Tarjeta Naranja S.A.
Financial Statements
For the fiscal year commenced January 1, 2012 and ended December 31,
2012, on a comparative basis
(Free Translation from the Original in Spanish for Publication in Argentina)
Tarjeta Naranja S.A.
(Free Translation from the Original in Spanish for Publication in Argentina)
Financial Statements
For the fiscal year commenced January 1, 2012 and ended December 31, 2012, on a comparative
basis
Table of Contents
Annual Report
Statement of Income
Statement of Other Comprehensive Income
Statement of Financial Position
Statement of Changes in Shareholders’ Equity
Statement of Cash Flows
Notes to the Financial Statements
Additional Information to the Notes to the Financial Statements as required by Section 68 of the Listing
Rules and Regulations of the Buenos Aires Stock Exchange
Summary of Activity
Independent Auditors’ Report
Report of the Supervisory Committee
2012 Annual Report
In compliance with legal provisions and the by-laws, Tarjeta Naranja S.A. submits this Annual Report,
together with the Statement of Financial Position, Statement of Income, Statement of Changes in
Shareholders' Equity, Statement of Cash Flows and the corresponding notes and schedules, for the
18th fiscal year of the Company, ended December 31, 2012.
FINANCIAL CONDITION
(Information Presented in Thousands of Pesos)
In 2012, Tarjeta Naranja continued consolidating its market position and achieved a sustained growth
as a result of the strategies implemented.
At fiscal year-end, consolidated Net Income amounted to AR$ 431,609, whereas Net Operating
Income amounted to AR$ 2,635,248, representing a 43% increase as compared to 2011 and
consolidating the positive trend in generating prior-year income.
This year open accounts exceeded 2.3 million. Taking into consideration additional card holders, the
Company has 3.4 million customers, whereas authorized cards total 6.3 million, including Tarjeta
Naranja Visa, Tarjeta Naranja Mastercard and Tarjeta Naranja American Express. In addition,
transactions increased by 17.5% and average consumption by open account increased by 22.5%,
which accounts for the rise in fees payable to stores.
Net Income from Services increased by 32.5% as compared to the prior year, whereas Net Income
from Financing increased by 71%.
The increase in the provision for credit losses is partly due to the application of International
Financial Reporting Standards (IFRS), which implied a change in estimating the allowance for credit
losses. Such change resulted in a decrease in the provision for credit losses for FY 2011 amounting to
AR$ 96,867.
Operating expenses increased by 51% as compared to the prior year. Some of the reasons for this
change are the rise in labor costs, the increase in direct rate and tax expenses due to the related
increase in turnover tax, and higher expenses related to the geographic expansion in the Province of
Buenos Aires and the Autonomous City of Buenos Aires.
The distribution of dividends, approved by the Company’s Ordinary Shareholders’ Meeting held on
April 11, 2012, amounted to AR$ 100,000. The Shareholders’ Equity amounted to AR$ 1,559,176 at
year-end.
FINANCING
Bank Loans
New loans were obtained from several banks in the aggregate amount of AR$ 368 million. In turn,
loans and checking account overdrafts were renewed in the aggregate amount of AR$ 187 million.
Financial Loans
A loan agreement was signed with Tarjetas Regionales amounting to AR$ 55 million.
Notes (“Obligaciones Negociables”)
Within the framework of the Global Program for the Issuance of Notes (“Obligaciones Negociables”),
Class XVII, XVIII and XIX Notes (“Obligaciones Negociables”) were placed for AR$ 514 million.
Financial Leases
An Addendum to the Real Estate Lease Agreement was entered into with Banco de Galicia y Buenos
Aires S.A. for AR$ 50 million, aimed at financing the construction of a new corporate building, which,
together with the Addendum to the Real Estate Lease Agreement entered into on December 6, 2010
for AR$ 78.6 million, are part of a new transaction totaling AR$ 128.6 million.
Additionally, another Real Estate Lease Agreement was entered into with Banco Galicia to purchase
seven plots of land located in the city of Córdoba, in the amount of AR$ 14.8 million.
Hedging Transactions to Guarantee Exchange Rates
At fiscal year-end, we have hedging transactions with a forward exchange rate set for amounts
equivalent to the foreign currency debt.
Available Credit Lines
At fiscal year-end, we have a credit line available that has not been used related to a commitment
signed with Banco Galicia for AR$ 100 million.
CHANGES IN TARJETA NARANJA S.A.’S CORPORATE STRUCTURE
In February 2012, Dusner S.A. and Fedler S.A. transferred 480 shares, representing 20% of the capital
stock of Tarjeta Naranja S.A. to its controlling company, Tarjetas Regionales S.A. Subsequently,
Tarjetas Regionales S.A. transferred 24 shares to Tarjetas Cuyanas S.A., representing 1% of Tarjeta
Naranja S.A.’s capital stock.
Accordingly, at fiscal year-end, Tarjetas Regionales owned 99% and Tarjetas Cuyanas owned the
remaining 1% of Tarjeta Naranja S.A.’s capital stock.
SIGNIFICANT EVENTS DURING FISCAL YEAR 2012
And why not now?!
This was the motto that inspired the Company during 2012, raising a question and at the same time
inviting to action. Being confident of the value implied by the fact of “doing”, David Ruda, Tarjeta
Naranja’s CEO, explained the sense of this phrase: “When we do, we are; when we do, we project;
when we do, we make a difference. We go through life “doing”, and “doing” is what makes each
moment have sense. There are so many things to do, start, end, redo, modify, create! There are so
many things that need some of our "doing"! What stops us? Why would we allow something to stop
us? At Naranja, we are huge enthusiasts of doing; doing and letting others do! AND WHY NOT
NOW?!”
Summer with Naranja’s Presence
With strong brand presence and exclusive benefits at the main tourist centers in the country, Naranja
proposed a colorful summer. On January 27, Mar del Plata experienced the most important free show
of the season at Varese beach, where 200,000 persons enjoyed the performance of the musician
Vicentico and an impressive fireworks show. Likewise, Carlos Paz also had a fireworks show in front of
San Roque lake, where the performance of Los Tipitos took place.
Throughout the summer, Naranja was present at the main tourist centers, with a number of benefits
such as three-installment and 0% interest rate plan (named “Zeta”) at supermarkets and gas stations,
as well as 20% discounts at the best restaurants.
Second Year Along with Argentina’s National Soccer Team
As official sponsor of Argentina’s National Soccer Team, Tarjeta Naranja supported the national team
in all official friendly games and qualifying rounds for 2014 Brazil World Cup, which were played in
Argentina and abroad. In order to consolidate the brand in Buenos Aires and reinforce its leadership
in the rest of the country, the Company had brand presence in nine districts, developed promotions
and special benefits for card holders and Merchants (“Comercios Amigos”), and was the exclusive
means of payment in all presales of tickets through the Ticketek system.
More Soccer Fields for Children
This year, the “Un Gol, un Potrero” (One Goal, One Soccer Field) program, which is developed along
with the sponsorship of Argentina’s National Soccer Team, the purpose of which is to encourage this
sport among children, provided 26 soccer fields for institutions throughout the country. In 2012,
2,076 soccer fields were enrolled and over 374,000 people voted through Facebook. This initiative
consists in the fact that the Company will condition the sports area of public schools, neighborhood
clubs and community centers all around Argentina for each goal made by Argentina’s National Soccer
Team in official games until 2014.
“Financieramente Incorrectos” (Financially Incorrect)
Year 2012 was the beginning of the “Financieramente Incorrectos” (Financially Incorrect)
communication campaign, which, through four TV commercials under the “Somos así. Queremos más
gente así” (That’s the way we are. We want more people like these) slogan, summarized the
Company’s wish to always give priority to the human viewpoint, think about people and do things
happily.
The first commercial called “Manifesto” reflected Naranja’s origin and culture, showing the values
that make the Company different and evidencing the joy and good nature both indoors and in
customer service.
Then, three commercials called testimonial were produced, where common people used the card to
do "financially incorrect" things, i.e., thinking about the others. A huge head where people threw
through the mouth and got released from that kept, a fleet of taxis with each tax driver's stamp on
the roof and a vertical square in a building to raise awareness about the environmental care. Also,
these three situations became real for people to enjoy them: Thus, the huge head was experienced in
Palermo (Buenos Aires), hundreds of taxis drove with their slogans in the Autonomous City of Buenos
Aires and Córdoba and seven public squares were built in parking areas in Córdoba, Rosario and
Buenos Aires, joining the global Parking Day movement on becoming aware of green spaces care.
This campaign could be appreciated on free-to-air and cable TV, the radio, the public road, in
magazines, in newspapers, on highway signs, in digital actions, on social networks and at Tarjeta
Naranja’s branches throughout the country.
New Corporate Headquarters
In March, the new corporate building began being constructed in Córdoba, in front of Suquía River, at
the heart of the city and in a highly-growing area. The covered 18,800 square meter-project will give
rise to more than 1,200 permanent job positions in two buildings: One with a basement and 12 floors,
and the other is a three-level one. Both real estate excavations and foundations were completed at
fiscal year-end. Basements 1 and 2, the first and second floors of the main building were completed,
whereas a 70% progress has been made in the second building. In the aggregate, the complete work
reached a 30% progress in 2012.
The corporate building will be added to others that Naranja has on the same block, giving rise to a
complex that will gather 2,000 employees and becoming an icon of the city for its scale, design and
geographic location. It is expected to be opened in 2014.
Tarjeta Naranja Abroad
Nearly more than one year after its inception, Tarjeta Naranja Perú has already opened nine
branches in Lima, employs 386 people and has 33,491 active cards with 22,241 account statements.
This landing is part of the international business strategy of the brand and takes place through an
association with Banco de Crédito del Perú (BCP), the main private bank in that country.
In turn, in the Dominican Republic, it was resolved to sell Tarjeta Naranja Dominicana S.A.’s right
related to customers to Banco Múltiple León S.A. (holder of the remaining 50% interest in Tarjeta
Naranja Dominicana S.A.’s capital stock). Thus, operations were discontinued and the company in
that country began being liquidated.
The Dominican Republic was the first landing abroad and in 2007 gave rise to the Company’s
international platform, currently focused on Peru’s development.
Major Expansion in Buenos Aires
During 2012, Tarjeta Naranja increased its presence in the Autonomous City of Buenos Aires (CABA
as per its initials in Spanish) and Greater Buenos Aires (GBA as per its initials in Spanish), by adding
eight new branches: in the neighborhoods of Pompeya, Villa Devoto, Mataderos and La Paternal in
the Autonomous City of Buenos Aires, whereas it opened branches in the districts of San Francisco
Solano, Villa Ballester, Laferrere and Wilde in Greater Buenos Aires.
Naranja’s presence was also expanded in the Province of Buenos Aires, especially in the Atlantic
Coast as from the merger of Tarjeta MIRA S.A., a member of the Tarjetas Regionales Group. This
process contributed to the opening of nine new branches in the districts of Azul, Olavarría, Balcarce,
Dolores, Miramar, Villa Gesell, Coronel Suárez and Mar del Plata.
At fiscal year-end, Tarjeta Naranja’s coverage is 7 branches in the Autonomous City of Buenos Aires,
26 in Greater Buenos Aires and 17 stores in the rest of the province, totaling 436,761 account
statements and a team of 1,227 employees for the whole area.
Increasingly more Branches in the Rest of the Country
The Company continued with its expansion plan, also opening branches in the rest of the country. To
be closer to its customers, it opened new stores in Termas de Río Hondo (Santiago del Estero),
Gualeguay (Entre Ríos), Clorinda (Formosa), Monteros (Tucumán), Virasoro (Corrientes) and Mina
Clavero (Córdoba). Likewise, it added more points of sale to its network in the districts of Joaquín V.
Gonzalez, Cafayate and Güemes (Salta) and Ituzaingó (Corrientes).
At fiscal year-end, Tarjeta Naranja has a network of 209 service centers, which includes 159 branches
and 50 points of sale throughout the national territory.
Miércoles Naranja (Naranja Wednesdays)
Tarjeta Naranja distinguishes itself for having a dynamic business management that provides its card
holders with better benefits on an ongoing basis. In 2012, the 20% discount and installment-plan
promotion was launched on Wednesdays, along with large national brands. Over 50 firms from
different industries took part therein. Simultaneously, during the year near 10,000 promotions were
implemented in Merchants ("Comercios Amigos") throughout the country, which included discounts
and interest-free installment plans for card holders in all industries.
“Cadena de Amigos” (Chain of Friends)
During July and August, more than 9,000 new customers were added through a “Cadena de Amigos”
(Chain of Friends) promotion, which consisted in inviting card holders to introduce friends for the
latter to obtain their Tarjeta Naranja cards. The benefit was that AR$ 150 was credited to each card
holder’s account statement for each friend introduced thereby.
“Ideas Naranja” (Naranja Ideas)
For the purposes of open innovation, “Ideas Naranja” (Naranja Ideas) was launched in November. The
initiative has arisen to listen to customers’ ideas, know their opinions and include them in the
Company's improvements. The How would you like that a company would recognize your continuance
as customer over time? question was launched through two web sites, one for employees and
another open to the whole community. In 19 days 5,255 ideas were received and eight winners were
chosen in December.
Naranja Store
Towards year-end, Naranja Store, Tarjeta Naranja’s exclusive online store was launched for its card
holders to be able to buy products from subscribed Merchants (“Comercios Amigos”) from where
they are located. The development arose for the dual purpose of offering products to customers
throughout the country quickly and easily and originating higher revenues for stores subscribed to the
system. Accordingly, the brand continues being ranked as leader in terms of innovation.
Other Outstanding Products
During the year, the Company strengthened other products and services, achieving a sharp growth in
results arising from a planned business management.
Insurance: Tarjeta Naranja, through several insurance companies, makes a wide personal insurance
coverage available to its customers, which this year reached 2 million policies subscribed to the
automatic card debit. This represented a 20% increase in stock, as compared to 2011.
Cell Phone Services: The service whereby card holders may control their transactions and make
queries through SMS increased by 33% the number of customers who use it, reaching 1,014,035
people.
Virtual Cell Phone Top-ups: 300,000 cell phone top-ups were reached per month, which entailed a
100% increase as compared to the prior fiscal year.
Convivimos Magazine
The issue of national circulation and distribution by subscription to Tarjeta Naranja’s card holders
doubled the number of subscribers in 2012, reaching a monthly circulation of 330,449 magazines.
This result was achieved as a consequence of a strong promotion campaign throughout the country.
Naranja by Benito Fernández
In Naranja’s viewpoint, the uniform represents much more than work clothes; it reflects each
employee’s spirit and commitment towards the Company. Accordingly, the renowned designer Benito
Fernández was asked to make the uniforms for the 2012-2013 spring-summer season. In four months,
25,000 clothes were produced with exclusive fabrics and prints to be worn by the employees from all
branches in the country. The designer will also be with the Company in the next winter season.
The Brand with the Highest Number of Fans in the Sector
Tarjeta Naranja's official site on Facebook reached 555,585 fans this year. The brand was ranked
among the national ones with the highest number of followers on the network and was ranked first
among companies engaged in the financial industry. Through Facebook, Twitter, Blog and YouTube,
community questions, queries and claims were answered online and several contents about products
and services, promotions, general interest, institutional and Naranja culture matters were published,
among others.
During 2012, Naranja was distinguished by the prestigious global consulting firm Socialbakers for its
work on social networks as one of the five brands with best performance in the global financial
industry. According to this award, the Company stands out for its dedication and commitment
towards audiences, in addition to encouraging two-way communication and prompt responses. Less
than two years after it joined social networks, Tarjeta Naranja shows an exponential growth on this
media.
Quality with Warmth at Every Time
The Customer’s Experience initiative was developed during 2012 and will continue during next year
for the purpose of ensuring that the card holder enjoys a unique and different experience in every
contact with Tarjeta Naranja. This includes relationships at points of contact providing personalized
services, as well as alternative channels. We primarily worked on the four most valuable attributes of
service: Resolution, suitability, responsiveness and warmth, fostering developments in all directions
to establish the concept in all its activities and continue consolidating the Company's leadership in
this regard.
Better Services for Merchants (“Comercios Amigos”)
At Tarjeta Naranja, Merchants (“Comercios Amigos”) receive person-to-person services. Therefore,
the "Attendants to Stores Project” started in 2011, which establishes a frequent visit to stores
concentrating 80% of the Company's revenues. During 2012, 44 districts joined this initiative, thus
covering a total amount of 68, which entails that almost 10,000 Merchants (“Comercios Amigos”)
throughout the country are included in this program. As from July 2012, the digital Merchants
(“Comercios Amigos”) settlement was implemented. This option, which is available through Naranja’s
web services, materialized for the purpose of improving the service to subscribed establishments.
The Company where Young People Want to Work for
Tarjeta Naranja was chosen among the ten “Companies of Young People’s Dreams in 2012”
(“Empresas de los Sueños de los Jóvenes 2012”). This election is made based on a survey to 10,000
university and recently graduated students in Argentina conducted by the specialized consulting firm
Cía. de Talentos. This makes it become one of the most desired organizations to work for by young
people, where they expect to find professional development possibilities, ongoing challenges and
good market image, among other variables. This award is an acknowledgment to Naranja’s efforts to
keep an excellent work environment and is a consequence of a work philosophy sustained over time,
where employees are an essential part of the organizational life.
In 2012, the number of employees continued growing, increasing the total headcount to 4,422
people, 9% more than in 2011. As we were engaged in managing talents and offering development
opportunities, 96 internal contests were carried out, which ended in 200 promotions. At the same
time, 2,855 face-to-face training courses were taught, most of which were under the charge of over
420 in-house trainers of the Company.
Change in Structure
Due to the Company’s growth and management needs, changes in the management team were
made. The Business Division was united with the Regional Division and two Business Subdivisions
were authorized, whereas the Marketing Division became Senior Management. The Management
Subdivision was created in the Operations Division, Human Resources became Senior Management
and the Internal Communication, Personnel Management and Social Responsibility areas were added
thereto. The Collection Subdivision was created in the Institutional Relations Division.
Reengineering of Customers ABM Process
To reduce the terms of delivery of the card to new customers, changes in the New Accounts, Closed
Accounts and Modification of Customers (“Alta, Baja y Modificación de Clientes”) process have been
implemented. The option to deliver the card at the branch was added and, to keep a better
communication, customers added the notice of approval of the opening and follow-up of the card
account through SMS and e-mail.
Commitment to Quality
In order to meet its commitment to quality, during 2012 the Company continued working on
achieving the strict standards applied to all its operations, improving processes, cycles and
measurements. Since 2005, Tarjeta Naranja has certified all its processes under ISO 9001:2008
standard. It certified them again on three occasions (2005, 2008 and 2011), which ensures the best
quality of service to card holders and Merchants (“Comercios Amigos”) in every place in the country
where the Company operates.
New System to Manage Customers in Arrears
In 2012, the Company began operating with a new system to manage customers in arrears, becoming
the only one that has ICS (Internet Collection System), a world-class arrears management software
package. With this implementation, it manages to provide IT support to the whole telephone
operation of payables in early arrears related to accounts that have not yet been allocated to lawyers
and improves the quality of customer service, even in a critical process such as Collections.
Additionally, it allows optimizing time and productivity.
System and Technology Improvements
During 2012, we continued working on technological updating, systems modernization and
development of applications improvements in order to support the Company’s growth. The speed of
online equipment was improved as a result of a new server, which allowed duplicating the processing
amount of users and transactions at the same time.
In addition, the implementation of a new system infrastructure for the call center was completed,
enabling the migration of the calls from card holders and Merchants (“Comercios Amigos”) to AVAYA
technology. This allowed significantly increasing the service capacity, among other functionalities.
We continued working on the Core Processing System Modernization Project, according to the
planned strategy for development and implementation in stages. The number of releases increased
from 12 to 14 and the first seven ones reached an advanced stage at fiscal year-end.
Corporate Social Responsibility
For Tarjeta Naranja social responsibility means that “we all always have something to give”.
Therefore, it proposes itself to seek better ideas and initiatives for the solidary attitude to grow and
reach its maximum expression in everyday facts. In this respect, we continued adding the
contribution of employees, card holders, Merchants (“Comercios Amigos”) and suppliers, along with
the Company’s support. The result of actions carried out in each program is as follows:
 Aporte Solidario (Solidary Contribution) Program: Thanks to this initiative, card holders donated,
through their debits, more than AR$ 27,000,000 to 240 non-profit organizations.
 Apadrinando Comedores (Support for Community Kitchens) Program: During 2012, the program
reached 177 volunteers, 35 community kitchens and 3,243 children benefited throughout
Argentina.
 Apadrinando Escuelas (Support for Schools) Program: New schools, volunteers and sponsors
were added. At year-end, 336 schools were given assistance, out of which 182 were sponsored
by Merchants (“Comercios Amigos”) and 154 by Naranja.
 Solidarity Missions: Eighty-eight missions were carried out to meet specific needs in different
areas of Argentina. These were carried out by company volunteers.
Awards and Recognitions
During 2012, Tarjeta Naranja was recognized by prestigious institutions and publications in Argentina.
It was included in the 33rd place in the “The 100 Companies with the Best Reputation in Argentina”
(“Las 100 empresas con mejor reputación del país”) ranking published by Clarín Newspaper and
made by MERCO, being among the most recognized companies by the public opinion. Ámbito
Financiero newspaper included Tarjeta Naranja in the 67th place in its “Company Reputation
Ranking" (“Ranking de Prestigio de Empresas”), Apertura Magazine placed it among “The 100 Best
Ones in terms of Image for the Decade” (“Las 100 mejores en imagen de la década”) and Mercado
Magazine included it in the 12th place in the “The 100 Best Companies in the Country” (“Las 100
mejores empresas del país”) ranking. Throughout the year, the Company and its CEO, David Ruda,
had wide coverage and positive impact for different matters on the most distinguished media in
Argentina.
In advertising, Tarjeta Naranja received two “Lápiz de Oro” awards, the first in the interior category
for the commercial “Cortá Vos” and the second in the media mix category for "Taxis" of the
"Financially Incorrect" campaign. In addition, as mentioned in the preceding paragraphs, the
Company was recognized for the “Companies of Young People’s Dreams in 2012” (“Empresas de los
Sueños de los Jóvenes 2012”) and “Socially Devoted” awards of Socialbakers’ global ranking.
2013: Let’s Join Together Again
For the year that is about to begin, Tarjeta Naranja proposes its employees, card holders and
Merchants ("Comercios Amigos") to reassess teamwork to face the ongoing challenges and changes
imposed by the context. In the words of its CEO, David Ruda, "we recover the concept of teaming, reunification, which means being together, combining ideas and adding projects so that everything may
go better for all of us. And if the need to change arises from this relationship, then don't be afraid.
Let’s change! In this context, and for everyone to listen thereto, we want to shout: Give me your hand,
it is necessary for us to join together again!
PROJECTIONS AND OUTLOOK FOR 2013
New branches, mainly in the Autonomous City of Buenos Aires, are expected for 2013. We hope to
consolidate the market presence and share in the Province of Buenos Aires and the Autonomous City
of Buenos Aires, and continue being the leader in the provinces.
CODE ON CORPORATE GOVERNANCE UNDER GENERAL RESOLUTION No. 606/12 OF THE ARGENTINE
NATIONAL SECURITIES COMMISSION (C.N.V.)
A Schedule with the report on the degree of compliance with the Code on Corporate Governance is
presented, in compliance with the provisions set forth in Subsection a.1) of Section 1 of Chapter XXIII
– PERIODIC REPORTING SYSTEM – of technical regulations (N.T. 2001, as amended).
Schedule: Report on the Degree of Compliance with the Code on Corporate Governance
Compliance
Noncompliance
Report or Explain
Full
Partial
PRINCIPLE I. MAKE THE RELATIONSHIP TRANSPARENT AMONG THE ISSUER, THE GROUP HEADED THEREBY AND/OR OF
WHICH IT IS A MEMBER AND ITS RELATED PARTIES
Recommendation
From a business viewpoint, Tarjeta Naranja S.A. is
I.1: Ensure the
X
controlled by Tarjetas Regionales S.A., a member of
disclosure by the
Grupo Financiero Galicia S.A. This structure allows
Management Body
taking advantage of significant synergies. All business
of the applicable
relationships with group companies, whether
policies to the
permanent or occasional in nature, are built under
Issuer’s relationship
normal and usual market conditions. In accordance with
with the group
professional accounting standards and as suggested by
headed thereby
the best practices, the Company reports related party
and/or of which it is
transactions in notes to the financial statements. The
a member and its
information disclosed includes the significant
related parties.
transactions performed with shareholders and
managers under usual market conditions.
Pursuant to the Company’s Code of Ethics, Tarjeta
Naranja considers the transparency of information as
the basic principle that shall govern its relationship 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.
X
Tarjeta Naranja has a Code of Ethics, which establishes
the patterns of behavior related to business objectivity
and the identification of possible conflicts of interests.
In addition, the Company’s Code of Ethics sets forth the
duty to avoid acting on behalf of the Company in those
situations that pose any type of personal interest or
where either the person involved or his/her close
relatives may personally benefit from a business
opportunity in which the Company may be involved.
Neither is it allowed to perform business or professional
activities at the same time than those carried out for
the Company, which in any way may compete with any
of the Company’s businesses.
In the event any conflict of interest arises due to
employment reasons or of any other kind, the facts
shall be reported with no delay to the appropriate
Manager.
Additionally, those who may have any influence on
Tarjeta Naranja’s business decisions (or any of their
close relatives) may not have a significant financial
interest; for example, as a shareholder or administrator,
in any of Tarjeta Naranja S.A.’s suppliers, without the
prior written consent by Tarjeta Naranja S.A.’s Board of
Directors.
Recommendation
I.3: Prevent the
misuse of inside
information.
Pursuant to the Code of Ethics and the Confidentiality
Agreement 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. Tarjeta Naranja’s employees or those
contracted thereby, such as in the cases of external
audits or consulting firms, shall refrain from using
confidential information for their own benefit and/or
for the benefit of third parties (by virtue of the
provisions set out in the Code of Ethics and, generally,
in the contracts executed therewith). This includes the
fact that the employees shall refrain from transferring
confidential information to another person who then
trades Tarjeta Naranja S.A.’s securities, including call or
put options on such securities, as well as from trading
securities of any other Company whose value could be
affected by Tarjeta Naranja’s decisions that have not
been released to the public yet, as well as call or put
options on such securities.
PRINCIPLE II. LAY THE BASIS FOR A SOUND MANAGEMENT AND SUPERVISION OF THE ISSUER
Recommendation II.
1: Ensure that 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 annually reviews, submits for
strategic plan,
X
discussion and approves the strategic plan from which
management goals
the management goals arise, as well as it approves the
and annual budgets
annual budget. This is entered into the Minutes of the
approved by the
Board of Directors' meetings. The Committee for
Management Body.
Information Integrity monthly follows up the approved
plans and, if appropriate, the Board of Directors
determines the necessary adjustments.
II.1.1.2 Policy on
There is a policy on investments and financing
investments and
X
approved by the Board of Directors.
financing approved
by the Management
Body.
X
II.1.1.3 Policy on
corporate
governance
approved by the
Management Body.
II.1.1.4. Policy to
select, evaluate and
compensate firstclass managers
approved by the
Management Body.
II.1.1.5. Policy to
assign
responsibilities to
first-class managers
approved by the
Management Body.
X
X
X
The Board of Directors is in charge of managing Tarjeta
Naranja 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 management and any
other policy aimed at the regular monitoring of
internal information and control systems;
• The development of ongoing training programs for
directors and senior officers;
• The entity’s Code of Ethics;
• The policies on personnel compensation, economic
incentives and performance evaluations;
• The policy on selection of suppliers and their
treatment, avoiding the concentration of activities and
conflicts of interests;
• Senior Management’s powers and responsibilities.
Additionally, the Board of Directors monitors
compliance with the internal control and the
regulatory framework, and the entity's risk profile,
analyzing management reports prepared for Senior
Management.
The Board of Directors considers that establishing an
adequate internal control is essential to meet the goals
defined. Accordingly, internal audit processes play a
key role within the organization.
The Human Resources Department sets policies on
selection to fill vacancies at all organization levels,
according to each position description. Internal
contests, evaluations of potentials and external
recruitments through specialized consulting firms are
carried out to evaluate candidates and select them.
Evaluations consider compliance with goals and
qualitative aspects of each one’s performance based
on the required skills and corporate values.
Compensation is established based on salary bands
defined according to the responsibilities assigned to
each of the positions.
All these policies are approved by the Board of
Directors.
The issuer has position descriptions for all organization
levels. The necessary skills for the performance in each
position are described in such position descriptions, as
well as the responsibilities assigned thereto.
According to the position levels, descriptions are
approved by each division and, in the case of
descriptions of first-class manager positions, they are
approved by the Management Body.
II.1.1.6 Supervision
of succession plans
of first-class
managers approved
by the Management
Body.
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.
X
X
X
With the information about the evaluation process and
an evaluation of potential performed by first-class
human resources consulting firms, the Human
Resources Division annually prepares a map of talents,
where risk areas (as to positions and persons) to be
covered and the most suitable successors for each
case, as well as the potential of each of Tarjeta
Naranja’s Managers, are identified. With the
successors identified, the skills required for each
position defined by the Board of Directors and Senior
Management and the results of evaluations,
development plans are prepared in order to ensure
that Tarjeta Naranja always has the necessary talents
to guarantee the success of its management. The
outcome of the process described above is finally
submitted to and approved by the Board of Directors
and translates into specific and personalized action
plans.
The policy on Corporate Social Responsibility is
reviewed by the Board of Directors, which approves the
actions to be performed in each fiscal year. It follows up
the actions through the reports annually submitted by
the Social Responsibility area.
The policies implemented are mainly focused on the
following aspects:
 Our community: Apadrinando Escuelas (Support for
Schools); Apadrinando Comedores (Support for
Community Kitchens); Missions; Aporte Solidario
(Solidary Contribution); Un Gol, un Potrero” (One Goal,
One Soccer Field); actions carried out from the
branches in the communities where we are; cultural
actions.
 Environment: Biodegradable cards; paper recycling;
eco-efficient paper; ecological bags; remanufactured
toners and safe destruction of casings; recycling and
final disposal of technological waste.
 Our Employees: Training; the Best Place to Work;
work environment; personnel selection; honors and
recognitions.
 Our Customers: Assured quality; means of contact and
communication with our customers.
Tarjetas Regionales, the controlling company, has a
specific area for the risk analysis that supplements the
analyses performed by the Issuer.
Tarjeta Naranja has several committees reporting to
the Board of Directors, such as the Audit Committee,
the Control and Prevention of Money Laundering
Committee and the Committee for Information
Integrity, which ensure that financial internal control
systems are sufficient, adequate and efficient, as well
as the proper operation of the controls related to
fraud detection, prevention of money laundering and
the transparency of the entity’s information. Thus, the
Audit Committee quarterly supervises the progress of
the annual audit plan, which, along with the
Committee for Information Integrity, is intended to
identify critical risks. During each meeting, the Audit
Committee receives information from the internal
audit department about the most significant events
and the recommendations arising from its work, as
well as the status of the recommendations issued in
prior years, always for the sake of helping create an
adequate control environment.
In addition, the Prevention of Money Laundering and
Funding of Terrorist Activities Committee meets every
two months to show the results of controls and
prevention of asset laundering, funding of terrorist
activities and other illegal activities, in accordance with
effective legal and administrative rules, in order to
reduce and eliminate civil, criminal or commercial-type
responsibilities for the organization.
II.1.1.9 Policy on
ongoing training for
the members of the
Management Body
and first-class
managers.
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.
X
The Company’s Directors and Managers are trained
enough to perform duties in their positions. The
training plans managed by Human Resources aimed
thereat include subjects related to strategy,
management, trends, among others. Additionally, if the
position requires so, the necessary technical training
courses are added for the several positions.
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 Tarjeta Naranja 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
entity’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 Chief Executive Officer,
prepared by the Management Control area, the
purpose of which is to report the material issues and
events addressed at the different meetings held
between him and Senior Management. The Board 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
X
The different processes have scorecards, whose
indicators allow the different management divisions to
monitor the Company's activity and risk. A compliance
parameter, a slight excess range and an undesired
excess range have been defined for each indicator. The
last two have contingency plans associated therewith,
which specify the actions to be taken upon excesses.
The indicators that are included within an unacceptable
range are reported to Management, together with the
remediation plan to be followed to redress the
situation.
The management information is monthly submitted to
the Committee for Information Integrity and the Board
of Directors.
Tarjetas Regionales, the controlling company, has a
specific area for the risk analysis that supplements the
analyses performed by the Issuer.
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 generally verifies the first-class
managers’ performance upon assessing compliance
with the year’s strategic plan. It individually validates
the goals assigned to each of them and the qualitative
aspects of the individual performance based on the
required skills and corporate values.
X
The Bylaws regulate the frequency of meetings, the
of the Management
Body complies with
the Corporate
Bylaws and, as the
case may be, with
the Regulations
governing the
Management Body’s
operation. Specify
the main guidelines
set out in the
Regulations. State
the degree of
compliance with the
Corporate Bylaws
and Regulations.
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
X
appointment of the Chairman, the term of office, the
scheme of valid sessions and guarantees granted by
directors. Each director fully meets the provisions set
out in the Company’s Bylaws. At the Company, there
are no Special Regulations governing the Management
Body's operation, other than the provisions set out in
the Corporate Bylaws.
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 Annual Report 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 Supervisory Committee.
X
X
X
Tarjeta Naranja S.A.’s Board of Directors is the highest
management body of the Company. It is made up of
eight non-independent Directors and five non-
independent
members (the latter
defined by the
regulations of this
Commission) of the
Management Body
corresponds with the
Issuer’s capital
structure. Specify.
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: Agree on the
existence of
standards and
procedures inherent
to the selection and
proposal of
members of the
Management Body
and first-class
managers.
II.5.1 The Issuer has
an Appointment
Committee
independent alternate Directors, 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.
Tarjeta Naranja 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 entity carries out its
activities, from five to nine directors. As Tarjeta
Naranja 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. Tarjeta
Naranja S.A.’s Board of Directors does not take part in
such decisions as its members have no decisionmaking power at the Shareholders’ Meeting.
Taking into account the information provided in the
preceding point, over the last few years, the
Shareholders’ Meeting has not set a policy regarding
the proportion of independent directors. Neither are
there shareholders' agreements aimed at appointing
members of the Management Body.
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.
X
The members of the Board of Directors are appointed
by the Shareholders’ Meeting, pursuant to effective
laws. As regards first-class managers, the Company
deems it appropriate for the Board of Directors to
appoint them. Tarjeta Naranja S.A.’s policy (reflected in
its Code of Ethics) requires first-class executives to be
people who qualify therefor by virtue of their
appropriate education and experience, and who
perform their duties professionally, ethically and
responsibly.
X
X
The Company does not currently have an Appointment
Committee, because it considers the procedures
currently followed to appoint first-class managers to be
adequate and effective. For the time being, the
Company considers that the introduction of such
committee may become excessively bureaucratic for
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 syndics
and/or members of
the Oversight
Committee to
perform duties at
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
X
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 Tarjeta Naranja 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 Tarjeta Naranja 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 entities
that are not group members, but the shareholders
select directors and syndics in such a way that they
always perform duties at similar companies .
As regards syndics, whereas Argentine laws provide
them a legality control function, Tarjeta Naranja S.A.
considers there are no impediments for syndics to take
part in different Supervisory Syndics’ 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.
X
X
As regards Senior Management’s training, Tarjeta
Naranja has training and development programs,
designed on a personalized basis, which include courses
in information security and internal and external frauds,
as well as refresher courses in technical, leadership and
management matters. With respect to training in
prevention of money laundering and funding of
and first-class
terrorist activities, and SOX (Sarbanes-Oxley) matters,
managers, which
Tarjeta Naranja S.A. has managed such training for
include matters
those persons directly engaged in the matter. During
about their roles and
the year, through the IAE (Instituto Argentino de la
responsibilities, the
Empresa), an 80-hour attendance program was
comprehensive
developed, which addressed matters such as Strategic
business risk
Thinking, Innovation, and Risk and Uncertainty
management,
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.
II.7.2 The Issuer,
The members of the Board of Directors and Senior
through other means
X
Management are free and supported by the Company
not mentioned in
to carry out the training courses deemed advisable.
II.7.1, encourages
the Management
Body and first-class
managers to be
constantly trained so
as to supplement
their education level
thus adding value to
the Issuer. State how
this is done.
PRINCIPLE III. GUARANTEE AN EFFECTIVE POLICY TO IDENTIFY, ASSESS, MANAGE AND DISCLOSE THE BUSINESS RISK
Recommendation III:
The Management
X
Body shall have a
policy on the
comprehensive
business risk
management and
monitors its
appropriate
implementation.
III.1 The Issuer has
The nature of the Company's operations and the
policies on
X
characteristics of its customer base expose it to several
comprehensive
business risk (on
compliance with
strategic, operating,
financial, accounting
reporting, laws and
regulations goals,
among others).
Describe the most
significant aspects
thereof.
III.2 There is a Risk
Management
Committee inside
the Management
Body or General
Division. Report on
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, Tarjeta
Naranja 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 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 notes (“obligaciones
negociables”) denominated in U.S. dollars. As the
policy of the Company and its subsidiaries is based on
mitigating the exchange rate risk related to its business
and operations, a series of hedging transactions were
performed with respect to the foreign currencydenominated debt in order to hedge the exchange rate
risk to which they would be otherwise exposed.
The Company is exposed to interest rate risks due to
financings obtained through the issuance of notes
(“obligaciones negociables”) and borrowing of financial
leases and loans at variable rate. In all cases of loans
and notes (“obligaciones negociables”) with variable
rate, the applicable rate is private Badlar.
X
One of Tarjeta Naranja 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:
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.
III.3 There is an
independent
function within the
Issuer’s General
Division that
implements the
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.
• 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.
X
X
In addition to the considerations disclosed in the
preceding recommendation, for this duty there is a
specific area at the controlling company.
We have aligned the internal control system for the
financial information, following the criteria set out in
the “Internal Control Framework” issued by COSO
(Committee of Sponsoring Organizations of the
Treadway Commission), with the requirements set
forth by Section 404 of US Sarbanes-Oxley Act, a
process that is monitored by the Audit Committee.
These regulations require submitting, along with the
annual audit, a report on the Company’s management
in connection with the design and maintenance, as
well as a periodic assessment, of the internal control
system for financial reporting, together with our
external auditor’s report.
The internal audit area has planned to certify the
internal audit activity under International Standards
for the Professional Practice of Internal Auditing,
issued by The Institute of Internal Auditors based in
USA. With this we seek to determine whether the
audit activity is performed in conformity with the
standards defined in the International Framework for
the Professional Practice of Internal Auditing, under
the Standards issued by The Institute of Internal
Auditors based in USA.
III.5 The
The outcome of risk management is reported to the
Management Body
X
Board of Directors and is disclosed in notes to the
reports the results of
financial statements, specifically in Note 4, which refers
monitoring the risk
to the financial risk management and where the credit,
management
liquidity, market and capital management risks are
performed jointly
analyzed. Such financial statements are submitted for
with the General
the approval of the Shareholders’ Meeting.
Division in the
financial statements
and the Annual
Report. Specify the
main aspects of the
above disclosures.
PRINCIPLE IV. SAFEGUARD THE INTEGRITY OF FINANCIAL INFORMATION WITH INDEPENDENT AUDITS
Recommendation IV:
Ensure the
independence and
transparency of the
duties the Audit
Committee and the
External Auditor are
entrusted with.
IV.1 The
Management Body,
when appointing the
members of the
Audit Committee,
considering that
most of them shall
be independent,
assesses whether it
is advisable to be
chaired by an
independent
member.
IV.2 There is an
internal audit
function that reports
to the Audit
Committee or the
X
X
X
As shown above, TN is not required to have
independent directors since it does not publicly offer
its shares, but debt securities. Therefore, the members
of the Audit Committee are dependent directors.
Moreover, directors meet the principles defined in
Tarjeta Naranja S.A.’s Code of Ethics.
Tarjeta Naranja S.A. has an internal control 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 entity's sectors and
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).
IV.3 The members of
the Audit Committee
annually assess the
suitability,
independence and
performance of the
External Auditors
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.
Furthermore, the Audit Committee monitors such
compliance. All Tarjeta Naranja'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 identifying
and assessing the entity’s risks.
It periodically issues reports on the progress of followups on findings, and the plans or actions to redress the
situation. These reports are submitted to the Audit
Committee to be addressed at such body’s meeting.
The area is working on a project for certification by the
Institute of Internal Auditors in Argentina.
X
The Audit Committee has a close relationship with the
external auditors, which allows it to thoroughly analyze
the significant aspects of the audit of financial
statements and obtain detailed information about work
planning and progress. The Audit Committee also
assesses the services rendered by our external auditors,
determines whether their independence condition is
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
Supervisory
Committee and/or
the External Auditor,
and, in the case of
the latter, if turnover
includes the external
audit firm or only
natural persons.
met, as required by applicable laws, and monitors their
performance in order to ensure that it is satisfactory.
X
Regarding the turnover of the members of the External
Audit, Tarjeta Naranja 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,
mainly due to the complexity of the businesses to be
controlled and audited and the lengthy period of time it
would take a person who is completely unfamiliar with
the function to start to understand such businesses.
However, the turnover of the signing partner, who
turns over every a five-year period, is deemed
adequate.
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
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
X
The interim financial statements are addressed at Board
of Directors’ meetings. In Tarjeta Naranja S.A.’s case,
the Board of Directors is made up of executives from
the controlling company or group companies.
Accordingly, it is not deemed necessary to foster
informative meetings other than the Board of Directors’
meetings that approve the financial statements to
submit them to the shareholders.
X
The Company has a web site, where financial
information is provided and, upon any inquiry, investors
are assisted by members of the Board of Directors.
Furthermore, corporate and financial information is
periodically submitted by Tarjeta Naranja S.A. through
the web page of the C.N.V., the Stock Exchange and
MAE. The Company also has telephone lines to answer
inquiries.
X
X
X
In the particular case of Tarjeta Naranja, it seems it is
not necessary to offer incentives aimed at promoting
attendance to Shareholders’ Meeting, because shares
are concentrated in two shareholders, both of whom
are members of the group to which it belongs.
by differentiating
the 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
decision-making.
Describe the main
guidelines
thereof.
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.
V.2.5 At the
Shareholders’
Meetings, where
X
X
Tarjeta Naranja considers that this type of regulations
are not necessary since, as explained above, it only has
two shareholders, both of whom are members of the
same group to which it belongs. Consequently, the
information flows well in advance prior to decisionmaking.
Given Tarjeta Naranja 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
As explained above with respect to Tarjeta Naranja’s
share distribution, the application of these policies is
not necessary.
X
To date, no decision has been made regarding the
implementation of a Code on Corporate Governance.
However, the Company does not disregard the
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.
possibility of implementing it.
Tarjeta Naranja S.A. has outstanding non-endorsable
registered ordinary shares, entitled to one vote per
share. Even in the case where as established in the
Bylaws, non-endorsable registered preferred shares
were issued, they would be also entitled to only one
vote per share. Over the last three years, the structure
of outstanding shares has not changed, of which 100%
are non-endorsable registered ordinary shares.
X
Recommendation
V.4: Establish
mechanisms of
protection for all
shareholders against
takeovers.
Recommendation
V.5: Increase the
percentage of
outstanding shares
on capital.
X
X
Tarjeta Naranja publicly offers debt securities, rather
than shares. As all the shareholders are part of the
same group, it was not 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 80% of shares,
whereas Fedler S.A. and Dusner S.A. owned 10% of
shares each. Since then, Tarjetas Regionales S.A. has
owned 99% of shares and Tarjetas Cuyanas S.A. owns
the remaining 1%. The Company has no shares under
the public offer system and, therefore, does not foster
spreading its capital.
PRINCIPLE VI. KEEP A DIRECT AND RESPONSIBLE RELATION WITH THE COMMUNITY
Recommendation
V.6: Ensure that
there is a
transparent policy
on dividends.
V.6.1 The Issuer has
a policy on the
distribution of
dividends provided
in the Corporate
Bylaws and approved
by the Shareholders’
X
X
The Bylaws provide that realized and liquid profits will
be allocated as follows: a) 5% until reaching 20% of
capital stock to Legal Reserve; b) Board of Directors’
and Supervisory Committee’s compensation; c) the
balance will be distributed among the shareholders as
cash dividends within one year as from their approval –
in proportion to their respective payments – except as
Meeting. Such policy
establishes the
conditions to
distribute cash
dividends or shares.
If there is such a
policy, state the
criteria, frequency
and conditions that
shall be met for the
payment of
dividends.
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.
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
otherwise decided by the Ordinary Shareholders’
Meeting.
X
Tarjeta Naranja 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 entity'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.
The last distribution of dividends was approved through
the Ordinary Shareholders’ Meeting held on April 11,
2012.
X
X
Tarjeta Naranja S.A. has a web page of the Company,
which can be freely accessed, which is permanently
of public access,
which does not only
furnish material
information of the
Company (Corporate
Bylaws, group,
members of the
Management Body,
financial statements
Annual Report,
among others), but it
also gathers inquiries
of users in general.
VI.2 The Issuer issues
an Annual Report for
Social and
Environment
Responsibility
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 21-Foretica, AA
1000, Ecuadorian
Principles, among
others).
updated and whereby the Company’s financial
information may be accessed. Through such page, users
may contact and leave their inquiries, which are
answered promptly. There is a blog, an online chat
channel where visitors may read and comment on new
products, advertising, promotions, technological and
operating advances for the purpose of making products
and services jointly with customers, as well as presence
on Facebook and Twitter. Furthermore, corporate and
financial information is periodically submitted by
Tarjeta Naranja S.A. through the web page of the
C.N.V., the Stock Exchange and MAE.
X
PRINCIPLE VII. COMPENSATE FAIRLY AND RESPONSIBLY
Recommendation
VII: Establish clear
X
policies on the
compensation of the
members of the
Management Body
and first-class
Tarjeta Naranja shares the social and environmental
performance with its customers, employees, suppliers
and the entire community by annually publishing the
Report on Activities, which systematizes the
information about the actions taken in connection
with Social Responsibility. This report is divided into
areas. These are as follows:
Our community: Apadrinando Escuelas (Support for
Schools); Apadrinando Comedores (Support for
Community Kitchens); Missions; Aporte Solidario
(Solidary Contribution); Un Gol, un Potrero” (One Goal,
One Soccer Field); actions carried out from the
branches in the communities where we are; cultural
actions.
Environment: biodegradable cards; paper recycling;
eco-efficient paper; ecological bags; remanufactured
toners and safe destruction of casings; recycling and
final disposal of technological waste.
Our Employees: Training; the Best Place to Work;
work environment; personnel selection; honors and
recognitions.
Our Customers: Assured quality; means of contact
and communication with our customers.
The report is available on our web page.
This supplements the Annual Report where the
financial performance is published and is a key tool to
report the policies, practices and programs fostered by
the entity in the country, in addition to the
improvements made year after year.
managers, with
special focus on
establishing
conventional or
statutory limitations
based on the
existence or
inexistence of
profits.
VII.1. The Issuer has
a Compensation
Committee:
VII.1.1 made up of at
least three members
of the Management
Body, mostly
independent ones.
VII.1.2 chaired by an
independent
member of the
Management Body
VII.1.3 that has
members who prove
to have adequate
skills and experience
in human resources
policies-related
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:
X
Tarjeta Naranja S.A. does not have a Compensation
Committee, because it considers the procedures
currently followed 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
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.
VII.4. If there is no
Compensation
Committee, explain
how the duties
described in VII. 2
are performed
within the
Management Body
itself.
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
X
PRINCIPLE VIII. ENCOURAGE BUSINESS ETHICS
Recommendation
The Directors’ compensation is decided by the General
Shareholders’ Meeting, within the limits established by
the effective law and regulations, which is adequate
enough so as to attract and retain competent
directors. The managerial staff is compensated based
on bands that are equal internally and compete
externally based on market compensation values. The
policy on the issue also indicates that the
compensation offered are in a level that is enough so
as to attract and retain competent managers.
VIII: Ensure ethical
behaviors at the
Issuer.
VIII.1. The Issuer has
a Business Code of
Conduct. State the
main guidelines and
whether it is publicly
known. Such code is
signed by, at least,
the members of the
Management Body
and first-class
managers. Indicate
whether its
application to
suppliers and
customers is
encouraged.
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
X
X
Tarjeta Naranja seeks a work environment that
fosters honesty, proactivity, responsibility, security,
data confidentiality, respect for the law and business
loyalty.
To manage to have a pleasant workplace requires
basing daily relationships on mutual respect, trust,
and kind and easy to get on with manner, both
between workmates and bosses, and suppliers and
customers, performing all activities with the highest
ethical, labor and personal principles.
In this respect, Tarjeta Naranja’s Code of Ethics,
which governs all the Company’s members, is
intended to provide the main basics for all the
Company's members to act in the same way and with
the same values in the face of similar situations. The
trust provided by shareholders, customers and the
public in general largely depends on compliance with
these principles.
Tarjeta Naranja has a process called Democratic
Assessment, which is carried out with a tool where
all the Company's employees assess their leaders and
where they can provide their opinion on any
employee from their same area or not, as well as
write a letter to the Company’s Senior Management
and the Chairman about any aspect deemed
necessary, event unlawful or unethical behavior
reporting. This tool has been used for more than 15
years. Such assessment is made through an
electronic system and the information included
therein is given confidential treatment.
VIII.3. The Issuer has
policies, processes
X
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:
Foster the inclusion
X
of provisions related
to good corporate
governance practices
in the Corporate
Bylaws.
Reporting is made to the CEO or Board of Directors'
Chairman, depending on to whom the person
reports. Reporting is managed by them, who make
the Audit Committee become involved, if
appropriate, providing a personalized treatment to
each reporting.
In addition, the Code of Ethics contemplates a
procedure to escalate and treat reporting.
Given the essentially ever-changing nature of
principles and recommendations inherent to good
corporate
governance,
and
its
recent
implementation internationally, locally and at
corporate level, Tarjeta Naranja S.A. does not deem
it very advisable for the time being to include good
corporate governance practices in the Corporate
Bylaws, due to its eminent static nature and difficult
to be changed, notwithstanding that some of such
provisions are included, such as the allocation of
profits at fiscal year-end. The Company believes for
the time being that adopting internal Codes of Ethics
allows and will allow developing the desired
behaviors in this regard. However, the gradual
inclusion in the future of some of the provisions in
the Corporate Bylaws is not disregarded, as long as it
is deemed advisable.
Tarjeta Naranja S.A.
(Free Translation from the Original in Spanish for Publication in Argentina)
Legal Domicile:
Sucre 151 – Córdoba
Principal Line of Business: Credit Card Administrator
18th Fiscal Year
Financial Statements
For the fiscal year commenced January 1, 2012 and ended
December 31, 2012, on a comparative basis
Figures stated in thousands of Argentine Pesos
Date of Registration with the Public Registry of Commerce:
Of Bylaws:
December 12, 1995
Registration Number with the Public Registry of
Commerce:
No. 1363 Fo. 5857 Vol. 24/95
Date of Expiration of Company’s Bylaws:
December 12, 2094
CAPITAL STATUS
Shares
Number
Voting Rights per
Share
Type
Subscribed
Paid-in
In Thousands of AR$
Ordinary shares with a face value of AR$
2,400 10,000
1
2,400
24,000
24,000
24,000
24,000
Information on the Controlling Company:
Company’s Name:
Tarjetas Regionales S.A.
Legal Domicile:
Belgrano 1415 Piso 1° – Mendoza
Principal Line of Business:
Financial and investment activities. Its principal line of business
is to invest in nonbanking credit card issuers and in companies
that perform services supplementary to the abovementioned
activity (holding company).
Interest in the Shareholders’ Equity:
99%
Percentage of Votes:
99%
1
TARJETA NARANJA S.A.
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2012 AND 2011
(Free Translation from the Original in Spanish for Publication in
Argentina)
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Statement of Income
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
12.31.2012
Note
12.31.2011
In Thousands of AR$
Revenues from Services
6
1,785,669
Expenses from Services
7
(210,019)
(144,354)
1,575,650
1,188,201
Net Income from Services
1,332,555
Revenues from Financing
8
1,453,885
872,708
Expenses from Financing
9
(430,047)
(273,920)
1,023,838
598,788
35,760
56,432
2,635,248
1,843,421
(365,868)
(58,172)
2,269,380
1,785,249
Net Income from Financing
Net Income from Short-term Investments
10
Total Operating Income
Provision for Credit Losses, Net of Recoveries
11
Total Operating Income, Net of Provision for Credit Losses
Personnel Expenses
12
(808,098)
(533,083)
Taxes and Rates
13
(285,077)
(185,339)
Advertising Expenses
Depreciation of Property, Plant and Equipment and Amortization of Intangible
Assets
14
(106,428)
(80,295)
15
(31,174)
(21,934)
Other Operating Expenses
16
(366,252)
(235,243)
(1,597,029)
(1,055,894)
672,351
729,355
17
(8,939)
(2,604)
663,412
726,751
18
(231,803)
(252,083)
Net Income for the Fiscal Year
431,609
474,668
Net Income Attributable to the Company’s Shareholders
431,609
474,693
-
(25)
179.84
197.79
Total Operating Expenses
Net Income before Investments in Associates, Joint Ventures and Other
Companies
Loss from Investments in Associates, Joint Ventures and Other Companies
Income before Income Tax
Income Tax
Net Loss Attributable to Non-Controlling Interest
Earnings per Share Attributable to the Company’s Shareholders
Basic and Diluted Earnings per Share
The notes are an integral part of the financial statements.
3
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Statement of Other Comprehensive Income
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
12.31.2012
Note
Net Income for the Fiscal Year
12.31.2011
In Thousands of AR$
431,609
474,668
1,930
225
1,930
225
433,539
474,893
433,539
474,918
-
(25)
180.64
197.88
Other Comprehensive Income:
Reserve for Translation Differences Related to Foreign Operations
Other Net Comprehensive Income for the Fiscal Year
Total Comprehensive Income for the Fiscal Year, Net of Taxes
Comprehensive Income for the Fiscal Year Attributable to the Company’s
Shareholders
Comprehensive Loss for the Fiscal Year Attributable to the Non-Controlling
Interest
19
Earnings per Share Attributable to the Company’s Shareholders
Basic and Diluted Earnings per Share
The notes are an integral part of the financial statements.
4
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Statement of Financial Position
As of December 31, 2012 and 2011, and January 1, 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
Note
12.31.2012
12.31.2011 01.01.2011
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents
Investments
Receivables from Services
Other Receivables
12.31.2012 12.31.2011 01.01.2011
In Thousands of AR$
LIABILITIES
20
21
22
23
CURRENT LIABILITIES
Accounts Payable
Bank and Financial Loans
Compensation and Social Security Charges
Tax Charges
Other Liabilities
Provision for Income Tax
3,380,926 Total Current Liabilities
413,798
24,010
6,622,494
70,617
438,189
4,883,545
60,855
7,130,919
5,382,589
22
21
23
18
173,499
28,611
39,566
138,841
188,395
5,180
89,520
NON-CURRENT LIABILITIES
87,550 Bank and Financial Loans
- Provisions
3,270 Other Liabilities
102,564
24
25
26
20,683
142,080
96,058
639,338
7,873
107,112
51,516
449,596
5
88,828
18,793
301,010 Total Non-current Liabilities
Total Current Assets
NON-CURRENT ASSETS
Receivables from Services
Investments
Other Receivables
Deferred Income Tax Assets
Investments in Associates, Joint Ventures
and Other Companies
Property, Plant and Equipment
Intangible Assets
Total Non-current Assets
Note
In Thousands of AR$
Total Assets
7,770,257
5,832,185
314,354
4,800
3,030,555
31,217
27
28
29
30
31
18
3,555,512
982,449
165,853
110,218
11,235
30,404
4,855,671
2,695,258
613,388
115,363
74,364
9,661
61,463
3,569,497
1,877,070
607,743
74,165
47,559
6,475
39,073
2,652,085
28
32
31
1,340,053
15,357
-
1,011,563
25,190
-
159,953
36,273
660
1,355,410
1,036,753
196,886
Total Liabilities
6,211,081
4,606,250
2,848,971
SHAREHOLDERS’ EQUITY
Attributable to the Company’s Shareholders
Attributable to the Non-Controlling Interest
1,559,176
1,559,176
-
1,225,935
1,225,637
298
832,965
832,719
246
3,681,936 Total Liabilities and Shareholders' Equity
7,770,257
5,832,185
3,681,936
The notes are an integral part of the financial statements.
5
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Statement of Changes in Shareholders’ Equity
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
Attributable to the Company’s Shareholders
Shareholders’ Contributions
Reserves
Capital
Stock
Integral
Adjustment
Capital
Stock
Balances as of 01.01.2012
Changes during the Fiscal Year:
Net Income for the Fiscal Year
Other Comprehensive Income
Tarjetas Mira S.A. Merger
Distribution of Cash Dividends decided
pursuant to Minutes of Shareholders’ Meeting
No. 34 dated 04.11.2012
Adjustment of Undistributed Profits due to
Establishment of Reserve
Establishment of Reserve for Conduction of
New Operations decided pursuant to Minutes
of Shareholders' Meeting No. 34 dated
04.11.2012
Balances as of 12.31.2012
Balances as of 01.01.2011
Changes during the Fiscal Year:
Net Income (Loss) for the Fiscal Year
Disposal of Cobranzas Regionales S.A.
Acquisition of Shares in Tarjeta Mira S.A.
Other Comprehensive Income
Distribution of Cash Dividends decided
pursuant to Minutes of Shareholders’ Meeting
No. 31 dated 04.01.2011
Creation of a Discretionary Reserve decided
pursuant to Minutes of Shareholders’ Meeting
No. 31 dated 04.01.2011
Balances as of 12.31.2011
Reserve for
Discretionary Conduction of
Reserve
New Operations
(a)
Legal
Reserve
Subtotal
In Thousands of AR$
58,000
-
24,000
26,622
50,622
10,125
-
-
-
-
-
-
-
-
-
-
-
-
24,000
24,000
26,622
26,622
-
Reserve for
Translation
Differences
Related to
Foreign
Operations
Undistributed
Profits
225
1,106,665
-
1,930
431,609
-
-
-
-
-
-
225
50,622
50,622
10,125
10,125
58,000
-
-
-
-
-
-
-
24,000
26,622
50,622
NonControlling
Interest
Total
Shareholders’
Equity
298
1,225,935
(298)
431,609
1,930
(298)
(100,000)
-
(100,000)
-
(225)
-
-
1,006,665
1,006,890
-
2,155
-
(1,006,665)
431,384
771,972
246
1,559,176
832,965
-
-
225
474,693
-
(25)
(246)
323
-
474,668
(246)
323
225
-
-
-
-
(82,000)
-
(82,000)
10,125
58,000
58,000
-
225
(58,000)
1,106,665
298
1,225,935
(a)The total amount of the Reserve for Conduction of New Operations was decided by Shareholders’ Meeting pursuant to Minutes of Shareholders’ Meeting No. 34 dated 04.11.2012.
The notes are an integral part of the financial statements.
6
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Statement of Cash Flows
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
Note
CASH FLOW AND CASH EQUIVALENTS FROM OPERATING ACTIVITIES
Net Income for the Fiscal Year
Plus Income Tax Accrued during the Fiscal Year
Plus Interests and Other Financial Expenses Accrued during the Fiscal Year, Net
of Interests and Other Financial Income Accrued
Adjustments to Calculate Net Cash Flow and Cash Equivalents from Operating
Activities:
Changes in Operating Assets
Changes in Operating Liabilities
NET CASH FLOW AND CASH EQUIVALENTS USED IN OPERATING
ACTIVITIES
CASH FLOW AND CASH EQUIVALENTS FROM INVESTING ACTIVITIES
Non-cash Equivalent Investments, Net of Collections
Decrease in Cash – Tarjeta Mira S.A. as of 03.31.2012
Payments for Property, Plant and Equipment Purchases
Payments for Intangible Assets Purchases
Collection of Dividends – Tarjetas Cuyanas S.A.
Decrease in Cash and Cash Equivalents related to the Sale of Cobranzas
Regionales S.A. and the Purchase of Tarjeta Mira S.A.
Cash Contributions to Subsidiaries / Purchase of Interest in Other Companies
NET CASH FLOW AND CASH EQUIVALENTS USED IN INVESTING
ACTIVITIES
CASH FLOW AND CASH EQUIVALENTS FROM FINANCING ACTIVITIES
Bank Loans Obtained
Checking Account Overdrafts Obtained
Notes (“Obligaciones Negociables”) Issued
Payment of Dividends corresponding to Fiscal Years 2011/2010
Payment of Principal and Interest on Bank and Financial Loans
Payment of Principal and Interest on Notes (“Obligaciones Negociables”)
Payment of Other Financial Expenses and Tax on Bank Credits and Debits
Payments of Hedging Transactions, Net of Collections
Increase in Accounts Payable
NET CASH FLOW AND CASH EQUIVALENTS GENERATED BY FINANCING
ACTIVITIES
GROSS (DECREASE) / INCREASE IN CASH AND CASH EQUIVALENTS
Increase Resulting from Foreign Exchange Gain Attributable to Cash and Cash
Equivalents
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS
Cash and Cash Equivalents at the Beginning of the Fiscal Year
Cash and Cash Equivalents at Fiscal Year-End
The notes are an integral part of the financial statements.
7
38
39
40
37
37
12.31.2012
12.31.2011
In Thousands of AR$
431,609
231,803
474,668
252,083
289,188
190,907
671,888
(2,162,336)
(312,581)
264,742
(2,007,822)
(211,622)
(850,429)
(1,037,044)
(49,256)
(428)
(41,126)
(54,825)
194
-
4,800
(33,069)
(38,241)
(236)
(17,090)
(23,618)
(162,531)
(90,364)
423,000
514,064
(100,000)
(287,995)
(379,228)
(28,471)
(21,529)
865,962
76,000
82,397
1,111,359
(82,000)
(256,563)
(452,663)
(32,264)
(9,356)
801,428
985,803
(27,157)
1,238,338
110,930
2,766
(24,391)
438,189
413,798
12,905
123,835
314,354
438,189
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
Notes to the Financial Statements
(In the notes, figures are stated in thousands of Argentine Pesos, except otherwise noted)
Note 1 – General Information
Note 2 – Basis for the Preparation and Adoption of International Financial Reporting Standards
Note 3 – Financial Risk Management
Note 4 – Additional Information to 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 – Personnel Expenses
Note 13 – Taxes and Rates
Note 14 – Advertising Expenses
Note 15 - Depreciation of Property, Plant and Equipment and Amortization of Intangible Assets
Note 16 – Other Operating Expenses
Note 17 – Loss from Investments in Associates, Joint Ventures and Other Companies
Note 18 – Income Tax
Note 19 – Reserve for Translation Differences Related to Foreign Operations
Note 20 – Cash and Cash Equivalents
Note 21 – Investments
Note 22 – Receivables from Services
Note 23 – Other Receivables
Note 24 – Investments in Associates, Joint Ventures and Other Companies
Note 25 – Property, Plant and Equipment
Note 26 – Intangible Assets
Note 27 – Accounts Payable
Note 28 – Bank and Financial Loans
Note 29 – Compensation and Social Security Charges
Note 30 – Tax Charges
Note 31 – Other Liabilities
Note 32 – Provisions
Note 33 – Bank Loans
Note 34 – Financial Leases
Note 35 – Notes (“Obligaciones Negociables”)
Note 36 – Foreign Currency Hedge Contracts
Note 37 – Cash and Cash Equivalents – Statement of Cash Flows
Note 38 – Adjustments to Calculate Net Cash Flow and Cash Equivalents from Operating Activities
Note 39 – Changes in Operating Assets
Note 40 – Changes in Operating Liabilities
Note 41 – Changes in the Corporate Structure
Note 42 – Transactions with Companies and Related Parties
Note 43 – Restricted Assets
Note 44 – Tarjeta Naranja S.A.’s Investments Abroad
Note 45 – Portfolio Assignment
Note 46 – Information about Expenses and their Allocation under Section 64 Subsection b) of Law 19550
Note 47 – Subsequent Events
8
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 1 – GENERAL INFORMATION
Tarjeta Naranja S.A. (hereinafter, “the Company”) was organized as a corporation in the Province of Córdoba on
September 1, 1995. The Company is a leading credit-card company in Argentina. Its main business is to create,
develop, direct, manage, market, exploit and operate credit and/or debit and/or purchase and/or similar card
systems. The Company may hold an interest in the capital stock of other companies rendering supplementary
services to the financial activity, which are allowed by the Argentine Central Bank (BCRA).
These financial statements were approved for their issuance by the Company’s Board of Directors on February
13, 2013.
NOTE 2 – BASIS FOR THE PREPARATION AND ADOPTION OF INTERNATIONAL FINANCIAL
REPORTING STANDARDS
2.1 Requirements for Transition to IFRS
The Argentine National Securities Commission (C.N.V.) has established — through its General Resolutions No.
562/09 and 576/10 — the application of Technical Pronouncements 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 listing system prescribed in Act No. 17811, whether for their capital stock or notes
(“obligaciones negociables”), 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. These are the first annual financial statements presented under these standards.
Therefore, the date of transition to IFRS for the Company, as established in IFRS 1 “First-time Adoption of
IFRS”, is January 1, 2011.
The Company’s financial statements for the fiscal year ended December 31, 2012 and 2011 have been prepared
in conformity with the IFRS issued by the IASB and the interpretations issued by the IFRIC that are applicable as
of that date.
The Company’s financial statements were previously prepared in conformity with Argentine GAAP (NCP ARG as
per its initials in Spanish). Argentine GAAP differ in some respects from IFRS. In order to prepare these financial
statements, Management has changed certain accounting valuation and disclosure policies previously applied
under Argentine GAAP to comply with IFRS. The main accounting policies are described in the notes below.
9
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – BASIS FOR THE PREPARATION AND ADOPTION OF INTERNATIONAL FINANCIAL
REPORTING STANDARDS (Continued)
2.1 Requirements for Transition to IFRS (Continued)
The comparative figures and those as of the transition date (January 1, 2011) have been changed to reflect
those adjustments. Note 2.4 discloses a reconciliation of shareholders’ equity, statement of income and other
comprehensive income figures related to the financial statements issued in conformity with Argentine GAAP as
of the transition date (January 1, 2011) 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. In preparing
these financial statements, the significant judgment made by Management in applying the Company’s
accounting policies and the main estimate uncertainty sources were the same as those applied to the financial
statements for the fiscal year ended December 31, 2011.
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:
1.
Deemed Cost of Property, Plant and Equipment: The cost of Property, Plant and Equipment, restated
according to effective accounting standards, 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.
10
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – BASIS FOR THE PREPARATION AND
REPORTING STANDARDS (Continued)
ADOPTION
OF
INTERNATIONAL
FINANCIAL
2.2 Optional IFRS Exemptions (Continued)
2.
Cumulative Translation Differences Related to Foreign Operations: Cumulative translation differences
related to foreign operations were considered to be nil as of the date of transition to IFRS.
3.
Business Combinations: The Company has opted not to apply IFRS 3 “Business Combinations”
retrospectively for business combinations prior to the date of transition to IFRS.
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.
2.3 Mandatory IFRS Exemptions
Below are the mandatory exemptions applicable to the Company under IFRS 1:
The Company reviewed the significant estimates as of January 1, 2011 (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.
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 Pronouncements 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 January 1, 2011 are included below. In this regard, in preparing
reconciliations, the Company has considered those IFRS it expects to be applicable to the preparation of these
financial statements.
11
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – BASIS FOR THE PREPARATION AND ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS (Continued)
2.4 Reconciliations Required (Continued)
A.
Shareholders’ Equity Reconciliation
As of January 1, 2011 and December 31, 2011:
Previous
Standard
ASSETS
Cash and Cash Equivalents
Investments
Receivables from Services
Other Receivables
Total Current Assets
Receivables from Services
Other Receivables
Other Investments
Deferred Income Tax Assets
Investments in Associates, Joint Ventures and Other
Companies
Property, Plant and Equipment
Intangible Assets
Total Non-current Assets
Total Assets
LIABILITIES
Accounts Payable
Bank and Financial Loans
Compensation and Social Security Charges
Tax Charges
Other Liabilities
Provision for Income Tax
Total Current Liabilities
Bank and Financial Loans
Other Liabilities
Provisions
Total Non-current Liabilities
Total Liabilities
Total Shareholders’ Equity
Effect of the
Transition to
IFRS
January 1, 2011
IFRS
Previous
Standard
Effect of the
Transition to
IFRS
December 31, 2011
IFRS
78,256
241,514
3,127,425
28,894
3,476,089
87,550
71,931
-
236,098
(236,714)
(96,870)
2,323
(95,163)
(68,661)
102,564
314,354
4,800
3,030,555
31,217
3,380,926
87,550
3,270
102,564
135,934
302,336
4,883,546
58,498
5,380,314
188,395
94,700
982
-
302,255
(302,336)
(1)
2,357
2,275
(89,520)
(982)
89,520
438,189
4,883,545
60,855
5,382,589
188,395
5,180
89,520
5
90,495
18,798
268,779
3,744,868
(1,667)
(5)
32,231
(62,932)
5
88,828
18,793
301,010
3,681,936
7,873
108,094
51,981
452,025
5,832,339
(982)
(465)
(2,429)
(154)
7,873
107,112
51,516
449,596
5,832,185
1,876,840
607,743
74,338
86,657
6,475
2,652,053
159,953
660
36,273
196,886
2,848,939
895,929
230
(173)
(39,098)
39,073
32
32
(62,964)
1,877,070
607,743
74,165
47,559
6,475
39,073
2,652,085
159,953
660
36,273
196,886
2,848,971
832,965
2,695,202
613,388
115,547
135,853
9,661
3,569,651
1,011,563
25,190
1,036,753
4,606,404
1,225,935
56
(184)
(61,489)
61,463
(154)
(154)
-
2,695,258
613,388
115,363
74,364
9,661
61,463
3,569,497
1,011,563
25,190
1,036,753
4,606,250
1,225,935
12
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – BASIS FOR THE PREPARATION AND ADOPTION OF INTERNATIONAL FINANCIAL
REPORTING STANDARDS (Continued)
2.4 Reconciliations Required (Continued)
B. Statement of Income and Comprehensive Income Reconciliation
As of December 31, 2011:
Revenues from Services
Expenses from Services
Net Income from Services
Effect of the
Transition to
IFRS
December 31, 2011
1,340,049
(7,494)
(145,017)
663
1,195,032
(6,831)
1,332,555
(144,354)
1,188,201
Revenues from Financing
Expenses from Financing
Net Income from Financing
872,708
(273,912)
598,796
(8)
(8)
872,708
(273,920)
598,788
56,458
(26)
56,432
1,850,286
(155,039)
1,695,247
(6,865)
96,867
90,002
1,843,421
(58,172)
1,785,249
(536,522)
(185,355)
(80,379)
(22,728)
(237,775)
(1,062,759)
3,439
16
84
794
2,532
6,865
(533,083)
(185,339)
(80,295)
(21,934)
(235,243)
(1,055,894)
632,488
(2,379)
96,867
(225)
729,355
(2,604)
630,109
(218,180)
96,642
(33,903)
726,751
(252,083)
Net Income for the Fiscal Year
411,929
62,739
474,668
Comprehensive Income for the Period Attributable to the Company’s
Shareholders Loss for the Fiscal Year Attributable to the Non-Controlling
Comprehensive
Interest
411,954
62,739
474,693
(25)
-
(25)
Other Comprehensive Income:
Reserve for Translation Differences Related to Foreign Operations
Other Net Comprehensive Income for the Fiscal Year
-
225
225
225
225
Total Comprehensive Income for the Fiscal Year, Net of Taxes
411,929
62,964
474,893
411,954
62,964
474,918
(25)
-
(25)
Previous
Standard
Net Income from Short-term Investments
Total Operating Income
Provision for Credit Losses, Net of Recoveries
Total Operating Income, Net of Provision for Credit Losses
Personnel Expenses
Taxes and Rates
Advertising Expenses
Depreciation of Property, Plant and Equipment and Amortization of Intangible Assets
Other Net Operating Expenses
Total Operating Expenses
Net Income before Investments in Associates, Joint Ventures and Other
Companies
Loss from Investments in Associates, Joint Ventures and Other Companies
Income before Income Tax
Income Tax
Comprehensive Income for the Fiscal Year Attributable to the Company’s
Shareholders
Comprehensive Loss for the Fiscal Year Attributable to the Non-Controlling
Interest
13
IFRS
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – BASIS FOR THE PREPARATION AND ADOPTION OF INTERNATIONAL FINANCIAL
REPORTING STANDARDS (Continued)
2.4 Reconciliations Required (Continued)
C. Statement of Cash Flow Reconciliation
Previous
Standard
CASH FLOW AND CASH EQUIVALENTS FROM OPERATING ACTIVITIES
Net Income for the Fiscal Year
Plus Income Tax Accrued during the Fiscal Year
Minus Income from Co-Investments with Tarjeta Naranja Dominicana S.A.
Plus Interest and Other Financial Expenses Accrued during the Fiscal Year, Net of
Interest and Other Financial Income Accrued
Adjustments to Calculate Net Cash Flow and Cash Equivalents from Operating
Activities:
Changes in Operating Assets
Changes in Operating Liabilities
NET CASH FLOW AND CASH EQUIVALENTS USED IN OPERATING ACTIVITIES
CASH FLOW AND CASH EQUIVALENTS FROM INVESTING ACTIVITIES
Non-cash equivalent investments, net of collections
Payments for Property, Plant and Equipment Purchases
Payments for Intangible Assets Purchases
Cash Contributions to Subsidiaries / Purchase of Interest in Other Companies
Decrease in Cash and Cash Equivalents related to the Sale of Cobranzas Regionales
S.A. and the Purchase of Tarjeta Mira S.A.
NET CASH FLOW AND CASH EQUIVALENTS USED IN INVESTING ACTIVITIES
CASH FLOW AND CASH EQUIVALENTS FROM FINANCING ACTIVITIES
Bank Loans Obtained
Checking Account Overdrafts Obtained
Notes (“Obligaciones Negociables”) Issued
Payment of Dividends – Fiscal Years 2011/2010
Payment of Principal and Interest on Bank and Financial Loans
Payment of Principal and Interest on Notes (“Obligaciones Negociables”)
Payment of Other Financial Expenses and Tax on Bank Credits and Debits
Payments of Hedging Transactions, Net of Collections
Increase in Accounts Payable
NET CASH FLOW AND CASH EQUIVALENTS GENERATED BY FINANCING
ACTIVITIES
FINANCIAL INCOME GENERATED BY CASH AND CASH EQUIVALENTS
Interest and Foreign Exchange Gain Generated by Funds in Custody, Time Deposits
and Mutual Funds
INCREASE IN CASH AND CASH EQUIVALENTS DUE TO FINANCIAL INCOME
GENERATED BY CASH AND CASH EQUIVALENTS
GROSS INCREASE IN CASH AND CASH EQUIVALENTS
Increase Resulting from Foreign Exchange Gain Attributable to Cash and Cash
Equivalents
NET INCREASE IN CASH AND CASH EQUIVALENTS
Cash and Cash Equivalents at the Beginning of the Fiscal Year
Cash and Cash Equivalents at Fiscal Year-End
14
Effects of the
Transition to
IFRS
December 31, 2011
IFRS
411,954
217,791
(44)
62,714
34,292
44
474,668
252,083
-
128,381
62,526
190,907
364,986
(2,007,053)
588,715
(100,244)
(769)
(800,337)
264,742
(2,007,822)
(211,622)
(295,270)
(741,774)
(1,037,044)
4,800
(33,085)
(38,786)
(23,618)
16
545
-
4,800
(33,069)
(38,241)
(23,618)
(1,259)
(91,948)
1,023
1,584
(236)
(90,364)
76,176
82,397
1,111,359
(82,000)
(253,317)
(452,663)
(31,174)
(9,356)
-
(176)
(3,246)
(1,090)
801,428
76,000
82,397
1,111,359
(82,000)
(256,563)
(452,663)
(32,264)
(9,356)
801,428
441,422
796,916
1,238,338
69,083
(69,083)
-
69,083
123,287
(69,083)
(12,357)
110,930
123,287
314,970
438,257
12,905
548
(616)
(68)
12,905
123,835
314,354
438,189
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 –
BASIS FOR THE PREPARATION AND ADOPTION OF INTERNATIONAL FINANCIAL
REPORTING STANDARDS (Continued)
2.4 Reconciliations Required (Continued)
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 incurred as of the date of the
financial statements, but that have not been individually identified, according to the guidelines set out in IAS 39.
In addition, the historical ratios are adjusted, if appropriate, to include recent information that reflects the
economic conditions as of the closing date of the financial statements, trends of behavior in the industry,
geographic or customer concentrations in each portfolio segment and any other information that could affect the
estimation of the allowance for credit losses related to receivables from services. Several factors may affect
Management’s estimation of the allowance for credit losses, including the volatility of the likelihood of loss,
migrations and estimates of the severity of losses.
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 AR$ 96,867, and an increase in
the shareholders’ equity as of December 31, 2011 amounting to AR$ 96,867.
(b) Change in Disclosure of the Reserve for Translation Differences Related to Foreign Operations
IAS 21 requires the Company to recognize translation differences arising from foreign operations in other
comprehensive income. As mentioned in Note 2.2, the Company decided to make use of the exemption set forth
in IFRS 1, which allows the entity that adopts IFRS for the first time to consider null the cumulative translation
differences as of the date of transition to such standards. Pursuant to Argentine GAAP, the Company chose the
option set forth in item 1.2 of Technical Pronouncement No. 18, thus charging translation differences to income
for the fiscal year.
The gain / (loss) on translation differences related to foreign operations is disclosed in other comprehensive
income as of December 31, 2011.
15
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 –
BASIS FOR THE PREPARATION AND ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS (Continued)
2.4 Reconciliations Required (Continued)
E. Explanation of Adjustments (Continued)
(c) Changes in Disclosure of the Investment in Associates and Joint Ventures
Previous
Standard
Effect of the Transition
to IFRS (TND)
IFRS
Previous Standard
January 01, 2011
ASSETS
Cash and Cash Equivalents
Short-term Investments
Receivables from Services
Other Receivables
Total Current Assets
Receivables from Services
Other Receivables
Other Investments
Deferred Income Tax Assets
Investments in Associates, Joint Ventures and Other
Companies
Property, Plant and Equipment
Intangible Assets
Total Non-current Assets
Total Assets
LIABILITIES
Accounts Payable
Bank and Financial Loans
Compensation and Social Security Charges
Tax Charges
Other Liabilities
Provision for Income Tax
Total Current Liabilities
Bank and Financial Loans
Other Liabilities
Provisions
Total Non-current Liabilities
Total Liabilities
Total Shareholders’ Equity
Effect of the Transition
to IFRS (TND)
IFRS
December 31, 2011
78,256
241,514
3,127,425
28,894
3,476,089
87,550
71,931
-
(616)
(3)
2,323
1,704
-
314,354
4,800
3,030,555
31,217
3,380,926
87,550
3,270
102,564
135,934
302,336
4,883,546
58,498
5,380,314
188,395
94,700
982
-
(81)
(1)
2,357
2,275
(982)
-
438,189
4,883,545
60,855
5,382,589
188,395
5,180
89,520
5
90,495
18,798
268,779
3,744,868
(1,667)
(5)
(1,672)
32
5
88,828
18,793
301,010
3,681,936
7,873
108,094
51,981
452,025
5,832,339
(982)
(465)
(2,429)
(154)
7,873
107,112
51,516
449,596
5,832,185
1,876,840
607,743
74,338
86,657
6,475
2,652,053
159,953
660
36,273
196,886
2,848,939
895,929
230
(173)
(25)
32
32
-
1,877,070
607,743
74,165
47,559
6,475
39,073
2,652,085
159,953
660
36,273
196,886
2,848,971
832,965
2,695,202
613,388
115,547
135,853
9,661
3,569,651
1,011,563
25,190
1,036,753
4,606,404
1,225,935
56
(184)
(26)
(154)
(154)
-
2,695,258
613,388
115,363
74,364
9,661
61,463
3,569,497
1,011,563
25,190
1,036,753
4,606,250
1,225,935
16
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 –
BASIS FOR THE PREPARATION AND ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS (Continued)
2.4 Reconciliations Required (Continued)
E. Explanation of Adjustments (Continued)
Changes in Disclosure of the Investment in Associates and Joint Ventures
Previous Standard
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 Operating Income
Provision for Credit Losses, Net of Recoveries
Total Operating Income, Net of Provision for Credit Losses
Personnel Expenses
Taxes and Rates
Advertising Expenses
Depreciation of Property, Plant and Equipment and Amortization of Intangible Assets
Other Operating Expenses
Total Operating Expenses
Net Income before Investments in Associates, Joint Ventures and Other Companies
Loss from Investments in Associates, Joint Ventures and Other Companies
Income before Income Tax
Income Tax
Net Income for the Fiscal Year
Net Income for the Fiscal Year Attributable to the Company’s Shareholders
Net Loss for the Fiscal Year Attributable to the Non-Controlling Interest
Other Comprehensive Income:
Reserve for Translation Differences Related to Foreign Operations
Other Net Comprehensive Income for the Fiscal Year
Total Comprehensive Income for the Fiscal Year, Net of Taxes
Comprehensive Income for the Fiscal Year Attributable to the Company’s Shareholders
Comprehensive Loss for the Fiscal Year Attributable to the Non-Controlling Interest
1,340,049
(145,017)
1,195,032
872,708
(273,912)
598,796
56,458
1,850,286
(155,039)
1,695,247
(536,522)
(185,355)
(80,379)
(22,728)
(237,775)
(1,062,759)
632,488
(2,379)
630,109
(218,180)
411,929
411,954
(25)
411,929
411,954
(25)
17
Effect of the Transition to
IFRS (TND)
December 31, 2011
(7,494)
663
(6,831)
(8)
(8)
(26)
(6,865)
(6,865)
3,439
16
84
794
2,532
6,865
-
-
IFRS
1,332,555
(144,354)
1,188,201
872,708
(273,920)
598,788
56,432
1,843,421
(58,172)
1,785,249
(533,083)
(185,339)
(80,295)
(21,934)
(235,243)
(1,055,894)
729,355
(2,604)
726,751
(252,083)
474,668
474,693
(25)
225
225
474,893
474,918
(25)
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – BASIS FOR THE PREPARATION AND
REPORTING STANDARDS (Continued)
ADOPTION OF INTERNATIONAL FINANCIAL
2.4 Reconciliations Required (Continued)
E.
Explanation of Adjustments (Continued)
(d) Tax Effect of IFRS Adjustments
It represents the income tax effect at the related rate of the abovementioned IFRS adjustments, as applicable.
The tax effect of IFRS adjustments represents an increase in the shareholders’ equity as of the date of the
transition to IFRS amounting to AR$ 33,903, and a decrease in the shareholders’ equity as of December 31, 2011
amounting to AR$ 33,903.
2.5 Accounting Policies
The accounting policies used in preparing these financial statements are consistent with those used in
reporting under IFRS as of December 31, 2011 and are based on those IFRS that are effective as of December
31, 2012. The most significant accounting policies are as follows:
2.5.1 Basis for Consolidation
(a) Subsidiaries
IFRS 10 “Consolidated Financial Statements” establishes a single basis for consolidation of all entities,
regardless of the nature of the investee, and this basis is the control, which includes three elements: power over
the investee, exposure or rights to variable returns of the investee and the ability to use its power over the
investee to affect the amount of the investor’s returns.
IFRS 10 supersedes all definitions of consolidation and control set out in IAS 27 and is mandatorily applicable to
fiscal years beginning on or after January 1, 2013. Early application is permitted. The Company has opted for the
early application of IFRS 10 as from the fiscal year beginning January 1, 2012.
Tarjeta Naranja S.A.’s financial statements as of January 1 and December 31, 2011 included the Company’s
parent-only financial statements and those of its subsidiaries. Subsidiaries were all the entities Tarjeta Naranja
S.A. controlled as a result of its power to exercise control over the entity’s operating and financial policies and
where it held more than 50% of voting rights. The subsidiaries were consolidated as from the date when the
control was exercised by Tarjeta Naranja S.A. and were no longer consolidated as from the date when the
control ceased.
18
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – BASIS FOR THE PREPARATION AND
REPORTING STANDARDS (Continued)
ADOPTION
OF
INTERNATIONAL
FINANCIAL
2.5 Accounting Policies (Continued)
2.5.1. Basis for Consolidation (Continued)
(a) Subsidiaries (Continued)
The following is information about the company over which control was exercised as of December 31, 2011:
Company
Percentage of
Shares and
Voting Rights
Activity
98%
Credit Card Administration
Tarjeta Mira S.A.
On April 23, 2012, the final merger agreement was signed between Tarjeta Naranja S.A. (merging company) and
Tarjeta Mira S.A. (merged company). Subsequently, on April 26, 2012, the related notice was published in the
Official Gazette. Finally, on April 27, 2012, the final merger agreement and the notice were filed with the
regulatory agency of artificial persons in the Province of Córdoba. As a result, the merger became effective as
from April 1, 2012, which was the date agreed in the merger plan.
(b) Associates
Associates are all the companies over which the Company exercises significant influence, but not control, and
where it usually holds from 20% to 50%. Investments in associates are recorded according to the equity method
and they are initially recognized at cost.
Tarjeta Naranja S.A.’s interest in associates’ income / (loss) is recognized as income / (loss) from investments in
associates in the statement of income. Changes in shareholders’ equity that are not net income / (loss) are
charged to shareholders’ equity reserves (and, if appropriate, they are included in other comprehensive income).
As of December 31, 2012, the Company holds 5% of the ordinary shares of Cobranzas Regionales S.A. The
following factors and circumstances evidence that the Company has significant influence (as defined in IAS 28
“Investments in Associates”) over Cobranzas Regionales S.A. and, therefore, the investment therein is valued by
the equity method in these financial statements:
a) Representation in the management board.
b) Involvement in policy setting processes.
c) Transactions of relative importance between Tarjeta Naranja S.A. and Cobranzas Regionales S.A.
d) Exchange of managerial staff.
19
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – BASIS FOR THE PREPARATION AND ADOPTION OF INTERNATIONAL FINANCIAL
REPORTING STANDARDS (Continued)
2.5 Accounting Policies (Continued)
2.5.1. Basis for Consolidation (Continued)
(b) Associates (Continued)
The following is information about the companies over which Tarjeta Naranja S.A. exercises significant influence
as of December 31, 2012 and December 31, 2011:
Company
Percentage of
Shares and
Voting Rights
Activity
Cobranzas Regionales S.A.
5%
Integral Advisory Services for Credit Risk
Analysis
Tarjeta Naranja Perú S.A.C.
24%
Commercial and Investing Activities
(c) Joint Ventures
IFRS 11 “Joint Ventures” classifies joint arrangements either as joint operations (combining the existing concepts
of jointly controlled assets and jointly controlled operations) or as joint ventures (equal to the existing concept of
jointly controlled entity). Joint operation is the joint arrangement whereby the parties having joint control have
rights to assets and obligations for liabilities. Joint venture is the joint arrangement whereby the parties having
joint control of the arrangement have right to the net assets of the arrangement. IFRS 11 requires the use of the
equity method for joint interests. Such IFRS is mandatorily applicable to the fiscal years beginning January 1,
2013. Early application is permitted. The Company has opted for the early application of IFRS 11 as from the
fiscal year beginning January 1, 2012.
20
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 –
BASIS FOR THE PREPARATION AND ADOPTION OF INTERNATIONAL FINANCIAL
REPORTING STANDARDS (Continued)
2.5 Accounting Policies (Continued)
2.5.1. Basis for Consolidation (Continued)
(c) Joint Ventures (Continued)
The following is information about the company over which joint control was exercised as of December 31, 2011:
Company
Tarjeta Naranja
Dominicana S.A. (TND)
Percentage of
Shares and
Voting Rights
50%
Activity
Credit Card Collection, Issuance and Processing, and
Related Services.
With regard to this joint venture, it is worth noting the Company shared the definition and management of the
operating and financial policies with Banco Múltiple León S.A. (company incorporated under the laws of the
Dominican Republic).
In June 2012, Tarjeta Naranja Dominicana S.A.’s shareholders decided to sell Banco Múltiple León S.A. (holder
of the remaining 50% interest in TND’s capital stock) TND’s right related to customers and to start the liquidation
of the company. The Company has fully set an allowance for its investment in TND and, therefore, the
aforementioned liquidation shall not affect the normal course of the Company’s business.
2.5.2 Segment Reporting
The entity has disclosed the segment reporting, as established by IFRS 8 “Operating Segments”.
An operating segment is that component of the entity whose financial information is separately available and is
regularly used by the General Management in decision-making regarding how to allocate resources and assess
the business performance.
Reportable segments are one or more operating segments with similar characteristics, distribution systems and
regulatory environments.
Operating segments are presented consistently with the internal information furnished to the maximum authority
in decision-making relating to the Company’s operation, which, in the case of Tarjeta Naranja S.A., is the Board
of Directors.
21
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 –
BASIS FOR THE PREPARATION AND ADOPTION OF INTERNATIONAL FINANCIAL
REPORTING STANDARDS (Continued)
2.5.3 Functional and Presentation Currency
The figures included in the financial statements of the different entities that are part of the Company were
measured using their functional currency, i.e., the currency of the primary economic environment where each
Company operates. The financial statements are presented in Argentine Pesos, which is the Company’s
functional and presentation currency. For investments abroad, the currency of each country has been defined as
functional currency since it is the currency of the primary economic environment where those entities operate.
The results of operations and financial position of the affiliated companies and associates that have a functional
currency different from the Company’s presentation currency are translated into the presentation currency, as
follows:
- The assets and liabilities at fiscal year-end are translated at the exchange rate as of that date.
- Revenues and expenses are translated at the average exchange rate (unless such average does not
represent a fair approximation of the cumulative effect of exchange rates effective as of the date of each
transaction, in which case such revenues and expenses are translated at the exchange rate effective as of
the date of each transaction).
- The resulting foreign exchange gains / (losses) are presented in other comprehensive income.
When an investment is sold or disposed of, either fully or partially, foreign exchange gains / (losses) are
recognized in the statement of income as part of the gain / (loss) on sale/disposal.
2.5.4 Foreign Currency Assets and Liabilities
Foreign currency assets and liabilities have been stated at the buying or selling exchange rates, as appropriate,
in force at fiscal year-end.
In preparing the individual entities’ financial statements, the transactions in currencies different from each entity’s
functional currency (foreign currencies) are recorded at the exchange rates effective as of the date of each
transaction. As of each fiscal year-end, monetary items denominated in foreign currency are translated again at
the exchange rates effective as of the closing date of the financial statements. Non-monetary items valued at
their fair values, which are denominated in foreign currency, are translated again at the exchange rates effective
as of the date when fair values were estimated. Non-monetary items, which were valued at historical cost in
foreign currency, are not translated again.
Foreign exchange gains / (losses) are recognized in the line “Expenses from Financing” in the statement of
income during the year when they arose.
22
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 –
BASIS FOR THE PREPARATION AND ADOPTION OF INTERNATIONAL FINANCIAL
REPORTING STANDARDS (Continued)
2.5 Accounting Policies (Continued)
2.5.5 Financial Instruments
Financial instruments, other than derivatives, are defined as any contract that simultaneously gives rise to a
financial asset of one entity and a financial liability or equity instrument of another entity.
IFRS 9 “Financial Instruments” introduces new classification and measurement requirements for financial assets
and liabilities and their derecognition. Such IFRS requires that all financial assets that are included in the scope
of IAS 39 “Financial Instruments: Recognition and Measurement” are subsequently measured at amortized cost
or fair value. Specifically, debt investments that are held within a business model, whose objective is to collect
contractual cash flows, and that have contractual cash flows that are solely payments of principal or interest on
the principal amount outstanding, are usually measured at amortized cost at later accounting year-ends. All the
other debt or equity investments are measured at fair values at later accounting year-ends.
Such IFRS 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 if the contractual terms entitle
collection of cash flows on specified dates that are principal and interest.
In this category, the Company has classified the following financial assets: receivables from services,
investments in time deposits, investments in notes (“obligaciones negociables”), investments in government
securities and other receivables.
(b) Financial Assets at Fair Value
If both conditions referred to in the preceding point are not met, the asset is classified in the category “Fair
Value”.
In this category, the Company has classified the following financial assets: Cash and cash equivalents (except
for investments in time deposits), and interests in companies on which it has no control, joint control or significant
influence, and balances under hedging transactions.
23
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 –
BASIS FOR THE PREPARATION AND ADOPTION OF INTERNATIONAL FINANCIAL
REPORTING STANDARDS (Continued)
2.5 Accounting Policies (Continued)
2.5.6 Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, time deposits in financial institutions and other highly-liquid
short-term investments with an original maturity of three months or less, and with a not very significant risk of
changes in their value.
The placements of funds in time deposits were valued at the estimated cash price upon the transaction, plus
interest and financial components accrued based on the effective rate calculated at that time.
Investments in mutual funds were measured at fair value. Changes in fair value are accounted for in the
statement of income.
2.5.7 Investments
The placements of funds in notes (“obligaciones negociables”) and government securities were valued at the
estimated cash price upon the transaction, plus interest and financial components accrued based on the
effective rate calculated at that time.
Investments in mutual funds that do not qualify as cash equivalents were measured at fair value. Changes in fair
value are accounted for in the statement of income.
2.5.8 Receivables from Services and Other Receivables
Receivables from services include the amounts payable by customers, both for credit-card consumption and
loans granted.
Receivables from services have been initially recognized at market value and have been subsequently valued at
amortized cost using the effective interest rate method. They are disclosed net of the allowance for credit losses,
if applicable, calculated according to the guidelines set out in Note 2.5.9 below.
2.5.9 Impairment of Financial Assets – Allowance for Credit Losses
At each fiscal year-end, the Company analyzes whether there is objective evidence that a financial asset or
group of financial assets is impaired. The loss on impairment of financial assets is recognized when there is
objective evidence of impairment as a result of one or more events occurred after the initial recognition of the
financial asset and such event has impact on estimated cash flows for such financial asset or group of financial
assets.
Under IFRS, for the calculation of the allowance for credit losses, the Company analyzes the historical losses of
its portfolio in order to estimate the losses related to receivables from services incurred as of the date of the
financial statements, but that have not been individually identified, according to the guidelines set out in IAS 39.
24
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 –
BASIS FOR THE PREPARATION AND ADOPTION OF INTERNATIONAL FINANCIAL
REPORTING STANDARDS (Continued)
2.5 Accounting Policies (Continued)
2.5.9 Impairment of Financial Assets – Allowance for Credit Losses (Continued)
In addition, the historical ratios are adjusted, if appropriate, to include recent information that reflects the
economic conditions as of the closing date of the financial statements, trends of behavior in the industry,
geographic or customer concentrations in each portfolio segment and any other information that could affect the
estimation of the allowance for credit losses related to receivables from services. Several factors may affect
Management’s estimation of the allowance for credit losses, including the volatility of the likelihood of loss,
migrations and estimates of the severity of losses.
The book value of the asset is reduced through the account “Allowance for Credit Losses” and the amount of
loss or recovery, as the case may be, is recognized in the statement of income.
2.5.10 Derivatives
Differences originated from the application of the measurement criteria detailed in Note 36, corresponding to
derivatives considered hedge instruments effective to cover cash flow risks, have been recognized in the
statement of income, taking into consideration such items affect net income for the fiscal year.
Derivatives are foreign currency hedge contracts to cover its cash flows exposure arising from Class XIII and
Class XVI, Series I (amortized at fiscal year-end) and II, Notes (“Obligaciones Negociables”). See also Note 4.c
– Market Risk – Exchange Rate-associated Risks.
2.5.11 Income Tax
Income tax is recognized in these financial statements according to the deferred tax method, thus recognizing
the effect of the temporary differences between accounting and tax measurements of assets and liabilities. The
main temporary differences stem from the allowance for credit losses, the provision for contingencies and, to a
lesser extent, the differences with regard to the charge for depreciation of Property, Plant and Equipment.
For purposes of determining the deferred assets and liabilities, the 35% tax rate that is expected to be in force at
the moment of their reversal has been applied to the temporary differences identified, under the legal regulations
enacted at the date of these financial statements. They are recognized in the statement of financial position as
long as it is deemed likely that the Company will have enough future taxable income against which deferred
income tax assets may be applied.
The breakdown and changes of deferred income tax assets and liabilities are explained in detail in Note 18.
25
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – BASIS FOR THE PREPARATION AND ADOPTION OF INTERNATIONAL FINANCIAL
REPORTING STANDARDS (Continued)
2.5 Accounting Policies (Continued)
2.5.12 Property, Plant and Equipment
Property, Plant and Equipment are recorded at historical cost, net of depreciation and impairment losses, if
applicable. The historical cost includes the expenses that are directly attributable to the acquisition of assets.
The costs of adapting and improving stores are capitalized as Property, Plant and Equipment only when
investments improve the conditions of the asset, irrespective of those originally established.
The costs subsequently incurred are included in the values of the asset only provided that it is likely for the asset
to generate future economic benefits and their cost is reliably measured. The value of replaced parts is written
off. The other maintenance and repair costs are charged to income during the fiscal year when they are incurred.
Depreciation charges have been calculated following the straight-line method based on the estimated useful life
of the assets, applying annual rates enough so as to write off their values at the end of their estimated useful life,
according to the following parameters.
Group of Assets
Years of Estimated Useful Life
Real Property
Cost of Adapting Stores
Furniture and Fixtures
Hardware
Facilities and Improvements
50
Term of Lease Agreement
10
5
10
The residual value of assets is reviewed and adjusted, if necessary, as of each fiscal year-end. Changes in the
criteria originally established are recognized, as the case may be, as a change of estimate.
The value of assets is impaired at their recoverable value if the accounting residual value exceeds their
estimated recoverable value, when they are reviewed for impairment when events or circumstances that indicate
that their book value may not be recovered have arisen.
2.5.13 Intangible Assets
Intangible assets are those non-monetary assets, without physical substance, that are identifiable either because
of being separable or because of deriving from legal or contractual rights. They are recorded when they may be
reliably measured and it is likely for them to generate benefits for the Company.
26
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 –
BASIS FOR THE PREPARATION AND ADOPTION OF INTERNATIONAL FINANCIAL
REPORTING STANDARDS (Continued)
2.5 Accounting Policies (Continued)
2.5.13 Intangible Assets (Continued)
(a) Patents and Software
Patents and software are initially recognized at cost as of the acquisition date. Patents and software that have a
definite useful life are recorded at cost, less the accumulated amortization. Amortization is calculated by the
straight-line method to adjust the cost to their estimated useful lives, which do not exceed five years.
(b) Other Intangible Assets
Other intangible assets amount to AR$ 5,027 as of December 31, 2011. As of December 31, 2012, the amount
of AR$ 5,027 remains unchanged. Such item is related to the acquisition of a business unit, which includes the
publication, sale and distribution of the magazine Convivimos. Such assets are not amortized because they have
an indefinite useful life. In addition, their possibility of generating future income is periodically examined in order
to analyze their possible impairment.
2.5.14 Accounts Payable
Accounts payable represent the obligations to pay stores and for goods and services acquired from suppliers in
the normal course of business. They are disclosed in current liabilities if their payment falls due in a term shorter
than or equal to one year.
They are initially recognized at fair value and subsequently measured at amortized cost using the effective
interest rate method.
2.5.15 Bank and Financial Loans and Other Liabilities
Bank and financial loans are initially recognized at fair value, net of the costs directly attributable to obtaining
them. They are subsequently valued at amortized cost using the effective interest rate method.
2.5.16 Leases
Leases are classified as financial when all the risks and benefits associated with the ownership of the asset are
substantially transferred. All the other ones are considered to be operating leases.
The assets acquired through a financial lease are recorded as non-current assets and are originally measured at
the lower of the present value of the minimum future payments or fair value. The related payable to the lessor is
reflected in liabilities. The financial cost is accrued based on the effective rate and is included in “Financial
Costs”.
Financial lease agreements are explained in detail in Note 34 to these financial statements.
27
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 –
BASIS FOR THE PREPARATION AND ADOPTION OF INTERNATIONAL FINANCIAL
REPORTING STANDARDS (Continued)
2.5 Accounting Policies (Continued)
2.5.17 Provisions
Provisions have been made as set out in IAS 37 to cover possible contingencies of a labor, commercial, civil or
tax nature and for miscellaneous risks that could lead to obligations for the Company. When estimating their
amounts and the possibility of occurrence, the opinion of the Company’s advisors and the insurance policies
purchased by the Company have been taken into consideration.
At the date of these financial statements, the Company's Management believes there are no elements that make
it possible to determine there may be other contingencies that could occur and thus generate a negative impact
on the economic and financial position of the Company.
The breakdown and changes of provisions are disclosed in Note 32.
2.5.18 Capital Stock
The capital stock is represented by non-endorsable registered ordinary shares, with a face value of AR$ 10,000
per share.
CAPITAL STATUS
Shares
Number
Voting Rights per
Share
Type
2,400 Ordinary shares with a face value of AR$ 10,000
2,400
1
Subscribed
Paid-in
In Thousands of AR$
24,000
24,000
24,000
24,000
2.5.19 Revenue Recognition
(a) Revenues from Services
Account Statement Issuance Fee
Revenues related to the account statement are recognized in the month of its issuance.
Fees
Fee revenues are recognized upon the customer’s purchase.
Revenues from Third-Party Portfolio Managed
Commissions earned on the third-party portfolio managed are recognized when the service is provided.
28
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 –
BASIS FOR THE PREPARATION AND ADOPTION OF INTERNATIONAL FINANCIAL
REPORTING STANDARDS (Continued)
2.5.19 Revenue Recognition (Continued)
(a) Revenues from Services (Continued)
Revenues from Convivimos Magazine
Revenues from Convivimos Magazine are recognized upon being accrued (billing to the customer), when all the
necessary costs to obtain the respective revenue are also incurred.
Revenues from Marketing
Revenues from marketing different products are recognized when the service is provided.
Card Renewal Fees
Revenues from card renewals are recognized upon billing to the customer, when all the necessary costs to
obtain the respective revenue are also incurred.
Granting Fees
Granting fees are recognized by the effective rate method applied to the respective loan.
Other Revenues from Services
The other revenues from services are recognized in the fiscal year when the service was provided.
(b) Revenues from Financing
Interest earned is recorded based on the accrual period, by applying the effective rate method.
2.5.20 Statement of Cash Flows
The Company has chosen to prepare the statement of cash flows by the indirect method and considers cash on
hand, time deposits in financial institutions, highly-liquid short-term investments and with a not very significant
risk of changes in their value, and bank overdrafts with an original maturity of three months or less to be cash.
Overdrafts, if any, are classified as “Bank and Financial Loans” in current liabilities in the Statement of Financial
Position.
29
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 –
BASIS FOR THE PREPARATION AND ADOPTION OF INTERNATIONAL FINANCIAL
REPORTING STANDARDS (Continued)
2.6 Changes in Accounting Policies and Breakdowns
(a) New and Amended Standards Adopted by the Company.
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 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 12 “Disclosure of Interests in Other Entities”: It includes the disclosure requirements for all types of
interests in other entities, including joint arrangements, associates, special purpose entities and other offbalance sheet entities. The Company still has to assess the full effect of IFRS 12 and intends to adopt IFRS 12
no later than the accounting year beginning on or after January 1, 2013.
IFRS 13 “Fair Value Measurement”: It 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 US GAAP, do not extend the use of fair
value accounting, but provide guidance on how it should be applied when its use is already required or permitted
by other IFRS or US GAAP. The Company still has to assess the full effect of IFRS 13 and intends to adopt
IFRS 13 no later than the accounting year beginning on or after January 1, 2013.
IFRS 7 / IAS 32: The IASB has issued an amendment to IAS 32 “Financial Instruments: Presentation” to clarify
some requirements for offsetting financial assets and financial liabilities in the statement of financial position, as
well as an amendment to IFRS 7 “Financial Instruments: Disclosures”. The amendments do not change the
current offsetting model set out in IAS 32, but clarify that the right of set-off shall be available today, i.e., it is not
dependent on a future event. It shall also be legally enforceable for all counterparties in the normal course of
business, as well as in the event of default, insolvency or bankruptcy. The amendments also clarify that the
gross settlement mechanisms (for example, through a clearing house), with features that both (i) eliminate credit
and liquidity risk and (ii) process receivables and account payables in a single settlement process, are effectively
equivalent to net settlement; they would, therefore, satisfy the IAS 32 criterion in these instances. Master netting
agreements where the legal right of offset is only enforceable on the occurrence of some future event, such as
default of the counterparty, continue to not meet the offsetting requirements. The amended disclosures will
require more extensive disclosures than are currently required under IFRS. The converged offsetting disclosures
in IFRS 7 are to be subsequently applied, with an effective date of fiscal years beginning on or after January 1,
2013.
30
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 –
BASIS FOR THE PREPARATION AND ADOPTION OF INTERNATIONAL FINANCIAL
REPORTING STANDARDS (Continued)
2.6 Changes in Accounting Policies and Breakdowns (Continued)
IAS 1 “Presentation of Financial Statements”: It clarifies that entities are required to present an analysis of
other comprehensive income for each of the equity components, either in the Statement of Changes in
Shareholders’ Equity or in Notes to the Financial Statements. This amendment becomes effective for fiscal years
beginning on or after July 1, 2012.
There are no other IFRS or IFRIC interpretations that are not yet effective and that are expected to have a
material effect on the Company.
NOTE 3 – FINANCIAL RISK MANAGEMENT
The Company’s activities expose it to several financial risks: market risk (including the exchange rate risk and
the fair value interest rate risk), credit risk and liquidity risk.
There were no changes in the risk department from the last closing or in risk management policies.
Information relating to December 31, 2012 and 2011 is disclosed in Note 4 below.
NOTE 4 – ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012
AND 2011
4.1 Financial Risk Management
4.1.1 Financial Risk Factors
The nature of the Company's operations and the characteristics of its customer base expose it to several risks,
primarily related to market risks (including the effects of changes in exchange rates and interest rates) 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. For each exposure deriving from
the variation in exchange rates, the Company may perform diverse transactions with derivatives in order to
manage potential adverse impacts on the Company's financial performance. Such transactions are carried out
according to internal policies and defined hedging practices.
31
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012
AND 2011 (Continued)
4.1 Financial Risk Management (Continued)
4.1.1 Financial Risk Factors (Continued)
(a) Credit Risk
The credit risk arises from certain liquid assets, deposits with banks and financial institutions, as well as
customer credit exposures, including other remaining loans and committed transactions.
As regards the credit risk management related to cash, cash equivalents and deposits with banks and financial
institutions, the Company has an investment and credit assessment policy from the financial institution.
According to such policy, the entities in which it may invest are determined based on its credit rating and the
amount allocated to each of them should correspond with the financial institution’s and Tarjeta Naranja’s
shareholders' equity. The maximum percentage to be invested in an entity is also set considering the total
investments.
In addition, in connection with the risk associated with its customers' credit positions, the Company actively
monitors the credit reliability of its customers in order to mitigate the credit risk.
In order to manage and control the credit risk for the customer portfolio, the Company implemented a credit and
credit assessment policy for each customer so as to provide the following guidelines in this regard, with the main
features:

Use tools to analyze and assess the risk that best suits the customer's profile.

Establish guidelines to grant cards and loans based on the customer’s solvency.

Grant credit limits to each customer based on the assessment of each customer’s particular situation,
generally without requiring guarantees and taking into account the customer's monthly income, among
other aspects.

Credit atomization.

Geographic diversity.

Seventy per cent of card holders have a total credit lower than AR$ 15.

Monitor customers’ degree of compliance on an ongoing basis.
In this respect, five different credit limits have been defined in Tarjeta Naranja S.A.: (i) the Monthly Balance Limit,
which is set based on the applicant's net income and which is the maximum amount in the aggregate for a
customer’s monthly installments; (ii) the Long-term Purchase Limit, which is the maximum amount for the
customer to purchase in 6 or more installments; (iii) Total Indebtedness Limit, which is equivalent to the
aggregation of the Long-term Purchase Limit and three times the Monthly Balance Limit (“Total Indebtedness
Limit”):
32
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012
AND 2011 (Continued)
4.1 Financial Risk Management (Continued)
4.1.1 Financial Risk Factors (Continued)
(a) Credit Risk (Continued)
which is the maximum amount that may be owed to Tarjeta Naranja S.A. by customers for any and all amounts
owed; and (iv) the Maximum Balance Limit for Cash Advances, which represents 50% of the long-term purchase
limit, for a maximum amount of AR$ 2.5 ("Maximum Balance Limit for Cash Advances"), which is the maximum
amount for cash withdrawals; (v) the Limit for loans to be repaid up to 18 months.
Furthermore, Tarjeta Naranja S.A. has a strong policy to address customers’ payment in arrears, as follows:
A)
At an early arrears stage, i.e., shorter than 90 days, the debtor has a series of products, each of which is
designed for a specific instance of arrears that allows the debtor to redress the situation of temporary
arrears in order to settle payables to the Company.
To qualify for the products, the customer always has to pay the first installment of the plan or deliver at
least 7% of the debt outstanding.
B)
At a late arrears stage, i.e., as from 90 days, the account is closed, all the terms granted are cancelled
and the outstanding amount is automatically assigned to a law firm for collection.
This term is restricted to 60 days for those customers that have a financing product with such a level of
arrears in payment.
The risk of default under a loan may vary in each customer’s particular case, depending —among other factors—
on each customer’s own economic situation. The Company assesses the uncollectibility risk and sets
allowances, which are calculated based on the criterion described under caption 2.5.9 in note 2 to these financial
statements, and such allowances are deemed adequate for the recognition of possible losses arising from credit
losses.
Due to the nature of this activity, there is no risk of credit risk concentration in this group of debtors, since credit
cards are given to a large number of customers, being none of them significant, who carry out a very wide range
of activities.
In this sense and taking into account the foregoing, the Company has approved the following credit card limits for
customers as of December 31, 2012 and 2011:
12.31.2012
12.31.2011
In Thousands of AR$
3,799,873
2,480,336
20,237,699
12,915,525
29,130,488
18,768,025
Monthly Balance Limit
Long-term Purchase Limit
Total Indebtedness Limit
33
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012
AND 2011 (Continued)
4.1 Financial Risk Management (Continued)
4.1.1 Financial Risk Factors (Continued)
(a) Credit Risk (Continued)
Maximum Exposure to Credit Risk:
The following table shows the maximum gross exposure to credit risk, disregarding guarantees or other credit
improvements:
12.31.2012
12.31.2011
In Thousands of AR$
Receivables from Services
6,795,993
5,071,940
For the assets recorded in the financial statements, the exposures established are based on the net book
amounts of the respective allowance for credit losses, as disclosed in the statement of financial position.
Receivables from Services neither Due nor Impaired:
Loans that are neither due nor impaired are those in arrears for less than 30 days. However, a minimum
technical allowance is set therefor. The amount outstanding of such receivables from services as of December
31, 2012 and 2011 is as follows:
12.31.2012
12.31.2011
In Thousands of AR$
Receivables from Services (A)
3,760,387
34
3,057,778
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012
AND 2011 (Continued)
4.1 Financial Risk Management (Continued)
4.1.1 Financial Risk Factors (Continued)
(a)Credit Risk (Continued)
Receivables from Services Not Due and Impaired:
Loans that are not due and impaired are those in arrears for less than 30 days and that, due to their
segmentation characteristics, have been included in the allowance for credit losses. The amount outstanding of
such receivables from services is as follows:
12.31.2012
12.31.2011
In Thousands of AR$
Receivables from Services (B)
2,251,441
1,501,117
Receivables from Services Due and Impaired:
Loans that are due and impaired are those in arrears for more than 30 days and that, due to their segmentation
characteristics, have been included in the allowance for credit losses. The amount outstanding of such
receivables from services is as follows:
12.31.2012
12.31.2011
In Thousands of AR$
Receivables from Services (C)
784,165
12.31.2012
513,045
12.31.2011
In Thousands of AR$
Receivables from Services Addition of (A) + (B) + (C) (Note
22)
35
6,795,993
5,071,940
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012
AND 2011 (Continued)
4.1 Financial Risk Management (Continued)
4.1.1 Financial Risk Factors (Continued)
(a)Credit Risk (Continued)
In relation to the impairment of receivables from services, due to the nature of the Company’s activities and
customer portfolio, no financial assets that have been determined to be individually impaired are recorded.
(b) Liquidity Risk
The Company has a liquidity policy that is monitored through annual, monthly and daily cash estimates,
analyzing the needs and/or surpluses generated, evaluating the availability of cash and the available financing
alternatives. Projected cash inflows and outflows for the next months are weekly analyzed and decisions focused
on obtaining optimum credit lines are made in order to attain the goals set.
Also, the credit lines borrowed are reinforced by executing commitment agreements that allow having cash
immediately, both in normal financial context and in market liquidity contraction situations.
With respect to the breakdown of Bank and Financial Loans, which includes bank loans and notes (“obligaciones
negociables”) publicly offered, regarding the short- and long-term allocation, provided that the market allows it,
the Company’s aim is to keep a balanced allocation of debt due dates, giving priority to long-term debt.
The table below breaks down financial liabilities by contractual due date considering the amounts accrued as of
December 31, 2012:
Less than
3 Months
From 3
to 12
Months
December 31, 2012
In Thousands of AR$
From 1
From 2
to 2
to 5
Years
Years
Over 5
Years
Total
Financial Liabilities
Accounts Payable
Bank and Financial Loans
Total Financial Liabilities
3,411,956
143,556
-
-
-
3,555,512
210,906
771,543
310,910
987,552
41,591
2,322,502
3,622,862
915,099
310,910
987,552
41,591
5,878,014
36
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012
AND 2011 (Continued)
4.1. Financial Risk Management (Continued)
4.1.1 Financial Risk Factors (Continued)
(b) Liquidity Risk (Continued)
The table below breaks down financial liabilities by contractual due date considering the amounts accrued as of
December 31, 2011:
Less than
3 Months
From 3
to 12
Months
December 31, 2011
In Thousands of AR$
From 1
From 2
to 2
to 5
Years
Years
Over 5
Years
Total
Financial Liabilities
Accounts Payable
Bank and Financial Loans
Total Financial Liabilities
2,588,185
107,073
-
-
-
2,695,258
196,704
416,684
145,388
573,530
292,645
1,624,951
2,784,889
523,757
145,388
573,530
292,645
4,320,209
(c) Market Risk
Exchange Rate-associated Risks
The Company’s operations are potentially exposed to foreign currency exchange rate fluctuations mainly due to
amounts outstanding of notes (“obligaciones negociables”) denominated in U.S. dollars. As the Company’s
policy is based on mitigating the exchange rate risk related to its business and operations, a series of hedging
transactions were performed with respect to the foreign currency-denominated debt in order to hedge the
exchange rate risk to which they would be otherwise exposed.
Derivatives are foreign currency hedge contracts executed by the Company to cover its cash flows exposure
arising from Class XIII, Class XVI Series I (amortized at fiscal year-end) and Class XVI Series II Notes
(“Obligaciones Negociables”). Note 36 lists the effective contracts as of December 31, 2012 and 2011.
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.
37
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012
AND 2011 (Continued)
4.1 Financial Risk Management (Continued)
4.1.1 Financial Risk Factors (Continued)
(c) Market Risk (Continued)
Derivative instruments are initially recognized at fair value at the beginning date of the contract and are
subsequently measured at fair value, charged to income / (loss).
As of December 31, 2012, the Company had recorded at present values AR$ 1,631 (disclosed in “Bank and
Financial Loans”) in current liabilities and AR$ 958 (disclosed in “Other Receivables”) in current assets, with a
contra account amounting to AR$ 4,817 in “Expenses from Financing” to reflect changes in the accounting
measurement accrued to date.
As of December 31, 2011, the Company had recorded AR$ 17,384 at present values in liabilities, which was
disclosed in the line “Bank and Financial Loans” in current liabilities, with a contra account amounting to AR$
25,108 in “Expenses from Financing” to reflect changes in the accounting measurement accrued to date.
The variation in the U.S. Dollar exchange rate during fiscal year 2012 was a 14% increase both in the selling and
buying exchange rates. The change related to the bank and financial loan undertaken by the Company was
reflected in income / (loss), in the amount of AR$ 142,135.
In addition, the Company has cash and investments in foreign currency, the change of which resulted in a
foreign exchange gain during fiscal year 2012, which was reflected in income, in the amount of AR$ 5,406.
The following table shows the sensitivity towards a possible 19% change p.a. both in the buying and selling U.S.
Dollar exchange rates.
Estimated Sensitivity (In Thousands of AR$)
Increase / (Decrease) in Net
Variation in the
Income (Loss
Exchange Rate
(%)
Exchange rate Hedge
Effect on Net
Income
Peso Devaluation with respect to the
Foreign Currency
19%
(126,273)
126,273
-
Peso Revaluation with respect to the
Foreign Currency
(19%)
126,273
(126,273)
-
If the U.S. dollar increased by a 19% p.a., the annual net loss would amount to AR$ 126,273 as a result of a
higher expense for foreign exchange losses. Otherwise, if the U.S. Dollar decreased by such percentage, the
effect on net income would be income for the same amount. Such income / (loss) would be absorbed by
effective hedge contracts as of that date.
38
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012
AND 2011 (Continued)
4.1 Financial Risk Management (Continued)
4.1.1Financial Risk Factors (Continued)
(c) Market Risk (Continued)
The variation in the U.S. dollar exchange rate during fiscal year 2011 was an 8% increase both in the selling and
buying exchange rates. The change related to the bank and financial loans undertaken by the Company was
reflected in income / (loss), in the amount of AR$ 79,998.
In addition, the most significant assets in foreign currency were held in cash to meet obligations in U.S. dollars.
The change therein resulted in a foreign exchange gain during fiscal year 2011, which was reflected in income in
the amount of AR$ 14,382.
The following table shows the sensitivity towards a possible 8% change p.a. both in the buying and selling U.S.
Dollar exchange rates, which was estimated for the fiscal year 2012:
Estimated Sensitivity (In Thousands of AR$)
Increase / (Decrease) in Net
Variation in the
Income (Loss
Exchange Rate
(%)
Exchange rate Hedge
Effect on Net
Income
Peso Devaluation with respect to the
Foreign Currency
8%
(43,859)
43,859
-
Peso Revaluation with respect to the
Foreign Currency
(8%)
43,859
(43,859)
-
If the U.S. dollar had increased by 8% p.a., the annual net loss would have amounted to AR$ 43,859 as a result
of a higher expense for foreign exchange losses. Otherwise, if the U.S. dollar had decreased by such
percentage, the effect on net income would have been income for the same amount. Such income / (loss) would
have been absorbed by effective hedge contracts.
Interest Rate-associated Risks
The Company is exposed to interest rate risks due to financings obtained through the issuance of notes
(“obligaciones negociables”) and borrowing of financial leases and loans at variable rate. In all cases, the
applicable rate is private Badlar (the interest rate for time deposits amounting to over AR$ 1,000,000, with a
30/35-day term in private banks, published by the Argentine Central Bank on its web page (www.bcra.gov.ar)).
39
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012
AND 2011 (Continued)
4.1. Financial Risk Management (Continued)
4.1.1Financial Risk Factors (Continued)
(c) Market Risk (Continued)
As of December 31, 2012 and 2011, the average Badlar was 13.84% and 13.35%, respectively. A charge to
loss, net of taxes, was generated in the amount of AR$ 89,191 and AR$ 26,312 for 2012 and 2011, respectively.
The following table summarizes the percentage of principal of bank and financial loans at the effective variable
and fixed interest rates as of December 31, 2012 and 2011:
As of December 31, 2012
Amount (in Thousands of
Percentage
AR$)
Fixed Interest
Rate
Variable Interest
Rate
As of December 31, 2011
Amount (in Thousands of
Percentage
AR$)
1,286,631
57%
1,211,005
77%
987,488
2,274,119
43%
359,112
1,570,117
23%
The Company’s financing strategy is to manage the interest expense using a combination of fixed and variable
interest rates.
The following table shows the sensitivity towards a possible additional variation in interest rates for next year,
considering the debt breakdown as of December 31, 2012:
Increase /
(Decrease) in
Income (Loss)
In Thousands of
AR$
Additional
Variation in
Interest Rate
Decrease in Interest Rate
Increase in Interest Rate
4%
4%
19,457
(19,457)
Increase /
(Decrease) in
Shareholders’
Equity
In Thousands of
AR$
19,457
(19,457)
If the applicable rate to the obligations assumed at variable rate increased by 400 basis points, the annual
additional loss would be AR$ 19,457 as a result of a higher interest expense. Otherwise, if the rate decreased by
such percentage, additional income would be for the same amount.
40
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012
AND 2011 (Continued)
4.1. Financial Risk Management (Continued)
4.1.1Financial Risk Factors (Continued)
(c) Market Risk (Continued)
The following table shows the sensitivity for fiscal year 2012 estimated as of December 31, 2011 towards a
possible additional variation in interest rates, considering the debt breakdown as of that date:
Increase /
(Decrease) in
Income (Loss)
In Thousands of
AR$
Additional
Variation in
Interest Rate
Decrease in Interest Rate
Increase in Interest Rate
5%
5%
Increase /
(Decrease) in
Shareholders’
Equity
In Thousands of
AR$
6,006
(6,006)
6,006
(6,006)
If the applicable rate to the obligations assumed at variable rate would have increased by 500 basis points, the
annual additional loss would have been AR$ 6,006 as a result of a higher interest expense. Otherwise, if the rate
had decreased by such percentage, additional income would have been for the same amount.
4.1.2 Capital Management
The Company seeks to keep an adequate indebtedness level as it should meet certain commitments assumed
by virtue of loans obtained and notes (“obligaciones negociables”) issued and to continue as a going concern.
The indebtedness ratio as of December 31, 2012 and 2011 is as follows:
December 31, 2012
December 31, 2011
Total Debt
Minus: Cash and Cash Equivalents
Net Debt
In Thousands of AR$
6,211,081
(413,798)
5,797,283
4,606,250
(438,189)
4,168,061
Total Shareholders’ Equity
1,559,176
1,225,935
Total Capital
7,356,459
5,393,996
3.72
3.4
Indebtedness Ratio
41
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012
AND 2011 (Continued)
4.1. Financial Risk Management (Continued)
4.1.2.Capital Management (Continued)
As of December 31, 2012 and 2011, capital status was as follows:
Approved by
Capital Stock
Face Value
Body
Date of
Registration with
the Public
Registry of
Commerce
Date
In Thousands of
AR$
Subscribed, Issued and Paid in
Capital Increase due to Merger with Tarjetas
del Sur S.A.
Capital Increase due to Merger with Tarjeta
Comfiar S.A.
Total
Extraordinary
12,000 Shareholders' Meeting
Extraordinary
6,600 Shareholders' Meeting
Extraordinary
5,400 Shareholders' Meeting
24,000
09.04.95
12.12.95
02.16.01
05.03.01
10.02.03
03.24.04
Furthermore, the following is presented in compliance with Resolution No. 368 of the C.N.V.:
2010
Capital Stock at the Beginning of the Fiscal Year
Total
24,000
24,000
2011
24,000
24,000
2012
24,000
24,000
4.1.3 Fair Value Estimation
The table below includes the analysis of financial instruments that are measured at fair value, classified by
hierarchy, according to the measurement method used. The different levels have been defined as follows:
a)
Level 1: (Unadjusted) quoted prices in active markets for identical assets and liabilities.
b)
Level 2: Inputs other than quoted market prices included within Level 1 that are observable for the
asset or liability, either directly (i.e., prices) or indirectly (i.e., price derivatives).
c)
Level 3: Inputs are unobservable inputs for the asset or liability (i.e., unobservable inputs).
42
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012
AND 2011 (Continued)
4.1. Financial Risk Management (Continued)
4.1.3.Fair Value Estimation (Continued)
The following table discloses the Company’s assets and liabilities, which are measured at fair value as of
December 31, 2012 and 2011:
As of December 31, 2012
In Thousands of AR$
Level 1
Level 2
Total
Amount
Level 3
Financial Assets
Cash and Cash Equivalents
Investments in Associates, Joint Ventures and
Other Companies
Balances under Hedging Transactions
266,502
-
-
266,502
958
267,460
-
2,941
958
-
2,941
2,941
270,401
Balances under Hedging Transactions
1,631
-
-
1,631
Total Financial Liabilities
1,631
-
-
1,631
Total Financial Assets
Financial Liabilities
As of December 31, 2011
In Thousands of AR$
Level 1
Level 2
Total
Amount
Level 3
Financial Assets
Cash and Cash Equivalents
Total Financial Assets
185,888
185,888
-
-
185,888
185,888
Balances under Hedging Transactions
17,384
-
-
17,384
Total Financial Liabilities
17,384
-
-
17,384
Financial Liabilities
The fair value of financial instruments traded in active markets is based on quoted prices as of the reporting
date. A market is considered to be active if quoted prices are readily and regularly available from an exchange,
dealer, broker, industry group, pricing service or regulatory agency, and those prices represent actual and
regularly occurring market transactions on an arm’s length basis. The market quoted price used for financial
assets held by the entity is the current offer price. These instruments are included in Level 1 and include cash
and cash equivalents.
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.
43
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012
AND 2011 (Continued)
4.1. Financial Risk Management (Continued)
4.1.3.Fair Value Estimation (Continued)
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
Receivables from Services
Cash and Cash Equivalents
Investments
Investments in Associates, Joint
Ventures and Other Companies
Balances under Hedging Transactions
6,795,993
413,798
52,621
6,695,286
413,798
52,621
2,941
958
2,941
958
Total Financial Assets
7,266,311
7,165,604
Financial Liabilities
Balances under Hedging Transactions
Bank and Financial Loans
Accounts Payable
1,631
2,320,871
3,555,512
1,631
2,320,871
3,521,813
Total Financial Liabilities
5,878,014
5,844,315
44
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012
AND 2011 (Continued)
4.1. Financial Risk Management (Continued)
4.1.3. Fair Value Estimation (Continued)
December 31, 2011
In Thousands of AR$
Book Value
Fair Value
Financial Assets
Receivables from Services
Cash and Cash Equivalents
Total Financial Assets
5,071,940
438,189
5,510,129
5,007,037
438,189
5,445,226
Financial Liabilities
Balances under Hedging Transactions
Bank and Financial Loans
Accounts Payable
17,384
1,607,567
2,695,258
17,384
1,607,567
2,685,938
Total Financial Liabilities
4,320,209
4,310,889
45
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012
AND 2011 (Continued)
4.1. Financial Risk Management (Continued)
4.1.4. Financial Instruments by Category
The following are the amounts of financial assets and liabilities classified by category, as set out in IFRS 9 as of
December 31, 2012 and 2011:
Assets / Liabilities Measured at Fair Value
December 31, 2011
In Thousands of AR$
Financial Assets
Cash and Cash Equivalents
Receivables from Services
Investments
Investments in Associates, Joint
Ventures and Other Companies
Balances under Hedging
Transactions
Other Receivables
Total Financial Assets
Financial Liabilities
Accounts Payable
Balances under Hedging
Transactions
Bank and Financial Loans
Total Financial Liabilities
Assets /
Liabilities at
Fair Value
Held for
Intermediation
Assets /
Liabilities at
Amortized
Cost
Derivatives
Total
Amount
124,628
2,547
141,874
-
-
147,296
6,795,993
50,074
413,798
6,795,993
52,621
2,941
-
-
-
2,941
130,116
141,874
958
958
109,225
7,102,588
958
109,225
7,375,536
-
-
-
3,555,512
3,555,512
-
-
1,631
1,631
2,320,871
5,876,383
1,631
2,320,871
46
5,878,014
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012
AND 2011 (Continued)
4.1. Financial Risk Management (Continued)
4.1.4. Financial Instruments by Category (Continued)
Assets / Liabilities Measured at Fair Value
December 31, 2011
In Thousands of AR$
Assets /
Liabilities at
Fair Value
Held for
Intermediation
Assets /
Liabilities at
Amortized
Cost
Derivatives
Total
Amount
Financial Assets
135,866
50,022
-
252,301
438,189
Receivables from Services
-
-
-
5,071,940
5,071,940
Other Receivables
-
-
-
66,035
66,035
135,866
50,022
-
5,390,276
5,576,164
Accounts Payable
Balances under Hedging
Transactions
-
-
-
2,695,258
2,695,258
-
-
17,384
-
17,384
Bank and Financial Loans
-
-
-
1,607,567
1,607,567
Total Financial Liabilities
-
-
17,384
4,302,825
4,320,209
Cash and Cash Equivalents
Total Financial Assets
Financial Liabilities
4.1.5 Accounting Estimates and Judgments
Estimates and judgments are continuously assessed and are based on past experience and other factors,
including expectations of future events that are deemed reasonable under the circumstances.
4.1.6 Significant Accounting Estimates and Judgments
The Company makes estimates and assumptions on the future. The resulting accounting estimates, by
definition, will be rarely equal to the related actual figures. The estimates and judgments that have a significant
risk of giving rise to a material adjustment to the book amounts of assets and liabilities in the following fiscal year
are explained below.
47
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 4 – ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012
AND 2011 (Continued)
4.1. Financial Risk Management (Continued)
4.1.6. Significant Accounting Estimates and Judgments (Continued)
(a) Estimated Loss for Impairment of Financial Assets Recorded at Amortized Cost
The Company follows the guidance in IAS 39 to calculate the allowance for credit losses related to its portfolio of
receivables from services and other receivables. For this estimation, the Company evaluates the customers’
historical patterns of behavior, among other factors, as well as the existing macroeconomic conditions at fiscal
year-end, as explained in detail in Note 2.5.9.
(b) Income Tax
The Company is subject to income tax. As explained in detail in Note 2.5.11, income tax is recognized in these
financial statements by applying the deferred income tax method, thus recognizing the assets and liabilities
related to the temporary differences identified in calculating taxable income. Such differences will have an effect
on income tax and the provisions for deferred income taxes in the year when they are made.
(c) Provisions
The Company is subject to several claims, lawsuits and other legal proceedings, including customers’ claims.
The potential loss for the Company in relation to these claims is estimated considering the information provided
by the legal advisors, as explained in detail in Note 32.
4.1.7 Material Judgments upon Applying the Company’s Accounting Policies
No material judgments have been made upon applying the accounting policies.
48
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 5 – SEGMENT REPORTING
Segment Reporting as of 12.31.2012
Northwest
of
Argentina
Central
Region
Córdoba
Northeast
of
Argentina
Patagonia
Greater
Buenos
Aires
Gold
Autonomous
City of
Buenos
Aires
Nonallocable
Total
1,785,669
Income from Services
357,352
195,088
360,157
191,301
310,089
223,135
131,733
16,814
-
Expenses from Services
(42,028)
(22,945)
(42,359)
(22,500)
(36,471)
(26,244)
(15,494)
(1,978)
-
(210,019)
Net Income from Services
315,324
172,143
317,798
168,801
273,618
196,891
116,239
14,836
-
1,575,650
1,453,885
Revenues from Financing
178,944
162,843
319,184
190,870
276,116
185,231
129,235
11,462
-
Expenses from Financing
(52,930)
(48,167)
(94,412)
(56,458)
(81,673)
(54,790)
(38,227)
(3,390)
-
(430,047)
Net Income from Financing
Net Income from Short-term
Investments
Provision for Credit Losses, Net of
Recoveries
Depreciation of Property, Plant and
Equipment
126,014
114,676
224,772
134,412
194,443
130,441
91,008
8,072
-
1,023,838
4,401
4,005
7,851
4,695
6,791
4,556
3,179
282
-
35,760
(33,674)
(27,505)
(60,658)
(30,656)
(67,269)
(103,663)
(34,544)
(7,899)
-
(365,868)
(1,590)
(957)
(1,753)
(5,290)
(794)
(969)
(1,777)
(856)
(6,957)
(20,943)
-
-
-
-
-
-
-
-
(10,231)
(10,231)
(167,021)
(132,217)
(242,733)
(121,133)
(229,182)
(455,676)
(126,470)
(91,423)
-
(1,565,855)
-
-
-
-
-
-
-
-
(8,939)
(8,939)
-
-
-
-
-
-
-
-
(231,803)
(231,803)
243,454
130,145
245,277
150,829
177,607
(228,420)
47,635
(76,988)
(257,930)
431,609
Amortization of Intangible Assets
Other Operating Expenses
Loss from Investments in Associates,
Joint Ventures and Other Companies
Income Tax
Net Income / (Loss) for the Fiscal
Year
Segment Reporting as of 12.31.2011
Northwest
of
Argentina
Central
Region
Córdoba
Northeast
of
Argentina
Patagonia
Greater
Buenos
Aires
Nonallocable
Gold
Total
1,332,555
Income from Services
251,440
155,169
283,587
172,964
236,364
115,927
101,894
15,210
Expenses from Services
(25,307)
(15,617)
(28,542)
(17,409)
(23,790)
(11,669)
(10,255)
(11,765)
(144,354)
Net Income from Services
226,133
139,552
255,045
155,555
212,574
104,258
91,639
3,445
1,188,201
Revenues from Financing
114,096
100,599
202,238
131,800
168,526
80,041
75,408
-
872,708
Expenses from Financing
(35,614)
(31,400)
(63,125)
(41,139)
(52,603)
(26,502)
(23,537)
-
(273,920)
78,482
69,199
139,113
90,661
115,923
53,539
51,871
-
598,788
7,378
6,505
13,077
8,523
10,897
5,176
4,876
-
56,432
Provision for Credit Losses, Net of Recoveries
(7,247)
(5,203)
(10,375)
(6,126)
(9,717)
(14,185)
(5,319)
-
(58,172)
Depreciation of Property, Plant and Equipment
(1,743)
(938)
(1,203)
(1,445)
(1,360)
(3,826)
(848)
(5,057)
(16,420)
-
-
-
-
-
(8)
-
(5,506)
(5,514)
(111,268)
(97,036)
(164,740)
(107,918)
(157,893)
(307,848)
(83,642)
(3,615)
(1,033,960)
-
-
-
-
-
-
-
(2,604)
(2,604)
-
-
-
-
-
-
-
(252,083)
(252,083)
191,735
112,079
230,917
139,250
170,424
(162,894)
58,577
(265,420)
474,668
Net Income from Financing
Net Income from Short-term Investments
Amortization of Intangible Assets
Other Operating Expenses
Loss from Investments in Associates, Joint
Ventures and Other Companies
Income Tax
Net Income / (Loss) for the Fiscal Year
49
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 5 – SEGMENT REPORTING (Continued)
Segment Reporting as of 12.31.2012
Córdoba
Northwest
of
Argentina
Central
Region
Northeast
of
Argentina
Patagonia
Greater
Buenos
Aires
Gold
Autonomous
City of
Buenos
Aires
Nonallocable
Total
ASSETS
Cash and Cash Equivalents
Receivables from Services
65,229
49,417
94,001
48,174
1,071,278
811,605
1,543,821
791,177
73,142
49,108
30,945
-
413,798
62,118 1,201,239
806,524
508,231
-
6,795,993
3,782
-
-
-
-
-
-
-
-
418,386
418,386
14,717
2,057
5,179
25,577
6,896
15,064
709
13,251
58,630
142,080
1,151,224
863,079
1,643,001
864,928
72,796 1,289,445
856,341
552,427
Accounts Payable
599,491
409,923
763,226
479,970
611,723
247,536
408,764
34,879
Bank and Financial Loans
Compensation and Social
Security Charges
366,104
277,363
527,594
270,382
21,229
410,518
275,626
173,686
11,927
10,539
20,591
8,401
19,691
9,302
-
44,895
40,507
165,853
-
-
-
-
-
-
-
-
167,214
167,214
977,836
697,780
1,311,327
758,709
652,639
667,291
684,346
253,432
Other Assets
Property, Plant and Equipment
Total Assets
477,016 7,770,257
LIABILITIES
Other Liabilities
Total Liabilities
-
3,555,512
- 2,322,502
207,721 6,211,081
Segment Reporting as of 12.31.2011
Córdoba
Central
Region
Northwest of
Argentina
Patagonia
Greater
Buenos
Aires
Nonallocable
34,966
40,455
-
850,232 400,109
520,698
Northeast of
Argentina
Gold
Total
ASSETS
Cash and Cash Equivalents
78,673
52,448
100,526
56,819
Receivables from Services
900,245
600,164
1,150,314
650,178
74,302
438,189
- 5,071,940
-
-
-
-
-
-
-
214,944
214,944
17,424
4,742
8,104
10,330
11,095
6,804
13,871
34,742
107,112
996,342
657,354
1,258,944
717,327
935,629 441,879
575,024
249,686 5,832,185
Accounts Payable
486,730
324,571
601,933
417,320
464,762 195,655
204,287
- 2,695,258
Bank and Financial Loans
Compensation and Social Security
Charges
273,683
200,277
374,764
154,184
218,048 280,502
123,493
- 1,624,951
8,826
7,601
14,416
5,653
14,479
6,941
26,697
30,750
115,363
-
-
-
-
-
-
-
170,678
170,678
778,007
521,815
979,831
628,419
747,901 329,024
419,825
Other Assets
Property, Plant and Equipment
Total Assets
LIABILITIES
Other Liabilities
Total Liabilities
50
201,428 4,606,250
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 6 – REVENUES FROM SERVICES
12.31.2012
12.31.2011
In Thousands of AR$
536,637
380,784
517,118
371,916
319,871
341,430
203,987
108,113
83,076
52,861
11,829
9,370
9,047
2,982
47,802
23,465
56,302
41,634
1,785,669
1,332,555
Account Statement Issuance Fee
Fees
Revenues from Third-Party Portfolio Managed
Other Fees
Card Renewal Fees
Granting Fees
TN Personal Loans Granting Fees
Revenues from Convivimos Magazine
Other Revenues from Services
NOTE 7 – EXPENSES FROM SERVICES
12.31.2012
12.31.2011
In Thousands of AR$
Printing and Distribution of Statements and Payments to
Merchants (“Comercios Amigos”)
Expenses from Call Center Services
Openings
Cell Phone Text Message Services
Special Promotions
Convivimos Magazine-Related Costs
Other Expenses from Services
(83,946)
(52,935)
(15,908)
(14,486)
(8,723)
(22,317)
(11,704)
(210,019)
(64,034)
(25,966)
(10,732)
(9,909)
(5,109)
(10,131)
(18,473)
(144,354)
NOTE 8 – REVENUES FROM FINANCING
12.31.2012
12.31.2011
In Thousands of AR$
417,287
291,508
629,583
361,540
162,999
77,652
155,081
88,208
76,158
43,711
12,777
10,089
1,453,885
872,708
Merchants (“Comercios Amigos”) Interest
Interest on Financing through Credit Cards
Interest on Personal Loans
Compensatory Interest
Penalty Interest
Revenues from Lawsuits
51
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 9 – EXPENSES FROM FINANCING
Interest on Notes ("Obligaciones Negociables")
Bank Interest
Foreign Exchange Loss
Loss due to Change in Net Fair Value Adjustments on
Derivative and Hedging Activities
Tax on Bank Debits and Credits
Other Expenses from Financing
12.31.2012
12.31.2011
In Thousands of AR$
(161,301)
(108,011)
(116,509)
(67,174)
(136,729)
(65,616)
(4,817)
(7,819)
(2,872)
(430,047)
(25,108)
(4,730)
(3,281)
(273,920)
NOTE 10 – NET INCOME FROM SHORT-TERM INVESTMENTS
12.31.2012
12.31.2011
In Thousands of AR$
27,943
51,869
513
(57)
430
6,874
4,620
35,760
56,432
Interest on Time Deposits
Interest on Government Securities
Income from Notes (“Obligaciones Negociables”)
Income from Mutual Funds
NOTE 11 – PROVISION FOR CREDIT LOSSES, NET OF
RECOVERIES
12.31.2012
12.31.2011
In Thousands of AR$
(413,070)
(103,545)
47,202
45,373
(365,868)
(58,172)
Provision for Credit Losses
Recovery of the Allowance for Credit Losses
NOTE 12 – PERSONNEL EXPENSES
12.31.2012
12.31.2011
In Thousands of AR$
(661,798)
(429,465)
(77,493)
(51,213)
(29,378)
(25,168)
(39,429)
(27,237)
(808,098)
(533,083)
Compensation and Social Security Charges
Bonuses for the Staff
Entertainment and Travel Expenses and Per Diem
Other Personnel Expenses
52
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 13 – TAXES AND RATES
12.31.2012
12.31.2011
In Thousands of AR$
(155,016)
(95,691)
(72,323)
(54,777)
(50,740)
(30,557)
(6,998)
(4,314)
(285,077)
(185,339)
Turnover Tax
Tax on Bank Debits and Credits
Trade and Industry Tax
Other Taxes, Rates and Contributions
NOTE 14 – ADVERTISING EXPENSES
12.31.2012
12.31.2011
In Thousands of AR$
(63,935)
(48,874)
(8,973)
(9,310)
(20,277)
(17,505)
(13,243)
(4,606)
(106,428)
(80,295)
National Advertising
Commercial Promotions
Regional Advertising
Other Advertising
NOTE 15 – DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT AND AMORTIZATION OF
INTANGIBLE ASSETS
12.31.2012
12.31.2011
In Thousands of AR$
Depreciation of Property, Plant and Equipment
(20,943)
(16,420)
Amortization of Intangible Assets
(10,231)
(5,514)
(31,174)
(21,934)
53
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 16 – OTHER OPERATING EXPENSES
Rentals
Regular Mail Services
Donations
Electricity, Natural Gas and Communications
Bank and Financial Expenses
Collection Expenses
Expenses for Procedures for the Collection of Amounts in
Arrears
Directors’ Fees
Professional Fees
Insurance and Security Services
Stationery and Office Supplies
Maintenance of Equipment and Real Property
Cleaning Expenses
Other Income and Expenses
12.31.2012
12.31.2011
In Thousands of AR$
(36,747)
(26,322)
(18,144)
(10,010)
(898)
(648)
(26,987)
(17,804)
(8,712)
(6,034)
(51,199)
(35,567)
(30,471)
(8,800)
(49,982)
(40,657)
(12,456)
(22,366)
(9,532)
(49,301)
(366,252)
(12,365)
(7,311)
(38,700)
(25,838)
(9,426)
(13,118)
(6,041)
(26,059)
(235,243)
NOTE 17 – LOSS FROM INVESTMENTS IN ASSOCIATES, JOINT VENTURES AND OTHER
COMPANIES
12.31.2012
12.31.2011
In Thousands of AR$
Loss from Investment in TN Perú S.A.C.
(9,845)
(2,654)
Income from Investment in Tarjetas Cuyanas S.A.
676
Income from Investment in Cobranzas Regionales S.A.
230
50
(8,939)
(2,604)
54
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 18 – INCOME TAX
The following table shows the changes of deferred income tax assets and liabilities:
Net Deferred
Income Tax
Assets
Income Tax
Accrued during the
Fiscal Year
Income Tax
Payable
In Thousands of AR$
Balances at the Beginning of Fiscal Year 2011
Adjustment to Prior-year Taxable Income (Note
2)
Balances at the Beginning of Fiscal Year 2011,
Adjusted
Increase in Taxable Income during Fiscal Year
2010 (2)
68,661
Payment of Income Tax - 2010 (3)
(163,507)
33,903
-
33,903
102,564
(163,481)
(129,604)
(108)
10
(98)
-
Income Tax Accrued during the Fiscal Year
163,230
-
(238,428)
(251,985)
89,520
(238,669)
(252,083)
1,122
-
(1,257)
239,926
(135)
-
48,199
(279,867)
(231,668)
138,841
(279,867)
(231,803)
(12,936)
Balances as of December 31, 2011
Difference between the Tax Return and the
Provision for Income Tax – Fiscal Year 2011 (5)
Payment of Income Tax – 2011 (6)
Income Tax Accrued during the Fiscal Year
(163,481)
(1)
(7)
Balances as of December 31, 2012
(4)
(1) It corresponds to the income tax amount that, pursuant to the estimations made by the Company’s Management as of February 14, 2011, should
have been paid according to the taxable income accrued during the fiscal year ended December 31, 2010.
(2) It corresponds to a correction of the provision for income tax estimated at the end of fiscal year 2010.
(3) It corresponds to income tax for fiscal year 2010 paid by the Company.
(4) It corresponds to the income tax amount that, pursuant to the estimations made by the Company’s Management as of February 13, 2012, should
be paid in May 2012 according to the taxable income accrued during the fiscal year ended December 31, 2011.
(5) It corresponds to a correction of the provision for income tax estimated at the end of fiscal year 2011.
(6) It corresponds to income tax for fiscal year 2011 paid by the Company.
(7) It corresponds to the income tax amount that, pursuant to the estimations made by the Company’s Management at the date of these financial
statements, should be paid in May 2013 according to the taxable income accrued during the fiscal year ended December 31, 2012.
55
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 18 – INCOME TAX (Continued)
As of December 31, 2012 and December 31, 2011, the net assets derived from the information included in the
previous table amount to AR$ 138,841 and AR$ 89,520, respectively. Their composition as of those dates is
detailed below:
Balances as of
December 31, 2011
Receivables from Services
Investments
Property, Plant and Equipment
Accounts Payable
Compensation and Social Security Charges
Bank and Financial Loans
Provision for Contingencies
Others
Tax Loss Carry-forwards
Allowance for Impairment of Value
Totals
79,513
286
(78)
44
70
(336)
9,928
451
84
(442)
89,520
Increase / (Decrease)
Balances as of
during the Fiscal
December 31, 2012
Year
In Thousands of AR$
55,345
134,858
(388)
(102)
(249)
(327)
44
(17)
53
(332)
(668)
(5,538)
4,390
142
593
(84)
442
49,321
138,841
The income tax amount estimated by Management, net of prepayments, as of December 31, 2012 and 2011 and
January 1, 2011 is as follows:
12.31.2012
Provision for Income Tax
Prepayment
Income Tax Payable
12.31.2011
01.01.2011
(279,867)
249,463
(238,669)
177,206
(163,240)
124,167
(30,404)
(61,463)
(39,073)
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:
12.31.2012
12.31.2011
In Thousands of AR$
Income for the Fiscal Year before Income Tax
Tax Rate in Force
Loss for the Fiscal Year at the Tax Rate
Permanent Differences at the Tax Rate:
- Loss from Interest in Other Companies
- Non-taxable Income (1)
- Donations and Other Non-deductible Expenses
- Others
- Allowance for Long-term Investment in Companies
Difference between the Tax Return and the Provision for Income Tax –
Fiscal Years 2011 and 2010
Total Income Tax Charge for the Fiscal Year
663,412
35%
(232,194)
726,751
35%
(254,363)
(3,526)
6,130
(126)
(2,349)
397
(765)
3,225
(99)
(418)
239
(135)
(231,803)
98
(252,083)
(1) It mainly corresponds to the income / (loss) from transactions carried out in Tierra del Fuego, net of indirect charges.
56
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 18 – INCOME TAX (Continued)
The following chart shows the reconciliation of income tax charged to income to tax assessed for the fiscal year
for tax purposes:
12.31.2012
12.31.2011
In Thousands of AR$
Total Income Tax Charge Recorded for the Fiscal Year
- Temporary Differences at the Tax Rate
- Adds:
Accrual of Interest on Investments
Allowance for Credit Losses
Recovery of the Provision for Contingencies / Provision for Contingencies
Bonuses Payable
Depreciation of Property, Plant and Equipment
Valuation of Bank and Financial Loans
Others
- Others
Tax Loss Carry-forwards
Allowance for Impairment of Value
Difference between the Tax Return and the Provision for Income Tax – Fiscal
Years 2011 and 2010
Total Tax for the Fiscal Year Determined for Tax Purposes
Income Tax Prepayments
Income Tax Payable
(231,803)
(252,083)
388
(55,345)
5,538
17
249
332
(142)
(286)
9,289
4,391
(660)
151
389
84
(442)
330
(180)
1,257
(10)
(279,867)
249,463
(30,404)
(238,669)
177,206
(61,463)
NOTE 19 – RESERVE FOR TRANSLATION DIFFERENCES RELATED TO FOREIGN OPERATIONS
The change in the reserve for translation differences disclosed in the Statement of Other Comprehensive Income
was as follows:
12.31.2012
12.31.2011
In Thousands of AR$
Balance at the Beginning of the Reserve for Translation as of the Date of Transition to
IFRS
Increase in the Reserve for Translation Related to Foreign Operations for the Fiscal
Year Ended December 31, 2012 and 2011
Balance of the Reserve for Translation Differences Related to Foreign Operations
57
225
-
1,930
2,155
225
225
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 20 – CASH AND CASH EQUIVALENTS
12.31.2012
12.31.2011
01.01.2011
In Thousands of AR$
21,720
39,218
17,327
35,743
47,149
37,922
147,296
252,301
176,685
141,874
50,022
60,025
16,669
22,841
8,520
50,496
26,658
13,875
413,798
438,189
314,354
Cash in Banks – Checking Account
Cash and Petty Cash
Time Deposits
Mutual Funds
Deposits Abroad
Collections to be Deposited
Total
NOTE 21 – INVESTMENTS
12.31.2012
12.31.2011
01.01.2011
In Thousands of AR$
15,195
4,800
6,268
2,547
-
Current
Investment in Government Securities
Investment in Notes (“Obligaciones Negociables”)
Mutual Funds
Total
24,010
-
4,800
Non-current
Investment in Notes (“Obligaciones Negociables”)
Total
28,611
28,611
-
-
-
-
Below is a breakdown of the main characteristics of investments effective as of December 31, 2012:
Investment
Date
Currency
09/19/2012 US$
08/08/2012 US$
10/19/2012 US$
10/23/2012 US$
Book
Face
Interest
Value as
Values in Maturity Date
Rate / Price
of
Thousands
12.31.12
Investment
Notes (“Obligaciones
Negociables”) Cresud Class X
Series 5 Tranche II
Province of Buenos Aires
Series II
Notes (“Obligaciones
Negociables”) YPF Class IX
Fima Capital Plus “C”
58
3,500
06/23/2012
Fixed at
7.75%.
17,593
3,000
08/08/2013
Fixed at 9%
15,195
3,500
500
10/19/2014
N/A
Fixed at 5%
N/A
17,286
2,547
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 22 – RECEIVABLES FROM SERVICES
12.31.2012
12.31.2011
01.01.2011
In Thousands of AR$
Current
Credit Card Debtors
Allowances for Credit Losses – Credit Card
Personal Loans Debtors
Allowances for Credit Losses – Personal Loans
Trade Debtors
Total
Non-current
Credit Card Debtors
Personal Loans Debtors
Total
Changes in the Account Allowance for Credit Losses
Balances at the Beginning of the Fiscal Year
Increases for the Fiscal Year
Increase due to Merger with Tarjeta Mira S.A. as of 12.31.11
Decrease due to Sale of Tarjetas del Mar S.A.’s Portfolio
Applications and Uses
Balances at Fiscal Year-end
7,009,583
(503,458)
124,226
(7,857)
6,622,494
4,873,800
(257,770)
271,329
(3,814)
4,883,545
3,295,538
(265,979)
996
3,030,555
170,612
2,887
173,499
137,100
51,295
188,395
87,550
87,550
12.31.2012
12.31.2011
01.01.2011
In Thousands of AR$
255,917
265,979
182,638
413,070
107,467
251,570
4,716
(6,466)
(155,922)
(111,862)
(168,229)
511,315
261,584
265,979
Memorandum Accounts
Additionally, as of December 31, 2012 and 2011 and as of January 1, 2011, the Company recorded under
memorandum accounts AR$ 693,752, AR$ 620,715 and AR$ 524,963, respectively, in respect of those
receivables from services that are considered uncollectible, considering as such those in arrears for more than
360 days.
59
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 23 – OTHER RECEIVABLES
12.31.2012
12.31.2011
01.01.2011
In Thousands of AR$
Current
Sundry Receivables
Deposits for Checking Account Attachments
Prepaid Expenses
Life Insurance Receivable
Commissions Receivable
Advance Payments to Suppliers
Balances under Hedging Transactions
Total
11,865
596
15,403
4,068
31,771
5,956
958
70,617
15,578
454
14,169
4,547
22,502
3,605
60,855
6,816
800
6,738
1,652
11,099
4,112
31,217
Non-current
Sundry Receivables
Security Deposits
Prepaid Expenses
Total
37,259
1,491
816
39,566
3,850
753
577
5,180
400
2,870
3,270
60
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and December 31, 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 24 – INVESTMENTS IN ASSOCIATES, JOINT VENTURES AND OTHER COMPANIES
Issuer Information
Issuing Company
Interest
Percentage
Book Value
as of
12.31.12
Book
Value as of
12.31.11
Book
Value as
of 01.01.11
Balances as of 12.31.12
Principal Line of
Business
Class of
Shares
Number of
Shares
(2)
Face Value
of Shares
(1)
Capital
(1)
In Thousands of AR$
Cobranzas
Regionales S.A.
Tarjeta Naranja Perú
S.A.C.
Tarjetas del Mar S.A.
(3)
Tarjetas Cuyanas
S.A.
Totals
427
198
-
24%
17,315
7,675
-
-
-
5
2,941
20,683
7,873
5
1%
Income /
(Loss)
In Thousands of AR$
5%
0.0050%
Shareholders’
Equity
Integral Advisory
Services for Credit
Risk
Analysisand
Commercial
Investing Activities
Credit Card
Administrator
Credit Card
Administrator
Ordinary
registered
shares
Ordinary
registered
shares
Ordinary
registered
shares
Ordinary
registered
shares
10,000
0.1
1,000
8,545
4,595
52,208,547
0.001
52,209
72,144
(32,977)
2,424,329
0.01
24,243
-
-
3,233,283
0.01
32,333
300,265
92,447
(1) Values are stated in each company’s local currency based on its country of origin.
(2) Values are stated in units.
(3) Values with regard to interest percentage, number of shares, face value of shares and capital stock of Tarjetas del Mar S.A. correspond to December 31, 2010.
61
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and December 31, 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 25 – PROPERTY, PLANT AND EQUIPMENT
ORIGINAL VALUE
Value at the
Beginning
of the Fiscal
Year
Deletes
Adds
DEPRECIATION
Transfers
Value at
Fiscal
Year-end
Accumulated
at the
Beginning of
Deletes
Transfers
the Fiscal
Year
In Thousands of AR$
NET BOOK VALUE
For the
Fiscal
Year
Accumulated
at Fiscal
12.31.2012 12.31.2011 01.01.2011
Year-end
Land
12,125
-
14,810
-
26,935
-
-
-
-
-
26,935
12,125
12,125
Real Property
20,748
-
1,892
(3)
22,637
(4,403)
-
(70)
(292)
(4,765)
17,872
16,345
15,915
Cost of Adapting Stores
81,165
(1,424)
11,781
4
91,526
(50,973)
1,814
(4)
(9,126)
(58,289)
33,237
30,192
25,977
Furniture and Fixtures
22,110
(468)
1,671
1,364
24,677
(14,153)
158
(3)
(1,382)
(15,380)
9,297
7,957
6,631
Hardware
51,434
(553)
3,060
10,586
64,527
(31,077)
544
(2)
(7,256)
(37,791)
26,736
20,357
12,324
Facilities and Improvements
32,076
(407)
5,243
1,036
37,948
(15,524)
122
77
(2,887)
(18,212)
19,736
16,552
13,513
7
(3)
-
(1)
3
(7)
2
2
-
(3)
-
-
1
3,584
2,342
Vehicles
Work in Progress
3,584
-
17,669
(12,986)
8,267
-
-
-
-
-
8,267
Totals as of 12.31.2012
223,249
(2,855)
56,126
-
276,520
(116,137)
2,640
-
(20,943)
(134,440)
142,080
Totals as of 12.31.2011
189,454
(1,704)
35,499
-
223,249
(100,626)
909
-
(16,420)
(116,137)
Totals as of 01.01.2011
166,953
(64)
22,565
-
189,454
(86,585)
45
-
(14,086)
(100,626)
62
107,112
88,828
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and December 31, 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 26 – INTANGIBLE ASSETS
INTANGIBLE ASSETS
ORIGINAL VALUE
Items
Patents and Software
Value at the
Beginning of
the Fiscal
Year
68,966
Deletes
AMORTIZATION
Value at
Fiscal
Year-end
Adds
(78)
54,825
123,713
Accumulated
at the
Beginning of
the Fiscal
Year
Deletes
(22,477)
26
NET BOOK VALUE
For the
Fiscal
Year
(10,231)
Accumulated
at Fiscal Yearend
12.31.2012
12.31.2011
(32,682)
91,031
46,489
13,764
5,027
5,029
Other Intangible Assets
5,027
-
-
5,027
-
-
-
-
5,027
Totals as of 12.31.2012
73,993
(78)
54,825
128,740
(22,477)
26
(10,231)
(32,682)
96,058
Totals as of 12.31.2011
36,470
(718)
38,241
73,993
(17,677)
714
(5,514)
(22,477)
Totals as of 01.01.2011
16,720
-
19,750
36,470
(12,472)
-
(5,205)
(17,677)
63
01.01.2011
51,516
18,793
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and December 31, 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 27 – ACCOUNTS PAYABLE
12.31.2012
12.31.2011
01.01.2011
In Thousands of AR$
Current
Merchants (“Comercios Amigos”)
3,427,825
2,617,906
1,831,024
Suppliers
79,791
43,067
23,401
Life Insurance Payable
14,875
5,858
3,429
Collections on Account of Third Parties Payable
33,021
28,427
19,216
Total
3,555,512
2,695,258
1,877,070
NOTE 28 – BANK AND FINANCIAL LOANS
12.31.2012
12.31.2011
01.01.2011
In Thousands of AR$
444,458
261,177
374,150
485,655
249,901
230,665
3,272
1,351
1,295
1,631
17,384
1,633
47,433
83,575
982,449
613,388
607,743
Current
Notes (“Obligaciones Negociables”)
Bank and Financial Loans
Financial Leases
Balances under Hedging Transactions
Checking Account Overdrafts
Total
Non-current
Notes (“Obligaciones Negociables”)
Bank and Financial Loans
Financial Leases
Total
1,191,401
96,982
51,670
1,340,053
NOTE 29 – COMPENSATION AND SOCIAL SECURITY CHARGES
12.31.2012
Current
Salaries Payable
Social Security Charges
Provisions
Rewards for the Staff
Bonus for the Staff
Total
150,434
9,519
159,953
12.31.2011
01.01.2011
In Thousands of AR$
53,755
43,015
39,397
25,138
4,548
165,853
64
941,689
60,439
9,435
1,011,563
29,672
28,968
27,618
18,167
10,938
115,363
19,852
16,340
16,971
13,050
7,952
74,165
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and December 31, 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 30 – TAX CHARGES
12.31.2012
12.31.2011
01.01.2011
In Thousands of AR$
Trade and Industry Tax Payable
Tax Withholdings and Additional Tax Withholdings
Made from Third Parties
Value-added Tax Payable
Turnover Tax Payable
Stamp Tax Payable
Provision for Minimum Presumed Income Tax
Total
5,607
3,325
2,179
32,922
58,579
13,110
110,218
21,889
40,245
8,490
142
273
74,364
14,206
25,166
6,008
47,559
NOTE 31 – OTHER LIABILITIES
12.31.2012
Current
Fees Payable to Directors and Supervisory Committee
Advanced Payments to Directors
Other Miscellaneous Liabilities
Total
Non-current
Other Miscellaneous Liabilities
Total
12.31.2011
01.01.2011
In Thousands of AR$
8,800
(920)
3,355
11,235
7,310
(1,148)
3,499
9,661
5,316
(773)
1,932
6,475
-
-
660
660
NOTE 32 – PROVISIONS
This account includes the estimated amounts to face risks of probable occurrence, which, if they occur, will give
rise to a loss for the Company.
(1) Legal Claims:
The Company is subject to several claims, lawsuits and other legal proceedings, including customers’ claims,
where a third party is claiming payments for alleged damages, refunds for losses or compensation. The potential
debt for the Company with respect to such claims, lawsuits and other legal proceedings cannot be certainly
estimated. Management periodically reviews the progress of each of the significant issues and calculates the
potential financial exposure.
A provision is booked when a potential loss derived from a claim or legal proceeding is deemed likely and the
amount can be fairly estimated.
65
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and December 31, 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 32 – PROVISIONS (Continued)
Provisions for contingent losses reflect a fair estimation of the losses to be incurred based on the information
made available by Management as of the date of the preparation of the financial statements and considering the
lawsuits to which Tarjeta Naranja is a party. These estimations are mainly prepared with the assistance provided
by the legal advisors.
(2) Tax Claims:
As of the date of these financial statements, the Company is in the following situation with respect to certain
Provincial Tax Boards and the Argentine IRS (Administración Federal de Ingresos Públicos – “AFIP”):
Provincial Tax Boards
The Company has a dispute with the General Tax Board of the Province of Córdoba regarding turnover tax
claimed for tax periods running from January 1997 to May 2003.
On July 30, 2010, the Court of Appeals in Federal Administrative Matters declared null and void the resolutions
passed by the General Tax Board. The General Tax Board appealed the decision and, at the date of these
financial statements, the case is pending a decision by the Supreme Court of Justice of the Province of Córdoba.
The full amount claimed by the Tax Board of the Province of Córdoba, plus additional charges, amounted to AR$
1,205 at the time of the last calculation. As of December 31, 2012 and December 31, 2011, this amount,
including the respective interest, totaled AR$ 1,975 and AR$ 1,854, respectively.
Likewise, the Tax Boards of the Provinces of Catamarca and Chubut have made claims for the same items. As
of December 31, 2012, such claims totaled AR$ 1,832 and AR$ 2,716, respectively.
Concerning the issues described above, Tarjeta Naranja S.A.'s Board of Directors, based on tax advisors'
opinions, considers the taxes involved have been appropriately calculated according to legal regulations
currently in force, and those tax authorities’ claims have no legal or technical grounds. Therefore, the Company
is currently exercising — and will exercise in the future — its constitutional rights in order to clarify and settle said
issues. However, the Company — as in all cases where a judicial litigation is involved and based on a prudence
criterion — has included certain provisions into the Company’s liabilities, which are determined based on the
opinion of tax advisors and considering the evolution of the cases described above.
Argentine IRS (“Administración Federal de Ingresos Públicos” - AFIP)
Tarjeta Naranja S.A. has lodged appeals before the Federal Tax Court with regard to the adjustments made by
the AFIP. Such adjustments had to do with the method to be used for the deduction of credit losses when
determining the Income Tax, corresponding to fiscal years 1999 and 2000.
The Argentine Supreme Court of Justice, in rulings related to Tarjeta Naranja S.A. and Banco Francés S.A., has
issued favorable decisions with regard to controversies over the method used for the deduction of credit losses
that was similar to the Company’s. In addition, in May 2011, the Federal Tax Court issued a similar decision in a
case related to Tarjetas Cuyanas S.A. This supports the criterion for the deduction of credit losses adopted by
the Company.
66
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 32 – PROVISIONS (Continued)
Recently, and along the same line, in May 2012 the Federal Tax Court issued a decision in favor of the
Company for the tax periods 1999 and 2000 referred to above, where it decided to revoke the Decisions that
determined the adjustments, with costs awarded against the AFIP. As of the date of these financial statements,
the provisions booked in liabilities related to the cases described above had been adjusted based on the opinion
of the tax advisors, the administrative and judicial case law referred to above and the favorable evolution thereof.
The breakdown and changes of contingent liabilities as of December 31, 2012 are as follows:
Tax Matters
Consumer Protection
Labor Matters
Damages
Others
Total
Balance at
the
Beginning of
the Fiscal
Year
14,715
10
1,901
527
8,037
25,190
Adds
10,447
1,125
151
105
11,828
Deletes
(13,381)
(533)
(125)
(7,622)
(21,661)
Balance at
Fiscal Yearend
11,781
10
2,493
553
520
15,357
In addition, the breakdown and changes of contingent liabilities as of December 31, 2011 are as follows:
Tax Matters
Consumer Protection
Labor Matters
Legal Actions for Notes (“Obligaciones
Negociables”)
Damages
Others
Total
Balance at
the
Beginning of
the Fiscal
Year
24,344
10
1,543
966
910
8,500
36,273
67
Adds
Deletes
Balance at
Fiscal Yearend
998
1,242
(10,627)
(884)
14,715
10
1,901
92
201
2,533
(966)
(475)
(664)
(13,616)
527
8,037
25,190
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and December 31, 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 32 – PROVISIONS (Continued)
In addition, the breakdown and changes of contingent liabilities as of January 1, 2011 are as follows:
Tax Matters
Consumer Protection
Labor Matters
Legal Actions for Notes (“Obligaciones
Negociables”)
Damages
Others
Total
Balance at
the
Beginning of
the Fiscal
Year
22,205
10
1,011
1,791
816
8,160
33,993
68
Adds
Deletes
Balance at
Fiscal Yearend
3,518
971
(1,379)
(439)
24,344
10
1,543
77
257
431
5,254
(902)
(163)
(91)
(2,974)
966
910
8,500
36,273
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 33 – 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 with regard
to the obligations outstanding as of December 31, 2012 are summarized as follows, in chronological order:
Institution
Banco
Hipotecario
S.A.
Banco Itaú
Argentina S.A.
Banco Comafi
S.A.
Currency
of the
Loan
Date of
Disbursement
Maturity
Date
Pesos
(AR$)
08/04/2010
08/02/2013
b)
Term
Loan
Amount (In
Thousands
of AR$)
Outstanding
Principal
Amount as of
12.31.12
(in Thousands
of AR$)
Guaranty
Principal Payments
Interest Payments
3 years
b)
15,000
15,000
None
One payment at maturity
Monthly
One payment at maturity
Monthly
Pesos
(AR$)
09/27/2010
09/27/2013
3 years
19,200
19,200
A percentage of
the amounts
collected by
Tarjeta Naranja
S.A.
a)
Pesos
(AR$)
09/28/2010
03/25/2013
c)
30
months
c)
20,000
20,000
None
One payment at maturity
Quarterly
One payment at maturity
Monthly
One payment at maturity
Monthly
Banco Itaú
Argentina S.A.
Pesos
(AR$)
10/14/2010
10/14/2013
3 years
24,500
24,500
A percentage of
the amounts
collected by
Tarjeta Naranja
S.A.
a)
Banco de
Galicia y
Buenos Aires
S.A.
d)
Pesos
(AR$)
02/14/2011
02/14/2013
2 years
6,000
6,000
None
69
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 33 – BANK LOANS (Continued)
Bank Loans Obtained (Continued)
Outstanding
Principal
Amount as of
12.31.12
(in
Thousands
of AR$)
Guaranty
Principal Payments
Interest Payments
Institution
Currency
of the
Loan
Date of
Disbursement
Maturity
Date
Term
Loan
Amount (In
Thousands
of AR$)
Banco
Supervielle
S.A.
Pesos
(AR$)
09/05/2011
09/04/2013
e)
2
years
e)
25,000
25,000
A percentage of the
amounts collected by
Tarjeta Naranja S.A.
a)
One payment at maturity
Monthly
Banco Itaú
Argentina S.A.
Pesos
(AR$)
09/30/2011
09/19/2013
720
days
11,000
11,000
None
One payment at maturity
Monthly
Banco
Patagonia S.A.
Pesos
(AR$)
10/05/2011
10/02/2013
f)
730
days
f)
15,000
15,000
None
One payment at maturity
Monthly
Banco de
Galicia y
Buenos Aires
S.A.
d)
Pesos
(AR$)
01/09/2012
01/09/2013
1 year
15,000
15,000
None
One payment at maturity
Monthly
Banco Ciudad
de Buenos
Aires
Pesos
(AR$)
02/06/2012
02/06/2013
1 year
80,000
80,000
None
One payment at maturity
Monthly
Banco
Santander Río
S.A.
Pesos
(AR$)
03/16/2012
03/16/2014
2
years
10,000
10,000
None
3 consecutive quarterly installments
of AR$ 3,333 each. The first principal
payment is due on 09/16/2013
Quarterly
70
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 33 – BANK LOANS (Continued)
Bank Loans Obtained (Continued)
Institution
Currency
of the
Loan
Date of
Disbursement
Maturity
Date
Term
Loan
Amount (In
Thousands
of AR$)
Outstanding
Principal
Amount as of
12.31.12
(in
Thousands of
AR$)
Banco
Industrial S.A.
Pesos
(AR$)
04/20/2012
04/19/2013
1 year
10,000
10,000
None
One payment at maturity
Monthly
Banco de
Galicia y Bs.
As. S.A.
Pesos
(AR$)
04/24/2012
04/24/2013
1 year
50,000
50,000
None
One payment at maturity
Monthly
Syndicate (g)
Pesos
(AR$)
05/18/2012
05/19/2014
731
days
60,000
60,000
None
5 quarterly installments of AR$
12,000. The first principal
payment is due on 05/20/2013
Quarterly
Standard Bank
Argentina S.A.
Pesos
(AR$)
06/04/2012
05/30/2013
360
days
20,000
20,000
None
One payment at maturity
Monthly
Banco
Patagonia S.A.
Banco
Santander Río
S.A.
Banco de
Galicia y Bs.
As. S.A.
Banco Itaú
Argentina S.A.
Pesos
(AR$)
06/26/2012
06/26/2013
1 year
20,000
20,000
None
One payment at maturity
Monthly
Pesos
(AR$)
07/03/2012
06/28/2013
360
days
15,000
15,000
None
One payment at maturity
Quarterly
Pesos
(AR$)
09/14/2012
09/14/2013
1 year
20,000
20,000
None
One payment at maturity
Upon maturity
Pesos
(AR$)
09/17/2012
09/17/2013
1 year
15,000
15,000
None
One payment at maturity
Monthly
5,000
A percentage of the
amounts collected by
Tarjeta Naranja S.A.
a)
One payment at maturity
Monthly
Banco
Supervielle
S.A.
Pesos
(AR$)
09/17/2012
09/17/2013
1 year
5,000
71
Guaranty
Principal Payments
Interest Payments
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 33 – BANK LOANS (Continued)
Bank Loans Obtained (Continued)
Institution
Currency of
Date of
the Loan Disbursement
Maturity
Date
Term
Loan
Amount (In
Thousands
of AR$)
Outstanding
Principal
Amount as of
12.31.12
(in
Thousands
of AR$)
Guaranty
Principal Payments
Interest Payments
Banco Comafi
S.A
Pesos
(AR$)
10/02/2012
03/31/2013
180
days
10,000
10,000
None
One payment at maturity
Monthly
Banco Itaú
Argentina S.A.
Pesos
(AR$)
10/15/2012
10/15/2013
365
days
3,000
3,000
None
One payment at maturity
Monthly
Banco Itaú
Argentina S.A.
Pesos
(AR$)
10/15/2012
10/05/2014
720
days
15,000
15,000
None
One payment at maturity
Monthly
Banco
Credicoop
Cooperativo
Limitado
Pesos
(AR$)
10/29/2012
04/29/2013
182
days
10,000
10,000
None
One payment at maturity
Upon maturity
Standard Bank
Argentina S.A.
Pesos
(AR$)
11/23/2012
11/22/2013
364
days
10,000
10,000
None
One payment at maturity
Monthly
Banco de
Galicia y Bs.
As. S.A.
Pesos
(AR$)
12/10/2012
12/10/2013
1 year
15,000
15,000
None
One payment at maturity
Quarterly
a)See Note 43.
b)On August 3, 2012, a 364-day extension was signed. Therefore, the new maturity date is August 2, 2013.
c) On September 24, 2012, a 182-day extension was signed. Therefore, the new maturity date is March 25, 2013.
d)Loans obtained by Mira S.A. at the date of disbursement. Later, due to the merger, they were transferred to Tarjeta Naranja S.A.
e)On September 4, 2012, a 365-day extension was signed. Therefore, the new maturity date is September 4, 2013.
f)On October 2, 2012, a 365-day extension was signed. Therefore, the new maturity date is October 2, 2013.
g)Loan obtained through a group of financial institutions, such as Nuevo Banco de Santa Fe S.A., Banco de La Pampa S.E.M., Banco de Crédito y Securitización S.A., Banco de la
Ciudad de Buenos Aires, Banco de Servicios y Transacciones S.A. and Banco Santander Río S.A. The latter also performs the role of arranger and administrative agent.
72
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 33 – BANK LOANS (Continued)
Covenants Undertaken:
In the loan agreements entered into with Banco Itaú Argentina S.A. on September 27, 2010 and October
14, 2010, the Company undertook to maintain a shareholders’ equity higher than AR$ 550,000.
In the loan agreements entered into with Banco Supervielle, the Company agreed to comply with the
following covenant:
Not to assign for the use or enjoyment, not to grant as loan for consumption and/or as a gratuitous loan,
not to lease or grant a lease, not to grant a security interest and/or guaranty and/or not to create trusts
and/or carry out an assignment of its rights, whether fiduciary or not, and/or personal rights whatsoever
with regard to more than 35% of its present or future assets, and/or goods and/or rights and/or revenues
already received or to be received in the future, and not to carry out transactions that could result in the
aforementioned without advance written consent by the Bank, except for such asset disposals or leases
carried out during the ordinary course of the Company’s business and the proceeds of which are again
used, completely, for the Company’s business activities.
In turn, in the syndicated loan agreement entered into, the Company agreed to comply with the following
covenants:
(i)
Not to guarantee third-party debts, including subsidiaries and affiliates, or else become a surety
and/or collateral guarantor with regard thereto, for an annual accumulated amount higher than 10%
of the Company’s total assets.
(ii)
Not to make investments in or else grant loans to: (a) its shareholders, directors and employees, and
(b) its subsidiaries and affiliates, for an annual accumulated amount exceeding 10% of the
Company’s shareholders’ equity, except for those investments or the granting of loans carried out
during the ordinary course of the Company’s business.
(iii) Not to sell, assign, transfer, lease or else dispose in any other way of all of its property plant and
equipment or a significant part thereof that represent an amount higher than 25% of the Company’s
total assets, individually or as a whole, during the currency of the loan, except for such asset
disposals or leases carried out during the ordinary course of the Company’s business and the
proceeds of which are again used, completely, for the Company's business activities (including,
without limitation, the credit assignments under financial trusts).
(iv) Not to incur debt, unless at the date of incurring debt all of the following requirements are met:
a)
b)
c)
The Total Liabilities to Shareholders’ Equity Ratio does not exceed 6 to 1;
The Indebtedness to Shareholders’ Equity Ratio does not exceed 4 to 1;
After having incurred such debt, the Company’s shareholders’ equity is higher than AR$
850,000.
(v) The Company shall be able to distribute cash dividends among shareholders as long as the
abovementioned shareholders' equity ratios are kept.
73
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 33 – BANK LOANS (Continued)
(vi) Neither the Company nor its subsidiaries shall levy, undertake or else allow the existence of any lien
on all or part of their goods or assets, including intangible assets or
(vii) present or future revenues, as from the first business day immediately following the date of the
agreement, except for the permitted liens.
In the loan agreement entered into with Banco Comafi on October 2, 2012, the Company agreed to
comply with the following covenants:
(i) Not to decrease the shareholders’ equity reported below AR$ 850,000.
(ii) Not to allow preliminary injunctions to be imposed on the Company’s assets, if such preliminary
injunctions were not lifted within 60 running days as from the respective notice, provided that they
affect assets or revenues for an amount equal to or higher than 2.5% of assets.
At the date of these financial statements, the Company has complied with the abovementioned covenants
undertaken.
Financial Loans Obtained
With the purpose of financing its business transactions, the Company took out the following financial loan,
the main characteristics of which with regard to the obligations outstanding as of December 31, 2012 are
summarized as follows:
Institution
Currency
of the
Loan
Date of
Disbursement
Maturity Date
Term
Tarjetas
Regionales
S.A.
Pesos
(AR$)
08/08/2012
08/10/2014
2
years
Outstanding
Loan
Principal Amount as
Amount (In
of 12.31.12
Thousands
(in thousands of
of AR$)
Pesos)
55,000
55,000
Guaranty
Principal
Payments
Interest
Payments
None
One payment
at maturity
Quarterly
Checking Account Overdrafts
The Company has taken out and used the following checking account overdrafts, the main characteristics
of which with regard to the obligations outstanding are summarized as follows, in chronological order:
Institution
Overdraft
Currency
Banco Santander Rio
S.A.
HSBC Bank Argentina
S.A.
Pesos
(AR$)
Pesos
(AR$)
Date of
Constitution
Maturity Date
Bank Overdraft
Amount (In
Thousands of
AR$)
Amortization
Interest
Payments
05/31/2012
05/31/2013
25,000
Upon maturity
Quarterly
06/04/2012
06/04/2013
22,000
Upon maturity
Monthly
74
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 33 – BANK LOANS (Continued)
Memorandum Accounts
Additionally, as of December 31, 2012, the Company recorded AR$ 100,000 under memorandum
accounts, which represent the unused amount of the Company’s commitment to Banco Galicia, executed
in September 2012, which expires on August 31, 2013.
As of December 31, 2011, the Company recorded AR$ 120,000 under memorandum accounts, of which
AR$ 100,000 represented the unused amount of the Company’s commitment to Banco Galicia and AR$
20,000 represented the unused amount of a credit line granted by Banco Patagonia, which expired on
June 15, 2012.
NOTE 34 – FINANCIAL LEASES
The Company has entered into financial lease agreements, the main characteristics of which are detailed
below:
Subject-matter
Real Property
Located in Río
Grande
Real Property
Located in the
City of Córdoba,
at Humberto
Primo Street (a)
Real Property
Located in the
City of Córdoba,
at Jujuy Street (b)
Real Property
Located in the
City of Córdoba,
at Jujuy and Bv.
Mitre Streets
Month of
Agreement
Execution
Institution
November
2007
Banco de
Galicia y
Buenos Aires
S.A.
July 2008
Banco de
Galicia y
Buenos Aires
S.A.
July 2008
Banco de
Galicia y
Buenos Aires
S.A.
October 2012
Banco de
Galicia y
Buenos Aires
S.A.
Installments
Lease Payments (In
Thousands of AR$)
Payment
Method
Purchase Option (In
Thousands of AR$)
121
60 payments of AR$ 15 and
61 lease payments of AR$ 3,
plus interest at a variable
rate. In both cases, interest
is computed based on the
Corrected Survey Rate for
Private Banks, plus a 5.5%
spread
Monthly
AR$ 48 at the time of
paying the last
installment
121
AR$ 70, plus interest at a
variable rate based on the
Corrected Survey Rate for
Private Banks, plus a 6%
spread
Monthly
AR$ 1,100 at the time
of paying the last
installment
121
AR$ 18, plus interest at a
variable rate based on the
Corrected Survey Rate for
Private Banks, plus a 6%
spread
Monthly
AR$ 400 at the
time of paying the
last installment
121
AR$ 119, plus interest at a
variable rate based on the
Corrected Survey Rate for
Private Banks, plus a 6%
spread
Monthly
AR$ 435 at the
time of paying the
last installment
a) On December 6, 2010, the Company signed with Banco de Galicia y Buenos Aires S.A. an addendum to the lease agreement
for financing the construction of a building on the real property located at Humberto Primo Street. Subsequently, on October 30,
2012, a new addendum was signed, which, together with the previous one, are part of a new transaction.
b) The agreement was signed on July 7, 2010, when the minutes of real estate reception were drawn up.
75
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 34 – FINANCIAL LEASES (Continued)
The following are the minimum lease payments as of December 31, 2012 and the related present value:
Present Value of
Minimum Lease
Payments
12.31.2012
8,158
3,272
24,132
10,078
46,778
41,592
(24,126)
54,942
54,942
Minimum Lease
Payments
Less than One Year
From 1 to 5 Years
Over 5 Years
Minus Future Financing Charges
Present Value of Minimum Lease Payments
12.31.2012
Included in the Financial Statements as:
Current Financial Lease
Non-current Financial Lease
Total
3,272
51,670
54,942
NOTE 35 – NOTES (“OBLIGACIONES NEGOCIABLES”)
As of December 31, 2012, the Company has the Global Program approved by Resolutions No. 15220,
No. 15361, No. 15785, No. 16319, No. 16571 and No. 16822 of the C.N.V. outstanding.
Authorized Amount
(In Thousands of
U.S. dollars)
Type of Note
Term of Program
Date of Approval by
Shareholders’
Meeting
Approval by the
C.N.V.
US$ 650,000 (*)
Simple notes, not convertible into
shares
5 years
03/08/2012
Resolution No. 16822
dated 05.23.2012
(*) The Company’s Shareholders’ Meeting held on July 14, 2005 authorized the creation of a Global Program for the Issuance of
Notes for a maximum outstanding amount of US$ 50,000 to be placed by means of a public offering. On October 26, 2005, the
C.N.V. authorized the creation of the global program and the public offering of each series of notes issued under such Program
through Resolution No. 15220 of that date.
The Shareholders’ Meeting held on March 3, 2006, in turn, authorized to increase the amount of said Global Program for the
Issuance of Notes by US$ 100,000, thus resulting in a total maximum amount of US$ 150,000. Such increase was authorized by
the C.N.V. through Resolution No. 15361 dated March 26, 2006.
On October 31, 2007, the Company’s Shareholders’ Meeting approved to increase said Program’s amount up to a maximum
outstanding amount of US$ 350,000 (three hundred and fifty thousand) or its equivalent amount in any other currency. Such
increase was authorized by the C.N.V. through Resolution No. 15785 dated November 16, 2007. On March 26, 2010, the
Shareholders’ Meeting approved the extension of the term during which such program would be effective. On April 27, 2010, the
C.N.V. authorized such extension through Resolution No. 16319.
Later, the Company’s Shareholders’ Meeting held on April 1, 2011 approved to increase said Program’s amount up to a
maximum outstanding amount of US$ 450,000 (four hundred and fifty thousand) or its equivalent amount in any other currency.
Such increase was authorized by the C.N.V. through Resolution No. 16571 dated May 24, 2011.
Finally, on March 8, 2012, the Company’s Shareholders’ Meeting approved to increase said Program’s amount up to a
maximum outstanding amount of US$ 650,000 (six hundred and fifty thousand) or its equivalent amount in any other currency.
Such increase was authorized by the C.N.V. through Resolution No. 16822 dated May 23, 2012.
76
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 35 – NOTES (“OBLIGACIONES NEGOCIABLES”) (Continued)
Below is a breakdown of the main characteristics of notes and their balances as of December 31, 2012
and 2011:
Date of
Placement
01/28/2011
Currency
Class
Number
Amount in
Thousands
US$
200,000
US$ (1)
XIII
06/14/2011
AR$ (2)
XIV
Series 1
AR$ 20,000
06/14/2011
AR$ (2)
XIV
Series 2
AR$ 79,852
11/25/2011
AR$ (3)
XV
AR$ 65,160
US$ (4)
XVI
Series 1
US$ (4)
XVI
Series 2
04/24/2012
AR$ (5)
XVII
Series I
AR$ 34,610
04/24/2012
AR$ (5)
XVII
Series II
AR$
165,390
08/07/2012
AR$ (6)
XVIII
Series I
AR$ 46,421
08/07/2012
AR$ (6)
XVIII
Series II
AR$
102,315
10/30/2012
AR$ (7)
XIX
Series I
AR$ 52,980
10/30/2012
AR$ (7)
XIX
Series II
AR$
112,345
12/19/2011
12/19/2011
US$ 21,162
US$ 13,947
Type
Simple
notes, not
convertible
into shares
Simple
notes, not
convertible
into shares
Simple
notes, not
convertible
into shares
Simple
notes, not
convertible
into shares
Simple
notes, not
convertible
into shares
Simple
notes, not
convertible
into shares
Simple
notes, not
convertible
into shares
Simple
notes, not
convertible
into shares
Simple
notes, not
convertible
into shares
Simple
notes, not
convertible
into shares
Simple
notes, not
convertible
into shares
Simple
notes, not
convertible
into shares
Term
72
months
Maturity
Date
01/28/2017
Interest
Rate /
Price
Fixed at
9%
p.a.
Authorized
by C.N.V. on
Book Value (*)
12.31.12
01/14/2011
984,000
864,000
06/06/2011
-
20,000
06/06/2011
26,623
79,852
11/17/2011
-
65,160
270
days
03/10/2012
21
months
03/14/2013
270
days
08/21/2012
Fixed at
13.50%
p.a.
Floating
Badlar
rate +
3.40%
Floating
Badlar
rate +
3.75%
12/19/2012
Fixed at
7.5%
p.a.
12/07/2011
-
91,419
12/19/2013
Fixed at
8.75%
p.a.
12/07/2011
68,620
60,252
04/13/2012
34,610
-
04/13/2012
165,390
-
07/26/2012
46,421
-
07/26/2012
102,315
-
10/19/2012
52,980
-
10/19/2012
112,345
-
365
days
731
days
365
days
04/24/2013
548
days
10/24/2013
270
days
05/04/2013
549
days
02/07/2014
270
days
07/27/2013
547
days
04/30/2014
Fixed at
16.25%
p.a.
Floating
Badlar
rate +
2.10%
Fixed at
17.7%
p.a.
Floating
Badlar
rate +
4.00%
Fixed at
19%
p.a.
Floating
Badlar
rate +
4.19%
(*) It corresponds to the principal amount outstanding as of the indicated dates in thousands of Argentine Pesos.
(1)
(2)
12.31.11
On January 28, 2011, the Company issued and placed its Class XIII Notes for a total amount of US$ 200,000. Principal will be
paid in three annual installments. Such installments will be paid on January, 28, 2015, January 28, 2016 and January 28,
2017, respectively.
On June 14, 2011, the Company issued and placed its Class XIV Notes for a total amount of AR$ 99,852. This issuance was
carried out in two series: Series 1 for a total amount of AR$ 20,000 and Series 2 for a total amount of AR$ 79,852. Series 1
77
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 35 – NOTES (“OBLIGACIONES NEGOCIABLES”) (Continued)
(3)
(4)
(5)
(6)
(7)
principal was settled in one installment upon maturity, whereas Series 2 principal will be settled in three quarterly installments.
The first of them was paid on September 14, 2012 and the second one was paid on December 14, 2012.
On November 25, 2011, the Company issued and placed its Class XV Notes for a total amount of AR$ 65,160. Principal was
settled in one installment upon maturity.
On December 19, 2011, the Company issued and placed its Class XVI Notes for a total amount of US$ 35,109, which, as
specified by the issuance conditions, were converted into AR$ 150,347. This issuance was carried out in two series: Series 1
for a total amount of US$ 21,162 and Series 2 for a total amount of US$ 13,947. Series I principal was settled upon maturity,
whereas Series II principal will be also settled in one installment upon maturity.
On April 24, 2012, the Company issued and placed its Class XVII Notes for a total amount of AR$ 200,000. This issuance was
carried out in two series: Series 1 for a total amount of AR$ 34,610 and Series 2 for a total amount of AR$ 165,390. The
principal of both series will be settled in one installment upon maturity.
On August 7, 2012, the Company issued and placed its Class XVIII Notes for a total amount of AR$ 148,736. This issuance
was carried out in two series: Series 1 for a total amount of AR$ 46,421 and Series 2 for a total amount of AR$ 102,315. The
principal of both series will be settled in one installment upon maturity.
On October 30, 2012, the Company issued and placed its Class XIX Notes for a total amount of AR$ 165,325. This issuance
was carried out in two series: Series 1 for a total amount of AR$ 52,980 and Series 2 for a total amount of AR$ 112,345. The
principal of both series will be settled in one installment upon maturity.
Covenants Undertaken:
Furthermore, it is worth noting that in the Price Supplement of Class XIII Notes, the Company has
undertaken the following covenants, among others, with regard to the holders of such Notes:
(i)
The Company will not incur debt, unless at the date of incurring debt (a) the Total Liabilities to
Shareholders’ Equity Ratio does not exceed 6 to 1, (b) the Indebtedness to Shareholders’ Equity
Ratio does not exceed 4:1, and (c) after having incurred such debt, the Company’s shareholders’
equity is higher than AR$ 300,000.
(ii)
The Company will not levy any lien or else allow any lien to be levied, except for the Permitted Liens
(liens existing at the time of the issuance of Notes, their renewals and those liens set forth by the
law) with regard to all the other assets, when the total amount of the liens does not exceed 15% of
the Issuer's total assets for short-term debt and 10% of the Issuer’s total assets for long-term debt.
(iii) The Company will not be able to dispose of its assets, unless: (a) it receives a consideration at
market value, (b) 75% of the consideration is in cash, (c) the proceeds of the sale are used within
365 days to (i) pay off debt, (ii) make investments in capital assets in a related company, a permitted
business or a related business, or else (iii) reinvest or purchase additional assets.
In turn, in the Price Supplement of Class XIV, XVI, XVII, XVIII and XIX Notes, the Company has
undertaken the following covenant with regard to the holders of such Notes:
(i)
The Company will not levy any lien or else allow any lien to be levied, except for the Permitted Liens
—such liens existing at the date of the Price Supplement or those to be levied in the future with
regard to all the other assets—, when the total amount of the liens does not exceed 25% of the
Issuer’s total assets.
At the date of these financial statements, the Company has complied with the abovementioned covenants
undertaken.
78
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 36 – FOREIGN CURRENCY HEDGE CONTRACT
The Company has carried out hedging transactions by signing foreign currency hedge contracts to cover
its cash flows exposure arising from Class XIII and Class XVI, Series I and II, Notes, based on the
following:
Counterparty
Hedge Amount
as of 12.31.12 (In
Thousands of
AR$)
Hedge Amount
(In Thousands
of U.S. dollars)
Hedge Amount
as of 12.31.11
(In Thousands
of AR$)
Hedging
Expiration
Date
Banco de Galicia y Buenos Aires S.A.
25,000
-
108,287
01/31/2012
Banco de Galicia y Buenos Aires S.A.
10,000
-
43,315
01/31/2012
Banco de Galicia y Buenos Aires S.A.
10,000
-
43,315
01/31/2012
Banco de Galicia y Buenos Aires S.A.
25,000
-
109,150
02/28/2012
Banco de Galicia y Buenos Aires S.A.
10,000
-
43,660
02/28/2012
Banco de Galicia y Buenos Aires S.A.
10,000
-
44,010
03/30/2012
Banco de Galicia y Buenos Aires S.A.
10,000
-
44,010
03/30/2012
Banco Santander Río S.A.
10,000
-
44,390
04/30/2012
Banco de Galicia y Buenos Aires S.A.
30,000
-
133,170
04/30/2012
Banco de Galicia y Buenos Aires S.A.
20,000
-
89,601
05/31/2012
Banco de Galicia y Buenos Aires S.A.
10,000
-
44,801
05/31/2012
Banco de Galicia y Buenos Aires S.A.
25,000
-
112,001
05/31/2012
Banco de Galicia y Buenos Aires S.A.
10,000
-
45,483
06/29/2012
HSBC Bank Argentina S.A.
10,000
-
45,483
06/29/2012
Banco de Galicia y Buenos Aires S.A.
15,000
-
68,225
06/29/2012
Banco de Galicia y Buenos Aires S.A.
1,000
4,994
-
01/31/2013
Banco de Galicia y Buenos Aires S.A.
5,000
24,971
-
01/31/2013
Banco de Galicia y Buenos Aires S.A.
5,000
24,971
-
01/31/2013
Banco de Galicia y Buenos Aires S.A.
12,000
59,931
-
01/31/2013
Banco de Galicia y Buenos Aires S.A.
4,000
19,977
-
01/31/2013
Banco de Galicia y Buenos Aires S.A.
10,000
49,942
-
01/31/2013
Banco de Galicia y Buenos Aires S.A.
8,000
39,954
-
01/31/2013
Banco de Galicia y Buenos Aires S.A.
10,000
49,942
-
01/31/2013
Banco de Galicia y Buenos Aires S.A.
5,000
24,971
-
01/31/2013
Compañía Financiera Argentina S.A.
7,000
34,960
-
01/31/2013
Banco de Galicia y Buenos Aires S.A.
10,000
49,968
-
02/01/2013
Banco de Galicia y Buenos Aires S.A.
10,000
50,663
-
02/28/2013
Banco de Galicia y Buenos Aires S.A.
10,000
50,663
-
02/28/2013
Banco de Galicia y Buenos Aires S.A.
5,000
25,331
-
02/28/2013
Banco de Galicia y Buenos Aires S.A.
5,000
25,331
-
02/28/2013
Banco de Galicia y Buenos Aires S.A.
5,000
25,331
-
02/28/2013
79
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 36 - FOREIGN CURRENCY HEDGE CONTRACT (Continued)
Counterparty
Hedge Amount
(In Thousands
of U.S. dollars)
Hedge Amount
as of 12.31.12 (In
Thousands of
AR$)
Hedge Amount
as of 12.31.11 (In
Thousands of
AR$)
Hedging
Expiration
Date
Banco de Galicia y Buenos Aires S.A.
10,000
50,663
-
02/28/2013
Compañía Financiera Argentina S.A.
3,000
15,198
-
02/28/2013
Banco de Galicia y Buenos Aires S.A.
5,000
25,693
-
03/27/2013
Banco de Galicia y Buenos Aires S.A.
5,000
25,693
-
03/27/2013
Compañía Financiera Argentina S.A.
15,000
77,077
-
03/27/2013
Banco de Galicia y Buenos Aires S.A.
5,000
25,693
-
03/27/2013
Compañía Financiera Argentina S.A.
10,000
51,385
-
03/27/2013
Banco de Galicia y Buenos Aires S.A.
5,000
25,693
-
03/27/2013
Banco de Galicia y Buenos Aires S.A.
10,000
51,385
-
03/27/2013
Banco de Galicia y Buenos Aires S.A.
10,000
51,385
-
03/27/2013
Banco de Galicia y Buenos Aires S.A.
5,000
25,693
-
03/27/2013
Banco de Galicia y Buenos Aires S.A.
6,000
30,831
-
03/27/2013
Banco de Galicia y Buenos Aires S.A.
5,000
26,133
-
04/30/2013
Banco de Galicia y Buenos Aires S.A.
5,000
26,133
-
04/30/2013
1,070,555
1,018,901
TOTAL
In the contracts signed, the parties agree that the transaction will be settled without physical delivery of the
underlying currency. This means that these contracts shall be performed through the difference between
the spot exchange rate effective on the settlement date and the agreed forward exchange-rate, based on
the following: (i) if on the settlement date the spot exchange rate for the settlement is higher than the
agreed forward exchange rate, the counterparty undertakes to pay the Company an amount equivalent to
the above-mentioned exchange-rate difference, multiplied by the amount of foreign currency hedged, (ii) if
on the settlement date the spot exchange rate for the settlement is lower than the agreed forward exchange
rate, the Company undertakes to pay the counterparty an amount equivalent to the above-mentioned
exchange-rate difference, multiplied by the amount of foreign currency hedged; and (iii) if on the settlement
date the spot exchange rate for the settlement is the same as the agreed forward exchange rate, the
parties will not be entitled to make any claim whatsoever to each other.
As of December 31, 2011, the Company had recorded at present values AR$ 17,384 in liabilities, with a
contra account in the Statement of Income amounting to AR$ 25,108 to reflect changes in the accounting
measurement accrued to date.
As of December 31, 2012, the Company had recorded at present values AR$ 1,631 in liabilities and AR$
958 in assets, with a contra account in the Statement of Income amounting to AR$ 4,817 to reflect changes
in the accounting measurement accrued to date.
80
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 36 - FOREIGN CURRENCY HEDGE CONTRACT (Continued)
Memorandum Accounts
The Company had recorded AR$ 1,070,555 and AR$ 1,018,901 in memorandum accounts as of December
31, 2012 and 2011, respectively, corresponding to the face values pesified to date for the abovementioned
foreign currency hedging transactions agreed.
NOTE 37 – CASH AND CASH EQUIVALENTS – STATEMENT OF CASH FLOWS
12.31.2012 12.31.2011
In Thousands of AR$
124,628
135,866
289,170
302,323
413,798
438,189
Cash
Placements of Cash-equivalent Funds
Total
NOTE 38 - ADJUSTMENTS TO CALCULATE NET CASH FLOW AND CASH EQUIVALENTS FROM
OPERATING ACTIVITIES
12.31.2012 12.31.2011
In Thousands of AR$
Provision for Credit Losses
413,070
103,545
Provision for Contingencies, Net of Recoveries
(9,792)
(10,944)
Allowance for Long-term Investments in Companies
102
Provision for Social Security Charges
81,851
57,168
Provision for Fees Payable to Directors and Members of the Supervisory
Committee
8,800
7,311
Unsettled Loss Due to Change in Net Fair Value Adjustments on Derivative
and Hedging Activities
673
17,384
Foreign Exchange Loss
136,729
65,616
Loss from Investments in Associates, Joint Ventures and Other Companies
8,939
2,604
Net Loss as of 03.31.12– Tarjeta Mira S.A.
419
Decrease in Property, Plant and Equipment
25
20
Decrease in Intangible Assets
2
Depreciation of Property, Plant and Equipment
20,943
16,420
Amortization of Intangible Assets
10,231
5,514
Total
671,888
264,742
NOTE 39 – CHANGES IN OPERATING ASSETS
12.31.2012 12.31.2011
In Thousands of AR$
(2,147,375) (1,991,726)
(14,961)
(16,096)
(2,162,336) (2,007,822)
Increase in Receivables from Services
Increase in Other Receivables
Total
81
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 40 – CHANGES IN OPERATING LIABILITIES
Decrease in Compensation and Social Security Charges
Increase in Tax Charges
Income Tax Payments
Decrease in Other Liabilities
Decrease in Provisions
Total
12.31.2012 12.31.2011
In Thousands of AR$
(30,808)
(15,742)
35,740
26,637
(312,183) (216,269)
(5,330)
(6,098)
(150)
(312,581) (211,622)
NOTE 41 - CHANGES IN THE CORPORATE STRUCTURE
On August 17, 2011, the Company transferred to its controlling company, Tarjetas Regionales S.A., 8,270
shares, representing 82.7% of the capital stock of its subsidiary Cobranzas Regionales S.A. Consequently,
the Company held a 5% of the shares and voting rights in Cobranzas Regionales S.A.
Apart from that, on September 5, 2011, the Company decided to purchase from its controlling company,
Tarjetas Regionales S.A., 2,093,415 ordinary shares, representing 35.336% of the capital stock of Tarjetas
del Mar S.A. On September 7, 2011, at an Extraordinary Shareholders’ Meeting, Tarjetas del Mar S.A.’s
shareholders decided to spin off Tarjetas del Mar S.A. without dissolution thereof, allocating part of its
assets to the creation of a new spinned-off company under the name Tarjeta Mira S.A. Due to the
aforementioned spin-off, Tarjeta Naranja S.A. did not retain an interest in Tarjetas del Mar S.A., receiving in
exchange shares representing a 98% interest in the spinned-off company, Tarjeta Mira S.A.
On February 23, 2012, Tarjetas Regionales S.A. transferred to Tarjeta Naranja S.A. 42,656 shares,
representing 2% of the capital stock of Tarjeta Mira S.A. Consequently, Tarjeta Naranja S.A. held a 100%
interest in Tarjeta Mira S.A.’s shareholders’ equity.
On February 29, 2012, Dusner S.A. and Fedler S.A. transferred 480 shares, representing 20% of the
capital stock of Tarjeta Naranja S.A. to its controlling company, Tarjetas Regionales S.A. Consequently,
Tarjetas Regionales’s interest in the Company’s shareholders’ equity increased to 100%.
On March 8, 2012, the merger of Tarjeta Naranja S.A. (merging company) with Tarjeta Mira S.A. (merged
company), along with the merger plan, were approved. Such merger plan established that the merger
would be effective as from April 1, 2012.
Subsequently, on March 30, 2012, Tarjetas Regionales S.A. transferred to Tarjetas Cuyanas S.A. 24
shares, representing 1% of the capital stock of Tarjeta Naranja S.A. Accordingly, Tarjetas Regionales’s
interest in the capital stock of Tarjeta Naranja S.A. decreased to 99%.
On March 30, 2012, Tarjetas Regionales S.A. transferred to Tarjeta Naranja S.A. 32,333 shares,
representing 1% of the capital stock of Tarjetas Cuyanas S.A.
In June 2012, Tarjeta Naranja Dominicana S.A.’s shareholders decided to sell Banco Múltiple León S.A.
(holder of the remaining 50% interest in Tarjeta Naranja Dominicana S.A.’s capital stock) Tarjeta Naranja
Dominicana S.A.’s right related to customers and to start the liquidation of the company.
82
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 42 - TRANSACTIONS WITH COMPANIES AND RELATED PARTIES
st
Tarjeta Naranja S.A. is controlled by Tarjetas Regionales S.A., with legal domicile at Belgrano 1415, 1
floor, City of Mendoza, which holds 2,376 shares, representing a 99% interest in the capital stock. Banco
de Galicia y Buenos Aires S.A., with legal domicile at Tte. Gral. Juan D. Perón 407, Autonomous City of
Buenos Aires, has a 57.97% interest in Tarjetas Regionales S.A., while Galicia (Cayman) Ltd. —entity
controlled by Banco de Galicia y Buenos Aires S.A.— holds a 19.03% interest. In turn, Banco de Galicia y
Buenos Aires S.A. is controlled by Grupo Financiero Galicia S.A., with legal domicile at Tte. Gral. Juan D.
nd
Perón 456, 2 floor, Autonomous City of Buenos Aires, with a 94.93% interest.
Tarjetas Cuyanas S.A. is a corporation incorporated in Argentina, with domicile at Belgrano 1415, City of
Mendoza, Argentina, which holds 24 shares, representing 1% of the Company's capital stock.
The following are Tarjeta Naranja S.A.’s balances with related companies as of December 31, 2012:
Companies under Section 33 of Law No. 19550
Banco de Galicia y
Buenos Aires S.A.
Tarjetas Regionales
S.A.
Total
In Thousands of AR$
ASSETS
Cash and Cash Equivalents
Other Receivables
82,484
-
82,484
17,534
-
17,534
Total Current Assets as of 12.31.12
100,018
-
100,018
Total Assets as of 12.31.12
100,018
-
100,018
17,681
-
17,681
112,987
1,673
114,660
-
-
-
130,668
1,673
132,341
Bank and Financial Loans
57,502
55,000
112,502
Total Non-current Liabilities as of 12.31.12
57,502
55,000
112,502
188,170
56,673
244,843
LIABILITIES
Accounts Payable
Bank and Financial Loans
Other Liabilities
Total Current Liabilities as of 12.31.12
Total Liabilities as of 12.31.12
83
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 42 - TRANSACTIONS WITH COMPANIES AND RELATED PARTIES (Continued)
The following are Tarjeta Naranja S.A.’s balances with other related parties as of December 31, 2012:
Other Related Parties
Cobranzas
Regionales S.A.
TN Perú S.A.C.
Procesadora
Regional S.A.
Parque
Azul
S.R.L.
Tarjetas del
Mar S.A.
Compañía
Financiera
Argentina
Tarjeta Naranja
Dominicana S.A. (in
liquidation)
Total
In Thousands of AR$
ASSETS
Cash and Cash Equivalents
-
-
-
-
-
40,366
-
Other Receivables
999
-
-
31
Total Current Assets as of 12.31.12
999
-
-
31
Total Assets as of 12.31.12
999
-
-
Accounts Payable
-
3,871
392
Bank and Financial Loans
-
-
Other Liabilities
-
906
Total Current Liabilities as of 12.31.12
-
Total Liabilities as of 12.31.12
-
40,366
-
335
413
1,778
-
40,701
413
42,144
31
-
40,701
413
42,144
-
1,954
-
-
6,259
-
-
-
67
-
67
-
1,216
-
-
-
2,122
4,777
392
1,216
1,954
67
-
8,448
4,777
392
1,216
1,954
67
-
8,448
LIABILITIES
84
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 42 - TRANSACTIONS WITH COMPANIES AND RELATED PARTIES (Continued)
The following are the transactions carried out by Tarjeta Naranja S.A. with related companies during the
fiscal year ended December 31, 2012:
Companies under Section 33 of Law No. 19550
Banco de Galicia y Bs.
Tarjetas Regionales
As. S.A.
S.A.
In Thousands of AR$
REVENUES
Revenues from Services
Interest on Time Deposits and Interest-bearing Checking Accounts
Total as of 12.31.11
EXPENSES
Rentals
Bank Interest
Bank Expenses
Loss due to Change in Net Fair Value Adjustments on Derivative and
Hedging Activities
Collection Expenses
Total as of 12.31.12
85
296,445
11,241
307,686
-
337
24,329
4,293
4,718
-
4,440
1,946
35,345
4,718
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 42 - TRANSACTIONS WITH COMPANIES AND RELATED PARTIES (Continued)
The following are the transactions carried out by Tarjeta Naranja S.A. with other related parties during the fiscal year ended December
31, 2012:
Other Related Parties
Cobranzas
Regionales
S.A.
Galicia Seguros
S.A.
Parque
Azul
S.R.L.
Key
Management
Staff
Golden
S.A.
Tarjeta Naranja
Dominicana
S.A. (in
liquidation)
Compañía
Financiera
Argentina
Colores
S.A.
Procesadora
Regional S.A.
In Thousands of AR$
REVENUES
Revenues from Services
Revenues from Financing
Interest on Time Deposits and
Interest-bearing Checking
Accounts
Total as of 12.31.12
EXPENSES
Expenses from Services
Rentals
Professional Fees
Loss due to Change in Net Fair
Value Adjustments on Derivative
and Hedging Activities
Salaries
Total as of 12.31.12
73
-
30,957
-
668
474
-
-
-
-
654
-
-
-
-
-
-
-
-
6,862
-
-
73
30,957
1,142
-
-
-
6,862
654
-
33,600
-
-
-
1,000
-
302
-
-
-
2,916
-
-
-
-
-
-
-
77
-
-
-
-
-
4,764
-
-
-
-
-
33,600
-
-
4,764
1,000
302
77
-
2,916
86
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 42 - TRANSACTIONS WITH COMPANIES AND RELATED PARTIES (Continued)
The following are Tarjeta Naranja S.A.’s balances with related companies as of December 31, 2011:
Companies under Section 33 of Law No. 19550
Banco de
Galicia y
Buenos Aires
S.A.
ASSETS
Cash and Cash Equivalents
Investments
Other Receivables
Total Current Assets as of 12.31.11
Total Assets as of 12.31.11
LIABILITIES
Accounts Payable
Bank and Financial Loans
Total Current Liabilities as of 12.31.11
Bank and Financial Loans
Total Non-current Liabilities as of 12.31.11
Total Liabilities as of 12.31.11
Tarjeta
Naranja
Dominicana
S.A.
In Thousands of AR$
Total
35,706
252,301
13,886
301,893
301,893
1,168
1,168
1,168
35,706
252,301
15,054
303,061
303,061
18,307
62,942
81,249
11,448
11,448
92,697
774
774
774
19,081
62,942
82,023
11,448
11,448
93,471
The following are Tarjeta Naranja S.A.’s balances with other related parties as of December 31, 2011:
Other Related Parties
Parque
Azul
S.R.L.
Cobranzas
Regionales
S.A.
Procesadora
Regional
S.A.
TN Perú
S.A.C.
Tarjetas del
Mar S.A.
Total
In Thousands of AR$
ASSETS
Other Receivables
Total Current Assets as of
12.31.11
-
-
152
-
5,859
6,011
-
-
152
-
5,859
6,011
Total Assets as of 12.31.11
-
-
152
-
5,859
6,011
1,626
LIABILITIES
Accounts Payable
2,920
-
79
99
4,724
Other Liabilities
Total Current Liabilities as of
12.31.11
-
52
-
-
-
52
1,626
2,972
-
79
99
4,776
Total Liabilities as of 12.31.11
1,626
2,972
-
79
99
4,776
87
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 42 - TRANSACTIONS WITH COMPANIES AND RELATED PARTIES (Continued)
The following are the transactions carried out by Tarjeta Naranja S.A. with related companies during the
fiscal year ended December 31, 2011:
Companies under Section 33 of Law
No. 19550
Banco de Galicia
y Bs. As. S.A.
Tarjeta Naranja
Dominicana S.A.
In Thousands of AR$
REVENUES
Revenues from Services
Interest on Time Deposits and Interest-bearing Checking Accounts
Total as of 12.31.11
318,971
816
43,551
-
362,522
816
289
-
EXPENSES
Rentals
Professional Fees
-
-
11,613
-
Bank Expenses
2,462
-
Other Financial Expenses
Loss due to Change in Net Fair Value Adjustments on Derivative and Hedging
Activities
1,572
-
24,069
-
Collection Expenses
978
-
Total as of 12.31.11
40,983
-
Bank Interest
88
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 42 - TRANSACTIONS WITH COMPANIES AND RELATED PARTIES (Continued)
The following are the transactions carried out by Tarjeta Naranja S.A. with other related parties during the fiscal year ended December
31, 2011:
Other Related Parties
Compañía
Financiera
Argentina
Parque
Azul
S.R.L.
Key
Management
Staff
Tarjetas
del Mar
S.A.
Golden
S.A.
Tarjetas
Cuyanas
S.A.
Cobranzas
Regionales
S.A.
Galicia
Seguros
Procesadora
Regional
S.A.
Colores
S.A.
In Thousands of AR$
REVENUES
Revenues from Services
-
510
-
-
453
3,433
36
13,719
-
Revenues from Financing
Interest on Time Deposits and Interest-bearing Checking
Accounts
-
457
-
-
-
-
-
-
-
-
5,017
-
-
-
-
-
-
-
-
-
Total as of 12.31.11
5,017
967
-
-
453
3,433
36
13,719
-
Rentals
-
-
-
779
-
-
-
-
229
Service Fees
-
-
-
-
319
-
-
-
-
Professional Fees
-
-
-
-
-
-
12,970
-
-
Salaries
-
-
3,354
-
-
-
-
-
-
Total as of 12.31.11
-
-
3,354
779
319
-
12,970
-
229
-
EXPENSES
89
1,931
1,931
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 43 - RESTRICTED ASSETS
Liens in Force as of December 31, 2012
Liens for a total amount of AR$ 596 have been levied on funds deposited in checking accounts opened by
the Company at several financial institutions. Since the appropriate defenses have been filed during such
legal proceedings to safeguard the Company’s interests, the seized funds have been included in these
financial statements under “Other Receivables”.
Furthermore, the Company has paid AR$ 350 as guarantees regarding certain tax issues. Since: i) these
funds will not be available for the Company until the legal actions requiring said guarantees are finally
settled, and ii) the Company’s management has filed all the defense actions granted by applicable laws to
safeguard the Company's interests, these funds have been included in these financial statements under
the caption "Other Receivables".
Guaranty in respect of Bank Loans in Force as of December 31, 2012
Tarjeta Naranja S.A. has guaranteed the repayment of certain loans granted by several financial institutions
(see Note 33) through the Company's collection accounts. Under the terms of said guaranties, the funds
held in those accounts must be allocated in a certain fixed order, in the first place, to the payment of
principal and interest under the relevant loans, on the applicable payment dates. Said procedure will
remain in force until the abovementioned loans are repaid in full. As of December 31, 2012, the outstanding
principal amount corresponding to the loans guaranteed as explained above amounts to AR$ 73,700.
On the other hand, there are other restrictions, as described in Note 33 above, for loan agreements entered
into with Banco Itaú Argentina S.A., Banco Supervielle S.A., the Syndicate of Banks and Banco Comafi
S.A., and such restrictions indicated in Note 35 above, for Class XIII, XIV, XVI, XVII, XVIII and XIX Notes
(“Obligaciones Negociables”).
The Company’s Ordinary and Extraordinary Shareholders’ Meeting held on March 16, 2006 resolved to
define the following policy for the distribution of dividends: a) to keep under Undistributed Profits, those
retained earnings corresponding to fiscal years prior to 2005 and, therefore, not to distribute them as
dividends, and b) to set the maximum limit for the distribution of dividends at 25% of the realized and liquid
profits of each fiscal year as from fiscal year 2005. These restrictions shall remain in force as long as the
Company's shareholders’ equity is below AR$ 300,000. Thus, the policy for the distribution of dividends
approved by the Company’s Board of Directors at its meeting held on January 4, 2006, has been ratified.
Furthermore, in the Price Supplement of Class XIII Notes, the Company agreed not to distribute dividends:
i) that exceed 50% of the Company’s net income accrued since January 1, 2011 plus the net income
accrued during the fiscal year ended December 31, 2010, and ii) when (a) the Total Liabilities to
Shareholders’ Equity Ratio does not exceed 6 to 1, (b) the Indebtedness to Shareholders’ Equity Ratio
does not exceed 4:1.
90
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 44 – TARJETA NARANJA S.A.’S INVESTMENTS ABROAD
Republic of Peru:
On July 6, 2011, the Company purchased 240 shares of Tarjeta Naranja Perú S.A.C., what represents a
24% stake in this company.
Tarjeta Naranja Perú is a company duly incorporated under the laws of Peru, which sole purpose is to
develop the “Tarjeta Naranja” business model for the promotion and business and operational
management of a credit card to be issued and marketed in Peru by Banco de Crédito del Perú. This credit
card will be targeted at mass consumption segments.
Tarjeta Naranja Perú S.A.C. started its business activities in the Republic of Peru in September 2011. For
that purpose, Tarjeta Naranja S.A. made a first capital contribution on September 14, 2011, for the amount
of AR$ 1,288; and a second capital contribution of AR$ 5,784 on September 16, 2011.
On December 15, 2011 and on May 17, 2012, Tarjeta Naranja Perú S.A.C.’s shareholders held a General
Shareholders’ Meeting where the following decisions, among others, were made: i) capital increase through
capitalization of other receivables in favor of the company, and ii) capital increase through new
contributions.
Accordingly, Tarjeta Naranja S.A. made a capital contribution amounting to AR$ 3,031 in December 2011
and amounting to AR$ 6,975 in May 2012.
On September 13, 2012, Tarjeta Naranja Perú S.A.C.’s shareholders held a General Shareholders’
Meeting, whereat they agreed to increase capital and to capitalize other receivables in favor of the
company in the amount of AR$ 10,579.
At the date of these financial statements, the capital contributions described above had been paid in.
NOTE 45 – PORTFOLIO ASSIGNMENT
On April 1, 2012, Tarjeta Naranja S.A. (the “Company”), in its capacity as assignor, entered into an
Agreement for the Assignment of Loan Portfolio with Tarjetas del Mar S.A., as assignee, through which the
Company assigned, sold and transferred the ownership of the loans held by it to the assignee, for an
amount of AR$ 9,245, at a price of AR$ 2,779.
91
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 46 – INFORMATION ABOUT EXPENSES AND THEIR ALLOCATION UNDER SECTION 64
SUBSECTION B) OF LAW 19550
Items
Totals as of
12.31.2012
Administrative
Expenses
Marketing
Expenses
Totals as of
12.31.2011
In Thousands of AR$
Directors and Supervisory Committee Members' Fees
8,800
8,800
-
7,311
77,493
24,023
53,470
51,213
Compensation and Social Security Charges
661,798
161,787
500,011
429,465
Taxes, Rates and Contributions
285,077
79,320
205,757
185,339
Transportation Expenses
29,378
8,462
20,916
25,168
Maintenance of Equipment and Real Property
22,366
22,366
-
13,118
Depreciation of Property, Plant and Equipment
20,943
14,660
6,283
16,420
Amortization of Intangible Assets
10,231
10,231
-
5,514
Rentals
36,747
1,699
35,048
26,322
Stationery and Office Supplies
12,456
2,252
10,204
9,426
Opening of Accounts
15,908
-
15,908
10,732
106,428
-
106,428
80,295
898
898
-
648
Bonuses for the Staff
Publicity and Advertising
Donations
Electricity, Natural Gas and Communications
26,987
9,632
17,355
17,804
Third Parties’ Fees
49,982
45,388
4,594
38,700
Insurance and Security Services
40,657
1,214
39,443
25,838
8,712
8,712
-
6,034
Regular Mail Services
Expenses for Commercial Reports and Procedures for the
Collection of Amounts in Arrears
18,144
5,625
12,519
10,010
30,471
30,471
-
12,365
Collection Expenses
51,199
51,199
-
35,567
1,288
1,288
-
302
General Expenses
99,146
24,730
74,416
71,467
Magazine Expenses
Printing and Distribution of Statements and Payments to
Merchants ("Comercios Amigos")
22,317
22,317
-
10,131
83,946
-
83,946
64,034
Cleaning Expenses
9,532
1,469
8,063
6,041
Special Promotions
8,723
-
8,723
5,109
Expenses from Call Center Services
52,935
52,744
191
25,966
Cell Phone Text Message Services
14,486
37
14,449
9,909
1,807,048
589,324
1,217,724
383,835
816,413
Bank Expenses
Other Card Administrative Expenses
Totals as of 12.31.12
(1)
Totals as of 12.31.11
(1)
(1)
1,200,248
Total marketing and administrative expenses correspond with the amount of the lines “Expenses from Services” and “Total Operating
Expenses” in the Statement of Income.
92
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2012 and 2011
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 47 – SUBSEQUENT EVENTS
On December 19, 2012, the Company’s Board of Directors approved the issuance of Class XX Notes
(“Obligaciones Negociables”) under the Global Program for the Issuance of Short-, Mid- and/or Long-Term
Notes (“Obligaciones Negociables”) for a maximum outstanding amount of up to US$ 650,000 (or its
equivalent in other currencies). The notes to be issued will be called Class XX Notes (“Obligaciones
Negociables”), in two series, Series I and II. The total global face value of Notes (“Obligaciones
Negociables”) may reach the maximum amount of up to AR$ 250,000.
93
Tarjeta Naranja S.A.
Additional Information to the Notes to the Financial Statements
as of December 31, 2012
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
1. LEGAL SYSTEMS
There are no significant or specific legal systems entailing contingent expiration or resurgence
of benefits envisaged by those regulations.
2. COMPANY ACTIVITIES
Indicators of the Company’s activities are described in the Summary of Activity.
3. CLASSIFICATION OF BALANCES OF RECEIVABLES FROM SERVICES AND OTHER
RECEIVABLES BY MATURITY DATE
a) Past-due Receivables from Services and Other Receivables as of December 31, 2012.
Before 12.31.11
Between 12.31.11 and 06.30.12
Between 06.30.12 and 09.30.12
Between 09.30.12 and 11.30.12
Between 11.30.12 and 12.31.12
Subtotal
Allowance for Credit Losses (1)
Total Past-due Receivables
Receivables from
Other
Services
Receivables
In Thousands of AR$
18,600
220,692
137,751
111,691
176,692
15
665,426
15
(384,183)
281,243
15
(1) The difference of AR$ 127,132 with respect to the total allowance for credit losses for AR$ 511,315 corresponds to a
global allowance for the (undue) performing commercial portfolio.
b) Other Receivables and Deferred Income Tax Assets with No Fixed Term as of December
31, 2012.
No Fixed Term
Other
Deferred Income
Receivables
Tax Assets
In Thousands of AR$
4,589
138,841
94
Tarjeta Naranja S.A.
Additional Information to the Notes to the Financial Statements
as of December 31, 2012 (Continued)
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
c) Receivables from Services and Other Receivables to Become Due as of December 31,
2012.
Receivables
Other
from Services
Receivables
In Thousands of AR$
Current
03.31.13
06.30.13
09.30.13
12.31.13
Non-current
4,112,090
1,335,264
690,047
330,982
55,779
3,908
3,909
3,908
173,499
38,075
4. CLASSIFICATION OF DEBT BALANCES BY MATURITY DATE
a) Past-due Debts as of December 31, 2012.
There are no past-due debts as of December 31, 2012.
b) Debts with No Fixed Term as of December 31, 2012.
As of December 31, 2012, we have AR$ 8 of qualification bonds received from Directors, as
required by Law No. 19550.
c) Debts to Become Due as of December 31, 2012.
Accounts
Payable
Current
03.31.13
06.30.13
09.30.13
12.31.13
Non-current
3,410,404
145,043
15
50
-
Compensation
and Social
Tax
Security
Charges
Charges
In Thousands of AR$
Bank and
Financial
Loans
210,906
274,897
179,150
317,496
1,340,053
140,715
25,138
-
95
110,218
-
Provision
for Income
Tax
30,404
-
Other
Liabilities
3,347
7,880
-
Tarjeta Naranja S.A.
Additional Information to the Notes to the Financial Statements
as of December 31, 2012 (Continued)
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
5. CLASSIFICATION OF RECEIVABLES FROM SERVICES, OTHER RECEIVABLES AND
DEFERRED INCOME TAX ASSETS BY THEIR FINANCIAL EFFECTS
a)
Receivables from Services, Other Receivables and Deferred Income Tax Assets in
Argentine Pesos and U.S. dollars.
Receivables
from Services
Other
Receivables
In Thousands of AR$
7,305,064
107,950
(511,281)
-
In Argentine Pesos
Allowance for Credit Losses AR$
In Foreign Currency
Allowance for Credit Losses US$
2,244
(34)
Deferred
Income Tax
Assets
138,841
-
2, 233
-
-
b)
The balances of Receivables from Services, Other Receivables and Deferred Income
Tax Assets are not subject to any adjustment clause.
c)
Interest-bearing and Non-interest bearing Receivables from Services, Other Receivables
and Deferred Income Tax Assets.
Deferred
Income Tax
Assets
In Thousands of AR$
Receivables
from Services
Other
Receivables
Interest-bearing Balances
3,148,036
-
-
Non-interest Bearing Balances
4,159,272
110,183
138,841
96
Tarjeta Naranja S.A.
Additional Information to the Notes to the Financial Statements
as of December 31, 2012 (Continued)
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
6. CLASSIFICATION OF DEBTS BY THEIR FINANCIAL EFFECTS
a) Debts to Become Due in Argentine Pesos and U.S. dollars.
Accounts
Payable
In Argentine
Pesos
In Foreign
Currency
Bank and
Financial
Loans
Compensation
Tax
and Social
Charges
Security Charges
In Thousands of AR$
Provision
Other
for Income
Liabilities
Tax
3,555,081
1,242,336
165,853
110,218
30,404
11,235
431
1,080,166
-
-
-
-
b) Debt balances are not subject to any adjustment clause.
c) Interest-bearing and Non-interest bearing Debts.
Bank and
Financial
Loans
Accounts
Payable
Compensation
and Social
Security Charges
Provision
Other
for Income
Liabilities
Tax
Tax
Charges
In Thousands of AR$
Interest-bearing
Balances
Non-interest
Bearing Balances
-
2,274,119
-
-
-
-
3,555,512
48,383
165,853
110,218
30,404
11,235
7. INVESTMENT IN COMPANIES
The Company holds a 5% interest in Cobranzas Regionales S.A., a 24% interest in Tarjeta
Naranja Perú S.A.C. and a 1% interest in Tarjetas Cuyanas S.A.
97
Tarjeta Naranja S.A.
Additional Information to the Notes to the Financial Statements
as of December 31, 2012 (Continued)
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
8. RECEIVABLES FROM OR LOANS GRANTED TO DIRECTORS AND SUPERVISORY
COMMITTEE MEMBERS
As of December 31, 2012, there are advances to directors and supervisory committee
members for AR$ 920, but there are no receivables from or loans granted to supervisory
committee members and supervisory committee members’ and directors' relatives up to the
second grade of consanguinity, except for the regular use of their credit cards.
9. INVENTORY
The Company does not have any inventories.
10. VALUATION OF INVENTORIES
The Company does not have any inventories.
11. TECHNICAL REVALUATION OF PROPERTY, PLANT AND EQUIPMENT
The Company does not have any property, plant and equipment that have been technically
revaluated.
12. OBSOLETE PROPERTY, PLANT AND EQUIPMENT
The Company does not have any obsolete property, plant and equipment bearing book value.
13. INVESTMENT IN OTHER COMPANIES
There are no investments in companies in excess of the maximum value set forth by Section
31 of the Argentine Commercial Companies Law.
14. RECOVERABLE VALUES
The recoverable value of property, plant and equipment is their value in use determined by
the possibility of absorbing depreciation charges with the income reported by the Company.
98
Tarjeta Naranja S.A.
Additional Information to the Notes to the Financial Statements
as of December 31, 2012 (Continued)
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
15. INSURANCE
The following are the insurance policies hired by the Company.
INSURANCE
POLICY No.
INSURANCE
COMPANY
INSURANCE TYPE
EXPIRATION
DATE
INSURED
AMOUNT
(In Thousands)
BOOK VALUE
1751064
ACE SEGUROS
Group Life Insurance
Agreement 130/75 (by
employee)
40000047
ZURICH
Personal Accident Insurance
(by employee)
Monthly
Renewal
160012595
ZURICH
04/15/2013
AR$ 10,000
-
10285783
ZURICH
04/15/2013
AR$ 250
-
10285783
ZURICH
Civil Liability Insurance
Insurance against Fire (Merlo
2165, Castelar, Province of
Buenos Aires).
Insurance against Fire
(Sebastian Costa 567, Tres
Arroyos, Province of Buenos
Aires).
04/15/2013
AR$ 451
-
358724
NACION
Motorbike Insurance
04/15/2013
AR$ 10,000
-
100184
Galicia Vida S.A.
Credit Insurance
Monthly
Renewal
-
-
500605
Galicia Vida S.A.
Group Life Insurance required
by Law
Monthly
Renewal
-
-
616640
Cauciones S.A.
Surety for the Finance Ministry
of the Province of Córdoba
Annual Renewal
AR$ 1,004
-
260011152
ZURICH
08/04/2013
US$ 16,000
-
81221912
ZURICH
Construction and Assembly
Homeowners Insurance Policy
(Rosario) Gral Juan M.
Pueyrredon 346/348
04/05/2013
AR$ 850
-
135048
NACION
Operational All Risk Policy /
Theft
04/15/2013
AR$ 266,773
-
99
Monthly
Renewal
AR$ 47
-
AR$ 500
-
Tarjeta Naranja S.A.
Additional Information to the Notes to the Financial Statements
as of December 31, 2012 (Continued)
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
16. ALLOWANCES
Current allowances exceed 2% of shareholders’ equity. Under IFRS, for the calculation of the
allowance for credit losses, the Company analyzes the historical losses of its portfolio in order
to estimate the losses related to receivables from services incurred as of the date of the
financial statements, but that have not been individually identified, according to the guidelines
set out in IAS 39. In addition, the historical ratios are adjusted, if appropriate, to include recent
information that reflects the economic conditions as of the closing date of the financial
statements, trends of behavior in the industry, geographic or customer concentrations in each
portfolio segment and any other information that could affect the estimation of the allowance
for credit losses related to receivables from services. Several factors may affect
Management’s estimation of the allowance for credit losses, including the volatility of the
likelihood of loss, migrations and estimates of the severity of losses.
17. CONTINGENCIES
There are no significant contingent situations as of December 31, 2012, which have not been
given accounting recognition.
18. DIVIDENDS ON PREFERRED SHARES
There are no preferred shares.
19. RESTRICTIONS ON THE DISTRIBUTION OF UNDISTRIBUTED PROFITS
Restrictions on the distribution of undistributed profits are detailed in notes 33 and 43 to the
financial statements as of December 31, 2012.
100
Tarjeta Naranja S.A.
Summary of Activity
as of December 31, 2012
(Free Translation from the Original in Spanish for Publication in Argentina)
As of December 31, 2012, we have 2.3 million open accounts, thus achieving a 12.4% growth when
compared to the previous year. These customers made more than 102 million purchases during the fiscal
year, what represents a 19% increase when compared to the previous year. If we measure the average
consumption per active account during such period, there was a 22% increase at current values.
Also, these operating indicators were accompanied by very good economic results.
Income before income tax was higher than AR$ 663 million, and shareholders’ equity exceeded AR$ 1,559
million.
Financial Aspects
Within the framework of the Global Program for the Issuance of Notes (“Obligaciones Negociables”), in
April we issued Class XVII Notes for a total of AR$ 200 million. We also issued Class XVIII totaling AR$
148.7 million and Class XIX totaling AR$ 165.3 million.
Additionally, during the period loans were borrowed in the amount of AR$ 423 million, out of which AR$ 55
million was borrowed from the controlling company and the remainder from banks.
Throughout the period, loans and checking account overdrafts were renewed in the amount of AR$ 187
million and payments on account of amortization of principal and interest related to Bank Loans, Notes
(“Obligaciones Negociables”), and Financial Leases were made in the amount of AR$ 474.6 million and
US$ 42 million.
Evolution
During 2012, Tarjeta Naranja increased its presence in the Autonomous City of Buenos Aires (CABA as
per its initials in Spanish) and Greater Buenos Aires (GBA as per its initials in Spanish), by adding eight
new branches: four in CABA and four in GBA.
Naranja’s presence was also expanded in the Province of Buenos Aires, especially in the Atlantic Coast as
from the merger of Tarjeta Mira S.A., a member of the Tarjetas Regionales Group. This process
contributed to the opening of nine new branches in the districts of Azul, Olavarría, Balcarce, Dolores,
Miramar, Villa Gesell, Coronel Suárez and Mar del Plata.
In the so-called “mature areas”, we opened new stores in Termas de Río Hondo (Santiago del Estero),
Gualeguay (Entre Ríos), Clorinda (Formosa), Monteros (Tucumán), Virasoro (Corrientes) and Mina Clavero
(Córdoba). We also added points of sale in the districts of Joaquín V. González, Cafayate and Güemes
(Salta) and Ituzaingó (Corrientes).
In Peru, in association with Banco de Crédito del Perú (BCP), the main private bank in that country, we
already have nine branches in Lima, employing 386 workers with over 33,000 active cards. In turn, in the
Dominican Republic, it was resolved to sell Tarjeta Naranja Dominicana S.A.’s right related to customers to
Banco Múltiple León S.A. (holder of the remaining 50% interest in Tarjeta Naranja Dominicana S.A.’s
capital stock). Thus, operations were discontinued in that country.
In 2012, we began the construction of the new building where the headquarters will be set up in Córdoba
city, reaching a 30% progress at the end of December.
101
Tarjeta Naranja S.A.
Summary of Activity
as of December 31, 2012 (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
Changes in Tarjeta Naranja S.A.’s Corporate Structure
In February 2012, Dusner S.A. and Fedler S.A. transferred 480 shares, representing 20% of the capital
stock of Tarjeta Naranja S.A. to its controlling company, Tarjetas Regionales S.A. Subsequently, Tarjetas
Regionales S.A. transferred to Tarjeta Cuyanas S.A. 24 shares, representing 1% of the capital stock of
Tarjetas Naranja S.A.
Accordingly, at fiscal year-end, Tarjetas Regionales owned 99% and Tarjetas Cuyanas S.A. owned the
remaining 1% of Tarjeta Naranja S.A.’s capital stock.
Outlook
In the coming year, we will strive to continue consolidating the market presence and share in the Province
of Buenos Aires and the Autonomous City of Buenos Aires, and continue being the leader in the provinces.
TARJETA NARANJA S.A.’S COMPARATIVE STATISTICAL DATA AS OF DECEMBER 31, 2012 AND
2011
(This information is not within the scope of the Independent Auditors’ Report)
TARJETA NARANJA S.A.’S USERS
12.31.12
Open Accounts (in thousands)
Monthly Average Consumption by Active
Account (AR$ at face value)
12.31.11
2,331
2,073
932
761
TARJETA NARANJA S.A.’S STORES
12.31.12
12.31.11
Transactions within the Last Quarter (in
thousands)
27,839
23,573
Average Fee
2.70%
2.89%
NUMBER OF AUTHORIZED CREDIT CARDS (in thousands) FOR TARJETA NARANJA S.A.
Tarjeta Naranja
Visa
12.31.12
3,427
12.31.11
3,097
2,348
1,822
478
422
32
30
Mastercard
Amex
102
Tarjeta Naranja S.A.
Summary of Activity
as of December 31, 2012 (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
COMPARATIVE CHART OF FINANCIAL POSITION (in thousands of AR$)
Both fiscal years have been prepared under IFRS (see Note 2.4 about reconciliation)
12.31.12
Current Assets
12.31.11
7,130,919
5,382,589
639,338
449,596
Assets
7,770,257
5,832,185
Current Liabilities
4,855,671
3,569,497
Non-current Liabilities
1,355,410
1,036,753
Liabilities
6,211,081
4,606,250
Shareholders’ Equity
1,559,176
1,225,935
Attributable to the Company's Shareholders
1,559,176
1,225,637
-
298
Non-current Assets
Attributable to the Non-controlling Interest
COMPARATIVE CHART OF STATEMENTS OF INCOME (in thousands of AR$)
Both fiscal years have been prepared under IFRS (see Note 2.4 about reconciliation)
12.31.12
12.31.11
Total Operating Income
2,635,248
1,843,421
Total Operating Income, Net of Provision for Credit Losses
2,269,380
1,785,249
(1,597,029)
(1,055,894)
(8,939)
(2,604)
663,412
726,751
(231,803)
(252,083)
Net Income for the Fiscal Year
431,609
474,668
Net Income Attributable to the Company’s Shareholders
431,609
474,693
-
(25)
1,930
225
433,539
474,893
Total Operating Expenses
Loss from Investments in Associates, Joint Ventures and
Other Companies
Income before Income Tax
Income Tax
Net Loss Attributable to Non-Controlling Interest
Reserve for Translation Differences Related to Foreign
Operations
Total Comprehensive Income for the Fiscal Year
103
Tarjeta Naranja S.A.
Summary of Activity
as of December 31, 2012 (Continued)
(Free Translation from the Original in Spanish for Publication in Argentina)
RATIOS
Liquidity
Indebtedness
Solvency
Tied-up Capital
Profitability for the Fiscal Year
12.31.12
1.469
3.984
0.251
0.082
0.310
104
12.31.11
1.508
3.757
0.266
0.077
0.461
(Free Translation from the Original in Spanish for Publication in Argentina)
REPORT OF THE SUPERVISORY COMMITTEE
To the Directors and Shareholders of
Tarjeta Naranja S.A.
Legal Domicile: Sucre 151
CÓRDOBA-ARGENTINA
1.
In our capacity as members of the Supervisory Committee, we have examined Tarjeta Naranja S.A.’s
financial statements as of December 31, 2012, which include the Annual Report, the Inventory, the
Statement of Financial Position as of December 31, 2012, the Statement of Income, the Statement of
Other Comprehensive Income, and the Statements of Changes in Shareholders’ Equity and Cash Flows
for the fiscal year ended December 31, 2012, and explanatory and supplementary notes. The
preparation and issuance of those financial statements are the responsibility of the Company.
2. The Company’s Board of Directors is responsible for the preparation and fairly presentation of these
financial statements in accordance with International Financial Reporting Standards (IFRS), adopted
by the Argentine Federation of Professional Councils in Economic Sciences (FACPCE) as professional
accounting standards and added by the National Securities Commission (C.N.V.) to its regulations, as
approved by the International Accounting Standards Board (IASB).
Our responsibility is to express a conclusion based on the examination we performed with the scope
specified in paragraph 3 below.
3. Our examination was carried out in accordance with standards applicable in Argentina to members of
the Supervisory Committee. These standards require our examination to be performed in accordance
with the professional auditing standards applicable in Argentina and include verifying the fairness of
the relevant information disclosed in the documents examined and its consistency with the remaining
information concerning corporate decisions we have learnt about, as disclosed in minutes, and the
conformity of those decisions with the law and the bylaws insofar as concerns formal and documental
aspects. For purposes of our professional work, we have reviewed the work performed by the external
auditors of Tarjeta Naranja S.A., Price Waterhouse & Co. S.R.L., who issued their audit report on
February 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 – within the scope mentioned above – Tarjeta Naranja S.A.’s financial statements
present fairly, in all material respects, the financial position as of December 31, 2012, the operating
income, the changes in the shareholders' equity and the cash flows for the year then ended, in
accordance with International Financial Reporting Standards. Those financial statements give
consideration to all significant facts and circumstances which are known to us. As regards the
Board of Directors’ Annual Report, the Report on the Degree of Compliance with the Code on
Corporate Governance and the Summary of Activity and Additional Information, we have no
observations to make, and the assertions on future events are the exclusive responsibility of the
Board of Directors. In compliance with the legality control that is part of our field of competence,
we have no observations to make.
Furthermore, we report the following: a) the accompanying financial statements and the
corresponding inventory stem from accounting records kept, in all formal aspects, in compliance
with legal regulations prevailing in Argentina; b) as called for by 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 applied, these standards include independence requirements, and
contain no observations relative to the application of said professional accounting standards, and
c) we have applied the money laundering abatement and anti-terrorist financing procedures, as
prescribed in the respective professional standards issued by the Argentine Federation of
Professional Councils in Economic Sciences.
Córdoba, February 13, 2013.
________________________
Jorge F. Gregorat
For the Supervisory Committee
2