Grupo Clarín S.A. Annual Report 2016

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FY2016 Annual Report · Grupo Clarín S.A.

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ANNUAL
REPORT 2016

To the Shareholders of Grupo Clarín S.A.

We hereby submit for your consideration the Annual Report and Exhibit, the Parent Company Only

Balance Sheet, the Parent Company Only Comprehensive Statement of Income, the Parent Company

Only Statement of Changes in Shareholders' Equity and the Parent Company Only Statement of Cash

Flows and Notes of Grupo Clarín S.A. (hereinafter, “the Company” or “Grupo Clarín”) for ﬁscal year No. 18

ended December 31, 2016 and the Consolidated Financial Statements as of December 31, 2016.

The main subsidiaries in which Grupo Clarín S.A. has a direct or indirect controlling interest are: Arte

Gráﬁco Editorial Argentino S.A. (AGEA), Artes Gráﬁcas Rioplatense S.A. (AGR), Compañía Inversora

en Medios de Comunicación S.A. (CIMECO), Cablevisión S.A. (Cablevisión), Primera Red Interactiva

de Medios Argentinos S.A. (PRIMA), Compañía de Medios Digitales S.A. (CMD), Arte Radiotelevisivo

Argentino S.A. (ARTEAR), GC Gestión Compartida S.A., Inversora de Eventos S.A. (IESA) and Radio Mitre

S.A., among others.

Disclaimer

Some of the information in this Annual Report (the “Annual Report”) may contain projections or other

forward-looking statements regarding future events or the future ﬁnancial performance of Grupo

Clarín. You can identify forward-looking statements by terms such as “expect”, “believe”, “anticipate”,

“estimate”, “intend”, “will”, “could”, “may” or “might”, the negative of such terms or other similar

expressions. These statements are only predictions and actual events or results may differ materially.

Grupo Clarín does not intend to or undertake any obligation to update these statements to reﬂect events
and circumstances occurring after the date hereof or to reﬂect the occurrence of unanticipated events.

Many factors could cause the actual results to differ materially from those contained in Grupo Clarín’s

projections or forward-looking statements, including, among others, general economic conditions, Grupo

Clarín’s competitive environment, risks associated with operating in Argentina, a rapid technological and

market change, and other factors speciﬁcally related to Grupo Clarín and its operations.

The Annual Report and certain boxes and charts that include highlighted information for illustrative

purposes throughout this publication, include ﬁnancial information as of and for the ﬁscal years ended

December 31, 2016 and 2015, which was extracted from the Consolidated and the Parent Only Financial

Statements as of December 31, 2016, presented on a comparative basis, and their related notes. The

Annual Report and the Highlights should be read in conjunction with such ﬁnancial statements and

related notes, the report of Grupo Clarín’s independent accountants, Price Waterhouse & Co. S.R.L.,

Buenos Aires, Argentina (a member ﬁrm of PriceWaterhouseCoopers) relating to such ﬁnancial

statements, and the report of Grupo Clarín’s Supervisory Committee.

Financial and Operational Highlights

2016 Macroeconomic Environment

Perspectives for the Upcoming Year

The Year 2016 and the Media Sector in Argentina and the World

Regulatory framework during 2016

The Company. Origin, Evolution and Proﬁle

Grupo Clarín and its Business Segments in 2016

Supplementary Financial Information

CORPORATE GOVERNANCE, ORGANIZATION
AND INTERNAL CONTROL SYSTEM
Stock Information and Shareholder Structure

CABLE TELEVISION, INTERNET
ACCESS & TELEPHONY
Cable Television and Internet Services

Commercialization and Customer Service

Competition

Telephony

BROADCASTING
AND PROGRAMMING
ARTEAR

Radio Mitre

PRINTING
AND PUBLISHING
Arte Gráﬁco Editorial Argentino

Diario Clarín

Products

Other Newspapers

Internet

DIGITAL CONTENT
AND OTHERS
Digital Content

Other Services

Ferias y Exposiciones Argentinas

CORPORATE RESPONSIBILITY
AND SUSTAINABILITY
Our Commitment

The Voice of the People

Social and Sustainability Coverage

Civic Involvement and Contribution to Development

Community Engagement and Social Advertising

Fostering Education and Culture

Media Literacy and Protection of Young Audiences

Excellence in Journalism Training

Our People

Environment

ANNUAL
REPORT 2016

RISK FACTORS

BUSINESS PROJECTIONS AND PLANNING

FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2016

1
2
3
4
5

41,178.1

NET SALES 2016

FINANCIAL HIGHLIGHTS

(in million of ps.)

2016

2015

YOY

Net Sales

41,178.1

27,791.5

48.2%

Adjusted EBITDA(1)

11,896.6

8,360.8

42.3%

Adjusted EBITDA

28.9%

30.1%

(4.0%)

Margin(2)

Income for the period

4,179.6

2,915.9

43.3%

(1) We deﬁne Adjusted EBITDA as net sales minus cost of sales (excluding depreciation

and amortization) and selling and administrative expenses (excluding depreciation

and amortization). We believe that Adjusted EBITDA is a meaningful measure of our

performance. It is commonly used to analyze and compare media companies on the basis

of operating performance, leverage and liquidity. Nonetheless, Adjusted EBITDA is not a

measure of net income or cash ﬂow from operations and should not be considered as an

alternative to net income, an indication of our ﬁnancial performance, an alternative to cash

ﬂow from operating activities or a measure of liquidity. Other companies may compute

Adjusted EBITDA in a different manner; therefore, Adjusted EBITDA as reported by other

companies may not be comparable to Adjusted EBITDA as we report it.

(2) We deﬁne Adjusted EBITDA Margin as Adjusted EBITDA over Net Sales.

2016

3,912.2

11,896.6

UNIQUE SUBSCRIBERS 2016(1)

TOTAL EBITDA 2016

OPERATING RESULTS

ADJUSTED EBITDA

(in million of ps.)

2016

2015

YOY

(in million of ps.)

2016

2015

YOY

Unique Subscribers(1)

3,912.2

3,873.7

1.0%

Cable TV, Internet

10,930.9

7,294.7

49.8%

Cable TV

- Consolidated

Subscribers(2)(4)

3,527.7

3,532.6

(0.1%)

access and Telephony

Printing and

Publishing

(104.7)

112.6

(193.1%)

- Total Internet

2,182.6

2,025.9

7.7%

Broadcasting

1,201.6

952.3

26.2%

Subscribers(2)

Circulation(2)

Audience Share %(3)

- Prime Time

- Total Time

237.1

261.7

(9.4%)

Digital Content

(131.1)

1.3

and Programming

34.8%

37.3%

(6.8%)

32.0%

30.4%

5.0%

and Others

Subtotal

Eliminations

Total

11,896.6

8,360.8

42.3%

11,896.6

8,360.8

42.3%

(1) Cable TV and Internet access.

(2) Figures in thousands.

(3) Share of broadcast TV audience according to IBOPE for AMBA. Prime Time is deﬁned

as Monday through Friday from 8 pm to 12 am. Total Time is deﬁned as Monday through

Sunday from 12 pm to 12 am.

(4) Total subscribers consolidated following the same consolidation methods used in the

ﬁnancial statements as of each year end.

2016 MACROECONOMIC
ENVIRONMENT

The Argentine economy closed the year 2016 with
advances in its normalization process but it also
exhibited the costs associated with the measures
implemented by the current Administration.

This was coupled with an external scenario that
was less favorable than that of previous years. As
a result, the goals set by the economic policy were
only partially met in the ﬁrst year of the current
Administration.

A brief overview of the events that took place on
the economic front shows that the period was
conditioned by the decision to normalize at an
early stage certain strategic fronts. Consequently,
the current Administration’s decision to rapidly
lift foreign currency restrictions and eliminate
the export taxes on agricultural goods and mining
in December 2015, laid the ground for certain
recovery of the country’s external competitiveness.
In turn, the settlement of the claims with almost
all of the holdouts that had not participated in
any of the previous debt restructurings offered
by Argentina, gave the country access to the
international capital markets. The country still
has to face the challenge of gradually unwinding
its ﬁscal imbalance. The current Administration
also made progress in the reduction of the energy
in 2015
and transportation subsidies
represented more than 3 percentage points of the
GDP) through the partial reversion of the delay in
the adjustment to the price of these utilities.

(which

The impact on prices as a result of the uniﬁcation
of the exchange rate and the adjustment to the
price of utilities was signiﬁcant and brought
about a reduction in the level of consumption,
activity and employment. Inﬂation accelerated
until reaching over 45% year-on-year by mid-year
and ended the year with a 35%-40% rise in the
different provinces despite the anti-inﬂationary
trend of the Central Bank’s monetary policy, the
partial adjustment to the prices of public utilities
and the lower slide of the Ps./USD exchange rate.
It should be noted that even though the annual
measurement showed a signiﬁcant acceleration
against the average 28% recorded in 2015, the
rates of the last months of 2016 reﬂect a clear
progress made in the disinﬂationary process.

On the other hand, the contraction of economic
activity already recorded in the last quarter of
2015 worsened and caused the GDP to shrink
during the year by slightly more than 2%. The
overall decline in GDP aggregates such as private
consumption and gross domestic
investment
show how challenging the efforts to unwind the
economy are.

In this complex environment, the country's primary
ﬁscal deﬁcit closed the year around 4.6% of GDP
(excluding the revenues collected from the Central
Bank / ANSES and the interest payments on the
country's sovereign debt). Said ﬁgure includes the
extraordinary ﬁscal revenues generated by the tax
amnesty regime (which provides for the disclosure
of previously unreported assets) accounting
for 1.3% of the Product, which offset the lower
revenue collection as a result of the drop in certain
taxes for approximately the same amount, and
also as a result of the recession and the higher
expenses from subsidies and other social items.

The above-mentioned suggests that in view of
its magnitude, the unwinding of many of the
imbalances brewed in the preceding years will
take more time than expected. The following
should be taken into consideration: In the ﬁrst
place, choosing external indebtedness as the
main source of ﬁnancing to bridge the ﬁscal gap
involves risks amid a less favorable international
scenario, and also entails side effects such as
the circumstantial appreciation of currency.
On the external front, it should be noted that
this
indebtedness delays the adaptation of
the economy to its lower real foreign currency
generation capacity.

Secondly, even though the possibility of leveraging
the economy allows the country to limit and spread
over time the adjustment of relative prices, the
gradual convergence towards a balanced position
in public accounts is key to make sustainable
progress along a path of disinﬂation, which may
provide some predictability. As history shows, the
presence of high and sustained levels of ﬁscal
deﬁcits, whatever its source of ﬁnancing, always
represents a potential source of imbalances for
the rest of the economic fundamental variables
and threatens any improvements achieved.

PERSPECTIVES FOR
THE UPCOMING YEAR

Argentina still has to face signiﬁcant challenges to
turn the economy around, beyond the foundations
that the current Administration began to lay in
2016. The forthcoming mid-term elections suggest
that public policies will be focused on recovering,
as soon as possible, the dynamics of economic
activity and the generation of employment,
preserving the disinﬂation process underway.

In this sense, according to the latest review
conducted by the Central Bank, the baseline
scenario for 2017 shows a recovery of the GDP
(+3.0%) and a signiﬁcant inﬂationary deceleration
(from the above-mentioned 35 -40% range to
21%), which even if it exceeds the 12-17% range
projected by the Central Bank, in year-on-year
terms it would be almost halved compared to the
ﬁgure observed in 2016.

The factors that could mark a reversal of the cycle
include:
a. The increase in the sown area, which would
be reﬂected in a record-high harvest above 120
million tons, i.e. 10 million tons more than in 2016;
b. The recovery of the salaries purchasing power
derived from a series of changes made to the
income tax regime for full time employees and the
very same inﬂationary deceleration;
c. The incorporation of almost 1 million pensioners
to a regime for the adjustment of underpaid
pensions under a historic reparation law;
d. The impetus from the Brazilian economy, which
is expected to experience a slight recovery after
its stagnation in 2014 and its signiﬁcant downturn
in 2015 and 2016.

This domestic scenario, which is expected to
be more favorable than that observed in 2016,
contrasts with an international scenario that
is starting to show additional restrictions on
emerging countries similar to Argentina. As a
result, the government has suggested that it
would seek to make progress in the reduction of
both the extremely high ﬁscal imbalance and the
tax pressure and in the improvement of the quality
of public spending.

Meeting the new projected target for the country's
primary ﬁscal deﬁcit (4.2% of GDP, lower than
4.6% in 2016, though higher than the expected
3.3%) amid an election year will represent a key
indicator to assess the consistency in the medium
term of the economic program underway.

c. The emergence of a new and broad variety
of “hybrid” companies built upon the disruptive
forces derived from digital transformation. In
this sense, while traditional content generation
companies are seeking to add technological
capabilities and knowledge, there is a large
that are,
technology companies
number of
conversely, gradually beginning to generate their
own contents.

The above-mentioned shows that the recurring
emergence of new technologies continues to
transform society and to provide opportunities
both to digitally native companies and to
traditional companies, which gradually continue
to adapt to new media consumption patterns.
These opportunities entail huge challenges:
those media companies that are able to provide
services and contents with the best combination
of user experience, quality, access ﬂexibility and
customized contents and an intuitive interaction
with social networks will have the greatest
growth potential in the future.

On the domestic front, the year 2016 was marked
by a restructuring of the industry, conditioned by
the above-mentioned macroeconomic complex
scenario. However, the degree of penetration of
broadband Internet (ﬁxed and mobile), higher than
the regional average, allowed the businesses

related to the digital ecosystem, mainly advertising
and connectivity, to experience genuine growth.

Other key aspects of the domestic scenario were
the changes made to the regulatory framework
derived from the amendments of the
laws
that govern audiovisual communication and
telecommunications services. These
included
the creation of the National Communications
Agency (ENACOM, for its Spanish acronym) which
replaced the Audiovisual Communication Services
Law Federal Enforcement Authority (AFSCA, for
its Spanish acronym) and the Information and
Communications Technology Federal Enforcement
Authority (AFTIC, for its Spanish acronym). Some
of the main goals of the ENACOM are to drive the
technological convergence process, to promote
competition and to guarantee the access to
quality Internet, ﬁxed and mobile telephony, radio
and television services.

Amid this scenario, the performance of the industry
in the year under review was marked basically by
three movements, two of them were structural
(the signiﬁcant growth of broadband consumption,
mainly mobile and video streaming, and the growing
share of digital revenues in the advertising pie)
and one was circumstantial (the shrinkage of the
advertising investments which, in percentage terms,
grew during the year below the inﬂation rate).

THE YEAR 2016 AND THE MEDIA
SECTOR IN ARGENTINA AND THE WORLD

The total revenues of the global communication,
media and entertainment sector will grow over the
next ﬁve years at an annual growth rate of 4.4%,
according to the Global Entertainment and Media
Outlook issued by Price Waterhouse & Co., which
analyses the current and projected situation of the
main segments of this sector in 54 countries.

The high dynamics expected for the consumption
of digital media will continue to play a signiﬁcant
role in the evolution of this sector worldwide.
Consequently, the businesses related to the digital
ecosystem, such as advertising and connectivity,
will continue to expand at a rate signiﬁcantly
above average. In this sense, consolidated digital
advertising, which currently accounts for almost
30% of the total global advertising pie and which
was already higher than that of the TV segment
during the year under review, is expected to be the
segment with the fastest growth rate worldwide
over the next ﬁve years, at a rate slightly above
11%.

Said Global Entertainment and Media Outlook
identiﬁes a series of changes that are reshaping
this sector worldwide, among which the following
stand out:

a. The strong correlation in demographic terms
between the relative size of the under-35
population and the growth of spending in this
sector. The ﬁgures reveal that those countries
with the largest under-35 population grow up to
three times more rapidly than the oldest countries.
Young consumers are the main drivers of this
sector’s global growth.

b. The growing adoption of the integrated offering
packages developed by traditional and by OTT
(over the top) service operators. These offerings,
which enrich customer experience by allowing
consumers to have access to linear on-demand
streaming from multiple devices at any time, have
had an exponential impact on the demand for
broadband, turning Internet infrastructure into a
critical resource;

REGULATORY
FRAMEWORK 2016

During 2016, the regulatory framework that
governs the Company's activities underwent
several changes.

Decree No. 267/15, issued on December 29, 2015
and published in the Ofﬁcial Gazette on January
4, 2016, created the National Communications
Agency (ENACOM, for its Spanish acronym) and
vested the new agency with authority to enforce
Laws Nos. 26,522 and 27,078, as amended and
regulated.

In the recitals, Decree No. 267/15 seeks to
promote the conversion of networks and services,
in order to generate further competition, promote
the development of infrastructure and improve the
quality of communication services.

ratiﬁed by

The decree, subsequently
the
Argentine Congress, provides that physical link
television service providers (cableoperators) will
be governed by the telecommunications law,
and, therefore, they become holders of a sole
telecommunications license. It also changed other
aspects of the above-mentioned laws, such as
the incompatibility to render in the same location
broadcast television services and subscription
television services; the limit of 10 licenses for
radio-electric link television services and 24
licenses for physical link subscription television
services; and lifted the restriction to provide these
services to more than 35% of all inhabitants or
subscribers nationwide.

With a focus on convergence, Decree No.
267/15 establishes guidelines for providers of
basic telephony services to render physical link
television services. Prior to this Decree, they were
originally banned from rendering those services
under the former Entel bidding terms. The term
for rendering those services was set at two years,
with an option to extend it for an additional year.

Subsequently, the Executive Branch issued Decree
No. 1,340/16 on December 30, 2016 and published
it on the Ofﬁcial Gazette on January 2, 2017. This
Decree orders that a Public Bid shall be called
for the allocation of new frequency bands for
rendering mobile services; establishes the terms
for the reallocation of radio electric frequency
bands that had been previously allocated to other
services (ordering that there shall be an economic
compensation and shared use of frequencies), and
allocate them to providers of ITC Services that
request to reuse them to render services with LTE

or higher technologies. In addition, the Decree
imposes deployment obligations on service
providers. Pursuant to this Decree, ﬁxed and
mobile telephony service providers may use LTE
frequencies for uses other than those for which
they were already allowed.

In addition, it orders that telephony companies
may begin to effectively provide cable television
services as from January 1st, 2018 in highly
populated cities. And it recognizes that satellite
television companies that as of December 29,
2015 rendered ITC services may maintain the
ownership of both services.

Within the administrative proceedings ﬁled by the
Company and its subsidiaries before agencies of
the National Government, it should be noted that,
pursuant to the powers vested on the ENACOM
and under the new legal framework, this agency
formalized the shareholder structure of ARTEAR,
Radio Mitre and other subsidiaries of Grupo
Clarín, rendering without effect the procedures
carried out to conform to the provisions of Law
No. 26,522 and revoking the resolution that had
annulled the merger between Cablevisión and
Multicanal. In this sense, the Decree also ratiﬁed
the ownership of Fibertel’s license by Cablevisión.

Upon the acquisition by Nextel of the ITC Service
licensees: Fibercomm S.A, Trixco S.A., Callbi S.A.,
Infotel S.A, Skyonline de Argentina S.A., Netizen
S.A. and Eritown Corporation Argentina S.A, the
ENACOM approved said transfer of control and
authorized the new allocation of 900 Mhz and 2.5
Ghz bands owned by them to provide 4G services
with economic compensation, return of the
spectrum and coverage obligations beyond those
proposed by the company. All of those conditions
are included in an agreement to be executed
between the Company and that agency.

In February 2014, the Supreme Court of Argentina
rendered a decision on the Claim for the protection
of constitutional rights (acción de amparo) brought
by Arte Radiotelevisivo Argentino S.A. requesting
fairer allocation of ofﬁcial advertising,
the
whereby it ordered that ofﬁcial advertising should
be allocated on a pro rata and fair basis. In 2016,
the Secretariat of Public Communication, through
Resolution No. 247, regulated the allocation of
ofﬁcial advertising, establishing certain criteria
which were positively recognized by organizations
focused on freedom of expression and access to
information.

CLASS A SHARES

Principal
Shareholders

26.44%
64.25%

CLASS B SHARES

Principal
Shareholders

44.55%
21.65%

Float

CLASS B SHARES

20.26%
9.85%

CLASS C SHARES

8.75%
4.25%

GS Unidos

Arte Gràﬁco
Editorial
Argentino S.A.

100%
100%

Arte
Radiotelevisivo
Argentino S.A

99.2%
99.7%

Radio Mitre
S.A.

Inversora
de Eventos S.A.

Compañía de
Medios digitales
(CMD) S.A.

GC Gestión
Compartida S.A.

100%
100%

THE COMPANY. ORIGIN, EVOLUTION AND PROFILE

Grupo Clarín is Argentina's most prominent and
diversiﬁed media group and one of the most
important in the Spanish-speaking world. The
Company is organized and operates in Argentina
and its controlling shareholders and management
are Argentine. Grupo Clarín is present in the
Argentine printed media, radio, broadcast and
cable television, audiovisual production, and in
the printing industry. Its leadership in the different
media is a competitive advantage that enables
Grupo Clarín to generate signiﬁcant synergies
and expand into new markets. Substantially all
of Grupo Clarín's assets, operations and clients
are located in Argentina, where it generates
most of its revenues. The Company also carries
out operations at a regional level. Today, Grupo
Clarín employs around 18,000 people. This
makes Grupo Clarín one of the largest employers
of Argentina.

Grupo Clarín's history dates back to 1945, the year
in which Roberto Noble founded the newspaper
Clarín of Buenos Aires (“Diario Clarín”), with
the goal of becoming a mass distribution and
quality newspaper, privileging information and
committing to the comprehensive development
of the country. Since 1969, Diario Clarín has been
led by his wife, Ernestina Herrera de Noble. It

became the ﬂagship national newspaper and
has consolidated its position throughout the
years thanks to the work of its journalists and
the loyalty of its readers. Diario Clarín is now
one of the Spanish-language newspapers with
the highest circulation in the world. In 2016,
Diario Clarín became the most widely-read digital
newspaper in the Spanish-speaking world. Over
the years, Grupo Clarín has been one of the main
actors in the changes undergone by the media
worldwide. It incorporated new and varied printing
activities and decided to embrace technological
developments, investing to reach its audiences
through new platforms and channels and through
new audiovisual and digital languages.

In this way, Grupo Clarín entered the radio and
television sectors. Today, it is the owner of one
of the two leading broadcast television channels
in Argentina (ARTEAR/El Trece) and of AM/
FM broadcast radio stations. Along with the
newspaper, these media are recognized as the
most credible and considered leaders of Argentine
journalism in one of the most diverse media
markets in the world. For example, in Buenos
Aires, the Company's media compete in a market
that has 5 broadcast television stations, 550
radios, and 12 national newspapers.

Grupo Clarín also publishes Olé, the ﬁrst and
only sports newspaper in Argentina; the free
newspaper La Razón and the magazines Ñ,
Genios, Jardín de Genios, Pymes and Elle,
among other publications. Through CIMECO, the
Company holds equity interests in the newspapers
La Voz del Interior, Día a Día and Los Andes, in
a market of approximately 200 regional and local
newspapers. The Company also holds an equity
interest in a national news agency (DyN). In the
audiovisual front, it also produces 5 cable signals.
A news signal, (Todo Noticias), and the signals
Volver, Magazine and Quiero Música en mi Idioma.
It also produces sports channels and events (TyC
Sports), television contents and motion pictures
(Pol-ka and Patagonik Film Group).

Another one of its strengths lies in the strategic
focus on communications. Since the beginning
of Multicanal's operations in 1992 and after
the recent acquisition of a majority interest in
Cablevisión, Grupo Clarín has created one of the
largest cable television systems in Latin America
in terms of subscribers. Cablevisión is the ﬁrst
cable operator in Argentina among 700 operators
and always competes with other cable or satellite
options. Through Fibertel, it also provides high-
speed Internet services and has one of the largest

CLASS A SHARES

Principal
Shareholders

26.44%
64.25%

Float

Fintech
Media

CLASS B SHARES

20.26%
9.85%

40%
40%

CLASS B SHARES

Principal
Shareholders

44.55%
21.65%

CLASS C SHARES

8.75%
4.25%

GS Unidos

60%
60%

100%
100%

subscriber bases in a highly competitive market.

In 2016, through Cablevisión, the Company acquired
NEXTEL, which seeks to consolidate as the fourth
telephony and mobile Internet services in Argentina.

In line with the global trend, Grupo Clarín has
committed itself to expanding digital content
production. Grupo Clarín's Internet portals and
sites receive more than half of the visits to
Argentine websites. The Group's digital media are
benchmarks of journalistic quality and have the
best credibility rates of Argentina. Its social media
accounts have the largest number of followers
and generate signiﬁcant interaction. Over the
last years, the Group’s media and journalists
have received many awards for their ventures in
different digital platforms. Recently, at the WAN-
IFRA LATAM Digital Media Awards, Grupo Clarín's
media received three awards. It also received
many awards from the Inter-American Press
Association and other international agencies.

In 1999, Grupo Clarín was incorporated as an
Argentine sociedad anónima, a corporation with
limited liability. It gradually opened its capital to
other participants and, since October 2007, it is
listed on the Buenos Aires Stock Exchange and

on the London Stock Exchange. It takes pride
in having grown in Argentina, in being a source
of inﬂuence on a local level in an increasingly
transnational market with a size that enables it
to compete without losing strength among large
international players.

Grupo Clarín's investments in Argentina in the
last 20 years have been very signiﬁcant, always
with the same central focus: Journalism, the
media, production and distribution of contents and
communications. Its activities have contributed to
the creation of an important Argentine cultural
industry and generate qualiﬁed and genuine
employment.
Its vision and business model
focus on investing, producing, informing and
entertaining, preserving Argentine values and
identity, and preserving business independence in
order to ensure journalistic independence.

In addition, since its foundation, Grupo Clarín
has undertaken intense community activities.
Grupo Clarín, together with the Noble Foundation,
in 1966, organizes
which was established
and sponsors several programs and activities,
particularly focused on education, culture and
citizen participation. Furthermore, as an indication
of its social responsibility, Grupo Clarín focuses

on the ongoing improvement of its processes,
develops initiatives that arise from discussions
for
with different stakeholders, and works
sustainability.

In 2016, the Board of Directors proposed, and the
Shareholders’ Meeting approved, the spin-off of
its cable and telecommunications operations into
a new company that will be called Cablevisión
Holding S.A.

As a result, there will be two sociedades
anónimas (corporations with limited liability),
Grupo Clarín S.A. and Cablevisión Holding S.A.
The shareholders of the current Grupo Clarín S.A.
will maintain the same interest in both companies.
Grupo Clarín S.A.’s structure will retain the
journalistic media and content production. This
includes AGEA, ARTEAR, Radio Mitre, IESA and
CMD, among others. Cablevisión Holding S.A.
will hold the interest that Grupo Clarín holds in
Cablevisión and its subsidiaries, including Nextel.
The transaction is aimed at boosting the growth
of its media and telecommunications segments,
having more appropriate and ﬂexible structures
to face the challenges and investments required
by each of them, and boosting their value for the
audiences, customers and shareholders.

GRUPO CLARÍN AND ITS BUSINESS SEGMENTS IN 2016

Grupo Clarín and its business segments grew
again in 2016 in a highly challenging context.
During this year, the Company consolidated the
positive economic and ﬁnancial performance
trends of the previous years.

Grupo Clarín’s net consolidated sales (including
continuing and discontinued operations) increased
by 48%, from Ps. 27,791.5 to Ps. 41,178.1 billion.
The growth in cable modem Internet access
subscribers played a key role in the performance
of subscription revenues. Sales of the remainder

of the Company's products and services also
increased.

indebtedness

By the end of 2016, Grupo Clarín’s gross
consolidated ﬁnancial
(including
sellers ﬁnancing, accrued interest and fair value
adjustments) was approximately Ps. 10,014
billion. while net consolidated indebtedness was
approximately Ps. 6,663 billion, representing an
increase of 44.4% and 57.5%, respectively. This
arose mainly from the USD 500 million bond issued
by Cablevisión, the fact that approximately 95% of

the Company's indebtedness as of December 31,
2016 is denominated in US dollars and that the
Argentine Peso depreciated by 18% in 2015, from
Ps. 13.04 = USD 1 as of December 31, 2015 to Ps.
15.89 = USD 1 as of December 31, 2016.

The following is a description of the most
signiﬁcant events related to the situation and
management of each of Grupo Clarín's business
segments during 2016.

SALES BREAKDOWN BY SOURCE OF REVENUE - DECEMBER 2016 VS. DECEMBER 2015

CABLE TV,
INTERNET ACCESS
& TELEPHONY

PRINTING
& PUBLISHING

BROADCASTING
& PROGRAMMING

DIGITAL CONTENT
& OTHERS

ELIMINATIONS(1)

TOTAL

(in million of ps.)

2016

2015

2016

2015

2016

2015

2016

2015

2016

2015

2016

2015

2016

2015

111.6

118.9

2,374.8

1,744.6

3,513.1

2,622.7

103.9

80.3

(269.1)

(216.4)

5,834.3

4,349.9

14.2%

15.7%

2,548.3

1,995.5

361.5

322.5

Video Subscriptions

18,750.4

14,430.0

Internet Subscriptions

7,697.5

4,818.0

Programming

IDEN Telecommun.

2,804.4

942.5

395.6

(183.5)

(0.1)

2,364.8

1,995.4

(56.4)

(43.6)

305.1

278.9

18,750.4

14,430.0

(29.3)

(16.4)

7,668.2

4,801.6

(216.5)

(166.0)

726.0

229.6

2,804.4

Other Sales

1,207.3

758.4

491.1

240.9

444.3

583.1

1,164.1

680.7

(582.0)

(557.1)

2,724.8

1,706.0

5.7%

0.7%

45.5%

18.6%

1.8%

6.8%

6.6%

7.2%

1.0%

51.9%

17.3%

0.8%

0,0%

6.1%

Advertising

Circulation

Printing

Total Sales

30,571.2

20,125.4

5,775.8

4,303.4

4,899.9

3,601.4

1,268.0

761.0

(1,336.7)

(999.6)

41,178.1

27,791.5

100.0%

ADJUSTED EBITDA

(in million of ps.)

2016

2015

YOY

Cable TV, Internet access
and Telephony

10,930.9

7,294.7

49.8%

Printing
and Publishing

Broadcasting
and Programming

Digital Content
and Others

Subtotal
Eliminations

Total

(104.7)

112.6

(193.1%)

1,201.6

952.3

26.2%

(131.1)

1.3

11,896.6
-

8,360.8
-

42.3%
NA

11,896.6

8,360.8

42.3%

Cost of sales (Excluding Depreciation and Amortization)
Reached Ps. 18,227.7 million, an increase of 48.7% from Ps.
12,258.7 million reported for 2015 due to higher costs across all
business segments, mainly in Cable TV and Internet access and
Telephony because of the consolidation of the Mobile Argentine
operations (Nextel Argentina).

Selling and Administrative Expenses (Excluding
Depreciation and Amortization)
Reached Ps. 11,053.8 million, an increase of 54.1% from Ps.
7,172.0 million in 2015. This increase was mainly due to higher
costs and the consolidation of Nextel in the Cable TV, Internet
access and Telephony segment.

Adjusted EBITDA
Reached Ps. 11,896.6 million, an increase of 42.3% from Ps.
8,360.8 million reported for 2015, driven by higher sales in Cable
TV, Internet access and Telephony and to a lesser extent, to
higher EBITDA in the Broadcasting and Programming segment.

Financial results net
totaled Ps. (2,857.2) million compared to Ps. (3,064.4) million for
2015. The decrease of the negative result was mainly due to
lower peso depreciation during 2016, which went from Ps 13.04
per dollar at the end of December 2015, to Ps 15.89 per dollar
as of December 31th, 2016; compared with the 2015 with went
from Ps 8.55 per dollar at the end of December 2014 to Ps. 13.04
per dollar as of December 31th, 2015.

Equity in earnings from unconsolidated afﬁliates
in 2016 totaled Ps. 160.2 million, compared to Ps. 544.6 million
for 2015.

Other Income (expenses), net
Ps. 158.1 million, compared to Ps. 99.9 million in 2015.

Income tax as
of December 2016 reached Ps. (2,333.7) million, from Ps.
(1,229.5) million in December 2015.

Income for the period
totaled Ps. 4,179.6 million, an increase of 43.3% from
Ps. 2,915.9 million reported for 2015. This was mainly a
consequence of higher EBITDA in the Cable TV, Internet access
and Telephony and Broadcasting and Programming segments,
and it was partially offset by negative EBITDA in the Printing
and Publishing segment. The Equity Shareholders Income for
the period amounted to Ps.2,530.0 million, an increase of 34.2%
compared with December 2015.

Cash used in acquisitions of property, plant and
equipment (CAPEX)
totaled Ps. 9,024.0 million in 2016, an increase of 109.5% from
Ps. 4,306.5 million reported for 2015. Out of the total CAPEX in
2016, 96.5% was allocated to the Cable TV, Internet access and
Telephony segment, 2.2% to the Broadcasting and Programming
segment and the remaining 1.2% to other activities. Capex in
the Cable TV, Internet access and Telephony segment pertains
to subscriber growth, network upgrades and digitalization.

Debt proﬁle(1):
Debt coverage ratio for the period ended December 31th, 2016
was .84x and the Net Debt at the end of this period totaled Ps.
6,711.1 million.

(1) Debt Coverage Ratio is deﬁned as Total Financial Debt divided by Adjusted

EBITDA (Last Quarter Annualized). Total Financial debt is deﬁned as ﬁnancial

loans and debt for acquisitions, including accrued interest.

DEBT AND LIQUIDITY

(In million of Ps.)

Dec 16

Dec 15 % Change

Sep 15 % Change

SHORT TERM AND LONG TERM DEBT

CURRENT FINANCIAL DEBT

1,300.9

2,897.8

(55.1%)

1,357.6

(4.2%)

Financial loans

Negotiable obligations

Accrued interest

Acquisition of equipment

Sellers Financing Capital

Sellers Financing accrued interest

Related Parties Capital

Related Parties accrued interest

239.8

532.8

(55.0%)

220.1

8.9%

1,661.5

(100.0%)

44.7

795.1

14.3

8.4

0.2

196.0

(77.2%)

166.2

(73.1%)

389.9

103.9%

755.0

5.3%

1.9

660.7%

16.3

(12.5%)

21.0

(60.1%)

3.4

147.1%

1.7

(88.8%)

0.1

115.7%

Bank overdraft

198.6

93.0

113.5%

196.5

1.1%

NON-CURRENT FINANCIAL DEBT

8,760.9

4,071.9

115.2%

8,577.8

2.1%

Financial loans

83.4

149.5

(44.2%)

108.2

(22.9%)

Negotiable obligations

7,945.0

3,321.7

139.2%

7,655.0

3.8%

Accrued interest

Acquisition of equipment

723.0

591.4

22.3%

805.8

(10.3%)

Sellers Financing Capital

Sellers Financing accrued interest

Related Parties Capital

9.4

9.2

2.6%

8.8

6.8%

Related Parties accrued interest

Bank overdraft

TOTAL FINANCIAL DEBT(A)

10,061.8

6,969.7

44.4%

9,935.4

1.3%

Measurement at fair Value

(47.9)

(32.7)

(46.6%)

(47.3)

(1.3%)

TOTAL SHORT TERM AND LONG

10,013.9

6.937,0

44.4%

9,888.1

1.3%

TERM DEBT

Cash and Cash Equivalents(B)

3,350.7

2,705.6

23.8%

3,311.4

Net Debt(A) - (B)

6,711.1

4,264.1

57.4%

6,624.0

Net Debt/Adjusted EBITDA(1)

% USD Debt

% Ar. Ps. Debt

0.56x

95.1%

0.55x

2.2%

0.52x

88.3%

7.6%

95.1%

(0.0%)

4.9%

11.7% (57.8%)

4.9%

0.0%

1.2%

1.3%

6.6%

DEBT PROFILE AS OF DECEMBER 31TH, 2016

US$ MM, Balance Sheet

629

500

2017

2018

2019

2020

2021

TOTAL

CORPORATE
GOVERNANCE,
ORGANIZATION AND
INTERNAL CONTROL
SYSTEM

CORPORATE GOVERNANCE, ORGANIZATION AND INTERNAL CONTROL SYSTEM

Grupo Clarín's Board of Directors is responsible
for the Company's management and approves its
policies and overall strategies. Pursuant to the By-
laws, the Board of Directors is comprised by ten
permanent directors and ten alternate directors
who are elected at the Ordinary Shareholders'
Meeting on an annual basis. Four of them (two
permanent and two alternate members) are
required to be independent directors, appointed in
accordance with the requirements provided under
the CNV (Comisión Nacional de Valores) rules.

MEMBERS OF THE
BOARD OF DIRECTORS
Grupo Clarín's Board of Directors is comprised by
the following members, appointed at the Annual
Ordinary Shareholders' Meeting and Special
Meeting per Class of Shares, held on April 25, 2016:

of its members must meet the independence
requirement provided under CNV rules.

SUPERVISORY COMMITTEE
Grupo Clarín's Supervisory Committee is comprised
by the following members, appointed at the Annual
Ordinary Shareholders' Meeting and Special
Meeting per Class of Shares, held on April 25, 2016:

Raúl Antonio Morán1

Carlos A. P. Di Candia1

Pablo San Martín1

Hugo Ernesto López1

Rubén Suárez1

Miguel Ángel Mazzei1

Member

Alternate Member

AUDIT COMMITTEE
The Audit Committee is comprised as follows:

Jorge Carlos Rendo

Chairman

Alejandro Alberto Urricelqui

Vice Chairman

Alberto César José Menzani

Pablo César Casey

Horacio E. Quirós

Hector Mario Aranda

Ignacio R. Driollet

Lorenzo Calcagno

Director

Lorenzo Calcagno

Director

Alejandro Alberto Urricelqui

Director

Pablo César Casey

Director

Carlos Rebay

Independent Director

Luis Germán Fernández

Chairman

Vice Chairman

Member

Alternate Member

Alberto César José Menzani

Independent Director

Gonzalo Blaquier

Sebastián Salaber

Director

Martín Gonzalo Etchevers

Alternate Director

Hernán Pablo Verdaguer

Juan Ignacio Giglio

Francisco Iván Acevedo

Sebastián Bardengo

Alternate Director

Marcelo Alejandro Trivarelli

Alternate Director

Gervasio Colombres

Carlos Rebay

Luis Germán Fernández

Francisco Saravia

Alternate Director

Grupo Clarín organizes its activities under an
executive structure comprising: External Relations
Department; Corporate Finance Department;
Corporate Control Department; Corporate Strategy
Department; Audiovisual Content Department;
Corporate Human
Resources Department;
Corporate Affairs Department; Digital Content
Department.

The overall criteria used to appoint managers are
based on the background and experience in the
position and the industry, companies they have
worked for, age, professional and moral aptitude,
among other factors.

Grupo Clarín also has a Supervisory Committee
comprised of 3 permanent members and 3
alternate members, who are also appointed on
an annual basis at the Ordinary Shareholders'
Meeting. The Board of Directors, through an Audit
Committee, is in charge of the ongoing oversight of
all matters related to control information systems
and risk management, and issues an annual report
on these topics. The members of the Company's
Audit Committee may be nominated by any
member of the Board of Directors and a majority

In order to identify opportunities and streamline
structures and systems with the aim of improving
processes and making informed decisions, Grupo
Clarín sets forth several procedures and policies
for controlling the Company's operations. The
areas responsible for the Company's internal
controls, both at the Company level and at the
level of its subsidiaries and afﬁliates, contribute
to the safeguarding of shareholders' equity,
the reliability of ﬁnancial information and the
compliance with laws and regulations.

1) Independent members of the Supervisory Committee.

COMPENSATION OF THE MEMBERS
OF THE BOARD OF DIRECTORS
AND SENIOR MANAGEMENT

Compensation of the members of the Board of
Directors is decided at the Shareholders' Meeting
after the close of each ﬁscal year, considering the
cap established by Section 261 of Law No. 19,550
and related regulations of the CNV.

All of Grupo Clarín's subsidiaries have compensation
arrangements with all of their ofﬁcers in executive
and managerial positions, which contemplate a
ﬁxed and variable remuneration scheme. Fixed
compensation is tied to the level of responsibility
attached to each position, prevailing market
salaries and performance. The annual variable
component is tied to performance during the ﬁscal
year based on the objectives set at the beginning
of the year. Grupo Clarín does not have any stock
option plans in place for its personnel.

As mentioned in Note 20 to the Consolidated
Financial Statements, on January 1, 2008 Grupo
Clarín began to implement a long-term savings
plan for certain executives of Grupo Clarín and its
subsidiaries. Executives who adhere to such plan
will contribute regularly a limited portion of their
salary to a fund that will allow them to increase
their income at the retirement age. Furthermore,
each company matches the sum contributed by
such executives. This matching contribution will
be added to the fund raised by the employees.
Under certain conditions, employees may access
such fund upon retirement or upon termination
of their jobs with Grupo Clarín. This long-term
beneﬁt has a strong withholding component and
is considered as an integral part of the employee's
total compensation for comparative purposes with

prevailing market salaries. During 2013, certain
changes were made to the savings system,
although its operation mechanism and the main
characteristics with regard to the obligations
undertaken by the company were essentially
maintained.

The parameters used in ﬁxing compensations are
in line with customary market practices followed
by companies of the scale of Grupo Clarín. To this
end, the Company assesses the relative weight of
the several positions within the company, as well
as the performance of the employee that holds the
position. In order to assess positions and compare

in different markets, the Company
salaries
uses the services and reports of prestigious HR
companies at the national and international level.

ANNUAL SHAREHOLDERS' MEETING
Grupo Clarín held its Annual Ordinary Shareholders'
Meeting on April 25, 2016. On this occasion,
the shareholders reviewed and approved the
accounting records for ﬁscal year No. 17 ended
on December 31, 2015 and the performance and
compensation of the members of the Board of
Directors and the Supervisory Committee. Among
other things, they elected the permanent members
and alternate members of the Board of Directors
and the Supervisory Committee for the year 2016.
In addition, said Shareholders’ Meeting approved
the distribution of dividends in the amount of Ps.
300,000,000, payable as from May 12, 2016.

DIVIDEND POLICY
Grupo Clarín does not have a formal dividend
policy governing the amount and payment of
dividends or other distributions. According to its
By-laws and the Argentine Corporate Law, Grupo
Clarín may lawfully pay and make declarations of
dividends only out of the retained earnings stated
in the Company's annual Financial Statements
prepared in accordance with Argentine GAAP and
CNV regulations and approved at the Shareholders'
Meeting. In such case, dividends must be paid on
a pro rata basis to all holders of shares of common
stock as of the relevant record date.

SET-UP OF RESERVES
Pursuant to the Argentine Corporate Law and CNV
resolutions, Grupo Clarín is required to set up a
legal reserve of no less than 5% of each year's
retained earnings until such reserve reaches
20% of its outstanding capital stock plus the
corresponding adjustment. The legal reserve is not
available for distribution to shareholders.

CODE OF CORPORATE GOVERNANCE
In addition
in
the aforementioned and
conformity with the CNV's decisions concerning
the ﬁling of the report about compliance with
the Code of Corporate Governance (Resolution
No. 606/12), Grupo Clarín prepared the report for
the year under analysis, which is attached as an
exhibit to this annual report.

CORPORATE GOVERNANCE, ORGANIZATION AND INTERNAL CONTROL SYSTEM

STOCK INFORMATION AND SHAREHOLDER STRUCTURE

Grupo Clarín is listed in the Buenos Aires Stock Exchange where it trades its
shares, and in the London Stock Exchanges, where it trades its shares in the
form of GDS.

London Stock Exchange (LSE) - Ticker:

Bolsa de Comercio de Buenos Aires
(BCBA) - Ticker:

GCLA (BCBA) Price per share, December 31, 2016

GCLA (LSE) Price per GDS, December 31, 2016

Total Shares

Total GDS

EQUITY PARTICIPATION AT IPO(1)

70.9%

Controlling
Shareholders(2)

GCLA

Ps. 199.95

USD 22.60

287,418,584

143,709,292

8.8%

GS Unidos, LLC(3)

20.3%

Free Float

THE ORIGINAL IPO ALLOCATION
WAS 80% INTERNATIONAL AND
20% LOCAL

SHAREHOLDER STRUCTURE

Numbers of Shares(4)

Controlling Shareholders

GS Unidos, LLC (RB)

Free Float

- International

- Local

TOTAL

204,030,277

25,156,869

58,231,488

29,460,064 (51%)

28,771,424 (49%)

287,418,584

(1) Since the IPO, our shareholders and management acquired approximately 7.8 MM shares (13.7% of the free float).

(2) Controlling Shareholders: Ernestina H. de Noble, Héctor H. Magnetto, José Antonio Aranda and Lucio Rafael Pagliaro.

(3) GS Unidos, LLC, a company under the indirect control of The 1999 Ernestina Laura Herrera de Noble New York Trust,

HHM Media New York Trust, The LRP New York Trust and José Antonio Aranda.

(4) As of March 9th, 2016.

CABLE TELEVISION,
INTERNET ACCESS
& TELEPHONY

CABLE TELEVISION, INTERNET ACCESS AND TELEPHONY

Grupo Clarín operates, through Cablevisión, one of
the main regional cable television and broadband
systems. This segment's revenues mainly derive
from monthly subscriptions to cable television
service and high-speed Internet access, through
Fibertel. Its revenues also derive from connection
and advertising charges, sales of premium and
pay-per-view programming, digital packages, DVR,
high deﬁnition (HD) signal packages, VOD (Video
On Demand) services, the recently launched Flow
services, and the magazine.

During 2016, Cablevisión acquired the mobile
telephony operator Nextel, the fourth operator in
terms of the number of customers in the Argentine
market. Nextel is now a subsidiary of Cablevisión.

Out of Grupo Clarín's total sales in 2016, the
Cable TV and Internet access segment was the
Company's main revenue driver, with sales of Ps.
30,571 billion, considering intersegment sales.

ADJUSTED EBITDA

(In millions of Ps.)

10,930.9

7,294.7

%
8
.
9
4

Y
o
Y

2016

2015

Y
N
O
H
P
E
L
E
T
D
N
A
S
S
E
C
C
A
T
E
N
R
E
T
N

N
O
I
S
I
V
E
L
E
T
E
L
B
A
C

NET SALES

(In millions of Ps.)

30,571.2

Y
N
O
H
P
E
L
E
T
D
N
A
S
S
E
C
C
A
T
E
N
R
E
T
N

N
O
I
S
I
V
E
L
E
T
E
L
B
A
C

20,125.4

%
9
.
1
5

Y
o
Y

2016

2015

Udn CENTRO

Udn LITORAL

Udn INTERNACIONAL

Udn AMBA

Udn BUENOS AIRES

Udn SUR

OPERATING STATISTICS - CABLE TV AND INTERNET ACCESS

Homes Passed(1)

Bidirectional Homes Passed

Unique Subscribers

CABLE TV

Total Consolidated Subscribers(1)(3)

Subscribers - Argentina

Subscribers - International (Uruguay)

% over Homes Passed

Total Equity Subscribers(4)

Churn Rate %

DIGITAL VIDEO

Digital Ready Pay TV Subs(1)

Total Digital Decoders

- Argentina

- International

Penetration over Digital Ready TV Subs

INTERNET SUBSCRIBERS

Total Internet Subscribers(1)

- Cablemodem(1)

- ADSL(1)

- Dial Up(1)

% over Bidirectional Homes Passed

TOTAL ARPU(2)

TELEPHONY

Mobile Postpaid Subs(1)

Postpaid ARPU(2)

2016
7,832.9

75.1%

3,912.2

2015

7,795.4

72.1%

3,873.7

3,527.7

3,532.6

3,385.5

3,395.3

142.2

45.0%

137.3

45.3%

3,658.2

3,664.1

YoY

0.5%

4.2%

1.0%

(0.1%)

(0.3%)

3.6%

(0.6%)

(0.2%)

13.8%

12.6%

9.1%

3,014.7

2,891.8

1,828.6

1,642.1

1,605.7

1,444.2

222.9

60.7%

197.9

56.8%

2,182.6

2,025.9

2,180.2

2,018.1

2.42

0.0

36.0%

643.5

3.3

4.5

34.9%

477.6

4.2%

11.4%

11.2%

12.6%

6.8%

7.7%

8.0%

(26.7%)

(99.8%)

3.2%

34.8%

2016
730.9

4Q16

3Q16

QoQ

7,795.4

807.5

(9.5%)

243.0

72.1%

251.3

4.4%

(1) Figures in thousands.

(2) Net Sales / Average Pay TV Subscribers.

(3) Total subscribers consolidated following the same consolidation

methods used in the ﬁnancial statements as of each year end.

(4) Total subscribers considering the equity share in each subsidiary.

CABLE TELEVISION, INTERNET ACCESS AND TELEPHONY

As of December 31, 2016, Cablevisión cable
network passed
through approximately 7.8
million households and provided a bi-directional
broadband capacity of more than 750 MHz
at approximately 77% of cabled households.
Through these networks, it offers not only cable
and broadband Internet access services, but also
value-added products and services.

Cablevisión has cable networks in the metropolitan
area of Buenos Aires, a unit that includes the
City of Buenos Aires, suburban areas and that,
together with the City of La Plata, make up the
“AMBA Region”. In addition, it operates in other
cities of the provinces of Buenos Aires, Santa
Fe, Entre Ríos, Córdoba, Corrientes, Formosa,
Misiones, Salta, Chaco, Neuquén and Río Negro.
In addition, through its subsidiary Telemás S.A.,
the Company provides services in Uruguay.

As of December 31, 2016, Cablevisión had 3,91
(2,19 million
million customers
customers received broadband services, and 3,52
million, cable television), and 142,200 in Uruguay.

in Argentina

CABLE TELEVISION
AND INTERNET SERVICES
Cablevisión offers different services: A basic
service that includes the main signals of the
programming grid and also premium packages.
These packages offer additional signals, with
exclusive contents not available for the basic
service, differentiated by genre. Cablevisión’s
programming comes from more than 50 providers
and transmits broadcast television stations of the
different locations where it operates.

Cablevisión also offers its subscribers a basic
digital package, a High Deﬁnition (HD) package and
a Video On Demand (VOD) package. Cablevisión
offers the digital services in the AMBA region,
in the City of La Plata and in the main locations
of the provinces. This service enables to broaden
the signal offering and features an on-screen
programming guide. In addition, as from 2015 and
through its HD platform, Cablevisión has issued
3D events for the Premium HD service subscribers.

In November 2016, Cablevisión launched a new
online content service, Flow. The distribution of
contents is based on IP infrastructure and QAM
Digital TV with the possibility of using new
functionalities such as linear streaming, Start
Over, Reverse EPG, Cloud DVR and access to VOD
contents, among others. There functionalities are

supported from a new user interface supplemented
with advanced search and
recommendation
systems available in any type of device. It is the
ﬁrst platform of this kind in Latin America and
required strong investments, not only to develop
the product, but also to adequate the Company’s
networks.

Cablevisión has been offering high-speed cable
modem Internet access through its networks
under the Fibertel brand since September 1997.
Cablevisión's Internet access products provide
speciﬁc solutions, virtual private network (VPN),
traditional Internet Protocol (IP) connections and
corporate products. Currently, its subscribers have
access to its network at average speeds of 6-12
megabytes.

In 2010,
the Company created FiberCorp,
Fibertel’s corporate business unit that provides
comprehensive telecommunications solutions to
large, medium-sized and small-sized companies.
It has a broad communication network for data,
voice and video transport. This enables it to
provide dedicated
Internet access solutions,
dynamic connections, symmetric access, and IP
video surveillance, among other services.

COMMERCIALIZATION
AND CUSTOMER SERVICE
Cablevisión uses several market positioning
mechanisms. These include promotions, customer
locations, newsletters about
service center
the company,
information and
institutional
programming through its websites. It advertises
its services in the printed media and over its own
broadcasting signals. In addition, it publishes a
monthly magazine called “Miradas”, which is sold
to a portion of its subscribers.

Customer service is provided through an integrated
Contact Center that offers round-the-clock support.
Customers can contact the Company by phone,
email and chat through Cablevisión’s website.
Subscribers may also post their comments via
social networks, mainly Twitter and Facebook.
Cablevisión is certiﬁed under the model of the
COPC (Customer Operations Performance Center)
standards, which foster improvements in the
processing of customer's inquiries.

The satisfaction indicators remained above the
target of 85%, according to Top Two Box. Its
customer service is an attribute that differentiates
Cablevisión from its competitors and is highly
valued by its customers.

COMPETITION
Cablevisión competes in the cable television
segment against other cable television operators
and providers of other television services. These
services include direct, satellite and broadcast
transmission. Given the fact that licenses are
granted on a non-exclusive basis, Cablevisión's
systems are frequently subject to overlapping
of one or multiple competing cable networks, in
addition to the satellite service that is available
throughout the company's entire coverage area. It
also competes with the free broadcasting services
available in Argentina. In the AMBA region, these
services primarily include four private television
signals (one of them is controlled by Grupo Clarín)
and their local afﬁliates and a national and public
television signal. Additionally, with the aim of
implementing the Argentine Terrestrial Digital
TV System, the National Government handed
out digital set-top units that allow free access to
certain signals.

The Argentine cable television
industry has
more than 700 operators. The most signiﬁcant
competitors are Telecentro S.A. located in the
AMBA region and DIRECTV that compete against
Cablevisión nationwide. Cablevisión competes
against Internet video streaming systems (Netﬂix,
Arnet play and On Video), among others.

Cablevisión competes based on competitive
prices, higher number of quality programs, a
wide range of additional services, technological
leadership and high customer service standards
through its Contact Center.

Two other major competitors (Arnet and Speedy)
in Argentina in the high-speed Internet access
segment, is owned by one of the country's two
ﬁxed-telephony providers. These companies also
render 3G and 4G services through their brands
Personal and Movistar, respectively. Claro - which
also provides 3G and 4G technology, offers high-
speed Internet services through optical ﬁber in
certain areas of the country.

As from January 1, 2018, all the operators will be
able to compete freely in the 4 main businesses:
Cable TV, broadband, ﬁxed and mobile telephony
services. In this way, the level of competitiveness
will become more stringent and will provide
new opportunities for Cablevisión and Nextel
to increase the number of customers and its
revenues.

TELEPHONY
Grupo Clarín provides mobile telecommunications
services
Communications
Argentina, a subsidiary of Cablevisión.

through Nextel

for

its Spanish acronym),

Nextel uses, to render its Radio Electric Trunking
(“SRECE”,
iDEN
technology
Enhanced
(Integrated Dispatch
Network) developed by Motorola. This allows the
company to unify in only one equipment Direct
Connection services
(two-way digital radio),
telephone interconnection, messaging, and data
transmission.

As of December 31, 2016, Nextel had a total of
1.1 million customers between the postpaid and
prepaid segments.

Nextel is based in the City of Buenos Aires and
has regional ofﬁces in the main cities of the
country. Its coverage area includes the cities
of Buenos Aires, Mar del Plata, Bahía Blanca,
Córdoba, Rosario, San Luis, Santa Fe, San Juan
and Mendoza, as well as the corridors among
those cities and surroundings.

CABLE TELEVISION, INTERNET ACCESS AND TELEPHONY

On September 11, 2015, Cablevisión acquired
49% of the capital stock of Nextel. On January
27, 2016, Cablevisión completed the acquisition
of the remaining 51% of the membership interests
of Nextel. On March 7, 2016, the ENACOM
authorized the change of control of Nextel in favor
of Cablevisión.

On June 22, Nextel acquired, together with
Cablevisión, 100% of Fibercomm S.A. and
Gridley Investments S.A., owners of Trixco S.A.,
holder of the radio-electric spectrum 900Mhz
bands. They also acquired all the capital stock
of WX Telecommunications LCC and Greenmax
Telecommunications LCC, which
its
subsidiaries rendered wireless telecommunication
services and radio-electric spectrum services
in 2.5 Ghz bands. These transactions will allow
Nextel to enhance
its current services and
incorporate new value-added services, such as
wireless Internet with 4G technology.

through

BROADCASTING
AND PROGRAMMING

BROADCASTING AND PROGRAMMING

Grupo Clarín is the leading company in the
audiovisual broadcasting and programming
segment. Through ARTEAR, it holds the license
(LS85 TV Canal 13 Buenos Aires) to El Trece, one
of the two largest broadcast television channels
in Argentina,
in terms of advertising share
and audience share. It also has a presence in
broadcast television stations in Córdoba (Telecor),
Bahía Blanca (Telba), and Bariloche (Bariloche
TV). Grupo Clarín also produces cable television
signals.

Its audiovisual broadcasting and programming
array includes agreements and equity interests

in the main television and ﬁlm producers, such as
Pol-ka Producciones, and Patagonik Film Group.
Grupo Clarín also owns prominent radio stations,
such as Mitre AM 790, La 100 (FM 99.9), both in
Buenos Aires, and Mitre AM 810 in the province
of Córdoba. Grupo Clarín also has a strong stake in
sports commercialization and broadcasting rights,
directly and through joint ventures.

Out of Grupo Clarín's total sales
in 2016,
the Broadcasting and Programming segment
accounted for Ps. 4,900 billion, taking into account
intersegment sales.

ADJUSTED EBITDA

(In millions of Ps.)

1,201.6

952.3

%
2
.
6
2

Y
o
Y

2016

2015

NET SALES

(In millions of Ps.)

4,899.9

3,601.4

G
N
M
M
A
R
G
O
R
P
D
N
A
G
N
I
T
S
A
C
D
A
O
R
B

%
1
.
6
3

Y
o
Y

2016

2015

G
N
M
M
A
R
G
O
R
P
D
N
A
G
N
I
T
S
A
C
D
A
O
R
B

ARTEAR

In a scenario marked by industry challenges and
strong competition, ARTEAR was able to achieve
its goals in 2016.

Total audience share for the year 2016 stood at 0.8%
up on the previous year reaching 52.2 rating points.
Cable TV drove that improvement with a 3.6%
increase. Broadcast TV decreased by 3.9%. In terms
of audience share, between broadcast television
and cable television, the latter exceeds 50% with
a current consumption of 51.6 rating points, 4.2%
higher than the ﬁgures observed in 2015.

Telefe led audience ratings during 2016 in the
Mondays through Sundays audience shares from 12
AM through 12 PM, with an annual average of 8,9
rating, El Trece followed its competitor close behind
with 8,5 rating points, but leading prime time.

During 2016, El Trece combined news, ﬁction
and entertainment programs. The highlights in
terms of audience share were: ShowMatch (17.0),
Periodismo para Todos (14.4) and Los ricos no
piden permiso (13.3). In addition, football stood
out as the event with the highest audience ratings
of broadcast television.

The Company continued to produce journalistic
contents. El Trece airs four daily news programs
Mondays through Fridays: Arriba Argentinos,

Noticiero Trece, Telenoche and Síntesis. For many
years now, they all stand out for their journalistic
rigor and for the quality of its productions. Jorge
Lanata and his team continued with Periodismo
Para Todos, a weekly program that produces
investigative journalism.

As to entertainment shows, the following stood
out: the show ShowMatch, the ﬁction Los ricos no
piden permiso produced by Pol-Ka, and Lunch and
Dinner with Mirtha Legrand.

The signal TN, ARTEAR's news signal, once again
lead audience ratings with an average of 2,56 rating
points, thus reaching its maximum historic record
high. The signal introduced several changes to its
programming but without compromising the quality
of its productions. The highlights were A Dos Voces,
co-hosted by Edgardo Alfano and Marcelo Bonelli;
Desde el Llano, hosted by Joaquín Morales Solá;
Juego Limpio, hosted by Nelson Castro; TN Central;
and Odisea Argentina, hosted by Carlos Pagni.

informative and entertainment
ARTEAR has
signals. The Spanish language music “Quiero
Música en mi Idioma”, was quick to lead audience
ratings in the music genre. “Volver” offers the
best of classic and vintage Argentine ﬁlms and
television shows. Magazine offers its in-house
programs with broadcast TV technology.

BROADCASTING AND PROGRAMMING

OPERATING STATISTICS - BROADCASTING AND PROGRAMMING

Advertising Share %(1)

Audience Share %(2)

Prime Time

Total Time

2016
39.5%

34.8%

32.0%

2015

32.0%

37.3%

30.4%

YoY

1.3%

(6.8%)

5.0%

(1) Company estimate, over ad spend in Ps. In broadcast TV for AMBA region.

(2) Share of broadcast TV audience according to IBOPE for AMBA. PrimeTime is deﬁned as Monday through Friday from 8 pm to 12 am.

Total Time is deﬁned as Monday through Sunday from 12 pm to 12 am.

The sites El Trece, TN, Ciudad.com and FashionTV
lead each of the categories to which they
belong and its mobile applications, which offer
multimedia contents, are the most downloaded
applications in their respective categories. The
social media accounts of ARTEAR’s media are
the most active ones, with the largest number of
followers and with the highest interaction in the
industry. TN news are read by more than 5 million
people every day on its networks and more than
1 million users interact day after day through
the respective proﬁles in the social networks
of Ciudad.com. During 2016,
the Company
consolidated the migration of contents to mobile
services and social media. Facebook became the
main trafﬁc driver. In addition, TN platforms were
redesigned (web, web mobile and apps) with new
advertising formats, rankings, and performance.
ARTEAR also developed the ﬁrst application of a
Latin American TV channel for Apple TV.

The highlight of the year in terms of technology
was the construction of a new production center.
It is the most ambitious infrastructure project in
the history of ARTEAR. This space adds 2,600 m2
to the building, with a 9-m height, over 300 m2 of
glass walls, more than 200 workplaces, including
video edit bays, conference rooms and common
spaces. In addition, it extended the size of the

and Volver, all of them until October 1, 2016. On
the other hand, it continued with its activity related
to the sports audiovisual contents through its
companies Tele Red Imagen (holder of the signal
TyC Sports), Television Satelital Codiﬁcada SA and
Auto Sports S.A./ Carburando SA (motor racing).
On August 19, 2016, IESA and ARTEAR executed a
pre-spin-off-merger commitment whereby ARTEAR
absorbed certain assets spun off from IESA’s equity
- the signals Quiero Música en Mi Idioma, Volver,
Magazine and El Trece Satelital.

studios with a series of refurbishment projects. In
this extended area, ARTEAR installed new sets.
In 2016, Pol-Ka produced the daily ﬁction Los
ricos no piden permiso for El Trece’s prime time,
starring Luciano Castro, Araceli González and
Juan Darthés. More than 200 episodes were
produced. It also produced the weekly single
episodes Silencios de Familia starring Adrián
Suar, Julieta Diaz and Florencia Bertotti, among
others. ARTEAR launched the ﬁrst of four ﬁctions
aimed at children and teens under an agreement
of a co-production with Televisa Internacional,
ARTEAR Love, Divina, which will be launched
worldwide at the beginning of 2017.

Pol-Ka has set important goals to increase its
leading position among the largest producers of
the region.

ARTEAR controls Canal 12 of Córdoba, 6 of
Bariloche and 7 of Bahía Blanca. All of those
signals
journalistic and
entertainment contents. They have solid audience
shares and a good outlook.

invest heavily

During 2016, Inversora de Eventos S.A. (IESA)
exploited its two main businesses. On the one
hand, the distribution of the signals El Trece
Satelital, Quiero Música en mi Idioma, Magazine

BROADCASTING AND PROGRAMMING

RADIO MITRE

Mitre AM 790 focuses its programming on strong
journalistic productions supported by the high
credibility and professionalism of its team.

The ﬁrst morning radio talk show is hosted
by Marcelo Longobardi and the team of Cada
Mañana from 6 AM through 10 AM. It has
maintained its leadership since the ﬁrst day and
reached unprecedented peaks in audience share
of more than 50 points, a record high for Radio
Mitre. After that show, Radio Mitre airs Lanata
sin Filtro from 10 AM through 2 PM, hosted by
Jorge Lanata, Diego Leuco and a large team of
specialists, which lead audience shares. The show
can also be watched in high-deﬁnition at mitrehd.
com.ar. In addition, in the afternoon slot (from 2
pm to 5 pm), Encendidos en tarde, hosted by María
Isabel Sánchez, Rolo Villar and Tato Young, is a fun
afternoon show that combines information, humor
and interviews.

From 5 PM to 7 PM, Alfredo Leuco hosts Le Doy
Mi Palabra. His editorials are very popular and
his show achieved high audience levels during
the year. Pensándolo Bien, hosted by Jorge
Fernández Díaz, begins at 8 PM. It stands out for
his committed editorials and a thorough analysis
of reality.

On December 26, La 100 changed the programming
of the morning slots. Santiago del Moro began
hosting from 6 AM through 9 AM El Club del Moro,
co-hosted by Maju Lozano.

La 100 closed the year 2016 leading audience
shares. It combines famous artists and an ideal

mix of music and constant innovation. During the
year, Guido Kaczka and Claudia Fontán continued
to host the show No está todo dicho in the
ﬁrst slot. In the second morning slot, Lalo Mir
continued to host his show Lalo por Hecho,from
9 am to 1 pm, co-hosted by Maju Lozano. Ronnie
Arias hosts Sarasa, from 1 pm to 5 pm, a casual
radio magazine with a fresh style. Afterwards,
Sergio Lapegüe hosts Atardecer de un día agitado.
The show Románticos, aired from 8 PM to 12 AM,
ranked ﬁrst or second in audience ratings within
its time In addition, La 100 hosts acoustic concerts
with the most renowned musicians.

Cienradios is the most prominent on-line radio
content platform in Latin America. It offers 500
playlists of all the singers and genres. Users
can choose their favorite music and receive
recommendations related to their preferences. It
offers broadcast radio stations and has alliances
with third parties.

Mitre AM 810 has consolidated itself in the
province of Córdoba as the radio with the second
highest audience share. With a permanent team
in the city and its own news service, Mitre informa
primero, Mitre AM 810 develops comprehensive
coverage of news comprising Córdoba, Argentina
and the world. Its programming includes hosts,
such as, Jorge "Petete" Martínez, Rebeca
Bortoletto, and Juan A. Mateyko.

PRINTING &
PUBLISHING

PRINTING AND PUBLISHING

Grupo Clarín, through Arte Gráﬁco Editorial
Argentino S.A. (“AGEA”), is the main newspaper
publisher in Argentina and one of the most
prominent editorial content producers in Latin
America.

Out of Grupo Clarín's total sales in 2016, the
Printing and Publishing segment accounted for Ps.
5,776 billion, considering intersegment sales. This
segment derives revenues primarily from the sale
of advertising, newspaper copies and magazines
and optional products.

ARTE GRÁFICO
EDITORIAL ARGENTINO
Arte Gráﬁco Editorial Argentino S.A. (AGEA)
publishes three national newspapers. In the
ﬁrst place, AGEA publishes Clarín, the ﬂagship
Argentine newspaper and one of the most
important in terms of circulation in the Spanish-

speaking world. Olé, founded in 1996, the ﬁrst and
only sports newspaper of its kind in the Argentine
market. And Diario La Razón, a pioneer in the free
newspaper segment. It also publishes regional
newspapers. In addition, it publishes Genios, a
very popular magazine among schoolchildren;
Jardín de Genios, aimed at children between 2
and 5 years of age that comes with a supplement
for parents; Ñ, a cultural magazine; Revista
Pymes, aimed at small- and medium-sized
businesses; and Diario de Arquitectura, aimed at
the construction world, architects, designers and
building contractors, and Revista Rural aimed at
the agricultural sector, among other products.

AGEA has a strong presence in the on-line
classiﬁed ads segment through vertical sites,
including Autos, Inmuebles y Empleos and in
the Internet content market through its websites
clarin.com, ole.com.ar and entremujeres.com.

NET SALES

(In millions of Ps.)

5,775.8

4,303.4

ADJUSTED EBITDA

G
N
H
S
I
L
B
U
P
&
G
N
I
T
N
I
R
P

%
2
.
4
3

Y
o
Y

2016

2015

(In millions of Ps.)

112.6

2016

A
N

Y
o
Y

2015

G
N
H
S
I
L
B
U
P
&
G
N
I
T
N
I
R
P

(104.7)

DIARIO CLARÍN

With a long-standing journalistic and commercial
leadership consolidated over its 72-year track
record, Clarín is the most prominent Argentine
newspaper in terms of outreach to its readers,
circulation and advertising.

The success of its prestigious editorial line lies
in its identiﬁcation with the interests, needs and
emotions of its audience through a plural and
independent journalistic style.

PRINTING AND PUBLISHING

During 2016, Clarín engaged in a signiﬁcant redesign
During 2016, Clarín engaged in a signiﬁcant redesign
of its printed newspaper. It created a new section
of its printed newspaper. It created a new section
called Spot published from Mondays through
Fridays with show business, culture and trends
news. The Sunday edition offers the new Economic
supplement. Clarín created a multi-platform
newsroom that works simultaneously for the
different versions of the newspaper -printed version,
mobile and web-. All of its journalists work for all
the platforms, seeking to maintain its leadership in
the printing, digital and mobile markets.

During the year, Diario Clarín’s daily average sales
stood at 209,000 copies. Its circulation is 1.5
higher than its closest competitor, while Sunday's
sales stood at 480,000 daily copies. This places
Clarín among the major Sunday newspapers of the
world. Clarín has a 40.9% share of the newspaper
market in the City of Buenos Aires and the Greater
Buenos Aires area, and a 24.9% share at a
national level. Having its own printing facilities is
a very important competitive advantage.

The Zepita facility, located in the City of Buenos

Aires, has a surface area of 35,000 m2 and
Aires, has a surface area of 35,000 m2 and
capacity to store 12,000 tons of newsprint. It
capacity to store 12,000 tons of newsprint. It
has ﬁve Goss Metrocolor rotary offset printing
presses that enable it to print 300,000 copies of
80 full-color pages per hour. AGL's printing facility,
located in the province of Santa Fe, has a surface
area of 3,000 m2 and has a Goss Uniliner rotary
offset printing press which enables it to print
40,000 copies per hour. The entire production
process is developed in accordance with leading
industrial criteria -such as computer to plate
(CTP)- and environment preservation standards,
such as, ISO 14001.

Clarín 365, is a readers club created in 2010 to
build loyalty among readers and to reinforce
its close bond with them, as well as to retain
circulation. 397,000 subscribers enjoy a program
that offers discounts, promotions and beneﬁts in
more than 1,200 brands and 5.2 thousand stores
nationwide. The year 2016 was pivotal for Clarín
365: It became the leading beneﬁts program both
in terms of the use of the card and in terms of the
number of subscribers.

OPERATING STATISTICS - PRINTING AND PUBLISHING

Circulation(1)

Circulation share %(2)

Advertising share %(3)

2016
237.1

40.9%

52.6%

2015

261.7

39.4%

51.2%

YoY

(9.4%)

3.7%

2.8%

(1) Average number of copies according to IVC (including Diario Clarín and Olé)

(2) Share in Buenos Aires and Greater Buenos Aires Area (AMBA) Diario Clarín. Source: AGEA and IVC.

(3) Share in Buenos Aires and Greater Buenos Aires Area (AMBA) Diario Clarín. Source: Monitor de Medios Publicitarios S.A.

PRODUCTS
The basic offer of the newspaper is comprised by
the main body and its Spot, Sports and Classiﬁed
ads supplements. Weekly supplements, such as,
Rural, Countries, Económico, Autos, Viajes and
New York Times, make Diario Clarín one of the
most comprehensive newspapers in the market.

As from January 28, the Company reorganized
the structure of the regional newspapers, from
9 to 8 weekly newspapers. La Matanza regional
newspaper is now part of the Morón / Ituzaingó
/ Hurlingham regional newspaper. These regional
newspapers maintain the concept of proximity
and symmetry with their readers. The product
continues to support, in terms of circulation, the
Thursdays’ edition of the newspaper in several
locations of the surrounding areas of the City of
Buenos Aires.

In 2016, Diario Clarín's sports section covered
both in the print and in the digital formats the
most prominent sports events.

Diario Clarín’s Economic Supplement offers its
readers a thorough analysis of the economy, the
secrets of leading companies, personal ﬁnances,
labor market with valuable
marketing and
information, easy-reading texts and the opinion of
national and international prestigious columnists.
The Rural supplement is a management tool for
the production sector. It offers all the information
about agricultural businesses. It is published once
a week and has a digital platform. The Company
was present in 2016 Expoagro, the agro-industrial
fair which is held every year in March.

Clarín constantly keeps up to date and offers a
wide range of editorial products together with the
core product. The following are among the most
prominent collectible products for the period: “Las
100 mejores obras de pintura”, “Tejidos”, “Running
II”, “Bodegones”, “Jardinería”, “Neurociencia”,
“Ingles”, “Mandalas”, “Matemática en casa”,
“Tolkien”, “Sandro”, “Paul Auster”, among others.

MAGAZINES
During 2016, the cultural Magazine Ñ, together
with Clarín, was the sponsor and main supporter
of the Buenos Aires Book Fair. With a stand that
renewed its stake, it offered cultural contents,
artistic events, reading spaces, talks, debates
and workshops. Along the year, it sponsored and
supported several cultural events in the country.
Through the Premio Clarín Novela, Magazine Ñ
promotes the production and publishing of literary
ﬁction in Spanish language.

Since 2002, Diario de Arquitectura has been
published every Tuesday and offers professionals
a benchmark editorial product. It develops optional
supplements, which are highly valued by its readers.
It covers the most important events such as Casa
Foa and the Ibero-American Biennial of Architecture.
This year, it launched products such as “MAS Casas
de verano”, “MAS Hoteles” and “DNI”.

is a high-end magazine

Revista ELLE
for
women focused on fashion and beauty. It was
incorporated in 1994 to AGEA's product portfolio
and in 2016 it sold more than 25,000 copies per
month countrywide.

Tiki Tiki, published every other week, has an
empathetic approach and provides all the relevant
information for children. It is aimed at children
aged 7 through 14 and offers information, fun and
entertainment.

The graphic characteristics and appearance of
the Magazine Shop & Co make it one of the top-
of-the-line women magazines with the features
of a consumption magazine. It offers several
productions to guide and facilitate monthly
purchase decisions regarding several items such

PRINTING AND PUBLISHING

as clothing, makeup and beauty, technology,
automobiles, leisure and decoration.

its

The magazine Genios, published once a week,
continued to provide education and entertainment
for children with a clear and up-to-date language.
In 2016, its average sales exceeded 36,000
copies. The monthly edition of Jardín de Genios
the category
leadership
maintained
children's magazine with over 52,000 copies sold.
The magazine Clarín Rural -published every two
months- offers all the necessary keys to embark
on agricultural projects. It publishes thorough
articles, advice from specialists, training offerings
and innovation for the agricultural sector, as well
as contents related to livestock, dairy, machinery
and technology applied to the production in the
countryside.

OTHER NEWSPAPERS
The newspaper La Razón is the ﬁrst ever free
newspaper. It is mainly distributed in the public
transportation network of the City of Buenos Aires.
It is also distributed in more than 200 locations
including universities, hotels, coffee shops and
through an exclusive mailing to opinion leaders.

Diario Olé is the ﬁrst and only sports newspaper
in Argentina. Since its launch in 1996, it has been
a benchmark in sports information. Its editorial
offering provides the most comprehensive and
full coverage of football and other sports like
tennis, basketball, rugby and motor racing. In
2016, Olé celebrated its 20th anniversary, with
an annual sales average of 25,000 daily copies
and consolidating itself as a leader in its digital
version -www.ole.com.ar- and applications for
mobile devices.

INTERNET BUSINESS
Clarín has a strong share in every large social
platform and all of
its products follow an
innovative communication strategy. In this way,
it has achieved a leading position in social media
journalism.

Clarín.com addresses the signiﬁcant changes
derived from the Internet in the way people
consume news and information. The website,
with a large display of images, sections and a
structure that reconﬁgures the traditional news
categories, is constantly updated through an
integrated newsroom. In addition, Clarin.com has
several versions for mobile devices through web
applications that allow users of mobile phones
and tablets, with any operating system, to access
the site.

During 2016, Clarín continued to work on the
access to the web version through a user
registration system in order to provide a better
service and generate greater interaction with
the reader. As of November 2016, the number of
people registered reached 1.1 million. Clarín.com

Extrashow! was created with the redesign of
Clarin.com, with a new way of working and
generating an average of over 30 million page
views in 2016. It offers contents focused on its
users so that they may enjoy the best information
related to show business.

todoviajes.com ended the year with over 1.2
million unique visits over the last months.

El Gran DT is the most popular game in Argentina
and has engaged 5.5 million people in its 17
editions. Each on-line edition engages more than
500,000 participants who have the chance to build
their fantasy teams and win prizes.

is still the news site with the highest market share
in Latin America with 31 million unique visitors
and more than 394 million page views per month.

The Electronic Edition faithfully reproduces the
design of the printed newspaper, with the same
design, photos, infographics and ads, exploiting
the beneﬁts of digital technology. The service is
offered under a subscription program through its
web site.

With
its sites “Deautos”, “Argenprop” and
“Empleos Clarín”; the company has a strong
presence in the on-line classiﬁed ads for cars, real
estate and jobs.

On the other hand, Entremujeres.com had over
3.8 million unique users, thus becoming the most
visited website aimed at women, with a leading
position in its segment.

PRINTING AND PUBLISHING

Over the last years, AGR has unsuccessfully
attempted to explore new ways of mitigating the
effects of the drop in mass commercial printing,
and preserve, at least partially, the sustainability
of the Pompeya facility. Unfortunately, the huge
challenge entailed by this change in the industry
(now
focused on segmented, personalized
and distributed printing) was not supported
by the delegates internal commission, which
systematically rejected all the proposals made by
that company.

In the morning of January 16, a group of
approximately 40 people, including the members of
said internal commission, broke into the Pompeya
facility, breaking entrance doors, windows,
furniture and security cameras, and violently
removed the employees that were inside the
facility. As of the date of issuance of this Annual
Report, many of them were still at the facility,
although the great majority of the employees
(80%) had already agreed on their redundancy and
collected their severance payments.

TINTA FRESCA
Tinta Fresca Ediciones S.A. is an Argentine
publishing company that was founded in 2004 and
is engaged in textbook publishing for all stages
of the Argentine education system. Tinta Fresca
seeks to place books at the heart of the teaching
and learning processes and have teachers and
students use them as an effective and updated
learning tool. In addition, apart from textbooks,
the editorial offers a broad range of publications
aimed at teachers and learners, such as children
and youth literature, dictionaries and reference
books. Since its foundation, Tinta Fresca has
published more than 390 titles.

The Digital Development Unit, created in 2011,
seeks to engage in the several modalities in which
Information Technology and Communications
will be introduced in the classrooms and in the
education system in general. This allowed for
the development and launch of the ﬁrst digital
books for secondary education. They are sold at
Bajalibros.com. The Company has also developed
a new on-line sale channel.

Ríos de Tinta, founded in Mexico in 2007, in
association with the Mexican group MILENIO,
offered 14 titles for public schools and 16 titles
for private schools during 2016. During 2016, the
company strove to increase the number of titles
for private schools with language books.

ARTES GRÁFICAS RIOPLANTENSE
Artes Gráﬁcas Rioplatense S.A.
is a
(AGR)
comprehensive printing production company
that was founded in 1976. During its ﬁrst three
decades, it increased its production capacity and,
through investments in modern technologies, it
widened the variety of products it prints. Over
the last ten years, upon the huge changes in
consumption patterns derived from the emergence
of new technologies, AGR’s traditional business
has shrunk while the variable printing, distribution
and logistics segments have grown and have
higher future prospects.

AGR complies with international quality and
services standards and achieved
ISO 9000,
14000 and FSC (Forest Stewardship Council)
certiﬁcations.

During 2016, and in line with a lower level of
economic activity as a whole, deliveries showed a
generalized drop in all of AGR's product lines. The
traditional graphic sector has been competing for
many years now with the new technologies and
means of communication (digital platforms), for
which the large print runs are being replaced by
more segmented and speciﬁc publications.

Therefore, and due to the strong reconﬁguration
of the commercial printing sector, a global
phenomenon that also takes place in Argentina,
at the beginning of 2017 AGR had to restructure
its activities. On January 16, AGR announced
that it had ceased to operate its printing facility
located in the neighborhood of Pompeya, which
was engaged in the mass commercial printing
business.

IMPRIPOST
Impripost Tecnologías S.A. is a company mainly
engaged in production and variable printing,
including invoices, advertising brochures, forms,
labels and cards. It also provides envelope-stufﬁng
services. Today, it is one of the main companies in
the market of variable data printing and ﬁnishing
in large volumes.

During 2016, Impripost gained new customers with
different needs and proposals. It also continued to
render document digitalization services with very
good results and a growing customer base.

CÚSPIDE
CÚSPIDE is a company engaged in the distribution
of books. Today, it has two business areas: A
retail business area, with 30 branches located
throughout
the country; and a wholesale
distribution business area. The wholesale area
serves more than 1,500 customers. Cuspide.com
leads the on-line bookstore market in Argentina.

During 2016, it opened a new branch in the city
of Santiago del Estero and launched two new
ventures in the summer season in the cities of
Mar del Plata and Cariló. By mid-December, that
company opened the ﬁrst Cúspide franchise in the
City of La Plata.

UNIR
UNIR S.A. is a company engaged in mail reception,
classiﬁcation,
transportation,
scheduling,
warehouse, logistics, distribution, and delivery
services throughout the country, in all product
categories.

UNIR has its own distribution network in the City
of Buenos Aires and its surrounding areas. The
rest of the country is served through agreements
with other companies.

It works together with Artes Gráﬁcas Rioplatense
and Impripost, both subsidiaries of Grupo Clarín,
which allows UNIR to complete the process
ranging from the printing of invoices and brochures
to the delivery to the ﬁnal consumer. During this
year, the logistics unit has increased its share in
the general business.

During 2016, UNIR increased its total sales by
86%. During this year, UNIR S.A. increased its
storage capacity by incorporating a 2,500 m2
warehouse in the City of Córdoba.

CIMECO
CIMECO S.A. was organized in 1997 with the
aim of acquiring equity interests in Argentine
and foreign newspapers, seeking to preserve the

regional journalism industry, blending experience,
synergy and economies of scale, and preserving
its editorial principles. CIMECO holds a majority
interest in two of the three largest regional
newspapers in Argentina: La Voz del Interior
(Córdoba) and Los Andes (Mendoza).

La Voz del Interior S.A. leads the printed and
digital market in the central region of the country.
Its two printed newspapers, La Voz del Interior and
Día a Día, have a signiﬁcant market share in the
province of Córdoba.

During this year, CIMECO focused on redesigning
all of its editorial products. It has been the
most signiﬁcant change of format for La Voz del
Interior since it was founded in 1904. It used to
be a broadsheet newspaper and now it is a long
tabloid. The change was well received among its
readers.

The redesign was more than just a cosmetic
one: The goal was a change of focus giving more
depth to the contents and supplement those
contents with the information published in other
journalistic platforms. In addition, La Voz made
a comprehensive redesign of its news sites. This
was very well received by its readers and there
was a 12% growth in the trafﬁc from desktop
computers and 30% from mobile sites, with higher
ﬁgures in social networks.

Club La Voz, the beneﬁt and subscription sales
club, recorded a strong growth. 35% of the total
newspaper sales during 2016 were sold through
this subscription system.

reporting
Los Andes newspaper has been
Mendoza’s news since 1882. In that year, the
Calle family founded one of the oldest journalistic
companies
is a
benchmark brand in its market.

in the country. Los Andes

During 2016, Los Andres also worked on the
redesign of its printed version, which was well
received among its readers. Los Andes Pass,
the newspaper’s loyalty program, recorded a
18.7% increase as compared to 2015. In addition,
the newspaper participated actively in all the
important provincial events and focused on the
growth of its on-line version and on increasing
the value-added products that are sold with the
newspaper.

PRINTING AND PUBLISHING

COMERCIALIZADORA
DE MEDIOS DEL INTERIOR S.A.
During 2016, Comercializadora de Medios del
Interior S.A.
(CMI) continued to consolidate
itself as the major advertising selling network
in the interior of the country. During this year,
the Company intensiﬁed the adaptation of its
traditional businesses to the new technologies
preserving its proﬁtability model.
The site Rumbos, a little more than three years
after being launched, had more than 580,000
unique visitors, registering an 81% increase in the
last twelve months. Revenues from CMI's digital
activities accounted for 16% of its aggregate
advertising revenues. Rumbos magazine, which
celebrated its 13th anniversary in the market, is
one of its remarkable products, and consolidated
as the leading Sunday magazine in the provinces
in terms of the volume and quality of units sold.

PAPEL PRENSA
Papel Prensa S.A.I.C.F. y de M. is the ﬁrst producer
of newsprint that is wholly owned by Argentine
capital. It started its operations in 1978 and
is currently Argentina's major producer. As of
December 31, 2016, the shareholders of Papel
Prensa were AGEA (37%), CIMECO (12%), S.A. La
Nación (22.5%), the Argentine federal government
(27.5%), and other minor investors (1%).

DIGITAL CONTENT
& OTHERS

DIGITAL CONTENT AND OTHERS

Revenues in this segment are derived from the
sale of advertising on some Internet web sites
and portals and the provision of administrative
and corporate services by Grupo Clarín and its
subsidiary GC Gestión Compartida S.A. (“GCGC”)
to third parties and other subsidiaries. They

also include digital content production through
Compañía de Medios Digitales S.A. (“CMD”).

Out of Grupo Clarín's total sales in 2016, this
segment accounted for Ps. 1,268 billion, taking
into account intersegment sales.

ADJUSTED EBITDA

(In millions of Ps.)

2016

1.3

2015

A
N

Y
o
Y

G
N
M
M
A
R
G
O
R
P
D
N
A
G
N
I
T
S
A
C
D
A
O
R
B

(131.1)

NET SALES

(In millions of Ps.)

1,268.0

761.0

G
N
M
M
A
R
G
O
R
P
D
N
A
G
N
I
T
S
A
C
D
A
O
R
B

%
6
.
6
6

Y
o
Y

2016

2015

DIGITAL CONTENT

CMD holds a 93.32% equity interest in Interwa
S.A., a company dedicated to the creation and
maintenance of tourism web sites. In addition,
through its 51% interest in Clawi S.A., it develops
Mundo Gaturro, a successful on-line game, which
has become the largest on-line community of
children in Argentine history with more than
12 million registered users and more than 1.3
million children playing each month. It continued
with its expansion process to other countries and
increased trafﬁc in Chile, Peru, Mexico, Colombia
and Spain. During 2015, the company launched
Mundo Gaturro App, which allows users to switch

from their computers to their mobile devices. This
project was fully developed in-company.

Tecdia S.A., in which CMD holds a 97.93% interest,
is fully engaged in e-business development, with
a special focus on tourism platforms and on the
digital photo development business.

QB9 S.A. is a leading company engaged in the
development of casual video games in Latin
America, with a team of professionals that design
and produce on-line games, as well as desktop,
PSP and iOS games.

Electropuntonet S.A.
the ﬁrst Argentine
is
company that sells 100% of its home appliance
products online (Pure Player). Its website offers
its customers mechanisms to purchase, securely
pay and receive their products. In addition,
Electropuntonet acquired in 2016 certain assets
of Meroli S.A., a renowned chain of the province
of Córdoba specialized in the off-line sale of
home appliances. This allows it to manage and
consolidate the exploitation and engage in a
change of scale in that business niche.

OPERATING STATISTICS - DIGITAL CONTENT AND OTHERS

Page Views(1)

Unique Visitors(1)

(1) In millions. Average. Source IAB and Company Estimates.

2016
895.8

64.5

2015

783.9

65.1

YoY

14.3%

(0.9%)

DIGITAL CONTENT AND OTHERS

ArgenProp

Buscainmueble

Canal 13

Clasiﬁcados

Clarin.com

Cienradios

Ciudad

Clarín Blogs

ClubCupón

Confronte

De Autos

De Motos

Entremujeres

Espectáculos

Genios

Guía de la Industria

Grupo Clarín

iEco

Imagena

Interpatagonia

La Razón

Más Oportunidades

Mundo Gaturro

Nimbuzz

Mublet

Olé

Quieromimúsica

Revista Ñ

Shop1

Tangocity

Tipete

TN y la Gente

Toda Pasión

T&C Sports

Ubbi

Vía Restó

Yuisy

VXV

Welcome Argentina

DIGITAL CONTENT AND OTHERS

fairs. This year, the twelfth edition was held in
July at La Rural, with the participation of more
than 400 stands and 70,000 visitors.

In 2012, FEASA executed an agreement with S.A.
La Nación for the creation of a joint venture (UTE,
for its Spanish acronym) to organize Expoagro,
the annual outdoor agro-industrial fair, gathering
agricultural producers from Latin America and
highlights the production potential of Argentina.
Hundreds of agricultural state-of-the-art machines
and equipment are tested at the fair. In 2016, the
10th edition of this fair was organized in the City
of Ramallo revalidating its position as the main
Argentine agricultural exhibition in a natural
environment.

in 2015, Exponenciar S.A.’s main
Created
shareholders are Ferias y Exposiciones Argentinas
S.A. and Publirevistas S.A., with equal equity
interests, and
in the
organization of Expoagro. The fair will be held
once a year in the City of San Nicolás at a ﬁxed
location for 15 years.

is mainly engaged

is company engaged

OTHER SERVICES
in
Gestión Compartida
providing comprehensive solutions to meet the
management and operational needs of companies,
which allows its customers to focus their efforts
and resources on the activities that represent their
core business. Each area has professional and
technological resources and operates in Argentina
and several countries of South America, with a
working team of more than 500 professionals.

focused on systematically

The company has internal quality and process
areas
identifying
opportunities for improvement in the services we
provide.

FERIAS Y EXPOSICIONES ARGENTINAS
Ferias y Exposiciones Argentinas S.A. (FEASA)
is mainly engaged in the organization of events,
conferences and fairs. Since 2007, Ferias y
Exposiciones Argentinas has been mainly engaged
in the organization of Caminos y Sabores, a fair
intended to foster Argentina's gastronomy and
handicrafts and to promote the region's major
tourist destinations. Caminos y Sabores has
consolidated itself as one of the fastest growing

CORPORATE
RESPONSIBILITY AND
SUSTAINABILITY

CORPORATE RESPONSIBILITY AND SUSTAINABILITY

OUR COMMITMENT

Since our foundation, Grupo Clarín has been
aware of its social responsibility as a company
and as media. Its commitment to society is an
inherent part of Grupo Clarín's activities and is
reﬂected in its vision and statement of principles.

Grupo Clarín's media and journalists work day
after day towards fulﬁlling and consolidating the
citizens' right to information, fulﬁlling its duty to
inform with honesty and accuracy and combining
high credibility with a comprehensive journalistic
and entertainment offering, based on a deep
knowledge of the audience. The Company has
established multiple channels for communicating
and interacting with its different stakeholders in
order to respond to their expectations and boost
the positive impacts of its initiatives.

TRANSPARENCY, STANDARDS
AND GUIDELINES
Grupo Clarín's values and principles are outlined in
the Company's Code of Ethics and in the Guía para
la Acción, a document that proposes models for
management, organization and roles, and outlines
Grupo Clarín's policies and procedures concerning
labor, the environment and human rights.

Style guides, ethics manuals and news coverage
guidelines, including internal rules and commitments
to journalistic quality and journalist responsibility,

are the guiding principles of the several activities
developed by news and entertainment companies.

During 2016, the Company implemented the
main pillars of its Social Corporate Responsibility
and Sustainability Policy in order to extend best
practices and set common goals within the
organization and its subsidiaries.

Since 2004, the Company has adhered to the
United Nations Global Compact
in order to
systematically address the 10 guiding principles
to sustainable management.

In 2016, the Company issued its ﬁrst Sustainability
Report. This was the ﬁrst report issued by a
journalistic company in Argentina, which gives
Grupo Clarín a leading position in its sector. The
report reﬂects the Group's environmental, social and
economic performance and followed the guidelines
of the Global Compact, the Global Reporting
Initiative (GRI) G4 Guide and its Media Sector
Supplement. The Company identiﬁed its contribution
to the 17 Sustainable Development Goals set by the
United Nations and used the ISO 26,000 Social
Responsibility International Standard to integrate
social responsibility into its management. In order to
identify the most relevant issues to its business and
to its stakeholders, it followed the AccountAbility
1000:AA1000SES
Engagement
Standard. The material indicators were veriﬁed by
an external independent auditor.

Stakeholder

INDEPENDENCE AND TRANSPARENCY
Independence is at the core of Grupo Clarín as a
guarantee of the freedom to exercise the journalistic
role of its media in the Argentine democracy.
Independence is also an assumed responsibility, a
way of exercising and guaranteeing rights and a view
of sustainability from the Company's standpoint.

Independence requires transparency. Hence, the
information about Grupo Clarín and its subsidiaries,
media, shareholders, activities, revenues and
investments is public and is available at its web
site, at the web site of the Argentine Securities
Commission (Comisión Nacional de Valores), and
at the diverse communication channels with the
public, audiences and readers. In this regard, the
Company stands out in an environment where
most Argentine media companies fail to publicly
disclose their ﬁnancial statements, the sources of
their revenues, and in some cases, fail to reveal
the identity of their respective owners.

Advertising is one of the sources of revenues of the
media. Historically, due to the scale and diversity
of Grupo Clarín's revenues, the relative signiﬁcance
of ofﬁcial advertising revenues and individual
advertisers has always been limited with respect
to the Company's total sales. This contributes to
generate conditions that allowed the Company to
inform without any conditioning factors.

Business and editorial functions are clearly
separated at Grupo Clarín's media. Special
emphasis is placed on the fact that journalists are
completely detached from the sale of advertising
so as to allow for the exercise of journalism, free
of any conditioning factor. In addition, Grupo
Clarín's media speciﬁcally focus on the distinction
between advertising and editorial space.

INFORMATION ON SUSTAINABILITY
In line with its Social Corporate Responsibility
and Sustainability Policy, Grupo Clarín identiﬁes
the material aspects of its activities following
responsibility standards
international social
applicable
the
GRI's guidelines, and in accordance with the
expectations of its multiple stakeholders.

the media, particularly,

As to the scope of the information provided
in this section, labor indicators include all of
Grupo Clarín's subsidiaries, pursuant to the
in the ﬁnancial
accounting criteria followed
statements presented
this
Annual Report, with the addition of Trisa S.A.
Environmental performance refers to production
or scale operations in which disclosing this kind

together with

the current year

of information is material. Those indicators may
present differences against previous periods,
since
includes NEXTEL's
operations.
Similarly, some content-related
indicators are exclusively applied to subsidiaries
journalistic or entertainment
engaged
broadcasting and programming activities. As
to other indicators, for instance, those related
to certain community engagement programs
of Grupo Clarín or its subsidiaries that require
comprehensive and detailed impact assessments,
the information provided is mostly related to the
core of the activities inherent to the Metropolitan
Area of Buenos Aires, due to the complexity and
extension of the processes involved in reviewing
and verifying periodic information.

CORPORATE RESPONSIBILITY AND SUSTAINABILITY

THE VOICE OF THE PEOPLE

Grupo Clarín's media companies have assumed
a long-standing commitment to audiences and
readers. Grupo Clarín's sustained leadership
and the privileged position of its products as
the people's preferred choice are attributable
to its ability to anticipate trends and its vast
knowledge of media consumption trends, paired
with its capacity to understand their needs and
meet their requirements.

Grupo Clarín's media foster the interaction with
its public and audiences, enhancing listening
and discussion channels and tools. Applications,
social networks, letters from the readers, surveys,
contests, spaces for opinion, suggestions and
comments are expressed through multiple open
spaces for content created by the people and
for the free expression of the entire diverse and
plural society.

During this period, at a corporate level, Grupo
Clarín also offered multiple communication
and interaction channels to discuss speciﬁc
institutional issues, such as weekly newsletters
and websites and social networks, in order to
share the latest updates with accuracy and
transparency.

Grupo Clarín also intends to give a voice to small
communities and to foster the development
of local content. Through the program Somos,
Cablevisión and ARTEAR have been working
together in order to take part in the gradual
renewal of TV signals and local news programs in
many locations of Argentina. To date, the program
has 37 Somos signals. The program is based on
the concepts of access to information and cultural
proximity with the people, and introduces state-
of-the-art technology and ongoing training to
improve local coverage and develop local talents.

to guarantee

SOCIAL AND SUSTAINABILITY
COVERAGE
Grupo Clarín sets goals
the
quality and pluralism of its contents. Grupo
Clarín’s newspapers and news programs offer
comprehensive coverage of news and relevant
social and environmental issues. They also have
a long-standing and respected reputation for
journalistic research.

Special supplements, experts' and scholars'
journalistic
opinions, on-site news coverage,
images and
talent and the quality of the
infographics complete the broad variety of issues
addressed by Grupo Clarín. These include health,
consumption and development, science, education
and preservation.

the

importance of

Acknowledging
reﬂecting
diversity, fostering social justice, protecting the
youth, encouraging minority recognition and
avoiding discrimination on the basis of race and
gender are key actions to create content in the
media in a responsible fashion.

An example of this commitment is the value
provided to the coverage of social issues, such as
the program aired during 2016, Esta es mi villa,

by Todo Noticias. Clarín.com promoted El Otro, el
Mismo, a blog aimed at the inclusion of people
with disabilities, developed in association with
the Universidad Católica Argentina and social
organizations.

Also during this period, Grupo Clarín published
the supplement Gestión Sustentable (Sustainable
Management), together with Diario La Razón, to
make readers think about the most prominent
issues of the sustainable development global
agenda and to report on social and environmental
responsibility actions carried out by companies
and organizations of the civil society.

In this regard, the Calendario del Compromiso
con la Comunidad (Calendar of Commitment to
the Community) was published for the eleventh
consecutive year in Revista Viva. This is a weekly
section sponsored by Clarín, the Noble Foundation
and Red Solidaria that provides an overview of
the social challenges Argentina currently faces,
with an emphasis on the potential positive effect
that contributions made by individuals and the
organizations of the civil society may have in
addressing such challenges.

CORPORATE RESPONSIBILITY AND SUSTAINABILITY

Grupo Clarín also renewed its support for the
traditional campaign Un sol para los chicos,
together with ARTEAR and UNICEF. In 2016,
the Company held the 25th edition and raised
Ps. 52,827,793 among contributions made by
individuals, companies and others, to be used in
education and social programs aimed at children
and young people. The campaign is one of
UNICEF's main sources of revenues in the country
and seeks to boost individual donations to social
causes in Argentina.

CIVIC INVOLVEMENT AND
CONTRIBUTION TO DEVELOPMENT
Grupo Clarín seeks permanently to improve its role
in the promotion of the public debate by fostering
individual involvement and further describing the
social, economic and environmental challenges
faced by society with diversity of opinion.

During each day of September 2016, as an
initiative of Fundación Noble, Diario Clarín
published Hay un solo camino, la educación, a
page solely dedicated to the analysis and debate
of the main challenges faced by the Argentine
education system. The proposal sought to raise
awareness and create reviews to address all
aspects of education.

In addition, the Company held the Innovación
educativa para la sociedad del conocimiento
conference with over 300 attendees and
presentations made by six ministers of education,
international experts and local referents.

During 2016, the Company also focused on the
contributions to sustainability made by the country
and the region building upon social innovation and
the promotion of entrepreneurs. In November,
Diario Clarín issued a special supplement in

alliance with the Inter-American Development
Bank. The supplement covered the project contests
made at the event Idear Soluciones para Mejorar
Vidas, hosted at La Usina del Arte. It reﬂected
innovative solutions to address persistent issues
in the region in the health, water and sanitation
areas. In addition, the Company promoted We
Exchange, an initiative that seeks to empower
female entrepreneurs.

The Company also sought to foster values,
such as solidarity and community commitment.
Through ARTEAR, in 2016 the Company launched
a new edition of Abanderados de la Argentina
Solidaria, an award that recognizes the work—
that would otherwise go unnoticed— done by
social entrepreneurs and community leaders, by
communicating valuable initiatives, that foster
social transformation and may be replicated. The
initiative is supported by Ashoka and Fundación
Navarro Viola and a panel of outstanding people
from the social, academic and cultural sectors.
Alicia Félix received the Abanderada del Año
Award, thanks to votes from the public and
obtained a Ps. 250,000 prize for her work Hospice
La Piedad.

COMMUNITY ENGAGEMENT
AND SOCIAL ADVERTISING
Grupo Clarín's impact on and relationship with the
community and people goes beyond the boundaries
of its editorial coverage. The support to vulnerable
communities, the coordination of educational
projects, and the organization of campaigns to
address social issues or to help areas that were
hit by natural disasters, paired with Grupo Clarín's
sustained commitment evidenced by several
types of donations and knowledge transfer, are
just some examples of the initiatives organized
and fostered by Grupo Clarín's media companies,
either jointly or individually.

With respect to social advertising, during 2016,
its media
Grupo Clarín, through several of
companies, donated a signiﬁcant amount of
advertising time and space to foster causes
related to social, civic and environmental issues.
The Company achieved this through its own social
investment programs or within the framework of
strategic alliances with organizations of the civil
society.

Within this framework, Cablevisión organized the
program Segundos para Todos in order to donate
free advertising time to organizations of the civil
society. In 2016, this initiative donated 117,733
advertising seconds to broadcast public adds.

The estimated impact of these in-kind contributions
allocated to public welfare messages accounts

for the equivalent to a social investment of Ps.
124,470,476.

Grupo Clarín has also undertaken a sustained and
strategic commitment to bridging the digital gap
and promoting the responsible use of the Internet,
through Cablevisión and Fibertel. Cablevisión
designed Connections that transform, its 2016-
2020 Sustainability Strategy.

This commitment is undertaken in 3 ecosystems:
1. Economic NODE: Promote employment and
productive development.
2. Social LAB: Promote digital inclusion and social
innovation.
3. Environmental BIO: Manage the infrastructure
and environmental aspects, boosting positive
impacts and mitigating negative impacts.

to contribute

Within the digital ecosystem, one of the main
programs is called Puente Digital, which provides
free cable TV and Internet services to schools,
hospitals and community organizations, whereby
to digital
Cablevisión seeks
inclusion and social
innovation. The actions
carried out in connection with this program
include comprehensive design and donation of
connectivity, development of cloud technology to
face education, health, emergency and citizenship
challenges, digital training and literacy so that
women and girls can have access to technology

In 2016, Cablevisión

and young people can have access to employment
opportunities.
installed
20,707 free connections, of which 14,386 belong
to the program Puente Digital. This represents
Ps. 81,752,726 of cable TV and Internet services
donated by Cablevisión. This was supplemented
with speciﬁc programs such as the service
Cablevisión Flex, which offers social reduced
prices for
low-income areas, which reached
168,579 connections in 2016.

The impact of donated advertising space and free
connectivity services may be added to the Noble
Foundation’s budget and special projects which
reached Ps. 5 million in 2016, and to the amount
set aside for other sustainability programs in
several subsidiaries, which, in-kind and in cash,
reached Ps. 93,292,131 million in 2016. Hence, the
total cash and in-kind contributions represent in
the aggregate a contribution of approximately Ps
222,762 million.

In addition to providing ﬁnancing, resources,
capacity and experience in the promotion of
socially valuable initiatives, Grupo Clarín also
relies upon third parties to secure regular
sponsorships and donations within the framework
of strategic alliances related to the sponsored
initiatives.

RADIO

BROADCAST

CABLE TV

PAGES IN
NEWSPAPERS

PAGES IN
MAGAZINES

ADVERTISING SPACE DONATED IN 2016 ON GRUPO CLARÍN'S

Radio and Broadcast and Cable TV

Pages in newspapers and magazines

608,429 seconds

195.06 pages

THE ESTIMATED IMPACT OF

THESE IN-KIND CONTRIBUTIONS

ALLOCATED TO PUBLIC ADDS

ACCOUNTS FOR THE EQUIVALENT

TO A SOCIAL INVESTMENT OF

APPROXIMATELY PS. 125 MILLION.

* The ﬁgures of the indicators in this Report may defer from those reported

in the Sustainability Report 2015 due to changes in the method of calculation.

CORPORATE RESPONSIBILITY AND SUSTAINABILITY

BOOKS

MAGAZINES

MANUALS

NOBLE FOUNDATION'S DONATIONS OF EDUCATIONAL MATERIAL

Books

Magazines

Manuals

2016
39,022

9,325

1,250

2015

43,391

7,212

420

2014

49,603

4,177

310

FOSTERING EDUCATION AND CULTURE
As part of its initiatives in support of education,
Grupo Clarín used its cross-segment position and
its ability to communicate with society to raise
awareness of the importance of education as
a right and as a critical element in Argentina's
future social development. In this sense, it tried
to foster equal opportunities in education through
its publishing company Tinta Fresca with the
generation of updated, affordable and quality
educational materials for students, teachers and
schools throughout the country.

The Company has renewed its support for the
8th Educational Quality Forum, under the motto
"Learning and Innovation". The forum is a massive
event organized by the civil association Educar
2050. This entity combines the ﬁeld work related to
training delivered to principals of schools attended
by low-income children with extensive public policy
advocacy activities.

One of the most prominent initiatives resulting from
a collective effort is the award “Premio Clarín- Zúrich
a la Educación”. The eighth edition recognized the
best projects of “reading, writing and oral work” as
learning practices for all the subjects of secondary”
school. The ﬁrst prize consisted of Ps. 230,000
and was granted to a public school to develop its
project. In addition, there were three honorable
mentions which received Ps. 70,000 each. During
this period, through the Noble Foundation, the
Company continued to donate bibliographical
material, and renewed its long-standing support of
Escuelas Roberto Noble, named after the founder of
Diario Clarín, Roberto Noble.

Again this year, the Company sponsored the
annual Maratón de Lectura (Readathon) initiative,
organized by Fundación Leer with the participation
of over 4 million children. The event received the
donation of 22,000 books published by Clarín

and the initiative was promoted through a broad
advertising campaign.

Grupo Clarín and its subsidiaries have renewed
their commitment to culture through several
sponsorships to important events and entities, such
as, Feria del Libro (Book Fair), Faena Art Center
and Teatro Colón. The Company sponsored the
2016 season of Teatro Maipo, the presentations
in Argentina of Les Luthiers, and the campaign
Vení al teatro organized by Asociación Argentina
de Empresarios Teatrales (AADET, for its Spanish
acronym), aimed at developing, promoting and
reinforcing the emotional bond between the public
and the theatre. The Company also sponsored
the movie El Ciudadano
Ilustre directed by
Gastón Duprat and Mariano Cohn, an Argentine
dramatic comedy which received several awards
at
international festivals. The Company also
sponsored the movie Gilda directed by Lorena
Muñoz, starring Natalia Oreiro. For the ﬁrst time,
the Company participated in the master classes
given by Al Pacino and Gerard Depardieu. In 2016,
Clarín held a new annual edition of Premio Clarín
de Novela, awarded to Carlos Bernatek, for his
book El Canario, a story about the scars caused
in the darkest years of recent Argentine history.
The winner received Ps. 300,000 and got his book
published. Grupo Clarín also sponsored a series
of concerts organized by Buenos Aires Lírica
Foundation and the V International Ballet Gala and
Centro Histórico Teatro Colón.

Through its cable and broadcast TV signals, Grupo
Clarín's companies make signiﬁcant efforts to
promote the most relevant cultural, motion picture
and sports events. Such efforts are an increasing
contribution to cultural diversity and local identity.
Of particular note are initiatives such as Volver,
the cable TV signal that keeps Argentina's most
complete programming archive.

MEDIA LITERACY AND PROTECTION
OF YOUNG AUDIENCES
Through several programs, Grupo Clarín encourages
children and young people to develop media
access tools through critical thinking and to
leverage the opportunities provided by the media
and technology to explore their identity, creatively
express their ideas and make their voices heard.
Media literacy is generally deﬁned as the ability to
access to, analyze, respond with critical thinking
and beneﬁt from, the media. Grupo Clarín's main
tool to foster media literacy is its support of Los
medios de comunicación y la educación, (Education
and the Media), a pioneer program recognized
internationally, that has been developed for
more than 30 years by the Noble Foundation. The
program consists of classroom workshops and
special educational content suited to the needs of
teachers and students oriented to foster a critical
approach to the media and their use as resources
that supplement formal education. In 2016, over
7,200 students and over 800 teachers participated
in the workshops.

In 2016, the Noble Foundation celebrated its 50-
year anniversary. For its celebration, the Foundation
decided to boost the scope and impact of its
teacher training programs. To this end, it designed
a virtual training platform which enhanced its
coverage to include all the country and the world.
To such end, the Foundation reconﬁgured the
number of face-to-face workshops, as compared
to previous periods, to extend the scope of this
new platform. The program consists of six-week
courses for different education levels. There were
seven editions around three themes: “Planiﬁcar un
medio digital”, “Narrar en Ciencias Sociales” and
“Aprender a Convivir”. The training themes were
targeted at teachers, technical-educational teams
and social agents related to education. There

were 340 participants in the interchange forums
enriched with the involvement of the coaches.

tool, users may ﬁlter the access to certain web sites
deemed inappropriate and customize the protection
level for each family member, among other things.

These
initiatives program are supplemented
through other initiatives related to the promotion
of responsible content consumption. Within the
Cable Television and Internet Access segment,
the Company helps
to protect vulnerable
audiences by providing parents with the tools to
make decisions about the content their children
are allowed to access.

This includes several parental control options.
For cable TV services, the on-screen guide allows
parents to easily block content that is not suitable
for children by introducing a PIN. The Video On
Demand platform includes the identiﬁcation of
adults-only services with access control systems
that may be enabled by the subscribers. Cablevisión
Flow also developed a proﬁle system so that each
member of the family can have his own proﬁle.

In terms of protection of audiences in Internet, the
Company developed Fibertel Security. With this

These tools are provided with information and
criteria on how to use Internet. Cablevisión
developed the Compás para el uso de Internet
in partnership with UNICEF and Chicos.net. This
project, speciﬁcally addressed to families and
teachers, is intended to provide proposals to
teach children and teens about the proactive,
responsible and safe use of technology.

responsibly
The Company also addresses
children's artistic participation in the television
and ﬁlm industry; a category that was embraced
by the ILO as a valid form of participation in labor
activities by children in these age categories.
To such end, special emphasis is placed on
compliance with the applicable standards in
force, while adhering to
internal guidelines
that set limited activity schedules, protection
and promotion of school education and active
involvement of parents and tutors.

WORKSHOPS
FOR TEACHERS

WORKSHOPS
FOR STUDENTS

THE PROGRAM “LA EDUCACIÓN Y LOS MEDIOS DE COMUNICACIÓN”

Workshops for teachers

Workshops for students

2016
37

207

2015

100

294

2014

102

233

CORPORATE RESPONSIBILITY AND SUSTAINABILITY

EXCELLENCE IN
JOURNALISTIC TRAINING
In order to reafﬁrm the commitment to journalistic
excellence, Grupo Clarín also carried out activities
aimed at consolidating the training and excellence
of current and future communicators.

In this sense, the Company created the Masters
Degree in Journalism, an international graduate
course with the highest academic level, organized
by Grupo Clarín and the University of San Andrés,
with the participation of the School of Journalism
at Columbia University and the University of
Bologna. It is led by renowned national and
international journalists and academics.

The Company sponsored the Graduate Program
in Digital Journalism organized by Universitat
Pompeu Fabra, TN.com.ar and Google. This
reinforces our commitment to enhance the quality
of professionals in the 2.0 world.

In connection with
journalistic training and
within the framework of the program Somos
channels, developed by ARTEAR and Cablevisión,
regional
during 2016, Grupo Clarín offered
training sessions. Training sessions focus on the
journalistic and technical training of professionals
from regional signals nationwide, to improve local
coverage and align them with national signals.

OUR PEOPLE

CORPORATE RESPONSIBILITY AND SUSTAINABILITY / OUR PEOPLE

Grupo Clarín's success and leadership are mostly
the result of the efforts, talent, professionalism
and creativity of its employees. Grupo Clarín's
media companies are among the preferred
workplaces of most communication professionals.

EMPLOYEES BROKEN
DOWN BY GENDER 2016

13,738

TOTAL HEADCOUNT
AS OF DECEMBER 31, 2016
17,990

4,252

N
E
M

N
E
M
O
W

EMPLOYEES BROKEN DOWN BY AGE GROUPS AND SEX

Up to 30 years old

Women

Men

Between 30 and 50 years old

Women

Men

Over 50 years old

Women

Men

941

2,517

2,869

9,147

442

2,074

TURNOVER RATE 2016*

11.28%*

EMPLOYEE DISTRIBUTION BY CATEGORY 2016*

Managerial Positions

Middle Management

Analysts and Administrative Staff

Technical Staff

Other (for example, journalists)

263

2,568

6,551

6,993

1,615

* The year-on-year percentage difference arises from a methodological change in

the way this indicator is calculated.

In order to work in line with the identity and
diversity of the subsidiaries of Grupo Clarín, in
2016, the Company consolidated the concept of
the Multicultural Social Ecosystem (ESM, for its
Spanish acronym), driven by the human resources
community. This program seeks to align the
actions and practices, knowledge and experiences
of all the subsidiaries of Grupo Clarín, creating 25
cross-cutting projects. Among them, the following
stand out: the development of a leadership model,
optimization of beneﬁts, talent, remuneration, and
quality of work life, among others.

The new leadership talent model was the result of
a long process with the engagement of directors
and managers between the years 2013 and 2016.
They were faced with the challenge posed by new
generations, the changes in consumption habits
and the digital challenge in the ways things are
done and in the way people live.

Another key project, with the aim of facing the
digital challenge, was the installation of the human
resources Big Data. To this end, 10 companies are
migrating to a state-of-the-art Human Resources
Management System called Success Factors. This
system follows the parameters prevailing in digital
businesses: social, mobile, analytical potential
and cloud storage. In this way, management has
received a great boost, and its implementation
will end in 2018.

The Company has its own structure in terms of
the age and gender diversity of its employees.
With respect to gender, there is a noticeably
higher proportion of male employees, mostly on
account of the high number of employees required
in the technical areas of printing facilities and
of the cable TV and Internet access segment. In
Argentina, technical specialties are predominantly
elected by men, and that pattern is reﬂected in the
payroll of this type of industry.

The gender structure in the rest of the business
is well-balanced
segments of Grupo Clarín
considering the total workforce, with a deﬁcit
in managerial positions, which are still mainly
occupied by men. However, the Company has
in content-related
attained excellent results
activities, particularly in the areas related to
journalism and audiovisual production, where the
workforce is more diverse.

During 2016, the Company created a Diversity
Committee, which is working on active policies,
new proposals and processes that may further
the path towards a workforce
increasingly
proportionate and representative of the genre
diversity existing in the community.

On the other hand, the Company continued to work
on promoting the incorporation of age groups that
ﬁnd it difﬁcult to enter the labor market: ﬁrst-time

job seekers and people in the upper age group.

Employee turnover is among the market’s average
rates, although the digital disruption has required
the adaptation of our stafﬁng and change of
proﬁles to suit this new stage of news production.

The Company has an open dialog with union
representatives to facilitate mutual understanding
and conﬂict resolution. Employees freely exercise
their right to unionize and are currently represented
by several unions related to each of the activities
developed by Grupo Clarín and its subsidiaries.
Out of Grupo Clarín's total employees 72% is
covered by collective bargaining agreements.

Taking care of the work environment and
conditions, health and job safety and employee
training to enhance their professional skills
are some of the actions aimed at consolidating
the sense of integration and achievement of
organizational goals. During the year, the Company
created a safety and health committee.

The Internal Opinion Survey (EIO) was conducted
once again in 2016. It has been conducted every
other year since 1994 uninterruptedly. This
process focuses on management in order to
identify opportunities for improvement on the
internal environment and sustained commitment.
In 2016, the response rate reached 93%, above

CORPORATE RESPONSIBILITY AND SUSTAINABILITY / OUR PEOPLE

the market average for companies of equivalent
sizes, which shows the trust this tool has gained
and the soundness of the process for improvement
that the Company has been undertaking.

Our corporate volunteer program called Vos
también continued during 2016, with actions
conducted by each of the Company's subsidiaries.
They develop valuable initiatives for employees’
solidarity actions in which the volunteers had the
chance to participate in programs with different
themes.

The main projects carried out during the year were
the following: Blood drives, a project that seeks
to foster solidarity in the area of health; volunteer
actions to help people affected by ﬂoods, repairs
at schools, awareness actions about the Animal
Day, among others. A cross-cutting action was
proposed to all of Grupo Clarín's business units: Fin
de año en Familia, a family support program that
consists of delivering Christmas gift boxes to low
income families. The program Vos También had a
very high satisfaction level among participants:
99% of the participants found it rewarding or very
rewarding and a similar percentage stated that
they would participate again.

“VOS TAMBIÉN” VOLUNTEER PROGRAM IN 2016*

Volunteers

Participating social organizations

Direct beneﬁciaries

Hours of volunteer work

Employee's engagement

Provinces included

1340

1496

3326

BENEFITS AND CAREER DEVELOPMENT
Even though a large number of beneﬁts are
common to all employees, each Business Unit
grants additional beneﬁts, which may differ based
on their respective activities. During 2016, the
Company made progress with the subscription
of its executive management to the long-term
savings plan, effective since 2008.

During 2016, the Company continued to offer
“Nuestros Beneﬁcios”, a beneﬁt platform aimed
at all the employees of Grupo Clarín. It combines
proposals from its business units to offer beneﬁts
and discounts.

In order to encourage a greater commitment and
identity with the Company, it provided the 365
Plus card together with Diario Clarín.

In addition, the Company enhanced the scope
of
its performance management program
Crecimiento de la Efectividad Laboral (CEL, for
its Spanish acronym) to include more business
units. Of particular note is the case of La Voz del
Interior, which achieved an 80% participation of
its employees.

Grupo Clarín focuses on investing in the training
and development of its employees with two
kinds of programs: On the one hand, the training
programs of each Business Unit, focusing on the
speciﬁc needs of each activity, whereby Grupo
Clarín employees and professional staff can
update and enhance their knowledge and skills
through seminars, courses, graduate studies and
master's degrees.

On the other hand, Grupo Clarín offers the
Corporate Training Program (PCF, for its Spanish
acronym), which includes a wide range of training
proposals. During 2016, the Company offered
new alternatives to improve the performance of
the analysts and middle management of all the
companies of Grupo Clarín. During the year, 570
employees participated in the 28 courses given as
part of the Corporate Training Program.

in order

to adequately

Training is focused on new tools and technological
developments
train
employees on how to face the challenges imposed
by the changes in the media industry. During this
period, the Company offered more sessions of the
course Inducción a la Era Digital, which seeks to

CORPORATE RESPONSIBILITY AND SUSTAINABILITY / OUR PEOPLE

The goal is to open every year a new space for
breastfeeding and reach 100% of our subsidiaries.
In addition, this issue is reﬂected in the contents
of our media, through campaigns and journalistic
coverage. In this sense, this initiative follows
our policy of the responsible management of
contents which, together with the development
of the positive effect of the social impact of
communication, make up the key pillars of Grupo
Clarín’s sustainability strategy.

RELATIONSHIP WITH THE VALUE
CHAIN
Grupo Clarín's social responsibility management
is embedded in its value chain. During 2016, the
Company continued to explore alternatives of
interaction or joint approach to common-interest
issues at the various levels of relationship with its
suppliers.

During the year, the Company implemented a new
procurement policy with sustainability criteria.
Grupo Clarín focused on the implementation of
systems and procedures aimed at the application
of best practices for purchases, employee hiring,
and contracting with suppliers within a framework
of supervision and transparency.

Through Gestión Compartida, a subsidiary
engaged
in managing the relationship with
most of the Company's suppliers, the Company
continued with the requirement for 100% of the
new suppliers to undertake a commitment to the
sustainability of their operations, with a focus on
respect for human rights, the environment and
compliance with effective regulations. This was
combined with the development of a pilot program
of joint efforts with protected workshops for the
assembly of an input used by Cablevisión. These
workshops encourage the social and economic
autonomy of disabled workers.

shed light on the way in which technology has
changed the world of business, generating big
opportunities and challenges for the companies.
In this sense, two other proposals stood out: One
was conducted in association with Universidad
de Palermo: Negocios del Mundo Digital and
Modelos de Innovación en Negocios Digitales,
given to managers and directors of the Group in
association with Universidad de San Andrés.

2016, six subsidiaries of Grupo Clarín provided
their employees free annual medical check-ups.

In order to contribute to the personal safety of
our employees, 40% of our subsidiaries - such
as AGEA, Autosports, the corporate areas and
Cablevisión-, provide
their employees a
to
transportation service to the main access points
of public transportation.

During 2016, the Company held for the ﬁrst
time the Grupo Clarín Olympic Games, an event
attended by more than 400 employees from
different subsidiaries.

WORK-LIFE BALANCE
In order to continue developing work ﬂexibility
actions, during 2016, the Company implemented
as a beneﬁt for employees the Flexible Friday
in the corporate areas. This is added to the ﬁve
subsidiaries of the Group that already include
similar
time compensation schemes. Other
eight companies offer the possibility of doing
teleworking. This is a growing trend and is being
increasingly used by the companies. The goal of
this modality is to strengthen the bond between
the employees and the Company.

the Company promoted

During 2016,
the
implementation of spaces for breastfeeding at the
corporate ofﬁces. This is a key step in our goals
regarding diversity and work-life balance. These
initiatives allow the development of women at
work and also promote the creation of a diverse
workforce, apart from having a positive impact
on the health of babies and in family bonds.
Diversity provides for a combination of skills and
intellectual, technical and emotional competences
that have proved to be essential to boost the
results achieved by organizations.

In order to train middle management and upper
management and promote their key managerial
competences and skills, in 2016, once again the
Company offered the Management Development
Program, at UADE Business School. Over
200 leaders of the Group’s subsidiaries have
graduated over 7 years. It offers knowledge
and tools to improve management performance
and strengthens the sharing of practices among
company leaders. The Company also organized
several training sessions, breakfast and lunch
meetings and
integration activities among
different areas of the Company that work together
in order to strengthen internal communication
and knowledge. In addition, during the period,
the Company continued with the foreign language
training program. In addition, different groups
were created to provide group classes in a
dynamic and easy fashion so that participants may
share their knowledge, grow together and boost
their development.

In order to promote transparency in the ﬁlling
of vacancies and promote the development of
our employees, the Company implemented a
program called Open In-House Job posting. This
allows us to stimulate in-house motility among
the subsidiaries of the Group, providing equity
and transparency during the process for all
participants.

As to the quality of work life, Grupo Clarín
offered seminars and training programs about
health issues and the prevention of illnesses
and accidents, as well as other relevant topics,
the campaigns about
which supplemented
health issues and medical check-ups. Several
initiatives were implemented to promote safety
and healthy lifestyle habits: Inﬂuenza vaccination
and blood drives, meditation and yoga workshops,
placement of bicycle racks and locker rooms,
soccer tournaments, evacuation drills, healthy
menus and talks about ﬁrst aid. In addition, during

ENVIRONMENT

6060

CORPORATE RESPONSIBILITY AND SUSTAINABILITY / ENVIRONMENT

CONSUMPTION OF MATERIALS
Within the framework of an environmental
management policy oriented to eco-efﬁciency, the
Company and its subsidiaries mainly use energy,
newsprint, cable and other technology-related
elements.

CONSUMPTION IN 2016

Paper related to the production

42,961.05 Tons

of newspapers

Ofﬁce paper

Ink

Aluminum plates

Residential connection cables

CPE (Set-top units and

customer's equipment)

85.15 Tons

885.49 Tons

161.52 Tons

2984.04 Tons

1491.74 Tons

identify, plan for and

During 2016, the Company continued to implement
measures to
improve
production processes in order to optimize results
and react to potential impacts. Progress was made
in achieving the period's goals by introducing
sustainable methods to obtain and use resources,
developing equipment
investment policies,
raising active awareness on the appropriate
use of supplies and technologies and promoting
the adoption and certiﬁcation of environmental
standards.

Since 2004, Grupo Clarín has adhered to the United
Nations Global Compact that sets forth several
environmental protection standards. In addition,
Grupo Clarín's Social Corporate Responsibility
and Sustainability Policy serves as a management
guideline and drives the deﬁnition of goals for its
subsidiaries. This is reﬂected in the environmental
policies adopted by its subsidiaries, such as the one
implemented by AGEA in 2012, which combines
the improvement of environmental management
with ISO 14001 certiﬁcation and implementation
for its production processes. Cablevisión also sets
environmental management goals at the different
stages of its activities. During 2016, it maintained
its ISO 14001 certiﬁcation at its facilities located
in Rosario.

* The ﬁgures of the indicators in this Report may defer from those reported

in the Sustainability Report 2015 due to changes in the method of calculation.

At the printing plants, the Company followed
established guidelines to ensure the provision
of materials at quality levels compatible with
international standards for newsprint, inks and
other speciﬁc inputs.

Papel Prensa, a subsidiary in which Grupo Clarín
owns an indirect minority interest, supplies most
of the newsprint used in newspaper printing.

studies

research

Papel Prensa has put in place production policies
based on the procurement of strategic inputs
without depleting natural resources. Fiber comes
from sustainable plantations. This is combined
with ongoing
conducted
concerning genetic enhancement of tree species
in order to boost productivity, cut costs and
guarantee ecosystem sustainability. As part of
the sustainable process, the quantity of virgin
raw materials is reduced through the recycling
of returned newspapers and recovered paper
acquired locally and regionally.

As to the types of inks used at the printing
facilities, the diverse variety of printed products
requires a varied approach from the perspective
of resources. For instance, the use of vegetable-
based coldset ink at the Company's main printing
facility, accounts for 84.4% of total use of the
input. This type of ink, which can be used in bond
paper, is environmentally friendlier due to its
vegetable components and its efﬁciency in terms
of the amount of ink required to print, which may
be 10%-15% lower than other inks.

On the other hand, the newspaper size adjustments
introduced in previous years continue to reduce
the use of newsprint and other materials.

The Cable Television and Internet Access segment
is engaged in service activities, which essentially
do not require the use of raw materials.
Nevertheless, given the scale of operations, Grupo
Clarín's companies use certain materials produced
by their respective value chains, such as the cable
for residential services installed, top-set units
delivered under loan for use and poles used as
part of the distribution network.

Power is the main additional resource used by
Grupo Clarín and its subsidiaries. Grupo Clarín
uses power from direct and indirect sources.
Even though the Company has alternative power
generators in place for ofﬁces and industrial
facilities that require fuel, the main indirect
consumption is the electricity provided by the
power supply network.

The subsidiaries engaged in printing activities
are the heaviest users of power, followed by
the business units that use technology in their
operations, such as the cable TV and Internet
access distribution services and audiovisual
programming.

During 2016, within the framework of the joint
efforts of the Environmental Committee, the
Company conducted a systematic assessment
to identify opportunities for improvement and
It also analyzed
reduction of consumption.
alternatives to incorporate renewable sources of
energy.

At the main subsidiaries, such as ARTEAR,
Cablevisión and AGEA, the Company conducted
building refurbishments taking into consideration
energy-consumption reduction factors, such as
insulation materials, better use of natural light,
use of cold lighting systems and replacing halogen
lighting with LED systems.

DIRECT AND INDIRECT USE OF POWER BY

PRIMARY SOURCE IN 2016:

Electricity

Natural gas

Gasoline

Gas oil

CNG

LP gas

1,072,826.87 MWh

87,729.95 GJ

82,243.22 GJ

114,355.97 GJ

146.92 GJ

0 GJ

CORPORATE RESPONSIBILITY AND SUSTAINABILITY / ENVIRONMENT

WASTE AND EMISSIONS
Grupo Clarín's subsidiaries develop most of their
activities in urban areas that are not in contact
with natural areas and that meet effective urban
planning standards.

As to emissions, printing activities have the
most signiﬁcant impact on the carbon footprint
among other services rendered by the Company.
Therefore, the Company is exploring alternatives
to improve processes and efﬁciency in these
areas.
is further
deepening its analysis and inventory of CO2
emissions generated by the activities developed
by is subsidiaries, especially those related to
logistics and transportation.

In addition, the Company

Each subsidiary of Grupo Clarín identiﬁes and
manages waste production and disposal.

As part of the treatment of industrial waste from
printing processes, the Company's subsidiaries
collect and separate certain waste materials,
such as ink, oil, grease and solvents, that are sent
to third party facilities for their recycling, reuse or
safe ﬁnal disposal. Hazardous waste is subject to
a rigorous treatment handled by licensed waste
management companies. Fully reusable materials
are used in the printing process, such as aluminum
plates. At the same time, the Company continues
to develop strategies to reduce hazardous waste,
with measured goals and progress.

In the Cable TV and Internet access segment,
waste is separated at origin in order to add social
or environmental value, where practicable. With
respect to recycling, the Company keeps strict
control of the recovery of equipment delivered to
subscribers under loans for use, such as top-set

units and remote controls, in order to reuse them
or ensure its safe ﬁnal disposal, and also to reduce
the consumption of this type of equipment.

Efﬂuents resulting from the printing facilities'
development processes are subject to rigorous
treatments and measurements before disposal.
A water re-usage system was put in place at
AGEA’s Printing facility. Under its Environmental
Management System, the Company signiﬁcantly
reduced efﬂuents, which are only discharged in
exceptional cases. At La Voz del Interior's printing
facilities, waste water is subject to treatment
and is then reused for irrigation at the Company's
facilities. The ﬁgures in cubic meters disclosed
below are mostly attributable to processed
water that can be safely used for irrigation. The
Company's ofﬁce buildings and other facilities
only discharge domestic waste water.

TOTAL GREENHOUSE GAS EMISSIONS

BY WEIGHT IN 2016

Direct emissions

Indirect emissions

Total emissions

18,321.47 Tn of CO2

570,845.08 Tn of CO2

589,166.55 Tn of CO2

TOTAL WASTE WEIGHT BY TYPE IN 2016

Urban or non-

hazardous waste

Hazardous waste

493.68 Tn

8,870.22 Tn

TOTAL WASTE WATER DISCHARGE

at printing

facilities in 2016

13,909.62 m3

RISK FACTORS

As an Argentine multimedia company, Grupo
Clarín is exposed to a wide range of risks related
to the country and to its operations. The Company
relies on a strong internal control system. The
identiﬁcation of risk and its assessment is part of
each unit’s business plans, and is also addressed
by a corporate based control department and by
the Board on a regular basis.

ARGENTINA’S ECONOMIC ENVIRONMENT
Substantially all of our operations are conducted in
Argentina and are therefore affected by changes
in Argentina’s economic environment.

Sustainable economic growth depends on a
variety of factors, including international demand
for Argentine export commodities and their
prevailing prices, stability and competitiveness of
the Peso against foreign currencies, conﬁdence of
consumers and local and foreign investors and a
low rate of inﬂation.

The Argentine economy might be adversely
affected by the following factors:

- exchange rate volatility;

increase

-
competitiveness and economic growth;

current

inﬂation affecting

- recession, low economic growth or economic
uncertainties affecting Argentina’s main trading
partners;

- insufﬁcient levels of investment;

- poor development of the Argentine credit
market and limited ability to obtain ﬁnancing from
international markets;

- a reduction of the payment capacity of the
Argentine public sector and the possibilities of
procuring international ﬁnancing;

- increase in current public expenditure affecting
ﬁscal accounts;

- possible reduction or reversal in the trade
balance due to signiﬁcant decrease in agricultural
prices in general and soy in particular or adverse
climatic conditions affecting the production of
agricultural commodities;

- government imposed restrictions on imports or
exports;

RISK FACTORS

- wage, price and foreign exchange controls;

- political and social tensions;

- continued instability of the ﬁnancial systems of
the main developed economies;

- abrupt changes in the monetary and ﬁscal
policies of the main economies worldwide; and

- reversal of capital ﬂows due to domestic and
international uncertainty.

A downturn in economic activity is likely to result
in increased subscriber churn and bad debt,
subscriber losses as well as decreased advertising
revenues. We seek to address the cycles affecting
the Argentine economy by diversifying the scope
of our business and managing our foreign currency
liabilities.

POLITICAL AND ECONOMIC

UNCERTAINTIES
On November 22, 2015, Mr. Mauricio Macri was
elected President of Argentina, signaling the
ﬁrst change in the political party in charge of the
country’s administration in twelve years.

Since assuming ofﬁce on December 10, 2015,
the Macri administration has adopted several
signiﬁcant economic and policy reforms.

reforms

• INDEC reforms. On January 8, 2016, the
Argentine government
issued Decree No.
55/2016, declaring a state of administrative
emergency on the national statistical system and
on the ofﬁcial agency in charge of the system,
the INDEC, until December 31, 2016. The INDEC
implemented methodological
and
adjusted macroeconomic statistics on the basis
of these reforms. On June 29, 2016, the INDEC
published its ﬁrst INDEC Report, including revised
GDP data for the years 2004 through 2015. On
August 31, 2016, the IMF Executive Board met
to consider the progress made by Argentina in
improving the quality of ofﬁcial GDP and CPI data.
The IMF Executive Board noted the important
progress made in strengthening the accuracy of
Argentina’s statistics. On November 10, 2016, the
IMF lifted the existing censure on Argentina. See
“Inﬂation,” below.

• Agreement with holdout creditors. The Macri
administration has reached agreements with
a large majority of holdout creditors (in terms
of claims) and has regained access to the

RISK FACTORS

international ﬁnancial markets for the country.
For more information on these agreements, see
“Sovereign litigation,” below.

• Foreign exchange reforms. In addition, the
current administration eliminated substantially
all foreign exchange restrictions, including certain
currency controls that were imposed under the
Kirchner administration. On August 9, 2016,
through the issuance of Communication “A”
6037, the Central Bank substantially changed the
existing legal framework and eliminated certain
restrictions limiting the access to the MULC (as
deﬁned below). As a result of the elimination of
these restrictions, on December 17, 2015, the
Peso depreciated against the U.S. dollar.

• Foreign trade reforms. The Kirchner and
Fernández de Kirchner administrations imposed
export duties and other restrictions on several
sectors, particularly the agricultural sector. The
Argentine government eliminated export duties
on wheat, corn, beef and regional products,
and reduced the duty on soybeans exports from
35% to 30%. Further, a 5% export duty on most
industrial exports was eliminated. With respect to
payments for imports of goods and services, the
Macri administration eliminatedo the restrictions
on access to the MULC.

• National electricity state of emergency
and reforms. Following years of very limited
investment in the energy sector, as well as the
continued freeze on electricity and natural gas
tariffs since the 2001 2002 economic crisis,
Argentina began to experience energy shortages
in 2011. In response to the growing energy crisis,
the Macri administration declared a state of
emergency with respect to the national electricity
system, which will remain in effect until December
31, 2017. The state of emergency enables the
Government to take actions designed to ensure
the supply of electricity to the country. In addition,
through Resolution No. 6/2016 of the Ministry of
Energy and Mining and Resolution No. 1/2016
of the National Electricity Regulatory Agency
(Ente Nacional Regulador de la Electricidad), the
Macri administration announced the elimination
of a portion of energy subsidies currently in effect
and a substantial increase in electricity rates. As
a result, average electricity prices have already
increased and could increase further. By correcting
tariffs, modifying the regulatory framework and
reducing the Government’s role as an active
market participant, the Macri administration aims
to correct distortions in the energy sector and

stimulate investment. However, certain of the
Government’s initiatives have been challenged
in the Argentine courts and resulted in judicial
injunctions or rulings limiting the Government’s
initiatives.

Tariff increases. With the aim of encouraging
companies to invest and improve the services
they offer and enabling the Government to assist
those in need, the Macri administration has begun
updating the tariffs for electricity, transportation,
gas and water services. Each of the announced
tariff increases contemplates a tarifa social (social
tariff), which is designed to provide support to
vulnerable groups. Subsequent modiﬁcations to
these announced tariff increases were made to
reduce the application of the increases to certain
sectors. On August 18, 2016, the Supreme Court
of Argentina conﬁrmed lower court injunctions
suspending end user gas
increases
sanctioned as of April 1, 2016 and instructed
the Ministry of Energy and Mining to conduct a
non binding public hearing prior to sanctioning
any such increases. On September 16, 2016 the
Ministry of Energy and Mining conducted a non-
binding public hearing. Pursuant to the holding
by the Supreme Court, the Gas Regulatory Entity
(“Enargas”) issued Resolution No. 3960 and 3961
ordering the reestablishment of the prior tariff
scheme as of March 31, 2016, and implemented
an installment regime for the payment of overdue
bills.

tariff

• Tax Amnesty Law: On June 29, 2016, the
Régimen de Sinceramiento Fiscal (Tax Amnesty
Law) was introduced to promote the voluntary
declaration of assets by Argentine residents (the
“Tax Amnesty Law”). The law allows Argentine
tax residents holding undeclared funds or assets
located in Argentina or abroad to (i) declare such
property until March 31, 2017 without facing
prosecution for tax evasion or being required to
pay outstanding tax liabilities on the assets, if
they can provide evidence that the assets were
held by certain speciﬁed cut off dates, and (ii) keep
the declared property outside Argentina and not
repatriate such property to Argentina.

• Retiree Programs: On June 29, 2016, Congress
passed a bill approving the Ley de Reparación
Histórica a los Jubilados (Historical Reparations
Program for Retirees and Pensioners), which took
effect upon its publication in the ofﬁcial gazette.
The main aspects of this program, which is
designed to conform government social security
policies to Supreme Court rulings. The Historical

Reparations Program for Retirees and Pensioners
will give retroactive compensation to retirees in an
aggregate amount of more than Ps. 47.0 billion and
involve expenses of an estimated Ps. 75.0 billion
adjusted per annum, to cover adjusted pensions
going forward for all potential beneﬁciaries.

• Fiscal policy: The Macri administration took steps
to anchor the ﬁscal accounts, reducing the primary
ﬁscal deﬁcit through the cut of some subsidies
and reorganization of certain expenduitures and
the generation of increased revenue through the
tax admisty. The Macri andministratin’s aim is to
achieve a balanced primary budget by 2019.

• Correction of monetary imbalances: The Macri
administration announced the adoption of an
inﬂation targeting regime in parallel with the
ﬂoating exchange rate regime and set inﬂation
targets through 2019. The inﬂation rate target
for 2016 was in the range of 20% to 25%. The
INDEC did not publish annual inﬂation statistics,
because it began to measure prices under its new
methodology in May 2016 with respect to April
2016. However, the Government of the City of
Buenos Aires published that the local increase in
consumer prices for 2016 had been of 41%. The
Central Bank has increased sterilisation efforts to
reduce excess monetary imbalances and reduced
Peso interest rates to offset inﬂationary pressure.
In October 2016 the Central Bank announced its
intention to use the seven-day repo reference
rate as the anchor of its inﬂation targeting
regime beginning in January 2017. Short term
notes issued by the CB (LEBAC) would be used to
manage liquidity.

In January 2017, following the resignation of
Mr. Alfonso Prat Gay as Minister of Treasury
and Public Finance as of December 31, 2016, the
Ministry of Treasury and Public Finances was split
into the Ministry of Treasury and the Ministry of
Public Finances, conducted by Nicolás Dujovne
and Luis Caputo, respectively.

As of the date of this Annual Report, the impact
that these measures and any future measures
taken by the Macri administration will have on the
Argentine economy as a whole and the ﬁnancial
sector in particular cannot be predicted.

parties

Political
the Macri
opposed
administration retained a majority in the Argentine
Congress in the recent elections. This will require
the Macri administration to seek political support
from the opposition for its economic proposals

and creates further uncertainty about the ability of
the Macri administration to pass any law that may
be necessary to implement its intended policies.

quarter of 2016, noting that real GDP contracted
by 2.4% during the nine month period ended
September 30, 2016, compared to a growth of
2.6% during the same period in 2015.

A decline in international demand for Argentine
products, a lack of stability and competitiveness
of the Peso against other currencies, a decline
in conﬁdence among consumers and foreign and
domestic investors, a higher rate of inﬂation and
future political uncertainties, among other factors,
may affect the development of the Argentine
economy, which could lead to reduced demand
for our services and adversely affect our business,
ﬁnancial condition and results of operations.

b. Inﬂation
Argentina has confronted inﬂationary pressures
since 2007, evidenced by signiﬁcantly higher fuel,
energy and food prices, among other indicators.
According to inﬂation data published by the
INDEC, from 2010 to 2014 the Argentine consumer
price index increased by 10.9%, 9.5%, 10.8%,
10.9%, 23.9%, respectively, and increased by
11.9% in the ten month period ended October 31,
2015, after which measurements were temporarily
unavailable.

released an
The Macri administration has
alternative CPI index based on data from the City
of Buenos Aires and the Province of San Luis
while INDEC worked on a new inﬂation index.

Our ﬁnancial condition and results of operations
depend to a signiﬁcant extent on macroeconomic
and political conditions prevailing in Argentina.
Measures adopted by the Argentine government
that impact upon the economy, including those
measures related to monetary policy, inﬂation,
interest rates, price controls, exchange controls and
taxes, have affected and could continue to affect
Argentine companies like ours. Uncertainty about
the possible success or failure of the measures to
be adopted by the new administration could lead
to volatility in the market prices of securities of
Argentine companies, including companies in the
media sector, such as ours. We have also been the
target of legislation passed to regulate the Media
Industry and capital markets, which has also
affected our activities in recent years.

a. Economic Growth
After recovering signiﬁcantly from the 2001 2002
crisis, the pace of growth of Argentina’s economy
diminished, suggesting uncertainty as to whether
the growth experienced between 2003 and 2011
was sustainable. Economic growth was initially
fueled by a signiﬁcant devaluation of the Peso, the
availability of excess production capacity resulting
from a long period of deep recession and high
commodity prices. In spite of the growth following
the 2001 2002 crisis, the economy has suffered a
sustained erosion of direct investment and capital
investment. The global economic crisis of 2008 led
to a sudden economic decline in Argentina during
2009, accompanied by inﬂationary pressures,
depreciation of the Peso and a drop in consumer
and investor conﬁdence.

The Argentine economy has experienced
signiﬁcant volatility
in recent decades, with
periods of low or negative growth, high inﬂation
and currency devaluation. After six years of
sustained economic growth,
the Argentine
economy slowed down in the second half of 2008
and throughout 2009, affected by the international
crisis as well as internal political developments.
According to the revised calculation of the 2004
GDP published by INDEC on June 24, 2016, in
2010 and 2011, GDP grew 10.1% and 6.0%,
respectively and decreased 1.0% in 2012. GDP
grew 2.4% in 2013, contracted 2.5% in 2014 and
grew 2.5% in 2015. Additionally, on December 22,
2016, the INDEC published preliminary estimates
for the level of economic activity during the third

RISK FACTORS

According to the publicly available information
based on data from the City of Buenos Aires, CPI
grew 26.6% in 2013, 38.0% in 2014, 26.9% in
2015, and 39.3% during the eleventh month period
ended November 30, 2016, while according to the
Province of San Luis, CPI grew 31.9% in 2013,
39.0% in 2014, 31.6% in 2015, and 41% in 2016.

On June 15, 2016, the INDEC resumed publishing
inﬂation rates, which had been suspended due
to the state of administrative emergency on the
national statistical system.

(i) undermine

inﬂation may also

In the past, inﬂation has materially undermined
the Argentine economy and Argentina’s ability
to create conditions that would permit growth.
High
the
competitiveness of Argentina’s manufacturing
and service
inter alia,
industries producing,
an increase in unemployment levels and (ii)
negatively impact the country’s long-term credit
markets. There can be no assurance that inﬂation
rates will not continue to escalate in the future or
that the measures adopted or that may be adopted
by the Argentine government to control inﬂation
will be effective or successful. Inﬂation remains a
challenge for Argentina. Signiﬁcant inﬂation could
have a material adverse effect on Argentina’s
economy and in turn could increase our costs of
operation, in particular labor costs and access to
ﬁnancing, and may negatively impact our ﬁnancial
condition and results of operations.

RISK FACTORS

c. Foreign Exchange Controls and

issued

in 2012 subject

Devaluation
During the second half of 2011 and in 2012, the
increased controls on
Argentine government
the incurrence of foreign currency-denominated
indebtedness, and the sale and acquisition
of foreign currency by local residents. New
foreign
regulations
exchange transactions to prior approval by
Argentine tax authorities. Formal and informal
foreign exchange controls continued throughout
until December 2015, practically closing the
foreign exchange market to retail transactions.
Until mid-December 2015, it was widely reported
that the peso/U.S. dollar exchange rate in the
unofﬁcial market and in neighboring markets
where the peso was traded differed substantially
from the ofﬁcial foreign exchange.

In December 2015, the Government introduced
foreign exchange
to
additional ﬂexibility
regulations, allowing the Argentine peso to ﬂoat
freely against other currencies. This resulted in
a devaluation from Ps. 9.83 per U.S. dollar on
December 16, 2015 to Ps.13.01 on December
31, 2015. Since then, the Argentine peso has
continued to ﬂuctuate. On December 31, 2016, the
Argentine peso / U.S. dollar exchange rate was at
Ps. 16.1 per U.S. dollar.

Notwithstanding the measures recently adopted
by
the Macri administration eliminating a
signiﬁcant portion of the foreign exchange
restrictions that developed under the Kirchner
administration,
in the future the Argentine
government or the Central Bank could reintroduce
exchange controls and impose restrictions on
capital transfers, such measures may negatively
affect Argentina’s international competitiveness,
discouraging foreign investments and lending
by foreign investors or increasing foreign capital
outﬂow which could have an adverse effect on
economic activity in Argentina.

Foreign exchange reforms could have a negative
effect on the economy and on private sector
companies, including our business and/or lead
to volatility in the market prices of securities of
Argentine companies.

d. International Trade Restrictions
In 2012, the Argentine government introduced
a procedure pursuant to which local authorities
must pre-approve the import of products and
services to Argentina as a pre-condition to permit
such import and the consequent access to the

foreign exchange market for the payment of the
imported products or services.

social unrest could adversely and materially affect
the economy, and therefore our business, result of
operations and ﬁnancial condition.

The Macri administration has announced that
international trade restrictions shall be gradually
reduced and/or eliminated. Some of
these
measures, such as the elimination export duties
on wheat, corn, beef and regional products, and
the reduction of the duty on soybeans from 35%
to 30% have been already implemented. Further,
a 5% export duty on most industrial exports was
also eliminated. With respect to payments for
imports and services to be performed abroad, the
Government eliminated the restrictions on access
to the MULC.

In the past, increased government control over
foreign trade has resulted in a shortage of inputs
and spare parts and in production disruptions. The
continuation of these shortages may affect the
growth of the economy and, consequently, could
affect our business, ﬁnancial condition and results
of operations. We cannot assure that measures
adopted by the new Government are permanent,
that they will be pursued as announced nor that
new trade restrictions to international commerce
shall be
implemented. Repeated complaints
from other countries against import restrictions
implemented by Argentina, suspension of export
preferences or retaliations by trading partners
may have an adverse effect on Argentine exports,
affect the trade balance and, consequently,
adversely impact Argentina’s economy.

e. Other forms of government

intervention
It is widely reported by private economists that
expropriations, price controls, exchange controls
and other direct involvement by the Argentine
government in the economy, particularly until
December 2015, have had an adverse impact on
the level of investment in Argentina, the access
of Argentine companies to the
international
capital markets and Argentina’s commercial and
diplomatic relations with other countries. Further,
the Argentine government
actions
concerning the economy, including decisions with
respect to interest rates, taxes, price controls,
salary increases, provision of additional employee
beneﬁts foreign exchange controls and potential
changes in the foreign exchange market, have had
and could continue to have a material adverse effect
on Argentina’s economic growth and in turn affect
our ﬁnancial condition and results of operations.
Moreover, any additional Argentine government
policies established to preempt, or in response to,

taken by

f. Vulnerability to external shocks
Weak, ﬂat or negative economic growth of any
of Argentina’s major trading partners, such as
Brazil, could adversely affect Argentina’s balance
of payments and, consequently, economic growth.

The economy of Brazil, Argentina’s largest export
market and the principal source of imports, is
currently experiencing heightened negative
pressure due to the uncertainties stemming
from the ongoing political crisis. The Brazilian
economy contracted by 3.8% during 2015, mainly
due to a 8.3% decrease in industrial production
and an increase in inﬂation and unemployment.
Additionally, the Brazilian currency devalued
against the U.S. dollar by approximately 49.1%
from January 2015 to February 2016, the steepest
depreciation in over a decade, in its attempt
to
increase exports. Although the Brazilian
currency appreciated between March 1, 2016,
and December 31, 2016, a further deterioration of
economic conditions in Brazil may reduce demand
for Argentine exports and increase demand for
Brazilian imports. While the impact of Brazil’s
downturn on Argentina or our operations cannot
be predicted, we cannot exclude the possibility
that the Brazilian political and economic crisis
could have further negative
impact on the
Argentine economy and our operations.

International

The Argentine economy may be affected by
“contagion” effects.
investors’
reactions to events occurring in one developing
country sometimes appear to follow a “contagion”
pattern, in which an entire region or investment
class is disfavored by international investors.
In the past, the Argentine economy has been
adversely affected by such contagion effects on a
number of occasions, including the 1994 Mexican
ﬁnancial crisis, the 1997 Asian ﬁnancial crisis, the
1998 Russian ﬁnancial crisis, the 1999 devaluation
of the Brazilian real, the 2001 collapse of Turkey’s
ﬁxed exchange rate regime and the global ﬁnancial
crisis that began in 2008.

The Argentine economy may also be affected by
conditions in developed economies, such as the
United States, that are signiﬁcant trading partners
of Argentina or have inﬂuence over world economic
cycles. On June 23, 2016, the United Kingdom
voted in favor of the United Kingdom exiting the
European Union (“Brexit”). The effects of the

Brexit vote and the perceptions as to the impact
of the withdrawal of the United Kingdom from the
European Union may adversely affect business
activity and economic and market conditions in the
United Kingdom, the Eurozone and globally, and
could contribute to instability in global ﬁnancial
and
In addition,
Brexit could lead to additional political, legal and
economic instability in the European Union.

foreign exchange markets.

The Argentine economy and securities markets
could be adversely affected by events in developed
countries’ economies or events in other emerging
markets. A slowdown in economic activity in
Argentina would adversely affect our business,
ﬁnancial condition and results of operations.

on the levels of government revenues and the
government’s ability to service its sovereign
debt, and could either generate recessionary
inﬂationary pressures, depending on the
or
government’s reaction. Either of these results
would adversely impact Argentina’s economy
and, therefore, our business, results of operations
and ﬁnancial condition. As of the date of this
offering memorandum, the Macri administration
has eliminated export taxes on many agricultural
products and reduced the export taxes on soy from
35% to 30%. While the measure was intended to
encourage exports, reductions in export taxes in
the future, unless replaced with other sources of
revenues, may negatively impact on the Republic’s
public ﬁnances.

g. Government expenditure
During the last years of the Fernández de Kirchner
administration,
government
increased public expenditure,
substantially
resorting to the Central Bank and to the ANSES to
source part of its funding requirements.

the Argentine

As of the date of this Annual Report, although
the Macri administration is currently reviewing
certain public sector contracts, there is uncertainty
as to what actions the Macri administration will
take with respect to public expenditure and its
ﬁnancing.

If the Macri administration were to seek to ﬁnance
its deﬁcit by increasing the exposure of local
ﬁnancial institutions to the public sector, their
liquidity and assets quality could be affected, with
a potential adverse impact on credit supply, and
therefore on the growth of the Argentine economy
and on our business.

h. Decline in commodity prices
Argentina’s ﬁnancial recovery from the 2001 2002
crisis occurred in a context of price increases for
Argentina’s commodity exports. High commodity
prices contributed to the increase in Argentine
exports since the third quarter of 2002 and
to high government tax revenues from export
withholdings. Consequently,
the Argentine
economy has remained relatively dependent
on the price of its main agricultural products,
primarily soy. This dependence, has rendered the
Argentine economy more vulnerable to commodity
price ﬂuctuations. International commodity prices
decreased during 2015.

A continuing decline in the international prices
of commodities could have a negative impact

i. Perceived institutional deterioration

and corruption
A lack of a solid institutional framework and
corruption have been identiﬁed as, and continue
to be, a signiﬁcant problem for Argentina. In
International’s 2015 Corruption
Transparency
Perceptions
Index survey of 167 countries,
Argentina was ranked 107, the same position that
it held in 2014. In the World Bank’s Doing Business
2016 report, Argentina ranked 121 out of 189
countries, up from 124 in 2015. Recognising that
the failure to address these issues could increase
the risk of political instability, distort decision
making processes and adversely affect Argentina’s
international reputation and ability to attract
investment, the Macri administration
foreign
has announced several measures aimed at
strengthening Argentina’s institutions and reducing
corruption. These measures include the reduction
of criminal sentences in exchange for cooperation
with the Government in corruption investigations,
increased access to public
information, the
seizing of assets from corrupt ofﬁcials, increasing
the powers of the Anticorruption Ofﬁce (Oﬁcina
Anticorrupción) and the passing of a new public
ethics
law, among others. The Government’s
ability to implement these initiatives is uncertain
as it would require the involvement of the
judiciary branch, which is independent, as well as
legislative support from opposition parties. There
can be no assurances that the implementation of
such measures will be successful.

j. Energy Sector Crisis
Economic policies since the 2001 2002 crisis have
had an adverse effect on Argentina’s energy sector.
The failure to reverse the freeze on electricity
and natural gas tariffs imposed during the 2001
2002 economic crisis created a disincentive for

RISK FACTORS

ineffective and operated

investments in the energy sector. Instead, the
Government sought to encourage
investment
by subsidising energy consumption. The policy
further
proved
discourage investment in the energy sector and
caused production of oil and gas and electricity
generation,
to
stagnate while consumption continued to rise.
To address energy shortages starting in 2011,
the Government engaged in increasing imports
of energy, with adverse implications for the trade
balance and the international reserves.

transmission and distribution

In response to the growing energy crisis, the Macri
administration declared a state of emergency with
respect to the national electricity system, which
will be in effect until December 31, 2017. The
Ministry of Energy and Mining issued Resolution
No. 6/16 increasing the electricity tariff as of
February 1, 2016. This Resolution was later
complemented by Resolution No. 7/16 which,
among other things, determined the requirements
needed to be fulﬁlled in order to apply for a social
tariff (“tarifa social”).

As a result, average electricity prices are expected
to increase by 500% or more. By correcting tariffs,
modifying the regulatory framework and reducing
government’s role as an active market participant,
the Macri administration aims
to correct
distortions in the energy sector and stimulate
investment. In June 2016, a federal court in the
city of La Plata suspended the increase in gas
tariffs across the Province of Buenos Aires. In
addition, on August 3, 2016, a federal court in
San Martin suspended the increase in gas tariffs
across the country until a public hearing to discuss
the electricity tariffs increase is set. The case was
brought before the Supreme Court of Argentina,
and on August 18, 2016, the Supreme Court of
Argentina conﬁrmed the suspension of gas tariffs
increase to residential customers. On October 7,
2016, ENARGAS and the Ministry of Energy and
Mining issued a series of resolutions, including
Resolution 212, approving and implementing the
new tariff scheme.

The Macri administration has taken steps and
announced measures to address the energy
sector crisis while taking into consideration the
implications of these price increases for the
poorest segments of society, approving subsidised
tariffs for qualifying users. Failing to address
the negative effects on energy generation,
transportation and distribution in Argentina with
respect to both the residential and industrial

supply, resulting in part from the pricing policies
of the prior administrations, could weaken
conﬁdence in and adversely affect the Argentine
economy and ﬁnancial condition, lead to social
unrest and political instability, and adversely
affect our results of operations. There can be
no assurance that the measures adopted by the
Macri administration to address the energy crisis
will not continue to be challenged in the local
courts and/or be sufﬁcient to restore production
of energy in Argentina within the short or medium
term.

LEGISLATION AND REGULATION OF THE

MEDIA INDUSTRY

a. New Regulatory Framework.
In Argentina, the legal system, including the
Constitution, protects the independence of the
free press. As a media company, we are vigilant
as to the attempts to curtail freedom of speech
and the free press that might arise and widely
cooperate with journalistic associations and other
NGOs that advocate for the protection of these
and other fundamental constitutional rights.

From 2009 until December 2015, the government
conducted an overt policy designed to restrict the
activities of the free press. During 2013, 2014
and most of 2015, private media in general and
Grupo Clarín in particular faced an escalating
level of harassment, involving the use of ofﬁcial
and para-ofﬁcial means and resources with the
clear intention of damaging the private media’s
reputation and directly and indirectly limiting its
journalistic activities.

Since December 2015, the new government
under
the Macri administration has made
announcements in favor of an independent media
and against censorship, passed legislation and
improved communication channels with private
media in general, which evidences major changes
in media related governmental policies.

On December 29, 2015, the National Government
issued Decree No. 267/2015 pursuant to which it
intends, among other things, gradually to converge
the audiovisual media and telecommunications
industries under the same regulatory framework
(the “New Media Decree”). Among other
provisions, the New Media Decree (i) repealed
Section 161 of the Audiovisual Communication
Services Law, which required the ﬁling by the
Company and some of its subsidiaries of a
reorganisation and divestment plan, (ii) amended
the multiple license regime, (iii) amended the

35% limit applicable to total inhabitants for open
services and the 35% total subscription limit for
subscription television services, (iv) eliminated the
restriction to provide open broadcasting television
services and subscription television services in the
same area, (v) expanded services to be provided
and registered by Information and Communication
Technology licensees to include pay broadcasting
service by physical and/or by radio-electric link,
i.e. cable operators such as Cablevisión and its
subsidiaries; and, (vi) provides that telephone
service operators with licenses granted under
Decree No. 62/90 and Sections 5.1 and 5.2 of
Decree No. 264/98 and mobile telephone service
operators with licenses granted under Decree
1461/93 may render pay television services
by means of physical and/or radio-electric link
starting on or after January 1, 2018 (or January 1,
2019, if the waiting period is extended).

The New Media Decree affects the regulatory
frameworks applicable
to both audiovisual
communication services and telecommunication
services. The reversal of any decisions adopted
by the Argentine government pursuant to the
New Media Decree could materially affect the
recoverability of the Company’s relevant assets,
its business, results of operations and ﬁnancial
condition.

b. Other government action relating to

the previous administration

the Company and the media industry.
Other government or para-ofﬁcial actions
against the Company and media in general
under
included:
(i) an exponential increase and discriminatory
allocation of ofﬁcial advertising, (ii) the use of
public funds and media on a discretionary basis
to generate content and shows that display
political propaganda, (iii) an aggressive campaign
to destroy non-partisan media by compromising
their economic sustainability and credibility,
(iv) abuse of bureaucratic controls or controls
by public agencies in the form of administrative
persecutions, groundless arbitrary resolutions,
disproportionate tax controls and recurring audits,
(v) blockades to printing facilities to prevent the
distribution of certain newspapers and magazines,
and (vi) government interference and regulation of
the newsprint industry.

While both the political scenario and the
regulation applicable to the media industry have
changed positively since December 2015, we
cannot assure that actions by the Government
or the new political opposition will not continue.

Increased government action against the Company
could materially affect our business, results of
operations and ﬁnancial condition.

REORGANISATION OF THE COMPANY
On 28 September 2016, the Company held an
Extraordinary Shareholders’ Meeting at which
the shareholders of the Company decided, among
other things, to approve (a) the Board of Directors’
proposal for the partial split-up of the Company
pursuant to the terms of the Prospectus dated as
of 14 September 2016 (the “Prospectus”); (b) the
creation of Cablevisión Holding S.A., (“Cablevisión
Holding”), a new company that would be formed
by the direct (post merger) and indirect share
in Cablevisión S.A. and other
participations
assets, liabilities, rights and obligations that the
shareholders of the Company shall allocate to the
spun off company, and (c) after the registration
of both the split-up and the incorporation of
Cablevisión Holding with the Inspección General
de Justicia de la Ciudad Autónoma de Buenos
Aires, and once authorization has been obtained
for its admission to the public offering regime
and the listing of the Class B and Class C shares
and the trading of its Class B shares on the stock
exchange and/or securities market, the Company
will announce a share distribution date on which
certain class A, class B and class C shares of
the Company will be cancelled, and shares of
Cablevisión Holding will be issued and delivered to
the holders of the cancelled shares in accordance
with the split-ratio announced by the Company.

The proposed spinoff has the following inherent
risks, which were detailed in the Prospectus:

a. the proposed spinoff may affect the price of the
shares of the Company;

b. there may not be a liquid market for the shares
of Cablevisión Holding

c. the historical performance of Cablevisión S.A.
may not be representative of the performance of
Cablevision Holding S.A. as an independent entity

d. Cablevisión Holding S.A. will be a new company
that has never operated independently from the
Company

e. Cablevisión Holding S.A. may face difﬁculties to
ﬁnance its operations and capital investment after
the spinoff, which could have an adverse impact
on its business and its results; and

impossibility of

the difﬁculties or

f.
the
subsidiaries of Cablevisión Holding S.A. to pay
dividends or other distributions may adversely
affect Cablevision Holding S.A. and its ability to
pay dividends to its shareholders.

CAPITAL MARKETS REGULATIONS
On November 29, 2012 Congress passed Capital
Markets Law No. 26,831 (the “Capital Markets
Law”), which became effective on January 28,
2013. The Capital Markets Law provides for a
comprehensive amendment of the public offering
regime, previously governed by Law No. 17,811
and, among other things, enhances the National
Government’s oversight powers over publicly
traded companies.

On July 29, 2013, the National Government issued
Decree No. 1023/2013 to regulate partially the
Capital Markets Law. Among other provisions,
the Decree provides that the CNV may appoint an
overseer with veto rights over the decisions made
by the boards of directors of entities subject to the
public offering regime, or otherwise remove the
boards from such entities for up to 180 days until all
deﬁciencies found by the CNV are solved, without
prior judicial authorisation or control. The Decree
also vests with the CNV the power to appoint
the administrators or co-administrators that will
hold ofﬁce after a board of directors of an issuer
is removed. The Company is of the view that the
Decree amends the Law it seeks to regulate and,
therefore, is not a valid implementing regulation.

The Macri administration has publicly stated that
it intends to present a bill to Congress in 2017,
with substantial amendments to the Capital
Markets Law, including restrictions to the current
powers of the CNV. However, in order to obtain
the majorities necessary to amend the existing
law, the Macri administration depends on the
support of opposition parties.

Direct intervention of our management by the
CNV could materially affect our business, results
of operations and ﬁnancial condition.

SECTOR DEVELOPMENT AND

COMPETITION
resources
The Company devotes signiﬁcant
to analyzing emerging trends and has vast
experience and a solid track record in reading
consumer demands and successfully developing
new products and services, adapting its business
model in time.

RISK FACTORS

our ability to make payments on our debt on a
timely basis.

in an active

liability
We have engaged
management policy, and improved our debt to
free cashﬂow ratio to limit our need to access
the market as a means of repayment of our
ﬁnancial obligations.

Certain of our costs, including a signiﬁcant
portion of our ﬁnancial expenses, are dollar
denominated. Currency ﬂuctuations, such as a
considerable devaluation of the Peso against
the U.S. dollar are likely to affect adversely the
Argentine economy and will impact negatively
on our ﬁnancial condition.

Among other provisions, the New Media Decree
provides that telephone service operators with
licenses granted under Decree No. 62/90 and
Sections 5.1 and 5.2 of Decree No. 264/98 and
mobile telephone service operators with licenses
granted under Decree 1461/93 may provide pay
television services by means of physical and/or
radio-electric link starting on or after January 1,
2018 (or January 1, 2019, if the waiting period
is extended). By means of decree No. 1340/16,
the Argentine Government conﬁrmed that ﬁxed
and mobile telephony companies could register
as providers of pay television services and could
start rendering such services in highly populated
areas as from January 1, 2018 without extension
of the waiting period. The entry of the large
ﬁxed and mobile telephony providers into the
cable television market will lead to increased
competition in that market, which may result in
an increase in subscriber churn and adversely
affect the Cable Television, Internet Access and
Telephony Services segment.

In addition, the media
industry and certain
maturing markets to which our services are
catered, are dynamic and constantly undergo
signiﬁcant developments at a pace that may
differ from our current expectations affecting
our growth. Increased competition through new
technological developments may adversely affect
our business if our analysis of industry trends is
not accurate or if we are not able to adapt readily
our operations.

PROGRAMMING AND PERSONNEL
We may not be able to renew our rights to certain
programming and our results of operations may be
adversely affected by the loss of key personnel.

The production of content is part of our strategy
and we dedicate signiﬁcant resources to the
identiﬁcation of market trends and new ﬁgures
and matters of public interest, to preserve the
position of leadership we have acquired in the
market.

is denominated

LIQUIDITY AND FUNDING
We have ﬁnancial debt outstanding, a signiﬁcant
portion of which
in foreign
currency. Financial markets remain practically
closed for Argentine companies, and we must rely
primarily on our cash ﬂow generation to service
our debt. While we have been able to access
the ofﬁcial foreign exchange market to make
debt payments to date, we cannot exclude that
foreign exchange controls could adversely affect

BUSINESS
PROJECTIONS AND
PLANNING

BUSINESS PROJECTIONS AND PLANNING

Grupo Clarín seeks to maintain and consolidate
its presence in the local and regional markets,
focusing on the production of quality contents
both in the traditional media and in new digital
media.

All of the Group’s business units will strive to
seize opportunities, seeking to reinforce, improve
and expand the range of products and services
increase market share; reach new
offered;
audiences and promote permanent innovations in
all of its activities.

Grupo Clarín will continue to optimize even more
the productivity and efﬁciency levels in all of its
areas and companies. It will seek to develop and
apply best practices in each of its processes.

At a corporate level, it will continue to focus on the
main processes that allow sustainable, healthy
and efﬁcient growth from different perspectives:
ﬁnancial structure, management control, business
innovation and
resources,
strategy, human
corporate social responsibility. Grupo Clarín will
continue to analyze alternative new ventures
related to its mission and strategic objectives both
in Argentina and abroad, as long as they add value
to shareholders and are feasible and viable under
the prevailing economic environment.

Grupo Clarín remains committed to traditional
media, but with a growing focus on digital media,
which are one of the largest strategic stakes of
the Company. To this end, it will rely on the value
and prestige of its brands, which have the largest
rates of credibility and acceptance. The Company
will use its broad experience in the creation of
contents, recognized worldwide -especially in the
Spanish-speaking world-, to boost the success of
its new platforms.

The spin-off plans seek to deepen the specialization
of each of the organizations. In this way, each
company will be able to adjust even further its
strategic, ﬁnancial and operational focus with
the global demands of each of these markets,
allowing them to enhance their competitiveness.
The new structure will allow the Company to
strengthen two teams of management highly
focused on reaching the potential of its respective
businesses, and will have capital structures more
suited to their needs.

Grupo Clarín renews its sustained commitment
to regulatory compliance, its readers, audiences
and the country. In its daily work, Grupo Clarín
seeks to assume with strength and responsibility
the role that the media are called to play through
independent journalism and through the defense
and promotion of universal and fundamental
rights, such as freedom of speech, because these
are pillars that extol the quality of democracy and
the welfare of Argentine society as a whole.

FINANCIAL
STATEMENTS AS
OF DECEMBER 31,
2016

Glossary of Selected Terms

77
78

CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Statement of Comprehensive Income

Consolidated Balance Sheet

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

Notes to the Consolidated Financial Statements

183

SUPPLEMENTARY FINANCIAL INFORMATION

192

INDEPENDENT AUDITOR’S REPORT

195
196

197

198

200

202

272

PARENT COMPANY ONLY FINANCIAL STATEMENTS
Parent Company only Statement of Comprehensive Income

Parent Company only Balance Sheet

Parent Company only Statement of Changes in Equity

Parent Company only Statements of Cash Flows

Notes to the Parent Company only Financial Statements

Additional Information to the Notes to the Financial

Statements - Section No. 68 of the Regulations issued

by the Buenos Aires Stock Exchange and Section No. 12

Title IV Chapter III of General Resolution No. 622/13 of

the Argentine Securities Commission

274

INDEPENDENT AUDITOR’S REPORT

276

SUPERVISORY COMMITTEE’S REPORT

ADIRA Association of Provincial Newspapers of the
Republic of Argentina
AEDBA Association of Newspaper Publishers of the City
of Buenos Aires
AFA Asociación del Fútbol Argentino (Argentine Football
Association)
AFIP Administración Federal de Ingresos Públicos
(Argentine Federal Revenue Service)
AFSCA Autoridad Federal de Servicios de Comunicación
Audiovisual (Audiovisual Communication Services Law
Federal Enforcement Authority)
AGEA Arte Gráfico Editorial Argentino S.A.
AGR Artes Gráficas Rioplatense S.A.
ANA Administración Nacional de Aduanas (National
Customs Administration)
APE Acuerdo preventivo extrajudicial (pre-packaged
insolvency plan)
ARPA Association of Argentine Private Broadcasters
ARTEAR Arte Radiotelevisivo Argentino S.A.
Auto Sports Auto Sports S.A. (now Carburando S.A.)
Bariloche TV Bariloche TV S.A.
BCBA Bolsa de Comercio de Buenos Aires (Buenos Aires
Stock Exchange).
Cablevisión Cablevisión S.A.
Canal Rural Canal Rural Satelital S.A.
CER Coeficiente de Estabilización de Referencia
(Reference Stabilization Coefficient, a consumer price
inflation coefficient)
CIMECO Compañía Inversora en Medios de
Comunicación (CIMECO) S.A.
CLC Compañía Latinoamericana de Cable S.A.
CMD Compañía de Medios Digitales (CMD) S.A.
(former PRIMA Internacional)
CMI Comercializadora de Medios del Interior S.A.
CNDC Comisión Nacional de Defensa de la
Competencia (National Antitrust Commission);
CNV Comisión Nacional de Valores (Argentine
Securities Commission)
CPCECABA Consejo Profesional de Ciencias
Económicas de la Ciudad Autónoma de Buenos Aires
(Professional Council in Economic Sciences of the City
of Buenos Aires)
COMFER Comité Federal de Radiodifusión (Federal
Broadcasting Committee)
CSJN Supreme Court of Argentina
CUSPIDE Cúspide Libros S.A.
CVB CV B Holding S.A.
Dinero Mail Dinero Mail LLC
Adjusted EBITDA Revenues less cost of sales and selling
and administrative expenses (excluding depreciation and
amortization). Additionally, the segment "Cable
Television, Internet Access and Telephony Services"
includes adjustments related to the recognition of
revenues from installation services and transactions
including separate items and the non-consolidation of
special purpose entities.
Editorial Atlántida Editorial Atlántida S.A.
FACPCE Federación Argentina de Consejos Profesionales
de Ciencias Económicas (Argentine Federation of
Professional Councils in Economic Sciences)
FADRA Fundación de Automovilismo Deportivo de la
República Argentina (Argentine Motor Racing
Foundation)
Fintech Fintech Advisory, Inc. together with its affiliates

GCGC GC Gestión Compartida S.A.
GCSA Investments GCSA Investments, LLC
GC Minor GC Minor S.A.
GC Services Grupo Clarín Services, LLC
GDS Global Depositary Shares
Grupo Carburando Carburando S.A.P.I.C.A.F.I., Mundo
Show S.A. and Mundo Show TV S.A.
Grupo Clarín, or the Company Grupo Clarín S.A.
Grupo Radio Noticias Grupo Radio Noticias S.R.L.
Holding Teledigital Holding Teledigital Cable S.A.
IASB International Accounting Standards Board
Ideas del Sur Ideas del Sur S.A.
IESA Inversora de Eventos S.A.
IFRIC International Financial Reporting Interpretations
Committee
IFRS International Financial Reporting Standards
IGJ Inspección General de Justicia (Argentine
Superintendency of Legal Entities)
Impripost Impripost Tecnologías S.A.
VAT Value Added Tax
La Razón Editorial La Razón S.A.
La Capital Cable La Capital Cable S.A.
Antitrust Law Law No. 25,156, as amended
Broadcasting Law Law No. 22,285 and its regulations
Audiovisual Communication Services Law Law No.
26,522 and its regulations
LSE London Stock Exchange
Multicanal Multicanal S.A.
IAS International Accounting Standards
NCP ARG Argentine Professional Accounting Standards,
except for Technical Resolutions No. 26 and 29 which
adopt IFRS.
OSA Oportunidades S.A.
Papel Prensa Papel Prensa S.A.I.C.F. y de M.
Patagonik Patagonik Film Group S.A.
Pol-Ka Pol-Ka Producciones S.A.
PRIMA Primera Red Interactiva de Medios Argentinos
(PRIMA) S.A.
PRIMA Internacional Primera Red Interactiva de Medios
Americanos (PRIMA) Internacional S.A. (now CMD)
NEXTEL NEXTEL Communications Argentina S.R.L.
Radio Mitre Radio Mitre S.A.
SCI Secretaría de Comercio Interior (Secretariat of
Domestic Trade)
SECOM Secretaría de Comunicaciones (Argentine
Secretariat of Communications)
SHOSA Southtel Holdings S.A.
SMC Secretaría de Medios de Comunicación (Media
Secretariat)
Supercanal Supercanal Holding S.A.
TATC Tres Arroyos Televisora Color S.A.
TCM TC Marketing S.A.
Telba Teledifusora Bahiense S.A.
Telecor Telecor S.A.C.I.
Teledigital Teledigital Cable S.A.
TFN Tribunal Fiscal de la Nación (National Tax Court)
Tinta Fresca Tinta Fresca Ediciones S.A.
TPO Televisora Privada del Oeste S.A.
TRISA Tele Red Imagen S.A.
TSC Televisión Satelital Codificada S.A.
TSMA Teledifusora San Miguel Arcángel S.A.
UNIR Unir S.A.
Vistone Vistone S.A.
VLG VLG Argentina, LLC

Glossary of
Selected Terms

Consolidated Financial
Statements as of
December 31, 2016
Presented on a
comparative basis

Grupo Clarín S.A.

Consolidated Financial Statements
as of December 31, 2016
Presented on a comparative basis

In Argentine Pesos (Ps.) – Notes 2.1 and 2.12
to the consolidated financial statements and
Notes 2.1 and 2.8 to the parent company only
financial statements.

Registered office:
Piedras 1743,
Buenos Aires, Argentina

Main corporate business:
Investing and financing

Date of incorporation:
July 16, 1999

Date of registration with the
Public Registry of Commerce:
- Of the by-laws: August 30, 1999
- Of the latest amendment: October 10, 2007

Registration number with the IGJ:
1,669,733

Expiration of articles of incorporation:
August 29, 2098

Information on Parent company:
Name: GC Dominio S.A.
Registered office: Piedras 1743,
Buenos Aires, Argentina

Information on the subsidiaries in Note 2.4
to the consolidated financial statements
and Note 4.3 to the parent company only
financial statements.

Capital structure

Type

Number of votes

Subscribed, registered

per share

and paid-in capital

Class “A” Common shares, with nominal value of Ps. 1
Class “B” Common shares, with nominal value of Ps. 1

Class “C” Common shares, with nominal value of Ps. 1

5
1

Total as of December 31, 2016

Total as of December 31, 2015

75,980,304
186,281,411

25,156,869

287,418,584

Signed for identification purposes
with the report dated March 10, 2017

See our report dated March 10, 2017
Price Waterhouse & Co. S.R.L.
C.P.C.E.C.A.B.A. VOL. 1 - FOL. 17

Carlos Alberto Pedro Di Candia
Chairman of the Supervisory Committee

Dr. Carlos A. Pace (Partner)
Certified Public Accountant (UBA)
C.P.C.E.C.A.B.A. VOL. 150 - FOL. 106

Alejandro A. Urricelqui
Vice Chairman and acting Chairman

Consolidated
Statement of
Comprehensive
Income

For the years ended
December 31, 2016 and 2015
In Argentine Pesos (Ps.)

Notes

December 31, 2016

December 31, 2015

Revenues
Cost of Sales (1)
Subtotal - Gross Profit

Selling Expenses (1)
Administrative Expenses (1)
Other Income and Expenses, net

Financial Costs

Other Financial Results, net

Financial Results

6.1

6.2

6.3

6.6

6.4

6.5

Equity in Earnings from Affiliates and Subsidiaries

5.4

Income before Income Tax and Tax on Assets

Income Tax and Tax on Assets

Income for the period from continuing operations

Discontinued Operations

Net Income from Discontinued Operations

11,378,887,347

(7,003,551,922)

4,375,335,425

(1,728,968,802)

(1,864,144,211)

55,465,753

(267,623,007)

(130,553,073)

(398,176,080)

48,725,499

488,237,584

(264,157,883)

224,079,701

8,291,992,388

(4,926,694,896)

3,365,297,492

(1,202,643,174)

(1,228,754,283)

98,222,054

(150,123,485)

19,155,581

(130,967,904)

61,298,581

962,452,766

(354,574,614)

607,878,152

3,955,531,485

2,308,032,329

Net Income for the Year

4,179,611,186

2,915,910,481

Other Comprehensive Income

Items which may be reclassified to net income

Variation in Translation Differences of Foreign Operations

from Continuing Operations

8,803,638

19,342,907

Variation in Translation Differences of Foreign Operations

from Discontinued Operations

Other Comprehensive Income for the Year

422,449,177

431,252,815

146,569,000

165,911,907

Total Comprehensive Income for the Year

4,610,864,001

3,081,822,388

Profit Attributable to:

Shareholders of the Parent Company

Non-Controlling Interests

Total Comprehensive Income Attributable to:

Shareholders of the Parent Company

Non-Controlling Interests

Basic and Diluted Earnings per Share from

Continuing Operations

Basic and Diluted Earnings per Share from

Discontinued Operations
Basic and Diluted Earnings per Share - Total

2,530,041,832

1,649,569,354

2,748,667,739

1,862,196,262

0.82

7.98
8.80

1,884,929,369

1,030,981,112

2,003,372,380

1,078,450,008

2.02

4.54
6.56

(1) Includes amortization of intangible assets and film library,
and depreciation of property, plant and equipment in the amount
of Ps. 183,484,509 and Ps. 132,219,465 for the years ended
December 31, 2016 and 2015, respectively.

The notes are an integral part of these consolidated financial statements.

Signed for identification purposes
with the report dated March 10, 2017

See our report dated March 10, 2017
Price Waterhouse & Co. S.R.L.
C.P.C.E.C.A.B.A. VOL. 1 - FOL. 17

Carlos Alberto Pedro Di Candia
Chairman of the Supervisory Committee

Dr. Carlos A. Pace (Partner)
Certified Public Accountant (UBA)
C.P.C.E.C.A.B.A. VOL. 150 - FOL. 106

Alejandro A. Urricelqui
Vice Chairman and acting Chairman

Consolidated
Balance Sheet

As of December 31, 2016
and 2015
In Argentine Pesos (Ps.)

Notes

December 31, 2016

December 31, 2015

Assets
Non-Current Assets
Property, Plant and Equipment
Intangible Assets
Goodwill
Deferred Tax Assets
Investment in Unconsolidated Affiliates
Other Investments
Inventories
Other Assets
Other Receivables
Trade Receivables
Total Non-Current Assets

Current Assets
Inventories
Other Assets
Other Receivables
Trade Receivables
Other Investments
Cash and Banks
Total Current Assets

Assets Held for Distribution to Shareholders
Total Assets

Equity (as per the corresponding statement)
Attributable to Shareholders of the Parent Company
Shareholders’ Contributions
Other Items
Accumulated Income
Total Attributable to Shareholders of the Parent Company

Attributable to Non-Controlling Interests
Total Shareholders’ Equity

Liabilities
Non-Current Liabilities
Provisions and Other
Debt
Deferred Tax Liabilities
Taxes Payable
Other Liabilities
Trade Payables and Other
Total Non-Current Liabilities

Current Liabilities
Debt
Seller Financings
Taxes Payable
Other Liabilities
Trade Payables and Other
Total Current Liabilities

Liabilities Held for Distribution to Shareholders
Total Liabilities

5.1
5.2
5.3
7
5.4
5.5
5.6
5.7
5.8
5.9

5.6
5.7
5.8
5.9
5.5
5.10

5.11
5.12
7
5.14
5.15
5.16

5.12
5.13
5.14
5.15
5.16

780,775,774
221,713,090
270,923,529
532,896,812
368,314,257
7,412,878
15,805,039
2,122,552
159,206,993
99,857,137
2,459,028,061

901,013,829
11,838,743
486,550,805
3,582,782,739
328,346,695
416,006,084
5,726,538,895

28,082,220,838
36,267,787,794

2,010,638,503
755,638,189
6,860,110,364
9,626,387,056

4,416,373,963
14,042,761,019

228,252,293
469,172,621
209,849
59,188,405
61,662,068
27,347,968
845,833,204

339,731,089
14,256,467
296,868,894
508,464,913
2,958,209,807
4,117,531,170

17,261,662,401
22,225,026,775

9,026,866,357
258,146,566
2,907,928,844
374,890,670
1,721,354,821
458,789,781
23,626,229
2,627,301
1,389,317,682
82,905,052
16,246,453,303

490,692,852
11,456,124
949,442,104
3,790,626,735
1,186,552,013
2,025,780,934
8,454,550,762

-
24,701,004,065

2,010,638,503
592,243,638
4,630,068,532
7,232,950,673

3,175,288,997
10,408,239,670

432,475,314
4,033,351,896
-
90,524,218
142,185,237
19,557,018
4,718,093,683

2,901,737,366
1,874,191
1,152,994,701
465,161,856
5,052,902,598
9,574,670,712

-
14,292,764,395

Total Equity and Liabilities

36,267,787,794

24,701,004,065

The notes are an integral part of these consolidated financial statements.
Signed for identification purposes
with the report dated March 10, 2017

See our report dated March 10, 2017
Price Waterhouse & Co. S.R.L.
C.P.C.E.C.A.B.A. VOL. 1 - FOL. 17

Carlos Alberto Pedro Di Candia
Chairman of the Supervisory Committee

Dr. Carlos A. Pace (Partner)
Certified Public Accountant (UBA)
C.P.C.E.C.A.B.A. VOL. 150 - FOL. 106

Alejandro A. Urricelqui
Vice Chairman and acting Chairman

Consolidated
Statement
of Changes in Equity

For the years ended
December 31, 2016 and 2015
In Argentine Pesos (Ps.)

Shareholders’ Contributions

Inflation

Adjustment on

Additional

Capital Stock

Paid-in Capital

Subtotal

Balances as of January 1st 2015

287,418,584

309,885,253

1,413,334,666

2,010,638,503

Set-up of reserves

Dividend Distribution

Dividends and Other Movements

of Non-Controlling Interest

Changes in Reserves for

Acquisition of Investments

Net Income for the Year

Other Comprehensive Income:

Variation in Translation Differences

of Foreign Operations

Balances as of December 31, 2015

287,418,584

309,885,253

1,413,334,666

2,010,638,503

Set-up of Reserves (Note 14)

Dividend Distribution

Dividends and Other Movements

of Non-Controlling Interest

Changes in Reserves for

Acquisition of Investments

Net Income for the Year

Other Comprehensive Income:

Variation in Translation Differences

of Foreign Operations

Balances as of December 31, 2016

287,418,584

309,885,253

1,413,334,666

2,010,638,503

(1) Broken down as follows: (i) Optional reserve for future dividends
of Ps. 1,884,929,369; (ii) Judicial reserve for future dividend distribution
of Ps. 387,028,756, (iii) Optional reserve for illiquidity of results of
Ps. 694,371,899, and (iv) Optional reserve to provide financial aid to
subsidiaries and in connection with the Audiovisual Communication
Services Law of Ps. 1,244,277,741.

The notes are an integral part of these consolidated financial statements.

(

Translation

of Foreign

Operations

Other Items

Other

Reserves

Equity attributable to Shareholders of the Parent Company

Accumulated Income

Equity

Legal

Reserve

(1) Optional
reserves

Retained

Earnings

Total Equity

Attributable to

of Controlling

Non-Controlling

Interests

Total Equity

477,454,394

(209,686)

119,460,767

2,071,576,709

804,101,687

5,483,022,374

2,282,464,286

7,765,486,660

118,443,011

595,897,405

218,625,907

(3,444,081)

554,101,687

(554,101,687)

(250,000,000)

(185,625,297)

(3,444,081)

1,884,929,369

1,030,981,112

2,915,910,481

118,443,011

47,468,896

165,911,907

(3,653,767)

119,460,767

2,625,678,396

1,884,929,369

7,232,950,673

3,175,288,997

10,408,239,670

1,584,929,369

(1,584,929,369)

(300,000,000)

(55,231,356)

(621,111,296)

(55,231,356)

2,530,041,832

1,649,569,354

4,179,611,186

218,625,907

212,626,908

431,252,815

814,523,312

(58,885,123)

119,460,767

4,210,607,765

2,530,041,832

9,626,387,056

4,416,373,963

14,042,761,019

Signed for identification purposes
with the report dated March 10, 2017

See our report dated March 10, 2017
Price Waterhouse & Co. S.R.L.
C.P.C.E.C.A.B.A. VOL. 1 - FOL. 17

Carlos Alberto Pedro Di Candia
Chairman of the Supervisory Committee

Dr. Carlos A. Pace (Partner)
Certified Public Accountant (UBA)
C.P.C.E.C.A.B.A. VOL. 150 - FOL. 106

Alejandro A. Urricelqui
Vice Chairman and acting Chairman

Consolidated
Statement
of Cash Flows

For the years ended
December 31, 2016 and 2015
In Argentine Pesos (Ps.)

Cash provided by Operating Activities

Net Income for the Year

Income Tax and Tax on Assets

Accrued Interest, net

Adjustments to reconcile net income for the year

to cash provided by operating activities:

- Depreciation of Property, Plant and Equipment

- Amortization of Intangible Assets and Film Library

- Net allowances

- Financial Income, except interest

- Equity in Earnings from Affiliates and Subsidiaries

- Other Income and Expenses

- Net Income from Discontinued Operations

Changes in Assets and Liabilities:

- Trade Receivables

- Other Receivables

- Inventories

- Other Assets

- Trade Payables and Other

- Taxes Payable

- Other Liabilities

- Provisions

Income Tax and Tax on Assets Payments

Net Cash Flows Provided by Discontinued Operating Activities

December 31, 2016

December 31, 2015

4,179,611,186

2,915,910,481

264,157,883

183,031,249

354,574,614

138,146,998

118,227,554

65,256,955

159,793,058

(68,031,076)

(48,725,499)

(11,052,911)

(3,955,531,485)

(983,842,991)

(63,198,167)

(414,465,667)

(631,805)

442,781,306

(39,095,491)

221,036,747

(67,620,230)

(446,226,374)

9,967,706,300

85,290,931

46,928,534

82,658,340

(243,855,707)

(61,298,581)

11,377,021

(2,308,032,329)

(640,769,704)

(108,973,297)

(202,683,352)

(3,623,522)

573,251,146

(54,440,597)

67,334,101

(41,651,137)

(218,835,839)

6,236,946,107

Net Cash Flows Provided by Operating Activities

9,503,180,542

6,605,500,166

See our report dated March 10, 2017
Price Waterhouse & Co. S.R.L.
C.P.C.E.C.A.B.A. VOL. 1 - FOL. 17

Dr. Carlos A. Pace (Partner)
Certified Public Accountant (UBA)
C.P.C.E.C.A.B.A. VOL. 150 - FOL. 106

Cash provided by Investment Activities

- Acquisition of Property, Plant and Equipment, net

- Acquisition of Intangible Assets

- Payments for Acquisition of Subsidiaries,

- Net of Cash Acquired and Contributions in Associates

- Proceeds from Sale of Property, Plant and Equipment

- Dividends collected

- Transactions with Securities, Bonds and

Other Financial Instruments, Net

- Collections of Certificates of Deposit

- Net Cash Flows used in Discontinued Investment Activities

Net Cash Flows used in Investment Activities

Cash provided by Financing Activities

- Loans Obtained

- Repayment of Loans and Issue Expenses

- Payment of Interest

- Collections (Settlement) on Derivatives

- Payment of Dividends

- Payments to Non-Controlling Interests, net

- Net Cash Flows used in Discontinued Financing Activities

Net Cash Flows used in Financing Activities

December 31, 2016

December 31, 2015

(311,359,194)

(144,909,009)

(17,992,376)

36,987,689

35,625,464

15,722,985

10,199,505

(11,042,912,576)

(11,418,637,512)

1,232,757,451

(755,903,702)

(177,912,086)

59,303,370

(300,000,000)

(14,501,085)

(532,001,955)

(488,258,007)

(133,952,733)

(78,124,630)

(18,098,189)

15,193,293

44,409,345

110,024,900

39,873,227

(5,586,586,087)

(5,607,260,874)

255,509,948

(315,283,610)

(92,296,911)

7,996,820

(250,000,000)

(12,060,149)

(479,333,226)

(885,467,128)

Financing Results generated by Cash and Cash Equivalents

for Continuing Operations

89,775,694

93,506,077

Financing Results generated by Cash and Cash Equivalents

for Discontinued Operations

905,840,410

754,306,411

Financing Results generated by Cash and Cash Equivalents

995,616,104

847,812,488

(Decrease) / Increase in cash flow, net

Cash and Cash Equivalents

at the Beginning of the Year (Note 2.25)

Effect of Consolidation of Companies

Cash and Cash Equivalents

at the Closing of the Year (Note 2.25)

(1,408,098,873)

960,584,652

2,705,563,078

2,053,223,080

1,717,383,640

27,594,786

3,350,687,285

2,705,563,078

The notes are an integral part of these consolidated financial statements.

Signed for identification purposes
with the report dated March 10, 2017

See our report dated March 10, 2017
Price Waterhouse & Co. S.R.L.
C.P.C.E.C.A.B.A. VOL. 1 - FOL. 17

Carlos Alberto Pedro Di Candia
Chairman of the Supervisory Committee

Dr. Carlos A. Pace (Partner)
Certified Public Accountant (UBA)
C.P.C.E.C.A.B.A. VOL. 150 - FOL. 106

Alejandro A. Urricelqui
Vice Chairman and acting Chairman

Note 1

General Information
Grupo Clarín is a holding company that
operates in the Media industry. Its operating
income and cash flows derive from the
operations of its subsidiaries in which it
participates directly or indirectly.

Its operations include cable television, Internet
access and telephony services, newspaper and
other printing, publishing and advertising
activities, broadcast television, radio operations
and television content production, on-line
and new media services, and other media related
activities. A substantial portion of its revenues
is generated in Argentina. Through its
subsidiaries, it is engaged primarily in the
following business segments:

− Cable Television, Internet Access and
Telephony Services, consisting of the largest
cable network in Latin America in terms of
subscribers, operated by its subsidiary
Cablevisión (surviving company after its
merger with Multicanal and Teledigital), with
operations in Argentina and neighboring
countries. This company also provides high-
speed Internet access under the brands
Fibertel and Flash.

− Printing and Publishing, consisting of
national and regional newspapers, a sports daily,
magazine publishing, editing and distribution,
and commercial printing. Diario Clarín, the
flagship national newspaper, is the newspaper
with the second largest circulation in the
Spanish-speaking world. The sports daily Olé
is the only newspaper of its kind in the
Argentine market. The newspaper La Razón is
the first ever free newspaper in Argentina.
The children’s magazine Genios is the children’s
magazine with the highest circulation in
Argentina. AGR is its printing company.

− Broadcasting and Programming, consisting
of Canal 13, one of the two broadcast television
stations with the highest audience share in
Argentina, AM (Amplitude Modulation) /FM
(Frequency Modulation) radio broadcast
stations (Radio Mitre and La 100), and the
production of television, film and radio
programming content, including cable television
signals and organization and broadcasting of
sporting events.

− Digital Content and Other, consisting
mainly of digital and Internet content,
on-line classified ads and horizontal portals
as well as its subsidiary GCGC, its shared
service center.

Note 25 to these Consolidated Financial
Statements describes the current merger-spin-off
process of the Company and certain subsidiaries.

These consolidated financial statements
present the financial position, the results of
operations, the changes in equity and cash
flows corresponding to the balances to be spun
off to the new company, as provided under
IFRS. See Notes 2.24 and 13.

Note 2

Basis for the preparation and presentation

of the consolidated financial statements

2.1 Basis for the preparation
Pursuant to General Resolution No. 562
issued on December 29, 2009, entitled
“Adoption of International Financial Reporting
Standards” and General Resolution No.
576/10, the CNV provided for the application
of Technical Resolutions No. 26 and 29
issued by the Argentine Federation of
Professional Councils of Economic Sciences
(FACPCE, for its Spanish acronym). Since the
Company is subject to the public offering
regime governed by Law No. 26,831, it is
required to apply such standards as from the
year beginning January 1st, 2012. The
FACPCE issues Adoption Communications
in order to implement IASB resolutions
in Argentina.

These consolidated financial statements of
Grupo Clarín for the year ended December 31,
2016, presented on a comparative basis, have
been prepared in accordance with IFRS.
Certain additional matters were included as
required by the Argentine Business Associations
Law and/or CNV regulations, including
the supplementary information provided under
the last paragraph of Section 1, Chapter III,
Title IV of General Resolution No. 622/13.
That information is included in the Notes to
these consolidated financial statements, as
provided under IFRS and CNV rules.

Notes to the
Consolidated
Financial Statements

For the year ended
December 31, 2016
Presented on a comparative basis.
In Argentine Pesos (Ps.)

These consolidated financial statements have
been prepared based on historical cost except for
the valuation of financial instruments (see Note
2.21). In general, the historical cost is based
on the fair value of the consideration granted in
exchange for the assets.

IAS 29 “Financial Reporting in Hyperinflationary
Economies” (“IAS 29”) requires that the
financial statements of an entity that reports in
the currency of a hyperinflationary economy
be stated in terms of the measuring unit current
at the balance sheet closing date of the reporting
period and details a series of factors that may
indicate that an economy is hyperinflationary.
Based on the guidelines of IAS 29, there is not
enough evidence to conclude that Argentina
was a hyperinflationary economy in 2016 and,
therefore, the Company did not apply the
restatement criteria to the financial information
for the years reported as established under IAS 29.

Certain figures reported in the financial
statements presented on a comparative basis
were reclassified in order to maintain the
consistency in the disclosure of the figures
corresponding to this year.

The attached consolidated information,
approved by the Board of Directors in the
meeting held on March 10, 2017, is presented
in Argentine Pesos (Ps.), the Argentine legal
tender, and arises from accounting records kept
by Grupo Clarín S.A. and its subsidiaries.

2.2 Standards and Interpretations issued but not

adopted to date
The Company has not adopted IFRS or
revisions of IFRS issued as per the detail below,
since their application is not required for the
year ended December 31, 2016:

- IFRS 9 Financial Instruments: issued in
November 2009 and amended in October
2010 and July 2014. IFRS 9 introduces new
requirements for the classification and
measurement of financial assets and liabilities
and for their derecognition. This standard
is applicable to years beginning on or after
January 1st, 2018.

additional information to be disclosed by
the Company in the financial statements.
It provides a single, principles based five-step
model to be applied to all contracts with
customers.

- IFRS 16 "Leases": issued in January 2016 and
applicable to fiscal years beginning on or after
January 1, 2019. It sets out the principles for
the recognition, measurement, presentation and
disclosure of leases.

As of the date of these financial statements, the
Company cannot estimate its quantitative
impact because it is analyzing the corresponding
accounting effects.

2.3. Standards and Interpretations issued and
adopted to date
As of the date of these consolidated financial
statements, no new regulations have been
issued that may be applicable to the Company
for this year.

2.4 Basis for Consolidation
These consolidated financial statements
incorporate the financial statements of the
Company and of the subsidiaries and joint
ventures (“Interests in Joint Operations”, Note
2.7) controlled by the Company. Control
is presumed to exist when the Company has a
right to variable returns from its interest in
a subsidiary and has the ability to affect those
returns through its power over the subsidiary.
This power is presumed to exist when
evidenced by the votes, be it that the Company
has the majority of voting rights or potential
rights currently exercised. The subsidiaries are
consolidated from the date on which the
Company assumes control over them and are
excluded from consolidation on the date
control ceases. Additionally, these consolidated
financial statements incorporate the companies
mentioned in 2.4.1.

For consolidation purposes, the intercompany
transactions and the balances between the
Company and the consolidated companies have
been eliminated. Unrealized income has also
been eliminated.

- IFRS 15 “Revenue from contracts with
customers”: issued in May 2014 and applicable
to fiscal years beginning on or after January 1,
2018. This standard specifies how and when
revenue will be recognized, as well as the

Below is a detail of the most relevant
consolidated subsidiaries, together with the
interest percentages held directly or indirectly
in each subsidiary’s capital stock and votes,
as of each date indicated below:

Companies

Cablevisión (1) (3)
NEXTEL (3)
PRIMA (3)
AGEA
AGR
CIMECO
ARTEAR (2)
Pol-Ka
IESA
Radio Mitre
GCGC
CMD
GC Services
GCSA Investments

(1) Includes Multicanal and Teledigital, which were
merged into Cablevisión effective as of October 1, 2008.
(2) Interest in votes amounts to 99.7%.
(3) See Note 13.
(4) This company was merged into Cablevisión effective
as of October 1, 2016.

The subsidiaries’ financial statements used for
consolidation purposes bear the same closing
date as these consolidated financial statements,
comprise the same periods and have been
prepared under exactly the same accounting
policies as those used by the Company, which
are described in the notes to the consolidated
financial statements or, as the case may be,
adjusted as applicable.

2.4.1 Consolidation of Structured Entities
Cablevisión has executed certain agreements
with other companies, for the purposes of
rendering on behalf of and by order of such
companies certain selling and installation
services, collections, administration of subscribers,
marketing and technical assistance, financial
and general business advising, with respect
to cable television and Internet access services
in Uruguay. In accordance with IFRS 10
“Consolidated Financial Statements”, these
consolidated financial statements include the
assets, liabilities and results of these companies.
Since the Company does not hold an interest
in these companies, the offsetting entry of
the net effect of the consolidation of the assets,
liabilities and results of these companies is
disclosed under the items "Equity attributable
to non-controlling interests" and "Net Income
attributable to non-controlling interests” in
these financial statements, as required by IFRS.

Direct or Indirect Interest in the
Capital Stock and Votes (%)
December 31, 2015

December 31, 2016

60.0%
60.0%

-
100.0%
100.0%
100.0%
99.3%
54.6%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%

60.0%

-
60.0%
100.0%
100.0%
100.0%
99.2%
54.6%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%

2.4.2 Changes in the Company’s Interests in Existing

Subsidiaries
The changes in the Company’s interests in
subsidiaries that do not generate a loss of
control are recorded under equity. The book
value of the Company’s interests and non-
controlling interests is adjusted to reflect the
changes in the relative interest in the subsidiary.
Any difference between the amount for which
non-controlling interests were adjusted and the
fair value of the consideration paid or received
is directly recognized in equity and attributed to
the shareholders of the parent company.

In case of loss of control, any residual interest
in the issuing company is measured at its
fair value at the date on which control was lost,
allocating the change in the recorded value
with an impact on net income. The fair value
is the initial amount recognized for such
investments for the purposes of its subsequent
valuation for the interest retained as associate,
joint operation or financial instrument.
Additionally any amount previously recognized
in Other Comprehensive Income regarding
such investments is recognized as if Grupo
Clarín had disposed of the related assets and
liabilities. Consequently, the amounts previously
recognized in Other Comprehensive Income
may be reclassified to net income.

2.5 Business Combinations
The Company applies the acquisition method
to account for business combinations. The
consideration for each acquisition is measured
at fair value (on the date of exchange) of the
assets acquired, the liabilities incurred or
assumed and the equity instruments issued by
the Company in exchange for the control
of the company acquired. The costs related to
the acquisition are expensed as incurred.

The consideration for the acquisition, if any,
includes any asset or liability arising from a
contingent consideration arrangement,
measured at fair value at the acquisition date.
Subsequent changes to such fair value, verified
within the measurement period, are adjusted
against the acquisition cost.

The measurement period is the actual period
that begins on the acquisition date and
ends as soon as the Company receives all the
information it was seeking about facts and
circumstances that existed as of the acquisition
date. The measurement period cannot exceed
one year from the acquisition date. All other
changes in the fair value of the contingent
consideration classified as assets or liabilities,
outside the measurement period, are recognized
in net income.

Changes in the fair value of the contingent
consideration classified as equity are not
recognized.

In the case of business combinations achieved
in stages, the Company’s equity interest
in the company acquired is remeasured at fair
value at the acquisition date (i.e., the date
on which the Company acquired control) and
the resulting gain or loss, if any, is recognized
as income/expense or in other comprehensive
income, depending on the origin of the
variation. In the periods preceding the reporting
periods, the Company may have recognized in
other comprehensive income the changes in
the value of the interest in the capital stock of
the acquired company. In that case, the amount
recognized in other comprehensive income is
recognized on the same basis that would have
been required if the Company had directly
disposed of the previously-held equity interest.

The identifiable assets, liabilities and contingent
liabilities of the acquired company that meet
the conditions for recognition under IFRS 3
(2008) are recognized at fair value at the
acquisition date, except for certain particular
cases provided by such standard.

Any excess of the acquisition cost (including
the interest previously held, if any, and the
non-controlling interest) over the net fair value
of the subsidiary’s or associate’s identifiable
assets, liabilities and contingent liabilities
measured at the acquisition date is recognized
as goodwill. Any excess of the net fair value
of the identifiable assets, liabilities and
contingent liabilities over the acquisition cost
is immediately recognized in net income.

The acquisition cost comprises the consideration
transferred, the amount of any non-controlling
interest and the acquisition-date fair value of
the acquirer’s previously-held equity interest in
the acquiree, if any.

The Company initially recognizes any non-
controlling interest as per its share in the
amounts recognized for the net identifiable
assets of the acquired company.

2.6 Investment in Associates
An associate is an entity over which the
Company has significant influence, without
exerting control, generally accompanied by
equity holdings of between 20% and 50% of
voting rights.

The associates’ net income and the assets and
liabilities are disclosed in the consolidated
financial statements using the equity method,
except when the investment is classified as
held for sale, in which case it is accounted for
under IFRS 5 “Non-Current Assets Held
for Sale and Discontinued Operations”.
Under the equity method, the investment in
an associate is to be initially recorded at
cost and the book value will be increased or
decreased to recognize the investor’s share
in the comprehensive income for the year
or in other comprehensive income obtained
by the associate, after the acquisition date.
The distributions received from the associate
will reduce the book value of the investment.

Any excess of the acquisition cost over the
Company’s share in the net fair value of
the associate’s identifiable assets, liabilities and
contingent liabilities measured at the acquisition
date is recognized as goodwill. Goodwill is
included in the book value of the investment
and tested for impairment as part of the
investment. Any excess of the Company’s share
in the net fair value of the identifiable assets,
liabilities and contingent liabilities over the
acquisition cost, after its measurement at fair
value, is immediately recognized in net income.

Unrealized gains or losses on transactions
between the Company (and subsidiaries) and
the associates are eliminated considering the
Company’s interest in the associates.

Adjustments were made, where necessary, to
the associates’ financial statements so that their
accounting policies are consistent with those
used by the Company.

Investments in companies in which the
company does not have control or significant
influence have been valued at cost, as
established by IAS 39.

In the cases where non-controlling shareholders
hold put options whereby they may force the
Company to acquire shares of subsidiaries, and
the Company reasonably estimates that such put
options will be duly exercised, the Company
discloses the present value of the corresponding
future payments under Other Liabilities.

2.7 Interests in Joint Operations
A joint operation is a contractual arrangement
whereby the Company and other parties
undertake an economic activity that is subject
to joint control, i.e., when the financial strategy
and the operating decisions related to the
company’s activities require the unanimous
consent of the parties sharing control.

Joint venture arrangements that entail the
establishment of an independent entity in
which each company holds an interest are called
jointly controlled entities. The Company, in
accordance with IFRS 11 "Joint Arrangements”,
has applied the equity method to measure
its holding in the jointly controlled entity and
discloses its holdings in such entities under
Investment in unconsolidated affiliates.

In the cases of joint business arrangements
executed through Uniones Transitorias de
Empresas ("UTE"), considered joint operations
under IFRS 11, the Company recognizes
in its financial statements on a line-by-line basis
the assets, liabilities and net income subject
to joint control in proportion to its share
in such arrangements.

These consolidated financial statements
include the balances of the UTEs, among them,
Ertach S.A. – Prima S.A. Unión Transitoria
de Empresas, FEASA – S.A. La Nación Unión
Transitoria de Empresas and AGEA S.A. –
S.A. La Nación – UTE, in which the Company
and/or its subsidiaries hold an interest.

2.8 Goodwill
Goodwill arises from the acquisition of
subsidiaries and refers to the excess of the cost
of acquisition over the net fair value at the date
of acquisition of the identifiable assets acquired
and liabilities assumed. The Company initially
recognizes any non-controlling interest as per
its share in the amounts recognized for the net
identifiable assets of the acquired company.

If, upon measurement at fair value, the
Company’s share in the fair value of net
identifiable assets of the acquired company
exceeds the amount of the consideration
transferred, the amount of any non-controlling
interest in such company and the fair value
of the acquirer’s previously held non-controlling
interest in the acquiree (if any), such excess
is immediately recognized in the statement
of comprehensive income as a gain arising from
a very advantageous acquisition.

the impairment loss is first allocated to reduce
the goodwill allocated to the unit and then
to the other assets of the unit, on a pro rata
basis, based on the valuation of each asset
in the unit. The impairment loss recognized
against the valuation of goodwill is not reversed
under any circumstance.

In case of a loss of control in the subsidiary,
the amount attributable to goodwill is included
in the calculation of the corresponding gain
or loss.

2.9 Revenue Recognition
Revenues are recognized when the amount of
revenues may be reliably estimated, when future
economic benefits are likely to be obtained by
the Company, and when specific criteria
are met for each of Grupo Clarín’s activities,
as described below.

Revenues for each of the main business
segments identified by the Company
are recognized when the following conditions
are met:

- Cable Television, Internet Access and Telephony
Sales of cable or Internet services subscriptions
are recognized as revenues for the period
in which the services are rendered. Revenues
from the installation of these services are
accrued over the average term during which
clients maintain their subscription to the
service.

Advertising sales revenues are recognized in
the period in which advertising is published
or broadcast.

Revenues from transactions that include more
than one item have been recognized separately
to the extent they have commercial substance
on their own. The amount of revenues allocated
to each item is based on its fair value, which
is assessed or estimated at market value.

Revenues from the sale of assets are recognized
only when the risks and benefits arising
from the use of the disposed assets have been
transferred, the amount of revenues may be
fairly estimated, and the Company is likely to
obtain economic benefits (see Note 19).

Installment sales are recognized at the value
of future income discounted at a market rate
assessed at the beginning of the transaction.

- Printing and Publishing
Advertising sales are determined by the prices
achieved per single column centimeter and
the number of advertising centimeters sold in
the relevant period. Circulation sales include
the price received from the sale of newspapers,
magazines and other publications. Printing
services sales consist mainly of fees received
from the printing of magazines, books,
brochures and related products.

Advertising sales from newspapers and
magazines are recognized when advertising
is published. Revenues from the sale of
newspaper and magazines are recognized upon
passing control to the buyers.

The Company records the estimated impact
of returns, calculated based on historical
trends, as a deduction from revenues. Revenues
from printing services are recognized upon
completion of the services, delivery of
the related products and customer acceptance.

- Broadcasting and Programming
TV and radio advertising sales revenues are
recognized when advertising is broadcast.
Revenues from programming and distribution
of television content are recognized when the
programming services are provided.

2.10 Barter Transactions
The Company, through its subsidiaries,
sells a small portion of its advertising spaces
in exchange for goods or services received.
Revenues are recorded when the advertisement
is made, valued at the fair value of the
goods or services received, in the case of
goods and other services advertising barter
transactions, or delivered, in the case of
advertising-for-advertising barter transactions.
Goods or services are recorded at the time
goods are received or services are rendered.
The goods or services to be received in
consideration for the advertisements made
are recorded as Trade Receivables. The
advertisements to be made in exchange for the
goods and services received are recorded as
Trade Payables and Other.

2.11 Leases
Leases are classified as financial leases when
the terms of the lease transfer to the lessee
substantially all the risks and benefits inherent
to the property. All other leases are classified
as operating leases.

The assets held under financial leases are
recognized at the lower of the fair value of the
Company’s leased assets at the beginning of the
lease term, or the present value of the minimum
lease payments. The liability held with the lessor
is included in the balance sheet as an obligation
under financial leases recorded under Debt.

Lease payments are apportioned between
the finance charge and the reduction of the
liabilities under the lease so as to achieve
a constant interest rate on the outstanding
balance. The finance charge is expensed over
the lease term.

The assets held under financial leases are
depreciated over the shorter of the useful life
of the assets or the lease term.

Rentals under operating leases are charged to
income on a straight line basis over the
corresponding lease term.

2.12 Foreign Currency and Functional Currency
The financial statements of each of the entities
consolidated by the Company are prepared
in the currency of the primary economic
environment in which the entity operates
(its functional currency). For the purposes of
the consolidated financial statements, the net
income and the financial position of each entity
are stated in Argentine Pesos (Argentina’s legal
tender for all companies domiciled in
Argentina), which is the Company’s functional
currency, and the reporting currency of the
consolidated financial statements. The
functional currency of the indirectly controlled
Uruguayan and Paraguayan companies, are the
Uruguayan Peso and the Guarani, respectively.

In preparing the financial statements of the
individual entities, the transactions in currencies
other than the entity’s functional currency
(foreign currency) are recorded at the exchange
rates prevailing on the dates on which
transactions are carried out. At the end of each
reporting year, the monetary items denominated

in foreign currency are retranslated at the
exchange rates prevailing on such date.

Exchange differences are charged to net income
as incurred.

In preparing the Company’s consolidated
financial statements, the assets and liabilities
balances of the entities which functional
currencies is not the Argentine Peso, stated in
their own functional currency (Uruguayan Peso
and Guarani) are translated to Argentine pesos
at the exchange rate prevailing at the end of the
year, while the net income is translated at the
exchange rate prevailing on the transaction date.
Translation differences are recognized in other
comprehensive income as “Variation in
Translation Differences of Foreign Operations”.

2.13 Financial Costs
Financial costs directly attributable to the
acquisition, construction or production of
assets that require a substantial period of time
to prepare for their intended use or sale
(“qualifying assets”), are capitalized as part of
the cost of these assets until they are ready
for their intended use or sale, according to IAS
23 ("Borrowing Costs").

The income, if any, on the temporary
investment of the specific borrowings incurred
to finance qualifying assets is deducted from
the financial costs to be capitalized.

All other financial costs are charged to net
income as incurred.

2.14 Taxes
The income tax charge reflects the sum of
current income tax and deferred income tax.

2.14.1 Current and Deferred Income Tax for the year
Current and deferred taxes are recognized
as expense or income for the year, except when
they are related to entries debited or credited
to other comprehensive income or equity,
in which cases taxes are also recognized
in other comprehensive income or directly
in equity, respectively. In the case of a business
combination, the tax effect is taken into
consideration in the calculation of goodwill or
in the determination of the excess of acquirer’s
interest in the net fair value of the acquiree’s
identifiable assets, liabilities and contingent

liabilities over the cost of the business
combination.

2.14.2 Current Income Tax
Current tax payable is based on the taxable
income recorded during the year. Taxable
income and net income reported in the
consolidated statement of comprehensive
income differ due to revenue or expense items
that are taxable or deductible in other fiscal
years and items that are never taxable or
deductible. The current tax liability is calculated
using the tax rate in effect as of the date of
these consolidated financial statements. Current
tax charge is calculated based on the tax
rules effective in the countries in which the
consolidated entities operate.

2.14.3 Deferred Income Tax
Deferred tax is recognized on temporary
differences between the book value of the assets
and liabilities included in these financial
statements and the corresponding tax basis used
to determine taxable income. Deferred tax
liabilities are generally recognized for all
temporary fiscal differences. Deferred tax assets
are recognized for all deductible temporary
differences to the extent that it is likely that
future taxable income will be available against
which those deductible temporary differences can
be charged. These assets and liabilities are not
recognized if the temporary differences arise from
goodwill or from the initial recognition (other
than in a business combination) of other assets
and liabilities in a transaction that affects neither
the taxable income nor the accounting income.

The book value of a deferred tax asset is
reviewed at each reporting year and reduced to
the extent that it is no longer likely that
sufficient taxable income will be available in the
future to allow for the recovery of all or part
of the asset.

Deferred tax is recognized on temporary
differences arising from investments in foreign
subsidiaries.

measurement of deferred tax liabilities and assets
reflects the tax consequences that would follow
from the manner in which the entity expects, at
the end of the reporting year, to recover or settle
the book value of its assets and liabilities.

Deferred tax assets are offset against deferred
tax liabilities if effective regulations allow
to offset, before the tax authorities, the amounts
recognized in those items; and if the deferred
tax assets and liabilities arise from income taxes
levied by the same tax authority and the
Company intends to settle its assets and
liabilities on a net basis.

Under the IFRS, deferred income tax assets
and liabilities are classified as non-current assets
and liabilities, respectively.

2.14.4 Tax on Assets
In Argentina, the tax on assets (impuesto a la
ganancia mínima presunta) is supplementary
to income tax. The Company assesses this tax at
the effective rate of 1% on the taxable assets
at year-end. The Company’s tax liability for
each year will be equal to the higher of the tax
on assets assessment or the income tax liability
assessed at the legally effective rate on the
estimated taxable income for the year. However,
if the tax on assets exceeds the income tax
liability in any given fiscal year, the excess may
be creditable against any excess of income tax
liability over the tax on assets in any of the
following ten fiscal years.

The tax on assets balance has been capitalized
in these consolidated financial statements
for the amount estimated to be recoverable
within the statute of limitations, based on the
subsidiaries’ current business plans.

2.15 Property, Plant and Equipment
Property, plant and equipment held for use in
the production or supply of goods and services,
or for administrative purposes, are recorded
at cost less accumulated depreciation and any
accumulated impairment loss.

Depreciation of property, plant and equipment
in use is recognized on a straight-line basis over
its estimated useful life.

The estimated useful life, residual value and
depreciation method are reviewed at each year-

end, with the effect of any changes in estimates
accounted for on a prospective basis. Land is
not depreciated.

Works in process are recorded at cost less any
recognized impairment loss. The cost includes
professional fees and, in the case of qualifying
assets, capitalized financial costs in accordance
with the Company’s accounting policy (Note
2.13). Depreciation of these assets, as well as in
the case of other property, plant and equipment,
begins when the assets are ready for their use.

Assets held under financial leases are depreciated
over the shorter of their estimated useful life,
which is equal to the rest of the other similar
assets, or over the lease term.

Repair and maintenance expenses are expensed
as incurred.

The gain or loss arising from the retirement
or disposal of an item of property, plant and
equipment is calculated as the difference
between income from the sale of the asset and
the asset’s book value, and recognized under
“Other Income and Expenses, net” in the
statement of comprehensive income.

The residual value of an asset is written down
to its recoverable value, if the asset’s residual
value exceeds its estimated recoverable value
(see Note 2.17).

2.16 Intangible Assets
Intangible assets include trademarks and
patents, exclusivity agreements, licenses,
software and other rights, the purchase value
of the subscriber portfolio, projects in-progress
(mainly related to software development) and
other intangible assets. The accounting policies
regarding the recognition and measurement
of such intangible assets are described below.

2.16.1 Intangible Assets Acquired Separately
Intangible assets acquired separately are valued
at cost, net of the corresponding accumulated
amortization and impairment losses. Amortization
is calculated on a straight line basis over the
estimated useful life of the intangible assets. The
Company reviews the useful lives applied,
the residual value and the amortization method
at each year-end, and accounts the effect of any
changes in estimates on a prospective basis.

Assets held under financial leases are depreciated
over the shorter of their estimated useful life,
which is equal to the rest of the other similar
assets, or over the lease term.

2.16.2 Intangible Assets Acquired in a Business

Combination
Intangible assets acquired in a business
combination are identified and recognized
separately regarding goodwill when they meet the
definition of intangible assets and their fair value
can be measured reliably. Such intangible assets
are recognized at fair value at acquisition date.

After the initial recognition, intangible assets
acquired in a business combination are
valued at cost net of accumulated amortization
and impairment losses, with the same basis as
intangible assets acquired separately.

2.16.3 Internally Generated Intangible Assets
Internally generated intangible assets arising
from the development phase of an internal
project are recognized if certain conditions are
met, among them, technical feasibility to
complete the development of the intangible
asset and the intent to complete such
development.

The amount initially recognized for internally
generated intangible assets comprises all the
expenses incurred as from the moment all the
intangible assets meet the above-mentioned
recognition criteria. Where it is not possible to
recognize an internally generated intangible
asset, the development expenses are recognized
in the statement of comprehensive income in
the year in which they are incurred.

After the initial recognition, internally
developed intangible assets are valued at cost net
of accumulated amortization and impairment
losses, with the same basis as intangible assets
acquired separately.

Such assets are included under software and
projects in-progress.

2.17 Impairment of Non-Financial Assets, Except

Goodwill
At the end of each financial statement, the
Company reviews the book value of its
non-financial assets with definite useful life to
determine the existence of any evidence

indicating that these assets could be impaired.
If there is any indication of impairment, the
recoverable value of these assets is estimated
for the purposes of determining the amount of
the impairment loss (in case the recoverable
value is lower than the book value). Where it is
not possible to estimate the recoverable value
of an individual asset, the Company estimates
the recoverable value of the cash-generating
unit ("CGU") to which such asset belongs.
Where a consistent and reasonable allocation
base can be identified, corporate assets are
also allocated to an individual cash-generating
unit or, otherwise, to the smallest group of
cash-generating units for which a consistent
allocation base can be identified.

The recoverable value of an asset is the higher
of the fair value less selling expenses or its value
in use. In measuring value in use, estimated
future cash flows are discounted at their present
value using a pre-tax discount rate, which
reflects the current market assessments of the
time value of money and, if any, the risks
specific to the asset for which estimated future
cash flows have not been adjusted.

Assets with an indefinite useful life (for
example, non-financial assets unavailable for
use) are not amortized, but are tested for
impairment on an annual basis.

Non-financial assets, except for goodwill, for
which an impairment loss was recorded,
are reviewed at each closing date for a possible
reversal of the impairment loss.

2.18 Inventories
Inventories are valued at the lower of acquisition
cost and/or production cost or the net
realizable value. The cost is determined under
the weighted average price method.

The production cost is determined under the
cost absorption method, which comprises
raw materials, labor and other costs directly
related to the production of goods. The net
realizable value represents the estimated selling
price in the ordinary course of business less the
estimated costs necessary to make such sale.

The criterion followed to expense each of these
inventory items is as follows:

− Film Rights (series, soap operas and films) and
programs purchased:
The cost of series, soap operas and programs
purchased to be shown on broadcast television
is mainly expensed against the cost of sales
on the exhibition date or upon expiration of
exhibition rights. Rights related to these
programs acquired in perpetuity, if any, are
amortized over their estimated useful life
(eight years, with a grace period of three years
and are subsequently amortized on a straight-
line basis over the next five years).

Films are expensed against the cost of sales
on a decreasing basis, based on the number of
showings granted by the respective rights or
upon expiration of exhibition rights.

Film rights acquired in perpetuity are amortized
over their estimated useful life (seven years,
with a grace period of four years. They are
subsequently amortized on a decreasing basis
over the next three years).

− In-house production programs and
co-productions:
The cost of in-house production programs
and co-productions is mainly expensed against
the cost of sales after broadcasting of the
chapter or program. Rights related to in-house
production programs and co-productions
acquired in perpetuity, if any, are amortized over
their estimated useful life (eight years, with a
grace period of three years and are subsequently
amortized on a straight-line basis over the
next five years).

− Events:
The cost of events is fully expensed against the
cost of sales at the time of broadcasting.

The allowance for impairment is calculated
based on the recoverability analysis conducted
at the closing of each year. The values thus
obtained do not exceed their respective
recoverable values estimated at the closing of
each year.

2.19 Other Assets
The assets included in this item have been
valued at acquisition cost.

Investments denominated in foreign currency
subject to restrictions on disposition under

financial covenants have been valued at face
value plus interest accrued as of each year-end.

2.20 Provisions and Other
Provisions for Lawsuits and Contingencies and
the accrual for asset retirement are recognized
when the Company has a present obligation
(be it legal or constructive) as a result of a past
event, when it is likely that an outflow of
resources will be required to settle the obligation
and when the amount of the obligation can
be reliably estimated.

The amount recognized as a provision is the best
estimate of the expenditure required to settle
the present obligation at the end of the reporting
year, taking into consideration the corresponding
risks and uncertainties. Where a provision is
measured using the estimated cash flow to settle
the present obligation, its book value represents
the present value of such cash flow.

In estimating its obligations, the Company
has taken into consideration the opinion of its
legal advisors, if any.

2.21 Financial Instruments

2.21.1 Financial Assets
Purchases and sales of financial assets are
recognized at the transaction date when the
Company undertakes to purchase or sell
the asset, and is initially measured at fair value,
plus transaction costs, except for those financial
assets classified at fair value with changes
in the statement of income, which are initially
measured at fair value.

2.21.1.1 Classification of Financial Assets
Financial assets are classified within the
following specific categories: “financial assets
at fair value with changes in net income”,
“held-to-maturity investments” and “loans and
receivables”. The classification depends on
the nature and purpose of the financial assets
and is determined on initial recognition.

2.21.1.2 Recognition and Measurement of Financial

Assets

2.21.1.2.1 Financial Assets at Fair Value with

Changes in Net Income
Financial assets at fair value with changes in net
income are recorded at fair value, recognizing
any gain or loss arising from the measurement
in the consolidated statement of comprehensive

income. The net gain or loss recognized in net
income includes any gain or loss generated
by the financial asset and is included under the
item financial income and cost in the
consolidated statement of comprehensive
income.

The assets designated in this category are
classified as current assets if they are expected to
be traded within 12 months; otherwise, they
are classified as non-current assets.

The fair value of these assets is calculated based
on the current quoted market price of these
instruments.

2.21.1.2.2 Held-to-maturity Investments
Held-to-maturity investments are measured
at amortized cost using the effective interest rate
method less any impairment, if any.

The effective interest rate method calculates
the amortized cost of a financial asset or liability
and the allocation of financial income or cost
over the whole corresponding period. The
effective interest rate is the rate that exactly
discounts estimated future cash payments or
receipts over the expected life of the financial
instrument to the net book value of the
financial asset or liability on its initial
recognition.

Balances in foreign currency were translated at
the exchange rate prevailing at the closing
of year for the settlement of these transactions.
Foreign exchange differences were charged to
net income for each year.

2.21.1.2.3 Loans and Receivables
Loans and trade receivables with fixed or
determinable payments not traded in an active
market are classified as “trade receivables and
other”. Trade receivables and other are initially
measured at fair value, and subsequently
measured at amortized cost using the effective
interest rate method, less any impairment, if
any. Interest income is recognized using the
effective interest rate method, except for short-
term balances for which the recognition of
interest is not significant.

Loans and receivables are classified as current
assets, except for the maturities exceeding
12 months from the closing date.

Loans in foreign currency have been valued
as mentioned above, at the exchange rates
prevailing as of each year-end. Foreign
exchange differences were charged to net
income for each year.

2.21.1.3 Impairment of Financial Assets
The Company tests financial assets or a group
of assets for impairment at each closing date
to assess if there is any objective evidence of
impairment. The value of a financial asset or a
group of assets is impaired, and an impairment
loss is recognized, where there is objective
evidence of the impairment as a result of one
or more events that occurred after the initial
recognition of the asset (a “loss event”) and
that loss event or events have an impact on the
estimated future cash flows of the financial
asset or a group of assets, which may be reliably
measured.

The objective evidence of impairment may
include, among others, significant financial
difficulties of the issuer or obligor; or breach
of contractual terms, such as default or
delinquency in interest or principal payments.

For certain categories of financial assets, such
as accounts receivable and other receivables,
the assets that are not impaired on an
individual basis are tested for impairment on a
collective basis. The objective evidence of
impairment of a receivables portfolio includes
the Company’s past collection experience, an
increase in the number of delinquent payments
in the receivables portfolio, as well as observable
changes in the local economic situation
affecting the recoverability of receivables.

Where there is objective evidence of an
impairment loss in the value of loans granted,
receivables or held-to-maturity investments
recorded at amortized cost, the loss amount is
measured as the difference between the book
value and the present value of estimated future
cash flows (without including future non-
incurred losses), discounted at the original
effective interest rate of the financial asset.
The asset’s book value is written down under a
contra asset account. The loss amount is
recognized in net income for the year.

If, in subsequent periods, the impairment loss
amount decreases and such decrease can be

objectively related to an event occurring after
the impairment has been recognized (such
as an improvement in the debtor’s credit rating),
the previously recognized impairment loss is
reversed. A loss reversal can only be recorded to
the extent the financial asset’s book value does
not exceed the amortized cost that would have
been determined if the impairment loss had not
been recorded at the reversal date. The reversal
amount is recognized in net income for the year.

2.21.1.4 Derecognition of Financial Assets
The Company derecognizes a financial asset
when the contractual rights to the cash flows
of such assets expire or when it transfers
the financial asset and, therefore, all the risks
and benefits inherent to the ownership of
the financial asset are transferred to another
entity. If the Company retains substantially
all the risks and benefits inherent to the
ownership of the transferred asset, it will
continue to recognize it and will recognize a
liability for the amounts received.

2.21.2 Financial Liabilities
Financial liabilities, except for derivatives, are
valued at amortized cost using the effective
interest rate method.

2.21.2.1 Debt
Debt is initially valued at fair value net of the
transaction costs incurred, and subsequently
valued at amortized cost using the effective
interest rate method. Any difference between
the initial value net of the transaction costs and
the settlement value is recognized in the income
statement over the term of the loan using the
effective interest rate method. Interest expense
has been allocated to “Financial Costs” in
the consolidated statement of comprehensive
income, except for the portion allocated to
the cost of works under construction recorded
under “Property, Plant and Equipment”.

Debt maturing within the 12 months preceding
the closing date is classified as current and
those maturing within the 12 months following
the closing date are classified as non-current.

Loans in foreign currency have been valued
as mentioned above, at the exchange rates
prevailing as of each year-end. Foreign
exchange differences were charged to net
income for each year.

2.21.2.2 Trade Payables and Other
Trade payables with fixed or determinable
payments not traded in an active market are
classified as “Trade Payables and Other”. Trade
Payables and Other are initially measured at
fair value, and subsequently measured at
amortized cost using the effective interest rate
method. Interest expense is recognized using
the effective interest rate method, except for
short-term balances for which the recognition
of interest is not significant.

Trade Payables and Other are classified as
current, except for the maturities exceeding 12
months from the closing date.

Trade payables in foreign currency have been
valued as mentioned above, at the exchange
rates prevailing as of each year end. Foreign
exchange differences were charged to net
income for each year.

2.21.2.3 Derecognition of Financial Liabilities
An entity shall derecognize a financial liability
(or part of it) when it has been extinguished,
i.e., when the obligation specified in the
corresponding agreement is discharged,
cancelled or expires.

2.21.3 Derivatives and Hedge Accounting
The Company executes certain financial
instruments to manage its exposure to interest
rate and exchange risks, including foreign
currency hedges, interest rate swaps and
currency swaps.

Derivatives are initially recognized at fair value
at the date of execution of the related contract
and subsequently measured at fair value at
the end of the reporting year. The resulting gain
or loss is immediately recognized in net income
unless the derivate is designated as a hedging
instrument, in which case the timing for its
recognition will depend on the nature of the
hedging relationship. The Company uses certain
derivatives to hedge the fair value of its
recognized liabilities (fair value hedge).

The Company documents at the beginning of
the transaction the existing relationship between
the hedging instruments and the hedged items,
as well as its objectives to manage risk and the
strategy to carry out hedge transactions. The
Company also documents its assessment, both

at the beginning and on an ongoing basis, of
the high effectiveness of its hedging transactions
to offset the changes in the fair value of the
hedged items.

The fair value of hedging derivatives is fully
classified as a non-current asset or liability if the
hedged item matures in more than 12 months,
and as a current asset or liability if the hedged
item matures within 12 months.

Fair Value Hedge

Changes in the fair value of derivatives
designated and classified as fair value hedges are
charged to net income, together with any
change in the fair value of a hedged liability
attributable to the hedged risk. The Company
only applies fair value hedge accounting to cover
the exchange rate fluctuations of the liabilities
it holds in foreign currency. The gain or loss
relating to the effective portion of foreign
currency forward contracts is charged to net
income under Financial Costs. The loss or gain
related to the ineffective portion, if any, is
charged to net income under Other Income
and Expenses, net. Changes in the fair value of
the Company’s hedged liabilities denominated
in foreign currency, attributable to the risk
detailed above, are charged to net income under
Financial Costs.

2.21.4 Refinancing of Indebtedness
Liabilities arising from the restructuring of
financial debts have been initially valued at fair
value and will be subsequently measured at
amortized cost using the effective interest rate
method.

2.22 Other Receivables

2.22.1 Call Option
The call option included under the item
Other Receivables has been valued at its
acquisition cost.

2.23 Other Liabilities
Advances from customers involving obligations
to deliver assets that have not yet been produced
have been valued at the higher of the amounts
received or the share in the estimated value of
the related assets.

The other liabilities have been valued at
nominal value.

2.25 Consolidated Statement of Cash Flows
For the purposes of preparing the consolidated
statement of cash flows, the item “Cash and
Cash Equivalents” includes cash and bank
balances, certain high liquidity short-term
investments (with original maturities shorter
than 90 days). Bank overdrafts payable on
demand, if any, are deducted to the extent they
are part of the Company’s cash management.

Bank overdrafts are classified as “Debt” in the
consolidated balance sheet.

Cash and cash equivalents at each year-end,
as disclosed in the consolidated statement of
cash flows, may be reconciled against the items
related to the consolidated balance sheet
as follows:

December 31, 2016

December 31, 2015

416,006,084

305,789,321

721,795,405

2,025,780,934

679,782,144

2,705,563,078

1,246,653,030

1,382,238,850

3,350,687,285

2,705,563,078

2.24 Assets and Liabilities Held for Distribution to

Shareholders
Non-current assets and liabilities (or disposal
groups) are classified as assets and liabilities
held for distribution to shareholders when an
entity undertakes to distribute them to its
shareholders, to the extent such distribution is
highly likely to occur and they are available
for immediate distribution in their then current
conditions.

Cash and Banks

Short-Term Investments

Subtotal

Cash and cash equivalents disclosed under

“Assets held for distribution to shareholders”:

Cash and Banks

Short-Term Investments

Subtotal

In the years ended December 31, 2016 and
2015, the following significant transactions were
carried out, which did not have an impact on
cash and cash equivalents:

Dividends collected through debt settlement

Interest settlement through reserve account

17,000,000

12,000,000

1,100,400

December 31, 2016

December 31, 2015

2.26 Distribution of Dividends
The distribution of dividends to the Company’s
shareholders is recognized as a liability in
the financial statements for the year in which
the distribution of dividends is approved at
the Shareholders’ Meeting.

Note 3

Accounting estimates and judgments
In applying the accounting policies described
in Note 2, the Company has to make
judgments and prepare accounting estimates of
the value of the assets and liabilities that may
not be otherwise obtained. The estimates and
related assumptions are based on historical
experience and other pertinent factors. Actual
results may differ from these estimates.

The underlying estimates and assumptions are
continually reviewed. The effects of the reviews
of accounting estimates are recognized for the
year in which estimates are reviewed.

These estimates basically refer to:

Allowance for Bad Debts
The Company calculates the allowance for bad
debts for debt instruments that are not valued
at fair value, taking into account the
uncollectibility history, the opinion of its legal
advisors, if any, and other circumstances known
at the time of calculation.

Impairment of Goodwill
The Company assesses goodwill for
impairment on an annual basis. In determining
if there is impairment of goodwill, the
Company calculates the value in use of the
cash generating units to which it has been
allocated. The calculation of the value in
use requires the determination by the entity of
the future cash flows that should arise from
the cash generating units and an appropriate
discount rate to calculate the present value.

Recognition and Measurement of Deferred
Income Tax Items
Deferred tax assets are only recognized for
temporary differences to the extent that
it is likely that each entity, on an individual
basis, will have enough future taxable income
against which the deferred tax assets can be
used. Tax loss carryforwards from prior years
are only recognized when it is likely that each
entity will have enough future taxable income
against which they can be used.

Pursuant to effective regulations, the use of the
subsidiaries’ tax credits is based on a projection
analysis of future income.

The Company examines the recoverable value
of deferred tax assets based on its business plans
and books a valuation allowance, if appropriate,
so that the net position of the deferred tax asset
will reflect the probable recoverable value.

Provisions for Lawsuits and Contingencies
The elements taken into consideration for the
calculation of the Provision for Lawsuits and
Contingencies are determined based on the
present value of the estimated costs arising from
the lawsuits brought against the Company,
taking into consideration the opinion of its
legal advisors.

Determination of the Useful Lives of Property,
Plant and Equipment and Intangible Assets
The Company reviews the estimated useful life
of property, plant and equipment and intangible
assets at each year-end.

Measurement of the fair value of certain
financial instruments
The fair value of a financial instrument is
the amount at which the instrument could be
purchased or sold between knowledgeable,
willing parties in an arm’s length transaction.
If there is a quoted market price available
for an instrument in an active market, the fair
value is calculated based on that price.

If there is no quoted market price available for
a financial instrument, its fair value is estimated
based on the price established in recent

transactions involving the same or similar
instruments and, otherwise, based on valuation
techniques regularly used in financial markets.
The Company uses its judgment to select
a variety of methods and makes assumptions
based on market conditions at closing.

Impairment losses of certain assets other than
accounts receivable (including property,
plant and equipment and intangible assets)
Certain assets, including property, plant and
equipment and intangible assets are subject to
impairment testing. The Company records
impairment losses when it estimates that there
is objective evidence of such losses or when
the cost of such losses will not be recovered
through future cash flows. The evaluation
of what constitutes impairment is a matter of
significant judgment. The impairment of
non-financial assets is dealt with in more depth
in Note 2.17.

Note 4

Segment information
The Company is mainly engaged in media
and entertainment activities, which are carried
out through the companies in which it holds a
participating interest. Based on the nature,
clients, and risks involved, the following
business segments have been identified, which
are directly related to the way in which the
Company assesses its business performance:
− Cable Television, Internet Access and
Telephony Services, mainly comprised by the
operations of its subsidiary Cablevisión and
its subsidiaries, notably: NEXTEL and PRIMA
(the latter was merged into Cablevisión
effective October 1, 2016).
− Printing & Publishing: mainly comprises
the operations of its subsidiary AGEA and
its subsidiaries AGR, Cúspide, Tinta Fresca,
CIMECO and their respective subsidiaries.
− Broadcasting and Programming: mainly
comprises the operations of its subsidiaries
ARTEAR, IESA and Radio Mitre, and their
respective subsidiaries, including Telecor, Telba,

Pol-Ka, Auto Sports, Grupo Carburando.
− Digital Content and Other: mainly comprises
the operations of its controlled companies
CMD and subsidiaries, OSA, FEASA
and AGEA S.A. – S.A. La Nación - UTE.
Additionally, this segment includes the
Company’s own operations (typical of a holding
company) and those carried out by its
controlled company GCGC.

The Company has adopted IFRS 8 - Segment
Information, which defines operating segments
as those identified based on internal reports
with respect to the components of the company
regularly reviewed by the Board of Directors,
the main operating decisions maker, to allocate
resources and assess their performance. The
Company uses adjusted EBITDA to measure
its performance. The Company believes that
adjusted EBITDA is a significant performance
measure of its businesses, since it is commonly
used in the industry to analyze and compare
media companies based on operating
performance, indebtedness and liquidity.
However, adjusted EBITDA does not measure
net income or cash flows generated by
operations and should not be considered as an
alternative to net income, an indication of the
Company’s financial performance, an alternative
to cash flows generated by operating activities or
a measure of liquidity. Since adjusted EBITDA
is not defined by IFRS, it is possible that other
companies may calculate it differently.
Therefore, the adjusted EBITDA reported by
other companies may not be comparable to the
Company’s reported adjusted EBITDA.

The following tables include the information
as of December 31, 2016 and 2015, prepared
on the basis of IFRS, for the business segments
identified by the Company. Note 1 to these
consolidated financial statements includes
additional information about the Company’s
businesses.

Notes 13 and 25 describe the effects of the
corporate reorganization process of the
Company and some of its subsidiaries and the
corresponding impact on the consolidated
financial information as of December 31, 2016.

Cable Television,

Internet Access

and Telephony

Printing

Broadcasting

and

Digital Content

Services

Publishing

Programming

and Other

(1) Deletions

(2) Adjustments

Consolidated

Information arising from

consolidated income statements

as of December 31, 2016
Net Sales to Third Parties (3)
Intersegment Sales

30,791,419,604

5,266,195,937

4,597,920,835

26,460,997

509,565,048

301,961,329

769,256,193

498,714,756

(30,045,905,222)

11,378,887,347

(564,726,751)

(771,975,379)

Net Sales

30,817,880,601

5,775,760,985

4,899,882,164

1,267,970,949

(564,726,751)

(30,817,880,601)

11,378,887,347

Cost of sales (excluding

depreciation and amortization)

(11,540,010,475)

(3,455,863,004)

(2,731,032,522)

(796,478,203)

121,983,753

11,540,010,475

(6,861,389,976)

Subtotal

19,277,870,126

2,319,897,981

2,168,849,642

471,492,746

(442,742,998)

(19,277,870,126)

4,517,497,371

Expenses - excluding

depreciation and amortization

- Selling Expenses

(4,225,789,970)

(1,402,377,946)

- Administrative Expenses

(3,565,513,567)

(1,022,251,481)

(323,146,967)

(644,145,679)

Adjusted EBITDA

11,486,566,589

(104,731,446)

1,201,556,996

(210,502,866)

(392,108,509)

(131,118,629)

218,826,869

223,916,129

4,225,789,970

(1,717,200,910)

3,565,513,567

(1,834,589,540)

(11,486,566,589)

965,706,921

Depreciation of Property,

Plant and Equipment

Amortization of Intangible
Assets and Film Library (4)
Financial Costs

Other Financial Results, net

Financial Results

Equity in Earnings from

Affiliates and Subsidiaries

Other Income and Expenses, net

Income Tax and Tax on Assets

Income for the year from

continuing operations

Discontinued Operations

Net Income from

Discontinued Operations

Net Income for the Year

Additional consolidated

information as of
December 31, 2016

Acquisition of Property,

Plant and Equipment

Acquisition of Intangible Assets

Ordinary Income from

Foreign Operations

Non-Current Assets Held Abroad

(118,227,554)

(65,256,955)

(267,623,007)

(130,553,073)

(398,176,080)

48,725,499

55,465,753

(264,157,883)

224,079,701

3,955,531,485

4,179,611,186

9,043,691,047

23,338,586

84,500,574

66,929,956

202,719,986

7,681,897

24,138,634

70,297,156

816,075,846

884,259,624

11,135,712

(9,043,691,047)

(23,338,586)

311,359,194

144,909,009

(816,075,846)

(884,259,624)

11,135,712

(1) Deletions are related to Grupo Clarín’s intercompany operations.
(2) Recognition of revenues from cable TV and Internet installation services
and transactions including separate items, the non-consolidation of special
purpose entities, and the results of discontinued operations (as disclosed in Notes
25 and 13) corresponding to the Cable Television, Internet Access and Telephony
Services segment.
(3) Includes also sales to unconsolidated companies.
(4) Amortization of film rights acquired in perpetuity, mentioned in Note 2.18.

100

Cable Television,

Internet Access

and Telephony

Printing

Broadcasting

and

Digital Content

Services

Publishing

Programming

and Other

(1) Deletions

(2) Adjustments

Consolidated

Information arising from

consolidated income statements

as of December 31, 2015
Net Sales to Third Parties (3)
Intersegment Sales

19,976,650,205

3,978,379,230

3,352,809,655

37,049,795

325,013,561

248,551,251

Net Sales

20,013,700,000

4,303,392,791

3,601,360,906

372,033,360

388,953,766

760,987,126

(19,387,880,062)

8,291,992,388

(373,748,434)

(625,819,939)

(373,748,434)

(20,013,700,001)

8,291,992,388

Cost of sales (excluding

depreciation and amortization)

(7,475,270,224)

(2,472,370,883)

(2,007,924,864)

(397,856,279)

60,720,941

7,475,270,224

(4,817,431,085)

Subtotal

12,538,429,776

1,831,021,908

1,593,436,042

363,130,847

(313,027,493)

(12,538,429,777)

3,474,561,303

Expenses - excluding

depreciation and amortization

- Selling Expenses

(2,444,400,263)

(1,031,676,498)

- Administrative Expenses

(2,594,729,513)

(686,794,683)

Adjusted EBITDA

7,499,300,000

112,550,727

(214,058,110)

(427,087,164)

952,290,768

(94,033,582)

(267,819,259)

1,278,006

142,034,681

170,992,812

2,444,400,263

(1,197,733,509)

2,594,729,513

(1,210,708,294)

(7,499,300,001)

1,066,119,500

Depreciation of Property,

Plant and Equipment

Amortization of Intangible
Assets and Film Library (4)
Financial Costs

Other Financial Results, net

Financial Results

Equity in Earnings from

Affiliates and Subsidiaries

Other Income and Expenses, net

Income Tax and Tax on Assets

Income for the year from

continuing operations

Discontinued Operations

Net Income from

Discontinued Operations

Net Income for the Year

Additional consolidated

information as of
December 31, 2015

Acquisition of Property,

Plant and Equipment

Acquisition of Intangible Assets

Ordinary Income from

Foreign Operations

Non-Current Assets Held Abroad

(85,290,931)

(46,928,534)

(150,123,485)

19,155,581

(130,967,904)

61,298,581

98,222,054

(354,574,614)

607,878,152

2,308,032,329

2,915,910,481

4,342,609,987

7,600,638

718,406,183

616,527,051

52,719,081

52,460,919

11,872,296

76,291,518

9,012,238

4,942,134

16,651,473

(4,342,609,987)

(7,600,638)

133,952,733

78,124,630

(718,406,183)

(616,527,051)

11,872,296

101

Note 5

Breakdown of the main items of the Balance Sheet

5.1 Property, Plant and Equipment

Main Account

the Beginning

Additions

Subsidiaries

Retirements

Transfers

2016

Balance at

(1) Deconsolidation
of

Historical value

Balances as of

December 31,

Real Property

Furniture and Fixtures

Telecommunication, Audio and Video Equipment

662,762,575

125,229,077

262,713,516

154,429

(218,733,586)

(1,746,929)

(53,447,675)

(5,879)

10,386,479

18,788,213

External Network and Broadcasting Equipment

7,408,676,730

(7,408,676,730)

Computer Equipment

Technical Equipment

Workshop Machinery

Tools

Spare Parts

Installations

Vehicles

Plots

Materials in Warehouse

Works-In-Progress

Leasehold Improvements

934,368,830

124,380,673

624,638,701

145,492,439

66,011,063

497,032,153

325,426,977

6,218,711

1,615,863,948

1,304,006,818

63,673,594

82,278,065

7,436,523

23,319,899

(568,716,644)

(72,925,334)

(3,592,915)

(9,663,924)

256,071

(144,136,324)

12,626,736

13,081,724

3,610,565

(257,937,599)

(310,082,463)

(6,218,711)

(1,615,863,948)

(2,795,291)

(351,483)

(10,475,736)

36,798

130,619,879

(1,263,469,923)

(142,320)

(95,938,771)

8,800,611

(28,257,264)

6,678,771

82,113,229

(398,544)

1,465,069

693,055

(763,356)

16,471,377

(21,908)

140,016

524,549,718

81,763,458

282,966,798

445,030,391

58,128,506

654,766,053

1,590,278

78,777,815

238,905,251

18,640,394

75,075,683

50,895,712

2,511,090,057

Allowance for Impairment of Property, Plant

and Equipment and Obsolescence of Materials

(22,701,624)

22,701,624

Total as of December 31, 2016

14,143,794,181

311,359,194

(11,925,764,577)

(18,298,741)

102

Computer Equipment

Technical Equipment

Workshop Machinery

Tools

Spare Parts

Installations

Vehicles

Plots

Materials in Warehouse

Works-In-Progress

Leasehold Improvements

Main Account

the Beginning

Subsidiaries

Retirements

For the year

2016

Balance at

(1) Deconsolidation
of

Accumulated Depreciation

Net Book

Balances as of

Value as of

December 31,

Real Property

Furniture and Fixtures

Telecommunication, Audio and Video Equipment

260,620,740

99,651,334

218,132,288

(84,595,868)

(37,706,811)

External Network and Broadcasting Equipment

2,549,591,018

(2,549,591,018)

(1,383,664)

(37,194)

(3,795)

12,986,929

2,492,951

13,902,866

561,206,568

(242,393,763)

(2,170,014)

39,017,641

187,628,137

64,400,280

232,031,359

355,660,432

45,807,904

551,438,298

1,322,763

60,099,885

190,151,814

11,823,137

336,921,581

17,363,178

50,935,439

89,369,959

12,320,602

103,327,755

267,515

18,677,930

48,753,437

6,817,257

75,075,683

20,945,438

89,793,124

542,192,598

113,181,331

51,912,088

412,419,635

165,002,734

5,724,612

390,796

(49,537,223)

(111,929,013)

(226,996,298)

(155,420,743)

(5,724,612)

47,108,958

(24,880,764)

5,552,003

9,245,700

70,445

8,187,797

16,560,860

2,488,282

(11,832,383)

(247,136)

(390,796)

Allowance for Impairment of Property, Plant

and Equipment and Obsolescence of Materials

7,722,080

29,950,274

Total as of December 31, 2016

5,116,927,824

(3,488,776,113)

(16,064,982)

118,227,554

1,730,314,283

780,775,774

(1) Deconsolidation of balances as of January 1, 2016,
as mentioned in Note 13.

103

Balance at

the Beginning

Cumulative

Translation

Adjustment

Consolidation

of companies

and acquisition

Historical value

Balances as of

December 31,

Additions

of businesses

Retirements

Transfers

2015

658,057,475

121,382,067

(952,276)

(2,689,468)

5,417,803

6,809,267

3,154,230

1,321,404

(16,828,964)

(2,081,515)

13,914,307

487,322

662,762,575

125,229,077

239,146,325

20,723,835

3,053,766

(210,410)

262,713,516

Main Account

Real Property

Furniture and Fixtures

Telecommunication, Audio

and Video Equipment

External Network and

Broadcasting Equipment

5,912,923,981

(71,613,502)

1,330,748,014

(878,842,497)

1,115,460,734

7,408,676,730

Computer Equipment

Technical Equipment

Workshop Machinery

Tools

Spare Parts

Installations

Vehicles

Plots

Materials in Warehouse

Works-In-Progress

Leasehold Improvements

Allowance for Impairment of

Property, Plant and Equipment

711,449,238

105,035,192

610,359,802

112,637,714

58,122,179

486,083,624

219,926,256

16,048,610

964,956,185

667,424,627

54,125,246

(1,529,008)

187,907,472

751,682

(61,210,831)

(529,849)

2,045,691

2,897,902

1,841,558

7,888,884

7,442,351

(1,110,105)

146,844,638

277,887

(4,325,605)

(3,199,421)

2,286,060,198

458,745,305

6,514,738

15,692,408

21,032,437

740,909

650,167

2,066,966

305,989

1,112,883

(14,345,818)

(768,148)

(11,195,142)

(42,300,778)

(10,107,786)

97,000,277

1,607,382

4,694,378

31,570,255

14,051,153

934,368,830

124,380,673

624,638,701

145,492,439

66,011,063

497,032,153

325,426,977

6,218,711

(169,389,977)

(1,461,436,853)

1,615,863,948

180,730,318

1,304,006,818

1,920,727

63,673,594

and Obsolescence of Materials

(17,799,368)

178,871

(5,338,639)

257,512

Total as of December 31, 2015

10,919,879,153

(85,770,363)

4,466,826,904

49,882,841

(1,207,024,354)

(22,701,624)

14,143,794,181

104

Consolidation

of companies

Balance at

and acquisition

the Beginning

of businesses

Cumulative

Translation

Adjustment

Accumulated Depreciation

Net Book

Balances as of

Value as of

December 31,

Retirements

For the year

2015

262,815,838

97,757,693

405,995

624,324

(449,388)

(1,670,467)

(15,706,777)

(2,012,612)

13,555,072

4,952,396

260,620,740

99,651,334

402,141,835

25,577,743

202,513,397

2,447,363

(172,632)

13,344,160

218,132,288

44,581,228

Main Account

Real Property

Furniture and Fixtures

Telecommunication, Audio

and Video Equipment

External Network and

Broadcasting Equipment

2,118,666,426

(48,316,661)

(878,470,923)

1,357,712,176

2,549,591,018

4,859,085,712

(1,458,724)

(61,164,097)

103,364,664

Computer Equipment

Technical Equipment

Workshop Machinery

Tools

Spare Parts

Installations

Vehicles

Plots

Materials in Warehouse

Works-In-Progress

Leasehold Improvements

Allowance for Impairment of

Property, Plant and Equipment

519,991,413

71,449,559

524,365,676

87,563,295

45,476,255

395,122,707

169,416,833

15,607,462

390,796

38,806,689

473,312

9,782,642

17,014,217

654,000

421,684

922,361

(315,059)

(929,366)

(9,061,401)

(508,170)

(11,170,918)

(41,682,756)

(10,107,786)

8,560,923

9,874,106

25,787,265

6,435,833

28,046,162

37,275,662

224,936

561,206,568

89,793,124

542,192,598

113,181,331

51,912,088

412,419,635

165,002,734

5,724,612

373,162,262

34,587,549

82,446,103

32,311,108

14,098,975

84,612,518

160,424,243

494,099

1,615,863,948

390,796

1,303,616,022

180,636

259,147

7,862,486

47,108,958

16,564,636

and Obsolescence of Materials

(257,512)

257,512

Total as of December 31, 2015

4,549,686,527

32,926,534

(52,880,518)

(1,029,800,560)

-
(1) 1,616,995,841

(22,701,624)

5,116,927,824

9,026,866,357

(1) Includes Ps. 1,532 million corresponding
to depreciation included under income/loss from
discontinued operations (See Note 13).

105

The following table details the average years
of useful life of the items comprising Property,
Plant and Equipment:

Item

Real Property

Furniture and Fixtures

Telecommunication, Audio and Video Equipment

External Network and Broadcasting Equipment

Computer Equipment

Technical Equipment

Workshop Machinery

Tools

Spare Parts

Installations

Vehicles

Plots

Leasehold Improvements

5.2 Intangible Assets

Average Useful Life

(in years)

between 3 and 4

between 3 and 20

between 4 and 10

between 3 and 10

Main Account

the Beginning

Balance at

Cumulative

Translation

Adjustment

Acquisition of

(1) Deconsolidation
of

Historical value

Balances as of

December 31,

Additions

Businesses

Retirements

Transfers

Subsidiaries

2016

Exploitation

Rights and

Licenses

Exclusivity

Agreements

Other Rights

Acquisition

Value of

Subscriber

Portfolio
Software

Trademarks

and Patents

Projects

in-Progress

Other

Total as of

December 31,

38,676,597

17,091,041

15,054,396

982,270,861
321,717,712

-
-

7,959,235

-
37,701,086

2,755,171

-
-

(103,268)

(11,103,492)

35,532,340

(2,868,904)

19,846,212

12,082,224

-
(333,794)

-
22,763,714

(981,417,111)
(152,707,378)

853,750
229,141,340

13,476,443

1,413,225

53,907,415

2,202,146

(641,827)

5,793,094

128,187,395

43,151,055

2,190,218

(102,908)

(22,763,714)

(31,423,596)

70,357,402

26,077,527

98,954,017

(1,179,520,481)

492,844,812

2016

1,522,267,539

1,413,225

144,909,009

4,957,317

(1,181,797)

106

Cumulative

Balance at

Translation

Acquisition of

(1) Deconsolidation
of

Accumulated Amortization

Balances as of

Net Book

Value as of

December 31,

Main Account

the Beginning

Adjustment

Businesses

Retirements

Subsidiaries

For the year

2016

Exploitation

Rights and

Licenses

Exclusivity

Agreements

Other Rights

Acquisition

Value of

Subscriber

Portfolio

Software

Trademarks

and Patents

Projects

in-Progress

Other

Total as of

December 31,

31,165,711

12,163,793

13,864,757

905,665,321

196,424,857

1,377,586

6,874,642

322,277

201,864

97,961,892

(333,793)

(11,043,257)

3,692,832

23,815,286

11,717,054

(2,868,512)

1,263,902

433,765

14,805,281

11,430,010

5,040,931

652,214

(904,811,571)

(105,923,040)

853,750

38,909,958

129,077,982

100,063,358

4,991,168

12,389,951

57,967,451

(31,058,090)

11,855,660

78,759,462

26,077,527

20,194,555

2016

1,264,120,973

322,277

1,579,450

(333,793)

(1,055,704,470)

61,147,285

271,131,722

221,713,090

(1) Deconsolidation of balances as of January 1, 2016, as mentioned in Note 13.

Balance at

the Beginning

Cumulative

Translation

Adjustment

Consolidation

of companies

and acquisition

Historical value

Balances as of

December 31,

Additions

of businesses

Retirements

Transfers

2015

Main Account

Exploitation Rights and Licenses

Exclusivity Agreements

Other Rights

Acquisition Value of
Subscriber Portfolio

Software

Trademarks and Patents

Projects in-Progress

Other

33,898,031

17,091,041

15,054,396

975,213,788

255,545,612

6,739,272

7,389,943

80,536,694

Total as of December 31, 2015

1,391,468,777

856,288

(54,315)

801,973

4,692,621

85,945

7,053,073

36,709,394

5,868,093

25,149,695

4,483,223

83,956,099

3,538,842

12,790

43,609,087

47,246,664

4,000

(822,680)

26,746,544

(26,746,544)

38,676,597

17,091,041

15,054,396

982,270,861

321,717,712

13,476,443

5,793,094

(383,294)

(1,205,974)

(4,000)

128,187,395

1,522,267,539

107

Cumulative

(1) Consolidation
of companies

Balance at

Translation

and acquisition

Accumulated Amortization

Balances as of

Net Book

Value as of

December 31,

Main Account

the Beginning

Adjustment

of businesses

Retirements

For the year

2015

Exploitation Rights and Licenses

Exclusivity Agreements

Other Rights

Acquisition Value of

Subscriber Portfolio

Software

Trademarks and Patents

Projects in-Progress

Other

Total as of December 31, 2015

28,327,861

11,127,022

13,345,820

804,700,780

138,643,183

5,308,350

59,401,630

1,060,854,646

(722)

431,340

(30,779)

399,839

85,945

918,024

7,501

27,243,867

28,255,337

2,751,905

1,036,771

518,937

100,964,541

56,864,372

1,127,451

31,165,711

12,163,793

13,864,757

905,665,321

196,424,857

6,874,642

11,347,174

97,961,892

174,611,151

1,264,120,973

7,510,886

4,927,248

1,189,639

76,605,540

125,292,855

6,601,801

5,793,094

30,225,503

258,146,566

(1) Includes Ps. 132 million corresponding to amortization included under income/loss from discontinued operations (See Note 13).

The following is a detail of the average number
of years over which intangible assets items
are amortized:

Item

Exploitation Rights and Licenses

Exclusivity Agreements

Other Rights

Acquisition Value of Subscriber Portfolio

Software

Trademarks and Patents

Other

Amortization Period

(in years)

between 2 and 20

between 5 and 15

between 5 and 20

between 3 and 5

between 3 and 10

between 3 and 20

108

5.3 Goodwill
Company assesses the recoverability of goodwill
considering each company for which it records
goodwill as a different cash generating unit
(“CGU”).

The recoverable amount of each CGU has been
determined as per its value in use, calculated
based on operating cash flows estimated in the
financial budgets approved by Management,
which comprise a period ranging from one to
three years. Cash flows not included in those
periods are projected using a growth rate,
assessed based on statistical data and historical
indicators of Argentina, which does not exceed
the long-term average growth of each business.

The gross margin used in each case for the
calculation of the value in use allocated to each
CGU arises from budgets prepared by each
business for the period under consideration,
which are in line with the historical data and
the expectations regarding market development
and evolution of the respective businesses.

The discount rate used in each case for the
calculation of the value in use allocated to
each CGU takes into account the risk-free rate,
the country risk premium and the premium
for risks specific to each business, and the
indebtedness structure of each CGU. In
particular, the annual discount rate applied to
the projections of Cablevisión’s cash flows is
of approximately 9%.

Net balances

Allowance

as of

for Goodwill

December 31,

Main Account

Residual Value

impairment

2016

2015

Cablevisión and subsidiaries (1) (2)
PRIMA (2)
NEXTEL businesses (2)
CIMECO and related companies

Cúspide and subsidiaries

Grupo Carburando

Telecor

Pol-Ka

Telba

Bariloche TV

Other

Total

235,982,248

19,059,775

12,053,573

39,173,062

16,130,769

3,774,071

1,844,621

(54,637,313)

(19,059,775)

(12,053,573)

181,344,935

2,615,659,205

2,272,319

181,344,935

19,059,775

39,173,062

(6,850,727)

9,280,042

3,774,071

1,844,621

9,280,042

3,774,071

1,844,621

46,098,115

(10,591,317)

35,506,798

35,520,814

374,116,234

(103,192,705)

270,923,529

2,907,928,844

(1) Includes goodwill of Multicanal and Teledigital,
merged into Cablevisión (see Note 8.1.c).
(2) As of December 31, 2016, the balances under the
goodwill of Cablevisión and its subsidiaries and

NEXTEL are disclosed under Assets held for
distribution to shareholders for Ps. 2.715 million and
Ps. 802 million, respectively. See Note 13.

109

5.4. Investment in Unconsolidated Affiliates

Main business activity

Country

(1) Interest (%)

2016

2015

Value

Recorded

as of

Value

Recorded

as of

December 31,

Telecommunication Services

Manufacturing of Newsprint

Cable Television Station

Closed-Circuit Television

Cable Television Station

Closed-Circuit Television

Cable Television Station

Argentina

49.00

47.00

49.99

49.00

49.10

1,201,022,798

169,878,762

6,632,746

184,597,852

102,895,887

10,822,223

5,707,520

20,523,128

31,760,343

6,601,046

Exploitation of events television

broadcasting rights

Argentina

50.00

9,091,465

7,752,297

Production and exploitation of sports

events, advertising agency and

Included in assets

Interest in Associates
NEXTEL (2)
Papel Prensa
Ver TV S.A. (2)
TPO (2)
TATC (2)
La Capital Cable (2)
TSMA (2)
Other Investments

Interests in Joint Operations

TSC

TRISA

Canal Rural

Audiovisual production and sale

financial and investing operations

Argentina

50.00

109,356,908

91,518,852

Impripost

AGL

Ríos de Tinta

Patagonik

of advertising

Variable printing

Printing

Editorial activities

Film producer

Argentina

Mexico

Argentina

Included in liabilities

Interests in Joint Operations

Other Investments

(1) Interest in capital stock and votes
(2) Subsidiaries of Cablevisión. See Note 13.

64.99

50.00

33.33

14,351,137

8,964,915

15,195,663

11,135,712

23,706,949

4,268,968

10,605,383

14,188,981

11,872,296

17,217,247

368,314,257

1,721,354,821

1,234,644

9,873,368

Equity in Earnings from Affiliates and Subsidiaries

December 31, 2016

December 31, 2015

Papel Prensa

TRISA

AGL

Canal Rural

Ríos de Tinta

Impripost

Other Companies

(14,719,089)

47,838,058

1,006,681

5,762,220

(956,885)

(1,640,468)

11,434,982

48,725,499

5,749,658

52,472,276

1,704,193

1,942,356

522,298

(824,433)

(267,767)

61,298,581

110

The following is a detail of certain supplementary
information required by IFRS about interests
in associates (amounts stated in millions of
Argentine pesos):

Dividends received

Summarized financial information:

Current assets

Non-current assets

Current liabilities

Non-current liabilities

Revenues

Net Income from Continuing Operations

Total Comprehensive Income

The following is a detail of certain supplementary
information required by IFRS about interests
in joint operations (amounts stated in millions
of Argentine pesos):

Dividends received

Summarized financial information:

Assets

Cash and Cash Equivalents

Other Current Assets

Current assets

Non-current assets

Liabilities

Current Debt

Other Current Liabilities

Current liabilities

Non-Current Debt

Other Non-Current Liabilities

Non-current liabilities

Revenues

Depreciation and Amortization

Interest Income

Interest Expense

Income Tax and Tax on Assets

Net Income from Continuing Operations

Other Comprehensive Income

Total Comprehensive Income

December 31, 2016

December 31, 2015

279

436

333

1,074

(28)

3,225

1,617

1,504

145

2,925

404

December 31, 2016

December 31, 2015

390

617

1,007

176

659

705

103

2,111

(24)

(36)

(66)

118

221

432

653

123

384

436

1,371

(18)

(20)

(68)

130

136

111

5.5 Other Investments

Non-Current

Financial Instruments

Current

Financial Instruments

Securities

Mutual Funds

5.6 Inventories

Non-Current

Film Products and Rights

Current

Raw Materials and Supplies

Products-in-Process

Finished Goods

Film Products and Rights

Other

Subtotal

Less: Allowance for Impairment of Inventories

5.7 Other Assets

Non-Current

Works of Art

Other

Current
Other

December 31, 2016

December 31, 2015

7,412,878

135,043,852

7,382,019

185,920,824

328,346,695

458,789,781

71,250,926

156,069,384

959,231,703

1,186,552,013

December 31, 2016

December 31, 2015

15,805,039

308,811,229

2,186,176

201,340,358

394,127,582

866,053

907,331,398

(6,317,569)

901,013,829

23,626,229

273,711,077

5,385,901

91,747,645

122,386,463

845,099

494,076,185

(3,383,333)

490,692,852

December 31, 2016

December 31, 2015

461,696

1,660,856

2,122,552

11,838,743

461,696

2,165,605

2,627,301

11,456,124

112

5.8 Other Receivables

Non-Current

Tax Credits

Guarantee Deposits

Prepaid Expenses

Advances

Related Parties (Note 16)

Call option – NEXTEL (Note 12.i)

Other

Allowance for Other Bad Debts

Current

Tax Credits

Court-ordered and Guarantee Deposits

Prepaid Expenses

Advances

Related Parties (Note 16)

Derivatives (Note 22)

Sundry Receivables

Other

Allowance for Other Bad Debts

5.9 Trade Receivables

Non-Current

Trade Receivables

Current

Trade Receivables

Related Parties (Note 16)

Allowance for Bad Debts

5.10 Cash and Banks

Cash and Imprest Funds

Cash at Banks

December 31, 2016

December 31, 2015

135,113,000

5,250,965

1,880,637

9,453,296

9,076,675

(1,567,580)

159,206,993

200,003,480

5,248,923

48,709,847

87,037,408

45,386,440

22,469,157

80,343,584

(2,648,034)

486,550,805

91,786,409

7,307,156

38,080,166

111,084,501

9,212,575

1,103,673,966

29,740,489

(1,567,580)

1,389,317,682

231,318,592

52,292,908

194,699,118

186,029,228

22,304,023

58,356,225

50,114,718

155,474,144

(1,146,852)

949,442,104

December 31, 2016

December 31, 2015

99,857,137

3,537,101,580

144,856,996

(99,175,837)

3,582,782,739

82,905,052

4,039,922,312

20,077,281

(269,372,858)

3,790,626,735

December 31, 2016

December 31, 2015

11,874,223

404,131,861

416,006,084

39,150,282

1,986,630,652

2,025,780,934

113

5.11. Provisions and Other

Non-Current

Provisions for Lawsuits and Contingencies

Accrual for Asset Retirement

5.12 Debt

Non-Current

Financial Loans

Notes

Acquisition of equipment

Related Parties (Note 16)

Measurement at Fair Value

Current

Bank Overdraft

Financial Loans

Notes

Acquisition of equipment

Related Parties (Note 16)

Interest and Restatement

Measurement at Fair Value

The following table details the changes in loans
and indebtedness for the year ended December 31,
2016 and the prior year:

Balances as of January 1st
New Loans and Indebtedness (1)
Accrued Interest

Exchange rate fluctuations and other financial effects

Consolidation of companies
Liabilities Held for Distribution to Shareholders (2)
Payment of Interest

Payment of Principal

Balances as of December 31

(1) Mostly loans for the payment of debt with upcoming
maturity, and for the purchase of capital assets and inventories.
(2) Deconsolidation of balances as of January 1, 2016, as
mentioned in Note 13

December 31, 2016

December 31, 2015

223,591,727

4,660,566

228,252,293

418,452,169

14,023,145

432,475,314

December 31, 2016

December 31, 2015

83,392,075

8,518,437

377,262,109

469,172,621

198,586,266

134,063,965

3,583,977

3,496,881

339,731,089

149,514,835

3,321,722,710

591,437,651

9,212,575

(38,535,875)

4,033,351,896

92,993,428

532,754,534

1,661,477,099

389,941,446

22,708,882

196,029,150

5,832,827

2,901,737,366

2016

2015

6,935,089,262

1,232,757,451

188,672,485

7,110,615

-
(6,621,169,498)

(177,652,903)

(755,903,702)

808,903,710

4,589,396,870

1,526,831,692

733,788,955

2,091,856,064

16,998,266
-

(663,705,855)

(1,360,076,730)

6,935,089,262

114

The following table summarizes the maturities
of consolidated loans (undiscounted values)
at year-end:

Non-Current Debt

years

Non-Current

From 1 to 2

From 2 to 3

From 3 to 4

More than 5

Total

Due

Financial Loans

Acquisition of equipment

Related Parties

Total as of

80,364,336

4,375,184

3,027,739

4,143,253

December 31, 2016

84,739,520

7,170,992

83,392,075

8,518,437

377,262,109

469,172,621

Current Debt

Bank Overdraft

Financial Loans

Acquisition of equipment

Interest and Restatement

Total as of

Up to 3

months

198,586,266

38,624,003

828,014

3,445,107

From 3 to 6

From 6 to 9

From 9 months

months

to 1 year

Total Current

Due

35,620,614

874,174

15,107

28,045,342

917,804

31,774,006

963,985

36,667

198,586,266

134,063,965

3,583,977

3,496,881

December 31, 2016

241,483,390

36,509,895

28,963,146

32,774,658

339,731,089

The following are the main items of the Company’s debt:

5.12.1 Cablevisión
The most significant bank and financial loans
borrowed by Cablevisión and its subsidiaries are
the following:

Balances as of

Principal

December 31,

Amount

2016

2015

Date Issued

Borrower

In millions of USD

Final Maturity

Interest Rate

December 2003
February 2011
February 2011

February 2011

January 2015

February 2015

June 2016

Multicanal
(1) Cablevisión
(1) Cablevisión
(1) Cablevisión
(2) Cablevisión

(3) Cablevisión
(3) Cablevisión
(6) Cablevisión

80.3
88.2

71.3

223.3

17.2

(4) 80.9
286.3

500.0

-
-

500.0

80.3
4.52

2.75

8.62

0.67

July 2016
February 2018

February 2018

(4) 32.2
286.3

August 2016

February 2018

June 2021

(5) 3.5% to 4.5%
(5) 8.75%
(5) 9.375%
(5) 9.625%
(5) 9.375%
Adjusted Badlar

rate + 4.85%
(5) 9.375%
(5) 6.50%

(1) Use of funds: Refinancing of Notes.
(2) Use of funds: Acquisition of non-financial assets
and financing of imports.
(3) Use: Prepayment of loans and financing of
working capital and capital expenditures.
(4) Loan in Argentine pesos converted into US dollars
at the exchange rate prevailing on January 31, 2015
and December 31, 2015 respectively.
(5) Fixed rate.

(6) Use of funds: i) redemption of the aggregate
amount of the outstanding principal under the Series
V Notes, and unpaid interest plus an applicable
surplus of 2%; ii) redemption of the aggregate amount
of the outstanding principal under each of the Series
I, II, III and IV Notes and unpaid interest; iii) early
repayment of the Syndicated Loan and investment in
fixed assets and other capital expenditures.

115

On February 9, 2015, pursuant to the powers
delegated by the shareholders at the Annual
General Extraordinary and Ordinary
Shareholders’ Meeting of Cablevisión held on
April 28, 2014, the Board of Directors of
Cablevisión approved the issuance, under the
Global Program [for the Issuance of ] Notes
(the "Program"), of Class V notes for a nominal
value of USD 286,377,785.96 (the “Class V
Notes”), at a fixed annual nominal interest rate
of 9.375%, payable semiannually as from
August 2016, with final maturity in February
2018, which were used to refinance a portion
of the debt represented by the outstanding
Notes, which were refinanced, pursuant to the
Trust Agreement executed between Cablevisión,
as issuer, and Deutsche Bank Trust Company
Americas as trustee, co-registrar and paying
agent. As of the date of these financial
statements, Cablevisión had repaid in full the
outstanding principal and interest under the
Class V Notes.

On April 20, 2016, at the Annual General
Ordinary and Extraordinary Shareholders’
Meeting of Cablevisión, the shareholders of
Cablevisión approved, among other matters:
i) the extension of the authorization of the
Program, which had been granted at the
Annual General Ordinary and Extraordinary
Shareholders’ Meeting on April 28, 2014,
increasing the maximum amount of the
outstanding notes that may be issued under this
Program from a nominal value outstanding at
any time of USD 500,000,000 (or its equivalent
in other currencies) to USD 1,000,000,000
(or its equivalent in other currencies). The
Shareholders’ Meeting renewed the delegation
on the Board of Directors of the broadest
powers in connection with the Program. The
Board of Directors may subdelegate all or
some powers interchangeably to one or more
directors or managers of Cablevisión; and ii) the
extension of the authorization of the Short-
Term Debt Securities ("VCPs", for its Spanish
acronym) program under the terms that had
been originally approved. The Shareholders’
Meeting renewed the delegation on the Board
of Directors of the broadest powers in
connection with the Program. The Board of
Directors may subdelegate all or some powers
interchangeably to one or more directors or
managers of Cablevisión.

On June 1, 2016, pursuant to its delegated
powers, the Board of Directors of Cablevisión

authorized the issuance of Class A Notes for a
nominal value of USD 500,000,000 (the “Class
A Notes”), at a fixed annual nominal interest
rate of 6.50%, payable semi-annually as from
June 2016, with final maturity in June 2021.
Proceeds will be used for:

i)The redemption of the aggregate amount
of outstanding principal under the Class V
Notes for USD 286,377,785.96, unpaid
interest, plus an applicable surplus of 2%;
ii) The redemption of the aggregate amount
of the outstanding principal under each
of the Series I, II, III and IV Notes for
USD 12,355,552.00 plus unpaid interest;
iii)The payment of the aggregate principal
amount under the 10-year Notes for
USD 80,325,000.00 on its maturity date,
July 20, 2016;
iv) The prepayment in full of the Syndicated
Loan (as defined below);
v) The investment in fixed assets and other
capital expenditures with the balance of the net
proceeds (approximately USD 89,100,000).

In connection with the Notes issued by
Cablevisión, it has undertaken certain
covenants, including: (i) limitation on the
issuance of guarantees by Cablevisión and its
subsidiaries; (ii) consolidations, mergers,
and sale of assets under certain conditions,
(iii) limitation on incurring debt above certain
approved ratios, (iv) restrictions on certain
payments and on transactions with shareholders
and affiliates under certain conditions, (v)
limitation on the issuance and sale of significant
subsidiaries’ shares with certain exceptions
and (vi) the limitation on the distribution of
dividends for an amount not exceeding
USD 50.0 million for fiscal year 2016 and
USD 15 million for the subsequent years or up
to a maximum of 50% of consolidated net
income of each fiscal year, among others.

During the years covered by these consolidated
financial statements, Cablevisión complied with
the commitments undertaken.

As described above, on June 16, 2016, Cablevisión
redeemed all outstanding principal under the
Class V Notes for USD 286,377,785.96, which
accrued interest at a fixed annual rate of
9.375%, with maturity on February 11, 2018,
at a redemption price equal to 100% of the
outstanding principal and unpaid interest plus
an applicable surplus of 2%; and the aggregate

116

amount of the outstanding principal under
each of the Series I, II, III and IV Notes for
USD 12,355,552.00 which accrued interest at
an annual rate of 8.75%, 9.375%, 9.625% and
9.375%, respectively, with maturity on February
11, 2018, at a redemption price equal to 100%
of the outstanding principal and accrued and
unpaid interest without surplus, in compliance
with the use of proceeds established in the
pricing supplement of the Class A Notes.

On July 19, 2016, Cablevisión repaid in full the
outstanding principal under the 10-year Notes
for USD 80,325,000.00, which accrued interest
at a fixed annual rate of 4.50%, in compliance
with the use of funds established in the pricing
supplement of the Class A Notes.

On January 30, 2015, Cablevisión executed a
syndicated loan agreement with Industrial and
Commercial Bank of China (Argentina) S.A.
(“ICBC”), Banco Itaú Argentina S.A. (“Itaú”),
Banco de la Ciudad de Buenos Aires (“Banco
Ciudad”), Banco Santander Río S.A.
(“Santander”) and Banco Macro S.A. (“Macro”)
for Ps. 700 million, at a variable interest rate
of adjusted BADLAR (average interest rate for
30 to 35 day term deposits of more than Ps. 1
million in Buenos Aires) + 4.85% and with its
final maturity in July 2016, for the purpose
of making a prepayment of principal and
interest owed to ICBC, Itaú and Banco Ciudad
under the syndicated loan agreement executed
on January 31, 2014, in order to finance
working capital and capital investments. In June
2016, this loan was prepaid in compliance with
the use of proceeds established in the pricing
supplement of the Class A Notes.

On January 13, 2015, Cablevisión executed a
financial loan agreement with Nuevo Banco
de Santa Fe S.A. for Ps. 30 million at an annual
fixed nominal interest rate of 29% with final
maturity in July 2015, for the purpose of
increasing its working capital to finance the
development of its core business. As of December
31, 2015, this loan had been canceled.

On July 16, 2015, Cablevisión executed a
financial loan agreement with Nuevo Banco
de Santa Fe S.A. for Ps. 50 million at an annual
fixed nominal interest rate of 28% with final
maturity in January 2016, for the purpose
of increasing its working capital to finance the
development of its core business. In January
2016, this loan was canceled.

On January 18, 2016, Cablevisión executed a
financial loan agreement with Nuevo Banco
de Santa Fe S.A. for Ps. 50 million at an annual
fixed nominal interest rate of 34% with final
maturity in April 2016, for the purpose of
increasing its working capital to finance the
development of its core business. In April 2016,
this loan was cancelled.

On April 19, 2016, Cablevisión executed a
financial loan agreement with Nuevo Banco de
Santa Fe S.A. for Ps. 50 million at an annual
fixed nominal interest rate of 34.25% with
final maturity in July 2016, for the purpose of
increasing its working capital to finance the
development of its core business. In July 2016,
this loan was cancelled.

On July 19, 2016, Cablevisión executed a
financial loan agreement with Nuevo Banco de
Santa Fe S.A. for Ps. 50 million at an annual
fixed nominal interest rate of 30.50% with final
maturity in October 2016, for the purpose of
increasing its working capital to finance the
development of its core business. In October
2016, this loan was cancelled.

On October 18, 2016, Cablevisión executed a
financial loan agreement with Nuevo Banco de
Santa Fe S.A. for Ps. 50 million at an annual
fixed nominal interest rate of 27.5% with final
maturity in January 2017, for the purpose of
increasing its working capital to finance the
development of its core business. In January
2017, this loan was canceled.

On January 19, 2017, Cablevisión executed a
financial loan agreement with Nuevo Banco
de Santa Fe S.A. for Ps. 50 million at an annual
fixed nominal interest rate of 27.5% with
final maturity in April 2017, for the purpose
of increasing its working capital to finance
the development of its core business.

On September 20, 2016, NEXTEL executed
a financial loan agreement with Banco Itaú
Argentina S.A. for USD 3.5 million at an
annual fixed nominal interest rate of 5% with
final maturity in September 2017, for the
purpose of increasing its working capital to
finance the development of its core business.

On January 16, 2017, Cablevisión executed a
loan agreement with Banco ICBC for USD 5.2
million payable in 60 monthly installments at
an annual fixed nominal interest rate of 6%

117

with final maturity in January 2022 for the
purpose of financing imports under its
investment plan.

On February 6, 2017, Cablevisión executed a
loan agreement with Banco ITAU BBA
INTERNATIONAL PLC for USD 5.3 million
payable in 36 monthly installments at an annual
fixed nominal interest rate of 5% with final
maturity in February 2020 for the purpose of
financing imports under its investment plan.

5.12.2 AGEA and subsidiaries
As of December 31, 2016, AGR and Tinta
Fresca had executed overdraft facility agreements
with banks for a maximum of Ps. 77 million
and Ps. 66 million, respectively.

During 2013, Banco Ciudad granted a loan
to AGR in the amount of Ps. 20 million that
accrues interest at an annual fixed rate of
15.25%. Principal was repaid on a quarterly
basis as from February 2015, and interest was
paid on a quarterly basis as from February
2014. During this year, this loan was cancelled.

During 2014, AGR executed two leasing
agreements with Industrial and Commercial
Bank of China (Argentina) S.A. for an aggregate
Ps. 19.6 million (including Ps. 2 million of
nationalization expenses that were subsequently
added) to acquire machinery and equipment.
During June 2014, when the Company
conducted the startup of the above-mentioned
machinery and equipment, it paid 30% of
the total amount due under the agreements.
The outstanding balance is payable in 61
monthly installments as from July 2014, plus
an additional installment for the call option.
The leasing agreements accrue interest at an
annual rate of 15.25%, payable on a monthly
basis as from the startup date.

5.12.3 GCGC
As of December 31, 2016, GCGC was the
borrower under a loan with Banco de la Ciudad
de Buenos Aires executed to finance the repair,
recycling and improvement of the building
for a principal amount of up to Ps. 30 million.
Such loan will be repaid in 60 months, as from
October 2012, with a 24-month grace period,
i.e. in 36 monthly consecutive installments,
accruing interest at the average Badlar rate for
Private Banks plus 100 basic points. The
aggregate amount of the loan was advanced to
the company in several stages, after having

obtained the required professional certifications.
As of the date of these financial statements,
GCGC received the full amount of the loan for
an aggregate Ps. 30 million. As of December 31,
2016, the outstanding principal under the loan
executed with Banco de la Ciudad de Buenos
Aires was Ps. 11 million.

In addition, on January 27, 2016, the Company
executed a loan agreement with Banco
Santander Rio S.A. for Ps. 6 million to purchase
storage due to technological upgrading. The
term of the loan is 36 months with a grace
period of 12 months. Principal will be repaid
in 9 (nine) equal quarterly installments as from
the 12th month. That loan accrues interest
at the average Badlar rate for Private Banks plus
4.5%. Interest is calculated on outstanding
balances and is payable on a quarterly basis.

5.12.4 ARTEAR
On December 6, 2013, ARTEAR and Banco
Itaú Argentina S.A. executed an agreement
whereby ARTEAR is the borrower under a
bilateral loan, within the framework of
Communication “A” 5449 issued by the
BCRA relating to Productive Investment Credit
Facilities, for a principal amount of Ps. 12.9
million, payable within a term of 36 months
in equal consecutive monthly installments. The
first installment is due on month 12, counted
as from origination. The funds were used to
finance a project for the acquisition of capital
assets and manpower to adapt the production
and broadcasting of contents to the
entertainment and news standards of the
television industry. Principal accrues interest at
an annual nominal fixed rate of 15.25% payable
on a monthly basis as from the origination of
the loan. On December 6, 2016, ARTEAR
paid the last installment of the loan. As a result,
there is no outstanding principal as of the date
of these financial statements.

On December 20, 2013 ARTEAR executed a
syndicated loan with Banco Itaú Argentina S.A.
and the Industrial and Commercial Bank of
China (Argentina) S.A. for a principal amount
of Ps. 200 million to be repaid in 2 years in the
following installments: Ps. 35 million due 12
months after disbursement, Ps. 35 million due
18 months after disbursement and Ps. 130
million due 24 months after disbursement. Each
of the banks has a 50% pro rata participation
in the loan. The funds were used to finance
working capital, to make capital expenditures

118

and/or to distribute dividends. Principal accrued
interest at a variable rate established based on
the BADLAR rate for private banks, plus a
4.25% margin, payable on a monthly basis since
the beginning of the loan period.

On June 22, 2015, the Company paid the
second installment of Ps. 35 million on
the outstanding principal under the syndicated
loan. On December 21, 2015, the Company
repaid such syndicated loan in full with the
payment of the last installment in the amount
of Ps. 130 million.

On December 17, 2015, ARTEAR and Banco
Santander Río S.A. executed an agreement
whereby ARTEAR is the borrower under a
bilateral loan for a principal amount of Ps. 150
million, payable within a 3-year term in equal
consecutive quarterly installments. The first
installment is due on month 12, counted as
from the origination of the loan. The funds will
be used to finance working capital and
investments. Principal accrues interest at a

variable annual rate established based on the
BADLAR rate for private banks, plus a 4.50%
margin, payable on a quarterly basis since the
origination of the loan. On December 19,
2016, the Company paid Ps. 16.7 million for
the first installment of the principal under
this loan.

5.12.5 IESA and Subsidiaries
On February 3, 2016, Auto Sports S.A.,
subsidiary of IESA, executed a loan agreement
with Banco Santander Rio S.A. for Ps. 20
million to be allocated to the purchase of goods.
This loan has a term of 36 (thirty six) months
with a grace period of 12 (twelve) months
and accrues interest at an annual variable rate
based on the Badlar rate for Private Banks, plus
a 4.60% margin. Principal will be repaid in
9 (nine) equal quarterly installments as from
the 12th (twelfth) month.

5.13 Sellers Financing
The following table summarizes the
consolidated debt maturities in connection
with the acquisition of companies:

Current Sellers Financing

Without any

established

term

Up to 3

months

From 3 to 6

From 6 to 9

December 31,

months

2016

2015

Due

Total as of

On Capital Stock

1,030,987

980,985

12,244,495

14,256,467

1,874,191

119

5.14 Taxes Payable

Non-Current

Taxes Payable on a National Level

Current

Taxes Payable on a National Level

Taxes Payable on a Provincial Level

Taxes Payable on a Municipal Level

5.15 Other Liabilities

Non-Current

Guarantee Deposits

Unearned Revenue

Call Options (Note 10)

Investment in Unconsolidated Affiliates (Note 5.4)

Other

Current

Advances from Customers

Dividends Payable

Related Parties (Note 16)

Call Options (Note 10)

Unearned Revenue

Other

5.16 Trade Payables and Other

Non-Current

Suppliers and Trade Provisions

Employer’s Contributions

Current

Suppliers and Trade Provisions

Related Parties (Note 16)

Employer’s Contributions

December 31, 2016

December 31, 2015

59,188,405

288,590,887

5,777,723

2,500,284

296,868,894

90,524,218

1,086,577,290

37,706,212

28,711,199

1,152,994,701

December 31, 2016

December 31, 2015

256,239

47,670,000

1,234,644

12,501,185

61,662,068

307,477,354

809,857

3,539,651

119,754,967

76,883,084

508,464,913

211,239

110,990,675

1,775,255

9,873,368

19,334,700

142,185,237

107,589,942

2,248,243

39,490

39,120,000

225,745,016

90,419,165

465,161,856

December 31, 2016

December 31, 2015

1,193,880

26,154,088
27,347,968

1,928,047,164

68,385,785

961,776,858

2,958,209,807

1,692,559

17,864,459
19,557,018

3,309,897,561

94,905,781

1,648,099,256

5,052,902,598

120

5.17 Changes in provisions and allowances

Balance at

(6) Deconsolidation
of

Balances as of

December 31,

Items

the Beginning

Increases

companies

Decreases

2016

2015

Deducted from Assets

Allowance for Bad Debts
Allowance for

Impairment

of Inventories

Allowance for

Impairment of

Property, Plant

and Equipment

and Obsolescence

of Materials

Allowance for

Goodwill impairment
Valuation Allowance (5)
Total

Included in liabilities

Provisions for Lawsuits

and Contingencies

Accrual for Asset

Retirements

Total

272,087,290

(1) 29,819,652

(195,726,226)

(1) (2,789,265)

103,391,451

272,087,290

3,383,333

(2) 3,002,255

(68,019)

22,701,624

(22,701,624)

6,317,569

3,383,333

22,701,624

673,672,977
65,723,325

1,037,568,549

23,594,962
(3) 69,972,510
126,389,379

(594,075,234)
(543,727)

(813,114,830)

-
(5,886,047)

(8,675,312)

103,192,705
129,266,061

342,167,786

673,672,977
65,723,325

1,037,568,549

418,452,169

(4) 150,519,012

(271,389,526)

(4) (73,989,928)

223,591,727

418,452,169

14,023,145

432,475,314

(4) 1,151,708
151,670,720

(10,514,287)

(281,903,813)

(4) -
(73,989,928)

4,660,566

228,252,293

14,023,145

432,475,314

(1) Includes net increases of Ps. 33,914,214 which
have been charged to Selling expenses (see Note 6.3).
(2) Includes Ps. 3,002,255 corresponding to net
increases which have been charged to Impairment
of Inventories and Obsolescence of Materials under
Production Expenses (see Note 6.3).
(3) Charged to Income Tax and Tax on Assets
(4) Includes net increases in the amount of
Ps. 122,876,589 which have been charged to

Contingencies (see Note 6.3) and Ps. 26,620,315
which have been charged to Other Financial
Income, Net.
(5) Includes Valuation Allowance for Net Deferred
Tax Assets and the Valuation Allowance for tax
on assets.
(6) Deconsolidation of balances as of January 1,
2016, as mentioned in Note 13.

Note 6

Breakdown of the main items of the statement of comprehensive income

6.1 Revenues

Advertising Sales

Circulation Sales

Printing Services Sales

TV Signals Sales

Sale of Property
Other Sales
Total (1)

(1) Includes sales executed through barter transactions
as of December 31, 2016 and 2015 for Ps. 285.4 million
and Ps. 169.3 million, respectively.

December 31, 2016

December 31, 2015

5,790,418,652

2,531,217,496

360,960,973

942,484,850

165,959,174
1,587,846,202
11,378,887,347

4,292,814,678

1,995,455,894

322,292,249

395,701,559

48,102,637
1,237,625,371
8,291,992,388

121

6.2 Cost of Sales

Inventories at the beginning of the year

Incorporation of companies
Deconsolidation of Subsidiaries (1)
Purchases for the year

Production and Services Expenses (Note 6.3)

Less: Inventories at year-end

Cost of Sales

(1) See Note 13.

December 31, 2016

December 31, 2015

517,702,414

1,827,136

(4,921,974)

2,075,103,365

5,336,977,418

(923,136,437)

7,003,551,922

297,898,720

23,385,923

(7,493,019)

1,427,018,890

3,698,664,822

(512,780,440)

4,926,694,896

6.3. Production and Services, Selling and Administrative Expenses

Item

Expenses

2016

2015

Production

and Services

Selling

Administrative

December 31,

Total as of

Fees for Services

529,953,422

171,603,494

329,300,939

1,030,857,855

643,904,056

Salaries, Social Security and
Benefits to Personnel (1)
Advertising and Promotion Expenses

Taxes, Duties and Contributions

Bad Debts

Travel Expenses

Maintenance Expenses

Distribution Expenses

Communication Expenses

Contingencies

Stationery and Office Supplies

Commissions

Productions and Co-Productions

Printing Expenses

Rights

Services and Satellites

Severance Payments

Non-Computable VAT
Rentals

Amortization of Intangible Assets

Amortization of Film Library

Depreciation of Property, Plant

and Equipment

Impairment of Inventories and

Obsolescence of Materials

Other Expenses

Total as of December 31, 2016

Total as of December 31, 2015

2,657,392,948

111,646,838

136,625,997

187,170,109

291,280,746

29,824,247

5,377,313

11,345,282

404,209,588

9,209,175

114,059,186

102,513,527

259,615,628

42,708,043
168,818,828

34,417,039

4,109,670

414,973,209

359,373,939

74,872,345

33,914,214

15,342,502

3,898,618

457,545,383

12,032,124

889,831

2,988,159

54,255,976

1,819,768

63,660,785

-
5,818,848

7,972,019

1,040,407,562

4,112,773,719

3,109,277,850

1,917,553

32,250,375

34,424,469

59,529,991

12,188,245

116,609,445

8,775,061

1,033,941

45,512,365

90,024,647

-
6,705,334

18,758,227

361,291,492

218,769,558

33,914,214

186,392,968

250,598,718

748,826,129

54,044,616

122,876,589

23,108,502

55,289,917

231,556,392

156,159,020

27,649,368

132,885,733

157,310,615

497,877,939

46,699,916

55,079,587

17,506,707

26,588,240

404,209,588

321,976,482

9,209,175

114,059,186

149,845,660

413,301,060

42,708,043
181,343,010

61,147,285

4,109,670

32,341,816

21,737,120

94,339,961

126,228,157

30,669,004
132,359,942

43,063,075

3,865,459

103,635,237

3,795,873

10,796,444

118,227,554

85,290,931

3,002,255

130,062,340

3,002,255

(70,615)

44,211,715

55,909,613

230,183,668

135,765,524

5,336,977,418

1,728,968,802

1,864,144,211

8,930,090,431

3,698,664,822

1,202,643,174

1,228,754,283

6,130,062,279

(1) As of December 31, 2016, it includes a recovery of
approximately Ps. 344 million from the calculation of
employer’s contributions as tax credit on VAT by certain
subsidiaries (Decree No. 746/03 issued by the Executive
Branch), as mentioned in Notes 8.3.h. and 8.3.i.

122

6.4 Financial Costs

Financial Discounts on Liabilities

Interest

Exchange Differences

Other Financial Costs

Total

6.5 Other Financial Results, net

December 31, 2016

December 31, 2015

(1,525,079)

(234,028,516)

(30,652,537)

(1,416,875)

(267,623,007)

(147,916,180)

(1,885,312)

(321,993)

(150,123,485)

December 31, 2016

December 31, 2015

Exchange Differences

Interest

Financial Discounts on Assets and Liabilities

Other Taxes and Expenses

Results from transactions with securities and bonds

CER Restatement

Income from Changes in the Fair Value of Financial Instruments

Total

(2,945,871)

50,997,267

(11,710,971)

(174,924,976)

242,085

(218,402)

8,007,795

(130,553,073)

(9,826,705)

9,769,182

(9,366,336)

(145,263,491)

130,082,609

(42,273)

43,802,595

19,155,581

6.6 Other Income and Expenses, net

Income from Sale of Property, Plant and Equipment
Other (1)
Total

(1) For the year 2015, it includes the impact on results
(income) of recognizing past-due trade receivables for
approximately Ps. 95 million.

December 31, 2016

December 31, 2015

37,036,971

18,428,782

55,465,753

(10,723,613)

108,945,667

98,222,054

123

Note 7

Income tax
The following table shows the reconciliation
between the consolidated income tax charged to
net income for the years ended December 31,
2016 and 2015 and the income tax liability that
would result from applying the current tax
rate on consolidated income before income tax
and tax on assets and the income tax liability
assessed for each year (amounts stated in
thousands of Argentine Pesos):

Income before Income Tax

Current Rate

Income Tax Assessed at the Current Tax Rate

on Income before Income Tax

Permanent Differences:

Equity in Earnings from Affiliates and Subsidiaries

Non-Taxable Income

Other

Subtotal

Expired Tax Loss Carryforwards

Valuation Allowance for Net Deferred Tax Assets

Charged to Income

Total Income Tax

Deferred Tax

Current Tax

Income Tax Assessed for the Year

Tax on assets

Total

December 31, 2016

December 31, 2015

488,238

35%

(170,883)

17,054

(59,728)

19,775

(193,782)

(404)

(64,067)

(258,253)

192,770

(451,023)

(258,253)

(5,905)

(264,158)

962,453

35%

(336,858)

21,455

(7,414)

2,620

(320,197)

(1,274)

(30,451)

(351,922)

52,832

(404,754)

(351,922)

(2,653)

(354,575)

124

Breakdown of Consolidated Deferred Tax (in thousands of Argentine pesos):

Deferred Assets

Tax Loss Carryforwards

Inventories

Other Investments

Provisions and Other

Trade Receivables

Other Liabilities

Accounts Payable

Deferred Tax Liabilities

Property, Plant and Equipment

Intangible Assets

Other Assets

Debt

Subtotal

Valuation Allowance on

Tax Loss Carryforwards - (Charges)

December 31,

Changes Year

2016

2015

2016

2015

424,137

33,557

20,381

66,613

64,239

50,919

9,611

669,457

(31,818)

(1,443)

(8,111)

226,342

36,070

19,988

133,612

100,464

10,973

129,432

656,881

(221,992)

(27,279)

(845)

(41,372)

(250,116)

197,795

(2,513)

393

(66,999)

(36,225)

39,946

(119,821)

12,576

190,174

25,836

(7,266)

208,744

(95,398)

(136,770)

(31,874)

(281,990)

(63,524)

145,220

13,814

20,069

(4,907)

32,568

80,397

(419)

21,745

163,267

(59,671)

34,411

626

12,765

(11,869)

(19,501)

(31,370)

Total Net Deferred Tax Assets / (Liabilities)

(1) 532,687

374,891

(2) 157,796

131,897

(1) Comprises Deferred Tax Assets in the amount of
Ps. 532,897 and Deferred Tax Liabilities in the amount
of Ps. 210 as of December 31, 2016, disclosed in the
Consolidated Balance Sheet.
(2) Includes Ps. 24 million as of December 31, 2016
under Assets Held for Distribution to Shareholders.

As of December 31, 2016, the Company’s and
its subsidiaries’ accumulated consolidated tax
loss carryforwards amounted to approximately
Ps. 1,211,821 thousand, which calculated
at the current tax rate, represent deferred tax
assets in the amount of approximately
Ps. 424,137 thousand. The following table
shows the expiration date of the accumulated
tax loss carryforwards pursuant to statutes
of limitations (amounts stated in thousands of
Argentine Pesos):

Expiration year

Amount of Tax

Loss Carryforward

2017

2018

2019

2020

2021

2022

12,006

51,805

339,793

182,211

625,774

232

The Company estimates that the tax loss
carryforwards are recoverable for the net
amounts disclosed.

125

Note 8

Provisions and other contingencies

8.1 Regulatory Framework
a. SCI Resolution No. 50/10 approved certain
rules for the sale of pay television services. These
rules provide that cable television operators
must apply a formula to estimate their monthly
subscription prices. The price arising from the
application of the formula was to be informed to
the Office of Business Loyalty (Dirección de
Lealtad Comercial) between March 8 and
March 22, 2010. Cable television operators must
adjust such amount semi-annually and inform
the result of such adjustment to said Office.

Even though as of the date of these financial
statements the subsidiary Cablevisión cannot
assure the actual impact of the application
of this formula, given the vagueness of the
variables provided by the Resolution to calculate
the monthly subscription prices, Cablevisión
believes that Resolution No. 50/10 is arbitrary
and bluntly disregards its freedom to contract,
which is part of the right to freedom of industry
and trade. Therefore, it has filed the pertinent
administrative claims and has brought the
necessary legal actions requesting the suspension
of the Resolution’s effects and ultimately
requesting its nullification.

Even though Cablevisión, like other companies
in the industry, has strong constitutional
arguments to support its position, it cannot be
assured that the final outcome of this issue
will be favorable. Therefore, Cablevisión and/or
some of its subsidiaries may be forced to modify
the price of their pay television subscription,
a situation that could significantly affect
the revenues of their core business. This creates
a general framework of uncertainty over the
businesses of Cablevisión and/or some of
its subsidiaries that could significantly affect the
recoverability of their relevant assets and Grupo
Clarín S.A.’s assets related to its investment
in Cablevisión. Notwithstanding the foregoing,
as of the date of these financial statements,
in accordance with the decision rendered on
August 1, 2011 in re "LA CAPITAL CABLE
S.A. v/ Ministry of Economy-Secretariat of
Domestic Trade", the Federal Court of Appeals
of the City of Mar del Plata has ordered the
SCI to suspend the application of Resolution
No. 50/10 with respect to all cable television
licensees represented by the Argentine Cable

Television Association ("ATVC", for its Spanish
acronym). Upon being served on the SCI and
the Ministry of Economy on September 12,
2011, such decision became fully effective and
may not be disregarded by the SCI. The
National Government filed an appeal against
the decision rendered by the Federal Court of
Appeals of Mar del Plata to have the case
brought before the Supreme Court. Such appeal
was dismissed and so the National Government
filed a direct appeal with the Supreme Court,
which was also dismissed.

On June 1, 2010, the SCI imposed a Ps. 5
million fine on Cablevisión alleging that it had
failed to comply with the information regime
set forth by Resolution No. 50/10, and invoking
the Antitrust Law to impose such penalty. The
fine was appealed and submitted to the National
Court of Appeals on Federal Administrative
Matters, Chamber No. 5, which decided
to reduce the fine to Ps. 300,000. Cablevisión
appealed this decision by filing an extraordinary
appeal with the Supreme Court of Argentina.

On March 10, 2011 SCI Resolution No. 36/11
was published in the Official Gazette. This
Resolution falls within the framework of
SCI Resolution No. 50/10. Resolution No.
36/11 sets forth the parameters to be applied
to the services rendered by Cablevisión to
its subscribers from January through April 2011.
These parameters are as follows: 1) the monthly
basic subscription price shall be Ps. 109
for that period; 2) the price of other services
rendered by Cablevisión should remain
unchanged as of the date of publication of the
resolution; and 3) the promotional benefits,
existing rebates and/or discounts already granted
as of that same date shall be maintained.
The resolution also provides that Cablevisión
shall reimburse users for any amount collected
above the price set for that period.

Cablevisión believes that Resolution No. 36/10
is illegal and arbitrary, since it is grounded on
Resolution No. 50/10, which is absolutely null
and void. Since the application of Resolution
No. 50/10 has been suspended, the application
of Resolution No. 36/2011, which falls within
the framework of the former, is also suspended.

The claim filed by Cablevisión seeking
the nullification of Resolution No. 50/2010
is currently pending before the Federal

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Administrative Court of First Instance No. 7
of the City of Buenos Aires. This claim was
dismissed in view of the claim pending in the
City of Mar del Plata.

Subsequently, the SCI issued Resolutions Nos.
65/11, 92/11, 123/11, 141/11, 10/11, 25/12,
97/12, 161/12, 29/13, 61/13, 104/13, 1/14,
43/14 and 93/14 pursuant to which the
SCI extended the effectiveness of Resolution
No. 36/11 up to and including September
2014, and adjusted the cable television
subscription price to Ps.152. Cablevisión
believes, however, that given the terms under
which the Federal Court of the City of Mar del
Plata granted the preliminary injunction, that
is, ordering the SCI to suspend the application
of Resolution No. 50/10 with respect to all
cable television licensees represented by ATVC
(among them, Cablevisión and its subsidiaries),
and also given the fact that Resolutions No.
36/11, 65/11, 92/11, 123/11, 141/11, 10/11,
25/12, 97/12, 161/12, 29/13, 61/13,
104/13, 1/14, 43/14 and 93/14 merely apply
Resolution No. 50/10, Cablevisión continues
to be protected by said preliminary injunction,
and, therefore, the ordinary course of its
business will not be affected.

On April 23, 2013, Cablevisión was served
notice of a decision rendered in re
“Ombudsman of Buenos Aires v. Cablevisión
S.A. on Complaint for the protection of
constitutional rights Law 16,986 (Motion for
Preliminary Injunction)” pending before Federal
Court No. 2, Civil Clerk’s Office No. 4 of
the City of La Plata in connection with the
price of cable television subscriptions, whereby
the court imposed a cumulative daily fine of
Ps. 100,000 per day on Cablevisión.

Cablevisión appealed the fine on the grounds
that Resolution No. 50/10 issued by
Mr. Moreno, as well as its extensions and/or
amendments were suspended, as mentioned
above, by an injunction with respect to
Cablevisión and its branches and subsidiaries
prior to the imposition of the fine; pursuant to
the collective injunction issued by the Federal
Court of the City of Mar del Plata on August 1,
2011 in re “La Capital Cable and Others v.
National Government and Others on Preliminary
Injunction”. That injunction suspended the
application of all the criteria set by the Secretariat
of Domestic Trade under Mr. Guillermo Moreno.

The Federal Court of Appeals of the City of
La Plata reduced the fine to Ps. 10,000 per day.
Cablevisión filed an appeal against that decision
in due time and form. On October 16, 2013,
the Court of Appeals dismissed the appeal filed
by Cablevisión. As of the date of these financial
statements, Cablevisión had settled the fine in
the amount of Ps. 1,260,000 and compliance
was recorded in the file.

On June 11, 2013, Cablevisión was served
notice of a resolution rendered in the above-
mentioned case; whereby the court ordered the
appointment of an expert overseer (perito
interventor) specialized in economic sciences
to: (i) verify whether or not the invoices
corresponding to the basic cable television
subscription issued by Cablevisión to subscribers
domiciled in the Province of Buenos Aires,
are actually prepared at the headquarters located
at Gral. Hornos 690, and/or at Cablevisión’s
branch offices, precisely detailing that process,
(ii) identify the individuals responsible for that
area, (iii) determine whether or not the
administrative actions tending towards the
effective compliance with the injunction issued
on that case are underway, and (iv) identify
the senior staff of Cablevisión that must order
the invoice issuance area to prepare the invoices
as decided under that injunction.

Cablevisión timely appealed the appointment
of said expert on the same grounds stated above.
This appeal is also pending before the Federal
Court of Appeals of the City of La Plata.

For the purposes of enforcing the injunction,
the court issued letters rogatory to the
competent judge of the City of Buenos Aires.
Upon the initiation of that proceeding, both
the National Court on Federal Administrative
Matters and the National Court on Federal
Civil and Commercial Matters declined
jurisdiction to enforce the injunction ordered
by the Federal Judge of La Plata. Cablevisión
has appealed the decision in connection
with the lack of jurisdiction in due time
and form. Chamber No. 1 of the National
Court of Appeals on Federal Civil and
Commercial Matters confirmed the appealed
decision. Accordingly, Cablevisión will file
an extraordinary appeal in due time and form
to have the case decided by the Supreme
Court of Argentina.

127

It should be noted that, in light of the corporate
reorganization of Cablevisión, both parties
requested the suspension of the procedural
periods for 180 days. The judge granted
such request. Therefore, the procedural periods
were suspended until December 11, 2014.
Given the decision rendered by the Supreme
Court of Argentina in re “Municipality of
Berazategui v. Cablevisión” mentioned below,
the procedural periods remain suspended until
the Federal Court of Mar del Plata renders a
decision thereon.

The file initiated by the Ombudsman before
the Federal Court of La Plata, was sent to
Mar del Plata, as established by the decision
rendered in re Municipality of Berazategui
v. Cablevisión referred to below, ordering that
the preliminary injunction be revoked because
it contradicts the injunction ordered in the
proceeding initiated by ATVC.

After the Federal Court of the City of Mar del
Plata issued its injunction, several Municipal
Offices of Consumer Information (“OMIC”,
for its Spanish acronym) and several individuals
filed claims requesting that Cablevisión comply
with Resolution No. 50/10 and the subsequent
resolutions that extended its effectiveness.
In some cases, preliminary injunctions were
granted. In every case, Cablevisión appealed
such preliminary injunctions alleging that
Resolution No. 50/10, as amended, and/or the
subsequent resolutions that extended its
effectiveness, had been suspended with respect
to Cablevisión, its branches and subsidiaries
prior to the issuance of such preliminary
injunctions.

On September 23, 2014, the Supreme Court
of Argentina rendered a decision in re
“Application for judicial review brought by
the defendant in the case Municipality of
Berazategui v. Cablevisión S.A. on claim for the
protection of constitutional rights (acción
de amparo)” and ordered that the cases related
to these resolutions continue under the
jurisdiction of the Federal Court of Mar del
Plata that had issued the decision on the
collective action in favor of ATVC.

Decisions made on the basis of these
consolidated financial statements should
consider the eventual impact that the above-
mentioned resolutions might have on

Cablevisión and its subsidiaries, and the
Company’s consolidated financial statements
should be read in light of such uncertainty.

b. Pursuant to the Antitrust Law and to
Broadcasting Law No. 22,285, the transactions
carried out on September 26, 2006 that
resulted in an increase in the indirect interest
the Company held in Cablevisión to 60%,
Cablevisión’s acquisition of 98.5% of Multicanal
and 100% of Holding Teledigital, and
Multicanal’s acquisition of PRIMA (from
PRIMA Internacional (now CMD)), required
the authorization of the CNDC (validated
by the SCI), and the COMFER. On October 4,
2006, the Company, Vistone, Fintech, VLG
and Cablevisión, as purchasers, and AMI CV
Holdings LLC, AMI Cable Holdings Ltd. and
HMTF-LA Teledigital Cable Partners LP, as
sellers, filed for the approval of the acquisition.
After several requests for information, the SCI
issued Resolution No. 257/07, with a prior
opinion of the CNDC in favor of the approval
of the above-mentioned transactions and after
consulting the COMFER and the SECOM,
which did not raise any objections. The
Company was served notice in this respect on
December 7, 2007. Such Resolution was
appealed by five entities. As of the date of
these financial statements, the CNDC
has dismissed the five appeals filed against the
above-mentioned resolution. Four of those
entities filed direct appeals before the judicial
branch, but they were all dismissed.

On June 11, 2008, Cablevisión was served with
a decision of the National Court of Appeals
on Federal Civil and Commercial Matters
revoking a decision rendered by the CNDC on
September 13, 2007, whereby such agency had
dismissed a claim filed by Gigacable S.A. prior
to the December 7, 2007 decision referred to
above. The Court of Appeals revoked CNDC’s
decision only with respect to matters relating to
the conduct of Cablevisión and Multicanal prior
to CNDC’s authorization of the transactions on
December 7, 2007, and ordered an investigation
to determine whether a fine should be
imposed on Cablevisión and Multicanal due to
such conduct. As of the date of these financial
statements, Cablevisión has filed its response,
which is pending analysis by such agency.

c. On December 15, 2008, the shareholders of
Cablevisión approved the merger of Multicanal,

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Delta Cable S.A., Holding Teledigital,
Teledigital, Televisora La Plata Sociedad
Anónima, Pampa TV S.A., Construred S.A.
and Cablepost S.A. into Cablevisión,
whereby, effective as of October 1, 2008,
Cablevisión, as surviving company, became the
universal successor to all of the assets, rights
and obligations of the merged companies.

That process was granted administrative
approval by the CNV and was registered with
the Argentine Superintendency of Legal Entities
(IGJ) under No. 9,448, Book 79 Volume –
Stock Companies on June 7, 2016.

On September 8, 2009, Multicanal was served
with CNDC Resolution No. 106/09, dated
September 4, 2009, whereby the CNDC
ordered an audit to articulate and harmonize the
several aspects of Resolution No. 577/09 issued
by the COMFER, whereby it had rejected the
merger of Cablevisión and Multicanal, with
Resolution No. 257/07 issued by the Secretariat
of Domestic Trade. Resolution No. 106/09 also
sets forth that the notifying companies shall not,
from the enactment thereof and until the end of
the audit and / or resolution of the CNDC, be
able to remove or replace physical or legal assets.

Notwithstanding the required filings made
by Cablevisión and its shareholders on
December 7, 2007 (date on which the SCI
granted authorization) to prove that they were
complying with the commitment agreed with
the CNDC), on September 23, 2009, the
SCI issued Resolution No. 641, whereby it
ordered the CNDC to verify compliance with
the parties’ proposed commitment by visiting
the parties’ premises, requesting reports,
reviewing documents and information and
carrying out hearings, among other things.

On December 11, 2009, Cablevisión notified
the CNDC of the completion and corresponding
verification of the fulfillment of the voluntary
undertakings made by Cablevisión at the time of
the enactment of SCI Resolution No. 257/07.
On December 15, 2009, Chamber No. 2 of the
National Court of Appeals on Federal Civil
and Commercial Matters issued a preliminary
injunction in re “Grupo Clarín S.A. v. Secretariat
of Domestic Trade and other on preliminary
injunctions” (case 10,506/09), partially
acknowledging the preliminary injunction
requested by Grupo Clarín, and instructing the

CNDC and the SCI to notify Grupo Clarín
whenever their own verification of Cablevisión’s
fulfillment of its undertakings had been
concluded, regardless of the result. Should such
agencies have any observations, they should
notify Grupo Clarín within a term of 10 days.
On the same date, the CNDC issued Resolution
No. 1,011/09 whereby it deemed Cablevisión’s
voluntary undertakings unfulfilled and declared
the rescission of the authorization granted
under Resolution No. 257/07.

On December 17, 2009, the National Court
of Appeals on Federal Commercial-Criminal
Matters, Chamber A, decided to suspend
the term to appeal Resolution No. 1,011/09
until the main case was transferred back to
the CNDC, considering it had been in such
court since December 16, 2009.

On December 17, 2009, the CNDC notified
Cablevisión of the initiation of the motion
for execution of Resolution No. 1,011/09. On
December 18, 2009, Chamber No. 2 of the
National Court of Appeals on Federal Civil
and Commercial Matters issued an injunction
in re “Grupo Clarín S.A. v. Secretariat of
Domestic Trade and other on preliminary
injunctions”, which suspended the effects of
Resolution No. 1,011/09 until the notice set
forth in the injunction of December 15, 2009
was served. Accordingly, the CNDC served
notice to Cablevisión by means of Resolution
No. 1,101/09.

On December 30, 2009, Chamber No. 2
of the National Court of Appeals on Federal
Civil and Commercial Matters issued a
preliminary injunction in re “Grupo Clarín S.A.
v. Secretariat of Domestic Trade and other
on preliminary injunctions”, partially
acknowledging Grupo Clarín’s request and
suspending the term for Grupo Clarín
to respond to Resolution No. 1,101/09 until
Grupo Clarín is granted access to the
administrative proceedings related to the
charges brought by the CNDC in its Opinion
No. 770/09 (on which Resolution No.
1,011/09 was based).

On February 19, 2010, Cablevisión requested
the nullification of the notice, and as a default
argument, submitted the response requested
under Resolution No. 1,101/09. On February
26, 2010, the National Court of Appeals on

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Federal Commercial-Criminal Matters approved
the recusation filed by Cablevisión and excluded
the Secretariat of Domestic Trade from the
proceedings.

On March 3, 2010, the Argentine Ministry of
Economy and Public Finance issued Resolution
No. 113 (subscribed by the Minister of
Economy, Dr Amado Boudou) rejecting the
request for the nullification of Resolution
No. 1,011/09, the requests for abstention and
excusation of certain officials, and all the
evidence produced in connection with such
request for nullification. The voluntary
undertakings made by Cablevisión under
Resolution No. 257/07 were deemed
unfulfilled, thus declaring the rescission of
the authorization granted under such
resolution. The parties involved were ordered
to take all necessary actions to comply with
such rescission within a term of six months,
and to inform the CNDC about the progress
made in that respect on a monthly basis.
Such resolution was appealed in due time and
form. The appeal was granted without staying
the execution of judgment.

On April 20, 2010, Chamber No. 2 of the
National Court of Appeals on Federal Civil
and Commercial Matters granted the appeal
filed by Grupo Clarín S.A. in re “Grupo Clarín
on delay in the appeal of the proceedings”,
and decided that the appeal granted by the
CNDC to Grupo Clarín S.A. against Resolution
No. 113/10 had the effect of staying such
resolution. The National Government filed an
appeal asking that the Court of Appeals revoke
its own decision with respect to the effect
granted to the April 20 decision, and that it
decline its jurisdiction. It also filed an appeal to
have the case brought before the Supreme
Court. Both appeals were dismissed. Chamber
No. 2 requested the administrative file to
consider the appeal and render its decision.

On September 17, 2015, the Court rendered
a decision in favor of Cablevisión, revoking
Resolution No. 113/10 in its entirety.
Both parties were served with the decision
on that same date.

The National Government - Ministry of
Economy filed an appeal to have the
case brought before the Supreme Court, which
was substantiated in February 2016.

Subsequently, in March 2016, the appeal filed
by the National Government - Ministry of
Economy and Public Finance was dismissed.
Therefore, SCI Resolution No. 257/07 and the
effects of the authorization are in full force
and effect to date.

On March 31, 2016, the National Government
– Ministry of Economy and Public Finance
filed a direct appeal before the Supreme Court
of Argentina.

Subsequently, the National Government
abandoned the Direct Appeal and the Supreme
Court deemed it abandoned on June 7, 2016.
Therefore, MECON Resolution No. 113/10
is considered to be null and void.

d. On May 31, 2012, Cablevisión was served
notice of Resolution No. 16,819 dated May 23,
2012 whereby the Argentine Securities
Commission (CNV, for its Spanish acronym)
ordered the initiation of summary proceedings
against Cablevisión and its directors, members
of the Supervisory Committee and the Head
of Market Relations for an alleged failure
to comply with the duty to inform. The CNV
considers that Cablevisión failed to comply
with its duty to inform because the investor
community was deprived of its right to become
fully aware of the grounds of a decision
rendered by the Federal Court of Mendoza
and the scope of the powers granted by
that court to the co-administrator appointed in
re “Supercanal S.A. v. Cablevisión S.A. on
protection of constitutional rights”, in addition
to the fact that other self-regulated authorities
were allegedly not notified of the information
furnished by Cablevisión. On June 25, 2012,
Cablevisión filed a response requesting that its
defenses be sustained and all charges dismissed.
On February 6, 2014 Cablevisión submitted
the legal brief for the purpose of discussing the
evidence submitted under File No. 171/2012.
Now the CNV’s Board of Directors has to
render its decision. Cablevisión and its legal
advisors believe that the company has strong
arguments in its favor. Nevertheless, Cablevisión
cannot assure that the outcome of the said
summary proceedings will be favorable to
Cablevisión.

e. Pursuant to CNV Resolution No. 16,834
dated June 14, 2012 notified to the Company
on June 27, 2012, the CNV ordered the

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initiation of summary proceedings against the
Company and the members of its Board of
Directors, Supervisory Committee and Audit
Committee in office at the time of the
occurrence of the events that motivated the
proceedings (September 19, 2008) for alleged
failure to comply with the duty to inform.
Under said Resolution, the CNV argues that
the Company allegedly failed to comply with
the duty to disclose the filing of a claim
against it entitled “Consumidores Financieros
Asociación Civil para su defensa and other v.
Grupo Clarín on/Ordinary”, which the
CNV considers relevant. On July 25, 2012,
Cablevisión filed a response petitioning that its
defenses be sustained and that all charges against
it be dismissed. The legal brief on the evidence
has been submitted. The Company and its
legal advisors believe that the company has
strong arguments in its favor. Nevertheless, the
Company cannot assure that the outcome of
said summary proceedings will be favorable.

f. The Executive Branch of Uruguay issued
Decree No. 73/012, published in the Official
Gazette on March 16, 2012, whereby it
expressly repealed Decree No. 231/011,
which had revoked certain signals’ broadcast
frequencies. However, the new decree ratified
and repeated - virtually in identical terms -
the decree that was being repealed, and added
certain provisions that caused further detriment
to the two affected companies with which a
subsidiary of Cablevisión has contractual
arrangements in place. Consequently, on March
23, 2012 the affected companies filed an
appeal requesting that Decree No. 73/012 be
revoked. The appeal is still pending resolution.

In May 2012, the aforesaid companies brought
a legal action with the Court in Administrative
Litigation Matters requesting the nullification
of the resolution and the suspension of its
execution. This motion to suspend the
execution of the challenged resolution was
brought as a separate case, and progressed
through the corresponding instances. The Office
of the Attorney General for Administrative
Litigation Matters, in its opinion No. 412/013
advised the Court on Administrative Litigation
Matters to grant the motion to suspend the
execution of the challenged resolution for
formal reasons, but the Court dismissed
the motion of suspension. Notwithstanding the
foregoing, as of the date of these financial

statements, the governmental authorities have
not yet enforced the decree.

On September 30, 2014, the Court on
Administrative Litigation Matters through its
decisions No. 416/2014 and No. 446/2014
revoked for formal reasons Decrees No. 73/012
and No. 231/011, respectively.

On March 9, 2015, Decree No. 82/015 was
published in the Official Gazette, whereby the
Executive Branch 1) repealed Decree No.
73/012; 2) 16 common stations are awarded to
be held in common (the same stations) by
BERSABEL S.A. and VISION SATELITAL
S.A. for a term of 15 years: Two of the 16
stations are awarded on a secondary basis, which
means that they may be exposed to interferences
and they do not have the right to bring any
claim in connection thereto; 3) use of existing
stations must cease within 18 months of their
award to mobile service operators; 4) both
companies are expressly authorized to increase
the number of TV signals (stations) included in
their respective services making use of
digitization techniques; 5) both companies shall
submit before the Communication Services
Regulatory Agency (“URSEC”, for its Spanish
acronym), within a fixed term of 60 calendar
days as from the date of publication of the
Decree, a technical plan for the migration and
release of stations, which plan shall be assessed
and approved by such agency (such plan was
submitted on May 7, 2015); 6) the Bidding
Terms governing the bid for frequency bands
that were owned by both companies shall
include an economic compensation mechanism
for both companies to cover the expenses
incurred in adapting their systems to the new
stations awarded to them, in the amount of
USD 7,000,000.

Even though both companies’ request for the
annulment of Decree No. 153/012 was granted
for formal reasons (failure to serve prior notice)
by the Court on Administrative Litigation
Matters (decision 455 of June 11, 2015), this
decision does not change prior considerations
about the terms of Decree No. 82/015 with
respect to both companies due to the fact that
Decree No. 305/015 (which substituted Decree
No. 153/012) confirmed the allocation of
channels 21 through 36 (512 MHz - 608 MHz)
and 38 through 41 (614 MHz - 638 MHz), of
6 MHz each, in the UHF band exclusively for

131

rendering accessible, free, digital broadcast
television services all over the country, except
for channels 35 (596-602 MHz), 36 (602-608
MHz) and 38 through 41 (614-638 MHz) only
in the geographic area for which BERSABEL
S.A. and VISION SATELITAL S.A. had
received authorization, which will be used solely
for rendering television services to subscribers
through the codified UHF system, as it had
been previously and expressly stated in Section
5 of Decree No. 82/015 (which repealed
and amended the language of Section 1 of the
above-mentioned Decree No. 153/012).

g. On June 4, 2012, the Federal Court of
Appeals of Rosario partially confirmed
SCI Resolution No. 219/2010, whereby the
Secretariat of Domestic Trade found that
Cablevisión and Multicanal had engaged in
market sharing practices in connection with the
paid-television service in the City of Santa Fe
and reduced the fine imposed on each of
the companies involved from Ps. 2.5 million to
Ps. 2 million. However, this decision is not
yet final, because Cablevisión and Multicanal
and the Ministry of Economy filed appeals,
which are still pending before that Court of
Appeals. On October 21, 2014, the Argentine
Supreme Court dismissed the appeals;
therefore, Resolution No. 219/10 became final.

The case is currently pending with the Court
of Appeals of Rosario, which shall order its
referral to the SCI. The SCI, in turn, shall serve
notice to the companies involved in order for
them to pay the fine.

h. On March 1, 2011, the SCI served notice
to Multicanal and Cablevisión of Resolution
No. 19/11 whereby the Secretariat of Domestic
Trade found that both companies had engaged
in market sharing practices in connection
with the paid-television service in the City of
Paraná and imposed a fine of Ps. 2.5 million on
each of them. Cablevisión filed an appeal in
due time and form. This appeal was dismissed
by the Federal Court of Appeals of Paraná.
Therefore, Cablevisión filed an appeal with the
Argentine Supreme Court. On November 4,
2011, the appeal of SCI Resolution No. 19/11
filed by Cablevisión with the Supreme Court
was partially granted by the Federal Court of
Appeals of Paraná.

On August 30, 2012, the Argentine Supreme
Court dismissed the appeal filed by Cablevisión;
therefore, Resolution No. 19/11 became final.
The case is currently pending with the Court
of Appeals of Paraná, which shall order its
referral to the SCI. The SCI, in turn, shall serve
notice to the companies involved in order for
them to pay the fine.

i. Cablevisión, by itself and as successor of
Multicanal’s operations after the merger,
is a party to several administrative proceedings
under the Antitrust Law, facing charges of
anticompetitive conduct, including territorial
division of markets, price discrimination,
abuse of dominant position, refusal to deal
and predatory pricing, as well as a proceeding
filed by the Cámara de Cableoperadores
Independientes (Chamber of Independent
Cable Operators), challenging the transactions
consummated on September 26, 2006. While
Cablevisión believes that its conduct and
that of Multicanal have always been within the
bounds of the Argentine Antitrust Law and
regulations and that their positions in each of
these proceedings are reasonably grounded,
it can give no assurance that any of these cases
will be resolved in its favor.

j. On January 22, 2010, Cablevisión was served
notice of CNDC Resolution No. 8/10 issued
within the framework of file No. 0021390/2010
entitled “Official Investigation of Cable
Television Subscriptions (C1321)”. Pursuant
to this Resolution, Cablevisión, among
other companies, was ordered to refrain from
conducting collusive practices and, particularly,
from increasing the price of cable television
subscriptions for a term of 60 days, counted as
from the date compliance with all required
notices is certified in the records of the case.
As established by that Resolution, companies
that have already increased the price of the
subscriptions shall return to the price applicable
in November 2009 and maintain such price
for the above-mentioned term.

On February 2, 2010, by means of Resolution
No. 13/10, the CNDC ordered Cablevisión
to refund to its subscribers in the March 2012
invoices the amount of any price increase made
after the date of CNDC Resolution No. 8/10.

Cablevisión appealed both resolutions in due
time and form and their effects were suspended

132

by an injunction issued by Chamber No. 2 of
the National Court of Appeals on Federal Civil
and Commercial Matters at the request of
Cablevisión. The National Government filed
an appeal with the Supreme Court against
this decision, and the appeal has been dismissed.

On October 4, 2011, Chamber No. 2 of the
National Court of Appeals on Federal Civil and
Commercial Matters granted the appeal filed
against both decisions in re “Cablevisión and
Other on Appeal against the Decision rendered
by the National Antitrust Commission” (File
1,473/2010), declaring Resolution No. 8/10
moot and nullifying Resolution No. 13/10.

The National Government filed an appeal
with the Supreme Court of Argentina against
the decision rendered by Chamber No. 2,
which was granted, but it was dismissed by the
Supreme Court of Argentina.

k. On October 28, 2010, Cablevisión was
served notice of the National Administration of
Domestic Trade’s resolutions imposing two fines
of Ps. 5 million each, for allegedly failing to
observe the typographic character requirements
under applicable regulations (Resolution
906/98) when informing its subscribers of the
increase in the price of their cable television
subscriptions. Cablevisión appealed the fines on
November 12, 2010 because it believes it has
strong grounds in its favor. However, it cannot
assure that the outcome will be favorable.
One of the files was assigned No. 1280 and is
pending before Chamber No. 1 of the Federal
Administrative Court of Appeals, and the other
one was assigned No. 1,278 and is pending
before Chamber No. 5 of the Federal
Administrative Court of Appeals.

l. The litigation brought before the Civil,
Commercial, Mining and Labor Court of the
City of Concarán, Province of San Luis, in
early 2007 in re “Grupo Radio Noticias SRL v.
Cablevisión and others”, is still pending
before the Federal Court in Administrative
Matters No. 2.

The purpose of that claim was to challenge the
share transfers mentioned in Note 8.1.c.
and to request the revocation of Cablevisión’s
broadcasting licenses. Cablevisión has responded
to such claim and believes it is very unlikely
that it will be admitted. The claimant has

abandoned the claim it had brought, and the
claimant’s attorney must provide evidence of his
attorney powers.

m. The Government of the City of Mar del
Plata enacted Ordinance No. 9163, governing
the installation of cable television networks.
Such ordinance was amended and restated by
Ordinance No. 15,981 dated February 26,
2004, giving cable companies until December
31, 2007 to adapt their cable networks to the
new municipal requirements. The ordinance sets
forth that in those areas where street lighting
has underground wiring, cable television
networks are to be placed underground. In this
sense, the Executive Department of the
Municipality of General Pueyrredón has
submitted to the Municipal Council a proposed
ordinance extending the term provided until
December 31, 2015. Such ordinance is ready for
discussion by legislators. Even though the
ordinance provides for certain penalties that
may be imposed, the City has not imposed such
penalties to cable systems that are not in
compliance with such ordinance.

n. On November 27, 2012 the National
Administration of Domestic Trade served
Cablevisión with Resolution No. 308/2012,
whereby it imposed a Ps. 5 million fine
on that company alleging that it had failed to
comply with Section No. 4 of the Antitrust
Law (increase in the subscription price of cable
television services/wrongful information
provided by Customer Service, which informed
by mail that SCI Resolution No. 50/10 and
the supplementing resolutions are suspended on
grounds of unconstitutionality, when in fact
they have been suspended by an injunction).
On December 11, 2012 Cablevisión appealed
Resolution No. 308/2012. The administrative
file No. S01:0312056/2011 was sent by the
National Administration of Domestic Trade to
the National Court of Appeals on Federal
Administrative Matters. It is now pending
before Chamber No. 1 in re “Cablevisión SA v.
DNCI Res. 308/12 and Other” (File 140/13).
A decision has not been rendered yet.

Cablevisión and its legal advisors believe
that the company has strong arguments in its
favor. Nevertheless, Cablevisión cannot
assure that the revocation of the fine will be
resolved in its favor.

133

o. On July 5, 2013, the National Administration
of Domestic Trade served notice to Cablevisión
of Resolution No. 134/2013, whereby it imposed
a fine of Ps. 500,000 for breach of Section
of Section 2 of Resolution ex S.I.C. y M. No.
789/98, which regulates the Business Loyalty
Law No. 22,802. Cablevisión appealed that
resolution on July 16, 2013. The administrative
file was sent by the National Administration
of Domestic Trade to the National Court of
Appeals on Federal Administrative Matters.
It is now pending before Chamber No. 3 in re
“Cablevisión SA v. DNCI Res. 134/13
and Other” (File 36044/13). On May 20, 2014,
Chamber No. 3 partially granted the appeal
filed by Cablevisión and reduced the fine
to Ps. 300,000 and ordered that each party
shall bear its own legal costs. On June 9, 2014,
Cablevisión filed an appeal with the Argentine
Supreme Court. On September 18, 2014,
Cablevisión was served notice of the
extraordinary appeal filed by the National
Government, and on October 2, 2014 that
company filed a response. On October 9,
2014, the Chamber dismissed both appeals.

On October 08, 2010, the National
Administration of Domestic Trade served notice
to Cablevisión of Resolution No. 697/2010,
whereby it imposed a fine of Ps. 500,000
for breach of Section 21 of the Business Loyalty
Law No. 22,802. Cablevisión appealed that
resolution on October 26, 2010. The
administrative file was sent by the National
Administration of Domestic Trade to the
National Court of Appeals on Federal
Administrative Matters. It is now pending before
Chamber No. 3 in re “Cablevisión SA v.
DNCI Res. 697/2010 (File S01:80822/10) and
Other” (File 1,277/2011). On December 29,
2011 the Court of Appeals dismissed the appeal
filed by Cablevisión, and imposed court costs
on Cablevisión. On February 22, 2012,
Cablevisión filed an appeal with the Argentine
Supreme Court. The appeal was dismissed
by the Chamber on April 10, 2012. On April 26,
2012, Cablevisión filed an appeal against the
above-mentioned dismissal. The Supreme Court
of Argentina granted the appeal and revoked
the decision against which Cablevisión had filed
the appeal with legal costs to be borne by the
National Administration of Domestic Trade, and
ordered that the case be sent back to the court
of first instance for it to render a new decision
based on the precedent indicated in its ruling.

p. On March 16, 2012, CNV issued Resolution
No. 16,765 whereby it ordered the initiation
of summary proceedings against Cablevisión, its
directors and members of the Supervisory
Committee for an alleged failure to comply with
the duty to inform. The CNV considers that
Cablevisión failed to comply with its duty
to inform because the investor community was
deprived of its right to become fully aware of the
Decision rendered by the Supreme Court of
Argentina in re "Application for judicial review
brought by the National Government Ministry of
Economy and Production of the case Multicanal
S.A. and other v/CONADECO Decree No.
527/05” and other, and also considers that
Cablevisión did not disclose certain issues related
to the information required by the CNV in
connection with its Class 1 and 2 Noteholders’
Extraordinary Meetings held on April 23, 2010.
On April 04, 2012, that company filed a
response requesting that its defenses be sustained
and that all charges against it be dismissed. The
discovery stage has been closed and the company
submitted the legal brief. Cablevisión and its
legal advisors believe that the company has strong
arguments in its favor. Nevertheless, Cablevisión
cannot assure that the outcome of said summary
proceedings will be favorable.

q. On August 28, 2015, Cablevisión was
served notice of Resolution No. 17,769 dated
August 13, 2015 whereby the CNV ordered
the initiation of summary proceedings against
Cablevisión and its directors, members of
the Supervisory Committee and the Head of
Market Relations for an alleged delay in the
submission of the required documentation.
The CNV considers that Cablevisión failed to
comply with effective regulations because it filed
certain documentation outside the regulatory
term set by CNV rules (as restated in 2013, as
amended). Cablevisión, as well as its directors,
members of the Supervisory Committee
and Head of Market Relations filed a response
in due time and form requesting that its
defenses be sustained and all charges dismissed.
Cablevisión and its legal advisors believe that
the company has strong arguments in its favor.
Nevertheless, Cablevisión cannot assure that
the outcome of the said summary proceedings
will be favorable to Cablevisión. On January
20, 2016, the preliminary hearing was held
pursuant to Section 138 of Law No. 26,831 and
Article 8, Subsection b.1. of Section II, Chapter
II, Title XIII of the Regulations (T.R. 2013).

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8.2 Claims and Disputes with Governmental

Agencies
a. In connection with the decisions made at
the Company’s Annual Ordinary Shareholders’
Meeting held on April 28, 2011, on September
1, 2011 the Company was served with a
preliminary injunction in re “National Social
Security Administration v. Grupo Clarín S.A.
re ordinary proceeding” whereby the Company
may not in any way dispose, in part or in whole,
of the Ps. 387,028,756 currently recorded under
the retained earnings account, other than to
distribute dividends to the shareholders.

On the same date, the Company was served
with a claim brought by Argentina’s National
Social Security Administration requesting the
nullity of the decision made on point 7
(Appropriation of Retained Earnings) of the
agenda of the Annual Ordinary Shareholders’
Meeting held on April 22, 2010. As of the
date of these financial statements, the Company
has duly answered the complaint, the parties
have produced evidence and made allegations.

On November 1, 2011, the CNV issued
Resolution No. 593, which provides that at
shareholders’ meetings in which financial
statements are considered shareholders must
expressly decide to, either distribute as
dividends any retained earnings that are not
subject to distribution restrictions and that may
be disposed of pursuant to applicable law
or capitalize such retained earnings and issue
shares, or appropriate them to set up reserves
other than legal reserves, or a combination
of the above.

On July 12, 2013 the Company was served
notice of Resolution No. 17,131; dated as of
July 11, 2013 whereby the CNV declared
that the administrative effects of the decisions
adopted at the Annual General Ordinary
Shareholders’ Meeting held on April 25, 2013
were irregular and ineffective, based on
allegations that are absolutely false and
irrelevant. According to the Company and its
legal advisors, Resolution No. 17,131 is, among
other things, null and void, because it lacks
sufficient grounds and its enactment is a clear
abuse of authority and a further step in the
National Government’s attempt to intervene in
the Company. On October 11, 2013 Chamber
No. 5 of the National Court of Appeals
on Federal Administrative Matters issued a

preliminary injunction in re “Grupo Clarín S.A.
v. CNV – Resol No. 17.131/13 (File 737/13)”
File No. 29,563/2013, whereby it suspended the
effects of Resolution No. 17.131/2013 dated
July 11, 2013 which had rendered irregular and
with no effect for administrative purposes the
Company’s Annual Ordinary Shareholders’
Meeting held on April 25, 2013. As of the date
of these financial statements, the preliminary
injunction is still in effect.

In August 2013 the Company was served with a
nullification claim brought by Argentina’s
National Social Security Administration relating
to the Annual Ordinary Shareholders’ Meeting
held on April 28, 2011 whereby it requested the
nullity of all the decisions made at such meeting
and, as a default argument, the nullity of the
decisions made on points 2, 4 and 7 of that
meeting’s agenda, as well as the nullity of the
decisions made at the Extraordinary Meetings of
Class A, B and A and B Shareholders. As of the
date of these financial statements, the Company
had duly answered the complaint.

On September 17, 2013 the Company was
served with a nullification claim brought by
Argentina’s National Social Security
Administration relating to the Annual Ordinary
Shareholders’ Meeting held on April 26, 2012
whereby it requested the nullity of all the
decisions made at such meeting and, as a default
argument, the nullity of the decisions made on
points 8 and 4 of that meeting’s agenda, as well
as the nullity of the decisions made at the
Extraordinary Meetings of Class A, B and A and
B Shareholders. As of the date of these financial
statements, the Company had duly answered
the complaint.

On March 21, 2014, the Company was served
notice of a claim brought by Argentina’s National
Social Security Administration in re “National
Social Security Administration v. GRUPO
CLARÍN S.A. on Ordinary Proceeding” File No.
74,429, pending before the National Court of
First Instance on Commercial Matters No. 17,
Clerk’s Office No. 34. This claim seeks to nullify
and challenge the corporate decisions made at the
Shareholders’ Meeting held on April 25, 2013
and those made at the Board of Directors’
Meeting held on April 26, 2013. As of the date
of these financial statements, a response to the
claim had been filed.

135

On September 16, 2014, the Company
received a communication from its controlling
shareholder, GC Dominio S.A., whereby
that company informed that it had been
summoned to court as a third party in
re “National Social Security Administration v.
Grupo Clarín S.A. on Ordinary Proceeding”,
pending before the National Court of First
Instance on Commercial Matters No. 17,
Clerk’s Office No. 33. As of the date of these
financial statements and as informed by GC
Dominio S.A., that company has filed a
response to the above-mentioned claim.

According to the Company and its legal
advisors, the outstanding claims requesting the
nullification of the Shareholders’ Meetings have
no legal grounds. Therefore, they believe that
the Company will not have to face adverse
consequences in this regard.

b. The Argentine Federal Revenue Service
(“AFIP”) served the subsidiary CIMECO with a
notice challenging its income tax assessment
for fiscal years 2000, 2001 and 2002. In such
notice, the AFIP challenged mainly the
deduction of interest and exchange differences
in the tax returns filed for those years. If AFIP’s
position prevails, CIMECO’s maximum
contingency as of December 31, 2016 would
amount to approximately Ps. 12.3 million for
taxes and Ps. 42.7 million for interest.

CIMECO filed a response, which was dismissed
by the tax authorities. The tax authorities
issued their own official assessment and
imposed penalties. CIMECO appealed the tax
authorities’ resolution before the National
Tax Court on August 15, 2007.

During the year ended December 31, 2010,
CIMECO received a pro forma income
tax assessment from the AFIP for fiscal periods
2003 through 2007, as a consequence of
AFIP’s challenge to CIMECO’s income tax
assessments for the periods 2000 through 2002
mentioned above. CIMECO filed a response
before AFIP, rejecting such assessment and
requesting the suspension of administrative
proceedings until the Federal Tax Court renders
its decision on the merits.

During 2011, the AFIP served CIMECO with
a notice stating the income tax charges assessed
for years 2003 through 2007 and ordering the

initiation of summary proceedings. The
AFIP’s assessment shows a difference in its
favor in the Income Tax liability for the
periods indicated above for an amount in
excess of the amount that had been estimated
originally, as a result of the method used to
calculate certain deductions. CIMECO
responded to the assessment rejecting all of
the adjustments and requesting that the
proceedings be rendered without effect and
filed, with no further actions to be taken.

On April 26, 2012, the AFIP issued a new
official assessment comprising the fiscal years
2003 through 2007, in which it applied the
same method for the calculation as that used for
the administrative settlement, claiming a total
liability of Ps. 120 million. On May 21, 2012,
an appeal was filed with the Federal Tax Court.

CIMECO and its legal and tax advisors believe
CIMECO has strong grounds to defend
the criteria adopted in their tax returns and that
AFIP’s challenges will not be admitted by the
Federal Tax Court. Accordingly, CIMECO has
not booked an allowance in connection with
the effects such challenges may have.

c. On September 10, 2010, the AFIP served
TRISA with a notice with objections to its
income tax assessment, with respect to the
application of the withholding regime set forth
under the section following section 69 of the
Income Tax law, for fiscal years 2004, 2005
and 2006. If AFIP’s position prevails, TRISA’s
contingency would amount to approximately
Ps. 28.9 million, out of which Ps. 9.3
million would correspond to taxes on dividend
payments made during those years, Ps. 6.5
million to a 70% fine on the omitted tax,
and Ps. 13.1 million to late-payment interest,
calculated as of the date of the AFIP’s tax
assessment.

TRISA filed a response, which was dismissed
by the tax authorities. On December 20, the tax
authorities issued their own official assessment
and imposed penalties. TRISA appealed the
tax authorities’ resolution before the National
Tax Court on February 8, 2011.

TRISA and its legal and tax advisors believe
that TRISA has strong grounds to defend its
position and that AFIP’s challenges will
not be admitted by the Federal Tax Court.

136

Accordingly, TRISA has not booked a provision
in connection with the effects such challenges
may have.

d. On August 13, 2012, the parent company
GC Dominio S.A. was served notice of a claim
brought by the Argentine Superintendency of
Legal Entities (IGJ) whereby that agency seeks
to annul the registration with the Public
Registry of Commerce of the appointment of
GC Dominio S.A.’s authorities, approved at the
Shareholders’ Meeting held on May 17, 2011.
The claim is pending before the Federal Court
of First Instance on Commercial Matters No.
25, Clerk’s Office No. 49 (“Inspección General
de Justicia v. Dominio S.A. on/Ordinary”, File
No. 58652). The claim brought by the IGJ
seeks to annul the registration with IGJ of the
appointment of GC Dominio S.A.’s authorities,
approved at the Annual General Ordinary
Shareholders’ Meeting of GC Dominio held on
May 17, 2011. The appointment was registered
with the IGJ on April 23, 2012 under No.
7147, Book No. 59 of Share Companies.
According to the IGJ and as the case file is said
to show, GC Dominio has allegedly failed to
comply with certain regulations applicable
to foreign shareholders upon registration of the
appointment of authorities. Also within the
framework of this claim, the Court issued
an injunction in favor of the IGJ ordering that
the existence of this claim be duly noted. The
Chamber has confirmed the decision to order
that the existence of this claim be duly noted.

GC Dominio S.A.’s legal advisors have strong
grounds to argue that the resolution of IGJ’s
claim seeking the de-registration of the
appointment of authorities has serious defects
and infringes the guarantees of reasonableness
and due process; a principle that derives
from the constitutional guarantee of defense in
court, which entails the right to be heard
and to produce evidence to contradict a claim.
GC Dominio S.A. has appealed such injunction
because it considers that the IGJ has not shown
that its legal arguments are, at least, plausible.

e. As a result of a suspicious transaction report
issued by the Argentine Federal Revenue Service
(“AFIP”) relating to transactions carried out
between the Company and certain subsidiaries,
the Financial Information Unit (“FIU”) pressed
criminal charges for alleged money laundering.
The action is now pending before Federal Court

No. 9, under Dr. Luis Rodriguez. The FIU
has pressed charges against the Company and
its directors for alleged money laundering
activities related to the trading of shares between
the Company and some of its subsidiaries.
The Company has appointed defense attorneys
and has requested a copy of the file to
understand the details of the charges. The FIU
is acting as plaintiff in this case. One of the
Company’s directors made a spontaneous
appearance and filed a response and produced
documentary evidence. Certain charges pressed
by Representative Di Tullio were also added
to the case. In addition, the Prosecutor
requested that the charges be investigated and
that certain evidentiary measures be taken
which have not yet been fulfilled as of the date
of these financial statements.

In March 2014, the intervening prosecutor
Miguel Angel Osorio broadened the request
for evidence with regard to intercompany
movements between Cablevisión and certain
subsidiaries, all of which were regular and
had been duly recorded.

The Company and its legal advisors consider
that there are strong arguments in the
Company’s favor, and have gathered evidence
that supports the lack of involvement of anyone
in any such unlawful maneuvers. However,
they cannot assure that the outcome of this
action will be favorable.

f. By means of Resolution 16,364/2010, dated
and notified to AGEA as of July 15, 2010,
the CNV’s Board of Directors decided to
initiate summary proceedings against AGEA
and certain current and past members of its
board of directors and supervisory commission,
for alleged infringement of the Argentine
Business Associations Law, Decree No. 677/01
and Law No, 22,315. AGEA, and the current
and past members of the Board of Directors
and supervisory commission who are subject to
the summary proceedings, duly filed their
respective responses.

g. The subsidiary AGEA received several
inspections from the AFIP aimed at verifying
compliance with the so-called competitiveness
plans implemented by the National Executive
Branch. After several reports issued by the AFIP
and the corresponding Resolutions issued by the
Ministry of Economy, such agencies allege that

137

certain acts performed by AGEA during 2002
lead to the nullity of some of the benefits
granted under said plans, including adjustments,
for an estimated total amount of Ps. 65 million.
In April 2013, AGEA was served with AFIP
Resolution No. 03/13, whereby such agency
decided to exclude AGEA from the Registry of
Beneficiaries of the Competitiveness and
Employment Generation Agreements under the
Cultural Sector Agreement, as from March 4,
2002. The AFIP ordered the restatement of the
tax returns and the remittance of the
corresponding amounts. AGEA filed an appeal
against such resolution. Notwithstanding the
foregoing, in re “AEDBA and Other v. Ministry
of Economy Resolution No. 58/10”, the
Federal Court on Administrative Matters No. 6
issued an injunction ordering AFIP to refrain
from initiating and/or continuing with the
administrative proceeding/s and/or any act that
would entail the enforcement of the amounts
payable under Resolution No. 3/13, until a final
decision is rendered. Notwithstanding the
foregoing, AGEA cannot assure that the appeal
will be resolved in its favor.

h. On April 9, 2013, Cablevisión was served
notice of AFIP Resolution No. 45/13 dated
April 3, 2013, whereby such agency imposed
penalties in a summary proceeding against
that company with respect to compliance with
General Resolution No. 3,260/12. Cablevisión
filed an appeal, which has staying effects on
the execution of those penalties.

i. Pursuant to Resolution No. 17,522 issued on
September 18, 2014 and notified to AGEA
on September 24, 2014, the Board of Directors
of the CNV decided to initiate summary
proceedings against AGEA, certain current and
past members of its Board of Directors and
supervisory commission –who occupied those
positions between September 19, 2008 and the
present date- and against that company’s Head
of Market Relations, for an alleged failure to
comply with the duty to inform that AGEA was
a co-defendant in re “CONSUMIDORES
FINANCIEROS ASOCIACION CIVIL PARA
SU DEFENSA AND OTHER V. GRUPO
CLARIN S.A. AND OTHER on EXPEDITED
SUMMARY PROCEEDING” (File No.
065441/08). The summary proceeding is
grounded on an alleged failure to comply with
Article 5, subsection a), the first part of Article
6 and Article 8, subsection a) part V) of the

Annex to Decree No. 677/01; with Articles 1,
2 and 3, subsection . 9) of Chapter XXI of
the REGULATIONS (T.R. 2001 as amended)
–now Article 1 of Section I, Chapter I, Title
XII of the REGULATIONS (T.R. 2013
as amended); with Articles 2 and 3 subsection .
9) of Section II, Chapter I, Title XII of the
REGULATIONS (T.R. 2013 as amended);
with Article 11 subsection a.12) of Chapter
XXVI of the REGULATIONS (T.R. 2001
as amended) –now Article 11 subsection 13)
of Section IV, Chapter I, Title XV of the
REGULATIONS (T.R. 2013 as amended);
with Article 99 and 100 of Law No. 26,831;
and with Articles 59 and 294 subsection . 9) of
Law No. 19,550. AGEA, and the current and
past members of the Board of Directors and
supervisory commission who are subject to the
summary proceedings, duly filed their
respective responses. On February 11, 2015,
the preliminary hearing was held pursuant
to Article 8, subsection b.1.), Title XIII,
Chapter II, Section II of the Regulations (T.R
2013, as amended). On August 19, 2015, the
company submitted the legal brief for the
discovery stage.

j. On February 27, 2013, the AFIP served
IESA with a notice stating the income tax and
value added tax charges assessed for fiscal
period 2008 and ordering the initiation of
summary proceedings for alleged omitted taxes.
The AFIP mainly challenged the deduction
of certain expenses and fees, as well as the
calculation of the corresponding tax credit.
IESA filed an appeal in connection with such
order, which is currently pending before the
National Tax Court. The official assessment
amounts to Ps. 1.4 million for income tax and
Ps. 2.8 million for late-payment interest,
calculated as of December 31, 2016.

The official value-added tax assessment
amounts to Ps. 0.8 million for tax differences
and Ps. 1.8 million for late-payment interest,
calculated as of December 31, 2016.

On October 21, the AFIP served IESA with
a notice stating the income tax and value added
tax charges assessed for fiscal period 2009 and
ordered the initiation of summary proceedings
for alleged omitted taxes. In this case, the AFIP
mainly challenged the deduction of fees, as
well as the calculation of the corresponding tax
credit. IESA filed an appeal in connection

138

thereto, which is currently pending before
the National Tax Court. The official assessment
amounts to Ps. 1.2 million for income tax
and Ps. 2.8 million for late-payment interest,
calculated as of December 31, 2016.

The official value-added tax assessment
amounts to Ps. 0.5 million for tax differences
and Ps. 1.2 million for late-payment interest,
calculated as of December 31, 2016.

IESA and its legal and tax advisors believe that
it has strong arguments in its favor to defend
the criterion adopted in its tax returns.

8.3 Other Claims and Disputes
a. On June 22, 2007, TSC executed several
documents with AFA, applicable from the
2007/2008 until the 2013/2014 soccer seasons,
whereby TSC held all the broadcasting rights for
ten of the Argentine soccer first division official
tournament matches played each week.

On August 13, 2009 AFA notified TSC of
its decision to terminate unilaterally the above-
mentioned agreement. TSC challenged AFA’s
unilateral termination of the agreement and,
in order to safeguard its rights, on June 15,
2010 it brought a legal action against A
FA before a commercial court for contractual
breach and damages.

AFA summoned the National Government
as a third party, and the National Government
was incorporated to the proceedings. The
National Government requested that the case
be submitted to the Court on Federal
Administrative Matters. The request was
dismissed by the Commercial Court of Appeals,
which ratified the jurisdiction of the
Commercial Court.

The National Government filed an appeal in
connection with the jurisdictional conflict,
with the Supreme Court of Argentina, which
dismissed the appeal and ordered that the
file be submitted to the Court of First Instance.
On September 5, 2016, the judge ordered
discovery proceedings, and established that the
hearing provided under Section 360 of the Civil
and Commercial Procedure Code of Argentina
would be held on June 5, 2017.

b. On January 31, 2012, FADRA informed
Grupo Carburando’s subsidiary Mundo Show

S.A. of the unilateral rescission of the agreement
executed in 2006 whereby FADRA assigned
to that company the rights comprising image,
sound and static advertising of motor racing
at the road racing events Turismo Carretera and
TC Pista until December 31, 2015. Mundo
Show S.A. has challenged and rejected FADRA’s
unilateral rescission of the agreement. In light
of the events, Mundo Show S.A. will not be
able to sell or export the audiovisual and static
advertising rights of the above-mentioned motor
racing events. Therefore, in 2012 an allowance
was set up for impairment of goodwill
and other assets related to such agreement of
approximately Ps. 17 million. On July 17, 2013,
some of the Company’s subsidiaries executed
an agreement in order to settle the legal actions
brought as a consequence of the termination
of TV broadcasting rights and sponsorship
agreements relating to the Turismo Carretera
and TC Pista road racing events, whereby
FADRA undertook to pay damages for an
aggregate and final amount of Ps. 16.5 million
in 23 monthly and consecutive installments.
In addition, it assigned all of its equity interest
in TCM, which represents 20% of its capital
stock and votes. The parties also settled the
claims brought against FADRA in re "Mundo
Show v. FADRA on pending cash collection,
File No. 10041/2012", whereby FADRA paid
Ps. 1.5 million in exchange for the dismissal of
the legal actions.

c. Pursuant to a notarial certificate issued on
September 19, 2008, AGEA and the Company
were served with a legal action brought by
an entity representing consumers and alleged
financial victims (and by six other individuals).
Claimants are Multicanal noteholders who
claim to be allegedly affected by Multicanal’s
APE. The claim is grounded on a Consumer
Defense Law that, in general terms, provides for
an ambiguous procedure that is very strict
against the defendant.

The Company, AGEA and certain directors
and members of the supervisory committee and
shareholders have been served with the claim.
After rejecting certain preliminary defenses
presented by the defendants, such as the
application of statutes of limitation and the
failure to comply with prior mediation
procedures, the claim followed ordinary
procedure and the above-mentioned persons
duly filed their respective responses.

139

d. On September 16, 2010 the Company
was served with a claim brought against it by
Consumidores Financieros Asociación Civil
para su Defensa. The plaintiff claims a
reimbursement of the difference between the
value of the shares of the Company purchased
at their initial public offering and the value
of the shares at the time a decision is rendered
in the case. The Company has duly responded
to the claim and the intervening Court has
deemed the claim responded.

e. On April 25, 2013 Grupo Clarín S.A. held
its Annual Ordinary Shareholders’ Meeting.
As a result of the issues raised at this Meeting,
some of the permanent directors informed
the Company that they had pressed criminal
charges against the representatives of the
shareholder ANSES and of the CNV (Messrs.
Reposo, Kicillof, Moreno, Vanoli, Fardi and
Helman) for making statements and intellectual
constructions which, under the appearance
of being included in the new regulations of the
Argentine Capital Markets Law, only sought
to discredit the Board of Directors and
caricature its management, creating pretexts that
may lead to an intervention of the Company
without judicial control; pursuant to the new
powers vested on the CNV by Capital Markets
Law No. 26,831. On April 26, 2013, the
Board of Directors decided to press charges
on the same grounds.

Consequently, the Company sent a letter to
the CNV, in which it clearly stated that
what had happened at that Meeting could not
be considered in any way as an acknowledgment
of the legitimacy of the powers vested on the
CNV by Law No. 26,831 and/or the regulations
that may be issued in the future. The letter
also stated that the Company reserved its
right to file the pertinent legal actions at any
time to request the declaration of the evident
unconstitutionality of that law. It also requested
the CNV to refrain from performing any act
or issuing any resolution that would lead
to the execution of the plan of which they had
been accused before the courts.

f. On May 30, 2013, Pem S.A. was served
notice of a claim in re “TELEVISORA
PRIVADA DEL OESTE S.A. v. GRUPO
CLARÍN S.A. AND OTHERS on
ORDINARY” File No. 99078/2011, which is
pending before the Federal Commercial Court

No. 16 of First Instance, Clerk’s Office No. 32.
The claim seeks damages resulting from certain
decisions made with respect to Televisora
Privada del Oeste S.A. Cablevisión and the
Company, among others, are defendants in such
lawsuit. Cablevisión was served with the claim
and filed a response in due time and form.
Notice of the claim is being served on the other
co-defendants. According to the Company’s
legal advisors, the chances of success of the
claim are low because the damages claimed are
clearly overstated, the actual damage invoked
does not exist and the claim is procedurally
inappropriate, on both a factual and legal basis.
Pem S.A. filed a response and the proceeding is
now in the discovery stage. In view of the level
of conflict that has arisen among the parties and
the length of time it is taking to reach a
solution, Cablevisión cannot ascertain the
outcome of this claim.

g. In March 2012, ARTEAR brought a
summary action for the protection of
constitutional rights against the National
Government (Chief of the Cabinet of Ministers
and Secretariat of Public Communication) and
against Messrs. Juan Manuel Abal Medina and
Alfredo Scoccimarro, in order to request that
the National Government cease in the arbitrary
and discriminatory allocation of official
advertising with respect to Arte Radiotelevisivo
Argentino S.A. ARTEAR requested (i) that the
court order the maintenance of a balanced
allocation with respect to the amount of official
advertising received in previous years, and in
particular prior to 2008, and with respect
to the amount of official advertising allocated
to other broadcasters of similar characteristics,
and (ii) that the conduct of the above-
mentioned officials be declared illegitimate,
on account of their having abusively exercised
their discretional power to manage public funds
destined to official advertising, discriminating
against Canal 13, which is owned by ARTEAR.

On February 11, 2014, the Supreme Court
of Argentina decided in re “Arte Radiotelevisivo
Argentino S.A. v. National Government -
Chief of the Cabinet of Ministers and Media
Secretariat on summary action for the
protection of constitutional rights (acción de
amparo) Law No. 16,980” to confirm the
decision rendered in that respect by Chamber
No. 4 of the National Court of Appeals
on Federal Administrative Matters. This Court

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admitted the summary action brought by
ARTEAR and ordered the National Government
to provide for the drafting and submission to
the first instance court of a scheme for the
allocation of official advertising that included
the broadcasters with characteristics analogous to
those of ARTEAR. Among those broadcasters,
the Court of Appeals included América TV S.A.
(Canal 2), Telearte S.A. (Canal 9), Televisión
Federal S.A. (Canal 11), ARTEAR (Canal 13)
and SNMP S.A. and RTA S.E. (Canal 7).
The allocation scheme must faithfully conform
to the guidelines of proportionality and equity
set forth in the ruling. The term for submitting
the allocation scheme was set at thirty days
after that decision became final. After ARTEAR
had filed several complaints denouncing non-
compliance with the decision rendered by the
Supreme Court, the judge of the National
Court of First Instance on Federal Administrative
Matters No. 12, Clerk’s Office No. 23 admitted
these complaints in June 2015. The judge
held that the defendant had not complied with
the Supreme Court’s decision and ordered
that it begin to comply going forward. As of the
date of these financial statements, the National
Government is complying with that decision.

h. The claimants representing media companies
in re “AEDBA and Other v. National
Government – Decree No. 746/03 – AFIP on
Incidental Procedure” pending before the
Court on Federal Administrative Matters
No. 4 requested that media companies
represented by the claimants be granted the
right to have a differential VAT regime as
undertaken by the National Government under
Decree No. 746/03 and the rules and
regulations issued in connection thereto.

On October 30, 2003, a preliminary
injunction was issued in connection with the
above-mentioned file, ordering the National
Government to maintain the effectiveness of the
benefit granted under Decree No. 746/03.
The National Government filed an appeal
against that decision and on November 6, 2008,
the Court of Appeals granted the request to
have the injunction revoked, among other
things. On November 27, 2008, the claimants
filed an appeal with the Supreme Court of
Argentina requesting the suspension of the
enforcement of such ruling.

On October 28, 2014, the Supreme Court of
Argentina issued a ruling in connection with the
above-mentioned file, whereby it declared the
appeal formally admissible and thus confirmed
the effectiveness of the above-mentioned
preliminary injunction. In the recitals of its
ruling, the Supreme Court stated that: (i) as of
the date of the decision, the Executive Branch
had not yet established any regime to replace
the so-called competitiveness and employment
generation agreements; (ii) the differential
VAT regime provided under Law No. 26,982
was only applicable to small media companies,
not to all media companies; (iii) the tax policy
must not be biased and cannot be used as a
way to curtail freedom of speech; (iv) the
alternative solution that had to be sought ruled
out, as a matter of principle, the application
of the general regime; (v) even though the
merits have not been decided upon (differential
VAT regime), the injunction that had been
issued in connection thereof shall remain
effective until such a solution to the matter is
reached; (vi) the legal entities that met the
obligations within the scope of the injunction
shall not be deemed delinquent; and (vii) the
judge of the first instance court shall render an
urgent decision on the merits.

On December 10, 2014, the Federal Court
on Administrative Matters No. 4 rendered a
decision on the merits in re AEDBA and
other v. National Government Decree No.
746/03 and other on Proceeding leading to a
declaratory judgment” ordering, among other
things, that: The claimants (media companies)
have the standing to sue; that the judge cannot
legislate because only the Legislative Branch
is empowered to do so; that, pursuant to the
enactment of Law No. 26,982, the obligation
undertaken by the Executive branch has already
been met since the differential VAT rates have
already been set and, therefore, the claim is
moot; that, based on the decision rendered by
the Supreme Court of Argentina, the companies
cannot be deemed delinquent.

Given the fact that the above-mentioned
decision opposes and contradicts the grounds
stated by the Supreme Court, the claimants
(AEDBA, ARPA, ADIRA, as well as other
associations) filed an appeal against the decision
rendered by the above-mentioned court of first
instance with the corresponding Court of
Appeals. On October 1, 2015, Chamber II of

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the Court of Appeals on Federal Administrative
Matters admitted the appeals filed by the
claimants and revoked the decision rendered
by the Court on Federal Administrative
Matters No. 4, ordering that the effectiveness
of the preliminary injunction be maintained
and authorizing the calculation of employer’s
contributions as tax credit on VAT until the
Executive Branch complies with the provisions
of Decree No. 746/03.

On December 3, 2015, the Supreme Court
of Argentina dismissed the appeal filed by the
Executive Branch. Therefore, the decision
rendered by the Court of Appeals became firm
and final.

As a result of the foregoing, AGEA and some
of its subsidiaries and Radio Mitre started
to calculate employer’s contributions as tax
credit on VAT as from November 2014.

i. On October 3, 2014, ARTEAR and some
of its subsidiaries submitted a request to join the
Association of Argentine Private Broadcasters
(“ARPA”, for its Spanish acronym), which
became effective as from June 2015. As a result
of the above-mentioned incorporation, that
company became eligible to enjoy the benefit,
provided under Decree No. 746/03, of
calculating employer’s contributions as tax
credit on VAT.

ARPA is a party to “Association of Newspaper
Publishers of the City of Buenos Aires (AEDBA,
for its Spanish acronym) and other –ADIRA,
AAER, ATA AND ARPA- v. National
Government - Decree No. 746/03 - AFIP on
Autonomous Preliminary Injunction”, in respect
of which the Supreme Court of Argentina
rendered a decision on October 28, 2014. These
associations had requested a preliminary
injunction ordering the Executive Branch to
maintain the effectiveness of the benefit of
calculating employer’s contributions as tax credit
on VAT, pursuant to Decree No. 746/03, for
the companies that belong to these associations,
or else, as a default argument, ordering the
AFIP to refrain from claiming payment
on the corresponding taxes. In addition, the
Court confirmed the decision on the extended
preliminary injunction stating that,
notwithstanding the decision, the claimants
shall not be deemed delinquent within the
framework of the preliminary injunction. On

October 1, 2015, Chamber II of the Court
of Appeals on Federal Administrative Matters
admitted the appeals filed by the claimants and
revoked the decision rendered by the Court
on Federal Administrative Matters No. 4,
ordering that the effectiveness of the preliminary
injunction be maintained and authorizing
the calculation of employer’s contributions as
tax credit on VAT until the Executive
Branch complies with the provisions of Decree
No. 746/03.

On December 3, 2015, the Supreme Court
of Argentina dismissed the appeal filed by the
Executive Branch. Therefore, the decision
rendered by the Court of Appeals became
firm and final.

As a result of the foregoing, ARTEAR and
some of its subsidiaries started to calculate
employer’s contributions as tax credit on VAT
as from July 2015.

j. Cablevisión, together with its merged
companies and ATVC, brought a claim
requesting the Judicial Branch, through a final
decision rendered in a contradictory trial, to
declare: 1) that the National Government
undertook the obligation to provide an
alternative solution to the repeal of the regime
established under Section 52 of Decree
No. 1,387/01 for companies that render
supplementary broadcasting services and cable
television services, which shall contemplate
the reasons for excluding these companies from
the repeal of Decree No. 1,387/01 through
Decree No. 746/03, and 2) that while the
Government considers the situation of those
companies to find such an alternative
solution, it shall maintain the effectiveness of
the regime established under Section 52
of Decree No. 1,387/01 (cfr. fs.2/12).

On October 1, 2015, Chamber II of the Court
of Appeals on Federal Administrative Matters,
in a single joint decision in re “AEDBA and
other v. National Government - Decree
No. 746/03 - AFIP on Incidental Procedure”,
decided that, among other things, even though
ATVC was not among the claimants that had
been granted an injunction in the other two
above-mentioned related cases, the situation
was also applicable to the sector encompassed
by that association, therefore, the decision shall
also apply to this association. Under these

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conditions, the claims brought by the claimants
shall be admitted - in the joinder of the three
claims - and the claimants and the companies
represented by them are entitled to have
a differential VAT regime applicable to the
sectors involved which shall be created,
enforced and regulated by the authorities duly
empowered by the Constitution to such end.
This regime shall guarantee the full exercise
of the rights recognized under Section 14
of the National Constitution, as well as the
maintenance of the exception provided under
Section 2 of Decree N° 746/03 from the
repeal of Section 52 of Decree No. 1,387/01.
On December 3, 2015, the Supreme Court
of Argentina dismissed the appeal filed by
the Executive Branch. Therefore, the decision
rendered by the Court of Appeals became
firm and final.

As a result of the foregoing, Cablevisión and
its subsidiaries started to calculate employer’s
contributions as tax credit on VAT as from
September 2015. The amount calculated as of
December 31, 2016 and 2015 was approximately
Ps. 741.3 million and Ps. 237 million,
respectively.

k. In February 2016, Radio Mitre was served
with a claim seeking to extend to Radio Mitre
the bankruptcy of one of its subsidiaries,
Cadena País Producciones Publicitarias S.A.,
in connection with a case pending before
one of the National Courts of First Instance on
Commercial Matters of the City of Buenos
Aires. Our legal advisors believe that that
company has sufficient legal and factual grounds
to support its position contrary to that claim
and, therefore, they do not foresee any adverse
effects that may be derived from this situation.

8.4 Matters concerning Papel Prensa:
I. Papel Prensa has several disputes pending
before the Commercial Court of Appeals
of the City of Buenos Aires as a consequence
of CNV Resolution No. 16,222. Pursuant
to said Resolution, the CNV declared
that certain decisions of Papel Prensa’s Board
of Directors were irregular and with no
effect for administrative purposes. The
Resolution challenged the Board’s fulfillment
of the formalities required in the preparation,
transcription and execution of meeting minutes
on the relevant corporate books. On June 24,
2010, in File No. 75,479/09, the Commercial

Court of Appeals of the City of Buenos Aires,
Chamber C, decided to nullify CNV Resolution
No. 16,222. On the basis of Resolution No.
16,222, the CNV has questioned subsequent
decisions of Papel Prensa’s Board and of
its Shareholders. In response, Papel Prensa has
brought several administrative claims against
the CNV, questioning its position. All of such
claims were decided in Papel Prensa’s favor
by the Commercial Court of Appeals of the
City of Buenos Aires. Consequently, the CNV’s
decisions were nullified. Furthermore, the
Commercial Court of Appeals, Chamber C,
dismissed the appeals filed by the CNV before
the Supreme Court of Argentina against the
Court of Appeals’ decisions. The CNV filed a
direct appeal before the Supreme Court.

As a consequence of the above, Papel Prensa
has continued with the criminal proceedings
brought against certain public officials.

On February 1 and 4, 2010, the Secretary of
Domestic Trade, Mario G. Moreno, and
the CNV, respectively, requested the judicial
intervention of Papel Prensa before the
commercial justice. Such claims were pending
before the Federal Commercial Court of
First Instance No. 2, Clerk’s Office No. 4,
temporarily under judge Dr. Eduardo Malde,
who, on March 8, 2010, issued an injunction
whereby he suspended certain decisions
adopted at meetings of the Board of Directors
and at Shareholders Meetings held on or after
November 4, 2009. Judge Malde also appointed
a co-administrator without removing the
members of the previous corporate bodies. Papel
Prensa filed an appeal, which the Commercial
Court of Appeals, Chamber C, resolved in
Papel Prensa’s favor, by revoking the injunction
on August 31, 2010. On December 7, 2010
the same Chamber C dismissed the appeals filed
by the CNV and the National Government
before the Supreme Court of Argentina against
the Court of Appeals’ decision. Both the CNV
and the National Government filed direct
appeals against such decision.

On March 26, 2014, the Supreme Court of
Argentina dismissed the appeal that had been
filed by the CNV. Therefore, the decision
rendered by the Court of Appeals that nullified
Resolution No. 16,222 became final, with full
force and effect. Also on the same date, the
Supreme Court of Argentina dismissed the

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appeals brought by CNV and the National
Government. Therefore, the decision rendered
by the Court of Appeals that revoked the
corporate intervention of Papel Prensa became
final, with full force and effect.

None of the claims mentioned in the above
paragraphs had a material effect on AGEA’s
financial and economic condition as of
December 31, 2016.

II. On January 6, 2010, the SCI issued
Resolution 1/2010, whereby certain business
practices were imposed on Papel Prensa. Papel
Prensa brought a legal action against such
resolution on grounds of unconstitutionality
before the Federal Court on Administrative
Matters and requested an injunction which was
granted by the intervening judge. Pursuant to
the injunction, the effects of such Resolution
were suspended. On May 7, 2010, the Federal
Court on Administrative Matters revoked the
injunction. Papel Prensa appealed such decision,
which was affirmed by the Federal Court
of Appeals on Administrative Matters. Papel
Prensa filed an appeal against the Court of
Appeals’ decision. The appeal was denied and
Papel Prensa was served notice of that denial
on September 1, 2010. On June 2, 2015,
the dismissal of the claim brought by Papel
Prensa against the constitutionality of
Resolution No. 1/2010 became final. The court
held that the claim became moot upon the
enactment of Law No. 26,736. The Company
understands that the substantive claim is now
subject to the outcome of the claim brought
by Papel Prensa against the constitutionality of
Law No. 26,736, currently pending before the
Federal Civil and Commercial Court.

III. Papel Prensa suspended its operations with
related parties between March 9 and April 21,
2010 pursuant to an injunction issued on
March 8, 2010 by Judge Malde. In his ruling,
Judge Malde decided to suspend the Board
of Directors’ resolution of December 23, 2009,
which had approved the terms and conditions
of transactions with related parties for the
year 2010. On April 21, 2010, the Board of
Directors of Papel Prensa, following a proposal
made by the court-appointed supervisor
(interventor) and co-administrator, approved
the resumption of such company’s transactions
with related parties under provisional conditions
for as long as the decision rendered by the

Board on December 23, 2009 remained
suspended and/or until Papel Prensa’s corporate
bodies established a business practice to follow
with related parties.

Such approval involved suspending the
application of volume discounts in connection
with purchases made by related parties, which
could be recognized in their favor, subject
to the court’s decision on the appeal filed by
Papel Prensa against Judge Malde’s injunction
of March 8, 2010. As from April 21, 2010,
transactions with related parties were resumed
under the provisional conditions approved by
the Board on April 21, 2010.

At a meeting held on December 23, 2010,
Papel Prensa’s Board of Directors approved
new conditions that must be fulfilled for
the recognition and payment of volume
discounts that may be applicable to related
parties in connection with purchases of paper
made as from April 21, 2010. These new
conditions are as follows: (i) the lifting of the
provisional suspension of the resolutions adopted
by the Board at the meeting of December 23,
2009, as explained in the previous paragraph,
and (ii) the resolution or end, by any means, of
any state of uncertainty that may eventually
exist about the conditions approved by Papel
Prensa’s Board in the first item of the agenda
of the meeting held on April 21, 2010,
as a consequence of the claim brought by the
National Government in re “National
Government – Secretariat of Domestic Trade –
v./ Papel Prensa S.A.I.C.F. y de M. on/
Ordinary”, File No. 97,564, currently pending
before Federal Commercial Court of First
Instance No. 26, Clerk’s Office No. 52. Under
this proceeding, the National Government
seeks to obtain, among other things, a declaratory
judgment of nullity of the provisional
conditions for the resumption of transactions
with related parties in connection with the
purchase and sale of paper that was approved
by the Board of Papel Prensa in the first item of
the agenda of the above mentioned meeting
held on April 21, 2010.

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that may be applicable to them with respect
to paper purchases made between January 1st,
2011 and December 31, 2011, to a final
favorable ruling in the claim brought by Papel
Prensa against the constitutionality of SCI
Resolution No. 1/2010, or to the final
nullification of such Resolution No. 1/2010
in any other way or by any other legal means,
whichever occurs first. In view of the decisions
rendered in this case, the substantive claim,
in this aspect, is now subject to the outcome of
the claim brought by Papel Prensa against the
constitutionality of Law No. 26,736. With
respect to related parties, the Board of Directors
of Papel Prensa approved the same sales policy
and conditions as those approved for the other
customers in general.

In a meeting held on December 27, 2011, the
Board of Directors of Papel Prensa decided
to maintain for 2012 the same sales policy that
had been approved for 2011 – under the same
terms and conditions mentioned in the
previous paragraph – for all of its customers in
general (including related parties), which was
maintained in subsequent years and, to date, no
changes have been introduced.

The commercial policy approved by Papel
Prensa was affected by Law 26,736 –effective
as from January 5, 2012– which declared that
the production, sale and distribution of wood
pulp and newsprint were matters of public
interest and set forth the regulatory framework
to be adopted by the producers, sellers,
distributors and buyers of such inputs. Among
other things, the Law set limits and established
conditions applicable to Papel Prensa for the
production, distribution and sale of newsprint
(including a formula to determine the price
of paper), and created the National Registry of
Producers, Distributors and Sellers of Wood
Pulp and Newsprint where all producers, sellers,
distributors and buyers shall be registered as a
mandatory requirement in order to produce,
sell, distribute, and/or purchase newsprint and
wood pulp as from the enactment of the Law.
It also contains a series of temporary clauses,
specifically and exclusively addressed to Papel
Prensa, whereby Papel Prensa is forced to make
investments to meet the total national demand
for newsprint – excluding from this requirement
the other existing company that operates in
the country with installed capacity to produce
this input. The Law also provides for the

capitalization of the funds eventually
contributed by the National Government to
finance these investments for the purposes
of increasing the equity interest and the political
rights of the National Government in Papel
Prensa, contravening public order regulations
contained in Law 19,550 and disregarding
several constitutional rights and guarantees of
Papel Prensa and its private shareholders.

On February 10, 2012, AGEA registered with
the National Registry of Producers, Distributors
and Sellers of Wood Pulp and Newsprint
(Record No. 63 in File No. S01:0052528/12),
clearly stating that the decision to register shall
not be construed as an acknowledgment or
conformity with the legitimacy of Law 26,736,
Resolution No. 9/2012 issued by the Ministry
of Economy and Public Finance and SCI
Resolution No. 4/2012 issued in connection
with such Law and/or any other issued in the
future, since they seriously affect several rights
and guarantees of AGEA which are recognized
and protected by the Argentine National
Constitution.

IV. On September 12, 2011, the CNV issued
Resolution No. 16,647 whereby it rendered
irregular and with no effect for administrative
purposes the decisions made by Papel Prensa’s
Board of Directors at the meetings held
on July 20, 2011 and August 5, 2011. At those
meetings, the Board of Directors had called
two shareholders’ meetings, to be held on
September 27, 2011 and September 15, 2011,
respectively. Notwithstanding the fact that
Resolution No. 16,647 was appealed by Papel
Prensa and is therefore not final, on September
15, 2011, Commercial Court No. 5, Clerk’s
Office No. 9, issued an injunction with respect
to the Board of Directors’ decisions to call the
two shareholders’ meetings. The injunction had
been requested by the shareholders Arte Gráfico
Editorial Argentino S.A., Compañía Inversora
en Medios de Comunicación (CIMECO) S.A.,
and S.A. La Nación. Given that the issuance of
the injunction validated Papel Prensa’s decision
to call the two shareholders’ meetings, both
were held as originally scheduled. Nevertheless,
and based on the above Resolution No.
16,647, on October 13, 2011 the CNV issued
Resolution No. 16,671 rendering irregular
and with no effect for administrative purposes
all of the decisions made at Papel Prensa’s
Shareholders’ Meetings held on September 15,

145

2011 and September 27, 2011. Papel Prensa
filed an appeal against Resolution No. 16,671,
which is, therefore, not final. Also based on
Resolution No. 16,647, on November 16, 2011,
the CNV issued Resolution No. 16,691
whereby the CNV rendered irregular and
with no effect for administrative purposes the
decisions made at the Board of Directors’
Meeting held on October 3, 2011 and the call
for the Board of Directors’ meeting on
November 17, 2011. Such Resolution is not to
be deemed final since Papel Prensa filed an
appeal and requested its nullification. In this
sense, of particular note is that: (i) at the
hearing held before Federal Commercial Court
No. 26 of First Instance, Clerk’s Office
No. 52, the National Government, Papel
Prensa, AGEA, Compañía Inversora en Medios
de Comunicación (CIMECO) S.A. and S.A.
La Nación agreed, among other things,
on the composition of the company’s corporate
bodies, and in particular on the recognition
of the authorities appointed by the private
shareholders at Papel Prensa’s Shareholders’
meeting held on September 27, 2011, as well as
on the agenda to be addressed at the meeting
of Papel Prensa’s Board of Directors of October
3, 2011, which had been the subject matter of
Resolution No. 16,691; and (ii) at the hearing
held in April 2012 before the same Commercial
Court the National Government, Papel Prensa,
AGEA, Compañía Inversora en Medios
de Comunicación (CIMECO) S.A. and S.A.
La Nación, with the assistance of the Argentine
Securities Commission, agreed to request the
court to order a shareholders’ meeting with
an agenda substantially similar to that of Papel
Prensa’s Shareholders’ Meeting held on
September 27, 2011. The request was granted
by the intervening judge and the meeting was
scheduled for August 29, 2012. The meeting
began on that date but, as a consequence of
certain disturbances provoked by the
representative of the National Government,
the private shareholders that were present
at the meeting decided to adjourn it for 48
hours without addressing the agenda. After that,
and notwithstanding the resolution adopted
at the meeting, on August 31, 2012 Judge
O’Reilly decided to order that the adjourned
meeting would resume on September 25, 2012.
However, the meeting was not held because
the Judge subsequently held that the appeals
filed against other points of her decision

resulted in the suspension of every point of the
decision she had rendered, including the new
date scheduled for the meeting, even though all
appellants had consented to that point.

On June 12, 2014, the Court of Appeals
decided to postpone rendering a decision on
the appeals filed until the court-convened
shareholders’ meeting that began on August 29,
2012 had been resumed and closed, ordering
Judge O’Reilly to decide on the pending
issues and to order the shareholders to resume
that meeting. On December 4, 2014, the
Judge called Papel Prensa, the CNV, and the
shareholders of AGEA, the National
Government, SA La Nación and CIMECO
to a hearing to be held on May 6, 2015,
in order to proceed as ordered by the Court
of Appeals. In light of the above, the new date
to resume that meeting may not be set until
Judge O’Reilly has complied with the decision
rendered by the Court of Appeals.

On April 29, 2015, the Judge suspended the
hearing that was to be held on May 6, 2015
because the National Government failed
to answer the notice served by the Judge
requesting a statement identifying the officials
that would attend the hearing with sufficient
powers to reach a settlement pursuant to
Decree No. 411/80 (T.R. Decree No. 1,265/87,
as amended). The Judge set a new date for
the hearing to be held on April 14, 2016, but
it was subsequently postponed by the Court
for June 9, 2016.

Subsequently, in March 2016, the Commercial
Court of Appeals –Chamber C– summoned
Papel Prensa, the CNV, and the shareholders
of AGEA, the National Government, SA La
Nación and CIMECO to attend a hearing to be
held on April 7, 2016, solely for conciliatory
purposes and with the aim of finding a
comprehensive solution to the conflict. The
hearing was held on that date and a new date
was set to resume the hearing on June 2,
2016 for the same purposes and effects. It was
subsequently postponed until June 3, 2016.
At that hearing, held on June 3, 2016, Papel
Prensa, the Company and the other shareholders
present at the hearing (the National Government,
S.A. La Nación and CIMECO) requested that
the procedural periods remain suspended in
connection with the claims pending before that

146

Court of Appeals, and also requested the court
to order a shareholders’ meeting of Papel Prensa
to be held on September 20, 2016 to address,
basically, the issues included under subsections
1, 2 and 3 of Section 234 of Law No. 19,550,
as amended, corresponding to fiscal years
ended December 31, 2010, 2011, 2012, 2013,
2014 and 2015. On September 5, 2016, the
Court of Appeals called for a shareholders’
meeting as requested at the hearing held on
June 3, 2016, and at the request of Papel Prensa
and the National Government –in view of
the urgent and impending terms to make the
required publications– on September 8, 2016
it postponed the date of the shareholders
meeting until October 19, 2016.

On October 19, 2016, the shareholders of
Papel Prensa duly held the court-convened
Shareholders’ Meeting of that company.
At that Shareholders’ Meeting, the shareholders
approved the financial statements of Papel
Prensa for the years ended December 31, 2010,
2011, 2012, 2013, 2014 and 2015 and other
accounting documentation under subsection 1,
Section 234 of Law No. 19,550, as amended,
appointed directors, statutory auditors and
members of the supervisory committee for the
year 2016, approved the capitalization of
the capital adjustment for Ps. 123,293,385,
issued a decision on the approval and
disapproval of the performance of certain
directors, statutory auditors and members of
the supervisory committee during the full fiscal
years under consideration, and unanimously
appointed external auditors engaged with
issuing an opinion on the financial statements
of Papel Prensa as of December 31, 2016
and March 31, 2017. In connection with the
decisions made at the Shareholders’ Meeting
held on October 19, 2016 by the shareholders
that are parties to judicial proceedings, the
resumption of the court-convened Shareholders’
Meeting of Papel Prensa that began on August
29, 2012 has become moot, and the Company
understands that the great majority of the
issues involving the conflict related to Papel
Prensa have become or will become moot.

took place. The purpose of that claim was to
declare that the silence of the National
Government be deemed a consent, given the
government’s obligation to grant or deny
consent under Section 20 of the By-laws with
respect to the appointment of an external
auditor by the shareholders at the Shareholders’
Meeting held on September 27, 2011. Papel
Prensa, the shareholders of CIMECO, S.A.
La Nación and the Company, the CNV and the
National Government agreed that this claim had
become moot as a result of the Shareholders’
Meeting held on October 19, 2016.

V. On June 6, 2013, the Board of Directors of
the CNV issued CNV Resolution No. 17,102,
within the framework of the Administrative
File No. 1032/10, whereby it required that:
(i) certain members of Papel Prensa’s Supervisory
Committee and statutory auditors be imposed
a fine of Ps. 150,000 each; and (ii) Papel Prensa,
certain members of its Board of Directors,
one member of its Supervisory Committee and
the members of its Oversight Board (all of
them representatives of Papel Prensa’s private
shareholders) be imposed a joint and several
fine of Ps. 800,000. Papel Prensa and its other
current and former officers appealed the fine
in due time and form. In the same appeal, they
requested an injunction to change the effect
of their appeal and suspend the application of
the fine. On October 11, 2013, Chamber No. 5
of the Federal Court on Administrative Matters
denied this request, which was considered
unnecessary in the light of the settlement
of the fine by the claimants, as informed below.
Notwithstanding the above, on June 19, 2013,
the Company asked the CNV to suspend the
application of the fine until a decision was
rendered by the Court of Appeals with respect
to the injunction. The request was denied. On
June 28, 2013, the fine was paid under protest
in order to prevent its coercive enforcement
by the CNV; given that, under the new Capital
Markets Law No. 26,831, appeals may be
admitted without suspension of judgment.

VI. AGEA has not recorded any impact in
connection with the foregoing, since its effects
shall depend on the final outcome. Such
effects are not expected to be material to these
Financial Statements.

147

Note 9

Regulatory framework

9.1 Audiovisual Communication Services Law.
The subsidiaries of Grupo Clarín that render
audiovisual communication services are holders
of licenses that were originally awarded under
the regime established by Law No. 22,285.
The COMFER was the enforcement authority
established by that law. Under Law No. 22,285
audiovisual communication service companies
in Argentina required a non-exclusive license
from the COMFER in order to operate. Other
approvals were also required, including, for
some services, authorization by municipal
agencies. Broadcasting licenses were granted for
an initial period of 15 years, allowing for a
one-time extension of 10 years. The extension
of the license was subject to the approval of
the COMFER, which would determine whether
or not the licensee had met the terms and
conditions under which the license had been
granted. Some of the licenses exploited by
the subsidiaries have already been extended for
the above-mentioned 10-year term.

On May 24, 2005, Decree No. 527/05
provided for a 10-year-suspension of the terms
then effective of broadcasting licenses or their
extensions. Calculation of the terms was
automatically resumed upon expiration of the
suspension term, subject to certain conditions.
The Decree required that companies seeking
to benefit from the extension submit to the
COMFER’s approval, within two years from
the date of the Decree, programming proposals
that would contribute to the preservation of
the national culture and the education of the
population and a technology investment project
to be implemented during the suspension term.
COMFER Resolution No. 214/07 regulated
the obligations established by Decree No.
527/05 in order to benefit from such suspension.
The proposals then submitted were approved
and, accordingly, the terms of the licenses
originally awarded to the subsidiaries of Grupo
Clarín were suspended for ten (10) years.

provided by the law have been issued.
Therefore, Law No. 22,285 still applies with
respect to those matters that to date have not
been regulated, until all terms and procedures
for the regulation of the new law are defined.

The law provided for the replacement of the
COMFER with the Audiovisual Communication
Services Law Federal Enforcement Authority
(AFSCA, for its Spanish acronym) as a
decentralized and autarchic agency under the
jurisdiction of the Executive Branch, and vested
the new agency with authority to enforce the law.

Emergency Decree No. 267/15 issued on
December 29, 2015, created the National
Communications Agency (“ENACOM”, for its
Spanish acronym) as a decentralized and
autarchic agency under the jurisdiction of the
Ministry of Communications. Among other
powers, the ENACOM has all the same powers
and competences that Law No. 26,522 had
vested in AFSCA. See Note 9.3.

9.2 Telecommunication Services.
The regulatory framework of the Argentine
telecommunications sector is undergoing
a process of change. In December 2014, the
Argentine Congress passed Law No. 27,078,
known as the “Digital Argentina Act”, which
partially repealed National Telecommunications
Law No. 19,798. The new law subjects the
effectiveness of Decree No. 764/00, which
deregulated the telecommunications market, to
the enactment of four new sets of rules that will
govern the License, Interconnection, Universal
Service and Radio-electric Spectrum regimes.

The new law maintains the single country-wide
license scheme and the individual registration
of the services to be rendered, but replaces
the name telecommunication services with
Information and Communications Technology
Services (“TIC Services”, for their Spanish
acronym). Notwithstanding this, the scope of
the licenses originally granted to the subsidiary
Cablevisión, its merged companies and/or
subsidiaries and related companies that exploit
telecommunication licenses and their respective
registrations of services, remain unaltered.

The license will be called “Licencia Única
Argentina Digital” and will allow licensees to
render any telecommunication services to the
public, be they fixed or mobile, wired or

148

wireless, national or international, with or
without the licensee’s own infrastructure.

The TIC Services registered with the Argentine
Secretariat of Communications under the name
of Cablevisión, its merged companies and/or
subsidiaries and related companies that exploit
telecommunication licenses are the following:
Data Transmission, Paging, Videoconference,
Community Retransmission, Transport of
Broadcast Signals, Value-Added, Radio-Electric
Trunking, Internet Access, Public Telephony,
Local Telephony and National and International
Long-Distance Telephony.

The law created a new enforcement and
oversight Authority as a decentralized agency
under the jurisdiction of the Executive Branch,
the Information and Communications
Technology Federal Enforcement Authority
(“AFTIC”, for its Spanish acronym).

The new law maintained the obligation to
contribute 1% of telecommunication service
revenues, net of taxes and charges, to be
used for Universal Service investments (this
obligation had been imposed by Decree No.
764/00 on all service providers as from
January 1, 2001), but the Universal Service
Trust Fund was placed under State control.
Until August 2015, the manager of such trust
fund was Banco Itaú Argentina S.A.,
which received the joinder requests filed by
Cablevisión and its merged companies
and/or subsidiaries and related companies
that exploit telecommunication licenses to
join the Trust Agreement.

The Argentine Secretariat of Communications
has yet to decide on the approval of the Projects
submitted by Cablevisión and its subsidiaries that
exploit telecommunication services, within the
framework of SECOM Resolution No. 9/2011
which created the program “Infrastructure and
Equipment”, whereby telecommunication
service providers were allowed to submit projects
aimed at developing new infrastructure,
updating existing infrastructure and/or acquiring
equipment for areas without coverage or with
unmet needs, in order to meet the obligation to
make contributions to the Universal Service
Trust Fund for the amounts accrued as from
January 2001 until the entry into force of
Decree No. 558/08.

Another innovation of Law No. 27,078 was the
creation of a new public service under the
name “Public and Strategic Infrastructure Access
and Use Service for and among Providers”.
The right of access included “providers having
to make available to other providers their
network elements, associated facilities or services
to render TIC services, even when such
elements are used to render audiovisual content
services.” Under this scheme, the government
seeks to make private companies that were
created and developed in competition share
their networks with other companies that had
not made any investments.

The foregoing applied to any provider that
had its own infrastructure or networks, because
the term “Associated facilities” is defined as
physical infrastructures, systems, devices,
associated services or other facilities or elements
associated with a telecommunications network
or with TIC Services that enable or support
the provision of services using that network or
service, or that have the potential to do so; and
will include, inter alia, buildings or building
entrances, building wiring, antennas, towers and
other supporting constructions, ducts, masts,
manholes, and cabinets (See Note 9.3.).

As of the date of these consolidated financial
statements, Law No. 27,078 has been only
partially regulated.

9.3. Emergency Decree No. 267/15. Convergence.
Emergency Decree No. 267/15 (the "Emergency
Decree"), issued on December 29, 2015 and
published in the Official Gazette on January 4,
2016, creates the ENACOM as a decentralized
and autarchic agency under the jurisdiction
of the Ministry of Communications and vests
the new agency with authority to enforce
Laws Nos. 26,522 and 27,078, as amended
and regulated. The ENACOM has all the same
powers and competences that had been vested
in AFSCA and AFTIC by Laws Nos. 26,522
and 27,078, respectively.

149

license regime, has been significantly amended.
As a result, the Company and its subsidiaries
that are licensees and/or owners of audiovisual
communication services already conform to
the new regulatory framework.

Under the new regulatory framework, the
licenses for physical link subscription television
services and for radio-electric link subscription
television services held by certain subsidiaries
that had been granted under Laws No. 22,285
and No. 26,522 are now called “Registrations”
for the exploitation of physical link subscription
television services and radio-electric link
subscription television services of a Licencia
Única Argentina Digital.

Pursuant to this amendment (Section 7 of the
Emergency Decree, which amends, among
others, Section 10 of Law No. 27,078), all the
services exploited by Cablevisión and its
subsidiaries are now governed by the Digital
Argentina Act. The only license still exploited by
Cablevisión that could be considered to be still
subject to the LSCA is the registered title of
the signal METRO, since this signal is broadcast
through other services that acquire it for that
purpose, and, therefore, it has a registration
number issued by AFSCA (now ENACOM)
that must be renewed on an annual basis.

As far as the Company’s subsidiaries are
concerned, the Emergency Decree eliminates:

1. The incompatibility to render in the same
location broadcast television services and
subscription television services. When
subscription television services are exploited
through physical or radio-electric link,
they will be subject to the Digital Argentina
Act pursuant to Section 7 of the Emergency
Decree, which amends, among others, Section
10 of Law No. 27,078;
2. The limit of 10 licenses for radio-electric
link subscription television services and 24
licenses for physical link subscription television
services, which are considered to be TIC services
as from January 4, 2016, date on which
the Emergency Decree became effective; and
the limit that provided that broadcast television
services may not reach more than 35% of
the total national population and the limit that
provided that physical link and radio-electric
link subscription television services may not
reach more than 35% of all subscribers.

As far as Cablevisión is concerned, the
Emergency Decree repeals Section 15 of Law
No. 27,078, which created a new public
service under the name “Public and Strategic
Infrastructure Access and Use Service for and
among Providers”. The right of access included
“providers having to make available to other
providers their network elements, associated
facilities or services to render TIC services, even
when such elements were used to render
audiovisual content services.”

Due to the fact that physical link and radio-
electric link subscription television services are
now subject to the Digital Argentina Act:

i) These services no longer fall within the scope
of Section 45 of the LSCA, which sets forth
the new multiple license regime for Audiovisual
Communication Services;
ii) The registration of physical link subscription
television services is no longer limited to a
specific territorial area. The same is not the case
with radio-electric link subscription television
services because of the portion of the spectrum
allocated to render these services;
iii) Both registrations, for physical link
subscription television services and for radio-
electric link subscription television services,
are no longer subject to expiration terms.
However, the portions of the spectrum allocated
to render radio-electric link subscription
television services do have expiration terms. The
duration of such services shall be the longest
of the term provided under their original title,
or 10 years as from January 1, 2016.

Notwithstanding point iii) above, ENACOM
Resolution No. 427/2016 provides that cable
television service licensees that hold only
one license to provide a certain type of service
and have requested an extension of its term but
have not obtained an express decision in this
respect must ratify their requests. Accordingly,
some of the subsidiaries of Cablevisión have
made filings to such end.

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provided under Law No. 26,522. They shall
not be subject to the investment contribution
or the payment of the Control, Oversight
and Verification Fee provided under Sections
22 and 49 of Law No. 27,078.

With regard to the term of the licenses
for television and radio broadcast services,
the Emergency Decree establishes two
important changes:

• It provides for a new system of extensions
for audiovisual communication service
licenses whereby the licensee may request a
first extension for five (5) years, which
will be automatic. Upon expiration of this term,
licensees may request subsequent extensions
of ten (10) years complying in that case with
the provisions of the Law and applicable
regulations to be eligible for each extension.
However, this system of subsequent extensions
may be interrupted upon the expiration of the
last extension if the Ministry of Communications
decides to call for a public bid for new
licensees, for reasons of public interest, for
the introduction of new technologies or
in compliance with international agreements.
In this case, prior licensees shall have no
acquired rights regarding their licenses.
• Section 20 of the Emergency Decree provides
that the holders of licenses effective as of
January 1, 2016 may request a ten (10) year
extension, without it being necessary to
wait until the expiration of the license that is
currently effective. Such extension shall be
considered as a first period that entitles the
holder to the five (5) year automatic extension.

Taking into consideration the advantages
provided under the new legal framework with
regard to the terms of the licenses, the
direct and indirect subsidiaries of the Company
that exploit audiovisual communication
services, i.e. ARTEAR, RADIO MITRE,
TELECOR S.A.C.I., Teledifusora Bahiense S.A.
and Bariloche TV S.A., made a filing with
the ENACOM requesting the extension of the
terms of their licenses pursuant to Section
20 of the Emergency Decree.

indicating the original coverage area, the
supplementary territorial units and/or area
extensions in which it currently renders services.

In addition, and pursuant to ENACOM
Resolution No. 1,394/16, which approves the
General Rules for Physical Link Subscription
Television Services and/or Radio-Electric
Link Subscription Television Services, in those
cases in which Cablevisión and/or any of its
Subsidiaries purchased bidding forms to apply
for a new license when the term had expired or
to apply for an area extension, the applicants
amended their filings and converted them into
a request for authorization of coverage area.

The new General Rules also order providers
of both types of services to guarantee their
compliance with a programming grid in each
Coverage Area. In this respect, the subsidiary
of the Company states that it already complies
with all the obligations derived from this
Resolution.

Pursuant to the Emergency Decree, the
providers of the Basic Telephone Service whose
licenses were granted under the terms of
Decree No. 62/90 and paragraphs 1 and 2
of Section 5 of Decree No. 264/98, as well as
Mobile Telephone Service providers with a
license granted pursuant to the list of bidding
conditions approved by Resolution No. 575/93
of the then Ministry of Economy and Public
Works and Services and ratified by Decree No.
1,461/93, shall only be able to provide
subscription broadcasting services by means of
physical or radio-electric link after a term of
two years counted as from January 1, 2016.
That term may be extended for one more year.

The Emergency Decree was approved on
April 6, 2016 by the Lower House of Congress.
Therefore, it has full force and effect.

Finally, in order to enhance the convergence
of networks and services under conditions
of competition, promote the deployment of
next generation networks and the penetration
of broadband Internet access services across
the national territory, the Executive Branch
issued Decree No. 1,340/16 on December 30,
2016. Among other things, the Decree:

• Provides for the protection for fifteen years
of last mile fixed NGN for broadband Internet

151

services that may be deployed by the licensees
of TIC services with respect to the rules for open
access to broadband services.
• Orders the issuance of regulations for the
following purposes:
− To call for a Public Bid for the allocation of
new frequency bands for mobile services.
− To ensure the re-allocation of radio-electric
spectrum frequencies with economic
compensation and shared use to frequencies
previously allocated to other services, and
to allocate such frequencies to providers of TIC
Services that request to reuse them to render
mobile services or fixed wireless services with
LTE or higher technologies.
− To allocate radio electric spectrum frequencies
on demand, imposing compensation, deployment
and coverage obligations on the current local
or regional providers of TIC services and on the
current providers of mobile communication
services.
• Sets forth that the persons restricted under
Decree No. 267/15 from rendering physical or
radio-electric link subscription television services
may request the corresponding registration
and begin to provide those services in certain
areas as from January 1st, 2018.
• Recognizes that the holders of satellite link
subscription television service licenses that as of
December 29, 2015 rendered TIC services
may maintain the ownership of both services.
• Orders the Ministry of Communications to
guarantee the interconnection principles provided
under the applicable legislation in order to ensure
the impartiality, non-discrimination and fair
competition among providers of mobile services,
restricting the possibility of delaying or hindering
the technical, interconnection, operational or
any other conditions that may create barriers for
other providers to enter the market.

9.4. Matters related to the regulatory situation of

the Company and certain subsidiaries.

9.4.1. Proposal to conform to the provisions of

Law No. 26,522.
Pursuant to Resolution No.
17/ENACOM/2016 issued on February 01,
2016, the new enforcement authority
recognized that all the files and/or
administrative proceedings pending resolution
containing requests made under the regime
approved by Section 161 of Law No. 26,522,
and its regulations, including the proposal
submitted by the Company and its
subsidiaries, comply with the limits relating to

multiplicity of licenses established by Section
45 of Law No. 26,522, as amended by
Emergency Decree No. 267/2015. Therefore,
they shall be deemed concluded and filed.
In addition, in the same administrative act,
that agency also repealed Resolution No.
1,121/AFSCA/2014, which had ordered the
ex-officio divestiture procedure.

9.4.2. Other Resolutions issued by AFSCA.
We refer to Resolution No.
1,329/AFSCA/2014, which amends Resolution
No. 1,047/AFSCA/2014, whereby the
AFSCA approved the National Standard for
Terrestrial and Broadcast Digital Television
Audiovisual Communication Services, and to
Decree No. 2,456/2014, which approves the
National Digital Audiovisual Communication
Services Plan. Both the Resolution and the
Decree are manifestly contrary to Law No.
26,522, which has higher hierarchy, because
they contradict the rights of the current
licensees of broadcast television services,
including ARTEAR and the subsidiaries that
exploit broadcast television services.

This regulatory framework was subsequently
supplemented by three resolutions. Through
Resolution No. 24/AFSCA/2015, AFSCA
approved the Technical Plan for Terrestrial
Digital Television Frequencies for important
areas of the national territory. Through
Resolution No. 35/AFSCA/2015, AFSCA
allocated a digital television station on a
permanent basis to the current licensees
of analog broadcast stations, among which are
ARTEAR and its subsidiary TELECOR
S.A.C.I. in order to develop their transition
to digital technology. Finally, through
Resolution No. 39/AFSCA/2015, AFSCA called
for public bids for the award of digital television
licenses according to the illegitimate categories
created by the regulations of the LSCA.
Through this regulatory framework, the rights
of the current broadcast television licensees
are infringed. These rights should be preserved
intact as provided under Law No. 26,522,
which has higher hierarchy. The main effect of
these regulations, among their technical effects,
is that the current broadcast television licensees
that obtained their licenses pursuant to Law
No. 22,285 will have to bear additional charges
and obligations including, among other things,
multiplexing and broadcasting under their own
responsibility other broadcast television stations.

152

Since the changes introduced under this
regulatory framework have an impact on the
responsibilities and rights of the companies
involved, ARTEAR and TELECOR S.A.C.I.
filed a claim before AFSCA requesting the
revocation of Resolutions No.
1,329/AFSCA/2014, 24/AFSCA/2015,
35/AFSCA/2015 and 39/AFSCA/2015 to
preserve their rights intact as direct or indirect
broadcast television service licensees. They also
filed a claim before the National Executive
Branch requesting the repeal of Decree No.
2,456/2014. As of the date of these financial
statements, the claim filed before AFSCA was
dismissed. Therefore, ARTEAR challenged before
the courts that agency’s decision to dismiss the
claim. The claim filed before the National
Executive Branch is still pending resolution.

9.4.3. Fibertel License.
The Ministry of Communications, as the
highest government agency, replacing the
MINPLAN with respect to this specific
competence, issued Resolution No. 5/2016,
which was notified on February 29, 2016,
whereby it revoked SECOM Resolution No.
100/2010 for legitimacy reasons. This
Resolution, which had been issued by the
former Secretariat of Communications,
had revoked the exclusive telecommunication
service license held by Fibertel S.A., which
was merged into Cablevisión S.A.

The ENACOM issued Resolution No.
1,359/16, whereby it authorized the transfer of
ownership of the Exclusive Telecommunication
Service License that had been granted
to Fibertel S.A., which was merged into
Cablevisión S.A. effective as of April 1, 2003.

9.4.4. NEXTEL.

9.4.4.1. Regulatory Approval of the Acquisition of

NEXTEL
On September 24, 2015, the Official Gazette
published AFTIC Resolution No. 326/15,
whereby that agency ordered Nextel to render
without effect within a term of 30 days, the sale
of a non-majority portion of its shares because
it allegedly contravened effective legislation and
could be sanctioned with the revocation of
its license pursuant to the Communications and
Information Technology Law.

against Resolution No. 326/2015, arguing
that they had standing based on their
acquisition of 49% of the licensee and stating
that the change of control alleged by AFTIC
had not occurred.

NEXTEL requested the suspension of the
effects of Resolution No. 326/2015 and also
filed an appeal against that administrative act.

On January 29, 2016, the Company and Nextel
appeared before the ENACOM pursuant to
Section 8 of Decree No. 267/15, which amends
Section 13 of Law No. 27,078 in order to
request authorization for the transfer of control,
in full compliance with the new legal
framework.

On February 22, 2016, the ENACOM issued
Resolution No. 133/2016, whereby it partially
admitted the appeals that had been filed against
AFTIC Resolution No. 326/2015, in order to
consider the Company’s request for approval of
the transfer of control.

On March 7, 2016, the ENACOM issued
Resolution No. 280/2016, whereby it
authorized the change of control of NEXTEL
COMMUNICATIONS ARGENTINA S.R.L.
in favor of Cablevisión S.A.

This transaction is subject to the corresponding
administrative approval of the CNDC.

9.4.4.2. Status of the frequencies allocated to

NEXTEL.
Through Resolution No. 325/2015, AFTIC
decided, abruptly and without prior notice
of its decision, to dismiss the requests for
extensions of certain frequencies allocated to
NEXTEL, revoking them in that same act.

On October 9, 2015 Grupo Clarín and
Cablevisión filed an appeal against Resolution
No. 325/2015 grounding their legitimate
interest on their acquisition of 49% of the
licensee.

NEXTEL first requested the suspension
of the effects of Resolution No. 325/2015
and then filed an appeal against that
administrative act.

On October 9, 2015, Grupo Clarín S.A. and
Cablevisión filed the corresponding appeals

The ENACOM issued Resolution No.
134/2016, whereby it decided to grant

153

partially the appeal filed by NEXTEL
COMMUNICATIONS ARGENTINA S.R.L.
against AFTIC Resolution No. 325/2015.
Even though this Resolution did not entail the
automatic extension of the frequencies involved,
the ENACOM ordered the corresponding
areas to analyze each file to verify compliance
with the requirements of the effective regulatory
framework to be eligible for obtaining the
requested extensions.

The ENACOM issued Resolution No. 281/16,
whereby it authorized the extensions for a
term of 10 years counted as from the original
expiration of the authorizations for the use
of the frequencies that had been dismissed and
revoked through Resolution No. 325/2015.

9.4.4.3. Other requests for authorization filed with

the ENACOM
On June 22, 2016, NEXTEL made a filing
with the ENACOM in order to request
authorization for direct and indirect share
transfers that would imply a direct and/or
indirect change of control in favor of
NEXTEL, pursuant to Section 13 of Law
No. 27,078 with respect to the licensees
of telecommunication services listed below:

• Fibercomm S.A.
• Trixco S.A.
• Callbi S.A.
• Infotel S.A.
• Skyonline de Argentina S.A.
• Netizen S.A.
• Eritown Corporation Argentina S.A.

Within the required term, on January 6, 2017,
the ENACOM issued Resolution No.
111/2017, which under section 1 authorizes
the share transfers mentioned above.

The filing made on June 22, 2016 also included
a request to change the allocation of a portion
of the spectrum that corresponds to the
licensees acquired by the Company in order
to render 4G services, which was not addressed
in ENACOM Resolution No. 111/2017.

effective regulations, thus initiating a new
administrative file. In this last filing, the
Company finally requested:

• The beginning of a Refarming process with
Economic Compensation as provided under
Resolution No. 171/2017.
• The authorization of the agreements executed
by NEXTEL with the licensees acquired by
Cablevisión to operate the services registered by
NEXTEL with the portion of the spectrum
allocated to those licensees to render their
respective services;
• The approval of the registration requested by
NEXTEL of the Advanced Mobile
Telecommunications Service; and,
• The authorization of the change that allows for:
• Changing the allocation and channeling on
a primary basis of the 905-915 MHz and 950-
960 MHz bands to render advanced mobile
communication services at national level with
primary status; and,
• Extending the allocation of the frequency
bands and changing the and channeling from
2500 MHz to 2690 MHz to render advanced
mobile communication services at national
level with primary status.

By means of Resolution ENACOM No.
1033/2017, the ENACOM provided for the
use of the frequency bands between 905
and 915 MHz and between 950 and 960 MHz
for the rendering of the ADVANCED
MOBILE COMMUNICATIONS SERVICE
(“SCMA”), and by means of Resolution
ENACOM No. 1034/2017, the ENACOM
provided for the use of the frequency band
between 2500 and 2690 MHz for the provision
of SCMA, in addition to the current services
when their coexistence is possible.

On March 6, 2017, Nextel was served with
Resolution ENACOM No. 1,299 /2017,
which was published in the Official Gazette on
March 7, 2017 and approves the project for
Refarming with Economic Compensation, filed
by that company to provide Advanced Mobile
Communication Services in the frequencies that
had been subject to changes in allocation
pursuant to ENACOM Resolutions No. 1,033
and 1,034/2017.

In addition, the ENACOM decided to register
Nextel as provider of Advanced Mobile
Communication Services in the Registry of

154

Services; and to authorize the use of the above-
mentioned frequencies.

In the same resolution and as part of the
authorization, that agency imposed additional
Coverage Obligations on Nextel.

It also imposed two obligations that must be
fulfilled prior to initiating the rendering of
Advanced Mobile Communication Services: (i)
the return of a portion of the radio-electric
spectrum, as proposed by Nextel; and (ii) the
creation of a guarantee issued in favor of
and satisfactory to ENACOM for an amount
equal to the value of the radioelectric spectrum
that is subject to return.

The Resolution also orders that Nextel shall
post a performance bond to guarantee the
obligations and responsibilities undertaken
by that company, to be issued in favor and to
the satisfaction of the ENACOM, for the
amount and under the terms that shall be set
forth un the contract to be executed with
the ENACOM. That contract shall establish
the terms, conditions, goals, obligations and
other matters inherent to the rendering of
the Advanced Mobile Communication Services
authorized by that agency, to which Nextel
shall be bound.

9.4.5. Other Matters Related to the Federal

Broadcasting Committee (COMFER, for its Spanish

acronym), subsequently Audiovisual

Communication Services Law Federal Enforcement

Authority (AFSCA), now ENACOM (for its Spanish

acronym).

CABLEVISION
As from November 1, 2002 and until
December 31, 2016, COMFER, then AFSCA,
now ENACOM have initiated summary
administrative proceedings against Cablevisión
and Multicanal (merged into Cablevisión)
for infringements of regulations relating to
programming content. Accordingly, a provision
has been set up in this regard.

June 23, 2010, payable in sixty monthly
installments starting on August 31, 2015.
ARTEAR was also authorized to adhere to the
applicable payment plan for infringements
committed between June 24, 2010 and June 11,
2014, payable in thirty monthly installments
starting on August 31, 2015.

9.4.6. Programming Grid
AFSCA Resolution No. 296/2010, as amended
and/or supplemented, provided guidelines
for the organization of the programming grids
that had to be followed by the owners of
subscription television audiovisual services.
This resolution regulated section 65, subsections
a) and b) of the LSCA and supplemented the
provisions of the regulations to the same section
of Decree No. 1,225/2010.

In spite of Cablevisión’s efforts to organize its
programming grids in accordance with the
provisions of section 65 of Law No. 26,522,
AFSCA initiated multiple summary proceedings
in connection with the cable television licenses
of which Cablevisión is the lawful successor.
AFSCA contended that Cablevisión had failed
to comply with the regulations set forth by
AFSCA Resolution No. 296/2010. Cablevisión
submitted the responses set forth under section
1, Exhibit II of AFSCA Resolution No.
224/2010 in connection with such accusations.
A decision has been rendered on some of the
summary proceedings and, as a result, a
fine was imposed on Cablevisión, while other
proceedings are pending resolution. Cablevisión
has appealed these decisions. Some of the
appeals filed by Cablevisión have been decided
against it and were appealed.

155

section 65 of Law No. 26,522 and Decree No.
1.225/2010. Therefore, it also suspended the
application of section 6 of AFSCA Resolution
No. 296/2010 on the grounds that Cablevisión’s
alleged serious non-compliance was not
contemplated in the Law or in the Decree. The
National Government filed an appeal with
the Supreme Court against this decision. Such
appeal was dismissed. Consequently, AFSCA
filed a direct appeal with the Supreme Court,
which is still pending resolution.

In re “AFSCA v. CABLEVISION SA Decree
1,225/10 – RES. 296/10 on/ Proceeding
leading to a declaratory judgment” currently
pending before the Federal Court of First
Instance on Administrative Matters No. 9,
on May 16, 2012 the Court granted an
injunction that had been requested by AFSCA,
ordering Cablevisión and/or the pay television
audiovisual services it exploits, to conform
to Section 65, paragraph 3 b of Decree No.
1,225/2010 and Sections 1, 2, 3, 4 and 5 of
AFSCA Resolution No. 296/2010, until a final
judgment is rendered on the merits of the
case. Cablevisión has appealed such injunction.

On August 6, 2012, Cablevisión was served
notice of a decision rendered by the Federal
Court of First Instance on Administrative
Matters No. 9 of the City of Buenos Aires,
whereby that court imposed a fine on
Cablevisión of Ps. 20,000 per day for each day
of delay in complying with the injunction
that ordered Cablevisión to comply with
Section 65 of Decree No. 1,225/2010 and
AFSCA Resolution No. 296/2010. Cablevisión
filed an appeal against that decision in due
time and form. However, the Court of Appeals
ignored the strong grounds asserted by
Cablevisión; partially confirmed the decision
rendered in the first instance; and reduced
the fine to Ps. 2,000 per day for each day of
delay, to be calculated as from the date the
decision is deemed final. An appeal was
filed with the Supreme Court of Argentina,
which was dismissed by the intervening
Chamber. Cablevisión filed an appeal against
such decision, which was dismissed by the
Supreme Court of Argentina.

On October 21, 2013 Cablevisión was
served with new charges brought for alleged
noncompliance with AFSCA Resolution No.
296/2010, clearly violating the preliminary

injunction mentioned above. Accordingly,
Cablevisión filed an appeal, but no decision has
been rendered on the matter as of the date
of these financial statements.

On December 23, 2013, Cablevisión informed
AFSCA of its new programming grid in digital
and analogical systems, expressly maintaining
the reserves brought to continue challenging the
legality and constitutionality of section 65 of
Decree No. 1,225/2010 and AFSCA Resolution
No. 296/2010, as amended.

Section 7 of the Emergency Decree, which
amends, among other things, Section 10 of
Law No. 27,078 sets forth that all the physical
link and radio electric link subscription
television services shall be governed by the
Digital Argentina Act. Therefore, Cablevisión
is no longer subject to Section 65 and its
implementing regulations.

The new General Rules approved by ENACOM
Resolution No. 1,394/16 order providers of
both types of services (physical and radio-
electric link) to guarantee their compliance with
a programming grid in each Coverage Area.
Cablevisión states that it complies with all the
obligations set out under that Resolution.

9.4.7. Audiovisual Communications Law of the

Republic of Uruguay.
Law No. 19,307 was published in the Official
Gazette of the Republic of Uruguay on January
14, 2015. This Law governs radio, television,
and other audiovisual communication services
(hereinafter, the “Audiovisual Communications
Law”). Section 202 of this law provides that the
Executive Branch shall issue the implementing
regulations for this law within a 120-day term
as from the day following the publication of
this law in the Official Gazette. As of the date
of the financial statements, only Decree No.
45/015 has been issued, but the implementing
regulations for most of the sections of this law
are still pending.

Such Decree provides that the concession
for the use and allocation of the radio-electric
spectrum for non-satellite audiovisual
communication services shall be granted for a
term of 15 years.

Section 54 of the Audiovisual Communications
Law provides that an individual or legal entity

156

cannot be allocated the full or partial ownership
of more than 6 authorizations or licenses
to render television services to subscribers
throughout the national territory of Uruguay.
Such limit is reduced to 3 if one of
the authorizations or licenses includes the
department of Montevideo. Section 189 of
this law provides that in the cases where such
limits were exceeded as of the entry into force
of the Law, the owners of those audiovisual
communication services shall transfer the
necessary authorizations or licenses so as not to
exceed the limits mentioned above within a
term of 4 years as from the date of entry into
force of the Audiovisual Communications Law.

Adesol S.A. is analyzing the possible impact
on its business that could be derived from the
change in the regulatory framework and the
eventual legal actions it may bring to safeguard
its rights and those of its shareholders.
That company is also monitoring the different
unconstitutionality claims filed by other
companies against certain sections of the
above-mentioned law to consider whether the
decisions to be rendered by the Supreme
Court in those proceedings may be favorable to
the position of Adesol S.A. in the future. On
April 7, 2016, 28 unconstitutionality claims
were brought against the above mentioned
law. To date, the Supreme Court has issued
28 decisions, whereby it declared the
unconstitutionality of Sections 39 subsection 3,
55, 56 subsection 1, 60 point C, 98 subsection
2, 117 subsection 2, 143 and 149 subsection
2 of Law No. 19,307. It is noteworthy that
some of the decisions rendered in this respect
by the Supreme Court dismissed the
unconstitutionality claim filed by the claimant
with respect to Section 54 of that Law.

Note 10

Call options
ARTEAR
Pursuant to ARTEAR’s acquisition of 85.2%
of its subsidiary Telecor’s capital stock in 2000,
Telecor’s sellers have an irrevocable put option
of the remaining 755,565 common, registered,
non-endorsable shares, representing 14.8%
of the capital stock and votes of Telecor, for a
16-year term as from March 16, 2010 at a price

of USD3 million and ARTEAR has an
irrevocable call option for such shares for a term
of 26 years as from March 16, 2000 at a price
of approximately USD4.8 million, which
will be adjusted at a 5% nominal annual rate
as from April 16, 2016. Subsequently, under an
addendum to the original agreements, the
beginning of the effectiveness of the irrevocable
put option was changed from March 16, 2010
to March 16, 2013. On March 15, 2013, on
February 18, 2016 and on February 21, 2017,
additional addenda to the agreement were
signed, whereby the beginning of the
effectiveness of the irrevocable put option was
changed from March 16, 2013 to March 16,
2016, from such date to March 16, 2017, and
from such date to March 16, 2021, respectively.

CMD
Pursuant to CMD’s acquisition of 60.0% of
Interpatagonia S.A.’s (now Interwa S.A.) capital
stock in 2007, CMD and the sellers granted
each other reciprocal call and put options on all
of the shares owned by each of the parties,
effective from August 1, 2011 to July 31, 2012.

In connection with the acquisitions mentioned
in Note 12.e., CMD and the seller executed
new agreements whereby they granted each
other new reciprocal call and put options on all
of the shares owned by each of the parties.
The price of the shares varies depending on who
exercises the option.

As of the date of these consolidated financial
statements, as mentioned in Note 12.e, CMD
holds a reciprocal call and put option for 6.66%
of the shares of Interwa S.A., which is effective
until December 2017. See Note 26.b.

The balances arising from the put options
mentioned above are disclosed under the item
Other Current and Non-Current Liabilities
of the Balance Sheet, with an offsetting entry
under Other Reserves and Non-Controlling
Interest under Equity.

ADESOL
On December 22, 2016, Adesol S.A. executed
a call option agreement (the “Call Option
Agreement”) with the majority shareholder of
the special purpose entities, whereby, Adesol
has the right to exercise, until December 31,
2021, the irrevocable call option on the shares
of those companies (the “Call Option”). If it

157

Note 11

Financial instruments

11.1 Financial Risks Management (*)
(*) The amounts included in this note are stated
in millions of Argentine pesos.

Grupo Clarín is a party to transactions
involving financial instruments, which entail
exposure to market, currency and interest
rate risks. The management of these risks is
based on the particular analysis of each
situation, taking into account its own estimates
and those made by third parties of the evolution
of the respective factors.

11.1.1 Capital Risk Management
Grupo Clarín manages its capital structure
seeking to ensure its ability to continue
as an ongoing concern, while maximizing the
return to its shareholders through the
optimization of debt and equity balances.

As part of this process, Grupo Clarín monitors
its capital structure through the debt-to-equity
ratio, which is equal to the quotient of its
net debt (Debt less Cash and Cash Equivalents)
divided by its adjusted EBITDA.

The debt-to-equity ratio for the reporting years
is as follows:

December 31, 2016

December 31, 2015

809

(416)

(306)

966

0.09

6,935

(2,026)

(680)

4,229

(ii) 8,361

0.51

exercises the Call Option, the purchase price
has been preliminarily established in the amount
of Ps. 127,600,002, subject to an eventual
adjustment in case certain circumstances
provided under the Call Option Agreement
occur.

In addition to the execution of the Call Option
Agreement, Adesol S.A. paid to the grantor
an option premium under the Call Option
in the amount of Ps. 44,660,000. If Adesol S.A.
does not exercise the Call Option, the seller
shall irrevocably retain the amount paid by
Adesol S.A., and the agreement will be
terminated.

If it exercises the Call Option, the assignment,
sale and transfer of the shares in favor of Adesol
S.A. shall be subject, as condition precedent,
to the approval by the Communication Services
Regulatory Agency of the Republic of Uruguay.

Loans (i)
Less: Cash and Cash Equivalents

Cash and Banks

Other Current Investments

Net Debt

Adjusted EBITDA

Debt-to-Equity Ratio

(i) Long-term and short-term loans, including
derivatives and financial guarantee agreements.
(ii) Includes Ps. 7,295 million disclosed under
Discontinued operations.

The debt-to-equity ratio is reasonable compared
to other industry players and considering
the particular situation of Argentina and of the
companies that make up Grupo Clarín.

158

11.1.2 Categories of Financial Instruments

Financial Assets
Loans and Receivables (1)
- Cash and Banks

- Other Investments
- Receivables (2)
At fair value with an impact on net income

- Other Investments

- Financial Instruments

Total Financial Assets

Financial Liabilities

At amortized cost
- Debt (3)
- Accounts Payable and Other Liabilities (4)
Total Financial Liabilities

(1) Net of the allowance for doubtful accounts of
approximately Ps. 103 million and Ps. 272 million,
respectively.
(2) Includes receivables with related parties of
approximately Ps. 200 and Ps. 52 million, respectively.
(3) Includes loans with related parties of approximately
Ps. 377 million and Ps. 32 million, respectively.
(4) Includes debts with related parties of approximately
Ps. 72 million and Ps. 95 million, respectively.

December 31, 2016

December 31, 2015

416

4,294

306

5,046

809

2,983
3,792

2,026

501

4,798

1,144

8,527

6,935

5,464
12,399

11.1.3 Objectives of Financial Risk Management
Grupo Clarín monitors and manages the
financial risks related to its operations; these
risks include market risk (including exchange
risk, interest rate risk and equity price risk),
credit risk and liquidity risk.

Grupo Clarín does not enter into financial
instruments for speculative purposes as
common practice.

11.1.4 Exchange Risk Management
Grupo Clarín enters into certain foreign
currency transactions; therefore, it is exposed
to exchange rate fluctuations. During the year,
certain subsidiaries of Grupo Clarín entered
into foreign currency forward transactions.

The following table shows the monetary assets
and liabilities denominated in US dollars, the
main foreign currency involved in Grupo
Clarín’s transactions, at the closing of the years
ended December 31, 2016 and 2015:

159

Assets

Other Receivables

Trade Receivables

Other Investments

Cash and Banks

Total Assets

Liabilities

Debt

Seller financings

Other Liabilities

Trade Payables and Other

Total Liabilities

Bid/offered exchange rates as of December 31,
2016 and 2015 were of Ps. 15.79 and Ps. 15.89
and Ps. 12.94 and Ps. 13.04; respectively.

11.1.4.1 Foreign Exchange Sensitivity Analysis
Grupo Clarín is exposed to exchange risk, mainly
with respect to the US dollar.

Taking into consideration the balances disclosed
above, Grupo Clarín estimates that the impact
of a 20% favorable/unfavorable fluctuation of the
US dollar exchange rate would generate an
income/loss before taxes of approximately Ps. 80
million and Ps. 824 million as of December 31,
2016 and 2015, respectively. Income from
foreign exchange agreements in case of a 20%
favorable/unfavorable fluctuation of the US
dollar exchange rate would generate a gain/loss
before taxes of approximately Ps. 118 million as
of December 31, 2015. As of December 31,
2016, the Company had not executed any
foreign exchange agreements.

The sensitivity analysis presented above is
hypothetical since the quantified impact is not
necessarily an indicator of the actual impact,
because exposure levels may vary over time.

(in millions

of Argentine pesos)

December 31, 2016

December 31, 2015

176

143

405

368

407

803

626

488

1,501

2,710

6,092

667

6,831

Additionally, even though Grupo Clarín conducts
its operations in Argentine pesos, an eventual
devaluation of that currency may have an indirect
impact on its operations, depending on the
ability of the relevant suppliers to reflect that
effect on their prices.

11.1.5. Interest Rate Risk Management
As of December 31, 2016, Grupo Clarín was
exposed to interest rate risk mainly through
ARTEAR. This is due to the fact that this
company has taken loans at fixed and variable
interest rates and has not entered into hedge
agreements to mitigate these risks. If interest rates
had eventually been 100 basic points higher
and all the variables had remained constant, the
additional estimated loss before taxes would
have been of approximately Ps. 1.7 million and
Ps. 6.3 million as of December 31, 2016 and
2015, respectively.

11.1.6. Equity Price Risk Management
Grupo Clarín is exposed to equity price risk in
connection with its holdings of mutual funds,
securities and bonds and foreign exchange
agreements.

Its sensitivity to the variation in the price of these
instruments is detailed below:

December 31, 2016

December 31, 2015

Investments valued at quoted prices at closing (Level 1)

Other receivables valued at quoted prices at closing(Level 2)

215

1,115

160

The estimated impact of an eventual 10%
favorable/unfavorable fluctuation of the quoted
price of investments valued at closing, assuming
that all the other variables remain constant,
would generate an income/loss before taxes of
approximately Ps. 20 million and Ps. 111 million
as of December 31, 2016 and 2015, respectively.
Income from foreign exchange agreements in
case of a 20% favorable/unfavorable fluctuation
of the US dollar exchange rate would generate
a gain/loss before taxes of approximately Ps. 118
million as of December 31, 2015. As of
December 31, 2016, the Company had not
executed any foreign exchange agreements.

A potential 10% favorable/unfavorable
fluctuation of the quoted price of investments
valued as Level 2 would generate an income/loss
before taxes of approximately Ps. 9 million and
Ps. 3 million as of December 31, 2016 and
2015, respectively.

11.1.7 Credit Risk Management
Credit risk is defined as the risk that one of
the parties may breach its contractual
obligations, generating an eventual financial
loss for Grupo Clarín.

Credits involving the Cable Television,
Internet Access and Telephony Segment
The credit risk affects cash and cash equivalents,
deposits held at banks and financial
institutions, as well as credit exposures with
clients, including other remaining credits and
transactions involved. The company actively
monitors the credit worthiness of their treasury
instruments and the counterparties related to
derivatives in order to minimize credit risk.
Upon expiration of invoices issued, if they are
still outstanding, these companies file several
claims for collection purposes.

Bank deposits are held in renowned institutions.

No significant credit risk concentration is
observed concerning clients, due to the
atomization of the subscriber base.

As of December 31, 2016 and 2015, non-
impaired past due trade receivables amounted
to approximately Ps. 454.8 million and Ps. 342.0
million, respectively. These receivables involve
subscribers with no recent insolvency record.

As of the same dates, the allowance for bad
debts amounted to Ps. 203.5 million and
Ps. 131.1 million, respectively. This allowance
for trade receivables is sufficient to cover the
past due doubtful trade receivables.

Credits of the Printing and Publishing
Segment
The companies that operate in this segment
conduct an analysis of the clients’ financial
position at the beginning of the business
relationship, through a credit risk report
requested from several credit rating agencies.
The credit amount granted to each client is
monitored on a daily basis, with reports
being submitted to the financial management.

The credit risk affects cash and cash equivalents,
deposits held at banks and financial institutions,
as well as credit granted to clients.

The maximum theoretical credit risk exposure
of the companies operating in this segment
is represented by the book value of net financial
assets, disclosed in the consolidated balance sheet.

For the purposes of conducting an analysis of
the suitability of the allowance for bad debts,
these companies consider each client on a case
by case basis, verifying, among other factors,
if there is any record of delinquency, risk
of bankruptcy, insolvency proceeding or other
judicial proceeding. Trade receivables comprise
a significant number of clients and are internally
classified among the following categories:
Advertising, Official, Distribution, Internet
and Subscriptions, among others.

The companies that operate in this segment
have recorded an allowance for doubtful
accounts accounting for 4% of accounts
receivable as of December 31, 2016 and 2015.

The companies that operate in this segment
did not set up an allowance for bad debts for
those amounts in which no significant change
was recorded in the credit rating, considering
such amounts as recoverable.

The companies that operate in this segment
have a wide range of clients, including
individuals, businesses - medium-and-large-
sized companies - and governmental agencies.
Therefore, these companies’ receivables are
not subject to credit risk concentration.

161

Credits from the Broadcasting and
Programming Segment
Credit risk represents for the companies that
operate in this segment the risk of incurring in
losses arising from possible breaches of the
contractual obligations assumed by business or
financial counterparties. This risk may be due to
economic or financial factors, or to particular
circumstances of the counterparty, or to other
economic, commercial or administrative factors.

Credit risk affects cash and cash equivalents,
deposits held at banks and financial institutions
in a wide sense, and every form of credit
granted to the companies that operate in this
segment. The maximum exposure to credit
risk is represented by the value of financial assets
considered as a whole, recorded in the
Consolidated Balance Sheet under Cash and
Banks, Other Investments, Trade Receivables
and Other Receivables.

Financial instruments are executed with
creditworthy banks and financial institutions
renowned in the market and for terms not
longer than three months. In this sense, the
companies that operate in this segment have a
policy of diversifying their investments among
different banks and financial institutions,
thus reducing the concentration risk in only
one counterparty.

As to the credit risk related to financial credit,
the companies that operate in this segment
evaluate the credit standing of the different
counterparties to define their investment levels,
based on their equity and credit rating. As to
Trade Receivables, such companies have a
wide range of clients, categorized depending on
the type of business. These categories are:

Information as of December 31, 2016:

Maturities

Matured

Without any established term

First Quarter 2017
Second Quarter 2017

Third Quarter 2017

Fourth Quarter 2017

More than 1 year

Advertising, Signals, Programming and other.
Within this classification, clients can also be
classified as advertising agencies, direct
advertisers, distributors of cable TV, broadcast
TV stations and other, each of them of a
different magnitude. Due to this diversity of
clients, there is not a significant credit risk
concentration in this respect.

The allowance for bad debts is set up upon
conducting an analysis of the debtor portfolio,
which is recorded as follows:

− In the case of individual risks identified
(risks of bankruptcy, insolvency proceedings
or judicial proceedings pending with the
company), for its total value.
− The rest of the cases is decided based on
the aging of the past due debt, the progress of
the collection procedures, the solvency
conditions and the variations observed in the
clients’ settlement periods.

11.1.8. Liquidity Risk Management
Liquidity risk is the risk that Grupo Clarín may
not be able to fulfill its financial obligations
at maturity. Grupo Clarín manages liquidity risk
through the management of its capital structure
and, if possible, the access to different capital
markets. It also manages liquidity risk through
a constant review of the estimated cash flows
to ensure that it will have enough liquidity to
fulfill its obligations.

11.1.8.1 Interest Rate Risk and Liquidity Risk Table
The following table shows the breakdown of
financial liabilities by relevant groups of
maturities based on the remaining period as
from the date of the balance sheet through the
contractual maturity date. The amounts
disclosed in this table represent undiscounted
cash flows (principal plus contractual interest).

Debt

Other Debts

249
47

603

989

595

209

1,937
289

201

3,290

162

Information as of December 31, 2015:

Maturities

Matured

Without any established term

First Quarter 2016

Second Quarter 2016

Third Quarter 2016

Fourth Quarter 2016

More than 1 year

11.1.9. Financial Instruments at Fair Value
The following table shows Grupo Clarín’s
financial assets and liabilities measured at fair
value at the closing of the reporting year:

Debt

843

397

1,068

1,201

4,478

7,989

Other Debts

1,216

234

3,214

409

367

197

5,664

December 31, 2016

Quoted Prices

(Level 1)

Other Significant

Observable Items

(Level 2)

Assets

Current Investments

306

215

December 31, 2015

Quoted Prices

(Level 1)

Other Significant

Observable Items

(Level 2)

Assets

Current Investments

Financial Instruments

1,144

1,115

Financial assets and liabilities are valued using
quoted prices for identical assets and liabilities
(Level 1), and the prices of similar instruments
arising from sources of information available
in the market (Level 2). At the closing of
the reporting years, Grupo Clarín did not have
any financial asset or liability for which a
comparison had not been conducted against
observable market data to determine their
fair value (Level 3).

11.1.10. Fair Value of Financial Instruments
The book value of cash, accounts receivable and
current liabilities is similar to their fair value,
due to the short-term maturities of these
instruments.

The book value of receivables with estimated
collection periods that extend through time,
is measured considering the estimated collection
period, the time value of money and the
specific risks of the transaction at the time of
measurement and, therefore, such book value
approximates its fair value.

Non-current investments classified as loans and
receivables have been measured at amortized
cost, and their book value approximates their
fair value.

The fair value of non-current financial liabilities
(Level 2) is measured based on the future
cash flows of those liabilities, discounted at a
representative market rate available to Grupo
Clarín for liabilities with similar terms (currency
and remaining term) prevailing at the time of
measurement.

163

The following table shows the estimated fair
value of non-current financial liabilities:

December 31, 2016

December 31, 2015

Book Value

Fair Value

Book Value

Fair Value

Non-Current Debt

469

443

4,033

3,903

Note 12

Interests in subsidiaries and affiliates
a. During 2007, AGEA increased its interest in
CIMECO from 33.3% to 50.0%, and executed
call and put options on an additional interest in
CIMECO’s capital stock. During 2008, AGEA
partially assigned the rights and obligations
arising from such options to its subsidiary AGR
and to the Company. Subsequently, in 2008,
AGEA, AGR and the Company exercised such
call option, increasing, directly and indirectly,
the Company’s equity interest in CIMECO and
Papel Prensa to 100% and 49%, respectively.

On April 10, 2008, the Company and the
parties to the above-mentioned transaction
notified CNDC of such transaction and
on May 12, 2008 filed form F-1. After such
notice and as of the date of these financial
statements, the Company submitted additional
information requested by the CNDC.

On February 3, 2017, the Company, AGEA
and AGR were served with Resolution No. 75
issued by the Secretariat of Trade of the
Ministry of Production on January 31, 2017,
corresponding to CNDC Opinion No. 1,417
dated December 22, 2016, whereby it
authorized the above-mentioned transaction.

b. On January 11, 2008, IESA acquired the
controlling interest of a group of companies
mainly engaged in sports journalism,
production and commercialization of shows,
and the production of motor racing television
broadcasting. The share purchase agreement
sets forth certain objectives to be met by
such group of companies. In case of breach of
such provision, the sellers shall have to pay an
indemnification. On February 8, 2017, IESA
was served with Resolution No. 59 issued
by the Secretariat of Trade of the Ministry of
Production on January 31, 2017 corresponding
to CNDC Opinion No. 1,407 dated December

15, 2016, whereby it authorized the above-
mentioned transactions.

c. On September 2, 2008, ARTEAR increased
its equity interest in Pol-Ka and SB Producciones
S.A. to 55% of such companies’ capital stock
and votes, thus acquiring a controlling interest
in both companies, in which it previously
exercised common control. On February 8,
2017, ARTEAR was served with Resolution
No. 73 issued by the Secretariat of Trade of the
Ministry of Production on January 31, 2017
corresponding to CNDC Opinion No. 1,406
dated December 15, 2016, whereby it
authorized the above-mentioned transactions.

d. On February 10, 2011, CMD sold to a
third party all of its shares of Dinero Mail, for
approximately USD 4.4 million in cash; part
of the price was withheld as guarantee.

e. On August 17, 2011, CMD executed a
stock purchase agreement, whereby it increased
by 20% its interest in Interpatagonia S.A.
(now Interwa S.A.), where it now holds 80% of
the capital stock. CMD paid approximately
Ps. 4.3 million in consideration for the shares.

On November 25, 2014, one of the sellers
of Interwa S.A.’s shares, as mentioned in Note
10 to these consolidated financial statements,
exercised its put option for 6.66% of the shares
of that company for approximately Ps. 1.5
million, payable in six monthly installments as
from December 2014.

On January 8, 2015, CMD exercised the call
option for an additional 6.66% of the equity
interest in Interwa S.A. as mentioned under
Note 10 to these consolidated financial
statements, for approximately Ps. 1.5 million,
payable in five monthly installments as from
January 2015.

164

f. On September 30, 2015, ARTEAR and
AGEA, together with other companies, created a
company under the name “RPA Media Place
S.A.,” engaged in advertising on digital websites,
with an equity capital of Ps. 100,000. Each of
ARTEAR and AGEA hold a 19% interest in
RPA Media Place S.A. On November 14, 2015,
that company was registered with the IGJ.

g. On August 20, 2015, FEASA together with
Publirevistas S.A., created a company under
the name “Exponenciar S.A.,” engaged in
the organization, development and operation
of fairs, exhibitions, seminars and conferences,
with an equity capital of Ps. 100,000. FEASA
holds a 50% interest in Exponenciar S.A.
As of the date of these financial statements, the
incorporation of that company is pending
registration with the IGJ.

h. On October 8, 2015, CMD entered into a
stock purchase agreement, whereby it increased
its interest in Electro Punto Net S.A. by 26%.
The amount of this transaction is of
approximately Ps. 11.8 million. In December
2015, Electro Punto Net S.A. capitalized
irrevocable contributions made by CMD for
Ps. 8 million, increasing CMD’s interest in the
capital stock of Electro Punto Net S.A. to
54.3%. In December 2016, Electro Punto Net
S.A. capitalized irrevocable contributions made
by CMD for Ps. 86 million, increasing CMD’s
interest in the capital stock of Electro Punto
Net S.A. to 65.6%.

i. On September 10, 2015, the Board of
Directors of Cablevisión approved the assignment
of the rights and obligations held by Grupo
Clarín under an offer it had submitted to NII
Mercosur Telecom, S.L.U. and NII Mercosur
Móviles, S.L.U. (hereinafter, the “Sellers”)
for the acquisition of 49% of the capital stock
of NEXTEL COMMUNICATIONS
ARGENTINA S.R.L. and an option to acquire,
together with its subsidiary Televisión Dirigida
S.A., subject to certain conditions -among them,
the regulatory approvals- 51% of the remaining
capital stock. The price of the transaction was
USD 165 million (out of this amount, USD 80
million accounts for 49% and USD 85 million
accounts for 51%) plus the right to collect an
additional amount of up to USD 13 million
subject to the fulfillment of certain conditions.
The offer submitted by Grupo Clarín was subject
to the acceptance of the Sellers. On September
11, 2015, the Sellers accepted the offer submitted

by Grupo Clarín and, on the same date, the
Sellers accepted the assignment of the rights
under such offer in favor of Cablevisión, offering
Cablevisión the acquisition of 49 % of the
capital stock of NEXTEL and the option to
acquire the remaining 51%. In order to guarantee
the rights and obligations under the offer, the
capital stock owned by NII Mercosur Móviles,
S.L.U was pledged (subject to registration with
the Public Registry of Commerce). The
transaction was completed on September 14,
2015, upon payment by Cablevisión and its
subsidiary of an aggregate USD 159 million. The
companies undertook to create a guarantee fund
with the USD 6 million balance to cover any
potential liabilities of NEXTEL (this fund was set
up on October 7, 2015). In addition, upon the
fulfillment of certain conditions precedent, on
October 1, 2015, Cablevisión paid to the Sellers
the additional amount of USD 12.73 million.
On June 3, 2016, the assignment of 49% of the
capital stock of NEXTEL in favor of Cablevisión
was registered with the IGJ. Under the terms of
the offer, NEXTEL would continue to be
controlled and operated by the Sellers until the
option to acquire the remaining 51% of the
capital stock had been exercised.

As of December 31, 2015, the call option was
not legally exercisable and uncertainties remained
regarding the obtainment of the required
regulatory authorization. As of December 31,
2015, Cablevisión did not have control over
NEXTEL taking into consideration the elements
provided under IFRS 10. Therefore, it did not
consolidate NEXTEL as of such date. In January
2016, the regulatory framework changed and
the regulatory authorization of the transaction
was no longer necessary.

In addition, on January 27, 2016, Cablevisión
and its subsidiary Televisión Dirigida S.A.
decided to exercise the option to acquire
the remaining 51% of the capital stock and
votes of NEXTEL, and, consequently,
Cablevisión became the holder of 51.4% of the
capital stock and votes of NEXTEL and
Televisión Dirigida S.A. became the holder of
the remaining 48.6%.To such effect, on the
same date, NEXTEL’s management took notice
of the release of the pledge that had been set
up to guarantee the rights and obligations under
the offer. On July 26, 2016, the IGJ registered
the assignment of the remaining 51% of the
capital stock (see Note 9.4.4.).

165

On June 30, 2016, the controlled company
Televisión Dirigida S.A. performed the transfer
of: (i) 392,774,929 membership interests
with nominal value of Ps. 1 each and entitled to
one vote per membership interest, representing
48.5% of the capital stock and votes of
NEXTEL, in favor of Cablevisión; and (ii)
1,000,000 membership interests with nominal
value of Ps. 1 each and entitled to one vote
per membership interest, representing 0.1% of
the capital stock and votes of NEXTEL,
in favor of PEM S.A. As a consequence of the
above-mentioned assignments of membership
interests, Cablevisión holds a 99.9% interest
in the capital stock and votes of NEXTEL, and
the remaining 0.1% is held by PEM S.A. Those
transactions were registered with the IGJ on
November 25, 2016.

On December 28, 2016, PEM S.A. transferred to
Cablevisión 1,000,000 membership interests with
nominal value of Ps. 1 each and entitled to one
vote per membership interest, representing 0.1%
of the capital stock and votes of NEXTEL. As a
result of the assignment of the membership
interests described above, Cablevisión became the
holder of 810,236,480 membership interests with
nominal value of Ps.1 and entitled to one vote
per membership interest, representing 100% of
the capital stock and votes of NEXTEL. The

Cash and Banks

Other Investments

Trade Receivables

Other Receivables

Inventories
Other Non-Current Receivables

Deferred Tax Assets

Property, Plant and Equipment

Intangible Assets

Trade Payables and Other

Taxes Payable

Other Debts

Provisions and Other

Identifiable assets acquired, net

Less investment in associate as of December 31, 2015
Income from Acquisition of Associates

Total consideration transferred

(1) Receivables from the call option.

Company has filed with the IGJ the registration
of the assignment of the membership interests,
which, to date, is pending before that agency.

As of December 31, 2015, Cablevisión
concluded the process of allocating the
acquisition cost of 49% of the capital stock of
NEXTEL and calculated a gain from this
acquisition of Ps. 316.7 million, taking into
consideration that the valuation of its identifiable
assets, liabilities and contingent liabilities in
proportion to the equity interest acquired,
exceeds the acquisition cost.

During this year, Cablevisión concluded the
process of allocating the acquisition cost of 51%
of the capital stock of NEXTEL and calculated a
gain from this acquisition of Ps. 114.1 million,
taking into consideration that the valuation of its
identifiable assets, liabilities and contingent
liabilities in proportion to its equity interest
exceeds the acquisition cost.

The following is a detail of the additional
information required under IFRS with respect to
business combinations corresponding to the
transaction that resulted in Cablevisión’s control
over NEXTEL.

The assets and liabilities recognized as a result of the
acquisition are the following (in millions of Ps.):

As of Acquisition Date

1,140.8

928.7

386.9

101.2

222.2
21.3

167.2

650.9

43.3

(484.2)

(176.9)

(144.2)

(387.8)

2,469.4

(1,201.0)
(114.1)
(1) 1,154.3

166

j. In June 2016, Cablevisión, together with its
subsidiary NEXTEL, acquired 100% (97%
NEXTEL and 3% Cablevisión) of the capital
stock of Fibercomm S.A. and Gridley
Investments S.A. both owners of 100% of the
capital stock of Trixco S.A., holder of licenses
for the use of the radioelectric spectrum in
the 900 Mhz bands. NEXTEL acquired 100%
of the capital stock of WX Telecommunications
LLC and Greenmax Telecommunications
LLC, which are the controlling companies of
Skyonline Argentina S.A., Netizen S.A.,
Infotel S.A. and Callbi S.A., among the most
important subsidiaries. The latter render wireless
telecommunications services and hold licenses
for the use of the radioelectric spectrum in the
2.5 Ghz bands. The aggregate price for those
transactions was USD 138.2 million, equivalent
to Ps. 2,036 million.

During the year, Cablevisión concluded the
process of allocating the acquisition cost of 100%
(97% to NEXTEL and the remaining 3% to
Cablevisión) of the capital stock of Fibercomm
S.A. and Gridley Investments S.A., both owners
of 100% of the capital stock of Trixco S.A.,
and calculated goodwill from this acquisition in
the amount of Ps. 801.7 million.

The following is a detail of the additional
information required under IFRS with respect to
business combinations corresponding to the
transaction that resulted in the acquisition of the
above-mentioned companies.

The assets and liabilities recognized as a result
of the acquisition are the following (in millions
of Ps.):

As of Acquisition Date

Cash and Banks

Other Investments

Trade Receivables

Other Receivables

Other Non-Current Receivables

Property, Plant and Equipment

Intangible Assets

Trade Payables and Other

Taxes Payable

Other Debts

Deferred Tax Liabilities

Identifiable assets acquired, net

Goodwill

Total consideration transferred

10.3

2.1

5.7

14.1

3.0

18.5

1,860.6

(18.3)

(9.9)

(0.6)

(651.2)

1,234.3

801.7

2,036.0

k. On June 30, 2016, the Company, as the sole
shareholder, formed a new subsidiary, “GCSA
Equity, LLC”.

million is payable on the date of execution of
the agreement and the rest is payable on the first
anniversary of the execution date.

l. On August 8, 2016, a subsidiary of CMD,
Electro Punto Net S.A., executed an asset transfer
agreement, whereby it acquired from Meroli
Hogar S.A. certain assets related to the business
of online retail and sale of home appliances and
electronic products in the Province of Córdoba.
The transaction includes negative covenants to
be fulfilled by the shareholders of Meroli Hogar
S.A. The aggregate amount of these transactions
is of USD 3.5 million, out of which USD 2.75

m. On August 16, 2016, the Board of Directors
of Cablevisión approved the Pre-Merger
Commitment executed between that Company,
Copetonas Video Cable S.A., Dorrego Televisión
S.A., Fintelco S.A., Indio Rico Cable Color S.A.,
Primera Red Interactiva de Medios Argentinos
(PRIMA) S.A., Cable Video SUR S.A., Wolves
Televisión S.A. and Tres Arroyos Televisora Color
S.A., whereby, on the effective date of the merger
-October 1, 2016- (“Effective Date of the

167

Merger”), Cablevisión, as absorbing company,
will continue with the operations of Copetonas
Video Cable S.A., Dorrego Televisión S.A.,
Fintelco S.A., Indio Rico Cable Color S.A.,
Primera Red Interactiva de Medios Argentinos
(PRIMA) S.A., Cable Video SUR S.A., Wolves
Televisión S.A. and Tres Arroyos Televisora
Color S.A. (the “Absorbed Companies”), thus
generating the corresponding operating,
accounting and tax effects. As a result of the
above-mentioned corporate reorganization
process, the Absorbed Companies will be
dissolved without liquidation and Cablevisión
S.A. will assume all the activities, receivables,
property and all the rights and obligations of the
above-mentioned companies, existing on the
Effective Date of the Merger, or any that may
exist or arise due to previous or subsequent acts
or activities.

At the Extraordinary Shareholders’ Meeting
of Cablevisión held on September 27, 2016, the
shareholders approved, among other issues:
(i) the Special Parent Company Only Financial
Statement and the Special Balance Sheet for
Merger as of June 30, 2016, which were used as
a basis for the execution of the Pre-Merger
Commitment, and (ii) the Pre-Merger
Commitment executed on August 16, 2016
between Cablevisión and the Absorbed
Companies.

In view of the above, Cablevisión made a filing
with the ENACOM in order to inform that
Agency of the corporate reorganization to
be implemented, so that it would consequently
register under the name of the absorbing
company the “Area Authorizations” required to
exploit Cable Television Services corresponding
to Copetonas Video Cable S.A., Dorrego
Televisión S.A., Indio Rico Cable Color S.A.,
Cable Video Sur S.A., and Tres Arroyos Televisora
Color S.A. The license for Wolves Televisión S.A.

was abandoned because Cablevisión already has
an Area Authorization in the jurisdiction
where Wolves Televisión S.A. exploited the Cable
Television Service. In addition, PRIMA and
Cablevisión made a filing with the ENACOM
in order to request that Agency to register the
license that had been granted to PRIMA in favor
of Cablevisión as a consequence of the corporate
reorganization process.

In addition, at the Extraordinary Shareholders’
Meeting held on September 27, 2016, the
shareholders also unanimously approved:
(i) the amendment of Article Three of the Bylaws
in order to conform the core business of
Cablevisión to the new regulatory framework
under Laws Nos. 27,078 and 26,522, and (ii)
the amendment of Articles Nine and Ten of the
Bylaws in order to eliminate the Executive
Committee. Both amendments of the Bylaws
were filed with the CNV for its approval.

n. On November 7, 2016, ARTEAR executed a
share assignment, sale and transfer agreement
for Ps. 8.7 million, whereby ARTEAR acquired
5,225,000 common, registered, non-endorsable
shares, with nominal value of Ps. 1 each and
entitled to 1 vote per share, representing 100%
of the capital stock of Producciones YAQ S.A.
ARTEAR had paid the full amount under
the agreement as of the date of these financial
statements.

o. On October 25, 2016, ARTEAR executed a
share assignment, sale and transfer agreement for
USD 500,000, whereby it acquired 51,699
common, registered, non-endorsable shares, with
nominal value of Ps. 1 each and entitled to 1
vote per share, representing 40.0004% of the
capital stock of Canal Rural Satelital S.A.
ARTEAR had paid the full amount under the
agreement as of the date of these financial
statements.

168

Note 13

Assets and Liabilities held for distribution to

Shareholders and discontinued operations
As described in Note 25 to the consolidated
financial statements as of December 31, 2016,
certain assets and liabilities have been classified
as of that date as “Assets held for distribution
to shareholders” and as “Liabilities held for

distribution to shareholders”, respectively, as
required under IFRS.

The following is a detail of those consolidated
assets and liabilities disclosed under “Assets held
for distribution to shareholders” and “Liabilities
held for distribution to shareholders” as of
December 31, 2016 (in millions of Argentine
Pesos):

December 31, 2016

Assets

Non-Current Assets

Property, Plant and Equipment

Intangible Assets

Goodwill

Deferred Tax Assets

Investment in Unconsolidated Affiliates

Other Investments

Other Receivables

Total Non-Current Assets

Current Assets

Inventories

Other Receivables

Trade Receivables

Other Investments

Cash and Banks

Total Current Assets

Total Assets Held for Distribution to Shareholders

Liabilities

Non-Current Liabilities

Provisions and Other

Deferred Tax Liabilities

Debt
Taxes Payable

Other Liabilities

Total Non-Current Liabilities

Current Liabilities

Debt

Taxes Payable

Other Liabilities

Trade Payables and Other

Total Current Liabilities

Total Liabilities Held for Distribution to Shareholders

15,365

1,906

3,516

282

817

290

22,258

267

633

1,674

2,003

1,247

5,824

28,082

955

375

8,579
4

110

10,023

1,014

1,621

247

4,357

7,239

17,262

169

In connection with the same situations
mentioned above, the following is a detail
of the results for the years ended December 31,
2016 and 2015, classified as discontinued
operations in these consolidated financial
statements (in millions of Argentine Pesos):

Revenues
Cost of Sales (1)
Subtotal - Gross Profit

Selling Expenses (1)
Administrative Expenses (1)
Income from Acquisition of Companies

Other Income and Expenses, net

Financial Costs

Other Financial Results

Financial Results, net

Equity in Earnings from Affiliates and Subsidiaries

Income before Income Tax and Tax on Assets

Income Tax and Tax on Assets

Net Income from Discontinued Operations

(1) Includes amortization of intangible assets, and
depreciation of property, plant and equipment in the
amount of Ps. 2.660 million and
Ps. 1.662 million for the years ended December 31,
2016 and 2015, respectively.

December 31, 2016

December 31, 2015

30,571

(14,262)

16,309

(4,398)

(3,641)

114

(11)

(2,586)

127

(2,459)

111

6,025

(2,069)

3,956

20,125

(9,341)

10,784

(2,525)

(2,628)

(2,785)

(147)

(2,932)

482

3,183

(875)

2,308

170

In connection with the same situations
mentioned above, the following is a detail
of the cash flows for the years ended December
31, 2016 and 2015, classified as discontinued
operations in these consolidated financial
statements (in millions of Argentine Pesos):

Cash Provided by Operating Activities

Net Income from Discontinued Operations

Income Tax and Tax on Assets

Accrued Interest, net

Adjustments to reconcile net income for the period to

cash provided by discontinued operations:

- Depreciation of Property, Plant and Equipment

- Amortization of Intangible Assets and Film Library

- Net allowances

- Financial Income, except interest

- Equity in Earnings from Affiliates and Subsidiaries

- Income from Acquisition of Associates

- Other Income and Expenses

- Retirement of Property, Plant and Equipment, Net

- Retirement of Intangible Assets, Net

- Changes in Assets and Liabilities

- Income Tax and Tax on Assets Payments

Net Cash Flows Provided by Discontinued Operating Activities

Net Provided by Investment Activities

- Acquisition of Property, Plant and Equipment, net

- Acquisition of Intangible Assets

- Payments for Acquisition of Subsidiaries,

Net of Cash Acquired

- Acquisition of Call Option

- Proceeds from Sale of Property, Plant and

Equipment and other

- Dividends collected

- Collections of Interest

- Collection of Certificates of Deposit
- Transactions with Securities, Bonds and

- Other Financial Instruments, Net

Net Cash Flows used in Discontinued Investment Activities

Cash Provided by Financing Activities

- Loans Obtained

- Repayment of Loans and Issue Expenses

- Payment of Interest

- Collections on Derivatives

- Payments to Non-Controlling Interests, net

Net Cash Flows used in Discontinued Financing Activities

December 31, 2016

December 31, 2015

3,956

2,069

512

2,519

141

519

1,220

(111)

(114)

(7)

331

276

(1,346)

9,968

(9,044)

(23)

(2,032)

118

(90)

(11,043)

7,500

(6,489)

(962)

(604)

(532)

2,309

875

370

1,531

131

312

1,526

(483)

170

244

(749)

6,237

(4,343)

(8)

(799)

(850)

223-

154

(5,587)

1,271

(1,032)

(587)

(178)

(479)

171

Note 14

Reserves, accumulated income and dividends

Balances at the beginning of the year:

Legal Reserve

Retained Earnings

Other Reserves

Optional Reserves

Total

Net Income Attributable to the Parent Company

Dividend Distribution

Changes in Reserves for Acquisition of Investments

Balance at the end of the year

a. Grupo Clarín
On April 25, 2016, at the Annual Ordinary
Shareholders’ Meeting of the Company,
the shareholders decided, among other things,
to appropriate the net income for the fiscal year
2015, which amounted to Ps. 1,884,929,369,
as follows: (i) Ps. 300,000,000 to the
distribution of dividends payable within 30
days as from the date of the Shareholders’
Meeting and (ii) Ps. 1,584,929,369 to the
reserve for future dividends.

b. Cablevisión
On April 20, 2016, at the Annual General
Ordinary and Extraordinary Shareholders’
Meeting of Cablevisión, its shareholders decided
to distribute cash dividends in the amount of
Ps. 750 million, payable in Argentine Pesos
or US Dollars within a term of thirty days as
from the date of such Shareholders’ Meeting
and delegated on the Board of Directors
of Cablevisión the power to establish the time
and payment method. Of that amount,
approximately Ps. 300.1 million corresponds
to the non-controlling interest in this company.
As of the date of these financial statements,
Cablevisión paid Ps. 749.7 million of
distributed dividends.

December 31, 2016

December 31, 2015

119,460,767

1,884,929,369

(3,653,767)

2,625,678,396

4,626,414,765

2,530,041,832

(300,000,000)

(55,231,356)

6,801,225,241

119,460,767

804,101,687

(209,686)

2,071,576,709

2,994,929,477

1,884,929,369

(250,000,000)

(3,444,081)

4,626,414,765

approximately Ps. 299.6 million corresponds to
the non-controlling interest in this company.
As of the date of these financial statements, all
the dividends had been paid.

At the General Extraordinary Shareholders’
Meeting held on January 12, 2016, the
shareholders of Cablevisión decided, among other
things, i) to cancel 207,157 Class B common
book-entry treasury shares with a nominal value
of Ps. 1 representing 0.1% of the capital stock
and votes of that Company; and, consequently,
to reduce the capital stock by Ps. 207,157,
(ii) to ratify the amendment of Section 4 of the
Bylaws approved by the shareholders at the
Extraordinary Shareholders’ Meeting held on
June 30, 2014, which, among other things, had
amended the nominal value of shares from Ps. 1
to Ps. 10,000, and (iii) to delegate on the Board
of Directors the power to determine and establish
the time, form and conditions of the shares
representing the new capital stock to be issued,
as well as the payment of the fractions, if any.

In light of the above, on June 29, 2016, the
Board of Directors of Cablevisión completed the
implementation process to pay fractions in cash
and change the nominal value (of the company’s
shares) and change the nominal value (of the
company’s shares) and, therefore, the capital
stock of Cablevisión is now of Ps. 197,300,000,
represented by 19,730 shares, of which i)
15,785 are Class A book entry shares, with
nominal value of Ps. 10,000 each and entitled
to 1 vote per share, and ii) 3,945 are Class B
book entry shares, with nominal value of

172

Ps. 10,000 each and entitled to 1 vote per share.
At the same meeting of the Board of Directors
new shares were issued.

Maintain the Company’s Level of Capital
Expenditures and its Current Solvency Level” in
the amount of Ps. 865,571,349, thus increasing
the capital stock from Ps. 197,300,000 to
Ps. 1,200,000,000 through the issuance of
100,270 new common book-entry shares with
nominal value of Ps. 10,000 and entitled to
1 vote per share, of which 80,221 will be Class
A common book-entry shares and 20,049
will be Class B common book-entry shares.

Note 15

Non-controlling interest

December 31, 2016

December 31, 2015

Balances as of January 1st

Equity in the Earnings of Other Companies for the year

Dividends and Other Movements of Non-Controlling Interest

Variation in Translation Differences of Foreign Operations

Balance at the end of the year

3,175,288,997

1,649,569,354

(621,111,296)

212,626,908

4,416,373,963

2,282,464,286

1,030,981,112

(185,625,297)

47,468,896

3,175,288,997

The following is a detail of certain
supplementary information required by IFRS
about the non-controlling interest in Cablevisión.
The information corresponds to the subsidiary’s
identifiable assets and liabilities on which the
Company values its investment. The amounts are
stated in millions of pesos and do not take into
consideration intercompany deletions.

Country

Non-controlling interest percentage

Comprehensive income for the year allocated
to non-controlling interest

Accumulated non-controlling interest at year-end

Summarized financial information:

- Dividends distributed to Non-Controlling Interests

- Current assets

- Non-current assets

- Current liabilities

- Non-current liabilities

- Revenues

- Net Income from Continuing Operations
- Other Comprehensive Income

- Total Comprehensive Income

- Cash and Cash Equivalents at Year-end

December 31, 2016

December 31, 2015

Argentina

40.0%

Argentina

40.0%

1,739

3,928

600

5,822

21,610

7,203

9,964

30,571

4,060
422

4,482

2,629

1,034

2,808

174

4,436

14,547

6,489

4,269

20,125

2,450
147

2,597

2,177

173

Note 16

Balances and transactions with related parties
The following table contains the outstanding
balances with related parties:

December 31, 2016

December 31, 2015

Other Receivables

Non-Current

Under Joint Control

Other Related Parties

Current

Under Joint Control

Other Related Parties

Trade Receivables

Current

Under Joint Control

Other Related Parties

Trade Payables and Other

Current

Under Joint Control

Other Related Parties

Debt

Non-Current

Under Joint Control

Other Related Parties

Current

Other Related Parties

Other Liabilities
Current

Other Related Parties

9,449,096

4,200

9,453,296

1,712,712

43,673,728

45,386,440

25,636,838

119,220,158

144,856,996

16,533,444

51,852,341

68,385,785

9,449,096

367,813,013

377,262,109

9,212,575

2,385,289

19,918,734

22,304,023

17,705,032

2,372,249

20,077,281

77,149,743

17,756,038

94,905,781

9,212,575

22,708,882

3,539,651

39,490

174

The following table shows the operations with
related parties for the years ended December 31,
2016 and 2015:

Item

December 31, 2016

December 31, 2015

Under Joint Control

Advertising Sales

Printing Services Sales

Other Sales

Fees for Services

Productions and Co-Productions

Printing and Distribution Costs

Interest Income

Interest Expense

Advertising and Promotion

Expenses

Other Expenses

Other Related Parties

Advertising Sales

Printing Services Sales

Circulation Sales

TV Signals Sales

Other Sales

Fees for Services

Printing and Distribution

Expenses

Interest Income

Interest Expense

Services and Satellites Expenses

Communication Expenses

Advertising and Promotion

Expenses

Other Purchases

Other Expenses

The fees paid to the Board of Directors and
the Upper Management of Grupo Clarín for the
years ended December 31, 2016 and 2015
amounted to approximately Ps. 340 million and
Ps. 450 million, respectively.

27,221,296

(1,892,056)

96,769,444

57,862

(32,250,670)

2,386,521

(2,386,521)

(8,094,133)

96,282,881

55,274,765

30,079

208,240,322

401,284,896

(2,413,443)

(660,261)

(2,342,563)

(3,543,231)

(13,631,693)

16,153,503

1,590,846

63,758,750

(54,343)

(2,005,651)

(31,816,780)

2,380,000

(2,380,000)

(4,726,829)

(18,029)

63,572,372

43,425,538

15,217

176,172,723

314,553,227

(24,190,032)

(589,939)

1,980,648

(21,083,536)

(5,683,371)

(5,883,782)

(7,358,940)

(306,884,709)

(8,249,554)

(10,301,696)

(281,408,575)

(4,289,329)

175

Note 17

Earnings per share
The following table shows the net income and
the weighted average of the number of common
shares used in the calculation of basic earnings
per share:

Net Income used in the Calculation of

Basic Earnings per Share (gain):

From Continuing Operations

From Discontinued Operations

Weighted Average of the Number of Common Shares

used in the Calculation of Basic Earnings per Share

Earnings per Share

The weighted average of the number of
outstanding shares was 287,418,584. Since no
debt securities convertible into shares were
recorded, the same weighted average should be
used for the calculation of diluted earnings
per share.

Basic and Diluted Earnings per Share

From Continuing Operations

From Discontinued Operations

Total Earnings per Share

Dividends paid in the year 2016 amounted to
Ps. 300,000,000 (Ps. 1.04 per share).

Note 18

Covenants, sureties and guarantees provided
a. Note 5.12.1 sets forth certain restrictions to
which Cablevisión (by itself and as the surviving
company and successor of Multicanal and
Prima as a result of the respective mergers) is
subject pursuant to the financial obligations
described in such note.

b. IESA is subject to contractual restrictions
on the transfer of its equity interest in TRISA
and Tele Net Image Corp.

December 31, 2016

December 31, 2015

1,873,615,997

656,425,835

2,530,041,832

1,884,929,369

287,418,584

8.80

287,418,584

6.56

December 31, 2016

December 31, 2015

0.82

7.98

8.80

2.02

4.54

6.56

c. During the year 2009, AGR purchased a
binding machine on credit. To secure the
transaction, AGR granted the supplier a pledge
over the machine. AGR granted joint and
several guarantees for the loans granted by Banco
Comafi S.A. and Standard Bank Argentina S.A.
to Artes Gráficas del Litoral S.A.

d. On September 25, 2012, GCGC executed a
mortgage agreement on a building of its property
securing the payment of the obligations under
the loan with Banco de la Ciudad de Buenos
Aires mentioned in Note 5.12.3. Grupo Clarín
acts as guarantor of said financing.

176

e. During 2014, AGR financed the acquisition
of machinery and equipment through leasing
agreements mentioned in Note 5.12.2 to these
consolidated financial statements. Grupo Clarín
and AGEA are joint debtors of said financing.

f. On July 24, 2015, Grupo Clarín became
the guarantor of certain financial obligations
of AGEA, AGR and Cúspide with Banco Itaú
Argentina S.A.

g. In April 2016, Grupo Clarín became
the guarantor for up to Ps. 65 million to secure
certain financial obligations of AGEA with
Banco Ciudad de Buenos Aires.

h. During this year, the Company became the
guarantor of a loan granted by Banco Santander
Rio S.A. to GCGC. The guarantee will be
effective until January 2019.

i. During this year, the Company became the
guarantor of a loan granted by Banco Santander
Rio S.A. to Auto Sport. The guarantee will be
effective until February 2019.

Note 19

Award of a Bid of the city of Buenos Aires
On June 7, 2011, the Government of the City
of Buenos Aires issued Decree No. 316 whereby
it approved a public bidding process to contract
comprehensive digital services for educational
purposes for elementary school students in the
City of Buenos Aires. Such services include, but
are not limited to, the delivery of one netbook
per student and one notebook per teacher under
a gratuitous bailment agreement, connectivity,
first and second level support, content access
control, replacement in case of theft or damage
and new license, both with certain limitations.
The bid was awarded to PRIMA for a five-year
term, which will start after certain requirements
have been met. As consideration, PRIMA
would receive an amount per student, teacher
and school. As of December 31, 2011 the initial
requirements had been met in order to bring
the agreement into effect and to begin its billing.
The contract expired on November 28, 2016.
However, the parties agreed to a one-year
extension.

Note 20

Long-term savings plan for employees
During the last quarter of 2007, the
Company, together with its subsidiaries, began
to implement a long-term savings plan for
certain executives (directors and managers
comprising the “executive payroll”), which
became effective in January 2008. Executives
who adhere to such plan undertake to
contribute regularly a portion of their salary
(variable within a certain range, at the
employee’s option) to a fund that will allow
them to strengthen their savings capacity.
Each company of the Group where those
executives render services will match the sum
contributed by such executives. This matching
contribution will be added to the fund raised
by the employees. Under certain conditions,
the employees may access such funds upon
termination of their participation in the long-
term savings plan.

Said plan provides for certain special
conditions for those managers who were in the
“executive payroll” before January 1st, 2007.
Such conditions consist of supplementary
contributions made by each company to the
plan related to the executive’s years of service
with the Group. As of December 31, 2016,
such supplementary contributions made by
the Company on a consolidated basis amount
to approximately Ps. 49 million, and the charge
to income is deferred until the retirement of
each executive.

During 2013, certain changes were made to
the savings system, although its operation
mechanism and the main characteristics with
regard to the obligations undertaken by the
company were essentially maintained.

Pursuant to IAS No. 19, the above-mentioned
savings plan qualifies as a Defined Contribution
Plan, which means that the companies’
contributions shall be charged to income on a
monthly basis as from the date the plan
becomes effective.

177

Note 21

Operating Leases
21.1 The Company as Lessee
As of December 31, 2016 and 2015, the
Company is a party to non-cancellable
operating leases, which are currently effective
and have different terms and renewal rights.
The total amount of minimum future
payments for non-cancellable operating leases
is the following (in millions of Ps.):

1 year

Between 1 and 5 years old

5 years or more

21.2 The Company as Lessor
The total amount of minimum future collections
for non-cancellable operating leases of certain
property is the following (in millions of Ps.):

1 year

Between 1 and 5 years old

Note 22

Derivatives
The following is a detail of the derivatives held
by the Company (amounts stated in millions of
Argentine pesos):

Foreign Currency Forward Contracts -

Fair Value Hedge

Total

Less non-current portion:

Foreign Currency Forward Contracts -

Fair Value Hedge

Total

Current portion

No ineffectiveness has been recorded in
connection with fair value hedges.

December 31, 2016

December 31, 2015

246

331

269

505

833

December 31, 2016

December 31, 2015

December 31, 2016
Liabilities

Assets

December 31, 2015
Liabilities

Assets

58.4

178

Note 23

Law No. 26,831 Capital Markets
On December 28, 2012, Capital Markets
Law No. 26,831 (the "Capital Markets Law"),
passed on November 29, 2012 and enacted
on December 27, 2012, was published in
the Official Gazette. The Law provides for a
comprehensive amendment of the public
offering regime, previously governed by Law
No. 17,811. Among other things, the new
law enhances the National Government’s
oversight powers and changes the authorization,
control and oversight mechanisms of all stages
of the public offering process and the role
of all the entities and individuals involved. The
Law became effective on January 28, 2013.

On July 29, 2013, the National Government
issued Decree No. 1023/2013 to regulate
partially the Capital Markets Law that had been
passed on November 29, 2012. Among other
provisions, the Decree regulates Section 20
of said Law, pursuant to which the CNV may
appoint an overseer with veto rights over
the decisions made by the boards of directors
of entities subject to the public offering regime,
or otherwise remove the boards from such
entities for up to 180 days until all deficiencies
found by the CNV are solved. Said Emergency
Decree amends the Law it seeks to regulate
and, therefore, constitutes a regulatory abuse.
Thus, whereas the Law vests on the CNV the
power to appoint an overseer or to remove the
board of directors, the Decree allows the CNV
to exercise that power if the shareholders
and/or noteholders with a two percent (2%)
interest in the company’s capital stock or
outstanding debt securities claim that they have
suffered actual and certain damages or if they
believe their rights may be seriously jeopardized
in the future. The Decree also vests on the
CNV the power to appoint the administrators
or co-administrators that will hold office as a

consequence of the removal of the boards of
directors. Thus, the Decree amends the Law by
granting the CNV powers that were not
provided therein. By doing so, the Executive
Branch is assuming strictly legislative functions
in breach of constitutional provisions.

On September 5, 2013 within the framework
of the Capital Markets Law and its Decree,
the CNV issued Resolution No. 622/2013 (the
“Rules”), whereby it approved the applicable
Rules that repeal the Rules that had been
effective until that date (as restated in 2001).
The new Rules have introduced several changes
in connection with CNV’s powers over the
companies under that agency’s oversight, and
also in connection with the information that
these companies must disclose.

On August 20, 2013, at the request of Mr.
Rubén Mario Szwarc, a minority shareholder
of the Company, and by means of public
deed number two hundred forty five, the
Company was served notice of the decision
rendered by Chamber A of the National Court
of Appeals on Commercial Matters on August
12, 2013, in re “SZWARC, Rubén Mario
v. National Government and Others on
Preliminary Injunction” File No. 011419/2013.
That Chamber decided, among other things,
(i) to declare the unconstitutionality of Sections
. 2, 4, 5, 9, 10, 11, 13, 15 and 16 of Law
No. 26,854, and (ii) to order the provisional,
injunctive suspension of Section 20, subsection
a), second part, paragraphs I and II (or 1 and
2) of Law No. 26,831 and of all laws, rules
or administrative acts issued or that may be
issued pursuant to such legal provisions,
with respect to Grupo Clarín S.A., until the
judge that is finally declared competent to
render a decision on the merits assumes full
jurisdiction of the case and renders a final
decision relating to the injunction.

179

Note 24

Note 25

Extinction of the notes issued by AGEA
On January 28, 2014, AGEA repaid all of the
USD 30.6 million aggregate principal amount
outstanding and interest accrued as of such date
on the Series C Notes issued by that company
under the Global Program.

Pursuant to Article 16, Section V of Chapter I
of Title III of the Restated Rules issued by the
CNV, which governs the delisting due to non-
existence of outstanding securities, upon the
extinction of the Series C Notes, AGEA filed
the required documentation with the CNV.

On August 5, 2014, the CNV served AGEA
with a notice requesting the latter to submit
information to prove the extinction of Series A,
B and D Notes, issued by that company under
the Global Program for the Issuance of Notes.
On August 12, 2014, AGEA submitted the
information requested by the CNV, providing
evidence of the extinction of the notes.

On October 8, 2014, the CNV requested
AGEA to make a filing in connection with
the delisting. On October 16, 2014, AGEA
submitted a Note to the CNV whereby
it requested delisting due to the extinction
of its notes.

On April 4, 2016, the CNV revoked the
authorizations that had been granted to AGEA
for the public offering of its Notes, which
entails the delisting of that company.

Once the authorization for public offering is
cancelled due to the non-existence of
outstanding securities, AGEA shall no longer
be subject to the applicable regulations and
legislation issued by the CNV, and shall
become subject to the jurisdiction of the IGJ,
and, therefore, to that agency’s regulations.

The Company’s corporate reorganization process
On September 28, 2016, at the Company’s
Extraordinary Shareholders Meeting,
the shareholders approved the execution of
a corporate reorganization process to be
implemented in two successive steps: a) first
the merger of Southtel Holdings S.A., Vistone
S.A., Compañía Latinoamericana de Cable S.A.
and CV B Holding S.A. (the “Absorbed
Companies”), through which Grupo Clarín
held a controlling interest in Cablevisión (the
“Merger”), and, b) the subsequent partial
spin-off of the Company to create a new
company under the name Cablevisión Holding
S.A. (the “Spin-off ”, and together with the
Merger, the “Corporate Reorganization”).

The purpose of the Corporate Reorganization
is to enhance efficiency, synergy and streamlining
of the Company’s costs, processes and
resources and to promote the specialization of
the existing asset portfolio of Grupo Clarín
and its subsidiaries. This will allow the
Company to implement differentiated growth
strategies and goals for, on the one hand,
the telecommunications segment, and, on the
other hand, the media business (print, TV,
programming, radio etc.). Thus, each of those
segments will be able to focus on its own
markets, risks, organizational processes and
capital structures.

As a result of the Merger, and since Grupo
Clarín is the direct and indirect holder
of 100% of the capital stock of the absorbed
companies, Grupo Clarín’s capital stock
will not be increased. Therefore, it is not
necessary to establish an exchange ratio. In
addition, the absorbed companies will be
dissolved early without liquidation and Grupo
Clarín will assume, effective as from October 1,
2016 (the “Effective Date of the Merger"),
the activities, receivables, property, rights and
obligations of the above-mentioned companies,
existing on the Effective Date of the Merger,
or any that may exist or arise due to previous
or subsequent acts or activities.

180

As part of the equity subject to spin-off, as
provided under the Merger and Spin-off
Prospectus filed with the CNV and published
in the Financial Information Highway, the
Company will transfer to Cablevisión Holding
S.A. certain equity interests or participations
held by Grupo Clarín, including the direct
and indirect equity interests of Grupo Clarín
in Cablevisión and in GCSA Equity, LLC.
Consequently, once the Corporate
Reorganization has been executed, Cablevisión
Holding S.A. will become owner, directly or
indirectly, of 60% of the capital stock and
votes of Cablevisión and of 100% of the
participations of GCSA Equity, LLC. Grupo
Clarín will retain and continue with all the
activities, operations, assets and liabilities that
are not specifically allocated to Cablevisión
Holding S.A.

The effective date of the Spin-off (the
“Effective Date of the Spin-off ”) will be the
first day of the month following the date
on which the latest of the following registrations
is completed: (i) the registration of the
Corporate Reorganization with the IGJ, or
(ii) the registration of the incorporation
of Cablevisión Holding S.A. with the IGJ.
As of the Effective Date of the Spin-off,
Cablevisión Holding S.A. will begin its activities
on its own account, the accounting effects of
the Spin-off will become effective, and the
operations, risks and benefits described in the
Prospectus published by the Company will be
transferred to Cablevisión Holding S.A.

As a result of the Spin-off of Grupo Clarín, its
equity will be reduced pro rata and part of
the Company’s Class A, Class B and Class C
shares will be cancelled in exchange for a set of
shares of the same class and with substantially
the same rights to be distributed by Cablevisión
Holding S.A. Grupo Clarín will continue
to be subject to the public offering regime
in Argentina and Cablevisión Holding S.A. will
request authorization to be admitted to the
above-mentioned public offering regime
in Argentina.

The new company may also apply to have its
shares listed on and admitted to trading on
one or more local or foreign stock exchanges
and/or markets.

The Corporate Reorganization detailed in
this note is executed in compliance with
applicable regulations of the General
Associations Law and subject to obtaining the
regulatory authorizations and/or intervention
(as applicable) from the CNV, Merval, IGJ and
Ente Nacional de Comunicaciones (National
Communications Agency “ENACOM”).

The terms and conditions of the Corporate
Reorganization were established by the
Directors of the Company, who approved the
Special Parent Company Only Financial
Statement of Grupo Clarín as of June 30, 2016,
the Special Balance Sheet for Merger and Spin-
off as of the same date and the Merger -and
Spin-off Prospectus at the Board of Directors’
Meeting held on August 16, 2016.

As of the date of these financial statements,
the registration of the above-mentioned
corporate reorganization process is pending
before the CNV and the IGJ.

Note 26

Subsequent events
a. The events that took place subsequent to
the closing of this year related to the regulatory
framework applicable to the Company and
its subsidiaries are described in Note 9.

b. On February 7, CMD exercised the call
option for 6.66% of the equity interest in
Interwa S.A. for USD 100,000.

c. Due to the strong reconfiguration of the
commercial printing sector, a global
phenomenon that also affects Argentina, at
the beginning of 2017 AGR had to
restructure its activities.

181

In the morning of January 16, a group of
approximately 40 people, including the
members of said internal commission, broke
into the Pompeya facility, damaging entrance
doors, windows, furniture and security cameras,
and violently removed the employees that
were inside the facility. Many of them are still
at the facility, although the great majority
of the employees have already agreed on their
redundancy and collected their severance
payments for a total amount of approximately
Ps. 200 million as of the date of these financial
statements.

Note 27

Approval of financial statements
Grupo Clarín’s Board of Directors has approved
the consolidated financial statements and
authorized their issue for March 10, 2017.

On January 16, 2017, AGR announced that
it had ceased to operate its printing facility
located in the neighborhood of Pompeya, which
was engaged in the mass commercial printing
business. At that facility, AGR used to print
telephone directories and commercial catalogs,
which are products that have been virtually
discontinued.

Over the last years, AGR has unsuccessfully
attempted to explore new ways of mitigating
the effects of the drop in mass commercial
printing, and preserve, at least partially, the
sustainability of the Pompeya facility.
Unfortunately, the huge challenge entailed by
this change in the industry (now focused on
segmented, personalized and distributed
printing) was not supported by the internal
commission of employee delegates, which
systematically rejected all the proposals made
by that company.

The decision to close that facility was aimed
at preserving the sustainability of the rest of
AGR’s operations and at preventing the
worsening of that company’s financial position,
in order to face the payment of severance
payments to the personnel that used to work
at that facility.

Notwithstanding the close-down of the
Pompeya facility, AGR intends to continue
operating at whatever scale the market may
demand and, consequently, the matter was
considered in these financial statements based
on that premise.

Signed for identification purposes
with the report dated March 10, 2017

See our report dated March 10, 2017
Price Waterhouse & Co. S.R.L.
C.P.C.E.C.A.B.A. VOL. 1 - FOL. 17

Carlos Alberto Pedro Di Candia
Chairman of the Supervisory Committee

Dr. Carlos A. Pace (Partner)
Certified Public Accountant (UBA)
C.P.C.E.C.A.B.A. VOL. 150 - FOL. 106

Alejandro A. Urricelqui
Vice Chairman and acting Chairman

182

SUPPLEMENTARY
FINANCIAL
INFORMATION

183

1. Company activities

Grupo Clarín is the most prominent and
diversified media group in Argentina and one
of the most important in the Spanish-speaking
world. It has presence in the printed media,
radio, broadcast and cable television, audiovisual
content production, the printing industry and
Internet. Its leadership in the different media is a
competitive advantage that enables Grupo Clarín
to generate significant synergies and expand
into new markets. Its activities are grouped into
four main segments: Cable Television, Internet
Access and Telephony Services, Printing and
publishing, Broadcasting and Programming,
and Digital content and other.

Among the main activities carried out during
the year, the following were the most significant:

In the Printing and Publishing segment, during
the year, the Company continued to publish its
traditional newspapers and magazines, focusing
on strengthening its editorial offering through
the launch of new collectible and optional
products. In June, La Voz del Interior relaunched
its printed version with an innovative format,
which is more reader-friendly. In addition,
at the end of 2015, the Company launched
Muy.com.ar. Its contents and editorial approach
are targeted at popular audiences. In this
segment, since the connection with the readers
is better in digital format than in printed format,
the Company decided to discontinue the
printed format and devote its efforts to targeting
an audience that will increasingly turn to digital
mobile devices, which will be faster and more
affordable.

In the Broadcasting and Programming Segment,
El Trece maintained the highest audience share.
This leading position is mostly attributable to
the good performance of its programming grid
both during the Prime Time, and at other times.
During prime time, the most outstanding

features were the return of Showmatch, as well
as fiction shows such as “Los ricos no piden
permiso” and “Silencios de Familia” and the
newscast Telenoche. Noticiero Trece, El Diario
de Mariana, Este es el Show and Esposa
Jóven delivered good results in the afternoon.
The show “Periodismo para Todos”, the
lunches and dinners hosted by Mirtha Legrand,
the general interest show “MDQ Para todo
el mundo” and the return to El Trece of the
Argentine soccer first division tournament
matches contributed to a good performance
during weekends.

In the Cable Television, Internet Access and
Telephony Services segment, the Company
focused on subscriber loyalty initiatives, as
well as on boosting penetration of its premium
services, such as, Cablevisión HD, Pay Per View
(PPV), Video On Demand (VoD) and Digital
Video Recording (DVR) and expanding
its broadband Internet access subscriber base.
Progress was also made in the optimization
of the reach of digital and premium services to
cities and towns in the provinces.

In addition, in the Cable Television, Internet
Access and Telephony Services segment, on
September 10, 2015, the Board of Directors of
Cablevisión approved the assignment of the
rights and obligations held by Grupo Clarín
under an offer it had submitted to NII
Mercosur Telecom, S.L.U. and NII Mercosur
Móviles, S.L.U. (hereinafter, the “Sellers”) for
the acquisition of 49% of the capital stock
of NEXTEL COMMUNICATIONS
ARGENTINA S.R.L. and an option to acquire,
together with the subsidiary of Cablevisión,
Televisión Dirigida S.A., subject to certain
conditions -among them, the regulatory
approvals-, 51% of the remaining capital stock.
The price of the transaction was USD 165
million (out of this amount, USD 80 million
accounts for 49% and USD 85 million accounts
for 51%) plus the right to collect an additional

Supplementary
Financial
Information

As of December 31, 2016

184

amount of up to USD 13 million subject to the
fulfillment of certain conditions. The offer
submitted by Grupo Clarín was subject to the
acceptance of the Sellers. On September 11,
2015, the Sellers accepted the offer submitted
by Grupo Clarín and, on the same date,
the Sellers accepted the assignment of the rights
under such offer in favor of Cablevisión, offering
Cablevisión the acquisition of 49% of the capital
stock of NEXTEL and the option to acquire
the remaining 51%. In order to guarantee the
rights and obligations under the offer, the capital
stock owned by NII Mercosur Móviles, S.L.U
was pledged (subject to registration with the
Public Registry of Commerce). The transaction
was completed on September 14, 2015 upon
payment by Cablevisión and its subsidiary of an
aggregate USD 159 million. The companies
undertook to create a guarantee fund with the
USD 6 million balance, to cover any potential
liabilities of NEXTEL (this fund was set up
on October 7, 2015). In addition, upon the
fulfillment of certain conditions precedent, on
October 1, 2015, Cablevisión paid to the Sellers
the additional amount of USD 12.73 million.
On June 3, 2016, the assignment of 49%
of the capital stock of NEXTEL in favor of
Cablevisión was registered with the IGJ. Under
the terms of the offer, NEXTEL will continue
to be controlled and operated by the Sellers
until the option to acquire the remaining 51%
of the capital stock has been exercised. On
January 27, 2016, Cablevisión and its subsidiary
Televisión Dirigida S.A. decided to exercise
the option to acquire the remaining 51% of the
capital stock and votes of NEXTEL, and,
consequently, Cablevisión became the holder
of 51.4% of the capital stock and votes of
NEXTEL and Televisión Dirigida S.A. became
the holder of the remaining 48.6%. To such
effect, on the same date, NEXTEL’s management
took notice of the release of the pledge
that had been set up to guarantee the rights and
obligations under the offer. On July 26, 2016,
the IGJ registered the assignment of the

remaining 51% of the capital stock. Through
ENACOM Resolution No. 280/2016, served on
Cablevisión on March 8, 2016, the Enforcement
Authority authorized the changes in the equity
interests of NEXTEL in favor of Cablevisión S.A.
Therefore, these Financial Statements include
the operations of NEXTEL.

On June 30, 2016, the controlled company
Televisión Dirigida S.A. performed the transfer
of: (i) 392,774,929 membership interests with
nominal value of Ps. 1 each and entitled to
one vote per membership interest, representing
48.5% of the capital stock and votes of
NEXTEL, in favor of Cablevisión; and (ii)
1,000,000 membership interests with nominal
value of Ps. 1 each and entitled to one vote
per membership interest, representing 0.1% of
the capital stock and votes of NEXTEL, in
favor of PEM S.A. As a consequence of the
above-mentioned assignments of membership
interests, Cablevisión holds a 99.9% interest in
the capital stock and votes of NEXTEL, and
the remaining 0.1% is held by PEM S.A. These
assignments have not yet been registered with
the IGJ.

In June 2016, Cablevisión, together with its
subsidiary NEXTEL, acquired 100% (97%
NEXTEL and 3% Cablevisión) of the capital
stock of Fibercomm S.A. and Gridley
Investments S.A. both owners of 100% of the
capital stock of Trixco S.A., holder of licenses
for the use of the radioelectric spectrum in
the 900 Mhz bands. NEXTEL acquired 100%
of the capital stock of WX Telecommunications
LLC and Greenmax Telecommunications LLC,
which are the controlling companies of Skyonline
Argentina S.A., Netizen S.A., Infotel S.A. and
Callbi S.A., among the most relevant. The
latter render wireless telecommunications services
and hold licenses for the use of the radioelectric
spectrum in the 2.5 Ghz bands. The aggregate
price for those transactions was USD 138.2
million, equivalent to Ps. 2,036 million.

185

In addition, in June 2016, Cablevisión issued
Notes (the “Notes”) subject to the public offering
regime authorized by the CNV for USD 500
million, due 2021 at a fixed interest rate of 6.5%.
The Notes aroused so much interest among
investors that they were oversubscribed more
than 6 times. Eighty per cent of the proceeds was
used to refinance liabilities (lowering the average
interest rate) and the remaining 20% is being
used by the company for strategic investments,
both in network quality and reach.

In November 2016, Cablevisión launched a
new online content service, Flow. The distribution
of contents is based on IP infrastructure and
QAM Digital TV with the possibility of using
new functionalities such as linear streaming,
Start Over, Reverse EPG, Cloud DVR and
access to VOD contents, among others. These
functionalities are supported from a new
user interface supplemented with advanced search
and recommendation systems available
in any type of device.

On September 28, the shareholders of Grupo
Clarín decided to implement the merger

- spin-off process proposed by the Board of
Directors during the month of August,
mentioned in Note 25 to the consolidated
financial statements. First, certain subsidiaries of
Grupo Clarín will be merged into the Company,
and the Company will subsequently spin off a
portion of its equity to create a new company
under the name Cablevisión Holding S.A.
(CVH). Grupo Clarín will retain and continue
with all the activities, operations, assets and
liabilities that are not specifically allocated
to CVH. The effective date of the Spin-off will
be the first day of the month following the
date on which the latest of the following
registrations is completed: (i) the registration
of the Corporate Reorganization with the IGJ,
or (ii) the registration of the incorporation of
CVH with the IGJ.

Grupo Clarín will continue to be subject to
the public offering regime in Argentina and
CVH will request authorization to be admitted
to the above-mentioned public offering regime
in Argentina. The new company may also apply
to have its shares listed on and admitted to
trading on one or more local or foreign stock
exchanges and/or markets.

186

2. Consolidated financial structure

Note: the amounts are rounded and stated in
thousands of Argentine Pesos. The figures under
total amounts may not represent the exact
arithmetic sum of the other figures in the table.
Pursuant to CNV regulations, the following
table shows the balances and results for the
period, on a comparative basis with the prior
periods, prepared under IFRS.

Non-current assets

Current assets

Assets held for sale

Total Assets

Equity of the Parent Company

Equity of Non-Controlling Interests

Total Equity

Non-current liabilities

Current liabilities

Liabilities Held for Distribution

to Shareholders

Total Liabilities

December 31,

2016

2015

2014

2013

2012

2,459,028

5,726,538

28,082,221

36,267,788

9,626,387

4,416,373

14,042,761

845,833

4,117,531

17,261,662

22,225,027

16,246,453

8,454,551

24,701,004

7,232,951

3,175,289

10,408,240

4,718,094

9,574,671

10,801,158

6,366,440

163,897

17,331,495

5,483,022

2,282,464

7,765,487

3,520,126

6,045,882

9,512,026

4,872,758

8,303,639

3,699,980

14,384,783

12,003,619

4,729,908

1,748,886

6,478,794

3,451,464

4,454,526

4,090,030

1,374,569

5,464,599

3,378,694

3,160,327

14,292,764

9,566,008

7,905,989

6,539,020

Total Equity and Liabilities

36,267,788

24,701,004

17,331,495

14,384,783

12,003,619

187

3. Consolidated comprehensive income structure

Operating income/loss from
continuing operations (1)
Financial Results

Equity in Earnings from Affiliates

and Subsidiaries

Other Income and Expenses, net

Income/loss from continuing operations

December 31,

2016

2015

2014

2013

2012

782,222

(398,176)

48,725

55,466

933,900

(130,968)

3,594,695

(1,730,425)

2,149,638

(1,473,831)

1,900,321

(916,154)

61,299

98,222

71,895

(638)

99,483

69,534

13,683

639

before income tax and tax on assets

488,238

962,453

1,935,527

844,825

998,490

Income tax and tax on assets

(264,158)

(354,575)

(590,065)

(97,924)

(524,876)

Income for the year from

continuing operations

224,080

607,878

1,345,462

746,900

473,614

Net Income from Discontinued Operations

Net Income for the Year

3,955,531

4,179,611

2,308,032

2,915,910

1,345,462

53,765

800,666

498,717

972,331

Other Comprehensive Income for the Year

416,131

165,912

359,868

312,065

180,169

Total Comprehensive Income for the Year

4,595,742

3,081,822

1,705,330

1,112,731

1,152,500

(1) Defined as net sales less cost of sales and expenses.

188

4. Cash Flow Structure

December 31,

2016

2015

2014

2013

2012

Cash provided by (used in)

Operating Activities

Cash provided by (used in)

Investment Activities

Cash provided by (used in)

Financing Activities

Total Cash provided (used) for the Year

Financial Results generated

by Cash And Cash Equivalents

9,503,181

6,605,500

4,455,564

2,608,347

2,291,944

(11,418,638)

(5,607,261)

(2,900,589)

(2,038,304)

(819,887)

(488,258)

(2,403,715)

(885,467)

112,772

(1,624,895)

(69,921)

(412,863)

157,180

(1,110,017)

362,040

995,616

847,812

164,436

188,547

77,116

Total Changes in Cash

(1,408,099)

960,585

94,515

345,727

439,156

189

5. Statistical data

Cable TV subscribers (1) (5)
Cable TV homes passed (2) (5)
Cable TV churn ratio
Internet access subscribers (1)
Newspaper circulation (3)
Canal 13 audience share
Prime Time (4)
Total Time (4)

December 31,

2016

2015

2014

2013

2012

3,527,674

7,832,915

13.8

2,182,598

237,116

34.8

32.0

3,532,577

7,795,404

12.6

2,025,860

261,699

37.3

30.4

3,491,068

7,514,104

13.6

1,837,672

276,466

33.3

26.7

3,492,480

7,509,525

12.7

1,711,587

296,704

35.4

28.0

3,404,698

7,455,898

12.8

1,504,380

311,699

35.9

29.4

(1) Includes companies controlled, directly and
indirectly, by Cablevisión (Argentina, Uruguay and
Paraguay).
(2) Contemplates the elimination of the overlapping
of networks between Cablevisión and subsidiaries
(including Multicanal and Teledigital).
(3) Average quantity of newspapers per day (Diario
Clarín and Olé), pursuant to the Instituto Verificador
de Circulaciones (this figure represents sales in
Argentina and abroad).
(4) Share of prime time audience of broadcast
television stations in the Metropolitan Area of Buenos
Aires, as reported by IBOPE. Prime time is defined
as 8:00 PM to 12:00 AM, Monday through Friday.
Total time is defined as 12:00 PM to 12:00 AM,
Monday through Sunday.
(5) As of December 31, 2016, 2015, 2014 and 2013
it does not include the data corresponding to
Cablevisión’s subsidiaries in Paraguay.

190

6. Ratios

Liquidity (current assets / current liabilities)

Solvency (equity / total liabilities)

Capital assets

(non-current assets / total assets)

Return on equity (net income for the year /

average shareholders’ equity)

December 31,

2016

1.39

0.63

0.07

0.34

2015

0.88

0.73

0.66

0.32

2014

1.05

0.81

0.62

0.19

2013

1.09

0.82

0.66

0.13

2012

1.17

0.84

0.69

0.19

7. Outlook

The Company remains committed to informing
with independence, to reaching all sectors
of society and to supporting the quality and
credibility values of its media.

Grupo Clarín’s corporate strategy is aimed at
maintaining and consolidating its presence
in the production of contents, strengthening its
presence in the traditional media, with a
growing focus on digital media. The Company
seeks to leverage its positioning and access to
opportunities for growth in the Argentine
and regional industry to strengthen and develop
its current businesses.

The Company will keep focusing on the core
processes that allow for a sustainable and
efficient growth from different perspectives:
financial structure, management control,
business strategy, human resources, innovation
and corporate social responsibility.

Signed for identification purposes
with the report dated March 10, 2017

See our report dated March 10, 2017
Price Waterhouse & Co. S.R.L.
C.P.C.E.C.A.B.A. VOL. 1 - FOL. 17

Carlos Alberto Pedro Di Candia
Chairman of the Supervisory Committee

Dr. Carlos A. Pace (Partner)
Certified Public Accountant (UBA)
C.P.C.E.C.A.B.A. VOL. 150 - FOL. 106

Alejandro A. Urricelqui
Vice Chairman and acting Chairman

191

Independent
Auditor’s Report

Free translation from
the original
prepared in Spanish

To the Shareholders, President

and Directors of Grupo Clarín S.A.

Legal domicile: Piedras 1743

Autonomous City of Buenos Aires

CUIT No 30-70700173-5

Report on the Financial Statements
We have audited the attached consolidated
financial statements of Grupo Clarín S.A. and
its controlled subsidiaries (the “Company”)
which comprise the consolidated balance sheet
at December 31, 2016, the consolidated
statements of comprehensive income, of changes
in equity and of cash flows for the year then
ended and a summary of significant accounting
policies and other explanatory information.

The balances and other information
corresponding to the fiscal year 2015 are an
integral part of the audited 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 reasonable preparation and
presentation of these consolidated financial
statements in accordance with International
Financial Reporting Standards (IFRS) adopted
by the Argentine Federation of Professional
Councils in Economic Sciences (FACPCE, for
its Spanish acronym) as professional accounting
standards and incorporated by the Argentine
Securities Commission (CNV, for its Spanish
acronym) into its regulations, as adopted by
the International Accounting Standards Board
(IASB). Further, the Board of Directors is
responsible for the existence of adequate internal
control to prepare consolidated financial
statements free from material misstatements
due to errors or irregularities.

192

Auditor’s responsibility
Our responsibility is to express an opinion on
the accompanying consolidated financial
statements based on our audit. We conducted
our audit in accordance with International
Standards on Auditing (ISAs), as adopted in
Argentina by the FACPCE through Technical
Resolutions No. 32 and its respective Adoption
Communications. Those standards require
that we comply with ethical requirements and
plan and perform the audit to obtain reasonable
assurance whether the consolidated financial
statements are free from material misstatements.

An audit involves performing procedures to
obtain audit evidence about the amounts and
other information disclosed in the consolidated
financial statements. The procedures selected
depend on the auditor’s judgment, including the
assessment of the risks of material misstatement
in the consolidated financial statements due to
fraud or error. In making those risk assessments,
the auditor must consider internal control
relevant to the Company’s preparation
and reasonable presentation of the consolidated
financial statements in order to design
audit procedures that are appropriate in the
circumstances, but not for the purpose
of expressing an opinion on the effectiveness
of the Company’s internal control. An audit
also includes evaluating the appropriateness
of accounting policies used and the
reasonableness of significant estimates made
by the Company’s management, as well
as evaluating the overall presentation of the
consolidated financial statements.

We believe that the audit evidence we have
obtained is sufficient and appropriate to provide
a basis for our audit opinion.

Opinion
In our opinion, the consolidated financial
statements mentioned in the first paragraph of
this report present fairly, in all material respects,
the consolidated financial position of Grupo
Clarín S.A. and its subsidiaries as of December
31, 2016, its consolidated comprehensive
income and consolidated cash flows for the year
then ended, in accordance with International
Financial Reporting Standards.

Emphasis of Matter paragraph
Without qualifying our opinion, we would like
to emphasize the information contained in
Note 8.1.a., to the consolidated financial
statements, which describes the situation related
to the resolution issued by the regulator to
calculate the monthly fee payable by the users
of cable television services, whose decisions
cannot be foreseen to date.

Report on compliance with current regulations
In accordance with current regulations in
respect to Grupo Clarín S.A., we report that:

a) the consolidated financial statements of
Grupo Clarín S.A. have been transcribed
to the “Inventory and Balance Sheet” book and
comply with the General Associations Law
and pertinent resolutions of the Argentine
Securities Commission, as regards those matters
within our competence;

b) the parent company only financial statements
of Grupo Clarín S.A. arise from accounting
records kept in all formal respects in conformity
with legal regulations which maintain the
security and integrity conditions on the basis of
which they were authorized by the Argentine
Securities Commission;

193

c) we have read the supplementary financial
information, on which, as regards those matters
that are within our competence, we have no
observations to make;

d) at December 31, 2016 the debt accrued
by Grupo Clarín S.A. in favor of the Argentine
Integrated Social Security System according
to the Company’s accounting records and
calculation amounted to $3,999,588.68, none
of which was claimable at that date;

e) in accordance with the requirements of
Article 21°, Subsection b), Chapter III, Section
VI, Title II of the regulations of the Argentine
Securities Commission, we report that the
total fees for auditing and related services billed
to the Company during the fiscal year ended
December 31, 2016 represent:

e.1) 73% on the total fees for services invoiced
to the Company for all concepts in that
fiscal year;
e.2) 8% on the total fees for audit and related
services invoiced to the Company, its
parent companies, subsidiaries and affiliates
in that fiscal year;
e.3) 6% on the total fees for services invoiced
to the Company, its parent companies,
subsidiaries and affiliates for all concepts in
that fiscal year.

f ) we have applied the procedures on prevention
of asset laundering and terrorism funding set
forth in the relevant professional rules issued by
the Professional Council for Economic Sciences
of the Autonomous City of Buenos Aires.

Autonomous City of Buenos Aires,
March 10, 2017

Price Waterhouse & Co. S.R.L.

by Carlos A. Pace (Partner)

194

PARENT
COMPANY ONLY
FINANCIAL
STATEMENTS

195

Parent Company only
Statement of
Comprehensive
Income

For the years ended
December 31, 2016 and 2015
In Argentine Pesos (Ps.)

Notes

December 31, 2016

December 31, 2015

Equity in Earnings from Affiliates and Subsidiaries

Management fees
Administrative Expenses (1)
Other Income and Expenses, net

Financial Costs

Other Financial Results, net

Financial Results

Income before Income Tax and Tax on Assets

Income Tax and Tax on Assets

Net Income from Continuing Operations

4.3

5.1

5.2

5.3

2,061,762,606

181,950,000

(283,211,965)

8,231,363

(95,141,953)

4,741,348

(90,400,605)

1,878,331,399

(4,715,402)

1,873,615,997

1,858,636,177

162,560,000

(198,684,409)

(24,054,643)

(87,424,976)

44,656,460

(42,768,516)

1,755,688,609

(2,070,642)

1,753,617,967

Net Income from Discontinued Operations

4.12

656,425,835

131,311,402

Net Income for the Year

2,530,041,832

1,884,929,369

Other Comprehensive Income

Items which may be reclassified to net income

Variation in Translation Differences of Foreign

Operations from Continuing Operations

Variation in Translation Differences of Foreign

Operations from Discontinued Operations

Other Comprehensive Income for the Year

135,731,445

108,676,630

82,894,462

218,625,907

9,766,381

118,443,011

Total Comprehensive Income for the Year

2,748,667,739

2,003,372,380

(1) Includes depreciation of property, plant and equipment
and amortization of intangible assets in the amount of
Ps. 1,410,809 and Ps. 821,139 for the years ended December 31,
2016 and 2015, respectively.

The notes are an integral part of these parent company only
financial statements.

Signed for identification purposes
with the report dated March 10, 2017

See our report dated March 10, 2017
Price Waterhouse & Co. S.R.L.
C.P.C.E.C.A.B.A. VOL. 1 - FOL. 17

Carlos Alberto Pedro Di Candia
Chairman of the Supervisory Committee

Dr. Carlos A. Pace (Partner)
Certified Public Accountant (UBA)
C.P.C.E.C.A.B.A. VOL. 150 - FOL. 106

Alejandro A. Urricelqui
Vice Chairman and acting Chairman

196

Parent Company only
Balance Sheet

As of December 31, 2016,
and 2015
In Argentine Pesos (Ps.)

Assets

Non-Current Assets

Property, Plant and Equipment

Intangible Assets

Deferred Tax Assets

Investment in Unconsolidated Affiliates

Other Receivables

Total Non-Current Assets

Current Assets

Other Receivables

Other Investments

Cash and Banks

Total Current Assets

Notes

December 31, 2016

December 31, 2015

4.1

4.2

4.3

4.4

4.5

4.6

6,364,387

41,564

21,723,720

3,311,592,293

30,000

3,339,751,964

157,656,503

84,222,441

34,438,063

276,317,007

1,258,776

107,333

31,599,563

7,613,659,094

30,000

7,646,654,766

154,514,369

19,848,419

12,193,114

186,555,902

Assets Held for Distribution to Shareholders

4.12

6,816,875,217

Total Assets

10,432,944,188

7,833,210,668

Equity (as per the corresponding statement)

Shareholders’ Contributions

Other Items

Accumulated Income

Total Equity

Liabilities

Non-Current Liabilities

Other Liabilities

Debt

Total Non-Current Liabilities

Current Liabilities

Debt

Taxes Payable

Other Liabilities

Trade Payables and Other

Total Current Liabilities

2,010,638,503

755,638,189

6,860,110,364

9,626,387,056

2,010,638,503

592,243,638

4,630,068,532

7,232,950,673

367,813,013

3,475,247

9,056,387

818,127

74,257,310

87,607,071

228,553,387

287,999,976

11,239,631

25,837,958

46,629,043

371,706,608

4.3

4.7

4.8

4.9

Liabilities Held for Distribution to Shareholders

4.12

351,137,048

Total Liabilities

806,557,132

600,259,995

Total Equity and Liabilities

10,432,944,188

7,833,210,668

The notes are an integral part of these parent company only
financial statements.

Signed for identification purposes
with the report dated March 10, 2017

See our report dated March 10, 2017
Price Waterhouse & Co. S.R.L.
C.P.C.E.C.A.B.A. VOL. 1 - FOL. 17

Carlos Alberto Pedro Di Candia
Chairman of the Supervisory Committee

Dr. Carlos A. Pace (Partner)
Certified Public Accountant (UBA)
C.P.C.E.C.A.B.A. VOL. 150 - FOL. 106

Alejandro A. Urricelqui
Vice Chairman and acting Chairman

197

Parent Company only
Statement of
Changes in Equity

For the years ended
December 31, 2016 and 2015
In Argentine Pesos (Ps.)

Balances as of January 1st 2015

Set-up of reserves (Note 7.a)

Dividend Distribution (Note 7.a)

Changes in Reserves for Acquisition of Investments

Net Income for the Year

Other Comprehensive Income:

Variation in Translation Differences of Foreign Operations

Adjustment on

Capital Stock

Paid-in Capital

287,418,584

309,885,253

1,413,334,666

Balances as of December 31, 2015

287,418,584

309,885,253

1,413,334,666

Set-up of reserves (Note 7.a)

Dividend Distribution (Note 7.a)

Changes in Reserves for Acquisition of Investments

Net Income for the Year

Other Comprehensive Income:

Variation in Translation Differences of Foreign Operations

Balances as of December 31, 2016

287,418,584

309,885,253

1,413,334,666

(1) Broken down as follows: (i) Optional reserve for
future dividends of Ps. 1,884,929,369; (ii) Judicial
reserve for future dividend distribution of Ps. 387,028,756,
(iii) Optional reserve for illiquidity of results of
Ps. 694,371,899, and (iv) Optional reserve to provide financial
aid to subsidiaries and in connection with the Audiovisual
Communication Services Law of Ps. 1,244,277,741.

The notes are an integral part of these parent company
only financial statements.

(

198

Subtotal

Foreign Operations

Other Reserves

Legal Reserve

2,010,638,503

477,454,394

(209,686)

119,460,767

Shareholders’

Contributions

Translation of

2,010,638,503

118,443,011

595,897,405

218,625,907

Other Items

Accumulated Income

(1) Optional
reserves

2,071,576,709

554,101,687

Retained Earnings

Total Equity

804,101,687

(554,101,687)

(250,000,000)

1,884,929,369

(300,000,000)

2,530,041,832

5,483,022,374

(250,000,000)

(3,444,081)

1,884,929,369

118,443,011

7,232,950,673

(300,000,000)

(55,231,356)

2,530,041,832

218,625,907

(3,444,081)

(55,231,356)

(3,653,767)

119,460,767

2,625,678,396

1,884,929,369

1,584,929,369

(1,584,929,369)

2,010,638,503

814,523,312

(58,885,123)

119,460,767

4,210,607,765

2,530,041,832

9,626,387,056

Signed for identification purposes
with the report dated March 10, 2017

See our report dated March 10, 2017
Price Waterhouse & Co. S.R.L.
C.P.C.E.C.A.B.A. VOL. 1 - FOL. 17

Carlos Alberto Pedro Di Candia
Chairman of the Supervisory Committee

Dr. Carlos A. Pace (Partner)
Certified Public Accountant (UBA)
C.P.C.E.C.A.B.A. VOL. 150 - FOL. 106

Alejandro A. Urricelqui
Vice Chairman and acting Chairman

199

Parent Company only
Statements
of Cash Flows

For the years ended
December 31, 2016 and 2015
In Argentine Pesos (Ps.)

Cash provided by Operating Activities

Net Income for the Year

Income Tax and Tax on Assets

Accrued Interest, net

Adjustments to reconcile net income for the year

to cash used in operating activities:

- Depreciation of Property, Plant and Equipment and

Amortization of Intangible Assets

- Financial Income, except interest

- Equity in Earnings from Affiliates and Subsidiaries

- Net Income from Discontinued Operations

- Other Income and Expenses

Changes in Assets and Liabilities:

- Other Receivables

- Trade Payables and Other

- Taxes Payable

- Other Liabilities

Income Tax and Tax on Assets Payments

December 31, 2016

December 31, 2015

2,530,041,832

1,884,929,369

4,715,402

16,593,740

2,070,642

1,687,928

1,410,809

68,755,865

(2,061,762,606)

(656,425,835)

115,853

(60,609,143)

24,868,118

(6,198,800)

(24,712,147)

(1,608,744)

821,139

36,783,713

(1,858,636,177)

(131,311,402)

(46,675,753)

12,421,986

11,536,970

736,562

(2,414,702)

Net Cash Flows used in Operating Activities

(164,815,656)

(88,049,725)

Cash provided by Investment Activities

Dividends collected

Capital contributions in subsidiaries

Payment for Acquisition of Investments

Acquisition of Property, Plant and Equipment, net

Loans and interest collected

Loans granted

Transactions with Securities, Bonds and

Other Financial Instruments, Net

Collection of Certificates of Deposit

500,373,342

(775,789,200)

(10,000)

(6,450,651)

1,201,377

107,499

343,407,498

(288,595,850)

(567,690)

24,290,152

(22,300,000)

32,201,214

31,610,543

Net Cash Flows (used in) / provided by Investing Activities

(280,567,633)

120,045,867

See our report dated March 10, 2017
Price Waterhouse & Co. S.R.L.
C.P.C.E.C.A.B.A. VOL. 1 - FOL. 17

Dr. Carlos A. Pace (Partner)
Certified Public Accountant (UBA)
C.P.C.E.C.A.B.A. VOL. 150 - FOL. 106

200

Cash provided by Financing Activities

- Loans Obtained

- Payment of Debts

- Payment of Interest

- Payment of Dividends

Net Cash Flows provided by /(used in) Financing Activities

Financing Results generated by Cash and Cash Equivalents

Net Increase / (Decrease) in cash flow

Cash from Mergers

Cash and Cash Equivalents at the Beginning of the Year

December 31, 2016

December 31, 2015

741,375,247

(600,626)

(300,000,000)

440,774,621

9,398,525

4,789,857

81,829,114

208,075,000

(7,500,000)

(231,387)

(250,000,000)

(49,656,387)

14,725,546

(2,934,699)

(Note 2.15)

32,041,533

34,976,232

Cash and Cash Equivalents at the Closing of the Year

(Note 2.15)

118,660,504

32,041,533

The notes are an integral part of these parent company
only financial statements.

Signed for identification purposes
with the report dated March 10, 2017

See our report dated March 10, 2017
Price Waterhouse & Co. S.R.L.
C.P.C.E.C.A.B.A. VOL. 1 - FOL. 17

Carlos Alberto Pedro Di Candia
Chairman of the Supervisory Committee

Dr. Carlos A. Pace (Partner)
Certified Public Accountant (UBA)
C.P.C.E.C.A.B.A. VOL. 150 - FOL. 106

Alejandro A. Urricelqui
Vice Chairman and acting Chairman

201

Notes to the Parent
Company only
Financial
Statements

For the year ended
December 31, 2016
Presented on a comparative basis
In Argentine Pesos (Ps.)

202

Note 1

The operations of its subsidiaries include cable
television, Internet access and telephony services,
newspaper and other printing, publishing and
advertising activities, broadcast television, radio
operations and television content production,
on-line and new media services, and other media
related activities. A substantial portion of its
revenues is generated in Argentina.

Note 20 to these Parent Company Only
Financial Statements describes the current
merger-spin-off process of the Company and
certain subsidiaries.

Note 2

Basis for the Preparation and Presentation of the

Parent Company only Financial Statements

2.1 Basis for the preparation
Pursuant to General Resolution No. 562 issued
on December 29, 2009, entitled “Adoption
of International Financial Reporting Standards”
and General Resolution No. 576/10, the
CNV provided for the application of Technical
Resolutions (“TR”) No. 26 and 29 issued
by the Argentine Federation of Professional
Councils of Economic Sciences (FACPCE, for
its Spanish acronym). Since the Company is
subject to the public offering regime governed
by Law No. 26,831, it is required to apply such
standards as from the year beginning January
1st, 2012. The FACPCE issues Adoption
Communications in order to implement IASB
resolutions in Argentina.

Technical Resolution No. 43 “Amendment of
Technical Resolution No. 26”, effective for
fiscal years beginning on or after January 1,
2016, sets out that parent company only
financial statements shall be prepared fully in
accordance with IFRS without applying any
changes, i.e. complying with the full contents
of those standards as issued by the IASB and
with the mandatory or guiding provisions

established by IASB in each document. That
Resolution provides that for its disclosure
in parent company only financial statements
of entities that are required to present
consolidated financial statements, the
investments in subsidiaries, joint ventures and
associates shall be valued under the equity
method as set out by IFRS.

In preparing these parent company only
financial statements for the year ended
December 31, 2016, presented on a
comparative basis, the Company has followed
the guidelines provided by TR 43, and,
therefore, these financial statements have been
prepared in accordance with IFRS. Certain
additional matters were included as required
by the Argentine Business Associations Law
and/or CNV regulations, including the
supplementary information provided under
the last paragraph of Section 1, Chapter III,
Title IV of General Resolution No. 622/13.
That information is included in the Notes to
these parent company only financial statements,
as provided under IFRS and CNV rules.

The interim condensed parent company
only financial statements have been prepared
based on historical cost, except for the
measurement at fair value of certain
non-current assets and financial instruments.
In general, the historical cost is based on
the fair value of the consideration granted in
exchange for the assets.

IAS 29 “Financial Reporting in
Hyperinflationary Economies” (“IAS 29”)
requires that the financial statements of an entity
that reports in the currency of a hyperinflationary
economy be stated in terms of the measuring
unit current at the balance sheet closing date of
the reporting period and details a series of
factors that may indicate that an economy is
hyperinflationary. Based on the guidelines of IAS
29, there is not enough evidence to conclude
that Argentina was a hyperinflationary economy
in 2016 and, therefore, the Company did not
apply the restatement criteria to the financial
information for the years reported as established
under IAS 29.

The attached information, approved by the Board
of Directors at the meeting held on March 10,
2017, is presented in Argentine Pesos (Ps.),
the Argentine legal tender, and arises from
accounting records kept by Grupo Clarín S.A.

2.2 Standards and Interpretations issued but not

adopted to date
The Company has not adopted IFRS or
revisions of IFRS issued as per the detail below,
since their application is not required for the
year ended December 31, 2016:

- IFRS 15 "Revenue from contracts with
customers": issued in May 2014 and applicable
to fiscal years beginning on or after January 1,
2018. This standard specifies how and when
revenue will be recognized, as well as the
additional information to be disclosed by the
Company in the financial statements. It
provides a single, principles based five-step
model to be applied to all contracts with
customers.

- IFRS 16 "Leases": issued in January 2016
and applicable to fiscal years beginning on or
after January 1, 2019. It sets out the principles
for the recognition, measurement, presentation
and disclosure of leases.

As of the date of these financial statements,
the Company cannot estimate its quantitative
impact because it is analyzing the corresponding
accounting effects.

2.3. Standards and Interpretations issued and

adopted to date
As of the date of these consolidated financial
statements, no new regulations have been
issued that may be applicable to the Company
for this year.

2.4 Equity Interests
The Company records the interest in its
subsidiaries and associates using the equity
method, as established by TR 26.

A subsidiary is an entity over which the
Company exercises control. Control is presumed
to exist when the Company has a right to
variable returns from its interest in a subsidiary
and has the ability to affect those returns
through its power over the subsidiary. This
power is presumed to exist when evidenced by
the votes, be it that the Company has the
majority of voting rights or potential rights
currently exercised.

An associate is an entity over which the
Company has significant influence, without
exerting control, generally accompanied by
equity holdings of between 20% and 50% of
voting rights.

The subsidiaries’ and associates’ net income
and the assets and liabilities are disclosed in the
financial statements using the equity method,
except when the investment is classified as held
for sale, in which case it is accounted for under
IFRS 5 “Non-Current Assets Held for Sale
and Discontinued Operations”. Under the equity
method, the investment in a subsidiary or
associate is to be initially recorded at cost and
the book value will be increased or decreased to
recognize the investor’s share in the comprehensive
income for the year or in other comprehensive
income obtained by the subsidiary or associate,
after the acquisition date. The distributions
received from the subsidiary or associate will
reduce the book value of the investment.

The losses incurred by an associate in excess
of the Company’s interest in such company are
recognized to the extent the Company has
undertaken any legal or implicit obligation or
has made payments on behalf of the associate.

Any excess of the acquisition cost over the
Company’s share in the net fair value of
the subsidiary’s or associate’s identifiable assets,
liabilities and contingent liabilities measured
at the acquisition date is recognized as goodwill.
Goodwill is included in the book value of the
investment and tested for impairment as part
of the investment. Any excess of the Company’s
share in the net fair value of the identifiable
assets, liabilities and contingent liabilities over
the acquisition cost, after its measurement
at fair value, is immediately recognized in net
income.

Unrealized gains or losses on transactions
between the Company and its subsidiaries and

203

the associates are eliminated considering the
Company’s interest in those companies.

Adjustments were made, where necessary, to
the subsidiaries’ and associates’ financial
statements so that their accounting policies are
in line with those used by the Company.

2.4.1 Changes in the Company’s Interests in Existing

Subsidiaries
The changes in the Company’s interests in
subsidiaries that do not generate a loss of
control are recorded under equity. The book
value of the Company’s interests is adjusted
to reflect the changes in the relative interest in
the subsidiary. Any difference between the
amount for which an additional investment is
recorded and the fair value of the consideration
paid or received is directly recognized in equity.

In case of loss of control and significant
influence, any residual interest in the issuing
company is measured at its fair value at such
date, allocating the change in the recorded
value with an impact on net income. The
fair value is the initial amount recognized for
such investments for the purposes of its
subsequent valuation for the interest retained
as associate, joint operation or financial
instrument. Additionally any amount previously
recognized in Other Comprehensive Income
regarding such investments is recognized as if
the Company had disposed of the related assets
and liabilities. Consequently, the amounts
previously recognized in Other Comprehensive
Income may be reclassified to net income.

2.5 Business Combinations
The Company applies the acquisition method
to account for business combinations. The
consideration for each acquisition is measured
at fair value (on the date of exchange) of the
assets acquired, the liabilities incurred or
assumed and the equity instruments issued by
the Company in exchange for the control of
the company acquired. The costs related to the
acquisition are expensed as incurred.

In the case of business combinations achieved
in stages, the Company’s equity interest in the
company acquired is remeasured at fair value
at the acquisition date (i.e., the date on
which the Company acquired control) and the
resulting gain or loss, if any, is recognized
as income/expense or in other comprehensive
income, depending on the origin of the
variation. In the periods preceding the reporting
periods, the Company may have recognized
in other comprehensive income the changes in
the value of the interest in the capital stock of
the acquired company. In that case, the amount
recognized in other comprehensive income is
recognized on the same basis that would have
been required if the Company had directly
disposed of the previously-held equity interest.

Any excess of the acquisition cost (including
the interest previously held, if any, and the
non-controlling interest) over the Company’s
share in the net fair value of the subsidiary’s or
associate’s identifiable assets, liabilities and
contingent liabilities measured at the acquisition
date is recognized as goodwill. Any excess
of the Company’s share in the net fair value
of the identifiable assets, liabilities and
contingent liabilities over the acquisition cost,
after its measurement at fair value, is
immediately recognized in net income.

The acquisition cost comprises the consideration
transferred and the acquisition-date fair value
of the acquirer’s previously-held equity interest
in the acquiree, if any.

204

2.6 Goodwill
Goodwill arises from the acquisition of
subsidiaries and associates and refers to the
excess of the sum of the consideration
transferred, the fair value of the acquirer’s
previously-held equity interest (if any) in the
acquiree over the interest acquired in the
net amount of the fair value at the date of
acquisition of the identifiable assets acquired
and liabilities assumed.

If, upon measurement at fair value, the
Company’s share in the fair value of net
identifiable assets of the acquired company
exceeds the amount of the consideration
transferred, the amount of any non-controlling
interest in such company and the fair value
of the acquirer’s previous equity interest in the
acquiree (if any), such excess is immediately
recognized in the statement of comprehensive
income as a gain arising from a very profitable
acquisition.

Goodwill is not amortized, but tested for
impairment on an annual basis. For the
purposes of impairment testing, goodwill is
allocated to each of the Company’s cash-
generating units expected to render benefits
from the synergies of the respective business
combination. Those cash-generating units
to which goodwill is allocated are tested for
impairment on an annual basis, or more
frequently, when there is any indication of
impairment. If the recoverable value of
the cash-generating unit, i.e. the higher of the
value in use or the fair value net of selling
expenses, is lower than the value of the net
assets allocated to that unit, including goodwill,
the impairment loss is first allocated to reduce
the goodwill allocated to the unit and then
to the other assets of the unit, on a pro rata
basis, based on the valuation of each asset
in the unit. The impairment loss recognized
against the valuation of goodwill is not
reversed under any circumstance.

In case of a loss of control in the subsidiary,
the amount attributable to goodwill is included
in the calculation of the corresponding gain
or loss.

2.7 Revenue Recognition
Management fees are recognized when such
services are rendered at the fair value of
the consideration received or to be received.

2.8 Foreign Currency and Functional Currency
The financial statements of each of the
Company’s subsidiaries or associates
are prepared in the currency of the primary
economic environment in which the entity
operates (its functional currency). For the
purposes of the Company’s Parent Company
Only Financial Statements, the net income
and the financial position of each entity
are stated in Argentine Pesos (Argentina’s legal
tender for all companies domiciled in
Argentina), which is the Company’s functional
currency.

Exchange differences are charged to net income
as incurred.

In preparing the Company’s parent company
only financial statements, in order to measure,
under the equity method, the Company’s
interest in the entities which functional
currencies is different from the Argentine Peso,
the assets and liabilities of such companies
are translated to Argentine pesos at the exchange
rate prevailing at the end of the year, while
the net income is translated at the exchange
rate prevailing on the transaction date.
Translation differences are recognized in other
comprehensive income as “Variation in
Translation Differences of Foreign Operations”.

2.9 Taxes
The income tax charge reflects the sum
of current income tax and deferred income tax.

2.9.1 Current and Deferred Income Tax for the year
Current and deferred taxes are recognized as
expense or income for the year, except when
they are related to entries debited or credited to
other comprehensive income or directly to
equity, in which cases taxes are also recognized
in other comprehensive income or directly in
equity, respectively. In the case of a business
combination, the tax effect is taken into
consideration in the calculation of goodwill or
in the determination of the excess of acquirer’s

205

interest in the net fair value of the acquiree’s
identifiable assets, liabilities and contingent
liabilities over the cost of the business
combination.

2.9.2 Current Income Tax
Current tax payable is based on the taxable
income recorded during the year. Taxable
income and net income reported in the parent
company only statement of comprehensive
income differ due to revenue or expense items
that are taxable or deductible in other fiscal
years and items that are never taxable or
deductible. The current tax liability is calculated
using the tax rate in effect as of the date of these
parent company only financial statements.

2.9.3 Deferred Income Tax
Deferred tax is recognized on temporary
differences between the book value of the assets
and liabilities included in these financial
statements and the corresponding tax basis used
to determine taxable income. Deferred tax
liabilities are generally recognized for all
temporary fiscal differences. Deferred tax assets
are recognized for all deductible temporary
differences to the extent that it is likely that
future taxable income will be available against
which those deductible temporary differences can
be charged. These assets and liabilities are not
recognized if the temporary differences arise from
goodwill or from the initial recognition (other
than in a business combination) of other assets
and liabilities in a transaction that affects neither
the taxable income nor the accounting income.

The book value of a deferred tax asset is reviewed
at each reporting year and reduced to the extent
that it is no longer likely that sufficient taxable
income will be available in the future to allow for
the recovery of all or part of the asset.

Deferred tax assets and liabilities are measured
at the tax rates that are expected to be applicable
in the year in which the asset is realized or
the liability is settled, based on the tax rates
(and tax laws) that have been enacted or
substantively enacted by the end of the period.
The measurement of deferred tax liabilities
and assets reflects the tax consequences that
would follow from the manner in which
the entity expects, at the end of the reporting
year, to recover or settle the book value of its
assets and liabilities.

Deferred tax assets are offset against deferred
tax liabilities if effective regulations allow
to offset, before the tax authorities, the amounts
recognized in those items; and if the deferred
tax assets and liabilities arise from income
taxes levied by the same tax authority and the
Company intends to settle its assets and
liabilities on a net basis.

Under the IFRS, deferred income tax assets
and liabilities are classified as non-current assets
and liabilities, respectively.

2.9.4 Tax on Assets
In Argentina, the tax on assets (impuesto a
la ganancia mínima presunta) is supplementary
to income tax. The Company assesses this
tax at the effective rate of 1% on the taxable
assets at year-end. The Company’s tax liability
for each year will be equal to the higher of
the tax on assets assessment or the income tax
liability assessed at the legally effective rate
on the estimated taxable income for the year.
However, if the tax on assets exceeds the income
tax liability in any given fiscal year, the excess
may be creditable against any excess of income
tax liability over the tax on assets in any of
the following ten fiscal years.

The tax on assets balance has been capitalized
in the parent company only financial
statements, net of a valuation allowance, based
on the Company’s current business plans.

2.10 Property, Plant and Equipment and Intangible

Assets
Property, plant and equipment held for
use in the supply of services, or for
administrative purposes, are recorded at cost
less accumulated depreciation and any
accumulated impairment loss.

Depreciation of property, plant and equipment
is recognized on a straight-line basis over its
estimated useful life.

The estimated useful life, residual value
and depreciation method are reviewed at each
year-end, with the effect of any changes in
estimates accounted for on a prospective basis.

Repair and maintenance expenses are expensed
as incurred.

206

The gain or loss arising from the retirement
or disposal of an item of property, plant
and equipment is calculated as the difference
between income from the sale of the asset
and the asset’s book value, and recognized
under “Other Income and Expenses, net” in
the parent company only statement of
comprehensive income.

The residual value of an asset is written down
to its recoverable value, if the asset’s residual
value exceeds its estimated recoverable value
(see Note 2.11).

Intangible assets comprise software and are
valued at cost, net of the corresponding
accumulated amortization and impairment
losses. Amortization is calculated on a straight
line basis over the estimated useful life of
the intangible assets. The Company reviews
the useful lives applied, the residual value and
the amortization method at each year-end,
and accounts the effect of any changes in
estimates on a prospective basis.

2.11 Impairment of Non-Financial Assets,

Except Goodwill
At the end of each financial statement, the
Company reviews the book value of its
non-financial assets with definite useful life to
determine the existence of any evidence
indicating that these assets could be impaired.
If there is any indication of impairment,
the recoverable value of these assets is estimated
for the purposes of determining the amount
of the impairment loss (in case the recoverable
value is lower than the book value). Where
it is not possible to estimate the recoverable
value of an individual asset, the Company
estimates the recoverable value of the cash-
generating unit ("CGU") to which such asset
belongs. Where a consistent and reasonable
allocation base can be identified, corporate
assets are also allocated to an individual cash-
generating unit or, otherwise, to the smallest
group of cash-generating units for which a
consistent allocation base can be identified.

specific to the asset for which estimated future
cash flows have not been adjusted.

Assets with an indefinite useful life
(for example, non-financial assets unavailable
for use) are not amortized, but are tested for
impairment on an annual basis.

During this year, no impairment losses have
been recorded for these assets.

2.12 Financial Instruments

2.12.1 Financial Assets
Purchases and sales of financial assets are
recognized at the transaction date when
the Company undertakes to purchase or sell
the asset, and is initially measured at fair
value, plus transaction costs, except for those
financial assets classified at fair value with
changes in the statement of income, which are
initially measured at fair value.

2.12.1.1 Classification of Financial Assets
Financial assets are classified within the
following specific categories: “financial assets
at fair value with changes in net income”,
“held-to-maturity investments” and “loans and
receivables”. The classification depends on
the nature and purpose of the financial assets
and is determined on initial recognition.

2.12.1.2 Recognition and Measurement of

Financial Assets

2.10.1.2.1 Financial Assets at Fair Value with

Changes in Net Income
Financial assets at fair value with changes in
net income are recorded at fair value,
recognizing any gain or loss arising from the
measurement in the parent company only
statement of comprehensive income. The net
gain or loss recognized in net income includes
any gain or loss generated by the financial
asset and is included under the item financial
income and cost in the parent company only
statement of comprehensive income.

The assets designated in this category are
classified as current assets if they are expected
to be traded within 12 months; otherwise,
they are classified as non-current assets.

The fair value of these assets is calculated based
on the current quoted market price of these
securities.

207

2.12.1.2.2 Held-to-maturity Investments
Held-to-maturity investments are measured
at amortized cost using the effective interest rate
method less any impairment, if any.

The effective interest rate method calculates
the amortized cost of a financial asset or liability
and the allocation of financial income or
cost over the whole corresponding period. The
effective interest rate is the rate that exactly
discounts estimated future cash payments or
receipts over the expected life of the financial
instrument to the net book value of the
financial asset or liability on its initial
recognition.

Balances in foreign currency were translated
at the exchange rate prevailing at the closing of
year for the settlement of these transactions.
Foreign exchange differences were charged to
net income for each year.

2.12.1.2.3 Loans and Receivables
Loans and trade receivables with fixed or
determinable payments not traded in an active
market are classified as “trade receivables and
other”. Trade receivables and other are initially
measured at fair value, and subsequently
measured at amortized cost using the effective
interest rate method, less any impairment,
if any. Interest income is recognized using the
effective interest rate method, except for
short-term balances for which the recognition
of interest is not significant.

Loans and receivables are classified as current
assets, except for the maturities exceeding
12 months from the closing date.

Loans in foreign currency have been valued
as mentioned above, at the exchange rates
prevailing as of each year-end. Foreign exchange
differences were charged to net income for
each year.

2.12.1.3 Impairment of Financial Assets
The Company tests financial assets or a group
of assets for impairment at each closing date
to assess if there is any objective evidence of
impairment. The value of a financial asset or a
group of assets is impaired, and an impairment
loss is recognized, where there is objective
evidence of the impairment as a result of one
or more events that occurred after the initial
recognition of the asset (a “loss event”) and that
loss event or events have an impact on the

estimated future cash flows of the financial
asset or a group of assets, which may be reliably
measured.

The objective evidence of impairment may
include, among others, significant financial
difficulties of the issuer or obligor; or
breach of contractual terms, such as default or
delinquency in interest or principal payments.

The Company tests for impairment financial
assets disclosed under Other Receivables on
a case by case basis.

Where there is objective evidence of an
impairment loss in the value of loans granted,
receivables or held-to-maturity investments
recorded at amortized cost, the loss amount is
measured as the difference between the book
value and the present value of estimated future
cash flows (without including future non-
incurred losses), discounted at the original
effective interest rate of the financial asset.
The asset’s book value is written down under
a contra asset account. The loss amount is
recognized in net income for the year.

If, in subsequent periods, the impairment loss
amount decreases and such decrease can be
objectively related to an event occurring after
the impairment has been recognized (such as an
improvement in the debtor’s credit rating),
the previously recognized impairment loss is
reversed. A loss reversal can only be recorded to
the extent the financial asset’s book value does
not exceed the amortized cost that would have
been determined if the impairment loss had not
been recorded at the reversal date. The reversal
amount is recognized in net income for the year.

2.12.1.4 Derecognition of Financial Assets
The Company derecognizes a financial asset
when the contractual rights to the cash flows
of such assets expire or when it transfers
the financial asset and, therefore, all the risks
and benefits inherent to the ownership of
the financial asset are transferred to another
entity. If the Company retains substantially
all the risks and benefits inherent to the
ownership of the transferred asset, it will
continue to recognize it and will recognize a
liability for the amounts received.

2.12.2 Financial Liabilities
Financial liabilities are valued at amortized cost
using the effective interest rate method.

208

2.12.2.1 Debts
Debt is initially valued at fair value net of
the transaction costs incurred, and subsequently
valued at amortized cost using the effective
interest rate method. Any difference between
the initial value net of the transaction costs
and the settlement value is recognized in
the income statement over the term of the loan
using the effective interest rate method.
Interest expense has been charged to the parent
company only statement of comprehensive
income under “Financial Costs”.

2.12.2.2 Trade Payables and Other
Trade payables with fixed or determinable
payments not traded in an active market are
classified as “Trade Payables and Other”.
Trade Payables and Other are initially measured
at fair value, and subsequently measured at
amortized cost using the effective interest rate
method. Interest expense is recognized
using the effective interest rate method, except
for short-term balances for which the
recognition of interest is not significant.

Trade Payables and Other are classified as
current, except for the maturities exceeding
12 months from the closing date.

Trade payables in foreign currency have been
valued as mentioned above, at the exchange
rates prevailing as of each year end. Foreign
exchange differences were charged to net
income for each year.

Cash and Banks

Short-Term Investments

Cash and Cash Equivalents

In the years ended December 31, 2016 and 2015,
the following significant transactions were carried
out, which did not have an impact on cash and
cash equivalents:

2.12.2.3 Derecognition of Financial Liabilities
An entity shall derecognize a financial liability
(or part of it) when, and only when, it has
been extinguished, i.e., when the obligation
specified in the corresponding agreement is
discharged, cancelled or expires.

2.13 Other Liabilities
The other liabilities have been valued at
nominal value.

2.14 Assets and Liabilities Held for Distribution to

2.15 Parent Company Only Statement of Cash Flows
For the purposes of preparing the parent
company only statement of cash flows, the
item “Cash and Cash Equivalents” includes cash
and bank balances, high liquidity short-term
investments (with original maturities shorter
than 90 days), and bank overdrafts payable on
demand, if any, are deducted to the extent they
are part of the Company’s cash management.

Bank overdrafts are classified as “Debt” in the
parent company only balance sheet.

Cash and cash equivalents at each year-end, as
disclosed in the parent company only statement
of cash flows, may be reconciled against the
items related to the parent company only
balance sheet as follows:

December 31, 2016

December 31, 2015

34,438,063

84,222,441

118,660,504

12,193,114

19,848,419

32,041,533

Capital contributions in subsidiaries through debt settlement

55,176,000

8,000,000

December 31, 2016

December 31, 2015

209

2.16 Distribution of Dividends
The distribution of dividends to the Company’s
shareholders is recognized as a liability in
the financial statements for the year in which
the distribution of dividends is approved by
the Shareholders.

Note 3

Accounting Estimates and Judgments
In applying the accounting policies described
in Note 2, the Company has to make
judgments and prepare accounting estimates of
the value of the assets and liabilities that may
not be otherwise obtained. The estimates and
related assumptions are based on historical
experience and other pertinent factors. Actual
results may differ from these estimates.

The underlying estimates and assumptions are
continually reviewed. The effects of the reviews
of accounting estimates are recognized for the
year in which estimates are reviewed.

These estimates basically refer to:

Impairment of Goodwill
The Company assesses goodwill for impairment
on an annual basis. In determining if
there is impairment of goodwill, the Company
calculates the value in use of the cash
generating units to which it has been allocated.
The calculation of the value in use requires
the determination by the entity of the future
cash flows that should arise from the cash
generating units and an appropriate discount
rate to calculate the present value.

During this year, no impairment losses have
been recorded for goodwill.

Recognition and Measurement of Deferred
Tax Items
As disclosed in Note 2.9, deferred tax assets
are only recognized for temporary differences to
the extent that it is likely that the entity will
have enough future taxable income against
which the deferred tax assets can be used. Tax
loss carryforwards from prior years are only
recognized when it is likely that the entity will
have enough future taxable income against
which they can be used.

The Company examines the recoverable value
of deferred tax assets based on its business plans
and books a valuation allowance, if appropriate,
so that the net position of the deferred tax
asset will reflect the probable recoverable value.

Determination of the Useful Lives of Property,
Plant and Equipment
The Company reviews the reasonableness of
the estimated useful life of property, plant and
equipment at each year-end.

Measurement of the fair value of certain
financial instruments
The fair value of a financial instrument is
the amount at which the instrument could be
purchased or sold between knowledgeable,
willing parties in an arm’s length transaction.
If there is a quoted market price available for an
instrument in an active market, the fair value
is calculated based on that price.

If there is no quoted market price available
for a financial instrument, its fair value
is estimated based on the price established in
recent transactions involving the same or similar
instruments and, otherwise, based on valuation
techniques regularly used in financial markets.
The Company uses its judgment to select
a variety of methods and makes assumptions
based on market conditions at closing.

210

Note 4

Breakdown of the Main Items of the Parent Company only Balance Sheet

4.1 Property, Plant and Equipment

Balance at

Historical value

Balances as of

December 31,

Main Account

the Beginning

Additions

Retirements

2016

Furniture and Fixtures

Audio and Video Equipment

Telecommunication Equipment

Computer Equipment

Improvements in Third-Party Property

Total as of December 31, 2016

574,796

153,062

284,337

6,770,773

7,782,968

134,667

60,146

19,190

4,414,452

1,822,196

6,450,651

709,463

213,208

303,527

11,185,225

1,822,196

14,233,619

Useful Life

Balance

at the

Depreciation

Balances

Net Book

as of

Value as of

December

Main Account

(in years)

Beginning

Retirements

For the year

31, 2016

Furniture and Fixtures

Audio and Video Equipment

Telecommunication

Equipment

Computer Equipment

Improvements in

Third-Party Property

Total as of

December 31, 2016

315,762

120,247

167,935

5,920,248

6,524,192

53,806

15,796

369,568

136,043

339,895

77,165

39,359

1,236,079

207,294

7,156,327

96,233

4,028,898

1,822,196

1,345,040

7,869,232

6,364,387

211

Balance at

Historical value

Balances as of

December 31,

Main Account

the Beginning

Additions

Retirements

2015

Furniture and Fixtures

Audio and Video Equipment

Telecommunication Equipment

Computer Equipment

Total as of December 31, 2015

443,518

122,179

218,091

6,431,490

7,215,278

131,279

30,883

66,245

339,283

567,690

574,797

153,062

284,336

6,770,773

7,782,968

Useful Life

Balance

at the

Depreciation

Balances

Net Book

as of

Value as of

December

Main Account

(in years)

Beginning

Retirements

For the year

31, 2015

Furniture and Fixtures

Audio and Video Equipment

Telecommunication

Equipment

Computer Equipment

Total as of

December 31, 2015

270,308

114,692

137,894

5,270,428

5,793,322

45,454

5,555

315,762

120,247

30,041

649,820

167,935

5,920,248

259,035

32,815

116,401

850,525

730,870

6,524,192

1,258,776

212

4.2 Intangible Assets

Balance at

Historical value

Balances as of

December 31,

Main Account

Software

Total as of December 31, 2016

the Beginning

Additions

Retirements

2016

406,468

Amortization

Period

Balance

at the

Amortization

Balances

Net Book

as of

Value as of

December

Main Account

(in years)

Beginning

Retirements

For the year

31, 2016

Software

Total as of

December 31, 2016

299,135

65,769

364,904

41,564

65,769

364,904

41,564

Balance at

Historical value

Balances as of

December 31,

Main Account

Software

Total as of December 31, 2015

the Beginning

Additions

Retirements

2015

406,468

Amortization

Period

Balance

at the

Amortization

Balances

Net Book

as of

Value as of

December

Main Account

(in years)

Beginning

Retirements

For the year

31, 2015

Software

Total as of
December 31, 2015

208,866

90,269

299,135

107,333

90,269

299,135

107,333

213

4.3. Investment in Unconsolidated Affiliates

Class

Nominal Value

Number

Value recorded

as of

December 31,
2016 (1)

Non-Current Investments
SHOSA (6)
- Goodwill
Vistone (6)
VLG (5)
- Goodwill
CVB (6)
CLC (6)
Cablevisión (5)

Pem S.A.

AGEA

AGR

CIMECO

- Goodwill

CMI

ARTEAR.

IESA

Radio Mitre

GC Services

GCGC

CMD

GC Minor

GCSA Investments

Total

Other Non-Current Liabilities
GCSA Equity (5)
GCSA Investments

Total

Common

Ps. 10,000

41,207

Common

Ps. 1

1,397,974,126

1,401,922,086

68,630,128

37,412,958

57,747,859

36,792,441

63,555,121

29,382,546

236,475,711

44,878,808

33,892,206

51,926,349

58,837,707

370,572

1,146,222,082

178,887,402

153,489,032

36,131,665

24,102,843

124,820,353

59,675,143

41,314,851

3,311,592,293

(1) In certain cases, the equity value does not correspond to the related
shareholders’ equity due to: (i) the adjustment of the equity value to
the Company’s accounting policies, as required by professional accounting
standards, (ii) the elimination of goodwill generated by transactions
between companies under the Company’s common control, (iii) the
existence of irrevocable contributions, and (iv) adjustments to fair market
value of net assets for acquisitions made by the Company.
(2) Interest in votes amounts to 98.6%.
(3) Companies through which an interest is held in Cablevisión S.A.
(4) Interest in votes amounts to 23.2%.
(5) See Notes 4.12 and 20.
(6) Companies merged into Grupo Clarín as of October 1, 2016.
See Note 20.

214

Value recorded

as of

December 31,

Information about the issuer - Latest financial statements

2015 (1) Main business activity

Date

Capital Stock

Net Income

Equity

Interest (%)

2,096,242,048

495,735,087

1,812,180,848

389,870,737

Investing and financing

12.31.2016

4,312,088,966

2,047,880,779

5,829,944,341

50.00%

100,503,301

417,745,017

104,185,145

Cable Television - Community

12.31.2016

1,200,000,000

4,045,337,263

11,281,523,267

34.34%

Antenna - Telecommunications

Services - Investment in

Unconsolidated Affiliates

Investing

981,593,719

Publishing and Printing

12,267,500

Printing

47,749,185

Investing and financing

58,837,707

314,895

Advertising

671,142,681

Broadcasting Services

178,927,125

Investing and financing

87,636,324

Broadcasting Services

29,610,115

Investing and financing

30,848,312

Services

63,576,405

Investing and services

34,692,941

Investing and financing

7,613,659,094

12.31.2016

13,558,511

1,441,374,151

308,959,139

180,479,453

21,613,349

(291,468,599)

(157,656,326)

39,759,610

55,498,206

1,445,311,611

158,058,949

389,063,771

12,000

59,611,118

38,325,795

65,413,136

19,075,942

30,291,285

236,475,711

47,237,879

10,692,306

6,817,481

45,376,064

564,328,308

1,282,124,913

67,198,241

68,522,103

6,521,550

(6,413,148)

(78,183,460)

(2,753,577)

268,551,560

187,467,744

161,093,515

36,131,665

24,848,290

170,059,302

63,305,689

31,198,693

0.00%

96.99%

22.21%
(4) 20.70%

0.80%
(2) 96.87%
96.00%

97.15%

100%

97.00%

100%

95.00%

100%

Investing and financing

12.31.2016

1,504

(351,138,552)

(351,137,048)

100%

228,553,387

215

Equity in Earnings from Affiliates and Subsidiaries

December 31, 2016

December 31, 2015

910,610,950

636,879,569

154,141,907

35,824,420

(272,523,761)

7,549,067

(50,781,904)

551,172,125

65,229,860

65,852,708

(6,583,239)

(26,108,364)

6,521,550

(16,022,282)

2,061,762,606

711,870,001

501,336,206

121,612,468

28,894,577

(22,528,937)

8,680,083

(108,649,310)

500,638,600

73,204,432

20,685,835

9,254,050

(3,562,368)

10,261,919

6,938,621

1,858,636,177

December 31, 2016

December 31, 2015

30,000

33,853,449

(33,853,449)

30,000

148,303,413

2,554,573

3,887,337

2,160,068

482,017

269,095
157,656,503

30,000

33,849,411

(33,849,411)

30,000

150,911,085

2,430,910

758,609

11,311

272,600

129,854
154,514,369

SHOSA (1)
Vistone (1)
CVB (1)
CLC (1)
AGEA

CIMECO

GCSA Investments

ARTEAR.

IESA

Radio Mitre

GCGC

CMD

GC Services

Other

(1) Equity in Earnings from these subsidiaries include
the effect of the direct and indirect interests held by
those subsidiaries in Cablevisión until September 30,
2016, as mentioned in Note 20.

4.4 Other Receivables

Non-Current

Guarantee Deposits

Tax on assets

Valuation Allowance for Tax on Assets

Current

Related Parties (Note 8)

Tax Credits

Advances

Dividend Receivable (Note 8)

Judicial Liens

Other

On October 1, 2015, the Company executed a
loan agreement for consideration with a related
company for USD 2 million, at an annual rate
of 9.375%, due in April 2016. On December 3,
2015, the related company prepaid in full
principal and interest on the loan agreement for
consideration.

216

4.5 Other Investments

Money Market

Mutual Funds

4.6 Cash and Banks

Cash and Imprest Funds

Cash at Banks

Securities to be deposited

4.7 Debt

Non-Current

Related Parties (Note 8)

Current

Bank Overdraft

Related Parties (Note 8)

The following table details the changes in loans
and indebtedness for the years ended December
31, 2016 and 2015:

Balances as of January 1st

New Loans and Indebtedness

Accrued Interest

Exchange Differences

Taxes
Settlement of principal and interest (1)
Balances as of December 31

(1) Includes Ps. 756,708,595 that was cancelled as a
result of the reorganization process mentioned in
Note 20.

As of December 31, 2016, the Company holds
a loan with a related company for USD 23
million, due in June 2021. That loan accrues
interest at an annual rate of 6.5%, which may
be capitalized on a semi-annual basis in June
and December of each year. The first
capitalization will be in June 2017.

December 31, 2016

December 31, 2015

24,883,519

59,338,922

84,222,441

19,848,419

December 31, 2016

December 31, 2015

523,900

3,914,163

30,000,000

34,438,063

420,050

11,773,064

12,193,114

December 31, 2016

December 31, 2015

367,813,013

3,475,247

287,999,976

2016

2015

287,999,976

741,375,247

19,226,470

75,915,483

3,821,124

(757,050,040)
371,288,260

231,387

208,075,000

6,077,468

81,347,508

(7,731,387)
287,999,976

217

4.8 Taxes Payable

Current

Taxes Payable on a National Level

Taxes Payable on a Provincial Level

4.9 Trade Payables and Other

Current

Suppliers and Trade Provisions

Related Parties (Note 8)

Employer’s Contributions

December 31, 2016

December 31, 2015

8,248,597

807,790

9,056,387

10,619,121

620,510

11,239,631

December 31, 2016

December 31, 2015

16,686,264

3,863,800

53,707,246

74,257,310

13,470,749

2,178,648

30,979,646

46,629,043

4.10 Assets and Liabilities in Foreign Currency

December 31, 2016

December 31, 2015

Type and

Amount of

Foreign

Prevailing

Currency

Exchange Rate

Amount in

Local

Currency

Type and

Amount of

Foreign

Currency

USD

1,090

USD 1,575,904

USD

79,049

15.79

17,211

USD

1,090

24,883,519

USD 1,533,881

1,248,190

USD

101,142

26,148,920

USD 23,147,452

15.89

367,813,013

USD 22,065,151

367,813,013

Amount in

Local

Currency

14,105

19,848,419

1,308,774

21,171,298

287,729,565

Items

Assets

Current Assets

Other Receivables

Other Investments

Cash and Banks

Total Current Assets

Total Assets

Liabilities

Non-Current Liabilities

Debt
Total Non-Current

Liabilities

Current Liabilities

Debt

Total Current Liabilities

Total Liabilities

USD - US Dollars

218

4.11 Changes in Allowances

Balance

at the

Balances

from

Balances

as of

December

Items

Beginning

Increases

Mergers

Decreases

31, 2016

31, 2015

Deducted from Assets

Valuation Allowance for

Net Deferred Tax Assets

26,761,408

(1) 62,783,384

89,544,792

26,761,408

Valuation Allowance for

Tax on Assets

Allowance for

Goodwill Impairment

Total

33,849,411

(1) 5,869,160

32,838

(5,897,960)

33,853,449

33,849,411

28,432,495

89,043,314

68,652,544

32,838

(2) (28,432,495)
(34,330,455)

123,398,241

28,432,495

89,043,314

(1) Charged to Income Tax and Tax on Assets
(2) Reclassification as Assets Held for Distribution to Shareholders.

4.12 Assets and liabilities held for distribution

to shareholders and Discontinued operations
As described in Note 20 to the parent company
only financial statements as of December 31,
2016, the Company’s interest in Cablevisión,
VLG and in GCSA Equity and certain
assets and liabilities of the Company have been
classified as of that date as “Assets held for
distribution to shareholders” and as “Liabilities

Assets

Non-Current Assets

Deferred Tax Assets
Investments in Unconsolidated Affiliates (1)
Total Non-Current Assets

Total Assets Held for Distribution to Shareholders

Liabilities

Non-Current Liabilities
Other Liabilities (2)
Total Non-Current Liabilities

Total Liabilities Held for Distribution to Shareholders

(1) Corresponds to the interest in VLG and Cablevisión.
(2) Corresponds to the interest in GCSA Equity.

held for distribution to shareholders”,
respectively, as required under IFRS.

The following is a detail of those assets and
liabilities disclosed under “Assets held for
distribution to shareholders” and “Liabilities
held for distribution to shareholders”
as of December 31, 2016 (in millions of
Argentine Pesos):

December 31, 2016

6,806

6,817

351

219

In connection with the same situations
mentioned above, the following is a detail of
the results for the years ended December 31,
2016 and 2015, classified as discontinued

operations corresponding to Equity in earnings
from Cablevisión, VLG and GCSA Equity
(in millions of Argentine Pesos):

December 31, 2016

December 31, 2015

Cablevisión

VLG

GCSA Equity

Net Income from Discontinued Operations

289

398

(31)

656

131

Note 5

Breakdown of the Main Items of the Parent Company only Statement of Comprehensive Income

5.1 Information Required under Section 64, Subsection b) of Law No. 19,550

Item

Salaries, Social Security and Benefits to Personnel (1)
Supervisory Committee’s fees
Fees for services (2)
Taxes, Duties and Contributions

Other personnel expenses

General expenses

IT expenses

Maintenance Expenses

Communication expenses

Advertising expenses

Travel Expenses

Stationery and Office Supplies

Depreciation of Property, Plant and Equipment

Amortization of Intangible Assets

Other expenses

Total

(1) Includes fees for technical and administrative
services to Directors in the amount of Ps. 28,896,154
as of December 31, 2016. Additionally, they include
the effect of the long-term savings plan for employees
mentioned in Note 13.
(2) Includes Directors’ fees for the year 2016 in the
amount Ps. 12,610,000.

5.2 Financial Costs

Exchange Differences
Interest

Administrative Expenses

December 31, 2016

December 31, 2015

163,789,784

1,649,999

69,875,256

9,517,973

5,256,285

367,069

1,613,278

4,736,803

1,401,266

1,917,553

7,822,326

658,369

1,345,040

65,769

13,195,195

283,211,965

109,277,845

1,494,000

56,752,174

8,522,305

2,578,722

194,621

1,674,750

3,217,545

1,104,173

1,436,447

4,648,095

235,523

730,870

90,269

6,727,070

198,684,409

December 31, 2016

December 31, 2015

(75,915,483)
(19,226,470)

(95,141,953)

(81,347,508)
(6,077,468)

(87,424,976)

220

5.3 Other Financial Results, net

Exchange Differences and Other Financial Results

Results from transactions with securities and bonds

Interest

Other Taxes and Expenses

Note 6

Income tax
The following table shows the breakdown of net
deferred tax assets (amounts stated in thousands
of Argentine Pesos):

Assets

Tax Loss Carryforwards

Other Investments

Employer’s Contributions

Other

Subtotal

Valuation Allowance for Deferred Tax Assets

Net Deferred Tax Assets

(1) As of December 31, 2016, the Company recorded
Ps. 11,050,528 as Assets held for distribution to
shareholders. See Note 4.12.

December 31, 2016

December 31, 2015

7,052,119

107,499

2,632,730

(5,051,000)

4,741,348

12,362,580

32,201,215

4,389,540

(4,296,875)

44,656,460

December 31, 2016

December 31, 2015

89,545

19,093

2,631

111,269

(89,545)
(1) 21,724

26,761

24,249

7,342

58,361

(26,761)

31,600

The following table shows the reconciliation
between the income tax and tax on assets charged
to net income for the years ended December 31,
2016 and 2015 and the income tax liability that

would result from applying the current tax rate
on income before income tax and tax on assets and
the income tax liability assessed for each year
(amounts stated in thousands of Argentine Pesos):

Income Tax Assessed at the Current Tax Rate (35%)

on Income before Income Tax

Permanent Differences:

Gain/Loss on Investments in Subsidiaries

Non-Taxable Income

Other

Subtotal

Valuation Allowance for Net Deferred Tax Assets

Charged to Income

Income Tax

Deferred Taxes for the Year

Income Tax

Tax on assets

Total

December 31, 2016

December 31, 2015

(657,416)

(614,491)

721,617

176

(419)

63,958

(62,783)

1,175

1,154

(5,869)

(4,715)

650,522

(8,647)

121

27,505

(26,434)

1,071

(3,142)

(2,071)

221

As of December 31, 2016, the Company’s
accumulated tax loss carryforwards amounted to
approximately Ps. 255.8 million, which calculated
at the current tax rate, represent deferred tax
assets in the amount of approximately Ps. 89.5
million. The following table shows the expiration
date of the accumulated tax loss carryforwards
pursuant to statutes of limitations (amounts stated
in thousands of Argentine Pesos):

Note 7
Reserves, Accumulated Income and Dividens

Balances at the beginning of the year:

Legal Reserve

Retained Earnings

Other Reserves

Optional Reserves

Total

Net Income for the Year

Dividend Distribution

Changes in Reserves for Acquisition of Investments

Balance at the end of the year

a. Grupo Clarín
The Company’s bylaws set forth that retained
earnings shall be appropriated as follows:
(i) 5% to the Company’s legal reserve until such
reserve equals 20% of the Company’s capital
stock; and (ii) the balance, in whole or in part,
to the payment of the fees of the members
of the Board of Directors and the Supervisory
Committee, to dividends on common shares,
or reserve accounts, or as otherwise determined
by the Shareholders, among other situations.

On April 28, 2015, at the Annual Ordinary
Shareholders’ Meeting of the Company,
the shareholders decided, among other things,
to appropriate the net income for the fiscal year
2014, which amounted to Ps. 804,101,687, as
follows: (i) Ps. 250,000,000 to the distribution
of dividends payable in two installments of
Ps. 125,000,000 each, the first one to be paid

Expiration year

Amount of Tax

Loss Carryforward

2018

2020

2021

1,102

75,225

179,515

255,842

December 31, 2016

December 31, 2015

119,460,767

1,884,929,369

(3,653,767)

2,625,678,396

4,626,414,765

2,530,041,832

(300,000,000)

(55,231,356)

6,801,225,241

119,460,767

804,101,687

(209,686)

2,071,576,709

2,994,929,477

1,884,929,369

(250,000,000)

(3,444,081)

4,626,414,765

within 30 days as from the date of the
shareholders’ Meeting and the second one
to be paid on December 31, 2015 or on
an earlier date as determined by Cablevisión’s
Board of Directors and (ii) Ps. 554,101,687
to an optional reserve to provide financial aid
to subsidiaries and in connection with the
Audiovisual Communication Services Law.

On April 25, 2016, at the Annual Ordinary
Shareholders’ Meeting of the Company,
the shareholders decided, among other things,
to appropriate the net income for the fiscal year
2015, which amounted to Ps. 1,884,929,369,
as follows: (i) Ps. 300,000,000 to the
distribution of dividends payable within 30 days
as from the date of the Shareholders’ Meeting
and (ii) Ps. 1,584,929,369 to the reserve for
future dividends.

222

b. Cablevisión
On April 20, 2016, at the Annual General
Ordinary and Extraordinary Shareholders’
Meeting of Cablevisión, its shareholders decided
to distribute cash dividends in the amount
of Ps. 750 million, payable in Argentine Pesos
or US Dollars within a term of thirty days
as from the date of such Shareholders’ Meeting
and delegated on the Board of Directors of
Cablevisión the power to establish the time
and payment method. Of that amount,
approximately Ps. 300.1 million corresponds
to the non-controlling interest in this company.
As of the date of these financial statements,
Cablevisión paid Ps. 749.7 million of
distributed dividends.

Also, on June 30, 2016, at the General
Extraordinary Shareholders’ Meeting
of Cablevisión, its shareholders decided to
distribute cash dividends in the amount
of Ps. 749 million, payable within thirty days
as from the date on which the Shareholders’
Meeting was held. Of that amount,
approximately Ps. 299.6 million corresponds
to the non-controlling interest in this
company. As of the date of these financial
statements, all the dividends had been paid.

At the General Extraordinary Shareholders’
Meeting held on January 12, 2016, the
shareholders of Cablevisión decided, among
other things, i) to cancel 207,157 Class B
common book-entry treasury shares with a
nominal value of Ps. 1 representing 0.1%
of the capital stock and votes of that Company;
and, consequently, to reduce the capital stock
by Ps. 207,157, (ii) to ratify the amendment
of Section 4 of the Bylaws approved by the
shareholders at the Extraordinary Shareholders’
Meeting held on June 30, 2014, which, among
other things, had amended the nominal
value of shares from Ps. 1 to Ps. 10,000, and
(iii) to delegate on the Board of Directors
the power to determine and establish the time,
form and conditions of the shares representing
the new capital stock to be issued, as well as
the payment of the fractions, if any.

In light of the above, on June 29, 2016, the
Board of Directors of Cablevisión completed
the implementation process to pay fractions
in cash and change the nominal value (of
the company’s shares) and change the nominal
value (of the company’s shares) and, therefore,
the capital stock of Cablevisión is now of
Ps. 197,300,000, represented by 19,730 shares,
of which i) 15,785 are Class A book entry
shares, with nominal value of Ps. 10,000 each
and entitled to 1 vote per share, and ii) 3,945
are Class B book entry shares, with nominal
value of Ps. 10,000 each and entitled to 1 vote
per share. At the same meeting of the Board
of Directors new shares were issued.

Subsequently, at the General Extraordinary
Shareholders’ Meeting held on June 30, 2016,
the shareholders decided to capitalize in full the
following accounts: (i) Paid-in Capital, in the
amount of Ps. 134,234,500, (ii) merger surplus,
in the amount of Ps. 2,894,151 and (iii) the
partial capitalization of the “Optional Reserve
to Maintain the Company’s Level of Capital
Expenditures and its Current Solvency Level” in
the amount of Ps. 865,571,349, thus increasing
the capital stock from Ps. 197,300,000 to Ps.
1,200,000,000 through the issuance of 100,270
new common book-entry shares with nominal
value of Ps. 10,000 and entitled to 1 vote per
share, of which 80,221 will be Class A common
book-entry shares and 20,049 will be Class B
common book-entry shares.

c. Other companies
During this year, the shareholders of ARTEAR
decided to distribute cash dividends for a
total of Ps. 110 million. As of the date of these
financial statements, the Company collected
all the dividends to which it was entitled based
on its equity interest.

During this year, the shareholders of IESA
decided to distribute cash dividends for a total
of Ps. 35.3 million. As of December 31, 2016,
the Company collected Ps. 31.7 million and
had a balance of Ps. 2.2 million for dividends
receivable, to which it is entitled due to its
equity interest.

223

Note 8

Balances and Transactions with Related Parties
The following table shows the breakdown of
the Company’s balances with its related parties:

Company

Item

December 31, 2016

December 31, 2015

Subsidiaries

SHOSA

VISTONE

CVB

CLC

AGEA

ARTEAR.

IESA

Radio Mitre

GCGC

CMD

GC MINOR

GC Services

Other Receivables

Debt

Trade Payables and Other

Debt

Dividends Receivable

Other Receivables

Trade Payables and Other

Other Receivables

Trade Payables and Other

Dividends Receivable

Other Receivables

Trade Payables and Other

Other Receivables

Trade Payables and Other

Other Receivables

Indirectly controlled

Cablevisión

Trade Payables and Other

PRIMA

AGR

UNIR

Impripost

Ferias y
Exposiciones S.A.

TRISA

Other Receivables

Debt

Trade Payables and Other

Other Receivables

Trade Payables and Other

Other Receivables

Trade Payables and Other

Other Receivables

Trade Payables and Other

125,271,186

(425,820)

5,989,835

(67,343)

2,160,068

1,876,323

115,835

(36,830)

2,449,031

(124,926)

50,000

17,211

(1,251,819)

7,502,032

(367,813,013)

(16,575)

3,396,157

(2,360)

1,635,675

128

(1,938,127)

2,432

(170,189,828)

(56,786)

(104,720,132)

(13,090,016)

11,311

104,018,497

(561,949)

4,658,835

(201,838)

669,635

10,741

(25,924)

2,952,480

(114,674)

14,10

(5,955)

(176,542)

36,300,000

(2,673)

1,158

(2,360)

2,283,074

128

(1,029,947)

224

The following table details the transactions
carried out by the Company with related parties
for the years ended December 31, 2016
and 2015:

Company

Item

December 31, 2016

December 31, 2015

Subsidiaries

AGEA

ARTEAR.

Vistone

CMD

SHOSA

Radio Mitre

CVB

GCGC

Management fees

Advertising

Management fees

Interest Expense

Services

Interest Income

Interest Expense

Management fees

Interest Income

Interest Expense

Services

Indirectly controlled

Cablevisión

Management fees

PRIMA

AGR

Impripost

UNIR

Services

Interest Expense

Interest Income

Services

Management fees

Services

Management fees

Services

Management fees

The fees paid to the Board of Directors and
the Upper Management of the Company for
the years ended December 31, 2016 and 2015
amounted to approximately Ps. 100 million
and Ps. 70 million, respectively.

18,000,000

(358,536)

57,600,000

(5,122,351)

539,837

(10,651,931)

7,950,000

(768,181)

(15,757,593)

74,400,000

(610,335)

(2,342,563)

(758,031)

15,600,000

(11,484)

8,400,000

18,000,000

(164,759)

44,400,000

(400,132)

(546,064)

54,021

(5,627,320)

2,280,000

1,887,014

(50,016)

(12,026,182)

77,120,000

(141,584)

311,170

(613,002)

19,200,000

(8,234)

1,560,000

(1,951)

225

Note 9

Terms and Interest Rates of Investments, Receivables and Liabilities

December 31, 2016

Other Investments
Without any established term (1)

Receivables
Without any established term (2)
Due
Within three months (4)
More than three months and up to six months

Liabilities (2)
Without any established term

Due

Within three months

More than three months and up to six months

Debt

Due
Within three months (3)
More than four years and up to five years

(1) Bearing interest at floating rate.
(2) Non-interest bearing.
(3) Bearing interest at fixed rate.
(4) Includes Ps. 2.4 million which bears interest
at a fixed rate, the remaining balance does not bear
any interest.

84,222,441

150,102,249

6,872,843

711,411

7,584,254

157,686,503

5,310,702

73,846,523

4,974,599

78,221,122

84,131,824

3,475,247

367,813,013

371,288,260

226

Note 10

Provisions and Other Contingencies

10.1 Regulatory Framework
a. SCI Resolution No. 50/10 approved certain
rules for the sale of pay television services.
These rules provide that cable television
operators must apply a formula to estimate their
monthly subscription prices. The price arising
from the application of the formula was to
be informed to the Office of Business Loyalty
(Dirección de Lealtad Comercial) between
March 8 and March 22, 2010. Cable television
operators must adjust such amount semi-
annually and inform the result of such
adjustment to said Office.

Even though Cablevisión, like other companies
in the industry, has strong constitutional
arguments to support its position, it cannot be
assured that the final outcome of this issue will
be favorable. Therefore, Cablevisión and/or
some of its subsidiaries may be forced to modify
the price of their pay television subscription,
a situation that could significantly affect
the revenues of their core business. This creates
a general framework of uncertainty over the
businesses of Cablevisión and/or some of
its subsidiaries that could significantly affect the
recoverability of their relevant assets and Grupo
Clarín S.A.’s assets related to its investment in
Cablevisión. Notwithstanding the foregoing,
as of the date of these financial statements, in
accordance with the decision rendered on
August 1, 2011 in re “LA CAPITAL CABLE
S.A. v/ Ministry of Economy-Secretariat of
Domestic Trade”, the Federal Court of Appeals
of the City of Mar del Plata has ordered the
SCI to suspend the application of Resolution
No. 50/10 with respect to all cable television

licensees represented by the Argentine Cable
Television Association (“ATVC”, for its
Spanish acronym). Upon being served on the
SCI and the Ministry of Economy on
September 12, 2011, such decision became
fully effective and may not be disregarded by
the SCI. The National Government filed
an appeal against the decision rendered by the
Federal Court of Appeals of Mar del Plata to
have the case brought before the Supreme
Court. Such appeal was dismissed and so the
National Government filed a direct appeal with
the Supreme Court, which was also dismissed.

On June 1, 2010, the SCI imposed a Ps. 5
million fine on Cablevisión alleging that it had
failed to comply with the information regime
set forth by Resolution No. 50/10, and invoking
the Antitrust Law to impose such penalty. The
fine was appealed and submitted to the National
Court of Appeals on Federal Administrative
Matters, Chamber No. 5, which decided to
reduce the fine to Ps. 300,000. Cablevisión
appealed this decision by filing an extraordinary
appeal with the Supreme Court of Argentina.

On March 10, 2011 SCI Resolution No. 36/11
was published in the Official Gazette. This
Resolution falls within the framework of SCI
Resolution No. 50/10. Resolution No. 36/11 sets
forth the parameters to be applied to the services
rendered by Cablevisión to its subscribers from
January through April 2011. These parameters
are as follows: 1) the monthly basic subscription
price shall be Ps. 109 for that period; 2) the price
of other services rendered by Cablevisión should
remain unchanged as of the date of publication
of the resolution; and 3) the promotional
benefits, existing rebates and/or discounts already
granted as of that same date shall be maintained.
The resolution also provides that Cablevisión
shall reimburse users for any amount collected
above the price set for that period.

The claim filed by Cablevisión seeking
the nullification of Resolution No. 50/2010
is currently pending before the Federal

227

Administrative Court of First Instance No. 7
of the City of Buenos Aires. This claim was
dismissed in view of the claim pending in the
City of Mar del Plata.

Subsequently, the SCI issued Resolutions
Nos. 65/11, 92/11, 123/11, 141/11, 10/11,
25/12, 97/12, 161/12, 29/13, 61/13, 104/13,
1/14, 43/14 and 93/14 pursuant to which
the SCI extended the effectiveness of Resolution
No. 36/11 up to and including September 2014,
and adjusted the cable television subscription
price to Ps.152. Cablevisión believes, however,
that given the terms under which the Federal
Court of the City of Mar del Plata granted
the preliminary injunction, that is, ordering the
SCI to suspend the application of Resolution
No. 50/10 with respect to all cable television
licensees represented by ATVC (among them,
Cablevisión and its subsidiaries), and also given
the fact that Resolutions No. 36/11, 65/11,
92/11, 123/11, 141/11, 10/11, 25/12, 97/12,
161/12, 29/13, 61/13, 104/13, 1/14, 43/14
and 93/14 merely apply Resolution No. 50/10,
Cablevisión continues to be protected by said
preliminary injunction, and, therefore, the
ordinary course of its business will not be affected.

On April 23, 2013, Cablevisión was served
notice of a decision rendered in re
“Ombudsman of Buenos Aires v. Cablevisión
S.A. on Complaint for the protection of
constitutional rights Law 16,986 (Motion for
Preliminary Injunction)” pending before
Federal Court No. 2, Civil Clerk’s Office No. 4
of the City of La Plata in connection with
the price of cable television subscriptions,
whereby the court imposed a cumulative daily
fine of Ps. 100,000 per day on Cablevisión.

Cablevisión appealed the fine on the grounds
that Resolution No. 50/10 issued by Mr.
Moreno, as well as its extensions and/or
amendments were suspended, as mentioned
above, by an injunction with respect to
Cablevisión and its branches and subsidiaries
prior to the imposition of the fine; pursuant
to the collective injunction issued by the
Federal Court of the City of Mar del Plata on
August 1, 2011 in re “La Capital Cable and
Others v. National Government and Others on
Preliminary Injunction”. That injunction
suspended the application of all the criteria set
by the Secretariat of Domestic Trade under
Mr. Guillermo Moreno.

The Federal Court of Appeals of the City of
La Plata reduced the fine to Ps. 10,000 per day.
Cablevisión filed an appeal against that decision
in due time and form. On October 16, 2013,
the Court of Appeals dismissed the appeal filed
by Cablevisión. As of the date of these financial
statements, Cablevisión had settled the fine
in the amount of Ps. 1,260,000 and compliance
was recorded in the file.

On June 11, 2013, Cablevisión was served
notice of a resolution rendered in the above-
mentioned case; whereby the court ordered the
appointment of an expert overseer (perito
interventor) specialized in economic sciences
to: (i) verify whether or not the invoices
corresponding to the basic cable television
subscription issued by Cablevisión to subscribers
domiciled in the Province of Buenos Aires,
are actually prepared at the headquarters located
at Gral. Hornos 690, and/or at Cablevisión’s
branch offices, precisely detailing that process,
(ii) identify the individuals responsible for
that area, (iii) determine whether or not the
administrative actions tending towards the
effective compliance with the injunction issued
on that case are underway, and (iv) identify
the senior staff of Cablevisión that must order
the invoice issuance area to prepare the invoices
as decided under that injunction.

Cablevisión timely appealed the appointment
of said expert on the same grounds stated above.
This appeal is also pending before the Federal
Court of Appeals of the City of La Plata.

For the purposes of enforcing the injunction,
the court issued letters rogatory to the
competent judge of the City of Buenos Aires.
Upon the initiation of that proceeding, both
the National Court on Federal Administrative
Matters and the National Court on Federal
Civil and Commercial Matters declined
jurisdiction to enforce the injunction ordered
by the Federal Judge of La Plata. Cablevisión
has appealed the decision in connection
with the lack of jurisdiction in due time
and form. Chamber No. 1 of the National
Court of Appeals on Federal Civil and
Commercial Matters confirmed the appealed
decision. Accordingly, Cablevisión will file an
extraordinary appeal in due time and form
to have the case decided by the Supreme Court
of Argentina.

228

It should be noted that, in light of the
corporate reorganization of Cablevisión, both
parties requested the suspension of the
procedural periods for 180 days. The judge
granted such request. Therefore, the procedural
periods were suspended until December 11,
2014. Given the decision rendered by the
Supreme Court of Argentina in re “Municipality
of Berazategui v. Cablevisión” mentioned
below, the procedural periods remain suspended
until the Federal Court of Mar del Plata
renders a decision thereon.

After the Federal Court of the City of Mar
del Plata issued its injunction, several Municipal
Offices of Consumer Information (“OMIC”,
for its Spanish acronym) and several individuals
filed claims requesting that Cablevisión comply
with Resolution No. 50/10 and the subsequent
resolutions that extended its effectiveness.
In some cases, preliminary injunctions were
granted. In every case, Cablevisión appealed
such preliminary injunctions alleging that
Resolution No. 50/10, as amended, and/or
the subsequent resolutions that extended its
effectiveness, had been suspended with respect
to Cablevisión, its branches and subsidiaries
prior to the issuance of such preliminary
injunctions.

On September 23, 2014, the Supreme
Court of Argentina rendered a decision in re
“Application for judicial review brought
by the defendant in the case Municipality
of Berazategui v. Cablevisión S.A. on claim
for the protection of constitutional rights
(acción de amparo)” and ordered that the cases
related to these resolutions continue under
the jurisdiction of the Federal Court of
Mar del Plata that had issued the decision on
the collective action in favor of ATVC.

Decisions made on the basis of these
consolidated financial statements should
consider the eventual impact that the
above-mentioned resolutions might have on

Cablevisión and its subsidiaries, and the
Company’s consolidated financial statements
should be read in light of such uncertainty.

b. Pursuant to the Antitrust Law and to
Broadcasting Law No. 22,285, the transactions
carried out on September 26, 2006 that
resulted in an increase in the indirect interest
the Company held in Cablevisión to 60%,
Cablevisión’s acquisition of 98.5% of
Multicanal and 100% of Holding Teledigital,
and Multicanal’s acquisition of PRIMA
(from PRIMA Internacional (now CMD)),
required the authorization of the CNDC
(validated by the SCI), and the COMFER.
On October 4, 2006, the Company, Vistone,
Fintech, VLG and Cablevisión, as purchasers,
and AMI CV Holdings LLC, AMI Cable
Holdings Ltd. and HMTF-LA Teledigital
Cable Partners LP, as sellers, filed for
the approval of the acquisition. After several
requests for information, the SCI issued
Resolution No. 257/07, with a prior opinion
of the CNDC in favor of the approval of
the above-mentioned transactions and after
consulting the COMFER and the SECOM,
which did not raise any objections. The
Company was served notice in this respect
on December 7, 2007. Such Resolution
was appealed by five entities. As of the date
of these financial statements, the CNDC
has dismissed the five appeals filed against the
above-mentioned resolution. Four of those
entities filed direct appeals before the judicial
branch, but they were all dismissed.

On June 11, 2008, Cablevisión was served
with a decision of the National Court of
Appeals on Federal Civil and Commercial
Matters revoking a decision rendered by
the CNDC on September 13, 2007, whereby
such agency had dismissed a claim filed by
Gigacable S.A. prior to the December 7, 2007
decision referred to above. The Court of
Appeals revoked CNDC’s decision only with
respect to matters relating to the conduct of
Cablevisión and Multicanal prior to CNDC’s
authorization of the transactions on December
7, 2007, and ordered an investigation to
determine whether a fine should be imposed
on Cablevisión and Multicanal due to such
conduct. As of the date of these financial
statements, Cablevisión has filed its response,
which is pending analysis by such agency.

229

c. On December 15, 2008, the shareholders of
Cablevisión approved the merger of Multicanal,
Delta Cable S.A., Holding Teledigital, Teledigital,
Televisora La Plata Sociedad Anónima,
Pampa TV S.A., Construred S.A. and Cablepost
S.A. into Cablevisión, whereby, effective as
of October 1, 2008, Cablevisión, as surviving
company, became the universal successor
to all of the assets, rights and obligations of the
merged companies.

That process was granted administrative
approval by the CNV and was registered with
the Argentine Superintendency of Legal
Entities (IGJ) under No. 9,448, Book 79
Volume – Stock Companies on June 7, 2016.

On September 8, 2009, Multicanal was served
with CNDC Resolution No. 106/09, dated
September 4, 2009, whereby the CNDC
ordered an audit to articulate and harmonize
the several aspects of Resolution No. 577/09
issued by the COMFER, whereby it had
rejected the merger of Cablevisión and
Multicanal, with Resolution No. 257/07 issued
by the Secretariat of Domestic Trade. Resolution
No. 106/09 also sets forth that the notifying
companies shall not, from the enactment
thereof and until the end of the audit and/or
resolution of the CNDC, be able to remove
or replace physical or legal assets.

Notwithstanding the required filings made
by Cablevisión and its shareholders on
December 7, 2007 (date on which the SCI
granted authorization) to prove that they were
complying with the commitment agreed with
the CNDC, on September 23, 2009, the
SCI issued Resolution No. 641, whereby it
ordered the CNDC to verify compliance with
the parties’ proposed commitment by visiting
the parties’ premises, requesting reports,
reviewing documents and information and
carrying out hearings, among other things.

On December 11, 2009, Cablevisión notified
the CNDC of the completion and corresponding
verification of the fulfillment of the voluntary
undertakings made by Cablevisión at the time
of the enactment of SCI Resolution No.
257/07. On December 15, 2009, Chamber
No. 2 of the National Court of Appeals on
Federal Civil and Commercial Matters issued a
preliminary injunction in re “Grupo Clarín S.A.
v. Secretariat of Domestic Trade and other on

preliminary injunctions” (case 10,506/09),
partially acknowledging the preliminary
injunction requested by Grupo Clarín, and
instructing the CNDC and the SCI to
notify Grupo Clarín whenever their own
verification of Cablevisión’s fulfillment of its
undertakings had been concluded, regardless
of the result. Should such agencies have any
observations, they should notify Grupo Clarín
within a term of 10 days. On the same date,
the CNDC issued Resolution No. 1,011/09
whereby it deemed Cablevisión’s voluntary
undertakings unfulfilled and declared the
rescission of the authorization granted under
Resolution No. 257/07.

On December 17, 2009, the National Court
of Appeals on Federal Commercial-Criminal
Matters, Chamber A, decided to suspend
the term to appeal Resolution No. 1,011/09
until the main case was transferred back to the
CNDC, considering it had been in such
court since December 16, 2009.

On December 17, 2009, the CNDC notified
Cablevisión of the initiation of the motion
for execution of Resolution No. 1,011/09. On
December 18, 2009, Chamber No. 2 of the
National Court of Appeals on Federal Civil and
Commercial Matters issued an injunction in
re “Grupo Clarín S.A. v. Secretariat of Domestic
Trade and other on preliminary injunctions”,
which suspended the effects of Resolution No.
1,011/09 until the notice set forth in the
injunction of December 15, 2009 was served.
Accordingly, the CNDC served notice to
Cablevisión by means of Resolution No.
1,101/09.

On December 30, 2009, Chamber No. 2
of the National Court of Appeals on Federal
Civil and Commercial Matters issued a
preliminary injunction in re “Grupo Clarín S.A.
v. Secretariat of Domestic Trade and other
on preliminary injunctions”, partially
acknowledging Grupo Clarín’s request and
suspending the term for Grupo Clarín to respond
to Resolution No. 1,101/09 until Grupo Clarín
is granted access to the administrative
proceedings related to the charges brought by the
CNDC in its Opinion No. 770/09 (on which
Resolution No. 1,011/09 was based).

On February 19, 2010, Cablevisión requested
the nullification of the notice, and as a default

230

argument, submitted the response requested
under Resolution No. 1,101/09. On February
26, 2010, the National Court of Appeals on
Federal Commercial-Criminal Matters approved
the recusation filed by Cablevisión and excluded
the Secretariat of Domestic Trade from the
proceedings.

On March 3, 2010, the Argentine Ministry
of Economy and Public Finance issued
Resolution No. 113 (subscribed by the Minister
of Economy, Dr Amado Boudou) rejecting
the request for the nullification of Resolution
No. 1,011/09, the requests for abstention
and excusation of certain officials, and all the
evidence produced in connection with such
request for nullification. The voluntary
undertakings made by Cablevisión under
Resolution No. 257/07 were deemed unfulfilled,
thus declaring the rescission of the authorization
granted under such resolution. The parties
involved were ordered to take all necessary
actions to comply with such rescission within a
term of six months, and to inform the CNDC
about the progress made in that respect on
a monthly basis. Such resolution was appealed
in due time and form. The appeal was granted
without staying the execution of judgment.

On April 20, 2010, Chamber No. 2 of the
National Court of Appeals on Federal Civil and
Commercial Matters granted the appeal filed
by Grupo Clarín S.A. in re “Grupo Clarín on
delay in the appeal of the proceedings”, and
decided that the appeal granted by the CNDC
to Grupo Clarín S.A. against Resolution No.
113/10 had the effect of staying such resolution.
The National Government filed an appeal
asking that the Court of Appeals revoke its own
decision with respect to the effect granted
to the April 20 decision, and that it decline its
jurisdiction. It also filed an appeal to have
the case brought before the Supreme Court.
Both appeals were dismissed. Chamber No. 2
requested the administrative file to consider
the appeal and render its decision.

On September 17, 2015, the Court rendered
a decision in favor of Cablevisión, revoking
Resolution No. 113/10 in its entirety.
Both parties were served with the decision on
that same date.

The National Government - Ministry of
Economy filed an appeal to have the case

brought before the Supreme Court, which was
substantiated in February 2016.

Subsequently, in March 2016, the appeal filed
by the National Government - Ministry of
Economy and Public Finance was dismissed.
Therefore, SCI Resolution No. 257/07 and
the effects of the authorization are in full force
and effect to date.

On March 31, 2016, the National Government
- Ministry of Economy and Public Finance
filed a direct appeal before the Supreme Court
of Argentina.

Subsequently, the National Government
abandoned the Direct Appeal and the Supreme
Court deemed it abandoned on June 7, 2016.
Therefore, MECON Resolution No. 113/10 is
considered to be null and void.

d. On May 31, 2012, Cablevisión was served
notice of Resolution No. 16,819 dated May 23,
2012 whereby the Argentine Securities
Commission (CNV, for its Spanish acronym)
ordered the initiation of summary proceedings
against Cablevisión and its directors, members
of the Supervisory Committee and the Head
of Market Relations for an alleged failure
to comply with the duty to inform. The CNV
considers that Cablevisión failed to comply
with its duty to inform because the investor
community was deprived of its right to
become fully aware of the grounds of a decision
rendered by the Federal Court of Mendoza
and the scope of the powers granted by that
court to the co-administrator appointed
in re “Supercanal S.A. v. Cablevisión S.A. on
protection of constitutional rights”, in addition
to the fact that other self-regulated authorities
were allegedly not notified of the information
furnished by Cablevisión. On June 25, 2012,
Cablevisión filed a response requesting
that its defenses be sustained and all charges
dismissed. On February 6, 2014 Cablevisión
submitted the legal brief for the purpose
of discussing the evidence submitted under
File No. 171/2012. Now the CNV’s Board
of Directors has to render its decision.
Cablevisión and its legal advisors believe that
the company has strong arguments in its favor.
Nevertheless, Cablevisión cannot assure that
the outcome of the said summary proceedings
will be favorable to Cablevisión.

231

e. Pursuant to CNV Resolution No. 16,834
dated June 14, 2012 notified to the Company
on June 27, 2012, the CNV ordered the
initiation of summary proceedings against the
Company and the members of its Board of
Directors, Supervisory Committee and Audit
Committee in office at the time of the
occurrence of the events that motivated the
proceedings (September 19, 2008) for alleged
failure to comply with the duty to inform.
Under said Resolution, the CNV argues that
the Company allegedly failed to comply with
the duty to disclose the filing of a claim
against it entitled “Consumidores Financieros
Asociación Civil para su defensa and other
v. Grupo Clarín on/Ordinary”, which the
CNV considers relevant. On July 25, 2012,
Cablevisión filed a response petitioning that its
defenses be sustained and that all charges against
it be dismissed. The legal brief on the evidence
has been submitted. The Company and its
legal advisors believe that the company has
strong arguments in its favor. Nevertheless, the
Company cannot assure that the outcome of
said summary proceedings will be favorable.

f. The Executive Branch of Uruguay issued
Decree No. 73/012, published in the Official
Gazette on March 16, 2012, whereby it
expressly repealed Decree No. 231/011,
which had revoked certain signals’ broadcast
frequencies. However, the new decree ratified
and repeated - virtually in identical terms -
the decree that was being repealed, and added
certain provisions that caused further detriment
to the two affected companies with which
a subsidiary of Cablevisión has contractual
arrangements in place. Consequently, on
March 23, 2012 the affected companies filed
an appeal requesting that Decree No. 73/012 be
revoked. The appeal is still pending resolution.

In May 2012, the aforesaid companies brought
a legal action with the Court in Administrative
Litigation Matters requesting the nullification
of the resolution and the suspension of its
execution. This motion to suspend the execution
of the challenged resolution was brought as a
separate case, and progressed through the
corresponding instances. The Office of the
Attorney General for Administrative Litigation
Matters, in its opinion No. 412/013 advised the
Court on Administrative Litigation Matters to
grant the motion to suspend the execution of
the challenged resolution for formal reasons, but

the Court dismissed the motion of suspension.
Notwithstanding the foregoing, as of the date
of these financial statements, the governmental
authorities have not yet enforced the decree.

On September 30, 2014, the Court on
Administrative Litigation Matters through its
decisions No. 416/2014 and No. 446/2014
revoked for formal reasons Decrees No. 73/012
and No. 231/011, respectively.

On March 9, 2015, Decree No. 82/015 was
published in the Official Gazette, whereby
the Executive Branch 1) repealed Decree No.
73/012; 2) 16 common stations are awarded to
be held in common (the same stations) by
BERSABEL S.A. and VISION SATELITAL
S.A. for a term of 15 years: Two of the 16
stations are awarded on a secondary basis, which
means that they may be exposed to interferences
and they do not have the right to bring any
claim in connection thereto; 3) use of existing
stations must cease within 18 months of their
award to mobile service operators; 4) both
companies are expressly authorized to increase
the number of TV signals (stations) included
in their respective services making use of
digitization techniques; 5) both companies
shall submit before the Communication
Services Regulatory Agency (“URSEC”, for its
Spanish acronym), within a fixed term of 60
calendar days as from the date of publication
of the Decree, a technical plan for the
migration and release of stations, which plan
shall be assessed and approved by such agency
(such plan was submitted on May 7, 2015);
6) the Bidding Terms governing the bid
for frequency bands that were owned by both
companies shall include an economic
compensation mechanism for both companies
to cover the expenses incurred in adapting
their systems to the new stations awarded to
them, in the amount of USD 7,000,000.

Even though both companies’ request for the
annulment of Decree No. 153/012 was granted
for formal reasons (failure to serve prior notice)
by the Court on Administrative Litigation
Matters (decision 455 of June 11, 2015), this
decision does not change prior considerations
about the terms of Decree No. 82/015 with
respect to both companies due to the fact
that Decree No. 305/015 (which substituted
Decree No. 153/012) confirmed the allocation
of channels 21 through 36 (512 MHz - 608

232

MHz) and 38 through 41 (614 MHz - 638
MHz), of 6 MHz each, in the UHF band
exclusively for rendering accessible, free,
digital broadcast television services all over the
country, except for channels 35 (596-602
MHz), 36 (602-608 MHz) and 38 through
41 (614-638 MHz) only in the geographic
area for which BERSABEL S.A. and VISION
SATELITAL S.A. had received authorization,
which will be used solely for rendering
television services to subscribers through the
codified UHF system, as it had been previously
and expressly stated in Section 5 of Decree
No. 82/015 (which repealed and amended the
language of Section 1 of the above-mentioned
Decree No. 153/012).

g. On June 4, 2012, the Federal Court of
Appeals of Rosario partially confirmed
SCI Resolution No. 219/2010, whereby the
Secretariat of Domestic Trade found that
Cablevisión and Multicanal had engaged in
market sharing practices in connection
with the paid-television service in the City of
Santa Fe and reduced the fine imposed on
each of the companies involved from Ps. 2.5
million to Ps. 2 million. However, this
decision is not yet final, because Cablevisión
and Multicanal and the Ministry of Economy
filed appeals, which are still pending before
that Court of Appeals. On October 21, 2014,
the Argentine Supreme Court dismissed
the appeals; therefore, Resolution No. 219/10
became final.

was partially granted by the Federal Court of
Appeals of Paraná.

i. Cablevisión, by itself and as successor
of Multicanal’s operations after the merger, is a
party to several administrative proceedings
under the Antitrust Law, facing charges of
anticompetitive conduct, including territorial
division of markets, price discrimination,
abuse of dominant position, refusal to deal
and predatory pricing, as well as a proceeding
filed by the Cámara de Cableoperadores
Independientes (Chamber of Independent
Cable Operators), challenging the transactions
consummated on September 26, 2006. While
Cablevisión believes that its conduct and
that of Multicanal have always been within
the bounds of the Argentine Antitrust Law
and regulations and that their positions in each
of these proceedings are reasonably grounded,
it can give no assurance that any of these cases
will be resolved in its favor.

j. On January 22, 2010, Cablevisión was served
notice of CNDC Resolution No. 8/10 issued
within the framework of file No. 0021390/2010
entitled “Official Investigation of Cable
Television Subscriptions (C1321)”. Pursuant
to this Resolution, Cablevisión, among other
companies, was ordered to refrain from
conducting collusive practices and, particularly,
from increasing the price of cable television
subscriptions for a term of 60 days, counted as
from the date compliance with all required
notices is certified in the records of the case.
As established by that Resolution, companies
that have already increased the price of the
subscriptions shall return to the price applicable
in November 2009 and maintain such price
for the above-mentioned term.

233

Cablevisión appealed both resolutions in due
time and form and their effects were suspended
by an injunction issued by Chamber No. 2 of
the National Court of Appeals on Federal Civil
and Commercial Matters at the request of
Cablevisión. The National Government filed an
appeal with the Supreme Court against this
decision, and the appeal has been dismissed.

The National Government filed an appeal with
the Supreme Court of Argentina against the
decision rendered by Chamber No. 2, which
was granted, but it was dismissed by the
Supreme Court of Argentina.

k. On October 28, 2010, Cablevisión was
served notice of the National Administration of
Domestic Trade’s resolutions imposing two fines
of Ps. 5 million each, for allegedly failing to
observe the typographic character requirements
under applicable regulations (Resolution
906/98) when informing its subscribers of the
increase in the price of their cable television
subscriptions. Cablevisión appealed the fines on
November 12, 2010 because it believes it has
strong grounds in its favor. However, it cannot
assure that the outcome will be favorable. One
of the files was assigned No. 1280 and is
pending before Chamber No. 1 of the Federal
Administrative Court of Appeals, and the other
one was assigned No. 1,278 and is pending
before Chamber No. 5 of the Federal
Administrative Court of Appeals.

l. The litigation brought before the Civil,
Commercial, Mining and Labor Court of the
City of Concarán, Province of San Luis, in
early 2007 in re “Grupo Radio Noticias SRL v.
Cablevisión and others”, is still pending before
the Federal Court in Administrative Matters
No. 2.

to such claim and believes it is very unlikely that
it will be admitted. The claimant has abandoned
the claim it had brought, and the claimant’s
attorney must provide evidence of his attorney
powers.

m. The Government of the City of Mar del
Plata enacted Ordinance No. 9163, governing
the installation of cable television networks.
Such ordinance was amended and restated by
Ordinance No. 15,981 dated February 26,
2004, giving cable companies until December
31, 2007 to adapt their cable networks to the
new municipal requirements. The ordinance sets
forth that in those areas where street lighting
has underground wiring, cable television
networks are to be placed underground. In
this sense, the Executive Department of the
Municipality of General Pueyrredón has
submitted to the Municipal Council a proposed
ordinance extending the term provided until
December 31, 2015. Such ordinance is ready
for discussion by legislators. Even though
the ordinance provides for certain penalties that
may be imposed, the City has not imposed
such penalties to cable systems that are not in
compliance with such ordinance.

n. On November 27, 2012 the National
Administration of Domestic Trade served
Cablevisión with Resolution No. 308/2012,
whereby it imposed a Ps. 5 million fine
on that company alleging that it had failed to
comply with Section No. 4 of the Antitrust
Law (increase in the subscription price of cable
television services/wrongful information
provided by Customer Service, which informed
by mail that SCI Resolution No. 50/10 and
the supplementing resolutions are suspended on
grounds of unconstitutionality, when in fact
they have been suspended by an injunction).
On December 11, 2012 Cablevisión appealed
Resolution No. 308/2012. The administrative
file No. S01:0312056/2011 was sent by the
National Administration of Domestic Trade to
the National Court of Appeals on Federal
Administrative Matters. It is now pending
before Chamber No. 1 in re “Cablevisión SA
v. DNCI Res. 308/12 and Other” (File 140/13).
A decision has not been rendered yet.

The purpose of that claim was to challenge
the share transfers mentioned in Note 10.1.c.
and to request the revocation of Cablevisión’s
broadcasting licenses. Cablevisión has responded

Cablevisión and its legal advisors believe that the
company has strong arguments in its favor.
Nevertheless, Cablevisión cannot assure that the
revocation of the fine will be resolved in its favor.

234

o. On July 5, 2013, the National
Administration of Domestic Trade served notice
to Cablevisión of Resolution No. 134/2013,
whereby it imposed a fine of Ps. 500,000 for
breach of Section 2 of Resolution ex S.I.C.
y M. No. 789/98, which regulates the Business
Loyalty Law No. 22,802. Cablevisión
appealed that resolution on July 16, 2013.
The administrative file was sent by the
National Administration of Domestic Trade to
the National Court of Appeals on Federal
Administrative Matters. It is now pending
before Chamber No. 3 in re “Cablevisión SA
v. DNCI Res. 134/13 and Other” (File
36044/13). On May 20, 2014, Chamber No. 3
partially granted the appeal filed by Cablevisión
and reduced the fine to Ps. 300,000 and ordered
that each party shall bear its own legal costs.
On June 9, 2014, Cablevisión filed an appeal
with the Argentine Supreme Court. On
September 18, 2014, Cablevisión was served
notice of the extraordinary appeal filed by the
National Government, and on October 2, 2014
that company filed a response. On October 9,
2014, the Chamber dismissed both appeals.

On October 08, 2010, the National
Administration of Domestic Trade served
notice to Cablevisión of Resolution No.
697/2010, whereby it imposed a fine
of Ps. 500,000 for breach of Section 21 of
the Business Loyalty Law No. 22,802.
Cablevisión appealed that resolution on October
26, 2010. The administrative file was sent by
the National Administration of Domestic Trade
to the National Court of Appeals on Federal
Administrative Matters. It is now pending before
Chamber No. 3 in re “Cablevisión SA v. DNCI
Res. 697/2010 (File S01:80822/10) and Other”
(File 1,277/2011). On December 29, 2011
the Court of Appeals dismissed the appeal filed
by Cablevisión, and imposed court costs on
Cablevisión. On February 22, 2012, Cablevisión
filed an appeal with the Argentine Supreme
Court. The appeal was dismissed by the
Chamber on April 10, 2012. On April 26, 2012,
Cablevisión filed an appeal against the above-
mentioned dismissal. The Supreme Court of
Argentina granted the appeal and revoked
the decision against which Cablevisión had filed
the appeal with legal costs to be borne by the
National Administration of Domestic Trade, and
ordered that the case be sent back to the court
of first instance for it to render a new decision
based on the precedent indicated in its ruling.

p. On March 16, 2012, CNV issued Resolution
No. 16,765 whereby it ordered the initiation
of summary proceedings against Cablevisión, its
directors and members of the Supervisory
Committee for an alleged failure to comply with
the duty to inform. The CNV considers that
Cablevisión failed to comply with its duty to
inform because the investor community was
deprived of its right to become fully aware of the
Decision rendered by the Supreme Court of
Argentina in re "Application for judicial review
brought by the National Government Ministry of
Economy and Production of the case Multicanal
S.A. and other v/CONADECO Decree No.
527/05” and other, and also considers that
Cablevisión did not disclose certain issues related
to the information required by the CNV in
connection with its Class 1 and 2 Noteholders’
Extraordinary Meetings held on April 23, 2010.
On April 04, 2012, that company filed a
response requesting that its defenses be sustained
and that all charges against it be dismissed. The
discovery stage has been closed and the company
submitted the legal brief. Cablevisión and its legal
advisors believe that the company has strong
arguments in its favor. Nevertheless, Cablevisión
cannot assure that the outcome of said summary
proceedings will be favorable.

q. On August 28, 2015, Cablevisión was
served notice of Resolution No. 17,769 dated
August 13, 2015 whereby the CNV ordered
the initiation of summary proceedings against
Cablevisión and its directors, members of
the Supervisory Committee and the Head of
Market Relations for an alleged delay in the
submission of the required documentation. The
CNV considers that Cablevisión failed to
comply with effective regulations because it filed
certain documentation outside the regulatory
term set by CNV rules (as restated in 2013, as
amended). Cablevisión, as well as its directors,
members of the Supervisory Committee and
Head of Market Relations filed a response in
due time and form requesting that its defenses
be sustained and all charges dismissed.
Cablevisión and its legal advisors believe that
the company has strong arguments in its favor.
Nevertheless, Cablevisión cannot assure that
the outcome of the said summary proceedings
will be favorable to Cablevisión. On January 20,
2016, the preliminary hearing was held
pursuant to Section 138 of Law No. 26,831 and
Article 8, Subsection b.1. of Section II, Chapter
II, Title XIII of the Regulations (T.R. 2013).

235

10.2 Claims and Disputes with Governmental

Agencies
a. In connection with the decisions made at the
Company’s Annual Ordinary Shareholders’
Meeting held on April 28, 2011, on September
1, 2011 the Company was served with a
preliminary injunction in re “National Social
Security Administration v. Grupo Clarín S.A.
re ordinary proceeding” whereby the Company
may not in any way dispose, in part or in whole,
of the Ps. 387,028,756 currently recorded
under the retained earnings account, other than
to distribute dividends to the shareholders.

On the same date, the Company was served
with a claim brought by Argentina’s National
Social Security Administration requesting the
nullity of the decision made on point 7
(Appropriation of Retained Earnings) of the
agenda of the Annual Ordinary Shareholders’
Meeting held on April 22, 2010. As of the date
of these financial statements, the Company
has duly answered the complaint, the parties
have produced evidence and made allegations.

On November 1, 2011, the CNV issued
Resolution No. 593, which provides that at
shareholders’ meetings in which financial
statements are considered shareholders must
expressly decide to, either distribute as
dividends any retained earnings that are not
subject to distribution restrictions and that
may be disposed of pursuant to applicable law
or capitalize such retained earnings and issue
shares, or appropriate them to set up reserves
other than legal reserves, or a combination
of the above.

On July 12, 2013 the Company was served
notice of Resolution No. 17,131; dated as
of July 11, 2013 whereby the CNV declared
that the administrative effects of the decisions
adopted at the Annual General Ordinary
Shareholders’ Meeting held on April 25,
2013 were irregular and ineffective, based on
allegations that are absolutely false and
irrelevant. According to the Company and its
legal advisors, Resolution No. 17,131 is, among
other things, null and void, because it lacks
sufficient grounds and its enactment is a clear
abuse of authority and a further step in the
National Government’s attempt to intervene in
the Company. On October 11, 2013 Chamber
No. 5 of the National Court of Appeals
on Federal Administrative Matters issued a

In August 2013 the Company was served with
a nullification claim brought by Argentina’s
National Social Security Administration relating
to the Annual Ordinary Shareholders’ Meeting
held on April 28, 2011 whereby it requested the
nullity of all the decisions made at such meeting
and, as a default argument, the nullity of
the decisions made on points 2, 4 and 7 of that
meeting’s agenda, as well as the nullity of the
decisions made at the Extraordinary Meetings of
Class A, B and A and B Shareholders. As of the
date of these financial statements, the Company
had duly answered the complaint.

On September 17, 2013 the Company
was served with a nullification claim brought
by Argentina’s National Social Security
Administration relating to the Annual Ordinary
Shareholders’ Meeting held on April 26, 2012
whereby it requested the nullity of all the
decisions made at such meeting and, as a default
argument, the nullity of the decisions made
on points 8 and 4 of that meeting’s agenda,
as well as the nullity of the decisions made at
the Extraordinary Meetings of Class A, B
and A and B Shareholders. As of the date of
these financial statements, the Company
had duly answered the complaint.

On March 21, 2014, the Company was
served notice of a claim brought by Argentina’s
National Social Security Administration in
re “National Social Security Administration
v. GRUPO CLARÍN S.A. on Ordinary
Proceeding” File No. 74,429, pending before
the National Court of First Instance on
Commercial Matters No. 17, Clerk’s Office
No. 34. This claim seeks to nullify and
challenge the corporate decisions made at the
Shareholders’ Meeting held on April 25, 2013
and those made at the Board of Directors’
Meeting held on April 26, 2013. As of the date
of these financial statements, a response
to the claim had been filed.

236

On September 16, 2014, the Company
received a communication from its controlling
shareholder, GC Dominio S.A., whereby that
company informed that it had been summoned
to court as a third party in re “National
Social Security Administration v. Grupo Clarín
S.A. on Ordinary Proceeding”, pending
before the National Court of First Instance on
Commercial Matters No. 17, Clerk’s Office
No. 33. As of the date of these financial
statements and as informed by GC Dominio
S.A., that company has filed a response to the
above-mentioned claim.

According to the Company and its legal
advisors, the outstanding claims requesting the
nullification of the Shareholders’ Meetings
have no legal grounds. Therefore, they believe
that the Company will not have to face adverse
consequences in this regard.

b. The Argentine Federal Revenue Service
(“AFIP”) served the subsidiary CIMECO with
a notice challenging its income tax assessment
for fiscal years 2000, 2001 and 2002. In
such notice, the AFIP challenged mainly the
deduction of interest and exchange differences
in the tax returns filed for those years. If
AFIP’s position prevails, CIMECO’s maximum
contingency as of December 31, 2016 would
amount to approximately Ps. 12.3 million for
taxes and Ps. 42.7 million for interest.

CIMECO filed a response, which was dismissed
by the tax authorities. The tax authorities
issued their own official assessment and imposed
penalties. CIMECO appealed the tax
authorities’ resolution before the National Tax
Court on August 15, 2007.

During 2011, the AFIP served CIMECO with
a notice stating the income tax charges assessed
for years 2003 through 2007 and ordering the

initiation of summary proceedings. The AFIP’s
assessment shows a difference in its favor in the
Income Tax liability for the periods indicated
above for an amount in excess of the amount
that had been estimated originally, as a result of
the method used to calculate certain deductions.
CIMECO responded to the assessment rejecting
all of the adjustments and requesting that
the proceedings be rendered without effect and
filed, with no further actions to be taken.

CIMECO and its legal and tax advisors believe
CIMECO has strong grounds to defend
the criteria adopted in their tax returns and that
AFIP’s challenges will not be admitted by the
Federal Tax Court. Accordingly, CIMECO
has not booked an allowance in connection with
the effects such challenges may have.

c. On September 10, 2010, the AFIP served
TRISA with a notice with objections to
its income tax assessment, with respect to the
application of the withholding regime set
forth under the section following section 69
of the Income Tax law, for fiscal years 2004,
2005 and 2006. If AFIP’s position prevails,
TRISA’s contingency would amount to
approximately Ps. 28.9 million, out of which
Ps. 9.3 million would correspond to taxes
on dividend payments made during those years,
Ps. 6.5 million to a 70% fine on the omitted
tax, and Ps. 13.1 million to late-payment
interest, calculated as of the date of the AFIP’s
tax assessment.

TRISA and its legal and tax advisors believe
that TRISA has strong grounds to
defend its position and that AFIP’s challenges
will not be admitted by the Federal Tax
Court. Accordingly, TRISA has not booked

237

a provision in connection with the effects such
challenges may have.

d. On August 13, 2012, the parent company
GC Dominio S.A. was served notice of a claim
brought by the Argentine Superintendency of
Legal Entities (IGJ) whereby that agency
seeks to annul the registration with the Public
Registry of Commerce of the appointment of
GC Dominio S.A.’s authorities, approved at the
Shareholders’ Meeting held on May 17, 2011.
The claim is pending before the Federal Court
of First Instance on Commercial Matters No.
25, Clerk’s Office No. 49 (“Inspección General
de Justicia v. Dominio S.A. on/Ordinary”, File
No. 58652). The claim brought by the IGJ
seeks to annul the registration with IGJ of the
appointment of GC Dominio S.A.’s authorities,
approved at the Annual General Ordinary
Shareholders’ Meeting of GC Dominio held on
May 17, 2011. The appointment was registered
with the IGJ on April 23, 2012 under No.
7147, Book No. 59 of Share Companies.
According to the IGJ and as the case file is said
to show, GC Dominio has allegedly failed to
comply with certain regulations applicable
to foreign shareholders upon registration of the
appointment of authorities. Also within the
framework of this claim, the Court issued an
injunction in favor of the IGJ ordering that
the existence of this claim be duly noted. The
Chamber has confirmed the decision to order
that the existence of this claim be duly noted.

GC Dominio S.A.’s legal advisors have strong
grounds to argue that the resolution of
IGJ’s claim seeking the de-registration of the
appointment of authorities has serious defects
and infringes the guarantees of reasonableness
and due process; a principle that derives
from the constitutional guarantee of defense in
court, which entails the right to be heard and
to produce evidence to contradict a claim.
GC Dominio S.A. has appealed such injunction
because it considers that the IGJ has not shown
that its legal arguments are, at least, plausible.

pressed charges against the Company and its
directors for alleged money laundering activities
related to the trading of shares between the
Company and some of its subsidiaries. The
Company has appointed defense attorneys and
has requested a copy of the file to understand
the details of the charges. The FIU is acting
as plaintiff in this case. One of the Company’s
directors made a spontaneous appearance
and filed a response and produced documentary
evidence. Certain charges pressed by
Representative Di Tullio were also added to
the case. In addition, the Prosecutor requested
that the charges be investigated and that
certain evidentiary measures be taken which
have not yet been fulfilled as of the date
of these financial statements.

g. The subsidiary AGEA received several
inspections from the AFIP aimed at verifying
compliance with the so-called competitiveness
plans implemented by the National Executive
Branch. After several reports issued by the
AFIP and the corresponding Resolutions issued
by the Ministry of Economy, such agencies
allege that certain acts performed by AGEA

238

during 2002 lead to the nullity of some of the
benefits granted under said plans, including
adjustments, for an estimated total amount of
Ps. 65 million. In April 2013, AGEA was served
with AFIP Resolution No. 03/13, whereby
such agency decided to exclude AGEA from the
Registry of Beneficiaries of the Competitiveness
and Employment Generation Agreements under
the Cultural Sector Agreement, as from March
4, 2002. The AFIP ordered the restatement
of the tax returns and the remittance of the
corresponding amounts. AGEA filed an appeal
against such resolution. Notwithstanding the
foregoing, in re “AEDBA and Other v. Ministry
of Economy Resolution No. 58/10”, the
Federal Court on Administrative Matters No.
6 issued an injunction ordering AFIP to refrain
from initiating and/or continuing with the
administrative proceeding/s and/or any act that
would entail the enforcement of the amounts
payable under Resolution No. 3/13, until
a final decision is rendered. Notwithstanding
the foregoing, AGEA cannot assure that the
appeal will be resolved in its favor.

i. Pursuant to Resolution No. 17,522 issued
on September 18, 2014 and notified to AGEA
on September 24, 2014, the Board of Directors
of the CNV decided to initiate summary
proceedings against AGEA, certain current and
past members of its Board of Directors and
supervisory commission –who occupied those
positions between September 19, 2008 and
the present date- and against that company’s
Head of Market Relations, for an alleged failure
to comply with the duty to inform that AGEA
was a co-defendant in re “CONSUMIDORES
FINANCIEROS ASOCIACION CIVIL
PARA SU DEFENSA AND OTHER
V. GRUPO CLARIN S.A. AND OTHER on
EXPEDITED SUMMARY PROCEEDING”
(File No. 065441/08). The summary proceeding
is grounded on an alleged failure to comply
with Article 5, subsection a), the first part of
Article 6 and Article 8, subsection a) part V) of
the Annex to Decree No. 677/01; with Articles

1, 2 and 3, subsection . 9) of Chapter XXI of
the REGULATIONS (T.R. 2001 as amended) -
now Article 1 of Section I, Chapter I,
Title XII of the REGULATIONS (T.R. 2013
as amended); with Articles 2 and 3 subsection .
9) of Section II, Chapter I, Title XII of the
REGULATIONS (T.R. 2013 as amended);
with Article 11 subsection a.12) of Chapter
XXVI of the REGULATIONS (T.R. 2001
as amended) –now Article 11 subsection 13)
of Section IV, Chapter I, Title XV of the
REGULATIONS (T.R. 2013 as amended);
with Article 99 and 100 of Law No. 26,831;
and with Articles 59 and 294 subsection . 9)
of Law No. 19,550. AGEA, and the current
and past members of the Board of Directors
and supervisory commission who are subject to
the summary proceedings, duly filed their
respective responses. On February 11, 2015,
the preliminary hearing was held pursuant to
Article 8, subsection b.1.), Title XIII, Chapter
II, Section II of the Regulations (T.R 2013,
as amended). On August 19, 2015, the
company submitted the legal brief for the
discovery stage.

j. On February 27, 2013, the AFIP served IESA
with a notice stating the income tax and value
added tax charges assessed for fiscal period
2008 and ordering the initiation of summary
proceedings for alleged omitted taxes. The AFIP
mainly challenged the deduction of certain
expenses and fees, as well as the calculation of
the corresponding tax credit. IESA filed an
appeal in connection with such order, which
is currently pending before the National
Tax Court. The official assessment amounts
to P6. 1.4 million for income tax and Ps. 2.8
million for late-payment interest, calculated as
of December 31, 2016.

The official value-added tax assessment amounts
to Ps. 0.8 million for tax differences and Ps. 1.8
million for late-payment interest, calculated
as of December 31, 2016.

239

National Tax Court. The official assessment
amounts to Ps. 1.2 million for income tax
and Ps. 2.8 million for late-payment interest,
calculated as of December 31, 2016.

The official value-added tax assessment amounts
to Ps. 0.5 million for tax differences and Ps. 1.2
million for late-payment interest, calculated as
of December 31, 2016.

IESA and its legal and tax advisors believe that
it has strong arguments in its favor to defend
the criterion adopted in its tax returns.

10.3 Other Claims and Disputes
a. On June 22, 2007, TSC executed several
documents with AFA, applicable from the
2007/2008 until the 2013/2014 soccer seasons,
whereby TSC held all the broadcasting rights
for ten of the Argentine soccer first division
official tournament matches played each week.

On August 13, 2009 AFA notified TSC of its
decision to terminate unilaterally the above-
mentioned agreement. TSC challenged AFA’s
unilateral termination of the agreement and, in
order to safeguard its rights, on June 15, 2010
it brought a legal action against AFA before
a commercial court for contractual breach and
damages.

AFA summoned the National Government
as a third party, and the National Government
was incorporated to the proceedings. The
National Government requested that the case
be submitted to the Court on Federal
Administrative Matters. The request was
dismissed by the Commercial Court of
Appeals, which ratified the jurisdiction of the
Commercial Court.

b. On January 31, 2012, FADRA informed
Grupo Carburando’s subsidiary Mundo Show
S.A. of the unilateral rescission of the

agreement executed in 2006 whereby FADRA
assigned to that company the rights comprising
image, sound and static advertising of motor
racing at the road racing events Turismo
Carretera and TC Pista until December 31,
2015. Mundo Show S.A. has challenged and
rejected FADRA’s unilateral rescission of
the agreement. In light of the events, Mundo
Show S.A. will not be able to sell or export
the audiovisual and static advertising rights of
the above-mentioned motor racing events.
Therefore, in 2012 an allowance was set up for
impairment of goodwill and other assets
related to such agreement of approximately
Ps. 17 million. On July 17, 2013, some of
the Company’s subsidiaries executed an
agreement in order to settle the legal actions
brought as a consequence of the termination
of TV broadcasting rights and sponsorship
agreements relating to the Turismo Carretera
and TC Pista road racing events, whereby
FADRA undertook to pay damages for an
aggregate and final amount of Ps. 16.5 million
in 23 monthly and consecutive installments.
In addition, it assigned all of its equity interest
in TCM, which represents 20% of its capital
stock and votes. The parties also settled the
claims brought against FADRA in re "Mundo
Show v. FADRA on pending cash collection,
File No. 10041/2012", whereby FADRA
paid Ps. 1.5 million in exchange for the
dismissal of the legal actions.

The Company, AGEA and certain directors
and members of the supervisory committee
and shareholders have been served with
the claim. After rejecting certain preliminary
defenses presented by the defendants, such
as the application of statutes of limitation and
the failure to comply with prior mediation
procedures, the claim followed ordinary
procedure and the above-mentioned persons
duly filed their respective responses.

240

e. On April 25, 2013 Grupo Clarín S.A. held
its Annual Ordinary Shareholders’ Meeting.
As a result of the issues raised at this Meeting,
some of the permanent directors informed
the Company that they had pressed criminal
charges against the representatives of the
shareholder ANSES and of the CNV (Messrs.
Reposo, Kicillof, Moreno, Vanoli, Fardi and
Helman) for making statements and intellectual
constructions which, under the appearance
of being included in the new regulations of the
Argentine Capital Markets Law, only sought
to discredit the Board of Directors and
caricature its management, creating pretexts
that may lead to an intervention of the
Company without judicial control; pursuant
to the new powers vested on the CNV by
Capital Markets Law No. 26,831. On April 26,
2013, the Board of Directors decided to press
charges on the same grounds.

Consequently, the Company sent a letter to
the CNV, in which it clearly stated that what
had happened at that Meeting could not
be considered in any way as an acknowledgment
of the legitimacy of the powers vested on the
CNV by Law No. 26,831 and/or the regulations
that may be issued in the future. The letter
also stated that the Company reserved its right
to file the pertinent legal actions at any
time to request the declaration of the evident
unconstitutionality of that law. It also requested
the CNV to refrain from performing any act
or issuing any resolution that would lead to the
execution of the plan of which they had been
accused before the courts.

No. 16 of First Instance, Clerk’s Office No. 32.
The claim seeks damages resulting from
certain decisions made with respect to Televisora
Privada del Oeste S.A. Cablevisión and the
Company, among others, are defendants in such
lawsuit. Cablevisión was served with the claim
and filed a response in due time and form.
Notice of the claim is being served on the other
co-defendants. According to the Company’s
legal advisors, the chances of success of the
claim are low because the damages claimed are
clearly overstated, the actual damage invoked
does not exist and the claim is procedurally
inappropriate, on both a factual and legal basis.
Pem S.A. filed a response and the proceeding
is now in the discovery stage. In view of
the level of conflict that has arisen among the
parties and the length of time it is taking to
reach a solution, Cablevisión cannot ascertain
the outcome of this claim.

g. In March 2012, ARTEAR brought a
summary action for the protection of
constitutional rights against the National
Government (Chief of the Cabinet of Ministers
and Secretariat of Public Communication)
and against Messrs. Juan Manuel Abal Medina
and Alfredo Scoccimarro, in order to request that
the National Government cease in the arbitrary
and discriminatory allocation of official
advertising with respect to Arte Radiotelevisivo
Argentino S.A. ARTEAR requested (i) that the
court order the maintenance of a balanced
allocation with respect to the amount of official
advertising received in previous years, and in
particular prior to 2008, and with respect
to the amount of official advertising allocated
to other broadcasters of similar characteristics,
and (ii) that the conduct of the above-
mentioned officials be declared illegitimate, on
account of their having abusively exercised
their discretional power to manage public funds
destined to official advertising, discriminating
against Canal 13, which is owned by ARTEAR.

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admitted the summary action brought by
ARTEAR and ordered the National
Government to provide for the drafting and
submission to the first instance court of a
scheme for the allocation of official advertising
that included the broadcasters with characteristics
analogous to those of ARTEAR. Among those
broadcasters, the Court of Appeals included
América TV S.A. (Canal 2), Telearte S.A.
(Canal 9), Televisión Federal S.A. (Canal 11),
ARTEAR (Canal 13) and SNMP S.A. and RTA
S.E. (Canal 7). The allocation scheme must
faithfully conform to the guidelines of
proportionality and equity set forth in the
ruling. The term for submitting the allocation
scheme was set at thirty days after that decision
became final. After ARTEAR had filed several
complaints denouncing non-compliance
with the decision rendered by the Supreme
Court, the judge of the National Court of First
Instance on Federal Administrative Matters
No. 12, Clerk’s Office No. 23 admitted these
complaints in June 2015. The judge held
that the defendant had not complied with the
Supreme Court’s decision and ordered that
it begin to comply going forward. As of the date
of these financial statements, the National
Government is complying with that decision.

h. The claimants representing media companies
in re “AEDBA and Other v. National
Government - Decree No. 746/03 - AFIP on
Incidental Procedure” pending before the Court
on Federal Administrative Matters No. 4
requested that media companies represented by
the claimants be granted the right to have a
differential VAT regime as undertaken by the
National Government under Decree No.
746/03 and the rules and regulations issued in
connection thereto.

On October 30, 2003, a preliminary
injunction was issued in connection with the
above-mentioned file, ordering the National
Government to maintain the effectiveness
of the benefit granted under Decree No.
746/03. The National Government filed an
appeal against that decision and on November
6, 2008, the Court of Appeals granted the
request to have the injunction revoked, among
other things. On November 27, 2008, the
claimants filed an appeal with the Supreme
Court of Argentina requesting the suspension of
the enforcement of such ruling.

On October 28, 2014, the Supreme Court of
Argentina issued a ruling in connection with the
above-mentioned file, whereby it declared the
appeal formally admissible and thus confirmed
the effectiveness of the above-mentioned
preliminary injunction. In the recitals of its
ruling, the Supreme Court stated that: (i) as of
the date of the decision, the Executive Branch
had not yet established any regime to replace
the so-called competitiveness and employment
generation agreements; (ii) the differential VAT
regime provided under Law No. 26,982 was
only applicable to small media companies, not
to all media companies; (iii) the tax policy must
not be biased and cannot be used as a way to
curtail freedom of speech; (iv) the alternative
solution that had to be sought ruled out, as a
matter of principle, the application of the
general regime; (v) even though the merits have
not been decided upon (differential VAT
regime), the injunction that had been issued in
connection thereof shall remain effective until
such a solution to the matter is reached; (vi)
the legal entities that met the obligations within
the scope of the injunction shall not be deemed
delinquent; and (vii) the judge of the first
instance court shall render an urgent decision
on the merits.

On December 10, 2014, the Federal Court on
Administrative Matters No. 4 rendered a
decision on the merits in re AEDBA and other
v. National Government Decree No. 746/03
and other on Proceeding leading to a
declaratory judgment” ordering, among other
things, that: The claimants (media companies)
have the standing to sue; that the judge cannot
legislate because only the Legislative Branch is
empowered to do so; that, pursuant to the
enactment of Law No. 26,982, the obligation
undertaken by the Executive branch has already
been met since the differential VAT rates have
already been set and, therefore, the claim is
moot; that, based on the decision rendered by
the Supreme Court of Argentina, the companies
cannot be deemed delinquent.

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the Court of Appeals on Federal Administrative
Matters admitted the appeals filed by the
claimants and revoked the decision rendered
by the Court on Federal Administrative Matters
No. 4, ordering that the effectiveness of
the preliminary injunction be maintained and
authorizing the calculation of employer’s
contributions as tax credit on VAT until the
Executive Branch complies with the provisions
of Decree No. 746/03.

On December 3, 2015, the Supreme Court
of Argentina dismissed the appeal filed by the
Executive Branch. Therefore, the decision
rendered by the Court of Appeals became firm
and final.

As a result of the foregoing, AGEA and some
of its subsidiaries and Radio Mitre started
to calculate employer’s contributions as tax
credit on VAT as from November 2014.

ARPA is a party to “Association of Newspaper
Publishers of the City of Buenos Aires
(AEDBA, for its Spanish acronym) and other -
ADIRA, AAER, ATA AND ARPA- v. National
Government - Decree No. 746/03 - AFIP on
Autonomous Preliminary Injunction”, in respect
of which the Supreme Court of Argentina
rendered a decision on October 28, 2014.
These associations had requested a preliminary
injunction ordering the Executive Branch
to maintain the effectiveness of the benefit of
calculating employer’s contributions as tax credit
on VAT, pursuant to Decree No. 746/03, for
the companies that belong to these associations,
or else, as a default argument, ordering the
AFIP to refrain from claiming payment
on the corresponding taxes. In addition, the
Court confirmed the decision on the extended
preliminary injunction stating that,
notwithstanding the decision, the claimants
shall not be deemed delinquent within the
framework of the preliminary injunction. On

October 1, 2015, Chamber II of the Court
of Appeals on Federal Administrative Matters
admitted the appeals filed by the claimants
and revoked the decision rendered by the Court
on Federal Administrative Matters No. 4,
ordering that the effectiveness of the preliminary
injunction be maintained and authorizing
the calculation of employer’s contributions as
tax credit on VAT until the Executive Branch
complies with the provisions of Decree
No. 746/03.

On December 3, 2015, the Supreme Court
of Argentina dismissed the appeal filed by the
Executive Branch. Therefore, the decision
rendered by the Court of Appeals became
firm and final.

As a result of the foregoing, ARTEAR and
some of its subsidiaries started to calculate
employer’s contributions as tax credit on VAT
as from July 2015.

j. Cablevisión, together with its merged
companies and ATVC, brought a claim
requesting the Judicial Branch, through a final
decision rendered in a contradictory trial,
to declare: 1) that the National Government
undertook the obligation to provide an
alternative solution to the repeal of the regime
established under Section 52 of Decree No.
1,387/01 for companies that render
supplementary broadcasting services and cable
television services, which shall contemplate
the reasons for excluding these companies
from the repeal of Decree No. 1,387/01
through Decree No. 746/03, and 2) that while
the Government considers the situation of those
companies to find such an alternative solution,
it shall maintain the effectiveness of the regime
established under Section 52 of Decree No.
1,387/01 (cfr. fs.2/12).

On October 1, 2015, Chamber II of the Court
of Appeals on Federal Administrative Matters,
in a single joint decision in re “AEDBA
and other v. National Government - Decree
No. 746/03 - AFIP on Incidental Procedure”,
decided that, among other things, even though
ATVC was not among the claimants that had
been granted an injunction in the other two
above-mentioned related cases, the situation
was also applicable to the sector encompassed
by that association, therefore, the decision
shall also apply to this association. Under these

243

conditions, the claims brought by the claimants
shall be admitted - in the joinder of the three
claims - and the claimants and the companies
represented by them are entitled to have a
differential VAT regime applicable to the sectors
involved which shall be created, enforced and
regulated by the authorities duly empowered
by the Constitution to such end. This regime
shall guarantee the full exercise of the rights
recognized under Section 14 of the National
Constitution, as well as the maintenance
of the exception provided under Section 2 of
Decree N° 746/03 from the repeal of Section
52 of Decree No. 1,387/01. On December 3,
2015, the Supreme Court of Argentina dismissed
the appeal filed by the Executive Branch.
Therefore, the decision rendered by the Court
of Appeals became firm and final.

As a result of the foregoing, Cablevisión and
its subsidiaries started to calculate employer’s
contributions as tax credit on VAT as
from September 2015. The amount calculated
as of December 31, 2016 and 2015 was
approximately Ps. 741.3 million and Ps. 237
million, respectively.

k. In February 2016, Radio Mitre was served
with a claim seeking to extend to Radio
Mitre the bankruptcy of one of its subsidiaries,
Cadena País Producciones Publicitarias S.A.,
in connection with a case pending before one
of the National Courts of First Instance
on Commercial Matters of the City of Buenos
Aires. Our legal advisors believe that that
company has sufficient legal and factual grounds
to support its position contrary to that claim
and, therefore, they do not foresee any adverse
effects that may be derived from this situation.

10.4 Matters concerning Papel Prensa:
I. Papel Prensa has several disputes pending
before the Commercial Court of Appeals
of the City of Buenos Aires as a consequence
of CNV Resolution No. 16,222. Pursuant
to said Resolution, the CNV declared that
certain decisions of Papel Prensa’s Board
of Directors were irregular and with no effect
for administrative purposes. The Resolution
challenged the Board’s fulfillment of the
formalities required in the preparation,
transcription and execution of meeting minutes
on the relevant corporate books. On June 24,
2010, in File No. 75,479/09, the Commercial
Court of Appeals of the City of Buenos Aires,

Chamber C, decided to nullify CNV Resolution
No. 16,222. On the basis of Resolution No.
16,222, the CNV has questioned subsequent
decisions of Papel Prensa’s Board and of
its Shareholders. In response, Papel Prensa has
brought several administrative claims against
the CNV, questioning its position. All of
such claims were decided in Papel Prensa’s favor
by the Commercial Court of Appeals of the
City of Buenos Aires. Consequently, the CNV’s
decisions were nullified. Furthermore, the
Commercial Court of Appeals, Chamber C,
dismissed the appeals filed by the CNV before
the Supreme Court of Argentina against the
Court of Appeals’ decisions. The CNV filed a
direct appeal before the Supreme Court.

As a consequence of the above, Papel Prensa
has continued with the criminal proceedings
brought against certain public officials.

On February 1 and 4, 2010, the Secretary
of Domestic Trade, Mario G. Moreno, and
the CNV, respectively, requested the judicial
intervention of Papel Prensa before the
commercial justice. Such claims were pending
before the Federal Commercial Court of
First Instance No. 2, Clerk’s Office No. 4,
temporarily under judge Dr. Eduardo Malde,
who, on March 8, 2010, issued an injunction
whereby he suspended certain decisions
adopted at meetings of the Board of Directors
and at Shareholders Meetings held on or
after November 4, 2009. Judge Malde also
appointed a co-administrator without removing
the members of the previous corporate bodies.
Papel Prensa filed an appeal, which the
Commercial Court of Appeals, Chamber C,
resolved in Papel Prensa’s favor, by revoking the
injunction on August 31, 2010. On December
7, 2010 the same Chamber C dismissed the
appeals filed by the CNV and the National
Government before the Supreme Court of
Argentina against the Court of Appeals’ decision.
Both the CNV and the National Government
filed direct appeals against such decision.

On March 26, 2014, the Supreme Court of
Argentina dismissed the appeal that had been
filed by the CNV. Therefore, the decision
rendered by the Court of Appeals that nullified
Resolution No. 16,222 became final, with
full force and effect. Also on the same date,
the Supreme Court of Argentina dismissed the
appeals brought by CNV and the National

244

Government. Therefore, the decision rendered
by the Court of Appeals that revoked the
corporate intervention of Papel Prensa became
final, with full force and effect.

None of the claims mentioned in the above
paragraphs had a material effect on AGEA’s
financial and economic condition as of
December 31, 2016.

III. Papel Prensa suspended its operations with
related parties between March 9 and April 21,
2010 pursuant to an injunction issued on
March 8, 2010 by Judge Malde. In his ruling,
Judge Malde decided to suspend the Board
of Directors’ resolution of December 23, 2009,
which had approved the terms and conditions
of transactions with related parties for the
year 2010. On April 21, 2010, the Board of
Directors of Papel Prensa, following a proposal
made by the court-appointed supervisor
(interventor) and co-administrator, approved the
resumption of such company’s transactions with
related parties under provisional conditions for
as long as the decision rendered by the Board on
December 23, 2009 remained suspended and/or

until Papel Prensa’s corporate bodies established
a business practice to follow with related parties.

At a meeting held on December 23, 2010,
Papel Prensa’s Board of Directors approved
new conditions that must be fulfilled for the
recognition and payment of volume discounts
that may be applicable to related parties in
connection with purchases of paper made as
from April 21, 2010. These new conditions are
as follows: (i) the lifting of the provisional
suspension of the resolutions adopted by the
Board at the meeting of December 23, 2009,
as explained in the previous paragraph, and (ii)
the resolution or end, by any means, of any state
of uncertainty that may eventually exist about
the conditions approved by Papel Prensa’s Board
in the first item of the agenda of the meeting
held on April 21, 2010, as a consequence of
the claim brought by the National Government
in re “National Government – Secretariat of
Domestic Trade – v./ Papel Prensa S.A.I.C.F. y
de M. on/ Ordinary”, File No. 97,564, currently
pending before Federal Commercial Court
of First Instance No. 26, Clerk’s Office No. 52.
Under this proceeding, the National Government
seeks to obtain, among other things, a declaratory
judgment of nullity of the provisional conditions
for the resumption of transactions with related
parties in connection with the purchase and
sale of paper that was approved by the Board
of Papel Prensa in the first item of the agenda
of the above mentioned meeting held on
April 21, 2010.

Furthermore, at this meeting held on
December 23, 2010, Papel Prensa’s Board
decided to maintain the approved sales policy,
but to subject the accrual and enforceability,
and, consequently, the recognition and payment
to the clients, of the eventual volume discounts
that may be applicable to them with respect
to paper purchases made between January 1st,
2011 and December 31, 2011, to a final

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favorable ruling in the claim brought by
Papel Prensa against the constitutionality of
SCI Resolution No. 1/2010, or to the final
nullification of such Resolution No. 1/2010 in
any other way or by any other legal means,
whichever occurs first. In view of the decisions
rendered in this case, the substantive claim,
in this aspect, is now subject to the outcome
of the claim brought by Papel Prensa against
the constitutionality of Law No. 26,736.
With respect to related parties, the Board
of Directors of Papel Prensa approved the same
sales policy and conditions as those approved
for the other customers in general.

In a meeting held on December 27, 2011, the
Board of Directors of Papel Prensa decided
to maintain for 2012 the same sales policy that
had been approved for 2011 – under the same
terms and conditions mentioned in the previous
paragraph – for all of its customers in general
(including related parties), which was maintained
in subsequent years and, to date, no changes
have been introduced.

The commercial policy approved by Papel
Prensa was affected by Law 26,736 –effective as
from January 5, 2012– which declared that
the production, sale and distribution of wood
pulp and newsprint were matters of public
interest and set forth the regulatory framework
to be adopted by the producers, sellers,
distributors and buyers of such inputs. Among
other things, the Law set limits and established
conditions applicable to Papel Prensa for the
production, distribution and sale of newsprint
(including a formula to determine the price
of paper), and created the National Registry of
Producers, Distributors and Sellers of Wood
Pulp and Newsprint where all producers, sellers,
distributors and buyers shall be registered as
a mandatory requirement in order to produce,
sell, distribute, and/or purchase newsprint
and wood pulp as from the enactment of the
Law. It also contains a series of temporary
clauses, specifically and exclusively addressed to
Papel Prensa, whereby Papel Prensa is forced
to make investments to meet the total national
demand for newsprint – excluding from this
requirement the other existing company
that operates in the country with installed
capacity to produce this input. The Law also
provides for the capitalization of the funds
eventually contributed by the National
Government to finance these investments for

the purposes of increasing the equity interest
and the political rights of the National
Government in Papel Prensa, contravening
public order regulations contained in Law
19,550 and disregarding several constitutional
rights and guarantees of Papel Prensa and
its private shareholders.

On February 10, 2012, AGEA registered with
the National Registry of Producers, Distributors
and Sellers of Wood Pulp and Newsprint
(Record No. 63 in File No. S01:0052528/12),
clearly stating that the decision to register shall
not be construed as an acknowledgment or
conformity with the legitimacy of Law 26,736,
Resolution No. 9/2012 issued by the Ministry
of Economy and Public Finance and SCI
Resolution No. 4/2012 issued in connection
with such Law and/or any other issued in
the future, since they seriously affect several
rights and guarantees of AGEA which are
recognized and protected by the Argentine
National Constitution.

IV. On September 12, 2011, the CNV issued
Resolution No. 16,647 whereby it rendered
irregular and with no effect for administrative
purposes the decisions made by Papel Prensa’s
Board of Directors at the meetings held
on July 20, 2011 and August 5, 2011. At those
meetings, the Board of Directors had called
two shareholders’ meetings, to be held on
September 27, 2011 and September 15, 2011,
respectively. Notwithstanding the fact that
Resolution No. 16,647 was appealed by Papel
Prensa and is therefore not final, on September
15, 2011, Commercial Court No. 5, Clerk’s
Office No. 9, issued an injunction with respect
to the Board of Directors’ decisions to call the
two shareholders’ meetings. The injunction had
been requested by the shareholders Arte Gráfico
Editorial Argentino S.A., Compañía Inversora en
Medios de Comunicación (CIMECO) S.A., and
S.A. La Nación. Given that the issuance of the
injunction validated Papel Prensa’s decision to call
the two shareholders’ meetings, both were held
as originally scheduled. Nevertheless, and based
on the above Resolution No. 16,647, on October
13, 2011 the CNV issued Resolution No.
16,671 rendering irregular and with no effect for
administrative purposes all of the decisions made
at Papel Prensa’s Shareholders’ Meetings held on
September 15, 2011 and September 27, 2011.
Papel Prensa filed an appeal against Resolution
No. 16,671, which is, therefore, not final. Also

246

based on Resolution No. 16,647, on November
16, 2011, the CNV issued Resolution No.
16,691 whereby the CNV rendered irregular
and with no effect for administrative purposes
the decisions made at the Board of Directors’
Meeting held on October 3, 2011 and the
call for the Board of Directors’ meeting on
November 17, 2011. Such Resolution is not to
be deemed final since Papel Prensa filed an
appeal and requested its nullification. In this
sense, of particular note is that: (i) at the hearing
held before Federal Commercial Court No.
26 of First Instance, Clerk’s Office No. 52, the
National Government, Papel Prensa, AGEA,
Compañía Inversora en Medios de Comunicación
(CIMECO) S.A. and S.A. La Nación agreed,
among other things, on the composition of the
company’s corporate bodies, and in particular
on the recognition of the authorities appointed
by the private shareholders at Papel Prensa’s
Shareholders’ meeting held on September 27,
2011, as well as on the agenda to be addressed at
the meeting of Papel Prensa’s Board of Directors
of October 3, 2011, which had been the subject
matter of Resolution No. 16,691; and (ii) at
the hearing held in April 2012 before the same
Commercial Court the National Government,
Papel Prensa, AGEA, Compañía Inversora
en Medios de Comunicación (CIMECO) S.A.
and S.A. La Nación, with the assistance of
the Argentine Securities Commission, agreed to
request the court to order a shareholders’ meeting
with an agenda substantially similar to that
of Papel Prensa’s Shareholders’ Meeting held
on September 27, 2011. The request was granted
by the intervening judge and the meeting was
scheduled for August 29, 2012. The meeting
began on that date but, as a consequence of
certain disturbances provoked by the representative
of the National Government, the private
shareholders that were present at the meeting
decided to adjourn it for 48 hours without
addressing the agenda. After that, and
notwithstanding the resolution adopted at the
meeting, on August 31, 2012 Judge O’Reilly
decided to order that the adjourned meeting
would resume on September 25, 2012. However,
the meeting was not held because the Judge
subsequently held that the appeals filed against
other points of her decision resulted in the
suspension of every point of the decision she had
rendered, including the new date scheduled for
the meeting, even though all appellants had
consented to that point.

On June 12, 2014, the Court of Appeals
decided to postpone rendering a decision on
the appeals filed until the court-convened
shareholders’ meeting that began on August 29,
2012 had been resumed and closed, ordering
Judge O’Reilly to decide on the pending
issues and to order the shareholders to resume
that meeting. On December 4, 2014, the
Judge called Papel Prensa, the CNV, and the
shareholders of AGEA, the National
Government, SA La Nación and CIMECO to
a hearing to be held on May 6, 2015, in order
to proceed as ordered by the Court of Appeals.
In light of the above, the new date to resume
that meeting may not be set until Judge
O’Reilly has complied with the decision
rendered by the Court of Appeals.

On April 29, 2015, the Judge suspended the
hearing that was to be held on May 6, 2015
because the National Government failed to
answer the notice served by the Judge requesting
a statement identifying the officials that
would attend the hearing with sufficient powers
to reach a settlement pursuant to Decree No.
411/80 (T.R. Decree No. 1,265/87, as
amended). The Judge set a new date for the
hearing to be held on April 14, 2016, but
it was subsequently postponed by the Court
for June 9, 2016.

Subsequently, in March 2016, the Commercial
Court of Appeals –Chamber C– summoned
Papel Prensa, the CNV, and the shareholders of
AGEA, the National Government, SA La
Nación and CIMECO to attend a hearing to
be held on April 7, 2016, solely for conciliatory
purposes and with the aim of finding a
comprehensive solution to the conflict. The
hearing was held on that date and a new
date was set to resume the hearing on June 2,
2016 for the same purposes and effects. It was
subsequently postponed until June 3, 2016.
At that hearing, held on June 3, 2016, Papel
Prensa, the Company and the other shareholders
present at the hearing (the National Government,
S.A. La Nación and CIMECO) requested that
the procedural periods remain suspended in
connection with the claims pending before that
Court of Appeals, and also requested the court
to order a shareholders’ meeting of Papel Prensa
to be held on September 20, 2016 to address,
basically, the issues included under subsections
1, 2 and 3 of Section 234 of Law No. 19,550,
as amended, corresponding to fiscal years ended

247

December 31, 2010, 2011, 2012, 2013, 2014
and 2015. On September 5, 2016, the Court
of Appeals called for a shareholders’ meeting
as requested at the hearing held on June 3,
2016, and at the request of Papel Prensa and the
National Government –in view of the urgent
and impending terms to make the required
publications– on September 8, 2016 it postponed
the date of the shareholders meeting until
October 19, 2016.

On October 19, 2016, the shareholders
of Papel Prensa duly held the court-convened
Shareholders’ Meeting of that company. At
that Shareholders’ Meeting, the shareholders
approved the financial statements of Papel
Prensa for the years ended December 31, 2010,
2011, 2012, 2013, 2014 and 2015 and other
accounting documentation under subsection 1,
Section 234 of Law No. 19,550, as amended,
appointed directors, statutory auditors and
members of the supervisory committee for the
year 2016, approved the capitalization of the
capital adjustment for Ps. 123,293,385, issued
a decision on the approval and disapproval of
the performance of certain directors, statutory
auditors and members of the supervisory
committee during the full fiscal years under
consideration, and unanimously appointed
external auditors engaged with issuing an
opinion on the financial statements of Papel
Prensa as of December 31, 2016 and March 31,
2017. In connection with the decisions made
at the Shareholders’ Meeting held on October
19, 2016 by the shareholders that are parties to
judicial proceedings, the resumption of the
court-convened Shareholders’ Meeting of Papel
Prensa that began on August 29, 2012 has
become moot, and the Company understands
that the great majority of the issues involving
the conflict related to Papel Prensa have become
or will become moot.

On February 14, 2017, the hearing provided
under Section 360 of the Civil and Commercial
Procedure Code in re “Arte Gráfico Editorial
Argentino S.A. and other v. Argentine Securities
Commission on ordinary” File 34,049/2011
took place. The purpose of that claim was
to declare that the silence of the National
Government be deemed a consent, given the
government’s obligation to grant or deny
consent under Section 20 of the By-laws with
respect to the appointment of an external
auditor by the shareholders at the Shareholders’

Meeting held on September 27, 2011. Papel
Prensa, the shareholders of CIMECO, S.A. La
Nación and the Company, the CNV and the
National Government agreed that this claim had
become moot as a result of the Shareholders’
Meeting held on October 19, 2016.

V. On June 6, 2013, the Board of Directors of
the CNV issued CNV Resolution No. 17,102,
within the framework of the Administrative File
No. 1032/10, whereby it required that: (i)
certain members of Papel Prensa’s Supervisory
Committee and statutory auditors be imposed a
fine of Ps. 150,000 each; and (ii) Papel Prensa,
certain members of its Board of Directors,
one member of its Supervisory Committee and
the members of its Oversight Board (all of
them representatives of Papel Prensa’s private
shareholders) be imposed a joint and several
fine of Ps. 800,000. Papel Prensa and its other
current and former officers appealed the fine
in due time and form. In the same appeal, they
requested an injunction to change the effect
of their appeal and suspend the application of
the fine. On October 11, 2013, Chamber No. 5
of the Federal Court on Administrative Matters
denied this request, which was considered
unnecessary in the light of the settlement of the
fine by the claimants, as informed below.
Notwithstanding the above, on June 19, 2013,
the Company asked the CNV to suspend the
application of the fine until a decision was
rendered by the Court of Appeals with respect
to the injunction. The request was denied. On
June 28, 2013, the fine was paid under protest
in order to prevent its coercive enforcement
by the CNV; given that, under the new Capital
Markets Law No. 26,831, appeals may be
admitted without suspension of judgment.

VI. AGEA has not recorded any impact in
connection with the foregoing, since its effects
shall depend on the final outcome. Such effects
are not expected to be material to these
Financial Statements.

Note 11

Regulatory Framework

11.1. Audiovisual Communication Services Law.
The subsidiaries of Grupo Clarín that render
audiovisual communication services are holders

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of licenses that were originally awarded under
the regime established by Law No. 22,285. The
COMFER was the enforcement authority
established by that law. Under Law No. 22,285
audiovisual communication service companies
in Argentina required a non-exclusive license
from the COMFER in order to operate. Other
approvals were also required, including, for
some services, authorization by municipal
agencies. Broadcasting licenses were granted for
an initial period of 15 years, allowing for a
one-time extension of 10 years. The extension
of the license was subject to the approval of
the COMFER, which would determine whether
or not the licensee had met the terms and
conditions under which the license had been
granted. Some of the licenses exploited by
the subsidiaries have already been extended for
the above-mentioned 10-year term.

On May 24, 2005, Decree No. 527/05
provided for a 10-year-suspension of the terms
then effective of broadcasting licenses or
their extensions. Calculation of the terms was
automatically resumed upon expiration of the
suspension term, subject to certain conditions.
The Decree required that companies seeking
to benefit from the extension submit to the
COMFER’s approval, within two years from
the date of the Decree, programming proposals
that would contribute to the preservation
of the national culture and the education of the
population and a technology investment project
to be implemented during the suspension term.
COMFER Resolution No. 214/07 regulated the
obligations established by Decree No. 527/05
in order to benefit from such suspension. The
proposals then submitted were approved and,
accordingly, the terms of the licenses originally
awarded to the subsidiaries of Grupo Clarín
were suspended for ten (10) years.

The Audiovisual Communication Services
Law (Law No. 26,522, LSCA, for its Spanish
acronym) was passed and enacted on October
10, 2009, subject to strong concerns over
its content and enactment procedure. Even
though the new Law became effective on
October 19, 2009, not all of the implementing
regulations provided by the law have been
issued. Therefore, Law No. 22,285 still applies
with respect to those matters that to date
have not been regulated, until all terms and
procedures for the regulation of the new
law are defined.

Emergency Decree No. 267/15 issued
on December 29, 2015, created the National
Communications Agency (“ENACOM”, for its
Spanish acronym) as a decentralized and
autarchic agency under the jurisdiction of the
Ministry of Communications. Among other
powers, the ENACOM has all the same powers
and competences that Law No. 26,522 had
vested in AFSCA. See Note 11.3.

11.2. Telecommunication Services.
The regulatory framework of the Argentine
telecommunications sector is undergoing a
process of change. In December 2014, the
Argentine Congress passed Law No. 27,078,
known as the “Digital Argentina Act”, which
partially repealed National Telecommunications
Law No. 19,798. The new law subjects the
effectiveness of Decree No. 764/00, which
deregulated the telecommunications market,
to the enactment of four new sets of rules
that will govern the License, Interconnection,
Universal Service and Radio-electric
Spectrum regimes.

The license will be called “Licencia Única
Argentina Digital” and will allow licensees to
render any telecommunication services to
the public, be they fixed or mobile, wired or
wireless, national or international, with or
without the licensee’s own infrastructure.

The TIC Services registered with the Argentine
Secretariat of Communications under the name

249

of Cablevisión, its merged companies and/or
subsidiaries and related companies that exploit
telecommunication licenses are the following:
Data Transmission, Paging, Videoconference,
Community Retransmission, Transport of
Broadcast Signals, Value-Added, Radio-Electric
Trunking, Internet Access, Public Telephony,
Local Telephony and National and International
Long-Distance Telephony.

The new law maintained the obligation to
contribute 1% of telecommunication service
revenues, net of taxes and charges, to be
used for Universal Service investments (this
obligation had been imposed by Decree No.
764/00 on all service providers as from January
1, 2001), but the Universal Service Trust Fund
was placed under State control. Until August
2015, the manager of such trust fund was
Banco Itaú Argentina S.A., which received
the joinder requests filed by Cablevisión and its
merged companies and/or subsidiaries and
related companies that exploit telecommunication
licenses to join the Trust Agreement.

The Argentine Secretariat of Communications
has yet to decide on the approval of the Projects
submitted by Cablevisión and its subsidiaries
that exploit telecommunication services, within
the framework of SECOM Resolution No.
9/2011 which created the program “Infrastructure
and Equipment”, whereby telecommunication
service providers were allowed to submit
projects aimed at developing new infrastructure,
updating existing infrastructure and/or
acquiring equipment for areas without coverage
or with unmet needs, in order to meet the
obligation to make contributions to the
Universal Service Trust Fund for the amounts
accrued as from January 2001 until the entry
into force of Decree No. 558/08.

elements, associated facilities or services to
render TIC services, even when such elements
are used to render audiovisual content services.”
Under this scheme, the government seeks to
make private companies that were created and
developed in competition share their networks
with other companies that had not made any
investments.

As of the date of these financial statements,
Law No. 27,078 has been only partially
regulated.

11.3. Emergency Decree No. 267/15. Convergence.
Emergency Decree No. 267/15 (the “Emergency
Decree”), issued on December 29, 2015 and
published in the Official Gazette on January 4,
2016, creates the ENACOM as a decentralized
and autarchic agency under the jurisdiction
of the Ministry of Communications and vests
the new agency with authority to enforce Laws
Nos. 26,522 and 27,078, as amended and
regulated. The ENACOM has all the same
powers and competences that had been vested in
AFSCA and AFTIC by Laws Nos. 26,522 and
27,078, respectively.

Among the main amendments introduced
by the Emergency Decree with respect to both
laws, the most remarkable is the repeal of
Section 161 of Law No. 26,522, which set forth
the obligation to conform to the provisions of
this law with respect to ownership conditions
and the number of licenses. Section 45 of Law
No. 26,522, which establishes the multiple
license regime, has been significantly amended.
As a result, the Company and its subsidiaries
that are licensees and/or owners of audiovisual
communication services already conform to
the new regulatory framework.

250

Pursuant to this amendment (Section 7 of the
Emergency Decree, which amends, among
others, Section 10 of Law No. 27,078), all the
services exploited by Cablevisión and its
subsidiaries are now governed by the Digital
Argentina Act. The only license still exploited
by Cablevisión that could be considered to
be still subject to the LSCA is the registered
title of the signal METRO, since this signal is
broadcast through other services that acquire
it for that purpose, and, therefore, it has a
registration number issued by AFSCA (now
ENACOM) that must be renewed on an
annual basis.

As far as the Company’s subsidiaries are
concerned, the Emergency Decree eliminates:

1. The incompatibility to render in the same
location broadcast television services and
subscription television services. When subscription
television services are exploited through physical
or radio-electric link, they will be subject to
the Digital Argentina Act pursuant to Section 7
of the Emergency Decree, which amends,
among others, Section 10 of Law No. 27,078;
2. The limit of 10 licenses for radio-electric link
subscription television services and 24 licenses
for physical link subscription television services,
which are considered to be TIC services as from
January 4, 2016, date on which the Emergency
Decree became effective; and the limit that
provided that broadcast television services may
not reach more than 35% of the total national
population and the limit that provided that
physical link and radio-electric link subscription
television services may not reach more than
35% of all subscribers.

among Providers”. The right of access included
“providers having to make available to other
providers their network elements, associated
facilities or services to render TIC services,
even when such elements were used to render
audiovisual content services.”

Due to the fact that physical link and radio-
electric link subscription television services
are now subject to the Digital Argentina Act:

However, it should be noted that pursuant to
Section 21 of the Emergency Decree and until
the enactment of a law that shall unify the
fee regime provided under Laws Nos. 26,522
and 27,078, the physical link and radio-electric
link subscription television services exploited
by certain subsidiaries of the Company will
continue to be subject only to the fee regime
provided under Law No. 26,522. They shall
not be subject to the investment contribution
or the payment of the Control, Oversight and
Verification Fee provided under Sections 22
and 49 of Law No. 27,078.

251

With regard to the term of the licenses for
television and radio broadcast services, the
Emergency Decree establishes two important
changes:

• It provides for a new system of extensions
for audiovisual communication service licenses
whereby the licensee may request a first extension
for five (5) years, which will be automatic.
Upon expiration of this term, licensees may
request subsequent extensions of ten (10) years
complying in that case with ‘the provisions of
the Law and applicable regulations to be eligible
for each extension. However, this system of
subsequent extensions may be interrupted upon
the expiration of the last extension if the Ministry
of Communications decides to call for a public
bid for new licensees, for reasons of public
interest, for the introduction of new technologies
or in compliance with international agreements.
In this case, prior licensees shall have no acquired
rights regarding their licenses.
• Section 20 of the Emergency Decree provides
that the holders of licenses effective as of
January 1, 2016 may request a ten (10) year
extension, without it being necessary to
wait until the expiration of the license that is
currently effective. Such extension shall be
considered as a first period that entitles the
holder to the five (5) year automatic extension.

Taking into consideration the advantages
provided under the new legal framework with
regard to the terms of the licenses, the direct
and indirect subsidiaries of the Company
that exploit audiovisual communication services,
i.e. ARTEAR, RADIO MITRE, TELECOR
S.A.C.I., Teledifusora Bahiense S.A. and
Bariloche TV S.A., made a filing with
the ENACOM requesting the extension of the
terms of their licenses pursuant to Section 20
of the Emergency Decree.

Cablevisión has completed the procedure
established under ENACOM Resolution No.
427/16 in order to report, using the online
application provided by the ENACOM to
such end, the territorial location of its services,
indicating the original coverage area, the
supplementary territorial units and/or area
extensions in which it currently renders services.

In addition, and pursuant to ENACOM
Resolution No. 1,394/16, which approves the
General Rules for Physical Link Subscription

Television Services and/or Radio-Electric
Link Subscription Television Services, in those
cases in which Cablevisión and/or any of its
Subsidiaries purchased bidding forms to apply
for a new license when the term had expired
or to apply for an area extension, the applicants
amended their filings and converted them into
a request for authorization of coverage area.

Pursuant to the Emergency Decree, the
providers of the Basic Telephone Service whose
licenses were granted under the terms of Decree
No. 62/90 and paragraphs 1 and 2 of Section
5 of Decree No. 264/98, as well as Mobile
Telephone Service providers with a license
granted pursuant to the list of bidding conditions
approved by Resolution No. 575/93 of the then
Ministry of Economy and Public Works and
Services and ratified by Decree No. 1,461/93,
shall only be able to provide subscription
broadcasting services by means of physical or
radio-electric link after a term of two years
counted as from January 1, 2016. That term may
be extended for one more year.

The Emergency Decree was approved on
April 6, 2016 by the Lower House of Congress.
Therefore, it has full force and effect.

• Provides for the protection for fifteen years
of last mile fixed NGN for broadband Internet
services that may be deployed by the licensees
of TIC services with respect to the rules for
open access to broadband services.
• Orders the issuance of regulations for the
following purposes:
− To call for a Public Bid for the allocation of
new frequency bands for mobile services.

252

− To ensure the re-allocation of radio-electric
spectrum frequencies with economic
compensation and shared use to frequencies
previously allocated to other services, and
to allocate such frequencies to providers of TIC
Services that request to reuse them to render
mobile services or fixed wireless services with
LTE or higher technologies.
− To allocate radio electric spectrum frequencies
on demand, imposing compensation, deployment
and coverage obligations on the current local
or regional providers of TIC services and on the
current providers of mobile communication
services.
• Sets forth that the persons restricted under
Decree No. 267/15 from rendering physical
or radio-electric link subscription television
services may request the corresponding
registration and begin to provide those services
in certain areas as from January 1st, 2018.
• Recognizes that the holders of satellite link
subscription television service licenses that as of
December 29, 2015 rendered TIC services may
maintain the ownership of both services.
• Orders the Ministry of Communications to
guarantee the interconnection principles provided
under the applicable legislation in order to ensure
the impartiality, non-discrimination and fair
competition among providers of mobile services,
restricting the possibility of delaying or hindering
the technical, interconnection, operational or any
other conditions that may create barriers for
other providers to enter the market.

11.4. Matters related to the regulatory situation of

the Company and certain subsidiaries.

11.4.1. Proposal to conform to the provisions of Law

No. 26,522.
Pursuant to Resolution No. 17/ENACOM/2016
issued on February 01, 2016, the new
enforcement authority recognized that all the
files and/or administrative proceedings pending
resolution containing requests made under
the regime approved by Section 161 of Law
No. 26,522, and its regulations, including the
proposal submitted by the Company and its
subsidiaries, comply with the limits relating
to multiplicity of licenses established by Section
45 of Law No. 26,522, as amended by
Emergency Decree No. 267/2015. Therefore,
they shall be deemed concluded and filed.
In addition, in the same administrative act,
that agency also repealed Resolution No.
1,121/AFSCA/2014, which had ordered the
ex-officio divestiture procedure.

11.4.2. Other Resolutions issued by AFSCA.
We refer to Resolution No. 1,329/AFSCA/2014,
which amends Resolution No.
1,047/AFSCA/2014, whereby the AFSCA
approved the National Standard for Terrestrial
and Broadcast Digital Television Audiovisual
Communication Services, and to Decree No.
2,456/2014, which approves the National Digital
Audiovisual Communication Services Plan. Both
the Resolution and the Decree are manifestly
contrary to Law No. 26,522, which has higher
hierarchy, because they contradict the rights of
the current licensees of broadcast television
services, including ARTEAR and the subsidiaries
that exploit broadcast television services.

This regulatory framework was subsequently
supplemented by three resolutions. Through
Resolution No. 24/AFSCA/2015, AFSCA
approved the Technical Plan for Terrestrial
Digital Television Frequencies for important
areas of the national territory. Through
Resolution No. 35/AFSCA/2015, AFSCA
allocated a digital television station on a
permanent basis to the current licensees of
analog broadcast stations, among which
are ARTEAR and its subsidiary TELECOR
S.A.C.I. in order to develop their transition to
digital technology. Finally, through Resolution
No. 39/AFSCA/2015, AFSCA called for public
bids for the award of digital television licenses
according to the illegitimate categories created
by the regulations of the LSCA. Through
this regulatory framework, the rights of the
current broadcast television licensees are
infringed. These rights should be preserved
intact as provided under Law No. 26,522,
which has higher hierarchy. The main effect of
these regulations, among their technical effects,
is that the current broadcast television licensees
that obtained their licenses pursuant to Law No.
22,285 will have to bear additional charges
and obligations including, among other things,
multiplexing and broadcasting under their own
responsibility other broadcast television stations.

253

broadcast television service licensees. They
also filed a claim before the National Executive
Branch requesting the repeal of Decree No.
2,456/2014. As of the date of these financial
statements, the claim filed before AFSCA
was dismissed. Therefore, ARTEAR challenged
before the courts that agency’s decision to
dismiss the claim. The claim filed before the
National Executive Branch is still pending
resolution.

11.4.3. Fibertel License.
The Ministry of Communications, as the highest
government agency, replacing the MINPLAN
with respect to this specific competence, issued
Resolution No. 5/2016, which was notified on
February 29, 2016, whereby it revoked SECOM
Resolution No. 100/2010 for legitimacy reasons.
This Resolution, which had been issued by the
former Secretariat of Communications, had
revoked the exclusive telecommunication service
license held by Fibertel S.A., which was merged
into Cablevisión S.A.

The ENACOM issued Resolution No. 1,359/16,
whereby it authorized the transfer of ownership
of the Exclusive Telecommunication Service
License that had been granted to Fibertel S.A.,
which was merged into Cablevisión S.A. effective
as of April 1, 2003.

11.4.4. NEXTEL.

11.4.4.1. Regulatory Approval of the Acquisition of

On October 9, 2015, Grupo Clarín S.A. and
Cablevisión filed the corresponding appeals
against Resolution No. 326/2015, arguing that
they had standing based on their acquisition of
49% of the licensee and stating that the change
of control alleged by AFTIC had not occurred.

NEXTEL requested the suspension of the
effects of Resolution No. 326/2015 and also
filed an appeal against that administrative act.

On January 29, 2016, the Company and
Nextel appeared before the ENACOM pursuant
to Section 8 of Decree No. 267/15, which
amends Section 13 of Law No. 27,078 in order
to request authorization for the transfer of
control, in full compliance with the new legal
framework.

On February 22, 2016, the ENACOM issued
Resolution No. 133/2016, whereby it partially
admitted the appeals that had been filed against
AFTIC Resolution No. 326/2015, in order
to consider the Company’s request for approval
of the transfer of control.

On March 7, 2016, the ENACOM issued
Resolution No. 280/2016, whereby it
authorized the change of control of NEXTEL
COMMUNICATIONS ARGENTINA S.R.L.
in favor of Cablevisión S.A.

This transaction is subject to the corresponding
administrative approval of the CNDC.

11.4.4.2. Status of the frequencies allocated to

NEXTEL.
Through Resolution No. 325/2015, AFTIC
decided, abruptly and without prior notice of its
decision, to dismiss the requests for extensions
of certain frequencies allocated to NEXTEL,
revoking them in that same act.

On October 9, 2015 Grupo Clarín and
Cablevisión filed an appeal against Resolution
No. 325/2015 grounding their legitimate
interest on their acquisition of 49% of the
licensee.

NEXTEL first requested the suspension of the
effects of Resolution No. 325/2015 and then
filed an appeal against that administrative act.

The ENACOM issued Resolution No.
134/2016, whereby it decided to grant partially
the appeal filed by NEXTEL
COMMUNICATIONS ARGENTINA S.R.L.
against AFTIC Resolution No. 325/2015.
Even though this Resolution did not entail the
automatic extension of the frequencies involved,
the ENACOM ordered the corresponding
areas to analyze each file to verify compliance
with the requirements of the effective regulatory
framework to be eligible for obtaining the
requested extensions.

254

11.4.4.3. Other requests for authorization filed with

the ENACOM
On June 22, 2016, NEXTEL made a filing with
the ENACOM in order to request authorization
for direct and indirect share transfers that would
imply a direct and/or indirect change of control
in favor of NEXTEL, pursuant to Section 13
of Law No. 27,078 with respect to the licensees
of telecommunication services listed below:

• Fibercomm S.A.
• Trixco S.A.
• Callbi S.A.
• Infotel S.A.
• Skyonline de Argentina S.A.
• Netizen S.A.
• Eritown Corporation Argentina S.A.

Within the required term, on January 6, 2017,
the ENACOM issued Resolution No.
111/2017, which under section 1 authorizes
the share transfers mentioned above.

The filing made on June 22, 2016 also
included a request to change the allocation of a
portion of the spectrum that corresponds to
the licensees acquired by the Company in order
to render 4G services, which was not addressed
in ENACOM Resolution No. 111/2017.

Notwithstanding the foregoing, taking into
consideration the new regulations provided
under Decree No. 1,340/16 and Resolution
No. 171/2017 issued by the Ministry of
Communications, NEXTEL reformulated the
original request in accordance with the
new effective regulations, thus initiating a new
administrative file. In this last filing, the
Company finally requested:

allocated to those licensees to render their
respective services;
• The approval of the registration requested
by NEXTEL of the Advanced Mobile
Telecommunications Service; and,
• The authorization of the change that allows for:
• Changing the allocation and channeling
on a primary basis of the 905-915 MHz and
950-960 MHz bands to render advanced mobile
communication services at national level with
primary status; and,
•Extending the allocation of the frequency
bands and changing the and channeling from
2500 MHz to 2690 MHz to render advanced
mobile communication services at national
level with primary status.

By means of Resolution ENACOM No.
1033/2017, the ENACOM provided for the
use of the frequency bands between 905 and
915 MHz and between 950 and 960 MHz
for the rendering of the ADVANCED
MOBILE COMMUNICATIONS SERVICE
(“SCMA”), and by means of Resolution
ENACOM No. 1034/2017, the ENACOM
provided for the use of the frequency band
between 2500 and 2690 MHz for the provision
of SCMA, in addition to the current services
when their coexistence is possible.

On March 6, 2017, Nextel was served with
Resolution ENACOM No. 1,299 /2017, which
was published in the Official Gazette on
March 7, 2017 and approves the project for
Refarming with Economic Compensation,
filed by that company to provide Advanced
Mobile Communication Services in the
frequencies that had been subject to changes
in allocation pursuant to ENACOM
Resolutions No. 1,033 and 1,034/2017.

In addition, the ENACOM decided to register
Nextel as provider of Advanced Mobile
Communication Services in the Registry of
Services; and to authorize the use of the
above-mentioned frequencies.

In the same resolution and as part of the
authorization, that agency imposed additional
Coverage Obligations on Nextel.

It also imposed two obligations that must be
fulfilled prior to initiating the rendering of
Advanced Mobile Communication Services:
(i) the return of a portion of the radio-electric

255

spectrum, as proposed by Nextel; and (ii) the
creation of a guarantee issued in favor of and
satisfactory to ENACOM for an amount equal
to the value of the radioelectric spectrum that
is subject to return.

The Resolution also orders that Nextel shall
post a performance bond to guarantee the
obligations and responsibilities undertaken by
that company, to be issued in favor and to
the satisfaction of the ENACOM, for the
amount and under the terms that shall be set
forth in the contract to be executed with
the ENACOM. That contract shall establish
the terms, conditions, goals, obligations and
other matters inherent to the rendering of
the Advanced Mobile Communication Services
authorized by that agency, to which Nextel
shall be bound.

11.4.5. Other Matters Related to the Federal

Broadcasting Committee (COMFER, for its

Spanish acronym), subsequently Audiovisual

Communication Services Law Federal Enforcement

Authority (AFSCA), now ENACOM (for its

Spanish acronym).

ARTEAR.
Certain payment agreements that had been
delivered by AFSCA to ARTEAR were
deemed to enter into effect as of July 2, 2015.
That company was authorized to adhere
to the payment plan relating to infringements
committed between November 21, 2002 a
nd June 23, 2010, payable in sixty monthly
installments starting on August 31, 2015.
ARTEAR was also authorized to adhere to the
applicable payment plan for infringements
committed between June 24, 2010 and June 11,
2014, payable in thirty monthly installments
starting on August 31, 2015.

11.4.6. Programming Grid
AFSCA Resolution No. 296/2010, as amended
and/or supplemented, provided guidelines for

the organization of the programming grids
that had to be followed by the owners of
subscription television audiovisual services. This
resolution regulated section 65, subsections
a) and b) of the LSCA and supplemented the
provisions of the regulations to the same
section of Decree No. 1,225/2010.

Insofar as Cablevisión is concerned, as of the
date of these financial statements, an
injunction issued in re “CABLEVISIÓN S.A.
v. NATIONAL GOVERNMENT AND
OTHERS ON COMPLAINT FOR THE
PROTECTION OF CONSTITUTIONAL
RIGHTS” by the Federal Court of Appeals of
the City of Mar del Plata, whereby that Court
revoked the decision rendered in the First
Instance, remains in full force and effect. The
decision rendered in the First Instance had
ordered the dismissal of Cablevisión’s request.
The Court of Appeals ordered AFSCA to
suspend – until a final decision was rendered on
the matter – the application of the penalties
derived from the alleged non-compliance with
section 65 of Law No. 26,522 and Decree No.
1.225/2010. Therefore, it also suspended the
application of section 6 of AFSCA Resolution
No. 296/2010 on the grounds that Cablevisión’s
alleged serious non-compliance was not
contemplated in the Law or in the Decree.
The National Government filed an appeal with
the Supreme Court against this decision. Such
appeal was dismissed. Consequently, AFSCA
filed a direct appeal with the Supreme Court,
which is still pending resolution.

256

In re “AFSCA v. CABLEVISION SA Decree
1,225/10 – RES. 296/10 on/ Proceeding
leading to a declaratory judgment” currently
pending before the Federal Court of First
Instance on Administrative Matters No. 9, on
May 16, 2012 the Court granted an injunction
that had been requested by AFSCA, ordering
Cablevisión and/or the pay television
audiovisual services it exploits, to conform to
Section 65, paragraph 3 b of Decree No.
1,225/2010 and Sections 1, 2, 3, 4 and 5 of
AFSCA Resolution No. 296/2010, until a final
judgment is rendered on the merits of the case.
Cablevisión has appealed such injunction.

On August 6, 2012, Cablevisión was served
notice of a decision rendered by the Federal
Court of First Instance on Administrative
Matters No. 9 of the City of Buenos Aires,
whereby that court imposed a fine on
Cablevisión of Ps. 20,000 per day for each day
of delay in complying with the injunction
that ordered Cablevisión to comply with Section
65 of Decree No. 1,225/2010 and AFSCA
Resolution No. 296/2010. Cablevisión filed an
appeal against that decision in due time and
form. However, the Court of Appeals ignored
the strong grounds asserted by Cablevisión;
partially confirmed the decision rendered in the
first instance; and reduced the fine to Ps. 2,000
per day for each day of delay, to be calculated
as from the date the decision is deemed final.
An appeal was filed with the Supreme Court of
Argentina, which was dismissed by the
intervening Chamber. Cablevisión filed an
appeal against such decision, which was
dismissed by the Supreme Court of Argentina.

On October 21, 2013 Cablevisión was served
with new charges brought for alleged
noncompliance with AFSCA Resolution No.
296/2010, clearly violating the preliminary
injunction mentioned above. Accordingly,
Cablevisión filed an appeal, but no decision has
been rendered on the matter as of the date of
these financial statements.

11.4.7. Audiovisual Communications Law of the
Republic of Uruguay.
Law No. 19,307 was published in the Official
Gazette of the Republic of Uruguay on January
14, 2015. This Law governs radio, television,
and other audiovisual communication services
(hereinafter, the “Audiovisual Communications
Law”). Section 202 of this law provides
that the Executive Branch shall issue the
implementing regulations for this law within a
120-day term as from the day following the
publication of this law in the Official Gazette.
As of the date of the financial statements,
only Decree No. 45/015 has been issued, but
the implementing regulations for most of
the sections of this law are still pending. Such
Decree provides that the concession for the use
and allocation of the radio-electric spectrum
for non-satellite audiovisual communication
services shall be granted for a term of 15 years.

Section 54 of the Audiovisual Communications
Law provides that an individual or legal entity
cannot be allocated the full or partial ownership
of more than 6 authorizations or licenses
to render television services to subscribers
throughout the national territory of Uruguay.
Such limit is reduced to 3 if one of the
authorizations or licenses includes the
department of Montevideo. Section 189 of
this law provides that in the cases where
such limits were exceeded as of the entry into
force of the Law, the owners of those audiovisual
communication services shall transfer the
necessary authorizations or licenses so as not to
exceed the limits mentioned above within a term
of 4 years as from the date of entry into force of
the Audiovisual Communications Law.

257

Adesol S.A. is analyzing the possible impact
on its business that could be derived from the
change in the regulatory framework and the
eventual legal actions it may bring to safeguard
its rights and those of its shareholders.
That company is also monitoring the different
unconstitutionality claims filed by other
companies against certain sections of the
above-mentioned law to consider whether the
decisions to be rendered by the Supreme
Court in those proceedings may be favorable
to the position of Adesol S.A. in the future.
On April 7, 2016, 28 unconstitutionality
claims were brought against the above
mentioned law. To date, the Supreme Court
has issued 28 decisions, whereby it declared
the unconstitutionality of Sections 39
subsection 3, 55, 56 subsection 1, 60 point C,
98 subsection 2, 117 subsection 2, 143 and
149 subsection 2 of Law No. 19,307. It is
noteworthy that some of the decisions
rendered in this respect by the Supreme Court
dismissed the unconstitutionality claim
filed by the claimant with respect to Section
54 of that Law.

Note 12

Capital Stock Structure
Upon the Company’s public offering
during 2007, the capital stock amounted to
Ps. 287,418,584, represented by:

- 75.980.304 Class A common, registered,
non-endorsable shares, with nominal value of
Ps. 1 each and entitled to 5 votes per share.

- 186,281,411 Class B book-entry common
shares, with nominal value of Ps. 1 each and
entitled to 1 vote per share.

- 25,156,869 Class C common, registered,
non-endorsable shares, with nominal value of
Ps. 1 each and entitled to 1 vote per share.

On October 5 and 11, 2007, the CNV and
BCBA, respectively, granted authorization for
the Company’s admission to the initial public
offering of its capital stock. Said authorizations
contemplated (i) the public offering of its Class
B book-entry common shares, (ii) the listing
of its Class B book-entry common shares, and
(iii) the listing of its registered non-endorsable
Class C common shares, trading of which
was suspended due to restrictions on transfers
set forth by the Bylaws. Also in the last quarter
of 2007, the Company was granted
authorization for the listing of its GDSs in the
LSE. Each GDS represents two of the
Company’s Class B common shares.

Note 13

Long-Term Savings Plan for Employees
During the last quarter of 2007, the
Company, together with its subsidiaries, began
to implement a long-term savings plan for
certain executives (directors and managers
comprising the “executive payroll”), which
became effective in January 2008. Executives
who adhere to such plan undertake to
contribute regularly a portion of their salary
(variable within a certain range, at the
employee’s option) to a fund that will allow
them to strengthen their savings capacity.
Each company of the Group where those
executives render services will match the sum
contributed by such executives. This matching
contribution will be added to the fund raised
by the employees. Under certain conditions,
the employees may access such funds upon
termination of their participation in the long-
term savings plan.

258

plan related to the executive’s years of service
with the Group. As of December 31, 2016,
such supplementary contributions made by the
Company on a parent company only basis
amount to approximately Ps. 14 million, and
the charge to income is deferred until the
retirement of each executive.

During 2013, and in view of the current
environment, certain changes were made to the
savings system, though maintaining in its
essence the operation mechanism and the main
characteristics with regard to the obligations
undertaken by the company.

Loans (i)

Less: Cash and Cash Equivalents

Cash and Banks

Other Current Investments

Net Debt

Equity

Note 14

Financial Instruments

14.1 Financial Risks Management
Grupo Clarín is a party to transactions
involving financial instruments, which entail
exposure to market, currency and interest rate
risks. The management of these risks is based
on the particular analysis of each situation,
taking into account its own estimates and those
made by third parties of the evolution of the
respective factors.

14.1.1 Capital Risk Management
Grupo Clarín manages its capital structure
seeking to ensure its ability to continue as an
ongoing concern, while maximizing the return
to its shareholders through the optimization
of debt and equity balances.

The debt-to-equity ratio for the years ended
December 31, 2016 and 2015 is as follows:

December 31, 2016

December 31, 2015

371,288,260

287,999,976

(34,438,063)

(84,222,441)

252,627,756

(12,193,114)

(19,848,419)

255,958,443

9,626,387,056

7,232,950,673

Debt-to-Equity Ratio

0.03

0.04

(i) Long-term and short-term loans, including
derivatives and financial guarantee agreements.

Since Grupo Clarín is a holding company, the
measurement of this ratio on the Company’s
parent company only balances is not relevant.

259

December 31, 2016

December 31, 2015

34,438,063

153,694,072

84,222,441

272,354,576

371,288,260

39,264,409

410,552,669

12,193,114

153,785,760

19,848,419

185,827,293

287,999,976

59,586,800

347,586,776

14.1.2 Categories of Financial Instruments

Financial Assets
Loans and Receivables (1 ) (2 )
- Cash and Banks

- Other Receivables

At fair value with an impact on net income

- Current Investments

Total Financial Assets

Financial Liabilities

At amortized cost
- Debt (3 )
- Accounts Payable and Other Liabilities (4 )
Total Financial Liabilities

(1) Net of the allowance for doubtful accounts
of Ps. 33.9 million and Ps. 33.8 million, as of
December 31, 2016 and 2015, respectively.
(2) Includes receivables with related parties of
Ps. 150.4 million and Ps. 150.9 million, as
of December 31, 2016 and 2015, respectively.
(3) Includes debts with related parties of Ps. 368
million and Ps. 288 million, respectively, as of
December 31, 2016 and 2015.
(4) Includes debts with related parties of Ps. 3.9
million and Ps. 2.2 million, respectively, as of
December 31, 2016 and 2015.

14.1.3 Objectives of Financial Risk Management
Grupo Clarín monitors and manages the
financial risks related to its operations; these
risks include market risk (including exchange
risk, interest rate risk and equity price risk),
credit risk and liquidity risk.

Grupo Clarín does not enter into financial
instruments for speculative purposes as common
practice. As of December 31, 2016 and 2015,
the Company was not a party to agreements
involving derivatives.

14.1.4 Exchange Risk Management
Grupo Clarín enters into foreign currency
transactions; therefore, it is exposed to
fluctuations of exchange rates.

The Company does not currently enter into
foreign exchange hedging transactions to
manage foreign currency fluctuation risk. In
case the Company enters into such transactions,
it cannot assure that those operations will
protect its financial position from the eventual
negative effect of exchange rate fluctuations.

260

The following table shows the monetary assets
and liabilities denominated in foreign currency
(US dollars) at the closing of the years ended
December 31, 2016 and 2015:

Assets

Current Assets

Cash and Banks

Other Investments

Other Receivables

Total Current Assets

Total Assets

Liabilities

Current Liabilities

Debt

Total Current Liabilities

Non-Current Liabilities

Debt

Total Non-Current Liabilities

Total Liabilities

Bid/offered exchange rates as of December 31,
2016 and 2015 were of Ps. 15.79 and Ps. 15.89;
and Ps. 12.94 and Ps. 13.04; respectively.

14.1.4.1 Foreign Exchange Sensitivity Analysis
Grupo Clarín is exposed to exchange risk,
mainly with respect to the US dollar.

The following table shows the Company’s
sensitivity to an increase in the exchange rate

USD

December 31, 2016

December 31, 2015

79,049

1,575,904

1,090

1,656,043

23,147,452

101,142

1,533,881

1,090

1,636,113

22,065,151

of the US dollar. The sensitivity rate represents
Management’s assessment of the possible
reasonable changes in exchange rates. The
sensitivity analysis only includes the outstanding
monetary items denominated in foreign currency
and adjusts its translation at the end of the
year with a 20% increase in the exchange rate,
assuming that all the remaining variables
remain constant.

Effect in Ps.
December 31, 2016

Effect in Ps.
December 31, 2015

Net Income

(68,332,818)

(53,311,653)

261

The sensitivity analysis presented above is
hypothetical since the quantified impact is not
necessarily an indicator of the actual impact,
because exposure levels may vary over time.

14.1.5 Interest Rate Risk Management
At the closing of the year, the Company does
not have any financial liabilities with variable
interest rates. However, a substantial increase
in interest rates may limit the Company’s ability
to access financing.

Payable on Demand

Without any established term

Due

- Up to three months

- More than three months and up to six months

14.1.6 Credit Risk Management
Credit risk is defined as the risk that one of the
parties may breach its contractual obligations,
generating an eventual financial loss for Grupo
Clarín. The Company renders services solely
to companies of the same economic group. The
credit risk on liquid funds is limited due to the
fact that the counterparties are banks with high
credit ratings issued by credit rating agencies.

The following table details the maturities
of the Company’s financial assets as from the
closing of the reporting year. The amounts
disclosed in the table are the undiscounted
contractual cash flows.

December 31, 2016

December 31, 2015

118,660,504

150,102,249

2,880,412

711,411

272,354,576

32,041,533

148,670,847

5,114,913

185,827,293

14.1.7 Liquidity Risk Management
The Board of Directors is ultimately responsible
for liquidity management. Accordingly, it has
established an adequate framework to manage
liquidity so that Management can meet short,
medium and long-term financing requirements,
as well as the Company’s liquidity management.
The Company manages liquidity risk
maintaining an adequate level of reserves,
financial facilities and loans, monitoring on an

ongoing basis projected cash flows against
actual cash flows and reconciling the maturity
profiles of financial assets and liabilities.

14.1.8 Interest Rate Risk and Liquidity Risk Table
The following table details the maturities of
the Company’s financial liabilities as from the
closing of the reporting year. The amounts
disclosed in this table represent undiscounted
cash flows (principal plus contractual interest):

Without any established term

5,310,702

Accounts Payable

Total as of

Debt

and Other Liabilities

December 31, 2016

Due

Up to three months

More than three months

and up to six months

More than four years

and up to five years

3,475,247

28,979,107

32,454,354

4,974,600

489,097,427

492,572,674

39,264,409

489,097,427

531,837,083

262

14.1.9 Financial Instruments at Fair Value
The following table shows Grupo Clarín’s
financial assets and liabilities measured at fair
value at the closing of the reporting year:

December 31, 2016

Quoted Prices (Level 1)

Other Significant

Observable Items

(Level 2)

Assets

Current Investments

84,222,441

59,338,922

24,883,519

December 31, 2015

Quoted Prices (Level 1)

Other Significant

Observable Items

(Level 2)

Assets

Current Investments

19,848,419

Financial assets are valued using quoted prices
for identical assets and liabilities (Level 1),
or the prices of similar instruments arising from
sources of information available in the market
(Level 2). As of December 31, 2016 and 2015,
the Company did not have any asset or liability
for which a comparison had not been conducted
against observable market data to determine
their fair value (Level 3).

1/14/2010. Fair Value of Financial Instruments
The book value of cash and banks, accounts
receivable and short-term liabilities is similar to
the fair value because these are instruments
with short-term maturities.

As of December 31, 2016 and 2015, the
Company did not have long-term financial
liabilities.

Note 15

Covenants, Sureties and Guarantees provided
a. Note 5.12.1 to the consolidated financial
statements sets forth certain restrictions to which
Cablevisión (by itself and as the surviving
company and successor of Multicanal and Prima
as a result of the mergers) is subject pursuant to
the financial obligations described in such note.

b. IESA is subject to contractual restrictions
on the transfer of its equity interest in TRISA
and Tele Net Image Corp.

c. During the year 2009, AGR purchased a
binding machine on credit. To secure the
transaction, AGR granted the supplier a pledge
over the machine. AGR granted joint and several
guarantees for the loans granted by Banco
Comafi S.A. and Standard Bank Argentina S.A.
to Artes Gráficas del Litoral S.A.

d. On September 25, 2012, GCGC executed
a mortgage agreement on a building of its
property securing the payment of the obligations
under the loan with Banco de la Ciudad de
Buenos Aires mentioned in Note 5.12.3
consolidated financial statements. Grupo Clarín
acts as guarantor of said financing.

e. During 2014, AGR financed the acquisition
of machinery and equipment through leasing
agreements mentioned in Note 5.12.2 to the
consolidated financial statements. Grupo Clarín
and AGEA are joint debtors of said financing.

f. On July 24, 2015, Grupo Clarín became
the guarantor of certain financial obligations of
AGEA, AGR and Cúspide with Banco Itaú
Argentina S.A.

g. In April 2016, Grupo Clarín became the
guarantor for up to Ps. 65 million to secure

263

certain financial obligations of AGEA with
Banco Ciudad de Buenos Aires.

h. During this year, the Company became the
guarantor of a loan granted by Banco Santander
Rio S.A. to GCGC. The guarantee will be
effective until January 2019.

i. During this year, the Company became the
guarantor of a loan granted by Banco Santander
Rio S.A. to Auto Sport. The guarantee will be
effective until February 2019.

Note 16

Changes in the Company’s Interests
a. During 2007, AGEA increased its interest in
CIMECO from 33.3% to 50.0%, and executed
call and put options on an additional interest in
CIMECO’s capital stock. During 2008, AGEA
partially assigned the rights and obligations
arising from such options to its subsidiary AGR
and to the Company. Subsequently, in 2008,
AGEA, AGR and the Company exercised such
call option, increasing, directly and indirectly,
the Company’s equity interest in CIMECO and
Papel Prensa to 100% and 49%, respectively.

On April 10, 2008, the Company and the
parties to the above-mentioned transaction
notified CNDC of such transaction and on May
12, 2008 filed form F-1. After such notice and
as of the date of these financial statements,
the Company submitted additional information
requested by the CNDC. As of the date of these
financial statements, the above transaction is
subject to administrative approvals.

On February 3, 2017, the Company, AGEA and
AGR were served with Resolution No. 75 issued
by the Secretariat of Trade of the Ministry of
Production on January 31, 2017 corresponding
to CNDC Opinion No. 1,417 dated December
22, 2016, whereby it authorized the above-
mentioned transaction.

sets forth certain objectives to be met by such
group of companies. In case of breach of
such provision, the sellers shall have to pay an
indemnification. On February 8, 2017, IESA
was served with Resolution No. 59 issued by
the Secretariat of Trade of the Ministry of
Production on January 31, 2017 corresponding
to CNDC Opinion No. 1,407 dated December
15, 2016, whereby it authorized the above-
mentioned transactions.

c. On September 2, 2008, ARTEAR increased
its equity interest in Pol-Ka and SB Producciones
S.A. to 55% of such companies’ capital stock
and votes, thus acquiring a controlling interest
in both companies, in which it previously
exercised common control. On February 8,
2017, ARTEAR was served with Resolution No.
73 issued by the Secretariat of Trade of the
Ministry of Production on January 31, 2017
corresponding to CNDC Opinion No.
1,406 dated December 15, 2016, whereby it
authorized the above-mentioned transactions.

d. On February 10, 2011, CMD sold to a
third party all of its shares of Dinero Mail, for
approximately USD 4.4 million in cash; part
of the price was withheld as guarantee.

e. On August 17, 2011, CMD executed a stock
purchase agreement, whereby it increased
by 20% its interest in Interpatagonia S.A. (now
Interwa S.A.), where it now holds 80% of the
capital stock. CMD paid approximately Ps. 4.3
million in consideration for the shares.

On November 25, 2014, one of the sellers of
Interwa S.A.’s shares, as mentioned in Note
10 to these consolidated financial statements,
exercised its put option for 6.66% of the shares
of that company for approximately Ps. 1.5
million, payable in six monthly installments as
from December 2014.

On January 8, 2015, CMD exercised the call
option for an additional 6.66% of the equity
interest in Interwa S.A. as mentioned
under Note 10 to these consolidated financial
statements, for approximately Ps. 1.5 million,
payable in five monthly installments as from
January 2015.

f. On September 30, 2015, ARTEAR and
AGEA, together with other companies, created a
company under the name “RPA Media Place

264

S.A.,” engaged in advertising on digital websites,
with an equity capital of Ps. 100,000. Each
of ARTEAR and AGEA hold a 19% interest in
RPA Media Place S.A. As of the date of these
financial statements, the incorporation of that
company is pending registration with the IGJ.

g. On August 20, 2015, FEASA together with
Publirevistas S.A., created a company under
the name “Exponenciar S.A.,” engaged in the
organization, development and operation of
fairs, exhibitions, seminars and conferences,
with an equity capital of Ps. 100,000. FEASA
holds a 50% interest in Exponenciar S.A.
As of the date of these financial statements, the
incorporation of that company is pending
registration with the IGJ.

h. On October 8, 2015, CMD entered into a
stock purchase agreement, whereby it increased
its interest in Electro Punto Net S.A. by
26%. The amount of this transaction is of
approximately Ps. 11.8 million. In December
2015, Electro Punto Net S.A. capitalized
irrevocable contributions made by CMD for
Ps. 8 million, increasing CMD’s interest in
the capital stock of Electro Punto Net S.A. to
54.3%. In December 2016, Electro Punto
Net S.A. capitalized irrevocable contributions
made by CMD for Ps. 86 million, increasing
CMD’s interest in the capital stock of Electro
Punto Net S.A. to 65.6%.

i. On September 10, 2015, the Board of
Directors of Cablevisión approved the assignment
of the rights and obligations held by Grupo
Clarín under an offer it had submitted to NII
Mercosur Telecom, S.L.U. and NII Mercosur
Móviles, S.L.U. (hereinafter, the “Sellers”)
for the acquisition of 49% of the capital stock
of NEXTEL COMMUNICATIONS
ARGENTINA S.R.L. and an option to acquire,
together with its subsidiary Televisión Dirigida
S.A., subject to certain conditions -among them,
the regulatory approvals- 51% of the remaining
capital stock. The price of the transaction was
USD 165 million (out of this amount, USD 80
million accounts for 49% and USD 85 million
accounts for 51%) plus the right to collect
an additional amount of up to USD 13 million
subject to the fulfillment of certain conditions.
The offer submitted by Grupo Clarín was subject
to the acceptance of the Sellers. On September
11, 2015, the Sellers accepted the offer submitted
by Grupo Clarín and, on the same date, the

Sellers accepted the assignment of the rights
under such offer in favor of Cablevisión, offering
Cablevisión the acquisition of 49 % of the capital
stock of NEXTEL and the option to acquire
the remaining 51%. In order to guarantee the
rights and obligations under the offer, the capital
stock owned by NII Mercosur Móviles, S.L.U
was pledged (subject to registration with the
Public Registry of Commerce). The transaction
was executed on September 14, 2015 with
the aggregate payment by Cablevisión and its
subsidiary of USD 159 million. The companies
undertook to create an USD 6 million guarantee
fund with the balance to cover any potential
liabilities of NEXTEL (this fund was set up on
October 7, 2015). In addition, upon the
fulfillment of certain conditions precedent, on
October 1, 2015, Cablevisión paid to the Sellers
the additional amount of USD 12.73 million.
On June 3, 2016, the assignment of 49% of the
capital stock of NEXTEL in favor of Cablevisión
was registered with the IGJ. Under the terms
of the offer, NEXTEL would continue to be
controlled and operated by the Sellers until
the option to acquire the remaining 51% of the
capital stock had been exercised.

In addition, on January 27, 2016, Cablevisión
and its subsidiary Televisión Dirigida S.A.
decided to exercise the option to acquire the
remaining 51% of the capital stock and votes
of NEXTEL, and, consequently, Cablevisión
became the holder of 51.4% of the capital
stock and votes of NEXTEL and Televisión
Dirigida S.A. became the holder of the
remaining 48.6%.To such effect, on the same
date, NEXTEL’s management took notice
of the release of the pledge that had been set
up to guarantee the rights and obligations
under the offer. On July 26, 2016, the IGJ
registered the assignment of the remaining 51%
of the capital stock (see Note 11.4.4.).

265

On June 30, 2016, the controlled company
Televisión Dirigida S.A. performed the transfer
of: (i) 392,774,929 membership interests
with nominal value of Ps. 1 each and entitled
to one vote per membership interest,
representing 48.5% of the capital stock and
votes of NEXTEL, in favor of Cablevisión;
and (ii) 1,000,000 membership interests with
nominal value of Ps. 1 each and entitled to
one vote per membership interest, representing
0.1% of the capital stock and votes of NEXTEL,
in favor of PEM S.A. As a consequence of the
above-mentioned assignments of membership
interests, Cablevisión holds a 99.9% interest
in the capital stock and votes of NEXTEL, and
the remaining 0.1% is held by PEM S.A. Those
transactions were registered with the IGJ on
November 25, 2016.

On December 28, 2016, PEM S.A. transferred
to Cablevisión 1,000,000 membership interests
with nominal value of Ps. 1 each and entitled
to one vote per membership interest,
representing 0.1% of the capital stock and votes
of NEXTEL. As a result of the assignment
of the membership interests described above,
Cablevisión became the holder of 810,236,480
membership interests with nominal value of
Ps.1 and entitled to one vote per membership
interest, representing 100% of the capital stock
and votes of NEXTEL. The Company has
filed with the IGJ the registration of the
assignment of the membership interests, which,
to date, is pending before that agency.

As of December 31, 2015, Cablevisión
concluded the process of allocating the
acquisition cost of 49% of the capital stock
of NEXTEL and calculated a gain from
this acquisition of Ps. 316.7 million, taking
into consideration that the valuation of
its identifiable assets, liabilities and contingent
liabilities in proportion to its equity interest
exceeds the acquisition cost.

During this year, Cablevisión concluded the
process of allocating the acquisition cost
of 51% of the capital stock of NEXTEL and
calculated a gain from this acquisition of
Ps. 114.1 million, taking into consideration
that the valuation of its identifiable assets,
liabilities and contingent liabilities in
proportion to its equity interest exceeds the
acquisition cost.

j. In June 2016, Cablevisión, together with its
subsidiary NEXTEL, acquired 100% (97%
NEXTEL and 3% Cablevisión) of the capital
stock of Fibercomm S.A. and Gridley
Investments S.A. both owners of 100% of the
capital stock of Trixco S.A., holder of licenses for
the use of the radioelectric spectrum in the 900
Mhz bands. NEXTEL acquired 100% of the
capital stock of WX Telecommunications LLC
and Greenmax Telecommunications LLC, which
are the controlling companies of Skyonline
Argentina S.A., Netizen S.A., Infotel S.A. and
Callbi S.A., among the most relevant. The latter
render wireless telecommunications services
and hold licenses for the use of the radioelectric
spectrum in the 2.5 Ghz bands. The aggregate
price for those transactions was USD 138.2
million, equivalent to Ps. 2,036 million.

During the year, Cablevisión concluded the
process of allocating the acquisition cost
of 100% (97% to NEXTEL and the remaining
3% to Cablevisión) of the capital stock of
Fibercomm S.A. and Gridley Investments S.A.,
both owners of 100% of the capital stock of
Trixco S.A., and calculated goodwill from this
acquisition in the amount of Ps. 801.7 million.

k. On June 30, 2016, the Company executed
an agreement with GC Minor for an assignment
of shares, whereby it purchased for Ps. 10,000
the interest that GC Minor had in CLC, which
accounted for 0.0005% of the capital stock and
votes of that company.

l. During this year, GC Minor and the
Company executed agreements for the purchase
and sale of shares of GCGC. In connection
with these operations, the Company holds a loan
with GC Minor for Ps. 50,000 payable within
180 days as from December 30, 2016.

As of December 31, the Company holds a 97%
interest in GCGC.

m. On June 30, 2016, the Company, as the sole
shareholder, formed a new subsidiary, “GCSA
Equity, LLC”.

n. During 2016, the Company and CMD
executed Agreements relating to Irrevocable
Contributions on Account of Future Share
Subscriptions whereby the Company made a
Ps. 84.8 million contribution to CMD.

266

o. On August 8, 2016, a subsidiary of CMD,
Electro Punto Net S.A., executed an asset
transfer agreement, whereby it acquired from
Meroli Hogar S.A. certain assets related to
the business of online retail and sale of home
appliances and electronic products in the
Province of Córdoba. The transaction includes
negative covenants to be fulfilled by the
shareholders of Meroli Hogar S.A. The
aggregate amount of these transactions is of
USD 3.5 million, out of which USD 2.75
million is payable on the date of execution
of the agreement and the rest is payable
on the first anniversary of the execution date.

p. During 2016, the Company and AGEA
executed Agreements relating to Irrevocable
Contributions on Account of Future Share
Subscriptions whereby the Company made an
approximately Ps. 665.7 million contribution
to AGEA.

q. During 216, the Company and GC Minor
executed Agreements relating to Irrevocable
Contributions on Account of Future Share
Subscriptions whereby the Company made
an approximately Ps. 25.3 million contribution
to GC Minor.

r. IESA and ARTEAR agreed to implement a
corporate reorganization process whereby
ARTEAR, as Absorbing Company, absorbed
certain assets, liabilities, rights and obligations
that were spun off IESA’s equity, among
which are the following cable television signals:
“El Trece Satelital”, “Quiero Música en mi
Idioma”, “Volver” and “Magazine”. Thus,
IESA transferred to ARTEAR all the rights and
obligations that make up the Spun-off Equity
of IESA. ARTEAR will continue with the
activities related to IESA’s Spun-off Equity, i.e.,
the exploitation of the above-mention cable
television signals. The spin-off - merger was
executed based on the equity position disclosed
in the financial statements of those companies
as of June 30, 2016. The spin-off - merger
is effective as from October 1, 2016, inclusive,
date on which ARTEAR continued with
the operations of IESA’s Spun-off Equity, thus
generating the corresponding operating,
accounting and tax effects. On September 20,
2016, the Extraordinary Shareholders’ Meetings
of both companies approved the Pre-Spin-off -
Merger Commitment. In view of the above, both
companies made a filing with the ENACOM

in order to request the registration of the signals
“El Trece Satelital”, “Magazine, “Quiero Música
en mi idioma” and “Volver” held by ARTEAR.
The ENACOM has already issued the
corresponding certificates registering ARTEAR
as the holder of those cable television signals.

s. On August 16, 2016, the Board of Directors
of Cablevisión approved the Pre-Merger
Commitment executed between that Company,
Copetonas Video Cable S.A., Dorrego Televisión
S.A., Fintelco S.A., Indio Rico Cable Color S.A.,
Primera Red Interactiva de Medios Argentinos
(PRIMA) S.A., Cable Video SUR S.A., Wolves
Televisión S.A. and Tres Arroyos Televisora
Color S.A., whereby, on the effective date of
the merger -October 1, 2016- (“Effective Date
of the Merger”), Cablevisión, as absorbing
company, will continue with the operations of
Copetonas Video Cable S.A., Dorrego Televisión
S.A., Fintelco S.A., Indio Rico Cable Color S.A.,
Primera Red Interactiva de Medios Argentinos
(PRIMA) S.A., Cable Video SUR S.A., Wolves
Televisión S.A. and Tres Arroyos Televisora
Color S.A. (the “Absorbed Companies”), thus
generating the corresponding operating,
accounting and tax effects. As a result of the
above-mentioned corporate reorganization
process, the Absorbed Companies will be
dissolved without liquidation and Cablevisión
S.A. will assume all the activities, receivables,
property and all the rights and obligations
of the above-mentioned companies, existing on
the Effective Date of the Merger, or any that
may exist or arise due to previous or subsequent
acts or activities.

At the Extraordinary Shareholders’ Meeting
of Cablevisión held on September 27, 2016, the
shareholders approved, among other issues:
(i) the Special Parent Company Only Financial
Statement and the Special Balance Sheet for
Merger as of June 30, 2016, which were
used as a basis for the execution of the Pre-
Merger Commitment, and (ii) the Pre-Merger
Commitment executed on August 16, 2016
between Cablevisión and the Absorbed
Companies.

267

exploit Cable Television Services corresponding
to Copetonas Video Cable S.A., Dorrego
Televisión S.A., Indio Rico Cable Color S.A.,
Cable Video Sur S.A., and Tres Arroyos
Televisora Color S.A. The license for Wolves
Televisión S.A. was abandoned because
Cablevisión already has an Area Authorization
in the jurisdiction where Wolves Televisión S.A.
exploited the Cable Television Service. In
addition, PRIMA and Cablevisión made a
filing with the ENACOM in order to request
that Agency to register the license that had
been granted to PRIMA in favor of Cablevisión
as a consequence of the corporate
reorganization process.

In addition, at the Extraordinary Shareholders’
Meeting held on September 27, 2016, the
shareholders also unanimously approved: (i)
the amendment of Article Three of the Bylaws
in order to conform the core business of
Cablevisión to the new regulatory framework
under Laws Nos. 27,078 and 26,522, and (ii)
the amendment of Articles Nine and Ten
of the Bylaws in order to eliminate the Executive
Committee. Both amendments of the Bylaws
were filed with the CNV for its approval.

t. On December 23, 2016, AGR’s shareholders
decided to increase its capital stock by
approximately Ps. 136.9 million, through the
capitalization of irrevocable contributions
made by AGEA in AGR for Ps. 81.7 million
and the capitalization of the loan held by Grupo
Clarín with AGR for approximately Ps. 55.2
million. The registration of such capital increase
is pending before the IGJ.

u. On November 7, 2016, ARTEAR
executed a share assignment, sale and transfer
agreement for Ps. 8.7 million, whereby ARTEAR
acquired 5,225,000 common, registered,
non-endorsable shares, with nominal value of
Ps. 1 each and entitled to 1 vote per share,
representing 100% of the capital stock of
Producciones YAQ S.A. ARTEAR had paid the
full amount under the agreement as of the
date of these financial statements.

v. On October 25, 2016, ARTEAR executed a
share assignment, sale and transfer agreement
for USD 500,000, whereby it acquired 51,699
common, registered, non-endorsable shares,
with nominal value of Ps. 1 each and entitled to
1 vote per share, representing 40.0004% of the

capital stock of Canal Rural Satelital S.A.
ARTEAR had paid the full amount under the
agreement as of the date of these financial
statements.

Note 17

Law No. 26,831 Capital Markets
On December 28, 2012, Capital Markets
Law No. 26,831 (the “Capital Markets Law”),
passed on November 29, 2012 and enacted
on December 27, 2012, was published in the
Official Gazette. The Law provides for a
comprehensive amendment of the public
offering regime, previously governed by Law
No. 17,811. Among other things, the new
law enhances the National Government’s
oversight powers and changes the authorization,
control and oversight mechanisms of all stages
of the public offering process and the role
of all the entities and individuals involved. The
Law became effective on January 28, 2013.

On July 29, 2013, the National Government
issued Decree No. 1023/2013 to regulate
partially the Capital Markets Law that had been
passed on November 29, 2012. Among other
provisions, the Decree regulates Section 20
of said Law, pursuant to which the CNV may
appoint an overseer with veto rights over
the decisions made by the boards of directors
of entities subject to the public offering regime,
or otherwise remove the boards from such
entities for up to 180 days until all deficiencies
found by the CNV are solved. Said Emergency
Decree amends the Law it seeks to regulate
and, therefore, constitutes a regulatory abuse.
Thus, whereas the Law vests on the CNV
the power to appoint an overseer or to remove
the board of directors, the Decree allows the
CNV to exercise that power if the shareholders
and/or noteholders with a two percent (2%)
interest in the company’s capital stock or
outstanding debt securities claim that they have
suffered actual and certain damages or if they
believe their rights may be seriously jeopardized
in the future. The Decree also vests on the
CNV the power to appoint the administrators
or co-administrators that will hold office as a
consequence of the removal of the boards
of directors. Thus, the Decree amends the Law
by granting the CNV powers that were not

268

provided therein. By doing so, the Executive
Branch is assuming strictly legislative functions
in breach of constitutional provisions.

On August 20, 2013, at the request of Mr.
Rubén Mario Szwarc, a minority shareholder of
the Company, and by means of public deed
number two hundred forty five, the Company
was served notice of the decision rendered
by Chamber A of the National Court of
Appeals on Commercial Matters on August
12, 2013, in re “SZWARC, Rubén Mario v.
National Government and Others on
Preliminary Injunction” File No. 011419/2013.
That Chamber decided, among other things,
(i) to declare the unconstitutionality of Sections
. 2, 4, 5, 9, 10, 11, 13, 15 and 16 of Law No.
26,854, and (ii) to order the provisional,
injunctive suspension of Section 20, subsection
a), second part, paragraphs I and II (or 1 and 2)
of Law No. 26,831 and of all laws, rules or
administrative acts issued or that may be issued
pursuant to such legal provisions, with respect
to Grupo Clarín S.A., until the judge that is
finally declared competent to render a decision
on the merits assumes full jurisdiction of the
case and renders a final decision relating to the
injunction.

operations and economic-financial events
at GCGC located at Patagones 2550, City of
Buenos Aires, and at the warehouse located
at Ruta 36 Km 31.500, Florencio Varela,
of the supplier AdeA - Administración de
Archivos S.A., during the periods established
by effective laws.

Note 19

Pursuant to Article 16, Section V of Chapter I
of Title III of the Restated Rules issued by the
CNV, which governs the delisting due to
non-existence of outstanding securities, upon
the extinction of the Series C Notes, AGEA
filed the required documentation with the CNV.

On October 8, 2014, the CNV requested AGEA
to make a filing in connection with the delisting.
On October 16, 2014, AGEA submitted a Note
to the CNV whereby it requested delisting due
to the extinction of its notes.

Note 18

Information required under CNV Resolution No. 629 -

Record Keeping
On August 14, 2014, the Argentine Securities
Commission issued General Resolution
No. 629, which provides for record keeping
regulations.

The Company keeps certain supporting
documentation related to the record of its

Note 20

The Company’s Corporate Reorganization Process
On September 28, 2016, at the Company’s
Extraordinary Shareholders Meeting,
the shareholders approved the execution of
a corporate reorganization process to be
implemented in two successive steps: a) first
the merger of Southtel Holdings S.A., Vistone
S.A., Compañía Latinoamericana de Cable S.A.

269

and CV B Holding S.A. (the “Absorbed
Companies”), through which Grupo Clarín
held a controlling interest in Cablevisión (the
“Merger”), and, b) the subsequent partial
spin-off of the Company to create a new
company under the name Cablevisión Holding
S.A. (the “Spin-off ”, and together with the
Merger, the “Corporate Reorganization”).

The purpose of the Corporate Reorganization
is to enhance efficiency, synergy and
streamlining of the Company’s costs, processes
and resources and to promote the specialization
of the existing asset portfolio of Grupo Clarín
and its subsidiaries. This will allow the
Company to implement differentiated growth
strategies and goals for, on the one hand,
the telecommunications segment, and, on the
other hand, the media business (print, TV,
programming, radio etc.). Thus, each of those
segments will be able to focus on its own
markets, risks, organizational processes and
capital structures.

As a result of the Merger, and since Grupo
Clarín is the direct and indirect holder of 100%
of the capital stock of the absorbed companies,
Grupo Clarín’s capital stock will not be
increased. Therefore, it is not necessary to
establish an exchange ratio. In addition,
the absorbed companies will be dissolved early
without liquidation and Grupo Clarín will
assume, effective as from October 1, 2016 (the
“Effective Date of the Merger"), the activities,
receivables, property, rights and obligations
of the above-mentioned companies, existing on
the Effective Date of the Merger, or any that
may exist or arise due to previous or subsequent
acts or activities.

As part of the equity subject to spin-off, as
provided under the Merger and Spin-off
Prospectus filed with the CNV and published
in the Financial Information Highway, the
Company will transfer to Cablevisión Holding
S.A. certain equity interests or participations
held by Grupo Clarín, including the direct
and indirect equity interests of Grupo Clarín
in Cablevisión and in GCSA Equity, LLC.
Consequently, once the Corporate
Reorganization has been executed, Cablevisión
Holding S.A. will become owner, directly or
indirectly, of 60% of the capital stock and votes
of Cablevisión and of 100% of the participations

of GCSA Equity, LLC. Grupo Clarín will retain
and continue with all the activities, operations,
assets and liabilities that are not specifically
allocated to Cablevisión Holding S.A.

The effective date of the Spin-off (the “Effective
Date of the Spin-off ”) will be the first day of
the month following the date on which the latest
of the following registrations is completed: (i)
the registration of the Corporate Reorganization
with the IGJ, or (ii) the registration of the
incorporation of Cablevisión Holding S.A. with
the IGJ. As of the Effective Date of the
Spin-off, Cablevisión Holding S.A. will begin
its activities on its own account, the accounting
effects of the Spin-off will become effective,
and the operations, risks and benefits described
in the Prospectus published by the Company
will be transferred to Cablevisión Holding S.A.

As a result of the Spin-off of Grupo Clarín,
its equity will be reduced pro rata and part of
the Company’s Class A, Class B and Class C
shares will be cancelled in exchange for a set of
shares of the same class and with substantially
the same rights to be distributed by Cablevisión
Holding S.A. Grupo Clarín will continue to
be subject to the public offering regime in
Argentina and Cablevisión Holding S.A. will
request authorization to be admitted to the
above-mentioned public offering regime in
Argentina. The new company may also apply
to have its shares listed on and admitted to
trading on one or more local or foreign stock
exchanges and/or markets.

The Corporate Reorganization detailed
in this note is executed in compliance with
applicable regulations of the General
Associations Law and subject to obtaining the
regulatory authorizations and/or intervention
(as applicable) from the CNV, Merval, IGJ and
Ente Nacional de Comunicaciones (National
Communications Agency “ENACOM”).

The terms and conditions of the Corporate
Reorganization were established by the Directors
of the Company, who approved the Special
Parent Company Only Financial Statement of
Grupo Clarín as of June 30, 2016, the Special
Balance Sheet for Merger and Spin-off as
of the same date and the Merger -and Spin-off
Prospectus at the Board of Directors’ Meeting
held on August 16, 2016.

270

As of the date of these financial statements,
the registration of the above-mentioned
corporate reorganization process is pending
before the CNV and the IGJ.

Note 21

Subsequent Events
a. The events that took place subsequent to the
closing of this year related to the regulatory
framework applicable to the Company and its
subsidiaries are described in Note 11.1.

b. Due to the strong reconfiguration of the
commercial printing sector, a global
phenomenon that also affects Argentina, at
the beginning of 2017 AGR had to restructure
its activities.

Over the last years, AGR has unsuccessfully
attempted to explore new ways of mitigating the
effects of the drop in mass commercial printing,
and preserve, at least partially, the sustainability
of the Pompeya facility. Unfortunately, the huge
challenge entailed by this change in the industry
(now focused on segmented, personalized and
distributed printing) was not supported by the
internal commission employee delegates, which

systematically rejected all the proposals made by
that company.

The decision to close that facility was aimed at
preserving the sustainability of the rest of AGR’s
operations and at preventing the worsening
of that company’s financial position, in order to
face the payment of severance payments to the
personnel that used to work at that facility.

Notwithstanding the close-down of the Pompeya
facility, AGR intends to continue operating
at whatever scale the market may demand and,
consequently, the matter was considered in these
financial statements based on that premise.

In the morning of January 16, a group of
approximately 40 people, including the members
of said internal commission, broke into the
Pompeya facility, damaging entrance doors,
windows, furniture and security cameras, and
violently removed the employees that were
inside the facility. Many of them are still
at the facility, although the great majority of
the employees have already agreed on their
redundancy and collected their severance
payments for a total amount of approximately
Ps. 200 million as of the date of these
financial statements.

Note 22

Approval of Parent Company only Financial

Statements
The Board of Directors has approved the parent
company only financial statements and
authorized their issue for March 10, 2017.

Signed for identification purposes
with the report dated March 10, 2017

See our report dated March 10, 2017
Price Waterhouse & Co. S.R.L.
C.P.C.E.C.A.B.A. VOL. 1 - FOL. 17

Carlos Alberto Pedro Di Candia
Chairman of the Supervisory Committee

Dr. Carlos A. Pace (Partner)
Certified Public Accountant (UBA)
C.P.C.E.C.A.B.A. VOL. 150 - FOL. 106

Alejandro A. Urricelqui
Vice Chairman and acting Chairman

271

Additional Information
to the Notes to the
Financial Statements -
Section No. 12 Title IV
Chapter III of General
Resolution No. 622/13
of the Argentine
Securities Commission

Balance Sheet as of
December 31, 2016

1. There are no specific material regulatory
regimes currently applicable to the Company
that may entail the contingent loss or
acquisition of legal benefits.

4. The classification of receivables and liabilities
according to their related financial effects is
detailed in Note 9 to the parent company only
financial statements.

2. Note 20 to the parent Company Only
Financial Statements describes the Company’s
current merger-spin-off process, whereby
the Company merged with certain of its current
subsidiaries and will subsequently spin off
to a new company its direct and indirect interest
in Cablevisión.

3. The classification of receivables and liabilities
by maturity is detailed in Note 9 to the parent
company only financial statements.

Without any established term

Due

- Within three months

- More than three months and up to six months

- More than four years and up to five years

Total

(1) Balances are denominated in local currency and
do not accrue any interest.
(2) The balances are denominated in local currency
and accrue interest at a fixed rate.
(3) The balances are denominated in foreign currency
and accrue interest at a fixed rate.

6. There are no trade receivables or loans to
directors, members of the Supervisory
Committee and their relatives up to, and
including, the second degree of kinship and
no such trade receivables or loans existed
during the fiscal year.

7. The Company does not have any inventories.

5. Equity interest under Section 33 of Law
No. 19,550 is detailed in Note 4.3 of the parent
company only financial statements. Accounts
receivable from and payable to related
parties are disclosed under Note 8 to the parent
company only financial statements. The
following table summarizes the breakdown of
such accounts payable and receivable as per
the above points 3) and 4).

Receivables

Liabilities

(1) 148,530,532

3,863,800

(2) 1,882,949
50,000

-
(3) 367,813,013

150,463,481

(1) 371,676,813

8. The Company has used current values for
the valuation of assets and liabilities acquired
from Cablevisión, taking into account, mainly,
the following criteria:

− Subscriber portfolio: valued based on,
among other things, an analysis of the acquired
subscriber portfolio’s cash flow generation,
considering the subscriber turnover of such
portfolio, discounted at a market rate.

272

consideration the projected performance of
the main operating variables of the respective
companies.

13. As of December 31, 2016, the Company
does not have any relevant tangible property,
plant and equipment requiring efficient
insurance coverage.

14. Booked provisions for contingencies do not
exceed, either individually or as a whole, two
percent (2%) of the Company’s shareholders’
equity.

15. As of the date of these financial statements,
the Company does not have any contingent
situations, the financial effects of which, if any,
have not been booked (see Note 11 to the
parent company only financial statements).

16. The Company does not have any irrevocable
contributions on account of future share
subscriptions.

17. The Company does not have any unpaid
cumulative dividends on preferred shares

18. In Notes 7.a. and 10.2.a to the parent
company only financial statements reference is
made to the treatment given to retained
earnings.

− Financial debt: since the acquired companies
were not listed at the time of the acquisition,
the financial debt was valued based on cash flow
discounted at a market rate.

− Fixed assets: valued based on internal
estimates made by the subsidiaries according to
available information (kilometers and technical
characteristics of the network, replacement
value per kilometer and type of network based
on business knowledge and purchase price of
the resources needed, state of the network at the
time of acquisition, real estate appraisals of the
most significant real property, among others).

Similarly, the Company has recorded the net
acquired assets of CIMECO at fair value.

9. The Company does not have any property,
plant and equipment subject to appraisal
write-up.

10. The Company does not have any obsolete
property, plant and equipment.

11. The Company is not subject to the
restrictions under section 31 of Law No.
19,550, since its main corporate purposes
are investment and finance.

12. The Company assesses the recoverable
value of its long-term investments each time it
prepares its financial statements. In the case
of investments for which the Company does not
book goodwill with an indefinite useful life,
it assesses their recoverable value when there is
any indication of impairment. In the case of
investments for which the Company books
goodwill with an indefinite useful life, it assesses
their recoverable value by comparing the book
value with cash flows discounted at the
corresponding discount rate, considering the
weighted average capital cost, and taking into

Signed for identification purposes
with the report dated March 10, 2017

See our report dated March 10, 2017
Price Waterhouse & Co. S.R.L.
C.P.C.E.C.A.B.A. VOL. 1 - FOL. 17

Carlos Alberto Pedro Di Candia
Chairman of the Supervisory Committee

Dr. Carlos A. Pace (Partner)
Certified Public Accountant (UBA)
C.P.C.E.C.A.B.A. VOL. 150 - FOL. 106

Alejandro A. Urricelqui
Vice Chairman and acting Chairman

273

Independent
Auditor’s Report

Free translation from
the original
prepared in Spanish

To the Shareholders, President

and Directors of Grupo Clarín S.A.

Legal domicile: Piedras 1743

Autonomous City of Buenos Aires

CUIT No 30-70700173-5

Report on the Financial Statements
We have audited the attached parent company
only financial statements of Grupo Clarín S.A.
(the “Company”) which comprise the parent
company only balance sheet at December 31,
2016, the parent company only statements of
comprehensive income, of changes in equity and
of cash flows for the year then ended and a
summary of significant accounting policies and
other explanatory information.

The balances and other information corresponding
to the fiscal year 2015 are an integral part of the
audited 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 reasonable preparation and
presentation of the parent company only financial
statements in accordance with International
Financial Reporting Standards (IFRS) adopted
by the Argentine Federation of Professional
Councils in Economic Sciences (FACPCE, for
its Spanish acronym) as professional accounting
standards and incorporated by the Argentine
Securities Commission (CNV, for its Spanish
acronym) into its regulations, as adopted by the
International Accounting Standards Board (IASB).
Further, the Board of Directors is responsible
for the existence of adequate internal control to
prepare the parent company only financial
statements free from material misstatements due
to errors or irregularities.

Auditor’s responsibility
Our responsibility is to express an opinion on the
accompanying parent company only financial
statements based on our audit. We conducted our
audit in accordance with International Standards
on Auditing (ISAs), as adopted in Argentina by
the FACPCE through Technical Resolutions No.
32 and its respective Adoption Communications.
Those standards require that we comply with

ethical requirements and plan and perform the
audit to obtain reasonable assurance whether the
consolidated financial statements are free from
material misstatements.

An audit involves performing procedures to
obtain audit evidence about the amounts and other
information disclosed in the parent company
only financial statements. The procedures selected
depend on the auditor’s judgment, including the
assessment of the risks of material misstatement
in the parent company only financial statements
due to fraud or error. In making those risk
assessments, the auditor must consider internal
control relevant to the Company’s preparation
and reasonable presentation of the parent
company only financial statements in order to
design audit procedures that are appropriate
in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the
Company’s internal control. An audit also includes
evaluating the appropriateness of accounting
policies used and the reasonableness of significant
estimates made by the Company’s management,
as well as evaluating the overall presentation of the
parent company only financial statements.

We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a
basis for our audit opinion.

Opinion
In our opinion, the parent company only financial
statements mentioned in the first paragraph of
this report present fairly, in all material respects,
the parent company only financial position of
Grupo Clarín S.A. as of December 31, 2016, its
the parent company only comprehensive income
and parent company only cash flows for the year
then ended, in accordance with International
Financial Reporting Standards.

Emphasis of Matter paragraph
Without qualifying our opinion, we would like
to emphasize the information contained in Note
10.1.a., to the parent company only financial
statements, which describes the situation related
to the resolution issued by the regulator to
calculate the monthly fee payable by the users of
cable television services, whose decisions cannot
be foreseen to date.

274

Report on compliance with current regulations
In accordance with current regulations in respect to
Grupo Clarín S.A., we report that:

e.3) 6% on the total fees for services invoiced
to the Company, its parent companies, subsidiaries
and affiliates for all concepts in that fiscal year.

a) the parent company only financial statements
of Grupo Clarín S.A. have been transcribed to
the “Inventory and Balance Sheet” book and
comply with the General Associations Law and
pertinent resolutions of the Argentine Securities
Commission, as regards those matters within
our competence;

b) the parent company only financial statements
of Grupo Clarín S.A. arise from accounting records
kept in all formal respects in conformity with
legal regulations which maintain the security and
integrity conditions on the basis of which they
were authorized by the Argentine Securities
Commission;

c) we have read the additional information to the
Notes to the parent company only financial
statements required by section 68 of the listing
regulations of the Buenos Aires Stock Exchange
and Article 12°, Chapter III, Title IV of the
regulations of the Argentine Securities
Commission, on which, as regards those matters
that are within our competence, we have no
observations to make;

d) at December 31, 2016 the debt accrued by
Grupo Clarín S.A.in favor of the Argentine
Integrated Social Security System according to the
Company’s accounting records and calculation
amounted to $3,999,588.68, none of which was
claimable at that date;

e) in accordance with the requirements of Article
21°, Subsection b), Chapter III, Section VI,
Title II of the regulations of the Argentine
Securities Commission, we report that the total
fees for auditing and related services billed to
the Company during the fiscal year ended
December 31, 2016 represent:

f ) we have applied the procedures on prevention
of asset laundering and terrorism funding set forth
in the relevant professional rules issued by the
Professional Council for Economic Sciences of the
Autonomous City of Buenos Aires.

Autonomous City of Buenos Aires,
March 10, 2017

Price Waterhouse & Co. S.R.L.

by Carlos A. Pace (Partner)

275

Supervisory
Committee’s
Report

Free translation from the
original prepared in Spanish

To the Shareholders of:

Grupo Clarín S.A.

TAX ID No. 30-70700173-5

Registered office: Piedras 1743

City of Buenos Aires

I. REPORT ON THE FINANCIAL
STATEMENTS
In our capacity as members of Grupo Clarín
S.A.’s Supervisory Committee and pursuant
to Subsection 5, Section 294, of the Argentine
General Associations Law (Law No. 19,550,
as amended), the regulations of the Argentine
Securities Commission ("CNV", for its Spanish
acronym) and of the Buenos Aires Stock
Exchange ("BCBA", for its Spanish acronym),
we have performed a review of the documents
mentioned below:

Documents subject to review:
a) The attached Parent Company Only Financial
Statements of Grupo Clarín S.A. comprising
the Parent Company Only Balance Sheet as of
December 31, 2016, the Parent Company Only
Statement of Comprehensive Income, the
Parent Company Only Statement of Changes in
Equity and the Parent Company Only Statement
of Cash Flows for the year then ended.

b) The attached Consolidated Financial
Statements of Grupo Clarín S.A. and
its subsidiaries comprising the Consolidated
Balance Sheet as of December 31, 2016, the
Consolidated Statement of Comprehensive
Income, the Consolidated Statement of Changes
in Equity and the Consolidated Statement of
Cash Flows for the year then ended.

c) A summary of the material accounting policies
and other explanatory information.

The balances and other relevant information for
the year 2015 are an integral part of the audited
financial statements mentioned above and shall
be considered in connection with said financial
statements.

II. RESPONSIBILITY OF THE COMPANY’S
MANAGEMENT
The Company’s Board of Directors is responsible
for the preparation and reasonable presentation
of the Parent Company Only and Consolidated
Financial Statements indicated in paragraph I.
in accordance with the International Financial
Reporting Standards (IFRS) adopted as
Argentine professional accounting standards by
the Argentine Federation of Professional Councils
of Economic Sciences, FACPCE, for its Spanish
acronym) and incorporated by the CNV to its
regulations, as approved by the International
Accounting Standards Board (IASB). The Board
of Directors is also responsible for an adequate
internal control as deemed necessary so that the
consolidated and parent company only financial
statements are free from material misstatements
arising from errors or irregularities.

III. RESPONSIBILITY OF
THE SUPERVISORY COMMITTEE
Our responsibility is to report on the documents
indicated in paragraph I. based on our statutory
audit and the audit work carried out by the
Company’s external auditors. We conducted our
review in accordance with Technical Resolution
No. 15 issued by the FACPCE. Said standards
require that the review of the financial statements
be conducted in accordance with effective
auditing standards for the review of financial
statements; that the documents be checked for
consistency with the information on corporate
decisions stated in minutes and that such
decisions conform to the law and the by-laws,
in all formal and documentary aspects.

276

We believe that our work and that of the
Company’s external auditors, detailed in their
respective reports, provides a sufficient and
appropriate basis to support our opinion.
We have not performed any management
control and, therefore, we have not assessed
the business criteria and decisions on
administrative, financing, commercialization
and production matters, since these issues
are the exclusive responsibility of the Company’s
Board of Directors.

IV. OPINION
Based on our review, within the scope
described in Section III. of this report: (i) the
parent company only financial statements
mentioned in paragraph I., present fairly, in all
material respects, the parent company only
financial position of Grupo Clarín S.A. as
of December 31, 2016, the results disclosed
in the parent company only statement of
comprehensive income and in the parent
company only statement of cash flows for the
year then ended, in accordance with the
International Financial Reporting Standards;
and (ii) the consolidated financial statements
mentioned in paragraph I., present fairly,
in all material respects, the consolidated
financial position of Grupo Clarín S.A. and its
subsidiaries as of December 31, 2016, and
the results disclosed in the consolidated
statement of comprehensive Income and in the
consolidated statement of cash flows for the
year then ended in accordance with the
International Financial Reporting Standards.

In order to conduct our professional work on
the documents detailed in paragraph I. of this
report, we have reviewed the work performed by
the Company’s external auditor Carlos A. Pace,
a partner of Price Waterhouse & Co. S.R.L.,
who issued his audit reports on March 10, 2017.
He conducted his audit in accordance with
International Standards on Auditing (IAS). Our
work included the review of the work plan,
the nature, scope and timeliness of the
procedures applied and the results of the audit
carried out by the external auditor.

IAS were adopted as auditing standards in
Argentina through Technical Resolution No. 32
issued by the FACPCE as approved by the
International Auditing and Assurance Standards
Board (IAASB) and require that the auditor
comply with ethical requirements, plan and
perform the audit in order to obtain reasonable
assurance about whether the financial statements
are free from material misstatements. An
audit involves performing procedures to obtain
evidence supporting the amounts and other
information disclosed in the financial statements.
The procedures selected depend on the auditor’s
judgment, including the assessment of the risks
of material misstatements in the financial
statements due to fraud or error. In making those
risk assessments, the auditor must consider the
internal control related to the preparation and
fair presentation by the Company of the financial
statements, in order to design audit procedures
that are appropriate in the circumstances, but
not for the purpose of expressing an opinion
on the effectiveness of the entity’s internal
control. An audit also includes evaluating the
appropriateness of the accounting policies used,
the reasonableness of significant estimates
made by the Company’s management, and the
overall presentation of the financial statements.

277

V. EMPHASIS OF MATTER
Without qualifying our opinion, we would like
to emphasize the information disclosed under
Note 10.1.a. to the Parent Company Only
Financial Statements and under Note 8.1.a.
to the Consolidated Financial Statements, which
describe the situations related to the resolution
issued by the regulatory agency for the
calculation of the monthly fee payable by the
users of cable television services, whose decision
cannot be foreseen to date.

VI. REPORT ON COMPLIANCE WITH
EFFECTIVE REGULATIONS
In accordance with effective regulations, we
report with respect to Grupo Clarín S.A. that:

a) The financial statements detailed in paragraph
I. comply with the provisions of the Argentine
General Associations Law (Law No. 19,550, as
amended) and the regulations concerning
accounting documentation issued by the CNV,
and have been transcribed to the “Inventory
and Balance Sheet” book and arise from the
Company’s accounting records kept, in all formal
aspects, in accordance with effective legislation.

b) We have reviewed the Inventory and the
Board of Directors’ Annual Report for the year
ended December 31, 2016. In this regard,
within the scope of our competence, we have no
observations to make. The representations about
future events included in the Annual Report are
the Board of Directors’ exclusive responsibility.

c) Furthermore, we report that in exercise of the
legality control within our field of competence,

during the year ended December 31, 2016, we
have applied the procedures set forth in Section
294 of Argentine General Associations Law
(Law No. 19,550, as amended), as deemed
necessary based on the circumstances and we
have no observations to make in that regard.

d) We have reviewed the information included
in Exhibit I to the Annual Report about the
degree of compliance with the Code of
Corporate Governance required under CNV
Regulations and we have no observations to
make in that regard.

e) As required by CNV regulations, regarding
the independence of the external auditors and
the quality of the audit policies applied by them
and the accounting polices applied by the
Company, the above-mentioned external auditor’s
report includes the representation concerning
the application of the auditing standards effective
in Argentina which provide for independence
requirements, and was issued without
qualifications as to the application of such
regulations or discrepancies as to the professional
accounting standards applied.

f ) We have applied the asset laundering and
terrorist financing crimes prevention procedures
provided under the professional standards issued
by Consejo Profesional de Ciencias Económicas
de la Ciudad Autónoma de Buenos Aires
(Professional Council in Economic Sciences of
the City of Buenos Aires).

City of Buenos Aires,
March 10, 2017

Supervisory Committee

Carlos Alberto Pedro Di Candia
Chairman

278

Grupo Clarín S.A.
Piedras 1743
C1140ABK Ciudad de Buenos Aires
Argentina
www.grupoclarin.com

Investor Relations Team

Agustín
Medina Manson
HEAD OF INVESTOR
RELATIONS

Patricio
Gentile
INVESTOR
RELATIONS

IR Contact
+ 54 11 4309 7215
investors@grupoclarin.com
www.grupoclarin.com/ir

Design and production
Chiappini + Becker
Comunicación Visual
Telephone: (54 11) 4314 7774
www.ch-b.com