SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN ISSUER

Pursuant to Rule 13a-16 or 15d-16 of

The Securities Exchange Act of 1934

For June 30, 2013

MetroGas Inc.

(Translation of registrant’s name into English)

MetroGAS S.A.

Gregorio Araoz de Lamadrid 1360

(1267) Buenos Aires, Argentina

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F x Form 40-F o

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:

Yes o No x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

METROGAS S.A.



Dated: August 29, 2013
	By:	/s/ Marcelo Adrián Nuñez
	Name:	Marcelo Adrián Nuñez
	Title:	CEO

METROGAS S.A.

UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL

STATEMENTS AS OF JUNE 30, 2013 AND FOR THE SIX MONTHS

PERIOD ENDED JUNE 30, 2013 AND 2012

TABLE OF CONTENTS

LEGAL INFORMATION		1
UNAUDITED CONDENSED INTERIM CONSOLIDATED BALANCE SHEET		2
UNAUDITED CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPRENHENSIVE INCOME FOR THE SIX AND THREE MONTHS PERIOD ENDED JUNE 30, 2013 AND COMPARATIVES		3
UNAUDITED CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER´S EQUITY		4
UNAUDITED CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS		5
1.	GENERAL INFORMATION	6
2.	ECONOMIC AND FINANCIAL POSITION AND REGULATORY FRAMEWORK	6
3.	BASIS FOR PRESENTATION AND ADOPTION OF THE INTERNATIONAL FINANCIAL REPORTING STANDARDS (“IFRS”)	9
4.	ACCOUNTING POLICIES	17
5.	KEY ACCOUNTING ESTIMATES AND JUDGMENTS	18
6.	FINANCIAL RISK MANAGEMENT	18
7.	SEGMENT REPORTING	18
8.	PROPERTIES, PLANT AND EQUIPMENT	20
9.	INVESTMENT PROPERTIES	21
10.	INTERESTS IN SUBSIDIARIES	22
11.	TRADE RECEIVABLES AND OTHER RECEIVABLES	22
12.	ADVANCE PAYMENTS	23
13.	CASH AND CASH EQUIVALENTS	23
14.	CAPITAL STOCK	23
15.	OTHER TAXES PAYABLE	24
16.	FINANCIAL DEBT	24
17.	REORGANIZATION LIABILITIES	26
18.	PROVISIONS	27
19.	TRADE PAYABLES AND OTHER ACCOUNTS PAYABLE	27
20.	SALARIES AND SOCIAL SECURITY	28
21.	FINANCIAL ASSETS AND LIABILITIES	28
22.	REVENUES	30
23.	EXPENSES BY NATURE	30
24.	NET FINANCIAL RESULTS	31
25.	INCOME TAX AND MINIMUM PRESUMED INCOME TAX	32
26.	NET RESULT PER SHARE	32
27.	BALANCES AND TRANSACTIONS WITH RELATED PARTIES	33
28.	SUBSEQUENTS EVENTS	37
ANNEX I – ADDITIONAL INFORMATION AS OF DECEMBER 31, 2012 AND JANUARY 1, 2012		38
INFORMATIVE SUMMARY OF ACTIVITY		92
INDEPENDENT AUDITORS’ REPORT		104

METROGAS S.A.

UNAUDITED CONDENSED INTERIM FINANCIAL CONSOLIDATED STATEMENTS AS OF JUNE 30, 2013 AND COMPARATIVES

LEGAL INFORMATION

Legal Address: Gregorio Aráoz de Lamadrid 1360, Ciudad Autónoma de Buenos Aires, Argentina.

Fiscal Year N° 22 (commenced on January 1° 2013).

Condensed Consolidated Interim Financial Statements as of June 30, 2013 and comparatives.

Company’s Principal Business: provision of natural gas distribution services

Registration with the Public Registry of Commerce: December 1, 1992

Expiry Date of the Articles of Incorporation: December 1, 2091

Last Amendment of the By-Laws: April 30, 2013 (Registration is pending).

Parent Company: YPF S.A. (See Note 2.1)

Legal Address of the controlling company: Macacha Güemes 515, Ciudad Autónoma de Buenos Aires, Argentina.

Principal Business of the controlling company: study, exploration and exploitation of liquid and/or gaseous hydrocarbons and other minerals, as well as the industrialization, transportation and marketing of these products and their byproducts, also including petrochemical products, and non-fossil fuels and chemicals, biofuels and their components, electric power generation based on hydrocarbons, telecommunication services, as well as production and industrialization, processing, marketing, conditioning services, grain transportation and storage and their byproducts.

Percentage of votes held by parent company: 70%

Composition and changes in Common Stock as of 06.30.13:

Classes of Shares	Subscribed, Registered and Paid-in (thousands of Ps.)
Outstanding
Common certified shares of Ps. 1 par value and 1 vote each:
Class “A”	290,277
Class “B”	221,977
Class “C”	56,917
Capital Stock as of 06.30.13	569,171

METROGAS S.A.

UNAUDITED CONDENSED INTERIM CONSOLIDATED BALANCE SHEET

AS OF JUNE 30, 2013 AND COMPARATIVES

(Stated in thousands of pesos)

	Notes		06.30.13		12.31.12		01.01.12
Assets
Non current Assets
Properties, plant and equipment		8	1,803,000		1,780,930		1,751,516
Deferred income tax assets			903		751		443
Other investment			721		646		445
Investment properties		9	5,399		5,459		5,578
Advance payments		12	97		335		332
Total Non current assets			1,810,120		1,788,121		1,758,314
Current Assets
Advance payments		12	10,154		16,352		11,588
Trade receivables and other receivables		11	446,360		262,821		237,729
Cash and cash equivalents		13	181,206		153,208		207,278
Total Current assets			637,720		432,381		456,595
Total assets			2,447,840		2,220,502		2,214,909
Shareholders’ Equity
Capital stock		14	569,171		569,171		569,171
Adjustment capital stock			684,769		684,769		684,769
Legal Reserve			45,376		45,376		45,376
Unappropriated retained earnings			(735,292	)	(1,133,018	)	(954,272	)
Equity attributable to the owners			564,024		166,298		345,044
Non controlling interest			910		989		1,071
Total Shareholders’ Equity			564,934		167,287		346,115
Liabilities
Non current Liabilities
Other taxes payable		15	8,455		8,996		–
Reorganization liabilities		17	17,740		1,429,301		1,319,615
Financial debt		16	752,208		–		–
Deferred income tax liabilities		25	262,288		52,072		126,907
Provisions		18	104,055		102,025		91,067
Total Non current Liabilities			1,144,746		1,592,394		1,537,589
Current Liabilities
Trade payable and other accounts payable		19	603,850		345,466		246,281
Salaries and social security		20	47,022		49,286		39,425
Income tax and minimum presumed income tax (“MPIT”) liability			14,050		10,271		15,657
Other taxes payable		15	73,041		55,798		29,842
Financial debt		16	197		–		–
Total Current Liabilities			738,160		460,821		331,205
Total Liabilities			1,882,906		2,053,215		1,868,794
Total Liabilities and Shareholders’ Equity			2,447,840		2,220,502		2,214,909

David Tezanos Gonzalez

Chairperson

METROGAS S.A.

UNAUDITED CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE SIX AND THREE MONTHS PERIOD ENDED JUNE 30, 2013 AND COMPARATIVES

(Stated in thousands of pesos)

			For the six months period ended					For the three months period ended
	Notes			06.30.13		06.30.12			06.30.13		06.30.12
Revenues		22		649,953		569,228			369,439		312,647
Operating costs		23		(435,020	)	(422,404	)		(247,240	)	(241,444	)
Gross profit				214,933		146,824			122,199		71,203
Administrative and selling expenses		23		(232,263	)	(186,443	)		(126,624	)	(103,185	)
Other income and expenses				1,731		3,084			978		1,199
Operating loss				(15,599	)	(36,535	)		(3,447	)	(30,783	)
Financial income		24		12,256		18,256			5,898		9,907
Financial cost		24		(129,375	)	(70,598	)		(72,372	)	(40,009	)
Net financial results				(117,119	)	(52,342	)		(66,474	)	(30,102	)
Debt restructuring result		16		757,470		–			–		–
Result before income tax				624,752		(88,877	)		(69,921	)	(60,885	)
Income tax		25		(227,105	)	(3,083	)		20,968		(204	)
Net and comprehensive result for the period				397,647		(91,960	)		(48,953	)	(61,089	)

Net and comprehensive result for the period controlling interest				397,726		(91,769	)		(48,525	)	(60,318	)
Net and comprehensive result for the period non-controlling interest				(79	)	(191	)		(428	)	(771	)
Net and comprehensive result for the period				397,647		(91,960	)		(48,953	)	(61,089	)

Net and comprehensive result per share		26		0.70		(0.16	)		(0.09	)	(0.11	)
Basic

David Tezanos Gonzalez

Chairperson

METROGAS S.A.

UNAUDITED CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER´S EQUITY

FOR THE SIX MONTHS PERIOD ENDED JUNE 30, 2013 AND COMPARATIVES

(Stated in thousands of pesos)

	Capital stock		Adjustment capital stock		Legal reserve		Unappropriated retained earnings			Equity attributable to the owners			Non controlling interest			Total Shareholders’ Equity

Balance as of 01.01.2012		569,171		684,769		45,376		(954,272	)		345,044			1,071			346,115

Net and comprehensive result for the six months period ended 06.30.12		–		–		–		(91,769	)		(91,769	)		(191	)		(91,960	)

Balance as of 06.30.2012		569,171		684,769		45,376		(1,046,041	)		253,275			880			254,155

Net and comprehensive result for the six months period ended 12.31.12		–		–		–		(86,977	)		(86,977	)		109			(86,868	)

Balance as of 12.31.2012		569,171		684,769		45,376		(1,133,018	)		166,298			989			167,287

Net and comprehensive result for the six months period ended 06.30.13		–		–		–		397,726			397,726			(79	)		397,647

Balance as of 06.30.2013		569,171		684,769		45,376		(735,292	)		564,024			910			564,934

David Tezanos Gonzalez

Chairperson

METROGAS S.A.

UNAUDITED CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS PERIOD ENDED JUNE 30, 2013 AND COMPARATIVES

(Stated in thousands of pesos).

	06.30.13		06.30.12
Cash Flows provided by operating activities
Total comprehensive result for the period	397,647		(91,960	)
Adjustments to reconcile net results to cash flows provided by operating activities
Income tax accrued during the period	227,105		3,083
Depreciation of properties, plant and equipment and investment property	39,692		37,629
Net book value of fixed assets retired	4,885		259
Provisions	2,736		1,872
Debt restructuring result(2)	(770,360	)	–
Net Financial Results	117,129		54,230
Exchange differences on cash and cash equivalents	1,604		(2,286	)
Changes in assets and liabilities
Trade receivables and other receivables	(183,541	)	(70,842	)
Advance payments	6,436		7,146
Deferred income tax creditors	(152	)	(245	)
Trade payable and other accounts payable	255,021		46,644
Other non current investments	(75	)	(151	)
Salaries and social security	(2,264	)	(491	)
Income tax and minimum presumed income tax (“MPIT”) liability	(237	)	(2,181	)
Other taxes payable	12,015		19,063
Provisions	(5	)	(900	)
Deferred income tax liabilities	(7,254	)	(16,751	)
Reorganization liabilities	(150	)	907
Income tax and minimum presumed income tax (“MPIT”) paid in the period	(933	)	–
Net cash flows provided by (used in) operating activities	99,299		(14,974	)

Cash flows used in investing activities
Increase in properties, plant and equipment	(66,588	)	(44,874	)
Net cash flows used in investing activities	(66,588	)	(44,874	)

Cash flows used in financing activities
Payments of interest	(3,109	)	–
Net cash flows used in financing activities	(3,109	)	–

Effect of changes in exchange rates on cash and cash equivalents	(1,604	)	2,286
Increase (Decrease) in cash and cash equivalents	27,998		(57,562	)

Cash and cash equivalents at the beginning of year	153,208		207,278
Cash and cash equivalents at the end of the period(1)	181,206		149,716
Increase (Decrease) in cash and cash equivalents	27,998		(57,562	)

(1)	From cash and cash equivalents as of June 30, 2013 and 2012, Ps. 50,789 thousand and Ps. 60,418 thousand correspond to balances related to Trust Funds that were depreciated the following month.

(2)	Exclude debt restructuring expenses for Ps. 12,890 thousand.

David Tezanos Gonzalez

Chairperson

METROGAS S.A.

NOTES TO THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2013 AND COMPARATIVES

(amounts in thousands of pesos, except where expressly stated otherwise)

1.	GENERAL INFORMATION

MetroGAS S.A. (“MetroGAS” or the “Company”) is a sociedad anónima organized under the laws of the Republic of Argentina. The registered office and principal place of business is located at Gregorio Aráoz de Lamadrid 1360 – Ciudad Autónoma de Buenos Aires.

The Company was formed in 1992 and on December 1, 1992 it was registered as a corporation pursuant the laws of the Republic of Argentina under number 11,670, Book 112, Volume A of Sociedades Anónimas. The term of duration of the Company expires on December 1, 2091 and its principal business is the provision of natural gas distribution services.

On November 2, 1994, the Argentine Securities Commission (“CNV”), pursuant to Resolution No. 10,706, authorized to public offering all the Company’s outstanding shares that at such date composed the capital stock. American Depositary Shares (“ADSs”) were issued in the United States and were registered with the Securities and Exchange Commission (“SEC”). The Shares of the Company are listed on BCBA and its ADSs on the New York Stock Exchange (“NYSE”), respectively. On June 17, 2010, the NYSE informed that MetroGAS ADSs had been suspended from trading as a result of the Company´s filing for reorganization proceeding.

MetroGAS’ controlling shareholder is Gas Argentino S.A. (“Gas Argentino”) whose principal business is the investment (see Note 2.1).

MetroGAS controls MetroEnergía S.A. (“MetroEnergía”) whose principal business is the sale of natural gas and/or transport on its own behalf or on account of third parties.

2.	ECONOMIC AND FINANCIAL POSITION AND REGULATORY FRAMEWORK

The changes in the economic conditions of the country and the amendments introduced by the Public Emergency Law towards the end of 2001, have impacted the economic and financial position of the Company affected by the suspension of the original regime of tariffs adjustment, added to the increase in the operating costs to maintain the quality of service. The Company estimates that, if the conditions as of the date of issuance of these financial statements continue, the situation will continue to deteriorate, for this reason, the management has evaluated a variety of measures to mitigate the impact of the current financial situation, including:

escalating the Company claims to Argentine authorities on the approval of tariff increases (including the pass-through of municipal levies);

procuring the strict management of cash-flow and control our expenditures;

requiring additional capital contributions from shareholders;

renegotiating payment conditions with our principal suppliers and the Trust Funds; and

obtaining financing from third parties.

The Company is under a renegotiation process of certain terms of the License with the Argentine Government in order to oppose the negative impact produced by the mentioned circumstances, which situation has not been resolved to the date of these interim financial statements.

In this context, in the fiscal year ended December 31, 2012 the Company registered a significant increase in the operating loss. Likewise, as of June 30, 2013, the Company registered cumulative losses amounting to Ps. 735,292 thousand and the consolidated negative working capital to Ps. 100,440 thousand.

METROGAS S.A.

NOTES TO THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2013 AND COMPARATIVES

(amounts in thousands of pesos, except where expressly stated otherwise)

These consolidated financial statements have been prepared using accounting standards applicable to a going concern. As of the date of issuance of these financial statements, it is neither possible to foresee the outcome of the tariff negotiation process nor to determine its final consequences on the Company’s results and operations. The above mentioned circumstances raise substantial doubt about the Company’s ability to continue as a going concern. However, the Company’s consolidated financial statements do not include any adjustments or reclassifications, if any, that might be required from the unsuccessful outcome of the situation described above.

In Note 1 of the attached Annex I which includes information as of December 31, 2012, the aspects related to the economic and financial situation and regulatory framework are described. There follow the significant developments occurred during the six months period ended June 30, 2013:

2.1	Change in Company control

On April 26, 2013, MetroGAS was informed of Resolution ENARGAS No I/2566 D, dated April 19, 2013, whereby ENARGAS approved the purchase by YPF Inversora Energética S.A. of 54.67% of Gas Argentino. Class A shares from BG Inversiones Argentinas S.A. and of 2.73% of MetroENERGÍA S.A. shares from BG Argentina S.A., without prejudice of the involvement of Comisión Nacional de Defensa de la Competencia (National Committee for the Defense of the Competition).

On May 3, 2013, Gas Argentino reported that BG Inversiones Argentinas S.A. had transferred to YPF Inversora Energética S.A. (“YPFIESA”) 46,010,284 ordinary, registered shares with nominal value of $ 1 and one vote per Class A share, representative of 54.67 % of the capital stock of Gas Argentino, owner of 70% of MetroGAS’s shares. Thus, YPF S.A. through YPFIESA obtained 100% of the capital stock and votes of Gas Argentino and it will indirectly have, through Gas Argentino, 70% of the capital stock and votes of MetroGAS (See Note 28 – Subsequent Events).

2.2	MetroGAS Reorganization Proceeding

In compliance with the reorganization proceeding as described in Note 1.1 to the attached Annex I, on January 11, 2013, MetroGAS issued new notes which were delivered in exchange to financial creditors and non-financial creditors who were admitted and declared acceptable as detailed in Note 16.

On February 1 and February 13, 2013, MetroGAS submitted before the intervening Court the documentation evidencing compliance with the debt exchange and the issuance of the new notes in order to obtain the removal of all general inhibitions and the legal declaration of the accomplishment of the proceeding within the terms and conditions of Section 59 of the Argentine Bankruptcy Law.

On March 26, 2013, the MetroGAS Board of Directors decided by a majority of votes to capitalize 100% of the portion subject to capitalization of interest payable on June 30, 2013 and to issue Additional Negotiable Obligations for such capitalization.

Furthermore, the Board also decided to issue New Negotiable Obligations for the new unsecured creditors, as long as their credits have been verified by a ruling in the Reorganization Proceedings.

METROGAS S.A.

NOTES TO THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2013 AND COMPARATIVES

(amounts in thousands of pesos, except where expressly stated otherwise)

On July 25, 2013, MetroGAS issued:

Negotiable Obligations of Late Verification:

Series A-U: U$S 5,087,459

Series B-U: U$S 4,013,541

Negotiable Obligations of Capitalization

Additional Series A-L: U$S 6,756,665

Additional Series A-U: U$S 704,581

2.3	MetroGAS Intervention

On May 31, 2013, ENARGAS published Resolution ENRG I-2,587/13 providing for the termination of the intervention of that entity at MetroGAS. The intervention had been originally established in June 2010 as a consequence of MetroGAS’ Shareholders Reorganization Proceedings.

2.4	Regulatory Framework

2.4.1

Tariff Renegotiation – Charge Resolution ENARGAS 2,407/12

On March 27, 2013, MetroGAS received, from the Execution Committee, the notification of approval of the Consolidation and Expansion Investment Plan submitted on February 1, 2013.

2.5	Incentive Policies

There are various schemes fostered by the National Government to boost the natural gas industry which, although initially have no direct impact on MetroGAS, nor do they impose any obligations on the company, might actually have favorable consequences considering that one of their main objectives is to increase natural gas injections. The various schemes are described below:

2.5.1

“Plan Energía Total” (Total Energy Plan)

Within the framework of this Plan, ENARSA injects certain volumes for CNG filling stations above the volumes injected by producers according to the specific auctions carried out by MEG (Gas Electronic Market). On July 10, 2013, ENARGAS issued Resolution ENRG I-2,621/13 that provided that the regional distributors shall invoice the volumes injected by ENARSA on behalf of the latter together with the billing for the natural gas distribution and transportation service, and shall then render all accounts for the amounts thus invoiced. The Resolution specifically states that the higher costs that the invoicing on behalf of ENARSA generates to Distributors may not be passed through to consumers but they will eventually be covered within the framework of specific agreements that shall be negotiated and agreed between the Distributors and ENARSA resulting from that regulation. The operation in question applies to the volumes injected by ENARSA as from June 2013.

2.5.2

Program to Encourage the Surplus Injection of Natural Gas

Resolution 1/2013 dated January 18, 2013, of the Strategic Planning and Coordination of the National Plan of Hydrocarbon Investments, approved the Program to Encourage the Surplus Injection of Natural Gas with the objective of encouraging gas producers to increase their injections for supplying the internal market through the acknowledgement of higher prices above those effectively charged through the National Government’s compensation system. Via Resolutions 7/2013 and 8/2013 issued by the above mentioned Committee on July 4, 2013 (i) the deadline for adhering to the abovementioned Program, originally set for June 30, 2013, was extended until August 16, 2013, and (ii) a mechanism was approved for making advanced payments to producers of up to 75% of the compensations due to them for their surplus injections of natural gas.

METROGAS S.A.

NOTES TO THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2013 AND COMPARATIVES

(amounts in thousands of pesos, except where expressly stated otherwise)

2.5.3

Scheme for the Promotion of Investment for Hydrocarbon Exploitation

On July 15, 2013, the Official Gazette published Executive Order PEN 929/13 which provided the creation of a Scheme for the Promotion of Investments for Hydrocarbon Exploitation with the objective, among others, of obtaining the self-supply of hydrocarbons.

The principal items of this new scheme are:

1. Submission of investment projects for over U$S1,000,000,000 in 5 years.

2. As from the fifth year after Project start up, free availability of 20% of hydrocarbons to be marketed in the external market at 0% exportation duties.

3. Free availability of 100% of the currency resulting from such exportation without the obligation of settling them locally provided the previous income of U$S 1,000,000,000 of committed investment has been credited.

4. Price and currency compensation mechanism in the event that, due to a shortage in the local market, exports were suspended, and to ensure producers that (i) their 20% of not exported hydrocarbons would be collected locally in pesos at reference export prices and (ii) they may buy freely available dollars with those pesos.

5. Organization of the “Concession for the Non-Conventional Exploitation of Hydrocarbons” (shale gas, shale oil, tight sands, tight gas, tight oil and/or coal bed methane) for 25 years plus a 10-year extension.

6. The application authority is the Strategic Planning and Coordination Committee of the National Plan of Hydrocarbon Investments, in charge of scheme regulation.

3.	BASIS FOR PRESENTATION AND ADOPTION OF THE INTERNATIONAL FINANCIAL REPORTING STANDARDS (“IFRS”)

3.1	Adoption of the International Financial Reporting Standards

The CNV has set forth, through Resolution No. 562/09 and No. 576/10, the enforcement of Technical Resolution (“TR”) No. 26 and 29 of the Argentine Federation of Professional Councils in Economic Sciences (“FACPCE “) which adopt the International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) for entities included in the public offer regime of Law No. 17,811 due to their capital stock or to their notes, or those that have applied to be included in said regime.

On January 24, 2012, in order to evaluate the applicability and impact of IFRIC 12 “Service Concession Arrangements” for registrant licensees of the public service of natural gas transport and distribution, as well as, their controlling companies, the CNV issued Resolution 600 extending the enforcement of the IFRS to the fiscal year commencing on January 1, 2013. Afterwards, on December 12, 2012, the CNV issued Resolution 613 establishing reasons and cause on which the licensees of the public service of natural gas transport and distribution and their controlling companies are not included in the scope of the IFRIC12. See “Key Accounting Estimates and Judgments” in Note 3, Annex I.

METROGAS S.A.

NOTES TO THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2013 AND COMPARATIVES

(amounts in thousands of pesos, except where expressly stated otherwise)

Consequently, the application of the IFRS is compulsory for the Company as from fiscal year commenced on January 1, 2013, being these, the first financial statements for the six months period submitted under these standards. The transition date to the IFRS for the Company as established in the IFRS 1 “First Time Adoption of IFRS” is January 1, 2012.

These condensed consolidated interim financial statements for the six months period ended June 30, 2013 have been prepared under the International Accounting Standard (“IAS”) 34 “Interim Financial Reporting” and the IFRS 1 “First Time Adoption of IFRS”. The condensed consolidated interim financial statements have been prepared pursuant the accounting policies that the Company expects to adopt in its annual consolidated financial statements as of December 31, 2013. The accounting policies are based on the IFRS issued by the IASB and the interpretations issued by the IFRIC which are expected to be applicable as of said date.

The Company financial statements were previously prepared in accordance with the Argentine GAAP. The Argentine GAAP differ in some areas from the IFRS. To prepare these condensed consolidated interim financial statements, the Company has modified certain accounting policies of appraisal and exposure previously applied under the Argentine GAAP to conform the IFRS. The principal accounting policies are described in the following notes.

The comparatives figures and those corresponding to the transition date (January 1, 2012) have been modified to reflect those adjustments. In Note 3.6 there appears an adjustment among the figures of the net worth, related to the consolidated financial statements issued under the Argentine GAAP as of June 30, 2012, as of the transition date (January 1, 2012) and as of the adoption date (December 31, 2012) and of the results and other comprehensive results for the six months period ended June 30, 2012 and for the fiscal year ended December 31, 2012 and the amounts submitted under the IFRS in these condensed consolidated interim financial statements, as well as the effects of the adjustment in the cash flows.

3.2	Filing of These Interim Financial Statements

These condensed consolidated interim financial statements should be read together with the Company annual financial statements as of December 31, 2012 prepared in accordance with the Argentine GAAP. Additionally, in the attached Annex I to these financial statements there appear information under the IFRC as of December 31, 2012 necessary for understanding these condensed consolidated interim financial statements.

These condensed consolidated interim financial statements have been approved by the Board of Directors for issuance on August 14, 2013.

The condensed consolidated interim financial statements for the six months periods ended June 30, 2013 and 2012 have not been audited. The Company estimates that they include all the adjustments necessary to fairly present the results for each period.

METROGAS S.A.

NOTES TO THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2013 AND COMPARATIVES

(amounts in thousands of pesos, except where expressly stated otherwise)

3.3	Seasonable Character of the Operations

The sales and profits of the Company are highly influenced by the weather conditions prevailing in Argentina. The natural gas demand and consequently, the MetroGAS sale and profits are considerably higher during the winter months (May to September) due to the volumes of gas sold and to the tariffs mix that affects the sales profit and net margin.

3.4	Application of International Financial Reporting Standards

IFRS 1 allows to the entities that adopt for the first time the standards to consider some sole exemptions and exceptions to the principle of retroactive application of certain IFRS in force. Said exceptions have been foreseen by the IASB to simplify the first application of said rules.

- Optional exemptions adopted by the Company:

Cost attributed to Properties, plant and equipment and Investment properties: the cost of Properties, plant and equipment and Investment properties, restated under the accounting standards in force have been adopted as deemed cost as of the transition date to IFRS, since that cost is similar to the cost or depreciated cost under the IFRS, adjusted to reflect the changes in a general or specific prices index. Likewise, the IFRS establish alternative criteria for the measurement after the initial recognition of each class of property that composes the items of Properties, plant and equipment, foreseeing that the “cost model” or “revaluation model” is to be used. The Management of the Company has elected to continue applying the “cost model” to all classes of property which compose Properties, plant and equipment and Investment properties.

Leasing: The Company determined if the agreements in force as of the date of transition to IFRS included a leasing, as from the consideration of facts and circumstances existing as of said date.

- Mandatory exceptions applicable to the Company:

Estimates: the estimates carried out by the Company under IFRS to the date of transition to IFRS are consistent with the estimates carried out as of the same date under Argentine GAAP.

Derecognition of financial assets and liabilities: the Company, pursuant IFRS 1, applied the IFRS 9 prospectively to the financial liabilities written off as a result of the restructuring of its financial debt carried out on May 12, 2006 as it did not have the necessary information to apply the IFRS 9 upon initial recognition of these transactions.

The following mandatory exceptions provided by IFRS 1 have not been applied as they were not identified significant operations for the Company:

· Hedge accounting

· Non-controlling interests

· Embedded derivatives.

METROGAS S.A.

NOTES TO THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2013 AND COMPARATIVES

(amounts in thousands of pesos, except where expressly stated otherwise)

3.5	Major Differences in Valuation Criteria

The main differences we have identified between Argentine GAAP and IFRS are described below:

Inventories

Under IFRS, materials were reclassified to Properties, plant and equipment and valued at the lesser of cost or net realizable value, considering an allowance for obsolescence of materials, if applicable, while under Argentine GAAP they were valued at their replacement cost.

Other Receivables

Under Argentine GAAP the Company had been recognizing as receivables any charges transferable to customers under the regulatory framework established in its License and for which evidence of effective recognition in the past was available, as described in Note 1.3.8 of the Annex attached to the consolidated financial statements. In spite of the fact that the Company has satisfied all necessary requirements for approval, the issuance of a resolution authorizing the effective inclusion of those charges in bills to customers by different governmental agencies has been delayed. In the absence of this resolution and under IAS 18, any payments made may not be taken as receivables for their whole nominal amount until a resolution approving and implementing the relevant transfer will have been issued.

In addition, under Argentine GAAP, the Company has recognized as receivables any deferred income tax asset balances and income tax or minimum presumed income tax credits which are deemed recoverable based on an estimation of future taxable profits. If a company suffers recurrent tax losses, IAS 12 – Income Tax allows only the recognition of deferred income tax assets and income tax credits provided that they may be offset against deferred income tax liabilities.

Tax Effect of IFRS Reconciling Items

This adjustment represents the effect of deferred income tax at a 35% rate on the IFRS reconciling items described above.

The Company has identified major differences regarding the valuation of its subsidiary MetroENERGÍA and has not detected substantial changes between IFRS and Argentine GAAP.

3.6	Required Reconciliations

In accordance with the provisions of FACPCE, TR No. 26 and No. 29, the reconciliation of net worth as determined under Argentine accounting standards and under IFRS as of December 31, 2012 and January 1, 2012, and the reconciliation of comprehensive income for the six-month period ended on June 30, 2012 and the fiscal year ended on December 31, 2012, are included below. In this respect, when preparing these reconciliations, the Company has taken into account those IFRS that it believes will be applicable for the preparation of its financial statements as of December 31, 2013. The items and figures contained in this note are subject to change and may only be considered final when the annual financial statements for the fiscal year when IFRS will be applied for the first time will be prepared. Also, the Company has opted for an early adoption of IFRS 9.

METROGAS S.A.

NOTES TO THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2013 AND COMPARATIVES

(amounts in thousands of pesos, except where expressly stated otherwise)

The items and figures included in the reconciliation might be modified in the event that at the time of preparing the financial statements as of December 31, 2013 different standards are used.

3.6.1

Reconciliation of balance sheet:

The following tables show the reconciliation of the balance sheet under Argentine GAAP and IFRS as of June 30, 2012.

The information as at June 30, 2012, under professional Argentine rules, results from the individual financial statements at that date, after registering the deferred liabilities for the effect of the inflation of Property, plant and equipment registered as at December 31, 2012 by MetroGAS.

	06.30.12
	Argentine GAAP (*)		Reclassification (3)		Adjustments			IFRS
Assets
Noncurrent Assets
Properties, plant and equipment	1,758,392		170		–			1,758,562
Deferred income tax assets	–		688		–			688
Other investments	596		–		–			596
Investment properties	–		5,518		–			5,518
Advance payments	–		529		–			529
Other receivables	206,133		(1,217	)	204,916		(2)	–
Total Noncurrent Assets	1,965,121		5,688		204,916			1,765,893

Current Assets
Cash and cash equivalents	25,262		124,454		–			149,716
Other investments	124,454		(124,454	)	–			–
Trade receivables	307,824		(307,824	)	–			–
Other receivables	11,797		(11,797	)	–			–
Advance payments	–		4,502		–			4,502
Trade receivables and other receivables	–		308,314		–			308,314
Inventories	7,750		(5,815	)	(1,935	)	(1)	–
Total Current Assets	477,087		(12,620	)	(1,935	)		462,532
Total Assets	2,442,208		6,932		(206,851	)		2,228,425

Shareholders’ Equity
Capital stock	569,171		–		–			569,171
Adjustment of capital stock	684,769		–		–			684,769
Legal reserve	45,376		–		–			45,376
Unappropriated retained earnings	(833,383	)	–		(212,658	)		(1,046,041	)
Equity Attributable To The Owners	465,933		–		(212,658	)		253,275
Non controlling interest	880		–		–			880
Total Shareholders’ Equity	466,813		–		(212,658	)		254,155
Liabilities
Noncurrent Liabilities
Reorganization liabilities	1,374,752		–		–			1,374,752
Deferred income tax liabilities	107,432		–		5,807		(2)	113,239
Provisions	–		92,039		–			92,039
Total Noncurrent Liabilities	1,482,184		92,039		5,807			1,580,030

Current Liabilities
Trade payable and other accounts payable	–		292,925		–			292,925
Salaries and social security	38,934		–		–			38,934
Income tax and minimum presumed income tax (“MPIT”) liability	–		13,476		–			13,476
Other taxes payable	62,381		(13,476	)	–			48,905
Trade payables	287,963		(287,963	)	–			–
Other accounts	11,894		(11,894	)	–			–
Contingencies provision	92,039		(92,039	)	–			–
Total Current Liabilities	493,211		(98,971	)	–			394,240
Total Liabilities	1,975,395		(6,932	)	5,807			1,974,270
Total Liabilities and Shareholders’ Equity	2,442,208		(6,932	)	(206,851	)		2,228,425

(1)	Corresponds to the adjustment to inventories valued at historic cost.

(2)	Corresponds to the derecognition of credits for municipal rates (not allowed under IFRS) and the deferred income tax adjustment.

(3)	Reclassifications respond mainly to change of item names, except for those made in Investment properties and Deferred income tax liabilities.

(*)	Generally accepted accounting Principles in Argentina (“Argentine GAAP”).

METROGAS S.A.

NOTES TO THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2013 AND COMPARATIVES

(amounts in thousands of pesos, except where expressly stated otherwise)

The following tables show the reconciliation of the balance sheet under Argentine GAAP and IFRS as of December 31, 2012.

	12.31.12
Assets	Argentine GAAP (*)			Reclassification (3)			Adjustments				IFRS
Noncurrent Assets
Properties, plant and equipment		1,787,576			(4,679	)		(1,967	)	(1)		1,780,930
Deferred income tax assets		-			751			-				751
Other investments		646			-			-				646
Investment properties		-			5,459			-				5,459
Advance payments		-			335			-				335
Other receivables		205,860			(336	)		(205,524	)	(2)		-
Total Noncurrent assets		1,994,082			1,530			(207,491	)			1,788,121

Current assets
Inventories		6,693			(6,693	)		-				-
Other investments		110,514			(110,514	)		-			-
Advance payments		-			16,352			-				16,352
Trade receivables and other receivables		-			262,821			-				262,821
Cash and cash equivalents		42,694			110,514			-				153,208
Trade receivables		264,997			(264,997	)		-			-
Other receivables		15,813			(15,813	)		-			-
Total Current assets		434,018			(1,637	)		-				432,381
Total assets		2,428,100			(107	)		(207,491	)			2,220,502

Shareholders’ Equity
Capital stock		569,171			-			-				569,171
Adjustment capital stock		684,769			-			-				684,769
Legal Reserve		45,376			-			-				45,376
Unappropriated retained earnings		(926,323	)		-			(206,695	)			(1,133,018	)
Equity attributable to the owners		372,993			-			(206,695	)			166,298
Non controlling interest		989			-			-				989
Total Shareholders’ Equity		373,982			-			(206,695	)			167,287
Liabilities
Noncurrent Liabilities
Other taxes payable		61,113			(52,117	)		-				8,996
Reorganization liabilities		1,429,301			-			-				1,429,301
Deferred income tax liabilities		-			52,868			(796	)	(2)		52,072
Provisions		-			102,025			-				102,025
Total Noncurrent Liabilities		1,490,414			102,776			(796	)			1,592,394

Current Liabilities
Trade payable and other accounts payable		-			345,466			-				345,466
Salaries and social security		49,286			-			-				49,286
Income tax and minimum presumed income tax (“MPIT”) liability		-			10,271			-				10,271
Other taxes payable		66,069			(10,271	)		-				55,798
Trade payables		342,079			(342,079	)		-			-
Other accounts		10,938			(10,938	)		-				-
Contingencies provision		102,025			(102,025	)		-			-
Total Current Liabilities		570,397			(109,576	)		-				460,821
Total Liabilities		2,060,811			(6,800	)		(796	)			2,053,215
Total Liabilities and Shareholders’ Equity		2,434,793			(6,800	)		(207,491	)			2,220,502

(1)	Corresponds to the adjustment to inventories valued at historic cost.

(2)	Corresponds to the derecognition of credits for municipal rates (not allowed under IFRS) and the deferred income tax adjustment.

(3)	Reclassifications respond mainly to change of items names, except for those made in Investment properties and Deferred income tax liabilities.

(*)	Generally accepted accounting principles in Argentina (“Argentine GAAP”)

METROGAS S.A.

NOTES TO THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2013 AND COMPARATIVES

(amounts in thousands of pesos, except where expressly stated otherwise)

The following tables show the reconciliation of the balance sheet under Argentine GAAP and IFRS as of January 1, 2012.

	01.01.12
Assets	Argentine GAAP (*)			Reclassification (3)			Adjustments				IFRS
Noncurrent Assets
Properties, plant and equipment		1,752,923			586			(1,993	)	(1)		1,751,516
Deferred income tax assets		-			443			-				443
Other investments		445			-			-				445
Investment properties		-			5,578			-				5,578
Advance payments		-			332			-				332
Other receivables		185,014			(331	)		(184,683	)	(2)
Total Noncurrent assets		1,938,382			6,608			(186,676	)			1,758,314
Current assets
Inventories		7,649			(7,649	)		-				-
Other investments		152,515			(152,515	)		-			-
Advance payments		-			11,588			-				11,588
Trade receivables and other receivables		-			237,729			-				237,729
Cash and cash equivalents		54,763			152,515			-				207,278
Trade receivables		238,036			(238,036	)		-				-
Other receivables		17,730			(17,730	)		-			-
Total Current assets		470,693			(14,098	)		-				456,595
Total assets		2,409,075			(7,490	)		(186,676	)			2,214,909
Shareholders’ Equity
Capital stock		569,171			-			-				569,171
Adjustment capital stock		684,769			-			-				684,769
Legal Reserve		45,376			-			-				45,376
Unappropriated retained earnings		(783,518	)		-			(170,754	)			(954,272	)
Equity attributable to the owners		515,798			-			(170,754	)			345,044
Non controlling interest		1,071			-			-				1,071
Total Shareholders’ Equity		516,869			-			(170,754	)			346,115
Liabilities
Noncurrent Liabilities
Other taxes payable		-			-			-				-
Reorganization liabilities		1,319,615			-			-				1,319,615
Deferred income tax liabilities		142,386			443			(15,922	)	(2)		126,907
Provisions		-			91,067			-				91,067
Total Noncurrent Liabilities		1,462,001			91,510			(15,922	)			1,537,589
Current Liabilities
Trade payable and other accounts payable		-			246,281			-				246,281
Salaries and social security		39,425			-			-				39,425
Income tax and minimum presumed income tax (“MPIT”) liability		-			15,657			-				15,657
Other taxes payable		45,499			(15,657	)		-				29,842
Trade payables		243,322			(243,322	)		-			-
Other accounts		10,892			(10,892	)		-				-
Contingencies provision		91,067			(91,067	)		-			-
Total Current Liabilities		430,205			(99,000	)		-				331,205
Total Liabilities		1,892,206			(7,490	)		(15,922	)			1,868,794
Total Liabilities and Shareholders’ Equity		2,409,075			(7,490	)		(186,676	)			2,214,909

(1)	Corresponds to the adjustment to inventories valued at historic cost.

(2)	Corresponds to the derecognition of credits for municipal rates (not allowed under IFRS) and the deferred income tax adjustment.

(3)	Reclassifications respond mainly to change of items names, except for those made in Investment properties and Deferred income tax liabilities.

(*)	Generally accepted accounting principles in Argentina (“Argentine GAAP”)

METROGAS S.A.

NOTES TO THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2013 AND COMPARATIVES

(amounts in thousands of pesos, except where expressly stated otherwise)

3.6.2

Reconciliation of Comprehensive Income for the six months period ended on June 30, 2012:

The statement of comprehensive income under Argentine standards and its reconciliation with IFRS are presented below:

		06.30.12
	Argentine GAAP (*)			Reclassification (3)			Adjustments				IFRS

Revenues		569,228			-			-				569,228
Operating costs		(422,535	)		-			131		(1)		(422,404	)
Gross profit		146,693			-			131				146,824
Administrative expenses		(85,153	)		85,153			-				-
Selling expenses		(92,433	)		92,433			-			-
Administrative and selling expenses		-			(177,586	)		(8,857	)	(2)		(186,443	)
Other income and expenses		-			3,084			-				3,084
Operating loss		(30,893	)		3,084			(8,726	)			(36,535	)
Net others income		3,084			(3,084	)	-
Financing and holding results generated by assets		18,122			(18,122	)	-
Financing and holding results generated by liabilities		(66,466	)		66,466			-			-
Financial income		-			18,256			-				18,256
Financial expenses		-			(66,600	)		(3,998	)	(1 and 2)		(70,598	)
Minority interest		191			(191	)		-				-
Net financials results		(48,153	)		(191	)		(3,998	)			(52,342	)
Net results before taxes		(75,962	)		(191	)		(12,724	)			(88,877	)
Income tax		26,098			-			(29,181	)	(2)		(3,083	)
Other comprehensive results		-			-			-				-
Total net and comprehensive result for the period		(49,864	)		(191	)		(41,905	)			(91,960	)
Net results attributable to:
Controlling interest												(91,769	)
Non-controlling interest												(191	)
												(91,960	)

Net loss per share												(0.16	)

(1)	Corresponds to the adjustment to inventories valued at historic cost.

(2)	Corresponds to the derecognition of credits for municipal rates (not allowed under IFRS) and the deferred income tax adjustment.

(3)	Reclassifications respond mainly to change of items names.

(*)	Generally accepted accounting principles in Argentina (“Argentine GAAP”)

3.6.3

Reconciliation of Comprehensive Income for the fiscal year ended on December 31, 2012:

		12.31.12
	Argentine GAAP (*)			Reclassification (3)			Adjustments				IFRS
Revenues		1,209,519			-			-				1,209,519
Operating costs		(922,952	)		-			265		(1)		(922,687	)
Gross profit		286,567			-			265				286,832
Administrative expenses		(178,608	)		178,608			-				-
Selling expenses		(199,413	)		199,413			-			-
Administrative and selling expenses		-			(378,021	)		(5,330	)	(2)		(383,351	)
Other income and expenses		-			5,799			-				5,799
Operating loss		(91,454	)		5,799			(5,065	)			(90,719	)
Net others income		5,060			(5,060	)		-
Financing and holding results generated by assets		18,421			(18,421	)		-
Financing and holding results generated by liabilities		(162,386	)		162,386			-				-
Financial income		-			39,907			-				39,907
Financial expenses		-			(183,873	)		6,752		(1 and 2)		(177,121	)
Minority interest		820			(820	)		-				-
Net results before taxes		(229,539	)		(82	)		1,687				(227,933	)
Income tax		86,734			-			(37,628	)	(2)		49,106
Other comprehensive results		-			-			-
Total net and comprehensive result for the period		(142,805	)		(82	)		(35,941	)			(178,828	)
Net results attributable to:
Controlling interest												(178,746	)
Non-controlling interest												(82	)
												(178,828	)

Net loss per share												(0.31	)

(1)	Corresponds to the adjustment to inventories valued at historic cost.

(2)	Corresponds to the derecognition of credits for municipal rates (not allowed under IFRS) and the deferred income tax adjustment.

(3)	Reclassifications respond mainly to change of items names.

(*)	Generally accepted accounting principles in Argentina (“Argentine GAAP”)

METROGAS S.A.

NOTES TO THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2013 AND COMPARATIVES

(amounts in thousands of pesos, except where expressly stated otherwise)

3.6.4

Reconciliation of the Cash Flow Statement for the six months period ended on June 30, 2012 and for the fiscal year ended on December 31, 2012:

		06.30.12
	Argentine GAAP (*)			Adjustments			IFRS
Net cash flows provided by(used in) operating activities		(11,490	)		(3,484	)		(14,974	)
Net cash flows used in investing activities		(46,072	)		1,198			(44,874	)
Effect of changes in exchange rates on cash and cash equivalents		-			2,286			2,286
Subtotal		(57,562	)		-			(57,562	)
Cash and cash equivalents at the beginning of year		207,278			-			207,278
Cash and cash equivalents at the end of the period		149,716			-			149,716
Decrease in Cash and Equivalents		(57,562	)		-			(57,562	)

(*) Generally accepted accounting principles in Argentina (“Argentine GAAP”)

		12.31.12
	Argentine GAAP (*)			Adjustments			IFRS
Net cash flows provided by operating activities		62,608			(12,998	)		49,610
Net cash flows used in investing activities		(116,678	)		10,650			(106,028	)
Effect of changes in exchange rates on cash and cash equivalents		-			2,348			2,348
Subtotal		(54,070	)		-			(54,070	)
Cash and cash equivalents at the beginning of year		207,278			-			207,278
Cash and cash equivalents at the end of the period		153,208			-			153,208
Decrease in Cash and Equivalents		(54,070	)		-			(54,070	)

(*) Generally accepted accounting principles in Argentina (“Argentine GAAP”)

4.	ACCOUNTING POLICIES

The accounting policies adopted for these condensed consolidated interim financial statements are consistent with the policies used to prepare information under IFRS as at December 31, 2012, which are detailed in Annex I attached hereto and based on the IFRS expected to be in effect as of December 31, 2013.

For purposes of accounting for the exchange for new notes under debt restructuring proceedings effected on January 11, 2013, as described in Note 16 on financial debt, the Company has followed the guidelines established in IFRS 9 – Financial Instruments: Recognition and Measurement.

IFRS 9 provides that in the event of an exchange between an existing borrower and lender of debt instruments with substantially different terms, the transaction must be accounted for as an extinguishment of the original financial liability and the consequent recognition of a new financial liability. The difference between the carrying amount of the extinguished financial liability and any amount paid as consideration, which will include any assigned assets other than cash or assumed liability, must be recognized as profit or loss for the fiscal year. The Company believes that the terms of the reorganization debt to be exchanged are substantially different from those of the new notes and has consequently recorded the exchange of debt in accordance with the above guidelines. Also, pursuant to IFRS 9, the new notes have been initially recognized at fair value, net of any incurred transaction costs, and are subsequently measured at amortized cost.

METROGAS S.A.

NOTES TO THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2013 AND COMPARATIVES

(amounts in thousands of pesos, except where expressly stated otherwise)

For purposes of initial recognition, the fair value of the new debt issued has been estimated on the basis of discounted cash flows, absent any prices quoted in an active market which may be significant for the amount issued.

5.	KEY ACCOUNTING ESTIMATES AND JUDGMENTS

The preparation of consolidated financial statements as of a specified date requires the Company to make estimates and judgments that affect the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities as of such date, and the reported amount of revenues and expenses during the year. The Company makes estimates in order to be able to calculate at a specified time, for instance, the allowance for doubtful accounts, depreciation, recoverable value of assets, income tax charges and provision for contingencies. Actual future income may differ from the estimates and judgments made as of the date of preparation of these condensed consolidated interim financial statements.

For the preparation of these condensed consolidated interim financial statements, the key judgments made by the Company when applying its accounting policies and the sources of information used for the respective estimates are consistent with those that were applied in the consolidated financial statements for the fiscal year ended on December 31, 2012, which are detailed in Note 3 of Annex I, including additional information as of December 31, 2012.

6.	FINANCIAL RISK MANAGEMENT

The business of the Company exposes the Company to various financial risks: market risk, credit risk and liquidity risk. No significant changes have occurred during the six-month period ended on June 30, 2013 in relation to financial risk factors and management policies with respect thereto. They are detailed in Note 4 of Annex I attached hereto, including information as of December 31, 2012.

7.	SEGMENT REPORTING

The Company operates mainly in the segments of gas distribution, natural gas commercialization, and through MetroENERGÍA, of gas transportation services on its own account and on behalf of or in association with third parties.

METROGAS S.A.

NOTES TO THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2013 AND COMPARATIVES

(amounts in thousands of pesos, except where expressly stated otherwise)

	06.30.2013
	MetroGAS			MetroENERGIA			Eliminations			Total
	Distribution			Trading

Revenues		560,604			96,907			(7,558	)		649,953
Gross (loss) profit		(26,388	)		28,762			(17,973	)		(15,599	)
Income on investments in companies		17,973			-			(17,973	)		-
Result before income tax		615,196			27,529			(17,973	)		624,752
Income tax		(217,470	)		(9,635	)		-			(227,105	)
Total net and comprehensive result for the period		397,726			17,894			(17,973	)		397,647
Total assets		2,370,299			144,540			(66,999	)		2,447,840
Total Liabilities		1,806,275			126,335			(49,704	)		1,882,906
Interests in subsidiaries		17,295			-			(17,295	)		-

	06.30.2012
	MetroGAS			MetroENERGIA			Eliminations			Total
	Distribution			Trading
Revenues		470,653			104,955			(6,380	)		569,228
Gross (loss) profit		(46,460	)		39,281			(29,356	)		(36,535	)
Income on investments in companies		17,462			-			(17,462	)		-
Result before income tax		(97,986	)		26,571			(17,462	)		(88,877	)
Income tax		6,217			(9,300	)		-			(3,083	)
Total net and comprehensive result for the period		(91,769	)		17,271			(17,462	)		(91,960	)
Total assets		2,182,908			111,076			(65,559	)		2,228,425
Total Liabilities		1,929,633			93,494			(48,858	)		1,974,270
Interests in subsidiaries		16,702			-			(16,702	)		-

METROGAS S.A.

NOTES TO THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2013 AND COMPARATIVES

(amounts in thousands of pesos, except where expressly stated otherwise)

8.	PROPERTIES, PLANT AND EQUIPMENT

	ORIGINAL VALUE												DEPRECIATION
MAIN ACCOUNT	AT BEGINNING OF YEAR			INCREASE		TRANSFERS		RETIREMENTS			AT END OF YEAR		ACCUMULATED AT BEGINNING OF YEAR		RETIREMENTS			AMOUNT	ACCUMULATED AT END OF YEAR		NET BOOK VALUE 06-30-13		NET BOOK VALUE 12-31-12		NET BOOK VALUE 01-01-12

Land		15,654		-		-			-		15,654			-		-		-		-	15,654		15,654		15,654
Building and civil constructions		70,165		-		1,629			-		71,814			26,198		-		675		26,873	44,941		43,987		45,292
High pressure mains		295,069		-		224			-		295,313			195,264		-		2,462		197,726	97,587		99,825		103,979
Medium and low pressure mains		1,831,798		-		29,664			-		1,861,462			607,791		-		20,981		628,772	1,232,690		1,224,007		1,201,655
Pressure regulating stations		65,047		-		2,102			-		67,149			42,005		-		1,069		43,074	24,075		23,042		25,136
Consumption measurement installations		357,086		-		6,657			(3,658	)	360,085			177,120		(2,080	)	6,745		181,785	178,300		179,966		188,284
Other technical installations		53,317		-		1,872			-		55,189			47,376		-		466		47,842	7,347		5,941		6,145
Machinery, equipment and tools		29,691		-		298			-		29,989			26,798		-		274		27,072	2,917		2,893		2,417
Computer and telecommunications equipment		204,882		-		11,747			(163	)	216,466			168,506		(121	)	5,922		174,307	42,159		36,376		31,583
Vehicles		10,986		-		2,728			-		13,714			9,956		-		389		10,345	3,369		1,030		1,789
Furniture and fixtures		5,466		-		-			-		5,466			5,462		-		1		5,463	3		4		6
Materials		23,399		27,202		(8,898	)		(3,636	)	38,067			-		-		-		-	38,067		23,399		21,388
Gas in pipelines		214		-		-			-		214			-		-		-		-	214		214		214
Work in progress		83,061		43,377		(48,808	)		-		77,630			-		-		-		-	77,630		83,061		68,298
Distribution network extensions constructed by third parties		64,663		-		785			-		65,448			16,262		-		649		16,911	48,537		48,401		47,405
Subtotal		3,110,538		70,579		-			(7,457	)	3,173,660			1,322,738		(2,201	)	39,633		1,360,170	1,813,490		1,787,800		1,759,245
Allowance for obsolescence of materials		(1,369	)	(1,366	)	-			359		(2,376	)		-		-		-		-	(2,376	)	(1,369	)	(1,035	)
Allowance for disposal of fixed assets		(5,501	)	(2,625	)	-			12		(8,114	)		-		-		-		-	(8,114	)	(5,501	)	(6,694	)
Total		3,103,668		66,588		-			(7,086	)	3,163,170			1,322,738		(2,201	)	39,633		1,360,170	1,803,000		1,780,930		1,751,516

As referred to in Note 1.4.1 of Annex I attached hereto, and in accordance with the License, a substantial portion of Properties, plant and equipment is subject to restrictions.

METROGAS S.A.

NOTES TO THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2013 AND COMPARATIVES

(amounts in thousands of pesos, except where expressly stated otherwise)

9.	INVESTMENT PROPERTIES

	ORIGINAL VALUE			DEPRECIATION
MAIN ACCOUNT		AT BEGINNING OF YEAR	AT END OF PERIOD		ACCUMULATED AT BEGINNING OF YEAR	ANNUAL RATE		AMOUNT	ACCUMULATED AT END OF PERIOD	NET BOOK VALUE 06-30-13	NET BOOK VALUE 12-31-12	NET BOOK VALUE 01-01-12
Land		1,847	1,847		-	-		-	-	1,847	1,847	1,847
Building		5,971	5,971		2,360	2.00	%	59	2,419	3,552	3,612	3,731
Total		7,818	7,818		2,360			59	2,419	5,399	5,459	5,578

METROGAS S.A.

NOTES TO THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2013 AND COMPARATIVES

(amounts in thousands of pesos, except where expressly stated otherwise)

10.	INTERESTS IN SUBSIDIARIES

The details shown below specify the business under consolidated corporate control as of June 30, 2013, December 31 and January 1, 2012:

Company under direct control		Equity interest as a percentage of capital stock and possible votes
MetroENERGÍA		95%

The accounting policies of the subsidiary are consistent with the accounting policies used by the Company.

11.	TRADE RECEIVABLES AND OTHER RECEIVABLES

	06.30.13		12.31.12		01.01.12
Current

Trade receivables	266,319		188,639		173,420
Trust Fund Agreement Enargas resolution N° 2407	47,856		2,049		-
Unbilled revenues	106,937		30,879		33,637
Related parties	439		376		477
Tax on banking transactions to be recovered	7,104		7,698		6,778
PURE (i)	(94	)	(101	)	(258	)
Receivables from sales on behalf of third parties	28,319		46,662		34,236
Tax receivables	2,912		236		2,729
Allowance for doubtful accounts	(15,447	)	(15,447	)	(16,959	)
Others	2,015		1,830		3,669
Total Current	446,360		262,821		237,729

(i) Corresponds to the Program for the Rational Use of Energy (“PURE”), including the creation of incentives and additional charges on excess consumption.

The allowance for bad debts has evolved as shown below:

	06.30.13		12.31.12
Balance at beginning of year	15,447		16,959
Increases	2,932		2,433
Applications	-		(3,945	)
Decreases	(2,932	)	-
Balance at end of period	15,447		15,447

METROGAS S.A.

NOTES TO THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2013 AND COMPARATIVES

(amounts in thousands of pesos, except where expressly stated otherwise)

12.	ADVANCE PAYMENTS

	06.30.13	12.31.12	01.01.12

Non current:
Insurance and other expenses paid in advance	97	335	332
Total non current	97	335	332
Current:
Advances to employees	354	318	281
Insurance and other expenses paid in advance	5,773	6,088	5,322
Recoverable expense	262	916	4,817
Advances to fixed assets suppliers	3,765	9,030	1,168
Total current	10,154	16,352	11,588

13.	CASH AND CASH EQUIVALENTS

For purposes of the interim cash flow statement, cash and cash equivalents include:

	06.30.13	12.31.12	01.01.12

Cash and banks	37,891	42,781	54,840
Mutual funds	143,315	110,427	76,321
Time deposits	-	-	76,117
Total	181,206	153,208	207,278

14.	CAPITAL STOCK

As of June 30, 2013, the capital stock of MetroGAS amounted to Ps. 569,171 thousand, has been fully subscribed, registered and paid in, and includes the classes of shares set forth below:

Classes of Shares	Subscribed, registered and paid in (in thousands of Ps.)
Outstanding
Registered Ordinary Shares of a Nominal Value of Ps.1 each and 1 Vote per share:
Class “A”		290,277
Class “B”		221,977
Class “C”		56,917
Capital Stock as of 06.30.13		569,171

METROGAS S.A.

NOTES TO THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2013 AND COMPARATIVES

(amounts in thousands of pesos, except where expressly stated otherwise)

The composition of the Company’s capital stock is described in detail in Note 13 of the Annex I attached hereto, which contains information as of December 31, 2012.

15.	OTHER TAXES PAYABLE

	06.30.13	12.31.12	01.01.12
Non current:
Others taxes	8,455	8,996	-
Total non current	8,455	8,996	-
Current:
Value added tax	15,334	13,841	4,194
GCABA study, revision and inspection of works in public space levy	23,858	19,739	12,234
Turnover tax	8,872	3,456	2,359
Provincial and municipal taxes	15,622	11,562	6,992
Hydric infraestructure rate	2,876	1,621	1,144
Others taxes	6,479	5,579	2,919
Total current	73,041	55,798	29,842

16.	FINANCIAL DEBT

The table below shows the changes occurred in the balance of financial debt as of June 30, 2013:

			06.30.13
Balance at beginning of year			-
Initial mesurement of finantial debt at fair value at 01.11.13			646,996
Interest on financial operations (at effective interest rate)			49,997
Exchange loss on financial operations			56,655
Interest payment

METROGAS INC 6-K