We conduct a substantial portion of our operations outside the United States, and our businesses may be impacted by significant fluctuations in foreign currency exchange rates. Our consolidated financial statements and those of most of our subsidiaries are presented in U.S. dollars, whereas some of our subsidiaries’ operations are performed in local currencies. Therefore, the resulting exchange differences arising from the translation to our presentation currency are recognized in the finance gain or expense item or as a separate component of equity depending on the functional currency for each subsidiary. Fluctuations in exchange rates relative to the U.S. dollar could impair the comparability of our results from period to period and could have a material adverse effect on our results of operations and financial condition.

In addition, our results of operations and financial condition are particularly sensitive to changes in the Argentine peso/U.S. dollar exchange rate because the majority of our operations are conducted in Argentina and therefore our costs are incurred, for the most-part, in Argentine pesos, while the substantial portion of our revenues are generated outside of Argentina in U.S. dollars. Consequently, appreciation of the U.S. dollar relative to the Argentine peso, to the extent not offset by inflation in Argentina, could result in favorable variations in our operating margins and, conversely, depreciation of the U.S. dollar relative to the Argentine peso could impact our operating margins negatively.

In 2002, the enactment of Argentine Law No. 25,561 ended more than a decade of uninterrupted Argentine peso/U.S. dollar parity, and the value of the Argentine peso against the U.S. dollar has fluctuated significantly since then. As a result of this economic instability, the Argentine peso has been subject to significant devaluation against the U.S. dollar and Argentina’s foreign debt rating has been downgraded on multiple occasions based upon concerns regarding economic conditions and rising fears of increased inflationary pressures. This uncertainty may also adversely impact Argentina’s ability to attract capital.

The increasing level of inflation in Argentina has generated pressure for further depreciation of the Argentine peso. The Argentine peso depreciated 10.1% against the U.S. dollar in 2009, 4.7% in 2010, 8.0% in 2011, 14.4% in 2012, 32.5% in 2013, 31.2% in 2014 and 52.1% in 2015.

The significant restrictions on the purchase of foreign currency gave rise to the development of an implied rate of exchange. See “— Restrictions on transfers of foreign currency and the repatriation of capital from Argentina may impair our ability to receive dividends and distributions from, and the proceeds of any sale of, our assets in Argentina.” Given the recent change in the government´s currency policy by the newly elected government, which resulted in an official depreciation of the Argentine peso, the gap between the official rate and the implied rate is relatively small compared to the previous years. However, the implied rate of exchange may increase or decrease in the future. We cannot predict future fluctuations in the Argentine peso/U.S. dollar exchange rate. As a result, fluctuations in the Argentine peso against the U.S. dollar may have a material impact on the value of an investment in our common shares. Because most of our operations are located in Argentina, large variations in the comparative value of the Argentine peso and the U.S. dollar may adversely affect our business.

Despite the positive effects of the depreciation of the Argentine peso on the competitiveness of certain sectors of the Argentine economy, including our business, it has also had a negative impact on the financial condition of many Argentine businesses and individuals. The devaluation of the Argentine peso has had a negative impact on the ability of certain Argentine businesses to honor their foreign currency-denominated debt, and has also led to very high inflation initially and significantly reduced real wages. The devaluation has also negatively impacted businesses whose success is dependent on domestic market demand, and adversely affected the Argentine government’s ability to honor its foreign debt obligations. If the Argentine peso is significantly devalued, the Argentine economy and our business could be adversely affected.

A significant appreciation of the Argentine peso against the U.S. dollar could also adversely affect the Argentine economy as well as our business. Our results of operations are sensitive to changes in the Argentine peso/U.S. dollar exchange rate because the majority of our operations are conducted in Argentina and therefore our costs are incurred, for the most-part, in Argentine pesos. In the short term, a significant appreciation of the Argentine peso against the U.S. dollar would adversely affect exports and the desire of foreign companies to purchase services from Argentina. Our business is dependent to a certain extent on maintaining our labor and other costs competitive with those of companies located in other regions around the world from which technology and IT services may be purchased by clients in the United States and Europe. We periodically evaluate the need for hedging strategies with our board of directors, including the use of such instruments to mitigate the effect of foreign exchange rate fluctuations. During the years ended December 31, 2015 and 2014, our Argentine operating subsidiaries, Sistemas Globales S.A. and IAFH Global S.A., entered into foreign exchange forward contracts to reduce their risk of exposure to fluctuations in foreign currency. We may in the future, as circumstances warrant, decide to enter into derivative transactions to hedge our exposure to the Argentine peso/U.S. dollar exchange rate. If we do not hedge such exposure or we do not do so effectively, an appreciation of the Argentine peso against the U.S. dollar may raise our costs, which would increase the prices of our services to our customers, which, in turn, could adversely affect our business, financial condition and results of operations.

Government intervention in the Argentine economy, particularly expropriation policies, could adversely affect our results of operations or financial condition.

The Argentine government has assumed substantial control over the Argentine economy and it may increase its level of intervention in certain areas, particularly expropriation policies. For example, on April 16, 2012, the Argentine government sent a bill to the Argentine Congress to expropriate 51% of the Class D Shares of YPF S.A. (“YPF”), the main Argentine oil company. The expropriation law was passed by Congress on May 3, 2012 and provides for the expropriation of 51% of the share capital of YPF, represented by an identical stake of Class D shares owned, directly or indirectly, by Repsol, S.A. and its affiliates. The Argentine government and the Argentine provinces that are members of the Federal Organization of Hydrocarbon Producing Provinces own 51% and 49%, respectively, of the YPF shares subject to seizure. However, during February 2014, the Argentine government agreed to pay Repsol S.A. $5.0 billion in Argentine sovereign bonds to compensate them for the seizure of the YPF shares. This agreement has been ratified by Repsol S.A.’s shareholders and by the Argentine Congress through Law No. 26,932, which was passed on April 24, 2014 and Argentine sovereign bonds have been delivered to Repsol S.A.

There are other recent examples of government intervention. In December 2012 and August 2013, the Argentine Congress established new regulations relating to domestic capital markets. The new regulations generally provide for increased intervention in the capital markets by the government, authorizing, for example, the Comisión Nacional de Valores (“CNV”) to appoint observers with the ability to veto the decisions of the board of directors of companies admitted to the public offering regime under certain circumstances and suspend the board of directors for a period of up to 180 days.

Supply Law No. 26,991 became effective on September 28, 2014 (the “Supply Law”). The Supply Law applies to all economic processes linked to goods, facilities and services which, either directly or indirectly, satisfy basic needs destined to the general welfare of the population, and grants broad delegations of powers to the Trade Secretariat, dependent on the Ministry of Economy and Public Finance (the “Enforcement Authority”) to regulate such processes. The Supply Law also provides that in a situation of shortage or scarcity of goods or services which satisfy basic needs destined to the general welfare of the population, the Enforcement Authority may order their sale, production, distribution and delivery throughout the Argentine territory.

Expropriations and other interventions by the Argentine government such as the one relating to YPF can have an adverse impact on the level of foreign investment in Argentina, the access of Argentine companies to the international capital markets and Argentina’s commercial and diplomatic relations with other countries.

Argentine presidential, congressional, municipal and state government elections were held in October 2015. Presidential elections were won by the opposing political party, led by Mauricio Macri. The president of Argentina and its Congress each have considerable power to determine governmental policies and actions that relate to the Argentine economy and, consequently, affect our results of operations or financial condition. The newly elected government, in office since December 10, 2015, has announced and adopted several significant economic and policy reforms:

We can offer no assurances or predictions as to the impact that these policies or any future polices implemented by the newly elected government will have on the Argentine economy as a whole or on our business, results of operation or financial condition, in particular. Moreover, there is uncertainty as to which other measures announced during the presidential campaign will be actually implemented and when. Some of the measures proposed by the newly elected government may also generate political and social opposition, which may in turn prevent the new government from adopting such measures as proposed. In addition, political parties opposed to the new government retained a majority of the seats in the Argentine Congress in the recent elections, which will require the new government to seek political support from the opposition for its economic proposals and creates further uncertainty in the ability of the new government to pass these or other measures.

The approval of judicial reforms proposed by the Argentine government could adversely affect our operations.

On April 8, 2013, the Argentine government submitted to the Argentine Congress three bills relating to: (a) the creation of three courts of cassation and the amendment of the Civil and Commercial Procedure Code, which was passed by the Argentine Congress on April 24, 2013 (the “Courts of Cassation Law”); (b) amendments to Law No. 24,937, which governs the Council of the Judiciary, which was passed by the Argentine Congress on May 8, 2013 (the “Council of the Judiciary Law”); and (c) a new regulation providing for precautionary measures in proceedings involving the federal government or any of its decentralized entities, which was passed by the Argentine Congress on April 24, 2013 (the “Precautionary Proceedings Law”).

The Courts of Cassation Law creates: (1) a federal court of cassation to review administrative law matters; (2) a federal court of cassation to review labor and social security law matters; and (3) a federal court of cassation to review civil and commercial law matters. These three new federal courts (collectively, the “Cassation Courts”) will have jurisdiction to review appeals of decisions rendered by the Argentine federal Courts of Appeals on administrative law, labor and social security, and civil and commercial matters, respectively, and to decide the constitutionality of those appeals. Appointees to the Cassation Courts must satisfy the same conditions as Supreme Court judicial candidates in order to be named to the Cassation Courts. Abbreviated designation procedures may be implemented to expedite the appointment process. Finally, the Courts of Cassation Law reduces the number of members of the Supreme Court of Argentina from seven to five. As a result of the passing of this law, judicial proceedings before federal and national courts may require more time and cost to pursue because there will be a new level of judicial review before having access to the Argentine federal Supreme Court.

The Council of the Judiciary Law increases the number of members of the Council of the Judiciary from 13 to 19, including three judges, three lawyers’ representatives, six academic representatives, six congressmen (four from the majority party and two from the minority party) and a member of the federal executive branch. Furthermore, the Council of the Judiciary Law changes the methodology for appointing members to the Council. Members of the Council were previously appointed by their peers. According to the Council of the Judiciary Law, members will be appointed concurrently with the general presidential elections by means of the existing open, compulsory and simultaneous primary elections. The Council of the Judiciary is entrusted with broad powers to: (1) organize and run the judicial system, including the training, appointment and removal of judges; (2) approve the draft proposal for the judicial annual budget, establish the system of compensation and provide for the administration of all judicial personnel; (3) sanction judges and retired judges; and (4) amend the regulatory regime applicable to the judiciary system. Consequently, the election of the members of the Council of the Judiciary is expected to be politically influenced, and non-political constituencies for the removal of judges would have less impact.

Under the Precautionary Proceedings Law, judges will need to establish a period of effectiveness of precautionary measures, under penalty of nullity, against the Argentine government and its agencies of no longer than six months in normal proceedings, and three months in abbreviated proceedings and in cases of “amparo”. The term of precautionary measures may be extended for six months if it is in the public interest. Consideration will be given to any dilatory tactics or proactive measures taken by the party that was awarded the precautionary measures. In addition, judges are not allowed to grant precautionary measures that would affect or disrupt the purposes, properties or revenues of the Argentine federal government, nor could judges impose personal monetary charges on public officers. Moreover, precautionary measures against the Argentine federal government or its decentralized entities will be effective once the requesting party posts an injunction bond for the expenditures or damages that the measure may cause. The injunction bond will not be required when the precautionary measures are granted to the federal government or any of its decentralized entities. Finally, the law does not permit precautionary measures that concur with the purpose of the substantive litigation.

On June 18, 2013, the Supreme Court declared certain sections of the Council of the Judiciary Law unconstitutional, in particular those sections referring to the increase in the number of members of the Council of the Judiciary and the methodology for appointing such members. The Court of Cassation Law and the Precautionary Proceedings Law have also been challenged before the Argentine courts. In regards to the Precautionary Proceedings Law, the Supreme Court has not admitted the claim, based on formal defects contained in the lawsuit, therefore validating the enforcement of the Law. As for the Court of Cassation Law, final resolution by the Supreme Court is still pending as of April 15, 2016.

These laws may have an effect on our operations in Argentina, since it may become more difficult to guarantee our right to a timely and unbiased judicial review of administrative decisions.

Our results of operations may be adversely affected by high and possibly increasing inflation in Argentina.

Since 2007, the inflation index has been extensively discussed in the Argentine economy. The intervention of the Argentine government in the INDEC and the change in the way the inflation index is measured have resulted in disagreements between the Argentine government and private consultants as to the actual annual inflation rate. The former Argentine government imposed fines on private consultants reporting inflation rates higher than the INDEC data. As a result, private consultants typically shared their data with Argentine lawmakers who opposed the previous government, who released such data from time to time. This could result in a further decrease in confidence in Argentina’s economy.

According to the INDEC, the consumer price index increased 23.9%, 21.7% and 10.9% in 2015, 2014 and 2013, respectively. Uncertainty surrounding future inflation rates has slowed the rebound in the long-term credit market. Private estimates, on average, refer to annual rates of inflation substantially in excess of those published by the INDEC. For example, opposition lawmakers in Argentina reported an inflation rate of 25.0%, 38.5% and 28.3% for the years ended December 31, 2015, 2014 and 2013, respectively.

In the past, inflation has materially undermined the Argentine economy and the government’sArgentine government's ability to create conditions that would permit stable growth. The Argentine economy is also highly reliant on exports of commodities, such as soy, and, therefore, it is more vulnerable to fluctuations in the prices of commodities.

that of private companies, to the international financial markets, and it has substantially increased their respective financing costs.

Argentina’s defaults with respect to the payment of its foreign debt could prevent the government and the private sector from accessing the international capital markets, which could adversely affect our financial condition, including our ability to obtain financing outside of Argentina.

As of December 31, 2001, Argentina’s total public debt amounted to $144.5 billion. In December of 2001, Argentina defaulted on over $81.8 billion in external debt to bondholders. In addition, since 2002, Argentina suspended payments on over $15.7 billion in debt to multilateral financial institutions (such as the IMF and the “Paris Club” — an informal intergovernmental group of creditors from 19 different countries that convenes to renegotiate debts to sovereign creditors) and other financial institutions. In 2006, Argentina cancelled all ofdoes not restructure its outstanding debt with the IMF totalling approximately $9.5 billion, and through various exchange offers madecontinues to bondholders between 2004 and 2010, restructured over $74.4 billion of its defaulted debt. Law 26,017 setfail to urgently address the main conditionsnecessary measures to improve the macroeconomic condition of the exchange offerscountry and expressly determined thatreduce the Argentine government could not re-open such negotiations infiscal deficit and inflation, the future. On September 2, 2008, pursuant to Decree No. 1,394/08, Argentina officially announced a decision to pay its outstanding debt to the Paris Club, which offer was accepted. As of September 30, 2013, Argentina’s total public debt (including amounts owed to the Paris Club) amounted to $201 billion and the amount owed specifically to the Paris Club, as of September 30, 2013, equaled $5.9 billion. On May 29, 2014, the Paris Club announced that it had reached an agreement to clear Argentina’s debt in arrears due to the Paris Club in the amount of $9.7 billion, as of April 30, 2014. The agreement provides for repayment of the debt within five years, including a minimum of $1.2 billion to be paid during May 2015 and an additional payment during May 2016.

The foreign shareholders of several Argentine companies, including public utilities and bondholders that did not participate in the exchange offers described above, have filed claims in excess of $16 billion with the International Centre for Settlement of Investment Disputes (the “ICSID”) alleging that the emergency measures adopted by the government differ from the just and equal treatment dispositions set forth in several bilateral investment treaties to which Argentina is a party. As of December 31, 2011, the ICSID has ruled that the Argentine government must pay an amount of approximately $1 billion, plus interest and incurred expenses, in respect of such claims. Furthermore, in connection with the same matter, the United Nations Commission on International Trade Law has issued two judgments requiring the Argentine government to pay $240 million, plus interest and expenses, to these entities. In addition, on August 4, 2011, the ICSID held that it had jurisdiction to hear claims brought by 60,000 Italian holders of Argentine sovereign debt who did not participate in the exchange offers and filed a request for arbitration with the ICSID for a claim totaling $4.4 billion. The tribunal also issued a procedural order to examine how the proceedings were conducted and how the procedural calendar was developed. On July 11, 2013, the arbitration tribunal was constituted in accordance with ICSID convention. From August 9–13, 2013, certain ICSID judgment creditors, including Blue Ridge Investments L.L.C., CC-WB Holdings LLC, Vivendi Universal S.A., Compañía Aguas de Aconquija S.A., Azurix Corp. and NG-UN Holdings LLC, sent letters to the Argentine Ministry of Economy proposing settlement of their claims. On October 18, 2013, the Argentine Ministry of Economy issued Resolution No. 598/2013, which approved a form of a transactional agreement to be entered into with such creditors. The transactional agreement provided for a 25% reduction of the creditors’ claims and payment in kind through Argentine BODEN and Bonos de la Nación Argentina en Dólares Estadounidenses 7% 2017. In addition, the creditors would subscribe for Argentine Bono Argentino de Ahorro para el Desarrollo Económico — Registrable in an amount equal to 10% of their claims. By entering into these transactional agreements, the creditors and the Argentine government would waive all of their respective claims in regard to any awards and any other judicial or administrative actions seeking to obtain recognition and enforcement of such awards. On March 20, 2014, the ICSID proceeding filed by Repsol S.A. on December 18, 2012 in connection with YPF’s expropriation was suspended pursuant to an agreement between Repsol and the Argentine government, which was ratified by the Argentine Congress on April 24, 2014.

In litigation brought before the U.S. federal district court for the Southern District of New York, certain holders of Argentina’s bonds that did not participate in the exchange offers conducted in 2005 and 2010 have challenged Argentina’s decision to pay bondholders who agreed to participate in those exchange offers even as it refuses to pay the nonparticipating bondholders. Pursuant to an order dated February 23, 2012, as amended by an order dated November 21, 2012, based on the equal treatment provision under the defaulted debt, the district court granted an injunction requiring Argentina to pay holders of the defaulted debt as a precondition to making a single interest payment under the restructured debt. The injunction further required Argentina to pay into an escrow account over $1.3 billion prior to making the December 15 scheduled payment of the restructured debt. In its decision issued on October 26, 2012, the U.S. Court of Appeals for the Second Circuit (the “Second Circuit”) affirmed the U.S. federal district court’s ruling that Argentina’s actions violate contractual provisions in the Fiscal Agency Agreement under which the bonds were issued that require the issuer to treat bondholders equally. The Second Circuit’s decision also largely upheld injunctions in favor of the nonparticipating bondholders that the U.S. federal district court issued in February 2012 but stayed pending appeal. The injunctions bar Argentina from paying $3.41 billion that is due to the bondholders on the restructured debt that was issued to them in the 2005 and 2010 exchange offers unless it also makes arrangements to deposit $1.33 billion into escrow to pay the nonparticipating bondholders on the bonds held by them. In an order issued on November 21, 2012, the U.S. federal district court lifted its stay on those injunctions and, as per the Second Circuit’s prior request, clarified the injunction payment formula. However, on November 28, 2012, the Second Circuit granted a stay on the above injunctions and scheduled oral arguments by the parties for February 27, 2013. Following a hearing on March 29, 2013, Argentina submitted an alternative payment formula that included two options. Under the first option, individual investors would receive par bonds due in 2013, plus cash payment for past-due interest and GDP-linked securities. Under the second option, institutional investors would receive discount bonds due in 2033, along with bonds due 2017 for past-due interest and GDP-linked securities. On April 19, 2013, the plaintiffs filed a response rejecting the Argentine offer. On June 24, 2013, Argentina filed a petition for a writ of certiorari in the United States Supreme Court asking it to review the October 26, 2012 decision of the Second Circuit. On August 23, 2013, the Second Circuit affirmed the district court ruling of November 21, 2012 with respect to the injunction payment formula, but stayed enforcement of the injunctions pending resolution of Argentina’s petition before the Supreme Court. On September 20, 2013, Argentina passed Law No. 26,886, which approved a new exchange offer to those bondholders that did not participate in the 2005 and 2010 exchange offers. On September 30, 2013, the Supreme Court decided not to include the review of the October 26, 2012 decision in its docket for the coming term. On February 17, 2014, Argentina filed a petition for a writ of certiorari in the Supreme Court asking it to review the August 23, 2013 decision of the Second Circuit. On April 21, 2014, the Supreme Court held a hearing with the nonparticipating bondholders and Argentina. On June 16, 2014, the Supreme Court decided not to hear Argentina’s appeal on the August 23, 2013 decision of the Second Circuit. Subsequently, the District Court lifted the stay on enforcement of the injunction on June 18, 2014, and on June 26, 2014, it denied an additional request for a stay of the injunctions. Additionally, on June 23, 2014, the District Court appointed Daniel A. Pollack as Special Master to mediate settlement negotiations between Argentina and the litigating bondholders. On June 26, 2014, Argentina announced that it had deposited $539 million with the Bank of New York Mellon, the trustee which manages bond payments for Argentina’s main, not litigating, bondholders and, on June 27, 2014, Judge Thomas Griesa, the U.S. federal judge in charge of the case, issued a statement saying he would nullify any payment made to the main bondholders and order that the amounts corresponding to said payment remain deposited with The Bank of New York Mellon. The negotiations between Argentina and the litigating bondholders with the Special Master ended on July 30, 2014 without reaching an agreement. Since that date, Argentina entered into default vis-à-vis the bondholders that benefited from such judicial ruling. This resulted in a portion of Argentina’s sovereign debt being considered in “technical default,” upon which Standard & Poor’s reduced its credit rating on Argentina’s foreign-currency sovereign debt to “selective default”. Judge Griesa authorized limited exceptions to the injunction allowing certain paying agents of Argentine law-governed bonds denominated in foreign currency to process payments in August 2014, September 2014, December 2014, March 2015 and June 2015. Payments on the remaining restructured bonds governed by foreign law have not been processed as a consequence of the injunction and various restructured bondholders have been seeking the release of such payments in court. As of the date hereof, Judge Griesa has not authorized any other such releases or payments under the exchange bonds; and Argentina and the holdout plaintiffs have not yet reached an agreement. On September 12, 2014, Law No. 26,984 was published in the Official Gazette establishing, inter alia, the removal of The Bank of New York Mellon as trustee under the 2005 and 2010 restructurings and its replacement by Nación Fideicomisos S.A., an entity within the Banco de la Nación Argentina. Additionally, Law No. 26,984 sets forth that payments under the 2005 and 2010 restructurings shall be made in Argentina in a special account to be held by the new trustee in the Central Bank and, if requested by the bondholders of the restructured debt, Argentina shall launch a new exchange offer for bonds governed by Argentine and French law in exchange for those bonds affected by the judicial decisions referred to above. On September 29, 2014, Judge Griesa held Argentina in contempt of court for attempting to pay bondholders in defiance of his rulings, but declared that he would not issue sanctions until a later date. The appeal filed by Argentina against Judge Griesa’s resolution was denied in April 2015.

Certain investment fund holders of Argentine bonds governed by French law filed lawsuits against The Bank of New York Mellon in London for breach of its fiduciary duties as a result of not transferring the amounts deposited by Argentina on June 30, 2013. On February 13, 2015, London courts ruled that interest payments under euro-denominated Argentine bonds are governed by English law, but declined to order that the funds held by the Bank of New York Mellon be distributed to the bondholders. On May 11, 2015, the plaintiffs in this case that obtained pari passu injunctions requested the District Court to amend their complaints to include claims alleging that Argentina’s issuance and servicing of its 2024 dollar-denominated bonds (BONAR 2024), and all its external indebtedness to be issued in the future, would violate the pari passu clause. They also requested to extend the ratable payment injunction (which applied to the exchange bonds) to the BONAR 2024. On June 16, 2015 the District Court granted the order to amend the plaintiffs’ complaints, and the final resolution is still pending before the U.S. courts. In addition, on June 5, 2015, the Second Circuit granted partial summary judgment to a group of 526 holdout creditors who requested the Court to be granted the same treatment as the NML plaintiff (the so-called ‘‘me-too plaintiffs”) in 36 separate lawsuits, finding that, consistent with the previous ruling of such court, Argentina violated the pari passu clause in bonds issued to the ‘‘me-too’’ bondholders. The final resolution of the “me-too” claims is also still pending before the U.S. courts. As of December 17, 2015 the newly elected government has re-opened negotiations with the plaintiffs conducted by Special Master Daniel Pollack. On February 5, 2016 Argentina filed a proposal to resolve the claims of all holders of Argentina’s defaulted debt that, if accepted by plaintiffs, would result in a total payment to plaintiffs of approximately $6.5 billion in cash. On February 19, 2016 the District Court issued an indicative ruling vacating the injunctions upon the occurrence of the followingcurrent economic conditions precedent: (i) that Argentina takes action necessary to repeal Law 26,017 and Law 26,984 and (ii) that any payment is made to the plaintiffs as well as to the “me-too” plaintiffs in virtue of a settlement agreement entered into between the parties on or before February 29, 2016. In order to comply with these conditions, on March 31, 2016 the Argentine Congress passed Law 27,249 which: (i) abrogated Law 26,017 and Law 26,984, (ii) approved the issuance of new bonds for up to $12.5 billion to finance the execution of the settlement agreements, and (iii) conditioned the effective payment to the bondholders to the lifting of the injunctions by the Court of Appeals for the Second Circuit. On April 13, 2016 the Court of Appeals confirmed Judge Griesa’s indicative ruling of February 19, 2016.  In order for the injunctions to be effectively lifted, Judge Griesa must certify that all conditions for the lifting of the injunction have been fulfilled, which was expected to take place on April 22, 2016. According to the last information provided by the government, Argentina has reached agreements with 93% of the litigating bondholders, including some of the “me-too” plaintiffs.  However, certain claims are still on-going in several jurisdictions by those bondholders that have not accepted Argentina’s settlement proposal.

Argentina’s default with respect to the payment of its foreign debt, its delay in completing the debt restructuring process with creditors that did not participate in the related exchange offers, the aforementioned complaints filed against Argentina and the Supreme Court’s decision not to hear Argentina’s appeal and the declaration of contempt, could prevent the government from obtaining international private financing or receiving direct foreign investment as well as private sector companies in Argentina from accessing the international capital markets. Without access to international private financing, Argentina may not be able to finance its obligations, and financing from multilateral financial institutions may be limited or not available. Without access to direct foreign investment, the government may not have sufficient financial resources to foster economic growth.

Our ability to obtain U.S. dollar-denominated financing has been adversely impacted by these factors. During the first half of 2011, we were able to obtain export lines of credit from our Argentine lenders in U.S. dollars at interest rates of 2 – 3% per year. Toward the end of 2011, the interest rates on our export lines from those lenders increased to 5 – 6% per year. During 2013, 2014 and 2015, it became increasingly difficult to obtain financing in U.S. dollars, and loans in local currencies carry significantly higher interest rates. As a result, we expect to incur higher financing costs in future periods, which may have an adverse impact on our results of operations and financial condition.

The lack of financing available for Argentine companies may have an adverse effect on the results of our operations, our ability to access capital and the market price of our common shares.

The prospects for Argentine enterprises accessing financial markets are limited in terms of the amount of financing available and the conditions and costs of such financing. In addition to the default on the Argentine sovereign debt and the global economic crisis that have significantly limited the ability of Argentine enterprises to access international financial markets, in November 2008, the Argentine congress passed a law eliminating the private pension fund system and transferring all retirement and pension funds held by the pension fund administrators (Administradoras de Fondos de Jubilaciones y Pensiones , or “AFJPs”) to the National Social Security Administrative Office (Administración Nacional de la Seguridad Social). Because the AFJPs had been the major institutional investors in the Argentine capital markets, the nationalization of the pension fund system has led to a reduction of the liquidity available in the local Argentine capital markets. In addition, the Argentine government, through its assumption of the AFJP’s equity investments in a variety of the country’s main private companies, became a significant shareholder in such companies. The nationalization of the AFJPs has adversely affected investor confidence in Argentina, which may impact our ability to access the capital markets in the future.

Lack of access to international or domestic financial markets could affect the projected capital expenditures for our operations in Argentina, which, in turn, may have an adverse effect on the results of our operations and on the market price of our common shares.

Argentine exchange controls on the acquisition of foreign currency and on transfers abroad and capital inflows have limited, and may continue to limit, the availability of international credit and access to capital markets, which could have a material adverse effect on our financial condition and business.

In 2001 and 2002, Argentina imposed exchange controls and transfer restrictions substantially limiting the ability of enterprises to retain or obtain foreign currency or make payments abroad. Although some of these restrictions were subsequently eased, in June 2005, the Argentine government issued Decree No. 616/2005, which established new controls on capital inflows that could result in reduced availability of international credit, including the requirement, subject to certain exceptions, that 30% of all funds remitted to Argentina remain deposited in a domestic financial institution for 365 days in a non-interest bearing account. In addition, since the second half of 2011, the Argentine government increased certain controls on the incurrence of foreign currency-denominated indebtedness, the acquisition of foreign currency and foreign assets by local residents. For example, the Argentine Central Bank adopted regulations that (i) shortened the period for a borrower to convert foreign currency-denominated indebtedness into Argentine pesos, (ii) shortened a borrower’s window of access to the local foreign exchange market in connection with a prepayment of scheduled interest payments in respect of foreign currency-denominated indebtedness and (iii) suspended the ability of local residents to access the local exchange market for the acquisition of foreign currency.

Furthermore, AFIP regulations required that all foreign exchange transactions be registered with AFIP.

Recently, the newly elected government has introduced substantial changes to the foreign exchange restrictions reverting most of the measures adopted since 2011 providing greater flexibility and access to the foreign exchange market. See “Information on the Company — Business Overview — Foreign Exchange Controls” below.

Notwithstanding these measures, the Argentine government may impose or increase exchange controls or transfer restrictions in the future in response to capital flight or a significant depreciation of the Argentine peso. Moreover, legislative, judicial or administrative changes or interpretations may be forthcoming. Additional controls could have a negative effect on the ability of Argentine entities to access the international credit or capital markets, the Argentine economy and our financial condition and business.

Restrictions on transfers of foreign currency and the repatriation of capital from Argentina may impair our ability to receive dividends and distributions from, and the proceeds of any sale of, our assets in Argentina.

Argentine law currently permits the Argentine government to impose restrictions on the conversion of Argentine currency into foreign currencies and on the remittance to foreign investors of proceeds from their investments in Argentina (including dividend payments) in circumstances where a serious imbalance develops in Argentina’s balance of payments or where there are reasons to foresee such an imbalance. Beginning in December 2001, the Argentine government implemented a number of monetary and foreign exchange control measures that included restrictions on the free disposition of funds deposited with banks and on the transfer of funds abroad without prior approval by the Argentine Central Bank, some of which are still in effect.

Although the transfer of funds abroad by local companies in order to pay annual dividends only to foreign shareholders, based on approved and fully audited financial statements, does not require formal approval by the Argentine Central Bank, the recent decrease in availability of U.S. dollars in Argentina has led the Argentine government in the past to impose informal restrictions on certain local companies and individuals for purchasing foreign currency for the purpose of making payments abroad, such as dividends, capital reductions, and payment for importation of goods and services.

Although the newly elected government has introduced substantial changes to the foreign exchange providing greater flexibility and access to the foreign exchange market, the imposition of future exchange controls could impair or prevent the conversion of anticipated dividends, distributions, or the proceeds from any sale of equity holdings in Argentina, as the case may be, from Argentine pesos into U.S. dollars and the remittance of the U.S. dollars abroad. These restrictions and controls could interfere with the ability of our Argentine subsidiaries to make distributions in U.S. dollars to us and thus our ability to pay dividends in the future. The domestic revenues of our Argentine subsidiaries (excluding intercompany revenues to other Globant subsidiaries, which are eliminated in consolidation) were $7.6 million in 2015, $4.2 million in 2014 and $5.5 million in 2013, representing 3.0%, 2.1% and 3.5% of our annual consolidated revenues, respectively.

Also, if payments cannot be made in U.S. dollars abroad, the repatriation of any funds collected by foreign investors in Argentine pesos in Argentina may be subject to restrictions. Although as of December 17, 2015 it is no longer required to prove that the investment funds were originally transferred and settled in the Argentine Single Free Foreign Exchange Market (Mercado Único y Libre de Cambios, or “FX Market”) for the repatriation of “foreign direct investments” (i.e., represent at least 10% of the Argentine company’s capital stock), such proof of transfer is still required. In the case of equity positions below the 10% threshold, the repatriation ofworsen, which is also subject to a 120-days waiting period from the date the funds were settled in the FX Market. See “Information on the Company — Business Overview — Foreign Exchange Controls” below. The Argentine government could adopt restrictive measures in the future. If that were the case, a foreign shareholder, such as ourselves, may be prevented from converting the Argentine pesos it receives in Argentina into U.S. dollars. If the exchange rate fluctuates significantly during a time when we cannot convert the foreign currency, we may lose some or all of the value of the dividend distribution or sale proceeds.

These restrictions and requirements could adversely affect our financial condition and the results of our operations, or the market price of our common shares.

Argentina’s regulations on proceeds from the export of services increase our exposure to fluctuations in the value of the Argentine peso, which, in turn, could have an adverse effect on our operationsfinancial condition, results and the market pricecosts of our common shares. The imposition in the future of additional regulations on proceeds collected outside Argentina for services rendered to non-Argentine residents or of export duties and controls could also have an adverse effect on us.

Prior to February 4, 2016 Argentine law, including Communication “A” 5264 of the Argentine Central Bank, as amended, required Argentine residents to transfer the foreign currency proceeds received for services rendered to non-Argentine residents into a local account with a domestic financial institution and to convert those proceeds into Argentine pesos through the FX Market, which is administered by the Argentine Central Bank within 15 business days from the date the foreign currency proceeds are collected. Since February 4, 2016, foreign currency proceeds received for services rendered to non-Argentine residents still have to be transferred to Argentina, but they no longer need to be converted into Argentine pesos through the FX Market. However, this benefit is limited to $2,000,000 per month, and for every non-converted U.S. Dollar, the opportunity to form external assets (i. e. purchase foreign currency bills) is reduced accordingly.

Argentine law does not require exporters of services to be paid only in foreign currency. The applicable regulations do not prohibit or regulate the receipt of in-kind payments by such exporters. During 2013, our U.S. subsidiary agreed to make payment for a portion of the services provided by our Argentine subsidiaries by delivery of U.S. dollar-denominated BODEN purchased in the U.S. debt markets (in U.S. dollars). The BODEN were then delivered to our Argentine subsidiaries as payment for a portion of the services rendered and, after being held by our Argentine subsidiaries for between, on average, 10 to 30 days, were sold in the Argentine market for Argentine pesos. Because the fair value of the BODEN based on the quoted Argentine peso price in the Argentine markets during the year ended December 31, 2013 was higher than the quoted U.S. dollar price for the BODEN in the U.S. debt markets (in U.S. dollars) converted at the official exchange rate prevailing in Argentina (which is the rate used to convert transactions in foreign currency into our Argentine subsidiaries’ functional currency), we recognized a gain when remeasuring the fair value (expressed in Argentine pesos) of the BODEN into U.S. dollars at the official exchange rate prevailing in Argentina.

During the year ended December 31, 2014, we did not participate in any BODEN transactions in connection with payment by our U.S. subsidiary for services provided by our Argentine subsidiaries. If in the future we decide to resume those transactions, we cannot assure you that the Argentine government will not restrict exporters from receiving in-kind payment, require them to repatriate those payments received through the FX Market, or make any other legislative, judicial, or administrative changes or interpretations, any of which could have a material adverse effect on our business, results of operations and financial condition. See note 3.18 to our audited consolidated financial statements, “Operating and Financial Review and Prospects — Results of Operations — 2014 Compared to 2013,” “Operating and Financial Review and Prospects — Results of Operations — 2013 Compared to 2012” and “Certain Income Statement Line Items — Gain on Transaction with Bonds.”

Transactions with bonds acquired as proceeds from the capitalization of our Argentine subsidiaries increase our exposure to fluctuations in the value of the Argentine peso, which, in turn, could have an adverse effect on our operations and the market price of our common shares. The imposition in the future of additional regulations on proceeds collected outside Argentina for capitalization of our Argentine subsidiaries could also have an adverse effect on us.

During the year ended December 31, 2015 and 2014, our Argentine subsidiaries, through cash received from capital contributions, acquired Argentine sovereign bonds, including BODEN and Bonos Argentinos (“BONAR”), in the U.S. market denominated in U.S. dollars.

After acquiring these bonds and after holding them for a certain period of time, our Argentine subsidiaries sold those bonds in the Argentine market. The fair value of these bonds in the Argentine market (in Argentine pesos) during the year ended December 31, 2015 and 2014 was higher than its quoted price in the U.S. market (in U.S dollars) converted at the official exchange rate prevailing in Argentina, which is the rate used to convert these transactions in foreign currency into our Argentine subsidiaries’ functional currency, thus, as a result, we recognized a gain when remeasuring the fair value of the bonds in Argentine pesos into U.S. dollars at the official exchange rate prevailing in Argentina.

We cannot assure you that the quoted price of the BODEN and/or BONAR in Argentine pesos in the Argentine markets will continue to be higher than the quoted price in the U.S. debt markets in U.S. dollars converted at the official exchange rate prevailing in Argentina.

Although as of the date of this annual report, we are not obliged to settle proceeds received from capitalizations abroad through the FX Market, we cannot assure you that the Argentine government will not require Argentine companies to repatriate such proceeds through the FX Market, or make any other legislative, judicial, or administrative changes or interpretations, any of which could have a material adverse effect on our business, results of operations and financial condition. See note 3.18 to our audited consolidated financial statements, “Operating and Financial Review and Prospects — Results of Operations — 2015 Compared to 2014”, “Operating and Financial Review and Prospects — Results of Operations — 2014 Compared to 2013” and “Certain Income Statement Line Items — Gain on Transaction with Bonds.”