20-F/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F/A

(Amendment No. 1)

☐ 

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☒ 

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2017

OR

☐ 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________________ to __________________.

OR

☐ 

SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report __________________.

Commission file number 001-38376

Central Puerto S.A.

(Exact name of Registrant as specified in its charter)

Port Central S.A.

(Translation of Registrant’s name into English)

REPUBLIC OF ARGENTINA

(Jurisdiction of incorporation or organization)

Avenida Thomas Edison 2701

C1104BAB Buenos Aires

Republic of Argentina

(Address of principal executive offices)

Fernando Roberto Bonnet

Avenida Thomas Edison 2701

C1104BAB Buenos Aires

Republic of Argentina.

Facsimile: +54 (11) 4317-5900

 Email: inversores@centralpuerto.com

 (Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of each class	Name of each exchange on which registered
American Depositary Shares, each representing 10 common shares of Central Puerto S.A.*	New York Stock Exchange*

* 

Not for trading, but only in connection with the registration of American Depositary Shares pursuant to the requirements of the New York Stock Exchange.

Securities registered or to be registered pursuant to Section 12(g) of the Act.

None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

Title of each class	Outstanding at December 31, 2017
Common shares, nominal value Ps.1.00 per share	1,514,022,256

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes  ☐            No   ☒

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes  ☐            No   ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.*

*The registrant became subject to such requirements on February 1, 2018.

Yes  ☒           No  ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). *

*The registrant became subject to such requirements on February 1, 2018.

Yes  ☒           No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ☐             Accelerated filer   ☐             Non-accelerated filer  ☒            Emerging growth company  ☒

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act.  ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP  ☐             International Financial Reporting Standards as issued             Other  ☐

by the International Accounting Standards Board ☒

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

Item 17  ☐            Item 18  ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  ☐             No  ☒

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Yes  ☐             No  ☐

EXPLANATORY NOTE

Central Puerto S.A. (“Central Puerto”) is filing this Amendment No. 1 (the “Form 20-F/A”) to its Annual Report on Form 20-F for the fiscal year ended December 31, 2017 (the “Form 20-F”), which was originally filed with the Securities and Exchange Commission on April 27, 2018, to submit the Interactive Data File (as defined in Rule 11 of Regulation S-T) with respect to the audited consolidated financial statements of Central Puerto for that fiscal year as Exhibit 101 to the Form 20-F in accordance with Rule 405 of Regulation S-T. Exhibit 101 was omitted from the Form 20-F in accordance with the 30-day grace period provided under Rule 405(a)(2)(ii) of Regulation S-T.

Except as set forth above, this Form 20-F/A does not modify or update any of the disclosures in the Form 20-F. This Form 20-F/A speaks as of the time of filing of the Form 20-F, does not reflect events that may have occurred subsequent to such filing, and does not modify or update in any way disclosures made in the Form 20-F.

Exhibit 101 to this Form 20-F/A provides the following items formatted in XBRL: (i) Consolidated Statement of Income for the years ended December 31, 2017, 2016 and 2015, (ii) Consolidated Statement of Comprehensive Income for the years ended December 31, 2017, 2016 and 2015, (iii) Consolidated Statement of Financial Position as of December 31, 2017 and 2016, (iv) Consolidated Statement of Changes in Equity for the years ended December 31, 2017, 2016 and 2015, (v) Consolidated Statement of Cash Flows for the years ended December 31, 2017, 2016 and 2015 and (vi) Notes to the Consolidated Financial Statements.

Item 19.  

Exhibits

EXHIBIT INDEX

101. INS*	XBRL Instance Document.
101.SCH*	XBRL Taxonomy Extension Schema Linkbase Document.
101. CAL*	XBRL Taxonomy Extension Calculation Linkbase Document.
101. DEF*	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document.

*          

In accordance with Rule 402 of Regulation S-T, the information in these exhibits shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing this Amendment No. 1 to Form 20-F and that it has duly caused and authorized the undersigned to sign this Amendment No. 1 to Form 20-F on its behalf.

CENTRAL PUERTO S.A.
By:	/S/ Fernando Roberto Bonnet
	Name: Fernando Roberto Bonnet Title: Chief Financial Officer

Date: May 22, 2018.

XML

Document and Entity Information	12 Months Ended
	Dec. 31, 2017 shares
Document And Entity Information
Entity Registrant Name	CENTRAL PUERTO S.A.
Entity Central Index Key	0001717161
Document Type	20-F
Document Period End Date	Dec. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	No
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding	1,514,022,256
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2017

XML

CONSOLIDATED STATEMENT OF INCOME - ARS ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Continuing operations
Revenues	$ 5,956,596	$ 3,562,721	$ 2,654,180
Cost of sales	(2,742,147)	(2,069,752)	(1,397,365)
Gross income	3,214,449	1,492,969	1,256,815
Administrative and selling expenses	(651,168)	(445,412)	(371,485)
Other operating income	640,480	1,137,736	735,517
Other operating expenses	(92,497)	(84,845)	(52,702)
Operating income	3,111,264	2,100,448	1,568,145
Finance income	932,227	420,988	362,363
Finance expenses	(697,638)	(620,448)	(138,308)
Share of the profit of associates	715,001	147,513	43,390
Income before income tax from continuing operations	4,060,854	2,048,501	1,835,590
Income tax for the year	(1,051,896)	(717,639)	(625,451)
Net income for the year from continuing operations	3,008,958	1,330,862	1,210,139
Discontinued operations
Income after tax for the year from discontinued operations	485,041	437,974	131,859
Net income for the year	3,493,999	1,768,836	1,341,998
Attributable to:
Equity holders of the parent	3,507,795	1,768,843	1,341,998
Non-controlling interests	(13,796)	(7)	0
Net income for the year	$ 3,493,999	$ 1,768,836	$ 1,341,998
Basic and diluted earnings per share	$ 2.33	$ 1.17	$ .89
Basic and diluted earnings per share from continuing operations	$ 2.01	$ .88	$ .80

XML

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - ARS ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Statement of comprehensive income [abstract]
Net income for the year	$ 3,493,999	$ 1,768,836	$ 1,341,998
Other comprehensive income to be reclassified to income in subsequent periods
(Loss) gain on available-for-sale financial assets	(442,864)	326,863	207,065
Income tax related to net gain (loss) on available-for-sale financial assets	151,401	(114,402)	(72,462)
Other comprehensive income (loss) to be reclassified to income in subsequent periods, net of tax	(291,463)	212,461	134,603
Other comprehensive loss not to be reclassified to income in subsequent periods
Remeasurement of losses from long-term employee benefits	(17,380)	(20,594)	(2,539)
Income tax related to remeasurement of losses from long-term employee benefits	2,867	7,208	889
Other comprehensive loss not to be reclassified to income in subsequent periods, net of tax	(14,513)	(13,386)	(1,650)
Other comprehensive income for the year	(305,976)	199,075	132,953
Total comprehensive income for the year	3,188,023	1,967,911	1,474,951
Attributable to:
Equity holders of the parent	3,201,819	1,967,918	1,474,951
Non-controlling interests	(13,796)	(7)	0
Total comprehensive income for the year	$ 3,188,023	$ 1,967,911	$ 1,474,951

XML

CONSOLIDATED STATEMENT OF FINANCIAL POSITION - ARS ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Non-current assets
Property, plant and equipment	$ 7,431,728	$ 2,811,539
Intangible assets	187,833	236,530
Investment in associates	985,646	307,012
Trade and other receivables	2,602,213	3,553,129
Other non-financial assets	12,721	1,466,547
Inventories	48,203	30,830
Total non-current assets	11,268,344	8,405,587
Current assets
Inventories	110,290	137,965
Other non-financial assets	470,895	137,110
Trade and other receivables	3,887,065	2,215,535
Other financial assets	1,110,728	1,796,756
Cash and cash equivalents	88,633	30,008
Subtotal	5,667,611	4,317,374
Assets held for sale	143,014	0
Total current assets	5,810,625	4,317,374
Total assets	17,078,969	12,722,961
Equity
Capital stock	1,514,022	1,514,022
Adjustment to capital stock	664,988	664,988
Merger premium	376,571	376,571
Legal and other reserves	519,189	431,007
Voluntary reserve	450,865	68,913
Retained earnings	3,503,046	1,757,051
Accumulated other comprehensive income	43,284	334,747
Equity attributable to holders of the parent	7,071,965	5,147,299
Non-controlling interests	289,035	6,717
Total equity	7,361,000	5,154,016
Non-current liabilities
Other non-financial liabilities	468,695	635,162
Other loans and borrowings	1,478,729	0
Borrowings from CAMMESA	1,055,558	1,284,783
Compensation and employee benefits liabilities	113,097	87,705
Deferred income tax liabilities	703,744	1,136,481
Provisions	0	125,201
Total non-current liabilities	3,819,823	3,269,332
Current liabilities
Trade and other payables	1,017,306	655,598
Other non-financial liabilities	659,668	476,785
Borrowings from CAMMESA	1,753,038	1,047,722
Other loans and borrowings	505,604	1,293,178
Compensation and employee benefits liabilities	323,078	205,923
Income tax payable	1,096,817	278,922
Provisions	413,474	341,485
Subtotal	5,768,985	4,299,613
Liabilities directly associated with the assets held for sale	129,161	0
Total current liabilities	5,898,146	4,299,613
Total liabilities	9,717,969	7,568,945
Total equity and liabilities	$ 17,078,969	$ 12,722,961

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - ARS ($) $ in Thousands	Capital Stock Face Value		Adjustment to Capital Stock	Merger Premium	Legal and Other Reserves	Voluntary Reserve	Unappropriated Retained Earnings	Other Accumulated Comprehensive Income (Loss)	Non-controlling Interests	Total
Beginning balance at Dec. 31, 2014	$ 199,742		$ 664,988	$ 366,082	$ 347,402	$ 1,205,983	$ 664,557	$ (12,317)	$ 0	$ 3,436,437
Net income for the year							1,341,998			1,341,998
Other comprehensive (loss) income for the year							(1,650)	134,603		132,953
Total comprehensive income for the year, net							1,340,348	134,603		1,474,951
Contributions from non-controlling interests										0
Increase in legal reserve					15,887		(15,887)			0
Increase in voluntary reserve						666,530	(666,530)			0
Dividends in cash						(365,000)	25,275			(339,725)
Ending balance at Dec. 31, 2015	199,742		664,988	366,082	363,289	1,507,513	1,347,763	122,286	0	4,571,663
Net income for the year							1,768,843		(7)	1,768,836
Other comprehensive (loss) income for the year							(13,386)	212,461		199,075
Total comprehensive income for the year, net							1,755,457	212,461	(7)	1,967,911
Contributions from non-controlling interests									6,724	6,724
Decrease in capital stock	(10,489)			10,489						0
Increase in legal reserve					67,718		(67,718)			0
Increase in voluntary reserve						1,286,641	(1,286,641)			0
Dividends in cash						(1,400,472)	8,190			(1,392,282)
Dividends in shares	1,324,769					(1,324,769)				0
Ending balance at Dec. 31, 2016	1,514,022		664,988	376,571	431,007	68,913	1,757,051	334,747	6,717	5,154,016
Net income for the year							3,507,795		(13,796)	3,493,999
Other comprehensive (loss) income for the year							(14,513)	(291,463)		(305,976)
Total comprehensive income for the year, net							3,493,282	(291,463)	(13,796)	3,188,023
Contributions from non-controlling interests							2,240		293,172	295,412
Share-based payments									2,942	2,942
Increase in legal reserve					88,182		(88,182)			0
Increase in voluntary reserve						1,668,869	(1,668,869)			0
Dividends in cash						(1,286,917)	7,524			(1,279,393)
Ending balance at Dec. 31, 2017	$ 1,514,022	[1]	$ 664,988	$ 376,571	$ 519,189	$ 450,865	$ 3,503,046	$ 43,284	$ 289,035	$ 7,361,000

[1] Common stock, ARS 1.00 par value; 1,514,022,256 authorized, outstanding and issued shares. At December 31, 2017, a subsidiary held 8,851,848 common shares.

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CONSOLIDATED STATEMENT OF CASH FLOWS - ARS ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Operating activities
Income for the year before income tax from continuing operations	$ 4,060,854	$ 2,048,501	$ 1,835,590
Income for the year before income tax from discontinued operations	749,198	673,807	202,860
Income for the year before income tax	4,810,052	2,722,308	2,038,450
Adjustments to reconcile income for the year before income tax to net cash flows:
Depreciation of property, plant and equipment	278,679	201,865	157,189
Loss (gain) on disposal of property, plant and equipment	559	2,570	(8,435)
Amortization of intangible assets	48,697	40,161	37,271
Discount of accounts receivable and payable, net	(51,838)	(718,114)	(118,560)
Interest earned from customers	(270,715)	(108,423)	(41,965)
Finance income	(932,227)	(420,988)	(362,363)
Finance expenses	697,977	634,903	160,186
Share of the profit of associates	(715,001)	(147,513)	(43,390)
Share-based payments	2,942	0	0
Movements in provisions and long-term employee benefit plan	125,770	102,982	97,220
Working capital adjustments:
Increase in trade and other receivables	(1,057,029)	(966,677)	(882,760)
Decrease (Increase) in other non-financial assets, other financial asset and inventories	(376,674)	822,394	(48,554)
Increase in trade and other payables, other non-financial liabilities and liabilities from employee benefits	477,218	600,784	422,538
Total	3,038,410	2,766,252	1,406,827
Interest received from customers	76,198	70,234	31,592
Income tax and minimum presumed income tax paid	(725,625)	(747,879)	(165,432)
Net cash flows provided by operating activities	2,388,983	2,088,607	1,272,987
Investing activities
Purchase of property, plant and equipment	(3,483,521)	(1,070,201)	(664,166)
Upfront payments of property, plant and equipment purchases	0	(1,118,158)	(479,677)
Dividends received	36,372	25,798	60,616
Interest received from financial assets	0	4,088	31,529
Sale (Purchase) of available-for-sale financial assets, net	1,129,860	207,670	(290,240)
(Purchase) Sale of investments in associates	(6)	25,053	0
Net cash flows used in investing activities	(2,317,295)	(1,925,750)	(1,341,938)
Financing activities
Movement in short term borrowings	(312,210)	106,759	158,289
Bank loans received	1,871,894	868,789	0
Repayments of bank loans	(994,966)	0	0
Borrowings received from CAMMESA	403,427	784,245	733,906
Repayment of 9%Corporate bonds—Class I 2007	0	(743,087)	(288,182)
Interest paid	(42,758)	(64,157)	(88,722)
Dividends paid	(1,279,393)	(1,392,282)	(339,725)
Contributions from non-controlling interests	295,412	6,724	0
Net cash flows (used in) provided by financing activities	(58,594)	(433,009)	175,566
Increase (Decrease) in cash and cash equivalents	13,094	(270,152)	106,615
Exchange difference and other financial results	45,531	7,671	5,697
Cash and cash equivalents, beginning	30,008	292,489	180,177
Cash and cash equivalents, ending	$ 88,633	$ 30,008	$ 292,489

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1. Corporate information and main business

12 Months Ended

Dec. 31, 2017

Corporate Information And Main Business

Corporate information and main business

Central Puerto S.A. (hereinafter the “Company”, ”we”, “us” or “CEPU”) and the companies that make up the business group (hereinafter the “Group”) form an integrated group of companies pertaining to the energy sector. The Group is mainly engaged in electric power generation and commercialization.

CEPU was incorporated pursuant to Executive Order No. 122/92. We were formed in connection with privatization process involving Servicios Eléctricos del Gran Buenos Aires S.A. (“SEGBA”) in which SEGBA’s electricity generation, transportation, distribution and sales activities were privatized.

On April 1, 1992, Central Puerto S.A., the consortium-awardee, took possession over SEGBA’s Nuevo Puerto and Puerto Nuevo plants, and we began operations.

Our shares are listed on the BCBA (“Buenos Aires Stock Exchange”), and, since February 2, 2018, they are listed on the NYSE (“New York Stock Exchange”), both under the symbol “CEPU”.

The Group owns five thermal generation plants across three complexes: Puerto, La Plata and Luján de Cuyo as follows:

– Our Puerto complex is composed of two facilities, Central Nuevo Puerto (“Nuevo Puerto”) and Central Puerto Nuevo (“Puerto Nuevo”), located in the port of the City of Buenos Aires on the bank of the Rio de la Plata. Our Puerto complex’s facilities include the Nuevo Puerto and the Puerto Nuevo steam turbines plants and the Puerto Combined Cycle plant and has a current installed capacity of 1,714 MW.

– Our Luján de Cuyo plant is located in Luján de Cuyo, Province of Mendoza and has an installed capacity of 509 MW. The plant also has a combined heat and power unit in place, which supplies 150 tons per hour of steam to YPF’s refinery in Luján de Cuyo under a steam provision contract.

– Our La Plata plant is located in La Plata, Ensenada, Province of Buenos Aires and has an installed capacity of 128 MW and steam generating capacity of 240 tons per hour. The plant is installed on property owned by YPF’s La Plata refinery in connection with a 22-year agreement with YPF for the supply of steam and electricity beginning on October 31, 1995. As of further described in notes 22.2 and 22.8 in 2018 we transferred the plant to YPF Energía Eléctrica S.A. (“YPF EE”), a subsidiary of YPF.

The Group also owns the concession right of the Piedra del Águila hydroelectric power plant located at the edge of Limay river and on the border of the Neuquén and Rio Negro provinces. Piedra del Águila has an installed capacity of 1,440 MW from four 360 MW generating units.

The Group is also engaged in the natural gas distribution public sector service in the Cuyo and Centro regions in Argentina, through its equity investees Distribuidora de Gas del Centro S.A. and Distribuidora de Gas Cuyana S.A. (See note 3.2).

The Group is engaged in the management and operations of the thermal plants José de San Martín and Manuel Belgrano through its equity investees Termoeléctrica José de San Martín S.A. (“TJSM”) and Termoeléctrica General Belgrano S.A. (“TMB”). Additionally, through its subsidiary Central Vuelta de Obligado S.A. (“CVO”) the Group is engaged in the construction management and operation of the thermal plant Central Vuelta de Obligado.

Through its subsidiary Proener S.A., the Group sells and transports any type of fuels both in the country and abroad.

Moreover, as of the incorporation of CP Renovables S.A. (“CPR”) and its subsidiaries, the Group has begun to participate in the development and construction of energy projects based on the use of renewable energy sources.

Merger with Hidroneuquén SA, Operating SA and Sociedad Argentina de Energía SA

In December 2015, our Board of Directors approved the merger with our shareholders Hidroneuquén SA (“HDNQ”) and Operating SA (“Operating”) and our ultimate parent company Sociedad Argentina de Energia SA (“SADESA”). All the companies were under common control of SADESA. After the merger, CEPU is the surviving company. The effective date of the merger was January 1, 2016 and it was approved for the shareholders of the three companies in March 2016 and by the Argentine securities regulator (hereinafter “CNV”) in July 2016. The transaction has been accounted for at historical cost, similar to a pooling of interests, with a restatement of prior period financial statement to give retrospective effects to the merger as if the entities have always been under the same consolidated group. The restated financial statements have been presented to shareholders of the Company pursuant to the rules of CNV.

Overview of Argentine Electricity Market

Transactions among different participants in the electricity industry take place through the wholesale electricity market (“WEM”) which is a market in which generators, distributors and certain large users of electricity buy and sell electricity at prices determined by supply and demand (“Term market”) and also, where prices are established on an hourly basis based on the economic production cost, represented by the short term marginal cost measured at the system’s load center (“Spot market”). CAMMESA (Compañía Administradora del Mercado Mayorista Eléctrico Sociedad Anónima) is a quasi-government organization that was established to administer the WEM and functions as a clearing house for the different market participants operating in the WEM. Its main functions include the operation of the WEM and dispatch of generation and price calculation in the Spot market, the real-time operation of the electricity system and the administration of the commercial transactions in the electricity market.

Following Argentina’s economic crisis in 2001 and 2002 the costs of generators were increasing as a result of the devaluation of the Argentine peso and increasing fuel prices. As a result of the freeze in end user tariffs combined with the higher generation costs, CAMMESA began experiencing deficits as it was not able to collect from the end users (via distributors) the full price of electricity it owed to the generators. Given this structural deficit, CAMMESA passed a series of regulations to keep the electrical system operating despite the structural deficit.

Amendments to WEM regulations

a) Resolution SE No. 406/03 and other regulations related to WEM generators’ receivables

Resolution 406/03 issued in September 2003 enforced priority payments of generator’s balances. Under the priority payment plan, generators only collected the variable generation costs declared and the payments for power capacity and the remaining payments on these plants were delayed as there were not sufficient funds as a result of the structural deficit. Resolution 406/03 established that the resulting monthly obligations to generators for the unpaid balance were to be considered payments without a fixed due date, or “LVFVD receivables” using the Spanish acronym. Although these obligations did not have a specified due date, the Resolution provided that they would earn interest at an equivalent rate to the one received by CAMMESA on its own cash investments, hereafter “the CAMMESA rate”.

As a result of this regulation, a portion of the invoices issued by Company’s plants were not paid in full beginning in 2004.

Between 2004 and 2007, the Argentine government issued a series of resolutions aimed at increasing thermal generation capacity while at the same time providing a mechanism for generators to collect their LVFVD receivables. These resolutions created funds called the “FONINVEMEM” which were administered by trusts (“the FONINVEMEM trust”) and made investments in two thermal generation plants within Argentina. All WEM creditor agents with LVFVD (including the Company) were invited to state formally their decision to participate in forming the FONINVEMEM. The Company, as most LVFVD generators, stated its decision to participate in the creation of the FONINVEMEM with the abovementioned receivables.

Under these Resolutions, the FONINVEMEM trusts are the owner of the plants during the first ten years of operations.

The FONINVEMEM agreements established that the receivables mentioned above will be paid by CAMMESA in 120 equal, consecutive monthly installments commencing on the commercial operation date of the plants. The LVFVD receivables were converted to US dollar to protect the generators from deterioration in the Argentine peso and began earning interest at LIBOR plus a spread as stipulated in the agreement (as opposed to the CAMMESA rate). After the initial ten years of the plants’ operations, ownership of the plants will be allocated to the generators and the government in accordance with a ratio between the total cost of the plants and the amount of each generator LVFVD. However, the allocation of ownership interests in the plants between and among the generators and the government was not stated in the agreements and has not been communicated to the Company. Further, any remaining debt obligation that was used to fund the construction of the plant is not expected to be transferred to the generators upon receiving equity interests in the plant.

The Company participated with LVFVD accrued over the 2004 - 2007 period in the FONINVEMEM trusts to construct the thermal generation plants named Thermal Jose de San Martin and Thermal Manuel Belgrano, which became operational in early 2010. At that time, CAMMESA informed the Company of the payment plan, including the amount of accrued interest at the CAMMESA rate which was added to the principal to be repaid in monthly installments over a ten-year period. Upon receipt of the payment schedule, the Company recognized accrued interest (related to the CAMMESA rate). The Company also began recognizing LIBOR interest income based on the contractual rate provided in the Resolution and the conversion of the receivables into US dollar. Since achieving commercial operations in 2010, CAMMESA have made all scheduled contractual principal and interest payments in accordance with the installment plan.

Additionally, in 2010 the Company approved a new agreement with the former Secretariat of Energy (Central Vuelta Obligado, the “CVO agreement”). This agreement established, among other agreements, a framework to determine a mechanism to settle unpaid trade receivables as per Resolution 406/03 accrued over the 2008-2011 period by the generators (“CVO receivables”) and for that purpose, enabling the construction of a thermal combined cycle plant named Central Vuelta de Obligado. The CVO agreement established that the CVO receivables will be paid by CAMMESA in 120 equal, consecutive monthly installments, they will be converted into US dollars at the rate stipulated in the agreement (Argentine Pesos 3.97 per US dollar) and they will accrue interest at LIBOR + 5%.

As of December 31, 2017, the stages of the work had not been completed in the contractually agreed terms, therefore there were uncertainties regarding the completion of the thermal combined cycle plant, and consequently, of its commissioning. Additionally, CAMMESA has not reported the amount of interest accrued on the CVO receivables corresponding to the CAMMESA rate, and therefore, the Company considered that the conditions set forth by IFRS for recognition had not been met at period-end. For this reason, we have not recognized interests as well as the effect of the conversion of these receivables into US dollars due to uncertainties in the application of the agreement terms by CAMMESA because the agreement included conditions precedent to complete the combined-cycle project and obtain the related regulatory approvals, which had not yet occurred. (See note 14.1).

Under the agreements mentioned in the previous paragraphs, generators created three companies, Termoeléctrica José de San Martín S.A., Termoeléctrica Manuel Belgrano S.A. and Central Vuelta de Obligado S.A., each of which is in charge of managing the purchase of equipment, construction, operation and maintenance of each of the new thermal power plants.

b) Resolution No. 95/2013, Resolution No. 529/2014, Resolution No. 482/2015 and Resolution No. 22/2016

On March 26, 2013, the former Secretariat of Energy released Resolution No. 95/2013 (“Resolution 95”), which affects the remuneration of generators whose sales prices had been frozen since 2003. This new regulation, which modified the current regulatory framework for the electricity industry, is applicable to generators with certain exceptions. It defined a new compensation system based on compensating for fixed costs, non-fuel variable costs and an additional remuneration. Resolution 95 converted the Argentine electric market towards an “average cost” compensation scheme. Resolution 95 applied to all Company’s plants, excluding La Plata plant, which also sells energy in excess of YPF’s demand on the Spot market pursuant to the framework in place prior to Resolution 95.

In addition, Resolution 95 addressed LVFVD receivables not already included in any one of the FONINVEMEM trusts.

Thermal units must achieve an availability target which varies by technology in order to receive full fixed cost revenues. The availability of all Company’s plants exceeds this market average. As a result of Resolution 95, revenues to Company’s thermal units increased, but the impact on hydroelectric plant Piedra del Águila is dependent on hydrology. The new Resolution also established that all fuels, except coal, are to be provided by CAMMESA.

The resolution also established that part of the additional remuneration shall be not collected in cash rather it is implemented through LVFDV and will be directed to a “New Infrastructure Projects in the Energy Sector” which need to be approved by the former Secretariat of the Energy.

Finally, Resolution 95 suspended the inclusion of new contracts in the Term market as well as their extension or renewal. Notwithstanding the foregoing, contracts in force as at the effective date of Resolution 95 will continue being managed by CAMMESA upon their termination. As from such termination, large users should acquire their supplies directly from CAMMESA.

On May 23, 2014, the Official Gazzette published Resolution No. 529/2014 issued by the former Secretariat of Energy (“Resolution 529”) which retroactively updated the prices of Resolution 95 to February 1, 2014, changed target availability and added a remuneration for non-recurrence maintenance. This remuneration is implemented through LVFDV and is aimed to cover the expenses that the generator incurs when performing major maintenances in its units.

On July 17, 2015, the Secretariat of Electric Energy set forth Resolution No. 482/2015 (“Resolution 482”) which retroactively updated the prices of Resolution 529 to February 1, 2015, and created a new trust called “Recursos para las inversiones del FONINVEMEM 2015-2018” in order to invest in new generation plants. Company’s plants would receive compensation under this program.

Finally, on March 30, 2016, through Resolution No. 22/2016 (“Resolution 22”), the values set by Resolution 482 were updated to become effective as from the transactions of February 2016.

c) Resolution No. 19/2017

On January 27, 2017, the Secretariat of Electric Energy (“SEE”) issued Resolution SEE No. 19/17 (published in the Official Gazette on February 2, 2017) (Resolution 19), which replaced Resolution 95, as amended. This resolution changes electric energy generators remuneration methodology for transactions operated since February 1, 2017.

Resolution 19 substantially amended the tariff scheme applicable, which was previously governed by Resolution 22. Among its most significant provisions, such resolution established: (a) that generation companies would receive a remuneration of electric power generated and available capacity, (b) gradual increases in tariffs effective as of February, May and November 2017, (c) that the new tariffs would be denominated in U.S. dollars, instead of Argentine pesos, thus protecting generation companies from potential fluctuations in the value of the Argentine peso and (d) 100% of the energy sales are collected in cash by generators, eliminating the creation of additional LVFVD receivables.

Pursuant to this resolution, the Secretariat of Electric Energy established that electricity generators, co-generators and self-generators acting as agents in the WEM and which operate conventional thermal power plants, may make guaranteed availability offers (ofertas de disponibilidad garantizada) in the WEM. Pursuant to these offers, these generation companies may commit specific capacity and power output of the generation, provided that such capacity and energy had not been committed under other power purchase agreements. The offers must be accepted by CAMMESA (acting on behalf of the electricity demanding agents of the WEM), who will be the purchaser of the power under the guaranteed availability agreements (compromisos de disponibilidad garantizada). The term of the guaranteed availability agreements is 3 years, and their general terms and conditions are established in Resolution 19.

Resolution 19 also establishes that WEM agents that operate hydroelectric power plants shall be remunerated for the energy and capacity of their generation units in accordance with the values set forth in such resolution.

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2. Basis of preparation of the consolidated financial statements

12 Months Ended

Dec. 31, 2017

Basis Of Preparation Of Consolidated Financial Statements

Basis of preparation of the consolidated financial statements

2.1. Basis of preparation

The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

The attached financial statements have been prepared in order to be included in a Securities and Exchange Commission (“SEC”) filing and have been approved by the Company’s Board of Directors on April 24, 2018.

These consolidated financial statements provide comparative information in respect of the previous years.

In preparing these consolidated financial statements, the Group applied the significant accounting policies, estimates and assumptions described in notes 2.2 and 2.3, respectively. Moreover, the Group has adopted the changes in accounting policies described in note 2.4.

These financial statements have been prepared on a historical cost basis, except for available-for-sale financial assets and financial assets at fair value through profit or loss, which have been measured at fair value.

The Group’s consolidated financial statements are presented in Argentine pesos, which is the Group’s functional currency, and all values have been rounded to the nearest thousand (ARS 000), except when otherwise indicated.

2.1.1. Basis of consolidation

The consolidated financial statements as of December 31, 2017 and 2016 and for each of the years ended December 31, 2017, 2016 and 2015, include the financial statements of the Group formed by the parent company and its subsidiaries: Central Vuelta de Obligado S.A., Proener S.A.U. and CP Renovables S.A. and its subsidiaries.

Control is achieved when the investor is exposed or entitled to variable returns arising from its ownership interest in the investee, and has the ability to affect such returns through its power over the investee. Specifically, the investor controls an investee, if and only if it has:

– Power over the investee (i.e. the investor has rights that entitle it to direct the relevant activities of the investee).

– Exposure or right to variable returns arising from its ownership interest in the investee.

– Ability to exercise its power over the investee to significantly affect its returns.

Consolidation of a subsidiary begins when the parent company obtains control over the subsidiary and ends when the parent company loses control over the subsidiary. The assets, liabilities, income and expenses of a subsidiary acquired or sold during the fiscal year are included in the consolidated financial statements from the date on which the parent company acquired control of the subsidiary to the date on which the parent company ceased to control the subsidiary.

The result for the fiscal year and each component of the other comprehensive income (loss) are assigned to the owners of the parent company and non-controlling interests, even if the results of the non-controlling interests give rise to a debit balance. If necessary, appropriate adjustments are made to the subsidiaries’ financial statements so that their accounting policies are in accordance with the Group’s accounting policies. All assets and liabilities, equity, income, expenses and cash flows within the Group that relate to transactions among the members of the Group are completely eliminated in the consolidation process.

A change in ownership interest in a subsidiary, without loss of control, is accounted for as an equity transaction. If the Group loses control of a subsidiary, it cancels the carrying amount of the assets (including goodwill) and related liabilities, non-controlling interests and other equity components, while recognizing the profit or loss resulting from the transaction in the relevant income statement. Any retained residual interest is recognized at its fair value.

2.1.2. Measuring unit

Under International Accounting Standard (IAS) 29, the financial statements of an entity whose functional currency is the currency of a hyperinflationary economy, whether they are based on a historical cost approach or a current cost approach, should be stated in terms of the measuring unit current at the end of the reporting fiscal year. Although this standard does not establish an absolute inflation rate at which hyperinflation is deemed to arise, it is a general practice to consider a cumulative rate for changes in prices over the last three years that approaches or exceeds 100%, together with a series of other qualitative factors related to the macroeconomic environment, as a condition signifying hyperinflation.

Management assesses whether the Argentine pesos has the characteristics to be described as the currency of a hyperinflationary economy following the guidelines established in IAS 29, and for the evaluation of the quantitative factor previously mentioned, considers the development of the domestic wholesale price index (“DWPI”) published by the “Argentine Statistics and Census Institute” (“INDEC” for its Spanish acronym), given such index best reflects the conditions required by IAS 29.

Since the new national government took office on December 10, 2015, a reorganization process of the INDEC has begun. Such agency has published monthly inflation data measured on the basis of the DWPI as from January 2016, without measuring specific inflation for the months of November and December 2015. As of December 31, 2017, the accumulated inflation rate for the three-year period ended on that date, measured on the basis of the official INDEC data for that index, is approximately 77%, without computing the missing inflation data corresponding to the months of November and December 2015.

2.2. Summary of significant accounting policies

The following are the significant accounting policies applied by the Group in preparing its consolidated financial statements.

2.2.1.Classification  of items as current and non-current

The Group classifies assets and liabilities in the consolidated statement of financial position as current and non-current. An entity shall classify an asset as current when:

– it expects to realize the asset, or intends to sell or consume it, in its normal operating cycle;

– it holds the asset primarily for the purpose of trading;

– it expects to realize the asset within twelve months after the reporting period; or

– the asset is cash or a cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

An entity shall classify a liability as current when:

– it is expected to be settled in normal operating cycle;

– It is held primarily for the purpose of trading;

– it is due to be settled within twelve months after the reporting period; or

– there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

All other liabilities are classified as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities, in all cases.

2.2.2.Fair  value measurement

The Group measures certain financial instruments at their fair value at each reporting date. In addition, the fair value of financial instruments measured at amortized cost is disclosed in note 14.6.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

– in the principal market for the asset or liability, or

– in the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible to the Group. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

– Level 1 input data: quoted (unadjusted) prices in active markets for identical assets or liabilities.

– Level 2 input data: valuation techniques with input data other than the quoted prices included in Level 1, but which are observable for assets or liabilities, either directly or indirectly.

– Level 3 input data: valuation techniques for which input data are not observable for assets or liabilities.

2.2.3.Transactions  and balances in foreign currency

Transactions in foreign currencies are recorded by the Group at the related functional currency rates prevailing at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rate of exchange ruling at the reporting period-end.

All differences are taken to consolidated statement of income under other operating income or expenses, or under finance income or expenses, depending on the nature of assets or liabilities generating those differences.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions.

2.2.4.Revenue  recognition

2.2.4.1. Revenue from ordinary activities

Revenue from ordinary activities is recognized to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured, regardless of when the payment is being made by the customer. Revenue is measured at the fair value of the consideration received or receivable, considering the agreed-upon payment terms and excluding taxes or duties. The Group assesses its revenue arrangements against specific criteria in order to determine if it is acting as principal or agent.

Revenue from the sale of energy and power is calculated at the prices established in the relevant agreements or at the prices prevailing in the electricity market, pursuant to current regulations. They include revenues from energy and power provided and not billed, until after the end of the reporting period, valued at the prices defined in agreements or in the relevant regulations for each fiscal year.

2.2.4.2. Other income

Interest

For all financial assets and liabilities measured at amortized cost and interest bearing financial assets classified as available for sale, interest income or expense is recorded using the effective interest rate method, which is the rate that exactly discounts the estimated future cash payments or receipts through the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset or liability. In general, interest income and expense is included in finance income and expenses in the consolidated statement of income, respectively, unless they derive from operating items (such as trade and other receivables or trade and other payables); in that case, they are booked under other operating income and expenses, as the case may be.

2.2.5.Taxes

Current income tax and minimum presumed income tax

Current income tax assets and liabilities for the year are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute those amounts are those that are enacted or substantively enacted, at the end of the reporting period. The statutory tax rate for the Group for the fiscal year 2017 is 35% (See note 23.a).

Current income tax relating to items recognized directly in equity is recognized in equity and not in the consolidated statement of income.

Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Minimum presumed income tax is supplementary to income tax since while the latter is levied on taxable income for the reporting period, minimum presumed income tax is a minimum levy determined by applying the current 1% rate to the potential income of certain productive assets. Therefore, the Group’s tax obligation shall be the higher of these two taxes. However, should minimum presumed income tax exceed current income tax owed in a given tax year, such excess may be carried forward as payment on account of any income tax in excess of the minimum presumed income tax that could occur in any of the ten subsequent tax years.

Minimum presumed income tax credit is measured at non-discounted nominal value, as it is similar to a deferred income tax asset.

The carrying amount of minimum presumed income tax is reviewed at each reporting period date and reduced against income or loss for the period under income tax charge to the extent that its use as payment on account of income tax in future fiscal years is no longer probable. Minimum presumed income tax credit not recognized as credit or previously derecognized is reviewed as of each reporting period-end and it is recognized as an asset against income or loss for the period under income tax expenses to the extent that it is likely to be used as payment on account of income tax payable in future years.

On July 22, 2016, Law No. 27,260 was published, which, among other aspects, repealed the minimum presumed income tax for fiscal years beginning on or after January 1, 2019.

Deferred income tax

Deferred income tax is provided using the liability method on temporary differences at the end of the reporting period between the tax bases of assets and liabilities and their related carrying amounts.

Deferred income tax liabilities are recognized for all taxable temporary differences, except:

– where the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss;

– in respect of taxable temporary differences associated with investments in subsidiaries and associates, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred income tax assets are recognized for all deductible temporary differences and tax carry forwards losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and/or the tax losses carry forward can be utilized, except:

– where the deferred income tax asset arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss;

– in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred income tax assets are recognized only to the extent that it is probable that the deductible temporary differences will reverse in the foreseeable future and taxable profit will be available against which those differences can be utilized.

The carrying amount of deferred income tax assets is reviewed at each reporting period date and reduced against income or loss for the period or other comprehensive income, as the case may be, to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized (recovered). Unrecognized deferred income tax assets are reassessed at each reporting period date and are recognized with a charge to income or other comprehensive income for the period, as the case may be, to the extent that it has become probable that future taxable profits will allow the deferred income tax asset not previously recognized to be recovered.

Deferred income tax assets and liabilities are measured at undiscounted nominal value at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting period date.

Deferred income tax relating to items recognized outside profit or loss is recognized outside profit or loss. Deferred income tax items are recognized in correlation to the underlying transactions either in other comprehensive income or directly in equity.

Deferred income tax assets and deferred income tax liabilities are offset if a legally enforceable right exists to set off current income tax assets and liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority. 

Other taxes related to sales and to bank account transactions

Revenues from recurring activities, expenses incurred and assets are recognized excluding the amount of sales tax, as in the case of value-added tax or turnover tax, or the tax on bank account transactions, except:

– where the tax incurred on a sale or on a purchase of assets or services is not recoverable from the taxation authority, in which case the sales tax is recognized as part of the cost of acquisition of the asset or as part of the expense item as the case may be;

– receivables and payables are stated including value-added tax.

The charge for the tax on bank account transactions is presented in the administrative and selling expenses line within the consolidated statement of income.

The net amount of the tax related to sales and to bank account transactions recoverable from, or payable to, the taxation authority is included as a non-financial asset or liability, as the case may be.

2.2.6.Property,  plant and equipment

Property, plant and equipment is stated at cost, net of accumulated depreciation and/or accumulated impairment losses, if any.

When significant parts of property, plant and equipment are required to be replaced at intervals, the Group derecognizes the replaced part and recognizes the new part with its own associated useful life and depreciation. Likewise, when a major maintenance is performed, its cost is recognized as a replacement if the conditions for the recognition thereof as an asset are met. All other regular repair and maintenance costs are recognized in the consolidated statement of income as incurred.

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use are capitalized as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

Electric power facilities and materials and spare parts related to the Puerto Combined Cycle plant are depreciated on a unit-of-production basis.

Electric power facilities related to the Luján de Cuyo plant are depreciated on a straight-line basis over the total useful lives estimated.

Electric power facilities and auxiliary equipment of Piedra del Águila hydroelectric power plant are depreciated on a straight-line basis over the remaining life of the concession agreement of the mentioned power plant.

The depreciation of the remaining property, plant and equipment is calculated on a straight-line basis over the total estimated useful lives of the assets as follows:

– Buildings: 5 to 50 years.

– Lands are not depreciated.

– Material and spare parts: based on the useful life of related machinery and equipment to be replaced.

– Furniture, fixtures and equipment: 5 to 10 years.

– Others:3 to 5 years.

An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the consolidated statement of income when the asset is derecognized.

The residual values, useful lives and methods of depreciation are reviewed at each reporting period end and adjusted prospectively, if appropriate.

The amount of borrowing costs capitalized during the year ended December 31, 2017 was 69,373, related to expenditures for our La Castellana and Achiras wind projects. The rate used to determine the amount of borrowing costs eligible for capitalization is the effective interest rate of the specific borrowings.

2.2.7.Intangible  assets

Intangible assets acquired separately are measured on initial recognition at acquisition cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization (if they are considered as having finite useful lives) and accumulated impairment losses, if any.

The useful lives of intangible assets are assessed as either finite or indefinite. The useful lives of the intangible assets recognized by the Group are finite.

Intangible assets with finite useful lives are amortized over their useful economic lives. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of the asset is accounted for by changing the amortization period or method, as appropriate, and are treated prospectively as changes in accounting estimates. The amortization expense on intangible assets with finite lives is recognized in the consolidated statement of income in the expense category consistent with the function of the intangible assets. The Group’s intangible assets are described in note 13.

2.2.8.Impairment  of property, plant and equipment and intangible asset

The Group assesses at each reporting period-end whether there is an indication that an individual component or a group of property, plant and equipment and/or intangible assets with finite useful lives may be impaired. If any indication exists, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of the fair value less costs to sell that asset, and its value-in-use. That amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets; in which case, the cash flows of the group of assets that form part of the cash-generating unit (“CGU”) to which they belong are taken.

Where the carrying amount of an individual asset or CGU exceeds its recoverable amount, the individual asset or CGU, as the case may be, is considered impaired and is written down to its recoverable amount.

In assessing value in use of an individual asset or CGU, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the individual asset or CGU, as the case may be.

In determining fair value less costs to sell, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used. These calculations are verified by valuation multiples, quoted values for similar assets on active markets and other available fair value indicators, if any.

The Group bases its impairment calculation on detailed budgets and forecast calculations which are prepared separately for each of the Group’s CGU to which the individual assets are allocated. These detailed budgets and forecast calculations generally cover a five-year period. For longer periods, a long-term growth rate is calculated and applied to project future cash flows after the fifth year.

Impairment losses of continuing operations are recognized in the consolidated statement of income in those expense categories consistent with the function of the impaired asset generally in the cost of sales or other operating expenses.

In addition, for the assets for which an impairment loss had been booked, as of each reporting period-end, an assessment is made whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased.

A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the individual assets or CGU’s recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset or CGU does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of the related depreciation or amortization, had no impairment loss been recognized for the asset or CGU in prior periods. Such reversal is recognized in the statement of income in the same line in which the related impairment charge was previously recognized (generally under the cost of sales or other operating expenses), unless the asset is carried at a revalued amount, in which case, the reversal is treated as a revaluation increase.

During the years ended December 31, 2017, 2016 and 2015 no impairment charge or reversal of impairment charges was recognized.

2.2.9.Financial  instruments. Presentation, recognition and measurement

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

2.2.9.1. Financial assets

Initial recognition and subsequent measurement

Financial assets subject to IAS 39 are classified, at initial recognition, as financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, available-for-sale financial assets, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The Group determines the classification of financial assets at initial recognition.

All financial assets are recognized initially at fair value plus, in the case of financial assets recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.

For purposes of subsequent measurement, financial assets are classified in four categories:

– Financial assets at fair value through profit or loss;

– Loans and receivables;

– Held-to-maturity investments; and

– Available-for-sale financial assets.

The Group’s financial assets include cash and cash equivalents, trade and other receivables, foreign currency forward contracts, mutual funds and investments in quoted debt securities.

The subsequent measurement of financial assets depends on their classification at initial recognition, as described below:

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets held for trading and financial assets designated upon initial recognition at fair value through profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. This category includes derivative financial assets that are not designated as effective hedging instruments as defined by IAS 39.

Financial assets at fair value through profit and loss are carried in the statement of financial position at fair value with changes in fair value recognized in finance income (positive net changes in fair value) or finance costs (negative net changes in fair value) in the statement of income.

The Group periodically evaluates its financial assets held for trading, other than derivatives, to determine whether the intention to sell them in the near term is still appropriate. When the Group is unable to trade these financial assets due to inactive markets and its intention to sell them in the foreseeable future significantly changes, the Group may elect to reclassify these financial assets in rare circumstances. The reclassification of a financial asset designated as loans and receivables to available-for-sale or held to maturity depends on the nature of the asset. This evaluation does not affect any financial assets designated at fair value through profit or loss using the fair value option at designation, as these instruments may not be reclassified following initial recognition.

The financial assets at fair value through profit or loss include listed debt securities, foreign exchange forward contracts and mutual funds.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate method (EIR), less impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income or other operating income in the statement of income, depending on the nature of the asset giving rise to it. The losses arising from impairment are recognized in the statement of income in other operating expense.

The “Loans and receivables” account includes trade and other receivables.

Held-to-maturity investments

Non-derivative financial assets with fixed or determinable payments and fixed maturities are classified as held-to-maturity when the Group has the positive intention and ability to hold them to maturity. After initial measurement, held-to-maturity investments are measured at amortized cost using the effective interest method, less impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the statement of income. The losses arising from impairment are recognized in the statement of income in finance costs. The Group did not have any held-to-maturity investments during 2017 and 2016.

Available-for-sale financial assets

A financial asset is classified as available for sale if it is not included in any of the other three categories of financial assets.

Available-for-sale financial assets include mutual funds and debt securities. Debt securities and mutual funds in this category are those classified as available-for-sale and which are intended to be held for an indefinite period of time and which may be sold in response to needs for liquidity or in response to changes in the market conditions.

After initial measurement, available-for-sale financial assets are subsequently measured at fair value, and the unrealized gains or losses are recognized as other comprehensive income in the accumulated other comprehensive income (loss) reserve until the investment is derecognized. Upon derecognition, the cumulative gain or loss is recognized as finance income or finance costs, or determined to be impaired, at which time the cumulative loss is reclassified to the statement of income under finance costs, as the case may be, and removed from the accumulated other comprehensive income (loss) reserve. Interest earned on investments in available-for-sale government securities is measured through the effective interest rate method and recognized as finance income in the statement of income.

The Group regularly evaluates its available-for-sale financial assets to determine whether the ability and positive intention to sell them in the near term is still appropriate. When the Group is unable to trade these financial assets due to inactive markets and its intention to sell them in the foreseeable future significantly changes, the Group may elect to reclassify these financial assets in rare circumstances. Reclassification to loans and receivables is permitted when the financial assets meet the conditions and definition of loans and receivables provided for by IAS 39 and the Group has the positive intent and ability to hold these assets for the foreseeable future or until maturity. Reclassification to the held-to-maturity category is permitted only when the Group has the ability and positive intention to hold the financial asset accordingly.

For a financial asset reclassified out of the available-for-sale category, the fair value carrying amount at the date of reclassification becomes its new amortized cost, and any previous gain or loss on that asset that has been recognized in equity is amortized to profit or loss over the remaining life of the investment using the EIR. Any difference between the new amortized cost and the expected cash flows is also amortized over the remaining life of the asset using the EIR. If the asset is subsequently determined to be impaired, then the amount recorded in equity is reclassified to the statement of income.

Derecognition of financial assets

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognized; that is to say, it is deleted from the statement of financial position, when:

– the contractual rights to receive cash flows from the asset have expired;

– the contractual rights to receive cash flows from the asset have been transferred or an obligation has been assumed to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) all the risks and rewards of the asset have been transferred substantially, or (b) all the risks and rewards of the asset have neither been transferred nor retained substantially, but control of the asset has been transferred.

When the contractual rights to receive cash flows from an asset have been transferred or a pass-through arrangement has been entered into, but all of the risks and rewards of the asset have neither transferred nor retained substantially and no control of it has been transferred, such asset shall continue to be recognized to the extent of the Group’s continuing involvement in it. In this case, the Group shall also recognize the associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained.

Impairment of financial assets

The Group assesses at the end of each reporting period whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred ‘loss event’) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include, among others, indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganization and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as adverse changes in arrears or economic conditions that correlate with defaults.

Charges arising from the impairment of financial assets, net of related recoveries, are booked in the statement of income under finance costs and other operating expenses, depending on the nature of the asset from which they arise.

Financial assets carried at amortized cost

For financial assets carried at amortized cost, the Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Group determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognized are not included in a collective assessment of impairment.

If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the assets’ carrying amount and the present value of estimated future cash flows (excluding future expected credit losses that have not yet been incurred). The present value of the estimated future cash flows is discounted at the financial asset’s original effective interest rate. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate.

The asset carrying value is reduced through an impairment allowance account and the loss is recognized in the statement of income under finance costs or other operating expenses, depending on the nature of the asset that gave rise to it. Interest income continues to be accrued on the reduced carrying amount and is accrued using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. Interest income is recorded as part of finance income or other operating income in the statement of income, depending on the nature of the asset that gave rise to it.

Assets and the related allowance for impairment are written off when there is no realistic prospect of future recovery and all collateral has been realized or has been transferred to the Group. If, in a subsequent period, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognized, the previously recognized impairment loss is increased or reduced by adjusting the impairment allowance account. If a future write-off is later recovered, the recovery is credited to finance costs or other operating expenses in the statement of income, based on the nature of the asset that gave rise to it.

Available-for-sale financial investments

For available-for-sale financial investments, the Group assesses at the end of each reporting period whether there is objective evidence that an investment or a group of investments is impaired.

Regarding equity investments classified as AFS, objective evidence would include a significant or prolonged decline in the fair value of the investment below its cost. The investment is deemed to be “significant” with respect to the original cost of the investment and “prolonged” with respect to the period during which the fair value was below its original cost. Whenever there is evidence that there has been impairment in value, accumulated losses, measured as the difference between the acquisition cost and the current fair value, less any impairment loss previously recognized in the statement of income, are removed from other comprehensive income and recognized in the statement of income as finance costs. Impairment losses related to equity investments classified as available-for-sale are not reversed through profit or loss. After impairment was recognized, fair value increases are directly recognized under comprehensive income.

In the case of debt instrument investments classified as available-for-sale, the impairment is assessed and recognized based on the same criteria as financial assets carried at amortized cost. The amount recorded for impairment is the cumulative loss measured as the difference between the amortized cost and the current fair value, less any impairment loss previously recognized in the statement of income.

Future interest income continues to be accrued based on the reduced carrying amount of the asset, using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. The interest income is recorded as part of operating income in the statement of income. If, in a subsequent year, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognized in the statement of income, the impairment loss is reversed through the statement of income as finance cost.

2.2.9.2. Financial liabilities

Initial recognition and subsequent measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, or as derivatives designated as hedging instruments in an effective hedge ratio, as appropriate.

All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings carried at amortized cost, directly attributable transaction costs.

The Group’s financial liabilities include trade and other payables, bank overdrafts, borrowings received from CAMMESA and interest-accruing payables and loans.

The subsequent measurement of financial liabilities depends on their classification, as described below:

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss includes financial liabilities held for trading and financial liabilities designated upon initial recognition at fair value through profit or loss.

Financial liabilities are classified as held for trading if they are acquired for the purpose of selling in the near term. This category includes derivative financial liabilities payable by the Group that are not designated as hedging instruments in hedge relationships as defined by IAS 39. Separate derivatives are also classified as held for trading, unless they are designated as effective hedging instruments.

Gains or losses on liabilities held for trading are recognized in the statement of income as finance income or costs, as the case may be.

Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such only if they meet the criteria in IAS 39.

The Group has not designated any financial liabilities upon initial recognition as at fair value through profit or loss.

Other debts and borrowings

After initial recognition, interest bearing loans and borrowings are subsequently measured at amortized cost using the effective interest rate method. Gains and losses are recognized as finance costs in the statement of income when the liabilities are derecognized, as well as through the effective interest rate method (EIR) amortization process.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance costs in the statement of income.

Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognized as finance income or costs in the statement of income, as the case may be.

2.2.9.3. Offsetting financial assets and financial liabilities

Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position if, and only if, there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.

2.2.9.4. Financial assets and liabilities with related parties

Assets and liabilities with related parties are recognized initially at fair value plus directly attributable transaction costs. As long as credits and debts with related parties do not derive from arms-length transactions, any difference arising at the initial recognition between such fair value and the consideration given or received in return shall be considered as an equity transaction (capital contribution or payment of dividends, which will depend on whether it is positive or negative).

Following initial recognition, these receivables and payables are measured at their amortized cost through the EIR method. The EIR amortization is included in finance income or costs or other operating income or expenses in the statement of income, depending on the nature of the liability giving rise to it.

2.2.9.5. Derivative financial instruments and hedge accounting - Initial recognition and subsequent measurement

The derivative financial instruments used by the Group are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.

Any gains or losses arising from changes in the fair value of derivatives are taken directly to income or loss, except for the portion that meets requirements to be considered effective hedges, if applicable, which is recognized in other comprehensive income and later reclassified to income or loss when the hedge item affects income or loss.

The portion of the gain or loss on the hedging instrument that meets the requirements to be considered effective hedge is recognized in other comprehensive income, while any portion that does not meet the requirements to be considered effective hedge is recognized immediately in the statement of income as other financial income / expenses.

If the hedging instrument expires or is sold, terminated or exercised without replacement or rollover (as part of the hedging strategy), or if its designation as a hedge is revoked, or when the hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss previously recognized in other comprehensive income remains separately in equity until the expected transaction occurs or the foreign currency firm commitment is met.

As of December 31, 2015, the Group held derivative financial instruments mentioned in note 12.6 to these consolidated financial statements, which do not meet the requirements to be considered hedging instruments.

2.2.10. Inventories

Inventories are valued at the lower of acquisition cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale. Inventories balance is not higher than its net realizable value at the corresponding dates.

2.2.11. Cash and cash equivalents

Cash is deemed to include both cash fund and freely-available bank deposits on demand. Short-term deposits are deemed to include short-term investments with significant liquidity and free availability that, subject to no previous notice or material cost, may be easily converted into a specific cash amount that is known with a high degree of certainty upon the acquisition, are subject to an insignificant risk of changes in value, maturing up to three months after the date of the related acquisitions, and whose main purpose is not investment or any other similar purpose, but settling short-term commitments.

For the purpose of the consolidated statement of financial position and the consolidated statement of cash flows, cash and cash equivalents comprise cash at banks and on hand and short-term investments meeting the abovementioned conditions.

Interest paid is shown as financing activities and interest received from customers is shown as operating activities.

2.2.12. Provisions

Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of income under the item that better reflects the nature of the provision net of any reimbursement to the extent that the latter is virtually certain.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax market rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost in the statement of income.

– Provision for lawsuits and claims

In the ordinary course of business, the Group is exposed to claims of different natures (e.g., commercial, labor, tax, social security, foreign exchange or customs claims) and other contingent situations derived from the interpretation of current legislation, which result in a loss, the materialization of which depends on whether one more events occur or not. In assessing these situations, Management uses its own judgment and advice of its legal counsel, both internal and external, as well as the evidence available as of the related dates. If the assessment of the contingency reveals the likelihood of the materialization of a loss and the amount can be reliably estimated, a provision for lawsuits and claims is recorded as of the end of the reporting period.

2.2.13. Contingent liabilities

A contingent liability is: (i) a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within
the control of the entity; or (ii) a present obligation that arises from past events but is not recognized because: (a) it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or (2) the amount of the obligation cannot be measured with sufficient reliability.

A contingent liability is not recognized in financial statements; it is reported in notes, unless the possibility of an outflow of resources to settle such liability is remote. For each type of contingent liability as of the relevant reporting period-end dates, the Group shall disclose (i) a brief description of the nature of the obligation and, if possible, (ii) an estimate of its financial impact; (iii) an indication of the uncertainties about the amount or timing of those outflows; and (iv) the possibility of obtaining potential reimbursements.

2.2.14. Contingent assets

A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity.

A contingent asset is not recognized in financial statements; it is reported in notes only where an inflow of economic benefits is probable. For each type of contingent asset as of the relevant reporting period-end dates, the Group shall disclose (i) a brief description of the nature thereof and, if possible, (ii) an estimate of its financial impact.

2.2.15. Employee benefits

Employee short-term benefits:

The Group recognizes short-term benefits to employees, such as salary, vacation pay, bonuses, among others, on an accrued basis and includes the benefits arising from collective bargaining agreements.

Post-employment employee long-term benefits:

The Group grants benefits to all trade-union employees when obtaining the ordinary retirement benefit under the Argentine Integrated Pension Fund System, based on multiples of the relevant employees’ salaries.

The amount recognized as a liability for such benefits includes the present value of the liability at the end of the reporting period, and it is determined through actuarial valuations using the projected unit credit method.

Actuarial gains and losses are fully recognized in other comprehensive income in the period when they occur and immediately allocated to unappropriated retained earnings (accumulated losses), and not reclassified to income in subsequent periods.

The Group recognizes the net amount of the following amounts as expense or income in the statement of income for the reporting year: (a) the cost of service for the current period; (b) the cost of interest; (c) the past service cost, and (d) the effect of any curtailment or settlement.

Other long-term employee benefits:

The Group grants seniority-based benefits to all trade-union employees when reaching a specific seniority, based on their normal salaries.

The amount recognized as liabilities for other long-term benefits to employees is the present value of the liability at the end of the reporting period. The Group recognizes the net amount of the following amounts as expense or income: (a) the cost of service for the current period; (b) the cost of interest; (c) actuarial income and loss, which shall be recognized immediately and in full; (d) the past service cost, which shall be recognized immediately and in full; and (e) the effect of any curtailment or settlement.

2.2.16. Share-based payments

The cost of share-based payments transactions that are settled with equity instruments of one of our subsidiaries is determined by the fair value at the date when the grant is made using an appropriate valuation model.

This cost is recognized in the consolidated financial statements under employee benefits expense, together with a corresponding total increase in non-controlling interest.

During the year ended December 31, 2017 the expense booked in the consolidated financial statements under employee benefits expense amounts to 2,942.

2.2.17. Investment in associates

The Group’s investments in associates are accounted for using the equity method. An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee, but is neither control nor joint control.

According to the equity method, investments in associates are originally booked in the statement of financial position at cost, plus (less) the changes in the Group’s ownership interests in the associates’ net assets subsequent to the acquisition date. If any, goodwill relating to the associate is included in the carrying amount of the investment and is neither amortized nor individually tested for impairment. If the cost of the investments is lower than the proportional share as of the date of acquisition on the fair value of the associate’s assets and liabilities, a gain is recognized in the period in which the investment was acquired.

The statement of income reflects the share of the results of operations of the associates adjusted on the basis of the fair values estimated as of the date on which the investment was incorporated. When there has been a change recognized directly in the equity of the associates, the Group recognizes its share of any changes and includes them, when applicable, in the statement of changes in equity.

The Group’s share of profit of an associate is shown in a single line on the main body of the consolidated statement of income. This share of profit includes income or loss after taxes of the associates.

The financial information of the associates is prepared for the same reporting period as the Group. When necessary, adjustments are made to bring the accounting policies of the associates in line with those of the Group.

After application of the equity method, the Group determines whether it is necessary to recognize impairment losses on its investment in its associates. At each reporting date, the Group determines whether there is objective evidence that the value of investment in the associates has been impaired. If such was the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the investment in the associates and its carrying value, and recognizes the loss as “Share of losses of an associate” in the statement of income.

Upon loss of significant influence over the associate, the Group measures and recognizes any retained investment at its fair value. If such was the case, any difference between the carrying amounts of the investment in the associate and the fair value on any retained investment, as well as the disposal proceeds, are recognized in the statement of income.

The information related to associates is included in note 3.

2.2.18. Information on operating segments

For management purposes, the Group is organized in three different business units to carry out its activities, as follows:

Electric power generation: through its own assets the Group is engaged in the production of electric power and its sale. This business unit does not include La Plata plant operations due to the sale of such facility (See note 22.8).

Natural gas transport and distribution: through its equity investees companies Distribuidora de Gas del Centro S.A. and Distribuidora de Gas Cuyana S.A. the Group is engaged in the natural gas distribution public sector service in the Cuyo and Centro regions of Argentina and it is also engaged in the natural gas transport sector service through its equity investee Company Transportadora de Gas del Mecrosur S.A.

Management and operations: through its equity investees Termoeléctrica José de San Martín S.A. and Termoeléctrica Manuel Belgrano S.A. and its subsidiary Central Vuelta de Obligado S.A. the Group is engaged in the management and operations of these thermal plants.

The Group has two reporting segments: production of electric power and natural gas transport and distribution. Management and operations activities are included in others, because the information is not material.

The financial performance of segments is evaluated based on net income and measured consistently with the net income disclosed in the financial statements (note 4).

2.2.19. Non-current assets held for sale and discontinued operations

The Group classifies non-current assets and disposal groups as held for sale if their carrying amounts will be recovered principally through a sale transaction or its distribution to the shareholders rather than through continuing use. Such assets are measured at the lower of their carrying amount and fair value less costs to sell. Costs to sell are the incremental costs directly attributable to the disposal of an asset (disposal group), excluding finance costs and income tax expense.

The criteria for held for sale classification is regarded as met only when the sale is highly probable and the asset or disposal group is available for immediate sale in its present condition. Actions required to complete the sale should indicate that it is unlikely that significant changes to the sale will be made or that the decision to sale will be withdrawn. Management must be committed to the plan to sell the asset and the sale expected to be completed within one year from the date of the classification.

Property, plant and equipment and intangible assets are not depreciated or amortized once classified as held for sale.

Assets and liabilities classified as held for sale are presented separately as current items in the consolidated statement of financial position.

A disposal group qualifies as discontinued operation if:

– It is a component of the Group that represents a cash generating unit or a group of cash generating units,

– it is classified as held for sale or as for distribution to equity holders, or it has already been disposed for distribution to the shareholders, and;

– it represents a separate major line of business or geographical area of operations or it is a subsidiary acquired exclusively with a view to resale.

Discontinued operations are excluded from the results of continuing operations and are presented as a single amount as income or loss after tax from discontinued operations in the consolidated statement of income.

Additional disclosures are provided in note 21. All other notes to the consolidated financial statements include amounts for continuing operations, unless indicated otherwise.

2.3. Significant accounting estimates and assumptions

The preparation of the Group’s financial statements requires management to make significant estimates and assumptions that affect the recorded amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the end of the reporting period. In this sense, the uncertainties related to the estimates and assumptions adopted could give rise in the future to final results that could differ from those estimates and require significant adjustments to the amounts of the assets and liabilities affected.

The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Group based its accounting assumptions and significant estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising beyond the control of the Group. Such changes are reflected in the assumptions when they occur.

The significant estimates used by management are mentioned below:

The terms for collection and the valuation of accumulated amounts related to receivables under Resolution 95 and receivables under Resolution 406 (from 2008 and thereafter).

Collection of the principal and interest on these receivables is subject to various business risks and uncertainties including, but not limited to, the completion and operation of power plants which are expected to generate cash for payments of these receivables, regulatory changes that could impact the timing and amount of collections, and economic conditions in Argentina. The Group accrues interest on these receivables once the recognition criteria have been met. The Group’s collection estimates are based on assumptions that it believes to be reasonable, but are inherently uncertain. These assumptions are reviewed at the end of each reporting period. Actual future cash flows could differ from these estimates.

Recoverability of property, plant and equipment and intangible assets:

Impairment exists when the carrying value of an asset or CGU exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The value in use calculation is based on a Discounted Cash Flow (DCF) method. The cash flows are derived from the budget for the next five years. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used. A key assumption used to determine the recoverable amount for the different CGUs is the compensation that the Group obtained for the regulation enacted.

The probability of occurrence and the amount of liabilities related to lawsuits and claims:

The Group based its estimates on the opinions of its legal counsel available when the consolidated financial statements were prepared. Existing circumstances and assumptions, however, may change due to changes in circumstances arising beyond the control of the Group.

Long-term employee benefit plan

The plan costs are determined by actuarial valuations. Actuarial valuations involve several assumptions that might differ from the results that will actually occur in the future.

These assumptions include the assessment of the discount rate, future salary increases and mortality rates. Due to the complexity of the valuation, the underlying assumptions and its long-term nature, the benefit obligations are sensitive to changes in these assumptions. These assumptions are reviewed at the end of each reporting period.

2.4. New standards and interpretations adopted

As from the fiscal year beginning January 1, 2017, the Group has applied for the first time certain new and/or amended standards and interpretations as issued by the IASB. In general, these standards and interpretations require that the information in the consolidated financial statements be modified retrospectively.

A brief description of the new and/or amended standards and interpretations adopted by the Group and their impact on these consolidated financial statements, are presented below.

Amendments to IAS 7 statement of cash flow: Disclosure initiative

The amendments require entities to provide disclosure of changes in their liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes (such as foreign exchange gains or losses). The Group has provided the information in note 14.5.

The Group has elected not to disclose this information on comparative basis.

Amendments to IAS 12 - Income tax: Recognition of Deferred Income Tax Assets for Unrealized Losses

The amendments clarify that an entity needs to consider whether tax law restricts the sources of taxable profits against which it may make deductions on the reversal of that deductible temporary difference related to unrealized losses from a debt instrument measured at fair value or other assets. Furthermore, the amendments provide guidance on how an entity should determine future taxable profits and explain the circumstances in which taxable profit may include the recovery of some assets for more than their carrying amount.

Entities are required to apply the amendments retrospectively. These amendments are effective for annual periods beginning on or after January 1, 2017.

As of December 31, 2017, these amendments had not impact on the Group’s consolidated financial statements.

Annual Improvements Cycle - 2014-2016 - Amendments to IFRS 12 Disclosure of Interests in Other Entities: Clarification of the scope of disclosure requirements in IFRS 12

The amendments clarify that the disclosure requirements in IFRS 12, other than those in paragraphs B10-B16, apply to an entity’s interest in a subsidiary, a joint venture or an associate (or a portion of its interest in a joint venture or an associate) that is classified as held for sale. During 2017 and 2016 the Group did not hold investments in subsidiaries, joint ventures or associates classified as held for sale, therefore these amendments did not affect the Group’s financial statements.

2.5. IFRS issued but not yet effective

The following new and/or amended standards and interpretations have been issued but were not effective as of the date of issuance of these consolidated financial statements of the Group. In this sense, only the new and/or amended standards and interpretations that the Group expects to be applicable in the future are indicated. In general, the Group intends to adopt these standards, as applicable, when they become effective.

IFRS 15 - Revenue from contracts with customers

In May 2014, IASB issued IFRS 15 “Revenue from contracts with customers”, which establishes the new model for recognizing revenue from contracts with customers. Such standard revokes the current guidelines for revenue recognition included in IAS 18 “Revenue”, IAS 11 “Construction Contracts” and related interpretations when this standard becomes effective.

The fundamental principle of the model is to satisfy performance obligations. IFRS 15 structures this principle through the following five steps:

Step 1: Identify the contract with a customer.

Step 2: Identify the performance obligations in the contract.

Step 3: Determine the transaction price.

Step 4: Allocate the transaction price to each performance obligation.

Step 5: Recognize revenue when (or while) a performance obligation is satisfied.

The new revenue model applies to all contracts with customers, except those under the scope of other IFRSs, such as lease, insurance and financial instruments contracts. Interest recognition and dividend income are not covered by this standard.

Pursuant to IFRS 15, a system on the allocation of the transaction price to each performance obligation is established. According to such standard, the Group shall recognize revenue when a performance obligation is satisfied, i.e. every time “control” over those goods and services is transferred to the customer.

Note 5 includes the main sources of income from ordinary activities of the Group.

After carrying out their analysis, the management of the Group concluded that the current revenue recognition practices, which are governed by the current IFRS, are consistent with the requirements of IFRS 15.

In turn, the Group will apply IFRS 15 to all periods beginning on January 1, 2018. For such purpose, it will apply the modified retrospective approach. Therefore, should there be necessary, the accumulated effect of the initial application of this standard will be retrospectively recognized as an adjustment to the initial balance of accumulated retained income as at January 1, 2018 and the comparative information will not be adjusted.

It is important to highlight the fact that such standard requires greater estimates and professional judgments than the applied in the current accounting standards. Additionally, IFRS 15 requires greater disclosures in the financial statements.

Accordingly, IFRS 15 requires a separate presentation of assets and liabilities of contracts and trade receivables in the consolidated statement of financial position.

IFRS 9 Financial instruments

In July 2014, the IASB issued the final version of IFRS 9 Financial Instruments, which establishes new requirements for classification and measurement of financial instruments, impairment and hedge accounting. This version adds a new impairment model based on expected losses and some minor modifications to the classification and measurement of financial assets.

The new standard replaces previous versions and is effective for periods beginning on January 1, 2018.

The Group has analyzed financial assets and liabilities as of December 31, 2017 so as to determine the impact of the classification and measurement on their consolidated financial position and its results. Finally, management has assessed that the adoption of IFRS 9 will not have a material impact on the Group.

IFRS 16 Leases

In January 2016, the IASB issued the final version of IFRS 16 and it replaces IAS 17 Leases, IFRIC 4 Determining whether an arrangement contains a lease, SIC-15 Operating leases-incentives and SIC-27 Evaluating the substance of transactions involving the legal form of a lease. IFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar to the accounting for finance leases under IAS 17. The standard includes two recognition exemptions leases of “low-value” assets (e.g., personal computers) and short-term leases (i.e., leases with a lease term of 12 months or less). At the commencement date of a lease, a lessee will recognize a liability to make lease payments (i.e., the lease liability) and an asset representing the right to use the underlying asset during the lease term (i.e., the right to-use asset). Lessees will be required to separately recognize the interest expense on the lease liability and the depreciation expense on the right-of-use asset.

Lessor accounting under IFRS 16 is substantially unchanged from today’s accounting under IAS 17. Lessors will continue to classify all leases using the same classification principle as in IAS 17 and distinguish between two types of leases: operating and finance leases. IFRS 16 also requires lessees and lessors to make more extensive disclosures than under IAS 17. IFRS 16 is effective for annual periods beginning on or after January 1, 2019. Early adoption is permitted, but not before the entity applies IFRS 15. A lessee can choose to apply the standard using either a full retrospective or modifies retrospective approach.

The Group has not yet determined what impact, if any, the adoption of the new standard will have on its consolidated financial statements.

IFRIC 22 - Foreign Currency Transactions and Advance Consideration

This interpretation clarifies the “transaction date” for the purpose of determining the exchange rate to use on initial recognition of a related asset, expense or income, when an entity has received or paid in advance in foreign currency. It applies to transactions in foreign currency when an entity recognizes a non-monetary assets or liability derived from the reception or payment in advance before initial recognition of a related asset, expense or income.

So as to determine the exchange rate to use on initial recognition of an asset, expense or income, the transaction date is the date on which a non-monetary asset or liability derived from reception or payment in advance is recognized.

It is effective for periods beginning on January 1, 2018. Application may be retroactive or prospective since i) the beginning of the application period or ii) the beginning of a previous comparative period.

As of the date of issuance of these consolidated financial statements the Group estimates that the adoption of this standard will not have an impact on its consolidated financial position or in its results.

IFRIC Interpretation 23 - Uncertainty over Income Tax Treatments

In June 2017, the IASB issued IFRIC Interpretation 23 - Uncertainty over Income Tax Treatments. The Interpretation clarifies application of recognition and measurement requirements in IAS 12 Income Taxes when there is uncertainty over income tax treatments. The Interpretation specifically addresses the following: (a) whether an entity considers uncertain tax treatments separately, (b) the assumptions an entity makes about the examination of tax treatments by taxation authorities, (c) how an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates and (d) how an entity considers changes in facts and circumstances. IFRIC 23 is effective for annual periods beginning on or after January 1, 2019. Early adoption is permitted.

The Group has not yet determined what impact, if any, the adoption of the new interpretation will have on its consolidated financial statements.

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3. Investment in associates

12 Months Ended

Dec. 31, 2017

Investment In Associates

Investment in associates

	12-31-2017	12-31-2016
	ARS 000	ARS 000
Termoeléctrica José de San Martin S.A.	25,671	19,576
Termoeléctrica Manuel Belgrano S.A.	28,744	25,236
Inversora de Gas Cuyana S.A.	217,380	82,183
Inversora de Gas Centro S.A.	254,813	101,740
Distribuidora de Gas del Centro S.A.	204,382	70,130
Transportadora de Gas del Mercosur S.A.	254,551	6,884
Others	105	1,263
	985,646	307,012

	2017	2016	2015
	ARS 000	ARS 000	ARS 000
Termoeléctrica José de San Martin S.A.	22,218	15,897	11,958
Termoeléctrica Manuel Belgrano S.A.	23,557	20,953	14,494
Inversora de Gas Cuyana S.A.	135,197	33,868	8,083
Inversora de Gas Centro S.A.	153,073	40,726	10,539
Distribuidora de Gas del Centro S.A.	134,252	28,582	5,444
Transportadora de Gas del Mercosur S.A.	247,667	-	-
Others	(963)	7,487	(7,128)
	715,001	147,513	43,390

3.1. TJSM and TMB

As of December 31, 2017 and 2016, the Group has a 30.8752% interest in TJSM and 30.9464% interest in TMB, which are engaged in managing the purchase of equipment, and building, operating and maintaining the power plants.

TJSM and TMB are private, unlisted companies.

During the years ended December 31, 2017, 2016 and 2015, the Company received cash dividends from TMB and TJSM for 36,176, 25,798 and 19,358, respectively.

The following table show summarized financial information of the Group’s investment in such companies:

Termoeléctrica José de San Martín SA

	12-31-2017	12-31-2016
	ARS 000	ARS 000
Current assets	140,389	118,198
Non-current assets	7,679	8,282
Current liabilities	(58,631)	(58,467)
Non-current liabilities	(6,291)	(4,609)
Net assets	83,146	63,404
Carrying amount of the investment	25,671	19,576

	2017	2016	2015
	ARS 000	ARS 000	ARS 000
Associate’s revenues and income
Revenues	244,628	182,796	140,019
Net income for the year	71,961	51,488	39,239
Share in the net income of associate	22,218	15,897	11,958

Termoeléctrica Manuel Belgrano SA

	12-31-2017	12-31-2016
	ARS 000	ARS 000
Current assets	142,969	128,127
Non-current assets	3,644	2,398
Current liabilities	(49,005)	(45,791)
Non-current liabilities	(4,725)	(3,186)
Net assets	92,883	81,548
Carrying amount of the investment	28,744	25,236

	2017	2016	2015
	ARS 000	ARS 000	ARS 000
Associate’s revenues and income
Revenues	257,407	205,218	148,945
Net income for the year	76,122	67,707	47,561
Share in the net income of associate	23,557	20,953	14,494

3.2. Investments in gas distribution

The Group holds ownership interests of 44.10% (49% in 2015) in Inversora de Gas Cuyana S.A. (“IGCU”, the controlling company of Distribuidora de Gas Cuyana S.A. “DGCU”), of 44.10% (49% in 2015) in Inversora de Gas del Centro S.A. (“IGCE”, the controlling company of Distribuidora de Gas del Centro S.A. “DGCE”) and 17.20% (19.11% in 2015) in DGCE. Consequently, the Group holds, both directly and indirectly, a 22.49% interest (24.99% in 2015) in DGCU and 39.69% (44.10% in 2015) of the capital stock of DGCE, which are engaged in the distribution of natural gas. The Group does not control such companies.

Subsequent event

On February 23, 2018, our Board of Directors approved the sale process of up to 27,597,032 DGCE shares, which represent all of our directly stake in this company and 17.20% of the capotal stock of DGCE, through a potential initial public offering of DGCE. On March 14, 2018, the Company authorized the offer of up to 10,075,952 (6.28% of its capital stock) shares of DGCE, subject to market conditions. As of the date of these consolidated financial statements, the Company, and certain potential selling shareholders, continue to evaluate this strategy.

3.2.1.1. Inversora de Gas del Centro SA

IGCE is a private, unlisted company. Its only significant asset is a 51% equity interest in DGCE, a company engaged in the distribution of natural gas in the provinces of Cordoba, La Rioja and Catamarca, Argentine.

During the year ended December 31, 2015, the Group received dividends of 17,003 and 15,288, respectively, from IGCE and DGCE.

The following table shows summarized financial information of the Group’s investment in IGCE with its subsidiary DGCE.

	12-31-2017	12-31-2016
	ARS 000	ARS 000
Current assets	2,113,190	1,450,839
Non-current assets	911,271	1,300,375
Current liabilities	(1,692,212)	(2,151,646)
Non-current liabilities	(131,662)	(168,178)
Net assets	1,200,587	431,390
Less: non-controlling interests	(622,780)	(200,686)
	577,807	230,704
Carrying amount of the investment	254,813	101,740

	2017	2016	2015
	ARS 000	ARS 000	ARS 000
Associate’s income	332,931	70,744	9,388
Net income for the year	347,104	92,349	21,508
Share in net income of associate	153,073	40,726	10,539

3.2.1.2. Distribuidora de Gas del Centro SA

The following table shows summarized financial information of the Group’s investment in DGCE.

	12-31-2017	12-31-2016
	ARS 000	ARS 000
Current assets	1,632,747	1,375,072
Non-current assets	873,411	1,256,813
Current liabilities	(1,193,139)	(2,096,622)
Non-current liabilities	(124,752)	(127,530)
Net assets	1,188,267	407,733
Carrying amount of the investment	204,382	70,130

	2017	2016	2015
	ARS 000	ARS 000	ARS 000
Associate’s revenues and income
Revenues	3,656,921	2,239,906	770,342
Net income for the year	780,535	166,174	28,487
Share in net income of associate	134,252	28,582	5,444

Subsequent event

On March 2, 2018 and on February 23, 2018 the Group received dividends of 143,122 (equivalent to USD 7,099,316) and 129,256 (equivalent to USD 6,482,009), respectively, from IGCE and DGCE.

3.2.2.Inversora  de Gas Cuyana SA

IGCU is a private unlisted company. Its only significant asset is a 51% equity interest in DGCU, a company engaged in the distribution of natural gas in the provinces of Mendoza, San Juan and San Luis.

During the year ended December 31, 2015, the Group received dividends of 8,967 from IGCU.

The following table shows summarized financial information of the Group’s investment in IGCU with its subsidiary DGCU.

	12-31-2017	12-31-2016
	ARS 000	ARS 000
Current assets	1,297,922	1,094,417
Non-current assets	719,515	995,997
Current liabilities	(884,304)	(1,533,812)
Non-current liabilities	(35,643)	(44,982)
Net assets	1,097,490	511,620
Less: non-controlling interests	(604,564)	(325,265)
	492,926	186,355
Carrying amount of the investment	217,380	82,183

	2017	2016	2015
	ARS 000	ARS 000	ARS 000
Associate’s revenues and income
Revenues	2,813,506	1,612,252	569,294
Net income for the year	306,569	76,798	6,349
Share in net income of associate	135,197	33,868	8,083

Subsequent event

On March 28, 2018, a preliminary merger agreement of IGCE, IGCU and the companies Magna Inversiones S.A. (“Magna”) and RPBC Gas S.A. (“RPBC”) was approved. IGCE will act as the acquiring company and IGCU, RPBC and Magna will act as absorbed companies. The merger is subject to authorization by the national gas regulatory entity (“ENARGAS”) and it is subject to the approval of the general meeting of shareholders of the companies participating in the merger, which will be held on May 28, 2018.

On April 16, 2018 the Group received dividends of 121,809 (equivalent to USD 6,042,152) from IGCU.

3.3. Transportadora de Gas del Mercosur S.A.

The Group has a 20% interest in Transportadora de Gas del Mercosur S.A. (“TGM”). TGM is a private unlisted company. This Company has a gas pipeline that covers the area from Aldea Brasilera (in the Province of Entre Ríos) to Paso de los Libres (in the Province of Corrientes). In 2009, TGM terminated its contract with YPF, which was its only client to date, on the grounds of consecutive non-compliances. On December 22, 2017, YPF agreed to pay TGM USD 114,000,000 as full and final settlement to cover all the complaints TGM claims against YPF.

The following table shows summarized financial information for TGM:

	2017
	ARS 000
Current assets	2,014,585
Non-current assets	150,681
Current liabilities	(892,510)
Net assets	1,272,756
Carrying amount of the investment	254,551
Associate´s revenues and income
Revenues	683
Net income for the year	1,238,335
Share in net income of the associate	247,667

Subsequent event

On April 16, 2018 the Group received dividends of 230,640 (equivalent to USD 11,406,528) from TGM.

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4. Operating segments

12 Months Ended

Dec. 31, 2017

Operating Segments

Operating segments

The following provides summarized information of the operating segments for the years ended December 31, 2017, 2016 and 2015:

		Equity investees
2017	Electric Power Generation	Natural Gas Transport and Distribution	Others	Adjustments and Eliminations	Total
	ARS 000	ARS 000	ARS 000	ARS 000	ARS 000
Revenues	5,956,596	6,621,959	502,035	(7,123,994)	5,956,596
Cost of sales	(2,742,147)	(4,366,884)	(322,057)	4,688,941	(2,742,147)
Administrative and selling expenses	(651,168)	(1,188,068)	-	1,188,068	(651,168)
Other operating income	640,480	2,232,236	-	(2,232,236)	640,480
Other operating expenses	(92,497)	-	-	-	(92,497)
Operating income	3,111,264	3,299,243	179,978	(3,479,221)	3,111,264
Other (expenses) income	(817,307)	(708,732)	(35,162)	1,458,895	(102,306)
Net income for the segment	2,293,957	2,590,511	144,816	(2,020,326)	3,008,958
Share in the net income for the segment	2,293,957	670,189	44,812	-	3,008,958

		Equity investees
2016	Electric Power Generation	Natural Gas Transport and Distribution	Others	Adjustments and Eliminations	Total
	ARS 000	ARS 000	ARS 000	ARS 000	ARS 000
Revenues	3,562,721	3,852,158	388,014	(4,240,172)	3,562,721
Cost of sales	(2,069,752)	(3,166,223)	(243,796)	3,410,019	(2,069,752)
Administrative and selling expenses	(445,412)	(603,502)	-	603,502	(445,412)
Other operating income	1,137,736	-	-	-	1,137,736
Other operating expenses	(84,845)	125,878	-	(125,878)	(84,845)
Operating income	2,100,448	208,311	144,218	(352,529)	2,100,448
Other (expenses) income	(917,099)	(69,174)	(24,249)	240,936	(769,586)
Net income for the segment	1,183,349	139,137	119,969	(111,593)	1,330,862
Share in the net income for the segment	1,183,349	103,176	44,337	-	1,330,862

		Equity investees
2015	Electric Power Generation	Natural Gas Transport and Distribution	Others	Adjustments and Eliminations	Total
	ARS 000	ARS 000	ARS 000	ARS 000	ARS 000
Revenues	2,654,180	1,339,636	338,303	(1,677,939)	2,654,180
Cost of sales	(1,397,365)	(1,064,934)	(208,935)	1,273,869	(1,397,365)
Administrative and selling expenses	(371,485)	(421,764)	(5,852)	427,616	(371,485)
Other operating income	735,517	17,510	-	(17,510)	735,517
Other operating expenses	(52,702)	-	-	-	(52,702)
Operating income	1,568,145	(129,552)	123,516	6,036	1,568,145
Other (expenses) income	(401,396)	148,659	587	(105,856)	(358,006)
Net income for the segment	1,166,749	19,107	124,103	(99,820)	1,210,139
Share in the net income for the segment	1,166,749	24,066	19,324	-	1,210,139

Major customers

During the years ended December 31, 2017, 2016 and 2015 revenues from CAMMESA amounted to 5,648,272, 3,345,744 and 2,506,529 or 95%, 94% and 94%, respectively, arising from sales in the electric power generation segment.

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5. Revenues

12 Months Ended

Dec. 31, 2017

Revenues Abstract

Revenues

	2017	2016	2015
	ARS 000	ARS 000	ARS 000
Electric power sold on the Spot market (Resolution 19 and 95/2013, as amended)	5,175,825	3,114,552	2,317,042
Electric power sold on the Spot market (prior to Resolution 95/2013)	472,447	231,192	189,487
Sales under contracts	167,124	107,873	96,082
Steam sales	141,200	108,308	43,331
Rendering of services	-	796	8,238
	5,956,596	3,562,721	2,654,180

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6. Operating expenses

12 Months Ended

Dec. 31, 2017

Operating Expenses

Operating expenses

6.1. Cost of sales

	2017	2016	2015
	ARS 000	ARS 000	ARS 000
Inventories at beginning of each year	147,670 (1)	94,179 (1)	78,173
Purchases and operating expenses for each year:
Purchases	512,570	336,190	152,883
Operating expenses (note 6.2)	2,240,400	1,787,053	1,260,488
	2,752,970	2,123,243	1,413,371
Inventories at the end of each year	(158,493)	(147,670) (1)	(94,179) (1)
	2,742,147	2,069,752	1,397,365

(1) Inventories as of December 31, 2016 and 2015 do not include inventories stock from discontinued operations.

6.2. Operating, administrative and selling expenses

	2017		2016		2015
Accounts	Operating expenses	Administrative and selling expenses	Operating expenses	Administrative and selling expenses	Operating expenses	Administrative and selling expenses
	ARS 000	ARS 000	ARS 000	ARS 000	ARS 000	ARS 000
Compensation to employees	878,089	327,983	688,891	219,629	496,273	191,172
Other long-term employee benefits	26,270	4,211	22,859	4,039	20,828	3,680
Depreciation of property, plant and equipment	277,445	111	200,703	-	156,559	-
Amortization of intangible assets	31,114	-	31,134	-	26,816	-
Purchase of energy and power	78,781	-	22,797	-	36,124	-
Fees and compensation for services	194,120	168,624	147,529	66,014	89,578	45,629
Maintenance expenses	363,199	25,178	352,914	41,547	197,581	38,883
Consumption of materials and spare parts	112,956	-	140,329	-	78,725	-
Insurance	139,473	1,794	124,956	550	67,009	256
Levies and royalties	133,212	-	50,759	-	89,151	-
Taxes and assessments	3,664	29,399	2,755	24,270	464	29,529
Tax on bank account transactions	-	84,232	-	77,954	-	55,084
Corporate expenses	-	-	-	4,685	-	-
Others	2,077	9,636	1,427	6,724	1,380	7,252
Total	2,240,400	651,168	1,787,053	445,412	1,260,488	371,485

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7. Other income and expenses

12 Months Ended

Dec. 31, 2017

Other Income And Expenses

Other income and expenses

7.1. Other operating income

	2017	2016	2015
	ARS 000	ARS 000	ARS 000
Interest earned from customers	270,715	108,423	41,607
Receivables and payables foreign exchange difference	76,475	137,359	336,641
Discount of trade and other receivables and payables, net (1)	51,838	718,114	118,560
Recovery of insurance	237,577	155,013	145,569
Recovery of turnover tax	-	-	77,833
Others	3,875	18,827	15,307
	640,480	1,137,736	735,517

(1) In December 2015, Decree No. 134/2015 was enacted declaring the state of emergency of the Argentine electricity sector until December 31, 2017. Pursuant to such decree, the Ministry of Energy was entrusted with the duties of developing and putting in place an action plan in connection with the electricity generation, transportation and distribution segments in order to improve the quality and security of electricity supply and guarantee the provision of this public service under suitable technical and economic conditions.

In this context, the Group revised its estimate of the amounts recognized on December 31, 2015 in connection with some receivables from CAMMESA related to LVFVD of the additional remuneration set in Resolution 95. Consequently, during the year ended December 31, 2016 the Company recognized these receivables at their face values with a corresponding one-time gain of 520,362 in the consolidated statement of income.

7.2. Other operating expenses

	2017	2016	2015
	ARS 000	ARS 000	ARS 000
Charge related to the provision for lawsuits and claims	(69,197)	(86,644)	(52,702)
Impairment of material and spare parts	(23,300)	-	-
Others	-	1,799	-
	(92,497)	(84,845)	(52,702)

7.3. Finance income

	2017	2016	2015
	ARS 000	ARS 000	ARS 000
Interest earned	148,485	51,774	31,871
Net income on financial assets at fair value through profit or loss	75,525	46,827	30,091
Foreign exchange differences	45,531	94,920	233,301
Net income on disposal of available-for-sale financial assets (1)	662,686	227,467	67,100
	932,227	420,988	362,363

(1) Net of 52,417 corresponding to turnover tax for the year ended December 31, 2017.

7.4. Finance expenses

	2017	2016	2015
	ARS 000	ARS 000	ARS 000
Interest on loans and borrowings	(626,981)	(529,999)	(253,316)
Net foreign exchange differences	(64,983)	(75,471)	124,577
Others	(5,674)	(14,978)	(9,569)
	(697,638)	(620,448)	(138,308)

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8. Movements in other comprehensive income from available-for-sale financial assets

12 Months Ended

Dec. 31, 2017

Movements In Other Comprehensive Income From Available-for-sale Financial Assets

Movements in other comprehensive income from available-for-sale financial assets

	2017	2016	2015
	ARS 000	ARS 000	ARS 000
Available-for-sale financial assets
Gains for the year	272,239	554,330	274,165
Reclassification adjustments to income	(715,103)	(227,467)	(67,100)
	(442,864)	326,863	207,065

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9. Income tax

12 Months Ended

Dec. 31, 2017

Income Tax

Income tax

The major components of income tax during the years ended December 31, 2017, 2016 and 2015, are the following:

Consolidated statements of income and comprehensive income

Consolidated statement of income

	2017	2016	2015
	ARS 000	ARS 000	ARS 000
Current income tax
Income tax charge for the year	(1,350,540)	(485,279)	(462,872)
Adjustment related to current income tax for the prior year	32,561	938	2,845
Deferred income tax
Related to the net variation in temporary differences	266,083	(233,298)	(165,424)
Income tax	(1,051,896)	(717,639)	(625,451)

Consolidated statement of comprehensive income

	2017	2016	2015
	ARS 000	ARS 000	ARS 000
Income tax for the year related to items charged or credited directly to other comprehensive income
Deferred income tax income (expense)	154,268	(107,194)	(71,573)
Income tax credited (charged) to other comprehensive income	154,268	(107,194)	(71,573)

The reconciliation between income tax in the consolidated statement of income and the accounting income multiplied by the statutory income tax rate for the years ended December 31, 2017, 2016 and 2015, is as follows:

	2017	2016	2015
	ARS 000	ARS 000	ARS 000
Income before income tax from continued operations	4,060,854	2,048,501	1,835,590
Income before income tax from discontinued operations	749,198	673,807	202,860
Income before income tax	4,810,052	2,722,308	2,038,450
At statutory income tax rate of 35%	(1,683,518)	(952,808)	(713,458)
Share of the profit of associates	101,409	12,767	15,187
Adjustment related to current income tax for the prior year	32,561	938	2,845
Effect related to statutory income tax rate change (1)	220,956	-	-
Others	12,539	(14,369)	(1,026)
	(1,316,053)	(953,472)	(696,452)
Income tax attributable to continuing operations	(1,051,896)	(717,639)	(625,451)
Income tax attributable to discontinuing operations	(264,157)	(235,833)	(71,001)
	(1,316,053)	(953,472)	(696,452)

(1) Effect of applying the changes in the enacted tax rate established by Law 27,430 as described in note 23.a) to the deferred assets and liabilities, according to its expected term of realization and settlement, respectively.

Deferred income tax

Deferred income tax relates to the following:

	Consolidated statement of financial position		Consolidated statement of income from continuing operations and statement of other comprehensive income
	12-31-2017	12-31-2016	2017	2016	2015
	ARS 000	ARS 000	ARS 000	ARS 000	ARS 000
Trade receivables	(425,442)	(661,748)	217,170	(131,465)	142
Provision for plant dismantling	39,310	43,820	-	-	-
Other financial assets	(37,658)	(190,315)	152,657	9,931	(184,421)
Employee benefit liability	32,089	30,697	1,627	9,499	4,587
Receivables and other non-financial liabilities	(6,249)	(5,826)	(423)	(248,723)	(101,037)
Provisions and other	44,910	30,986	13,872	23,314	27,874
Investments in associates	(138,266)	(34,522)	(103,744)	(34,522)	-
Property, plant and equipment	(224,175)	(322,012)	93,612	25,378	11,375
Intangible assets	(14,198)	(27,561)	13,363	6,096	4,483
Tax loss carry-forward	32,217	-	32,217	-	-
Deferred income tax income (expense)			420,351	(340,492)	(236,997)
Deferred income tax liabilities, net	(697,462)	(1,136,481)

As of December 31, 2017, the Group holds tax loss carry-forward in its subsidiaries CP Renovables, CP La Castellana and CP Achiras for 32,217 that can be utilized against future taxable profit from such entities until 2022.

Reflected in the statements of financial position as follows:

	Consolidated statements of financial position
	2017	2016
	ARS 000	ARS 000
Deferred income tax assets
Continuing operations	107,544	105,773
Discontinued operations	41,023	-
Deferred income tax liabilities
Continuing operations	(811,288)	(1,242,254)
Discontinued operations	(34,741)	-
	(697,462)	(1,136,481)

Reconciliation of deferred income tax liabilities net

	12-31-2017	12-31-2016
	ARS 000	ARS 000
Amount at beginning of year	(1,136,481)	(770,737)
Deferred income tax recognized in profit or loss and in other comprehensive income during the year - continuing operations	420,351	(335,850)
Discontinued operations	(467)	-
Reclassification related to current income tax for the prior year	19,135	(29,894)
Amount at end of year	(697,462)	(1,136,481)

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10. Earnings per share

12 Months Ended

Dec. 31, 2017

Earnings per share [abstract]

Earnings per share

Earnings per share amounts are calculated by dividing net income for the year attributable to equity holders of the parent by the weighted average number of ordinary shares during the year.

So as to calculate the weighted average number of ordinary shares, the following was taking into account:

a) common shares granted for payment of dividends that are outstanding since January 1, 2015 and;

b) the capital stock reduction due to the merger mentioned in note 1.1 took place on January 1, 2015.

There are no transactions or items generating an effect of dilution.

The following reflects information on income and the number of shares used in the earnings per share computations:

	2017	2016	2015
	ARS 000	ARS 000	ARS 000
Income attributable to equity holders of the parent
Continuing operations	3,022,754	1,330,869	1,210,139
Discontinued operations	485,041	437,974	131,859
	3,507,795	1,768,843	1,341,998
Weighted average number of ordinary shares	1,505,695,134	1,505,695,134	1,505,695,134

There have been no transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of issuance of these consolidated financial statements that may produce a dilution effect.

To calculate the earnings per share for discontinued operations (note 21), the weighted average number of shares for both the basic and diluted earnings per share is as per the table above. The following provides the income amount used:

	2017	2016	2015
	ARS 000	ARS 000	ARS 000
Income attributable to equity holders of the parent from discontinued operations	485,041	437,974	131,859

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11. Inventories

12 Months Ended

Dec. 31, 2017

Inventories Abstract

Inventories

	2017	2016
	ARS 000	ARS 000
Non-current:
Materials and spare parts	102,384	61,711
Provision for impairment in value	(54,181)	(30,881)
	48,203	30,830
Current:
Materials and spare parts	101,016	128,691
Fuel oil	7,461	7,461
Diesel oil	1,813	1,813
	110,290	137,965

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12. Property, plant and equipment

12 Months Ended

Dec. 31, 2017

Property, plant and equipment [abstract]

Property, plant and equipment

	Lands and buildings	Electric power facilities	Gas turbines (1)	Construction in progress	Other	Total
Cost	ARS 000	ARS 000	ARS 000	ARS 000	ARS 000	ARS 000
01-01-2016	158,939	3,878,409	299,285	-	211,222	4,547,855
Additions	206,152	468,519	384,129	-	11,401	1,070,201
Disposals	-	(22,375)	-	-	(3,175)	(25,550)
12-31-2016	365,091	4,324,553	683,414	-	219,448	5,592,506
Additions	2,400	168,791	883,772	2,482,528	21,234	3,558,725
Transfers	(1,568)	(309,796)	1,246,266	257,643	(25,749)	1,166,796
Disposals	-	-	-	-	(1,104)	(1,104)
12-31-2017	365,923	4,183,548	2,813,452	2,740,171	213,829	10,316,923

	Lands and buildings	Electric power facilities	Gas turbines	Construction in progress	Other	Total
Depreciation	ARS 000	ARS 000	ARS 000	ARS 000	ARS 000	ARS 000
01-01-2016	39,356	2,394,358	-	-	145,993	2,579,707
Depreciation for the year	2,180	188,833	-	-	10,852	201,865
Disposals	-	-	-	-	(605)	(605)
12-31-2016	41,536	2,583,191	-	-	156,240	2,780,967
Depreciation for the year	2,162	264,069	-	-	12,448	278,679
Transfers	(1,506)	(167,895)	-	-	(4,505)	(173,906)
Disposals	-	-	-	-	(545)	(545)
12-31-2017	42,192	2,679,365	-	-	163,638	2,885,195
Net book value:
12-31-2017	323,731	1,504,183	2,813,452	2,740,171	50,191	7,431,728
12-31-2016	323,555	1,741,362	683,414	-	63,208	2,811,539

(1) As of December 31, 2017, the Company acquired gas turbines, one of which will be used for new generation capacity in the project called “Terminal 6 San Lorenzo” while the other turbines can be used for other projects, in future bidding processes that may be called by the Argentine government.

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13. Intangible assets

12 Months Ended

Dec. 31, 2017

Intangible Assets

Intangible assets

	Concession right	Other	Total
Cost	ARS 000	ARS 000	ARS 000
12-31-2016	724,883	98,222	823,105
12-31-2017	724,883	98,222	823,105
Amortization
01-01-2016	475,970	70,444	546,414
Amortization of the year	31,114	9,047	40,161
12-31-2016	507,084	79,491	586,575
Amortization for the year	31,114	17,583	48,697
12-31-2017	538,198	97,074	635,272
Net book value
12-31-2017	186,685	1,148	187,833
12-31-2016	217,799	18,731	236,530

Concession right of Piedra del Águila hydroelectric power plant

Includes the amounts paid as consideration for rights relating to the concession of Piedra del Águila hydroelectric power plant awarded by the Argentine government for a 30-year term, until December 29, 2023. The Group amortizes such intangible asset based on straight-line basis over the remaining life of the concession agreement.

For a concession arrangement to fall within the scope of IFRIC 12, usage of the infrastructure must be controlled by the concession grantor. This requirement is met when the following two conditions are met:

– the grantor controls or regulates what services the operator must provide with the infrastructure, to whom it must provide them, and at what price; and

– the grantor controls the infrastructure, i.e., retains the right to take back the infrastructure at the end of the concession.

Upon Resolution 95 passed by Argentine government our concession right of Piedra del Águila hydroelectric power plant met both conditions above.

The main features of the concession contract are as follows:

Control and regulation of prices by concession grantor: Pricing schedule approved by grantor;

Remuneration paid by: CAMMESA;

Grant or guarantee from concession grantor: None;

Residual value: Infrastructure returned to grantor for no consideration at end of concession;

Concession end date: December 29, 2023;

IFRIC 12 accounting model: Intangible asset.

Fees and royalties: the Intergovernmental Basin Authority is entitled to a fee of 2.5% of the plant’s revenues, and the provinces of Rio Negro and Neuquén are entitled to royalties of 12% of such revenues. For the years ended December 31, 2017, 2016 and 2015, the fees and royalties amounted 127,270, 46,518 and 84,197, respectively and they were shown in operating expenses in the consolidated statement of income.

Contractual capital investment obligations and obligations relating to maintenance expenditure on infrastructure under concession are nominal.

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14. Financial assets and liabilities

12 Months Ended

Dec. 31, 2017

Financial Assets And Liabilities

Financial assets and liabilities

14.1. Trade and other receivables

	12-31-2017	12-31-2016
	ARS 000	ARS 000
Non-current:
Trade receivables - CAMMESA	2,591,913	3,544,354
Upfront payments of associates acquisition	43	43
Receivables from associates	10,257	8,732
	2,602,213	3,553,129

Current:
Trade receivables - CAMMESA	3,625,863	1,807,721
Trade receivables - YPF SA	136,696	309,837
Recovery of insurance	21,292	16,646
Trade receivables - Large users	41,414	25,384
Receivables from associates	7,267	5,487
Receivables from other related parties	-	11
Other receivables	56,284	52,200
	3,888,816	2,217,286
Allowance for doubtful accounts - note 14.1.1.	(1,751)	(1,751)
	3,887,065	2,215,535

For the terms and conditions of receivables from related parties, refer to note 19.

Trade receivables from CAMMESA accrue interest, once they become due. The Group accrues interest on receivables from CAMMESA according to the nature of the receivables, as follows:

Receivables for FONINVEMEN I and II: The Company accrues interests according to the explicit rate agreed in the corresponding agreements for the passage of time.

CVO receivables: The Company will accrue interest when it becomes probable that the CVO power plant construction would be completed and the plant could operate as a combined-cycle plant.

LVFVD (Sales Liquidations with Maturity Dates to be Defined): The Company recognizes interest on the LVFVDs when CAMMESA determines the amount of interest and notifies the Company through a billing document.

Trade receivables related to YPF and large users accrue interest as stipulated in each individual agreement. The average collection term is generally from 30 to 90 days.

FONINVEMEM I and II: As described in note 1 between 2004 and 2007, the Argentine government issued a series of resolutions aimed at increasing thermal generation capacity while at the same time providing a mechanism for generators to collect their LVFVD receivables. The receivables under FONINVEMEM I and II Agreements are included under “Trade receivables - CAMMESA”. Such receivables are being collected in 120 equal, consecutive monthly installments beginning in February and January 2010, when Thermal Jose de San Martin and Thermal Manuel Belgrano plants, commenced operations, respectively. Since the commissioning of the power plants in 2010, CAMMESA has made all payments of principal and interest in accordance with the above-mentioned contractual agreements.

During the years ended December 31, 2017 and 2016 collections of these receivables amounted to 350,577 and 307,211, respectively.

The FONINVEMEM I and II receivables are denominated in US dollars and accrue interest at LIBOR plus 1% and 2%, respectively.

As of December 31, 2017 and 2016 the FONINVEMEN I and II receivables amounted 816,653 and 1,019,991, respectively, which corresponds to USD 44 million and USD 64 million, respectively.

CVO receivables

Receivables under CVO agreement are disclosed under “Trade receivables - CAMMESA”. Collection of such receivables will begin after the thermal plan Central Vuelta de Obligado is commissioned.

As described in note 1 in 2010 the Company approved a new agreement with the former Secretariat of Energy (the “CVO agreement”). This agreement established, among other agreements, a framework to determine a mechanism to settle unpaid trade receivables as per Resolution 406 accrued over the 2008-2011 period by the generators (CVO receivables) and for that purpose enabling the construction of a thermal combined cycle plant named Central Vuelta de Obligado.

As of December 31, 2017 and 2016 CVO receivables amounted 1,291,384 and are denominated in Argentine Pesos.

We have not recognized interests as well as the effect of the conversion of these receivables into US dollars due to uncertainties in the application of the agreement terms by CAMMESA because the agreement included conditions precedent to complete the thermal combined cycle plant and obtain the related regulatory approvals, which have not occurred as of December 31, 2017.

Subsequent event

Effective as of March 20, 2018, CAMMESA approved the commercial operations in the WEM as a combined cycle of the thermal plant Central Vuelta de Obligado (the “Commercial Approval”).

As a consequence of the Commercial Approval and pursuant to the CVO agreement, we are entitled to collect the CVO receivables in US dollars in 120 monthly, equal consecutive installments, starting from the Commercial Approval. We estimate that the resulting one-time gain for the recognition of the interests as well as the effect of the conversion of the CVO receivables into US dollars, before income tax, would be approximately 8,900,000 and it will be recorded in the 2018 first quarter results.

The information on the Group’s objectives and credit risk management policies is included in note 20.

The breakdown by due date of trade and other receivables due as of the related dates is as follows:

			Past due
	Total	To due	<90 days	90-180 days	180-270 days	270-360 days	>360 days
	ARS 000	ARS 000	ARS 000	ARS 000	ARS 000	ARS 000	ARS 000
12-31-2017	6,489,278	6,448,858	35,045	-	1,877	-	3,498
12-31-2016	5,768,664	5,043,085	725,579	-	-	-	-

14.1.1. Allowance for doubtful accounts

	12-31-2017					12-31-2016
Item	At beginning		Increases	Recovery	At end	At end
Allowance for doubtful accounts - Trade and other receivables		1,751	-	-	1,751	1,751
Total		1,751	-	-	1,751	1,751

14.2. Trade and other payables

	12-31-2017	12-31-2016
	ARS 000	ARS 000
Current:
Trade payables	1,006,191	652,349
Insurance payable	1,936	685
Payables to associates	9,179	2,564
	1,017,306	655,598

Trade payables are non-interest bearing and are normally settled on 60-day terms.

The information on the Group’s objectives and financial risk management policies is included in note 18.

For the terms and conditions of payables to related parties, refer to note 17.

14.3. Other loans and borrowings

	12-31-2017	12-31-2016
	ARS 000	ARS 000
Non-current
Borrowings from Banco de Galicia y Buenos Aires S.A.	1,478,729	-

	12-31-2017	12-31-2016
	ARS 000	ARS 000
Current
Short term bank loans	233	294,692
Borrowings from Banco de Galicia y Buenos Aires S.A.	505,371	998,486
	505,604	1,293,178

14.3.1. Loans from Banco de Galicia y Buenos Aires S.A. to CP La Castellana and CP Achiras S.A.U.

On October 26, 2017 and October 30, 2017, CP La Castellana and CP Achiras S.A.U. (“CP Achiras”) entered into loans with Banco de Galicia y Buenos Aires S.A. in the amount of 330,000 and 175,000, respectively (the “Castellana and Achiras Loans”). The Castellana and Achiras Loans accrue interest at an interest rate equal to BADLAR private banks plus a 3.10% margin and shall mature on the dates that are two years from the execution and disbursement. The proceeds from these loans were used to finance the Achiras Project and the La Castellana Project. We have fully, unconditionally and irrevocably guaranteed, as primary obligor, all payment obligations assumed and/or to be assumed by CP La Castellana and CP Achiras under these loans and any other ancillary document related to them.

Loans for wind turbines acquisition

On November 10, 2017, CP La Castellana and CP Achiras entered into two short-term bridge loans with Banco de Galicia y Buenos Aires S.A. in the amount of USD 35.0 million and USD 18.0 million, respectively.

On December 21, 2017, CP La Castellana and CP Achiras entered into two short-term bridge loans with Banco de Galicia y Buenos Aires S.A. in the amount of USD 9.0 million and USD 5.8 million, respectively.

On December 22, 2017, CP La Castellana and CP Achiras entered into two short-term bridge loans with Banco de Galicia y Buenos Aires S.A. in the amount of USD 6.5 million and USD 3.2 million, respectively.

These loans accrued interest at an annual interest rate of 3.6% and mature on April 9, 2018.

As of December 31, 2017, CP La Castellana entered into the loans described in note 14.3.2, which in their Framework Agreement consider long-term refunding of the loans agreed between this Company and Banco de Galicia y Buenos Aires S.A. Consequently, as of December 31, 2017 such loans were classified as non-current liabilities since the Group could refund them in a period longer than one year from such date.

Subsequent events

On January 9, 2018 CP La Castellana paid in full the three-short-term bridge - loans mentioned above for an aggregate amount of USD 50.5 million with the proceeds of the ICC - IFC Facility, described below.

On January 15, 2018 CP Achiras entered into a short-term bridge loan with Banco de Galicia y Buenos Aires in the amount of USD 7 million for the acquisition of wind turbines. This loan accrues interest at an annual interest rate of 3.1% and matures on March 18, 2018.

On April 9 and 10, 2018 CP Achiras paid in full the four short-term bridge loans mentioned above for an aggregate amount of USD 34 million with the proceeds of the ICC - IFC Facility, described below.

14.3.2. Loans from the IIC-IFC Facility

On October 20, 2017, CP La Castellana S.A.U. entered into a common terms agreement with (i) the Inter-American Investment Corporation, (ii) the Inter-American Investment Corporation, acting as agent for the Inter-American Development Bank, (iii) the Inter-American Investment Corporation, as agent of the Inter-American Development Bank, in its capacity as administrator of the Canadian Climate Fund for the Private Sector of the Americas, and (iv) the International Finance Corporation (collectively, the “senior lenders”) to provide loans for a total amount of up to USD 100.05 million (the “IIC-IFC Facility”), from which USD 5.0 million will accrue interest at an annual rate equal to LIBOR plus 3.5% and the rest at LIBOR plus 5.25%, and shall be repaid in 52 quarterly equal installments. Several other agreements and related documents, such as the guarantee and sponsor support agreement, where we fully, unconditionally and irrevocably guarantee, as primary obligor, all payment obligations assumed and/or to be assumed by CP La Castellana S.A.U. until the project reaches the commercial operation date (the “Guarantee and Sponsor Support Agreement”), hedge agreements, guarantee trust agreements, a share pledge agreement, an asset pledge agreement over the wind turbines, direct agreements and promissory notes have been executed.

Pursuant to the Guarantee and Sponsor Support Agreement, among other customary covenants for this type of facilities, we committed, until the La Castellana project completion date, which is expected to occur in the first quarter of 2019, to maintain (i) a leverage ratio of (a) until (and including) December 31, 2018, not more than 4.00:1.00; and (b) thereafter, not more than 3.5:1.00; and (ii) an interest coverage ratio of not less than 2.00:1.00. In addition, our subsidiary, CPR, and we, upon certain conditions, agreed to make certain equity contributions to CP La Castellana.

We also agreed to maintain, unless otherwise consented to in writing by each senior lender, ownership and control of the CP La Castellana as follows: (i) until the La Castellana project completion date, (a) we shall maintain (x) directly or indirectly, at least seventy percent (70%) beneficial ownership of CP La Castellana; and (y) control of the CP La Castellana; and (b) CP Renovables shall maintain (x) directly, ninety-five percent (95%)
beneficial ownership of CP La Castellana; and (y) control of CP La Castellana. In addition, (ii) after La Castellana project completion date, (a) we shall maintain (x) directly or indirectly, at least fifty and one tenth

percent (50.1%) beneficial ownership of each of CP La Castellana and CP Renovables; and (y) control of each of CP La Castellana and CP Renovables; and (b) CP Renovables shall maintain control of the CP La Castellana.

Subsequent events

On January 9, 2018 CP La Castellana received the first disbursement from the IIC-IFC Facility for a total amount of USD 80 million.

On January 17, 2018 CP Achiras entered into an agreement with (i) International Finance Corporation (“IFC”) on its own behalf, as Eligible Hedge Provider and as an implementation entity of the Intercreditor Agreement Managed Program; (ii) Inter-American Investment Corporation (“IIC”), as lender on its behalf, acting as agent for the Inter-American Development Bank (“IDB”) and on behalf of IDB as administrator of the Canadian Climate Fund for the Private Sector in the Americas (“C2F”, and together with IIC and IDB, “Group IDB”, and together with IFC, “Senior Lenders”). They agreed on the structuring of a series of loan agreements in favor of CP Achiras for a total capital of up to USD 50.7 million; USD 40.7 million of that amount accrue an interest rate equal to LIBOR plus 5.25% and the rest at LIBOR plus 4%, amortized in 52 equal quarterly installments. Several other agreements and related documents, such as the guarantee and sponsor support agreement, where we will fully, unconditionally and irrevocably guarantee, as primary obligor, all payment obligations assumed and/or to be assumed by CP Achiras until the project reaches the commercial operation date, guarantee trust agreements, a share pledge agreement, a mortgage, an asset pledge agreement over the wind turbines, direct agreements and promissory notes have been executed. Pursuant to these agreements, we committed to the same covenants than for the IIC – IFC Facility entered by CP La Castellana, as described above.

On April 9 and 10, 2018 CP Achiras received two disbursements from the IIC-IFC Facility for a total amount of USD 50.7 million.

14.3.3. Others

On June 30, 2016, the Company prepaid in cash all of its outstanding 9% Corporate bonds - Class I 2007 for USD 51.6 million at a redemption value equivalent to the nominal value of outstanding securities plus accrued and unpaid interest. The original due date of such corporate bonds was in July 2017.

On May 31 and June 30, 2016, the Company entered into two financial loans with Banco de Galicia y Buenos Aires S.A. for USD 50.3 million and USD 11 million, respectively. The loans accrued interest at a nominal annual interest rate of 4.3% and should be repaid one year from the date of disbursement. Consequently, both loans were paid in full in May 2017, while latter one in June 2017.

14.3.4. Medium Term Note Program

The Regular General Shareholders’ Meeting held on November 20, 2014, approved a Medium Term Note Program for a maximum amount outstanding at any time of up to USD 1,000,000,000 (or its equivalent in other currencies) to be issued in short, medium, long-term negotiable obligations convertible into shares, in the terms of the Law No. 23.576 (negotiable obligations law) (“The program”). In addition, the Board of Directors was empowered to determine and establish the conditions of the Program and of the notes to be issued under such Program which were not expressly determined by the Shareholders’ Meeting. The CNV authorized the Program on September 9, 2015.

The information on the Group’s objectives and financial risk management policies is included in note 20.

14.4. Borrowings from CAMMESA

	12-31-2017	12-31-2016
	ARS 000	ARS 000
Non-current:
CAMMESA loans	1,055,558	1,284,783
Current:
CAMMESA loans	970,980	420,672
CAMMESA prepayments	782,058	627,050
	1,753,038	1,047,722

On October 23, 2002, former Secretariat of Energy issued Resolution No. 146/2002 (“Resolution 146”), which specifies a funding mechanism for the generators based upon the performance of major maintenance to their existing facilities.

The major maintenance programs were previously approved by former secretariat of energy.

Under Resolution 146, the Group entered into several loan agreements with CAMMESA.

Such loans accrue interest at a rate equivalent to the one received by CAMMESA on its own cash investments and shall be repaid in 48 monthly installments beginning on the completion date of the relevant major maintenance. The Group has the option to repay the loans, through cash or net settlement of receivables from CAMMESA related with remuneration for non-recurring maintenance created by Resolution 529. In connection with this financing the Company provided CAMMESA a guaranty representing for the non-recurring maintenance receivables in order to fulfil its obligations.

The table below summarizes the maturity of the Group’s borrowings from CAMMESA:

	To due
Total	2018	2019	2020	2021	2022
ARS 000	ARS 000	ARS 000	ARS 000	ARS 000	ARS 000
2,808,596	1,753,038	535,673	295,369	221,504	3,012

During the years ended December 31, 2017, 2016 and 2015, the Group received loans from CAMMESA amounting to 403,427, 784,245 and 317,995, respectively.

During the year ended December 31, 2015, the Group received prepayments from CAMMESA amounting to 415,911 for purchasing from General Electric a gas turbine with capacity of 373MW. The mentioned acquisition was previously approved by CAMMESA.

These prepayments accrue interest at an equivalent rate to the one received by CAMMESA on its own cash investments and the repayment schedule has not yet been established as of the date of these consolidated financial statements.

The information on the Group’s objectives and financial risk management policies is included in note 20.

14.5. Changes in liabilities arising from financing activities

	01-01-2017	Payments	Non-cash transactions	Disbursements	Other	12-31-2017
	ARS 000	ARS 000	ARS 000	ARS 000	ARS 000	ARS 000
Non-current liabilities
Other loans and borrowings	-	-	-	1,395,508	83,221	1,478,729
Borrowings from CAMMESA	1,284,783	-	-	403,427	(632,652)	1,055,558
Current liabilities
Other loans and borrowings	1,293,178	(1,349,934)	-	476,386	85,974	505,604
Borrowings from CAMMESA	1,047,722	-	(522,215)	-	1,227,531	1,753,038

The “Non-cash transactions” column includes the effect to cancel borrowings from CAMMESA under Resolution 146 with trade receivables from CAMMESA related with remuneration from non-recurring maintenance. The “Other” column includes the effect of reclassification of non-current portion to current due to the passage of time, the foreign exchange movement and the effect of accrued but not yet paid interest. The group classifies interest paid as cash flows from financing activities.

14.6. Quantitative and qualitative information on fair values

Information on the fair value of financial assets and liabilities by category

The following tables is a comparison by category of the carrying amounts and the relevant fair values of financial assets and liabilities.

	Carrying amount		Fair value
	12-31-2017	12-31-2016	12-31-2017	12-31-2016
	ARS 000	ARS 000	ARS 000	ARS 000
Financial assets
Trade and other receivables	6,489,278	5,768,664	6,489,278	5,768,664
Other financial assets	1,110,728	1,796,756	1,110,728	1,796,756
Cash and cash equivalents	88,633	30,008	88,633	30,008
Total	7,688,639	7,595,428	7,688,639	7,595,428

	Carrying amount		Fair value
	12-31-2017	12-31-2016	12-31-2017	12-31-2016
	ARS 000	ARS 000	ARS 000	ARS 000
Financial liabilities
Other loans and borrowings	1,984,333	1,293,178	1,984,333	1,293,178
Borrowings from CAMMESA	2,808,596	2,332,505	2,808,596	2,332,505
Total	4,792,929	3,625,683	4,792,929	3,625,683

Valuation techniques

The fair value reported in connection with the abovementioned financial assets and liabilities is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

Management assessed that the fair values of current trade receivables and current loans and borrowings approximate their carrying amounts largely due to the short-term maturities of these instruments.

The Group measures long-terms receivables at fixed and variable rates based on discounted cash flows. The valuation requires that the Group adopt certain assumptions such as interest rates, specific risk factors of each transaction and the creditworthiness of the customer.

Fair value of quoted debt securities, mutual funds and corporate bonds is based on price quotations at the end of each reporting period.

The fair value of the foreign currency forward contracts is calculated based on appropriate valuation techniques that use market observable data.

The fair value of the group’s variable interest-rate borrowings and loans is determined by using the discounted cash flow method using discount rate that reflects the issuers borrowing rate as at the end of the year. Generally, the fair value of variable interest rate approximates their carrying amount.

Fair value hierarchy

The following tables provides, by level within the fair value measurement hierarchy, as described in note 2.2.2, the Company’s financial assets, that were measured at fair value on recurring basis as of December 31, 2017, and 2016:

	Fair value measurement using:
12-31-2017	Total	Level 1	Level 2	Level 3
	ARS 000	ARS 000	ARS 000	ARS 000
Assets measured at fair value
Financial assets at fair value through profit or loss:
Mutual funds	556,138	556,138	-	-
Argentine Central Bank bills	404,570	404,570	-	-
Available-for-sale financial assets:
Mutual funds	150,020	150,020	-	-
Total financial assets measured at fair value	1,110,728	1,110,728	-	-

	Fair value measurement using:
12-31-2016	Total	Level 1	Level 2	Level 3
	ARS 000	ARS 000	ARS 000	ARS 000
Assets measured at fair value
Financial assets at fair value through profit or loss:
Mutual funds	104,177	104,177	-	-
Corporate bonds	1,854	1,854	-	-
Available-for-sale financial assets:
Mutual funds	1,690,725	1,690,725	-	-
Total financial assets measured at fair value	1,796,756	1,796,756	-	-

There were no transfers between Level 1 hierarchies and there were not significant variations in Level 3 assets values.

14.7. Derivative financial instruments

The gain on foreign currency forward contracts for the years ended December 31, 2016 and 2015 amounts to 157,827 and 410,794, respectively, and is disclosed net in financial expenses as net foreign exchange differences. Moreover, the amounts of 380,348 and 188,273 have been received as cash settlement of these contracts during the years ended December 31, 2016 and 2015, respectively.

The information on the Group’s objectives and financial risk management policies is included in note 20.

14.8. Other financial assets

	12-31-2017	12-31-2016
	Book value	Book value
	ARS 000	ARS 000
Available-for-sale financial assets at fair value through other comprehensive income
Mutual funds	150,020	1,690,725
	150,020	1,690,725
Financial assets through profit or loss
Argentina Central Bank bills	404,570	-
Mutual funds	556,138	104,177
Corporate bonds	-	1,854
	960,708	106,031
	1,110,728	1,796,756

The information on the objectives and financial risk management policies is included in note 18.

14.9. Financial assets and liabilities in foreign currency

	12-31-2017				12-31-2016
Account	Currency and amount (in thousands)		Effective exchange rate (1)	Book value	Currency and amount (in thousands)		Book value
				ARS 000			ARS 000
NON-CURRENT ASSETS
Trade and other receivables	USD	24,648	18.5490	457,193	USD	44,490	702,495
				457,193			702,495
CURRENT ASSETS
Cash and cash equivalents	USD	4,313	18.5490	80,002	USD	1,502	23,717
	EUR	1	22.2829	22	EUR	2	33
Trade and other receivables	USD	29,541	18.5490	547,954	USD	41,410	653,871
				627,978			677,621
				1,085,171			1,380,116
NON-CURRENT LIABILITIES
Other loans and borrowings	USD	50,690	18.6490	945,326	USD	-	-
				945,326			-
CURRENT LIABILITIES
Other loans and borrowings	USD	27,099	18.6490	505,371	USD	62,837	998,486
Trade and other payables	USD	31,243	18.6490	582,651	USD	14,087	223,842
	EUR	136	22.4497	3,053	EUR	59	989
				1,091,075			1,223,317
				2,036,401			1,223,317

USD: US dollar.

EUR: Euro.

(1) At the exchange rate prevailing as of December 31, 2017 as per Banco de la Nación Argentina.

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15. Non-financial assets and liabilities

12 Months Ended

Dec. 31, 2017

Non-financial Assets And Liabilities

Non-financial assets and liabilities

15.1. Other non-financial assets

	12-31-2017	12-31-2016
	ARS 000	ARS 000
Non-current:
Tax credits	8,213	1,811
Prepayments to vendors	4,508	4,472
Upfront payments of property, plant and equipment purchases	-	1,460,264
	12,721	1,466,547
Current:
Upfront payments of inventories purchases	41,596	46,205
Prepayment expenses	87,273	66,025
Tax credits	335,487	17,840
Other	6,539	7,040
	470,895	137,110

15.2. Other non-financial liabilities

	12-31-2017	12-31-2016
	ARS 000	ARS 000
Non-current:
VAT payable	448,712	613,363
Tax on bank account transactions payable	19,983	21,799
	468,695	635,162
Current:
VAT payable	569,005	385,846
Turnover tax payable	6,335	8,982
Income tax withholdings payable	26,312	19,666
Concession fees and royalties	17,102	8,767
Tax on bank account transactions payable	39,557	41,096
Other	1,357	12,428
	659,668	476,785

15.3. Compensation and employee benefits liabilities

	12-31-2017	12-31-2016
	ARS 000	ARS 000
Non-current:
Employee long-term benefits	113,097	87,705

The following tables summarize the components of net benefit expense recognized in the consolidated statement of income as long-term employee benefit plans and the changes in the long-term employee benefit liabilities recognized in the consolidated statement of financial position.

	12-31-2017	12-31-2016
	ARS 000	ARS 000
Benefit plan expenses
Cost of interest	20,857	22,859
Cost of service for the current year	6,338	4,039
Past service cost	3,286	-
Expense recognized during the year	30,481	26,898
Defined benefit obligation at beginning of year	87,705	56,112
Cost of interest	20,857	22,859
Cost of service for the current year	6,338	4,039
Past service cost	3,286	-
Actuarial losses recognized in other comprehensive income	17,380	20,594
Benefits paid	(17,444)	(15,899)
Discontinued operations	(5,025)	-
Defined benefit obligation at end of year	113,097	87,705

The main key assumptions used to determine the obligations as of year-end are as follows:

Main key assumptions used	2017	2016
Discount rate	5.50%	6.50%
Increase in the real annual salary	2.00%	2.00%
Turn over of participants	0.73%	0.73%

A one percentage point change in the discount rate applied would have the following effect:

	Increase	Decrease
	ARS 000	ARS 000
Effect on the benefit obligation as of the 2017 year-end	(8,816)	10,111
Effect on the benefit obligation as of the 2016 year-end	(6,135)	7,114

A one percentage point change in the annual salary assumed would have the following effect:

	Increase	Decrease
	ARS 000	ARS 000
Effect on the benefit obligation as of the 2017 year-end	9,333	(8,296)
Effect on the benefit obligation as of the 2016 year-end	6,600	(5,788)

As of December 31, 2017, and 2016, the Group had no assets in connection with employee benefit plans.

	12-31-2017	12-31-2016
	ARS 000	ARS 000
Current:
Vacation and statutory bonus	119,196	88,647
Contributions payable	50,113	39,204
Bonus accrual	144,418	73,405
Other	9,351	4,667
	323,078	205,923

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16. Cash and cash equivalents

12 Months Ended

Dec. 31, 2017

Cash and cash equivalents [abstract]

Cash and cash equivalents

For the purpose of the consolidated statement of financial position and the consolidated statement of cash flow, cash and short-term deposits comprise the following items:

	12-31-2017	12-31-2016
	ARS 000	ARS 000
Cash at banks and on hand	88,633	30,008

Bank balances accrue interest at variable rates based on the bank deposits daily rates.

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17. Dividends

12 Months Ended

Dec. 31, 2017

Dividends

Dividends

Pursuant to the Argentine Companies Act (Ley General de Sociedades) and the bylaws, 5% of the income for the period must be allocated to the legal reserve until such reserve reaches 20% of the capital stock.

On April 30, 2015, the Shareholders’ Meeting of the Company approved the increase of the legal reserve in the amount of 15,887. On November 20, 2015, the Shareholders’ Meeting of the Company approved the distribution of dividends in cash amounting to ARS 0.24 per share which were paid in full.

On April 29, 2016, the Shareholders’ Meeting of the Company approved the increase of the legal reserve in the amount of 67,718 and the allocation of the remaining unallocated results as of December 31, 2015 to increase the voluntary reserve by 1,286,641 in order to improve the solvency of the Company.

On October 21, 2016, the Shareholders’ Meeting of the Company approved the distribution of dividends in cash amounting to ARS 7.4 per share which were paid on November 7, 2016.

On December 16, 2016, the Shareholders’ Meeting of the Company approved the reversal of the voluntary reserve for 1,324,769, the capitalization of the reversed funds through the payment of a dividend in shares, the increase of the Company’s capital stock and the issue and distribution of 1,324,769,474 non-endorsable registered shares (fully paid-in). On February 8, 2017, the new shares of the Company were issued.

On April 28, 2017, the Shareholders’ Meeting of the Company approved the increase of the legal reserve in the amount of 88,182 and the allocation of the remaining unallocated results as of December 31, 2016 to increase the voluntary reserve by 1,668,869 in order to improve the solvency of the Company.

On August 15, 2017, the Shareholders’ Meeting of the Company approved the distribution of dividends in cash amounting to ARS 0.85 per share which were paid on August 30, 2017.

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18. Provisions

12 Months Ended

Dec. 31, 2017

Provisions [abstract]

Provisions

	2017					2016
Item	At beginning	Increases	Recovery	Transfers	At end	At end
	ARS 000	ARS 000	ARS 000	ARS 000	ARS 000	ARS 000
Provisions
Non-current
Provision for plant dismantling	125,201	5,831	-	(131,032) (1)	-	125,201
Current
Provision for lawsuits and claims	341,485	71,989	-	-	413,474	341,485
12-31-2017	466,686	77,820	-	(131,032)	413,474
12-31-2016	376,161	137,403	46,878	-		466,686

(1) Transferred to Liabilities associated with the assets held for sale (note 21).

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19. Information on related parties

12 Months Ended

Dec. 31, 2017

Information On Related Parties

Information on related parties

The following table provides the transactions performed for the years ended December 31, 2017, 2016 and 2015, and the accounts payable to/receivable from related parties as of December 31, 2017, and 2016:

		Income	Expenses	Receivables	Payables
		ARS 000	ARS 000	ARS 000	ARS 000
Associates:
Termoeléctrica José de San Martín S.A.	12-31-2017	180	-	19	-
	12-31-2016	180	-	19	-
	12-31-2015	150	-	19	-
Distribuidora de Gas Cuyana S.A.	12-31-2017	-	46,793	-	7,251
	12-31-2016	-	23,019	-	2,564
	12-31-2015	-	9,858	-	807
Distribuidora de Gas del Centro S.A.	12-31-2017	-	-	-	-
	12-31-2016	-	92	-	-
	12-31-2015	-	2,923	-	3,624
Energía Sudamericana S.A.	12-31-2017	-	-	260	1,928
	12-31-2016	257	-	260	-
	12-31-2015	388	-	16,907	-
Transportadora de Gas del Mercosur S.A.	12-31-2017	3,270	-	17,245	-
	12-31-2016	3,105	-	13,940	-
	12-31-2015	-	-	10,799	-
Related companies:
RMPE Asociados S.A.	12-31-2017	137	96,352	-	-
	12-31-2016	145	65,076	11	-
	12-31-2015	130	24,161	11	-
Total	12-31-2017	3,587	143,145	17,524	9,179
	12-31-2016	3,687	88,187	14,230	2,564
	12-31-2015	668	36,942	27,736	4,431

Terms and conditions of transactions with related parties

Balances at the related reporting period-ends are unsecured and interest free. There have been no guarantees provided or received for any related party receivables or payables.

For the years ended December 31, 2017, 2016 and 2015, the Group has not recorded any impairment of receivables relating to amounts owed by related parties. This assessment is undertaken at the end of each reporting period by examining the financial position of the related party and the market in which the related party operates.

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20. Financial risk management objectives and policies

12 Months Ended

Dec. 31, 2017

Financial Risk Management Objectives And Policies

Financial risk management objectives and policies

Pursuant to the advance payment of corporate bonds and the new foreign currency indebtedness with bank entities, the Company has decided to reassess its financial risk management policy, which is exposed in the issued financial statements as of December 31, 2017.

– Interest rate risk

Interest rate variations affect the value of assets and liabilities accruing a fixed interest rate, as well as the flow of financial assets and liabilities with floating interest rates.

As mentioned in note 14.3, short-term bank loans accrue interest at a fixed interest rate. The Group uses no derivate financial instruments to cover this risk.

Interest rate sensitivity

The following table shows the sensitivity of income before income tax for the year ended December 31, 2017, to a reasonably possible change in interest rates over the portion of loans and CAMMESA borrowings bearing interest at a variable interest rate, with all other variables held constant:

Increase in basic points	Effect on income before income tax (Loss)
	ARS 000
500	(167,112)

– Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

The Group is exposed to the foreign currency risk at an ARS/USD ratio, mainly due to its operating activities, the investment projects defined by the Company and the debt related to the bank loan mentioned in note 14.3. The Company does not use derivative financial instruments to hedge such risk.

However, as of December 31, 2017, the Company carries receivables, cash and cash equivalents in foreign currency for USD 58,502 thousands, which are partially offset with the liabilities carried in foreign currency for approximately USD 109,032 thousands.

Foreign currency sensitivity

The following table shows the sensitivity to a reasonably possible change in the US dollar exchange rate, with all other variables held constant, of income before income tax (due to changes in the fair value of monetary assets and liabilities).

Change in USD rate	Effect on income before income tax (Loss)
	ARS 000
10%	(93,729)

– Price risk

The Group’s revenues depend on the electric power price in the spot market and the production cost paid by CAMMESA. The Company has no power to set prices in the market where it operates (See note 1).

Credit risk

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily for trade receivables) and from its financing activities, including holdings of government securities.

– Trade and other receivables

The Finance Department is in charge of managing customer credit risk subject to policies, procedures and controls relating to the Group’s credit risk management. Customer receivables are regularly monitored. Although the Group has received no guarantees, it is entitled to request interruption of electric power flow if customers fail to comply with their credit obligations. In regards to credit concentration, see note 14.1. The need to book impairment is analyzed at the end of each reporting period on an individual basis for major clients. The allowance recorded as of December 31, 2017, is deemed sufficient to cover the potential impairment in the value of trade receivables.

– Cash and cash equivalents

Credit risk from balances with banks and financial institutions is managed by the Group’s treasury department in accordance with corporate policy. Investments of surplus funds are made only with approved counterparties; in this case, the risk is limited because high-credit-rating banks are involved.

– Public and corporate securities

This risk is managed by the Company’s finance management according to corporate policies, whereby these types of investments may only be made in first-class companies and in instruments issued by the federal or provincial governments.

Liquidity risk

The Group manages its liquidity to guarantee the funds required to support its business strategy. Short-term financing needs related to seasonal increases in working capital are covered through short-and medium-term bank credit lines.

The table below summarizes the maturity profile of the Company’s financial liabilities.

	Less than 3 months	3 to 12 months	1 to 5 years	Total
	ARS 000	ARS 000	ARS 000	ARS 000
12-31-2017
CAMMESA borrowings and other loans and borrowings	233	2,258,409	2,534,287	4,792,929
Trade and other payables	1,015,369	1,936	-	1,017,305
	1,015,602	2,260,345	2,534,287	5,810,234
12-31-2016
CAMMESA borrowings and other loans and borrowings	294,692	2,046,208	1,284,783	3,625,683
Trade and other payables	654,929	669	-	655,598
	949,621	2,046,877	1,284,783	4,281,281

Guarantees

In connection with the power purchase agreements described in notes 22.6 and 22.7 and the concession right agreement described in note 13, the Group entered into various agreements, mainly guarantees to provide performance assurance of its obligations.

On October 16, 2006, the Group entered into two pledge agreements with the Secretariat of Energy to guarantee our performance obligations in favor of the FONINVEMEM trusts under certain construction management and operation management agreements and provided as collateral: (a) 100% of our shares in TJSM and TMB, and (b) 50% of the rights conferred by our LVFVD receivables for the duration of the construction management agreement and the operation management agreement.

Likewise, the Group entered into various guarantee agreements to provide performance assurance of its obligations arising from the agreements described in notes 1.a), 14.3.1, 14.3.2, 14.4 and 22.6.

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21. Discontinued operations

12 Months Ended

Dec. 31, 2017

Discontinued Operations

Discontinued operations

On December 20, 2017 YPF EE accepted our offer to sell the La Plata plant, for a total sum of USD 31.5 million, subject to closing customary conditions. On February 8, 2018, after such conditions were met, the plant was transferred to YPF EE effective as of January 5, 2018. Consequently, as of December 31, 2017 the La Plata plant was classified as a disposal group held for sale and its respective results as a discontinued operation. The results of La Plata plant for the years ended December 31, 2017, 2016 and 2015 are presented below:

	2017	2016	2015
	ARS 000	ARS 000	ARS 000
Revenues	2,196,746	1,757,692	580,595
Cost of sales	(1,427,906)	(1,081,979)	(352,844)
Gross income	768,840	675,713	227,751
Administrative and selling expenses	(8,566)	(15,221)	(7,924)
Other operating income	-	27,770	6,170
Other operating expenses	(10,737)	-	(1,259)
Operating income	749,537	688,262	224,738
Finance expense	(339)	(14,455)	(21,878)
Income before tax from discontinued operations	749,198	673,807	202,860
Income tax for the year	(264,157)	(235,833)	(71,001)
Income for the year from discontinued operations	485,041	437,974	131,859

The assets and liabilities of La Plata plant classified as held for sale as of December 31, 2017 are, as follows:

	12-31-2017
	ARS 000
Assets
Property, plant and equipment	116,923
Inventories	26,091
Assets held for sale	143,014
Liabilities
Deferred income tax liabilities	6,282
Compensation and employee benefits liabilities	(4,411)
Provisions	(131,032)
Labilities associated with assets held for sale	(129,161)
Net assets held for sale	13,853

The net cash flows of La Plata plant operation are, as follows:

	2017	2016	2015
	ARS 000	ARS 000	ARS 000
Operating activities	820,955	564,937	221,698

Earnings per share:

	2017	2016	2015
–Basic and diluted income per share from discontinued operations	ARS 0.32	ARS 0.29	ARS 0.09

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22. Contracts and contingent liabilities

12 Months Ended

Dec. 31, 2017

Contracts And Contingent Liabilities

Contracts and contingent liabilities

22.1. Maintenance and service contracts

The Group entered into long-term service agreements executed with leading global companies in the construction and maintenance of thermal generation plants, such as (i) General Electric, which is in charge of the maintenance of the Puerto Combined Cycle plant, the La Plata plant’s gas turbine, and part of the Mendoza based units, and (ii) Siemens, which is in charge of the maintenance of the combined cycle unit based in Luján de Cuyo plant.

Under long-term service agreements, suppliers provide materials, spare parts, labor and on-site engineering guidance in connection with scheduled maintenance activities, in accordance with the applicable technical recommendations.

22.2. Agreement for supplying electricity and steam to YPF

La Plata plant

Pursuant to our electric energy and steam supply agreement with YPF, YPF must purchase electricity and all the steam produced by the La Plata plant until October 31, 2017 when the agreement expired. On October 24, 2017, the original term of the agreement was extended for an additional 5-month period or until the definite transfer of the plant were agreed on or made, whichever occurs first. As result of the transfer of the plant to YPF EE, on February 8, 2018 the agreement was terminated, effective as of January 5, 2018.

Luján de Cuyo plant

As from January 1999 and for a 20-year term, our Luján de Cuyo plant supplies 150 tons per hour of steam to YPF’s refinery in Luján de Cuyo under a steam supply agreement.

Under this agreement YPF supplies the Luján de Cuyo plant with the fuel and water needed for operation of the plant.

On February 8, 2018, we signed an agreement to extend our steam supply agreement with YPF at our Luján de Cuyo plant for a period of up to 24 months from January 1, 2019 under the same terms as our existing steam supply agreement.

22.3. Acquisition of Siemens gas turbine

On December 18, 2014, the Company acquired from Siemens a gas turbine for electric power generation composed by a turbine and a generator with 286 MW output power, and the proper ancillary equipment and maintenance and assistance services.

22.4. Acquisition of General Electric gas turbine

On March 13, 2015, the Company acquired a gas turbine from General Electric and hired their specialized technical support services. The unit is a gas turbine with 373 MW output power.

As of December 31, 2015, the Company received cash advances from CAMMESA amounting to 415,911 for partially funding the mentioned acquisition.

22.5. Acquisition of two Siemens gas turbines

On May 27, 2016, the Company acquired from Siemens two gas turbines for electric power generation composed by a turbine and a generator with 298MW output power, and the proper ancillary equipment and maintenance and assistance services.

22.6. Awarding of Renewable Energy Projects

In October 2016, the Company and its subsidiary CPR were awarded of a wind project called “La Castellana” with a capacity of 99 MW.

In January 2017, CP La Castellana S.A.U. (a wholly owned subsidiary of CPR) entered into a power purchase agreement with CAMMESA for La Castellana project for a 20-year term as from the launch of the commercial operations.

In November 2016, the Company and its subsidiary CPR were awarded of a wind project called “Achiras” with a capacity of 48 MW.

In May 2017, CP Achiras S.A.U. (a wholly owned subsidiary of CPR) entered into a power purchase agreement with CAMMESA for Achiras project for a 20-year term as from the launch of the commercial operations.

In November 2017, the Company and its subsidiary CPR were awarded of a wind project called “La Genoveva I” with a capacity of 86.6 MW. In this sense, on March 23, 2018 CPR acquired 100% equity interests in Vientos La Genoveva S.A., a company that will be engaged in the generation and commercialization of electric power through the wind project “La Genoveva I”.

Subsequent event

In January 2018, the Group was awarded for wind projects called “La Castellana II” and “Achiras II”, with a capacity of 15.75 MW and 30 MW, respectively.

Acquisition of wind turbines

The Group has entered into agreements with Acciona Windpower S.A. and Nordex Windpower S.A. for the manufacture, transport, electromechanical assembly and commissioning of wind turbines for La Castellana and Achiras Wind Farms. The Group also entered into a contract with Nordex Windpower S.A. for the operation and maintenance of the wind farms for a 10-year term.

Additionally, the Group has also entered into agreements with Constructora Sudamericana S.A. and Distrocuyo S.A. for the execution of the civil and electromechanical works, respectively, in the wind farm La Castellana. Also, the Group has entered into agreements with Milicic S.A. and Codeler S.A. for the execution of the civil and electromechanical works, respectively, in the wind farm Achiras.

22.7. Awarding of co-generation projects

On September 25, 2017, the Company was awarded through Resolution SEE 820/2017 with two co-generation projects called “Terminal 6 San Lorenzo” with a capacity of 330 MW and Luján de Cuyo (within our Luján de Cuyo plant) with a capacity of 93 MW.

On December 15, 2017, we executed a new steam supply contract with YPF for a 15-year term that will begin when the new co-generation unit at our Luján de Cuyo plant begins operations.

Also, on December 27, 2017, we entered into a final steam supply agreement with T6 Industrial S.A. for the new co-generation unit at our Terminal 6 San Lorenzo plant for a 15 year-term.

Subsequent event

On January 4, 2018, the Company entered into power purchase agreements with CAMMESA for each of the mentioned projects for a 15-year term as from the launch of commercial operations.

22.8. Sale of the La Plata plant

On December 20, 2017, YPF EE accepted our offer to sell the La Plata plant, for a total sum of USD 31.5 million, subject to closing customary conditions.

Subsequent event

On February 8, 2018, after the conditions were met, the plant was transferred to YPF EE with effective date January 5, 2018.

22.9. Contingent liabilities

Income tax return for fiscal year 2014

In February 2015 CPSA, for itself and as the successor company of Hidroeléctrica Piedra del Águila (HPDA) (the merged company) filed income tax returns for the nine-month period ended September 30, 2014, applying the adjustment for inflation mechanism established by the Argentine Income Tax Law.

In addition, the Company filed its income tax return for the three-month period ended December 31, 2014, applying the same adjustment for inflation mechanism established by the Argentine Income Tax Law.

As of the date of issue of these consolidated financial statements, we do not expect that the Argentine Tax Authorities, or ultimately, the Supreme Court will approve our filed income tax return. Accordingly, as of December 31, 2017, the Company recorded a provision for 391,007, which was recognized during the year ended December 31, 2014.

Action for recovery - income tax refund for fiscal years 2009, 2010 and 2011

In December 2014, the Company, as the successor company of HPDA, filed a petition with the Argentine Tax Authorities for the recovery of income tax for fiscal year 2010 in the amount of approximately 67,383 which, according to our estimates, had been incorrectly paid by HPDA in excess of its income tax liability. By filing such action, we seek to recover the excess income tax paid by HPDA due to the failure to apply the adjustment for inflation set forth in the Argentine Income Tax Law.

On December 21, 2015, after the three-month term required by Law No. 11,683 expired, the Company filed an action for recovery for the amount claimed with the Argentinean Tax Court.

In December 2015, the Company filed a petition with the Argentine Tax Authorities for the recovery of income tax for the fiscal year 2009, in the amount of approximately 20,395 which, according to our estimates, had been incorrectly paid by the Company in excess of our income tax liability. By filling such action, we seek to recover the excess income tax paid by CPSA due to the failure to apply the adjustment for inflation set forth in the Argentine Income Tax Law.

On April 22, 2016, after the three-month term required by Law No. 11,683 expired, the Company filed an action for recovery for the amount claimed with the Argentinean Tax Court.

In December 2017, the Company filed a petition with the Argentine Tax Authorities for the recovery of ARS 50,783 paid in excess by the Company for payment of Income Tax for 2011 fiscal period, according to the Company’s estimates. The purpose of such action is to recover the income tax paid by CPSA due to the failure to apply the adjustment for inflation set forth in the Argentine Income Tax Law.

As of the date of issuance of these consolidated financial statements, we do not expect that the Argentine Tax Authorities, or ultimately, the Supreme Court will approve our request for recovery of income tax we previously paid or whether the conditions to apply the adjustment for inflation mechanism will be satisfied. No receivable was recognized in relation to this matter.

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23. Tax reform

12 Months Ended

Dec. 31, 2017

Tax Reform

Tax reform

On December 29, 2017, decree No.1112/2017 was issued, by which the Tax Reform Law No. 27430 (“Tax Reform Law”) enacted by the Argentine Congress on December 27, 2017, was passed. The Tax Reform Law was published in the Official Gazette the same date it was enacted. The most relevant aspects of this reform are the following:

a) Reduction of the corporate income tax rate and additional tax on the distribution of dividends

Through the fiscal year ended December 31, 2017, the corporate income tax rate remains at 35% and will be reduced to 30% during the two following fiscal years beginning on or after January 1st, 2018, and to 25% for the fiscal years beginning on January 1st, 2020. This reduction affected the measurement of deferred tax assets and liabilities as at December 31, 2017, as indicated in note 7.

The reduction of the corporate income tax rate is supplemented by the application of a tax on the dividend distributions made to local natural persons and foreign beneficiaries, which the Company should withhold and pay over the tax authorities as a single and final payment when dividends are distributed. This additional tax will be of 7% or 13% rate, depending on whether dividends were distributed for a period when the Company was subject to 30% or 25% rate, respectively. For this purpose, it is considered, without admitting evidence to the contrary, that the dividends which are distributed are related, in the first place, to older accumulated earnings.

b) Equalization tax

Pursuant to Law No. 25,053, when dividends are paid exceeding accumulated taxable income as of the year-end immediately preceding the payment date, there is an obligation to withhold, as a single and final payment, 35% on such excess for income tax purpose. This withholding will no longer be applicable for dividends attributable to income accrued during the fiscal years beginning on or after January 1st, 2018.

c) Tax losses (NOLs)

Section 19 of the Income Tax Law incorporates in the treatment of NOL deduction the possibility of them being used considering the changes in the domestic wholesale price index published by INDEC (Argentine Statistics and Census Institute), for the period between the closing month of the fiscal year when the payment is made.

d) Adjustment for inflation

Net taxable income for periods beginning on or after January 1st, 2018, will be assessed by deducting from or adding to the taxable income (loss) for the payment period the adjustment for inflation obtained after applying the specific regulation contained in sections 95 to 98 of the Income Tax Law. This adjustment will only be applicable if the change percentage in the domestic wholesale price index provided by INDEC, according to the tables prepared by the AFIP (Argentine Public Revenue Agency) for such purpose, accumulates (a) a percentage higher than 100% during the 36 months prior to the year-end for which the assessment is made, or (b) a variation higher than 100% by one third or two thirds, respectively, in the first and second fiscal years beginning on or after January 1st, 2018, calculated as from the first of fiscal year and through the end of the second each fiscal year.

If the condition for the adjustment for inflation does not take place, an adjustment is allowed for certain assets as it is mentioned in the following paragraph.

e) Update of the acquisitions and investments made during the fiscal periods beginning on January 1st, 2018

For the acquisitions or investments made during the fiscal periods beginning on January 1st, 2018, the following updates shall apply, based on the change percentage in the domestic wholesale price index provided by INDEC, according to the tables prepared by the AFIP for such purpose:

(1) When transferring depreciable personal property, buildings which cannot be used as an inventory, intangible assets, shares, contributions or equity interests in companies (including contributions to mutual funds), the tax cost basis considered for determining the gross profit will be updated by the aforementioned index, as from the date of the acquisition or investment until the date of the transfer, and will be decreased, if appropriate, by the applicable depreciations calculated from the updated value.

(2) The depreciations deductible related to buildings and other constructions on real estate property assigned to activities or as investments, different from inventories, and the depreciations related to assets assigned to the generation of taxable income, will be calculated applying the aforementioned index to the ordinary depreciation charge, referred to the date of the acquisition or construction indicated in the tables prepared by the AFIP.

f) Tax reappraisal

Law No. 27,430 establishes the option of reappraising for tax purposes, for one time, some assets owned by the tax-payer by the end of the first fiscal year ended after December 29, 2017, the date on which the law came into force, as long as the following conditions are met: (i) the assets are located, placed or economically used within the country, and generate taxable income, (ii) the assets are not subject to accelerated depreciation or have been completely depreciated, and (iii) the assets were not disclosed pursuant to Law No. 27,260.

The performance of the option entails the payment of a special tax regarding all the reappraised assets pursuant to the proportional rates established for each asset, which will be applied over the difference between the residual reappraised tax value and the residual original tax value, calculated pursuant to the rules set forth by the Income Tax Law. The determined tax is not deductible from the income tax and the profit from the reappraisal is exempt from the income tax. In addition, the reappraisal amount, net of the respective depreciations, is not computed in the tax base of the minimum presumed income tax.

The reappraisal is carried out by applying a reappraisal factor which stems from a table contained in Law No. 27,430, as from the year the assets were recorded. From the resulting value, the depreciations which may have been proper in accordance to the income tax law for the elapsed useful life of the assets, including the year of the option, are subtracted. In case of real estate property which is not considered as an inventory and depreciable personal property, the estimate may be done by an independent appraiser, as long as it does not exceed 50% of the amount which would result from the application of the appraisal factor. The reappraised assets will continue to be updated for tax purposes based on the change percentage in the domestic wholesale price index provided by INDEC, according to the tables prepared by the AFIP for such purpose. Thus, the depreciation to be deducted from the income tax will consist of: (i) the depreciation rate determined based on the original value, method and the asset’s useful life duly adopted to determine the income tax, plus (ii) the depreciation rate which corresponds to the amount of the reappraisal with the above-mentioned subsequent update. Should a reappraised asset be transferred during any of the two fiscal years immediately following the fiscal year taken as basis for the reappraisal, the computable cost will be subject to a penalty, which will consist in a 60% reduction of the updated residual amount, if the transfer were made in the first of those fiscal years, or in a 30% reduction, if it were made in the second of such fiscal years.

As of the date of the issuance of these financial statements, the Board of Directors is analyzing the financial effects of the tax reappraisal and it has not yet decided whether they will make use of the option established in Law No. 27,430.

The use of the option of the tax reappraisal implies waiving (i) carrying any legal or out-of-court procedure to claim, with tax purposes, the application of any nature of updating procedures as at the date of the first fiscal year ended after the date on which Law 27,430 came into force and (ii) waiving the actions and rights invoked in procedures already carried in respect of fiscal periods previously ended. In addition, the calculation of the depreciation of the reappraisal amount or its integration as a tax basis when determining the income tax will imply, due to the fiscal year on which such calculation is made, waiver to any update claim.

g) Advanced reimbursement of the technical credit balance of the value added tax

Law No. 27,430 establishes in the Value Added Tax Law a mechanism by which it is possible to require the reimbursement of the tax credits originated in the definite purchase, building, manufacturing, preparation or import of fixed assets (with the exception of vehicles) subject to depreciation in the income tax, which after six consecutive fiscal years, as from the year in which its consideration as tax credit was applicable, constitute the technical credit balance. If after 60 fiscal years as from the fiscal year immediately following the one where the reimbursement was made, the tax-payer had not generated an excess of tax debit over tax credits for a similar amount, the tax-payer must reimburse the not-applied excess plus the respective interest. These dispositions will apply to the accumulated balance originated in the charges whose right to consideration as tax credit is originated as from January 1st, 2018.

h) Employers’ contributions

A progressive increase of the employers’ contributions rate of 17% effective for those employers’ contributions accrued as from February 1st, 2018 is established. The increase schedule establishes that the rate will reach 17.50% in 2018, 18% in 2019, 18.50% in 2020 and 19% in 2021. As from January 1st, 2022, the employers’ contributions accrued will be finally settle at 19.50%.

In addition, from the tax basis on which it is proper to apply the rates indicated before, a non-taxable minimum will be deducted which will also be progressive and which will begin in 2018 with ARS 2,400 to finally reach ARS 12,000 as from January 1st, 2022. This non-taxable minimum will be updated as from January 2019 based on the domestic wholesale price index provided by INDEC.

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2. Basis of preparation of the consolidated financial statements (Policies)

12 Months Ended

Dec. 31, 2017

Basis Of Preparation Of Consolidated Financial Statements Policies

Classification of items as current and non-current

The Group classifies assets and liabilities in the consolidated statement of financial position as current and non-current. An entity shall classify an asset as current when:

– it expects to realize the asset, or intends to sell or consume it, in its normal operating cycle;

– it holds the asset primarily for the purpose of trading;

– it expects to realize the asset within twelve months after the reporting period; or

– the asset is cash or a cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

An entity shall classify a liability as current when:

– it is expected to be settled in normal operating cycle;

– It is held primarily for the purpose of trading;

– it is due to be settled within twelve months after the reporting period; or

– there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

All other liabilities are classified as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities, in all cases.

Fair value measurement

The Group measures certain financial instruments at their fair value at each reporting date. In addition, the fair value of financial instruments measured at amortized cost is disclosed in note 14.6.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

– in the principal market for the asset or liability, or

– in the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible to the Group. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

– Level 1 input data: quoted (unadjusted) prices in active markets for identical assets or liabilities.

– Level 2 input data: valuation techniques with input data other than the quoted prices included in Level 1, but which are observable for assets or liabilities, either directly or indirectly.

– Level 3 input data: valuation techniques for which input data are not observable for assets or liabilities.

Transactions and balances in foreign currency

Transactions in foreign currencies are recorded by the Group at the related functional currency rates prevailing at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rate of exchange ruling at the reporting period-end.

All differences are taken to consolidated statement of income under other operating income or expenses, or under finance income or expenses, depending on the nature of assets or liabilities generating those differences.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions.

Revenue recognition

2.2.4.1. Revenue from ordinary activities

Revenue from ordinary activities is recognized to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured, regardless of when the payment is being made by the customer. Revenue is measured at the fair value of the consideration received or receivable, considering the agreed-upon payment terms and excluding taxes or duties. The Group assesses its revenue arrangements against specific criteria in order to determine if it is acting as principal or agent.

Revenue from the sale of energy and power is calculated at the prices established in the relevant agreements or at the prices prevailing in the electricity market, pursuant to current regulations. They include revenues from energy and power provided and not billed, until after the end of the reporting period, valued at the prices defined in agreements or in the relevant regulations for each fiscal year.

2.2.4.2. Other income

Interest

For all financial assets and liabilities measured at amortized cost and interest bearing financial assets classified as available for sale, interest income or expense is recorded using the effective interest rate method, which is the rate that exactly discounts the estimated future cash payments or receipts through the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset or liability. In general, interest income and expense is included in finance income and expenses in the consolidated statement of income, respectively, unless they derive from operating items (such as trade and other receivables or trade and other payables); in that case, they are booked under other operating income and expenses, as the case may be.

Taxes

Current income tax and minimum presumed income tax

Current income tax assets and liabilities for the year are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute those amounts are those that are enacted or substantively enacted, at the end of the reporting period. The statutory tax rate for the Group for the fiscal year 2017 is 35% (See note 23.a).

Current income tax relating to items recognized directly in equity is recognized in equity and not in the consolidated statement of income.

Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Minimum presumed income tax is supplementary to income tax since while the latter is levied on taxable income for the reporting period, minimum presumed income tax is a minimum levy determined by applying the current 1% rate to the potential income of certain productive assets. Therefore, the Group’s tax obligation shall be the higher of these two taxes. However, should minimum presumed income tax exceed current income tax owed in a given tax year, such excess may be carried forward as payment on account of any income tax in excess of the minimum presumed income tax that could occur in any of the ten subsequent tax years.

Minimum presumed income tax credit is measured at non-discounted nominal value, as it is similar to a deferred income tax asset.

The carrying amount of minimum presumed income tax is reviewed at each reporting period date and reduced against income or loss for the period under income tax charge to the extent that its use as payment on account of income tax in future fiscal years is no longer probable. Minimum presumed income tax credit not recognized as credit or previously derecognized is reviewed as of each reporting period-end and it is recognized as an asset against income or loss for the period under income tax expenses to the extent that it is likely to be used as payment on account of income tax payable in future years.

On July 22, 2016, Law No. 27,260 was published, which, among other aspects, repealed the minimum presumed income tax for fiscal years beginning on or after January 1, 2019.

Deferred income tax

Deferred income tax is provided using the liability method on temporary differences at the end of the reporting period between the tax bases of assets and liabilities and their related carrying amounts.

Deferred income tax liabilities are recognized for all taxable temporary differences, except:

– where the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss;

– in respect of taxable temporary differences associated with investments in subsidiaries and associates, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred income tax assets are recognized for all deductible temporary differences and tax carry forwards losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and/or the tax losses carry forward can be utilized, except:

– where the deferred income tax asset arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss;

– in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred income tax assets are recognized only to the extent that it is probable that the deductible temporary differences will reverse in the foreseeable future and taxable profit will be available against which those differences can be utilized.

The carrying amount of deferred income tax assets is reviewed at each reporting period date and reduced against income or loss for the period or other comprehensive income, as the case may be, to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized (recovered). Unrecognized deferred income tax assets are reassessed at each reporting period date and are recognized with a charge to income or other comprehensive income for the period, as the case may be, to the extent that it has become probable that future taxable profits will allow the deferred income tax asset not previously recognized to be recovered.

Deferred income tax assets and liabilities are measured at undiscounted nominal value at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting period date.

Deferred income tax relating to items recognized outside profit or loss is recognized outside profit or loss. Deferred income tax items are recognized in correlation to the underlying transactions either in other comprehensive income or directly in equity.

Deferred income tax assets and deferred income tax liabilities are offset if a legally enforceable right exists to set off current income tax assets and liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority.

Other taxes related to sales and to bank account transactions

Revenues from recurring activities, expenses incurred and assets are recognized excluding the amount of sales tax, as in the case of value-added tax or turnover tax, or the tax on bank account transactions, except:

– where the tax incurred on a sale or on a purchase of assets or services is not recoverable from the taxation authority, in which case the sales tax is recognized as part of the cost of acquisition of the asset or as part of the expense item as the case may be;

– receivables and payables are stated including value-added tax.

The charge for the tax on bank account transactions is presented in the administrative and selling expenses line within the consolidated statement of income.

The net amount of the tax related to sales and to bank account transactions recoverable from, or payable to, the taxation authority is included as a non-financial asset or liability, as the case may be.

Property, plant and equipment

Property, plant and equipment is stated at cost, net of accumulated depreciation and/or accumulated impairment losses, if any.

When significant parts of property, plant and equipment are required to be replaced at intervals, the Group derecognizes the replaced part and recognizes the new part with its own associated useful life and depreciation. Likewise, when a major maintenance is performed, its cost is recognized as a replacement if the conditions for the recognition thereof as an asset are met. All other regular repair and maintenance costs are recognized in the consolidated statement of income as incurred.

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use are capitalized as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

Electric power facilities and materials and spare parts related to the Puerto Combined Cycle plant are depreciated on a unit-of-production basis.

Electric power facilities related to the Luján de Cuyo plant are depreciated on a straight-line basis over the total useful lives estimated.

Electric power facilities and auxiliary equipment of Piedra del Águila hydroelectric power plant are depreciated on a straight-line basis over the remaining life of the concession agreement of the mentioned power plant.

The depreciation of the remaining property, plant and equipment is calculated on a straight-line basis over the total estimated useful lives of the assets as follows:

– Buildings: 5 to 50 years.

– Lands are not depreciated.

– Material and spare parts: based on the useful life of related machinery and equipment to be replaced.

– Furniture, fixtures and equipment: 5 to 10 years.

– Others:3 to 5 years.

An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the consolidated statement of income when the asset is derecognized.

The residual values, useful lives and methods of depreciation are reviewed at each reporting period end and adjusted prospectively, if appropriate.

The amount of borrowing costs capitalized during the year ended December 31, 2017 was 69,373, related to expenditures for our La Castellana and Achiras wind projects. The rate used to determine the amount of borrowing costs eligible for capitalization is the effective interest rate of the specific borrowings.

Intangible assets

Intangible assets acquired separately are measured on initial recognition at acquisition cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization (if they are considered as having finite useful lives) and accumulated impairment losses, if any.

The useful lives of intangible assets are assessed as either finite or indefinite. The useful lives of the intangible assets recognized by the Group are finite.

Intangible assets with finite useful lives are amortized over their useful economic lives. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of the asset is accounted for by changing the amortization period or method, as appropriate, and are treated prospectively as changes in accounting estimates. The amortization expense on intangible assets with finite lives is recognized in the consolidated statement of income in the expense category consistent with the function of the intangible assets. The Group’s intangible assets are described in note 13.

Impairment of property, plant and equipment and intangible asset

The Group assesses at each reporting period-end whether there is an indication that an individual component or a group of property, plant and equipment and/or intangible assets with finite useful lives may be impaired. If any indication exists, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of the fair value less costs to sell that asset, and its value-in-use. That amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets; in which case, the cash flows of the group of assets that form part of the cash-generating unit (“CGU”) to which they belong are taken.

Where the carrying amount of an individual asset or CGU exceeds its recoverable amount, the individual asset or CGU, as the case may be, is considered impaired and is written down to its recoverable amount.

In assessing value in use of an individual asset or CGU, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the individual asset or CGU, as the case may be.

In determining fair value less costs to sell, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used. These calculations are verified by valuation multiples, quoted values for similar assets on active markets and other available fair value indicators, if any.

The Group bases its impairment calculation on detailed budgets and forecast calculations which are prepared separately for each of the Group’s CGU to which the individual assets are allocated. These detailed budgets and forecast calculations generally cover a five-year period. For longer periods, a long-term growth rate is calculated and applied to project future cash flows after the fifth year.

Impairment losses of continuing operations are recognized in the consolidated statement of income in those expense categories consistent with the function of the impaired asset generally in the cost of sales or other operating expenses.

In addition, for the assets for which an impairment loss had been booked, as of each reporting period-end, an assessment is made whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased.

A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the individual assets or CGU’s recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset or CGU does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of the related depreciation or amortization, had no impairment loss been recognized for the asset or CGU in prior periods. Such reversal is recognized in the statement of income in the same line in which the related impairment charge was previously recognized (generally under the cost of sales or other operating expenses), unless the asset is carried at a revalued amount, in which case, the reversal is treated as a revaluation increase.

During the years ended December 31, 2017, 2016 and 2015 no impairment charge or reversal of impairment charges was recognized.

Financial instruments. Presentation, recognition and measurement

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

2.2.9.1. Financial assets

Initial recognition and subsequent measurement

Financial assets subject to IAS 39 are classified, at initial recognition, as financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, available-for-sale financial assets, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The Group determines the classification of financial assets at initial recognition.

All financial assets are recognized initially at fair value plus, in the case of financial assets recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.

For purposes of subsequent measurement, financial assets are classified in four categories:

– Financial assets at fair value through profit or loss;

– Loans and receivables;

– Held-to-maturity investments; and

– Available-for-sale financial assets.

The Group’s financial assets include cash and cash equivalents, trade and other receivables, foreign currency forward contracts, mutual funds and investments in quoted debt securities.

The subsequent measurement of financial assets depends on their classification at initial recognition, as described below:

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets held for trading and financial assets designated upon initial recognition at fair value through profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. This category includes derivative financial assets that are not designated as effective hedging instruments as defined by IAS 39.

Financial assets at fair value through profit and loss are carried in the statement of financial position at fair value with changes in fair value recognized in finance income (positive net changes in fair value) or finance costs (negative net changes in fair value) in the statement of income.

The Group periodically evaluates its financial assets held for trading, other than derivatives, to determine whether the intention to sell them in the near term is still appropriate. When the Group is unable to trade these financial assets due to inactive markets and its intention to sell them in the foreseeable future significantly changes, the Group may elect to reclassify these financial assets in rare circumstances. The reclassification of a financial asset designated as loans and receivables to available-for-sale or held to maturity depends on the nature of the asset. This evaluation does not affect any financial assets designated at fair value through profit or loss using the fair value option at designation, as these instruments may not be reclassified following initial recognition.

The financial assets at fair value through profit or loss include listed debt securities, foreign exchange forward contracts and mutual funds.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate method (EIR), less impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income or other operating income in the statement of income, depending on the nature of the asset giving rise to it. The losses arising from impairment are recognized in the statement of income in other operating expense.

The “Loans and receivables” account includes trade and other receivables.

Held-to-maturity investments

Non-derivative financial assets with fixed or determinable payments and fixed maturities are classified as held-to-maturity when the Group has the positive intention and ability to hold them to maturity. After initial measurement, held-to-maturity investments are measured at amortized cost using the effective interest method, less impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the statement of income. The losses arising from impairment are recognized in the statement of income in finance costs. The Group did not have any held-to-maturity investments during 2017 and 2016.

Available-for-sale financial assets

A financial asset is classified as available for sale if it is not included in any of the other three categories of financial assets.

Available-for-sale financial assets include mutual funds and debt securities. Debt securities and mutual funds in this category are those classified as available-for-sale and which are intended to be held for an indefinite period of time and which may be sold in response to needs for liquidity or in response to changes in the market conditions.

After initial measurement, available-for-sale financial assets are subsequently measured at fair value, and the unrealized gains or losses are recognized as other comprehensive income in the accumulated other comprehensive income (loss) reserve until the investment is derecognized. Upon derecognition, the cumulative gain or loss is recognized as finance income or finance costs, or determined to be impaired, at which time the cumulative loss is reclassified to the statement of income under finance costs, as the case may be, and removed from the accumulated other comprehensive income (loss) reserve. Interest earned on investments in available-for-sale government securities is measured through the effective interest rate method and recognized as finance income in the statement of income.

The Group regularly evaluates its available-for-sale financial assets to determine whether the ability and positive intention to sell them in the near term is still appropriate. When the Group is unable to trade these financial assets due to inactive markets and its intention to sell them in the foreseeable future significantly changes, the Group may elect to reclassify these financial assets in rare circumstances. Reclassification to loans and receivables is permitted when the financial assets meet the conditions and definition of loans and receivables provided for by IAS 39 and the Group has the positive intent and ability to hold these assets for the foreseeable future or until maturity. Reclassification to the held-to-maturity category is permitted only when the Group has the ability and positive intention to hold the financial asset accordingly.

For a financial asset reclassified out of the available-for-sale category, the fair value carrying amount at the date of reclassification becomes its new amortized cost, and any previous gain or loss on that asset that has been recognized in equity is amortized to profit or loss over the remaining life of the investment using the EIR. Any difference between the new amortized cost and the expected cash flows is also amortized over the remaining life of the asset using the EIR. If the asset is subsequently determined to be impaired, then the amount recorded in equity is reclassified to the statement of income.

Derecognition of financial assets

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognized; that is to say, it is deleted from the statement of financial position, when:

– the contractual rights to receive cash flows from the asset have expired;

– the contractual rights to receive cash flows from the asset have been transferred or an obligation has been assumed to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) all the risks and rewards of the asset have been transferred substantially, or (b) all the risks and rewards of the asset have neither been transferred nor retained substantially, but control of the asset has been transferred.

When the contractual rights to receive cash flows from an asset have been transferred or a pass-through arrangement has been entered into, but all of the risks and rewards of the asset have neither transferred nor retained substantially and no control of it has been transferred, such asset shall continue to be recognized to the extent of the Group’s continuing involvement in it. In this case, the Group shall also recognize the associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained.

Impairment of financial assets

The Group assesses at the end of each reporting period whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred ‘loss event’) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include, among others, indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganization and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as adverse changes in arrears or economic conditions that correlate with defaults.

Charges arising from the impairment of financial assets, net of related recoveries, are booked in the statement of income under finance costs and other operating expenses, depending on the nature of the asset from which they arise.

Financial assets carried at amortized cost

For financial assets carried at amortized cost, the Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Group determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognized are not included in a collective assessment of impairment.

If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the assets’ carrying amount and the present value of estimated future cash flows (excluding future expected credit losses that have not yet been incurred). The present value of the estimated future cash flows is discounted at the financial asset’s original effective interest rate. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate.

The asset carrying value is reduced through an impairment allowance account and the loss is recognized in the statement of income under finance costs or other operating expenses, depending on the nature of the asset that gave rise to it. Interest income continues to be accrued on the reduced carrying amount and is accrued using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. Interest income is recorded as part of finance income or other operating income in the statement of income, depending on the nature of the asset that gave rise to it.

Assets and the related allowance for impairment are written off when there is no realistic prospect of future recovery and all collateral has been realized or has been transferred to the Group. If, in a subsequent period, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognized, the previously recognized impairment loss is increased or reduced by adjusting the impairment allowance account. If a future write-off is later recovered, the recovery is credited to finance costs or other operating expenses in the statement of income, based on the nature of the asset that gave rise to it.

Available-for-sale financial investments

For available-for-sale financial investments, the Group assesses at the end of each reporting period whether there is objective evidence that an investment or a group of investments is impaired.

Regarding equity investments classified as AFS, objective evidence would include a significant or prolonged decline in the fair value of the investment below its cost. The investment is deemed to be “significant” with respect to the original cost of the investment and “prolonged” with respect to the period during which the fair value was below its original cost. Whenever there is evidence that there has been impairment in value, accumulated losses, measured as the difference between the acquisition cost and the current fair value, less any impairment loss previously recognized in the statement of income, are removed from other comprehensive income and recognized in the statement of income as finance costs. Impairment losses related to equity investments classified as available-for-sale are not reversed through profit or loss. After impairment was recognized, fair value increases are directly recognized under comprehensive income.

In the case of debt instrument investments classified as available-for-sale, the impairment is assessed and recognized based on the same criteria as financial assets carried at amortized cost. The amount recorded for impairment is the cumulative loss measured as the difference between the amortized cost and the current fair value, less any impairment loss previously recognized in the statement of income.

Future interest income continues to be accrued based on the reduced carrying amount of the asset, using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. The interest income is recorded as part of operating income in the statement of income. If, in a subsequent year, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognized in the statement of income, the impairment loss is reversed through the statement of income as finance cost.

2.2.9.2. Financial liabilities

Initial recognition and subsequent measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, or as derivatives designated as hedging instruments in an effective hedge ratio, as appropriate.

All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings carried at amortized cost, directly attributable transaction costs.

The Group’s financial liabilities include trade and other payables, bank overdrafts, borrowings received from CAMMESA and interest-accruing payables and loans.

The subsequent measurement of financial liabilities depends on their classification, as described below:

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss includes financial liabilities held for trading and financial liabilities designated upon initial recognition at fair value through profit or loss.

Financial liabilities are classified as held for trading if they are acquired for the purpose of selling in the near term. This category includes derivative financial liabilities payable by the Group that are not designated as hedging instruments in hedge relationships as defined by IAS 39. Separate derivatives are also classified as held for trading, unless they are designated as effective hedging instruments.

Gains or losses on liabilities held for trading are recognized in the statement of income as finance income or costs, as the case may be.

Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such only if they meet the criteria in IAS 39.

The Group has not designated any financial liabilities upon initial recognition as at fair value through profit or loss.

Other debts and borrowings

After initial recognition, interest bearing loans and borrowings are subsequently measured at amortized cost using the effective interest rate method. Gains and losses are recognized as finance costs in the statement of income when the liabilities are derecognized, as well as through the effective interest rate method (EIR) amortization process.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance costs in the statement of income.

Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognized as finance income or costs in the statement of income, as the case may be.

2.2.9.3. Offsetting financial assets and financial liabilities

Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position if, and only if, there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.

2.2.9.4. Financial assets and liabilities with related parties

Assets and liabilities with related parties are recognized initially at fair value plus directly attributable transaction costs. As long as credits and debts with related parties do not derive from arms-length transactions, any difference arising at the initial recognition between such fair value and the consideration given or received in return shall be considered as an equity transaction (capital contribution or payment of dividends, which will depend on whether it is positive or negative).

Following initial recognition, these receivables and payables are measured at their amortized cost through the EIR method. The EIR amortization is included in finance income or costs or other operating income or expenses in the statement of income, depending on the nature of the liability giving rise to it.

2.2.9.5. Derivative financial instruments and hedge accounting - Initial recognition and subsequent measurement

The derivative financial instruments used by the Group are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.

Any gains or losses arising from changes in the fair value of derivatives are taken directly to income or loss, except for the portion that meets requirements to be considered effective hedges, if applicable, which is recognized in other comprehensive income and later reclassified to income or loss when the hedge item affects income or loss.

The portion of the gain or loss on the hedging instrument that meets the requirements to be considered effective hedge is recognized in other comprehensive income, while any portion that does not meet the requirements to be considered effective hedge is recognized immediately in the statement of income as other financial income / expenses.

If the hedging instrument expires or is sold, terminated or exercised without replacement or rollover (as part of the hedging strategy), or if its designation as a hedge is revoked, or when the hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss previously recognized in other comprehensive income remains separately in equity until the expected transaction occurs or the foreign currency firm commitment is met.

As of December 31, 2015, the Group held derivative financial instruments mentioned in note 12.6 to these consolidated financial statements, which do not meet the requirements to be considered hedging instruments.

Inventories

Inventories are valued at the lower of acquisition cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale. Inventories balance is not higher than its net realizable value at the corresponding dates.

Cash and cash equivalents

Cash is deemed to include both cash fund and freely-available bank deposits on demand. Short-term deposits are deemed to include short-term investments with significant liquidity and free availability that, subject to no previous notice or material cost, may be easily converted into a specific cash amount that is known with a high degree of certainty upon the acquisition, are subject to an insignificant risk of changes in value, maturing up to three months after the date of the related acquisitions, and whose main purpose is not investment or any other similar purpose, but settling short-term commitments.

For the purpose of the consolidated statement of financial position and the consolidated statement of cash flows, cash and cash equivalents comprise cash at banks and on hand and short-term investments meeting the abovementioned conditions.

Interest paid is shown as financing activities and interest received from customers is shown as operating activities.

Provisions

Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of income under the item that better reflects the nature of the provision net of any reimbursement to the extent that the latter is virtually certain.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax market rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost in the statement of income.

– Provision for lawsuits and claims

In the ordinary course of business, the Group is exposed to claims of different natures (e.g., commercial, labor, tax, social security, foreign exchange or customs claims) and other contingent situations derived from the interpretation of current legislation, which result in a loss, the materialization of which depends on whether one more events occur or not. In assessing these situations, Management uses its own judgment and advice of its legal counsel, both internal and external, as well as the evidence available as of the related dates. If the assessment of the contingency reveals the likelihood of the materialization of a loss and the amount can be reliably estimated, a provision for lawsuits and claims is recorded as of the end of the reporting period.

Contingent liabilities

A contingent liability is: (i) a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity; or (ii) a present obligation that arises from past events but is not recognized because: (a) it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or (2) the amount of the obligation cannot be measured with sufficient reliability.

A contingent liability is not recognized in financial statements; it is reported in notes, unless the possibility of an outflow of resources to settle such liability is remote. For each type of contingent liability as of the relevant reporting period-end dates, the Group shall disclose (i) a brief description of the nature of the obligation and, if possible, (ii) an estimate of its financial impact; (iii) an indication of the uncertainties about the amount or timing of those outflows; and (iv) the possibility of obtaining potential reimbursements.

Contingent assets

A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity.

A contingent asset is not recognized in financial statements; it is reported in notes only where an inflow of economic benefits is probable. For each type of contingent asset as of the relevant reporting period-end dates, the Group shall disclose (i) a brief description of the nature thereof and, if possible, (ii) an estimate of its financial impact.

Employee benefits

Employee short-term benefits:

The Group recognizes short-term benefits to employees, such as salary, vacation pay, bonuses, among others, on an accrued basis and includes the benefits arising from collective bargaining agreements.

Post-employment employee long-term benefits:

The Group grants benefits to all trade-union employees when obtaining the ordinary retirement benefit under the Argentine Integrated Pension Fund System, based on multiples of the relevant employees’ salaries.

The amount recognized as a liability for such benefits includes the present value of the liability at the end of the reporting period, and it is determined through actuarial valuations using the projected unit credit method.

Actuarial gains and losses are fully recognized in other comprehensive income in the period when they occur and immediately allocated to unappropriated retained earnings (accumulated losses), and not reclassified to income in subsequent periods.

The Group recognizes the net amount of the following amounts as expense or income in the statement of income for the reporting year: (a) the cost of service for the current period; (b) the cost of interest; (c) the past service cost, and (d) the effect of any curtailment or settlement.

Other long-term employee benefits:

The Group grants seniority-based benefits to all trade-union employees when reaching a specific seniority, based on their normal salaries.

The amount recognized as liabilities for other long-term benefits to employees is the present value of the liability at the end of the reporting period. The Group recognizes the net amount of the following amounts as expense or income: (a) the cost of service for the current period; (b) the cost of interest; (c) actuarial income and loss, which shall be recognized immediately and in full; (d) the past service cost, which shall be recognized immediately and in full; and (e) the effect of any curtailment or settlement.

Share-based payments

The cost of share-based payments transactions that are settled with equity instruments of one of our subsidiaries is determined by the fair value at the date when the grant is made using an appropriate valuation model.

This cost is recognized in the consolidated financial statements under employee benefits expense, together with a corresponding total increase in non-controlling interest.

During the year ended December 31, 2017 the expense booked in the consolidated financial statements under employee benefits expense amounts to 2,942.

Investment in associates

The Group’s investments in associates are accounted for using the equity method. An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee, but is neither control nor joint control.

According to the equity method, investments in associates are originally booked in the statement of financial position at cost, plus (less) the changes in the Group’s ownership interests in the associates’ net assets subsequent to the acquisition date. If any, goodwill relating to the associate is included in the carrying amount of the investment and is neither amortized nor individually tested for impairment. If the cost of the investments is lower than the proportional share as of the date of acquisition on the fair value of the associate’s assets and liabilities, a gain is recognized in the period in which the investment was acquired.

The statement of income reflects the share of the results of operations of the associates adjusted on the basis of the fair values estimated as of the date on which the investment was incorporated. When there has been a change recognized directly in the equity of the associates, the Group recognizes its share of any changes and includes them, when applicable, in the statement of changes in equity.

The Group’s share of profit of an associate is shown in a single line on the main body of the consolidated statement of income. This share of profit includes income or loss after taxes of the associates.

The financial information of the associates is prepared for the same reporting period as the Group. When necessary, adjustments are made to bring the accounting policies of the associates in line with those of the Group.

After application of the equity method, the Group determines whether it is necessary to recognize impairment losses on its investment in its associates. At each reporting date, the Group determines whether there is objective evidence that the value of investment in the associates has been impaired. If such was the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the investment in the associates and its carrying value, and recognizes the loss as “Share of losses of an associate” in the statement of income.

Upon loss of significant influence over the associate, the Group measures and recognizes any retained investment at its fair value. If such was the case, any difference between the carrying amounts of the investment in the associate and the fair value on any retained investment, as well as the disposal proceeds, are recognized in the statement of income.

The information related to associates is included in note 3.

Information on operating segments

For management purposes, the Group is organized in three different business units to carry out its activities, as follows:

Electric power generation: through its own assets the Group is engaged in the production of electric power and its sale. This business unit does not include La Plata plant operations due to the sale of such facility (See note 22.8).

Natural gas transport and distribution: through its equity investees companies Distribuidora de Gas del Centro S.A. and Distribuidora de Gas Cuyana S.A. the Group is engaged in the natural gas distribution public sector service in the Cuyo and Centro regions of Argentina and it is also engaged in the natural gas transport sector service through its equity investee Company Transportadora de Gas del Mecrosur S.A.

Management and operations: through its equity investees Termoeléctrica José de San Martín S.A. and Termoeléctrica Manuel Belgrano S.A. and its subsidiary Central Vuelta de Obligado S.A. the Group is engaged in the management and operations of these thermal plants.

The Group has two reporting segments: production of electric power and natural gas transport and distribution. Management and operations activities are included in others, because the information is not material.

The financial performance of segments is evaluated based on net income and measured consistently with the net income disclosed in the financial statements (note 4).

Non-current assets held for sale and discontinued operations

The Group classifies non-current assets and disposal groups as held for sale if their carrying amounts will be recovered principally through a sale transaction or its distribution to the shareholders rather than through continuing use. Such assets are measured at the lower of their carrying amount and fair value less costs to sell. Costs to sell are the incremental costs directly attributable to the disposal of an asset (disposal group), excluding finance costs and income tax expense.

The criteria for held for sale classification is regarded as met only when the sale is highly probable and the asset or disposal group is available for immediate sale in its present condition. Actions required to complete the sale should indicate that it is unlikely that significant changes to the sale will be made or that the decision to sale will be withdrawn. Management must be committed to the plan to sell the asset and the sale expected to be completed within one year from the date of the classification.

Property, plant and equipment and intangible assets are not depreciated or amortized once classified as held for sale.

Assets and liabilities classified as held for sale are presented separately as current items in the consolidated statement of financial position.

A disposal group qualifies as discontinued operation if:

– It is a component of the Group that represents a cash generating unit or a group of cash generating units,

– it is classified as held for sale or as for distribution to equity holders, or it has already been disposed for distribution to the shareholders, and;

– it represents a separate major line of business or geographical area of operations or it is a subsidiary acquired exclusively with a view to resale.

Discontinued operations are excluded from the results of continuing operations and are presented as a single amount as income or loss after tax from discontinued operations in the consolidated statement of income.

Additional disclosures are provided in note 21. All other notes to the consolidated financial statements include amounts for continuing operations, unless indicated otherwise.

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3. Investment in associates (Tables)

12 Months Ended

Dec. 31, 2017

Investment In Associates Tables

Investments in associates

	12-31-2017	12-31-2016
	ARS 000	ARS 000
Termoeléctrica José de San Martin S.A.	25,671	19,576
Termoeléctrica Manuel Belgrano S.A.	28,744	25,236
Inversora de Gas Cuyana S.A.	217,380	82,183
Inversora de Gas Centro S.A.	254,813	101,740
Distribuidora de Gas del Centro S.A.	204,382	70,130
Transportadora de Gas del Mercosur S.A.	254,551	6,884
Others	105	1,263
	985,646	307,012

	2017	2016	2015
	ARS 000	ARS 000	ARS 000
Termoeléctrica José de San Martin S.A.	22,218	15,897	11,958
Termoeléctrica Manuel Belgrano S.A.	23,557	20,953	14,494
Inversora de Gas Cuyana S.A.	135,197	33,868	8,083
Inversora de Gas Centro S.A.	153,073	40,726	10,539
Distribuidora de Gas del Centro S.A.	134,252	28,582	5,444
Transportadora de Gas del Mercosur S.A.	247,667	-	-
Others	(963)	7,487	(7,128)
	715,001	147,513	43,390

Financial information of the investment in associates

Termoeléctrica José de San Martín SA

	12-31-2017	12-31-2016
	ARS 000	ARS 000
Current assets	140,389	118,198
Non-current assets	7,679	8,282
Current liabilities	(58,631)	(58,467)
Non-current liabilities	(6,291)	(4,609)
Net assets	83,146	63,404
Carrying amount of the investment	25,671	19,576

	2017	2016	2015
	ARS 000	ARS 000	ARS 000
Associate’s revenues and income
Revenues	244,628	182,796	140,019
Net income for the year	71,961	51,488	39,239
Share in the net income of associate	22,218	15,897	11,958

Termoeléctrica Manuel Belgrano SA

	12-31-2017	12-31-2016
	ARS 000	ARS 000
Current assets	142,969	128,127
Non-current assets	3,644	2,398
Current liabilities	(49,005)	(45,791)
Non-current liabilities	(4,725)	(3,186)
Net assets	92,883	81,548
Carrying amount of the investment	28,744	25,236

	2017	2016	2015
	ARS 000	ARS 000	ARS 000
Associate’s revenues and income
Revenues	257,407	205,218	148,945
Net income for the year	76,122	67,707	47,561
Share in the net income of associate	23,557	20,953	14,494

Inversora de Gas del Centro SA

	12-31-2017	12-31-2016
	ARS 000	ARS 000
Current assets	2,113,190	1,450,839
Non-current assets	911,271	1,300,375
Current liabilities	(1,692,212)	(2,151,646)
Non-current liabilities	(131,662)	(168,178)
Net assets	1,200,587	431,390
Less: non-controlling interests	(622,780)	(200,686)
	577,807	230,704
Carrying amount of the investment	254,813	101,740

	2017	2016	2015
	ARS 000	ARS 000	ARS 000
Associate’s income	332,931	70,744	9,388
Net income for the year	347,104	92,349	21,508
Share in net income of associate	153,073	40,726	10,539

Distribuidora de Gas del Centro SA

	12-31-2017	12-31-2016
	ARS 000	ARS 000
Current assets	1,632,747	1,375,072
Non-current assets	873,411	1,256,813
Current liabilities	(1,193,139)	(2,096,622)
Non-current liabilities	(124,752)	(127,530)
Net assets	1,188,267	407,733
Carrying amount of the investment	204,382	70,130

	2017	2016	2015
	ARS 000	ARS 000	ARS 000
Associate’s revenues and income
Revenues	3,656,921	2,239,906	770,342
Net income for the year	780,535	166,174	28,487
Share in net income of associate	134,252	28,582	5,444

Inversora de Gas Cuyana SA

	12-31-2017	12-31-2016
	ARS 000	ARS 000
Current assets	1,297,922	1,094,417
Non-current assets	719,515	995,997
Current liabilities	(884,304)	(1,533,812)
Non-current liabilities	(35,643)	(44,982)
Net assets	1,097,490	511,620
Less: non-controlling interests	(604,564)	(325,265)
	492,926	186,355
Carrying amount of the investment	217,380	82,183

	2017	2016	2015
	ARS 000	ARS 000	ARS 000
Associate’s revenues and income
Revenues	2,813,506	1,612,252	569,294
Net income for the year	306,569	76,798	6,349
Share in net income of associate	135,197	33,868	8,083

Transportadora de Gas del Mercosur S.A.

	2017
	ARS 000
Current assets	2,014,585
Non-current assets	150,681
Current liabilities	(892,510)
Net assets	1,272,756
Carrying amount of the investment	254,551
Associate´s revenues and income
Revenues	683
Net income for the year	1,238,335
Share in net income of the associate	247,667

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4. Operating segments (Tables)

12 Months Ended

Dec. 31, 2017

Operating Segments Tables

Operating segments

		Equity investees
2017	Electric Power Generation	Natural Gas Transport and Distribution	Others	Adjustments and Eliminations	Total
	ARS 000	ARS 000	ARS 000	ARS 000	ARS 000
Revenues	5,956,596	6,621,959	502,035	(7,123,994)	5,956,596
Cost of sales	(2,742,147)	(4,366,884)	(322,057)	4,688,941	(2,742,147)
Administrative and selling expenses	(651,168)	(1,188,068)	-	1,188,068	(651,168)
Other operating income	640,480	2,232,236	-	(2,232,236)	640,480
Other operating expenses	(92,497)	-	-	-	(92,497)
Operating income	3,111,264	3,299,243	179,978	(3,479,221)	3,111,264
Other (expenses) income	(817,307)	(708,732)	(35,162)	1,458,895	(102,306)
Net income for the segment	2,293,957	2,590,511	144,816	(2,020,326)	3,008,958
Share in the net income for the segment	2,293,957	670,189	44,812	-	3,008,958

		Equity investees
2016	Electric Power Generation	Natural Gas Transport and Distribution	Others	Adjustments and Eliminations	Total
	ARS 000	ARS 000	ARS 000	ARS 000	ARS 000
Revenues	3,562,721	3,852,158	388,014	(4,240,172)	3,562,721
Cost of sales	(2,069,752)	(3,166,223)	(243,796)	3,410,019	(2,069,752)
Administrative and selling expenses	(445,412)	(603,502)	-	603,502	(445,412)
Other operating income	1,137,736	-	-	-	1,137,736
Other operating expenses	(84,845)	125,878	-	(125,878)	(84,845)
Operating income	2,100,448	208,311	144,218	(352,529)	2,100,448
Other (expenses) income	(917,099)	(69,174)	(24,249)	240,936	(769,586)
Net income for the segment	1,183,349	139,137	119,969	(111,593)	1,330,862
Share in the net income for the segment	1,183,349	103,176	44,337	-	1,330,862

		Equity investees
2015	Electric Power Generation	Natural Gas Transport and Distribution	Others	Adjustments and Eliminations	Total
	ARS 000	ARS 000	ARS 000	ARS 000	ARS 000
Revenues	2,654,180	1,339,636	338,303	(1,677,939)	2,654,180
Cost of sales	(1,397,365)	(1,064,934)	(208,935)	1,273,869	(1,397,365)
Administrative and selling expenses	(371,485)	(421,764)	(5,852)	427,616	(371,485)
Other operating income	735,517	17,510	-	(17,510)	735,517
Other operating expenses	(52,702)	-	-	-	(52,702)
Operating income	1,568,145	(129,552)	123,516	6,036	1,568,145
Other (expenses) income	(401,396)	148,659	587	(105,856)	(358,006)
Net income for the segment	1,166,749	19,107	124,103	(99,820)	1,210,139
Share in the net income for the segment	1,166,749	24,066	19,324	-	1,210,139

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5. Revenues (Tables)

12 Months Ended

Dec. 31, 2017

Revenues Tables

Revenues

	2017	2016	2015
	ARS 000	ARS 000	ARS 000
Electric power sold on the Spot market (Resolution 19 and 95/2013, as amended)	5,175,825	3,114,552	2,317,042
Electric power sold on the Spot market (prior to Resolution 95/2013)	472,447	231,192	189,487
Sales under contracts	167,124	107,873	96,082
Steam sales	141,200	108,308	43,331
Rendering of services	-	796	8,238
	5,956,596	3,562,721	2,654,180

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6. Operating expenses (Tables)

12 Months Ended

Dec. 31, 2017

Operating Expenses Tables

Cost of sales

	2017	2016	2015
	ARS 000	ARS 000	ARS 000
Inventories at beginning of each year	147,670 (1)	94,179 (1)	78,173
Purchases and operating expenses for each year:
Purchases	512,570	336,190	152,883
Operating expenses (note 6.2)	2,240,400	1,787,053	1,260,488
	2,752,970	2,123,243	1,413,371
Inventories at the end of each year	(158,493)	(147,670) (1)	(94,179) (1)
	2,742,147	2,069,752	1,397,365

(1) Inventories as of December 31, 2016 and 2015 do not include inventories stock from discontinued operations.

Operating, administrative and selling expenses

	2017		2016		2015
Accounts	Operating expenses	Administrative and selling expenses	Operating expenses	Administrative and selling expenses	Operating expenses	Administrative and selling expenses
	ARS 000	ARS 000	ARS 000	ARS 000	ARS 000	ARS 000
Compensation to employees	878,089	327,983	688,891	219,629	496,273	191,172
Other long-term employee benefits	26,270	4,211	22,859	4,039	20,828	3,680
Depreciation of property, plant and equipment	277,445	111	200,703	-	156,559	-
Amortization of intangible assets	31,114	-	31,134	-	26,816	-
Purchase of energy and power	78,781	-	22,797	-	36,124	-
Fees and compensation for services	194,120	168,624	147,529	66,014	89,578	45,629
Maintenance expenses	363,199	25,178	352,914	41,547	197,581	38,883
Consumption of materials and spare parts	112,956	-	140,329	-	78,725	-
Insurance	139,473	1,794	124,956	550	67,009	256
Levies and royalties	133,212	-	50,759	-	89,151	-
Taxes and assessments	3,664	29,399	2,755	24,270	464	29,529
Tax on bank account transactions	-	84,232	-	77,954	-	55,084
Corporate expenses	-	-	-	4,685	-	-
Others	2,077	9,636	1,427	6,724	1,380	7,252
Total	2,240,400	651,168	1,787,053	445,412	1,260,488	371,485

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7. Other income and expenses (Tables)

12 Months Ended

Dec. 31, 2017

Other Income And Expenses Tables

Other operating income

	2017	2016	2015
	ARS 000	ARS 000	ARS 000
Interest earned from customers	270,715	108,423	41,607
Receivables and payables foreign exchange difference	76,475	137,359	336,641
Discount of trade and other receivables and payables, net (1)	51,838	718,114	118,560
Recovery of insurance	237,577	155,013	145,569
Recovery of turnover tax	-	-	77,833
Others	3,875	18,827	15,307
	640,480	1,137,736	735,517

(1) In December 2015, Decree No. 134/2015 was enacted declaring the state of emergency of the Argentine electricity sector until December 31, 2017. Pursuant to such decree, the Ministry of Energy was entrusted with the duties of developing and putting in place an action plan in connection with the electricity generation, transportation and distribution segments in order to improve the quality and security of electricity supply and guarantee the provision of this public service under suitable technical and economic conditions.

Other operating expenses

	2017	2016	2015
	ARS 000	ARS 000	ARS 000
Charge related to the provision for lawsuits and claims	(69,197)	(86,644)	(52,702)
Impairment of material and spare parts	(23,300)	-	-
Others	-	1,799	-
	(92,497)	(84,845)	(52,702)

Finance income

	2017	2016	2015
	ARS 000	ARS 000	ARS 000
Interest earned	148,485	51,774	31,871
Net income on financial assets at fair value through profit or loss	75,525	46,827	30,091
Foreign exchange differences	45,531	94,920	233,301
Net income on disposal of available-for-sale financial assets (1)	662,686	227,467	67,100
	932,227	420,988	362,363

(1) Net of 52,417 corresponding to turnover tax for the year ended December 31, 2017.

Finance expenses

	2017	2016	2015
	ARS 000	ARS 000	ARS 000
Interest on loans and borrowings	(626,981)	(529,999)	(253,316)
Net foreign exchange differences	(64,983)	(75,471)	124,577
Others	(5,674)	(14,978)	(9,569)
	(697,638)	(620,448)	(138,308)

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8. Movements in other comprehensive income from available-for-sale financial assets (Tables)

12 Months Ended

Dec. 31, 2017

Movements In Other Comprehensive Income From Available-for-sale Financial Assets Tables

Movements in other comprehensive income from available-for-sale assets

	2017	2016	2015
	ARS 000	ARS 000	ARS 000
Available-for-sale financial assets
Gains for the year	272,239	554,330	274,165
Reclassification adjustments to income	(715,103)	(227,467)	(67,100)
	(442,864)	326,863	207,065

XML

9. Income tax (Tables)

12 Months Ended

Dec. 31, 2017

Income Tax Tables

Income tax expense

	2017	2016	2015
	ARS 000	ARS 000	ARS 000
Current income tax
Income tax charge for the year	(1,350,540)	(485,279)	(462,872)
Adjustment related to current income tax for the prior year	32,561	938	2,845
Deferred income tax
Related to the net variation in temporary differences	266,083	(233,298)	(165,424)
Income tax	(1,051,896)	(717,639)	(625,451)

Income tax charged to other comprehensive income

	2017	2016	2015
	ARS 000	ARS 000	ARS 000
Income tax for the year related to items charged or credited directly to other comprehensive income
Deferred income tax income (expense)	154,268	(107,194)	(71,573)
Income tax credited (charged) to other comprehensive income	154,268	(107,194)	(71,573)

Income tax reported in the consolidated statement of income

	2017	2016	2015
	ARS 000	ARS 000	ARS 000
Income before income tax from continued operations	4,060,854	2,048,501	1,835,590
Income before income tax from discontinued operations	749,198	673,807	202,860
Income before income tax	4,810,052	2,722,308	2,038,450
At statutory income tax rate of 35%	(1,683,518)	(952,808)	(713,458)
Share of the profit of associates	101,409	12,767	15,187
Adjustment related to current income tax for the prior year	32,561	938	2,845
Effect related to statutory income tax rate change (1)	220,956	-	-
Others	12,539	(14,369)	(1,026)
	(1,316,053)	(953,472)	(696,452)
Income tax attributable to continuing operations	(1,051,896)	(717,639)	(625,451)
Income tax attributable to discontinuing operations	(264,157)	(235,833)	(71,001)
	(1,316,053)	(953,472)	(696,452)

(1) Effect of applying the changes in the enacted tax rate established by Law 27,430 as described in note 23.a) to the deferred assets and liabilities, according to its expected term of realization and settlement, respectively.

Deferred income tax assets and liabilities

	Consolidated statement of financial position		Consolidated statement of income from continuing operations and statement of other comprehensive income
	12-31-2017	12-31-2016	2017	2016	2015
	ARS 000	ARS 000	ARS 000	ARS 000	ARS 000
Trade receivables	(425,442)	(661,748)	217,170	(131,465)	142
Provision for plant dismantling	39,310	43,820	-	-	-
Other financial assets	(37,658)	(190,315)	152,657	9,931	(184,421)
Employee benefit liability	32,089	30,697	1,627	9,499	4,587
Receivables and other non-financial liabilities	(6,249)	(5,826)	(423)	(248,723)	(101,037)
Provisions and other	44,910	30,986	13,872	23,314	27,874
Investments in associates	(138,266)	(34,522)	(103,744)	(34,522)	-
Property, plant and equipment	(224,175)	(322,012)	93,612	25,378	11,375
Intangible assets	(14,198)	(27,561)	13,363	6,096	4,483
Tax loss carry-forward	32,217	-	32,217	-	-
Deferred income tax income (expense)			420,351	(340,492)	(236,997)
Deferred income tax liabilities, net	(697,462)	(1,136,481)

Deferred income tax assets and liabilities in the statements of financial position

	Consolidated statements of financial position
	2017	2016
	ARS 000	ARS 000
Deferred income tax assets
Continuing operations	107,544	105,773
Discontinued operations	41,023	-
Deferred income tax liabilities
Continuing operations	(811,288)	(1,242,254)
Discontinued operations	(34,741)	-
	(697,462)	(1,136,481)

Reconciliation of deferred income tax assets and liabilities

	12-31-2017	12-31-2016
	ARS 000	ARS 000
Amount at beginning of year	(1,136,481)	(770,737)
Deferred income tax recognized in profit or loss and in other comprehensive income during the year - continuing operations	420,351	(335,850)
Discontinued operations	(467)	-
Reclassification related to current income tax for the prior year	19,135	(29,894)
Amount at end of year	(697,462)	(1,136,481)

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10. Earnings per share (Tables)

12 Months Ended

Dec. 31, 2017

Earnings Per Share Tables

Number of shares used in the earnings per share

	2017	2016	2015
	ARS 000	ARS 000	ARS 000
Income attributable to equity holders of the parent
Continuing operations	3,022,754	1,330,869	1,210,139
Discontinued operations	485,041	437,974	131,859
	3,507,795	1,768,843	1,341,998
Weighted average number of ordinary shares	1,505,695,134	1,505,695,134	1,505,695,134

Income attributable to equity holders of the parent from discontinued operations

	2017	2016	2015
	ARS 000	ARS 000	ARS 000
Income attributable to equity holders of the parent from discontinued operations	485,041	437,974	131,859

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11. Inventories (Tables)

12 Months Ended

Dec. 31, 2017

Inventories Tables

Inventories

	2017	2016
	ARS 000	ARS 000
Non-current:
Materials and spare parts	102,384	61,711
Provision for impairment in value	(54,181)	(30,881)
	48,203	30,830
Current:
Materials and spare parts	101,016	128,691
Fuel oil	7,461	7,461
Diesel oil	1,813	1,813
	110,290	137,965

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12. Property, plant and equipment (Tables)

12 Months Ended

Dec. 31, 2017

Property Plant And Equipment Tables

Property, plant and equipment

	Lands and buildings	Electric power facilities	Gas turbines (1)	Construction in progress	Other	Total
Cost	ARS 000	ARS 000	ARS 000	ARS 000	ARS 000	ARS 000
01-01-2016	158,939	3,878,409	299,285	-	211,222	4,547,855
Additions	206,152	468,519	384,129	-	11,401	1,070,201
Disposals	-	(22,375)	-	-	(3,175)	(25,550)
12-31-2016	365,091	4,324,553	683,414	-	219,448	5,592,506
Additions	2,400	168,791	883,772	2,482,528	21,234	3,558,725
Transfers	(1,568)	(309,796)	1,246,266	257,643	(25,749)	1,166,796
Disposals	-	-	-	-	(1,104)	(1,104)
12-31-2017	365,923	4,183,548	2,813,452	2,740,171	213,829	10,316,923

	Lands and buildings	Electric power facilities	Gas turbines	Construction in progress	Other	Total
Depreciation	ARS 000	ARS 000	ARS 000	ARS 000	ARS 000	ARS 000
01-01-2016	39,356	2,394,358	-	-	145,993	2,579,707
Depreciation for the year	2,180	188,833	-	-	10,852	201,865
Disposals	-	-	-	-	(605)	(605)
12-31-2016	41,536	2,583,191	-	-	156,240	2,780,967
Depreciation for the year	2,162	264,069	-	-	12,448	278,679
Transfers	(1,506)	(167,895)	-	-	(4,505)	(173,906)
Disposals	-	-	-	-	(545)	(545)
12-31-2017	42,192	2,679,365	-	-	163,638	2,885,195
Net book value:
12-31-2017	323,731	1,504,183	2,813,452	2,740,171	50,191	7,431,728
12-31-2016	323,555	1,741,362	683,414	-	63,208	2,811,539

(1) As of December 31, 2017, the Company acquired gas turbines, one of which will be used for new generation capacity in the project called “Terminal 6 San Lorenzo” while the other turbines can be used for other projects, in future bidding processes that may be called by the Argentine government.

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13. Intangible assets (Tables)

12 Months Ended

Dec. 31, 2017

Intangible Assets Tables

Intangible assets

	Concession right	Other	Total
Cost	ARS 000	ARS 000	ARS 000
12-31-2016	724,883	98,222	823,105
12-31-2017	724,883	98,222	823,105
Amortization
01-01-2016	475,970	70,444	546,414
Amortization of the year	31,114	9,047	40,161
12-31-2016	507,084	79,491	586,575
Amortization for the year	31,114	17,583	48,697
12-31-2017	538,198	97,074	635,272
Net book value
12-31-2017	186,685	1,148	187,833
12-31-2016	217,799	18,731	236,530

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14. Financial assets and liabilities (Tables)

12 Months Ended

Dec. 31, 2017

Financial Assets And Liabilities Tables

Trade and other receivables

	12-31-2017	12-31-2016
	ARS 000	ARS 000
Non-current:
Trade receivables - CAMMESA	2,591,913	3,544,354
Upfront payments of associates acquisition	43	43
Receivables from associates	10,257	8,732
	2,602,213	3,553,129

Current:
Trade receivables - CAMMESA	3,625,863	1,807,721
Trade receivables - YPF SA	136,696	309,837
Recovery of insurance	21,292	16,646
Trade receivables - Large users	41,414	25,384
Receivables from associates	7,267	5,487
Receivables from other related parties	-	11
Other receivables	56,284	52,200
	3,888,816	2,217,286
Allowance for doubtful accounts - note 14.1.1.	(1,751)	(1,751)
	3,887,065	2,215,535

Trade and other receivables due

			Past due
	Total	To due	<90 days	90-180 days	180-270 days	270-360 days	>360 days
	ARS 000	ARS 000	ARS 000	ARS 000	ARS 000	ARS 000	ARS 000
12-31-2017	6,489,278	6,448,858	35,045	-	1,877	-	3,498
12-31-2016	5,768,664	5,043,085	725,579	-	-	-	-

Allowance for doubtful accounts

	12-31-2017					12-31-2016
Item	At beginning		Increases	Recovery	At end	At end
Allowance for doubtful accounts - Trade and other receivables		1,751	-	-	1,751	1,751
Total		1,751	-	-	1,751	1,751

Trade and other payables

	12-31-2017	12-31-2016
	ARS 000	ARS 000
Current:
Trade payables	1,006,191	652,349
Insurance payable	1,936	685
Payables to associates	9,179	2,564
	1,017,306	655,598

Other loans and borrowings

	12-31-2017	12-31-2016
	ARS 000	ARS 000
Non-current
Borrowings from Banco de Galicia y Buenos Aires S.A.	1,478,729	-

	12-31-2017	12-31-2016
	ARS 000	ARS 000
Current
Short term bank loans	233	294,692
Borrowings from Banco de Galicia y Buenos Aires S.A.	505,371	998,486
	505,604	1,293,178

Borrowings from CAMMESA

	12-31-2017	12-31-2016
	ARS 000	ARS 000
Non-current:
CAMMESA loans	1,055,558	1,284,783
Current:
CAMMESA loans	970,980	420,672
CAMMESA prepayments	782,058	627,050
	1,753,038	1,047,722

Maturity of borrowings from CAMMESA

	To due
Total	2018	2019	2020	2021	2022
ARS 000	ARS 000	ARS 000	ARS 000	ARS 000	ARS 000
2,808,596	1,753,038	535,673	295,369	221,504	3,012

Changes in liabilities arising from financing activities

	01-01-2017	Payments	Non-cash transactions	Disbursements	Other	12-31-2017
	ARS 000	ARS 000	ARS 000	ARS 000	ARS 000	ARS 000
Non-current liabilities
Other loans and borrowings	-	-	-	1,395,508	83,221	1,478,729
Borrowings from CAMMESA	1,284,783	-	-	403,427	(632,652)	1,055,558
Current liabilities
Other loans and borrowings	1,293,178	(1,349,934)	-	476,386	85,974	505,604
Borrowings from CAMMESA	1,047,722	-	(522,215)	-	1,227,531	1,753,038

Fair value of financial assets and liabilities

	Carrying amount		Fair value
	12-31-2017	12-31-2016	12-31-2017	12-31-2016
	ARS 000	ARS 000	ARS 000	ARS 000
Financial assets
Trade and other receivables	6,489,278	5,768,664	6,489,278	5,768,664
Other financial assets	1,110,728	1,796,756	1,110,728	1,796,756
Cash and cash equivalents	88,633	30,008	88,633	30,008
Total	7,688,639	7,595,428	7,688,639	7,595,428

	Carrying amount		Fair value
	12-31-2017	12-31-2016	12-31-2017	12-31-2016
	ARS 000	ARS 000	ARS 000	ARS 000
Financial liabilities
Other loans and borrowings	1,984,333	1,293,178	1,984,333	1,293,178
Borrowings from CAMMESA	2,808,596	2,332,505	2,808,596	2,332,505
Total	4,792,929	3,625,683	4,792,929	3,625,683

Fair value measurement hierarchy

	Fair value measurement using:
12-31-2017	Total	Level 1	Level 2	Level 3
	ARS 000	ARS 000	ARS 000	ARS 000
Assets measured at fair value
Financial assets at fair value through profit or loss:
Mutual funds	556,138	556,138	-	-
Argentine Central Bank bills	404,570	404,570	-	-
Available-for-sale financial assets:
Mutual funds	150,020	150,020	-	-
Total financial assets measured at fair value	1,110,728	1,110,728	-	-

	Fair value measurement using:
12-31-2016	Total	Level 1	Level 2	Level 3
	ARS 000	ARS 000	ARS 000	ARS 000
Assets measured at fair value
Financial assets at fair value through profit or loss:
Mutual funds	104,177	104,177	-	-
Corporate bonds	1,854	1,854	-	-
Available-for-sale financial assets:
Mutual funds	1,690,725	1,690,725	-	-
Total financial assets measured at fair value	1,796,756	1,796,756	-	-

Other financial assets

	12-31-2017	12-31-2016
	Book value	Book value
	ARS 000	ARS 000
Available-for-sale financial assets at fair value through other comprehensive income
Mutual funds	150,020	1,690,725
	150,020	1,690,725
Financial assets through profit or loss
Argentina Central Bank bills	404,570	-
Mutual funds	556,138	104,177
Corporate bonds	-	1,854
	960,708	106,031
	1,110,728	1,796,756

Financial assets and liabilities in foreign currency

	12-31-2017				12-31-2016
Account	Currency and amount (in thousands)		Effective exchange rate (1)	Book value	Currency and amount (in thousands)		Book value
				ARS 000			ARS 000
NON-CURRENT ASSETS
Trade and other receivables	USD	24,648	18.5490	457,193	USD	44,490	702,495
				457,193			702,495
CURRENT ASSETS
Cash and cash equivalents	USD	4,313	18.5490	80,002	USD	1,502	23,717
	EUR	1	22.2829	22	EUR	2	33
Trade and other receivables	USD	29,541	18.5490	547,954	USD	41,410	653,871
				627,978			677,621
				1,085,171			1,380,116
NON-CURRENT LIABILITIES
Other loans and borrowings	USD	50,690	18.6490	945,326	USD	-	-
				945,326			-
CURRENT LIABILITIES
Other loans and borrowings	USD	27,099	18.6490	505,371	USD	62,837	998,486
Trade and other payables	USD	31,243	18.6490	582,651	USD	14,087	223,842
	EUR	136	22.4497	3,053	EUR	59	989
				1,091,075			1,223,317
				2,036,401			1,223,317

USD: US dollar.

EUR: Euro.

At the exchange rate prevailing as of December 31, 2017 as per Banco de la Nación Argentina.

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15. Non-financial assets and liabilities (Tables)

12 Months Ended

Dec. 31, 2017

Non-financial Assets And Liabilities Tables

Other non-financial assets

	12-31-2017	12-31-2016
	ARS 000	ARS 000
Non-current:
Tax credits	8,213	1,811
Prepayments to vendors	4,508	4,472
Upfront payments of property, plant and equipment purchases	-	1,460,264
	12,721	1,466,547
Current:
Upfront payments of inventories purchases	41,596	46,205
Prepayment expenses	87,273	66,025
Tax credits	335,487	17,840
Other	6,539	7,040
	470,895	137,110

Other non-financial liabilities

	12-31-2017	12-31-2016
	ARS 000	ARS 000
Non-current:
VAT payable	448,712	613,363
Tax on bank account transactions payable	19,983	21,799
	468,695	635,162
Current:
VAT payable	569,005	385,846
Turnover tax payable	6,335	8,982
Income tax withholdings payable	26,312	19,666
Concession fees and royalties	17,102	8,767
Tax on bank account transactions payable	39,557	41,096
Other	1,357	12,428
	659,668	476,785

Compensation and employee benefits liabilities

	12-31-2017	12-31-2016
	ARS 000	ARS 000
Non-current:
Employee long-term benefits	113,097	87,705

Defined benefit obligation

	12-31-2017	12-31-2016
	ARS 000	ARS 000
Benefit plan expenses
Cost of interest	20,857	22,859
Cost of service for the current year	6,338	4,039
Past service cost	3,286	-
Expense recognized during the year	30,481	26,898
Defined benefit obligation at beginning of year	87,705	56,112
Cost of interest	20,857	22,859
Cost of service for the current year	6,338	4,039
Past service cost	3,286	-
Actuarial losses recognized in other comprehensive income	17,380	20,594
Benefits paid	(17,444)	(15,899)
Discontinued operations	(5,025)	-
Defined benefit obligation at end of year	113,097	87,705

Main key assumptions used to determine the obligations

Main key assumptions used	2017	2016
Discount rate	5.50%	6.50%
Increase in the real annual salary	2.00%	2.00%
Turn over of participants	0.73%	0.73%

One percentage point change in the discount rate

	Increase	Decrease
	ARS 000	ARS 000
Effect on the benefit obligation as of the 2017 year-end	(8,816)	10,111
Effect on the benefit obligation as of the 2016 year-end	(6,135)	7,114

One percentage point change in the annual salary

	Increase	Decrease
	ARS 000	ARS 000
Effect on the benefit obligation as of the 2017 year-end	9,333	(8,296)
Effect on the benefit obligation as of the 2016 year-end	6,600	(5,788)

Short-term employee benefits

	12-31-2017	12-31-2016
	ARS 000	ARS 000
Current:
Vacation and statutory bonus	119,196	88,647
Contributions payable	50,113	39,204
Bonus accrual	144,418	73,405
Other	9,351	4,667
	323,078	205,923

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16. Cash and cash equivalents (Tables)

12 Months Ended

Dec. 31, 2017

Cash And Cash Equivalents Tables

Cash and cash equivalents

	12-31-2017	12-31-2016
	ARS 000	ARS 000
Cash at banks and on hand	88,633	30,008

XML

18. Provisions (Tables)

12 Months Ended

Dec. 31, 2017

Provisions Tables

Provisions

	2017					2016
Item	At beginning	Increases	Recovery	Transfers	At end	At end
	ARS 000	ARS 000	ARS 000	ARS 000	ARS 000	ARS 000
Provisions
Non-current
Provision for plant dismantling	125,201	5,831	-	(131,032) (1)	-	125,201
Current
Provision for lawsuits and claims	341,485	71,989	-	-	413,474	341,485
12-31-2017	466,686	77,820	-	(131,032)	413,474
12-31-2016	376,161	137,403	46,878	-		466,686

(1) Transferred to Liabilities associated with the assets held for sale (note 21).

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19. Information on related parties (Tables)

12 Months Ended

Dec. 31, 2017

Information On Related Parties Tables

Related party transactions

		Income	Expenses	Receivables	Payables
		ARS 000	ARS 000	ARS 000	ARS 000
Associates:
Termoeléctrica José de San Martín S.A.	12-31-2017	180	-	19	-
	12-31-2016	180	-	19	-
	12-31-2015	150	-	19	-
Distribuidora de Gas Cuyana S.A.	12-31-2017	-	46,793	-	7,251
	12-31-2016	-	23,019	-	2,564
	12-31-2015	-	9,858	-	807
Distribuidora de Gas del Centro S.A.	12-31-2017	-	-	-	-
	12-31-2016	-	92	-	-
	12-31-2015	-	2,923	-	3,624
Energía Sudamericana S.A.	12-31-2017	-	-	260	1,928
	12-31-2016	257	-	260	-
	12-31-2015	388	-	16,907	-
Transportadora de Gas del Mercosur S.A.	12-31-2017	3,270	-	17,245	-
	12-31-2016	3,105	-	13,940	-
	12-31-2015	-	-	10,799	-
Related companies:
RMPE Asociados S.A.	12-31-2017	137	96,352	-	-
	12-31-2016	145	65,076	11	-
	12-31-2015	130	24,161	11	-
Total	12-31-2017	3,587	143,145	17,524	9,179
	12-31-2016	3,687	88,187	14,230	2,564
	12-31-2015	668	36,942	27,736	4,431

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20. Financial risk management objectives and policies (Tables)

12 Months Ended

Dec. 31, 2017

Financial Risk Management Objectives And Policies Tables

Interest rate sensitivity

Increase in basic points	Effect on income before income tax (Loss)
	ARS 000
500	(167,112)

Foreign currency sensitivity

Change in USD rate	Effect on income before income tax (Loss)
	ARS 000
10%	(93,729)

Maturity profile of financial liabilities

	Less than 3 months	3 to 12 months	1 to 5 years	Total
	ARS 000	ARS 000	ARS 000	ARS 000
12-31-2017
CAMMESA borrowings and other loans and borrowings	233	2,258,409	2,534,287	4,792,929
Trade and other payables	1,015,369	1,936	-	1,017,305
	1,015,602	2,260,345	2,534,287	5,810,234
12-31-2016
CAMMESA borrowings and other loans and borrowings	294,692	2,046,208	1,284,783	3,625,683
Trade and other payables	654,929	669	-	655,598
	949,621	2,046,877	1,284,783	4,281,281

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21. Discontinued operations (Tables)

12 Months Ended

Dec. 31, 2017

Discontinued Operations Tables

Income from discontinued operations

	2017	2016	2015
	ARS 000	ARS 000	ARS 000
Revenues	2,196,746	1,757,692	580,595
Cost of sales	(1,427,906)	(1,081,979)	(352,844)
Gross income	768,840	675,713	227,751
Administrative and selling expenses	(8,566)	(15,221)	(7,924)
Other operating income	-	27,770	6,170
Other operating expenses	(10,737)	-	(1,259)
Operating income	749,537	688,262	224,738
Finance expense	(339)	(14,455)	(21,878)
Income before tax from discontinued operations	749,198	673,807	202,860
Income tax for the year	(264,157)	(235,833)	(71,001)
Income for the year from discontinued operations	485,041	437,974	131,859

Assets and liabilities classified as held for sale

	12-31-2017
	ARS 000
Assets
Property, plant and equipment	116,923
Inventories	26,091
Assets held for sale	143,014
Liabilities
Deferred income tax liabilities	6,282
Compensation and employee benefits liabilities	(4,411)
Provisions	(131,032)
Labilities associated with assets held for sale	(129,161)
Net assets held for sale	13,853

Cash flows of discontinued operations

	2017	2016	2015
	ARS 000	ARS 000	ARS 000
Operating activities	820,955	564,937	221,698

Earnings per share from discontinued operations

	2017	2016	2015
–Basic and diluted income per share from discontinued operations	ARS 0.32	ARS 0.29	ARS 0.09

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2. Basis of preparation of the consolidated financial statements (Details Narrative) $ in Thousands	12 Months Ended
	Dec. 31, 2017 ARS ($)
DisclosureOfBasisOfPreparationOfConsolidatedFinancialStatementsLineItems [Line Items]
Share-based payments	$ 2,942
Buildings
DisclosureOfBasisOfPreparationOfConsolidatedFinancialStatementsLineItems [Line Items]
Estimated useful lives	5 to 50 years
Lands
DisclosureOfBasisOfPreparationOfConsolidatedFinancialStatementsLineItems [Line Items]
Estimated useful lives	Are not depreciated
Material and spare parts
DisclosureOfBasisOfPreparationOfConsolidatedFinancialStatementsLineItems [Line Items]
Estimated useful lives	Based on the useful life of related machinery and equipment to be replaced
Furniture, fixtures and equipment
DisclosureOfBasisOfPreparationOfConsolidatedFinancialStatementsLineItems [Line Items]
Estimated useful lives	5 to 10 years
Others
DisclosureOfBasisOfPreparationOfConsolidatedFinancialStatementsLineItems [Line Items]
Estimated useful lives	3 to 5 years

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3. Investment in associates (Details) - ARS ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of associates [line items]
Investment in associates	$ 985,646	$ 307,012
Share of the profit of associates	$ 715,001	147,513	$ 43,390
Associate 1
Disclosure of associates [line items]
Name of associate	Termoeléctrica José de San Martin S.A.
Investment in associates	$ 25,671	19,576
Share of the profit of associates	$ 22,218	15,897	11,958
Associate 2
Disclosure of associates [line items]
Name of associate	Termoeléctrica Manuel Belgrano S.A.
Investment in associates	$ 28,744	25,236
Share of the profit of associates	$ 23,557	20,953	14,494
Associate 3
Disclosure of associates [line items]
Name of associate	Inversora de Gas Cuyana S.A.
Investment in associates	$ 217,380	82,183
Share of the profit of associates	$ 135,197	33,868	8,083
Associate 4
Disclosure of associates [line items]
Name of associate	Inversora de Gas Centro S.A.
Investment in associates	$ 254,813	101,740
Share of the profit of associates	$ 153,073	40,726	10,539
Associate 5
Disclosure of associates [line items]
Name of associate	Distribuidora de Gas del Centro S.A.
Investment in associates	$ 204,382	70,130
Share of the profit of associates	$ 134,252	28,582	5,444
Associate 6
Disclosure of associates [line items]
Name of associate	Transportadora de Gas del Mercosur S.A.
Investment in associates	$ 254,551	6,884
Share of the profit of associates	$ 247,667	0	0
Associate 7
Disclosure of associates [line items]
Name of associate	Others
Investment in associates	$ 105	1,263
Share of the profit of associates	$ (963)	$ 7,487	$ (7,128)

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3. Investment in associates (Details 1) - ARS ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of associates [line items]
Current assets	$ 5,810,625	$ 4,317,374
Non-current assets	11,268,344	8,405,587
Current liabilities	5,898,146	4,299,613
Non-current liabilities	3,819,823	3,269,332
Less: non-controlling interests	289,035	6,717
Total	7,071,965	5,147,299
Carrying amount of the investment	985,646	307,012
Revenues	5,956,596	3,562,721	$ 2,654,180
Net income for the year	3,493,999	1,768,836	1,341,998
Share in the net income of associate	$ 715,001	147,513	43,390
Associate 1
Disclosure of associates [line items]
Name of associate	Termoeléctrica José de San Martin S.A.
Current assets	$ 140,389	118,198
Non-current assets	7,679	8,282
Current liabilities	(58,631)	(58,467)
Non-current liabilities	(6,291)	(4,609)
Net assets	83,146	63,404
Carrying amount of the investment	25,671	19,576
Revenues	244,628	182,796	140,019
Net income for the year	71,961	51,488	39,239
Share in the net income of associate	$ 22,218	15,897	11,958
Associate 2
Disclosure of associates [line items]
Name of associate	Termoeléctrica Manuel Belgrano S.A.
Current assets	$ 142,969	128,127
Non-current assets	3,644	2,398
Current liabilities	(49,005)	(45,791)
Non-current liabilities	(4,725)	(3,186)
Net assets	92,883	81,548
Carrying amount of the investment	28,744	25,236
Revenues	257,407	205,218	148,945
Net income for the year	76,122	67,707	47,561
Share in the net income of associate	$ 23,557	20,953	14,494
Associate 4
Disclosure of associates [line items]
Name of associate	Inversora de Gas Centro S.A.
Current assets	$ 2,113,190	1,450,839
Non-current assets	911,271	1,300,375
Current liabilities	(1,692,212)	(2,151,646)
Non-current liabilities	(131,662)	(168,178)
Net assets	1,200,587	431,390
Less: non-controlling interests	(622,780)	(200,686)
Total	577,807	230,704
Carrying amount of the investment	254,813	101,740
Revenues	332,931	70,744	9,388
Net income for the year	347,104	92,349	21,508
Share in the net income of associate	$ 153,073	40,726	10,539
Associate 5
Disclosure of associates [line items]
Name of associate	Distribuidora de Gas del Centro S.A.
Current assets	$ 1,632,747	1,375,072
Non-current assets	873,411	1,256,813
Current liabilities	(1,193,139)	(2,096,622)
Non-current liabilities	(124,752)	(127,530)
Net assets	1,188,267	407,733
Carrying amount of the investment	204,382	70,130
Revenues	3,656,921	2,239,906	770,342
Net income for the year	780,535	166,174	28,487
Share in the net income of associate	$ 134,252	28,582	5,444
Associate 3
Disclosure of associates [line items]
Name of associate	Inversora de Gas Cuyana S.A.
Current assets	$ 1,297,922	1,094,417
Non-current assets	719,515	995,997
Current liabilities	(884,304)	(1,533,812)
Non-current liabilities	(35,643)	(44,982)
Net assets	1,097,490	511,620
Less: non-controlling interests	(604,564)	(325,265)
Total	492,926	186,355
Carrying amount of the investment	217,380	82,183
Revenues	2,813,506	1,612,252	569,294
Net income for the year	306,569	76,798	6,349
Share in the net income of associate	$ 135,197	33,868	8,083
Associate 6
Disclosure of associates [line items]
Name of associate	Transportadora de Gas del Mercosur S.A.
Current assets	$ 2,014,585
Non-current assets	150,681
Current liabilities	(892,510)
Net assets	1,272,756
Carrying amount of the investment	254,551	6,884
Revenues	683
Net income for the year	1,238,335
Share in the net income of associate	$ 247,667	$ 0	$ 0

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3. Investment in associates (Details Narrative) - ARS ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Associate 1
Disclosure of associates [line items]
Name of associate	Termoeléctrica José de San Martin S.A.
Interest in associate	30.8752%	30.8752%
Dividends received	$ 36,176	$ 25,798	$ 19,358
Associate 2
Disclosure of associates [line items]
Name of associate	Termoeléctrica Manuel Belgrano S.A.
Interest in associate	30.9464%	30.9464%
Dividends received	$ 36,176	$ 25,798	$ 19,358
Associate 3
Disclosure of associates [line items]
Name of associate	Inversora de Gas Cuyana S.A.
Interest in associate	41.00%	44.10%	49.00%
Dividends received			$ 8,967
Associate 4
Disclosure of associates [line items]
Name of associate	Inversora de Gas Centro S.A.
Interest in associate	44.10%	44.10%	49.00%
Dividends received			$ 17,003
Associate 5
Disclosure of associates [line items]
Name of associate	Distribuidora de Gas del Centro S.A.
Interest in associate	17.20%	17.20%	19.11%
Dividends received			$ 15,288

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4. Operating segments (Details) - ARS ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of operating segments [line items]
Revenues	$ 5,956,596	$ 3,562,721	$ 2,654,180
Cost of sales	(2,742,147)	(2,069,752)	(1,397,365)
Administrative and selling expenses	(651,168)	(445,412)	(371,485)
Other operating income	640,480	1,137,736	735,517
Other operating expenses	(92,497)	(84,845)	(52,702)
Operating income	3,111,264	2,100,448	1,568,145
Other (expenses) income	(102,306)	(769,586)	(358,006)
Net income for the segment	3,008,958	1,330,862	1,210,139
Share in the net income for the segment	3,008,958	1,330,862	1,210,139
Electric power generation
Disclosure of operating segments [line items]
Revenues	5,956,596	3,562,721	2,654,180
Cost of sales	(2,742,147)	(2,069,752)	(1,397,365)
Administrative and selling expenses	(651,168)	(445,412)	(371,485)
Other operating income	640,480	1,137,736	735,517
Other operating expenses	(92,497)	(84,845)	(52,702)
Operating income	3,111,264	2,100,448	1,568,145
Other (expenses) income	(817,307)	(917,099)	(401,396)
Net income for the segment	2,293,957	1,183,349	1,166,749
Share in the net income for the segment	2,293,957	1,183,349	1,166,749
Natural gas distribution
Disclosure of operating segments [line items]
Revenues	6,621,959	3,852,158	1,339,636
Cost of sales	(4,366,884)	(3,166,223)	(1,064,934)
Administrative and selling expenses	(1,188,068)	(603,502)	(421,764)
Other operating income	2,232,236	0	17,510
Other operating expenses	0	125,878	0
Operating income	3,299,243	208,311	(129,552)
Other (expenses) income	(708,732)	(69,174)	148,659
Net income for the segment	2,590,511	139,137	19,107
Share in the net income for the segment	670,189	103,176	24,066
Others
Disclosure of operating segments [line items]
Revenues	502,035	388,014	338,303
Cost of sales	(322,057)	(243,796)	(208,935)
Administrative and selling expenses	0	0	(5,852)
Other operating income	0	0	0
Other operating expenses	0	0	0
Operating income	179,978	144,218	123,516
Other (expenses) income	(35,162)	(24,249)	587
Net income for the segment	144,816	119,969	124,103
Share in the net income for the segment	44,812	44,337	19,324
Adjustments and eliminations
Disclosure of operating segments [line items]
Revenues	(7,123,994)	(4,240,172)	(1,677,939)
Cost of sales	4,688,941	3,410,019	1,273,869
Administrative and selling expenses	1,188,068	603,502	427,616
Other operating income	(2,232,236)	0	(17,510)
Other operating expenses	0	(125,878)	0
Operating income	(3,479,221)	(352,529)	6,036
Other (expenses) income	1,458,895	240,936	(105,856)
Net income for the segment	(2,020,326)	(111,593)	(99,820)
Share in the net income for the segment	$ 0	$ 0	$ 0

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4. Operating segments (Details Narrative) - ARS ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of operating segments [line items]
Revenue	$ 5,956,596	$ 3,562,721	$ 2,654,180
CAMMESA
Disclosure of operating segments [line items]
Revenue	$ 5,648,272	$ 3,345,744	$ 2,506,529
Percentage of revenue	95.00%	94.00%	94.00%

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5. Revenues (Details) - ARS ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
DisclosureOfRevenuesLineItems [Line Items]
Revenues	$ 5,956,596	$ 3,562,721	$ 2,654,180
Electric power sold on the Spot market (Resolution 19 and 95/2013, as amended)
DisclosureOfRevenuesLineItems [Line Items]
Revenues	5,175,825	3,114,552	2,317,042
Electric power sold on the Spot market (Prior Resolution 95/2013)
DisclosureOfRevenuesLineItems [Line Items]
Revenues	472,447	231,192	189,487
Sales under contracts
DisclosureOfRevenuesLineItems [Line Items]
Revenues	167,124	107,873	96,082
Steam sales
DisclosureOfRevenuesLineItems [Line Items]
Revenues	141,200	108,308	43,331
Rendering of services
DisclosureOfRevenuesLineItems [Line Items]
Revenues	$ 0	$ 796	$ 8,238

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6. Operating expenses (Details) - ARS ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017		Dec. 31, 2016		Dec. 31, 2015
Operating Expenses Details
Inventories at beginning of each year	$ 147,670	[1]	$ 94,179	[1]	$ 78,173
Purchases	512,570		336,190		152,883
Operating expenses	2,240,400		1,787,053		1,260,488
Total	2,752,970		2,123,243		1,413,371
Inventories at the end of each year	(158,493)		(147,670)	[1]	(94,179)	[1]
Cost of sales	$ 2,742,147		$ 2,069,752		$ 1,397,365

[1] Inventories as of December 31, 2016 and 2015 do not include inventories stock from discontinued operations.

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6. Operating expenses (Details 1) - ARS ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
DisclosureOfOperatingAdministrativeAndSellingExpensesLineItems [Line Items]
Operating expenses	$ 2,240,400	$ 1,787,053	$ 1,260,488
Administrative and selling expenses	651,168	445,412	371,485
Compensation to employees
DisclosureOfOperatingAdministrativeAndSellingExpensesLineItems [Line Items]
Operating expenses	878,089	688,891	496,273
Administrative and selling expenses	327,983	219,629	191,172
Other long-term employee benefits
DisclosureOfOperatingAdministrativeAndSellingExpensesLineItems [Line Items]
Operating expenses	26,270	22,859	20,828
Administrative and selling expenses	4,211	4,039	3,680
Depreciation of property, plant and equipment
DisclosureOfOperatingAdministrativeAndSellingExpensesLineItems [Line Items]
Operating expenses	277,445	200,703	156,559
Administrative and selling expenses	111	0	0
Amortization of intangible assets
DisclosureOfOperatingAdministrativeAndSellingExpensesLineItems [Line Items]
Operating expenses	31,114	31,134	26,816
Administrative and selling expenses	0	0	0
Purchase of energy and power
DisclosureOfOperatingAdministrativeAndSellingExpensesLineItems [Line Items]
Operating expenses	78,781	22,797	36,124
Administrative and selling expenses	0	0	0
Fees and compensation for services
DisclosureOfOperatingAdministrativeAndSellingExpensesLineItems [Line Items]
Operating expenses	194,120	147,529	89,578
Administrative and selling expenses	168,624	66,014	45,629
Maintenance expenses
DisclosureOfOperatingAdministrativeAndSellingExpensesLineItems [Line Items]
Operating expenses	363,199	352,914	197,581
Administrative and selling expenses	25,178	41,547	38,883
Consumption of materials and spare parts
DisclosureOfOperatingAdministrativeAndSellingExpensesLineItems [Line Items]
Operating expenses	112,956	140,329	78,725
Administrative and selling expenses	0	0	0
Insurance
DisclosureOfOperatingAdministrativeAndSellingExpensesLineItems [Line Items]
Operating expenses	139,473	124,956	67,009
Administrative and selling expenses	1,794	550	256
Levies and royalties
DisclosureOfOperatingAdministrativeAndSellingExpensesLineItems [Line Items]
Operating expenses	133,212	50,759	89,151
Administrative and selling expenses	0	0	0
Taxes and assessments
DisclosureOfOperatingAdministrativeAndSellingExpensesLineItems [Line Items]
Operating expenses	3,664	2,755	464
Administrative and selling expenses	29,399	24,270	29,529
Tax on bank account transactions
DisclosureOfOperatingAdministrativeAndSellingExpensesLineItems [Line Items]
Operating expenses	0	0	0
Administrative and selling expenses	84,232	77,954	55,084
Corporate expenses
DisclosureOfOperatingAdministrativeAndSellingExpensesLineItems [Line Items]
Operating expenses	0	0	0
Administrative and selling expenses	0	4,685	0
Others
DisclosureOfOperatingAdministrativeAndSellingExpensesLineItems [Line Items]
Operating expenses	2,077	1,427	1,380
Administrative and selling expenses	$ 9,636	$ 6,728	$ 7,252

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7. Other income and expenses (Details) - ARS ($) $ in Thousands		12 Months Ended
		Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
DisclosureOfOtherIncomeAndExpensesLineItems [Line Items]
Other operating income		$ 640,480	$ 1,137,736	$ 735,517
Interest earned from customers
DisclosureOfOtherIncomeAndExpensesLineItems [Line Items]
Other operating income		270,715	108,423	41,607
Receivables and payables foreign exchange difference
DisclosureOfOtherIncomeAndExpensesLineItems [Line Items]
Other operating income		76,475	137,359	336,641
Discount of trade and other receivables and payables, net
DisclosureOfOtherIncomeAndExpensesLineItems [Line Items]
Other operating income	[1]	51,838	718,114	118,560
Recovery of insurance
DisclosureOfOtherIncomeAndExpensesLineItems [Line Items]
Other operating income		237,577	155,013	145,569
Recovery of turnover tax
DisclosureOfOtherIncomeAndExpensesLineItems [Line Items]
Other operating income		0	0	77,833
Others
DisclosureOfOtherIncomeAndExpensesLineItems [Line Items]
Other operating income		$ 3,875	$ 18,827	$ 15,307

[1] In December 2015, Decree No. 134/2015 was enacted declaring the state of emergency of the Argentine electricity sector until December 31, 2017. Pursuant to such decree, the Ministry of Energy was entrusted with the duties of developing and putting in place an action plan in connection with the electricity generation, transportation and distribution segments in order to improve the quality and security of electricity supply and guarantee the provision of this public service under suitable technical and economic conditions.

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7. Other income and expenses (Details 1) - ARS ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
DisclosureOfOtherIncomeAndExpensesLineItems [Line Items]
Other operating expenses	$ (92,497)	$ (84,845)	$ (52,702)
Charge related to the provision for lawsuits and claims
DisclosureOfOtherIncomeAndExpensesLineItems [Line Items]
Other operating expenses	(69,197)	(86,644)	(52,702)
Impairment of material and spare parts
DisclosureOfOtherIncomeAndExpensesLineItems [Line Items]
Other operating expenses	(23,300)	0	0
Others
DisclosureOfOtherIncomeAndExpensesLineItems [Line Items]
Other operating expenses	$ 0	$ 1,799	$ 0

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7. Other income and expenses (Details 2) - ARS ($) $ in Thousands		12 Months Ended
		Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
DisclosureOfOtherIncomeAndExpensesLineItems [Line Items]
Finance income		$ 932,227	$ 420,988	$ 362,363
Interest earned
DisclosureOfOtherIncomeAndExpensesLineItems [Line Items]
Finance income		148,485	51,774	31,871
Net income on financial assets at fair value through profit or loss
DisclosureOfOtherIncomeAndExpensesLineItems [Line Items]
Finance income		75,525	46,827	30,091
Foreign exchange differences
DisclosureOfOtherIncomeAndExpensesLineItems [Line Items]
Finance income		45,531	94,920	233,301
Net income on disposal of available-for-sale financial assets
DisclosureOfOtherIncomeAndExpensesLineItems [Line Items]
Finance income	[1]	$ 662,686	$ 227,467	$ 67,100

[1] Net of 52,417 corresponding to turnover tax for the year ended December 31, 2017.

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7. Other income and expenses (Details 3) - ARS ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
DisclosureOfOtherIncomeAndExpensesLineItems [Line Items]
Finance expenses	$ (697,638)	$ (620,448)	$ (138,308)
Interest on loans and borrowings
DisclosureOfOtherIncomeAndExpensesLineItems [Line Items]
Finance expenses	(626,981)	(529,999)	(253,316)
Net foreign exchange differences
DisclosureOfOtherIncomeAndExpensesLineItems [Line Items]
Finance expenses	(64,983)	(75,471)	124,577
Others
DisclosureOfOtherIncomeAndExpensesLineItems [Line Items]
Finance expenses	$ (5,674)	$ (14,978)	$ (9,569)

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8. Movements in other comprehensive income from available-for-sale financial assets (Details) - ARS ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Movements In Other Comprehensive Income From Available-for-sale Financial Assets Details
Gains for the year	$ 272,239	$ 554,330	$ 274,165
Reclassification adjustments to income	(715,103)	(227,467)	(67,100)
Net gain on available-for-sale financial assets	$ (442,864)	$ 326,863	$ 207,065

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9. Income tax (Details) - ARS ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Current income tax
Income tax charge for the year	$ (1,350,540)	$ (485,279)	$ (462,872)
Adjustment related to current income tax for the prior year	32,561	938	2,845
Deferred income tax
Related to the net variation in temporary differences	266,083	(233,298)	(165,424)
Income tax for the year	$ (1,051,896)	$ (717,639)	$ (625,451)

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9. Income tax (Details 1) - ARS ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Income Tax Details 1
Deferred income tax income (expense)	$ 154,268	$ (107,194)	$ (71,573)
Income tax credited (charged) to other comprehensive income	$ 154,268	$ (107,194)	$ (71,573)

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9. Income tax (Details 2) - ARS ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017		Dec. 31, 2016	Dec. 31, 2015
Income Tax Details 2
Income before income tax from continuing operations	$ 4,060,854		$ 2,048,501	$ 1,835,590
Income before income tax from discontinued operations	749,198		673,807	202,860
Income before income tax	4,810,052		2,722,308	2,038,450
At statutory income tax rate of 35%	(1,683,518)		(952,808)	(713,458)
Share of the profit of associates	101,409		12,767	15,187
Adjustment related to current income tax for the prior year	32,561		938	2,845
Effect related to statutory income tax rate change	220,956	[1]	0	0
Others	12,539		(14,369)	(1,026)
Total	(1,316,053)		(953,472)	(696,452)
Income tax attributable to continuing operations	(1,051,896)		(717,639)	(625,451)
Income tax attributable to discontinuing operations	(264,157)		(235,833)	(71,001)
Income tax	$ (1,316,053)		$ (953,472)	$ (696,452)

[1] Effect of applying the changes in the enacted tax rate established by Law 27,430 as described in note 23.a) to the deferred assets and liabilities, according to its expected term of realization and settlement, respectively.

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9. Income tax (Details 3) - ARS ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
DisclosureOfDeferredIncomeTaxLineItems [Line Items]
Deferred income tax income (expense)	$ 420,351	$ (340,492)	$ (236,997)
Deferred income tax liabilities, net	(697,462)	(1,136,481)	(770,737)
Trade receivables
DisclosureOfDeferredIncomeTaxLineItems [Line Items]
Deferred income tax income (expense)	217,170	(131,465)	142
Deferred income tax liabilities, net	(425,442)	(661,748)
Provision for plant dismantling
DisclosureOfDeferredIncomeTaxLineItems [Line Items]
Deferred income tax income (expense)	0	0	0
Deferred income tax liabilities, net	39,310	43,820
Other financial assets
DisclosureOfDeferredIncomeTaxLineItems [Line Items]
Deferred income tax income (expense)	152,657	9,931	(184,421)
Deferred income tax liabilities, net	(37,658)	(190,315)
Employee benefit liability
DisclosureOfDeferredIncomeTaxLineItems [Line Items]
Deferred income tax income (expense)	1,627	9,499	4,587
Deferred income tax liabilities, net	32,089	30,697
Receivables and other non-financial liabilities
DisclosureOfDeferredIncomeTaxLineItems [Line Items]
Deferred income tax income (expense)	(423)	(248,723)	(101,037)
Deferred income tax liabilities, net	(6,249)	(5,826)
Provisions and other
DisclosureOfDeferredIncomeTaxLineItems [Line Items]
Deferred income tax income (expense)	13,872	23,314	27,874
Deferred income tax liabilities, net	44,910	30,986
Investments in associates
DisclosureOfDeferredIncomeTaxLineItems [Line Items]
Deferred income tax income (expense)	(103,744)	(34,522)	0
Deferred income tax liabilities, net	(138,266)	(34,522)
Property, plant and equipment
DisclosureOfDeferredIncomeTaxLineItems [Line Items]
Deferred income tax income (expense)	93,612	25,378	11,375
Deferred income tax liabilities, net	(224,175)	(322,012)
Intangible assets
DisclosureOfDeferredIncomeTaxLineItems [Line Items]
Deferred income tax income (expense)	13,363	6,096	4,483
Deferred income tax liabilities, net	(14,198)	(27,561)
Tax loss carry-forward
DisclosureOfDeferredIncomeTaxLineItems [Line Items]
Deferred income tax income (expense)	32,217	0	$ 0
Deferred income tax liabilities, net	$ 32,217	$ 0

XML

9. Income tax (Details 4) - ARS ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
DisclosureOfDeferredIncomeTaxLiabilitiesLineItems [Line Items]
Deferred income tax liabilities	$ 703,744	$ 1,136,481
Total	(697,462)	(1,136,481)	$ (770,737)
Continuing operations
DisclosureOfDeferredIncomeTaxLiabilitiesLineItems [Line Items]
Deferred income tax assets	107,544	105,772
Deferred income tax liabilities	(811,288)	(1,242,254)
Discontinued operations
DisclosureOfDeferredIncomeTaxLiabilitiesLineItems [Line Items]
Deferred income tax assets	41,023	0
Deferred income tax liabilities	$ (34,741)	$ 0

XML

9. Income tax (Details 5) - ARS ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Income Tax Details 5
Amount at beginning of year	$ (1,136,481)	$ (770,737)
Deferred income tax recognized in profit or loss and in other comprehensive income during the year	420,351	(335,850)
Discontinued operations	(467)	0
Reclassification related to current income tax for the prior year	19,135	(29,894)
Amount at end of year	$ (697,462)	$ (1,136,481)

XML

10. Earnings per share (Details) - ARS ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Earnings Per Share Details
Income attributable to equity holders of the parent, continuing operations	$ 3,022,754	$ 1,330,869	$ 1,210,139
Income attributable to equity holders of the parent, discontinued operations	485,041	437,974	131,859
Income attributable to equity holders of the parent	$ 3,507,795	$ 1,768,843	$ 1,341,998
Weighted average number of ordinary shares	1,505,695,134	1,505,695,134	1,505,695,134

XML

10. Earnings per share (Details 1) - ARS ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Earnings Per Share Details 1
Income attributable to equity holders of the parent from discontinued operations	$ 485,041	$ 437,974	$ 131,859

XML

11. Inventories (Details) - ARS ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
DisclosureOfInventoriesLineItems [Line Items]
Non-current inventories	$ 48,203	$ 30,830
Current inventories	110,290	137,965
Materials and spare parts
DisclosureOfInventoriesLineItems [Line Items]
Non-current inventories	102,384	61,711
Current inventories	101,016	128,691
Provision for impairment in value
DisclosureOfInventoriesLineItems [Line Items]
Non-current inventories	(54,181)	(30,881)
Fuel oil
DisclosureOfInventoriesLineItems [Line Items]
Current inventories	7,461	7,461
Diesel oil
DisclosureOfInventoriesLineItems [Line Items]
Current inventories	$ 1,813	$ 1,813

XML

12. Property, plant and equipment (Details) - ARS ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017		Dec. 31, 2016
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment cost, beginning	$ 5,592,506		$ 4,547,855
Additions	3,558,725		1,070,201
Transfers	1,166,796
Disposals	(1,104)		(25,550)
Property, plant and equipment cost, ending	10,316,923		5,592,506
Property, plant and equipment depreciation, beginning	2,780,967		2,579,707
Depreciation for the year	278,679		201,865
Transfers	(173,906)
Disposals	(545)		(605)
Property, plant and equipment depreciation, ending	2,885,195		2,780,967
Property, plant and equipment net book value	7,431,728		2,811,539
Lands and buildings
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment cost, beginning	365,091		158,939
Additions	2,400		206,152
Transfers	(1,568)
Disposals	0		0
Property, plant and equipment cost, ending	365,923		365,091
Property, plant and equipment depreciation, beginning	41,536		39,356
Depreciation for the year	2,162		2,180
Transfers	(1,506)
Disposals	0		0
Property, plant and equipment depreciation, ending	42,192		41,536
Property, plant and equipment net book value	323,731		323,555
Electric power facilities
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment cost, beginning	4,324,553		3,878,409
Additions	168,791		468,519
Transfers	(309,796)
Disposals	0		(22,375)
Property, plant and equipment cost, ending	4,183,548		4,324,553
Property, plant and equipment depreciation, beginning	2,583,191		2,394,358
Depreciation for the year	264,069		188,833
Transfers	(167,895)
Disposals	0		0
Property, plant and equipment depreciation, ending	2,679,365		2,583,191
Property, plant and equipment net book value	1,504,183		1,741,362
Gas turbines
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment cost, beginning	683,414		299,285
Additions	883,772		384,129
Transfers	1,246,266
Disposals	0		0
Property, plant and equipment cost, ending	2,813,452	[1]	683,414
Property, plant and equipment depreciation, beginning	0		0
Depreciation for the year	0		0
Transfers	0
Disposals	0		0
Property, plant and equipment depreciation, ending	0		0
Property, plant and equipment net book value	2,813,452		683,414
Construction in progress
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment cost, beginning	0		0
Additions	2,482,528		0
Transfers	257,643
Disposals	0		0
Property, plant and equipment cost, ending	2,740,171		0
Property, plant and equipment depreciation, beginning	0		0
Depreciation for the year	0		0
Transfers	0
Disposals	0		0
Property, plant and equipment depreciation, ending	0		0
Property, plant and equipment net book value	2,740,171		0
Others
Disclosure of detailed information about property, plant and equipment [line items]
Property, plant and equipment cost, beginning	219,448		211,222
Additions	21,234		11,401
Transfers	(25,749)
Disposals	(1,104)		(3,175)
Property, plant and equipment cost, ending	213,829		219,448
Property, plant and equipment depreciation, beginning	156,240		145,993
Depreciation for the year	12,448		10,852
Transfers	(4,505)
Disposals	(545)		(605)
Property, plant and equipment depreciation, ending	163,638		156,240
Property, plant and equipment net book value	$ 50,191		$ 63,208

[1] As of December 31, 2017, the Company acquired gas turbines, one of which will be used for new generation capacity in the project called "Terminal 6 San Lorenzo" while the other turbines can be used for other projects, in future bidding processes that may be called by the Argentine government.

XML

13. Intangible assets (Details) - ARS ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of detailed information about intangible assets [line items]
Intangible assets cost	$ 823,105	$ 823,105
Intangible assets amortization, beginning	586,575	546,414
Amortization of the year	48,697	40,161
Intangible assets amortization, ending	635,272	586,575
Intangible assets net book value	187,833	236,530
Concession right
Disclosure of detailed information about intangible assets [line items]
Intangible assets cost	724,883	724,883
Intangible assets amortization, beginning	507,084	475,970
Amortization of the year	31,114	31,114
Intangible assets amortization, ending	538,198	507,084
Intangible assets net book value	18,685	217,799
Others
Disclosure of detailed information about intangible assets [line items]
Intangible assets cost	98,222	98,222
Intangible assets amortization, beginning	79,491	70,444
Amortization of the year	17,583	9,047
Intangible assets amortization, ending	97,074	79,491
Intangible assets net book value	$ 1,148	$ 18,731

XML

13. Intangible assets (Details Narrative) - ARS ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Intangible Assets Details Narrative
Royalties paid	$ 127,270	$ 46,518	$ 84,197

XML

14. Financial assets and liabilities (Details) - ARS ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Disclosure of financial assets [line items]
Non-current trade and other receivables	$ 2,602,213	$ 3,553,129
Current trade and other receivables	3,887,065	2,215,535
Trade receivables—CAMMESA
Disclosure of financial assets [line items]
Non-current trade and other receivables	2,591,913	3,544,354
Current trade and other receivables	3,625,863	1,807,721
Trade receivables—YPF SA
Disclosure of financial assets [line items]
Current trade and other receivables	136,696	309,837
Upfront payments of associates acquisition
Disclosure of financial assets [line items]
Non-current trade and other receivables	43	43
Recovery of insurance
Disclosure of financial assets [line items]
Current trade and other receivables	21,292	16,646
Trade receivables—Large users
Disclosure of financial assets [line items]
Current trade and other receivables	41,414	25,384
Receivables from associates
Disclosure of financial assets [line items]
Non-current trade and other receivables	10,257	8,732
Current trade and other receivables	7,267	5,487
Receivables from other related parties
Disclosure of financial assets [line items]
Current trade and other receivables	0	11
Other receivables
Disclosure of financial assets [line items]
Current trade and other receivables	56,284	52,200
Subtotal
Disclosure of financial assets [line items]
Current trade and other receivables	3,888,816	2,217,286
Allowance for doubtful accounts
Disclosure of financial assets [line items]
Current trade and other receivables	$ (1,751)	$ (1,751)

XML

14. Financial assets and liabilities (Details 1) - ARS ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
DisclosureOfFinancialAssetsThatAreEitherDueOrPastDueLineItems [Line Items]
Trade and other receivables	$ 6,489,278	$ 5,768,664
To due
DisclosureOfFinancialAssetsThatAreEitherDueOrPastDueLineItems [Line Items]
Trade and other receivables	6,448,858	5,043,085
Less than 90 days
DisclosureOfFinancialAssetsThatAreEitherDueOrPastDueLineItems [Line Items]
Trade and other receivables	35,045	725,579
90 - 180 days
DisclosureOfFinancialAssetsThatAreEitherDueOrPastDueLineItems [Line Items]
Trade and other receivables	0	0
180 - 270 days
DisclosureOfFinancialAssetsThatAreEitherDueOrPastDueLineItems [Line Items]
Trade and other receivables	1,877	0
270 - 360 days
DisclosureOfFinancialAssetsThatAreEitherDueOrPastDueLineItems [Line Items]
Trade and other receivables	0	0
Greater than 360 days
DisclosureOfFinancialAssetsThatAreEitherDueOrPastDueLineItems [Line Items]
Trade and other receivables	$ 3,498	$ 0

XML

14. Financial assets and liabilities (Details 2) $ in Thousands	12 Months Ended
	Dec. 31, 2017 ARS ($)
Disclosure of financial assets [line items]
Reserve for impairment of receivables, beginning	$ 1,751
Increases	0
Recovery	0
Reserve for impairment of receivables, ending	1,751
Trade and other receivables
Disclosure of financial assets [line items]
Reserve for impairment of receivables, beginning	1,751
Increases	0
Recovery	0
Reserve for impairment of receivables, ending	$ 1,751

XML

14. Financial assets and liabilities (Details 3) - ARS ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Disclosure of financial liabilities [line items]
Trade and other payables	$ 1,017,306	$ 655,598
Trade payables
Disclosure of financial liabilities [line items]
Trade and other payables	1,006,191	652,349
Payables to associates
Disclosure of financial liabilities [line items]
Trade and other payables	9,179	2,564
Insurance payable
Disclosure of financial liabilities [line items]
Trade and other payables	$ 1,936	$ 685

XML

14. Financial assets and liabilities (Details 4) - ARS ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Disclosure of financial liabilities [line items]
Non-current other loans and borrowings	$ 1,478,729	$ 0
Current other loans and borrowings	505,604	1,293,178
Short-term bank loans
Disclosure of financial liabilities [line items]
Current other loans and borrowings	233	294,692
Borrowing from Banco de Galicia y Buenos Aires S.A.
Disclosure of financial liabilities [line items]
Non-current other loans and borrowings	1,478,729
Current other loans and borrowings	$ 505,371	$ 998,486

XML

14. Financial assets and liabilities (Details 5) - ARS ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Disclosure of financial liabilities [line items]
Non-current borrowings from CAMMESA	$ 1,055,558	$ 1,284,783
Current borrowings from CAMMESA	1,753,038	1,047,722
CAMMESA loans
Disclosure of financial liabilities [line items]
Non-current borrowings from CAMMESA	1,055,558	1,284,783
Current borrowings from CAMMESA	970,980	420,672
CAMMESA prepayments
Disclosure of financial liabilities [line items]
Current borrowings from CAMMESA	$ 782,058	$ 627,050

XML

14. Financial assets and liabilities (Details 6) $ in Thousands	Dec. 31, 2017 ARS ($)
DisclosureOfMaturityAnalysisForCAMMESABorrowingsLineItems [Line Items]
Borrowings from CAMMESA	$ 2,808,596
2018
DisclosureOfMaturityAnalysisForCAMMESABorrowingsLineItems [Line Items]
Borrowings from CAMMESA	1,753,038
2019
DisclosureOfMaturityAnalysisForCAMMESABorrowingsLineItems [Line Items]
Borrowings from CAMMESA	535,673
2020
DisclosureOfMaturityAnalysisForCAMMESABorrowingsLineItems [Line Items]
Borrowings from CAMMESA	295,369
2021
DisclosureOfMaturityAnalysisForCAMMESABorrowingsLineItems [Line Items]
Borrowings from CAMMESA	221,504
2022
DisclosureOfMaturityAnalysisForCAMMESABorrowingsLineItems [Line Items]
Borrowings from CAMMESA	$ 3,012

XML

14. Financial assets and liabilities (Details 7) $ in Thousands	12 Months Ended
	Dec. 31, 2017 ARS ($)
Disclosure of financial liabilities [line items]
Non-current liabilities, beginning	$ 0
Non-current liabilities, ending	945,326
Current liabilities, beginning	1,223,317
Current liabilities, ending	1,091,075
Other loans and borrowings
Disclosure of financial liabilities [line items]
Non-current liabilities, beginning	0
Payments	0
Non-cash transactions	0
Disbursements	1,395,508
Other	83,221
Non-current liabilities, ending	1,478,729
Current liabilities, beginning	1,293,178
Payments	(1,349,934)
Non-cash transactions	0
Disbursements	476,386
Other	85,974
Current liabilities, ending	505,604
Borrowings from CAMMESA
Disclosure of financial liabilities [line items]
Non-current liabilities, beginning	1,284,783
Payments	0
Non-cash transactions	0
Disbursements	403,427
Other	(632,652)
Non-current liabilities, ending	1,055,558
Current liabilities, beginning	1,047,722
Payments	0
Non-cash transactions	(522,215)
Disbursements	0
Other	1,227,531
Current liabilities, ending	$ 1,753,038

XML

14. Financial assets and liabilities (Details 8) - ARS ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
DisclosureOfFinancialAssetsAndLiabilitiesLineItems [Line Items]
Financial assets, carrying amount	$ 7,688,639	$ 7,595,428
Financial assets, fair value	7,688,639	7,595,428
Financial liabilities, carrying amount	4,792,929	3,625,683
Financial liabilities, fair value	4,792,929	3,625,683
Other loans and borrowings
DisclosureOfFinancialAssetsAndLiabilitiesLineItems [Line Items]
Financial liabilities, carrying amount	1,984,333	1,293,178
Financial liabilities, fair value	1,984,333	1,293,178
Borrowings from CAMMESA
DisclosureOfFinancialAssetsAndLiabilitiesLineItems [Line Items]
Financial liabilities, carrying amount	2,808,596	2,332,505
Financial liabilities, fair value	2,808,596	2,332,505
Trade and other receivables
DisclosureOfFinancialAssetsAndLiabilitiesLineItems [Line Items]
Financial assets, carrying amount	6,489,278	5,768,664
Financial assets, fair value	6,489,278	5,768,664
Other financial assets
DisclosureOfFinancialAssetsAndLiabilitiesLineItems [Line Items]
Financial assets, carrying amount	1,110,728	1,796,756
Financial assets, fair value	1,110,728	1,796,756
Cash and cash equivalents
DisclosureOfFinancialAssetsAndLiabilitiesLineItems [Line Items]
Financial assets, carrying amount	88,633	30,008
Financial assets, fair value	$ 88,633	$ 30,008

XML

14. Financial assets and liabilities (Details 9) - ARS ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Disclosure of financial assets [line items]
Financial assets and available-for-sale financial assets measured at fair value	$ 1,110,728	$ 1,796,756
Level 1
Disclosure of financial assets [line items]
Financial assets and available-for-sale financial assets measured at fair value	1,110,728	1,796,756
Level 2
Disclosure of financial assets [line items]
Financial assets and available-for-sale financial assets measured at fair value	0	0
Level 3
Disclosure of financial assets [line items]
Financial assets and available-for-sale financial assets measured at fair value	0	0
Financial assets at fair value through profit or loss | Mutual funds
Disclosure of financial assets [line items]
Financial assets measured at fair value	556,138	104,177
Financial assets at fair value through profit or loss | Mutual funds | Level 1
Disclosure of financial assets [line items]
Financial assets measured at fair value	556,138	104,177
Financial assets at fair value through profit or loss | Mutual funds | Level 2
Disclosure of financial assets [line items]
Financial assets measured at fair value	0	0
Financial assets at fair value through profit or loss | Mutual funds | Level 3
Disclosure of financial assets [line items]
Financial assets measured at fair value	0	0
Financial assets at fair value through profit or loss | Argentine Central Bank bills
Disclosure of financial assets [line items]
Financial assets measured at fair value	404,570
Financial assets at fair value through profit or loss | Argentine Central Bank bills | Level 1
Disclosure of financial assets [line items]
Financial assets measured at fair value	404,570
Financial assets at fair value through profit or loss | Argentine Central Bank bills | Level 2
Disclosure of financial assets [line items]
Financial assets measured at fair value	0
Financial assets at fair value through profit or loss | Argentine Central Bank bills | Level 3
Disclosure of financial assets [line items]
Financial assets measured at fair value	0
Financial assets at fair value through profit or loss | Corporate bonds
Disclosure of financial assets [line items]
Financial assets measured at fair value		1,854
Financial assets at fair value through profit or loss | Corporate bonds | Level 1
Disclosure of financial assets [line items]
Financial assets measured at fair value		1,854
Financial assets at fair value through profit or loss | Corporate bonds | Level 2
Disclosure of financial assets [line items]
Financial assets measured at fair value		0
Financial assets at fair value through profit or loss | Corporate bonds | Level 3
Disclosure of financial assets [line items]
Financial assets measured at fair value		0
Available-for-sale financial assets | Mutual funds
Disclosure of financial assets [line items]
Financial assets available for sale measured at fair value	150,020	1,690,725
Available-for-sale financial assets | Mutual funds | Level 1
Disclosure of financial assets [line items]
Financial assets available for sale measured at fair value	150,020	1,690,725
Available-for-sale financial assets | Mutual funds | Level 2
Disclosure of financial assets [line items]
Financial assets available for sale measured at fair value	0	0
Available-for-sale financial assets | Mutual funds | Level 3
Disclosure of financial assets [line items]
Financial assets available for sale measured at fair value	$ 0	$ 0

XML

14. Financial assets and liabilities (Details 10) - ARS ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Disclosure of financial assets [line items]
Other financial assets	$ 1,110,728	$ 1,796,756
Available-for-sale financial assets
Disclosure of financial assets [line items]
Other financial assets	150,020	1,690,725
Available-for-sale financial assets | Mutual funds
Disclosure of financial assets [line items]
Other financial assets	150,020	1,690,725
Financial assets at fair value through profit or loss
Disclosure of financial assets [line items]
Other financial assets	960,708	106,031
Financial assets at fair value through profit or loss | Mutual funds
Disclosure of financial assets [line items]
Other financial assets	556,138	104,177
Financial assets at fair value through profit or loss | Argentina Central Bank bills
Disclosure of financial assets [line items]
Other financial assets	404,570	0
Financial assets at fair value through profit or loss | Corporate bonds
Disclosure of financial assets [line items]
Other financial assets	$ 0	$ 1,854

XML

14. Financial assets and liabilities (Details 11) € in Thousands, $ in Thousands, $ in Thousands		Dec. 31, 2017 ARS ($) $ / $ € / $	Dec. 31, 2017 USD ($) $ / $ € / $	Dec. 31, 2017 EUR (€) $ / $ € / $	Dec. 31, 2016 ARS ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2016 EUR (€)
DisclosureOfFinancialAssetsAndLiabilitiesLineItems [Line Items]
Non-current financial assets		$ 457,193			$ 702,495
Current financial assets		627,978			677,621
Financial assets		1,085,171			1,380,116
Non-current financial liabilities		945,326			0
Current financial liabilities		1,091,075			1,223,317
Financial liabilities		2,036,401			1,223,317
Other loans and borrowings
DisclosureOfFinancialAssetsAndLiabilitiesLineItems [Line Items]
Non-current financial liabilities		945,326			0
Current financial liabilities		505,371			998,486
Trade and other payables
DisclosureOfFinancialAssetsAndLiabilitiesLineItems [Line Items]
Current financial liabilities		$ 585,704			224,831
USD | Other loans and borrowings
DisclosureOfFinancialAssetsAndLiabilitiesLineItems [Line Items]
Non-current financial liabilities			$ 50,690			$ 0
Current financial liabilities			$ 27,099			62,837
Effective exchange rate | $ / $	[1]	18.649	18.649	18.649
USD | Trade and other payables
DisclosureOfFinancialAssetsAndLiabilitiesLineItems [Line Items]
Current financial liabilities			$ 31,243			14,087
Effective exchange rate | $ / $	[1]	18.649	18.649	18.649
EUR | Trade and other payables
DisclosureOfFinancialAssetsAndLiabilitiesLineItems [Line Items]
Current financial liabilities | €				€ 136			€ 59
Effective exchange rate | € / $	[1]	22.4497	22.4497	22.4497
Trade and other receivables
DisclosureOfFinancialAssetsAndLiabilitiesLineItems [Line Items]
Non-current financial assets		$ 457,193			702,495
Current financial assets		$ 547,954			653,871
Trade and other receivables | USD
DisclosureOfFinancialAssetsAndLiabilitiesLineItems [Line Items]
Non-current financial assets			$ 24,648			44,490
Current financial assets			$ 29,541			41,410
Effective exchange rate | $ / $	[1]	18.549	18.549	18.549
Cash and cash equivalents
DisclosureOfFinancialAssetsAndLiabilitiesLineItems [Line Items]
Current financial assets		$ 80,024			$ 23,750
Cash and cash equivalents | USD
DisclosureOfFinancialAssetsAndLiabilitiesLineItems [Line Items]
Current financial assets			$ 4,313			$ 1,502
Effective exchange rate | $ / $	[1]	18.549	18.549	18.549
Cash and cash equivalents | EUR
DisclosureOfFinancialAssetsAndLiabilitiesLineItems [Line Items]
Current financial assets | €				€ 1			€ 2
Effective exchange rate | € / $	[1]	22.2829	22.2829	22.2829

[1] At the exchange rate prevailing as of December 31, 2017 as per Banco de la Nacion Argentina.

XML

14. Financial assets and liabilities (Details Narrative) - ARS ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
DisclosureOfFinancialAssetsAndLiabilitiesLineItems [Line Items]
Loans received from CAMMESA	$ 403,427	$ 784,245	$ 317,995
Gain on foreign currency forward contracts		157,827	410,794
Cash received on foreign currency forward contracts		380,348	$ 188,273
FONINVEMEN I and II
DisclosureOfFinancialAssetsAndLiabilitiesLineItems [Line Items]
Collections of receivables	350,577	307,211
Receivables	816,653	1,019,991
CVO
DisclosureOfFinancialAssetsAndLiabilitiesLineItems [Line Items]
Receivables	$ 1,291,384	$ 1,291,384

XML

15. Non-financial assets and liabilities (Details) - ARS ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
DisclosureOfNonfinancialAssetsLineItems [Line Items]
Non-current other non-financial assets	$ 12,721	$ 1,466,547
Current other non-financial assets	470,895	137,110
Tax credits
DisclosureOfNonfinancialAssetsLineItems [Line Items]
Non-current other non-financial assets	8,213	1,811
Current other non-financial assets	335,487	17,840
Prepayments to vendors
DisclosureOfNonfinancialAssetsLineItems [Line Items]
Non-current other non-financial assets	4,508	4,472
Upfront payments of property, plant and equipment purchases
DisclosureOfNonfinancialAssetsLineItems [Line Items]
Non-current other non-financial assets	0	1,460,264
Upfront payments of inventories purchases
DisclosureOfNonfinancialAssetsLineItems [Line Items]
Current other non-financial assets	41,596	46,205
Prepayment expenses
DisclosureOfNonfinancialAssetsLineItems [Line Items]
Current other non-financial assets	87,273	66,025
Other
DisclosureOfNonfinancialAssetsLineItems [Line Items]
Current other non-financial assets	$ 6,539	$ 7,040

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15. Non-financial assets and liabilities (Details 1) - ARS ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
DisclosureOfNonfinancialLiabilitiesLineItems [Line Items]
Non-current other non-financial liabilities	$ 468,695	$ 635,162
Current other non-financial liabilities	659,668	476,785
VAT payable
DisclosureOfNonfinancialLiabilitiesLineItems [Line Items]
Non-current other non-financial liabilities	448,712	613,363
Current other non-financial liabilities	569,005	385,846
Turnover tax payable
DisclosureOfNonfinancialLiabilitiesLineItems [Line Items]
Current other non-financial liabilities	6,335	8,982
Income tax withholdings payable
DisclosureOfNonfinancialLiabilitiesLineItems [Line Items]
Current other non-financial liabilities	26,312	19,666
Concession fees and royalties
DisclosureOfNonfinancialLiabilitiesLineItems [Line Items]
Current other non-financial liabilities	17,102	8,767
Tax on bank account transactions payable
DisclosureOfNonfinancialLiabilitiesLineItems [Line Items]
Non-current other non-financial liabilities	19,983	21,799
Current other non-financial liabilities	39,557	41,096
Other
DisclosureOfNonfinancialLiabilitiesLineItems [Line Items]
Current other non-financial liabilities	$ 1,357	$ 12,428

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15. Non-financial assets and liabilities (Details 2) - ARS ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Non-financial Assets And Liabilities Details 2
Non-current employee long-term benefits	$ 113,097	$ 87,705

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15. Non-financial assets and liabilities (Details 3) - ARS ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Non-financial Assets And Liabilities Details 3
Cost of interest	$ 20,857	$ 22,859
Cost of service for the current year	6,338	4,039
Past service cost	3,286	0
Expense recognized during the year	$ 30,481	$ 26,898

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15. Non-financial assets and liabilities (Details 4) - ARS ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Non-financial Assets And Liabilities Details 3
Defined benefit obligation at beginning of year	$ 87,705	$ 56,112
Cost of interest	20,857	22,859
Cost of service for the current year	6,338	4,039
Past service cost	3,286	0
Actuarial losses recognized in other comprehensive income	17,380	20,594
Benefits paid	(17,444)	(15,899)
Discontinued operations	(5,025)	0
Defined benefit obligation at end of year	$ 113,097	$ 87,705

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15. Non-financial assets and liabilities (Details 5)	Dec. 31, 2017	Dec. 31, 2016
Non-financial Assets And Liabilities Details 5
Discount rate	5.50%	6.50%
Increase in the real annual salary	2.00%	2.00%
Turn over of participants	0.73%	0.73%

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15. Non-financial assets and liabilities (Details 6) - ARS ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of defined benefit plans [line items]
Effect on the benefit obligation	$ 17,380	$ 20,594
Discount rate | One percentage point increase
Disclosure of defined benefit plans [line items]
Effect on the benefit obligation	(8,816)	(6,135)
Discount rate | One percentage point decrease
Disclosure of defined benefit plans [line items]
Effect on the benefit obligation	$ 10,111	$ 7,114

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15. Non-financial assets and liabilities (Details 7) - ARS ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of defined benefit plans [line items]
Effect on the benefit obligation	$ 17,380	$ 20,594
Annual salary assumed | One percentage point increase
Disclosure of defined benefit plans [line items]
Effect on the benefit obligation	9,333	6,600
Annual salary assumed | One percentage point decrease
Disclosure of defined benefit plans [line items]
Effect on the benefit obligation	$ (8,296)	$ (5,788)

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15. Non-financial assets and liabilities (Details 8) - ARS ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
DisclosureOfCompensationAndEmployeeBenefitsLiabilitiesLineItems [Line Items]
Short-term employee benefits	$ 323,078	$ 205,923
Vacation and statutory bonus
DisclosureOfCompensationAndEmployeeBenefitsLiabilitiesLineItems [Line Items]
Short-term employee benefits	119,196	88,647
Contributions payable
DisclosureOfCompensationAndEmployeeBenefitsLiabilitiesLineItems [Line Items]
Short-term employee benefits	50,113	39,204
Bonus accrual
DisclosureOfCompensationAndEmployeeBenefitsLiabilitiesLineItems [Line Items]
Short-term employee benefits	144,418	73,405
Other
DisclosureOfCompensationAndEmployeeBenefitsLiabilitiesLineItems [Line Items]
Short-term employee benefits	$ 9,351	$ 4,667

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16. Cash and cash equivalents (Details) - ARS ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Cash And Cash Equivalents Details
Cash at banks and on hand	$ 88,633	$ 30,008

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18. Provisions (Details) - ARS ($) $ in Thousands		12 Months Ended
		Dec. 31, 2017	Dec. 31, 2016
DisclosureOfProvisionsLineItems [Line Items]
Provisions, beginning		$ 466,686	$ 376,161
Increases		77,820	137,403
Recovery		0	(46,878)
Transfers		(131,032)	0
Provisions, ending		413,474	466,686
Non-current provisions | Provision for plant dismantling
DisclosureOfProvisionsLineItems [Line Items]
Provisions, beginning		125,201
Increases		5,831
Recovery		0
Transfers	[1]	(131,032)
Provisions, ending		0	125,201
Current provisions | Provision for lawsuits and claims
DisclosureOfProvisionsLineItems [Line Items]
Provisions, beginning		341,485
Increases		71,989
Recovery		0
Transfers		0
Provisions, ending		$ 413,474	$ 341,485

[1] Transferred to Liabilities associated with the assets held for sale (note 21).

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19. Information on related parties (Details) - ARS ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of transactions between related parties [line items]
Related party income	$ 3,587	$ 3,687	$ 668
Related party expenses	143,145	88,187	36,942
Related party receivables	17,524	14,230	27,736
Related party payables	$ 9,179	2,564	4,431
Related party 1
Disclosure of transactions between related parties [line items]
Name of related party	Termoeléctrica José de San Martín S.A.
Related party income	$ 180	180	150
Related party expenses	0	0	0
Related party receivables	19	19	19
Related party payables	$ 0	0	0
Related party 2
Disclosure of transactions between related parties [line items]
Name of related party	Distribuidora de Gas Cuyana S.A.
Related party income	$ 0	0	0
Related party expenses	46,793	23,019	9,858
Related party receivables	0	0	0
Related party payables	$ 7,251	2,564	807
Related party 3
Disclosure of transactions between related parties [line items]
Name of related party	Distribuidora de Gas del Centro S.A.
Related party income	$ 0	0	0
Related party expenses	0	92	2,923
Related party receivables	0	0	0
Related party payables	$ 0	0	3,624
Related party 4
Disclosure of transactions between related parties [line items]
Name of related party	Energía Sudamericana S.A.
Related party income	$ 0	257	388
Related party expenses	0	0	0
Related party receivables	20	260	16,907
Related party payables	$ 1,928	0	0
Related party 5
Disclosure of transactions between related parties [line items]
Name of related party	Transportadora de Gas del Mercosur S.A.
Related party income	$ 3,270	3,105	0
Related party expenses	0	0	0
Related party receivables	17,245	13,940	10,799
Related party payables	$ 0	0	0
Related party 6
Disclosure of transactions between related parties [line items]
Name of related party	RMPE Asociados S.A.
Related party income	$ 137	145	130
Related party expenses	96,352	65,076	24,161
Related party receivables	0	11	11
Related party payables	$ 0	$ 0	$ 0

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20. Financial risk management objectives and policies (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2017 ARS ($)
Increase in 500 basic points
DisclosureOfFinancialRiskManagementObjectivesAndPoliciesLineItems [Line Items]
Effect on income before income tax (loss)	$ (167,112)

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20. Financial risk management objectives and policies (Details 1) $ in Thousands	12 Months Ended
	Dec. 31, 2017 ARS ($)
10% Change in USD rate
DisclosureOfFinancialRiskManagementObjectivesAndPoliciesLineItems [Line Items]
Effect on income before income tax (loss)	$ (93,729)

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20. Financial risk management objectives and policies (Details 2) - ARS ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
DisclosureOfFinancialRiskManagementObjectivesAndPoliciesLineItems [Line Items]
CAMMESA borrowings and other loans and borrowings	$ 4,792,929	$ 3,625,683
Trade and other payables	1,017,306	655,598
Financial liabilities	5,810,234	4,281,281
Less than 3 months
DisclosureOfFinancialRiskManagementObjectivesAndPoliciesLineItems [Line Items]
CAMMESA borrowings and other loans and borrowings	233	294,692
Trade and other payables	1,015,369	654,929
Financial liabilities	1,015,602	949,621
3 to 12 months
DisclosureOfFinancialRiskManagementObjectivesAndPoliciesLineItems [Line Items]
CAMMESA borrowings and other loans and borrowings	2,258,409	2,046,208
Trade and other payables	1,936	669
Financial liabilities	2,260,345	2,046,877
1 to 5 years
DisclosureOfFinancialRiskManagementObjectivesAndPoliciesLineItems [Line Items]
CAMMESA borrowings and other loans and borrowings	2,534,287	1,284,783
Trade and other payables	0	0
Financial liabilities	$ 2,534,287	$ 1,284,783

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21. Discontinued operations (Details) - ARS ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Discontinued Operations Details
Revenues	$ 2,196,746	$ 1,757,692	$ 580,595
Cost of sales	(1,427,906)	(1,081,979)	(352,844)
Gross income	768,840	675,713	227,751
Administrative and selling expenses	(8,566)	(15,221)	(7,924)
Other operating income	0	27,770	6,170
Other operating expenses	(10,737)	0	(1,259)
Operating income	749,537	688,262	224,738
Finance expense	(339)	(14,455)	(21,878)
Income before income tax from discontinued operations	749,198	673,807	202,860
Income tax for the year	(264,157)	(235,833)	(71,001)
Income for the year from discontinued operations	$ 485,041	$ 437,974	$ 131,859

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21. Discontinued operations (Details 1) - ARS ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
DisclosureOfDiscontinuedOperationsLineItems [Line Items]
Assets held for sale	$ 143,014	$ 0
Labilities associated with assets held for sale	(129,161)	$ 0
Net assets held for sale	13,853
Deferred income tax liabilities
DisclosureOfDiscontinuedOperationsLineItems [Line Items]
Labilities associated with assets held for sale	6,282
Compensation and employee benefits liabilities
DisclosureOfDiscontinuedOperationsLineItems [Line Items]
Labilities associated with assets held for sale	(4,411)
Provisions
DisclosureOfDiscontinuedOperationsLineItems [Line Items]
Labilities associated with assets held for sale	(131,032)
Property, plant and equipment
DisclosureOfDiscontinuedOperationsLineItems [Line Items]
Assets held for sale	116,923
Inventories
DisclosureOfDiscontinuedOperationsLineItems [Line Items]
Assets held for sale	$ 26,091

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21. Discontinued operations (Details 2) - ARS ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Discontinued Operations Details 2
Cash flows from operating activities, discontinued operations	$ 820,955	$ 564,937	$ 220,165

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21. Discontinued operations (Details 3) - $ / shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Discontinued Operations Details 3
Basic and diluted income per share from discontinued operations	$ .32	$ .29	$ .09