Financial Statements For the fiscal year commenced January 1, 2011 and ended December 31, 2011, on a comparative basis

Transcription

1 Financial Statements December 31, 2011, on a comparative basis (Free Translation from the Original in Spanish for Publication in Argentina)

2 Financial Statements December 31, 2011, on a comparative basis Table of Contents (as per the system established by General Resolution No. 368/2001 of the Argentine National Securities Commission for the purpose of its submission to the Buenos Aires Stock Exchange) Annual Report Cover and its Subsidiaries Consolidated Balance Sheet Consolidated Statement of Income Consolidated Statement of Cash Flows Notes to the Consolidated Financial Statements Balance Sheet Statement of Income Statement of Changes in the Shareholders Equity Statement of Cash Flows Notes to the Financial Statements Schedules Additional Information to the Notes to the Financial Statements as required by Section 68 of the Buenos Aires Stock Exchange Regulations Information Summary Report of Independent Accountants Report of the Supervisory Committee

3 ANNUAL REPORT FISCAL YEAR JANUARY - DECEMBER 2011

4 In compliance with legal provisions and the by-laws, we submit this Annual Report, together with the Balance Sheet, Statement of Income, Statement of Changes in the Shareholders' Equity, Statement of Cash Flows and the corresponding notes and schedules, for the 17th fiscal year of the Company, ended December 31, FINANCIAL CONDITION (Information Presented in Thousands of Pesos) The fiscal year consolidated net income amounted to AR$ 411,954, while the operating income was AR$ 620,784. These figures are 28% higher when compared to those for the previous fiscal year. The Shareholders Equity amounted to AR$ 1,225,637 at the end of the year. The distribution of dividends, approved by the Ordinary Shareholders Meeting held on April 1, 2011, amounted to AR$ 82,000. At fiscal year-end, Tarjeta Naranja had 2,072,544 accounts open regarding which transactions can be conducted. Taking into consideration additional card holders, the Company has 3,096,600 million customers. Meanwhile, the number of authorized cards is 5,370,962, including Tarjeta Naranja Visa, Tarjeta Naranja Mastercard and Tarjeta Naranja American Express. SOURCES OF FINANCING As regards major debt issuances and sources of financing during the fiscal year, Tarjeta Naranja carried out the following transactions. Notes ( Obligaciones Negociables ): Within the framework of the Global Program for the Issuance of Notes ( Obligaciones Negociables ), the following placements were carried out: Class XIII Notes for US$ 200 million. Class XIV Series I Notes for AR$ 20 million. Class XIV Series II Notes for AR$ 79.9 million. Class XV Series I Notes for AR$ 65.1 million. Class XVI Series I Notes for US$ 21.1 million. Class XVI Series II Notes for US$ 13.9 million. Hedging Transactions to Guarantee Exchange Rates: At fiscal year-end, we have hedging transactions with a forward exchange rate set for amounts equivalent to the foreign currency debt. Bank Loans: The Company entered into the following loan agreements: 2

5 Banco Supervielle, for AR$ 25 million, maturing in 6 months. Banco Supervielle, for AR$ 25 million, maturing in 1 year. Banco Itaú Argentina, for AR$ 11 million, maturing in 2 years. Banco Patagonia, for AR$ 15 million, maturing in 1 year. In turn, the following loans have been renewed: Banco Hipotecario, for AR$ 15 million, maturing in 1 year. Banco Comafi, for AR$ 20 million, maturing in 6 months. Checking Account Overdrafts: The Company took out bank overdrafts for AR$ 82 million from different banks. Available Credit Lines: At the end of the fiscal year, we had two credit lines available that had not been used. They correspond to commitments signed with financial institutions for AR$ 120 million. SIGNIFICANT ASPECTS DURING FISCAL YEAR 2011 Future Inspired Us During 2011, Employees worked inspired by the Creating Future motto, a slogan for the entire Company that, in the words of David Ruda, Tarjeta Naranja s CEO, means to break away from old paradigms and get to know us again in the changing and challenging present and immediate future, with new behaviors and technological keys. To accept future is not predetermined and be aware that we can do it if we are together and we can do it better as well. It does not have to do with changing the world. It is just about being and doing the best for us and for those around us. If we join things will be much better. Year after year, the company chooses a phrase that identifies it, summarizes its aspirations and expresses the goals to attain. Full Color Summer The year started with the well-known Naranja Fireworks Show in the two major tourist cities: Mar del Plata and Carlos Paz. In January, Tarjeta Naranja held two events that were free and open to the public, where Bahiano, former leader of Los Pericos, sang. They ended with impressive fireworks shows. Both events reunited around 130,000 people, thus turning into the most appealing events of the season. Like every summer, the Company invested in a strong brand presence and exclusive benefits for Card Holders in the tourist centers around the country. 3

6 Tarjeta Naranja is an Official Sponsor of Argentina s National Soccer Team Tarjeta Naranja became an Official Sponsor of Argentina s National Soccer Team, with the purpose of consolidating the brand in Buenos Aires and strengthening its leadership in the rest of the country. Pursuant to the agreement entered into, the Company was granted rights of use of the trademarks AFA and Selección Nacional, for purposes of carrying out advertising, promotional and commercial actions for a period of four years. Therefore, in 2011 Tarjeta Naranja accompanied the team in every sports event the latter took part, developed special promotions and benefits for Card Holders and Merchants ( Comercios Amigos ) throughout the country, and carried out a major advertising campaign nationwide. One Goal, One Soccer Field Within the framework of the sponsorship of Argentina s National Soccer Team and aimed at promoting this sport among children throughout the country, Tarjeta Naranja got involved through an original initiative: ffor each goal made by Argentina s National Soccer Team in official games until 2015, the Company will condition the sports area of public schools, neighborhood clubs and community centers all around Argentina. During 2011, the campaign became a success: 26 winning institutions are enjoying their new soccer field, out of 1,700 soccer fields registered in Tarjeta Naranja s page in Facebook. Promotions and Benefits Always Tarjeta Naranja developed exclusive benefits for Card Holders, with large discounts and installments at a 0% interest rate in every sector. Many agreements were entered into with top trademarks in Argentina, such as FIAT, Personal, Direct TV, Dexter Shops, Netshoes, Disco Virtual, LAN, Musimundo, Wal-Mart, BGH, Red Minetti, Libertad and Jumbo, among others. Likewise, special promotions with the best stores of each city were carried out in every region throughout the country. Geniuses Short Movies ( Cortos de Genios in Spanish) The Company continued with the fourth edition of the cultural proposal named Cortos de Genios Naranja, which invites interested people to make their own movie. This year, the central theme for movies was Passion for Soccer. A total of 124 short movies participated. All of them are available at Aquí Vivimos Magazine In December 2010, the Company purchased Aquí Vivimos magazine, of national circulation and distributed by subscription to Tarjeta Naranja s Card Holders. In one year, the magazine s circulation 4

7 increased to over 100,000 subscribers, and considerable changes were made with regard to contents and design, thus achieving an excellent editorial product and significant interaction with readers. A Step on the Right Direction in the Greater Buenos Aires Area and the Autonomous City of Buenos Aires In these areas, Tarjeta Naranja achieved significant growth by adding 8 branches, 180,380 new cards issued and more than 10,000 Merchants ( Comercios Amigos ). In 2011, Tarjeta Naranja opened branches in the neighborhoods of Flores and Caballito, in the Autonomous City of Buenos Aires; while in the Greater Buenos Aires area the Company opened final branches in Adrogué, Ramos Mejía and Moreno, and first branches in Ituzaingó, Caseros, Munro, Rafael Castillo, Ezeiza and Banfield. By the end of the year, Tarjeta Naranja had 3 branches in the Autonomous City of Buenos Aires, 22 in the Greater Buenos Aires area and a team of 880 Employees in the area. More Branches Nationwide In line with the goal of being close to customers, Tarjeta Naranja opened branches in the provinces as well. Stores were opened in Villa Regina (Río Negro), Cañada de Gómez and Villa Gobernador Gálvez (Santa Fe), and second branches were opened in the cities of Bahía Blanca and Formosa. Also, the biggest store in Argentina was opened in the city of Córdoba, at Rivera Indarte Pedestrian Street. This way, during the fiscal year Tarjeta Naranja opened 14 branches in Argentina, thus making up a network of 183 points of contact. Tarjeta Naranja Reached Peru In September 2011, Tarjeta Naranja s brand was launched in Peru as part of the Company s international business strategy and through an association with Banco de Crédito del Perú (BCP), major bank in Peru. Tarjeta Naranja Perú S.A.C. opened two branches in Lima and has a team made up of 158 employees, which will be enlarged to 300 people during The plan envisages the issuance of 50,000 cards and the opening of 5 branches in Lima during the first 12 months, and the later expansion of transactions to other cities in Peruú. Acquisition of an Interest in Tarjeta Mira Tarjeta Naranja acquired a 98% interest in Tarjeta Mira S.A., which has 40,000 accounts statements and 13 branches in Mar del Plata, Tandil, Olavarría and Azul, among other areas in the province of Buenos Aires. 5

8 The Best Place to Work in Argentina Tarjeta Naranja achieved the first position in the 2011 edition of the prestigious ranking called Great Place to Work, in the category companies with more than 1,000 employees. This award is an acknowledgment to the best employer and the highest-quality workplace, and makes Tarjeta Naranja feel proud. This is a consequence of a work philosophy sustained over time, where Employees are an essential part of the organizational life. Being sure that Trainers are strategic actors for the maintenance of the Naranja Culture, both with regard to training and transmitting knowledge, the Third National Congress of Naranja Trainers ( Tercer Congreso Nacional de Formadores Naranjas ) was carried out in August. Around 180 internal trainers took part in the event held in Córdoba. With regard to staff, 924 new Employees were hired in 2011, thus reaching a total of 4,050 people at the end of the year. In addition, 135 promotions were carried out, all of them through internal selection processes; and 3,000 face-to-face training sessions were held. Benefits for Merchants ( Comercios Amigos ) Tarjeta Naranja achieved throughout the country the subscription of Merchants ( Comercios Amigos ) in 72 business hours. The Company also developed a Comprehensive Marketing Plan, through which it carried out loyalty campaigns aimed at strengthening the relationship with stores, reaching 100% of them. Furthermore, promotions targeted at store salespersons were carried out with the purpose of making them continue to recommend the brand. Naranja is Social Tarjeta Naranja s official page in Facebook continued growing, reaching more than 227,000 friends by December Through this channel, the Company receives comments, queries and suggestions; provides answers and shares information. In turn, Blog Naranja a reading and communication channel was consolidated as a participation forum, with an average of 45,000 monthly visits. In November, Tarjeta Naranja launched its new website, aimed at meeting customers needs and offering customers new communication means. As per the users opinions, the new website version gives relevance to the most interesting contents, adds participation forums and provides a leading role to the Company image and the social networks. By means of this technology, Tarjeta Naranja attained a more practical website and, more importantly, the ideal environment so as to offer the best services to the million individuals who visit the website each month. 6

9 Assured Quality In 2011, Tarjeta Naranja achieved for the third time (2005, 2008 and 2011) the recertification of all of its processes under the ISO 9001:2008 standard. With regard to process improvement, the Company worked in interdisciplinary teams in order to improve the following: Customers ABM (please see details thereof below), Collection Management, Employees Management, Administration of Expenses, Customers Requests and Complaints, and Automatic Debits. Reengineering of Customers ABM Process With the purpose of reducing times and costs with regard to New Accounts, Closed Accounts and Modification of Customers (Alta, Baja y Modificación de Clientes), and in order to make it possible to deliver cards to Card Holders within 7 business days, significant changes were introduced. Queries from Risk Databases were transferred to branches and sales representatives (through SMS). The reception and data entry of the customers application forms were integrated; and customers work verifications by means of suppliers were replaced by credit analysis tools. Systems Modernization and Development During 2011, with the purpose of accompanying the Company s growth, Tarjeta Naranja continued investing in technological updating, systems modernization and development of applications improvements. The following were the major projects: Within the framework of the Processing System Modernization project, the Company defined the strategy for project implementation in stages, devising 6 Implementation Units that include 12 Releases with their respective modules. The Company started working on the development of Releases 1, 2, 3 and 4. The Company as well incorporated some new AVAYA technology to the Contact Center, which allows the addition of features, thus improving communication with Card Holders and Merchants ( Comercios Amigos ). This increased the operational capability and made it possible to include new multimedia service channels such as chat, SMS, s and social networks. This new technology is shared with suppliers in order to manage the telephone customer service in a comprehensive and unified manner. With the purpose of centralizing Card Holders contact information, the Contacts Manager was developed and implemented. This is a single information database that can be accessed from every Tarjeta Naranja s application that needs to do so. The Company implemented the new System for the Collection of Amounts in Arrears, an innovative tool for collection improvement, which takes into consideration the best recovery practices, including the implementation of Early Arrears and Attorneys. 7

10 With regard to Information Security, a First Class tool was implemented for identity management, thus allowing an improvement regarding compliance with internal control regulatory requirements and regarding the efficiency of the Users ABM process. In addition, the Company adopted the ISO: standard as Risk Management system, and advancements were made with regard to the major business processes. The Company carried out the reengineering of all the business cycles internal control matrices corresponding to Sarbanes Oxley, with the purpose of making a conceptual review and validation thereof. New Corporate Building The construction of the new corporate building started. 1,200 employees will work at the new corporate building. The properties purchased were demolished, the building permit was granted by the Municipality of the city of Córdoba, and a bid was called for to choose the construction company that will carry out the works. Biodegradable Cards With the purpose of reducing the environmental impact and promoting ecological awareness, the Company distributed the first 110,000 cards made up of biodegradable material (Green PVC). This way, Tarjeta Naranja is the first card-issuing company in Argentina that uses the material called Luc- Bio, which degrades in only 4 years; unlike common cards made of PVC, which pollute the environment for 500 to 700 years. Between the end of 2011 and the beginning of 2012, other 500,000 biodegradable cards will be issued. Corporate Social Responsibility At Tarjeta Naranja, the core of Social Responsibility actions has to do with the association of willing individuals: Employees, Card Holders, Merchants ( Comercios Amigos ) and Suppliers, who devote their efforts being always supported by the Company. During this period, social responsibility actions were focused on continuing and improving the Programs the Company has been developing for a long time, always aimed at offering opportunities to the most impoverished sectors. Aporte Solidario (Solidary Contribution) Program: Thanks to this initiative, Card Holders donated, through their debits, more than AR$ 19,900,000 to 200 non-profit organizations. Apadrinando Comedores (Support for Community Kitchens) Program: The program was strengthened in 2011, with a total of 151 volunteers, 33 community kitchens and 3,002 children benefited throughout Argentina. Apadrinando Escuelas (Support for Schools) Program: The Company worked all over the country in order to add new schools, volunteers and sponsors. At the end of the year, 300 schools were given assistance, out of which 151 were sponsored by Merchants ( Comercios Amigos ) and 149 by Tarjeta Naranja together with 136 volunteers. 8

11 Solidarity Missions: Forty-nine missions were carried out to meet specific needs in different areas of Argentina. These were carried out by company volunteers. Special Campaign for Children s Day: Thanks to the contribution of Employees, 2,797 children received a gift that was wrapped with each child s name. Also, volunteers organized special celebrations at each of the sponsored community kitchens. Awards and Recognitions During 2011, Tarjeta Naranja and David Ruda, CEO and Founder of the Company, were recognized and included in the most important publications in Argentina. Professor Ruda was granted the First Place in 10 Outstanding Leaders in Argentina ( 10 líderes sobresalientes de Argentina ) by Mercado Magazine; and was chosen The Businessman of the Year ( El empresario del año ) by the subscribers of Punto a Punto Magazine, from Córdoba. Additionally, he was placed in the 21st place among the 100 More Well-known Businessmen in Argentina ( Los 100 empresarios más reconocidos de Argentina ); and he was presented as candidate for The Most Important Individual from Córdoba ( El cordobés del año ) by La Voz del Interior newspaper. In turn, Tarjeta Naranja was honored in the General Ranking of Companies ( Ranking general de empresas ) by Clarín newspaper; and was awarded position No. 15 in the General Ranking of Good Practices ( Ranking general de buenas prácticas ), publication of the same newspaper which recognizes the most responsible companies. Ámbito Financiero newspaper included Tarjeta Naranja in its Company Reputation Ranking" ( Ranking de Prestigio de Empresas ), and Mercado Magazine included it in 100 Leading Companies with regard to Assets ( Las 100 líderes en activo ). Other institutions also recognized Tarjeta Naranja: Professors Javier Silva and Fernando Zerboni, from the IAE (Instituto Argentino de la Empresa), were granted a scholarship by NACRA, (North American Case Research Association) for the development of the case "Tarjeta Naranja - A Story with an Orange Spirit". This initiative analyzes aspects related to corporate culture, values and leadership, and deals with the complexity of branding and its management in companies devoted to the provision of financial services. The case was taught to students of the Business School and Former Students, and was introduced this year at the NACRA Conference in San Antonio (Texas), where it went through several revision stages. Nowadays it is in the last stage in order to be published in NACRA s Case Research Journal (CRJ), where the association releases the best cases at the international level. Later, those cases are used by Universities and Business Schools all over the world. 2012: AND WHY NOT NOW?! Tarjeta Naranja chose for 2012 the AND WHY NOT NOW?! motto, with both an interrogation point and an exclamation mark, since it is asking but at the same time it is inviting to take action. The Company believes in the value involved in the act of doing, as expressed by David Ruda: When we do, we are; when we do, we project; when we do, we make a difference. We go through life doing, and doing is what makes each moment have sense. There are so many things to do, start, end, redo, 9

12 modify, create! There are so many things that need some of our "doing"! What stops us? Why would we allow something to stop us? At Naranja, we are huge enthusiasts of doing; doing and letting others do! AND WHY NOT NOW?! PROJECTIONS AND OUTLOOK FOR 2012 After the elections, the Argentine economy has noted certain signs of possible complications. Major withdrawals of foreign currency deposits were carried out, and the interest rate increased significantly. For the next year, the cut in utilities subsidies, as well as a possible higher deficit in the provinces, could affect our customers availability of money. Faced with these circumstances, the Company is cautious when planning the steps to take in fiscal year

13 1 Legal Domicile: Principal Line of Business: Sucre 151 Córdoba Credit Card Administrator 17th Fiscal Year Financial Statements as of December 31, 2011 December 31, 2011, on a comparative basis Figures stated in thousands of Pesos Date of Registration with the Public Registry of Commerce: Of Bylaws: December 12, 1995 Registration Number with the Public Registry of Commerce: Nº 1363 Fº 5857 Tº 24/95 Date of Expiration of Company s Bylaws: December 12, 2094 CAPITAL STATUS (Note 3 to the Financial Statements) Shares Number Class (in thousands of Pesos) Voting Rights per Share Subscribed Paid-in In thousands of Pesos 2,400 Ordinary shares with a face value of AR$ ,000 24,000 2,400 24,000 24,000 Information on the Controlling Company: Company s Name: Legal Domicile: Principal Line of Business: Tarjetas Regionales S.A. Buenos Aires 37 Córdoba Financial Operations Interest in the Shareholders Equity: 80 % Percentage of Votes: 80 %

14 TARJETA NARANJA S.A. CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2011

15 3 and its Subsidiaries Consolidated Balance Sheet as of December 31, 2011 and December 31, 2010 (Notes 1 and 2) In thousands of Pesos In thousands of Pesos ASSETS LIABILITIES CURRENT ASSETS CURRENT LIABILITIES Cash and Banks 135,934 78,256 Accounts Payable 2,695,202 1,876,840 Short-term Investments 302, ,514 Bank and Financial Loans 613, ,743 Receivables from Services 4,883,546 3,127,425 Compensation and Social Security Charges 115,547 74,338 Other Receivables 58,498 28,894 Tax Charges 135,853 86,657 Other Liabilities 9,661 6,475 Total Current Assets 5,380,314 3,476,089 Total Current Liabilities 3,569,651 2,652,053 NON-CURRENT ASSETS NON-CURRENT LIABILITIES Receivables from Services 188,395 87,550 Bank and Financial Loans 1,013, ,953 Other Receivables 96,713 71,931 Other Liabilities Other Investments Provisions 25,190 36,273 Long-term Interest in Companies 7,873 5 Property, Plant and Equipment 108,094 90,495 Intangible Assets 51,981 18,798 Total Non-Current Liabilities 1,038, ,886 Total Non-Current Assets 454, ,779 Total Liabilities 4,608,417 2,848,939 Total Assets 5,834,352 3,744,868 The Notes are an integral part of the consolidated financial statements. Third Parties Interest in Subsidiaries SHAREHOLDERS' EQUITY 1,225, ,683 Total Liabilities, Third Parties Interest in Subsidiaries and Shareholders Equity 5,834,352 3,744,868

16 4 and its Subsidiaries Consolidated Statement of Income December 31, 2011, on a comparative basis (Notes 1 and 2) December Income / (Loss) In thousands of Pesos Revenues from Services 1,329, ,721 Revenues from Financing 873, ,083 Operating Revenues 2,203,570 1,497,804 Marketing Expenses (792,170) (524,351) Administrative Expenses (418,867) (254,998) Net Financial Income (Loss) Generated by Assets Provisioning for Loan Losses, Net of Recoveries (155,039) (127,248) Interests on Time Deposits 51,869 15,472 (Loss) / Income from Valuation of Government Securities (31) 596 Interests on Interest-bearing Checking Accounts Income from Other Financial Transactions 4,230 5,114 Foreign Exchange Income 14, Income from Co-Investments with Tarjeta Naranja Dominicana S.A Income from Valuation of Participation Certificates in Financial Trusts - 4,644 Generated by Liabilities Bank Interests (57,532) (28,141) Bank Interests Companies under Section 33 of Act No (8,547) (21,788) Interests on Notes ( Obligaciones Negociables ) (108,011) (34,451) Foreign Exchange Loss (79,998) (8,851) Other Financial Expenses (1,713) (3,290) Other Financial Expenses Companies under Section 33 of Act No (1,572) (786) Tax on Bank Debits and Credits Generated by Financial Activities (4,730) (4,209) Loss Due to Change in Net Fair Value Adjustments on Derivative and Hedging Activities (25,108) (29,407) Operating Income 620, ,505 Loss from Long-term Interest in Companies (1,543) - Other Non-operating Income and Expenses 10,479 (5,681) Income before Income Tax and Third Parties Interest in Subsidiaries 629, ,824 Income Tax (217,791) (163,507) Third Parties Interest in Subsidiaries 25 (79) Net Income for the Fiscal Year 411, ,238 The Notes are an integral part of the consolidated financial statements.

17 5 and its Subsidiaries Consolidated Statement of Cash Flows December 31, 2011, on a comparative basis (Notes 1 and 2) December CASH AND CASH EQUIVALENTS VARIATIONS In thousands of Pesos Cash and Cash Equivalents at the Beginning of the Fiscal Year 314, ,612 Cash and Cash Equivalents at the End of the Fiscal Year 438, ,970 Net Cash and Cash Equivalents Increases (Decreases) 123,287 (20,642) CAUSES OF CASH AND CASH EQUIVALENTS VARIATIONS OPERATING ACTIVITIES Net Income for the Fiscal Year 411, ,238 Plus Income Tax Accrued during the Fiscal Year 217, ,507 Minus Income from Co-Investments with Tarjeta Naranja Dominicana S.A. (Note 3) (44) (2) Plus Discounts due to Trust Assignments of Receivables Accrued during the Fiscal Year - 8 Plus Interests, Bank Adjustments and Other Financial Expenses Accrued during the Fiscal Year, Net of Interests and Other Financial Income Accrued 128,381 74,636 Adjustments to Calculate Net Cash Flow from Operating Activities: Depreciation of Property, Plant and Equipment 17,117 14,755 Amortization of Intangible Assets 5,591 5,206 Provisioning for Loan Losses 200, ,703 (Recovery of the Provision for Contingencies) / Provisioning for Contingencies (10,974) 2,279 Income from Investments in Participation Certificates in Financial Trusts - (4,644) Recovery of the Provision for Long-term Interest in Companies (1,149) (2,182) Provisioning for Long-term Interest in Companies Income from Interest in Other Companies 1,543 - Vacation Payable 27,230 16,570 Year-end Additional Wages Payable Bonuses Payable 29,493 21,002 Fees Payable to Directors and Members of the Supervisory Committee 7,310 5,317 Loss Due to Change in Net Fair Value Adjustments on Derivative and Hedging Activities 17,384 1,632 Loss from Issuance Price 5,292 8,202 Deletes of Property, Plant and Equipment Deletes of Intangible Assets 2 - Foreign Exchange Loss 65,638 8,469 Third Parties Interest in Subsidiaries (25) 79 Changes in Operating Assets and Liabilities: Increase in Receivables from Services and Other Receivables (2,007,053) (1,287,365) Increase in Trade Payables 799, ,782 Decrease in Social Security and Tax Charges (204,556) (173,767) Decrease in Other Liabilities (6,444) (49,425) Decrease in Provisions (150) - NET CASH FLOW USED IN OPERATING ACTIVITIES (295,270) (79,579) INVESTING ACTIVITIES Sale of Government Securities, Holdings of Participation Certificates and Trust Debt Securities 4, ,377 Interests and Other Financial Income Obtained - 2,343 Payments for Purchases of Property, Plant and Equipment (33,085) (20,047) Payments for Purchases of Licenses and Software Development (38,786) (19,665) Cash Contributions to Subsidiaries / Purchase and Sale of Interest in Other Companies (23,618) - Decrease in Cash and Cash Equivalents related to the Sale of Cobranzas Regionales S.A. and the Purchase of Tarjeta Mira S.A. (1,259) - NET CASH FLOW USED IN / GENERATED BY INVESTING ACTIVITIES (91,948) 89,008 FINANCING ACTIVITIES Bank Loans Obtained 76, ,700 Checking Account Overdrafts Obtained 82,397 - Notes ( Obligaciones Negociables ) Issued 1,111, ,051 Payment of Dividends - Fiscal Years 2010 / 2009 (82,000) (40,000) Payment of Principal on Bank Loans and Financial Leasing (194,701) (123,682) Payment of Interests on Bank Loans and Financial Leasing (58,616) (47,629) Payment of Principal on Notes ( Obligaciones Negociables ) (385,684) (214,773) Payment of Interests on Notes ( Obligaciones Negociables ) (66,979) (32,616) Payment of Other Financial Expenses (19,841) (10,656) Loss due to Change in Net Fair Value Adjustments on Settled Derivative and Hedging Activities (9,356) (27,774) Payment of Tax on Bank Credits and Debits (11,333) (2,150) Refund of Irrevocable Contributions - (1,608) NET CASH FLOW GENERATED BY (USED IN) FINANCING ACTIVITIES 441,422 (49,137) FINANCIAL INCOME GENERATED BY CASH AND CASH EQUIVALENTS Interests and Foreign Exchange Income Generated by Time Deposits, Mutual Funds and Interest-bearing Checking Accounts 69,083 19,066 INCREASE IN CASH AND CASH EQUIVALENTS DUE TO FINANCIAL INCOME GENERATED BY CASH AND CASH EQUIVALENTS 69,083 19,066 INCREASE / (DECREASE) IN CASH, NET 123,287 (20,642) The Notes are an integral part of the consolidated financial statements.

18 6 Statement of Cash Flows December 31, 2011, on a comparative basis (Note 1) NOTE 1 - MOST RELEVANT ACCOUNTING POLICIES 1.1. Presentation of the Financial Statements Pursuant to the provisions of General Resolution No. 368/01 of the Argentine National Securities Commission ( Comisión Nacional de Valores, the CNV ), these consolidated financial statements are presented prior to the Company s basic financial statements, which follow immediately after these consolidated financial statements. In addition, notes to these consolidated financial statements are also included. This supplementary accounting information must be read and analyzed together with the Company's basic financial statements and notes Basis for the Preparation of the Consolidated Financial Statements These consolidated financial statements have been prepared in accordance with the general and particular disclosure and valuation accounting standards required by General Resolutions No. 485/05 and 487/06 of the CNV. These Resolutions, effective since January 1, 2006, adopted, with some amendments, Technical Resolutions No. 6, 8, 9, 11, 14, 16, 17, 18, 21 and 22 and interpretations 1, 2, 3 and 4 of the Argentine Federation of CPA Associations, with the amendments incorporated through Resolution No. 312/05 issued by such Federation. The Company s management believes that General Resolutions No. 485/05 and 487/06, as well as No. 441/03 (see Note 1.3 to the financial statements), issued by the CNV, are applicable as a body of professional accounting standards in force in its jurisdiction, since Section 4 of Resolution No. 22/88 of the CPA Association of the Province of Córdoba determines that when the financial statements of an institution belong to companies that are subject to official regulating authorities that determine systems different from those approved by that Association, such financial statements and the corresponding auditor s report should be in line with the regulations issued by the above-mentioned regulating authorities. The consolidated financial statements are presented in thousands of Pesos with no cents, the same as the supplementary notes, schedules and additional information to the financial statements. NOTE 2 - CHANGES IN THE CORPORATE STRUCTURE On August 17, 2011, the Company transferred to its controlling company, Tarjetas Regionales S.A., 8,270 shares, representing 82.7% of the capital stock of its subsidiary Cobranzas Regionales S.A. Consequently, the Company held a 5% of the shares and voting rights in Cobranzas Regionales S.A. Apart from that, on September 5, 2011, the Company decided to purchase from its controlling company, Tarjetas Regionales S.A., 2,093,415 ordinary shares, representing % of the capital stock of Tarjetas del Mar S.A. On September 7, 2011, at an Extraordinary Shareholders Meeting, Tarjetas del Mar S.A. s shareholders decided to spin off Tarjetas del Mar S.A. without dissolution thereof, allocating part of its assets to the creation of a new spinned-off company under the name Tarjeta Mira S.A. Due to the aforementioned spin-off, Tarjeta Naranja S.A. did not retain an interest in Tarjetas del Mar S.A., receiving in exchange shares representing a 98% interest in the spinned-off company, Tarjeta Mira S.A.

19 7 NOTE 2 - CHANGES IN THE CORPORATE STRUCTURE (Continued) s consolidated financial statements take into consideration the effects of the aforementioned restructuring. The consolidated balance sheet, the consolidated statement of income, the consolidated statement of cash flows and the information included in the notes to the consolidated financial statements should be read taking into consideration what is described in this note. NOTE 3 SUBSIDIARIES The following chart sets forth the ownership percentage and a brief description of the line of business of each subsidiary of the Company consolidated herein pursuant to the total consolidation method, in accordance with the procedure established by FACPCE Technical Resolution No. 21: Company Percentage of Shares and Activity Voting Rights Tarjeta Mira S.A. 98% Credit Card Administration The following chart sets forth the ownership percentage and a brief description of the line of business of each subsidiary of the Company consolidated herein pursuant to the total consolidation method, in accordance with the procedure established by FACPCE Technical Resolution No. 21: Company Percentage of Shares and Activity Voting Rights Tarjeta Naranja Dominicana S.A. 50 % Credit card collection, issuance and processing, and related services. With regard to the interest held in this subsidiary, it is worth noting the Company shares the definition and management of the operating and financial policies with Banco Múltiple León S.A. (company incorporated under the laws of the Dominican Republic). NOTE 4 - VALUATION AND DISCLOSURE STANDARDS FOR THE CONSOLIDATED FINANCIAL STATEMENTS The financial statements of the subsidiaries (Tarjeta Mira S.A. and Tarjeta Naranja Dominicana S.A.) have been prepared based on criteria in line with those applied by, which are detailed in Note 1 to the basic financial statements.

20 NOTE 5 SEGMENT REPORTING 8 Below, there is a breakdown of certain accounting information as of December 31, 2011, by related business segment: Primary Segment: Geographic Assets as of December 31, 2011 (in thousands of Pesos) Receivables from Services Córdoba Central Region Northwest of Argentina "GBA" Patagonia Northeast of Argentina Gold Other Segments Trade Debtors 843, ,600 1,155, , , , ,819-5,010,901 Loans Granted by TN 17,933 44,957 54,807 53,150 59,615 52,094 40, ,624 Provision for Loan Losses (38,110) (26,958) (52,112) (48,749) (29,942) (43,120) (22,593) - (261,584) Total Receivables from Services 823, ,599 1,158, , , , ,294-5,071,941 Property, Plant and Equipment Original Value 34,220 9,180 15,746 32,093 20,098 22,312 13,632 78, ,152 Accumulated Depreciation (20,625) (6,951) (11,830) (8,249) (12,149) (14,422) (9,653) (34,179) (118,058) Total Property, Plant and Equipment 13,595 2,229 3,916 23,844 7,949 7,890 3,979 44, ,094 Intangible Assets Original Value , ,178 74,546 Accumulated Amortization (513) (52) (79) (8) (3,822) (706) (116) (17,269) (22,565) TOTAL Total Intangible Assets ,909 51,981 Accounts Payable 479, , , , , , , ,695,202 Net Income / (Loss) by Segment as of December 31, 2011 (in thousands of Pesos) Córdoba Central Region Northwest of Argentina "GBA" Patagonia Northeast of Argentina Gold Other Segments TOTAL Revenues from Services 248, , , , , , ,915 7,495 1,329,580 Revenues from Financing 113, , ,544 81, , ,781 75, ,990 Total Operating Revenues 361, , , , , , ,468 7,495 2,203,570 Provisioning for Loan Losses for the Fiscal Year 25,787 18,509 36,909 43,924 21,795 34,567 18, ,412 Depreciation of Property, Plant and Equipment 1, ,221 3,639 1,466 1, ,829 17,117 Amortization of Intangible Assets ,583 5,591 Net Income (Loss) for the Fiscal Year 179, , ,528 (89,906) 142, ,624 60,938 (380,230) 411,954

21 NOTE 5 SEGMENT REPORTING (Continued) 9 The following is the breakdown of each of the geographic segments from the chart above: - Córdoba: This segment corresponds to the city of Córdoba and the surrounding area. - Central Region: It is made up of Río IV and the surrounding area, Valle de Punilla, San Francisco and the surrounding area, Villa María and the surrounding area (province of Córdoba), city of San Luis and Villa Mercedes (province of San Luis), Santa Rosa de La Pampa and General Pico (province of La Pampa) and Cañada de Gómez (south of the province of Santa Fe). - Northwest of Argentina: It includes areas in the provinces of La Rioja, Catamarca, Santiago del Estero, Salta, Jujuy and Tucumán. - "GBA": It corresponds to La Plata, Quilmes, Lanús, the Atlantic Coast, Caseros, Ituzaingó, Liniers, Merlo, Moreno, Morón, Munro, Ramos Mejía, San Justo, San Martín, San Miguel, Adrogué, Avellaneda, Berazategui, Florencio Varela, Lomas de Zamora, Monte Grande, Rafael Castillo, Tres Arroyos, Villa Ballester, Banfield, Ezeiza and Solano (in the province of Buenos Aires) and Caballito, Liniers and Flores (in the Autonomous City of Buenos Aires). - Patagonia: This segment is made up of the provinces of Santa Cruz, Neuquén, Chubut, Río Negro and the city of Bahía Blanca and the surrounding area. - Northeast of Argentina: It includes areas in the provinces of Entre Ríos, Misiones, Formosa, Corrientes, Chaco and the northwest of the province of Santa Fe. - Gold : This segment refers to the city of Rosario and the northern area of the province of Buenos Aires. - Other Segments: This category is made up of the Central Administration and other non-significant segments.

22 NOTE 5 SEGMENT REPORTING (Continued) 10 As of December 31, 2010, the accounting information classified by primary segment was as follows: Assets as of December 31, 2010 (in thousands of Pesos) Receivables from Services Córdoba Central Region Northwest of Argentina "GBA" Patagonia Northeast of Argentina Gold Other Segments Trade Debtors 611, , , , , , ,254 1,000 3,384,088 Provision for Loan Losses (30,166) (19,060) (36,782) (16,765) (21,677) (27,620) (17,043) - (169,113) Total Receivables from Services 581, , , , , , ,211 1,000 3,214,975 Property, Plant and Equipment Original Value 31,517 8,768 14,994 20,019 18,260 19,275 13,869 65, ,331 Accumulated Depreciation (18,877) (5,999) (10,609) (6,732) (10,682) (13,041) (8,793) (27,103) (101,836) Total Property, Plant and Equipment 12,640 2,769 4,385 13,287 7,578 6,234 5,076 38,526 90,495 Intangible Assets Original Value , ,019 36,478 Accumulated Amortization (511) (76) (89) (111) (3,822) (729) (116) (12,226) (17,680) Total Intangible Assets ,793 18,798 Accounts Payable 362, , , , , , ,903 (633) 1,876,840 TOTAL Net Income / (Loss) by Segment as of December 31, 2010 (in thousands of Pesos) Córdoba Central Region Northwest of Argentina "GBA" Patagonia Northeast of Argentina Gold Other Segments TOTAL Revenues from Services 176, , ,198 68, , ,471 82,774 12, ,721 Revenues from Financing 80,559 69, ,508 41,825 83, ,220 57, ,083 Total Operating Revenues 257, , , , , , ,952 12,156 1,497,804 Provisioning for Loan Losses for the Fiscal Year 21,550 15,199 33,107 20,902 18,692 27,808 17, ,703 Depreciation of Property, Plant and Equipment 1, ,034 2,440 1,517 1,278 1,065 5,318 14,755 Amortization of Intangible Assets ,206 5,206 Net Income (Loss) for the Fiscal Year 134,115 83, ,467 (34,023) 103, ,702 50,682 (292,045) 317,238

23 11 TARJETA NARANJA S.A. BASIC FINANCIAL STATEMENTS AS OF DECEMBER 31, 2011

24 12 Balance Sheet as of December 31, 2011 and December 31, 2010 (Note 1) In thousands of Pesos In thousands of Pesos ASSETS LIABILITIES CURRENT ASSETS CURRENT LIABILITIES Cash and Banks (Note 2.1) 134,747 75,725 Accounts Payable (Notes 2.4 and 4) 2,680,194 1,877,476 Short-term Investments (Schedule D and Note 4) 302, ,514 Bank and Financial Loans (Notes 2.5 and 4) 572, ,743 Receivables from Services (Notes 2.2 and 4) 4,813,914 3,126,425 Compensation and Social Security Charges (Notes 2.6 and 4) 114,421 73,073 Other Receivables (Notas 2.3. y 4) 53,730 31,606 Tax Charges (Notes 2.7 and 4) 134,843 86,547 Other Liabilities (Notes 2.8 and 4) 7,765 6,471 Total Current Assets 5,304,714 3,475,270 Total Current Liabilities 3,510,002 2,651,310 NON-CURRENT ASSETS NON-CURRENT LIABILITIES Receivables from Services (Notes 2.2 and 4) 187,451 87,550 Bank and Financial Loans (Notes 2.5 and 4) 1,007, ,953 Other Receivables (Notes 2.3 and 4) 96,661 71,832 Other Liabilities (Notes 2.8 and 4) Long-term Interest in Companies (Schedule C) 22,492 1,757 Provisions (Schedule E) 25,149 36,273 Property, Plant and Equipment (Schedule A) 105,582 88,740 Intangible Assets (Schedule B) 51,464 18,730 Total Non-Current Assets 463, ,609 Total Non-Current Liabilities 1,032, ,886 Total Liabilities 4,542,727 2,848,196 SHAREHOLDERS EQUITY (as per the Statement of Changes in the Shareholders Equity) 1,225, ,683 Total Assets 5,768,364 3,743,879 Total Liabilities and Shareholders' Equity 5,768,364 3,743,879 The notes and schedules are an integral part of the financial statements.

25 13 Statement of Income For the fiscal year commenced January 01, 2011 and ended December 31, 2011, on a comparative basis (Note 1) December Income / (Loss) In thousands of Pesos Revenues from Services (Note 5) 1,314, ,565 Revenues from Financing (Note 5) 866, ,083 Operating Revenues 2,180,832 1,485,648 Marketing Expenses (Schedule H) (786,644) (506,573) Administrative Expenses (Schedule H) (404,591) (259,886) Net Financial Income / (Loss) Generated by Assets Provisioning for Loan Losses, Net of Recoveries (Note 2.10) (152,372) (127,248) Interests on Time Deposits (Note 5) 51,869 15,472 (Loss) / Income from Valuation of Government Securities (57) 596 Income from Other Financial Transactions 4,230 5,101 Foreign Exchange Income 14, Income from Valuation of Participation Certificates in Financial Trusts - 4,644 Generated by Liabilities Bank Interests (54,110) (28,141) Bank Interests Companies under Section 33 of Act No (Note 5) (8,547) (21,788) Interests on Notes ( Obligaciones Negociables ) (108,011) (34,451) Foreign Exchange Loss (79,998) (8,852) Other Financial Expenses (1,713) (3,290) Other Financial Expenses Companies under Section 33 of Act No (Note 5) (1,572) (786) Tax on Bank Debits and Credits Generated by Financial Activities (4,730) (4,209) Loss Due to Change in Net Fair Value Adjustments on Derivative and Hedging Activities (25,108) (29,407) Operating Income 623, ,229 (Loss) / Income from Long-term Interest in Companies (Note 2.11) (2,781) 564 Other Income and Expenses (Note 2.9) 8,666 (7,396) Income before Income Tax 629, ,397 Income Tax (Note 8) (217,791) (163,159) Net Income for the Fiscal Year 411, ,238 The notes and schedules are an integral part of the financial statements.

26 14 Statement of Changes in the Shareholders Equity December 31, 2011, on a comparative basis (Note 1) Captions Shareholders Contributions Reserves Total Shareholders Equity Capital Capital Stock December 31 Legal Discretionary Undistributed Stock Integral Subtotal Reserve reserve Profits (Note 3) Adjustment In thousands of Pesos Balances at Beginning of the Fiscal Year 24,000 26,622 50,622 10, , , ,103 Changes during the Fiscal Year: Distribution of Cash Dividends decided pursuant to Minutes of Shareholders Meeting No. 31 dated (82,000) (82,000) (40,000) Increase in Deferred Income ,950 Creation of a Discretionary Reserve decided pursuant to Minutes of Shareholders Meeting No. 31 dated ,000 (58,000) - - Refund of Irrevocable Contributions (1,608) Net Income for the Fiscal Year , , ,238 Balances as of ,000 26,622 50,622 10,125 58,000 1,106,890 1,225,637 Balances as of ,000 26,622 50,622 10, , ,683 The notes and schedules are an integral part of the financial statements.

27 15 Statement of Cash Flows December 31, 2011, on a comparative basis (Note 1) December In thousands of Pesos CASH AND CASH EQUIVALENTS VARIATIONS Cash and Cash Equivalents at the Beginning of the Fiscal Year 312, ,391 Cash and Cash Equivalents at the End of Fiscal Year (Note 2.13) 437, ,439 Net Cash and Cash Equivalents Increases (Decreases) 124,631 (21,952) CAUSES OF CASH AND CASH EQUIVALENTS VARIATIONS OPERATING ACTIVITIES Net Income for the Fiscal Year 411, ,238 Plus Income Tax Accrued during the Fiscal Year 217, ,159 Plus Interests and Other Financial Expenses Accrued during the Fiscal Year, Net of Interests and Other Financial Income Accrued 125,016 74,657 Plus Discounts due to Trust Assignment of Receivables Accrued during the Fiscal Year - 8 Adjustments to Calculate the Net Cash Flow Resulting from Operating Activities (Note 2.14) 362, ,021 Changes in Operating Assets and Liabilities: Increase in Assets, Net (Note 2.15) (2,003,751) (1,287,340) Increase in Liabilities, Net (Note 2.16.) 590, ,248 NET CASH FLOW USED IN OPERATING ACTIVITIES (295,539) (81,009) INVESTING ACTIVITIES Sale of Government Securities, Holdings of Participation Certificates and Trust Debt Securities 4, ,455 Interests and Other Financial Income Obtained - 2,338 Payments for Purchases of Property, Plant and Equipment (Schedule A) (33,029) (20,005) Payments for Purchase of Software Licenses (Schedule B) (38,234) (19,672) Cash Contributions to Subsidiaries / Purchase and Sale of Interest in Other Companies (23,618) - NET CASH FLOW (USED IN) GENERATED BY INVESTING ACTIVITIES (90,081) 89,116 FINANCING ACTIVITIES Bank Loans Obtained (Note 6) 76, ,700 Checking Account Overdrafts Obtained (Note 6) 82,397 - Notes ( Obligaciones Negociables ) Issued (Note 7) 1,111, ,051 Payment of Dividends - Fiscal Years 2010 / 2009 (82,000) (40,000) Payment of Principal on Bank Loans and Financial Leasing (194,701) (123,682) Payment of Interests on Bank Loans and Financial Leasing (58,616) (47,629) Payment of Principal on Notes ( Obligaciones Negociables ) (385,684) (214,773) Payment of Interests on Notes ( Obligaciones Negociables ) (66,979) (32,616) Payment of Other Financial Expenses (19,841) (10,647) Loss due to Change in Net Fair Value Adjustments on Settled Derivative and Hedging Activities (9,356) (27,774) Payment of Tax on Bank Credits and Debits (11,333) (2,150) Refund of Irrevocable Contributions - (1,608) NET CASH FLOW GENERATED BY/ (USED IN) FINANCING ACTIVITIES 441,246 (49,128) FINANCIAL INCOME GENERATED BY CASH AND CASH EQUIVALENTS Interests and Foreign Exchange Income Generated by Time Deposits, Mutual Funds and Interest-bearing Checking Accounts 69,005 19,069 INCREASE IN CASH AND CASH EQUIVALENTS DUE TO FINANCIAL INCOME GENERATED BY CASH AND CASH EQUIVALENTS 69,005 19,069 INCREASE (DECREASE) IN CASH, NET 124,631 (21,952) The notes and schedules are an integral part of these financial statements

28 16 Notes to the Financial Statements December 31, 2011, on a comparative basis Figures stated in thousands of Pesos NOTE 1 ACCOUNTING STANDARDS The following is a detailed description of the most relevant accounting standards used by the Company for the preparation of these financial statements, which have been applied consistently with regard to the previous fiscal year Preparation and Presentation of the Financial Statements These financial statements are stated in constant currency and have been prepared in accordance with the general and particular disclosure and valuation accounting standards required by General Resolutions No. 485/05 and 487/06 of the CNV. These Resolutions, effective since January 1, 2006, adopted, with some amendments, Technical Resolutions No. 6, 8, 9, 11, 14, 16, 17, 18, 21 and 22 and interpretations 1, 2, 3 and 4 of the Argentine Federation of CPA Associations, with the amendments incorporated through Resolution No. 312/05 issued by such Federation. The Company s management believes that General Resolutions No. 485/05 and 487/06, as well as No. 441/03 (see Note 1.3), issued by the CNV, are applicable as a body of professional accounting standards in force in its jurisdiction, since Section 4 of Resolution No. 22/88 of the CPA Association of the Province of Córdoba determines that when the financial statements of an institution belong to companies that are subject to official regulating authorities that determine systems different from those approved by that CPA Association, such financial statements and the corresponding auditor s report should be in line with the regulations issued by the above-mentioned regulating authorities. Pursuant to the provisions of General Resolution No. 368/01 of the CNV, the consolidated financial statements and the supplementary notes thereto are submitted before the financial statements of the Company, and constitute supplementary information that should be read and analyzed in conjunction with the financial statements of the Company. The financial statements are presented in thousands of Pesos with no cents, the same as the supplementary notes, schedules and additional information to the financial statements Accounting Estimates The preparation of financial statements at a given date requires the Company s management to make estimates and assessments that affect the amounts of assets and liabilities reported and the disclosure of contingent assets and liabilities at that date, as well as the income and expenses recorded for the fiscal year. The Company s management has made estimates in order to calculate, at any given moment, for example, the provision for loan losses and for contingencies, depreciations and amortizations, the recoverable value of assets, the income tax provision and provisions for expenses. Future actual results may differ from estimates and assessments made at the date these financial statements were prepared.