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Information about the main subsidiaries

12 Months Ended

Jun. 30, 2019

Information About Main Subsidiaries [Abstract]

Information about the main subsidiaries

7.

Information about the main subsidiaries

The Group conducts its business through several operating and holding subsidiaries. The Group considers that the subsidiaries below are the ones with significant non-controlling interests to the Group.

		Direct interest of non-controlling interest % % (1)				Current Assets				Non-current Assets				Current Liabilities				Non-current Liabilities				Net assets				Book value of non-controlling interests
		June 30, 2019
Elron			38.94	%			3,163				2,638				370				48				5,383				3,235
PBC			31.20	%			44,712				165,432				17,987				145,893				46,264				33,421
Cellcom (2)			55.90	%			32,155				41,334				19,086				40,248				14,155				8,940
IRSA CP			17.65	%			17,186				63,813				4,056				36,330				40,613				2,178
			June 30, 2018
Elron			49.70	%			3,007				2,505				392				37				5,083				3,658
PBC			35.60	%			36,801				169,114				24,943				140,980				39,992				33,806
Cellcom (2)			57.90	%			32,958				43,013				19,604				40,619				15,748				9,943
IRSA CP			13.66	%			16,589				89,618				4,070				42,686				59,452				2,244

		Revenues				Net income / (loss)				Total comprehensive income / (loss)				Total comprehensive profit / (loss) attributable to non-controlling interest				Cash of Operating activities				Cash of investing activities				Cash of financial activities				Net Increase / (decrease) in cash and cash equivalents				Dividends distribution to non-controlling shareholders
		Year ended June 30, 2019
Elron		-				(739)				(636)				1,485				(708)				145				936				373				-
PBC			12,637				4,865				5,300				3,659				6,354				750				2,047				9,151				1,635
Cellcom (2)			33,259				(1,066	)			(1,076	)			(946	)			7,014				(6,027	)			1,166				2,153				-
IRSA CP			10,171				(18,138	)			(18,138	)			(105	)			3,910				(3,469	)			(1,841	)			(1,400	)			705
			Year ended June 30, 2018
Elron			-				(797	)			(124	)			(793	)			(509	)			534				(205	)			(180	)			241
PBC			9,619				4,602				(282	)			1,649				4,781				42				(1,853	)			2,970				1,115
Cellcom (2)			29,784				(792	)			8				(784	)			6,218				(4,004	)			594				2,808				-
IRSA CP			10,895				14,237				14,237				507				4,916				(6,806	)			3,470				1,580				1,283

(1)	Corresponds to the direct interest from the Group.

(2)	DIC considers it exercises effective control over Cellcom because DIC is the group with the higher percentage of votes vis-à-vis other shareholders, also taking into account the historic voting performance in the Shareholders' Meetings.

Restrictions, commitments and other relevant issues

Analysis of the impact of the Concentration Law

On December 2013, was published in the Official Gazette of Israel the Promotion of Competition and Reduction of Concentration Law N°, 5774-13 ('the Concentration Law') which has material implications for IDBD, DIC and its investors, including the disposal of the controlling interest in Clal. In accordance with the provisions of the law, the structures of companies that make public offer of their securities are restricted to two layers of public companies.

In November 2017, Dophin IL, a subsidiary of Dolphin Netherlands B.V. acquired all the shares owned by IDBD in DIC (See note 4). Thus, the section required by the aforementioned law for the year 2017 is completed.

Prior to December 31, 2019 the Group should reduce its control structure of companies that make public offer in Israel to two layers. It currently has three layers of public companies (DIC, PBC and Gav-Yam, Mehadrin and Ispro).

After June 30, 2019 and before the issuance of these financial statements, the Group has made a partial sale of its stake in Gav-Yam and has lost control over the subsidiary and repurchased Ispro debentures to fulfill the requirements of the legislation. (Note 33)

As of the date of issuance of these financial statements, the Group has not made a decision in relation to its interest stake in Mehadrin. However the Management estimates that it has the capacity to execute the corresponding decision before the deadline established to comply with the Concentration Law (December 31, 2019). The alternatives evaluated by the Board of Directors are the sale of the interest owned to a third party a third-party, its distribution to shareholders as a dividend in kind or the acquisition of non-controlling interest.

Dolphin arbitration process

There is an arbitration process going on between Dolphin and ETH (previous shareholder of IDBD) in relation to certain issues connected to the control obtainment of IDBD (mainly regarding who had the right of purchase and the price of the acquisition). In the arbitration process the parties have agreed to designate Eyal Rosovshy and Giora Erdinas to promote a mediation. On August 17, 2017, a mediation hearing was held and the parties failed to reach an agreement. On January 31, 2018, the parties agreed to follow the process in court. As of the date of presentation of these Consolidated Financial Statements, there have been no other developments in the process and it is still pending resolution. Management, based on the opinion of its legal advisors, considers that the resolution of the present litigation will not have an adverse effect for Dolphin.