2020 Annual Report

2020 ANNUAL REPORT CONSOLIDATED FINANCIAL STATEMENTS 2020 2019 b) Credit risk MEGACABLE. Assets Liabilities Net position S S 122,006 (23,963) 98,043 34,292 (28,015) 6,277 The exchange rates used in the different translation processes in relation to the reporting currency as at December 31, 2020 and 2019 are as follows: United States of America iii. Price risk Currency U.S. dollar $ Exchange rate 2020 2019 19.9352 18.8727 The Group is not exposed to price risk for the costs of the services it provides, since they are not subject to market indices. In like manner, there were no relevant changes to the prices of the supplies acquired for the provision of the service during 2020 and 2019. iv. Cash flow risk related to the interest rate The interest rate risk for the Group arises from its long-term loans. Variable rate loans expose the Group to interest rate risk on its cash flows, which is partially offset by government debt financial instruments such as low-risk Treasury Certificates (CETES) with moderate returns. The Group analyzes its exposure to interest rate risk dynamically. Various situations are simulated taking into account the positions regarding refinancing, renewal of existing positions, alternative financing and coverage. Based on these scenarios, the Group calculates the impact on profit or loss of a defined movement in interest rates. In each simulation, the same movement defined in interest rates is used for all currencies. These simulations are only performed in the case of obligations that represent the main positions that generate interest. Based on the simulations carried out at variable rates, the impact on profit after taxes as at December 31, 2020 and 2019 due to a 1% movement would generate a maximum increase or a decrease of $29,056 and $30,758, respectively. Simulations are prepared quarterly to verify that the maximum potential loss is within the limit established by Management. As at December 31, 2020 and 2019, the Group has fixed rate and variable rate loans. Credit risk is managed at the Group level, including the credit risk of receivables; however, each company is responsible for analyzing the credit risk of each customer before offering payments, delivery terms, and other conditions. Credit risk arises from cash and cash equivalents, and deposits in banks and financial institutions, as well as credit exposure to customers, which include outstanding balances of accounts receivable and agreed transactions. Regarding banks and financial institutions, only institutions with a solid operating track record and that have an excellent reputation in the market are accepted. In the case of the portfolio, the credit risk is limited, since the amounts to be recovered basically refer to the monthly payments of the services provided and the fact that there is no significant concentration of the portfolio due to the large number of subscribers comprising it. Irrespective of the above, the portfolio department assesses the customers' creditworthiness, taking into account their financial position (personal bank statements, credit cards, and others) and past experience, among other factors. Credit limits are generally established in accordance with the limits set by the Board of Directors based on the historical information available on the behavior of the portfolio and, where appropriate, of certain internal and/or external ratings. The use of credit limits is monitored on a regular basis. The credit limits were not exceeded during the reporting period and Management does not expect the Group to incur any losses due to its performance. Lastly, the maximum exposure to credit risk is limited to the carrying amount of each of account receivable (see table below). Consequently, the Group does not have a significant concentration of credit risk. Creditworthiness of financial assets Accounts receivable: Group 1 Group 2 Total of trade receivables Related parties Group 1 Group 2 Total of trade receivables $ es 2020 2020 678,792 125,971 804,763 2019 2019 674,343 101,450 775,793 1,151,542 $ 978,473 978,473 $ 1,151,542 49

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