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CASH AND CASH EQUIVALENTS AND INVESTMENTS. ADDITIONAL INFORMATION ON THE CONSOLIDATED STATEMENTS OF CASH FLOWS | 12 Months Ended
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Dec. 31, 2020
CASH AND CASH EQUIVALENTS AND INVESTMENTS. ADDITIONAL INFORMATION ON THE CONSOLIDATED STATEMENTS OF CASH FLOWS |
CASH AND CASH EQUIVALENTS AND INVESTMENTS. ADDITIONAL INFORMATION ON THE CONSOLIDATED STATEMENTS OF CASH FLOWS | NOTE 4 – CASH AND CASH EQUIVALENTS AND INVESTMENTS. ADDITIONAL INFORMATION ON THE CONSOLIDATED STATEMENTS OF CASH FLOWS a) Cash and cash equivalents and Investments
|  | As of December 31,
|  | 2020 |  | 2019
Cash and cash equivalents |  |  |  |
Cash and Banks |  | 4,645 |  | 2,339
Time deposits |  | 3,546 |  | 957
Mutual funds (a) |  | 8,797 |  | 31,531
Government bonds at fair value |  | 1,539 |  | —
Total cash and cash equivalents |  | 18,527 |  | 34,827
Investments |  |  |  |
Current |  |  |  |
Government bonds at fair value |  | 5,054 |  | 404
Government bonds at amortized cost |  | 126 |  | 180
Mutual funds (a) |  | 1,442 |  | 87
Allowance for credit risk (b) |  | (80) |  | (87)
Total current investments |  | 6,542 |  | 584
Non- current |  |  |  |
Government bonds at amortized cost |  | 342 |  | 2,692
Investments in associates (c) |  | 2,026 |  | 1,531
2003 Telecommunications Fund |  | 1 |  | 1
Allowance for credit risk (b) |  | (217) |  | (1,333)
Total non-current investments |  | 2,152 |  | 2,891
Total investments |  | 8,694 |  | 3,475
| (a) |  | As of December 31, 2020, includes $194 in Cash and cash equivalents which availability is restricted between 30 and 60 days, according to contractual provisions and $1,372 in Investments in guarantee of financial operations.
| (b) |  | Constituted following the expected credit losses parameters provided by IFRS 9 as a consequence of a significant increase in these financial instruments’ credit risk.
| (c) |  | Information on Investments in associates is detailed below:
Financial position information:
|  |  |  |  |  | Percentage of capital |  |  |  |
|  |  |  |  |  | stock owned and |  | Valuation as of |  | Valuation as of
Companies |  | Main activity | Country | voting rights |  | 12.31.2020 |  | 12.31.2019
Ver TV. (1) |  | Cable television station |  | Argentina |  | 49.00 |  | 1,219 |  | 847
TSMA (1) (2) (3) |  | Cable television station |  | Argentina |  | 50.10 |  | 454 |  | 344
La Capital Cable (1) (2) |  | Closed-circuit television |  | Argentina |  | 50.00 |  | 348 |  | 334
Other minor investments in associates at equity method (4) |  |  |  |  |  |  |  | 5 |  | 6
Total |  |  |  |  |  |  |  | 2,026 |  | 1,531
| (1) |  | Data about the issuer arise from extra-accounting information.
| (2) |  | Direct and indirect interest.
| (3) |  | Despite owning a percentage higher than a 50% of interest, the Company does not have the control in accordance with the requirements of IFRS.
| (4) |  | The variation is included in Other financial results, net - RECPAM.
Earnings (losses) information:
|  | Years ended December 31,
|  | 2020 |  | 2019 |  | 2018
Ver TV |  | 372 |  | (223) |  | 297
TSMA |  | 110 |  | (59) |  | 151
La Capital Cable |  | 14 |  | 27 |  | 46
Total |  | 496 |  | (255) |  | 494
Movements in the allowance of current credit risk are as follows:
|  | December 31,
|  | 2020 |  | 2019
At the beginning of the fiscal year |  | (87) |  | —
Additions – Exchange differences |  | (50) |  | —
Additions – Risk of doubtful government bonds results |  | (16) |  | (1,552)
Reclassifications |  | (503) |  | —
Uses (includes RECPAM) |  | 576 |  | 1,465
At the end of the year |  | (80) |  | (87)
Movements in the allowance of non-current credit risk are as follows:
|  | December 31,
|  | 2020 |  | 2019
At the beginning of the fiscal year |  | (1,333) |  | —
Additions – Exchange differences |  | (220) |  | —
Additions – Risk of doubtful government bonds results |  | (42) |  | (1,945)
Reclassifications |  | 503 |  | —
Uses (includes RECPAM) |  | 875 |  | 612
At the end of the year |  | (217) |  | (1,333)
Restructuring of Government Bonds In April 2020, the PEN, through Decree No. 391/20 and the Government of the Province of Buenos Aires, established a restructuring of certain National and Provincial Government Bonds issued under foreign law through the invitation to lenders to exchange those bonds for others, subject to new issuance conditions. Furthermore, the exchange offer for the restructuring of foreign currency-denominated government bonds issued under argentine law was approved in August 2020. In May, July and August 2020, the Company submitted several exchange offers of its bonds portfolio that could be exchanged, in accordance with the established conditions and procedures provided to each case. The exchange of the National and Provincial Bonds issued under foreign and argentine laws took place in early September 2020. As of the date of these consolidated financial statements, the exchange of the Province of Buenos Aires Government Bonds was still pending. b) Additional information on the consolidated statements of cash flows The Company applies the indirect method to reconcile the net income for the year with the cash flows generated by its operations. For purposes of the consolidated statements of cash flows, cash and cash equivalents comprise cash, bank current accounts and short-term highly liquid investments (with a maturity of three months or less from the date of acquisition). Bank overdrafts are disclosed in the consolidated statement of financial position as financial debts and its flows in the cash flow statements as proceed and payment of financial debt, because they are part of the short-term financial structure of Telecom and its subsidiaries. Changes in assets/liabilities components:
|  | December 31,
|  | 2020 |  | 2019 |  | 2018
Net (increase) decrease in assets |  |  |  |  |  |
Trade receivables |  | (7,313) |  | 4,441 |  | (8,570)
Other receivables |  | (647) |  | 154 |  | (1,872)
Inventories |  | (197) |  | 633 |  | (23)
|  | (8,157) |  | 5,228 |  | (10,465)
Net decrease in liabilities |  |  |  |  |  |
Trade payables |  | (7,019) |  | (23,095) |  | (16,393)
Salaries and social security payables |  | 476 |  | 1,733 |  | 592
Taxes payables |  | 1,135 |  | 1,339 |  | (4,253)
Other liabilities and provisions |  | (5,800) |  | (5,648) |  | (4,878)
|  | (11,208) |  | (25,671) |  | (24,932)
Main Financing activities components The following table presents the main financing activities components:
Bank overdrafts |  | — |  | 10,925 |  | 4,558
Notes |  | 28,075 |  | 30,660 |  | —
Bank and other financial entities loans |  | 24,830 |  | 36,723 |  | 53,600
Loans for purchase of equipment |  | 3,123 |  | 1,344 |  | —
Total financial debt proceeds |  | 56,028 |  | 79,652 |  | 58,158
Bank overdrafts |  | (6,908) |  | (1) |  | —
Notes |  | (9,621) |  | (4,162) |  | (8,178)
Bank and other financial entities loans |  | (46,624) |  | (45,532) |  | (701)
Loans for purchase of equipment |  | (2,240) |  | — |  | (570)
Total payment of debt |  | (65,393) |  | (49,695) |  | (9,449)
Bank overdrafts |  | (3,967) |  | (1,321) |  | (197)
Notes |  | (5,701) |  | (1,537) |  | (3,161)
Bank and other financial entities loans |  | (9,038) |  | (9,699) |  | (5,000)
By NDF, purchase of equipment and others |  | (2,145) |  | 1,811 |  | 560
Total payment of interest and related expenses |  | (20,851) |  | (10,746) |  | (7,798)
Main non-cash operating transactions Main non-cash operating transactions and that were eliminated from the consolidated statement of cash flows are the following:
PP&E and intangible assets acquisition financed with accounts payable |  | 19,652 |  | 20,922 |  | 18,906
Dividends payment with investments not considered as cash and cash equivalents |  | 25,713 |  | — |  | —
Accounts payable payment with CDB loan proceeds |  | 249 |  | — |  | —
Other receivables offset with income tax liabilities |  | 26 |  | — |  | —
Trade receivables offset with government bonds |  | 468 |  | — |  | —
Cash dividends collected Brief information on cash dividends collected by the Company is provided below:
|  |  |  | Cash Dividends Collected
|  |  |  |  |  | Current currency
|  |  |  | Currency of the |  | as of December 31,
Year |  | Company |  | transaction date |  | 2020
2020 |  | Ver TV |  | 50 |  | 57
|  | TSMA |  | 21 |  | 23
|  |  |  | 71 |  | 80
2019 |  | Ver TV |  | 97 |  | 172
|  | TSMA |  | 41 |  | 72
|  | La Capital Cable |  | 5 |  | 8
|  |  |  | 143 |  | 252
2018 |  | Ver TV |  | 18 |  | 56
|  | TSMA |  | 8 |  | 23
|  | La Capital Cable |  | 15 |  | 38
|  |  |  | 41 |  | 117
Cash and non-cash assets dividends from the Company and its subsidiaries Non-cash assets dividends Telecom Argentina’s General Extraordinary Shareholders’ Meeting held on November 13, 2020 resolved to distribute non- cash assets dividends as follows: i) Global Bonds of the Argentine Republic amortizable in US dollars maturing on July 9, 2030 (the “2030 Global Bonds”), for a nominal value of US$157,642,897, and ii) Global Bonds of the Argentine Republic amortizable in US dollars maturing on July 9, 2035 (the “2035 Global Bonds”) for a nominal value of US$271,896,177. Consequently, and considering that the valuation of the mentioned non-cash assets dividends was $24,723,374,678 Argentine pesos ($25,713 in current currency as of December 31, 2020), the “Voluntary Reserve for Future Cash Dividends” amounting to $6,600 in current currency as of December 31, 2020 was fully withdraw and the “Voluntary Reserve to maintain the Company’s level of investments in capital assets and the current level of solvency” was partially withdraw in $19,113 in current currency as of December 31, 2020. Brief information on cash dividends of the Company and its subsidiaries is provided below:
|  |  |  |  |  | Distributed amount |  |  |  | Amount paid in
|  |  |  |  |  |  |  |  | Current currency |  |  |  | current currency
|  |  |  |  |  | Currency of the |  | as of December 31, |  |  |  | as of December
Year |  | Company |  | Distribution month |  | transaction date |  | 2020 |  | Payment month |  | 31, 2020
2020 |  | Núcleo |  | April 2020 |  |  | 295 |  | 367 |  | May 2020 |  | 191
|  | Núcleo |  | April 2020 |  |  | — |  | — |  | October 2020 |  | 176
|  |  |  |  |  |  | 295 |  | 367 |  |  |  | 367
2019 |  | Telecom |  | April 2019 |  |  | 6,300 |  | 11,798 |  | May 2019 |  | 11,072
|  | Telecom |  | August 2019 |  |  | 7,045 |  | 11,346 |  | August 2019 |  | 11,346
|  | Telecom |  | October 2019 |  | (1) | 17,387 |  | 25,603 |  | October 2019 |  | 25,603
|  | Núcleo |  | April 2019 |  |  | 197 |  | 356 |  | May 2019 |  | 347
|  |  |  |  |  |  | 30,929 |  | 49,103 |  |  |  | 48,368
2018 |  | Telecom |  | December 2017 |  |  | - |  | - |  | January 2018 |  | 12,386
|  | Telecom |  | January 2018 |  | (2) | 13,007 |  | 39,508 |  | February 2018 |  | 38,580
|  | Telecom |  | January 2018 |  |  | 6,866 |  | 20,857 |  | March 2018 |  | 19,909
|  | Núcleo |  | April 2018 |  |  | 135 |  | 381 |  | March 2018 |  | 380
|  |  |  |  |  |  | 20,008 |  | 60,746 |  |  |  | 71,255
(1) The General Ordinary Shareholders’ Meeting held on October 10, 2019 resolved to distribute US$300 million in cash dividends to be paid in US dollars (freely available) equivalent to $17,387 according to the exchange rate of BCRA Com “A” 3,500 issued on October 9, 2019 ($57.9). (2) Includes $5,641 and $4,503 of anticipated cash dividends pursuant to Section 224, 2nd paragraph of the LGS related to the net income (liquid and realized) of the period January 1st, 2017 and September 30, 2017 arising from the Telecom Argentina’s and Cablevision’s stand-alone basis financial statements as of September 30, 2017, respectively, that were subsequently ratified by the General Ordinary Shareholders’ Meeting held on April 25, 2018. Additional information required by IAS 7
|  |  |  |  |  |  |  | Exchange |  |
|  |  |  |  |  |  |  | differences |  |
|  | Balances |  |  |  |  |  | , currency |  | Balances
|  | as of |  |  |  |  |  | translation |  | as of
|  | December 31, |  | Cash |  |  |  | adjustments and |  | December 31,
|  | 2019 |  | Flows |  | Accrued interest |  | others |  | 2020
Bank overdrafts |  | 13,219 |  | (6,908) |  | — |  | (2,358) |  | 3,953
Securities' caution - principal |  | 419 |  | (313) |  | — |  | (106) |  | —
Bank and other financial entities loans – principal |  | 95,552 |  | (21,481) |  | — |  | (*) 6,992 |  | 81,063
Notes - principal |  | 55,171 |  | 18,454 |  | — |  | (3,303) |  | 70,322
NDF |  | 510 |  | (1,831) |  | — |  | 1,848 |  | 527
Loans for purchase of equipment |  | 5,705 |  | 883 |  | — |  | 28 |  | 6,616
Accrued interest and related expenses |  | 36,352 |  | (19,195) |  | 13,974 |  | 6,588 |  | 37,719
Total current and non-current financial debt (Note 13) |  | 206,928 |  | (30,391) |  | 13,974 |  | 9,689 |  | 200,200
(*) Includes $249 of loans with the CDB Bank (Note 13) that do not represent cash movement.
|  |  |  |  |  |  |  | Exchange |  |
|  |  |  |  |  |  |  | differences |  |
|  | Balances |  |  |  |  |  | , currency |  | Balances
|  | as of |  |  |  |  |  | translation |  | as of
|  | December 31, |  | Cash |  |  |  | adjustments and |  | December 31,
|  | 2018 |  | Flows |  | Accrued interest |  | others |  | 2019
Bank overdrafts |  | 4,766 |  | 10,924 |  | — |  | (2,471) |  | 13,219
Securities' caution - principal |  | — |  | 419 |  | — |  | — |  | 419
Bank and other financial entities loans – principal |  | 98,863 |  | (9,228) |  | — |  | 5,917 |  | 95,552
Notes – principal |  | 33,669 |  | 26,498 |  | — |  | (4,996) |  | 55,171
NDF |  | 209 |  | (1,195) |  | — |  | 1,496 |  | 510
Loans for purchase of equipment |  | 4,354 |  | 1,344 |  | — |  | 7 |  | 5,705
Accrued interest and related expenses |  | 24,247 |  | (12,721) |  | 15,109 |  | 9,717 |  | 36,352
Total current and non-current financial debt (Note 13) |  | 166,108 |  | 16,041 |  | 15,109 |  | 9,670 |  | 206,928

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