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.
On December 28, 2020, Pampa Energía
S.A., which was the parent company of edenor, entered into a share purchase and sale agreement, as the seller, with Empresa de
Energía del Cono Sur S.A. The transaction was authorized by the ENRE on June 23, 2021. 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 on June 30, 2021 (Note 33).
The Company’s economic
and financial situation
The Company continues to record
negative working capital, a situation which has been mainly exacerbated by the suspension of the electricity rate adjustment since February
2019 and the impossibility of collecting debts incurred by customers during the period of the Preventive and Mandatory Social Isolation
(“ASPO”), followed by the Preventive and Mandatory Social Distancing (“DISPO”).
In that regard, by means of Executive
Order No. 311/2020, it was provided that for a term of one hundred and eighty days, the companies that provide the electricity distribution
service would not be allowed to suspend the electricity supply in the event of delinquency in payment or non-payment of up to three consecutive
or alternate bills due as from March 1, 2020
Additionally, by means of Resolution
No. 173/2020, the Ministry of Productive Development set up a Coordination Unit, which is in charge of preparing the report that will
detail and identify the Users benefited from the DNU mentioned in the preceding paragraph. The aforementioned Resolution instructed electricity
distribution companies to provide the Users to be identified in such report with payment plans consisting of thirty equal and consecutive
monthly installments, with the first of them beginning with the first bill to be issued by distribution companies as from September 30,
2020.
Furthermore, edenor was
instructed to inform the Regulatory Agencies (or provincial authorities, as the case may be) and CAMMESA, on a monthly basis, of the electricity
amounts billed subject to the conditions and/or payment modalities actually offered to its users, so that CAMMESA, with prior instruction
from the Energy Secretariat, would replicate the same conditions in order for electricity distribution companies to purchase the same
volume in the MEM.
CONDENSED INTERIM
FINANCIAL STATEMENTS
NOTES
|
Additionally, ENRE Resolution
No. 107/2021 approved a 9% partial adjustment of electricity rates (Note 2), which is still insufficient to cover the Company’s
economic and financial needs in a context of growing inflation, with the rate surpassing 54%. 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 a slight recovery after the effect of the COVID-19 pandemic, the economic measures implemented by the
Argentine Government in the last few months, aimed at expanding the monetary base, along with the increase in the rate of inflation and
the widening of the gap between the official dollar exchange rate and the dollar exchange rate quoted in the informal market, make it
difficult to envisage a sustained recovery of the economy in the short term.
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 demanding payment of debts for electricity consumed but not paid through legal proceedings, and the impact of 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 September 30, 2021 accumulate a past due principal balance of $ 21,461, plus interest and charges for $ 11,890.
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, as previously mentioned, 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 safety.
Taking into consideration that
the realization of the measures necessary to reverse the manifested negative trend depends on the occurrence of certain events that are
not under the Company’s control, the Board of Directors has raised substantial doubt about 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.
CONDENSED INTERIM
FINANCIAL STATEMENTS
NOTES
|
|
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, 2020:
|
a)
|
Electricity rate situation
|
On March 5, 2021, by means of
Resolution No. 53/2021, the ENRE called a Public Hearing to make known and listen to opinions on the distribution companies’ Transitional
Tariff System mentioned in Note 2.b) to the Financial Statements as of December 31, 2020, with such Public Hearing being held in the framework
of the Tariff Structure Review (RTI) Process and prior to defining the electricity rates to be applied by the referred to concession holders.
On March 30, edenor made a presentation at the Public Hearing to discuss the transitional tariff adjustment of the Distribution,
including revenue requirements and a new tariff structure proposal to cover the public service expenses and investment needs.
Furthermore, on March 31, 2021,
by means of Resolution No. 78/2021, the ENRE approved 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 April 1, 2021, based on the MEM’s winter seasonal programming.
It must be pointed out that such rate increase affected only GUDI customers and reflected the increase of the seasonal price passed through
to rates without affecting revenues from the Company’s Own Distribution Costs.
Moreover, on April 30, 2021,
by means of Resolution No. 107/2021, and in the framework of the transitional tariff system, the ENRE authorized the application of a
new electricity rate schedule, effective as from May 1, 2021, with a 9% increase. In view of the fact that such increase does not cover
the increase requested by edenor, on June 15, 2021, an administrative appeal (recurso de alzada) was filed against such
Resolution.
On May 11, 2021, by means of
SE Resolution No. 408/2021, the Definitive Winter Seasonal Programming for the MEM submitted by CAMMESA, relating to the May 1-October
31, 2021 period, was approved.
On August 10, 2021, by means
of Resolutions Nos. 262 and 265/2021, the ENRE approved an increase for large users whose power consumption is equal to or greater than
300 kW, effective from the billing relating to the reading of meters subsequent to 12:00 AM on August 1, 2021. Both resolutions were appealed
to the Energy Secretariat by edenor because the values of the electricity rate schedule in effect provided for by the ENRE did
not take into consideration the ex-post adjustments, the recognition of taxes and fees, the pass-through differences arising from non-transferred
increases in the seasonal price, or the pending adjustments of the Company’s Own Distribution Cost (CPD). Moreover, neither the
transitional system to supplement the required revenue, as provided for by Executive Order No. 1020/2021, nor the differences resulting
from a lower than expected demand, requested by edenor, have been established. Both appeals are in process at the closing date
of these financial statements.
Furthermore, ENRE Resolution
No. 323/2021 dated September 27, 2021, set the definitive annual control fee for 2021 that is to be paid by the MEM’s generation,
transmission and distribution agents, and provided that final payment thereof would become due during the month of October 2021.
CONDENSED INTERIM
FINANCIAL STATEMENTS
NOTES
|
|
b)
|
Supplementary resolutions
|
1.
Suspension of issuance of Debit Notes and Supplementary
Statements: on February 18, 2021, by means of ENRE Resolution No. 37/2021, the Company was instructed both to suspend, on an immediate
and temporary basis, the issuance of Debit Notes and Supplementary Statements (bills) in the terms of section 5 sub-section d) captions
I, II and III of the Electric Power Supply Regulations (i.e. those issued when energy values have not been recorded or have been under-measured;
those issued when events suggesting metering irregularities or the appropriation of energy by the user prove to be true; or those issued
when direct connections are verified), and to refrain from suspending electricity supplies due to non-payment of the amounts arising from
the recovery sought on the basis of such regulation, regardless of whether the users have made the pertinent claim, until the ENRE issues
the regulations. Furthermore, the Company is instructed to submit a report on the number of bills for Non-recorded or under or over-recorded
consumption, issued from March 1, 2020.
2.
System for the issuance of statements: on March
9, 2021, by means of ENRE Resolution No. 58/2021, distribution companies were instructed to issue the electric power public service statements
(bills) solely with the amounts relating to the consumption of the billing period and to inform of the debts that have originated in or
increased during the periods of the Preventive and Mandatory Social Isolation (“ASPO”) and the Preventive and Mandatory Social
Distancing (“DISPO”) health measures. The Company has begun to implement the aforementioned resolution as from September 2021.
3.
Reopening of Commercial Offices: by means of Notes
NO-2021-84330919-APN-ENRE#MEC and NO-2021-84786820-APN-ENRE#MEC notified on September 9, 2021, the ENRE instructed the Company to reopen
the commercial offices after having been closed as per the ENRE’s instruction in the framework of the Preventive and Mandatory Social
Isolation (“ASPO”) and the Preventive and Mandatory Social Distancing (“DISPO”) provided for by the Federal Government.
4.
Electric Service Statement – Service Disconnection
and/or Cancellation of the registered user’s name: the ENRE issued the procedure for how the Company must demand payment of
a debt at the time of disconnecting the service or cancelling the registered user’s name. The procedure was notified to the Company
on September 13, 2021 by means of Note NO-2021-82569889-APN-ENRE#MEC. Against such procedure, the Company has filed an appeal to the ENRE,
which is currently in process.
As of September 30, 2021, and
by virtue of the Agreement described in Note 2.f) to the Financial Statements as of December 31, 2020, the Company received a first disbursement
for $ 1,500, which, as indicated in the aforementioned agreement, will be specifically used for complying with the Preventive and Corrective
Maintenance Work Plan for the Electricity Distribution Network. The Company may use the above-mentioned funds only after the ENRE has
certified compliance with both the degree of completion of the works included in the referred to plan and the related financial milestones.
At the date of issuance of these
condensed interim financial statements, the Company has used a total of $ 1,347.1 (which at the purchasing power of the currency at September
30, 2021 amounts to $ 1,455), relating to the reports on progress of the works performed.
On October 15, 2021, the ENRE
instructed the Company to return $76.4 million due to an excess of amounts approved, which was complied with by the Company under protest
and with reservation of rights on October 18, 2021
CONDENSED INTERIM
FINANCIAL STATEMENTS
NOTES
|
|
d)
|
Agreement on the Regularization
of Obligations
|
On
May 10, 2019, edenor, Edesur S.A. and the National Energy Secretariat entered into the Agreement on the Regularization of Obligations
for the Transfer of Concession Holders to the Local Jurisdictions, whereby, prior to the transfer of the respective concessions to the
jurisdictions of the PBA and the CABA, respectively, (i) the existing debts and credits are mutually offset; (ii) a term and modality
of payment of the fines payable to users and the Government are agreed-upon, in three and five years, respectively; (iii) settlement of
the fines payable to the Government is allowed to be made through investments in specific works to improve the service; and (iv) it is
agreed that any legal actions against the Federal Government for damages caused by the freeze on rates
since 2017 will be abandoned.
On January 19, 2021, the
Federal Government, the PBA and the CABA entered into a new Agreement according
to which the Federal Government retains the capacity as grantor of the concession in connection with the concession agreements
(Executive Order No. 292/2021 and SE Resolution No. 16/2021).
On September
21, 2021, the National Ministry of Economy issued ME Resolution No. 590/2021 declaring the Agreement contrary to the public interest,
thus paving the way for the filing of a legal action to declare it null and void. It also provided for the suspension of the administrative
procedures relating to the fulfilment of the obligations arising from such Agreement.
Notwithstanding the above, at
the date of issuance of these financial statements, the Company has not been served notice of the filing of any legal action in order
for the Agreement or the acts resulting therefrom to be declared null and void. The administrative act in question has not provided for
the suspension of the legal effects of said Agreement, which is, therefore, in full force and effect. Against this resolution the Company
has filed an appeal (recurso jerárquico) to the Office of the Head of the Cabinet of Ministers (higher administrative authority)
and a motion for clarification with the Ministry of Economy, which was granted and answered by ME Resolution No. 656/2021, notified on
October 20, 2021, whereby said Ministry confirms that such Agreement has not been suspended.
|
Note
|
3
|
Basis of
preparation
|
These condensed interim financial
statements for the nine-month period ended September 30, 2021:
|
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 nine-month period ended September 30, 2021
and its comparative period as of September 30, 2020 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 November 10, 2021;
|
|
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, 2020 prepared under IFRS.
|
CONDENSED INTERIM
FINANCIAL STATEMENTS
NOTES
|
Comparative information
The balances as of December 31
and September 30, 2020, 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 September 30, 2021, as a consequence of the restatement of the 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 (Note 4).
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 September
30, 2021, in accordance with IAS 29 “Financial reporting in hyperinflationary economies”, using the indexes published by the
FACPCE. The inflation rate applied for the period between January 1, 2021 and September 30, 2021, was 37%.
|
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, 2020.
Accounting
standards, amendments and interpretations issued by the IASB in the last few years that are effective as of September 30, 2021
and have been adopted by the Company:
- Amendments to IFRS 9 “Financial
instruments”, IAS 39 “Financial instruments: Presentation”, IFRS 7 “Financial Instruments: Disclosures”,
IFRS 4 “Insurance contracts” and IFRS 16 “Leases” (amended in August 2020).
- Amendments to IFRS 16 “Leases”,
in connection with rent concessions in the framework of the COVID-19 pandemic (amended in April 2021).
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.
|
Note
|
5
|
Financial
risk management
|
|
Nota
|
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.
CONDENSED INTERIM
FINANCIAL STATEMENTS
NOTES
|
As of September
30, 2021 and December 31, 2020, the Company’s balances in foreign currency are as follow:
|
|
Currency
|
|
Amount in foreign currency
|
|
Exchange rate (1)
|
|
Total
09.30.21
|
|
Total
12.31.20
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
|
|
|
|
Other receivables
|
|
USD
|
|
1
|
|
98.740
|
|
99
|
|
692
|
|
|
JPY
|
|
-
|
|
0.887
|
|
-
|
|
62
|
Financial assets at fair value through profit or loss
|
|
USD
|
|
36
|
|
98.740
|
|
3,555
|
|
-
|
Cash and cash equivalents
|
|
USD
|
|
13
|
|
98.740
|
|
1,284
|
|
1,960
|
TOTAL CURRENT ASSETS
|
|
|
|
|
|
|
|
4,938
|
|
2,714
|
TOTAL ASSETS
|
|
|
|
|
|
|
|
4,938
|
|
2,714
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
NON-CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
Borrowings
|
|
USD
|
|
98
|
|
98.740
|
|
9,676
|
|
11,315
|
TOTAL NON-CURRENT LIABILITIES
|
|
|
|
|
|
|
|
9,676
|
|
11,315
|
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
Trade payables
|
|
USD
|
|
9
|
|
98.740
|
|
889
|
|
1,315
|
Borrowings
|
|
USD
|
|
4
|
|
98.740
|
|
404
|
|
196
|
Other payables
|
|
USD
|
|
9
|
|
98.740
|
|
889
|
|
1,037
|
TOTAL CURRENT LIABILITIES
|
|
|
|
|
|
|
|
2,182
|
|
2,548
|
TOTAL LIABILITIES
|
|
|
|
|
|
|
|
11,858
|
|
13,863
|
|
(1)
|
The exchange rates used are the
BNA exchange rates in effect as of September 30, 2021 for US Dollars (USD) and Japanese Yens (JPY).
|
The Company classifies the measurements
of financial instruments at fair value using a fair value hierarchy that reflects the relevance of the variables used to carry out such
measurements. The fair value hierarchy has the following levels:
· 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).
CONDENSED INTERIM
FINANCIAL STATEMENTS
NOTES
|
The table below shows the Company’s
financial assets and liabilities measured at fair value as of September 30, 2021 and December 31, 2020:
|
|
LEVEL 1
|
|
LEVEL 2
|
|
|
TOTAL
|
|
|
|
|
|
|
|
|
At September 30, 2021
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
Financial assets at fair value through profit or loss:
|
|
|
|
|
|
|
|
Government bonds
|
|
4,720
|
|
-
|
|
|
4,720
|
Money market funds
|
|
4,162
|
|
-
|
|
|
4,162
|
Cash and cash equivalents:
|
|
|
|
|
|
|
|
Money market funds
|
|
6,333
|
|
-
|
|
|
6,333
|
Total assets
|
|
15,215
|
|
-
|
|
|
15,215
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
Derivative financial instruments
|
|
-
|
|
1
|
|
|
1
|
Total liabilities
|
|
-
|
|
1
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2020
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
Financial assets at fair value through profit or loss:
|
|
|
|
|
|
|
|
Government bonds
|
|
3,043
|
|
-
|
|
|
3,043
|
Cash and cash equivalents
|
|
|
|
|
|
|
|
Money market funds
|
|
3,731
|
|
-
|
|
|
3,731
|
Total assets
|
|
6,774
|
|
-
|
|
|
6,774
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
Derivative financial instruments
|
|
-
|
|
1
|
|
|
1
|
Total liabilities
|
|
-
|
|
1
|
|
|
1
|
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 September 30, 2021 and December 31, 2020 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.
|
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.
CONDENSED INTERIM
FINANCIAL STATEMENTS
NOTES
|
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, 2020.
|
Note
|
7
|
Contingencies
and lawsuits
|
As of September 30, 2021, 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, 2020, except for the following.
- Federal Administration of
Public Revenues (“AFIP”) – Difference in contribution rate to the Single Social Security System (“SUSS”)
(executive order 814/2001) for fiscal periods 12/2011 to 11/2019
On July 6, 2021, the Company
filed an appeal to the Federal Social Security Court of Appeals against AFIP Resolution No. 1740/2021 that dismissed the presentation
made by edenor in relation to the assessment of a debt in connection with contributions to Argentina’s Integrated Social
Security System, relating to the January 2017-June 2019 period, for differences detected due to the use of the rate set forth in Section
2 Sub-section B) 2001 (17%), when the applicable rate, according to the AFIP, is that mentioned in Section 2 Sub-section A) (21%), of
Executive Order No. 814.
Additionally, on April 8, 2021,
the Company was notified by the AFIP of a new resolution pursuant to which a debt had been assessed for the same concept, relating to
the July 2019-November 2019 period. The resolution was challenged by the Company on September 23, 2021.
This new notification, in addition
to the one received on July 12, 2018 relating to the December 2011-December 2016 period, is still at administrative stage.
The Company’s Management
believes that the application of the 17% rate is correct. In this regard, in accordance with the analysis performed, it is reasonable
that “minority government-owned corporations (sociedades anónimas con simple participación estatal) governed
by Law No. 19,550” be understood to mean all those corporations (sociedades anónimas) in which the government has
a minority stake, whatever the reason why such stake has been acquired. Therefore, included therein are the shareholdings that the National
Social Security Administration (“ANSES”) has in certain corporations, among which the Company is included.
The Company filed appeals to
the Federal Social Security Court of Appeals, on July 6, 2021 and September 13, 2021, against the first two resolutions, relating to the
01/2017-06/2019 and 11/2011-12/2016 periods, respectively, as the administrative remedies available in relation thereto have been exhausted.
Under such conditions and in
connection with the aforementioned AFIP’s assessment, in the Company’s opinion and that of its legal advisors, there exist
sufficient and solid arguments to make its position prevail at the judicial stage. Consequently, no liabilities whatsoever have been recorded
by the Company for this matter as of September 30, 2021.
CONDENSED INTERIM
FINANCIAL STATEMENTS
NOTES
|
- National Regulatory Authority
for the Distribution of Electricity, Proceeding for the Determination of a Claim” (case file No. 16/2020)
On May 4, 2021, the Company was
served notice of a complaint filed by the ENRE in connection with edenor‘s compliance with captions 9.2.1 and 9.2.2 of the
“Agreement on the Renegotiation of the Concession Agreement” for differences arising from the date of payment of certain penalties
included therein.
At the date of issuance of these
condensed interim financial statements, the Company has answered the complaint, with the case being currently in process.
The Company believes that it
has sufficient authority under the Agreement on the Renegotiation of the Concession Agreement to support the payment made under such conditions
and considers it to be in compliance with the law, to have an extinguishing effect and to have implied no damage to the users. In this
regard, the Company and its legal advisors believe that there exist sufficient and solid arguments to make its position prevail at the
judicial stage; therefore, no liabilities whatsoever for this concept have been recorded as of September 30, 2021.
|
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%.
|
|
|
09.30.21
|
|
09.30.20
|
|
|
GWh
|
|
$
|
|
GWh
|
|
$
|
Sales of electricity
|
|
|
|
|
|
|
|
|
Small demand segment: Residential use and public lighting (T1)
|
|
9,493
|
|
49,124
|
|
9,041
|
|
63,972
|
Medium demand segment: Commercial and industrial (T2)
|
|
1,077
|
|
8,512
|
|
1,014
|
|
11,277
|
Large demand segment (T3)
|
|
2,594
|
|
19,164
|
|
2,389
|
|
21,139
|
Other: (Shantytowns/Wheeling system)
|
|
3,305
|
|
3,506
|
|
2,983
|
|
3,152
|
Subtotal - Sales of electricity
|
|
16,469
|
|
80,306
|
|
15,427
|
|
99,540
|
|
|
|
|
|
|
|
|
|
Other services
|
|
|
|
|
|
|
|
|
Right of use of poles
|
|
|
|
446
|
|
|
|
453
|
Connection and reconnection charges
|
|
|
50
|
|
|
|
57
|
Subtotal - Other services
|
|
|
|
496
|
|
|
|
510
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total - Revenue
|
|
|
|
80,802
|
|
|
|
100,050
|
|
|
09.30.21
|
|
09.30.20
|
|
|
GWh
|
|
$
|
|
GWh
|
|
$
|
|
|
|
|
|
|
|
|
|
Energy purchases (1)
|
|
20,088
|
|
(49,365)
|
|
19,292
|
|
(63,331)
|
|
(1)
|
As of September 30, 2021 and 2020,
includes technical and non-technical energy losses for 3,619 GWh and 3,865 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 09.30.21
|
Description
|
|
Transmission and distribution expenses
|
|
Selling expenses
|
|
Administrative expenses
|
|
Total
|
Salaries and social security taxes
|
|
7,582
|
|
1,213
|
|
1,849
|
|
10,644
|
Pension plans
|
|
501
|
|
80
|
|
122
|
|
703
|
Communications expenses
|
|
186
|
|
402
|
|
-
|
|
588
|
Allowance for the impairment of trade and other receivables
|
|
-
|
|
1,270
|
|
-
|
|
1,270
|
Supplies consumption
|
|
1,483
|
|
-
|
|
157
|
|
1,640
|
Leases and insurance
|
|
-
|
|
-
|
|
349
|
|
349
|
Security service
|
|
336
|
|
23
|
|
77
|
|
436
|
Fees and remuneration for services
|
|
3,635
|
|
2,107
|
|
1,565
|
|
7,307
|
Public relations and marketing
|
|
-
|
|
9
|
|
-
|
|
9
|
Advertising and sponsorship
|
|
-
|
|
5
|
|
-
|
|
5
|
Reimbursements to personnel
|
|
-
|
|
-
|
|
1
|
|
1
|
Depreciation of property, plants and
equipments
|
4,859
|
|
724
|
|
594
|
|
6,177
|
Depreciation of right-of-use asset
|
47
|
|
94
|
|
328
|
|
469
|
Directors and Supervisory Committee
members’ fees
|
-
|
|
-
|
|
25
|
|
25
|
ENRE penalties
|
|
592
|
|
724
|
|
-
|
|
1,316
|
Taxes and charges
|
|
-
|
|
1,173
|
|
59
|
|
1,232
|
Other
|
|
-
|
|
-
|
|
19
|
|
19
|
At 09.30.21
|
|
19,221
|
|
7,824
|
|
5,145
|
|
32,190
|
|
(1)
|
Includes recovery of technical
service quality-related penalties for $ 309.9.
|
The expenses included in the
chart above are net of the Company’s own expenses capitalized in property, plant and equipment as of September 30, 2021 for $ 1,542.3.
Expenses by nature at 09.30.20
|
Description
|
|
Transmission and distribution expenses
|
|
Selling expenses
|
|
Administrative expenses
|
|
Total
|
Salaries and social security taxes
|
|
7,768
|
|
1,272
|
|
1,704
|
|
10,744
|
Pension plans
|
|
468
|
|
77
|
|
103
|
|
648
|
Communications expenses
|
|
167
|
|
464
|
|
1
|
|
632
|
Allowance for the impairment of trade and other receivables
|
|
-
|
|
4,583
|
|
-
|
|
4,583
|
Supplies consumption
|
|
2,130
|
|
-
|
|
159
|
|
2,289
|
Leases and insurance
|
|
1
|
|
-
|
|
306
|
|
307
|
Security service
|
|
303
|
|
37
|
|
31
|
|
371
|
Fees and remuneration for services
|
|
3,842
|
|
2,073
|
|
1,402
|
|
7,317
|
Public relations and marketing
|
|
-
|
|
-
|
|
23
|
|
23
|
Advertising and sponsorship
|
|
-
|
|
-
|
|
12
|
|
12
|
Reimbursements to personnel
|
|
-
|
|
-
|
|
1
|
|
1
|
Depreciation of property, plants and equipments
|
5,314
|
|
790
|
|
650
|
|
6,754
|
Depreciation of right-of-use asset
|
|
29
|
|
59
|
|
205
|
|
293
|
Directors and Supervisory Committee
members’ fees
|
-
|
|
-
|
|
32
|
|
32
|
ENRE penalties (2)
|
|
478
|
|
357
|
|
-
|
|
835
|
Taxes and charges
|
|
-
|
|
1,488
|
|
68
|
|
1,556
|
Other
|
|
-
|
|
-
|
|
11
|
|
11
|
At 09.30.20
|
|
20,500
|
|
11,200
|
|
4,708
|
|
36,408
|
|
(2)
|
Includes recovery of technical
service quality-related penalties for $ 601.3.
|
The expenses included in the
chart above are net of the Company’s own expenses capitalized in property, plant and equipment as of September 30, 2020 for $ 1,669.2.
CONDENSED INTERIM
FINANCIAL STATEMENTS
NOTES
|
|
Note
|
10 | Other
operating income (expense), net
|
|
Note
|
|
09.30.21
|
|
09.30.20
|
Other operating income
|
|
|
|
|
|
Income from customer surcharges
|
|
|
1,353
|
|
1,485
|
Commissions on municipal taxes collection
|
|
|
250
|
|
226
|
Fines to suppliers
|
|
|
87
|
|
94
|
Services provided to third parties
|
|
|
152
|
|
133
|
Related parties
|
30.a
|
|
-
|
|
64
|
Recovery of provision for contingences
|
|
|
-
|
|
284
|
Income from non-reimbursable customer
contributions
|
|
|
32
|
|
21
|
Expense recovery
|
|
|
28
|
|
-
|
Construction plan Framework agreement
|
2.c
|
|
1,455
|
|
-
|
Other
|
|
|
39
|
|
60
|
Total other operating income
|
|
|
3,396
|
|
2,367
|
|
|
|
|
|
|
Other operating expense
|
|
|
|
|
|
Gratifications for services
|
|
|
(495)
|
|
(55)
|
Cost for services provided to third parties
|
|
|
(69)
|
|
(108)
|
Severance paid
|
|
|
(25)
|
|
(23)
|
Debit and Credit Tax
|
|
|
(734)
|
|
(831)
|
Provision for contingencies
|
|
|
(1,613)
|
|
(678)
|
Disposals of property, plant and equipment
|
|
(183)
|
|
(144)
|
Other
|
|
|
(36)
|
|
(55)
|
Total other operating expense
|
|
|
(3,155)
|
|
(1,894)
|
|
Note
|
11
| Net
financial costs
|
|
|
09.30.21
|
|
09.30.20
|
Financial income
|
|
|
|
|
Financial interest
|
|
26
|
|
25
|
Total financial income
|
|
26
|
|
25
|
|
|
|
|
|
Financial costs
|
|
|
|
|
Commercial interest
|
|
(13,566)
|
|
(4,849)
|
Interest and other
|
|
(3,301)
|
|
(3,215)
|
Fiscal interest
|
|
(3)
|
|
(145)
|
Bank fees and expenses
|
|
(33)
|
|
(6)
|
Total financial costs
|
|
(16,903)
|
|
(8,215)
|
|
|
|
|
|
Other financial results
|
|
|
|
|
Changes in fair value of financial assets
|
|
2,485
|
|
403
|
Net gain from the cancelattion of
Corporate Notes
|
|
3
|
|
568
|
Exchange differences
|
|
(1,211)
|
|
(3,232)
|
Adjustment to present value of receivables
|
|
(95)
|
|
(183)
|
Recovery of provision for credit RDSA (Note 32)
|
|
527
|
|
-
|
Other financial costs
|
|
(139)
|
|
(182)
|
Total other financial costs
|
|
1,570
|
|
(2,626)
|
Total net financial costs
|
|
(15,307)
|
|
(10,816)
|
CONDENSED INTERIM
FINANCIAL STATEMENTS
NOTES
|
|
Note
|
12 | Basic
and diluted (loss) profit per share
|
Basic
The basic (loss) earnings per
share is calculated by dividing the (loss) profit attributable to the holders of the Company’s equity instruments by the weighted
average number of common shares outstanding as of September 30, 2021 and 2020, excluding common shares purchased by the Company and held
as treasury shares.
The basic (loss) earnings per
share coincides with the diluted (loss) earnings per share, inasmuch as there exist neither preferred shares nor Corporate Notes convertible
into common shares.
|
|
Nine months at
|
|
Three months at
|
|
|
09.30.21
|
|
09.30.20
|
|
09.30.21
|
|
09.30.20
|
(Loss) Profit for the period attributable to the owners of the Company
|
|
(13,341)
|
|
(2,791)
|
|
(618)
|
|
153
|
Weighted average number of common shares outstanding
|
|
875
|
|
875
|
|
875
|
|
875
|
Basic and diluted (loss) profit per share – in pesos
|
|
(15.25)
|
|
(3.19)
|
|
(0.71)
|
|
0.17
|
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 12.31.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
4,992
|
|
43,099
|
|
109,808
|
|
47,985
|
|
8,589
|
|
38,408
|
|
442
|
|
253,323
|
Accumulated depreciation
|
(980)
|
|
(14,423)
|
|
(42,454)
|
|
(18,761)
|
|
(5,623)
|
|
-
|
|
-
|
|
(82,241)
|
Net amount
|
|
4,012
|
|
28,676
|
|
67,354
|
|
29,224
|
|
2,966
|
|
38,408
|
|
442
|
|
171,082
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions
|
|
37
|
|
267
|
|
78
|
|
305
|
|
870
|
|
7,358
|
|
1,432
|
|
10,347
|
Disposals
|
|
(6)
|
|
-
|
|
(25)
|
|
(150)
|
|
(2)
|
|
-
|
|
-
|
|
(183)
|
Transfers
|
|
132
|
|
1,778
|
|
3,934
|
|
1,246
|
|
324
|
|
(6,094)
|
|
(1,320)
|
|
-
|
Depreciation for the period
|
(90)
|
|
(1,170)
|
|
(2,866)
|
|
(1,456)
|
|
(595)
|
|
-
|
|
-
|
|
(6,177)
|
Net amount 09.30.21
|
|
4,085
|
|
29,551
|
|
68,475
|
|
29,169
|
|
3,563
|
|
39,672
|
|
554
|
|
175,069
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 09.30.21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
5,155
|
|
45,144
|
|
113,696
|
|
49,301
|
|
9,771
|
|
39,672
|
|
554
|
|
263,293
|
Accumulated depreciation
|
(1,070)
|
|
(15,593)
|
|
(45,221)
|
|
(20,132)
|
|
(6,208)
|
|
-
|
|
-
|
|
(88,224)
|
Net amount
|
|
4,085
|
|
29,551
|
|
68,475
|
|
29,169
|
|
3,563
|
|
39,672
|
|
554
|
|
175,069
|
·
During the period ended September 30, 2021, the Company
capitalized as direct own costs $ 1,542.3.
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 12.31.19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
4,459
|
|
41,084
|
|
116,963
|
|
49,833
|
|
7,457
|
|
42,142
|
|
453
|
|
262,391
|
Accumulated depreciation
|
(853)
|
|
(12,794)
|
|
(38,467)
|
|
(16,699)
|
|
(4,721)
|
|
-
|
|
-
|
|
(73,534)
|
Net amount
|
|
3,606
|
|
28,290
|
|
78,496
|
|
33,134
|
|
2,736
|
|
42,142
|
|
453
|
|
188,857
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions
|
|
23
|
|
1,865
|
|
89
|
|
276
|
|
530
|
|
7,808
|
|
131
|
|
10,722
|
Disposals
|
|
-
|
|
(2)
|
|
(31)
|
|
(111)
|
|
-
|
|
-
|
|
-
|
|
(144)
|
Transfers
|
|
229
|
|
5,456
|
|
4,975
|
|
3,299
|
|
264
|
|
(14,007)
|
|
(216)
|
|
-
|
Depreciation for the period
|
(97)
|
|
(1,212)
|
|
(3,127)
|
|
(1,589)
|
|
(729)
|
|
-
|
|
-
|
|
(6,754)
|
Net amount 09.30.20
|
|
3,761
|
|
34,397
|
|
80,402
|
|
35,009
|
|
2,801
|
|
35,943
|
|
368
|
|
192,681
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 09.30.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
4,711
|
|
48,400
|
|
121,884
|
|
53,257
|
|
8,253
|
|
35,943
|
|
368
|
|
272,816
|
Accumulated depreciation
|
(950)
|
|
(14,003)
|
|
(41,482)
|
|
(18,248)
|
|
(5,452)
|
|
-
|
|
-
|
|
(80,135)
|
Net amount
|
|
3,761
|
|
34,397
|
|
80,402
|
|
35,009
|
|
2,801
|
|
35,943
|
|
368
|
|
192,681
|
·
During the period ended September 30, 2020, the Company
capitalized as direct own costs $ 1,669.2.
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:
|
09.30.21
|
|
12.31.20
|
Right of uses asset by leases
|
393
|
|
384
|
The development of right-of-use assets is as follows:
|
09.30.21
|
|
09.30.20
|
Balance at beginning of year
|
384
|
|
486
|
Additions
|
478
|
|
278
|
Depreciation for the period
|
(469)
|
|
(293)
|
Balance at end of the period
|
393
|
|
471
|
|
|
09.30.21
|
|
12.31.20
|
|
|
|
|
|
Supplies and spare-parts
|
|
2,790
|
|
2,516
|
Advance to suppliers
|
|
-
|
|
47
|
Total inventories
|
|
2,790
|
|
2,563
|
|
Note
|
16
| Other
receivables
|
|
Note
|
|
09.30.21
|
|
12.31.20
|
Non-current:
|
|
|
|
|
|
Credit for Real estate asset
|
32
|
|
3
|
|
2,947
|
Financial credit
|
|
|
7
|
|
19
|
Related parties
|
30.d
|
|
3
|
|
4
|
Allowance for the impairment of other receivables
|
|
|
-
|
|
(2,912)
|
Total non-current
|
|
|
13
|
|
58
|
|
|
|
|
|
|
Current:
|
|
|
|
|
|
Credit for Real estate asset
|
32
|
|
42
|
|
50
|
Judicial deposits
|
|
|
74
|
|
105
|
Security deposits
|
|
|
49
|
|
52
|
Prepaid expenses
|
|
|
147
|
|
58
|
Advances to personnel
|
|
|
1
|
|
3
|
Financial credit
|
|
|
14
|
|
25
|
Advances to suppliers
|
|
|
47
|
|
100
|
Tax credits
|
|
|
23
|
|
446
|
Related parties
|
30.d
|
|
1
|
|
25
|
Debtors for complementary activities
|
|
|
68
|
|
94
|
Other
|
2
|
|
1
|
Allowance for the impairment of other receivables
|
|
|
(69)
|
|
(105)
|
Total current
|
|
|
399
|
|
854
|
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.
CONDENSED INTERIM
FINANCIAL STATEMENTS
NOTES
|
The roll forward of the allowance for the impairment
of other receivables is as follows:
|
|
|
09.30.21
|
|
09.30.20
|
Balance at beginning of year
|
|
|
3,017
|
|
4,085
|
Increase
|
|
|
3
|
|
141
|
Decrease
|
|
|
(1,726)
|
|
-
|
Result from exposure to inlfation
|
|
|
(687)
|
|
(755)
|
Recovery
|
|
|
(538)
|
|
(122)
|
Balance at end of the period
|
|
|
69
|
|
3,349
|
|
Note
|
17
| Trade
receivables
|
|
|
|
09.30.21
|
|
09.30.20
|
Current:
|
|
|
|
|
|
Sales of electricity – Billed
|
|
|
15,604
|
|
16,852
|
Framework Agreement (1)
|
|
|
-
|
|
12
|
Receivables in litigation
|
|
|
277
|
|
410
|
Allowance for the impairment of trade receivables
|
|
|
(5,491)
|
|
(6,307)
|
Subtotal
|
|
|
10,390
|
|
10,967
|
|
|
|
|
|
|
Sales of electricity – Unbilled
|
|
|
8,578
|
|
7,960
|
PBA & CABA government credit
|
|
|
1,113
|
|
451
|
Fee payable for the expansion of the transportation and others
|
|
|
2
|
|
3
|
Total current
|
|
|
20,083
|
|
19,381
|
|
(1)
|
Additionally,
as disclosed in Note 2.f) to the Financial Statements as of December 31, 2020, the Province of Buenos Aires and the Federal Government
have a debt with the Company for the consumption of electricity by low-income neighborhoods and shantytowns. The indicated amount does
not include interest and no revenue for this concept has been recognized by the Company.
|
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:
|
|
|
09.30.21
|
|
09.30.20
|
Balance at beginning of the year
|
|
|
6,307
|
|
2,883
|
Increase
|
|
|
1,278
|
|
4,564
|
Decrease
|
|
|
(164)
|
|
(740)
|
Result from exposure to inlfation
|
|
|
(1,930)
|
|
(799)
|
Balance at end of the period
|
|
|
5,491
|
|
5,908
|
|
Note
|
18
| Financial
assets at amortized cost
|
|
|
|
09.30.21
|
|
12.31.20
|
Non-current
|
|
|
|
|
|
Government bonds
|
|
|
-
|
|
328
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
Government bonds
|
|
|
322
|
|
107
|
CONDENSED INTERIM
FINANCIAL STATEMENTS
NOTES
|
|
Note
|
19 | Financial
assets at fair value through profit or loss
|
|
|
|
09.30.21
|
|
12.31.20
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
Government bonds
|
|
|
4,720
|
|
3,043
|
Money market funds
|
|
|
4,162
|
|
-
|
Total current
|
|
|
8,882
|
|
3,043
|
|
Note
|
20
| Cash
and cash equivalents
|
|
|
09.30.21
|
|
12.31.20
|
|
09.30.20
|
Cash and banks
|
|
1,429
|
|
2,244
|
|
1,843
|
Time deposits
|
|
1,007
|
|
-
|
|
-
|
Money market funds
|
|
6,333
|
|
3,731
|
|
11,821
|
Total cash and cash equivalents
|
|
8,769
|
|
5,975
|
|
13,664
|
|
(1)
|
As of September 30, 2021, $ 152.9
is restricted for its use as stipulated in the Agreement on the Development of the Preventive and Corrective Maintenance Work Plan for
the Electricity Distribution Network of the Metropolitan Area. Note 2.c).
|
|
Note
|
21
| Share
capital and additional paid-in capital
|
|
|
Share capital
|
|
Additional paid-in capital
|
|
Total
|
Balance at December 31, 2019 and 2020
|
|
52,170
|
|
690
|
|
52,860
|
|
|
|
|
|
|
|
Payment of Other reserve constitution - Share-bases compensation plan
|
|
-
|
|
5
|
|
5
|
Balance at September 30, 2021
|
|
52,170
|
|
695
|
|
52,865
|
As of September 30, 2021, 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.
On April 15, 2021, the Company
awarded, as part of the Share-based Compensation Plan, 246,451 treasury shares to executive directors, managers and other personnel holding
key executive positions in the Company.
|
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
|
|
|
|
09.30.21
|
|
12.31.20
|
Non-current
|
|
|
|
|
|
Customer guarantees
|
|
|
338
|
|
376
|
Customer contributions
|
|
|
289
|
|
338
|
Total non-current
|
|
|
627
|
|
714
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
Payables for purchase of electricity - CAMMESA
|
|
|
40,210
|
|
29,753
|
Provision for unbilled electricity purchases - CAMMESA
|
|
|
13,452
|
|
8,634
|
Suppliers
|
|
|
6,530
|
|
6,245
|
Advance to customer
|
|
|
469
|
|
496
|
Customer contributions
|
|
|
32
|
|
43
|
Discounts to customers
|
|
|
37
|
|
51
|
Total current
|
|
|
60,730
|
|
45,222
|
The fair values of non-current
customer contributions as of September 30, 2021 and December 31, 2020 amount to $ 46.0 and $ 58.6, 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
|
|
09.30.21
|
|
12.31.20
|
Non-current
|
|
|
|
|
|
ENRE penalties and discounts
|
|
|
8,606
|
|
8,524
|
Financial Lease Liability (1)
|
|
|
90
|
|
84
|
Total Non-current
|
|
|
8,696
|
|
8,608
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
ENRE penalties and discounts
|
|
|
3,152
|
|
3,663
|
Construction plan Framework agreement
|
2.c
|
|
153
|
|
-
|
Related parties
|
30.d
|
|
13
|
|
20
|
Advances for works to be performed
|
|
|
13
|
|
18
|
Financial Lease Liability(1)
|
|
|
315
|
|
405
|
Other
|
|
|
7
|
|
1
|
Total Current
|
|
|
3,653
|
|
4,107
|
The value of the Company’s
other financial payables approximates their fair value.
|
(1)
|
The development of the financial
lease liability is as follows:
|
|
09.30.21
|
|
09.30.20
|
Balance at beginning of year
|
489
|
|
413
|
Increase
|
478
|
|
278
|
Payments
|
(751)
|
|
(386)
|
Exchange difference and gain on net monetary position
|
189
|
|
286
|
Balance at end of the period
|
405
|
|
591
|
CONDENSED INTERIM
FINANCIAL STATEMENTS
NOTES
|
|
|
09.30.21
|
|
12.31.20
|
Non-current
|
|
|
|
|
Corporate notes (1)
|
|
9,676
|
|
11,315
|
|
|
|
|
|
Current
|
|
|
|
|
Interest from corporate notes
|
|
404
|
|
196
|
|
(1)
|
Net of debt issuance, repurchase
and redemption expenses.
|
The fair values of the Company’s
non-current borrowings as of September 30, 2021 and December 31, 2020 amount approximately to $ 8,795 and $ 9,284 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 July 16, 2021, within the
framework of the change of control of the Company (Note 33), and as provided for in article 10.3 of the class 9 Corporate Notes prospectus,
which provides that each holder of these instruments will be entitled to require that the Company repurchase all or any part thereof by
submitting an Offer due to Change of Control, the Company’s Board of Directors approved and informed the markets of the launching
of the consent solicitation for consents of the holders of Corporate Notes due 2022.
In this regard, on July 30, 2021,
the Company, given the majority support of the holders, obtained approval of the consent solicitation issued on July 16. Thus, edenor
maintains the financial terms set forth in the respective Corporate Notes.
Moreover, in the month of April,
2021, the Company paid class 9 Corporate Notes for a total of USD 110,000 nominal value, equivalent to $ 10.9, received as collection
of receivables.
|
Note
|
26
| Salaries
and social security taxes payable
|
|
|
09.30.21
|
|
12.31.20
|
Non-current
|
|
|
|
|
Early retirements payable
|
|
-
|
|
33
|
Seniority-based bonus
|
|
454
|
|
383
|
Total non-current
|
|
454
|
|
416
|
|
|
|
|
|
Current
|
|
|
|
|
Salaries payable and provisions
|
|
3,833
|
|
4,702
|
Social security payable
|
|
332
|
|
377
|
Early retirements payable
|
|
27
|
|
36
|
Total current
|
|
4,192
|
|
5,115
|
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 detail of deferred tax assets and liabilities
is as follows:
|
09.30.21
|
|
12.31.20
|
Deferred tax assets
|
|
|
|
Tax loss carry forward
|
-
|
|
339
|
Trade receivables and other receivables
|
2,040
|
|
1,850
|
Trade payables and other payables
|
1,061
|
|
928
|
Salaries and social security payable
|
541
|
|
350
|
Benefit plans
|
88
|
|
104
|
Tax liabilities
|
25
|
|
26
|
Provisions
|
1,443
|
|
1,120
|
Deferred tax asset
|
5,198
|
|
4,717
|
|
|
|
|
Deferred tax liabilities
|
|
|
|
Property, plants and equipments
|
(45,545)
|
|
(32,026)
|
Financial assets at fair value through profit or loss
|
(531)
|
|
(408)
|
Borrowings
|
(2)
|
|
(3)
|
Adjustment effect on tax inflation
|
(3,934)
|
|
(4,752)
|
Deferred tax liability
|
(50,012)
|
|
(37,189)
|
|
|
|
|
Net deferred tax liability
|
(44,814)
|
|
(32,472)
|
The detail 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; (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.
On June 16, 2021, by means
of Law No. 27,630, a change, among other measures, was introduced in the corporate income tax rate, applicable to fiscal years beginning
from January 1, 2021. The tax will be determined according to the following scale:
Accumulated net taxable income
|
Amount to be paid $
|
Plus
%
|
On the amount exceeding $
|
From more than $
|
To $
|
$ 0
|
$ 5
|
$ 0
|
25%
|
$ 0
|
$ 5
|
$ 50
|
$ 1,25
|
30%
|
$ 5
|
$ 50
|
onwards
|
$ 14,75
|
35%
|
$ 50
|
The amounts of the detailed scale will be
adjusted annually, beginning January 1, 2022, taking into consideration the annual variation of the Consumer Price Index (CPI) provided
by the National Institute of Statistics and Census (INDEC).
Based on the volume of its transactions
and the taxable result for the period, the Company applied the 35% rate to calculate the current Income tax expense and determine the
deferred tax assets and liabilities.
CONDENSED INTERIM
FINANCIAL STATEMENTS
NOTES
|
The detail of the income tax expense is as follows:
|
|
09.30.21
|
|
09.30.20
|
Deferred tax
|
|
(5,093)
|
|
(2,431)
|
Change in the income tax rate
|
|
(7,473)
|
|
1,675
|
Current tax
|
|
(2,147)
|
|
(1,021)
|
Difference between provision and tax return
|
|
224
|
|
(91)
|
Income tax expense
|
|
(14,489)
|
|
(1,868)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
09.30.21
|
|
09.30.20
|
Profit for the period before taxes
|
|
1,148
|
|
(923)
|
Applicable tax rate
|
|
35%
|
|
30%
|
Result for the period at the tax rate
|
|
(402)
|
|
277
|
Loss on net monetary position
|
|
(2,439)
|
|
(1,285)
|
Adjustment effect on tax inflation
|
|
(4,366)
|
|
(2,381)
|
Income tax expense
|
|
(33)
|
|
(69)
|
Difference between provision and tax return
|
|
224
|
|
(85)
|
Change in the income tax rate
|
|
(7,473)
|
|
1,675
|
Income tax expense
|
|
(14,489)
|
|
(1,868)
|
The detail of the income tax payable is as follows:
|
|
09.30.21
|
|
12.31.20
|
Current
|
|
|
|
|
Provision of income tax payable
|
|
2,147
|
|
-
|
Tax withholdings
|
|
(629)
|
|
-
|
Total current
|
|
1,518
|
|
-
|
|
Note
|
28
| Tax
liabilities
|
|
|
09.30.21
|
|
12.31.20
|
Non-current
|
|
|
|
|
Current
|
|
|
|
|
Provincial, municipal and federal contributions and taxes
|
|
131
|
|
628
|
VAT payable
|
|
1,574
|
|
1,261
|
Tax withholdings
|
|
150
|
|
234
|
SUSS withholdings
|
15
|
|
14
|
Municipal taxes
|
|
222
|
|
318
|
Total current
|
|
2,092
|
|
2,455
|
CONDENSED INTERIM
FINANCIAL STATEMENTS
NOTES
|
|
|
Non-current liabilities
|
|
Current liabilities
|
|
|
Contingencies
|
At 12.31.20
|
|
3,329
|
|
490
|
|
|
|
|
|
Increases
|
|
1,201
|
|
412
|
Decreases
|
|
-
|
|
(227)
|
Result from exposure to inflation for the period
|
|
(1,030)
|
|
(153)
|
At 09.30.21
|
|
3,500
|
|
522
|
|
|
|
|
|
At 12.31.19
|
|
3,845
|
|
399
|
Increases
|
|
515
|
|
69
|
Decreases
|
|
-
|
|
(85)
|
Recovery
|
|
(190)
|
|
-
|
Result from exposure to inflation for the period
|
|
(724)
|
|
(76)
|
At 09.30.20
|
|
3,446
|
|
307
|
|
Note
|
30
| Related-party
transactions
|
The following transactions were carried out with related parties:
Company
|
|
Concept
|
|
09.30.21
|
|
09.30.20
|
|
|
|
|
|
|
|
PESA
|
|
Impact study
|
|
-
|
|
4
|
SACDE
|
|
Reimbursement expenses
|
|
-
|
|
60
|
|
|
|
|
-
|
|
64
|
Company
|
|
Concept
|
|
09.30.21
|
|
09.30.20
|
|
|
|
|
|
|
|
PESA
|
|
Technical advisory services on financial matters
|
|
-
|
|
(202)
|
SACME
|
|
Operation and oversight of the electric power transmission system
|
|
(61)
|
|
(113)
|
OSV
|
|
Hiring life insurance for staff
|
|
(3)
|
|
(24)
|
SB&WM Abogados
|
|
Legal fees
|
|
-
|
|
-
|
FIDUS
|
|
Legal fees
|
|
-
|
|
(5)
|
ABELOVICH, POLANO & ASOC.
|
|
Legal fees
|
|
-
|
|
(1)
|
|
|
|
|
(64)
|
|
(345)
|
|
c.
|
Key Management personnel’s remuneration
|
|
|
09.30.21
|
|
09.30.20
|
|
|
|
|
|
Salaries
|
|
921
|
|
317
|
CONDENSED INTERIM
FINANCIAL STATEMENTS
NOTES
|
The balances with related parties are as follow:
|
d.
|
Receivables and payables
|
|
|
09.30.21
|
|
12.31.20
|
Other receivables - Non current
|
|
|
|
|
SACME
|
|
3
|
|
4
|
|
|
|
|
|
|
|
|
|
|
Other receivables - Current
|
|
|
|
|
FIDUS SGR
|
|
-
|
|
24
|
SACME
|
|
1
|
|
1
|
|
|
1
|
|
25
|
Other payables
|
|
|
|
|
SACME
|
|
(13)
|
|
(20)
|
(*) Balances held and transactions carried
out as of December 31 and September 30, 2020, respectively, 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 Ordinary and Extraordinary
Shareholders’ Meeting held on April 27, 2021 resolved, among other issues, the following:
|
-
|
To approve edenor’s
Annual Report and Financial Statements as of December 31, 2020;
|
|
-
|
To allocate the $ 17,698 loss
for the year ended December 31, 2020 (which at the purchasing power of the currency at September 30, 2021 amounts to $ 24,238) to the
partial absorption of the Discretionary reserve, 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.
|
|
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 September 30, 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, 2020, except for the following:
In the months of April, July
and October, 2021, the Company received additional payments for USD 330,000 relating to the USD 1 million receivable resulting from the
agreement with Aseguradora de Cauciones S.A., with the remaining balance thus amounting to USD 300,000, which will be collected in two
quarterly installments according to the new payment schedule agreed upon between the Company and the insurance company.
Furthermore, as of September
30, 2021, a gain has been recognized on recovery of allowance for $ 527, which is disclosed in Other finance income (costs), resulting
from edenor’s acceptance of the “Offer for the Assignment of the Claim in litigation” made by Creaurban S.A.
CONDENSED INTERIM
FINANCIAL STATEMENTS
NOTES
|
|
Note
|
33
|
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.
By virtue of such agreement,
Pampa Energía S.A. agreed, subject to certain conditions precedent such as the approval of both its shareholders’ meeting
and the ENRE, to sell control of edenor by transferring all the Class A Shares and votes in edenor.
In this regard, on February 17,
2021, the Shareholders’ meeting of Pampa Energía approved the referred to transaction.
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 September 30, 2021.
Within this context, after the
aforementioned transfer, the Class A Directors tendered resignation; therefore, to fill the vacancies, the Company’s Supervisory
Committee appointed Messrs. Neil A. Bleasdale (Chairman), Esteban Macek (Vice-Chairman); Nicolás Mallo Huergo, Eduardo Vila, Edgardo
Volosin, Federico Zin and Mariano C. Lucero as Directors and Messrs. Hugo Quevedo, Mariano C. Libarona, Daniel O. Seppacuercia, Diego
Hernán Pino, Sebastián Álvarez and María Teresa Grieco as Alternate Directors.
Finally, as required by the regulations
in effect and within the time periods set forth therein, Empresa de Energía del Cono Sur S.A. will announce the launching of a
mandatory Public Tender Offer 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.
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 September 30, 2021, the related condensed interim
statement of comprehensive income for the nine and three months period ended September 30, 2021, the related condensed interim statements
of changes in equity and cash flows for the nine months period then ended and the complementary selected notes.
The balances and other information related to fiscal year 2020
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”.
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 opinion, 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.
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 July to September);
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 September 30, 2021 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$ 288,498,866, none of which was claimable at that
date.
Autonomous City of Buenos Aires, November 10th, 2021
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
|
|