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Segment information

12 Months Ended

Jun. 30, 2020

6.	Segment information

IFRS 8 requires an entity to report financial and descriptive information about its reportable segments, which are operating segments or aggregations of operating segments that meet specified criteria. Operating segments are components of an entity about which separate financial information is available that is evaluated regularly by the CODM. According to IFRS 8, the CODM represents a function whereby strategic decisions are made and resources are assigned. The CODM function is carried out by the President of the Group, Mr. Eduardo S. Elsztain. In addition, and due to the acquisition of IDBD, two responsibility levels have been established for resource allocation and assessment of results of the two operations centers, through executive committees in Argentina and Israel.

Segment information is reported from two perspectives: geographic presence (Argentina and Israel) and products and services. In each operations center, the Group considers separately the various activities being developed, which represent reporting operating segments given the nature of its products, services, operations and risks. Management believes the operating segment clustering in each operations center reflects similar economic characteristics in each region, as well as similar products and services offered, types of clients and regulatory environments.

As of fiscal year 2018, the CODM reviews certain corporate expenses associated with each operation center in an aggregate manner and separately from each of the segments, such expenses have been disclosed in the "Corporate" segment of each operation center. Additionally, as of fiscal year 2018, the CODM also reviews the office business as a single segment and the entertainment business in an aggregate and separate manner from offices, including that concept in the "Others" segment.

Below is the segment information which was prepared as follows:

●

Operations Center in Argentina: Within this operations center, the Group operates in the following segments:

The "Shopping Malls" segment includes results principally comprised of lease and service revenues related to rental of commercial space and other spaces in the shopping malls of the Group.

The "Offices" segment includes the operating results from lease revenues of offices, other rental spaces and other service revenues related to the office activities.

The "Sales and Developments" segment includes the operating results of the development, maintenance and sales of undeveloped parcels of land and/or trading properties. Real estate sales results are also included.

The "Hotels" segment includes the operating results mainly comprised of room, catering and restaurant revenues.

The "International" segment includes assets and operating profit or loss from business related to associates Condor (hotels) and New Lipstick (offices).

The "Others" segment primarily includes the entertainment activities through ALG Golf Center S.A., La Rural S.A. and TGLT, and the financial activities carried out by BHSA.

The "Corporate" segment includes the expenses related to the corporate activities of the Operations Center in Argentina.

As of the 2018 fiscal year, the CODM reviews the office business as a single segment and the entertainment business in an aggregate manner and separately from offices, and has been exposed in the "Others" segment.

The CODM periodically reviews the results and certain asset categories and assesses performance of operating segments of this operations center based on a measure of profit or loss of the segment composed by the operating income plus the share of profit / (loss) of joint ventures and associates. The valuation criteria used in preparing this information are consistent with IFRS standards used for the preparation of the Consolidated Financial Statements, except for the following:

●

Operating results from joint ventures are evaluated by the CODM applying proportional consolidation method. Under this method the profit/loss generated and assets are reported in the Statement of Income line-by-line based on the percentage held in joint ventures rather than in a single item as required by IFRS.

●

Management believes that the proportional consolidation method provides more useful information to understand the business return. On the other hand, the investment in the joint venture La Rural S.A. is accounted for under the equity method since this method is considered to provide more accurate information in this case.

●

Operating results from Shopping Malls and Offices segments do not include the amounts pertaining to building administration expenses and collective promotion funds ("FPC", as per its Spanish acronym) as well as total recovered costs, whether by way of expenses or other concepts included under financial results (for example default interest and other concepts). The CODM examines the net amount from these items (total surplus or deficit between building administration expenses and FPC and recoverable expenses).

The assets' categories examined by the CODM are: investment properties, property, plant and equipment, trading properties, inventories, right to receive future units under barter agreements, investment in associates and goodwill. The sum of these assets, classified by business segment, is reported under "assets by segment". Assets are allocated to each segment based on the operations and/or their physical location.

Within the Operations Center in Argentina, most revenue from its operating segments is derived from, and their assets are located in, Argentina, except for the share of profit / (loss) of associates included in the "International" segment located in USA.

Revenues for each reporting segments derive from a large and diverse client base and, therefore, there is no revenue concentration in any particular segment.

●

Operations Center in Israel: Within this operations center, the Group operates in the following segments:

The "Real Estate" segment in which, through PBC, the Group operates rental properties and residential properties in Israel, USA and other parts of the world and carries out commercial projects in Las Vegas, USA. In this fiscal year, the Company lost control over Gav-Yam. Income was reclassified to discontinued operations and no longer forms part of this segment in this fiscal year. Such effect was reclassified in the comparative information. As of September 2018, Gav-Yam started to be valued as an associate.

The "Supermarkets" segment in which, through Shufersal, the Group operated a supermarket chain in Israel. Upon the loss of control in 2018 this segment was reclassified to discontinued operations and presented as an associate since 2019. Due to the loss of control, it was reclassified to discontinued operations and no longer forms part of the segment for fiscal year 2018.

The "Telecommunications" segment includes Cellcom whose main activities include the provision of mobile phone services, fixed line phone services, data, Internet and television, among others.

The "Insurance" segment includes the investment in Clal, insurance company which main activities includes pension and social security insurance, among others. As stated in Note 14, the Group does not have control over Clal; therefore, the business is reported in a single line as a financial asset held for sale and valued at fair value.

The "Others" segment includes other diverse business activities, such as technological developments, tourism, oil and gas assets, electronics, sale of fruit and others.

The "Corporate" segment includes the expenses related with the activities of the holding companies.

The CODM periodically reviews the results and certain asset categories and assesses performance of operating segments of this operations center based on a measure of profit or loss of the segment composed by the operating income plus the share of profit / (loss) of associates and joint ventures. The valuation criteria used in preparing this information are consistent with IFRS standards used for the preparation of the Consolidated Financial Statements.

Goods and services exchanged between segments are calculated on the basis of established prices. Intercompany transactions between segments, if any, are eliminated.

Below is a summary of the Group's lines of business and a reconciliation between the results from operations as per segment information and the results from operations as per the Statements of Income for the years ended June 30, 2020, 2019 and 2018:

	June 30, 2020
	Operations Center in Argentina			Operations Center in Israel			Total			Joint ventures (1)			Expenses and collective promotion funds			Elimination of inter-segment transactions and non-reportable assets / liabilities (2)			Total as per statement of income / statement of financial position
Revenues		11,138			81,637			92,775			(60	)		3,100			(22	)		95,793
Costs		(2,731	)		(56,296	)		(59,027	)		53			(3,230	)		-			(62,204	)
Gross profit / (loss)		8,407			25,341			33,748			(7	)		(130	)		(22	)		33,589
Net gain / (loss) from fair value adjustment of investment properties		33,994			(2,989	)		31,005			(263	)		-			-			30,742
General and administrative expenses		(2,152	)		(8,764	)		(10,916	)		14			-			33			(10,869	)
Selling expenses		(1,231	)		(12,544	)		(13,775	)		18			-			-			(13,757	)
Impairment of associates and joint ventures		-			(2,470	)		(2,470	)		-			-			-			(2,470	)
Other operating results, net		(47	)		1,127			1,080			18			17			(11	)		1,104
Profit / (loss) from operations		38,971			(299	)		38,672			(220	)		(113	)		-			38,339
Share of profit of associates and joint ventures		7,047			1,299			8,346			171			-			-			8,517
Segment profit / (loss)		46,018			1,000			47,018			(49	)		(113	)		-			46,856
Reportable assets		158,263			451,267			609,530			(692	)		-			18,361			627,199
Reportable liabilities		-			(403,184	)		(403,184	)		-			-			(101,360	)		(504,544	)
Net reportable assets		158,263			48,083			206,346			(692	)		-			(82,999	)		122,655

	June 30, 2019
	Operations Center in Argentina			Operations Center in Israel			Total			Joint ventures (1)			Expenses and collective promotion funds			Elimination of inter-segment transactions and non-reportable assets / liabilities (2)			Total as per statement of income / statement of financial position
Revenues		15,055			73,537			88,592			(93	)		3,706			(24	)		92,181
Costs		(3,176	)		(52,426	)		(55,602	)		66			(3,855	)		-			(59,391	)
Gross profit / (loss)		11,879			21,111			32,990			(27	)		(149	)		(24	)		32,790
Net (loss) / gain from fair value adjustment of investment properties		(39,607	)		892			(38,715	)		838			-			-			(37,877	)
General and administrative expenses		(2,674	)		(8,031	)		(10,705	)		18			-			44			(10,643	)
Selling expenses		(1,085	)		(11,192	)		(12,277	)		7			-			-			(12,270	)
Other operating results, net		(660	)		742			82			194			17			(20	)		273
(Loss) / profit from operations		(32,147	)		3,522			(28,625	)		1,030			(132	)		-			(27,727	)
Share of (loss) of associates and joint ventures		(6,031	)		(150	)		(6,181	)		(1,019	)		-			-			(7,200	)
Segment (loss) / profit		(38,178	)		3,372			(34,806	)		11			(132	)		-			(34,927	)
Reportable assets		111,562			535,565			647,127			(609	)		-			31,842			678,360
Reportable liabilities		-			(461,015	)		(461,015	)		-			-			(94,689	)		(555,704	)
Net reportable assets		111,562			74,550			186,112			(609	)		-			(62,847	)		122,656

	June 30, 2018
	Operations Center in Argentina			Operations Center in Israel			Total			Joint ventures (1)			Expenses and collective promotion funds			Elimination of inter-segment transactions and non-reportable assets / liabilities (2)			Total as per statement of income / statement of financial position
Revenues		13,872			60,057			73,929			(109	)		4,387			(20	)		78,187
Costs		(2,802	)		(41,935	)		(44,737	)		70			(4,445	)		-			(49,112	)
Gross profit / (loss)		11,070			18,122			29,192			(39	)		(58	)		(20	)		29,075
Net gain from fair value adjustment of investment properties		20,216			-			20,216			(1,056	)		-			-			19,160
General and administrative expenses		(2,337	)		(7,233	)		(9,570	)		40			-			33			(9,497	)
Selling expenses		(1,125	)		(10,639	)		(11,764	)		15			-			-			(11,749	)
Other operating results, net		(54	)		2,136			2,082			42			(2	)		(13	)		2,109
Profit / (loss) from operations		27,770			2,386			30,156			(998	)		(60	)		-			29,098
Share of (loss) of associates and joint ventures		(4,228	)		(422	)		(4,650	)		928			-			-			(3,722	)
Segment profit / (loss)		23,542			1,964			25,506			(70	)		(60	)		-			25,376
Reportable assets		152,903			563,654			716,557			307			-			25,189			742,053
Reportable liabilities		-			(479,056	)		(479,056	)		-			-			(103,129	)		(582,185	)
Net reportable assets		152,903			84,598			237,501			307			-			(77,940	)		159,868

(1) Represents the equity value of joint ventures that were proportionately consolidated for information by segment purposes.

(2) Includes deferred income tax assets, income tax and MPIT credits, trade and other receivables, investment in financial assets, cash and cash equivalents and intangible assets except for rights to receive future units under barter agreements, net of investments in associates with negative equity which are included in provisions in the amount of Ps. 17, Ps. 8,659 and Ps. 5,453, as of June 30, 2020, 2019 and 2018, respectively.

Below is a summarized analysis of the lines of business of Group's operations center in Argentina for the fiscal years ended June 30, 2020, 2019 and 2018:

	June 30, 2020
	Operations Center in Argentina
	Shopping Malls			Offices			Sales and developments			Hotels			International			Corporate			Others			Total
Revenues		5,935			2,358			735			2,021			11			-			78			11,138
Costs		(567	)		(138	)		(671	)		(1,245	)		(12	)		-			(98	)		(2,731	)
Gross profit / (loss)		5,368			2,220			64			776			(1	)		-			(20	)		8,407
Net (loss) / gain from fair value adjustment of investment properties		(2,105	)		23,285			12,179			-			-			-			635			33,994
General and administrative expenses		(829	)		(221	)		(228	)		(365	)		(110	)		(282	)		(117	)		(2,152	)
Selling expenses		(709	)		(84	)		(197	)		(230	)		-			-			(11	)		(1,231	)
Other operating results, net		(38	)		(29	)		(27	)		(20	)		-			-			67			(47	)
Profit / (loss) from operations		1,687			25,171			11,791			161			(111	)		(282	)		554			38,971
Share of profit of associates and joint ventures		-			-			-			-			7,377			-			(330	)		7,047
Segment profit		1,687			25,171			11,791			161			7,266			(282	)		224			46,018

Investment properties and trading properties		49,109			62,793			32,171			-			307			-			1,442			145,822
Investment in associates and joint ventures		-			-			532			-			2,004			-			6,737			9,273
Other operating assets		276			211			753			1,838			-			-			90			3,168
Operating assets		49,385			63,004			33,456			1,838			2,311			-			8,269			158,263

From all the revenues corresponding to the Operations Center in Argentina, Ps. 11,127 are originated in Argentina, and Ps. 11 in the U.S. No external client represents 10% or more of revenue of any of the reportable segments. From all of the assets corresponding to the Operations Center in Argentina segments, Ps. 155,377 are located in Argentina and Ps. 2,886 in other countries, principally in USA for Ps. 2, 311 and Uruguay for Ps. 575.

	June 30, 2019
	Operations Center in Argentina
	Shopping Malls			Offices			Sales and developments			Hotels			International			Corporate			Others			Total
Revenues		8,541			2,238			1,119			2,953			14			-			190			15,055
Costs		(776	)		(131	)		(526	)		(1,586	)		(6	)		-			(151	)		(3,176	)
Gross profit		7,765			2,107			593			1,367			8			-			39			11,879
Net (loss) / gain from fair value adjustment of investment properties		(40,581	)		616			726			-			6			-			(374	)		(39,607	)
General and administrative expenses		(945	)		(212	)		(283	)		(492	)		(110	)		(519	)		(113	)		(2,674	)
Selling expenses		(530	)		(99	)		(119	)		(316	)		-			-			(21	)		(1,085	)
Other operating results, net		(110	)		(40	)		(286	)		114			(24	)		-			(314	)		(660	)
(Loss) / profit from operations		(34,401	)		2,372			631			673			(120	)		(519	)		(783	)		(32,147	)
Share of profit of associates and joint ventures		-			-			(37	)		-			(3,679	)		-			(2,315	)		(6,031	)
Segment (loss) / profit		(34,401	)		2,372			594			673			(3,799	)		(519	)		(3,098	)		(38,178	)

Investment properties and trading properties		50,365			31,679			27,758			1,901			270			-			1,062			113,035
Investment in associates and joint ventures		10			57			443			-			(7,222	)		-			4,985			(1,727	)
Other operating assetsInvestment		43			1			184			26			-			-			-			254
Operating assets		50,418			31,737			28,385			1,927			(6,952	)		-			6,047			111,562

From all the revenues corresponding to the Operations Center in Argentina, included in the segments Ps. 14,563 are originated in Argentina, Ps. 478 are originated in Uruguay and Ps. 14 are originated in USA. No external client represents 10% or more of revenue of any of the reportable segments. From all of the assets corresponding to the

Operations Center in Argentina segments, Ps. 117,932 are located in Argentina and Ps. (6,370) in other countries, principally in USA for Ps. (6,952) and Uruguay for Ps. 582.

	June 30, 2018
	Operations Center in Argentina
	Shopping Malls			Offices			Sales and developments			Hotels			International			Corporate			Others			Total
Revenues		9,750			1,332			300			2,446			-			-			44			13,872
Costs		(829	)		(105	)		(149	)		(1,670	)		-			-			(49	)		(2,802	)
Gross profit / (loss)		8,921			1,227			151			776			-			-			(5	)		11,070
Net gain from fair value adjustment of investment properties		6,266			6,250			7,338			-			-			-			362			20,216
General and administrative expenses		(853	)		(218	)		(198	)		(487	)		(118	)		(385	)		(78	)		(2,337	)
Selling expenses		(607	)		(142	)		(58	)		(311	)		-			-			(7	)		(1,125	)
Other operating results, net		(105	)		(22	)		138			(40	)		(58	)		-			33			(54	)
Profit / (loss) from operations		13,622			7,095			7,371			(62	)		(176	)		(385	)		305			27,770
Share of profit of associates and joint ventures		-			-			4			-			(4,425	)		-			193			(4,228	)
Segment profit / (loss)		13,622			7,095			7,375			(62	)		(4,601	)		(385	)		498			23,542

Investment properties and trading properties		90,196			28,576			25,149			2,008			197			-			1,333			147,459
Investment in associates and joint ventures		10			57			446			-			(3,869	)		-			8,524			5,168
Other operating assets		57			3			189			27			-			-			-			276
Operating assets		90,263			28,636			25,784			2,035			(3,672	)		-			9,857			152,903

From all the revenues corresponding to the Operations Center in Argentina, the 100% are originated in Argentina. No external client represents 10% or more of revenue of any of the reportable segments. From all of the assets corresponding to the Operations Center in Argentina segments, Ps. 155,890 are located in Argentina and Ps. (2,987) in other countries, principally in USA for Ps. (3,672) and Uruguay for Ps. 685 million.

Below is a summarized analysis of the lines of business of Group's Operations Center in Israel for the years ended June 30, 2020, 2019 and 2018:

	June 30, 2020
	Operations Center in Israel
	Real Estate			Supermarkets		Telecommunications			Insurance		Corporate			Others			Total
Revenues		12,954			-		64,838			-		-			3,845			81,637
Costs		(6,787	)		-		(47,231	)		-		-			(2,278	)		(56,296	)
Gross profit		6,167			-		17,607			-		-			1,567			25,341
Net loss from fair value adjustment of investment properties		(2,989	)		-		-			-		-			-			(2,989	)
General and administrative expenses		(812	)		-		(5,519	)		-		(1,071	)		(1,362	)		(8,764	)
Selling expenses		(223	)		-		(11,887	)		-		-			(434	)		(12,544	)
Impairment of associates and joint ventures		(2,470	)		-		-			-		-			-			(2,470	)
Other operating results, net		(296	)		-		501			-		(48	)		970			1,127
(Loss) / profit from operations		(623	)		-		702			-		(1,119	)		741			(299	)
Share of profit / (loss) of associates and joint ventures		1,495			1,063		(265	)		-		-			(994	)		1,299
Segment profit / (loss)		872			1,063		437			-		(1,119	)		(253	)		1,000

Operating assets		152,941			28,090		140,025			3,377		17,911			108,923			451,267
Operating liabilities		(146,331	)		-		(106,076	)		-		(111,649	)		(39,128	)		(403,184	)
Operating assets (liabilities), net		6,610			28,090		33,949			3,377		(93,738	)		69,795			48,083

	June 30, 2019
	Operations Center in Israel
	Real Estate			Supermarkets		Telecommunications			Insurance		Corporate			Others			Total
Revenues		14,392			-		57,506			-		-			1,639			73,537
Costs		(9,121	)		-		(42,424	)		-		-			(881	)		(52,426	)
Gross profit		5,271			-		15,082			-		-			758			21,111
Net gain from fair value adjustment of investment properties		892			-		-			-		-			-			892
General and administrative expenses		(707	)		-		(4,779	)		-		(1,058	)		(1,487	)		(8,031	)
Selling expenses		(197	)		-		(10,562	)		-		-			(433	)		(11,192	)
Other operating results, net		-			-		397			-		-			345			742
Profit / (loss) from operations		5,259			-		138			-		(1,058	)		(817	)		3,522
Share of profit / (loss) of associates and joint ventures		37			717		-			-		-			(904	)		(150	)
Segment profit / (loss)		5,296			717		138			-		(1,058	)		(1,721	)		3,372

Operating assets		303,425			23,013		109,380			22,638		41,536			35,573			535,565
Operating liabilities		(235,553	)		-		(84,800	)		-		(126,585	)		(14,077	)		(461,015	)
Operating assets (liabilities), net		67,872			23,013		24,580			22,638		(85,049	)		21,496			74,550

	June 30, 2018
	Operations Center in Israel
	Real Estate			Supermarkets		Telecommunications			Insurance		Corporate			Others			Total
Revenues		9,497			-		49,066			-		-			1,494			60,057
Costs		(5,957	)		-		(35,189	)		-		-			(789	)		(41,935	)
Gross profit		3,540			-		13,877			-		-			705			18,122
Net gain from fair value adjustment of investment properties		-			-		-			-		-			-			-
General and administrative expenses		(578	)		-		(4,594	)		-		(854	)		(1,207	)		(7,233	)
Selling expenses		(200	)		-		(10,059	)		-		-			(380	)		(10,639	)
Other operating results, net		256			-		772			-		1,141			(33	)		2,136
Profit / (loss) from operations		3,018			-		(4	)		-		287			(915	)		2,386
Share of profit / (loss) of associates and joint ventures		158			-		-			-		-			(580	)		(422	)
Segment profit / (loss)		3,176			-		(4	)		-		287			(1,495	)		1,964

Operating assets		298,031			29,579		110,723			27,247		47,432			50,642			563,654
Operating liabilities		(231,693	)		-		(86,280	)		-		(155,567	)		(5,516	)		(479,056	)
Operating assets (liabilities), net		66,338			29,579		24,443			27,247		(108,135	)		45,126			84,598

No external client represents 10% or more of the revenue of any of the reportable segments. From all assets corresponding to the Operations Center in Israel segments, Ps. 82,707 are located in USA

(Ps. 74,170 in 2019 and Ps. 77,664 in 2018), Ps. 0 (Ps. 1,979 in 2019 and Ps. 2,333 in 2018) in India and the remaining are located in Israel.