Code of Business
Ethical Conduct, which
establishes the patterns
of behavior related to
business objectivity and
the identification of
possible conflicts of
interests.
Pursuant to the Code of
Ethics and the Letter of
Commitment signed by
any member of the
organization
upon
joining the Company,
such member agrees not
to state, disseminate,
disclose or report to third
parties the information
he/she may obtain or be
provided to perform
his/her duties and not to
use it for his/her own
benefit.
Tarjetas
Cuyanas
S.A.’s
100
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 Tarjetas
Cuyanas
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 Tarjetas
Cuyanas’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
the X
Management
Body
assumes
the
management
and
supervision of the
Issuer and its strategic
orientation
II.1.1.1
Approved
The Board of Directors
strategic
plan, X
annually
reviews,
management goals and
submits for discussion
annual
budgets
and
approves
the
approved
by
the
strategic plan from which
101
Management Body.
II.1.1.2 Policy on
investments
and
financing approved by
the Management Body.
II.1.1.3 Policy on
corporate governance
approved
by
the
Management Body.
X
X
the management goals
arise, as well as it
approves the annual
budget. This is entered
into the Minutes of the
Board
of
Directors'
meetings.
The
―Management Report" is
monthly submitted to the
Board
of
Directors,
which, if appropriate,
determines the necessary
adjustments.
There is a policy on
investments
and
financing approved by
the Board of Directors of
Tarjetas Regionales and
Tarjeta
Nevada,
a
consensus on which is
reached at the monthly
meetings
held
by
Tarjetas
Cuyanas’s
Financial Division with
Tarjetas
Regionales’s
Financial Division.
The Board of Directors is
in charge of managing
Tarjetas Cuyanas S.A.,
and
approving
and
monitoring
that
the
general policies and
strategies
are
implemented,
particularly:
• The strategic or
business plan, as well as
the annual management
and budget goals;
•
The
policy
on
investments
and
financing;
•
The
policy
on
corporate governance;
•
The
policy
on
corporate
social
responsibility;
• Policies on risk
monitoring
and
102
II.1.1.4. Policy to
select, evaluate and
compensate first-class
managers approved by
the Management Body.
X
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 Company’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 Company's risk
profile,
analyzing
management
reports
prepared
by
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.
Although there is not
currently
a
defined
policy in place to select,
evaluate and compensate
first-class
managers,
there is an implied
103
II.1.1.5. Policy to
assign responsibilities
to first-class managers
approved
by
the
Management Body.
II.1.1.6 Supervision of
succession plans of
first-class
managers
approved
by
the
Management Body.
X
X
approval by the Board of
Directors
of
their
performance, which has
remained unchanged for
16 years.
Managers’
performance is reviewed
annually through the
performance evaluation,
based on compliance
with
indicators
associated
with
the
business
goals,
the
required skills and the
corporate
values.
Managers’ compensation
is set based on bands that
are equal internally and
compete externally based
on market compensation
values.
The responsibilities of
first-class managers are
being defined in the
―Position Descriptions‖
that are in the process of
being prepared. They
describe the mission,
duties
and
responsibilities of each
job position and are
submitted
for
the
Management
Body’s
consideration.
With the information
about the evaluation
process
and
an
evaluation of potential
performed by first-class
human
resources
consulting firms, both
individual and teamwork
talents and skills are
assessed to boost the
management
success.
Directors become aware
of
this
information
through the map of
talents, on which the
appropriate
decisions
may be made in the event
of a potential succession.
104
II.1.1.7. Policy on
Corporate
Social
Responsibility
approved
by
the
Management Body.
II.1.1.8 Policy on
comprehensive
risk
management
and
internal control and
fraud
prevention
approved
by
the
Management Body.
II.1.1.9 Policy on
ongoing training for
the members of the
Management Body and
first-class managers.
X
X
X
A manual with all the
Corporate
Social
Responsibility actions is
annually issued, which is
submitted to customers,
suppliers and the Board
of Directors and refers
to:
- Initiatives aimed at the
social investment in
vulnerable communities.
Development
of
suppliers.
- Programs to promote
education, employment
and
health.
Promotion
and
development
of
employees.
Development
of
environmental initiatives
related to the awareness,
the optimization and
saving of resources and
the
environmental
management of indirect
risks.
The
Company
has
committees reporting to
the Board of Directors,
such as the Control and
Prevention of Money
Laundering Committee
and the Committee for
Information
Integrity,
and an Internal Audit
area, which ensure the
proper operation of the
internal control, as well
as the proper operation
of the controls related to
fraud
detection,
prevention of money
laundering
and
the
transparency
of
the
Company’s information.
The
Company’s
Directors and Managers
are trained enough to
perform duties in their
positions. The training
105
plans
managed
by
Human Resources aimed
thereat include subjects
related
to
strategy,
management,
understanding of the
business,
crisis
management,
among
others. Additionally, if
the position requires so,
the necessary technical
training courses are
added for the several
positions.
II.1.2 Other significant
policies approved by
the Management Body
II.1.3 Policy intended
for
ensuring
the
availability of material
information for the
Management Body and
a direct consultation
way for managerial
staff symmetrically for
executive, external and
independent members
and in advance.
N/A
X
The Board of Directors
meets at least once per
month and as required by
any of the directors. It is
in charge of Tarjetas
Cuyanas S.A.'s general
management and makes
all
the
necessary
decisions to fulfill said
task. The members of the
Board of Directors also
take part, to a higher or
lesser extent, in the
committees
created.
Therefore,
they
are
continuously informed
about the Company’s
course of business and
become aware of the
decisions made by such
bodies,
which
are
transcribed into minutes.
Additionally, the Board
of Directors receives a
monthly report prepared
by the General Division
and First-class Managers,
the purpose of which is
to report the material
issues
and
events
addressed at the different
meetings held between
them
and
Senior
Management. The Board
106
of Directors becomes
aware of such reports,
evidencing so in minutes.
II.1.4
Matters
submitted
for
the
Management Body’s
approval, accompanied
by risk analyses and
acceptable risk level.
Recommendation II.2:
Ensure an effective
business management
control.
II.2.1
The
Management
Body
verifies
compliance
with the annual budget
and business plan.
II.2.2
The
Management
Body
verifies
first-class
managers'
performance.
Recommendation II.3:
Report
the
Management Body’s
performance
evaluation process and
the related impact.
II.3.1 Each member of
the Management Body
complies with the
Corporate Bylaws and,
as the case may be,
X
The matters submitted
for
the
Board
of
Directors' consideration
are
generally
accompanied by risk
analyses or associated
contingencies.
X
X
X
Compliance with the
annual
budget
and
business plan is verified
during the Board of
Directors’ meetings held
monthly by analyzing the
management
control
report submitted by the
Chief Executive Officer.
The matters approved, as
well as the changes
introduced in planning,
are entered into minutes.
The Management Body
becomes aware of the
first-class
managers’
performance through the
monthly reports issued
by the General Division.
X
X
Each director meets and
endeavors to meet fully
the provisions set out in
the Company’s Bylaws.
At the Company, there
107
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.
II.3.2
The
Management
Body
discloses the results of
its
performance
considering the 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:
That the number of
external
and
independent members
represents a significant
proportion
in
the
Management Body.
II.4.1 The proportion
of executive, external
and
independent
members (the latter
are
no
Special
Regulations governing
the Management Body's
operation, other than the
provisions set out in the
Corporate Bylaws.
X
As established by the
Companies Law, the
results of the Board of
Directors’ performance
are approved by the
shareholders
at
the
Ordinary Shareholders'
Meeting, along with the
approval of the financial
statements.
The Board of Directors
provides
thorough
explanations in its Letter
to the Shareholders and
answers all the questions
asked
at
the
Shareholders' Meeting,
but it refrains from
expressing an opinion on
its
performance,
by
virtue
of
legal
restrictions.
The
assessment is conducted
by the shareholders at the
Shareholders’ Meeting,
taking as well into
consideration
the
informed opinion of the
Statutory
Audit
Committee.
X
X
Tarjetas Cuyanas S.A.’s
Board of Directors is the
highest
management
body of the Company. It
108
defined
by
the
regulations of this
Commission) of the
Management
Body
corresponds with the
Issuer’s
capital
structure. Specify.
is made up of five
Directors
and
five
Alternate Directors (of
whom one Director and
one Alternate Director
are independent), who
should
have
the
necessary knowledge and
skills
to
clearly
understand
their
corporate
governance
responsibilities
and
duties, and act as
faithfully and diligently
as a good businessman
does. The proportion
corresponds with the
Company’s
capital
structure.
Tarjetas Cuyanas S.A.
complies
with
the
appropriate
standards
regarding
the
total
number of directors. Its
Bylaws also provide for
the flexibility necessary
to adapt the number of
directors to the possible
changes in the conditions
in which the Company
carries out its activities,
from three to seven
directors. As Tarjetas
Cuyanas S.A. does not
publicly offer its shares,
but debt securities, it is
not required to have a
given
number
of
independent directors.
The
General
Shareholders’ Meeting
has the power to
establish the number of
directors and appoint
them.
The policy on the
appointment of directors
is the responsibility of
the
Shareholders’
Meeting.
Tarjetas
Cuyanas S.A.’s Board of
109
II.4.2. During the
current year, through a
General Shareholders’
Meeting,
the
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 II.5:
Recommendation II.5:
Agree on the existence
of
standards
and
procedures inherent to
the
selection
and
proposal of members
of the Management
Body and first-class
managers.
X
X
Directors does not take
part in such decisions as
its members have no
decision-making power
at the Shareholders’
Meeting.
As explained above,
since Tarjetas Cuyanas
S.A. does not publicly
offer its shares, but debt
securities, it is not
required to have a given
number of independent
directors. However, a
proportion of at least
20% of independent
members of the total
number of members of
the Management Body is
kept.
During the year elapsed,
the independence of the
members of the Board of
Directors has not been
challenged and there
have been no abstentions
due to conflict of
interests.
As the members of the
Board of Directors are
appointed
by
the
Shareholders’ Meeting,
pursuant to effective
laws, to hold office for a
one-year term, Tarjetas
Cuyanas S.A. does not
have an Appointment
Committee. As regards
first-class managers, the
Company
deems
it
appropriate for the Board
of Directors to appoint
them.
Notwithstanding
the
foregoing,
Tarjeta
Cuyanas S.A.’s policy
(reflected in its Code of
Ethics) requires firstclass
directors
and
executives to be people
who qualify therefor by
110
II.5.1 The Issuer has
an
Appointment
Committee
X
II.5.1.1
II.5.1.2
II.5.1.3
II.5.1.4
II.5.1.5
II.5.2
II.5.2.1.
II.5.2.2
II.5.2.3
II.5.2.4
II.5.2.5
II.5.2.6
II.5.2.7
II.5.3
Recommendation II.6:
Assess whether it is
advisable for members
of the Management
Body and/or statutory
auditors
and/or
members
of
the
Oversight Committee
to perform duties at
X
virtue
of
their
appropriate
education
and experience, and who
perform their duties
professionally, ethically
and responsibly.
The Company does not
currently
have
an
Appointment Committee,
because it considers the
procedures
currently
followed to appoint firstclass
directors
and
managers to be adequate
and effective. For the
time being, the Company
considers
that
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.
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Most
of
Tarjetas
Cuyanas S.A.’s directors
are employees of the
Company itself, of the
controlling company or
of group companies.
Directors manage and
monitor the tasks related
to Tarjetas Cuyanas
111
S.A.’s areas and the
Board of Directors, as a
body itself, approves the
related guidelines and
strategies. There is no
limitation on directors to
perform their duties at
other companies that are
not group members, but
the shareholders select
directors and statutory
auditors in such a way
that they always perform
duties
at
similar
companies.
As regards statutory
auditors,
whereas
Argentine laws provide
them a legality control
function,
Tarjetas
Cuyanas S.A. considers
there are no impediments
for statutory auditors to
take part in different
Statutory
Audit
Committees, and if that
happens in companies
related
by
control
relationships, it is a
considerable advantage
when
analyzing
businesses or activities
that
are
common
between them and their
interaction in the bodies.
several Issuers.
Recommendation II.7:
Ensure the training and
development
of
members
of
the
Management Body and
first-class managers of
the Issuer.
II.7.1 The Issuer has
ongoing
Training
Programs related to the
existing needs of the
Issuer for the members
of the Management
Body and first-class
managers,
which
include matters about
X
X
Tarjetas Cuyanas S.A.
has
training
and
development programs,
designed
on
a
personalized basis, which
include
courses
in
information security and
internal and external
frauds, as well as
112
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.
refresher courses in
technical, leadership and
management
matters.
The training actions
performed during the
year
included
the
following: Management
Training
Program;
Neuromanagement and
Business Plan; Business
Management Program;
Effective
Leadership;
Leading at the Speed of
Trust; Workshop 7:
Habits
of
Highlyeffective People; Use of
IT Tools; Attendance to
Conference on Creativity
and Innovation, and
Training in Prevention of
Money Laundering and
Funding of Terrorist
Activities.
The Company matches
the compensation and
promotion of its officers
with their merit and
capacity
conditions,
which
entails
an
incentive for them to be
constantly trained, even
in addition to the training
programs planned by the
Company.
II.7.2
The
Issuer, X
through other 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: X
The
Management
Body shall have a
policy
on
the
comprehensive
business
risk
management
and
monitors
its
appropriate
implementation.
III.1 The Issuer has X
The nature of the
policies
on
Company's
operations
comprehensive
and the characteristics of
113
business
risk
(on
compliance
with
strategic,
operating,
financial, accounting
reporting, laws and
regulations
goals,
among
others).
Describe the most
significant
aspects
thereof.
its customer base expose
it to several risks,
primarily
related
to
market risks (including
the effects of changes in
exchange
rates
and
interest
rates)
and
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.
In addition to the
analyses performed by
the Board of Directors
and Management, risk
analyses
have
been
performed
by
the
controlling
company
through a specific area
created to such end.
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.
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.
Furthermore,
Tarjetas
Cuyanas S.A. has a
strong policy to address
customers’ payment in
arrears.
The Company has a
liquidity policy that is
monitored
through
annual, monthly and
114
daily cash estimates,
analyzing the needs
and/or
surpluses
generated, evaluating the
availability of cash and
the available financing
alternatives.
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.
The
operations
performed
by
the
Company
and
its
subsidiaries
are
potentially exposed to
foreign
currency
exchange
rate
fluctuations mainly due
to amounts outstanding
of
corporate
bonds
denominated
in
US
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
corporate bonds and
borrowing of loans at
variable rate. In all cases
of loans and corporate
bonds with variable rate,
115
III.2 There is a Risk
Management
Committee inside the
Management Body or
General
Division.
Report
on
the
existence of manuals
of procedures and
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.
X
III.3 There is an
independent function
within the Issuer’s
General Division that
implements
the
X
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)).
One of Tarjetas Cuyanas
S.A.’s responsibilities is
to implement a sensible
risk
management.
Therefore,
the
risk
management has been
assigned to different
divisions, which deal
with the management of
credit, financial, fraud
and asset laundering
risks, among others. The
following are the goals
of these areas:
•
Actively
and
comprehensively manage
and monitor the several
risks taken, ensuring
compliance with internal
policies and regulations
in force.
• Ensure that the Board
of Directors understands
the risks to which it is
exposed, proposing how
to cover them.
• Help strengthen the
risk culture.
• Design and suggest
policies and procedures
to mitigate and control
risks.
•
Escalate
risk
exceptions to the General
Division.
In addition to the
considerations disclosed
in
the
preceding
recommendation, for this
duty there is a specific
116
comprehensive
risk
management policies
(Risk
Management
Officer function or
equivalent
one).
Specify.
III.4 Comprehensive
risk
management
policies
are
permanently updated
according
to
authoritative
recommendations and
methodologies in the
field. State which.
III.5 The Management
Body
reports
the
results of monitoring
the risk management
performed jointly with
the General Division in
the
financial
statements and the
Annual Letter to the
Shareholders. Specify
the main aspects of the
above disclosures.
area at the controlling
company.
X
X
Comprehensive
risk
management policies are
permanently
updated
according to SarbanesOxley Act, Section 404.
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.
PRINCIPLE IV. SAFEGUARD THE INTEGRITY OF FINANCIAL INFORMATION
WITH INDEPENDENT AUDITS
Recommendation IV: X
Ensure
the
independence
and
transparency of the
duties
the
Audit
Committee and the
External Auditor are
entrusted with.
IV.1 The Management
X
Tarjetas Cuyanas S.A. is
Body, when appointing
not required to have an
the members of the
Audit Committee, since
Audit
Committee,
it does not publicly offer
considering that most
its shares, but only debt
of them shall be
securities.
independent, assesses
whether it is advisable
to be chaired by an
independent member.
IV.2 There is an X
Tarjetas Cuyanas S.A.
internal audit function
has an internal control
117
that reports to the
Audit Committee or
the
Management
Body’s
Chairperson
and that is responsible
for
assessing
the
internal
control
system.
State whether the
Audit Committee or
the Management Body
annually assesses the
performance of the
internal audit area and
the
degree
of
independence of its
professional
work,
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).
system implemented by
the Board of Directors
and Senior Management.
Such
system
is
independently monitored
by Internal and External
Audit, with unrestricted
access to the Company's
sectors and information.
The Issuer has an
Internal Audit area fully
independent from the
other operating areas, as
well
as
from the
controlling
company,
whose mission is to
assess and monitor the
effectiveness of the
internal control system
with the purpose of
ensuring
compliance
with applicable laws and
regulations. All Tarjetas
Cuyanas's employees are
responsible
for
complying
with the
internal control, the
internal and external
regulations and corporate
governance
rules.
Internal
Audit
is
responsible for assessing
and
monitoring
the
effectiveness of the
internal control system in
order
to
provide
reasonable
assurance
about
whether
the
following
goals
are
attained:
• Effectiveness and
efficiency of operations.
• Reliability of the
accounting information.
•
Compliance
with
applicable laws and
regulations.
The area complies with
an annual work plan, the
planning and scope of
which are based on
118
IV.3 The members of
the Audit Committee
annually assess the
suitability,
independence
and
performance of the
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
policy on the turnover
of the members of the
Statutory
Audit
Committee and/or the
External Auditor, and,
in the case of the latter,
if turnover includes the
external audit firm or
only natural persons.
X
X
identifying and assessing
the Company’s risks.
It periodically issues
reports on the progress of
follow-ups on findings,
and the plans or actions
to redress the situation.
These reports are made
known to the Board of
Directors.
The Management Body
carries out an annual
assessment
of
the
suitability
and
independence of the
external
auditors
appointed, which is
entered into the related
minutes.
Regarding the turnover
of the members of the
External Audit, Tarjetas
Cuyanas
S.A.
is
governed by the policies
defined by its controlling
company. In this respect,
given the
particular
characteristics of the
business, the turnover of
the audit firm is deemed
inadequate; this is not the
case of the signing
partner, who turns over
in a three-to-five-year
period.
PRINCIPLE V. RESPECT THE SHAREHOLDERS’ RIGHTS
Recommendation V.1:
Ensure
that
the
shareholders
have
access to the Issuer’s
information.
V.1.1
The
Management
Body
fosters
periodic
X
X
The interim financial
statements are addressed
at Board of Directors’
119
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
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
participation of all
shareholders.
V.2.1.
The
Management
Body
takes measures to
encourage
the
participation of all the
shareholders at the
General Shareholders’
Meetings. Specify by
differentiating
the
X
meetings. In Tarjetas
Cuyanas 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 and
business information is
provided, and it also has
a toll-free phone number
(0810
333
9496),
whereby it contacts the
area
specialized
in
answering the investors’
inquiries. The dealer is
the one who fulfills this
advisory
duty
with
respect
to
those
interested in acquiring
debt securities.
Furthermore,
Tarjetas
Cuyanas
S.A.
periodically
publishes
corporate and financial
information through the
web page of the CNV,
the Stock Exchange and
MAE.
X
X
Tarjetas Cuyanas S.A.’s
Code of Business Ethical
Conduct
requires
fostering the effective
participation
of
shareholders
at
the
Shareholders’ Meetings,
especially by facilitating
the exercise of their
120
measures required by
law
from
those
voluntarily offered by
the Issuer to its
shareholders.
V.2.2. The General
Shareholders’ Meeting
has Regulations to
govern its operation,
which ensure that the
information
is
available
well
in
advance for decisionmaking. Describe the
main
guidelines
thereof.
reporting
rights.
and
voting
X
Tarjetas Cuyanas S.A.
considers that this type
of regulations are not
necessary
since,
as
explained above, it only
has shareholders, who
are members of the same
group to which it
belongs. Consequently,
the information flows
well in advance prior to
decision-making.
V.2.3 The mechanisms
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 Issuer has
policies to encourage
the participation of the
most
significant
shareholders, such as
institutional investors.
Specify.
X
Given Tarjetas Cuyanas
S.A.’s share distribution,
the implementation of
special mechanisms is
not necessary for the
minority shareholders to
propose matters to be
discussed at the General
Shareholders’ Meeting.
X
V.2.5
At
Shareholders’
Meetings,
X
To date, it has not been
necessary
to
offer
incentives
aimed
at
promoting attendance at
Shareholders’ Meetings,
because during recent
years, attendance has
been
approximately
between 97% and almost
99% of the capital stock.
However,
it
is
noteworthy
that
at
present there are no
institutional
investors
among the Company’s
shareholders.
This is not necessary,
since the candidates
proposed
by
the
the
where
121
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 V.3:
Ensure the principle of
equity between share
and vote.
shareholders, which are
group companies, in turn
depend
on
these
companies,
which
encourage keeping a
Code
on
Corporate
Governance.
X
Recommendation V.4:
Establish mechanisms
of protection for all
shareholders
against
takeovers.
X
Recommendation V.5:
Increase the percentage
of outstanding shares
on capital.
X
Tarjetas Cuyanas S.A.
has outstanding nonendorsable
registered
common shares relating
to only one class, entitled
to one vote per share.
Even in the event
provided in the Bylaws
that
non-endorsable
registered
preferred
shares were issued, they
would also be entitled to
only one vote per share.
Over the last three years,
the
structure
of
outstanding shares has
remained
unchanged,
i.e., 100% thereof are
non-endorsable
registered
common
shares.
Tarjetas Cuyanas S.A.
publicly offers debt
securities, rather than
shares. As all the
shareholders are part of
the same group, it has
not
been
deemed
necessary to date to
anticipate any specific
mechanisms
of
protection
against
takeovers.
Over the last three years,
through February 2012,
Tarjetas Regionales S.A.
owned 60% of shares,
whereas
Angulo
Inversora S.A. held 40%
of the remaining shares.
122
Since then, Tarjetas
Regionales S.A. has
owned 99% of shares
and Tarjeta Naranja S.A.
owns the remaining 1%.
Tarjetas Cuyanas S.A.
has no shares under the
public offering system
and, therefore, does not
foster
spreading
its
capital.
PRINCIPLE VI. KEEP A DIRECT AND RESPONSIBLE RELATION WITH THE
COMMUNITY
Recommendation V.6: X
Ensure that there is a
transparent policy on
dividends.
V.6.1 The Issuer has a X
The Bylaws provide that
policy
on
the
realized
and
liquid
distribution
of
profits will be allocated
dividends provided in
as follows: a) 5% until
the Corporate Bylaws
reaching 20% of capital
and approved by the
stock to Legal Reserve;
Shareholders’
b) Board of Directors’
Meeting. Such policy
and Statutory Audit
establishes
the
Committee’s
conditions to distribute
compensation; c) the
cash dividends or
balance
will
be
shares. If there is such
distributed among the
a policy, state the
shareholders as cash
criteria, frequency and
dividends within one
conditions that shall be
year as from their
met for the payment of
approval – in proportion
dividends.
to
their
respective
payments – except as
otherwise decided by the
Ordinary Shareholders’
Meeting. Additionally, as
per
Minutes
of
Shareholders’ Meeting
No. 20 dated April 11,
2006, on the third item of
the agenda a policy to
distribute dividends was
determined,
which
literally reads as follows:
―It is proposed to keep
profits prior to FY 2005
123
V.6.2 The Issuer has
documented processes
to prepare the proposal
for allocation of the
Issuer’s
Unappropriated
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.
X
and not distributed as
dividends recorded in the
account ―Unappropriated
Retained Earnings‖ and
to set at most 25% of
realized
and
liquid
profits for each fiscal
year of the Company for
the
distribution
as
dividends as from FY
2005‖.
Tarjetas Cuyanas S.A.'s
policy on distribution of
profits is based on an
adequate return on the
capital
invested
by
shareholders
and
complies
with
the
effective principles and
regulations, including an
analysis
of
the
Company's
resulting
liquidity and solvency
situation if distribution
were carried out.
The
Shareholders’
Meeting is the one which
annually decides on the
proposal of allocation of
the
Issuer’s
Unappropriated Retained
Earnings, after meeting
the legal and statutory
reserves required, as well
as the voluntary ones, if
such a decision were
made, carry forwards to
new fiscal year and/or
payment of dividends.
Additionally, as per
Minutes of Shareholders’
Meeting No. 20 dated
April 11, 2006, on the
third item of the agenda a
policy
to
distribute
dividends
was
determined,
which
literally reads as follows:
―It is proposed to include
earnings prior to FY
2005 and not distributed
124
as dividends in the
account ―Unappropriated
Retained Earnings‖ and
to set at most 25% of
realized
and
liquid
profits for each fiscal
year of the Company as
from FY 2005 to be
distributed as dividends‖.
Recommendation VI:
Provide
the
community with the
disclosure of matters
relating to the Issuer
and a channel of direct
communication with
the Company.
VI.1 The Issuer has an
updated web site of
public access, which
does not only furnish
material information of
the
Company
(Corporate
Bylaws,
group, members of the
Management
Body,
financial
statements
Annual Letter to the
Shareholders, among
others), but it also
gathers inquiries of
users in general.
X
VI.2 The Issuer issues
annual
financial
statements for Social
and
Environment
Responsibility
X
X
Tarjetas Cuyanas S.A.
has a web page, which
can be freely accessed
(www.tarjetanevada.com
.ar),
which
is
permanently updated and
whereby the Company’s
information
can
be
accessed. Through such
page, users may contact
and leave their inquiries,
which are answered
promptly. There is also a
blog, an online chat
channel where visitors
may read and comment
on
new
products,
advertising, promotions,
among others.
Furthermore,
Tarjetas
Cuyanas
S.A.
periodically
publishes
corporate and financial
information through the
web page of the CNV,
the Stock Exchange and
MAE.
Tarjetas Cuyanas S.A.
annually issues a report
on the main Corporate
Social
Responsibility
actions carried out.
125
purposes, which are
verified
by
an
independent External
Auditor. If any, state
the legal or geographic
scope or coverage
thereof and where it is
available. Specify the
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 21Foretica, AA 1000,
Ecuadorian Principles,
among others).
In-house:
Training
courses
aimed
at
employees, talks aimed
at future mums and
nutrition, internal events
and
celebrations,
introduction of Human
Resources
programs,
labor
gymnastics,
occupational health &
safety.
Suppliers and customers:
Actions to be in contact
with customers at service
centers, training courses
with
merchants
(“comercios amigos”)
and integration events.
Community: Actions for
help and donations to
schools and poor soup
kitchens
in
each
marketplace
where
Tarjetas Cuyanas S.A.
works, training centers
that
facilitate
employment
opportunities
and
Nicolas Foundation.
The report shows our
values, our vision and
mission, training of our
employees
in
legal
affairs
related
to
transparency
(money
laundering) and ethics in
the way of doing
business.
Achievements,
acknowledgments
and
awards given by the
society
to
Tarjetas
Cuyanas
S.A.
for
carrying out Corporate
Social
Responsibility
policies (Awards for
human capital, Great
Place
to
Work,
development of suppliers
and equal opportunities
for everyone) are also
126
publicly made known.
PRINCIPLE VII. COMPENSATE FAIRLY AND RESPONSIBLY
Recommendation VII: X
Establish clear 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 has a
X
Tarjetas Cuyanas S.A.
Compensation
does
not
have
a
Committee:
Compensation
Committee, because it
considers the procedures
currently followed, as
described below, to be
adequate and effective.
For the time being, the
Company considers that
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.
VII.1.1 made up of at
N/A
least three members of
the Management Body,
mostly
independent
ones.
VII.1.2 chaired by an
N/A
independent member
of the Management
Body.
VII.1.3
that
has
N/A
members who prove to
have adequate skills
and experience in
human
resources
policies-related
127
matters.
VII.1.4 that meets at
least twice a year.
VII.1.5
whose
decisions
are
not
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
Committee:
VII.2.1
VII.2.2
VII.2.3
VII.2.4
VII.2.5
VII.2.6
VII.2.7
VII.3 If the policies
applied by the Issuer’s
Compensation
Committee that were
not mentioned in the
preceding point are
considered important
to be mentioned.
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
128
VII.4. If there is no
Compensation
Committee,
explain
how
the
duties
described in VII. 2 are
performed within the
Management
Body
itself.
X
PRINCIPLE VIII. ENCOURAGE BUSINESS ETHICS
Recommendation VIII: X
Ensure
ethical
behaviors at the Issuer.
VIII.1. The Issuer has X
a Code of Business
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
Tarjetas Cuyanas S.A.
does
not
have
a
Compensation
Committee. The Board
of Directors believes it is
neither relevant nor
appropriate
for
the
Company to have such a
Committee.
However,
the
Ordinary
Shareholders’ Meeting
makes the decisions on
Directors’ compensation,
within
the
limits
established by the law
and
by
Corporate
Bylaws. 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
shall be in a level that is
enough so as to attract
and retain competent
directors and executives.
Notwithstanding
the
foregoing, the guidelines
that a Compensation
Committee should follow
are
sought
to
be
followed.
Tarjetas Cuyanas S.A.
has a Code of Ethics
applicable to all the
members
of
the
organization and a Code
of
Business
Ethical
Conduct, exclusively for
shareholders, first-class
directors and executives,
129
first-class managers.
Indicate whether its
application to suppliers
and
customers
is
encouraged.
VIII.2 The Issuer has
mechanisms to 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.
X
whose purpose is to
provide ethical duties
towards the Company,
investors,
customers,
creditors,
suppliers,
competitors
and
authorities, according to
their rank. This code is
signed by the members
of the Board of Directors
and first-class managers,
and is available to
investors
or
any
interested party requiring
so.
Tarjetas Cuyanas S.A.
has implemented an
annual
program
of
meetings with all the
branches and sectors
called “A solas con
RRHH” (Alone with
HR). These meetings are
held without the presence
of bosses and reporting
and claims take place
thereat. An anonymous
survey is completed and
the results thereof are
submitted by Human
Resources
to
the
Company’s Management
to assess the actions to be
taken.
130
VIII.3. The Issuer has X
policies, processes and
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:
X
Foster the inclusion of
provisions related to
good
corporate
governance practices
in
the
Corporate
Bylaws.
The General Division,
along with the team of
managers, determines the
seriousness of the events
reported at the meetings
of the program “A solas
con RRHH” (Alone with
HR). As it is based on
traffic signals, it is easier
to focus on actual
problems
(work
environment, processes,
assistance and service or
others). If investigation
were necessary, Audit or
the
heads
of
the
appropriate area get
involved to complete the
necessary
information
and thus solve it as
efficiently as possible.
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,
Tarjetas Cuyanas 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
131
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.
3) STATUTORY AUDIT COMMITTEE’S REPORT The statutory auditor, Norberto D. Corizzo, CPA,
reads the Statutory Audit Committee’s Report on the documentation submitted and approved above by the
Board of Directors, the text of which is as follows: ―To the Directors and Shareholders of Tarjetas Cuyanas S.A.
7.
In our capacity as Statutory Audit Committee, we have performed an examination of the financial statements of
Tarjetas Cuyanas S.A. as of December 31, 2012, which include the Letter to the Shareholders, the Balance Sheet
as of December 31, 2012, the Statement of Comprehensive Income, the Statement of Changes in Shareholders’
Equity and the Statement of Cash Flows for the twelve-month period ended December 31, 2012, and the
explanatory and supplementary notes. The preparation and issuance of those financial statements are the
Company’s responsibility.
8. The Company’s Board of Directors is responsible for the preparation and fair presentation of these financial
statements in conformity with International Financial Reporting Standards (IFRS), adopted by the Argentine
Federation of Professional Councils in Economic Sciences (FACPCE) as professional accounting standards and
included by the National Securities Commission (CNV) in its regulations, and as approved by the International
Accounting Standards Board (IASB).
9. Our responsibility is to express a conclusion based on the examination we performed with the scope specified in
paragraph 3.
10. Our examination was carried out in accordance with standards applicable in Argentina to members of the
Statutory Audit Committee. These standards require our examination of the financial statements to be performed
in accordance with the professional auditing standards applicable in Argentina and to 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. To conduct our
professional work, we have reviewed the work performed by the external auditors of Tarjetas Cuyanas S.A.,
Price Waterhouse & Co. S.R.L., who issued their audit report on February 13, 2013, 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.
11. 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.
132
12. We believe that the work we performed provides a reasonable basis for our opinion.
13.
In our opinion, with the scope described above, Tarjetas Cuyanas S.A.’s financial statements can reasonably
show, in all material aspects, their financial condition as of December 31, 2012, the results of its operations, the
changes in its shareholders' equity and the cash flow for the fiscal year then ended, in accordance with the
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’ Letter to the Shareholders, the
report on the degree of compliance with the Code on Corporate Governance and the Summary of Events 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.
14. 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 Resolution No. 368 of 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 observed, which include independence requirements,
and contain no qualifications regarding the application of said professional accounting standards.
Mendoza, February 13, 2013. Signed by Norberto Corizzo.
Having no further matters to discuss, the meeting is adjourned at 7:00 pm on the date referred to above.
Jose Luis Innocenti
Jose Luis Cortiñas
Enrique Garda Olaciregui
Sebastian J. Pujato
Norberto Corizzo
Miguel Angel Nicastro