Tarjeta Naranja S.A.
Financial Statements
For the fiscal year commenced January 1, 2014 and ended December 31,
2014, presented on a comparative basis.
(Free Translation from the Original in Spanish for Publication in Argentina)
Tarjeta Naranja S.A.
(Free Translation from the Original in Spanish for Publication in Argentina)
Financial Statements
For the fiscal year commenced January 1, 2014 and ended December 31, 2014, presented on a
comparative basis.
Table of Contents
Annual Report
Statement of Income
Statement of Other Comprehensive Income
Statement of Financial Position
Statement of Changes in Shareholders’ Equity
Statement of Cash Flows
Notes to the Financial Statements
Additional Information to the Notes to the Financial Statements as required by Section 12 of
Chapter III, Title IV, of the Amended Regulations of the National Securities Commission (C.N.V.)
(N.T. 2013).
Summary of Activity
Independent Auditors’ Report
Supervisory Committee’s Report
2014 Annual Report
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, for
the 20th fiscal year of the Company, ended December 31, 2014.
FINANCIAL CONDITION
(Information Presented in Thousands of Pesos)
During FY 2014, Tarjeta Naranja kept its leadership position in the credit card market in
Argentina. Statistics and market research place it in a privileged position: Tarjeta Naranja S.A. is
the main issuer of credit cards, whereas Tarjeta de Crédito Naranja is the leading brand in the
interior of the country.
This year open accounts exceeded 2.5 million and taking into consideration additional
cardholders, the Company has 3.7 million customers. Meanwhile, the number of authorized
cards is 7.4 million, including Tarjeta Naranja, Tarjeta Naranja Visa, Tarjeta Naranja Mastercard
and Tarjeta Naranja American Express. In turn, transactions increased by 3% and average
consumption by open account increased by 31%, as compared to the prior year.
At the end of fiscal year 2014, net operating income amounted to AR$ 4,102,058, representing
a 20% increase as compared to 2013. Such income is explained by the 24% increase in net
income from services and the 2% increase in net income from financing. The latter is affected
by the high financial cost, particularly that of foreign-currency debt.
Operating expenses increased by 24% as compared to the prior year, mainly due to the rise in
labor costs changed by trade union agreements, the increase in tax disbursements and rates,
and other operating expenses.
As a result, net income increased by 26%, as compared to 2013, and at fiscal year-end, net
income amounted to AR$ 619,025.
The shareholders’ equity at year-end amounted to AR$ 2,430,759 and the distribution of
dividends for AR$ 125,000 was approved at the Ordinary Shareholders’ Meeting held on April 4,
2014.
SOURCES OF FINANCING
Tarjeta Naranja carried out the following transactions regarding debt issuance and sources of
financing.
Bank and Financial Loans. New loans were obtained from several banks in the aggregate
amount of AR$ 365 million. In addition, loans and checking account overdrafts were extended in
the amount of AR$ 429 million and principal and interest payments were made in the amount of
AR$ 836.2 million.
Financial Leases. Financial lease payments due were made in the amount of AR$ 54.1 million.
Notes (“Obligaciones negociables”). Within the framework of the Global Program for the
Issuance of Notes (“Obligaciones negociables”), Class XXIV, XXV, XXVI and XXVII Notes were
placed for AR$ 1,080.3 million. Principal and interest on Notes were paid in the amount of AR$
1,141.8 million.
Foreign Currency Debt Hedging. At fiscal year-end, we have forward transactions and other
investments to hedge cash flow risks of foreign currency-denominated debt. Derivative instruments
signed were agreed by the Company’s Management for the risk management of financial variables
and 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.
Other Available Sources. The Company has several credit lines available and that have not been
used related to commitments signed with different banks.
TARJETA NARANJA’S EVOLUTION
2014: Restart
FY 2014 was a year of restart for Tarjeta Naranja, taking each day as a blank sheet of paper full of
possibilities. This inspiring concept was clearly defined by David Ruda, the Company’s CEO:
“Restart is to start again. Start from scratch, over and out, reset. It is to clear our minds of the
memories of difficult times and fill our hearts with new, ambitious, daring, different projects that
allow us to follow a different path to arrive different places.”
This idea motivated the team as a whole, with thousands of employees who dared to break the
routine, arouse new concerns and try different ways towards the indoor meeting with the customer.
Summer
The summer operation integrated actions at the main tourist centers, with more than 1,200 benefits
such as discounts of up to 20% at the best restaurants, three-installment and 0% interest rate plan
(named “Zeta”) at supermarkets and gas stations, and exclusive promotions at hotels, theaters,
festivals, entertainment, travel agencies and transportation companies, among others.
th
The brand was present at the 14 Edition of Cosquín Rock Festival in Córdoba, with the Domo
Naranja, an exclusive space where alternative bands performed, documentary programs were
shown, books were launched and shows of artists, such as Favio Posca, among others, took place.
National Presence
To meet Cardholders’ needs with quality and warmth, during 2014, Tarjeta Naranja consolidated a
network of 216 branches and service centers throughout the country, distributed as follows: 9
in the City of Buenos Aires, 26 in Greater Buenos Aires, 20 in the rest of the Province of Buenos
Aires, 18 in Santa Fe, 51 in Córdoba, 4 in Chubut, 9 in Entre Ríos, 8 in Río Negro, 8 in Tucumán, 7
in Corrientes, 2 in La Pampa, 6 in Misiones, 3 in San Luis, 2 in Tierra del Fuego, 5 in Catamarca, 4
in Chaco, 3 in Formosa, 5 in Jujuy, 5 in La Rioja, 5 in Neuquén, 9 in Salta, 2 in Santa Cruz and 5 in
Santiago del Estero.
Within the process of adapting stores, six branches in the districts of Esquel (Chubut), El Dorado
(Misiones), Orán (Salta), Deán Funes (Córdoba), Tucumán and La Rioja were remodeled and
moved.
We continued introducing technology at branches throughout the country. Optical readers have
been implemented at stores to expedite customer services and customers’ experience in the line of
cash desks. Additionally, tablets were added to contribute to the sale and help in the service during
periods of higher flow of customers.
During this fiscal year, we improved the customer addition process, achieving online approval and
a MOBILE application for salespeople at branches throughout the country. Accordingly, the time
and activities of the process were reduced.
As from November, branches changed services during weekends and began opening only the
first Saturday of each month. This decision was made for the benefit of more than 2,700
employees who work at 216 branches of Naranja throughout the country. In addition,
Cardholders were informed about the change and invited to use alternative customer service
channels and other means of payment of account statements.
Casa Naranja
In 2014, we continued with the works of “Casa Naranja”, the corporate headquarters being built
in Córdoba, in order to sustain the Company’s growth and group the employees from the
operating areas in the same place. It is a 12-story building with a first floor, occupies 18,800 m2
and is part of —through its spaces of common use—other real property Tarjeta Naranja has on
the same block. Thus, the building will become the heart of a great complex that will
accommodate 1,400 employees in a few months. This work consolidates the sustained growth
and entails an important milestone in expressing Naranja’s culture, now reflected in an
environment that will create a different work experience. At fiscal year-end, the construction
achieved a 90% progress and the building is expected to be opened in May 2015.
2014 Brazil World Cup
Since 2011, Tarjeta Naranja has been the official sponsor of Argentina’s National Soccer Team,
with the purpose of continuing consolidating the brand and reaching its different customers.
Accordingly, the Company supported the national team during Brazil World Cup with a great
campaign, including solidarity, business and communication actions.
The campaign was based on three main pillars. The first one was a plan of special benefits that
the “Con Naranja copamos Brasil” (With Naranja, We Fill Brazil) contest included: raffles of
trips to the World Cup for Cardholders and long-term plans of up to zero-interest 25 installments
and special discounts for the purchase of LEDs on the own site, tiendanaranja.com.
Another outstanding milestone was the solidarity campaign “Un gol, 100 potreros” (One Goal
100 Soccer Fields), which consisted in conditioning about a hundred sports spaces with the
first goal scored by Argentina’s National Soccer Team. The winning institutions were awarded
the prize of the full equipment for the sports practice, including balls, nets, goals and fronts,
among others. This action was enrolled in the “Un gol, un potrero” (One Goal, One Soccer
Field) program the Company maintains as core initiative of the sponsorship and that, at the end
of 2014, provided more than 200 soccer fields enjoyed by 20,000 children.
Finally, the third point was the institutional campaign, the leading roles of which were Lionel
Messi, Gonzalo Higuain and Ángel Di María, who reflected the players’ firm commitment to
continuing scoring goals to add new soccer fields and achieve that more children play, enjoy
and grow up doing sports. The core piece was the spot “Camisetas” (Shirts), designed by the
BBDO agency and broadcasted by all media. The story was about a group of children who
“dream about playing like the big players”, where the core message was that Naranja believes
in the National Soccer Team and its players, and that thanks to their goals more soccer fields
would be added.
More Benefits and Promotions for Cardholders
Naranja continued carrying out promotional actions especially thought for its Cardholders, which
became a distinctive feature with respect to competitors and were positively valued by
customers. The most outstanding promotion was “Smartes, el día más inteligente para
comprar” (Smartes, the Smartest Day to Buy) with 15% and 25% discounts without cap on
Tuesdays on large brands throughout the country. From January to December, customers could
take advantage of this benefit at more than 2,300 points of sale of subscribed brands.
In addition, throughout the year, there were ongoing promotions with discounts and 0% interest
installment plans in all sectors. Several actions with top brands in Argentina, such as Claro,
LAN, DirecTV, Dexter, Falabella, Phillips, Disco, Disco Virtual, Musimundo, Garbarino, Frávega,
Walmart, ADT, Libertad and Jumbo, among others, should be highlighted.
Furthermore, almost 8,000 special promotions were made with the main brands and stores in
each district in each region of the country.
Limit Increases
To enjoy a higher purchasing power, 2.45 million limits were proactively increased to
Cardholders as a reward for their good payment behavior.
Improvements in Collections at Third-party Institutions
In 2014, process improvements were implemented: Online collection at Rapipago and addition
of more institutions for collections without account statements: Cobro Express, Ripsa and
Provincia Net, reaching 90% of customers who pay at third-party institutions.
Quality with Warmth at Branches
To keep the flame alive of quality with warmth at all stores of the country, from January to
December 2014, the “Fábrica de sensaciones” (Factory of Feelings) project was carried out.
Thus, we monthly worked on different thematic actions suggested to provide Cardholders with a
different experience.
“Arte in love” (Art in Love) for the Valentine’s Day stood out from the most original actions where
each branch proposed Cardholders to take part in any artistic event, such as painting, poetry
and live music exhibitions, among others. “Tu sonrisa vale” (Your Smile is Worthy) was the
solidarity action performed to raise smiles among customers, which then turn into money to
donate to welfare agencies. Finally, to close 2014, the “Yo me comprometo” (I Commit Myself)
initiative was launched so that each customer may make a promise for 2015.
Actions for Merchants (“Comercios amigos”)
During 2014, actions, events and initiatives specially intended for owners and salespeople of
Merchants (“Comercios amigos”) throughout the country were carried out.
Tarjeta Naranja invited stores to participate in training conferences about several matters in
order to strengthen the relationship by providing them with a different value proposal. The
conferences held in Tucumán, Salta and Santa Fe should be highlighted, where Felipe
Contepomi, a great referent of the Argentine rugby lectured and shared leadership and
teamwork concepts.
In November, we held the sixth edition of the Contest of Naranja’s Windows, in which over
800 stores participated, with the instruction to create original windows where the orange color
played a leading role. Ten nationwide finalists were selected first and then Naranja’s fans on
Facebook defined the order of winners with their vote. The first prize was a trip to Paris for two
persons.
Alternative Channels
Naranja online, the renewed virtual branch at tarjetanaranja.com for Cardholders and
Additional Cardholders, was launched in March. The improvements on the site allowed
introducing functionalities, such as requesting temporary limit increases, personalized
procedures for the collection of amounts in arrears and better account information, among
others. The new web adapts to different mobile devices, with new design and contents
improvements.
At fiscal year-end, the site increased its activity by 25%, as compared to 2013, reaching
1,175,000 passwords granted, more than 300,000 active users, over 1,200,000 monthly visits
and 700,000 queries on account statements.
Naranja keeps an active involvement in the commitment to providing prompt customer services
with quality and warmth, talking to its community and sharing exclusive benefits on social
networks. Accordingly, during 2014, Naranja’s official site on Facebook exceeded 1,320,000
fans, consolidating the Company as a leader in the financial industry. Since October, the Twitter
channel has also reached the top of this category, adding more than 97,000 followers on this
network.
Moreover, we joined two new networks: Google+ and Instagram. The first one, for the purpose
of achieving a better brand positioning and the second one, to be present in a social network on
the increase and to communicate brand experience.
The CRM Right Now software solution was implemented to systematize customer services and
followers on digital or alternative channels. This tool allows improving critical cases
management and response time, supporting the increase in the volume of contacts and
followers.
Other Products

Tienda Naranja (Naranja Store)
Tienda Naranja consolidated in 2014 as an online commercial site which grew strongly and
stood out with significant promotions for Cardholders and Merchants (“Comercios amigos”). In
tune with 2014 Brazil World Cup, a promotion was launched with stores in the electric and
technology industry, which allowed customers to buy LED TVs in zero-interest 25-installment
plans. During the fiscal year, Merchants (“Comercios amigos”) sold more than AR$ 70 million
through this platform.

Convivimos Magazine
Tarjeta Naranja’s magazine continued growing and consolidated itself as a publication for the
whole family, which directly reaches thousands of houses throughout the country, with a
monthly circulation of 590,000 issues. During 2014, important figures, such as Gastón Gaudio,
Guillermo Francella, Gael García Bernal, Susana Giménez and the Pope Francisco, were the
main characters of its cover, with an exclusive interview, which was very special for the
December edition.

Insurance
Naranja offers a wide personal insurance coverage, in alliance with top insurance companies.
The sale of protected purchase insurance was introduced in 2014. This is a new solution for
Cardholders, which is intended to cover consumptions made with Tarjeta Naranja against theft
or accident.

Servicios Naranja en tu celular (Naranja Services on Your Cell Phone)
The service whereby Cardholders may control their operations and receive text messaging with
information about each purchase and payments made, due dates, withdrawals, transfer notices
and balance queries. In 2014, top-ups amounted to AR$ 115,216,659. During the fiscal year,
campaigns were carried out for Cardholders with different conditions, prizes and benefits. As a
result, active customers of this service increased by 11% reaching 1.35 million customers at
year-end.

Alliance with La Nación Group of Magazines
A business alliance was made with La Nación group to promote and market at our branches
sign-ups for direct debit of the magazines Ohlalá, Susana, Rolling Stones, Living, Lugares,
Jardín and Brando, including the benefits of the “Club La Nación” (La Nación Club) program. By
the end of 2014, 40,000 subscriptions were achieved.

Naranja + Google
Through the collaborative project, Digital Studio, Tarjeta Naranja and Google began working to
increase ideas and carry them to the digital world. Technology, Google products and the
disruptive and creative thoughts are the keys to accomplish a joint undertaking.
Changes in the Institutional Logotype
The Company’s main graphic symbol is adapted and updated in the course of time. By
analyzing the different uses, in 2014, a subtle change in the design was made to simplify the
ways to attain increased brand identification. In the new isologotype version, number 96 is again
orange and white and recovers the circular format similar to the original design of Salto 96.
Quality
During 2014, the transformation started in 2013 was more profound and consolidated after
introducing the LEAN methodology. With this vision, our processes were rethought to streamline
the operation, increase efficiency and improve the customer’s experience ensuring the quality of
products and services.
The priority was to work with processes that have a direct impact on customers. Therefore,
focus was placed on customer service channels and production processes of Cardholders and
Merchants (“Comercios amigos”) both in the origination and post-sale.
Following this line, there were three waves of transformation. Wave 1 was made up of the
Contact Center and Collections. The first team, specialized in making information available,
managed to automate more frequent inquiries—available balances and amounts payable—for
Cardholders to be able to obtain this information by calling the 0800 number without the
involvement of an operator.
The Collections area, in turn, was focused on offering more and better service channels to
customers in arrears and providing them with a solution in the first contact. This area
implemented personalized procedures for Cardholders at advanced levels of arrears, thus
avoiding any inconvenience for those who do not require any early procedures due to their
payment behavior.
The wave of change 2 was made up of the teams from Processing and Branches. The first one
achieved a faster response process, making the terms of resolution of requests and claims
considerably shorter. Tools were also given to branches and the Contact Center for the selfmanagement of certain proceedings upon the customer’s request.
Transformation at Branches was focused on reaching excellence in customer support. The “Line
Advisor” role was introduced, who helps Cardholders be on the right line and informs them
about the self-service channels whereby they may carry out their proceedings. In addition,
heads spend more time in the room, in contact with customers.
Finally, Wave 3 was made up of the processes of Addition, Deletion and Change (ABM as per
its initials in Spanish) of Cardholders and Merchants (“Comercios amigos”). The ABM area of
Cardholders significantly reduced the time of processes to add customers for them to obtain
their cards more promptly. As regards ABM of Merchants (“Comercios amigos”), we achieved
that the operating process to subscribe new stores is completed within 24 hours.
Additionally, in compliance with its commitment towards quality, the Company achieved a new
recertification of ISO 9001:2008 standards awarded by Det Norske Veritas (DNV), a global
leading organization. Since 2005, Tarjeta Naranja has certified all its processes under strict
standards, which ensures the best quality of service to Cardholders and Merchants (“Comercios
amigos”) in every place in the country where the Company operates.
Risk Management and Recovery
During 2014, we continued working to keep the portfolio sound, through a management aimed
at protecting the customer. Accordingly, the application of a scoring tool to manage credit limits,
combining risk and use variables, was consolidated.
As regards the procedures for collection of amounts in early arrears, we changed the rule of
collection, by introducing new segmentation criteria and adding the impact on allowances, with
positive results in recovery rates, to risk variables.
We included in the model of procedures for collection of amounts in late arrears a new portfolio
turnover scheme for accounts being managed by attorneys, thus allowing more dynamic
procedures, with good recovery results.
In terms of processes, we continued improving productivity ratios, optimizing operating costs.
Technology and Processes
During the year, the IT Division’s strategy was redefined for the coming years based on the
business needs. A program of 31 projects was established to be carried out in three years and a
half.
To support the business demand, infrastructure was added and equipment and systems were
updated, ensuring a better service and the alignment with the best practices.
In order to ensure the availability of IT equipment at a 24/7 service level, we implemented
system changes, which reduced the duration of night copying processes. Furthermore, night
processes and the technology supporting them were optimized to achieve better time of copies
being made to balance online and batch equipment. These changes allowed cutting down
costs, reducing time and provided increased online availability.
We managed to sensibly reduce the monthly closing time to issue the account statement for
our Cardholders. A series of changes in operating systems and procedures were implemented,
which allowed reducing and stabilizing the full processing time to seven hours.
In 2014, we introduced a data security solution, which detects, monitors, protects and
manages confidential data, regardless of where they are stored or used. We thus contribute to
protecting information against theft attempts and data loss.
Changes to Comply with New Regulations
In 2014, Tarjeta Naranja made the necessary changes to comply with Argentine Central Bank
(BCRA)’s regulations regarding “Protection of Financial Services Users” set out in Communiqué
“A” 5388 dated January 24, 2013, as amended and supplemented.
An event that should be highlighted is that in June 2014 the Argentine Central Bank introduced
significant changes to those regulations with impact on the business, as it established the
distinction between basic and non-basic fees and the need to have the prior authorization of the
agency to raise the price of basic fees. These are defined as those that compensate the
availability and/or use of the credit card service and/or purchase card in our case (A 5591).
In this regard, in December 2014, the Argentine Central Bank extends the prior authorization
requirement to rises in fees of new products and/or services they wish to market at non-basic
fees (A 5685).
Additionally, Tarjeta Naranja has carried out the proceedings and timely obtained its final
registration with the registry of nonfinancial companies issuing credit and/or purchase cards,
which was created by the Argentine Central Bank, under Code No. 70408 (A 5593).
Prevention of Asset Laundering and Funding of Terrorist Activities
Tarjeta Naranja has a program that establishes policies and procedures to prevent and detect
illegal transactions. During 2014, the Systech Vigía tool was implemented, which allows
obtaining a full understanding of customers and detecting unusual or irregular transactions on a
timely basis.
In order to have updated information about customers who have a given consumption level and
who have performed unusual transactions, we continue performing controls and requesting
documentation supporting these transactions.
We continued providing all Tarjeta Naranja’s employees with training so that they may
contribute to preventing and detecting criminal activities. Furthermore, the members of the
Control and Prevention Committee and the Anti-laundering Unit received external training.
In addition, the first supervision in situ of the Financial Information Unit (UIF, as per its initials in
Spanish) regarding the Prevention of Asset Laundering was satisfactorily approved.
Commitment with our Employees
Tarjeta Naranja maintains the commitment to fostering the ongoing development of its
employees, encouraging a joyful environment, involvement and teamwork. Accordingly, during
2014, the Company increased its efforts with the Human Resources management and
continued being ranked among the best companies to work in Argentina.
With a headcount of 3,727 employees at year-end and the conviction that the good work
environment is part of the Company’s essence, periodic measurements were made to know the
employees’ perception of the work environment, identify strengths to be increased and aspects
that pose improvement opportunities.
To supplement the own diagnoses with an external view, in 2014, Naranja again took part in the
renowned Great Place to Work (GPTW) ranking, achieving the third position in the category of
companies with over 1,000 employees.

Increasingly Trained Employees
Loyal to the premise of being part of teams with specialized employees and furnishing the best
tools to manage, 2,292 training actions between Web-based and face-to-face courses were
carried out during 2014.
To continue developing the Company’s leaders, the Management Training Program was
implemented, based on two focal points: “Conversando sobre el cambio” (Discussing about
Change) and “Gestión del talento” (Talent Management). The first block was aimed at 476
leaders, including managers, supervisors, bosses, coordinators and heads, while 154 managers
took part in talent identification and training courses.

More and More Together
Throughout 2014, national conferences were held for all the Company’s leaders in order to
increase the role of managers as an essential part of the organization’s strategy. In addition,
they were intended to inform them about the Company’s situation and to create spaces for
participation.
Thus, six large conferences were held for commercial heads, regional supervisors and
managers, where 725 leaders attended. Figures such as Facundo Manes, Álvaro Rolón,
Bernardo Blejmar and Guillermo Oliveto were present among lecturers and consultants.
A new “Congreso Nacional de Formadores” (National Congress of Trainers) took place in
Córdoba in September. Attending employees amounted to 150 throughout the country, whose
important mission is to train their coworkers in different skills and convey the Company’s culture
to them. The team of trainers worked on the strategic use of creativity upon changing situations
and learnt about the artistic expressions that enable us to learn by playing games.
Accordingly, the proposal provided trainers with new tools so that they may continue
contributing to their peers’ experiences as information facilitators, converting the classroom into
a true center of initiatives.
In October, “La semestral” (The Semiannual Meeting) was the most expected event to meet
with coworkers throughout the country, enjoy an unforgettable moment and uphold the own
values of Naranja’s culture. In 2014, 2,900 employees coming from several parts throughout the
country attended this great meeting and actively participated from the stage and the
grandstands. This year the theme chosen was carnival, with a great deployment of color, funny
participations and an important role of internal talents.

Much More than a Job
After analyzing numerous suggestions received and betting on improving the balance between
personal and work life, without overlooking our customers’ needs, we defined that all stores in
the country (except for those operating at shopping malls) should open only one Saturday per
month on the collection date. After a series of tests have been passed, as from December this
was implemented, which was received excellently by employees and customers.
In order to reward the effort of those who hope to become professionals, a special program was
organized for students of different careers, who were selected by order of merit, have additional
hours of study, which allow them to continue with their university or postgraduate studies.
Special benefits were implemented to meet the needs of working mothers. During pregnancy,
we introduced the possibility of choosing a gradual workday reduction and, then, when the
employee returns from her maternity leave, she is entitled to one additional breastfeeding hour
until her baby is nine months old.
A special paternity leave of five business days was designed for fathers. They are given an
additional free hour for them to be with their baby until the baby is one month old. These
benefits are also applied to employees who adopt, regardless of the child’s age.
To continue adding value to the employer brand proposal, we introduced initiatives aimed at
work flexibility, such as flexible December 24 and 31, the possibility of recovering national
holidays falling on the vacation period and, for parents, the benefit of two free hours on their
children’s birthday. Moreover, we maintained successful actions, among which the free day as
birthday gift should be highlighted.
With the employees’ participation and creativity, the kitchens of all the stores in the country
were renewed for these common spaces to adjust to their needs and reflect the Company’s
culture. The layout was changed with new colors on walls, new furniture and decoration.
Employees were free to choose the change of their kitchen with the whole team, with the
decoration they liked most and that was suitable for their store.

In Constant Evolution
In order to optimize internal communication, in 2014, we developed Naranja network, a
collaborative communication tool that fosters participation and encourages teams to share
information. It is also thought to seek more and better solutions to the challenges posed by the
business evolution.
At year-end, Naranja network was ready to be implemented. Before its mass launching, it is
expected to be enabled for a group of over 350 employees throughout the country, who will be
the first ones to experiment it and will be facilitators of this new channel among their coworkers.

Innovation
During 2014, we continued working on boosting the innovation culture at Tarjeta Naranja through a
process that seeks to increase equipment effectiveness and attain results that add value to the
different areas and the whole organization.
We began with a Creative Facilitators Training Program intended for a management and
employees team. Through December and throughout eight months, the process was divided into
three stages: A stage of training in the role of Creative Facilitators, then the methodology
application and finally its deployment by means of the different work initiatives selected.
Sustainability
“Sustainability on Planet Earth mainly lies in sustaining the integrity of human beings and their fight
for care and preservation of nature.” With the inspiration of these words said by David Ruda, the
Company’s CEO, in 2014 the first Sustainability Report was prepared, which is full of warmth and
color based on the Global Reporting Initiative G4 guidelines. This document summarizes what
Tarjeta Naranja does and how it does so, accounting for its economic, social and environmental
performance.
This new way of reporting fully contributes to transparency in the Company’s management and
allows a comparative analysis with other institutions in the financial sector. It is also a key tool for
the standardized reporting of the effects of the operation.

Community Programs
Tarjeta Naranja understands that the long-term growth should be supported with a sustainable
management that considers and includes the community and the neediest groups. Employees,
Customers and Merchants (“Comercios amigos”) actively took part in the multiple initiatives
developed in 2014. Some of the most outstanding are:
 Débito solidario (Solidary Debit) Program: Tarjeta Naranja has been for 18 years collecting
the contributions Cardholders donate through automatic credit card debit to be fully
delivered to different non-profit organizations. In 2014, AR$ 53,167,001 related to 339
organizations throughout the country was collected.
 Apadrinando escuelas (Support for Schools) Program: In order to foster equal
opportunities for public primary school children throughout the country, a joint work with
Sponsor Merchants (“Comercios amigos”), which also make an economic contribution to
meet children’s and institutions’ needs, has been conducted since 1999. The year ends
with 108,809 benefited children from 377 schools sponsored by 406 Merchants
(“Comercios amigos”).
 Apadrinando comedores (Support for Community Kitchens) Program: Through the work of
volunteers, this program helps with food, education, clothing and recreation of children at
community or soup kitchens from different districts of the country. In 2014, 40 sponsored
community kitchens received relief, love and assistance for 3,364 children.
 With the idea of enabling outstanding children and young people to continue studying, we
launched the Primary and Secondary School Scholarship Program, along with FONBEC.
This year 96 employees sponsored by means of their contribution and support 100
sponsored children from different regions of the country.
 During the year, 120,000 kg of out-of-use paper were recycled, the product of which was
earmarked for social development programs.
The complete information about the programs is available at
http://www.tarjetanaranja.com/advf/documentos/54dcf12f96c11.pdf
A Company with Multiple Awards
In 2014, Tarjeta Naranja excelled again among the national brands with the best Human
Resources management. In November, it was awarded the prestigious Great Place to Work prize,
achieving the third position in the category of companies with over 1,000 employees.
It also stood out in the ranking of companies prepared by the employment site, ZonaJobs, being
ranked first among the best qualified companies by their own employees and occupying the
seventh position in the ranking of the most valued companies to work in Argentina, along with
leading companies such as Arcor, Google and Coca-Cola, which are also present in young
people’s aspirations.
As evidence of its strong positioning, Tarjeta Naranja was included for the fifth consecutive year in
the Corporate Reputation ranking published by Clarín newspaper and made by the consulting
firm Merco. At this time, it was ranked 20 among the 100 most recognized companies of Argentina.
It is noteworthy that since it was included in the ranking in 2010, the Company climbed more than
50 positions. The firm was also present in the ranking of Businessmen Leaders of the same
publication, in which David Ruda, the Company’s CEO, was ranked 30.
During the year, Tarjeta Naranja was also awarded a prize for its communication strategy. The
most important recognition was Premio Mercurio de Oro (Golden Mercury Prize) in the Major
Companies category for the “Un gol, un potrero” (One Goal, One Soccer Field) institutional
campaign, which achieved an outstanding impact upon aligning the marketing strategy as official
sponsor of Argentina’s National Soccer Team with the Company’s Sustainability Plan. The action
was also the winner in the Financial Services category. The Mercury prize, awarded by the
Argentine Marketing Association (AAM, as per its initials in Spanish), is the most important national
recognition to companies that have developed a successful marketing campaign.
The “Un gol, un potrero” (One Goal, One Soccer Field) campaign carried out by BBDO Argentina
for Tarjeta Naranja was also awarded the Golden Effie in the financial industry. The distinction
was awarded by the American Marketing Association in recognition of the results obtained by this
program of strong social contents.
In addition, Tarjeta Naranja was distinguished as a “Socialmente dedicada” (Socially devoted)
brand by Social Bakers, specialist in analyzing and monitoring social networks management
strategies. The Company’s main attributes highlighted were a good performance in talking and
service quality on its Facebook channel.
Continuing with the institutional communication distinctions, Tarjeta Naranja was awarded four
EIKON prizes granted by the Imagen magazine. In the national prize awards, the Company was
awarded two silver EIKON prizes for its institutional campaign on Social Media “Cambiá un NO por
un ZI!” (Change from a NO to a YES! - “Zi” instead of “Sí” in Spanish, which is written wrong on
purpose to include the letter Z) and for its Social Responsibility Campaign “Un gol, un potrero”
(One Goal, One Soccer Field) in the Relations with the Community category. The same actions
were highlighted in the first edition of the EIKON prizes in Córdoba, which were awarded the
golden and silver prizes, respectively.
OUTLOOK FOR 2015
The return to positive growth rates, within a complex regional macroeconomic context, should be
highlighted among Argentina’s challenges.
Our goals for the coming year are aimed at strengthening our leadership position in the interior of
the country and continue expanding operations in the Autonomous City of Buenos Aires and
Greater Buenos Aires, to continue improving the quality of our products and services to customers
and continue improving efficiencies in our processes.
Regardless of results of operations, Tarjeta Naranja begins 2015 with a joyful message, full of good
wishes, concentrated on the phrase ¡Contagiemos optimismo! (Let’s Spread Optimism!). Being
convinced that the country needs everyone and each of us, the Company invites employees,
cardholders, merchants (“Comercios amigos”), suppliers and friends in general to take part in this
call for action.
The Company, with its strong conviction that the difference lies in betting on people’s values,
confirms its commitment to:



Continuing believing in utopias.
Continue believing “That the fact that it has not been done does not mean it cannot be
done”.
Continue believing in a future with freedom, democracy and a fairer world.
Accordingly, Tarjeta Naranja shares its desire for a better Argentina and encourages its employees
to believe that it is possible.
Schedule: Report on the Degree of Compliance with the Code on Corporate Governance
Compliance
Total
Partial
Noncom
pliance
Report or Explain
PRINCIPLE I. MAKE THE RELATIONSHIP TRANSPARENT AMONG THE ISSUER, THE GROUP HEADED THEREBY AND/OR OF WHICH IT IS A
MEMBER AND ITS RELATED PARTIES
Recommendation
I.1: Ensure the
disclosure by the
Management Body
of the applicable
policies to the
Issuer’s
relationship with
the group headed
thereby and/or of
which it is a
member and its
related parties.
Recommendation
I.2: Ensure the
existence of
mechanisms that
would prevent
conflicts of
interests.
X
From a business viewpoint, Tarjeta Naranja S.A. is controlled by Tarjetas Regionales S.A., a member of
Grupo Financiero Galicia S.A. This structure allows taking advantage of significant synergies. All business
relationships with group companies, whether permanent or occasional in nature, are built under normal and
usual market conditions. In accordance with professional accounting standards and as suggested by the
best practices, the Company reports related party transactions in notes to the financial statements. The
information disclosed includes the significant transactions performed with shareholders and managers
under usual market conditions.
Pursuant to the 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, to 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.
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.
X
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 Management
Body assumes the
management and
supervision of the
Issuer and its
strategic
orientation
II.1.1.1 Approved
strategic plan,
management goals
and annual
budgets approved
by the
Management Body.
X
X
The Board of Directors annually reviews, submits for discussion and approves the strategic plan from
which the management goals arise, as well as it approves the annual budget. This is entered into the
Minutes of the Board of Directors' meetings. The Committee for 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
investments and
financing approved
by the
Management Body.
II.1.1.3 Policy on
corporate
governance
approved by the
Management Body.
II.1.1.4. Policy to
select, evaluate
and compensate
first-class
managers
approved by the
Management Body.
X
X
X
There is a policy on investments and financing approved by the Board of Directors.
Tarjeta Naranja has a Code on Corporate Governance approved by the Board of Directors.
The Human Resources Department sets policies on selection to fill vacancies at all organization levels,
according to each position description. Internal contests, evaluations of potentials and external
recruitments through specialized consulting firms are carried out to evaluate candidates and select them.
Evaluations consider compliance with goals and qualitative aspects of each one’s performance based on
the required skills and corporate values.
Compensation is established based on salary bands defined according to the responsibilities assigned to
each of the positions.
All these policies are approved by the Board of Directors.
II.1.1.5. Policy to
assign
responsibilities to
first-class
managers
approved by the
Management Body.
II.1.1.6 Supervision
of succession
plans of first-class
managers
approved by the
Management Body.
X
The issuer has position descriptions for all organization levels. The necessary skills for the performance in
each position are described in such position descriptions, as well as the responsibilities assigned thereto.
According to the position levels, descriptions are approved by each division and, in the case of descriptions
of first-class manager positions, they are approved by the Management Body.
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,
identifying 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. 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.
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
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 Sustainability Report
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; Débito solidario (Solidary Debit); Un gol, un potrero (One Goal, One
Soccer Field); actions carried out from the branches in the communities where we are; cultural actions.
Scholarships for primary and secondary school students. Schoolwork transition program for six-year
students of marginal schools; Internship program for secondary schools: Donation of technological
equipment.

Environment: Sale of out-of-use paper to be recycled (eco-efficient paper); ecological bags;
remanufactured toners and safe destruction of casings; recycling and final disposal of technological waste;
campaign of bottle caps; cans for work (sculpture built with cans of food that are then donated to non-profit
organizations).

Our Employees: Training; the Best Place to Work; work environment; personnel selection; honors
and recognitions; hiring of people with different abilities.

Our Customers: Assured quality; means of contact and communication with our customers.
Tarjetas Regionales, the controlling company, has a specific area for the risk analysis that supplements the
analyses performed by the Issuer.
Tarjeta Naranja has several committees reporting to the Board of Directors, such as the Audit Committee,
the Control and Prevention of Money Laundering Committee and the Committee for Information Integrity.
All these Committees ensure that financial internal control systems are sufficient, adequate and efficient, as
well as the proper operation of the controls related to fraud detection, prevention of money laundering and
the transparency of the entity’s information. Thus, the Audit Committee quarterly supervises the progress of
the annual audit plan, which, along with the Committee for Information Integrity, is intended to identify
critical risks. During each meeting, the Audit Committee receives information from the internal audit
department about the most significant events and the recommendations arising from its work, as well as
the status of the recommendations issued in prior years, always for the sake of helping create an adequate
control environment.
In addition, the Prevention of Money Laundering and Funding of Terrorist Activities Committee meets every
two months to show the results of controls and prevention of asset laundering, funding of terrorist activities
and other illegal activities, in accordance with effective legal and administrative rules, in order to reduce
and eliminate civil, criminal or commercial-type responsibilities for the organization.
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.
II.1.4 Matters
submitted for the
Management
Body’s approval,
accompanied by
risk analyses and
acceptable risk
level.
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 or as required by any of the directors and 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.
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.
Recommendation
II.2:
Ensure an effective
business
management
control.
II.2.1 The
Management Body
verifies compliance
with the annual
budget and
business plan.
II.2.2 The
Management Body
verifies first-class
managers'
performance.
Recommendation
II.3: Report the
Management
Body’s
performance
evaluation process
and the related
impact.
II.3.1 Each
member of the
Management Body
complies with the
Corporate Bylaws
and, as the case
may be, with the
Regulations
governing the
Management
Body’s operation.
Specify the main
guidelines set out
in the Regulations.
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
X
The Bylaws regulate the frequency of meetings, the 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.
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
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.
X
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
significant
proportion in the
Management Body.
II.4.1 The
proportion of
executive, external
and independent
members (the latter
defined by the
regulations of this
Commission) of the
Management Body
corresponds with
the Issuer’s capital
structure. Specify.
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 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 businessperson does.
X
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.
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
X
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
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
their duties professionally, ethically and responsibly.
X
II.5.1.1
II.5.1.2
II.5.1.3
II.5.1.4
II.5.1.5
II.5.2
II.5.2.1.
II.5.2.2
II.5.2.3
II.5.2.4
II.5.2.5
II.5.2.6
II.5.2.7
II.5.3
Recommendation
II.6: Assess
whether it is
advisable for
members of the
Management Body
and/or members of
the Supervisory
Committee and/or
members of the
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 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 as regards the fact that directors can perform their duties at other entities that are not part of the
group, but the shareholders select directors and Supervisory Committee members in such a way that they
always perform duties at similar companies.
As regards Supervisory Committee members, whereas Argentine laws provide them a legality control
function, Tarjeta Naranja S.A. considers there are no impediments for these members to take part in
different Supervisory Committees. Moreover, if that happens in companies related by control relationships,
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
and first-class
managers, which
include matters
about their roles
and
responsibilities, the
comprehensive
business risk
management,
specific business
knowledge and the
related regulations,
the dynamics of
corporate
governance and
corporate social
responsibility
it is deemed 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 terrorist activities, and SOX (Sarbanes-Oxley)
matters, Tarjeta Naranja S.A. has managed such training for those persons directly engaged in the matter.
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 Management are free and supported by the Company
through other
X
to carry out the training courses deemed advisable.
means not
mentioned in II.7.1,
encourages the
Management Body
and first-class
managers to be
constantly trained
so as to
supplement their
education level
thus adding value
to the Issuer. State
how this is done.
PRINCIPLE III. GUARANTEE AN EFFECTIVE POLICY TO IDENTIFY, ASSESS, MANAGE AND DISCLOSE THE BUSINESS RISK
Recommendation
III: The
Management Body
shall have a policy
on the
comprehensive
business risk
management and
monitors its
appropriate
implementation.
X
III.1 The Issuer has
policies on
comprehensive
business risk (on
compliance with
strategic,
operating, financial,
accounting
reporting, laws and
regulations goals,
among others).
Describe the most
significant aspects
thereof.
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. 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.
X
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 strengthened 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 currency-denominated debt in order to hedge the exchange rate risk to which
they would be otherwise exposed. Additionally, given the evolution of the most important economic
variables in our country, the Company has performed derivative transactions in order to mitigate the
potential effects of such evolution on the Company’s course of business.
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.
III.2 There is a Risk
Management
Committee inside
the Management
Body or General
X
One of Tarjeta Naranja S.A.’s responsibilities is to implement a sensible risk management. Therefore, risk
management has been assigned to different divisions, which deal with the management of credit, financial,
fraud and asset laundering risks, among others. The following are the goals of these areas:
• Actively and comprehensively manage and monitor the several risks taken, ensuring compliance with
internal policies and regulations in force.
Division. Report on
the existence of
manuals of
procedures and
detail the main risk
factors that are
specific to the
Issuer or its activity
and the mitigation
actions
implemented. If
there is not such a
Committee, the risk
management
supervision role
performed by the
Audit Committee
shall be described.
Also, specify the
degree of
interaction between
the Management
Body or its
committees with
the Issuer’s
General Division in
relation to the
comprehensive
business risk
management.
III.3 There is an
independent
function within the
Issuer’s General
Division that
implements the
comprehensive risk
• 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
In addition to the considerations disclosed in the preceding recommendation, for this duty there is a specific
area at the controlling company.
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.
X
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. In this
respect, during 2014, it certified one of its auditors as assurance validator backed by the Institute of Internal
Auditors in Argentina (IAIA). 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.
The outcome of risk management is reported to the Board of Directors and is disclosed in notes to the
III.5 The
X
financial statements, specifically in Note 4, which refers to the financial risk management and where the
Management Body
credit, liquidity, market and capital management risks are analyzed. Such financial statements are submitted
reports the results
for the approval of the Shareholders’ Meeting.
of monitoring risk
management
performed jointly
with the General
Division in the
financial
statements and the
Annual Report.
Specify the main
aspects of the
above disclosures.
PRINCIPLE IV. SAFEGUARD THE INTEGRITY OF FINANCIAL INFORMATION WITH INDEPENDENT AUDITS
Recommendation
IV: Ensure the
X
independence and
transparency of the
duties the Audit
Committee and the
External Auditor
are entrusted with.
IV.1 The
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
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
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. Internal and External Audit independently monitor such system, with unrestricted access to
the entity's sectors and information. The Issuer has an Internal Audit area fully independent from the other
operating areas, as well as from the controlling company, whose mission is to assess and monitor the
effectiveness of the internal control system with the purpose of ensuring compliance with applicable laws
and regulations. 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 follow-ups 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.
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
The area is working on a project to be certified 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
annually assess
the suitability,
independence and
performance of the
External Auditors
appointed by the
Shareholders’
Meeting. Describe
the significant
aspects of the
procedures used to
perform the
assessment.
IV.4 The Issuer has
a policy on the
turnover of the
members of the
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.
auditors, determines whether their independence condition is 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
X
X
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.
The Company has a web site, where financial information is provided and, upon any inquiry, members of the
Board of Directors assist investors. Furthermore, Tarjeta Naranja S.A. periodically submits corporate and
financial information through the web page of the CNV, the Stock Exchange and MAE. The Company also
has telephone lines to answer inquiries.
them to establish
contact between
them. Specify.
Recommendation
V.2: Encourage the
active participation
of all shareholders.
V.2.1. The
Management
Body takes
measures to
encourage the
participation of
all the
shareholders at
the General
Shareholders’
Meetings.
Specify by
differentiating
the 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.
X
X
X
In the particular case of Tarjeta Naranja, it is not necessary to take any measures aimed at promoting
attendance to Shareholders’ Meetings, because shares are concentrated in two shareholders, both of whom
are members of the group to which it belongs.
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 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
members of the
Management
Body are
X
X
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.
During 2014, a Code on Corporate Governance was prepared, which was submitted for the Board of
Directors’ consideration and approval.
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.
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.
X
Recommendation
V.5: Increase the
percentage of
outstanding shares
on capital.
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.
Up to 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. owns 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
X
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’
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
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 otherwise decided by the Ordinary Shareholders’
Meeting.
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 4,
2014.
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 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
X
X
Tarjeta Naranja S.A. has a web page of the Company, which can be freely accessed, which is permanently
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, Tarjeta Naranja S.A. periodically submits corporate and financial
information through the web page of the CNV, the Stock Exchange and MAE.
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).
X
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 report 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.
PRINCIPLE VII. COMPENSATE FAIRLY AND RESPONSIBLY
Recommendation
VII: Establish clear
policies on the
compensation of
the members of the
Management Body
and first-class
managers, with
special focus on
establishing
conventional or
statutory limitations
based on the
existence or
inexistence of
profits.
VII.1. The Issuer
has a
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
X
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
matters.
VII.1.4 that meets
at least twice a
year.
VII.1.5 whose
decisions are not
necessarily binding
for the General
Shareholders'
Meeting or for the
Oversight
Committee, but for
consultation
purposes as
regards the
compensation of
the members of the
Management Body.
VII.2 If there is a
Compensation
Committee:
VII.2.1
VII.2.2
VII.2.3
VII.2.4
VII.2.5
VII.2.6
VII.2.7
VII.3 If the policies
applied by the
Issuer’s
Compensation
Committee that
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
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.
X
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.
PRINCIPLE VIII. ENCOURAGE BUSINESS ETHICS
Recommendation
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
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.
X
Tarjeta Naranja has a process called Democratic Assessment, which is carried out with a tool where all the
Company's employees assess their leaders and where they can provide their opinion on any employee
from their same area or not, as well as write a letter to the Company’s Senior Management and Chairman
about any aspect deemed necessary, even 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.
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.
VIII.3. The Issuer
has policies,
processes and
systems to manage
and resolve the
reporting
mentioned in point
VIII.2. Make a
description of the
most significant
aspects thereof
and indicate the
Audit Committee’s
degree of
involvement in
such resolutions,
particularly in that
reporting
associated with
internal control
matters for
accounting
reporting and as
regards the
X
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.
behaviors of the
members of the
Management Body
and first-class
managers.
PRINCIPLE IX: BROADEN THE SCOPE OF THE CODE
Recommendation
IX: Foster the
inclusion of
provisions related
to good corporate
governance
practices in the
Corporate Bylaws.
X
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
20th Fiscal Year
Financial Statements
For the fiscal year commenced January 1, 2014 and ended
December 31, 2014, presented on a comparative basis
Figures stated in thousands of Argentine Pesos
Date of Registration with the Public Registry of Commerce:
Of Bylaws:
December 12, 1995
Registration Number with the Public Registry of
Commerce:
No. 1363 Fo. 5857 Vol. 24/95
Date of Expiration of Company’s Bylaws:
December 12, 2094
CAPITAL STATUS (Note 2.19)
Shares
Number
Voting Rights per
Share
Type
Subscribed
Paid-in
In Thousands of AR$
Ordinary shares with a face value of AR$
2,400 10,000
1
2,400
24,000
24,000
24,000
24,000
Information on the Controlling Company:
Company’s Name:
Tarjetas Regionales S.A.
Legal Domicile:
Belgrano 1415 Piso 1° – Mendoza
Principal Line of Business:
Financial and investment activities. Its principal line of business
is to invest in nonbanking credit card issuers and in companies
that perform services supplementary to the abovementioned
activity (holding company).
Interest in the Shareholders’ Equity:
99%
Percentage of Votes:
99%
1
TARJETA NARANJA S.A.
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2014 AND 2013
(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, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
12.31.2014
Note
Revenues from Services
6
Direct Expenses from Services
7
Net Income from Services
12.31.2013
In Thousands of AR$
3,031,466
2,428,570
(373,859)
(284,392)
2,657,607
2,144,178
Revenues from Financing
8
2,804,572
2,065,851
Expenses from Financing
9
(1,566,147)
(848,613)
1,238,425
1,217,238
206,026
51,382
4,102,058
3,412,798
(470,948)
(489,544)
3,631,110
2,923,254
Net Income from Financing
Net Income from Short-term Investments
10
Total Operating Income
Provision for Credit Losses
11
Total Operating Income, Net of Provision for Credit Losses
Personnel Expenses
12
(1,228,696)
(993,730)
Taxes and Rates
13
(568,115)
(422,676)
Advertising Expenses
Depreciation of Property, Plant and Equipment and Amortization of Intangible
Assets
14
(115,768)
(105,578)
15
(51,251)
(38,946)
Other Operating Expenses
16
Total Operating Expenses
Net Income before Income from Investments in Associates and Other
Companies
Income from Investments in Associates and Other Companies
17
Income before Income Tax
Income Tax
18
Net Income for the Fiscal Year from Continuing Operations
Loss from Discontinued Operations, Net of Income Tax
43
Net Income for the Fiscal Year
(713,933)
(598,196)
(2,677,763)
(2,159,126)
953,347
764,128
2,136
1,650
955,483
765,778
(322,267)
(262,915)
633,216
502,863
(14,191)
(13,150)
619,025
489,713
263.84
209.53
(5.91)
(5.48)
257.93
204.05
Earnings per Share
Basic and Diluted Earnings per Share from Continuing Operations
Basic and Diluted Loss per Share from Discontinued Operations
The notes are an integral part of these 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, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
12.31.2014
Note
Net Income for the Fiscal Year
12.31.2013
In Thousands of AR$
619,025
489,713
(5,350)
3,195
(5,350)
3,195
Comprehensive Income for the Fiscal Year from Continuing Operations
633,216
502,863
Comprehensive Loss for the Fiscal Year from Continuing Operations
(19,541)
(9,955)
Total Comprehensive Income for the Fiscal Year
613,675
492,908
263.84
209.53
Other Comprehensive (Loss) / Income
Reserve for Translation Differences Related to Foreign Operations
Other Comprehensive (Loss) / Income for the Fiscal Year
19
Earnings per Share
Basic and Diluted Earnings per Share from Continuing Operations
Basic and Diluted Loss per Share from Discontinued Operations
The notes are an integral part of these financial statements.
4
(8.14)
(4.15)
255.70
205.38
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, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
Note
12.31.2014
12.31.2013
Note
In Thousands of AR$
ASSETS
12.31.2014
12.31.2013
In Thousands of AR$
LIABILITIES
CURRENT ASSETS
CURRENT LIABILITIES
Cash and Cash Equivalents
20
1,063,155
854,948
Accounts Payable
27
6,550,449
5,199,159
Investments
21
177,228
100,610
Bank and Financial Loans
28
2,483,496
1,613,661
Receivables from Services
22
11,448,414
9,016,500
Compensation and Social Security Charges
29
249,934
200,687
Other Receivables
23
286,174
230,211
Tax Charges
30
203,874
145,188
Other Liabilities
31
14,549
10,616
Provision for Income Tax
18
76,499
65
9,578,801
7,169,376
Total Current Assets
12,974,971
10,202,269
Total Current Liabilities
NON-CURRENT ASSETS
NON-CURRENT LIABILITIES
Receivables from Services
22
183,389
144,587
Bank and Financial Loans
28
1,840,457
1,771,458
Other Receivables
23
197,551
111,938
Provisions
32
16,189
22,847
Deferred Income Tax Assets
18
219,202
177,829
Investments in Associates and Other Companies
24
6,557
26,271
Property, Plant and Equipment
25
182,303
159,105
Intangible Assets
26
102,233
83,766
891,235
703,496
1,856,646
1,794,305
11,435,447
8,963,681
Total Non-current Assets
Total Non-current Liabilities
Total Liabilities
SHAREHOLDERS’ EQUITY
Total Assets
13,866,206
10,905,765
Total Liabilities and Shareholders' Equity
The notes are an integral part of these financial statements.
5
2,430,759
1,942,084
13,866,206
10,905,765
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, 2014 and 2013
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
Capital
Stock
(Note 2.19)
Capital
Stock
Integral
Adjustment
Balances as of 01.01.2014
Reserves
Subtotal
Legal
Reserve
Discretionary
Reserve
Reserve for
Conduction
of New
Operations
Reserve for
Translation
Differences
Related to
Foreign
Operations
(Note 19)
Undistributed
Profits
Total
Shareholders’
Equity
24,000
26,622
50,622
10,125
58,000
1,328,274
5,350
489,713
1,942,084
Net Income for the Fiscal Year
-
-
-
-
-
-
-
619,025
619,025
Other Comprehensive Loss
Establishment of Reserve for Conduction of New
Operations Decided pursuant to Minutes of
Shareholders' Meeting No. 36 dated 04.04.2014
Distribution of Cash Dividends Decided pursuant to
Minutes of Shareholders’ Meeting No. 36 dated
04.04.2014
-
-
-
-
-
-
(5,350)
-
(5,350)
-
-
-
-
-
364,713
-
(364,713)
-
-
-
-
-
-
-
-
(125,000)
(125,000)
Balances as of 12.31.2014
24,000
26,622
50,622
10,125
58,000
1,692,987
-
619,025
2,430,759
Balances as of 01.01.2013
24,000
26,622
50,622
10,125
58,000
1,006,890
2,155
431,384
1,559,176
Net Income for the Fiscal Year
-
-
-
-
-
-
-
489,713
489,713
Other Comprehensive Income
Distribution of Cash Dividends Decided pursuant to
Minutes of Shareholders’ Meeting No. 35 dated
03.22.2013
Establishment of Reserve for Conduction of New
Operations decided pursuant to Minutes of
Shareholders' Meeting No. 35 dated 03.22.2013
-
-
-
-
-
-
3,195
-
3,195
-
-
-
-
-
-
-
(110,000)
(110,000)
Balances as of 12.31.2013
-
-
-
-
-
321,384
-
(321,384)
-
24,000
26,622
50,622
10,125
58,000
1,328,274
5,350
489,713
1,942,084
The notes are an integral part of these 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, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
Note
12.31.2014
12.31.2013
In Thousands of AR$
CASH FLOW AND CASH EQUIVALENTS FROM OPERATING ACTIVITIES
Net Income for the Fiscal Year
619,025
489,713
Plus Income Tax Accrued during the Fiscal Year
Plus Interest and Other Financial Expenses Accrued during the Fiscal Year, Net of
Interest and Other Financial Income Accrued
Adjustments to Calculate Net Cash Flow and Cash Equivalents from Operating
Activities:
322,267
262,915
815,026
494,765
38
1,447,274
989,278
Changes in Operating Assets
39
(3,233,358)
(2,932,164)
Changes in Operating Liabilities
NET CASH FLOW AND CASH EQUIVALENTS USED IN OPERATING
ACTIVITIES
40
(349,552)
(383,154)
(379,318)
(1,078,647)
CASH FLOW AND CASH EQUIVALENTS FROM INVESTING ACTIVITIES
Non-cash Equivalent Investments, Net of Collections
(71,970)
(30,082)
Payments for Property, Plant and Equipment Purchases
25
(52,068)
(45,642)
Payments for Intangible Assets Purchases
26
(49,919)
(50,315)
366
231
Collection of Dividends – Tarjetas Cuyanas S.A.
Collection for Transfer of Shares in Tarjeta Naranja Perú S.A.C.
Contribution to Associates
NET CASH FLOW AND CASH EQUIVALENTS USED IN INVESTING
ACTIVITIES
7,479
-
-
(17,234)
(166,112)
(143,042)
274,000
490,000
91,000
180,000
CASH FLOW AND CASH EQUIVALENTS FROM FINANCING ACTIVITIES
Bank Loans Obtained
33
Checking Account Overdrafts Obtained
Notes (“Obligaciones negociables”) Issued
35
Payment of Dividends – Fiscal Years 2013/2012
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
Net Collections / (Payments) from Derivative Transactions
1,080,300
788,541
(125,000)
(110,000)
(890,247)
(591,501)
(1,141,790)
(707,422)
(54,055)
(33,810)
167,796
(1,063)
1,350,979
1,644,489
752,983
1,659,234
207,553
437,545
654
3,605
NET INCREASE IN CASH AND CASH EQUIVALENTS
208,207
441,150
Cash and Cash Equivalents at the Beginning of the Fiscal Year
854,948
413,798
1,063,155
854,948
Increase in Accounts Payable
NET CASH FLOW AND CASH EQUIVALENTS GENERATED BY FINANCING
ACTIVITIES
GROSS INCREASE IN CASH AND CASH EQUIVALENTS
Increase Resulting from Foreign Exchange Gain Attributable to Cash and Cash
Equivalents
Cash and Cash Equivalents at Fiscal Year-End
37
The notes are an integral part of these financial statements.
7
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
Notes to the Financial Statements
(In the notes, figures are stated in thousands of Argentine Pesos, except otherwise noted)
Note 1 – General Information
Note 2 – Summary of Significant Accounting Policies
Note 3 – Financial Risk Management
Note 4 – Additional Information to the Financial Statements as of December 31, 2014 and 2013
Note 5 – Segment Reporting
Note 6 – Revenues from Services
Note 7 – Direct Expenses from Services
Note 8 – Revenues from Financing
Note 9 – Expenses from Financing
Note 10 – Net Income from Short-term Investments
Note 11 – Provision for Credit Losses
Note 12 – Personnel Expenses
Note 13 – Taxes and Rates
Note 14 – Advertising Expenses
Note 15 – Depreciation of Property, Plant and Equipment and Amortization of Intangible Assets
Note 16 – Other Operating Expenses
Note 17 – Income from Investments in Associates and Other Companies
Note 18 – Income Tax
Note 19 – Reserve for Translation Differences Related to Foreign Operations
Note 20 – Cash and Cash Equivalents
Note 21 – Investments
Note 22 – Receivables from Services
Note 23 – Other Receivables
Note 24 – Investments in Associates and Other Companies
Note 25 – Property, Plant and Equipment
Note 26 – Intangible Assets
Note 27 – Accounts Payable
Note 28 – Bank and Financial Loans
Note 29 – Compensation and Social Security Charges
Note 30 – Tax Charges
Note 31 – Other Liabilities
Note 32 – Provisions
Note 33 – Bank and Financial Loans
Note 34 – Financial Leases
Note 35 – Notes (“Obligaciones negociables”)
Note 36 – Derivative Transactions
Note 37 – Cash and Cash Equivalents of the Statement of Cash Flows
Note 38 – Adjustments to Calculate Net Cash Flow and Cash Equivalents from Operating Activities
Note 39 – Changes in Operating Assets
Note 40 – Changes in Operating Liabilities
Note 41 – Balances and Transactions with Companies and Related Parties
Note 42 – Restricted Assets
Note 43 – Tarjeta Naranja S.A.’s Investments Abroad
Note 44 – Information about Expenses and their Allocation under Section 64 Subsection b) of Law 19550
Note 45 – Foreign Currency Assets and Liabilities
Note 46 – Portfolio Assignment
Note 47 – Documentation Filing
Note 48 – 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 (Continued)
For the fiscal years ended December 31, 2014 and 2013
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 11, 2015.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The main accounting policies applied to the preparation of these financial statements are detailed below.
These policies have been consistently applied to all fiscal years presented, except otherwise noted.
2.1 Basis for Preparation
The Company’s financial statements have been prepared in accordance with International Financing
Reporting Standards (IFRS) and IFRIC interpretations applicable to entities reporting under IFRS.
The preparation of financial statements under IFRS requires using certain critical accounting estimates. In
addition, this preparation requires Management to make its judgment in the process of applying the
Company’s accounting policies. The areas involving a higher level of judgment or complexity or the areas in
which the assumptions and estimates are material to the financial statements are stated in Note 4.1.6
Significant Accounting Estimates and Judgments.
2.1.1 Changes in Accounting Policies and Disclosures
(a) New and Amended Standards and Interpretations Adopted by the Company
The following standards have been adopted by the Company for the first time in the fiscal year
commenced January 1, 2014:
Amendment to IAS 32 “Financial Instruments: Presentation” regarding the offsetting of financial assets
and liabilities: This change clarifies that the right of set-off should not be dependent on a future event. In
addition, such right must be legally enforceable for all the parties both in the normal course of business
and in the event of default, bankruptcy and insolvency. This amendment also considers the payment
and collection mechanisms.
Other standards, amendments and interpretations that are effective for the fiscal year commenced
January 1, 2014 are not material to the Company.
9
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.1 Basis for Preparation (Continued)
2.1.1 Changes in Accounting Policies and Disclosures (Continued)
(b) New and Amended Standards and Interpretations that Have Not Been Adopted by the Company Yet
Some new standards, amendments to standards and interpretations are effective for the fiscal years
commenced after January 1, 2014 and have not been applied in preparing these financial statements.
None of them are expected to have a material effect on the Company’s financial statements, except for
the following:
IFRS 9 “Financial Instruments” refers to the classification, measurement and recognition of financial
assets and liabilities. The full version of IFRS 9 was issued in July 2014. It replaces the IAS 39 guidance
related to the classification and measurement of financial instruments. IFRS 9 maintains but simplifies
the mixed measurement model and establishes three primary measurement categories for financial
assets: amortized cost, fair value with changes in comprehensive income and fair value with changes in
profit or loss. The classification basis depends on the entity’s business model and the contractual cash
flow characteristics of the financial asset. For investments in equity instruments the fair value
measurement is required with changes in profit or loss, with the irrevocable option at inception to
disclose fair value changes through the Statement of Comprehensive Income. Additionally, a new
impairment model is introduced based on the expected loss, which replaces the incurred loss model of
IAS 39. There were no changes regarding classification and measurement for financial liabilities, except
for the recognition of changes in the own credit risk in the Statement of Comprehensive Income for
designated liabilities at fair value with changes in profit and loss. IFRS 9 lessens the requirements for
the hedge effectiveness, replacing the effectiveness tests established until then by the regulation. It
requires an economic relationship between the hedged item and the hedging instrument and that the
hedging ratio be the same as that used by Management for risk management purposes. Documentation
is still required, but it is different from that currently required by IAS 39. This standard is effective for the
periods beginning on or after January 1, 2018. Its earlier adoption is permitted. The Company should
still assess the full impact of applying IFRS 9 in its financial statements.
IFRS 15 “Revenues from Contracts with Customers” deals with the revenue recognition and establishes
the principles to report useful information to users of financial statements about the nature, amount,
timing, and uncertainty of revenue and cash flows arising from the entity’s contracts with its customers.
Revenue is recognized when a customer gains control over a good or service and, thus, has the ability
to direct the use and obtain the benefits therefrom. This standard replaces IAS 18 “Revenue” and IAS
11 “Construction Contracts” and the related interpretations. This standard is effective for the fiscal years
beginning on or after January 1, 2017. Its earlier adoption is permitted. The Company is still assessing
the impact of applying IFRS 15 in its financial statements.
10
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.1 Basis for Preparation (Continued)
2.1.1 Changes in Accounting Policies and Disclosures (Continued)
(b) New and Amended Standards and Interpretations that Have Not Been Adopted by the Company Yet
(Continued)
Amendment to IAS 16 “Property, Plant and Equipment” and IAS 38 “Intangible Assets” regarding
depreciation and amortization. This amendment clarifies that revenue-based methods should not be
used to calculate the charge for depreciation, because revenues generated by an activity that includes
the use of an asset generally reflect different factors from the consumption of the economic benefits
thereof.
It also clarifies that the revenue is generally presumed to be inappropriate as a basis for measurement
of consumption of the economic benefits embodied in the intangible asset. This presumption may only
be rebutted in certain limited circumstances, when the intangible asset is stated as a revenue
measurement or when it may be proved that the revenue and the consumption of the economic benefits
of the intangible asset are highly correlated. This standard is effective for the fiscal years beginning on
or after January 1, 2016 and its earlier application is permitted.
There are no other IFRS or IFRIC interpretations that are not yet effective and that are expected to have
a material effect on the Company.
2.2 Segment Reporting
The entity has disclosed the segment reporting, as established by IFRS 8 “Operating Segments”.
An operating segment is that component of the entity whose financial information is separately available and
is regularly used by the General Management in decision-making regarding how to allocate resources and
assess the business performance.
Reportable segments are one or more operating segments with similar characteristics, distribution systems
and regulatory environments.
Operating segments are presented consistently with the internal information furnished to the maximum
authority in decision-making relating to the Company’s operation, which, in the case of Tarjeta Naranja S.A.,
is the Board of Directors.
2.3 Functional and Presentation Currency
The figures included in the financial statements of the different entities that are part of the Company were
measured using their functional currency, i.e., the currency of the primary economic environment where each
Company operates. The financial statements are presented in Argentine Pesos, which is the Company’s
functional and presentation currency. For investments abroad, the currency of each country has been
defined as functional currency since it is the currency of the primary economic environment where those
entities operate.
11
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.3 Functional and Presentation Currency (Continued)
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.
The Company has assessed and concluded that as of the date of the financial statements the conditions set
out in IAS 29 “Financial Reporting in Hyperinflationary Economies” are not met to consider Argentina as a
hyperinflationary economy. These conditions include that accumulated inflation over the last three years
approximates or exceeds 100%. As of the date of these financial statements, this metric, measured as a
variation in the Wholesale Domestic Price Index published by the Argentine Institute of Statistics and Census
has not been reached. Therefore, these financial statements have not been restated.
When the conditions set out in IAS 29 to consider Argentina as a hyperinflationary economy are met, the
related financial statements shall be restated as from the date of the last restatement (March 1, 2003) or the
last revaluation for the assets that may have been revalued in the transition to IFRS.
2.4 Foreign Currency Assets and Liabilities
Foreign currency assets and liabilities have been stated at the buying or selling exchange rates, as
appropriate, in force at fiscal year-end.
Monetary items denominated in foreign currency are translated again at the exchange rates effective as of
the closing date of the financial statements. Non-monetary items valued at their fair values, which are
denominated in foreign currency, are translated again at the exchange rates effective as of the date when fair
values were estimated. Non-monetary items, which were valued at historical cost in foreign currency, are not
translated again.
Foreign exchange gains / (losses) are recognized in the line “Expenses from Financing” in the statement of
income during the year when they arose.
2.5 Financial Instruments
Financial instruments, other than derivatives, are defined as any contract that simultaneously gives rise to a
financial asset of one entity and a financial liability or equity instrument of another entity.
IFRS 9 “Financial Instruments” introduces new classification and measurement requirements for financial
assets and liabilities and for the corresponding 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.
12
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.5 Financial Instruments (Continued)
Such IFRS permits its earlier application. The Company has opted for the earlier application of the first phase
of IFRS 9 as from the fiscal year commenced January 1, 2012.
As set out in IFRS 9, financial assets are classified into the following categories:
(a) Financial Assets at Amortized Cost
A financial asset is classified in this category if it meets the following conditions: The objective of the entity's
business model is to hold the asset in order to collect contractual cash flows and if the contractual terms
entitle collection of cash flows of principal and interest, on the specified dates.
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 (instruments issued by the Argentine Central Bank) and security deposits for instruments issued by
the Argentine Central Bank recorded in the account “Other Receivables”.
(b) Financial Assets at Fair Value
If both conditions referred to in the preceding point are not met, the asset is classified in the category “Fair
Value”.
In this category, the Company has classified the following financial assets: cash and cash equivalents
(except for investments in time deposits), investments in mutual funds and in government securities (except
for investments in instruments issued by the Argentine Central Bank), and balances under derivative
transactions.
2.6 Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, time deposits in financial institutions and other highly
liquid short-term investments with an original maturity of three months or less, and with a not very significant
risk of changes in their value.
The placements of funds in time deposits were valued at the estimated cash price upon the transaction, plus
interest and financial components accrued based on the effective rate calculated at that time.
Investments in mutual funds were measured at fair value. Changes in fair value are accounted for in the
statement of income.
2.7 Investments
The placements of funds in notes (“obligaciones negociables”) and government securities (instruments
issued by the Argentine Central Bank) 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.
The investments in mutual funds that do not comply with the definition of cash equivalents and the
investments in government securities (except for investments in instruments issued by the Argentine Central
Bank) have been measured at their fair value. Changes in fair value are accounted for in the statement of
income.
13
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.8 Receivables from Services and Other Receivables
Receivables from services include the amounts payable by customers, both for credit-card consumption and
loans granted.
Receivables from services have been initially recognized at market value and have been subsequently
valued at amortized cost using the effective interest rate method. They are disclosed net of the allowance for
credit losses, if applicable, calculated according to the guidelines set out in Note 2.9 below.
2.9 Impairment of Financial Assets – Allowance for Credit Losses
At each fiscal year-end, the Company analyzes whether there is objective evidence that a financial asset or
group of financial assets is impaired. The loss on impairment of financial assets is recognized when there is
objective evidence of impairment as a result of one or more events occurred after the initial recognition of the
financial asset, and such event has impact on estimated cash flows for such financial asset or group of
financial assets.
Under IFRS, for the calculation of the allowance for credit losses, the Company analyzes the historical losses
of its portfolio in order to estimate the losses related to receivables from services incurred as of the date of
the financial statements, but that have not been individually identified, according to the guidelines set out in
IAS 39.
2.9 Impairment of Financial Assets – Allowance for Credit Losses (Continued)
In addition, the historical ratios are adjusted, if appropriate, to include recent information that reflects the
economic conditions as of the closing date of the financial statements, trends of behavior in the industry,
geographic or customer concentrations in each portfolio segment and any other information that could affect
the estimation of the allowance for credit losses related to receivables from services. Several factors may
affect Management’s estimation of the allowance for credit losses, including the volatility of the likelihood of
loss, migrations and estimates of the severity of losses.
The book value of the asset is reduced through the account “Allowance for Credit Losses” and the amount of
loss or recovery, as the case may be, is recognized in the statement of income.
2.10 Investments in Associates and Other Companies
Associates are all the companies over which the Company exercises significant influence, but not control
and where it usually holds from 20% to 50% of voting rights. Investments in associates are recorded using
the equity method. Under this method, the investment is initially recognized at cost and the value at closing
increases or decreases to recognize Tarjeta Naranja S.A.’s interest in each company’s income (loss) after
the acquisition date.
Tarjeta Naranja S.A.’s interest in associates’ income / (loss) is recognized as income / (loss) from
investments in associates in the statement of income. Changes in shareholders’ equity that are not net
income / (loss) are charged to shareholders’ equity reserves (and, if appropriate, they are included in other
comprehensive income).
14
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.10 Investments in Associates and Other Companies (Continued)
As of December 31, 2014, 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.
2.10 Investments in Associates and Other Companies (Continued)
The following is information about the companies over which Tarjeta Naranja S.A. exercises significant
influence as of December 31, 2014:
Company
Cobranzas Regionales S.A.
Percentage of
Shares and
Voting Rights
Activity
Integral Advisory Services for Credit Risk
Analysis
5%
The following is information about the companies over which Tarjeta Naranja S.A. exercised significant
influence as of December 31, 2013:
Company
Cobranzas Regionales S.A.
Tarjeta Naranja Perú S.A.C.
(Note 43)
Percentage of
Shares and
Voting Rights
Activity
5%
Integral Advisory Services for Credit Risk
Analysis
24%
Commercial and Investing Activities
2.11 Derivatives
Differences originated from the application of the measurement criteria detailed in Note 36, corresponding to
derivatives, have been recognized in the statement of income, taking into consideration such items affect net
income for the fiscal year.
Derivatives are foreign currency forward contracts to cover cash flows exposure arising from Class XIII Notes
(“Obligaciones negociables”) and to mitigate the economic risk of appreciation or depreciation of currencies.
See also Note 4.c – Market Risk – Exchange Rate-associated Risks.
15
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.12 Income Tax
Income tax is recognized in these financial statements according to the deferred tax method, thus
recognizing the effect of the temporary differences between accounting and tax measurements of assets and
liabilities. The main temporary differences stem from the allowance for credit losses, the provision for
contingencies and, to a lesser extent, the differences with regard to the charge for depreciation of Property,
Plant and Equipment.
For purposes of determining the deferred assets and liabilities, the 35% tax rate that is expected to be in
force at the moment of their reversal has been applied to the temporary differences identified, under the legal
regulations enacted at the date of these financial statements. They are recognized in the statement of
financial position as long as it is deemed likely that the Company will have enough future taxable income
against which deferred income tax assets may be applied.
The breakdown and changes of deferred income tax assets and liabilities are explained in detail in Note 18.
2.13 Property, Plant and Equipment
Property, Plant and Equipment are recorded at historical cost, net of depreciation and impairment losses, if
applicable. The historical cost includes the expenses that are directly attributable to the acquisition of assets.
The costs of adapting and improving stores are capitalized as Property, Plant and Equipment only when
investments improve the conditions of the asset, irrespective of those originally established.
The costs subsequently incurred are included in the values of the asset only provided that it is likely for the
asset to generate future economic benefits and their cost is reliably measured. The value of replaced parts is
written off. The other maintenance and repair costs are charged to income during the fiscal year when they
are incurred.
Depreciation charges have been calculated following the straight-line method based on the estimated useful
life of the assets, applying annual rates enough so as to write off their values at the end of their estimated
useful life, according to the following parameters.
Group of Assets
Real Property
Cost of Adapting Stores
Furniture and Fixtures
Hardware
Facilities and Improvements
Years of Estimated Useful Life
50
Term of Lease Agreement
10
5
10
The residual value of assets is reviewed and adjusted, if necessary, as of each fiscal year-end. Changes in
the criteria originally established are recognized, as the case may be, as a change of estimate.
The value of assets is impaired at their recoverable value if the accounting residual value exceeds their
estimated recoverable value, upon being reviewed for impairment when events or circumstances that
indicate that their book value may not be recovered have arisen.
16
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.14 Intangible Assets
Intangible assets are those non-monetary assets, without physical substance, that are identifiable either
because of being separable or because of deriving from legal or contractual rights. They are recorded when
they may be reliably measured and it is likely for them to generate benefits for the Company.
(a) Patents and Software
Patents and software are initially recognized at cost as of the acquisition date. Patents and software that
have a definite useful life are recorded at cost, less the accumulated amortization. Amortization is calculated
by the straight-line method to adjust the cost to their estimated useful lives, which do not exceed five years.
(b) Other Intangible Assets
Other Intangible Assets amount to AR$ 5,027 as of December 31, 2014 and 2013, remaining unchanged in
both years. Such item is related to the acquisition of a business unit, which includes the publication, sale and
distribution of the magazine Convivimos. Such asset is not amortized because it has an indefinite useful life.
The possibility for them to generating future income is periodically examined in order to analyze the possible
impairment thereof.
2.15 Accounts Payable
Accounts payable represent the obligations to pay Merchants (“Comercios amigos”) and for goods and
services acquired from suppliers in the normal course of business. They are disclosed in current liabilities if
their payment falls due in a term shorter than or equal to one year.
They are initially recognized at fair value and subsequently measured at amortized cost using the effective
interest rate method.
2.16 Bank and Financial Loans and Other Liabilities
Bank and financial loans are initially recognized at fair value, net of the costs directly attributable to obtaining
them. They are subsequently valued at amortized cost using the effective interest rate method.
2.17 Leases
Leases are classified as financial when all the risks and benefits associated with the ownership of the asset
are substantially transferred. All the other ones are considered to be operating leases.
The assets acquired through a financial lease are recorded as non-current assets and are originally
measured at the lower of the present value of the minimum future payments or fair value. The related
payable to the lessor is reflected in liabilities. The financial cost is accrued based on the effective rate and is
included in “Financial Costs”.
Financial lease agreements are explained in detail in Note 34 to these financial statements.
17
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.18 Provisions
Provisions have been made as set out in IAS 37 to cover possible contingencies of a labor, commercial, civil
or tax nature and for miscellaneous risks that could lead to obligations for the Company. When estimating
their amounts and the possibility of occurrence, the opinion of the Company’s advisors and the insurance
policies purchased by the Company have been taken into consideration.
At the date of these financial statements, the Company's Management believes there are no elements that
make it possible to determine there may be other contingencies that could occur and thus generate a
negative impact on the economic and financial position of the Company.
The breakdown and changes of provisions are disclosed in Note 32.
2.19 Capital Stock
The capital stock is represented by non-endorsable registered ordinary shares, with a face value of AR$
10,000 per share.
CAPITAL STATUS
Shares
Number
Voting Rights
per Share
Type
Subscribed
Paid-in
In Thousands of AR$
Ordinary shares with a face value of AR$
2,400 10,000
2,400
1
24,000
24,000
2.20 Revenue Recognition
(a) Revenues from Services
Account Maintenance Fee
Revenues related to the account statement are recognized in the month of its issuance.
Fees
Fee revenues are recognized upon the customer’s purchase.
Revenues from Third-Party Portfolio Managed
Commissions earned on the third-party portfolio managed are recognized when the service is provided.
18
24,000
24,000
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.20 Revenue Recognition (Continued)
(a) Revenues from Services (Continued)
Card Renewal Fees
Revenues from card renewals are recognized upon billing to the customer, when all the necessary costs to
obtain the respective revenue are also incurred.
Other Revenues from Services
The other revenues from services are recognized in the fiscal year when the service was provided.
(b) Revenues from Financing
Interest earned is recorded based on the accrual period, by applying the effective rate method.
2.21 Statement of Cash Flows
The Company has chosen to prepare the statement of cash flows by the indirect method and considers cash
on hand, time deposits in financial institutions, highly-liquid short-term investments and with a not very
significant risk of changes in their value, and bank overdrafts with an original maturity of three months or less
to be cash. Overdrafts, if any, are classified as “Bank and Financial Loans” in current liabilities in the
Statement of Financial Position.
2.22 Set-off of Financial Instruments
Financial assets and liabilities are set off and their net amount is disclosed in the statement of financial
position when there is a legally enforceable right to set off the amounts recognized and the intention to
collect the asset and settle the liability simultaneously. Such right should not be dependent on future events
and must be legally enforceable both in the normal course of business and in the event of default,
bankruptcy and insolvency of the Company or the counterparty.
NOTE 3 – FINANCIAL RISK MANAGEMENT
The Company’s activities expose it to several financial risks: market risk (including the exchange rate risk
and the fair value interest rate risk), credit risk and liquidity risk.
There were no changes in the risk department or in risk management policies from the last fiscal year-end.
Information relating to December 31, 2014 and 2013 is disclosed in Note 4 below.
19
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
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,
2014 AND 2013
4.1 Financial Risk Management
4.1.1 Financial Risk Factors
The nature of the Company's operations and the characteristics of its customer base expose it to several
risks, primarily related to market risks (including the effects of changes in exchange rates and interest rates)
capital, credit and liquidity risks. In order to manage the volatility related to these exposures, Management
carries out an ongoing risk monitoring, measurement and identification process. For each exposure deriving
from the variation in exchange rates, the Company may perform transactions with derivatives in order to
manage potential adverse impacts on the Company's financial performance. Such transactions are carried
out according to internal policies and defined hedging practices.
4.1
Financial Risk Management (Continued)
4.1.1 Financial Risk Factors (Continued)
(a) Credit Risk
The credit risk arises from certain liquid assets, deposits with banks and financial institutions, as well as
customer credit exposures, including other remaining loans and committed transactions.
As regards the credit risk management related to cash, cash equivalents and deposits with banks and
financial institutions, the Company has an investment and credit assessment policy from the financial
institution. According to such policy, the entities in which it may invest are determined based on its credit
rating and the amount allocated to each of them should correspond with the financial institution’s and Tarjeta
Naranja’s shareholders' equity. The maximum percentage to be invested in an entity is also set considering
the total investments.
In addition, in connection with the risk associated with its customers' credit positions, the Company actively
monitors the credit reliability of its customers in order to mitigate the credit risk.
In order to manage and control the credit risk for the customer portfolio, the Company implemented a credit
and credit assessment policy for each customer so as to provide the following guidelines in this regard, with
the main features:







Use tools to analyze and assess the risk that best suits the customer's profile.
Establish guidelines to grant cards and loans based on the customer’s solvency.
Grant credit limits to each customer based on the assessment of each customer’s particular
situation, generally without requiring guarantees and taking into account the customer's monthly
income, among other aspects.
Credit atomization.
Geographic diversity.
Sixty-six per cent of accounts have a total credit limit lower than AR$ 24.
Monitor customers’ degree of compliance on an ongoing basis.
In this respect, five different credit limits have been defined in Tarjeta Naranja S.A.: (i) the Monthly Balance
Limit, which is set based on the applicant's net income and which is the maximum amount in the aggregate
for a customer’s monthly installments; (ii) the Long-term Purchase Limit, which is the maximum amount for
the customer to purchase in 6 or more installments; (iii) Total Indebtedness Limit, which is equivalent to the
aggregation of the Long-term Purchase Limit and three times the Monthly Balance Limit (“Total Indebtedness
Limit”): which is the maximum amount that may be owed to Tarjeta Naranja S.A. by customers for any and all
amounts owed; and (iv) the Maximum Balance Limit for Cash Advances, which represents 50% of the Longterm Purchase Limit, for a maximum amount of AR$ 10 ("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.
20
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
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,
2014 AND 2013 (Continued)
4.1 Financial Risk Management (Continued)
4.1.1 Financial Risk Factors (Continued)
(a) Credit Risk (Continued)
Furthermore, Tarjeta Naranja S.A. has a strong policy to address customers’ payment in arrears, as follows:
A)
At an early arrears stage, i.e., shorter than 90 days, the debtor has a series of products, each of which
is designed for a specific instance of arrears that allows the debtor to redress the situation of
temporary arrears in order to settle payables to the Company.
To qualify for the products, the customer always has to pay the first installment of the plan or deliver at
least 7% of the debt outstanding.
B)
At a late arrears stage, i.e., as from 90 days, the account is closed, all the terms granted are cancelled
and the outstanding amount is automatically assigned to a law firm for collection.
This term is restricted to 60 days for those customers that have a financing product with such a level of
arrears in payment.
The risk of default under a loan may vary in each customer’s particular case, depending — among other
factors — on each customer’s own economic situation. The Company assesses the uncollectibility risk and
sets allowances, which are calculated based on the criterion described under caption 2.9 in Note 2 to these
financial statements, and such allowances are deemed adequate for the recognition of possible losses
arising from credit losses.
Due to the nature of this activity, there is no risk of credit risk concentration in this group of debtors, since
credit cards are given to a large number of customers, being none of them significant, who carry out a very
wide range of activities.
In this sense and taking into account the foregoing, the Company has approved the following credit card
limits for customers as of December 31, 2014 and 2013:
12.31.2014
12.31.2013
In Thousands of AR$
7,270,753
4,772,717
37,659,755
24,571,621
54,364,478
36,176,641
Monthly Balance Limit
Long-term Purchase Limit
Total Indebtedness Limit
21
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
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,
2014 AND 2013 (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:
12.31.2014 12.31.2013
In Thousands of AR$
11,631,803
9,161,087
Receivables from Services
For the assets recorded in the financial statements, the exposures established are based on the net book
amounts of the respective allowance for credit losses, as disclosed in the statement of financial position.
Receivables from Services neither Due nor Impaired:
Loans that are neither due nor impaired are those in arrears for less than 30 days. However, a minimum
technical allowance is set therefor. The amount outstanding of such receivables from services is as follows:
12.31.2014 12.31.2013
In Thousands of AR$
Receivables from Services (A)
6,967,614
5,398,109
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:
12.31.2014 12.31.2013
In Thousands of AR$
Receivables from Services (B)
3,577,604
22
2,728,081
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
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,
2014 AND 2013 (Continued)
4.1 Financial Risk Management (Continued)
4.1.1 Financial Risk Factors (Continued)
(a) Credit Risk (Continued)
Receivables from Services Due and Impaired:
Loans that are due and impaired are those in arrears for more than 30 days and that, due to their
segmentation characteristics, have been included in the allowance for credit losses. The amount outstanding
of such receivables from services is as follows:
12.31.2014
12.31.2013
In Thousands of AR$
Receivables from Services (C)
1,086,585
1,034,897
12.31.2014
12.31.2013
In Thousands of AR$
Receivables from Services Addition of (A) + (B) + (C)
(Note 22)
11,631,803
9,161,087
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 Bank and Financial Loans, which includes instruments such as bank and financial loans,
checking account overdrafts, financial leases and notes (“obligaciones negociables”) publicly offered,
regarding the short- and long-term allocation, provided that the market allows it, the Company’s aim is to
keep a balanced allocation of debt due dates, giving priority to long-term debt.
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 (Continued)
For the fiscal years ended December 31, 2014 and 2013
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,
2014 AND 2013 (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, 2014:
Less
than 3
Months
From 3
to 12
Months
Accounts Payable
6,334,426
Bank and Financial Loans
1,224,299
Total Financial Liabilities
7,558,725
216,023
1,259,19
7
1,475,22
0
December 31, 2014
In Thousands of AR$
From 2
From 1 to
to 5
2 Years
Years
Over 5
Years
Total
Financial Liabilities
-
-
-
6,550,449
1,078,159
662,248
100,050
4,323,953
1,078,159
662,248
100,050
10,874,402
The table below breaks down financial liabilities by contractual due date considering the amounts accrued as
of December 31, 2013:
Less
than 3
Months
From 3
to 12
Months
December 31, 2013
In Thousands of AR$
From 1
From 2
to 2
to 5
Years
Years
Over 5
Years
Total
Financial Liabilities
Accounts Payable
3,636,699
Bank and Financial Loans
Total Financial Liabilities
429,574
4,066,273
1,562,46
0
1,184,08
7
2,746,54
7
-
-
-
5,199,159
793,618
872,510
105,330
3,385,119
793,618
872,510
105,330
8,584,278
(c) Market Risk
Exchange Rate-associated Risks
The Company’s operations are potentially exposed to foreign currency exchange rate fluctuations mainly due
to notes (“obligaciones negociables”) issued in U.S. dollars. As the Company’s policy is based on mitigating
the exchange rate risk a series of foreign currency forward transactions were performed. Additionally, given
the evolution of the most important economic variables in our country, the Company has performed
derivative transactions in order to mitigate the potential effects of such evolution on the Company’s course of
business.
24
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTA 4 – ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS AS OF DECEMBER 31,
2014 AND 2013 (Continued)
4.1. Financial Risk Management (Continued)
4.1.1 Financial Risk Factors (Continued)
(b) Market Risk (Continued)
Exchange Rate-associated Risks (Continued)
Derivatives are foreign currency forward contracts executed by the Company to cover its cash flows
exposure arising from Class XIII Notes (“Obligaciones negociables”) and to mitigate the potential effects of
significant fluctuations in macroeconomic variables, particularly those that have a higher impact on the
Company’s course of business. Note 36 lists the effective contracts as of December 31, 2014 and 2013.
Derivative instruments signed were agreed by the Company’s Management for the risk management of
financial variables and 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.
Derivative instruments are initially recognized at fair value at the beginning date of the contract and are
subsequently measured at fair value through profit and loss.
The U.S. dollar selling exchange rate increased by 31% during fiscal year 2014, while the U.S. dollar buying
exchange rate increased by 30%. The change related to the bank and financial loan undertaken by the
Company was reflected in the income net of income tax, in the amount of AR$ 275,312.
In addition, the Company has assets in foreign currency, the change of which resulted in a foreign exchange
gain during fiscal year 2014, which was reflected in income net of income tax, in the amount of AR$ 8,329.
The following table shows the sensitivity towards a possible 24% and 31% change p.a. both in the buying
and selling U.S. dollar exchange rates for the coming fiscal year. Both percentages have been determined
based on the evolution of the U.S. dollar exchange rate projected by the Company for fiscal year 2015 and
the average volatility suffered by the Argentine peso exchange rates with respect to the U.S. dollar over the
last twelve months, respectively:
Estimated Sensitivity on Debt, Net of Investments in Foreign Currency and
Derivative Contracts
As of December 31, 2014
(In Thousands of AR$)
Variation in the
Exchange Rate
(%)
Peso Devaluation with respect to
the Foreign Currency
Peso Devaluation with respect to
the Foreign Currency
Peso Revaluation with respect to
the Foreign Currency
Peso Revaluation with respect to
the Foreign Currency
Increase / (Decrease) in Income Net
of Income Tax
Exchange Rate
Derivatives
Effect on Income
Net of Income
Tax and
Shareholders’
Equity
24% (*)
(178,469)
77,843
(100,626)
31% (*)
(230,522)
100,547
(129,975)
(24%) (*)
178,469
(77,843)
100,626
(31%) (*)
230,522
(100,547)
129,975
(*) Considering that as of December 31, 2014, the U.S. dollar rate was AR$ 8.56 per U.S. dollar.
25
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTA 4 – ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS AS OF DECEMBER 31,
2014 AND 2013 (Continued)
4.1 Financial Risk Management (Continued)
4.1.1 Financial Risk Factors (Continued)
(c) Market Risk (Continued)
If the U.S. dollar increased by a 24% p.a., the other variables held constant, the annual loss net of income
tax due to the debt in foreign currency, net of foreign currency investments, would amount to AR$ 178,469
as a result of a higher expense for foreign exchange losses. Otherwise, the effect caused by derivative
contracts as of December 31, 2014 would be annual income net of income tax, amounting to AR$ 77,843.
Considering both effects, loss after income tax, resulting from the above-mentioned variation, would amount
to AR$ 100,626.
On the other hand, if the U.S. dollar decreased by 24% p.a., the effect on income net of income tax, caused
by the impact of that variation on the debt in foreign currency, net of investments, and on derivatives would
be income for the same amount.
If the U.S. dollar increased by a 31% p.a., the other variables held constant, the annual loss net of income
tax due to the debt in foreign currency, net of foreign currency investments would amount to AR$ 230,522 as
a result of a higher expense for foreign exchange losses. Otherwise, the effect caused by derivative
contracts as of December 31, 2014 would be annual income net of income tax, amounting to AR$ 100,547.
Considering both effects, loss after income tax, resulting from the above-mentioned variation, would amount
to AR$ 129,975.
On the other hand, if the U.S. dollar decreased by 31% p.a., the effect on income net of income tax, caused
by the impact of that variation on the debt in foreign currency, net of investments, and on derivatives would
be income for the same amount.
The variation in the U.S. dollar exchange rate during fiscal year 2013 was a 33% increase in both the selling
and buying exchange rates. The change related to the bank and financial loan in foreign currency
undertaken by the Company, which was a foreign exchange loss, was reflected in income net of income tax
in the amount of AR$ 225,277.
In addition, the Company had assets in foreign currency, the change of which resulted in a foreign exchange
gain during fiscal year 2013, which was reflected in income net of income tax, in the amount of AR$ 11,692.
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 these 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)).
26
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
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,
2014 AND 2013 (Continued)
4.1. Financial Risk Management (Continued)
4.1.1 Financial Risk Factors (Continued)
(c) Market Risk (Continued)
Interest Rate-associated Risks (Continued)
During fiscal years 2014 and 2013, the average Badlar was 22.54% and 16.99%, respectively. A charge to
loss net of income tax, was generated in the amount of AR$ 384,275 and AR$ 208,929, 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, 2014 and 2013:
As of December 31, 2014
Amount in AR$
Fixed
Interest Rate
Variable
Interest Rate
As of December 31, 2013
Percentage
Amount in AR$
Percentage
1,839,168
47%
1,543,190
47%
2,116,006
3,955,174
53%
1,762,621
3,305,811
53%
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, 2014. The variation percentage was determined
considering the evolution in Badlar forecasted by the Company for fiscal year 2015 and the changes are
considered fairly possible based on the market conditions observed:
Additional
Variation in
Interest Rate
Decrease in Interest Rate
Increase in Interest Rate
1.05%
1.05%
Increase /
(Decrease) in
Income (Loss),
Net of Income
Tax
In AR$
14,417
(14,417)
Increase /
(Decrease) in
Shareholders’
Equity
In AR$
14,417
(14,417)
If the applicable rate to the obligations assumed at variable rate increased by 105 basis points, the annual
additional loss net of income tax, would be AR$ 14,417 as a result of a higher interest expense. Otherwise, if
the rate decreased to the same extent, it would decrease by the same amount.
27
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
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,
2014 AND 2013 (Continued)
4.1. Financial Risk Management (Continued)
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, 2014 and 2013 is as follows:
December 31, 2014
December 31, 2013
In Thousands of AR$
11,435,447
(1,063,155)
10,372,292
Total Debt
Minus: Cash and Cash Equivalents
Net Debt
Total Shareholders’ Equity
Total Capital
8,963,681
(854,948)
8,108,733
2,430,759
1,942,084
12,803,051
10,050,817
4.27
4.18
Indebtedness Ratio
As of December 31, 2014 and 2013, capital status was as follows:
Approved by
Capital Stock
Face Value
Body
Date
Date of
Registration
with the Public
Registry of
Commerce
In Thousands of
AR$
Subscribed, Issued and Paid in
Capital Increase due to Merger with
Tarjetas del Sur S.A.
Capital Increase due to Merger with
Tarjeta Comfiar S.A.
Total
Extraordinary
Shareholders'
12,000 Meeting
Extraordinary
Shareholders'
6,600 Meeting
Extraordinary
Shareholders'
5,400 Meeting
24,000
09.04.95
12.12.95
02.16.01
05.03.01
10.02.03
03.24.04
In addition, in compliance with Section 4, Part I, Chapter IV, Title II of the regulations of the National
Securities Commission (C.N.V.), the following is disclosed:
2012
Capital Stock at the Beginning of the Fiscal
Year
Total
28
2013
2014
24,000
24,000
24,000
24,000
24,000
24,000
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
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,
2014 AND 2013 (Continued)
4.1. Financial Risk Management (Continued)
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).
The following table discloses the Company’s assets and liabilities, which are measured at fair value as of
December 31, 2014 and 2013:
As of December 31, 2014
In Thousands of AR$
Assets
Cash and Cash Equivalents
Investments
Total Assets
Liabilities
Bank and Financial Loans
Total Liabilities
As of December 31, 2013
In Thousands of AR$
Assets
Cash and Cash Equivalents
Investments
Other Receivables
Total Assets
Level 1
Total
Amount
1,063,155
12,729
1,075,884
1,063,155
12,729
1,075,884
243,762
243,762
243,762
243,762
Level 1
374,581
62,436
115,602
552,619
Total
Amount
374,581
62,436
115,602
552,619
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.
29
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
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,
2014 AND 2013 (Continued)
4.1. Financial Risk Management (Continued)
4.1.3 Fair Value Estimation (Continued)
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.
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, 2014 and 2013:
Assets / Liabilities Measured at Fair
Value
December 31, 2014
In Thousands of AR$
Financial Assets
Cash and Cash Equivalents
Investments
Receivables from Services
Other Receivables
Total Financial Assets
Financial Liabilities
Accounts Payable
Bank and Financial Loans
Total Financial Liabilities
Assets /
Liabilities at Fair
Value
Held for
Intermediation
Assets /
Liabilities at
Amortized Cost
Total
Amount
265,638
265,638
797,517
12,729
810,246
164,499
11,631,803
131,783
11,928,085
1,063,155
177,228
11,631,803
131,783
13,003,969
243,762
243,762
-
6,301,086
4,080,191
10,381,277
6,301,086
4,323,953
10,625,039
30
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: Nº 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
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,
2014 AND 2013 (Continued)
4.1. Financial Risk Management (Continued)
4.1.4.
Financial Instruments by Category (Continued)
Assets / Liabilities Measured at Fair
Value
December 31, 2013
In Thousands of AR$
Financial Assets
Cash and Cash Equivalents
Investments
Receivables from Services
Other Receivables
Total Financial Assets
Financial Liabilities
Accounts Payable
Bank and Financial Loans
Total Financial Liabilities
Assets /
Liabilities at
Fair Value
Held for
Intermediation
Assets /
Liabilities at
Amortized
Cost
Total
Amount
234,487
62,436
115,602
412,525
140,094
140,094
480,367
38,174
9,161,087
9,679,628
854,948
100,610
9,161,087
115,602
10,232,247
-
-
5,074,886
3,385,119
8,460,005
5,074,886
3,385,119
8,460,005
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.
(a) Estimated Loss for Impairment of Financial Assets Recorded at Amortized Cost
The Company follows the guidance in IAS 39 to calculate the allowance for credit losses related to its
portfolio of receivables from services and other receivables. For this estimation, the Company evaluates the
customers’ historical patterns of behavior, among other factors, as well as the existing macroeconomic
conditions at fiscal year-end, as explained in detail in Note 2.9.
(b) Income Tax
The Company is subject to income tax. As explained in detail in Note 2.12, income tax is recognized in
these financial statements by applying the deferred income tax method, thus recognizing the assets and
liabilities related to the temporary differences identified in calculating taxable income. Such differences will
have an effect on income tax and the provisions for deferred income taxes in the year when they are made.
31
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: Nº 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
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,
2014 AND 2013 (Continued)
4.1. Financial Risk Management (Continued)
4.1.6. Significant Accounting Estimates and Judgments (Continued)
(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.
32
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
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 12.31.2014
Córdoba
Northwest
of
Argentina
Central
Region
Patagonia
Northeast
of
Argentina
Greater
Buenos
Aires
South
Inside the
Province
of
Buenos
Aires
Greater
Buenos
Aires
West
Gold
Nonallocable
CABA
Total
In Thousands of AR$
Revenues from Services
Direct Expenses from Services
411,324
(50,727)
336,812
(41,538)
631,695
(77,904)
326,970
(40,324)
566,811
(69,903)
171,550
(21,157)
174,843
(21,562)
124,050
(15,299)
231,565
(28,558)
55,846
(6,887)
-
3,031,466
(373,859)
Net Income from Services
Revenues from Financing
360,597
346,154
295,274
317,411
553,791
614,829
286,646
327,668
496,908
541,374
150,393
145,939
153,281
140,629
108,751
104,948
203,007
223,647
48,959
41,973
-
2,657,607
2,804,572
Expenses from Financing
(178,330)
(163,523)
(316,745)
(168,807)
(278,903)
(75,184)
(72,449)
(54,067)
(115,218)
(21,623)
(121,298)
(1,566,147)
Net Income from Financing
Net Income from Short-term
Investments
167,824
153,888
298,084
158,861
262,471
70,755
68,180
50,881
108,429
20,350
(121,298)
1,238,425
25,428
23,317
45,166
24,071
39,770
10,721
10,331
7,710
16,429
3,083
-
206,026
Provision for Credit Losses
(45,084)
(40,250)
(71,227)
(34,586)
(90,643)
(52,165)
(53,903)
(22,465)
(44,667)
(15,958)
-
(470,948)
(1,424)
(1,382)
(2,905)
(1,146)
(3,325)
(2,127)
(1,765)
(1,537)
(1,598)
(1,706)
(8,545)
(27,460)
(253,358)
(4)
(221,894)
(2)
(393,470)
(2)
(194,960)
(16)
(363,290)
(2)
(178,312)
(185,341)
(116,347)
(3)
(174,441)
(105,567)
(23,762)
(439,532)
(23,791)
(2,626,512)
-
-
-
-
-
-
-
-
-
-
2,136
(322,267)
2,136
(322,267)
253,983
208,949
429,437
238,884
341,875
(737)
(9,217)
26,993
107,156
(50,839)
(913,268)
633,216
-
-
-
-
-
-
-
-
-
-
(14,191)
(14,191)
253,983
208,949
429,437
238,884
341,875
(737)
(9,217)
26,993
107,156
(50,839)
(927,459)
619,025
Depreciation of Property, Plant and
Equipment
Amortization of Intangible Assets
Other Operating Expenses
Income from Investments in Associates
and Other Companies
Income Tax
Net Income / (Loss) for the Fiscal
Year – Continuing Operations
Loss from Discontinued Operations
Net Income / (Loss) for the Fiscal
Year
33
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
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 12.31.2013
Córdoba
Northwest
of
Argentina
Central
Region
Patagonia
Northeast
of
Argentina
Greater
Buenos
Aires
South
Inside the
Province
of
Buenos
Aires
Greater
Buenos
Aires
West
Gold
Nonallocable
CABA
Total
In Thousands of AR$
Revenues from Services
Direct Expenses from Services
343,853
(40,266)
274,469
(32,141)
508,385
(59,533)
271,306
(31,771)
447,043
(52,350)
131,739
(15,427)
134,941
(15,802)
94,172
(11,028)
184,892
(21,651)
37,770
(4,423)
-
2,428,570
(284,392)
Net Income from Services
Revenues from Financing
303,587
257,357
242,328
224,955
448,852
449,879
239,535
266,979
394,693
393,582
116,312
105,049
119,139
102,424
83,144
73,495
163,241
167,057
33,347
25,074
-
2,144,178
2,065,851
Expenses from Financing
(105,718)
(92,407)
(184,802)
(109,670)
(161,676)
(43,152)
(42,074)
(30,190)
(68,624)
(10,300)
-
(848,613)
Net Income from Financing
Net Income from Short-term
Investments
151,639
132,548
265,077
157,309
231,906
61,897
60,350
43,305
98,433
14,774
-
1,217,238
6,401
5,595
11,189
6,640
9,789
2,613
2,548
1,828
4,155
624
-
51,382
Provision for Credit Losses
(45,875)
(37,084)
(75,225)
(37,587)
(85,948)
(59,266)
(67,047)
(23,080)
(42,305)
(16,127)
-
(489,544)
(1,350)
(1,193)
(2,519)
(1,053)
(2,828)
(1,763)
(1,697)
(1,867)
(1,553)
(1,403)
(7,301)
(24,527)
(204,017)
(170,204)
(310,213)
(163,593)
(287,803)
(163,021)
(168,228)
(99,370)
(141,547)
(86,475)
(14,419)
(325,710)
(14,419)
(2,120,181)
-
-
-
-
-
-
-
-
-
-
1,650
(262,915)
1,650
(262,915)
210,385
171,990
337,161
201,251
259,809
(43,228)
(54,935)
3,960
80,424
(55,260)
(608,695)
502,862
-
-
-
-
-
-
-
-
-
-
(13,149)
(13,149)
210,385
171,990
337,161
201,251
259,809
(43,228)
(54,935)
3,960
80,424
(55,260)
(621,844)
489,713
Depreciation of Property, Plant and
Equipment
Amortization of Intangible Assets
Other Operating Expenses
Income from Investments in Associates
and Other Companies
Income Tax
Net Income / (Loss) for the Fiscal
Year – Continuing Operations
Loss from Discontinued Operations
Net Income / (Loss) for the Fiscal
Year
34
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
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 12.31.2014
Córdoba
Northwest
of
Argentina
Central
Region
Patagonia
Northeast
of
Argentina
Greater
Buenos
Aires
South
Greater
Buenos
Aires
West
Inside
the
Province
of
Buenos
Aires
Gold
Nonallocable
CABA
Total
In Thousands of AR$
ASSETS
Cash and Cash Equivalents
Receivables from Services
Other Assets
Property, Plant and Equipment
Total Assets
166,131
134,332
252,233
120,079
186,046
42,651
38,933
33,602
76,048
13,100
-
1,063,155
1,817,608
1,469,705
2,759,643
1,313,764
2,035,494
466,640
425,964
367,635
832,025
143,325
-
11,631,803
-
-
-
-
-
-
-
-
-
-
988,945
988,945
18,361
9,684
21,110
7,640
20,311
7,573
6,849
4,930
5,661
11,541
68,643
182,303
2,002,100
1,613,721
3,032,986
1,441,483
2,241,851
516,864
471,746
406,167
913,734
167,966
1,057,588
13,866,206
LIABILITIES
Accounts Payable
997,235
752,023
1,395,392
851,869
1,170,808
297,433
302,976
234,427
448,351
99,935
-
6,550,449
Bank and Financial Loans
Compensation and Social Security
Charges
675,669
546,341
1,025,857
488,373
756,665
173,467
158,346
136,663
309,293
53,279
-
4,323,953
20,017
17,329
32,711
12,829
31,166
16,658
16,859
11,016
13,971
8,866
68,512
249,934
Other Liabilities
Total Liabilities
-
-
-
-
-
-
-
-
-
-
311,111
311,111
1,692,921
1,315,693
2,453,960
1,353,071
1,958,639
487,558
478,181
382,106
771,615
162,080
379,623
11,435,447
35
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
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 12.31.2013
Córdoba
Northwest
of
Argentina
Central
Region
Patagonia
Northeast
of
Argentina
Greater
Buenos
Aires
South
Greater
Buenos
Aires
West
Inside
the
Province
of
Buenos
Aires
Gold
Nonallocable
CABA
Total
In Thousands of AR$
ASSETS
Cash and Cash Equivalents
Receivables from Services
Other Assets
Property, Plant and Equipment
Total Assets
130,299
102,949
195,865
99,961
150,711
39,416
36,722
27,002
61,844
10,179
-
854,948
1,396,198
1,103,138
2,098,772
1,071,119
1,614,927
422,353
393,486
289,342
662,680
109,072
-
9,161,087
-
-
-
-
-
-
-
-
-
-
730,625
730,625
18,174
7,099
16,594
6,328
16,942
8,034
7,811
5,476
6,319
11,782
54,546
159,105
1,544,671
1,213,186
2,311,231
1,177,408
1,782,580
469,803
438,019
321,820
730,843
131,033
785,171
10,905,765
LIABILITIES
Accounts Payable
827,360
585,621
1,102,452
691,236
906,494
238,844
245,618
174,553
353,998
72,983
-
5,199,159
Bank and Financial Loans
Compensation and Social Security
Charges
515,911
407,621
775,518
395,790
596,733
156,064
145,397
106,915
244,867
40,303
-
3,385,119
15,466
13,630
26,021
10,309
24,981
14,076
14,869
8,971
11,499
8,426
52,439
200,687
Other Liabilities
Total Liabilities
-
-
-
-
-
-
-
-
-
-
178,716
178,716
1,358,737
1,006,872
1,903,991
1,097,335
1,528,208
408,984
405,884
290,439
610,364
121,712
231,155
8,963,681
36
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 6 – REVENUES FROM SERVICES
12.31.2014
12.31.2013
In Thousands of AR$
Account Maintenance Fee
Fees
Revenues from Third-Party Portfolio Managed
Card Renewal Fees
Granting Fees
TN Personal Loans Granting Fees
Other Revenues from Services
Total
986,666
915,752
292,876
166,782
669,390
3,031,466
722,661
715,661
408,444
105,519
6,171
2,415
467,699
2,428,570
NOTE 7 – DIRECT EXPENSES FROM SERVICES
12.31.2014
12.31.2013
In Thousands of AR$
Printing and Distribution Expenses
Expenses from Call Center Services
Openings of Accounts
Special Promotions
Other Expenses from Services
Total
(159,681)
(66,218)
(17,140)
(22,755)
(108,065)
(373,859)
(111,457)
(69,409)
(16,768)
(10,993)
(75,765)
(284,392)
NOTE 8 – REVENUES FROM FINANCING
12.31.2014
12.31.2013
In Thousands of AR$
Merchants (“Comercios amigos”) Interest
Interest on Financing through Credit Cards
Interest on Personal Loans
Compensatory Interest
Penalty Interest
Revenues from Lawsuits
Gain on Derivative Transactions
Total
647,743
1,323,534
249,375
303,440
149,451
20,647
110,382
2,804,572
37
597,379
940,014
53,048
215,994
106,384
17,089
135,943
2,065,851
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 9 – EXPENSES FROM FINANCING
12.31.2014
12.31.2013
In Thousands of AR$
Interest on Notes ("Obligaciones negociables")
Bank Interest
Foreign Exchange Loss
Loss on Derivative Transactions
Tax on Bank Debits and Credits
Other Expenses from Financing
Total
(480,912)
(318,573)
(410,743)
(323,054)
(18,758)
(14,107)
(1,566,147)
(289,558)
(215,346)
(328,593)
(11,489)
(3,627)
(848,613)
NOTE 10 – NET INCOME FROM SHORT-TERM INVESTMENTS
12.31.2014
12.31.2013
In Thousands of AR$
Interest on Time Deposits
Interest on Government Securities
Income from Notes (“Obligaciones negociables”)
Income from Mutual Funds
Total
67,011
15,467
1,540
122,008
206,026
28,721
851
2,102
19,708
51,382
NOTE 11 – PROVISION FOR CREDIT LOSSES
12.31.2014
12.31.2013
In Thousands of AR$
Provision for Credit Losses
Recovery of Credit Losses
Total
(554,883)
83,935
(470,948)
(542,111)
52,567
(489,544)
NOTE 12 – PERSONNEL EXPENSES
12.31.2014
12.31.2013
In Thousands of AR$
Compensation and Social Security Charges
Bonuses for the Staff
Entertainment and Travel Expenses and Per Diem
Other Personnel Expenses
Total
(1,049,286)
(126,977)
(22,685)
(29,748)
(1,228,696)
38
(833,439)
(98,929)
(26,722)
(34,640)
(993,730)
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 13 – TAXES AND RATES
12.31.2014
12.31.2013
In Thousands of AR$
(324,805)
(240,096)
(123,036)
(99,575)
(108,961)
(73,800)
(11,313)
(9,205)
(568,115)
(422,676)
Turnover Tax
Tax on Bank Debits and Credits
Trade and Industry Tax
Other Taxes, Rates and Contributions
Total
NOTE 14 – ADVERTISING EXPENSES
12.31.2014
12.31.2013
In Thousands of AR$
(62,803)
(61,526)
(12,454)
(10,809)
(27,923)
(23,348)
(12,588)
(9,895)
(115,768)
(105,578)
National Advertising
Commercial Promotions
Regional Advertising
Other Advertising
Total
NOTE 15 – DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT AND AMORTIZATION OF
INTANGIBLE ASSETS
12.31.2014
12.31.2013
In Thousands of AR$
(27,460)
(24,527)
(23,791)
(14,419)
(51,251)
(38,946)
Depreciation of Property, Plant and Equipment
Amortization of Intangible Assets
Total
39
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 16 – OTHER OPERATING EXPENSES
12.31.2014
12.31.2013
In Thousands of AR$
Rentals
Regular Mail Services
Donations
Electricity, Natural Gas and Communications
Bank and Financial Expenses
Collection Expenses
Expenses for Commercial Reports and Procedures for the
Collection of Amounts in Arrears
Directors and Supervisory Committee Members' Fees
Third Parties’ Fees
Insurance and Security Services
Stationery and Office Supplies
Maintenance of Equipment and Real Property
Cleaning Expenses
Other Income and Expenses
Total
(60,691)
(20,378)
(2,022)
(36,717)
(22,281)
(100,078)
(51,044)
(25,358)
(1,276)
(33,334)
(15,972)
(72,858)
(40,560)
(14,675)
(108,234)
(89,538)
(22,585)
(31,488)
(16,524)
(148,162)
(713,933)
(39,991)
(11,183)
(118,126)
(63,985)
(16,803)
(39,155)
(12,809)
(96,302)
(598,196)
NOTE 17 – INCOME FROM INVESTMENTS IN ASSOCIATES AND OTHER COMPANIES
12.31.2014
12.31.2013
In Thousands of AR$
Income from Investment in Tarjetas Cuyanas S.A.
Income from Investment in Cobranzas Regionales S.A.
Total
40
1,955
181
2,136
1,341
309
1,650
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
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
Payable
Income Tax
Accrued during
the Fiscal Year
In Thousands of AR$
Balances at the Beginning of Fiscal Year 2013
Decrease in Taxable Income during Fiscal Year
2012 (2)
Payment of Income Tax – 2012 (3)
Income Tax Accrued during the Fiscal Year –
Continuing Operations
Balances as of December 31, 2013 – Continuing
Operations
Income Tax Accrued during the Fiscal Year –
Discontinued Operations
Balances as of December 31, 2013 –
Discontinued Operations
138,841
(279,867)
(231,803)
1,136
278,731
107
-
(303,039)
(263,022)
(303,039)
(262,915)
(2,083)
(2,083)
-
(2,083)
(2,083)
Balances as of December 31, 2013
Increase in Taxable Income during Fiscal Year 2013
177,829
(305,122)
(264,998)
2,038
(762)
1,276
-
305,884
-
(362,878)
(323,543)
(362,878)
(322,267)
643
643
(1)
(1,029)
40,017
(4)
177,829
-
(5)
(4)
Payment of Income Tax – 2013 (6)
Income Tax Accrued during the Fiscal Year –
Continuing Operations
Balances as of December 31, 2014 – Continuing
Operations
Income Tax Accrued during the Fiscal Year –
Discontinued Operations
Balances as of December 31, 2014 –
Discontinued Operations
219,202
-
643
643
Balances as of December 31, 2014
219,202
(362,235)
(321,624)
39,335
-
(7)
(7)
(1) It corresponds to the income tax amount that, pursuant to the estimations made by the Company’s Management as of February 13,
2013, should have been paid in May 2013 according to the taxable income accrued during the fiscal year ended December 31,
2012.
(2) It corresponds to a correction of the provision for income tax estimated at the end of fiscal year 2012.
(3) It corresponds to income tax for fiscal year 2012 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 17,
2014, should have been paid in May 2014 according to the taxable income accrued during the fiscal year ended December 31,
2013.
(5) It corresponds to a correction of the provision for income tax estimated at the end of fiscal year 2013.
(6) It corresponds to income tax for fiscal year 2013 paid by the Company.
(7) It corresponds to the income tax amount that, pursuant to the estimations made by the Company’s Management at the date of these
financial statements, shall be paid in May 2015 according to the taxable income accrued during the fiscal year ended December 31,
2014.
41
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
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, 2014 and December 31, 2013, the net assets derived from the information included in
the previous table amount to AR$ 219,202 and AR$ 177,829, respectively. Their composition as of those
dates is detailed below:
Balances as of
Increase /
Balances as of
December 31,
(Decrease)
December 31,
2013
during
the
Fiscal
2014
In Thousands of AR$
Receivables from Services
Investments
Property, Plant and Equipment
Accounts Payable
Compensation and Social Security Charges
Bank and Financial Loans
Provision for Contingencies
Other Financial Transactions
Others
Totals
173,469
174
(26)
44
246
(482)
5,702
(1,298)
177,829
1,332
(4,467)
246
249
482
(193)
42,617
1,107
41,373
174,801
(4,293)
220
44
495
5,509
42,617
(191)
219,202
The income tax amount estimated by Management, net of prepayments, as of December 31, 2014 and
December 31, 2013 is as follows:
Provision for Income Tax – Current – Continuing Operations
Provision for Income Tax – Current – Discontinued
Operations
Prepayments
Current Income Tax Payable
12.31.2014
(362,878)
12.31.2013
(303,039)
643
285,736
(76,499)
(2,083)
305,057
(65)
The following table shows the reconciliation of income tax charged to loss as of December 31, 2014 and
2013 to that which would result from applying the tax rate in force to book income:
12.31.2014
12.31.2013
In Thousands of AR$
Income for the Fiscal Year before Income Tax – Continuing
Operations
Tax Rate in Force
Loss for the Fiscal Year at the Tax Rate – Continuing Operations
Permanent Differences at the Tax Rate:
- Income from Interest in Other Companies
- Non-taxable Income (1)
- Donations and Other Non-deductible Expenses
- Others
- Loss on Portfolio Sale
Difference between the Tax Return and the Provision for Income
Tax – Fiscal Years 2013 / 2012
Total Income Tax Charge for the Fiscal Year – Continuing
Operations
955,483
35%
(334,419)
765,778
35%
(268,022)
748
7,345
(337)
3,923
(803)
578
6,285
(177)
(1,686)
-
1,276
107
(322,267)
(262,915)
(1) It corresponds to the income / (loss) from transactions carried out in Tierra del Fuego, net of indirect charges.
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 (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 18 – INCOME TAX (CONTINUED)
12.31.2014
12.31.2013
In Thousands of AR$
Loss for the Fiscal Year before Income Tax – Discontinued
Operations
Tax Rate in Force
Income for the Fiscal Year at the Tax Rate – Discontinued
Operations
Permanent Differences at the Tax Rate:
- Loss from Interest in Other Companies
- Loss from Divestment in Tarjeta Naranja Perú S.A.C.
Total Income Tax Charge for the Fiscal Year – Discontinued
Operations
(14,834)
35%
(11,067)
35%
5,192
3,873
(2,528)
(2,021)
(5,956)
-
643
(2,083)
The following chart shows the reconciliation of income tax charged to loss to tax assessed for the fiscal year
for tax purposes:
12.31.2014
12.31.2013
In Thousands of AR$
Total Income Tax Charge Recorded for the Fiscal Year
- Temporary Differences at the Tax Rate
- Adds:
Accrual of Interest on Investments
Allowance for Credit Losses
Reversal of the Provision for Contingencies
Bonuses Payable
Depreciation of Property, Plant and Equipment
Valuation of Bank and Financial Loans
Other Financial Transactions
Others
Difference between the Tax Return and the Provision for Income Tax –
Fiscal Years 2013 / 2012
Total Tax for the Fiscal Year Determined for Tax Purposes –
Continuing Operations
Total Tax for the Fiscal Year Determined for Tax Purposes –
Discontinued Operations
Income Tax Prepayments
Income Tax Payable
43
(322,267)
(262,915)
4,467
(1,332)
193
(249)
(246)
(482)
(42,617)
(1,107)
(276)
(38,611)
(1,312)
(193)
(301)
(186)
1,891
762
(1,136)
(362,878)
(303,039)
643
285,736
(76,499)
(2,083)
305,057
(65)
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
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 is as follows:
12.31.2014
12.31.2013
In Thousands of AR$
5,350
2,155
Balance at the Beginning of the Reserve for Translation
(Decrease) / Increase in the Reserve for Translation Related to Foreign
Operations for the Fiscal Years Ended December 31, 2014 and 2013
Balance of the Reserve for Translation Differences Related to Foreign
Operations
(5,350)
3,195
-
5,350
NOTE 20 – CASH AND CASH EQUIVALENTS
12.31.2014
12.31.2013
In Thousands of AR$
Cash in Banks – Checking Account
Cash and Petty Cash
Time Deposits
Mutual Funds
Deposits Abroad (Note 45)
Collections to be Deposited
Total
97,510
88,752
797,517
11,148
68,228
1,063,155
83,312
99,258
480,367
140,094
2,737
49,180
854,948
NOTE 21 – INVESTMENTS
12.31.2014
12.31.2013
In Thousands of AR$
Current
Government Securities
Notes (“Obligaciones negociables”)
Mutual Funds
Total
177,228
177,228
38,174
62,436
100,610
Book Value
as of
12.31.2014
(*)
Book Value
as of
12.31.2013
(*)
Currency
Investment
Amount in
Thousands of
US$
09/19/2012
US$
-
06/23/2014
Fixed at
7.75%
-
15,243
10/19/2012
US$
Notes (“Obligaciones
negociables”) Cresud Class
X Series 5 Tranche II
Notes (“Obligaciones
negociables”) YPF Class IX
3,500
10/19/2014
Fixed at 5%
-
22,931
-
38,174
Investment
Date
Maturity Date
Total
(*) It corresponds to the principal and interest amounts as of the indicated dates in Argentine Pesos.
44
Interest
Rate / Price
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 21 – INVESTMENTS (CONTINUED)
Investment
Date
Currency
10/10/2014
AR$
10/14/2014
AR$
10/15/2014
AR$
10/17/2014
AR$
10/17/2014
AR$
10/21/2014
AR$
10/22/2014
AR$
12/05/2014
AR$
12/05/2014
AR$
12/17/2014
AR$
L21E5 – Peso-denominated
Domestic Lebac
L14E5 – Peso-denominated
Domestic Lebac
L14E5 – Peso-denominated
Domestic Lebac
L07E5 – Peso-denominated
Domestic Lebac
L14E5 – Peso-denominated
Domestic Lebac
L14E5 – Peso-denominated
Domestic Lebac
L14E5 – Peso-denominated
Domestic Lebac
L25F5 – Peso-denominated
Domestic Lebac
L25F5 – Peso-denominated
Domestic Lebac
L18M5 – Peso-denominated
Domestic Lebac
10/28/2014
US$
BONAD 2016
Investment
Book Value
as of
12.31.2014
(*)
Maturity Date
Interest
Rate / Price
10,000
01/21/2015
0.931814
9,855
-
10,000
01/14/2015
0.938076
9,905
-
10,000
01/14/2015
0.938498
9,904
-
20,000
01/07/2015
0.946555
19,905
-
20,000
01/14/2015
0.941858
19,811
-
40,000
01/14/2015
0.943850
39,626
-
20,000
01/14/2015
0.946209
19,819
-
900
02/25/2015
0.947171
866
-
15,500
02/25/2015
0.947012
14,910
-
21,000
03/18/2015
19,898
-
1,500
10/28/2016
0.938665
Fixed at
1.75%
12,729
-
177,228
-
Total
(*) It corresponds to the principal and interest amounts as of the indicated dates in Argentine Pesos.
Investment
Currency
Fima Capital Plus C
AR$
Axis Renta Fija Cobertura
AR$
Book Value
as of
12.31.2013
(*)
Amount in
Thousands
Maturity Date
Book Value as of
12.31.2014 (*)
Book Value as
of 12.31.2013 (*)
-
60,211
-
2,225
-
62,436
Settleable within 72
hours
Settleable within 24
hours
Total
(*) It corresponds to the principal and return as of the indicated dates in Argentine Pesos.
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 (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 22 – RECEIVABLES FROM SERVICES
12.31.2014
12.31.2013
In Thousands of AR$
11,999,069
9,507,916
(722,753)
(710,592)
179,974
224,136
(7,876)
(4,960)
11,448,414
9,016,500
Current
Credit Card Debtors
Allowances for Credit Losses – Credit Card
Personal Loans Debtors
Allowances for Credit Losses – Personal Loans
Total
Non-current
Credit Card Debtors
Personal Loans Debtors
Total
183,350
39
183,389
143,257
1,330
144,587
Changes in the Account Allowance for Credit Losses
12.31.2014
12.31.2013
In Thousands of AR$
715,552
511,315
554,883
542,111
(529,078)
(337,874)
(10,728)
730,629
715,552
Balances at the Beginning of the Fiscal Year
Increases for the Fiscal Year
Applications and Uses
Portfolio Sale
Balances at Fiscal Year-end
Memorandum Accounts
Additionally, as of December 31, 2014 and 2013, the Company recorded under memorandum accounts
AR$ 1,159,068 and AR$ 969,433, respectively, in respect of those receivables from services that are
considered uncollectible, considering as such those in arrears for more than 360 days.
NOTE 23 – OTHER RECEIVABLES
Current
Sundry Receivables
Deposits for Checking Account Attachments (Note 42)
Prepaid Expenses
Life Insurance Receivable
Commissions Receivable
Advance Payments to Suppliers
Balances under Derivative Transactions (Note 36)
Security Deposits for Derivative Transactions (Note 42)
Total
Non-current
Sundry Receivables
Security Deposits (Note 42)
Prepaid Expenses
Total
46
12.31.2014
12.31.2013
In Thousands of AR$
34,129
570
16,339
12,275
86,375
4,703
131,783
286,174
44,736
572
13,237
6,683
46,329
3,052
115,602
230,211
194,788
1,514
1,249
197,551
108,255
1,993
1,690
111,938
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 24 – INVESTMENTS IN ASSOCIATES AND OTHER COMPANIES
Issuer Information
Issuing Company
Interest
Percentage
Book Value
as of
12.31.2014
Book Value
as of
12.31.2013
Principal Line of
Business
Class of
Shares
Number of
Shares
(2)
Face Value
of Shares
(1)
Balances as of 12.31.2014
Capital
(1)
In Thousands of AR$
Cobranzas Regionales S.A.
5%
Tarjeta Naranja Perú S.A.C.
24%
Tarjetas Cuyanas S.A.
1%
Totals
917
737
-
21,483
5,640
4,051
6,557
26,271
Shareholders’
Equity
Income /
(Loss)
In Thousands of AR$
Integral Advisory
Services for Credit
Risk Analysis
Commercial and
Investing Activities
Credit Card
Administrator
(1) Values are stated in each company’s local currency based on its country of origin.
(2) Values are stated in units.
(3) Balances as of March 31, 2014.
47
Ordinary
registered
shares
Ordinary
registered
shares
Ordinary
registered
shares
10,000
0.1
1,000
75,412,428
0.001
75,412
3,233,283
0.01
32,333
(3)
18,349
3,614
83,207
(3) (6,307)
582,702
195,763
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
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
Value at
Fiscal
Year-end
Transfers
Accumulated
at the
Beginning of
the Fiscal
Year
NET BOOK VALUE
For the
Fiscal
Year
Deletes
Accumulated
at Fiscal
12.31.2014
Year-end
12.31.2013
In Thousands of AR$
Land
Real Property
Cost of Adapting Stores
Furniture and Fixtures
Hardware
Facilities and Improvements
Assets at Warehouse
26,935
24,054
117,244
28,150
66,555
45,807
(13)
(12)
(331)
(59)
1,594
11,736
5,469
799
7,707
132
2,054
20,625
1,204
26,935
25,635
129,112
35,661
87,648
54,659
(5,119)
(69,105)
(17,091)
(44,536)
(21,909)
295
-
(378)
(11,357)
(2,212)
(9,277)
(4,236)
(5,497)
(80,462)
(19,303)
(53,518)
(26,145)
26,935
20,138
48,650
16,358
34,130
28,514
26,935
18,935
48,139
11,059
22,019
23,898
8,120
8,120
(1,290)
24,763
(24,015)
7,578
-
-
-
-
7,578
Totals as of 12.31.2014
316,865
(1,705)
52,068
-
367,228
(157,760)
295
(27,460)
(184,925)
182,303
Totals as of 12.31.2013
276,517
(5,294)
45,642
-
316,865
(134,437)
1,204
(24,527)
(157,760)
48
159,105
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
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
Deletes
AMORTIZATION
Adds
Value at
Fiscal Yearend
Accumulated
at the
Beginning of
the Fiscal Year
NET BOOK VALUE
For the
Fiscal Year
Deletes
Accumulated at
Fiscal Year-end
12.31.2014
12.31.2013
125,840
(8,761)
49,919
166,998
(47,101)
1,100
(23,791)
(69,792)
97,206
78,739
5,027
-
-
5,027
-
-
-
-
5,027
5,027
Totals as of 12.31.2014
130,867
(8,761)
49,919
172,025
(47,101)
1,100
(23,791)
(69,792)
102,233
Totals as of 12.31.2013
128,740
(48,188)
50,315
130,867
(32,682)
-
(14,419)
(47,101)
Other Intangible Assets
49
83,766
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 27 – ACCOUNTS PAYABLE
12.31.2014
12.31.2013
In Thousands of AR$
6,301,086
5,074,886
74,071
63,278
33,080
20,293
142,212
40,702
6,550,449
5,199,159
Current
Merchants (“Comercios amigos”)
Suppliers
Life Insurance Payable
Collections on Account of Third Parties Payable
Total
NOTE 28 – BANK AND FINANCIAL LOANS
12.31.2014
12.31.2013
In Thousands of AR$
Current
Notes (“Obligaciones negociables”)
Bank and Financial Loans
Financial Leases
Balances under Derivative Transactions (Note 36)
Checking Account Overdrafts
Total
Non-current
Notes (“Obligaciones negociables”)
Bank and Financial Loans
Financial Leases
Total
1,513,846
575,849
20,182
243,762
129,857
2,483,496
779,498
692,162
2,774
139,227
1,613,661
1,664,348
176,109
1,840,457
1,566,097
89,091
116,270
1,771,458
NOTE 29 – COMPENSATION AND SOCIAL SECURITY CHARGES
12.31.2014
12.31.2013
In Thousands of AR$
53,112
44,984
61,294
48,979
66,909
50,919
46,111
37,076
22,508
18,729
249,934
200,687
Current
Salaries Payable
Social Security Charges
Provisions
Bonuses for the Staff
Rewards for the Staff
Total
50
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 30 – TAX CHARGES
12.31.2014
12.31.2013
In Thousands of AR$
Trade and Industry Tax Payable
Tax Withholdings and Additional Tax Withholdings Made
from Third Parties
Value-added Tax Payable
Turnover Tax Payable
Total
11,585
7,205
62,997
104,085
25,207
203,874
47,029
72,862
18,092
145,188
NOTE 31 – OTHER LIABILITIES
12.31.2014
Current
Fees Payable to Directors and Supervisory Committee
Advanced Payments to Directors
Other Miscellaneous Liabilities
Total
12.31.2013
In Thousands of AR$
14,274
(2,653)
2,928
14,549
11,183
(1,472)
905
10,616
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.
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.
Situation with the Argentine Association of Consumers and Users Protection (ADECUA, as per its initials in
Spanish):
In 2008, ADECUA brought a legal action against Tarjeta Naranja for undue collection of the life insurance
charge payable. In 2009, the parties signed a transactional agreement, where it was agreed to decrease the
amount of collection of the life insurance charge payable and allow customers to claim the reimbursement of
a portion of the amounts collected, if applicable, by filing an individual request. This agreement was
approved by the court and all the requirements established by the judge hearing the case were met, to such
an extent that, once the term to comply with the court decision had elapsed, all the acts performed by Tarjeta
Naranja were submitted to the judge, without any objection by the latter to the outcome of the proceedings.
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 (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 32 – PROVISIONS (Continued)
(1) Legal Claims (Continued):
In 2013, the same court summons the parties to a hearing and, after it, the court issues a decision, whereby
it understands that the amounts collected for the life insurance payable should be reimbursed to all the
customers from whom this charge had been collected and not only those who had requested the
reimbursement, as provided by the agreement previously approved. The decision was appealed before the
respective Court of Appeals considering that the Company had carried out all the actions undertaken in due
time and manner and proved so before the judge hearing the case.
In May 2014, Tarjeta Naranja was notified of the judgment issued by Division B of the Argentine Court of
Appeals, which ordered it to reimburse part of what had already been collected from customers on account
of life insurance on debt balances. In turn, ADECUA filed an extraordinary appeal before the Argentine Court
of Appeals.
In November 2014, ADECUA abandoned the appeal and the judgment passed by the Court of Appeals was
thus final. Therefore, the Company complied with the Judge’s order ratified by the Court of Appeals. The
related amounts were credited to the customers’ accounts and the amounts to be returned to former
customers were transferred to Banco de la Nación Argentina. In December 2014, the Company evidenced
compliance with the decision in the case records. The court received the documentation and is notifying the
Prosecution and ADECUA of the compliance with the judgment.
Situation with the Argentine Association of Consumers and Users Protection (ADECUA, as per its initials in
Spanish) (Continued):
At the date of these financial statements, after the related payments have been made, the provision
previously set by the Company has been reversed.
(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, 2014 and 2013, this amount, including the
respective interest, totaled AR$ 2,216 and AR$ 2,095, respectively.
At the date of these financial statements, the provisions booked in liabilities related to the cases described
above had been adjusted based on the opinion of the legal advisors, the judicial precedents referred to
above and the favorable evolution thereof.
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 (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 32 – PROVISIONS (Continued)
(2) Tax Claims (Continued):
Likewise, the Tax Boards of the Provinces of Catamarca and Chubut have made claims for the same items.
As of December 31, 2014, such claims totaled AR$ 2,106 and AR$ 3,741, respectively. As of December 31,
2013, such amounts totaled AR$ 1,832 and AR$ 3,437, 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 endorsed the criterion for the deduction of credit
losses adopted by the Company.
In May 2012, the Federal Tax Court issued a decision in favor of the Company for the tax periods 1999 and
2000 referred to above, where it decided to revoke the Decisions that determined the adjustments, with costs
awarded against the AFIP. On December 19, 2013, and in the face of the appeal filed by the AFIP, the Court
of Appeals in Federal Administrative Matters dismissed the appeal filed by the former, confirming the
judgment entered by the Federal Tax Court and thus validating the Company’s tax criterion. At the date of
these financial statements, the AFIP has lodged an appeal against the decision issued by the Argentine
Court of Appeals and the case is pending resolution by the Argentine Supreme Court of Justice.
It is worth noting that the provisions booked in liabilities related to the cases described above have been
adjusted based on the opinion of the tax advisors, the administrative and judicial precedents referred to
above and the favorable evolution thereof.
The breakdown and changes of contingent liabilities as of December 31, 2014 are as follows:
Tax Matters
Consumer Protection
Labor Matters
Damages
Others
Total
Balance at
the
Beginning
of the
Fiscal Year
10,824
5,967
4,167
1,593
296
22,847
53
Adds
2,196
15,684
3,181
456
47
21,564
Deletes
(5,211)
(30)
(2,046)
(437)
(19)
(7,743)
Payments
(20,479)
(20,479)
Balance at
Fiscal
Year-end
7,809
1,142
5,302
1,612
324
16,189
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
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 December 31, 2013 are as
follows:
Tax Matters
Consumer Protection
Labor Matters
Damages
Others
Total
Balance at
the
Beginning
of the
Fiscal Year
11,781
10
2,493
765
308
15,357
54
Adds
5,633
5,967
2,469
964
10
15,043
Deletes
(6,483)
(10)
(795)
(136)
(22)
(7,446)
Payments
(107)
(107)
Balance at
Fiscal
Year-end
10,824
5,967
4,167
1,593
296
22,847
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 33 – BANK AND FINANCIAL LOANS
Bank Loans Obtained
With the purpose of financing its business transactions, the Company took out the following bank loans, the main characteristics of which with regard to the
obligations outstanding as of December 31, 2014 are summarized as follows, in chronological order:
Term
Loan
Amount
Outstanding
Principal
Amount as of
12.31.2014
Guaranty
Principal Payments
Interest Payments
09/07/2015
a)
1,438
days
a)
11,000
11,000
None
One payment at maturity
Monthly
06/04/2012
06/01/2015
b)
1,092
days
b)
20,000
20,000
None
One payment at maturity
Monthly
Pesos
(AR$)
07/03/2012
06/26/2015
c)
1,088
days
c)
15,000
15,000
None
One payment at maturity
Quarterly
Banco Itaú
Argentina S.A.
Pesos
(AR$)
09/17/2012
09/07/2015
d)
1,085
days
d)
15,000
15,000
None
One payment at maturity
Monthly
Banco de
Galicia y Bs.
As. S.A.
Pesos
(AR$)
02/14/2013
02/17/2015
e)
2 years
e)
6,000
6,000
None
One payment at maturity
Upon maturity
Banco Itaú
Argentina S.A.
Pesos
(AR$)
05/17/2013
05/11/2015
f)
724 days
f)
19,000
19,000
None
One payment at maturity
Monthly
Institution
Currency
of the
Loan
Date of
Disbursement
Maturity
Date
Banco Itaú
Argentina S.A.
Pesos
(AR$)
09/30/2011
Industrial and
Commercial
Bank of China
(Argentina)
S.A.
Pesos
(AR$)
Banco
Santander Río
S.A.
55
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 33 – BANK AND FINANCIAL LOANS (CONTINUED)
Bank Loans Obtained (Continued)
Term
Loan
Amount
Outstanding
Principal
Amount as of
12.31.2014
Guaranty
Principal Payments
Interest Payments
05/26/2015
g)
2 years
g)
10,000
10,000
None
One payment at maturity
Monthly
05/29/2013
05/15/2015
h)
716 days
h)
45,000
45,000
None
One payment at maturity
Monthly
Pesos
(AR$)
06/26/2013
06/26/2015
i)
2 years
i)
3,000
3,000
None
One payment at maturity
Monthly
Industrial and
Commercial
Bank of China
(Argentina)
S.A.
Pesos
(AR$)
07/16/2013
07/13/2015
j)
727 days
j)
15,000
15,000
None
One payment at maturity
Monthly
Banco Itaú
Argentina S.A.
Pesos
(AR$)
09/27/2013
09/17/2015
720 days
19,000
19,000
None
One payment at maturity
Monthly
Banco Comafi
S.A
Pesos
(AR$)
09/30/2013
03/30/2015
k)
546 days
k)
10,000
10,000
None
One payment at maturity
Monthly
Banco Itaú
Argentina S.A.
Pesos
(AR$)
10/15/2013
10/05/2015
720 days
10,000
10,000
None
One payment at maturity
Monthly
Institution
Currency
of the
Loan
Date of
Disbursement
Maturity
Date
Banco de
Servicios y
Transacciones
S.A.
Pesos
(AR$)
05/27/2013
Banco
Patagonia S.A.
Pesos
(AR$)
Banco de
Servicios y
Transacciones
S.A.
56
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 33 – BANK AND FINANCIAL LOANS (CONTINUED)
Bank Loans Obtained (Continued)
Institution
Currency
of the
Loan
Date of
Disbursement
Maturity
Date
Term
Loan
Amount
Outstanding
Principal
Amount as of
12.31.2014
Guaranty
Principal Payments
Interest Payments
Nuevo Banco
de Santa Fe
S.A.
Pesos
(AR$)
10/31/2013
10/31/2015
2 years
10,000
4,167
None
Monthly
Monthly
Industrial and
Commercial
Bank of China
(Argentina)
S.A.
Pesos
(AR$)
11/22/2013
11/20/2015
l)
728 days
l)
10,000
10,000
None
One payment at maturity
Monthly
Banco
Santander Río
S.A.
Pesos
(AR$)
11/29/2013
11/27/2015
m)
728 days
m)
15,000
15,000
None
One payment at maturity
Quarterly
Banco de
Galicia y Bs.
As. S.A.
Pesos
(AR$)
12/27/2013
12/29/2015
n)
732 days
n)
50,000
50,000
None
One payment at maturity
Quarterly
Banco de
Galicia y Bs.
As. S.A.
Pesos
(AR$)
01/09/2014
01/09/2015
365 days
15,000
15,000
None
One payment at maturity
Upon maturity
Banco
Santander Río
S.A.
Pesos
(AR$)
01/21/2014
01/21/2015
365 days
9,000
9,000
None
One payment at maturity
Quarterly
57
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 33 – BANK AND FINANCIAL LOANS (CONTINUED)
Bank Loans Obtained (Continued)
Institution
Banco Ciudad
de Buenos
Aires
Banco
Santander Río
S.A.
Currency of
Date of
the Loan Disbursement
Maturity
Date
Term
Loan
Amount
Outstanding
Principal
Amount as of
12.31.2014
Guaranty
Principal Payments
Interest Payments
Pesos
(AR$)
02/28/2014
05/28/2015
15
months
110,000
110,000
None
One payment at maturity
Monthly
Pesos
(AR$)
03/17/2014
03/17/2015
365 days
10,000
10,000
None
One payment at maturity
Quarterly
Banco Itaú
Argentina S.A.
Pesos
(AR$)
04/16/2014
04/16/2015
1 year
20,000
20,000
None
One payment at maturity
Monthly
Banco
Santander Río
S.A.
Pesos
(AR$)
05/28/2014
05/28/2015
365 days
25,000
25,000
None
One payment at maturity
Quarterly
Banco de
Servicios y
Transacciones
S.A.
Pesos
(AR$)
06/23/2014
06/23/2015
365 days
22,000
22,000
None
One payment at maturity
Monthly
Banco
Patagonia S.A.
Pesos
(AR$)
07/07/2014
07/01/2015
359 days
20,000
20,000
None
One payment at maturity
Monthly
Banco
Hipotecario
S.A.
Pesos
(AR$)
08/01/2014
07/27/2015
360 days
15,000
15,000
None
One payment at maturity
Monthly
58
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 33 – BANK AND FINANCIAL LOANS (CONTINUED)
Bank Loans Obtained (Continued)
Institution
Currency of
the Loan
Date of
Disbursement
Maturity
Date
Term
Loan
Amount
Outstanding
Principal
Amount as of
12.31.2014
Guaranty
Principal Payments
Interest Payments
Industrial and
Commercial
Bank of China
(Argentina)
S.A.
Pesos
(AR$)
11/21/2014
11/20/2015
364
days
8,000
8,000
None
One payment at maturity
Monthly
a)
b)
c)
d)
e)
f)
g)
h)
i)
j)
k)
l)
m)
n)
On September 19, 2013, a 718-day extension was signed. Therefore, the new maturity date is September 7, 2015.
On May 30, 2014, a 367-day extension was signed. Therefore, the new maturity date is June 1, 2015.
On June 27, 2014, a 364-day extension was signed. Therefore, the new maturity date is June 26, 2015.
On September 17, 2013, a 720-day extension was signed. Therefore, the new maturity date is September 7, 2015.
On February 17, 2014, a 365-day extension was signed. Therefore, the new maturity date is February 17, 2015.
On May 16, 2014, a 360-day extension was signed. Therefore, the new maturity date is May 11, 2015.
On May 26, 2014, a 365-day extension was signed. Therefore, the new maturity date is May 26, 2015.
On May 21, 2014, a 359-day extension was signed. Therefore, the new maturity date is May 15, 2015.
On June 26, 2014, a 365-day extension was signed. Therefore, the new maturity date is June 26, 2015.
On July 16, 2014, a 362-day extension was signed. Therefore, the new maturity date is July 13, 2015.
On September 29, 2014, a 182-day extension was signed. Therefore, the new maturity date is March 30, 2015.
On November 21, 2014, a 364-day extension was signed. Therefore, the new maturity date is November 20, 2015.
On November 28, 2014, a 364-day extension was signed. Therefore, the new maturity date is November 27, 2015.
On December 29, 2014, a 365-day extension was signed. Therefore, the new maturity date is December 29, 2015.
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 (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 33 – BANK AND FINANCIAL LOANS (CONTINUED)
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, 2014 are
summarized as follows:
Institution
Currency
of the
Loan
Date of
Disbursement
Maturity
Date
Term
Loan
Amount
Outstanding
Principal
Amount as of
12.31.2014
Guaranty
Principal
Payments
Interest
Payments
Tarjetas
Regionales
S.A.
Pesos
(AR$)
04/22/2013
05/10/2015
748
days
30,000
30,000
None
One payment
at maturity
Monthly
Checking Account Overdrafts
The Company has taken out and used the following checking account overdrafts, the main characteristics
of which with regard to the obligations outstanding are summarized as follows, in chronological order:
Institution
HSBC Bank Argentina
S.A.
Banco Macro S.A.
HSBC Bank Argentina
S.A.
Banco Macro S. A.
Banco Santander Rio
S.A.
Overdraft
Currency
Pesos
(AR$)
Pesos
(AR$)
Pesos
(AR$)
Pesos
(AR$)
Pesos
(AR$)
Date of
Constitution
Maturity Date
Overdraft
Amount as of
12.31.2014 (*)
Amortization
Interest
Payments
09/02/2014
02/27/2015
22,000
Upon maturity
Monthly
09/08/2014
03/06/2015
10,000
Upon maturity
Upon maturity
09/09/2014
03/06/2015
21,000
Upon maturity
Monthly
09/10/2014
03/06/2015
60,000
Upon maturity
Upon maturity
09/12/2014
03/11/2015
10,000
Upon maturity
Quarterly
(*) It corresponds to the principal amount outstanding as of the indicated dates in Argentine Pesos.
Memorandum Accounts
Moreover, as of December 31, 2014 and 2013, the Company recorded AR$ 300,000 and AR$ 100,000,
respectively, under memorandum accounts.
As of December 31, 2014, such amount corresponds to the unused amount of the Company’s
commitment to:
a) Banco Galicia for AR$ 50,000, executed on April 24, 2014 and expiring on April 24, 2015.
b) Banco Galicia for AR$ 100,000, executed on September 30, 2014 and expiring on September 30,
2015.
c) Banco Patagonia for AR$ 100,000, effective from December 22, 2014 to December 22, 2015.
d) Banco Santander Río for AR$ 50,000, effective from December 23, 2014 to March 23, 2015.
As of December 31, 2013, such amount corresponded to the unused amount of the Company’s
commitment to Banco Galicia executed in September 2013, which expires on September 30, 2014.
60
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 34 – FINANCIAL LEASES
The Company has entered into financial lease agreements, the main characteristics of which are detailed
below:
Subject-matter
Real Property
Located in Río
Grande
Month of
Agreement
Execution
Institution
Purchase
Option
121
60 lease payments of AR$ 15 and
61 lease payments of AR$ 3, plus
interest at a variable rate. In both
cases, interest is computed
based on the Corrected Survey
Rate for Private Banks, plus a
5.5% spread
Monthly
AR$ 48 at the
time of paying
the last
installment
121
AR$ 70, plus interest at a variable
rate based on the Corrected
Survey Rate for Private Banks,
plus a 6% spread
Monthly
AR$ 1,100 at the
time of paying
the last
installment
121
AR$ 18, plus interest at a variable
rate based on the Corrected
Survey Rate for Private Banks,
plus a 6% spread
Monthly
AR$ 400 at
the time of
paying the
last
installment
121
AR$ 119 plus interest at a
variable rate based on the
Corrected Survey Rate for Private
Banks plus a 6% spread
Monthly
AR$ 435 at
the time of
paying the
last
installment
Lease Payments
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 2013
Banco de
Galicia y
Buenos
Aires S.A.
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
Payment
Method
Installments
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,
April 10, 2014 and October 9, 2014, new addenda were signed, which, together with the previous one, are part of a new transaction,
the principal of which amounted to AR$ 194,789 as of December 31, 2014. This transaction will be settled in 121 installments to be
computed as from the date of delivery of the real property and a purchase option upon maturity amounting to AR$ 4,958.
b) The agreement was signed on July 7, 2010, when the minutes of real property reception were drawn up.
The following are the minimum lease payments as of December 31, 2014 and the related present value:
Minimum Lease
Payments
Present Value of
Minimum Lease
Payments
12.31.2014
Less than One Year
25,100
From 1 to 5 Years
88,180
76,058
Over 5 Years
102,401
100,051
Minus Future Financing Charges
(19,390)
-
Present Value of Minimum Lease Payments
196,291
196,291
12.31.2014
Included in the Financial Statements as:
Current Financial Lease
20,182
Non-current Financial Lease
176,109
Total
196,291
61
20,182
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 35 – NOTES (“OBLIGACIONES NEGOCIABLES”)
As of December 31, 2014, the Company has the Global Program approved by Resolutions No. 15220,
No. 15361, No. 15785, No. 16319, No. 16571 and No. 16822 of the C.N.V. outstanding.
Authorized Amount
(In Thousands of
U.S. Dollars)
Type of Note
Term of Program
Date of Approval by
Shareholders’
Meeting
Approval by the
C.N.V.
650,000 (*)
Simple notes, not convertible into
shares
5 years
03/08/2012
Resolution No. 16822
dated 05.23.2012
(*) The Company’s Shareholders’ Meeting held on July 14, 2005 authorized the creation of a Global Program for the Issuance of
Notes for a maximum outstanding amount of US$ 50,000 to be placed by means of a public offering. On October 26, 2005, the
C.N.V. authorized the creation of the global program and the public offering of each series of notes issued under such Program
through Resolution No. 15220 of that date.
The Shareholders’ Meeting held on March 3, 2006, in turn, authorized to increase the amount of said Global Program of Notes
by US$ 100,000, thus resulting in a total maximum amount of US$ 150,000. Such increase was authorized by the C.N.V.
through Resolution No. 15361 dated March 26, 2006.
On October 31, 2007, the Company’s Shareholders’ Meeting approved to increase said Program’s amount up to a maximum
outstanding amount of US$ 350,000 or its equivalent amount in any other currency. Such increase was authorized by the C.N.V.
through Resolution No. 15785 dated November 16, 2007. On March 26, 2010, the Shareholders’ Meeting approved the
extension of the term during which such program would be effective. On April 27, 2010, the C.N.V. authorized such extension
through Resolution No. 16319.
Later, the Company’s Shareholders’ Meeting held on April 1, 2011 approved to increase said Program’s amount up to a
maximum outstanding amount of US$ 450,000 or its equivalent amount in any other currency. Such increase was authorized by
the C.N.V. through Resolution No. 16571 dated May 24, 2011.
Finally, on March 8, 2012, the Company’s Shareholders’ Meeting approved to increase said Program’s amount up to a
maximum outstanding amount of US$ 650,000 or its equivalent amount in any other currency. Such increase was authorized by
the C.N.V. through Resolution No. 16822 dated May 23, 2012.
62
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
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, 2014
and 2013:
Date of
Placement
Currency
Class
Number
Amount in
Thousands
Type
72
months
Term
Interest Rate
/ Price
Authorized
by C.N.V. on
01/28/2017
Fixed at 9%
p.a.
Maturity Date
Book Value (*)
12.31.14
12.31.13
01/14/2011
1,712,000
1,305,000
01/28/2011
US$ (1)
XIII
200,000
Simple notes,
not convertible
into shares
08/07/2012
AR$ (2)
XVIII
Series II
102,315
Simple notes,
not convertible
into shares
549
days
02/07/2014
Floating
Badlar +
4.00%
07/26/2012
-
102,315
10/30/2012
AR$ (3)
XIX
Series II
112,345
Simple notes,
not convertible
into shares
547
days
04/30/2014
Floating
Badlar +
4.19%
10/19/2012
-
112,345
02/07/2013
AR$ (4)
XX
Series II
208,136
Simple notes,
not convertible
into shares
546
days
08/07/2014
Floating
Badlar +
4.25%
01/24/2013
-
208,136
05/17/2013
AR$ (5)
XXI
Series II
201,800
Simple notes,
not convertible
into shares
549
days
11/17/2014
Floating
Badlar +
4.39%
05/08/2013
-
201,800
08/09/2013
AR$ (6)
XXII
Series I
42,023
Simple notes,
not convertible
into shares
270
days
05/06/2014
Fixed at 21%
p.a.
07/18/2013
-
42,023
08/09/2013
AR$ (6)
XXII
Series II
114,020
Simple notes,
not convertible
into shares
549
days
02/09/2015
Floating
Badlar +
3.75%
07/18/2013
114,020
114,020
12/04/2013
AR$ (7)
XXIII
Series I
35,000
Simple notes,
not convertible
into shares
270
days
08/31/2014
Fixed at
24.5%
p.a.
11/20/2013
-
35,000
12/04/2013
AR$ (7)
XXIII
Series II
152,174
Simple notes,
not convertible
into shares
547
days
06/04/2015
Floating
Badlar + 4.5%
11/20/2013
152,174
152,174
02/26/2014
AR$ (8)
XXIV
Series I
173,800
Simple notes,
not convertible
into shares
546
days
08/26/2015
Floating
Badlar + 4%
02/14/2014
173,800
-
02/26/2014
AR$ (8)
XXIV
Series II
33,500
Simple notes,
not convertible
into shares
1,096
days
02/26/2017
Floating
Badlar + 5%
02/14/2014
33,500
-
04/30/2014
AR$ (9)
XXV
Series I
79,968
Simple notes,
not convertible
into shares
365
days
04/30/2015
Floating
Badlar +
2.89%
04/21/2014
79,968
-
04/30/2014
AR$ (9)
XXV
Series II
170,032
Simple notes,
not convertible
into shares
731
days
04/30/2016
Floating
Badlar +
4.15%
04/21/2014
170,032
-
07/11/2014
AR$ (10)
XXVI
Series I
138,500
Simple notes,
not convertible
into shares
365
days
07/11/2015
Floating
Badlar +
2.60%
07/01/2014
138,500
-
07/11/2014
AR$ (10)
XXVI
Series II
161,500
Simple notes,
not convertible
into shares
731
days
07/11/2016
Floating
Badlar +
3.99%
07/01/2014
161,500
-
10/03/2014
AR$ (11)
XXVII
Series I
165,000
Simple notes,
not convertible
into shares
365
days
10/03/2015
Floating
Badlar +
2.72%
09/19/2014
165,000
-
10/03/2014
AR$ (11)
XXVII
Series II
158,000
Simple notes,
not convertible
into shares
731
days
10/03/2016
Floating
Badlar +
3.95%
09/19/2014
158,000
-
(*) It corresponds to the principal amount outstanding as of the indicated dates in Argentine Pesos.
63
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 35 – NOTES (“OBLIGACIONES NEGOCIABLES”) (CONTINUED)
1)
On January 28, 2011, the Company issued and placed its Class XIII Notes for a total amount of US$ 200,000. Principal will be paid in three annual
installments. Such installments will be paid on January, 28, 2015, January 28, 2016 and January 28, 2017, respectively.
(2)
On August 7, 2012, the Company issued and placed its Class XVIII Notes for a total amount of AR$ 148,736. This issuance was carried out in two
series: Series I for a total amount of AR$ 46,421 and Series II for a total amount of AR$ 102,315. The principal of both series was settled in one
installment upon maturity.
(3)
On October 30, 2012, the Company issued and placed its Class XIX Notes for a total amount of AR$ 165,325. This issuance was carried out in
two series: Series I for a total amount of AR$ 52,980 and Series II for a total amount of AR$ 112,345. The principal of both series was settled in
one installment upon maturity.
(4)
On February 7, 2013, the Company issued and placed its Class XX Notes for a total amount of AR$ 243,524. This issuance was carried out in two
series: Series I for a total amount of AR$ 35,388 and Series II for a total amount of AR$ 208,136. The principal of both series was settled in one
installment upon maturity.
(5)
On May 17, 2013, the Company issued and placed its Class XXI Notes for a total amount of AR$ 201,800 (Series II). Principal was settled in one
installment upon maturity. The Company decided not to issue Series I.
(6)
On August 9, 2013, the Company issued and placed its Class XXII Notes for a total amount of AR$ 156,043. This issuance was carried out in two
series: Series I for AR$ 42,023 and Series II for AR$ 114,020. Series I principal was settled upon maturity, whereas Series II principal will be also
settled in one installment upon maturity.
(7)
On December 4, 2013, the Company issued and placed its Class XXIII Notes for a total amount of AR$ 187,174. This issuance was carried out in
two series: Series I for a total amount of AR$ 35,000 and Series II for a total amount of AR$ 152,174. Series I principal was settled upon maturity,
whereas Series II principal will be also settled in one installment upon maturity.
(8) On February 26, 2014, the Company issued and placed its Class XXIV Notes for a total amount of AR$ 207,300. This issuance was carried out in
two series: Series I for a total amount of AR$ 173,800 and Series II for a total amount of AR$ 33,500. The principal of both series will be settled in
one installment upon maturity.
(9)
On April 30, 2014, the Company issued and placed its Class XXV Notes for a total amount of AR$ 250,000. This issuance was carried out in two
series: Series I for a total amount of AR$ 79,968 and Series II for a total amount of AR$ 170,032. The principal of both series will be settled in one
installment upon maturity.
(10) On July 11, 2014, the Company issued and placed its Class XXVI Notes for a total amount of AR$ 300,000. This issuance was carried out in two
series: Series I for a total amount of AR$ 138,500 and Series II for a total amount of AR$ 161,500. The principal of both series will be settled in one
installment upon maturity.
(11) On October 3, 2014, the Company issued and placed its Class XXVII Notes for a total amount of AR$ 323,000. This issuance was carried out in
two series: Series I for a total amount of AR$ 165,000 and Series II for a total amount of AR$ 158,000. 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
Company's total assets for short-term debt and 10% of the Company’s total assets for long-term debt.
(iii) The Company will not be able to dispose of its assets, unless: (a) it receives a consideration at market
value, (b) 75% of the consideration is in cash, (c) the proceeds of the sale are used within 365 days to
(i) pay off debt, (ii) make investments in capital assets in a related company, a permitted business or a
related business, or else (iii) reinvest or purchase additional assets.
64
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 35 – NOTES (“OBLIGACIONES NEGOCIABLES”) (CONTINUED)
Covenants Undertaken (Continued):
In turn, in the Price Supplement of Class XXII, XXIII, XXIV, XXV, XXVI and XXVII Notes, the Company has
undertaken the following covenant with regard to the holders of such Notes:
(i)
The Company will not levy any lien or else allow any lien to be levied, except for the permitted liens —
such liens existing at the date of the Price Supplement or those to be levied in the future with regard to
all the other assets—, when the total amount of the liens does not exceed 25% of the Company’s total
assets.
At the date of these financial statements, the Company has complied with the abovementioned covenants
undertaken.
NOTE 36 – DERIVATIVE TRANSACTIONS
The Company has carried out derivative transactions by signing foreign currency forward contracts, as
detailed below:
Counterparty
Transaction
Amount (In
Thousands of
U.S. Dollars)
Transaction
Amount as of
12.31.2014 (In
AR$)
Transaction
Amount as of
12.31.2013 (In
AR$)
Expiration Date
of the Contract
Banco de Galicia y Buenos Aires S.A.
36,000
-
234,845
01/02/2014
Banco de Galicia y Buenos Aires S.A.
41,000
-
280,820
01/31/2014
Compañía Financiera Argentina S.A.
69,600
-
476,708
01/31/2014
Banco de Galicia y Buenos Aires S.A.
1,700
-
12,070
02/28/2014
Compañía Financiera Argentina S.A.
14,300
-
101,530
02/28/2014
Banco de Galicia y Buenos Aires S.A.
35,000
-
254,473
03/31/2014
Banco de Galicia y Buenos Aires S.A.
10,000
-
74,450
04/30/2014
Banco de Galicia y Buenos Aires S.A.
4,000
-
30,939
05/30/2014
Banco Hipotecario S.A.
2,000
17,104
-
01/01/2015
24,000
205,248
-
01/01/2015
Banco Macro S.A.
3,000
26,209
-
01/30/2015
Banco Industrial S.A.
1,000
8,736
-
01/30/2015
Mercado a Término de Rosario S.A. (ROFEX)
72,100
629,938
-
01/30/2015
Banco Macro S.A.
28,000
249,704
-
02/27/2015
-
02/27/2015
Mercado a Término de Rosario S.A. (ROFEX)
Banco Hipotecario S.A.
7,000
62,426
Mercado a Término de Rosario S.A. (ROFEX)
46,000
410,550
Banco Macro S.A.
33,000
301,084
-
03/31/2015
Banco Supervielle S.A.
20,000
182,475
-
03/31/2015
Banco Patagonia S.A.
20,000
182,475
-
03/31/2015
Mercado a Término de Rosario S.A. (ROFEX)
20,000
182,700
-
03/31/2015
65
02/27/2015
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 36 – DERIVATIVE TRANSACTIONS (CONTINUED)
The contracts signed establish that the transaction will be settled without physical delivery of the underlying
currency, i.e., 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 the underlying notional values, (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 the underlying notional values; 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, 2014, the Company has recorded AR$ 243,762 in liabilities, AR$ 110,382 under
“Revenues from Financing” and AR$ 323,054 under “Expenses from Financing” in the Statement of
Income.
Such net income was made up of AR$ 91,374 resulting from foreign currency forward contracts aimed at
mitigating the exchange-rate risk of its transactions (Class XIII Notes) and AR$ 121,298 resulting from
foreign currency forward contracts aimed at hedging against potential effects of the Company’s course of
business.
As of December 31, 2013, the Company had recorded AR$ 115,602 in assets and AR$ 135,943 in the
Statement of Income under “Revenues from Financing” for the effective contracts during the fiscal year to
reflect changes in the accounting measurement accrued to date.
Memorandum Accounts:
The Company recorded AR$ 2,458,649 and AR$ 1,465,835 in memorandum accounts as of December 31,
2014 and 2013, respectively, corresponding to the face values pesified to date for the abovementioned
derivative transactions agreed.
NOTE 37 – CASH AND CASH EQUIVALENTS – STATEMENT OF CASH FLOWS
12.31.2014
12.31.2013
In Thousands of AR$
265,638
234,487
797,517
620,461
1,063,155
854,948
Cash
Placements of Cash-equivalent Funds
Total
66
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 38 – ADJUSTMENTS TO CALCULATE THE NET CASH FLOW AND CASH EQUIVALENTS
FROM OPERATING ACTIVITIES
Provision for Credit Losses
Provision for Contingencies, Net of Recoveries
Provision for Compensation and Social Security Charges
Provision for Fees Payable to Directors and Members of the
Supervisory Committee
Unsettled Loss / (Gain) on Derivative Transactions
Foreign Exchange Loss
Income from Investments in Associates and Other Companies
Decrease in Property, Plant & Equipment
Decrease in Intangible Assets
Depreciation of Property, Plant and Equipment
Amortization of Intangible Assets
Loss from Discontinued Operations
Total
12.31.2014
12.31.2013
In Thousands of AR$
554,883
542,111
13,821
7,597
135,551
106,724
14,274
243,762
410,743
(2,136)
1,410
7,661
27,460
23,791
16,054
1,447,274
11,183
(115,602)
328,593
(1,650)
4,090
48,188
24,527
14,419
19,098
989,278
NOTE 39 – CHANGES IN OPERATING ASSETS
12.31.2014
12.31.2013
In Thousands of AR$
(3,025,767)
(2,906,404)
(207,591)
(25,760)
(3,233,358)
(2,932,164)
Increase in Receivables from Services
Increase in Other Receivables
Total
NOTE 40 – CHANGES IN OPERATING LIABILITIES
12.31.2014
12.31.2013
In Thousands of AR$
Decrease in Compensation and Social Security Charges
Increase in Tax Charges
Income Tax Payments
Decrease in Other Liabilities
Contingency Payments
Total
67
(86,304)
58,686
(286,563)
(14,892)
(20,479)
(349,552)
(71,890)
34,970
(334,325)
(11,802)
(107)
(383,154)
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 41 – BALANCES AND TRANSACTIONS WITH COMPANIES AND RELATED PARTIES
Tarjeta Naranja S.A. is controlled by Tarjetas Regionales S.A., with legal domicile at Belgrano 1415,
Piso 1°, 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 77% interest in the shares of Tarjetas Regionales S.A. In
turn, Banco de Galicia y Buenos Aires S.A. is controlled by Grupo Financiero Galicia S.A., with legal
domicile at Tte. Gral. Juan D. Perón 456, 2° Piso, Autonomous City of Buenos Aires, with a 100%
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, 2014:
Companies under Section 33 of Law No. 19550
Banco de Galicia
y Buenos Aires
S.A.
Tarjetas
Regionales S.A.
Total
In Thousands of AR$
ASSETS
Cash and Cash Equivalents
Other Receivables
Total Current Assets as of 12.31.2014
Total Assets as of 12.31.2014
LIABILITIES
Accounts Payable
Bank and Financial Loans
Total Current Liabilities as of 12.31.2014
Bank and Financial Loans
Total Non-current Liabilities as of
12.31.2014
Total
Liabilities as of 12.31.2014
83,058
56,532
139,590
139,590
-
83,058
56,532
139,590
139,590
143,474
263,112
406,586
195,873
195,873
602,459
30,476
30,476
30,476
143,474
293,588
437,062
195,873
195,873
632,935
68
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 41 – BALANCES AND TRANSACTIONS WITH COMPANIES AND RELATED PARTIES (CONTINUED)
The following are Tarjeta Naranja S.A.’s balances with other related parties as of December 31, 2014:
Other Related Parties
Cobranzas
Regionales S.A.
Procesadora
Regional S.A.
Tarjetas del Mar
S.A.
Parque Azul
S.R.L.
Galicia Seguros
S.A.
Total
In Thousands of AR$
ASSETS
Other Receivables
4,261
-
23
-
7,568
11,852
Total Current Assets as of 12.31.14
4,261
-
23
-
7,568
11,852
Total Assets as of 12.31.14
4,261
-
23
-
7,568
11,852
Accounts Payable
3,529
504
-
4,458
-
8,491
Total Current Liabilities as of 12.31.14
3,529
504
-
4,458
-
8,491
Total Liabilities as of 12.31.14
3,529
504
-
4,458
-
8,491
LIABILITIES
69
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 41 – BALANCES AND TRANSACTIONS WITH COMPANIES AND RELATED PARTIES
(CONTINUED)
The following are the transactions carried out by Tarjeta Naranja S.A. with related companies during
the fiscal year ended December 31, 2014:
Companies under Section 33 of Law No.
19550
Banco de Galicia y Bs.
As. S.A.
Tarjetas Regionales
S.A.
In Thousands of AR$
REVENUES
Revenues from Services
Interest on Time Deposits and Interest-bearing Checking
Accounts
Gain on Derivative Transactions
Total as of 12.31.2014
EXPENSES
Rentals
Bank and Financial Interest
Bank Expenses
Collection Expenses
Total as of 12.31.2014
70
292,876
-
31,202
17,895
341,973
-
(613)
(92,519)
(17,120)
(1,388)
(111,640)
(20,356)
(20,356)
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 41 – BALANCES AND TRANSACTIONS WITH COMPANIES AND RELATED PARTIES (CONTINUED)
The following are the transactions carried out by Tarjeta Naranja S.A. with other related parties during the fiscal year ended December 31, 2014:
Other Related Parties
Cobranzas
Regionales
S.A.
Galicia
Seguros S.A.
Parque Azul
S.R.L.
Key
Management
Staff
Golden
S.A.
Compañía
Financiera
Argentina
S.A.
Colores
S.A.
Procesadora
Regional
S.A.
In Thousands of AR$
REVENUES
Revenues from Services
Revenues from Financing
Interest on Time Deposits and Interestbearing Checking Accounts
Gain on Derivative Transactions
Total as of 12.31.14
426
-
156,717
-
1,201
830
-
-
-
-
-
-
-
-
-
-
-
10,097
-
-
-
-
-
-
-
92,487
-
426
156,717
2,031
-
-
-
102,584
-
EXPENSES
Rentals
Professional Fees
Salaries
(43,592)
-
-
-
(7,440)
(1,515)
-
(393)
-
-
(5,247)
-
Total as of 12.31.14
(43,592)
-
-
(7,440)
(1,515)
(393)
-
(5,247)
71
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 41 – BALANCES AND TRANSACTIONS WITH COMPANIES AND RELATED PARTIES
(CONTINUED)
The following are Tarjeta Naranja S.A.’s balances with related companies as of December 31, 2013:
Companies under Section 33 of Law No. 19550
Banco de Galicia
y Buenos Aires
S.A.
Tarjetas
Regionales S.A.
Total
In Thousands of AR$
ASSETS
Cash and Cash Equivalents
Other Receivables
Total Current Assets as of 12.31.2013
Total Assets as of 12.31.2013
LIABILITIES
Accounts Payable
Bank and Financial Loans
Total Current Liabilities as of 12.31.2013
Bank and Financial Loans
Total Non-current Liabilities as of
12.31.2013
Total Liabilities as of 12.31.2013
273,957
107,748
381,705
381,705
-
273,957
107,748
381,705
381,705
34,826
162,266
197,092
125,978
57,545
57,545
30,000
34,826
219,811
254,637
155,978
125,978
323,070
30,000
87,545
155,978
410,615
72
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 41 – BALANCES AND TRANSACTIONS WITH COMPANIES AND RELATED PARTIES (CONTINUED)
The following are Tarjeta Naranja S.A.’s balances with other related parties as of December 31, 2013:
Other Related Parties
Cobranzas
Regionales
S.A.
TN Perú
S.A.C.
Galicia
Seguros S.A.
Procesadora
Regional S.A.
Tarjetas del
Mar S.A.
Compañía
Financiera
Argentina
S.A.
Parque Azul
S.R.L.
Total
In Thousands of AR$
ASSETS
Cash and Cash Equivalents
Other Receivables
Total Current Assets as of 12.31.13
Total Assets as of 12.31.2013
LIABILITIES
Accounts Payable
Total Current Liabilities as of 12.31.13
Total Liabilities as of 12.31.2013
5,925
5,925
5,925
2
2
2
9,278
9,278
9,278
-
24
24
24
-
130,389
53,689
184,078
184,078
130,389
68,918
199,307
199,307
-
3,423
3,423
3,423
-
206
206
206
-
3,222
3,222
3,222
-
6,851
6,851
6,851
73
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 41 – BALANCES AND TRANSACTIONS WITH COMPANIES AND RELATED PARTIES
(CONTINUED)
The following are the transactions carried out by Tarjeta Naranja S.A. with related companies during the
fiscal year ended December 31, 2013:
Companies under Section 33 of Law No.
19550
Banco de Galicia y Bs.
As. S.A.
Tarjetas Regionales
S.A.
In Thousands of AR$
REVENUES
Revenues from Services
Interest on Time Deposits and Interest-bearing Checking
Accounts
Gain on Derivative Transactions
Total as of 12.31.2013
EXPENSES
Rentals
Bank and Financial Interest
Bank Expenses
Collection Expenses
Total as of 12.31.2013
74
397,384
-
17,198
84,033
498,615
-
431
48,477
9,788
3,382
62,078
18,624
18,624
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 41 – BALANCES AND TRANSACTIONS WITH COMPANIES AND RELATED PARTIES (CONTINUED)
The following are the transactions carried out by Tarjeta Naranja S.A. with other related parties during the fiscal year ended December
31, 2013:
Other Related Parties
Cobranzas
Regionales
S.A.
Galicia
Seguros
S.A.
Parque
Azul
S.R.L.
Key
Management
Staff
Golden
S.A.
Colores
S.A.
Compañía
Financiera
Argentina
S.A.
Tarjetas
del Mar
S.A.
TN Perú
S.A.C.
Procesadora
Regional
S.A.
In Thousands of AR$
REVENUES
Revenues from Services
Revenues from Financing
Interest on Time Deposits and Interestbearing Checking Accounts
Gain on Derivative Transactions
Total as of 12.31.2013
EXPENSES
Expenses from Services
Rentals
Professional Fees
Salaries
Total as of 12.31.2013
319
-
123,261
-
924
767
-
-
-
-
-
5,949
-
-
-
-
-
-
-
-
5,399
-
-
-
319
123,261
1,691
-
-
-
51,910
57,309
-
5,949
-
43,941
43,941
-
-
5,818
5,818
997
997
296
296
-
287
287
-
2,571
2,571
75
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 42 - RESTRICTED ASSETS
Liens in Force
As of December 31, 2014 and 2013, liens for a total amount of AR$ 220 and AR$ 222, respectively, have
been levied on funds deposited in checking accounts opened by the Company at several financial
institutions. Since the appropriate defenses have been filed during such legal proceedings to safeguard the
Company’s interests, the seized funds have been included in these financial statements under “Other
Receivables”.
Furthermore, as of December 31, 2014 and 2013, the Company has paid AR$ 350 as guarantees
regarding certain tax issues. Since: i) these funds will not be available for the Company until the legal
actions requiring said guarantees are finally settled, and ii) the Company’s management has filed all the
defense actions granted by applicable laws to safeguard the Company's interests, these funds have been
included in these financial statements under "Other Receivables".
Covenants Undertaken
The commitments undertaken by virtue of Class XIII, XXII, XXIII, XXIV, XXV and XXVI Notes
(“Obligaciones negociables”) issued by the Company are mentioned in Note 35.
Security Deposits
As of December 31, 2014 and 2013, the Company has paid AR$ 1,514 and AR$ 1,993, respectively, for
security related to certain real property lease agreements. These funds have been included in these
financial statements under "Other Receivables".
Guarantees Granted for Derivative Transactions
As of December 31, 2014, the Company has granted AR$ 131,783 as guarantees to Mercado a Término
de Rosario S.A. (ROFEX), through Peso-denominated domestic Lebac, for derivative transactions carried
out with such institution. These guarantees have been included in these financial statements under "Other
Receivables". The following is a breakdown thereof:
Investment
Date
Currency
10/10/2014
AR$
10/21/2014
AR$
10/23/2014
AR$
12/05/2014
AR$
Investment
Book Value as
of 12.31.2014
(*)
Amount in
Thousands
Maturity Date
Interest Rate
/ Price
10,000
02/04/2015
0.921543
9,757
50,000
01/21/2015
0.938904
49,295
54,500
01/28/2015
0.939052
53,489
20,000
02/25/2015
0.947171
19,242
L04F5 – Peso-denominated
Domestic Lebac
L21E5 – Peso-denominated
Domestic Lebac
L28E5 – Peso-denominated
Domestic Lebac
L25F5 – Peso-denominated
Domestic Lebac
Total
131,783
(*) It corresponds to the principal and interest amounts as of the indicated dates in Argentine Pesos.
76
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 42 - RESTRICTED ASSETS (CONTINUED)
Restriction on the Distribution of Dividends
The Company’s Ordinary and Extraordinary Shareholders’ Meeting held on March 16, 2006 resolved to
define the following policy for the distribution of dividends: i) to keep under Undistributed Profits, those
retained earnings corresponding to fiscal years prior to 2005 and, therefore, not to distribute them as
dividends, and ii) to set the maximum limit for the distribution of dividends at 25% of the realized and liquid
profits of each fiscal year as from fiscal year 2005. These restrictions shall remain in force while the
Company's shareholders’ equity remains 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.
NOTE 43 – TARJETA NARANJA S.A.’S INVESTMENTS ABROAD
Republic of Peru:
On July 6, 2011, the Company purchased 240 shares of Tarjeta Naranja Perú S.A.C., what represents a
24% stake in this company.
Tarjeta Naranja Perú is a company duly incorporated under the laws of Peru, which sole purpose is to
develop the “Tarjeta Naranja” business model for the promotion and business and operational
management of a credit card to be issued and marketed in Peru by Banco de Crédito del Perú. This credit
card will be targeted at mass consumption segments.
Tarjeta Naranja Perú S.A.C. started its business activities in the Republic of Peru in September 2011. For
that purpose, Tarjeta Naranja S.A. made a first capital contribution on September 14, 2011, for the amount
of AR$ 1,288; and a second capital contribution of AR$ 5,784 on September 16, 2011.
On December 15, 2011, Tarjeta Naranja Perú S.A.C.’s shareholders held a General Shareholders’ Meeting
where the following decisions were made: i) capital increase through capitalization of other receivables in
favor of the company, and ii) capital increase through new contributions. For that purpose, Tarjeta Naranja
S.A. made a capital contribution amounting to AR$ 3,031 in December 2011.
On May 3, 2012, Tarjeta Naranja Perú S.A.C.’s Board of Directors, in exercising the powers granted by
Tarjeta Naranja Perú S.A.C.’s General Shareholders’ Meeting held on December 15, 2011, and by virtue of
what was decided therein, agreed on a new capital increase and the capitalization of other receivables in
favor of the company in the amount of AR$ 6,975.
On September 13, 2012, Tarjeta Naranja Perú S.A.C.’s shareholders held a General Shareholders’
Meeting, whereat they agreed to increase capital and to capitalize other receivables in favor of the
company in the amount of AR$ 10,579.
77
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 43 – TARJETA NARANJA S.A.’S INVESTMENTS ABROAD (CONTINUED)
On May 6, 2013, Tarjeta Naranja Perú S.A.C.’s General Shareholders’ Meeting agreed to increase capital
again and to capitalize other receivables in favor of the company in the amount of AR$ 8,919.
On September 13, 2013, Tarjeta Naranja Perú S.A.C.’s Board of Directors, in exercising the powers
granted by Tarjeta Naranja Perú S.A.C.’s General Shareholders’ Meeting held on May 6, 2013, and by
virtue of what was decided therein, agreed on a new capital increase and the capitalization of other
receivables in favor of the company in the amount of AR$ 9,070.
On May 30, 2014, the Company entered into a memorandum of understanding to transfer Tarjeta Naranja
S.A.’s total interest in Tarjeta Naranja Perú S.A.C. (equivalent to twenty four per cent (24%) of Tarjeta
Naranja Perú S.A.C.’s capital stock) to Grupo de Crédito S.A. (owner of the remaining seventy six per cent
(76%) interest) or to other company belonging to Grupo de Crédito S.A.’s economic group.
On October 14, 2014, the Company signed the Final Agreement on Transfer of Shares, whereby the
conditions precedent were considered to be met and the ownership of shares was considered to be
transferred to Grupo Crédito S.A. The parties agreed to assign the single payment equal to US$ 900,
provided in the above-mentioned memorandum of understanding, to the transfer of those shares.
The result of this transaction is disclosed in the statement of income as a discontinued operation; the
comparative figures having been adjusted.
12.31.2014
12.31.2013
In Thousands of AR$
(1,709)
(7,225)
(17,016)
(5,900)
5,949
643
(2,083)
(14,191)
(13,150)
Loss on Transfer of Shares in TN Perú S.A.C.
Loss from Investment in TN Perú S.A.C.
(Loss) / Income from Investment in TN Perú S.A.C.
Income Tax of TN Perú S.A.C.
Total
At the date of these financial statements, the related shares have been transferred.
78
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 44 – INFORMATION ABOUT EXPENSES AND THEIR ALLOCATION UNDER SECTION 64
SUBSECTION B) OF LAW 19550
Items
Totals as of
12.31.2014
Administrative
Expenses
Marketing
Expenses
Totals as of
12.31.2013
In Thousands of AR$
Directors and Supervisory Committee Members' Fees
Bonuses for the Staff
Compensation and Social Security Charges
Taxes, Rates and Contributions
14,675
14,675
-
126,977
39,363
87,614
11,183
98,929
1,049,286
300,579
748,707
833,439
568,115
134,349
433,766
422,676
Entertainment and Travel Expenses and Per Diem
22,685
7,44
15,245
26,722
Maintenance of Equipment and Real Property
31,488
31,488
-
39,155
Depreciation of Property, Plant and Equipment
27,46
19,222
8,238
24,527
Amortization of Intangible Assets
23,791
23,791
-
14,419
Rentals
60,691
5,145
55,546
51,044
Stationery and Office Supplies
22,585
3,855
18,73
16,803
17,14
-
17,14
16,768
115,768
-
115,768
105,578
Opening of Accounts
Publicity and Advertising
Donations
Electricity, Natural Gas and Communications
Third Parties’ Fees
2,022
2,022
-
1,276
36,717
12,798
23,919
33,334
108,234
98,929
9,305
118,126
Insurance and Security Services
89,538
2,267
87,271
63,985
Bank and Financial Expenses
22,281
22,281
-
15,972
Regular Mail Services
Expenses for Commercial Reports and Procedures for
the Collection of Amounts in Arrears
Collection Expenses
20,378
6,937
13,441
25,358
40,56
40,56
-
39,991
100,078
100,078
-
72,858
General Expenses
285,975
149,928
136,047
206,708
Printing and Distribution Expenses
159,681
-
159,681
111,457
Cleaning Expenses
16,524
2,552
13,972
12,809
Special Promotions
22,755
-
22,755
10,993
Expenses from Call Center Services
66,218
63,934
2,284
69,409
3,051,622
1,082,193
1,969,429
843,316
1,600,203
Totals as of 12.31.2014
(1)
Totals as of 12.31.2013
(1)
2,443,519
(1) Total marketing and administrative expenses correspond with the amount of the lines “Direct Expenses from Services” and “Total
Operating Expenses” in the Statement of Income.
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 (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 45 – FOREIGN CURRENCY ASSETS AND LIABILITIES
Items
Amount and Type of
Foreign Currency (in
Thousands of U.S.
Dollars)
Current
Exchange
Rate
Amount in
Argentine
Currency as of
12.31.14
Amount in
Argentine
Currency as
of 12.31.13
In Thousands of AR$
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents
Deposits in Argentina
US$
396
8.46
3,353
1,925
Deposits Abroad
US$
1,318
8.46
11,148
2,737
Investment in Notes (“Obligaciones negociables”)
US$
-
8.46
-
38,174
Investment in Government Securities
US$
1,505
8.46
12,729
-
US$
-
8.46
-
6,386
27,230
49,222
Investments
Other Receivables
Sundry Receivables
Total Current Assets
NON-CURRENT ASSETS
Investments
Investment in Government Securities
US$
-
8.46
-
-
US$
25
8.46
212
691
Other Receivables
Security Deposits
Total Non-current Assets
Total Assets
212
691
27,442
49,913
LIABILITIES
CURRENT LIABILITIES
Accounts Payable
Merchants (“Comercios amigos”)
US$
-
8.56
-
242
Collections on Account of Third Parties
US$
488
8.56
4,179
2,903
US$
74,317
8.56
636,151
46,820
640,330
49,965
Bank and Financial Loans
Notes (“Obligaciones negociables”)
Total Current Liabilities
NON-CURRENT LIABILITIES
Bank and Financial Loans
Notes (“Obligaciones negociables”)
1,141,333
1,300,196
Total Non-current Liabilities
US$
133,333
8.56
1,141,333
1,300,196
Total Liabilities
1,781,663
1,350,161
US$: United States dollars.
As of December 31, 2014 and 2013, the Company has performed derivative transactions (foreign currency forward contracts)
aimed at mitigating the risks related to exchange rate variations, which cover the exposure of the total net position and are
renewed throughout the year during the time in which the covered liabilities are outstanding.
80
Tarjeta Naranja S.A.
Registration Number with the Public Registry of Commerce: No. 1363 Fo. 5857 Vol. 24/95
Notes to the Financial Statements (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
NOTE 46 – PORTFOLIO ASSIGNMENT
On June 30, 2014, Tarjeta Naranja S.A. (“the Company”), in its capacity as Assignor, entered into a
Credit Portfolio Assignment agreement with Cohen S.A. Sociedad de Bolsa, as Assignee, and
Creditia S.A. as Holder, whereby the Company assigned and transferred to the Assignee its
portfolio for a total amount of AR$ 108,216 at a price amounting to AR$ 2,579.
On October 31, 2014, the Company, in its capacity as Assignor, entered into a Credit Portfolio
Assignment agreement with Comafi Fiduciario Financiero S.A., in its capacity as trustee of
Fideicomiso Financiero Privado Frankel (the Assignee), and as trustee of Fideicomiso Financiero
Privado Yatasto and of Fideicomiso Financiero Privado Creval, both in their capacity as
beneficiaries of Fideicomiso Financiero Privado Frankel (the Holders), whereby the Company
assigned and transferred to the Assignee its portfolio for a total amount of AR$ 105,275 at a price
amounting to AR$ 7,500.
On December 15, 2014, Tarjeta Naranja S.A. (“the Company”), in its capacity as Assignor, entered
into a Credit Portfolio Assignment agreement with TMF Trust Company (Argentina) S.A. (in its
capacity as Trustee of Fideicomiso Financiero Privado BHSA I and not personally) as Assignee,
and FC Recovery S.A. as current Holder, whereby the Company assigned and transferred to the
Assignee its portfolio for a total amount of AR$ 69,821 at a price amounting to AR$ 4,500.
NOTE 47 – DOCUMENTATION FILING
On August 14, 2014, the National Securities Commission issued General Resolution No. 629,
whereby it introduces changes to its regulations regarding the filing and keeping of commercial
books, corporate books and the accounting records.
In compliance with Section 26 of Part VII of Chapter IV of Title II of the Regulations (N.T. 2013, as
amended), it is reported that the Company has entrusted the following third-party suppliers with the
deposit of certain old information:
Person in Charge of the Deposit
Location
Ruta 5 km 4 1/2 - Camino a Alta Gracia –
Province of Córdoba
Ruta 36, 31.5 km (Planta 3) - Florencio
Varela – Province of Buenos Aires
File Management Com S.R.L. (FMC)
Administradora de Archivos S.A. (ADEA)
In addition, it is evidenced that the detail of the documentation for safekeeping is made available at
the registered office.
NOTE 48 – SUBSEQUENT EVENTS
On January 22, 2015, XXVIII Notes (“Obligaciones negociables”) were issued in the aggregate
amount of AR$ 315,500. This issuance was carried out in two series: Series I, in the amount of
AR$ 186,500, which falls due in October 2015 and accrues interest quarterly on principal at an
annual fixed rate of 27.5%; and Series II, in the amount of AR$ 129,000, which falls due in January
2017 and accrues interest quarterly on principal at a variable rate (private Badlar, plus an annual
4.5% spread).
The first payment of interest on both series will be made on April 22, 2015, whereas amortization of
Series I will take place in a single installment on the due date and amortization of Series II will take
place in three quarterly installments in July and October 2016, and January 2017.
On January 28, 2015, the Company paid the first principal installment of Class XIII Notes
(“Obligaciones negociables”) in the amount of US$ 66,660, along with the related interest service.
81
Tarjeta Naranja S.A.
Additional Information to the Notes to the Financial Statements
As of December 31, 2014
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 BY MATURITY DATE
a) Past-due Receivables as of December 31, 2014
Before 12.31.13
Between 12.31.13 and 06.30.14
Between 06.30.14 and 09.30.14
Between 09.30.14 and 11.30.14
Between 11.30.14 and 12.31.14
Subtotal
Allowance for Credit Losses (1)
Total Past-due Receivables
Receivables from
Other
Services
Receivables
In Thousands of AR$
48,270
16
395,597
183,420
165,396
256,465
1,049,148
16
(638,121)
411,027
16
(1) The difference of AR$ 92,508 with respect to the total allowance for credit losses for
AR$ 730,629 corresponds to a global allowance for the (undue) performing
commercial portfolio.
b) Receivables with No Fixed Term as of December 31, 2014
No Fixed Term
(1)
Other
Deferred Income
Receivables
Tax Assets
In Thousands of AR$
(1)
2,258
219,202
Other Receivables with No Fixed Term: AR$ 744 are disclosed as other current
receivables and AR$ 1,514 are disclosed as other non-current receivables in the
statement of financial position.
82
Tarjeta Naranja S.A.
Additional Information to the Notes to the Financial Statements
As of December 31, 2014 (Continued)
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
c) Receivables to Become Due as of December 31, 2014
Receivables
Other
from Services Receivables
In Thousands of AR$
Current
03.31.15
06.30.15
09.30.15
12.31.15
Non-current
7,327,310
2,162,457
1,122,189
517,939
276,692
5,953
2,112
657
183,389
196,037
4. CLASSIFICATION OF DEBT BALANCES BY MATURITY DATE
a) Past-due Debts as of December 31, 2014
There are no past-due debts as of December 31, 2014
b) Debts with No Fixed Term as of December 31, 2014.
As of December 31, 2014, 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, 2014
Accounts
Payable
Bank and
Financial
Loans
Compensation
Tax
and Social
Charges
Security Charges
In Thousands of AR$
Provision
for Income
Tax
Other
Liabilities
Current
03.31.15
06.30.15
09.30.15
12.31.15
Non-current
6,334,427
215,837
122
63
-
1,224,299
582,684
413,446
263,067
1,840,457
83
203,823
46,111
-
203,874
-
76,499
-
2,920
11,621
-
Tarjeta Naranja S.A.
Additional Information to the Notes to the Financial Statements
As of December 31, 2014 (Continued)
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
5. CLASSIFICATION OF RECEIVABLES BY THEIR FINANCIAL EFFECTS
a) Receivables in Argentine Pesos and in U.S. Dollars
Receivables
from Services
Deferred
Income Tax
Assets
Other
Receivables
In Thousands of AR$
12,362,432
483,513
(730,629)
-
In Argentine Pesos
Allowance for Credit Losses AR$
In Foreign Currency
Allowance for Credit Losses US$
-
219,202
-
212
-
-
b) The balances of receivables are not subject to any adjustment clause.
c) Interest-bearing and Non-interest bearing Receivables.
Deferred
Income Tax
Assets
In Thousands of AR$
Receivables
from Services
Other
Receivables
Interest-bearing Balances
4,905,932
-
-
Non-interest Bearing Balances
7,456,500
483,725
219,202
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 for
Other
Income Tax Liabilities
6,546,270
2,546,469
249,934
203,874
76,499
14,549
4,179
1,777,484
-
-
-
-
b) Debt balances are not subject to any adjustment clause.
84
Tarjeta Naranja S.A.
Additional Information to the Notes to the Financial Statements
As of December 31, 2014 (Continued)
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
c)
Interest-bearing and Non-interest bearing Debts
Bank and
Financial
Loans
Accounts
Payable
Interest-bearing
Balances
Non-interest Bearing
Balances
Compensation
and Social
Tax
Security
Charges
Charges
In Thousands of AR$
Provision
for Income
Tax
Other
Liabilities
-
3,955,171
-
-
-
-
6,550,449
368,782
249,934
203,874
76,499
14,549
7. INVESTMENT IN COMPANIES
As of December 31, 2014, the Company holds a 5% interest in Cobranzas Regionales S.A.
and a 1% interest in Tarjetas Cuyanas S.A.
8. RECEIVABLES FROM OR LOANS GRANTED TO DIRECTORS AND SUPERVISORY
COMMITTEE MEMBERS
As of December 31, 2014, there are advances to directors and supervisory committee
members for AR$ 2,653, 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.
85
Tarjeta Naranja S.A.
Additional Information to the Notes to the Financial Statements
As of December 31, 2014 (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
832372
INSURED
AMOUNT
(In Thousands)
INSURANCE TYPE
EXPIRATION
DATE
ACE
SEGUROS
Civil Liability Insurance
05/22/2015
AR$ 20,000
40000250
ZURICH
Personal Accidents
08/31/2015
AR$ 1,000
46302
CHUBB
Operational All Risk Policy / Theft
04/15/2015
AR$ 650,355
-
15873
CHUBB
04/15/2015
AR$ 10,000
-
10291487
ZURICH
04/15/2015
AR$ 495
-
10291487
-
Credit Insurance
04/15/2015
Monthly
Renewal
AR$ 710
100184
ZURICH
Galicia Vida
S.A.
Civil Liability Multi-Peril Insurance
Insurance against Fire (Merlo 2165,
Castelar, Province of Buenos Aires,
belonging to Silvia Calderón)
Insurance against Fire (Sebastian
Costa 567, Tres Arroyos, Province of
Buenos Aires).
-
-
81409701
ZURICH
Homeowners Insurance Policy
(Córdoba) Lino Spilinbergo No.: 3589
04/15/2015
AR$ 1,475
-
500605
Galicia Vida
S.A.
Group Life Insurance required by Law
Monthly
Renewal
-
-
210135019
ZURICH
Annual
Renewal
AR$ 2,743
-
210145096
ZURICH
Administrative Surety – Injunction
Bond
Surety – Security for lease of real
property (Aguilar No. 2461, Piso 4,
Dpto. B)
Annual
Renewal
AR$ 50
-
616640
Cauciones S.A.
Surety for the Finance Ministry of the
Province of Córdoba
Annual
Renewal
AR$ 1,004
-
260011152
ZURICH
12/15/2014
US$ 25,000
-
2101600651
ZURICH
12/30/2014
AR$ 71
-
210147587
ZURICH
Construction and Assembly
Security for financial advance
corresponding to a contract for works
(Sucre No. 541 Córdoba.)
Performance bond pursuant to
Ordinance No. 10819 corresponding
to the sewage piping works in Barrio
Centro – RS 496 – T/12
01/22/2015
AR$ 41
-
81409701
RSA
Motorbike Insurance
04/15/2015
AR$ 10,000
-
81426237
ZURICH
Fire at Salto Uruguay No. 691 -–
Concordia
12/09/2015
AR$ 2,352
-
81303622
ZURICH
Fire at Gral. Juan M. de Pueyrredón –
Rosario (Santa Fe)
04/15/2015
AR$ 190
-
86
BOOK
VALUE
-
Tarjeta Naranja S.A.
Additional Information to the Notes to the Financial Statements
As of December 31, 2014 (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, 2014, 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 Note 42 to the
financial statements as of December 31, 2014.
87
Tarjeta Naranja S.A.
Summary of Activity
As of December 31, 2014
(Free Translation from the Original in Spanish for Publication in Argentina)
As of December 31, 2014, we have more than 2.5 million open accounts. These customers made
more than 121.7 million purchases during the fiscal year, what represents a 3% increase when
compared to the previous fiscal year. If we measure the average consumption per active account
during such period, there was a 31% increase at current values.
Income before income tax was higher than AR$ 955 million, and shareholders’ equity exceeded
AR$ 2,430 million.
Financial Aspects
Within the framework of the Global Program for the Issuance of Notes (“Obligaciones
negociables”), in February, the Company issued Class XXIV Notes for a total of AR$ 207.3 million.
This issuance was carried out in two series: Series I for AR$ 173.8 million and Series II for AR$
33.5 million.
In turn, in April, the Company issued Class XXV Notes for a total of AR$ 250 million. This issuance
was carried out in two series: Series I for AR$ 80 million and Series II for AR$ 170 million.
In turn, in July, the Company issued Class XXVI Notes for a total of AR$ 300 million. This issuance
was carried out in two series: Series I for AR$ 138.5 million and Series II for AR$ 161.5 million.
Finally, in October, the Company issued Class XXVII Notes for a total of AR$ 323 million. This
issuance was carried out in two series: Series I for AR$ 165 million and Series II for AR$ 158
million.
Additionally, during the fiscal year, loans and checking account overdrafts were taken for AR$ 365
million, and others were renewed for AR$ 429 million.
Furthermore, throughout the fiscal year, payments on account of amortization of principal and
interest related to Notes (“Obligaciones negociables”), Bank Loans and Financial Leases were
made for AR$ 1,885.2 million and US$ 18 million.
Evolution and Outlook
In the course of the year, we finished the new virtual branch, which was named “Naranja Online”.
This development is part of a process whereby we are introducing all services of the physical
branch into the web site.
With the support of the LEAN methodology, we worked on broadening the customer’s experience
through improvements in processes and efficiency in all areas. Adopting this system in several key
processes is one of the most important steps taken in the prior year, which has continued during
this fiscal year. In the next fiscal year, we will work to ensure that the improvements achieved are
maintained over time.
In the second quarter of the year, we launched the institutional campaign supporting the Argentine
Soccer Team, of which we are the official sponsor. This campaign has been based on the “Un gol,
un potrero” (One Goal, One Soccer Field) program, achieving an excellent national impact.
The last steps to finish our corporate building, which we have called “Casa Naranja”, continue at a
good pace.
Regarding economic aspects, we will continue adapting to the real macroeconomic situation, which
has a significant influence on the course of our operations. It is noteworthy that in January 2015,
upon the due date of the first principal installment of Class XIII Notes, our financial indebtedness in
foreign currency decreases to one third, mitigating the impact on financial income (loss) in the
event of potential exchange rate variations.
Our goals are aimed at strengthening our leadership position in the interior of the country and
continue expanding operations in the Autonomous City of Buenos Aires and Greater Buenos Aires.
88
Tarjeta Naranja S.A.
Summary of Activity
As of December 31, 2014
(Free Translation from the Original in Spanish for Publication in Argentina)
TARJETA NARANJA S.A.’S COMPARATIVE STATISTICAL DATA FOR CURRENT AND
PREVIOUS FISCAL YEARS
(This information is not within the scope of the Independent Auditors’ Report)
TARJETA NARANJA S.A.’S USERS
12.31.14
Open Accounts (in Thousands)
Monthly Average Consumption per Active
Account (AR$ at Face Value)
12.31.13
12.31.12
12.31.11
2,542
2,506
2,331
2,073
1,541
1,176
932
761
TARJETA NARANJA S.A.’S STORES
12.31.14
12.31.13
12.31.12
12.31.11
Transactions within the Last Quarter (in
Thousands)
31,794
30,433
27,839
23,573
Average Fee
2.83%
2.85%
2.87%
2.90%
NUMBER OF AUTHORIZED CREDIT CARDS FOR TARJETA NARANJA S.A. (in
Thousands)
12.31.14
12.31.13
12.31.12
12.31.11
Tarjetas Naranja
3,711
3,665
3,427
3,097
Tarjetas Visa
3,148
2,711
2,348
1,822
538
519
478
422
41
34
32
30
Tarjetas Mastercard
Tarjetas Amex
89
Tarjeta Naranja S.A.
Summary of Activity
As of December 31, 2014
(Free Translation from the Original in Spanish for Publication in Argentina)
COMPARATIVE CHART OF FINANCIAL POSITION (in Thousands of AR$)
12.31.14
12,974,971
891,235
13,866,206
9,578,801
1,856,646
11,435,447
2,430,759
2,430,759
-
Current Assets
Non-current Assets
Assets
Current Liabilities
Non-current Liabilities
Liabilities
Shareholders’ Equity
Attributable to the Company's Shareholders
Attributable to the Non-controlling Interest
12.31.13
10,202,269
703,496
10,905,765
7,169,376
1,794,305
8,963,681
1,942,084
1,942,084
-
12.31.12
7,130,919
639,338
7,770,257
4,855,671
1,355,410
6,211,081
1,559,176
1,559,176
-
12.31.11
5,382,589
449,596
5,832,185
3,569,497
1,036,753
4,606,250
1,225,935
1,225,637
298
COMPARATIVE CHART OF STATEMENTS OF INCOME (in Thousands of AR$)
Total Operating Income
Total Operating Income, Net of Provision for
Credit Losses
Total Operating Expenses
Income from Investments in Associates and
Other Companies
Income before Income Tax
Income Tax
Net Income for the Fiscal Year from
Continuing Operations
Net Loss for the Fiscal Year for Discontinued
Operations
Net Income for the Fiscal Year
Net Income for the Fiscal Year Attributable to
the Company’s Shareholders
Net Loss for the Fiscal Year Attributable to
the Non-Controlling Interest
Reserve for Translation Differences Related
to Foreign Operations
Comprehensive Income for the Fiscal Year
from Continuing Operations
Comprehensive Loss for the Fiscal Year from
Discontinued Operations
Comprehensive Income for the Fiscal Year
Comprehensive Income for the Fiscal Year
Attributable to the Company’s Shareholders
Comprehensive Loss for the Fiscal Year
Attributable to the Non-Controlling Interest
90
12.31.14
4,102,058
12.31.13
3,412,798
12.31.12
2,632,599
12.31.11
1,843,421
3,631,110
(2,677,763)
2,923,254
(2,159,126)
2,266,731
(1,597,029)
1,785,249
(1,055,894)
2,136
1,650
906
50
955,483
(322,267)
765,778
(262,915)
670,608
(230,876)
729,405
(252,083)
633,216
502,863
439,732
477,322
(14,191)
619,025
(13,150)
489,713
(8,123)
431,609
(2,654)
474,668
619,025
489,713
431,609
474,693
-
-
(25)
(5,350)
3,195
1,930
225
633,216
502,863
439,732
477,322
(19,541)
613,675
(9,955)
492,908
(6,193)
433,539
(2,429)
474,893
613,675
492,908
433,539
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 (Continued)
For the fiscal years ended December 31, 2014 and 2013
Figures stated in thousands of Argentine Pesos
(Free Translation from the Original in Spanish for Publication in Argentina)
COMPARATIVE STRUCTURE OF THE STATEMENT OF CASH FLOWS (in Thousands of AR$)
Funds Used in Operating Activities
Funds Used in Investing Activities
Funds Generated by Financing Activities
Total Gross Funds Generated / (Used in) during the
Fiscal Year
Increase Resulting from Foreign Exchange Gain
Attributable to Cash and Cash Equivalents
Total Net Funds Generated / (Used in) during the
Fiscal Year
12.31.14
(379,318)
(166,112)
752,983
12.31.13
(1,078,647)
(143,042)
1,659,234
12.31.12
(850,429)
(162,531)
985,803
12.31.11
(1,037,044)
(90,364)
1,238,338
207,553
437,545
(27,157)
110,930
654
3,605
2,766
12,905
208,207
441,150
(24,391)
123,835
RATIOS
Liquidity
Indebtedness
Solvency
Tied-up Capital
Profitability for the Fiscal Year
12.31.14
1.355
4.704
0.213
0.064
0.283
91
12.31.13
1.423
4.615
0.217
0.065
0.280
12.31.12
1.469
3.984
0.251
0.082
0.310
12.31.11
1.508
3.757
0.266
0.077
0.461
SUPERVISORY COMMITTEE’S REPORT
To the Directors and Shareholders of
Tarjeta Naranja S.A.
Legal Domicile: 151 Sucre Street
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, 2014, which include the Annual Report, the
Inventory, the Statement of Financial Position as of December 31, 2014, 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 then ended, and a summary of
significant accounting policies and other explanatory information. The balances and other
information for fiscal year 2013 are an integral part of the above-mentioned audited financial
statements and, therefore, should be considered in relation to those financial statements.
2. The Company’s Board of Directors is responsible for the preparation and fair 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).
Furthermore, the Board of Directors is responsible for the existence of the internal controls it
deems necessary to enable the preparation of financial statements free from significant
deviations resulting from errors or irregularities.
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., which was conducted in accordance with
International Auditing Standards (IAS), which were adopted as auditing standards in Argentina
by Technical Pronouncement No. 32 of FACPCE, as approved by the International Auditing and
Assurance Standards Board (“IAASB”). Those auditors issued their audit report on February 11,
2015, without any qualified opinion. An audit requires that the auditor plan and perform the
audit to obtain reasonable assurance that the financial statements are free from material
misstatements. An audit entails applying procedures to obtain judgmental evidence about the
amounts and other information disclosed in the financial statements. The procedures selected
depend on the auditor’s judgment, including the risk assessment of material misstatements in
the financial statements due to fraud or error. Upon performing such risk assessment, the
auditor must consider the appropriate internal control for the Company’s preparation and fair
presentation of the financial statements in order to design the audit procedures that are
adequate according to the circumstances and not for the purpose of expressing an opinion on
the effectiveness of the Company’s internal control.
An audit also includes evaluating the adequacy of the accounting policies applied, the
reasonableness of the significant estimates made by the Company’s Management and of the
presentation of the financial statements taken as a whole. 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 fiscal year we have applied the other procedures described in Section
294 of Law No. 19550, which we deemed necessary according to the circumstances, including
—among others— controlling the constitution and survival of the Directors' bond.
We believe that the work we performed provides a reasonable basis for our opinion.
4. In our opinion, with the scope mentioned above, Tarjeta Naranja S.A.’s financial statements
present fairly, in all material respects, the financial position as of December 31, 2014, 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 by optical media, as authorized by
the Superintendence of Commercial Companies of the Province of Córdoba; such authorization
has not yet been approved by the Argentine National Securities Commission; b) as called for by
Section 21, Part VI, Chapter III, Title II of the Regulations issued by the Argentine National
Securities Commission concerning the independence of external auditors as well as the quality
of the auditing policies applied by them and the Company’s accounting policies, the
abovementioned external auditor’s report includes a representation indicating that the auditing
standards in force have been applied, these standards include independence requirements, and
contain no observations relative to the application of said professional accounting standards,
and c) we have applied the procedures concerning prevention of asset laundering and funding
of terrorist activities, as established in the respective professional standards issued by the
Professional Council in Economic Sciences of the Province of Córdoba.
Córdoba, February 11, 2015
Jorge F. Gregorat
For the Supervisory Committee
2