GRUPO CLARÍN S.A.
Annual Report and Consolidated Financial Statements
For the year ended December 31, 2020,
presented on a comparative basis
GRUPO CLARÍN S.A.
2020 ANNUAL REPORT
To the Shareholders of
Grupo Clarín S.A.
We hereby submit for your consideration the Annual Report and Exhibit, the Consolidated Statement of
Financial Position, the Consolidated Statement of Comprehensive Income, the Consolidated Statement
of Changes in Shareholders' Equity and the Consolidated Statement of Cash Flows and Notes of Grupo
Clarín S.A. (hereinafter, “the Company” or “Grupo Clarín”) for fiscal year No. 22 ended December 31,
2020.
The main subsidiaries in which Grupo Clarín S.A. has a direct or indirect controlling interest are: Arte
Gráfico Editorial Argentino S.A. (AGEA), Compañía Inversora en Medios de Comunicación S.A.
(CIMECO), Arte Radiotelevisivo Argentino S.A.(ARTEAR), GC Gestión Compartida S.A., Inversora de
Eventos S.A.(IESA) and Radio Mitre S.A.
2020 MACROECONOMIC ENVIRONMENT
The Argentine economy closes the year 2020 amid an unprecedented crisis on a global scale, which
significantly hindered the performance of the incoming administration in its first year. Indeed, the outbreak
of COVID-19 worsened the fragile situation of an economy which, in the first months of the year, was
restructuring its sovereign debt issued in foreign currency, seeking to normalize its performance and to
stabilize its fundamental variables.
In this highly uncertain and complex environment, local public policies were focused on flattening the
infection curve and minimizing the negative effects of the pandemic on the population and on businesses.
To that end, in March 20, the National Government ordered the Mandatory and Preventive Social Isolation
(hereinafter, ASPO, for its Spanish acronym), which was implemented in different phases according to
the particular situation of each province.
Even though this strategy allowed the government to achieve an initial success in terms of the infection
level, it generated an unprecedented collapse in private consumption and economic activity, which was
significantly more severe than in other countries in the region. In order to avoid social collapse and the
massive bankruptcy of businesses, several containment measures were implemented, both at productive
and social levels, among which the following stand out:
a. The Emergency Family Income, which provided social allowance in three stages to approximately
9 million people (many more people than what the government had initially estimated); and
b. The Emergency Assistance Program for Work and Production, which assisted companies in the
epicenter of the crisis with the payment of 50% of the net salaries of slightly over 2.0 million
employees (about one-third of the slightly over 6 million registered employees of the private
sector).
As a result of these assistance programs for people and businesses and the collapse of revenue collection
resulting from the severe contraction of the GDP, the sharp deterioration of the fiscal accounts was a
common denominator for the world’s economies.
The difference between Argentina and almost all the countries in the world was the source of financing of
these high fiscal deficits. In the absence of voluntary financing from the National Treasury, the exponential
increase of public spending and the significant deterioration of the primary fiscal deficit of approximately
8.5% of GDP (~6.5% excluding interest payments on the country’s sovereign debt) was almost wholly
financed through an unprecedented currency issue. In historical terms, the fiscal deficit of the country for
2020 was the highest of the last 45 years.
In a dual currency economy such as Argentina, where there is a low real demand for the currency it issues
and stringent foreign currency restrictions, the excess of pesos often rapidly translates into an excess
demand for US dollars. Under foreign exchange control regimes, this additional demand for foreign
currency generates increases in the different exchange rates of the US dollar existing in Argentina and,
therefore, widens the gaps between the unofficial rates and the “official” ARS/USD exchange rate.
While these unsustainable growing gaps have an impact on the margin over prices, they also feed
expectations of devaluation, even when the currently prevailing official exchange rate is above the
historical average and exports exceed imports. This widespread perception that the value of the US dollar
is cheap erodes both the flows on the external front and the Central Bank's reserves. In an extreme
situation (which was fortunately avoided in the year under analysis), the monetary authority could end up
with its reserve position being decimated, which would lead to the acceleration of discreet increases in
official exchange rate, exacerbating the crisis.
The foregoing is a broad description of the performance of the economy during 2020. There is currently
a 70% gap between the blue-chip swap and the official exchange rate. At the beginning of the year, that
gap was of 25/30% and it increased uninterruptedly through mid-October when it reached a record high
of 130%.
The external surplus showed a severe decline. In fact, the “cash” current account balance reported by the
Central Bank, which by the end of 2019 stood at slightly above USD6.0 Bn, closes 2020 virtually in
equilibrium. This decline was coupled with the decrease of the Central Bank’s gross reserves, which
accumulated until the beginning of December a loss of slightly over USD6.0 Bn, leading to critical levels
of net reserves.
In general, Argentine history shows that the impact of unbacked currency issue on the prices of the
economy is often reflected with a lag that can span several months, which mainly depends on the degree
of trust in the course and expertise of the administration.
Due to several factors, among which the most relevant are the strict lockdown ordered by the National
Government in mid-March and the collapse of activity / private consumption, the impact on prices of the
mega-currency issue carried out in 2020 was unprecedentedly low in the months following its
implementation.
As a consequence, the Argentine economy closed 2020 with a 36.1% inflation rate in retail prices. The
inflation rates observed in 2020 are mostly accounted for by the linear and less volatile official ARS/USD
exchange rate (+40.5% point-to-point vs +58.4% in 2019), and, to a lesser extent, by the virtual freezing
of most of the utility tariffs (with fiscal cost) and the continuity of the price agreement program (“Precios
Cuidados”).
Compared to the +53.8% inflation rate recorded in 2019, there was a decrease of almost 18 percentage
points in 2020. However, it should be noted that the figures of the general price index and the core inflation
rate for the last month of the year (+4.0% and +4.9%, respectively) were the highest of the year and
contrast with the decrease observed on a point-to-point basis. On an annualized basis, the general index
and the core inflation rate were of 60% and 77%, respectively.
PERSPECTIVES FOR THE UPCOMING YEAR
The emergency currency issues implemented by the main developed economies in response to the
outbreak of COVID-19 have shaped, a priori, a favorable scenario for Argentina with ample liquidity, low
performance of sovereign/corporate bonds, and high prices for agricultural commodities on a global level,
as well as the expected strong recovery of our two main trading partners (China and Brazil).
After the collapse in 2020, and as long as the health situation goes back to normal, the fundamental
variables of Argentine economy are expected to improve. Notwithstanding the foregoing, the performance
will depend on two factors mainly: The extent to which public spending will be normalized (and, hence,
the imbalance of public accounts) and the estimated currency issue for its financing.
With 2021 being a year of legislative elections in which the course of the economic policies will be
subordinated to political needs towards the election day, the focus will be on recovering part of the lost
ground in terms of activity/consumption, employment, and the purchasing power of wages/pensions. The
exchange stability is a necessary condition (though not enough) for the accomplishment of this goal.
Since the lowest figures reported in April 2020, the economic activity has considerably improved, showing
a recovery of approximately 30% by December (last available data) in just eight months. As a result of
the statistical carryover, as long as the activity remains at current levels throughout 2021, the GDP would
register an annual increase of around 6%. If such were the case, the economy would recover slightly
below 60% of the significant decline experienced in 2020 (~10.0%). Even though the GDP showed one
of the most severe declines on a global level, the degree of recovery expected for the Argentine economy
compared to other comparable countries in the region would be one of the lowest.
The economic authorities project for 2021 a fiscal deficit at national level of around 6.0% of GDP (~$2.5
trillion), i.e., 2.5 percentage points below that recorded in 2020. The National Treasury expects to continue
to finance a large portion of the fiscal deficit with currency issue, which will have to be closely monitored
considering the worrying signs of inflationary acceleration mentioned above.
In an economy with an excess of pesos, a shortage of liquid reserves, and lack of voluntary financing,
there is little margin for applying expansionary macroeconomic policies to shore up demand. Indeed, the
inflationary acceleration of recent months and the current size of exchange gaps are symptoms of the
economy’s current imbalances.
The rich vast history of Argentine economy teaches us that the mere 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 fundamental economic variables. The option to finance chronic fiscal deficits
with currency issue, although it may avoid, at first, a crisis in the balance of payments, it usually leads to
periods of secular stagflation characterized by increasingly stringent exchange controls.
THE YEAR 2020 AND THE MEDIA SECTOR IN ARGENTINA AND THE WORLD
The complex reconversion and convergence process in the media industry, coupled with the strong impact
of the outbreak of COVID-19 and the lockdown, continues to force companies engaged in these activities
to reformulate their business models to adapt to the digital era and to the changes in consumption derived
from new technologies. In addition, the sustained migration of advertising towards the digital environment
is concentrated in a few fully digital global players, especially Facebook, Google and Amazon.
Faced with this context, the sustainability challenges and certain negative side effects inherent to the
expansion of the Internet (such as the chaotic dissemination of news - true and fake - or the worrying
news biases created by the algorithms of social media and platforms that reinforce their users’ own
beliefs), the media continue to focus on gaining strength. To this end, they emphasize differential assets
such as the credibility of their brands, they bet on incorporating new technologies into their newsrooms
(content, commercial, marketing, and big data), and highlight the institutional role they have historically
played in democratic societies.
Over the past few years, the multimedia paradigm has been fully consolidated. The multiplatform is the
norm and, without exception, traditional media are exploring other languages. In this way, the
consumption of contents is simultaneous, overlapped and through multiple windows. In 2020, this was
worsened by the crisis caused by the COVID-19 pandemic and social distancing measures. There was a
sharp increase in the consumption of multimedia content on all available screens, especially through OTT
formats. Therefore, the main challenge was to attract and retain the attention of those audiences in all
formats possible.
Due to the unusual context generated by the pandemic, the media industry suffered a severe impact on
its economic indicators. According to PWC’s most recent annual Global Entertainment & Media Outlook,
industry revenues fell in 2020 at a rate of around 4.7% (a sharpest decline than the one observed in global
GDP) mostly driven by the fall of traditional advertising and the decrease in the consumption of media
and entertainment outside the home (printed newspapers, magazines, movies, live events, etc.). OTT
subscription segments, virtual reality platforms and Internet advertising (especially for mobile devices)
showed a substantial growth during the period, but it was not enough to offset the fall at aggregate level.
In this way, digital content continued to increase its share in the revenue structure of these companies
and has consolidated itself, in many cases, as the main source of revenues.
It is evident that more and more users are selecting the contents they consume prioritizing preferences,
quality, convenience and truthful information. Therefore, the companies in this industry want to have direct
contact with the user to build loyalty through the added value of their brands and the personalization of
content and services that they may develop in the future.
While audiences continue to migrate to the digital world, users increasingly prefer mobile devices to
search for the contents that best suit their preferences. According to Chartbeat: Approximately 80% of the
visits to news sites are made from a mobile phone. This phenomenon poses big challenges for an industry
forced to constantly change and adapt the contents and the ads to mobile screens.
During 2020, there was an increase in the number of users willing to pay for viewing the contents that
they consume the most, especially in the case of platforms or media that they already visited.
Thus, the process of consolidating subscriptions as the main source of revenues in the industry continued
and deepened during 2020, largely driven by the consumption of video streaming (mainly OTTs), digital
music, podcasts, video games and several digital newspapers that launched and boosted their paywall
models. In fact, Deloitte and PWC estimate that in 2020 there were more consumers subscribed to at
least one video streaming service than to a traditional TV service.
At the same time, the main analyzes carried out by media consultants showed that the pandemic
accelerated and broadened changes in consumer behavior. This forced turning points in the industry that
would have otherwise been seen at a later time.
However, the industry’s long-term perspective remains strong, which shows the agility and dynamism of
the ecosystem. In the years before the pandemic, global media and entertainment growth outpaced GDP
growth, as media experiences became increasingly central to consumer’s lives.
In the local context, just like in 2019, the complex macroeconomic environment, also affected by the
coronavirus, generated an inflationary acceleration, a decline in private consumption and in the GDP,
which had a considerable impact on the performance of this industry.
This performance is mostly accounted for by the sensitivity of Argentine media companies’ revenue
structure to the economic cycles. In this sense, media companies’ advertising revenues are still especially
sensitive to recessive cycles due to the moderate development still shown by paid subscription models in
the domestic market.
In this sense, it should be noted that advertising investment in real terms also shrank significantly during
2020 in line with the further downturn of the economy, coupled with the effect of the lockdown. This
contraction of advertising revenues, markedly in analog media (mostly printed newspapers), was
mitigated only in part by the larger amount of digital advertising in some segments of the industry.
In contrast, the consolidated digital advertising revenues, in which Google and Facebook still hold a high
share of approximately 75%, grew in line with inflation, remaining constant in real terms. Consequently,
the digital pie retained its predominant position within the advertising investment volume and even
widened the gap against the analog pie. In Argentina, the share of digital advertising investment over total
advertising investment is close to 50%.
All this shows that traditional media need to continue innovating, creating new and better digital products
and services that will allow them to achieve sustainable business models. To such end, they need to find
a model to efficiently monetize digital advertising and subscriptions, exploiting the consumption of
contents via mobile devices without becoming invasive for the user.
Notwithstanding the foregoing, consumer habits go in the same direction as in the rest of the world, in
turn boosted by the effects of the quarantine and the new form of teleworking. In the audiovisual segment,
the highlights were a slight drop in HUT (households using television) and the growth or consolidation of
various OTTs or video streaming platforms in addition to the consumption of home data for video call
tools.
In the newspaper segment, according to PWC, in 2020 printed newspaper circulation revenues fell at a
rate of about 24% without these revenues being capitalized in the digital ecosystem where they
(advertising and digital subscriptions) grew by around 11% with a low income base. This is mainly due to
the relatively low level of maturation of the market related to the paid digital news subscription system.
However, more and more local media are deciding to move toward such a model as the exclusive
advertising model does not seem to be sustainable.
As to the radio segment, its total audience shares declined due to the incipient drop in HUR (households
using radio), but they were partially offset with the growing number of digital users. In this way, the radio
segment managed to consolidate as a multiplatform medium and reached new generations.
Thus, the challenges faced by the local industry do not differ from those seen in companies around the
world, except for the complex macroeconomic environment, coupled with the pandemic that appears to
continue during 2021. The willingness of society to pay for Internet content under this economic
environment appears to be one of the critical challenges. The media companies that achieve the most
successful innovations and brands that add value will have a head start in the race to reach the user with
the possibility of building loyalty.
REGULATORY FRAMEWORK 2020
The latest substantial changes in legislation were introduced in December 2015 under Decree No.
267/2015, which amended Laws Nos. 26,522 and 27,078 (“Audiovisual Communication Services Law”
and “Digital Argentina Law” respectively).
Upon the issuance of Decrees Nos. 7/2019 and 50/2019, published in the Official Gazette on December
11, 2019 and on December 19, 2019, respectively, the ENACOM —the Enforcement Authority of both
Decrees— is now under the jurisdiction of the Secretariat of Public Innovation under the Chief of the
Cabinet of Ministers.
The subsidiaries of the Company hold licenses and registrations and exploit Audiovisual Communication
Services (Television, Radio, Cable Television Signals, Producers and Advertising Agencies), and are
governed by the Audiovisual Communication Services Law. Currently, the only subsidiary partially
governed by the Digital Argentina Law is Gestión Compartida, as a result of the merger by acquisition
executed with Compañía de Medios Digitales (CMD) S.A., holder of a Telecommunications License.
All the subsidiaries of the Company, owners of licenses for the exploitation of Audiovisual Communication
Services have obtained an extension of the terms of their licenses, for the exploitation of broadcast
television and AM and FM sound broadcasting services. All the licensees were deemed to have opted to
request an extension under Article 20 of Decree No. 267/15, and were granted a new term for the first
period of TEN (10) years, with the right to an automatic extension for a term of FIVE (5) more years, in
every case.
In connection with digital television, all the subsidiaries that hold broadcast television licenses were
awarded a digital channel to render terrestrial digital television services.
Notwithstanding the foregoing, ARTEAR filed in due time an unconstitutionality claim requesting the
revision of the legal regime applicable to the transition to digital television in the understanding that,
through its application, the rights of the current broadcast television licensees could be infringed. These
rights should be preserved intact as established in Law No. 26,522, which has higher hierarchy.
Through Decree No. 173/2019, the Executive Branch decided to postpone the analog switch-off due date
until August 2021. During this term, the television stations have to release the radioelectric spectrum
bands they use for analog transmissions and migrate them to digital ones.
Significant changes in the legal framework of ICT Services
• Decree No. 690/20 – Amendments to the LAD
On August 22, 2020, the National Executive Branch amended the Digital Argentina Act through Decree
No. 690/2020, which was subsequently ratified by Parliament under the terms of Law No. 26,122. Within
the amendments introduced, ICT services – fixed and mobile telephony, subscription television and
Internet – and the access to telecommunications networks for and between licensees are now deemed
“essential and strategic public services provided on a competitive basis”, and their effective availability
shall be guaranteed by ENACOM.
The prices of essential and strategic public ICT services provided on a competitive basis, the prices of
the services provided under the Universal Service and of those determined by ENACOM based on
reasons of public interest, shall be regulated by said agency.
The Decree also provides that ENACOM shall establish, in the respective regulations, the Mandatory
Universal Basic Provision of ICT services.
It also provided for the suspension of price increases or modifications established or announced from July
31, 2020 to December 31, 2020 by ICT licensees.
On December 21, 2020, Resolutions Nos. 1466/2020 and 1467/2020 were published in the Official
Gazette, whereby the ENACOM regulated Decree No. 690/2020.
Resolution No. 1,466/2020 provides that ICT Services Licensees that render Internet access, subscription
broadcasting services by physical, radio-electric or satellite link, and fixed and mobile telephony services
-in all cases in their different and respective modalities- may increase up to FIVE PERCENT (5%) their
retail prices as from January 2021. In order to establish the percentages approved, licensees shall take
as reference the prices effective as of July 31, 2020. Said Resolution also provides that ICT Services
Licensees may request on an exceptional basis price increases exceeding 5% in accordance with the
provisions of Article 48 of the LAD.
Said Resolution also provides that ICT Services Licensees that hold registration for Internet Access Value
Added Service (SVA-INT, for its Spanish acronym); subscription broadcasting services by physical and/or
radio-electric link (SRSVFR, for its Spanish acronym) and audiovisual communication subscription
services by satellite link (DTH); shall notify the Enforcement Authority about any and all changes in retail
prices they intend to make to their plans, prices and commercial terms in effect, SIXTY (60) calendar days
in advance of their implementation.
Resolution No. 1467/2020 regulates the Mandatory Universal Basic Service set forth by Decree No.
690/2020 for the different services provided by ICT Services Licensees, establishing the price and
characteristics of each plan.
Said Resolution also sets out the persons that are eligible to receive those services.
It should be noted that subscription television service licensees are under the obligation to apply discounts
to a plan and programming grid that already exist, which prevents them from creating a specific and less
expensive grid to comply with the Mandatory Universal Basic Service.
Since the subsidiary ARTEAR owns several cable tv signals and is therefore a provider of contents to
subscription television services via physical, radio-electric or satellite link, it is currently evaluating the
impact that this regulation and its implementation may have on its operations.
• New General Rules Governing Physical and/or Radio Electric Link Subscription
Broadcasting Services
ENACOM Resolution No. 1,491/2020 issued on December 24, 2020 approved the new General Rules
Governing Physical Radio-Electric and/or Satellite Link Subscription Broadcasting Services.
Even though the new General Rules maintain the onerosity of all the broadcast television services and
signals that fall within the scope of the “must carry” regime (signals and services subject to mandatory
retransmission) by the providers of subscription television services, they introduce the concept of “fair,
equitable and reasonable price” and implement a dispute resolution procedure in case of disagreement
between signal holders and distributors (by physical, radio-electric or satellite link) to be brought before
the ENACOM.
In addition, the General Rules provide that in the event that signal holders and physical, radio-electric
and/or satellite link subscription television licensees do not settle their dispute, distributors shall include
the signal in the programming grid at the price set by ENACOM’s Board based on the information gathered
during the proceeding.
In addition, the General Rules also provide that the commercialization of one signal may not be conditional
on the acquisition of other signals and, in the case of sales of signal packages, the price must include a
breakdown of the price of each of the signals included in the package.
ARTEAR’s legal advisors believe that the ENACOM is not empowered to set the price of a signal,
regardless of whether or not it is a signal subject to mandatory retransmission, and that it would be
arbitrary and unconstitutional if the agency imposed a price on the owner of contents that does not
voluntarily agree to the settlement proceeding.
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 print media, radio,
broadcast television, audiovisual production, and in the printing industry. Substantially all of Grupo Clarín's
assets, operations and audiences 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 almost 5,000
people.
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. Between 1969
and 2017, Diario Clarín was 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 and received a record high of 22 million unique users during December 2019.
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/ eltrece) 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 region. For example, in
Buenos Aires, the Company's media compete in a market that has 5 broadcast television stations, 6 news
signals, 550 radio stations, and more than 10 national newspapers.
Grupo Clarín also publishes Olé, the first and only sports newspaper in Argentina, and the magazines Ñ,
Genios, Jardín de Genios, Pymes and Elle. Through CIMECO, the Company holds equity interests in the
newspapers La Voz del Interior S.A. and Los Andes Hermanos Calle S.A., in a market of approximately
200 regional and local newspapers. In the audiovisual front, it also produces 5 cable signals. A news
signal, (Todo Noticias), and the signals Volver, Magazine, Quiero Música en mi Idioma and Canal (á). It
also produces sports channels and events (TyC Sports), television contents and motion pictures (Pol-ka
Producciones S.A and Patagonik Film Group S.A.).
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 high credibility rates. 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. In 2016 and 2017, at the WAN-IFRA LATAM Digital Media Awards, Grupo Clarín's media
received three awards each year, and, in 2018, Diario Clarín received an award for its subscription
strategy. In 2019, Clarín received awards granted by ADEPA in the categories “Human Rights”,
“Photography”, “General Information and Entertainment”, “Infographics” and “Economy”. In addition,
FOPEA granted an award to Clarín in the category “National Print Media” for the coverage of the sexual
abuses that took place at Próvolo Institute’s summer camp and the Society for News Design granted to
the newspaper the award “Special News Topics Editor’s Choice” for the sports section with the coverage
of the FIFA World Cup held in Russia. It also received many awards from the Inter-American Press
Association (IAPA), the Association of Argentine Journalistic Entities and other national and international
agencies. In 2020, Clarín received 10 ADEPA Awards and Special Mentions, among which the most
relevant was a series of articles covering the COVID-19 pandemic. It also received a FOPEA award for
an article on the Government’s social spending. In the Communicator Awards of the Academy of
Interactive & Visual Arts (AIVA), Clarín received two awards in the “Documentary” and “Videography”
categories. In addition, the International Women’s Forum recognized Silvia Fesquet, Editor-in-Chief of
Clarín, for her work and track record. She was recognized as one of the “women who made a difference
in 2020”. Finally, it received a ÑH bronze award in Spain.
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, which was established in 1966, organizes and sponsors several
programs and activities, particularly focused on education, culture and civic involvement. Furthermore, as
an indication of its social responsibility, Grupo Clarín focuses on the ongoing improvement of its
processes, develops initiatives that arise from discussions with different stakeholders, and works towards
sustainability and diversity.
As from May 1, 2017, Grupo Clarín span off its telecommunications operations to a separate company,
Cablevisión Holding. Grupo Clarín S.A. retained the ownership of the journalistic media and content
production companies. This includes AGEA, ARTEAR, Radio Mitre, IESA and GC Gestión Compartida
S.A., among others.
GRUPO CLARÍN AND ITS BUSINESS SEGMENTS IN 2020
2020 was a highly challenging year for Grupo Clarín. The unprecedented crisis triggered by COVID-19
and the consequent decline in activity had a strong impact on the Company's revenue sources. Even
though there was a slight recovery in consumption – which resulted in higher advertising investment – in
the last quarter, it was not enough to reverse the trend observed during the year. Despite this challenging
environment, Grupo Clarín managed to maintain its market position, despite a fall in sales across the
industry.
In this context, the Group’s net consolidated sales decreased during the year by 23.1%, from $ 34,620
million to $26,640 million pesos in constant currency as of December 31, 2020. It should be noted that
the variation was mainly accounted for by the larger restatement of the revenues recorded in 2019
compared to 2020 and the drop in advertising revenues in real terms.
By the end of 2020, Grupo Clarín's consolidated gross financial indebtedness (including sellers financing,
accrued interest and fair value adjustments) stood at approximately $1,713 million, and the cash position
at year-end stood at $2,787 million.
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 2020. It should be noted that all of them had to adapt
their operations, work modalities and production systems due to context of the COVID-19 pandemic and
the mandatory and preventive social isolation measures ordered by the Government. The massive
adoption of home office, the incorporation of strict protocols in the workplace, and the establishment of
new work routines and schedules were challenges successfully addressed by all business units and made
it possible for Grupo Clarín’s media, products and services to continue accompanying its audiences
uninterruptedly.
PRINTING AND PUBLISHING
Grupo Clarín, through AGEA, is the main newspaper publisher in Argentina and one of the most prominent
editorial content producers in Latin America.
AGEA
AGEA publishes two 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.
It also publishes Olé, founded in 1996, the first and only sports newspaper of its kind in the Argentine
market. In addition, it publishes regional newspapers; 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; Pymes, aimed at small- and medium-sized businesses;
and ARQ, aimed at the construction world, architects and designers. It also publishes the Argentine
version of the women’s magazine Elle and, since June 2020, the Disney Pre-School magazine, which
includes educational proposals for learning to read and write.
AGEA has a strong presence in the digital content segment through its websites clarin.com and
ole.com.ar, which are among the most visited websites in Latin America. It stands out in vertical sites of
sectors such as cars, real estate and jobs.
Clarín
With a long-standing journalistic and commercial leadership consolidated in its 75-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.
With innovation at the core, Clarín has a multi-platform newsroom that works simultaneously for the
different versions of the newspaper -paper, mobile and digital-. In this around-the-clock news production
process, all the journalists work for all the platforms in order to maintain the Company’s leadership in the
print and digital market and, at the same time, boost its web and mobile services. A leader in terms of
unique users, the newspaper seeks to continue expanding this base with readers of all ages and different
reading frequencies and, at the same time, it seeks to offer quality contents for the most frequent readers
that, given their periodicity, choose to become digital subscribers. The quality of its contents, flexibility,
immediacy and close bond with the readers are the key pillars to face these new challenges.
In addition, VIVA, the magazine which has come for free with the Sunday newspaper for 25 years, is
noted for a strong representation of Argentine people, through its articles and contents that reflect the
social phenomena and the current issues.
During 2020, Clarín was one of the most awarded newspapers in the country. It received 10 ADEPA
Awards and Special Mentions, among which the most relevant was a series of articles covering the
COVID-19 pandemic. It also received a FOPEA award for an article on the Government’s social spending.
In the Communicator Awards of the Academy of Interactive & Visual Arts (AIVA), Clarín received two
awards in the “Documentary” and “Videography” categories. In addition, the International Women’s Forum
recognized Silvia Fesquet, Editor-in-Chief of Clarín, for her work and track record. She was recognized
as one of the “women who made a difference in 2020”. Finally, it received a ÑH bronze award in Spain.
Diario Clarín’s printed newspaper circulation exceeded its nearest competitor by 70%. On Sundays, an
average of over 255,000 copies were sold, which places it among the major Sunday newspapers of the
world. Clarín has a 43.3% share in the newspaper market in the City of Buenos Aires and the province of
Buenos Aires, and a 26.7% share at a national level.
Having its printing capacity in its own printing facilities is a very important competitive advantage.
The Zepita facility -where the newspaper Clarín and its sections, as well as the newspaper Olé are printed-
is located in the City of Buenos Aires and has a surface area of 35,000 m2 and 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. Artes Gráficas del Litoral'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.
During 2020, AGL’s printing facility, in association with El Litoral, continued to print the newspapers Clarín,
Olé (for the littoral region), the morning and evening editions of El Litoral, Diario Castellanos from Rafaela,
Mirador Provincial (Santa Fe), Mirador Provincial (Entre Ríos), El Diario de Paraná, La Capital de Rosario,
Diario Uno de Paraná, and El Ciudadano de Rosario. However, as a result of the social isolation imposed
in 2020, volumes declined by between 30% and 40% both terms of pagination and newspaper print run.
AGL also suffered a significant decline in the printing of commercial publications, such as brochures.
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 strengthen circulation. Its subscribers enjoy a program that offers discounts,
promotions and benefits in more than 1,600 trademarks and 7.7 thousand stores nationwide. In 2020,
365 remained the leading benefit club and developed options that respect the social distancing imposed
by the pandemic. In addition, it executed an alliance with Billetera Móvil S.A. (“BIMO”), a new e-wallet,
through which new users of the app were able to use the benefits of 365, at no cost for a limited period.
On the other hand, in December 2020, 365 executed an agreement with the club River Plate to subscribe
all the members of the program “Somos River” to the benefit club, with unlimited access to the contents
of Clarin.com and Ole.com.
During 2019, Clarín designated a Gender Editor to ensure a gender perspective in all the areas of the
newspaper. The decision, which is being adopted in several of the leading newspapers worldwide, is in
line with the demand of audiences that look for and deserve information and stories adapted to the new
times. In 2020, it broadened its work in this field.
On August 28, 2020, Clarín celebrated its 75th anniversary. In this sense, the company carried out several
actions and journalistic reports. Among them, the following stood out:
• Free delivery of a magazine of more than 160 pages with some of the great landmarks of
•
Argentine history reported in the newspaper.
Launch of a special interactive multimedia with dozens of web stories about the facts, characters
and key moments of Argentine and world history.
• Development of a tool that allows access to more than 27,000 historical covers of the newspaper.
• Organization of a series of talks with global political, economic, thought and technology leaders
•
under the name El mundo después de la pandemia.
Launch of the interactive documentary Inmersión Clarín in Telegram, a tool that shows the daily
work developed by Clarín through video, text and audio content.
In the context of the pandemic, Clarín granted unrestricted access to all the articles related to COVID-19
for all readers, whether they were subscribers or not. In times of uncertainty, the audience relies on
credible and well-known brands. This allowed Clarín to achieve record-highs of unique users and pages
viewed during 2020.
Products
The basic offer of the newspaper is comprised by the main body and its Spot, Sports and Classified ads
sections. Weekly sections (such as, Rural, Countries, Económico, Autos, Viajes and The New York
Times) make Diario Clarín one of the most comprehensive newspapers in the market.
The regional newspapers support the circulation of Thursdays’ edition. The regional newspapers cover
the following locations: Vicente López, San Isidro, Morón, La Matanza, Ituzaingó, Hurlingham, Lomas de
Zamora, Alte. Brown, Echeverría, Ezeiza, Avellaneda, Lanús, San Martín, Tres de Febrero, San Miguel,
José C. Paz, Tigre, San Fernando, Malvinas Argentinas, Quilmes, Berazategui and Florencio Varela. The
monthly regional newspapers published for Pilar, Escobar, Zárate and Campana, Moreno, General
Rodríguez and Luján are also part of the offering.
Diario Clarín’s Economic Section offers its readers a thorough analysis of the economy, the secrets of
leading companies, personal finances, marketing and labor market with valuable information, easy-to-
read texts and the opinion of national and international prestigious columnists.
In 2020, the Sports Supplement had to face the challenge of continuing to report on sports beyond the
COVID-19 pandemic. Due to the limitations imposed, many sports events were postponed or canceled,
such as the Tokyo Olympic Games or the Argentina-Colombia America Cup. However, the supplement
was able to continue to inform with quality journalism, creating new content for its readers.
The Rural section 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. It was present at 2020
Expoagro, the agro-industrial fair that is held every year in March, with very good results.
Clarín constantly keeps up to date and offers a wide range of editorial products together with the core
product.
Magazines
Since 2003, the magazine Ñ has featured the main expressions of literature, thought and cultural
phenomena of Argentina and the world.
The magazine seeks to enrich debates, generate discussions and propose innovative approaches to
understand and appreciate the manifestations of humankind in all fields. In addition, it features the most
prominent editorial offerings and the main cultural activities in Buenos Aires and in Argentina.
Through Premio Clarín Novela, Magazine Ñ promotes the production and publishing of literary fiction in
Spanish language. In 2020, the 23rd edition was held. It is a symbol of support for culture that is renewed
every year, discovering authors and putting them in contact with readers. This award has become one of
the most popular literary contests in Spanish and is a meeting place for young writers, acclaimed authors
and readers. In this edition, Ignacio Arabehety received an award for his novel Asomados a un pozo. In
August, the company launched an optional product composed of 6 novels by Claudia Piñero, which added
value to the product and made it more appealing.
Since 2002, Diario de Arquitectura ARQ has been published every Tuesday and offers professionals a
benchmark editorial product. It is supported by optional sections, which are highly valued by its readers.
ARQ is present at the most important events such as Casa FOA and the Ibero-American Biennial of
Architecture.
Revista ELLE is a high-end magazine for women, focused on fashion and beauty. It was incorporated into
AGEA's product portfolio in 1994. During 2020, Elle incorporated top-quality branded beauty products
such as eyeliners, face makeup and nail polish, which had a positive impact on the magazine’s sales.
ELLE also offers the products ELLE Decoración and ELLE Cocina, which were published twice during the
year, with a website: elle.com.ar, which allowed, together with its social media (Instagram/Facebook), to
reach the audience 24/7.
The magazine Genios, published once a week, provides education and entertainment for children with a
clear and up-to-date language. In 2020, its average sales exceeded 12,000 copies. The monthly edition
of Jardín de Genios maintained its leadership in the category children's magazine with over 23,000 copies
sold.
In June 2020, the monthly Disney Pre-School magazine was launched. It is a product with an attractive
format that offers educational materials to easily learn how to read and write with a funny approach. During
the year, its average sales exceeded 16,000 copies.
Revista Pymes is a monthly publication with national reach, published since 2004, aimed at contributing
to the development and consolidation of small businesses, with special emphasis on the entrepreneurial
world and the so-called “startup” or “high impact” entrepreneurs. In 2020, the magazine published three
editions with books: In March, “Que hacer con las Pymes Argentinas” by Manuel Sbdar; in July,
“Transformación digital” by SMS and, in November, “Potencia tu empresa” by Quirós Consultores.
Olé
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 complete
coverage of football and other sports like tennis, basketball, rugby and motor racing. Olé continued to
consolidate itself as a leader both in its printed and digital versions -www.ole.com.ar- and apps for mobile
devices. In 2020, it achieved very important results: Over 15 million users and nearly 160 million pages
viewed on average per month.
2020 was a year that challenged the entire world due to the outbreak of the COVID-19 pandemic. In this
context and due to the suspension of regular professional sports and major sports events, such as the
Olympic Games in Tokyo or the Colombia-Argentina America Cup, Olé had to adapt its journalistic
proposal by innovating in new content and products to engage its audience, which earned it important
distinctions at international level, in addition to helping to maintain its audience and business indicators.
Internet Business
Clarín has a strong share in every large social platforms and all of its products follow an innovative
communication strategy. In this way, it has achieved a leading position in social media journalism and in
Internet in general.
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 that works around-
the-clock, 365 days a year. 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 2020, 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. During the year,
Clarín was one of Argentina’s most read news websites and, in March and April 2020, it achieved a record
number of unique users and pages viewed: 84,5 million unique users (April 2020) and more than 572
million pages viewed per month (March 2020).
In 2017, Clarín became the first Argentine newspaper to launch a digital subscription system. As of
December 2020, it exceeded 328,000 subscriptions, with more than 3,028,000 registered users.
With its sites “Argenprop” and “Empleos Clarín”; the company has a strong presence in the on-line
classified ads for real estate and jobs.
El Gran DT is the most popular game in Argentina and has engaged over 6 million people in its 25 editions.
In 2020, despite the difficulties generated by the pandemic, it gathered over 500,000 people.
School Editorial Content
On January 1, 2020, AGEA absorbed Tinta Fresca, a company engaged in textbook publishing for all
stages of the Argentine educational system, children and youth literature, and digital solutions. It also
manages LMS (Learning Management System), an adaptive learning management platform, and the
digital library.
During 2020, AGEA continued publishing and marketing these publications through Editorial Tinta Fresca.
The 2020 academic year coincided with the beginning of the mandatory and preventive social isolation
and the consequent suspension of classes at schools and the closing of bookstores. This had a strong
negative impact on the sales volumes of paper books, which meant a 50% market decline.
It launched two new series of books and developed the system RED, which allows students to do the
activities of the textbooks through this system, send those activities to the teachers, facilitating the
correction and return of the activities to the students.
Ríos de Tinta (a Mexican company in which Tinta Fresca held an interest) was also affected by the
pandemic, with a particularly strong impact on the sale to private consumers. Sales to the public sector
grew by 84% compared to the previous year.
Impripost
Impripost Tecnologías S.A. (Impripost) 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.
Cúspide
Cúspide is one of the main Argentine companies engaged in the distribution and sale of books. Today, it
has three business areas: The first one is a retail business, with 30 branches located throughout the
country, and a digital channel, cúspide.com. The second one is engaged in wholesale distribution with
over 500 customers. And the third one manages the revenues generated by the franchises. Currently, it
has 10 franchisees and has executed contracts for establishing two new ones.
Cúspide owns a 3,200-square meter warehouse to store and supply its own branches and its wholesale
customers.
Unlike all previous years, in 2020, Cúspide did not participate in the Book Fair or the Children’s Book Fair
due to the cancellation of all mass events due to the COVID-19 pandemic. Despite the context, Cúspide
managed to sustain a turnover of $1,048 million through its retail, wholesale and franchise channels. The
main source of revenues was retail sales, which were affected by the nationwide lockdown. The company
was able to refinance the trade payables with suppliers. In the face of the mandatory isolation measures,
the company focused on boosting sales through the web and through deliveries to customers’ homes
from its branches.
During 2020, the company participated in the Emergency Assistance Program for Work and Production
granted by the Government.
Unir
UNIR S.A. is a company engaged in mail reception, classification, scheduling, transportation, warehouse,
logistics, distribution, and delivery services throughout the country. Its main shareholder is Urbano
Express S.A.
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 Impripost and
other 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 2020, UNIR increased its total sales by 13%. The pandemic had a strong impact on the B2B
customer segment, a pillar of the company's revenue structure. There was a further decline in the use of
postal service, mainly because customers subscribe to digital invoices.
On January 13, 2021, AGEA, the main shareholder of Unir, sold to Urbano Express S.A. 36,900,000
shares representing 100% of the capital stock and votes of Unir S.A.U for $ 90 million, which originated a
credit in favor of AGEA. On the same date, the shareholders of Urbano decided to approve the
capitalization of such credit and an increase in the capital stock of $ 15,662,647, with paid-in capital of
$ 74,337,353. Through this capitalization, AGEA became the holder of 15,662,647 common, registered,
non-endorsable shares, with nominal value of $ 1 each and entitled to one (1) vote per share of Urbano.
Through this capitalization, AGEA became the holder of 29,091,723 common, registered, non-endorsable
shares, with nominal value of $ 1 each and entitled to one (1) vote per share. This represents 30% of the
capital stock and votes of Urbano.
CIMECO
CIMECO 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, 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. (LVI) leads the print and digital market in the central region of the country. Its
newspaper, La Voz del Interior, has a significant market share in the province of Córdoba.
In 2020, LVI focused its editorial policy on consolidating a multiplatform strategy by adjusting the printed
and digital products to new trends in the consumption of news. In this search, during fiscal year 2020, the
company implemented projects that had an impact on the community, such as the broad coverage of the
national economic crisis and its impact on the province.
The company focused on the coverage of the pandemic during most of the year. As from March, the entire
journalistic team was transformed and focused on meeting the demand for information from the different
audiences. Information on services was paramount and provided clarity and certainty, with outstanding
contributions from journalists specialized in scientific dissemination and in health topics.
The “digital first” process was also consolidated to contribute more value to contents across all digital
platforms. This process was carried out without disregarding the quality of the printed edition. In 2020, the
company implemented a redesign, which was launched on Sunday, August 23. It focused on bringing
freshness and modernity to the look and feel of the newspaper.
On the other hand, digital advertising revenues grew by 48% compared to 2019 and accounted for 44%
of LVI’s total revenues.
As of December 2020, La Voz had more than 38,000 paid subscribers through its paywall.
CIMECO also owns Los Andes newspaper, which has been reporting Mendoza’s news since 1882. In
that year, the Calle family founded one of the oldest journalistic companies in the country. Los Andes is
a benchmark brand in the market.
During 2020, Los Andes focused on maintaining its leadership position both in its print and digital versions.
Los Andes Pass, the newspaper’s loyalty program, reached 18,906 subscribers as of December. The
percentage of readers subscribed to this program represented 58% of the net monthly circulation at year-
end.
In August 2020, the digital subscription was launched, with three subscription plans: Unlimited Digital
Access, Unlimited Digital Access + Los Andes Pass card, and Unlimited Digital Access + Los Andes Pass
card + the Sunday newspaper.
In December, Los Andes reached an average of 13,158 Digital Subscriptions. In addition, access to the
Digital Subscription was granted to all customers that were already subscribed to the Digital Kiosk service,
which provides access to the printed edition of Los Andes in PDF. The company implemented a digital
subscription system with a model that sets limits on the number of articles per month and on premium
content.
Los Andes was present at the National Grape Harvest Festival with the collective posters of the 18
candidates, and the giant photographs exhibited at the entrance of the newspaper. The official agenda
added training about personal image and the use of social media at the newspaper’s premises, as well
as the classic special area located at the entrance of the building with an exclusive service for 120
attendants. In addition, the company carried out a branding action during the main event with almost
20,000 attendants.
In 2020, the pandemic had a negative impact on Los Andes’ circulation volume. Fear and disinformation
led to a sharp drop in sales, both in the printed version and in subscriptions. As the Government gradually
eased the lockdown during June, there was a slight recovery in the direct sales of the printed version. The
launch of the digital subscription in August allowed the company to retain its readers and engage new
ones. The company continued with the distribution and sale of the magazine Para Ti Deco. It also
continued with the distribution and sale of optional products in more than 100 points of sale throughout
the province, reaching a volume of 14,200 units.
In 2020, Los Andes’ newsroom underwent multiple transformations and improvements which had been
foreseen in the business plan, but its implementation had to be accelerated due to the health, economic
and social effects of the coronavirus pandemic. The addition of ARC, the digital content management
platform developed by The Washington Post, was one of the most important changes on the web. It
improved browsing speeds and user experience through a more attractive and clearer website
architecture. This translated into new design, tabs and layout, as well as innovative audiovisual formats,
which were widely welcomed by the audience and earned some provincial and international awards.
By mid-year, the company implemented one of the most significant changes in the printed edition since
the foundation of Los Andes: It shifted from broadsheet to tabloid format. A transformation aimed at
optimizing the use of paper and meeting the needs of the reader, in a more modern, comfortable and
friendlier size, without sacrificing texts or losing its editorial essence: a plural product for reading and
informing the audience, focused on quality, renewing its bond of trust with the public. This change involved
a general redesign of the daily publications, weekly supplements and other regularly circulated printed
products, as well as a new display and featuring of information in each of them.
For reasons of force majeure, the pandemic accelerated the shift towards the remote work of journalists,
desktop publishers, editors, and editors-in-chief. The experience - according to the respective evaluations
- was satisfactory both in the strictly operational performance (production and publication of content on
the different platforms) and in the bond and engagement of the different work teams. It also ratified the
fast adaptive capacity demonstrated at critical times by all the members and employees of the Newsroom.
Some of the highlights regarding products and actions were the virtual panel of experts to talk about
“Reasons to be optimistic” (an initiative that gathered about 100 guests, including the governor of the
province), the printed supplement on the occasion of the 137th Anniversary (which invited specialists from
different fields to imagine what life will be like in Mendoza after the pandemic), and four publications on
the reform of the provincial Constitution (a crucial topic on the province’s political agenda, with the analysis
of 16 politicians, historians, sociologists, constitutional experts, and other prominent professionals).
Comercializadora de Medios del Interior S.A (CMI)
CMI is engaged in publishing and commercial representation of media located in the provinces. It
manages the news site Vía País, which reached an audience of 9.5 million unique users during 2020. In
addition, it publishes and commercializes the magazine Rumbos, distributed by 8 newspapers. It
registered a decline compared to 2019 as a result of the crisis generated by the quarantine and the
COVID-19 pandemic. In addition, paper and digital commercial representation reached 40 media.
During 2020, CMI continued to consolidate itself as the most important network in the provinces. During
the year, the company intensified the adaptation of its traditional businesses to new technologies,
preserving its business model. In this way, it continued to focus its businesses on the digital area. Over
the last year, the company consolidated the site Via País. Its main aim is to build the largest news network
in the country covering all of the provinces of Argentina. As of December 2020, there were 57 active
nodes (Vía Argentina, Buenos Aires, Córdoba, Mendoza, Rosario, Neuquén, Río Cuarto, San Nicolás,
etc.). Revenues from CMI’s digital activities accounted for 49% of its aggregate advertising revenues,
being each year more relevant over the aggregate.
Finally, the magazine Rumbos celebrated its 17th anniversary in the market. Since December 2019, it has
been the only Sunday magazine in the provinces. Among the main newspapers that distributed the
magazine Rumbos, the following stand out La Voz del Interior, Diario Los Andes, El Litoral de Santa Fe,
El diario de Paraná, La Capital de Rosario, and Diario de Cuyo.
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.
Currently, it also works on the production of paper used for printing, writing and packaging. It is currently
the largest Argentine producer of newsprint, with an annual production capacity of approximately 112,000
tons.
Papel Prensa seeks continuous improvement in occupational health and safety. In this regard, it has
implemented several production policies based on obtaining strategic supplies without depleting natural
resources, using materials that come from sustainable forest management processes, and recovering
raw materials by recycling returned newspapers which are used to reduce the use of virgin fiber. On the
other hand, it continued to focus on consolidating the conservation awareness and the efficient of the use
of the resources involved (especially fiber, water, and energy).
Oportunidades S.A
Oportunidades S.A. (OSA), incorporated on May 26, 2003, is engaged in several activities including,
among others, the exploitation of advertising companies; editing, publishing, distribution, import and
export of magazines, books, etc. In 2012, and together with Ferias y Exposiciones Argentinas SA
(FEASA) the Company incorporated a corporation called Mas Logística S.A. Said company is mainly
engaged in the transportation and distribution of newspapers, magazines and books. Oportunidades
holds a 95% equity interest in that company.
In December 2017, Oportunidades acquired a rotary printing press and a digital one, together with a stock
of raw materials to be used in the printing industry. During 2018 and 2019, OSA implemented all the
proceedings required for the startup of the above-mentioned equipment, developing both Heatset and
Coldset printings, which entail two types of treatments for the drying of the ink after it is applied to paper,
for advertising brochures and graphics solutions for the publishing of books, magazines and catalogs.
During 2020, OSA operated under challenging circumstances due to the pandemic, covering with
extraordinary productions the decline of traditional items caused by the drop in activity derived from the
mandatory and preventive social isolation.
Regarding digital printing, the implementation of variable data technology in publications allowed the
engagement of new customers.
BIMO
On October 13, 2020, AGEA and Botón de Pago S.A. incorporated a company under the corporate name
Billetera Móvil S.A., which is mainly engaged in the provision of electronic payment services. AGEA holds
a 50% interest in the capital stock and votes of BIMO.
BROADCASTING AND PROGRAMMING
Grupo Clarín is the leading company in the audiovisual broadcasting and programming segment. Through
ARTEAR, it exploits the license LS85 TV Canal 13 Buenos Aires, one of the two largest broadcast
television channels in Argentina, in terms of advertising 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 role in the production of audiovisual contents includes agreements and equity interests in benchmark
TV and film producers, such as Pol-Ka Producciones S.A. and Patagonik Film S.A. 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.
ARTEAR
ARTEAR owns El Trece, one of the main broadcast channels in Buenos Aires. El Trece combines fiction,
news and entertainment embracing a varied offering. It also owns TN, a leading 24/7 news signal, and
cable tv signals.
During 2020, ARTEAR ratified its audience leadership in its broadcast and cable signals and in its digital
platform.
During 2020, El Trece’s total audience share reached an average of 6 rating points from 12 PM to 12 AM.
The discontinuation of the fiction show produced by Polka and the cancellation of “Bailando por un sueño”,
due to the mandatory and preventive social isolation, had an impact on audience levels compared to
2019, though this impact was mitigated with new products. As always, ARTEAR’s signals also reaffirmed
their commitment to information and journalism.
During 2020, “Eltrecetv.com.ar” was the most visited portal among the Argentine broadcast stations. This
site includes the live streaming of the signal, in addition to all the programming, full episodes, TV listings
and information about all of its products. The site can be accessed through Facebook, Twitter, Instagram,
and, most recently, YouTube. During the pandemic, eltrecetv.com.ar made available a large portion of its
library of fictions for tv viewers to enjoy.
In the cable TV segment, ARTEAR has informative and entertainment signals. The Spanish language
music signal “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. In addition, Canal (á), a signal
that offers arts, cultural and show business programs, mainly in Buenos Aires, is operated by ARTEAR.
ARTEAR owns TN (Todo Noticias), the most prestigious 24/7 cable news signal in Argentina. TN is a
news signal and its programming is based on ongoing news programs and a varied general interest
programming comprising music, technology, politics, stories, investigations, economy, show business,
among others. During the year, TN ratified its leadership among news channels and became the most
viewed cable signal in the country.
In March, when the Argentine Government ordered the mandatory quarantine, TN achieved historical
audience levels, with peaks of 12 rating points. In this way, it outperformed, for a while, all other channels,
including broadcast channels. The success of TN in television reached the rest of the platforms. It was
the signal preferred by users to get information via streaming: Its YouTube channel exceeded 1,500,000
subscribers.
TN’s success translates into the largest social media community of Latin American media. In Instagram,
it reached a record high of 4 million subscribers, outperforming any Spanish-language medium.
Since the confirmation of the first case of coronavirus, TN has enhanced its journalistic team to cover
news with a federal and global approach. During the year, it had more than 20 reporters working from the
countries with the highest infection rates such as the United States, China, Italy, Spain, England, Brazil,
and Chile, among others. In addition, a team of reporters traveled more than 12,000 kilometers reaching
different locations of Argentina to show how people were dealing with the quarantine. They made over
500 interviews in 86 cities and towns of 16 provinces.
TN pioneered the creation of a Health Advisory Council with medical professionals and experts in
infectious diseases. More than 11 experts from around the country participated, advising the signals’
journalists on a daily basis and supervising the content distributed on all platforms (television, web, and
social networks).
The topics related to the pandemic were not the only ones for which TN stood out. Its coverage of the US
presidential election included 14 journalists working from the main cities of the country such as
Washington, New York, Los Angeles, Nevada, Dallas. Delaware, Atlanta, Miami, Houston, and
Philadelphia.
On the day of Diego Maradona’s wake and burial, TN had 10 outside broadcasting units, 3 drones, and 3
motocams in dozens of locations. As is often the case with very important news, eltrece and TN broadcast
simultaneously. They were the two main channels chosen by the Argentines reaching peaks of 14 and
10.2 rating points (more than 24 points in the aggregate). In addition, the streaming signal exceeded
200,000 simultaneous viewers. Channels from all over the world decided to rebroadcast TN’s coverage
to show what was happening in Argentina. Even competing signals rebroadcast TN’s coverage.
Ciudad Magazine, also owned by ARTEAR, is another cable signal that arose from the merger of two
leading media in show business, Magazine and Ciudad.com. This merger leveraged the best of each and
their potential, to provide the audience with broader news coverage, more entertainment and better
connection.
Quiero, the Spanish language music signal, is also owned by ARTEAR. A leader in its category, it offers
varied programming comprising national and Latin-American rock, hip hop, reggaeton, alternative music,
pop and melodic music, among others.
ARTEAR also produces Canal (á), a 24/7 signal focused on culture. A channel that gathers all genres
linked to art and culture under the premise of a plural approach. A signal with an avant-garde look and
feel that set a trend among its peers.
The signal Volver preserves Argentine television history and owns the largest national film library. The
programs broadcast by Volver are recognized by the public as genuine manifestations of “the best of our
culture”.
Cucinare is the best local signal for gastronomy lovers. Cuisine fans can find easy recipes and
sophisticated dishes with the premise of providing easy-to-prepare recipes. A 100% digital brand in its
origin which grew until achieving a 360° format with presence on television and off-line.
In the digital arena, the sites El Trece, TN, Ciudad.com, and Cucinare.tv lead each of the categories to
which they belong and its mobile applications, focused on multimedia contents, are among the most
downloaded applications in their respective categories. ARTEAR’s social networks have the largest
number of followers and spur the highest interaction in the industry. During 2020, all the sites owned by
ARTEAR increased their audiences.
In 2020, it completed the migration from TN’s site to the ARC platform, Amazon's tool for news site
management. This had a big impact not only on technology but also on design, commercial integrations,
content display across different distribution platforms, among others.
Also during the year, ARTEAR produced a new season of De Barrio, with a deep integration of branded
content and multiplatform integration in the distribution. The program Los Expertos was launched for
broadcast TV (eltrece) and in digital format. In its site, TN launched new content sections and made
product improvements to all of its apps.
ARTEAR is no longer just a broadcaster, it has become a content generator for multiple distribution
platforms. Thus, ARTEAR was forced to invest in more and better technology. Among the most important
technical investments, ARTEAR updated the video switchers used for newscasts which serve the three
newscast studios owned by that company. They were replaced by a new model that contemplates the
increased operational needs of the sector, as a result of the natural enhancement of video sources
required by the new programs, increased by remote conversations due to the pandemic. In addition, the
company replaced the power amplifier equipment of ARTEAR’s mini outside broadcast units, upgraded
the programs and news edition system, acquired equipment that will allow to link the two data centers into
which the company’s technology was divided, in order to improve protection in case of contingencies.
ARTEAR controls Canal 12 of Córdoba, 6 of Bariloche and 7 of Bahía Blanca. All of those signals invest
heavily in journalistic and entertainment contents. They have solid audience shares and a good outlook.
2020 was a complex year for Pol-Ka due to several factors: Production costs, levels of indebtedness, and
shutdown of activities due to social isolation. This prevented the completion of the production of the fiction
show Separadas and the mini-series El Tigre Verón II.
Also due to the shutdown of the activities, ARTEAR canceled production agreements with Turner, Netflix
and Fox. The projects canceled during 2020 are expected to be resumed in 2021.
IESA
During 2020, IESA continued to exploit the sports audiovisual content generation business through its
subsidiaries Tele Red Imagen (owner of 50% of the signal TyC Sports), Televisión Satelital Codificada
S.A. and Auto Sports S.A. / Carburando S.A. The last two companies exploit the comprehensive motor
racing business in Argentina and are also holders of the rights to broadcast the SUPER TC2000 and
TC2000 sports categories. In addition, Inversora de Eventos owns 25% of the shares of Canal Rural, a
local cable signal that produces audiovisual content related to the agricultural sector.
During 2020, sports worldwide were suspended during the first few months, which generated less content
for the audience and its consequent impact on rating, as well as the impossibility of organizing and holding
live events.
Mitre
Radio Mitre S.A. provides sound broadcasting services through Mitre AM 790 (amplitude modulation), La
100 (99.9) (frequency modulation) in the city of Buenos Aires, and Mitre AM 810 and FM 102.9 in the
province of Córdoba.
Mitre AM 790 focuses its programming on a clear journalistic style 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 to 10 AM. It has maintained its leadership, with around 50 points. After
that show, Radio Mitre airs Lanata sin Filtro from 10 AM to 2 PM, hosted by Jorge Lanata, Diego Leuco
and a team of specialists, which lead audience shares, exceeding during several months 40 percentage
points. The program can also be watched in high-definition at radiomitre.cienradios.com. In addition,
Encendidos en la tarde, hosted from 2 pm to 5 pm by María Isabel Sánchez and Rolo Villar, is a fun
afternoon show that combines information, humor and interviews. The show also leads its time slot.
From 5 pm to 7 pm, Alfredo Leuco hosts Le doy mi palabra. His editorials are very popular and achieve
high audience levels of around 40 points. From 7 pm to 8 pm, Pablo Rossi hosts Volviendo a Casa, a
show with all the necessary information for those who return to their homes.
The evening slot starts at 8 pm with Jorge Fernández Díaz hosting Pensándolo Bien. At 11 PM, Cristina
Pérez and her team host Confesiones en la Noche. A show that deals with different current topics and
also with history topics. Finally, at 12 AM, Gabriel Anello and his team host the sports program Super
Mitre Deportivo.
During weekends, Mitre has different proposals. Saturdays from 7 AM to 10 AM. Marcelo Bonelli hosts
Sábado Tempranísimo, with more than 30 years on air in Mitre, with high audience levels that exceed 40
points.
From 10 AM to 12 PM the prestigious journalist Magdalena Ruiz Guiñazú and her team host Esta Semana,
a summary of the most relevant events of the week. At noon, also exceeding 40 average rating points,
Polino Auténtico, a program hosted by Marcelo Polino, together with Yanina Latorre and Amalia Granata,
proposes a fun approach to the most important show business news.
On the other hand, Mitre Informa Primero is still the most awarded radio news service of Argentina.
La 100 closed the year 2020 leading audience shares, with almost 17 points, which was a record high. Its
programming combines famous artists and an ideal mix of music and innovative contents. During the
year, Santiago del Moro led morning audience ratings, from 6 AM to 10 AM, with El Club del Moro, a
program co-hosted by Maju Lozano, which reached unprecedented audience levels close to 28 points.
Guido Kaczka and Claudia Fontán host No está todo dicho, from 10 AM to 2 PM. The program
consolidated its position in its slot and had months with more than 20 points. In 2020, Mariano Peluffo
and Julieta Prandi host Sarasa in La 100, from 2 PM to 5 PM, a casual radio magazine with a fresh style.
The new program reached over 15 points for several months, leading the segment. Afterwards, Sergio
Lapegüe hosts Atardecer de un día agitado. The show Románticos, aired from 8 PM to 12 AM, ranked
first and second in audience ratings within its time slot. During Saturday mornings, Guillermo López hosts
the classic Ranking Yenny, a program that combines music, humor, show business and general
information. Mariano Peluffo hosts Abierto los domingos from 10 am to 2 pm.
Mitre 810 is the radio with the second highest audience share in the province of Córdoba. 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, Pablo Rossi, Juan A. Mateyko and Omar Pereyra.
Cienradios maintains its positioning with the most prominent on-line radio and content menu in Latin
America. It offers a wide range of radios, videos, interviews, shows, games and a premium sound quality.
Cienradios is the largest music portal and recommender of the region and the first one in Argentina, with
almost 28 million unique browsers by the end of 2020.
Audience:
Mitre AM 790 closed the year 2020 with an audience share of almost 39 points leaving behind its
competitor with a gap of more than 26 points. Mitre maintained its leadership throughout the year, with
over 1 million listeners.
La 100 closed the year leading audience share with over 17 points, reaching over 1 million listeners.
OTHER
Services
Gestión Compartida is a company engaged in providing comprehensive solutions to meet the
management and operational needs of companies, which allows its customers to focus their efforts 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 450
professionals.
Today, GC Gestión Compartida S.A. serves over 100 companies from different industries, size and origin.
2020 was a challenging year for GC, with all its employees working from their homes due to the
quarantine. The main priority was to continue operating. It managed to maintain 95% of its customer
portfolio and implemented several new services, such as the payroll service for Telecom and the creation
of a new VAT recovery area in the tax department.
Also during the year, commercial alliances were executed with important companies and consulting firms
that will allow to accelerate regional expansion and offer high quality solutions. In October, GC began
working on the implementation of a comprehensive tool to support the Foreign Trade business, which
provided greater agility and integrity to the Customs, Operations and Administrative processes. This led
to an improvement in the follow-up of Foreign Trade operations and enriched information for customers.
GC Gestión Compartida is a shareholder of Electropuntonet S.A., which was created as the first Argentine
company to sell 100% of its home appliance products online (Pure Player). Its website offered its
customers mechanisms to purchase, securely pay and receive their products. In addition, Electropuntonet
S.A. acquired in 2016 the assets of Meroli S.A., a renowned chain of the province of Córdoba specialized
in the off-line sale of home appliances. By mid-2018, the company decided to shut down the website,
completely reducing the staffing engaged in the digital business to focus on boosting the off-line business.
During the first months of 2019, even though it increased its market share, the industry remained heavily
affected by the macroeconomic situation and sales did not reach the expected volumes. The company
decided to substantially reduce the sale on personal credit with the aim of reducing the financial
indebtedness of Electropuntonet S.A. In 2019, 9 branches were closed down.
In 2020, the company decided to change the focus of its activity. It filed a change of corporate purpose
with the Argentine Superintendency of Legal Entities and began to develop businesses related to the
creation and development of software systems and to the provision of technology advisory services,
among others.
GC Gestión Compartida S.A. owns QB9 S.A. QB9 S.A. produces original games and offers custom
development services, with a focus on high quality casual games. Initially, QB9 S.A. joined CLAWI S.A.
as the main supplier for the development and maintenance of the virtual platform of the game Mundo
Gaturro. In 2015, the company initiated a process with the aim of transferring the digital content and
transmedia equipment of QB9 to its controlling company, which was completed in 2016. The new area
was incorporated into CMD, under the name of QB9 Entertainment, as a logical and necessary step for
the integration and synergies of teams engaged in the development of games.
Ferias y Exposiciones
The principal business activity of Ferias y Exposiciones Argentinas S.A. (FEASA) is to invest in companies
mainly engaged in the organization of events, conferences and fairs.
Created in 2016, Exponenciar S.A.’s main shareholders are FEASA and Publirevistas S.A., with equal
equity interests, and one of its main activities is the organization of Expoagro. The fair has been held once
a year in the City of San Nicolás at a fixed location for 15 years.
2020 was an unusual year. Expoagro was held at Predio Estable Ferial y Autódromo de San Nicolás,
from March 10 to 13, 2020. Expoagro 2020 edición YPF Agro closed its doors one day earlier due to the
circumstances related to COVID 19. Despite everything, it was a great exhibition in terms of numbers:
over 100,000 attendees in three days, and 580 companies participated as exhibitors with new products
and launches distributed over 220,000 m2. Exhibitors achieved record sales.
In 2020, the 16th edition of Caminos y Sabores could not held at La Rural, which remained closed during
most of the year. The same happened with the livestock events planned by Exponenciar SA in Corrientes:
Mundial de Brangus, Nacional de Braford or the 2nd edition of Expoagro at Rural in the Province of
Corrientes.
In order to optimize the technical, administrative, and financial structures, FEASA was absorbed by AGEA,
its controlling company, and was dissolved without liquidation. The merger became effective on January
1, 2021.
CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY
1. SUSTAINABILITY
Since its foundation, Grupo Clarín has worked responsibly to contribute to the sustainable development
of the country from its role as a media company. To this end, it focuses on fulfilling and consolidating the
citizens’ right to information, with a comprehensive journalistic and entertainment offering, based on
accuracy, credibility, freedom of expression and interaction with the audience.
As part of this commitment, the Corporate Social Responsibility Policy proposes different forms of
engagement that allow the company to have a positive impact on the development of the community.
Sustainability is at the core of the Company’s daily actions and all the business units and areas of the
Group focus on four lines of action:
1. Creation of responsible contents
2. Sustainable management across all business units.
3. Transparent communication
4. Promotion of diversity
These lines of action became particularly relevant in the context of the crisis and uncertainty generated
by the COVID-19 pandemic in 2020.
a. A Historical Coverage in the Context of a Pandemic
As an essential service for society, journalism played a key role in a critical year marked by an
unprecedented health crisis. Throughout the year, the journalistic teams of all the media of Grupo Clarín
worked 24 hours a day, 7 days a week to keep the public informed with professionalism, responsibility
and respect for the security protocols. They disseminated, upon verifying information, the most recent
news with a journalistic coverage that sought to reflect all the aspects and consequences of the pandemic
at global and local level.
Thus, Grupo Clarín contributed to raising awareness, preventing the spread of the virus, mitigating its side
effects, and fighting fake news campaigns. In addition, the group continued to create journalistic and
entertainment content, communicating with and accompanying the audience throughout the pandemic.
The following sections detail the commitments undertaken and the initiatives carried out to provide an
exceptional service.
b. Value Creation Model and Framework of the Integrated Report
The following infographic shows Grupo Clarín’s value creation model created in accordance with “The
International Framework” developed by the International Integrated Reporting Council (IIRC).1
This integrated reporting framework establishes the six capitals approach based on which the organization
can create value over the short, medium, and long term. These capitals are: Financial, Manufactured,
Intellectual, Human, Social and Relationship, and Natural. The value creation model shows how the
Company generates value for its audiences through assets and inputs and managed activities and topics.
It also presents the relationship with and contribution to the United Nations Sustainable Development
Goals (SDGs).
1 Version released in January 2021.
MODEL FOR THE CREATION, PRESERVATION OR EROSION OF VALUE OVER THE LONG TERM
Capitals of the Integrated Reporting Framework
Financial
Manufactured
Intellectual
Human
Value
Creation
Process
Inputs
Assets and
inputs of the
organization
Equity capital.
Investments.
Net Income
from Prior
Years.
Activities
Management
of the most
relevant
topics to the
business and
to
stakeholders
Revenues.
Costs.
Investments in
new
businesses.
Transparency.
Accountability.
Editorial
Independence
Ethics and
Integrity.
Reference:
Material
Topics under
the Materiality
Analysis
Printing plants:
Zepita in Capital
Federal (35,000
m2) and AGL in
Santa Fe (3,000
m2).
Presence in 19
provinces of the
country.
Television studios.
Multiplatform
Content Center.
Cúspide’s
warehouse (3,200
m2).
Opening of new
branches, offices
and franchises.
Graphic printing at
plants.
Production and
distribution of
books.
Logistics services.
Transmission of
broadcast
television channels
and radio.
Boost to digital
subscriptions.
Creation of
Value
2019 Results
and
performance
Loss of $465
million.
$26,640
million pesos
in
net sales.
$ 3,246 million
pesos of
Adjusted
EBITDA.
$1,713 million
pesos in
total financial
debt.
249,699 thousand
daily average
copies of Diario
Clarín.
48.9% share of
Diario Clarín in
CABA and GBA.
328,839 digital
subscriptions of
Diario Clarín and
15,000 since the
launch of the
newspaper Los
Andes.
39,966 hours of
entertainment.
5,025 hours of
fiction.
23,940 hours of
news.
Brand credibility.
Editorial
Independence
Content quality.
Ethical Standards
and Editorial
Guidelines.
Freedom of
Expression.
Innovation,
convergence and
technology.
Role of the
gender editor.
Creation of
responsible
content
(journalism, fiction
and
entertainment).
Freedom of
Expression.
Responsible
Dissemination of
Contents.
Vulnerable
Audiences:
Accessibility and
protection.
Creation of
content with social
and
environmental
contribution.
Incorporation of
new technologies.
Promotion of
Public Debate and
Civic Involvement.
Interaction with
the Audience.
Ideological
Diversity.
Promotion of
Journalistic
Excellence.
Content created
together with our
audiences.
Promotion of
freedom of
expression.
Contribution to
public debate with
the event held on
the occasion of
the 75th
anniversary of
Clarín.
Training programs
developed with
universities.
ADEPA and
FOPEA awards to
Diario Clarín.
International
awards to Diario
Clarín (Society for
News Design and
International New
Media
Association).
Professionals,
journalists and
correspondents.
Wages and
contributions.
Employer brand.
Self-management
platform.
Committees:
Diversity; Benefits;
Hygiene and
Safety; Social
Observatory.
Generation of
Employment.
Training and
Professional
Development for
Employees.
Gender Diversity.
People with
Disabilities.
Age Diversity.
Benefit Program.
Internal Opinion
Survey
Management of
employee health
and safety.
Social and
Relationship
Sustainability
Strategy.
Fundación Noble.
Private social
investment strategy.
Suppliers.
Alliances with civil
society organizations.
Readers and
audience.
Customer benefit
programs.
Natural
Diario Clarín’s
Environmental
Management
System.
Production
Inputs and office
supplies.
Water.
Fuels and
electrical energy.
Responsible
management of
materials.
Paper recovery
and recycling
process.
Energy
Efficiency.
Raising
awareness on
environmental
protection.
Media Literacy.
Dissemination of
public service ads
campaigns.
Contribution to
Education and
Culture.
Volunteer program.
Actions in alliances
with CSOs.
Promotion of
responsible
advertising in the
value chain.
Customer and
audience loyalty
initiatives.
Customer Privacy.
1,472,498 tons
of waste
60,750.23 tons
of CO2
equivalent
emissions
4,848.61 m3 of
discharges
184.867 tons of
donated paper
Awareness
campaigns and free
access articles on the
COVID-19 pandemic.
Members of the Latin
American Information
Alliance (ILA).
329,000 subscribers
to Clarín 365
38,852 subscribers to
Club La Voz.
560,040 teachers
trained with the
program “Los Medios
de Comunicación en
la Educación”
delivered by
Fundación Noble.
3,839 active
suppliers,
100% suppliers
committed to
sustainability.
4,775 employees
30,745 hours of
training.
La Voz was
recognized as one
of the top 10
newspapers in the
world according to
the site specialized
in media Editor &
Publisher (E&P).
Telenoche received
the FUNDTV award
to the best national
news program.
Radio Mitre
received the “La
antorcha de AIR”
award from the
International
Broadcasting
Association, for its
communicational
contribution of
service and support
to the community
during the
pandemic.
Contribution
Leadership in the Argentine media industry.
Contribution to the Sustainable Development Goals – 2030 UN Agenda:
c.
Independence, transparency and international guidelines
Editorial independence is essential to guarantee freedom in the exercise of the journalistic role and to
promote the strengthening of Argentine democracy. It is at the core of Grupo Clarín’s activities.
Independence is an assumed responsibility, a way of exercising and guaranteeing rights and a condition
required to ensure sustainability from the organization's standpoint.
The Group has a diversity of revenues, which contributes to generating conditions to be able inform
without any conditionings and, thus, sustain its editorial independence. This diversity ensures that no
advertiser, either public or private, generates revenues that exceed 5% of Grupo Clarín’s total revenues.
Furthermore, the administrative and editorial functions are conducted separately to avoid conflicts of
interest in the creation of contents. Our journalists are completely detached from the sale of advertising
so that they can exercise their profession free from any conditioning factor. In addition, each of Grupo
Clarín's media gives special care to the distinction between advertising and editorial spaces. To such end,
there is a specialized team that manages sponsored contents and oversees that the sponsor is mentioned
in the articles.
Transparency is key to guarantee this independence. Grupo Clarín’s shares have been listed in the
London Stock Exchange and in the Buenos Aires Stock Exchange for 12 years, which drives us to
continually focus on ensuring transparency in the reporting of our corporate, economic, social and
environmental performance. At a local level, the Company presents on an annual basis the Annual Report
and the Financial Statements, which include the Code of Corporate Governance required by the Comisión
Nacional de Valores (Argentine Securities Commission, CNV, for its Spanish acronym).
In addition, since 2015, the Group has published its Annual Sustainability Report. It is the only journalistic
company in Argentina to do so, leading the way towards transparency and sustainability in the sector. All
the information is available on the websites of grupoclarin.com and of the CNV. The Company also makes
available different channels for communication and interaction with our stakeholders.
In order to standardize information and show its contribution to sustainable development in a transparent
and accurate manner, the Group uses various international guidelines:
• The Company has remained committed to the United Nations Global Compact and reports on the
progress made concerning the fulfillment of the 10 guiding principles on human rights, labor rights,
the environment, and anti-corruption practices.
It presents its contribution to the achievement of the United Nations Sustainable Development Goals
(SDGs).
•
• The Company adopts the principles and guidelines established by the ISO 26000:2010 International
•
Social Responsibility Standard.
It applies the Global Reporting Initiative (GRI) standards. The GRI index is included in the integrated
report available at www.grupoclarin.com.
• The Company applies “The International Framework” developed by the International Integrated
•
Reporting Council (IIRC) for the preparation of the Annual Report and financial statements.
It performs a materiality assessment following the recommendation of international standards to
identify and prioritize the sustainability topics that are most relevant and significant to our business
strategy and to our stakeholders. The Materiality Assessment is detailed in the integrated report
available at www.grupoclarin.com
Grupo Clarín also participates in national and international initiatives: Pacto Global Argentina (Argentina
Global Compact), Consejo Empresario Argentino para el Desarrollo Sostenible (Argentine Business
Council for Sustainable Development), Instituto Argentino de RSE (CSR Argentine Institute), Red de
Empresas por la Diversidad (Network of Companies For Diversity), Grupo de Fundaciones y Empresas
(Group of Foundations and Companies), Red de Empresas contra el Trabajo Infantil (Network of
Companies against Child Labor), Consejo Publicitario Argentino, Mesa de Diversidad Empresarial de
Instituto Nacional contra del Discriminación, Xenofobia y el Racismo (Business Diversity Council of the
National Institute against Discrimination, Racism and Xenophobia). In addition, it contributed to the
presentation of the first sustainability stock index in Argentina, together with the Argentine Stock
Exchanges and Markets (BYMA) and the Inter-American Development Bank (IDB).
d. Responsible Creation and Distribution of Contents
• Ethics and Editorial Guidelines
Grupo Clarín has several ethical manuals and editorial guidelines that direct the daily work of its journalists
and ensure compliance with ethical standards in all its media: Journalistic style manual in the newspaper
Clarín, La Voz del Interior and Radio Mitre; web content practices manual in Clarín; guide for the
journalistic work in social media in Clarín and La Voz del Interior, drafting manual for mobile in La Voz del
Interior; and a decalogue of operation in Los Andes.
On the other hand, the Company applies guidelines to address contents, such as: freedom of expression,
search for pluralism, verification of information, preservation of the identity of journalistic sources,
protection of children and adolescents in the informative context, protection of witnesses and accusers,
prohibition of explicit images of violent situations and bullying, prioritization of the institutional order in
case of social turmoil, and cooperation in the search for people and visibility of aid services, in compliance
with effective legislation.
All those manuals and guidelines embrace the Group's main journalistic values: Professionalism, search
for truth, respect, independence, quality, rigor, and responsibility. In the fast-paced news context
generated by the pandemic, we focused on validating information, by streamlining verification processes
in order to avoid tampering, disseminating fake news, and generating confusion and concern among the
population.
The news programs aired by eltrece and TN created an Advisory Committee with specialists in health and
infectious diseases to guarantee our commitment to disseminating clear, accurate, responsible and
transparent information to the community and to contributing to public health. We had specialists, experts
and health authorities in all our programs.
In addition, we created a Special Task Force at ARTEAR’s Multiplatform Content Center. This Task Force
allowed us to order the information received minute by minute, to check it with specialists and experts,
ensuring that the audience received accurate and relevant data. We carried out the communication
campaign #FijateEnLaVoz against the fake news related to the COVID-19 pandemic. In addition, we
trained our work teams on basic guidelines for not sharing sensitive information, such as data on the
health situation of specific people without their consent.
In addition, on January 1, 2020, the news programs of eltrece and TN joined the Latin American
Information Alliance (ILA), an organization made up of more than 20 leading Latin American and
Caribbean television networks that share a commitment to information and truth. Being part of the Alliance
enabled us to ensure a wide coverage of all the news in the region and was vital in times of pandemic.
Today, this alliance has become continent’s leading news organization and allows eltrece and TN to work
side by side with their Latin American peers.
Digital Transformation, Convergence and New Technologies
The coronavirus pandemic boosted the synergy between traditional media and technology platforms. In
a context that affected the print editions, the Company expanded the reach of digital audiences and
offered a comprehensive and rigorous multiplatform coverage with innovative formats.
Clarín’s website went from 50 million unique users per month to 80 million, and the Company created
sections with direct access to news related to the pandemic. Both Clarín and La Voz del Interior were the
first media to grant free access to all the articles related to COVID-19 on their digital platforms.
With historical audience levels exceeding all cable and broadcast channels, TN closed the year as
Argentina’s leading news signal. Success spread from the screen to the rest of the platforms. It was the
signal preferred by the audience to stay informed by streaming, and the social media community of this
signal has consolidated itself as the largest of Latin America. It posted live transmissions of
correspondents on Instagram and Facebook Live, podcasts on the pandemic, and made available a real-
time map of COVID-19 cases worldwide.
Radio Mitre expanded its digital content area and launched “Mitre Live” in Instagram Live where four
journalists interview personalities from different backgrounds. Specific artistic and digital contents were
created with the message “stay at home”, “together, we can beat the virus” to raise awareness and
entertain the audience; and the section “coronavirus” on the web.
During 2020, TN.com.ar and Los Andes also made headway with the implementation of ARC, a suite of
technology tools from the Washington Post to innovate and improve digital platforms. In order to generate
quality content and further engage audiences, we worked on updating the processes of newsroom,
design, programming languages, and web usability. In addition, La Voz del Interior and Los Andes
redesigned their website.
Additionally, the signal TN completely redesigned the brand and incorporated the SMART concept, an
original development that brings more information and clarity to communication in television. With the
appearance of a smartwatch, it provides the audience with uninterrupted information about the weather,
calendar, traffic status, and services. At the same time, Channel 6 included under its logotype the hashtag
“#QuedateEnCasa”.
Moreover, in 2020, the specialized media site Editor & Publisher (E&P) chose La Voz del Interior as one
of the top 10 newspapers in the world, and it received an award at the INMA Global Media Awards.
Outstanding Investigations and Contents
The coverage of the pandemic was present throughout 2020 with outstanding research and contents
showing all the dimensions and impact of the crisis caused by COVID-19.
In the section “Especiales Clarín”, our journalists made special interviews and, through “Un país en
cuarentena,” TN traveled 12,000 kilometers reaching 86 locations to show the different realities of
Argentina. It was a journey from north to south that took 40 days to learn how people underwent the
quarantine in different locations of the country. Every day, we produced content with a federal approach
for the signal’s shows and the news programs of eltrece.
Of particular note is the coverage that was made on the border with Formosa, where dozens of people
were stranded on the provincial boundary because they were not allowed to return to the province. Special
reports were made showing the other side of the pandemic: closedown of stores, births during quarantine,
effects of the use of hand sanitizer, stores that had to be reinvented, and the city at night when the
circulation of people was banned.
Other journalistic reports included the mega-case concerning the investigation on human trafficking,
sexual abuse and money laundering in the evangelical church of Philadelphia; and Hector Gambini’s
articles on the Nisman case. In addition, La Voz del Interior made investigative reports to draw attention
to issues concerning inclusion and diversity, such as gender in the media and haters in Córdoba.
The investigations made by the Group's media are recognized at a global level. In 2020, Telenoche
received the FUNDTV award to the best national news program, and “Ya somos grandes” received the
FUNDTV award to the best journalistic investigation program. In addition, the following investigations
received an award from ADEPA: “Viaje a Chernobyl” and “Un espía detrás de Lagomarsino” by Héctor
Gambini; “El país que deja Macri” by Ezequiel Burgo; “Por qué los adolescentes son un enigma para la
ciencia” and “Coronavirus: así es la carrera por hallar una vacuna” by Eliana Galarzo; “Cómo funciona la
fábrica de keniatas argentinos” by Mauricio Codocea; “Refugio del machismo, la violencia y la cultura del
aguante: por qué cuesta tanto lograr la deconstrucción del fútbol” by Sabrina Faija; “Yo fui jurado:
¿sentido común y veredicto justo?” by Natalia Iocco; the infographic “Auschwitz” and “la música que eligió
Cerati durante 25 años”.
In the human rights category, ADEPA gave an award to the investigation made by La Voz del Interior “El
hambre no es una sensación dicen en las escuelas periféricas” by Mariana Otero; “El “lawfare” del
“Milonga” Moreira” by Carlos Ignacio Ríos in the category Argentine law; “Proyecto Czekalinski” by
Edgardo Litvinoff, which received the second award in the category Social Solidarity; and Carla Romanello
from Los Andes received a special mention in the category Children and Adolescents. In addition, Juan
Pablo Carranza received the Eset award in the graphic category to information security journalism; and
Juan Colombato received the NH award for “Autorretrato de cuarentena, calvario vivido en primera
persona”. Two proposals from Los Andes also received INMA Awards: Los Andes Podcast won the first
place at global level in the category “Best use of audio”; while the documentary “Víctimas del Próvolo”
received a mention of honor in the category “Best use of video".
Finally, it should be noted that Radio Mitre received the award “La antorcha de AIR” granted by the
Association for International Broadcasting, for its communicational contribution of service and assistance
to the community during the COVID-19 pandemic.
Interaction with Audiences and Readers
With a long track record of engagement with its audiences and readers, the Group fosters spaces of
participation that promote freedom of expression, respect for diversity, and pluralism.
Citizen journalism has become an essential part of journalism. As the main or secondary source, we
conduct a verification process to avoid the dissemination of fake news. We interact with our audiences on
a daily basis, be it through social media, live surveys, letters from readers, or telephone calls.
In 2020, with the aim of raising awareness about the importance of staying at home, Mitre and La 100
carried out an unprecedented broadcast. The four radio hosts that generate the highest audience levels,
Marcelo Longobardi, Jorge Lanata, Guido Kaczka, and Santiago del Moro, went live together to give their
listeners a joint message. In this sense, TN launched the campaign #YoMeQuedoEnCasa, which
encouraged people to upload videos to “TN y la gente” showing activities that they carried out at their
homes.
After 100 days of quarantine, always promoting engagement, the audience was encouraged to share a
photo of someone they would like to hug in the context of isolation. In Telenoche, Malnatti interviewed
families from their balconies with an innovative coverage using drones and communicating by cell phone.
Nelson Castro answered questions from the audience about the coronavirus.
Channel elseis reported stories of tourists from all over world that were stranded in the city of Bariloche.
As these stories were made public, the municipal and provincial authorities, together with transport
companies, took effective actions to solve each situation. In October, several of those tourists were
contacted and the closing of these stories was reflected in a series of articles published on the portal
www.bariloche2000.com.
Another example of audience engagement was the campaign “¿Qué te dirías a vos mismo dentro de 25
años?”. With this idea, Clarín offered readers the possibility of sending a message to themselves and
receive it in 2045 in their email addresses when the newspaper turns 100 years old. The campaign
generated repercussions on social media, where many people decided to share projects, dreams, or plans
for their lives and a better future for the country.
Grupo Clarín is also committed to creating local contents and giving voice to its communities. To this end,
Clarín publishes regional newspapers that publish contents related to 30 locations in the surroundings
areas of the City of Buenos Aires, focused on showing the identity and local issues of each city. In addition,
the Group has two of the most important regional newspapers of Argentina, La Voz del Interior in the
province of Córdoba, and Los Andes in the province of Mendoza. It also has broadcast channels in
Buenos Aires, Bahía Blanca, Córdoba and Río Negro. In addition, TN offers nationwide coverage and is
present at significant events that take place in every province of Argentina. The most important issues in
all the communities of Argentina are reflected both by people interviewed live and by the correspondents
of Radio Mitre all over the country. And within the Cienradios Universe users can find IP Radios focused
on different local realities such as Mia (Córdoba) and Del Lago (Bariloche).
Social Coverage
Grupo Clarín played an essential role during the pandemic in reporting and drawing attention to social
problems. Due to the context of the pandemic, the Group made changes to the contents published to
focus on services, health, explanatory sections, and opinions on the matter.
The Group joined an initiative driven by ADEPA aimed at raising awareness of the coronavirus and
promoting a commitment to the behaviors required to face the pandemic. With the hashtag
#seamosresponsables, all the country’s newspapers, including Clarín, La Voz del Interior, Olé, and Los
Andes, published the same cover in their printed edition. This campaign was also implemented on the
portals of TN and Radio Mitre.
Both Clarín and La Voz del Interior, in addition to the last-minute information, added special sections with
key facts about how to prevent infections, detect symptoms, and the protocols to be followed. We
disseminated official applications and resources for the prevention of COVID-19, ideas to favor harmony
at people’s homes during quarantine, and cleaning tips. We also contributed to plasma donation
campaigns and interviewed the health professionals who seek to fight the pandemic. The customers
subscribed to Diario Clarín and La Voz del Interior received a specific newsletter with this information and
the latest updates on the topic. Los Andes created a specific section called “coronavirus” in the printed
edition and modules in the digital version, which were also implemented in the rest of the sections.
Likewise, TN, the news programs of eltrece and Radio Mitre broadcast live using mobile phones from
locations throughout the country and from other countries through correspondents. In every program we
constantly had specialists, experts, and health authorities talking on topics related to the pandemic. Radio
Mitre focused on conveying peace and hope to listeners, engaging them every day in an open dialog
between society, politics, and the scientific community. It added a new program broadcast on Saturday
and Sunday afternoons called “Todo lo que pasa, pasa por Mitre,” focused on the pandemic and the
situation in Argentina and the world. Radio Mitre also launched special sections such as “Quedate
Cantando en Casa” to accompany its listeners. In Telenoche and in the program Lado C, Martín Cicioli
brought to the fore the harshest social problems of the pandemic.
On the other hand, Polka made available its most popular fictions during the quarantine with the aim of
providing a free entertainment service to Argentines, and eltrece uploaded them to their digital platforms.
Under the hashtag #ModoCuarentena, Polka produced content with its most popular personalities and
disseminated them through its social media.
eltrece gathered the students of the theater Teatro Colón to perform an emotional national anthem. From
their homes, over 40 musicians from Instituto de Arte del Teatro Colón (ISATC) participated in this
unprecedented version in virtual format.
The Company continued to encourage people to engage in solidarity actions. Telenoche launched the
section “No estás solo” where every week Daniel Malnatti presented the story of a person or group of
people with a specific problem and the news program was the link that allowed others to get involved in
order to help. Throughout the year, Clarín’s quarterly CSR supplement continued to highlight social,
environmental, economic inclusion, and development topics.
TN continues to draw attention to multiple social problems in the program “Esta es mi villa” in TN, hosted
by Julio Bazán, who visits slums and shanty towns to cover stories about people that overcome obstacles
in the context of extreme poverty.
Promotion of diversity
With a commitment to contribute to the eradication of gender inequalities and to create gender-sensitive
content, the main media of the Group (Clarín, eltrece and La Voz del Interior) adhered to The Step it Up
Media Compact from UN Women. Clarín has a gender editor, who provides guidelines to address news
with gender perspective and avoid the reproduction of stereotypes.
There is gender parity in the news programs aired by eltrece and in the different news segments of the
signal TN. In addition, the Company seeks to ensure a gender balance in the participation of columnists,
and promotes the use of the UN Women’s Gender-inclusive language guidelines.
In 2020, La Voz del Interior started implementing the Project 50-50 to achieve gender-equity in sources
following UN Women’s recommendations and worked on the development of a Directory of Female
Sources to support the work of journalists. Clarín participated in the UN Women’s “Win-Win: Gender
equality means good business” program and developed an action plan to be implemented in 2021.
In addition, during 2020, the journalists Luciana Geuna and María Eugenia Duffard hosted a political
journalistic program that bet on getting interviewees “out of the box”. We maintained female leadership in
political columns, such as Luciana Geuna in the news program Telenoche. Los Andes enhanced the page
on gender that is published every Monday as a fixed section in the newspaper. In a year hit by the
pandemic, attention was drawn to the work of Argentine scientists in different areas and to the situation
of people with disabilities.
In addition, a team of journalists specialized in gender issues developed a guide with recommendations
for addressing news with a gender perspective. This guide is based on the 20 core points proposed by
ADEPA for the coverage of cases of femicide and gender-based violence. This team also developed a
quick guide with general guidelines to be considered by journalists in the coverage of the voluntary
interruption of pregnancy bill or “legal abortion” discussed in Parliament. And we continued to display in
all our platforms the hotlines available to ask for help in case of gender abuse or violence.
Within the framework of a new anniversary of the march #NiUnaMenos to fight against femicides, Diario
Clarín, together with Spotlight a partnership between the European Union and the United Nations to
eradicate gender-based violence, launched a campaign publishing the obituaries of more than 300
women that were murdered in Argentina over the last year. The aim was to raise awareness on society
of the magnitude of this problem and encourage people to be part of a cultural change in order to achieve
a more egalitarian society.
To commemorate Women’s Day, as every year on March 8, we conducted a multiplatform coverage.
Clarín delivered its first weekly newsletter on gender and in the Sunday newspaper all sections addressed
different issues that are still faced by women today. Like the year before, but in virtual format, Radio Mitre
participated in the event organized by the Argentine Council of Advertising: #SinEstereotipos against the
reproduction of gender stereotypes in advertising campaigns. And Todes Nosotres, the community of
inclusion and diversity in TN.com.ar, published stories of women who broke gender stereotypes working
on what they love: driving a truck, assembling furniture, fixing homes or car engines.
Tn.com.ar continued to publish stories in the section “Somos familia” with the aim of showing new family
models and raising awareness on how sexual minorities fight for their rights, the scientific advances that
make gestation possible for infertile couples, same-sex couples or families that decide to adopt. On the
other hand, La Voz del Interior has a fixed column by a transgender activist that addresses issues related
to discrimination and the social insertion possibilities available to that community.
Civic Involvement and Public Debate
Promoting debate and civil involvement are fundamental pillars of democracy. Debates were held in the
news programs with opposing positions on political, economic, social, education, and health issues,
among others. In 2020, we addressed a broad agenda of topics from the perspective of different political,
social and cultural protagonists, particularly in relation to the protection of individual rights during the
pandemic.
In 2020, we conducted a comprehensive coverage of the public debate on the treatment at Parliament
and subsequent enactment of the voluntary termination of pregnancy law. In addition, special emphasis
was given to public debate on education in times of quarantine, its challenges and impact. We held an
event on the occasion of the 75th anniversary of Clarín, with interviews to global and cultural prominent
figures, and former Latin American presidents, seeking to promote the values of a pluralistic and
participatory democracy. La Voz del Interior held talks with prominent figures about the context generated
by the pandemic. Los Andes published special editorials to discuss the constitutional reform of the
province of Mendoza with the participation of 16 experts.
elseis had to cover a complex topic, the situation in Villa Mascardi with the claims from radicalized groups
of Native Peoples. At all times the journalistic teams worked with responsibility and professionalism, the
situation was analyzed from various points of view and sources of information, and communication was
aimed at maintaining social peace and preserving institutional order.
Finally, La 100 continued with the section “Derecho en Zapatillas” of the program “No Está Todo Dicho”,
aimed at raising awareness on people of their rights and obligations under the law, helping them to make
decisions and address the concerns raised by consumers.
• Accessibility and Protection of Vulnerable Audiences
Through technology, the Group’s audiovisual companies seek to ensure that all the audiences can have
access to their contents. In this sense, eltrece uses subtitling, audio description, audio description
interpretation, and sign language. In addition, both eltrece and TyC Sports offer closed caption.
At the same time, the Company focuses on ensuring that children can only access contents that are
suitable for their age. The Group complies with the laws: At 10 pm we show a safe harbor sign and include
warnings provided by the National Institute of Film and Audiovisual Arts, INCAA, for its Spanish acronym,
that state the age suitable for viewing contents, and we also include warnings when contents are not
suitable for children and adolescents, among other practices. In order to prevent stigmatization, we avoid
conducting interviews to, showing images of or revealing the identity of minors, unless it is a topic that
promotes positive values.
e. Customers and Suppliers
• During 2020, customer service was provided remotely, incorporating new tools and
communication channels to ensure closeness with the same efficiency as ever. An example
of this is the incorporation of WhatsApp Business by Gestión Compartida S.A. as a new
communication channel, and the Subscription Chat Bot implemented by La Voz del Interior.
• For customers who were unable to receive the newspaper during the quarantine, we gave
them the possibility of suspend the delivery service for 30 or 60 days, keeping the benefit
card active. In those locations where the newspaper could not be delivered due to the
suspension of flights, we offered subscribers to switch to digital subscription. In addition, we
increased customer service representatives and communication channels to address the
increase in calls received during the start of the quarantine. The Company launched a
communication campaign offering benefits that can be accessed through online platforms.
•
In addition, we continued to focus on improving procedures that safeguard sensitive and
personal information, and measures that ensure that the data of participants in Apps and
networks remain in full privacy.
We maintained our benefit programs, our customer service center, and held regular meetings to receive
complaints, suggestions, and opinions. GC Gestión Compartida S.A. started to work on a program called
Customer Experience aimed at creating a customer-centered culture. We conducted once again the
annual satisfaction survey. Respondents gave our customer service 7.95 out of 10, which shows that
customers value our service. La Voz’s Customer Service Center, which has been certified under ISO
9001:2015, received 99,855 calls and the chatbot handled 16,949 interactions. Overall, we received
116,804 calls from subscribers, with a service satisfaction rate of 94% and a response rate of 65%.
Value Chain
Grupo Clarín promotes the application of criteria with a triple impact - economic, social and environmental
- on its value chain through Gestión Compartida, the subsidiary that manages the relationship with most
of the Group’s suppliers (3,839 suppliers).
100% of the suppliers working with Grupo Clarín receive and sign, through GC Gestión Compartida S.A.,
a Letter of Commitment to Sustainability within the purchase orders. In this way, they undertake a formal
commitment to sustainability in their operations that covers 10 key points: Compliance with effective
legislation; respect for human rights; good working conditions and equal labor opportunities; eradication
of forced or child labor; freedom of association; proper handling of information and data; fight against
corruption; and respect for the environment. In addition, the daily interaction with our suppliers is
channeled through Gestión Compartida's Customer Service Center, which received 2,600 calls per
month, with an average resolution rate of 90%.
f. Our People
Team Management
With 4,775 employees in 19 provinces that work with professionalism and creativity, Grupo Clarín plays
an active role in the economic growth and development of Argentina.
During 2020, the pandemic and the quarantine posed a major challenge to the day-to-day management
and coordination of the work team activities. At all times, we sought to guarantee the population’s access
to information, while we rearranged our work schemes in order to comply with security protocols and
safeguard our people.
To this end, we created a committee made up of specialists in infectious diseases, Human Resources
managers, and health and safety experts. As a first step, we accelerated digitization and teleworking in
all areas possible, leaving the face-to-face model only for critical sectors (for example, the closing of print
editions). The Company worked with the technical areas to guarantee the required tools and access, and
with leaders to ensure the continuity of operations through the remote management of their teams. In
addition, we increased health and safety measures, we created emergency work teams, reassigned tasks,
and established rotating schedules in order to comply with social distancing measures.
Technology tools were big allies, we used collaborative management tools and agile methodologies such
as: OneDrive, Google Teams, Hangouts, Slack, i.News, Scrum, and the Digital Smart platform. In the
news, we implemented the use of the boom pole, a device that allows to maintain distance with the
interviewee. Thus, each journalist started to use a wireless microphone under the face mask and the
directional microphones that were in contact with the interviewees were put on removable covers that
were changed after each interview.
Employees by
Gender
Women
Men
Total
2019
2020
1,416
3,561
4,977
1,351
3,424
4,775
Employees by Age
Up to 30 years old
Between 31 and 50 years old
Over 51 years old
Total
Employees by type of
employment
Part-time
Full-time
Total
Employee Turnover Ratio 11.56%
Diversity
Women
330
909
177
1,416
Women
60
1,356
1,416
2019
Men
463
2,148
950
3,561
2019
Men
93
3,468
3,561
Total Women
295
862
194
1,351
793
3,057
1,127
4,977
Total Women
63
1,288
1,351
153
4,824
4,977
2020
Men
372
2,040
1,012
3,424
2020
Men
116
3,308
3,424
Total
667
2,902
1,206
4,775
Total
179
4,596
4,775
The diversity of our teams is key to create innovative contents, products and services that reflect the
diversity of our audiences. Grupo Clarín promotes diversity and does not tolerate any type of
discrimination related to gender, disability, age, ideology, culture, physical appearance, health, sexual
orientation and gender identity, religion, socio-economic vulnerability, family situation, or civil status.
Grupo Clarín’s Diversity Program establishes four main lines of action: gender diversity, people with
disabilities, age diversity and ideological diversity. In addition, it proposes 8 dimensions on which focus is
made: communication; awareness; pay equity; recruiting and hiring; leadership training; professional
promotion and development; work-life balance; workplace and sexual harassment and violence and
working conditions.
The Group's main media have adhered to the UN Women Step It Up for Gender Equality Media Compact
and, at corporate level, to Women's Empowerment Principles (WEPs) established by UN Women. During
2020, we continued to deliver training in our different business units.
In addition, we provide the following benefits aimed at achieving a diverse workforce and enabling women
to develop their careers in the workplace: Breastfeeding rooms, extended maternity leave, paternity and
adoption leave, and flexible return to work.
The Company supports young people in the search for their first job. Through framework agreements
executed with universities all over the country, we seek to attract students with high potential. In alliance
with Fundación Forge, Gestión Compartida seeks to facilitate access to jobs for underprivileged young
people. 30 young people had their first job interview via video call with Grupo Clarín’s recruiters during
2020.
In addition, GC Gestión Compartida S.A. continues its partnership with the organization INCLUYEME for
the incorporation of people with disabilities into formal work. In 2020, we created the Sustainability Task
Force, which focuses on promoting inclusion and diversity.
Communication and Dialog
During 2020, communication and dialog were key for organizing work teams and accompanying people.
As a starting point, a work plan was developed to improve the impact of internal communications in the
context of uncertainty generated by the pandemic.
Throughout the year, we enhanced all our digital channels and created new ones, such as the launch of
Instagram for Radio Mitre’s and TyC Sports’ personnel. In addition, we created specific sections in our
internal communication tools with all the information on COVID-19, including symptoms, protocols, and
recommendations.
GC Gestión Compartida S.A. participated once again in the Great Place to Work survey and Los Andes
conducted the Internal Opinion Survey. In several business units of the Group, we conducted pulse
surveys to assess the emotional well-being of our staff, and to learn about their concerns. In response to
those surveys, we developed initiatives to safeguard the physical and mental health of our people. We
also generated open spaces for the interaction between our employees and management so that raise
their concerns and clear doubts.
As to our communication with union representatives, we hold regular meetings with them to address
several employment issues. Out of Grupo Clarín's total employees 65.76% is covered by collective
bargaining agreements.
• Work-Life Balance and Benefits
Through its benefits policy, Grupo Clarín promotes the welfare of its employees and their families, and
each business unit provides additional benefits according to the tasks carried out. Some of the benefits
granted are:
• Flexibility: Flexible work, home office, flex Fridays, day off on birthday and vacation days in
addition to those provided by law.
• Family: Reimbursement of daycare fees for the children of our employees, events with the
children of our employees, benefits for the family of our employees (health care and fitness
center), breastfeeding rooms in our offices, parental leave beyond the term provided by law,
gradual return to work after the parental leave, adoption leave, special leaves for premature
children, wedding policy, extra half hour for breastfeeding mothers beyond the period established
by law and additional days of sick leave to provide care for a sick dependent.
• Other Employee Value Propositions: tarjeta Clarín 365, English classes, preferential prices for
insurance, several discounts in products and services, vending machines, value recognition
policy, financial aid, and long term savings plan for executives.
In 2020, 34 women and 43 men took the parental leave, of which 64.7% and 95.3% returned to work at
the end of the leave, respectively2. The retention rate was of3 60% in women and 93% in men.
Specific actions were implemented throughout the year to support our people in their work-life balance.
Grupo Clarín created webinars for families to share games with their children, and held two online after
office events to generate bonds among working teams. In addition, we delivered a personal care and
cleaning kit of the brand Unilever to the homes of all our employees, we conducted the flu vaccination
campaign, and delivered a gift card from a supermarket instead of the Christmas box.
We implemented an Emotional Support Program for all the personnel of our business units. We performed
a risk assessment on all the calls received in the psychological support hotline to analyze the severity of
each case. The actions carried out during the year included: Training on healthy life habits; sports
routines; communications with prevention guidelines, health and safety protocols; online sweepstakes
and delivery of prizes in digital format; suggestions for home entertainment; and gifts for watching virtual
theatre plays and games to share with the family. In addition, our business units provided their personnel
with the necessary elements for telework (technological equipment, ergonomic chairs, and general
advice). For those workers who had to continue to go to the office, the Company made available a
transport service.
Professional Development
Through the Corporate Training Program, Grupo Clarín offers a wide variety of training proposals, which
are supplemented with the specific activities carried out by the business units.
In addition, in order to boost the development of its executives, the Group implements specific training
sessions to promote the Leadership Model. During 2020, the Company held webinars open to all staff on
topics such as negotiation, coaching, leadership in times of crisis, and team management, among others.
In addition, during the year, we enhanced the training on digital transformation: business, marketing,
advertising, journalism, platforms, tools, and big data. Together with Universidad de San Andrés, Grupo
Clarín continued with the Master’s Degree in Journalism; this year with online classes.
The Group continued to make Open Internal Job Postings to promote internal mobility, and internship
programs to incorporate young talent.
6.44 hours of training per employee
30,745 hours of training
• Health and Safety
In 2020, all efforts were focused on implementing measures to comply with safety protocols and to
preserve the health of all our employees.
At the offices, the Company implemented acrylic dividers to avoid close contact between people, the
mandatory use of face covering or masks in all areas, and recommendations to be extremely careful:
frequent hand washing, talking at a distance, and using hand sanitizer and isopropyl alcohol for desktop
items and work equipment. We intensified the disinfection tasks, distributed cleaning kits at each desk,
and installed tables with hand sanitizer and alcohol. At the entrance of our buildings, we implemented
temperature checks and sanitizing floor mats, and strengthened preventive cleaning and disinfection
routines. In addition, the Company installed Ozone equipment to disinfect closed common spaces (e.g.,
radio studio and newsroom), and implemented UV-Light disinfection in all the areas that have more people
circulating.
Throughout the year, we disseminated information and gave training on COVID-19 prevention protocols.
In addition, we implemented a web platform for submitting an affidavit stating the absence of symptoms
and for enabling the traceability of people present at buildings. A specific e-mail address was also made
available for communications and queries on how to act in the event of infection.
2 13 women were still on maternity leave as of December 31, 2020.
3 Percentage of people who returned to work after the parental leave and stayed in the Company 12 months.
In addition, we intensified outside broadcast coverage and meetings were held outdoors. The reporters,
camera operators, assistants, and the employees that work in outdoor broadcasting received specific care
kits (face masks and special glasses) and worked with their own items, which were not shared. We
delivered training on a special protocol for working outdoors, such as in the case of soccer tournaments.
In the case of those employees that belong to risk groups, we implemented electronic devices and
broadband internet links at their homes.
g. Social Development
During 2020, community engagement actions were focused on supporting society in times of COVID-19.
The campaign #SomosResponsables, driven by the Fundación Noble, was aimed at promoting health
care, preventing coronavirus, and being responsible with the information shared in social media at the
beginning of the pandemic.
• Community Engagement and Social Advertising
In order to strengthen civil society, Grupo Clarín contributes resources, time and advertising spaces to
promote and draw attention to causes related to social, civic, and environmental issues.
Donation of Advertising Spaces in Pesos
Seconds
Pages
Printing of Online Banners
Total Amount of Pesos Donated
2019
155,405,999
28,109,877
39,106,222
222,622,098
2020
198,077,707
36,303,073
65,285,909
299,666,689
The Role of the Media in Education
Fundación Noble has driven the initiative “Los medios de comunicación en la educación” for more than
30 years with the aim of promoting critical and creative reading of media content. This a pioneer program
widely recognized abroad that consists of workshops and educational content suited to the needs of
teachers and students. Since its creation, 560,040 teachers have participated.
In 2020, virtual courses were launched in the Foundation’s virtual campus, covering the following topics:
Identification of reliable information on the Internet, production of a digital medium at school, work by
media and ICT projects; use of mobile devices in the classroom; use of technologies for story-telling;
production of podcasts and streaming in the classroom; and how to address cyberbullying.
In addition, in order to strengthen teacher training in times of distance education, 24 virtual courses were
delivered, with the participation of 5,003 teachers, school authorities and students of teacher training from
all over the country. In addition, we launched the podcast “Los Medios de Comunicación en la Educación”
in order to create a space for dialog with the educational community - school authorities, teachers,
students, parents and experts - to address the complexity of distance learning and teaching.
As in previous years, we held the sixth edition of the photography contest for young people
#sosVOSenlared2020. This new edition invited productions to revolve around the question “How are you
handling this quarantine?” Finally, we launched, together with UCA, the Postgraduate Degree in
Education, Media and ICT to strengthen the digital, informational and media skills of teachers.
During 2020 , through Fundación Noble, the Company also continued to offer donations of bibliographic
material, and sponsored the Reading Marathon of Fundación Leer with dissemination spaces in Clarín
and in social media. On the other hand, the campaign “Hay un solo camino, la educación” was aimed at
placing education in the media agenda during September. In this edition, we published in the newspaper
and in clarín.com articles and expert opinion columns on the challenges of education in times of COVID-
19.
• Promotion of Culture
Grupo Clarín’s media contribute to the promotion of local culture and identity through the contents they
generate.
In addition, the Group promotes the Clarín Novela Award, one of the most prestigious literary contests in
Spanish America that contributes to generating ecosystems of culture and development. In 2020, the 23rd
edition was held: The winner was Ignacio Arabehey for his novel “Asomados a un pozo”, and received a
prize of $600,000 and the publishing of his book.
At the same time, during the quarantine, we gave recommendations and disseminated information online
on art and culture such as “Un plan por día” hosted by Mariana Mactas in Telenoche and Arriba
Argentinos. In addition, the documentary “En el camino con Mario Markic”, highlighted the regional
realities of every corner of the country and the cultural richness of Argentina.
In Radio Mitre, one of the highlights was a special report on the occasion of the 100th anniversary of radio
broadcasting. In Channel 12, in the section “Tomando Mate con…” of the news program Telenoche, we
interviewed personalities from different fields: culture, arts, literature, theater, films, and television. Finally,
TyC Sports made a 48-hour coverage on the death of Maradona, and La 100 devoted much of its
audiovisual content to remembering his figure.
• Alliances with civil society organizations
During 2020, with the program “Unidos por Argentina”, broadcast television channels joined in a single
broadcast aimed at raising funds for the Argentine Red Cross and acquiring the necessary supplies for
hospitals to cope with COVID-19.
In addition, in a different format adapted to the mandatory isolation measures, we held the 29th edition of
“Un sol para los chicos” of eltrece for the benefit of UNICEF, showing the actions carried out by this
organization in Argentina in response to the impact of the pandemic, guaranteeing the
rights of children and adolescents. In 2020, the gross funds raised reached $141,395,025 and the
campaign won an Eikon Award.
At the same time, in 2020, eltrece and Fundación Noble organized, as every year, a new edition of
"Abanderados de la Argentina Solidaria”, another initiative to foster the value of solidarity in Argentine
society. This special edition recognized five Argentines who stood out for their help to others during the
pandemic. Estanislao Gómez Minujín, co-founder of Convidarte, was chosen by the public as Abanderado
del Año, and received $400,000 pesos to continue the project that was created in March in the face of the
food and economic crisis generated by the social and preventive isolation. His project gathers thousands
of volunteers who cook at their home with those who need food.
In addition, during 2020, the following campaigns were carried out and disseminated in the Group's media
to contribute to civil society organizations in times of pandemic:
• Fundación Noble’s campaign Ahora más que nunca, donar ayuda: aimed at promoting donations to
organizations engaged in strengthening the health care system and ensuring that the most vulnerable
people also comply with mandatory isolation. The participants included: Cruz Roja, Cáritas, Amia,
Aciera, Unicef, Fundación Sí, Banco de Alimentos, and Conciencia.
• The campaign Una sola hinchada aimed at collecting hygiene supplies and non-perishable food. It
was promoted by GDFE and RIVER, with the participation of soccer players, supported by TyC
Sports.
• The campaign Argentina en Acción, aimed at raising funds for organizations that assisted people
affected by the pandemic. Developed by Fundación Noble, La Fundación La Nación and Mercado
Libre, with the support of ADEPA.
• The campaign developed by UNICEF and Fundación Noble Esto también es lo malo del COVID,
Aimed at assisting vulnerable children.
• The campaign Banco de Alimentos, aimed at collecting food for community canteens.
• The campaign Miles de máscaras, developed by COAS, aimed at the donation of face masks for
public hospitals.
• The campaign #Abrigados, aimed at the donation of coats for people living on the streets.
h. The Environment
Content that Promotes Environmental Awareness
Committed to environmental care, Grupo Clarín addresses the growing awareness and concern in
audiences about the preservation of the planet and its resources. To this end, it disseminates journalistic
investigations, scientific articles, covers news, and gives advice on involvement, among other initiatives.
During 2020, the Group’s media carried out an extensive coverage of forest fires in the highlands of the
province of Córdoba, in the islands of Delta del Paraná, and also covered floods and water care in
Mendoza, among other issues.
In addition, it disseminated cases of the so-called “return to nature”, which occurred in many places
around the world as a result of the isolation of people at their homes and the reduced amount of traffic,
pollution, and visitors to natural areas or protected parks. Thus, during the quarantine the news covered
how deer, wild boars, goats, and even bears appeared in the cities.
Each of its media enhanced the attention drawn to disseminating the problems that have an impact on
environmental care. Channel elseis continued with Ecos del Parque TV, a television program dedicated
to the dissemination and care of the biome of Nahuel Huapi National Park and other national parks. In
Fenómenos, the program in the signal TN dedicated to climate phenomena hosted by the meteorologists
José Bianco and Matías Bertolotti addressed the main environmental news. Radio Mitre continued to
disseminate environmental and sustainability topics in the blog “Planeta Vivo” and the magazine VIVA in
its section ECO addresses the problem of environmental protection in different fields (textile, food,
construction, industry). In addition, Cienradios has the microsite “Seres Vivos” dedicated to news about
life and nature. Finally, the children’s magazine Genios has a section called “Genios por un mundo mejor”,
which addresses issues related to environmental care, civic awareness, and social responsibility.
Environmental Management and Policy
Grupo Clarín focuses on optimizing its environmental performance and on reducing the possible impacts
of its operations on the environment. To this end, the Company implements measurement and
improvement plans in production processes, invests in equipment with better technology, works in the
adoption and certification of environmental standards, raises awareness on the care of resources, and
carries out specific actions such as the recovery of paper.
The Group's Social Responsibility and Sustainability Policy sets out the commitments to environmental
management and the related goals. Clarín’s printing plant has in place a specific Environmental Policy
that encompasses business printing and binding processes that are conducted at its premises. The
Environmental Management System derived from this Policy is certified under ISO 14001:15.
During 2020, due to the context generated by the COVID-19 pandemic, some processes were
rescheduled, such as audits to suppliers, planned investments, and some of our training programs.
Nevertheless, we delivered training to all our employees on waste sorting and disposal, general risks in
to COVID-19. At TyC Sports, we disseminated
tasks, protocols and emergency response
recommendations on how employees could engage in sustainable practices when working from their
homes.
Materials
Grupo Clarín works on reducing the consumption of materials and streamlining the management of the
resources used, both concerning production inputs and office supplies.
Most of the paper used for the printing of newspapers is from Papel Prensa, in which Grupo Clarín holds
an equity interest. 85% of the fiber used comes from plantations certified by PEFC and FSC on the Chain
of Custody and Controlled Wood, which provides assurance that the certified product originates from
sustainably managed forests. 10% of the remaining fiber (the maximum percentage that can be added to
the process) derives from the recovery of paper and the remaining 5% derives from the purchase of FSC
certified long fiber. In addition, Papel Prensa has an agreement with the National Institute of Agricultural
Technology (INTA, for its Spanish acronym) for the enhancement of the willow forestry performance. In
addition, we continue working on recovering the largest amount of waste paper possible (printing errors,
paper jam, among others) and the unsold newspapers to sell them to Papel Prensa’s Plant, which recycles
newspapers.
During 2020, Los Andes also experienced a decline as observed by the other companies of the industry,
which was worsened by the COVID-19 pandemic. La Voz del Interior, along with the change in the format
of the newspaper, migrated to a new bulk preparation methodology that resulted in savings on critical
operational inputs such as straps, streech and kraft paper.
Consumption of the Main Materials (in tons)
Paper
- Graphic Printing
- Office
Ink *
CTP Aluminum plates
*Includes figures from AGEA Zepita from January to November 2019.
2019
2020
56,222.29 23,223.33
40.65
416.04
86.24
48.77
652.73
154.66
Energy and Emissions
The efficient use of electricity provided by the power supply network is essential for business
management, because it accounts for 80% of energy consumption. This consumption is supplemented
by alternative power generators for offices and industrial facilities that require fuels for their operation.
In order to achieve greater energy efficiency, during 2020, the business units continued to replace
traditional lighting equipment with LEDs. In addition, the pandemic resulted in lower power and gas
consumption at our offices, and in lower CO2 emissions from air transport. La Voz del Interior worked on
a change in productive habits and behaviors, and the printing plant was reconfigured into a compact,
polyfunctional production cell that allowed to improve its operational performance and optimize daily tasks.
For example, newspaper print runs were unified into low-demand energy schedules and unnecessary
operational shifts were eliminated. All of this resulted in energy savings of 17.6% compared to the previous
year.
Direct and Indirect Power Consumption (in GJ)
Electricity
Natural gas
Gasoline
Gasoil
CNG
Renewable Energy*
Total
* Estimated data.
2019
144,646.34
38,248.62
3,209.68
5,566.48
308.02
8.03
191,987.17
2020
126,597.86
37,943.72
695.92
1,733.77
-
-
166,971.27
Greenhouse Gas Emissions (in tons of CO2 equivalent)
Direct Emissions (Scope 1)
2019
2020
2,493.64
40,373.41
Indirect Emissions (Scope 2)*
Other Indirect Emissions (Scope 3)
Total
* Emission factor used: 0.4635 tCO2/MWh
** The variation against 2019 is due to the decrease in consumption generated by the mandatory social isolation.
18,623.22
81,237.03
102,353.89
16,298.06
4,078.76
60,750.23
Waste
The waste management strategy of the subsidiaries of Grupo Clarín encompasses: The reduction of the
generation of hazardous waste and its proper final disposal with authorized companies; and the
separation of urban like waste into recyclable and non-recyclable. The industrial waste from printing
processes (ink, oil, grease and solvents) is sent to third party facilities for their recycling, reuse or safe
final disposal.
With a focus on circular economy, we recover paper at Clarín's Plant as part of the newspaper return
process. Fully reusable materials are used in the printing process, such as aluminum plates. Special focus
is placed on the sorting of paper and cardboard waste, which is delivered to organizations and foundations
such as Fundación Garrahan.
Waste by type (in tons)
Total Hazardous Waste*
Total urban-like or non-hazardous waste
* Hazardous waste is not exported, nor imported.
2019
133.64
1,313.04
2020
64.77
407.73
The most significant effluents generated by the Company are those resulting from the printing facilities'
development processes. They are subject to rigorous treatments and measurements before disposal. At
AGEA’s printing Plant, we reuse water, thus reducing discharges. At La Voz del Interior, waste water is
subject to treatment and is then reused for irrigation at the Company's facilities. The Company's office
buildings and other facilities only discharge domestic waste water.
Water Discharge *
Annual Volume Discharged (in m3)
* The effluents generated are not discharged in water bodies.
2019
9,013.11
2020
4,848.61
RISK FACTORS
As an Argentine corporation, Grupo Clarín S.A. 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 the Company’s business plans, and is also addressed by a corporate based
control department and by the Company’s board on a regular basis.
Risks Relating to Argentina
Overview
A substantial majority of the Company’s property, operations and customers are located in Argentina, and
a portion of its assets and liabilities are denominated in foreign currencies. Accordingly, our financial
condition, results of operations and cash flows depend to a significant extent on economic and political
conditions prevailing in Argentina and on the exchange rates between the Argentine peso and foreign
currencies. In the recent past, Argentina has experienced severe recessions, political crises, periods of
high inflation and significant currency devaluation. The Argentine economy has been volatile since 2011,
with years of economic growth and others with recession. For example, Argentina’s economy grew in
2017, but contracted in 2018, 2019 and 2020. Several factors have impacted negatively the Argentine
economy in the recent past, and may continue to impact it in the future, including among others, inflation
rates, exchange rates, commodity prices, level of Argentine Central Bank (“BCRA”) reserves, public debt,
tax pressures, trade and fiscal balances, government policy, the international context and further
developments of the COVID-19 pandemic.
Devaluation of the Argentine peso and foreign exchange controls may adversely affect our results
of operations, our capital expenditures and the ability to service our liabilities and pay dividends.
Since we generate a substantial portion of our revenues in Argentine Pesos (our functional currency), any
devaluation may negatively affect the U.S. dollar value of our earnings while increasing, in Peso terms,
our expenses and capital expenditures denominated in foreign currency. The Argentine peso has been
subject to significant devaluation against the U.S. dollar in the past and may be subject to fluctuations in
the future. We cannot predict whether and to what extent the value of the peso could depreciate or
appreciate against the U.S. dollar and the way in which any such fluctuations could affect our business.
The value of the peso compared to other currencies is dependent, among other factors, on the level of
international reserves maintained by the BCRA, which have also shown significant fluctuations in recent
years. As of 28 December 2020, the international reserves of the BCRA totalled US$ 39,236 million. The
Argentine macroeconomic environment, in which we operate, was affected by the continued devaluation
of the peso, which in turn had and could continue to have a direct impact on our financial and economic
position.
The value of the peso has fluctuated significantly in the past. In 2020, the Argentine Peso continued to
depreciate against the U.S. dollar and other major foreign currencies. According to Communication “A”
3500 of the BCRA, the peso/dollar exchange rate stood at Ps. 84.15 per US$ 1.00 as of 31 December
2020, evidencing a devaluation of the peso of approximately 40.5% from its value of 59.90 Pesos per
dollar at 31 December 2019 (compared to 58.9%, 102.2% and 17.4% in the years ended 31 December
2019, 2018 and 2017, respectively). As a result of the Argentine Peso’s increased volatility, the Argentine
government and the BCRA implemented several measures to stabilise its value, including, among others,
stronger exchange regulations, an increase in short term interest rates and the sale of foreign currency
reserves made by the BCRA. The continued devaluation of the Argentine Peso during the past years has
had and continues to have a negative impact on the payment of foreign currency denominated debts by
local private sector debtors to unrelated foreign entities, and has also led to an increase in inflation, which
in turn has a direct impact on real wages. The devaluation has also negatively impacted businesses
whose success is dependent on domestic market demand, and adversely affected the Argentine
government’s ability to honour its foreign debt commitments. Any further depreciation of the Argentine
Peso or our inability to acquire foreign currency could have a material adverse effect on our financial
condition and results of operations. We cannot predict whether, and to what extent, the value of the
Argentine Peso may depreciate or appreciate against the U.S. dollar or other foreign currencies, nor the
way in which any such fluctuations could affect demand for the fixed and mobile telephony services,
Internet services and cable television services we provide. Furthermore, no assurance can be given that,
in the future, no additional currency or foreign exchange restrictions or controls will be imposed. Existing
and future 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, and which in turn could adversely affect our
business and results of operations. We cannot predict how these conditions will affect the consumption
of products and services provided by our subsidiaries or our ability to meet our liabilities denominated in
currencies other than the Argentine Peso. Any restrictions on transferring funds abroad imposed by the
government could undermine our ability to pay dividends on our GDSs or make payments (of principal or
interest) under our outstanding indebtedness in U.S. dollars, as well as to comply with any other obligation
denominated in foreign currency.
A depreciation of the Argentine Peso against major foreign currencies may also have an adverse impact
on our subsidiaries’ capital expenditure program and increase the Argentine Peso amount of their trade
liabilities and their financial debt denominated in foreign currencies. Certain of our subsidiaries seek to
manage the risk of devaluation of the Argentine Peso by entering from time to time into certain NDF
agreements in order to hedge some of their exposure to foreign currency fluctuations. However, they
remains exposed to risks associated with the fluctuation of the Argentine Peso.
In September 2019, in light of the economic instability and the significant devaluation that followed the
primary elections as described below, the Argentine government and the BCRA adopted a series of
measures reinstating foreign exchange controls, which among other things, significantly curtailed access
to the official foreign exchange market (the “FX Market”) by individuals and entities. Higher restrictions to
access the official FX markets were imposed during 2020, with a view to reducing the loss of international
reserves generated by a greater demand of US dollars by individuals and companies. Pursuant to
Communication “A” 7106 (as amended and supplemented from time to time), the BCRA established
certain requirements to access the local exchange market for purposes of repayment of cross-border
financial debts, in particular, for the payment of principal outstanding amounts in loans and securities
having amortisation payments scheduled between 15 October 2020 and 31 December 2021 for principal
amounts exceeding US$2,000,000 by the non-financial private sector and financial entities. Particularly,
the payment of principal amounts pertaining to loans and securities subject to the regulation should be
part of a refinancing plan that must be previously filed with the BCRA, which must provide that (i) only
40% of the principal amount owed and payable shall be paid through the local foreign exchange market
on or prior to 31 March 2021; and (ii) the remaining 60% must be refinanced so the average life of the
debt is increased for a minimum of two years. It is not possible to guarantee that the period covered by
Communication “A” 7106 will not be extended or reinstated in the future by the BCRA or that other
regulations with similar effects will be issued that would require our subsidiaries to refinance their
obligations, which in turn could have a negative impact on such subsidiaries, and in particular, on their
ability to meet debt obligations.
Economic and political developments in Argentina, and future policies of the Argentine
government may affect the economy as well as the operations of the media industry.
The Argentine government has historically exercised significant influence over the economy, and
telecommunications companies in particular have operated in a highly regulated environment. The
Argentine government may promulgate numerous, far-reaching regulations affecting the economy and
media companies in particular.
In October 2019, Alberto Fernández was elected president of Argentina and took office on 10 December
2019. Fernández announced and implemented a wide range of economic and policy reforms. In March
2020, in response to the COVID-19 outbreak, the Argentine government enforced the ASPO (Preventive
and Mandatory Social Isolation), which caused significant disruption to social, operative, economic and
market activities. In August 2020, Decree No. 690/20 declared Information and Communications
Technology (“ICT”) services as an essential public service and imposed tariff regulations. Subsequent
implementing regulations issued by ENACOM introduced the possibility of involvement by that agency in
the price negotiations between content and signal providers, such as our subsidiary ARTEAR, and
subscription broadcasting service providers.
On 13 March 2020, the Minister of Economy addressed a letter to the Paris Club members expressing
Argentina’s decision to postpone until 5 May 2021 the US$2.1 billion payment originally due on 5 May
2020, in accordance with the terms of the settlement agreement the Republic had reached with the Paris
Club members on 29 May 2014 (the “Paris Club 2014 Settlement Agreement”). In addition, on 7 April
2020, the Minister of Economy sent the Paris Club members a proposal to modify the existing terms of
the Paris Club 2014 Settlement Agreement, seeking mainly an extension of the maturity dates and a
significant reduction in the interest rate.
On 18 August 2020, Argentina offered holders of its foreign currency bonds governed by Argentine law
to exchange such bonds for new bonds, on terms that were equitable to the terms of the invitation made
to holders of foreign law-governed bonds. On 18 September 2020, Argentina announced that holders
representing 99.4% of the aggregate principal amount outstanding of all series of eligible bonds invited to
participate in the local exchange offer had participated. As a result of the exchange offer, the average
interest rate paid by Argentina’s foreign currency bonds governed by Argentine law was lowered to 2.4%,
compared to an average interest rate of 7.6% prior to the exchange. In addition, the exchange offer
extended the average maturity of such bonds.
During the nine-month period ended 30 September 2020, Argentina sought to preserve the normal
functioning of the local capital market for debt denominated in Pesos, which it considers a key factor for
the development of the domestic capital market. In particular, during this period, the Argentine government
sought to recover the Treasury’s financing capacity, create conditions for the development of the domestic
capital markets and generate savings instruments with positive and sustainable real rates, in turn reducing
its monetary financing needs and expanding the depth of the local debt market and the participation of
relevant institutional investors. In addition, the Treasury expanded its menu of financing instruments to
obtain the funds needed to cover its 2020 financial needs and to design the 2021 financial program
according to the guidelines outlined in the 2021 budget.
As of the date of the Company’s Annual Report, the Argentine government has initiated negotiations with
the International Monetary Fund (“IMF”) in order to renegotiate the principal maturities of the US$ 44.1
billion disbursed between 2018 and 2019 under a Stand By Agreement (“SBA”), originally planned for the
years 2021, 2022 and 2023. We cannot assure whether the Argentine government will be successful in
the negotiations with that agency, which could affect its ability to implement reforms and public policies
and boost economic growth, nor the impact of the result that renegotiation will have in Argentina’s ability
to access international capital markets (and indirectly in our ability to access those markets). Moreover,
the long-term impact of these measures and any future measures taken by the Argentine government on
the Argentine economy as a whole remains uncertain. It is possible that such reforms could be disruptive
to the economy and adversely affect the Argentine economy and, consequently, our business, results of
operations and financial condition. We are also unable to predict the measures that the Argentine
government may adopt in the future, and how they will impact on the Argentine economy and our results
of operations and financial condition.
In the event of any economic, social or political crisis, companies operating in Argentina may face the risk
of strikes, expropriation, nationalisation, mandatory amendment of existing contracts, and changes in
taxation policies including tax increases and retroactive tax claims. In addition, Argentine courts have
sanctioned modifications on rules related to labour matters, requiring companies to assume greater
responsibility for the assumption of costs and risks associated with sub-contracted labour and the
calculation of salaries, severance payments and social security contributions. Since we operate in a
context in which the governing law and applicable regulations change frequently, also as a result of
changes in government administrations, it is difficult to predict if and how our activities will be affected by
such changes.
We cannot assure you that future economic, regulatory, social and political developments in Argentina
will not adversely affect our business, financial condition or results of operations, or cause the decrease
of the market value of our securities.
Inflation could accelerate, causing adverse effects on the economy and negatively impacting our
subsidiaries’ margins and/or ratios.
Argentina has experienced repeatedly, including in recent years, periods of high inflation. Inflation has
increased since 2005 and has remained relatively high since then. There can be no assurance that
inflation rates will not be higher in the future. Furthermore, the National Institute of Statistics and Census
(“INDEC”) experienced in the past periods of political interventionism that raised serious concerns about
the reliability of the data published by that agency. Future political intervention in the INDEC could
jeopardise the agency’s autonomy and therefore affect the reliability of the statistics it publishes.
The National Consumer Price Index (“CPI”) variation was of 36.1% in 2020 and 53.8% in 2019. Efforts
made by the Argentine government to contain and reduce inflation have not achieved the desired results
and inflation remains a significant problem for the Argentine economy. If the value of the Argentine Peso
cannot be stabilised through fiscal and monetary policies, an increase in inflation rates could be expected.
Because the majority of our revenues are denominated in Pesos, any further increase in the rate of
inflation not accompanied by a parallel increase in our subsidiaries’ prices would decrease our revenues
in real terms and adversely affect our results of operations. Further, higher inflation rates generally lead
to a reduction in the purchasing power, thus increasing the likelihood of a lower level of demand for our
subsidiaries’ products and services in Argentina.
The Argentine government may exercise greater intervention in private sector companies.
In November 2008, Argentina nationalised its private pension and retirement system, which had been
previously administered by private pension funds (the “AFJPs”) and appointed the National Social Security
Administration (“ANSES”) as its administrator. Argentina’s nationalisation of its pension and retirement
system constituted a significant change in the Argentine government’s approach towards Argentina’s
main publicly traded companies. A significant portion of the public float of certain Argentine publicly traded
companies is currently owned by the Argentine government through ANSES-FGS, including Grupo Clarín.
The Argentine government exercised in the past, and may exercise in the future, influence over corporate
governance decisions of companies in which it owns shares by combining its ability to exercise its
shareholder voting rights to designate board and supervisory committee members with its ability to dictate
tax and regulatory matters. Additionally, since the AFJPs were significant institutional investors and active
market traders in Argentina, the nationalisation of the private pension and retirement system affected the
access to financing in capital markets for publicly traded companies as well as the liquidity of their
securities within the market.
On 9 June 2020, the Argentine government declared a 60-day intervention on Vicentín S.A.I.C.
(“Vicentín”), an agro-industrial company based in the Province of Santa Fe. The decision to intervene,
with a view to ensuring continuity in the company’s operations and job preservation, came after Vicentín
filed for a reorganisation proceeding on 10 February 2020, as a result of its inability to pay obligations
amounting to Ps. 99.3 billion. In addition, the Argentine government intended to submit a bill to Congress
that would declare Vicentín a company of public interest, and therefore would enable its expropriation.
We cannot predict whether the Argentine government or future administrations will take similar or further
measures, including nationalisation, expropriation and/or increased Argentine governmental intervention
in companies. Government intervention in the industries in which we operate could create uncertainties
for investors in public companies in Argentina, including Grupo Clarín, as well as have a material adverse
effect on our business, financial condition and results of operations.
Argentina’s economy contracted in 2019 and 2018 and may contract in the future due to
international and domestic conditions, which may adversely affect our operations.
The Argentine economy has experienced significant volatility in the past few years and recent decades,
characterised by periods of low or negative GDP growth, high and variable levels of inflation and currency
devaluation. Argentina’s economy contracted during 2020, 2019 and 2018 and the country’s economy
remains unstable notwithstanding the efforts by the Argentine government to address inflation and the
constraints on the country’s foreign exchange reserves and related pressure on the value of the peso.
Substantially all of our subsidiaries’ operations, properties and customers are located in Argentina, and,
as a result, our business is, to a large extent, dependent upon economic and legal conditions prevailing
in Argentina. If economic conditions in Argentina were to further deteriorate, they could have an adverse
effect on our results of operations, financial condition and cash flows.
Global economic and financial crises, and the general weakness of the global economy due to the COVID-
19 pandemic negatively affected emerging economies like Argentina’s economy. Global financial
instability, any further economic global downturn due to COVID-19 and any future increases in the interest
of the United States and other developed countries may impact the Argentine economy and prevent
Argentina to be put back on track to growth or could aggravate the current recession with consequences
in the trade and fiscal balances and in the unemployment rate.
Moreover, Argentina’s economic growth was severely impacted as a consequence of the COVID-19
pandemic. It might also be negatively affected in the future by several domestic factors such as an
appreciation of the real exchange rate which could affect its competitiveness, reductions and even
reversion of a positive trade balance, which, combined with capital outflows could reduce the levels of
consumption and investment resulting in greater exchange rate pressure. Additionally, abrupt changes in
monetary and fiscal policies or foreign exchange regime could rapidly affect local economic output, while
lack of appropriate levels of investment in certain economy sectors could reduce long-term growth. Access
to the international financial markets could be limited. Consequently, an increase in public spending not
correlated with an increase in public revenues could affect Argentina’s fiscal results and generate
uncertainties that might affect the economy’s growth level.
In addition to the severe social and market disruption at a global scale during 2020 caused by the COVID
19 outbreak, in recent years, several trading partners of Argentina (such as Brazil, Europe and China)
have experienced significant slowdowns or recession periods in their economies. These slowdowns
intensified during 2020. If such slowdowns or recessions were to recur, this may impact the demand for
products coming from Argentina and hence affect its economy. Additionally, there is uncertainty as to how
the trade relationship between the Mercosur member States will unfold, in particular between Argentina
and Brazil. We cannot predict the effect on the Argentine economy and our operations if trade disputes
arise between Argentina and Brazil, or in case either country decided to exit the Mercosur.
Furthermore, the global macroeconomic environment is facing challenges. There is considerable
uncertainty over the long-term effects of the expansionary monetary and fiscal policies adopted by the
central banks and financial authorities of some of the world’s leading economies, including the United
States and China. There have been concerns over unrest and terrorist threats in the Middle East, Europe
and Africa and over the conflicts involving Iran, Ukraine, Syria and North Korea. Moreover, political and
social crises arose in several countries of Latin America during 2019, as the economy in much of the
region has slowed down after almost a decade of sustained growth, among other factors. There have also
been concerns on the relationship among China and other Asian countries, which may result in or intensify
potential conflicts in relation to territorial disputes, and the possibility of a trade war between the United
States and China. In addition, United Kingdom exited the European Union (“Brexit”) on 31 January 2020.
The medium and long-term implications of Brexit could adversely affect European and worldwide
economic and market conditions and could contribute to instability in global financial and foreign exchange
markets.
During 2020, the Argentine economy was adversely affected by some of aforementioned factors. If
international and domestic conditions for Argentina were to worsen, the Argentine economy could be
negatively affected as a result of lower international demand and lower prices for its products and
services, higher international interest rates, lower capital inflows and higher risk aversion, which may also
adversely affect our business, results of operations, financial condition and cash flows.
The coronavirus and the measures taken or to be implemented by the Argentine government in
response to the coronavirus have had and could continue to have a significant adverse effect on
our business operations
In late December 2019, COVID-19, originating from Wuhan, Hubei province, was reported to the World
Health Organisation, with cases soon confirmed in multiple provinces in China, as well as in other
countries. On 11 March 2020, the World Health Organisation categorised COVID-19 as a pandemic.
Several measures have been undertaken by the Argentine Government and other governments around
the globe, including the use of quarantine, screenings at airports and other transports hub, travel
restrictions, suspension of visas, nation-wide lockdowns, closing of public and private institutions,
suspension of sport events, restrictions to museums and tourist attractions and extension of holidays,
among many others. However, the virus continues to spread globally and, as of the date of this Annual
Report, has affected most countries and territories around the world, including Argentina. To date, the
outbreak of COVID-19 has caused significant social, operational, economic and market disruption. The
long-term impact on the global economy and financial markets is still uncertain, but is expected to be
significant.
Since 20 March 2020 the Argentine government imposed a series of measures aimed at reducing the
movement of the population, ordering the ASPO, which only allowed the movement of individuals involved
in activities considered essential by the Argentine government. While the Argentine government has
determined that media services constitute essential services, our subsidiaries’ operations were affected
by a decline in the sale of advertising in all the media of Grupo Clarín, mainly due to cuts in our customers’
advertising budgets, a drop in circulation, with an impact on subscriptions as from the second quarter of
the year and an increase in the overdue collection of receivables. Television audience levels were affected
by the lack of production of certain contents for prime time, which were suspended due to the pandemic.
Our subsidiaries Autosports, Pol-ka and Cúspide were forced to reduce or suspend most of their
operations and the commercialization of their products. In the case of Pol-ka, the economic impact was
very significant. During 2020, that company was unable to produce any new content and underwent
severe difficulties in meeting its financial, commercial and labour commitments.
Our subsidiaries have had, and continue to have to resolve new and challenging logistical issued relating
to the commute of employees, performers and journalists, the reconfiguration of some programs due to
social distancing measures, the implementation of home office mainly for our back office staff, strict
sanitation, disinfection and prevention protocols at the various offices and the incorporation of
technologies required to ensure the virtual presence of talents in the production of contents.
The long-term effects of the pandemic on the global economy and the Company are difficult to assess or
predict. Although the Company has devoted considerable resources to preventative measures in order
to reduce the potential impacts of the COVID-19 pandemic on its employees, business, service and
operations, there can be no assurance that these measures will be effective or that the pandemic will not
have an adverse effect on our business, financial situation and results of operations, which could result
in further decline in the market prices of our Class B Shares and GDSs.
Uncertain evolution of the COVID-19 pandemic might affect employees’ health and safety, generate risks
for the deployment of our subsidiaries’ services and distribution of their products, result in reduced sales
of advertising in general and reduced sales of products in certain geographic locations, affect our
revenues and result in a general economic contraction in Argentina, which could in turn have an additional
adverse effect on the demand of our subsidiaries’ products and consequently in the results of our
operations.
Any prolonged restrictive measures put in place in order to control a new outbreak of contagious disease
or other adverse public health development in any of our targeted markets may have a material and
adverse effect on our business operations. We may also be affected by a decline in the demand of our
subsidiaries’ service, especially advertising, as a result of the economic contraction. It is unclear whether
these challenges and uncertainties will be contained or resolved, and what effects they may have on the
global political and economic conditions in the long term. Additionally, we cannot predict how the disease
will evolve (and potentially, spread) in Argentina during 2021 due to new outbreaks and new strains of the
virus that have appeared practically simultaneously with the advance of the vaccination campaign, nor
anticipate what additional restrictions governments of other countries may impose. To the extent COVID-
19 adversely affects our business and financial results, it may also exacerbate many of the other risks
described in this “Risk Factors” section.
Notwithstanding the foregoing, the outbreak of any novel strain of coronavirus and its impact on the
demand of our subsidiaries’ products and the financial markets, among other factors, will be key issues
to determine the duration and depth of the economic crisis in Argentina and worldwide, as well as on our
strategy, financial situation and results of our operations.
Argentina’s ability to obtain financing from international markets is limited, which could affect its
capacity to implement reforms and sustain economic growth.
After Argentina’s default on certain debt payments in 2001, the government successfully restructured 92%
of the debt through two debt exchange offers in 2005 and 2010. Nevertheless, holdout creditors filed
numerous lawsuits against Argentina in several jurisdictions, including the United States, Italy, Germany
and Japan, asserting that Argentina failed to make timely payments of interest and/or principal on their
bonds, and seeking judgments for the face value of and/or accrued interest on those bonds. Judgments
were issued in numerous proceedings in the United States, Germany and Japan. Although creditors with
favourable judgments did not succeed, with a few minor exceptions, in enforcing on those judgments, as
a result of decisions adopted by the New York courts in support of those creditors in 2014, Argentina was
enjoined from making payments on its bonds issued in the 2005 and 2010 exchange offers unless it
satisfied amounts due to the holders of defaulted bonds. The Argentine government took a number of
steps intended to continue servicing the bonds issued in the 2005 and 2010 exchange offers, which had
limited success. Holdout creditors continued to litigate and succeeded in preventing the Argentine
government from regaining market access.
Between February and April 2016, the Argentine government entered into agreements in principle with
certain holders of defaulted debt and put forward a proposal to other holders of defaulted debt, including
those with pending claims in U.S. courts, which resulted in the settlement of substantially all remaining
disputes and closure to 15 years of litigation. On 22 April 2016, Argentina issued bonds for US$16.5
billion, and applied US$9.3 billion of the proceeds to satisfy payments under the settlement agreements
reached with holders of defaulted debt. Since then, substantially all of the remaining claims under
defaulted bonds have been settled.
As of the date of the Company’s Annual Report, although litigation initiated by bondholders that have not
accepted Argentina’s settlement offer continues in several jurisdictions, the size of the claims involved
has decreased significantly.
In addition, since 2001 foreign shareholders of some Argentine companies initiated claims for substantial
amounts before the International Centre for Settlement of Investment Disputes (“ICSID”) against
Argentina, pursuant to the arbitration rules of the United Nations Commission on International Trade Law.
Claimants allege that certain measures of the Argentine government issued during the economic crisis of
2001 and 2002 were inconsistent with the norms or standards set forth in several bilateral investment
treaties by which Argentina was bound at the time. To date, several of these disputes have been settled,
and a significant number of cases are in process or have been temporarily suspended by the agreement
of the parties.
Between 2016 and early 2018, Argentina regained access to the market and incurred in additional debt.
However, as a result of various external and domestic factors, during the first half of 2018, access to the
market became increasingly onerous. On 8 May 2018, the Macri administration announced that the
Argentine government would initiate negotiations with the IMF with a view to entering into a stand-by
credit facility that would give Argentina access to financing by the IMF. On 7 June 2018, the Argentine
government and the IMF staff reached an understanding on the terms of the SBA for disbursements
totalling approximately US$50 billion, which was approved by the IMF’s Executive Board on 20 June 2018.
The SBA was intended to provide support to the Macri administration’s economic program, helping build
confidence, reduce uncertainties and strengthen Argentina’s economic prospects. On 22 June 2018 the
Argentine government made a first drawing of approximately US$15 billion under the SBA. Argentina has
received disbursements under the SBA for US$44 billion. Notwithstanding the foregoing, the Argentine
government has publicly announced that they will refrain from requesting additional disbursements under
the agreement, and instead vowed to renegotiate its terms and conditions in good faith.
Following the execution of the SBA, in August 2018, Argentina faced an unexpected bout of volatility
affecting emerging markets generally. In September 2018, the Macri administration discussed with the
IMF staff further measures of support in the face of renewed financial volatility and a challenging economic
environment. On 26 October 2018, in light of the adjustments to fiscal and monetary policies announced
by the Argentine government and the BCRA, the IMF’s Executive Board allowed the Argentine
government to draw the equivalent of US$5.7 billion, bringing total disbursements since June 2018 to
approximately US$20.6 billion, approved an augmentation of the SBA increasing total assets to
approximately US$57.1 billion for the duration of the program through 2021 and the front loading of the
disbursements. Under the revised SBA, IMF resources for Argentina in 2018-19 increased by US$18.9
billion. IMF disbursements for the remainder of 2018 more than doubled compared to the original IMF-
supported program, to a total of US$13.4 billion (in addition to the US$15 billion disbursed in June 2018).
Disbursements in 2019 were also nearly doubled, to US$22.8 billion, with US$5.9 billion planned for 2020-
2021.
On 28 August 2019, the Macri administration issued a decree deferring the scheduled payment date for
85% of the amounts due on short-term notes maturing in the fourth quarter of 2019, governed by Argentine
law and held by institutional investors. Of the deferred amounts, 30% would be repaid 90 days after the
original payment date and the remaining 70% would be repaid 180 days after the original payment date,
except for payments under Lecaps due 2020 held domestically, which would be repaid entirely 90 days
after the original payment date. Amounts due on short-term notes held by individual investors would be
paid as originally scheduled.
Moreover, in December 2019, the Argentine government further extended by decree payments of a series
of short-term Argentine-law governed treasury notes denominated in U.S. dollars held by institutional
investors through August 2020. Additionally, on 11 February 2020, the Argentine government decreed
the extension of maturity to 30 September 2020 of a dollar-linked treasury note governed by Argentine
law, which had been originally subscribed to a large extent with U.S. dollar remittances, to avoid a
payment with Argentine pesos that would have required significant sterilisation efforts by the monetary
authority.
On 12 February 2020, the Argentine Congress enacted Law No. 27,544 for the Sustainable Restoration
of Foreign-Law Governed Public Debt, which granted the Ministry of Economy the power to restructure
the Argentine government’s external public debt. On 9 March 2020, the Executive Branch issued decree
No. 250/20 authorizing the Ministry of Economy to restructure US$68,842 million in debt.
Following Law No. 27,544, on 10 March 2020, Decree No. 250/20 issued by the Argentine government
established the maximum nominal amount of liability management transactions and/or exchanges and/or
restructurings of the Republic of Argentina’s outstanding public securities issued under foreign law as of
12 February 2020 at the nominal value of US$68,842,528,826, or its equivalent in other currencies.
However, due to the COVID-19 pandemic, the timeline initially published by the Ministry of Economy for
the restructuring of the public external debt that provided, among other steps, the launch of an exchange
offer of such public securities issued under foreign law, was postponed.
On 21 April 2020, Argentina invited holders of approximately US$ 66.5 billion aggregate principal amount
of its foreign currency external bonds to exchange such bonds for new bonds. The invitation contemplated
the use of collective action clauses included in the terms and conditions of such bonds, whereby the
decision by certain majorities would bind holders that did not tender into the exchange offer. On 31 August
2020 the Argentine government announced that it had obtained bondholder consents required to
exchange and or modify 99.01% of the aggregate principal amount outstanding of all series of eligible
bonds invited to participate in the exchange offer. The restructuring settled on 4 September 2020. As a
result of the invitation, the average interest rate paid by Argentina’s foreign currency external bonds was
lowered to 3.07%, with a maximum rate of 5.0%, compared to an average interest rate of 7.0% and
maximum rate of 8.28% prior to the invitation. In addition, the aggregate amount outstanding of
Argentina’s foreign currency external bonds was reduced by 1.9% and the average maturity of such bonds
was extended.
On 5 April 2020, the Argentine government enacted Decree No. 346/20 (i) deferring the payments of
principal and interest on certain of its foreign currency bonds governed by Argentine law until 31
December 2020, or until such earlier date as the Ministry of Economy may determine, considering the
progress made in the process designed to restore the sustainability of Argentina’s public debt, and (ii)
authorizing the Ministry of Economy to conduct liability management transactions or exchange offers, or
to implement restructuring measures affecting foreign currency bonds governed by Argentine law which
payments had been deferred pursuant to such Decree.
On 18 August 2020, Argentina offered holders of its foreign currency bonds governed by Argentine law
to exchange such bonds for new bonds, on terms that were equitable to the terms of the invitation made
to holders of foreign law-governed bonds. On 18 September 2020, Argentina announced that holders
representing 99.4% of the aggregate principal amount outstanding of all series of eligible bonds invited to
participate in the local exchange offer had participated. As a result of the exchange offer, the average
interest rate paid by Argentina’s foreign currency bonds governed by Argentine law was lowered to 2.4%,
compared to an average interest rate of 7.6% prior to the exchange. In addition, the exchange offer
extended the average maturity of such bonds.
As of the date of the Company’s Annual Report, the Argentine government has initiated negotiations with
the IMF in order to renegotiate the principal maturities of the US$ 44.1 billion disbursed between 2018
and 2019 under the SBA, originally planned for the years 2021, 2022 and 2023. We cannot assure
whether the Argentine government will be successful in the negotiations with that agency, which could
affect its ability to implement reforms and public policies and boost economic growth, nor the impact of
the result that renegotiation will have in Argentina's ability to access international capital markets (and
indirectly in our ability to access those markets), in the Argentine economy or in our economic and financial
situation or in our capacity to extend the maturity dates of our debt or other conditions that could affect
our results and operations or businesses. Lack of access to international or domestic financial markets
could affect the projected capital expenditures for our subsidiaries’ operations in Argentina, which, in turn,
may have an adverse effect on our financial condition or the results of our operations.
Without renewed access to the financial market the Argentine government may not have the financial
resources to implement reforms and boost growth, which could have a significant adverse effect on the
country’s economy and, consequently, on our activities. Likewise, Argentina’s inability to obtain credit in
international markets could have a direct impact on our ability to access those markets to finance our
operations and our growth, including the financing of capital investments, which would negatively affect
our financial condition, results of operations and cash flows. In addition, we cannot predict the outcome
of any future restructuring of Argentine sovereign debt. Grupo Clarín has investments in Argentine
sovereign bonds amounting to $ 451 million as of 31 December 2020. Any new event of default by the
Argentine government could negatively affect their valuation and repayment terms, as well as have a
material adverse effect on the Argentine economy and, consequently, our business and results of
operations.
The Argentine banking system may be subject to instability, which may affect our operations.
In recent years, the Argentine financial system grew significantly with a marked increase in loans and
private deposits, showing a recovery of credit activity. Such recovery has been severely impacted by the
COVID-19 pandemic. In spite of the fact that the financial system’s deposits continue to grow in nominal
terms, they are mostly short-term deposits and the sources of medium and long-term funding for financial
institutions are currently limited. In 2020, nominal private deposits in Pesos increased 84.6% year-over-
year (fuelled by the growth of savings and current accounts with a 91.5% increase) and nominal time
deposits increased 81.0% year-over-year. During the same period, loans in foreign currency (composed
mainly of corporate loans) evidenced a decrease of 4.9% at the end of 2020. In 2020, private deposits in
U.S. dollars declined by 18.0%.
Financial institutions are particularly subject to significant regulation from multiple regulatory authorities,
all of which may, among other things, establish limits on commissions and impose sanctions on the
financial institutions. The lack of a stable regulatory framework, or changes to such regulatory framework
by the government, could impose significant limitations on the activities of the financial institutions and
could induce uncertainty with respect to the financial system stability.
The persistence of the current economic crisis or the instability of one or more of the larger banks, public
or private, could have a material adverse effect on the prospects for economic growth and political stability
in Argentina, resulting in a loss of consumer confidence, lower disposable income and fewer financing
alternatives for consumers. These conditions would have a material adverse effect on us by resulting in
lower demand for our subsidiaries’ products and services and the possibility of a higher level of
uncollectible accounts or increase the credit risk of the counterparties regarding our subsidiaries’
investments in local financial institutions.
Exchange controls and restrictions on transfers abroad and capital inflows limit the availability of
international credit.
We are subject to Argentine and international anti-corruption, anti-bribery and anti-money
laundering laws. Our failure to comply with these laws could result in penalties, which could harm
our reputation and have an adverse effect on our business, financial condition and results of
operations.
The United States Foreign Corrupt Practices Act of 1977, the Organisation for Economic Co-Operation
and Development Anti-Bribery Convention, the Argentine Anti-Money Laundering Law (Ley de Prevención
del Lavado de Activos), the Argentine Corporate Criminal Liability Law (Ley de Responsabilidad Penal
Empresaria) and other applicable anti-corruption laws prohibit companies and their intermediaries from
offering or making improper payments (or giving anything of value) to government officials and/or persons
in the private sector for the purpose of influencing them or obtaining or retaining business and require
companies to keep accurate books and records and maintain appropriate internal controls. In particular,
the Argentine Corporate Criminal Liability Law provides for the criminal liability of corporate entities for
criminal offences against public administration and transnational bribery committed by, among others, its
attorneys-in-fact, directors, managers, employees or representatives. A company may be held liable and
subject to fines and/or suspension of its activities if such offences were committed, directly or indirectly,
in its name, behalf or interest, the company obtained or may have obtained a benefit therefrom, and the
offence resulted from a company’s ineffective control.
It may be possible that, in the future, there may emerge in the press allegations of instances of
misbehaviour on the part of former agents, current or former employees or others acting on our behalf or
on the part of public officials or other third parties doing or considering business with us. We will endeavour
to monitor such press reports and investigate matters that we believe warrant an investigation in keeping
with the requirements of compliance programs, and, if necessary, make disclosure and notify the relevant
authorities. However, any adverse publicity that such allegations attract may have a negative impact on
our reputation and lead to increased regulatory scrutiny of our business practices.
If we or individuals or entities that are or were related to us are found to be liable for violations of applicable
anti-corruption laws (either due to our own acts or our inadvertence, or due to the acts or inadvertence of
others), we or other individuals or entities could face civil and criminal penalties or other sanctions, which
in turn could have a material adverse impact on our reputation, business, financial condition and results
of operations.
Risks Relating to the Company and its Operations
Our subsidiaries or their counterparties may become subject to burdensome regulations,
ordinances and laws affecting certain of their products or services, which could adversely affect
their operations
We sell programming content to broadcast and subscription television providers, which in Argentina are
subject to regulations governing Information and Communications Technology (“ICT”) services. Until
August 2020, the Digital Argentina Law (“LAD”) established that licensees of ICT services may freely set
their prices, which shall be fair and reasonable, to offset the costs of exploitation and to tend to the efficient
supply and reasonable margin of operations.
However, on 22 August 2020, the Argentine Executive Branch issued Decree No. 690/20 amending the
LAD. Decree No. 690/20 declared ICT services (which include cable and satellite television providers) as
well as access to telecommunications networks for and between licensees as “Essential and Strategic
Competition Public Services”, and empowered ENACOM to ensure accessibility. Decree No. 690/20
further established that (i) the prices of the Essential and Strategic Competition Public ICT Services, (ii)
the prices of those services provided in accordance with the Universal Service, and (iii) the prices of those
services determined by ENACOM for public interest reasons, shall be regulated by ENACOM. Moreover,
Decree No. 690/20 established that ENACOM is the agency responsible for the enactment of any
regulation related to the ICT’s Basic Universal Services (“PBUs,” for its Spanish acronym), and also
suspended any price increases or changes set or announced by the ICT’s licensees from 31 July 2020 to
31 December 2020. Decree No. 690/20 has been ratified by the Argentine Congress under Law No.
26,122 and has been regulated through ENACOM Resolutions Nos. 1,466/20 and 1,467/20.
Resolution No. 1,466/20, among other things, allows ICT licensees providing, among other services,
subscription broadcasting services through physical, radio-electric or satellite link, to increase retail prices
for services up to 5% during January 2021. In order to establish the percentages approved, licensees
must consider the prices effective as of 31 July 2020 as the price of reference. Such Resolution also
provides that ICT Services Licensees may request a higher increase, on an exceptional basis in
accordance with the provisions of Section 48 of the LAD.
Said Resolution also provides that ICT licensees that hold registrations for Internet Access Value Added
Service, subscription broadcasting services by physical and/or radio-electric link and audiovisual
communication subscription services by satellite link, shall notify the enforcement authority about any and
all changes in retail prices they intend to make to their plans, prices and commercial terms in effect, SIXTY
(60) calendar days in advance of their implementation.
Resolution No. 1467/2020 regulates the Mandatory Universal Basic Service set forth by Decree No.
690/2020 for the different services provided by ICT service licensees, establishing the price and
characteristics of each plan. Said Resolution also sets out the persons that are eligible to receive those
services. Subscription television service licensees are under the obligation to apply discounts to a plan
and programming grid that already exist, which prevents them from creating a specific and less expensive
grid to comply with the Mandatory Universal Basic Service.
ENACOM Resolution No. 1,491/2020 issued on December 24, 2020 approved the new General Rules
Governing Physical Radio-Electric and/or Satellite Link Subscription Broadcasting Services. Even though
the new General Rules maintain the onerosity of all the broadcast television services and signals that fall
within the scope of the “must carry” regime (signals and services subject to mandatory retransmission) by
the providers of subscription television services, they introduce the concept of “fair, equitable and
reasonable price” and implement a dispute resolution procedure in case of disagreement between signal
holders and distributors (by physical, radio-electric or satellite link) to be brought before the ENACOM,
whereby the parties are deemed to have voluntarily accepted to be subject to this procedure.
In addition, the General Rules provide that in the event that signal holders and physical, radio-electric
and/or satellite link subscription television licensees do not settle their dispute, distributors shall include
the signal in the programming grid at the price set by ENACOM’s Board based on the information gathered
during the proceeding. The price and the settlement procedure is applicable to any signal, including those
which are not subject to mandatory retransmission.
In addition, the General Rules also provide that the commercialization of one signal may not be conditional
on the acquisition of other signals and, in the case of sales of signal packages, the price must include a
breakdown of each of the signals included in the package.
Our legal advisors believe that the ENACOM is not empowered to set the price of a signal and that it
would be arbitrary and unconstitutional if the agency imposed a price on the owner of contents that does
not voluntarily agree to the settlement proceeding.
However, if ENACOM’s position prevails, the operations and economic and financial condition of our
subsidiary ARTEAR, which owns several cable television signals and is therefore a provider of contents
to subscription television services via physical, radio-electric or satellite link, may be adversely affected.
ARTEAR, with the assistance of its legal advisors, is analysing the actions that may be necessary in order
to protect its rights.
We operate in a competitive environment that may result in a reduction in our market share in the
future.
The Company devotes significant resources 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.
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.
Future technological developments may result in decreased customer demand for certain of our products
or services, in particular print media, or even render them obsolete. In addition, as new technologies
develop, equipment may need to be replaced or upgraded, at substantial cost, to remain competitive.
These enhancements and the implementation of new technologies will continue requiring increased
capital expenditures. The macroeconomic situation in Argentina may adversely affect our ability to
successfully invest in, and implement, new technologies, coverage and services in a timely fashion.
Accordingly, we cannot assure you that we will have the ability to make needed capital expenditures and
operating expenses. If we are unable to make these capital expenditures, or if our competitors are able
to invest in their businesses to a greater degree and/or faster than we are, our competitive position will
be adversely impacted.
Moreover, the products and services that we offer may fail to generate revenues or attract and retain
customers. If our competitors present similar or better products and services, our revenues may be
materially affected. Competitiveness is and will continue to be affected by our competitors’ business
strategies and alliances. We may face additional pressure on the prices that we charge for our products
and services or experience a loss of market share. In addition, the general business and economic climate
in Argentina may affect us and our competitors differently; thus our ability to compete in the market could
be adversely affected. Even though the Company grew and developed in recent years in a highly
competitive market, because of the range of business and economic uncertainties we face, it is difficult
for us to predict with precision and accuracy our future market share in relevant geographic areas and
customer segments, the possible drop in our customer’s consumption that could result in a reduction of
our revenue market share, the speed with which such change in our market share or prevailing prices for
services may occur or the effects of competition. Those effects could be material and adverse to our
overall financial condition, results of operations and cash flows.
Our revenues are cyclical and depend upon the condition of the Argentine economy.
Revenues generated by our subsidiaries have proven cyclical and depend on general economic
conditions. In the past, a general economic downturn in Argentina has had, and would be expected to
have in the future, a negative effect on our revenues and a material adverse effect on the results of our
operations. Historically, for example, increases in losses of advertisers have corresponded with general
economic downturns and regional and local economic recessions. Most of our revenues are denominated
in Argentine pesos, exposing us to risks related with fluctuations in the value of the Argentine peso.
Our operations and financial condition could be affected by future union negotiations, Argentine
labour regulations and governmental measures requiring private companies to increase salaries
or otherwise provide workers with additional benefits.
In Argentina, labour organisations have substantial support and considerable political influence. In recent
years, the demands of labour organisations engaged with our subsidiaries have increased mainly as a
result of the increase in the cost of living, which was affected by increased inflation, higher tax pressure
over salaries and the consequent decline in the population’s purchasing power.
If we are unable to reach agreements with the unions on work conditions, or in case of a lack of recognition
among union associations, we may be adversely affected by individual labour claims, class actions, higher
union contributions expenses, union conflicts, direct action measures and general impacts to our
operations that may also affect the quality of our products and services and our reputation.
The Argentine government has enacted laws and regulations requiring private sector companies to
maintain certain salary levels and provide their employees with additional benefits. On 13 December 2019,
the Argentine government declared a labour emergency for a 180-day term. In this context, the Argentine
government doubled the amount of the statutory severance payments payable to employees hired before
13 December 2019 and dismissed between 13 December 2019 and 13 June 2020. The layoff prohibition
was extended pursuant to Decree No. 528/20 and Decree No. 961/20. Decree No. 39/21, currently in
effect until 27 April 2021, extended the prohibition of dismissals without just cause or based on lack or
reduction of work and force majeure, as well as the prohibitions to suspensions for economic reasons,
except for suspensions made under the terms of Section 223 bis of the Labour Contract Law (agreements
between employers and employees later approved by the Ministry of Labour, made either individually or
collectively with the purpose of suspending employment for lack or reduction of work due to no fault from
the employer), which are not affected by the prohibition.
Likewise, Decree No. 39/21 extended the occupational emergency until 31 December 2021 in cases of
dismissals without just cause, and granted the right of the affected worker to receive a double severance
payment, with a cap of P$500,000 in excess of what would have been the regular single severance
payment.
Under the provisions of Section 5 of Decrees No. 624/20, 761/20 and 891/20, contracts entered into after
the entry into force of Decree No. 34/19, are not affected by the aforementioned provisions.
The Argentine government may adopt new measures that determine salary increases or additional
benefits for workers, and workers and their unions may pressure employers to comply with such
measures. Any salary increase or additional benefit could result in an increase in costs and a decrease
in the results of the operations of Argentine companies, including those of our subsidiaries. Further, future
extensions of the prohibition of layoffs and dismissals due to force majeure or lack of or decreased work
or the duplication of the statutory severance payments to dismissed employees may affect the efficiency
of our subsidiaries’ employees and therefore the costs and results of their operations.
The enforcement of the Law for the Promotion of Registered Labor and Prevention of Labor Fraud
may have a material adverse effect on us.
The Law for the Promotion of Registered Labour and Prevention of Labour Fraud (Ley de Promoción del
Trabajo Registrado y Prevención del Fraude Laboral), among other things, establishes a Public Record
of Employers subject to Labour Sanctions (“Repsal”) and defines a series of labour and social security
infringements as a result of which an employer shall be included in the Repsal.
The employers included in the Repsal are subject to sanctions, such as: the inability to access public
programs, benefits, subsidies or credit from state-owned banks, the inability to enter into contracts and
licenses of property owned by the Argentine government, or the inability to participate in the awarding of
concessions of public services and licenses. Employers that commit the same infringement for which they
were added to the Repsal within a 3-year period after the final first decision imposing sanctions cannot
deduct from the Income Tax the expenses related to their employees while such employer continues to
be included in the Repsal. This new regulation applies to our subsidiaries and their contractors and
subcontractors, whose employees could initiate claims against our subsidiaries for direct or indirect
responsibility.
As of the date of the Company’s Annual Report, none of our subsidiaries have any sanctions registered
in the Repsal. However, if sanctions are applied in the future, they could have a significant impact on such
subsidiaries’ financial position, result of operations and cash flows.
A cyberattack, could adversely affect our business, balance sheet, results of operations and cash
flow.
In general, information security risks have increased in recent years as a result of the proliferation of new
and more sophisticated technologies and also due to cyberattack activities. As part of the Company’s
development and initiatives, more equipment and systems have been connected to the Internet. The
Company also relies on digital technology, including information systems, to process financial and
operational information. Due to the nature of our business and the greater accessibility allowed through
Internet connection, we could face an increased risk of cyberattacks. In the event of a cyberattack, we
could experience an interruption of our commercial operations, material damage and loss of customer
information, reputational loss; a substantial loss of income, suffering response costs and other economic
losses. As a result, a cyberattack could adversely affect our business, results of operations and financial
condition.
Also, during 2020, the new working methodology and the exponential growth of the digital collection
channels resulting from the COVID-19 isolation, required the implementation of several measures in order
to grant security in virtual operations, which were all implemented successfully. Although our subsidiaries
have adopted, and continues to adopt, all required measures to ensure the proper functioning of their
operating systems, as well as to ensure their customers’ information, no assurance can be given that they
will not be subject to any cyberattacks that could adversely affect our business and result of operations.
As of the date of the Company’s Annual Report, our subsidiaries’ insurance policies do not cover damages
caused by cyberattacks and other similar events.
Operational risks could adversely affect our reputation and our profitability.
The Company’s subsidiaries face operational risks inherent in their business, including those resulting
from inadequate internal processes; fraud; employee errors or misconduct; failure to comply with
applicable laws and regulations; failure to document transactions properly; system failures (including
cloud services); inadequate environmental management, including reverse logistics of goods and
materials in disuse that could become hazardous waste; the loss or improper use of confidential
information; excessive dependence on certain providers with which a large number of operations are
concentrated due to the exclusivity of the technology or service they provide, economic convenience or
for strategic reasons; among others. These events could result in direct or indirect losses, inaccurate
information for decision making, adverse legal and regulatory proceedings and damages to third parties,
which could harm our reputation and operational effectiveness, among others.
Our subsidiaries maintain insurance policies to cover their main assets, particularly their properties. If
economic and financial conditions in Argentina were to deteriorate (i.e. devaluation, inflation, etc.), the
insurance coverage may not be representative of the market value of the properties, which could result in
losses for the Company.
Our subsidiaries’ suppliers of goods and services are contractually obliged to comply with laws and
regulations (including tax, labor, social security, anti-corruption, money laundering standards, etc.).
Additionally, such suppliers shall comply with a set of conduct standards, such as codes of ethics, and
must require similar compliance by their employees and subcontractors. Despite these legal safeguards
and monitoring efforts made by our subsidiaries in relation to their suppliers, we cannot assure you that
they will comply with all applicable regulations. As a result, we could be adversely affected despite our
subsidiaries’ contractual rights to claim for compensations for damages that suppliers could cause them.
Even though our subsidiaries apply risk management practices at the highest levels, we can give no
assurances that these measures will be successful in effectively mitigating the operational risks that they
face. Failure to prevent such risks could harm our reputation and have a material adverse effect on our
business, results of operations and financial condition.
We and/or our management are subject to environmental and safety regulations, non-compliance
of which could result in increased costs and/or penalties for the Company and/or its officers.
Some of the goods and facilities used in our subsidiaries’ operation are subject to federal, state and
municipal environmental and safety regulations. Failure adequately to comply with such rules could result
in fines, potential delays or inability to obtain authorization for our subsidiaries’ facilities and operations,
which could have an adverse effect on our business and result in penalties for the officers of our
subsidiaries. In addition, in accordance with global trends, new and stricter standards may be issued, or
authorities may enforce or construe existing laws and regulations in a more restrictive manner, which may
force us to incur increased costs.
Risks Relating to our Shares and GDSs
The U.K. Listing Authority (“UKLA”), the London Stock Exchange (“LSE”) and/or the Buenos Aires
Stock Exchange (“BYMA”) may suspend trading and/or delist our GDSs and Class B common
shares, respectively, upon occurrence of certain events relating to our financial situation or
compliance with ongoing regulatory obligations.
The UKLA, the LSE and/or the BYMA may suspend and/or cancel the listing of our GDSs and Class B
common shares, respectively, in certain circumstances, including upon the occurrence of certain events
relating to our financial situation or compliance with ongoing regulatory obligations.
The UKLA and the LSE may in their sole discretion determine the suitability for continued listing and
admission to trading of our GDSs in the light of all pertinent facts. Some of the factors that may subject a
company to suspension and potential delisting procedures, include, inter alia, (i) failure to comply with
continuing obligations set out in the U.K. Listing Rules (such as the requirement to maintain a “free float”
of at least 25 per cent), and (ii) an inability to assess accurately the financial position of the company and
inform the market accordingly. The UKLA and the LSE may also suspend and ultimately cancel a
company’s listing if they determine that such action is necessary to protect investors with a view to
maintaining a proper functioning of the market.
We cannot assure you that the UKLA, the LSE and/or the BYMA will not commence any suspension or
delisting procedures in light of our financial situation or failure to comply with ongoing regulatory
obligations. A delisting or suspension of trading of our GDSs or Class B common shares by the UKLA,
the LSE and/or the BYMA, respectively, could adversely affect our results of operations and financial
conditions and cause the market value of our GDSs and Class B common shares to decline.
Under Argentine corporate law, shareholder rights may be fewer or less well defined than in other
jurisdictions.
Our corporate affairs are governed by our bylaws and by Argentine corporate law, which differ from the
corporate regulatory framework that would apply if we were incorporated in a jurisdiction in the United
Kingdom or in other jurisdictions outside Argentina. Thus, your rights under Argentine corporate law to
protect shareholders’ interests relating to actions by our Board of Directors may be fewer and less well
defined than under the laws of those other jurisdictions. Although insider trading and price manipulation
are illegal under Argentine law, the Argentine securities markets may not be as highly regulated or
supervised as the U.K. securities markets or markets in some of the other jurisdictions. In addition,
rules and policies against self-dealing and regarding the preservation of shareholder interests may be
less well defined and enforced in Argentina than in the United Kingdom, or other jurisdictions outside
Argentina, putting holders of our Class B Shares and GDSs at a potential disadvantage.
Changes in Argentine tax laws may adversely affect the tax treatment of our Shares and/or the
GDSs.
In September 2013, the Argentine income tax law was amended by Law No. 26,893 (the “Argentine
Income Tax Law”). The Argentine Income Tax Law provides that the sale, exchange or other transfer of
shares and other securities is subject to a capital gain tax at a rate of 15% for Argentine resident
individuals and foreign beneficiaries.
Until the enactment of Law No. 27,430, in force since fiscal year 2018, there was an exemption for
Argentine resident individuals if certain requirements were met. However, there was no such exemption
for non-Argentine residents. For transactions made until 31 December 2017, many aspects of the
Argentine Income Tax Law as they apply to the holding and sale of GDSs still remain unclear and they
were subject to further regulation and interpretation which may adversely affect the tax treatment of our
Shares underlying GDSs and/or GDSs. The income tax treatment of income derived from the sale of
GDSs or exchanges of shares from the GDS facility may not be uniform under the revised Argentine
Income Tax Law. The possibly varying treatment of the source of income could impact both Argentine
resident holders as well as non-Argentine resident holders.
Law No. 27,430 requires the capital gains tax to be paid for transactions carried out between September
2013 (when taxation on the sale of shares for non-residents was introduced) and the effective date of the
tax reform, providing that no tax, however, will be due for stock exchange transactions as long as the tax
has not yet been paid due to the lack of regulations for the withholding or collection by the stock exchange
agents or intermediaries.
Consequently, holders of our Class B Shares, including in the form of GDSs, are encouraged to consult
their tax advisors as to the particular Argentine income tax consequences of owning our Shares or the
GDSs.
Our shareholders may be subject to liability under Argentine law for certain votes of their
securities.
Under Argentine law, a shareholder’s liability for losses of a company is limited to the value of his or her
shareholdings in the company. However, shareholders who have a conflict of interest with us and who do
not abstain from voting at the respective shareholders’ meeting may be liable for damages to us, but only
if the transaction would not have been approved without such shareholders’ votes. Furthermore,
shareholders who willfully or negligently vote in favour of a resolution that is subsequently declared void
by a court as contrary to the law or our bylaws may be held jointly and severally liable for damages to us
or to other third parties, including other shareholders.
The price of our Class B Shares and the GDSs may fluctuate substantially, and your investment
may decline in value.
The trading price of our Class B Shares is likely to be highly volatile and may be subject to wide
fluctuations in response to factors, many of which are beyond our control. The market price of our GDSs
declined by 20.6% and 32.0% in 2020 and 2019, respectively. This decrease in value has been largely
attributed to Argentina’s most recent macroeconomic crisis and the impact of COVID 19. Such other
factors include:
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fluctuations in our periodic operating results;
changes in financial estimates, recommendations or projections by securities analysts;
changes in conditions or trends in our industry;
events affecting equities markets in the countries in which we operate;
legal or regulatory measures affecting our financial conditions;
departures of management and key personnel; or
potential litigation or the adverse resolution of pending litigation against us or our subsidiaries.
The stock markets in general have experienced extreme price and volume fluctuations that have often
been unrelated or disproportionate to the operating performance of the companies involved. We cannot
assure you that trading prices and valuations will be sustained. These broad market and industry factors
may materially adversely affect the market price of our Shares and the GDSs, regardless of our operating
performance. Market fluctuations, as well as general political and economic conditions in the markets in
which we operate, such as recession or currency exchange rate fluctuations, may also adversely affect
the market price of our Shares and the GDSs.
Future sales of substantial amounts of our Class B Shares and GDSs, or the perception that such future
sales may occur, may depress the price of our Class B Shares and GDSs.
Following periods of volatility in the market price of a company’s securities, that company may often be
subject to securities class-action litigation. This kind of litigation may result in substantial costs and a
diversion of management’s attention and resources, which would have a material adverse effect on our
business, results of operations and financial condition.
Restrictions on transfers of foreign exchange and the repatriation of capital from Argentina may
impair your ability to receive dividends and distributions on, and the proceeds of any sale of, the
Class B Shares underlying the GDSs.
On 1 September 2019, the Argentine government issued Executive Decree No. 609/19 (as amended)
which, inter alia, reinstated certain foreign currency exchange restrictions, most of which had been
progressively repealed as from 2015. Decree No. 609/19 was further regulated, amended and
complemented by several regulations issued by the BCRA (included, but not limited to, Communication
“A” 6844, as further amended, supplemented and restated). Since then, the Argentine government
implemented monetary and foreign exchange control measures that included restrictions on the transfer
of funds abroad, including dividends, without prior approval by the BCRA or fulfilment of certain
requirements.
In line with the restrictions that were in place in the past, the BCRA issued new regulations setting forth
certain limitations on the flow of foreign currency into and from the Argentine foreign exchange market,
aimed both at generating economic stability and supporting the country’s economic recovery.
On 30 April 2020, the BCRA issued Communication “A” 7001 (as amended by Communication “A” 7030
and Communication “A” 7042 and as further amended and supplemented from time to time)
Communication “A” 7001 setting forth certain limitations on the transfer of securities into and from
Argentina. Pursuant to Communication “A” 7001 access to the Argentine foreign exchange market for the
purchase or transfer of foreign currency abroad (for any purpose) shall be subject to BCRA’s prior
approval, if the individual or entity seeking access to the Argentine foreign exchange market has sold
securities which settled in foreign currency or transferred any such securities to foreign depositaries during
the immediately preceding 90 calendar days. Further, Communication “A” 7001 sets forth that the
individual or entity must undertake not to perform any such sale or transfer during the succeeding 90 days
after such access. In these cases, the Depositary for the GDSs may hold GDS holders’ Argentine Pesos
and may cannot convert them into foreign currency.
In addition, Communication “A” 7106 placed certain restrictions on foreign exchange transactions carried
out by individuals, specifically with regards to payments with credit cards in foreign currency or with debit
cards made abroad. Under Communication “A” 7106, it was also established that non-residents are not
allowed to sell securities executed abroad in the local stock market in exchange for foreign currency.
We cannot predict how the current restrictions on foreign transfers of funds may change after the date
hereof and whether they may impede our ability to fulfil our commitments in general and, in particular, our
obligations underlying the GDSs. In addition, any future adoption by the Argentine government of
restrictions to the movement of capital out of Argentina may affect the ability of our foreign shareholders
and holders of GDSs to obtain the full value of their Class B Shares and GDSs, and may adversely affect
the market value of the GDSs.
Trading of the Company’s Class B Shares in the Argentine securities markets is limited and could
experience further illiquidity and price volatility.
Argentine securities markets are substantially smaller, less liquid and more volatile than major securities
markets in the United Kingdom. In addition, Argentine securities markets may be materially affected by
developments in other emerging markets, particularly other countries in Latin America. Our Class B
Shares underlying the GDSs are less actively traded than securities in more developed countries and,
consequently, a GDS holder may have a limited ability to sell the Class B Shares underlying GDSs upon
withdrawal from the GDSs facility in the amount and at the price and time that it may desire. This limited
trading market may also increase the price volatility of the Class B Shares underlying the GDSs.
Holders of GDSs may be adversely affected by currency devaluations and foreign exchange
fluctuations.
If the peso exchange rate falls relative to the U.S. dollar, the value of the GDSs and any distributions
made thereon from the depositary could be adversely affected. Cash distributions made in respect of the
GDSs may be received by the depositary (represented by the custodian bank in Argentina) in pesos,
which will be converted into U.S. dollars and distributed by the depositary to the holders of the Depositary
Receipts (“GDRs”) evidencing those GDSs if in the judgment of the depositary such amounts may be
converted on a reasonable basis into U.S. dollars and transferred to GDS holders on a reasonable basis,
subject to such distribution being impermissible or impracticable with respect to certain GDR holders. In
addition, the depositary will incur foreign currency conversion costs (to be borne by the holders of the
GDRs) in connection with the foreign currency conversion and subsequent distribution of dividends or
other payments with respect to the GDSs.
The relative volatility and illiquidity of the Argentine securities markets may substantially limit
your ability to sell the shares underlying the GDSs on the BYMA at the price and time desired by
the shareholder.
Investing in securities that trade in emerging markets, such as Argentina, often involves greater risk than
investing in securities of issuers in the United Kingdom, and such investments are generally considered
to be more speculative in nature. The Argentine securities market is substantially smaller, less liquid,
more concentrated and can be more volatile than major securities markets in the United Kingdom, and is
not as highly regulated or supervised as some of these other markets. There is also significantly greater
concentration in the Argentine securities market than in major securities markets in the United Kingdom.
The ten largest companies in terms of market capitalization represented approximately 90% of the
aggregate market capitalization of the BYMA as of 31 December 2020. Accordingly, although
shareholders are entitled to withdraw the shares underlying the GDSs from the depositary at any time,
the ability to sell such shares on the BYMA at a price and time shareholders might elect may be
substantially limited.
We are traded on more than one market and this may result in price variations; in addition,
investors may not be able to easily move shares for trading between such markets.
Trading in the shares underlying GDSs or the GDSs in Argentina and the United Kingdom, respectively,
will use different currencies and take place at different times (resulting from different trading platforms,
different time zones, different trading days and different public holidays in the United Kingdom and
Argentina). The trading prices of the shares underlying GDSs on these two markets may differ due to
these and other factors. Any decrease in the price of the shares underlying GDSs on the BYMA could
cause a decrease in the trading price of the GDSs on the LSE. Investors could seek to sell or buy the
shares underlying GDSs to take advantage of any price differences between the markets through a
practice referred to as “arbitrage.” Any arbitrage activity could create unexpected volatility in both our
share prices on one exchange, and the GDSs available for trading on the other exchange. In addition,
holders of GDSs will not be immediately able to surrender their GDSs and withdraw the underlying shares
for trading on the other market without effecting necessary procedures with the depositary. This could
result in time delays and additional cost for holders of GDSs.
If we do not file or maintain a registration statement and no exemption from the Securities Act of
1933 (“Securities Act”) registration is available, U.S. holders of GDSs may be unable to exercise
preemptive rights granted to our holders of shares underlying GDSs.
Under the GCL, if we issue new shares as part of a capital increase, our shareholders may have the right
to subscribe to a proportional number of shares of the same class to maintain their existing ownership
percentage. Rights to subscribe for shares in these circumstances are known as preemptive rights. In
addition, shareholders are entitled to the right to subscribe for the unsubscribed shares remaining at the
end of a preemptive rights offering on a pro rata basis, known as accretion rights.
Upon the occurrence of any future increase in our class B shares, U.S. persons (as defined in Regulation
S under the Securities Act) holding our shares underlying GDSs or our GDSs may be unable to exercise
preemptive and accretion rights granted to our holders of shares underlying GDSs in connection with any
future issuance of our shares underlying GDSs unless a registration statement under the Securities Act
is effective with respect to both the preemptive rights and the new shares underlying GDSs, or an
exemption from the registration requirements of the Securities Act is available.
We are not obligated to file or maintain a registration statement relating to any preemptive rights offerings
with respect to our shares underlying GDSs, and we cannot assure that we will file or maintain any such
registration statement or that an exemption from registration will be available. Unless those shares
underlying GDSs or GDSs are registered or an exemption from registration applies, a U.S. holder of our
shares underlying GDSs or GDSs may receive only the net proceeds from those preemptive rights and
accretion rights if those rights can be assigned by the GDS depositary. If the rights cannot be sold, they
will be allowed to lapse. Furthermore, the equity interest of holders of shares or GDSs located in the U.S.
may be diluted proportionately upon future capital increases.
We are organised under the laws of Argentina and holders of the GDSs may find it difficult to
enforce civil liability claims against us, our directors, officers and certain experts.
We are organised under the laws of Argentina. A significant portion of our and our subsidiaries’ assets
are located in Argentina. Furthermore, almost all of our directors, officers and advisors reside in
Argentina. Investors may not be able to effect service of process in England upon such persons or to
enforce against them or us in English courts judgments predicated upon the civil liability provisions of
English law. Likewise, it may also be difficult for an investor to enforce in English courts judgments
obtained against us or these persons in courts located in jurisdictions outside England, including
judgments predicated upon the civil liability provisions of English law. It may also be difficult for an investor
to bring an original action in an Argentine court predicated upon the civil liability provisions of English law
against us or these persons.
Prior to any enforcement in Argentina, a judgment issued by an English court will be subject to the
requirements of Article 517 through 519 of the Argentine Federal Civil and Commercial Procedure Code
if enforcement is sought before federal courts or courts with jurisdiction in commercial matters of the City
of Buenos Aires. Those requirements are: (1) the judgment, which must be valid and final in the jurisdiction
where rendered, was issued by a competent court in accordance with the Argentine principles regarding
international jurisdiction and resulted from a personal action, or an in rem action with respect to personal
property which was transferred to Argentine territory during or after the prosecution of the foreign action;
(2) the defendant against whom enforcement of the judgment is sought was personally served with the
summons and, in accordance with due process of law, was given an opportunity to defend against foreign
action; (3) the judgment must be valid in the jurisdiction where rendered, and its authenticity must be
established in accordance with the requirements of Argentine law; (4) the judgment does not violate the
principles of public policy of Argentine law; and (5) the judgment is not contrary to a prior or simultaneous
judgment of an Argentine court. Any document in a language other than Spanish, including, without
limitation, the foreign judgment and other documents related thereto, requires filing with the relevant court
of a duly legalized translation by a sworn public translator into the Spanish language.
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 composed of ten permanent
directors and ten alternate directors who are elected at the Annual 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 rules.
Members of the Board of Directors
As appointed at the Annual Ordinary General Shareholders’ Meeting and at the Special Meeting of Class
“A” shares, Class ”A” and “B” Shares (acting as a single class) and Class “C” shares held on April 30,
2020, the Board of Directors of Grupo Clarín is composed of the following members:
Rendo, Jorge Carlos
Aranda, Héctor Mario
Aranda, Alma Rocío
Noble Herrera, Felipe
Magnetto, Horacio Ezequiel
Pagliaro, Francisco
Driollet, Ignacio Rolando
Calcagno, Lorenzo1
Riportella, Andrés Gabriel1
Quiros, Horacio
Colugio, Patricia Mirian
Acevedo, Francisco Iván
Etchevers, Martín Gonzalo
Sosa Mendoza, Eugenio
Boncagni, Marcelo Fernando
Rebay, Carlos1
Fernández, Luis Germán1
Chairman
Vice Chairman
Permanent Director
Permanent Director
Permanent Director
Permanent Director
Permanent Director
Permanent Director
Permanent Director
Permanent Director
Alternate Director
Alternate Director
Alternate Director
Alternate Director
Alternate Director
Alternate Director
Alternate Director
Puente Solari, Lucas
Kahrs, Alfredo Enrique
Marina, Alberto Pedro
1Independent Director
Alternate Director
Alternate Director
Alternate Director
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. In addition
to the Supervisory Committee, the Board of Directors, through the Audit Committee, carries out 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 of its members must meet the independence
requirement provided under CNV rules.
Supervisory Committee
As appointed at the Annual Ordinary General Shareholders’ Meeting and at the Special Meeting of Class
“A” shares, Class ”A” and “B” Shares (acting as a single class) and Class “C” shares held on April 30,
2020, the Company’s Supervisory Committee is composed of the following members:
Piano, Adriana Estela1
Permanent Member of the Supervisory Committee
Di Candia, Carlos Alberto Pedro1
Permanent Member of the Supervisory Committee
López, Hugo Ernesto1
Permanent Member of the Supervisory Committee
Tedín, Silvia Andrea1
Alternate Member of the Supervisory Committee
Mazzei, Miguel Angel1
Alternate Member of the Supervisory Committee
De la María Martinez de Hoz, Jorge J.J 1 Alternate Member of the Supervisory Committee
1 Independent member of the Supervisory Committee
Audit Committee
The Audit Committee is composed as follows:
Calcagno, Lorenzo
Riportella, Andrés Gabriel
Aranda, Héctor Mario
Acevedo, Francisco Iván
Rebay, Carlos
Fernández, Luis Germán
Chair
Vice Chair
Permanent Member
Alternate Member
Alternate Member
Alternate Member
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 competence, among other
factors.
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.
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 Annual General Shareholders'
Meeting after the close of each fiscal year, considering the cap established by Article 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 18 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 can 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
different positions within the company, as well as the performance of the employee that holds the position.
In order to assess positions and compare salaries in different markets, the Company uses the services
and reports of prestigious HR companies at national and international level.
Annual Shareholders' Meeting
Grupo Clarín held its Annual Shareholders' Meeting on April 30, 2020. On this occasion, the shareholders
reviewed and approved the accounting records for fiscal year No. 22 ended on December 31, 2019 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 2019.
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 to the aforementioned, and in conformity with Resolution No. 707/2019 issued by the Argentine
Securities Commission, the Company prepared the Report on the Corporate Governance Code in
accordance with Exhibit III, Title IV of Chapter I, Section I of the Rules, which is attached as an exhibit to
this Annual Report.
BUSINESS PROJECTIONS AND PLANNING
Grupo Clarín seeks to maintain and consolidate its presence in the local and regional market, focusing
on the creation of quality contents in all multimedia and multiplatform formats.
All of the Group’s business units will strive to seize opportunities, seeking to reinforce, improve and
expand the range of products and services offered; increase market share; reach new 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 strategy,
human resources, innovation and 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, with a growing focus on digital media, which have
been one of the largest strategic stakes of the Company for nearly two decades. To this end, it will rely
on the value and prestige of its trademarks, which have the largest rates of credibility and acceptance in
Argentina. The Company will use its broad experience in the creation of contents, recognized worldwide
-specially in the Spanish-speaking world-, to boost the success of its new platforms and formats.
Grupo Clarín reaffirms 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 professional and independent journalism and through the defense and
promotion of principles and values, such as freedom of speech, the effectiveness of republican democracy
and the promotion of the comprehensive development of Argentina and its inhabitants.
SUPPLEMENTARY FINANCIAL INFORMATION
The information included in the Supplementary Financial Information is part of this Annual Report and,
therefore, both should be read in conjunction.
FINANCIAL POSITION AND RESULTS OF ITS OPERATIONS
Total Revenues reached $ 26,640 million in 2020, a decrease of 23% from $ 34,620 million in 2019.
Advertising revenues decreased by 30% in real terms and Circulation sales decreased by 21% in real
terms, mainly due to the Argentine GDP (Gross Domestic Product) plunge in 2020.
Cost of sales (Excluding Depreciation and Amortization) reached $ 15,561 million in 2020, a decrease of
28.5% from $ 21,775 million reported in 2019 due to lower costs across all business segments, mainly in
Printing and Publishing and Broadcasting and Programming segments due to lower salaries and
severance payments, and printing costs.
Selling and Administrative Expenses (Excluding Depreciation and Amortization) reached $ 7,833 million
in 2020, a decrease of 26.1% from $ 10,596 million in 2019. This drop was mainly due to lower advertising
and marketing expenses, fees for services and distribution costs in Printing and Publishing segment and
lower salaries and severance payments in both Printing and Publishing and Others segments.
Adjusted EBITDA reached $ 3,246 million in 2020, an increase of 44% from $ 2,249 million reported for
2019. This increase was driven by the greater drop in costs over the drop in sales explained above.
Financial results net totaled a loss of $ 1,013 million in 2020 compared to a loss of $ 1,931 million in 2019.
The decrease of the negative financial results was mainly due to a lower interest of debt.
Equity in earnings from associates in 2020 totaled a gain of $ 579 million, compared to $ 239 million in
2019.
Other Income and expenses, net reached a loss of $ 1,221 million in 2020, compared to a loss of $ 110
million in 2019 (see Note 6.6 and 22 to the Consolidated Financial Statements).
Income tax and tax on assets as of 2020 reached a loss of $ 701 million in 2020, from $ 909 million in
2019.
Loss for the year 2020 totaled $ 465 million, a decrease of 77% from the loss of $ 1,986 million reported
in 2019. Loss attributable to Shareholders of the Parent Company amounted $ 274 million in 2020, a
decrease of 87% from $ 2,052 million in 2019.
Cash used in acquisitions of property, plant and equipment (CAPEX) totaled $ 446 million in 2020, a
decrease of 56% from $ 1,020 million reported in 2019. Out of total CAPEX for 2020, 49% was allocated
towards the Broadcasting and Programming segment, 41% to the Printing and Publishing segment and
the remaining 10% to other activities.
Debt profile (1): Debt coverage ratio for the year ended December 31, 2020 was 0.33 and the Net Debt
(2) at the end of this year totaled $ 1,074 million.
Grupo Clarín S.A. is still controlled by GC Dominio S.A., which holds 64.2% of its voting rights. Balances
and transactions with related parties are detailed in Note 15 to the Consolidated Financial Statements.
(1) Debt Coverage Ratio is defined as Total Financial Debt divided by Adjusted EBITDA. Total Financial debt is defined as financi al
loans and debt for acquisitions, including accrued interest.
(2) Net Debt is defined as Total Financial Debt less Cash and Cash Equivalents.
PROPOSAL OF THE BOARD OF DIRECTORS
Grupo Clarín is a holding company. Its results derive mainly from the operations of its subsidiaries.
Therefore, its liquidity position depends, among other things, on the distribution of dividends of Grupo
Clarín's subsidiaries -which have to meet their investment and interest payments needs-, the contributions
required by other subsidiaries and the expected future cash flows from operating and financing activities.
In particular, the media are faced with the challenge posed by digital transformation, with the development
of a new business model that does not compromise their journalistic independence and the quality of their
contents in a mature market, and with the strong impact that Argentine economy has on its revenues.
In the year ended December 31, 2020, the Company recorded a net loss of $274,351,674, mainly derived
from the deficit generated by the Printing and Publishing and Other segments. Retained earnings as of
that date amount to $ 275,662,483 negative. Since the Company does not have unrestricted reserves for
the absorption of the accumulated deficit as of the closing of this year, the Board of Directors proposes to
absorb, in accordance with CNV rules, the full deficit accumulated at the end of this fiscal year through
the partial reversal of Paid-in capital.
The Board of Directors of Grupo Clarín would like to thank its customers, suppliers, employees, banking
and financial institutions and other stakeholders, who are the key players in achieving the results obtained
this fiscal year by the Company's management.
The Board of Directors
Buenos Aires, April 22, 2021
EXHIBIT - REPORT ON THE CORPORATE GOVERNANCE CODE OF GRUPO CLARÍN S.A.
ROLE OF THE BOARD OF DIRECTORS
Principles
I.
II.
III.
IV.
V.
The company shall be led by a professional and qualified Board of Directors in charge of laying the
foundations for the company's sustainable success. The Board of Directors is the guardian of the
company and the rights of all its shareholders.
The Board of Directors shall be responsible for determining and promoting the corporate culture
and values. The Board of Directors’ performance shall guarantee the observance of the highest
standards of ethics and integrity, based on the best interest of the company.
The Board of Directors shall be in charge of ensuring a strategy inspired by the company’s vision
and mission, aligned with its values and culture. The Board of Directors shall engage constructively
with management to ensure the correct development, execution, monitoring and revision of the
company's strategy.
The Board of Directors shall control and supervise on an ongoing basis the direction of the
company, ensuring that management takes actions aimed at the implementation of the strategy
and the business plan approved by the Board of Directors.
The Board of Directors must have the necessary mechanisms and policies in order to efficiently
and effectively fulfill the role of the Board and each of its members.
Recommended Practices
1. The Board of Directors generates an ethical work culture and establishes the vision, mission and
values of the company.
The Company applies the recommended practice. The Board of Directors establishes the values
and principles that set the general framework within which the Company’s activities must be
developed. They are implemented by Departments or Divisions through a consistent message in
the conduction of its daily activities, and are reflected in its corporate policies, among which the
most relevant is the Code of Ethics and Conduct. Those principles and values follow the highest
ethical standards, as demonstrated by the Company along its track record, among which the
following stand out: its commitment to provide honest and independent communication, exercised
with professional responsibility, seeking to strengthen the institutions that sustain the democratic
system, promoting debate and communication between different sectors of society. The Code of
Ethics and Conduct describes objective scenarios where a conflict of interest may exist and
provides a non-exhaustive list of examples that standardize conflicts including relations with the
personnel, political and governmental relationships, and corporate asset protection.
2. The Board of Directors sets out the general strategy for the Company and approves the strategic
plan developed by Management. In doing so, the Board of Directors takes into consideration
environmental, social and corporate governance factors. The Board of Directors supervises its
implementation through the use of key performance indicators and taking into consideration the
best interest of the Company and the rights of all its shareholders.
The Company applies the recommended practice. The Company's Board of Directors and
Management design the general strategy, considering as the global framework the opportunities
and threats of the context in which it operates (external risk factors), the Company's internal
situation (internal risk factors) in the light of the established mission and values, and analyze,
discuss and approve on an annual basis the strategic plan, composed of it short, medium and
long term goals, and monitor its implementation using metrics that allow for an adequate oversight
of said strategic plan. In addition, the Board holds quarterly meetings at which the Directors
assess the Company’s operating and financial position, which includes a comparison with the
previous quarter.
3. The Board of Directors supervises management and ensures that it develops, implements and
maintains an adequate internal control system with clear reporting lines.
The Company applies the recommended practice. The Board of Directors, which is mostly
composed of non-executive directors, oversees the Company's operations not only with respect
to the achievement of the established objectives and goals, but also with respect to the integrity
and commitment with the values of the organization, the consistency of its actions with its mission
and values and the capacity to convey those values to all its employees. Through a set of
mechanisms and procedures, the Board of Directors monitors that the activities carried out by
Management comply with the policies in place, that the objectives be accomplished, that the
changes in the environment be contemplated in the decisions adopted, and that the measures
required to correct deviations be implemented. Among the main mechanisms, the Company has
detailed systems and procedures that set quantitative and qualitative rules for the approval of
transactions, regular management control meetings, and internal audits. The Corporate Control
Management follows high standards of control to assure the general control system and
compliance by the Company. Through previously established metrics, the upper management
regularly reports on its performance, allowing the Board of Directors to assess the performance
of those responsible for the Company’s operations. The Company’s Board of Directors, through
its Audit Committee, monitors that the Company has in place an adequate internal control and
accounting and administration system. Said Committee also meets quarterly with the external
auditors as part of the monitoring of the proper performance of these control systems.
4. The Board of Directors designs corporate governance structures and practices, appoints the
person responsible for their implementation, monitors their effectiveness, and suggests changes
as deemed necessary.
The Company does not apply the recommended practice within the terms mentioned above
because the Board of Directors has not formally designated an officer responsible for the
implementation of the corporate governance structures and initiatives. However, the Company
has the Corporate Control and Corporate Affairs Departments, which lead the implementation of
the Company’s corporate governance practices, and analyze the need to introduce changes upon
amendments in regulations, upon or changes in the Company's businesses, processes or
structure. In this sense, the Company also has an Investor Relations Department, an Internal
Audit Department, the Audit Committee and the Supervisory Committee. Those practices have
been deemed adequate and approved by the Company's Board of Directors. For that reason, the
Company applies the principles that underlie this practice. The Company’s website has a
Corporate Governance tab, which describes the role of the Board of Directors in its
implementation.
5. The members of the Board of Directors have sufficient time to perform their duties in a
professional and efficient manner. The Board of Directors and its committees have clear and
formalized rules of operation and organization, which are disclosed through the Company's
website.
The Company applies the recommended practice. The Company's Board of Directors is
composed of members that have impeccable personal and professional qualifications that enable
them to perform their duties in the Board. In addition, they devote sufficient time to adequately
perform their duties and, therefore, they attend without fail the meetings to which they are called
and receive relevant information sufficiently in advance so that they can make informed decisions
at the Board. As a result of the above, given the fact that the rules that govern their actions, as
well as their roles, functions and responsibilities arise from the Company's Bylaws, which are
published in the Financial Information Highway and on the Company’s website, the Company has
not deemed it necessary to state in an additional document the rules that set out the duties, roles
and functions of the members of the Board of Directors. The Audit Committee, composed of
members of the Board of Directors, has a Rules of Procedure, which was filed with the CNV.
CHAIR OF THE BOARD OF DIRECTORS AND COMPANY SECRETARY
Principles
VI.
The Chair of the Board is in charge of ensuring the effective fulfillment of the functions of the Board
of Directors and has a leading role among the members. The Chair shall generate a positive work
dynamic and promote the constructive engagement of the members of the Board, and shall also
ensure that they have the elements and information necessary for decision-making. The above also
applies to the Chairs of each committee of the Board of Directors, regarding their corresponding
functions.
VII. The Chair must lead processes and establish structures to ensure the commitment, objectivity and
competence of the members of the Board, as well as the best operation of the body as a whole and
its evolution according to the company's needs.
VIII. The Chair must ensure that the Board of Directors as a whole is fully committed and responsible
for the succession of the CEO.
Recommended Practices
6. The Chair of the Board of Directors is responsible for the proper organization of the Board of
Directors’ meetings, prepares the agenda ensuring the cooperation of the other members, and
ensures that they receive the necessary materials well in advance for their efficient and informed
participation. The Chairs of the committees bear the same responsibilities for their meetings.
The Company applies the recommended practice. The Chair of the Company’s Board of Directors
leads and organizes the Board of Directors’ meetings and the Shareholders’ Meetings and
receives the support of the Corporate Affairs Division, which, among its duties, is responsible for
assisting the Chair of the Board regarding the coordination of meetings, technical support,
delivery of information sufficiently in advance for the work carried out by the Directors and is also
responsible for minute-taking at those meetings, among other activities. The members of the
Board of Directors are called sufficiently in advance so that they can attend the meetings and
receive in due time the relevant information required to decide on the items of the agenda of the
meeting to which they are called.
7. The Chair of the Board of Directors ensures the proper internal operation of the Board of Directors
by implementing formal processes for conducting annual performance reviews.
The Company does not apply the recommended practice through the implementation of a formal
annual performance review process. However, it complies with the principles that underlie the
recommended practice because the Chair of the Company’s Board of Directors ensures the
correct and adequate internal functioning of the Board through the verification of the compliance
with all the obligations applicable to its members and those that arise from the Bylaws, the laws
and the Code of Ethics and Conduct. The shareholders gathered at the Shareholders’ Meeting
are the ones who, upon being furnished with the relevant and sufficient information, perform an
annual review of the performance of the Board of Directors at the time of considering the
performance of its members. Among the information made available to the Shareholders is the
Annual Report, which gives account of the performance of Management.
8. The Chair generates a positive and constructive workplace for all the members of the Board of
Directors and ensures that they receive ongoing training to keep up to date and to be able to
properly fulfill their duties.
The Company applies the recommended practice. The Company's Board of Directors performs
its duties in an orderly and harmonious environment among its members, ensuring constructive
and efficient teamwork for the benefit of the Company and its shareholders. Even though the
Company has not implemented an annual formal training program, the members of the Board of
Directors, in addition to their professional and personal qualifications and experience, regularly
receive updates, through the coordination carried out by the Corporate Affairs Department,
information, training, concerning the industry, business or regulations, for the adequate fulfillment
of their functions and responsibilities, training given by highly qualified officers with experience in
the Company's businesses, renowned market professionals, industry referents or specialized
consultancy firms.
9. The Company Secretary provides assistance to the Chair of the Board of Directors in the effective
administration of the Board and cooperates in the communication with the shareholders, the
Board of Directors and management.
The Company applies the recommended practice. The Company has a Corporate Affairs
Department that assists the Chair of the Board of Directors in administrative and organization
tasks required for the adequate functioning of the Board, such as those related to the preparation
and distribution of information, meeting minutes-taking, training, provision of information and
induction for new members, assistance in the communication among the members of the Board
of Directors and of the latter with Management, organization of shareholders’ Meetings, among
others. Taking into consideration the legal nature required in some of the functions of the Board
of Directors, it also receives the advice of external legal advisors, who, during 2020, advised
Directors on the holding of remote Shareholders’ Meetings and Board of Directors’ Meetings in
conformity with the mandatory and preventive social isolation ordered by the National Executive
Branch through Decree No. 297/2020, and Resolution No. 830/20 issued by the National
Securities Commission.
10. The Chair of the Board of Directors ensures the involvement of all its members in the development
and approval of a succession plan for the company's CEO.
The Company does not apply the recommended practice in the terms set out in it. The Company’s
Corporate Human Resources Department is in charge of the identification and retention of talents
for managerial positions, as well as the planning of their successors. It receives the assistance of
human resources professionals hired to such end.
COMPOSITION, NOMINATION AND SUCCESSION OF THE BOARD OF DIRECTORS
Principles
IX.
X.
The Board must have adequate levels of independence and diversity in order to make decisions in
the company’s best interest, avoiding groupthink and decision-making by individuals or dominant
groups within the Board.
The Board must ensure that the company has formal procedures for the proposal and nomination
of candidates to fill positions in the Board within a framework of a succession plan.
Recommended Practices
11. The Board of Directors has at least two independent members in conformity with the effective
criteria established by the Argentine Securities Commission.
The Company applies the recommended practice. The Company's Board of Directors is
composed of members who are also managers of the Company, non-independent directors
without executive responsibilities and independent directors. The Board of Directors has two
permanent directors and two alternate directors who are independent in conformity with the
criteria established by the Argentine Securities Commission. Their names and capacity are
published on the Company’s website and in that of the Argentine Securities Commission.
12. The Company has a Nomination Committee that has at least three (3) members and is chaired
by an independent director. If the Chair of the Board of Directors is also the chair of the
Nomination Committee, he/she shall refrain from participating in the appointment of his/her own
successor.
The Company does not apply the recommended practice because it does not have a nomination
committee. The Company’s Bylaws set out the way in which each class of shares shall appoint
the members of the Board of Directors, i.e., the shareholders appoint their directors. The Bylaws
is published on the website of the National Securities Commission.
13. The Board of Directors, through the Nomination Committee, develops a succession plan for its
members that guides the candidate pre-selection process to fill vacancies and takes into
consideration the non-binding recommendations of its members, the CEO and the Shareholders.
The Company does not apply the recommended practice. The Company does not have a
nomination committee. See the explanation related to the recommended practice No. 12.
14. The Board of Directors implements an onboarding program for its newly appointed members.
The Company applies the recommended practice. The Company provides assistance to the new
members of the Board of Directors through an induction process that covers all the necessary
aspects to gain an in-depth knowledge of the Company, through the contact with management
and access to documentation related to the Company to learn about its structure, businesses,
operations, personnel, processes, policies, legal advisors and applicable regulatory framework.
In addition, the new members, as well as those previously elected receive training under the terms
indicated in practice 8 above.
REMUNERATION
Principles
XI.
The Board of Directors must generate incentives through remuneration, in order to align
management -led by the CEO- and the Board with the long-term interests of the company, so that
all the directors equally comply with their obligations with respect to all its shareholders.
Recommended Practices
15. The Company has a Remuneration Committee that is composed of at least three (3) members.
All the members are independent or non-executive.
The Company does not apply the recommended practice. The Board does not have in place a
remuneration committee. However, the Company hires independent professional human
resources advisors that advise the Company regarding the remuneration of the Board of
Directors. In addition, the Audit Committee provides an opinion —in conformity with the applicable
regulations and at the request of the Board of Directors before the Annual Shareholders’
Meeting— on the reasonableness of the fees paid to the members of the Board of Directors taking
into consideration their professional background and reputation, tasks performed, responsibilities
and the amount of time devoted to the performance of their duties. On the other hand, the
Corporate Human Resources Department is in charge of supervising the remuneration of the first
line managers which includes the competitiveness of the remuneration practices and policies.
Said Department, with the advice of independent human resources professionals oversees that
the remuneration of managers is in line with the short, medium and long term returns according
to the Company’s management objectives. Hence, the Company fulfills the principle that underlies
the practice.
16. The Board of Directors, through the Remuneration Committee, establishes a remuneration policy
for the CEO and the members of the Board.
The Company does not apply the recommended practice in the terms set out in it. As mentioned
in the explanation related to recommended practice No. 15, the Board of Directors does not have
in place a remuneration committee. The policy that provides for the remuneration of management
is established by the Corporate Human Resources Department. That policy sets out a fixed and
variable remuneration scheme. The fixed compensation is related to the level of responsibility
attached to each position, the competitiveness with respect to the market and the performance of
the executive. The annual variable remuneration is related to the objectives set by the Company
for the fiscal year and the degree of compliance, which are in line with the Company’s business
plan and strategy. On the other hand, the executives have the option of adhering to a long-term
savings plan, which is used by the Company as a strong retention tool. The remuneration of the
Board of Directors is approved by the shareholders at the Annual General Shareholders’ Meeting.
In addition, the Board of Directors proposes the shareholders to authorize the payment of
advances up to a certain amount subject to the following Shareholders’ Meeting at which
shareholders shall approve their remuneration, advances distributed by the Board of Directors
among its members in accordance with the delegation made by the Annual Shareholders’
Meeting. Before proposing an amount of fees to be paid and submitting it on an annual basis to
the consideration of the shareholders for their approval, the Board of Directors receives an opinion
from the Audit Committee on the reasonableness of those fees.
CONTROL ENVIRONMENT
Principles
XII. The Board of Directors shall ensure the existence of a control environment, composed of internal
controls developed by management, internal audit, risk management, regulatory compliance and
external audit, all of which shall establish the lines of defense necessary to ensure the integrity of
the company's operations and its financial reports.
XIII. The Board of Directors must ensure the existence of a comprehensive risk management system
that allows management and the Board of Directors to efficiently direct the company towards its
strategic goals.
XIV. The Board of Directors must ensure the existence of a person or department (depending on the
size and complexity of the business, the nature of its operations and the risks it faces) in charge of
the internal audit of the company. Such audit shall be independent and objective, with clear
reporting lines, in order to properly evaluate and audit the company’s internal controls, corporate
governance processes, and risk management.
XV. The Audit Committee of the Board shall be composed of qualified and experienced members, and
shall perform its duties transparently and independently.
XVI. The Board of Directors must establish adequate procedures to ensure the independent and
effective work performed by the External Auditors.
Recommended Practices
17. The Board of Directors determines the company’s risk appetite and also supervises and
guarantees the existence of a comprehensive risk management system to identify, assess and
decide on the course of action and monitor the risks faced by the Company, including, among
others, the environmental and social risks and those inherent to the business in the short and
long term.
The Company does not apply the recommended practice in the terms set out in it. Even though
the Corporate Control Department consolidates information about the risks posed by the
Company's operations in the regular reports, which are analyzed by the Company's Board of
Directors and, in particular, by the Audit Committee, the Company does not have in place a formal
comprehensive risk management process; neither does the Board of Directors have a risk
management committee. However, the Company’s management contemplates operational,
environment, information, financial and non-financial risks in the development of its strategic and
business plan, which is discussed with the Company’s Board of Directors. Those risks are
contemplated in the management of the Company's activities, which has areas and processes to
identify and manage certain risks, such as environment, equity, information, financial,
environmental and technological risks. In addition, the Company has an Audit Committee
composed of qualified and experienced members, as indicated in the Principles, which fulfills the
duties conferred by the Capital Market Law.
18. The Board of Directors monitors and reviews the effectiveness of the independent internal audit
and guarantees the resources for the implementation of an annual audit plan based on risks and
a direct reporting line to the Audit Committee.
The Company applies the recommended practice. The Company has an internal audit department
that is independent from the areas of the Company it audits and reports to the Audit Committee,
which guarantees the objectivity of its work. Taking into consideration the extent of the Company's
operations and the guidelines of its internal rules, the Audit Committee monitors the function of
said department through the analysis of the reports issued, the sufficiency of the resources
available for the fulfillment of its duties and the consistency of its annual plan, which is developed
based on the audit risks identified.
19. The internal auditor or members of the internal audit department are independent and highly
qualified.
The Company applies the recommended practice. The Company has an internal audit department
with qualified personnel for the adequate fulfillment of their duties. The members of that
department have a vast professional experience in internal audit, financial reporting, fraud
investigations and internal control. Said staff keeps up to date on an ongoing basis. The structure,
policies and guidelines set by the Company's Management empowers the department to perform
its duties without any kind of scope limitations.
20. The Board of Directors has an Audit Committee that works in accordance with rules of procedure.
The committee is mostly composed of and chaired by independent directors and it does not
include the CEO. Most of its members have professional experience in financial and accounting
areas.
The Company applies the recommended practice. The Board of Directors has an Audit
Committee composed of a majority of independent directors. Its members are elected by the
Board of Directors among its members and the Chair is elected by the members of the Committee,
who acts in conformity with the laws, the Bylaws and internal rules. Those rules were duly
approved by the Board and presented to the Committee, and are regularly reviewed by its
members. The members of the Audit Committee have a vast experience in financial, accounting
and internal control matters. The Chair of the Audit Committee is an independent director. The
Audit Committee issues on an annual basis at the time of presentation of the annual financial
statements the report that discloses the treatment given to those matters that are within its
competence.
21. The Board of Directors, based on the opinion of the Audit Committee, approves a policy for the
selection and monitoring of external auditors that provides for the indicators to be considered in
the recommendation to the Shareholders’ Meeting about the continuity or replacement of the
external auditor.
The Company applies the recommended practice. The Audit Committee, which provides an
opinion before the Annual Shareholders’ Meeting on the engagement of the external auditors,
has in place a policy that sets out the guidelines to be followed in the assessment of the work
performed by the external auditor, in order to issue its opinion on the proposal of the Board of
Directors for the appointment of the external auditor, to ensure and assess its independence and
to perform a comprehensive assessment of its work.
ETHICS, INTEGRITY AND COMPLIANCE
Principles
XVII. The Board of Directors shall design and establish appropriate structures and practices to promote
a culture of ethics, integrity and compliance with standards in order to prevent, detect and address
serious corporate or personal breaches.
XVIII. The Board shall ensure the establishment of formal mechanisms to prevent, or failing this, to deal
with conflicts of interest that may arise in the administration and direction of the company. It shall
also have in place formal procedures seeking to ensure that related party transactions are made in
the best interest of the company and the equitable treatment of all its shareholders.
Recommended Practices
22. The Board of Directors approves a Code of Ethics and Conduct that reflects the ethical and
integrity values and principles, as well as the culture of the company. The Code of Ethics and
Conduct is communicated and applicable to all the directors, managers and employees of the
company.
The Company applies the recommended practice. The Company has a Code of Ethics and
Conduct to address good corporate governance and corporate social responsibility practices,
approved by its Board of Directors, which reflects the values and conducts promoted by the
Company. All the directors, managers and employees of the Company are aware of said Code
and its compliance is mandatory for all of them. The Code provides for sanctions in case of non-
compliance.
23. The Board of Directors sets out and periodically reviews an Ethics and Integrity Program based
on risks, size and economic capacity. The plan is clearly and unequivocally supported by
management, which designates an internal officer responsible for developing, coordinating,
supervising and reviewing on an ongoing basis the efficacy of the program. The program provides
for: (i) periodic training for directors, administrators and employees about ethics, integrity and
compliance issues; (ii) internal channels to report irregularities, open to third parties and
adequately disseminated; (iii) a policy for the protection of whistleblowers from retaliation; and an
internal investigation system that respects the rights of those under investigation and imposes
effective sanctions on violations of the Code of Ethics and Conduct; (iv) integrity policies in bidding
procedures; (v) mechanisms for periodic analysis of risks, monitoring and evaluation of the
Program; and (vi) procedures to verify the integrity and background of relevant third parties or
business partners (including due diligence during corporate transformation and acquisitions
processes to evaluate potential irregularities, illegal actions or vulnerabilities), including suppliers,
distributors, service providers, agents and intermediaries.
The Company applies the recommended practice. The Company has developed an integrity
program based on its risks, size and economic capacity. Such program includes: (i) a Code of
Ethics and Conduct that reflects the values and principles promoted by the Company, as
mentioned in the explanation related to recommended practice No. 22, and which contemplates
the integrity policies in all those situations in which an employee of the Company interacts with
public officials; (ii) a reporting channel that has its own protocol and is aimed at strengthening the
Company’s ethical infrastructure, which allows for anonymous reporting and guarantees the
confidentiality of communications as well as the protection against retaliation as a result of an
investigation process because the Company encourages all of its employees to express freely
without fear of retaliation; (iii) training for directors, managers and employees about ethics and
integrity; (iv) the evaluation by the Corporate Control Department, as the internal body responsible
for the ethics and integrity program, of integrity risks and the monitoring of the evolution of the
program; (v) the adherence by the suppliers to the Company's transparency principles and
practices.
24. The Board of Directors ensures the existence of formal mechanisms to prevent and deal with
conflicts of interest. In the case of related party transactions, the Board of Directors approves a
policy that provides for the role of each corporate body and sets out how to identify, address and
disclose those transactions that are detrimental to the company or to certain investors.
The Company applies the recommended practice. The Company's Code of Ethics and Conduct
has a section that contains the provisions applicable to conflicts of interest. On the other hand,
the Company has a specific policy on related party transactions, which complies with effective
rules.
ENGAGEMENT OF SHAREHOLDERS AND STAKEHOLDERS
Principles
XIX. All shareholders must receive equitable treatment from the company. The company shall guarantee
equitable access to non-confidential and relevant information for decision making at the company's
shareholders’ meetings.
XX. The company shall promote the active engagement of all shareholders with adequate information,
especially in connection with the composition of the Board.
XXI. The company must have a transparent Dividend Distribution Policy, in line with its strategy.
XXII. The company must take into account the interests of its stakeholders.
Recommended Practices
25. The Company's website has financial and non-financial information available, providing timely
and equitable access to all the investors. The website has a special section to answer inquiries
from investors.
The Company applies the recommended practice. The Company has a website in which it
publishes financial and non-financial information, thus allowing investors to have material
information in due time and form. The Company also has an investor relations area led by the
Market Relations Officer to answer inquiries. Said Officer is appointed by the Board of Directors
in conformity with CNV rules. Said department organizes conference calls on a quarterly basis
ensuring investors worldwide the possibility of connecting for free. At these calls, the Company
provides information about its results, its goals and answers questions and/or inquiries made by
investors. These conference calls are announced in the daily bulleting of the Buenos Aires Stock
Exchange, in the reporting service of the London Stock Exchange, and on the Company’s
website. The Company maintains communication channels with the minority shareholders
through the disclosure of relevant information in the stock exchanges where its shares and GDSs
are listed and through information disclosed in the Company's website. In addition, the Company's
shareholders and investors can communicate with the department via email or by telephone, as
detailed on the website.
Among the non-financial information disclosed by the Company on its website, the sustainability
reports it issues are available under the tab “Sustainability”. It should be noted that the Company
is the only media company that publishes a sustainability report. This tab also shows the money
in kind donated in public welfare messages to promote social, civil and environmental causes.
The Company is a leader in terms of Sustainability: It creates monthly supplements to promote
sustainable development. It also carries out a literacy program for children and adolescents aimed
at promoting content creation skills and a critical look at journalistic content.
26. The Board of Directors must ensure that there is a process in place for the identification and
classification of its stakeholders and a communication channel for them.
The Company applies the recommended practice. The Company's Investor Relations Department
works together with the Sustainability Department to identify potential and actual stakeholders of
the company. The Company has different communication channels that allow it to have contact
with key internal and external audiences, listen to their points of view and disclose those of the
Company; and hence build a long-term value-generating relationship for all the parties involved.
The Company’s main stakeholders are journalism; the community and civil society organizations;
business chambers and associations; audiences, customers and readers; associates;
universities; companies; suppliers and employees. Since 2015, the Company has issued a
sustainability report on an annual basis and has been the first media company to do so in
conformity with international guidelines including the Global Reporting Initiative standards, the
UN Global Compact and the contribution to the 2030 UN agenda, whose priority is to generate
value for the country, providing journalistic content, a bond with the audience, and economic
independence. This report defines the following stakeholders: shareholders, investors, analysts,
companies, business chambers, employees, journalists, audiences, customers, suppliers,
leaders in the field of culture, science and technology entrepreneurs, universities, media, news
agencies, press associations, leaders in the world of communications.
27. The Board of Directors provides the shareholders, in advance of the Shareholders’ Meeting, a
“temporary information package” that allows shareholders -through a formal communication
channel - to make non-binding comments and share opinions that dissent from the
recommendations made by the Board of Directors. When the Board sends the final information
package, it shall expressly state its answers to the comments received, as deemed necessary.
The Company applies the recommended practice. The Company distributes information
packages before Shareholders’ Meeting are held. Notwithstanding the foregoing, the packages
are not provisional. In addition, the Company uploads to CNV’s Financial Information Highway all
the information requests made the Company's shareholders before Shareholders’ Meetings are
held, regarding the items of the agendas to be considered at those meetings, together with the
answers provided by the Company to each of the requests, so that all the investors have the
same information thus ensuring equitable access to the information provided. Such information
is also provided in English for the foreign investors through the reporting service of the London
Stock Exchange.
28. The Company's bylaws provide that the shareholders can receive the information packages for
Shareholders’ Meetings through virtual media and participate at the meetings through electronic
communication media that allow the simultaneous transmission of sound, images and words,
ensuring the principle of equitable treatment of the participants.
The Company does not apply the recommended practice. Shareholders may only attend
meetings in person because the Company's Bylaws do not allow remote participation through the
simultaneous transmission of sound, images and words. The Company's bylaws do allow remote
participation but only for the Board of Directors’ meetings. Notwithstanding the foregoing, as
stated in item 27, the Company sends to its shareholders through virtual media as established in
the practice, before meetings are held, the information packages corresponding to each meeting,
as well as the answers to requests for information made by shareholders. In addition, the
Company encourages the participation of all its shareholders, including foreign shareholders, to
whom it sends well in advance, through the Depositary, a communication translated into English
containing the items of the agenda so that they can grant a power of attorney or a proxy to the
Depositary. In this way, the Depositary can participate at the meeting in their name and
representation and vote as instructed in the corresponding power of attorney.
Notwithstanding the foregoing, the Annual Shareholders’ Meeting corresponding to the fiscal year
ended December 31, 2019 was held remotely due to the Mandatory and Preventive Social
Isolation ordered by the National Executive Power - under Decree 297/20 and successive
extensions in connection with the propagation of the COVID-19 - pursuant to Resolution No.
830/20 issued by the Argentine Securities Commission which allowed the Company to hold those
Shareholders’ Meetings through a system that ensured the simultaneous transmission of sound,
images and words throughout the Shareholders’ Meetings, guaranteeing the principle of equitable
treatment for all participants, its free accessibility and recording of Shareholders’ Meetings. In
addition,
the documentation
corresponding to the e-mail address informed by the Company both in the Argentine Securities
Commission and in a newspaper with broad circulation by publishing a Supplementary Notice
pursuant to the provisions of applicable regulations.
the shareholders confirmed
their attendance by
issuing
29. The Dividend Distribution Policy is aligned with the strategy and clearly sets out the criteria,
frequency and conditions under which dividends will be distributed.
The Company does not apply the recommended practice. The Company’s Board of Directors
believes that given the nature of a holding company and depending basically on the liquidity of
its revenues that derive from the companies in which it holds equity interests, it is not convenient
to establish a dividend distribution policy. Notwithstanding the foregoing, the Board of Directors
provides grounds for its proposal for the distribution of dividends and the reasons for which it
deems reasonable under a prudent administration of the Company.
GRUPO CLARÍN S.A.
GRUPO CLARÍN S.A.
CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2020 PRESENTED ON A COMPARATIVE BASIS
GLOSSARY OF SELECTED TERMS
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.
AGL ..................................................... Artes Gráficas del Litoral S.A.
AGR .................................................... Artes Gráficas Rioplatense S.A.
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.
Bariloche TV ........................................ Bariloche TV S.A.
BCBA .................................................. Bolsa de Comercio de Buenos Aires (Buenos Aires Stock Exchange).
Cablevisión .......................................... Cablevisión S.A.
Cablevisión Holding.............................. Cablevisión Holding S.A.
Canal Rural .......................................... Canal Rural Satelital S.A.
Carburando .......................................... Carburando S.A.
CIMECO .............................................. Compañía Inversora en Medios de Comunicación (CIMECO) S.A.
CMD .................................................... Compañía de Medios Digitales (CMD) S.A. (former PRIMA Internacional)
CMI ..................................................... Comercializadora de Medios del Interior S.A.
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
Cúspide ............................................... Cúspide Libros S.A.U.
DLA ..................................................... Diario Los Andes Hermanos – Calle S.A.
Adjusted EBITDA .................................
Revenues less cost of sales and selling and administrative expenses
(excluding depreciation and amortization). Additionally, the segment "Cable
Television and Internet Access" includes adjustments related to the
recognition of revenues from installation services and transactions including
separate items and the non-consolidation of special purpose entities.
EPN ..................................................... Electro Punto Net S.A.
Exponenciar ......................................... Exponenciar S.A.
FACPCE .............................................. Federación Argentina de Consejos Profesionales de Ciencias Económicas
(Argentine Federation of Professional Councils in Economic Sciences)
GCGC ................................................. GC Gestión Compartida S.A.
GCSA Investments .............................. GCSA Investments, S.A.U.
GC Minor ............................................. GC Minor S.A.U.
GDS .................................................... Global Depositary Shares
Grupo Clarín, or the Company .............. Grupo Clarín S.A.
- 1 -
GRUPO CLARÍN S.A.
GRUPO CLARÍN S.A.
CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2020 PRESENTED ON A COMPARATIVE BASIS
International Accounting Standards Board
Inversora de Eventos S.A.
International Financial Reporting Interpretations Committee
International Financial Reporting Standards
Inspección General de Justicia (Argentine Superintendency of Legal Entities)
Impripost Tecnologías S.A.
IASB ....................................................
IESA ....................................................
IFRIC
IFRS ....................................................
IGJ ......................................................
Impripost ..............................................
VAT ..................................................... Value Added Tax
Audiovisual Communication Services
Law ..................................................... Law No. 26,522 and its regulations
LSE ..................................................... London Stock Exchange
LVI....................................................... La Voz del Interior S.A.
Médula ................................................ Médula Network, LLC
Multicanal ............................................ Multicanal S.A.
IAS ......................................................
NCP ARG…………………………………
International Accounting Standards
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.
Radio Mitre .......................................... Radio Mitre S.A.
Gain (Loss) on Net Monetary Position ... Results from changes in the purchasing power of the currency (“RECPAM”,
for its Spanish acronym)
Ríos de Tinta ....................................... Ríos de Tinta S.A de C.V.
SCI ...................................................... Secretaría de Comercio Interior (Secretariat of Domestic Trade)
Supercanal .......................................... Supercanal Holding S.A.
Telba ................................................... Teledifusora Bahiense S.A.
Telecom............................................... Telecom Argentina S.A.
Telecor ................................................ Telecor S.A.C.I.
TFN ..................................................... Tribunal Fiscal de la Nación (National Tax Court)
Tinta Fresca ......................................... Tinta Fresca Ediciones S.A.
TRISA .................................................. Tele Red Imagen S.A.
TSC ..................................................... Televisión Satelital Codificada S.A.
UNIR ................................................... Unir S.A.
- 2 -
GRUPO CLARÍN S.A.
GRUPO CLARÍN S.A.
CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2020 PRESENTED ON A COMPARATIVE BASIS
In Argentine Pesos ($) – Notes 2.1 and 2.12.
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: April 27, 2017
Registration number with the IGJ: 1,669,734
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.
CAPITAL STRUCTURE (See Note 13)
Type
Class “A” Common shares, with nominal value of $ 1
Class “B” Common shares, with nominal value of $ 1
Class “C” Common shares, with nominal value of $ 1
Total as of December 31, 2020
Total as of December 31, 2019
Number
of votes
per share
5
1
1
Subscribed,
registered
and paid-in
capital
28,226,683
69,203,544
9,345,777
106,776,004
106,776,004
- 3 -
GRUPO CLARÍN S.A.
GRUPO CLARÍN S.A.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019
(Amounts stated in Argentine Pesos – Note 2.1.1)
Revenues
Cost of Sales (1)
Subtotal - Gross Profit
Selling Expenses (1)
Administrative Expenses (1)
Other Income and Expenses, net
(Loss) on Net Monetary Position
Financial Expenses on Debt
Other Financial Results, net
Financial Results
Equity in Earnings from Associates
Income (Loss) before Income Tax
Income Tax
Loss for the year
Other Comprehensive Income
December 31,
2020
Notes
December 31,
2019
6.1
6.2
6.3
6.3
6.6
6.4
6.5
5.4
7
26,639,658,889
(16,687,410,185)
34,619,659,621
(23,028,827,234)
9,952,248,704
11,590,832,387
(3,809,674,129)
(4,252,524,971)
(1,220,820,137)
(181,632,242)
(786,702,632)
(44,206,620)
(1,012,541,494)
579,392,288
(5,703,425,400)
(5,163,040,884)
(109,696,062)
(257,693,476)
(1,508,238,150)
(165,477,976)
(1,931,409,602)
239,258,524
236,080,261
(1,077,481,037)
(701,130,812)
(465,050,551)
(908,949,994)
(1,986,431,031)
Items which can be reclassified to Net Income (Loss)
Variation in Translation Differences of Foreign Operations
Other Comprehensive Income (Loss) for the Year
3,309,578
3,309,578
(5,783,358)
(5,783,358)
TOTAL COMPREHENSIVE (LOSS) FOR THE YEAR
(461,740,973)
(1,992,214,389)
(Loss) Income Attributable to:
Shareholders of the Parent Company
Non-Controlling Interests
Total Comprehensive Income (Loss) Attributable to:
Shareholders of the Parent Company
Non-Controlling Interests
Basic and Diluted Net Income (Loss) per Share - Total (2)
(274,351,674)
(190,698,877)
(2,052,076,145)
65,645,114
(271,055,276)
(190,685,697)
(2.57)
(2,051,119,821)
58,905,432
(19.22)
(1) Includes amortization of intangible assets and film library, right-of-use assets and depreciation of property, plant and equipment in the amount of
$ 1,355,461,677 and $ 1,524,687,533 for the years ended December 31, 2020 and 2019, respectively.
(2) See Note 16.
The accompanying notes are an integral part of these consolidated financial statements.
- 4 -
GRUPO CLARÍN S.A.
GRUPO CLARÍN S.A.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS OF DECEMBER 31, 2020 AND 2019
(Amounts stated in Argentine Pesos – Note 2.1.1)
Notes
December 31, 2020
December 31, 2019
ASSETS
NON-CURRENT ASSETS
Property, Plant and Equipment
Intangible Assets
Goodwill
Deferred Tax Assets
Right-of-Use Assets
Investments 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
Total Assets
EQUITY (as per the corresponding statement)
Attributable to Shareholders of the Parent Company
Shareholders’ Contribution
Other Items
Retained Earnings
Total Attributable to Shareholders of the Parent Company
Attributable to Non-Controlling Interests
Total Equity
LIABILITIES
NON-CURRENT LIABILITIES
Provisions and Other Charges
Financial Debt
Lease Liabilities
Deferred Tax Liabilities
Taxes Payable
Other Liabilities
Trade and Other Payables
Total Non-Current Liabilities
CURRENT LIABILITIES
Financial Debt
Lease Liabilities
Taxes Payable
Other Liabilities
Trade and Other Payables
Total Current Liabilities
Total Liabilities
Total Equity and Liabilities
5.1
5.2
5.3
7
5.16
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
5.16
7
5.13
5.14
5.15
5.12
5.16
5.13
5.14
5.15
7,034,951,442
457,786,092
22,073,350
861,337,185
83,204,737
2,688,625,846
13,437,910
23,431,318
45,399,578
106,925,558
7,208,574
11,344,381,590
1,113,655,977
112,763,146
2,109,348,630
7,876,187,848
1,944,102,079
1,294,110,858
14,450,168,538
7,584,905,019
577,182,539
1,267,776,613
671,544,344
128,135,489
2,263,691,825
-
24,474,982
46,626,927
358,011,863
56,852,857
12,979,202,458
1,786,492,580
162,151,304
2,085,342,404
7,897,963,136
962,047,749
2,049,884,020
14,943,881,193
25,794,550,128
27,923,083,651
12,452,719,357
24,536,186
1,217,814,141
13,695,069,684
95,982,672
13,791,052,356
1,082,994,975
1,439,684,762
16,635,842
188,971,780
14,443,308
256,607,296
36,580,036
3,035,917,999
273,336,699
69,870,293
978,135,939
901,425,336
6,744,811,506
8,967,579,773
14,504,795,502
31,585,828
(558,599,521)
13,977,781,809
281,175,171
14,258,956,980
1,085,311,593
1,224,119,263
36,168,882
384,021,786
39,398,171
249,250,730
92,107,107
3,110,377,532
1,323,511,626
91,634,655
717,112,406
1,109,177,689
7,312,312,763
10,553,749,139
12,003,497,772
13,664,126,671
25,794,550,128
27,923,083,651
The accompanying notes are an integral part of these consolidated financial statements.
- 5 -
GRUPO CLARÍN S.A.
GRUPO CLARÍN S.A.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019
(Amounts stated in Argentine Pesos – Note 2.1.1)
Equity attributable to Shareholders of the Parent Company
Shareholders’ Contribution
Capital Stock
Inflation
Adjustment on
Capital Stock
Additional Paid-in
Capital
Subtotal
Other Items
Translation of
Foreign
Operations
Other
Reserves
Retained Earnings
Legal Reserve
Voluntary
Reserves
Retained
Earnings
Total Equity of
Controlling
Interests
Equity
Attributable to
Non-Controlling
Interests
Total Equity
Balances as of December 31, 2018
106,776,004 5,008,319,256
12,028,623,327
17,143,718,587
192,100,028
(161,470,524)
171,253,444
12,547,288,854
(13,863,988,759)
16,028,901,630
255,346,645
16,284,248,275
Set-up of Reserves (Note 13)
Dividends and Other Movements of Non-
Controlling Interest
Loss for the year
Other Comprehensive Income:
Variation in Translation Differences of
Foreign Operations
Balances as of December 31, 2019
Changes in minority interest in a subsidiary
(Note 13)
Set-up of Reserves (Note 13)
Sale of Treasury Stock
Dividends and Other Movements of Non-
Controlling Interest
Loss for the year
Other Comprehensive Income:
Variation in Translation Differences of
Foreign Operations
-
-
-
-
-
-
-
-
(2,638,923,085)
(2,638,923,085)
-
-
-
-
-
-
-
-
-
956,324
-
-
-
-
106,776,004 5,008,319,256
9,389,700,242
14,504,795,502
193,056,352
(161,470,524)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(2,052,076,145)
(2,052,076,145)
-
-
-
-
-
-
-
-
-
-
-
-
-
3,296,398
(11,709,643)
-
1,363,603
-
-
-
Balances as of December 31, 2020
106,776,004 5,008,319,256
7,337,624,097
12,452,719,357
196,352,750
(171,816,564)
(1) Corresponds to Judicial Reserve for Future Dividends Distribution as of December 31, 2020.
(171,253,444)
(11,053,812,230)
13,863,988,759
-
-
-
-
-
(33,076,906)
(33,076,906)
(2,052,076,145)
(2,052,076,145)
65,645,114
(1,986,431,031)
-
956,324
(6,739,682)
(5,783,358)
-
-
-
1,493,476,624
(2,052,076,145)
13,977,781,809
281,175,171
14,258,956,980
-
-
-
-
-
-
-
(11,709,643)
11,709,643
2,052,076,145
(1,310,809)
-
52,794
-
-
-
-
52,794
-
-
(6,216,445)
(6,216,445)
(274,351,674)
(274,351,674)
(190,698,877)
(465,050,551)
-
3,296,398
13,180
3,309,578
(1) 1,493,476,624
(275,662,483)
13,695,069,684
95,982,672
13,791,052,356
-
-
-
-
-
-
-
-
-
-
-
The accompanying notes are an integral part of these consolidated financial statements.
- 6 -
GRUPO CLARÍN S.A.
GRUPO CLARÍN S.A.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019
(Amounts stated in Argentine Pesos – Note 2.1.1)
December 31,
2020
December 31,
2019
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES
Loss for the year
Income Tax
Accrued Interest, net
Adjustments to reconcile Net Loss for the Year to Cash provided by Operating Activities:
Depreciation of Property, Plant and Equipment
Amortization of Intangible Assets and Film Library
Amortization of Right-of-Use Assets
Net Allowances
Financial Income, except Interest
Equity in Earnings from Associates
Impairment of Goodwill
(Loss) on Net Monetary Position
Other Income and Expenses
Changes in Assets and Liabilities:
Trade Receivables
Other Receivables
Inventories
Other Assets
Trade and Other Payables
Taxes Payable
Other Liabilities
Provisions
Payments of Income tax
Net Cash Flows provided by Operating Activities
CASH FLOWS PROVIDED BY INVESTMENT ACTIVITIES
Payments for Acquisition of Property, Plant and Equipment
Payments for 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 and Intangible Assets
Dividends Collected from Investments in Unconsolidated Affiliates
Acquisition of Government Securities
Loans Granted
Collections of Loans
Collections of Interest
Proceeds from Sale of Other Assets
Transactions with Notes, Bonds and Other Placements, Net
Net Cash Flows used in Investment Activities
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES
Sale of Treasury Shares
Loans Obtained
Payment of Financial Debt
Payment of Interest
Payment of Lease Liabilities
Payments to Non-Controlling Interests, net
Net Cash Flows used in Financing Activities
(465,050,551)
701,130,812
179,585,396
924,465,523
321,669,554
109,326,600
543,761,556
198,412,585
(579,392,288)
1,295,703,263
181,632,242
(32,961,954)
(2,768,557,470)
(494,934,707)
465,303,528
51,963,743
2,077,599,958
(198,034,911)
184,314,391
(132,708,758)
(487,581,443)
2,075,647,069
(445,751,031)
(173,137,868)
(64,666)
2,049,422
110,124,818
(416,710,265)
-
36,079,695
15,476,642
1,768,067
165,913,056
(704,252,130)
52,794
933,398,590
(1,619,051,951)
(283,191,742)
(87,309,542)
(6,174,959)
(1,062,276,810)
(1,986,431,031)
908,949,994
732,694,673
975,862,572
382,003,116
166,821,845
683,186,755
210,833,856
(239,258,524)
-
257,693,476
(45,099,949)
(1,821,487,772)
(1,144,477,558)
335,473,796
(22,808,319)
2,935,954,454
(367,136,373)
614,506,759
(188,998,658)
(468,554,375)
1,919,728,737
(1,020,295,536)
(168,322,530)
(219,682)
31,332,101
188,397,976
(85,751,014)
(83,228,938)
-
-
8,349,105
298,783,046
(830,955,472)
-
3,148,261,279
(2,449,903,271)
(838,791,091)
(185,770,947)
(16,519,967)
(342,723,997)
FINANCIAL RESULTS (INCLUDING GAIN (LOSS) ON NET MONETARY POSITION) OF CASH
AND CASH EQUIVALENTS
(Decrease) / Increase in cash flow, net
Cash and Cash Equivalents at the Beginning of the Year (Note 2.24)
Cash and Cash Equivalents at the Closing of the Year (Note 2.24)
(533,716,318)
(328,439,508)
(224,598,189)
3,011,841,018
2,787,242,829
417,609,760
2,594,231,258
3,011,841,018
The accompanying notes are an integral part of these consolidated financial statements.
- 7 -
GRUPO CLARÍN S.A.
INDEX OF THE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
INCOME TAX
1. GENERAL INFORMATION
2. BASIS FOR THE PREPARATION AND PRESENTATION OF THE CONSOLIDATED FINANCIAL STATEMENTS.
3. ACCOUNTING ESTIMATES AND JUDGMENTS
4. SEGMENT INFORMATION
5. BREAKDOWN OF THE MAIN ITEMS OF THE STATEMENT OF FINANCIAL POSITION
6. BREAKDOWN OF THE MAIN ITEMS OF THE STATEMENT OF COMPREHENSIVE INCOME
7.
8. PROVISIONS AND OTHER CONTINGENCIES
9. REGULATORY FRAMEWORK
10. CALL OPTIONS
11. FINANCIAL INSTRUMENTS
12. INTERESTS IN SUBSIDIARIES AND AFFILIATES
13. RESERVES, ACCUMULATED INCOME AND DIVIDENDS
14. NON-CONTROLLING INTEREST
15. BALANCES AND TRANSACTIONS WITH RELATED PARTIES
16. EARNINGS PER SHARE
17. COVENANTS, SURETIES AND GUARANTEES PROVIDED
18. LONG-TERM SAVINGS PLAN FOR EMPLOYEES
19. OPERATING LEASES
20. TAX REFORM IN ARGENTINA
21. LAW No. 26,831 CAPITAL MARKETS
22. IMPACT OF CORONAVIRUS
23. SUBSEQUENT EVENTS
24. APPROVAL OF FINANCIAL STATEMENTS
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GRUPO CLARÍN S.A.
GRUPO CLARÍN S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2020,
PRESENTED ON A COMPARATIVE BASIS
(Amounts stated in Argentine Pesos – Note 2.1.1)
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 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 as of December 31, 2020:
− 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 children’s magazine Genios is the children’s
magazine with the highest circulation in Argentina.
− 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.
− Other, consisting mainly of the operations of its subsidiary GCGC, its shared service center.
NOTE 2 - BASIS FOR THE PREPARATION AND PRESENTATION OF THE CONSOLIDATED FINANCIAL
STATEMENTS.
2.1 Basis for the preparation
Through General Resolutions No. 562/09 and No. 576/10, the Argentine Securities Commission (“CNV”, for its
Spanish acronym) provided for the application of Technical Resolutions (“TR”) No. 26 and No. 29 issued by the
Argentine Federation of Professional Councils of Economic Sciences (“FACPCE”, for its Spanish acronym), which
adopt the International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards
Board (“IASB”) for entities subject to the public offering regime governed by Law No. 26,831, whether on account
of their equity or their notes, or which have requested authorization to be subject to such regime. 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, 2020, presented on a
comparative basis, have been prepared in accordance with IFRS. Certain additional matters were included as
required by the Argentine General 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.
In preparing these consolidated financial statements for the year ending December 31, 2020, and for the purposes
of presentation to the London Stock Exchange (LSE), the Company has followed accounting policies that are in
accordance with IFRS.
These consolidated financial statements have been prepared based on restated historical cost, as mentioned in
Note 2.1.1, 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.
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GRUPO CLARÍN S.A.
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 at the meeting held on April 22, 2021,
is presented in Argentine Pesos ($), the Argentine legal tender, and arises from accounting records kept by Grupo
Clarín S.A. and its subsidiaries.
2.1.1 Application of IAS 29 (Financial Reporting in Hyperinflationary Economies)
International Accounting Standard 29 “Financial Reporting in Hyperinflationary Economies” (“IAS 29”) requires
that the financial statements of an entity that reports in the currency of a highly inflationary economy shall be
stated in terms of the measuring unit current at the closing date of the reporting year, regardless of whether they
are based on a historical cost approach or a current cost approach. To this end, in general terms, the inflation
rate must be computed in the non-monetary items as from the acquisition date or the revaluation date, as
applicable. These requirements also comprise the comparative information of the financial statements.
To determine the existence of a highly inflationary economy under the terms of IAS 29, the standard details a
series of factors to consider, including a cumulative inflation rate over three years that is close to or exceeds
100%. This is why, in accordance with IAS 29, Argentine economy should be considered as a highly inflationary
economy as from July 1, 2018.
In addition, Law No. 27,468, published in the Official Gazette on December 4, 2018, amended Section 10 of Law
No. 23,928, as amended, providing that the repeal of all the laws and regulations that establish or authorize price
indexation, currency restatement, cost variance and any other form of restatement of debts, taxes, prices or fees
related to property, works or services, does not apply to financial statements, which remain subject to Section 62
in fine of the General Associations Law No. 19,550 (as restated in 1984), as amended. In addition, it repealed
Decree No. 1,269/2002 dated July 16, 2002, as amended, and delegated on the Executive Branch, through its
oversight agencies, the power to set the date as from which those regulations will come into effect with respect
to financial statements. On December 28, 2018, through General Resolution No. 777/2018, the CNV provided
that the entities subject to the Commission's oversight must apply the method to restate annual, interim and
special financial statements in constant currency, as established by IAS 29, for fiscal years ended on or after
December 31, 2018. Therefore, these financial statements have been restated in constant currency as of
December 31, 2020.
According to IAS 29, the financial statements of an entity that reports in the currency of a highly inflationary
economy shall be stated in terms of the measuring unit current at the closing date of the financial statements.
The inflation adjustment was calculated taking into consideration the indexes established by the FACPCE
based on the price indexes published by the National Institute of Statistics and Census (INDEC, for its Spanish
acronym).
The following table shows the evolution of those indexes over the last three fiscal years, according to official
statistics (INDEC) in accordance with the guidelines described under Resolution No. 539/18:
Index
Price
General
(December 2016=100)
Variation of Prices
Annual
Accumulated over 3 years
As of
December 31,
2018
As of
December 31,
2019
As of
December 31,
2020
184.26
47.6%
147.8%
284.44
53.8%
183.2%
385.88
36.1%
209.2%
The main procedures applied for the above-mentioned inflation adjustment were the following:
-
-
The monetary assets and liabilities recorded at the currency unit of the financial statement are not restated
because they are already stated in terms of the measuring unit current at the closing date of the financial
statements.
The non-monetary assets and liabilities recorded at cost at the date of the financial statement, and the equity
items, are restated by applying the corresponding adjustment coefficients.
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GRUPO CLARÍN S.A.
- All the elements of the Statement of comprehensive income are adjusted by applying the corresponding
-
-
adjustment coefficients.
The effect of inflation on the Company's net monetary position is included in the Statement of comprehensive
income under the item “Gain (Loss) on Net Monetary Position”.
The comparative figures have been restated for inflation following the same procedure explained above and
after that, they were restated as of the date of these financial statements.
The following is a description of the initial application of the inflation adjustment in the most relevant equity
accounts:
-
-
The capital stock was restated since the date of subscription or since the date of the last inflation adjustment
for accounting purposes, whichever occurred later. The difference between the nominal value of the capital
stock and its value restated for inflation is disclosed under “Inflation Adjustment on Capital Stock.”
The paid-in capital was restated since the date of subscription or since the date of the last inflation adjustment
for accounting purposes, whichever occurs later.
- Other comprehensive income was restated since each date of the accounting entry.
-
The other reserves were restated since January 1, 2017, which was the first day of the comparative period
at the time of the initial application of the adjustment for inflation.
2.2 Standards and Interpretations issued but not adopted to date
To date, there are no standards and interpretations issued but not adopted by the Company.
2.3. Standards and Interpretations issued and adopted to date
The Company has adopted the IFRS issued, as per the detail below, because its application is required for fiscal
years beginning:
2.3.1 On or after January 1, 2019
- IFRS 16 "Leases": issued in January 2016. It establishes the principles for the recognition, measurement,
presentation and disclosure of leases.
The Company opted to apply IFRS 16 with the simplified retrospective approach to the operating lease
agreements identified as such under IAS 17, recognizing the accumulated effect of the application as the
adjustment to the opening balance of accumulated income as from January 1, 2019.
The Company recognized the right-of-use assets at an amount equal to the lease liability at the date of the
adoption (equal to the present value of the remaining lease payments), adjusted by the amount of any prepaid or
accrued lease payments as of December 31, 2019.
As of January 1, 2019, the accounting impact of said standard was an increase in non-current assets due to the
initial recognition of right-of-use assets and an increase in liabilities related to the lease agreements executed by
subsidiaries for $ 252.9 million in constant currency as of December 31, 2020. (Note 5.16).
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.
For consolidation purposes, the intercompany transactions and the balances between the Company and the
consolidated subsidiaries have been eliminated. Unrealized income has also been eliminated.
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GRUPO CLARÍN S.A.
Below is a detail of the most significant 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:
.
Direct or Indirect Interest in
the Capital Stock and Votes
(%)
December
31, 2020
December
31, 2019
100.0%
100.0%
99.3%
100.0%
100.0%
100.0%
100.0%
100.0%
99.3%
100.0%
100.0%
100.0%
Companies
AGEA
CIMECO
ARTEAR (1)
IESA
Radio Mitre
GCGC
(1) Interest in votes amounts to 99.7%.
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 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 purpose of the subsequent valuation for the interest
retained as associate, joint operation or financial instrument. Additionally, any amount previously recognized
under 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 under Other
Comprehensive Income may be reclassified to the statement of income.
2.5 Business Combinations
The Company applies the acquisition method of accounting 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 a nd the
equity instruments issued by the Company in exchange for the control of the acquired company. 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, identified
during the measurement period, are adjusted against the acquisition cost.
The measurement period is the effective period that begins on the acquisition date and ends on the date on which
the Company obtains all the information about the facts and circumstances existing on the acquisition date, which
may not extend beyond one year after 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 the statement
of income.
The changes in the fair value of the contingent consideration classified as equity are not recognized.
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GRUPO CLARÍN S.A.
In the cases of business combinations conducted in stages, the Company’s equity interest in the acquiree is
remeasured at fair value on its acquisition date (i.e., the date on which the Company obtained control) and the
resulting gain or loss, if any, is recognized in the statement of income or in other comprehensive income, as
appropriate according to the source of the variation. In the periods preceding the reporting periods, the Company
may have recognized under 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 under 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 the statement of
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 Investments in Associates
An associate is an entity over which the Company has significant influence, without exercising control, generally
accompanied by equity holdings of between 20% and 50% of voting rights.
The associates’ net income and their 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 (loss) 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 the statement of income.
Unrealized gains or losses on transactions between the Company (and its subsidiaries) and 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, restated as mentioned in Note 2.1.1.
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.
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GRUPO CLARÍN S.A.
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 Investments 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,FEASA – S.A. La Nación
Unión Transitoria de Empresas, AGEA S.A. – S.A. La Nación – UTE and Unir S.A. - Correo Andreani S.A. - Unión
Transitoria de Empresas, 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, after the fair value measurement, the Company's share in the fair value of the net identifiable assets of the
acquiree exceeds the amount of the transferred consideration, the amount of any non-controlling interest in such
company and the fair value of the interest previously held by the acquirer in the acquiree (if any), that excess is
immediately recognized in the statement of comprehensive income as income from purchase in very profitable
terms.
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 a subsidiary, the amount attributable to goodwill is included in the calculation of the
gain or loss for retirement.
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:
- 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
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GRUPO CLARÍN S.A.
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.
Digital advertising revenues are recorded according to the price set for each site and section where advertising
is served, considering its placement and format. Revenues from online advertising for sponsorship or fixed
positions are recognized over the term set for the ad, while revenues from online advertising for served print ads
are recognized based on the number of times the ad was displayed on the web.
- Broadcasting and Programming
television 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 and Other Payables.
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 statement of financial position as an obligation under financial leases recorded
under lease liabilities.
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.
Until December 31, 2018, the rentals under operating leases were charged to income on a straight line basis over
the corresponding lease term. As from January 1, 2019, the Company has applied IFRS 16 regarding operating
lease agreements.
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 companies is the Uruguayan Peso.
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GRUPO CLARÍN S.A.
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.
The exchange differences were charged to income (loss) for the period in which they were generated.
In preparing the Company’s consolidated financial statements, asset and liability balances of the entities which
functional currency is not the Argentine peso, expressed in their own functional currency (Uruguayan Peso) are
translated into Argentine pesos at the exchange rate prevailing at the end of the year, while net income is
translated at the exchange rate prevailing on the transaction date. Translation differences are recognized under
other comprehensive income as “Variation in Translation Differences of Foreign Operations”.
2.13 Financial Expenses on Debt
Financial expenses on debt 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 expenses on debt to be capitalized.
All other financial expenses on debt were charged to income (loss) for the period in which they were generated.
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 (loss) 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
under 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 probable 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.
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GRUPO CLARÍN S.A.
The book value of a deferred tax asset is reviewed at each reporting year and reduced to the extent that it is no
longer probable 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.
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.
2.15 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, restated as mentioned in Note 2.1.1, 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, restated as mentioned in Note 2.1.1, less any recognized impairment loss.
The cost includes professional fees and, in the case of qualifying assets, capitalized financial expenses on debt
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 restated 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, restated as mentioned in Note 2.1.1, net of the
corresponding accumulated amortization and impairment losses. Amortization is calculated on a straight line
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GRUPO CLARÍN S.A.
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, restated as
mentioned in Note 2.1.1, 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, restated as mentioned in
Note 2.1.1, 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.
- 18 -
GRUPO CLARÍN S.A.
2.18 Inventories
Inventories are valued at the lower of acquisition cost and/or production cost, restated as mentioned in Note 2.1.1,
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 Charges
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 probable 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.
- 19 -
GRUPO CLARÍN S.A.
2.21 Financial Instruments
Financial assets and liabilities, on initial recognition, are measured at transaction price as of the acquisition date.
Financial assets are derecognized in the financial statement when the rights to receive cash flows from them
have expired or have been transferred and the Company has transferred substantially all the risks and benefits
of ownership.
2.21.1 Financial Assets
Upon initial recognition, in accordance with IFRS 9, financial assets are subsequently measured at either
amortized cost, or fair value, on the basis of:
(a) the Company’s business model for managing the financial assets; and
(b) the contractual cash flow characteristics of the financial asset.
A financial asset shall be measured at amortized cost if both of the following conditions are met:
(a) the asset is held within a business model whose objective is to hold assets in order to collect contractual cash
flows, and
(b) the contractual terms of the financial asset give rise, on specified dates, to cash flows that are solely payments
of principal and interest on the principal amount outstanding.
A financial asset that is not measured at amortized cost according to the paragraphs above is measured at fair
value.
Financial assets include:
Cash and Cash Equivalents
Cash and cash equivalents includes Cash and banks and short-term and highly liquid investments that are readily
convertible into cash, subject to an insignificant risk of changes in value and their original maturity or the remaining
maturity at the date of purchase does not exceed three months.
Cash and cash equivalents are recorded, according to their nature, at fair value or amortized cost.
Investments in mutual funds are carried at fair value. Gains and losses are included in Other Financial Results,
net.
Investments in Government Securities were valued at amortized cost or at fair value, according to the business
model established by the Company.
Balances in foreign currency have been valued as mentioned above, at the exchange rates effective at the closing
of each year. The exchange differences were charged to income for each year.
Trade and Other Receivables
Trade and other receivables classified as either current or non-current assets are initially recognized at fair value
and subsequently measured at amortized cost using the effective interest method, less allowances for doubtful
accounts. Interest income is recognized using the effective interest rate method, except for short-term balances
for which the recognition of interest is not significant.
Balances in foreign currency have been valued as mentioned above, at the exchange rates effective at the closing
of each year. The exchange differences were charged to income for each year.
Investments
Depending on the business model adopted by Management, Securities and Bonds may be valued at amortized
cost or at fair value and its results are recognized under Other Financial Results, net.
- 20 -
GRUPO CLARÍN S.A.
Balances in foreign currency have been valued as mentioned above, at the exchange rates effective at the closing
of each year. The exchange differences were charged to income for each year.
Impairment of Financial Assets
At the time of initial recognition of financial assets (and at each closing), the Company estimates the expected
losses, with an early recognition of a provision, pursuant to IFRS 9.
In the case of trade receivables, as from January 1, 2018, the Company measures the allowance for bad debts
in an amount equal to the lifetime expected credit losses.
The expected losses to be recognized are calculated based on a percentage of uncollectibility per maturity ranges
of each financial credit. For such purposes, the Company analyzes the performance of the financial assets
grouped by type of market. Said historical percentage must contemplate the future collectibility expectations
regarding those credits and, therefore, those estimated changes in performance.
Given the nature of Other receivables, the Company conducts an uncollectibility analysis for each case in
particular.
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 comprise trade and other payables, financial debt, and certain liabilities included in Other
Liabilities.
Financial liabilities are initially recognized at fair value and subsequently measured at amortized cost. Amortized
cost represents the initial amount net of principal repayments made, adjusted by the amortization of any
differences between the initial amount and the maturity amount using the effective interest method.
Balances in foreign currency have been valued as mentioned above, at the exchange rates effective at the closing
of each year. The exchange differences were charged to income for each year.
Derecognition of Financial Liabilities
The Company 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, canceled or expires.
2.21.3 Derivatives
Derivatives, if any, 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 the statement of 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.
2.22 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.
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GRUPO CLARÍN S.A.
2.23 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.
2.24 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 “Financial Debt” in the consolidated statement of financial position.
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 statement of financial position as follows:
Cash and Banks
Short-term investments with original maturities shorter than
90 days
Total
1,294,110,858
2,049,884,020
1,493,131,971
2,787,242,829
961,956,998
3,011,841,018
December 31,
2020
December 31,
2019
In the years ended December 31, 2020 and 2019, the following significant transactions were carried out, which
did not have an impact on cash and cash equivalents:
Settlement of trade receivables through government bonds
Capital Contributions in Associates through Capitalization of
Loans
New right-of-use assets owed
57,895,816
-
71,777,899
-
51,153,865
63,715,864
December 31,
2020
December 31,
2019
2.25 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. In addition, and in accordance with IFRS 9, for the calculation of the allowance for bad
debts on trade receivables the Company considers the expected credit losses over their total useful life.
- 22 -
GRUPO CLARÍN S.A.
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 probable 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 probable 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
- 23 -
GRUPO CLARÍN S.A.
business segments have been identified, which are directly related to the way in which the Company assesses
its business performance:
− Printing and Publishing: mainly comprises the operations of its subsidiary AGEA and its subsidiaries Cúspide,
Tinta Fresca (a company merged into AGEA effective as of January 1, 2018), the printing business of OSA,
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, Pol-Ka, Auto Sports, and Carburando.
− Other: mainly comprises the operations of its controlled company GCGC. Additionally, this segment includes
the Company’s own operations (typical of a holding company) and those carried out by its controlled
companies OSA (except those related to the printing business), FEASA and AGEA S.A. – S.A. La Nación -
UTE.
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 information as of December 31, 2020 and 2019 was prepared in accordance with IFRS, except for
the non-application of IAS 29, due to the fact that the Board of Directors analyzes the information in historical
currency for the business segments identified by the Company.
Note 1 to these consolidated financial statements includes additional information about the Company’s
businesses.
- 24 -
GRUPO CLARÍN S.A.
Information arising from Consolidated Income
Statements as of December 31, 2020
Printing and
publishing in
historical
currency
Printing and
publishing
restated in
constant
currency
Broadcasting
and
programming
in historical
currency
Broadcasting
and
programming
restated in
constant
currency
Other in
Historical
Currency
Other restated
in constant
currency
Eliminations
(1)
Total
consolidated
results
restated in
constant
currency
Net Sales to Third Parties (2)
10,507,116,384
12,266,269,561
11,187,544,493
13,060,618,295
1,124,501,460
1,312,771,033
-
26,639,658,889
Intersegment Sales
Net Sales
Cost of sales -excluding depreciation and amortization
Subtotal
Expenses - excluding depreciation and amortization
Selling Expenses
Administrative Expenses
Adjusted EBITDA
Depreciation of Property, Plant and Equipment
Amortization of Intangible Assets and Film Library (3)
Amortization of Right-of-Use Assets
Other Income and Expenses, net
Financial Expenses on Debt
Loss on Net Monetary Position
Other Financial Results, net
Financial Results
Equity in Earnings from Associates
Income Tax
Net Loss for the Year
Additional consolidated information as of December
31, 2020
Payments for Acquisition of Property, Plant and Equipment
Payments for Acquisition of Intangible Assets
238,187,363
278,065,865
56,979,877
66,519,729
893,690,300
1,043,316,332
(1,387,901,926)
-
10,745,303,747
12,544,335,426
11,244,524,370
13,127,138,024
2,018,191,760
2,356,087,365
(1,387,901,926)
26,639,658,889
(5,824,517,316)
4,920,786,431
(6,799,686,693)
5,744,648,733
(6,476,117,452)
4,768,406,918
(7,560,380,933)
5,566,757,091
(1,413,547,841)
604,643,919
(1,650,210,983)
705,876,382
449,083,915
(938,818,011)
(15,561,194,694)
11,078,464,195
(2,833,093,700)
(1,625,841,795)
461,850,936
(3,307,424,201)
(1,898,048,236)
539,176,296
(450,839,626)
(1,929,748,063)
2,387,819,229
(526,321,417)
(2,252,835,988)
2,787,599,686
(91,869,566)
(582,384,570)
(69,610,217)
(107,250,819)
(679,890,264)
(81,264,701)
223,244,408
715,573,603
-
(3,717,752,029)
(4,115,200,885)
3,245,511,281
(924,465,523)
(321,669,554)
(109,326,600)
(1,220,820,137)
(786,702,632)
(181,632,242)
(44,206,620)
(1,012,541,494)
579,392,288
(701,130,812)
(465,050,551)
159,044,559
137,721,916
185,672,582
160,779,998
185,693,620
8,987,777
216,720,320
10,492,555
37,139,972
1,597,781
43,358,129
1,865,315
-
-
445,751,031
173,137,868
(1) Eliminations are related to Grupo Clarín’s intercompany operations.
(2) Includes also sales to unconsolidated companies.
(3) Amortization of film rights acquired in perpetuity, mentioned in Note 2.18.
- 25 -
GRUPO CLARÍN S.A.
Information arising from Consolidated Income
Statements as of December 31, 2019
Printing and
publishing in
historical
currency
Printing and
publishing
restated in
constant
currency
Broadcasting
and
programming
in historical
currency
Broadcasting
and
programming
restated in
constant
currency
Other in
Historical
Currency
Other restated
in constant
currency
Eliminations
(1)
Total
consolidated
results
restated in
constant
currency
Net Sales to Third Parties (2)
10,086,395,742
16,722,433,332
9,452,851,235
15,672,067,469
1,342,139,149
2,225,158,820
-
34,619,659,621
Intersegment Sales
Net Sales
Cost of sales -excluding depreciation and amortization
Subtotal
Expenses - excluding depreciation and amortization
Selling Expenses
Administrative Expenses
Adjusted EBITDA
Depreciation of Property, Plant and Equipment
Amortization of Intangible Assets and Film Library (3)
Amortization of Right-of-Use Assets
Other Income and Expenses, net
Financial Expenses on Debt
Loss on Net Monetary Position
Other Financial Results, net
Financial Results
Equity in Earnings from Associates
Income Tax
Net Loss for the Year
Additional Consolidated Information as of December
31, 2019
Payments for Acquisition of Property, Plant and Equipment
Payments for Acquisition of Intangible Assets
192,523,512
319,188,506
45,780,842
75,900,956
865,485,722
1,434,905,754
(1,829,995,216)
-
10,278,919,254
17,041,621,838
9,498,632,077
15,747,968,425
2,207,624,871
3,660,064,574
(1,829,995,216)
34,619,659,621
(5,962,236,714)
4,316,682,540
(9,884,909,191)
7,156,712,647
(6,044,435,364)
3,454,196,713
(10,021,187,943)
5,726,780,482
(1,568,040,664)
639,584,207
(2,599,685,371)
1,060,379,203
730,755,396
(1,099,239,820)
(21,775,027,109)
12,844,632,512
(2,879,352,339)
(1,514,159,687)
(76,829,486)
(4,773,734,718)
(2,510,355,043)
(127,377,114)
(470,345,847)
(1,330,992,850)
1,652,858,016
(779,795,605)
(2,206,679,151)
2,740,305,726
(233,862,394)
(625,198,666)
(219,476,853)
(387,725,050)
(1,036,529,129)
(363,874,976)
355,896,508
743,343,312
-
(5,585,358,865)
(5,010,220,011)
2,249,053,636
(975,862,572)
(382,003,116)
(166,821,845)
(109,696,062)
(1,508,238,150)
(257,693,476)
(165,477,976)
(1,931,409,602)
239,258,524
(908,949,994)
(1,986,431,031)
156,835,460
83,558,549
260,020,586
138,533,357
436,397,397
15,049,709
723,511,804
24,951,208
22,174,264
2,918,097
36,763,146
4,837,965
-
-
1,020,295,536
168,322,530
(1) Eliminations are related to Grupo Clarín’s intercompany operations.
(2) Includes also sales to unconsolidated companies.
(3) Amortization of film rights acquired in perpetuity, mentioned in Note 2.18.
- 26 -
GRUPO CLARÍN S.A.
NOTE 5 - BREAKDOWN OF THE MAIN ITEMS OF THE STATEMENT OF FINANCIAL POSITION
5.1 Property, Plant and Equipment
Main Account
Balance at the
Beginning
Additions
Retirements
Transfers
Balances as of
December 31, 2020
Original value
Real Property (1)
Furniture and Fixtures
Telecommunication, Audio and
Video Equipment
8,714,508,321
1,409,734,133
8,611,650
1,239,638
(17,697)
-
1,048,655,500
9,771,775,471
-
-
1,410,956,074
5,045,752,636
5,032,718,825
25,261,730
(12,227,919)
Computer Equipment (2)
6,480,419,255
221,054,020
(35,727,553)
(1,836,857)
6,663,908,865
Technical Equipment
Workshop Machinery
Tools
Spare Parts
Installations
Vehicles
760,299,415
5,102,881,617
2,524,200
279,190,519
5,517,277
5,680,957
8,412,038
-
(409,753)
-
765,406,939
-
149,205,832
5,257,768,406
(1,556,553)
-
-
-
9,379,685
279,190,519
4,917,024,971
22,118,745
(5,228,179)
13,096,247
4,947,011,784
189,416,607
4,691,194
(18,334,860)
-
175,772,941
Works-In-Progress
1,332,822,789
125,191,254
(43,905,418)
(1,234,331,433)
179,777,192
Leasehold Improvements
Allowance for Impairment of
Property, Plant and Equipment and
Obsolescence of Materials
615,295,058
17,972,528
(10,345,785)
5,822,731
628,744,532
(49,585,409)
-
18,907,372
-
(30,678,037)
Total as of December 31, 2020
34,787,250,301
445,751,031
(108,846,345)
(19,387,980)
35,104,767,007
Main Account
Balance at the
Beginning
Retirements
and Transfers
For the year
Balances as of
December 31,
2020
Net Book Value
as of December
31, 2020
Accumulated Depreciation
Real Property (1)
Furniture and Fixtures
Telecommunication, Audio and
Video Equipment
4,575,650,383
1,289,475,758
-
148,604,076
4,724,254,459
5,047,521,012
(17,705)
23,868,273
1,313,326,326
97,629,748
4,549,826,234
(3,486,066)
143,732,248
4,690,072,416
355,680,220
Computer Equipment (2)
5,948,458,556
(36,547,091)
352,266,792
6,264,178,257
399,730,608
Technical Equipment
Workshop Machinery
Tools
Spare Parts
Installations
Vehicles
700,231,433
4,800,523,570
2,445,357
255,124,247
-
-
-
-
16,553,613
716,785,046
48,621,893
84,113,401
4,884,636,971
373,131,435
33,867
2,479,224
14,331,724
269,455,971
6,900,461
9,734,548
4,421,128,466
(3,833,791)
111,191,135
4,528,485,810
418,525,974
150,930,422
(13,328,074)
11,141,278
148,743,626
27,029,315
Works-In-Progress
-
-
-
-
179,777,192
Leasehold Improvements
Allowance for Impairment of
Property, Plant and Equipment and
Obsolescence of Materials
535,825,800
(10,346,230)
18,629,116
544,108,686
84,635,846
(27,274,944)
10,563,717
-
(16,711,227)
(13,966,810)
Total as of December 31, 2020
27,202,345,282
(56,995,240)
924,465,523
28,069,815,565
7,034,951,442
(1) includes $759 million for the fiscal year ended December 31, 2020, corresponding to real property retired from active use.
(2) includes $ 27 million acquired under a lease agreement.
- 27 -
Computer Equipment
Technical Equipment
Workshop Machinery
Tools
Spare Parts
Installations
Vehicles
Works-In-Progress
Leasehold Improvements
GRUPO CLARÍN S.A.
Main Account
Real Property (1)
Furniture and Fixtures
Balance at the
Beginning
8,550,294,496
1,400,606,968
Telecommunication, Audio and Video Equipment
4,996,047,302
Original value
Additions
Retirements
Transfers
Balances as of
December 31, 2019
558,163
(2,833,652)
166,489,314
8,714,508,321
10,209,644
51,800,021
(1,082,479)
(15,128,498)
-
-
1,409,734,133
5,032,718,825
Computer Equipment
Technical Equipment
Workshop Machinery
Tools
Spare Parts
Installations
Vehicles
6,220,449,734
280,625,322
(38,771,558)
18,115,757
6,480,419,255
750,508,648
9,790,767
4,995,012,165
108,540,685
3,096,805
279,190,519
4,866,128,876
174,716,317
-
-
49,156,682
22,589,614
-
(671,233)
(572,605)
-
-
-
-
-
760,299,415
5,102,881,617
2,524,200
279,190,519
(428,634)
2,168,047
4,917,024,971
(7,889,324)
-
189,416,607
Works-In-Progress
1,050,706,430
468,889,477
Leasehold Improvements
597,159,897
18,135,161
-
-
Allowance for Impairment of Property, Plant and
Equipment and Obsolescence of Materials
-
-
(49,585,409)
Total as of December 31, 2019
33,883,918,157
1,020,295,536
(116,963,392)
(186,773,118)
1,332,822,789
-
-
-
-
615,295,058
(49,585,409)
34,787,250,301
Main Account
Balance at the
Beginning
Retirements and
Transfers
For the year
Balances as of
December 31,
2019
Net Book Value as
of December 31,
2019
Accumulated Depreciation
Real Property (1)
Furniture and Fixtures
4,434,751,079
1,265,013,416
-
140,899,304
4,575,650,383
4,138,857,938
(788,502)
25,250,844
1,289,475,758
Telecommunication, Audio and Video Equipment
4,401,630,869
(18,404,306)
166,599,671
4,549,826,234
5,618,891,233
(38,763,977)
368,331,300
5,948,458,556
682,485,154
3,581,884
14,164,395
700,231,433
4,731,179,219
2,905,986
232,707,030
(671,233)
(606,113)
70,015,584
4,800,523,570
145,484
2,445,357
-
22,417,217
255,124,247
4,282,287,451
(373,869)
139,214,884
4,421,128,466
147,457,884
(7,889,327)
11,361,865
150,930,422
120,258,375
482,892,591
531,960,699
60,067,982
302,358,047
78,843
24,066,272
495,896,505
38,486,185
-
518,363,776
-
-
-
-
1,332,822,789
17,462,024
535,825,800
79,469,258
Allowance for Impairment of Property, Plant and
Equipment and Obsolescence of Materials
-
(27,274,944)
-
(27,274,944)
(22,310,465)
Total as of December 31, 2019
26,317,673,097
(91,190,387)
975,862,572
27,202,345,282
7,584,905,019
(1) includes $787 million for the fiscal year ended December 31, 2019, corresponding to real property retired from active use.
The following table details the average years of useful life of the items comprising Property, Plant and
Equipment:
Item
Real Property
Furniture and Fixtures
Average
Useful Life
(in years)
50
10
Telecommunication, Audio and Video Equipment
between 3 and 4
External Network and Broadcasting Equipment
between 3 and 20
Computer Equipment
Technical Equipment
Workshop Machinery
Tools
Spare Parts
Installations
Vehicles
Plots
3
between 4 and 10
10
5
5
between 3 and 10
5
5
Leasehold Improvements
between 3 and 10
- 28 -
GRUPO CLARÍN S.A.
5.2 Intangible Assets
Original value
Main Account
Exploitation Rights and Licenses
Exclusivity Agreements
Other Rights
Acquisition Value of Subscriber Portfolio
Software
Trademarks and Patents
Projects in-Progress
Other
Allowance for Impairment of Intangible Assets
Balance at the
Beginning
171,404,395
307,933,136
802,281,954
72,233,112
2,470,933,999
282,093,276
79,710,450
678,862,941
(352,358,541)
Additions
Retirements
Transfers
538,327
-
4,430,748
-
102,488,187
3,119,979
62,560,627
-
-
-
-
-
-
-
-
-
-
10,277,882
-
-
-
-
18,832,209
-
555,771
-
-
Balances as of
December 31,
2020
171,942,722
307,933,136
806,712,702
72,233,112
2,592,254,395
285,213,255
142,826,848
678,862,941
(342,080,659)
Total as of December 31, 2020
4,513,094,722
173,137,868
10,277,882
19,387,980
4,715,898,452
Main Account
Exploitation Rights and Licenses
Exclusivity Agreements
Other Rights
Acquisition Value of Subscriber Portfolio
Software
Trademarks and Patents
Projects in-Progress
Other
Allowance for Impairment of Intangible Assets
Balance at the
Beginning
130,864,596
273,928,356
681,111,547
72,233,112
2,184,585,738
120,457,580
-
663,149,999
(190,418,745)
Accumulated Depreciation
Retirements
For the year
Balances as of
December 31,
2019
Net Book Value
as of December
31, 2020
-
-
-
-
1,392,000
-
-
-
-
41,078,126
9,076,990
57,765,286
-
198,920,057
11,522,144
-
2,445,574
-
171,942,722
283,005,346
738,876,833
72,233,112
2,384,897,795
131,979,724
-
665,595,573
(190,418,745)
-
24,927,790
67,835,869
-
207,356,600
153,233,531
142,826,848
13,267,368
(151,661,914)
Total as of December 31, 2020
3,935,912,183
1,392,000
320,808,177
4,258,112,360
457,786,092
Main Account
Exploitation Rights and Licenses
Exclusivity Agreements
Other Rights
Acquisition Value of Subscriber Portfolio
Software
Trademarks and Patents
Projects in-Progress
Other
Allowance for Impairment of Intangible Assets
Balance at the
Beginning
215,361,471
241,205,166
720,921,638
72,233,112
2,399,054,850
345,848,037
128,008,272
759,686,385
-
Original value
Additions
Retirements
Transfers
Balances as of
December 31,
2019
15,665,919
-
21,737,510
-
71,763,999
2,973,199
56,104,005
77,898
-
-
-
-
-
(87,474,176)
-
(16,794,694)
(80,919,328)
(352,358,541)
(59,622,995)
66,727,970
59,622,806
-
87,589,326
(66,727,960)
(87,607,133)
17,986
-
171,404,395
307,933,136
802,281,954
72,233,112
2,470,933,999
282,093,276
79,710,450
678,862,941
(352,358,541)
Total as of December 31, 2019
4,882,318,931
168,322,530
(537,546,739)
-
4,513,094,722
Main Account
Balance at the
Beginning
Retirements and
Transfers
For the year
Balances as of
December 31,
2019
Net Book Value
as of December
31, 2019
Accumulated Depreciation
Exploitation Rights and Licenses
Exclusivity Agreements
Other Rights
Acquisition Value of Subscriber Portfolio
Software
Trademarks and Patents
Projects in-Progress
Other
Allowance for Impairment of Intangible Assets
128,722,423
221,336,750
619,436,685
72,233,112
1,955,996,201
146,809,486
-
736,731,723
-
(38,404,304)
34,951,192
38,404,302
-
(54,628,540)
(34,951,192)
-
(80,901,486)
(190,418,745)
40,546,477
17,640,414
23,270,560
-
283,218,077
8,599,286
-
7,319,762
-
130,864,596
273,928,356
681,111,547
72,233,112
2,184,585,738
120,457,580
-
663,149,999
(190,418,745)
40,539,799
34,004,780
121,170,407
-
286,348,261
161,635,696
79,710,450
15,712,942
(161,939,796)
Total as of December 31, 2019
3,881,266,380
(325,948,773)
380,594,576
3,935,912,183
577,182,539
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
10
between 3 and 5
between 3 and 10
between 3 and 20
- 29 -
GRUPO CLARÍN S.A.
5.3 Goodwill
The 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 real discount rate applied to the projected
cash flows of Telecor, Pol-Ka, Telba and Bariloche TV is of approximately 11.8%.
Main Account
Net Balances as
of December 31,
2020
Net balances as
of December 31,
2019
Telecor (1)
Pol-Ka (1)
Telba (1)
Bariloche TV (1)
Other
Total
-
-
-
-
22,073,350
22,073,350
911,236,090
215,870,505
87,791,700
30,804,968
22,073,350
1,267,776,613
(1)
In this fiscal year, an allowance was set up in connection with the goodwill of Pol-Ka, Telba, Telecor and Bariloche TV based on the situations
described under Note 22.
5.4. Investments in Unconsolidated Affiliates
Main business activity
Country
Interest (%)
(1)
Value
Recorded as
of December
31, 2020
Value
Recorded as
of December
31, 2019
Included in assets
Interest in Associates
Papel Prensa
Other Investments
Interests in Joint
Ventures
TSC
TRISA
Canal Rural
Impripost
AGL
Exponenciar
Ríos de Tinta
Patagonik
Manufacturing of Newsprint
Argentina
49.00
1,075,872,478
51,648,780
1,049,314,872
47,699,070
Exploitation of events television
broadcasting rights
Production and exploitation of sports
events, advertising agency and
financial and investing operations
Audiovisual production and sale of
advertising
Variable printing
Printing
Organization, holding, production and
commercial exploitation of exhibitions
and events, and/or promotion and/or
advertising for the purposes of
promoting various activities
Editorial activities
Film producer
Argentina
50.00
18,019,199
21,387,445
Argentina
50.00
1,041,280,729
682,120,184
Argentina
64.99
51,973,009
29,559,374
Argentina
Argentina
Argentina
50.00
50.00
50.00
75,975,576
72,193,334
57,497,272
29,010,034
86,352,701
48,423,543
Mexico
Argentina
50.00
33.33
88,962,550
155,202,919
77,264,716
192,559,886
2,688,625,846
2,263,691,825
(1)
Equity participation in capital and votes
- 30 -
GRUPO CLARÍN S.A.
Equity in Earnings from Associates
Papel Prensa
TRISA
AGL
Canal Rural
Ríos de Tinta
Impripost
Other Companies
December
31, 2020
December 31,
2019
26,712,476
(1,063,169)
464,929,177
297,572,221
(13,974,075)
(5,680,756)
22,413,635
2,339,844
9,575,620
16,006,132
46,965,541
(100,077,161)
22,769,914
30,161,413
579,392,288
239,258,524
The following is a detail of certain supplementary information required by IFRS about interests in associates
(amounts stated in millions of Argentine pesos):
December 31,
2020
December 31,
2019
Dividends received
Summarized financial information:
Current Assets
Non-Current Assets
Current Liabilities
Non-Current Liabilities
Revenues
Net Income (Loss) from Continuing Operations
Total Comprehensive (Loss) / Income
4
2,002
3,339
2,306
807
5,459
(41)
(41)
10
1,984
3,160
2,091
881
5,293
46
46
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 Financial Debt
Other Current Liabilities
Current Liabilities
Non-Current Financial Debt
Other Non-Current Liabilities
Non-Current Liabilities
Revenues
Depreciation and Amortization
Interest Income
Interest on Financial Debt
Income Tax
Net Income (Loss) from Continuing Operations
Other Comprehensive Income
Total Comprehensive (Loss) / Income
December 31,
2020
106
December 31,
2019
182
1,073
2,664
3,737
900
223
2,041
2,264
19
306
325
8,928
(154)
54
(29)
(489)
456
3
459
1,873
2,062
3,935
1,310
121
1,954
2,075
-
231
231
7,326
(155)
25
(12)
(637)
1,066
-
1,066
- 31 -
GRUPO CLARÍN S.A.
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
Finished Goods
Film Products and Rights
Subtotal
Less: Allowance for Impairment of Inventories
5.7 Other Assets
Non-Current
Works of Art
Other
Current
Other
December 31,
2020
December 31,
2019
13,437,910
13,437,910
-
-
723,347,593
450,970,108
769,784,378
1,944,102,079
218,870,406
90,751
743,086,592
962,047,749
December 31,
2020
December 31,
2019
23,431,318
23,431,318
24,474,982
24,474,982
589,246,914
358,008,071
187,626,854
1,134,881,839
(21,225,862)
1,113,655,977
885,135,320
521,546,821
406,015,736
1,812,697,877
(26,205,297)
1,786,492,580
December 31,
2020
December 31,
2019
7,840,577
37,559,001
45,399,578
10,327,901
36,299,026
46,626,927
112,763,146
112,763,146
162,151,304
162,151,304
- 32 -
GRUPO CLARÍN S.A.
5.8 Other Receivables
Non-Current
Tax Credits
Deposits in Guarantee
Advances
Related Parties (Note 15)
Other
Allowance for Other Bad Debts
Current
Tax Credits
Court-ordered and Guarantee Deposits
Prepaid Expenses
Advances
Related Parties (Note 15)
Sundry Receivables
Other
Allowance for Other Bad Debts
5.9 Trade Receivables
Non-Current
Trade Credits
Current
Trade Credits
Related Parties (Note 15)
Allowance for Bad Debts
5.10 Cash and Banks
Cash and Imprest Funds
Banks
5.11. Provisions and Other Charges
Non-Current
Provisions for Lawsuits and Contingencies
Accrual for Asset Retirement
December 31,
2020
December 31,
2019
93,993,028
14,290,715
1,125,762
4,200
1,580,271
(4,068,418)
106,925,558
315,414,855
3,349,947
2,209,378
39,826,840
3,519,188
(6,308,345)
358,011,863
1,599,283,807
16,661,626
87,861,000
250,280,937
81,180,974
23,685,157
96,274,040
(45,878,911)
2,109,348,630
1,603,093,932
30,634,962
94,314,646
158,698,573
86,961,991
33,200,361
146,443,514
(68,005,575)
2,085,342,404
December 31,
2020
December 31,
2019
7,208,574
7,208,574
56,852,857
56,852,857
7,711,721,432
627,748,441
(463,282,025)
7,876,187,848
7,549,467,414
707,040,203
(358,544,481)
7,897,963,136
December 31,
2020
17,955,442
1,276,155,416
1,294,110,858
December 31,
2019
54,770,974
1,995,113,046
2,049,884,020
December 31,
2020
December 31,
2019
1,050,888,605
32,106,370
1,082,994,975
1,056,169,178
29,142,415
1,085,311,593
- 33 -
GRUPO CLARÍN S.A.
5.12 Financial Debt
Non-Current
Financial Debt
For Acquisition of Equipment
Current
Bank Overdraft
Financial Debt
For Acquisition of Equipment
Related Parties (Note 15)
Interest and Restatement
December 31,
2020
December 31,
2019
1,410,142,855
29,541,907
1,439,684,762
1,223,406,971
712,292
1,224,119,263
118,144,868
101,202,181
19,572,475
17,086,921
17,330,254
273,336,699
488,695,286
780,106,699
9,274,132
19,861,681
25,573,828
1,323,511,626
The following table details the changes in loans and indebtedness for the year ended December 31, 2020 and
2019:
Balances as of January 1
New Loans and Financing(1)
Accrued Interest
Exchange rate fluctuations
RECPAM, Cumulative Translation Adjustment and Other
Movements
Payment of Interest
Payment of Principal
Balances as of December 31
2020
2019
2,547,630,889
933,398,590
255,212,362
519,521,995
2,456,017,719
3,148,261,279
823,321,961
582,934,026
(644,994,409)
(278,696,015)
(1,619,051,951)
(1,184,886,350)
(828,114,475)
(2,449,903,271)
1,713,021,461
2,547,630,889
(1) Mostly loans for the payment of debt with upcoming maturity, and for the purchase of capital assets and inventories.
The following table summarizes the maturities of consolidated loans (undiscounted values) at year-end:
Non-Current Financial Debt
Due
From 1 to 2
years
From 2 to 3
years
Total Non-
Current
Financial Debt
For Acquisition of Equipment
1,334,407,855
25,037,398
75,735,000
4,504,509
1,410,142,855
29,541,907
Total as of December 31, 2020
1,359,445,253
80,239,509
1,439,684,762
Current Financial Debt
Up to 3
months
From 3 to 6
months
From 6 to 9
months
From 9
months to 1
year
Total Current
Due
Bank Overdraft
Financial Debt
Loans - Interest and Restatement
For Acquisition of Equipment
Related Parties
118,144,868
76,679,138
17,330,254
4,067,611
-
-
5,032,504
-
4,928,008
17,086,921
-
15,942,208
-
5,148,340
-
-
3,548,331
-
5,428,516
-
118,144,868
101,202,181
17,330,254
19,572,475
17,086,921
Total as of December 31, 2020
216,221,871
27,047,433
21,090,548
8,976,847
273,336,699
The following are the main items of the Group's financial debt:
- 34 -
GRUPO CLARÍN S.A.
5.12.1 AGEA and Subsidiaries
As of December 31, 2020, OSA, UNIR and CIMECO executed overdraft facility agreements with banks for a
maximum of $ 2.6 million, $ 55 million and $ 20 million, respectively, which accrue interest at a fixed nominal
annual rate of between 37.0% and 49%. DLA and LVI executed overdraft facility agreements with banks for up
to $ 66 million and $ 100 million, respectively, which accrue interest at a fixed nominal annual rate of between
37.5% and 49.0%.
On July 5, 2019, AGEA executed a loan agreement with Industrial and Commercial Bank of China (Argentina)
S.A. (“ICBC Argentina”) for US$ 157,902, due on January 6, 2020, which accrued interest on a monthly basis
at an annual fixed rate of 8.01%. Principal and interest were repaid at maturity.
On July 11, 2019, AGEA executed a loan agreement with ICBC Argentina for US$ 118,160, due on January
10, 2020, which accrued interest on a monthly basis at an annual rate equivalent to LIBOR plus 5.85%. Principal
and interest were repaid at maturity.
On July 17, 2019, AGEA executed a loan agreement with ICBC Argentina for US$ 299,980, due on January
15, 2020, which accrued interest on a monthly basis at an annual rate equivalent to LIBOR plus 5.85%. Principal
and interest were repaid at maturity.
On July 29, 2019, AGEA executed a loan agreement with ICBC Argentina for US$ 161,096, due on January
27, 2020, which accrued interest on a monthly basis at an annual rate equivalent to LIBOR plus 5.80%. Principal
and interest were repaid at maturity.
On August 1, 2019, AGEA executed a loan agreement with ICBC Argentina for US$ 299,155, due on January
31, 2020, which accrued interest on a monthly basis at an annual rate equivalent to LIBOR plus 5.90%. Principal
and interest were repaid at maturity.
AGEA complied with certain obligations and covenants undertaken under the loans granted by ICBC.
On September 5, 2019, LVI executed a loan agreement with JPMorgan Chase Bank, NA (“JPM”) for US$ 4.5
million. Said loan accrues interest at an annual rate equivalent to LIBOR plus 0.9% on the outstanding amount
of the loan, payable on a quarterly basis. Principal is due at maturity, i.e. on July 31, 2022. During this year,
JPM made a disbursement of US$ 4 million under the loan.
On October 22, 2019, AGEA executed a loan agreement with JPM for US$ 4.5 million due on July 31, 2022.
Said loan accrues interest at an annual rate equivalent to LIBOR plus 0.9% on the outstanding amount of the
loan, payable on a quarterly basis. During this period, said company prepaid principal in the amount of US$
124,000.
On February 4, 2020, DLA executed a loan agreement with JPM for US$ 0.9 million. Said loan accrues interest
at an annual rate equivalent to LIBOR plus 0.9% on the outstanding amount of the loan, payable on a quarterly
basis. Principal is due at maturity, i.e. on July 31, 2022. During this period, JPM disbursed the full loan amount.
On April 24, 2020, LVI entered into a loan agreement with Banco Macro S.A. for $ 6.2 million ($ 7.7 million in
constant currency as of December 31, 2020), with a 6-month term, which accrues interest on a monthly basis
at an annual fixed rate of 34%. Principal and interest are payable in 3 consecutive monthly installments. The
first installment was due on August 17, 2020.
On May 8, 2020, LVI entered into a loan agreement with Banco de Córdoba S.A. for $ 5 million ($ 6.1 million in
constant currency as of December 31, 2020), with a 12-month term, which accrues interest on a monthly basis
at an annual fixed rate of 29%. Principal and interest are payable in 9 consecutive monthly installments. The
first installment was due on September 7, 2020.
On July 29, 2020, UNIR executed a loan agreement with Banco de la Ciudad de Buenos Aires for $ 36,282,358
($ 42,658,961 in constant currency as of December 31, 2020). Said loan accrues interest at an average annual
rate equivalent to BADCOR plus 3% on the outstanding amount of the loan, payable on a quarterly basis.
Principal will be repaid in three consecutive semi-annual installments. The first installment is due on January
20, 2021. As collateral for such loan, UNIR delivered government securities “Debt Securities issued by the City
of Buenos Aires under Law No. 6,282” for a nominal value of $ 40,313,731 .($ 47,398,845 in constant currency
- 35 -
GRUPO CLARÍN S.A.
as of December 31, 2020). That company is the holder of all the creditor's rights. In addition, UNIR undertook
certain obligations and covenants under the above-mentioned loan.
On October 1, 2020, within the framework of the Emergency Assistance Program for Work and Production,
Banco de Galicia y Buenos Aires S.A.U. granted UNIR a loan at subsidized rate for $ 5 million ($ 5.4 million in
constant currency as of December 31, 2020) for the payment of salaries. Such loan will accrue interest at an
annual fixed rate of 15%, payable in 15 equal consecutive monthly installments. The first installment of principal
and interest is due on February 1, 2021.
On November 19, 2020 and December 17, 2020, within the framework of the Emergency Assistance Program
for Work and Production, Banco Santander Rio S.A. granted DLA loans at subsidized rate for the payment of
salaries for $ 2.5 million ($ 2.6 million in constant currency as of December 31, 2020) and $ 2.7 million,
respectively. The loans accrue interest at an annual fixed rate of 15% and 27%, respectively, payable in 12
equal, consecutive monthly installments.
On December 17, 2020, Banco de Galicia y Buenos Aires S.A.U. granted UNIR a loan at a subsidized rate for
$ 5 million for the payment of salaries. Such loan will accrue interest at an annual fixed rate of 15%, payable in
15 equal consecutive monthly installments. The first installment of principal and interest was due on January
18, 2021.
5.12.2 GCGC and Subsidiaries
On February 26, 2018, GCGC executed a loan agreement with Banco Santander Rio S.A. for $ 2.5 million
($ 7.4 million in constant currency as of December 31, 2020), to purchase hardware for digitalization. The term
is of 36 (thirty six) months. Principal will be repaid in 12 (twelve) equal quarterly installments. 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.
On March 13, 2018, GCGC executed a loan agreement with Banco Santander Rio S.A. for $ 2 million ($ 5.8
million in constant currency as of December 31, 2020) to purchase hardware for digitalization. The term is of
36 (thirty six) months. Principal will be repaid in 12 (twelve) equal quarterly installments. 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.
On September 5, 2019, GCGC executed a loan agreement with JPM for US$ 3 million, due on July 31, 2022.
Said loan accrues interest at a rate equivalent to LIBOR plus 0.9%. Interest is calculated on outstanding
balances and is payable on a quarterly basis.
On October 22, 2019, GCGC executed a loan agreement with JPM for US$ 1 million, due on July 31, 2022.
Said loan accrues interest at a rate equivalent to LIBOR plus 0.9%. Interest is calculated on outstanding
balances and is payable on a quarterly basis.
On January 13, 2020, GCGC executed a loan agreement with JPM for US$ 800,000, due on December 31,
2022. Said loan accrues interest at a rate equivalent to LIBOR plus 0.9%. Interest is calculated on outstanding
balances and is payable on a quarterly basis.
During December 2020, GCGC and Banco Itaú Argentina S.A. entered into a lease-purchase agreement for
computing equipment for $ 26.7 million. Such loan accrues interest at an annual nominal rate of 41.5% on the
outstanding balance as from January 1, 2021, and is payable in 24 consecutive installments.
As of the date of these financial statements, the Company had repaid the full amount of principal and interest
accrued thereon.
5.12.3 ARTEAR
On May 15, 2017, ARTEAR and Industrial and Commercial Bank of China Limited, Dubai (DIFC) Branch
executed an agreement whereby ARTEAR is the borrower under a bilateral loan for a principal amount of US$
15 million, payable within a 3-year term in equal consecutive semiannual installments. The first installment is
due on the first anniversary of the origination of the loan. The funds were used to refinance certain debts and
to fulfil other general corporate purposes. Principal accrued interest at an annual nominal fixed rate of 5.50%
payable on a semiannual basis as from the origination of the loan. In connection with that loan, ARTEAR had
undertaken certain covenants, which included the maintenance of certain ratios related to that company’s
- 36 -
GRUPO CLARÍN S.A.
financial debt within the values established by the bank, which was fully complied with. On each of May 21 and
November 21, 2018, and May 21 and November 14, 2019, it repaid US$ 3 million, respectively, corresponding
to four installments of the principal owed under this loan. On May 18, 2020, ARTEAR made a full repayment of
the loan.
On June 16, 2017, ARTEAR and Itau BBA International plc executed an agreement whereby ARTEAR is the
borrower under a bilateral loan for a principal amount of US$ 5 million, payable within a 2-year term in a single
installment at maturity. Principal accrued interest at a variable annual rate established based on three-month
LIBOR, plus a 4.50% margin, payable on a quarterly basis since the origination of the loan. In connection with
that loan, ARTEAR had undertaken certain covenants, which included the maintenance of a shareholders’
equity of $ 500 million or more. On June 16, 2019, ARTEAR made a full repayment of the loan.
On June 7, 2019, ARTEAR and Banco de Galicia y Buenos Aires S.A.U. executed an agreement whereby
ARTEAR is the borrower under a bilateral loan for a principal amount of US$ 2.5 million, payable in a single
installment at maturity, i.e. on April 1, 2020. Principal accrued interest at a fixed annual rate of 8.25% payable
at maturity. On March 31, 2020, ARTEAR had repaid US$ 148,164 together with interest accrued thereon under
the loan executed with Banco de Galicia y Buenos Aires S.A.U. On April 1, 2020, ARTEAR made a full
repayment of the loan.
On June 7, 2019, ARTEAR and ICBC Argentina executed an agreement whereby ARTEAR is the borrower
under a bilateral loan for a principal amount of US$ 2.5 million, payable in a single installment at maturity, i.e.
on April 1, 2020. Principal accrued interest at a fixed annual rate of 8.5% payable at maturity. On April 1, 2020,
ARTEAR made a full repayment of the loan.
On July 5, 2019, Pol-ka Producciones S.A. and ICBC Argentina executed an agreement whereby Pol-ka
Producciones S.A. is the borrower under bilateral loan for a principal amount of US$ 200,000, payable in a
single installment at maturity, i.e. on December 30, 2019. Principal accrues interest at a fixed annual rate of
7.55% payable at maturity. On January 2, 2020, Pol-ka Producciones S.A. made a full repayment of the loan.
5.12.4 IESA and Subsidiaries
On December 20, 2019, IESA executed a loan agreement with the bank JPM for US$ 1.5 million, due on
December 31, 2022. Said loan accrues interest at a rate equivalent to LIBOR plus 0.9%. Interest is calculated
on outstanding balances and is payable on a quarterly basis.
5.12.5 Radio Mitre
On July 5, 2017, Radio Mitre and Banco Santander Río S.A. executed an agreement whereby Radio Mitre is
the borrower under a bilateral loan for a principal amount of $ 50 million ($ 170 million in constant currency as
of December 31, 2020), payable within a 3-year term in equal consecutive quarterly installments. The first
installment is due on the first anniversary as from the date on which the loan was granted. The funds were used
to finance working capital and investments. Principal accrued interest at a fixed rate of 23.50% during the first
12 months and during the remaining term at an established variable rate based on the BADLAR rate for private
banks, plus a 4.50% margin, payable on a quarterly basis as from the date on which the loan was granted. The
loan was repaid in full at maturity.
As of December 31, 2020, Radio Mitre entered into a repo transaction for $ 59 million. It was a short-term
transaction, which as of that date accrued interest at an annual average rate of 25.9%. As collateral for the
loan, Frecuencia Producciones Publicitarias S.A., a subsidiary of Radio Mitre, holds an investment of US$ 0.6
million in the company with which Radio Mitre executed the transaction.
5.13 Taxes Payable
Non-Current
Taxes Payable on a National Level
Taxes Payable on a Provincial Level
Current
Taxes Payable on a National Level
Taxes Payable on a Provincial Level
Taxes Payable on a Municipal Level
December 31,
2020
December 31,
2019
942,524
13,500,784
14,443,308
959,241,280
12,879,504
6,015,155
978,135,939
33,509,175
5,888,996
39,398,171
692,572,447
21,907,501
2,632,458
717,112,406
- 37 -
GRUPO CLARÍN S.A.
5.14 Other Liabilities
Non-Current
Deposits in Guarantee
Call Options (Note 10)
Other
Current
Advances from Customers
Related Parties (Note 15)
Revenues to be Accrued
Other
5.15 Trade and Other Payables
Non-Current
Suppliers and Trade Provisions
Employer’s Contributions
Current
Suppliers and Trade Provisions
Related Parties (Note 15)
Employer’s Contributions
December 31,
2020
December 31,
2019
2,000
252,450,000
4,155,296
256,607,296
2,723
235,210,094
14,037,913
249,250,730
December 31,
2020
December 31,
2019
366,299,821
5,840,731
364,568,344
164,716,440
901,425,336
488,122,024
13,939,609
375,220,713
231,895,343
1,109,177,689
December 31,
2020
December 31,
2019
-
36,580,036
36,580,036
4,320,747,522
200,358,567
2,223,705,417
6,744,811,506
7,399,964
84,707,143
92,107,107
4,914,538,570
168,722,777
2,229,051,416
7,312,312,763
5.16 Right-of-Use Assets and Lease Liabilities
Certain controlled companies have real property lease agreements, which pursuant to IFRS 16 (see Note 2.3),
have been recognized with the simplified retrospective approach considering the accumulated effect of the
application as from January 1, 2019, without restating the information presented for comparative purposes. The
Company recognized right-of-use assets for the amount of lease liabilities as of the date of adoption (equal to
the present value of the remaining lease payments, which have been discounted at an average borrowing rate
of 53.82% for agreements denominated in Argentine pesos and 7.68% for agreements denominated in U.S.
Dollars), adjusted by the amount of any prepaid or accrued lease payment as of December 31, 2018.
During 2020 and 2019, the Company and certain controlled companies executed lease agreements which, in
accordance with IFRS 16, have been recognized as from the date of execution of the agreement.
Right-of-use assets and lease liabilities related to the above-mentioned agreements are disclosed in a separate
item of Assets and Liabilities, respectively, in the Consolidated Statement of Financial Position. The
amortization of those assets is disclosed under Amortization of Right-of-Use Assets.
The following table shows the changes in the item right-of-use assets:
Balances as of January 1
Effect of adopting new accounting policy
Balances as of January 1, restated
Additions
Retirements (1)
Amortization
Balances as of December 31
2020
128,135,489
-
128,135,489
71,777,899
(7,382,051)
(109,326,600)
83,204,737
2019
-
252,907,304
252,907,304
63,715,864
(21,665,834)
(166,821,845)
128,135,489
(1)
Included under Other Income and Expenses, net in the consolidated Statement of Comprehensive Income.
- 38 -
GRUPO CLARÍN S.A.
The following is the evolution of Lease Liabilities:
Balances as of January 1
Effect of adopting new accounting policy
Balances as of January 1, restated
Interest (1)
Other Financial Results (1) (3)
Exchange Differences (1)
Additions (2)
Gain (Loss) on Net Monetary Position
Payments
Retirements (4)
Balances as of December 31
2020
127,803,537
-
127,803,537
26,756,118
(23,799,167)
9,011,324
71,777,899
(31,113,559)
(87,309,542)
(6,620,475)
86,506,135
2019
-
252,907,304
252,907,304
68,165,253
-
33,816,910
63,715,864
(85,171,517)
(185,770,947)
(19,859,330)
127,803,537
(1) Included under financial expenses on debt in the Consolidated Statement of Comprehensive Income.
(2) Discounted at a borrowing rate of between 28.2% and 44.1% for agreements denominated in Argentine pesos and 7% for agreements
denominated in US dollars.
(3) Includes reductions / waivers of installments of certain real property lease agreements.
(4) Included under Other Income and Expenses, net in the consolidated Statement of Comprehensive Income.
(5) 5.17 Changes in provisions and allowances
Items
Balance at
the
Beginning
Increases
Decreases (6)
Balances as
of December
31, 2020
Balances as
of December
31, 2019
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 Impairment of Intangible
Assets
Valuation Allowance on Tax Loss
Carryforwards (5)
432,858,401
26,205,297
269,663,939
5,436,537
(1)
(2)
(189,292,986) (1)
(10,415,972) (2)
513,229,354
21,225,862
432,858,401
26,205,297
22,310,465
161,939,796
426,856,699
-
-
-
(8,343,655)
13,966,810
22,310,465
(10,277,882)
151,661,914
161,939,796
(161,612,526) (3)
265,244,173
426,856,699
Total
1,070,170,658
275,100,476
(379,943,021)
965,328,113
1,070,170,658
Included in liabilities
Provisions for Lawsuits and Contingencies
Accrual for Asset Retirements
1,056,169,178
29,142,416
452,397,170
2,963,954
(4)
(4)
(457,677,743) (4)
-
(4)
1,050,888,605
32,106,370
1,056,169,178
29,142,416
Total
1,085,311,594
455,361,124
(457,677,743)
1,082,994,975
1,085,311,594
(1)
(2)
(3)
(4)
(5)
(6)
Includes $ 265 million corresponding to net increases which were charged to Selling Expenses (see Note 6.3) and $ 30 million to
Other Financial Results, net.
Includes $ 3 million charged to Impairment of Inventories and Obsolescence of Materials under Production Expenses (see Note 6.3).
Includes $ 48 million charged to Income Tax.
Includes $ 276 million corresponding to net increases which have been charged to Contingencies (see Note 6.3).
Includes Valuation Allowance for Deferred Tax Assets, net.
Includes the effect of the Gain (Loss) on Net Monetary Position.
NOTE 6 - BREAKDOWN OF THE MAIN ITEMS OF THE STATEMENT OF COMPREHENSIVE INCOME
6.1 Revenues
Advertising Sales
Circulation Sales
Printing Services Sales
Television Signals Sales
Sale of Goods
Sales of Logistics Services
Other Sales
Total (1)
December 31,
2020
10,773,131,125
7,456,802,470
774,728,636
5,074,848,010
20,415,274
1,430,154,351
1,109,579,023
26,639,658,889
December 31,
2019
15,438,326,190
9,380,698,093
830,542,201
5,197,043,580
547,183,614
1,924,400,226
1,301,465,717
34,619,659,621
- 39 -
GRUPO CLARÍN S.A.
(1) Includes sales executed through barter transactions as of December 31, 2020 and 2019 for $ 370 million and $ 526 million,
respectively.
6.2 Cost of Sales
Inventories at the beginning of the year
Purchases for the year
Production and Services Expenses (Note 6.3)
Less: Inventories at year-end
Cost of Sales
December 31,
2020
1,837,172,859
3,251,665,463
12,756,885,020
(1,158,313,157)
16,687,410,185
December 31,
2019
2,530,719,700
5,632,401,207
16,702,879,186
(1,837,172,859)
23,028,827,234
6.3. Production and Services, Selling and Administrative Expenses
Item
Fees for Services
Salaries, Social Security and Benefits to
Personnel (1) (2)
Advertising and Promotion Expenses
Taxes, Duties and Contributions
Bad Debt Expenses
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
Leases
Amortization of Intangible Assets
Amortization of Film Library
Amortization of Right-of-Use Assets
Depreciation of Property, Plant and Equipment
Impairment of Inventories and Obsolescence
of Materials
Other Expenses
Total as of December 31, 2020
Total as of December 31, 2019
Production and
Services
Expenses
1,069,383,495
6,034,209,002
-
221,022,954
-
232,346,795
706,111,150
440,502,516
109,647,581
-
35,535,797
-
1,077,585,412
710,367,429
39,128,990
424,349,149
46,145,277
41,483,928
223,822,456
218,089,331
861,377
109,326,600
797,938,183
2,796,619
216,230,979
12,756,885,020
16,702,879,186
Selling Expenses
Administrative
Expenses
396,377,548
670,640,021
904,375,250
471,940,657
62,514,150
264,567,608
13,565,220
38,285,532
1,484,339,889
10,517,866
2,340,959
2,370,508
20,981,282
-
-
-
6,373,014
4,717,664
-
873,049
60,034,813
-
-
2,407,326,420
3,198,838
176,539,473
-
38,149,303
196,167,433
-
32,193,317
274,056,370
12,289,594
3,661
-
-
-
143,315,724
34,919,671
-
7,312,155
42,684,033
-
-
Total as of
December 31,
2020
2,136,401,064
9,345,910,672
475,139,495
460,076,577
264,567,608
284,061,318
940,564,115
1,924,842,405
152,358,764
276,397,329
50,195,899
20,984,943
1,077,585,412
710,367,429
39,128,990
574,037,887
85,782,612
41,483,928
232,007,660
320,808,177
861,377
109,326,600
Total
December 31,
2019
2,917,628,842
11,542,595,495
1,002,387,994
718,729,759
268,816,142
584,951,416
1,067,316,735
2,381,737,266
151,058,905
395,948,579
70,400,017
114,318,667
1,102,339,264
1,134,315,447
101,457,273
674,868,641
759,369,481
72,966,764
343,946,667
380,594,576
1,408,540
166,821,845
31,887,287
94,640,053
924,465,523
975,862,572
-
33,611,833
3,809,674,129
5,703,425,400
-
119,088,905
4,252,524,971
5,163,040,884
2,796,619
368,931,717
20,819,084,120
18,422,034
621,082,549
27,569,345,470
(1) As of December 31, 2020 and 2019, it includes a recovery corresponding to the allocation of employer's contributions as a tax credit against VAT by certain
subsidiaries (Decree No. 746/03 issued by the National Executive Branch), for approximately $ 929 million and $ 1,155 million, respectively, as mentioned in
Notes 8.2.e., 8.2.f and 20.
(2) Net of accrued subsidies in the amount of $ 451.8 million for the period ranging from April up to and including September 2020, as approved under the
Emergency Assistance Program for Work and Production and, since November, as approved under the program REPRO II. See Note 22.
6.4 Financial Expenses on Debt
Discounts Obtained in Lease Liabilities
Interests
Exchange Differences
Total
December 31,
2020
23,799,167
(281,968,480)
(528,533,319)
(786,702,632)
December 31,
2019
-
(891,487,214)
(616,750,936)
(1,508,238,150)
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GRUPO CLARÍN S.A.
6.5 Other Financial Results, net
Exchange Differences
Interests
Financial Discounts on Assets and Liabilities
Other Taxes and Expenses
Results from Operations with Notes and Bonds
Total
6.6 Other Income and Expense, net
Income from Sale of Property, Plant and Equipment and Intangible
Assets (2)
Income from Liquidation of Companies (1)
Impairment of Property, Plant and Equipment, Intangible Assets and
Tax Credits
Impairment of Goodwill (Note 22)
Other
Total
December 31,
2020
31,792,269
102,383,084
1,115,742
(299,312,174)
119,814,459
(44,206,620)
December 31,
2019
19,425,190
158,792,541
(76,806,622)
(398,700,267)
131,811,182
(165,477,976)
December 31,
2020
December 31,
2019
(1,683,411)
-
(108,405,666)
255,097,080
18,621,537
(1,295,703,263)
57,945,000
(1,220,820,137)
(235,273,282)
-
(21,114,194)
(109,696,062)
(1) Corresponds to the effect of the liquidation process of subsidiaries of Sadkal.
(2) As of December 31, 2019, includes the proceeds from the sale of the brand “Deautos.com” and other related assets made during
June 2019.
NOTE 7 - INCOME TAX
The following table shows the reconciliation between the consolidated income tax charged to net income (loss)
for the years ended December 31, 2020 and 2019 and the income tax liability that would result from applying
the current tax rate on consolidated income (loss) before income tax and tax on assets and the income tax
liability assessed for each year (amounts stated in thousands of Argentine Pesos):
Income (Loss) before Income Tax
Current Rate
Income Tax Assessed at the Current Tax Rate on Income (Loss) before
Income Tax
Permanent Differences:
Equity in Earnings from Associates
(Loss) on Net Monetary Position
Non-Deductible Expenses (2)
Effect of the change in the tax rate (1)
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
Valuation Allowance for Other Tax Credits
Total
December
31, 2020
236,080
30%
December
31, 2019
(1,077,481)
30%
(70,824)
323,244
173,818
(363,914)
(388,470)
(80,782)
(1,461)
(731,633)
(11,640)
48,359
(694,914)
384,843
(1,079,757)
71,778
(821,495)
36,173
(119,617)
(1,443)
(511,360)
-
(397,590)
(908,950)
92,509
(1,001,459)
(694,914)
(908,950)
(6,217)
-
(701,131)
(908,950)
(1) Corresponding to the effect of applying the changes in the income tax rates, as per the tax reform detailed in Note 20, to deferred tax
assets and liabilities according to the year in which they are expected to be realized.
(2)
As of December 31, 2020, it includes $ 388 million corresponding to impairment of goodwill.
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GRUPO CLARÍN S.A.
Breakdown of Consolidated Deferred Tax (in thousands of Argentine pesos):
December 31,
2020
December 31,
2019
Changes
Deferred Tax Assets
Tax Loss Carryforwards
Inventories
Provisions and Other Charges
Trade Receivables
Deferral of the Inflation Adjustment for Tax Purposes (Note 20)
Other Liabilities
Accounts Payable
Deferred Tax Liabilities
Property, Plant and Equipment
Intangible Assets
Other Investments
Inventories
Other Assets
Subtotal
Valuation Allowance on Tax Loss Carryforwards - (Charges)
Total Net Deferred Tax Assets
660,292
-
257,976
152,112
513,052
104,603
68,205
1,756,240
(740,614)
(25,809)
(22,659)
(6,352)
(23,197)
(818,631)
(265,244)
(1,083,875)
672,365
656,699
20,791
253,057
120,004
481,268
110,142
77,405
1,719,366
(913,008)
(31,593)
(18,030)
-
(42,356)
(1,004,987)
(426,857)
(1,431,844)
287,522
3,593
(20,791)
4,919
32,108
31,784
(5,539)
(9,200)
36,874
172,394
5,784
(4,629)
(6,352)
19,159
186,356
161,613
347,969
384,843
The following is a detail of net deferred tax assets taking into consideration the deferred tax position of each
legal entity (in thousands of pesos):
Deferred Tax Assets
Deferred Tax Liabilities
Total Net Deferred Tax Assets
December 31,
2020
December 31,
2019
861,337
(188,972)
672,365
671,544
(384,022)
287,522
As of December 31, 2020, the Company’s and its subsidiaries’ accumulated consolidated tax loss carryforwards
amounted to approximately $ 2,641 million, which calculated at the tax rate that will be in effect at the time the
Company expects it will use them amount to $ 660 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):
Expiration year
2021
2022
2023
2024
2025
Tax
Loss Carryforwards
105,870
209,464
363,141
726,177
1,236,515
The Company estimates that the tax loss carryforwards are recoverable for the net amounts disclosed.
NOTE 8 - PROVISIONS AND OTHER CONTINGENCIES
8.1 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 notice of an injunction issued 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 $ 387,028,756 in historical currency as of that date recorded
under the retained earnings account, other than to distribute dividends to the shareholders.
On the same date, the Company was served notice of a claim brought by Argentina’s National Social
Security Administration requesting the nullity of the decision made on item 7 (Appropriation of Retained
Earnings) of the agenda of the Annual Ordinary Shareholders’ Meeting held on April 22, 2010. On
December 2, 2019, a decision was issued admitting the claim brought by Argentina's National Social
Security Administration and declaring the nullification of the decision made on item 7 (Appropriation of
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GRUPO CLARÍN S.A.
Retained Earnings) of the agenda of said Shareholders’ Meeting, at which the shareholders had resolved
that the profits for the year 2009, of $ 290,146,539 in historical currency as of that date, be appropriated as
follows: (i) $ 14,507,327 to the Legal Reserve and (ii) $ 275,639,212 to Retained Earnings. On the same
date, the Company filed an appeal against such decision. As of the date of these financial statements, the
Company submitted grounds for its appeal, which is still pending.
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. V of the National Court of Appeals on Federal Administrative Matters
issued an 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 injunction is
still in effect.
In August 2013, the Company was served notice of 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 proceeding was in the discovery stage.
On September 17, 2013, the Company was served notice of 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 proceeding was in the discovery stage.
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, discovery proceedings have been initiated and
evidence is being produced.
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 and the proceeding is in the discovery stage.
On November 10, 2016, the Company was served notice of a claim brought by Argentina’s National Social
Security Administration in re “National Government - Ministry of Economy and Finance v. GRUPO CLARÍN
S.A. on Ordinary Proceeding” File -22,658/2015, 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 28, 2015. As of the date of these financial
statements, the Company has filed a response, produced evidence and made its final statement.
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GRUPO CLARÍN S.A.
On April 3, 2017, the Company was served notice of a claim brought by Argentina’s National Social Security
Administration in re “National Government - Ministry of Economy and Finance v. GRUPO CLARÍN S.A. on
Ordinary Proceeding” File -22,832/2014, 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 29, 2014. As of the date of these financial statements, the
Company has filed a response, produced evidence and made its final statement.
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, 2020 would amount to approximately $
12.3 million for taxes and $ 62.4 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 $ 120 million. On May 21, 2012, an appeal was filed with the Federal Tax Court.
On December 18, 2017, the company was served notice of Resolution No. 132/2017 (DV MRRI) which
imposed on CIMECO a fine of approximately $ 33 million in historical currency as of that date for an alleged
omission of income tax for fiscal periods 2003-2007, pursuant to Section 45 of Law No. 11,683.
CIMECO and its legal and tax advisors believe CIMECO has strong grounds to defend the criteria adopted
in its tax returns. Such criteria would also provide a reasonable basis to hold that the fine imposed was
illegitimate. Therefore, CIMECO considers that AFIP’s claims will not prosper before a judicial 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 as of December 31, 2020, the contingency would amount to approximately $ 28.9
million in historical currency as of the original date of the claim, out of which $ 9.3 million would correspond
to taxes on dividend payments made on February 25, 2004, February 24, 2005 and February 24, 2006; $
6.5 million to a 70% fine on the omitted tax, and $ 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, 2010, the tax
authorities issued their own official assessment and imposed penalties. The company appealed the tax
authorities’ resolution before the National Tax Court on February 8, 2011. On June 1, 2011, the 2.5% Appeal
Fee was credited.
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GRUPO CLARÍN S.A.
On August 23, 2019, the National Tax Court served notice of its decision to revoke the decision against
which TRISA had filed an appeal.
The National Tax Authority filed an appeal against such decision but, on October 20, 2019, it withdrew its
appeal. On October 25, 2019, the National Tax Court deemed the appeal abandoned.
In view of the withdrawal of the appeal filed by the National Tax Authority, as of the date of these financial
statements, the decision rendered on August 23, 2019 has become final.
d. As a result of a report on suspicious transactions issued by the Argentine Federal Revenue Service (“AFIP”)
concerning transactions carried out between the Company and some 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.
In October 2019, the court dismissed the case and acquitted the directors of the Company who had been
charged by the FIU. On December 9, 2019, the Federal Criminal and Correctional Court of Appeals ratified
the above-mentioned decision, which is therefore deemed final and the case is now closed.
e. 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 members as of the date of
initiation of summary proceedings and former 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 members as of the date of initiation of summary proceedings and former
members of the Board of Directors and supervisory commission who are subject to the summary
proceedings, duly filed their respective responses. Subsequently, the file was submitted to the Legal Affairs
Division of the CNV. As of the date of these financial statements, it is currently pending before the Ministry
of Economy On September 9, 2019, the CNV received the file from the Criminal and Correctional Court No.
11, which had been previously held by the Ministry of Economy. Subsequently, the CNV set the date for
the preliminary hearing for March 11, 2020, which was suspended by a decision rendered on February 14,
2020 until it has been duly clarified how each of the parties subject to the summary proceedings exercised
its due process rights.
f. Through the Joint Confidential Resolution dated October 30, 2017 (No. RRFCO-2017-12-APN-DIR-CNV),
subsequently supplemented with the Joint Confidential Resolution dated November 24, 2017 (No. RRFC-
2017-16-APN-DIR, served on the Company on December 4, 2017, the CNV decided to initiate summary
proceedings against the Company and the members of its Board of Directors, Supervisory Committee and
Audit Committee as of the date of the alleged breach for alleged infringement of their duty to disclose the
execution of an irrevocable contribution agreement with the Company’s subsidiary AGEA on June 24, 2014,
as a relevant fact, pursuant to Section 1, 2 and 3, subsection 16), Chapter I, Title XII of the Rules. The
subsidiary of the Company, AGEA, as well as its directors and syndics are also subject to summary
proceedings. Each of them filed their respective responses in due time and form. On April 25, 2018, the
preliminary hearing was held and the proceedings moved on to the presentation of evidence. On October
9, 2018, the parties to the summary proceeding submitted the corresponding legal brief. On January 25,
2021, the Company was notified of the appointment of an expert accountant to perform an accounting
expert review as a measure to furnish additional evidence. AGEA requested the recusation of said expert
accountant on grounds of bias, appointed its own expert accountant, and added new items subject to expert
review. On February 8, 2021, AGEA was notified of a decision rendered on February 5, 2021, whereby,
among other issues, the expert accountant was served notice of the request for recusation. The expert
accountant must state whether she falls within the grounds for recusation provided under Article 17 of the
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GRUPO CLARÍN S.A.
Civil and Commercial Procedure Code of Argentina. As of the date of these consolidated financial
statements, a decision has not been rendered yet on this request for recusation.
In addition, through the Joint Confidential Resolution No. RRFCO-2017-11-APN-DIR#CNV dated October
30, 2017 served on December 1, 2017, the CNV decided to initiate summary proceedings against the
Company and the members of its Board of Directors, Supervisory Committee and Audit Committee and the
Market Relations Officer as of the date of the alleged breach for alleged infringement of their duty to disclose
the appeal filed against the injunction issued on December 20, 2011 in re “Supercanal S.A. vs. Cablevisión
S.A. and Other on Complaint for the protection of constitutional rights, Injunction”, and the dismissal of the
appeal by the Federal Court of Appeals of Mendoza, as a relevant fact, pursuant to Section 1, 2 and 3,
subsection 16), Chapter I, Title XII of the Rules. Cablevisión, as well as its directors and members of the
Supervisory Committee and the Market Relations Officer as of the date of the alleged breach are also
subject to the summary proceedings. As of the date of these financial statements, each of them had filed
their respective responses in due time and form. On April 25, 2018, the preliminary hearing was held and
the proceedings moved on to the presentation of evidence. On October 9, 2018, the parties to the summary
proceeding submitted the corresponding legal brief.
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 during 2002 lead to the nullity of some of the benefits granted
under said plans for an estimated total amount of $ 82.5 million in historical currency as of that date,
including adjustments and accessory amounts. In April 2013, AGEA was served notice of 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 deposit 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. Subsequent to the issuance of the injunction mentioned above, the
National Government requested that the injunction be declared expired due to the application of the time
limitations provided under article 5 of Law No. 26,854. The intervening court lifted the injunction. AGEA
filed an appeal against such decision but the appeal was dismissed on June 4, 2019. On November 28,
2018, upon new requests made by the AFIP, the Company requested a new injunction in the case,
requesting that AFIP be ordered to suspend the debt assessment procedures initiated by that agency. On
May 21, 2019, the Company requested an interim injunction ordering the suspension of the effects of AFIP
Resolutions Nos. 24/19 and 25/19 under which AGEA was demanded to pay, as well as the suspension of
any existing deadlines and any other activity by AFIP seeking to assess debt or to collect any amounts in
connection with the tax benefits, the expiration of which had been challenged. Such injunction was issued
on May 23, 2019, and on May 28, 2019, the court rendered a decision whereby it clarified that the
suspension of the effects included the calculation of the deadlines to file an appeal with the National Tax
Court. The AFIP requested the revocation of the new injunction requested in November 2018 and the
immediate lifting of the interim injunction. On July 18, 2019, the Court of Appeals revoked the interim
injunction. As a result, AGEA has filed an appeal with the National Tax Court. On July 19, 2019, the Court
of Appeals decided that the case was ready for resolution in connection with the injunction requested in
November 2018. AGEA’s legal advisors believe that there are reasonable possibilities that the outcome will
be favorable.
h. 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 former members of its Board of Directors and supervisory commission –who occupied those
positions between September 19, 2008 and the date of initiation of summary proceedings- 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 Section 5,
subsection a), the first part of Section 6 and Section 8, subsection a) paragraph V) of the Annex to Decree
No. 677/01; with Sections 1, 2 and 3, subsection 9) of Chapter XXI of the REGULATIONS (T.R. 2001 as
amended) –now Section 1 of Part I, Chapter I, Title XII of the REGULATIONS (T.R. 2013 as amended);
with Sections 2 and 3 subsection 9) of Part II, Chapter I, Title XII of the REGULATIONS (T.R. 2013 as
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GRUPO CLARÍN S.A.
amended); with Section 11 subsection a.12) of Chapter XXVI of the REGULATIONS (T.R. 2001 as
amended) –now Section 11 subsection 13) of Part IV, Chapter I, Title XV of the REGULATIONS (T.R. 2013
as amended); with Section 99 and 100 of Law No. 26,831; and with Sections 59 and 294 subsection 9) of
Law No. 19,550. AGEA, and the members as of the date of initiation of summary proceedings and former
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. As of the
date of these financial statements, a draft opinion is being prepared on the file by the Summary Proceedings
Management of the CNV, before being submitted to the Board of Directors of the CNV.
i. On August 22, 2017, the Federal Court on Administrative Matters No. 4 issued an injunction, requested by
the Argentine Chamber of Independent TV Producers (“CAPIT”, for its Spanish acronym), whereby it
extended for six months the effectiveness of the benefits set forth in Decree No. 746/03, which allows for
the application of employer’s contributions as a tax credit against VAT, in the case of the companies that
are members of the CAPIT. On February 14, 2018, August 3, 2018 and February 13, 2019, the above-
mentioned Court extended for six months, on each of those dates, the effectiveness of the injunction in
favor of the CAPIT.
In addition, on February 7, 2019, the ENACOM issued Resolution No. 535/2019, whereby it rendered
independent producers on an equal footing with regard to the allocation of social security contributions as
creditable against VAT.
In June 2019, the Federal Court on Administrative Matters No. 4 in re “Argentine Chamber of Independent
TV Producers (“CAPIT”, for its Spanish acronym) v. National Executive Branch on Proceeding leading to a
declaratory judgment” admitted the claim filed by the CAPIT. In its claim, the CAPIT requested that the
benefit granted under Decree No. 746/03 remain in effect. The Court declared the right to a differential
VAT regime applicable to the relevant sectors, to be created, enforced and regulated by the authorities duly
vested with that power by the Constitution. The Court decided that claimants that have fulfilled their tax
obligations within the scope of the injunction shall not be considered delinquent. Subsequently, the National
Tax Authority filed an appeal. In October 2019, the Court of Appeals on Federal Administrative Litigation
Matters, Chamber II, dismissed the appeal that had been filed by the AFIP and ratified the above-mentioned
decision.
Since Pol-Ka is a member of the CAPIT, it has been allocating employer’s contributions as a tax credit
against VAT as from August 2017.
In addition, through Decree No. 1,094/18, the Executive Branch enacted Law No. 27,467, which introduced
amendments regarding VAT, thus allowing, as from January 1, 2019, to allocate employer's contributions
as a tax credit against VAT (See Note 20).
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 $ 1.4 million for income
tax and $ 5.7 million for late-payment interest and fines, calculated as of December 31, 2020.
The official value-added tax assessment amounts to $ 0.8 million for tax differences and $ 3.3 million for
late-payment interest and fines, calculated as of December 31, 2020.
On October 21, 2015, the AFIP served IESA with a notice stating the income tax and value added tax
charges assessed for fiscal period 2009 and ordering the initiation of summary proceedings for alleged
omitted taxes. The AFIP mainly challenged the deduction of 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 $ 1.2 million for income tax and $ 4.7
million for late-payment interest and fines, calculated as of December 31, 2020.
The official value-added tax assessment amounts to $ 0.4 million for tax differences and $ 2 million for late-
payment interest and fines, calculated as of December 31, 2020.
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GRUPO CLARÍN S.A.
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.
k. 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.
l. On December 29, 2020, GCGC was notified of a decision rendered by the Directorate-General of Revenues
(“DGR”, for its Spanish acronym) of the Public Revenue Administration for the City of Buenos Aires,
whereby said agency challenged the turnover tax returns corresponding to fiscal period 2014 of Compañía
de Medios Digitales (CMD) S.A. (a company merged into GCGC effective as of January 1, 2019).
Accordingly, said agency issued an official tax assessment. The DGR considered that the TV trivia games
over text messages do not fall within the definition of Information and Communication Technologies (ICTs)
activities, therefore, CMD is not entitled to the benefits granted by the Technological District (Law No.
2,972), which is contrary to the provisions of the enforcement authority of the above-mentioned law.
The official tax assessment amounts to $ 8.8 million for turnover tax differences for fiscal period 2014, with
an estimated $ 24.7 million in late-payment interest.
On that same date, GCGC was served with a decision rendered by the DGR, whereby it ordered the
initiation of the official tax assessment procedure regarding turnover tax liabilities of CMD for fiscal periods
2015 and 2016.
On February 3, 2021, GCGC filed an appeal with such agency regarding the official tax assessment for
fiscal period 2014 and answered the order for the initiation of the official tax assessment for fiscal periods
2015 and 2016.
Subsequently, GCGC took notice of another resolution issued by DGR on December 4, 2020, which had
not been duly served at Gestión Compartida S.A.’s legal domicile, whereby it challenged the turnover tax
return filed by CMD, corresponding to the 12th advance payment of fiscal period 2013. That agency ordered
GCGC to pay $ 0.9 million in taxes and a fine of 100% of such amount, plus interest in the amount of $ 2.3
million. Such company will challenge the above-mentioned resolution through an illegitimacy claim.
GCGC and its legal and tax advisors believe that it has strong grounds to defend the criterion adopted in
its tax returns. Accordingly, it has not booked an allowance in connection with the effects that the above-
mentioned situations may have.
8.2 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.
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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.
TSC executed an agreement with AFA whereby TSC undertook to withdraw the claim and waive its right to
litigation, within the framework of negotiations regarding potential new businesses related to audiovisual
rights to Argentine first division soccer tournament matches. Finally, TSC abandoned the claim it had
brought, which was consented both by the National Government and by AFA.
As of the date of these financial statements, the Judge acknowledged said abandonment and TSC paid the
court costs approved by the Judge and accepted by the National Tax Authority. TSC paid and made the
judicial deposit for the full amount approved. The file is now deemed closed.
b. Pursuant to a notarial certificate issued on September 19, 2008, AGEA and the Company were served
notice of 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 notice of 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.
On September 4, 2017, the Court of First Instance rejected the claim brought by the entity representing
consumers and alleged financial victims and by individuals. As of the date of these consolidated financial
statements, both parties filed an appeal against that decision and the file is currently pending for its
resolution before the Court of Appeals.
On September 12, 2019, Chamber D of the Commercial Court of Appeals confirmed the decision rendered
by the court of first instance that had rejected the claim brought by the entity representing consumers and
alleged financial victims. On October 7, 2019, the entity representing consumers filed a federal
extraordinary appeal against this decision. AGEA and the Company filed a response on October 28, 2019.
As of the date of these consolidated financial statements, the chamber is analyzing the admissibility of the
extraordinary appeal.
c. On September 16, 2010 the Company was served notice of 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. The proceeding is currently in the discovery
stage.
d. 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 in the CNV
by Capital Markets Law No. 26,831. On April 26, 2013, the Board of Directors decided to press charges
grounding its claim on the same events that disrupted a legitimate meeting.
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 in 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
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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.
e. 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 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, an 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 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 National 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 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 injunction be maintained and authorizing
the allocation of employer’s contributions as a tax credit against 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 National 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 allocate
employer’s contributions as a tax credit against VAT as from November 2014.
In addition, through Decree No. 1,094/18, the Executive Branch enacted Law No. 27,467, which introduced
amendments regarding VAT, thus allowing, as from January 1, 2019, to allocate employer's contributions
as a tax credit against VAT (See Note 20).
f. 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 allocating employer’s contributions as a tax credit against VAT.
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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 injunction”, in respect of which the Supreme Court of Argentina rendered a
decision on October 28, 2014. These associations had requested an injunction ordering the Executive
Branch to maintain the effectiveness of the benefit of allocating employer’s contributions as a tax credit
against 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 injunction stating that, notwithstanding the
decision, the claimants shall not be deemed delinquent within the framework of the 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 injunction be maintained and authorizing the allocation of employer’s
contributions as a tax credit against 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 National 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 allocate employer’s
contributions as a tax credit against VAT as from July 2015.
In addition, through Decree No. 1,094/18, the Executive Branch enacted Law No. 27,467, which introduced
amendments regarding VAT, thus allowing, as from January 1, 2019, to allocate employer's contributions
as a tax credit against VAT (See Note 20).
g.
In February 2016, Radio Mitre was served notice of 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. On
April 30, 2020, the court of first instance dismissed the claim brought against Radio Mitre and Cadena País
Producciones Publicitarias S.A. The claimant filed an appeal against such decision. Our legal advisors
believe that Radio Mitre 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.
8.3 Matters concerning Papel Prensa
I. 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 Papel Prensa’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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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 1, 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.
On February 10, 2012, the Company 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 the Company which are recognized and protected by the Argentine National
Constitution.
On January 10, 2019, Law No. 27,498 was published in the Official Gazette. This law repealed certain articles
of Law No. 26,736, allowing companies to offer their customers discounts, benefits or promotions based on
purchase volumes. On the other hand, said law establishes parameters for granting extensions of payment
terms, and prohibits, for a term of 10 years, to make changes to the wood pulp and newsprint import duties
currently in effect, which are set at zero percent (0%).
II. In March 2016, the Commercial Court of Appeals –Chamber C– summoned Papel Prensa, the CNV, and the
shareholders, the National Government, S.A. La Nación CIMECO and AGEA 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, AGEA 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 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 that date, 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 $ 123,293,385 in historical
currency as of that date, 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
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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. On March 30, 2017, the hearing
that had been called by Chamber C of the National Court of Appeals on Commercial Matters was held. At that
hearing, Papel Prensa requested that the majority of the claims involving Papel Prensa be declared moot
considering the decisions rendered at the Shareholders’ Meeting held on October 19, 2016. On October 4,
2017, the Court of Appeals rendered a decision on more than 90 proceedings declaring them moot as requested
by Papel Prensa and revoking - among others- Resolutions No. 16,647, 16,671 and 16,691 issued by the CNV.
Both decisions rendered by the Court of Appeals became final. Papel Prensa submitted the same request to
the Court of First Instance on Commercial Matters regarding most of the proceedings pending before the court
and that were not submitted to the Court of Appeals, at the request of the Court, for the purposes described
above. At the hearing held on April 24, 2018, the National Government agreed on that request, and
subsequently, the Judge of the Court of First Instance issued a favorable decision on the request and declared
moot all of the claims within the scope of that request. At the General Annual Ordinary Shareholders’ Meeting
that approved the financial statements of Papel Prensa for the year ended December 31, 2016, the
shareholders disapproved the management of the representatives of the National Government in the Board of
Directors and in the Oversight Board who held office until February 2016, as well as the performance of the
syndics who held office until the Shareholders’ Meeting of October 19, 2016, also in representation of the
National Government, and decided to bring a corporate liability action (Section 276 of Law 19,550, as
amended).
III. 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. 1,032/10, whereby it required that: (i) certain members of Papel Prensa's
Supervisory Committee and statutory auditors be imposed a fine of $ 150,000 each in historical currency as of
that date; 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 $ 800,000 in historical currency as of that date. Papel
Prensa and its other current and former officers filed an appeal against the fine in due time and form, which is
pending to date. 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.
IV. On October 8, 2019, the Board of Directors of Papel Prensa approved the voluntary delisting of the Company
subject to the approval of the shareholders at the General Extraordinary Shareholders' Meeting and to the
pertinent regulatory approvals (CNV and BYMA). However, on November 20, 2019, in view of the imminent
change of administration in the National Government, the Board of Directors decided to stay the delisting it had
approved, thus suspending the Shareholders’ Meeting it had duly called.
V. 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 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. Under Law No. 22,285 audiovisual
communication service companies in Argentina were required a non-exclusive license from the COMFER in
order to operate.
The Audiovisual Communication Services Law (Law No. 26,522, LSCA, for its Spanish acronym) was passed
and enacted on October 10, 2009, with strong criticism about its content and enactment procedure.
By the end of December 2015, the National Executive Branch issued Emergency Decree No. 267/15, published
in the Official Gazette on January 4, 2016, whereby significant amendments were introduced to Laws Nos.
26,522 and 27,078 (the Digital Argentina Law, "LAD", for its Spanish acronym). The Emergency Decree was
approved on April 6, 2016 by the Lower House of Congress. Therefore, it has full force and effect.
9.2. Enforcement Authority
The Comité Federal de Radiodifusión (Federal Broadcasting Committee, “COMFER”, for its Spanish acronym)
was the enforcement authority established by Law No. 22,285.
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Law No. 26,522 provided for the replacement of the COMFER by 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.
The Emergency Decree created the ENACOM as a decentralized and autarchic agency under the jurisdiction
of the Ministry of Communications and vested 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 the Information and Communications Technology Federal Enforcement Authority
(“AFTIC”, for its Spanish acronym) by Laws Nos. 26,522 and 27,078, respectively.
Upon the issuance of Decrees Nos. 7/2019 and 50/2019, published in the Official Gazette on December 11,
2019 and on December 19, 2019, respectively, the ENACOM is now under the jurisdiction of the Secretariat of
Public Innovation under the Chief of the Cabinet of Ministers.
9.3. Multiple License Regime
The multiple license regime established under Law No. 22,285 allowed licensees to hold at the national level
up to twenty-four (24) sound or television broadcasting licenses. At the local level, one individual or legal entity
could have up to one sound broadcasting license, one television license and one subscription television license.
In this last case, FM broadcasting services were not included in this limit if they were broadcast from the same
station and location as the AM broadcasting services.
The LSCA introduced comprehensive amendments on the multiple license regime, against which the Company
and some of its Subsidiaries filed an unconstitutionality claim. Eventually, that claim was dismissed. The original
regime approved by the LSCA regarding broadcast services: i) restricted to 10 the number of audiovisual
communication service licenses, plus a single broadcast signal for radio, broadcast TV and subscription
television services that made use of the radioelectric spectrum; ii) set forth a further restriction on these services,
which could not be provided to more than 35% of all inhabitants or subscribers nationwide; and iii) at the local
level, the regime established the following limits: a) one (1) sound broadcasting license for amplitude modulation
(AM); b) one (1) sound broadcasting license for frequency modulation (FM) or up to two (2) licenses when there
are more than eight (8) licenses in the primary service area; c) one subscription television license, provided the
applicant was not the holder of a broadcast television license; d) one (1) broadcast television license provided
the applicant was not the holder of a subscription television license. Under no circumstances may the aggregate
number of the licenses granted in the same primary service area or any group of highly overlapping service
areas exceed three (3) licenses.
Among the main amendments introduced by the Emergency Decree with respect to the LSCA, the most
remarkable is the repeal of Section 161, 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 already conform to the new regulatory framework.
As far as the Company is concerned, the Emergency Decree: i) eliminated the incompatibility to render in the
same location broadcast television services and subscription television services; ii) increased the limit to 15 of
broadcast (television and radio) service licenses that may be accumulated at national level; iii) eliminated the
restriction to hold cable television signals; and iv) eliminated the restriction on broadcast services, which could
not be provided to more than 35% of all inhabitants or subscribers nationwide. At the local level, it increased to
4 the number of licenses that could be accumulated.
9.4. Terms of the Licenses
Law No. 22,285 provided that 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 2 years from the date of the Decree, programming
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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.
Even though Law No. 26,522 respected the original expiration terms of the licenses effective at the time of its
enactment, it set a 10-year limitation to the terms of licenses, with a one-time non-renewable extension.
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 hold broadcast television licenses made
a filing with the ENACOM requesting the extension of the terms of their licenses pursuant to Section 20 of the
Emergency Decree.
The ENACOM issued Resolution No. 135/2017, whereby it deemed that ARTEAR had opted to request an
extension under Section 20 of Decree No. 267/15 and stated that the term for the first period of TEN (10) years,
with the right to an automatic extension for a term of FIVE (5) more years, shall be calculated as from January
2, 2017.
On March 15, 2019, the ENACOM issued Resolution No. 1,176/19, whereby it granted the extension requested.
Radio Mitre was deemed to have opted to request an extension for all of its licenses under Article 20 of the
above-mentioned Decree, and was granted a term of 10 years, with the right to an automatic extension for a
term of 5 more years.
In addition, the ENACOM has issued a favorable decision, deeming as exercised the options to the regime
provided under Article 20 of Decree No. 267/15 formulated by the other subsidiaries. Pursuant to those
administrative proceedings, the new expiration date for the broadcast television licenses exploited by the
subsidiaries of the Company are:
Licenses
LS 85 TV Canal 13 of Buenos Aires
LU 81 TV Canal 7 of Bahía Blanca
LV 81 TV Canal 12 of Córdoba
LU 93 TV Canal 6 of Bariloche
January 1, 2027
January 1, 2027
January 1, 2027
January 1, 2027
Renewal of Licenses Granted under Art. 20 of Decree No. 267/2015
9.5. Other Resolutions Issued by the Enforcement Authority
Even though ARTEAR has challenged the validity or constitutionality of some regulations imposed by the
Enforcement Authority, it complies every year with the required procedures only in the event that such
requirements may be considered valid, for the purposes of safeguarding its rights. Those procedures are
detailed below:
- The procedure provided under AFSCA Resolution No. 173/2010, whereby an Audiovisual Communication
Services Providers Information System was implemented.
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GRUPO CLARÍN S.A.
- The procedure provided under Decree No. 904/2010 and AFSCA Resolution No. 175/2010, whereby the
Registry of Signals and Producers was implemented.
- The procedure provided under AFSCA Resolution No. 464/2010 (currently ENACOM Resolution No.
5,264/2016), which established the obligation to request network authorization pursuant to Articles 62 and
63 of Law No. 26,522.
- The procedure provided under AFSCA Resolution No. 630/2010, which approved the Rules governing the
Public Registry of Advertising Agencies and Producers. Such Resolution is aimed at regulating the sale of
advertising spaces on broadcasting services, encompassing both Advertising Agencies with respect to the
services governed by Law No. 26,522, as well as companies acting as intermediaries for the sale of
advertising on such services.
- The procedure provided under Resolution No. 1/2011 issued jointly by AFSCA and the Argentine Federal
Revenue Service, whereby they implemented a new procedure for the payment of the tax applicable to
broadcasting services.
- The procedure provided under AFSCA Resolution No. 979/2013, which requires broadcast television
licensees to report in the form of an affidavit the list of national feature films and telefilms for which they
have acquired broadcasting rights, ordering that these films be broadcast in conformity with article 67 of
the LSCA.
- The procedure provided under AFSCA Resolution No. 1,502/2014, amended by ENACOM Resolution No.
1,230/2020, which requires the submission of an Annual Affidavit of Audiovisual Communication Services,
through a website created to such end by the enforcement authority.
9.6. Award of a Digital Channel
Through Resolution No. 1,329/AFSCA/2014, which amended Resolution No. 1,047/AFSCA/2014, 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.
Through this legal framework, which was subsequently supplemented by Resolutions No. 24/AFSCA/2015,
35/AFSCA/2015 and No. 39/AFSCA/2015 (among others), the rights of the current broadcast television
licensees could be infringed. These rights should be preserved intact as established in 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 owned by third parties.
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 in due time, 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.
The subsidiaries of the Company that hold broadcast television licenses were awarded a digital channel to
render terrestrial digital television services under the legal regime described above. The following are the
Resolutions that determined the final award of each of the digital channels:
• Resolution No. 10,090/ENACOM/2016 (as amended by Resolution No. 1631-ENACOM/2017) awarded
Canal 33.1 to ARTEAR as holder of LS 85 TV CANAL 13 DE BUENOS AIRES
• Resolution No. 35/AFSCA/2015 awarded Canal 27.1 to TELECOR S.A.C.I. as holder of LV81 TV CANAL
12 DE CÓRDOBA.
• Resolution No. 381/AFSCA/2015 awarded Canal 27.1 to Bariloche TV as holder of LU 93 TV CANAL 6
DE BARILOCHE.
• Resolution No. 236/AFSCA/2015 awarded Canal 28.1. to Teledifusora Bahiense S.A. as holder of LU81
TV CANAL 7 DE BAHÍA BLANCA
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GRUPO CLARÍN S.A.
9.7. Decree No. 690/20 – Amendments to the LAD
On August 22, 2020, the National Executive Branch issued Decree No. 690/2020, whereby it amended the
Digital Argentina Act.
Within the amendments introduced, ICT services – fixed and mobile telephony, subscription television and
Internet – and the access to telecommunications networks for and between licensees are now deemed
“essential and strategic public services provided on a competitive basis”, and their effective availability shall be
guaranteed by ENACOM.
The prices of essential and strategic public ICT services provided on a competitive basis, the prices of the
services provided under the Universal Service and of those determined by ENACOM based on reasons of
public interest, shall be regulated by said agency.
The Decree also provides that ENACOM shall establish, in the respective regulations, the Mandatory Universal
Basic Provision of ICT services.
It also provided for the suspension of price increases or modifications established or announced from July 31,
2020 to December 31, 2020 by ICT licensees.
As of the date of these consolidated financial statements, the Decree has been ratified by the Argentine
Congress under the terms of Law No. 26,122.
On December 21, 2020, Resolutions Nos. 1466/2020 and 1467/2020 were published in the Official Gazette,
whereby the ENACOM regulated Decree No. 690/2020.
Resolution No. 1,466/2020 provides that ICT Services Licensees that render Internet access, subscription
broadcasting services by physical, radio-electric or satellite link, and fixed and mobile telephony services -in all
cases in their different and respective modalities- may increase up to FIVE PERCENT (5%) their retail prices
as from January 2021. In order to establish the percentages approved, licensees shall take as reference the
prices effective as of July 31, 2020. Said Resolution also provides that ICT Services Licensees may request on
an exceptional basis price increases exceeding 5% in accordance with the provisions of Article 48 of the LAD.
Said Resolution also provides that ICT Services Licensees that hold registration for Internet Access Value
Added Service (SVA-INT, for its Spanish acronym); subscription broadcasting services by physical and/or radio-
electric link (SRSVFR, for its Spanish acronym) and audiovisual communication subscription services by
satellite link (DTH); shall notify the Enforcement Authority about any and all changes in retail prices they intend
to make to their plans, prices and commercial terms in effect, SIXTY (60) calendar days in advance of their
implementation.
Resolution No. 1467/2020 regulates the Mandatory Universal Basic Service set forth by Decree No. 690/2020
for the different services provided by ICT Services Licensees, establishing the price and characteristics of each
plan.
Said Resolution also sets out the persons that are eligible to receive those services.
It should be noted that subscription television service licensees are under the obligation to apply discounts to a
plan and programming grid that already exist, which prevents them from creating a specific and less expensive
grid to comply with the Mandatory Universal Basic Service.
Since ARTEAR owns several cable tv signals and is therefore a provider of contents to subscription television
services via physical, radio-electric or satellite link, it is currently evaluating the impact that this regulation and
its implementation may have on its operations.
9.8. New General Rules Governing Physical and/or Radio Electric Link Subscription Broadcasting
Services
ENACOM Resolution No. 1,491/2020 issued on December 24, 2020 approved the new General Rules
Governing Physical Radio-Electric and/or Satellite Link Subscription Broadcasting Services.
Even though the new General Rules maintain the onerosity of all the broadcast television services and signals
that fall within the scope of the “must carry” regime (signals and services subject to mandatory retransmission)
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GRUPO CLARÍN S.A.
by the providers of subscription television services, they introduce the concept of “fair, equitable and reasonable
price” and implement a dispute resolution procedure in case of disagreement between signal holders and
distributors (by physical, radio-electric or satellite link) to be brought before the ENACOM, whereby the parties
are deemed to have voluntarily accepted to be subject to this procedure.
In addition, the General Rules provide that in the event that signal holders and physical, radio-electric and/or
satellite link subscription television licensees do not settle their dispute, distributors shall include the signal in
the programming grid at the price set by ENACOM’s Board based on the information gathered during the
proceeding.
It should be noted that both the price and the settlement procedure is applicable to any signal, including those
which are not subject to mandatory retransmission.
In addition, the General Rules also provide that the commercialization of one signal may not be conditional on
the acquisition of other signals and, in the case of sales of signal packages, the price must include a breakdown
of the price of each of the signals included in the package.
ARTEAR’s legal advisors believe that the ENACOM is not empowered to set the price of a signal, regardless
of whether or not it is a signal subject to mandatory retransmission, and that it would be arbitrary and
unconstitutional if the agency imposed a price on the owner of contents that does not voluntarily agree to the
settlement proceeding.
9.9. Administrative Sanction Proceedings
Through Resolution No. 661/AFSCA/2014, the ENACOM approved the current Regime for the Grading of
Penalties, the General Rules on the procedures to be followed for the substantiation of summary proceedings
initiated due to infringements of the Audiovisual Communication Services Law, an Installment Plan Regime to
be applied to the infringements subject to fines committed from November 21, 2002 up to and including June
23, 2010, within the framework of the effectiveness of Resolution No. 830/COMFER/02 and Law No. 22,285
and an Option for the new Regime for the Grading of Penalties (fines) for infringements committed while
Resolution No. 324/AFSCA/2010 was still in effect.
ARTEAR made a filing with AFSCA to request the assessment of the fines that would be applicable to
infringements committed from November 21, 2002 to June 23, 2010 under the regime set forth in Resolution
No. 830/COMFER/02 in order to decide whether to request authorization to adhere to the installment plan
regime provided by Resolution No. 661/AFSCA/2014. In addition, ARTEAR made a filing with AFSCA to request
the assessment of the fines that would be applicable to infringements committed from June 24, 2010 to June
11, 2014, i.e., the period during which the regime provided under Resolution No. 324/AFSCA/2010 was in effect,
in order to decide whether to make use of the option provided by Resolution No. 661/AFSCA/2014, which allows
broadcasters to adhere to the installment plan regime that is most beneficial in each case. In response to said
filings, the Enforcement Authority notified ARTEAR of the fines assessed on the infringements committed from
November 21, 2002 to June 23, 2010. ARTEAR requested authorization to adhere to the payment plan regime
payable in up to 60 installments for all those infringements over which the Enforcement Authority abandoned
all administrative and judicial proceedings. AFSCA notified ARTEAR of the applicable fines in the period during
which Resolution No. 324/AFSCA/2010 was in effect, calculating those fines under both regimes, the one
approved through Resolution No. 324/AFSCA/2010 and the one approved under Resolution No.
661/AFSCA/2014. Therefore, ARTEAR made a filing exercising the option to pay those fines calculated under
the regime established by Resolution No. 661/AFSCA/2014, which allows for the assessment of significantly
more beneficial amounts. In both cases, ARTEAR had booked a provision for the amounts assessed and
notified by AFSCA included in the payment plan.
The payment agreements that had been delivered by AFSCA were deemed to enter into effect as of July 2,
2015. ARTEAR was authorized to adhere to the payment plan relating to infringements committed between
November 21, 2002 and 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.
ARTEAR is currently paying the installments of both payment plans and receives and pays in due time and
form the fines corresponding to the summary proceedings initiated after June 11, 2014 under the Sanction
Regime in effect established by Resolution No. 661-AFSCA/14.
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GRUPO CLARÍN S.A.
Through Resolution No. 2,882/ENACOM/2019, as amended by Resolution No. 2,984/2019, the ENACOM
amended the Regime for the Grading of Penalties approved by Resolution No. 661/AFSCA/2014. The
amendments resulted mainly in a reduction of the tax rates to be applied to the calculation of the penalties for
infringement of Law No. 26,522, and a reduction of the fines imposed whenever infractions are committed in
shows produced by producers that are duly registered in the Registro de Señales y Productoras (Registry of
Signals and Producers), which will be charged with such infractions.
ARTEAR made a filing with the ENACOM requesting the assessment of fines applicable to the infringements
committed from July 2014 up to and including December 2018 and requested the adherence to the installment
payment plan established under Resolution No. 2,882/ENACOM/2019, with respect to those summary
proceedings on which information was requested and sanctions were imposed. The aggregate amount of the
fines assessed for that period with respect to the summary proceedings already resolved is of $2,343,755.70,
plus interest accrued from the payment plan of 60 installments. To date, the ENACOM has not issued a decision
yet on the request for adherence to the payment plan.
NOTE 10 - CALL OPTIONS
ARTEAR
Pursuant to ARTEAR’s acquisition of 85.2% of its subsidiary Telecor’s capital stock in 2000, Telecor’s sellers
have an irrevocable put option of the remaining 755,565 common, registered, non-endorsable shares,
representing 14.8% of the capital stock and votes of Telecor, for a 16-year term as from March 16, 2010 at a
price of US$ 3 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 US$ 4.8 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, February 21, 2017 and on November 27, 2019, 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, from such date to March 16, 2021,
and from such date to March 16, 2024, respectively.
The balances arising from the put option mentioned above are disclosed under the item Other Non-Current
Liabilities of the statement of financial position, with an offsetting entry under Other Reserves and Non-
Controlling Interest under Equity.
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 financial debt and equity balances.
As part of this process, Grupo Clarín monitors its capital structure through the financial debt-to-equity ratio,
which is equal to the quotient of its net financial debt (Financial Debt less Cash and Cash Equivalents) divided
by its adjusted EBITDA.
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GRUPO CLARÍN S.A.
The financial debt-to-equity ratio for the reporting years is as follows:
Financial Debt (i)
Less: Cash and Cash Equivalents
Cash and Banks
Other Current Investments
Net Financial Debt (ii)
Adjusted EBITDA
Debt-to-Equity Ratio (ii)
December
31, 2020
December
31, 2019
1,713
(1,294)
(1,493)
(1,074)
3,246
(0.33)
2,548
(2,050)
(962)
(464)
2,249
(0.21)
(i)
(ii)
Long-term and short-term loans, including derivatives and financial guarantee agreements.
As of December 31, 2020 and 2019, the cash and cash equivalents balance exceeds the amount of loans.
The financial 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.
11.1.2 Categories of Financial Instruments
Financial Assets
At amortized cost
Cash and Banks
Investments
Receivables (1) (2)
At fair value with an impact on net income
Investments
Total Financial Assets
Financial Liabilities
At amortized cost
Financial Debt (3)
Accounts Payable and Other Liabilities (4)
Total Financial Liabilities
December
31, 2020
December
31, 2019
1,294
58
10,274
1,900
13,526
1,713
7,064
8,777
2,050
214
10,587
748
13,599
2,548
7,563
10,111
(1) Does not include the allowance for doubtful accounts of approximately $ 513 million and $ 433 million, respectively.
(2) Includes receivables with related parties of approximately $ 709 and $ 833 million, respectively.
(3) Includes loans with related parties of approximately $ 17 million and $ 20 million, respectively.
(4) Includes debts with related parties of approximately $ 206 million and $ 182 million, respectively.
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.
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, 2020 and
2019:
ASSETS
Other Receivables
Trade Receivables
Other Investments
Cash and Banks
Total assets
(in millions
of Argentine pesos)
December 31, 2020
(in millions
of Argentine pesos)
December 31, 2019
36
534
733
738
2,041
34
521
91
1,513
2,159
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GRUPO CLARÍN S.A.
LIABILITIES
Financial Debt
Other Liabilities
Trade and Other Payables
Total Liabilities
1,423
60
1,249
2,732
1,909
52
1,416
3,377
Bid/offered exchange rates (Banco de la Nación Argentina) as of December 31, 2020 and 2019 were of $ 83.95
and $ 84.15 and $ 59.69 and $ 59.89; 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 $ 138 million and $ 243 million as of December 31, 2020 and 2019, respectively.
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.
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, 2020 and 2019, Grupo Clarín was exposed to interest rate risk mainly through ARTEAR,
AGEA (and its subsidiaries LVI and DLA), IESA, Radio Mitre, and GCGC. This is due to the fact that those
companies have taken loans at fixed and variable interest rates and have not entered into hedge agreements
to mitigate these risks. If interest rates had eventually been 100 basis points higher and all the variables had
remained constant, the additional estimated loss before taxes would have been of approximately $ 13 million
and $ 5 million as of December 31, 2020 and 2019, 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,
2020
December 31,
2019
Investments valued at quoted prices at closing (Level 1)
1,221
743
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 $ 122 million and $ 74 million as of December 31, 2020 and 2019, respectively.
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 $ 68 million and $ 0.6 million as of December 31, 2020
and 2019, 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 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
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GRUPO CLARÍN S.A.
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 statement of financial position.
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. In addition, and in
accordance with IFRS 9, for the calculation of the allowance for bad debts on trade receivables the Company
considers the expected credit losses over their total useful life. 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
10% and 6% of accounts receivable as of December 31, 2020 and 2019, respectively.
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.
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
Statement of Financial Position 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: 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.
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GRUPO CLARÍN S.A.
− 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.
In addition, and in accordance with IFRS 9, for the calculation of the allowance for bad debts on trade
receivables the Company considers the expected credit losses over their total useful life.
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 statement of financial position through the contractual maturity date.
The amounts disclosed in this table represent undiscounted cash flows (principal plus contractual interest).
Information as of December 31, 2020:
Maturities
Financial
Debt
Other
debt
Matured
Without any established term
First Quarter 2021
Second Quarter 2021
Third Quarter 2021
Fourth Quarter 2021
More than 1 year
-
3
269
59
38
57
1,625
2,051
1,849
592
3,326
767
32
16
338
6,920
Information as of December 31, 2019:
Maturities
Financial
Debt
Other
debt
Matured
Without any established term
First Quarter 2020
Second Quarter 2020
Third Quarter 2020
Fourth Quarter 2020
More than 1 year
95
1
583
723
71
15
1,508
2,996
1,500
915
4,101
719
38
33
456
7,762
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:
Assets
Current Investments
Assets
Current Investments
December 31,
2020
Quoted Prices
(Level 1)
Other Significant
Observable Items
(Level 2)
1,900
1,221
679
December 31,
2019
Quoted Prices
(Level 1)
Other Significant
Observable Items
(Level 2)
749
743
6
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GRUPO CLARÍN S.A.
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 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.
The following table shows the estimated fair value of non-current financial liabilities:
December 31, 2020
December 31, 2019
Book Value
Fair Value
Book Value
Fair Value
Non-Current Financial Debt
1,440
1,194
1,224
938
NOTE 12 - INTERESTS IN SUBSIDIARIES AND AFFILIATES
a.
In view of the adverse macroeconomic situation prevailing in Argentina, and in particular that of the home
appliances sales sector, in October 2019, EPN had to close its retail stores that sold home appliances and
electronic products under the brand Meroli in the province of Córdoba.
EPN decided to close them in order to avoid worsening its financial position and to ensure the fulfillment of
all the obligations towards its personnel.
Based on the above, during 2019, EPN recorded allowances for impairment of tax credits, property, plant
and equipment and intangible assets for $ 172 million ($ 234 million in constant currency as of December
31, 2020), which were charged to Other Income and Expenses, net, and an allowance for impairment of
deferred tax assets for $ 193 million ($ 263 million in constant currency as of December 31, 2020), which
was charged to Income Tax.
b. During 2019, AGEA made contributions in Impripost for $ 35 million ($ 51.5 million in constant currency as
of December 31, 2020), through the capitalization of a credit that the Company held with such company.
c. On October 13, 2020, AGEA and Botón de Pago S.A. incorporated a company under the corporate name
Billetera Móvil S.A. (“BIMO”) mainly engaged in the provision of electronic payment services. BIMO has a
capital stock of $ 1,000,000, represented by 1,000,000 common shares with nominal value of $ 1 each,
entitled to one vote per share. AGEA holds a 50% interest in the capital stock and votes of BIMO. On January
18, 2021, BIMO was registered with the IGJ.
NOTE 13 - RESERVES, ACCUMULATED INCOME AND DIVIDENDS
13.1 – Capital stock
Upon the Company’s public offering during 2007, the capital stock amounted to $ 287,418,584, represented by:
-
-
75,980,304 Class A common, registered, non-endorsable shares, with nominal value of $ 1 each and
entitled to five votes per share.
186,281,411 Class B book-entry common shares, with nominal value of $ 1 each and entitled to one
vote per share.
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GRUPO CLARÍN S.A.
-
25,156,869 Class C common, registered, non-endorsable shares, with nominal value of $ 1 each and
entitled to one 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, authorizing the Company to (i) offer publicly its Class
B book-entry common shares; (ii) list its Class B book-entry common shares; and (iii) list its registered non-
endorsable Class C common shares, trading of which was suspended due to restrictions on transfers set forth
in the Company’s Bylaws. Also in the last quarter of 2007, the Company was granted authorization to list its
GDSs in the LSE. Each GDS represents two of the Company’s Class B common shares.
On April 27, 2017, the IGJ registered the Corporate Reorganization Transaction which consisted in the partial
spin-off of the Company for the creation of a new company called Cablevisión Holding S.A. As a result of the
Spin-off of Grupo Clarín, its equity was reduced pro rata and the Company’s Class A, Class B and Class C
shares were canceled in exchange for a set of shares of the same class and with substantially the same rights
distributed by Cablevisión Holding.
Consequently, the Company’s equity was reduced, effective as of the Effective Date of the Spin-off (May 1,
2017), to $ 106,776,004, represented by:
-
-
-
28,226,683 Class A common, registered, non-endorsable shares, with nominal value of $ 1 each and
entitled to five votes per share.
69,203,544 Class B book-entry common shares, with nominal value of $ 1 each and entitled to one
vote per share.
9,345,777 Class C common, registered, non-endorsable shares, with nominal value of $ 1 each and
entitled to one vote per share.
Having obtained all of the required regulatory authorizations, on August 30, 2017, Grupo Clarín and Cablevisión
Holding exchanged their shares pursuant to the exchange ratio approved by Grupo Clarín's shareholders at the
time of approval of the spin-off process. As a result of the exchange of shares and payment of fractions in cash,
the Company held 1,485 treasury shares. During 2020, the Company sold all those shares, and does not have
any treasury shares as of the date of these financial statements.
13.2 – Reserves, accumulated income and dividends
Balances at the beginning of the year:
Legal Reserve
Retained Earnings
Other Reserves
Voluntary Reserves
Total
Changes in minority interest in a subsidiary
Sale of Treasury Stock
Absorption of Retained Earnings with Paid-in Capital
Loss for the year
Balance at the end of the year
a. Grupo Clarín
December 31,
2020
December 31,
2019
-
(2,052,076,145)
(161,470,524)
1,493,476,624
171,253,444
(13,863,988,759)
(161,470,524)
12,547,288,854
(720,070,045)
(11,709,643)
52,794
2,052,076,145
(274,351,674)
1,045,997,577
(1,306,916,985)
-
-
2,638,923,085
(2,052,076,145)
(720,070,045)
On April 30, 2019, at the Annual Ordinary Shareholders' Meeting of the Company, the shareholders decided,
among other things, to absorb the negative balance of retained earnings as of December 31, 2018 of
$ 6,619,920,208 ($ 13,863,988,759 in constant currency as of December 31, 2020), as follows: (i) the full
reversal of the Voluntary Reserve for future dividends for $2,270,048,609 ($ 4,754,125,036 in constant currency
as of December 31, 2020); ii) the full reversal of the Voluntary Reserve for illiquid results for $ 1,216,090,908
($ 2,546,838,957 in constant currency as of December 31, 2020); iii) the full reversal of the Voluntary Reserve
to provide financial aid to subsidiaries and in connection with the Audiovisual Communications Services Law
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GRUPO CLARÍN S.A.
for $ 851,718,153 ($ 1,783,739,152 in constant currency as of December 31, 2020); iv) the full reversal of the
Voluntary Reserve to ensure the liquidity of the Company and its Subsidiaries for $ 940,230,491
($ 1,969,109,085 in constant currency as of December 31, 2020); v) the full reversal of the Legal Reserve for
$ 81,771,859 ($ 171,253,444 in constant currency as of December 31, 2020) and, vi) the partial reversal of the
Additional Paid-in capital for $ 1,260,060,188 ($ 2,638,923,085 in constant currency as of December 31, 2020).
On April 30, 2020, at the Annual Ordinary Shareholders' Meeting of Grupo Clarín S.A., the shareholders
decided, among other things, to absorb the negative balance of retained earnings as of December 31, 2019
through the partial reversal of the Paid-in capital.
b. ARTEAR
On April 22, 2019, the shareholders of ARTEAR decided, among other issues, to appropriate retained earnings
for the year ended December 31, 2018 in the amount of $ 25 million ($ 52 million in constant currency as of
December 31, 2020) to the voluntary reserve. In addition, the shareholders decided to delegate to the Board of
Directors the power to reverse, totally or partially, the reserve to pay dividends.
On May 28, 2020, the shareholders of ARTEAR decided, among other issues, to appropriate the accumulated
retained earnings as of December 31, 2019 that amounted to $ 341 million in historical currency as of that date
($ 464 million in constant currency as of December 31, 2020) as follows: (i) $ 157 million ($ 213 million in
constant currency as of December 31, 2020) to increase the Legal Reserve and (ii) $ 184 million ($ 251 million
in constant currency as of December 31, 2020) to increase the voluntary reserve. In addition, the shareholders
decided to delegate to the Board of Directors the power to partially reverse the Voluntary Reserve up to $ 250
million to pay dividends.
At the General Extraordinary Shareholders Meeting held on September 9, 2020, the shareholders of ARTEAR
approved the partial reversal of the Voluntary Reserve in the amount of US$ 6,000,000 (equivalent to
$ 448,230,000 as of that date at the exchange rate prevailing on the previous day and $ 499,001,236 in constant
currency as of December 31, 2020). Such amount was appropriated to the distribution of dividends, of which
approximately $ 434.22 million ($ 438.40 million in constant currency as of December 31, 2020) belonged to
the Company, which were collected in the same month.
c. TRISA
In April 2019, the shareholders of TRISA decided, among other things, to distribute dividends in the amount of
$ 173 million ($ 313 million in constant currency as of December 31, 2020) of which $ 86.5 million ($ 157 million
in constant currency as of December 31, 2020) corresponds to the Company under its indirect holding in that
company. As of December 31, 2019, TRISA paid all of the distributed dividends.
In April 2020, the shareholders of TRISA decided, among other things, to approve the distribution of dividends
in the amount of $ 170 million ($ 212 million in constant currency as of December 31, 2020) of which $ 85 million
($ 106 million in constant currency as of December 31, 2020) corresponds to the Company on account of its
indirect holding in that company. As of December 31, TRISA had paid all of the distributed dividends.
NOTE 14 - NON-CONTROLLING INTEREST
Balances as of January 1
Changes in Other Reserves
Equity in the Earnings from Associates 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
December 31,
2020
December 31,
2019
281,175,171
11,709,643
(190,698,877)
(6,216,445)
13,180
95,982,672
255,346,645
-
65,645,114
(33,076,906)
(6,739,682)
281,175,171
As of December 31, 2020 and 2019, the non-controlling interests are not significant on an individual or a joint
basis.
NOTE 15 – BALANCES AND TRANSACTIONS WITH RELATED PARTIES
The following table contains the outstanding balances with related parties:
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GRUPO CLARÍN S.A.
Other Receivables
Non-Current
Other Related Parties
Under Joint Control
Current
Under Joint Control
Other Related Parties
Trade Receivables
Current
Under Joint Control
Other Related Parties
Trade and Other Payables
Current
Under Joint Control
Other Related Parties
Financial Debt
Current
Under Joint Control
Other Liabilities
Current
Other Related Parties
December 31,
2020
December 31,
2019
4,200
-
4,200
51,797,390
29,383,584
81,180,974
5,718
39,821,122
39,826,840
41,726,194
45,235,797
86,961,991
467,016,391
160,732,050
77,060,814
629,979,389
627,748,441
707,040,203
10,785,406
189,573,161
200,358,567
23,360,617
145,362,160
168,722,777
17,086,921
17,086,921
19,861,681
19,861,681
5,840,731
5,840,731
13,939,609
13,939,609
The following table shows the operations with related parties for the years ended December 31, 2020 and
2019:
Under Joint Control
Other Related Parties
Item
December
31, 2020
December 31,
2019
Advertising Sales
Printing Services Sales
Other Sales
Printing and Distribution Costs
Interest Income
Interest on Financial Debt
Other Purchases
Other Revenues
Advertising and Promotion Expenses
27,596,118
4,161,344
393,850,219
(35,326,624)
22,833,564
(9,190,993)
(263,681)
67,937,323
(8,597,185)
Advertising Sales
Printing Services Sales
Circulation Sales
Television Signals Sales
Other Sales
Fees for Services
Services and Satellites Expenses
Communication Expenses
Other Purchases
Other Expenses
462,704,031
21,739,696
4,173,000
1,415,463,747
821,027,986
(35,122,306)
(31,274,311)
(58,236,614)
(415,241,376)
(9,082,026)
60,183,352
165,548,113
422,547,643
(85,759,932)
22,330,130
(4,401,285)
(374,474)
122,462,053
(15,406,544)
572,782,211
42,103,177
3,883,028
1,496,061,112
963,804,532
(10,546,975)
(43,905,202)
(51,600,931)
(867,568,615)
(4,870,498)
The fees paid to the Board of Directors and the Upper Management of Grupo Clarín for the years ended
December 31, 2020 and 2019 amounted to approximately $ 683 million and $ 741 million, respectively.
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GRUPO CLARÍN S.A.
NOTE 16 – EARNINGS PER SHARE
The following table shows the net income (loss) and the weighted average of the number of common shares
used in the calculation of basic earnings per share:
December 31,
2020
December 31,
2019
Net Income used in the Calculation of Basic Earnings per Share:
Weighted Average of the Number of Common Shares used in the Calculation
of Basic Earnings per Share
Loss per Share
(274,351,674)
(2,052,076,145)
106,774,807
(2.57)
106,774,519
(19.22)
The weighted average of outstanding shares for the year ended December 31, 2020 was 106,774,807. Since
no debt securities convertible into shares were recorded, the same weighted average should be used for the
calculation of diluted earnings per share.
NOTE 17 - COVENANTS, SURETIES AND GUARANTEES PROVIDED
As of December 31, 2020, the following covenants, sureties and guarantees were in effect:
a.
IESA is subject to contractual restrictions on the transfer of its equity interest in TRISA and Tele Net Image
Corp.
b. AGEA holds a joint and several guarantee for the loan granted by ICBC to AGL.
c. The Company became guarantor of certain financial obligations of AGEA and some of its subsidiaries with
Banco Itaú Argentina S.A.
d. The Company became guarantor of certain obligations relating to the purchase of supplies by AGEA,
CIMECO, Tinta Fresca and OSA for up to EUR 12 million, until December 2020. It was not renewed after
the closing of the year.
NOTE 18 - 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.
In addition, such plan provides for certain special conditions for those managers who were in the “executive
payroll” before January 1, 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, 2020, such
supplementary contributions made by the Company on a consolidated basis amount to approximately $ 35
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.
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GRUPO CLARÍN S.A.
NOTE 19 – OPERATING LEASES
19.1 The Company as Lessee
As of December 31, 2020 and 2019, 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 $):
1 year
Between 1 and 5 years old
19.2 The Company as Lessor
December
31, 2020
75
39
114
December
31, 2019
106
76
182
The total amount of minimum future collections for non-cancellable operating leases of certain property is the
following (in millions of $):
1 year
Between 1 and 5 years old
NOTE 20 – TAX REFORM IN ARGENTINA
Income Tax
December
31, 2020
14
29
43
December
31, 2019
19
63
82
On December 29, 2017, the National Executive Branch enacted Law No. 27,430 - Income Tax. This law
introduced several changes in the treatment of income tax, among which the following are the most important:
(i) Income tax rate: Income tax rates for Argentine companies were reduced from 35% to 30% for fiscal periods
beginning as from January 1, 2018 until December 31, 2019, and to 25% for fiscal periods beginning on or after
January 1, 2020.
On December 23, 2019, Law No. 27,541 (the Social Solidarity and Production Reactivation Law) was enacted,
regulated under Decree No. 99/2019, whereby the tax rate reduction from 30% to 25% was suspended until
fiscal years beginning on or after January 1, 2021.
(ii) Tax on Dividends: The new law introduces a tax on dividends or profits distributed, among others, by
Argentine companies or permanent establishments to: Individuals, undivided estates or foreign beneficiaries,
with the following considerations: (a) dividends derived from profits generated during fiscal years on or after
January 1, 2018 and until December 31, 2019 will be subject to a 7% withholding; and (b) dividends derived
from profits generated during fiscal years beginning on or after January 1, 2020, will be subject to a 13%
withholding.
Dividends derived from profits generated up to and including the fiscal year preceding the fiscal year beginning
on or after January 1, 2018 continued to be subject, for all the beneficiaries of those dividends, to a 35%
withholding on the dividends distributed in excess of the accumulated taxable income (transition period of the
equalization tax).
Law No. 27,541 mentioned above maintained the 7% withholding until fiscal years beginning on or after January
1, 2021.
(iii) Optional Revaluation for Tax Purposes: The law provides that companies may opt to make a revaluation for
tax purposes of assets located in Argentina that generate taxable income. The special tax on the amount of the
revaluation depends on the asset: 8% for real estate that does not qualify as inventories, 15% for real estate
that qualifies as inventories, and 10 % for chattel and other assets. The taxpayer that opts for the special
revaluation regime must do so for all the assets that belong to the same category. The special revaluation tax
may not be deducted from income tax, and the taxable income generated by the revaluation is not subject to
income tax. The Company and its subsidiaries did not opt for that regime.
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GRUPO CLARÍN S.A.
(iv) Inflation Adjustment of Deductions: Acquisitions or investments made in fiscal years beginning on or after
January 1, 2018 are restated for inflation based on the percentage variations of the Consumer Price Index (IPC,
for its Spanish acronym) published by the National Institute of Statistics and Census. Such adjustment will
increase deductible amortization and tax cost in the event of a sale.
(v) Inflation Adjustment: Notwithstanding the above-mentioned regime, Law No. 27,430 and its amending Law
No. 27,468 provide that, effective as from fiscal years beginning on or after January 1, 2018, the inflation
adjustment procedure set out in Title VI of the income tax law shall be applicable in fiscal years in which the
variation of IPC is higher than 55%, 30% and 15% for fiscal years 2018, 2019, 2020, respectively. Said law also
provided that the acquisitions or investments made as from fiscal years beginning as from January 1, 2018
shall be adjusted by the CPI.
As of December 31, 2020, the variation of the IPC was 36.14%. Therefore, the Company has calculated the
income tax charge taking into consideration the inflation adjustment for tax purposes.
In addition, said law provided that the positive or negative inflation adjustment, as the case may be,
corresponding to the first, second and third fiscal years beginning on or after January 1, 2018, that must be
calculated if the triggers set forth in the bill occur, shall be allocated as follows: one third in that fiscal period,
and the other two thirds, equally, in the immediately following two fiscal periods.
Law No. 27,541 mentioned above provided that the application of the inflation adjustment for tax purposes
corresponding to the first and second fiscal years beginning on or after January 1, 2019 must be allocated,
equally, during six fiscal years.
Tax on assets
Law No. 27,260 repealed the tax on assets for fiscal years beginning on or after January 1, 2019.
Value Added Tax
Through Decree No. 1,094/18, the Executive Branch enacted Law No. 27,467, which introduces amendments
regarding value added tax (“VAT”):
(i) Allocation of Social Security Contributions: Entities may allocate employer’s contributions on the payroll as
a tax credit against VAT. These contributions must have been accrued in the fiscal period and effectively paid
at the moment of submitting the VAT return. Qualifying entities are those engaged in the following activities:
broadcast television or physical link and/or radio electric link subscription television services, audio
broadcasting, cable television signals, newspaper, magazine or periodical publishing companies or companies
engaged in digital journalism, and the distributors of those publishing companies. In case the payment of that
amount is made after the time provided, entities may allocate employer’s contributions on the payroll as a tax
credit against VAT in the tax return for the fiscal period in which social contributions were paid. As provided
above, when the salaries that give rise to the employer’s contributions that may be allocated as a tax credit
against VAT are also related to other activities outside the scope of this benefit, the amounts of those
contributions will be allocated pro rata for the sole purpose of calculating the ratable portion that qualifies for
the benefit. The amounts of such employer’s contributions shall be counted as a VAT credit up to the amount
of the output tax for the relevant period, before allocating the other tax credits. It shall apply to qualifying
amounts as from January 1, 2019.
(ii) VAT Exemption: As from January 1, 2019, the sales, leases related to the development, construction or
manufacturing of chattel at the request of a third party, imports and leases and services relating to the following
items, are exempted from VAT: books, brochures and similar printed products, including book series or loose
leaves that make up the whole work or part of it, and newspapers, magazines and similar periodic printed
publications, as well as subscriptions to digital periodic editions of online information, throughout the entire
marketing and distribution chain, in all cases irrespective of the support or means used for their dissemination.
The distribution, classification, delivery and/or return of newspapers, magazines, and periodical publications
provided to entities engaged in editorial production do not qualify for VAT exemption.
(iii) Special Treatment. Tax Credit related to newspapers, magazines, digital editions and books: The entities
engaged in editorial printing and/or production of books, brochures and similar printed publications, or of
newspapers, magazines and periodical publications, as well as digital journalistic editions of online information
and their distributors, to the extent all of them qualify for the tax exemption under the VAT Law as from January
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GRUPO CLARÍN S.A.
1, 2019, may allocate the tax credit generated by transactions that qualify for the above-mentioned exemption
against the output tax generated by other transactions subject to VAT. Any unused balance can be credited
against other taxes controlled by AFIP, or be returned or transferred to responsible third parties in the manner,
terms and conditions established by the AFIP to such end.
Tax on Personal Assets (substitute taxpayer):
Law No. 27,541 (the Social Solidarity and Production Reactivation Law), regulated under Decree No. 99/2019,
increased to 0.5%, for fiscal year 2019 onwards, the rate to be applied by Argentine issuers in their capacity as
substitute taxpayers for shareholder individuals residing in Argentina or abroad, on the value of the shares.
NOTE 21 - LAW No. 26,831 CAPITAL MARKETS
Capital Markets Law – Law No. 26,831, as amended
On December 28, 2012, Capital Markets Law No. 26,831 was published in the Official Gazette. This law
eliminated the self-regulation of the capital market, granted new powers to the CNV, and repealed Law No.
17,811 and Decree No. 677/01, among other regulations. Law No. 26,831 became effective on January 28,
2013. As from its effective date, the Public Tender Offer regime applies to all listed companies.
Productive Financing Law
On May 11, 2018, Productive Financing Law No. 27,440 was published in the Official Gazette. This law
introduced several amendments to the Capital Markets Law No. 26,831 regarding the extent of the powers of
the CNV; the exercise of preemptive rights on shares offered through public offering in the case of capital
increases; private placements; public tender offers; the jurisdiction of the federal commercial courts of appeals
to review the resolutions issued or sanctions imposed by the CNV, among other amendments.
With respect to public tender offers, under the previous regime, the offeror was obliged to formulate a “fair”
price to be set by weighing the results of different company valuation methods, with a minimum floor related to
the average market price for the six-month period immediately preceding the date of the agreement. Pursuant
to the amendments introduced by Law No. 27,440 to the Capital Markets Law, the obligation is objective and
consists in offering the higher of two existing prices: the price paid or agreed by the offeror during the 12 months
immediately preceding the first day of the public tender offer period, and the average price of the securities
subject to the offer during the semester immediately preceding the date of the announcement of the transaction
under which the change of control is agreed upon.
On December 28, 2018, General Resolution No. 779/2018, whereby the CNV established the regulatory
framework applicable to public tender offers, was published in the Official Gazette.
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 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.
NOTE 22 - IMPACT OF CORONAVIRUS
Given the magnitude of the spread of the virus called “Coronavirus” (COVID-19) at a global level, in Argentina,
the National Government implemented a series of measures aimed at reducing the movement of the population,
ordering the Mandatory and Preventive Social Isolation (MPSI) as from March 20, 2020, allowing the movement
of only those people involved in the provision/production of essential or exempted services and products. The
Government made changes to and extended such isolation measures in different stages by geographical
regions and may extend them as deemed necessary according to the epidemiological situation of each city.
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GRUPO CLARÍN S.A.
On November 9, 2020, the National Government ordered the Mandatory and Preventive Social Distancing for
all persons who reside or transit in urban centers and in districts and departments of the Argentine provinces
that do not have a sustained community transmission of the virus and they positively verify certain
epidemiological and sanitary parameters. The locations where these parameters were not met continued with
the Mandatory and Preventive Social Isolation. During the effectiveness of the Mandatory and Preventive Social
Distancing, several services and activities are still declared “essential” as they had been defined during the
effectiveness of the Mandatory and Preventive Social Isolation.
During this year, the Company has carried out its activities under challenging circumstances derived from the
pandemic. Even though the print media, radio and audiovisual communication services, which are the Group's
main businesses, have been exempted from the MPSI, the Company has experienced or is expected to
experience the following impacts:
- A decline in the sale of advertising in all the media of Grupo Clarín, mainly due to the cuts in the
customers’ advertising budgets. However, ARTEAR is showing a gradual and continued recovery since
September 2020 to date;
- A drop in circulation, with an impact on subscriptions as from the second quarter of the year;
- An increase in the overdue collection of receivables;
- Television audience levels were affected by the lack of production of certain contents for prime time,
which were suspended due to the pandemic. The Company expects to air contents that generally lead
to an increase in audience levels as from April 2021;
- Several difficulties that hinder our operations, such as:
o Those related to the logistics regarding the commute of employees, performers and journalists;
o The reconfiguration of some programs due to social distancing measures;
o The implementation of home office mainly for our back office staff;
o Strict sanitation, disinfection and prevention protocols at our offices;
o The incorporation of technologies required to ensure the virtual presence of talents in the
production of contents.
In order to help companies mitigate the economic impacts of the pandemic, the National Government launched
a series of financial aid measures. Among the companies that qualify for such financial aid, certain subsidiaries
of the Company have benefited from the Emergency Assistance Program for Work and Production from April
to September 2020 and, subsequently, to a lesser extent, the Program for Productive Recovery II as from
November 2020, whereby the National Government has assumed the burden of a portion of the wage costs
and has allowed for reductions/deferment of the payment of certain employers’ social security contributions.
In addition, other activities which have a smaller weight in the Group’s operations taken as a whole were heavily
affected since the MPSI entered into effect, such as the operations of Autosports, Pol-ka and Cúspide. These
companies were forced to reduce or suspend most of their operations and the commercialization of their
products. In the case of Pol-ka, the economic impacts have been very significant, because it has been unable
during 2020 to produce contents for the subsequent commercialization and, consequently, it is having difficulties
in meeting its financial, commercial and labor commitments. Therefore, the continuity of its operations may be
affected.
In addition, with respect to Pol-ka, at the Annual General Ordinary and Extraordinary Shareholders' Meeting
held in July 2020, the shareholders of that company decided to increase its equity. Within the framework of said
equity increase, and since ARTEAR exercised its preemptive and accretion rights, ARTEAR subscribed
34,476,636 non-endorsable, registered common shares with nominal value of $ 1 each, entitled to one vote
per share and with a premium of $10.58 per issued share of Pol-ka. At the time of exercising the preemptive
and accretion rights, ARTEAR paid in 25% of the value of the shares subscribed, and the remaining 75% shall
be paid in within a term of two years, pursuant to the terms of the subscription and issuance of the new shares.
As of December 31, 2020, ARTEAR paid approximately $ 387.8 million and, after the closing of the year, $ 11.4
million, thus paying the full amount subscribed.
As a result of the foregoing, the interest of ARTEAR in the capital stock and votes of Pol-Ka is of approximately
91.3%.
Pursuant to the guidelines of IAS 36, taking into consideration that the decline in activities during 2020 in the
industries in which certain subsidiaries of the Group operate, mainly the print and audiovisual production
industries, is an indication of impairment, the Company’s Management has assessed the recoverable value of
its fixed assets as of December 31, 2020.
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GRUPO CLARÍN S.A.
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, 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.
As of December 31, 2020, as a result of the recoverability assessment described above, the Company
recognized impairment losses of 100% in the goodwill held by ARTEAR in Telecor, Telba, Bariloche TV, and
Pol-Ka, and a portion of the goodwill of Patagonik, for an aggregate amount of approximately $ 1,295.7 million,
in constant currency as of such date, together with the impairment of certain assets of Pol-Ka.
The ultimate effects of COVID-19 and its impact on the global and local economy are unknown and impossible
to be reasonably predicted. However, even though the Company has suffered and is expected to suffer short
term effects, it does not expect that they will affect the continuity of the Group’s businesses.
The Board of Directors is closely monitoring the evolution of the situation and taking the necessary measures
available to preserve the safety and health of the employees and the Company’s activities.
NOTE 23 – SUBSEQUENT EVENTS
a) The events that took place subsequent to the closing of this year related to provisions and contingencies
are described in Note 8.
b) On January 13, 2021, AGEA acquired 13,429,076 common, registered, non-endorsable shares, with
nominal value of $ 1 each and entitled to one (1) vote per share, of the capital stock and votes of Urbano
Express Argentina S.A. (“Urbano”) in the amount of US$ 1,310,000 payable through the delivery of
advertising spaces and/or seconds (as the case may be) in AGEA and/or through AGEA, in certain related
companies, as established in the purchase agreement.
On the same date, AGEA sold to Urbano 36,900,000 shares representing 100% of the capital stock and
votes of Unir S.A.U for $ 90 million, which originated a credit in favor of AGEA. At the Shareholders’ Meeting
held on January 13, 2021, the shareholders of Urbano decided to approve the capitalization of such credit
of AGEA and an increase in the capital stock of $ 15,662,647 with paid-in capital of $ 74,337,353. Through
this capitalization, AGEA became the holder of 15,662,647 common, registered, non-endorsable shares,
with nominal value of $ 1 each and entitled to one (1) vote per share of Urbano.
As a result of those transactions, AGEA became the holder of 29,091,723 common, registered, non-endorsable
shares, with nominal value of $ 1 each and entitled to one (1) vote per share, representing 30% of the capital
stock and votes of Urbano. As from January 13, 2020, AGEA has significant influence over Urbano and is
conducting the necessary analyses for recording the acquisition of this associate in conformity with IAS 28.
NOTE 24 - APPROVAL OF FINANCIAL STATEMENTS
Grupo Clarín’s Board of Directors has approved the consolidated financial statements and authorized their
issue for March 11, 2021.
These consolidated financial statements for the year ended December, 31 2020, and for the purposes of their
filing with the LSE, have been approved by Grupo Clarín’s Board of Directors on April 22, 2021.
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Independent auditor’s report
To the Shareholders, President and Directors of
Grupo Clarín S.A.
Opinion
We have audited the consolidated financial statements of Grupo Clarín S.A. (“the Company”) and its subsidiaries (“the
Group”) which comprise the consolidated statement of financial position as at December 31, 2020, and the
consolidated statement of comprehensive income, consolidated statement of changes in equity, and consolidated
statement of cash flows for the year then ended, and the notes to the consolidated financial statements, which include
significant accounting policies and other explanatory information.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the
consolidated financial position of the Group as at December 31, 2020, and its consolidated financial performance and
its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards
(IFRS).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the consolidated financial
statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the Group in accordance with the International Code of Ethics for Professional Accountants
(including International Independence Standards) issued by the International Ethics Standards Board for Accountants
(IESBA Code) and the ethical requirements that are relevant to our audit of the consolidated financial statements in
Argentina. We have fulfilled our other ethical responsibilities in accordance with the IESBA Code.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
consolidated financial statements of the current period. These matters were addressed in the context of our audit of
the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
Price Waterhouse & Co. S.R.L., Bouchard 557, piso 8°, C1106ABG - Ciudad de Buenos Aires
T: +(54.11) 4850.0000, F: +(54.11) 4850.1800, www.pwc.com/ar
Price Waterhouse & Co. S.R.L. es una firma miembro de la red global de PricewaterhouseCoopers International Limited (PwCIL). Cada una de las firmas es una entidad legal
separada que no actúa como mandataria de PwCIL ni de cualquier otra firma miembro de la red.
Key audit matter
How our audit addressed the key audit matter
Impairment of Property, plant and equipment,
Intangible assets, Goodwill and Investments in
Unconsolidated Affiliates
In the Group’s Consolidated Financial Statements at
December 31, 2020, the balance of assets included in
Property, plant and equipment, Intangible assets,
Goodwill and Investments in Unconsolidated Affiliates is
$7,034,951,442, $457,786,092, $22,073,350, and
$2,688,625,846, respectively.
In particular, our audit focused on the review of the
recoverable value of the real property and goodwill
recognized in relation to the following cash generating
units (“CGU”): Telecor, Pol-Ka and Telba, and of
investments in associates: Papel Prensa and TRISA
due to the materiality of the balances at issue.
Accounting policies on “Property, plant and equipment”,
“Intangible assets”, “Goodwill”, and “Investments in
Unconsolidated Affiliates” as well as those associated
with “Impairment of non-financial assets” are detailed in
Notes 2.15, 2.16, 2.8, 2.6, and 2.17 to the Consolidated
Financial Statements, respectively.
The current scenario, largely due to the COVID-19
pandemic, has affected the industries in which the
Group operates, with a direct impact on the Group's
business and projections. This is a key issue, as
calculating the recoverable value of these assets
requires Management to make estimates and exercise
its professional judgment. In addition, a great extent of
professional judgment and efforts were required from
the auditor to evaluate Management’s cash flow
projections and test significant assumptions.
The audit procedures performed included the following,
among others:
•
•
•
•
•
•
Evaluating the procedure followed by
Management to identify the different CGUs.
Evaluating the procedure followed by
Management to estimate the value in use of
Property, plant and equipment, Intangible assets
and CGUs.
Evaluating the appropriateness of the discounted
cash flow model.
Testing the completeness, accuracy and
relevance of the underlying data used in that
model.
Evaluating the significant assumptions used by
Management, including the discount rate, the
long-term growth rate, the projected operating
profit, the value in use at the end of fixed assets
useful lives, and certain macroeconomic variables,
such as projected inflation and exchange rates.
Performing a sensitivity analysis. To verify the
appropriateness of the future cash flows used in
the calculation, among other procedures, we
compared such information with the current
budget for the one-year plan adopted by
Management and approved by the Board, and
with general and sector-specific market
expectations, including the country’s
macroeconomic expectations. Regarding the
value in use at the end of fixed assets useful lives,
the value of certain significant pieces of real
property was compared with real estate
appraisals.
Being aware that even relatively small changes in the
discount rate used may have significant effects on the
value-in-use amount thus calculated, we requested the
assistance of our valuation experts to focus our tests on
the parameters used to determine the discount rate
applied, including the weighted average capital cost,
and repeated the calculations.
Key audit matter
Advertising revenue
We have identified a critical area in relation to the timing
of revenue recognition of advertising sales because of
the nature of these services, comprising different
schemes of services provision and pricing, which
represents a significant inherent risk of misstatement,
and due to the involvement of manual activities, as part
of the business process for this revenue stream.
The accounting policies for revenue recognition are set
out in Note 2.9. to the consolidated financial statements
and the different revenues streams for the Group have
been disclosed in Note 6.1. to the consolidated financial
statements.
How our audit addressed the key audit matter
The audit procedures performed included the following,
among others:
•
•
•
•
•
•
•
Understanding the procedure performed by
Management to determine and recognize revenue
from advertising.
Evaluating the relevant information system and
the design and operational effectiveness of the
control over the capture and recording of revenue
transactions. To this end, our Information
Technology specialists have assisted us in the
audit of automated controls, including controls
over the interface between the various system
applications. We also performed tests on access
controls and change management controls for the
Group's billing systems.
Evaluating current manual controls in place over
the authorization of changes to rates, the
introduction of discounts, the effective provision of
the service, and the entry of that information into
the billing systems.
Performing tests, based on a sample of customer
invoices, on the accuracy of rates and discounts.
Performing tests on key reconciliations used by
Management to assess the completeness and
accuracy of revenue.
Performing tests on the documentation supporting
manual journal entries to revenue accounts to
identify unusual items.
Requesting confirmations based on a sample of
account receivables transactions.
Other information
The other information comprises the Annual Report. Board of Directors is responsible for the other information.
Our opinion on the consolidated financial statements does not cover the other information and we do not and will not
express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information
identified above and, in doing so, consider whether the other information is materially inconsistent with the
consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially
misstated. If, based on the work we have performed on the other information, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Board of Directors and Audit Committee for the consolidated financial
statements
Board of Directors is responsible for the preparation and fair presentation of the consolidated financial statements in
accordance with IFRS, and for such internal control as Board of Directors determines is necessary to enable the
preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the consolidated financial statements, Board of Directors is responsible for assessing the Group’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has
no realistic alternative but to do so.
Audit Committee is responsible for overseeing the Group’s financial reporting process.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in
accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism
throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit 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
Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by Board of Directors.
Conclude on the appropriateness of Board of Directors use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated
financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on
the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause
the Group to cease to continue as a going concern.
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Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
disclosures, and whether the consolidated financial statements represent the underlying transactions and events
in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Group to express an opinion on the consolidated financial statements. We are responsible for the
direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.
We communicate with the Company’s Audit Committee regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide to the Audit Committee with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be
thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with the Audit Committee, we determine those matters that were of most significance
in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We
describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication
Autonomous City of Buenos Aires, April 22nd, 2021.
PRICE WATERHOUSE & CO. S.R.L.
Alejandro Javier Rosa
Partner
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