Compañía de Transporte de Energía Electrica en Alta Tensión Transener S A : Consolidated Financial Statements 31-12-2020

Compañía de Transporte de Energía

Eléctrica en Alta Tensión Transener S.A.

Consolidated Financial Statements as of December 31, 2020 and for the fiscal years ended December 31, 2020 and 2019

Free translation from the original prepared in Spanish for publication in Argentina

Compañía de Transporte de Energía Eléctrica en Alta Tensión Transener S.A.

Index to Consolidated Statements
	Page
Report of Independent Auditors ..................................................................................................................	2
Consolidated Statements of Operations for the fiscal years ended December 31, 2020 and 2019..............	7
Consolidated Balance Sheets as of December 31, 2020 and 2019 ..............................................................	8
Consolidated Statements of Changes in Equity for the fiscal years ended December 31, 2020 and 2019.	9
Consolidated Statements of Cash Flows for the fiscal years ended December 31, 2020 and 2019 ............	10
Notes to the Consolidated Financial Statements ........................................................................................	12

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Free translation from the original in Spanish published in Argentina.

Auditor's report issued by independent auditors

To the Shareholders, President and Directors of

Compañía de Transporte de Energía Eléctrica en

Alta Tensión Transener S.A.

Legal address: Paseo Colón 728 - 6th floor

City of Buenos Aires

Tax Code No. 30-66314877-6

Report on the Audit of the Consolidated Financial Statements

Opinion

We have audited the accompanying consolidated financial statements of Compañía de Transporte de Energía Eléctrica en Alta Tensión Transener S.A. and its subsidiary (the "Company"), including the consolidated statement of financial position at December 31, 2020 and the consolidated statements of comprehensive income, of changes in equity and cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of the most significant accounting policies and other explanatory information.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company at December 31, 2020 and its consolidated comprehensive income and its consolidated cash flows for the year then ended, in accordance with International Financial Reporting Standards (IFRS)..

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Those standards have been adopted as auditing standards in Argentina by Technical Pronouncement No. 32 of the Argentine Federation of Professional Councils in Economic Sciences (FACPCE), and approved by the International Auditing and Assurance Standards Board (IAASB). Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Consolidated Financial Statements section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Independence

We are independent of the Company in accordance with the International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA Code) together with requirements that are relevant to our audit of the financial statements in Argentina, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code.

Price Waterhouse & Co. S.R.L., Bouchard 557, 8th floor , C1106ABG - City of Buenos Aires T: +(54.11) 4850.0000, F: +(54.11) 4850.1800, www.pwc.com/ar

Price Waterhouse & Co. S.R.L. is a member firm of the global network of PricewaterhouseCoopers International Limited (PwCIL). Each of the firms is a separate legal entity and does not act as agent of PwCIL or any other member firm of the Network.

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Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the current year. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters

Long-termnon-financial assets recoverability

As of December 31, 2020, the Company had long-termnon-financial assets recorded for $ 31,332,583. As mentioned in Note 3.7 to the consolidated financial statements, the Company analyzes its long-term non- financial assets recoverability on a regular basis or when there are events or changes in circumstances that imply a potential indication of impairment of the value of assets with respect to their recoverable value, measured as the value in use at year end. The value in use is calculated based on discounted projected cash flows. The cash flow is prepared based on estimates regarding the future behavior of certain variables that are sensitive in determining the recoverable value, among which the following stand out: (i) nature, timing and method of the rate increases; (ii) demand projections; (iii) changes in the costs to be incurred, (iv) macroeconomic variables such as growth rates, inflation rates, exchange rates, (v) discount rate, among others. In addition, to compare between the expected cash flow and the carrying value of long-termnon-financial assets, the Company has weighted scenarios according to the probabilities of occurrence to determine the expected use value.

Audit response

The audit procedures performed included the following, among others:

• evaluate the estimation methodology;
• test the significant assumptions, such as the (i) nature, timing and modality of the rate increases; (ii) demand projections; (iii) changes in the costs to be incurred, (iv) macroeconomic variables such as growth rates, inflation rates, exchange rates, (v) discount rate, and test the completeness, precision and importance of the underlying data used. Significant assumptions were compared with available economic trend data;
• we assessed the historical experience of Management's estimates, the weighting of the defined scenarios, as well as the sensitivity analyses of significant assumptions to evaluate the changes in value in use that would result from changes in the assumptions;
• test the arithmetic accuracy of the discounted cash flow model;
• and evaluate the completeness of the disclosures in the consolidated financial statements.

This is a key issue because it involves the application of critical judgment and significant estimates by Management, which are subject to uncertainty and future events. In addition, a great extent of professional judgment and efforts were required from the auditor to evaluate Management's cash flow projections and test significant assumptions.

Professionals with dedicated skills and knowledge were engaged in the evaluation of the methodology and the significant assumptions used in the projected cash flows estimated by Management.

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Information that accompanies the Consolidated Financial Statements ("Other Information")

The Other Information comprises the annual report and summary of activity. The Board of Directors is responsible for the Other Information.

Our opinion on the consolidated financial statements will not cover the Other Information and, therefore, we do not express any audit conclusion.

In relation to our audit of the consolidated financial statements, our responsibility is to read the Other Information and when doing so, considering whether the other information contained is materially inconsistent with the consolidated financial statements or with our knowledge obtained in the audit or if for any other reason it appears to contain a material misstatement. If, based on the work performed, we consider that, as regards our field of competence, there is a material misstatement in the Other Information, we have to report it. We have nothing to report in this regard.

Board of Directors' and Audit Committee's Responsibilities for the Consolidated Financial Statements

The Board of Directors of Compañía de Transporte de Energía Eléctrica en Alta Tensión Transener S.A. is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS, and for the internal control the Board of Directors may deem necessary to prepare consolidated financial statements that are free of material misstatement, whether due to fraud or error.

In preparing these consolidated financial statements, the Board is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the Board either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so..

The Audit Committee is responsible for overseeing the process of preparation of Company's financial reporting.

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

The objective of our audit is to obtain reasonable assurance that the consolidated financial statements as a whole are free of material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISA will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions taken by users on the basis of these consolidated financial statements.

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