The accompanying notes are an integral part of the Condensed Interim
Financial Statements.
The accompanying notes are an integral part of the Condensed Interim
Financial Statements.
The accompanying notes are an integral
part of the Condensed Interim Financial Statements.
The accompanying notes are an integral part of the Condensed Interim
Financial Statements.
| Note | 1
|
General information |
Empresa Distribuidora y Comercializadora
Norte S.A. (hereinafter “edenor” or “the Company”) is a corporation (sociedad anónima) organized
under the laws of Argentina, with legal address at 6363 Av. Del Libertador Ave - City of Buenos Aires, Argentine Republic, whose shares
are traded on the Buenos Aires Stock Exchange and the New York Stock Exchange (NYSE).
The corporate purpose of edenor is
to engage in the distribution and sale of electricity within the concession area. Furthermore, among other activities, the Company may
subscribe or acquire shares of other electricity distribution companies, subject to the approval of the regulatory agency, assign the
use of the network to provide electricity transmission or other voice, data and image transmission services, and render advisory, training,
maintenance, consulting, and management services and know-how related to the distribution of electricity both in Argentina and abroad.
These activities may be conducted directly by edenor or through subsidiaries or related companies. In addition, the Company may
act as trustee of trusts created under Argentine laws.
The Company’s economic and financial
situation
In the last few fiscal years, the Company
recorded negative working capital and operating losses. This situation is due mainly to the suspension of the electricity rate adjustment
since February 2019, in spite of the constant increase of the operating costs and the investments necessary, both for the operation of
the network and for maintaining the quality of the service, in an inflationary context in which the Argentine economy has been since mid-2018.
Additionally, this situation was exacerbated
by the effects of the COVID-19 pandemic in the last two years, which had a severe social, economic and financial impact. Most of the world’s
countries implemented exceptional actions, which had an immediate effect on their economies, as rapidly evidenced by the falls recorded
in production and activity indicators. The governments’ immediate response to these consequences was the implementation of tax aids
to sustain their citizens’ income and thereby reduce the risk of a breakdown in the chain of payments, with the aim of avoiding
an economic and financial crisis.
With regard to the Company, in 2021 and the
first months of 2022, the values of the electricity rate schedules suffered changes that, except for the provisions of ENRE Resolutions
Nos. 107/2021 and 76/2022 dated April 30, 2021 and February 25, 2022, respectively, implied only the passing through of the seasonal prices
not an improvement of revenues from the Company’s CPD, which are still insufficient to cover the economic and financial needs of
the Distribution Company in a context of growing inflation, with the annual rate surpassing 50%. Nevertheless, and in spite of the aforementioned
context with constant increases in operating costs, the investments necessary, both for the operation of the network and for maintaining
and even improving the quality of the service, have been made.
Although in the current year the economic
activity has shown some recovery after the effect caused by the COVID-19 pandemic, the country’s macroeconomic situation with the
increase in the rate of inflation, the widening of the gap between the official dollar exchange rate and the dollar exchange rate quoted
in the informal market, and the consequences of the agreement with the International Monetary Fund make it difficult to envisage a clear-cut
trend of the economy in the short term.
CONDENSED INTERIM FINANCIAL STATEMENTS |
NOTES |
|
This complex and vulnerable economic context
is aggravated by the currency restrictions imposed by the BCRA pursuant to which the BCRA’s prior authorization is required for
certain transactions, such as the Company’s transactions associated with the payment of imports of goods that are necessary for
the provision of the service, and the payments to service the financial debt. These currency restrictions, or those to be implemented
in the future, could affect the Company’s ability to access the MULC in order to acquire the foreign currency necessary to face
its operating and financial obligations.
As a consequence of the described context,
the Company witnessed an even greater deterioration of the economic and financial equation due to the rate freeze, the impossibility of
taking legal action to enforce payment of debts for electricity consumed but not paid, and the increase in costs on the Company’s
operating structure and supplies. Therefore, it became necessary to partially postpone payments to CAMMESA for energy purchased in the
MEM as from the maturities taking place in March 2020; payment obligations which have been partially regularized, but as of March 31,
2022 accumulate a past due principal balance of $ 32,184, plus interest and charges for $ 31,002.
Despite the previously detailed situation,
it is worth pointing out that, in general terms, the quality of the electricity distribution service has been significantly improved,
both in duration and frequency of power cuts. In view of the continuous increase of the costs associated with the provision of the service,
as well as the need for additional investments to meet the demand, the Company is analyzing different measures aimed at mitigating the
negative effects of this situation on its financial structure, minimizing the impact on the sources of employment, the execution of the
investment plan, and the carrying out of the essential operation, maintenance and improvement-related works that are necessary to maintain
the provision of the public service, object of the concession, in a satisfactory manner in terms of quality and reliability.
Due to that which has been previously described,
the Board of Directors believes there is material uncertainty that may cast significant doubt upon edenor’s ability to continue
as a going concern, which may result in the Company’s being obliged to defer certain payment obligations or unable to meet expectations
for salary increases or the increases recorded in third-party costs.
Nevertheless, these condensed interim financial
statements have been prepared assuming that the Company will continue to operate as a going concern and do not include the adjustments
or reclassifications that might result from the outcome of these uncertainties, inasmuch as this Distribution Company has historically
been provided with transitional solutions that have made it possible to partially restore the economic and financial equation and ensure
the operation of the distribution networks.
| Note | 2 |
Regulatory framework |
At the date of issuance of these condensed
interim financial statements, there exist the following changes with respect to the situation reported by the Company in the Financial
Statements as of December 31, 2021:
| a) | Electricity rate situation |
On April 18, 2022, by means of SE Resolutions
Nos. 235 and 236/2022, the PEN called a Public Hearing to be held on May 11 and 12, 2022, respectively, to consider the following issues:
| - | the treatment of the new seasonal reference
prices of the Seasonal Price of Electricity (PEST), applicable as from June 1, 2022; and |
CONDENSED INTERIM FINANCIAL STATEMENTS |
NOTES |
|
| - | the treatment of the implementation of the
segmentation system for the granting of Federal Government subsidies on energy prices to natural gas and electricity consumers, for the
2022-2023 biennium. |
Neither of the above-mentioned items represent
an improvement in the Company’s revenues from the CPD; they will only imply the transfer of prices to and/or elimination of subsidies
on the amounts to be billed to Consumers.
Moreover, on May 10, 2022, by means of Resolution
No. 146/2022, the ENRE approves the values of the Company’s electricity rate schedule, effective from the billing relating to the
reading of meters subsequent to 12:00 AM on May 1, 2022.
By virtue of the Agreement described in Note
2.e) to the Financial Statements as of December 31, 2021, the Company received a first disbursement for $ 1,500, which was specifically
used for complying with the Preventive and Corrective Maintenance Work Plan for the Electricity Distribution Network. The Company used
the funds only after the ENRE certified compliance with both the degree of completion of the works included in the referred to plan and
the related financial milestones.
As of March 31, 2022, negotiations are underway
between the Company and the ENRE concerning the other disbursements stipulated in the agreement, which total an additional $1,000 relating
to the second and third disbursements, plus a fourth disbursement in accordance with that which the ENRE will validate and inform about
the vulnerable neighborhoods’ total consumption between August and December 2020.
At the date of issuance of these condensed
interim financial statements, the Company has used a total of $ 2,218, of which $ 718 is pending crediting, relating to the reports on
progress of the works performed. The income recognized in fiscal year 2022, which relates to reports on progress of the works performed
with the Company’s own funds, amounts to $ 423.8 (which at the purchasing power of the currency
at March 31, 2022 amounts to $ 459).
| Note | 3 |
Basis of preparation |
These condensed interim financial statements
for the three-month period ended March 31, 2022:
| i) | have been prepared in accordance with the
provisions of IAS 34 “Interim Financial Reporting”, incorporated by the CNV; |
| ii) | have not been audited; they have been reviewed
by the Independent Accountant in accordance with ISRE 2410, whose scope is substantially less than that of an audit performed in accordance
with applicable auditing standards. The Company’s Management estimates that they include all the necessary adjustments to fairly
present the results of operations for each period. The results of operations for the three-month period ended March 31, 2022 and its comparative
period as of March 31, 2021 do not necessarily reflect the Company’s results in proportion to the full fiscal year. They were approved
for issue by the Company’s Board of Directors on May 12, 2022; |
| iii) | are measured in pesos (the legal currency
in Argentina) restated in accordance with that mentioned in this Note, which is also the presentation currency; |
| iv) | must be read together with the audited Financial
Statements as of December 31, 2021 prepared under IFRS. |
CONDENSED INTERIM FINANCIAL STATEMENTS |
NOTES |
|
Comparative information
The balances as of December 31 and March
31, 2021, as the case may be, disclosed in these condensed interim financial statements for comparative purposes, arise as a result of
restating the annual Financial Statements and the Condensed Interim Financial Statements as of those dates, respectively, to the purchasing
power of the currency at March 31, 2022, as a consequence of the restatement of financial information described hereunder. Furthermore,
certain amounts of the financial statements presented in comparative form have been reclassified in order to maintain consistency of presentation
with the amounts of the current periods.
Restatement of financial information
The condensed interim financial statements,
including the figures relating to the previous year/period, have been stated in terms of the measuring unit current at March 31, 2022,
in accordance with IAS 29 “Financial reporting in hyperinflationary economies”, using the indexes published by the FACPCE.
The inflation rate applied for the January 1, 2022 - March 31, 2022 period was 16.1%.
| Note | 4 |
Accounting policies |
The accounting policies adopted for these
condensed interim financial statements are consistent with those used in the Financial Statements for the last financial year, which ended
on December 31, 2021.
Accounting
standards, amendments and interpretations issued by the IASB in the last few years that are effective as of March 31, 2022 and
have been adopted by the Company:
- IAS 16 “Property, plant and equipment”,
amended in May 2020: It incorporates amendments to the recognition of inventories, sales and costs of items produced while bringing an
item of property, plant and equipment to the location and condition necessary for its intended use.
- Annual improvements to IFRS – 2018-2020
Cycle: Amendments to IFRS 1 (translation differences in subsidiaries); IFRS 9 (derecognition of financial liabilities); IFRS 16 (illustrative
example of leasehold improvements); and IAS 41 (cash flows in the fair value of biological assets).
- IFRS 3 “Business combinations”,
amended in May 2020: It incorporates references to the definitions of assets and liabilities in the new Conceptual Framework and clarifications
on contingent assets and liabilities that are incurred separately from those assumed in a business combination.
- IAS 37 “Provisions, contingent liabilities
and contingent assets”, amended in May 2020: It clarifies the scope of the concept of cost of fulfilling an onerous contract.
There are no new IFRS or IFRIC applicable
as from this period that have a material impact on the Company’s condensed interim financial statements.
CONDENSED INTERIM FINANCIAL STATEMENTS |
NOTES |
|
| Note | 5 |
Financial risk management |
| Note | 5.1 |
Financial risk factors |
The Company’s activities and the market
in which it operates expose the Company to a number of financial risks: market risk (including currency risk, cash flows interest rate
risk, fair value interest rate risk and price risk), credit risk and liquidity risk.
Additionally, the difficulty in obtaining
financing in international or national markets could affect some of the Company’s business variables, such as interest rates, foreign
currency exchange rates and the access to sources of financing.
With regard to the Company’s risk management
policies, there have been no significant changes since the last fiscal year end.
As of March 31, 2022 and
December 31, 2021, the Company’s balances in foreign currency are as follow:
|
|
Currency |
|
Amount in foreign currency |
|
Exchange rate (1) |
|
Total
03.31.22 |
|
Total
12.31.20 |
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
|
|
|
|
|
Other receivables |
|
USD |
|
6 |
|
111.010 |
|
666 |
|
120 |
Financial assets at fair value through profit or loss |
|
USD |
|
82 |
|
111.010 |
|
9,103 |
|
5,486 |
Cash and cash equivalents |
|
USD |
|
12 |
|
111.010 |
|
1,332 |
|
1,431 |
TOTAL CURRENT ASSETS |
|
|
|
|
|
|
|
11,101 |
|
7,037 |
TOTAL ASSETS |
|
|
|
|
|
|
|
11,101 |
|
7,037 |
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
|
|
|
|
Trade payables |
|
USD |
|
5 |
|
111.010 |
|
555 |
|
1,431 |
|
|
EUR |
|
1 |
|
123.121 |
|
123 |
|
- |
Borrowings |
|
USD |
|
102 |
|
111.010 |
|
11,334 |
|
11,914 |
Other payables |
|
USD |
|
10 |
|
111.010 |
|
1,110 |
|
1,192 |
TOTAL CURRENT LIABILITIES |
|
|
|
|
|
|
|
13,122 |
|
14,537 |
TOTAL LIABILITIES |
|
|
|
|
|
|
|
13,122 |
|
14,537 |
| (1) | The exchange rates used are the BNA exchange
rates in effect as of March 31, 2022 for US Dollars (USD) and Euros (EUR). |
The Company classifies the measurements of
financial instruments at fair value using a fair value hierarchy that reflects the relevance of the variables used for carrying out such
measurements. The fair value hierarchy has the following levels:
CONDENSED INTERIM FINANCIAL STATEMENTS |
NOTES |
|
· Level 1: quoted prices (unadjusted)
in active markets for identical assets or liabilities.
· Level 2: inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly
(i.e. prices) or indirectly (i.e. derived from the prices).
· Level 3: inputs for the asset or liability that are not based on observable market data (i.e. unobservable inputs).
The table below shows the Company’s
financial assets and liabilities measured at fair value as of March 31, 2022 and December 31, 2021:
|
|
LEVEL 1 |
|
|
|
At March 31, 2022 |
|
|
Assets |
|
|
Other receivables |
|
|
Government bonds |
|
602 |
Financial assets at fair value through profit or loss: |
|
|
Government bonds |
|
12,102 |
Mutual funds |
|
3,813 |
Cash and cash equivalents: |
|
|
Mutual funds |
|
3,838 |
Total assets |
|
20,355 |
|
|
|
|
|
|
At December 31, 2021 |
|
|
Assets |
|
|
Financial assets at fair value through profit or loss: |
|
|
Government bonds |
|
10,300 |
Mutual funds |
|
7,638 |
Cash and cash equivalents |
|
|
Mutual funds |
|
1,566 |
Total assets |
|
19,504 |
Interest rate risk is the risk of fluctuation
in the fair value or cash flows of an instrument due to changes in market interest rates. The Company’s exposure to interest rate
risk is mainly related to its long-term debt obligations.
Indebtedness at floating rates exposes the
Company to interest rate risk on its cash flows. Indebtedness at fixed rates exposes the Company to interest rate risk on the fair value
of its liabilities. As of March 31, 2022 and December 31, 2021 all the loans were obtained at fixed interest rates. The Company’s
policy is to keep the largest percentage of its indebtedness in instruments that accrue interest at fixed rates.
CONDENSED INTERIM FINANCIAL STATEMENTS |
NOTES |
|
| Note | 6 |
Critical accounting estimates and judgments |
The preparation of the condensed interim
financial statements requires the Company’s Management to make estimates and assessments concerning the future, exercise critical
judgment and make assumptions that affect the application of the accounting policies and the reported amounts of assets and liabilities
and revenues and expenses.
These estimates and judgments are permanently
evaluated and are based upon past experience and other factors that are reasonable under the existing circumstances. Future actual results
may differ from the estimates and assessments made at the date of preparation of these condensed interim financial statements.
In the preparation of these condensed interim
financial statements, there were no changes in either the critical judgments made by the Company when applying its accounting policies
or the sources of estimation uncertainty used with respect to those applied in the Financial Statements for the year ended December 31,
2021.
| Note | 7 |
Contingencies and lawsuits |
As of March 31, 2022, the provision for contingencies
has been recorded to face situations existing at the end of each period that may result in a loss for the Company if one or more future
events occurred or failed to occur.
At the date of issuance of these condensed
interim financial statements, there are no significant changes with respect to the situation reported by the Company in the Financial
Statements as of December 31, 2021, except for the following:
| - | AFIP’s Income Tax claim, Undocumented
outflows and VAT |
On February 18, 2022, the Company was
served notice of the initiation of a new verification process in respect of the same suppliers in question, with a request for additional
information on transactions performed from January 2019 to the present. It was answered within the legal timeframe and in proper form
on March 8, 2022.
In the Company’s opinion, strong and
sufficient arguments exist to make its position prevail at the judicial stage. Therefore, no liabilities whatsoever have been recorded
for this concept as of March 31, 2022.
Nevertheless, the Company is currently assessing
different scenarios with the aim of defending itself against the tax claims, among them, adhering to easy payment term or debt regularization
plans existing at the time the decision is made by Management.
CONDENSED INTERIM FINANCIAL STATEMENTS |
NOTES |
|
| Note | 8 |
Revenue from sales and energy purchases |
We provide below a brief description
of the main services provided by the Company:
Sales of electricity
Small demand segment: Residential use and public lighting (T1) |
Relates to the highest demand average recorded over 15 consecutive minutes that is less than 10 kilowatts. In turn, this segment is subdivided into different residential categories based on consumption. This segment also includes a category for public lighting. Users are categorized by the Company according to their consumption. |
Medium demand segment: Commercial and industrial customers (T2) |
Relates to the highest demand average recorded over 15 consecutive minutes that is equal to or greater than 10 Kilowatts but less than 50 Kilowatts. The Company agrees with the user the supply capacity. |
Large demand segment (T3) |
Relates to the highest demand average recorded over 15 consecutive minutes that is greater than 50 Kilowatts. In turn, this segment is subdivided into categories according to the supply voltage -low, medium or high-, from voltages of up to 1 Kilovolt to voltages greater than 66 Kilovolts. |
Other: (Shantytowns/
Wheeling system) |
Revenue is recognized to the extent that a renewal of the Framework Agreement has been formalized for the period in which the service was accrued. In the case of the service related to the Wheeling system, revenue is recognized when the Company allows third parties (generators and large users) to access to the available transmission capacity within its distribution system upon payment of a wheeling fee. |
Other services
Right of use of poles |
Revenue is recognized to the extent that the rental value of the right of use of the poles used by the Company’s electricity network has been agreed upon for the benefit of third parties. |
Connection and reconnection charges |
Relate to revenue accrued for the carrying out of the electricity supply connection of new customers or the reconnection of already existing users. |
CONDENSED INTERIM FINANCIAL STATEMENTS |
NOTES |
|
Energy purchases
Energy purchase |
The Company bills its users the cost of its purchases of energy, which includes charges for purchases of energy and power. The Company purchases electric power at seasonal prices approved by the ENRE. The price of the Company’s electric power reflects the costs of transmission and other regulatory charges. |
Energy
losses |
Energy losses are equivalent to the difference between energy purchased and energy sold. These losses can be classified into technical and non-technical losses. Technical losses represent the energy lost during transmission and distribution within the network as a consequence of the natural heating of the conductors and transformers that carry electricity from power generation plants to users. Non-technical losses represent the remainder of the Company’s energy losses and are mainly due to the illegal use of its services or the theft of energy. Energy losses require that the Company purchase additional energy in order to meet the demand and its Concession Agreement allows it to recover from its users the cost of these purchases up to a loss factor specified in its concession for each rate category. The current loss factor recognized in the tariff by virtue of its concession amounts to approximately 9.1%. |
|
|
03.31.22 |
|
03.31.21 |
|
|
GWh |
|
$ |
|
GWh |
|
$ |
Sales of electricity |
|
|
|
|
|
|
|
|
Small demand segment: Residential use and public lighting (T1) |
|
3,040 |
|
17,084 |
|
2,873 |
|
20,042 |
Medium demand segment: Commercial and industrial (T2) |
|
391 |
|
3,112 |
|
373 |
|
3,876 |
Large demand segment (T3) |
|
936 |
|
8,536 |
|
880 |
|
7,179 |
Other: (Shantytowns/Wheeling system)
|
|
1,103 |
|
1,466 |
|
1,085 |
|
1,304 |
Subtotal - Sales of electricity |
|
5,470 |
|
30,198 |
|
5,211 |
|
32,401 |
|
|
|
|
|
|
|
|
|
Other services |
|
|
|
|
|
|
|
|
Right of use of poles |
|
|
|
185 |
|
|
|
187 |
Connection and reconnection charges |
|
|
18 |
|
|
|
19 |
Subtotal - Other services |
|
|
|
203 |
|
|
|
206 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total - Revenue |
|
|
|
30,401 |
|
|
|
32,607 |
|
|
03.31.22 |
|
03.31.21 |
|
|
GWh |
|
$ |
|
GWh |
|
$ |
|
|
|
|
|
|
|
|
|
Energy purchases (1) |
|
6,351 |
|
(17,979) |
|
6,256 |
|
(19,771) |
| (1) | As of March 31, 2022
and 2021, includes technical and non-technical energy losses for 881 GWh and 1,045 GWh, respectively. |
CONDENSED INTERIM FINANCIAL STATEMENTS |
NOTES |
|
| Note | 9 |
Expenses by nature |
The detail of expenses by nature is as follows:
Expenses by nature at 03.31.22 |
Description |
|
Transmission and distribution expenses |
|
Selling expenses |
|
Administrative expenses |
|
Total |
Salaries and social security taxes |
|
3,100 |
|
471 |
|
871 |
|
4,442 |
Pension plans |
|
185 |
|
28 |
|
52 |
|
265 |
Communications expenses |
|
49 |
|
147 |
|
- |
|
196 |
Allowance for the impairment of trade and other receivables |
|
- |
|
392 |
|
- |
|
392 |
Supplies consumption |
|
554 |
|
- |
|
55 |
|
609 |
Leases and insurance |
|
1 |
|
- |
|
165 |
|
166 |
Security service |
|
173 |
|
20 |
|
14 |
|
207 |
Fees and remuneration for services |
|
1,167 |
|
798 |
|
840 |
|
2,805 |
Public relations and marketing |
|
- |
|
200 |
|
- |
|
200 |
Advertising and sponsorship |
|
- |
|
103 |
|
- |
|
103 |
Depreciation of property, plants and equipments |
2,141 |
|
319 |
|
262 |
|
2,722 |
Depreciation of right-of-use asset |
15 |
|
29 |
|
103 |
|
147 |
Directors and Supervisory Committee members’ fees |
- |
|
- |
|
11 |
|
11 |
ENRE penalties |
|
507 |
|
575 |
|
- |
|
1,082 |
Taxes and charges |
|
- |
|
452 |
|
24 |
|
476 |
Other |
|
- |
|
- |
|
7 |
|
7 |
At 03.31.22 |
|
7,892 |
|
3,534 |
|
2,404 |
|
13,830 |
The expenses included in the chart above
are net of the Company’s own expenses capitalized in property, plant and equipment as of March 31, 2022 for $ 605.4.
Expenses by nature at 03.31.21 |
Description |
|
Transmission and distribution expenses |
|
Selling expenses |
|
Administrative expenses |
|
Total |
Salaries and social security taxes |
|
3,211 |
|
506 |
|
733 |
|
4,450 |
Pension plans |
|
240 |
|
38 |
|
55 |
|
333 |
Communications expenses |
|
70 |
|
171 |
|
- |
|
241 |
Allowance for the impairment of trade and other receivables |
|
- |
|
1,035 |
|
- |
|
1,035 |
Supplies consumption |
|
495 |
|
- |
|
61 |
|
556 |
Leases and insurance |
|
- |
|
1 |
|
157 |
|
158 |
Security service |
|
144 |
|
10 |
|
18 |
|
172 |
Fees and remuneration for services |
|
1,423 |
|
865 |
|
590 |
|
2,878 |
Public relations and marketing |
|
- |
|
5 |
|
- |
|
5 |
Advertising and sponsorship |
|
- |
|
2 |
|
- |
|
2 |
Depreciation of property, plants and equipments |
2,079 |
|
310 |
|
254 |
|
2,643 |
Depreciation of right-of-use asset |
|
18 |
|
36 |
|
127 |
|
181 |
Directors and Supervisory Committee members’ fees |
- |
|
- |
|
13 |
|
13 |
ENRE penalties (2) |
|
392 |
|
351 |
|
- |
|
743 |
Taxes and charges |
|
- |
|
459 |
|
24 |
|
483 |
Other |
|
- |
|
- |
|
19 |
|
19 |
At 03.31.21 |
|
8,072 |
|
3,789 |
|
2,051 |
|
13,912 |
The expenses included in the chart above
are net of the Company’s own expenses capitalized in property, plant and equipment as of March 31, 2021 for $ 610.2.
CONDENSED INTERIM FINANCIAL STATEMENTS |
NOTES |
|
| Note | 10 |
Other operating income (expense), net |
|
Note |
|
03.31.22 |
|
03.31.21 |
Other operating income |
|
|
|
|
|
Income from customer surcharges |
|
|
450 |
|
631 |
Commissions on municipal taxes collection |
|
|
104 |
|
102 |
Fines to suppliers |
|
|
14 |
|
13 |
Services provided to third parties |
|
|
69 |
|
54 |
Related parties |
30.a |
|
- |
|
2 |
Income from non-reimbursable customer
contributions |
|
|
12 |
|
15 |
Expense recovery |
|
|
9 |
|
- |
Construction plan Framework agreement |
2.b |
|
459 |
|
- |
Other |
|
|
6 |
|
36 |
Total other operating income |
|
|
1,123 |
|
853 |
|
|
|
|
|
|
Other operating expense |
|
|
|
|
|
Gratifications for services |
|
|
(33) |
|
(95) |
Cost for services provided to third parties |
|
|
(19) |
|
(14) |
Severance paid |
|
|
(11) |
|
(10) |
Debit and Credit Tax |
|
|
(284) |
|
(315) |
Provision for contingencies |
29 |
|
(824) |
|
(616) |
Disposals of property, plant and equipment |
|
(74) |
|
(58) |
Other |
|
|
(10) |
|
(54) |
Total other operating expense |
|
|
(1,255) |
|
(1,162) |
| Note | 11 | Net
financial costs |
|
Note |
|
03.31.22 |
|
03.31.21 |
Financial income |
|
|
|
|
|
Financial interest |
|
|
8 |
|
21 |
Total financial income |
|
|
8 |
|
21 |
|
|
|
|
|
|
Financial costs |
|
|
|
|
|
Commercial interest |
|
|
(7,055) |
|
(5,275) |
Interest and other |
|
|
(1,256) |
|
(1,588) |
Fiscal interest |
|
|
(1) |
|
(1) |
Bank fees and expenses |
|
|
(6) |
|
(4) |
Total financial costs |
|
|
(8,318) |
|
(6,868) |
|
|
|
|
|
|
Other financial results |
|
|
|
|
|
Changes in fair value of financial assets |
|
|
(869) |
|
494 |
Net gain from the cancelattion of
Corporate Notes |
|
|
- |
|
2 |
Exchange differences |
|
|
(59) |
|
(924) |
Adjustment to present value of receivables |
|
|
(45) |
|
(38) |
Recovery of provision for credit RDSA |
32 |
|
- |
|
674 |
Other financial costs (*) |
|
|
(563) |
|
(91) |
Total other financial costs |
|
|
(1,536) |
|
117 |
Total net financial costs |
|
|
(9,846) |
|
(6,730) |
(*) As of March 31, 2022, relates to EDELCOS S.A. technical
assistance.
CONDENSED INTERIM FINANCIAL STATEMENTS |
NOTES |
|
| Note | 12 | Basic and diluted loss per share |
Basic
The basic loss per share is calculated by
dividing the loss attributable to the holders of the Company’s equity instruments by the weighted average number of common shares
outstanding as of March 31, 2022 and 2021, excluding common shares purchased by the Company and held as treasury shares.
The basic loss per share coincides with the
diluted loss per share, inasmuch as there exist neither preferred shares nor Corporate Notes convertible into common shares.
|
|
03.31.22 |
|
03.31.21 |
Loss for the period attributable to the owners of the Company |
|
(2,818) |
|
(1,018) |
Weighted average number of common shares outstanding |
|
875 |
|
875 |
Basic and diluted loss per share – in pesos |
|
(3.22) |
|
(1.16) |
CONDENSED INTERIM FINANCIAL STATEMENTS |
NOTES |
|
| Note | 13 | Property, plant and equipment |
|
|
Lands and buildings |
|
Substations |
|
High, medium and low voltage lines |
|
Meters and Transformer chambers and platforms |
|
Tools, Furniture, vehicles, equipment, communications and advances to suppliers |
|
Construction in process |
|
Supplies and spare parts |
|
Total |
At 12.31.21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost |
|
6,592 |
|
59,184 |
|
147,377 |
|
64,040 |
|
13,851 |
|
50,639 |
|
560 |
|
342,243 |
Accumulated depreciation |
|
(1,404) |
|
(20,457) |
|
(58,987) |
|
(26,330) |
|
(8,238) |
|
- |
|
- |
|
(115,416) |
Net amount |
|
5,188 |
|
38,727 |
|
88,390 |
|
37,710 |
|
5,613 |
|
50,639 |
|
560 |
|
226,827 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions |
|
16 |
|
- |
|
4 |
|
94 |
|
94 |
|
2,476 |
|
- |
|
2,684 |
Disposals |
|
- |
|
- |
|
(61) |
|
(13) |
|
- |
|
- |
|
- |
|
(74) |
Transfers |
|
17 |
|
5 |
|
2,376 |
|
570 |
|
598 |
|
(4,028) |
|
462 |
|
- |
Depreciation for the period |
(34) |
|
(510) |
|
(1,248) |
|
(624) |
|
(306) |
|
- |
|
- |
|
(2,722) |
Net amount 03.31.22 |
|
5,187 |
|
38,222 |
|
89,461 |
|
37,737 |
|
5,999 |
|
49,087 |
|
1,022 |
|
226,715 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 03.31.22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost |
|
6,625 |
|
59,189 |
|
149,657 |
|
64,683 |
|
14,543 |
|
49,087 |
|
1,022 |
|
344,806 |
Accumulated depreciation |
|
(1,438) |
|
(20,967) |
|
(60,196) |
|
(26,946) |
|
(8,544) |
|
- |
|
- |
|
(118,091) |
Net amount |
|
5,187 |
|
38,222 |
|
89,461 |
|
37,737 |
|
5,999 |
|
49,087 |
|
1,022 |
|
226,715 |
| · | During the period ended March 31, 2022, the Company capitalized as direct
own costs $ 605.4. |
CONDENSED INTERIM FINANCIAL STATEMENTS |
NOTES |
|
|
|
Lands and buildings |
|
Substations |
|
High, medium and low voltage lines |
|
Meters and Transformer chambers and platforms |
|
Tools, Furniture, vehicles, equipment, communications and advances to suppliers |
|
Construction in process |
|
Supplies and spare parts |
|
Total |
At 12.31.20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost |
|
6,386 |
|
55,124 |
|
140,446 |
|
61,374 |
|
10,986 |
|
49,123 |
|
566 |
|
324,005 |
Accumulated depreciation |
|
(1,253) |
|
(18,448) |
|
(54,299) |
|
(23,995) |
|
(7,192) |
|
- |
|
- |
|
(105,187) |
Net amount |
|
5,133 |
|
36,676 |
|
86,147 |
|
37,379 |
|
3,794 |
|
49,123 |
|
566 |
|
218,818 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions |
|
7 |
|
- |
|
3 |
|
163 |
|
380 |
|
3,153 |
|
214 |
|
3,920 |
Disposals |
|
- |
|
- |
|
(11) |
|
(45) |
|
(2) |
|
- |
|
- |
|
(58) |
Transfers |
|
- |
|
901 |
|
1,446 |
|
926 |
|
(220) |
|
(2,918) |
|
(135) |
|
- |
Depreciation for the period |
(39) |
|
(503) |
|
(1,233) |
|
(630) |
|
(238) |
|
- |
|
- |
|
(2,643) |
Net amount 03.31.21 |
|
5,101 |
|
37,074 |
|
86,352 |
|
37,793 |
|
3,714 |
|
49,358 |
|
645 |
|
220,037 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 03.31.21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost |
|
6,393 |
|
56,023 |
|
141,827 |
|
62,393 |
|
11,139 |
|
49,358 |
|
645 |
|
327,778 |
Accumulated depreciation |
|
(1,292) |
|
(18,949) |
|
(55,475) |
|
(24,600) |
|
(7,425) |
|
- |
|
- |
|
(107,741) |
Net amount |
|
5,101 |
|
37,074 |
|
86,352 |
|
37,793 |
|
3,714 |
|
49,358 |
|
645 |
|
220,037 |
| · | During the period ended March 31, 2021, the Company capitalized as direct
own costs $ 610.2. |
CONDENSED INTERIM FINANCIAL STATEMENTS |
NOTES |
|
| Note | 14 | Right-of-use asset |
The leases recognized as right-of-use assets in accordance with
IFRS 16 are disclosed below:
|
03.31.22 |
|
12.31.21 |
Right of uses asset by leases |
510 |
|
494 |
The development of right-of-use assets is as follows:
|
03.31.22 |
|
03.31.21 |
Balance at beginning of year |
494 |
|
492 |
Additions |
163 |
|
99 |
Depreciation for the period |
(147) |
|
(181) |
Balance at end of the period |
510 |
|
410 |
|
|
03.31.22 |
|
12.31.21 |
|
|
|
|
|
Supplies and spare-parts |
|
3,033 |
|
3,994 |
Advance to suppliers |
|
1 |
|
- |
Total inventories |
|
3,034 |
|
3,994 |
| Note | 16 | Other
receivables |
|
Note |
|
03.31.22 |
|
12.31.21 |
Non-current: |
|
|
|
|
|
Financial credit |
|
|
2 |
|
7 |
Related parties |
30.d |
|
2 |
|
2 |
Total non-current |
|
|
4 |
|
9 |
|
|
|
|
|
|
Current: |
|
|
|
|
|
Credit for Real estate asset |
32 |
|
31 |
|
36 |
Construction plan Framework agreement |
2.b |
|
718 |
|
341 |
Government bonds (*) |
|
|
602 |
|
- |
Judicial deposits |
|
|
88 |
|
99 |
Security deposits |
|
|
67 |
|
75 |
Prepaid expenses |
|
|
143 |
|
241 |
Advances to personnel |
|
|
1 |
|
28 |
Financial credit |
|
|
14 |
|
16 |
Advances to suppliers |
|
|
136 |
|
10 |
Tax credits |
|
|
1,084 |
|
1,585 |
Related parties |
30.d |
|
1 |
|
1 |
Debtors for complementary activities |
|
|
90 |
|
73 |
Other |
6 |
|
5 |
Allowance for the impairment of other receivables |
|
|
(30) |
|
(34) |
Total current |
|
|
2,951 |
|
2,476 |
(*) Relates to 2030 Global Bonds of the Argentine
Republic (GD30) for 9,130,000 NV assigned to Global Valores S.A. according to the offer of assignment of securities dated February 7,
2022. The Company retains the risks and rewards of the aforementioned bonds and may make use of them, at its own request, in a term of
15 days.
CONDENSED INTERIM FINANCIAL STATEMENTS |
NOTES |
|
The value of the Company’s other financial
receivables approximates their fair value.
The other non-current receivables are measured
at amortized cost, which does not differ significantly from their fair value.
The roll forward of the allowance for the impairment of other
receivables is as follows:
|
|
|
03.31.22 |
|
03.31.21 |
Balance at beginning of year |
|
|
34 |
|
3,859 |
Increase |
|
|
9 |
|
2 |
Decrease |
|
|
- |
|
(2,681) |
Result from exposure to inlfation |
|
|
(4) |
|
(389) |
Recovery |
|
|
(9) |
|
(674) |
Balance at end of the period |
|
|
30 |
|
117 |
| Note | 17 | Trade
receivables |
|
|
|
03.31.22 |
|
03.31.21 |
|
|
|
|
|
|
Sales of electricity – Billed |
|
|
15,461 |
|
17,457 |
Receivables in litigation |
|
|
228 |
|
294 |
Allowance for the impairment of trade receivables |
|
|
(6,369) |
|
(6,973) |
Subtotal |
|
|
9,320 |
|
10,778 |
|
|
|
|
|
|
Sales of electricity – Unbilled |
|
|
9,380 |
|
9,165 |
PBA & CABA government credit |
|
|
498 |
|
445 |
Fee payable for the expansion of the transportation and others |
|
|
2 |
|
2 |
Total Trade receivables |
|
|
19,200 |
|
20,390 |
The value of the Company’s trade receivables
approximates their fair value.
The roll forward of the allowance for the impairment of trade
receivables is as follows:
|
|
|
03.31.22 |
|
03.31.21 |
Balance at beginning of the year |
|
|
6,973 |
|
8,067 |
Increase |
|
|
392 |
|
1,035 |
Decrease |
|
|
(11) |
|
(106) |
Result from exposure to inlfation |
|
|
(985) |
|
(988) |
Balance at end of the period |
|
|
6,369 |
|
8,008 |
| Note | 18 | Financial
assets at amortized cost |
|
|
|
03.31.22 |
|
12.31.21 |
|
|
|
|
|
|
Government bonds |
|
|
165 |
|
282 |
CONDENSED INTERIM FINANCIAL STATEMENTS |
NOTES |
|
| Note | 19 | Financial
assets at fair value through profit or loss |
|
|
|
03.31.22 |
|
12.31.21 |
|
|
|
|
|
|
|
|
|
|
|
|
Government bonds |
|
|
12,102 |
|
10,300 |
Mutual funds |
|
|
3,813 |
|
7,638 |
Total Financial assets at fair value through profit or loss |
|
|
15,915 |
|
17,938 |
| Note | 20 | Cash
and cash equivalents |
|
|
03.31.22 |
|
12.31.21 |
|
03.31.21 |
Cash and banks |
|
1,618 |
|
1,762 |
|
2,551 |
Time deposits |
|
- |
|
355 |
|
- |
Mutual funds |
|
3,838 |
|
1,566 |
|
8,148 |
Total cash and cash equivalents |
|
5,456 |
|
3,683 |
|
10,699 |
| Note | 21 | Share
capital and additional paid-in capital |
|
|
Share capital |
|
Additional paid-in capital |
|
Total |
Balance at December 31, 2020 |
|
66,727 |
|
882 |
|
67,609 |
|
|
|
|
|
|
|
Payment of Other reserve constitution - Share-bases compensation plan |
|
- |
|
7 |
|
7 |
Balance at December 31, 2021 and March 31, 2022 |
|
66,727 |
|
889 |
|
67,616 |
As of March 31, 2022, the Company’s
share capital amounts to 906,455,100 shares, divided into 462,292,111 common, book-entry Class A shares with a par value of one peso each
and the right to one vote per share; 442,210,385 common, book-entry Class B shares with a par value of one peso each and the right to
one vote per share; and 1,952,604 common, book-entry Class C shares with a par value of one peso each and the right to one vote per share.
| Note | 22 | Allocation
of profits |
The restrictions on the distribution of dividends
by the Company are those provided for by the Business Organizations Law and the negative covenants established by the Corporate Notes
program.
If the Company’s Debt Ratio were higher
than 3, the negative covenants included in the Corporate Notes program, which establish, among other issues, the Company’s impossibility
to make certain payments, such as dividends, would apply.
Additionally, in accordance with Title IV,
Chapter III, section 3.11.c of the CNV, the amounts subject to distribution will be restricted to the amount equivalent to the acquisition
cost of the Company’s own shares.
CONDENSED INTERIM FINANCIAL STATEMENTS |
NOTES |
|
|
|
|
03.31.22 |
|
12.31.21 |
Non-current |
|
|
|
|
|
Customer guarantees |
|
|
406 |
|
426 |
Customer contributions |
|
|
298 |
|
341 |
Total non-current |
|
|
704 |
|
767 |
|
|
|
|
|
|
Current |
|
|
|
|
|
Payables for purchase of electricity - CAMMESA |
|
|
69,176 |
|
66,892 |
Provision for unbilled electricity purchases - CAMMESA |
|
|
12,761 |
|
11,006 |
Suppliers |
|
|
6,628 |
|
9,917 |
Advance to customer |
|
|
533 |
|
543 |
Customer contributions |
|
|
33 |
|
38 |
Discounts to customers |
|
|
1 |
|
43 |
Total current |
|
|
89,132 |
|
88,439 |
The fair values of non-current customer contributions
as of March 31, 2022 and December 31, 2021 amount to $ 36 and $ 53.9, respectively. The fair values are determined based on estimated
discounted cash flows in accordance with a representative market rate for this type of transactions. The applicable fair value category
is Level 3.
The value of the rest of the financial liabilities
included in the Company’s trade payables approximates their fair value.
|
Note |
|
03.31.22 |
|
12.31.21 |
Non-current |
|
|
|
|
|
ENRE penalties and discounts |
|
|
10,255 |
|
10,883 |
Financial Lease Liability(1) |
|
|
93 |
|
92 |
Total Non-current |
|
|
10,348 |
|
10,975 |
|
|
|
|
|
|
Current |
|
|
|
|
|
ENRE penalties and discounts |
|
|
4,401 |
|
4,127 |
Related parties |
30.d |
|
129 |
|
160 |
Advances for works to be performed |
|
|
13 |
|
15 |
Financial Lease Liability (1) |
|
|
295 |
|
311 |
Other |
|
|
4 |
|
4 |
Total Current |
|
|
4,842 |
|
4,617 |
The value of the Company’s other financial
payables approximates their fair value.
| (1) | The development of the financial lease liability
is as follows: |
|
03.31.22 |
|
03.31.21 |
Balance at beginning of year |
403 |
|
625 |
Increase |
146 |
|
89 |
Payments |
(188) |
|
(292) |
Exchange difference |
40 |
|
85 |
Interest |
43 |
|
92 |
Result from exposure to inflation |
(56) |
|
(115) |
Balance at end of the period |
388 |
|
484 |
CONDENSED INTERIM FINANCIAL STATEMENTS |
NOTES |
|
|
|
03.31.22 |
|
12.31.21 |
|
|
|
|
|
Corporate notes (1) |
|
10,881 |
|
11,688 |
Interest from corporate notes |
|
453 |
|
226 |
Total Borrowings |
|
11,334 |
|
11,914 |
| (1) | Net of debt issuance, repurchase and redemption
expenses. |
The fair values of the Company’s borrowings
as of March 31, 2022 and December 31, 2021 amount approximately to $ 9,993.5 and $ 10,428.4 respectively. Such values were determined
on the basis of the estimated market price of the Company’s Corporate Notes at the end of each period. The applicable fair value
category is Level 1.
On April 12, 2022, the Company launched an
exchange offer of the existing Class No. 9 Corporate Notes issued by the Company maturing on October 25, 2022, for New Class N I Corporate
Notes due in 2025, to be issued for a nominal value of up to USD 120,000,000 (Note 33).
| Note | 26 | Salaries
and social security taxes payable |
|
|
03.31.22 |
|
12.31.21 |
Non-current |
|
|
|
|
Seniority-based bonus |
|
482 |
|
463 |
|
|
|
|
|
Current |
|
|
|
|
Salaries payable and provisions |
|
2,923 |
|
4,619 |
Social security payable |
|
981 |
|
597 |
Early retirements payable |
|
24 |
|
28 |
Total current |
|
3,928 |
|
5,244 |
The value of the Company’s salaries
and social security taxes payable approximates their fair value.
CONDENSED INTERIM FINANCIAL STATEMENTS |
NOTES |
|
| Note | 27 | Income
tax and deferred tax |
The breakdown of deferred tax assets and liabilities is as follows:
|
03.31.22 |
|
12.31.21 |
Deferred tax assets |
|
|
|
Trade receivables and other receivables |
2,361 |
|
2,592 |
Trade payables and other payables |
1,519 |
|
1,394 |
Salaries and social security payable |
620 |
|
618 |
Benefit plans |
18 |
|
21 |
Tax liabilities |
25 |
|
29 |
Provisions |
1,825 |
|
1,876 |
Deferred tax asset |
6,368 |
|
6,530 |
|
|
|
|
Deferred tax liabilities |
|
|
|
Property, plants and equipments |
(61,489) |
|
(59,190) |
Financial assets at fair value through profit or loss |
(514) |
|
(443) |
Borrowings |
(1) |
|
(2) |
Adjustment effect on tax inflation |
(3,379) |
|
(4,291) |
Deferred tax liability |
(65,383) |
|
(63,926) |
|
|
|
|
Net deferred tax liability |
(59,015) |
|
(57,396) |
The breakdown of the income tax expense for
the period includes two effects: (i) the current tax for the period payable in accordance with the tax legislation applicable to the Company;
and (ii) the effect of applying the deferred tax method on the temporary differences arising from the valuation of assets and liabilities
in accordance with tax and accounting criteria.
The breakdown of the income tax expense is
as follows:
|
|
03.31.22 |
|
03.31.21 |
Deferred tax |
|
(1,619) |
|
(1,528) |
Change in the income tax rate |
|
- |
|
1,113 |
Current tax |
|
(1,595) |
|
(890) |
Income tax expense |
|
(3,214) |
|
(1,305) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
03.31.22 |
|
03.31.21 |
Profit for the period before taxes |
|
396 |
|
287 |
Applicable tax rate |
|
35% |
|
30% |
Result for the period at the tax rate |
|
(139) |
|
(86) |
Loss on net monetary position |
|
1,021 |
|
(456) |
Adjustment effect on tax inflation |
|
(4,081) |
|
(1,861) |
Income tax expense |
|
(15) |
|
(15) |
Change in the income tax rate |
|
- |
|
1,113 |
Income tax expense |
|
(3,214) |
|
(1,305) |
CONDENSED INTERIM FINANCIAL STATEMENTS |
NOTES |
|
The breakdown of the income tax payable is as follows:
|
|
03.31.22 |
|
12.31.21 |
Non-current |
|
|
|
|
Tax payable 2022 |
|
1,595 |
|
- |
Total non-current |
|
1,595 |
|
- |
|
|
|
|
|
Current |
|
|
|
|
Tax payable 2021 |
|
2,042 |
|
2,371 |
Tax withholdings |
|
(956) |
|
(915) |
Total current |
|
1,086 |
|
1,456 |
|
|
03.31.22 |
|
12.31.21 |
Non-current |
|
|
|
|
|
|
|
|
|
Provincial, municipal and federal contributions and taxes |
|
150 |
|
152 |
Tax withholdings |
|
232 |
|
264 |
SUSS withholdings |
21 |
|
32 |
Municipal taxes |
|
219 |
|
270 |
Total Tax liabilities |
|
622 |
|
718 |
|
|
Non-current liabilities |
|
Current liabilities |
|
|
Contingencies |
At 12.31.21 |
|
4,622 |
|
623 |
|
|
|
|
|
Increases |
|
554 |
|
270 |
Decreases |
|
- |
|
(199) |
Result from exposure to inflation for the period |
|
(665) |
|
(89) |
At 03.31.22 |
|
4,511 |
|
605 |
|
|
|
|
|
At 12.31.20 |
|
4,259 |
|
627 |
Increases |
|
557 |
|
59 |
Decreases |
|
- |
|
(64) |
Result from exposure to inflation for the period |
|
(499) |
|
(74) |
At 03.31.21 |
|
4,317 |
|
548 |
| Note | 30 | Related-party
transactions |
The following transactions were carried out with related parties:
Company |
|
Concept |
|
03.31.22 |
|
03.31.21 |
|
|
|
|
|
|
|
PESA (*) |
|
Impact study |
|
- |
|
2 |
CONDENSED INTERIM FINANCIAL STATEMENTS |
NOTES |
|
Company |
|
Concept |
|
03.31.22 |
|
03.31.21 |
|
|
|
|
|
|
|
EDELCOS S.A. |
|
Technical advisory services on financial matters |
|
(563) |
|
- |
PESA (*) |
|
Technical advisory services on financial matters |
|
- |
|
(92) |
SACME |
|
Operation and oversight of the electric power transmission system |
|
(54) |
|
(31) |
OSV (*) |
|
Hiring life insurance for staff |
|
- |
|
(9) |
SB&WM Abogados (*) |
|
Legal fees |
|
- |
|
(8) |
Estudio Cuneo Libarona Abogados |
Legal fees |
|
(1) |
|
- |
|
|
|
|
(618) |
|
(140) |
| c. | Key Management personnel’s remuneration |
|
|
03.31.22 |
|
03.31.21 |
|
|
|
|
|
Salaries |
|
296 |
|
323 |
The balances with related parties are as follow:
| d. | Receivables and payables |
|
|
03.31.22 |
|
12.31.21 |
Other receivables - Non current |
|
|
|
|
SACME |
|
2 |
|
2 |
|
|
|
|
|
|
|
|
|
|
Other receivables - Current |
|
|
|
|
SACME |
|
1 |
|
1 |
|
|
03.31.22 |
|
12.31.21 |
|
|
|
|
|
Other payables |
|
|
|
|
Andina PLC |
|
(119) |
|
(138) |
SACME |
|
(10) |
|
(22) |
|
|
(129) |
|
(160) |
(*) Balances held and transactions carried out as
of March 31, 2022, with the companies that comprised the Company’s former controlling economic
group (Pampa Energía S.A.) are disclosed for comparative purposes.
| Note | 31 |
Ordinary and Extraordinary Shareholders’ Meeting |
The Company’s Annual General Meeting
held on April 6, 2022 resolved, among other issues, the following:
| - | To approve edenor’s Annual Report
and Financial Statements as of December 31, 2021; |
| - | To allocate the $ 21,344 loss for the year
ended December 31, 2021 (which at the purchasing power of the currency at March 31, 2022 amounts to $ 24,780) to the Unappropriated Retained
Earnings account, under the terms of section 70, 3rd paragraph, of Business Organizations Law No. 19,550. |
| - | To approve the actions taken by the Directors
and Supervisory Committee members, together with their respective remunerations; |
| - | To appoint the authorities and the external
auditors for the current fiscal year; |
| - | To consider the updating of the Global Issuance
Program of non-convertible into shares, simple Corporate Notes for up to USD 750,000,000 (Note 33). |
CONDENSED INTERIM FINANCIAL STATEMENTS |
NOTES |
|
| Note | 32 |
Termination of agreement on real estate asset |
With regard to the real estate asset to be
constructed, acquired by the Company in November 2015, the subsequent termination of the agreement due to RDSA’s default in August
2018 and the respective legal actions brought by the Company against the seller and the insurance company, and with respect to the settlement
agreement dated March 31, 2019 that the Company entered into with Aseguradora de Cauciones S.A., at the date of issuance of these condensed
interim financial statements there are no significant changes with respect to the situation reported by the Company in the Financial Statements
as of December 31, 2021, except for the following:
With regard to the USD 1 million receivable
resulting from the agreement with Aseguradora de Cauciones S.A., as of to date the Company received a payment of USD 870,000. The remaining
balance of USD 130,000 will be collected in July 2022, along with an additional interest amount of USD 9,777 as agreed upon between the
Company and the insurance company.
| Note | 33 |
Debt restructuring |
On April 6, 2022, the Annual General
Meeting approved the updating of the Global Simple Corporate Notes Issuance Program for a Maximum Amount outstanding at any time of up
to USD 750,000,000 (or its equivalent in any other currency).
In this regard, the Company’s
Board of Directors, at its meeting of April 6, 2022, approved the launching of a consent solicitation to restructure the financial debt
by exchanging the Company’s Class No. 9 Corporate Notes due October 25, 2022 for New Corporate Notes.
Consequently, on April 12, 2022, the
Company launched its offer to exchange the Class No. 9 Corporate Notes issued by the Company maturing on October 25, 2022 at a fixed nominal
annual interest rate of 9.75% for a nominal value outstanding of USD 98,057,000 for New Class N I Corporate Notes, denominated and payable
in United States dollars, at a fixed nominal annual interest rate of 9.75%, due in 2025, to be issued for a nominal value of up to USD
120,000,000, in the framework of the Global Simple Corporate Notes Issuance Program.
The New Corporate Notes comply with
the “Guidelines for the issuance of social, green and sustainable securities in Argentina” included in Appendix III to Chapter
I, Title VI of the CNV’s Regulations and in the BYMA’s Guide to Social, Green and Sustainable Bonds for the purpose of having
them listed on BYMA’s Social, Green and Sustainable Bonds Panel.
The principal on the corporate notes
will be repaid in a lump sum on May 12, 2025. Furthermore, they will accrue interest at a fixed nominal annual rate of 9.75%, payable
semi-annually in arrears on May 12 and November 12 of each year, commencing on November 12, 2022.
The New Corporate Notes are issued
in accordance with the New Corporate Notes Indenture, which contains a number of negative covenants that limit edenor’s ability
to, among other things:
- create or permit liens on its property
or assets;
- incur indebtedness;
- sell its assets;
- carry out transactions with affiliates
or shareholders;
CONDENSED INTERIM FINANCIAL STATEMENTS |
NOTES |
|
- make certain payments (including,
but not limited to, dividends, purchases of edenor’s common shares or payments on subordinated debt); and
- enter into merger transactions, unless
they meet certain criteria.
Many of the negative covenants set
forth in the New Corporate Notes Indenture will be suspended if (i) edenor attains an Investment Grade rating on its long term
debt, or; (ii) the leverage ratio is equal to or lower than 3.0. If edenor subsequently loses its investment grade rating or its
leverage ratio is greater than 3.0, as applicable, the suspended negative covenants will again be applicable. The suspended negative covenants
will not, however, be of any effect with regard to the actions of edenor taken during the suspension of the covenants.
Finally, on May 12, 2022 the Company
approved the issuance and placement under the exchange offer, as set forth in the Supplement to the Exchange Offer Memorandum dated April
12, 2022. The Corporate Notes will be subscribed in accordance with the Tender Orders received, based on the following options:
Option A
| · | Tender Orders of Existing Corporate Notes
submitted under Option A at or prior to the Early Tender Date (April 28, 2022, extended until May 9, 2022 on April 29, 2022) will receive
USD 1,050 principal amount of New Corporate Notes for each USD 1,000 principal amount of Existing Corporate Notes validly tendered and
accepted for exchange. |
Option B
Tender Orders of Existing Corporate
Notes submitted under Option B will receive a portion of the Cash Consideration, plus the applicable New Corporate Notes Consideration.
The Cash Consideration represents
an aggregate amount equivalent to the lesser of: (i) 30% of the principal amount of the Existing Corporate Notes that are validly tendered
and accepted for exchange in the Offer; and (ii) the principal amount of the Existing Corporate Notes accepted for exchange under Option
B.
The sum of the Pro-rata Cash Consideration
that will be payable to Eligible Holders whose Existing Corporate Notes are accepted for exchange under Option B will be equivalent to
the Cash Consideration divided by the principal amount of Existing Corporate Notes accepted under Option B multiplied by 1,000.
| · | The Early (at or prior to the Early Tender
Date) New Corporate Notes Consideration for each Eligible Holder whose Existing Corporate Notes have been accepted for exchange under
Option B will be equal to 1.04 times the difference between USD 1,000 and the Pro-rata Cash Consideration received by each Eligible Holder
whose Existing Corporate Notes have been accepted for exchange under Option B. |
Payment of Accrued Interest
In addition to the Exchange Consideration,
the Eligible Holders whose Existing Corporate Notes have been accepted for exchange in the Exchange Offer will also receive Payment of
Accrued Interest equal to all accrued and unpaid interest from the last interest payment date to, but not including, the Settlement Date,
to be paid in cash on the Settlement Date.
CONDENSED INTERIM FINANCIAL STATEMENTS |
NOTES |
|
The
offer to exchange Class No. 9 Corporate Notes issued by the Company due October 25, 2022 for New Class N I Corporate Notes resulted in
73.25% acceptance, equivalent to US$ 71,816,000; accordingly, a total of USD 52,706,268, relating to: i) Tender Offers submitted under
Option A for USD 43,783,950, and ii) Tender Offers submitted under Option B for USD 30,470,118, has been restructured. Furthermore, the
Pro-rata Cash Consideration received by each Eligible Holder has amounted to USD 21,547,800.
Additionally, interest
paid in cash from the last payment date up to and including the Settlement Date has amounted to a total of USD 329,573.
Based on the Tender Offers received,
the Company’s Corporate Note debt structure would be as follows:
Corporate Notes |
Class |
Debt structure as of March 31, 2022 (*) |
Debt structure after the exchange (*) |
Fixed rate par notes - Due 2022 |
9 |
98,057,000 |
26,231,000 |
Fixed rate par notes - Due 2025 |
N I |
- |
52,706,268 |
Total |
|
98,057,000 |
78,937,268 |
(*) In US dollars (US$).
| Note | 34 |
Change of control |
On December 28, 2020, Pampa Energía
S.A., the holder of 100% of edenor’s Class A shares, representing 51% of edenor‘s share capital, entered into
a share purchase and sale agreement, as the seller, with Empresa de Energía del Cono Sur S.A.
On June 23, 2021, by means of Resolution
No. 207/2021, the ENRE authorized Pampa Energía S.A. to transfer all the Class A shares, representing 51% of the Company’s
share capital and votes, to Empresa de Energía del Cono Sur S.A. in accordance with the share purchase and sale agreement entered
into on December 28, 2020.
The transfer of all the Class A shares, representing
51% of the Company’s share capital and votes owned by Pampa Energía S.A., in favor of Empresa de Energía del Cono
Sur S.A. was completed shortly afterwards on June 30, 2021.
As required by the regulations in effect
and within the time periods set forth therein, Empresa de Energía del Cono Sur S.A. announced the launching of a mandatory Public
Tender Offer addressed to all the holders of Class B and Class C common shares issued by the Company, including the holders of ADS in
respect of the underlying Class B common shares, in accordance with the provisions of General Resolution No. 779/2018 of the National
Securities Commission.
During the term of the Offer, no shares
were tendered by Class B (including ADS) and Class C Shareholders; therefore, the offeror announced the completion of the tender offer.
Consequently, at the date of issuance of
these condensed interim financial statements, edenor is a subsidiary company of Empresa de Energía del Cono Sur S.A.
CONDENSED INTERIM FINANCIAL STATEMENTS |
NOTES |
|
| Note | 35 |
Events after the reporting period |
The following are
the events that occurred subsequent to March 31, 2022:
| · | Public Hearing – SE Resolutions Nos.
235 and 236/2022, see Note 2.a; |
| · | Approval of values of the electricity rate
schedule – ENRE Resolution No. 146/2022, see Note 2.a; |
| · | Debt restructuring, see Note 33. |
![](https://content.edgar-online.com/edgar_conv_img/2022/05/13/0001292814-22-002292_ednfs1q226k_002.jpg)
Free translation from the original in Spanish for publication in Argentina
REPORT ON CONDENSED INTERIM FINANCIAL STATEMENTS’ REVIEW
To the Shareholders, President and Directors
Empresa Distribuidora y Comercializadora Norte Sociedad Anónima (Edenor
S.A.)
Legal address: Avenida del Libertador 6363
Autonomous City of Buenos Aires
Tax Code No. 30-65511620-2
Introduction
We have reviewed the condensed interim financial statements of Empresa Distribuidora
y Comercializadora Norte Sociedad Anónima (Edenor S.A.) (hereinafter “Edenor S.A.” or “the Company”) including
the condensed interim statement of financial position as of March 31, 2022, the related condensed interim statement of comprehensive income
for the three months period ended March 31, 2022, the related condensed interim statements of changes in equity and cash flows for the
three months period then ended and the complementary selected notes.
The balances and other information related to fiscal year 2021 and its interim
periods, are an integral part of the financial statements mentioned above; therefore, they must be considered in connection with these
financial statements.
Board of Directors’ responsibility
The Board of Directors of the Company is responsible for the preparation
and presentation of these financial statements, under International Financial Reporting Standards (IFRS) adopted by the Argentine Federation
of Professional Councils in Economic Sciences (FACPCE), as the applicable accounting framework and incorporated by the National Securities
Commission (CNV) to its standards, as they were approved by the International Accounting Standards Board (IASB), and, therefore, it is
responsible for the preparation and presentation of the condensed interim financial statements mentioned in the first paragraph in accordance
with IAS 34 “Interim financial information”.
Price Waterhouse & Co. S.R.L., Bouchard 557, piso 8°, C1106ABG - Ciudad
de Buenos Aires
T: +(54.11) 4850.0000, F: +(54.11) 4850.1800, www.pwc.com/ar
![](https://content.edgar-online.com/edgar_conv_img/2022/05/13/0001292814-22-002292_ednfs1q226k_002.jpg)
Auditors’ responsibility
Our review was limited to the application of the procedures established
in International Standard on Review Engagements 2410 “Review of interim financial information performed by the independent auditor
of the entity”, which was adopted as review standard in Argentina through Technical Pronouncement No. 33 of the FACPCE as was approved
by International Auditing and Assurance Standards Board (IAASB). A review of interim financial information consists in making inquiries
of Company staff responsible for the preparation of the information included in the condensed interim financial statements and the application
of analytical procedures and other review procedures. This review is substantially less in scope than an audit in accordance of International
Standards on Auditing, consequently, this review does not allow us to obtain assurance that we would become aware of all significant matters
that might be identified in an audit. Therefore, we do not express any opinion on the financial position, comprehensive income and cash
flows of the Company.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed interim financial statements mentioned in the first paragraph of this report are not prepared, in all material
respects, in accordance with IAS 34.
Emphasis of matter paragraph
Without qualifying our conclusion, we draw the attention to the situation
explained in Note 1 in relation to the economic and financial situation of Edenor S.A. The Company’s current economic and financial
situation raises substantial doubt about its ability to continue as a going concern.
![](https://content.edgar-online.com/edgar_conv_img/2022/05/13/0001292814-22-002292_ednfs1q226k_002.jpg)
Reports on compliance with regulations in force
In accordance with current regulations, we report that, in connection with
Empresa Distribuidora y Comercializadora Norte Sociedad Anónima (Edenor S.A.):
a) except for its lack of transcription to
the book “Inventories and Balances”, the condensed interim financial statements of Edenor S.A. comply, in what is within our
competence, with the provisions of the General Companies Law and in the relevant resolutions of the National Securities Commission;
b) the condensed interim financial statements
of Edenor S.A. arise from accounting records kept in their formal aspects in accordance with legal regulations, except for their lack
of transcription to the Inventory and Balance Book, and the Daily Book (transcription to the Inventories and Balance CD ROM Book from
January to March);
c) we have read the summary of activity on
which, as regards those matters that are within our competence, we have no observations to make;
d) at March 31, 2022 the liabilities of Empresa
Distribuidora y Comercializadora Norte Sociedad Anónima (Edenor S.A.) accrued in favor of the Argentine Integrated Social Security
System, according to the Company’s accounting records, amounted to ARS$ 802,996,418, none of which was claimable at that date.
Autonomous City of Buenos Aires, May 12th, 2022
PRICE WATERHOUSE & CO. S.R.L.
(Socio) |
C.P.C.E.C.A.B.A T°1 – F°17 |
Dr. Raúl Leonardo Viglione
Contador Público (UCA)
C.P.C.E.C.A.B.A. T° 196 F° 169 |