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United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 30, 2021

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES AND EXCHANGE ACT OF 1934

Date of event requiring this shell company report ___

Commission file number 001-13542

IRSA Inversiones y Representaciones Sociedad Anónima
(Exact name of Registrant as specified in its charter)

IRSA Investments and Representations Inc.
(Translation of Registrant’s name into English)

Republic of Argentina

(Jurisdiction of incorporation or organization)

Carlos M. Della Paolera 261, 9th Floor (C1001ADA)

Ciudad Autónoma de Buenos Aires, Argentina

(Address of principal executive offices)

Matías Iván Gaivironsky, Chief Financial and Administrative Officer

Tel +54(11) 4323-7449 - ir@irsa.com.ar

Carlos M. Della Paolera 261, 9th Floor, (C1001ADA) - Ciudad Autónoma de Buenos Aires, Argentina

(Name, Telephone, E-mail and/or Facsmile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12 (b) of the Act.

Title of each class |  | Trading Symbol |  | Name of each exchange on which registered
Global Depositary Shares, each representing ten shares of Common Stock |  | IRS |  | New York Stock Exchange New York Stock Exchange*
Common Stock, par value ARS 1.00 per share |  |  |  |

*Not for trading, but only in connection with the registration of Global Depositary Shares, pursuant to the requirements of the Securities and Exchange Commission.

Securities registered or to be registered pursuant to Section 12 (g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15 (d) of the Act: None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the Annual Report: 658,676,460.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act:

☐ Yes ☒ No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934.

☒ Yes ☐ No

Note: Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:

☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

Large accelerated filer | ☐ | Accelerated filer | ☒
Non-accelerated filer | ☐ | Emerging growth company | ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ☐ | International Financial Reporting Standards as issued by the International Accounting statements included in this filing: ☒ | Other ☐

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow:

Item 17 ☐ Item 18 ☐

If this is an Annual Report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):

☐ Yes ☒ No

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by the court. Yes ☐ No ☐

Please send copies of notices and communications from the Securities and Exchange Commission to:

Carolina Zang |  | Jaime Mercado
Zang Bergel & Viñes |  | Simpson Thacher & Bartlett LLP
Florida 537 piso 18º C1005AAK Ciudad Autónoma de Buenos Aires, Argentina. |  | 425 Lexington Avenue New York, NY 10017

Table of Contents

IRSA INVERSIONES Y REPRESENTACIONES SOCIEDAD ANÓNIMA

|  | Page |
SUMMARY OF RISK FACTORS |  |  |
DISCLAIMER REGARDING FORWARD-LOOKING STATEMENTS |  | i |
AVAILABLE INFORMATION |  | ii |
PRESENTATION OF FINANCIAL AND CERTAIN OTHER INFORMATION |  | iii |
PART I |  | 1 |
ITEM 1. Identity of Directors, Senior Management, Advisers and auditors |  | 1 |
ITEM 2. Offer Statistics and Expected Timetable |  | 1 |
ITEM 3. Key Information |  | 1 |
A. Reserved |  | 1 |
A.1. Local exchange market and exchange rates |  | 1 |
B. Capitalization and Indebtedness |  | 1 |
C. Reasons for the Offer and Use of Proceeds |  | 1 |
D. Risk Factors |  | 1 |
ITEM 4. Information on the Company |  | 36 |
A. History and Development of the Company |  | 36 |
B. Business Overview |  | 44 |
C. Organizational Structure |  | 75 |
D. Property, Plant and Equipment |  | 76 |
ITEM 4A. Unresolved staff comments |  | 77 |
ITEM 5. Operating and Financial Review and Prospects |  | 77 |
A. Operating Results |  | 77 |
B. Liquidity and capital resources |  | 112 |
C. Research and Development, Patents and Licenses, etc. |  | 119 |
D. Trend Information |  | 119 |
E. Critical Accounting Estimates |  | 121 |
F. Off-Balance Sheet Arrangements |  | 122 |
G. Tabular Disclosure of Contractual Obligations |  | 122 |
H. Safe Harbor |  |  |
ITEM 6. Directors, Senior Management and Employees |  | 123 |
A. Directors and Senior Management |  | 123 |
B. Compensation |  | 128 |
C. Board practices |  | 130 |
D. Employees |  | 130 |
E. Share Ownership |  | 131 |
ITEM 7. Major Shareholders and Related Party Transactions |  | 132 |
A. Major Shareholders |  | 132 |
B. Related Party Transactions |  | 133 |
C. Interests of Experts and Counsel |  | 135 |
ITEM 8. Financial Information |  | 136 |
A. Consolidated Statements and Other Financial Information |  | 136 |
B. Significant changes |  | 141 |
ITEM 9. The Offer and Listing |  | 141 |
A. The offer and listing details |  | 141 |
B. Plan of Distribution |  | 142 |
C. Markets |  | 142 |
D. Selling Shareholders |  | 144 |
E. Dilution |  | 144 |
F. Expenses of the Issue |  | 144 |
ITEM 10. Additional Information |  | 144 |
A. Share Capital |  | 144 |
B. Memorandum and Articles of Association |  | 144 |
C. Material Contracts |  | 150 |

Table of Contents

D. Exchange Controls |  | 150 |
E. Money Laundering |  | 153 |
F. Taxation |  | 155 |
G. Dividends and Paying Agents |  | 162 |
H. Statement by Experts |  | 162 |
I. Documents on Display |  | 162 |
J. Subsidiary Information |  | 163 |
ITEM 11. Quantitative and Qualitative Disclosures About Market Risk |  | 163 |
ITEM 12. Description of Securities Other than Equity Securities |  | 163 |
A. Debt Securities |  | 163 |
B. Warrants and Rights |  | 163 |
C. Other Securities |  | 163 |
D. American Depositary Shares |  | 163 |
PART II |  | 164 |
ITEM 13. Defaults, Dividend Arrearages and Delinquencies |  | 164 |
ITEM 14. Material Modifications to the Rights of Security Holders and Use of Proceeds |  | 164 |
A. Fair Price Provision |  | 164 |
ITEM 15. Controls and procedures |  | 165 |
A. Disclosure Controls and Procedures. |  | 165 |
B. Management’s Annual Report on Internal Control Over Financial Reporting |  | 165 |
C. Attestation Report of the Registered Public Accounting Firm |  | 166 |
D. Changes in Internal Control Over Financial Reporting |  | 166 |
ITEM 16. Reserved |  | 166 |
A. Audit Committee Financial Expert |  | 166 |
B. Code of Ethics |  | 166 |
C. Principal Accountant Fees and Services. |  | 167 |
D. Exemption from the Listing Standards for Audit Committees |  | 167 |
E. Purchase of Equity Securities by the Issuer and Affiliated Purchasers |  | 167 |
F. Change in Registrant´s Certifying Account |  | 167 |
G. Corporate Governance |  | 168 |
H. Mine Safety Disclosures |  | 168 |
I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections |  | 168 |
PART III |  | 169 |
ITEM 17. Financial Statements |  | 169 |
ITEM 18. Financial Statements |  | 169 |
ITEM 19. Exhibits |  | 169 |

Table of Contents

DISCLAIMER REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report includes forward-looking statements, principally under “Risk Factors,” “Information on the Company” and “Operating and Financial Review and Prospects.” We have based these forward-looking statements largely on our current beliefs, expectations and projections about future events and financial trends affecting our business. Many important factors, in addition to those discussed elsewhere in this Annual Report, could cause our actual results to differ substantially from those anticipated in our forward-looking statements, including, among other things:

Factors that could cause actual results to differ materially and adversely include but are not limited to:

| · | changes in general economic, financial, business, political, legal, social or other conditions in Argentina and Latin America or changes in developed markets or emerging markets or both;
| · | changes in capital markets in general that may affect policies or attitudes toward lending to or investing in Argentina or Argentine companies, including volatility in domestic and international financial markets;
| · | inflation and deflation;
| · | ongoing economic impacts of the COVID-19 pandemic on the Argentine economy;
| · | measures adopted by the Argentine Government in response to the COVID-19 pandemic,
| · | impact on our business of the COVID-19 pandemic;
| · | economic consequences of the pandemic and the related impact on our business and financial condition;
| · | fluctuations in the exchanges rates of the peso and in the prevailing interest rates;
| · | increases in financing costs or our inability to obtain additional financing on attractive terms, which may limit our ability to fund existing operations and to finance new activities;
| · | current and future government regulation and changes in law or in the interpretation by Argentine courts;
| · | price fluctuations in the real estate market;
| · | political, civil and armed conflicts;
| · | adverse legal or regulatory disputes or proceedings;
| · | fluctuations and declines in the aggregate principal amount of Argentine public debt outstanding, default of sovereign debt;
| · | government intervention in the private sector and in the economy, including through nationalization, expropriation, labor regulation or other actions;
| · | restrictions on transfer of foreign currencies and other exchange controls;
| · | increased competition in the shopping mall sector, office or other commercial properties and related industries;
| · | potential loss of significant tenants at our shopping malls, offices or other commercial properties;
| · | our ability to take advantage of opportunities in the real estate market on a timely basis;
| · | restrictions on energy supply or fluctuations in prices of utilities in the Argentine market;
| · | our ability to meet our debt obligations;
| · | shifts in consumer purchasing habits and trends;

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| · | technological changes and our potential inability to implement new technologies;
| · | deterioration in regional, national or global businesses and economic conditions;
| · | changes on the applicable regulations to currency exchange or transfers;
| · | incidents of government corruption that adversely impact the development of our real estate projects;
| · | fluctuations and declines in the exchange rate of the peso, the U.S. dollar against other currencies; and
| · | the risk factors discussed under “Risk Factors.”

You can identify forward-looking statements because they contain words such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “intends,” “plans,” “estimates,” “anticipates,” “could,” “target,” “projects,” “contemplates,” “potential,” “continue” or similar expressions. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, the effects of future regulation and the effects of competition. Forward-looking statements speak only as of the date they were made, and we undertake no obligation to update publicly or to revise any forward-looking statements after we distribute this Annual Report because of new information, future events or other factors. In light of the risks and uncertainties described above, the forward-looking events and circumstances discussed in this Annual Report might not occur and are not guarantees of future performance.

You should not place undue reliance on such statements which speak only as of the date that they were made. These cautionary statements should be considered in connection with any written or oral forward-looking statements that we might issue in the future.

AVAILABLE INFORMATION

We file annual and current reports and other information with the United States Securities and Exchange Commission (“SEC”). You may obtain any report, information or other document we file electronically with the SEC at the SEC’s website (http://www.sec.gov) or at our website (http://www.irsa.com.ar). The information contained in our website does not form part of this Annual Report.

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PRESENTATION OF FINANCIAL AND CERTAIN OTHER INFORMATION

In this annual report (the “Annual Report”), references to “IRSA,” the “Company,” “we,” “us” and “our” means IRSA Inversiones y Representaciones Sociedad Anónima and its consolidated subsidiaries, unless the context otherwise requires, or where we make clear that such term refers only to IRSA and not to its subsidiaries.

The terms “Argentine government” and “government” refer to the federal government of Argentina, the term “Central Bank” refers to the Banco Central de la República Argentina (the Argentine Central Bank), the terms “CNV” and “CNV Rules” refer to the Comisión Nacional de Valores (the Argentine National Securities Commission) and the rules issued by the CNV, respectively. In this Annual Report, when we refer to “peso,” “pesos” or “ARS” we mean Argentine pesos, the legal currency of Argentina, and when we refer to “U.S. dollar,” “U.S. dollars” or “USD” we mean United States dollars, the legal currency of the United States.

References to “GDSs” are to the Global Depositary Shares, each representing 10 shares of our common stock, issued pursuant to the deposit agreement, dated as of March 19, 1997 (the “deposit agreement”), between us, The Bank of New York, as depositary (the “GDS Depositary”), and the owners and holders of the GDSs issued from time to time thereunder, and references to “GDRs” are to the Global Depositary Receipts, which represent the GDSs.

Financial Statements

We prepare and maintain our financial books and records in pesos and in conformity with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”), and the CNV Rules. Our fiscal year begins on July 1 and ends on June 30 of each year.

Our audited Consolidated Financial Statements as of June 30, 2021 and 2020 and for the years ended June 30, 2021, 2020 and 2019, and the notes thereto (our “Audited Consolidated Financial Statements”) are set forth on pages F-1 through F-95 of this Annual Report.

Our Audited Consolidated Financial Statements have been approved by resolution of the Board of Directors’ meeting held on October 18, 2021 and have been audited by Price Waterhouse & Co S.R.L., Argentina, member of PriceWaterhouseCoopers International Limited, an independent registered public accounting firm whose report is included herein.

Deconsolidation of IDBD and DIC

Prior to September 25, 2020, we managed our business and operations in Israel through our subsidiaries IDBD and DIC. On September 25, 2020, the District Court in Tel Aviv-Jaffa (the “Court”), in response to a petition from IDBD’s creditors, declared the insolvency of IDBD and initiated liquidation proceedings (the “Liquidation Proceedings”). The Court appointed a trustee for IDBD’s shares and receivers for DIC’s and Clal’s shares.

Under IFRS 10 “Consolidated Financial Statements” (“IFRS 10”), an investor controls an investee if and only if the investor has all the following: (a) power over the investee; (b) exposure, or rights, to variable returns from its involvement with the investee; and (c) the ability to use its power over the investee to affect the amount of the investor’s returns. Based on the facts and circumstances outlined above, our management believes that, as from September 25, 2020, IRSA lost control over IDBD and DIC (as this term is defined by IFRS 10). Accordingly, (a) our investment in IDBD and DIC has been deconsolidated in our unaudited condensed interim consolidated financial statements as of September 30, 2020 and for the three-month periods ended September 30, 2020 and 2019, and (b) comparative information in our Audited Consolidated Financial Statements have been retrospectively restated to reflect the deconsolidation of IDBD and DIC.

As of the date of this Annual Report, we no longer own any capital stock of IDBD while we have an investment in DIC that amounts to 2,062,000 of shares.

Functional and Presentation Currency; Adjustment for Inflation

Our functional and presentation currency is the peso, and our Audited Consolidated Financial Statements included in this Annual Report are presented in pesos.

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IAS 29, Financial Reporting in Hyperinflationary Economies (“IAS 29”) requires that the financial statements of an entity whose functional currency is one of a hyperinflationary economy be measured in terms of the current unit of measurement at the closing date of the financial statements, regardless of whether they are based on the historical cost method or the current cost method. This requirement also includes the comparative information of the financial statements.

In order to conclude that an economy is “hyperinflationary,” IAS 29 outlines a series of factors, including the existence of an accumulated inflation rate in three years that is approximately or exceeds 100%. As of July 1, 2018, Argentina reported a cumulative three-year inflation rate greater than 100% and therefore financial information published as from that date should be adjusted for inflation in accordance with IAS 29. Therefore, our Audited Consolidated Financial Statements and the financial information included in this Annual Report have been stated in terms of the measuring unit current at the end of the reporting year. For more information, see section “Financial Statements” above and Note 2.1 to our Audited Consolidated Financial Statements.

Effective July 1, 2018, we adopted IFRS 15, Revenues from contracts with customers (“IFRS 15”) and IFRS 9, Financial instruments (“IFRS 9”) using the modified retrospective approach, so that the cumulative impact of the adoption was recognized in the retained earnings at the beginning of the fiscal year starting on July 1, 2018, and the comparative figures were consequently not modified.

Effective July 1, 2019, we adopted IFRS 16 “Leases” which establishes the criteria for recognition and valuation of leases for lessees and lessors. The changes incorporated mainly impact the tenant’s accounting. IFRS 16 provides that the lessee recognizes an asset for the right of use and a liability at present value with respect to those contracts that meet the definition of lease agreements according to IFRS 16. In accordance with the standard, a lease agreement is one that provides the right to control the use of an identified asset for a specific period. In order for a company to have control over the use of an identified asset: a) it must have the right to obtain substantially all the economic benefits of the identified asset and b) it must have the right to direct the use of the identified asset. The standard allows to exclude the short-term contracts (under 12 months) and those in which the underlying asset has low value. The application of IFRS 16 increased assets and liabilities and generated a decrease in operating costs for leases. On the other hand, the balance of depreciation and financial results generated by the present value of those lease liabilities were increased. This application does not imply changes in comparative information.

Additionally, effective July 1, 2019, in accordance with the amendment to IAS 28, an entity shall implement the provisions of IFRS 9 to Long-term Investments that are essentially part of the entity’s net investment in the associate or in the joint venture according to the definitions of said standard, using the modified retrospective approach. The provisions of IFRS 9 shall apply to such investments with respect to the participation in the losses of an associate or a joint venture, as well as with respect to the recognition of the impairment of an investment in an associate or joint venture. In addition, when applying IFRS 9 to such long-term investments, the entity will make it prior to the adjustments made to the carrying amount of the investment in accordance with IAS 28. We opted for an accounting policy where the currency translation adjustments arising from these loans are recorded as part of other comprehensive income.

See Note 2.2 to our Audited Consolidated Financial Statements for a more information of the adoption of new standards.

Currency Translations

We have translated some of the peso amounts contained in this Annual Report into U.S. dollars for convenience purposes only. Unless otherwise specified or the context otherwise required, the rate used to convert peso amounts to U.S. dollars is the seller exchange rate quoted by Banco de la Nación Argentina of ARS 95.7200 per USD 1.00 as of June 30, 2021. The average seller exchange rate for fiscal year 2021, quoted by Banco de la Nación Argentina was ARS 83.9081. The seller exchange rate quoted by Banco de la Nación Argentina was ARS 99.1600 per USD 1.00 as of October 14, 2021. The U.S. dollar-equivalent information presented in this Annual Report is provided solely for the convenience of the reader and should not be construed as implying that the peso amounts represent, or could have been or could be converted into, U.S. dollars at such rates or at any other rate. See “Local Exchange Market and Exchange Rates” and “Risk Factors—Risks relating to Argentina—Continuing high rates of inflation may have an adverse effect on the economy and our business, financial condition and the results of our operations.”

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Market Share Data

Information regarding market share in a specified region or area is based on data compiled by us from internal sources and from publications such as Bloomberg, the International Council of Shopping Centers, the Argentine Chamber of Shopping Centers (Cámara Argentina de Shopping Centers), and the INDEC.

Certain Measurements

In Argentina the standard measure of area in the real estate market is the square meters (m2, or “sqm”), while in the United States and certain other jurisdictions the standard measure of area is the square foot (sq. ft.). All units of area shown in this Annual Report (e.g., gross leasable area of buildings (“GLA” or “gross leasable area”), and size of undeveloped land) are expressed in terms of sqm. One sqm is equal to approximately 10.8 square feet. One hectare is equal to approximately 10,000 sqm and to approximately 2.47 acres.

As used herein, GLA in the case of shopping malls refers to the total leasable area of the property, regardless of our ownership interest in such property (excluding common areas and parking and space occupied by supermarkets, hypermarkets, gas stations and co-owners, except where specifically stated).

Rounding Adjustments

Certain numbers and percentages included in this Annual Report have been subject to rounding adjustments. Accordingly, figures shown for the same category presented in various tables or other sections of this Annual Report may vary slightly, and figures shown as totals in certain tables may not be the arithmetic aggregation of the figures that precede them.

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PART I

ITEM 1. Identity of Directors, Senior Management, Advisers and Auditors

This item is not applicable.

ITEM 2. Offer Statistics and Expected Timetable

This item is not applicable.

ITEM 3. Key Information

A. Reserved

A.1. Local Exchange Market and Exchange Rates

The Argentine government has established a series of exchange control measures that restrict the free flow of currency and the transfer of funds abroad. These measures significantly curtail access to the foreign exchange market Mercado Único y Libre de Cambios (“MULC”) by both individuals and private sector entities. This makes it necessary, among other things, to obtain prior approval from the Banco Central de la República Argentina (the “Central Bank”) to enter into certain foreign exchange transactions such as payments relating to royalties, services or fees payable to related parties of Argentine companies outside Argentina. For more information about exchange controls see, “Item 10. Additional Information—D. Exchange Controls”.

The following table shows the maximum, minimum, average and closing exchange rates for each applicable period to purchases of U.S. dollars.

|  | Maximum (1) (2) |  |  | Minimum (1) (3) |  |  | Average (1) (4) |  |  | At closing (1) |
Fiscal year ended: |  |  |  |  |  |  |  |  |  |  |  |
June 30, 2019 |  |  | 45.8700 |  |  |  | 27.1600 |  |  |  | 37.8373 |  |  |  | 42.3630 |
June 30, 2020 |  |  | 70.3600 |  |  |  | 41.5000 |  |  |  | 59.5343 |  |  |  | 70.3600 |
June 30, 2021 |  |  | 95.6200 |  |  |  | 70.4200 |  |  |  | 83.8081 |  |  |  | 95.6200 |
Month ended: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
July 31, 2021 |  |  | 96.5900 |  |  |  | 95.6600 |  |  |  | 96.1348 |  |  |  | 96.5900 |
August 31, 2021 |  |  | 97.6400 |  |  |  | 96.6900 |  |  |  | 97.1110 |  |  |  | 97.6400 |
September 30, 2021 |  |  | 98.6400 |  |  |  | 97.6800 |  |  |  | 98.1791 |  |  |  | 98.6400 |
October, 2021 (through October 14, 2021) |  | 99.0600 |  |  | 98.6900 |  |  | 98.8713 |  |  | 99.0600 |

__________

Source: Banco de la Nación Argentina

(1) | Average between the offer exchange rate and the bid exchange rate according to Banco de la Nación Argentina’s foreign currency exchange rate.
(2) | The maximum exchange rate appearing in the table was the highest end-of-month exchange rate in the year or shorter period, as indicated.
(3) | The minimum exchange rate appearing in the table was the lowest end-of-month exchange rate in the year or shorter period, as indicated.
(4) | Average exchange rates at the end of the month.

B. Capitalization and Indebtedness

This section is not applicable.

C. Reasons for the Offer and Use of Proceeds

This section is not applicable.

D. Risk Factors

Summary of Risk Factors

The following summarizes some, but not all, of the risks provided below. Please carefully consider all of the information discussed in this Item 3.D. “Risk Factors” in this annual report for a more thorough description of these and other risks:

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Risks Relating to Argentina

· | The ongoing COVID-19 pandemic and government measures to contain the virus are adversely affecting our business and results of operations, and, as conditions are evolving rapidly, we cannot accurately predict the ultimate impact on our results of operations.
· | We depend on macroeconomic and political conditions in Argentina.
· | Continuing high rates of inflation may have an adverse effect on the economy and our business, financial condition and results of operations.
· | Argentina’s ability to obtain financing in the international capital markets is limited, which may impair our ability to access international credit markets to finance our operations in Argentina.
· | Significant fluctuation in the exchange rate of the Peso against foreign currencies may adversely affect the Argentine economy as well as our financial condition and results of operations.
· | Property values in U.S. dollars in Argentina could decline significantly.

Risks Relating to our Business

· | Disease outbreaks or other public health concerns could reduce traffic in our shopping malls.
· | We are subject to risks inherent to the operation of shopping malls that may affect our profitability. An adverse economic environment for real estate companies and the credit crisis may adversely affect our results of operations.
· | Our assets are highly concentrated in certain geographic areas and an economic downturn in such areas could have a material adverse effect on our results of operations and financial condition.
· | The loss of tenants could adversely affect our operating revenue and value of our properties.
· | Our level of debt may adversely affect our operations and our ability to pay our debt as it becomes due and our capacity to successfully access the local and international markets on favorable terms affects our cost of funding.
· | We may face risks associated with acquisitions of properties, our future acquisitions may not be profitable and the properties we acquire may be subject to unknown liabilities.
· | Some of the land we have purchased is not zoned for development purposes, and we may be unable to obtain, or may face delays in obtaining, the necessary zoning permits and other authorizations.
· | The increasingly competitive real estate sector in Argentina may adversely affect our ability to rent or sell office space and other real estate and may affect the sale and lease price of our premises.
· | We are dependent on our Board of Directors senior management and other key personnel and may face potential conflicts of interest relating to our principal shareholders.

Risks Relating to our Investment in Banco Hipotecario

· | The short-term structure of Banco hipotecario’s deposit base could lead to a reduction in liquidity levels and limit the long-term expansion of financial intermediation.
· | Banco Hipotecario’s capacity to successfully access the local and international markets on favorable terms affects its cost of funding.
· | The asset quality of financial institutions is exposed to the non-financial public sector’s and Central Bank’s indebtedness.

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· | Banco Hipotecario operates in a highly regulated environment and its operations are subject to capital controls regulations adopted by several regulatory agencies.
· | The Covid-19 may negatively impact the operations and financial situation of Banco Hipotecario.

Risks Relating to our GDSs and Common Shares

· | Shares eligible for sale could adversely affect the price of our common shares and GDSs.
· | If we issue additional equity securities in the future, you may suffer dilution, and trading prices for our equity securities may decline.
· | We are subject to certain different corporate disclosure requirements and accounting standards than domestic issuers of listed securities in the United States.
· | Investors may not be able to effect service of process within the U.S., limiting their recovery of any foreign judgment.
· | If we are considered to be a passive foreign investment company for United States federal income tax purposes, U.S. holders of our common shares or GDSs would suffer negative consequences.
· | Holders of the GDS may be unable to exercise voting rights with respect to the common shares underlying their GDSs.
· | Under Argentine law, shareholder rights may be fewer or less well defined than in other jurisdictions and our ability to pay dividends is limited by law and our by-laws.
· | Restrictions on the movement of capital out of Argentina may impair your ability to receive dividends and distributions on, and the proceeds of any sale of, the common shares underlying the GDSs.
· | You might be unable to exercise preemptive or accretion rights with respect to the common shares underlying your GDSs.
· | Our shareholders may be subject to liability for certain votes of their securities.
• | The warrants are exercisable under limited circumstances and will expire.

Risk Factors

You should carefully consider the risks described below, in addition to the other information contained in this Annual Report, before making an investment decision. We also may face additional risks and uncertainties not currently known to us, or which as of the date of this Annual Report we might not consider significant, which may adversely affect our business. In general, you take more risk when you invest in securities of issuers in emerging markets, such as Argentina, than when you invest in securities of issuers in the United States, and certain other markets. You should understand that an investment in our common shares and Global Depositary Shares (“GDSs”) involves a high degree of risk, including the possibility of loss of your entire investment.

Risks Relating to Argentina

The ongoing COVID-19 pandemic and government measures to contain the virus are adversely affecting our business and results of operations, and, as conditions are evolving rapidly, we cannot accurately predict the ultimate impact on our results of operations.

The outbreak of COVID-19 rapidly spread across the globe in 2020 and is continuing to disrupt worldwide economic activity. Countries around the world, including across Latin America, have adopted extraordinary measures to limit the spread of COVID-19, including imposing travel restrictions and bans, closing borders, establishing restrictions on public gatherings, instructing residents to practice social distancing, requiring closures of non-essential businesses, issuing stay at home advisories and orders, implementing quarantines and similar actions. The degree of containment of the virus, and the recovery in travel, has varied country by country. During the recovery period, there have been instances where cases of COVID-19 have started to increase again after a period of decline, which in some cases impacted the recovery of the economy in certain countries. COVID-19 has also had broader economic impacts, including an increase in unemployment levels and reduction in economic activity, which could lead to recession and further reduction in consumer or business spending, which may negatively impact the timing and level of a recovery in consumer demand.

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As of the date of this Annual Report, most of the operations and properties are located in Argentina. As a result, the quality of our assets, our financial condition and the results of our operations are dependent upon the macroeconomic, regulatory, social and political conditions prevailing in Argentina. These conditions include changes to growth rates, inflation rates, exchange rates, interest rates, taxes, foreign exchange controls, government policies, social instability, and other political, economic or international developments taking place in, or otherwise affecting, Argentina.

In order to mitigate the economic impact of the COVID-19 pandemic and mandatory lockdown and shutdown of non-essential businesses, the Argentine government has adopted social aid, monetary and fiscal measures. We cannot assure you whether these measures will be sufficient to prevent a severe economic downturn in Argentina, particularly if current conditions are prolonged and if Argentina’s main trading partners are concurrently facing an economic recession.

Some of the measures adopted by the Argentine government may adversely affect the business and financial condition of companies operating in the real estate sector, such as our Company. These temporary measures include the issuance of stay-at-home orders, closures of non-essential businesses such as shopping malls, prohibition of layoffs without cause and suspension of workers, among others. These measures have required, among other things, that we shut down our shopping mall properties from March 20 until October 14, 2020, and then again from April 15, 2021 until June 14, 2021, resulting in lower rental revenue from our shopping mall clients whose rent is based in part on sales revenue.

Finally, on September 16, 2021, the City of Buenos Aires Government, announced plans for the gradual lifting of restrictions in the City of Buenos Aires. As of the date of this Annual Report, different activities ranging from social gatherings, commercial activities and gastronomic venues are no longer restricted. For more information in connection with the COVID-19 pandemic and their impact on our Company, see “Item 5.A. Operating Results – The Ongoing COVID-19 Pandemic.” Although these measures may help attenuate the economic impact on the Argentine economy overall, they may have a negative impact on our business and results of operations. We have also been forced to keep the DirecTV Arena stadium closed throughout the entire 2021 fiscal year.

Additionally, we face various risks arising from the economic impact of the pandemic and government measures which are difficult to predict accurately at this time, such as:

| - | Consumer spending has sharply dropped and its persistence may generate a change in consumer habits and a trend in favor of e-commerce, which would translate into lower attendance at shopping malls or public places, thus adversely affecting our tenants’ ability to generate income and default on or terminate our leases;
| - | The situation generated by COVID-19 could cause an increase in our operating costs and the operating costs of our tenants, who may be unable to meet their payment obligations under the leases entered into with the Company. This situation could cause a reduction in our rental income and negatively affect our financial situation;
| - | An extended period of remote work by our employees could deplete our technological resources and result in or exacerbate certain operational risks, including an increased risk of cybersecurity. Remote work environments may be less secure and more susceptible to hacking attacks, including phishing and social engineering attempts to exploit the COVID-19 pandemic; and
| - | COVID-19 poses a threat to the well-being and morale of our employees. While we have implemented a business continuity plan to protect the health of our employees and we have contingency plans for key employees or executive officers who may become ill or unable to perform their duties for an extended period of time, such plans cannot anticipate all scenarios, and we may experience a possible loss of productivity or a delay in the deployment of certain strategic plans.

We are continuously monitoring the impact of the ongoing COVID-19 pandemic on our Company. The ultimate impact of the pandemic on our business, results of operations and financial condition remains highly uncertain and will depend on future developments outside of our control, including the intensity and duration of the pandemic and the government measures taken in order to contain the virus or mitigate the economic impact. To the extent the COVID-19 pandemic adversely affects our business, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section.

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The Argentine government is moving forward with the vaccination plan, and as of the date of this Annual Report, more than 64.3 million doses of the COVID-19 vaccine had been administered. Currently, there are more than 24.4 million people fully vaccinated in Argentina, representing approximately 54% of Argentina's total population. However, the large scale and challenging logistics of distributing the vaccines, as well as uncertainty over the efficacy of the vaccine against new variants of the virus, may contribute to delays in economic recovery.

We depend on macroeconomic and political conditions in Argentina

The Argentine economy has experienced significant volatility in recent decades, characterized by periods of low or negative growth, high levels of inflation and depreciation of the currency. As a consequence, our business and operations have been, and could in the future be, affected to varying degrees by economic and political developments and other material events affecting the Argentine economy, such as: inflation; price controls; foreign exchange controls; fluctuations in foreign currency exchange rates and interest rates; governmental policies regarding spending and investment, national, provincial or municipal tax increases and other initiatives increasing government involvement with economic activity; civil unrest and local security concerns. You should make your own investigation into Argentina’s economy and its prevailing conditions before making an investment in us.

Historically, Argentina went through periods of severe political, economic and social crisis. Among other consequences, these crises resulted in Argentina defaulting on its foreign debt obligations, introducing emergency measures and numerous changes in economic policies that affected utilities, financial institutions, and many other sectors of the economy. Argentina also suffered a significant real depreciation of the Peso, which in turn caused numerous Argentine private sector debtors with foreign currency exposure to default on their outstanding debt. In the past three years, GDP grew 2.7% in 2017, but it contracted 2.5% in 2018, 2.2% in 2019 and 6.5% in 2020. On September 17, 2021, the Argentine Treasury announced that it expected GDP to growth 4% in 2022 and fiscal deficit to reach 3.3%, both figures higher than previously forecast.

The primary elections (Elecciones Primarias, Abiertas y Simultáneas y Obligatorias or “PASO”, per its acronym in Spanish), which define which political parties and which candidates of the different political parties may run in the general elections for senators and representatives, took place in September 12, 2021. In these elections, the Frente de Todos coalition obtained 24.66% of the votes for the City of Buenos Aires, and 33.64% in the Province of Buenos Aires, while the Juntos por el Cambio coalition, obtained 48.19% of the votes in the City of Buenos Aires and 37.99% in the Province of Buenos Aires. After the defeat in the PASO elections, there was renewal in the Cabinet.

We can offer no assurances as to the policies that may be implemented by president Alberto Fernández, or that political developments in Argentina will not adversely affect the Argentine economy and our business, financial condition and results of operations. In addition, we cannot assure you that future economic, regulatory, social and political developments in Argentina will not impair our business, financial condition or results of operations, or cause the market value of our shares to decline.

Continuing high rates of inflation may have an adverse effect on the economy and our business, financial condition and results of operations.

Historically, high rates of inflation have undermined the Argentine economy and the Argentine government’s ability to foster conditions for stable growth. High rates of inflation may also undermine Argentina’s competitiveness in international markets and adversely affect economic activity and employment, as well as our business, financial condition and results of operations.

The INDEC reported cumulative variation of the CPI of 47.6% for 2018, 53.8% for 2019 and 36.1% for 2020. INDEC reported a CPI of 4.0%, 3.6%, 4.8%, 4.1%, 3.3% and 3.2% for January, February, March, April, May and June 2021, respectively.

In recent years, the Argentine government has taken certain measures to curb inflation, such as implementing price controls and limiting wage increases. We cannot assure you that inflation rates will not continue to escalate in the future or that the measures adopted or that may be adopted by the Fernández administration to control inflation will be effective or successful. High rates of inflation remain a challenge for Argentina. Significant increases in the rates of inflation could have a material adverse effect on Argentina’s economy and in turn could increase our costs of operation, in particular labor costs, and may negatively affect our business, financial condition and results of operations.

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A high level of uncertainty with regard to these economic variables, and a general lack of stability in terms of inflation, could have a negative impact on economic activity and adversely affect our financial condition.

As of July 1, 2018, the Argentine Peso qualified as a currency of a hyperinflationary economy and we were required to restate our historical financial statements in terms of the measuring unit current at the end of the reporting year, which could adversely affect our results of operations and financial condition.

Pursuant to IAS 29 “Financial Reporting in Hyperinflationary Economies”, the financial statements of entities whose functional currency is that of a hyperinflationary economy must be restated for the effects of changes in a suitable general price index. IAS 29 does not prescribe when hyperinflation arises, but includes several characteristics of hyperinflation. The IASB does not identify specific hyperinflationary jurisdictions. However, in June 2018, the International Practices Task Force of the Centre for Quality, which monitors “highly inflationary countries”, categorized Argentina as a country with projected three-year cumulative inflation rate greater than 100%. Additionally, some of the other qualitative factors of IAS 29 were present, providing prima facie evidence that the Argentine economy is hyperinflationary for the purposes of IAS 29. Therefore, Argentine companies that prepare financial statements pursuant to IFRS and use the Peso as their functional currency were required to apply IAS 29 to their financial statements for periods ending on and after July 1, 2018.

Adjustments to reflect inflation, including tax indexation, such as those required by IAS 29, are in principle prohibited in Argentina. However, on December 4, 2018, the Argentine government enacted Law No. 27,468, which lifted the ban on indexation of financial statements. Some regulatory authorities, such as the CNV and the IGJ, have required that financial statements for periods ended on and after December 31, 2018 be restated for inflation in accordance with IAS 29.

During the first three fiscal years beginning after January 1, 2018, tax indexation is applicable if the variation in the CPI exceeds 55% in 2019, 30% in 2020 and 15% in 2021. The result of tax indexation was assigned as follows:

| · | Year ended June 30, 2019: one third in that same year and the remaining two thirds in equal parts in the following two years.
| · | Years ended June 30, 2020 and 2021: one sixth that same year and the remaining portions in equal parts in the five following years.

In fiscal year 2022, the tax indexation will be applicable if the variation in the accumulated CPI in the 36 months prior to the end of the fiscal year being settled is higher than 100%. In that case, the result of tax indexation is fully assigned to the fiscal year in which it originated.

We cannot predict the future impact that the eventual application of tax indexation and related inflation adjustments described above will have on our financial statements or their effects on our business, results of operations and financial condition.

High levels of public spending in Argentina could generate long-lasting adverse consequences for the Argentine economy.

During recent years, the Argentine government has substantially increased public spending. Argentina recorded a primary deficit of 2.4%, 0.4% and 6.5% of GDP in 2018, 2019 and 2020, respectively; and as of June 2021, it was 0.5% of GDP. However, the Fernández administration has indicated that it will seek to foster economic growth, which may require additional public spending. If government spending continues to outpace fiscal revenue, the fiscal deficit is likely to increase. Additionally, the economic impact of the COVID-19 pandemic, the nationwide lockdown and due the defeat in PASO elections; may also require the Argentine government to increase public spending.

The Argentine government’s ability to access the long-term financial markets to finance such increased spending is limited given the high levels of public sector indebtedness. The inability to access the capital markets to fund its deficit or the use of other sources of financing may have a negative impact on the economy and, in addition, could limit the access to such capital markets for Argentine companies, which could adversely affect our business, financial condition and results of operations.

Argentina’s ability to obtain financing in the international capital markets is limited, which may impair our ability to access international credit markets to finance our operations in Argentina.

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In 2018, due to Argentina’s limited access to the international capital and lending markets, the Argentine government and the IMF entered into a “stand-by” arrangement for USD 57.1 billion principal amount with a 36-month maturity. As of the date of this Annual Report, Argentina has received disbursements under the agreement totaling USD 44.8 billion. Notwithstanding the foregoing, the Fernández administration has publicly announced that it will refrain from requesting additional disbursements under this agreement, and instead vowed to renegotiate its terms and conditions in good faith.

Shortly after taking office, the Fernández administration also initiated negotiations with creditors in order to restructure the country’s current Peso- and U.S. dollar-denominated public debt. In this context, on February 5, 2020, the Argentine Congress passed Law No. 27,544, pursuant to which the sustainability of the sovereign debt was declared a national priority, authorizing the Ministry of Economy to renegotiate new terms and conditions with Argentina’s creditors within certain parameters.

Additionally, in the midst of debt restructuring negotiations, on April 5, 2020 the Argentine government issued Decree No. 346/2020, through which the repayment of Argentine law-governed dollar-denominated notes was postponed.

On April 21, 2020, the Argentine government launched an exchange offer with the aim of refinancing its external indebtedness in a manner which does not compromise the development and potential growth of Argentina over the next years. On August 17, 2020, the Argentine government submitted its modified bond restructuring offer to the SEC. On August 31, 2020, the Argentine government announced the results of its bond restructuring offer, announcing that holders owning 93.5% in principal amount of bonds outstanding and that this participation percentage was subsequently increased to 99% by virtue of the application of collective action clauses of the restructured bonds. However, the Argentine government faces the challenge of restructuring its debt in foreign currency issued under Argentine law, as well as its debt with the IMF. On September 20, 2021, the Argentine Government allocated 1,885 million dollars to (IMF), to meet the first capital payment for the loan assumed in 2018 by the management of Mauricio Macri.For the rest of the year, Argentina must face commitments with the multilateral organization for almost 400 million dollars in interest in November, and another 1,880 million dollars on December 22, 2021. We cannot predict the outcome of these negotiations.

Moreover, difficulties in accessing Argentina’s international credit may have an impact on our company as the Argentine government postponed the maturity dates of its bonds and cut interest rates.

For more information see “Restrictions on transfers of foreign currency and the repatriation of capital from Argentina may impair our ability to pay dividends and distributions and investors may face restrictions on their ability to collect capital and interest payments in connection with corporate bonds issued by Argentine companies”.

Significant fluctuation in the exchange rate of the Peso against foreign currencies may adversely affect the Argentine economy as well as our financial condition and results of operations.

Fluctuations in the rates of exchange of the Peso against foreign currencies, particularly the U.S. dollar, may adversely affect the Argentine economy, our financial condition and results of operations. In 2018, 2019, 2020 and 2021, the Peso depreciated by approximately 105%, 59%, 40% and 17% (as of the 14 of October 2021) against the U.S. dollar, respectively. Depreciation of the Peso in real terms can have a negative impact on the ability of Argentine businesses to honor their foreign currency-denominated debt, and also lead to very high inflation and significant reduced real wages. The depreciation of the Peso can also negatively impact businesses whose success is dependent on domestic market demand, and adversely affect the Argentine government’s ability to honor its foreign debt obligations. A substantial increase in the exchange rate of the Peso against foreign currencies of the Peso against the U.S. dollar also represents risks for the Argentine economy since it may lead to a deterioration of the country’s current account balance and the balance of payments which may have a negative effect on GDP growth and employment, and reduce the revenue of the Argentine public sector by reducing tax revenue in real terms, due to its current heavy dependence on export taxes.

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As a result of the greater volatility of the Peso, the former administration announced several measures to restore market confidence and stabilize the value of the Argentine Peso. Among them, during 2018, the Argentine government negotiated two agreements with the IMF, increased interest rates and the Argentine Central Bank decided to intervene in the exchange market in order to stabilize the value of the Peso. During 2019, based on a new understanding with the IMF, the Government established new guidelines for stricter control of the monetary base, which would remain in place until December 2019, in an attempt to reduce the amount of Pesos available in the market and reduce the demand for foreign currency. Complementing these measures, in September 2019 foreign currency controls were reinstated in Argentina. As a consequence of the re-imposition of exchange controls, the spread between the official exchange rate and other exchange rates resulting implicitly from certain common capital markets operations (“dólar MEP” or “contado con liquidación”) has broadened significantly, reaching a value of approximately 79% above the official exchange rate. As of October 14, 2021, seller exchange rate quoted by Banco de la Nación Argentina was ARS 99.1600 per USD 1.00.

The success of any measures taken by the Argentine government to restore market confidence and stabilize the value of the Argentine Peso is uncertain and the continued depreciation of the Peso could have a significant adverse effect on our financial condition and results of operations.

Certain measures that may be taken by the Argentine government may adversely affect the Argentine economy and, as a result, our business, financial condition and results of operations.

The Argentine government exercises substantial control over the economy and may increase its level of intervention in certain areas of the economy, including through the regulation of market conditions and prices.

By way of example, in 2008 the Fernández de Kirchner administration nationalized and replaced the former private pension system with a public “pay-as-you-go” pension system. As a result, all resources administered by the private pension funds, including significant equity interests in a wide range of listed companies, were transferred to a separate fund (Fondo de Garantía de Sustentabilidad, or “FGS”) to be administered by the National Social Security Administration (Administración Nacional de la Seguridad Social, or “ANSES”, per its acronym in Spanish). The dissolution of the private pension funds and the transfer of their financial assets to the FGS have had important repercussions on the financing of private sector companies. Debt and equity instruments which previously could be placed with pension fund administrators are now entirely subject to the discretion of the ANSES. Since it acquired equity interests in privately owned companies through the process of replacing the pension system, the ANSES is entitled to designate government representatives to the boards of directors of those entities. Pursuant to Decree No. 1,278/12, issued by the Executive Branch on July 25, 2012, the ANSES’s representatives must report directly to the Ministry of Public Finance are subject to a mandatory information-sharing regime, under which, among other obligations, they must immediately inform the Ministry of Public Finance of the agenda for each meeting of the board of director and provide related documentation.

Also, in April 2012, the Fernández de Kirchner administration decreed the removal of directors and senior officers of YPF S.A. (“YPF”), the country’s largest oil and gas company, that at the time was controlled by the Spanish group Repsol, and submitted a bill to the Argentine Congress to expropriate shares held by Repsol representing 51% of the total outstanding equity of YPF. The Argentine Congress approved the bill in May 2012 through the passage of Law No. 26,741, which declared the production, industrialization, transportation and marketing of hydrocarbons to be activities of public interest and fundamental policies of Argentina, and empowered the Argentine government to adopt any measures necessary to achieve self-sufficiency in hydrocarbon supply. In February 2014, the Argentine government and Repsol announced that they had reached an agreement on the terms of the compensation payable to Repsol for the expropriation of the YPF shares. Such compensation totaled USD 5 billion payable by delivery of Argentine sovereign bonds with various maturities. The agreement, which was ratified by Law No. 26,932, settled the claim filed by Repsol before the International Centre for Settlement of Investment Disputes (“ICSID”).

Additionally, in June 2020, President Alberto Fernández announced a project to intervene and expropriate the cereal exporting company Vicentin S.A.I.C (“Vicentin”) under which the national public administration would take control of 51% of Vicentin, which is in creditor competition as a result of the company’s ARS 350 million debt with state-owned Banco de la Nación Argentina, on a total increase of USD 1.35 billion. However, on June 19, 2020, the holder of the Civil and Commercial Court, responsible for carrying out Vicentin’s call for creditors, decided to restore the company’s original Board of Directors to office for 60 days and to give the observer status to the interventors appointed by the administration of Alberto Fernández.

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As for taxes, the Government regulated the “Ley de Aporte Solidario y Extraordinario” to mitigate the effects of the pandemic (Law No. 27,605) - also known as “aporte de las grandes fortunas o impuesto a las riquezas”. It established a one-time contribution of a rate starting at 2% of the assets of individuals who have declared more than ARS 200 million in assets. The contribution will rise up to 3% in the case of assets of between ARS 800 million and ARS 1,500 million; will be extended up to 3.25% for those between ARS 1,500 million and ARS 3,000 million; and those who exceed that value will be taxed at 3.5%. The number of taxpayers covered by the regulations is estimated at 12,000.

Decree 42/2021 also empowered the Federal Administration of Public Revenue (AFIP) to be in charge of “implementing the information regimes for the purpose of collecting data” and thus prevent tax evasion operations. In this sense, when the law was sanctioned and promulgated, some businessmen with large assets threatened to start a fiscal rebellion.

Historically, actions of the Argentine government concerning the economy, including decisions regarding interest rates, taxes, price controls, wage increases, increased benefits for workers, exchange controls and potential changes in the market of foreign currency, have had a substantial adverse effect on Argentina’s economic growth.

It is widely reported by private economists that expropriations, price controls, exchange controls and other direct involvement by the Argentine government in the economy have had an adverse impact on the level of investment in Argentina, the access of Argentine companies to international capital markets and Argentina’s commercial and diplomatic relations with other countries. If the level of government intervention in the economy continues or increases, the Argentine economy and, in turn, our business, results of operations and financial condition could be adversely affected.

The Argentine government may mandate salary increases for private sector employees, which would increase our operating costs.

In the past, the Argentine government has passed laws, regulations and decrees requiring companies in the private sector to maintain minimum wage levels and provide specific benefits to employees. Argentine employers, both in the public and private sectors, have experienced significant pressure from their employees and labor organizations to increase wages and to provide additional employee benefits. Due to high levels of inflation, employees and labor organizations regularly demand significant wage increases.

Through Decree No.11/2021, a staggered increase of the minimum salary was approved as follows: (i)September 1, 2021, ARS 31,104.00 for all full-time monthly workers and ARS 155.52 per hour for day laborers; (ii) October 1, 2021, ARS 32,000.00 for all full-time monthly workers and ARS 160.00 per hour for day laborers; and (iii) February 1, 2022, ARS 33,000.00 for all full-time monthly workers and ARS 165.00 per hour for day laborers. In addition, the Argentine government has arranged various measures to mitigate the impact of inflation and exchange rate fluctuation in wages. In December 2019, Decree No. 34/2019 doubled legally-mandated severance pay for termination of employment. The Government went a step further amid the COVID-19 pandemic, and issued Decree No. 329/2020, restricting the ability to terminate employment with or without cause for 60 business days, prorogued it for 60 additional business days by Decree No.624/2020 and finally through Decree 266/21 it was extended until May 31, 2021. Also, in January 2020, the Argentine government issued Decree No. 14/2020 which established a general increase for all employees of ARS 3,000 in January 2020, and an additional amount of ARS 1,000 in February 2020 (total ARS 4,000 effective as of February 2020).

It is possible that the Argentine government could adopt measures mandating further salary increases or the provision of additional employee benefits in the future. Any such measures could have a material and adverse effect on our business, results of operations and financial condition.

Property values in U.S. dollars in Argentina could decline significantly.

Property values in U.S. dollars are influenced by multiple factors that are beyond our control, such as a decreased demand for real estate properties due to a deterioration of macroeconomic conditions or an increase in supply of real estate properties that could adversely affect the value in U.S. dollars of real estate properties. We cannot assure you that property values in U.S. dollars will increase or that they will not be reduced. Most of the properties we own are located in Argentina. As a result, a reduction in the value in U.S. dollars of properties in Argentina could materially affect our business and our financial statements due to the valuation of our investment properties at fair market value in U.S. dollars.

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Restrictions on transfers of foreign currency and the repatriation of capital from Argentina may impair our ability to pay dividends and distributions and investors may face restrictions on their ability to collect capital and interest payments in connection with corporate bonds issued by Argentine companies.

On September 1, 2019, the Central Bank issued Communication “A” 6,770, which established various rules for exports of goods and services, imports of goods and services, foreign assets, non-resident operations, financial debt, debts between residents, profits and dividends, and information systems. The Communication was issued in response to the publication of Decree 609/2019, pursuant to which the Argentine government implemented foreign exchange regulations until December 31, 2019. Decree 609/2019 sets forth the obligation to convert the value of goods and services exported into Pesos in the local financial system, in accordance with terms and conditions established by the Central Bank.

On October 5, 2021, by means of General Resolution 907/21, a limit on the sale of securities which are denominated in U.S. dollars and issued under local law was established at the end of each week for those transactions that had a concurrence of tenders received with a priority of price and time. This limit may not exceed the amount of fifty thousand nominal values settled. Plus, it was also established as prior condition for those transactions that the orders may only be given if no sales have been made with foreign settlement in the previous thirty days, and a commit not to do so within thirty subsequent calendar days.

Additionally, on December 5, 2019 the Central Bank issued Communication “A” 6,844, setting forth the consolidated set of rules governing foreign trade and exchange (“Exterior y Cambios” in Spanish).

Among other restrictions, Communication “A” 6,844 requires prior authorization from the Central Bank for the pre-cancelation of debts corresponding to imports of goods and services. For overdue or on-demand debts for the import of goods with related parties abroad outstanding as of August 31, 2019, the importer must request authorization from the Central Bank if the debts exceed USD 2 million per month. Central Bank authorization is also required for payments of services with related parties abroad. Prior authorization from the Central Bank is required for the “constitution of foreign assets” (e.g., purchase of foreign currency, among others) by legal entities, local governments, mutual funds, trusts and other vehicles. Additionally, individuals must request authorization from the Central Bank for the “formation of foreign assets,” family aid and the granting of guarantees in derivative transactions, when those items exceed USD 200 in the calendar month, among other circumstances.

With respect to financial debt, borrowers must enter and settle in the foreign exchange market new financial debts from abroad that are disbursed from September 1, 2019. Compliance with this requirement must be proved to access the foreign exchange market and cancel the principal and interest. Communication “A” 6,844 also requires companies to obtain prior authorization from the Central Bank before transferring profits and dividends abroad, as a general rule.

Likewise, Communication “A” 6,854, issued on December 27, 2019 established that rules incorporated into the consolidated text of the regulations on foreign trade and exchange other than those applicable for export of goods and services, as set forth in Communication “A” 6,844, shall remain in full force and effect as from December 31, 2019.

On June 2020, the Central Bank issued Communication “A” 7,030, through which it established that for the purpose of accessing the exchange market for the realization of certain transactions such as (i) payment of imports and other purchases of goods abroad, (ii) purchase of foreign currency by residents with specific application, (iii) payment of profits and dividends, (iv) payment of capital and interest on financial indebtedness, among others, the entity shall have the prior consent of the Central Bank unless it has an affidavit from the client stating that at the time of access to the exchange market: (i) all of its foreign currency holdings in the country are deposited in accounts in financial institutions and that it does not have liquid external assets available; and (ii) undertakes to liquidate on the exchange market, within five working days of its making available, those funds that it receives abroad arising from the collection of loans granted to third parties, the collection of a term deposit or the sale of any type of asset, where those funds have been acquired after May 28 2020.

On the other hand, the Communication provides that until June 30, 2020 (a period subsequently extended until July 31, 2020 by Communication “A” 7,052), - when accessing the market for the payment of imports of goods or for the cancellation of debts arising from the import of goods, the Central Bank must pre-approve the transaction unless the entity has: (i) a customer’s affidavit stating that the total amount of payments associated with its imports of goods during 2020 does not exceed the amount by which the importer would have access to the exchange market that was officialized between January 1, 2020 and the day leading up to accessing the exchange market; and (ii) documentation that allows the company to verify compliance with the remaining requirements established for the operation by the exchange regulations.

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At the same time, the Communication provides that until June 30, 2020 (a period subsequently extended until July 31, 2020 by Communication “A” 7,052), prior approval of the Central Bank will be required for access to the foreign market for the cancellation of financial indebtedness principal services with the foreign sector where the creditor is a counterparty linked to the debtor.

On March 18, 2021, the Central Bank issued Communication “A” 7,239 extending the restrictions on access to the foreign exchange market for payments of imports of goods or the cancellation of principal of debts arising from the imports of goods and the cancellation of capital services of financial indebtedness with related counterparties provided for in Communication “A” 7,030 and complementary.

As for transactions corresponding to foreign market outflows, the Communication amends from 30 to 90 days the period within which (i) no sales of securities with liquidation in foreign currency or transfers thereof to foreign entities shall have been concluded in the country, and (ii) sales of securities with liquidation in foreign currency or transfers thereof to entities abroad shall not be arranged in the country, in this case, counted from the moment the foreign market was accessed.

On September 15, 2020, Communication “A” 7,106, amended by Communication “A” 7,272, established that companies must refinance maturities of financial debt principal in the period from October 15, 2020 to December 31, 2021. In this sense, the Central Bank will give access to companies for up to 40% of maturities and companies must refinance the rest within at least two years or should be cancelled using currency already in possession of the Company. Furthermore, Resolution No. 856/2020 of the CNV established a 15-day “parking” requirement for both transfers of securities from local accounts abroad. On January 11, 2021, by means of Resolution No. 878/21, the CNV reduced the minimum holding period to one business day, both for transactions involving securities with liquidation on foreign currency in the local market and also for liquidation of securities transactions from foreign to local depositaries.

As a result of all the exchange restrictions mentioned and all those that may be issued in the future by the Central Bank in the context of the exercise of its powers, it is clarified that there may be potential “holdouts” in the context of the restructurings that Argentine companies are obliged to carry out with the consequent possible claims. The Central Bank measure, would, in many cases, result in non-compliance or a default on corporate debt denominated in U.S. dollars. It will be a challenge for issuers of corporate debt denominated in U.S. dollars to fully quantify the implications of Communication “A” 7,106 and its amendements. In order to fulfill the requirements of this regulation, a refinancing plan for financial debt due for registration until December 31, 2020 must be submitted to the Argentine Central Bank before September 30, 2020. For maturities to be registered between January 1, 2021 and March 31, 2021, the plan must be submitted at least 30 calendar days prior to the maturity of the principal to be refinanced. Which implies in a risk to obtain financing for new productive projects. As a consequence, there could be an increase in the spreads of corporate bonds. In addition, since June 2020, through Communication “A” 7,030, companies could no longer access to the MULC to cancel financial debt between companies in advance. It is also noted that such possible proposals for restructurings will fully comply with the requirements established by the applicable and current regulations, as long as the non-compliance brings the application of the foreign exchange criminal law to the members of our Board of Directors.

Furthermore, on February 22, 2021, the Central Bank decided to extend the refinancing plans (point 7 of Communication “A” 7,106, which expired on March 31, 2021). Thus, it established that the provisions of point 7 mentioned will be applicable to those who register capital maturities scheduled between April 1 of 2021 and December 31, 2021 for the debts detailed therein (extended by means of Communication “A” 7,272 modifying both Communications “A” 7,106 and 7,230). The refinancing plan must be submitted to the Central Bank by March 15, 2021 for capital maturities scheduled between April 1, 2021 and April 15, 2021. In the remaining cases, it must be submitted at least 30 calendar days before the maturity of the capital to be refinanced, which implies a risk to obtain financing for new productive projects. As a result, there could be an increase in corporate bond spreads. Specifically, the obligation to renegotiate is maintained, although the minimum from which the monthly maturities must be rescheduled is raised from USD 1 million to USD 2 million and frees from this requirement companies that throughout 2020 have restructured their debts under the same indication of the Central Bank and that this year face maturities of these reschedulings. Plus, the debts originated in the year 2020 that have been paid and settled are not reached either.

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Finally, on August 13, 2021, through Communication “A” 7,340, the Central Bank incorporated as point 4.3.3. of the rules on “Foreign and exchange”, that transactions for the purchase and sale of securities carried out with settlement in foreign currency must be paid for by one of the following mechanisms: (a) by transfer of funds to and from sight accounts in the name of the client in local financial institutions; and (b) against wire on bank accounts in the name of the customer with a foreign entity that is not incorporated in countries or territories where the Recommendations of the Financial Action Task Force (“FATF”) are not applied, or are not sufficiently applied. In no case, the settlement of these operations is allowed by payment in foreign currency notes, or by depositing them in custody accounts or in third-party accounts.

As of the date of this Annual Report, the restrictions outlined above remain in place. Such measures may negatively affect Argentina’s international competitiveness, discouraging foreign investments and lending by foreign investors or increasing foreign capital outflow which could have an adverse effect on economic activity in Argentina, and which in turn could adversely affect our business and results of operations. Any restrictions on transferring funds abroad imposed by the government could undermine our ability to pay dividends on our GDSs in U.S. dollars. Furthermore, these measures may cause delays or impose restrictions on the ability to collect payments of capital and interest on bonds issued by us. The challenge will be to achieve acceptance by creditors, in accordance with the Central Bank regulations mentioned above, especially when it has highly diversified and retail creditors.

The company has several dollar-denominated maturities affected by these measures. For more information see “Operating and Financial Review and Prospects—Liquidity and capital resources—Indebtedness”.

The Argentine economy could be adversely affected by economic developments in other global markets.

Argentina’s economy is vulnerable to external shocks that could be caused by adverse developments affecting its principal trading partners. A significant decline in the economic growth of any of Argentina’s major trading partners (including Brazil, the European Union, China and the United States), including as a result of the ongoing COVID-19 pandemic, could have a material adverse impact on Argentina’s balance of trade and adversely affect Argentina’s economic growth. In addition, Argentina may be affected by economic and market conditions in other markets worldwide.

On October 2018, Jair Bolsonaro was elected president of Brazil, Argentina’s largest export market and the principal source of imports. Mr. Bolsonaro has libertarian, conservative and nationalist tendencies and assumed office on January 1, 2019. Given that Brazil is the largest economy in Latin America, the economic measures it implements can have great impact in the region. A further deterioration in economic conditions in Brazil may reduce the demand for Argentine exports to the neighboring country and, if this occurs, it could have a negative effect on the Argentine economy and potentially on our operations.

In addition, financial and securities markets in Argentina have been influenced by economic and market conditions in other markets worldwide. Although economic conditions vary from country to country, investors’ perceptions of events occurring in other countries have in the past substantially affected, and may continue to substantially affect, capital flows into, and investments in securities from issuers in, other countries, including Argentina. International investors’ reactions to events occurring in one market sometimes demonstrate a “contagion” effect in which an entire region or class of investment is disfavored by international investors.

On November 3, 2020, presidential elections took place in the United States. Former Vice President Joseph R. Biden Jr. was the Democratic nominee to challenge President Trump. Finally, on November 7, 2020, Democrat Joe Biden was declared president. Mr. Biden became the 46th president on January 20, 2021. We cannot predict how any measures adopted by the Biden administration may affect Argentina, nor the effect that the any other measure taken by the Biden administration could cause on global economic conditions and the stability of global financial markets.

In July 2019, the Common Market of the South (“MERCOSUR”) signed a strategic partnership agreement with the European Union (the “EU”), which was expected to enter into force in 2021, once approved by the relevant legislatures of each member country. The objective of this agreement is to promote investments, regional integration, increase the competitiveness of the economy and achieve an increase in GDP. However, the effect that this agreement could have on the Argentine economy and the policies implemented by the Argentine government is uncertain. In October 2020, The European Parliament passed a non-binding resolution opposing the ratification of the trade agreement between the European Union and Mercosur due to concerns over the environmental policy of the Jair Bolsonaro government.

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Changes in social, political, regulatory and economic conditions in other countries or regions, or in the laws and policies governing foreign trade, could create uncertainty in the international markets and could have a negative impact on emerging market economies, including the Argentine economy. Also, if these countries fall into a recession, the Argentine economy would be impacted by a decline in its exports, particularly of its main agricultural commodities. All of these factors could have a negative impact on Argentina’s economy and, in turn, our business, financial condition and results of operations.

High commodity prices contributed to the increase in Argentine exports and to high government tax revenue from export withholdings. Consequently, the Argentine economy has remained relatively dependent on the price of its main agricultural products, primarily soy. This dependence has rendered the Argentine economy more vulnerable to commodity prices fluctuations.

A continuous decline in international prices of Argentina’s main commodity exports could have a negative impact on the levels of government revenue and the government’s ability to service its sovereign debt, and could either generate recessionary or inflationary pressures, depending on the government’s reaction. Either of these results would adversely impact Argentina’s economy and, therefore, our business, results of operations and financial condition.

The absence of a solid institutional framework and corruption have been pointed out as an important problem for Argentina and continue to be. Recognizing that the failure to address these issues could increase the risk of political instability, distort decision-making processes and adversely affect Argentina’s international reputation and ability to attract foreign investment, the former Macri administration adopted several measures aimed at strengthening Argentina’s institutions and curbing corruption. These measures include the reduction of criminal sentences in exchange for cooperation with the government in corruption investigations, increased access to public information, the seizing of assets from corrupt officials, increasing the powers of the Anticorruption Office (Oficina Anticorrupción) and the passing of a new public ethics law, among others. The Fernández administration’s ability and determination to implement these initiatives taken by the former administration is uncertain, as it would require, among other things, the involvement of the judicial branch, which is independent, as well as legislative support.

We cannot guarantee that the implementation of these measures will be successful or if implemented that such measures will have the intended outcomes.

Our internal policies and procedures might not be sufficient to guarantee compliance with anti-corruption and anti-bribery laws and regulations.

Our operations are subject to various anti-corruption and anti-bribery laws and regulations, including the Corporate Criminal Liability Law and the U.S. Foreign Corrupt Practices Act of 1977 (the “FCPA”). Both the Corporate Criminal Liability Law and the FCPA impose liability against companies who engage in bribery of government officials, either directly or through intermediaries. The anti-corruption laws generally prohibit providing anything of value to government officials for the purposes of obtaining or retaining business or securing any improper business advantage. As part of our business, we may deal with entities in which the employees are considered government officials. We have a compliance program that is designed to manage the risks of doing business in light of these new and existing legal and regulatory requirements.

Although we have internal policies and procedures designed to ensure compliance with applicable anti-corruption and anti-bribery laws and regulations, there can be no assurance that such policies and procedures will be sufficient. Violations of anti-corruption laws and sanctions regulations could lead to financial penalties being imposed on us, limits being placed on our activities, our authorizations and licenses being revoked, damage to our reputation and other consequences that could have a material adverse effect on our business, results of operations and financial condition. Further, litigations or investigations relating to alleged or suspected violations of anti-corruption laws and sanctions regulations could be costly.

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Risks Relating to our Business

Disease outbreaks or other public health concerns could reduce traffic in our shopping malls.

As a result of the outbreak of Swine Flu during the winter of 2009, consumers and tourists dramatically changed their spending and travel habits to avoid contact with crowds. Recently, as a result of the COVID-19 pandemic, the Argentine government enacted several regulations limiting the operation of schools, cinemas and shopping malls, which has significantly reduced traffic at our shopping malls. See “Risks Relating to Argentina – The ongoing COVID-19 pandemic and government measures to contain the virus are adversely affecting our business and results of operations, and, as conditions are evolving rapidly, we cannot accurately predict the ultimate impact on our results of operation.” We cannot assure you that new disease outbreaks or health hazards (such as the Ebola outbreak in recent years) will not occur in the future, or that such an outbreak or health hazard would not significantly affect consumer and/or tourists’ activity. The recurrence of such a scenario could adversely affect our business and our results of operations.

We are subject to risks inherent to the operation of shopping malls that may affect our profitability.

Our shopping malls are subject to various factors that affect their development, administration and profitability, including:

| - | declines in lease prices or increases in levels of default by our tenants due to economic conditions;
| - | increases in interest rates and other factors outside our control;
| - | the accessibility and attractiveness of the areas where our shopping malls are located;
| - | the intrinsic attractiveness of the shopping mall;
| - | the flow of people and the level of sales of rental units in our shopping malls;
| - | the increasing competition from internet sales;
| - | the amount of rent collected from tenants at our shopping malls;
| - | changes in consumer demand and availability of consumer credit, both of which are highly sensitive to general macroeconomic conditions; and
| - | fluctuations in occupancy levels in our shopping malls.

An increase in our operating costs could also have a material adverse effect on us if our tenants were to become unable to pay higher rent we may be required to impose as a result of increased expenses. Moreover, the shopping mall business is closely related to consumer spending and affected by prevailing economic conditions. All of our shopping malls and commercial properties are located in Argentina, and consequently, these operations may be adversely affected by recession or economic uncertainty in Argentina. Persistently poor economic conditions could result in a decline in consumer spending which could have a material adverse effect on shopping mall revenue.

We could be adversely affected by decreases in the value of our investments.

Our investments are exposed to the risks generally inherent to the real estate industry, many of which are out of our control. Any of these risks could adversely and materially affect our business, financial condition and results of operations. Any returns on capital expenditures associated with real estate are dependent upon sales volumes and/or revenue from leases and the expenses incurred. In addition, there are other factors that may adversely affect the performance and value of a property, including local economic conditions prevailing in the area where the property is located, macroeconomic conditions in Argentina and globally, competition, our ability to find lessees and their ability to perform on their leases, changes in legislation and in governmental regulations (such as the use of properties, urban planning and real estate taxes) as well as exchange controls (given that the real estate market in Argentina relies on the U.S. dollar to determine valuations), variations in interest rates (including the risk of an increase in interest rates that reduces sales of lots for residential development) and the availability of third party financing. In addition, and given the relative illiquidity of the Argentine real estate market, we could be unable to effectively respond to adverse market conditions and/or be compelled to undersell one or more properties. Some significant expenses, such as debt service, real estate taxes and operating and maintenance costs do not fall when there are circumstances that reduce the revenue from an investment, increasing our relative expenditures. These factors and events could impair our ability to respond to adverse changes in the returns on our investments, which in turn could have an adverse effect on our financial position and the results of our operations.

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Our level of debt may adversely affect our operations and our ability to pay our debt as it becomes due.

As of June 30, 2021, IRSA’s consolidated financial debt amounted to ARS 62,133 million. We cannot assure you that we will have sufficient cash flows and adequate financial capacity to finance our business in the future. Although we are generating sufficient funds from our operating cash flows to meet our debt service obligations and our ability to obtain new financing is adequate, considering the current availability of loan financing in Argentina, we cannot assure you that we will have sufficient cash flows and adequate financial structure in the future. On September 15, 2020, Communication “A” 7,106, amended by Communication “A” 7,272, established that companies must refinance maturities of financial debt capital in the period from October 15, 2020 to December 31, 2021. In this sense, the Argentine Central Bank will give access to companies for up to 40% of maturities and companies must refinance the rest within at least two years. For more information see “Item 10. Additional Information—D. Exchange Controls.”

Our leverage may affect our ability to refinance existing debt or borrow additional funds to finance working capital requirements, acquisitions and capital expenditures. In addition, the recent disruptions in the local capital and the macroeconomic conditions of Argentine markets, may adversely impact our ability to refinance existing debt and the availability and cost of credit in the future. In such conditions, access to equity and debt financing options may be restricted and it may be uncertain how long these economic circumstances may last. This would require us to allocate a substantial portion of cash flow to repay principal and interest, thereby reducing the amount of money available to invest in operations, including acquisitions and capital expenditures. Our leverage could also affect our competitiveness and limit our ability to changes in market conditions, changes in the real estate industry and economic downturns.

The success of our businesses and the feasibility of our transactions depend on the continuity of investments in the real estate markets and our ability to access capital and debt financing. In the long term, lack of confidence in real estate investment and lack of access to credit for acquisitions could restrict growth. As part of our business strategy, we will strive to increase our real estate portfolio through strategic acquisitions of properties at favorable prices and properties with added value which we believe meet the requirements to increase the value of our properties.

We may not be able to generate sufficient cash flows from operations to satisfy our debt service requirements or to obtain future financing. If we cannot satisfy our debt service requirements or if we default on any financial or other covenants in our debt arrangements, the lenders and/or holders of our securities will be able to accelerate the maturity of such debt or default under other debt arrangements. Our ability to service debt obligations or to refinance them will depend upon our future financial and operating performance, which will, in part, be subject to factors beyond our control such as macroeconomic conditions and regulatory changes in Argentina. If we cannot obtain future financing, we may have to delay or abandon some or all of our planned capital expenditures, which could adversely affect our ability to generate cash flows and repay our obligations as they become due.

For more information see “Operating and Financial Review and Prospects—Liquidity and capital resources—Indebtedness”.

Our assets are highly concentrated in certain geographic areas and an economic downturn in such areas could have a material adverse effect on our results of operations and financial condition.

As of June 30, 2021, most of our revenue from leases and services provided by the Shopping Malls segment derived from properties located in the City of Buenos Aires and the Greater Buenos Aires metropolitan area. In addition, all of our office buildings are located in Buenos Aires and a substantial portion of our revenue is derived from such properties. Although we own properties and may acquire or develop additional properties outside Buenos Aires and the Greater Buenos Aires metro area, we expect to continue to be largely affected by economic conditions or by pandemic effects which could affect these high populated areas. Consequently, an economic downturn in those areas could cause a reduction in our rental income and adversely affect our ability to comply with our debt service and fund operations.

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Our performance is subject to the risks associated with our properties and with the real estate industry.

Our operating performance and the value of our real estate assets, and as a result, the value of our securities, are subject to the risk that our properties may not be able to generate sufficient revenue to meet our operating expenses, including debt service and capital expenditures, our cash flow needs and our ability to service our debt service obligations. Events or conditions beyond our control that may adversely affect our operations or the value of our properties include:

| · | downturns in national, regional and local economies;
| · | decrease in consumer spending and consumption;
| · | competition from other shopping malls and sales outlets;
| · | local real estate market conditions, such as oversupply or lower demand for retail space;
| · | changes in interest rates and availability of financing;
| · | the exercise by our tenants of their right to early termination of their leases;
| · | vacancies, changes in market rental rates and the need to periodically repair, renovate and re-lease space;
| · | increased operating costs, including insurance expenses, salary increases, utilities, real estate taxes, federal and local taxes and higher security costs;
| · | the impact of losses resulting from civil disturbances, strikes, natural disasters, terrorist acts or acts of war;
| · | significant fixed expenditures associated with each investment property, such as debt service payments, real estate taxes, insurance and maintenance costs;
| · | declines in the financial condition of our tenants and our ability to collect rents when due;
| · | changes in our or our tenants’ ability to provide for adequate maintenance and insurance that result in a reduction in the useful life of a property; and
| · | changes in law or governmental regulations (such as those governing usage, zoning and real property taxes) or changes in the exchange controls or government action (such as expropriation).

If any one or more of the foregoing conditions were to affect our activities, this could have a material adverse effect on our financial condition and results of operations, and as a result, on the Company’s results.

An adverse economic environment for real estate companies and the credit crisis may adversely affect our results of operations.

The success of our business and profitability of our operations depends on continued investment in real estate and access to long-term financing. A prolonged crisis of confidence in real estate investments and lack of credit for acquisitions may constrain our growth and the maintenance of our current business and operations. As part of our strategy, we intend to increase our properties portfolio through strategic acquisitions at favorable prices, where we believe we can bring the necessary expertise to enhance property values. In order to pursue acquisitions, we may require capital or debt financing. Recent disruptions in the financial markets may adversely impact our ability to refinance existing debt and the availability and cost of credit in the future. Any consideration of sales of existing properties or portfolio interests may be offset by lower property values. Our ability to make scheduled payments or to refinance our existing debt obligations depends on our operating and financial performance, which in turn is subject to prevailing economic conditions. If disruptions in financial markets prevail or arise in the future, we cannot provide assurances that government responses to such disruptions will restore investor confidence, stabilize the markets or increase liquidity and the availability of credit.

As of September 2021; Evergrande, one of the biggest chinese real estate company, announced that it would not be able to pay its debt obligations. Since then, markets have been affected negatively by the announcement. As of the date of this annual report, chinese government is assisting the company in order to neutralize a high impact in the global economy.

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Our revenue and profit may be materially and adversely affected by continuing inflation and economic activity in Argentina.

Our business is mainly driven by consumer spending since a portion of the revenue from our Shopping Mall segment derives directly from the sales of our tenants, whose revenue relies on the sales to consumers. As a result, our revenue and net income are impacted to a significant extent by economic conditions in Argentina, including the development in the textile industry and domestic consumption, which has experienced significant decline during 2019, 2020 and 2021. Consumer spending is influenced by many factors beyond our control, including consumer perception of current and future economic conditions, inflation, political uncertainty, rates of employment, interest rates, taxation and currency exchange rates. Any continuing economic slowdown, whether actual or perceived, could significantly reduce domestic consumer spending in Argentina and therefore adversely affect our business, financial condition and results of operations.

The loss of tenants could adversely affect our operating revenue and value of our properties.

Although no single tenant represents more than 6.2% of our revenue in any fiscal year, if a significant number of tenants at our retail or office properties were to experience financial difficulties, including bankruptcy, insolvency or a general downturn of business, or if we failed to retain them, our business could be adversely affected. Further, our shopping malls typically have a significant “anchor” tenant, such as well-known department stores, that generate consumer traffic at each mall. A decision by such tenants to cease operating at any of our shopping mall properties could have a material adverse effect on our financial condition and the results of our operations. In addition, the closing of one or more stores that attract consumer traffic may motivate other tenants to terminate or to not renew their leases, to seek rent concessions and/or close their stores. Moreover, tenants at one or more properties might terminate their leases as a result of mergers, acquisitions, consolidations, dispositions or bankruptcies. The bankruptcy and/or closure of multiple stores, if we are not able to successfully release the affected space, could have a material adverse effect on both the operating revenue and underlying value of the properties involved. See “Item 5.A. Operating Results – The Ongoing COVID-19 Pandemic.”

We may face risks associated with acquisitions of properties.

As part of our growth strategy, we have acquired, and intend to do so in the future, properties, including large properties (such as Edificio República, Abasto de Buenos Aires and Alto Palermo Shopping), that tend to increase the size of our operations and potentially alter our capital structure. Although we believe that the acquisitions we have completed in the past and that we expect to undertake enhance our financial performance, the success of such transactions is subject to a number of uncertainties, including the risk that:

| · | we may not be able to obtain financing for acquisitions on favorable terms;
| · | acquired properties may fail to perform as expected;
| · | the actual costs of repositioning or redeveloping acquired properties may be higher than our estimates;
| · | acquired properties may be located in new markets where we may have limited knowledge and understanding of the local economy, absence of business relationships in the area or are unfamiliar with local governmental and permitting procedures; and
| · | we may not be able to efficiently integrate acquired properties, particularly portfolios of properties, into our organization and to manage new properties in a way that allows us to realize cost savings and synergies.

Our future acquisitions may not be profitable.

We seek to acquire additional shopping malls to the extent we manage to acquire them on favorable terms and conditions and they meet our investment criteria. Acquisitions of commercial properties entail general investment risks associated with any real estate investment, including:

| · | our estimates of the cost of improvements needed to bring the property up to established standards for the market may prove to be inaccurate;

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| · | properties we acquire may fail to achieve, within the time frames we project, the occupancy or rental rates we expect to achieve at the time we make the decision to acquire, which may result in the properties’ failure to achieve the returns we projected;
| · | our pre-acquisition evaluation and the physical condition of each new investment may not detect certain defects or identify necessary repairs, which could significantly increase our total acquisition costs; and
| · | our investigation of a property or building prior to its acquisition, and any representations we may receive from the seller of such building or property, may fail to reveal various liabilities, which could reduce the cash flow from the property or increase our acquisition cost.

If we acquire a business, we will be required to merge and integrate the operations, personnel, accounting and information systems of such acquired business. In addition, acquisitions of or investments in companies may cause disruptions in our operations and divert management’s attention away from day-to-day operations, which could impair our relationships with our current tenants and employees.

The properties we acquire may be subject to unknown liabilities.

The properties that we acquire may be subject to unknown liabilities, in respect to which we may have limited or no recourse to the former owners. If a liability were asserted against us based on our ownership of an acquired property, we may be required to incur significant expenditures to settle, which could adversely affect our financial results and cash flow. Unknown liabilities relating to acquired properties could include:

| · | liabilities for clean-up of undisclosed environmental contamination;
| · | the costs of changes in laws or in governmental regulations (such as those governing usage, zoning and real property taxes); and
| · | liabilities incurred in the ordinary course of business.

Our dependence on rental income may adversely affect our ability to meet our debt obligations.

A substantial part of our revenue is derived from rental income. As a result, our performance depends on our ability to collect rent from our tenants. Our revenue and profits would be negatively affected if a significant number of our tenants or any significant tenant were to:

| · | delay lease commencements;
| · | decline to extend or renew leases upon expiration;
| · | fail to make rental payments when due; or
| · | close stores or declare bankruptcy.

Any of these actions could result in the termination of leases and the loss of related rental income. In addition, we cannot assure you that any tenant whose lease expires will renew that lease or that we will be able to re-let the space on economically reasonable terms. The loss of rental revenue from a number of our tenants and our inability to replace such tenants may adversely affect our profitability and our ability to comply with our debt service obligations. These factors are particularly disruptive in the context of emergency situations such as the COVID-19 pandemic which has caused significant adverse impacts on our business as tenants have been required to shut down or significantly reduce their operating activities.

It may be difficult to buy and sell real estate quickly and transfer restrictions may apply to part of our portfolio of properties.

Real estate investments are relatively illiquid and this tends to limit our ability to change the mix of our portfolio in response to economic circumstances or other conditions. In addition, significant expenditures associated with each investment, such as mortgage payments, real estate taxes and maintenance costs, are generally not reduced when an investment generates lower revenue. If revenue from a property declines while expenses remain the same, our results of operations would be adversely affected. Certain properties are mortgaged and if we were unable to meet our underlying payment obligations, we could suffer losses as a result of foreclosures on those mortgaged properties. Furthermore, if we are required to dispose of one or more of our mortgaged properties, we would not be able to obtain release of the mortgage interest without payment of the associated debt. The foreclosure of a mortgage on a property or inability to sell a property could adversely affect our business. In this kind of transactions, we may agree not to sell the acquired properties for a considerable time which could affect our results of operations.

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Some of the land we have purchased is not zoned for development and we may be unable to obtain, or may face delays in obtaining, the necessary zoning permits and other authorizations.

We own several plots of land which are not zoned for our intended development plans. In addition, we have not yet applied for the required land-use, building, occupancy and other required governmental permits and authorizations for these properties. We cannot assure you that we will continue to be successful in our attempts to rezone land and to obtain all necessary permits and authorizations, or that rezoning efforts and permit requests will not be delayed or rejected. Moreover, we may be affected by building moratorium and anti-growth legislation. If we are unable to obtain the governmental permits and authorizations we need to develop our present and future projects as planned, we may be forced to make unwanted modifications to such projects or abandon them altogether.

We may face risks associated with land-takings in Argentina.

Land-taking is a long-standing problem in Argentina that has escalated throughout the years with every economic crisis, especially now in the context of the COVID-19 economic crisis.

The spread of land takes has revived in Argentina an old debate in Argentina. There is a conflict between two groups that claim, on the one hand, a right to decent housing, and on the other hand a group that claims that the right to private property should be respected Argentina’s constant and cyclical economic crises over the past 50 years have also caused poverty to rise sharply, so less people can access a roof, resulting in a housing deficit

As a consequence, we cannot provide assurance that government responses to such disruptions will restore investor confidence in Argentine lands, which could have an adverse impact on our financial condition and results of operations.

Our ability to grow will be limited if we cannot obtain additional financing.

Although we are liquid as of the date of this Annual Report, we must maintain liquidity to fund our working capital, service our outstanding indebtedness and finance investment opportunities. Without sufficient liquidity, we could be forced to curtail our operations or we may not be able to pursue new business opportunities. Our growth strategy is focused on the development and redevelopment of properties we already own and the acquisition of additional properties for development. As a result, we are likely to have to depend to an important degree on the availability of capital financing, which may or may not be available on favorable terms if at all. We cannot assure you that additional financing, refinancing or other capital will be available in the amounts we require or on favorable terms. Our access to debt or equity capital markets depends on a number of factors, including the market’s perception of our growth potential, our ability to pay dividends, our financial condition, our credit rating and our current and potential future earnings. Depending on these factors, we could experience delays or difficulties in implementing our growth strategy on satisfactory terms or at all.

The capital and credit markets for Argentine have been experiencing extreme volatility and disruption since the last years. If our current resources do not satisfy our liquidity requirements, we may have to seek additional financing. The availability of financing will depend on a variety of factors, such as economic and market conditions, the availability of credit and our credit ratings, as well as the possibility that lenders could develop a negative perception of the prospects of risk in Argentina, of our company or the industry generally. We may not be able to successfully obtain any necessary additional financing on favorable terms, or at all.

Adverse incidents that occur in our shopping malls may result in damage to our reputation and a decrease in the number of customers.

Given that our shopping malls are open to the public, with ample circulation of people, accidents, theft, robbery, public protest, pandemic effects and other incidents may occur in our facilities, regardless of the preventative measures we adopt. If such an incident or series of incidents occurs, shopping mall customers and visitors may choose to visit other shopping venues that they believe are safer, which may cause a reduction in the sales volume and operating income of our shopping malls.

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Argentine laws governing leases impose restrictions that limit our flexibility.

Argentine laws governing leases impose certain restrictions, including the following:

| · | a prohibition on including automatic price adjustment clauses based on inflation increases in leases; and
| · | the imposition of a two-year minimum lease term for all purposes, except in particular cases such as embassy, consulate or international organization venues, room with furniture for touristic purposes for less than three months, custody and bailment of goods, exhibition or offering of goods in fairs or in cases where due to the circumstances, the subject matter of the lease requires a shorter term.

As a result, we are exposed to the risk of higher rates of inflation under our leases, and any exercise of rescission rights by our tenants could materially and adversely affect our business and results of operations. We cannot assure you that our tenants will not exercise such right, especially if rental rates stabilize or decline in the future or if economic conditions continue to deteriorate.

We may be liable for certain defects in our buildings.

The Argentine Civil and Commercial Code imposes liability for real estate developers, builders, technical project managers and architects in case of hidden defects in a property for a period of three years from the date title on the property is tendered to the purchaser, even when those defects did not cause significant property damage. If any defect affects the structural soundness or make the property unfit for use, the liability term is ten years.

In our real estate developments, we usually act as developers and sellers while construction generally is carried out by third party contractors. Absent a specific claim, we cannot quantify the potential cost of any obligation that may arise as a result of a future claim, and we have not recorded provisions associated with them in our financial statements. If we were required to remedy any defects on completed works, our financial condition and results of operations could be adversely affected.

We could have losses if we have to resort to eviction proceedings in Argentina to collect unpaid rent because such proceedings are complex and time-consuming.

Although Argentine law permits filing of an executive proceeding to collect unpaid rent and a special proceeding to evict tenants, eviction proceedings in Argentina are complex and time-consuming. Historically, the heavy workloads of the courts and the numerous procedural steps required have generally delayed landlords’ efforts to evict tenants. Eviction proceedings generally take between six months and two years from the date of filing of the suit to the time of actual eviction.

Historically, we have sought to negotiate the termination of leases with defaulting tenants after the first few months of non-payment in an effort to avoid legal proceedings. Delinquency may increase significantly in the future, and such negotiations with tenants may not be as successful as they have been in the past. Moreover, new Argentine laws and regulations may forbid or restrict eviction, and in each such case they would likely have a material and adverse effect on our financial condition and results of operations.

Climate change may have adverse effects on our business

We, our customers, and communities in which we operate, may be adversely affected by the physical risks of climate change, including increases in temperatures, sea levels, and the frequency and severity of adverse climatic events including fires, storms, floods and droughts. These effects, whether acute or chronic in nature, may directly impact us and our customers through disruptions to business and economic activity or impacts on income and asset values.

Initiatives to mitigate or respond to climate change may impact market and asset prices, economic activity, and customer behavior, particularly in emissions intensive industry sectors and geographies affected by these changes.

Failure to effectively manage and disclose these risks could adversely affect our business, prospects, reputation, financial performance or financial condition.

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The recurrence of a credit crisis could have a negative impact on our major customers, which in turn could materially adversely affect our results of operations and liquidity.

The global credit crisis has a significant negative impact on businesses around the world. Similarly, Argentina is undergoing a credit crisis that could negatively impact our tenants’ ability to comply with their lease obligations. The impact of a future credit crisis on our major tenants cannot be predicted and may be quite severe. A disruption in the ability of our significant tenants to access liquidity could pose serious disruptions or an overall deterioration of their businesses, which could lead to a significant reduction in future orders of their products and their inability or failure to comply with their obligations, any of which could have a material adverse effect on our results of operations and liquidity.

We are subject to risks inherent to the operation of office buildings that may affect our profitability.

Office buildings are exposed to various factors that may affect their development, administration and profitability, including the following factors:

| · | lower demand for office space;
| · | a deterioration in the financial condition of our tenants that causes defaults under leases due to lack of liquidity, access to capital or for other reasons;
| · | difficulties or delays renewing leases or re-leasing space;
| · | decreases in rents as a result of oversupply, particularly offerings at newer or re-developed properties;
| · | competition from developers, owners and operators of office properties and other commercial real estate, including sublease space available from our tenants;
| · | maintenance, repair and renovation costs incurred to maintain the competitiveness of our office buildings;
| · | exchange controls that may interfere with their ability to pay rents that generally are pegged to the U.S. dollar;
| · | the consequences of a pandemic, epidemic or disease outbreak that would produce lower demand for offices spaces; and
| · | an increase in our operating costs, caused by inflation or by other factors could have a material adverse effect on us if our tenants are unable to pay higher rent as a result of increased expenses.

Our investment in property development and management activities may be less profitable than we anticipate.

We are engaged in the development and construction of properties to be used for office, residential or commercial purposes, shopping malls and residential complexes, in general through third-party contractors. Risks associated with our development, reconversion and construction activities include the following, among others:

| · | abandonment of development opportunities and renovation proposals;
| · | construction costs may exceed our estimates for reasons including higher interest rates or increases in the cost of materials and labor, making a project unprofitable;
| · | occupancy rates and rents at newly completed properties may fluctuate depending on a number of factors, including market and economic conditions, resulting in lower than projected rental revenue and a corresponding lower return on our investment;
| · | pre-construction buyers may default on their purchase contracts or units in new buildings may remain unsold upon completion of construction;
| · | lack of affordable financing alternatives in the private and public debt markets;
| · | sale prices of residential units may be insufficient to cover development costs;

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| · | construction and lease commencements may not be completed on schedule, resulting in increased debt service expense and construction costs;
| · | failure or delays in obtaining necessary zoning, land-use, building, occupancy and other required governmental permits and authorizations, or building moratoria and anti-growth legislation;
| · | significant time lags between the commencement and completion of projects subjects us to greater risks due to fluctuation in the general economy;
| · | construction may be delayed because of a number of factors, including weather, strikes or delays in receipt of zoning or other regulatory approvals, or man-made or natural disasters, resulting in increased debt service expense and construction costs;
| · | changes in our tenants’ demand for rental properties outside of Buenos Aires; and
| · | we may incur capital expenditures that require considerable time and effort and which may never be completed due to government restrictions or overall market conditions.

In addition, we may face claims for the enforcement of labor laws in Argentina. Many companies hire personnel from third-parties that provide outsourced services, and sign indemnity agreements if labor claims from employees of such third company arise. However, in recent years several courts have rejected the existence of independence in those labor relations and ruled that joint and several responsibility by both companies.

While our policies with respect to expansion, renovation and development activities are intended to limit some of the risks otherwise associated with such activities, we are nevertheless subject to risks associated with property development, such as cost overruns, design changes and timing delays arising from a lack of availability of materials and labor, weather conditions and other factors outside of our control, as well as financing costs that, may exceed original estimates, possibly making the associated investment unprofitable. Any delays or unanticipated expenses could adversely affect the investment returns from these development projects and harm our operating results.

Greater than expected increases in construction costs could adversely affect the profitability of our new developments.

Our businesses activities include real estate developments. One of the main risks related to this activity corresponds to potential increases in constructions costs, which may be driven by higher demand and new development projects in the shopping malls and buildings sectors. Increases higher than those included in the original budget may result in lower profitability than expected.

The increasingly competitive real estate sector in Argentina may adversely affect our ability to rent or sell office space and other real estate and may affect the sale and lease price of our premises.

Our real estate activities are highly concentrated in the Buenos Aires metropolitan area where the market is highly competitive due to a scarcity of properties in sought-after locations and an increasing number of local and international competitors. The Argentine real estate industry is highly competitive and fragmented and does not have high barriers to entry for new competitors. The main competitive factors in the real estate development business include availability and location of land, price, funding, design, quality, reputation and partnerships with developers. A number of residential and commercial developers and real estate service companies compete in identifying land acquisition opportunities, attracting financial resources, and appealing to prospective purchasers and tenants. Other companies, including joint ventures of foreign and local companies, have become increasingly active in the market, further increasing competition. If one or more of our competitors is able to acquire and develop desirable properties, because it has access to greater financial resources or otherwise, if we are unable to respond to such pressures as promptly as our competitors, or competition increases, our business and financial condition could be adversely affected.

All of our shopping mall and commercial office properties are located in Argentina. There are other shopping malls and independent retail stores and residential properties that are within the geographic scope of each of our properties. The number of competing properties in a particular area could have a material adverse effect both on our ability to lease retail space in our shopping malls or sell units in our residential complexes and on the amount of rent or the sale price that we are able to charge. We cannot assure you that other shopping mall operators will not invest in Argentina in the near future. If additional competitors become active in the shopping mall segment, such competition could have a material adverse effect on our results of operations.

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Substantially all of our offices and other non-shopping mall rental properties are located in developed urban areas. There are many office buildings, shopping malls, retail and residential premises in the areas where our properties are located. This is a highly fragmented market, and the abundance of comparable properties in our vicinity may adversely affect our ability to rent or sell office space and other real estate and may affect the sale and lease price of our premises. In the future, both national and foreign companies may participate in Argentina’s real estate development market, competing with us for business opportunities.

Some potential losses are not covered by insurance and certain kinds of insurance coverage may become prohibitively expensive.

We currently carry insurance policies that cover potential risks such as civil liability, fire, lost profit and floods, including extended coverage and losses from leases on all of our properties. Although we believe the policy specifications and insured limits of these policies are customary, there are certain types of losses, such as lease and other contract claims, terrorism and acts of war that generally are not insured under the insurance policies offered in the Argentina. In the event of a loss that was not insured or a loss in excess of insured limits, we could lose all or a portion of the capital we have invested in a property, as well as its anticipated future revenue. In such an event, we might nevertheless remain obligated for any mortgage debt or other financial obligations related to the property. We cannot assure you that material losses in excess of insurance proceeds will not occur in the future. If any of our properties were to experience a catastrophic loss, it could seriously disrupt our operations, delay revenue and result in large expenses to repair or rebuild the property. Insurance companies may no longer offer coverage against certain types of losses, such as losses due to terrorist acts and the existence of mold, or, if offered, these types of insurance may become too expensive.

We do not have life or disability insurance for our key employees. If any of our key employees were to die or become disabled, we could experience losses caused by a disruption in our operations which will not be covered by insurance, and this could have a material adverse effect on our financial condition and results of operations.

An uninsured loss or a loss that exceeds policy limits could subject us to lost capital or revenue on those properties.

The terms of our standard form property leases currently in effect, require tenants to indemnify and hold us harmless from liabilities resulting from injury to persons or property at or outside the premises, due to activities conducted on the properties, except for claims arising from negligence or intentional misconduct of our agents. Tenants are generally required, at the tenant’s expense, to obtain and keep in full force during the term of the lease, liability insurance policies. We cannot provide assurance that our tenants will be able to properly maintain their insurance policies or have the ability to pay deductibles. If an uninsured loss occurs or a loss arises that exceeds the combined aggregate limits for the policies, or if a loss arises that is subject to a substantial deductible under an insurance policy, we could lose all or part of our capital invested in, and anticipated revenue from, one or more of our properties, which could have a material adverse effect on our business, financial condition and results of operations.

Demand for our premium properties, aimed at high-income consumers, may not be sufficient.

We have focused on development projects that cater to affluent consumers and we have entered into property barter arrangements pursuant to which we contribute undeveloped land parcels to joint venture entities with developers who agree to deliver units at premium development locations in exchange for our land contribution. When the developers return these properties to us, demand for premium residential units could be significantly lower. In such case, we would be unable to sell these residential units at the estimated prices or time frame, which could have an adverse effect on our financial condition and results of operations.

We are subject to risks affecting the hotel industry.

The full-service segment of the lodging industry in which our hotels operate is highly competitive. The operational success of our hotels is highly dependent on our ability to compete in areas such as access, location, quality of accommodations, rates, quality food and beverage facilities and other services and amenities. Our hotels may face additional competition if other companies decide to build new hotels or improve their existing hotels to increase their attractiveness.

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In addition, the profitability of our hotels depends on:

| · | our ability to form successful relationships with international and local operators to run our hotels;
| · | changes in tourism and travel trends, including seasonal changes and changes due to pandemic outbreaks, such as the Influenza A Subtype H1N1 and Zika viruses, a potential Ebola outbreak, COVID-19, among others, or weather phenomena’s or other natural events, such as the eruption of the Puyehué and the Calbuco volcano in June 2011 and April 2015, respectively;
| · | affluence of tourists, which can be affected by a slowdown in global economy; and
| · | taxes and governmental regulations affecting wages, prices, interest rates, construction procedures and costs.

The shift by consumers to purchasing goods over the internet, where barriers to entry are low, may negatively affect sales at our shopping malls.

In recent years, internet retail sales have grown significantly in Argentina, even though the market share of such sales is still modest. The Internet enables manufacturers and retailers to sell directly to consumers, diminishing the importance of traditional distribution channels such as retail stores and shopping malls. We believe that our target consumers are increasingly using the Internet, from home, work or elsewhere, to shop electronically for retail goods, and this trend is likely to continue. Retailers at our properties face increasing competition from online sales and this could cause the termination or non-renewal of their leases or a reduction in their gross sales, affecting our percentage rent based revenue. If e commerce and retail sales through the Internet continue to grow, retailers’ and consumers’ reliance on our shopping malls could be materially diminished, having a material adverse effect on our financial condition, results of operations and business prospects. For more information with respect to the COVID-19 pandemic and its impact on our business, see “Item 5.A. Operating Results – The Ongoing COVID-19 Pandemic.”

Our business is subject to extensive regulation and additional regulations may be imposed in the future.

Our activities are subject to Argentine federal, state and municipal laws, and to regulations, authorizations and licenses required with respect to construction, zoning, use of the soil, environmental protection and historical landmark preservation, consumer protection, antitrust and other requirements, all of which affect our ability to acquire land, buildings and shopping malls, develop and build projects and negotiate with customers. In addition, companies in this industry are subject to increasing tax rates, the introduction of new taxes and changes in the taxation regime. We are required to obtain permits from different government agencies in order to carry out our projects. Maintaining our licenses and authorizations can be costly. If we fail to comply with such laws, regulations, licenses and authorizations, we may face fines, project shutdowns, and cancellation of licenses and revocation of authorizations.

In addition, public agencies may issue new and stricter standards, or enforce or construe existing laws and regulations in a more restrictive manner, which may force us to incur expenditures in order to comply. Development activities are also subject to risks of potential delays in or an inability to obtain all necessary zoning, environmental, land-use, development, building, occupancy and other permits and authorizations. Any such delays or failures to obtain such government approvals may have an adverse effect on our business.

In the past, the Argentine government issued regulations regarding leases in response to housing shortages, high rates of inflation and difficulties in accessing credit. Such regulations limited or prohibited increases on rental prices and prohibited eviction of tenants, even for failure to pay rent. Most of our leases provide that tenants pay all costs and taxes related to their respective leased areas. In the event of a significant increase in such costs and taxes, the Argentine government may respond to political pressure to intervene by regulating this practice, thereby negatively affecting our rental income. We cannot assure you that the Argentine government will not impose similar or other regulations in the future. Changes in existing laws or the enactment of new laws governing the ownership, operation or leasing of shopping malls and office properties in Argentina could negatively affect the real estate and the rental market and materially and adversely affect our operations and financial condition.

Labor relations may negatively impact us.

As of June 30, 2021, 62.4% of IRSA’s workforce was represented by unions under collective bargaining agreements. Although we currently enjoy good relations with our employees and their unions, we cannot assure you that labor relations will continue to be positive or that deterioration in labor relations will not materially and adversely affect us.

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Our results of operations include unrealized revaluation adjustments on investment properties, which may fluctuate significantly over financial periods and may materially and adversely affect our business, results of operations and financial condition.

During the year ended June 30, 2021, we had fair value loss on investment properties of ARS 7,770 million. Although the upward or downward revaluation adjustments reflect unrealized capital gains or losses on our investment properties during the relevant periods, the adjustments do not reflect the actual cash flow or profit or losses generated from the sales or rental of our investment properties. Unless such investment properties are disposed of at similarly revalued amounts, we will not realize the actual cash flow. The amount of revaluation adjustments has been, and will continue to be, significantly affected by the prevailing property markets and macroeconomic conditions prevailing in Argentina and will be subject to market fluctuations in those markets.

We cannot guarantee whether changes in market conditions will increase, maintain or decrease the historical average fair value gains on our investment properties or at all. In addition, the fair value of our investment properties may materially differ from the amount we receive from any actual sale of an investment property. If there is any material downward adjustment in the revaluation of our investment properties in the future or if our investment properties are disposed of at significantly lower prices than their valuation or appraised value, our business, results of operations and financial condition may be materially and adversely affected.

Due to the currency mismatches between our assets and liabilities, we have high currency exposure.

As of June 30, 2021 the majority of our liabilities in our Operations Center in Argentina, such as our Series 1, 5, 7, 8, 9 and 11 Notes, the Series 2 Notes issued by our subsidiary IRSA Commercial Properties (“IRSA CP”), and our Series 13 Notes issued on March 31, 2021, were denominated in U.S. dollars while our revenue are mainly denominated in Pesos. This currency gap and restrictions to access to foreign exchange markets to acquire the required U.S. dollars to pay our U.S. dollar denominated debt. exposes us to a risk of volatility, which circumstances may adversely affect our financial results if the U.S. dollar appreciates against the Peso and may affected our ability to our U.S. dollar denominated debt. Any depreciation of the Peso against the U.S. dollar increases the nominal amount of our debt in Pesos, which further adversely affects our results of operation and financial condition and may increase the collection risk of our leases and other receivables from our tenants and mortgagees, most of which generate Peso denominated revenue.

We issue debt in the local and international capital markets as one of our main sources of funding and our capacity to successfully access the local and international markets on favorable terms affects our cost of funding.

Our ability to successfully access the local and international capital markets on acceptable terms depends largely on capital markets conditions prevailing in Argentina and internationally. We have no control over capital markets conditions, which can be volatile and unpredictable. If we are unable to issue debt in the local and/or international capital markets and on terms acceptable to us, whether as a result of regulations and foreign exchange restrictions, a deterioration in capital markets conditions or otherwise, we would likely be compelled to seek alternatives for funding, which may include short-term or more expensive funding sources. If this was to happen, we may be unable to fund our liquidity needs at competitive costs and our business results of operations and financial condition may be materially and adversely affected.

Property ownership through joint ventures or investees may limit our ability to act exclusively in our interest.

We develop and acquire properties in joint ventures with other persons or entities or make minority investments in entities when we believe circumstances warrant the use of such structures.

As of June 30, 2021 through our subsidiary IRSA CP, we own 50% of Quality Invest S.A. In the Sales and Developments segment, we own 50% of the equity of Puerto Retiro and 50% of the equity of Cyrsa S.A. In the Hotel segment, we own 50% of the equity of Hotel Llao Llao and the other 50% is owned by the Sutton Group.

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In addition, we hold approximately 29.91% of the equity of Banco Hipotecario, of which the Argentine government is the controlling shareholder. We also hold approximately 18.9% of the equity of Condor Hospitality Trust Inc. (“Condor”), which is under a sale process, for more information see “Business Overview—International—Investment in Condor Hospitality Trust”.

We could engage in a dispute with one or more of our joint venture partners or controlling shareholder in an investment that might affect our ability to operate a jointly-owned property. Moreover, our joint venture partners or controlling shareholder in an investment may, at any time, have business, economic or other objectives that are inconsistent with our objectives, including objectives that relate to the timing and terms of any sale or refinancing of a property. For example, the approval of certain of our investors is required with respect to operating budgets and refinancing, encumbering, expanding or selling any of these properties. In some instances, our joint venture partners or controlling shareholder in an investment may have competing interests in their markets that could create conflicts of interest. If the objectives of our joint venture partners or controlling shareholder in an investment are inconsistent with our own objectives, we will not be able to act exclusively in our interests.

If one or more of the investors in any of our jointly owned properties were to experience financial difficulties, including bankruptcy, insolvency or a general downturn of business, there could be an adverse effect on the relevant property or properties and in turn, on our financial performance. Should a joint venture partner or controlling shareholder in an investment declare bankruptcy, we could be liable for our partner’s common share of joint venture liabilities or liabilities of the investment vehicle.

Dividend restrictions in our subsidiaries may have an adverse effect on us.

Dividends paid by our subsidiaries are an important source of funds for us as are other permitted payments from subsidiaries. The debt agreements of our subsidiaries contain or may in the future contain covenants restricting their ability to pay dividends or make other distributions to us. If our subsidiaries are unable to make such payments to us, or are able to pay only limited amounts, we may be unable to pay dividends or make payments on our indebtedness.

We are dependent on our Board of Directors senior management and other key personnel.

Our success, to a significant extent, depends on the continued employment of Eduardo S. Elsztain and certain other members of our Board of Directors and senior management, who have significant expertise and knowledge of our business and industry. The loss or interruption of their services for any reason could have a material adverse effect on our business and results of operations. Our future success also depends in part upon our ability to attract and retain other highly qualified personnel. We cannot assure you that we will be successful in hiring or retaining qualified personnel, or that any of our personnel will remain employed by us, which may have a material adverse effect on our financial condition and results of operations.

We may face potential conflicts of interest relating to our principal shareholders.

Our largest beneficial owner is Mr. Eduardo S. Elsztain, according to his indirect shareholding through Cresud S.A.C.I.F. y A. As of June 30, 2021, such beneficial ownership consisted of 408,746,837 common shares held by Cresud S.A.C.I.F. y A. Conflicts of interest between our management and that of our related companies may arise in connection with the performance of their respective business activities. As of June 30, 2021, Mr. Eduardo S. Elsztain also beneficially owned (i) approximately 63.1% of our common shares and (ii) approximately 84.3% of the common shares of IRSA CP. We cannot assure you that our principal shareholders and our affiliates will not limit or cause us to forego business opportunities that our affiliates may pursue or that the pursuit of other opportunities will be in our interest.

Risks Relating to our Investment in Banco Hipotecario

As of June 30, 2021, we owned approximately 29.91% of the outstanding capital stock of Banco Hipotecario S.A. (“Banco Hipotecario”). Banco Hipotecario’s assets as of such date were 187.595,5. All of Banco Hipotecario’s operations, properties and customers are located in Argentina. Accordingly, the quality of Banco Hipotecario’s loan portfolio, financial condition and results of operations depend on economic, regulatory and political conditions prevailing in Argentina. These conditions include growth rates, inflation rates, exchange rates, changes to interest rates, changes to government policies, social instability and other political, economic or international developments either taking place in, or otherwise affecting, Argentina.

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The short-term structure of the deposit base of the Argentine financial system, including Banco Hipotecario, could lead to a reduction in liquidity levels and limit the long-term expansion of financial intermediation.

Given the short-term structure of the deposit base of the Argentine financial system, credit lines are also predominantly short-term, with the exception of mortgages, which represent a low proportion of the existing credit base. Although liquidity levels are currently reasonable, no assurance can be given that these levels will not be reduced due to a future negative economic scenario. Therefore, there is still a risk of low liquidity levels that could increase funding cost in the event of a withdrawal of a significant amount of the deposit base of the financial system, and limit the long-term expansion of financial intermediation including Banco Hipotecario.

The growth and profitability of Argentina’s financial system partially depend on the development of long-term funding. During 2019, Central Bank reserves registered an abrupt fall mainly due to U.S. Dollars sales by the Central Bank and the National Treasury to the private sector; cancellation of public debt; and outflow of dollar deposits from the private sector. As a consequence, there is a reduction of loans denominated in U.S. Dollars. Since most deposits in the Argentine financial system are short-term, a substantial portion of the loans have the same or similar maturities, and there is a small portion of long-term credit lines. The uncertainty with respect to the level of inflation in future years is a principal obstacle to a faster recovery of Argentina’s private sector long-term lending. This uncertainty has had, and may continue to have a significant impact on both the supply of and demand for long-term loans as borrowers try to hedge against inflation risk by borrowing at fixed rates while lenders hedge against inflation risk by offering loans at floating rates. If longer-term financial intermediation activity does not grow, the ability of financial institutions, including Banco Hipotecario, to generate profits will be negatively affected.

Banco Hipotecario issues debt in the local and international capital markets as one of its sources of funding and its capacity to successfully access the local and international markets on favorable terms affects its cost of funding.

In recent years, Banco Hipotecario has diversified its financing sources by increasing deposits. Still, Banco Hipotecario remains having presence in the local and international capital markets. As of June 30, 2021, Banco Hipotecario’s financial indebtedness accounted for 15.6% of its financing. Likewise, as of June 30, 2021, the issuance of notes represented 11.42% of its total liabilities. The ability of Banco Hipotecario to successfully access the local and international capital markets and on acceptable terms depends largely on capital markets conditions prevailing in Argentina and internationally. Banco Hipotecario has no control over capital markets conditions, which can be volatile and unpredictable.

The stability of the financial system depends upon the ability of financial institutions, including Banco Hipotecario, to maintain and increase the confidence of depositors.

The measures implemented by the Argentine government in late 2001 and early 2002, in particular the restrictions imposed on depositors to withdraw money freely from banks and the “pesification” and restructuring of their deposits, were strongly opposed by depositors due to the losses on their savings and undermined their confidence in the Argentine financial system and in all financial institutions operating in Argentina.

If depositors once again withdraw their money from banks in the future, there may be a substantial negative impact on the manner in which financial institutions, including Banco Hipotecario, conduct their business, and on their ability to operate as financial intermediaries. Loss of confidence in the international financial markets may also adversely affect the confidence of Argentine depositors in local banks.

In the future, an adverse economic situation, even if it is not related to the financial system, could trigger a massive withdrawal of capital from local banks by depositors, as an alternative to protect their assets from potential crises. Any massive withdrawal of deposits could cause liquidity issues in the financial sector and, consequently, a contraction in credit supply.

The occurrence of any of the above could have a material and adverse effect on Banco Hipotecario’s expenses and business, results of operations and financial condition.

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The asset quality of financial institutions is exposed to the non-financial public sector’s and Central Bank’s indebtedness.

Financial institutions carry significant portfolios of bonds issued by the Argentine government and by provincial governments as well as loans granted to these governments. The exposure of the financial system to the non-financial public sector’s indebtedness had been shrinking steadily, from 49.0% of total assets in 2002 to 13.9% as of June 30, 2021. To an extent, the value of the assets held by Argentine banks, as well as their capacity to generate income, is dependent on the creditworthiness of the non-financial public sector, which is in turn tied to the government’s ability to foster sustainable long-term growth, generate fiscal revenue and reduce public expenditure.

In addition, financial institutions currently carry securities issued by the Central Bank in their portfolios, which generally are short-term. As of June 30, 2021 such securities issued by the Central Bank represented approximately 14.9% of the total assets of the Argentine financial system. As of June 30, 2021, Banco Hipotecario’s total exposure to the public sector was ARS 22.582,8 million, which represented 12.0% of its assets as of that date, and the total exposure to securities issued by the Central Bank was ARS 23.483,5 million, which represented 12.5% of its total assets as of June 30, 2021.

The quality of Banco Hipotecario’s assets and that of other financial institutions may deteriorate if the Argentine private sector is affected by economic events in Argentina or international macroeconomic conditions.

The capacity of many Argentine private sector debtors to repay their loans has in the past deteriorated as a result of certain economic events in Argentina or macroeconomic conditions, materially affecting the asset quality of financial institutions, including Banco Hipotecario. The ratio of non-performing private sector loans has increased in recent years, as Argentina’s economic outlook deteriorated. Banco Hipotecario recorded non-performing loan ratios of 6.0%, 12.3%, 12.7% and 14.3% for 2018, 2019, 2020 and 2021, respectively. The quality of its loan portfolio is highly sensitive to economic conditions prevailing from time to time in Argentina, and as a result if Argentina were to experience adverse macroeconomic conditions, the quality of Banco Hipotecario’s loan portfolio and the recoverability of its loans would likely be adversely affected. This might affect the creditworthiness of Banco Hipotecario’s loan portfolio and the results of operations.

The Consumer Protection Law may limit some of the rights afforded to Banco Hipotecario.

Argentine Law No. 24,240 (the “Consumer Protection Law”) sets forth a series of rules and principles designed to protect consumers, which include Banco Hipotecario’s customers. The Consumer Protection Law was amended by Law No. 26,361 on March 12, 2008 to expand its applicability and the penalties associated with violations thereof. Additionally, Law No. 25,065 (as amended by Law N° 26,010 and Law N° 26,361, the “Credit Card Law”) also sets forth public policy regulations designed to protect credit card holders. Recent Central Bank regulations, such as Communication “A” 5,388, also protect consumers of financial services.

In addition, the Civil and Commercial Code has a chapter on consumer protection, stressing that the rules governing consumer relations should be applied and interpreted in accordance with the principle of consumer protection and that a consumer contract should be interpreted in the sense most favorable to it. The application of both the Consumer Protection Law and the Credit Card Law by administrative authorities and courts at the federal, provincial and municipal levels has increased. This trend has increased general consumer protection levels. If Banco Hipotecario is found to be liable for violations of any of the provisions of these laws, the potential penalties could limit some of Banco Hipotecario’s rights, for example, with respect to its ability to collect payments due from services and financing provided by us, and adversely affect Banco Hipotecario’s financial results of operations.

We cannot assure you that court and administrative rulings based on the newly-enacted regulation or measures adopted by the enforcement authorities will not increase the degree of protection given to Banco Hipotecario’s debtors and other customers in the future, or that they will not favor the claims brought by consumer groups or associations. This may prevent or hinder the collection of payments resulting from services rendered and financing granted by us, which may have an adverse effect on Banco Hipotecario’s business and results of operations.

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Class actions against financial institutions for unliquidated amounts may adversely affect the financial system’s profitability.

Certain public and private organizations have initiated class actions against financial institutions in Argentina. The National Constitution and the Consumer Protection Law contain certain provisions regarding class actions. However, their guidance with respect to procedural rules for instituting and trying class action cases is limited. Nonetheless, through an ad hoc doctrine, Argentine courts have admitted class actions in some cases, including various lawsuits against financial entities related to “collective interests” such as alleged overcharging on products, interest rates and advice in the sale of public securities, etc. If class action plaintiffs were to prevail against financial institutions, their success could have an adverse effect on the financial industry in general and indirectly on Banco Hipotecario’s business.

Banco Hipotecario operates in a highly regulated environment and its operations are subject to capital controls regulations adopted by several regulatory agencies.

Financial institutions are subject to a major number of regulations concerning functions historically determined by the Central Bank and other regulatory authorities. The Central Bank may penalize Banco Hipotecario and its directors, members of the Executive Committee and members of its Supervisory Committee, in the event of any breach of the applicable regulation. Potential sanctions, for any breach on the applicable regulations may vary from administrative and/or disciplinary penalties to criminal sanctions. Similarly, the CNV, which authorizes securities offerings and regulates the capital markets in Argentina, has the authority to impose sanctions on us and Banco Hipotecario’s Board of Directors for breaches of corporate governance established in the capital markets laws and the CNV Rules. The Financial Information Unit (Unidad de Información Financiera, or “UIF” as per its acronym in Spanish) regulates matters relating to the prevention of asset laundering and has the ability to monitor compliance with any such regulations by financial institutions and, eventually, impose sanctions.

We cannot assure you whether such regulatory authorities will commence proceedings against Banco Hipotecario, its shareholders, directors or its Supervisory Committee, or penalize Banco Hipotecario. Banco Hipotecario has adopted “Know Your Customer” and other policies and procedures to comply with its duties under currently applicable rules and regulations.

In addition to regulations specific to the banking industry, Banco Hipotecario is subject to a wide range of federal, provincial and municipal regulations and supervision generally applicable to businesses operating in Argentina, including laws and regulations pertaining to labor, social security, public health, consumer protection, the environment, competition and price controls. We cannot assure you that existing or future legislation and regulation will not require material expenditures by Banco Hipotecario or otherwise have a material adverse effect on Banco Hipotecario’s consolidated operations.

The effects of legislation that restricts our ability to pursue mortgage foreclosure proceedings could adversely affect us.

The ability to pursue foreclosure proceedings through completion, in order to recover on defaulted mortgage loans, has an impact on financial institutions activities. On December 13, 2006, pursuant to Law No. 26,177, the “Restructuring Unit Law” was created to allow all mortgage loans to be restructured between debtors and the former Banco Hipotecario Nacional, insofar as such mortgages had been granted prior to the effectiveness of the Convertibility Law. Law No. 26,313, the “Pre-convertibility Mortgage Loans Restructuring Law,” was enacted by the Argentine Congress on November 21, 2007 and partially signed into law on December 6, 2007 to establish the procedure to be followed in the restructuring of mortgage loans within the scope of Section 23 of the Mortgage Refinancing System Law in accordance with the guidelines established by the Restructuring Unit Law. To this end, a recalculation was established for certain mortgage loans originated by the former Banco Hipotecario Nacional before April 1, 1991.

Executive Branch Decree No. 2,107/08 issued on December 19, 2008 regulated the Pre-convertibility Mortgage Loans Restructuring Law and established that the recalculation of the debt applies to the individual mortgage loans from global operations in effect on December 31, 2008 and agreed upon prior to April 1, 1991, and in arrears at least since November 2007 and remaining in arrears on December 31, 2008. In turn, the Executive Branch Decree No. 1,366/10, published on September 21, 2010, expanded the universe of Pre-convertibility loans subject to restructuring to include the individual mortgage loans not originating in global operations insofar as they met the other requirements imposed by Executive Branch Decree No. 2,107/08. In addition, Law No. 26,313 and its regulatory decrees also condoned the debts on mortgage loans granted before the Convertibility Law in so far as they had been granted to deal with emergency situations and in so far as they met the arrears requirement imposed on the loans subject to recalculation.

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Subject to the Central Bank’s supervision, Banco Hipotecario implemented the recalculation of mortgage loans within the scope of the aforementioned rules by adjusting the value of the new installments to a maximum amount not in excess of 20% of household income. In this respect, we estimate that Banco Hipotecario has sufficient loan loss provisions to face any adverse economic impact on the portfolio involved. We cannot assure that the Argentine government will not enact additional laws restricting our ability to enforce our rights as a creditor and/or imposing a condition or a reduction of principal on the amounts unpaid in our mortgage loan portfolio. Any such circumstance could have a significant adverse effect on our financial condition and the results of our operations.

Increased competition and M&A activities in the banking industry may adversely affect Banco Hipotecario.

Banco Hipotecario foresees increased competition in the banking sector. If the trend towards decreasing spreads is not offset by an increase in lending volumes, the ensuing losses could lead to mergers in the industry. These mergers could lead to the establishment of larger, stronger banks with more resources than us. Therefore, although the demand for financial products and services in the market continues to grow, competition may adversely affect Banco Hipotecario’s results of operations, resulting in shrinking spreads and commissions.

Future governmental measures may adversely affect the economy and the operations of financial institutions.

The Argentine government has historically exercised significant influence over the economy, and financial institutions, in particular, have operated in a highly regulated environment. We cannot assure you that the laws and regulations currently governing the economy or the banking sector will remain unaltered in the future or that any such changes will not adversely affect Banco Hipotecario’s business, financial condition or results of operations and Banco Hipotecario’s ability to honor its debt obligations in foreign currency.

Several legislative bills to amend the Financial Institutions Law have been sent to the Argentine Congress. If the law currently in force were to be comprehensively modified, the financial system as a whole could be substantially and adversely affected. If any of these legislative bills were to be enacted or if the Financial Institutions Law were amended in any other way, the impact of the subsequent amendments to the regulations on the financial institutions in general, Banco Hipotecario’s business, its financial condition and the results of operations is uncertain.

Law No. 26,739 was enacted to amend the Central Bank’s charter, the principal aspects of which are: (i) to broaden the scope of the Central Bank’s mission (by establishing that such institution shall be responsible for financial stability and economic development while pursuing social equity); (ii) to change the obligation to maintain an equivalent ratio between the monetary base and the amount of international reserves; (iii) to establish that the Board of Directors of the institution will be the authority responsible for determining the level of reserves required to guarantee normal operation of the foreign exchange market based on changes in external accounts; and (iv) to empower the monetary authority to regulate and provide guidance on credit through the financial system institutions, so as to “promote long-term production investment.”

In addition, the Civil and Commercial Code, among other things, modifies the applicable regime for contractual provisions relating to foreign currency payment obligations by establishing that foreign currency payment obligations may be discharged in Pesos. This amends the legal framework, pursuant to which debtors may only discharge their foreign currency payment obligations by making payment in the specific foreign currency agreed upon in their agreements; provided however that the option to discharge in Pesos a foreign currency obligation may be waived by the debtor is still under discussion. However, in recent years some court decisions have established the obligation to pay the in foreign currency when it was so freely agreed by the parties. We are not able to ensure that any current or future laws and regulations (including, in particular, the amendment to the Financial Institutions Law and the amendment to the Central Bank’s charter) will not result in significant costs to Banco Hipotecario, or will otherwise have an adverse effect on Banco Hipotecario’s operations.

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Banco Hipotecario’s obligations as trustee of the Programa de Crédito Argentino del Bicentenario para la Vivienda Única Familiar (“PROCREAR”) trust are limited.

Banco Hipotecario currently acts as trustee of the PROCREAR Trust, which aims to facilitate access to housing solutions by providing mortgage loans for construction and developing housing complexes across Argentina. Under the terms and conditions of the PROCREAR Trust, all the duties and obligations under the trust have to be settled with the trust estate. Notwithstanding, if the aforementioned is not met, Banco Hipotecario could have its reputation affected. In addition, if the Argentine government decides to terminate the PROCREAR Trust and/or terminate Banco Hipotecario’s role as trustee of the PROCREAR Trust, this may adversely affect Banco Hipotecario’s results of operations.

The exposure of Banco Hipotecario to individual borrowers could lead to higher levels of past due loans, allowances for loan losses and charge-offs.

A substantial portion of Banco Hipotecario’s loan portfolio consists of loans to individual customers in the lower-middle to middle income segments of the Argentine population. The quality of Banco Hipotecario’s portfolio of loans to individuals is dependent to a significant extent on economic conditions prevailing from time to time in Argentina. Lower-middle to middle income individuals are more likely to be exposed to and adversely affected by adverse developments in the Argentine economy than corporations and high-income individuals. As a result, lending to these segments represents higher risk than lending to such other market segments. Consequently, Banco Hipotecario may experience higher levels of past due amounts, which could result in higher provisions for loan losses. Therefore, there can be no assurance that the levels of past due amounts and subsequent charge-offs will not be materially higher in the future.

An increase in fraud or transaction errors may adversely affect Banco Hipotecario.

As with other financial institutions, Banco Hipotecario is susceptible to, among other things, fraud by employees or outsiders, unauthorized transactions by employees and other operational errors (including clerical or record keeping errors and errors resulting from faulty computer or telecommunications systems). Given the high volume of transactions that may occur at a financial institution, errors could be repeated or compounded before they are discovered and remedied. In addition, some of our transactions are not fully automated, which may further increase the risk that human error or employee tampering will result in losses that may be difficult to detect quickly or at all. Losses from fraud by employees or outsiders, unauthorized transactions by employees and other operational errors might adversely affect Banco Hipotecario’s reputation, business, the results of operations and financial condition.

Risks Related to the GDSs and the Common Shares

Shares eligible for sale could adversely affect the price of our common shares and GDSs.

The market prices of our common shares and GDS could decline as a result of sales by our existing shareholders of common shares or GDSs in the market, or the perception that these sales could occur. These sales also might make it difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.

The GDSs are freely transferable under U.S. securities laws, including common shares sold to our affiliates. Cresud, which as of June 30, 2021, owned approximately 62.1% of our common shares (or approximately 408,746,837 common shares which may be exchanged for an aggregate of 40,874,684 GDSs), is free to dispose of any or all of its common shares or GDSs at any time in its discretion. Sales of a large number of our common shares and/or GDSs would likely have an adverse effect on the market price of our common shares and GDSs.

If we issue additional equity securities in the future, you may suffer dilution, and trading prices for our equity securities may decline.

We may issue additional shares of our common stock for financing future acquisitions or new projects or for other general corporate purposes. Any such issuance could result in a dilution of your ownership stake and/or the perception of any such issuances could have an adverse impact on the market price of the GDSs.

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We are subject to certain different corporate disclosure requirements and accounting standards than domestic issuers of listed securities in the United States

There is less publicly available information about the issuers of securities listed on the Argentine stock exchanges than information publicly available about domestic issuers of listed securities in the United States and certain other countries.

Although the GDSs are listed on the NYSE, as a foreign private issuer we are able to rely on home country governance requirements rather than relying on the NYSE corporate governance requirements. See “Item 16G. Corporate Governance—Compliance with NYSE listing Standards on Corporate Governance.” Additionally, as a foreign private issuer, we are exempt from certain rules under the Exchange Act including (i) the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; (ii) the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and (iii) the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified information, or current reports on Form 8-K, upon the occurrence of specified significant events. In addition, foreign private issuers are not required to file their Annual Report on Form 20-F until four months after the end of each fiscal year, while U.S. domestic issuers that are accelerated filers are required to file their Annual Report on Form 10-K within 75 days after the end of each fiscal year. Foreign private issuers are also exempt from the Regulation Fair Disclosure, aimed at preventing issuers from making selective disclosures of material information. As a result of the above, you may not have the same protections afforded to shareholders companies that are not foreign private issuers.

Investors may not be able to effect service of process within the U.S., limiting their recovery of any foreign judgment.

We are a publicly held corporation (sociedad anónima) organized under the laws of Argentina. Most of our directors and our senior managers, are located in Argentina. As a result, it may not be possible for investors to effect service of process within the United States upon us or such persons or to enforce against us or them in United States courts judgments obtained in such courts predicated upon the civil liability provisions of the United States federal securities laws. We have been advised by our Argentine counsel, Zang, Bergel & Viñes, that there is doubt whether the Argentine courts will enforce, to the same extent and in as timely a manner as a U.S. or foreign court, an action predicated solely upon the civil liability provisions of the United States federal securities laws or other foreign regulations brought against such persons or against us.

If we are considered to be a passive foreign investment company for United States federal income tax purposes, U.S. holders of our common shares or GDSs would suffer negative consequences.

Based on the past and projected composition of our income and assets and the valuation of our assets, including goodwill, we do not believe we were a passive foreign investment company (a “PFIC”) for United States federal income tax purposes for the taxable year ending June 30, 2021, and do not currently expect to become a PFIC, although there can be no assurance in this regard. The determination of whether we are a PFIC is made annually. Accordingly, it is possible that we may be a PFIC in the current or any future taxable year due to changes in our asset or income composition or if our projections are not accurate. The volatility and instability of Argentina’s economic and financial system may substantially affect the composition of our income and assets and the accuracy of our projections. In addition, this determination is based on the interpretation of certain U.S. Treasury regulations relating to rental income, which regulations are potentially subject to different interpretation. If we become a PFIC, U.S. Holders (as defined in “Item 10. Additional Information—Taxation—United States Taxation”) of our common shares or GDSs will be subject to certain United States federal income tax rules that have negative consequences for U.S. Holders such as additional tax and an interest charge upon certain distributions by us or upon a sale or other disposition of our common shares or GDSs at a gain, as well as reporting requirements. See “Item 10. F—Taxation—United States Taxation—Passive Foreign Investment Company” for a more detailed discussion of the consequences if we are deemed a PFIC. You should consult your own tax advisors regarding the application of the PFIC rules to your particular circumstances.

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Changes in Argentine tax laws may affect the tax treatment of our common shares or GDSs.

Law No. 26,893, which amended Law No. 20,628 (the “Income Tax Law”), was enacted on September 12, 2013, and published in the Official Gazette on September 23, 2013. According to the amendments, the distribution of dividends by an Argentine corporation was subject to income tax at a rate of 10.0%, unless such dividends were distributed to Argentine corporate entities (the “Dividend Tax”).

The Dividend Tax was repealed by Law No. 27,260, published in the Official Gazette on July 22, 2016, and consequently no income tax withholding was applicable on the distribution of dividends in respect of both Argentine and non-Argentine resident shareholders, except when dividends distributed were greater than the income determined according to the application of the Income Tax Law, accumulated at the fiscal year immediately preceding the year in which the distribution is made. In such case, the excess was subject to a rate of 35%, for both Argentine and non-Argentine resident shareholders. This treatment still applies to dividends to be distributed at any time out of retained earnings accumulated until the end of the last fiscal year starting before January 1, 2018.

However, pursuant to Law No. 27,430, as amended by Law No. 27,541, dividends to be distributed out of earnings accrued in fiscal years starting on or after January 1, 2018, and other profits paid in cash or in kind —except for stock dividends or quota dividends—by companies and other entities incorporated in Argentina referred to in the Income Tax Law, to Argentine resident individuals, resident undivided estates and foreign beneficiaries will be subject to income tax at a 7% rate on profits accrued during fiscal years starting on January 1, 2018 to December 31, 2019, and at a 13% rate on profits accrued in fiscal years starting on January 1, 2020 and onwards. If dividends are distributed to Argentine corporate taxpayers (in general, entities organized or incorporated under Argentine law, certain traders and intermediaries, local branches of foreign entities, sole proprietorships and individuals carrying on certain commercial activities in Argentina), no dividend tax would apply.

Nevertheless, the initial date for the application of the tax rates mentioned above was modified by Law No. 27,541, published in the Official Gazette on December 23, 2019. According to said law and recent interpretations made by the Federal Tax Department, the 7% tax rate is currently applicable for fiscal years starting on, or prior to December 31, 2020 and the 13% tax rate is applicable for fiscal years starting as from January 1, 2021.

In addition, capital gains originated from the disposal of shares and other securities, including securities representing shares and deposit certificates, are subject to capital gains tax. Law No. 27,430 effective as of January 1, 2018, provides that capital gains obtained by Argentine resident individuals from the disposal of shares and GDSs are exempt from capital gains tax in the following cases: (i) when the shares are placed through a public offering authorized by the CNV, (ii) when the shares are traded in stock markets authorized by the CNV, under segments that ensure priority of price-time and interference of offers, and/or (iii) when the sale, exchange or other disposition of shares is made through an initial public offering and/or exchange of shares authorized by the CNV.

Such law also provides that the capital gains tax applicable to non-residents for transactions entered into until December 30, 2017 is still due, although no taxes will be claimed to non-residents with respect to past sales of Argentine shares or other securities traded in the CNV’s authorized markets (such as GDSs) as long as the cause of the non-payment was the absence of regulations stating the mechanism of tax collection at the time the transaction was closed. General Resolution (AFIP) No. 4,227, which came into effect on April 26, 2018, stipulates the procedures through which the income tax should be paid to the AFIP. The payment of capital gains tax applicable for transactions entered into before December 30, 2017 was due on June 11, 2018.

In addition, Decree No. 824/2019, published in the Official Gazette on December 6, 2019 and which introduced the new consolidated text of the Income Tax Law, maintains the 15% capital gains tax (calculated on the actual net gain or a presumed net gain equal to 90% of the sale price) on the disposal of shares or securities by non-residents. However, non-residents are exempt from the capital gains tax on gains obtained from the sale of (a) Argentine shares in the following cases: (i) when the shares are placed through a public offering authorized by the CNV, (ii) when the shares were traded in stock markets authorized by the CNV, under segments that ensure priority of price-time and interference of offers, and/or (iii) when the sale, exchange or other disposition of shares is made through an initial public offering and/or exchange of shares authorized by the CNV; and (b) depositary shares or depositary receipts issued abroad, when the underlying securities are shares (i) issued by Argentine companies, and (ii) with authorization of public offering. The exemptions will only apply to the extent the foreign beneficiaries reside in, and the funds used for the investment proceed from, jurisdictions not considered as not cooperating for purposes of fiscal transparency.

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In case the exemption is not applicable and, to the extent foreign beneficiaries neither reside in, nor the funds arise from, jurisdictions considered as not cooperating for purposes of fiscal transparency, the gain realized from the disposition of shares would be subject to Argentine income tax at a 13.5% effective rate on the gross price. In case such foreign beneficiaries reside in, or the funds arise from, jurisdictions considered as not cooperating for purposes of fiscal transparency, a 31.5% effective rate on the gross price should apply.

Therefore, holders of our common shares, including in the form of GDSs, are encouraged to consult their tax advisors as to the particular Argentine income tax consequences under their specific facts.

Holders of the GDS may be unable to exercise voting rights with respect to the common shares underlying their GDSs.

As a holder of GDS, we will not treat you as one of our shareholders and you will not have shareholder rights. The depositary will be the holder of the common shares underlying your GDSs and holders may exercise voting rights with respect to the common shares represented by the GDSs only in accordance with the deposit agreement relating to the GDSs. There are no provisions under Argentine law or under our bylaws that limit the exercise by GDS holders of their voting rights through the depositary with respect to the underlying common shares. However, there are practical limitations on the ability of GDS holders to exercise their voting rights due to the additional procedural steps involved in communicating with these holders. For example, holders of our common shares will receive notice of shareholders’ meetings through publication of a notice in the CNV’s website, an Official Gazette in Argentina, an Argentine newspaper of general circulation and the bulletin of the Buenos Aires Stock Exchange, and will be able to exercise their voting rights by either attending the meeting in person or voting by proxy. GDS holders, by comparison, will not receive notice directly from us. Instead, in accordance with the deposit agreement, we will provide the notice to the GDS Depositary. If we ask the GDS Depositary to do so, the GDS Depositary will mail to holders of GDSs the notice of the meeting and a statement as to the manner in which instructions may be given by holders. To exercise their voting rights, GDS holders must then instruct the GDS Depositary as to voting the common shares represented by their GDSs. Under the deposit agreement, the GDS Depositary is not required to carry out any voting instructions unless it receives a legal opinion from us that the matters to be voted would not violate our by-laws or Argentine law. We are not required to instruct our legal counsel to give that opinion. Due to these procedural steps involving the GDS Depositary, the process for exercising voting rights may take longer for GDS holders than for holders of common shares and common shares represented by GDSs may not be voted as you desire.

Under Argentine law, shareholder rights may be fewer or less well defined than in other jurisdictions.

Our corporate affairs are governed by our by-laws and by Argentine corporate law, which differ from the legal principles that would apply if we were incorporated in a jurisdiction in the United States, such as the States of Delaware or New York, or in other jurisdictions outside Argentina. In addition, your rights or the rights of holders of our common shares to protect your or their interests in connection with actions by our Board of Directors may be fewer and less well defined under Argentine corporate law than under the laws of those other jurisdictions. Although insider trading and price manipulation are illegal under Argentine law, the Argentine securities markets are not as highly regulated or supervised as the U.S. securities markets or markets in some other jurisdictions. In addition, rules and policies against self-dealing and regarding the preservation of shareholder interests may be less well defined and enforced in Argentina than in the United States, putting holders of our common shares and GDSs at a potential disadvantage.

Restrictions on the movement of capital out of Argentina may impair your ability to receive dividends and distributions on, and the proceeds of any sale of, the common shares underlying the GDSs.

The Argentine government imposed restrictions on the conversion of Argentine currency into foreign currencies and on the remittance to foreign investors of proceeds from their investments in Argentina. Argentine law currently permits the government to impose these kind of restrictions temporarily in circumstances where a serious imbalance develops in Argentina’s balance of payments or where there are reasons to foresee such an imbalance. We cannot assure you that GDS Depositary for the GDSs may hold the Pesos it cannot convert for the account of the GDS holders who have not been paid. No assurance can be given that payments to non-resident investors will not suffered delays or be subject to any additional restrictions, under the current foreign exchange market regulations or future regulations that may be enacted. In this regard, we suggest consulting with the corresponding custodian banks about the exchange regulations applicable. See “Item 10. Additional Information—D Exchange Controls.”

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The protections afforded to minority shareholders in Argentina are different from and more limited than those in the United States and may be more difficult to enforce.

Under Argentine law, the protections afforded to minority shareholders are different from, and much more limited than, those in the United States and some other Latin American countries. For example, the legal framework with respect to shareholder disputes, such as derivative lawsuits and class actions, is less developed under Argentine law than under U.S. law as a result of Argentina’s short history with these types of claims and few successful cases. In addition, there are different procedural requirements for bringing these types of shareholder lawsuits. As a result, it may be more difficult for our minority shareholders to enforce their rights against us or our directors or controlling shareholder than it would be for shareholders of a U.S. company.

We may not pay any dividends.

In accordance with Argentine corporate law, we may pay dividends to shareholders out of net and realized profits, if any, as set forth in our Audited Financial Statements prepared in accordance with IFRS. The approval, amount and payment of dividends are subject to the approval by our shareholders at our annual ordinary shareholders meeting. The approval of dividends requires the affirmative vote of a majority of the shareholders entitled to vote present at the meeting. As a result, we cannot assure you that we will be able to generate enough net and realized profits so as to pay dividends or that our shareholders will decide that dividends will be paid.

Our ability to pay dividends is limited by law and our by-laws.

In accordance with Argentine corporate law, we may pay dividends in Pesos out of retained earnings, if any, to the extent set forth in our Audited Financial Statements prepared in accordance with IFRS. Our shareholders’ ability to receive cash dividends may be limited by the ability of the GDS Depositary to convert cash dividends paid in Pesos into U.S. dollars. Under the terms of our deposit agreement with the depositary for the GDSs, to the extent that the depositary can in its judgment convert Pesos (or any other foreign currency) into U.S. dollars on a reasonable basis and transfer the resulting U.S. dollars to the United States, the depositary will promptly as practicable convert or cause to be converted all cash dividends received by it on the deposited securities into U.S. dollars. If in the judgment of the depositary this conversion is not possible on a reasonable basis (including as a result of applicable Argentine laws, regulations and approval requirements), the depositary may distribute the foreign currency received by it or in its discretion hold such currency uninvested for the respective accounts of the owners entitled to receive the same. As a result, if the exchange rate fluctuates significantly during a time when the depositary cannot convert the foreign currency, you may lose some or all of the value of the dividend distribution.

You might be unable to exercise preemptive or accretion rights with respect to the common shares underlying your GDSs.

Under Argentine corporate law, if we issue new common shares as part of a capital increase, our shareholders will generally have the right to subscribe for a proportional number of common shares of the class held by them to maintain their existing ownership percentage, which is known as preemptive rights. In addition, shareholders are entitled to the right to subscribe for the unsubscribed common shares of either the class held by them or other classes which remain unsubscribed at the end of a preemptive rights offering, on a pro rata basis, which is known as accretion rights. Under the deposit agreement, the GDS Depositary will not exercise rights on your behalf or make rights available to you unless we instruct it to do so, and we are not required to give that instruction. In addition, you may not be able to exercise the preemptive or accretion rights relating to the common shares underlying your GDSs unless a registration statement under the U.S. Securities Act of 1933, as amended, is effective with respect to those rights or an exemption from the registration requirements of the Securities Act is available. We are not obligated to file a registration statement with respect to the common shares relating to these preemptive rights, and we cannot assure you that we will file any such registration statement. Unless we file a registration statement or an exemption from registration is available, you may receive only the net proceeds from the sale of your preemptive rights by the GDS Depositary or, if the preemptive rights cannot be sold, they will be allowed to lapse. As a result, U.S. holders of common shares or GDSs may suffer dilution of their interest in our company upon future capital increases.

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Our shareholders may be subject to liability for certain votes of their securities.

Our shareholders are not liable for our obligations. Instead, shareholders are generally liable only for the payment of the shares they subscribe. However, shareholders who have a conflict of interest with us and do not abstain from voting may be held liable for damages to us, but only if the transaction would not have been approved without such shareholders’ votes. Furthermore, shareholders who willfully or negligently vote in favor of a resolution that is subsequently declared void by a court as contrary to Ley General de Sociedades No. 19,550 (Argentine Companies Law) or our bylaws may be held jointly and severally liable for damages to us or to other third parties, including other shareholders.

Our warrants are exercisable under limited circumstances and will expire.

On May 12, 2021, we issued an aggregate of 80,000,000 warrants to purchase 80,000,000 of our common shares. Each warrant entitles its holder to purchase one common share. Each warrant will be exercisable only if the common share rights or GDS rights to which such warrant relates have been exercised, and such warrant will be exercisable after 90 days following its issuance during the nine-day period from and including the 17th through the 25th day of each February, May, September and November, on the day prior to their expiration and on their expiration date (to the extent such dates are business days in New York City and Buenos Aires, Argentina).

ITEM 4. Information on the Company

A. History and Development of the Company

General Information

Our legal and commercial name is IRSA Inversiones y Representaciones Sociedad Anónima. We were incorporated and organized on April 30, 1943, under Argentine law as a stock corporation (sociedad anónima), and we were registered with the Public Registry of Commerce of the City of Buenos Aires (Inspección General de Justicia or “IGJ”) on June 23, 1943, under number 284, on page 291, book 46 of volume A. Pursuant to our bylaws, our term of duration expires on April 5, 2043.

Our common shares are listed and traded on the Bolsas y Mercados Argentinos (“BYMA”) and our GDSs representing our common shares are listed on the New York Stock Exchange (“NYSE”). Our headquarters are located at Carlos M. Della Paolera 261, 9th Floor (C1001ADA), City of Buenos Aires. Our telephone is +54 (11) 4323-7400. Our website is www.irsa.com.ar. Information contained in or accessible through our website is not a part of this Annual Report. We assume no responsibility for the information contained on these sites. Our depositary agent for the GDSs in the United States is The Bank of New York Mellon whose address is 240 Greenwich Street, New York, NY 10286, and whose telephone numbers are +1-888-BNY-ADRS (+1-888-269-2377) for U. S. calls and +1-201-680-6825 for calls outside U.S.

History

In July 1994, we acquired a controlling interest in IRSA CP, our main subsidiary in the Operation Center in Argentina, and in January 14, 2010, we acquired from Parque Arauco S.A. a 31.6% stake in IRSA CP. Consequently, we increased our shareholding in IRSA CP to 94.9%. On October 27, 2017, we completed the sale in the secondary market of 2,560,000 ADSs of IRSA CP, which represented 8.1% of IRSA CP. As of June 30, 2021, our holding in IRSA CP was 79.92%. On September 30, 2021, we informed that the Company’s Board of Directors has approved the beginning of the corporate reorganization process, by which IRSA, acting as the absorbing company, will merge by absorption with IRSA CP, as the absorbed company. Likewise, and within the framework of the reorganization process, the Board of Directors has approved the exchange ratio, which has been established at 1.40 IRSA shares for each IRSA CP share, which is equivalent to 0.56 IRSA GDS for each ADS of IRSA CP. For more information see “—Recent Developments—Merger Proposal”.

In May 2021, we increased our capital through a public offering of shares for up to 80 million shares (or its equivalent 8 million GDS) and 80,000,000 warrants to subscribe for new common shares a rights offering. All of the shares offered were subscribed domestically and internationally.

Shopping Malls (through our subsidiary IRSA CP)

We are engaged in the acquisition, development and management of Shopping Malls through our subsidiary IRSA CP and its subsidiaries.

Since 1996, we have expanded our real estate activities in the shopping mall segment, through the acquisition and development of shopping malls.

As of June 30, 2021, through our subsidiary IRSA CP, we own 15 shopping malls in Argentina: Alto Palermo, Abasto Shopping, Alto Avellaneda, Alcorta Shopping, Patio Bullrich, Dot Baires Shopping, Soleil Premium Outlet, Distrito Arcos, Alto NOA Shopping, Alto Rosario Shopping, Mendoza Plaza Shopping, Córdoba Shopping Villa Cabrera, La Ribera Shopping, Alto Comahue Sopping and Patio Olmos (operated by a third party), totaling 334,826 sqm.

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Offices (through our subsidiary IRSA CP)

We own, develop and manage office buildings throughout Argentina, directly and indirectly through our subsidiary IRSA CP.

During 2005, attractive prospects in office business led us to make an important investment in this segment by acquiring Bouchard 710 building in fiscal year 2005, covering 15,014 sqm of rentable premium space. On July 30, 2020, our subsidiary IRSA CP sold an unrelated third party of the entire building, located at Plaza Roma, in the City of Buenos Aires, for a total amount of USD 87.2 million approximately.

During 2007, we made several significant acquisitions in the Offices segment. We purchased Bouchard Plaza building, also known as “Edificio La Nación,” located in the downtown of the City of Buenos Aires, and during 2015, we completed the sale of all of the floors in Edificio La Nación. In 2007, we also bought Dock del Plata building with a gross leasable area of 7,921 sqm, located in the exclusive area of Puerto Madero, already sold in its entirety, in December 2015. In addition, we acquired a 50% interest in an office building including current leases with a gross leasable area of 31,670 sqm, known as Torre Bank Boston, which is located in Buenos Aires, and was designed by the recognized architect Cesar Pelli (who also designed the World Financial Center in New York and the Petronas Towers in Kuala Lumpur).

In 2007, through Panamerican Mall S.A., subsidiary of IRSA CP, we started the construction of one of our most important projects called “Polo Dot,” a Shopping Mall, an Office Building and different plots of land to develop three additional office buildings (one of them may include a hotel). This project is located in Saavedra neighborhood, at the intersection of Avenida General Paz and the Panamerican Highway. First, the Shopping Mall Dot Baires was developed and opened on May, 2009 and then the Office Building was opened in July 2010, which meant our landing on the growing corridor of rental offices located in the North Zone of Buenos Aires. In addition, on June 5, 2017, the Company through IRSA CP, reported the acquisition of the historic Philips Building, adjacent to the Dot Baires Shopping Mall, located in Saavedra neighborhood in the City of Buenos Aires. It has 4 office floors, a total gross leasable area of approximately 7,755 sqm which has a remaining construction capacity of approximately 20,000 sqm. Likewise, through PAMSA, we developed the Zetta building, A+ and potentially LEED building, which was inaugurated on May, 2019, it has 11 office floors with a profitable area of 32,173 sqm, fully leased at the opening date.

In April 2008, we acquired one of the most emblematic building in the City of Buenos Aires, known as “Edificio República.” This property, also designed by the architect César Pelli, is a premium office building in the downtown area of the City of Buenos Aires, which added approximately 19,885 gross leasable sqm to our portfolio.

On December 22, 2014, we transferred to our subsidiary IRSA CP, 83,789 sqm of five buildings of our premium office portfolio and a reserve of land. The premium office buildings transferred included Edificio República, Torre Bank Boston, Edificio Intercontinental Plaza, Edificio Bouchard 710 and Edificio Suipacha and the land reserve “Intercontinental II” with the potential to develop up to 19,600 sqm, each located in the City of Buenos Aires. The acquisition was carried out as part of our strategy to expand our business of developing and operating commercial properties in Argentina and to create a unique and unified portfolio of rental properties consisting of the best office buildings in the City of Buenos Aires and the best shopping malls in Argentina. The total value of the transaction was USD 308.0 million, based on third party appraisals.

Likewise, we concluded the construction of Catalinas Building and on April 29, 2021, the Company inaugurated its newest office development in Buenos Aires, named “200 Della Paolera”, that was operative since December 2020, which is a AAA office building located in Catalinas, one of the most premium corporate areas in Argentina. This building of 30 floors has a total GLA of 35,000 sqm, 318 parking spaces, services and amenities. The Company owns 27,530 sqm. Potentially LEED, equipped with the latest technology and designed to promote an agile and collaborative working environment, this modern building will become an emblematic icon of the city.

As of June 30, 2021, we own 7 premium office buildings of rental office property totaling 113,291 square meters of gross leasable.

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On September 30, 2021, we informed that the Company’s Board of Directors has approved the beginning of the corporate reorganization process, by which IRSA, acting as the absorbing company, will merge by absorption with IRSA CP, as the absorbed company. For more information see “—Recent Developments—Merger Proposal”.

Sales and developments

Since 1996, we have also expanded our operations to the residential real estate market through the development and construction of apartment tower complexes in the City of Buenos Aires and through the development of private residential communities in the greater Buenos Aires.

We own an important 70-hectare property facing the Río de la Plata in the south of Puerto Madero, 10 minutes from downtown Buenos Aires, called “Solares de Santa María.” After more than 20 years since we acquired the property, the City of Buenos Aires Congress approved in first reading the development of the “Costa Urbana” A second and final approval is required to allow the development of the land. We are owners of this property in which we aim to develop a mixed used project, i.e. our development project involves residential complexes as well as offices, stores, hotels, sports, services areas with schools, supermarkets and parking spaces. For more information regarding the status see “B. Business Overview - Sale and Development of Properties and Land Reserves - Mixed uses – Solares de Santa María – City of Buenos Aires.”

In March 2011, we bought the Nobleza Piccardo warehouse, through a subsidiary in which we have a 50% stake. This property is located in the city of San Martín, Province of Buenos Aires, and due to its size and location represents an excellent venue for the future development of different segments. The total plot area is 160,000 sqm. The master plan was carried out by the prestigious Gehl Studio (Denmark), generating a modern concept of a new urban district which is being carried out to a preliminary project / project phase through the Mc Cormack Architecture Studio and Associates and internal and external teams.

We are currently developing the project called “Polo Dot,” through PAMSA, subsidiary of IRSA CP, located in the commercial complex adjoining to Dot Baires Shopping Mall. The project will consist of three office buildings (one of them may include a hotel and recently opened Zetta building) on land reserves we own through IRSA CP and the expansion of Dot Baires Shopping by approximately 15,000 sqm of gross leasable area. In the first phase, we developed the Zetta building which was inaugurated on May 2019. The second stage of the project consists of two office/ hotel buildings that will add 38,400 sqm of GLA to the complex. We have noticed an important demand for premium office spaces in this new commercial center and we are confident that we will be able to generate a quality enterprise similar to the ones that the company has done in the past with attractive income levels and high occupancy.

On March 22, 2018, we acquired through IRSA CP, directly and indirectly, 100% of a land of approximately 78,000 sqm of surface located, in La Plata, Province of Buenos Aires. The objective of this acquisition is to develop a mix uses project given that the land offers location and scale adequate characteristics for the commercial development in a place of great potential.

Hotels

In 1997, we entered the hotel market through the acquisition of a 50% interest in the Llao Llao Hotel in Bariloche Province of Rio Negro and 76.3% in the Intercontinental Hotel in the City of Buenos Aires. In 1998, we also acquired Libertador Hotel in the City of Buenos Aires and subsequently sold a 20% interest in it to an affiliate of Sheraton Hotels, and during the fiscal year 2019, we acquired the interest of 20% and reaching 100% of the capital of Hoteles Argentinos S.A.U and beginning to operate the hotel directly under the name “Libertador.”

International

In July 2008, we decided to expand internationally into the United States, taking advantage of certain investment opportunities generated after the global financial crisis. We acquired a 49% interest in Metropolitan 885 3rd Ave (“Metropolitan”), whose main asset is a 34-story building with 59,000 sqm of gross leasable area named Lipstick Building, located at 885 Third Avenue, New York. On August 7, 2020, as a consequence of negotiations conducted in the context of an increased lease price effective as of May 2020, Metropolitan signed an agreement with the owner of the Ground Lease to terminate the commercial relationship, leaving the administration of the building. For this reason, as of June 30, 2020, Metropolitan no longer recognizes the liability associated with the ground lease, as well as all the assets and liabilities associated with the building and the operation of the administration.

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In March 2012, we entered into an agreement with Supertel Hospitality Inc. whereby we invested approximately USD 20 million. In 1994, Supertel Hospitality Inc completed its initial public offering, and in 2015 changed its name to “Condor Hospitality Trust” (“Condor”). Condor is a REIT listed in Nasdaq focused on medium-class hotels located in various states of the United States of America, managed by various operators and franchises. As of June 30, 2021, we hold an 21.7% interest and voting rights in Condor. For more information see “Business Overview—International—Investment in Condor Hospitality Trust”.

Others

Over the years, we have acquired 29.91% of Banco Hipotecario. Banco Hipotecario has historically been Argentina’s leading mortgage lender, provider of mortgage-related insurance and mortgage loan services.

Significant acquisitions, dispositions and development of business

The following is a description of the most significant events in terms of acquisitions, dispositions, real estate barter transactions and other transactions which occurred during the years ended June 30, 2021, 2020, and 2019:

Acquisitions

Acquisition of Hudson Property

On December 11, 2020, IRSA CP completed the acquisition of a property called “Casonas” located in Hudson, Berazategui, Buenos Aires for a total consideration of USD 1 million. Of this total consideration, IRSA CP paid USD 900,000 since we had already paid the 10% during the fiscal year ended June 30, 2018.

We are Appa S.A. - Share capital increase

As of June 30, 2020, IRSA CP’s capital stock was represented by 116,500 ordinary shares, each entitled to one vote and with a par value of ARS 1 per share.

On April 19, 2021, our shareholders held an Ordinary and Extraordinary General Meeting and capitalized all our share premium and inflation adjustment of share capital. In that meeting, our shareholders also approved and capitalized new irrevocable contributions.

As a result of both capitalizations, we issued 517,722,151, each entitled to 1 vote and with a par value of ARS 1 per share. Our capital stock now totals 517,838,651, as per detail as follows:

|  | Number of shares |  |  | Share capital |
June 30, 2020 |  |  | 116,500 |  |  |  | 116,500 |
Capitalization of share premium and inflation adjustment of share capital |  |  | 137,722,151 |  |  |  | 137,722,151 |
Issuance of ordinary shares |  |  | 380,000,000 |  |  |  | 380,000,000 |
June 30, 2021 |  |  | 517,838,651 |  |  |  | 517,838,651 |

Dispositions

Sale of Boston Tower building

During the fiscal year ended on June, 30, 2021, our subsidiary, IRSA CP completed the sale of several units from the Boston Tower Building located at 265 Della Paolera (Catalinas District, Autonomous City of Buenos Aires). Below, we list the details of the units that IRSA CP sold:

On July 15, 2020, IRSA CP completed the sale with possession of a medium-height floor for a total area of approximately 1,063 square meters and 5 parking spaces located in the building. The total consideration of the transaction was ARS 666 million.

On August 25, 2020, IRSA CP completed the sale of other 5 floors for a gross rental area of approximately 6,235 square meters and 25 parking spaces located in the building. The total consideration of the transaction was ARS 3,574 million.

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On November 5, 2020, IRSA CP completed the sale with possession of 4 floors for a gross rental area of approximately 3,892 square meters and 15 parking spaces located in the building. The total consideration of the transaction was ARS 2,271 million.

On November 12, 2020, IRSA CP completed the sale with possession with an unrelated third party of 3 floors for a gross rental area of approximately 3,266 square meters, a commercial space located on the ground floor of approximately 225 square meters, and 15 parking spaces located in the building. The total consideration of the transaction was ARS 1,906 million.

Sale of Bouchard building

On July 30, 2020, IRSA CP completed the sale to an unrelated third party of the entire “Bouchard 710” building, located in the Plaza Roma District of the Autonomous City of Buenos Aires. The tower consists of 15,014 sqm of gross rental area on 12 office floors and 116 parking spaces. The total consideration of the transaction was ARS 8,791 million.

Lipstick Building, New York, United States

On August 7, 2020, due to Ground Lease Building’s low profitability resulting from the expensive price for rental of the land, we executed an agreement with the owner of the Ground Lease Building through which we terminated our legal relationship and discharged our duties as administrators of the building. Consequently, as of June 30, 2020, we are neither responsible for the Metropolitan’s liabilities associated with the Ground Lease, nor the assets and liabilities associated with the building and its administration. We also made an agreement with the owner of the Ground Lease Building that states that Metropolitan is completely released from responsibilities, except for (i) claims for liabilities prior to June 1, 2020 from people who have performed work or provided services in the Ground Lease Building or to Metropolitan; and (ii) claims from people who have had an accident on the property dated before August 7, 2020. This situation impacted our Consolidated Financial Statements as of June 30, 2020.

Investment in Condor Hospitality Trust

On July 19, 2019, Condor completed into a merger agreement with Nextpoint Hospitality Trust (“NHT”). The acquisition’s closing, originally scheduled for March 23, 2020, did not occur.

On October 14, 2020, Condor executed an agreement with NHT to resolve each and every claim between them arising from the aforementioned merger agreement. Pursuant to this agreement, Condor collected a compensation which totalled USD 7.0 million.

On June 29, 2021, one of our subsidiaries exercised a put right through which our subsidary’s Class E preferred shares in Condor plus the unpaid accrued dividends as of June 30, 2021, were converted into common shares, which were issued on July 29, 2021.

On September 23, 2021, Condor Hospitality Trust, Inc. announced an agreement with affiliates of Blackstone Real Estate Partners to sell its entire portfolio of hotels in a USD 305 million transaction. This is an all cash transaction without the assumption of any existing debt. Completion of the transaction, which is expected to occur in the fourth quarter of 2021, is subject to customary closing conditions, including the approval of Condor shareholders.

Condor also announced that its Board of Directors has unanimously adopted a Plan of Liquidation and Dissolution (the “Plan of Liquidation”). The Plan of Liquidation contemplates an orderly wind down of Condor business affairs. Following the closing of the sale of the hotel portfolio and the payment of outstanding liabilities, along with the taking of other actions specified in the Plan of Liquidation, including reserving for certain contingent liabilities and claims, Condor intends to distribute certain net proceeds from the sale of the hotel portfolio to its shareholders in one or more liquidating distribution installments. The implementation of the Plan of Liquidation is conditioned on obtaining approval of Condor’s shareholders.

As of the date of submission of this form, we directly and indirectly own 3,194,214 common shares, which represent 21.7% of the capital stock of Condor.

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Loss of control of IDBD

As described in Note 1 to our Audited Consolidated Financial Statement as of June 30, 2020, on late September 2020, we lost control of IDBD and thus, deconsolidated the related assets and liabilities and reclassified income statement and cash flow data into discontinued operations.

The following table details the net assets disposed off:

|  | 09.30.2020 |
|  | Millions of ARS |
ASSETS |  |  |
Investment properties |  |  | 117,547 |
Property, plant and equipment |  |  | 47,989 |
Trading properties |  |  | 7,690 |
Intangible assets |  |  | 36,546 |
Right-of-use assets |  |  | 25,853 |
Investments in associates and joint ventures |  |  | 48,443 |
Deferred income tax assets |  |  | 568 |
Income tax credit |  |  | 426 |
Restricted assets |  |  | 8,400 |
Trade and other receivables |  |  | 70,693 |
Investments in financial assets |  |  | 31,643 |
Derivative financial instruments |  |  | 368 |
Inventories |  |  | 4,712 |
Group of assets held for sale |  |  | 55,028 |
Cash and cash equivalents |  |  | 145,330 |
TOTAL ASSETS |  |  | 601,236 |
Borrowings |  |  | 425,321 |
Lease liabilities |  |  | 23,696 |
Deferred income tax liabilities |  |  | 16,261 |
Trade and other payables |  |  | 30,751 |
Income tax liabilities |  |  | 596 |
Provisions |  |  | 7,095 |
Employee benefits |  |  | 624 |
Derivative financial instruments |  |  | 624 |
Salaries and social security liabilities |  |  | 4,427 |
Group of liabilities held for sale |  |  | 28,805 |
TOTAL LIABILITIES |  |  | 538,200 |
TOTAL NET ASSETS |  |  | 63,036 |
Non-controlling interest |  |  | (62,519 | )
Result for loss of control |  |  | (517 | )
Recycling of currency translation adjustment and other reserves |  |  | (3,505 | )
Total result for loss of control (*) |  |  | (4,022 | )

___________

(*) Included within discontinued operations.

Distribution of dividends in kind

On October 26, 2020, our shareholders held an Ordinary and Extraordinary ‘Meeting and approved an in kind dividend distribution equivalent to ARS 484 million (representative of ARS 0.84 per share) and payable in shares of IRSA CP. Our shareholders decided to consider IRCP’s ‘quoted price per share as of October 23, 2020, which resulted amounted ARS 320 per share. Pursuant to that shareholders’ decision, we distributed 1,512,500 ordinary shares of IRSA CP. We reflected this transaction on our financial statements as a change in equity, which generated a reduction of the equity attributable to the controlling shareholders totalling ARS 725 million restated for inflation as of June 30, 2021. On the date of this form, our interest in IRSA CP amounts to 79.92%.

Manibil Sale

On December 22, 2020, we completed the sale of all our holdings in Manibil S.A., a company engaged in the real estate business. Those holdings amounted 217,332,873 ordinary Class B, nominative not endorsable shares, each entitled to 1 vote and with a par value of ARS 1 per share. The shares totalled the 49% of Manibil S.A.’s capital stock. As consideration for this operation, on February 2021, we acquired the right to receive future 953 square meters units located in different residential developments. This operation represents an ARS 37 million gain, as disclosed on our financial statements within the “Other operating results, net” category.

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Recent Developments:

Issuance of Series No XIII Notes

On August 26, 2021, we successfully issued the Series XIII Notes for USD 58,124,596. We issued the Notes at the 100% of their face value. The Notes bear an annual interest rate of 3.90%, payable on a semmiannual basis, and will mature on August 26, 2024.

Fitch Ratings update

On July 26, 2021, we announced that FIX SCR S.A., raised our notes’ rating’, detailed below:

- Issuer Rating: AA (Arg)

- Series Notes I for up to USD 350 MM due March 2023: AA (Arg)

- Series Notes V for USD 5 MM due May 2022: AA (Arg)

- Series Notes VII for up to USD 10 MM due January 2022: AA (Arg)

- Series Notes VIII for up to USD 108.9 MM due November 2023: AA (Arg)

- Series Notes IX for up to USD 108.9 MM (expandable up to USD 181.5 MM) due March 2023: AA (Arg)

- Series Notes X for the peso equivalent of USD 5 MM due March 2022: A1+ (Arg)

- Series Notes XI for USD 5 MM due March 2024: AA (Arg)

- Series Notes XII in UVAs for the equivalent of USD 5 MM due March 2024: AA (Arg)

Shareholders’ Meeting

On September 17, 2021, we informed that our Board of Directors has resolved to call a General Ordinary Shareholders’ Meeting to be held on October 21, 2021, with the following agenda: (1) Appointment of two shareholders to sign the meetings’ minutes; (2) Consideration of documents contemplated in paragraph 1, Section 234, Law No. 19,550 for the fiscal year ended June 30, 2021; (3) Allocation of net loss for the fiscal year ended June 30, 2021 for ARS 28,764,613,112; (4) Consideration of Board of Directors’ performance for the fiscal year ended June 30, 2021; (5) Consideration of Supervisory Committee’s performance for the fiscal year ended June 30, 2021; (6) Consideration of compensation payable to the Board of Directors (ARS 100,108,900, allocated sum) for the fiscal year ended June 30, 2021, which recorded a computable tax loss pursuant to the rules of the Argentine Securities Commission; (7) Consideration of compensation payable to the Supervisory Committee (ARS 2,390,000, allocated sum) for the fiscal year ended June 30, 2021; (8) Determination of number and appointment of regular directors and alternate directors for a term of three fiscal years; (9) Appointment of regular and alternate members of the Supervisory Committee for a term of one fiscal year; (10) Appointment of certifying accountant for the next fiscal year; (11) Approval of compensation payable to certifying accountant for the fiscal year ended June 30, 2021; and (12) Authorization to carry out registration proceedings relating to this shareholders’ meeting before the Argentine Securities Commission and the general superintendence of corporations.

Merger Proposal

On September 30, 2021, we informed that the Company’s Board of Directors has approved the beginning of the corporate reorganization process in the terms of article 82 and sbqs. of the General Law of Companies No. 19,550, the Income Tax Law No. 20,628, amendments, and regulations, CNV’s Rules and the Listing Regulations of BYMA, by which IRSA, acting as the absorbing company, will merge by absorption with IRSA CP, as the absorbed company. In this regard, the Board of Directors has approved: (i) the special-purpose separate merger financial statements as of June 30, 2021; (ii) the special-purpose consolidated merger financial statements as of June 30, 2021; (iii) the subscription of the Prior Merger Agreement between both companies and (iv) establish the effective date of reorganization on July 1, 2021.

The merger is subject to the approval of the shareholders’ meeting of both companies, which will be held once both companies have the administrative approval of the United States Securities and Exchange Commission, an entity to which they are subject because both companies’ shares are listed in markets that operate in said jurisdiction.

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Likewise, and within the framework of the reorganization process, the Board of Directors has approved the exchange ratio, which has been established at 1.40 IRSA shares for each IRSA CP share, which is equivalent to 0.56 IRSA GDS for each ADS of IRSA CP.

On September 30, 2021, we informed that the calculation of the exchange ratio has been based on the market value analysis and on the net assets value and that the ratio of 1.40 corresponds to the volume-weighted average price of the shares over the last 180 days (VWAP).

Likewise, the exchange ratio is supported by two fairness opinions issued by Banco Santander Argentina S.A., in the case of IRSA and Banco Itaú Argentina S.A., in the case of IRSA CP, which have been submitted for consideration by the Audit Committees of both companies, with a favorable opinion in this regard.

Exercise of Warrants

October 7, 2021, we informed that between September 17 and 25, 2021, certain warrants holders have exercised their right to acquire additional shares. Therefore, a total of 30,741 ordinary shares of the Company will be registered, with a face value of ARS 1. As a result of the aforementioned exercise, USD 13,280.11 were collected by the Company.

After the exercise of these warrants, the number of shares and the capital stock of the Company increased from 658,676,460 to 658,707,201, and the new number of outstanding warrants decreased from 80,000,000 to 79,969,259.

Likewise, the exercise of the warrants has been carried out in accordance with the terms and conditions established in the issuance prospectus dated April 12, 2021, and complementary notices regarding the offer made by the Company of 80,000,000 ordinary book-entry shares and 80,000,000 options to subscribe ordinary shares (warrants).

IRSA CP Recent Developments

Stock market capitalization, changes in Face Value and distribution of released shares

On July 6, 2021, IRSA CP announced to its shareholders that as of July 19, 2021, was effected simultaneously the distribution of shares and the change in face value, where it was proceeded to make the exchange of 126,014,050 ordinary shares of nominal value ARS 1.00 each and one vote per share, for the amount of 541,230,019 ordinary shares of nominal value ARS 100 each and one vote per share. From the date indicated, the new shares distributed by the capitalization described have economic rights on equal terms with those currently in circulation. The share capital of IRSA CP after the operations indicated amounts to the sum of ARS 54,123,001,900 represented by 541,230,019 ordinary shares of nominal value ARS 100 each and one vote per share.

Fitch Ratings update

On July 26, 2021, IRSA CP announced that FIX SCR S.A., raised the rating of the Company’s notes as detailed below:

- Issuer Rating: AA(arg)

- Series Notes 2 for up to USD 470 MM due March 2023: AA(arg)

Shareholders’ Meeting

On September 17, 2021, IRSA CP informed that its Board of Directors has resolved to call a General Ordinary Shareholders’ Meeting to be held on October 21, 2021, with the following agenda: (1) Appointment of two shareholders to sign the meetings’ minutes.; (2) Consideration of documents contemplated in paragraph 1, Section 234, Law No. 19,550 for the fiscal year ended June 30, 2021; (3) Allocation of net loss for the fiscal year ended June 30, 2021 for ARS 21,934,960,229; (4) Consideration of Board of Directors’ performance for the Fiscal Year ended June 30, 2021; (5) Consideration of Supervisory Committee’s performance for the fiscal year ended June 30, 2021; (6) Consideration of compensation payable to the Board of Directors (ARS 723,942,334 - allocated sum) for the fiscal year ended June 30, 2021, which recorded a computable tax loss pursuant to the rules of the Argentine Securities Commission; (7) Consideration of compensation payable to the Supervisory Committee (ARS 2,390,000, allocated sum) for the fiscal year ended June 30, 2021; (8) Determination of number and appointment of regular directors and alternate directors for a term of three fiscal years; (9) Appointment of regular and alternate members of the Supervisory Committee for a term of one fiscal year; (10) Appointment of certifying accountant for the next fiscal year; (11) Approval of compensation payable to certifying accountant for the fiscal year ended June 30, 2021; and (12) Authorization to carry out registration proceedings relating to this shareholders’ meeting before the argentine securities commission and the general superintendence of corporations.

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Merger Proposal

On September 30, 2021, IRSA CP informed that its Board of Directors has approved the beginning of the corporate reorganization process in the terms of article 82 and sbqs. of the General Law of Companies No. 19,550, the Income Tax Law No. 20,628, amendments and regulations, CNV’s Rules and the Listing Regulations of BYMA, by which IRSA, acting as the absorbing company, will merge by absorption with IRSA CP, as the absorbed company. In this regard, the Board of Directors has approved: (i) the special-purpose separate merger financial statements as of June 30, 2021; (ii) the special-purpose consolidated merger financial statements as of June 30, 2021; (iii) the subscription of the Prior Merger Agreement between both companies and (iv) establish the effective date of reorganization on July 1, 2021.

The merger is subject to the approval of the shareholders’ meeting of both companies, which will be held once both companies have the administrative approval of the United States Securities and Exchange Commission, an entity to which they are subject because both companies’ shares are listed in markets that operate in said jurisdiction.

Likewise, and within the framework of the reorganization process, the Board of Directors has approved the exchange ratio, which has been established at 1.40 IRSA shares for each IRSA CP share, which is equivalent to 0.56 IRSA GDS for each ADS of IRSA CP.

On September 30, 2021, IRSA CP informed that the calculation of the exchange ratio has been based on the market value analysis and on the net assets value and that the ratio of 1.40 corresponds to the volume-weighted average price of the shares over the last 180 days (VWAP).

Likewise, the exchange ratio is supported by two fairness opinions issued by Banco Santander Argentina S.A., in the case of IRSA and Banco Itaú Argentina S.A., in the case of IRSA CP, which have been submitted for consideration by the Audit Committees of both companies, with a favorable opinion in this regard.

B. Business Overview

Founded in 1943, IRSA Inversiones y Representaciones Sociedad Anónima is one of Argentina’s leading real estate companies and the only Argentine real estate company whose shares are listed both on BYMA and on the NYSE.

We are engaged, directly and indirectly through subsidiaries and joint ventures, in a range of diversified activities, primarily in real estate, including:

i. the acquisition, development and operation of shopping malls,

ii. the acquisition and development of office buildings and other non-shopping mall properties primarily for rental purposes,

iii. the development and sale of residential properties,

iv. the acquisition and operation of luxury hotels,

v. the acquisition of undeveloped land reserves for future development or sale, and

vi. selective investments outside Argentina.

We operate our business in Argentina through seven segments, namely “Shopping Malls,” “Offices” “Sales and Developments,” “Hotels,” “International” and “Corporate” and “Others” as further described below:

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Our “Shopping Malls” segment includes the operating results from our portfolio of shopping malls principally comprised of lease and service revenue from tenants. Our Shopping Malls segment had assets of ARS 54,665 million and ARS 74,176 million as of June 30, 2021 and 2020, respectively, representing 26.7% and 31.2% of our operating assets at such dates, respectively. Our Shopping Malls segment generated operating loss of ARS 17,895 million and an operating income of ARS 2,617 million for the fiscal years ended June 30, 2021 and 2020, respectively.

Our “Offices” segment includes the operating results from lease revenue of offices, other rental spaces and other service revenue related to the office activities. Our Offices segment had assets of ARS 78,250 million and ARS 94,635 million as of June 30, 2021 and 2020, respectively, representing and 38.2% and 39.8% of our operating assets at such dates, respectively. Our Offices segment generated an operating income of ARS 7,340 million and an operating income of ARS 37,812 million for the fiscal years ended June 30, 2021 and 2020, respectively.

Our “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. Our Sales and Developments segment had assets of ARS 57,891 million and ARS 50,251 million as of June 30, 2021 and 2020, respectively, representing 28.3% and 21.1% of our operating assets. Our Sales and Developments segment generated an operating income of ARS 5,342 million and ARS 17,710 million for the financial years ended June 30, 2021 and 2020, respectively.

Our “Hotels” segment includes the operating results of our hotels mainly comprised of room, catering and restaurant revenue. Our Hotels segment had assets of ARS 2,603 million and ARS 2,759 million as of June 30, 2021 and 2020, respectively, representing 1.3% and 1.2% of our operating assets, respectively. Our Hotels segment generated an operating loss of ARS 723 million and an operating income of ARS 243 million for the fiscal years ended June 30, 2021 and 2021, respectively.

Our “International” segment includes investments that mainly operate in the United States in relation to the lease of office buildings and hotels in that country. We intend to continue evaluating investment opportunities outside Argentina as long as they are attractive investment and development options. Our International segment had assets of ARS 2,030 million and ARS 3,471 million as of June 30, 2021 and 2020, respectively. Our International segment generated operating loss of ARS 29 million and ARS 166 million for the fiscal years ended June 30, 2021 and 2020, respectively.

“Corporate” segment. Since fiscal year 2018, we have decided to disclose certain corporate expenses related to the holding structure in a separate “Corporate” segment. This segment generated a loss of ARS 352 million and ARS 562 million for the fiscal years ended June 30, 2021 and 2020, respectively.

Our “Others” Segment includes the entertainment activities through La Arena and La Rural S.A. and the financial activities carried out by Banco Hipotecario for both. Our “Others” segment had assets of ARS 9,436 million and ARS 12,419 million as of June 30, 2021 and 2020, respectively, representing 4.6% and 5.2% of our, respectively. Our Others segment generated an operating income of ARS 581 million and of ARS 832 million for the fiscal years ended June 30, 2021 and 2020, respectively.

Overview

Shopping Malls

As of June 30, 2021, IRSA CP owned a majority interest in and operated, a portfolio of 15 shopping malls in Argentina, six of which are located in the City of Buenos Aires (Abasto, Alcorta Shopping, Alto Palermo Shopping, Patio Bullrich, Dot Baires Shopping and Distrito Arcos), two are located in the greater Buenos Aires area (Alto Avellaneda and Soleil Premium Outlet), and the rest are located in different provinces of Argentina (Alto Noa in the City of Salta, Alto Rosario in the City of Rosario, Mendoza Plaza in the City of Mendoza, Córdoba Shopping Villa Cabrera and Patio Olmos (operated by a third party) in the City of Córdoba, La Ribera Shopping in Santa Fe (through a joint venture) and Alto Comahue in the City of Neuquén).

The shopping malls we operate comprise a total of 334,826 square meters of GLA (excluding certain spaces occupied by hypermarkets which are not our tenants). Total tenant sales in our shopping malls, as reported by retailers, were ARS 75,795 million for fiscal year 2021 and ARS 105,043 million for fiscal year 2020, a decrease of 27.8% in real terms compared to the previous fiscal year (+8.3% in nominal terms). The tenants’ sales of our shopping malls are relevant to our income and profitability because they are one of the factors that determine the amount of rent that we can collect from them. They also affect the overall occupancy costs of tenants as a percentage of their sales.

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The following table shows certain information about IRSA CP’s shopping malls as of June 30, 2021:

Shopping malls |  | Date of acquisition/ development |  | Location |  | GLA (sqm) (1) |  |  | Number of stores |  |  | Occupancy rate (%) (2) |  |  | Our ownership interest (%) (3) |  |  | Rental revenue (in millions of ARS) |
Alto Palermo |  | Dec-97 |  | City of Buenos Aires |  |  | 20,045 |  |  |  | 132 |  |  |  | 98.4 |  |  |  | 100.0 |  |  |  | 790 |
Abasto Shopping (4) |  | Nov-99 |  | City of Buenos Aires |  |  | 36,796 |  |  |  | 162 |  |  |  | 99.7 |  |  |  | 100.0 |  |  |  | 567 |
Alto Avellaneda |  | Dec-97 |  | Buenos Aires Province |  |  | 39,838 |  |  |  | 126 |  |  |  | 64.8 |  |  |  | 100.0 |  |  |  | 461 |
Alcorta Shopping |  | Jun-97 |  | City of Buenos Aires |  |  | 15,812 |  |  |  | 112 |  |  |  | 90.6 |  |  |  | 100.0 |  |  |  | 483 |
Patio Bullrich |  | Oct-98 |  | City of Buenos Aires |  |  | 11,396 |  |  |  | 89 |  |  |  | 87.8 |  |  |  | 100.0 |  |  |  | 211 |
Dot Baires Shopping |  | May-09 |  | City of Buenos Aires |  |  | 47,493 |  |  |  | 164 |  |  |  | 80.7 |  |  |  | 80.0 |  |  |  | 445 |
Soleil Premium Outlet |  | Jul-10 |  | Buenos Aires Province |  |  | 15,158 |  |  |  | 78 |  |  |  | 90.3 |  |  |  | 100.0 |  |  |  | 248 |
Distrito Arcos |  | Dec-14 |  | City of Buenos Aires |  |  | 14,335 |  |  |  | 65 |  |  |  | 100.0 |  |  |  | 90.0 |  |  |  | 415 |
Alto Noa Shopping |  | Mar-95 |  | City of Salta |  |  | 19,314 |  |  |  | 84 |  |  |  | 98.1 |  |  |  | 100.0 |  |  |  | 241 |
Alto Rosario Shopping (4) |  | Nov-04 |  | City of Rosario |  |  | 33,731 |  |  |  | 138 |  |  |  | 95.4 |  |  |  | 100.0 |  |  |  | 735 |
Mendoza Plaza Shopping |  | Dec-94 |  | City of Mendoza |  |  | 43,312 |  |  |  | 129 |  |  |  | 97.3 |  |  |  | 100.0 |  |  |  | 386 |
Córdoba Shopping |  | Dec-06 |  | Córdoba |  |  | 15,361 |  |  |  | 104 |  |  |  | 91.4 |  |  |  | 100.0 |  |  |  | 235 |
La Ribera Shopping |  | Aug-11 |  | City of Santa Fé |  |  | 10,530 |  |  |  | 70 |  |  |  | 96.2 |  |  |  | 50.0 |  |  |  | 32 |
Alto Comahue |  | Mar-15 |  | City of Neuquén |  |  | 11,705 |  |  |  | 94 |  |  |  | 92.4 |  |  |  | 99.9 |  |  |  | 84 |
Patio Olmos (5) |  | Sep-07 |  | City of Córdoba |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  |  |  |  |  |  | 334,826 |  |  |  | 1,547 |  |  |  | 89.9 |  |  |  |  |  |  |  | 5,333 |

(1) | Corresponds to gross leasable area at each property. Excludes common areas and parking spaces.
(2) | Calculated dividing occupied square meters by leasable area as of the last day of the fiscal year.
(3) | Company’s effective interest in each of its business units.
(4) | Excludes Museo de los Niños which represents 3,732 square meters in Abasto
(5) | IRSA CP owns the historic building of the Patio Olmos shopping mall in the Province of Córdoba, operated by a third party and does not include the rental revenue of Patio Olmos, for more details see “Our Shopping Malls-Overview.”

Rental income

The following table sets forth total rental income for each of IRSA CP’s shopping malls for the fiscal years indicated:

|  | For the fiscal years ended June 30, (1) |
|  | 2021 |  |  | 2020 |  |  | 2019 |
|  | (in millions of ARS) |
Alto Palermo |  |  | 790 |  |  |  | 1,497 |  |  |  | 2,115 |
Abasto Shopping |  |  | 567 |  |  |  | 1,283 |  |  |  | 1,971 |
Alto Avellaneda |  |  | 461 |  |  |  | 902 |  |  |  | 1,416 |
Alcorta Shopping |  |  | 483 |  |  |  | 799 |  |  |  | 1,040 |
Patio Bullrich |  |  | 211 |  |  |  | 462 |  |  |  | 606 |
Dot Baires Shopping |  |  | 445 |  |  |  | 981 |  |  |  | 1,669 |
Soleil Premium Outlet |  |  | 248 |  |  |  | 372 |  |  |  | 551 |
Distrito Arcos |  |  | 415 |  |  |  | 690 |  |  |  | 949 |
Alto Noa Shopping |  |  | 241 |  |  |  | 277 |  |  |  | 372 |
Alto Rosario Shopping |  |  | 735 |  |  |  | 781 |  |  |  | 1,025 |
Mendoza Plaza Shopping |  |  | 386 |  |  |  | 443 |  |  |  | 615 |
Córdoba Shopping Villa Cabrera |  |  | 235 |  |  |  | 266 |  |  |  | 370 |
La Ribera Shopping (2) |  |  | 32 |  |  |  | 88 |  |  |  | 131 |
Alto Comahue |  |  | 84 |  |  |  | 566 |  |  |  | 629 |
Subtotal |  |  | 5,333 |  |  |  | 9,407 |  |  |  | 13,459 |
Patio Olmos (3) |  |  | 9 |  |  |  | 10 |  |  |  | 15 |
Reconciliation adjustments (4) |  |  | (21 | ) |  |  | (502 | ) |  |  | (646 | )
Total |  |  | 5,321 |  |  |  | 8,915 |  |  |  | 12,828 |

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(1) | Includes base rent, percentage rent, admission rights, fees, parking, commissions, revenue from non-traditional advertising and others. Does not include Patio Olmos.
(2) | Through our joint venture Nuevo Puerto Santa Fé S.A.
(3) | We own the historic building where the Patio Olmos shopping mall is located in the province of Cordoba. The property is managed by a third party.
(4) | Includes indirect incomes and eliminations between segments. In 2019, revenue from Buenos Aires Design are included. End of concession December 5, 2018.

The following table sets forth IRSA CP’s revenue from cumulative leases by revenue category for the fiscal years presented:

|  | For the fiscal year ended June 30, |
|  | 2021 |  |  | 2020 |  |  | 2019 |
|  | (in millions of ARS) |  |  |  |
Base rent |  |  | 2,461 |  |  |  | 4,699 |  |  |  | 7,180 |
Percentage rent |  |  | 1,443 |  |  |  | 2,209 |  |  |  | 2,672 |
Total rent |  |  | 3,904 |  |  |  | 6,908 |  |  |  | 9,852 |
Non-traditional advertising |  |  | 110 |  |  |  | 277 |  |  |  | 334 |
Revenue from admission rights |  |  | 788 |  |  |  | 1,356 |  |  |  | 1,578 |
Fees |  |  | 135 |  |  |  | 157 |  |  |  | 177 |
Parking |  |  | 37 |  |  |  | 445 |  |  |  | 711 |
Commissions |  |  | 180 |  |  |  | 233 |  |  |  | 482 |
Other |  |  | 179 |  |  |  | 31 |  |  |  | 325 |
Subtotal (1) |  |  | 5,333 |  |  |  | 9,407 |  |  |  | 13,459 |
Patio Olmos |  |  | 9 |  |  |  | 10 |  |  |  | 15 |
Adjustments and eliminations (2) |  |  | (21 | ) |  |  | (502 | ) |  |  | (646 | )
Total |  |  | 5,321 |  |  |  | 8,915 |  |  |  | 12,828 |

(1) | Does not include Patio Olmos.
(2) | Includes indirect incomes and eliminations between segments. In 2019, revenue from Buenos Aires Design are included. End of concession December 5, 2018.

Tenant retail sales

For the 2021 fiscal year, our shopping mall tenants’ sales reached ARS 75,795 million, a decrease of 27.8% in real terms compared to the previous fiscal year (+8.3% in nominal terms).

Tenant sales at the shopping malls located in the City of Buenos Aires and Greater Buenos Aires recorded year-on-year decreases of 39.5% in real terms (+4.7% in nominal terms), up from ARS 71,799 million to ARS 43,309 million during fiscal year 2021, whereas shopping malls in the interior of Argentina decreased approximately 2.5% in real terms (+44.4% in nominal terms) in comparison with the previous fiscal year, from ARS 33,244 million to ARS 32,386 million during fiscal year 2021.

The following table sets forth the total retail sales of IRSA CP’s shopping mall tenants for the fiscal years indicated:

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|  | For the fiscal years ended June 30, (1) |
|  | 2021 |  |  | 2020 |  |  | 2019 |
|  | (in millions of ARS) |
Alto Palermo |  |  | 7,299 |  |  |  | 12,822 |  |  |  | 17,401 |
Abasto Shopping |  |  | 6,354 |  |  |  | 13,039 |  |  |  | 18,455 |
Alto Avellaneda |  |  | 5,288 |  |  |  | 11,521 |  |  |  | 16,551 |
Alcorta Shopping |  |  | 5,546 |  |  |  | 7,645 |  |  |  | 9,816 |
Patio Bullrich |  |  | 3,571 |  |  |  | 5,200 |  |  |  | 6,448 |
Buenos Aires Design (2) |  |  | - |  |  |  | - |  |  |  | 844 |
Dot Baires Shopping |  |  | 4,866 |  |  |  | 10,242 |  |  |  | 14,143 |
Soleil Premium Outlet |  |  | 4,272 |  |  |  | 5,321 |  |  |  | 7,594 |
Distrito Arcos |  |  | 6,213 |  |  |  | 6,009 |  |  |  | 6,986 |
Alto Noa Shopping |  |  | 5,208 |  |  |  | 5,191 |  |  |  | 6,266 |
Alto Rosario Shopping |  |  | 11,092 |  |  |  | 10,853 |  |  |  | 13,948 |
Mendoza Plaza Shopping |  |  | 9,002 |  |  |  | 8,470 |  |  |  | 11,118 |
Córdoba Shopping Villa Cabrera |  |  | 3,694 |  |  |  | 3,343 |  |  |  | 4,550 |
La Ribera Shopping (3) |  |  | 1,368 |  |  |  | 2,215 |  |  |  | 3,255 |
Alto Comahue |  |  | 2,022 |  |  |  | 3,172 |  |  |  | 4,470 |
Total |  |  | 75,795 |  |  |  | 105,043 |  |  |  | 141,845 |

(1) | Retail sales based upon information provided to us by retailers and prior owners. The amounts shown reflect 100% of the retail sales of each shopping mall, although in certain cases we own less than 100% of such shopping malls. Includes sales from stands and excludes spaces used for special exhibitions.
(2) | End of concession term was December 5, 2018
(3) | Owned by Nuevo Puerto Santa Fé S.A., in which we are a joint venture partner.

Total sales by type of business

The following table sets forth the retail sales of IRSA CP’s shopping mall tenants by type of business for the fiscal years indicated:

|  | For the fiscal years ended June 30, (1) |
|  | 2021 |  |  | 2020 |  |  | 2019 |
|  | (in millions of ARS) |
Department Store |  |  | 1,839 |  |  |  | 5,594 |  |  |  | 7,677 |
Clothes and footwear |  |  | 43,424 |  |  |  | 57,474 |  |  |  | 78,818 |
Entertainment |  |  | 562 |  |  |  | 3,226 |  |  |  | 4,755 |
Home and decoration |  |  | 2,273 |  |  |  | 2,146 |  |  |  | 3,150 |
Home Appliances |  |  | 5,773 |  |  |  | 11,832 |  |  |  | 15,887 |
Restaurants |  |  | 12,100 |  |  |  | 14,975 |  |  |  | 17,781 |
Miscellaneous |  |  | 1,277 |  |  |  | 1,255 |  |  |  | 1,693 |
Services |  |  | 8,547 |  |  |  | 8,541 |  |  |  | 12,084 |
Total |  |  | 75,795 |  |  |  | 105,043 |  |  |  | 141,845 |

(1) | Includes sales from stands and excludes spaces used for special exhibitions.

Occupancy rate

The following table sets forth the occupancy rate of IRSA CP’s shopping malls expressed as a percentage of gross leasable area of each shopping mall for the fiscal years indicated:

|  | As of June 30, |
|  | 2021 |  |  | 2020 |  |  | 2019 |
|  | (%) |
Alto Palermo |  |  | 98.4 |  |  |  | 91.9 |  |  |  | 99.1 |
Abasto Shopping |  |  | 99.7 |  |  |  | 94.9 |  |  |  | 98.7 |
Alto Avellaneda |  |  | 64.8 |  |  |  | 97.4 |  |  |  | 98.6 |
Alcorta Shopping |  |  | 90.6 |  |  |  | 97.3 |  |  |  | 97.9 |
Patio Bullrich |  |  | 87.8 |  |  |  | 91.4 |  |  |  | 93.5 |
Dot Baires Shopping |  |  | 80.7 |  |  |  | 74.6 |  |  |  | 74.5 |
Soleil Premium Outlet |  |  | 90.3 |  |  |  | 97.1 |  |  |  | 99.0 |
Distrito Arcos |  |  | 100.0 |  |  |  | 93.8 |  |  |  | 99.4 |
Alto Noa Shopping |  |  | 98.1 |  |  |  | 99.0 |  |  |  | 99.5 |
Alto Rosario Shopping |  |  | 95.4 |  |  |  | 97.2 |  |  |  | 99.6 |
Mendoza Plaza Shopping |  |  | 97.3 |  |  |  | 97.8 |  |  |  | 97.3 |
Córdoba Shopping Villa Cabrera |  |  | 91.4 |  |  |  | 95.4 |  |  |  | 99.3 |
La Ribera Shopping |  |  | 96.2 |  |  |  | 99.0 |  |  |  | 94.6 |
Alto Comahue |  |  | 92.4 |  |  |  | 96.2 |  |  |  | 96.2 |
Total |  |  | 89.9 |  |  |  | 93.2 |  |  |  | 94.7 |

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Rental price

The following table shows the annual average rental price per square meter of our shopping malls for the fiscal years indicated:

|  | For the fiscal years ended June 30, (1) |
|  | 2021 |  |  | 2020 |  |  | 2019 |
|  | (in ARS) |
Alto Palermo |  |  | 26,459 |  |  |  | 53,374 |  |  |  | 77,593 |
Abasto Shopping |  |  | 10,357 |  |  |  | 24,293 |  |  |  | 37,828 |
Alto Avellaneda |  |  | 7,213 |  |  |  | 17,390 |  |  |  | 29,044 |
Alcorta Shopping |  |  | 23,278 |  |  |  | 34,192 |  |  |  | 45,934 |
Patio Bullrich |  |  | 12,884 |  |  |  | 26,815 |  |  |  | 35,199 |
Dot Baires Shopping |  |  | 4,642 |  |  |  | 13,482 |  |  |  | 19,990 |
Soleil Premium Outlet |  |  | 13,020 |  |  |  | 19,078 |  |  |  | 29,686 |
Distrito Arcos |  |  | 25,583 |  |  |  | 37,636 |  |  |  | 54,595 |
Alto Noa Shopping |  |  | 10,641 |  |  |  | 12,231 |  |  |  | 16,328 |
Alto Rosario Shopping |  |  | 17,627 |  |  |  | 18,054 |  |  |  | 24,675 |
Mendoza Plaza Shopping |  |  | 7,520 |  |  |  | 8,306 |  |  |  | 11,840 |
Córdoba Shopping Villa Cabrera |  |  | 12,857 |  |  |  | 13,605 |  |  |  | 19,631 |
La Ribera Shopping |  |  | 2,184 |  |  |  | 6,794 |  |  |  | 10,235 |
Alto Comahue |  |  | 5,113 |  |  |  | 46,012 |  |  |  | 44,410 |

(1) | Corresponds to consolidated annual accumulated rental prices according to the IFRS divided by gross leasable square meters. Does not include revenue from Patio Olmos. Fiscal year 2020 reflects the impact of closures of operations due to COVID-19. For more information, see “Item 5.A. Operating Results – The Ongoing COVID-19 Pandemic.

Lease expirations (1)(2)

The following table sets forth the schedule of estimated lease expirations for our shopping malls for leases in effect as of June 30, 2021, assuming that none of our tenants excercises its option to renew or terminate its lease prior to expiration:

|  | As of June 30, 2021 |
Agreements’ Expiration |  | Number of agreements (1) |  |  | Square meters to expire |  |  | Due to expire (%) |  |  | Total lease payments (in millions of ARS) (3) |  |  | Agreements (%) |
Vacant Stores |  |  | 116 |  |  |  | 33,682 |  |  |  | 10.1 |  |  |  | - |  |  |  | - |
Expired in-force |  |  | 441 |  |  |  | 80,503 |  |  |  | 24.0 |  |  |  | 923 |  |  |  | 29.2 |
As of June 30, 2022 |  |  | 387 |  |  |  | 49,952 |  |  |  | 14.9 |  |  |  | 863 |  |  |  | 27.3 |
As of June 30, 2023 |  |  | 262 |  |  |  | 43,834 |  |  |  | 13.1 |  |  |  | 582 |  |  |  | 18.4 |
As of June 30, 2024 |  |  | 202 |  |  |  | 32,465 |  |  |  | 9.7 |  |  |  | 327 |  |  |  | 10.4 |
As of June 30, 2025 and subsequent years |  |  | 139 |  |  |  | 94,390 |  |  |  | 28.2 |  |  |  | 464 |  |  |  | 14.7 |
Total (4) |  |  | 1,431 |  |  |  | 301,144 |  |  |  | 100 |  |  |  | 3,159 |  |  |  | 100 |

(1) | Includes vacant stores as of June 30, 2021. A lease may be associated with one or more stores.
(2) | Does not reflect our ownership interest in each property.
(3) | The amount expresses the annual base rent as of June 30, 2021 of agreements due to expire.
(4) | Does not include unoccupied stores.

Five largest tenants of the portfolio

The five largest tenants in our portfolio (in terms of sales) account for approximately 15.5% of our gross leasable area as of June 30, 2021 and represent approximately 17.2% of the annual basic rent for the fiscal year ending on that date.

The following table describes our portfolio’s five largest tenants:

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|  |  |  | Sales |  | Gross Leasable Area |  | Gross Leasable Area |
Tenant |  | Type of Business |  | (%) |  | (sqm) |  | (%) |
Zara |  | Clothes and footwear |  | 7.2 |  | 10,771 |  | 3.2 |
Nike |  | Clothes and footwear |  | 5.9 |  | 7,610 |  | 2.3 |
Fravega |  | Home appliances |  | 4.6 |  | 3,524 |  | 1.1 |
Falabella (1) |  | Department store |  | 2.3 |  | 28,892 |  | 8.6 |
Claro |  | Miscellaneous |  | 1.9 |  | 1,079 |  | 0.3 |
Total |  |  |  | 21.9 |  | 51,876 |  | 15.5 |

(1) | As at the date of presentation of this financial statements, Falabella is not operating in any shopping mall.

New leases and renewals

The following table shows certain information about IRSA CP’s leases agreement as of June 30, 2021:

|  | Number of |  |  | Annual base rent |  |  | Annual admission rights |  |  | Average annual base rent per sqm (ARS) |  |  | Number of |  |  | Non-renewed agreements (1) annual base rent amount (in |
Type of business |  | agreements renewed |  |  | (in millions of ARS) |  |  | (in millions of ARS) |  |  | New and renewed |  |  | Former agreements |  |  | non-renewed agreements (1) |  |  | millions of ARS) |
Clothing and footwear |  |  | 275 |  |  |  | 550 |  |  |  | 48 |  |  |  | 15,260 |  |  |  | 12,630 |  |  |  | 514 |  |  |  | 1,193 |
Miscellaneous (2) |  |  | 90 |  |  |  | 177 |  |  |  | 36 |  |  |  | 10,426 |  |  |  | 6,327 |  |  |  | 145 |  |  |  | 359 |
Restaurant |  |  | 49 |  |  |  | 77 |  |  |  | 1 |  |  |  | 11,015 |  |  |  | 10,714 |  |  |  | 157 |  |  |  | 312 |
Services |  |  | 28 |  |  |  | 61 |  |  |  | 2 |  |  |  | 9,673 |  |  |  | 5,551 |  |  |  | 31 |  |  |  | 28 |
Home appliances |  |  | 25 |  |  |  | 107 |  |  |  | 7 |  |  |  | 13,564 |  |  |  | 9,322 |  |  |  | 24 |  |  |  | 45 |
Home and decoration |  |  | 23 |  |  |  | 43 |  |  |  | 3 |  |  |  | 6,138 |  |  |  | 5,104 |  |  |  | 34 |  |  |  | 64 |
Supermarket |  |  | 2 |  |  |  | 20 |  |  |  | - |  |  |  | 1,862 |  |  |  | 1,262 |  |  |  | - |  |  |  | - |
Entertainment |  |  | 1 |  |  |  | 8 |  |  |  | - |  |  |  | 3,664 |  |  |  | 1,012 |  |  |  | 33 |  |  |  | 114 |
Total |  |  | 493 |  |  |  | 1,043 |  |  |  | 97 |  |  |  | 8,950 |  |  |  | 6,490 |  |  |  | 938 |  |  |  | 2,115 |

(1) | Includes vacant stores as of June 30, 2021. Gross leasable area with respect to such vacant stores is included under the type of business of the last tenant to occupy such stores.
(2) | Miscellaneous includes anchor store.

Principal Terms of our Leases

Under the Civil and Commercial Code of Argentina, the term of the locations cannot exceed twenty years for the residential destination and fifty years for the other destinations. In general, our lease agreements have three to ten-year terms.

Leasable space in our shopping malls is marketed through an exclusive arrangement with our wholly owned subsidiary and real estate broker Fibesa S.A., or “Fibesa.” We use a standard lease agreement for most tenants at our shopping malls, the terms and conditions of which are described below. However, our largest or “anchor” tenants generally negotiate better terms for their respective leases. No assurance can be given that lease terms will be as set forth in the standard lease agreement.

Rent amount specified in our leases generally is the higher of (i) a monthly Base Rent and (ii) a specified percentage of the tenant’s monthly gross sales in the store, which generally ranges between 3% and 12% of tenant’s gross sales. Additionally, under the rent adjustment clause included in most of our rental contracts, the tenant’s basic rent is generally updated quarterly and cumulatively by the CPI index. These terms and conditions have not been applied during a period when the shopping malls remained closed due to the Social, Preventive and Mandatory Isolation decreed by the government of Argentina as a result of the novel COVID-19 virus since we decided to defer the billing and collection of the Base Rent until September 30, 2020, with some exceptions and we also suspended collection of the collective promotion fund during the same period, prioritizing the long-term relationship with our tenants.

In addition to rent, we charge most of our tenants an admission fee that is payable upon execution of the lease agreement and upon its renewal. The admission fee is normally paid as a lump-sum payment or in small monthly installments. Tenants who pay this right in installments are liable for paying the outstanding balance if the agreement is terminated before the due date. In case of unilateral termination and/or termination due to a breach of obligations by the tenants, our consent is required for the reimbursement of the admission fee.

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We are responsible, except in the mall Distrito Arcos, for providing each unit within our shopping malls with electricity, a main telephone switchboard, central air conditioning and a connection to a general fire detection system. We also provide the food court tenants with sanitation and with gas systems connections. In Distrito Arcos, the connections are managed by the tenants. Each tenant is responsible for completing all necessary installations within its rental unit, in addition to paying direct related expenses, including electricity, water, gas, telephone and air conditioning. Tenants must also pay for a percentage of total expenses and general taxes related to common areas. We determine this percentage based on different factors. The common area expenses include, among others, administration, security, operations, maintenance, cleaning and taxes.

We carry out promotional and marketing activities to draw consumer traffic to our shopping malls. These activities are paid for with the tenants’ contributions to the Collective Promotion Fund, or “CPF,” which is administered by us. Tenants are required to contribute 15% of their rent (Base Rent plus Percentage Rent) to the CPF. We may increase the percentage tenants must contribute to the CPF with up to 25% of the original amount set forth in the corresponding lease agreement for the contributions to the CPF. We may also require tenants to make extraordinary contributions to the CPF to fund special promotional and marketing campaigns or to cover the costs of special promotional events that benefit all tenants. We may require tenants to make these extraordinary contributions up to four times a year provided that each extraordinary contribution may not exceed 25% of the tenant’s preceding monthly lease payment.

Each tenant leases its rental unit as a shell without any fixtures and is responsible for the interior design of its rental unit. Any modifications and additions to the rental units must be pre-approved by us. We have the option to charge the tenant for all costs incurred in remodeling the rental units and for removing any additions made to the rental unit when the lease expires. Furthermore, tenants are responsible for obtaining adequate insurance for their rental units, which must cover, among other things, damage caused by fire, glass breakage, theft, flood, civil liability and workers’ compensation.

Insurance

We and our subsiadiary IRSA CP carry all-risk insurance for the shopping malls and other buildings covering property damage caused by fire, terrorist acts, explosion, gas leak, hail, storms and wind, earthquakes, vandalism, theft and business interruption. In addition, we carry liability insurance covering any potential damage to third parties or property caused by the conduct of our business throughout Argentina. We and our subsiadiary IRSA CP are in compliance with all legal requirements related to mandatory insurance, including insurance required by the Occupational Risk Law (Ley de Riesgos del Trabajo), life insurance required under collective bargaining agreements and other insurance required by laws and executive orders. IRSA CP’s and our history of damages is limited to one single claim resulting from a fire in Alto Avellaneda Shopping in March 2006, which loss was substantially recovered from our insurers. These insurance policies contain specifications, limits and deductibles which we believe are adequate to the risks to which we are exposed in our daily operations. We and our subsiadiary IRSA CP also maintain liability insurance covering the liability of our directors and corporate officers.

Control Systems

We have computer systems equipped to monitor tenants’ sales (including some stands) in all of our shopping malls. We also conduct regular audits of our tenants’ accounting sales records in all of our shopping malls. Almost every store in our shopping malls has a point of sale that is linked to our main server. We use the information generated from the computer monitoring system to prepare statistical data regarding, among other things, total sales, average sales and peak sale hours for marketing purposes and as a reference for the internal audit. Most of our shopping mall lease agreements require the tenant to have its point of sale system linked to our server. During this fiscal year, we started the renpvation of our payment terminals with contactless technology (Clover).

Competition

IRSA CP is the largest owner and operator of shopping malls, offices and other commercial properties in Argentina in terms of gross leasable area and number of rental properties. Given that most of our subsiadiary IRSA CP’s shopping malls are located in highly populated areas, there are competing shopping malls within, or in close proximity to, our targeted areas, as well as stores located on avenues or streets. The number of shopping malls in a particular area could have a material effect on the ability to lease space in shopping malls and on the amount of rent that IRSA CP is able to charge. We believe that due to the limited availability of large plots of land and zoning restrictions in the City of Buenos Aires, it is difficult for other companies to compete in areas through the development of new shopping malls. The principal competitor is Cencosud S.A. which owns and operates Unicenter Shopping and the Jumbo hypermarket chain, among others.

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The following table shows certain information concerning the most significant owners and operators of shopping malls in Argentina, as of June 30, 2021.

Entity |  | Shopping malls |  | Location |  | GLA |  |  | Market share (1) |
|  |  |  |  |  |  |  |  | (%) |
IRSA CP |  | Alto Palermo |  | City of Buenos Aires |  |  | 20,045 |  |  |  | 1.54 |
|  | Abasto Shopping (2) |  | City of Buenos Aires |  |  | 36,796 |  |  |  | 2.83 |
|  | Alto Avellaneda |  | Province of Buenos Aires |  |  | 39,838 |  |  |  | 3.06 |
|  | Alcorta Shopping |  | City of Buenos Aires |  |  | 15,812 |  |  |  | 1.22 |
|  | Patio Bullrich |  | City of Buenos Aires |  |  | 11,396 |  |  |  | 0.88 |
|  | Dot Baires Shopping (3) |  | City of Buenos Aires |  |  | 47,493 |  |  |  | 3.65 |
|  | Soleil |  | Province of Buenos Aires |  |  | 15,158 |  |  |  | 1.17 |
|  | Distrito Arcos |  | City of Buenos Aires |  |  | 14,335 |  |  |  | 1.10 |
|  | Alto Noa |  | City of Salta |  |  | 19,314 |  |  |  | 1.49 |
|  | Alto Rosario |  | City of Rosario |  |  | 33,731 |  |  |  | 2.59 |
|  | Mendoza Plaza |  | City of Mendoza |  |  | 43,312 |  |  |  | 3.33 |
|  | Córdoba Shopping |  | City of Córdoba |  |  | 15,361 |  |  |  | 1.18 |
|  | La Ribera Shopping |  | City of Santa Fe |  |  | 10,530 |  |  |  | 0.81 |
|  | Alto Comahue |  | City of Neuquén |  |  | 11,705 |  |  |  | 0.90 |
Subtotal |  |  |  |  |  |  | 334,826 |  |  |  | 25.76 |
Cencosud S.A |  |  |  |  |  |  | 277,203 |  |  |  | 21.33 |
Other operators |  |  |  |  |  |  | 687,823 |  |  |  | 52.92 |
Total |  |  |  |  |  |  | 1,299,852 |  |  |  | 100.0 |

(1) | Corresponding to gross leasable area in respect of total gross leasable area. Market share is calculated dividing sqm over total sqm.
(2) | Does not include Museo de los Niños (3,732 sqm).
(3) | Our interest in PAMSA is 80%:

Source: Argentine Chamber of Shopping Malls.

Seasonality

IRSA CP’s business is directly related with seasonality, affecting the level of our tenants’ sales. During summer holidays (January and February) our tenants’ sales reach their minimum level, whereas during winter holidays (July) and in December (Christmas) they reach their maximum level. Clothing stores generally change their collections in spring and autumn, positively affecting our shopping malls’ sales. Sales at discount prices at the end of each season are also one of the main sources of impact on our business.

Offices

The corporate activity carried out remotely or virtual work that characterized this stage of confinement by COVID19 brought with it a combination of lower demand, increased vacancies, and a slight decrease in the rental prices of category A + and A office buildings in Buenos Aires.

According to the real estate broker L.J. Ramos, the market has managed to close a positive net absorption of 1,100 sqm, after a year in negative values, showing for the first time since the beginning of the pandemic, a cut in the negative trend in market indicators. The average vacancy rate of the Buenos Aires Class A market was 15.7%, 6 pp. above the observed in 2020 and the rental values decreased slightly, averaging USD 24.5/sqm.

Management of office buildings

We generally act as the manager of the office properties in which we own an interest through our subsidiary IRSA CP. We typically own the entire building or a substantial number of floors in the building. The buildings in which we own floors are generally managed pursuant to the terms of a condominium agreement that typically provides for control by a simple majority of the interests based on owned area. As building manager, we handle services such as security, maintenance and housekeeping, which are generally outsourced. The cost of the services is passed through to, and paid for by, the tenants, except in the case of our units that have not been leased, if any, for which we bear the cost. We market our leasable area through commissioned brokers or directly by us.

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Leases

We usually lease our offices by using contracts with an average term between three to ten years. Contracts for the rental of office buildings and other commercial properties are generally stated in U.S. dollars. Rental rates for renewed periods are negotiated at market value.

Properties

The following table sets forth certain information regarding IRSA CP’s office buildings, as of June 30, 2021:

|  | Date of acquisition/ development |  | GLA (sqm) (1) |  | Occupancy rate (2) |  | Ownership interest |  | Total rental income for the fiscal year ended June 30, 2021 |
|  |  |  |  |  | (%) |  | (%) |  | (in thousands of ARS) |
Offices |  |  |  |  |  |  |  |  |  |  |
AAA & A buildings |  |  |  |  |  |  |  |  |  |  |
República Building |  | Dec-14 |  | 19,885 |  | 66.9 |  | 100 |  | 506,822 |
Bankboston Tower (5) |  | Dec-14 |  | - |  | - |  | - |  | 120,982 |
Intercontinental Plaza (3) |  | Dec-14 |  | 2,979 |  | 100.0 |  | 100 |  | 141,684 |
Bouchard 710 (5) |  | Dec-14 |  | - |  | - |  | - |  | 43,344 |
Dot Building |  | Nov-06 |  | 11,242 |  | 84.9 |  | 80 |  | 277,155 |
Zetta |  | May-19 |  | 32,173 |  | 84.7 |  | 80 |  | 907,118 |
Della Paolera 261 (4) |  | Dec-20 |  | 27,530 |  | 80.2 |  | 100 |  | 494,581 |
Total AAA & A buildings |  |  |  | 93,809 |  | 80.1 |  |  |  | 2,491,686 |
B buildings |  |  |  |  |  |  |  |  |  |  |
Philips |  | Jun-17 |  | 8,017 |  | 93.1 |  | 100 |  | 139,307 |
Suipacha 652/64 |  | Dec-14 |  | 11,465 |  | 17.3 |  | 100 |  | 56,765 |
Total B buildings |  |  |  | 19,482 |  | 48.5 |  | 100 |  | 196,072 |
Total Offices |  |  |  | 113,291 |  | 74.7 |  |  |  | 2,687,758 |

(1) | Corresponds to the total leasable surface area of each property. Excludes common areas and parking spaces.
(2) | Calculated by dividing occupied square meters by total gross leasable area of the relevant property.
(3) | We own 13.2% of the building which covers an area of 22,535 square meters of gross leasable area, meaning we own 2,979 square meters of gross leasable area.
(4) | Includes 664 square meters of gross leasable area of the basement.
(5) | The office buildings were sold during the fiscal year.

Occupancy rate

The following table shows our offices occupancy percentage (1) as of the end of fiscal years ended June 30:

|  | Occupancy rate (1) |
|  | As of June 30, |
|  | 2021 |  |  | 2020 |  |  | 2019 |
|  | (%) |
Offices: |  |  |  |  |  |  |  |  |
República Building |  |  | 66.9 |  |  |  | 86.9 |  |  |  | 95.2 |
Bankboston Tower (2) |  |  | - |  |  |  | 96.4 |  |  |  | 93.5 |
Intercontinental Plaza |  |  | 100.0 |  |  |  | 100.0 |  |  |  | 100.0 |
Bouchard 710 (2) |  |  | - |  |  |  | 92.5 |  |  |  | 100.0 |
Suipacha 652/64 |  |  | 17.3 |  |  |  | 31.2 |  |  |  | 44.6 |
DOT Building |  |  | 84.9 |  |  |  | 84.9 |  |  |  | 100.0 |
Philips Building |  |  | 93.1 |  |  |  | 82.7 |  |  |  | 45.7 |
Zetta Building |  |  | 84.7 |  |  |  | 97.5 |  |  |  | 97.5 |
Della Paolera 261 |  |  | 80.2 |  |  |  | - |  |  |  | - |
Total |  |  | 74.7 |  |  |  | 86.1 |  |  |  | 88.3 |

(1) | Leased square meters pursuant to lease agreements in effect as of June 30, 2021, 2020 and 2019 over gross leasable area of offices for the same fiscal years.
(2) | The office buildings were sold during the fiscal year.

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Annual average income per surface area as of June 30, 2021, 2020 and 2019 (1):

|  | Income per square meter (1) |
|  | As of June 30, |
|  | 2021 |  |  | 2020 |  |  | 2019 |
|  | (ARS/sqm) |
República Building |  |  | 38,078 |  |  |  | 37,658 |  |  |  | 35,243 |
Bankboston Tower (2) |  |  | - |  |  |  | 33,978 |  |  |  | 36,156 |
Intercontinental Plaza |  |  | 47,561 |  |  |  | 20,381 |  |  |  | 23,129 |
Bouchard 710 (2) |  |  | - |  |  |  | 40,215 |  |  |  | 36,799 |
Suipacha 652/64 |  |  | 28,674 |  |  |  | 16,379 |  |  |  | 33,538 |
Dot Building |  |  | 29,053 |  |  |  | 36,583 |  |  |  | 30,028 |
Philips Building |  |  | 18,659 |  |  |  | 16,803 |  |  |  | 38,740 |
Zetta Building |  |  | 33,280 |  |  |  | 36,434 |  |  |  | 23,919 |
Della Paolera 261 |  |  | 22,401 |  |  |  | - |  |  |  | - |

(1) | Calculated by dividing annual rental income by the gross leasable area of offices based on our interest in each building as of June 30 for each fiscal period.
(2) | The office buildings were sold during the fiscal year.

New agreements and renewals

The following table sets forth certain Information on lease agreements as of June 30, 2021:

Property |  | Number of lease agreement (1) (5) |  |  | Annual rental price (in millions of ARS) (2) |  |  | Rental income per sqm (new and renewed) (ARS) (3) |  |  | Previous rental income per sqm (ARS) (3) |  |  | Number of non- renewed leases |  |  | Non- renewed leases annual base rent amount (in millions of ARS) (4) |
República Building |  |  | 11 |  |  |  | 318 |  |  |  | 2,593 |  |  |  | 2,685 |  |  |  | 5 |  |  |  | 134 |
Dot Building |  |  | 3 |  |  |  | 97 |  |  |  | 2,056 |  |  |  | 1,755 |  |  |  | 1 |  |  |  | 20 |
Philips Building |  |  | 6 |  |  |  | 139 |  |  |  | 2,012 |  |  |  | 1,898 |  |  |  | 1 |  |  |  | 18 |
Intercontinental Plaza |  |  | 3 |  |  |  | 76 |  |  |  | 2,133 |  |  |  | 1,726 |  |  |  | 3 |  |  |  | 16 |
Della Paolera 261 |  |  | 20 |  |  |  | 573 |  |  |  | 2,211 |  |  |  | - |  |  |  | - |  |  |  | 0 |
Zetta Building |  |  | 1 |  |  |  | 34 |  |  |  | 2,192 |  |  |  | 2,810 |  |  |  | 3 |  |  |  | 104 |
Suipacha 664 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1 |  |  |  | 29 |
Total |  |  | 44 |  |  |  | 1,237 |  |  |  | 2,252 |  |  |  | 1,181 |  |  |  | 14 |  |  |  | 321 |

(1) | Includes new and renewed leases executed in fiscal 2021.
(2) | Leases in U.S. dollars converted to pesos at the exchange rate prevailing on the first month of the agreement, multiplied by 12 months.
(3) | Monthly value.
(4) | Leases in U.S. dollars converted to pesos at the exchange rate prevailing on the last month of the agreement, multiplied by 12 months.
(5) | It does not include leases over parking spaces, antennas or terrace area.

The following table sets forth the schedule of estimated lease expirations for our offices and other properties for leases in effect as of June 30, 2021. This data is presented assuming that none of our tenants exercises its option to renew or terminate its lease prior to expiration (most leases have renewal clauses):

Expiration year |  | Number of leases due to expire (1) |  |  | Square meters of leases due to expire (sqm) |  |  | Square meter of leases due to expire (%) |  |  | Annual rental income amount of leases due to expire (in millions of ARS) |  |  | Annual rental income amount of leases to expire (%) |
As of June 30, 2021 |  |  | 1 |  |  |  | 866 |  |  |  | 1 |  |  |  | 31 |  |  |  | 1 |
As of June 30, 2022 |  |  | 2 |  |  |  | 509 |  |  |  | 1 |  |  |  | 14 |  |  |  | 1 |
As of June 30, 2023 |  |  | 16 |  |  |  | 13,587 |  |  |  | 16 |  |  |  | 438 |  |  |  | 19 |
As of June 30, 2024 and thereafter |  |  | 46 |  |  |  | 69,647 |  |  |  | 82 |  |  |  | 1,842 |  |  |  | 79 |
Total |  |  | 65 |  |  |  | 84,609 |  |  |  | 100 |  |  |  | 2,325 |  |  |  | 100 |

(1) | Includes offices with leases that have not been renewed as of June 30, 2021.
(2) | It does not include square meters or revenue from parking spaces, terraces or antennas.

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Hotels

According to the Hotel Vacancy Survey (EOH) prepared by INDEC, in June 2021, overnight stays at hotel and parahotel establishments were estimated at 0.65 million, 780.7% more than the same month the previous year. Overnight stays by resident and nonresident travelers increased by 846.8% and 131.5%, respectively. Total travelers who stayed at hotels during June were 0.29 million, a 1,100.4% increase compared to the same month the previous year. The number of resident and nonresident travelers increased by 1,133.7% and 436,4%, respectively. The Room Occupancy Rate in June was 15.7%, showing a sharp increase compared to the same month the previous year. Moreover, the Bed Occupancy Rate for the same period was 10.8%, which represents a sharp increase compared to June 2020.

The hotel segment has also been affected by the social, preventive, and mandatory confinement decreed by the Argentine government since March 20, 2020, together with the closure of borders and the influence of tourism. After nine months of closure in 2020, activity resumed with low occupancy in Buenos Aires and a better recovery in the Llao Llao resort in Bariloche, mainly motivated by the rise in domestic tourism. The sector awaits the resumption of air flows and the arrival of international tourism in order to recover its income levels prior to the pandemic.

The crisis in the sector has motivated palliative measures by national and provincial authorities, necessary measures that partially contribute to sustainability. In a complementary way, the management of each of the hotels makes its best efforts to adapt operationally to the context.

During fiscal year 2021, we kept our 76.34% interest in Intercontinental hotel, 100% interest in Libertador hotel and 50.00% interest in Llao Llao.

The following chart shows certain information regarding our luxury hotels:

Hotels |  | Date of Acquisition |  | IRSA’s Interest |  |  | Number of rooms |  |  | Occupancy (%) (1) |  |  | Average Price per Room ARS (2) |  |  | Fiscal Year Sales as of June 30 (in millions of ARS) |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2021 |  |  | 2020 |  |  | 2019 |
Intercontinental (3) |  | 11/01/1997 |  |  | 76.34 | % |  |  | 313 |  |  |  | 8.5 |  |  |  | 7,925 |  |  |  | 721 |  |  |  | 1,049 |  |  |  | 549 |
Libertador (4) |  | 03/01/1998 |  |  | 100 | % |  |  | 200 |  |  |  | 7.9 |  |  |  | 5,921 |  |  |  | 252 |  |  |  | 591 |  |  |  | 324 |
Llao Llao (5) |  | 06/01/1997 |  |  | 50.00 | % |  |  | 205 |  |  |  | 21.9 |  |  |  | 19,072 |  |  |  | 1,049 |  |  |  | 1,313 |  |  |  | 699 |
Total |  |  |  |  |  |  |  |  | 718 |  |  |  | 12.2 |  |  |  | 10,254 |  |  |  | 2,022 |  |  |  | 2,953 |  |  |  | 1,572 |

(1) | Accumulated average in the twelve-month period.
(2) | Accumulated average in the twelve-month period.
(3) | Through Nuevas Fronteras S.A.
(4) | Through Hoteles Argentinos S.A.U.
(5) | Through Llao Llao Resorts S.A.

Hotel Llao Llao, San Carlos de Bariloche, Province of Rio Negro

In June 1997 we acquired the Hotel Llao Llao from Llao Llao Holding S.A. Fifty percent is currently owned by the Sutton Group. The Hotel Llao Llao is located on the Llao Llao peninsula, 25 kilometers from the City of San Carlos de Bariloche, and it is one of the most important tourist hotels in Argentina. Surrounded by mountains and lakes, this hotel was designed and built by the famous architect Bustillo in a traditional alpine style and first opened in 1938. The hotel was renovated between 1990 and 1993 and has a total constructed surface area of 15,000 sqm and 158 original rooms. The hotel-resort also includes an 18-hole golf course, tennis courts, fitness facility, spa, game room and swimming pool. The hotel is a member of The Leading Hotels of the World, Ltd., a prestigious luxury hospitality organization representing 430 of the world’s finest hotels, resorts and spas. The Hotel Llao Llao is currently being managed by Compañía de Servicios Hoteleros S.A., operator, among others, of the Alvear Palace Hotel, a luxury hotel located in the Recoleta neighborhood of Buenos Aires. During 2007, the hotel was subject to an expansion and the number of suites in the hotel rose to 205 rooms.

Hotel Intercontinental, City of Buenos Aires

In November 1997, we acquired 76.34% of the Hotel Intercontinental. The Hotel Intercontinental is located in the downtown City of Buenos Aires neighborhood of Montserrat, near the Intercontinental Plaza office building. Intercontinental Hotels Corporation, a United States corporation, currently owns 23.66% of the Hotel Intercontinental. The hotel’s meeting facilities include eight meeting rooms, a convention center and a divisible 588 sqm ballroom. Other amenities include a restaurant, a business center, a sauna and a fitness facility with swimming pool. The hotel was completed in December 1994 and has 313 rooms.

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Hotel Libertador, City of Buenos Aires

In March 1998 we acquired 100% of the Sheraton Libertador Hotel from Citicorp Equity Investment for an aggregate purchase price of USD23 million. In March 1999, we sold a 20% interest in the Sheraton Libertador Hotel for USD4.7 million to Hoteles Sheraton de Argentina.

During the fiscal year 2019, we acquired 20% of the shares of Hoteles Argentinos S.A.U. (“HASAU”), reaching 100% of the capital stock of HASAU and beginning to operate the hotel directly under the name “Libertador.” The hotel is located in downtown Buenos Aires. The hotel contains 193 rooms and 7 suites, eight meeting rooms, a restaurant, a business center, a spa and fitness facilities with a swimming pool.

Bariloche Plot, “El Rancho,” San Carlos de Bariloche, Province of Río Negro

On December 14, 2006, through our hotel operator subsidiary, Llao Llao Resorts S.A., we acquired a land covering 129,533 sqm of surface area in the City of San Carlos de Bariloche in the Province of Río Negro. The total price of the transaction was USD 7 million, of which USD 4.2 million were paid in cash and the balance of USD 2.8 million was financed by means of a mortgage to be paid in 36 monthly, equal and consecutive installments of USD 0.086 million each. The land is in the border of the Lago Gutiérrez, close to the Llao Llao Hotel in an outstanding natural environment and it has a large cottage covering 1,000 sqm of surface area designed by the architect Ezequiel Bustillo.

Sale and Development of Properties and Land Reserves

Residential Development Properties

The acquisition and development of residential apartment complexes and residential communities for sale is one of our core activities. Our development of residential apartment complexes consists of the new construction of high-rise towers or the conversion and renovation of existing structures such as factories or warehouses. In connection with our development of residential communities, we frequently acquire vacant land, develop infrastructure such as roads, utilities and common areas, and sell plots of land for construction of single-family homes. We may also develop or sell portions of land for others to develop complementary facilities such as shopping areas within residential developments.

In fiscal year ended June 30, 2021, revenue from the development and sale of properties amounted to ARS 664 million, compared to ARS 1,104 million posted in the fiscal year ended June 30, 2020.

Construction and renovation works on our residential development properties are performed, under our supervision, by independent Argentine construction companies that are selected through a bidding process. We enter into turnkey contracts with the selected company for the construction of residential development properties pursuant to which the selected company agrees to build and deliver the development for a fixed price and at a fixed date. We are generally not responsible for any additional costs based upon the turnkey contract. All other aspects of the construction, including architectural design, are performed by third parties.

Another modality for the development of residential undertakings is the exchange of land for constructed square meters. In this way, we deliver undeveloped pieces of land and another firm is in charge of building the project. In this case, we receive finished square meters for commercialization, without taking part in the construction works.

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The following table shows information about IRSACP’s land reserves as of June 30, 2021:

|  | Ownership Interest (%) |  |  | Date of acquisition |  | Land Surface (sqm) |  |  | Buildable surface (sqm) |  |  | GLA (sqm) |  |  | Salable Surface (sqm) |  |  | Book Value (in millions of ARS) |
RESIDENTIAL - BARTER AGREEMENTS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
CONIL - Güemes 836 – Mz. 99 & Güemes 902 – Mz. 95 & Commercial stores - Buenos Aires (4) |  |  | 100 |  |  | Jul-96 |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,461 |  |  |  | 98 |
Córdoba Shopping Adjoining plots - Residential |  |  | 100 |  |  | May-16 |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,080 |  |  |  | - |
Coto Abasto air space – Tower 1 - City of Buenos Aires |  |  | 100 |  |  | Sep-97 |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,018 |  |  |  | 371 |
Total Intangibles (Residential) |  |  |  |  |  |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 4,559 |  |  |  | 469 |
LAND RESERVES: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
UOM Luján - Buenos Aires (5) |  |  | 100 |  |  | May-08 |  |  | 1,160,000 |  |  |  | 464,000 |  |  |  | - |  |  |  | - |  |  |  | 1,505 |
San Martin Plot (Ex Nobleza Piccardo) - Buenos Aires (5) |  |  | 50 |  |  | May-11 |  |  | 159,996 |  |  |  | 500,000 |  |  |  | - |  |  |  | - |  |  |  | 8,818 |
La Plata - Greater Buenos Aires (5) (8) |  |  | 100 |  |  | Mar-18 |  |  | 78,614 |  |  |  | 116,553 |  |  |  | - |  |  |  | - |  |  |  | 576 |
Caballito plot - City of Buenos Aires |  |  | 100 |  |  | Jan-99 |  |  | 23,791 |  |  |  | 86,387 |  |  |  | 10,518 |  |  |  | 75,869 |  |  |  | 5,150 |
Subtotal Mixed-uses |  |  |  |  |  |  |  |  | 1,422,401 |  |  |  | 1,166,940 |  |  |  | 10,518 |  |  |  | 75,869 |  |  |  | 16,049 |
Coto Abasto air space – Tower 2 - City of Buenos Aires (2) |  |  | 100 |  |  | Sep-97 |  |  | - |  |  |  | 10,768 |  |  |  | - |  |  |  | 8,193 |  |  |  | 52 |
Córdoba Shopping Adjoining plots – Córdoba (2) |  |  | 100 |  |  | Jun-15 |  |  | 8,000 |  |  |  | 13,500 |  |  |  | - |  |  |  | 1,080 |  |  |  | 50 |
Neuquén - Residential plot – Neuquén (2)(6) |  |  | 100 |  |  | Jun-99 |  |  | 13,000 |  |  |  | 58,000 |  |  |  | - |  |  |  | 58,000 |  |  |  | 120 |
Subtotal residential |  |  |  |  |  |  |  |  | 21,000 |  |  |  | 82,268 |  |  |  | - |  |  |  | 67,273 |  |  |  | 222 |
Polo Dot commercial expansion – City of Buenos Aires(7) |  |  | 80 |  |  | Nov-06 |  |  | - |  |  |  | - |  |  |  | 15,940 |  |  |  | - |  |  |  | 2,195 |
Paraná plot - Entre Ríos (3) |  |  | 100 |  |  | Aug-10 |  |  | 10,022 |  |  |  | 5,000 |  |  |  | 5,000 |  |  |  | - |  |  |  | - |
Subtotal retail |  |  |  |  |  |  |  |  | 10,022 |  |  |  | 5,000 |  |  |  | 20,940 |  |  |  | - |  |  |  | 2,195 |
Polo Dot - Offices 2 & 3 - City of Buenos Aires |  |  | 80 |  |  | Nov-06 |  |  | 12,800 |  |  |  | - |  |  |  | 38,400 |  |  |  | - |  |  |  | 4,211 |
Intercontinental Plaza II - City of Buenos Aires |  |  | 100 |  |  | Feb-98 |  |  | 6,135 |  |  |  | - |  |  |  | 19,598 |  |  |  | - |  |  |  | 1,739 |
Córdoba Shopping adjoining plots – Córdoba (2) |  |  | 100 |  |  | Jun-15 |  |  | 2,800 |  |  |  | 5,000 |  |  |  | 5,000 |  |  |  | - |  |  |  | 4 |
Subtotal offices |  |  |  |  |  |  |  |  | 21,735 |  |  |  | 5,000 |  |  |  | 62,998 |  |  |  | - |  |  |  | 5,954 |
Total future developments |  |  |  |  |  |  |  |  | 1,475,158 |  |  |  | 1,259,208 |  |  |  | 94,456 |  |  |  | 143,142 |  |  |  | 24,420 |
Other land reserves (1) |  |  |  |  |  |  |  |  | 1,899 |  |  |  | - |  |  |  | 7,297 |  |  |  | 262 |  |  |  | 2,183 |
Total land reserves |  |  |  |  |  |  |  |  | 1,477,057 |  |  |  | 1,259,208 |  |  |  | 101,753 |  |  |  | 143,404 |  |  |  | 26,603 |

(1) | Includes Zelaya 3102-3103, Chanta IV, Anchorena 665, Condominios del Alto II, Ocampo parking spaces, DOT adjoining plot and Mendoza shopping adjoining plot.
(2) | These land reserves are classified as Trading properties, therefore, their value is maintained at historical cost. The rest of the land reserves are classified as Investment Property, valued at market value.
(3) | Sign of the deeds pending subject to certain conditions.
(4) | Classified as Intangible Assets, therefore, their value is kept at historical cost.
(5) | Buildable Surface indicated: Maximum estimated area according to project drafts, pending final approvals.
(6) | Estimated buildable surface according to consultant preliminary feasibility study, which could be reduced to aprox. 45,000 sqm following a recent filing with the local government.
(7) | Potential expansion of Zetta Building into commercial mixed uses, mainly offices.
(8) | Corresponds to 38.15% directly own by IRSA CP, of a total amount of ARS 1,510 million.

The following table shows information about IRSACP’s expansions on its current assets as of June 30, 2021:

Expansions |  | Ownership interest |  |  | Surface |  |  | Locations |
|  | (%) |  |  | (sqm) |  |  |  |
Alto Palermo Adjoining Plot |  |  | 100 |  |  |  | 2,510 |  |  | City of Buenos Aires |
Subtotal current expansions |  |  |  |  |  |  | 2,510 |  |  |  |
Other future expansions (1) |  |  |  |  |  |  | 49,186 |  |  |  |
Subtotal future expansions |  |  |  |  |  |  | 49,186 |  |  |  |
Total Shopping Malls |  |  |  |  |  |  | 51,696 |  |  |  |
Patio Bullrich - Offices / Hotel (2) |  |  | 100 |  |  |  | 20,000 |  |  | City of Buenos Aires |
Alto Palermo |  |  | 100 |  |  |  | 14,119 |  |  | City of Buenos Aires |
Córdoba Shopping |  |  | 100 |  |  |  | 7,000 |  |  | Cordoba |
Alto Rosario(3) |  |  | 100 |  |  |  | 15,000 |  |  | Rosario |
Philips Building |  |  | 100 |  |  |  | 19,706 |  |  | City of Buenos Aires |
Subtotal future expansions |  |  |  |  |  |  | 75,825 |  |  |  |
Total offices + residential |  |  |  |  |  |  | 75,825 |  |  |  |
Total expansions |  |  |  |  |  |  | 127,521 |  |  |  |

(1) | Includes Alto Palermo, Paseo Alcorta, Alto Avellaneda, Soleil, Alto Noa and Alto Comahue.
(2) | There are 20,000 sqm available for expansion, but for that may necessary to replace 5,000 sqm of the commercial surface, then the surface available will be 15,000 sqm.
(3) | Alto Rosario: 15,000 sqm of comercial feasible expansión. From the formal standpoint, over 80,000 sqm of residential and offices could be added, as well as over 60,000 sqm of retail.

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The following chart shows information about IRSA’s land reserves as of June 30, 2021:

|  | IRSA’s Interest |  |  | Date of acquisition |  | Land surface (sqm) |  |  | Buildable surface (sqm) |  |  | Saleable surface (sqm) |  |  | Book Value (ARS millions) |
LAND RESERVES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
La Adela - Buenos Aires (3) |  |  | 100 | % |  | 8/1/2014 |  |  | 9,868,500 |  |  |  | 3,951,227 |  |  |  | - |  |  |  | 2,163 |
Puerto Retiro - BA City (1) |  |  | 50 | % |  | 5/18/1997 |  |  | 82,051 |  |  |  | 246,153 |  |  |  | - |  |  |  | - |
Solares Santa María - BA City (3) (5) |  |  | 100 | % |  | 7/10/1997 |  |  | 716,058 |  |  |  | 716,058 |  |  |  | - |  |  |  | 32,327 |
Subtotal Mixed-uses |  |  |  |  |  |  |  |  | 10,666,609 |  |  |  | 4,913,438 |  |  |  | - |  |  |  | 34,490 |
Caballito Block 35 -BA City (4) |  |  | 100 | % |  | 10/22/1998 |  |  | 9,879 |  |  |  | 57,192 |  |  |  | 30,064 |  |  |  | 595 |
Zetol – Uruguay (4) |  |  | 90 | % |  | 6/1/2009 |  |  | - |  |  |  | - |  |  |  | 64,080 |  |  |  | 441 |
Vista al Muelle – Uruguay (4) |  |  | 90 | % |  | 6/1/2009 |  |  | - |  |  |  | - |  |  |  | 60,360 |  |  |  | 360 |
Subtotal Residential |  |  |  |  |  |  |  |  | 9,879 |  |  |  | 57,192 |  |  |  | 154,504 |  |  |  | 1,396 |
Total Future Developments |  |  |  |  |  |  |  |  | 10,676,488 |  |  |  | 4,970,630 |  |  |  | 154,504 |  |  |  | 35,886 |
Another Land Reserves (2) (3) (4) |  |  |  |  |  |  |  |  | 5,249,941 |  |  |  | - |  |  |  | 4,713 |  |  |  | 792 |
Total Land Reserves |  |  |  |  |  |  |  |  | 15,926,429 |  |  |  | 4,970,630 |  |  |  | 159,217 |  |  |  | 36,678 |

(1) | This landplot is under judicial litigation and it is fully allowanced.
(2) | Includes Pilar R8 Km 53, Pontevedra, Mariano Acosta, Merlo and San Luis plot, and Llao Llao plot.
(3) | These properties (La Adela, Solares Santa María, Pilar R.8 Km 53, Pontevedra, Mariano Acosta, Merlo and San Luis) are valuated as Fair Value.
(4) | These properties (Caballito Block 35, Zetol, Vista al Muelle and Llao Llao plot) are valuated as Cost adjusted for inflation.
(5) | As of today, the change of zoning to mixed uses is under treatment in the GCBA, which must be voted in November 2021.

Residential Properties (available for sale)

In the residential market, we acquire undeveloped properties strategically located in densely populated areas of the City of Buenos Aires, particularly properties located near shopping malls and hypermarkets or those to be constructed. We then develop multi-building high-rise complexes targeting the middle- and high- income market. These are equipped with modern comforts and services, such as open “green areas,” swimming pools, sports and recreation facilities and 24-hour security.

Condominios del Alto II – City of Rosario, Province of Santa Fe (IRSA CP)

As of June 30, 2021, the works on parcel H have been completed, having received all the units committed to the exchange and being available for sale at this date, 4 garages.

Horizons, Vicente López, Olivos, Province of Buenos Aires.

The IRSA-CYRELA Project, developed over two adjacent blocks, was launched in March 2008 under the name Horizons. Horizons is one of the most significant developments in Greater Buenos Aires, featuring a new concept in residential complexes given its emphasis on the use of common spaces. This project includes two complexes with a total of six buildings: one complex faces the river and consists of three 14-floor buildings, the “Río” complex, and the other one, facing Libertador Avenue, consists of three 17-floor buildings, it is known as the “Parque” complex, thus totaling 59,000 square meters built of saleable area distributed in 467 units (excluding the units to be delivered as consideration for the purchase of the lands). Horizons is a unique and style-innovating residential complex offering 32 amenities, including a meeting room, work zone, heated swimming pools, mansion with spa, sauna, gym, children room, teen room, thematically landscaped areas, and aerobic trail. The showroom was opened to the public in March 2008 with great success. As of June 30, 2021, all the units were sold and the stock available for sale consisted of 1 parking space and 19 storage spaces.

Pereiraola (Greenville), Hudson – Province of Buenos Aires

In April de 2010 we sold Pereiraola S.A., a company owner of certain lands adjacent to Abril Club de Campo that comprised 130 hectares, for USD11.7 million. The purchaser would develop a project that includes the fractioning into lots, a condo-hotel, two polo fields, and apartment buildings. The delivery to the Company of 39,634 square meters of lots amounting to approximately USD3 million was included in the sale price. As of June 30, 2021, the balance of the price of the sale operation has been received and all the lots that remained to be received have been transferred as the balance of the price of the sale carried out in 2010, the assignment was made on October 14, 2020.

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Intangibles – Units to be received under barter agreements

Conil – Avellaneda, Province of Buenos Aires (IRSA CP)

These plots of land we own, through IRSA CP, face Alto Avellaneda shopping mall, totaling 2,398 square meters distributed in two opposite corners and, according to urban planning standards, around 6,000 square meters may be built. Its intended use, either through our own development or sale to a third party, is residential with the possibility of a retail space as well. In November 2014, a barter deed was executed to carry out a residential development, in consideration of which IRSA CP will receive 1,389 square meters of retail stores located on the ground floors of blocks 99 and 95 at Güemes 836 and Güemes 902, respectively. The barter was valued at USD0.7 million. Considerations for block 95 and 99 were estipulated to be delivered in January 2018 and September 2018, respectively. In June 2018 an extension to the barter agreement was signed. In consideration for the delay and as compensation, IRSA CP will receive an additional apartment (55.5 square meters) and one parking lot (14 square meters).

Canteras Natal Crespo, La Calera – Province of Córdoba

On June 26, 2013, we sold 100% of our interest in Canteras Natal Crespo S.A. representing 50% of its capital stock, to Euromayor S.A. de Inversiones for USD 4,215,000 according to the following payment schedule: USD 3,815,000 in cash and USD 400,000 through the transfer of almost 40,000 sqm for business purposes within the project to be developed in the site known as Laguna Azul. In December 2019, an agreement was reached with the counterpart that allowed the resale of the non-monetary consideration to an unrelated third party for a total value of USD 450,000.

Projects under Development

Alto Palermo Expansion (IRSA CP)

IRSA CP continue to work on the expansion of Alto Palermo shopping mall which has the highest sales per square meter in our portfolio, that will add a gross leasable area of approximately 3,900 square meters and will consist of moving the food court to a third level by using the area of an adjoining building IRSA CP acquired in 2015. Work progress as of June 30, 2021 was 88% and construction works are expected to be completed by December 2021.

Mixed uses

Ex UOM – Luján, Province of Buenos Aires (IRSA CP)

This 116-hectare plot of land is located in the 62 Km of the West Highway, in the intersection with Route 5 and was originally purchased by CRESUD from Birafriends S.A. for USD 3 million on May 31, 2008. In May 2012, the Company acquired the property through a purchase and sale agreement entered into between related parties, thus becoming the current owner. Our intention is to carry out a mixed-use project, taking advantage of the environment consolidation and the strategic location of the plot. At present, dealings are being carried out so as to change the zoning parameters, thus enabling the consummation of the project.

Ex Nobleza Piccardo Plant – San Martín, Province of Buenos Aires (IRSA CP)

This plot of land is owned by Quality Invest. On May 31, 2011, Quality Invest S.A. and Nobleza Picardo S.A.I.C. y F. (Nobleza) executed the title deed for the purchase of a plot of land extending over 160,000 square meters located in the District of San Martín, Province of Buenos Aires, currently intended for industrial purposes and suitable in terms of characteristics and scales for mixed-use developments.

The Master Plan, by which it is projected to develop a large-scale integral urbanization (residential, commercial, etc.), which includes the construction of approximately 500,000 to 540,000 sqm, was endorsed by the Municipality of San Martin through Decree 1589/19 and registered before the General Directorate of Urbanism and Directorate of Urban Planning of the Municipality. Likewise, the subdivision plan in accordance with the urban indicators was presented to the Directorate of Cadastre of the Province of Bs. As.

Additionally, during fiscal year 2020, the pre-feasibility requirements began to be processed with public bodies and in July 2020, the granting of the Hydraulic Aptitude was notified in pre-feasibility instance. In the next fiscal year, we will begin the rest of the presentations before the service companies, to obtain the pre-feasibilities of electric power, gas, water and overturning. of effluents.

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Córdoba Shopping Mall Project (IRSA CP)

The Company owns a few plots adjacent to Córdoba Shopping Mall with a construction capacity of approximately 18,500 square meters of residential uses and approximately 12,000 square meters of mixed commercial uses in the center of the City of Córdoba.

In May 2016, a preliminary barter agreement was signed for 13,500 square meters out of the total construction capacity, subject to certain conditions, for a term of one year, at the end of which the deed will be signed. It will be a mixed residential and office project and, as part of the consideration, the Company will receive 2,160 square meters in apartments, parking spaces, shopping space, plus IRSA CP will assume the management of permits, unifications and subdivisions in 3 plots.. The value of the barter was USD 4 million.

La Plata Plot of land (IRSA CP)

On March 22, 2018, we acquired 100% of a plot of land of 78,000 sqm of surface in the town of La Plata, province of Buenos Aires. The transaction was consummated through the purchase of 100% of the shares of Entertainment Center La Plata S.A. that owns 61.85% of the property and the direct purchase of the remaining 38.15% from unrelated third parties.

The price of the acquisition was USD 7.5 million which have been fully paid. The company intend to use the property to develop a mixed-use project, given the property’s characteristics for a commercial development in a district with high potential.

On January 21, 2019, Ordinance No. 11,767 approved by the “Honorable Concejo Deliberante de La Plata” on December 26, 2018, has been enacted. With this enactment, the uses and indicators requested to develop a project of 116,553 square meters were formally confirmed.

As of June 30, 2021, the mixed-use project is being defined and in the process of contracting the nexus infrastructures.

Caballito Plot – City of Buenos Aires

Caballito is a property of approximately 23,791 sqm in the City of Buenos Aires, neighborhood of Caballito, one of the most densely populated of the city, which the Company purchased in November 1997. This plot will be used for the development of residential with retail and public spaces, with more than 85,000 sqm. This Project is approved by the GCBA authorities.

On December 23, 2019, the Company transferred Parcel 1 of the land reserve located at Av. Avellaneda and Olegario Andrade 367 in the Caballito neighborhood of the City of Buenos Aires to an unrelated third party.

On July 20, 2020, IRSA CP was notified of the filing of a protection action (amparo) that is processed before the Administrative and Tax Litigation Jurisdiction of the City of Buenos Aires, where the plaintiff has requested the nullity of: 1) Administrative act that grants the certificate of environmental aptitude and 2) Administrative act that registered the plans. On October 1, 2020, the Court of Appeal confirmed the precautionary measure. The Government of the City of Buenos Aires appealed the measure by filing a Constitutional Challenge that was denied filling a complaint appeal, which was denied in October 2021. For more information, see “ITEM 8. Financial Information—A. Consolidated Statements and Other Financial Information—Legal or Arbitration Proceedings—Caballito.”

As of June 30, 2021, the development is awaiting the resolution of an appeal filed with the GCABA.

La Adela – Buenos Aires

During 2015 the company acquired the “La Adela” land reserve with an area of approximately 1,058 hectares, located in the District of Luján, Province of Buenos Aires, that was previously owned by Cresud for a total amount of ARS 210 million. Given its degree of development and closeness to the City of Buenos Aires, we intend to develop a new real estate project.

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Puerto Retiro – City of Buenos Aires

During fiscal year 1998, the Company initiated negotiations with the authorities of the Government of the City of Buenos Aires in order to obtain a rezoning permit for the property, allowing a change in the use of the property and setting forth new regulations for its development.

At present, Puerto Retiro S.A. has a 8.3 hectare plot of land, which is affected by a zoning regulation defined as U.P. which prevents the property from being used for any purposes other than strictly port activities.

Puerto Retiro S.A. was involved in a bankruptcy extension judicial action initiated by the National Government, to which the Board of Directors is totally unrelated. Management and the Companys’s legal advisors consider that there are sufficient legal technical arguments to consider that the request for the extension of bankruptcy will be rejected by the court. However, given the current state of the case, the resolution is uncertain.

In turn, Tandanor filed a civil action against Puerto Retiro S.A. and the other defendants in the criminal case for violation of Section 174 (5) based on Section 173 (7) of the Criminal Code. Such action seeks -on the basis of the nullity of the decree that approved the bidding process involving the Dársena Norte property- the restitution of the property and a reimbursement in favor of Tandanor for all such amounts it has allegedly lost as a result of a suspected fraudulent transaction involving the sale of the property. Puerto Retiro has presented the allegation on the merit of the evidence, highlighting that the current shareholders of Puerto Retiro did not participate in any of the suspected acts in the criminal case since they acquired the shares for consideration and in good faith several years after the facts told in the process. Likewise, it was emphasized that the company Puerto Retiro is foreign - beyond its founders - to the bidding / privatization carried out for the sale of Tandanor shares.

On September 7, 2018, the Oral Federal Criminal Court No. 5 released the operative part of the Sentence, from which it follows that the prescription exception filed by Puerto Retiro was allowed. However, in the criminal case, where Puerto Retiro is not a party, it was ordered, among other issues, the confiscation (decomiso) of the property owned by Puerto Retiro known as Planta I. The reasons for the Court’s sentence were read on November 11, 2018. From that moment, all the parties might file the appeals. Faced with this fact, an extraordinary appeal was filed, which was rejected, and as a result, a complaint was filed for a rejected appeal, which was granted. Consequently, the appeal is under study in the Supreme Court of Justice of the Nation.

In the framework of the criminal case, the complainant denounced the non-compliance by Puerto Retiro S.A. of the precautionary measure decreed in the criminal court consisting of the prohibition to innovate and contract with respect to the property that is the object of the civil action. As a result of this complaint, the Oral Federal Criminal Court No. 5 filed an incident and ordered and executed the closure of the property where the lease contracts with Los Cipreses S.A. and Flight Express S.A. were being fulfilled, in order to enforce compliance with the aforementioned measure. As a result of this circumstance, it was learned that the proceedings were turned to the Criminal Chamber for the assignment of a court to investigate the possible commission of a disobedience crime. As of the date of issuance of these financial statements, there have been no news regarding the progress of this case.

In the face of the evolution of the legal cases affecting it and based on the reports of its legal advisors, the Management of Puerto Retiro has decided to record, during fiscal year 2019, an impairment equivalent to 100% of the book value of its investment property, without prejudice to the reversal of the same in the event that a favorable judgment is obtained in the actions brought.

Costa Urbana – former Solares de Santa María – Costanera Sur, City of Buenos Aires

We own an important property of more than 70 hectares, which we acquired in 1997, facing the Río de la Plata on the Costanera Sur, south of Puerto Madero, 10 minutes from downtown Buenos Aires, originally called “Solares de Santa María” which we have renamed “Costa Urbana.” We intend to create a mixed-use development including residential complexes, offices, stores, hotels, sports clubs and service areas (schools, supermarkets and parking spaces).

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After some unsuccessful approval attempts with the City of Buenos Aires Government and its Legislature, and after new negotiations carried out in recent years, we have signed a new agreement with the Executive Power of the City of Buenos Aires under the “Urban Agreement” modality framed within Decree No. 475 published on December 30, 2020, by means of which it approved the regulation of article 10.9. “Urban Agreements” of Law No. 6099 (text consolidated by Law No. 6347). According to article 10.9 of the Urban Code, these agreements are contracts entered into between the owner of a land/property and the Executive Power, which imply a regulatory change that must be approved by the City of Buenos Aires Legislature. Under this modality, a new urbanization project was proposed, in which more than 67% of the property’s surface is destined for public use, maintaining the original “FOT 1” that implies a capacity to develop more than 895,000 sqm. The Bill was raised for treatment in the first reading on the Legislature premises and it was approved without abstentions on August 19, 2021 by 36 votes out of a total of 55. As part of the approval process, it has been set a date for the non-binding Public Hearing on October 15, 2021 to later celebrate the treatment in second reading for final legislative approval.

The accounting valuation as of June 30, 2021 does not reflect any of these potential changes, valuing the land with the same methodology as in previous years.

Residential

Coto Residential Project (IRSA CP)

The Company owns the right to construct above the premises of the Coto hypermarket that is close to Abasto Shopping in the heart of the City of Buenos Aires which we acquired in September 24, 1997. We estimate it has a construction capacity of 23,000 square feet (it also includes the right to receive certain parking units). The premises are located within the area between Agüero, Lavalle, Guardia Vieja and Gallo streets, in the Abasto neighborhood.

On October 25, 2019, IRSA CP transferred to a non-related third party the rights to develop a residential building (“Tower 1”) on Coto Supermarket airspace located in Abasto neighborhood in the City of Buenos Aires. Tower 1 will have 22 floors of 1 to 3 rooms apartments, totaling an area of 8,400 sqm.

Neuquén Residential Plot– Neuquén, Province of Neuquén (IRSA CP)

Through Shopping Neuquén S.A., IRSA CP owns a plot of 13,000 square meters with an estimated construction capacity of 58,000 square meters of residential properties in an area with significant growth potential, according to consultant preliminary feasibility study, which could be reduced to aprox. 45,000 sqm following a recent filing with the local government. This area is located close to the shopping mall Alto Comahue and the hypermarket currently in operation.

Caballito Plot – City of Buenos Aires

On June 29, 2011, we and TGLT, a residential developer, entered into an agreement to barter for the development of a plot of land located at Méndez de Andes street in the neighborhood of Caballito in the City of Buenos AiresA neighborhood association named Asociación Civil y Vecinal SOS Caballito secured a preliminary injunction which suspended the works to be carried out by TGLT in the abovementioned property. On April 2018 TGLT and us terminated the barter agreement and we recovered the land. In July 2018, the Supreme Court of Justice issued a favorable final decision allowing the construction of 57,192 sqm of apartments on the plot.

As of June 30, 2021, the completion work for the concrete structure of T3 is in the process of being awarded and should be completed in early 2022.

Zetol S.A. and Vista al Muelle S.A. – District of Canelones – Uruguay

In the course of fiscal year 2009 we acquired a 100% ownership interest in Liveck S.A., a company organized under the laws of Uruguay. In June 2009, Liveck had acquired a 90% stake in the capital stock of Vista al Muelle S.A. and Zetol S.A., for USD 7.8 million. The remaining 10% ownership interest in both companies is in the hands of Banzey S.A. These companies have undeveloped lands in Canelones, Uruguay, close to the capital city of Uruguay, Montevideo.

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We intend to develop in these 13 plots, with a construction capacity of 182,000 sqm, an urban project that consists of the development and comercialization of 1,860 apartments. Such project has the “urban feasibility” status for the construction of approximately 200,000 sqm for a term of 10 years, which was granted by the Mayor’s Office of the Canelones department and by its Local Legislature. Zetol S.A. and Vista al Muelle S.A. agreed to carry out the infrastructure works for USD 8 million as well as minimum amount of sqm of properties. The satisfaction of this commitment under the terms and conditions agreed upon will grant an additional 10-year effective term to the urban feasibility status.

The total purchase price for Zetol S.A. was USD 7 million; of which USD 2 million were paid. Sellers may opt to receive the balance in cash or through the delivery of units in the buildings to be constructed in the land owned by Zetol S.A. equivalent to 12% of the total marketable meters to be constructed.

Besides, Vista al Muelle S.A. owned since September 2008 a plot of land purchased for USD 0.83 million. Then, in February 2010, plots of land were acquired for USD 1 million. In December 2010, Vista al Muelle S.A. executed the title deed of other plots for a total amount of USD 2.66 million, of which USD 0.3 million were paid. The balance will be repaid by delivering 2,334 sqm of units and/or retail stores to be constructed or in cash.

On June 30, 2009, the Company sold a 50% stake in Liveck S.A. to Cyrela Brazil Realty S.A. for USD1.3 million. On December 17, 2010, together with Cyrela Brazil Realty S.A. we executed a stock purchase agreement pursuant to which we repurchased from Cyrela Brazil Realty S.A. a 50% shareholding in Liveck S.A. for USD 2.7 million. Accordingly, as of June 30, 2021, our stake, through Tyrus, in Liveck is 100%.

As a result of the plot barter agreements executed in due time between the IMC, Zetol S.A. and Vista al Muelle S.A. in March 2014, the parcel redistribution dealing was concluded. This milestone, as set forth in the amendment to the Master Agreement executed in 2013, initiates the 10-year term for the investment in infrastructure and construction of the buildings mentioned above. Construction capacity of the 13 plots is 182,000 sqm.

On November 15, 2018, the translation deed of sale of the first plot where the first Tower of Departments, Villas and single and double parking spaces is currently being built has been signed, the total exchange price was USD 7,298,705 equivalent to 16% of all of the marketable built meters in the first Tower. 12% of it has been used to cancel part of the price balance maintained to date with the sellers of the plots acquired by Zetol S.A in June 2009. The estimated delivery date of the units is January 2022.

As of June 30, 2021, the infrastructure work concerning sectors A and B of the property has been contracted and at 20% progress, which include, among others, the coastal road, roundabouts, lights, landfills and pluvial and sewage connections by an amount of about USD 3.2 MM. It must be completed by the end of the current year.

Offices

Polo Dot 2nd and 3rd Stages – City of Buenos Aires (IRSA CP)

These two parcels of 6,400 square meters with a construction capacity of 33,485 square meters each, are located adjoining to where the extension of Dot Baires Shopping is planned. In April 2018, both plots were unified into a single one of 12,800 square meters.

Intercontinental Plaza II Plot - City of Buenos Aires (IRSA CP)

In the heart of the neighborhood of Monserrat, just a few meters from the most trafficked avenue in the city and the financial center, is the Intercontinental Plaza complex consisting of an office tower and the exclusive Intercontinental Hotel. In the current plot of 6,135 square meters a second office tower of 19,600 square meters and 25 stories could be built to supplement the tower currently located in the intersection of Moreno and Tacuarí streets.

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Other Land Reserves

Other Land Reserves – Pilar, Pontevedra, Mariano Acosta, Merlo, San Luis Plot, Llao Llao Plot and Casona Abril remaining surface.

We grouped here those plots of land with a significant surface area the development of which is not feasible in the short term either due to their current urban and zoning parameters, their legal status or the lack of consolidation of their immediate environment. This group totals around 7 million sqm.

Isla Sirgadero

On September 3, 2015, the entire property of 10,083,270 sqm was sold to several companies for USD3.9 million, payable in 16 quarterly installments, plus an installment in kind, land resulting from the final blueprint, equivalent to 10% of the surface area. In November 2020, a debt renegotiation agreement was signed with an initial payment of USD 500,000 plus remaining balance in installments, eliminating the quota in kind.

International

Investment in Condor Hospitality Trust

We maintain our investment in the Condor Hospitality Trust Hotel REIT (NYSE: CDOR) mainly through our subsidiary Real Estate Investment Group VII (“REIG VII”), in which we hold a 100% interest. Condor is a REIT listed in NYSE focused on medium-class hotels located in various states of the United States of America, managed by various operators and franchises.

Condor’s investment strategy is to build a branded premium, select service hotels portfolio within the top 100 Metropolitan Statistical Areas (“MSA”) with a particular focus on the range of MSA 20 to 60. Since the beginning of the reconversion of the hotel portfolio in 2015, Condor has acquired 14 high quality select service hotels in its target markets for a total purchase price of approximately USD277 million. In addition, during this time, it has sold 53 legacy assets for a total value of approximately USD161 million.

On July 19, 2019, Condor signed an agreement and merger plan with Nextpoint Hospitality Trust. As agreed, each Condor ordinary share, will be canceled before the merger and will become the right to receive a cash amount equivalent to USD 11.10 per ordinary share. Additionally, in accordance with the terms and conditions of the merger agreement, each Series E convertible share will be automatically canceled and its holders will become entitled to receive a cash amount equal to USD 10.00 per share. The closing of the acquisition, scheduled for March 23, 2020, did not occur.

On October 14, 2020, Condor executed an agreement with Nextponint Hospitality Trust and some of its affiliates (“NHT Parties”) to resolve and settle any and all claims between them related to the merger agreement mentioned hereinabove.

According to the agreement with NHT Parties shall made a payment to Condor totalling USD 7.0 million, due to a breach of contract.

On June 29, 2021, a put right was exercised, for which the Class E preferred shares of Condor plus the dividends accrued as of June 30, 2021 that were unpaid were converted into ordinary shares, which were issued on July 29, 2021.

On September 23, 2021, Condor Hospitality Trust, Inc. announced an agreement with affiliates of Blackstone Real Estate Partners to sell its entire portfolio of hotels in a USD 305 million transaction. This is an all cash transaction without the assumption of any existing debt. Completion of the transaction, which is expected to occur in the fourth quarter of 2021, is subject to customary closing conditions, including the approval of Condor’s shareholders.

Condor also announced that its Board of Directors has unanimously adopted a Plan of Liquidation and Dissolution (the “Plan of Liquidation”). The Plan of Liquidation contemplates an orderly wind down of Condor business affairs. Following the closing of the sale of the hotel portfolio and the payment of outstanding liabilities, along with the taking of other actions specified in the Plan of Liquidation, including reserving for certain contingent liabilities and claims, Condor intends to distribute certain net proceeds from the sale of the hotel portfolio to its shareholders in one or more liquidating distribution installments. The implementation of the Plan of Liquidation is conditioned on obtaining approval of Condor’s shareholders.

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As of the date of presentation of these financial statements, the Company owns, directly and indirectly, 3,191,214 ordinary shares representing 21.7% of the capital stock.

Others

Our interest in Banco Hipotecario

As of June 30, 2021, we held a 29.91% interest in Banco Hipotecario. Established in 1886 by the argentine government and privatized in 1999, Banco Hipotecario has historically been Argentina’s leading mortgage lender, provider of mortgage-related insurance and mortgage loan services. All of its operations are located in Argentina where it operates a nationwide network of 63 branches in the 23 Argentine provinces and the City of Buenos Aires, and 12 additional sales offices throughout Argentina.

Banco Hipotecario is an inclusive commercial bank that provides universal banking services, offering a wide variety of banking products and activities, including a wide range of individual and corporate loans, deposits, credit and debit cards and related financial services to individuals, small-and medium-sized companies and large corporations. As of March, 2021, Banco Hipotecario ranked eighteenth in the Argentine financial system in terms of totals assets and also eighteenth in terms of loans. As of June 30, 2021, Banco Hipotecario’s shareholders’ equity was ARS 19,529.2 million, its consolidated assets were ARS 187,595.5 million, and its net income for the six-month period ended June 30, 2021, was negative in ARS 2,953.3 million. Since 1999, Banco Hipotecario’s shares have been listed on the Buenos Aires Stock Exchange in Argentina, and since 2006 it has had a Level I ADR program.

Banco Hipotecario continues its business strategy of diversifying its loan portfolio. As a result, non-mortgage loans were ARS 41,303.4 million as of June 30, 2021. Total non-mortgage loans granted by the bank to the non-financial private sector were ARS 36,145.9 million as of June 30, 2020.Non-performing loans represented 14.3% of its total portfolio as of June 30, 2021.

In recent years, Banco Hipotecario has diversified its funding base and has become one of the most frequent issuers of corporate debt in Argentina based on the percentage of its total funding, by developing presence in the domestic and international capital markets, and it has also increased its deposit base. Its financial indebtedness as a percentage of its total funding was 16.6% as of June 30, 2021.

Its subsidiaries include BACS Banco de Crédito y Securitización S.A., a bank specialized in investment banking, asset securitization and asset management; BACS Administradora de Activos S.A.S.G.F.C.I., a mutual investment fund management company; BHN Sociedad de Inversión S.A., which controls BHN Vida S.A., a life insurance company; and BHN Seguros Generales S.A., a property insurance company.

By virtue of communications “A” 7,312 of the Central Bank, the distribution of dividends is suspended until December 31, 2021.

Others Assets

La Rural (Exhibition and Convention Center) (IRSA CP)

LRSA holds usufruct rights for the commercial operation of the emblematic Predio Ferial de Palermo (Palermo exhibition center) in the City of Buenos Aires. IRSA CP owns 35% of the equity of LRSA.

In July 2016, we acquired from FEG Entretenimientos S.A. 25% of the shares of EHSA, in which the company already helds 50% of the share. IRSA CP also acquired a 1.25% interest in ENUSA. Immediately after this acquisition, we sold 5% of the shares of EHSA to Mr. Diego Finkelstein, who already owned a 25% equity interest. As a result, we now hold 70% of the shares of EHSA and Mr. Diego Finkelstein holds the remaining 30%.

EHSA holds, directly and indirectly, 100% of the shares of OASA and 95% of the shares of ENUSA. OASA holds 50% of the voting stock of LRSA and SRA holds the remaining 50%. In addition, OASA manages LRSA pursuant to agreements entered into with SRA that include the right to appoint the Chairman of the board of LRSA—with deciding vote on certain key governance matters—and the chief executive of LRSA. ENUSA is mainly engaged in organizing entertainment events for trade fairs.

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On August 4, 2017, a 15-year concession for the Exhibition and Convention Center of the City of Buenos Aires was executed by the joint venture LA RURAL S.A. - OFC S.R.L. - OGDEN ARGENTINA S.A. – ENTRETENIMIENTO UNIVERSAL S.A. UNION TRANSITORIA, which was granted pursuant a public bidding process. The members of the joint venture hold the following interests: (a) LRSA 5%; (b) OFC SRL 20%; (c) OASA 55%; and (d) EUSA 20%.

The shareholders of LRSA are Sociedad Rural Argentina and OASA, each of which owns 50% equity interest. OASA and EUSA are controlled by EHSA. Consequently, we indirectly hold a 50.00% interest in the joint venture.

The Exhibition and Convention Center has a surface area of approximately 22,800 square meters and may accommodate approximately 5,000 attendees. It has a main exhibit hall and an ancillary hall, offices and meetings rooms, arranged in three underground levels that were designed to blend into the landscape extending from the School of Law of the Universidad de Buenos Aires to Parque Thays.

Also, La Rural S.A. continues to work on the consolidation of the commercial development of the “Convention Center of Punta del Este”, through its equity participation in the company that holds the concession until 2041.

As a result of the measures adopted by Argentina’s national Government in response to the COVID- 19 pandemic, La Rural, the Buenos Aires and Punta del Este Convention Centers was closed throughout the fiscal year 2021. We expect a gradual recovery during the fiscal year 2022 given that on July 12, the protocols for holding events, conferences and exhibitions were activated.

TGLT (real estate)

TGLT is a real estate company listed on the BYMA which is mainly engaged in construction activity and residential development projects in Argentina and Uruguay.

On August 1, 2017, we exercised our preemptive subscription and accretion rights and purchased 22,225,000 Subordinated Notes Convertible into Newly Issued Shares of TGLT for an aggregate amount of USD22.2 million (USD 1.00 par value) due 2027.

On August 8, 2019 has executed with TGLT certain contracts tending to collaborate in the process of financial restructuring of said company through its recapitalization. On December 11, 2019, and in compliance with the contracts signed with TGLT on August 8, 2019, IRSA CP made the exchange of all the Convertible Notes it had of TGLT. Likewise, it subscribed preferred shares making a contribution in kind of the 100% of the shares of the company La Maltería S.A., owner of the property known as Maltería Hudson.

On February 10, 2020, the TGLT Board of Directors determined the mandatory conversion of its Convertible Negotiable Obligations and preferred shares with immediate effect, this is how IRSA CP converted its Class A and B preferred shares of TGLT into ordinary shares of the company. As of June 30, 2021, IRSA CP owns 27.8% of its capital stock.

DirecTV Arena

DirecTV Arena is an indoor stadium with unique features designed to host top-level international events, including sporting events and concerts. The price set for the transaction was USD 4.2 million. Through these types of investments, our equity stake in LRSA and through the new Convention Center of the City of Buenos Aires, we continue to expand our exposure to conventions, sporting events and entertainment, which could generate synergies with our core shopping mall business.

The DirecTV Arena stadium was closed during fiscal year 2021. On August 10, 2021 the local government established protocols for indoor events with up to 1,000 attendants. During fiscal year 2022 we expect the government to establish more flexible protocols for events, conferences, and exhibitions in indoor stadiums.

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We are Appa S.A. (former Pareto S.A.)

On October 8, 2018, the company Pareto S.A. was incorporated, with the social purpose of design, programming and development of software, mobile and web applications. As of June 30, 2021, IRSA CP’s participation in We are Appa S.A. was 93.61%.

¡Appa!, the We are Appa application, is a 100% digital customer loyalty system that promotes benefits and discounts by facilitating the consumer experience in shopping malls and offices. The current lines of business are: “¡Appa! Loyalty” consolidating services that improve the consumer experience in physical assets through discounts, parking payment, reservation of shifts and participation in raffles and “¡Appa! Corporate”, a tool that brings companies closer to their collaborators through experiences and exclusive discounts, allowing the reservation of workspaces for coworking modalities in the framework of the pandemic and the provisions of limited capacity. It is currently used by 3,672 employees from different companies.

This year ¡Appa! exceeded one million historical users, two million transactions and the launch of the payment solution and the new gift vouchers to be used both physically and virtually in shopping malls is nearby.

During fiscal year 2021, AppaShops, the company’s online marketplace, was launched, following the WeAreAppa strategy that focuses on the user experience. Although its trajectory is recent, it is generating impact as an omnichannel complement to the physical stores of the brands that traditionally operate with the company, turning them into strategic partners for the recovery of post-pandemic activity. As it is also a data-driven company, the analysis of consumer data makes it possible to make the user’s online experience a differential asset.

Finally, by the hand of AppaShops, the first pick-up point for online purchases was inaugurated in Alto Palermo. This solution allows customers not to depend on receiving packages at a particular address and time, in addition to being able to consolidate products from different brands in a single purchase. The next steps include the opening of new pick-up points and the possibility of direct delivery to the vehicle in the parking spaces of shopping malls around the country, as well as the reception of packages operated and sent by third parties to later be collected by the customer.

Avenida Inc.

As of June 30, 2021, IRSA CP indirectly owned 4.1% of Avenida Inc., a company dedicated to the e-commerce business.

Insurance

We carry all-risk insurance for our shopping malls and other buildings covering property damage caused by fire, terrorist acts, explosion, gas leak, hail, storms and wind, earthquakes, vandalism, theft and business interruption. In addition, we carry liability insurance covering any potential damage to third parties or property caused by the conduct of our business throughout Argentina. We are following all legal requirements related to mandatory insurance, including insurance required by the Occupational Risk Law (Ley de Riesgos del Trabajo), life insurance required under collective bargaining agreements and other insurance required by laws and executive orders. Our history of damages is limited to one single claim resulting from a fire in Alto Avellaneda Shopping in March 2006, a loss which was substantially recovered from our insurers. These insurance policies contain specifications, limits and deductibles which we believe are adequate to the risks to which we are exposed in our daily operations. We further maintain liability insurance covering our directors’ and corporate officers’ liability.

Information technology

We keep investing in technological innovation. The advances of society and changes in consumer habits constantly challenge us and motivate us to apply the latest technological trends to serve the visitor’s experience in the shopping malls and learn more about our clients. We continued with the company digital transformation, incorporating electronic signature, cloud based purchases and auctions platform for cost optimization named ARIBA, Robotic Process Automation or RPA automation, and we built a Datalake to help us with customer clusterization via predictive analytics and machine learning.

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This year we accelerated projects seeking to provide new alternatives to our tenants to complement the ecosystem of physical stores. APPA, the application that facilitates the experience of consumers in shopping malls, through which you can pay for parking, reserve shifts, enter virtual lines, obtain discounts, benefits and participate in promotions, exceeded one million downloads, and prepares to launch payments and gift vouchers. We also launched APPASHOPS, the company’s Marketplace, which although it is incipient, we hope will contribute to the recovery of post-pandemic activity. We will continue to innovate in accordance with the evolution of the dynamics of consumption and deployment of Omni channel and complementing physical sales in stores with online sales.

Legal Framework

Regulation and Government Supervision

The laws and regulations governing the acquisition and transfer of real estate, as well as municipal zoning ordinances, apply to the development and operation of our properties. Currently, Argentine law does not specifically regulate shopping mall leases. Since our shopping mall leases generally diverge from ordinary commercial leases, we have developed contractual provisions which are tailored to the commercial relationship with our shopping mall tenants.

Leases

Argentine law imposes certain restrictions on property owners, including:

| · | a minimum lease term of three years for all purposes, except in particular cases such as embassy, consulate or international organization venues, room with furniture for touristic purposes for less than three months, custody and bailment of goods, exhibition or offering of goods in fairs or in cases where due to the circumstances, the subject matter of the lease requires a shorter term.

Lease term limits

Under the Argentine Civil and Commercial Code lease terms may not exceed 20 years (for residential purpose) or fifty years (all other purposes). Generally, terms in our leases range from three to ten years.

Rescission rights

The Argentine Civil and Commercial Code provides that tenants may terminate leases with other destiny than home destiny, early after the first six months of the effective date. Such termination is subject to penalties which range from one to one and a half months of rent. If the tenant terminates the agreement during the first year of the lease, the penalty is one and a half month’s rent and if termination occurs after the first year of lease, the penalty is one month’s rent.

Other

The Argentine Civil and Commercial Code, among other rules, repealed the Urban Lease Law No. 23,091, which set forth a rule similar to the one described above, but established the obligation to give at least 60 days’ prior notice of exercise of the tenant’s unilateral termination right. There are no court rulings to date with respect to the new regulations related to: (i) the tenant’s unilateral termination right; or (ii) the possibility of agreeing a penalty different from that described above upon such termination.

While current policy discourages government regulation of leases, there can be no assurance that additional regulations will not be imposed in the future by Congress, including regulations similar to those previously in place. Furthermore, most of our leases provide that the tenants pay all costs and taxes related to the property in proportion to their respective leasable areas. In the event of a significant increase in such costs and taxes, the government may respond to political pressure to intervene by regulating this practice, thereby adversely affecting our rental income.

The Argentine Civil and Commercial Code enables landlords to pursue what is known as an “executory proceeding” if a tenant fails to pay rent when due. In executory proceedings, debtors have fewer defenses available to prevent foreclosure, making these proceedings substantially shorter, as the origin of the debt is not in question and the trial should focus on the formalities of the contract. The Argentine Civil and Commercial Code also permits special eviction proceedings, which are carried out in the same way as ordinary proceedings. The Argentine Civil and Commercial Code also requires that a residential tenant receive at least 10 days’ prior notice when a landlord demands payment of rent due if a breach prior to eviction occurs but does not impose any such requirement for other leases. However, court cases pending resolution and numerous procedural hurdles have resulted in significant delays to eviction proceedings in the commercial context, which generally last from six months to two years from the date of filing of the suit for eviction.

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Development and use of the land

In the City of Buenos Aires, where the vast majority of our properties are located, we are subject to the following regulations:

Buenos Aires Urban Planning Code

The Buenos Aires Urban Planning Code (Código de Planeamiento Urbano de la Ciudad de Buenos Aires) generally restricts the density and use of property and regulates physical features of improvements to property, such as height, design, set back and overhang, consistent with the city’s urban planning policy. The Secretary of Urban Planning of the City of Buenos Aires (Secretaría de Planeamiento Urbano) is responsible for implementing and enforcing the Buenos Aires Urban Planning Code.

Buenos Aires Building Code

The Buenos Aires Building Code (Código de Edificación de la Ciudad de Buenos Aires) complements the Buenos Aires Urban Planning Code regulating the use and development of property in the City of Buenos Aires. The Building Code requires developers to obtain building permits, including submitting architectural plans for review of the Secretary of Work and Public Services, to monitor regulatory compliance.

Buenos Aires Authorizations and Licenses Code

The Authorizations and Licenses Code (Código de Habilitaciones de la Ciudad de Buenos Aires) sets forth the conditions under which authorizations or licenses to operate may be granted. The General Bureau of Authorizations and Licenses is responsible for implementing and enforcing the Authorizations and Licenses Code. Outside the city of Buenos Aires, our real estate activities are subject to similar municipal zoning, building, occupation and environmental regulations, which must also comply with national standards. In some jurisdictions we may also be subject to regulation of large commercial areas, which require approval of the location of these areas. We believe that all of our real estate properties are in material compliance with relevant laws, ordinances and regulations.

Sales and ownership

Real Estate Installment Sales Law

The Real Estate Installment Sales Law No. 14,005, as amended by Law No. 23,266 and Decree No. 2015/85, or “Real Estate Installment Sales Act,” imposes a series of requirements on contracts for the sale of subdivided real estate property including, for example, that the purchase price for a property is payable in installments. The law requires, among other things:

Registration of intent to sell the property in subdivided plots with the Real Estate Registry in the jurisdiction where the property is located. Registration is only permitted for unencumbered property. Mortgaged property may only be registered if creditors agree to divide the debt in accordance with subdivided plots. Creditors may be judicially compelled to agree to the partition.

Preliminary registration with the Real Estate Registry of the purchase instrument within 30 days after its execution.

Once the property is registered, the installment sale must be completed in a manner consistent with the Real Estate Installment Sales Act. If a dispute arises over the title between the purchaser and third party creditors of the seller, the installment purchaser who has duly registered the purchase instrument will have title to the plot. The purchaser can demand conveyance of title after at least 25% of the purchase price has been paid, although the seller may record a mortgage over the subject property to secure payment of the balance of the purchase price.

After paying of 25% of the purchase price or advancing of at least 50% of construction, the Real Estate Installment Sales Act prohibits termination of the sales contract for failure by the purchaser to pay the balance of the purchase price but gives the seller the right to enforce under any mortgage on the property.

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Buildings Law

Buildings Law No. 19,724 (Ley de Pre horizontalidad) was repealed by the Argentine Civil and Commercial Code which provides that for purposes of execution of sales agreements for units under construction, the owner or developer must purchase insurance in favor of prospective purchasers against the risk of frustration of the development pursuant to the agreement for any reason. A breach of this obligation precludes the owner from exercising any right against the purchaser—such as demanding payment of any outstanding installments due—unless he/she fully complies with their obligations, but does not prevent the purchaser from exercising its rights against the seller.

Protection of the Disabled

The Law for Protection of the Disabled No. 22,431, enacted on March 16, 1981, as amended, provides that properties under construction or that are being remodeled must provide access for handicapped persons. Public spaces, entrances, hallways, elevators and common use facilities must be designed to provide mobility for impaired individuals. Buildings developed before enactment of the Protection for the Disabled Law must be reformatted to provide requisite access. Buildings that, because of their architectural design, may not be adapted to the use by the physically impaired, are exempted from these requirements.

Other regulations

Consumer relations, consumer or end user protection

Article 42 of the Argentine Constitution establishes that consumers and users of goods and services have a right to protection of health, safety and economic interests in a consumer relationship. Consumer Protection Law No. 24,240, as amended, regulates several issues concerning the protection of consumers and end users in a consumer relationship, in the arrangement and execution of contracts. The Consumer Protection Law, and the applicable sections of the Argentine Civil and Commercial Code are intended to regulate the constitutional right conferred under the Constitution on the weakest party to the consumer relationship and prevent potential abuses deriving from the stronger bargaining position of vendors of goods and services in a market economy where standard form contracts are widespread.

These laws deem void and unenforceable contractual provisions included in consumer contracts, that:

| · | deprive obligations of their nature or limit liability for damages;
| · | imply a waiver or restriction of consumer rights and an extension of seller rights; and
| · | impose the shifting of the burden of proof from the consumer to the seller in order to protect the consumers.

In addition, the Consumer Protection Law imposes penalties ranging from warnings to the forfeiture of concession rights, privileges, tax regimes or special credits to which the sanctioned party may be entitled, including closing down establishments for a term of up to 30 days.

The Consumer Protection Law and the Argentine Civil and Commercial Code define consumers or end users as the individuals or legal entities that acquire or use goods or services, free of charge or for a price for their own final use or benefit or that of their family or social group. The protection under the laws afforded to consumers and end users encompasses the entire consumer relationship, from the offering of the product or service, to cover more than just those relationships established by means of a contract. Providers of goods and services include those who produce, import, distribute or commercialize goods or supply services to consumers or users (but excludes professionals whose services require a college degree or higher who are required to register in officially recognized professional organizations).

The Argentine Civil and Commercial Code defines a consumer agreement as one that is entered into between a consumer or end user and an individual or entity that manufactures goods or provides services to consumers for private, family or social use. The Consumer Protection Law imposes a range of penalties for violation of its provisions, from warnings to the forfeiture of concession rights, and establishes joint and several liability of each participant in the chain of distribution or whose trademark on the thing or service for damages caused to consumers derived from a defect or risk inherent in the thing or the provision of a service.

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The Consumer Protection Law excludes the services supplied by professionals that require a college degree and registration in officially recognized professional organizations or by a governmental authority. However, this law regulates the advertisements that promote the services of such professionals.

The Consumer Protection Law determines that the information contained in the offer addressed to undetermined prospective consumers binds the offeror during the period when the offer is made until its public revocation. Further, it determines that specifications included in advertisements, announcements, prospectuses, circulars or other media bind the offeror and are considered part of the contract entered into by the consumer.

Pursuant to Resolution No. 104/2005 issued by the Secretariat of Technical Coordination reporting to the Argentine Ministry of Treasury, Consumer Protection Law adopted Resolution No. 21/2004 issued by the Mercosur’s Common Market Group, persons engaged in internet commerce must precisely disclose the characteristics of the products and/or services offered and the sale terms. Failure to comply with the terms of the offer is deemed an unjustified denial to sell and may give rise to sanctions.

On September 17, 2014, the Argentine Congress enacted Law No. 26,993 called “Conflict Resolution in Consumer Relationships System” law that provides for creation of new administrative and judicial procedures. The law created a bicameral administrative system: the Preliminary Conciliation Service for Consumer Relations (Servicio de Conciliación Previa en las Relaciones de Consumo), or “COPREC,” and the Consumer Relations Audit, and a number of courts assigned to the resolution of conflicts between consumers and providers (Fuero Judicial Nacional de Consumo). The amount of any filed claim may not exceed a fixed amount equivalent to 55 adjustable minimum wages, as determined by the Ministry of Labor, Employment and Social Security. The claim must be filed with the administrative agency. If an agreement is not reached, the claimant may file the claim in court. While COPREC is currently in full force and effect, the court system (Fuero Judicial Nacional de Consumo) is still pending. Therefore, any current claim must be filed with existing courts. A considerable number of claims pending against us are expected to be settled within the framework of this system.

Antitrust Law

Law No. 27,442, as amended, or the “Antitrust Law,” prevents collusive practices by market participants and requires administrative approval for transactions that according to the Antitrust Law constitute an economic concentration. According to this law, mergers, transfers of goodwill, acquisitions of property or rights over shares, capital or other convertible securities, or similar transactions by which the acquirer controls or substantially influences a company, are considered as an economic concentration. Whenever an economic concentration involves a company or companies and the aggregate volume of business in Argentina of the companies concerned exceeds 100 million mobile units, the respective concentration must be submitted for approval to the CNDC. The request for approval may be filed, either prior to the transaction or the implementing of the control take.

For the purpose of determining the volume of the business mentioned on the paragraph before, the CNDC will annually inform the amount in legal currency that will apply during the corresponding year. For that purpose, the CNDC will consider the mobile unit value current at the last business day of the previous year. When a request for approval is filed, the CNDC may (i) authorize the transaction, (ii) subordinate the transaction to the accomplishment of certain conditions or (iii) reject the authorization.

The Antitrust Law provides that economic concentrations in which the transaction amount and the value of the assets subject to acquisition or disposition do not exceed 20 million mobile units each do not require approval. When the amount of the transactions consummated in the preceding 12 months exceeds in aggregate 20 million mobile units or 60 million mobile units in the preceding 36 months, these transactions require CNDC approval.

As our consolidated annual sales volume and our parent’s consolidated annual sales volume exceed ARS 200.0 million, we must give notice to the CNDC of any concentration provided for under the Antitrust Law.

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Money laundering

For more information about money laundering see, “Item 10. Additional Information—E. Money Laundering.”

Environmental Law

Our activities are subject to several national, provincial and municipal environmental provisions.

Article 41 of the Argentine Constitution, as amended in 1994, provides that all Argentine inhabitants have the right to a healthy and balanced environment fit for human development and have the duty to preserve it. Environmental damage shall bring about primarily the obligation to restore it as provided by applicable law. The authorities shall control the protection of this right, the rational use of natural resources, the preservation of the natural and cultural heritage and of biodiversity and shall also provide for environmental information and education. The National Government shall establish minimum standards for environmental protection whereas Provincial and Municipal Governments shall fix specific standards and regulatory provisions.

On November 6, 2009, the Argentine Congress passed Law No. 25,675. Such law regulates the minimum standards for the achievement of a sustainable environment and the preservation and protection of biodiversity and fixes environmental policy goals.

Law No. 25,675 establishes the activities that will be subject to an environmental impact assessment procedure and certain requirements applicable thereto. In addition, such Law sets forth the duties and obligations that will be triggered by any damage to the environment and mainly provides for restoration of the environment to its former condition or, if that is not technically feasible, for payment of compensation in lieu thereof. Such Law also fosters environmental education and provides for certain minimum reporting obligations to be fulfilled by natural and legal entities.

In addition, the CNV Rules require the obligation to report to the CNV any events of any nature and fortuitous acts that seriously hinder or could potentially hinder performance of our activities, including any events that generate or may generate significant impacts on the environment, providing details on the consequences thereof.

The new Argentine Civil and Commercial Code has introduced as a novel feature the acknowledgement of collective rights, including the right to a healthy and balanced environment. Accordingly, the Argentine Civil and Commercial Code expressly sets forth that the law does not protect an abusive exercise of individual rights if such exercise could have an adverse impact on the environment and the rights with a collective impact in general.

Environmental, Social and Corporate Governance

We are an integral part of the communities in which our business units are based. It is our objective to articulate the interests of our businesses with the agenda of these communities, collaborating with the generation of economic, social and environmental value. Based on this orientation, our Corporate Social Responsibility (CSR) strategy is based on making our business units the scene of actions that fall within the Sustainable Development Goals (SDGs) defined by the United Nations. Some of these SDGS are Inequality Reduction; Gender Equality; Water Care; Responsible Production and Consumption; Waste; Partnership for the Goals; Quality Education; Value Chain; Sustainable Cities and Communities; Good Health & Well- Being; Environmental Care; Climate Action and Volunteering.

It should be noted that more than 110 million people per year visit our shopping malls, which is both a great advantage and a huge responsibility for the dissemination of our community activities. They are the ideal place to disseminate and make visible the topics of interest of the society in general, to become aware and act. This agenda of issues is agreed with the social organizations of each community, with the public sector and academics in each subject. This is how we strengthen our bond, focusing on medium and small organizations, generating long-term alliances, incorporating actors in the value chain and collaborating with actors in the communities where we develop.

In the office buildings we have large national and international companies as tenants. They are organizations that are committed at a local and global level with the impact of their actions, both economically, socially and environmentally. They are our strategic partners in actions that we develop in the communities where the buildings are located.

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We agree on the agenda of topics with the social organizations of each community, with the public sector and specialists in each subject. In this way, we strengthen ties and generate long-term alliances, we incorporate actors in the value chain and collaborate with actors in the communities where we operate.

Actions during the COVID19 emergency

From the IRSA Group we carry out different actions in the face of the pandemic to collaborate in the face of the emergency in the country. The commitment as a company is to work to improve the communities in which we are present and in the face of an event such as the one that occurred, it was important to act quickly and determinedly.

From the first moment we made ourselves available to collaborate from our place. We join in communicating the prevention and hygiene measures in our offices and internal communication spaces for employees, as well as from our social networks to the entire public of our shopping malls. At the same time, we join different initiatives of both donation and corporate volunteering.

Environmental Management

Environmental management is a commitment assumed by us, which is declared through its Environmental Policy and manifests itself in everyday management.

| · | We innovate in the use of the best practices for the development of our activities.
| · | We work to achieve balance in the efficient use of resources and a growing real estate development. We care about the relationship with our people and the neighbors of the communities where we choose to work, of which we are part.
| · | We plan for the long term, seeking to develop in a sustainable way so that our environment can also be enjoyed by future generations.
| · | We work towards continuous improvement, environmental protection and compliance with current legislation and regulations, including those to which we voluntarily subscribe.
| · | We are part of a process of cultural change, which we share and extend to the people with whom we interact.

Our establishments have a large influence of visitors and are also followed on social networks through the different sites and web portals, placing us in a privileged place from which we promote good environmental practices.

The Environment area works on the training and environmental awareness of our collaborators and suppliers in the outstanding topics of the year due to their particular interest and the usual ones of environmental management in search of continuous improvement.

Environmental Management Certification

Pursuing improvement in the environmental management of shopping malls, we have 4 ISO 14001 certified shopping malls: Alto Palermo, Dot Baires, Patio Bullrich and Distrito Arcos. Annually we submit to the evaluation of an external auditor who reviews our processes and assists us in those points that can be improved.

We continue to work on new certifications and take on more challenges. Our City of Buenos Aires shopping malls are already part of the Circular Economy Network, which is an initiative of the Government of the Autonomous City of Buenos Aires that generates an articulated work space between the different actors that are part of society (companies, NGOs and universities) to build a more sustainable city. Alto Palermo Shopping, Dot Baires Shopping, Alcorta Shopping, Patio Bullrich, Distrito Arcos and Abasto Shopping have already signed the adhesion.

Likewise, the latest office buildings developed by the Company have the necessary characteristics to achieve LEED certifications. The Zetta building inaugurated in May 2019, located in the Polo Dot shopping complex in the north of the Autonomous City of Buenos Aires, achieved the Leed Silver Core & Shell certification and the Della Paolera building, located in the area of Catalinas, inaugurated in December 2020, has the necessary characteristics to receive the LEED Gold Core & Shell certification.

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We work to achieve a balance between efficient use of resources and growing real estate development. We care about the relationship with our people and the neighbors of the communities where we choose to work, of which we are part.

Training and qualification program

We have developed a training and qualification program in environmental management, regarding waste, efficient use of resources such as water and energy. Talks and actions are held for shopping malls personnel, properties tenants, and related suppliers, involving urban waste recovery cooperatives to share their experience, learn about their work and the importance of carrying out proper waste management.

IRSA Foundation

Fundación IRSA was created in 1996 with the purpose of supporting and generating actions that promote the development of people so that they can face their needs and expectations autonomously. With this objective, it develops its own programs and projects in the community that stimulate them to achieve a full life. It strengthens civil society organizations because it relies on joint and network work that enhances individualities and sustainable links.

Since 2014, Fundación IRSA has invested in improving hospital equipment and providing state-of-the-art devices and health supplies to hospitals and health centers in our country. Also during 6 years it has promoted the training and education of young professionals who make up the Argentine health care system, with a special focus on early childhood nutrition and nursing.

Within the framework of the health and economic impact of COVID-19, Fundación IRSA strengthened the social strengthening actions that it had been implementing since 2016. With the aim of helping the most vulnerable populations have a healthy diet, it allocated significant economic resources to more than 20 community kitchens to supplement the monthly feeding of children and young people with fruits, vegetables, meats and dairy products and to provide themselves with cleaning and personal hygiene items.

The MultipliDAR program continued through which all employees of the Group’s companies are offered the possibility of multiplying their personal donations to civil society organizations in their referential world to strengthen their solidarity initiative. Through the MultipliDAR program, the amount that the collaborator has previously donated to the entity is equalized, doubled and tripled.

The Foundation supports initiatives that enhance the interaction between education and culture for the growth of society. It seeks educational innovation through comprehensive access to technology with new ways of learning and more active teaching strategies. Together with other social organizations, it works for the recognition of the value that exists in identity and respect for diversity.

With an attentive look at current needs and recurring problems, Fundación IRSA has decided in 2020 to accompany “Red por la Infancia” in its process of creating the “Observatory on First Practices for Addressing Child Abuse.” In its first stage, it is proposed to gather evidence to contribute to the construction of a diagnosis of the situation and identify the degree of normative development, the pending challenges at the legislative level, the degree of progress in public policies and in the administration of justice in child protection against violence.

IRSA, under the integral coordination of the Foundation, continued its work as an investor in the First Bond of Social Impact of Argentina in which the State and the companies worked together aiming at generating employment conditions for extremely vulnerable youth through a new methodology of payment for results. In a complex context due to the pandemic, the program managed to train 880 young people in the Autonomous City of Buenos Aires and 287 of them to enter the labor market. Next year ends this first experience in Argentina, key for the development of future Bonds focused on different social problems, providing relevant data and information that will open the way to develop a more efficient Public Policy based on the local evidence generated.

During the last fiscal year 2020-2021, Fundación IRSA worked with 78 civil society organizations, making a direct social investment of ARS 126,955,959.

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Puerta 18 Foundation

The Puerta 18 Foundation is a free space for artistic and technological creation for young people from 13 to 24 years old. Through a non-formal education proposal, it encourages the development of skills, vocations, and talents in young people through the multiple resources offered by technology.

Throughout its 13 years, more than 5,000 young people were trained for free and today there are more than 200 who have been inserted into work in areas related to their training in the institution.

Our view is based on placing the young person at the center of the proposal, which revolves around their interests and needs, and where educators act as facilitators using technology as a tool. Some of the disciplines we work with are: Graphic Design, Photography, UX, Programming, Comprehensive Video Production, 3D Modeling and Animation, Videogames, Robotics, among others.

Fundación Museo de los Niños Abasto

The Fundación Museo de los Niños Abasto is an interactive museum that recreates the spaces of a city where children can play to be a doctor, cameraman, captain, sailor, banker, cook, broadcaster, journalist, nurse, actress, mom and dad, and many other things.

The Museum proposes an enriching and alternative mitin space that integrates play, movement, perception, understanding and expression, encouraging curiosity, interest in knowing and imagination from a transforming perspective.

Based on the Declaration of the Rights of the Child, it has been designed to encourage each child to develop their own potentials: “learning by doing” and “playing and having fun learning” are fundamental concepts for us.

The Museum is dedicated to boys up to 12 years old, to their families, educators and through all of them to the community. And for the little ones, up to 3 years old, it has two soft rooms specially built to stimulate their activity.

In addition, it has an Exhibition Hall and an Auditorium where shows, film screenings, conferences, book presentations and various events take place.

C. Organizational Structure

The following table presents information relating to our ownership interest and the percentage of our consolidated total net revenue represented by our subsidiaries as of June 30, 2021:

|  |  |  |  |  | % of ownership interest held by the Group |
Name of the entity |  | Country |  | Main activity |  | 06.30.2021 |  | 06.30.2020 |  | 06.30.2019 |
IRSA’s direct interest: |  |  |  |  |  |  |  |  |  |  |
IRSA CP (1) |  | Argentina |  | Real estate |  | 79.92% |  | 80.65% |  | 83.80% |
E-Commerce Latina S.A. |  | Argentina |  | Investment |  | 100.00% |  | 100.00% |  | 100.00% |
Efanur S.A. |  | Uruguay |  | Investment |  | 100.00% |  | 100.00% |  | 100.00% |
Hoteles Argentinos S.A.U. |  | Argentina |  | Hotel |  | 100.00% |  | 100.00% |  | 100.00% |
Inversora Bolívar S.A. |  | Argentina |  | Investment |  | 100.00% |  | 100.00% |  | 100.00% |
Llao Llao Resorts S.A. (2) |  | Argentina |  | Hotel |  | 50.00% |  | 50.00% |  | 50.00% |
Nuevas Fronteras S.A. |  | Argentina |  | Hotel |  | 76.34% |  | 76.34% |  | 76.34% |
Palermo Invest S.A. |  | Argentina |  | Investment |  | 100.00% |  | 100.00% |  | 100.00% |
Ritelco S.A. |  | Uruguay |  | Investment |  | 100.00% |  | 100.00% |  | 100.00% |
Tyrus S.A. |  | Uruguay |  | Investment |  | 100.00% |  | 100.00% |  | 100.00% |
U.T. IRSA y Galerias Pacifico (2) |  | Argentina |  | Investment |  | 50.00% |  | 50.00% |  | 50.00% |
IRSA CP’s direct interest: |  |  |  |  |  |  |  |  |  |  |
Arcos del Gourmet S.A. |  | Argentina |  | Real estate |  | 90.00% |  | 90.00% |  | 90.00% |
Emprendimiento Recoleta S.A. |  | Argentina |  | Real estate |  | 53.68% |  | 53.68% |  | 53.68% |
Fibesa S.A. |  | Argentina |  | Real estate |  | 100.00% |  | 100.00% |  | 100.00% |
Panamerican Mall S.A. |  | Argentina |  | Real estate |  | 80.00% |  | 80.00% |  | 80.00% |
Shopping Neuquén S.A. |  | Argentina |  | Real estate |  | 99.95% |  | 99.95% |  | 99.95% |
Torodur S.A. |  | Uruguay |  | Investment |  | 100.00% |  | 100.00% |  | 100.00% |
EHSA |  | Argentina |  | Investment |  | 70.00% |  | 70.00% |  | 70.00% |
Centro de Entretenimiento La Plata |  | Argentina |  | Real estate |  | 100.00% |  | 100.00% |  | 100.00% |
La Maltería |  | Argentina |  | Real estate |  | - |  | - |  | 100.00% |
Pareto S.A. |  | Argentina |  | Design and software development |  | 93.63% |  | 69.69% |  | 69.69% |
Tyrus S.A. ‘s direct interest: |  |  |  |  |  |  |  |  |  |  |
DFL and DN BV |  | Bermuda’s / Netherlands |  | Investment |  | 99.50% |  | 97.04% |  | 96.46% |
IRSA International LLC |  | USA |  | Investment |  | 100.00% |  | 100.00% |  | 100.00% |
Jiwin S.A. |  | Uruguay |  | Investment |  | 100.00% |  | 100.00% |  | 100.00% |
Liveck S.A. |  | Uruguay |  | Investment |  | 100.00% |  | 100.00% |  | 100.00% |
Real Estate Investment Group V LP (REIG V) |  | Bermuda’s |  | Investment |  | - |  | - |  | 100.00% |
Real Estate Strategies LLC |  | USA |  | Investment |  | 100.00% |  | 100.00% |  | 100.00% |
Efanur S.A. ‘s direct interest: |  |  |  |  |  |  |  |  |  |  |
Real Estate Investment Group VII LP (REIG VII) |  | Bermuda’s |  | Investment |  | 100.00% |  | 100.00% |  | 100.00% |

(1) | Includes interest held through E-Commerce Latina S.A. and Tyrus S.A.
(2) | The Company has consolidated the investment in Llao Llao Resorts S.A. and UT IRSA and Galerías Pacífico considering its equity interest and a shareholder agreement that confers it majority of votes in the decision making process.

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The Company takes into account both quantitative and qualitative aspects in order to determine which non-controlling interests in subsidiaries are considered significant.

D. Property, Plant and Equipment

In the ordinary course of business, the leases property or spaces for administrative or commercial use both in Argentina and Israel under operating lease arrangements. The agreements include several clauses, including but not limited, to fixed, variable or adjustable payments.

The following table sets forth certain information about our properties as of June 30, 2021:

Property (6) |  | Date of Acquisition |  | Leasable/ Sale sqm / Rooms |  | Location |  | Net Book Value ARS (2) |  | Use |  | Occupancy rate |
República Building (3) |  | Apr-08 |  | 19,885 |  | City of Buenos Aires |  | 13,542 |  | Office Rental |  | 66.9% |
Bankboston Tower (3)(13) |  | Aug-07 |  | - |  | City of Buenos Aires |  | 267 |  | Office Rental |  | 93.5% |
Bouchard 551 |  | mar-07 |  | - |  | City of Buenos Aires |  | 458 |  | Office Rental |  | - |
Intercontinental Plaza Building (3) |  | nov-97 |  | 2,979 |  | City of Buenos Aires |  | 1,946 |  | Office Rental |  | 100.0% |
Dot Building (3) |  | nov-06 |  | 11,242 |  | City of Buenos Aires |  | 6,639 |  | Office Rental |  | 84.9% |
Zetta Building |  | jun-19 |  | 32,173 |  | City of Buenos Aires |  | 19,363 |  | Office Rental |  | 84.7% |
Suipacha 664 |  | nov-91 |  | 11,465 |  | City of Buenos Aires |  | 2,257 |  | Office Rental |  | 17.3% |
Phillips Building |  | jun-17 |  | 8,017 |  | City of Buenos Aires |  | 4,199 |  | Office Rental |  | 93.1% |
San Martín plot (ex Nobleza Picardo) |  | may-11 |  | 109,610 |  | Province of Buenos Aires, Argentina |  | 8,818 |  | Other Rentals |  | 22.5% |
Other Properties(5) |  | N/A |  | N/A |  | City and Province of Buenos Aires / Detroit U.S |  | 6,918 |  | Other Rentals |  | N/A |
Abasto Shopping(3) |  | nov-99 |  | 36,796 |  | City of Buenos Aires, Argentina |  | 7,556 |  | Shopping Mall |  | 99.7% |
Alto Palermo Shopping(3) |  | Dec-97 |  | 20,045 |  | City of Buenos Aires, Argentina |  | 7,376 |  | Shopping Mall |  | 98.4% |
Alto Avellaneda(3) |  | Dec-97 |  | 39,838 |  | Province of Buenos Aires, Argentina |  | 5,518 |  | Shopping Mall |  | 64.8% |
Alcorta Shopping(3)(12) |  | jun-97 |  | 15,812 |  | City of Buenos Aires, Argentina |  | 5,876 |  | Shopping Mall |  | 90.6% |
Patio Bullrich(3) |  | oct-98 |  | 11,396 |  | City of Buenos Aires, Argentina |  | 2,130 |  | Shopping Mall |  | 87.8% |
Alto Noa(3) |  | nov-95 |  | 19,314 |  | City of Salta, Argentina |  | 1,157 |  | Shopping Mall |  | 98.1% |
Mendoza Plaza(3) |  | Dec-94 |  | 43,312 |  | Mendoza, Argentina |  | 1,772 |  | Shopping Mall |  | 97.3% |
Alto Rosario (3) |  | Dec-04 |  | 33,731 |  | Santa Fe, Argentina |  | 4,597 |  | Shopping Mall |  | 95.4% |
Córdoba Shopping –Villa Cabrera(3)(11) |  | Dec-06 |  | 15,361 |  | City of Córdoba, Argentina |  | 1,358 |  | Shopping Mall |  | 91.4% |
Dot Baires Shopping(3) |  | may-09 |  | 47,493 |  | City of Buenos Aires, Argentina |  | 6,287 |  | Shopping Mall |  | 80.7% |
Soleil Premium Outlet(3) |  | jul-10 |  | 15,158 |  | Province of Buenos Aires, Argentina |  | 1,924 |  | Shopping Mall |  | 90.3% |
La Ribera Shopping(3) |  | Aug-11 |  | 10,530 |  | Santa Fe, Argentina |  | 570 |  | Shopping Mall |  | 96,2% |
Distrito Arcos (3) |  | Dec-14 |  | 14,335 |  | City of Buenos Aires, Argentina |  | 2,085 |  | Shopping Mall |  | 100.0% |
Alto Comahue(3) |  | mar-15 |  | 11,705 |  | Neuquén, Argentina |  | 1,037 |  | Shopping Mall |  | 92.4% |
Patio Olmos(3) |  | sep-97 |  | - |  | City of Córdoba, Argentina |  | 1,428 |  | Shopping Mall |  | N/A |
Caballito Plot of Land (3) |  | nov-97 |  | - |  | City of Buenos Aires |  | 5,150 |  | Land Reserve |  | N/A |
Santa María del Plata |  | oct-97 |  | 116,100 |  | City of Buenos Aires |  | 32,328 |  | Other Rentals |  | 25.9% |
Catalinas Building |  | may-10 |  | 27,530 |  | City of Buenos Aires |  | 19,816 |  | Offices and Other Rentals |  | 80.2% |
Luján plot of land(3) |  | may-08 |  | 1,160,000 |  | Province of Buenos Aires, Argentina |  | 1,504 |  | Mixed uses |  | N/A |
Other Land Reserves (4) |  | N/A |  | N/A |  | City and Province of Buenos Aires |  | 10,715 |  | Land Reserve |  | N/A |
Building annexed to Alto Palermo Shopping |  | N/A |  | 0 |  | City of Buenos Aires |  | 3,090 |  | Properties under development |  | N/A |
Other Developments (15) |  | N/A |  | 0 |  | City of Buenos Aires |  | 373 |  | Properties under development |  | N/A |
Buildable potentials (14) |  | N/A |  | N/A |  | City of Buenos Aires, Córdoba and Santa Fé |  | 4,486 |  | Other Rentals |  | N/A |
Intercontinental Hotel (7) (12) |  | nov-97 |  | 313 |  | City of Buenos Aires |  | 845 |  | Hotel |  | 8.5% |
Libertador Hotel (8) (12) |  | mar-98 |  | 200 |  | City of Buenos Aires |  | 376 |  | Hotel |  | 7.9% |
Llao Llao Hotel (9)(10) (12) |  | jun-97 |  | 205 |  | City of Bariloche |  | 1,354 |  | Hotel |  | 21.9% |

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(1) | Total leasable area for each property. Excludes common areas and parking spaces.
(2) | Cost of acquisition or development plus improvements, less accumulated depreciation, less allowances for our Hotels (considering inflation adjustment). The remaining properties are valued at fair value.
(3) | Through IRSA CP.
(4) | Includes the following land reserves: Pontevedra plot; Mariano Acosta Plot, San Luis Plot, Pilar plot and Merlo plot (through IRSA) and Intercontinental Plot, the building and plot annexed to Dot, Mendoza Plot, Mendoza 2.992 East Av. Plot and La Plata plot (through IRSA CP).
(5) | Includes the following properties: Anchorena 665, Anchorena 545 (Chanta IV), Zelaya 3102, 3103 y 3105, Madero 1020, La Adela, Paseo del Sol, Libertador 498, Beruti Parking Space Santa María del Plata and Detroit properties.
(6) | Percentage of occupation of each property. Land reserves are assets that the company keeps in the portfolio for future developments.
(7) | Through Nuevas Fronteras S.A.
(8) | Through Hoteles Argentinos S.A.U.
(9) | Through Llao Llao Resorts S.A.
(10) | Includes “Terreno Bariloche.”
(11) | The cinema building located at Córdoba Shopping – Villa Cabrera is included in Investment Properties, which is encumbered by a right of antichresis as a result of loan due to Empalme by NAI INTERNACIONAL II Inc. Includes “Ocampo parking spaces”
(12) | Express in number of rooms.
(13) | The offices were totally sold during the fiscal year.
(14) | Includes buildable potentials related to the following shopping malls: Patio Bullrich, Alto Palermo, Córdoba Shopping and Alto Rosario.
(15) | Includes the following developments: EH UT, PH Office Park, Phillips Building and Alto Avellaneda.

ITEM 4A. Unresolved staff comments

This item is not applicable.

ITEM 5. Operating and Financial Review and Prospects

A. Operating Results

The following management’s discussion and analysis of our financial condition and results of operations should be read together with our Audited Consolidated Financial Statements and related notes appearing elsewhere in this Annual Report. This discussion and analysis of our financial condition and results of operations contains forward-looking statements that involve risks, uncertainties and assumptions. These forward-looking statements include such words as, “expects,” “anticipates,” “intends,” “believes” and similar language. Our actual results may differ materially and adversely from those anticipated in these forward-looking statements as a result of many factors, including without limitation those set forth elsewhere in this Annual Report. See Item 3 “Key Information – D. Risk Factors”for a more complete discussion of the economic and industry-wide factors relevant to us.

The objective of this Management´s Discussion and Analysis section is to provide a description of our economic and financial condition as of June 30, 2021, particularly considering that the operating results for such fiscal year have been affected by the restrictions due to the COVID19 pandemic. The Company's shopping malls and hotels were closed for most of the year while the offices remained operational, even though most of the tenants adopted the remote work modality. In this sense, the purpose of this management´s discussion and analysis is to describe the impact of the pandemic and other macroeconomic or operational drivers over our business segments in order to explain the reasons or causes that originate our results of operations.

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General

We prepare our Audited Consolidated Financial Statements in pesos and in accordance with IFRS, as issued by the IASB, and with CNV Rules.

Historically, we measured the value of our portfolio of investment properties at cost. Our Board of Directors resolved to change our accounting policy for measuring the value of our investment properties from the cost model to the fair value model, as permitted under IAS 40.

Our Audited Consolidated Financial Statements and the financial information included elsewhere in this Annual Report have been prepared in accordance with IFRS. We have determined that, as of July 1, 2018, the Argentine economy qualifies as a hyperinflationary economy according to the guidelines of IAS 29 since the total cumulative inflation in Argentina in the 36 months prior to July 1, 2018 exceeded 100%. IAS 29 requires that the financial information recorded in a hyperinflationary currency be adjusted by applying a general price index and expressed in the measuring unit (the hyperinflationary currency) current at the end of the reporting period. Therefore, our Audited Consolidated Financial Statements included in this Annual Report have been adjusted by applying a general price index and expressed in the measuring unit (the hyperinflationary currency) current at the end of the reporting period (June 30, 2021). See “Risk Factors—Risks Relating to Argentina—A high level of uncertainty with regard to these economic variables, and a general lack of stability in terms of inflation, could have a negative impact on economic activity and adversely affect our financial condition

Overview

We are engaged, directly and indirectly through subsidiaries and joint ventures, in a range of diversified activities, primarily in real estate, including:

i. | the acquisition, development and operation of shopping malls,
ii. | the acquisition and development of office buildings and other non-shopping mall properties primarily for rental purposes,
iii. | the development and sale of residential properties,
iv. | the acquisition and operation of luxury hotels,
v. | the acquisition of undeveloped land reserves for future development or sale, and
vi. | selective investments outside Argentina.

Effects of the global macroeconomic factors

Most of our assets are located in Argentina, where we conduct our operations, and in Israel. Therefore, our financial condition and the results of our operations are significantly dependent upon economic conditions prevailing in both countries.

The table below shows Argentina’s GDP, inflation rates, dollar exchange rates, the appreciation (depreciation) of the Peso against the U.S. dollar, and the appreciation (depreciation) of the NIS against the U.S. dollar for the indicated periods (inter-annual information—which is the 12 month period preceding the dates presented—is presented to conform to our fiscal year periods).

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|  | Fiscal year ended June 30, |
|  | 2021 |  |  | 2020 |  |  | 2019 |
|  | (inter-annual data) |
GDP (1) |  |  | 17.9 | % |  |  | (19.1 | )% |  |  | (3.7 | )%
Inflation (IPIM) (2) |  |  | 65.1 | % |  |  | 39.7 | % |  |  | 60.8 | %
Inflation (CPI) |  |  | 50.2 | % |  |  | 42.8 | % |  |  | 55.8 | %
Depreciation of the Peso against the U.S. dollar |  | (35.9%) |  |  |  | (66.1 | )% |  |  | (47.1 | )%
Average exchange rate per USD1.00 (3) |  | ARS 95.6200 |  |  | ARS 70.3600 |  |  | ARS 42.3630 |

(1) | Represents inter annual growth of the last twelve months GDP average at constant prices (2004). Historical data is maintained, as exposed originally by us in previous 20-Fs.
(2) | IPIM (Índice de Precios Internos al por Mayor) is the wholesale price index as measured by the Argentine Ministry of Treasury.
(3) | Represents average of the selling and buying exchange rate quoted by Banco de la Nación Argentina as of June 30, 2021. As of September 23, 2021, the exchange rate was 98.4400 per U.S. Dollar.

Sources: INDEC and Banco de la Nación Argentina.

Argentine GDP increased 17.9% during our 2021 fiscal year, compared to a contraction of 19.1% in our fiscal year 2020. Nationally, shopping mall sales increased 448.8% compared to fiscal 2020 and 59.5% comparing fiscal 2021 to fiscal 2019. As of June 30, 2021, the unemployment rate was at 9.6% of the country’s economically active population compared to 13.1% as of June 30, 2020. The monthly estimate of economic activity (“EMAE”) as of June 30, 2021, increased by 10.8% compared to the same month in 2020. In the second quarter of 2021, the activity rate was 45.9%, the employment rate was 41.5% and the unemployment rate was 9.6%.

In the context of the health emergency related to the COVID-19 pandemic, the main impact on the labor market was verified in the dynamics of the employment rate (TE), which measures the proportion of employed persons in relation to the total population. The second quarter of 2021 basically showed no changes compared to the first quarter of the year; but an increase of 8.1 p.p. compared to the second quarter of 2020, driven by the lower proportion of people who were able to report to work during 2020. Due to COVID-19 pandemic, total sales at current prices in the month of June 2021 relevant to the survey reached a total of ARS 15,805.8 million, which represents an increase of 448.8% compared to the month of June 2020 and 59.5% compared to the month of June 2019.

Changes in short- and long-term interest rates, unemployment and inflation rates may reduce the availability of consumer credit and the purchasing power of individuals who frequent shopping malls. These factors, combined with low GDP growth, may reduce general consumption rates at our shopping malls. Since most of the lease agreements at our shopping malls, our main source of revenue, require tenants to pay a percentage of their total sales as rent, a general reduction in consumption may reduce our revenue. A reduction in the number of shoppers at our shopping malls and, consequently, in the demand for parking, may also reduce our revenue from services rendered.

It is worth mentioning that Argentina government, is moving forward with the vaccination plan. As of the date of this Annual Report, more than 64.3 million doses of the COVID-19 vaccine had been administered. Currently, there are more than 24.4 million people fully vaccinated in Argentina, representing approximately 54% of Argentina's total population. The advance of the virus could imply an economic deterioration of any of Argentina’s main trading partners (including Brazil, the European Union, China and the United States) as a result of the adoption of measures to contain the pandemic similar to those implemented in Argentina. The contraction in the economies of Argentina’s trading partners could have a significant adverse impact on Argentina’s trade balance through lower demand for exports or through a fall in the prices of agricultural commodities, negatively affecting the economy of Argentina.

Effects of inflation

The following are annual inflation rates during the fiscal years indicated, based on information published by the INDEC, an entity dependent of the Argentine Ministry of Treasury.

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|  | Consumerprice index |  |  | Wholesaleprice index |
|  | (inter-annual data) |
Fiscal year ended June 30, |  |  |  |  |  |
2019 |  |  | 55.8 | % |  |  | 60.8 | %
2020 |  |  | 42.8 | % |  |  | 39.7 | %
2021 |  |  | 50.2 | % |  |  | 65.1 | %

The current structure of IRSA CP’s leases contracts for shopping mall tenants generally includes provisions that provide for payment of variable rent, which is a percentage of of the IRSA CP’s shopping mall tenant’s sales. Therefore, the projected cash flows for these shopping malls generally are highly correlated with GDP growth and consumption power.

For the leases of spaces at our shopping malls we use for most tenants a standard lease agreement, the terms and conditions of which are described elsewhere in this annual report However, our largest tenants generally negotiate better terms for their respective leases. No assurance can be given that lease terms will be as set forth in the standard lease agreement.

The rent specified in our leases generally is the higher of (i) a monthly Base Rent and (ii) a specified percentage of the store’s monthly gross sales, which generally ranges between 3% and 12% of such sales. In addition, pursuant to the rent escalation clause in most of our leases, a tenant’s Base Rent generally increases on a quarterly and cumulative basis following the IPC index. Although many of our lease agreements contain price adjustment provisions, these are not based on an official index nor do they reflect the inflation index. In the event of litigation regarding these adjustment provisions, there can be no assurance that we may be able to enforce such clauses contained in our lease agreements. See “Information of the Company—Business Overview—Our Shopping Malls—Principal Terms of our Leases.”

Continuing increases in the rate of inflation are likely to have an adverse effect on our operations. Although higher inflation rates in Argentina may increase minimum lease payments, given that tenants tend to pass on any increases in their expenses to consumers, higher inflation may lead to an increase in the prices our tenants charge consumers for their products and services, which may ultimately reduce their sales volumes and consequently the portion of rent we receive based on our tenants’ gross sales.In addition, we measure the fair market value of our shopping malls based upon the estimated cash flows generated by such assets which, as discussed in previous paragraphs, is directly related to consumer spending since a significant component of the rent payment received from our tenants is tied to the sales realized by such tenants (i.e is a percentage of the sales of our tenants). Therefore, macroeconomic conditions in Argentina have an impact in the fair market value of our shopping malls as measured in Argentine pesos. Specifically, since our tenant’s products have been adjusted (increased) to account for inflation of the Argentine peso, our expected cash flows from our shopping malls have similarly increased in nominal terms since rent is largely dependent on sales of our tenants in pesos.

Seasonality

Our business is directly affected by seasonality, influencing the level of our tenants’ sales. During Argentine summer holidays (January and February) our tenants’ sales typically reach their lowest level, whereas during winter holidays (July) and in Christmas (December) they reach their maximum level. Clothing retailers generally change their collections in spring and autumn, positively affecting our shopping malls’ sales. Discount sales at the end of each season are also one of the main seasonal factors affecting our business. See “Item 5.A. Operating Results – COVID-19 Pandemic.”

Effects of interest rate fluctuations

Most of our U.S. dollar-denominated debt accrues interest at a fixed rate. An increase in interest rates will result in a significant increase in our financing costs and may materially affect our financial condition or our results of operations.

In addition, a significant increase of interest rates could deteriorate the terms and conditions in which our tenants obtain financing from banks and financial institutions in the market. As a consequence of that, if they suffer liquidity problems the collection of our lease contracts could be affected by an increase in the level of delinquency.

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Effects of foreign currency fluctuations

A significant portion of our financial debt is denominated in U.S. dollars. Therefore, a devaluation or depreciation of the peso against the U.S. dollar would increase our indebtedness measured in pesos and materially affect our results of operations. Foreign currency exchange restrictions imposed by the Argentine government could prevent or restrict our access to U.S. dollars, affecting our ability to service our U.S. dollar denominated- liabilities.

In addition, contracts for the rental of office buildings are generally stated in U.S. dollars, so a devaluation or depreciation of the peso against the U.S. dollar would increase the risk of delinquency on our lease receivables.

As discussed above, we calculate the fair market value of our office properties based on comparable sales transactions. Typically real estate transactions in Argentina are transacted in U.S. dollars. Therefore, a devaluation or depreciation of the peso against the U.S. dollar would increase the value of our real estate properties measured in pesos and an appreciation of the peso would have the opposite effect. In addition, foreign currency exchange restrictions imposed by Argentine government could prevent or restrict the access to U.S. dollars for the acquisition of real estate properties, which are denominated and transacted in U.S dollars in Argentina, that could affect our ability to sell or acquire real estate properties and could have an adverse impact in real estate prices.

For more information about the evolution of the U.S dollar / Peso exchange rate, see “Exchange Rate and Exchange Controls.”

Fluctuations in the market value of our investment properties as a result of revaluations

Currently, our interests in investment properties are revalued quarterly. Any increase or decrease in the fair value of our investment properties, based on appraisal reports prepared by appraisers, is recorded in our consolidated statement of income and other comprehensive income for the fiscal year during which the revaluation occurs. The revaluation of our properties may therefore result in significant fluctuations in the results of our operations.

Property values are affected by, among other factors, a) shopping malls, which are mainly impacted by the discount rate used (WACC), the projected GDP growth and the projected inflation and devaluation of the Argentine peso for future periods and b) office buildings, which are mostly impacted by the supply and demand of comparable properties and the U.S. dollar / peso exchange rate at the reporting period, as office buildings fair value is generally established in U.S. dollars. For example:

| · | during the 2019 fiscal year, there was a 46.8% depreciation of the peso from ARS 28.85 to USD 1.00 as of June 30, 2018 to ARS 42.36 to USD 1.00 as of June 30, 2019;
| · | during the 2020 fiscal year, there was a 66.1% depreciation of the peso from ARS 42.363 to USD 1.00 as of June 30, 2019 to ARS 70.36 to USD 1.00 as of June 30, 2020; and
| · | during the 2021 fiscal year, there was a 35.9% depreciation of the peso from ARS 70.36 to USD 1.00 as of June 30, 2020 to ARS 95.62 to USD 1.00 as of June 30, 2021.

The value of the Company investment properties is determined in U.S. dollar pursuant to the methodologies further described in “Critical Accounting Policies and estimates” and then determined in pesos (the Company functional and presentation currency).

In the past, purchases and sales of office buildings were usually settled in U.S. dollars, However, as a consequence of the restrictions imposed by the Central Bank on foreign exchange transactions, purchase and sales of office buildings are now usually settled in Argentine pesos, using an implicit exchange rate that is higher than the official one (as it was the case in the operations carried out by IRSA CP in the past few months). Therefore, IRSA CP has valued its office buildings and undeveloped parcels of land in Argentine pesos at the end of the year, considering the situation described above, which results in a gain with respect to the values previously recorded.

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Factors Affecting Comparability of our Results

Comparability of information

Factors affecting comparability of our results of operations

COVID-19 Pandemic

The current estimated impacts of the COVID-19 pandemic on the Company as of the date of this Annual Report are described below:

| · | During the fourth quarter of fiscal year 2021, shopping centers in the Buenos Aires Metropolitan Area suspended their operations between April 16 and June 11, operating only those segments considered essential such as pharmacies, supermarkets, and banks. The impact on Revenues for the closing months due to the pandemic was 40.3% in fiscal year 2021
| · | Regarding the office segment, although most of the tenants continue to work in the home office mode, they are operational with strict safety and hygiene protocols. As of today, we have experienced a slight increase in the vacancy rates, although we have not suffered a deterioration in collections.
| · | La Rural, the Buenos Aires and Punta del Este Convention Centers and the Arena stadium, establishments that the Group owns directly or indirectly, were closed from March 20, 2020, to July 12, 2021, date from which the protocols for holding events, conferences and exhibitions were activated.
| · | The Libertador and Intercontinental hotels in the City of Buenos Aires have been operating since December 2020, although with low occupancy levels. The Llao Llao Resort, located in Bariloche, was able to operate during the fourth quarter with average occupancy levels thanks to the domestic tourism.

The final extent of the Coronavirus outbreak and its impact on the country’s economy is still uncertain. However, although it has produced significant short-term effects, they are not expected to affect business continuity and the Company’s ability to meet its financial commitments for the next twelve months.

We are closely monitoring the situation and taking all necessary measures to preserve human life and the Company’s businesses.

Operations Center in Argentina

Office buildings

During the year ended June 30, 2019, our Office portfolio incorporated the Zetta building, an office building of 32,173 square meters of gross leasable area and 11 floors located in the commercial complex “Polo Dot” in Buenos Aires City.

During the year ended June 30, 2020, we have incorporated as an investment property the building “Della Paolera” located in Catalinas District in Buenos Aires. It consists of 35,208 square meters of gross leasable area over 30 office floors and includes 316 parking spaces in 4 basements. On April 29, 2021, the Company inaugurated its newest office development in Buenos Aires, which was operative since December 2020. The Company owns 80% of the building (28,000 sqm).

On July 15, 2020, the Company signed an agreement to sell a mid-rise floor with an area of approximately 1,063 sqm and 5 parking spaces of BankBoston Tower located at 265 Della Paolera in Catalinas district of Buenos Aires City.

Likewise, on August 25,

2020, the Company sold and transferred 5 additional floors with a gross rental area of 6,235 sqm and 25 garages located in the building.

On July 30, 2020, the Company sold the entire “Bouchard 710” tower, located in Plaza Roma District of Buenos Aires City. The building has 15,014 sqm of gross leasable area 12 office floors and 116 parking spaces.

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Sales and developments

On July 11, 2018, we acquired the Maltería Hudson plot that has a surface area of 147,895 square meters and approximately 40,000 GLA at the intersection of Route 2 and Buenos Aires - La Plata highway.

On December 2019, due to the TGLT recapilazation agreement, we signed with TGLT a subscription commitment for Class A preferred shares under Class A Public Offer to make a contribution in kind of shares of the company La Maltería SA, 100% of its ownership.

Shopping malls

During the fiscal years ended June 30, 2021 and 2020, we maintained the same portfolio of operating shopping malls. During the fiscal year ended June 30, 2019, the surface area of our Shopping Malls segment was reduced by 11,875 square meter due to the return of Buenos Aires Design, whose concession terminated in November 2018.

Selected Consolidated Financial Data

The following table presents our selected financial data as of June 30, 2021, 2020, 2019 and 2018 and for the fiscal years ended June 30, 2021, 2020, 2019, 2018 and 2017. The selected consolidated statement of income and other comprehensive income data and the selected consolidated statement of cash flow data for the fiscal years ended June 30, 2021, 2020 and 2019 and the selected consolidated statement of financial position data as of June 30, 2021 and 2020 have been prepared in accordance with IFRS, as issued by the IASB, and CNV Rules, and have been derived from our Audited Consolidated Financial Statements included in this Annual Report.

The summary consolidated statement of income and other comprehensive income and cash flow data for the fiscal years ended June 30, 2018 and 2017 and the summary consolidated statement of financial position data as of June 30, 2019 and 2018 have been restated pursuant to IAS 29 to reflect the effect of hyperinflation in Argentina. As a result of such restatement, the selected financial information included in this Annual Report differ from previously reported financial information. Also, the summary consolidated statement of income and other comprehensive income and cash flow data for the fiscal years ended June 30, 2018 and 2017 have been retroactively restated to reflect the loss of control of IDBD and DIC.

You should read the information below in conjunction with our Audited Consolidated Financial Statements, including the notes thereto.

In the following table, we have translated peso amounts into U.S. dollars at the seller exchange rate as of June 30, 2021, quoted by the Banco de la Nación Argentina, which was ARS 95.7200 per USD 1.00. The average of the seller exchange rate for the fiscal year 2021, quoted by Banco de la Nación Argentina was ARS 83.9081. We make no representation that these peso or U.S. dollar amounts actually represent, could have been or could be converted into U.S. dollars at the rates indicated, at any particular rate or at all. See “Local Exchange Market and Exchange Rates” and “Risk Factors—Risks Relating to Argentina— Continuing high rates of inflation may have an adverse effect on the economy and our business, financial condition and results of operations”. For more information see “ITEM 5. Operating and Financial Review and Prospects—Factors Affecting Comparability of our Results.”

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Summarized Consolidated Financial and Other Information

|  | For the fiscal year ended June 30, |
|  | 2021 |  |  | 2021 |  |  | 2020 |  |  | 2019 |  |  | 2018 |  |  | 2017 |
|  | (in millions of USD)(i)(ii) |  |  | (in millions of ARS; except per share data) |
CONSOLIDATED STATEMENT OF INCOME AND OTHER COMPREHENSIVE INCOME DATA |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenue |  |  | 136 |  |  |  | 12,978 |  |  |  | 21,263 |  |  |  | 28,004 |  |  |  | 27,237 |  |  |  | 27,706 |
Costs |  |  | (69 | ) |  |  | (6,564 | ) |  |  | (8,872 | ) |  |  | (10,461 | ) |  |  | (10,781 | ) |  |  | (11,608 | )
Gross profit |  |  | 67 |  |  |  | 6,414 |  |  |  | 12,391 |  |  |  | 17,543 |  |  |  | 16,456 |  |  |  | 16,098 |
Net gain / (loss) from changes in fair value of investment properties |  |  | (81 | ) |  |  | (7,770 | ) |  |  | 50,664 |  |  |  | (58,231 | ) |  |  | 28,779 |  |  |  | (11,093 | )
General and administrative expenses |  |  | (32 | ) |  |  | (3,017 | ) |  |  | (3,301 | ) |  |  | (4,086 | ) |  |  | (3,513 | ) |  |  | (3,351 | )
Selling expenses |  |  | (16 | ) |  |  | (1,490 | ) |  |  | (1,822 | ) |  |  | (1,619 | ) |  |  | (1,667 | ) |  |  | (1,623 | )
Impairment of associates and joint ventures |  |  | - |  |  |  | - |  |  |  | - |  |  |  |  |  |  |  |  |  |  |  |  |
Other operating results, net |  |  | (1 | ) |  |  | (86 | ) |  |  | 119 |  |  |  | (470 | ) |  |  | (38 | ) |  |  | (1,376 | )
Profit / (loss) from operations |  |  | (62 | ) |  |  | (5,949 | ) |  |  | 58,051 |  |  |  | (46,863 | ) |  |  | 40,017 |  |  |  | (1,345 | )
Share of profit / (loss) of associates and joint ventures |  |  | (46 | ) |  |  | (4,380 | ) |  |  | 10,847 |  |  |  | (10,587 | ) |  |  | (4,954 | ) |  |  | (1,706 | )
Profit / (loss) from operations before financial results and income tax |  |  | (108 | ) |  |  | (10,329 | ) |  |  | 68,898 |  |  |  | (57,450 | ) |  |  | 35,063 |  |  |  | (3,051 | )
Finance income |  |  | 4 |  |  |  | 361 |  |  |  | 320 |  |  |  | 281 |  |  |  | 1,127 |  |  |  | 1,452 |
Finance cost |  |  | (76 | ) |  |  | (7,298 | ) |  |  | (9,251 | ) |  |  | (7,187 | ) |  |  | (6,461 | ) |  |  | (5,600 | )
Other financial results |  |  | 123 |  |  |  | 11,717 |  |  |  | (9,288 | ) |  |  | 3,370 |  |  |  | (16,508 | ) |  |  | 3,220 |
Inflation adjustment |  |  | (15 | ) |  |  | (1,446 | ) |  |  | (16 | ) |  |  | (1,028 | ) |  |  | (1,324 | ) |  |  | (820 | )
Financial results, Net |  |  | 35 |  |  |  | 3,334 |  |  |  | (18,235 | ) |  |  | (4,564 | ) |  |  | (23,166 | ) |  |  | (1,748 | )
Profit/ (loss) before income tax |  |  | (73 | ) |  |  | (6,995 | ) |  |  | 50,663 |  |  |  | (62,014 | ) |  |  | 11,897 |  |  |  | (4,799 | )
Income tax expense |  |  | (227 | ) |  |  | (21,673 | ) |  |  | (10,065 | ) |  |  | 6,760 |  |  |  | 15,982 |  |  |  | (1,578 | )
Profit / (Loss) from continuing operations |  |  | (300 | ) |  |  | (28,668 | ) |  |  | 40,598 |  |  |  | (55,254 | ) |  |  | 27,879 |  |  |  | (6,377 | )
Profit / (Loss) from discontinued operation |  |  | (93 | ) |  |  | (8,923 | ) |  |  | (4,947 | ) |  |  | (2,380 | ) |  |  | 22,006 |  |  |  | 12,922 |
Total Profit / (Loss) for the year |  |  | (393 | ) |  |  | (37,591 | ) |  |  | 35,651 |  |  |  | (57,634 | ) |  |  | 49,885 |  |  |  | 6,545 |
Other comprehensive income (loss): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Items that may be reclassified subsequently to profit or loss: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Currency translation adjustment |  |  | (4 | ) |  |  | (372 | ) |  |  | 687 |  |  |  | 427 |  |  |  | (35 | ) |  |  | (19,437 | )
Revaluation reserve |  |  | 4 |  |  |  | 383 |  |  |  | 605 |  |  |  | - |  |  |  | - |  |  |  | - |
Items that may not be reclassified subsequently to profit or loss, net of income tax |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other comprehensive income / (loss) from continuing operations |  |  | - |  |  |  | 11 |  |  |  | 1,292 |  |  |  | 427 |  |  |  | (35 | ) |  |  | (19,437 | )
Other comprehensive income / (loss) from discontinued operations |  |  | (120 | ) |  |  | (11,443 | ) |  |  | 20,008 |  |  |  | (3,469 | ) |  |  | 20,320 |  |  |  | 26,887 |
Total other comprehensive income / (loss) for the year |  |  | (120 | ) |  |  | (11,432 | ) |  |  | 21,300 |  |  |  | (3,042 | ) |  |  | 20,285 |  |  |  | 7,450 |
Total comprehensive income / (loss) for the year |  |  | (513 | ) |  |  | (49,023 | ) |  |  | 56,951 |  |  |  | (60,676 | ) |  |  | 70,170 |  |  |  | 13,995 |
Profit / (loss) from continuing operations attributable to: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity holders of the parent |  |  | (239 | ) |  |  | (22,879 | ) |  |  | 29,932 |  |  |  | (48,819 | ) |  |  | 22,613 |  |  |  | (5,994 | )
Non-controlling interest |  |  | (61 | ) |  |  | (5,789 | ) |  |  | 10,666 |  |  |  | (6,435 | ) |  |  | 5,266 |  |  |  | (383 | )
Total profit / (loss) attributable to: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity holders of the parent |  |  | (313 | ) |  |  | (29,929 | ) |  |  | 21,405 |  |  |  | (54,988 | ) |  |  | 31,615 |  |  |  | (2,404 | )
Non-controlling interest |  |  | (80 | ) |  |  | (7,662 | ) |  |  | 14,246 |  |  |  | (2,646 | ) |  |  | 18,270 |  |  |  | 8,949 |
Profit / (loss) per common share from continuing operations attributable to equity holders of the parent: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  | (0.41 | ) |  |  | (38.88 | ) |  |  | 52.02 |  |  |  | (84.91 | ) |  |  | 54.95 |  |  |  | (4.18 | )
Diluted |  |  | (0.41 | ) |  |  | (38.88 | ) |  |  | 51.88 |  |  |  | (84.91 | ) |  |  | 54.63 |  |  |  | (4.18 | )
Total profit / (loss) per common share attributable to equity holders of the parent: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  | (0.53 | ) |  |  | (50.86 | ) |  |  | 37.20 |  |  |  | (95.64 | ) |  |  | 39.31 |  |  |  | (18.32 | )
Diluted |  |  | (0.53 | ) |  |  | (50.86 | ) |  |  | 37.10 |  |  |  | (95.64 | ) |  |  | 39.31 |  |  |  | (18.32 | )
Total comprehensive income / (loss) from continuing operations |  |  | (300 | ) |  |  | (28,657 | ) |  |  | 41,890 |  |  |  | (54,828 | ) |  |  | 27,845 |  |  |  | (25,813 | )
Total comprehensive income / (loss) from discontinued operations |  |  | (213 | ) |  |  | (20,366 | ) |  |  | 15,061 |  |  |  | (5,848 | ) |  |  | 42,325 |  |  |  | 39,808 |
Total comprehensive income / (loss) for the year |  |  | (513 | ) |  |  | (49,023 | ) |  |  | 56,951 |  |  |  | (60,676 | ) |  |  | 70,170 |  |  |  | 13,995 |
Total comprehensive income / (loss) from continued operation attributable to: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity holders of the parent |  |  | (232 | ) |  |  | (22,163 | ) |  |  | 34,509 |  |  |  | (48,394 | ) |  |  | 22,284 |  |  |  | (24,323 | )
Non-controlling interest |  |  | (68 | ) |  |  | (6,494 | ) |  |  | 7,381 |  |  |  | (6,434 | ) |  |  | 5,561 |  |  |  | (1,490 | )
Total comprehensive income / (loss) attributable to: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity holders of the parent |  |  | (364 | ) |  |  | (34,810 | ) |  |  | 19,927 |  |  |  | (56,396 | ) |  |  | 26,565 |  |  |  | 2,146 |
Non-controlling interest |  |  | (149 | ) |  |  | (14,213 | ) |  |  | 37,024 |  |  |  | (4,280 | ) |  |  | 43,605 |  |  |  | 11,849 |
CASH FLOW DATA |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net cash generated by / (used in) operating activities |  |  | 15 |  |  |  | 1,456 |  |  |  | 46,731 |  |  |  | 40,616 |  |  |  | 30,671 |  |  |  | 28,434 |
Net cash generated by / (used in) investing activities |  |  | 710 |  |  |  | 67,880 |  |  |  | 61,049 |  |  |  | 16,807 |  |  |  | (45,860 | ) |  |  | (8,476 | )
Net cash generated by / (used in) financing activities |  |  | (511 | ) |  |  | (48,840 | ) |  |  | (114,343 | ) |  |  | (41,686 | ) |  |  | (9,256 | ) |  |  | 7,410 |

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|  | For the fiscal year ended June 30, |
|  | 2021 |  |  | 2021 |  |  | 2020 |  |  | 2019 |  |  | 2018 |
|  | (in millions of USD) (i)(ii) |  |  | (in millions of ARS) |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION DATA |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
ASSETS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-current assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment properties |  |  | 1,916 |  |  |  | 183,152 |  |  |  | 341,776 |  |  |  | 500,955 |  |  |  | 543,630 |
Property, plant and equipment |  |  | 43 |  |  |  | 4,146 |  |  |  | 56,670 |  |  |  | 47,921 |  |  |  | 47,452 |
Trading properties |  |  | 17 |  |  |  | 1,644 |  |  |  | 7,294 |  |  |  | 11,770 |  |  |  | 22,206 |
Intangible assets |  |  | 25 |  |  |  | 2,400 |  |  |  | 41,732 |  |  |  | 38,456 |  |  |  | 41,408 |
Right-of-use assets |  |  | 8 |  |  |  | 811 |  |  |  | 29,828 |  |  |  | - |  |  |  | - |
Other assets |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 52 |  |  |  | 631 |
Investment in associates and joint ventures |  |  | 127 |  |  |  | 12,165 |  |  |  | 111,740 |  |  |  | 66,748 |  |  |  | 86,558 |
Deferred income tax assets |  |  | 5 |  |  |  | 446 |  |  |  | 951 |  |  |  | 857 |  |  |  | 1,196 |
Income tax and Minimum Presumed Income Tax credit |  |  | - |  |  |  | 30 |  |  |  | 38 |  |  |  | 324 |  |  |  | 1,381 |
Restricted assets |  |  | - |  |  |  | - |  |  |  | 2,810 |  |  |  | 6,609 |  |  |  | 6,827 |
Trade and other receivables |  |  | 30 |  |  |  | 2,847 |  |  |  | 34,738 |  |  |  | 26,555 |  |  |  | 27,194 |
Employee benefits |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Investments in financial assets |  |  | 13 |  |  |  | 1,218 |  |  |  | 5,277 |  |  |  | 6,200 |  |  |  | 5,727 |
Financial assets and other assets held for sale |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 8,968 |  |  |  | 26,009 |
Derivative financial instruments |  |  | - |  |  |  | - |  |  |  | 213 |  |  |  | 204 |  |  |  | - |
Total non-current assets |  |  | 2,184 |  |  |  | 208,859 |  |  |  | 633,067 |  |  |  | 715,619 |  |  |  | 810,219 |
Current Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trading properties |  |  | 1 |  |  |  | 114 |  |  |  | 3,479 |  |  |  | 785 |  |  |  | 10,943 |
Inventories |  |  | 1 |  |  |  | 72 |  |  |  | 7,034 |  |  |  | 2,463 |  |  |  | 2,104 |
Restricted assets |  |  | - |  |  |  | - |  |  |  | 9,326 |  |  |  | 9,405 |  |  |  | 14,175 |
Income tax credit |  |  | 2 |  |  |  | 165 |  |  |  | 461 |  |  |  | 837 |  |  |  | 1,330 |
Group of assets held for sale |  |  | - |  |  |  | - |  |  |  | 62,600 |  |  |  | 17,270 |  |  |  | 17,338 |
Trade and other receivables |  |  | 89 |  |  |  | 8,475 |  |  |  | 55,789 |  |  |  | 48,395 |  |  |  | 49,933 |
Investments in financial assets |  |  | 33 |  |  |  | 3,166 |  |  |  | 29,190 |  |  |  | 69,164 |  |  |  | 85,128 |
Financial assets and other assets held for sale |  |  | - |  |  |  | - |  |  |  | 5,072 |  |  |  | 25,033 |  |  |  | 14,915 |
Derivative financial instruments |  |  | - |  |  |  | - |  |  |  | 317 |  |  |  | 88 |  |  |  | 290 |
Cash and cash equivalents |  |  | 20 |  |  |  | 1,931 |  |  |  | 135,719 |  |  |  | 129,837 |  |  |  | 124,628 |
Total Current Assets |  |  | 146 |  |  |  | 13,923 |  |  |  | 308,987 |  |  |  | 303,277 |  |  |  | 320,784 |
TOTAL ASSETS |  |  | 2,330 |  |  |  | 222,782 |  |  |  | 942,054 |  |  |  | 1,018,896 |  |  |  | 1,131,003 |
SHAREHOLDERS’ EQUITY |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Shareholders’ equity attributable to equity holders of the parent |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Share capital |  |  | 7 |  |  |  | 655 |  |  |  | 575 |  |  |  | 575 |  |  |  | 575 |
Treasury stock |  |  | - |  |  |  | 2 |  |  |  | 2 |  |  |  | 4 |  |  |  | 4 |
Inflation adjustment of share capital and treasury stock |  |  | 216 |  |  |  | 20,620 |  |  |  | 20,617 |  |  |  | 20,616 |  |  |  | 20,616 |
Warrant |  |  | 19 |  |  |  | 1,779 |  |  |  | - |  |  |  |  |  |  |  |  |
Share premium |  |  | 252 |  |  |  | 24,109 |  |  |  | 21,839 |  |  |  | 21,839 |  |  |  | 21,839 |
Additional paid-in capital from treasury stock |  |  | 2 |  |  |  | 148 |  |  |  | 142 |  |  |  | 116 |  |  |  | 116 |
Legal reserve |  |  | 17 |  |  |  | 1,603 |  |  |  | 728 |  |  |  | 728 |  |  |  | 728 |
Special reserve |  |  | 148 |  |  |  | 14,125 |  |  |  | 14,125 |  |  |  | 14,121 |  |  |  | 14,121 |
Other reserves |  |  | 285 |  |  |  | 27,293 |  |  |  | 8,854 |  |  |  | 102,208 |  |  |  | 7,372 |
Retained earnings |  |  | (299 | ) |  |  | (28,502 | ) |  |  | 18,923 |  |  |  | (91,351 | ) |  |  | 66,296 |
Total capital and reserves attributable to equity holders of the parent |  |  | 647 |  |  |  | 61,832 |  |  |  | 85,805 |  |  |  | 68,856 |  |  |  | 131,667 |
Non-controlling interest |  |  | 218 |  |  |  | 20,892 |  |  |  | 98,423 |  |  |  | 115,372 |  |  |  | 124,897 |
TOTAL SHAREHOLDERS’ EQUITY |  |  | 865 |  |  |  | 82,724 |  |  |  | 184,228 |  |  |  | 184,228 |  |  |  | 256,564 |
LIABILITIES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-current liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trade and other payables |  |  | 15 |  |  |  | 1,387 |  |  |  | 3,258 |  |  |  | 3,763 |  |  |  | 12,073 |
Lease liabilities |  |  | 9 |  |  |  | 852 |  |  |  | 20,091 |  |  |  | - |  |  |  | - |
Borrowings |  |  | 489 |  |  |  | 46,724 |  |  |  | 447,323 |  |  |  | 573,222 |  |  |  | 604,636 |
Derivative financial instruments |  |  | - |  |  |  | 9 |  |  |  | 83 |  |  |  | 2,207 |  |  |  | 80 |
Deferred income tax liabilities |  |  | 718 |  |  |  | 68,748 |  |  |  | 66,144 |  |  |  | 78,991 |  |  |  | 88,648 |
Employee benefits |  |  | - |  |  |  | - |  |  |  | 671 |  |  |  | 282 |  |  |  | 367 |
Salaries and social security liabilities |  |  | 1 |  |  |  | 86 |  |  |  | 293 |  |  |  | 236 |  |  |  | 223 |
Income tax and minimum presumed income tax “MPIT”) liabilities |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Provisions |  |  | 1 |  |  |  | 114 |  |  |  | 4,601 |  |  |  | 17,201 |  |  |  | 11,852 |
Total non-current liabilities |  |  | 1,233 |  |  |  | 117,920 |  |  |  | 542,464 |  |  |  | 675,902 |  |  |  | 717,879 |
Current liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trade and other payables |  |  | 53 |  |  |  | 5,103 |  |  |  | 44,567 |  |  |  | 39,846 |  |  |  | 49,217 |
Group of liabilities held for sale |  |  | - |  |  |  | - |  |  |  | 33,362 |  |  |  | 12,221 |  |  |  | 10,831 |
Lease liabilities |  |  | 1 |  |  |  | 54 |  |  |  | 7,313 |  |  |  | - |  |  |  | - |
Salaries and social security liabilities |  |  | 5 |  |  |  | 436 |  |  |  | 6,166 |  |  |  | 4,522 |  |  |  | 5,197 |
Borrowings |  |  | 160 |  |  |  | 15,409 |  |  |  | 117,668 |  |  |  | 97,683 |  |  |  | 85,450 |
Derivative financial instruments |  |  | 1 |  |  |  | 48 |  |  |  | 1,682 |  |  |  | 53 |  |  |  | 606 |
Provisions |  |  | 2 |  |  |  | 147 |  |  |  | 3,665 |  |  |  | 3,699 |  |  |  | 3,516 |
Income tax and minimum presumed income tax (“MPIT”) liabilities |  |  | 10 |  |  |  | 941 |  |  |  | 939 |  |  |  | 742 |  |  |  | 1,743 |
Total current liabilities |  |  | 232 |  |  |  | 22,138 |  |  |  | 215,362 |  |  |  | 158,766 |  |  |  | 156,560 |
TOTAL LIABILITIES |  |  | 1,465 |  |  |  | 140,058 |  |  |  | 757,826 |  |  |  | 834,668 |  |  |  | 874,439 |
TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES |  |  | 2,330 |  |  |  | 222,782 |  |  |  | 942,054 |  |  |  | 1,018,896 |  |  |  | 1,131,003 |

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|  | As of and for the fiscal year ended June 30, |
|  | 2021 |  |  | 2021 |  |  | 2020 |  |  | 2019 |  |  | 2018 |
|  | (in millions of USD) (i) (ii) |  |  | (in millions of ARS) (except for number of shares, per share and GDS data and ratios) |
OTHER FINANCIAL DATA |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic net (loss)/ income per common share from continuing operations (1) |  |  | (0.41 | ) |  |  | (38.88 | ) |  |  | 52.02 |  |  |  | (84.91 | ) |  |  | 54.95 |
Diluted net (loss)/ income per common share from continuing operations (2) |  |  | (0.41 | ) |  |  | (38.88 | ) |  |  | 51.88 |  |  |  | (84.91 | ) |  |  | 54.63 |
Basic net (loss)/ income per GDS from continuing operations (1) (3) |  |  | (4.07 | ) |  |  | (388.80 | ) |  |  | 520.20 |  |  |  | (849.10 | ) |  |  | 549.50 |
Diluted net (loss)/ income per GDS from continuing operations (2) (3) |  |  | (4.07 | ) |  |  | (388.80 | ) |  |  | 518.80 |  |  |  | (849.10 | ) |  |  | 546.30 |
Basic net (loss)/ income per common share |  |  | (0.53 | ) |  |  | (50.86 | ) |  |  | 37.20 |  |  |  | (95.64 | ) |  |  | 39.31 |
Diluted net (loss)/ income per common share |  |  | (0.53 | ) |  |  | (50.86 | ) |  |  | 37.10 |  |  |  | (95.64 | ) |  |  | 39.31 |
Basic net (loss)/ income per GDS |  |  | (5.32 | ) |  |  | (508.60 | ) |  |  | 372.00 |  |  |  | (956.40 | ) |  |  | 393.10 |
Diluted net (loss)/ income per GDS |  |  | (5.32 | ) |  |  | (508.60 | ) |  |  | 371.00 |  |  |  | (956.40 | ) |  |  | 393.10 |
Diluted weighted – average number of common shares |  |  | 599,279,210 |  |  |  | 599,279,210 |  |  |  | 578,676,471 |  |  |  | 578,676,471 |  |  |  | 578,676,471 |
Depreciation and amortization |  |  | 7 |  |  |  | 642 |  |  |  | 716 |  |  |  | 561 |  |  |  | 452 |
Capital expenditures |  |  | 28 |  |  |  | 2,693 |  |  |  | 16,718 |  |  |  | 28,170 |  |  |  | 28,634 |
Working capital |  |  | (86 | ) |  |  | (8,215 | ) |  |  | 93,625 |  |  |  | 144,511 |  |  |  | 164,224 |
Ratio of current assets to current liabilities |  |  | 0.01 |  |  |  | 0.63 |  |  |  | 1.43 |  |  |  | 1.91 |  |  |  | 2.05 |
Ratio of shareholders’ equity to total liabilities |  |  | 0.01 |  |  |  | 0.59 |  |  |  | 0.24 |  |  |  | 0.22 |  |  |  | 0.29 |
Ratio of non-current assets to total assets |  |  | 0.01 |  |  |  | 0.94 |  |  |  | 0.67 |  |  |  | 0.70 |  |  |  | 0.72 |
Profitability |  |  | (0.00 | ) |  |  | (0.28 | ) |  |  | 0.39 |  |  |  | - |  |  |  | - |
Dividend paid |  |  | 27 |  |  |  | 2,587 |  |  |  | 333 |  |  |  | - |  |  |  | (1,543 | )
Dividends per common share |  |  | 0.04 |  |  |  | 3.95 |  |  |  | 0.58 |  |  |  | - |  |  |  | (2.68 | )
Dividends per GDS |  |  | 0.41 |  |  |  | 39.50 |  |  |  | 5.79 |  |  |  | - |  |  |  | (26.83 | )
Number of common shares outstanding |  |  | 656,710,423 |  |  |  | 656,710,423 |  |  |  | 576,056,589 |  |  |  | 574,940,605 |  |  |  | 575,421,864 |
Capital Stock |  |  | 655 |  |  |  | 655 |  |  |  | 575 |  |  |  | 575 |  |  |  | 575 |

___________

(i) | Totals may not sum due to rounding.
(ii) | Solely for the convenience of the reader we have translated peso amounts into U.S. dollars at the seller exchange rate quoted by Banco de la Nación Argentina as of June 30, 2021, which was ARS 95.62 per USD 1.00. We make no representation that the peso or U.S. dollar amounts actually represent, could have been or could be converted into U.S. dollars at the rates indicated, at any particular rate or at all. See “Local Exchange Market and Exchange Rates.”
(1) | Basic net income per share is calculated by dividing the net income available to holders of common shares for the period / year by the weighted average number of shares outstanding during the period / year.
(2) | Diluted net income per share is calculated by dividing the net income for the year by the weighted average number of ordinary shares including treasury shares.
(3) | Determined by multiplying the amounts per share by ten (one GDS is equal to ten common shares). Dividend amounts, corresponding to fiscal years ending on June 30 of each year, are determined by the annual shareholders’ meeting, which takes place in October of each year.

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Business Segment Reporting

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 Company, Mr. Eduardo S. Elsztain.

Segment information is reported from the perspective of products and services, considering separately the various activities being developed, which represent reporting operating segments given the nature of its products, services, operations and risks.

As of fiscal year 2018, the CODM reviews certain corporate expenses associated in an aggregate manner and separately from each of the segments, such expenses have been disclosed in the “Corporate” 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:
| o | The “Shopping Malls” segment includes results principally comprised of lease and service revenue related to rental of commercial space and other spaces in the shopping malls of the Group.
| o | The “Offices” segment includes the operating results from lease revenue of offices, other rental spaces and other service revenue related to the office activities.
| o | 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.
| o | The “Hotels” segment includes the operating results mainly comprised of room, catering and restaurant revenue.
| o | The “International” segment includes assets and operating profit or loss from business related to associates Condor (hotels) and New Lipstick (offices).
| o | 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.
| o | 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 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.

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| · | 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.

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.

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

Until September 2020 the Group used to report its financial performance separately in two Operations Centers. However, as described in Note 1, during September 2020 the Group lost control of IDBD and, then, has reclassified the results of Operations Center in Israel to discontinued operations. As a consequence of the situation described, from October 1, 2020, the Group reports its financial performance through a single Operation Center. Segment information for the previous fiscal years has been recast for the purposes of comparability with the present fiscal year.

| · | Operations Center in Israel: as explained previously only includes assets and liabilities.

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, 2021, 2020 and 2019:

|  | June 30, 2021 |
|  | 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 |
|  | (in million of ARS) |
Revenue |  |  | 10,114 |  |  |  | (50 | ) |  |  | 2,945 |  |  |  | (31 | ) |  |  | 12,978 |
Costs |  |  | (3,455 | ) |  |  | 70 |  |  |  | (3,179 | ) |  |  | - |  |  |  | (6,564 | )
Gross profit / (loss) |  |  | 6,659 |  |  |  | 20 |  |  |  | (234 | ) |  |  | (31 | ) |  |  | 6,414 |
Net loss from fair value adjustment of investment properties |  |  | (7,649 | ) |  |  | (121 | ) |  |  | - |  |  |  | - |  |  |  | (7,770 | )
General and administrative expenses |  |  | (3,078 | ) |  |  | 14 |  |  |  | - |  |  |  | 47 |  |  |  | (3,017 | )
Selling expenses |  |  | (1,511 | ) |  |  | 21 |  |  |  | - |  |  |  | - |  |  |  | (1,490 | )
Other operating results, net |  |  | (157 | ) |  |  | (20 | ) |  |  | 107 |  |  |  | (16 | ) |  |  | (86 | )
Loss from operations |  |  | (5,736 | ) |  |  | (86 | ) |  |  | (127 | ) |  |  | - |  |  |  | (5,949 | )
Share of loss of associates and joint ventures |  |  | (3,988 | ) |  |  | (392 | ) |  |  | - |  |  |  | - |  |  |  | (4,380 | )
Segment profit |  |  | (9,724 | ) |  |  | (478 | ) |  |  | (127 | ) |  |  | - |  |  |  | (10,329 | )
Reportable assets |  |  | 204,883 |  |  |  | (1,513 | ) |  |  | - |  |  |  | 19,412 |  |  |  | 222,782 |
Reportable liabilities |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (140,058 | ) |  |  | (140,058 | )
Net reportable assets |  |  | 204,883 |  |  |  | (1,513 | ) |  |  | - |  |  |  | (120,646 | ) |  |  | 82,724 |

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|  | June 30, 2020 |
|  | 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 |
|  | (in million of ARS) |
Revenue |  |  | 16,731 |  |  |  | (90 | ) |  |  | 4,655 |  |  |  | (33 | ) |  |  | 21,263 |
Costs |  |  | (4,101 | ) |  |  | 80 |  |  |  | (4,851 | ) |  |  | - |  |  |  | (8,872 | )
Gross profit / (loss) |  |  | 12,630 |  |  |  | (10 | ) |  |  | (196 | ) |  |  | (33 | ) |  |  | 12,391 |
Net gain / (loss) from fair value adjustment of investment properties |  |  | 51,059 |  |  |  | (395 | ) |  |  | - |  |  |  | - |  |  |  | 50,664 |
General and administrative expenses |  |  | (3,371 | ) |  |  | 20 |  |  |  | - |  |  |  | 50 |  |  |  | (3,301 | )
Selling expenses |  |  | (1,849 | ) |  |  | 27 |  |  |  | - |  |  |  | - |  |  |  | (1,822 | )
Other operating results, net |  |  | 17 |  |  |  | 28 |  |  |  | 91 |  |  |  | (17 | ) |  |  | 119 |
Profit / (loss) from operations |  |  | 58,486 |  |  |  | (330 | ) |  |  | (105 | ) |  |  | - |  |  |  | 58,051 |
Share of profit of associates and joint ventures |  |  | 10,584 |  |  |  | 263 |  |  |  | - |  |  |  | - |  |  |  | 10,847 |
Segment profit / (loss) |  |  | 69,070 |  |  |  | (67 | ) |  |  | (105 | ) |  |  | - |  |  |  | 68,898 |
Reportable assets |  |  | 913,638 |  |  |  | (1,040 | ) |  |  | - |  |  |  | 29,456 |  |  |  | 942,054 |
Reportable liabilities |  |  | (602,315 | ) |  |  | - |  |  |  | - |  |  |  | (155,511 | ) |  |  | (757,826 | )
Net reportable assets |  |  | 311,323 |  |  |  | (1,040 | ) |  |  | - |  |  |  | (126,055 | ) |  |  | 184,228 |

|  | June 30, 2019 |
|  | 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 |
|  | (in million of ARS) |
Revenue |  |  | 22,613 |  |  |  | (140 | ) |  |  | 5,567 |  |  |  | (36 | ) |  |  | 28,004 |
Costs |  |  | (4,773 | ) |  |  | 102 |  |  |  | (5,790 | ) |  |  | - |  |  |  | (10,461 | )
Gross profit / (loss) |  |  | 17,840 |  |  |  | (38 | ) |  |  | (223 | ) |  |  | (36 | ) |  |  | 17,543 |
Net (loss) / gain from fair value adjustment of investment properties |  |  | (59,489 | ) |  |  | 1,258 |  |  |  | - |  |  |  | - |  |  |  | (58,231 | )
General and administrative expenses |  |  | (4,176 | ) |  |  | 24 |  |  |  | - |  |  |  | 66 |  |  |  | (4,086 | )
Selling expenses |  |  | (1,628 | ) |  |  | 9 |  |  |  | - |  |  |  | - |  |  |  | (1,619 | )
Other operating results, net |  |  | (841 | ) |  |  | 282 |  |  |  | 119 |  |  |  | (30 | ) |  |  | (470 | )
(Loss) / profit from operations |  |  | (48,294 | ) |  |  | 1,535 |  |  |  | (104 | ) |  |  | - |  |  |  | (46,863 | )
Share of (loss) of associates and joint ventures |  |  | (9,060 | ) |  |  | (1,527 | ) |  |  | - |  |  |  | - |  |  |  | (10,587 | )
Segment (loss) / profit |  |  | (57,354 | ) |  |  | 8 |  |  |  | (104 | ) |  |  | - |  |  |  | (57,450 | )
Reportable assets |  |  | 971,842 |  |  |  | (915 | ) |  |  | - |  |  |  | 47,973 |  |  |  | 1,018,900 |
Reportable liabilities |  |  | (692,205 | ) |  |  | - |  |  |  | - |  |  |  | (142,463 | ) |  |  | (834,668 | )
Net reportable assets |  |  | 279,637 |  |  |  | (915 | ) |  |  | - |  |  |  | (94,490 | ) |  |  | 184,232 |

(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 ARS 7, ARS 26 and ARS 13,006, as of June 30, 2021, 2020 and 2019, 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, 2021, 2020 and 2019:

|  | June 30, 2021 |
|  | Operations Center in Argentina |
|  | Shopping Malls |  |  | Offices |  |  | Sales and developments |  |  | Hotels |  |  | International |  |  | Corporate |  |  | Others |  |  | Total |
|  | (in million of ARS) |
Revenue |  |  | 5,321 |  |  |  | 2,764 |  |  |  | 664 |  |  |  | 921 |  |  |  | 376 |  |  |  | - |  |  |  | 68 |  |  |  | 10,114 |
Costs |  |  | (865 | ) |  |  | (226 | ) |  |  | (751 | ) |  |  | (1,065 | ) |  |  | (317 | ) |  |  | - |  |  |  | (231 | ) |  |  | (3,455 | )
Gross profit / (loss) |  |  | 4,456 |  |  |  | 2,538 |  |  |  | (87 | ) |  |  | (144 | ) |  |  | 59 |  |  |  | - |  |  |  | (163 | ) |  |  | 6,659 |
Net (loss) / gain from fair value adjustment of investment properties |  |  | (20,342 | ) |  |  | 5,381 |  |  |  | 6,483 |  |  |  | - |  |  |  | 6 |  |  |  | - |  |  |  | 823 |  |  |  | (7,649 | )
General and administrative expenses |  |  | (1,432 | ) |  |  | (387 | ) |  |  | (357 | ) |  |  | (426 | ) |  |  | (56 | ) |  |  | (352 | ) |  |  | (68 | ) |  |  | (3,078 | )
Selling expenses |  |  | (451 | ) |  |  | (199 | ) |  |  | (684 | ) |  |  | (141 | ) |  |  | (26 | ) |  |  | - |  |  |  | (10 | ) |  |  | (1,511 | )
Other operating results, net |  |  | (126 | ) |  |  | 7 |  |  |  | (13 | ) |  |  | (12 | ) |  |  | (12 | ) |  |  | - |  |  |  | (1 | ) |  |  | (157 | )
(Loss) / profit from operations |  |  | (17,895 | ) |  |  | 7,340 |  |  |  | 5,342 |  |  |  | (723 | ) |  |  | (29 | ) |  |  | (352 | ) |  |  | 581 |  |  |  | (5,736 | )
Share of (loss) of associates and joint ventures |  |  | - |  |  |  | - |  |  |  | (16 | ) |  |  | - |  |  |  | (891 | ) |  |  | - |  |  |  | (3,081 | ) |  |  | (3,988 | )
Segment (loss) / profit |  |  | (17,895 | ) |  |  | 7,340 |  |  |  | 5,326 |  |  |  | (723 | ) |  |  | (920 | ) |  |  | (352 | ) |  |  | (2,500 | ) |  |  | (9,724 | )
Investment properties and trading properties |  |  | 54,317 |  |  |  | 76,925 |  |  |  | 55,943 |  |  |  | - |  |  |  | 114 |  |  |  | - |  |  |  | 2,307 |  |  |  | 189,606 |
Investment in associates and joint ventures |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,916 |  |  |  | - |  |  |  | 6,993 |  |  |  | 8,909 |
Other operating assets |  |  | 348 |  |  |  | 1,325 |  |  |  | 1,948 |  |  |  | 2,603 |  |  |  | - |  |  |  | 8 |  |  |  | 136 |  |  |  | 6,368 |
Operating assets |  |  | 54,665 |  |  |  | 78,250 |  |  |  | 57,891 |  |  |  | 2,603 |  |  |  | 2,030 |  |  |  | 8 |  |  |  | 9,436 |  |  |  | 204,883 |

From all the revenue corresponding to the Operations Center in Argentina, ARS 9,738 million are originated in Argentina, and ARS 376 million 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, ARS 202,044 million are located in Argentina and ARS 2,839 million in other countries, principally in USA for ARS 2,030 million and Uruguay for ARS 801 million.

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|  | June 30, 2020 |
|  | Operations Center in Argentina |
|  | Shopping Malls |  |  | Offices |  |  | Sales and developments |  |  | Hotels |  |  | International |  |  | Corporate |  |  | Others |  |  | Total |
|  | (in million of ARS) |
Revenue |  |  | 8,915 |  |  |  | 3,542 |  |  |  | 1,104 |  |  |  | 3,036 |  |  |  | 17 |  |  |  | - |  |  |  | 117 |  |  |  | 16,731 |
Costs |  |  | (851 | ) |  |  | (207 | ) |  |  | (1,008 | ) |  |  | (1,870 | ) |  |  | (18 | ) |  |  | - |  |  |  | (147 | ) |  |  | (4,101 | )
Gross profit / (loss) |  |  | 8,064 |  |  |  | 3,335 |  |  |  | 96 |  |  |  | 1,166 |  |  |  | (1 | ) |  |  | - |  |  |  | (30 | ) |  |  | 12,630 |
Net (loss) / gain from fair value adjustment of investment properties |  |  | (3,162 | ) |  |  | 34,974 |  |  |  | 18,293 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 954 |  |  |  | 51,059 |
General and administrative expenses |  |  | (1,246 | ) |  |  | (332 | ) |  |  | (342 | ) |  |  | (548 | ) |  |  | (165 | ) |  |  | (562 | ) |  |  | (176 | ) |  |  | (3,371 | )
Selling expenses |  |  | (1,065 | ) |  |  | (126 | ) |  |  | (296 | ) |  |  | (345 | ) |  |  | - |  |  |  | - |  |  |  | (17 | ) |  |  | (1,849 | )
Other operating results, net |  |  | 26 |  |  |  | (39 | ) |  |  | (41 | ) |  |  | (30 | ) |  |  | - |  |  |  | - |  |  |  | 101 |  |  |  | 17 |
Profit / (loss) from operations |  |  | 2,617 |  |  |  | 37,812 |  |  |  | 17,710 |  |  |  | 243 |  |  |  | (166 | ) |  |  | (562 | ) |  |  | 832 |  |  |  | 58,486 |
Share of profit / (loss) of associates and joint ventures |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 11,080 |  |  |  | - |  |  |  | (496 | ) |  |  | 10,584 |
Segment profit / (loss) |  |  | 2,617 |  |  |  | 37,812 |  |  |  | 17,710 |  |  |  | 243 |  |  |  | 10,914 |  |  |  | (562 | ) |  |  | 336 |  |  |  | 69,070 |
Investment properties and trading properties |  |  | 73,764 |  |  |  | 94,314 |  |  |  | 48,321 |  |  |  | - |  |  |  | 460 |  |  |  | - |  |  |  | 2,165 |  |  |  | 219,024 |
Investment in associates and joint ventures |  |  | - |  |  |  | - |  |  |  | 799 |  |  |  | - |  |  |  | 3,011 |  |  |  | - |  |  |  | 10,119 |  |  |  | 13,929 |
Other operating assetsInvestment |  |  | 412 |  |  |  | 321 |  |  |  | 1,131 |  |  |  | 2,759 |  |  |  | - |  |  |  | 9 |  |  |  | 135 |  |  |  | 4,767 |
Operating assets |  |  | 74,176 |  |  |  | 94,635 |  |  |  | 50,251 |  |  |  | 2,759 |  |  |  | 3,471 |  |  |  | 9 |  |  |  | 12,419 |  |  |  | 237,720 |

From all the revenue corresponding to the Operations Center in Argentina, included in the segments ARS 16,713 million are originated in Argentina and ARS 17 million 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, ARS 233,384 million are located in Argentina and ARS 4,336 million in other countries, principally in USA for ARS 3,471 million and Uruguay for ARS 865 million.

|  | June 30, 2019 |
|  | Operations Center in Argentina |
|  | Shopping Malls |  |  | Offices |  |  | Sales and developments |  |  | Hotels |  |  | International |  |  | Corporate |  |  | Others |  |  | Total |
|  | (in million of ARS) |
Revenue |  |  | 12,828 |  |  |  | 3,362 |  |  |  | 1,681 |  |  |  | 4,435 |  |  |  | 21 |  |  |  | - |  |  |  | 286 |  |  |  | 22,613 |
Costs |  |  | (1,166 | ) |  |  | (197 | ) |  |  | (790 | ) |  |  | (2,383 | ) |  |  | (9 | ) |  |  | - |  |  |  | (228 | ) |  |  | (4,773 | )
Gross profit |  |  | 11,662 |  |  |  | 3,165 |  |  |  | 891 |  |  |  | 2,052 |  |  |  | 12 |  |  |  | - |  |  |  | 58 |  |  |  | 17,840 |
Net (loss) / gain from fair value adjustment of investment properties |  |  | (60,952 | ) |  |  | 925 |  |  |  | 1,091 |  |  |  | - |  |  |  | 9 |  |  |  | - |  |  |  | (562 | ) |  |  | (59,489 | )
General and administrative expenses |  |  | (1,420 | ) |  |  | (318 | ) |  |  | (425 | ) |  |  | (738 | ) |  |  | (165 | ) |  |  | (940 | ) |  |  | (170 | ) |  |  | (4,176 | )
Selling expenses |  |  | (796 | ) |  |  | (148 | ) |  |  | (178 | ) |  |  | (474 | ) |  |  | - |  |  |  | - |  |  |  | (32 | ) |  |  | (1,628 | )
Other operating results, net |  |  | (29 | ) |  |  | (47 | ) |  |  | (429 | ) |  |  | 172 |  |  |  | (36 | ) |  |  | - |  |  |  | (472 | ) |  |  | (841 | )
(Loss) / profit from operations |  |  | (51,535 | ) |  |  | 3,577 |  |  |  | 950 |  |  |  | 1,012 |  |  |  | (180 | ) |  |  | (940 | ) |  |  | (1,178 | ) |  |  | (48,294 | )
Share of (loss) of associates and joint ventures |  |  | - |  |  |  | - |  |  |  | (56 | ) |  |  | - |  |  |  | (5,526 | ) |  |  | - |  |  |  | (3,478 | ) |  |  | (9,060 | )
Segment (loss) / profit |  |  | (51,535 | ) |  |  | 3,577 |  |  |  | 894 |  |  |  | 1,012 |  |  |  | (5,706 | ) |  |  | (940 | ) |  |  | (4,656 | ) |  |  | (57,354 | )
Investment properties and trading properties |  |  | 75,258 |  |  |  | 47,405 |  |  |  | 41,693 |  |  |  | - |  |  |  | 135 |  |  |  | - |  |  |  | 1,594 |  |  |  | 166,085 |
Investment in associates and joint ventures |  |  | - |  |  |  | - |  |  |  | 665 |  |  |  | - |  |  |  | (10,846 | ) |  |  | - |  |  |  | 7,353 |  |  |  | (2,828 | )
Other operating assets |  |  | 466 |  |  |  | 267 |  |  |  | 277 |  |  |  | 2,897 |  |  |  | 270 |  |  |  | 6 |  |  |  | 135 |  |  |  | 4,318 |
Operating assets |  |  | 75,724 |  |  |  | 47,672 |  |  |  | 42,635 |  |  |  | 2,897 |  |  |  | (10,441 | ) |  |  | 6 |  |  |  | 9,082 |  |  |  | 167,575 |

From all the revenue corresponding to the Operations Center in Argentina, included in the segments ARS 21,873 million are originated in Argentina, ARS 719 million are originated in Uruguay and ARS 21 million 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, ARS 177,136 million are located in Argentina and ARS (9,561) million in other countries, principally in USA for ARS (10,441) million and Uruguay for ARS 874 million.

Below is a summarized analysis of the lines of business of Group’s Operations Center in Israel where only assets and liabilities are presented for the years ended June 30, 2020 and 2019:

|  | June 30, 2020 |
|  | Operations Center in Israel |
|  | Real Estate |  |  | Supermarkets |  |  | Telecommunications |  |  | Insurance |  |  | Corporate |  |  | Others |  |  | Total |
|  | (in million of ARS) |
Operating assets |  |  | 229,718 |  |  |  | 42,191 |  |  |  | 210,318 |  |  |  | 5,072 |  |  |  | 25,015 |  |  |  | 163,604 |  |  |  | 675,918 |
Operating liabilities |  |  | (219,789 | ) |  |  | - |  |  |  | (159,326 | ) |  |  | - |  |  |  | (164,429 | ) |  |  | (58,771 | ) |  |  | (602,315 | )
Operating assets (liabilities), net |  |  | 9,929 |  |  |  | 42,191 |  |  |  | 50,992 |  |  |  | 5,072 |  |  |  | (139,414 | ) |  |  | 104,833 |  |  |  | 73,603 |

|  | June 30, 2019 |
|  | Operations Center in Israel |
|  | Real Estate |  |  | Supermarkets |  |  | Telecommunications |  |  | Insurance |  |  | Corporate |  |  | Others |  |  | Total |
|  | (in million of ARS) |
Operating assets |  |  | 455,745 |  |  |  | 34,566 |  |  |  | 164,289 |  |  |  | 34,002 |  |  |  | 62,238 |  |  |  | 53,427 |  |  |  | 804,267 |
Operating liabilities |  |  | (353,800 | ) |  |  | - |  |  |  | (127,370 | ) |  |  | - |  |  |  | (189,891 | ) |  |  | (21,144 | ) |  |  | (692,205 | )
Operating assets (liabilities), net |  |  | 101,945 |  |  |  | 34,566 |  |  |  | 36,919 |  |  |  | 34,002 |  |  |  | (127,653 | ) |  |  | 32,283 |  |  |  | 112,062 |

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Results of Operations for the fiscal years ended June 30, 2021 and 2020

Below is a summary of the operating segments by geography and a reconciliation between the total of the operating result according to the information by segments and the operating result according to the income statement for the years ended June 30, 2021 and 2020.

|  | Total Segment Information |  |  | Joint Ventures |  |  | Expenses and Collective Promotion Fund |  |  | Inter-segment eliminations and non-reportable assets / liabilities |  |  | Total income statement / statement of financial position |
|  | 06.30.21 |  |  | 06.30.20 |  |  | Var. |  |  | 06.30.21 |  |  | 06.30.20 |  |  | Var. |  |  | 06.30.21 |  |  | 06.30.20 |  |  | Var. |  |  | 06.30.21 |  |  | 06.30.20 |  |  | Var. |  |  | 06.30.21 |  |  | 06.30.20 |  |  | Var. |
|  | (in Million ARS) |
Revenue |  |  | 10,114 |  |  |  | 16,731 |  |  |  | (6,617 | ) |  |  | (50 | ) |  |  | (90 | ) |  |  | 40 |  |  |  | 2,945 |  |  |  | 4,655 |  |  |  | (1,710 | ) |  |  | (31 | ) |  |  | (33 | ) |  |  | 2 |  |  |  | 12,978 |  |  |  | 21,263 |  |  |  | (8,285 | )
Costs |  |  | (3,455 | ) |  |  | (4,101 | ) |  |  | 646 |  |  |  | 70 |  |  |  | 80 |  |  |  | (10 | ) |  |  | (3,179 | ) |  |  | (4,851 | ) |  |  | 1,672 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (6,564 | ) |  |  | (8,872 | ) |  |  | 2,308 |
Gross profit / (loss) |  |  | 6,659 |  |  |  | 12,630 |  |  |  | (5,971 | ) |  |  | 20 |  |  |  | (10 | ) |  |  | 30 |  |  |  | (234 | ) |  |  | (196 | ) |  |  | (38 | ) |  |  | (31 | ) |  |  | (33 | ) |  |  | 2 |  |  |  | 6,414 |  |  |  | 12,391 |  |  |  | (5,977 | )
Net (loss) / gain from fair value adjustment of investment properties |  |  | (7,649 | ) |  |  | 51,059 |  |  |  | (58,708 | ) |  |  | (121 | ) |  |  | (395 | ) |  |  | 274 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (7,770 | ) |  |  | 50,664 |  |  |  | (58,434 | )
General and administrative expenses |  |  | (3,078 | ) |  |  | (3,371 | ) |  |  | 293 |  |  |  | 14 |  |  |  | 20 |  |  |  | (6 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 47 |  |  |  | 50 |  |  |  | (3 | ) |  |  | (3,017 | ) |  |  | (3,301 | ) |  |  | 284 |
Selling expenses |  |  | (1,511 | ) |  |  | (1,849 | ) |  |  | 338 |  |  |  | 21 |  |  |  | 27 |  |  |  | (6 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (1,490 | ) |  |  | (1,822 | ) |  |  | 332 |
Other operating results, net |  |  | (157 | ) |  |  | 17 |  |  |  | (174 | ) |  |  | (20 | ) |  |  | 28 |  |  |  | (48 | ) |  |  | 107 |  |  |  | 91 |  |  |  | 16 |  |  |  | (16 | ) |  |  | (17 | ) |  |  | 1 |  |  |  | (86 | ) |  |  | 119 |  |  |  | (205 | )
(Loss) / profit from operations |  |  | (5,736 | ) |  |  | 58,486 |  |  |  | (64,222 | ) |  |  | (86 | ) |  |  | (330 | ) |  |  | 244 |  |  |  | (127 | ) |  |  | (105 | ) |  |  | (22 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (5,949 | ) |  |  | 58,051 |  |  |  | (64,000 | )
Share of (loss) / profit of associates and joint ventures |  |  | (3,988 | ) |  |  | 10,584 |  |  |  | (14,572 | ) |  |  | (392 | ) |  |  | 263 |  |  |  | (655 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (4,380 | ) |  |  | 10,847 |  |  |  | (15,227 | )
Segment (loss) / profit |  |  | (9,724 | ) |  |  | 69,070 |  |  |  | (78,794 | ) |  |  | (478 | ) |  |  | (67 | ) |  |  | (411 | ) |  |  | (127 | ) |  |  | (105 | ) |  |  | (22 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (10,329 | ) |  |  | 68,898 |  |  |  | (79,227 | )
Reportable assets |  |  | 204,883 |  |  |  | 913,638 |  |  |  | (708,755 | ) |  |  | (1,513 | ) |  |  | (1,040 | ) |  |  | (473 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 19,412 |  |  |  | 29,456 |  |  |  | (10,044 | ) |  |  | 222,782 |  |  |  | 942,054 |  |  |  | (719,272 | )
Reportable liabilities |  |  | - |  |  |  | (602,315 | ) |  |  | 602,315 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (140,058 | ) |  |  | (155,511 | ) |  |  | 15,453 |  |  |  | (140,058 | ) |  |  | (757,826 | ) |  |  | 617,768 |
Net reportable assets |  |  | 204,883 |  |  |  | 311,323 |  |  |  | (106,440 | ) |  |  | (1,513 | ) |  |  | (1,040 | ) |  |  | (473 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (120,646 | ) |  |  | (126,055 | ) |  |  | 5,409 |  |  |  | 82,724 |  |  |  | 184,228 |  |  |  | (101,504 | )

Operations Center in Argentina

Below is a summary analysis of the operating segments by products and services of the Operations Center in Argentina for the years ended June 30, 2021 and 2020

|  | Shopping Malls |  |  | Offices |  |  | Sales and Developments |  |  | Hotels |  |  | International |  |  | Corporate |  |  | Others |  |  | Total |
|  | 06.30.21 |  |  | 06.30.20 |  |  | Var. |  |  | 06.30.21 |  |  | 06.30.20 |  |  | Var. |  |  | 06.30.21 |  |  | 06.30.20 |  |  | Var. |  |  | 06.30.21 |  |  | 06.30.20 |  |  | Var. |  |  | 06.30.21 |  |  | 06.30.20 |  |  | Var. |  |  | 06.30.21 |  |  | 06.30.20 |  |  | Var. |  |  | 06.30.21 |  |  | 06.30.20 |  |  | Var. |  |  | 06.30.21 |  |  | 06.30.20 |  |  | Var. |
|  | (in Million ARS) |
Revenue |  |  | 5,321 |  |  |  | 8,915 |  |  |  | (3,594 | ) |  |  | 2,764 |  |  |  | 3,542 |  |  |  | (778 | ) |  |  | 664 |  |  |  | 1,104 |  |  |  | (440 | ) |  |  | 921 |  |  |  | 3,036 |  |  |  | (2,115 | ) |  |  | 376 |  |  |  | 17 |  |  |  | 359 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 68 |  |  |  | 117 |  |  |  | (49 | ) |  |  | 10,114 |  |  |  | 16,731 |  |  |  | (6,617 | )
Costs |  |  | (865 | ) |  |  | (851 | ) |  |  | (14 | ) |  |  | (226 | ) |  |  | (207 | ) |  |  | (19 | ) |  |  | (751 | ) |  |  | (1,008 | ) |  |  | 257 |  |  |  | (1,065 | ) |  |  | (1,870 | ) |  |  | 805 |  |  |  | (317 | ) |  |  | (18 | ) |  |  | (299 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (231 | ) |  |  | (147 | ) |  |  | (84 | ) |  |  | (3,455 | ) |  |  | (4,101 | ) |  |  | 646 |
Gross profit / (loss) |  |  | 4,456 |  |  |  | 8,064 |  |  |  | (3,608 | ) |  |  | 2,538 |  |  |  | 3,335 |  |  |  | (797 | ) |  |  | (87 | ) |  |  | 96 |  |  |  | (183 | ) |  |  | (144 | ) |  |  | 1,166 |  |  |  | (1,310 | ) |  |  | 59 |  |  |  | (1 | ) |  |  | 60 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (163 | ) |  |  | (30 | ) |  |  | (133 | ) |  |  | 6,659 |  |  |  | 12,630 |  |  |  | (5,971 | )
Net (loss) / gain from fair value adjustment of investment properties |  |  | (20,342 | ) |  |  | (3,162 | ) |  |  | (17,180 | ) |  |  | 5,381 |  |  |  | 34,974 |  |  |  | (29,593 | ) |  |  | 6,483 |  |  |  | 18,293 |  |  |  | (11,810 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 6 |  |  |  | - |  |  |  | 6 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 823 |  |  |  | 954 |  |  |  | (131 | ) |  |  | (7,649 | ) |  |  | 51,059 |  |  |  | (58,708 | )
General and administrative expenses |  |  | (1,432 | ) |  |  | (1,246 | ) |  |  | (186 | ) |  |  | (387 | ) |  |  | (332 | ) |  |  | (55 | ) |  |  | (357 | ) |  |  | (342 | ) |  |  | (15 | ) |  |  | (426 | ) |  |  | (548 | ) |  |  | 122 |  |  |  | (56 | ) |  |  | (165 | ) |  |  | 109 |  |  |  | (352 | ) |  |  | (562 | ) |  |  | 210 |  |  |  | (68 | ) |  |  | (176 | ) |  |  | 108 |  |  |  | (3,078 | ) |  |  | (3,371 | ) |  |  | 293 |
Selling expenses |  |  | (451 | ) |  |  | (1,065 | ) |  |  | 614 |  |  |  | (199 | ) |  |  | (126 | ) |  |  | (73 | ) |  |  | (684 | ) |  |  | (296 | ) |  |  | (388 | ) |  |  | (141 | ) |  |  | (345 | ) |  |  | 204 |  |  |  | (26 | ) |  |  | - |  |  |  | (26 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (10 | ) |  |  | (17 | ) |  |  | 7 |  |  |  | (1,511 | ) |  |  | (1,849 | ) |  |  | 338 |
Other operating results, net |  |  | (126 | ) |  |  | 26 |  |  |  | (152 | ) |  |  | 7 |  |  |  | (39 | ) |  |  | 46 |  |  |  | (13 | ) |  |  | (41 | ) |  |  | 28 |  |  |  | (12 | ) |  |  | (30 | ) |  |  | 18 |  |  |  | (12 | ) |  |  | - |  |  |  | (12 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (1 | ) |  |  | 101 |  |  |  | (102 | ) |  |  | (157 | ) |  |  | 17 |  |  |  | (174 | )
(Loss) / profit from operations |  |  | (17,895 | ) |  |  | 2,617 |  |  |  | (20,512 | ) |  |  | 7,340 |  |  |  | 37,812 |  |  |  | (30,472 | ) |  |  | 5,342 |  |  |  | 17,710 |  |  |  | (12,368 | ) |  |  | (723 | ) |  |  | 243 |  |  |  | (966 | ) |  |  | (29 | ) |  |  | (166 | ) |  |  | 137 |  |  |  | (352 | ) |  |  | (562 | ) |  |  | 210 |  |  |  | 581 |  |  |  | 832 |  |  |  | (251 | ) |  |  | (5,736 | ) |  |  | 58,486 |  |  |  | (64,222 | )
Share of (loss) / profit of associates and joint ventures |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (16 | ) |  |  | - |  |  |  | (16 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (891 | ) |  |  | 11,080 |  |  |  | (11,971 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (3,081 | ) |  |  | (496 | ) |  |  | (2,585 | ) |  |  | (3,988 | ) |  |  | 10,584 |  |  |  | (14,572 | )
Segment (loss) / profit |  |  | (17,895 | ) |  |  | 2,617 |  |  |  | (20,512 | ) |  |  | 7,340 |  |  |  | 37,812 |  |  |  | (30,472 | ) |  |  | 5,326 |  |  |  | 17,710 |  |  |  | (12,384 | ) |  |  | (723 | ) |  |  | 243 |  |  |  | (966 | ) |  |  | (920 | ) |  |  | 10,914 |  |  |  | (11,834 | ) |  |  | (352 | ) |  |  | (562 | ) |  |  | 210 |  |  |  | (2,500 | ) |  |  | 336 |  |  |  | (2,836 | ) |  |  | (9,724 | ) |  |  | 69,070 |  |  |  | (78,794 | )
Reportable assets |  |  | 54,665 |  |  |  | 74,176 |  |  |  | (19,511 | ) |  |  | 78,250 |  |  |  | 94,635 |  |  |  | (16,385 | ) |  |  | 57,891 |  |  |  | 50,251 |  |  |  | 7,640 |  |  |  | 2,603 |  |  |  | 2,759 |  |  |  | (156 | ) |  |  | 2,030 |  |  |  | 3,471 |  |  |  | (1,441 | ) |  |  | 8 |  |  |  | 9 |  |  |  | (1 | ) |  |  | 9,436 |  |  |  | 12,419 |  |  |  | (2,983 | ) |  |  | 204,883 |  |  |  | 237,720 |  |  |  | (32,837 | )
Reportable liabilities |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Net reportable assets |  |  | 54,665 |  |  |  | 74,176 |  |  |  | (19,511 | ) |  |  | 78,250 |  |  |  | 94,635 |  |  |  | (16,385 | ) |  |  | 57,891 |  |  |  | 50,251 |  |  |  | 7,640 |  |  |  | 2,603 |  |  |  | 2,759 |  |  |  | (156 | ) |  |  | 2,030 |  |  |  | 3,471 |  |  |  | (1,441 | ) |  |  | 8 |  |  |  | 9 |  |  |  | (1 | ) |  |  | 9,436 |  |  |  | 12,419 |  |  |  | (2,983 | ) |  |  | 204,883 |  |  |  | 237,720 |  |  |  | (32,837 | )

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Operations Center in Israel

Below is a summary analysis of the operating segments by products and services of the Operations Center in Israel where only assets and liabilities are presented as of June 30, 2020

|  | Real Estate |  |  | Supermarkets |  |  | Telecommunications |  |  | Insurance |  |  | Corporate |  |  | Others |  |  | Total |
|  | 06.30.20 |  |  | 06.30.20 |  |  | 06.30.20 |  |  | 06.30.20 |  |  | 06.30.20 |  |  | 06.30.20 |  |  | 06.30.20 |
|  | (in Million Pesos) |
Reportable assets |  |  | 229,718 |  |  |  | 42,191 |  |  |  | 210,318 |  |  |  | 5,072 |  |  |  | 25,015 |  |  |  | 163,604 |  |  |  | 675,918 |
Reportable liabilities |  |  | (219,789 | ) |  |  | - |  |  |  | (159,326 | ) |  |  | - |  |  |  | (164,429 | ) |  |  | (58,771 | ) |  |  | (602,315 | )
Net reportable assets |  |  | 9,929 |  |  |  | 42,191 |  |  |  | 50,992 |  |  |  | 5,072 |  |  |  | (139,414 | ) |  |  | 104,833 |  |  |  | 73,603 |

Revenue June 2021 vs June 2020

Revenue from sales, leases, and services, according to the income statement, decreased by ARS 8,285 million from ARS 21,263 million during the fiscal year ended June 30, 2020, to ARS 12,978 million during the fiscal year ended June 30, 2021. In index terms, revenue from sales, leases, and services decreased by 39.0%.

In turn, revenue from expenses and Collective Promotion Fund decreased by 36.7%, from ARS 4,655 million (out of which ARS 4,289 million are allocated to the Shopping Malls segment and ARS 366 million are allocated to the Offices segment) during the fiscal year ended June 30, 2020, to ARS 2,945 million (out of which ARS 2,661 million are allocated to the Shopping Malls segment and ARS 284 million are allocated to the Offices segment) during the fiscal year ended June 30, 2021.

Moreover, revenue from our joint ventures decreased by 44.4%, from ARS 90 million (out of which ARS 79 million are allocated to the Shopping Malls segment and ARS 11 million are allocated to the Offices segment) during the fiscal year ended June 30, 2020 to ARS 50 million (out of which ARS 29 million are allocated to the Shopping Malls segment and ARS 21 million are allocated to the Offices segment) during the fiscal year ended June 30, 2021.

Finally, revenue from inter-segment transactions decreased by ARS 2 million, from ARS 33 million during the fiscal year ended June 30, 2020, to ARS 31 million during the fiscal year ended June 30, 2021.

Therefore, according to information by segments, revenue decreased by ARS 6,617 million, from ARS 16,731 million during the fiscal year ended June 30, 2020, to ARS 10,114 million during the fiscal year ended June 30, 2021. Revenue, according to information by segments, decreased by 39.5%.

Shopping Malls. Revenue from the Shopping Malls segment decreased by 40.3% from ARS 8,915 million during the fiscal year ended June 30, 2020, to ARS 5,321 million during the fiscal year ended June 30, 2021. Such fall is mainly attributable to the closing of the Shopping Malls as a consequence of the COVID 19 pandemic, which had an impact in the fiscal year 2021, generating: (i) a decrease of ARS 2,324 million in revenue base rent; (ii) a decrease of ARS 782 million in revenue contingent rent; (iii) an ARS 568 million decrease in revenue from admission rights; (iv) an ARS 408 million decrease in revenue from parking; partially offset by (v) an ARS 496 million increase in the revenue from averaging of scheduled rent escalation.

Offices. Revenue from the Offices segment decreased by 22.2% from ARS 3,542 million during the fiscal year ended June 30, 2020, to ARS 2,764 million during the fiscal year ended June 30, 2021. This variation is mainly explained by a decrease in revenue from leases by 23.0%, from ARS 3,498 million during the fiscal year ended June 30, 2020 to ARS 2,693 million during the fiscal year ended June 30, 2021, mainly as a result of less income from leases due to the sale of Bouchard Building and sale of floors in Boston Tower during the period ended June 30, 2021.

Sales and Developments. Revenue from the Sales and Developments segment recorded a 39.9% decrease from ARS 1,104 million during the fiscal year ended June 30, 2020, to ARS 664 million during the fiscal year ended June 30, 2021. This segment often varies significantly from period to period due to the non-recurrence of different sales transactions carried out by the Group over time.

Hotels. Revenue from our Hotels segment decreased by 69.7% from ARS 3,036 million during the fiscal year ended June 30, 2020, to ARS 921 million during the fiscal year ended June 30, 2021, mainly due to a decrease in revenue as a result of the fall in the tourist industry during this period because of COVID 19.

International. Revenue from our International segment increased by ARS 359 million, from ARS 17 million during the fiscal year ended June 30, 2020, to ARS 376 million during the fiscal year ended June 30, 2021, due to the sale of Stowe House in USD 3.45 million, generating a profit of USD 0.3 million.

Corporate. Revenue associated with our Corporate segment showed no variations for the reported periods.

Others. Revenue from the Others segment decreased by 41.9% from ARS 117 million during the fiscal year ended June 30, 2020, to ARS 68 million during the fiscal year ended June 30, 2021, mainly due to the lack of incomes derived from LA RURAL S.A. - OFC S.R.L. - OGDEN S.A. - ENTRETENIMIENTO UNIVERSAL S.A. - Joint venture - (Convention Center and Exhibitions of the City of Buenos Aires Administrator), attributable to the COVID-19 pandemic.

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Costs June 2021 vs June 2020

Total consolidated costs, according to the income statement, decreased by ARS 2,308 million, from ARS 8,872 million during the fiscal year ended June 30, 2020, to ARS 6,564 million during the fiscal year ended June 30, 2021. In index terms, costs decreased by 26.6%. Furthermore, consolidated total costs measured as a percentage of consolidated total revenue increased from 41.7% during the fiscal year ended June 30, 2020 to 50.6% during the fiscal year ended June 30, 2021.

In turn, costs related to expenses and Collective Promotion Fund decreased by 34.5% from ARS 4,851 million (out of which ARS 4,464 million are allocated to the Shopping Malls segment and ARS 387 million are allocated to the Offices segment) during the fiscal year ended June 30, 2020, to ARS 3,179 million (out of which ARS 2,884 million are allocated to the Shopping Malls segment and ARS 295 million are allocated to the Offices segment) during the fiscal year ended June 30, 2021, mainly due to lower costs originated by our Shopping Malls, which decreased by 35.4% from ARS 4,464 million during the fiscal year ended June 30, 2020, to ARS 2,884 million during the fiscal year ended June 30, 2021.

Likewise, costs from our joint ventures decreased by ARS 10 million, from ARS 80 million during the fiscal year ended June 30, 2020 (out of which ARS 10 million are allocated to the Shopping Malls segment; ARS 59 million to the Offices segment and 11 million to the Sales and Developments segment), to ARS 70 million during the fiscal year ended June 30, 2021 (out of which ARS 14 million are allocated to the Shopping Malls segment; ARS 55 million to the Offices segment and 1 million to the Sales and Developments segment).

Finally, costs from inter-segment operations showed no variations for the reported periods.

Therefore, according to information by segments (taking into account the costs from our joint ventures and without considering the costs associated with expenses and collective promotion fund or the costs from inter-segment operations), costs evidenced a decrease of ARS 646 million, from ARS 4,101 million during the fiscal year ended June 30, 2020 to ARS 3,455 million during the fiscal year ended June 30, 2021. In index terms, costs decreased by 15.8%. Likewise, total costs, measured as a percentage of total revenue, according to information by segments, increased from 24.5% during the fiscal year ended June 30, 2020 to 34.2% during the fiscal year ended June 30, 2021.

Shopping Malls. Costs associated with the Shopping Malls segment increased by 1.6%, from ARS 851 million during the fiscal year ended June 30, 2020, to ARS 865 million during the fiscal year ended June 30, 2021, mainly due to: (i) a decrease in maintenance expenses of ARS 140 million; (ii) an ARS 13 million decrease in fees and compensation services; partially offset by: (iii) a decrease in leases and expenses of ARS 142 million; and (iv) an increase in taxes, rates and contributions of ARS 24 million. Costs associated with the Shopping Malls segment, measured as a percentage of the revenue from this segment, increased from 9.5% during the fiscal year ended June 30, 2020, to 16.3% during the fiscal year ended June 30, 2021.

Offices. Costs associated with the Offices segment increased by 9.2%, from ARS 207 million during the fiscal year ended June 30, 2020, to ARS 226 million during the fiscal year ended June 30, 2021, mainly due to (i) an increase of ARS 8 million in salaries, social security charges and other personnel administrative expenses; (ii) an increase in leases and expenses of ARS 5 million, and (iii) an increase in fees and compensation services of ARS 4 million. Costs associated with the Offices segment, measured as a percentage the revenue from this segment, increased from 5.8% during the fiscal year ended June 30, 2020, to 8.2% during the fiscal year ended June 30, 2021.

Sales and Developments. Costs associated with our Sales and Developments segment recorded a 25.5% decrease from ARS 1,008 million during the fiscal year ended June 30, 2020, to ARS 751 million during the fiscal year ended June 30, 2021 mainly due to (i) a decrease of ARS 146 million in the cost of sale of goods and services; (ii) a decrease in leases and expenses of ARS 84 million; (iii) a decrease of ARS 10 million in taxes, rates and contributions, and (iv) a decrease in maintenance cost of ARS 9 million. Costs in the Sales and Developments segment, measured as a percentage of revenue from this segment, increased from 91.3% during the fiscal year ended June 30, 2020, to 113.1% during the fiscal year ended June 30, 2021.

Hotels. Costs in the Hotels segment decreased by 43.0%, from ARS 1,870 million during the fiscal year ended June 30, 2020, to ARS 1,065 million during the fiscal year ended June 30, 2021, mainly as a result of (i) an ARS 344 million decrease in the costs of salaries, social security and other personnel expenses; (ii) an ARS 240 million decrease in maintenance, repair, and services; (iii) an ARS 100 million decrease in food, beverages and other hotel expenses; and (iv) an ARS 68 million decrease in fees and compensation services. Costs in the Hotels segment, measured as a percentage of revenue from this segment, increased from 61.6% during the fiscal year ended June 30, 2020, to 115.6% during the fiscal year ended June 30, 2021.

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International. Costs in the International segment increased by ARS 299, from ARS 18 million during the fiscal year ended June 30, 2020, and ARS 317 million during the fiscal year ended June 30, 2021, mainly as a result of an increase in cost of selling properties of ARS 306 million due to the sale of Stowe House. Costs in the International segment, measured as a percentage of revenue from this segment, decreased from 105.9% during the fiscal year ended June 30, 2020, to 84.3% during the fiscal year ended June 30, 2021.

Corporate. Costs in the Corporate segment did not vary in the reported periods.

Others. Costs in the Others segment increased by 57.1%, from ARS 147 million during the fiscal year ended June 30, 2020, to ARS 231 million during the fiscal year ended June 30, 2021, mainly as a result of an increase in fees and payments for services and an increase in charge salaries, social security costs and other personnel administrative expenses related to the development and implementation of Appa Shops.

Gross profit 2021 vs. 2020

The total consolidated gross profit, according to the income statement, decreased by ARS 5,977 million from ARS 12,391 million during the fiscal year ended June 30, 2020 to ARS 6,414 million during the fiscal year ended June 30, 2021. In index terms, the gross profit decreased by 48.2%. The total consolidated gross profit, measured as a percentage of revenue, decreased from 58.3% during the fiscal year ended June 30, 2020 to 49.4% during the fiscal year ended June 30, 2021.

In turn, total gross (loss) on account of expenses and collective promotion fund increased by ARS 38 million, from ARS 196 million during the fiscal year ended June 30, 2020 (out of which a loss of ARS 175 million derives from Shopping Malls segment and a loss of ARS 21 million from the Offices segment), to ARS 234 million during the fiscal year ended June 30, 2021 (out of which a loss of ARS 223 million derives from Shopping Malls segment and other; and a loss of ARS 11 million from the Offices segment).

Additionally, the gross profit from our joint ventures decreased by ARS 30 million, from a profit of ARS 10 million during the fiscal year ended June 30, 2020 to a loss of ARS 20 million during the fiscal year ended June 30, 2021.

Therefore, according to information by segments, gross profit decreased by ARS 5,971 million, from ARS 12,630 million during the fiscal year ended June 30, 2020 to ARS 6,659 million during the fiscal year ended June 30, 2021. In index terms, the gross profit decreased by 47.3%. In addition, gross profit, measured as a percentage of revenue, according to information by segments, decreased from 75.5% during the fiscal year ended June 30, 2020, to 65.8% during the fiscal year ended June 30, 2021.

Shopping Malls. Gross profit from the Shopping Malls segment decreased by 44.7%, from ARS 8,064 million during the fiscal year ended June 30, 2020, to ARS 4,456 million during the fiscal year ended June 30, 2021, mainly as a result of a decrease in total sales of our lessees in real terms, thus resulting in lower percentage rentals under our lease agreements attributable to COVID-19. Gross profit from the Shopping Malls segment as a percentage of the segment revenue, decreased from 90.5% during the fiscal year ended June 30, 2020, to 83.7% during the fiscal year ended June 30, 2021.

Offices. Gross profit from the Offices segment decreased by 23.9%, from ARS 3,335 million during the fiscal year ended June 30, 2020, to ARS 2,538 million during the fiscal year ended June 30, 2021. Gross profit from the Offices segment, measured as percentage of revenue from this segment, decreased from 94.2% during the fiscal year ended June 30, 2020, to 91.8% during the fiscal year ended June 30, 2021.

Sales and developments. Gross profit from the Sales and Developments segment decreased by 190.6%, from a profit of ARS 96 million during the fiscal year ended June 30, 2020, to an ARS 87 million loss during the fiscal year ended June 30, 2021. Gross profit from the Sales and Developments segment, measured as a percentage of revenue from this segment, decreased from 8.7% positive during the fiscal year ended June 30, 2020, to 13.1% negative during the fiscal year ended June 30, 2021.

Hotels. Gross profit from the Hotels segment decreased by 112.3%, from a profit of ARS 1,166 million during the fiscal year ended June 30, 2020, to an ARS 144 million loss during the fiscal year ended June 30, 2021. Gross profit from the Hotels segment, measured as a percentage of revenue from this segment, increased from 38.4% positive during the fiscal year ended June 30, 2020, to 15.6% negative during the fiscal year ended June 30, 2021.

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International. Gross profit / (loss) from the International segment increased by ARS 60 million, from a loss of ARS 1 million during the fiscal year ended June 30, 2020 to an ARS 59 million gross profit during the fiscal year ended June 30, 2021. Gross profit from the International segment, measured as a percentage of revenue from this segment, increased from 5.9% negative during the fiscal year ended June 30, 2020, to 15.7% positive during the fiscal year ended June 30, 2021.

Corporate. Gross profit from the Corporate segment did not show any variations during the reported periods.

Others. Gross profit / (loss) from the Others segment increased by ARS 133, from a loss of ARS 30 million during the fiscal year ended June 30, 2020, to an ARS 163 million loss during the fiscal year ended June 30, 2021. Gross profit from the Others segment, measured as a percentage of revenue from this segment, increased from 25.6% negative during the fiscal year ended June 30, 2020, to 239.7% negative during the fiscal year ended June 30, 2021.

Net gain / (loss) from fair value adjustment of investment properties June 2021 vs June 2020

Total consolidated net gain / (loss) from fair value adjustment of investment properties, according to the income statement, decreased by ARS 58,434 million, from a net profit of ARS 50,664 million during the fiscal year ended June 30, 2020, to a net loss of ARS 7,770 million during the fiscal year ended June 30, 2021.

For the period ended June 30, 2021, the net gain / (loss) from fair value adjustment of investment properties was a loss of ARS 7,649 million (an ARS 20,342 million loss from our Shopping Malls segment; an ARS 5,381 million gain from our Offices segment; an ARS 6,483 million gain from our Sales and Developments segment; an ARS 6 million gain from our International segment and an ARS 823 million gain from our Others segment).

The net impact in the peso values of our shopping malls was primarily a consequence of: (i) an increase in the income tax rate from 25% to 35%, with a consequent decrease in the projected cash flows; (ii) between June 30, 2020 to June 30, 2021, the Argentinian peso depreciated 36% against U.S. dollar (from ARS 70.26 per U.S. dollar to ARS 95.52 per U.S. dollar), which generated a reduction in the projected cash flows as measured in U.S. dollar terms from our Shopping Malls segment; and (iii) increase of 135 basis points in the discount rate, that is used to discount the projected cash flows from the Shopping Malls segment.

The offices market in Argentina is a liquid market, in which a great number of counterparties participates carrying out sale-purchase transactions. This situation results in significant and representative sale-purchase prices. Furthermore, lease agreements are denominated in U.S. dollars and are usually executed for three-year terms, hence this business produces stable cash flows in U.S. dollars. In this sense, we use the Market Approach method to determine the fair value of our Offices and Others segment, the value per sqm, being the most representative measurement.

Since September 2019, the real estate market experienced certain operational changes due to the adoption of foreign exchange regulations. As a result, it is very likely that office buildings/lands reserved sales be settled in Pesos at an implied exchange rate higher than the official exchange rate, which can be observed in the transactions conducted by the Company before and after closing of these financial statements. Therefore, we have valued our offices and lands reserved in Pesos as of closing of these financial statements considering the aforementioned situation, thus resulting in a gain with respect to the previously recorded values.Therefore, the Company has valued its office buildings in pesos at the end of the fiscal year considering the situation described above, but such increase in valuation was partially offset by the inflation adjustment during the fiscal year, as a result we recognized a gain of ARS 5,381 million with respect to the values previously recorded.

General and administrative expenses June 2021 vs June 2020

Total general and administrative expenses, according to the income statement, recorded a decrease of ARS 284 million, from ARS 3,301 million during the fiscal year ended June 30, 2020 to ARS 3,017 million during the fiscal year ended June 30, 2021. In index terms, administrative expenses decreased by 8.6%. Total administrative expenses, measured as a percentage of revenue, increased from 15.5% during the fiscal year ended June 30, 2020, to 23.2% during the fiscal year ended June 30, 2021.

In turn, administrative expenses of our joint ventures decreased by ARS 6 million, from ARS 20 million during the fiscal year ended June 30, 2020, to ARS 14 million during the fiscal year ended June 30, 2021.

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Finally, administrative expenses for inter-segment transactions showed no variations remaining stable at ARS 50 million during the fiscal year ended June 30, 2020 and ARS 47 million during the fiscal year ended June 30, 2021.

Therefore, according to information by segments, administrative expenses decreased by ARS 293 million, from ARS 3,371 million during the fiscal year ended June 30, 2020, to ARS 3,078 million during the fiscal year ended June 30, 2021. In index terms, administrative expenses, decreased by 8.7%. Administrative expenses, measured as a percentage of revenue, increased from 20.1% during the fiscal year ended June 30, 2020, to 30.4% during the fiscal year ended June 30, 2021.

Shopping Malls. Administrative expenses of Shopping Malls increased by 14.9%, from ARS 1,246 million during the fiscal year ended June 30, 2020, to ARS 1,432 million during the fiscal year ended June 30, 2021, mainly due to: (i) an increase of ARS 174 million in fees payable to directors; (ii) an increase of ARS 75 million in salaries, social security charges and other personnel administrative expenses; (iii) an increase of ARS 9 million in taxes, rates and contributions; partially offset by: (iv) a decrease of ARS 61 million in fees and compensation for services. Administrative expenses of Shopping Malls, measured as a percentage of revenue from such segment, increased from 14.0% during the fiscal year ended June 30, 2020, to 26.9% during the fiscal year ended June 30, 2021.

Offices. The general and administrative expenses of our Offices segment increased by 16.6%, from ARS 332 million during the fiscal year ended June 30, 2020, to ARS 387 million during the fiscal year ended June 30, 2021, mainly as a result of: (i) an increase in fees payable to directors of ARS 47 million; (ii) an increase of ARS 19 million in salaries, social security charges and other personnel administrative expenses; partially offset by (iii) a decrease in fees and compensation for services of ARS 16 million. General and administrative expenses, measured as a percentage of revenue from the same segment, increased from 9.4% during the fiscal year ended June 30, 2020, to 14.0% during the fiscal year ended June 30, 2021.

Sales and Developments. General and administrative expenses associated with our Sales and Developments segment increased by 4.4%, from ARS 342 million during the fiscal year ended June 30, 2020, to ARS 357 million during the fiscal year ended June 30, 2021. General and administrative expenses, measured as a percentage of revenue from the same segment, increased from 31.0% during the fiscal year ended June 30, 2020, to 53.8% during the fiscal year ended June 30, 2021.

Hotels. General and administrative expenses associated with our Hotels segment decreased by 22.3%, from ARS 548 million during the fiscal year ended June 30, 2020, to ARS 426 million during the fiscal year ended June 30, 2021, mainly as a result of: (i) an ARS 44 million decrease in salaries, social security and other personnel administrative expenses; (ii) an ARS 32 million decrease in maintenance, security, cleaning, repairs and related expenses; (iii) an ARS 20 million decrease in taxes, rates and contributions; and (iv) an ARS 16 million decrease in fees and compensation for services. General and administrative expenses associated with the Hotels segment, measured as a percentage of revenue from this segment, increased from 18.1% during the fiscal year ended June 30, 2020, to 46.3% during the fiscal year ended June 30, 2021.

International. General and administrative expenses associated with our International segment decreased by 66.1%, from ARS 165 million during the fiscal year ended June 30, 2020, to ARS 56 million during the fiscal year ended June 30, 2021, mainly as a result of (i) an ARS 75 million decrease in salaries, social security and other personnel administrative expense; (ii) an ARS 17 million decrease in fees and compensation for services; and (iii) an ARS 15 million decrease in maintenance, security, cleaning, repairs and related expenses.

Corporate. General and administrative expenses associated with our Corporate segment increased by 37.4%, from ARS 562 million during the fiscal year ended June 30, 2020, to ARS 352 million during the fiscal year ended June 30, 2021, mainly as a result of: (i) a decrease of ARS 187 million in fees and compensation for services; (ii) a decrease of ARS 20 million increase in business expenses, mobility and library; partially offset by: (ii) an ARS 12 million increase in salaries, social security and other personnel administrative expense.

Others. General and administrative expenses associated with our Others segment decreased by 61.4%, from ARS 176 million during the fiscal year ended June 30, 2020, to ARS 68 million during the fiscal year ended June 30, 2021, mainly due to (i) a decrease of ARS 34 million in maintenance, repairs and services; (ii) a decrease of ARS 32 million in salaries, social security and other personnel administrative expenses and (iii) a decrease of ARS 33 million in fees and compensation for services.

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Selling expenses June 2021 vs June 2020

Total consolidated selling expenses, according to the income statement, showed a decrease of ARS 332 million, from ARS 1,822 million during the fiscal year ended June 30, 2020 to ARS 1,490 million during the fiscal year ended June 30, 2021. In index terms, selling expenses increased by 18.2%. Total consolidated selling expenses, measured as a percentage of revenue from sales, leases and services, increased from 8.6% during the fiscal year ended June 30, 2020, to 11.5% during the fiscal year ended June 30, 2021.

In turn, selling expenses of our joint ventures decreased by ARS 6 million, from ARS 27 million during the fiscal year ended June 30, 2020, to ARS 21 million during the fiscal year ended June 30, 2021.

Therefore, according to information by segments, selling expenses decreased by ARS 338 million, from ARS 1,849 million during the fiscal year ended June 30, 2020 to ARS 1,511 million during the fiscal year ended June 30, 2021. In index terms, selling expenses decreased by 18.3%. Selling expenses, measured as a percentage of revenue, according to information by segments, increased from 11.1% during the fiscal year ended June 30, 2020, to 14.9% during the fiscal year ended June 30, 2021.

Shopping Malls. Selling expenses of the Shopping Malls segment decreased by 57.7%, from ARS 1,065 million during the fiscal year ended June 30, 2020, to ARS 451 million during the fiscal year ended June 30, 2021, mainly as a result of: (i) a decrease in the charge of taxes, rates and contributions of ARS 287 million; ii) a decrease in the charge of doubtful accounts of ARS 276 million; and iii) a decrease in the charge of publicity, advertising and other commercial expenses of ARS 29 million. Selling expenses, measured as a percentage of revenue from the Shopping Malls segment, decreased from 11.9% during the fiscal year ended June 30, 2020, to 8.5% during the fiscal year ended June 30, 2021.

Offices. Selling expenses associated with our Offices segment increased by 57.9%, from ARS 126 million during the fiscal year ended June 30, 2020, to ARS 199 million during the fiscal year ended June 30, 2021. Such variation was mainly generated as a result of: (i) an ARS 60 million increase in the charge of taxes, rates and contributions; (ii) an increase in the charge of doubtful accounts of ARS 14 million, partially offset by (ii) an ARS 3 million decrease in salaries, social security and other personnel administrative expenses. Selling expenses associated with our Offices segment, measured as a percentage of revenue from this segment, increased from 3.6% during the fiscal year ended June 30, 2020, to 7.2% during the fiscal year ended June 30, 2021.

Sales and Developments. Selling expenses associated with our Sales and Developments segment increased by 131.1%, from ARS 296 million during the fiscal year ended June 30, 2020, to ARS 684 million during the fiscal year ended June 30, 2021. Such variation was mainly generated by: (i) an ARS 236 million increase in fees and compensation; and (ii) an ARS 176 million increase in taxes, rates and contributions, both charges related to the sale of Bouchard Building and sale of floors in Boston Tower; partially offset by: (iii) a decrease of ARS 10 million in the charge of publicity, advertising and other commercial expenses, and, (ii) a decrease of ARS 4 million in salaries, social security and other personnel administrative expenses. Selling expenses associated with our Sales and Developments segment, measured as a percentage of revenue from this segment, increased from 26.8% during the fiscal year ended June 30, 2020, to 103.0% during the fiscal year ended June 30, 2021.

Hotels. Selling expenses associated with our Hotels segment decreased by 59.1%, from ARS 345 million during the fiscal year ended June 30, 2020, to ARS 141 million during the fiscal year ended June 30, 2021, mainly as a result of: (i) an ARS 96 million decrease in taxes, rates and contributions; (ii) an ARS 35 million decrease in salaries, social security and other personnel administrative expenses; (iii) an ARS 26 million decrease in publicity, advertising and other commercial expenses; and (iv) an ARS 25 million decrease in fees and compensation for services. Selling expenses associated with our Hotels segment, measured as a percentage of revenue from this segment, increased from 11.4% during the fiscal year ended June 30, 2020, to 15.3% during the fiscal year ended June 30, 2021.

International. Selling expenses associated with the International segment increased by 100,0%, no charge was recorded during the fiscal year ended June 30, 2020 and ARS 26 million was recorded during the fiscal year ended June 30, 2021, due to fees and compensation for services.

Corporate. Selling expenses associated with the Corporate segment were not recorded in both periods.

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Others. Selling expenses associated with our Others segment decreased by 41.2%, from ARS 17 million during the fiscal year ended June 30, 2020, to ARS 10 million during the fiscal year ended June 30, 2021. Selling expenses associated with our Others segment, measured as a percentage of revenue from this segment, increased from 14.5% during the fiscal year ended June 30, 2020, to 14.7% during the fiscal year ended June 30, 2021.

Other operating results, net June 2021 vs June 2020

Other operating results, net, according to the income statement, recorded a variation of ARS 205 million, from a net profit of ARS 119 million during the fiscal year ended June 30, 2020, to a net loss of ARS 86 million during the fiscal year ended June 30, 2021.

Other operating results, net from our joint ventures decreased by ARS 48 million, from a net profit of ARS 28 million during the fiscal year ended June 30, 2020, to a net loss of ARS 20 million during the fiscal year ended June 30, 2021.

In turn, other operating results on account of building administration expenses and collective promotion fund decreased by ARS 16 million, from ARS 91 million during the fiscal year ended June 30, 2020 (out of which a profit of ARS 85 million are allocated to the Shopping Malls segment and a profit of ARS 6 million to the Offices segment), to ARS 107 million during the fiscal year ended June 30, 2021 (out of which a profit of ARS 105 million are allocated to the Shopping Malls segment and a profit of ARS 2 million to the Offices segment).

Therefore, according to information by segments, the other operating results line, net, decreased by ARS 174 million, from a net profit of ARS 17 million during the fiscal year ended June 30, 2020 to a net loss of ARS 157 million during the fiscal year ended June 30, 2021.

Shopping Malls. Other operating results, net associated with our Shopping Malls segment decreased by ARS 152, from a net profit of ARS 26 million during the fiscal year ended June 30, 2020, to a net loss of ARS 126 million during the fiscal year ended June 30, 2021, mainly as a result of: (i) a decrease of ARS 163 million in interest generated by operating credits, (ii) a decrease of ARS 12 million in management fees, partially offset by; (iii) a decrease of ARS 14 million in the loss for lawsuits and others. Other operating results, net, from this segment, as a percentage of revenue from this segment, increased from 0.3% positive during the fiscal year ended June 30, 2020, to 2.4% negative during the fiscal year ended June 30, 2021.

Offices. Other operating results, net associated with our Offices segment increased by 117.9%, from a net loss of ARS 39 million during the fiscal year ended June 30, 2020, to a net profit of ARS 7 million during the fiscal year ended June 30, 2021, mainly as a consequence of an ARS 33 million decrease in others from the joint venture Quality S.A. and an ARS 6 million increase in interest generated by operating credits, among other items. Other operating results, net from this segment, as a percentage of the revenue from this segment, decreased from 1.1% negative during the fiscal year ended June 30, 2020, to 0.3% positive during the fiscal year ended June 30, 2021.

Sales and Developments. Other operating results, net associated with our Sales and Developments segment decreased by 68.3%, from a net loss of ARS 41 million during the fiscal year ended June 30, 2020, to a net loss of ARS 13 million during the fiscal year ended June 30, 2021, mainly due to (i) a decrease of ARS 44 million in the loss for lawsuits; partially offset by (ii) the non-recurrence of a recovery of a balance with Euromayor S.A de Inversiones in the comparative period by ARS 29 million; (iii) an ARS 16 million decrease in interest generated by operating credits; and, (iv) an increase of ARS 9 million in donations. Other operating results, net from this segment, as a percentage of the revenue of this segment, decreased from 3.7% negative during the fiscal year ended June 30, 2020, to 2.0% negative during the fiscal year ended June 30, 2021.

Hotels Other operating results, net associated with the Hotels segment increased by 60.0%, from a net loss of ARS 30 million during the fiscal year ended June 30, 2020, to a net loss of ARS 12 million during the fiscal year ended June 30, 2021, mainly due to lower charges from lawsuits and others. Other operating results, net from this segment, as a percentage of the revenue from this segment, increased from 1.0% negative during the fiscal year ended June 30, 2020, to 1.3% negative during the fiscal year ended June 30, 2021.

International. Other operating results, net (loss) associated with the International segment increased by 100,0%, no charge was recorded during the fiscal year ended June 30, 2020 and a loss of ARS 12 million was recorded during the fiscal year ended June 30, 2021.

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Corporate. Other operating results, net associated with the Corporate segment showed no variations between the reported periods.

Others. Other operating results, net associated with the Others segment decreased by 101.0%, from a net profit of ARS 101 million during the fiscal year ended June 30, 2020, to a net loss of ARS 1 million during the fiscal year ended June 30, 2021, mainly due to lack of income of fee charged to La Rural S.A. during the period ended June 30, 2021. Other operating results, net from this segment, as a percentage of the revenue from this segment, decreased from 86.3% positive during the fiscal year ended June 30, 2020, to 1.5% negative during the fiscal year ended June 30, 2021.

Profit / (loss) from operations June 2021 vs June 2020

Total consolidated profit / (loss) from operations, according to the income statement, decreased from a net profit of ARS 58,051 million during the fiscal year ended June 30, 2020 to a net loss of ARS 5,949 million during the fiscal year ended June 30, 2021. In index terms, the profit / (loss) from operations varied by 110.2%. Total consolidated profit / (loss) from operations, measured as a percentage of revenue from sales, leases and services, decreased from 273.0% positive during the fiscal year ended June 30, 2020, to 45.8% negative during the fiscal year ended June 30, 2021.

Profit / (loss) from operations from our joint ventures increased from a loss of ARS 330 million during the fiscal year ended June 30, 2020 (out of which a net profit of ARS 20 million is allocated to the Shopping Malls segment; a net loss of ARS 368 million to the Offices segment and a profit of ARS 18 million to the Sales and Developments segment), to a net loss of ARS 86 million during the fiscal year ended June 30, 2021 (out of which a net profit of ARS 162 million is allocated to the Shopping Malls segment; a net loss of ARS 246 million to the Offices segment and a net loss of ARS 2 million to the Sales and Developments segment).

Therefore, according to information by segments, the net profit from operations decreased from a net profit of ARS 58,486 million during the fiscal year ended June 30, 2020, to a net loss of ARS 5,736 million during the fiscal year ended June 30, 2021. The profit / (loss) from operations, measured as a percentage of revenue, according to information by segments, increased from a 349.6% profit during the fiscal year ended June 30, 2020, to a 56.7% profit during the fiscal year ended June 30, 2021.

Shopping Malls. Profit / (loss) from operations associated with the Shopping Malls segment decreased from a profit of ARS 2,617 million during the fiscal year ended June 30, 2020, to a loss of ARS 17,895 million during the fiscal year ended June 30, 2021.

Offices. Profit / (loss) from operations associated with our Offices segment decreased by 80.6%, from a net profit of ARS 37,812 million during the fiscal year ended June 30, 2020, to a net profit of ARS 7,340 million during the fiscal year ended June 30, 2021. Such variation was mainly due to an ARS 30,187 million decrease in the gain / (loss) from fair value adjustments of investment properties. Profit / (loss) from operations associated with the Offices segment, as a percentage of revenue from such segment, decreased from 1,067.5% during the fiscal year ended June 30, 2020, to 265.6% during the fiscal year ended June 30, 2021.

Sales and Developments. Profit / (loss) from operations associated with our Sales and Developments segment decreased by 69.8%, from a net profit of ARS 17,710 million during the fiscal year ended June 30, 2020, to a net profit of ARS 5,342 million during the fiscal year ended June 30, 2021. Such decrease is mainly due to the gain / (loss) from fair value adjustments of investment properties. Profit / (loss) from operations associated with the Sales and Developments segment, as a percentage of revenue from this segment, decreased from 1.604.2% during the fiscal year ended June 30, 2020, to 804.5% during the fiscal year ended June 30, 2021.

Hotels. Profit / (loss) from operations associated with the Hotels segment decreased by 397.5%, from a net profit of ARS 243 million during the fiscal year ended June 30, 2020, to a net loss of ARS 723 million during the fiscal year ended June 30, 2021. Such decrease is mainly due to the fact that revenue were significantly affected by a decline in the activity in the present period, attributable to the COVID-19 pandemic. The profit / (loss) from operations associated with the Hotels segment, as a percentage of revenue from such segment, increased from 8.0% positive during the fiscal year ended June 30, 2020, to 78.5% negative during the fiscal year ended June 30, 2021.

International. Profit / (loss) from operations associated with our International segment varied by 82.5%, from a net loss of ARS 166 million during the fiscal year ended June 30, 2020, to a net loss of ARS 29 million during the fiscal year ended June 30, 2021. Such variation is due to the income generated by the sale of Stowe House.

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Corporate. Profit / (loss) from operations associated with our Corporate segment decreased by 37.4%, from a loss of ARS 562 million during the fiscal year ended June 30, 2020, to a loss of ARS 352 million during the fiscal year ended June 30, 2021, mainly affected by general and administrative expenses.

Others. Profit / (loss) from operations associated with the Others segment decreased from a net profit of ARS 832 million during the fiscal year ended June 30, 2020, to a net profit of ARS 581 million during the fiscal year ended June 30, 2021.

Share of profit / (loss) of associates and joint ventures June 2021 vs June 2020

The share of profit / (loss) of associates and joint ventures, according to the income statement, decreased by 140.4%, from a net profit of ARS 10,847 million during the fiscal year ended June 30, 2020 to a net loss of ARS 4,380 million during the fiscal year ended June 30, 2021, mainly due to less negative results from the International segment and the Others segment.

Also, the net share of profit / (loss) of joint ventures, mainly from Nuevo Puerto Santa Fe S.A. (Shopping Malls segment), Quality Invest S.A. (Offices segment) and Cyrsa S.A. and Puerto Retiro S.A. (Sales and Developments segment), showed a 249.0% decrease, from a profit of ARS 263 million during the fiscal year ended June 30, 2020, to a loss of ARS 392 million during the fiscal year ended June 30, 2021, mainly attributable to the gain / (loss) from fair value adjustments of investment properties.

Shopping Malls. In the information by segments, the share of profit / (loss) of the joint venture Nuevo Puerto Santa Fe S.A. is recorded on a consolidated basis, line by line in this segment.

Offices. In the information by segments, the share of profit / (loss) of the joint venture Quality S.A. is recorded on a consolidated basis, line by line in this segment.

Sales and Developments. The share of profit / (loss) of the joint ventures Cyrsa S.A. and Puerto Retiro S.A is recorded on a consolidated basis, line by line. The share of profit / (loss) of our associate Manibil S.A., which was recorded in this line until its sale, decreased by ARS 16 million during the fiscal year ended June 30, 2021.

Hotels. This segment does not show results from the share of profit / (loss) of associates and joint ventures.

International. The share of profit / (loss) of associates of this segment decreased by 108.0%, from a net profit of ARS 11,080 million during the fiscal year ended June 30, 2020, to a net loss of ARS 891 million during the fiscal year ended June 30, 2021, mainly generated by a negative result from our investment in New Lipstick LLC of ARS 480 million; the non-recurrence of USD 42 million gain from Metropolitan related to the forgiveness of RBC loan; and a negative result from our investment in Condor Hospitality of ARS 414 million.

Other. The share of profit / (loss) of associates from the Others segment decreased by 521.2%, from a net loss of ARS 496 million during the fiscal year ended June 30, 2020, to a net loss of ARS 3,081 million during the fiscal year ended June 30, 2021, mainly as a result of the variation from our investments in TGLT S.A. in the amount of ARS 1,991 million negative.

Financial results, net

The financial results went from a loss of ARS 18,235 million during the fiscal year ended June 30, 2020 to a profit of ARS 3,334 million during the fiscal year ended June 30, 2021. Mainly due to lower results in terms of the exchange rate variation and the result from changes in fair value of financial assets.

Income Tax

The Company applies the deferred tax method to calculate the income tax for the reported periods, thus recognizing temporary differences as tax assets and liabilities. The income tax charge went from a loss of ARS 10,065 million during the fiscal year ended June 30, 2020, to a loss of ARS 21,673 million during the fiscal year ended June 30, 2021.

Profit for the year

As a result of the factors described above, the profit for the year went from a profit of ARS 35,651 million (that includes a loss of ARS 4,947 million for the effect of discontinued operations) during the fiscal year ended June 30, 2020 to a loss of ARS 37,591 million (that includes a loss of ARS 8,923 million for the effect of discontinued operations) during the fiscal year ended June 30, 2021.

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Results of Operations for the fiscal years ended June 30, 2020 and 2019

|  | Total Segment Information |  |  | Joint Ventures |  |  | Expenses and Collective Promotion Fund |  |  | Inter-segment eliminations and non-reportable assets / liabilities |  |  | Total income statement / statement of financial position |
|  | 06.30.20 |  |  | 06.30.19 |  |  | Var. |  |  | 06.30.20 |  |  | 06.30.19 |  |  | Var. |  |  | 06.30.20 |  |  | 06.30.19 |  |  | Var. |  |  | 06.30.20 |  |  | 06.30.19 |  |  | Var. |  |  | 06.30.20 |  |  | 06.30.19 |  |  | Var. |
|  | (in Million ARS) |
Revenue |  |  | 16,731 |  |  |  | 22,613 |  |  |  | (5,882 | ) |  |  | (90 | ) |  |  | (140 | ) |  |  | 50 |  |  |  | 4,655 |  |  |  | 5,567 |  |  |  | (912 | ) |  |  | (33 | ) |  |  | (36 | ) |  |  | 3 |  |  |  | 21,263 |  |  |  | 28,004 |  |  |  | (6,741 | )
Costs |  |  | (4,101 | ) |  |  | (4,773 | ) |  |  | 672 |  |  |  | 80 |  |  |  | 102 |  |  |  | (22 | ) |  |  | (4,851 | ) |  |  | (5,790 | ) |  |  | 939 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (8,872 | ) |  |  | (10,461 | ) |  |  | 1,589 |
Gross profit / (loss) |  |  | 12,630 |  |  |  | 17,840 |  |  |  | (5,210 | ) |  |  | (10 | ) |  |  | (38 | ) |  |  | 28 |  |  |  | (196 | ) |  |  | (223 | ) |  |  | 27 |  |  |  | (33 | ) |  |  | (36 | ) |  |  | 3 |  |  |  | 12,391 |  |  |  | 17,543 |  |  |  | (5,152 | )
Net gain / (loss) from fair value adjustment of investment properties |  |  | 51,059 |  |  |  | (59,489 | ) |  |  | 110,548 |  |  |  | (395 | ) |  |  | 1,258 |  |  |  | (1,653 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 50,664 |  |  |  | (58,231 | ) |  |  | 108,895 |
General and administrative expenses |  |  | (3,371 | ) |  |  | (4,176 | ) |  |  | 805 |  |  |  | 20 |  |  |  | 24 |  |  |  | (4 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 50 |  |  |  | 66 |  |  |  | (16 | ) |  |  | (3,301 | ) |  |  | (4,086 | ) |  |  | 785 |
Selling expenses |  |  | (1,849 | ) |  |  | (1,628 | ) |  |  | (221 | ) |  |  | 27 |  |  |  | 9 |  |  |  | 18 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (1,822 | ) |  |  | (1,619 | ) |  |  | (203 | )
Other operating results, net |  |  | 17 |  |  |  | (841 | ) |  |  | 858 |  |  |  | 28 |  |  |  | 282 |  |  |  | (254 | ) |  |  | 91 |  |  |  | 119 |  |  |  | (28 | ) |  |  | (17 | ) |  |  | (30 | ) |  |  | 13 |  |  |  | 119 |  |  |  | (470 | ) |  |  | 589 |
Profit / (loss) from operations |  |  | 58,486 |  |  |  | (48,294 | ) |  |  | 106,780 |  |  |  | (330 | ) |  |  | 1,535 |  |  |  | (1,865 | ) |  |  | (105 | ) |  |  | (104 | ) |  |  | (1 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 58,051 |  |  |  | (46,863 | ) |  |  | 104,914 |
Share of profit / (loss) of associates and joint ventures |  |  | 10,584 |  |  |  | (9,060 | ) |  |  | 19,644 |  |  |  | 263 |  |  |  | (1,527 | ) |  |  | 1,790 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 10,847 |  |  |  | (10,587 | ) |  |  | 21,434 |
Segment profit / (loss) |  |  | 69,070 |  |  |  | (57,354 | ) |  |  | 126,424 |  |  |  | (67 | ) |  |  | 8 |  |  |  | (75 | ) |  |  | (105 | ) |  |  | (104 | ) |  |  | (1 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 68,898 |  |  |  | (57,450 | ) |  |  | 126,348 |
Reportable assets |  |  | 913,638 |  |  |  | 971,842 |  |  |  | (58,204 | ) |  |  | (1,040 | ) |  |  | (915 | ) |  |  | (125 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 29,456 |  |  |  | 47,973 |  |  |  | (18,517 | ) |  |  | 942,054 |  |  |  | 1,018,900 |  |  |  | (76,846 | )
Reportable liabilities |  |  | (602,315 | ) |  |  | (692,205 | ) |  |  | 89,890 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (155,511 | ) |  |  | (142,463 | ) |  |  | (13,048 | ) |  |  | (757,826 | ) |  |  | (834,668 | ) |  |  | 76,842 |
Net reportable assets |  |  | 311,323 |  |  |  | 279,637 |  |  |  | 31,686 |  |  |  | (1,040 | ) |  |  | (915 | ) |  |  | (125 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (126,055 | ) |  |  | (94,490 | ) |  |  | (31,565 | ) |  |  | 184,228 |  |  |  | 184,232 |  |  |  | (4 | )

Operations Center in Argentina

Below is a summary analysis of the operating segments by products and services of the Operations Center in Argentina for the years ended June 30, 2020 and 2019

|  | Shopping Malls |  |  | Offices |  |  | Sales and Developments |  |  | Hotels |  |  | International |  |  | Corporate |  |  | Others |  |  | Total |
|  | 06.30.20 |  |  | 06.30.19 |  |  | Var. |  |  | 06.30.20 |  |  | 06.30.19 |  |  | Var. |  |  | 06.30.20 |  |  | 06.30.19 |  |  | Var. |  |  | 06.30.20 |  |  | 06.30.19 |  |  | Var. |  |  | 06.30.20 |  |  | 06.30.19 |  |  | Var. |  |  | 06.30.20 |  |  | 06.30.19 |  |  | Var. |  |  | 06.30.20 |  |  | 06.30.19 |  |  | Var. |  |  | 06.30.20 |  |  | 06.30.19 |  |  | Var. |
|  | (in Million ARS) |
Revenue |  |  | 8,915 |  |  |  | 12,828 |  |  |  | (3,913 | ) |  |  | 3,542 |  |  |  | 3,362 |  |  |  | 180 |  |  |  | 1,104 |  |  |  | 1,681 |  |  |  | (577 | ) |  |  | 3,036 |  |  |  | 4,435 |  |  |  | (1,399 | ) |  |  | 17 |  |  |  | 21 |  |  |  | (4 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 117 |  |  |  | 286 |  |  |  | (169 | ) |  |  | 16,731 |  |  |  | 22,613 |  |  |  | (5,882 | )
Costs |  |  | (851 | ) |  |  | (1,166 | ) |  |  | 315 |  |  |  | (207 | ) |  |  | (197 | ) |  |  | (10 | ) |  |  | (1,008 | ) |  |  | (790 | ) |  |  | (218 | ) |  |  | (1,870 | ) |  |  | (2,383 | ) |  |  | 513 |  |  |  | (18 | ) |  |  | (9 | ) |  |  | (9 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (147 | ) |  |  | (228 | ) |  |  | 81 |  |  |  | (4,101 | ) |  |  | (4,773 | ) |  |  | 672 |
Gross profit / (loss) |  |  | 8,064 |  |  |  | 11,662 |  |  |  | (3,598 | ) |  |  | 3,335 |  |  |  | 3,165 |  |  |  | 170 |  |  |  | 96 |  |  |  | 891 |  |  |  | (795 | ) |  |  | 1,166 |  |  |  | 2,052 |  |  |  | (886 | ) |  |  | (1 | ) |  |  | 12 |  |  |  | (13 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (30 | ) |  |  | 58 |  |  |  | (88 | ) |  |  | 12,630 |  |  |  | 17,840 |  |  |  | (5,210 | )
Net (loss) / gain from fair value adjustment of investment properties |  |  | (3,162 | ) |  |  | (60,952 | ) |  |  | 57,790 |  |  |  | 34,974 |  |  |  | 925 |  |  |  | 34,049 |  |  |  | 18,293 |  |  |  | 1,091 |  |  |  | 17,202 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 9 |  |  |  | (9 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 954 |  |  |  | (562 | ) |  |  | 1,516 |  |  |  | 51,059 |  |  |  | (59,489 | ) |  |  | 110,548 |
General and administrative expenses |  |  | (1,246 | ) |  |  | (1,420 | ) |  |  | 174 |  |  |  | (332 | ) |  |  | (318 | ) |  |  | (14 | ) |  |  | (342 | ) |  |  | (425 | ) |  |  | 83 |  |  |  | (548 | ) |  |  | (738 | ) |  |  | 190 |  |  |  | (165 | ) |  |  | (165 | ) |  |  | - |  |  |  | (562 | ) |  |  | (940 | ) |  |  | 378 |  |  |  | (176 | ) |  |  | (170 | ) |  |  | (6 | ) |  |  | (3,371 | ) |  |  | (4,176 | ) |  |  | 805 |
Selling expenses |  |  | (1,065 | ) |  |  | (796 | ) |  |  | (269 | ) |  |  | (126 | ) |  |  | (148 | ) |  |  | 22 |  |  |  | (296 | ) |  |  | (178 | ) |  |  | (118 | ) |  |  | (345 | ) |  |  | (474 | ) |  |  | 129 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (17 | ) |  |  | (32 | ) |  |  | 15 |  |  |  | (1,849 | ) |  |  | (1,628 | ) |  |  | (221 | )
Other operating results, net |  |  | 26 |  |  |  | (29 | ) |  |  | 55 |  |  |  | (39 | ) |  |  | (47 | ) |  |  | 8 |  |  |  | (41 | ) |  |  | (429 | ) |  |  | 388 |  |  |  | (30 | ) |  |  | 172 |  |  |  | (202 | ) |  |  | - |  |  |  | (36 | ) |  |  | 36 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 101 |  |  |  | (472 | ) |  |  | 573 |  |  |  | 17 |  |  |  | (841 | ) |  |  | 858 |
Profit / (loss) from operations |  |  | 2,617 |  |  |  | (51,535 | ) |  |  | 54,152 |  |  |  | 37,812 |  |  |  | 3,577 |  |  |  | 34,235 |  |  |  | 17,710 |  |  |  | 950 |  |  |  | 16,760 |  |  |  | 243 |  |  |  | 1,012 |  |  |  | (769 | ) |  |  | (166 | ) |  |  | (180 | ) |  |  | 14 |  |  |  | (562 | ) |  |  | (940 | ) |  |  | 378 |  |  |  | 832 |  |  |  | (1,178 | ) |  |  | 2,010 |  |  |  | 58,486 |  |  |  | (48,294 | ) |  |  | 106,780 |
Share of (loss) / profit of associates and joint ventures |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (56 | ) |  |  | 56 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 11,080 |  |  |  | (5,526 | ) |  |  | 16,606 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (496 | ) |  |  | (3,478 | ) |  |  | 2,982 |  |  |  | 10,584 |  |  |  | (9,060 | ) |  |  | 19,644 |
Segment profit / (loss) |  |  | 2,617 |  |  |  | (51,535 | ) |  |  | 54,152 |  |  |  | 37,812 |  |  |  | 3,577 |  |  |  | 34,235 |  |  |  | 17,710 |  |  |  | 894 |  |  |  | 16,816 |  |  |  | 243 |  |  |  | 1,012 |  |  |  | (769 | ) |  |  | 10,914 |  |  |  | (5,706 | ) |  |  | 16,620 |  |  |  | (562 | ) |  |  | (940 | ) |  |  | 378 |  |  |  | 336 |  |  |  | (4,656 | ) |  |  | 4,992 |  |  |  | 69,070 |  |  |  | (57,354 | ) |  |  | 126,424 |
Reportable assets |  |  | 74,176 |  |  |  | 75,724 |  |  |  | (1,548 | ) |  |  | 94,635 |  |  |  | 47,672 |  |  |  | 46,963 |  |  |  | 50,251 |  |  |  | 42,635 |  |  |  | 7,616 |  |  |  | 2,759 |  |  |  | 2,897 |  |  |  | (138 | ) |  |  | 3,471 |  |  |  | (10,441 | ) |  |  | 13,912 |  |  |  | 9 |  |  |  | 6 |  |  |  | 3 |  |  |  | 12,419 |  |  |  | 9,082 |  |  |  | 3,337 |  |  |  | 237,720 |  |  |  | 167,575 |  |  |  | 70,145 |
Reportable liabilities |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Net reportable assets |  |  | 74,176 |  |  |  | 75,724 |  |  |  | (1,548 | ) |  |  | 94,635 |  |  |  | 47,672 |  |  |  | 46,963 |  |  |  | 50,251 |  |  |  | 42,635 |  |  |  | 7,616 |  |  |  | 2,759 |  |  |  | 2,897 |  |  |  | (138 | ) |  |  | 3,471 |  |  |  | (10,441 | ) |  |  | 13,912 |  |  |  | 9 |  |  |  | 6 |  |  |  | 3 |  |  |  | 12,419 |  |  |  | 9,082 |  |  |  | 3,337 |  |  |  | 237,720 |  |  |  | 167,575 |  |  |  | 70,145 |

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Operations Center in Israel

Below is a summary analysis of the operating segments by products and services of the Operations Center in Israel where only assets and liabilities are presented for the years ended June 30, 2020 and 2019

|  | Real Estate |  |  | Supermarkets |  |  | Telecommunications |  |  | Insurance |  |  | Corporate |  |  | Others |  |  | Total |  |  |  |
|  | 06.30.20 |  |  | 06.30.19 |  |  | Var. |  |  | 06.30.20 |  |  | 06.30.19 |  |  | Var. |  |  | 06.30.20 |  |  | 06.30.19 |  |  | Var. |  |  | 06.30.20 |  |  | 06.30.19 |  |  | Var. |  |  | 06.30.20 |  |  | 06.30.19 |  |  | Var. |  |  | 06.30.20 |  |  | 06.30.19 |  |  | Var. |  |  | 06.30.20 |  |  | 06.30.19 |  |  | Var. |
|  | (in Million Pesos) |  |  |  |
Reportable assets |  |  | 229,718 |  |  |  | 455,745 |  |  |  | (226,027 | ) |  |  | 42,191 |  |  |  | 34,566 |  |  |  | 7,625 |  |  |  | 210,318 |  |  |  | 164,289 |  |  |  | 46,029 |  |  |  | 5,072 |  |  |  | 34,002 |  |  |  | (28,930 | ) |  |  | 25,015 |  |  |  | 62,238 |  |  |  | (37,223 | ) |  |  | 163,604 |  |  |  | 53,427 |  |  |  | 110,177 |  |  |  | 675,918 |  |  |  | 804,267 |  |  |  | (128,349 | )
Reportable liabilities |  |  | (219,789 | ) |  |  | (353,800 | ) |  |  | 134,011 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (159,326 | ) |  |  | (127,370 | ) |  |  | (31,956 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (164,429 | ) |  |  | (189,891 | ) |  |  | 25,462 |  |  |  | (58,771 | ) |  |  | (21,144 | ) |  |  | (37,627 | ) |  |  | (602,315 | ) |  |  | (692,205 | ) |  |  | 89,890 |
Net reportable assets |  |  | 9,929 |  |  |  | 101,945 |  |  |  | (92,016 | ) |  |  | 42,191 |  |  |  | 34,566 |  |  |  | 7,625 |  |  |  | 50,992 |  |  |  | 36,919 |  |  |  | 14,073 |  |  |  | 5,072 |  |  |  | 34,002 |  |  |  | (28,930 | ) |  |  | (139,414 | ) |  |  | (127,653 | ) |  |  | (11,761 | ) |  |  | 104,833 |  |  |  | 32,283 |  |  |  | 72,550 |  |  |  | 73,603 |  |  |  | 112,062 |  |  |  | (38,459 | )

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Revenue 2020 vs 2019

Revenue from sales, leases, and services, according to the income statement, decreased by ARS 6,741 million from ARS 28,004 million during the fiscal year ended June 30, 2019 to ARS 21,263 million during the fiscal year ended June 30, 2020. In index terms, revenue from sales, leases, and services decreased by 24.1% mainly explained by the closure of operations of shopping malls since March 20, 2020 due to COVID-19 pandemic.

In turn, revenue from expenses and Collective Promotion Fund decreased by 16.4%, from ARS 5,567 million (out of which ARS 5,121 million are allocated to the Shopping Malls segment and ARS 446 million are allocated to the Offices segment) during the fiscal year ended June 30, 2019, to ARS 4,655 million (out of which ARS 4,289 million are allocated to the Shopping Malls segment and ARS 366 million are allocated to the Offices segment) during the fiscal year ended June 30, 2020.

Moreover, revenue from our joint ventures decreased by 35.7%, from ARS 140 million (out of which ARS 115 million are allocated to the Shopping Malls segment, ARS 24 million are allocated to the Offices segment and ARS 1 million to the Sales and Developments segment) during the fiscal year ended June 30, 2019 to ARS 90 million (out of which ARS 79 million are allocated to the Shopping Malls segment and ARS 11 million are allocated to the Offices segment) during the fiscal year ended June 30, 2020.

Finally, revenue from inter-segment transactions decreased by ARS 3 million, from ARS 36 million during the fiscal year ended June 30, 2019, to ARS 33 million during the fiscal year ended June 30, 2020.

Therefore, according to information by segments, revenue decreased by ARS 5,882 million, from ARS 22,613 million during the fiscal year ended June 30, 2019, to ARS 16,731 million during the fiscal year ended June 30, 2020. Revenue, according to information by segments, decreased by 26.0%.

Shopping Malls. Revenue from the Shopping Malls segment decreased by 30.5% from ARS 12,828 million during the fiscal year ended June 30, 2019, to ARS 8,915 million during the fiscal year ended June 30, 2020. This decrease is mainly attributable to: (i) a decrease of ARS 2,869 million in revenue base rent and contingent rent (total sales of our tenants decreased from ARS 141,843 million during fiscal year 2019 to ARS 105,087 million during fiscal year 2020); (ii) a decrease of ARS 294 million in Others, mainly caused by the cancellation of the contract with Walmart; (iii) a decrease of ARS 279 million in parking fees and ;(iv) a decrease of ARS 227 million in admission rights.

Offices. Revenue from the Offices segment increased by 5.4% from ARS 3,362 million during the fiscal year ended June 30, 2019, to ARS 3,542 million during the fiscal year ended June 30, 2020. This variation is mainly explained by an increase of 5.9% in revenue from leases, from ARS 3,303 million during the fiscal year ended June 30, 2019 to ARS 3,498 million during the fiscal year ended June 30, 2020, mainly as a result of an increase in leases of buildings, PH Office Park and Zeta Buildings, and by the effect of the exchange rate variation.

Sales and Developments. Revenue from the Sales and Developments segment recorded a 34.3% decrease from ARS 1,681 million during the fiscal year ended June 30, 2019, to ARS 1,104 million during the fiscal year ended June 30, 2020. This segment often varies significantly from fiscal year to fiscal year to the non-recurrence of different sales transactions carried out by the Group over time.

Hotels. Revenue from our Hotels segment decreased by 31.5% from ARS 4,435 million during the fiscal year ended June 30, 2019, to ARS 3,036 million during the fiscal year ended June 30, 2020, mainly due to a decrease in revenue from Hoteles Argentinos S.A.U. as a result of a deflag process and due to the impact on revenue as a result of the fall in the tourist industry during March because of COVID 19.

International. Revenue from our International segment decreased by ARS 4 million, from ARS 21 million during the fiscal year ended June 30, 2019, to ARS 17 million during the fiscal year ended June 30, 2020, due to an ARS 4 million decrease in revenue from leases.

Corporate. Revenue associated with our Corporate segment were not recorded in both fiscal years.

Others. Revenue from the Others segment decreased by 59.1% from ARS 286 million during the fiscal year ended June 30, 2019, to ARS 117 million during the fiscal year ended June 30, 2020, mainly due to the revenue derived from La Arena and La Rural S.A., OFC S.R.L., Ogden S.A. and Entretenimiento Universal S.A. - Joint venture - (Convention Center and Exhibitions of the City of Buenos Aires Administrator).

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Costs 2020 vs 2019

Total consolidated costs, according to the income statement, decreased by ARS 1,589 million, from ARS 10,461 million during the fiscal year ended June 30, 2019, to ARS 8,872 million during the fiscal year ended June 30, 2020. In index terms, costs decreased by 15.2%. Furthermore, consolidated total costs measured as a percentage of consolidated total revenue increased from 37.4% during the fiscal year ended June 30, 2019 to 41.7% during the fiscal year ended June 30, 2020.

In turn, costs related to expenses and Collective Promotion Fund decreased by 16.2% from ARS 5,790 million (out of which ARS 5,337 million are allocated to the Shopping Malls segment and ARS 453 million are allocated to the Offices segment) during the fiscal year ended June 30, 2019, to ARS 4,851 million (out of which ARS 4,464 million are allocated to the Shopping Malls segment and ARS 387 million are allocated to the Offices segment) during the fiscal year ended June 30, 2020, mainly due to lower costs originated by our Shopping Malls, which decreased by 16.4% from ARS 5,337 million during the fiscal year ended June 30, 2019, to ARS 4,464 million during the fiscal year ended June 30, 2020.

Likewise, costs from our joint ventures showed no variations remaining stable at ARS 102 million during the fiscal year ended June 30, 2019 (out of which ARS 25 million are allocated to the Shopping Malls segment; ARS 64 million to the Offices segment and 13 million to the Sales and Developments segment) and ARS 80 million during the fiscal year ended June 30, 2020 (out of which ARS 10 million are allocated to the Shopping Malls segment; ARS 59 million to the Offices segment and 11 million to the Sales and Developments segment).

Finally, costs from inter-segment operations showed no variations for the reported fiscal years.

Therefore, according to information by segments (taking into account the costs from our joint ventures and without considering the costs associated with expenses and collective promotion fund or the costs from inter-segment operations), costs evidenced a decrease of ARS 672 million, from ARS 4,773 million during the fiscal year ended June 30, 2019 to ARS 4,101 million during the fiscal year ended June 30, 2020. In index terms, costs decreased by 14.1%. Likewise, total costs, measured as a percentage of total revenue, according to information by segments, increased from 21.1% during the fiscal year ended June 30, 2019 to 24.5% during the fiscal year ended June 30, 2020.

Shopping Malls. Costs associated with the Shopping Malls segment decreased by 27.0%, from ARS 1,166 million during the fiscal year ended June 30, 2019, to ARS 851 million during the fiscal year ended June 30, 2020, mainly due to: (i) a decrease in rentals and expenses of ARS 196 million (mainly resulting from the absorption of expenses deficit during the previous fiscal year) and (ii) a reduced charge salaries, social security costs and other personnel administrative expenses of ARS 118 million. Costs associated with the Shopping Malls segment, measured as a percentage of the revenue from this segment, increased from 9.1% during the fiscal year ended June 30, 2019, to 9.5% during the fiscal year ended June 30, 2020.

Offices. Costs associated with the Offices segment increased by 5.1%, from ARS 197 million during the fiscal year ended June 30, 2019, to ARS 207 million during the fiscal year ended June 30, 2020, mainly due to (i) an increase in leases and expenses of ARS 49 million; offset by: (ii) a decrease in maintenance expenses of ARS 18 million; and (iii) a decrease in amortization and depreciation of ARS 17 million. Costs associated with the Offices segment, measured as a percentage the revenue from this segment, remained stable at 5.9% during fiscal years ended June 30, 2019 and 2020.

Sales and Developments. Costs associated with our Sales and Developments segment recorded a 27.6% increase from ARS 790 million during the fiscal year ended June 30, 2019, to ARS 1,008 million during the fiscal year ended June 30, 2020 mainly due to: (i) the exchange transaction with respect to the Coto air space, resulting in fees and compensation costs for ARS 80 million, and an increase in goods and services sale costs of ARS 27 million; and (ii) an increase in the cost of sale of goods and services generated by Catalinas in an amount of ARS 72 million. Costs in the Sales and Developments segment, measured as a percentage of revenue from this segment, increased from 47.0% during the fiscal year ended June 30, 2019, to 91.3% during the fiscal year ended June 30, 2020.

Hotels. Costs in the Hotels segment decreased by 21.5%, from ARS 2,383 million during the fiscal year ended June 30, 2019, to ARS 1,870 million during the fiscal year ended June 30, 2020, mainly as a result of (i) an ARS 283 million decrease in the costs of salaries, social security and other personnel expenses; (ii) an ARS 100 million decrease in maintenance, repair, and services; (iii) an ARS 57 million decrease in food, beverages and other hotel expenses; and (iv) an ARS 51 million decrease in fees and compensation services. Costs in the Hotels segment, measured as a percentage of revenue from this segment, increased from 53.7% during the fiscal year ended June 30, 2019, to 61.6% during the fiscal year ended June 30, 2020.

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International. Costs in the International segment increased 100.0%, amounting to ARS 9 million during the fiscal year ended June 30, 2019 and ARS 18 million during the fiscal year ended June 30, 2020, mainly as a result of: (i) an ARS 6 million increase in maintenance, repair and services; (ii) an ARS 2 million increase in taxes, fees, and contributions; and (iii) an ARS 1 million increase in fees and compensation for services. Costs in the International segment, measured as a percentage of revenue from this segment, increased from 42.9% during the fiscal year ended June 30, 2019, to 105.9% during the fiscal year ended June 30, 2020.

Corporate. Costs in the Corporate segment were not recorded in both fiscal years.

Others. Costs in the Others segment decreased by 35.5%, from ARS 228 million during the fiscal year ended June 30, 2019, to ARS 147 million during the fiscal year ended June 30, 2020, mainly as a result of: (i) an ARS 51 million decrease in leases and expenses; (ii) an ARS 44 million decrease in taxes, fees and contributions; and (iii) an ARS 32 million decrease in fees and compensation for services, partially offset by (iv) an ARS 54 million increase in depreciation and amortization.

Gross profit / (loss) 2020 vs. 2019

The total consolidated gross profit, according to the income statement, decreased by ARS 5,152 million from ARS 17,543 million during the fiscal year ended June 30, 2019 to ARS 12,391 million during the fiscal year ended June 30, 2020. In index terms, the gross profit decreased by 29.4%. The total consolidated gross profit, measured as a percentage of revenue, decreased from 62.6% during the fiscal year ended June 30, 2019 to 58.3% during the fiscal year ended June 30, 2020.

In turn, total gross profit / (loss) on account of expenses and collective promotion fund decreased by ARS 27 million, from ARS 223 million during the fiscal year ended June 30, 2019 (out of which a loss of ARS 216 million derives from Shopping Malls segment and a loss of ARS 7 million from the Offices segment), to ARS 196 million during the fiscal year ended June 30, 2020 (out of which a loss of ARS 175 million derives from Shopping Malls segment and other loss of ARS 21 million from the Offices segment).

Additionally, the gross profit from our joint ventures decreased by 73.7%, from a profit of ARS 38 million during the fiscal year ended June 30, 2019 to a profit of ARS 10 million during the fiscal year ended June 30, 2020.

Therefore, according to information by segments, gross profit decreased by ARS 5,210 million, from ARS 17,840 million during the fiscal year ended June 30, 2019 to ARS 12,630 million during the fiscal year ended June 30, 2020. In index terms, the gross profit decreased by 29.2%. In addition, gross profit, measured as a percentage of revenue, according to information by segments, decreased from 78.9% during the fiscal year ended June 30, 2019, to 75.5% during the fiscal year ended June 30, 2020.

Shopping Malls. Gross profit from the Shopping Malls segment decreased by 30.9%, from ARS 11,662 million during the fiscal year ended June 30, 2019, to ARS 8,064 million during the fiscal year ended June 30, 2020, mainly as a result of a decrease in the total sales of our tenants in real terms, causing a lower percentage rentals under our lease agreements. Gross profit from the Shopping Malls segment as a percentage of the segment revenue, decreased from 90.9% during the fiscal year ended June 30, 2019, to 90.5% during the fiscal year ended June 30, 2020.

Offices. Gross profit from the Offices segment increased by 5.4%, from ARS 3,165 million during the fiscal year ended June 30, 2019, to ARS 3,335 million during the fiscal year ended June 30, 2020. Gross profit from the Offices segment, measured as percentage of revenue from this segment, remained stable at 94.1% during fiscal years ended June 30, 2019 and 2020.

Sales and developments. Gross profit from the Sales and Developments segment decreased by 89.2%, from a profit of ARS 891 million during the fiscal year ended June 30, 2019, to an ARS 96 million profit during the fiscal year ended June 30, 2020. Gross profit from the Sales and Developments segment, measured as a percentage of revenue from this segment, decreased from 53.0% positive during the fiscal year ended June 30, 2019, to 8.7% positive during the fiscal year ended June 30, 2020.

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Hotels. Gross profit from the Hotels segment decreased by 43.2%, from a profit of ARS 2,052 million during the fiscal year ended June 30, 2019, to an ARS 1,166 million profit during the fiscal year ended June 30, 2020. Gross profit from the Hotels segment, measured as a percentage of revenue from this segment, decreased from 46.3% positive during the fiscal year ended June 30, 2019, to 38.4% positive during the fiscal year ended June 30, 2020.

International. Gross profit / (loss) from the International segment decreased by ARS -13 million, as a gross profit of ARS 12 was recorded during the fiscal year ended June 30, 2019 and an ARS 1 million gross loss was recorded during the fiscal year ended June 30, 2020. Gross profit from the International segment, measured as a percentage of revenue from this segment, decreased from 57.1% positive during the fiscal year ended June 30, 2019, to 5.9% negative during the fiscal year ended June 30, 2020.

Corporate. Gross profit from the Corporate segment did not show any variations during the reported fiscal years.

Others. Gross profit / (loss) from the Others segment decreased by 151.7%, from a profit of ARS 58 million during the fiscal year ended June 30, 2019, to an ARS 30 million loss during the fiscal year ended June 30, 2020. Gross profit from the Others segment, measured as a percentage of revenue from this segment, increased from 20.3% positive during the fiscal year ended June 30, 2019, to 25.6% negative during the fiscal year ended June 30, 2020.

Net gain (loss) from fair value adjustment of investment properties 2020 vs 2019

Total consolidated net gain/(loss) from fair value adjustment of investment properties, according to the income statement, increased by ARS 108,895 million, from a net loss of ARS 58,231 million during the fiscal year ended June 30, 2019, to a net profit of ARS 50,664 million during the fiscal year ended June 30, 2020.

For the fiscal year ended June 30, 2020, the net gain/(loss) from fair value adjustment of investment properties was a gain of ARS 51,059 million (an ARS 3,162 million loss from our Shopping Malls segment; an ARS 34,974 million gain from our Offices segment; an ARS 18,293 million gain from our Sales and Developments segment and an ARS 954 million gain from our Others segment).

The net impact of prices in Pesos of our properties mainly resulted from a change in macroeconomic conditions: (i) a negative impact of 11,067 million generated by a decrease in the projected cash flows considering estimated growth rate for the shopping malls DCF, and due to the conversion into U.S. dollars of the projected cash flows considering estimated USD/ARS exchange rates; (ii) an increase of 8 basis points in the discount rate, that is used to discount the projected cash flows from the Shopping Malls segment, mainly due to a significant increase in the country risk premium, as a result there was a decrease of ARS 263.7 million in the fair value of our Shopping Malls, assuming all other factors remain unchanged; and (iii) an increase of ARS 27,257 million as a consequence of the conversion of the value of the Shopping Malls in dollar terms into pesos considering the end of fiscal year exchange rate of ARS 70.260 per dollar.

The offices market in Argentina is a liquid market, in which a great number of counterparties participates carrying out sale-purchase transactions. This situation results in significant and representative sale-purchase prices. Furthermore, lease agreements are denominated in U.S. dollars and are usually executed for three-year terms, hence this business produces stable cash flows in U.S. dollars. In this sense, we use the Market Approach method to determine the fair value of our Offices and Others segment, the value per square meter being the most representative measurement.

Since September 2019, the real estate market experienced certain operational changes due to the adoption of foreign exchange regulations. As a result, it is very likely that office buildings/lands reserved sales be settled in Pesos at an implied exchange rate higher than the official exchange rate, which can be observed in the transactions conducted by the Company before and after closing of these financial statements. Therefore, we have valued our offices and lands reserved in Pesos as of closing of these financial statements considering the aforementioned situation, thus resulting in a gain with respect to the previously recorded values.Therefore, we have valued our office buildings in pesos at the end of the fiscal year considering the situation described above, which results in a gain of ARS 34,974 million compared to the values previously recorded during fiscal year 2019.

General and administrative expenses 2020 vs 2019

Total general and administrative expenses, according to the income statement, recorded a decrease of ARS 785 million, from ARS 4,086 million during the fiscal year ended June 30, 2019 to ARS 3,301 million during the fiscal year ended June 30, 2020. In index terms, administrative expenses decreased by 19.2%. Total administrative expenses, measured as a percentage of revenue, increased from 14.6% during the fiscal year ended June 30, 2019, to 15.5% during the fiscal year ended June 30, 2020.

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In turn, administrative expenses of our joint ventures decreased by ARS 4 million, from ARS 24 million during the fiscal year ended June 30, 2019, to ARS 20 million during the fiscal year ended June 30, 2020.

Finally, administrative expenses for inter-segment transactions decreased by ARS 16 million, from ARS 66 million during the fiscal year ended June 30, 2019, to ARS 50 million during the fiscal year ended June 30, 2020.

Therefore, according to information by segments, administrative expenses decreased by ARS 805 million, from ARS 4,176 million during the fiscal year ended June 30, 2019, to ARS 3,371 million during the fiscal year ended June 30, 2020. In index terms, administrative expenses, decreased by 19.3%. Administrative expenses, measured as a percentage of revenue, increased from 18.5% during the fiscal year ended June 30, 2019, to 20.1% during the fiscal year ended June 30, 2020.

Shopping Malls. Administrative expenses of Shopping Malls decreased by 12.3%, from ARS 1,420 million during the fiscal year ended June 30, 2019, to ARS 1,246 million during the fiscal year ended June 30, 2020, mainly as a result of: (i) a decrease in salaries, social security costs and other personnel administrative expenses of ARS 128 million; (ii) a decrease in fees payable to directors of ARS 81 million; partially offset by: (iii) an increase of ARS 28 million in amortization and depreciation and (iv) an increase of ARS 15 million in fees and payments for services. Administrative expenses of Shopping Malls, measured as a percentage of revenue from such segment, increased from 11.1% during the fiscal year ended June 30, 2019, to 14.0% during the fiscal year ended June 30, 2020.

Offices. The general and administrative expenses of our Offices segment increased by 4.4%, from ARS 318 million during the fiscal year ended June 30, 2019, to ARS 332 million during the fiscal year ended June 30, 2020, mainly as a result of: (i) an increase of ARS 11 million in fees and compensation for services; and (ii) an increase of ARS 2 million in taxes, rates and contributions. General and administrative expenses, measured as a percentage of revenue from the same segment, decreased from 9.5% during the fiscal year ended June 30, 2019, to 9.4% during the fiscal year ended June 30, 2020.

Sales and Developments. General and administrative expenses associated with our Sales and Developments segment decreased by 19.5%, from ARS 425 million during the fiscal year ended June 30, 2019, to ARS 342 million during the fiscal year ended June 30, 2020. General and administrative expenses, measured as a percentage of revenue from the same segment, increased from 25.3% during the fiscal year ended June 30, 2019, to 31.0% during the fiscal year ended June 30, 2020.

Hotels. General and administrative expenses associated with our Hotels segment decreased by 25.7%, from ARS 738 million during the fiscal year ended June 30, 2019, to ARS 548 million during the fiscal year ended June 30, 2020, mainly as a result of: (i) an ARS 83 million decrease in fees and compensation for services; (ii) an ARS 75 million decrease in salaries, social security and other personnel administrative expenses; (iii) an ARS 16 million decrease in maintenance, security, cleaning, repairs and related expenses and (iv) an ARS 10 million decrease in taxes, rates and contributions. General and administrative expenses associated with the Hotels segment, measured as a percentage of revenue from this segment, increased from 16.6% during the fiscal year ended June 30, 2019, to 18.1% during the fiscal year ended June 30, 2020.

International. General and administrative expenses associated with our International segment showed no variations and expenses in the amount of ARS 165 were recorded during the fiscal years ended ended June 30, 2019 and 2020.

Corporate. General and administrative expenses associated with our Corporate segment decreased by 40.2%, from ARS 940 million during the fiscal year ended June 30, 2019, to ARS 562 million during the fiscal year ended June 30, 2020, mainly as a result of: (i) an ARS 301 million decrease in fees payable to directors; and (ii) an ARS 57 million decrease in salaries, social security and other personnel administrative expenses.

Others. General and administrative expenses associated with our Others segment increased by 3.5%, from ARS 170 million during the fiscal year ended June 30, 2019, to ARS 176 million during the fiscal year ended June 30, 2020, mainly due to (i) an increase of ARS 11 million in maintenance, repairs and services; partially offset by (ii) a decrease of ARS 8 million in taxes, rates and contributions.

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Selling expenses 2020 vs 2019

Total consolidated selling expenses, according to the income statement, showed an increase of ARS 203 million, from ARS 1,619 million during the fiscal year ended June 30, 2019 to ARS 1,822 million during the fiscal year ended June 30, 2020. In index terms, selling expenses increased by 12.5%. Total consolidated selling expenses, measured as a percentage of revenue from sales, leases and services, increased from 5.8% during the fiscal year ended June 30, 2019, to 8.6% during the fiscal year ended June 30, 2020.

In turn, selling expenses of our joint ventures increased by ARS 18 million, from ARS 9 million during the fiscal year ended June 30, 2019, to ARS 27 million during the fiscal year ended June 30, 2020.

Therefore, according to information by segments, selling expenses increased by ARS 221 million, from ARS 1,628 million during the fiscal year ended June 30, 2019 to ARS 1,849 million during the fiscal year ended June 30, 2020. In index terms, selling expenses increased by 13.6%. Selling expenses, measured as a percentage of revenue, according to information by segments, increased from 7.2% during the fiscal year ended June 30, 2019, to 11.1% during the fiscal year ended June 30, 2020.

Shopping Malls. Selling expenses of the Shopping Malls segment increased by 33.8%, from ARS 796 million during the fiscal year ended June 30, 2019, to ARS 1,065 million during the fiscal year ended June 30, 2020, mainly as a result of: (i) an increase of ARS 327 million in allowance for doubtful accounts, partially offset by; (ii) a decrease in the charge of taxes, rates and contributions of ARS 33 million; (iii) a decrease in the charge for advertising and other selling expenses of ARS 15 million; and (iv) a decrease in salaries, social security costs and other personnel administrative expenses of ARS 5 million. Selling expenses, measured as a percentage of revenue from the Shopping Malls segment, increased from 6.2% during the fiscal year ended June 30, 2019, to 11.9% during the fiscal year ended June 30, 2020.

Offices. Selling expenses associated with our Offices segment decreased by 14.9%, from ARS 148 million during the fiscal year ended June 30, 2019, to ARS 126 million during the fiscal year ended June 30, 2020. Such variation was mainly generated as a result of: (i) an ARS 15 million decrease in publicity, advertising, and other commercial expenses; and (ii) an ARS 12 million decrease in the charge of doubtful accounts. Selling expenses associated with our Offices segment, measured as a percentage of revenue from this segment, decreased from 4.4% during the fiscal year ended June 30, 2019, to 3.6% during the fiscal year ended June 30, 2020.

Sales and Developments. Selling expenses associated with our Sales and Developments segment increased by 66.3%, from ARS 178 million during the fiscal year ended June 30, 2019, to ARS 296 million during the fiscal year ended June 30, 2020. Such variation was mainly generated by: (i) an ARS 120 million increase in taxes, rates and contributions; (ii) an ARS 17 million increase in publicity, advertising and other commercial expenses, offset by: (iii) an ARS 10 million decrease in the charge of doubtful accounts; (iv) an ARS 4 million decrease in salaries, social security and other personnel administrative expenses; and (v) an ARS 4 million decrease in fees and compensation for services. Selling expenses associated with our Sales and Developments segment, measured as a percentage of revenue from this segment, increased from 10.6% during the fiscal year ended June 30, 2019, to 26.8% during the fiscal year ended June 30, 2020.

Hotels. Selling expenses associated with our Hotels segment decreased by 27.2%, from ARS 474 million during the fiscal year ended June 30, 2019, to ARS 345 million during the fiscal year ended June 30, 2020, mainly as a result of: (i) an ARS 67 million decrease in the charge of taxes, rates and contributions; (ii) an ARS 28 million decrease in publicity, advertising and other commercial expenses; (iii) an ARS 16 million decrease in fees and compensation for services; and (iv) an ARS 13 million decrease in salaries, social security and other personnel administrative expenses. Selling expenses associated with our Hotels segment, measured as a percentage of revenue from this segment, increased from 10.7% during the fiscal year ended June 30, 2019, to 11.4% during the fiscal year ended June 30, 2020.

International. Selling expenses associated with the International segment were not recorded in both fiscal years.

Corporate. Selling expenses associated with the Corporate segment were not recorded in both fiscal years.

Others. Selling expenses associated with our Others segment decreased by 46.9%, from ARS 32 million during the fiscal year ended June 30, 2019, to ARS 17 million during the fiscal year ended June 30, 2020. Selling expenses associated with our Others segment, measured as a percentage of revenue from this segment, increased from 11.2% during the fiscal year ended June 30, 2019, to 14.5% during the fiscal year ended June 30, 2020.

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Other operating results, net 2020 vs 2019

Other operating results, net, according to the income statement, recorded a variation of ARS 589 million, from a net loss of ARS 470 million during the fiscal year ended June 30, 2019, to a net profit of ARS 119 million during the fiscal year ended June 30, 2020.

Other operating results, net from our joint ventures decreased by ARS 254 million, from ARS 282 million during the fiscal year ended June 30, 2019, to a net profit of ARS 28 million during the fiscal year ended June 30, 2020.

In turn, other operating results on account of building administration expenses and collective promotion fund decreased by ARS 28 million, from ARS 119 million during the fiscal year ended June 30, 2019 (out of which a profit of ARS 117 million are allocated to the Shopping Malls segment and a profit of ARS 2 million to the Offices segment), to ARS 91 million during the fiscal year ended June 30, 2020 (out of which a profit of ARS 85 million are allocated to the Shopping Malls segment and a profit of ARS 6 million to the Offices segment).

Therefore, according to information by segments, the other operating results line, net, increased by ARS 858 million, from a net loss of ARS 841 million during the fiscal year ended June 30, 2019 to a net profit of ARS 17 million during the fiscal year ended June 30, 2020.

Shopping Malls. Other operating results, net associated with our Shopping Malls segment increased by 189.7%, from a net loss of ARS 29 million during the fiscal year ended June 30, 2019, to a net profit of ARS 26 million during the fiscal year ended June 30, 2020, mainly as a result of: (i) a decrease in donations of ARS 80 million and; (ii) an increase in others of ARS 38 million, mainly because a loss for indemnification payments was recognized in fiscal year 2019, partially offset by; (iii) a decrease of ARS 38 million in interest generated by operating credits. Other operating results, net, from this segment, as a percentage of revenue from this segment, increased from 0.2% negative during the fiscal year ended June 30, 2019, to 0.3% positive during the fiscal year ended June 30, 2020.

Offices. Other operating results, net associated with our Offices segment increased by 17.0%, from a net loss of ARS 47 million during the fiscal year ended June 30, 2019, to a net loss of ARS 39 million during the fiscal year ended June 30, 2020, mainly as a consequence of an ARS 21 million decrease in donations, among other items. Other operating results, net from this segment, as a percentage of the revenue from this segment, decreased from 1.4% negative during the fiscal year ended June 30, 2019, to 1.1% negative during the fiscal year ended June 30, 2020.

Sales and Developments. Other operating results, net associated with our Sales and Developments segment increased by 90.4%, from a net loss of ARS 429 million during the fiscal year ended June 30, 2019, to a net loss of ARS 41 million during the fiscal year ended June 30, 2020, mainly as a result of a decrease in the provision set up for the write-off of the Puerto Retiro plot of land and a decrease in donations, among other items. Other operating results, net from this segment, as a percentage of the revenue of this segment, decreased from 25.5% negative during the fiscal year ended June 30, 2019, to 3.7% negative during the fiscal year ended June 30, 2020.

Hotels Other operating results, net associated with the Hotels segment decreased by 117.4%, from a net profit of ARS 172 million during the fiscal year ended June 30, 2019, to a net loss of ARS 30 million during the fiscal year ended June 30, 2020, mainly due to an insurance recovery associated with a boiler-related loss during fiscal year 2019. Other operating results, net from this segment, as a percentage of the revenue from this segment, decreased from 3.9% positive during the fiscal year ended June 30, 2019, to 1.0% negative during the fiscal year ended June 30, 2020.

International. Other operating results, net associated with the International segment showed a net loss of ARS 36 million during the fiscal year ended June 30, 2019. No charge was recognized during the fiscal year ended June 30, 2020, mainly due to a decrease in donations.

Corporate. Other operating results, net associated with the Corporate segment were not recorded in both fiscal years.

Others. Other operating results, net associated with the Others segment increased by 121.4%, from a net loss of ARS 472 million during the fiscal year ended June 30, 2019, to a net profit of ARS 101 million during the fiscal year ended June 30, 2020, mainly due to a loss from the sale of Tarshop S.A. and the impairment of the goodwill of La Arena during the comparative fiscal year. Other operating results, net from this segment, as a percentage of the revenue from this segment, decreased from 165.0% negative during the fiscal year ended June 30, 2019, to 86.3% positive during the fiscal year ended June 30, 2020.

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Profit / (loss) from operations 2020 vs 2019

Total consolidated profit / (loss) from operations, according to the income statement, increased from a net loss of ARS 46,863 million during the fiscal year ended June 30, 2019 to a net profit of ARS 58,051 million during the fiscal year ended June 30, 2020. In index terms, the profit/(loss) from operations varied by 223.9%. Total consolidated profit / (loss) from operations, measured as a percentage of revenue from sales, leases and services, increased from 167.3% negative during the fiscal year ended June 30, 2019, to 273.0% positive during the fiscal year ended June 30, 2020.

Profit / (loss) from operations from our joint ventures decreased from a profit of ARS 1,535 million during the fiscal year ended June 30, 2019 (out of which a net profit of ARS 168 million is allocated to the Shopping Malls segment; a net profit of ARS 1056 million to the Offices segment and a profit of ARS 311 million to the Sales and Developments segment), to a net loss of ARS 330 million during the fiscal year ended June 30, 2020 (out of which a net profit of ARS 20 million is allocated to the Shopping Malls segment; a net loss of ARS 368 million to the Offices segment and a profit of ARS 18 million to the Sales and Developments segment).

Therefore, according to information by segments, the net profit from operations increased from a net loss of ARS 48,294 million during the fiscal year ended June 30, 2019, to a net profit of ARS 58,486 million during the fiscal year ended June 30, 2020. The profit / (loss) from operations, measured as a percentage of revenue, according to information by segments, increased from a 213.6% loss during the fiscal year ended June 30, 2019, to a 349.6% profit during the fiscal year ended June 30, 2020.

Shopping Malls. Profit / (loss) from operations associated with the Shopping Malls segment increased from a loss of ARS 51,535 million during the fiscal year ended June 30, 2019, to a profit of ARS 2,617 million during the fiscal year ended June 30, 2020.

Offices. Profit from operations associated with our Offices segment increased by 957.1%, from ARS 3,577 million during the fiscal year ended June 30, 2019, to ARS 37,812 million during the fiscal year ended June 30, 2020. Such variation was mainly due to an ARS 34,049 million increase in the gain from fair value adjustments of investment properties. Profit from operations associated with the Offices segment, as a percentage of revenue from such segment, increased from 106.4% during the fiscal year ended June 30, 2019, to 1,067.5% during the fiscal year ended June 30, 2020.

Sales and Developments. Profit from operations associated with our Sales and Developments segment increased by 1764.2%, from ARS 950 million during the fiscal year ended June 30, 2019, to ARS 17,710 million during the fiscal year ended June 30, 2020. Such increase is mainly due to the gain from fair value adjustments of investment properties. Profit from operations associated with the Sales and Developments segment, as a percentage of revenue from this segment, increased from 56.5% during the fiscal year ended June 30, 2019, to 1,604.2% during the fiscal year ended June 30, 2020.

Hotels. Profit from operations associated with the Hotels segment decreased by 76.0%, from ARS 1,012 million during the fiscal year ended June 30, 2019, to ARS 243 million during the fiscal year ended June 30, 2020. Such decrease is mainly due to the deflagging process of Hoteles Argentinos S.A.U. and to the fact that revenue were significantly affected by a decline in the activity since March, attributable to the COVID-19 pandemic. The profit / (loss) from operations associated with the Hotels segment, as a percentage of revenue from such segment, decreased from 22.8% during the fiscal year ended June 30, 2019, to 8.0% during the fiscal year ended June 30, 2020.

International. Loss from operations associated with our International segment varied by 7.8%, from ARS 180 million during the fiscal year ended June 30, 2019, to ARS 166 million during the fiscal year ended June 30, 2020. Such variation is due to a decrease in donations.

Corporate. Loss from operations associated with our Corporate segment decreased by 40.2%, from ARS 940 million during the fiscal year ended June 30, 2019, to ARS 562 million during the fiscal year ended June 30, 2020, mainly affected by general and administrative expenses.

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Others. Profit/(loss) from operations associated with the Others segment increased from a net loss of ARS 1,178 million during the fiscal year ended June 30, 2019, to a net profit of ARS 832 million during the fiscal year ended June 30, 2020. The variation is mainly due to the loss generated by the sale of Tarshop, the impairment of the goodwill of La Arena during the fiscal year ended June 30, 2019, and a decrease in share of profit / (loss) of associates and joint ventures.

Share of profit / (loss) of associates and joint ventures 2020 vs 2019

The share of profit / (loss) of associates and joint ventures, according to the income statement, increased by 202.5%, from a net loss of ARS 10,587 million during the fiscal year ended June 30, 2019 to a net profit of ARS 10,847 million during the fiscal year ended June 30, 2020, mainly due to the positive results from the International segment.

Also, the net share of profit / (loss) of joint ventures, mainly from Nuevo Puerto Santa Fe S.A. (Shopping Malls segment), Quality Invest S.A. (Offices segment) and Cyrsa S.A. and Puerto Retiro S.A. (Sales and Developments segment), showed a 117.2% increase, from a loss of ARS 1,527 million during the fiscal year ended June 30, 2019, to a profit of ARS 263 million during the fiscal year ended June 30, 2020, mainly due to results from the joint venture Puerto Retiro S.A., as a consequence of the impairment of the plot of land based on the progress of litigations concerning it during the fiscal year ended June 30, 2019 and the share in Quality Invest S.A., mainly attributable to the gain / (loss) from fair value adjustments of investment properties.

Shopping Malls. In the information by segments, the share of profit / (loss) of the joint venture Nuevo Puerto Santa Fe S.A. is recorded on a consolidated basis, line by line in this segment.

Offices. In the information by segments, the share of profit / (loss) of the joint venture Quality S.A. is recorded on a consolidated basis, line by line in this segment.

Sales and Developments. The share of profit / (loss) of the joint ventures Cyrsa S.A. and Puerto Retiro S.A is recorded on a consolidated basis, line by line. The share of profit / (loss) of our associate Manibil S.A., which is recorded in this line, increased by ARS 56 million during the fiscal year ended June 30, 2020

Hotels. This segment does not show results from the share of profit / (loss) of associates and joint ventures.

International. The share of profit / (loss) of associates of this segment increased by 300.5%, from a net loss of ARS 5,526 million during the fiscal year ended June 30, 2019, to a net profit of ARS 11,080 million during the fiscal year ended June 30, 2020, mainly generated by a positive result from our investment in New Lipstick LLC of ARS 16,810 million and a negative result from our investment in Condor Hospitality of ARS 210 million.

Other. The share of (loss) of associates from the Others segment increased by 85.7%, from a net loss of ARS 3,478 million during the fiscal year ended June 30, 2019, to a net loss of ARS 496 million during the fiscal year ended June 30, 2020, mainly as a result of a lower loss from our investments in Banco Hipotecario S.A. in the amount of ARS 3,056 million.

Financial results, net

The financial results went from a loss of ARS 4,564 million during the fiscal year ended June 30, 2019 to a loss of ARS 18,235 million during the fiscal year ended June 30, 2020. Such variation is mainly due to the devaluation of the Argentine peso against the dollar.

Income Tax

The Company applies the deferred tax method to calculate the income tax for the reported years, thus recognizing temporary differences as tax assets and liabilities. The income tax charge went from a profit of ARS 6,760 million during the fiscal year ended June 30, 2019, to a loss of ARS 10,065 million during the fiscal year ended June 30, 2020.

Profit for the year

As a result of the factors described above, the profit for the year went from a loss of ARS 57,634 million (that includes a loss of ARS 2,380 for the effect of discontinued operations) during the fiscal year ended June 30, 2019, to a profit of ARS 35,651 million (that includes a loss of ARS 4,947 for the effect of discontinued operations) during the fiscal year ended June 30, 2020.

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B. Liquidity and Capital Resources

Our principal sources of liquidity have historically been:

| • | Cash generated by operations;
| • | Cash generated by issuance of debt securities;
| • | Cash from borrowing and financing arrangements; and
| • | Cash proceeds from the sale of real estate assets.

Our principal cash requirements or uses (other than in connection with our operating activities) have historically been:

| • | capital expenditures for acquisition or construction of investment properties and property, plant and equipment;
| • | interest payments and repayments of debt;
| • | acquisition of equity interests in companies;
| • | payments of dividends; and
| • | acquisition of real estate.

Our liquidity and capital resources include our cash and cash equivalents, proceeds from bank borrowings and long-term debt, capital financing and sales of real estate investments.

As of June 30, 2021 we had a negative working capital of ARS 8,215 million (calculated as current assets less current liabilities as of that date).

As of the same date, we had cash and cash equivalents for ARS 1,931 million, which represents the total of cash and cash equivalents at a consolidated level.

As stated in Note 1 to the Consolidated Financial Statements as of June 30, 2020, on September 25, 2020 the Court decreed the insolvency and liquidation of IDBD and appointed a trustee for its shares along with a custodian over DIC and Clal shares. After this decision, the Board of Directors of IDBD was removed from its functions, therefore, the Group lost control on that date. For comparability purposes and as required by IFRS 5, the results of the Israel Operations Center have been reclassified to discontinued operations for all the years presented.

Our material cash requirements from known contractual and other obligations mainly consist of obligations under our borrowings. As of June 30, 2021, we expected to incur a total of ARS 62,133 million under our borrowings, consisting of ARS 15,409 million due within one year, ARS 46,328 million due within one to three years and ARS 396 million due within four to five years.

The following table shows our cash flow for the fiscal years ended June 30, 2021, 2020 and 2019:

|  | Year ended June 30, |
|  | 2021 |  |  | 2020 |  |  | 2019 |
|  | million of ARS |
Net cash generated from operating activities |  |  | 1,456 |  |  |  | 46,731 |  |  |  | 40,616 |
Net cash generated from investing activities |  |  | 67,880 |  |  |  | 61,049 |  |  |  | 16,807 |
Net cash used in financing activities |  |  | (48,840 | ) |  |  | (114,343 | ) |  |  | (41,686 | )
Net increase / (decrease) in cash and cash equivalents |  |  | 20,496 |  |  |  | (6,563 | ) |  |  | 15,737 |

Cash Flow Information

Operating activities

Fiscal year ended June 30, 2021

Our operating activities for the fiscal year ended June 30, 2021 generated net cash inflows of ARS 1,456 million, of which ARS 3,152 are originated in discontinued operations inflows and ARS 1,696 from continuing operations outflows, mainly due to (i) operating loss of ARS 568 million, (ii) a decrease in trade and other payables of ARS 2,543 million, (iii) a decrease in provisions of ARS 108 million, offset by (iv) a decrease in trade and other receivables of ARS 1,514 million and (vi) an increase in salaries and social security liabilities of ARS 53 million.

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Fiscal year ended June 30, 2020

Our operating activities for the fiscal year ended June 30, 2020 generated net cash inflows of ARS 46,731 million, of which ARS 37,358 are originated in discontinued operations and ARS 9,373 from continuing operations, mainly due to (i) operating income of ARS 10,856 million, (ii) a decrease in trade and other receivables of ARS 2,854 million , partially offset by (iii) a decrease in provisions of ARS 798 million, (iv) a increase in trading properties of ARS 592 million, (v) a decrease in trade and other payables of ARS 458 million and (vi) ARS 455 million related to Income Tax paid.

Fiscal year ended June 30, 2019

Our operating activities for the fiscal year ended June 30, 2019 generated net cash inflows of ARS 40,616 million, of which ARS 32,310 million were originated from discontinued operations and ARS 8,306 million from continuing operations, mainly due to (i) a net operating income of ARS 12,286 million, partially offset by (ii) a decrease in trade and other payables of ARS 1,820 million , (iii) a decrease in trading properties of ARS 1,308 million, (iv) an decrease in salaries and social security liabilities of ARS 195 million, (v) a decrease in provisions of ARS 118 million and (vi) ARS 504 million related to Income Tax paid.

Investment activities

Fiscal year ended June 30, 2021

Our investing activities resulted in net cash inflows of ARS 67,880 million, comprised of ARS 44,119 million discontinued activities inflows and ARS 23,761 million continuing operations inflows for the fiscal year ended June 30, 2021, mainly due to (i) ARS 18,134 million from sales of investment properties and (ii) ARS 16,639 arising from disposal of investments in financial assets, partially offset by (iii) ARS 10,643 million used in the acquisition of investments in financial assets and (iv) ARS 999 million used in the acquisitions and improvements of investment properties.

Fiscal year ended June 30, 2020

Our investing activities resulted in net cash inflows of ARS 61,049 million, comprised of ARS 61,166 million discontinued activities inflows and ARS 117 million continuing operations outflows for the fiscal year ended June 30, 2020, mainly due to (i) ARS 23,146 million used in the acquisition of investments in financial assets , (ii) ARS 5,524 million used in the acquisitions and improvements of investment properties, (iii) ARS 379 million used in the acquisition and improvements of property, plant and equipment, offset by (iv) ARS 30,169 million arising from disposal of investments in financial assets.

Fiscal year ended June 30, 2019

Our investing activities resulted in net cash inflows of ARS 16,807 million, comprised of ARS 18,775 million discontinued activities inflows and ARS 1,968 million continuing operations outflows for the fiscal year ended June 30, 2019, mainly due to (i) ARS 46,186 million used in the acquisition of investments in financial assets and (ii) ARS 6,425 million used in the acquisition and improvements of investment properties, partially offset by (iii) ARS 49,683 million arising from disposal of investments in financial assets and (iv) ARS 878 from interest received from financial assets.

Financing activities

Fiscal year ended June 30, 2021

Our financing activities for the fiscal year ended June 30, 2021 resulted in net cash outflows of ARS 48,840 million, of which ARS 18,163 derive from discontinued operations and ARS 30,677 derive from continuing activities, mainly due to (i) the payment of loans and principal on notes of ARS 39,849 million; (ii) the payment of interest on short-term and long-term debt of ARS 8,223 million, (iii) ARS 5,130 million from the repurchase of non-convertible notes, (iv) ARS 2,587 million from dividends paid to non-controlling interest in subsidiaries and (v) the payment of derivate financial instrument of ARS 520 million, partially offset by (vi) an increase in borrowings and issuance of non-convertible notes for ARS 9,363 million, (vii) ARS 7,058 million from sales of non-convertible notes in portfolio, (viii) ARS 5,128 million from collections of short term loans and (ix) ARS 4,132 million from issuance of shares.

Fiscal year ended June 30, 2020

Our financing activities for the fiscal year ended June 30, 2020 resulted in net cash outflows of ARS 114,343 million, of which ARS 105,735 derive from discontinued operations and ARS 8,608 derive from continuing activities, mainly due to (i) the payment of loans and principal on notes of ARS 40,601 million; (ii) the payment of interest on short-term and long-term debt of ARS 8,108 million, and (iii) ARS 3,051 million from the repurchase of non-convertible notes, partially offset by (iv) an increase in borrowings and issuance of non-convertible notes for ARS 33,173 million.

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Fiscal year ended June 30, 2019

Our financing activities for the fiscal year ended June 30, 2019 resulted in net cash outflows of ARS 41,686 million, comprised of ARS 32,702 million discontinued activities outflows and ARS 8,984 million continuing operations outflows for the fiscal year ended June 30, 2019. Such net outflows are mainly related to (i) the payment of interest on short-term and long-term debt of ARS 7,986 million , (ii) the payment of loans and principal from notes of ARS 6,015 million; (iii) ARS 2,307 million from the repurchase of non-convertible notes, (iv) the payment of interest on short-term and long-term debt of ARS 1,522 million, in part offset by (v) an increase in borrowings and issuance of non-convertible notes for ARS 6,015 million.

Capital expenditures

Fiscal year ended June 30, 2021

During the fiscal year ended June 30, 2021, we invested ARS 2,692 million, as follows: (a) acquisitions and improvements of property, plant and equipment of ARS 1,656 million, primarily i) ARS 158 million in buildings and facilities, ii) ARS 581 million in communication networks, iii) ARS 818 million in machinery and equipment and others, iv) improvements in our hotels Sheraton Libertador, Llao Llao and Intercontinental (ARS 8 million, ARS 20 million and ARS 16 million, respectively) and v) ARS 55 million in agricultural establishments; (b) improvements in our rental properties for ARS 1,036 million, out of which ARS 981, the company issued in the local market a total amount of USD million derive from our Operations Center in Argentina and ARS 55 million derive from the Operations Center in Israel.

Fiscal year ended June 30, 2020

During the fiscal year ended June 30, 2020, we invested ARS 16,718 million, as follows: (a) acquisitions and improvements of property, plant and equipment of ARS 8,518 million, primarily i) ARS 498 million in buildings and facilities, ii) ARS 5,132 million in communication networks, iii) ARS 2,655 million in machinery and equipment and others iv) improvements in our hotels Sheraton Libertador, Llao Llao and Intercontinental (ARS 21 million, ARS 92 million and ARS 66 million, respectively) and v) ARS 54 million in agricultural establishments; (b) improvements in our rental properties of ARS 4,056 million, out of which ARS 2,863 million derive from our Operations Center in Argentina and ARS 1,193 million derive from the Operations Center in Israel; (c) the development of properties for ARS 4,144 million.

Fiscal year ended June 30, 2019

During the fiscal year ended June 30, 2019, we invested ARS 28,170 million, as follows: (a) acquisitions and improvements of property, plant and equipment of ARS 10,730 million, primarily i) ARS 165 million in buildings and facilities, ii) ARS 6,908 million in communication networks, iii) ARS 3,560 million in machinery and equipment and others, iv) improvements in our hotels Sheraton Libertador, Llao Llao and Intercontinental (ARS 44 million, ARS 21 million and ARS 32 million, respectively); (b) improvements in our rental properties of ARS 2,935 million, primarily in our Operations Center in Israel; (c) the development of properties for ARS 13,616 million, mainly in our Operations Center in Israel; and (d) ARS 889 million related to the acquisition of land reserves.

Indebtedness

The following table sets forth the scheduled maturities of our outstanding debt as of June 30, 2021:

|  | Total |
|  | (in million of ARS) |
Less than 1 year |  |  | 15,409 |
More than 1 and up to 2 years |  |  | 40,633 |
More than 2 and up to 3 years |  |  | 5,695 |
More than 3 and up to 4 years |  |  | 211 |
More than 4 and up to 5 years |  |  | 65 |
More than 5 years |  |  | 120 |
Total |  |  | 62,133 |

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Operation Center |  | Currency |  | Annual Average Interest Rate |  |  | Nominal value |  |  | Book value (in million of ARS) |
IRSA Commercial Properties’ 2023 Notes |  | USD |  |  | 8.75 | % |  |  | 360 |  |  |  | 34,717 |
IRSA’s 2023 Notes - Series I (1) |  | USD |  |  | 10.00 | % |  |  | 3 |  |  |  | 298 |
IRSA’s 2022 Notes - Series V |  | USD |  |  | 9.00 | % |  |  | 9 |  |  |  | 898 |
IRSA’s 2021 Notes - Series VI (2) |  | ARS |  | Badlar + 400 bps |  |  |  | 335 |  |  |  | 252 |
IRSA’s 2022 Notes - Series VII |  | USD |  |  | 4.00 | % |  |  | 33 |  |  |  | 3,247 |
IRSA’s 2023 Notes - Series VIII |  | USD |  |  | 10.00 | % |  |  | 27 |  |  |  | 2,671 |
IRSA’s 2023 Notes - Series IX |  | USD |  |  | 10.00 | % |  |  | 45 |  |  |  | 4,278 |
IRSA’s 2023 Notes - Series X |  | ARS |  | Badlar + 500 bps |  |  |  | 701 |  |  |  | 765 |
IRSA’s 2023 Notes - Series XI |  | USD |  |  | 5.00 | % |  |  | 12 |  |  |  | 1,213 |
IRSA’s 2023 Notes - Series XII (3) |  | UVA |  |  | 4.00 | % |  |  | 54 |  |  |  | 3,545 |
Related Party |  | ARS |  | Badlar |  |  |  | 5 |  |  |  | 11 |
Related Party |  | USD |  | From 3.8% to 8.5% |  |  |  | 1 |  |  |  | 293 |
Related Party |  | USD |  |  | 5.00 | % |  |  | 1 |  |  |  | 51 |
Related Party |  | USD |  |  | 4.99 | % |  |  | 1 |  |  |  | 50 |
Related Party |  | USD |  | Libor 1 m + 2.0% |  |  |  | 3 |  |  |  | 270 |
Bank loans |  | USD |  |  | 5.95 | % |  |  | 13 |  |  |  | 843 |
Bank loans |  | USD |  | Libor + 1.90% |  |  |  | 19 |  |  |  | 2,145 |
Bank loans |  | ARS |  | 33.7% to 35.5% |  |  |  | 126 |  |  |  | 127 |
AABE Debt |  | ARS |  | Libor |  |  |  | 120 |  |  |  | 258 |
Seller financing |  | USD |  |  | N/A |  |  |  | 2 |  |  |  | 224 |
Others |  | USD |  | Libor 1 m + 2.0% / 3.5% |  |  |  | 7 |  |  |  | 693 |
Bank overdrafts |  | ARS |  | Mixed rate |  |  |  | - |  |  |  | 5,284 |
Total (4) |  |  |  |  |  |  |  |  |  |  |  |  | 62,133 |

| (1) | On October 22, 2020, we announced Notes to be issued by exchange for the Existing Notes, Series I Notes, or through the Cash Subscription.
| (2) | On July 21, 2021, it was fully canceled.
| (3) | Series XII denominated in UVA y payable in ARS. Nominal value UVA 54 million.
| (4) | The credit line between IRSA CP and IRSA for an amount of USD 69.9 million is not shown due because it is eliminated in consolidation.

Series II Notes (Issued by IRSA CP)

On March 23, 2016, IRSA CP issued Notes in an aggregate principal amount of USD360 million under its Global Notes Program. Series II Notes accrue interest semi-annually, at an annual fixed rate of 8.75% and mature on March 23, 2023.

IRSA CP’s Notes due 2023 are subject to certain covenants, events of default and limitations, such as the limitation on incurrence of additional indebtedness, limitation on restricted payments, limitation on transactions with affiliates, and limitation on merger, consolidation and sale of all or substantially all assets.

To incur additional indebtedness, IRSA CP is required to meet a minimum 2.00 to 1.00 Consolidated Interest Coverage Ratio. The Consolidated Interest Coverage Ratio is defined as Consolidated EBITDA divided by consolidated net interest expense. Consolidated EBITDA is defined as operating income plus depreciation and amortization and other consolidated non-cash charges.

The Series II Notes contain financial covenants limiting IRSA CP’s ability to declare or pay dividends in cash or in kind, unless the following conditions are met at the time of payment:

a) no Event of Default shall have occurred and be continuing;

b) IRSA CP may incur at least USD1.00 worth of additional debt pursuant to the “Restriction on Additional Indebtedness”;

c) and the aggregate amount of such dividend exceeds the sum of:

i. 100% of cumulative EBITDA for the period (treated as one accounting period) from July 1, 2015 through the last day of the last fiscal quarter ended prior to the date of such Restricted Payment minus an amount equal to 150% of consolidated interest expense for such period; and

ii. any reductions of Indebtedness of IRSA on a consolidated basis after the Issue Date any reductions of Indebtedness of after the Issue Date exchanged for to Capital Stock of the IRSA or its Subsidiaries.

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For more information see. “Item 10. Additional Information-D. Exchange Controls”, if Communication “A” 7,106, as amended by Communication “A” 7,272, is extended after December 31, 2021, the maturity of this Note would be affected by such measure.

Series I and II Notes (issued by IRSA)

On May 15, 2019, IRSA issued the Note Series I under Argentine law for an amount of USD 96.3 million due on November 15, 2020, at a fixed rate of 10%. The proceeds were mainly used to repay preexisting debt.

On August 6, 2019, IRSA reopened the Note Series I under Argentine law for an amount of USD 85.2 million, at a price of 103.77%, which resulted in an internal annual rate of return of 8.75% nominal. Also, on the same date, the Notes Series II denominated in Chilean pesos, under writable and payable in dollars, for an amount of CLP 31,502.6 million (equivalent to USD 45 million) at a fixed rate of 10.5% per within 12 months.

On August 6, 2020, Class II denominated in Chilean pesos was fully canceled.

On September 15, 2020, Communication “A” 7,106, amended by Communication “A” 7,272, established that companies must refinance maturities of financial debt capital in the period from October 15, 2020 to December 31, 2021. In this sense, the Central Bank will give access to companies for up to 40% of maturities and companies must refinance the rest within at least two years. For more information see. “Item 10. Additional Information-D. Exchange Controls”, if Communication “A” 7,106, as amended by Communication “A” 7,272, is extended after Decemeber 31, 2021, the capital outstanding maturity of this Note would be affected by such measure.

As a consequence of the new restrictions on access to the Foreign Exchange Market, on October 22, 2020, IRSA launched an exchange offer on its Series I Notes due on November 15, 2020.

In relation to the Exchange Offer ended on November 10, 2020, on November 12, 2020, the IRSA will proceed to a partial cancelation for a Nominal Value of USD 178,458,188 of Series I Notes, after the cancellation the Nominal Value under circulation will be USD 3,060,519.

For more information see: “Series VIII and IX (issued by IRSA)”

Series III, IV and V (issued by IRSA)

On May 21, 2020, the company issued in the local market a total amount of USD 65.8 million through the following Notes:

| • | Series III: denominated and payable in pesos for ARS 354 million (equivalent at the time of issuance to USD 5.2 million) at a variable rate (private BADLAR + 6.0%) with quarterly payments. The principal will be paid in two installments: the first for an amount equivalent to 30% of the nominal value payable 6 (six) months from the Issue and Settlement Date, and the second for an amount equivalent to 70% of the nominal value payable on the due date. Price of issuance was 100.0% of the nominal value. Which was fully canceled on February 22, 2021.
| • | Series IV: denominated in USD and payable in ARS at the applicable exchange rate for USD 51.4 million at a fixed rate of 7.0%, with quarterly payments and principal expiring on May 21, 2021. Price of issuance was 102.0% of the nominal value (IRR 5.03%). Which was fully canceled on May 21, 2021.
| • | Series V: denominated in USD and payable in ARS at the applicable exchange rate for USD 9.2 million at a fixed rate of 9.0%, with quarterly payments and principal expiring on May 21, 2022. Price of issuance was 103.0% of the nominal value (IRR 7.56%).

Series VI and VII (issued by IRSA)

On July 21, 2020, the company issued in the local market a total amount of USD 38.4 million through the following Notes:

| · | Series VI: denominated and payable in pesos for ARS 335.2 million (equivalent at the time of issuance to USD 4.7 million) at a variable rate (private BADLAR + 4.0%) with quarterly payments. The principal will be paid in two installments: the first for an amount equivalent to 30% of the nominal value payable 9 (nine) months from the Issue and Settlement Date, and the second for an amount equivalent to 70% of the nominal value payable on the due date, July 21, 2021. Price of issuance was 100.0% of the nominal value. Which was fully canceled on July 21, 2021.
| · | Series VII: denominated in dollars and payable in pesos at the applicable exchange rate for USD 33.7 million at a fixed rate of 4.0%, with quarterly payments and principal expiring on January 21, 2022. Price of issuance was 100.0% of the nominal value.

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The funds have been used to refinance short-term liabilities.

Series VIII and IX (issued by IRSA)

On November 12, 2020, the company carried out an exchange operation of its Series I Notes, for a nominal value of USD 181.5 million.

Nominal Value of Existing Notes presented and accepted for the Exchange (for both Series): approximately USD 178.5 which represents 98.31% acceptance, through the participation of 6,571 orders.

| · | Series VIII: Face Value of Existing Notes presented and accepted for the Exchange: approximately USD 104.3 million.
|  | · | Nominal Value to be Issued: approximately USD 31.7 million.
|  | · | Issuance Price: 100% nominal value.
|  | · | Maturity Date: It will be November 12, 2023.
|  | · | Consideration of the Exchange Offer: eligible holders whose existing notes have been accepted for the Exchange by the Company, will receive for every USD 1 submitted to the Exchange, the accrued interest of the existing notes until the settlement and issue date and the following:

| · | A sum of money of approximately USD 72,6 million for repayment of capital of such existing notes presented to the Exchange, in cash, in United States Dollars, which will be equivalent to USD 0.69622593 for each USD 1 of existing notes presented to the Exchange; and
| · | The remaining amount until completing 1 USD for each 1 USD of existing notes presented to the Exchange, in notes Series VIII.

|  | · | Annual Nominal Fixed Interest Rate: 10.00%.
|  | · | Amortization: The capital of the Series VIII Notes will be amortized in 3 annual installments (33% of the capital on November 12, 2021, 33% of the capital on November 12, 2022, 34% of the capital on the maturity date of Series VIII).
|  | · | Interest Payment Dates: Interest will be paid quarterly for the expired period as of the issue and settlement date.
|  | · | Payment Address: Payment will be made to an account at Comisión Nacional de Valores (CNV) in the Autonomous City of Buenos Aires
| · | Series IX: Face Value of Existing Notes presented and accepted for the Exchange: approximately USD 74.2 million.
|  | · | Nominal Value to be Issued (together with the Face Value to be issued as a result of the cash subscription): approximately USD 80.7 million.
|  | · | Issuance Price: 100% nominal value.
|  | · | Maturity Date: It will be March 1, 2023.
|  | · | Consideration of the Exchange Offer: the eligible holders whose existing notes have been accepted for the Exchange by the Company, will receive Series IX Notes for 100% of the capital amount presented for exchange and accepted by the Company and the accrued interest of the existing notes until the settlement and issue date.
|  | · | Early Bird: will consist of the payment of USD 0.02 for each USD 1 of existing notes delivered and accepted in the Exchange on or before the deadline date to Access the Early Bird. Said consideration will be paid in Pesos on the issue and settlement date according to the exchange rate published by Communication “A” 3,500 of the Central Bank of Argentina on the business day prior to the expiration date of the Exchange, which is ARS 79.3433 for each USD 1 of Existing Notes delivered and accepted in the Exchange.
|  | · | Annual Nominal Fixed Interest Rate: 10.00%.

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|  | · | Amortization: The capital of the Series IX Notes will be amortized in one installment on the maturity date.
|  | · | Interest Payment Dates: Interest will be paid quarterly for the expired period from the issuance and settlement date.
|  | · | Payment Address: Payment will be made to an account at Comisión Nacional de Valores (CNV) in New York, United States.
| · | Modifications to the Terms of the Existing Notes: Considering that consent has been obtained for an amount greater than 90% of the existing notes capital, the Company has modified and replaced the following essential and non-essential terms and conditions of the existing notes.
|  | · | By virtue of the implementation of the Proposed Non-Essential Modifications, the entire section of “Certain Commitments” and “Events of Default” is eliminated from the terms and conditions set forth in the prospectus supplements dated May 2, 2019 and dated July 25, 2019 corresponding to the existing notes.
|  | · | Additionally, pursuant to the implementation of the Proposed Essential Modifications, the following terms and conditions of the Existing Notes are modified and replaced:

|  |  | · | Expiration Date: It will be March 1, 2023.
|  |  | · | Interest Payment Dates: will be the same dates reported for Class IX in the Notice of Results.
|  | · | It is clarified that the terms and conditions of the Series I Notes not modified by the Proposed Essential Modifications and the Proposed Non-Essential Modifications will maintain their full validity.

Series X, XI and XII (issued by IRSA)

On March 31, 2021, the company issued in the local market a total amount of USD 65.5 million through the following Notes:

| · | Series X: denominated and payable in pesos for ARS 701.6 million (equivalent at the time of issuance to USD 7.6 million) at a variable rate (private BADLAR + 5.0%) with quarterly payments. The principal will be paid on the due date, March 31, 2022. Price of issuance was 100.0% of the nominal value.
| · | Series XI: denominated in USD and payable in ARS at the applicable exchange rate for USD 15.8 million at a fixed rate of 5.0%, with semiannual payments plus, if applicable, the Premium Factor in the first year (as defined in the corresponding Prospectus Supplement) and principal expiring on March 31, 2024. Price of issuance was 98.39% of the nominal value (IRR 5.6%).
| · | Series XII: denominated in UVA and payable in ARS at the applicable UVA value for UVA 53.8 million (equivalent at the time of issuance to ARS 3,868.2 million and USD 42.1 million) at a fixed rate of 4.0%, with semiannual payments and principal expiring on March 31, 2024. Price of issuance was 100.0% of the nominal value.

The funds have been used to refinance short-term liabilities and working capital.

Series XIII (issued by IRSA)

As s subsequent event, on August 26, 2021, the company issued in the local market a total amount of USD 58.1 million through the following Notes:

| · | Series XIII: denominated in U.S. Dollars and payable in pesos at the applicable exchange rate for USD 58.1 million at a fixed rate of 3.9%, with semi-annual payments. The principal payment will be in three installments, counted from the date of issuance: the first for 25% of the nominal value on August 26, 2023; the second for 25% on February 26, 2024, and the third for 50% of the nominal value on August 26, 2024. The price of issuance was 100.0% of the nominal value.

The funds will be used to refinance short-term liabilities.

Communication “A” 7,106 amended by Communication “A” 7,272

On September 15, 2020, Communication “A” 7,106, amended by Communication “A” 7,272, established that companies must refinance maturities of financial debt capital in the period from October 15, 2020 to December 31, 2021. In this sense, the Central Bank will give access to companies for up to 40% of maturities and companies must refinance the rest within at least two years. Fore more information see. “Item 10. Additional Information-D. Exchange Controls.”

Off-Balance Sheet Arrangements

As of June 30, 2021, we did not have any off-balance sheet transactions, arrangements or obligations with unconsolidated entities or others that are reasonably likely to have a material effect on our financial condition, results of operations or liquidity.

Tabular Disclosure of Contractual Obligations

Our material cash requirements from known contractual and other obligations mainly consist of obligations under our borrowings. As of June 30, 2021, we expected to incur a total of ARS 62,133 million under our borrowings, being our most significant contractual obligations our Series VII, VIII, IX and XII Notes whose principal amounts total USD 33.7 million, USD 31.7 million, USD 80.7 million and UVA 53.8 million (equivalent to ARS 3,545 million at June 30, 2021), respectively and mature in January 2022, November 2023, March 2023 and March 2024, respectively, and IRSA CP Series II Notes for a total amount of USD 360 million with maturity in 2023. Please for more information see “Indebtedness” section.

The following table sets forth our contractual obligations as of June 30, 2021. When the applicable interest rate is variable, the amount disclosed has been determined by reference to the existing conditions at the reporting date.

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Payments due by period

As of June 30, 2021
|  | Less than 1 year |  |  | Between 1 and 2 years |  |  | Between 2 and 3 years |  |  | Between 3 and 4 years |  |  | More than 4 years |  |  | Total (1) |
|  | (in millon of ARS) |
Trade and other payables |  |  | 2,988 |  |  |  | 104 |  |  |  | 1 |  |  |  | - |  |  |  | - |  |  |  | 3,093 |
Borrowings |  |  | 15,409 |  |  |  | 40,633 |  |  |  | 5,695 |  |  |  | 211 |  |  |  | 185 |  |  |  | 62,133 |
Lease obligations |  |  | 93 |  |  |  | 87 |  |  |  | 89 |  |  |  | 90 |  |  |  | 1,767 |  |  |  | 2,126 |
Derivative Financial Instruments |  |  | 48 |  |  |  | 9 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 57 |
Total |  |  | 18,538 |  |  |  | 40,833 |  |  |  | 5,785 |  |  |  | 301 |  |  |  | 1,952 |  |  |  | 67,409 |

(1) Includes accrued and prospective interest, if applicable.

Where the interest payable is not fixed, the amount disclosed has been determined by reference to the existing conditions at the reporting date.

C. Research and Development, Patents and Licenses, Etc.

We have several trademarks registered with the Instituto Nacional de la Propiedad Industrial, the Argentine institute for industrial property. We do not own any patents nor benefit from licenses from third parties.

D. Trend Information

International Macroeconomic Outlook

As reported in the IMF’s “World Economic Outlook,” world GDP is expected to grow 6% in 2021 and 4.9% in 2022. As with the July 2021 WEO projections, there is a higher-than-usual degree of uncertainty around this forecast. The baseline projection rests on key assumptions about vaccine access, which has emerged as the principal fault line. The global recovery splits into two blocks: those countries that can look forward to further normalization of activity later this year (almost all advanced economies) and those that will still face resurgent infections and rising COVID death tolls. The recovery, however, will not be assured even in countries where infections are currently very low so long as the virus circulates elsewhere. Moreover, the forecast assumes that financial conditions-which have eased following the release of the July 2021 WEO - will remain broadly at current levels. Nevertheless, the forecast assumed that fiscal policy in the United States will be increased in line with the overall cumulative size of the current administrations proposed. Commodity prices are expected to increase at a significantly faster pace than assumed in the April 2021 WEO. Alternative outcomes to those in the baseline are clearly possible, and not just because of how the pandemic is evolving.
Despite near-term supply disruptions, global trade volumes are projected to expand 9.7% in 2021, moderating to 7.0% in 2022. The merchandise trade recovery is set to broaden after being initially concentrated in pandemic-related purchases, consumer durables, and medical equipment. Services trade is expected to recover more slowly, consistent with subdued cross-border travel until virus transmission declines to low levels everywhere.

In most countries inflation should subside to its pre-pandemic ranges in 2022 once the transitory disturbances work their way through prices. This judgment rests on three pillars: even with diminished participation rates, labor market slack remains substantial (albeit with reported shortages and hiring difficulties in sectors such as hospitality and travel); inflation expectations are well anchored; and structural factors that have lowered the sensitivity of prices to changes in slack are still expected to operate as before (some have possibly intensified-for example, automation). However, inflation is expected to remain elevated into 2022 in some emerging markets and developing economies, related in part to continued food price pressures and lagged passthrough from higher oil prices for importers.

On the upside, better global cooperation on vaccines could help prevent renewed waves of infection and the emergence of new variants, end the health crisis sooner than assumed, and allow for faster normalization of activity, particularly among emerging markets and developing economies. Moreover, a sooner-than-anticipated end to the health crisis could lead to a faster than-expected release of excess savings by households, higher confidence, and more front-loaded investment spending by firms.

On the downside, growth would be weaker than projected if logistical hurdles in procuring and distributing vaccines in emerging markets and developing economies lead to an even slower pace of vaccination than assumed. Such delays would allow new variants to spread, with possibly higher risks of breakthrough infections among vaccinated populations. Moreover, households’ excess savings may be released more gradually if they remain worried about employment prospects and income security, weighing on aggregate spending.

Strong multilateral cooperation remains essential on multiple fronts. Liquidity assistance is urgently needed for countries confronting health crises and external funding shortfalls, including through debt relief and financing through the global financial safety net. The highest priority is to ensure fast, worldwide access to vaccines and substantially hasten the timeline of rollout relative to the assumed baseline pace. The global community needs to vastly step up efforts to vaccinate adequate numbers of people and ensure global herd immunity.

Furthermore, building on the record drop in greenhouse gas emissions during the pandemic, policymakers should both implement their climate change mitigation commitments and slow the rise in global temperatures to avoid catastrophic health and economic outcomes.

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Argentine macroeconomic context

At the end of 2019, the economy faced a severe balance of payments crisis and public debt. Faced with this scenario, the National Government adopted a set of measures designed to face the most immediate manifestations of the crisis and to stabilize the macroeconomy. Regarding monetary policy, the Central Bank of Argentina defined a series of guidelines, highlighting the referring to interest rates and exchange rate management. Foreign exchange regulations and the moderation in prices linked to the limited volatility of the exchange rate allowed the LELIQ to remain at 38% nominal annually. The progress made the financial system better prepared to face the emergency caused by COVID-19.

Shopping malls sales reached a total ARS 15,805.8 million in June 2021, which represents a 59.5% increase as compared to fiscal 2020. Accumulated sales for the first six months ARS 84,937.6, represent a 112.0% increase and 96.2% decrease in current terms as compared to the same period of 2020 and 2019 respectively.

The INDEC reported that, for the eight months ended July 31, 2021, industrial activity in Argentina increased by 21.0% compared to the same period in 2020. The textile industry accumulated a 51.5% growth during the first eight months of 2021 as compared to the same period last year. Moreover, the monthly estimation of economic activity (“EMAE”) as of June 30, 2021, increased by 10.8% compared to the same month in 2020.

Regarding the balance of payments, in the second quarter of 2021 the current account superavit reached USD 2,763 million, with USD 4,485 million allocated to the goods and services trade balance, and USD 2,200 million to the net primary deficit, and a surplus of USD 479 million to net secondary income.

During the second quarter of 2021, the financial account showed net outflow of USD 2,554 million, explained by the net acquisition of financial assets for USD 3,444 million, and net issuance of liabilities of USD 891 million. The sectors that have explained these outflows have been Central Bank for USD 2,403 million and Government for USD 789 million. Partially offset by the net income of the Deposit-taking companies and Other sectors for USD 364 million and USD 274 million respectively. The international reserves increased by USD 2,403 million during the second quarter of 2021.

In local financial markets, the Private Badlar rate in Pesos ranged from 29.75% to 34.13% in the period from July 2020 to June 2021, averaging 32.56% in June 2021 compared to 40.31% in June 2020. As of June 30, 2021, the seller exchange rate quoted by Banco de la Nación Argentina was ARS 95.7200 pesos per USD1.00. As of June 30, 2021, Argentina’s country risk reduced by 899 basis points in year-on-year terms. The debt premium paid by Argentina was 1,596 basis points in June 2021, compared to 256 basis points paid by Brazil and 348 basis points paid by Mexico.

As of October 13, 2021, the Private Badlar rate in Pesos peaked at 34.125%. As of October 14, 2021, the seller exchange rate quoted by Banco de la Nación Argentina was of ARS 99.1600 pesos per USD 1.00. As of October 12, 2021, Argentina’s country risk increased by 274 basis points in year-on-year terms. The debt premium paid by Argentina was at 1,617 basis points as of October 12, 2021, compared to 307 basis points paid by Brazil and 359 basis points paid by Mexico as of that same date.

Likewise, in the national and international framework described above, the Company periodically analyzes alternatives to appreciate its shares value. In that sense, the Board of Directors of the Company will continue focusing on the evaluation of financial, economic and / or corporate tools that allow the Company to improve its position in the market in which it operates and have the necessary liquidity to meet its obligations. Within the framework of this analysis, the indicated tools may be linked to corporate reorganization processes (merger, spin-off or a combination of both), disposal of assets in public and / or private form that may include real estate as well as negotiable securities owned by the Company, incorporation of shareholders through capital increases through the public offering of shares to attract new capital, repurchase of shares and instruments similar to those described that are useful to the proposed objectives.

Evolution of Shopping Malls in Argentina

In August 2021, the Consumer Confidence Index (CCI) showed a 5.0% increase compared to July 2021, and a 3.8% decrease compared to August 2020. Shopping mall sales increased 448,8% and 59.5% in the fiscal 2021 compared to fiscal 2020 and 2019 respectively.

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Evolution of Office Properties in Argentina

The corporate activity carried out remotely or virtual work that characterized this stage of confinement by COVID19 brought with it a combination of lower demand, increased vacancies, and a slight decrease in the rental prices of category A + and A office buildings in Buenos Aires.

According to the real estate broker L.J. Ramos, the market has managed to close a positive net absorption of 1,100 sqm, after a year in negative values, showing for the first time since the beginning of the pandemic, a cut in the negative trend in market indicators. The average vacancy rate of the Buenos Aires Class A market was 15.7%, 6 pp. above the observed in 2020 and the rental values decreased slightly, averaging USD 24.5/sqm.

Evolution of the Hotel industry in Argentina

According to the Hotel Vacancy Survey (EOH) prepared by INDEC, in June 2021, overnight stays at hotel and parahotel establishments were estimated at 0.65 million, 780.7% more than the same month the previous year. Overnight stays by resident and nonresident travelers increased by 846.8% and 131.5%, respectively. Total travelers who stayed at hotels during June were 0.29 million, a 1,100.4% increase compared to the same month the previous year. The number of resident and nonresident travelers increased by 1,133.7% and 436,4%, respectively. The Room Occupancy Rate in June was 15.7%, showing a sharp increase compared to the same month the previous year. Moreover, the Bed Occupancy Rate for the same period was 10.8%, which represents a sharp increase compared to June 2020.

E. Critical Accounting Estimates

Critical Accounting Policies and Estimates

Not all of these significant accounting policies require management to make subjective or complex judgments or estimates. The following is intended to provide an understanding of the policies that management considers critical because of the level of complexity, judgment or estimations involved in their application and their impact on the Consolidated Financial Statements. These judgments involve assumptions or estimates in respect of future events. Actual results may differ from these estimates.

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Estimation | Main assumptions | Potential implications | Main references
Control, joint control or significant influence | Judgment relative to the determination that the Group holds an interest in the shares of investees (considering the existence and influence of significant potential voting rights), its right to designate members in the executive management of such companies (usually the Board of Directors) based on the investees’ bylaws; the composition and the rights of other shareholders of such investees and their capacity to establish operating and financial policies for investees or to take part in the establishment thereof. | Accounting treatment of investments as subsidiaries (consolidation) or associates (equity method) | Note 2.3
Recoverable amounts of cash-generating units (even those including goodwill), associates and assets. | The discount rate and the expected growth rate before taxes in connection with cash-generating units. The discount rate and the expected growth rate after taxes in connection with associates. Cash flows are determined based on past experiences with the asset or with similar assets and in accordance with the Group’s best factual assumption relative to the economic conditions expected to prevail. Business continuity of cash-generating units. Appraisals made by external appraisers and valuators with relation to the assets’ fair value, net of realization costs (including real estate assets). | Should any of the assumptions made be inaccurate, this could lead to differences in the recoverable values of cash-generating units. | Note 8 - Investments in associates and joint ventures Note 10 - Property, plant and equipment Note 12 - Intangible assets
Fair value valuation of investment properties | Fair value valuation made by external appraisers and valuators. See Note 10. | Incorrect valuation of investment property values | Note 9 - Investment properties
Income tax | The Group estimates the income tax amount payable for transactions where the Treasury’s Claim cannot be clearly determined. Additionally, the Group evaluates the recoverability of assets due to deferred taxes considering whether some or all of the assets will not be recoverable. | Upon the improper determination of the provision for income tax, the Group will be bound to pay additional taxes, including fines and compensatory and punitive interest. | Note 21 - Taxes
Allowance for doubtful accounts | A periodic review is conducted of receivables risks in the Group’s clients’ portfolios. Bad debts based on he expiration of account receivables and account receivables’ specific conditions. | Improper recognition of charges / reimbursements of the allowance for bad debt. | Note 15 - Trade and other receivables
Level 2 and 3 financial instruments | Main assumptions used by the Group are: · Discounted projected income by interest rate · Values determined in accordance with the shares in equity funds on the basis of its Financial Statements, based on fair value or investment assessments. · Comparable market multiple (EV/GMV ratio). · Underlying asset price (Market price); share price volatility (historical) and market interest-rate (Libor rate curve). | Incorrect recognition of a charge to income / (loss). | Note 14 - Financial instruments by category
Probability estimate of contingent liabilities. | Whether more economic resources may be spent in relation to litigation against the Group; such estimate is based on legal advisors’ opinions. | Charge / reversal of provision in relation to a claim. | Note 19 - Provisions
Qualitative considerations for determining whether or not the replacement of the debt instrument involves significantly different terms | The entire set of characteristics of the exchanged debt instruments, and the economic parameters represented therein: Average lifetime of the exchanged liabilities; Extent of effects of the debt terms (linkage to index; foreign currency; variable interest) on the cash flows from the instruments. | Classification of a debt instrument in a manner whereby it will not reflect the change in the debt terms, which will affect the method of accounting recording. | Note 14 - Financial instruments by category

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ITEM 6. Directors, Senior Management and Employees

A. Directors and Senior Management

Board of Directors

We are managed by a Board of Directors. Our bylaws provide that our Board of Directors will consist of a minimum of eight and a maximum of sixteen regular directors and the same or less number of alternate directors. Our directors are elected for three-fiscal year terms by a majority vote of our shareholders at a general ordinary shareholders’ meeting and may be reelected indefinitely.

Currently our Board of Directors is composed of twelve regular directors and six alternate directors. Alternate directors will be summoned to exercise their functions in case of absence, vacancy or death of a regular director or until a new director is appointed.

The table below shows information about our regular directors and alternate directors as of June 30, 2021:

Name |  | Date of Birth |  | Position in IRSA |  | Date appointed |  | Term expiration |  | Current position held since |
Eduardo S. Elsztain |  | 01/26/1960 |  | Chairman |  | 2018 |  | 2021 |  | 1991 |
Saúl Zang |  | 12/30/1945 |  | First Vice-Chairman |  | 2018 |  | 2021 |  | 1994 |
Alejandro G. Elsztain |  | 03/31/1966 |  | Second Vice-Chairman |  | 2019 |  | 2022 |  | 2001 |
Fernando A. Elsztain |  | 01/04/1961 |  | Regular Director |  | 2020 |  | 2023 |  | 1999 |
Cedric D. Bridger |  | 11/09/1935 |  | Regular Director |  | 2018 |  | 2021 |  | 2003 |
Marcos Fischman |  | 04/09/1960 |  | Regular Director |  | 2018 |  | 2021 |  | 2003 |
Mauricio E. Wior |  | 10/23/1956 |  | Regular Director |  | 2018 |  | 2021 |  | 2006 |
Daniel Ricardo Elsztain |  | 12/22/1972 |  | Regular Director |  | 2020 |  | 2023 |  | 2007 |
Oscar Pedro Bergotto |  | 19/07/1946 |  | Regular Director |  | 2019 |  | 2022 |  | 2019 |
Demian Brener |  | 20/06/1990 |  | Regular Director |  | 2019 |  | 2022 |  | 2019 |
Maria Julia Bearzi |  | 11/15/1975 |  | Regular Director |  | 2019 |  | 2022 |  | 2019 |
Liliana L. De Nadai |  | 01/11/1975 |  | Regular Director |  | 2019 |  | 2022 |  | 2019 |
Gastón Armando Lernoud |  | 06/04/1968 |  | Alternate Director |  | 2020 |  | 2023 |  | 2014 |
Enrique Antoniniv |  | 03/16/1950 |  | Alternate Director |  | 2019 |  | 2022 |  | 2007 |
Gabriel A. G. Reznik |  | 11/18/1958 |  | Alternate Director |  | 2019 |  | 2022 |  | 2019 |
David Williams |  | 12/07/1955 |  | Alternate Director |  | 2019 |  | 2022 |  | 2019 |
Ben Iosef Elsztain |  | 01/16/1997 |  | Alternate Director |  | 2020 |  | 2023 |  | 2020 |
Iair Elsztain |  | 03/05/1995 |  | Alternate Director |  | 2020 |  | 2023 |  | 2020 |

Oscar Pedro Bergotto, Demian Brener, David Williams, María Julia Bearzi and Liliana De Nadai are independent directors, pursuant to CNV Rules.

Our Chairman Eduardo S. Elsztain is the father of our alternate directors Iair and Ben Elsztain. Eduardo S. Elsztain is also the brother of Second Vice-Chairman Alejandro G. Elsztain and of regular director Daniel R. Elsztain, and cousin of the regular director Fernando A. Elsztain.

The following is a brief biographical description of each member of our Board of Directors:

Eduardo Sergio Elsztain. Mr. Elsztain has been engaged in the real estate business for more than twenty-five years. He is the Chairman of the Board of Directors of Cresud - S.A.C.I.F. y A.(“Cresud”), IRSA Propiedades Comerciales S.A. (“IRSA CP”), Banco Hipotecario S.A., BrasilAgro Companhia Brasileira de Propriedades Agrícolas Ltda., Austral Gold Ltd., Consultores Assets Management S.A., among other companies. He also Chairs IRSA Foundation, is a member of the World Economic Forum, the Council of the Americas, the Group of Fifty and the Argentine Business Association (AEA), among others. He is co-founder of Endeavor Argentina and serves as Vice President of the World Jewish Congress.

Saúl Zang. Mr. Zang obtained a law degree from the Universidad de Buenos Aires. He is a member of the International Bar Association and of the Interamerican Federation of Lawyers. He was a founding partner of Zang, Bergel & Viñes Law Firm. Mr. Zang is Vice-Chairman of Cresud, IRSA CP, Consultores Assets Management S.A. and other companies such as Fibesa S.A. and Chairman at Puerto Retiro S.A. He is also director of Banco Hipotecario S.A., BrasilAgro Companhia Brasileira de Propriedades Agrícolas Ltda., BACS Banco de Crédito & Securitización S.A., Nuevas Fronteras S.A., and Palermo Invest S.A., among other companies.

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Alejandro Gustavo Elsztain. Mr. Elsztain graduated as an Agricultural Engineer from the Universidad de Buenos Aires. He then completed the Advanced Management Program at Harvard Business School in June 1999. He is currently serving as II Vice President of IRSA, CEO of CRESUD, Executive Vice President of IRSA CP and Vice President of Fibesa S.A., Nuevas Fronteras S.A. and Hoteles Argentinos S.A.U. He is also director of BrasilAgro, a Brazilian agricultural company. He is also the president of Fundación Hillel Argentina.

Fernando Adrián Elsztain. Mr. Elsztain graduated as architecture from Universidad de Buenos Aires. He has been engaged in the real estate business as a consultant and as managing officer of a real estate company. He is Chairman of the Board of Directors of Palermo Invest S.A. and Nuevas Fronteras S.A. He is also a director of Hoteles Argentinos S.A.U. and Llao Llao Resorts S.A., and an alternate director of Puerto Retiro S.A.

Cedric D. Bridger. Mr. Bridger is qualified as a certified public accountant in the United Kingdom. From 1992 through 1998, he served as chief financial officer of YPF S.A. Mr. Bridger was also financial director of Hughes Tool Argentina, chief executive officer of Hughes Tool in Brazil and Hughes’ corporate vice-president for South American operations.

Marcos Fischman. Mr. Fischman is a pioneer in corporate advisory services in Argentina. He has a degree from the Hebrew University of Jerusalem. Mr. Fischman provides consulting services to businesspeople, students and artists. Since 1993, he has provided consulting services to us in communication and development.

Mauricio Elías Wior. Mr. Wior obtained his bachelor’s degrees in economics and accounting, and a master’s degree in finance from Tel Aviv University in Israel. Mr. Wior is currently a member of the boards of directors of Banco Hipotecario S.A. He has held positions at Bellsouth where he was Vice President for Latin America from 1995 to 2004. Mr. Wior was also Chief Executive Officer of Movicom Bellsouth from 1991 to 2004. In addition, he led the operations of various cellular phone companies in Uruguay, Chile, Peru, Ecuador and Venezuela. He was president of the Asociación Latinoamericana de Celulares (ALCACEL); American Chamber of Commerce in Argentina, and the Israeli Argentine Chamber of Commerce. He was director of Instituto para el Desarrollo Empresarial de la Argentina (IDEA), Fundación de Investigaciones Económicas Latinoamericanas (FIEL) and Tzedaka. He was also Director of TGLT S.A, Chairman of Shufersal Israel and Vice Chairman of Cellcom Israel.

Daniel Ricardo Elsztain. Mr. Elsztain obtained a degree in economic sciences at Universidad Torcuato Di Tella and has a Master’s degree in Business Administration from Universidad Austral IAE. He has been the Company Chief Operating Officer since 2012 and is the General Manager of IRSA CP. He previously held the position of Commercial and Marketing Manager and has been in charge of the real estate investments in New York between 2008 and 2001. He is also Chairman of Entertainment Holdings S.A., Entretenimiento Universal S.A., Boulevard Norte S.A. and Ogden Argentina S.A., as well as regular director of Nuevo Puerto Santa Fe S.A. and Panamerican Mall S.A., among other companies.

Oscar Pedro Bergotto. Mr. Bergotto has worked as auditor at the Banco de la Nación Argentina and CFO in Isaac Elsztain e Hijos SCA. Between 1987 and 2008 he worked as treasury in IRSA Inversiones y Representaciones S.A.

Demian Brener. Mr. Brener has a degree in Industrial Engineer, having studied at Instituto Tecnologico de Buenos Aires, Argentina, and Lund University, Sweden. He is the co-founder and CEO of Zeppelin, a company focused on blockchain technology and security. His work has been featured in major publications including Forbes and Bloomberg. He is also an Endeavor Entrepreneur, advisor to several technology companies, and member of the Voltaire and Sandbox communities. He has worked in Quasar Ventures, a Venture Capital firm, and Despegar, the leading online travel agency in Latin America.

Maria Julia Bearzi. Ms. Bearzi has a degree in Business Administration from the Universidad Nacional de La Plata. She has a history of more than 15 years working for entrepreneurial development at the Endeavor Foundation. She was responsible for Institutional Development and since 2016 she is the Executive Director of this organization. In addition, for 3 years she was an associate professor of the subject of Entrepreneurial Development at the UMET (Universidad Metropolitana para la Educación y el Trabajo). He led the Entrepreneurship by Endeavor program at the Universidad Catolica Argentina and the UTDT Factory entrepreneurial training course at Universidad Torcuato Di Tella.

Liliana De Nadai. Ms. De Nadai obtained an Accountant degree from the Universidad de Buenos Aires. Since 2003, she has advised various companies such as banks, accounting, tax and money laundering prevention consultants. Throughout his career, he has attended several Professional Practice courses at the Professional Council of Economic Sciences of the Autonomous City of Buenos Aires.

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Gastón Armando Lernoud. Mr. Lernoud obtained a law degree in Universidad El Salvador in 1992. He obtained a Master in Corporate Law in Universidad de Palermo in 1996. He has been senior associate in Zang, Bergel & Viñes Law Firm until June 2002, when he joined Cresud as legal counsel.

Enrique Antonini. Mr. Antonini holds a degree in law from the School of Law of Universidad de Buenos Aires. He is director of Banco Mariva S.A. since 1992, and alternate director of Mariva Bursátil S.A. since 2015. He is a member of the Argentine Banking Lawyers Committee and the International Bar Association. At present, he is Alternate Director of Cresud and IRSA Propiedades Comerciales S.A.

Gabriel A. G. Reznik. Mr. Reznik obtained a degree in Civil Engineering from Universidad de Buenos Aires. He worked for the Company from 1992 until May 2005, when he resigned. He had previously worked for an independent construction company in Argentina. He is regular director of Banco Hipotecario.

David Williams. Mr. Williams holds a BA in Business Administration from Tufs University and a Juris Doctorate from Georgetown University School of Law. He has focused on cross-border corporate transactions in Latin America for more than 25 years. He specializes in mergers and acquisitions, corporate and project finance, restructuring, corporate governance, and other complex corporate matters.

Ben Iosef Elsztain. Elsztain studied social media at ORT Technical School. He founded and was Commercial Manager of Torch Argentina until 2017. Then he worked for a year in search and selection of entrepreneurs for Endeavor Argentina. He is also a director of Soluciones de Seguridad Vial S.A as representative of the Israeli Mobileye and member of the Board of Directors of Turismo city, one of the largest travel buyers in LATAM. He is an alternate director at IRSA Propiedades Comerciales S.A.

Iair Elsztain.Mr. Elsztain is currently studying for a degree in industrial engineering at the UADE Faculty of Engineering. He previously served as general manager at Iaacob House Hostel, he is currently working on the Israel Startup Experience (ISE) Entrepreneurship Project, which offers travel for young people with experience in Israel. He has also interned at Olive Tree Venture Capital (Tel Aviv), an investment fund dedicated to companies in the technology and healthcare industry.

Employment Contracts with certain members of our Board of Directors

Messrs. Eduardo Sergio Elsztain, Saúl Zang, Alejandro Gustavo Elsztain, Daniel Ricardo Elsztain and Fernando Elsztain are employed by the Company under the Labor Contract Law No. 20,744. In addition, our alternate director Gastón Armando Lernoud provides services to us under the corporate services agreement. Law No. 20,744 governs certain conditions of the labor relationship, including remuneration, protection of wages, hours of work, holidays, paid leave, maternity protection, and suspension and termination of the contract.

Executive Committee

Pursuant to our bylaws, our day-to-day business is managed by an Executive Committee consisting of five regular directors and one alternate director, among which there should be the Chairman, first Vice-Chairman and second Vice-Chairman of our Board of Directors. The current members of the Executive Committee are Messrs. Eduardo Sergio Elsztain, Saúl Zang, Alejandro Elsztain, Daniel Ricardo Elsztain and Fernando Elsztain, as regular members. The Executive Committee meets as needed by our business, or at the request of one or more of its members.

The Executive Committee is responsible for the management of the daily business pursuant to the authority delegated by our Board of Directors in accordance with applicable law and our bylaws. Pursuant to Section 269 of the Argentine Corporations Law No. 19,550, as amended (the “Argentine Corporations Law”), the Executive Committee is only responsible for the management of the day-to-day business. Our bylaws authorize the Executive Committee to:

| · | designate the managers of our Company and establish the duties and compensation of such managers;
| · | grant and revoke powers of attorney on behalf of our Company;
| · | hire, discipline and fire personnel and determine wages, salaries and compensation of personnel;
| · | enter into contracts related to our business;
| · | manage our assets;
| · | enter into loan agreements for our business and set up liens to secure our obligations; and
| · | perform any other acts necessary to manage our day-to-day business.

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Senior Management

Appointment of Senior Management

Our Board of Directors appoints and removes senior management.

Senior Management Information

The following table shows information about our current senior management appointed by our Board of Directors:

Name |  | Date of birth |  | Position |  | Current position held since |
Eduardo S. Elsztain |  | 01/26/1960 |  | Chief Executive Officer |  | 1991 |
Daniel Ricardo Elsztain |  | 12/22/1972 |  | Chief Real Estate Operating Officer |  | 2012 |
Matías I. Gaivironsky |  | 02/23/1976 |  | Chief Administrative and Financial Officer |  | 2011 |
Jorge Cruces |  | 11/07/1966 |  | Chief Investment Officer |  | 2020 |

For a biographical description of Eduardo S. Elsztain, Daniel R. Elsztain please see “-Board of Directors.” The following is a description of each of the members of our senior management who are not directors:

Matías Iván Gaivironsky. Mr. Matías Gaivironsky obtained a degree in business administration from Universidad de Buenos Aires. He has a master’s degree in Finance from Universidad del CEMA. Since 1997 he has served in various positions at Tarshop, Cresud, IRSA CP and the Company, and was appointed Chief Financial Officer in December 2011 and in early 2016 he was appointed as Chief Financial and Administrative Officer.

Jorge Cruces. Mr. Jorge Cruces serves as Chief Investment Officer. He has been Manager of Urban Development at Banco Hipotecario SAS.A. He is a member of the Board of Directors of the Business Chamber of Urban Developers. In relation to academics, he is Coordinator of the Executive Program of Real Estate Management at Universidad Torcuato Di Tella. Mr. Cruces is an Architect graduated from the Universidad de Belgrano with master’s degrees in Business Administration, mentions in Finance and Strategic Administration.

Supervisory Committee

Our Supervisory Committee (Comisión Fiscalizadora) is responsible for reviewing and supervising our administration and affairs and verifying compliance with our bylaws and resolutions adopted at the shareholders’ meetings. The members of our Supervisory Committee are appointed at our annual general ordinary shareholders’ meeting for a one-fiscal year term. Our Supervisory Committee is composed of three regular members and three alternate members and pursuant to Section 294 of the Argentine Corporations Law must meet at least every three months.

The following table shows information about the members of our Supervisory Committee, who were elected at the annual ordinary shareholders’ meeting, held on October 26, 2020:

Name |  | Date of Birth |  | Position |  | Expiration Date |  | Current position held since |
José D. Abelovich |  | 07/20/1956 |  | Regular Member |  | 2021 |  | 1992 |
Marcelo H. Fuxman |  | 11/30/1955 |  | Regular Member |  | 2021 |  | 1992 |
Noemí I. Cohn |  | 05/20/1959 |  | Regular Member |  | 2021 |  | 2010 |
Roberto D. Murmis |  | 04/07/1959 |  | Alternate Member |  | 2021 |  | 2005 |
Ariela Levy |  | 07/08/1979 |  | Alternate Member |  | 2021 |  | 2020 |
Paula Sotelo |  | 08/10/1971 |  | Alternate Member |  | 2021 |  | 2020 |

Set forth below is a brief biographical description of each member of our Supervisory Committee:

José Daniel Abelovich. Mr. Abelovich obtained a degree in accounting from the Universidad de Buenos Aires. He is a founding member and partner of Abelovich, Polano & Asociados S.R.L., a member firm of Nexia International. Formerly, he was manager of Harteneck, López y Cía/Coopers & Lybrand and has served as a senior advisor in Argentina for the United Nations and the World Bank. He is a member of the Supervisory Committees of IRSA Propiedades Comerciales Sociedad Anonima, Cresud S.A.C.I.F. y A., Pampa Energía SA, Hoteles Argentinos S.A.U. and Banco Hipotecario S.A., among other companies.

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Marcelo Héctor Fuxman. Mr. Fuxman obtained a degree in accounting from the Universidad de Buenos Aires. He is a partner of Abelovich, Polano & Asociados S.R.L., a member firm of Nexia International. He is also a member of the Supervisory Committees of IRSA Propiedades Comerciales Sociedad Anonima, Cresud S.A.C.I.F. y A., Inversora Bolívar and Banco Hipotecario, among other companies.

Noemí Ivonne Cohn. Mrs. Cohn obtained a degree in accounting from the Universidad de Buenos Aires. She is a partner at Abelovich, Polano & Asociados S.R.L., a member firm of Nexia International, where she works in the auditor’s department. Mrs. Cohn worked in the audit area of Harteneck, Lopez y Cía., Coopers & Lybrand in Argentina and Los Angeles, California. Mrs. Cohn is a member, among others, of the supervisory committees of Cresud and IRSA Propiedades Comerciales.

Roberto Daniel Murmis. Mr. Murmis holds a accounting and law degree from the Universidad de Buenos Aires. He is a partner at Abelovich, Polano & Asociados S.R.L., a member firm of Nexia International. He is a member of the Tax Affairs Commission and of the General Council of the Argentine Chamber of Commerce. He formerly served as an advisor to the Secretariat of Public Revenue (Secretaría de Ingresos Públicos) of the Argentine Ministry of Economy. Mr. Murmis also is a member of the supervisory committees of Cresud and IRSA Propiedades Comerciales, among other companies.

Paula Sotelo. Ms. Sotelo holds a degree in accounting from Universidad de Buenos Aires. She is Director of the audit department of Abelovich, Polano y Asociados S.R.L. NEXIA, an accounting firm from Argentina that is a member of Nexia International, a global network of accounting and consulting firms. Previously, he was Senior Manager in the audit area of KPMG Argentina and KPMG New York. She is a member of the Supervisory Committees of IRSA Propiedades Comerciales Sociedad Anonima, Cresud S.A.C.I.F. y A., Futuros y Opciones.Com SA, FyO Acopio S.A., among others.

Ariela Levy. Ms. Levy obtained a degree in Accounting from the Universidad de Buenos Aires. She is director of the audit department of Abelovich, Polano y Asociados S.R.L. - NEXIA, an accounting firm from Argentina that is a member of Nexia International, a global network of accounting and consulting firms. She is a member of the Supervisory Committees of BACS Administradora de Activos S.A. SGF among others.

Internal Control

Management uses the Integrated Framework-Internal Control issued by the Committee of Sponsoring Organizations of the Treadway Commission (“2013 COSO Report”) to assess the effectiveness of internal control over financial reporting.

The 2013 COSO Report sets forth that internal control is a process performed by the Board of Directors, management and other personnel, designed to provide reasonable assurance regarding the achievement of the entity’s objectives in the following categories:

| · | Effectiveness and efficiency of operations
| · | Reliability of financial reporting, and
| · | Compliance with applicable laws and regulations

Based on the above, the company’s internal control system involves all the levels actively involved in exercising control:

| · | the Board of Directors, by establishing the objectives, principles and values, setting the tone at the top and making the overall assessment of results;
| · | the management of each area is responsible for the internal control in relation to objectives and activities of the relevant area, i.e. the implementation of policies and procedures to achieve the results of the areas and, therefore, those of the entity as a whole;
| · | the rest of the personnel plays a role in exercising control, by generating information used in the control system or taking action to ensure control.

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Audit Committee

In accordance with currently established by the Capital Market Law No. 26,831, its regulatory decree 1,023 and the CNV Regulations the Board of Directors has an Audit Committee. The main function of this committee is to assist the Board of Directors in: (i) exercising its duty of care, diligence and competence in issues relating to us, specifically as concerns the enforcement of accounting policies, and disclosure of accounting and financial information, (ii) management of our business risk, the management of our internal control systems, (iii) behavior and ethical conduct of the Company’s businesses, (iv) monitoring the sufficiency of our financial statements, (v) our compliance with the laws, (vi) independence and competence of independent auditors, (vii) performance of our internal audit duties both by our Company and the external auditors and (viii) it may render, upon request of the Board of Directors, its opinion on whether the conditions of the related parties’ transactions for relevant amounts may be considered reasonably sufficient under normal and habitual market conditions.

In accordance with the provisions of the Capital Markets Law No. 26,831, the CNV’s Rules and of Securities and Exchange Commission (SEC), our Audit Committee is made up by three Board members who qualify as independent directors.

Currently, we have a fully independent Audit Committee composed of Messrs. Oscar Pedro Bergotto, Liliana De Nadai and Maria Julia Bearzi, who is also designated as financial expert in compliance with the requirements of the SEC regulations.

Aspects related to the decision-making processes and internal control system of the Company

The decision-making process is led in the first place by the Executive Committee in exercise of the duties and responsibilities granted to it under the bylaws. As part of its duties, a material aspect of its role is to draft the Company’s strategic plan and annual budget projections, which are submitted to the Board of Directors for review and approval.

The Executive Committee analyzes the objectives and strategies that will be later considered and resolved by the Board of Directors and outlines and defines the main duties and responsibilities of the various management departments.

The Company’s internal control system also involves all levels that participate in active control: the Board of Directors establishes the objectives, principles and values, it provides general guidance and assesses global results; the Departments are responsible for compliance with internal policies, procedures and controls to achieve results within their sectors and -of course- achieve the results for the entire organization, and the other personnel members also have a role in exercising control upon generating information used by the control system, or by taking certain actions to ensure control.

In addition, the Company has an Internal Audit Department reporting to the CEO that is responsible for overseeing compliance with internal controls by the departments above mentioned issuing reports that are also presented to the Audit Committee.

B. Compensation

Board of Directors

Under the Argentine Corporations Law No. 19,550, if the compensation of the members of the Board of Directors and the Supervisory Committee is not established in the bylaws of the Company, it should be determined by the shareholders’ meeting. The maximum amount of total compensation to the members of the Board of Directors and the Supervisory Committee, including compensation for technical or administrative permanent activities, cannot exceed 25% of the earnings of the company. That amount should be limited to 5% when there is no distribution of dividends to shareholders and will be increased in proportion to the distribution up to such limit if all earnings are distributed. For purposes of applying this provision, the reduction in the distribution of dividends derived from reducing the Board of Directors’ and Supervisory Committee’s fees will not be considered.

When one or more directors perform special commissions or technical or administrative activities, and there are no earnings to distribute, or they are reduced, the shareholders meeting may approve compensation in excess of the above mentioned limits. The compensation of our directors for each fiscal year is determined pursuant to the Argentine Corporations Law No. 19,550 and taking into consideration whether the directors performed technical or administrative activities and our fiscal year’s results. Once the amounts are determined, they are considered at the shareholders’ meeting.

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At our annual ordinary shareholders meeting held on October 26, 2020, the shareholders agreed to pay an aggregate compensation of ARS 71 million to all the members of the Board of Directors for the fiscal year ended June 30, 2020.

Senior Management

We pay our senior management pursuant to a fixed amount, established by taking into consideration their background, capacity and experience and an annual bonus which varies according to their individual performance and the Company’s overall results.

The total aggregate compensation paid to our Senior Management for the fiscal year ended June 30, 2021 was ARS 53.2 million.

Supervisory Committee

The shareholders meeting held on October 26, 2020, approved by majority vote the payment of fees to the Supervisory Committee for the duties performed during the fiscal year ended June 30, 2020 for an aggregate amount of ARS 1,575,000.

Audit Committee

The shareholders meeting held on October 26, 2020, approved by majority of votes a budget of ARS 549,000 for the eventual hiring of advisors / consultants and trainings.

Compensation Plan for Executive Management

We have a defined contribution plan covering the members of our management team. The Plan became effective on January 1, 2006. Employees may begin participation voluntarily on monthly enrollment dates. Participants may make pre-tax contributions to the Plan of up to 2.5% of their monthly salary, or the “Base Contributions”, and pretax contributions of up to 15% of their annual bonuses, or “Extraordinary Contributions.” Under the Plan, we match employee contributions to the plan at a rate of 200% for Base Contributions and 300% for Extraordinary Contributions.

Contribution expense was ARS 58 million and ARS 54 million for the fiscal years ended June 30, 2021 and 2020, respectively. Employee contributions are held in a mutual fund. Individual participants may direct the trustee to invest their accounts in authorized investment alternatives. Participants or their assignees, as the case may be, may have access to 100% of our contributions under the following circumstances:

1. | ordinary retirement in accordance with applicable labor regulations;
2. | total or permanent incapacity or disability; or
3. | death.

In case of resignation or unjustified termination, the beneficiary may redeem the amounts contributed by us only if he or she has participated in the Plan for at least five years.

Incentive Program

The Shareholders’ Meetings held on October 31, 2011, October 31, 2012 and October 31, 2013 ratified the resolutions approved thereat as regards the incentive plan for the Company’s executive officers, up to 1% of its shareholders’ equity by allocating the same number of own treasury stock (the “Executive Plan”), and delegated on the Board of Directors the broadest powers to fix the price, term, form, modality, opportunity and other conditions to implement such Executive Plan. In this sense and in accordance with the new Capital Markets Law, the Company has made the relevant filing with the CNV and pursuant to the comments received from such entity, it has made the relevant amendments to the Executive Plan which, after the CNV had stated to have no further comments, were explained and approved at the Shareholders’ Meeting held on November 14, 2014, where the broadest powers were also delegated to the Board of Directors to implement such Executive Plan.

The Company has developed a medium and long term incentive and retention stock program for its management team and key employees under which share-based contributions were calculated based on the annual bonus for the years 2011, 2012, 2013 and 2014.

The beneficiaries under the Executive Plan were invited to participate by the Board of Directors and their decision to access the Executive Plan is voluntary.

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In the future, the Executive Participants or their successors in interest will have access to 100% of the benefit (IRSA’s shares contributed by the Company) in the following cases:

| · | if an employee resigns or is dismissed for no cause, he or she will be entitled to the benefit only if 5 years have elapsed from the moment of each contribution;
| · | retirement;
| · | total or permanent disability;
| · | death.

While Executive Participants are part of the program and until the conditions mentioned above are met to receive the shares corresponding to the contributions based on the 2011 to 2013 bonus, Executive Participants will receive the economic rights corresponding to the shares assigned to them.

As regards the year 2014, the program sets forth an extraordinary reward consisting of freely available stock payable in a single opportunity on a date to be determined by the Company. The date was fixed for June 26, 2015 for payroll employees of IRSA, IRSA CP, PAMSA, Emprendimiento Recoleta S.A., ARCOS and FIBESA S.A. who received IRSA’s shares.

Besides, the Company has decided to grant a bonus in shares to all the personnel with more than two years of seniority and who do not participate in the program described above, which bonus consists of a number of shares equivalent to their compensation for June 2014.

The shares allocated to the Executive Plan by the Company are shares purchased in 2009, which the Shareholders’ Meeting held on October 31, 2011 has specifically decided to allocate to the Executive Program.

On October 30, 2019, the shareholders’ meeting approved the implementation of a new incentive plan for directors, management and employees based on the granting of shares for the long term remuneration of its executives, directors and employees, which accomplish certain requirements in terms of seniority and internal category. In that sense, the shareholders approved a capital increase for up to 1% of the capital stock at the time of the execution of the plan. As of the date of this Annual Report, the incentive plan was not executed and thus, no shares were issued or allocated to it.

C. Board Practices

For information about the date of expiration of the current term of office and the period during which each director has served in such office see “Item 6. Directors, Senior Management and employees - A. Directors and Senior Management.”

Benefits upon Termination of Employment

There are no contracts providing for benefits to Directors upon termination of employment, other than those described under the following sections: (i) ITEM 6: Directors, Senior Management and Employees - B. Compensation - Capitalization Plan and (ii) ITEM 6: Directors, Senior Management and Employees - B. Compensation - Incentive Plan for Managers.

D. Employees

Operations Center in Argentina

As of June 30, 2021, we had 1,281 employees. Our employees of the segments non relating to our Shopping Mall and Offices had 9 employees. Our Shopping Malls segment had 590 employees, including 261 under collective labor agreements. Our Hotels segment had 652 employees, with 520 represented by the Tourism, Hotel and Gastronomic Workers Union (Unión de Trabajadores del Turismo, Hoteleros y Gastronómicos de la República Argentina, UTHGRA).

|  | Year ended on June 30, |
|  | 2021 |  |  | 2020 |  |  | 2019 |
Development and Sale of Properties and Other Non-Shopping Mall Businesses (1) |  |  | 9 |  |  |  | 11 |  |  |  | 12 |
Shopping Malls and Offices (2) |  |  | 620 |  |  |  | 796 |  |  |  | 872 |
Hotels (1) |  |  | 652 |  |  |  | 701 |  |  |  | 832 |
Total |  |  | 1,281 |  |  |  | 1,508 |  |  |  | 1,716 |

(1) | Includes Hotel Intercontinental, Libertador Hotel and Llao Llao.
(2) | Includes We are Appa S.A.

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E. Share Ownership

The following table sets forth the amount and percentage of our common shares beneficially owned by our directors, senior managers and members of the supervisory committee as of August 31, 2021.

|  |  |  | Share ownership |
Name |  | Position |  | Number of Shares |  |  | Percentage |  |  | Number of Warrants(2) |  |  | Percentage fully diluted |
Directors |  |  |  |  |  |  |  |  |  |  |  |  |  |
Eduardo S. Elsztain (1) |  | Chairman |  |  | 415,822,807 |  |  |  | 63.1 | % |  |  | 50,512,505 |  |  |  | 63.1 | %
Saúl Zang |  | Vice-Chairman I |  |  | 540,311 |  |  |  | 0.1 | % |  |  | 68,795 |  |  |  | 0.1 | %
Alejandro G. Elsztain |  | Vice- Chairman II |  |  | 2,594,464 |  |  |  | 0.4 | % |  |  | 315,107 |  |  |  | 0.4 | %
Fernando A. Elsztain |  | Regular Director |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Cedric D. Bridger |  | Regular Director |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Marcos M. Fischman |  | Regular Director |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Mauricio E. Wior |  | Regular Director |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Daniel R. Elsztain |  | Regular Director |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
María Julia Bearzi |  | Regular Director |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Oscar Pedro Bergotto |  | Regular Director |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Liliana De Nadai |  | Regular Director |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Damian Brener |  | Regular Director |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Gaston A. Lernoud |  | Alternate Director |  |  | 20,778 |  |  |  | 0.0 | % |  |  | 27,778 |  |  |  | 0.0 | %
Enrique Antonini |  | Alternate Director |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Gabriel A. G. Reznik |  | Alternate Director |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
David Williams |  | Alternate Director |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Ben Elsztain |  | Alternate Director |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Iair Elsztain |  | Alternate Director |  |  | 10,650 |  |  |  | 0.0 | % |  |  | 1,350 |  |  |  | 0.0 | %
Senior Management |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Matías I. Gaivironsky |  | Chief Financial and Administrative Officer |  |  | 182,258 |  |  |  | 0.0 | % |  |  | 130,558 |  |  |  | 0.0 | %
Jorge Cruces |  | Chief Investment Officer |  |  | 18,930 |  |  |  | 0.0 | % |  |  | - |  |  |  | - |
Supervisory Committee |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
José D. Abelovich |  | Member |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Marcelo H. Fuxman |  | Member |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Noemí I. Cohn |  | Member |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Roberto D. Murmis |  | Alternate member |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Paula Sotelo |  | Alternate member |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Ariela Levy |  | Alternate member |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |

| (1) | Includes (i) 406,255,455 common shares beneficially owned by Cresud and ii) 2,491,382 common shares owned by Helmir (iii) 3,612,081 common shares owned by Consultores Venture Capital Uruguay S.A., iv) 493,002 common shares owned by Consultores Asset Management S.A. and v) 2,970,887 common shares directly owned by Mr. Eduardo Elsztain.
| (2) | In May 2021, 80 million options were issued that will entitle the holders through their exercise to acquire up to 80 million additional new shares.

Option Ownership

No options to purchase common shares have been granted to our Directors, Senior Managers, members of the Supervisory Committee, or Audit Committee.

Employee Participation in our share Capital

There are no arrangements for involving our employees in our capital stock or related to the issuance of options, common shares or securities, other than those described under the following sections: (i) Item 6 - B. Compensation - Capitalization Plan and (ii) Item 6 - B. Compensation - Mid and Long Term Incentive Program.

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ITEM 7. Major Shareholders and Related Party Transactions

A. Major Shareholders

Information about Major Shareholders

Share Ownership

The following table sets forth information regarding ownership of our capital stock by each person known to us to own beneficially at least 5% of our common shares, ANSES and all our directors and officers as a group.

|  | Share Ownership as of August 31, 2021 |
Shareholder |  | Number of Shares |  |  | Percentage (2) |  |  | Number of Warrants |  |  | Percentage fully diluted |
Cresud (1) |  |  | 408,746,837 |  |  |  | 62.1 | % |  |  | 49,644,626 |  |  |  | 62.1 | %
Directors and officers (excluding Eduardo Elsztain) |  |  | 3,367,391 |  |  |  | 0.5 | % |  |  | 543,588 |  |  |  | 0.5 | %
ANSES |  |  | 29,696,047 |  |  |  | 4.5 | % |  |  | 3,781,213 |  |  |  | 4.5 | %
Total |  |  | 441,810,275 |  |  |  | 67.1 | % |  |  | 53,969,427 |  |  |  | 67.1 | %

(1) | Eduardo S. Elsztain is the beneficial owner of 215,998,867 common shares of Cresud, representing 36.5% of its total share capital, which include (i) 72,735,741 common shares beneficially owned by IFISA, 1,100 common shares owned by Consultores Venture Capital Uruguay S.A. for which Mr. Eduardo S. Elsztain is deemed to be the beneficial owner, (iii) 92,771,760 common shares owned by Agroinvestment S.A. for which Mr. Eduardo S. Elsztain is deemed beneficial owner and (iv) 50,490,266 common shares directly owned by Mr. Eduardo S. Although Mr. Elsztain does not own a majority of the common shares of Cresud, he is its largest shareholder and exercises substantial influence over it. If Mr. Elsztain is considered to be the beneficial owner of Cresud due to his substantial influence over it, he would be the beneficial owner of 63.1% of our common shares by virtue of his investment in Cresud of 408,746,837 common shares, Consultores Venture Capital Uruguay S.A. of 3,612,081 common shares, Consultores Asset Management S.A. of 493,002 and directly owned shares of 2,970,887. Cresud is a leading Argentine producer of basic agricultural products. Cresud’s common shares began trading in the BYMA on December 12, 1960, under the trading symbol “CRES” and on March 1997 its GDSs began trading in the Nasdaq under the trading symbol “CRESY.”
(2) | As of August 31, 2021, the number of outstanding common shares was 658,676,460.

Changes in Share Ownership

Shareholder (3) |  | August 31, 2021 (%) |  |  | June 30, 2021 (%) |  |  | June 30, 2020 (%) |  |  | June 30, 2019 (%) |  |  | June 30, 2018 (%) |  |  | June 30, 2017 (%) |
Cresud (1) |  |  | 62.1 |  |  |  | 62.1 |  |  |  | 62.1 |  |  |  | 62.1 |  |  |  | 63.4 |  |  |  | 63.4 |
Directors and officers (2) |  |  | 0.5 |  |  |  | 0.5 |  |  |  | 0.4 |  |  |  | 0.5 |  |  |  | 0.2 |  |  |  | 0.2 |
ANSES |  |  | 4.5 |  |  |  | 4.5 |  |  |  | 4.5 |  |  |  | 4.5 |  |  |  | 4.5 |  |  |  | 4.5 |
Total |  |  | 67.1 |  |  |  | 67.1 |  |  |  | 67.0 |  |  |  | 67.1 |  |  |  | 68.1 |  |  |  | 68.1 |

_________

(1) | Eduardo S. Elsztain is the beneficial owner of 215,998,867 common shares of Cresud, representing 36.5% of its total share capital, which include (i) 72,735,741 common shares beneficially owned by IFISA, 1,100 common shares owned by Consultores Venture Capital Uruguay S.A. for which Mr. Eduardo S. Elsztain is deemed to be the beneficial owner, (iii) 92,771,760 common shares owned by Agroinvestment S.A. for which Mr. Eduardo S. Elsztain is deemed beneficial owner and (iv) 50,490,266 common shares directly owned by Mr. Eduardo S. Although Mr. Elsztain does not own a majority of the common shares of Cresud, he is its largest shareholder and exercises substantial influence over it. If Mr. Elsztain is considered to be the beneficial owner of Cresud due to his substantial influence over it, he would be the beneficial owner of 63.1% of our common shares by virtue of his investment in Cresud of 408,746,837 common shares, Consultores Venture Capital Uruguay S.A. of 3,612,081 common shares, Consultores Asset Management S.A. of 493,002 and directly owned shares of 2,970,887.
(2) | Includes only direct ownership of our directors and senior management.
(3) | As of August 31, 2021, the number of outstanding common shares was 658,674,199.

Differences in Voting Rights

Our major shareholders do not have different voting rights.

Arrangements for change in control

We are not aware of any arrangements that may, when in force, result in a change in control.

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Securities held in the host country

As of June 30, 2021, our total issued capital stock outstanding consisted of 658,676,460 common shares. As of June 30, 2021, there were approximately 21,712,406 Global Depositary Shares (representing 217,124,063 of our common shares, or 33.0% of all or our outstanding common shares) held in the United States by approximately 19 registered holders.

A. Offer and Listing Details

The following summary provides information concerning our share capital.

Stock Exchanges in which our securities are listed

Our common shares are listed in the BYMA and our GDSs in the NYSE.

The following description of the material terms of our capital stock is subject to our certificate of incorporation and bylaws, which are included as exhibits to this Form 20-F, and the provisions of applicable Argentine Law.

As of that date of this Annual Report: (1) we had no other shares of any class or series issued and outstanding; and (2) there are no outstanding convertible notes to acquire our shares. Our common shares have one vote per share. All outstanding shares are validly issued, fully paid and non-assessable. As of June 30, 2021, there were approximately 4,856 holders of our common shares.

Price history of our stock in the BYMA and NYSE

Our common shares are traded in Argentina on the BYMA, under the trading symbol “IRSA.” Since 1994, our GDSs, each presenting 10 common shares, have been listed in the NYSE under the trading symbol “IRS.” The Bank of New York Mellon is the depositary with respect to the GDSs.

The following chart shows, for the period indicated, the maximum and minimum closing listed prices of our common shares on the ByMA and of our GDSs on the NYSE.

B. Related Party Transactions

A related party transaction is any transaction entered into directly or indirectly by us or any of our subsidiaries that is material based on the value of the transaction to: (a) us or any director, officer or member of our management or shareholders; (b) any entity in which any person described in clause (a) is interested; or (c) any person who is connected or related to any person described in clause (a).

Offices and Shopping Mall Leases

We rent office space for our executive offices located at the Della Paolera tower at Della Paolera 261, floor 9th, City of Buenos Aires, Argentine which IRSA CP has owned. We also rent an office space that IRSA CP owns at the Abasto Shopping Mall.

The offices of Eduardo S. Elsztain, the Chairman of our Board of Directors and our controlling shareholder, are located at Bolivar 108, City of Buenos Aires, Argentina. This property has been rented to a company controlled by family members of Mr. Elsztain and to a company controlled by Fernando A. Elsztain, one of our directors and the cousin of Mr. Eduardo S. Elsztain, and members of his family.

In addition, we, Cresud, BACS Banco de Crédito y Securitización S.A. (“BACS”), BHN Sociedad de Inversión S.A., BHN Seguros Generales S.A. and BHN Vida S.A. rent offices owned by IRSA CP in different buildings.

Furthermore, we also lease various stores, stands, storage space or advertising spaces in IRSA CP’s shopping malls to third parties and related parties such as Banco Hipotecario S.A.

Lease agreements entered into with affiliates have included similar provisions and amounts to those included in agreements with unaffiliated third parties.

Agreement for the Exchange of Corporate Services with Cresud and IRSA CP

Considering that each of Cresud, IRSA CP and us have operations that overlap to a certain extent, our Board of Directors deemed it advisable to implement alternatives designed to reduce certain fixed costs of our combined activities and to mitigate their impact on our operating results while seizing and optimizing the individual efficiencies of each of them in the different areas comprising the management of operations.

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To such end, on June 30, 2004, Cresud, IRSA CP and we entered into a Master Agreement for the Exchange of Corporate Services, or the “Framework Agreement,” which has been amended several times in line with evolving operating requirements. The Framework Agreement had an initial term of 24 months and is renewable automatically for additional 24-month terms, unless terminated by any of the parties upon prior notice.

Annually, a review of the criteria used in the determination of pricing for corporate services, as well as the bases of cost distribution and supporting documentation used in the aforementioned process. The risk management and audit area coordinate the review, which, in turn, periodically delegated the review to an external consultant.

The operations described above allow Cresud, IRSA CP and us to keep our strategic and commercial decisions fully independent and confidential, with cost and profit apportionment allocated on the basis of operating efficiency and equity, without any one company benefiting at the expense of the others.

Hospitality Services

We and our related parties hire, on certain occasions, hotel services and lease conference rooms for events held at our subsidiaries, Nuevas Fronteras S.A., Hoteles Argentinos S.A.U. and Llao Llao Resorts S.A., all on arm’s-length terms and conditions.

Financial and Service Operations

We work with several financial entities in Argentina for operations including, but not limited to, credit, investment, purchase and sale of securities and financial derivatives. Such entities include Banco Hipotecario S.A. and its subsidiaries. Furthermore, Banco Hipotecario and BACS usually act as underwriters in capital market transactions we undertake. In addition, we invest from time to time our cash in mutual funds managed by BACS Administradora de Activos S.A. S.G.F.C.I., which is a subsidiary of Banco Hipotecario S.A., among other entities.

Donations to Fundación IRSA and Fundación Museo de los Niños

Fundación IRSA is a non-profit charity that seeks to support and generate initiatives concerning education, the promotion of corporate social responsibility and the entrepreneurial spirit of young adults. It carries out corporate volunteer programs and fosters donations from our employees. The main members of Fundación IRSA’s Board of Directors are: Eduardo S. Elsztain (President); Saúl Zang (Vice President I); Alejandro Elsztain (Vice President II); Mariana C. de Elsztain (Secretary), Oscar Marcos Barylka (Director) and Marcos Slipakoff (Treasurer). It finances its activities with donations from us, IRSA CP, Cresud and other related companies.

On October 31, 1997, IRSA CP entered into an agreement with Fundación IRSA, whereby 3,800 square meters of the developed area at Abasto Shopping Mall was granted under a gratuitous bailment agreement for a term of 30 years. Subsequently, on October 29, 1999, Fundación IRSA assigned free of cost all the rights of use over such space and its respective obligations to Fundación Museo de los Niños.

On November 29, 2005, IRSA CP signed another agreement with Fundación Museo de los Niños granting under gratuitous bailment 2,670 square meters of the developed area at Alto Rosario shopping mall for a term of 30 years.

Fundación Museo de los Niños is a non-profit institution created by the founders of Fundación IRSA and its members are the same as those of Fundación IRSA.

Fundación Museo de los Niños has used these spaces to set up Abasto Shopping Mall and Museo de los Niños and Rosario, two interactive learning centers intended for children and adults. The agreements described above establish that the payment of common charges and direct expenses related to the services performed by these spaces must be borne by Fundación Museo de los Niños.

Borrowings

In the ordinary course of our business, we enter into loan agreements or credit facilities with related companies. The loans under these loan agreements and credit facilities accrue interest at prevailing market rates.

Credit Line Granted to IRSA by IRSA CP

On April 1, 2019 as amended on May 13, 2020, IRSA CP granted a line of credit to us and our subsidiaries that do not consolidate with IRSA CP in a principal amount up to USD 180,000,000 on the following terms: (1) the credit line may be funded in U.S. dollars or in Pesos; (2) up to three year term to maturity, not extendable without our consent; and (3) interest payable: (i) for U.S. dollar funded, at a rate equal to the yield on IRSA’s existing local bonds due 2020, or, if IRSA’s 2020 bonds are early redeemed or otherwise cancelled, at an interest rate equal to the yield on local bonds issued by us plus 50 basis points, and (ii) for pesos funded, at Badlar rate plus 9.625%. The interest rate is readjusted quarterly and applied to the outstanding loan balances and to new disbursements in such quarter. As of June 30, 2021 the outstanding principal balance of loans granted to IRSA amounted to USD 69.9 million.

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Purchase of financial assets

We usually invest excess cash in instruments that may include those issued by related companies, acquired at issuance, or from unrelated third parties in secondary market transactions.

Investment in Dolphin Fund Ltd.

On August 31, 2021, Torodur S.A., a Uruguayan company wholly owned by IRSA CP, entered into a subscription agreement with Dolphin Fund Ltd., an investment fund, constituted under the laws of Bermuda, controlled through equity shares by Tyrus S.A., a Uruguayan company wholly owned by us and whose administrator is Consultores Venture Capital Uruguay S.A., an Uruguayan company indirectly controlled by Mr. Eduardo Elsztain, through the subscription of Class C Participating Shares of face value USD 0.01 without voting rights, with possibility of redemption on the last day of each month with prior notification by the investor, for an amount of USD 1.8 million. The focus of the Class C is to invest into a Commodity super cycle.

Legal Services

We receive legal services from Estudio Zang, Bergel & Viñes, of which Saúl Zang was a founding partner. Mr. Zang is a member of our Board of Directors and those of certain related companies. See “Directors, Senior Management and Employees-Directors and Senior Management-Board of Directors.”

Purchases and sales of properties

In the ordinary course of our business, we may acquire from or sell to our related parties certain real estate properties used for rental purposes or otherwise, subject to our Audit Committee’s approval. Our Audit Committee must render an opinion as to whether the terms of these transactions can reasonably be expected to have been obtained by us in a comparable transaction on an arm’s-length basis with unrelated parties. In addition, if our Audit Committee so requires, valuation reports by independent specialist third parties must be obtained.

Investment in Dolphin Netherlands B.V.

We had invested in Dolphin Netherlands B.V. through our subsidiaries. Dolphin Fund Ltd is an investment fund controlled indirectly by our Chairman, Eduardo S. Elsztain. Dolphin Netherlands B.V. is incorporated in the Netherlands and is a subsidiary of Dolphin Fund Ltd. Such investment was made in order to carry out our investment in IDBD. We agreed with Dolphin Netherlands B.V. not to pay any fee to Dolphin Fund Ltd related to this investment.

Loan between Dolphin Netherlands and Yad Leviim Ltd.

On October 23, 2020, Dolphin Netherlands has granted a loan to Yad Leviim Ltd. for a term of 60 days, renewing upon expiration for an additional 90 days, in a principal amount of USD 16,250,000 at a rate interest of 5% per year. Yad Leviim Ltd. is a company controlling by Eduardo Elsztain. On May 10, 2021, the Board of Directors has ratified and approved the extension for a period of 365 days.

Transfer of Tax Credits

Cresud assigned credits to IRSA CP and other related parties corresponding to value added tax export refunds related to such companies’ business activity.

For further information regarding related party transactions see Note 30 to our Audited Financial Statements.

C. Interests of Experts and Counsel

This section is not applicable

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ITEM 8. Financial Information

A. Consolidated Statements and Other Financial Information

See Item 18 for our Audited Consolidated Financial Statements.

Legal or Arbitration Proceedings

Legal Proceedings

Set- forth below is a description of certain material legal proceedings to which we are a party. The company is not a party to any significant litigation or arbitration and we are not aware of any significant litigation or claim that is pending or imminent against the company outside of what is described below.

Operations Center in Argentina

Set forth below is a description of certain material legal proceedings to which we are a party. We are not engaged in any other material litigation or arbitration and no other material litigation or claim is known to us to be pending or threatened against us or our subsidiaries. Nevertheless, we may be involved in other litigation from time to time in the ordinary course of business.

Puerto Retiro

On November 18, 1997, in connection with our acquisition of our subsidiary Inversora Bolívar, we indirectly acquired 35.2% of the capital stock of Puerto Retiro. Inversora Bolívar had purchased such common shares of Puerto Retiro from Redona Investments Ltd. N.V. in 1996. In 1999, we, through Inversora Bolívar, increased our interest in Puerto Retiro to 50.0% of its capital stock. On April 18, 2000, Puerto Retiro was served notice of a filing made by the Argentine government, through the Ministry of Defense, seeking to extend the bankruptcy of Indarsa to the Company. Upon filing of the complaint, the bankruptcy court issued an order restraining the ability of Puerto Retiro to dispose of, in any manner, the real property it had purchased in 1993 from Tandanor. Puerto Retiro appealed the restraining order which was confirmed by the Court on December 14, 2000.

In 1991, Indarsa had purchased 90% of Tandanor, a former government-owned company, which owned a piece of land near Puerto Madero of approximately 8 hectares, divided into two parcels: Planta 1 and 2. After the purchase of Tandanor by Indarsa, in June 1993, Tandanor sold “Planta 1” to Puerto Retiro, for a sum of USD18 million pursuant to a valuation performed by J.L. Ramos, a well-known real estate brokerage firm in Argentina. Indarsa failed to pay to the Argentine government the price for its purchase of the stock of Tandanor, and as a result the Ministry of Defense requested the bankruptcy of Indarsa. Since the only asset of Indarsa was its holding in Tandanor, the Argentine government is seeking to extend Indarsa’s bankruptcy to other companies or individuals which, according to its view, acted as a single economic group. In particular, the Argentine government has requested the extension of Indarsa’s bankruptcy to Puerto Retiro which acquired Planta 1 from Tandanor.

The deadline for producing evidence in relation to these legal proceedings has expired. The parties have submitted their closing arguments and are awaiting a final judgment. However, the judge has delayed his decision until a final judgment in the criminal proceedings against the former Defense Minister and former directors of Indarsa has been delivered. It should be noticed, regarding the abovementioned criminal procedure, that on February 23, 2011 it was resolved to declare its expiration, and to dismiss certain defendants. However, this resolution is not final because it was appealed. We cannot give you any assurance that we will prevail in this proceeding, and if the plaintiff’s claim is upheld by the courts, all of the assets of Puerto Retiro would likely be used to pay Indarsa’s debts and our investment in Puerto Retiro, would be lost. As of June 30, 2016, we had not established any reserve with respect of this contingency.

Currently Puerto Retiro S.A., has a plot of 8.3 hectares, which is affected by a zoning regulation defined as U.P. that prevents the property from being used for any purpose other than strictly port activities. The Company was involved in a bankruptcy extension lawsuit initiated by the National Government, to which the Board is totally alien. La Gerencia y los asesores legales del Grupo, estiman que existen argumentos técnicos legales suficientes para considerar que el pedido de extensión de quiebra será rechazado por el tribunal. Sin embargo, dado el estado actual de la causa, la resolución es incierta.

In the context of the criminal case, the complaining party denounced puerto Retiro S.A.’s failure to comply with the precautionary measure decreed at criminal headquarters consisting in the prohibition of innovating and contracting with respect to the property subject to civil action. Following this complaint, Tribunal Oral Federal No. 5 formed an incident and ordered and executed the closure of the property where the location contracts (a helipad and a mooring) were being fulfilled in order to enforce the above measure. A raíz de dicha circunstancia, se tomó conocimiento de que las actuaciones se giraron a la Cámara Penal para la asignación de juzgado para que se investigue la posible comisión de un delito de desobediencia. A la fecha de emisión de los presentes estados financieros no ha habido novedades sobre el avance de esta causa

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In the face of the evolution of the legal cases affecting it and based on the reports of its legal advisors, the Directorate of Puerto Retiro has decided to record in the 2019 financial year a forecast equivalent to 100% of the book value of its investment property, without prejudice that it will reverse in case of finally obtaining a favorable judgment in the actions brought.

Tandanor has filed a civil action against Puerto Retiro and the people charged in the referred criminal case looking forward to be reimbursed from all the losses which have arisen upon the fraud committed. On March 7, 2015 Puerto Retiro responded filing certain preliminary objections, such as limitation, lack of information to respond the lawsuit, lack of legitimacy (active and passive). On July 12, 2016 Puerto Retiro was legally notified of the decision adopted by the Tribunal Oral Federal No. 5 related to the preliminary objections above mentioned. Two of them were rejected -lack of information and lack of legitimacy (passive). We filed an appeal with regard to this decision, which was rejected. The other two objections would be considered in the verdict.

On September 7, 2018, Court read its verdict, according to which the preliminary objection of limitation filed by Puerto Retiro was successful. Nevertheless, in the criminal procedure -where Puerto Retiro is not a party- Court ordered the seizure confiscation (“decomiso”) of the land known as “Planta 1.” This Court’s verdict is not final, as it is subject to further appeals Puerto Retiro filed an appeal with regard to the confiscation of Planta I. This appeal has not yet been decided.

On December 27, 2018, an action for annulment was filed against the judgment that ordered the confiscation of the property named “Planta 1.” On March 1, 2019 we were notified of the “in limine” rejection of the action for annulment filed. Subsequently, on March 8, 2019, a motion for restitution was filed against said resolution. On March 19, 2019, we were notified of the Court’s decision that rejected the replacement and declared the appeal filed in a subsidiary inadmissible. On March 22, 2019, a complaint was filed for appeal denied (before the Federal Criminal Cassation Chamber), the caul was granted, which is why the appeal filed is currently pending. In that sense, in April the appeal was maintained and subsequently, its foundations were expanded.

On 21 February 2020, an electronic document was received from the Federal Court of Criminal notifying the decision rejecting the appeals brought by Puerto Retiro against the verdict of the Federal Oral Court 5 that provided for the confiscation of the property Plant I and the distribution of costs in the order caused as regards the exception for the limitation of civil action brought by Puerto Retiro to which the Oral Court took place. Against that decision of appeal, Puerto Retiro was brought in a timely and form of Federal Extraordinary Appeal. In addition, Federal Criminal Cassation Chamber upheld the above limitation period by rejecting, to that effect, the appeal brought by the National State and Tandanor.

In the face of the evolution of the legal cases affecting it and based on the reports of its legal advisors, the Management of Puerto Retiro has decided to record a impairment equivalent to 100% of the book value of its investment property, without prejudice to the reversal of the same in the event that a favorable judgment is obtained in the actions brought.

Arcos del Gourmet

IRSA CP has been named as a party in a case titled “Federación de Comercio e Industria de la Ciudad de Buenos Aires y Otros c/ Gobierno de la Ciudad Autónoma de Buenos Aires s/ Amparo.” The plaintiff filed a petition for injunctive relief against the local government claiming that the Arcos del Gourmet project lacked the necessary environmental approvals and did not meet zoning requirements. On August 29, 2014, the lower court rendered a decision dismissing the case. This resolution was appealed but affirmed in December 2014. Therefore, on December 18, 2014, the “Arcos” Project was opened to the public, and currently is operating normally. Notwithstanding, the plaintiff appeared before the Superior Court of the City of Buenos Aires to request the review of the case based on constitutional matters allegedly at issue. On July 4, 2017, the Superior Court ordered the Appeals Court to review the case on certain grounds. The Appeals Court rendered a new sentence on February 14, 2019. This new sentence rules that Arcos del Gourmet has to yield a portion of land to build a green park. Arcos del Gourmet filed an appeal before the Superior Court. This appeal has been decided and Arcos del Gourmet filed an appeal complaint for appeal denied.

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On May 18, 2015, we were notified that the AABE, revoked the concession agreement granted to IRSA CP’s subsidiary Arcos del Gourmet S.A., through Resolution No. 170/2014. On June 2, 2015, IRSA CP filed before the AABE a request to declare the notification void, as certain formal proceedings required under Argentine law were not complied with by the AABE. Furthermore, IRSA CP filed an administrative appeal requesting the dismissal of the revocation of the concession agreement and a lawsuit seeking to declare Resolution No. 170/2014 void. IRSA CP also filed a lawsuit in order to judicially pay the monthly rental fees of the property. As of the date of this Annual Report, the “Distrito Arcos” shopping mall continues to operate normally.

On February 14, 2019, the Chamber decided to condemn the Government of the City of Buenos Aires (“GCBA”) and Arcos, providing for the partial annulment of resolution 157 / APRA / 14 at the point that it did not consider appropriate for Arcos to transfer 65% of the land for use and public utility with unrestricted access and destined “especially and preferably to the generation of new landscaped green spaces.”Consequently, it was resolved that the GCBA must issue an administrative act that provides for this assignment. If it does not do so, Arcos must also comply with said assignment, either on the premises where the commercial center is currently located, be it totally or partially on land adjacent to the area. Failing to do this, Arcos del Gourmet S.A. (“Arcos”) must pay, prior to the realization of an expert report to be ordered in the execution stage, the sum of money necessary in order for the Administration to proceed to the search for a property with the objective of fulfilling the aforementioned purpose. If none of the aforementioned forms of compliance are specified, the power to order will be expedited - prior intervention of the relevant experts and / or technical departments of the corresponding GCBA - the demolition of the necessary works in order to comply with the ordered assignment.

Against that judgment, an appeal for local unconstitutionality was filed on March 11, 2019 and a federal extraordinary appeal on March 15, 2019. After the relevant transfers were made, the Chamber decided to reject the appeal for unconstitutionality raised, which is why on May 29, 2019, a complaint was lodged due to an appeal of unconstitutionality denied. Said appeal is pending before the Superior Court of Justice of the City of Buenos Aires. On June 10, 2019, said the Court urged Arcos to accompany additional documentation. This documentation consists of provisions dictated by different departments of the Government of the City of Buenos Aires. Such intimation was fulfilled in a timely manner.

In March 2019, Arcos filed a petition for injunctive relief in order to suspend all judicial or administrative proceedings of launch or eviction, by which it is intended to execute, in a forced way, the AABE resolution No. 170/2014, until the final judgment is issued in the nullity proceeding. The injunctive relief was sentenced and renewed once but AABE and Playas Ferroviarias appealed the judgment and finally, in September 2021, the Court of Appeal revoked the first instance judgement of suspension of eviction of the Distrito Arcos that was filed against. Against that judgment, ARCOS filed a federal extraordinary appeal in September 2021, which hasn’t been solved yet.

Due to all of the foregoing, the Company’s legal advisors consider that, although the outcome of the complaint is still uncertain, even if it is unfavorable, there is a low probability that the demolition of the works carried out in the Property is definitively ordered.

Caballito

On July 20, 2020 IRSA CP was notified of the filing of a protection action (amparo) that is processed before the Administrative and Tax Litigation Jurisdiction of the City of Buenos Aires, Court 24, Secretariat 47 where the plaintiff has requested the nullity of: 1) Administrative act that grants the certificate of environmental aptitude and 2) Administrative act that registered the plans of the work called –Caballito Chico– located on Avellaneda 1400, City of Buenos Aires, because it is understood that they contain defects in their essential elements, for being violative of the provisions contained in the Urban Planning Code and of the complementary regulations in force at the time of initiating the process and for causing irreparable damage to the environment and rights of collective incidence. The transfer was answered by the precautionary measure and by the substantive action. The transfer of said presentation was answered. On August 13, 2020, the following precautionary measure was decreed that orders: a) the suspension of the effects of the administrative acts granted by the CCA (DI-2018-1865-DGEVA and that registered the plans and; b) the stoppage of construction work carried out on the property located at Avellaneda 1400, City of Buenos Aires. The issuance of said precautionary measure was appealed. On October 1, 2020, the Court of Appeal confirmed the precautionary measure. The Government of the City of Buenos Aires appealed the measure by filing a Constitutional Challenge that was denied filling a complaint appeal, in October 2021. Regarding the main proceeding, it is in process of trial.

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Operations Center in Israel

As of the date of this Annual Report, we no longer own any capital stock of IDBD while we have an investment in DIC that amounts to 2,062,000 of shares.

Legal proceedings relating to IDBD liquidation and the receivership over DIC shares

On September 25, 2020 the Court passed a judgement pursuant to which an order was awarded for the opening of proceedings against IDBD as well as an order for its liquidation. Pursuant to the judgment, a trustee was appointed to IDBD, and thereafter the Court appointed receivers for the DIC shares constituting approximately 82% of the issued share capital of DIC. As part of the receivership process, a group of purchasers led by Mega Or Ltd., purchased approx. 82% of DIC issued share capital (after such purchase was approved by the Court on November 20, 2020). Therefore, on November 23, 2020 all officers that were appointed by Dolphin BV resigned from their positions in DIC and its subsidiaries.

Litigation filed by IDBD against Dolphin Netherlands B.V. and IRSA

On September 21, 2020, a claim was filed by IDBD against Dolphin Netherlands B.V. (“Dolphin BV”) and IRSA to the District Court in Tel- Aviv Jaffa (civil case no. 29694-09-20). The amount claimed by IDBD is NIS 70 million, claiming that Dolphin BV and IRSA breached a purported legally binding commitment to transfer to IDBD an installment of NIS 70 million on September 2, 2020. On December 24, 2020, and upon the insolvency’s court approval, IDBD’s trustee filed a motion to strike the claim, while keeping the right, as IDBD’s trustee, to file a new claim, inter alia, in the same matter, after conducting an inquiry concerning the reasons for IDBD’s insolvency. On December 24, 2020, the court issued a judgement to strike the claim as requested.

Class action against IDBD, Dolphin IL and Eduardo Elsztain regarding the sale of DIC

On October 3, 2018, a motion was initiated by an applicant alleging to hold shares in DIC (the “Applicant”), against IDBD, Dolphin IL, and Mr. Eduardo Elsztain seeking an injunction to annul the sale of shares of DIC to Dolphin and to appoint a trustee to hold those shares while the action is pending. The applicant claims that the sale was not in compliance with the provisions of the Concentration Law and the plaintiff is seeking an order for payment of monetary damages to the shareholders of DIC of between NIS 58 and 73 million.

Following IDBD's liquidation process IDBD was removed from the claim by the plaintiff. We plan to vigorously defend this motion as we understand that the sale of the holdings in the shares of DIC by IDBD to Dolphin IL, IDBD complies with the provisions of the Concentration Law.

Class action against DIC and Mr. Eduardo Elsztain and other directors of IRSA regarding exit of the DIC’s share from indexes

On October 2, 2018, DIC was served with an action and a motion to approve that action as class action, which had been filed with the District Court of Tel Aviv-Yafo against the DIC, Mr. Eduardo Elsztain, and against additional directors and officers serving in DIC, in connection with the exit of DIC’s share on February 1, 2018 from thee TA90 and TA 125 indices of the TASE, whereon it had been traded on the Tel Aviv Stock Exchange Ltd. up to that date (the “Indexes”) alleging to have held DIC’s shares prior to February 1, 2018 and thereafter.

The Court is requested, inter alia, to approve the action as a class action and to charge the Respondents with compensating the members of the group according to the damage caused estimated at approximately NIS 17.6 million. DIC believes that such allegations are meritless and will vigorously defend this motion.

Derivative claim against DIC, Dolphin IL and certain directors regarding performance of a prohibited distribution

In May 2019, DIC received a claim and a motion to approve it as a derivative claim which had been filed with the District Court of Tel Aviv-Yafo against DIC, Dolphin IL and directors who hold office in DIC, by a petitioner claiming to hold Series J debentures of DIC on the grounds of performance of a prohibited distribution, with respect to a dividend distribution in cash in the amount of approximately NIS 40 million, and a payment in kind dividend in the amount of approximately NIS 64 million, which was performed by DIC in February 2019, and regarding self-purchases of shares which were performed by DIC (from the date of the resolution regarding the distribution) in the amount of approximately NIS 36 million, in accordance with a purchase plan, which was approved by DIC’s board of directors in January 2019.

In the motion, the Court was requested, inter alia, to declare and to determine that the distribution and the self-purchases did not fulfill the profit test (a test which constitutes a condition for a distribution in accordance with section 302 of the Companies Law, 5759-1999), and that they constitute a prohibited distribution, and to order the respondents to compensate DIC for the damages which it has incurred due to the prohibited distribution, with the damages allegedly caused by the respondents being estimated at a total of NIS 140 million. The Court was also requested to order Dolphin IL to repay to DIC the dividend amount which it received in the distribution, in the amount of NIS 85 million (in accordance with its rate of holding in DIC). In January 2021 the Motion was denied by the Court, and thereafter in March 2021 an appeal was filed by the plaintiff the Supreme Court.

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Dividend Policy

Pursuant to Argentine law, the distribution and payment of dividends to shareholders is allowed only if they result from realized and net profits of the company pursuant to annual financial statements approved by our shareholders. The approval, amount and payment of dividends are subject to the approval by our shareholders at our annual ordinary shareholders’ meeting. The approval of dividends requires the affirmative vote of a majority of the shares entitled to vote at the meeting.

In accordance with Argentine law and our by-laws, net and realized profits for each fiscal year are allocated as follows:

1. | 5% to our legal reserve, up to 20% of our adjusted capital stock;
2. | a certain amount determined at a shareholders’ meeting is allocated to compensation of our directors and the members of our Supervisory Committee;
3. | to an optional reserve, a contingency reserve, a new account or for whatever other purpose our shareholders may determine.

According to rules issued by Comisión Nacional de Valores, cash dividends must be paid to shareholders within 30 days of the resolution approving their distribution. In the case of stock dividends, the shares must be delivered to shareholders within three months of the annual ordinary shareholders’ meeting that approved them.

The following table sets forth the total and per share amounts paid as dividends on each fully paid-in share for the fiscal years mentioned. The amounts stated in pesos correspond to nominal pesos on their respective dates of payment and refers to our unconsolidated dividends. See “Item 3. Key Information-Local Exchange Market and Exchange Rates.”

Fiscal year |  | Dividend Paid stated in terms of the measuring unit current as of June, 30, 2021 |  |  | Dividend per share paid stated in terms of the measuring unit current as of June 30, 2021 |  |  | Dividend paid stated in terms of the measuring unit current as of the date of the each corresponding Shareholders’ meeting (1) |  |  | Dividend per share paid stated in terms of the measuring unit current as of the date of the each corresponding Shareholders’ meeting (1) |
|  | (in millions of ARS) |  |  | (ARS) |  |  | (in millions of ARS) |  |  | (ARS) |
2018 |  |  | 5,672.6 |  |  |  | 98.6089 |  |  |  | 1,400.0 |  |  |  | 24.3365 |
2019 (2) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
2020 (3) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
2021 (4) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |

(1) | The decisions made on the basis of years’ results prior to the application of IAS 29, are not subject to be revised.
(2) | Dividend in kind paid in IRSA CP shares. Dividend per share: 0.01109 shares of IRSA CP per share of IRSA.
(3) | Dividend in kind paid in IRSA CP shares. Dividend per share: 0.004046 shares of IRSA CP per share of IRSA.
(4) | Dividend in kind paid in IRSA CP shares. Dividend per share: 0.002614 shares of IRSA CP per share of IRSA.

Our 2020 annual meeting of shareholders was held on October 26, 2020, and it was decided, among others, a payment of a dividend on shares of IRSA CP for up to ARS 484 million. For more informtion see “Recent Development.”

The following table sets forth the total and per share amounts paid by our subsidiary IRSA CP, from which we collect dividends in our capacity as shareholders, as dividends on each fully paid-in share for the fiscal years mentioned. The amounts stated in pesos correspond to nominal pesos on their respective dates of payment and refers to our unconsolidated dividends. See “Item 3. Key Information-Local Exchange Market and Exchange Rates.”

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Fiscal year |  | Dividend Paid stated in terms of the measuring unit current as of June, 30, 2021 |  |  | Dividend per share paid stated in terms of the measuring unit current as of June 30, 2021 |  |  | Dividend paid stated in terms of the measuring unit current as of the date of the each corresponding Shareholders’ meeting |  |  | Dividend per share paid stated in terms of the measuring unit current as of the date of the each corresponding Shareholders’ meeting (1) |
|  | (in thousands of ARS) |  |  | (ARS) |  |  | (in thousands of ARS) |  |  | (ARS) |
2018 |  |  | 2,755,280 |  |  |  | 21.8648 |  |  |  | 680,000 |  |  |  | 5.3962 |
2019 |  |  | 1,513,338 |  |  |  | 12.0093 |  |  |  | 545,000 |  |  |  | 4.3249 |
2020 |  |  | 1,097,987 |  |  |  | 8.7133 |  |  |  | 595,000 |  |  |  | 4.7217 |
2021 |  |  | 13,042,506 |  |  |  | 103.5004 |  |  |  | 9,700,000 |  |  |  | 76.9755 |

(1) | On July 6, 2021, IRSA CP announced to its shareholders that as of July 19, 2021, was effected simultaneously the distribution of shares and the change in face value, where it was proceed to make the exchange of 126,014,050 ordinary shares of nominal value ARS 1.00 each and one vote per share, for the amount of 541,230,019 ordinary shares of nominal value ARS 100 each and one vote per share. From the date indicated, the new shares distributed by the capitalization described have economic rights on equal terms with those currently in circulation. The share capital of IRSA CP after the operations indicated amounts to the sum of ARS 54,123,001,900 represented by 541,230,019 ordinary shares of nominal value ARS 100 each and one vote per share.

Central Bank authorization is required for the transfer of profits and/or dividends outside of Argentina. For more information about exchange controls see, “Item 10. Additional Information-D. Exchange Controls.”

B. Significant Changes.

For information about significant changes see, “ITEM 4. Recent Developments”.

ITEM 9. The Offer and Listing

A. Offer and Listing Details

The following summary provides information concerning our share capital.

Stock Exchanges in which our securities are listed

Our common shares are listed in the BYMA and our GDSs in the NYSE.

The following description of the material terms of our capital stock is subject to our certificate of incorporation and bylaws, which are included as exhibits to this Form 20-F, and the provisions of applicable Argentine Law.

On April 12, 2021, the Company announced the launch of its public offering of shares for up to 80 million shares (or its equivalent 8 million GDS) and 80 million warrants to subscribe for new common shares, to registered holders as of April 16, 2021. Each right corresponding to one share (or GDS) allowed its holder to subscribe 0.1382465082 new ordinary shares and receive free of charge an option with the right to subscribe 1 additional ordinary share in the future. The final subscription price for the new shares was ARS 58.35 or USD 0.36 and for the new GDS it was USD 3.60. The new shares, registered, of ARS 1 of par value each and with the right to one vote per share gives the right to receive dividends under the same conditions as the current shares in circulation.

On May 6, 2021, having finished the preemptive rights subscription period, the Company’s shareholders have subscribed the amount of 79,144,833 new additional shares, that is 99% of the shares offered, and have requested through the accretion right 15,433,539 additional new shares, for which 855,167 new shares will be issued, completing the total issuance of 80 million new shares (or their equivalent in GDS) offered. Likewise, 80 million options will be issued that will entitle the holders through their exercise to acquire up to 80 million additional new shares.

The exercise price of the warrants will be USD 0.432. The warrants may be exercised quarterly from the 90th day of their issuance on the 17th to the 25th (inclusive) of the months of February, May, September, and November of each year on the business day prior to maturity and on the date of maturity (if dates are business days in the city of New York and in the Autonomous City of Buenos Aires) until their expiration 5 years from the date of issue. The warrants are available for trading on which are listed on BYMA and NYSE under the tickers IRS2W and IRSWS, respectively.

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As of the date of issuance of these financial statements, the Company received all the funds in the amount of USD 28.8 million and issued the new shares, increasing the capital stock to 658,676,460 million.

As of June 30, 2021, there were 80,000,000 warrants outstanding. On October 7, 2021, we informed that between September 17 and 25, 2021, certain warrants holders have exercised their right to acquire additional shares. Therefore, 30,741 options were exercised, which resulted in 30,741 shares of common stock being issued. After the exercise of these warrants, the number of shares and the capital stock of the Company increased from 658,676,460 to 658,707,201, and the new number of outstanding warrants reduced from 80,000,000 to 79,969,259. For more informarion see “Recent Developments – Warrants exercise.”

As of that date of this Annual Report: (1) we had no other shares of any class or series issued and outstanding; and (2) there are no outstanding convertible notes to acquire our shares. Our common shares have one vote per share. All outstanding shares are validly issued, fully paid and non-assessable. As of June 30, 2021, there were approximately 4,856 holders of our common shares.

Price history of our stock in the BYMA and NYSE

Our common shares are traded in Argentina on the BYMA, under the trading symbol “IRSA.” Since 1994, our GDSs, each presenting 10 common shares, have been listed in the NYSE under the trading symbol “IRS.” The Bank of New York Mellon is the depositary with respect to the GDSs.

The following chart shows, for the period indicated, the maximum and minimum closing listed prices of our common shares on the ByMA and of our GDSs on the NYSE.

B. Plan of Distribution

This section is not applicable.

C. Markets

Argentine Securities Markets

In December 2012, the Argentine government enacted Capital Markets Law No 26,831, which sets out the rules governing capital markets, its participants, and the rules by which securities traded therein are subject to regulation and monitoring by the CNV. In September 2013, the CNV issued General Resolution No. 622/2013 (the “CNV Rules”) a new set of rules further implementing and administering the requirements of the Capital Markets Law. On May 9, 2018, the Argentine Chamber of Deputies approved Law No. 27,440 called “Ley de Financiamiento Productivo”, which creates a new financing regime for MiPyMEs and modifies Capital Markets Law No. 26,831, Investment Funds Law No. 24,083 and Law No. 23,576, among others, as well as certain related tax provisions, and establishes regulations for derivative instruments, all with the aim of achieving a modern and transparent financial regulatory framework that contributes to the development of the Argentine economy. On May 21, 2018, the Argentine Government issued Decree No. 471/2018, which regulates certain aspects of the Capital Markets Law as amended by Law No. 27,440.

The Capital Markets Law, as currently in effect, sets forth, the following key goals and principles:

| · | Promoting the participation of small investors, employee unions, industry groups and trade associations, professional associations and all public savings entities in the capital markets, promoting mechanisms designed to promote domestic savings and channel such funds toward the development of production;
| · | Strengthening mechanisms to prevent abuses and protect small investors;
| · | Promoting access to the capital market by small and medium-sized companies;
| · | Using state-of-the-art technology to foster creation of an integrated capital market through mechanisms designed to achieve interconnection of computer systems among trading markets;
| · | Encouraging simpler trading procedures available to users to increase liquidity and competitiveness to develop favorable conditions for transaction execution;
| · | Reducing systemic risk in the Argentine capital markets through actions and resolutions aimed at implementing international best practices;
| · | Promoting the integrity and transparency of the Argentine capital markets; and
| · | Promoting financial inclusion.

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The CNV is a self-administered agency of the Argentine Government with jurisdiction covering the territory of Argentina, governed by the provisions of the Capital Markets Law, and the CNV Rules among other related statutory regulations. The relationship of the CNV and the Argentine Executive branch is maintained through the Ministerio de Finanzas (Ministry of Finance), which hears any appeals filed against decisions made by the CNV, notwithstanding any other legal actions and remedies contemplated in the Capital Markets Law.

The CNV supervises and regulates the authorized markets in which the securities and the collective investment products are traded, the corporations authorized in the public offer regime, and all the other players authorized to operate in the public offer regime, as the registered agents, the trading agents, the financial advisors, the underwriters and distributors, the brokers, the settlement and clearing agents, the managers of collective investment products, the custodians of collective investment products, the collective depositories, and the risk rating agencies, among others. Argentine institutional investors and insurance companies are regulated by separate government agencies, whereas financial institutions are regulated mainly by the Central Bank.

Before offering securities to the public in Argentina, an issuer must meet certain requirements established by the CNV with regard to its assets, operating history and management. Only securities offerings approved by the CNV may be listed on a stock exchange. However, CNV approval does not imply certification as to the quality of the securities or the solvency of the issuer issuers of listed securities are required to file unaudited quarterly financial statements and audited annual financial statements prepared in accordance with IFRS, as issued by the IASB (excluding financial institutions under the supervision of the Central Bank, insurance companies under the supervision of the Insurance Superintendence and medium and small enterprises) and various other periodic reports with the CNV and the stock exchange on which their securities are listed. In addition, issuers must report to the CNV and the relevant stock exchange any event related to the issuer and its shareholders that may affect materially the value of the securities traded.

In Argentina, debt and equity securities traded on an exchange must, unless otherwise instructed by their shareholders, be deposited with a Central Securities Depository based in Argentina. Currently the only depositary authorized to act in accordance with the Capital Markets Law and CNV Rules is Caja de Valores S.A., a corporation owned by ByMA which provides central depositary facilities, as well as acting as a clearinghouse for securities trading and as a transfer and paying agent for securities transactions.

Law No. 27,440 streamlines the regulation of mutual funds, public offerings of securities, of negotiable obligations and regulation of intermediaries and securities markets, while incorporating a long-awaited regulation for derivative instruments and the margins and guarantees that cover them. Below is a summary of the main amendments to the Capital Markets Law introduced by Law No. 27,440:

| · | Eliminates the CNV’s power to appoint supervisors with veto power over resolutions adopted by an issuer’s Board of Directors without a judicial order.
| · | Grants the CNV the power to issue regulations to mitigate situations of systemic risk, set maximum fees to be received by securities exchanges, create or modify categories of agents, encourage the simplification of the negotiation of securities and promote the transparency and integrity of the capital markets, while prohibiting the CNV from denying an issuer’s public offer authorization request solely because of opportunity, merit or convenience.
| · | Empowers the CNV to regulate private offerings of securities.
| · | Grants federal commercial courts jurisdiction to review resolutions or sanctions issued by the CNV.
| · | Strengthens due process guarantees in favor of persons on entities sanctioned by the CNV and increases the amount of the fines, between ARS 100,000 and ARS 100 million, which can be increased up to five times the benefits perceived with the infraction.
| · | Returns functions such as supervision, inspection and control of agents and operations, to the stock exchanges and clearing houses without this implying delegation of the powers of the CNV.

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| · | Allows the CNV to regulate and set ownership limits of authorized markets to restrict control concentration.Preemptive rights may be exercised through the placement procedure determined in a public offering prospectus, instead of the procedure set forth in the Argentine General Companies Law. Preemptive right holders have the right to subscribe for newly issued shares in proportion to their shareholding prior to the capital increase. The subscription price for the newly issued shares may not be less than the public offering price. In order to use the public offering regime for a preemptive rights offering the issuer must (i) have an express provision in its bylaws adopting this regime in lieu of the regime set forth in the Argentine General Companies Law; and (ii) the issuer’s shareholders must approve any issuance of equity securities or convertible debt securities.
| · | Eliminates share accretion rights, unless expressly provided for in a listed company’s bylaws.
| · | Allows foreign entities to participate in all shareholder meetings through authorized agents.
| · | Establishes guidelines to set the offer price in a mandatory tender offer.
| · | Allows the offeror to freely set the offer price in a voluntary tender offer.

Information regarding the BYMA (1)

|  | As of June 30, |
|  | 2021 |  |  | 2020 |
Market capitalization (in billions of ARS) |  |  | 3,265 |  |  |  | 2,845 |
Average daily trading volume (2) (in millions of ARS) |  |  | 1,668 |  |  |  | 1,088 |
Number of listed companies (3) |  |  | 87 |  |  |  | 89 |

(1) | Reflects Merval historical data.
(2) | During the month of June.
(3) | Includes companies that received authorization for listing.

Although companies may list all of their capital stock on the ByMA, in many cases a controlling block is retained by the listed company’s shareholders, resulting in a relatively small percentage of many companies’ stock being available for active trading by the public.

As of June 30, 2021, approximately 87 companies had equity securities listed on, or being transitioned to the ByMA. The Argentine securities markets generally have substantially more volatility than securities markets in the United States and certain developed countries. The S&P Merval index experienced a 0.8% increase in 2018, a 37.6% increase in 2019 and a 22.9% increase in 2020. In order to avoid large fluctuations in securities prices of traded securities, the ByMA operates a system pursuant to which the negotiation of a particular security is suspended for 15 minutes when the price of the security registers a variation between 10% and 15% and between 15% and 20%, during any trading session. Any additional 5% variation in the price of the security results in additional 10 minutes successive suspension periods.

The NYSE

Our Global Depositary Shares are listed on the NYSE under the trading symbol “IRS.”

D. Selling Shareholders

This item is not applicable.

E. Dilution

This item is not applicable.

F. Expenses of the Issue

This item is not applicable.

ITEM 10. Additional Information

A. Share Capital

This item is not applicable.

B. Memorandum and Articles of Association

Our corporate purpose

Our legal name is IRSA Inversiones y Representaciones Sociedad Anónima. We were incorporated under the laws of Argentina on April 30, 1943 as a sociedad anónima (stock corporation) and were registered with the Public Registry in the City of Buenos Aires (Inspección General de Justicia or “IGJ”) on June 23, 1943 under number 284, on page 291, book 46 of volume A. Pursuant to our bylaws, our term of duration expires on April 5, 2043.

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Pursuant to article 4 of our bylaws our purpose is to perform the following activities:

| · | Invest, develop and operate real estate developments;
| · | Invest, develop and operate personal property, including securities;
| · | Construct and operate works, services and public property;
| · | Agency activities;
| · | Manage real or personal property, whether owned by us or by third parties;
| · | Build, recycle, or repair real property whether owned by us or by third parties;
| · | Advise third parties with respect to the aforementioned activities;
| · | Finance projects, undertakings, works and/or real estate transactions of third parties;
| · | Finance, create, develop and operate projects related to Internet.

Board of Directors

Voting on proposals in which directors have material interest

| · | shall not be allowed to make use of any corporate assets or confidential information for his/her own private purposes;
| · | shall not be allowed to profit or permit a third party to profit, whether by an action or an omission to act, from any business opportunities available to the company;
| · | shall be required to exercise any powers conferred to them solely for the purposes for which they were conferred under the law or the corporate bylaws or by a shareholders’ meeting or the Board of Directors; shall be required to meticulously ensure that no conflict of interest, whether direct or indirect, shall under any circumstances arise between his/her actions and the company’s interests. In case of doubt as to a director’s compliance with his/her duty of loyalty, the burden of proof shall be borne by such person.

The Argentine Corporations Law No. 19,550 establishes in Section 271 that directors may enter into agreements with the company, that concern the business in which the company engages, always provided that they are entered into under market conditions. The agreements that do not fulfill the requirements mentioned above may only be executed with the prior approval of the Board of Directors, and subject to the approval of the shareholders’ meeting.

Furthermore, the Capital Markets Law No. 26,381 in Section 72 states for companies authorized in the public offer regime, that any acts performed or contracts executed between the company and a related party and involving a significant amount shall be performed or executed pursuant to the procedure set forth below:

a) A “related party” shall mean any of the following persons with respect to the issuer:

i. Directors, members of the supervisory body or surveillance committee, as well as chief executive officers or special managers of the issuing company appointed under section 270 of Argentine Corporation Law No. 19,550;

ii. Natural persons or legal entities controlling or holding a substantial interest, as determined by the CNV, in the capital stock of the issuer or the issuer’s controlling entity;

iii. Any other company under the common control of the same controlling entity;

iv. The ascendants, descendants, spouses or siblings of any of the natural persons referred to in paragraphs i) and ii) above;

v. Companies in which any of the persons referred to in paragraphs i) to iv) above hold a significant direct or indirect interest. Provided none of the circumstances described above is present, a subsidiary of the issuer shall not be deemed a “related party.”

b) A “significant amount” shall be deemed involved in an act or contract when such amount exceeds 1% of the company’s shareholders’ equity as shown in the most recently approved balance sheet.

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The Board of Directors or any members thereof shall request the Audit Committee to state whether in its opinion the terms of a transaction may be reasonably deemed adapted to regular and usual market conditions. The Audit Committee shall issue its pronouncement within 5 business days.

Notwithstanding the above inquiry from the Audit Committee, a resolution may be adopted by the company on the basis of a report from 2 independent evaluation companies, which shall express their opinion on the same matter and other terms of the transaction.

Nevertheless that, Section 272 of the Argentine Corporations Law provides that when a director has an opposite interest to the one of the company, he or she should notify that situation to the Board of Directors and the supervisory committee and abstain to vote in that respect. The violation of this provision results in the director being jointly and severally unlimitedly liable.

Approval of compensation of the members of the Board of Directors, Senior Management and Supervisory Committee

Our bylaws do not establish the compensation to be paid to members of the Board of Directors and the Supervisory Committee, and therefore pursuant to Section 261 of the Argentine Corporations Law No.19,550, it should be approved by the shareholders. The maximum amount that may be paid as compensation to members of the Board of Directors and the supervisory committee should not exceed 25% of the realized and net earnings of the company and 5% when there is no distribution of dividends. If the company does not distribute the total earnings, the amount of the compensation should be proportional to that distribution and within the mentioned limits. These limits may only be surpassed by express approval of the shareholders.

Powers of directors

Our bylaws establish, in Section 18, that the Board of Directors has full and broad powers to organize, manage and direct us to fulfilling the corporate purpose.

Retirement of directors

Our bylaws do not establish any requirements or provisions regarding age limits for director’s retirement, nor do they require a number of common shares a director must own to qualify for the position.

Meetings of the Board of Directors

Through the shareholders’ meeting held on October 31, 2012, the bylaws were amended to incorporate the possibility of holding meetings at a distance. To these effects, the Board of Directors shall adopt its resolutions by a majority vote of those present whose count shall include the directors present through the simultaneous means of simultaneous transmission of sound or image and sound or to be created in the future and according to the current legislation. In case of a tie, the President, or whoever replaces him, has the right to double vote.

Rights, preferences and restrictions attaching to the common shares

Dividend rights

The Corporations Law establishes that the distribution and payment of dividends to shareholders is valid only if they result from realized and net earnings of the company pursuant to an annual financial statements approved by the shareholders. The approval, amount and payment of dividends are subject to the approval of our annual ordinary shareholders meeting of the company. That approval requires the affirmative vote of the majority of the present votes with right to vote at the meeting.

Pursuant to the Corporations Law and Section 28 of our bylaws, liquid and realized profits of each fiscal year shall be distributed as follows:

| · | allocate 5% of such net profits to legal reserve, until the amount of such reserve equals 20% of the capital stock;
| · | the sum established by the shareholders’ meeting as remuneration of the of Directors and the supervisory committee;
| · | dividends, additional dividends to preferred shares if any, or to optional reserve funds or contingency reserves or to a new account, or for whatever purpose the shareholders’ meeting determines.

Under the applicable CNV Rules, dividends are distributed pro rata in accordance with the number of shares held by each holder within 30 days of being declared by the shareholders for cash dividends and within 90 days of approval in the case of dividends distributed as shares. The right to receive payment of dividends expires five years after the date on which they were made available to shareholders.

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The shareholders’ meeting may authorize payment of dividends on a quarterly basis provided no applicable regulations are violated. In that case, all and each of the members of the Board of Directors and the supervisory committee will be jointly and severally liable for the refund of those dividends if, as of the end of the respective fiscal year, the realized and net earnings of the company are not sufficient to allow the payment of dividends.

Regardless the term for dividend’s payment established by CNV, regulations enacted by the Buenos Aires Stock Exchange set forth that cash dividends must be paid within 10 days after their approval by a shareholders’ meeting.

Voting rights and staggered elections

Our stock capital is composed by book-entry common shares with face value of ARS 1 per share and entitled to one vote each. All directors and alternate directors are elected for a three-year term.

Our by laws do not consider staggered elections however, the members of the Board of Directors are elected by thirds each year with a term of office of three years each.

Rights to share in IRSA’s profits

The holders of our common shares have the right to participate in our net and realized profits on a pro rata basis of their respective interests.

Pursuant to the Corporations Law and Section 29 of our bylaws, liquidated and realized profits of each fiscal year shall be distributed as follows:

| · | allocate 5% of such net profits to legal reserve, until the amount of such reserve equals 20% of our capital stock;
| · | the sum established by the shareholders’ meeting as remuneration of the Board of Directors and the Supervisory Committee; anddividends, additional dividends to preferred shares if any, or to optional reserve funds or contingency reserves or to a new account, or for whatever purpose the shareholders determine at the shareholders’ meeting.

Rights to share in any surplus in the event of liquidation

In the event of liquidation, dissolution or winding-up of our company, our assets are:

| · | to be applied to satisfy our liabilities; and
| · | to be proportionally distributed among holders of preferred stock in accordance with the terms of the preferred stock, if any. If any surplus remains, our shareholders are entitled to receive and share proportionally in all net assets available for distribution to our shareholders, subject to the order of preference established by our by-laws.

Provisions related to a shareholder’s ownership of certain amount of common shares

Section 9 of our by-laws provides that the acquisition by any person or group, directly or indirectly of our common shares, convertible securities, rights to receive any of those securities that may grant that person the control of our company or 35% or more of our capital stock may only be done by complying with certain tender offer rules for all of our common shares, except for:

| · | acquisitions by persons holding or controlling common shares or convertible securities in accordance to Decree No. 677/2001, supersede by Law No. 26,831(amended by Law 27,440 in 2018), notwithstanding the provisions of the CNV; and
| · | holdings of more than 35%, which derive from the distribution of common shares or dividends paid in shares approved by the shareholders, or the issuance of common shares as a result of a merger approved by the shareholders; in both cases, the excess holding shall be disposed of within 180 days of its registration in the relevant shareholder’s account, or prior to the holding of our shareholders meeting, whatever occurs first.

Our shareholders modified the first of the above exceptions in their shareholder meeting on October 10, 2007, to include the control concept under the Transparency Decree, which provides for the effective control regularly held in addition to the legal control.

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Directors, senior managers, executive officers, members of the supervisory committee, and controlling shareholders of an Argentine company whose securities are publicly listed, should notify the CNV on a monthly basis, of their beneficial ownership of common shares, debt securities, and call and put options related to securities of such companies and their controlling, controlled or affiliated companies.

In addition, the CNV must be immediately notified of transactions which cause a person’s holdings of capital stock of an Argentine company whose securities are publicly listed to hold 5% or more of the voting power and of every change in the holdings of such person that represents a multiple of 5% of the voting power. Holders of more than 50% of the common shares of a company or who otherwise have voting control of a company, as well as directors, officers and members of the supervisory committee, must provide the CNV with Annual Reports setting forth their holdings in the capital stock of such companies and monthly reports of any change in their holdings.

Procedure to change the rights of stockholders

The rights of holders of stock are established in the Argentine Corporations Law No. 19,550 and in the bylaws. The rights of shareholders provided for by the Argentine Corporations Law No. 19,550 may not be diminished by the bylaws. Section 235 of the Argentine Corporations Law No. 19,550 establishes that the amendment of the bylaws should be approved by the absolute majority of our shareholders at an extraordinary shareholders meeting.

Ordinary and extraordinary shareholders’ meetings

Our by-laws provide that shareholders’ meetings may be called by our Board of Directors or by our Supervisory Committee or at the request of the holders of common shares representing no less than 5% of the common shares. Any meetings called at the request of shareholders must be held within 30 days after the request is made. Any shareholder may appoint any person as its duly authorized representative at a shareholders meeting, by granting a proxy. Co-owners of common shares must have single representation.

In general, the following matters can be considered only at a special shareholders’ meeting (asamblea extraordinaria):

| · | matters that may not be approved at an ordinary shareholders’ meeting;
| · | the amendment of our by-laws;
| · | reductions in our share capital;
| · | redemption, reimbursement and amortization of our shares;
| · | mergers, and other corporate changes, including dissolution and winding-up;
| · | limitations or suspensions to preemptive rights to the subscription of the new shares; and issuance of debentures and bonds that not qualify as notes (obligaciones negociables).

In addition, pursuant to the Capital Markets Law, at an ordinary shareholders’ meeting, our shareholders must consider (i) the disposition of, or creation of any lien over, our assets as long as such decision has not been performed under the ordinary course of business; (ii) the execution of administration or management agreements; and (iii) whether to approve the payment of any agreement providing assets or services to us as long as such payment is material when measured against the volume of the ordinary course of business and our shareholders’ equity.

In accordance with our by-laws, ordinary and special shareholders’ meetings (asamblea extraordinaria) are subject to a first and second quorum call, the second to occur upon the failure of the first. The first and second notice of ordinary shareholders’ meetings may be made simultaneously. In the event that both are made on the same day, the second must occur at least one hour after the first. If simultaneous notice was not given, the second notice must be given within 30 days after the failure to reach quorum at the first. Such notices must be given in compliance with applicable regulations.

quorum for an ordinary shareholders’ meeting on the first call requires the presence of a number of shareholders holding a majority of the common shares entitled to vote and, on the second call, the quorum consists of the number of shareholders present, whatever that number. Decisions at ordinary shareholders’ meetings must be approved by a majority of the votes validly exercised by the shareholders.

A quorum for a special shareholders’ meeting (asamblea extraordinaria) on the first call requires the presence of persons holding 60% of the shares entitled to vote and, on the second call, the quorum consists of the number of shareholders present, whatever that number. Decisions at special shareholders’ meeting (asamblea extraordinaria) generally must be approved by a majority of the votes validly exercised.

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However, pursuant to the Argentine Corporations Law No. 19,550, all shareholders’ meetings, whether convened on a first or second quorum call, require the affirmative vote of the majority of shares with right to vote in order to approve the following decisions:

| · | advanced winding-up of the company;
| · | transfer of the domicile of the company outside of Argentina;
| · | fundamental change in the purpose of the company; total or partial mandatory repayment by the shareholders of the paid-in capital; and
| · | a merger or a spin-off, when our company will not be the surviving company.

Holders of common shares are entitled to one vote per share. Owners of common shares represented by GDRs exercise their voting rights through the GDR Depositary, who acts upon instructions received from such shareholders and, in the absence of instructions, votes in accordance with the instructions given to the GDR Depositary by the Board of Directors as set forth in a written notice delivered to the GDR Depositary prior to the meeting.

The holders of preferred stock are not entitled to voting rights. However, in the event that no dividends are paid to such holders for their preferred stock, the holders of preferred stock are entitled to voting rights. Holders of preferred stock are also entitled to vote on certain special matters, such as a transformation of the corporate type, early dissolution, change to a foreign domicile, fundamental change in the corporate purposes, total or partial replacement of capital losses, mergers in which our company is not the surviving entity, and spin-offs. The same exemption will apply in the event the preferred stock is traded on any stock exchange and such trading is suspended or canceled.

Limitations to own securities by non-resident or foreign shareholders

There are no legal limitations on ownership of securities or exercise of voting rights, by non-resident or foreign shareholders. However, foreign shareholders must fulfill certain requirements with the IGJ in order to assure that they will be able to properly exercise their voting rights. General Resolution No. 7 passed in July 2015 by the IGJ as amended, set forth certain requirements for foreign entities registered with the IGJ. The entities must comply with these requirements in order to (1) perform activities on a regular basis through their Argentine branches (Section 118 Argentine Corporate Law No. 19,550), or (2) exercise their ownership rights in Argentine Companies (Section 123 Argentine Corporate Law). In cases where the IGJ has concluded that the main activities of the foreign company registered under the terms of Section 118 or 123 of the Argentine Corporate Law are developed or the entity’s address in Argentina becomes the place where this entity makes a majority of its decisions, corporate or otherwise, the entities may be required to amend and register their by-laws to comply with Argentine law, thereby becoming an Argentine entity subject to Argentine law according to Section 124 of Argentine Corporation Law No. 19,550. In addition, Argentine companies with shareholders consisting of such entities that fail to comply with these requirements may be subject to the following sanctions: the IGJ may not register corporate decisions adopted by the Argentine Company when its foreign shareholder votes as a shareholder. Any decisions made pursuant to such vote related to the approval of its annual balance sheet may be declared null and void for administrative purposes.

Ownership threshold above which ownership should be disclosed

CNV Rules require that transactions, which cause a person’s holdings of capital stock of a registered Argentine company, to equal or exceed 5% of the voting power, should be immediately notified to the CNV. Thereafter, every change in the holdings that represents a multiple of 5% of the voting power should also be notified.

Directors, senior managers, executive officers, members of the supervisory committee, and controlling shareholders of an Argentine company whose securities are publicly offered, should notify the CNV on a monthly basis, of their beneficial ownership of common shares, debt securities, and call and put options related to securities of such companies and their controlling, controlled or affiliated companies.

Furthermore, the CNV must be immediately notified of transactions which cause a person’s holdings of capital stock of an Argentine company whose securities are publicly offered to equal or exceed 5% of the voting power and every change in the holdings that represents a multiple of 5% of the voting power. Holders of more than 50% of the common shares or who otherwise control decision making in shareholders’ meetings, as well as directors, officers and members of the supervisory committee must provide the CNV with Annual Reports of their holdings in the capital stock of such companies and monthly reports of any change in their holdings.

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Amendment to the by-laws

On the shareholders’ meeting held on October 25, 2007, our shareholders decided to amend the following sections of the by-laws: (i) Section Twelve in order to adapt the performance bonds granted by directors to current rules and regulations, and (ii) Section Fifteen in order to incorporate the possibility of holding remote board meetings pursuant to the provisions of section 65 of Decree 677/01. Such amendment is attached hereto as Exhibit 1.2.

On October 31, 2012, the annual shareholders meeting passed an amendment to the corporate by-laws which allowed the Board of Directors to celebrate their meetings using teleconference technology. An absolute majority of the directors will constitute the quorum. Only the directors physically present at the time and those using teleconference technologies will be taken into consideration for the quorum. The resolutions of the Board of Directors will be passed by the vote of the majority present at the meeting. Such amendment is attached hereto of Exhibit 1.3 to this Annual Report.

On November 14, 2014, the shareholder’s meeting decided to amend the following sections of the by-laws: (i) Section First in order to comply with the Capital Markets Law No. 26,831, and (ii) Section Twenty-Four in order to incorporate the regulation of the shareholders’ meeting held with shareholders present or communicated through teleconference technologies. The Section First was approved in the shareholder’s meeting in October 31, 2014 and the Section Twenty-Four was approved in the shareholder’s meeting in October 31, 2016. Such amendment is attached hereto of Exhibit 1.4 to this Annual Report.

On the shareholder’s meeting held on October 29,2018 our shareholders decided to amend the following sections of the by-laws in order to adapt them to certain new legal provisions: (i) Section Eighth, establishing that if there is an Issuance of Shares, the shareholders’ preemptive right will be exercised as established in the prospect of the issuance; (ii) Section Ninth, adapting the wording of such section to the new regulations applicable to the Tender Offers (Law 26,831 as amended) (iii) Section Eleventh, establishing the issuance of Negotiable Obligations may be decided by the Board of Directors; and (iv) Section Twenty-Second describing the duties of the Audit Committee as well as authorizing the Audit Committee to hold meeting via conference, teleconference of any other electronic means. Such amendments are pending of approval by the Public Registry of the City of Buenos Aires.

C. Material Contracts

We do not have any material contract entered into outside the ordinary course of business other than some of the operations previously described under the sections Related Party Transactions, Recent Developments, and Our Indebtedness.

D. Exchange Controls

On September 1, 2019, the Argentine government issued Decree No. 609/2019, pursuant to which foreign exchange controls were temporarily imposed until December 31, 2019. On January 3, 2020, the Argentine government issued Decree No. 91/2019, which permanently extended the foreign exchange controls that expired on December 31, 2019.

At present, foreign exchange regulations are included in the Consolidated Text on Foreign Trade and Exchange issued by Communication (Central Bank, also referred to as “BCRA”) “A” 6,844 as supplemented.

A brief summary of the exchange control regulations in force as of the date of this Form Annual Report is set forth below.

Exports of Goods

As a general rule, exporters of goods must repatriate, and settle in pesos through the foreign exchange market, the proceeds from exports cleared through customs after September 2, 2019 within different deadlines, depending on certain factors (nature of goods, relationship between exporter and importer, etc.). In certain cases (e.g. certificate of increase of exports against 2020, proyects falling under the Investment Promotion Regime for Exports set out by the Executive Order 234/21, etc.) exporters have greater access to the foreign exchange market.

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Sale of Non-Financial Assets

Proceeds in foreign currency from the sale of non-financial assets must be repatriated and settled in pesos in the foreign exchange market within five business days from the date of collection in Argentina or abroad, or the date of deposit of such amounts in foreign bank accounts.

Exports of Services

Exporters of services must repatriate, and settle in pesos through the foreign exchange market, the proceeds from their exports within five business days from the date of collection in Argentina or abroad, or the date of deposit of such amounts in foreign bank accounts.

Imports of Goods and Services

Except for certain exceptions current regulations provide for, importers of goods and/or services must obtain prior authorization from the Central Bank for the settlement of foreign currency-denominated debts in connection with the import of goods and services.

Foreign Assets

Prior authorization from the Central Bank is required for the acquisition of foreign assets (e.g., purchase of foreign currency, among others) and for derivative transactions by Argentine companies, Argentine local governments, Argentine mutual funds, trusts and other Argentine entities. Individuals must request authorization when the value of such assets exceed USD 200 (in the case of withdrawals from Argentine bank accounts) or USD 100 (in the case of cash purchases) in any calendar month.

External Financial Indebtedness

Borrowers must repatriate and settle in the foreign exchange market the proceeds from financial indebtedness incurred after September 1, 2019, as a condition for accessing the foreign exchange market to make debt service payments thereunder. Subject to compliance with requirements set forth in the regulations, access to the foreign exchange market will be granted for the repayment of principal or interest up to three business days in advance of the due date.

Communication “A” 7,030, and its amendments, establishes the prior agreement of the Central Bank, until December 31, 2021, for the cancellation of capital services of financial debts with abroad, provided that the creditor is a related counterparty, with limited exceptions.

Additionally, Communication “A” 7,106 and its amendments established the requirement, for those who register scheduled capital maturities until December 31, 2021 with creditors that are not related counterparties, to submit to the Central Bank a detail of a refinancing plan complying with certain criteria established in the said Communication, with limited exceptions (e.g. proceeds from financial indebtedness incurred after January 1, 2020, that were repatriated and settled in the foreign exchange market). Specifically, the Central Bank will grant access to companies for an amount up to 40% of maturities and companies must refinance the rest for a term of at least 2 years. This, provided that the amount for which the exchange market would be accessed for the cancellation of principal exceeds the equivalent of USD 2,000,000 per calendar month, with some exceptions, expressly provided for by the regulation.

Indebtedness Between Residents

Prior authorization from the Central Bank is required for the payment of foreign currency-denominated obligations between Argentine residents after September 1, 2019, with limited exceptions. However, no prior authorization is required for the payment of foreign currency-denominated obligations to Argentine financial entities, including, among others, payments made in respect of credit cards.

Profits and Dividends

Prior authorization from the Central Bank is required for the transfer of profits and/or dividends outside of Argentina, unless certain requirements expressly provided for by current regulation are met.

Non-Residents

Non-residents must obtain prior authorization from the Central Bank to access the foreign exchange market to purchase foreign currency, with limited exceptions.

Reporting Regime

In all cases, access to the foreign exchange market for the payment of financial or commercial debts will be granted to the extent that such debts were disclosed in accordance with the Central Bank’s reporting regime established through Communication “A” 6,401, if applicable.

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Outgoings

Outflow of funds

Consolidated Text on Foreign Trade and Exchange provides for prior approval of the Central Bank in order to carry out any outflow of funds, unless the clients submit several affidavits related to (i) foreign currency holdings and liquid external assets; (ii) own and controlling company’s securities transactions (blue chip swap, “dolar MEP”, etc.); and (iii) economic benefits granted by the State.

Through Communication “A” 7,001, as amended by Communication “A” 7,030, the Central Bank established certain restrictions to carry out sales of securities via the settlement of foreign currency and its transfer to depository institutions abroad. In this connection, in order to carry out any outflow of funds, the entity must:

(i) request the prior approval of the Central Bank; or

(ii) rely on an affidavit stating that the client did not carry out neither sales of securities via the settlement of foreign currency, nor its transfer to foreign depository entities on the day that access to the foreign exchange market was requested and within 90 days prior to such request, as well as that the customer undertakes not to carry out such transactions from the date access to the foreign exchange market is requested and for the subsequent 90 calendar days.

The Central Bank Communication “A” 7,030 also establishes the prior approval of the Central Bank to carry out any outflow of funds through the foreign exchange market from May 29, 2020 onwards, with some exceptions.

In addition, Communication “A” 7,030, as amended, established the prior approval of the Central Bank for certain outflow of funds through the foreign exchange market, unless the entity has an affidavit from the client stating that at the time of access to the foreign exchange market:

(a) All of its local foreign currency holdings are deposited in accounts in financial institutions and that it did not have liquid external assets available at the beginning of the day that access to the foreign exchange market is requested for a higher amount equivalent to USD 100,000 (with some exceptions, expressly provided for by the regulation).

(b) Undertakes to settle in pesos through the foreign exchange market, within five working days of its availability, those funds received abroad resulting from the collection of loans granted to third parties, the collection of a term deposit or the sale of any type of asset, when the asset has been acquired, the deposit constituted or the loan granted after May 28, 2020.

In addition to the above, by means of Communication “A” 7,327, the Central Bank established that, as of July 12, 2021, in order for residents to be granted access to the foreign exchange market, it will be required (in addition to the preexisting conditions), that: (i) on the same day that such access is required and within the previous 90 days, such local resident has not exchanged securities for other foreign assets (in addition to the already existing requirement of not having sold securities with settlement in foreign currency or transferred them to depository institutions abroad during the same period); and (ii) for legal entities, to submit a sworn statement informing (a) a list of the persons or legal entities that directly control the client; and (b) that within the previous 90 days (or since July 12, 2021, in the event that 90 days have not yet elapsed since that date), the legal entity has not delivered in the country any funds in local currency or other liquid local assets to any of the aforementioned persons (except for those directly associated with usual transactions involving the acquisition of goods and/or services). Alternatively, the requirement set forth in (b) may be considered fulfilled if the legal entity submits a sworn statement executed by each of those persons exercising direct control stating that, during the same period, no sales of securities with settlement in foreign currency, or exchanges of securities for other external assets, or transfers thereof to depository institutions abroad, have been made.

On October 5, 2021, by means of General Resolution 907/21, a limit on the sale of securities which are denominated in U.S. dollars and issued under local law was established at the end of each week for those transactions that had a concurrence of tenders received with a priority of price and time. This limit may not exceed the amount of fifty thousand nominal values settled. Plus, it was also established as prior condition for those transactions that the orders may only be given if no sales have been made with foreign settlement in the previous thirty days, and a commit not to do so within thirty subsequent calendar days.

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Securities trading

Central Bank Communication “A” 7,106, as amended by Communication “A” 7,308, established that securities transactions performed in Argentina, unlike securities transactions performed abroad, can be settled in ARS in Argentina.

Central Bank Communication “A” 7,340 provides that securities sale transactions settled in foreign currency must be paid by one of the following mechanisms:

| · | By transfer of funds to and from demand accounts held in the customer’s name with local financial institutions;
| · | Against wire transfers on bank accounts in the customer’s name with a foreign entity that is not incorporated in countries or territories where the Recommendations of the Financial Action Task Force do not apply, or do not sufficiently apply.

This Communication “A” 7,340 also prohibits the settlement of purchase and sale transactions of securities with settlement in foreign currency through payment in foreign currency cash, or through their deposit in custody accounts or accounts of third parties.

No sales of securities with settlement in foreign currency may be executed in Argentina, and such securities may not be transferred to foreign depositaries or exchanged for other external assets, by persons that were granted with certain benefits (beneficiaries of refinancings contemplated under Section 2.1.1. of the regulations on “Financial services under the scope of the health emergency ordered by Decree No. 260/2020 Coronavirus (COVID-19”, etc.).

On July 8, 2021, the Securities Regulator (“CNV”), approved General Resolution 895/2021, to increase the minimum holding periods for the settlement of securities against foreign currency and in foreign jurisdiction. Said General Resolution does not incorporate modifications for the settlement of securities against local currency.

The minimum holding period, locally known as “Parking Period”, for securities in the local custodian to be applied to the settlement of transactions in foreign currency and in foreign jurisdiction (i.e., settlement against “Dollar Cable” in a foreign account) was set to two (2) business days. This Parking Period does not apply in the case of purchases of securities with settlement in foreign currency and in a foreign jurisdiction.

In the case of sales of securities with settlement in foreign currency, but in local jurisdiction (i.e., settlement against a MEP transfer to a local account), the Parking Period remains one (1) business day. This Parking Period shall not apply in the case of purchases of securities settling in foreign currency.

The Parking Period prior to settlement against foreign currency and in foreign jurisdiction (i.e. settlement against “Dollar Cable” in a foreign account) for locally credited securities from foreign depositories (i.e. acquired from foreign agents) has also been set to two (2) business days. In the case of transactions with settlement in foreign currency and in local jurisdiction (i.e., settlement against a MEP transfer to a local account), the Parking Period remains at 1 (ONE) business day.

Finally, the CNV also modified the maximum limits for weekly transactions in sovereign securities issued by the Argentine Republic for each principal sub-account in the time-priority bidding segment (BYMA), which prior to the entry into force of the General Resolution was one hundred thousand (100,000) nominal amounts (only for securities issued under local law). According to the new General Resolution, the limit was split into (i) fifty thousand (50,000) nominals for securities issued under local law, purchased with settlement in such currency and jurisdiction, and (ii) fifty thousand (50,000) nominals for securities issued under foreign law. These limits continue not to apply to wholesale transactions (MAE/SENEBI).

For more information see “Risk Factors—Restrictions on transfers of foreign currency and the repatriation of capital from Argentina may impair our ability to pay dividends and distributions and investors may face restrictions on their ability to collect capital and interest payments in connection with corporate bonds issued by Argentine companies”.

E. Money Laundering

Argentine Law No. 25,246, as amended and/or complemented by Laws Nos. 26,087, 26,119, 26,268, 26,683, 26,831, 26,860 and 27,304 (the “Anti‑Money Laundering Law”), categorizes money laundering as a crime, which is defined as the exchange, transfer, management, sale or any other use of money or other assets obtained through a crime, by a person who did not take part in such original crime, with the potential result that such original assets (or new assets resulting from such original assets) have the appearance of having been obtained through legitimate means. In spite of the fact that there is a specific amount for the money laundering category (ARS 300,000), the crimes committed for a lower amount are also punished, but the prison sentence is reduced.

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After the enactment of Law No. 26,683, money laundering was included in the Penal Code as an independent crime against economic and financial order and it was split from the title “Concealment” as originally disposed. Therefore, money laundering is a crime which may be prosecuted independently. The Anti-Money Laundering Law created the Financial Information Unit, or “UIF,” is responsible for the analysis, treatment and procurement of information to prevent money laundering originating from, among others:

| · | Crimes related to the traffic and illegal commercialization of drugs (Law No. 23,737);
| · | Crimes related to arms traffic (Law No. 22,415);
| · | Crimes related to illegal association or terrorist association;
| · | Crimes committed by illegal associations organized to commit crimes for political or racial purposes;
| · | Crimes against Public Administration;
| · | Crimes of minor’s prostitution and child pornography; and
| · | Crimes related to terrorism financing.

The UIF analyzes the information received from entities that have the obligation to report suspicious activities or operations and, as the case may be, inform the Public Ministry to carry out the investigations that may be considered relevant or necessary.

The UIF analyzes the information it receives and informs the Public Prosecutor as to whether it should carry out any investigations. Once the information is received, the UIF may request additional information and any undertake action it deems useful for the fulfillment of its functions. In the context of the analysis, respondents may not rely on bank, tax, stock or professional secrecy, or contractual confidentiality commitments to oppose a request for information from the UIF. Once the analysis is completed, the UIF is empowered to (i) receive voluntary declarations, which in no case may be anonymous, (ii) require the collaboration of all State information services, which are required to provide it in the terms of the current procedural regulations, (iii) request the Public Prosecutor’s Office to require the competent judge to resolve the suspension of execution of any transaction, (iv) request the Public Prosecutor’s Office to require search warrants it deems useful for the investigation, (v) request the Public Ministry to manage all the legal means necessary to obtain information from any source or origin, and (vi) apply sanctions.

The anti-money laundering framework in Argentina also assigns information and control duties to certain private sector entities, such as banks, non-profit organizations, stock exchanges, and insurance companies, including the Central Bank. These regulations apply to many Argentine companies, including us. These obligations consist mainly of: (i) maintaining internal policies and procedures for money laundering prevention and financing of terrorism, including “know your client” procedures, as appropriate; (ii) reporting suspicious activity; and (iii) acting according to the Anti-Money Laundering Law with respect to the confidentiality of the information obtained from the clients. For that purpose, each entity involved must appoint an officer responsible for the monitoring and control under the Anti-Money Laundering Law.

As part of a more comprehensive modification of the rules that govern the scope of supervision of CNV, derived from the enactment of the revised Capital Markets Law and the CNV Rules, which established a new regime for the public offer of securities, CNV issued a revision of its rules to incorporate a new chapter of Anti-Money Laundering Laws including provisions related to the fulfillment of duties to be complied by “Agentes de Negociación,” “Agentes de Liquidación y Compensación,” “Agentes de Distribución y Colocación” and “Agentes de Administración de Productos de Inversión Colectiva,” each of which is considered mandatory under the terms of sections 4, 5 and 22 of article 20 of Law No. 25,246. Such agents are required to comply with Law No. 25,246 and its amendments, regulations enacted by UIF, including executive orders with reference to the decisions adopted by the United Nations Security Council in the fight against terrorism and to comply with the resolutions issued by the Ministry of Foreign Affairs, International Trade and Religion. Furthermore, “Agentes de Custodia de Productos de Inversión Colectiva (Sociedades Depositarias de Fondos Comunes de Inversión),” “Agentes de corretaje,” “Agentes de depósito colectivo” and listed companies with respect to contribution, irrevocable contributions or indebtedness made by a shareholder or a third person to become a shareholder in the future, are also reached by the resolution.

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Each of these entities must send by internet (through the online application of CNV) their tax identification number. Additionally, in case of companies, the personal data of the “Compliance Officer” (both regular and alternate) must also be disclosed.

The CNV Rules provide that entities it regulates may only take action relating to public offerings of securities, stipulated, future or optional contracts of any nature and other instruments and financial products with registered, domiciled or domestic counterparties known to CNV or foreign counterparties in jurisdictions included on the list of cooperating countries provided in article 2º, subsection b) of Decree No. 589/2013.

Where a counterparty is not included in the referred list and is from a jurisdiction where it is regulated by an entity similar to CNV, validity of the transactions will be granted if the foreign regulator has signed a memorandum of understanding, cooperation and exchange of information with the CNV.

With the purpose of strengthening the requirements applicable to the grant of authorization to operate in the capital markets, additional requirements were established in connection with: (i) competence and capacity; (ii) moral integrity and honesty and (iii) solvency. Such requirements are subject to the appraisal of CNV and must be fulfilled by managers, directors, auditors and any other individual who performs duties or activities within the company.

Pursuant to Decree 360/2016 dated February 16, 2016, the Argentine government created the National Coordination Program for Combating Money Laundering and Terrorist Financing within the purview of the Ministry of Justice and Human Rights. Its purpose is to rearrange, coordinate and strengthen the anti-money laundering and anti-terrorist financing system at the national level, in light of the actual risks that could impact Argentina territory and the global requirements to be met under the scope of the obligations and international recommendations of the United Nations and FATF standards.

Moreover, Law No. 27,260, which introduced certain tax modifications and a new regime for residents to disclose undeclared assets, established that the UIF would now be within the purview of the Ministry of Economy and Finances. Nowadays, as a result of the reorganization of said ministry, the UIF depends on the Ministry of Finance. For its part, the UIF recently issued Resolution No. 4/2017, which requires certain specific due diligence procedures (commonly called “know your client”) to be performed when a national or foreign depositor opens a bank account for the purpose of investment.

On March 5, 2018, the UIF Resolution No. 21/2018 on guidelines for the management of risks of money laundering and financing of terrorism and on the minimum compliance to be adopted for the prevention of laundering was published in the Official Gazette. In line with UIF Resolution No. 30-E/17 addressed to the financial sector, UIF Resolution No. 21/2018 also moves from a formalistic compliance approach to a risk-based approach, in order to ensure that the measures implemented are commensurate with the risks identified. In this way, the obligated subjects must identify and evaluate their risks and, depending on this, adopt management and mitigation measures. In this framework, they are enabled to implement accredited technological platforms that allow carrying out procedures at a distance, without personal display of the documentation, without this conditioning the fulfillment of due diligence duties.

Likewise, it is reported that in August 2018, in accordance with Resolution No. 97/2018 of the UIF, the regulation of the Central Bank’s duty of cooperation with the UIF was approved to adapt said regulation to Resolution No. 30-E/2017.

In November 2018, the UIF published Resolution No. 134/2018, modified by Resolution No. 15/2019, which updates the list of people who should be considered “politically exposed” (PEP) in Argentina, considering the functions they perform or have performed, as well as its closeness or affinity relationship with third parties that perform or have performed in such functions.

On December 26, 2018, the UIF published Resolution No. 154/2018, which modified the current supervisory procedures through new adapted designs and in accordance with the international standards promoted by the FATF based on the risks. As a consequence, the UIF approved the “Risk-based supervision procedures of the Financial Information Unit”, which repeals the provisions of Annexes II, III and IV of UIF Resolution No. 104/2010, Article 7 and provisions of Annexes V and VI of UIF Resolution No. 165/2011 and Annex III of UIF Resolution No. 229/2014.

F. Taxation

United States Taxation

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The following summary describes the material United States federal income tax consequences of the ownership of common shares and GDSs as of the date hereof. The discussion set forth below is applicable to U.S. Holders (as defined below). Except where noted, this discussion deals only with U.S. Holders that hold the common shares or GDSs as capital assets. This summary does not represent a detailed description of the United States federal income tax consequences applicable to you if you are subject to special treatment under the United States federal income tax laws, including if you are:

| · | a bank;
| · | a dealer in securities or currencies;
| · | a financial institution;
| · | a regulated investment company;
| · | a real estate investment trust;
| · | an insurance company;
| · | a tax-exempt organization;
| · | a person holding the common shares or GDSs as part of a hedging, integrated or conversion transaction, constructive sale or straddle;
| · | a trader in securities that has elected the mark-to-market method of accounting for your securities;
| · | a person liable for alternative minimum tax;
| · | a person who owns or is deemed to own 10% or more of our stock (by vote or value);
| · | a person required to accelerate the recognition of any item of gross income with respect to common shares or GDSs as a result of such income being recognized on an applicable financial statement;
| · | a partnership or other pass-through entity for United States federal income tax purposes; or
| · | a person whose “functional currency” is not the U.S. dollar.

Furthermore, the discussion below is based upon the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), and regulations, rulings and judicial decisions thereunder as of the date hereof, and such authorities may be repealed, revoked or modified so as to result in United States federal income tax consequences different from those discussed below. This summary does not contain a detailed description of all the United States federal income tax consequences to you in light of your particular circumstances and does not address the Medicare tax on net investment income, United States federal estate and gift taxes or the effects of any state, local or non-United States tax laws. In addition, this summary is based, in part, upon representations made by the GDS Depositary to us and assumes that the deposit agreement governing the GDSs, and all other related agreements, will be performed in accordance with their terms.

As used herein, the term “U.S. Holder” means a beneficial owner of common shares or GDSs that is for United States federal income tax purposes:

| · | an individual citizen or resident of the United States;
| · | a corporation created or organized in or under the laws of the United States, any state thereof or the District of Columbia;
| · | an estate the income of which is subject to United States Federal income taxation regardless of its source; or
| · | a trust if it (1) is subject to the primary supervision of a court within the United States and one or more United States persons have the authority to control all substantial decisions of the trust or (2) has a valid election in effect under applicable United States Treasury regulations to be treated as a United States person.

If a partnership holds common shares or GDSs, the tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. If you are a partner of a partnership holding common shares or GDSs, you should consult your tax advisors.

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YOU SHOULD CONSULT YOUR OWN TAX ADVISOR CONCERNING THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES TO YOU OF THE OWNERSHIP OF COMMON SHARES OR GDSS AS WELL AS ANY CONSEQUENCES ARISING UNDER OTHER UNITED STATES FEDERAL TAX LAWS AND THE LAWS OF ANY OTHER TAXING JURISDICTION.

GDSs

If you hold GDSs, for United States federal income tax purposes, you generally will be treated as the owner of the underlying common shares that are represented by such GDSs. Accordingly, deposits or withdrawals of common shares for GDSs by U.S. Holders will not be subject to United States federal income tax.

Distributions on Common Shares or GDSs

Subject to the discussion under “-Passive Foreign Investment Company” below, the gross amount of distributions on our common shares or GDSs (including amounts withheld to reflect Argentine withholding taxes, if any) will be taxable as dividends to the extent paid out of our current or accumulated earnings and profits, as determined under United States federal income tax principles. Such dividends will be includable in your gross income as ordinary income on the day actually or constructively received by you, in the case of our common shares, or by the GDS Depositary, in the case of our GDSs. Such dividends will not be eligible for the dividends received deduction allowed to corporations under the Code.

With respect to United States non-corporate investors, certain dividends received from a qualified foreign corporation may be subject to reduced rates of taxation. A foreign corporation is treated as a qualified foreign corporation with respect to dividends received from that corporation on common shares (or GDSs representing such common shares) that are readily tradable on an established securities market in the United States. United States Treasury Department guidance indicates that our GDSs (which are listed on the NYSE), but not our common shares, are readily tradable on an established securities market in the United States. Thus, we do not believe that dividends that we pay on our common shares that are not represented by GDSs currently meet the conditions required for these reduced tax rates. Non-corporate holders that do not meet a minimum holding period requirement during which they are not protected from the risk of loss or that elect to treat the dividend income as “investment income” pursuant to Section 163(d)(4) of the Code will not be eligible for the reduced rates of taxation regardless of our status as a qualified foreign corporation. In addition, the rate reduction will not apply to dividends if the recipient of a dividend is obligated to make related payments with respect to positions in substantially similar or related property. This disallowance applies even if the minimum holding period has been met. Non-corporate U.S. Holders should consult their own tax advisors regarding the application of these rules given their particular circumstances.

The amount of any dividend paid in pesos will equal the U.S. dollar value of the pesos received calculated by reference to the exchange rate in effect on the date the dividend is actually or constructively received by you, in the case of our common shares, or by the GDS Depositary, in the case of our GDSs, regardless of whether the pesos are converted into U.S. dollars. If the pesos received as a dividend are not converted into U.S. dollars on the date of receipt, you will have a tax basis in the pesos equal to their U.S. dollar value on the date of receipt. Any gain or loss realized on a subsequent conversion or other disposition of the pesos will be treated as United States source ordinary income or loss.

Subject to certain complex conditions and limitations, Argentine withholding taxes on dividends, if any, may be treated as foreign taxes eligible for credit against your United States federal income tax liability. For purposes of calculating the foreign tax credit, dividends paid on our common shares or GDSs will be treated as income from sources outside the United States and will generally constitute passive category income. If you do not elect to claim a credit for any foreign taxes paid during a taxable year, you may instead claim a deduction in respect of such foreign taxes. Further, in certain circumstances, if you have held our common shares or GDSs for less than a specified minimum period during which you are not protected from risk of loss, or are obligated to make payments related to the dividends, you will not be allowed a foreign tax credit for foreign taxes imposed on dividends paid on our common shares or GDSs. The rules governing the foreign tax credit are complex. You are urged to consult your tax advisors regarding the availability of the foreign tax credit under your particular circumstances.

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To the extent that the amount of any distribution (including amounts withheld to reflect Argentine withholding taxes, if any) exceeds our current and accumulated earnings and profits for a taxable year, as determined under United States federal income tax principles, the distribution will first be treated as a tax-free return of capital, causing a reduction in the adjusted basis of our common shares or GDSs, and thereafter as capital gain recognized on a sale or exchange (as discussed below under “-Taxation of Capital Gains”). However, we do not expect to keep earnings and profits in accordance with United States federal income tax principles. Therefore, you should expect that a distribution will generally be treated as a dividend (as discussed above).

Distributions of our common shares that are received as part of a pro rata distribution to all of our shareholders generally will not be subject to United States federal income taxes.

Passive Foreign Investment Company

Based on the past and projected composition of our income and assets and the valuation of our assets, including goodwill, we do not believe we were a PFIC for United States federal income tax purposes for the taxable year ending June 30, 2021, and we do not currently expect to become a PFIC, although there can be no assurance in this regard. The determination of whether we are a PFIC is made annually. Accordingly, it is possible that we may be a PFIC in the current or any future taxable year due to changes in our asset or income composition or if our projections are not accurate. The volatility and instability of Argentina’s economic and financial system may substantially affect the composition of our income and assets and the accuracy of our projections. In addition, this determination is based on the interpretation of certain U.S. Treasury regulations relating to rental income, which regulations are potentially subject to differing interpretation.

In general, we will be a PFIC for any taxable year in which:

· | at least 75% of our gross income is passive income; or
· | at least 50% of the value (generally determined based on a quarterly average) of our assets is attributable to assets that produce or are held for the production of passive income.

For this purpose, cash is generally a passive asset and passive income generally includes dividends, interest, royalties, and rents (other than royalties and rents derived in the active conduct of a trade or business and not derived from a related person), annuities and gains from assets that produce passive income. If we own at least 25% by value of the stock of another corporation, we will be treated, for purposes of the PFIC tests, as owning our proportionate share of that other corporation’s assets and receiving our proportionate share of its income. If we are a PFIC for any taxable year during which you hold our common shares or GDSs, unless you make the mark-to-market election discussed below, you will be subject to special tax rules discussed below.

If we are a PFIC for any taxable year during which you hold our common shares or GDSs, you will be subject to special tax rules with respect to any “excess distributions” received and any gain realized from a sale or other disposition, including a pledge, of such common shares or GDSs. Distributions received in a taxable year that are greater than 125% of the average annual distributions received during the shorter of the three preceding taxable years or your holding period for the common shares or GDSs will be treated as excess distributions. Under these special tax rules:

| · | the excess distribution or gain will be allocated ratably over your holding period for the common shares or GDSs;
| · | the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we become a PFIC, will be treated as ordinary income; and
| · | the amount allocated to each other year will be subject to tax at the highest tax rate in effect for that year for individuals or corporations, as applicable, and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.

If we are a PFIC for any taxable year during which you hold our common shares or GDSs and any of our non- United States subsidiaries is also a PFIC, you would be treated as owning a proportionate amount (by value) of the common shares of the lower tier PFIC for purposes of the application of these rules. You are urged to consult your tax advisors about the application of the PFIC rules to any of our subsidiaries.

In addition, non-corporate U.S. Holders will not be eligible for reduced rates of taxation on any dividends received from us, if we are a PFIC in the taxable year in which such dividends are paid or in the preceding taxable year. You will generally be required to file Internal Revenue Service Form 8621 if you hold our common shares or GDSs in any year in which we are classified as a PFIC.

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In certain circumstances, in lieu of being subject to the excess distribution rules discussed above, you may make an election to include gain on the stock of a PFIC as ordinary income under a mark-to-market method, provided that such stock is regularly traded on a qualified exchange. Under current law, the mark-to-market election is only available for stock traded on certain designated United States exchanges and foreign exchanges which meet certain trading, listing, financial disclosure and other requirements to be treated as a qualified exchange under applicable United States Treasury regulations. Our common shares are listed on the ByMA, which must meet the trading, listing, financial disclosure and other requirements under applicable United States Treasury regulations for purposes of the mark-to-market election, and no assurance can be given that the common shares are or will be “regularly traded” for purposes of the mark-to-market election. Our GDSs are currently listed on the NYSE, which constitutes a qualified exchange under the United States Treasury regulations, although there can be no assurance that the GDSs are or will be “regularly traded.”

If you make an effective mark-to-market election, you will include in ordinary income each year that we are a PFIC the excess, if any, of the fair market value of our common shares or GDSs at the end of the year over your adjusted tax basis in our common shares or GDSs. You will be entitled to deduct as an ordinary loss in each such year the excess, if any, of your adjusted tax basis in our common shares or GDSs over their fair market value at the end of the year, but only to the extent of the net amount previously included in income as a result of the mark-to-market election. Any gain or loss on the sale of the common shares or GDSs in a year that we are a PFIC will be ordinary income or loss, except that such loss will be ordinary loss only to the extent of the previously included net mark-to-market gain.

Your adjusted tax basis in our common shares or GDSs will be increased by the amount of any income inclusion and decreased by the amount of any deductions under the mark-to-market rules. If you make a mark-to market election, it will be effective for the taxable year for which the election is made and all subsequent taxable years unless our common shares or GDSs are no longer regularly traded on a qualified exchange or the Internal Revenue Service consents to the revocation of the election. Mark-to-market inclusions and deductions will be suspended during taxable years in which we are not a PFIC, but would resume if we subsequently become a PFIC. You are urged to consult your tax advisors about the availability of the mark-to-market election, and whether making the election would be advisable in your particular circumstances.

In some cases, holders of common shares or GDSs in a PFIC may be able to avoid the rules described above by electing to treat the PFIC as a “qualified electing fund” under Section 1295 of the Code. This option will not be available to you because we do not intend to comply with certain calculation and reporting requirements necessary to permit you to make this election.

You are urged to consult your tax advisors concerning the United States federal income tax consequences of holding our common shares or GDSs if we are considered a PFIC in any taxable year.

Taxation of Capital Gains

Subject to the discussion under “-Passive Foreign Investment Company” above, for United States federal income tax purposes, you will generally recognize capital gain or loss on any sale, exchange, or other taxable disposition of our common shares or GDSs in an amount equal to the difference between the U.S. dollar value of the amount realized for the common shares or GDSs and your tax basis in the common shares or GDSs determined in U.S. dollars. Capital gains of non-corporate U.S. Holders derived with respect to capital assets held for more than one year are eligible for reduced rates of taxation. The deductibility of capital losses is subject to limitations under the Code. Any gain or loss recognized by you will generally be treated as United States source gain or loss for United States foreign tax credit purposes. Consequently, you may not be able to use the foreign tax credit arising from any Argentine tax imposed on the disposition of our common shares or GDSs unless such credit can be applied (subject to applicable limitations) against tax due on other income treated as derived from foreign sources.

Argentine Personal Assets Tax

Amounts paid on account of the Argentine Tax on Personal Assets, if any, will not be eligible as a credit against your United States federal income tax liability, but may be deductible subject to applicable limitations in the Code.

Information Reporting and Backup Withholding

In general, information reporting will apply to dividends in respect of our common shares or GDSs and the proceeds from the sale, exchange or other disposition of our common shares or GDSs that are paid to you within the United States (and in certain cases, outside the United States), unless you are an exempt recipient. A backup withholding tax may apply to such payments if you fail to provide a correct taxpayer identification number or certification of exempt status or fail to report in full dividend and interest income.

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Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against your United States federal income tax liability provided the required information is timely furnished to the Internal Revenue Service.

Argentine Taxation

The following discussion is a summary of certain Argentine tax considerations associated with an investment in, ownership or disposition of, the common shares or the GDSs by (i) an individual holder that is resident in Argentina, (ii) an individual holder that is neither domiciled nor resident in Argentina, (iii) a legal entity organized under the laws of Argentina, (iv) a permanent establishment in Argentina of a foreign entity and (v) a legal entity that is not organized under the laws of Argentina, that does not have a permanent establishment in Argentina and is not otherwise doing business in Argentina on a regular basis. The discussion is for general information only and is based on current Argentine tax laws. Moreover, while this summary is considered to be a correct interpretation of existing laws in force as of the date of this filing, no assurance can be given that the courts or administrative authorities responsible for the administration of such laws will agree with this interpretation or that changes in such laws or interpretations will not occur.

PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR OWN TAX ADVISOR REGARDING THE PARTICULAR TAX CONSEQUENCES ARISING UNDER ANY TAXING JURISDICTION.

Income Tax

Law No. 27,430, enacted on December 27, 2017 and published in the Official Gazette on December 29, 2017, had introduced several amendments to Income Tax Law No. 20,628, among others, a corporate tax rate reduction in two phases. For fiscal years beginning on or after January 1, 2018 until December 31, 2019, there had been a reduction of the tax rate from 35% to 30%. Beginning on or after January 1, 2020 the tax rate would have been further reduced to 25%.Additionally, a withholding of 7% or 13% had been established for the fiscal years mentioned above, on the dividends distributed by local entities in favor of their shareholders provided they are resident individuals or undivided estates, or are foreign beneficiaries.

On June 16, 2021, Law 27,630 was enacted and published in the Official Gazette. This law increases corporate income tax rates for tax years beginning January 1, 2021 and onwards. The new law increases tax rates by replacing the fixed tax rate with a progressive tax scale. It also extends the 7% withholding tax rate currently in force to dividends from profits accrued in tax years beginning January 1, 2021, and thereafter.

Taxation of Dividends

Dividends distributions which source are profits generated in fiscal years beginning before January 1, 2018, whether in cash, in shares or in kind, are not subject to income tax withholding except for the application of the “Equalization Tax” described below.

An income tax withholding will be applied to the amount of dividends distributed in excess of a company’s net taxable income determined in accordance with general income tax regulations for the fiscal years preceding the date of the distribution of such dividends (the “Equalization Tax”). The legislation requires that companies withhold 35% of the amount of distributed dividends in excess of the net taxable income of such distribution, as determined in accordance with the Income Tax Law No. 20,628. Dividends distributed by an Argentine company are not subject to this tax to the extent that those dividends arise from dividend income or other distributions received by such company from other Argentine companies.

Dividend distributions made in kind (other than cash) will be subject to the same tax rules as cash dividends. Stock dividends on fully paid shares are not subject to Equalization Tax.

Equalization Tax will not be applicable on profits generated from fiscal years beginning on or after January 1, 2018.

Dividends distributions, other than stock dividends, which source are profits generated in fiscal years beginning on or after January 1, 2018, whether in cash, in shares or in kind, made by local entities to resident individuals, resident undivided estates and foreign beneficiaries are subject to a withholding tax at a rate of 7%.

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Certain tax treaties contemplate the application of a ceiling tax rate on dividends (i.e. 10% on gross dividends).

Taxation of Capital Gains

Resident individuals

Capital gains obtained by resident individuals or undivided estates situated in Argentina from the sale or disposition of common shares and other securities are subject to income tax at a 15% rate on net income, unless such securities were traded in stock exchange under the supervision of the CNV, in which case an exemption applies.

Losses arising from the sale, exchange or other disposition of common shares or GDSs can be applied only to offset such capital gains arising from the sale, exchange or other disposition of these securities, for a five year carryover period.

Foreign beneficiaries

Capital gains of Argentine source (as it is the case of both IRSA’s GDSs and shares) obtained by non-Argentine individuals or non-Argentine entities from the sale, exchange or other disposition of shares are subject to income tax at a 15% rate on the net capital gain or at a 13.5% rate on the gross price at the seller’s election. Notwithstanding, Law No. 27,430 established an exemption for foreign beneficiaries participating in the sale of publicly traded shares traded in stock exchanges under the supervision of the CNV. Said Law also established an exemption for capital gains derived from the sale, exchange or other disposition of share certificates issued abroad that represent shares issued by Argentine companies (i.e. GDRs). The exemptions will apply only if the foreign beneficiaries do not reside in, and the funds do not arise from, “non-cooperating” jurisdictions for tax transparency purposes.

The sale of an equity interest in a foreign entity could represent a taxable indirect transfer of Argentine assets (including shares), if (i) the value of the Argentine assets exceed 30% of the transaction’s overall value, and (ii) the equity interest sold (in the foreign entity) exceeds 10%. The tax will also be due if any of these thresholds were met during the twelve month period prior to the sale.

The applicable rate is generally 15% on the net capital gain or at a 13.5% rate on the gross price at the seller’s election, of the proportional value that corresponds to the Argentine assets.

The indirect transfer of Argentine assets within the same economic group would also not trigger taxation, provided the requirements set by regulations have been met.

Argentine entities

Capital gains obtained in tax years beginning from January 1, 2021 by Argentine entities (in general entities organized or incorporated under Argentine law, certain traders and intermediaries, local branches of non-Argentine entities, sole proprietorships and individuals carrying on certain commercial activities in Argentina) derived from the sale, exchange or other disposition of shares or GDSs are subject to the following tiered structure of corporate income tax rates for different brackets of earnings:

Annual taxable income (ARS) |  | Tax due on lower limit (ARS) |  | Marginal rate on the excess of the lower limit |
0 to 5 million |  | ARS 0 |  |  | 25 | %
Over 5 million to 50 million |  | ARS 1.25 million |  |  | 30 | %
Over 50 million |  | ARS 14.75 million |  |  | 35 | %

Losses arising from the sale, exchange or other disposition of shares or GDSs can be applied only to offset such capital gains arising from the sale, exchange or other disposition of these securities, for a five-year carryover period.

WE RECOMMEND PROSPECTIVE INVESTORS TO CONSULT THEIR OWN TAX ADVISOR REGARDING THE PARTICULAR TAX CONSEQUENCES CONCERNING THE SALE OR OTHER DISPOSITIONS OF SHARES AND GDSs.

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Value Added Tax

The sale, exchange, disposition, or transfer of common shares or GDSs is not subject to value added tax. Dividend distributions are not levied with value added tax either.

Tax on Personal Assets

Argentine entities, such as us, have to pay the Tax on Personal Assets (“TAP”) corresponding to Argentine and foreign individuals and foreign entities for the holding of our shares at December 31 of each year. The applicable tax rate is 0.50% for fiscal years starting in 2019, inclusive. The tax is levied on the proportional net worth value (“valor patrimonial proporcional” in Spanish), or the book value, of the shares arising from the last balance sheet of the Argentine entity calculated under Argentine GAAP. Pursuant to the TAP Law, the Argentine company is entitled to seek reimbursement of such paid tax from the applicable Argentine domiciled individuals and/or foreign domiciled shareholders.

Turnover Tax

The gross turnover tax is a local tax; therefore, the rules of the relevant provincial jurisdiction should be considered, which may levy this tax on the purchase and sale, exchange or other disposition of common shares or GDSs, and/or the collection of dividends at an average rate between 6% and 10%, unless an exemption is applicable. In the particular case of the City of Buenos Aires, any transaction involving common shares and/or the collection of dividends and revaluations is exempt from this tax.

To date, there is no withholding regime provided for foreign holders of common shares and GDSs.

Stamp Tax

Stamp taxes may apply in the City of Buenos Aires and in certain Argentine provinces in case transfer of common shares or GDSs is performed or executed in such jurisdictions by means of written agreements.

Other Taxes

There are no Argentine federal inheritance or succession taxes applicable to the ownership, transfer or disposition of our common shares or GDSs. The province of Buenos Aires established a tax on free transmission of assets, including inheritance, legacies, donations, etc. Free transmission of our shares could be subject to this tax at rates that vary from 1.6% to 8.8%, depending on the value of the transferred assets and the relationship between the transferor and the transferee.

In the case of litigation regarding the shares before a court of the City of Buenos Aires, a 3% court fee would be charged, calculated on the basis of the claim.

Tax treaties

Argentina has signed tax treaties for the avoidance of double taxation currently in force with Australia, Belgium, Bolivia, Brazil, Canada, Chile, Denmark, Finland, France, Germany, Italy, Mexico, the Netherlands, Norway, Qatar, Russia, Spain, Sweden, Switzerland the United Kingdom and Uruguay. There is currently no tax treaty or convention in effect between Argentina and the United States. It is not clear when, if ever, a treaty will be ratified or entered into effect. As a result, the Argentine tax consequences described in this section will apply, without modification, to a holder of our common shares or GDSs that is a U.S. resident. Foreign shareholders located in certain jurisdictions with a tax treaty in force with Argentina may be (i) exempted from the payment of the personal assets tax and (ii) entitled to apply for reduced withholding tax rates on payments to be made by Argentine parties.

G. Dividends and Paying Agents

This Section is not applicable.

H. Statement by Experts

This section is not applicable.

I. Documents on display

We file annual, quarterly and other information with the SEC. You may read and copy any document that we file at the public reference rooms of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549; and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and www.sec.gov. You may obtain information on the operation of the Public Reference Rooms by calling the SEC at 1-800-SEC-0330. Our Internet address is http://www.irsa.com.ar. It should be noted that nothing on our website should be considered part of this Annual Report. You may request a copy of these filings at no cost, by writing or calling our offices, Bolivar 108, (C1066AAB) City of Buenos Aires, Argentina. Our telephone number is +54-11-4323-7400.

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J. Subsidiary Information

This section is not applicable.

ITEM 11. Quantitative and Qualitative Disclosures About Market Risk

In the normal course of business, we are exposed to foreign exchange risk, interest rate risks and other price risk, primarily related to changes in exchange rates and interest rates. We manage our exposure to these risks through the use of various financial instruments, none of which are entered into for trading purposes. We have established policies and procedures governing the use of financial instruments, specifically as they relate to the type and volume of such financial instruments. For further information on our market risks, please see Note 5 to our Audited Consolidated Financial Statements.

ITEM 12. Description of Securities Other than Equity Securities

A. Debt Securities

This item is not applicable

B. Warrants and Rights

This item is not applicable

C. Other Securities

This item is not applicable

D. American Depositary Shares

The Bank of New York Mellon, as depositary for the GDSs (the “Depositary”) collects its fees for delivery directly from investors depositing shares or surrendering GDSs for the purpose of withdrawal. The Depositary also collects taxes and governmental charges from the holders of GDSs. The Depositary collects these fees and charges by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees (after attempting by reasonable means to notify the holder prior to such sale).

The Depositary has agreed to reimburse or pay on our behalf, certain reasonable expenses related to our GDS program and incurred by us in connection with the program (such as NASDAQ listing fees, legal and accounting fees incurred with preparation of Form 20-F and ongoing SEC compliance and listing requirements, distribution of proxy materials, investor relations expenses, etc).

The amounts the Depositary reimbursed or paid are not perforce related to the fees collected by the depositary from GDSs holders.

We agree to pay the fees, reasonable expenses and out-of-pocket charges of the Depositary and those of any registrar only in accordance with agreements in writing entered into between the Depositary and the Company from time to time. The Depositary shall present its statement for such charges and expenses to the Company once every three months. The charges and expenses of the custodian are for the sole account of the Depositary.

The following charges shall be incurred by any party depositing or withdrawing common shares or by any party surrendering receipts or to whom receipts are issued (including, without limitation, issuance pursuant to a stock dividend or stock split declared by the Issuer or an exchange regarding the receipts or deposited securities or a distribution of receipts), whichever applicable: (1) taxes and other governmental charges, (2) such registration fees as may from time to time be in effect for the registration of transfers of common shares generally on our common share register or foreign registrar and applicable to transfers of common shares to the name of the Depositary or its nominee or the custodian or its nominee on the making of deposits or withdrawals hereunder, (3) such cable, telex and fax transmission expenses as are expressly provided in the deposit agreement, (4) such expenses as are incurred by the Depositary in the conversion of foreign currency (5) a fee of USD5.00 or less per 100 GDS (or portion), (6) a fee of USD0.02 or less per GDS (or portion) for any cash distribution made pursuant to the deposit agreement, and (7) a fee for the distribution of securities, such fee being in an amount equal to the fee for the excecution and delivery of GDS referred to above which would have been charged as a result of the deposit of such securities, but wich securities are instead distributed by the Depositary to owners.

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PART II

ITEM 13. Defaults, Dividend Arrearages and Delinquencies

This item is not applicable.

ITEM 14. Material Modifications to the Rights of Security Holders and Use of Proceeds

A. Fair Price Provision

At our annual meeting held on October 30, 2000, our shareholders approved an amendment to our bylaws which included the adoption of a fair price provision (the “Fair Price Provision”). On March 8, 2002 our shareholders decided to make a new amendment to Article Nine of our bylaws including, among others, an increase in the minimum percentage of capital obliged to comply with the Fair Price Provision, from twenty percent (20%) to thirty five percent (35%), according to Decree No. 677/2001. On October 10, 2007, our shareholders decided to make a new amendment to Article Nine of our bylaws, to include the control concept under Decree No. 677/2001, which provides for the effective control regularly held in addition to the legal control.

The following description is a summary of the main provisions of the Fair Price Provision, which constitutes Article Nine of our bylaws and does not contain a description of all of the terms of the Fair Price Provision. The Fair Price Provision prohibits a party seeking to acquire, directly or indirectly, either control or (together with such party’s other holdings) thirty five percent (35%) or more of our capital stock without complying with the procedural and price requirements described below. Acquisitions made in violation of the Fair Price Provision are deemed ineffective against us and will not be registered in our share registry. Common shares acquired in violation of the Fair Price Provision shall have no voting or equity rights until the Fair Price Provision has been complied with. The Fair Price Provision applies to transactions involving shares of our common stock and any securities convertible in shares of our common stock, including, without limitation, convertible debentures and bonds and our GDRs. The Fair Price Provision excludes certain acquisitions of common shares in certain limited circumstances.

The Fair Price Provision provides that a party seeking to acquire, directly or indirectly, control of our company or thirty five percent (35%) or more of our capital stock shall be required to make a public tender offer for all of the outstanding common stock of us and any shares of common stock into which outstanding securities of ourcompany are presently convertible or exchangeable in accordance with the procedural and price terms of the Fair Price Provision and in accordance with applicable law. For purposes of the thirty five percent threshold contained in the Fair Price Provision parties acting in concert or which are under common control or administration are deemed a single party.

There are cases excluded from the tender offer requirements:

| · | acquisitions by existing shareholders or by those exercising control over shares or convertible securities in accordance with CNV Rules; and
| · | holdings of more than 35%, which derive from the distribution of common shares or dividends paid in shares approved by the shareholders, or the issuance of common shares as a result of a merger approved by the shareholders; in both cases, the excess holding shall be disposed of within 180 days of its registration in the relevant shareholder’s account, or prior to the holding of our shareholders meeting, whatever occurs first.

The Fair Price Provision requires the offering party to notify use of the tender offer simultaneously with its filing of the public tender offer with the Comisión Nacional de Valores. The notice to us is required to set forth all of the terms and conditions of any agreement that the offering party has made with any other of our shareholders with respect to the proposed transaction and to provide, among other things, the following information:

| · | the identity and nationality of the offering party and, in the event the offer is made by a group, the identity of each member of the group;
| · | the terms and conditions of the offering, including the price, the tender offer period and the requirements for accepting the tender offer;
| · | accounting documentation required by Argentine law relating to the offering party;
| · | details of all prior acquisitions by the offering party of common shares or securities convertible into shares of our capital stock.

We will distribute the information provided by the offering party to our shareholders.

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The CNV regulations require that transactions which cause a person’s holdings of capital stock of a registered Argentine company, to hold 5% or more of the voting power, should be immediately notified to the CNV. Thereafter, every change in the holdings that represents a multiple of 5% of the voting power should also be notified.

The Fair Price Provision requires that the consideration paid in the tender offer be paid in cash and that the price paid for each common share in the tender offer be the same and not less than the highest price per common share derived from the five following alternative valuation methods:

| · | the highest price per share of our common stock paid by the offering party, or on behalf of the offering party, for any acquisition of shares or convertible securities within the 2 years prior to the commencement of the tender offer;
| · | the highest closing selling price of a share of our common stock on the BASE during the thirty day period immediately preceding the commencement of the tender offer;
| · | the highest price resulting from the calculations made according to the provisions of (i) and (ii) above multiplied by a fraction the numerator of which is such highest price and the denominator of which is the lowest closing price of a share of our common stock on the BASE during the two-year period prior to the period referred to in sub-sections (i) or (ii), as applicable;
| · | our aggregate net earnings per common share during our preceding four completed fiscal quarters prior to the commencement of the tender offer, multiplied by our highest price to earnings ratio during the two-year period immediately preceding the commencement of the tender offer. Such multiples shall be determined considering the average closing selling price of our common stock in the BASE, and our aggregate net income from our preceding four completed fiscal quarters; and,
| · | the book value per share of our common stock at the time the tender offer is commenced, multiplied by the highest ratio determined by a fraction the numerator of which is the closing selling price of a share of our common stock on the BASE on each day during the two year period prior to the commencement of the tender offer and the denominator of which is the latest known book value per share of our common stock on each such date.

B. Limitations on the payment of dividends.

C. This section is not applicable.

D. This section is not applicable.

E. This section is not applicable.

ITEM 15. Controls and procedures

A. Disclosure Controls and Procedures.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial and Administrative Officer, to allow our management to make timely decisions regarding required disclosure. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objective. In connection with the preparation of this Annual Report on Form 20-F, we carried out an evaluation under the supervision and with the participation of members of our management team, including our Chief Executive Officer and Chief Financial and Administrative Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of June 30, 2021. Based upon this evaluation our Chief Executive Officer and Chief Financial and Administrative Officer concluded that our disclosure controls and procedures as of the end of the period covered by this Annual Report on Form 20-F were effective at the reasonable assurance level.

B. Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate Internal Control over Financial Reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). Our Internal Control over Financial Reporting includes a series of procedures designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Consolidated Financial Statements for external purposes, in accordance with International Financial Reporting Standards and includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets, (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of Consolidated Financial Statements in accordance with International Financial Reporting Standards and that a company’s receipts and expenditures are being made only in accordance with authorizations of our management and directors, and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our Consolidated Financial Statements.

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Because of its inherent limitations, Internal Control over Financial Reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies and procedures may deteriorate.

Management assessed the effectiveness of our Internal Control over Financial Reporting as of June 30, 2021. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013). Based on this evaluation, management concluded that our Internal Control over Financial Reporting was effective as of June 30, 2021.

C. Attestation Report of the Registered Public Accounting Firm

The effectiveness of the Company’s internal control over financial reporting as of June 30, 2021 has been audited by Price Waterhouse & Co S.R.L, Buenos Aires Argentina- member firm of PricewaterhouseCoopers International Limited, an independent registered public accounting firm, as stated in their report which appears herein.

D. Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during the fiscal year ended June 30, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 16. Reserved

ITEM 16. A. Audit Committee Financial Expert

Pursuant to the former applicable rules regarding the Capital Markets Law (formerly the Transparency Decree) and the applicable Rules of the CNV at such moment, our Board of Directors has established on May 2004 an Audit Committee. The main functions of the Audit Committee are to assist the Board of Directors in performing their duty of exercising due care, diligence and competence in issues relating to us, specifically in the enforcement of the accounting policy and in the issue of accounting and financial information, the management of business risk and of internal control systems, the conduct and ethical soundness of the company’s business, the supervision of the integrity of our financial statements, the compliance by our company with the legal provisions, the independence and capability of the independent auditor and the performance of the internal audit function of our company and of the external auditors. Also, according to the applicable regulations, we may request to our Audit Committee to render its opinion in certain transactions, and its conditions, as is the case of related party transactions, as may be reasonably considered adequate according to normal market conditions.

As of December 12, 2019, our Board of Directors appointed the members of the Audit Committee which are Oscar Pedro Bergotto, Liliana Luisa De Nadai and Maria Julia Bearzi, all of them as independent members. María Julia Bearzi is the financial expert in accordance with the relevant SEC rules. We have a fully independent Audit Committee as per the standard provided in Rule 10 (A)-3(B) (1).

ITEM 16. B. Code of Ethics

We have adopted a code of ethics that applies to our directors, officers and employees. Our code of ethics is posted in our website www.irsa.com.ar. On July 25, 2005, our Code of Ethics was amended by our Board of Directors. The amendment was reported in a report on Form 6-K on August 1, 2005.

If we make any substantive amendment to the code of ethics or grant any waivers, including any implicit waiver to any of its provision we will disclose the nature of such amendment or waiver in a report on Form 6-K or in our next Annual Report and we will post it in our website.

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ITEM 16. C. Principal Accountant Fees and Services

Audit Fees

During the fiscal years ended June 30, 2021 and 2020, we were billed a total amount of ARS 38.0 million and ARS 51.6 million respectively in the Operation Center in Argentina and NIS 0.1 million and NIS 6.8 million for the fiscal years 2021 and 2020 respectively, in the Operation Center in Israel, for professional services rendered by our principal accountants for the audit of our annual Audited Consolidated Financial Statements, performance of the audit of internal controls over financial reporting of the company and other services normally provided in connection with regulatory filings or engagements.

Audit-Related Fees

During the fiscal year ended June 30, 2021 and 2020 we were billed a total amount of ARS 17.2 million and ARS 12.4 million in the Operation Center in Argentina for professional services rendered by our principal accountants

Tax Fees

During the fiscal years ended June 30, 2021 and 2020, we were billed a total amount of ARS 0 and ARS 0.2 million, respectively, in the Operation Center in Argentina and a total amount of NIS 0.3 million in the Operation Center in Israel, for professional services rendered by our principal accountants for tax compliance, tax advice and tax planning.

All Other Fees

During the fiscal year ended June 30, 2021 and June 30, 2020 we were billed for professional services rendered by our principal accountants a total amount of ARS 0 million and ARS 12.8 million, respectively in the Operations Center in Argentina and NIS 0 and NIS 0.5 million, in the Operation Center in Israel.

Audit Committee Pre-Approval Policies and Procedures

Audit Committee pre-approves all services and fees provided by the external auditors to ensure auditors’ independence. One of the main tasks of the Audit Committee is to give it opinion in relation to the appointment of the external auditors, proposed by the Board of Directors to the General Shareholder’s Meeting. In order to accomplish such task, the Audit Committee shall:

| · | Require any additional and complementary documentation related to this analysis.
| · | Verify the independence of the external auditors;
| · | Analyze different kinds of services that the external auditor would provide to the company. This description must also include an estimate of the fees payable for such services, specifically in order to maintain the principle of independence;
| · | Inform the fees billed by the external auditor, separating the services related to the audit services and other special services that could be not included in the audit services previously mentioned.
| · | Analyze and supervise the working plan of the external auditors considering the business’ reality and the estimated risks;
| · | Propose adjustments (if necessary) to such working plan;
| · | Hold meetings with the external auditors in order to: (a) analyze the difficulties, results and conclusions of the proposed working plan; (b) analyze eventual possible conflicts of interests, related party transactions, compliance with the legal framework and information transparency; and
| · | Evaluate the performance of external auditors and their opinion regarding our Financial Statements.

ITEM 16. D. Exemption from the Listing Standards for Audit Committees

This section is not applicable.

ITEM 16. E. Purchase of Equity Securities by the Issuer and its Affiliates

This section is not applicable.

ITEM 16. F. Change in Registrant’s Certifying Accountant

This section is not applicable.

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ITEM 16. G. Corporate Governance

Compliance with NYSE listing standards on corporate governance

NYSE and Argentine Corporate Governance Requirements

Our corporate governance practices are governed by the applicable Argentine law; particularly, the Argentine Corporation Law, Capital Markets Law Nº 26,831 and CNV Rules, as well as by our bylaws. We have securities that are registered with the Securities and Exchange Commission and are NYSE, and is therefore subject to corporate governance requirements applicable to NYSE-listed non-U.S. companies (a “NYSE-listed” company).

NYSE-listed non-U.S. companies that are categorized as “Foreign Private Issuers” may, in general, follow their home country corporate governance practices in lieu of most of the new NYSE corporate governance requirements (the “NYSE Sections”) codified in Section 303A of the NYSE’s Listed Company Manual. However, Foreign Private Issuers must comply with NYSE Sections 303A.06, 303A.11 and 303A.12(b) and 303A.12(c). Foreign Private Issuers must comply with Section 303A.06 prior to July 31, 2005 and with Sections 303A.11 and 303A.12(b) prior to the first annual meeting of shareholders held after January 15, 2004, or by October 31, 2004.

NYSE Section 303A.11 requires that Foreign Private Issuers disclose any significant ways in which their corporate governance practices differ from U.S. companies under NYSE standards. A Foreign Private Issuer is simply required to provide a brief, general summary of such significant differences to its U.S. investors either 1) on the company’s website (in English) or 2) in Form 20-F as distributed to their U.S. investors. In order to comply with Section 303A.11, we have prepared and have updated the comparison in the table below.

The most relevant differences between our corporate governance practices and NYSE standards for listed companies are as follows:

NYSE Standards for U.S. companies Listed Companies Manual Section 303.A |  | IRSA’s Corporate Practices |
Section 303A.01 A NYSE-listed company must have a majority of independent directors on its Board of Directors. |  | We follow Argentine law which does not require that a majority of the Board of Directors be comprised of independent directors. Argentine law instead requires that public companies in Argentina have a sufficient number of independent directors to be able to form an Audit Committee of at least three members, the majority of which must be independent pursuant to the criteria established by CNV Rules.
Section 303A.02 This section establishes general standards to evaluate directors’ independence (no director qualifies as “independent” unless the Board of Directors affirmatively determines that the director has no material relationship with the listed company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the company)), and emphasizes that the concern is independence from management. The board is also required to express an opinion with regard to the independence or lack of independence, on a case by case basis, of each individual director. |  | CNV standards (former General Resolution No. 400 and now General Resolution 622/2013, as amended) for purposes of identifying an independent director are substantially similar to NYSE’s standards. CNV standards provide that independence is required with respect to the company itself and to its shareholders with direct or indirect material holdings (35% or more). To qualify as an independent director, such person must not perform executive functions within the company. Close relatives of any persons who would not qualify as “independent directors” shall also not be considered “independent.” When directors are appointed, each shareholder that nominates a director is required to report at the meeting whether or not such director is independent.
Section 303A.03 Non-management directors must meet at regularly scheduled executive meetings not attended by management. |  | Neither Argentine law nor our by-laws require that any such meetings be held. Our Board of Directors as a whole is responsible for monitoring the company’s affairs. In addition, under Argentine law, the Board of Directors may approve the delegation of specific responsibilities to designated directors or non-director managers of a company. Also, it is mandatory for public companies to form a supervisory committee (composed of syndics) which is responsible for monitoring legal compliance by a company under Argentine law and compliance with its by-laws.
Section 303A.05(a) Listed companies shall have a “Compensation Committee” comprised entirely of independent directors. |  | Neither Argentine law nor our by-laws require the formation of a “Compensation Committee.” Under Argentine law, if the compensation of the members of the Board of Directors and the supervisory committee is not established in the by-laws of a company, it should be determined at the shareholders meeting.
Section 303A.05(b). The “Compensation Committee” shall have a written charter addressing the committee’s purpose and certain minimum responsibilities as set forth in Section 303A.05(b)(i) and (ii). |  | Neither Argentine law nor our by-laws require the formation of a “Compensation Committee.”
Section 303A.06 Listed companies must have an “Audit Committee” that satisfies the requirements of Rule 10 A-3 under the 1934 Exchange Act (the “Exchange Act”). Foreign private issuers must satisfy the requirements of Rule 10 A-3 under the Exchange Act as of July 31, 2005. |  | Pursuant to the Capital Markets Law and the CNV Rules, from May 27, 2004 we have appointed an “Audit Committee” composed of three of the members of the Board of Directors. Since December 21, 2005 all of its members are independent as per the criteria of Rule 10 A-3 under the Exchange Act.
Section 303A.07(a) The Audit Committee shall consist of at least three members. All of its members shall be financially literate or must acquire such financial knowledge within a reasonable period and at least one of its members shall have experience in accounting or financial administration. |  | In accordance with Argentine law, a public Company must have an Audit Committee with a minimum of three members of the Board of Directors, the majority of which shall be independent pursuant to the criteria established by the CNV. There is no requirement related to the financial expertise of the members of the Audit Committee. However, our Audit Committee has a financial expert. The committee creates its own written internal code that addresses among others: (i) its purpose; (ii) an annual performance evaluation of the committee; and (iii) its duties and responsibilities.

H. Mine Safety Disclosures

This section is not applicable.

I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

This section is not applicable.

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PART III

ITEM 17. Financial Statements

We have responded to Item 18 in lieu of responding to this Item.

ITEM 18. Financial Statements

Reference is made to pages F-1 through F-95

Index to Financial Statements (see page F-1).

ITEM 19. Exhibits

INDEX OF EXHIBITS

Exhibit No. |  | Description of Exhibit
1.1 (1) |  | Estatutos of the registrant, which serve as the registrant’s articles of incorporation and bylaws, and an English translation thereof.
1.2 (4) |  | English translation of the amendment to the bylaws.
1.3 (10) |  | Amended and restated English translation of the bylaws.
1.4 (14) |  | Amended and restated English translation of the bylaws.
1.5 (16) |  | Amended and restated English translation of the bylaws.
2.1 (1) |  | Form of Deposit Agreement among us, The Bank of New York, as Depositary, and the holders from time to time of American Depositary Receipts issued there under.
2.2 (1) |  | Shareholders Agreement, dated November 18, 1997, among IRSA International Limited, Parque Arauco S.A. and Sociedad Anónima Mercado de Abasto Proveedor (SAMAP).
2.3 (1) |  | Put Option Agreement dated November 17, 1997, among IRSA Inversiones y Representaciones Sociedad Anónima and GSEM/AP.
2.4 (1) |  | Offering Circular, dated March 24, 2000, regarding the issuance of ARS 85,000,000 of our 14.875% Notes due 2005.
2.5 (7) |  | Indenture, dated July 20, 2010, between us as Issuer, The Bank of New York Mellon as Trustee, Co-Registrar, Principal Paying Agent and Transfer Agent, and Banco Santander Río S.A. as Registrar, Paying Agent, Transfer Agent and Representative of the Trustee in Argentina, with respect to our USD400,000,000 Global Note Program, pursuant to which USD150,000,000 aggregate principal amount of our 11.500% Notes due 2020, Series No. 2, were issued.
2.6 (13) |  | First Supplemental Indenture, dated March 28, 2016, between us as Issuer and The Bank of New York Mellon as Trustee, Co-Registrar, Principal Paying Agent and Transfer Agent to the Indenture, dated July 20, 2010, between us as Issuer, The Bank of New York Mellon as Trustee, Co-Registrar, Principal Paying Agent and Transfer Agent, and Banco Santander Río S.A. as Registrar, Paying Agent, Transfer Agent and Representative of the Trustee in Argentina, with respect to our USD400,000,000 Global Note Program, pursuant to which USD150,000,000 aggregate principal amount of our 11.500% Notes due 2020, Series No. 2, were issued.
2.7 (13) |  | Indenture, dated March 23, 2016, between IRSA Propiedades Comerciales S.A. as Issuer, The Bank of New York Mellon as Trustee, Co-Registrar, Principal Paying Agent and Transfer Agent, and Banco Santander Río S.A. as Registrar, Paying Agent, Transfer Agent and Representative of the Trustee in Argentina, with respect to IRSA Propiedades Comerciales S.A.’s USD500,000,000 Global Note Program, pursuant to which USD360,000,000 aggregate principal amount of IRSA Propiedades Comerciales S.A.’s 8.750% Notes due 2023, Series No. 2, were issued.
2.8 (13) |  | First Supplemental Indenture, dated March 23, 2016, between IRSA Propiedades Comerciales S.A., as Issuer and The Bank of New York Mellon, as Trustee, Co-Registrar, Principal Paying Agent and Transfer Agent, The Bank of New York Mellon (Luxembourg) S.A., as Luxembourg Paying Agent and Luxembourg Transfer Agent and Banco Santander Río S.A., as Registrar, Paying Agent, Transfer Agent and Representative of the Trustee in Argentina to the Indenture, dated March 23, 2016, between IRSA Propiedades Comerciales S.A. as Issuer, The Bank of New York Mellon as Trustee, Co-Registrar, Principal Paying Agent and Transfer Agent, and Banco Santander Río S.A. as Registrar, Paying Agent, Transfer Agent and Representative of the Trustee in Argentina, with respect to IRSA Propiedades Comerciales S.A.’s USD500,000,000 Global Note Program, pursuant to which USD360,000,000 aggregate principal amount of IRSA Propiedades Comerciales S.A.’s 8.750% Notes due 2023, Series No. 2, were issued.
2.9 (18) |  | Warrant Agent Agreement dated as of April 29, 2021, between IRSA Inversiones y Representaciones Sociedad Anónima, and Computershare, Inc. and Computershare Trust Company N.A., collectively as warrant agent.
4.1 (2) |  | Agreement for the exchange of Corporate Service between us, IRSA and Cresud dated June 30, 2004.
4.2 (4) |  | English translation of the Amendment to the Agreement for the exchange of Corporate Service between us, IRSA and Cresud dated August 23, 2007.
4.3 (5) |  | English translation of the Second Agreement for the Implementation of the Amendment to the Corporate Services Master Agreement, dated August 14, 2008.
4.4 (6) |  | English translation of the Third Agreement for the Implementation of the Amendment to the Corporate Services Master Agreement, dated November 27, 2009.
4.5 (7) |  | English translation of the Amendment to the Agreement for the exchange of Corporate Service between us, IRSA and Cresud, dated March 12, 2010.
4.6 (8) |  | English translation of the Amendment to the Agreement for the exchange of Corporate Service between us, IRSA and Cresud, dated July 11, 2011.
4.7 (9) |  | English translation of the Fifth Agreement for the implementation of Amendments to the Corporate Services Master Agreement, October 15, 2012.
4.8 (10) |  | English translation of the Sixth Agreement for the Implementation of the Amendment to the Corporate Services Master Agreement dated November 12, 2013.
4.9 (11) |  | English translation of the Second Amendment to the exchange of Operating Services Agreement between the Company, Cresud and Alto Palermo, dated February 24, 2014.
4.10 (12) |  | English translation of the Seventh Agreement for the Implementation of the Amendment to the Corporate Services Master Agreement dated February 18, 2015.
4.11 (13) |  | English translation of the Eighth Agreement for the Implementation of the Amendment to the Corporate Services Master Agreement dated November 12, 2015.
4.12 (14) |  | English translation of the Ninth Agreement for the Implementation of the Amendment to the Corporate Services Master Agreement dated May 5, 2017.
4.13 (15) |  | English translation of the Tenth Agreement for the Implementation of the Amendment to the Corporate Services Master Agreement dated June 29, 2018.
4.14 (16) |  | English translation of the Thirteenth Agreement for the Implementation of the Amendment to the Agreement for the Exchange of Corporate Services between us, IRSA and Cresud, dated June 30, 2021.
4.15 (17) |  | English translation of the Twelfth Agreement for the Implementation of the Amendment to the Agreement for the Exchange of Corporate Services between us, IRSA and Cresud, dated June 30, 2020.
4.16 |  | English translation of the Thirteenth Agreement for the Implementation of the Amendment to the Agreement for the Exchange of Corporate Services between us, IRSA and Cresud, dated June 30, 2021.
8.1 |  | List of Subsidiaries.
11.1 (3) |  | Code of Ethics of the Company.
12.1 |  | Certification pursuant to Section 302 of the Sarbanes-Oxley Act 2002.
12.2 |  | Certification pursuant to Section 302 of the Sarbanes-Oxley Act 2002.
13.1 |  | Certification pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
13.2 |  | Certification pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.1 |  | Summary of investment properties by type as of June 30, 2020 (in accordance with Regulation S-X 12-28 (1))

(1) | Incorporated herein by reference to the same-numbered exhibit to the registrant’s registration statement on Form 20-F (File N° 000-30982).
(2) | Incorporated herein by reference to the registrant’s registration statement on Form 6-K (SEC File N° 000-30982).
(3) | Incorporated herein by reference to the registrant’s registration statement on Form 6-K reported on August 1, 2005.
(4) | Incorporated herein by reference to the Annual Report on Form 20-F (File N° 128 0-30982) filed with the SEC on December 27, 2007.
(5) | Incorporated herein by reference to the Annual Report on Form 20-F (File N° 128 0-30982) filed with the SEC on December 30, 2008.
(6) | Incorporated herein by reference to the Annual Report on Form 20-F (File N° 1280-30982) filed with the SEC on December 30, 2009.
(7) | Incorporated herein by reference to the Annual Report on Form 20-F (File N° 1280-30982) filed with the SEC on December 30, 2010.
(8) | Incorporated herein by reference to the Annual Report on Form 20-F (File N° 1280-30982) filed with the SEC on December 28, 2011.
(9) | Incorporated herein by reference to the Annual Report on Form 20-F (File N° 1280-30982) filed with the SEC on October 26, 2012.
(10) | Incorporated herein by reference to the Annual Report on Form 20-F (File N° 1280-30982) filed with the SEC on October 31, 2014.
(11) | Incorporated herein by reference to the Annual Report on Form 20-F (File N° 1280-30982) filed with the SEC on November 17, 2015.
(12) | Incorporated herein by reference to the Annual Report on Form 20-F (File N° 1280-30982) filed with the SEC on November 17, 2015.
(13) | Incorporated herein by reference to the Annual Report on Form 20-F (File N° 1280-30982) filed with the SEC on November 1, 2016.
(14) | Incorporated herein by reference to the Annual Report on Form 20-F (File N° 1280-30982) filed with the SEC on October 31, 2017.
(15) | Incorporated herein by reference to the Annual Report on Form 20-F (File N° 1280-30982) filed with the SEC on October 31, 2018.
(16) | Incorporated herein by reference to the Annual Report on Form 20-F (File N° 1280-30982) filed with the SEC on October 31, 2019.
(17) | Incorporated herein by reference to the Annual Report on Form 20-F (File N° 1280-30982) filed with the SEC on Novbember 16, 2021.
(18) | Incorporated by reference to the registrant’s registration statement on Form 8-A filed on May 26, 2021.

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SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this Annual Report on its behalf.

| IRSA Inversiones y Representaciones Sociedad Anónima |
Date: October 20, 2021 | By: | /s/ Matías I. Gaivironsky |
|  | Name Matías I. Gaivironsky |
|  | Title Chief Financial and Administrative Officer |

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Index

Report of Independent Registered Public Accounting Firm |  | F-2 |
Glossary |  | F-3 |
Consolidated Statements of Financial Position |  | F-4 |
Consolidated Statements of Income and Other Comprehensive Income |  | F-5 |
Consolidated Statements of Changes in Shareholders’ Equity |  | F-6 |
Consolidated Statements of Cash Flows |  | F-9 |
Notes to Consolidated Financial Statements |  | F-10 |
Note 1 – The Group’s business and general information |  | F-10 |
Note 2 – Summary of significant accounting policies |  | F-11 |
Note 3 – Significant judgments, key assumptions and estimates |  | F-29 |
Note 4 – Acquisitions and dispositions |  | F-30 |
Note 5 – Financial risk management and fair value estimates |  | F-32 |
Note 6 – Segment information |  | F-37 |
Note 7 – Information about the main subsidiaries |  | F-41 |
Note 8 – Investments in associates and joint ventures |  | F-42 |
Note 9 – Investment properties |  | F-45 |
Note 10 – Property, plant and equipment |  | F-50 |
Note 11 – Trading properties |  | F-50 |
Note 12 – Intangible assets |  | F-51 |
Note 13 – Rights of use of assets |  | F-51 |
Note 14 – Financial instruments by category |  | F-52 |
Note 15 – Trade and other receivables |  | F-56 |
Note 16 – Cash flow information |  | F-57 |
Note 17 – Shareholders’ Equity |  | F-57 |
Note 18 – Trade and other payables |  | F-60 |
Note 19 – Provisions |  | F-60 |
Note 20 – Borrowings |  | F-61 |
Note 21 – Taxes |  | F-65 |
Note 22 – Leases |  | F-69 |
Note 23 – Revenues |  | F-69 |
Note 24 – Expenses by nature |  | F-70 |
Note 25 – Cost of goods sold and services provided |  | F-70 |
Note 26 – Other operating results, net |  | F-71 |
Note 27 – Financial results, net |  | F-71 |
Note 28 – Earnings per share |  | F-71 |
Note 29 – Employee benefits and share-based payments |  | F-72 |
Note 30 – Related party transactions |  | F-73 |
Note 31 – Foreign currency assets and liabilities |  | F-78 |
Note 32 – Groups of assets and liabilities held for sale |  | F-79 |
Note 33 – Results from discontinued operations |  | F-79 |
Note 34 – Other relevant events of the year |  | F-80 |
Note 35 – Subsequent Events |  | F-82 |

F-1
Table of Contents

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of

IRSA Inversionesy Representaciones Sociedad Anónima

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated statements of financial position of IRSA Inversionesy Representaciones Sociedad Anónima and its subsidiaries (the “Company”) as of June 30, 2021 and 2020, and the related consolidated statements of income and other comprehensive income, changes in shareholders’ equity and cash flows for each of the three years in the period ended June 30, 2021, including the related notes and the summary of investment properties by type as of June 30, 2021 listed in the index appearing under Item 19 (99.1) (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of June 30, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of June 30, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2021 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting appearing under Item 15. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Level 3 Investment Properties Valued Using Discounted Cash Flows

As described in Note 9 to the consolidated financial statements, the Company used a discounted cash flow model to value its Level 3 investment properties, which account for approximately 28% of the Company’s AR$ 183,152 million in investment properties at June 30, 2021. These properties are valued using assumptions that management believes a hypothetical market participant would use to determine a current transaction price. The significant assumptions used by management to value these investment properties included determining appropriate discount rates and projecting macroeconomic variables such as inflation, exchange rates and gross domestic product. These valuation techniques require management to make estimates and judgments regarding the future behavior of multiple interrelated variables and changes in these assumptions could have a significant impact on the determination of the fair value of these properties.

The principal considerations for our determination that performing procedures relating to the Level 3 investment properties valued using a discounted cash flows method is a critical audit matter are the significant judgment by management to determine the fair value of these properties due to the use of a valuation model that included significant assumptions related to the determination of discount rates and projecting macroeconomic variables such as inflation, exchange rates and gross domestic product; this in turn led to a high degree of auditor subjectivity and judgment to evaluate the audit evidence obtained related to the valuation, and this audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the valuation of Level 3 investment properties valued using a discounted cash flows method, including controls over the Company’s methods, significant assumptions used and data. These procedures also included, among others, the involvement of professionals with specialized skill and knowledge to assist in developing an independent range of values for all significant assumptions and comparison of management’s estimate to the independently developed ranges. Developing the independent estimate involved testing the completeness and accuracy of data provided by management and evaluating management’s assumptions related to future behavior of certain macroeconomic variables, such as inflation, exchange rates and gross domestic product, and independently developing the discount rate assumption.

/s/ PRICE WATERHOUSE & Co. S.R.L |  |
(Partner) |  |
/s/ Walter Rafael Zablocky |  |
Buenos Aires, Argentina |  |
October 18, 2021 |  |

We have served as the Company’s auditor since 1992.

F-2
Table of Contents

Glossary

The following are not technical definitions but help the reader to understand certain terms used in the wording of the notes to the Group’s Consolidated Financial Statements.

Terms |  | Definitions
BACS |  | Banco de Crédito y Securitización S.A.
BCRA |  | Central Bank of the Argentine Republic
BHSA |  | Banco Hipotecario S.A.
BYMA |  | Buenos Aires Stock Exchange
Cellcom |  | Cellcom Israel Ltd.
Clal |  | Clal Holdings Insurance Enterprises Ltd.
CNV |  | Securities National Commission
CODM |  | Chief Operating Decision Maker
Condor |  | Condor Hospitality Trust Inc.
CPF |  | Collective Promotion Funds
CPI |  | Consumer Price Index
Cresud |  | Cresud S.A.C.I.F. y A.
DFL |  | Dolphin Fund Ltd.
DIC |  | Discount Investment Corporation Ltd.
DIL |  | Dolphin IL Investment Ltd.
DN B.V. |  | Dolphin Netherlands B.V.
ECLSA |  | E-Commerce Latina S.A.
EHSA |  | Entertainment Holdings S.A.
FPC |  | Collective Promotion Funds
GAV-YAM |  | Gav-Yam Bayside Land Corporation Ltd.
IASB |  | International Accounting Interpretations Board
IDBD |  | IDB Development Corporation Ltd.
IFISA |  | Inversiones Financieras del Sur S.A.
IFRIC |  | International Financial Reporting Standards Interpretation Committee
IFRS |  | International Financial Reporting Standards
IRSA CP |  | IRSA Propiedades Comerciales S.A.
IRSA, “The Company”, “Us”, “We” |  | IRSA Inversiones y Representaciones Sociedad Anónima
Metropolitan |  | Metropolitan 885 Third Avenue Leasehold LLC
Mehadrin |  | Mehadrin Ltd.
MPIT |  | Minimum Presumed Income Tax
NCN |  | Non-Convertible Notes
New Lipstick |  | New Lipstick LLC
NFSA |  | Nuevas Fronteras S.A.
NIS |  | New Israeli Shekel
NYSE |  | New York Stock Exchange
OASA |  | OGDEN Argentina S.A.
PBC |  | Property & Building Corporation Ltd.
PBEL |  | PBEL Real Estate LTD
Quality |  | Quality Invest S.A.
Shufersal |  | Shufersal Ltd.
Tarshop |  | Tarshop S.A.
TGLT FACPCE |  | TGLT S.A. Argentine Federation of Accountant
Tyrus |  | Tyrus S.A.

F-3
Table of Contents

IRSA Inversiones y Representaciones Sociedad Anónima

Consolidated Statements of Financial Position

as of June 30, 2021 and 2020

(All amounts in millions of Argentine Pesos, except otherwise indicated)

|  |  | Note |  |  | 06.30.2021 |  |  | 06.30.2020 |
ASSETS |  |  |  |  |  |  |  |  |
Non-current assets |  |  |  |  |  |  |  |  |
Investment properties |  |  | 9 |  |  |  | 183,152 |  |  |  | 341,776 |
Property, plant and equipment |  |  | 10 |  |  |  | 4,146 |  |  |  | 56,670 |
Trading properties |  |  | 11,25 |  |  |  | 1,644 |  |  |  | 7,294 |
Intangible assets |  |  | 12 |  |  |  | 2,400 |  |  |  | 41,732 |
Right-of-use assets |  |  | 13 |  |  |  | 811 |  |  |  | 29,828 |
Investments in associates and joint ventures |  |  | 8 |  |  |  | 12,165 |  |  |  | 111,740 |
Deferred income tax assets |  |  | 21 |  |  |  | 446 |  |  |  | 951 |
Income tax and MPIT credit |  |  |  |  |  |  | 30 |  |  |  | 38 |
Restricted assets |  |  | 14 |  |  |  | - |  |  |  | 2,810 |
Trade and other receivables |  |  | 15 |  |  |  | 2,847 |  |  |  | 34,738 |
Investments in financial assets |  |  | 14 |  |  |  | 1,218 |  |  |  | 5,277 |
Derivative financial instruments |  |  | 14 |  |  |  | - |  |  |  | 213 |
Total non-current assets |  |  |  |  |  |  | 208,859 |  |  |  | 633,067 |
Current assets |  |  |  |  |  |  |  |  |  |  |  |
Trading properties |  |  | 11,25 |  |  |  | 114 |  |  |  | 3,479 |
Inventories |  |  | 25 |  |  |  | 72 |  |  |  | 7,034 |
Restricted assets |  |  | 14 |  |  |  | - |  |  |  | 9,326 |
Income tax and MPIT credit |  |  |  |  |  |  | 165 |  |  |  | 461 |
Group of assets held for sale |  |  | 32 |  |  |  | - |  |  |  | 62,600 |
Trade and other receivables |  |  | 15 |  |  |  | 8,475 |  |  |  | 55,789 |
Investments in financial assets |  |  | 14 |  |  |  | 3,166 |  |  |  | 29,190 |
Financial assets held for sale |  |  | 14 |  |  |  | - |  |  |  | 5,072 |
Derivative financial instruments |  |  | 14 |  |  |  | - |  |  |  | 317 |
Cash and cash equivalents |  |  | 14 |  |  |  | 1,931 |  |  |  | 135,719 |
Total current assets |  |  |  |  |  |  | 13,923 |  |  |  | 308,987 |
TOTAL ASSETS |  |  |  |  |  |  | 222,782 |  |  |  | 942,054 |
SHAREHOLDERS’ EQUITY |  |  |  |  |  |  |  |  |  |  |  |
Shareholders’ equity attributable to equity holders of the parent (according to corresponding statement) |  |  |  |  |  |  | 61,832 |  |  |  | 85,805 |
Non-controlling interest |  |  |  |  |  |  | 20,892 |  |  |  | 98,423 |
TOTAL SHAREHOLDERS’ EQUITY |  |  |  |  |  |  | 82,724 |  |  |  | 184,228 |
LIABILITIES |  |  |  |  |  |  |  |  |  |  |  |
Non-current liabilities |  |  |  |  |  |  |  |  |  |  |  |
Borrowings |  |  | 14,20 |  |  |  | 46,724 |  |  |  | 447,323 |
Lease liabilities |  |  |  |  |  |  | 852 |  |  |  | 20,091 |
Deferred income tax liabilities |  |  | 21 |  |  |  | 68,748 |  |  |  | 66,144 |
Trade and other payables |  |  | 14,18 |  |  |  | 1,387 |  |  |  | 3,258 |
Provisions |  |  | 19 |  |  |  | 114 |  |  |  | 4,601 |
Employee benefits |  |  |  |  |  |  | - |  |  |  | 671 |
Derivative financial instruments |  |  | 14 |  |  |  | 9 |  |  |  | 83 |
Salaries and social security liabilities |  |  |  |  |  |  | 86 |  |  |  | 293 |
Total non-current liabilities |  |  |  |  |  |  | 117,920 |  |  |  | 542,464 |
Current liabilities |  |  |  |  |  |  |  |  |  |  |  |
Trade and other payables |  |  | 14,18 |  |  |  | 5,103 |  |  |  | 44,567 |
Borrowings |  |  | 14,20 |  |  |  | 15,409 |  |  |  | 117,668 |
Lease liabilities |  |  |  |  |  |  | 54 |  |  |  | 7,313 |
Provisions |  |  | 19 |  |  |  | 147 |  |  |  | 3,665 |
Group of liabilities held for sale |  |  | 32 |  |  |  | - |  |  |  | 33,362 |
Salaries and social security liabilities |  |  |  |  |  |  | 436 |  |  |  | 6,166 |
Income tax and MPIT liabilities |  |  |  |  |  |  | 941 |  |  |  | 939 |
Derivative financial instruments |  |  | 14 |  |  |  | 48 |  |  |  | 1,682 |
Total current liabilities |  |  |  |  |  |  | 22,138 |  |  |  | 215,362 |
TOTAL LIABILITIES |  |  |  |  |  |  | 140,058 |  |  |  | 757,826 |
TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES |  |  |  |  |  |  | 222,782 |  |  |  | 942,054 |

The accompanying notes are an integral part of these Consolidated Financial Statements.

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Table of Contents

IRSA Inversiones y Representaciones Sociedad Anónima

Consolidated Statements of Income and Other Comprehensive Income

for the fiscal years ended June 30, 2021, 2020 and 2019

(All amounts in millions of Argentine Pesos, except otherwise indicated)

|  |  | Note |  |  | 06.30.2021 |  |  | 06.30.2020 |  |  | 06.30.2019 |
Revenues |  |  | 23 |  |  |  | 12,978 |  |  |  | 21,263 |  |  |  | 28,004 |
Costs |  |  | 24,25 |  |  |  | (6,564 | ) |  |  | (8,872 | ) |  |  | (10,461 | )
Gross profit |  |  |  |  |  |  | 6,414 |  |  |  | 12,391 |  |  |  | 17,543 |
Net (loss) / gain from fair value adjustment of investment properties |  |  | 9 |  |  |  | (7,770 | ) |  |  | 50,664 |  |  |  | (58,231 | )
General and administrative expenses |  |  | 24 |  |  |  | (3,017 | ) |  |  | (3,301 | ) |  |  | (4,086 | )
Selling expenses |  |  | 24 |  |  |  | (1,490 | ) |  |  | (1,822 | ) |  |  | (1,619 | )
Other operating results, net |  |  | 26 |  |  |  | (86 | ) |  |  | 119 |  |  |  | (470 | )
(Loss) / profit from operations |  |  |  |  |  |  | (5,949 | ) |  |  | 58,051 |  |  |  | (46,863 | )
Share of (loss) / profit of associates and joint ventures |  |  | 8 |  |  |  | (4,380 | ) |  |  | 10,847 |  |  |  | (10,587 | )
(Loss) / profit before financial results and income tax |  |  |  |  |  |  | (10,329 | ) |  |  | 68,898 |  |  |  | (57,450 | )
Finance income |  |  | 27 |  |  |  | 361 |  |  |  | 320 |  |  |  | 281 |
Finance costs |  |  | 27 |  |  |  | (7,298 | ) |  |  | (9,251 | ) |  |  | (7,187 | )
Other financial results |  |  | 27 |  |  |  | 11,717 |  |  |  | (9,288 | ) |  |  | 3,370 |
Inflation adjustment |  |  |  |  |  |  | (1,446 | ) |  |  | (16 | ) |  |  | (1,028 | )
Financial results, net |  |  |  |  |  |  | 3,334 |  |  |  | (18,235 | ) |  |  | (4,564 | )
(Loss) / profit before income tax |  |  |  |  |  |  | (6,995 | ) |  |  | 50,663 |  |  |  | (62,014 | )
Income tax expense |  |  | 21 |  |  |  | (21,673 | ) |  |  | (10,065 | ) |  |  | 6,760 |
(Loss) / profit for the year from continuing operations |  |  |  |  |  |  | (28,668 | ) |  |  | 40,598 |  |  |  | (55,254 | )
Loss for the year from discontinued operations |  |  | 33 |  |  |  | (8,923 | ) |  |  | (4,947 | ) |  |  | (2,380 | )
(Loss) / profit for the year |  |  |  |  |  |  | (37,591 | ) |  |  | 35,651 |  |  |  | (57,634 | )
Other comprehensive income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Items that may be reclassified subsequently to profit or loss: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Currency translation adjustment |  |  |  |  |  |  | (372 | ) |  |  | 687 |  |  |  | 427 |
Other reserves |  |  |  |  |  |  | 383 |  |  |  | 605 |  |  |  | - |
Other comprehensive income for the year from continuing operations |  |  |  |  |  |  | 11 |  |  |  | 1,292 |  |  |  | 427 |
Other comprehensive (loss) / income for the year from discontinued operations |  |  |  |  |  |  | (11,443 | ) |  |  | 20,008 |  |  |  | (3,469 | )
Total other comprehensive (loss) / income for the year (i) |  |  |  |  |  |  | (11,432 | ) |  |  | 21,300 |  |  |  | (3,042 | )
Total comprehensive (loss) / income for the year |  |  |  |  |  |  | (49,023 | ) |  |  | 56,951 |  |  |  | (60,676 | )
Total comprehensive (loss) / income from continuing operations |  |  |  |  |  |  | (28,657 | ) |  |  | 41,890 |  |  |  | (54,828 | )
Total comprehensive (loss) / income from discontinued operations |  |  |  |  |  |  | (20,366 | ) |  |  | 15,061 |  |  |  | (5,848 | )
Total comprehensive (loss) / income for the year |  |  |  |  |  |  | (49,023 | ) |  |  | 56,951 |  |  |  | (60,676 | )
(Loss) / profit for the year attributable to: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity holders of the parent |  |  |  |  |  |  | (29,929 | ) |  |  | 21,405 |  |  |  | (54,988 | )
Non-controlling interest |  |  |  |  |  |  | (7,662 | ) |  |  | 14,246 |  |  |  | (2,646 | )
(Loss) / profit from continuing operations attributable to: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity holders of the parent |  |  |  |  |  |  | (22,879 | ) |  |  | 29,932 |  |  |  | (48,819 | )
Non-controlling interest |  |  |  |  |  |  | (5,789 | ) |  |  | 10,666 |  |  |  | (6,435 | )
Total comprehensive (Loss) / income attributable to: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity holders of the parent |  |  |  |  |  |  | (34,810 | ) |  |  | 19,927 |  |  |  | (56,396 | )
Non-controlling interest |  |  |  |  |  |  | (14,213 | ) |  |  | 37,024 |  |  |  | (4,280 | )
Total comprehensive (Loss) / income from continuing operations attributable to: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity holders of the parent |  |  |  |  |  |  | (22,163 | ) |  |  | 34,509 |  |  |  | (48,394 | )
Non-controlling interest |  |  |  |  |  |  | (6,494 | ) |  |  | 7,381 |  |  |  | (6,434 | )
(Loss) / profit per share attributable to equity holders of the parent: (ii) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  |  |  |  |  | (50.86 | ) |  |  | 37.20 |  |  |  | (95.64 | )
Diluted |  |  |  |  |  |  | (50.86 | ) |  |  | 37.10 |  |  |  | (95.64 | )
(Loss) / profit per share from continuing operations attributable to equity holders of the parent: (ii) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  |  |  |  |  | (38.88 | ) |  |  | 52.02 |  |  |  | (84.91 | )
Diluted |  |  |  |  |  |  | (38.88 | ) |  |  | 51.88 |  |  |  | (84.91 | )

The accompanying notes are an integral part of these Consolidated Financial Statements.

(i) | The components of other comprehensive (loss) / income do not generate an impact on income tax.
(ii) | The loss/profit per share have been calculated using 588,409,377 shares at 06.30.21, 575,377,891 at 06.30.20 y 574,940,605 at 06.30.19. If 588,409,377 shares had been used for the calculation, the result per share would be ARS 36.38 and ARS (93.45) for 06.30.20 and 06.30.19, respectively. See note 17.

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Table of Contents

IRSA Inversiones y Representaciones Sociedad Anónima

Consolidated Statements of Changes in Shareholders’ Equity

for the fiscal years ended June 30, 2021, 2020 and 2019

(All amounts in millions of Argentine Pesos, except otherwise indicated)

|  | Attributable to equity holders of the parent |  |  |  |  |  |  |
|  | Share capital |  |  | Treasury shares |  |  | Inflation adjustment of share capital and treasury shares (I) |  |  | Warrants (ii) |  |  | Share premium |  |  | Additional paid-in capital from treasury shares |  |  | Legal reserve |  |  | Special reserve Resolution CNV 609/12 (iii) |  |  | Other reserves (iv) |  |  | Accumulated deficit |  |  | Subtotal |  |  | Non-controlling interest |  |  | Total Shareholders’ equity |
Balance as of July 1, 2020 |  |  | 575 |  |  |  | 2 |  |  |  | 20,617 |  |  |  | - |  |  |  | 21,839 |  |  |  | 142 |  |  |  | 728 |  |  |  | 14,125 |  |  |  | 8,854 |  |  |  | 18,923 |  |  |  | 85,805 |  |  |  | 98,423 |  |  |  | 184,228 |
Net loss for the year |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (29,929 | ) |  |  | (29,929 | ) |  |  | (7,662 | ) |  |  | (37,591 | )
Other comprehensive loss for the year |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (4,881 | ) |  |  | - |  |  |  | (4,881 | ) |  |  | (6,551 | ) |  |  | (11,432 | )
Total loss and other comprehensive loss for the year |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (4,881 | ) |  |  | (29,929 | ) |  |  | (34,810 | ) |  |  | (14,213 | ) |  |  | (49,023 | )
Assignment of results according to A.G.O. |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 875 |  |  |  | - |  |  |  | 15,896 |  |  |  | (16,771 | ) |  |  | - |  |  |  | - |  |  |  | - |
Reserve for share-based payments |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 6 |  |  |  | - |  |  |  | - |  |  |  | (6 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Issuance of shares (ii) |  |  | 80 |  |  |  | - |  |  |  | 3 |  |  |  | 1,779 |  |  |  | 2,270 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 4,132 |  |  |  | - |  |  |  | 4,132 |
Distribution of dividends in shares |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (725 | ) |  |  | (725 | ) |  |  | - |  |  |  | (725 | )
Capitalisation of irrevocable contributions |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 51 |  |  |  | 51 |
Dividend distribution |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (2,683 | ) |  |  | (2,683 | )
Decrease due to loss of control |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (62,519 | ) |  |  | (62,519 | )
Other changes in equity |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 7,857 |  |  |  | - |  |  |  | 7,857 |  |  |  | 958 |  |  |  | 8,815 |
Changes in non-controlling interest |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (427 | ) |  |  | - |  |  |  | (427 | ) |  |  | 875 |  |  |  | 448 |
Balance as of June 30, 2021 |  |  | 655 |  |  |  | 2 |  |  |  | 20,620 |  |  |  | 1,779 |  |  |  | 24,109 |  |  |  | 148 |  |  |  | 1,603 |  |  |  | 14,125 |  |  |  | 27,293 |  |  |  | (28,502 | ) |  |  | 61,832 |  |  |  | 20,892 |  |  |  | 82,724 |

(i) | Includes ARS 1 of Inflation adjustment of treasury shares. See Note 17.
(ii) | See Note 34.
(iii) | Related to CNV General Resolution N° 609/12.
(iv) | Group’s other reserves for the year ended June 30, 2021 were as follows:

|  | Cost of treasury stock |  |  | Changes in non-controlling interest |  |  | Reserve for share-based payments |  |  | Reserve for future dividends |  |  | Currency translation adjustment reserve |  |  | Hedging instruments |  |  | Special reserve |  |  | Reserve for defined contribution plans |  |  | Other reserves from subsidiaries |  |  | Revaluation surplus |  |  | Total Other reserves |
Balance as of July 1, 2020 |  |  | (259 | ) |  |  | (7,908 | ) |  |  | 296 |  |  |  | 2,541 |  |  |  | (1,092 | ) |  |  | (550 | ) |  |  | 15,611 |  |  |  | (588 | ) |  |  | 156 |  |  |  | 647 |  |  |  | 8,854 |
Other comprehensive loss for the year |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (5,288 | ) |  |  | 205 |  |  |  | - |  |  |  | (110 | ) |  |  | - |  |  |  | 312 |  |  |  | (4,881 | )
Total comprehensive loss for the year |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (5,288 | ) |  |  | 205 |  |  |  | - |  |  |  | (110 | ) |  |  | - |  |  |  | 312 |  |  |  | (4,881 | )
Reserve for share-based payments |  |  | 2 |  |  |  | - |  |  |  | (8 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (6 | )
Assignment of results according to A.G.O. |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 15,896 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 15,896 |
Changes in non-controlling interest |  |  | - |  |  |  | (427 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (427 | )
Other changes in equity |  |  | - |  |  |  | (80 | ) |  |  | - |  |  |  | - |  |  |  | 7,029 |  |  |  | (301 | ) |  |  | - |  |  |  | 825 |  |  |  | (160 | ) |  |  | 544 |  |  |  | 7,857 |
Balance as of June 30, 2021 |  |  | (257 | ) |  |  | (8,415 | ) |  |  | 288 |  |  |  | 2,541 |  |  |  | 649 |  |  |  | (646 | ) |  |  | 31,507 |  |  |  | 127 |  |  |  | (4 | ) |  |  | 1,503 |  |  |  | 27,293 |

The accompanying notes are an integral part of these Consolidated Financial Statements.

F-6
Table of Contents

IRSA Inversiones y Representaciones Sociedad Anónima

Consolidated Statements of Changes in Shareholders’ Equity

for the fiscal years ended June 30, 2021, 2020 and 2019

(All amounts in millions of Argentine Pesos, except otherwise indicated)

|  | Attributable to equity holders of the parent |  |  |  |  |  |  |
|  | Share capital |  |  | Treasury shares |  |  | Inflation adjustment of share capital and treasury shares (i) |  |  | Share premium |  |  | Additional paid-in capital from treasury shares |  |  | Legal reserve |  |  | Special reserve Resolution CNV 609/12 (ii) |  |  | Other reserves (iii) |  |  | Retained earnings |  |  | Subtotal |  |  | Non-controlling interest |  |  | Total Shareholders’ equity |
Balance as of July 1, 2019 |  |  | 575 |  |  |  | 2 |  |  |  | 20,617 |  |  |  | 21,839 |  |  |  | 116 |  |  |  | 728 |  |  |  | 14,125 |  |  |  | 102,207 |  |  |  | (91,353 | ) |  |  | 68,856 |  |  |  | 115,373 |  |  |  | 184,229 |
Adjustments previous years (IFRS 16 and IAS 28) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (1,962 | ) |  |  | (1,962 | ) |  |  | (1,291 | ) |  |  | (3,253 | )
Restated balance as of July 1, 2019 |  |  | 575 |  |  |  | 2 |  |  |  | 20,617 |  |  |  | 21,839 |  |  |  | 116 |  |  |  | 728 |  |  |  | 14,125 |  |  |  | 102,207 |  |  |  | (93,315 | ) |  |  | 66,894 |  |  |  | 114,082 |  |  |  | 180,976 |
Net profit for the year |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 21,405 |  |  |  | 21,405 |  |  |  | 14,246 |  |  |  | 35,651 |
Other comprehensive (loss) / income for the year |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (1,478 | ) |  |  | - |  |  |  | (1,478 | ) |  |  | 22,778 |  |  |  | 21,300 |
Total profit and other comprehensive (loss) / profit for the year |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (1,478 | ) |  |  | 21,405 |  |  |  | 19,927 |  |  |  | 37,024 |  |  |  | 56,951 |
Loss absorption |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (90,800 | ) |  |  | 90,800 |  |  |  | - |  |  |  | - |  |  |  | - |
Reserve for share-based payments |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 26 |  |  |  | - |  |  |  | - |  |  |  | (26 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Distribution of dividends in shares |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (887 | ) |  |  | - |  |  |  | (887 | ) |  |  | - |  |  |  | (887 | )
Capitalization of contributions |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 47 |  |  |  | 47 |
Dividend distribution |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (3,429 | ) |  |  | (3,429 | )
Decrease due to loss of control |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (65,040 | ) |  |  | (65,040 | )
Other changes in equity |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (176 | ) |  |  | 33 |  |  |  | (143 | ) |  |  | 375 |  |  |  | 232 |
Incorporation by business combination |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 11,179 |  |  |  | 11,179 |
Changes in non-controlling interest |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 14 |  |  |  | - |  |  |  | 14 |  |  |  | 4,185 |  |  |  | 4,199 |
Balance as of June 30, 2020 |  |  | 575 |  |  |  | 2 |  |  |  | 20,617 |  |  |  | 21,839 |  |  |  | 142 |  |  |  | 728 |  |  |  | 14,125 |  |  |  | 8,854 |  |  |  | 18,923 |  |  |  | 85,805 |  |  |  | 98,423 |  |  |  | 184,228 |

(i) | Includes ARS 1 of Inflation adjustment of treasury stock. See Note 17.
(ii) | Related to CNV General Resolution N° 609/12.
(iii) | Group’s other reserves for the year ended June 30, 2020 were as follows:

|  | Cost of treasury stock |  |  | Changes in non-controlling interest |  |  | Reserve for share-based payments |  |  | Reserve for future dividends |  |  | Currency translation adjustment reserve |  |  | Hedging instruments |  |  | Reserve for defined contribution plans |  |  | Special reserve |  |  | Other reserves from subsidiaries |  |  | Revaluation surplus |  |  | Total Other reserves |
Balance as of July 1, 2019 |  |  | (248 | ) |  |  | (7,922 | ) |  |  | 311 |  |  |  | 2,541 |  |  |  | 395 |  |  |  | (14 | ) |  |  | (466 | ) |  |  | 107,298 |  |  |  | 156 |  |  |  | 156 |  |  |  | 102,207 |
Other comprehensive loss for the year |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (1,311 | ) |  |  | (536 | ) |  |  | (122 | ) |  |  | - |  |  |  | - |  |  |  | 491 |  |  |  | (1,478 | )
Total comprehensive loss for the year |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (1,311 | ) |  |  | (536 | ) |  |  | (122 | ) |  |  | - |  |  |  | - |  |  |  | 491 |  |  |  | (1,478 | )
Share-based compensation |  |  | (11 | ) |  |  | - |  |  |  | (15 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (26 | )
Distribution of dividends in shares |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (887 | ) |  |  | - |  |  |  | - |  |  |  | (887 | )
Cambios en el interés no controlante |  |  | - |  |  |  | 14 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 14 |
Other changes in equity |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (176 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (176 | )
Loss absorption |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (90,800 | ) |  |  | - |  |  |  | - |  |  |  | (90,800 | )
Balance as of June 30, 2020 |  |  | (259 | ) |  |  | (7,908 | ) |  |  | 296 |  |  |  | 2,541 |  |  |  | (1,092 | ) |  |  | (550 | ) |  |  | (588 | ) |  |  | 15,611 |  |  |  | 156 |  |  |  | 647 |  |  |  | 8,854 |

The accompanying notes are an integral part of these Consolidated Financial Statements.

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IRSA Inversiones y Representaciones Sociedad Anónima

Consolidated Statements of Changes in Shareholders’ Equity

for the fiscal years ended June 30, 2021, 2020 and 2019

(All amounts in millions of Argentine Pesos, except otherwise indicated)

|  | Attributable to equity holders of the parent |  |  |  |  |  |  |
|  | Share capital |  |  | Treasury shares |  |  | Inflation adjustment of share capital and treasury shares (i) |  |  | Share premium |  |  | Additional paid-in capital from treasury shares |  |  | Legal reserve |  |  | Special reserve Resolution CNV 609/12 (ii) |  |  | Other reserves (iii) |  |  | Accumulated deficit |  |  | Subtotal |  |  | Non-controlling interest |  |  | Total Shareholders’ equity |
Balance as of July 1, 2018 |  |  | 575 |  |  |  | 2 |  |  |  | 20,617 |  |  |  | 21,839 |  |  |  | 116 |  |  |  | 728 |  |  |  | 14,125 |  |  |  | 7,370 |  |  |  | 66,293 |  |  |  | 131,665 |  |  |  | 124,899 |  |  |  | 256,564 |
Adjustments previous years (IFRS 9 and 15) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (496 | ) |  |  | (496 | ) |  |  | (9 | ) |  |  | (505 | )
Restated balance as of July 1, 2018 |  |  | 575 |  |  |  | 2 |  |  |  | 20,617 |  |  |  | 21,839 |  |  |  | 116 |  |  |  | 728 |  |  |  | 14,125 |  |  |  | 7,370 |  |  |  | 65,797 |  |  |  | 131,169 |  |  |  | 124,890 |  |  |  | 256,059 |
Net loss for the year |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (54,988 | ) |  |  | (54,988 | ) |  |  | (2,646 | ) |  |  | (57,634 | )
Other comprehensive loss for the year |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (1,408 | ) |  |  | - |  |  |  | (1,408 | ) |  |  | (1,634 | ) |  |  | (3,042 | )
Total loss and other comprehensive loss for the year |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (1,408 | ) |  |  | (54,988 | ) |  |  | (56,396 | ) |  |  | (4,280 | ) |  |  | (60,676 | )
Irrevocable contributions |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 11 |  |  |  | 11 |
Assignment of results according to A.G.O. at 10.29.18 |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 98,302 |  |  |  | (98,302 | ) |  |  | - |  |  |  | - |  |  |  | - |
Reserve for share-based payments |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 97 |  |  |  | 97 |
Dividend distribution |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (3,922 | ) |  |  | (3,922 | ) |  |  | (5,002 | ) |  |  | (8,924 | )
Other changes in equity in subsidiaries |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 62 |  |  |  | 62 |  |  |  | - |  |  |  | 62 |
Changes in non-controlling interest |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (2,057 | ) |  |  | - |  |  |  | (2,057 | ) |  |  | (343 | ) |  |  | (2,400 | )
Balance as of June 30, 2019 |  |  | 575 |  |  |  | 2 |  |  |  | 20,617 |  |  |  | 21,839 |  |  |  | 116 |  |  |  | 728 |  |  |  | 14,125 |  |  |  | 102,207 |  |  |  | (91,353 | ) |  |  | 68,856 |  |  |  | 115,373 |  |  |  | 184,229 |

(1) | Includes ARS 1 of Inflation adjustment of treasury stock. See Note 17.
(2) | Related to CNV General Resolution N° 609/12.
(3) | Group’s other reserves for the year ended June 30, 2019 were as follows:

|  | Cost of treasury stock |  |  | Changes in non-controlling interest |  |  | Reserve for share-based payments |  |  | Reserve for future dividends |  |  | Currency translation adjustment reserve |  |  | Hedging instruments |  |  | Reserve for defined contribution plans |  |  | Special reserve |  |  | Other reserves from subsidiaries |  |  | Revaluation surplus |  |  | Total Other reserves |
Balance as of July 1, 2018 |  |  | (274 | ) |  |  | (5,865 | ) |  |  | 337 |  |  |  | 2,541 |  |  |  | 1,629 |  |  |  | 160 |  |  |  | (466 | ) |  |  | 8,996 |  |  |  | 156 |  |  |  | 156 |  |  |  | 7,370 |
Other comprehensive loss for the year |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (1,234 | ) |  |  | (174 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (1,408 | )
Total comprehensive loss for the year |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (1,234 | ) |  |  | (174 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (1,408 | )
Share-based compensation |  |  | 26 |  |  |  | - |  |  |  | (26 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Assignment of results according to A.G.O. at 10.29.18 |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 98,302 |  |  |  | - |  |  |  | - |  |  |  | 98,302 |
Changes in non-controlling interest |  |  | - |  |  |  | (2,057 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (2,057 | )
Balance as of June 30, 2019 |  |  | (248 | ) |  |  | (7,922 | ) |  |  | 311 |  |  |  | 2,541 |  |  |  | 395 |  |  |  | (14 | ) |  |  | (466 | ) |  |  | 107,298 |  |  |  | 156 |  |  |  | 156 |  |  |  | 102,207 |

The accompanying notes are an integral part of these Consolidated Financial Statements.

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IRSA Inversiones y Representaciones Sociedad Anónima

Consolidated Statements of Cash Flows

for the fiscal years ended June 30, 2021, 2020 and 2019

(All amounts in millions of Argentine Pesos, except otherwise indicated)

|  |  | Note |  |  | 06.30.2021 |  |  | 06.30.2020 |  |  | 06.30.2019 |
Operating activities: |  |  |  |  |  |  |  |  |  |  |  |
Net cash (used in) / generated from continuing operating activities before income tax paid |  |  | 16 |  |  |  | (1,654 | ) |  |  | 9,828 |  |  |  | 8,810 |
Income tax and MPIT paid |  |  |  |  |  |  | (42 | ) |  |  | (455 | ) |  |  | (504 | )
Net cash (used in) / generated from continuing operating activities |  |  |  |  |  |  | (1,696 | ) |  |  | 9,373 |  |  |  | 8,306 |
Net cash generated from discontinued operating activities |  |  |  |  |  |  | 3,152 |  |  |  | 37,358 |  |  |  | 32,310 |
Net cash generated from operating activities |  |  |  |  |  |  | 1,456 |  |  |  | 46,731 |  |  |  | 40,616 |
Investing activities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Acquisition of participation in associates and joint ventures |  |  |  |  |  |  | - |  |  |  | - |  |  |  | (131 | )
Contributions and issuance of capital in associates and joint ventures |  |  |  |  |  |  | (42 | ) |  |  | (4,058 | ) |  |  | - |
Acquisition and improvements of investment properties |  |  |  |  |  |  | (999 | ) |  |  | (5,524 | ) |  |  | (6,425 | )
Proceeds from sales of investment properties |  |  |  |  |  |  | 18,134 |  |  |  | 270 |  |  |  | 60 |
Acquisitions and improvements of property, plant and equipment |  |  |  |  |  |  | (307 | ) |  |  | (379 | ) |  |  | (225 | )
Proceeds from sales of property, plant and equipment |  |  |  |  |  |  | 349 |  |  |  | - |  |  |  | - |
Acquisitions of intangible assets |  |  |  |  |  |  | (52 | ) |  |  | (65 | ) |  |  | (292 | )
Dividends collected from associates and joint ventures |  |  |  |  |  |  | - |  |  |  | 345 |  |  |  | 328 |
Proceeds from sales of interest held in associates and joint ventures |  |  |  |  |  |  | - |  |  |  | - |  |  |  | 9 |
Proceeds from loans granted |  |  |  |  |  |  | 9 |  |  |  | - |  |  |  | 312 |
Net increase of restricted assets, net |  |  |  |  |  |  | - |  |  |  | (314 | ) |  |  | - |
Acquisitions of investments in financial assets |  |  |  |  |  |  | (10,643 | ) |  |  | (23,146 | ) |  |  | (46,186 | )
Proceeds from disposal of investments in financial assets |  |  |  |  |  |  | 16,639 |  |  |  | 30,169 |  |  |  | 49,683 |
Interest received from financial assets |  |  |  |  |  |  | 673 |  |  |  | 147 |  |  |  | 878 |
Dividends received from financial assets |  |  |  |  |  |  | - |  |  |  | (18 | ) |  |  | 45 |
Payment for acquisition of other assets |  |  |  |  |  |  | - |  |  |  | - |  |  |  | (3 | )
Loans granted to related parties |  |  |  |  |  |  | - |  |  |  | (248 | ) |  |  | (21 | )
Loans granted |  |  |  |  |  |  | - |  |  |  | 2,704 |  |  |  | - |
Net cash generated from / (used in) continuing investing activities |  |  |  |  |  |  | 23,761 |  |  |  | (117 | ) |  |  | (1,968 | )
Net cash generated from discontinued investing activities |  |  |  |  |  |  | 44,119 |  |  |  | 61,166 |  |  |  | 18,775 |
Net cash generated from investing activities |  |  |  |  |  |  | 67,880 |  |  |  | 61,049 |  |  |  | 16,807 |
Financing activities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  | - |
Borrowings and issuance of non-convertible notes |  |  |  |  |  |  | 9,363 |  |  |  | 33,173 |  |  |  | 9,306 |
Payment of borrowings and non-convertible notes |  |  |  |  |  |  | (39,849 | ) |  |  | (40,601 | ) |  |  | (6,015 | )
Collections / (Payment) of short term loans, net |  |  |  |  |  |  | 5,128 |  |  |  | 3,779 |  |  |  | (1,522 | )
Interests paid |  |  |  |  |  |  | (8,223 | ) |  |  | (8,108 | ) |  |  | (7,986 | )
Repurchase of non-convertible notes |  |  |  |  |  |  | (5,130 | ) |  |  | (3,051 | ) |  |  | 2,307 | )
Capital contributions from non-controlling interest in subsidiaries |  |  |  |  |  |  | 26 |  |  |  | - |  |  |  | - |
Acquisition of non-controlling interest in subsidiaries |  |  |  |  |  |  | (75 | ) |  |  | (904 | ) |  |  | (1,475 | )
Issuance of shares |  |  |  |  |  |  | 4,132 |  |  |  | - |  |  |  | - |
Borrowings obtained from related parties |  |  |  |  |  |  | - |  |  |  | - |  |  |  | 97 |
Dividends paid to non-controlling interest in subsidiaries |  |  |  |  |  |  | (2,587 | ) |  |  | (333 | ) |  |  | - |
Proceeds from sales of non-convertible notes in portfolio |  |  |  |  |  |  | 7,058 |  |  |  | - |  |  |  | - |
Net proceeds from derivate financial instrument |  |  |  |  |  |  | (520 | ) |  |  | 7,437 |  |  |  | 918 |
Net cash used in continuing financing activities |  |  |  |  |  |  | (30,677 | ) |  |  | (8,608 | ) |  |  | (8,984 | )
Net cash used in discontinued financing activities |  |  |  |  |  |  | (18,163 | ) |  |  | (105,735 | ) |  |  | (32,702 | )
Net cash used in financing activities |  |  |  |  |  |  | (48,840 | ) |  |  | (114,343 | ) |  |  | (41,686 | )
Net (decrease) / increase in cash and cash equivalents from continuing activities |  |  |  |  |  |  | (8,612 | ) |  |  | 648 |  |  |  | (2,646 | )
Net increase / (decrease) in cash and cash equivalents from discontinued activities |  |  |  |  |  |  | 29,108 |  |  |  | (7,211 | ) |  |  | 18,383 |
Net increase / (decrease) in cash and cash equivalents |  |  |  |  |  |  | 20,496 |  |  |  | (6,563 | ) |  |  | 15,737 |
Cash and cash equivalents at beginning of the year |  |  |  |  |  |  | 135,719 |  |  |  | 129,837 |  |  |  | 124,627 |
Cash and cash equivalents reclassified as held-for-sale |  |  |  |  |  |  | - |  |  |  | (676 | ) |  |  | (363 | )
Deconsolidation of subsidiaries |  |  |  |  |  |  | (145,330 | ) |  |  | - |  |  |  | - |
Foreign exchange gain and inflation adjustment on cash and changes in fair value of cash equivalents |  |  |  |  |  |  | (8,954 | ) |  |  | 13,121 |  |  |  | (10,164 | )
Cash and cash equivalents at end of the year |  |  | 14 |  |  |  | 1,931 |  |  |  | 135,719 |  |  |  | 129,837 |

The accompanying notes are an integral part of these Consolidated Financial Statements.

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IRSA Inversiones y Representaciones Sociedad Anónima

Notes to Consolidated Financial Statements

(Amounts in millions of Argentine Pesos, except otherwise indicated)

1. The Group’s business and general information

IRSA was founded in 1943, and it is engaged in a diversified range of real estate activities in Argentina since 1991. IRSA and its subsidiaries are collectively referred to hereinafter as “the Group”. Cresud is our direct parent company and Consultores Asset Management S.A. is our ultimate parent company.

These Consolidated Financial Statements have been approved for issue by the Board of Directors on October 18,2021.

The Group, with the acquisition of IDBD, established two Operations Centers, Argentina and Israel, to manage its global business. With the loss of control of the Israel Operations Center and its deconsolidation as of October 1, 2020, the Group manages its operations through a single Operation Center.

The Group manages its global business, mainly, through the following companies:

Operations Center in Argentina

The activities of the Operations Center in Argentina are mainly developed through IRSA and its principal subsidiary, IRSA CP. Through IRSA and IRSA CP, the Group owns, manages and develops 14 shopping malls across Argentina, a portfolio of offices and other rental properties in the Autonomous City of Buenos Aires, and it entered the United States of America (“USA”) real estate market in 2009, mainly through the acquisition of non-controlling interests in office buildings and hotels. Through IRSA or IRSA CP, the Group also develops residential properties for sale. The Group, through IRSA, is also involved in the operation of branded hotels. The Group uses the term “real estate” indistinctively in these Consolidated Financial Statements to denote investment, development and/or trading properties activities. IRSA CP’s shares are listed and traded on both the BYMA (BYMA: IRCP) and the NASDAQ (NASDAQ: IRCP). IRSA’s shares are listed on the BYMA (Merval: IRSA) and the NYSE (NYSE: IRS).

The activities of the Group’s “Others” segment is carried out mainly through BHSA, where IRSA holds, directly or indirectly, a 29.91% interest. BHSA is a commercial bank offering a wide variety of banking activities and related financial services to individuals, small and medium-sized companies and large corporations, including the provision of mortgaged loans. BHSA’s shares are listed on the BYMA (BYMA: BHIP).

Operations Center in Israel

As stated in Note 1 to the consolidated financial statements as of June 30, 2020, on September 25, 2020 the Court decreed the insolvency and liquidation of IDBD and appointed a trustee for its shares along with a custodian over DIC and Clal shares. After this decision, the Board of Directors of IDBD was removed from its functions, therefore, the Group lost control on that date. For comparability purposes and as required by IFRS 5, the results of the Israel Operations Center have been reclassified to discontinued operations for all the years presented.

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IRSA Inversiones y Representaciones Sociedad Anónima

2. Summary of significant accounting policies

2.1. Basis of preparation of the Consolidated Financial Statement

(a) Basis of preparation

These Consolidated Financial Statements have been prepared in accordance with IFRS issued by IASB and interpretations issued by the IFRIC. All IFRS applicable as of the date of these Consolidated Financial Statements have been applied.

IAS 29 “Financial Reporting in Hyperinflationary Economies” requires that the financial statements of an entity whose functional currency is one of a hyperinflationary economy be expressed in terms of the current unit of measurement at the closing date of the reporting period, regardless of whether they are based on the historical cost method or the current cost method. To do so, in general terms, the inflation produced from the date of acquisition or from the revaluation date, as applicable, must be calculated in the non-monetary items. This requirement also includes the comparative information of the financial statements.

In order to conclude whether economy is categorized as hyperinflationary the provisions of IAS 29, details a series of factors to be considered, including the existence of a cumulative inflation rate in the three years preceding the measurement that approximates or exceeds 100%. It is for this reason that, in accordance with IAS 29, Argentina must be considered a country with highly inflationary economy starting July 1, 2018.

In addition, Law No. 27,468 (published in the Official Gazette on December 4, 2018), amended Section 10 of Law No. 23,928, as amended, and established that the derogation of all the laws or regulations imposing or authorizing price indexation, monetary restatement, cost variation or any other method for strengthening debts, taxes, prices or rates of goods, works or services, does not extend to financial statements, as to which the provisions of Section 62 of the General Companies Law No. 19,550 (1984 revision), as amended, shall continue to apply. Moreover, the referred law repealed Decree No. 1269/2002 dated July 16, 2002, as amended, and delegated to the Argentine Executive Branch the power to establish, through its controlling agencies, the effective date of the referred provisions in connection with the financial statements filed with it. Therefore, under General Resolution 777/2018 (published in the Official Gazette on December 28, 2018) the Argentine Securities Commission (CNV) ordered that issuers subject to its supervision shall apply the inflation adjustment to reflect the financial statements in terms of the measuring unit current at the end of the reporting period set forth in IAS 29 in their annual, interim and special financial statements closed on or after December 31, 2018. Thus, these financial statements have been reported in terms of the measuring unit current as of June 30, 2021 accordingly to IAS 29.

Pursuant to IAS 29, the Financial Statements of an entity whose functional currency is that of a high inflationary economy should be reported in terms of the measuring unit current as of the date of the Financial Statements. All the amounts included in the Statements of Financial Position which are not stated in terms of the measuring unit current as of the date of the Financial Statements should be restated applying the general price index. All items in the Consolidated Statements of Income and Other Comprehensive Income should be stated in terms of the measuring unit current as of the date of the Financial Statements, applying the changes in the general price index occurred from the date on which the revenues and expenses were originally recognized in the Financial Statements.

Adjustment for inflation in the initial balances has been calculated considering the indexes reported by the FACPCE based on the price indexes published by the Argentine Institute of Statistics and Census (INDEC).

The principal inflation adjustment procedures are the following:

| - | Monetary assets and liabilities that are already recorded at the measuring unit of the balance sheet closing date are not restated because they are already stated in terms of the measuring unit current as of the date of the financial statements.
| - | Non-monetary assets, and liabilities recorded at cost as of the balance sheet date and equity component are restated by applying the relevant adjustment coefficients.
| - | All items in the Consolidated Statements of Income and Other Comprehensive Income are restated applying the relevant conversion factors.
| - | The effect of inflation on the Group’s net monetary position is included in the Consolidated Statements of Income and Other Comprehensive Income under Financial results, net, in the item “Inflation adjustment”.
| - | Comparative figures have been adjusted for inflation following the procedure explained in the previous paragraphs.

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Upon initially applying inflation adjustment, the equity accounts were restated as follows:

| - | Capital was restated as from the date of subscription or the date of the most recent inflation adjustment for accounting purposes, whichever is later. The resulting amount was included in the “Comprehensive Inflation adjustment of share capital and treasury shares adjustment” account.
| - | Translation difference was restated in current terms.
| - | Other comprehensive income / (loss) was restated as from each accounting allocation.
| - | The other reserves in the Consolidated Statements of Income and Other Comprehensive Income were restated as of the initial application date, i.e., June 30, 2016.

The inflation index to be used and in accordance with the FACPCE Resolution No. 539/18, it will be determined based on the Wholesale Price Index (IPIM) until 2016, considering for the months of November and December 2015 the average variation of Consumer Price indices (CPI) of the Autonomous City of Buenos Aires, because during those two months there were no national IPIM measurements. Since January 2017, the National Consumer Price Index (National CPI) will be considered. The tables below show the evolution of these indices in the last two fiscal years and as of June 30, 2020according to official statistics (INDEC) following the guidelines described in Resolution 539/18.

Annual price variation |  | June 30, 2019 |  |  | June 30, 2020 |  |  | June 30, 2021 |  |  | Cumulative as of June 30, 2021 (3 years) |
|  |  | 56 | % |  |  | 43 | % |  |  | 50 | % |  |  | 234 | %

As a consequence of the aforementioned, these financial statements as of June 30, 2021 were restated in accordance with IAS 29.

(b) Current and non-current classification

The Group presents current and non-current assets, and current and non-current liabilities, as separate classifications in its Statement of Financial Position according to the operating cycle of each activity. Current assets and current liabilities include the assets and liabilities that are either realized or settled within 12 months from the end of the fiscal year.

All other assets and liabilities are classified as non-current. Current and deferred tax assets and liabilities (income tax liabilities) are presented separately from each other and from other assets and liabilities, classified as current and non-current, respectively.

(c) Presentation currency

The Consolidated Financial Statements are presented in millions of Argentine Pesos. Unless otherwise stated or the context otherwise requires, references to “Peso amounts” or “ARS”, are millions of Argentine Pesos, references to “US$” or “US Dollars” are millions of US Dollars and references to “NIS” are millions of New Israeli Shekel.

(d) Fiscal year-end

The fiscal year begins on July 1st and ends on June 30 of each year.

(e) Accounting criteria

See Notes 2.2 to 2.28 with the accounting policies of each item.

(f) Reporting cash flows

The Group reports operating activities cash flows using the indirect method. Interest paid is presented within financing activities. Interest received for financing of operating activities is presented within operating activities whereas the rest is presented within investing activities. The acquisitions and disposals of investment properties are disclosed within investing activities as this most appropriately reflects the Group’s business activities. Cash flows in respect to trading properties are disclosed within operating activities because these items are sold in the ordinary course of business.

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(g) Use of estimates

The preparation of Financial Statements at a certain date requires the Management to make estimations and evaluations affecting the amount of assets and liabilities recorded and contingent assets and liabilities disclosed at such date, as well as income and expenses recorded during the year. Actual results might differ from the estimates and evaluations made at the date of preparation of these Consolidated Financial Statements. The most significant judgments made by Management in applying the Group’s accounting policies and the major estimations and significant judgments are described in Note 3.

2.2. New accounting standards

The following standards and amendments have been issued by the IASB. Below we outline the standards and amendments that may potentially have an impact on the Group at the time of application.

Standards and amendments adopted by the Group

Standards and amendment | Description | Date of mandatory adoption for the Group in the year ended on
Covid-19 - related Rent Concessions - Amendments to IFRS 16. | As a result of the COVID-19 pandemic, rent concessions have been granted to lessees. Such concessions might take a variety of forms, including payment holidays and deferral of lease payments. In May 2020, the IASB made an amendment to IFRS 16 Leases which provides lessees with an option to treat qualifying rent concessions in the same way as they would if they were not lease modifications. In many cases, this will result in accounting for the concessions as variable lease payments in the period in which they are granted. Entities applying the practical expedients must disclose this fact, whether the expedient has been applied to all qualifying rent concessions or, if not, information about the nature of the contracts to which it has been applied, as well as the amount recognized in profit or loss arising from the rent concessions. | 06-30- 2021

The adoption of these amendment has not had a material impact for the Group.

Standards and amendments not yet adopted by the Group:

Standards and amendment | Description | Date of mandatory adoption for the Group in the year ended on
Accounting Policy Disclosures - Amendment to IAS 1 and Practical Statement 2 | The IASB amended IAS 1 to require entities to disclose their material accounting policies rather than their significant accounting policies. The amendments define what it implies and how to identify material accounting policy information. They also clarify that it is not necessary to disclose inmaterial accounting policy. If it is disclosed should not overshadow material accounting information. To support this amendment, the IASB also amended IFRS Practical Statement 2 on “Making materiality related judgments” to advise on how to apply the concept of materiality to disclosure of accounting policies. | 01-01-2023
Definition of accounting estimates - Amendments to IAS 8. | The amendment to IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors” clarifies how entities should distinguish changes in accounting policies from changes in accounting estimates. The distinction is important, because changes in accounting estimates are applied prospectively to future transactions and other future events, but changes in accounting policies are generally applied retrospectively to past transactions and other past events, as well as to the current exercise. | 01-01-2023
Amendment to IAS 1. | The narrow-scope amendments to IAS 1 Presentation of Financial Statements clarify that liabilities are classified as either current or non-current, depending on the rights that exist at the end of the reporting period. Classification is unaffected by the expectations of the entity or events after the reporting date (e.g., the receipt of a waver or a breach of covenant). The amendments also clarify what IAS 1 means when it refers to the ‘settlement’ of a liability. The amendments could affect the classification of liabilities, particularly for entities that previously considered management’s intentions to determine classification and for some liabilities that can be converted into equity. They must be applied retrospectively in accordance with the normal requirements in IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors. | 06-30-2023

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Amendment to IAS 37. | The amendment to IAS 37 clarifies that the direct costs of fulfilling a contract include both the incremental costs of fulfilling the contract and an allocation of other costs directly related to fulfilling contracts. Before recognizing a separate provision for an onerous contract, the entity recognizes any impairment loss that has occurred on assets used in fulfilling the contract. | 06-30-2023
Property, plant and equipment: Proceeds before intended use - Amendments to IAS 16. | The amendment to IAS 16 Property, Plant and Equipment (PP&E) prohibits an entity from deducting from the cost of an item of PP&E any proceeds received from selling items produced while the entity is preparing the asset for its intended use. It also clarifies that an entity is ‘testing whether the asset is functioning properly’ when it assesses the technical and physical performance of the asset. The financial performance of the asset is not relevant to this assessment. | 06-30-2023
Reference to the Conceptual Framework – Amendments to IFRS 3 | Minor amendments were made to IFRS 3 Business Combinations to update the references to the Conceptual Framework for Financial Reporting and add an exception for the recognition of liabilities and contingent liabilities within the scope of IAS 37 Provisions, Contingent Liabilities and Contingent Assets and Interpretation 21 Levies. The amendments also confirm that contingent assets should not be recognized at the acquisition date. | 06-30-2023
Annual Improvements to IFRS 2018-2020 | The following improvements were finalized in May 2020: • IFRS 9 Financial Instruments: clarifies which fees should be included in the 10% test for derecognition of financial liabilities. • IFRS 16 Leases – amendment of illustrative example 13 to remove the illustration of payments from the lessor relating to leasehold improvements, to remove any confusion about the treatment of lease incentives. • IFRS 1 First-time Adoption of International Financial Reporting Standards – allows entities that have measured their assets and liabilities at carrying amounts recorded in their parent’s books to also measure any cumulative translation differences using the amounts reported by the parent. This amendment will also apply to associates and joint ventures that have taken the same IFRS 1 exemption. • IAS 41 Agriculture – removal of the requirement for entities to exclude cash flows for taxation when measuring fair value under IAS 41. This amendment is intended to align with the requirement in the standard to discount cash flows on a post-tax basis. | 06-30-2023
Deferred tax - Amendments to IAS 12. | The IASB issued amendments to IAS 12 that clarifies how companies account for deferred tax related to assets and liabilities that arise from a single transaction. The effects of these amendments essentially mean that the initial recognition exception is not available for transactions that involve the recognition of both an asset and a liability, such as leases and decommissioning obligations. | 06-30-2024

Management is evaluating the impact that these new standards and amendments will have for the Group.

At the date of issuance of these consolidated financial statements, there are no other standards or modifications issued by the IASB which must be analyzed.

2.3. Scope of consolidation

(a) Subsidiaries

Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The Group also analyzes whether there is control when it does not hold more than 50% of the voting rights of an entity but does have capacity to define its relevant activities because of de-facto control.

The Group uses the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the Group. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date.

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The Group recognizes any non-controlling interest in the acquiree on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest’s proportionate share of the acquirer’s net assets. The Group chooses the method to be used on a case-by-case base.

The excess of the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the identifiable net assets acquired is recorded as goodwill. If the total of consideration transferred, non-controlling interest recognized and previously held interest measured is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognized directly in the Consolidated Statements of Income and Other Comprehensive Income as “Bargain purchase gains”.

The Group conducts its business through several operating and investment companies, the main ones are listed below:

|  |  |  |  |  | % of ownership interest held by the Group |
Name of the entity |  | Country |  | Main activity |  | 06.30.2021 |  |  | 06.30.2020 |  |  | 06.30.2019 |
IRSA’s direct interest: |  |  |  |  |  |  |  |  |  |  |  |  |
IRSA CP (1) |  | Argentina |  | Real estate |  |  | 79.92 | % |  |  | 80.65 | % |  |  | 83.80 | %
E-Commerce Latina S.A. |  | Argentina |  | Investment |  |  | 100.00 | % |  |  | 100.00 | % |  |  | 100.00 | %
Efanur S.A. |  | Uruguay |  | Investment |  |  | 100.00 | % |  |  | 100.00 | % |  |  | 100.00 | %
Hoteles Argentinos S.A.U. |  | Argentina |  | Hotel |  |  | 100.00 | % |  |  | 100.00 | % |  |  | 100.00 | %
Inversora Bolívar S.A. |  | Argentina |  | Investment |  |  | 100.00 | % |  |  | 100.00 | % |  |  | 100.00 | %
Llao Llao Resorts S.A. (2) |  | Argentina |  | Hotel |  |  | 50.00 | % |  |  | 50.00 | % |  |  | 50.00 | %
Nuevas Fronteras S.A. |  | Argentina |  | Hotel |  |  | 76.34 | % |  |  | 76.34 | % |  |  | 76.34 | %
Palermo Invest S.A. |  | Argentina |  | Investment |  |  | 100.00 | % |  |  | 100.00 | % |  |  | 100.00 | %
Ritelco S.A. |  | Uruguay |  | Investment |  |  | 100.00 | % |  |  | 100.00 | % |  |  | 100.00 | %
Tyrus S.A. |  | Uruguay |  | Investment |  |  | 100.00 | % |  |  | 100.00 | % |  |  | 100.00 | %
U.T. IRSA y Galerias Pacifico (2) |  | Argentina |  | Investment |  |  | 50.00 | % |  |  | 50.00 | % |  |  | 50.00 | %
IRSA CP’s direct interest: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Arcos del Gourmet S.A. |  | Argentina |  | Real estate |  |  | 90.00 | % |  |  | 90.00 | % |  |  | 90.00 | %
Emprendimiento Recoleta S.A. |  | Argentina |  | Real estate |  |  | 53.68 | % |  |  | 53.68 | % |  |  | 53.68 | %
Fibesa S.A. (3) |  | Argentina |  | Real estate |  |  | 100.00 | % |  |  | 100.00 | % |  |  | 100.00 | %
Panamerican Mall S.A. |  | Argentina |  | Real estate |  |  | 80.00 | % |  |  | 80.00 | % |  |  | 80.00 | %
Shopping Neuquén S.A. |  | Argentina |  | Real estate |  |  | 99.95 | % |  |  | 99.95 | % |  |  | 99.95 | %
Torodur S.A. |  | Uruguay |  | Investment |  |  | 100.00 | % |  |  | 100.00 | % |  |  | 100.00 | %
EHSA |  | Argentina |  | Investment |  |  | 70.00 | % |  |  | 70.00 | % |  |  | 70.00 | %
Centro de Entretenimiento La Plata |  | Argentina |  | Real estate |  |  | 100.00 | % |  |  | 100.00 | % |  |  | 100.00 | %
Pareto S.A. |  | Argentina |  | Design and software development |  |  | 93.63 | % |  |  | 69.69 | % |  |  | 69.69 | %
La Malteria |  | Argentina |  | Real estate |  |  | - |  |  |  | - |  |  |  | 100.00 | %
Tyrus S.A.’s direct interest: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
DFL and DN BV |  | Bermuda’s / Netherlands |  | Investment |  |  | 99.50 | % |  |  | 97.04 | % |  |  | 96.46 | %
I Madison LLC |  | USA |  | Investment |  |  | - |  |  |  | - |  |  |  | - |
IRSA Development LP |  | USA |  | Investment |  |  | - |  |  |  | - |  |  |  | - |
IRSA International LLC |  | USA |  | Investment |  |  | 100.00 | % |  |  | 100.00 | % |  |  | 100.00 | %
Jiwin S.A. |  | Uruguay |  | Investment |  |  | 100.00 | % |  |  | 100.00 | % |  |  | 100.00 | %
Liveck S.A. (5) |  | Uruguay |  | Investment |  |  | 100.00 | % |  |  | 100.00 | % |  |  | 100.00 | %
Real Estate Investment Group V LP (REIG V) |  | Bermuda’s |  | Investment |  |  | - |  |  |  | - |  |  |  | 100.00 | %
Real Estate Strategies LLC |  | USA |  | Investment |  |  | 100.00 | % |  |  | 100.00 | % |  |  | 100.00 | %
Efanur S.A.’s direct interest: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real Estate Investment Group VII LP (REIG VII) |  | Bermuda’s |  | Investment |  |  | 100.00 | % |  |  | 100.00 | % |  |  | 100.00 | %
DFL’s and DN BV’s direct interest: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
IDB Development Corporation Ltd. (4) |  | Israel |  | Investment |  |  | - |  |  |  | 100.00 | % |  |  | 100.00 | %
Dolphin IL Investment Ltd. |  | Israel |  | Investment |  |  | 100.00 | % |  |  | 100.00 | % |  |  | 100.00 | %
DIL’s direct interest: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Discount Investment Corporation Ltd. (4) |  | Israel |  | Investment |  |  | - |  |  |  | 83.72 | % |  |  | 83.77 | %
IDBD’s direct interest: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
IDB Tourism (2009) Ltd. (4) |  | Israel |  | Tourism services |  |  | - |  |  |  | 100.00 | % |  |  | 100.00 | %
IDB Group Investment Inc (4) |  | Israel |  | Investment |  |  | - |  |  |  | 100.00 | % |  |  | 100.00 | %
DIC’s direct interest: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property & Building Corporation Ltd. (4) |  | Israel |  | Real estate |  |  | - |  |  |  | 72.40 | % |  |  | 68.80 | %
Cellcom Israel Ltd. (4) |  | Israel |  | Telecommunications |  |  | - |  |  |  | 46.20 | % |  |  | 44.10 | %
Elron Electronic Industries Ltd. (4) |  | Israel |  | Investment |  |  | - |  |  |  | 61.06 | % |  |  | 61.06 | %
Bartan Holdings and Investments Ltd. (4) |  | Israel |  | Investment |  |  | - |  |  |  | 55.68 | % |  |  | 55.68 | %
Epsilon Investment House Ltd. (4) |  | Israel |  | Investment |  |  | - |  |  |  | 68.75 | % |  |  | 68.75 | %
Mehadrin Ltd. (4) |  | Israel |  | Agricultural |  |  | - |  |  |  | 43.75 | % |  |  | - |
PBC’s direct interest: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gav-Yam Bayside Land Corporation Ltd. (4) |  | Israel |  | Real estate |  |  | - |  |  |  | - |  |  |  | 51.70 | %
Ispro The Israeli Properties Rental Corporation Ltd. (4) |  | Israel |  | Real estate |  |  | - |  |  |  | 100.00 | % |  |  | 100.00 | %
Matam - Scientific Industries Center Haifa Ltd. (4) |  | Israel |  | Real estate |  |  | - |  |  |  | 50.10 | % |  |  | 50.10 | %
Hadarim Properties Ltd. (4) |  | Israel |  | Real estate |  |  | - |  |  |  | 100.00 | % |  |  | 100.00 | %
Property & Building (Commercial Centers) Ltd. (4) |  | Israel |  | Real estate |  |  | - |  |  |  | 100.00 | % |  |  | 100.00 | %
PBC USA Investments Inc (4) |  | USA |  | Real estate |  |  | - |  |  |  | 100.00 | % |  |  | 100.00 | %

(1) | Includes interest held through E-Commerce Latina S.A. and Tyrus S.A.
(2) | The Group has consolidated the investment in Llao Llao Resorts S.A. and UT IRSA and Galerías Pacífico considering its equity interest and a shareholder agreement that confers it majority of votes in the decision-making process.
(3) | Includes interest held through Ritelco S.A. and Torodur S.A.
(4) | Control was lost in September 2020. See Note 4.E.
(5) | Includes Tyrus’ and IRSA S.A.’s equity interests.

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The Group takes into account both quantitative and qualitative aspects in order to determine which non-controlling interests in subsidiaries are considered significant.

(b) Changes in ownership interests in subsidiaries without change of control

Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions – i.e., as transactions with the owners in their capacity as owners. The recorded value corresponds to the difference between the fair value of the consideration paid and/or received and the relevant share acquired and/or transferred of the carrying value of the net assets of the subsidiary.

(c) Disposal of subsidiaries with loss of control

When the Group ceases to have control any retained interest in the entity is re-measured at its fair value at the date when control is lost, with changes in carrying amount recognized in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognized in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognized in other comprehensive income are reclassified to profit or loss.

(d) Associates

Associates are all entities over which the Group has significant influence but not control, usually representing an interest between 20% and at least 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting, except as otherwise indicated as explained below. Under the equity method, the investment is initially recognized at cost, and the carrying amount is increased or decreased to recognize the investor’s share of the profit or loss of the investee after the date of acquisition. The Group’s investment in associates includes goodwill identified on acquisition.

As of each year-end or upon the existence of evidence of impairment, a determination is made as to whether there is any objective indication of impairment in the value of the investments in associates. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the Associates and its carrying value and recognizes the amount adjacent to “Share of profit / (loss) of associates and joint ventures “ in the Statement of Income and Other Comprehensive Income.

Profit and losses resulting from transactions between the Group and the associate are recognized in the Group’s financial statements only to the extent of the interests in the associates of the unrelated investor. Unrealized losses are eliminated unless the transaction reflects signs of impairment of the value of the asset transferred. The accounting policies of associates are modified to ensure uniformity within Group policies.

Note 8 includes summary financial information and other information of the Group’s associates.

The Group takes into account quantitative and qualitative aspects to determine which investments in associates are considered significant.

(e) Joint arrangements

Joint arrangements are arrangements of which the Group and other party or parties have joint control bound by a contractual arrangement. Under IFRS 11, investments in joint arrangements are classified as either joint ventures or joint operations depending on the contractual rights and obligations each investor has rather than the legal structure of the joint arrangement. A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. The Group has assessed the nature of its joint arrangements and determined them to be joint ventures.

Investments in joint ventures are accounted for under the equity method of accounting, pursuant to which interests in joint ventures are initially recognized in the Consolidated Statements of Financial Position at cost and adjusted thereafter to recognize the Group’s share of post-acquisition profits or losses and other comprehensive income in the Statements of Income and Other Comprehensive Income.

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The Group determines at each reporting date whether there is any objective evidence that the investment in a joint ventures is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the joint venture and its carrying value and recognizes such difference in "Share of profit / (loss) of associates and joint ventures" in the Consolidated Statements of Income and Other Comprehensive Income.

2.4. Segment information

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision-Maker (“CODM”), responsible for allocating resources and assessing performance. The operating segments are described in Note 6.

2.5. Foreign currency translation

(a) Functional and presentation currency

Items included in the Financial Statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The Consolidated Financial Statements are presented in Argentine Pesos, which is the Group’s presentation currency.

(b) Transactions and balances in foreign currency

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities nominated in foreign currencies are recognized in the profit or loss for the year.

Foreign exchange gains and losses are presented in the Consolidated Statements of Income and Other Comprehensive Income within other financial income, as appropriate, unless they have been capitalized.

(c) Group companies

The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

| (i) | assets, liabilities and goodwill for each Statement of Financial Position presented are translated at the closing rate at the date of that financial position;
| (ii) | income and expenses for each Statement of Comprehensive Income are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and
| (iii) | all resulting exchange differences are recognized in the Statement of Comprehensive Income.

The accounting policy of the Group consists in accounting for the translation difference of its subsidiaries by the “step-by-step” method according to IAS 21.

2.6. Investment properties

Investment properties are those properties owned by the Group that are held either to earn long-term rental income or for capital appreciation, or both, and that are not occupied by the Group for its own operations. Investment property also includes property that is being constructed or developed for future use as investment property. The Group also classifies as investment properties land whose future use has not been determined yet. The Group’s investment properties primarily comprise the Group’s portfolio of shopping malls and offices, certain property under development and undeveloped land.

Additionally, the Group recognizes economically “buildable potentials” in those properties that meet the following requirements: a) have buildable potential that are legally viable based on the application of approved Planning Codes and / or specific Ordinances. and b) have a commercial viability either due to their realization market or their constructive feasibility (see Note 9). If due to regulatory or legal regulations and commercial and/or economic aspects, the buildable potential can only be made by the Group and it has not been built yet, the asset value is not recognized.

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When a property is partially owner-occupied, with the rest being held for rental income or capital appreciation, the Group accounts for the portions separately. The portion that is owner-occupied is accounted for as property, plant and equipment under IAS 16 “Property, Plant and Equipment” and the portion that is held for rental income or capital appreciation, or both, is treated as investment properties under IAS 40 “Investment Properties”.

Investment properties are measured initially at cost. Cost comprises the purchase price and directly attributable expenditures, such as legal fees, certain direct taxes, commissions and in the case of properties under construction, the capitalization of financial costs.

For properties under development, capitalization of costs includes not only financial costs, but also all costs directly attributable to works in process, from commencement of construction until it is completed and property is in condition to start operating.

Direct expenses related to lease contract negotiation (such as payment to third parties for services rendered and certain specific taxes related to execution of such contracts) are capitalized as part of the book value of the relevant investment properties and amortized over the term of the lease.

Borrowing costs associated with properties under development or undergoing major refurbishment are capitalized. The finance cost capitalized is calculated using the Group’s weighted average cost of borrowings after adjusting for borrowings associated with specific developments. Where borrowings are associated with specific developments, the amount capitalized is the gross interest incurred on those borrowings less any investment income arising on their temporary investment. Finance cost is capitalized from the commencement of the development work until the date of practical completion. Capitalization of finance costs is suspended if there are prolonged periods when development activity is interrupted. Finance cost is also capitalized on the purchase cost of land or property acquired specifically for redevelopment in the short term but only where activities necessary to prepare the asset for redevelopment are in progress.

After initial recognition, investment property is carried at fair value. Investment property that is being redeveloped for continuing use as investment property or for which the market has become less active continues to be measured at fair value. Investment properties under construction are measured at fair value if the fair value is considered to be reliably determinable. On the other hand, properties under construction for which the fair value cannot be determined reliably, but for which the Group expects it to be determinable when construction is completed, are measured at cost less impairment until the fair value becomes reliably determinable or construction is completed, whichever is earlier.

Fair values are determined differently depending on the type of property being measured.

Generally, fair value of office buildings and land reserves is based on comparable active market prices, adjusted, if necessary, for differences in the nature, location or condition of the specific asset (Level 2).

The fair value of the Group’s portfolio of Shopping Malls is based on discounted cash flow projections. This method of valuation is commonly used in the shopping mall industry in the region where the Group conducts its operations.

As required by CNV 576/10 Resolution, valuations are performed as of the financial position date by accredited externals appraisers who have recognized professional qualifications and have recent experience in the location and category of the investment property being valued. These valuations form the basis for the carrying amounts in the Consolidated Financial Statements. The fair value of investment property reflects, among other things, rental income from current leases and other assumptions market participants would make when pricing the property under current market conditions.

Subsequent expenditures are capitalized to the asset’s carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the Group and the cost can be measured reliably. All other repairs and maintenance costs are expensed when incurred. When part of an investment property is replaced, the carrying amount of the replaced part is derecognized.

Changes in fair values are recognized in the Consolidated Statements of Income and Other Comprehensive Income under the line item “Net (loss) / gain from fair value adjustment of investment properties”.

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Asset transfers, including assets classified as investments properties which are reclassified under other items or vice-versa, may only be carried out when there is a change of use evidenced by: a) commencement of occupation of real property by the Group, where investment property is transferred to property, plant and equipment; b) commencement of development activities for sale purposes, where investment property is transferred to property for sale; c) the end of Group occupation, where it is transferred from property, plant and equipment to investment properties; or d) commencement of an operating lease transaction with a third party, where properties for sale are transferred to investment property. The transfer of investment properties to other items is carried out at the fair value of the asset on the date of change of use and said fair value is the cost of the property for the purposes of subsequent accounting according to the applicable standard. If an owner-occupied property is converted to investment property, the Group values the property at the corresponding carrying amount prior to transfer and classifies it as investment property at fair value on the date of change of use. The Group will treat any difference, as of that date, between the determined carrying amount of the property and the fair value, in the same way in which it would record a revaluation applying IAS 16. A transfer from inventories to Investment properties, will be accounted by recognizing the result between its previous book value and its fair value and any difference between the fair value of the property at that date and its previous carrying amount will be recognized in the result of the period.

The Group may sell its investment property when it considers that such property no longer forms part of the lease business. The carrying value immediately prior to the sale is adjusted to the transaction price, and the adjustment is recorded in the Consolidated Statements of Income and Other Comprehensive Income in the line “Net gain from fair value adjustments of investment properties”.

Investment properties are derecognized when they are disposed of or when they are permanently withdrawn from use and no future economic benefits are expected to arise from their disposals. The disposal of properties is recognized when the significant risks and rewards have been transferred to the buyer. As for unconditional agreements, proceeds are accounted for when title to property passes to the buyer and the buyer intends to make the respective payment. In the case of conditional agreements, disposal are accounted for when the conditions the agreements is subject to has been met. Where consideration receivable for the sale of the properties is deferred, it is discounted to present value. The difference between the discounted amount and the amount receivable is treated as interest income and recognized over the period using the effective interest method. Direct expenses related to the sale are recognized in the line "Other operating results, net" in the Consolidated Statements of Income and Other Comprehensive Income at the time they are incurred.

2.7. Property, plant and equipment

This category primarily comprises, buildings or portions of a building used for administrative purposes, machines, computers, and other equipment, motor vehicles, furniture, fixtures and fittings and improvements to the Group’s corporate offices.

The Group has also several hotel properties. Based on the respective contractual arrangements with hotel managers and / or given their direct operators nature, the Group considers it retains significant exposure to the variations in the cash flows of the hotel operations, and accordingly, hotels are treated as owner-occupied properties and classified under “Property, plant and equipment”.

All property, plant and equipment (“PPE”) is stated at acquisition cost less accumulated depreciation and impairment, if any. The acquisition cost includes expenditures which are directly attributable to the acquisition of the items. For properties under development, capitalization of costs includes not only financial costs, but also all costs directly attributable to works in process, from commencement of construction until it is completed and the property is in conditions to start operating.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. Such costs may include the cost of improvements and replacement of parts as they meet the conditions to be capitalized. The carrying amount of those parts that are replaced is derecognized. Repairs and maintenance are charged as incurred in the Consolidated Statements of Income and Other Comprehensive Income. Depreciation, based on a component approach, is calculated using the straight-line method to allocate the cost over the assets’ estimated useful lives.

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The remaining useful life as of June 30, 2021 is as follows:

Buildings and facilities |  | Between 5 and 50 years |
Machinery and equipment |  | Between 3 and 24 years |
Communication networks |  | Between 4 and 20 years |
Others |  | Between 3 and 25 years |

As of each fiscal year-end, an evaluation is performed to determine the existence of indicators of any decrease in recoverable value or useful life of assets. If there are any indicators, the recoverable amount and/or residual useful life of impaired asset(s) is estimated, and an impairment adjustment is made, if applicable. As of each fiscal year-end, the residual useful life of assets is estimated and adjusted, if necessary. The book amount of an asset is reduced to its recoverable value if the book value greater than its estimated recoverable value.

Gains from the sale of these assets are recognized when the significant risks and rewards have transferred to the buyer. This will normally take place on unconditional exchange, generally when legal title passes to the buyer and it is probable that the buyer will pay. For conditional exchanges, sales are recognized when these conditions are satisfied. Gains and losses on disposals are determined by comparing the proceeds net of direct expenses related to such sales, with the carrying amount as of the date of each transaction. Gains and losses from the disposal of property, plant and equipment items are recognized within “Other operating results, net” in the Statement of Income.

When assets of property, plant and equipment are transferred to investment property, the difference between the value at cost transferred and the fair value of the investment property is allocated to a reserve within equity.

2.8. Leases

Leases are recorded pursuant to IFRS 16. The Group recognizes an asset for the right of use and a liability at present value with respect to those contracts that meet the definition of lease agreements according to IFRS 16. For the prior periods’ leases were classified at their inception as either operating or finance leases based on the economic substance of the agreement.

A Group company is the lessor:

Properties leased out to tenants under operating leases are included in “Investment Properties” in the Statement of Financial Position. See Note 2.25 for the recognition of rental income.

A Group company is the lessee:

The Group acquires certain specific assets (especially machinery, computer equipment and real property exploitation concessions) under leases pursuant to IFRS 16. Assets so acquired are recorded as an asset at the present value of the minimum future lease payments. Capitalized lease assets are depreciated over the shorter of the estimated useful life of the assets and the lease term. The finance charges are charged over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Leases falling within the IFRS 16 exemption, where the Group acts as lessee are charged to results at the time they accrue. They mainly include contracts for less than one year and/or for non-material items.

2.9. Intangible assets

(a) Goodwill

Goodwill represents future economic benefits arising from assets that are not capable of being individually identified and separately recognized by the Group on an acquisition. Goodwill is initially measured as the difference between the fair value of the consideration transferred, plus the amount of non-controlling interest in the acquisition and, in business combinations achieved in stages, the acquisition-date fair value of the previously held equity interest in the acquisition; and the net fair value of the identifiable assets and liabilities assumed on the acquisition date.

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Goodwill is not amortized but tested for impairment at each fiscal year-end, or more frequently if there is an indication of impairment.

For the purpose of impairment testing, assets are grouped at the lowest levels for which there are separately identifiable cash flows, referred to as cash-generating units (“CGU”). In order to determine whether any impairment loss should be recognized, the book value of CGU or CGU groups is compared against its recoverable value. Net book value of CGU and CGU groups include goodwill and assets with limited useful life (such as, investment properties, property, plant and equipment, intangible assets and working capital).

If the recoverable amount of the CGU is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata on the basis of the carrying amount of each asset in the unit. Impairment losses recognized for goodwill are not reversed in a subsequent period.

The recoverable amount of a CGU is the higher of the fair value less costs-to-sell and the value-in-use. The fair value is the amount at which a CGU may be sold in a current transaction between unrelated, willing and duly informed parties. Value-in-use is the present value of all estimated future cash flows expected to be derived from CGU or CGU groups.

Goodwill is assigned to the Group’s cash generating units on the basis of operating segments. The recoverable amount of a cash generating unit is determined based on fair value calculations. These calculations use the price of the CGU assets and they are compared with the book values plus the goodwill assigned to each cash generating unit.

No material impairment was recorded as a result of the analysis performed. (Note 12).

(b) Computer software

Acquired computer software licenses are capitalized on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortized over their estimated useful lives of three years. Costs associated with maintaining computer software programs are recognized as an expense as incurred.

(c) Branding and client relationships

This relates to the fair value of brands and client relationships arising at the time of the business combination with IDBD. They are subsequently valued at cost, less the accumulated amortization or impairment. Client relationships have an average twelve-year useful life, while one of the brands have an indefinite useful life and the other ten-year useful life.

(d) Right to receive future units under barter agreements

The Group also enters into barter transactions where it normally exchanges undeveloped parcels of land with third-party developers for future property to be constructed on the bartered land. The Group generally receives monetary assets as part of the transactions and/or a right to receive future units to be constructed by developers. Such rights are initially recognized at cost (which is the fair value of the land assigned) and are not adjusted later, unless there is any sign of impairment.

At each year-end, the Group reviews the carrying amounts of its intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any of such signs exists, the recoverable amount of the asset is estimated in order to determine the extent, if any, of the impairment loss. For intangible assets with indefinite useful lives, the Group annually reviews the existence of an impairment, or more frequently if signs of impairment are identified.

2.10. Trading properties

Trading properties comprises those properties either intended for sale or in the process of construction for subsequent sale. Trading properties are carried at the lower of cost and net realizable value. Where there is a change in use of investment properties evidenced by the commencement of development with a view to sale, the properties are reclassified as trading properties at cost, which is the carrying value at the date of change in use. They are subsequently carried at the lower of cost and net realizable value. Cost comprises all costs of purchase, costs of conversion and other costs incurred in bringing the trading properties to their present location and condition.

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2.11. Inventories

Inventories include assets held for sale in the ordinary course of the Group’s business activities, assets in production or construction process for sale purposes, and materials, agricultural products, supplies or other assets held for consumption in the process of producing sales and/or services.

Inventories are measured at the lower of cost or net realizable value.

Net realizable value is the estimated selling price in the ordinary course of business less selling expenses. It is determined on an ongoing basis, taking into account the product type and aging, based on the accumulated prior experience with the useful life of the product. The Group periodically reviews the inventory and its aging and books an allowance for impairment, as necessary.

The cost of consumable supplies, materials and other assets is determined using the weighted average cost method, the cost of inventories of mobile phones, related accessories and spare parts is priced under the moving average method, and the cost of the remaining inventories is priced under the first in, first out (FIFO) method.

Cost comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Inventories and materials are initially recognized at cash price, and the difference being charged as finance cost.

2.12. Financial instruments

The Group classifies financial assets in the following categories: those to be measured subsequently at fair value, and those to be measured at amortized cost. This classification depends on whether the financial asset is an equity investment or a debt investment.

Debt investments

A debt investment is classified at amortized cost only if both of the following criteria are met: (i) the objective of the Group’s business model is to hold the asset to collect the contractual cash flows; and (ii) the contractual terms give rise on specified dates to cash derived solely from payments of principal and interest due on the principal outstanding. The nature of any derivatives embedded in the debt investment are considered in determining whether the cash derives solely from payment of principal and interest due on the principal outstanding and are not accounted for separately.

If either of the two criteria mentioned in the previous paragraph is not met, the debt instrument is classified at fair value through profit or loss. The Group has not designated any debt investment as measured at fair value through profit or loss to eliminate or significantly reduce an accounting mismatch. Changes in fair values and gains from disposal of financial assets at fair value through profit or loss are recorded within “Financial results, net” in the Statement of Income.

Equity investments

All equity investments, which are neither subsidiaries nor associate companies nor joint venture of the Group, are measured at fair value. Equity investments that are held for trading are measured at fair value through profit or loss. For all other equity investments, the Group can make an irrevocable election at initial recognition to recognize changes in fair value through other comprehensive income rather than profit or loss. The Group decided to recognize changes in fair value of equity investments through changes in profit or loss.

At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value though profit or loss are expensed in the Statement of Income.

In general, the Group uses the transaction price to ascertain the fair value of a financial instrument on initial recognition. In the other cases, the Group records a gain or loss on initial recognition only if the fair value of the financial instrument can be supported by other comparable transactions observable in the market for the same type of instrument or if based on a technical valuation that only inputs observable market data. Unrecognized gains or losses on initial recognition of a financial asset are recognized later on, only to the extent they arise from a change in factors (including time) that market participants would consider upon setting the price.

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Gains/losses on debt instruments measured at amortized cost and not identified for hedging purposes are charged to income where the financial assets are derecognized or an impairment loss is recognized, and during the amortization process under the effective interest method. The Group is required to reclassify all affected debt investments when and only when its business model for managing those assets changes.

The Group assesses at the end of each reporting period the expected losses for impairment of a financial asset or group of financial assets measured at amortized cost. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) can be reliably estimated. The amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate.

Financial assets and liabilities are offset, and the net amount reported in the statement of financial position, when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis, or realize the asset and settle the liability simultaneously.

2.13. Derivative financial instruments and hedging activities and options

Derivative financial instruments are initially recognized at fair value. The method of recognizing the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged.

The Group manages exposures to various risks using hedging instruments that provide coverage. The Group does not use derivative financial instruments for speculative purposes. To date, the Group has used put and call options, foreign currency future and forward contracts and interest rate swaps, as appropriate.

The Group’s policy is to apply hedge accounting where it is permissible under IFRS 9, practical to do so and its application reduces volatility, but transactions that may be effective hedges in economic terms may not always qualify for hedge accounting under IFRS 9.

The fair values of financial instruments that are traded in active markets are computed by reference to market prices. The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. The Group uses its judgment to select a variety of methods and make assumptions that are mainly based on market conditions existing at the end of each reporting year.

2.14. Groups of assets and liabilities held for sale

The groups of assets and liabilities are classified as held for sale where the Group is expected to recover their value by means of a sale transaction (rather than through use) and where such sale is highly probable. Groups of assets and liabilities held for sale are valued at the lower of their net book value and fair value less selling costs.

2.15. Trade and other receivables

Trade receivables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method.

An allowance for doubtful accounts is recorded based on the expected loss of the receivables portfolio. Indicators of doubtful accounts include significant financial distress of the debtor, the debtor potentially filing a petition for reorganization or bankruptcy, or any event of default or past due account.

In the case of larger non-homogeneous receivables, the impairment provision is calculated on an individual basis.

The Group collectively evaluates smaller-balance homogeneous receivables for impairment. For that purpose, they are grouped on the basis of similar risk characteristics, and account asset type, collateral type, past-due status and other relevant factors are taken into account.

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The amount of the allowance is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The carrying amount of the asset is reduced through the use of a separate account, and the amount of the loss is recognized in the Consolidated Statements of Income and Other Comprehensive Income within “Selling expenses”. Subsequent recoveries of amounts previously written off are credited against “Selling expenses” in the Consolidated Statements of Income and Other Comprehensive Income.

2.16. Other assets

Other assets are recognized initially at cost and subsequently measured at the acquisition cost or the net realizable value, the lower.

2.17. Trade and other payables

Trade payables are initially recognized at fair value and subsequently measured at amortized cost using the effective interest method.

2.18. Borrowings

Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized as finance cost over the period of the borrowings using the effective interest method.

2.19. Provisions

Provisions are recognized when: (i) the Group has a present (legal or constructive) obligation as a result of past events; (ii) it is probable that an outflow of resources will be required to settle the obligation; and (iii) a reliable estimate of the amount of the obligation can be made. Provisions are not recognized for future operating losses.

The Group bases its accruals on up-to-date developments, estimates of the outcomes of the matters and legal counsel´s experience in contesting, litigating and settling matters. As the scope of the liabilities becomes better defined or more information is available, the Group may be required to change its estimates of future costs, which could have a material adverse effect on its results of operations and financial condition or liquidity.

Provisions are measured at the present value of the cash flows expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provisions due to passage of time is recognized in the Consolidated Statements of Income and Other Comprehensive Income.

2.20. Irrevocable right of use of the capacity of underwater communication lines

Transactions, carried out by Cellcom, to acquire an irrevocable right of use of the capacity of underwater communication lines are accounted for as service contracts. The amount paid for the rights of use of the communication lines is recognized as “Prepaid expenses” under trade and other receivables and is amortized over a straight-line basis during the period set forth in the contract (including the option term), which is the estimated useful life of such capacity.

2.21. Employee benefits

(a) Defined contribution plans

The Group operates a defined contribution plan, which is a pension plan under which the Group pays fixed contributions into a separate entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current year or prior periods. The contributions are recognized as employee benefit expense in the Consolidated Statements of Income and Other Comprehensive Income in the fiscal year they are due.

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(b) Termination benefits

Termination benefits are payable when employment is terminated by the Group before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group recognizes termination benefits when it is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal or as a result of an offer made to encourage voluntary termination as a result of redundancy.

(c) Bonus plans

The Group recognizes a liability and an expense for bonuses based on a formula that takes into consideration the profit attributable to the Company’s shareholders after certain adjustments. The Group recognizes a provision where contractually obliged or where there is a past practice that has created a constructive obligation.

(d) Defined benefit plans

The Group’s net obligation concerning defined benefit plans are calculated on an individual basis for each plan, estimating the future benefits employees have gained in exchange for their services in the current and prior periods. The benefit is disclosed at its present value, net of the fair value of the plan assets. Calculations are made on an annual basis by a qualified actuary.

(e) Share-based payments

The fair value of share-based payments is measured at the date of grant. The Group measures the fair value using the valuation technique that it considers to be the most appropriate to value each class of award. Methods used may include Black-Scholes calculations or other models as appropriate. The valuations take into account factors such as non-transferability, exercise restrictions and behavioral considerations.

The fair value of the share-based payment is expensed and charged to income under the straight-line method over the vesting period in which the right to the equity instrument becomes irrevocable (“vesting period”); such value is based on the best available estimate of the number of equity instruments expected to vest. Such estimate is revised if subsequent information available indicates that the number of equity instruments expected to vest differs from original estimates.

(f) Other long-term benefits

The net obligations of IDBD, DIC and its subsidiaries concerning employee long-term benefits, other than retirement plans, is the amount of the minimum future benefits employees have gained in exchange for their services in the current and prior periods. These benefits are discounted at their present values.

2.22. Current income tax, deferred income tax and minimum presumed income tax

Tax expense for the year comprises the charge for tax currently payable and deferred income. Income tax is recognized in the Consolidated Statements of Income and Other Comprehensive Income, except to the extent that it relates to items recognized in other comprehensive income or directly in equity, in which case, the tax is also recognized in other comprehensive income or directly in equity, respectively.

Current income tax expense is calculated on the basis of the tax laws enacted or substantially enacted at the date of the Statements of Financial Position in the countries where the Company and its subsidiaries operate and generate taxable income. The Group periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. The Group establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is recognized, using the deferred tax liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the Consolidated Financial Statements. However, deferred tax liabilities are not recognized if they arise from the initial recognition of goodwill; deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the date of the Statements of Financial Position and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.

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Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. Deferred income tax is provided on temporary differences arising on investments in subsidiaries, joint ventures and associates, except for deferred income tax liabilities where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

The Group is able to control the timing of dividends from its subsidiaries and hence does not expect taxable profit. Hence, deferred tax is recognized in respect of the retained earnings of overseas subsidiaries only if at the date of the Statements of Financial Position, dividends have been accrued as receivable a binding agreement to distribute past earnings in future has been entered into by the subsidiary or there are sale plans in the foreseeable future.

Entities in Argentina are subject to the Minimum Presumed Income Tax (“MPIT”). Pursuant to this tax regime, an entity is required to pay the greater of the income tax or the MPIT. The MPIT provision is calculated on an individual entity basis at the statutory asset tax rate of 1% and is based upon the taxable assets of each company as of the end of the year, as defined by Argentine law. Any excess of the MPIT over the income tax may be carried forward and recognized as a tax credit against future income taxes payable over a 10-year period. When the Group assesses that it is probable that it will use the MPIT payment against future taxable income tax charges within the applicable 10-year period, recognizes the MPIT as a current or non-current receivable, as applicable, within “Trade and other receivables” in the Statements of Financial Position.

The minimum presumed income tax was repealed by Law N ° 27,260 in its article 76 for the periods that begin as of January 1,2020.

Regarding the above mentioned, considering Instruction No. 2 of the Federal Administration of Public Revenues (AFIP), it is not appropriate to record the provision of the above mention tax, in the event that accounting and tax losses occur.

2.23. Cash and cash equivalents

Cash and cash equivalents include cash on hand, deposits held with banks, and other short-term highly liquid investments with original maturities of three months or less and that they are subject to a negligible risk of change in value. Bank overdrafts are not included.

2.24. Revenue recognition

The group identifies contracts with customers and evaluates the goods and services committed therein to determine performance obligations and their classification between performance obligations that are satisfied at a given time or over time.

Revenue from satisfaction of performance obligations at a given time is recognized when the client obtains control of the committed asset or service considering whether there is a right to collection, if the client has the physical possession, if the client has the legal right and if they have the transferred the risks and benefits.

In accordance with IFRS 15, the Group recognizes revenues over time from the sales of real estate developments in which there is no alternative use for the asset and the Group has the right to demand payment of the contract. When these conditions are not met, the income is recognized at the time of delivery or deed, depending on the case, when the risk transfers are completed, the collection is reasonably assured and there is a price already determined.

Revenue from satisfaction of performance obligations over time for real estate developments is recognized by measuring progress towards compliance with the obligation when it can be measured reliably. For this measurement, the Group uses the resourced method, that is, the effort consumed by the entity and determines the percentage of progress based on the estimate of the total development costs.

The Group’s revenue is recognized at the probable value of the consideration to which it will be entitled in exchange for transferring the products or services to the customer which is not expected to suffer significant changes.

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| · | Rental and services - Shopping malls portfolio

Revenues derived from business activities developed in the Group’s shopping malls mainly include rental income under operating leases, admission rights, commissions and revenue from several complementary services provided to the Group’s lessees.

Rental income from shopping mall, admission rights and commissions, are recognized in the Consolidated Statements of Income and Other Comprehensive Income on a straight-line basis over the term of the leases. When lease incentives are granted, they are recognized as an integral part of the net consideration for the use of the property and are therefore recognized on the same straight-line basis.

Contingent rents, i.e. lease payments that are not fixed at the inception of a lease, are recorded as income in the periods in which they are known and can be determined. Rent reviews are recognized when such reviews have been agreed with tenants.

The Group’s lease contracts also provide that common area maintenance charges and collective promotion funds of the Group’s shopping malls are borne by the corresponding lessees, generally on a proportionally basis. These common area maintenance charges include all expenses necessary for various purposes including, but not limited to, the operation, maintenance, management, safety, preservation, repair, supervision, insurance and enhancement of the shopping malls. The lessor is responsible for determining the need and suitability of incurring a common area expense. The Group makes the original payment for such expenses, which are then reimbursed by the lessees. The Group considers that it acts as a principal in these cases. Service charge income is presented separately from property operating expenses. Property operating expenses are expensed as incurred.

| · | Rental and services - Offices and other rental properties

Rental income from offices and other rental properties include rental income from offices leased out under operating leases, income from services and expenses recovery paid by tenants.

Rental income from offices and other rental properties is recognized in the Consolidated Statements of Income and Other Comprehensive Income on a straight-line basis over the term of the leases. When lease incentives are granted, they are recognized as an integral part of the net consideration for the use of the property and are therefore recognized on the same straight-line basis.

A substantial portion of the Group’s leases require the tenant to reimburse the Group for a substantial portion of operating expenses, usually a proportionate share of the allocable operating expenses. Such property operating expenses include necessary expenses such as property operating, repairs and maintenance, security, janitorial, insurance, landscaping, leased properties and other administrative expenses, among others. The Group manages its own rental properties. The Group makes the original payment for these expenses, which are then reimbursed by the lessees. The Group considers that it acts as a principal in these cases. The Group accrues reimbursements from tenants as service charge revenue in the period the applicable expenditures are incurred and is presented separately from property operating expenses. Property operating expenses are expensed as incurred.

| · | Revenue from communication services and sale of communication equipment

Revenue derived from the use of communication networks by the Group, including mobile phones, Internet services, international calls, fixed line calls, interconnection rates, roaming service rates and television, are recognized when the service is provided, proportionally to the extent the transaction has been realized, and provided all other criteria have been met for revenue recognition.

Revenue from the sale of mobile phone cards is initially recognized as deferred revenue and then recognized as revenue as they are used or upon expiration, whichever takes place earlier.

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A transaction involving the sale of equipment to a final user normally also involves a service sale transaction. In general, this type of sale is performed without a contractual obligation by the client to consume telephone services for a minimum amount over a predetermined period. As a result, the Group records the sale of equipment separately of the performance obligations and recognizes revenue pursuant to the transaction value upon delivery of the equipment to the client. Revenue from telephone services is recognized and accounted for as they are provided over time. When the client is bound to make a minimum consumption of services during a predefined period, the contract formalizes a transaction of several elements and, therefore, revenue from the sale of equipment is recorded at an amount that should not exceed its fair value, and is recognized upon delivery of the equipment to the client and provided the criteria for recognition are met. The Group ascertains the fair value of individual elements, based on the price at which it is normally sold, after taking into account the relevant discounts.

Revenue derived from long-term contracts is recognized at the present value of future cash flows, discounted at market rates prevailing on the transaction date. Any difference between the original credit and its net present value is accounted for as interest income over the credit term.

These revenues have been recognized in discontinued operations. See Note 4.E.

| · | Revenue from agricultural products

Revenue from agricultural products is recognized when the product is delivered and at the time all other criteria for revenue recognition have been met.

These revenues have been recognized in discontinued operations. See Note 4.E.

| · | Revenue from supermarkets

Revenue from the sale of goods in the ordinary course of business is recognized at the fair value of the consideration collected or receivable, net of returns and discounts. When the credit term is short and financing is that typical in the industry, consideration is not discounted. When the credit term is longer than the industry’s average, in accounting for the consideration, the Group discounts it to its net present value by using the client’s risk premium or the market rate. The difference between the fair value and the nominal amount is accounted for under financial income. If discounts are granted and their amount can be measured reliably, the discount is recognized as a reduction of revenue.

These revenues have been recognized in discontinued operations. See Note 4.E.

2.25. Cost of sales

The cost of sales, includes the acquisition costs and the operational and management costs for shopping malls held by the Group as part of its real estate investments.

The Group’s cost of sales in relation to the supply of communication services mainly includes the costs to purchase equipment, salaries and related expenses, service costs, royalties, ongoing license dues, interconnection and roaming expenses, cell tower lease costs, depreciation and amortization expenses and maintenance expenses directly related to the services provided and they are classified in discontinued operations.

The cost of sales of supermarkets, includes the acquisition costs for the products less discounts granted by suppliers, as well as all expenses associated with storing and handling inventories and is classified as discontinued operations.

2.26. Cost of borrowings and capitalization

The costs for general and specific loans that are directly attributable to the acquisition, construction or production of suitable assets for which a prolonged period is required to place them in the conditions required for their use or sale, are capitalized as part of the cost of those assets until the assets are substantially ready for use or sale. The general loan costs are capitalized according to the average debt rate of the Group. Foreign exchange differences for loans in foreign currency are capitalized if they are considered an adjustment to interest costs. The interest earned on the temporary investments of a specific loan for the acquisition of qualifying assets are deducted from the eligible costs to be capitalized. The rest of the costs from loans are recognized as expenses in the period in which they are incurred.

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2.27. Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.

When any Group’s subsidiary purchases the Company’s equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders until the shares are cancelled or reissued. When such ordinary shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and related income tax effects, is included in equity.

Instruments issued by the Group that will be settled by the Company delivering a fixed number of its own equity instruments in exchange for a fixed amount of cash or another financial asset are classified as equity.

2.28. Comparability of information

The balances as of June 30, 2020 and 2019 that are disclosed for comparative purposes were restated in accordance with IAS 29. See Note 2.1. Certain items from prior fiscal years have been reclassified for consistency purposes related with the loss of control of IDBD (see Notes 1 and 4.E).

3. Significant judgments, key assumptions and estimates

Not all of these significant accounting policies require management to make subjective or complex judgments or estimates. The following is intended to provide an understanding of the policies that management considers critical because of the level of complexity, judgment or estimations involved in their application and their impact on the Consolidated Financial Statements. These judgments involve assumptions or estimates in respect of future events. Actual results may differ from these estimates.

Estimation | Main assumptions | Potential implications | Main references
Control, joint control or significant influence | Judgment relative to the determination that the Group holds an interest in the shares of investees (considering the existence and influence of significant potential voting rights), its right to designate members in the executive management of such companies (usually the Board of directors) based on the investees’ bylaws; the composition and the rights of other shareholders of such investees and their capacity to establish operating and financial policies for investees or to take part in the establishment thereof. | Accounting treatment of investments as subsidiaries (consolidation) or associates (equity method) | Note 2.3
Recoverable amounts of cash-generating units (even those including goodwill), associates and assets. | The discount rate and the expected growth rate before taxes in connection with cash-generating units. The discount rate and the expected growth rate after taxes in connection with associates. Cash flows are determined based on past experiences with the asset or with similar assets and in accordance with the Group’s best factual assumption relative to the economic conditions expected to prevail. Business continuity of cash-generating units. Appraisals made by external appraisers and valuators with relation to the assets’ fair value, net of realization costs (including real estate assets). | Should any of the assumptions made be inaccurate, this could lead to differences in the recoverable values of cash-generating units. | Note 8 – Investments in associates and joint ventures Note 10 – Property, plant and equipment Note 12 – Intangible assets
Fair value valuation of investment properties | Fair value valuation made by external appraisers and valuators. See Note 10. | Incorrect valuation of investment property values | Note 9 – Investment properties
Income tax | The Group estimates the income tax amount payable for transactions where the Treasury’s Claim cannot be clearly determined. Additionally, the Group evaluates the recoverability of assets due to deferred taxes considering whether some or all of the assets will not be recoverable. | Upon the improper determination of the provision for income tax, the Group will be bound to pay additional taxes, including fines and compensatory and punitive interest. | Note 21 – Taxes
Allowance for doubtful accounts | A periodic review is conducted of receivables risks in the Group’s clients’ portfolios. Bad debts based on the expiration of account receivables and account receivables’ specific conditions. | Improper recognition of charges / reimbursements of the allowance for bad debt. | Note 15 – Trade and other receivables
Level 2 and 3 financial instruments | Main assumptions used by the Group are: · Discounted projected income by interest rate · Values determined in accordance with the shares in equity funds on the basis of its Financial Statements, based on fair value or investment assessments. · Comparable market multiple (EV/GMV ratio). · Underlying asset price (Market price); share price volatility (historical) and market interest-rate (Libor rate curve). | Incorrect recognition of a charge to income / (loss). | Note 14 – Financial instruments by category
Probability estimate of contingent liabilities. | Whether more economic resources may be spent in relation to litigation against the Group; such estimate is based on legal advisors’ opinions. | Charge / reversal of provision in relation to a claim. | Note 19 – Provisions
Qualitative considerations for determining whether or not the replacement of the debt instrument involves significantly different terms | The entire set of characteristics of the exchanged debt instruments, and the economic parameters represented therein: Average lifetime of the exchanged liabilities; Extent of effects of the debt terms (linkage to index; foreign currency; variable interest) on the cash flows from the instruments. | Classification of a debt instrument in a manner whereby it will not reflect the change in the debt terms, which will affect the method of accounting recording. | Note 14 – Financial instruments by category

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4. Acquisitions and disposals

A) Sale of Boston Tower building

During the fiscal year ended on June, 30, 2021, our subsidiary, IRSA Propiedades Comerciales completed the sale of several units from the Boston Tower Building, located at 256 Della Paolera (Catalinas District, Autonomous City of Buenos Aires). Below, we list the details of the units that IRSA Propiedades Comerciales sold:

On July 15, 2020, IRSA Propiedades Comerciales completed the sale with possession of a medium-height floor for a total area of approximately 1,247 square meters and 5 parking lots located in the building.

The total consideration of the transaction was ARS 666.

On August 25, 2020, IRSA Propiedades Comerciales completed the sale of other 5 floors of the Boston Tower located at 265 Della Paolera in the Catalinas District in the Autonomous City of Buenos Aires for a gross rental area of approximately 6,235 square meters and 25 parking spaces located in the building.

The total consideration of the transaction was ARS 3,574.

On November 5, 2020, IRSA Propiedades Comerciales completed the sale with possession of 4 floors of the Boston Tower located at 265 Della Paolera in the Catalinas District in the Autonomous City of Buenos Aires for a gross rental area of approximately 3,892 square meters and 15 parking spaces located in the building.

The total consideration of the transaction was ARS 2,271.

On November 12, 2020, IRSA Propiedades Comerciales completed the sale with possession with an unrelated third party a bill of sale with possession of 3 floors of the Boston Tower located at 265 Della Paolera in the Catalinas District in the Autonomous City of Buenos Aires for a gross rental area of approximately 3,266 square meters, a commercial space located on the ground floor of approximately 225 square meters and 15 parking spaces located in the building.

The total consideration of the transaction was ARS 1,906.

B) Sale of Bouchard building

On July 30, 2020, IRSA Propiedades Comerciales completed the sale to an unrelated third party of the entire “Bouchard 710” building, located in the Plaza Roma District of the Autonomous City of Buenos Aires, to an unrelated third party. The tower consists of 15,014 square meters of gross rental area on 12 office floors and 116 parking spaces. The total consideration of the transaction was ARS 8,791.

C) Acquisition of Hudson Property

On December 11, 2020, the purchase bill of the property called Casonas located in Hudson, Berazategui district was signed, paying the remaining balance of 90% for USD 1 million. The initial 10% had been paid in during the year ended June 30, 2018.

See Note 35 for sales after June 30, 2021.

D) Pareto S.A. - Share capital increase

As of June 30, 2020, the Company’s capital stock was represented by 116,500 ordinary shares with a par value of ARS 1 per share and with the right to 1 vote per share.

On April 19, 2021, the Ordinary and Extraordinary General Shareholders’ Meeting decided to capitalize the entire share premium and inflation adjustment of share capital. Additionally, new irrevocable contributions were made which were capitalized in the same date.

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The total of ordinary shares totaled 517,722,151, leaving the share capital as follows:

|  | Number of shares |  |  | Share capital |
June 30,2020 |  |  | 116,500 |  |  |  | 116,500 |
Capitalization of issueshare premium and capitalinflation adjustment of share capital |  |  | 137,722,151 |  |  |  | 137,722,151 |
Issuance of ordinary shares |  |  | 380,000,000 |  |  |  | 380,000,000 |
June 30,2021 |  |  | 517,838,651 |  |  |  | 517,838,651 |

E) Lipstick Building, New York, United States

On August 7, 2020, due to Ground Lease Building’s low profitability resulting from the expensive price for rental of the land, we executed an agreement with the owner of the Ground Lease Building through which we terminated our legal relationship and discharged our duties as administrators of the building. Consequently, as of June 30, 2020, we are neither responsible for the Metropolitan’s liabilities associated with the Ground Lease, nor the assets and liabilities associated with the building and its administration. We also made an agreement with the owner of the Ground Lease Building that states that Metropolitan is completely released from responsibilities, except for (i) claims for liabilities prior to June 1, 2020 from people who have performed work or provided services in the Ground Lease Building or to Metropolitan; and (ii) claims from people who have had an accident on the property dated before August 7, 2020. This situation impacted our Consolidated Financial Statements as of June 30,2020.

F) Investment in Condor Hospitality Trust

On July 19, 2019, Condor completed a merger agreement with Nextpoint Hospitality Trust (“NHT”). The acquisition’s closing, originally scheduled for March 23, 2020, did not occur.

On October 14, 2020, Condor executed an agreement with NHT to resolve each and every claim between them arising from the aforementioned merger agreement. Pursuant to this agreement, Condor collected a compensation which totalled USD 7.0 million.

On June 29, 2021, one of our subsidiaries exercised a put right through which our subsidiary’s Class E preferred shares, in Condor, plus the unpaid accrued dividends as of June 30, 2021, were converted into common shares, which were issued on July 29, 2021.

As of the date of submission of this form, we directly and indirectly own 3,194,214 common shares, which represent 21.7% of the capital stock of Condor. We are currently evaluating different strategic alternatives to create value for our shareholders.

G) Loss of control of IDBD

As described in Note 1. to these financial statements, at the end of September 2020, the Group has lost control of IDBD, deconsolidating the related assets and liabilities and reclassifying the operations from this operations center to discontinued operations.

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The following table details the net assets disposed:

|  | 09.30.2020 |
ASSETS |  |  |
Investment properties |  |  | 117,547 |
Property, plant and equipment |  |  | 47,989 |
Trading properties |  |  | 7,690 |
Intangible assets |  |  | 36,546 |
Right-of-use assets |  |  | 25,853 |
Investments in associates and joint ventures |  |  | 48,443 |
Deferred income tax assets |  |  | 568 |
Income tax credit |  |  | 426 |
Restricted assets |  |  | 8,400 |
Trade and other receivables |  |  | 70,693 |
Investments in financial assets |  |  | 31,643 |
Derivative financial instruments |  |  | 368 |
Inventories |  |  | 4,712 |
Group of assets held for sale |  |  | 55,028 |
Cash and cash equivalents |  |  | 145,330 |
TOTAL ASSETS |  |  | 601,236 |
Borrowings |  |  | 425,321 |
Lease liabilities |  |  | 23,696 |
Deferred income tax liabilities |  |  | 16,261 |
Trade and other payables |  |  | 30,751 |
Income tax liabilities |  |  | 596 |
Provisions |  |  | 7,095 |
Employee benefits |  |  | 624 |
Derivative financial instruments |  |  | 624 |
Salaries and social security liabilities |  |  | 4,427 |
Group of liabilities held for sale |  |  | 28,805 |
TOTAL LIABILITIES |  |  | 538,200 |
TOTAL NET ASSETS |  |  | 63,036 |
Non-controlling interest |  |  | (62,519 | )
Result for loss of control |  |  | (517 | )
Recycling of currency translation adjustment and other reserves |  |  | (3,505 | )
Total result for loss of control (*) |  |  | (4,022 | )

| (*) | Included within discontinued operations.

H) Distribution of dividends in kind

On October 26, 2020, our shareholders held an Ordinary and Extraordinary ‘Meeting and approved an in kind dividend distribution equivalent to ARS 484 million (representative of ARS 0.84 per share) and payable in shares of IRSA CP. Our shareholders decided to consider IRSA CP’s ‘quoted price per share as of October 23, 2020, which resulted amounted ARS 320 per share. Pursuant to that shareholders’ decision, we distributed 1,512,500 ordinary shares of IRSA CP. We reflected this transaction on our financial statements as a change in equity, which generated a reduction of the equity attributable to the controlling shareholders totalling ARS 725 million restated for inflation as of June 30, 2021. On the date of this form, our interest in IRSA CP amounts to 79.92%.

I) Manibil Sale

On December 22, 2020, we completed the sale of all our holdings in Manibil S.A., a company engaged in the real estate business. Those holdings amounted 217,332,873 ordinary Class B, nominative not endorsable shares, each entitled to 1 vote and with a par value of ARS 1 per share. The shares totalled the 49% of Manibil S.A.’s capital stock. As consideration for this operation, on February 2021, we acquired the right to receive future 953 square meters units located in different residential developments. This operation represents an ARS 37 million gain, as disclosed on our financial statements within the “Other operating results, net” category.

5. Financial risk management and fair value estimates

The Group’s activities expose it to a variety of financial risks: market risk (including foreign currency risk, interest rate risk, indexing risk due to specific clauses and other price risks), credit risk, liquidity risk and capital risk. Within the Group, risk management functions are conducted in relation to financial risks associated to financial instruments to which the Group is exposed during a certain period or as of a specific date.

The general risk management policies of the Group seek both to minimize adverse potential effects on the financial performance of the Group and to manage and control the financial risks effectively. The Group uses financial instruments to hedge certain risk exposures when deemed appropriate based on its internal management risk policies, as explained below.

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The Group’s principal financial instruments comprise cash and cash equivalents, receivables, payables, interest bearing assets and liabilities, other financial liabilities, other investments and derivative financial instruments. The Group manages its exposure to key financial risks in accordance with the Group’s risk management policies.

The Group’s management framework includes policies, procedures, limits and allowed types of derivative financial instruments. The Group has established a Risk Committee, comprising members of senior management and a member of Cresud’s Audit Committee (Parent Company of IRSA), which reviews and oversees management’s compliance with these policies, procedures and limits and has overall accountability for the identification and management of risk across the Group.

This section provides a description of the principal risks that could have a material adverse effect on the Group’s strategy, performance, results of operations and financial condition. The risks facing the businesses, set out below, do not appear in any particular order of potential materiality or probability of occurrence.

The analysis of sensitivities to market risks included below are based on a change in one factor while holding all other factors constant. In practice this is unlikely to occur, and changes in some of the factors may be correlated – for example, changes in interest rate and changes in foreign currency rates.

This sensitivity analysis provides only a limited, point-in-time view. The actual impact on the Group’s financial instruments may differ significantly from the impact shown in the sensitivity analysis.

(a) Market risk management

The market risk is the risk of changes in the market price of financial instruments with which the Group operates. The Group’s market risks arise from open positions in foreign currencies, interest-bearing assets and liabilities and equity securities of certain companies, to the extent that these are exposed to market value movements. The Group sets limits on the exposure to these risks that may be accepted, which are monitored on a regular basis.

Foreign Exchange risk and associated derivative financial instruments

The Group publishes its Consolidated Financial Statements in Argentine pesos but conducts operations and holds positions in other currencies. As a result, the Group is exposed to foreign currency exchange risk through exchange rate movements, which affect the value of the Group’s foreign currency positions. Foreign exchange risk arises when future commercial transactions or recognized assets or liabilities are denominated in a currency that is not the entity’s functional currency.

The real estate, commercial and/or financial activities of the Group’s subsidiaries have the Argentine Peso as functional currency. An important part of the business activities of these subsidiaries is conducted in that currency, thus not exposing the Group to foreign exchange risk. Other Group’s subsidiaries have other functional currencies, principally US Dollar. In the ordinary course of business, the Group, through its subsidiaries, transacts in currencies other than the respective functional currencies of the subsidiaries. These transactions are primarily denominated in US Dollars. Net financial position exposure to the functional currencies is managed on a case-by-case basis, partly by entering into foreign currency derivative instruments and/or by borrowings in foreign currencies, or other methods, considered adequate by the Management, according to circumstances.

Financial instruments are considered sensitive to foreign exchange rates only when they are not in the functional currency of the entity that holds them. The following table shows the net carrying amounts of the Company’s financial instruments nominated in US$, broken down by the functional currencies in which the Company operates for the years ended June 30, 2021 and 2020. The amounts are presented in Argentine Pesos, the presentation currency of the Group:

|  | Net monetary position (liability) / asset |
Functional currency |  | June 30, 2021 |  |  | June 30, 2020 |
|  | US$ |  |  | US$ |
Argentine Peso |  |  | (43,811 | ) |  |  | (57,672 | )
Uruguayan Peso |  |  | - |  |  |  | 228 |
Total |  |  | (43,811 | ) |  |  | (57,444 | )

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The Group estimates that, other factors being constant, a 10% appreciation of the foreign currency against Argentine Peso at year-end would have an impact in the Statement of Income and Other Comprehensive Income before income tax for the years ended June 30, 2021 and 2020 for an amount of ARS 4,341 (loss) and ARS 5,744 (loss), respectively.

On the other hand, the Group also uses derivatives, such as future exchange contracts, to manage its exposure to foreign currency risk. As of June 30, 2020 has future exchange contracts pending for an amount of ARS 143, there are no such contracts as of June 30,2021.

Interest rate risk

The Group is exposed to interest rate risk on its investments in debt instruments, short-term and long-term borrowings and derivative financial instruments.

The primary objective of the Group’s investment activities is to preserve principal while at the same time maximizing yields without significantly increasing risk. To achieve this objective, the Group diversifies its portfolio in accordance with the limits set by the Group. The Group maintains a portfolio of cash equivalents and short-term investments in a variety of securities, including both government and corporate obligations and money market funds.

The Group’s interest rate risk principally arises from long-term borrowings (Note 20). Borrowings issued at variable rates expose the Group to cash flow interest rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate risk.

As of June 30, 2021 and 2020, 96.3% and 95.2% of the Group’s long-term financial loans have a fixed interest rate so that IRSA is not significantly exposed to the fluctuation risk of the interest rate.

The Group manages this risk by maintaining an appropriate mix between fixed and floating rate interest bearing liabilities. These activities are evaluated regularly to determine that the Group is not exposed to interest rate fluctuations that could adversely impact its ability to meet its financial obligations and to comply with its borrowing covenants.

The Group occasionally manages its cash flow interest rate risk exposure by different hedging instruments, including but not limited to interest rate swap, depending on each particular case. For example, interest rate swaps have the economic effect of converting borrowings from floating rates to fixed rates or vice versa.

The interest rate risk policy is approved by the Board of Directors. Management analyses the Group’s interest rate exposure on a dynamic basis. Various scenarios are simulated, taking into consideration refinancing, renewal of existing positions and alternative financing sources. Based on these scenarios, the Group calculates the impact on profit and loss of a defined interest rate shift. The scenarios are run only for liabilities that represent the major interest-bearing positions. Trade payables are normally interest-free and have settlement dates within one year. The simulation is done on a regular basis to verify that the maximum potential loss is within the limits set by management.

Note 20 shows a breakdown of the Group’s fixed-rate and floating-rate borrowings per currency denomination and functional currency of the subsidiary that holds the loans for the fiscal years ended June 30, 2021 and 2020.

The Group estimates that, other factors being constant, a 1% increase in floating rates at year-end would increase net loss before income tax for the years ended June 30, 2021 and 2020 in the amount of ARS 2.7 and ARS 46.4, respectively. A 1% decrease in floating rates would have an equal and opposite effect on the Statement of Income.

Other price risks

The Group is exposed to equity securities price risk or derivative financial instruments because of investments held in entities that are publicly traded, which were classified on the Consolidated Statements of Financial Position at “fair value through profit or loss”. The Group regularly reviews the prices evolution of these equity securities in order to identify significant movements.

As of June 30, 2021 and 2020 the total value of Group’s investments in shares of public companies amounts to ARS 976 and ARS 29,116, respectively.

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The Group estimates that, other factors being constant, a 10% decrease in quoted prices of equity securities and in derivative financial instruments portfolio at year-end would generate a loss before income tax for the year ended June 30, 2021, of ARS 98 (ARS 2,911 in 2020). An increase of 10% on these prices would have an equal and opposite effect in the Statement of Income.

(b) Credit risk management

The credit risk arises from the potential non-performance of contractual obligations by the parties, with a resulting financial loss for the Group. Credit limits have been established to ensure that the Group deals only with approved counterparties and that counterparty concentration risk is addressed and the risk of loss is mitigated. Counterparty exposure is measured as the aggregate of all obligations of any single legal entity or economic entity to the Group.

The Group is subject to credit risk arising from deposits with banks and financial institutions, investments of surplus cash balances, the use of derivative financial instruments and from outstanding receivables

The credit risk is managed on a country-by-country basis. Each local entity is responsible for managing and analyzing the credit risk.

The Group’s policy is to manage credit exposure from deposits, short-term investments and other financial instruments by maintaining diversified funding sources in various financial institutions. All the institutions that operate with the Group are well known because of their experience in the market and high credit quality. The Group places its cash and cash equivalents, investments, and other financial instruments with various high credit quality financial institutions, thus mitigating the amount of credit exposure to any one institution. The maximum exposure to credit risk is represented by the carrying amount of cash and cash equivalents and short-term investments in the Statements of Financial Position.

Trade receivables related to leases and services provided by the Group represent a diversified tenant base and account for 96.4% and 94.2% of the Group’s total trade receivables of the operations center as of June 30, 2021 and 2020, respectively. The Group has specific policies to ensure that rental contracts are transacted with counterparties with appropriate credit quality. The majority of the Group’s shopping mall, offices and other rental properties’ tenants are well recognized retailers, diversified companies, professional organizations, and others. Owing to the long-term nature and diversity of its tenancy arrangements, the credit risk of this type of trade receivables is considered to be low. Generally, the Group has not experienced any significant losses resulting from the non-performance of any counterpart to the lease contracts and, as a result, the allowance for doubtful accounts balance is low. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Group. If there is no independent rating, risk control assesses the credit quality of the customer, taking into account its past experience, financial position, actual experience and other factors. Based on the Group’s analysis, the Group determines the size of the deposit that is required from the tenant at inception. Management does not expect any material losses from non-performance by these counterparties. See details on Note 15.

On the other hand, property receivables related to the sale of trading properties represent 3.6% and 5.8% of the Group’s total trade receivables as of June 30, 2021 and 2020, respectively. Payments on these receivables have generally been received when due. These receivables are generally secured by mortgages on the properties. Therefore, the credit risk on outstanding amounts is considered very low.

(c) Liquidity risk management

The Group is exposed to liquidity risks, including risks associated with refinancing borrowings as they mature, the risk that borrowing facilities are not available to meet cash requirements, and the risk that financial assets cannot readily be converted to cash without loss of value. Failure to manage liquidity risks could have a material impact on the Group’s cash flow and Statements of Financial Position.

Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. Due to the dynamic nature of the underlying businesses, the Group aims to maintain flexibility in funding its existing and prospective debt requirements by maintaining diversified funding sources.

The Group monitors current and projected financial position using several key internally generated reports: cash flow; debt maturity; and interest rate exposure. The Group also undertakes sensitivity analysis to assess the impact of proposed transactions, movements in interest rates and changes in property values on the key profitability, liquidity and balance sheet ratios.

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The debt and the derivative positions are continually reviewed to meet current and expected debt requirements. Each operation center maintains a balance between longer-term and shorter-term financings. Short-term financing is principally raised through bank facilities and overdraft positions. Medium- to longer-term financing comprises public and private bond issues, including private placements. Financing risk is spread by using a variety of types of debt. The maturity profile is managed in accordance with each operation center needs, by spreading the repayment dates and extending facilities, as appropriate.

The tables below show financial liabilities, including each operation center derivative financial liabilities groupings based on the remaining period at the Statements of Financial Position to the contractual maturity date. The amounts disclosed in the tables are the contractual undiscounted cash flows and as a result, they do not reconcile to the amounts disclosed on the Statements of Financial Position. However, undiscounted cash flows in respect of balances due within 12 months generally equal their carrying amounts in the Statements of Financial Position, as the impact of discounting is not significant. The tables include both interest and principal flows.

Where the interest payable is not fixed, the amount disclosed has been determined by reference to the existing conditions at the reporting date.

June 30, 2021 |  | Less than 1 year |  |  | Between 1 and 2 years |  |  | Between 2 and 3 years |  |  | Between 3 and 4 years |  |  | More than 4 years |  |  | Total |
Trade and other payables |  |  | 2,988 |  |  |  | 104 |  |  |  | 1 |  |  |  | - |  |  |  | - |  |  |  | 3,093 |
Borrowings (excluding finance leases liabilities) |  |  | 15,409 |  |  |  | 40,633 |  |  |  | 5,695 |  |  |  | 211 |  |  |  | 185 |  |  |  | 62,133 |
Finance leases obligations |  |  | 93 |  |  |  | 87 |  |  |  | 89 |  |  |  | 90 |  |  |  | 1,767 |  |  |  | 2,126 |
Derivative Financial Instruments |  |  | 48 |  |  |  | 9 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 57 |
Total |  |  | 18,538 |  |  |  | 40,833 |  |  |  | 5,785 |  |  |  | 301 |  |  |  | 1,952 |  |  |  | 67,409 |

June 30, 2020 |  | Less than 1 year |  |  | Between 1 and 2 years |  |  | Between 2 and 3 years |  |  | Between 3 and 4 years |  |  | More than 4 years |  |  | Total |
Trade and other payables |  |  | 2,331 |  |  |  | 234 |  |  |  | 104 |  |  |  | 329 |  |  |  | 2 |  |  |  | 3,000 |
Borrowings (excluding finance leases liabilities) |  |  | 57,680 |  |  |  | 4,931 |  |  |  | 40,975 |  |  |  | 98 |  |  |  | 324 |  |  |  | 104,008 |
Purchase obligations |  |  | 8,554 |  |  |  | 1,283 |  |  |  | 886 |  |  |  | - |  |  |  | - |  |  |  | 10,723 |
Finance leases obligations |  |  | 80 |  |  |  | 74 |  |  |  | 77 |  |  |  | 81 |  |  |  | 1,939 |  |  |  | 2,251 |
Derivative Financial Instruments |  |  | 125 |  |  |  | 42 |  |  |  | 9 |  |  |  | - |  |  |  | - |  |  |  | 176 |
Total |  |  | 68,770 |  |  |  | 6,564 |  |  |  | 42,051 |  |  |  | 508 |  |  |  | 2,265 |  |  |  | 120,158 |

See Note 20 for a description of the commitments and restrictions related to loans and the ongoing renegotiations.

(d) Capital risk management

The capital structure of the Group consists of shareholders’ equity and net borrowings. The Group’s equity is analyzed into its various components in the statements of changes in equity. Capital is managed so as to promote the long-term success of the business and to maintain sustainable returns for shareholders. The Group seeks to manage its capital requirements to maximize value through the mix of debt and equity funding, while ensuring that Group entities continue to operate as going concerns, comply with applicable capital requirements and maintain strong credit ratings.

The Group assesses the adequacy of its capital requirements, cost of capital and gearing (i.e., debt/equity mix) as part of its broader strategic plan. The Group continuously reviews its capital structure to ensure that (i) sufficient funds and financing facilities are available to implement the Group’s property development and business acquisition strategies, (ii) adequate financing facilities for unforeseen contingencies are maintained, and (iii) distributions to shareholders are maintained within the Group’s dividend distribution policy. The Group also protects its equity in assets by obtaining appropriate insurance.

The Group’s strategy is to maintain key financing metrics (net debt to total equity ratio or gearing and debt ratio) in order to ensure that asset level performance is translated into enhanced returns for shareholders whilst maintaining an appropriate risk reward balance to accommodate changing financial and operating market cycles.

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The following tables details the Group’s key metrics in relation to managing its capital structure. The ratios are within the ranges previously established by the Group’s strategy.

|  | June 30, 2021 |  |  | June 30, 2020 |
Gearing ratio (i) |  |  | 74.84 | % |  |  | 49.57 | %
Debt ratio (ii) |  |  | 32.86 | % |  |  | 44.42 | %

| (i) | Calculated as total of borrowings over total borrowings plus equity attributable equity holders of the parent company.
| (ii) | Calculated as total borrowings over total properties (including trading properties, property, plant and equipment, investment properties and rights to receive units under barter agreements).

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.

Segment information is reported from the perspective of products and services, considering separately the various activities being developed, which represent reporting operating segments given the nature of its products, services, operations and risks.

As of fiscal year 2018, the CODM reviews certain corporate expenses associated in an aggregate manner and separately from each of the segments, such expenses have been disclosed in the “Corporate” 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:

| o | 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.
| o | The “Offices” segment includes the operating results from lease revenues of offices, other rental spaces and other service revenues related to the office activities.
| o | 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.
| o | The “Hotels” segment includes the operating results mainly comprised of room, catering and restaurant revenues.
| o | The “International” segment includes assets and operating profit or loss from business related to associates Condor (hotels) and New Lipstick (offices).
| o | 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.
| o | 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 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:

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| · | 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.

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.

Until September 2020 the Group used to report its financial performance separately in two Operations Centers. However, as described in Note 1, during September 2020 the Group lost control of IDBD and, then, has reclassified the results of Operations Center in Israel to discontinued operations. As a consequence of the situation described, from October 1, 2020, the Group reports its financial performance through a single Operation Center. Segment information for the previous fiscal years has been recast for the purposes of comparability with the present fiscal year.

| · | Operations Center in Israel: as explained previously only includes assets and liabilities.

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 Consolidated Statements of Income and Other Comprehensive Income for the years ended June 30, 2021, 2020 and 2019:

|  | June 30, 2021 |
|  | 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 |  |  | 10,114 |  |  |  | (50 | ) |  |  | 2,945 |  |  |  | (31 | ) |  |  | 12,978 |
Costs |  |  | (3,455 | ) |  |  | 70 |  |  |  | (3,179 | ) |  |  | - |  |  |  | (6,564 | )
Gross profit / (loss) |  |  | 6,659 |  |  |  | 20 |  |  |  | (234 | ) |  |  | (31 | ) |  |  | 6,414 |
Net loss from fair value adjustment of investment properties |  |  | (7,649 | ) |  |  | (121 | ) |  |  | - |  |  |  | - |  |  |  | (7,770 | )
General and administrative expenses |  |  | (3,078 | ) |  |  | 14 |  |  |  | - |  |  |  | 47 |  |  |  | (3,017 | )
Selling expenses |  |  | (1,511 | ) |  |  | 21 |  |  |  | - |  |  |  | - |  |  |  | (1,490 | )
Other operating results, net |  |  | (157 | ) |  |  | (20 | ) |  |  | 107 |  |  |  | (16 | ) |  |  | (86 | )
Loss from operations |  |  | (5,736 | ) |  |  | (86 | ) |  |  | (127 | ) |  |  | - |  |  |  | (5,949 | )
Share of loss of associates and joint ventures |  |  | (3,988 | ) |  |  | (392 | ) |  |  | - |  |  |  | - |  |  |  | (4,380 | )
Segment profit |  |  | (9,724 | ) |  |  | (478 | ) |  |  | (127 | ) |  |  | - |  |  |  | (10,329 | )
Reportable assets |  |  | 204,883 |  |  |  | (1,513 | ) |  |  | - |  |  |  | 19,412 |  |  |  | 222,782 |
Reportable liabilities |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (140,058 | ) |  |  | (140,058 | )
Net reportable assets |  |  | 204,883 |  |  |  | (1,513 | ) |  |  | - |  |  |  | (120,646 | ) |  |  | 82,724 |

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|  | June 30, 2020 |
|  | 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 |  |  | 16,731 |  |  |  | (90 | ) |  |  | 4,655 |  |  |  | (33 | ) |  |  | 21,263 |
Costs |  |  | (4,101 | ) |  |  | 80 |  |  |  | (4,851 | ) |  |  | - |  |  |  | (8,872 | )
Gross profit / (loss) |  |  | 12,630 |  |  |  | (10 | ) |  |  | (196 | ) |  |  | (33 | ) |  |  | 12,391 |
Net gain / (loss) from fair value adjustment of investment properties |  |  | 51,059 |  |  |  | (395 | ) |  |  | - |  |  |  | - |  |  |  | 50,664 |
General and administrative expenses |  |  | (3,371 | ) |  |  | 20 |  |  |  | - |  |  |  | 50 |  |  |  | (3,301 | )
Selling expenses |  |  | (1,849 | ) |  |  | 27 |  |  |  | - |  |  |  | - |  |  |  | (1,822 | )
Other operating results, net |  |  | 17 |  |  |  | 28 |  |  |  | 91 |  |  |  | (17 | ) |  |  | 119 |
Profit / (loss) from operations |  |  | 58,486 |  |  |  | (330 | ) |  |  | (105 | ) |  |  | - |  |  |  | 58,051 |
Share of profit of associates and joint ventures |  |  | 10,584 |  |  |  | 263 |  |  |  | - |  |  |  | - |  |  |  | 10,847 |
Segment profit / (loss) |  |  | 69,070 |  |  |  | (67 | ) |  |  | (105 | ) |  |  | - |  |  |  | 68,898 |
Reportable assets |  |  | 913,638 |  |  |  | (1,040 | ) |  |  | - |  |  |  | 29,456 |  |  |  | 942,054 |
Reportable liabilities |  |  | (602,315 | ) |  |  | - |  |  |  | - |  |  |  | (155,511 | ) |  |  | (757,826 | )
Net reportable assets |  |  | 311,323 |  |  |  | (1,040 | ) |  |  | - |  |  |  | (126,055 | ) |  |  | 184,228 |

|  | June 30, 2019 |
|  | 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 |  |  | 22,613 |  |  |  | 140 | ) |  |  | 5,567 |  |  |  | (36 | ) |  |  | 28,004 |
Costs |  |  | (4,773 | ) |  |  | 102 |  |  |  | (5,790 | ) |  |  | - |  |  |  | (10,461 | )
Gross profit / (loss) |  |  | 17,840 |  |  |  | (38 | ) |  |  | (223 | ) |  |  | (36 | ) |  |  | 17,543 |
Net (loss) / gain from fair value adjustment of investment properties |  |  | (59,489 | ) |  |  | 1,258 |  |  |  | - |  |  |  | - |  |  |  | (58,231 | )
General and administrative expenses |  |  | (4,176 | ) |  |  | 24 |  |  |  | - |  |  |  | 66 |  |  |  | (4,086 | )
Selling expenses |  |  | (1,628 | ) |  |  | 9 |  |  |  | - |  |  |  | - |  |  |  | (1,619 | )
Other operating results, net |  |  | (841 | ) |  |  | 282 |  |  |  | 119 |  |  |  | (30 | ) |  |  | (470 | )
(Loss) / profit from operations |  |  | (48,294 | ) |  |  | 1,535 |  |  |  | (104 | ) |  |  | - |  |  |  | (46,863 | )
Share of (loss) of associates and joint ventures |  |  | (9,060 | ) |  |  | (1,527 | ) |  |  | - |  |  |  | - |  |  |  | (10,587 | )
Segment (loss) / profit |  |  | (57,354 | ) |  |  | 8 |  |  |  | (104 | ) |  |  | - |  |  |  | (57,450 | )
Reportable assets |  |  | 971,842 |  |  |  | (915 | ) |  |  | - |  |  |  | 47,973 |  |  |  | 1,018,900 |
Reportable liabilities |  |  | (692,205 | ) |  |  | - |  |  |  | - |  |  |  | (142,463 | ) |  |  | (834,668 | )
Net reportable assets |  |  | 279,637 |  |  |  | (915 | ) |  |  | - |  |  |  | (94,490 | ) |  |  | 184,232 |

(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 ARS 7, ARS 26 and ARS 13,006, as of June 30, 2021, 2020 and 2019, 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, 2021, 2020 and 2019:

|  | June 30, 2021 |
|  | Operations Center in Argentina |
|  | Shopping Malls |  |  | Offices |  |  | Sales and developments |  |  | Hotels |  |  | International |  |  | Corporate |  |  | Others |  |  | Total |
Revenues |  |  | 5,321 |  |  |  | 2,764 |  |  |  | 664 |  |  |  | 921 |  |  |  | 376 |  |  |  | - |  |  |  | 68 |  |  |  | 10,114 |
Costs |  |  | (865 | ) |  |  | (226 | ) |  |  | (751 | ) |  |  | (1,065 | ) |  |  | (317 | ) |  |  | - |  |  |  | (231 | ) |  |  | (3,455 | )
Gross profit / (loss) |  |  | 4,456 |  |  |  | 2,538 |  |  |  | (87 | ) |  |  | (144 | ) |  |  | 59 |  |  |  | - |  |  |  | (163 | ) |  |  | 6,659 |
Net (loss) / gain from fair value adjustment of investment properties |  |  | (20,342 | ) |  |  | 5,381 |  |  |  | 6,483 |  |  |  | - |  |  |  | 6 |  |  |  | - |  |  |  | 823 |  |  |  | (7,649 | )
General and administrative expenses |  |  | (1,432 | ) |  |  | (387 | ) |  |  | (357 | ) |  |  | (426 | ) |  |  | (56 | ) |  |  | (352 | ) |  |  | (68 | ) |  |  | (3,078 | )
Selling expenses |  |  | (451 | ) |  |  | (199 | ) |  |  | (684 | ) |  |  | (141 | ) |  |  | (26 | ) |  |  | - |  |  |  | (10 | ) |  |  | (1,511 | )
Other operating results, net |  |  | (126 | ) |  |  | 7 |  |  |  | (13 | ) |  |  | (12 | ) |  |  | (12 | ) |  |  | - |  |  |  | (1 | ) |  |  | (157 | )
(Loss) / profit from operations |  |  | (17,895 | ) |  |  | 7,340 |  |  |  | 5,342 |  |  |  | (723 | ) |  |  | (29 | ) |  |  | (352 | ) |  |  | 581 |  |  |  | (5,736 | )
Share of (loss) of associates and joint ventures |  |  | - |  |  |  | - |  |  |  | (16 | ) |  |  | - |  |  |  | (891 | ) |  |  | - |  |  |  | (3,081 | ) |  |  | (3,988 | )
Segment (loss) / profit |  |  | (17,895 | ) |  |  | 7,340 |  |  |  | 5,326 |  |  |  | (723 | ) |  |  | (920 | ) |  |  | (352 | ) |  |  | (2,500 | ) |  |  | (9,724 | )
Investment properties and trading properties |  |  | 54,317 |  |  |  | 76,925 |  |  |  | 55,943 |  |  |  | - |  |  |  | 114 |  |  |  | - |  |  |  | 2,307 |  |  |  | 189,606 |
Investment in associates and joint ventures |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,916 |  |  |  | - |  |  |  | 6,993 |  |  |  | 8,909 |
Other operating assets |  |  | 348 |  |  |  | 1,325 |  |  |  | 1,948 |  |  |  | 2,603 |  |  |  | - |  |  |  | 8 |  |  |  | 136 |  |  |  | 6,368 |
Operating assets |  |  | 54,665 |  |  |  | 78,250 |  |  |  | 57,891 |  |  |  | 2,603 |  |  |  | 2,030 |  |  |  | 8 |  |  |  | 9,436 |  |  |  | 204,883 |

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From all the revenues corresponding to the Operations Center in Argentina, ARS 9,738 are originated in Argentina, and ARS 376 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, ARS 202,044 are located in Argentina and ARS 2,839 in other countries, principally in USA for ARS 2,030 and Uruguay for ARS 801.

|  | June 30, 2020 |
|  | Operations Center in Argentina |
|  | Shopping Malls |  |  | Offices |  |  | Sales and developments |  |  | Hotels |  |  | International |  |  | Corporate |  |  | Others |  |  | Total |
Revenues |  |  | 8,915 |  |  |  | 3,542 |  |  |  | 1,104 |  |  |  | 3,036 |  |  |  | 17 |  |  |  | - |  |  |  | 117 |  |  |  | 16,731 |
Costs |  |  | (851 | ) |  |  | (207 | ) |  |  | (1,008 | ) |  |  | (1,870 | ) |  |  | (18 | ) |  |  | - |  |  |  | (147 | ) |  |  | (4,101 | )
Gross profit / (loss) |  |  | 8,064 |  |  |  | 3,335 |  |  |  | 96 |  |  |  | 1,166 |  |  |  | (1 | ) |  |  | - |  |  |  | (30 | ) |  |  | 12,630 |
Net (loss) / gain from fair value adjustment of investment properties |  |  | (3,162 | ) |  |  | 34,974 |  |  |  | 18,293 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 954 |  |  |  | 51,059 |
General and administrative expenses |  |  | (1,246 | ) |  |  | (332 | ) |  |  | (342 | ) |  |  | (548 | ) |  |  | (165 | ) |  |  | (562 | ) |  |  | (176 | ) |  |  | (3,371 | )
Selling expenses |  |  | (1,065 | ) |  |  | (126 | ) |  |  | (296 | ) |  |  | (345 | ) |  |  | - |  |  |  | - |  |  |  | (17 | ) |  |  | (1,849 | )
Other operating results, net |  |  | 26 |  |  |  | (39 | ) |  |  | (41 | ) |  |  | (30 | ) |  |  | - |  |  |  | - |  |  |  | 101 |  |  |  | 17 |
Profit / (loss) from operations |  |  | 2,617 |  |  |  | 37,812 |  |  |  | 17,710 |  |  |  | 243 |  |  |  | (166 | ) |  |  | (562 | ) |  |  | 832 |  |  |  | 58,486 |
Share of profit / (loss) of associates and joint ventures |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 11,080 |  |  |  | - |  |  |  | (496 | ) |  |  | 10,584 |
Segment profit / (loss) |  |  | 2,617 |  |  |  | 37,812 |  |  |  | 17,710 |  |  |  | 243 |  |  |  | 10,914 |  |  |  | (562 | ) |  |  | 336 |  |  |  | 69,070 |
Investment properties and trading properties |  |  | 73,764 |  |  |  | 94,314 |  |  |  | 48,321 |  |  |  | - |  |  |  | 460 |  |  |  | - |  |  |  | 2,165 |  |  |  | 219,024 |
Investment in associates and joint ventures |  |  | - |  |  |  | - |  |  |  | 799 |  |  |  | - |  |  |  | 3,011 |  |  |  | - |  |  |  | 10,119 |  |  |  | 13,929 |
Other operating assetsInvestment |  |  | 412 |  |  |  | 321 |  |  |  | 1,131 |  |  |  | 2,759 |  |  |  | - |  |  |  | 9 |  |  |  | 135 |  |  |  | 4,767 |
Operating assets |  |  | 74,176 |  |  |  | 94,635 |  |  |  | 50,251 |  |  |  | 2,759 |  |  |  | 3,471 |  |  |  | 9 |  |  |  | 12,419 |  |  |  | 237,720 |

From all the revenues corresponding to the Operations Center in Argentina, included in the segments ARS 16,713 are originated in Argentina and ARS 17 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, ARS 233,384 are located in Argentina and ARS 4,336 in other countries, principally in USA for ARS 3,471 and Uruguay for ARS 865.

|  | June 30, 2019 |
|  | Operations Center in Argentina |
|  | Shopping Malls |  |  | Offices |  |  | Sales and developments |  |  | Hotels |  |  | International |  |  | Corporate |  |  | Others |  |  | Total |
Revenues |  |  | 12,828 |  |  |  | 3,362 |  |  |  | 1,681 |  |  |  | 4,435 |  |  |  | 21 |  |  |  | - |  |  |  | 286 |  |  |  | 22,613 |
Costs |  |  | (1,166 | ) |  |  | (197 | ) |  |  | (790 | ) |  |  | (2,383 | ) |  |  | (9 | ) |  |  | - |  |  |  | (228 | ) |  |  | (4,773 | )
Gross profit |  |  | 11,662 |  |  |  | 3,165 |  |  |  | 891 |  |  |  | 2,052 |  |  |  | 12 |  |  |  | - |  |  |  | 58 |  |  |  | 17,840 |
Net (loss) / gain from fair value adjustment of investment properties |  |  | (60,952 | ) |  |  | 925 |  |  |  | 1,091 |  |  |  | - |  |  |  | 9 |  |  |  | - |  |  |  | (562 | ) |  |  | (59,489 | )
General and administrative expenses |  |  | (1,420 | ) |  |  | (318 | ) |  |  | (425 | ) |  |  | (738 | ) |  |  | (165 | ) |  |  | (940 | ) |  |  | (170 | ) |  |  | (4,176 | )
Selling expenses |  |  | (796 | ) |  |  | (148 | ) |  |  | (178 | ) |  |  | (474 | ) |  |  | - |  |  |  | - |  |  |  | (32 | ) |  |  | (1,628 | )
Other operating results, net |  |  | (29 | ) |  |  | (47 | ) |  |  | (429 | ) |  |  | 172 |  |  |  | (36 | ) |  |  | - |  |  |  | (472 | ) |  |  | (841 | )
(Loss) / profit from operations |  |  | (51,535 | ) |  |  | 3,577 |  |  |  | 950 |  |  |  | 1,012 |  |  |  | (180 | ) |  |  | (940 | ) |  |  | (1,178 | ) |  |  | (48,294 | )
Share of (loss) of associates and joint ventures |  |  | - |  |  |  | - |  |  |  | (56 | ) |  |  | - |  |  |  | (5,526 | ) |  |  | - |  |  |  | (3,478 | ) |  |  | (9,060 | )
Segment (loss) / profit |  |  | (51,535 | ) |  |  | 3,577 |  |  |  | 894 |  |  |  | 1,012 |  |  |  | (5,706 | ) |  |  | (940 | ) |  |  | (4,656 | ) |  |  | (57,354 | )
Investment properties and trading properties |  |  | 75,258 |  |  |  | 47,405 |  |  |  | 41,693 |  |  |  | - |  |  |  | 135 |  |  |  | - |  |  |  | 1,594 |  |  |  | 166,085 |
Investment in associates and joint ventures |  |  | - |  |  |  | - |  |  |  | 665 |  |  |  | - |  |  |  | (10,846 | ) |  |  | - |  |  |  | 7,353 |  |  |  | (2,828 | )
Other operating assets |  |  | 466 |  |  |  | 267 |  |  |  | 277 |  |  |  | 2,897 |  |  |  | 270 |  |  |  | 6 |  |  |  | 135 |  |  |  | 4,318 |
Operating assets |  |  | 75,724 |  |  |  | 47,672 |  |  |  | 42,635 |  |  |  | 2,897 |  |  |  | (10,441 | ) |  |  | 6 |  |  |  | 9,082 |  |  |  | 167,575 |

From all the revenues corresponding to the Operations Center in Argentina, included in the segments ARS 21,873 are originated in Argentina, ARS 719 are originated in Uruguay and ARS 21 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, ARS 177,136 are located in Argentina and ARS (9,561) in other countries, principally in USA for ARS (10,441) and Uruguay for ARS 874 million.

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Below is a summarized analysis of the lines of business of Group’s Operations Center in Israel where only assets and liabilities are presented for the years ended June 30, 2020 and 2019:

|  | June 30, 2020 |
|  | Operations Center in Israel |
|  | Real Estate |  |  | Supermarkets |  |  | Telecommunications |  |  | Insurance |  |  | Corporate |  |  | Others |  |  | Total |
Operating assets |  |  | 229,718 |  |  |  | 42,191 |  |  |  | 210,318 |  |  |  | 5,072 |  |  |  | 25,015 |  |  |  | 163,604 |  |  |  | 675,918 |
Operating liabilities |  |  | (219,789 | ) |  |  | - |  |  |  | (159,326 | ) |  |  | - |  |  |  | (164,429 | ) |  |  | (58,771 | ) |  |  | (602,315 | )
Operating assets (liabilities), net |  |  | 9,929 |  |  |  | 42,191 |  |  |  | 50,992 |  |  |  | 5,072 |  |  |  | (139,414 | ) |  |  | 104,833 |  |  |  | 73,603 |

|  | June 30, 2019 |
|  | Operations Center in Israel |
|  | Real Estate |  |  | Supermarkets |  |  | Telecommunications |  |  | Insurance |  |  | Corporate |  |  | Others |  |  | Total |
Operating assets |  |  | 455,745 |  |  |  | 34,566 |  |  |  | 164,289 |  |  |  | 34,002 |  |  |  | 62,238 |  |  |  | 53,427 |  |  |  | 804,267 |
Operating liabilities |  |  | (353,800 | ) |  |  | - |  |  |  | (127,370 | ) |  |  | - |  |  |  | (189,891 | ) |  |  | (21,144 | ) |  |  | (692,205 | )
Operating assets (liabilities), net |  |  | 101,945 |  |  |  | 34,566 |  |  |  | 36,919 |  |  |  | 34,002 |  |  |  | (127,653 | ) |  |  | 32,283 |  |  |  | 112,062 |

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, 2021
IRSA CP |  |  | 20.08 | % |  |  | 22,652 |  |  |  | 154,752 |  |  |  | 13,122 |  |  |  | 86,269 |  |  |  | 78,013 |  |  |  | 5,549 |
|  | June 30, 2020
Elron |  |  | 38.94 | % |  |  | 5,072 |  |  |  | 5,957 |  |  |  | 765 |  |  |  | 213 |  |  |  | 10,051 |  |  |  | 6,232 |
PBC |  |  | 27.60 | % |  |  | 119,149 |  |  |  | 168,831 |  |  |  | 39,259 |  |  |  | 178,421 |  |  |  | 70,300 |  |  |  | 28,933 |
Cellcom |  |  | 53.80 | % |  |  | 82,275 |  |  |  | 119,854 |  |  |  | 47,142 |  |  |  | 112,186 |  |  |  | 42,801 |  |  |  | 26,916 |
Mehadrin |  |  | 56.25 | % |  |  | 19,583 |  |  |  | 26,794 |  |  |  | 20,959 |  |  |  | 5,011 |  |  |  | 20,407 |  |  |  | 12,220 |
IRSA CP |  |  | 19.35 | % |  |  | 22,417 |  |  |  | 194,626 |  |  |  | 24,667 |  |  |  | 78,866 |  |  |  | 113,510 |  |  |  | 6,142 |

|  | 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 |
|  | June 30, 2021 |
IRSA CP |  |  | 8,092 |  |  |  | (22,537 | ) |  |  | (22,406 | ) |  |  | (604 | ) |  |  | 1,282 |  |  |  | 9,754 |  |  |  | (17,242 | ) |  |  | (6,206 | ) |  |  | 438 |
|  | June 30, 2020
Elron |  |  | - |  |  |  | (2,665 | ) |  |  | (2,800 | ) |  |  | 8,321 |  |  |  | (1,166 | ) |  |  | 526 |  |  |  | 1,313 |  |  |  | 673 |  |  |  | - |
PBC |  |  | 18,490 |  |  |  | 18,997 |  |  |  | 18,272 |  |  |  | 29,418 |  |  |  | 9,505 |  |  |  | 35,856 |  |  |  | (30,405 | ) |  |  | 14,956 |  |  |  | 2,529 |
Cellcom |  |  | 84,226 |  |  |  | (3,106 | ) |  |  | (3,154 | ) |  |  | 802 |  |  |  | 22,401 |  |  |  | (11,152 | ) |  |  | (9,497 | ) |  |  | 1,752 |  |  |  | - |
Mehadrin |  |  | 2,932 |  |  |  | 159 |  |  |  | 185 |  |  |  | 377 |  |  |  | 369 |  |  |  | (105 | ) |  |  | (369 | ) |  |  | (105 | ) |  |  | 26 |
IRSA CP |  |  | 12,862 |  |  |  | 27,266 |  |  |  | 27,644 |  |  |  | 1,598 |  |  |  | 7,345 |  |  |  | (4,324 | ) |  |  | (5,349 | ) |  |  | (2,328 | ) |  |  | 996 |

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8. Investments in associates and joint ventures

Changes of the Group’s investments in associates and joint ventures for the fiscal years ended June 30, 2021 and 2020 were as follows:

|  | June 30, 2021 |  |  | June 30, 2020 |
Beginning of the year |  |  | 111,714 |  |  |  | 53,742 |
Adjustment previous years (IFRS 9 and IAS 28) |  |  | - |  |  |  | (2,972 | )
Increase in equity interest in associates and joint ventures |  |  | - |  |  |  | 5,020 |
Capital contributions |  |  | 42 |  |  |  | 4,058 |
Capital reduction |  |  | - |  |  |  | (159 | )
Decrease of interest in associate (iv) |  |  | (43,849 | ) |  |  | - |
Deconsolidation (i) |  |  | (48,443 | ) |  |  | 43,822 |
Share of profit / (loss) |  |  | (3,035 | ) |  |  | 13,022 |
Impairment (iii) |  |  | (626 | ) |  |  | - |
Currency translation adjustment |  |  | (3,579 | ) |  |  | 76 |
Dividends |  |  | - |  |  |  | (2,734 | )
Other comprehensive income |  |  | (54 | ) |  |  | (1,869 | )
Reclassification to held-for-sale |  |  | - |  |  |  | (3,109 | )
Others |  |  | (12 | ) |  |  | (5 | )
Incorporation by business combination |  |  | - |  |  |  | 2,822 |
End of the year (ii) |  |  | 12,158 |  |  |  | 111,714 |

| (i) | See Note 4.
| (ii) | Includes ARS (7) and ARS (26) reflecting interests in companies with negative equity as of June 30, 2021 and 2020, respectively, which are disclosed in “Provisions” (see Note 19).
| (iii) | Corresponds to investment in TGLT S.A.
| (iv) | Corresponds to the sale of the remaining equity interest in Shufersal in July 2020.

Below is a detail of the investments and the values of the stake held by the Group in associates and joint ventures for the years ended as of June 30, 2021 and 2020, as well as the Group’s share of the comprehensive results of these companies for the years ended on June 30, 2021, 2020 and 2019:

|  | % ownership interest |  |  | Value of Group’s interest in equity |  |  | Group’s interest in comprehensive income / (loss) |
Name of the entity |  | June 30, 2021 |  |  | June 30, 2020 |  |  | June 30, 2019 |  |  | June 30, 2021 |  |  | June 30, 2020 |  |  | June 30, 2021 |  |  | June 30, 2020 |  |  | June 30, 2019 |
Associates |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
New Lipstick |  |  | 49.96 | % |  |  | 49.96 | % |  |  | 49.96 | % |  |  | 218 |  |  |  | 701 |  |  |  | (480 | ) |  |  | 11,465 |  |  |  | (4,805 | )
BHSA (1) |  |  | 29.91 | % |  |  | 29.91 | % |  |  | 29.91 | % |  |  | 5,361 |  |  |  | 6,118 |  |  |  | (756 | ) |  |  | (571 | ) |  |  | (3,621 | )
Condor (2) |  |  | 18.89 | % |  |  | 18.89 | % |  |  | 18.89 | % |  |  | 1,620 |  |  |  | 2,224 |  |  |  | (414 | ) |  |  | 180 |  |  |  | 59 |
PBEL |  |  | N/A |  |  |  | 45.00 | % |  |  | 45.40 | % |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (176 | )
Shufersal (4) |  |  | N/A |  |  |  | 26.02 | % |  |  | 26.02 | % |  |  | - |  |  |  | 42,223 |  |  |  | 24 |  |  |  | 7,834 |  |  |  | 446 |
Mehadrin |  |  | N/A |  |  |  | N/A |  |  |  | 45.41 | % |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (167 | )
Gav-Yam |  |  | N/A |  |  |  | 34.90 | % |  |  | N/A |  |  |  | - |  |  |  | 40,970 |  |  |  | 39 |  |  |  | (1,181 | ) |  |  | - |
Quality (3) |  |  | 50.00 | % |  |  | 50.00 | % |  |  | 50.00 | % |  |  | 2,927 |  |  |  | 3,156 |  |  |  | (259 | ) |  |  | 278 |  |  |  | (876 | )
La Rural SA |  |  | 50.00 | % |  |  | 50.00 | % |  |  | 50.00 | % |  |  | 169 |  |  |  | 305 |  |  |  | (135 | ) |  |  | 153 |  |  |  | 216 |
TGLT (5) |  |  | 27.82 | % |  |  | 30.20 | % |  |  | N/A |  |  |  | 937 |  |  |  | 3,093 |  |  |  | (2,157 | ) |  |  | (174 | ) |  |  | - |
Other joint ventures |  |  | N/A |  |  |  | N/A |  |  |  | N/A |  |  |  | 926 |  |  |  | 12,924 |  |  |  | (2,476 | ) |  |  | (4,886 | ) |  |  | (2,062 | )
Total associates and joint ventures |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 12,158 |  |  |  | 111,714 |  |  |  | (6,614 | ) |  |  | 13,098 |  |  |  | (10,986 | )

Name of the entity |  | Place of business / Country of incorporation |  | Main activity |  | Common shares 1 vote |  | Latest financial statements issued |
|  |  |  | Share capital (nominal value) |  | Loss for the year |  | Shareholders’ equity |
Associates |  |  |  |  |  |  |  |  |  |  |  |  |
New Lipstick |  | U.S. |  | Real estate |  | N/A |  | - |  | (*) (10 | ) | (*) (41 | )
BHSA |  | Argentina |  | Financial |  | 448,689,072 |  | (***) 1,500 |  | (***) (2,528 | ) | (***) 17,276 |
Condor |  | EE.UU. |  | Hotel |  | 2,245,100 |  | (*) 232 |  | (*) (178 | ) | (*) 54 |
Quality |  | Argentina |  | Real estate |  | 225,146,012 |  | 450 |  | (518 | ) | 5,760 |
La Rural SA |  | Argentina |  | Organization of events |  | 714,498 |  | 1 |  | (64 | ) | 378 |
TGLT (5) |  | Argentina |  | Real estate |  | 257,320,997 |  | 925 |  | (4,625 | ) | 4,311 |

| (1) | BHSA is a commercial bank of comprehensive services that offers a variety of banking and financial services for individuals, small and medium businesses and large companies. The market price of the share is 9.47 pesos per share. The effect of the treasury shares in the BHSA portfolio is considered for the calculation.
| (2) | Condor is an investment company focused on US hotels. The price of its shares as of June 30, 2021 is US$ 6.07 per share.
| (3) | Quality is dedicated to the exploitation of the San Martín property (former property of Nobleza Piccardo S.A.I.C. and F.).
| (4) | Shufersal is a company that has supermarkets and pharmacies in Israel, the market price of the share is NIS 22,59 as of June 30, 2020.
| (5) | On March 31, 2021 IRSA CP transferred to PointArgentum MasterFund LP, 1,478,788 ADS from TGLT S.A. (equivalent to 22,181,818 ordinary shares) in accordance with the provisions of the share subscription carried out in August 2019. As a consequence of this transaction, IRSA CP’s participation in TGLT S.A. it went from 30.20% to 27.82%
| (*) | Amounts in millions of US Dollars under USGAAP. Condor’s year-end falls on December 31, so the Group estimates their interest with a three-month lag, including material adjustments, if any.
| (**) | Amounts in millions of NIS.
| (***) | The balances as of June 30, 2021 correspond to the Financial Statements of BHSA prepared in accordance with BCRA standards.

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New Lipstick:

On August 7, 2020, as a consequence of negotiations conducted in the context of an increased lease price effective as of May 2020, as set forth in the lease (hereinafter, “Ground Lease”), Metropolitan (a company where IRSA holds, indirectly, a 49.96% interest) executed an agreement with the Ground Lease lessor to conclude the relationship and terminate the ground lease, abandoning the administration of the building. As a consequence of the foregoing, Metropolitan derecognised the liability associated to the Ground Lease, as well as all assets and liabilities associated to the building and the administration as of June 30, 2020. Pursuant to such agreement, Metropolitan was fully released from liability except for (i) claims for liabilities prior to June 1, 2020, from those persons who performed works or rendered services in the Building or for Metropolitan and (ii) claims from persons who had an accident in the property after August 7, 2020.

TGLT S.A.:

During the previous fiscal year, TGLT S.A. and the Company entered into a recapitalization agreement, based on which IRSA CP increased its holding in TGLT S.A. reason why it began to be considered an associate company.

During the current fiscal year, TGLT S.A. has yielded significant losses and its business is being affected by different factors related to the context in which it finds itself. Therefore, the Company decided to re-evaluate the recoverability of this asset.

For this reason and considering that the events are public and have been openly disclosed to the market, it is considered that the market value of the shares is more suitable indicator to determine the value of this holding. This determination implied that an impairment was recognized in the net investment in TGLT S.A. of $ 626 million in addition to the result from proportional valuation.

Set out below is summarized financial information of the associates and joint ventures considered to be material to the Group:

|  | Current Assets |  |  | Non-current Assets |  |  | Current Liabilities |  |  | Non-current Liabilities |  |  | Net assets |  |  | % of ownership interest held |  |  | Interest in associate and joint venture |  |  | Goodwill and others |  |  | Book value |
As of 06.30.21 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Associates |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
BHSA |  |  | 114,759 |  |  |  | 71,092 |  |  |  | 156,405 |  |  |  | 11,661 |  |  |  | 17,785 |  |  |  | 29.91 | % |  |  | 5,319 |  |  |  | 42 |  |  |  | 5,361 |
Joint ventures |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Quality Invest (ii) |  |  | 5 |  |  |  | 8,842 |  |  |  | 100 |  |  |  | 2,987 |  |  |  | 5,760 |  |  |  | 50.00 | % |  |  | 2,880 |  |  |  | 47 |  |  |  | 2,927 |
As of 06.30.20 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Associates |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
BHSA |  |  | 115,457 |  |  |  | 65,503 |  |  |  | 153,639 |  |  |  | 6,954 |  |  |  | 20,367 |  |  |  | 29.91 | % |  |  | 6,092 |  |  |  | 26 |  |  |  | 6,118 |
Gav-Yam |  |  | 63,028 |  |  |  | 249,149 |  |  |  | 29,726 |  |  |  | 176,864 |  |  |  | 105,587 |  |  |  | 34.90 | % |  |  | 36,850 |  |  |  | 4,120 |  |  |  | 40,970 |
Shufersal |  |  | 110,169 |  |  |  | 280,922 |  |  |  | 138,032 |  |  |  | 194,095 |  |  |  | 58,964 |  |  |  | 26.02 | % |  |  | 15,342 |  |  |  | 26,881 |  |  |  | 42,223 |
Joint ventures |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Quality Invest (ii) |  |  | 6 |  |  |  | 8,299 |  |  |  | 131 |  |  |  | 1,956 |  |  |  | 6,218 |  |  |  | 50.00 | % |  |  | 3,109 |  |  |  | 47 |  |  |  | 3,156 |

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|  | Revenues |  |  | Net income / (loss) |  |  | Total comprehensive income / (loss) |  |  | Dividend distribution |  |  | Cash of operating activities |  |  | Cash of investing activities |  |  | Cash of financing activities |  |  | Changes in cash and cash equivalents |
As of 06.30.21 (i) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Associates |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
BHSA |  |  | 29,257 |  |  |  | (2,528 | ) |  |  | (2,528 | ) |  |  | - |  |  |  | 4,318 |  |  |  | (129 | ) |  |  | (28,139 | ) |  |  | (23,950 | )
Joint ventures |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Quality Invest (ii) |  |  | 45 |  |  |  | (518 | ) |  |  | (518 | ) |  |  | - |  |  |  | (59 | ) |  |  | (4 | ) |  |  | 63 |  |  |  | - |
As of 06.30.20 (i) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Associates |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
BHSA |  |  | 19,576 |  |  |  | (1,911 | ) |  |  | (1,911 | ) |  |  | - |  |  |  | 6,993 |  |  |  | 56 |  |  |  | (5,204 | ) |  |  | 1,845 |
Gav-Yam |  |  | 17,350 |  |  |  | 10,161 |  |  |  | 8,195 |  |  |  | 5,388 |  |  |  | 7,639 |  |  |  | (8,596 | ) |  |  | 23,835 |  |  |  | 22,878 |
Shufersal |  |  | 327,436 |  |  |  | 7,579 |  |  |  | 6,759 |  |  |  | 2,155 |  |  |  | 32,855 |  |  |  | (4,069 | ) |  |  | (20,717 | ) |  |  | 8,069 |
Joint ventures |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Quality Invest (ii) |  |  | 27 |  |  |  | 556 |  |  |  | 556 |  |  |  | - |  |  |  | (134 | ) |  |  | - |  |  |  | 134 |  |  |  | - |

(i) | Information under GAAP applicable in the associate and joint ventures´ jurisdiction.
(ii) | In March 2011, Quality acquired an industrial plant located in San Martín, Province of Buenos Aires. The facilities are suitable for multiple uses. On January 20, 2015, Quality agreed with the Municipality of San Martin on certain re zoning and other urban planning matters (“the Agreement”) to surrender a non-significant portion of the land and a monetary consideration of ARS 40 million, payable in two installments of ARS 20 each, the first of which was actually paid on June 30, 2015. In July 2017, the Agreement was amended as follows: 1) a revised zoning plan must be submitted within 120 days as from the amendment date, and 2) the second installment of the monetary considerations was increased to ARS 76 million payables in 18 equal monthly installments. On March 8, 2018, it was agreed with the well-known Gehl Study (Denmark) - Urban Quality Consultant - the elaboration of a Master Plan, generating a modern concept of New Urban District of Mixed Uses. On July 20, 2020 we were notified of the granting of the Hydraulic Aptitude in pre-feasibility instance. On August 5, 2021, they were signed between Quality Invest S.A. and the Municipality of San Martín the following documents: 1) CLUB PERETZ CLUB AGREEMENT ACT CLOSING: It is agreed that within 48 hours of signing the same Quality will pay the certificates owed for the work in question already completed, releasing both parties from any claim regarding the Minutes signed on January 20, 2015 The amount owed (already checked and agreed between the parties) is ARS 18,926,541. and the execution of the works are described, detailed and carried out. 2) COMPLEMENTARY AGREEMENT WITH THE MUNICIPALITY OF SAN MARTIN: In this agreement the completion of the Rodriguez Peña expansion work and the relocation and start-up of the EDENOR substation are agreed, according to the plan and specifications drawn up by TIS and that they are part of its annexes. In return, the certifications owed will be paid as follows: The total is for ARS 26,085,086: ARS 15,000,000.- are paid 48 hours after signing this document and the balance (without any adjustment clause) at the time of the provisional reception of the work, where the definitive reception and Delivery Certificate will be signed.

BHSA

BHSA is subject to certain restrictions on the distribution of profits, as required by BCRA regulations.

As of June 30, 2021, BHSA has a remnant of 35.2 million Class C treasury shares of a par value of ARS 1 received in 2009 as a result of certain financial transactions. The Annual Shareholders’ Meeting decided to allocate 35.1 million of such shares to an employee compensation plan pursuant to Section 67 of Law 26,831. The remaining shares belong to third party holders of Stock Appreciation Rights, who have failed to produce the documentation required for redemption purposes. As of June 30, 2021, considering the effect of such treasury shares, the Group’s interest in BHSA amounts to 29.91%.

The Group estimated that the value in use of its investment in BHSA as of June 30, 2021 and 2020 amounted to ARS 6,734, ARS 8,911, respectively. The value in use was estimated based on the present value of future business cash flows. The main assumptions used were the following:

| - | The Group considered 7 years as the horizon for the projection of BHSA cash flows.
| - | The “Private BADLAR” interest rate was projected based on internal data and information gathered from external advisors.
| - | The projected exchange rate was estimated in accordance with internal data and external information provided by independent consultants.
| - | The discount rate used to discount actual dividend flows was 14.02% in 2021 and 13.82% in 2020.
| - | The sensitivity to a 1% increase in the discount rate would be a reduction in the value in use of ARS 625 for 2021 and of ARS 805 for 2020.

The estimated value in use overcomes the book value of the investment, because of that, no adjustment was necessary on the recorded value of the investment.

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Puerto Retiro (joint venture):

At present, this 8.3-hectare plot of land, is affected by a zoning regulation defined as U.P. which prevents the property from being used for any purposes other than strictly port activities.

Puerto Retiro was involved in a judicial bankruptcy action brought by the National Government. The current Board of Directors would not be held personally liable with regard to this action. Management and legal counsel of the Company believe that there are sufficient legal and technical arguments to consider that the petition for extension of the bankruptcy case will be dismissed by the court. However, in view of the current status of the action, its result cannot be predicted.

Moreover, Tandanor filed a civil action against Puerto Retiro S.A. and the other defendants in the criminal case for violation of Section 174 (5) based on Section 173 (7) of the Criminal Code of Argentina. Such action seeks -on the basis of the nullity of the decree that approved the bidding process involving the Dársena Norte property- the restitution of the property and a reimbursement in favor of Tandanor for all such amounts it has allegedly lost as a result of a suspected fraudulent transaction involving the sale of the property. Puerto Retiro has presented the allegation on the merit of the evidence, highlighting that the current shareholders of Puerto Retiro did not participate in any of the suspected acts in the criminal case since they acquired the shares for consideration and in good faith several years after the facts told in the process. Likewise, it was emphasized that the company Puerto Retiro is foreign to the bidding / privatization carried out for the sale of Tandanor shares. On September 7, 2018, the Oral Federal Criminal Court No. 5 rendered a decision. According to the sentence read by the president of the Court, Puerto Retiro won the preliminary objection of limitation filed in the civil action. However, in the criminal case, where Puerto Retiro is not a party, it was ordered, among other issues, the confiscation (“decomiso”) of the property owned by Puerto Retiro known as Planta I. The grounds of the Court's judgment were read on November 11, 2018. From that moment, all the parties were able to present the appeals. Given this fact, an extraordinary appeal was filed, which was rejected, and as a result, a complaint was filed for a rejected appeal, which was granted. Consequently, the appeal is under study in the Argentine Supreme Court of Justice.

In the criminal action, the claimant reported the violation by Puerto Retiro of the injunction ordered by the criminal court consisting in an order to stay (“prohibición de innovar”) and not to contract with respect to the property disputed in the civil action. As a result of this complaint, the Federal Oral Court No. 5 formed an incident and ordered and executed the closure of the property where the lease agreements were being executed (a heliport and a mooring), in order to enforce compliance with the measure before mentioned. As a result of this circumstance, it was learned that the proceedings were turned over to the Criminal Chamber for the allocation of the court to investigate the possible commission of a crime of disobedience. As of the date of issuance of these financial statements there has been no news about the progress of this cause.

Faced with the evolution of the legal cases that affect it and based on the reports of its legal advisors, Puerto Retiro Management has decided to register in fiscal year 2019 an allowance equivalent to 100% of the book value of its investment property, without prejudice to reverse it when a favorable ruling is obtained in the interposed actions.

9. Investment properties

Changes in the Group’s investment properties according to the fair value hierarchy for the years ended June 30, 2021 and 2020 were as follows:

|  | June 30, 2021 |  |  | June 30, 2020 |
|  | Level 2 |  |  | Level 3 |  |  | Level 2 |  |  | Level 3 |
Fair value at the beginning of the year |  |  | 109,543 |  |  |  | 232,233 |  |  |  | 59,942 |  |  |  | 441,012 |
Adjustments previous years (IFRS 16) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 640 |
Additions |  |  | 274 |  |  |  | 762 |  |  |  | 5,439 |  |  |  | 2,761 |
Capitalized leasing costs |  |  | 13 |  |  |  | 9 |  |  |  | 6 |  |  |  | 24 |
Amortization of capitalized leasing costs (i) |  |  | (7 | ) |  |  | (6 | ) |  |  | (9 | ) |  |  | (14 | )
Transfers / Reclassification to assets held for sale |  |  | (530 | ) |  |  | - |  |  |  | 6,836 |  |  |  | (43,229 | )
Incorporation by business combination |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 366 |
Deconsolidation (ii) |  |  | - |  |  |  | (117,547 | ) |  |  | (2,544 | ) |  |  | (234,081 | )
Disposals |  |  | (21,426 | ) |  |  | - |  |  |  | (2,613 | ) |  |  | (20,145 | )
Currency translation adjustment |  |  | (12 | ) |  |  | (12,356 | ) |  |  | 20 |  |  |  | 80,301 |
Net gain / (loss) from fair value adjustment |  |  | 5,737 |  |  |  | (13,535 | ) |  |  | 42,466 |  |  |  | 4,598 |
Fair value at the end of the year |  |  | 93,592 |  |  |  | 89,560 |  |  |  | 109,543 |  |  |  | 232,233 |

(i) | Amortization charges of capitalized leasing costs were included in “Costs” in the Consolidated Statements of Income and Other Comprehensive Income (Note 24).
(ii) | As of June 30, 2021 corresponds to IDBD and as of June 30,2020 ARS 2,544 corresponds to La Maltería and ARS 234,081 to Gav-Yam.

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The following is the balance by type of investment property of the Group as of June 30, 2021 and 2020:

|  | 30.06.2021 |  |  | 30.06.2020 |
Rental properties |  |  | 125,506 |  |  |  | 289,412 |
Undeveloped parcels of land |  |  | 54,183 |  |  |  | 41,356 |
Properties under development |  |  | 3,463 |  |  |  | 11,008 |
TOTAL |  |  | 183,152 |  |  |  | 341,776 |

Certain investment property assets of the Group have been mortgaged or restricted to secure some of the Group’s borrowings and other payables. Book amount of those properties amounts to ARS 1,727, ARS 27,290 as June 30, 2021 and 2020, respectively.

The following amounts have been recognized in the Consolidated Statements of Income and Other Comprehensive Income:

|  | 06.30.2021 |  |  | 06.30.2020 |  |  | 06.30.2019 |
Rental and services income |  |  | 11,034 |  |  |  | 17,131 |  |  |  | 21,937 |
Direct operating expenses |  |  | (4,430 | ) |  |  | (12,141 | ) |  |  | (12,156 | )
Development reimbursements / (expenses) |  |  | 114 |  |  |  | 169 |  |  |  | (131 | )
Net realized gain from fair value adjustment of investment properties (i) (ii) |  |  | 10,821 |  |  |  | 1,703 |  |  |  | - |
Net unrealized (loss) / gain from fair value adjustment of investment properties |  |  | (18,591 | ) |  |  | 48,961 |  |  |  | (58,231 | )

(i) | As of June 30, 2021 it includes ARS 5,434 for the sale of Boston Tower, ARS 5,368 for the sale of Bouchard 710 and ARS 19 for the sale of garages in Bouchard 557. As of June 30, 2020 it includes ARS 5 and ARS 541 for the monetary and non-monetary benefit, respectively, corresponding to the barter transaction related to Caballito Ferro land, ARS 861 for the sale of floors 10th and 11th of the office building “200 Della Paolera”, and ARS 296 for the deconsolidation of La Maltería SA.
(ii) | As of June 30, 2021, ARS (1,556) corresponds to the result for changes in the fair value realized for the year ((ARS 1,071) from the sale of Torre Boston, (ARS 470) from the sale of Bouchard 710 and (ARS 15) from the sale of garages in Bouchard 557) and ARS 12,377 from the result of changes in the fair value made in previous years (ARS 6,506 from the Boston Tower sale and ARS 5,837 from the Bouchard 710 sale and 34 from the sale of garages in Bouchard 557). As of June 30, 2020, ARS 1,000 corresponds to net realized gain from fair value on investment properties for the year (ARS 139 from the sale of Caballito Ferro land and ARS 861 from the sale of the “200 Della Paolera” building) and ARS 703 net realized gain from fair value on investment properties in previous years (ARS 407 attributable to the Caballito Ferro land and ARS 296 to the deconsolidation of La Maltería S.A.).

See note 5 (liquidity schedule) for detail of contractual commitments related to investment properties.

Valuation processes

The Group’s investment properties were valued at each reporting date by independent professionally qualified appraisers who hold a recognized relevant professional qualification and have experience in the locations and segments of the investment properties appraised. For all investment properties, their current use equates to the highest and best use.

The Group has a team which reviews the appraisals performed by the independent appraisers (the “review team”). The review team: i) verifies all major and important assumptions relevant to the appraisal in the valuation report from the independent appraisers; ii) assesses property valuation movements compared to the valuation report from the prior period; and iii) holds discussions with the independent appraisers.

Changes in Level 2 and 3 fair values, if any, are analyzed at each reporting date during the valuation discussions between the review team and the independent appraisers. The Board of Directors ultimately approves the fair value calculation for recording into the Financial Statements.

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During the annual investment property valuation process, the following circumstances were identified, among other aspects: i) entry into force of the modifications in the urban planning code of the Autonomous City of Buenos Aires (CABA) with the new urban code law sanctioned in November 2020 and which entered into force in February 2021 modifying approximately one third of the current code, ii) new construction potential, iii) consolidation of new paradigms of the sector imposed by the pandemic, the general economic situation and the situation of the real estate sector that make technical, legal or economically viable buildable potentials or surpluses for alternative uses of the entire portfolio of properties.

In this sense, the shopping malls were the most affected by the aforementioned circumstances, taking into account the size of their plots and their unique and strategic locations, considering an alternative potential realization market.

The impact of the pandemic and the long-term closure of shopping malls led to a reconsideration of the possibility of mixed uses in the buildable potentials of such shopping malls, seeking a new centrality and enhancing the attractiveness in replacement of anchor stores.

On the other hand, the analysis of opening towards its surroundings and the generation of open spaces produced a new distribution of the value of the existing square meters, producing a change of focus on how to maximize said surplus square meters.

This led to reevaluate the analysis of the value of surplus square meters that were potentially marketable, (being that historically they were the most profitable), to reconvert them to other complementary uses. The buildable potentials analyzed have unique, irreplaceable locations, with high potentials, feasible realization and very attractive from an economic point of view. As a data, the value of construction during 2020 improved the relationship of the construction cost and its future sale speculation of square meters.

The buildable potentials identified in this fiscal year are related to the following shopping malls and are valued in accordance with the methodology established for the rest of the Level 2 properties:

| 1. | Patio Bullrich, CABA
| 2. | Alto Palermo, CABA
| 3. | Córdoba Shopping, Córdoba
| 4. | Alto Rosario, Rosario, Santa Fe.

Valuation techniques used for the estimation of fair value of the investment property

The Group has defined valuation techniques according to the characteristics of each property and the type of market in which these assets are located, in order to maximize the use of observable information available for the determination of fair value.

For the Shopping Malls there is no liquid market for the sale of properties with these characteristics that can be taken as a reference of value. Likewise, the Shopping Malls, a business whose revenue is denominated in Argentine Pesos, are highly related to the fluctuation of macroeconomic variables in Argentina, the purchasing power of individuals, the economic cycle of Gross Domestic Product (GDP) growth, the evolution of inflation, among others. Consequently, the methodology adopted by the Group for the valuation of Shopping Malls is the discounted cash flow model (“DCF”), which allows the volatility of the Argentine economy to be taken into account and its correlation with the revenue streams of the Malls and the inherent risk of the Argentine macroeconomy. The DCF methodology contemplates the use of certain unobservable valuation assumptions, which are determined reliably based on the information and internal sources available at the date of each measurement. These assumptions mainly include the following:

| • | Future projected income flow based on the current locations, type and quality of the properties, supported by the rental contracts that the Company has signed with its tenants. Because the Company’s income arises from the higher value between a Minimum Insured Fixed Value (“VMA”) and a percentage of the sales of the tenants in each Shopping Mall, estimates of the evolution of GDP and Inflation of the Argentine economy provided by external consultants to estimate the evolution of tenant sales, which present a high correlation with these macroeconomic variables. Said macroeconomic projections were contrasted with the projections prepared by the International Monetary Fund (“IMF”), the Organization for Economic Cooperation and Development (“OECD”) and with the Market Expectations Survey (“REM”), which consists of a survey prepared by the Central Bank of the Argentine Republic (“BCRA”) aimed at local and foreign specialized analysts in order to allow a systematic monitoring of the main macroeconomic forecasts in the short and medium term on the evolution of the Argentine economy.

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| • | The income from all Shopping Malls was considered to grow with the same elasticity in relation to the evolution of the GDP and the projected inflation. The specific characteristics and risks of each Shopping Mall are captured through the use of the historical average EBITDA Margin of each of them.
| • | Cash flows from future investments, expansions or improvements in Shopping Mall were not contemplated.
| • | Terminal value: a perpetuity calculated from the cash flow of the last year of useful life was considered.
| • | The cash flow for concessions was projected until the termination date of the concession stipulated in the current contract.
| • | Given the prevailing inflationary context and the volatility of certain macroeconomic variables, a reference long term interest rate in Argentine Pesos is not available to discount the projected cash flows from shopping malls. Consequently, the projected cash flows were dollarized through the future ARS / US$ exchange rate curve provided by an external consultant, which are contrasted to assess their reasonableness with those of the IMF, OECD, REM and the On-shore Exchange Rate Futures Market (ROFEX). Finally, dollarized cash flows were discounted with a long-term dollar rate, the weighted average capital cost rate (“WACC”), for each valuation date.
| • | The estimation of the WACC discount rate was determined according to the following components:
| a) | United State Governments Bonds risk-free rate;
| b) | Industry beta, considering comparable companies from the United States, Brazil, Chile and Mexico, in order to contemplate the Market Risk on the risk-free rate;
| c) | Argentine country risk considering the EMBI + Index; and
| d) | Cost of debt and capital structure, considering that information available from the Argentine corporate market (“blue chips”) was determined as a reference, since sovereign bonds have a history of defaults. Consequently, and because IRSA CP, based on its representativeness and market share represents the most important entity in the sector, we have taken its indicators to determine the discount rate.

For offices, other rental properties, plot of lands and buildable potentials the valuation was determined using transactions of comparable market assets, since the market for offices and land banks in Argentina is liquid and has market transactions that can be taken as reference. These values are adjusted to reflect differences in key attributes such as location, property size and quality of interior fittings (incidence adjustments). The most significant input to the comparable market approach is the price per square meter that derives from the supply and demand in force in the market at each valuation date.

Since September 2019, the real estate market has faced certain changes in terms of its operation as a consequence of the implementation of regulations applicable to the foreign exchange market. In general terms, the measure adopted on September 1, 2019 by the BCRA sets forth that exporters of goods and services should settle foreign currency from abroad in the local exchange market 5 days after the collection of such funds, at the latest. Furthermore, it provides that legal entities residing in Argentina may buy foreign currency without restrictions for imports or payments of debts on the maturity date thereof, although they shall apply for the BCRA´s prior authorization for the purposes of: buying foreign currency in order to form external assets, prepaying debts, making remittances of profits and dividends abroad or transferring funds abroad. Likewise, pursuant to such regulations, access to the market by natural persons for the purchase of dollars was restricted. Afterwards, the BCRA implemented stricter measures, further limiting access to the foreign exchange market (see Note 34).

From the previous year, it is observed that the purchase and sales transactions for office buildings may be settled in Argentine Pesos (by using an implicit foreign exchange rate higher than the official one) or in dollars. Consequently, the most probable scenario is that any sale of office buildings/reserves be settled in Argentine Pesos at an implicit foreign exchange rate higher than the official one. This is evidenced by the transactions consummated by the Group prior to and after the closing of these financial statements. Therefore, the Group has valued its office buildings, land reserves and buildable potentials in Argentine Pesos at the end of the year considering the situation described above, considering an implicit exchange rate higher than the official one.

In certain situations, it is complex to determine reliably the fair value of developing properties. In order to assess whether the fair value of a developing property can be determined reliably, management considers the following factors, among others:

| • | The provisions of the construction contract.
| • | The stage of completion.
| • | Whether the project / property is standard (typical for the market) or non-standard.
| • | The level of reliability of cash inflows after completion.
| • | The specific development risk of the property.
| • | Previous experience with similar constructions.
| • | Status of construction permits.

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There were no changes in the valuation techniques during the year.

The following table presents information regarding the fair value measurements of investment properties using significant unobservable inputs (Level 3):

|  |  |  |  |  |  |  | 06.30.21 (i) |  |  | 06.30.20 (i) |  |  | 06.30.19 (i) |
Description |  | Valuation technique |  | Parameters |  | Range fiscal year 2021 / 2019 |  | Increase |  |  | Decrease |  |  | Increase |  |  | Decrease |  |  | Increase |  |  | Decrease |
Shopping Malls in Argentina (Level 3) |  | Discounted cash flows |  | Discount rate |  | 13.53% / 12.10% |  |  | (3,840 | ) |  |  | 4,589 |  |  |  | (6,387 | ) |  |  | 7,821 |  |  |  | (4,906 | ) |  |  | 6,118 |
|  | Growth rate |  | 2.4% / 3.0% |  |  | 1,759 |  |  |  | (1,472 | ) |  |  | 3,045 |  |  |  | (2,486 | ) |  |  | 2,307 |  |  |  | (1,850 | )
|  | Inflation |  | (*) |  |  | 8,171 |  |  |  | (6,740 | ) |  |  | 13,296 |  |  |  | (10,938 | ) |  |  | 4,296 |  |  |  | (3,932 | )
|  | Devaluation |  | (*) |  |  | (4,357 | ) |  |  | 5,325 |  |  |  | (6,181 | ) |  |  | 7,555 |  |  |  | (4,559 | ) |  |  | 5,571 |
Plot of land in Argentina (Level 3) |  | Comparable with incidence adjustment |  | Value per square meter (m2) |  | ARS 47,427 / (ARS 21,497) |  |  | 3,493 |  |  |  | (3,493 | ) |  |  | 3,243 |  |  |  | (3,243 | ) |  |  | 2,007 |  |  |  | (2,007 | )
|  | % of incidence |  | 30% / (30%) |  |  | 11,644 |  |  |  | (11,644 | ) |  |  | 10,808 |  |  |  | (10,808 | ) |  |  | 6,696 |  |  |  | (6,696 | )

(*) Fiscal year 2021: For the next 5 years, an average ARS / US$ exchange rate with an upward trend was considered, starting at ARS 116.94 (corresponding to the year ended June 30, 2022) and arriving at ARS 376.56. In the long term, a nominal devaluation rate of 27.5% calculated based on the quotient between inflation in Argentina and the United States is assumed. The considered inflation shows a downward trend, which starts at 44.1% (corresponding to the year ended June 30, 2022) and stabilizes at 30.0% after 5 years.Fiscal year 2020: For the next 5 years, an average ARS / US$ exchange rate with an upward trend was considered, starting at ARS 86.21 (corresponding to the year ended June 30, 2021) and arriving at ARS 243.89. In the long term, a nominal devaluation rate of 21.1% calculated based on the quotient between inflation in Argentina and the United States is assumed. The considered inflation shows a downward trend, which starts at 47.9% (corresponding to the year ended June 30, 2021) and stabilizes at 23.2% after 5 years.

Fiscal year 2019: For the next 5 years, an average ARS / US$ exchange rate with an upward trend was considered, starting at ARS 48.47 (corresponding to the year ended June 30, 2020) and arriving at ARS 72.16. In the long term, a nominal devaluation rate of 5.7% calculated based on the quotient between inflation in Argentina and the United States is assumed. The considered inflation shows a downward trend, which starts at 44.5% (corresponding to the year ended June 30, 2020) and stabilizes at 8% after 5 years.

(i) Considering an increase or decrease of: 100 points for the discount and growth rate in Argentina, 10% for the incidence and inflation, 10% for the devaluation, 50 points for the discount rate of Israel and USA, and 1% for the value of the m2.

Costa Urbana –former Solares de Santa María– Costanera Sur, Buenos Aires City (IRSA)

We own an important property of more than 70 hectares, which we acquired in 1997, facing the Río de la Plata on the Costanera Sur, south of Puerto Madero, 10 minutes from downtown Buenos Aires, originally called “Solares de Santa María” which we have renamed “Costa Urbana”. We intend to create a mixed-use development including residential complexes, offices, stores, hotels, sports clubs and service areas (schools, supermarkets and parking spaces).

After some unsuccessful approval attempts with the City of Buenos Aires Government and its Legislature, and after new negotiations carried out in recent years, we have signed a new agreement with the Executive Power of the City of Buenos Aires under the “Urban Agreement” modality framed within Decree No. 475 published on December 30, 2020, by means of which it approved the regulation of article 10.9. “Urban Agreements” of Law No. 6099 (text consolidated by Law No. 6347). According to article 10.9 of the Urban Code, these agreements are contracts entered into between the owner of a land/property and the Executive Power, which imply a regulatory change that must be approved by the City of Buenos Aires Legislature. Under this modality, a new urbanization project was proposed, in which more than 67% of the property’s surface is destined for public use, maintaining the original “FOT 1” that implies a capacity to develop more than 895,000 sqm. The Bill was raised for treatment in the first reading on the Legislature premises and it was approved without abstentions on August 19, 2021 by 36 votes out of a total of 55. As part of the approval process, it has been set a date for the non-binding Public Hearing on October 15, 2021 to later celebrate the treatment in second reading for final legislative approval.

The accounting valuation as of June 30, 2021 does not reflect any of these potential changes, valuing the land with the same methodology as in previous years.

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10. Property, plant and equipment

Changes in the Group’s property, plant and equipment for the years ended June 30, 2021 and 2020 were as follows:

|  | Agricultural establishments |  |  | Buildings and facilities |  |  | Machinery and equipment |  |  | Communication networks |  |  | Others (i) |  |  | Total |
Net book amount at the June 30, 2019 |  |  | - |  |  |  | 6,011 |  |  |  | 1,149 |  |  |  | 32,439 |  |  |  | 8,322 |  |  |  | 47,921 |
Costs |  |  | - |  |  |  | 15,969 |  |  |  | 3,630 |  |  |  | 137,142 |  |  |  | 18,363 |  |  |  | 175,104 |
Accumulated depreciation |  |  | - |  |  |  | (9,958 | ) |  |  | (2,481 | ) |  |  | (104,703 | ) |  |  | (10,041 | ) |  |  | (127,183 | )
Balances at June 30, 2019 |  |  | - |  |  |  | 6,011 |  |  |  | 1,149 |  |  |  | 32,439 |  |  |  | 8,322 |  |  |  | 47,921 |
Additions |  |  | 54 |  |  |  | 677 |  |  |  | 99 |  |  |  | 5,132 |  |  |  | 2,556 |  |  |  | 8,518 |
Disposals |  |  | - |  |  |  | (93 | ) |  |  | (8 | ) |  |  | (4,802 | ) |  |  | (62 | ) |  |  | (4,965 | )
Incorporation by business combination |  |  | 6,044 |  |  |  | 2,424 |  |  |  | 566 |  |  |  | - |  |  |  | 140 |  |  |  | 9,174 |
Deconsolidation |  |  | - |  |  |  | (635 | ) |  |  | (892 | ) |  |  | - |  |  |  | (66 | ) |  |  | (1,593 | )
Reclassification to assets assets held for sale |  |  | - |  |  |  | (412 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (412 | )
Currency translation adjustment |  |  | 468 |  |  |  | 732 |  |  |  | 287 |  |  |  | 5,335 |  |  |  | 1,927 |  |  |  | 8,749 |
Transfers |  |  | - |  |  |  | (368 | ) |  |  | (23 | ) |  |  | 566 |  |  |  | (566 | ) |  |  | (391 | )
Depreciation charges (ii) |  |  | (27 | ) |  |  | (598 | ) |  |  | (120 | ) |  |  | (6,956 | ) |  |  | (2,630 | ) |  |  | (10,331 | )
Net book amount at the June 30, 2020 |  |  | 6,539 |  |  |  | 7,738 |  |  |  | 1,058 |  |  |  | 31,714 |  |  |  | 9,621 |  |  |  | 56,670 |
Costs |  |  | 14,268 |  |  |  | 18,140 |  |  |  | 6,734 |  |  |  | 151,598 |  |  |  | 19,364 |  |  |  | 210,104 |
Accumulated depreciation |  |  | (7,729 | ) |  |  | (10,402 | ) |  |  | (5,676 | ) |  |  | (119,884 | ) |  |  | (9,743 | ) |  |  | (153,434 | )
Balances at June 30, 2020 |  |  | 6,539 |  |  |  | 7,738 |  |  |  | 1,058 |  |  |  | 31,714 |  |  |  | 9,621 |  |  |  | 56,670 |
Additions |  |  | 55 |  |  |  | 202 |  |  |  | 64 |  |  |  | 581 |  |  |  | 754 |  |  |  | 1,656 |
Disposals |  |  | - |  |  |  | (28 | ) |  |  | (7 | ) |  |  | (55 | ) |  |  | - |  |  |  | (90 | )
Deconsolidation |  |  | (6,102 | ) |  |  | (4,285 | ) |  |  | (795 | ) |  |  | (28,322 | ) |  |  | (8,485 | ) |  |  | (47,989 | )
Reclassification to assets assets held for sale |  |  | - |  |  |  | (28 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (28 | )
Currency translation adjustment |  |  | (464 | ) |  |  | (343 | ) |  |  | (61 | ) |  |  | (2,286 | ) |  |  | (682 | ) |  |  | (3,836 | )
Transfers |  |  | - |  |  |  | 989 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 989 |
Depreciation charges (ii) |  |  | (28 | ) |  |  | (428 | ) |  |  | (89 | ) |  |  | (1,632 | ) |  |  | (1,049 | ) |  |  | (3,226 | )
Net book amount at the June 30, 2021 |  |  | - |  |  |  | 3,817 |  |  |  | 170 |  |  |  | - |  |  |  | 159 |  |  |  | 4,146 |
Costs |  |  | - |  |  |  | 7,076 |  |  |  | 2,513 |  |  |  | - |  |  |  | 578 |  |  |  | 10,167 |
Accumulated depreciation |  |  | - |  |  |  | (3,259 | ) |  |  | (2,343 | ) |  |  | - |  |  |  | (419 | ) |  |  | (6,021 | )
Balances at June 30, 2021 |  |  | - |  |  |  | 3,817 |  |  |  | 170 |  |  |  | - |  |  |  | 159 |  |  |  | 4,146 |

(i) | Includes furniture and fixtures and vehicles.
(ii) | As of June 30, 2021 and 2020, depreciation charges of property, plant and equipment were recognized: ARS 244 and ARS 337 in "Costs", ARS 100 and ARS 211 in "General and administrative expenses" and ARS 5 and ARS 8 in "Selling expenses", respectively in the Consolidated Statements of Income and Other Comprehensive Income (Note 24). Likewise, a charge of ARS 2,807 and 9,775 has been made in “Discontinued operations” as of June 30, 2021 and 2020, respectively.

11. Trading properties

Changes in the Group’s trading properties for the fiscal years ended June 30, 2021 and 2020 were as follows:

|  | Completed properties |  |  | Properties under development |  |  | Undeveloped sites |  |  | Total |
At June 30, 2019 |  |  | 4,033 |  |  |  | 3,596 |  |  |  | 4,927 |  |  |  | 12,556 |
Additions |  |  | 36 |  |  |  | 2,604 |  |  |  | 846 |  |  |  | 3,486 |
Deconsolidation |  |  | - |  |  |  | (233 | ) |  |  | - |  |  |  | (233 | )
Currency translation adjustment |  |  | 452 |  |  |  | 47 |  |  |  | 817 |  |  |  | 1,316 |
Transfers |  |  | 1,859 |  |  |  | (1,486 | ) |  |  | (50 | ) |  |  | 323 |
Disposals |  |  | (3,340 | ) |  |  | (3,282 | ) |  |  | (53 | ) |  |  | (6,675 | )
At June 30, 2020 |  |  | 3,040 |  |  |  | 1,246 |  |  |  | 6,487 |  |  |  | 10,773 |
Additions |  |  | - |  |  |  | 408 |  |  |  | 397 |  |  |  | 805 |
Desconsolidation |  |  | (2,128 | ) |  |  | (142 | ) |  |  | (5,420 | ) |  |  | (7,690 | )
Currency translation adjustment |  |  | (195 | ) |  |  | (126 | ) |  |  | (373 | ) |  |  | (694 | )
Transfers |  |  | 194 |  |  |  | (194 | ) |  |  | - |  |  |  | - |
Disposals |  |  | (790 | ) |  |  | (390 | ) |  |  | (256 | ) |  |  | (1,436 | )
At June 30, 2021 |  |  | 121 |  |  |  | 802 |  |  |  | 835 |  |  |  | 1,758 |

|  | June 30, 2021 |  |  | June 30, 2020 |
Non-current |  |  | 1,644 |  |  |  | 7,294 |
Current |  |  | 114 |  |  |  | 3,479 |
Total |  |  | 1,758 |  |  |  | 10,773 |

(i) | Includes Zetol and Vista al Muelle plots of land, which have been mortgaged to secure Group’s borrowings. The net book value amounted to ARS 801 and ARS 865 as of June 30, 2021 and 2020, respectively. Additionally, the Group has contractual obligations not provisioned related to these plots of lands committed when certain properties were acquired or real estate projects were approved, and amount to ARS 906 andARS 1,039, respectively. During 2021, infrastructure works have been started in the a and b sector and it is estimated to be complete by the end of 2021 and the beginning of 2022, together with the delivery of the units built in tower 1 by the barterer, this allows us to give better access to the area that will help advance the development that is taking place in the area.

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12. Intangible assets

Changes in the Group’s intangible assets for the years ended June 30, 2021 and 2020 were as follows:

|  | Year ended June 30, 2021 |
|  | Goodwill |  |  | Trademarks |  |  | Licenses |  |  | Customer relations |  |  | Information systems and software |  |  | Contracts and others |  |  | Total |
Balance at June 30, 2019 |  |  | 9,853 |  |  |  | 9,789 |  |  |  | 3,457 |  |  |  | 4,733 |  |  |  | 5,729 |  |  |  | 4,895 |  |  |  | 38,456 |
Costs |  |  | 9,853 |  |  |  | 10,609 |  |  |  | 14,219 |  |  |  | 30,459 |  |  |  | 9,691 |  |  |  | 12,934 |  |  |  | 87,765 |
Accumulated amortization |  |  | - |  |  |  | (820 | ) |  |  | (10,762 | ) |  |  | (25,726 | ) |  |  | (3,962 | ) |  |  | (8,039 | ) |  |  | (49,309 | )
Net book amount at June 30, 2019 |  |  | 9,853 |  |  |  | 9,789 |  |  |  | 3,457 |  |  |  | 4,733 |  |  |  | 5,729 |  |  |  | 4,895 |  |  |  | 38,456 |
Additions |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 2,318 |  |  |  | 4,453 |  |  |  | 6,771 |
Disposals |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (27 | ) |  |  | (206 | ) |  |  | (96 | ) |  |  | (329 | )
Deconsolidation |  |  | (4,895 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (33 | ) |  |  | - |  |  |  | (4,928 | )
Incorporation by business combination |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 57 |  |  |  | 29 |  |  |  | - |  |  |  | 86 |
Currency translation adjustment |  |  | 3,518 |  |  |  | 1,852 |  |  |  | 597 |  |  |  | 648 |  |  |  | 1,023 |  |  |  | 1,038 |  |  |  | 8,676 |
Amortization charges (i) |  |  | - |  |  |  | (183 | ) |  |  | (419 | ) |  |  | (1,694 | ) |  |  | (2,517 | ) |  |  | (2,187 | ) |  |  | (7,000 | )
Balance at June 30, 2020 |  |  | 8,476 |  |  |  | 11,458 |  |  |  | 3,635 |  |  |  | 3,717 |  |  |  | 6,343 |  |  |  | 8,103 |  |  |  | 41,732 |
Costs |  |  | 8,476 |  |  |  | 12,649 |  |  |  | 16,956 |  |  |  | 35,644 |  |  |  | 11,888 |  |  |  | 20,071 |  |  |  | 105,684 |
Accumulated amortization |  |  | - |  |  |  | (1,191 | ) |  |  | (13,321 | ) |  |  | (31,927 | ) |  |  | (5,545 | ) |  |  | (11,968 | ) |  |  | (63,952 | )
Net book amount at June 30, 2020 |  |  | 8,476 |  |  |  | 11,458 |  |  |  | 3,635 |  |  |  | 3,717 |  |  |  | 6,343 |  |  |  | 8,103 |  |  |  | 41,732 |
Additions |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 28 |  |  |  | 444 |  |  |  | 1,703 |  |  |  | 2,175 |
Disposals |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (111 | ) |  |  | - |  |  |  | (111 | )
Deconsolidation |  |  | (8,479 | ) |  |  | (10,614 | ) |  |  | (3,292 | ) |  |  | (3,141 | ) |  |  | (4,654 | ) |  |  | (6,366 | ) |  |  | (36,546 | )
Impairment |  |  | (40 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (40 | )
Currency translation adjustment |  |  | 178 |  |  |  | (816 | ) |  |  | (260 | ) |  |  | (272 | ) |  |  | (707 | ) |  |  | (598 | ) |  |  | (2,475 | )
Amortization charges (i) |  |  | - |  |  |  | (28 | ) |  |  | (83 | ) |  |  | (332 | ) |  |  | (1,110 | ) |  |  | (782 | ) |  |  | (2,335 | )
Balance at June 30, 2021 |  |  | 135 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 205 |  |  |  | 2,060 |  |  |  | 2,400 |
Costs |  |  | 135 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 789 |  |  |  | 2,368 |  |  |  | 3,292 |
Accumulated amortization |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (584 | ) |  |  | (308 | ) |  |  | (892 | )
Net book amount at June 30, 2021 |  |  | 135 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 205 |  |  |  | 2,060 |  |  |  | 2,400 |

(i) | Amortization charge was recognized in the amount of ARS 21 and ARS 98 under "Costs", in the amount of ARS 101 and ARS 6 under "General and administrative expenses" as of June 30, 2021 and 2020, respectively and ARS 2 under "Selling expenses" as of June 30, 2020 in the Consolidated Statements of Income and Other Comprehensive Income (Note 24). Likewise, ARS 2,213 and ARS 6,894has been charged to the result of discontinued operations as of June 30, 2021 and 2020, respectively.

13. Rights of use of assets

Below is the composition of the rights of use of the Group´s assets as of June 30, 2021 and June 30, 2020:

|  | June 30, 2021 |  |  | June 30, 2020 |
Real Estate |  |  | 11 |  |  |  | 6,182 |
Telecommunications |  |  | - |  |  |  | 16,528 |
Machinery and equipment |  |  | 4 |  |  |  | 20 |
Others |  |  | 796 |  |  |  | 7,098 |
Total Right-of-use assets |  |  | 811 |  |  |  | 29,828 |
Non-current |  |  | 811 |  |  |  | 29,828 |
Total |  |  | 811 |  |  |  | 29,828 |

Changes in the Group´s rights of use during the fiscal years ended June 30, 2021 and 2020, were as follows:

|  | June 30, 2021 |  |  | June 30, 2020 |
Beginning of the year |  |  | 29,828 |  |  |  | - |
IFRS 16 inicial adjustments |  |  | - |  |  |  | 21,214 |
Additions (i) |  |  | 889 |  |  |  | 12,153 |
Disposals |  |  | (83 | ) |  |  | - |
Transfer |  |  | - |  |  |  | 237 |
Amortization charges |  |  | (1,912 | ) |  |  | (7,076 | )
Deconsolidation |  |  | (25,853 | ) |  |  | (63 | )
Currency translation adjustment |  |  | (2,058 | ) |  |  | 3,363 |
Total |  |  | 811 |  |  |  | 29,828 |

(i) | includes incorporation by business combination.

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Depreciation charge for rights of use is detailed below:

|  | June 30, 2021 |  |  | June 30, 2020 |
Real Estate |  |  | 1,292 |  |  |  | 808 |
Telecommunications |  |  | 296 |  |  |  | 4,739 |
Others |  |  | 324 |  |  |  | 1,529 |
Total depreciation of right-of-use assets (i) |  |  | 1,912 |  |  |  | 7,076 |

(ii) | Includes ARS 1,824 and ARS 7,015 charged to the result of discontinued operations as of June 30, 2021 and 2020 respectively.

Other charges to income related to rights of use were as follows:

|  | June 30, 2021 |  |  | June 30, 2020 |
Right-of-use interests |  |  | (279 | ) |  |  | (765 | )
Results from short-term leases |  |  | (36 | ) |  |  | (57 | )

The average discount rate and the term of liability for lease recognized as of June 30, 2021 are detailed below:

Average discount rate |  | Maturity date
10.61% |  | 2023-2041

14. Financial instruments by category

The following note presents the financial assets and financial liabilities by category and a reconciliation to the corresponding line in the Consolidated Statements of Financial Position, as appropriate. Since the line items “Trade and other receivables” and “Trade and other payables” contain both financial instruments and non-financial assets or liabilities (such as prepayments, trade receivables, trade payables in-kind and tax receivables and payables), the reconciliation is shown in the columns headed “Non-financial assets” and “Non-financial liabilities”. Financial assets and liabilities measured at fair value are assigned based on their different levels in the fair value hierarchy.

IFRS 9 defines the fair value of a financial instrument as the amount for which an asset could be exchanged, or a financial liability settled, between knowledgeable, willing parties in an arm’s length transaction. All financial instruments recognized at fair value are allocated to one of the valuation hierarchy levels of IFRS 7. This valuation hierarchy provides for three levels.

In the case of Level 1, valuation is based on quoted prices (unadjusted) in active markets for identical assets and liabilities that the Company can refer to at the date of valuation. In the case of Level 2, fair value is determined by using valuation methods based on inputs directly or indirectly observable in the market. If the financial instrument concerned has a fixed contract period, the inputs used for valuation must be observable for the whole of this period. In the case of Level 3, the Group uses valuation techniques not based on inputs observable in the market. This is only permissible insofar as no market data is available. The inputs used reflect the Group’s assumptions regarding the factors which market players would consider in their pricing.

The Group’s Finance Division has a team in place in charge of estimating the valuation of financial assets required to be reported in the Consolidated Financial Statements, including the fair value of Level-3 instruments. The team directly reports to the Chief Financial Officer (“CFO”). The CFO and the valuation team discuss the valuation methods and results upon the acquisition of an asset and, as of the end of each reporting period.

According to the Group’s policy, transfers among the several categories of valuation are recognized when occurred, or when there are changes in the prevailing circumstances requiring the transfer.

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Financial assets and financial liabilities as of June 30, 2021 are as follows:

|  | Financial assets at amortized cost |  |  | Financial assets at fair value through profit or loss |  |  | Subtotal financial assets |  |  | Non- financial assets |  |  | Total |
|  |  |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  |  |  |  |  |  |  |  |
June 30, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Assets as per Statements of Financial Position |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trade and other receivables (excluding the allowance for doubtful accounts and other receivables) |  |  | 7,231 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 7,231 |  |  |  | 4,942 |  |  |  | 12,173 |
Investments in financial assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
- Public companies’ securities |  |  | - |  |  |  | 976 |  |  |  | - |  |  |  | - |  |  |  | 976 |  |  |  | - |  |  |  | 976 |
- Bonds |  |  | - |  |  |  | 2,711 |  |  |  | - |  |  |  | - |  |  |  | 2,711 |  |  |  | - |  |  |  | 2,711 |
- Others |  |  | 10 |  |  |  | 639 |  |  |  | - |  |  |  | 48 |  |  |  | 697 |  |  |  | - |  |  |  | 697 |
Cash and cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
- Cash at bank and on hand |  |  | 1,128 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,128 |  |  |  | - |  |  |  | 1,128 |
- Short-term investments |  |  | - |  |  |  | 803 |  |  |  | - |  |  |  | - |  |  |  | 803 |  |  |  | - |  |  |  | 803 |
Total assets |  |  | 8,369 |  |  |  | 5,129 |  |  |  | - |  |  |  | 48 |  |  |  | 13,546 |  |  |  | 4,942 |  |  |  | 18,488 |

|  | Financial liabilities at amortized cost |  |  | Financial liabilities at fair value through profit or loss |  |  | Subtotal financial liabilities |  |  | Non- financial liabilities |  |  | Total |
|  |  |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  |  |  |  |  |  |  |  |
June 30, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Liabilities as per Statements of Financial Position |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trade and other payables |  |  | 2,884 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 2,884 |  |  |  | 3,606 |  |  |  | 6,490 |
Borrowings (excluding finance leases) |  |  | 62,133 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 62,133 |  |  |  | - |  |  |  | 62,133 |
Derivative financial instruments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
- Swaps |  |  | - |  |  |  | - |  |  |  | 57 |  |  |  | - |  |  |  | 57 |  |  |  | - |  |  |  | 57 |
Total liabilities |  |  | 65,017 |  |  |  | - |  |  |  | 57 |  |  |  | - |  |  |  | 65,074 |  |  |  | 3,606 |  |  |  | 68,680 |

Financial assets and financial liabilities as of June 30, 2020 were as follows:

|  | Financial assets at amortized cost |  |  | Financial assets at fair value through profit or loss |  |  | Subtotal financial assets |  |  | Non- financial assets |  |  | Total |
|  |  |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  |  |  |  |  |  |  |  |
June 30, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Assets as per Statements of Financial Position |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trade and other receivables (excluding the allowance for doubtful accounts and other receivables) |  |  | 74,133 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 74,133 |  |  |  | 22,004 |  |  |  | 96,137 |
Investments in financial assets: |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
- Public companies’ securities |  |  | - |  |  |  | 862 |  |  |  | 345 |  |  |  | - |  |  |  | 1,207 |  |  |  | - |  |  |  | 1,207 |
- Private companies’ securities |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 4,369 |  |  |  | 4,369 |  |  |  | - |  |  |  | 4,369 |
- Deposits |  |  | 1,437 |  |  |  | 92 |  |  |  | - |  |  |  | - |  |  |  | 1,529 |  |  |  | - |  |  |  | 1,529 |
- Bonds |  |  | - |  |  |  | 13,868 |  |  |  | 2,169 |  |  |  | - |  |  |  | 16,037 |  |  |  | - |  |  |  | 16,037 |
- Investments in financial assets with quotation |  |  | - |  |  |  | 9,760 |  |  |  | 1,217 |  |  |  | 348 |  |  |  | 11,325 |  |  |  | - |  |  |  | 11,325 |
Derivative financial instruments |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
- Foreign-currency future contracts |  |  | - |  |  |  | - |  |  |  | 194 |  |  |  | - |  |  |  | 194 |  |  |  | - |  |  |  | 194 |
- Others |  |  | 93 |  |  |  | - |  |  |  | 30 |  |  |  | 213 |  |  |  | 336 |  |  |  | - |  |  |  | 336 |
Restricted assets (i) |  |  | 12,136 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 12,136 |  |  |  | - |  |  |  | 12,136 |
Financial assets available for sale: |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
- Clal |  |  | - |  |  |  | 5,072 |  |  |  | - |  |  |  | - |  |  |  | 5,072 |  |  |  | - |  |  |  | 5,072 |
Cash and cash equivalents: |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
- Cash at bank and on hand |  |  | 37,059 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 37,059 |  |  |  | - |  |  |  | 37,059 |
- Short term investments |  |  | 94,064 |  |  |  | 4,596 |  |  |  | - |  |  |  | - |  |  |  | 98,660 |  |  |  | - |  |  |  | 98,660 |
Total assets |  |  | 218,922 |  |  |  | 34,250 |  |  |  | 3,955 |  |  |  | 4,930 |  |  |  | 262,057 |  |  |  | 22,004 |  |  |  | 284,061 |

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|  | Financial liabilities at amortized cost |  |  | Financial liabilities at fair value through profit or loss |  |  | Subtotal financial liabilities |  |  | Non- financial liabilities |  |  | Total |
|  |  |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  |  |  |  |  |  |  |  |
June 30, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Liabilities as per Statements of Financial Position |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trade and other payables |  |  | 37,529 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 37,529 |  |  |  | 10,296 |  |  |  | 47,825 |
Borrowings (excluding finance leases) |  |  | 564,991 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 564,991 |  |  |  | - |  |  |  | 564,991 |
Derivative financial instruments: |  |  | - |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
- Foreign-currency future contracts |  |  | - |  |  |  | - |  |  |  | 207 |  |  |  | - |  |  |  | 207 |  |  |  | - |  |  |  | 207 |
- Others |  |  | - |  |  |  | - |  |  |  | 1,436 |  |  |  | 30 |  |  |  | 1,466 |  |  |  | - |  |  |  | 1,466 |
- Forwards |  |  | - |  |  |  | - |  |  |  | 92 |  |  |  | - |  |  |  | 92 |  |  |  | - |  |  |  | 92 |
Total liabilities |  |  | 602,520 |  |  |  | - |  |  |  | 1,735 |  |  |  | 30 |  |  |  | 604,285 |  |  |  | 10,296 |  |  |  | 614,581 |

(i) | The fair value of financial assets and liabilities at their amortized cost does not differ significantly from their book value, except for borrowings (Note 20).

Liabilities carried at amortized cost also include liabilities under finance leases where the Group is the lessee, and which therefore have to be measured in accordance with IAS 17 “Leases”. The categories disclosed are determined by reference to IFRS 9. Finance leases are excluded from the scope of IFRS 7 “Financial Instruments Disclosures”. Therefore, finance leases have been shown separately.

The following are details of the book value of financial instruments recognized, which were offset in the statements of financial position:

|  | As of June 30, 2021 |  |  | As of June 30, 2020 |
|  | Gross amounts recognized |  |  | Gross amounts offset |  |  | Net amount presented |  |  | Gross amounts recognized |  |  | Gross amounts offset |  |  | Net amount presented |
Financial assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trade and other receivables (excluding the allowance for doubtful accounts and other receivables) |  |  | 9,282 |  |  |  | (2,051 | ) |  |  | 7,231 |  |  |  | 77,448 |  |  |  | (3,315 | ) |  |  | 74,133 |
Financial liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trade and other payables |  |  | 4,935 |  |  |  | (2,051 | ) |  |  | 2,884 |  |  |  | 40,844 |  |  |  | (3,315 | ) |  |  | 37,529 |

Income, expense, gains and losses on financial instruments can be assigned to the following categories:

|  | Financial assets / liabilities at amortized cost |  |  | Financial assets / liabilities at fair value through profit or loss |  |  | Total |
June 30, 2021 |  |  |  |  |  |  |  |  |
Interest income (i) |  |  | 360 |  |  |  | - |  |  |  | 360 |
Interest expense (i) |  |  | (6,409 | ) |  |  | - |  |  |  | (6,409 | )
Interest expense on lease liabilities (i) |  |  | (97 | ) |  |  | - |  |  |  | (97 | )
Foreign exchange gains, net (i) |  |  | 7,020 |  |  |  | - |  |  |  | 7,020 |
Dividend income (i) |  |  | 1 |  |  |  | - |  |  |  | 1 |
Loss from repurchase of negotiable obligations (i) |  |  | (95 | ) |  |  | - |  |  |  | (95 | )
Fair value gain on financial assets at fair value through profit or loss (i) |  |  | - |  |  |  | 5,318 |  |  |  | 5,318 |
Interest generated by operating credits |  |  | 97 |  |  |  | - |  |  |  | 97 |
Gain on derivative financial instruments, net (i) |  |  | - |  |  |  | (452 | ) |  |  | (452 | )
Other finance costs (i) |  |  | (866 | ) |  |  | - |  |  |  | (866 | )
Total financial instruments |  |  | 11 |  |  |  | 4,866 |  |  |  | 4,877 |

|  | Financial assets / liabilities at amortized cost |  |  | Financial assets / liabilities at fair value through profit or loss |  |  | Total |
June 30, 2020 |  |  |  |  |  |  |  |  |
Interest income (i) |  |  | 299 |  |  |  | - |  |  |  | 299 |
Interest expense (i) |  |  | (8,607 | ) |  |  | - |  |  |  | (8,607 | )
Interest expense on lease liabilities (i) |  |  | (81 | ) |  |  | - |  |  |  | (81 | )
Foreign exchange gains, net (i) |  |  | (9,383 | ) |  |  | - |  |  |  | (9,383 | )
Dividend income |  |  | 21 |  |  |  | - |  |  |  | 21 |
Gain from repurchase of negotiable obligations (i) |  |  | 139 |  |  |  | - |  |  |  | 139 |
Fair value gain on financial assets at fair value through profit or loss (i) |  |  | - |  |  |  | 505 |  |  |  | 505 |
Interest generated by operating credits |  |  | 254 |  |  |  | - |  |  |  | 254 |
Gain on derivative financial instruments, net (i) |  |  | - |  |  |  | (549 | ) |  |  | (549 | )
Other finance costs (i) |  |  | (563 | ) |  |  | - |  |  |  | (563 | )
Total financial instruments |  |  | (17,921 | ) |  |  | (44 | ) |  |  | (17,965 | )

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|  | Financial assets / liabilities at amortized cost |  |  | Financial assets / liabilities at fair value through profit or loss |  |  | Total |
June 30, 2019 |  |  |  |  |  |  |  |  |
Interest income (i) |  |  | 260 |  |  |  | - |  |  |  | 260 |
Interest expense (i) |  |  | (6,667 | ) |  |  | - |  |  |  | (6,667 | )
Foreign exchange gains, net (i) |  |  | 1,507 |  |  |  | - |  |  |  | 1,507 |
Dividend income |  |  | 21 |  |  |  | - |  |  |  | 21 |
Fair value gain on financial assets at fair value through profit or loss (i) |  |  | - |  |  |  | 1,026 |  |  |  | 1,026 |
Interest generated by operating credits |  |  | 369 |  |  |  | - |  |  |  | 369 |
Gain on derivative financial instruments, net (i) |  |  | - |  |  |  | 837 |  |  |  | 837 |
Other finance costs (i) |  |  | (520 | ) |  |  | - |  |  |  | (520 | )
Total financial instruments |  |  | (5,030 | ) |  |  | 1,863 |  |  |  | (3,167 | )

(i) | Included within “Financial results, net“ in the Consolidated Statements of Income and Other Comprehensive Income.

The following table presents the changes in Level 3 financial instruments as of June 30, 2021 and 2020:

|  | Derivative financial instruments - Forwards |  |  | Investments in financial assets - Private companies’ securities |  |  | nvestments in financial assets - Others |  |  | Derivative financial instruments |  |  | Total |
Balances at June 30, 2019 |  |  | (104 | ) |  |  | 3,920 |  |  |  | 2,202 |  |  |  | 204 |  |  |  | 6,222 |
Additions and acquisitions |  |  | - |  |  |  | 53 |  |  |  | - |  |  |  | - |  |  |  | 53 |
Transfer between levels |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 527 |  |  |  | 527 |
Currency translation adjustment |  |  | (10 | ) |  |  | 714 |  |  |  | 158 |  |  |  | 368 |  |  |  | 1,230 |
Write off |  |  | - |  |  |  | - |  |  |  | (1,467 | ) |  |  | (916 | ) |  |  | (2,383 | )
Gain / (loss) for the year (i) |  |  | 84 |  |  |  | (318 | ) |  |  | (545 | ) |  |  | 30 |  |  |  | (749 | )
Balances at June 30, 2020 |  |  | (30 | ) |  |  | 4,369 |  |  |  | 348 |  |  |  | 213 |  |  |  | 4,900 |
Currency translation adjustment |  |  | - |  |  |  | - |  |  |  | (4 | ) |  |  | - |  |  |  | (4 | )
Deconsolidation |  |  | 30 |  |  |  | (4,369 | ) |  |  | (305 | ) |  |  | (213 | ) |  |  | (4,857 | )
Gain for the year (i) |  |  | - |  |  |  | - |  |  |  | 9 |  |  |  | - |  |  |  | 9 |
Balances at June 30, 2021 |  |  | - |  |  |  | - |  |  |  | 48 |  |  |  | - |  |  |  | 48 |

(i) | Included within “Financial results, net” in the Consolidated Statements of Income and Other Comprehensive Income.

During the fiscal year ended June 30, 2020, derivative financial instruments were transferred from level 1 to level 3. During the fiscal year ended June 30, 2021, there were no transfers between levels of hierarchy of the fair value. When there are no quoted prices available in an active market, fair values (especially derivative instruments) are based on recognized valuation methods. The Group uses a range of valuation models for the measurement of Level 2 and Level 3 instruments, details of which may be obtained from the following table.

Description |  | Pricing model / method |  | Parameters |  | Fair value hierarchy |  | Range
Promissory note |  | Theoretical price |  | Price of the underlying (Market price) and volatility of the share (historical) and market interest rate (Libor Curve). |  | Level 3 |  | Price of the underlying 3 to 4. Volatility of the share 57% to 77%. Market interest rate 0.75% to 1.25%
Investments in financial assets - Other private companies’ securities (*) |  | Cash flow / NAV - Theoretical price |  | Projected revenue discounted at the discount rate The value is calculated in accordance with shares in the equity funds on the basis of their Financial Statements, based on fair value or investments assessments. |  | Level 3 |  | 1 - 3.5
Derivative financial instruments Forwards |  | Theoretical price |  | Underlying asset price and volatility |  | Level 2 and 3 |  | -

(*) | An increase in the discount rate would decrease the value of investments in private companies, while an increase in projected revenues would increase their value.

As of June 30, 2021, there are no changes in economic or business circumstances that affect the fair value of the Group’s financial assets and liabilities.

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15. Trade and other receivables

Group’s trade and other receivables as of June 30, 2021 and 2020 were as follows:

|  | June 30, 2021 |  |  | June 30, 2020 |
Sale, leases and services receivables |  |  | 4,593 |  |  |  | 57,756 |
Less: Allowance for doubtful accounts |  |  | (851 | ) |  |  | (5,610 | )
Total trade receivables |  |  | 3,742 |  |  |  | 52,146 |
Prepaid expenses |  |  | 805 |  |  |  | 20,271 |
Borrowings, deposits and others |  |  | 3,669 |  |  |  | 15,064 |
Advances to suppliers |  |  | 950 |  |  |  | 1,516 |
Tax receivables |  |  | 1,166 |  |  |  | 1,208 |
Others |  |  | 990 |  |  |  | 322 |
Total other receivables |  |  | 7,580 |  |  |  | 38,381 |
Total trade and other receivables |  |  | 11,322 |  |  |  | 90,527 |
Non-current |  |  | 2,847 |  |  |  | 34,738 |
Current |  |  | 8,475 |  |  |  | 55,789 |
Total |  |  | 11,322 |  |  |  | 90,527 |

Book amounts of Group’s trade and other receivables in foreign currencies are detailed in Note 31.

The fair value of current receivables approximates their respective carrying amounts because, due to their short-term nature, the effect of discounting is not considered significant.

Trade accounts receivables are generally presented in the Statements of Financial Position net of allowances for doubtful accounts. Impairment policies and procedures by type of receivables are discussed in detail in Note 2. Movements on the Group’s allowance for doubtful accounts were as follows:

|  | June 30, 2021 |  |  | June 30, 2020 |
Beginning of the year |  |  | 5,610 |  |  |  | 3,985 |
Additions (i) |  |  | 755 |  |  |  | 1,544 |
Recovery (i) |  |  | (229 | ) |  |  | (164 | )
Currency translation adjustment |  |  | (276 | ) |  |  | 1,597 |
Deconsolidation |  |  | (4,643 | ) |  |  | (30 | )
Receivables written off during the year as uncollectable |  |  | (28 | ) |  |  | (1,077 | )
Transfer to assets held for sale |  |  | - |  |  |  | (30 | )
Incorporation by business combination |  |  | - |  |  |  | 27 |
Inflation adjustment |  |  | (338 | ) |  |  | (242 | )
End of the year |  |  | 851 |  |  |  | 5,610 |

(i) | The creation and release of the provision for impaired receivables have been included in “Selling expenses” in the Consolidated Statements of Income and Other Comprehensive Income (Note 24).

The Group’s trade receivables comprise several classes. The maximum exposure to credit risk at the reporting date is the carrying amount of each class of receivables (see Note 5). The Group also has receivables from related parties neither of them is due nor impaired.

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Due to the distinct characteristics of each type of receivables, an aging analysis of past due unimpaired and impaired receivables is shown by type and class, as of June 30, 2021 and 2020 (a column of non-past due receivables is also included so that the totals can be reconciled with the amounts appearing on the Statement of Financial Position):

|  | Past due |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Additions / (reversals) for |
|  | Up to 3 months |  |  | From 3 to 6 months |  |  | Over 6 months |  |  | Non-past due |  |  | Impaired |  |  | Total |  |  | % of representation |  |  | doubtful accounts |
Leases and services |  |  | 338 |  |  |  | 247 |  |  |  | 657 |  |  |  | 2,313 |  |  |  | 835 |  |  |  | 4,390 |  |  |  | 95.58 | % |  |  | (194 | )
Consumer financing |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 16 |  |  |  | 16 |  |  |  | 0.35 | % |  |  | - |
Sale of properties and developments |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 187 |  |  |  | - |  |  |  | 187 |  |  |  | 4.07 | % |  |  | - |
Total as of June 30, 2021 |  |  | 338 |  |  |  | 247 |  |  |  | 657 |  |  |  | 2,500 |  |  |  | 851 |  |  |  | 4,593 |  |  |  | 100.00 | % |  |  | (194 | )
Leases and services |  |  | 584 |  |  |  | 84 |  |  |  | 131 |  |  |  | 3,482 |  |  |  | 1,044 |  |  |  | 5,325 |  |  |  | 9.22 | % |  |  | (128 | )
Consumer financing |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 24 |  |  |  | 24 |  |  |  | 0.04 | % |  |  | 14 |
Sale of properties and developments |  |  | 284 |  |  |  | 8 |  |  |  | 8 |  |  |  | 1,068 |  |  |  | 2 |  |  |  | 1,370 |  |  |  | 2.37 | % |  |  | - |
Sale of communication equipment |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 20,538 |  |  |  | 703 |  |  |  | 21,241 |  |  |  | 36.78 | % |  |  | - |
Agricultural products |  |  | 2,352 |  |  |  | 397 |  |  |  | 183 |  |  |  | 1,741 |  |  |  | 30 |  |  |  | 4,703 |  |  |  | 8.14 | % |  |  | - |
Telecommunication services |  |  | 2,230 |  |  |  | - |  |  |  | 671 |  |  |  | 18,385 |  |  |  | 3,807 |  |  |  | 25,093 |  |  |  | 43.45 | % |  |  | (589 | )
Total as of June 30, 2020 |  |  | 5,450 |  |  |  | 489 |  |  |  | 993 |  |  |  | 45,214 |  |  |  | 5,610 |  |  |  | 57,756 |  |  |  | 100.00 | % |  |  | (703 | )

16. Cash flow information

Following is a detailed description of cash flows generated by the Group’s operations for the years ended June 30, 2021, 2020 and 2019:

|  |  | Note |  |  | 06.30.2021 |  |  | 06.30.2020 |  |  | 06.30.2019 |
(Loss) / profit for the year |  |  |  |  |  | (37,591 | ) |  |  | 35,651 |  |  |  | (57,634 | )
Loss for the year from discontinued operations |  |  |  |  |  | 8,923 |  |  |  | 4,947 |  |  |  | 2,380 |
Adjustments for: |  |  |  |  |  |  |  |  |  |  |  |  |  | - |
Income tax |  |  | 18 |  |  |  | 21,673 |  |  |  | 10,065 |  |  |  | (6,760 | )
Amortization and depreciation |  |  | 20 |  |  |  | 642 |  |  |  | 716 |  |  |  | 560 |
Net gain / (loss) from fair value adjustment of investment properties |  |  |  |  |  |  | 7,770 |  |  |  | (50,664 | ) |  |  | 58,231 |
Share-based compensation |  |  |  |  |  |  | - |  |  |  | - |  |  |  | 94 |
Impairment of goodwill |  |  |  |  |  |  | - |  |  |  | - |  |  |  | 277 |
Impairment of properties for sale |  |  |  |  |  |  | - |  |  |  | - |  |  |  | 69 |
Gain from disposal of associates |  |  |  |  |  |  | (37 | ) |  |  | - |  |  |  | 225 |
Financial results, net |  |  |  |  |  |  | (6,609 | ) |  |  | 19,737 |  |  |  | 2,888 |
Provisions and allowances |  |  |  |  |  |  | 281 |  |  |  | 1,251 |  |  |  | 1,369 |
Share of (profit) /loss of associates and joint ventures |  |  | 7 |  |  |  | 4,380 |  |  |  | (10,847 | ) |  |  | 10,587 |
Changes in operating assets and liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  | - |
Decrease in inventories |  |  |  |  |  |  | 26 |  |  |  | 6 |  |  |  | 34 |
Increase in trading properties |  |  |  |  |  |  | (28 | ) |  |  | (592 | ) |  |  | (1,308 | )
Increase in restricted assets |  |  |  |  |  |  | - |  |  |  | (1,750 | ) |  |  | - |
Decrease / (Increase) in trade and other receivables |  |  |  |  |  |  | 1,514 |  |  |  | 2,854 |  |  |  | (69 | )
Decrease in trade and other payables |  |  |  |  |  |  | (2,543 | ) |  |  | (458 | ) |  |  | (1,820 | )
Increase / (decrease) in salaries and social security liabilities |  |  |  |  |  |  | 53 |  |  |  | (290 | ) |  |  | (195 | )
Decrease in provisions |  |  |  |  |  |  | (108 | ) |  |  | (798 | ) |  |  | (118 | )
Net cash (used in) / generated by continuing operating activities before income tax paid |  |  |  |  |  |  | (1,654 | ) |  |  | 9,828 |  |  |  | 8,810 |
Net cash generated by discontinued operating activities before income tax paid |  |  |  |  |  |  | 3,401 |  |  |  | 37,880 |  |  |  | 33,916 |
Net cash generated by operating activities before income tax paid |  |  |  |  |  |  | 1,747 |  |  |  | 47,708 |  |  |  | 42,726 |

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The following table shows balances incorporated as result of business combination / deconsolidation or reclassification of assets and liabilities held for sale of subsidiaries:

|  | June 30, 2021 |  |  | June 30, 2020 |  |  | June 30, 2019 |
Investment properties |  |  | 117,547 |  |  |  | 233,714 |  |  |  | (14,634 | )
Property, plant and equipment |  |  | 47,989 |  |  |  | (7,581 | ) |  |  | (96,187 | )
Trading properties |  |  | 7,690 |  |  |  | 233 |  |  |  | - |
Intangible assets |  |  | 36,546 |  |  |  | 4,842 |  |  |  | (20,666 | )
Investments in associates and joint ventures |  |  | 48,443 |  |  |  | 3,781 |  |  |  | (1,220 | )
Deferred income tax assets |  |  | 568 |  |  |  | - |  |  |  | - |
Restricted assets |  |  | 8,400 |  |  |  | 321 |  |  |  | (305 | )
Income tax and MPIT credit |  |  | 426 |  |  |  | 66 |  |  |  | - |
Trade and other receivables |  |  | 70,693 |  |  |  | (13,598 | ) |  |  | (39,759 | )
Right-of-use assets |  |  | 25,853 |  |  |  | (5,973 | ) |  |  | - |
Investments in financial assets |  |  | 31,643 |  |  |  | 20,343 |  |  |  | (9,506 | )
Derivative financial instruments |  |  | 368 |  |  |  | (56 | ) |  |  | (77 | )
Inventories |  |  | 4,712 |  |  |  | (3,760 | ) |  |  | (19,691 | )
Group of assets held for sale |  |  | 55,028 |  |  |  | - |  |  |  | - |
Borrowings |  |  | (425,321 | ) |  |  | (132,296 | ) |  |  | 70,300 |
Lease liabilities |  |  | (23,696 | ) |  |  | - |  |  |  | - |
Deferred income tax liabilities |  |  | (16,261 | ) |  |  | (30,349 | ) |  |  | 9,338 |
Trade and other payables |  |  | (30,751 | ) |  |  | 3,474 |  |  |  | 76,590 |
Lease liabilities |  |  | - |  |  |  | 3,120 |  |  |  | - |
Provisions |  |  | (7,095 | ) |  |  | 86 |  |  |  | 1,442 |
Employee benefits |  |  | (624 | ) |  |  | 161 |  |  |  | 4,188 |
Derivative financial instruments |  |  | (624 | ) |  |  | - |  |  |  | - |
Salaries and social security liabilities |  |  | (4,427 | ) |  |  | 207 |  |  |  | 7,979 |
Salaries and social security liabilities |  |  | (28,805 | ) |  |  | - |  |  |  | - |
Income tax expense |  |  | (596 | ) |  |  | (161 | ) |  |  | 24 |
Net value of incorporated assets that do not affect cash |  |  | (82,294 | ) |  |  | 76,574 |  |  |  | (32,184 | )
Cash and cash equivalents |  |  | (145,330 | ) |  |  | (9,017 | ) |  |  | (18,550 | )
Non-controlling interest |  |  | (62,519 | ) |  |  | 76,219 |  |  |  | 24,477 |
Goodwill |  |  | - |  |  |  | (565 | ) |  |  | 246 |
Net value of assets incorporated / intended for sale |  |  | (290,143 | ) |  |  | 143,211 |  |  |  | (26,011 | )
Seller Financed Amount |  |  | - |  |  |  | - |  |  |  | (126 | )
Net (outflow) inflow of cash and cash equivalents / assets and liabilities held for sale |  |  | (290,143 | ) |  |  | 143,211 |  |  |  | (26,137 | )

The following table shows a detail of significant non-cash transactions occurred in the years ended June 30, 2021, 2020 and 2019:

|  | 06.30.2021 |  |  | 06.30.2020 |  |  | 06.30.2019 |
Decrease of associates and joint ventures through a decrease of shareholders’ equity |  |  | - |  |  |  | 3,111 |  |  |  | - |
Increase of investment properties through a decrease of financial assets |  |  | - |  |  |  | 418 |  |  |  | - |
Increase of properties for sale through an increase in borrowings |  |  | 61 |  |  |  | 18 |  |  |  | 26 |
Increase of property, plant and equipment through an increase of trade and other payables |  |  | - |  |  |  | 1,110 |  |  |  | 1,282 |
Increase of intangible assets through an increase of trade and other payables |  |  | - |  |  |  | 742 |  |  |  | 496 |
Distribution of dividends in shares |  |  | 727 |  |  |  | 885 |  |  |  | 3,922 |
Increase in property, plant and equipment through increased borrowings |  |  | - |  |  |  | - |  |  |  | 9 |
Registration of investment properties through a decrease in credits for trade and other receivables |  |  | - |  |  |  | 42 |  |  |  | 863 |
Issuance of NCN |  |  | - |  |  |  | 32 |  |  |  | 5,038 |
Decrease of property, plant and equipment through an increase of receivables and tax debts |  |  | 83 |  |  |  | - |  |  |  | - |
Distribution of dividends to non-controlling interest pending payment |  |  | - |  |  |  | 2,645 |  |  |  | (511 | )
Decrease of in investments in associates and joint ventures through a decrease in borrowings |  |  | - |  |  |  | - |  |  |  | 13 |
Decrease in borrowings through a decrease in financial assets |  |  | - |  |  |  | 3,686 |  |  |  | - |
Increase in investment properties through an increase in trade and other payables |  |  | - |  |  |  | 1,068 |  |  |  | 1,058 |
Increase of investment properties through an increase of borrowings |  |  | 407 |  |  |  | 151 |  |  |  | 330 |
Increase in rights of use through an increase in lease liabilities - Adjustment of opening balances (IFRS 16) |  |  | - |  |  |  | 21,214 |  |  |  | - |
Increase in rights of use through an increase in lease liabilities |  |  | - |  |  |  | 12,153 |  |  |  | - |
Increase of rights of use through a decrease of property, plant and equipment |  |  | 817 |  |  |  | - |  |  |  | - |

17. Shareholders’ Equity

Share capital and share premium

The share capital of the Group is represented by common shares with a nominal value of ARS 1 per share and one vote each. No other activity has been recorded for the fiscal years ended June 30, 2021, 2020 and 2019 in the capital accounts, other than those related to the acquisition of treasury shares.

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Inflation adjustment of share capital and treasury shares

The inflation adjustment related to share capital is allocated to an inflation adjustment reserve that forms part of shareholders’ equity. The balance of this reserve could be applied only towards the issuance of common stock to shareholders of the Company.

Warrants

Common stock purchase options (warrants), issued by IRSA with common shares during the fiscal year and treated as equity instruments, are recorded as a separate component of the equity and are measured at cost; represented by fair value on the issue date using the Black-Scholes pricing model, which incorporates certain inputs assumptions, including shares price and volatility, risk-free interest rate, and warrant maturity.

At the time of the exercise of the warrants by the holders, the warrants are transferred to share capital for the nominal value of the issued shares and the difference with the product is recognized in the share premium.

Legal reserve

According to Law N° 19,550, 5% of the profit of the year is destined to the constitution of a legal reserve until it reaches the legal capped amount (20% of total capital). This legal reserve is not available for dividend distribution and can only be released to absorb losses. The Group reached the legal limit of this reserve.

Special reserve

The CNV, through General Ruling N° 562/9 and 576/10, has provided for the application of Technical Resolutions N° 26 and 29 of the FACPCE, which adopt the IFRS, as issued by the IASB, for companies subject to the public offering regime ruled by Law 17,811, due to the listing of their shares or corporate notes, and for entities that have applied for authorization to be listed under the mentioned regime. The Group has applied IFRS, as issued by the IASB, for the first time in the year beginning July 1st, 2012, being its transition date July 1st, 2011. Pursuant to CNV General Ruling N° 609/12, the Company set up a special reserve reflecting the positive difference between the balance of retained earnings disclosed in the first Financial Statements prepared according to IFRS and the balance of retained earnings disclosed in the last Financial Statements prepared in accordance with previously effective accounting standards. The reserve recorded amounted to ARS 425, which as of June 30, 2017 were fully used to absorb the negative balances in the retained earnings account. During fiscal year ended June 30, 2017, the Company’s Board of Directors decided to change the accounting policy of investment property from the cost method to the fair value method, as allowed by IAS 40. For this reason, as of the transition date, figures have been modified and, hence, the special reserve as set forth by General Ruling CNV N° 609/12 has been increased to ARS 10,121, which may only be reversed to be capitalized or to absorb potential negative balances under retained earnings.

Additional paid-in capital from treasury shares

Upon sale of treasury shares, the difference between the net realizable value of the treasury shares sold and the acquisition cost will be recognized, whether it is a gain or a loss, under the non-capitalized contribution account and will be known as “Treasury shares trading premium”.

Dividends

See note 4 to these financial statements on distribution of dividend(s) in kind.

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18. Trade and other payables

Group’s trade and other payables as of June 30, 2021 and 2020 were as follows:

|  | June 30, 2021 |  |  | June 30, 2020 |
Trade payables |  |  | 1,029 |  |  |  | 28,114 |
Advances from sales, leases and services |  |  | 3,013 |  |  |  | 3,976 |
Construction obligations |  |  | - |  |  |  | 611 |
Accrued invoices |  |  | 859 |  |  |  | 659 |
Deferred income |  |  | - |  |  |  | 213 |
Total trade payables |  |  | 4,901 |  |  |  | 33,573 |
Dividends payable to non-controlling interest |  |  | - |  |  |  | 336 |
Taxes payable |  |  | 683 |  |  |  | 239 |
Other payables |  |  | 906 |  |  |  | 13,677 |
Total other payables |  |  | 1,589 |  |  |  | 14,252 |
Total trade and other payables |  |  | 6,490 |  |  |  | 47,825 |
Non-current |  |  | 1,387 |  |  |  | 3,258 |
Current |  |  | 5,103 |  |  |  | 44,567 |
Total |  |  | 6,490 |  |  |  | 47,825 |

The fair value of payables approximates their respective carrying amounts because, due to their short-term nature, the effect of discounting is not considered significant. Fair values are based on discounted cash flows (Level 3).

19. Provisions

The Group is subject to claims, lawsuits and other legal proceedings in the ordinary course of business, including claims from clients where a third party seeks reimbursement or damages. The Group’s responsibility under such claims, lawsuits and legal proceedings cannot be estimated with certainty. From time to time, the status of each major issue is evaluated and its potential financial exposure is assessed. If the potential loss involved in the claim or proceeding is deemed probable and the amount may be reasonably estimated, a liability is recorded. The Group estimates the amount of such liability based on the available information and in accordance with the provisions of the IFRS. If additional information becomes available, the Group will make an evaluation of claims, lawsuits and other outstanding proceeding, and will revise its estimates.

The following table shows the movements in the Group’s provisions categorized by type:

|  | Legal claims (i) |  |  | Investments in associates and joint ventures (ii) |  |  | Site dismantling and remediation |  |  | Other provisions |  |  | Total |
As of 06.30.19 |  |  | 3,587 |  |  |  | 13,006 |  |  |  | 514 |  |  |  | 3,794 |  |  |  | 20,901 |
Additions (i) |  |  | 665 |  |  |  | - |  |  |  | 50 |  |  |  | - |  |  |  | 715 |
Share of los of associates |  |  | - |  |  |  | (11,206 | ) |  |  | - |  |  |  | - |  |  |  | (11,206 | )
Incorporated by business combination |  |  | 84 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 84 |
Recovery (i) |  |  | (65 | ) |  |  | (1,516 | ) |  |  | - |  |  |  | - |  |  |  | (1,581 | )
Used during the year |  |  | (978 | ) |  |  | - |  |  |  | - |  |  |  | (272 | ) |  |  | (1,250 | )
Inflation adjustment |  |  | (102 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (102 | )
Currency translation adjustment |  |  | 556 |  |  |  | (258 | ) |  |  | 108 |  |  |  | 299 |  |  |  | 705 |
As of 06.30.20 |  |  | 3,747 |  |  |  | 26 |  |  |  | 672 |  |  |  | 3,821 |  |  |  | 8,266 |
Additions (i) |  |  | 92 |  |  |  | - |  |  |  | 28 |  |  |  | (111 | ) |  |  | 9 |
Deconsolidation |  |  | (3,093 | ) |  |  | - |  |  |  | (653 | ) |  |  | (3,349 | ) |  |  | (7,095 | )
Recovery (i) |  |  | (33 | ) |  |  | (19 | ) |  |  | - |  |  |  | - |  |  |  | (52 | )
Used during the year |  |  | (101 | ) |  |  | - |  |  |  | - |  |  |  | (28 | ) |  |  | (129 | )
Inflation adjustment |  |  | (114 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (114 | )
Currency translation adjustment |  |  | (244 | ) |  |  | - |  |  |  | (47 | ) |  |  | (333 | ) |  |  | (624 | )
As of 06.30.21 |  |  | 254 |  |  |  | 7 |  |  |  | - |  |  |  | - |  |  |  | 261 |

|  | June 30, 2021 |  |  | June 30, 2020 |
Non-Current |  |  | 114 |  |  |  | 4,601 |
Current |  |  | 147 |  |  |  | 3,665 |
Total |  |  | 261 |  |  |  | 8,266 |

| (i) | Additions and recoveries are included in “Other operating results, net”.
| (ii) | Corresponds to the equity interest in Puerto Retiro in 2021 and 2020. Additions and recoveries are included in “Share of profit / (loss) of associates and joint ventures”.

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20. Borrowings

The breakdown and the fair value of the Group borrowings as of June 30, 2021 and 2020 was as follows:

|  | Total as of June 30, 2021 |  |  | Total as of June 30, 2020 (ii) |  |  | Fair value as of June 30, 2021 |  |  | Fair value as of June 30, 2020 |
NCN |  |  | 51,884 |  |  |  | 474,404 |  |  |  | 48,778 |  |  |  | 378,531 |
Bank loans |  |  | 3,116 |  |  |  | 84,521 |  |  |  | 3,129 |  |  |  | 68,084 |
Bank overdrafts |  |  | 5,284 |  |  |  | 3,647 |  |  |  | 5,280 |  |  |  | 3,647 |
Other borrowings (i) |  |  | 1,383 |  |  |  | 1,980 |  |  |  | 1,383 |  |  |  | 2,420 |
AABE Debt |  |  | 258 |  |  |  | 273 |  |  |  | 258 |  |  |  | 273 |
Loans with non-controlling interests |  |  | 208 |  |  |  | 166 |  |  |  | 208 |  |  |  | 166 |
Total borrowings |  |  | 62,133 |  |  |  | 564,991 |  |  |  | 59,036 |  |  |  | 453,121 |
Non-current |  |  | 46,724 |  |  |  | 447,323 |  |  |  |  |  |  |  |  |
Current |  |  | 15,409 |  |  |  | 117,668 |  |  |  |  |  |  |  |  |
Total |  |  | 62,133 |  |  |  | 564,991 |  |  |  |  |  |  |  |  |

| (i) | Includes financial leases for ARS 2 as of June 30, 2020.
| (ii) | Includes ARS 468,134 as of June 30, 2020 corresponding to the Operations Center in Israel.

As of June 30, 2021 and 2020, total borrowings include collateralized liabilities (seller financing, leases and bank loans) of ARS 713 and ARS 12,497, respectively. These borrowings are mainly collateralized by investment properties and property, plant and equipment of the Group (Notes 9 and 10).

Borrowings also include liabilities under finance leases where the Group is the lessee and which therefore were measured in accordance with IAS 17 “Leases”. Information regarding liabilities under finance leases is disclosed in Note 22.

The terms of the loans include standard covenants for this type of financial operations. As of the date of these financial statements, the Group has complied with the covenants contemplated in its respective loan agreements.

The maturity of the Group’s borrowings (excluding obligations under finance leases) is as follows:

|  | June 30, 2021 |  |  | June 30, 2020 |
Share capital |  |  |  |  |  |
Less than 1 year |  |  | 14,169 |  |  |  | 116,503 |
Between 1 and 2 years |  |  | 40,579 |  |  |  | 64,461 |
Between 2 and 3 years |  |  | 5,682 |  |  |  | 164,789 |
Between 3 and 4 years |  |  | 166 |  |  |  | 53,531 |
Between 4 and 5 years |  |  | 59 |  |  |  | 48,428 |
Later than 5 years |  |  | 86 |  |  |  | 115,972 |
|  |  | 60,741 |  |  |  | 563,684 |
Interest |  |  |  |  |  |  |  |
Less than 1 year |  |  | 1,240 |  |  |  | 1,165 |
Between 1 and 2 years |  |  | 54 |  |  |  | - |
Between 2 and 3 years |  |  | 13 |  |  |  | 71 |
Between 3 and 4 years |  |  | 45 |  |  |  | - |
Between 4 and 5 years |  |  | 6 |  |  |  | 38 |
Later than 5 years |  |  | 34 |  |  |  | 31 |
|  |  | 1,392 |  |  |  | 1,305 |
Leases |  |  | - |  |  |  | 2 |
|  |  | 62,133 |  |  |  | 564,991 |

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The following table shows a breakdown of Group’s borrowing by type of fixed-rate and floating-rate, per currency denomination and per functional currency of the subsidiary that holds the loans for the fiscal years ended June 30, 2021 and 2020.

|  | June 30, 2021 |
Rate per currency |  | Argentine Peso |  |  | US dollar |  |  | Total |
Fixed rate: |  |  |  |  |  |  |  |  |
Argentine Peso |  |  | 10,126 |  |  |  | - |  |  |  | 10,126 |
US Dollar |  |  | - |  |  |  | 49,745 |  |  |  | 49,745 |
Subtotal fixed-rate borrowings |  |  | 10,126 |  |  |  | 49,745 |  |  |  | 59,871 |
Floating rate: |  |  |  |  |  |  |  |  |  |  |  |
Argentine Peso |  |  | 271 |  |  |  | - |  |  |  | 271 |
US Dollar |  |  | - |  |  |  | 1,991 |  |  |  | 1,991 |
Subtotal floating-rate borrowings |  |  | 271 |  |  |  | 1,991 |  |  |  | 2,262 |
Total borrowings as per analysis |  |  | 10,397 |  |  |  | 51,736 |  |  |  | 62,133 |
Total borrowings as per Statement of Financial Position |  |  | 10,397 |  |  |  | 51,736 |  |  |  | 62,133 |

|  | June 30, 2020 |
Rate per currency |  | Argentine Peso |  |  | US dollar |  |  | Uruguayan Peso |  |  | New Israel Shekel |  |  | Total |
Fixed rate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Argentine Peso |  |  | 3,648 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 3,648 |
New Israel Shekel |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 265,277 |  |  |  | 265,277 |
US Dollar |  |  | 87,565 |  |  |  | 219 |  |  |  | 777 |  |  |  | 391 |  |  |  | 88,952 |
Subtotal fixed-rate borrowings |  |  | 91,213 |  |  |  | 219 |  |  |  | 777 |  |  |  | 265,668 |  |  |  | 357,877 |
Floating rate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Argentine Peso |  |  | 1,340 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,340 |
New Israel Shekel |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 202,466 |  |  |  | 202,466 |
US Dollar |  |  | 3,306 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 3,306 |
Subtotal floating-rate borrowings |  |  | 4,646 |  |  |  | - |  |  |  | - |  |  |  | 202,466 |  |  |  | 207,112 |
Total borrowings as per analysis |  |  | 95,859 |  |  |  | 219 |  |  |  | 777 |  |  |  | 468,134 |  |  |  | 564,989 |
Finance leases obligations |  |  | 2 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 2 |
Total borrowings as per Statement of Financial Position |  |  | 95,861 |  |  |  | 219 |  |  |  | 777 |  |  |  | 468,134 |  |  |  | 564,991 |

The following describes the debt issuances made by the Group for the years ended June 30, 2021 and 2020:

Entity | Class | Issuance / expansion date | Amount in original currency | Maturity date |  | Principal payment | Interest payment |
Interest rate
IRSA | Clase I tramo2 | aug-19 | USD 85 | 11/15/2028 | 10.00% n.a. | At expiration | quarterly | (1)
IRSA | Clase II | aug-19 | CLP 31,503 | 8/6/2020 | 10.50% n.a. | At expiration | quarterly |
IRSA | Clase II | may-20 | ARS 354 | 2/19/2021 | Badlar,+ 0.6%n.a. | At expiration | quarterly | (1)
IRSA | Case IV | may-20 | USD 51 | 5/19/2021 | 7.00% n.a. | At expiration | quarterly |
IRSA | Clase V | may-20 | USD 9 | 5/19/2021 | 9.00% n.a. | At expiration | quarterly |
IRSA | Clase I | nov-20 | USD 3 | 3/1/2023 | 10.00% n.a. | At expiration | quarterly |
IRSA | Clase VII | jul-20 | USD 34 | 1/21/2023 | 4.00% n.a. | At expiration | quarterly |
8/6/2020 | At expiration | quarterly |
IRSA | Clase VIII | nov-20 | USD 32 | 11/12/2023 | 10,00% n.a. | 33% at Nov-21, 33% at Nov-22, 33% at Nov-23 | quarterly |
IRSA | Clase VI | jul-20 | ARS 335 | 7/21/2021 | Badlar + 4.00% n.a. | 30% at April-21, 70% at expiration | quarterly |
IRSA | Clase IX | nov-20 | USD 81 | 3/1/2023 | 10.00% n.a. | At expiration | quarterly |
IRSA | Clase X | nov-20 | ARS 701 | 3/31/2022 | Badlar + 5.00% n.a. | At expiration | quarterly |
IRSA | Clase XI | mar-21 | USD 16 | 3/1/2024 | 5.00% n.a. | At expiration | biannual |
IRSA | Clase XII | mar-21 | UVAs 54 | 3/31/2024 | 4.00% n.a. | At expiration | biannual |

(1) | Corresponds to an expansion of the series.

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The following table shows a detail of evolution of borrowing during the years ended June 30, 2021 and 2020:

|  | June 30, 2021 |  |  | June 30, 2020 |
Balance at the beginning of the year |  |  | 564,991 |  |  |  | 670,906 |
Borrowings |  |  | 26,295 |  |  |  | 46,066 |
Payment of borrowings |  |  | (58,750 | ) |  |  | (102,629 | )
Collection / (Payment) of short term loans, net |  |  | 4,028 |  |  |  | 3,779 |
Interests paid |  |  | (14,352 | ) |  |  | (28,769 | )
Deconsolidation (see Note 4) |  |  | (425,321 | ) |  |  | (143,355 | )
Accrued interests |  |  | 11,870 |  |  |  | 30,731 |
Cumulative translation adjustment and exchange differences, net |  |  | (43,904 | ) |  |  | 89,760 |
Inflation adjustment |  |  | (2,724 | ) |  |  | (1,498 | )
Balance at the end of the year |  |  | 62,133 |  |  |  | 564,991 |

Issuance of IRSA Non-convertible Notes

On July 21, 2020, subsequently to the closing of the fiscal year, the Company issued USD 38.4 Non-convertible Notes in the local market through the following instruments:

| • | ARS 335.2 (equivalent to USD 4.7) Series VI NCNs denominated and payable in Argentine pesos at a variable rate (Private Badlar) + 4.0%, with interest accruing on a quarterly basis. The principal amount is repayable in two installments: the first one -equal to 30% of the par value of the notes- payable on the date that is 9 (nine) months after the Issue and Settlement Date and the second installment -equal to 70% of the par value of the notes- payable on the relevant due date, i.e. July 21, 2021. Notes were issued at 100% of their par value.
| • | US$ 33.7 Series VII NCNs denominated in US$ and payable in Argentine pesos at the applicable exchange rate, at a fixed 4.0% rate, with interest accruing on a quarterly basis. Repayment of capital is due on January 21, 2021. Notes were issued at 100% of their par value. The proceeds were used to refinance short-term indebtedness. On January 21, 2021, the commitments of this note were cancelled.

On March 31, 2020, the Company issued USD 65.5 Non-convertible Notes in the local market. The main characteristics of the issue are detailed below:

| · | Series X: denominated and payable in pesos for ARS 701.6 (equivalent at the time of issuance to USD 7.6) at a variable rate (private BADLAR + 5.0%) with quarterly payments. The principal will be paid on the due date, March 31, 2022. Price of issuance was 100.0% of the nominal value.
| · | Series XI: denominated in USD and payable in ARS at the applicable exchange rate for USD 15.8 at a fixed rate of 5.0%, with semiannual payments plus, if applicable, the Premium Factor in the first year (as defined in the corresponding Prospectus Supplement) and principal expiring on March 31, 2024. Price of issuance was 98.39% of the nominal value (IRR 5.6%).
| · | Series XII: denominated in UVA and payable in ARS at the applicable UVA value for UVA 53.8 (equivalent at the time of issuance to ARS 3,868.2 and USD 42.1) at a fixed rate of 4.0%, with semiannual payments and principal expiring on March 31, 2024. Price of issuance was 100.0% of the nominal value.

The funds have been used to refinance short-term liabilities and working capital.

Payment of non-convertible notes

On July 20, 2020, the Company paid the twentieth interest installment and the principal installment of the US$ 75 Series II Non-convertible Notes issued on July 20, 2010.

On August 6, 2020, the Company paid the second interest installment and the principal installment of the US$ 47 Series II Non-convertible Notes issued on August 6, 2019.

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Payment of IRSA CP’s Series IV Non-convertible Notes

On September 14, 2020, the aggregate principal amount of the Series IV Non-convertible Notes in the amount of ARS 10,381 (US$ 140) and interest accrued as of such date in the amount of ARS 134 (US$ 1.8) were paid.

Exchange of debentures

On November 12, 2020, the company carried out an exchange operation of its Series I Notes, for a nominal value of USD 181.5, according to communication “A” 7106 of the BCRA.

Nominal Value of Existing Notes presented and accepted for the Exchange (for both Series): approximately USD 178.5 which represents 98.31% acceptance, through the participation of 6,571 orders.

| · | Series VIII: Face Value of Existing Notes presented and accepted for the Exchange: approximately USD 104.3.

| - | Nominal Value to be Issued: approximately USD 31.7.
| - | Issuance Price: 100% nominal value.
| - | Maturity Date: It will be November 12, 2023.
| - | Consideration of the Exchange Offer: eligible holders whose existing notes have been accepted for the Exchange by the Company, will receive for every USD 1 submitted to the Exchange, the accrued interest of the existing notes until the settlement and issue date and the following:

| · | A sum of money of approximately USD 72,6 for repayment of capital of such existing notes presented to the Exchange, in cash, in United States Dollars, which will be equivalent to USD 0.69622593 for each USD 1 of existing notes presented to the Exchange; and
| · | The remaining amount until completing 1 USD for each 1 USD of existing notes presented to the Exchange, in notes Series VIII.

| - | Annual Nominal Fixed Interest Rate: 10.00%.
| - | Amortization: The capital of the Series VIII Notes will be amortized in 3 annual installments (33% of the capital on November 12, 2021, 33% of the capital on November 12, 2022, 34% of the capital on the maturity date of Series VIII).
| - | Interest Payment Dates: Interest will be paid quarterly for the expired period as of the issue and settlement date.
| - | Payment Address: Payment will be made to an account at Argentine Securities Commission in the Autonomous City of Buenos Aires

| · | Series IX: Face Value of Existing Notes presented and accepted for the Exchange: approximately USD 74.2.

| - | Nominal Value to be Issued (together with the Face Value to be issued as a result of the cash subscription): approximately USD 80.7 .
| - | Issuance Price: 100% nominal value.
| - | Maturity Date: It will be March 1, 2023.
| - | Consideration of the Exchange Offer: the eligible holders whose existing notes have been accepted for the Exchange by the Company, will receive Series IX Notes for 100% of the capital amount presented for exchange and accepted by the Company and the accrued interest of the existing notes until the settlement and issue date.
| - | Early Bird: will consist of the payment of USD 0.02 for each USD 1 of existing notes delivered and accepted in the Exchange on or before the deadline date to Access the Early Bird. Said consideration will be paid in Pesos on the issue and settlement date according to the exchange rate published by Communication “A” 3500 of the Central Bank of Argentina on the business day prior to the expiration date of the Exchange, which is ARS 79.3433 for each USD 1 of Existing Notes delivered and accepted in the Exchange.
| - | Annual Nominal Fixed Interest Rate: 10.00%.
| - | Amortization: The capital of the Series IX Notes will be amortized in one installment on the maturity date.
| - | Interest Payment Dates: Interest will be paid quarterly for the expired period from the issuance and settlement date.
| - | Payment Address: Payment will be made to an account at Argentine Securities Commission in New York, United States, for which purpose the Company will make US dollars available to an account reported by the Argentine Securities Commission in said jurisdiction.

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| • | Modifications to the Terms of the Existing Notes: Considering that consent has been obtained for an amount greater than 90% of the existing notes capital, the Company has modified and replaced the following essential and non-essential terms and conditions of the existing notes.

| - | By virtue of the implementation of the Proposed Non-Essential Modifications, the entire section of “Certain Commitments” and “Events of Default” is eliminated from the terms and conditions set forth in the prospectus supplements dated May 2, 2019 and dated July 25, 2019 corresponding to the existing notes.
| - | Additionally, pursuant to the implementation of the Proposed Essential Modifications, the following terms and conditions of the Existing Notes are modified and replaced:

| • | Expiration Date: It will be March 1, 2023.
| • | Interest Payment Dates: will be the same dates reported for Class IX in the Notice of Results.

| - | It is clarified that the terms and conditions of the Series I Notes not modified by the Proposed Essential Modifications and the Proposed Non-Essential Modifications will maintain their full validity.
| - | The implementation of the Proposed Essential Modifications and Proposed Non-Essential Modifications were approved by the Board of Directors, on November 11, 2020.

| • | Repayment Series I: In relation to the Exchange Offer ended on November 10, 2020, on November 12, 2020, IRSA made a partial repayment of Series I Notes for a Nominal Value of USD 178.5, after the partial repayment the Nominal Value under circulation was USD 3.1 and due to the fact that the necessary percentage for the change of conditions for Series I was reached, then the expiration date was modified, among others, until March 1, 2023, so Series I remains for USD 3.1 until the new maturity, and the payment of interest replicates to Series IX.

Loan to related party

On October 23, 2020, Dolphin Netherlands granted a loan to Yad Leviim Ltd. in a principal amount of USD 16,250,000 at a rate interest of 5% per year. Yad Leviim Ltd. is a company controlling by Eduardo Elsztain. The maturity date of this loan is March 22, 2022.

21. Taxes

The Group’s income tax has been calculated on the estimated taxable profit for each year at the rates prevailing in the respective tax jurisdictions. The subsidiaries of the Group in the jurisdictions where the Group operates are required to calculate their income taxes on a separate basis; thus, they are not permitted to compensate subsidiaries’ losses against subsidiaries income.

Argentine tax reform

Law 27,541 on Solidarity and Production Reactivation, which was published in December 2019, introduced some amendments to different taxes and created the so-called Impuesto Para una Argentina Inclusiva y Solidaria (PAIS).

The main amendments related to Income Tax that affect the Group companies are:

1) In the first and second fiscal years begun after January 1, 2019 (i.e., for the Group’s fiscal years begun on July 1, 2019 and 2020), the profit / loss for tax inflation adjustment shall be allocated as follows: one sixth in the fiscal year of assessment thereof and the other five sixths over the following fiscal years;

2) The rate applicable to companies for the third fiscal year commencing after January 1, 2018 (i.e., for the Group’s fiscal years begun on July 1, 2019) is increased from 25% to 30%.

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Tax inflation adjustment: Law 27,430, which was promulgated by the Argentine Congress on December 29, 2017 in the context of the tax reform, establishes the following rules for the application of the inflation adjustment in income tax: (i) the update of the cost for goods acquired or investments made in the fiscal years that begin as of January 1, 2018 (applicable to IRSA for the year end June 30, 2019), considering the percentage variations of the CPI provided by the National Institute of Statistic and Census (INDEC); and (ii) the application of the adjustment set forth in Title VI of the Income Tax Law when a percentage of variation -of the aforementioned index price - accumulated in thirty-six (36) months prior to the fiscal year end that is liquidated, is greater than 100%, or, with respect to the first, second and third year after its validity, this procedure will be applicable in case the accumulated variation of that index price, calculated from the beginning of the first of them and until the end of each year, exceeds 55%, 30% and 15% for the first, second and third year of application, respectively. At the end of this year, there has been an accumulative variation of 50% in the index price that exceeds the expected condition of 55% for the application of the adjustment in said first year. Consequently, the tax inflation adjustment has been applied and the cost of goods acquired during the year 2019 has been updated as established in article 58 of the Argentine Income Tax Law.

Due to the enactment of Law 27630 published in the Official Gazette on June 16, 2021 and effective for the years beginning on January 1, 2021, the current rates for corporate income tax are modified according to the following scale:

Accumulated net taxable profit |  |  | Will pay |  |  | More of % |  |  | On the surplus of |
More of |  |  | To |  |  |  |
| - |  |  |  | 5,000,000 |  |  |  | - |  |  |  | 25 | % |  |  | - |
| 5,000,000 |  |  |  | 50,000,000 |  |  |  | 1,250,000 |  |  |  | 30 | % |  |  | 5,000,000 |
| 50,000,000 |  |  |  | Onwards |  |  |  | 14,750,000 |  |  |  | 35 | % |  |  | 50,000,000 |

The amounts provided for in the scale will be adjusted annually, as of January 1, 2022, considering the annual variation of the Consumer Price Index (CPI), corresponding to the month of October of the year prior to the adjustment, with respect to the same month. from the previous year. The amounts determined by application of the described mechanism will be applicable for the fiscal years that begin after each update.

The impacts that this change generates on the balances of deferred income tax assets and liabilities, net (ARS 18,166 loss) have been recorded in these financial statements, considering the effective rate that is estimated to be applicable to the probable date for the reversal of such deferred income tax assets and liabilities.

US tax reform

In December 2017, a bill was passed to reform the Federal Taxation Law in the United States. The reform included a reduction of the corporate tax rate from 35% to 21%, for the tax years 2018 and thereafter. The reform has impact in certain subsidiaries of the Group in the United States.

The details of the provision for the Group’s income tax, is as follows:

|  | June 30, 2 021 |  |  | June 30, 2020 |  |  | June 30, 2019 |
Current income tax |  |  | (958 | ) |  |  | (386 | ) |  |  | (337 | )
Deferred income tax |  |  | (20,715 | ) |  |  | (9,476 | ) |  |  | 7,097 |
Minimum presumed income tax |  |  | - |  |  |  | (203 | ) |  |  | - |
Income tax from continuing operations |  |  | (21,673 | ) |  |  | (10,065 | ) |  |  | 6,760 |

The statutory taxes rates in the countries where the Group operates for all of the years presented are:

Tax jurisdiction |  | Income tax rate |
Argentina |  | 25% - 35 | %
Uruguay |  | 0% - 25 | %
U.S.A |  | 0% - 40 | %
Bermuda |  |  | 0 | %
Israel |  | 23% - 24 | %

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Below is a reconciliation between income tax expense and the tax calculated applying the current tax rate, applicable in the respective countries, to profit before taxes for years ended June 30, 2021, 2020 and 2019:

|  | June 30, 2021 |  |  | June 30, 2020 |  |  | June 30, 2019 |
Profit / (loss) from continuing operations at tax rate applicable in the respective countries |  |  | 2,099 |  |  |  | (16,122 | ) |  |  | 17,519 |
Permanent differences: |  |  |  |  |  |  |  |  |  |  |  |
Share of profit of associates and joint ventures |  |  | (1,314 | ) |  |  | 1,335 |  |  |  | (2,498 | )
Unrecognized tax loss carryforwards |  |  | (2,361 | ) |  |  | (1,253 | ) |  |  | (2,772 | )
Inflation adjustment permanent difference |  |  | 3,521 |  |  |  | 2,493 |  |  |  | - |
Tax rate differential |  |  | (15,186 | ) |  |  | 3,729 |  |  |  | (122 | )
Gain from disposal of subsidiaries |  |  | - |  |  |  | - |  |  |  | 859 |
Non-taxable profit, non-deductible expenses and others |  |  | (80 | ) |  |  | 2,659 |  |  |  | (838 | )
Fiscal transparency |  |  | (168 | ) |  |  | 227 |  |  |  | - |
Tax inflation adjustment |  |  | (8,184 | ) |  |  | (3,133 | ) |  |  | (5,388 | )
Income tax from continuing operations |  |  | (21,673 | ) |  |  | (10,065 | ) |  |  | 6,760 |

Deferred tax assets and liabilities of the Group as of June 30, 2021 and 2020 will be recovered as follows:

|  | June 30, 2021 |  |  | June 30, 2020 |
Deferred income tax asset to be recovered after more than 12 months |  |  | 1,599 |  |  |  | 22,629 |
Deferred income tax asset to be recovered within 12 months |  |  | 4,421 |  |  |  | 1,306 |
Deferred income tax assets |  |  | 6,020 |  |  |  | 23,935 |
|  | June 30, 2021 |  |  | June 30, 2020 |
Deferred income tax liability to be recovered after more than 12 months |  |  | (73,816 | ) |  |  | (86,116 | )
Deferred income tax liability to be recovered within 12 months |  |  | (506 | ) |  |  | (3,012 | )
Deferred income tax liability |  |  | (74,322 | ) |  |  | (89,128 | )
Deferred income tax liabilities, net |  |  | (68,302 | ) |  |  | (65,193 | )

The movement in the deferred income tax assets and liabilities during the years ended June 30, 2021 and 2020, without taking into consideration the offsetting of balances within the same tax jurisdiction, is as follows:

|  | 06.30.20 |  |  | Cumulative translation adjustment |  |  | Charged / (Credited) to the Consolidated Statements of Income and Other Comprehensive Income |  |  | Revaluation surplus reserve |  |  | Deconsolidation |  |  | Incorporation by business combination |  |  | 06.30.21 |
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property, plant and equipment |  |  | 445 |  |  |  | 74 |  |  |  | 56 |  |  |  | - |  |  |  | (64 | ) |  |  | - |  |  |  | 511 |
Trade and other payables |  |  | 7,986 |  |  |  | 2,436 |  |  |  | (49 | ) |  |  | - |  |  |  | (9,621 | ) |  |  | - |  |  |  | 752 |
Tax loss carry-forwards |  |  | 12,836 |  |  |  | 2,320 |  |  |  | (5,884 | ) |  |  | - |  |  |  | (9,039 | ) |  |  | - |  |  |  | 233 |
Borrowings |  |  | 231 |  |  |  | - |  |  |  | 845 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,076 |
Trade and other receivables |  |  | 99 |  |  |  | - |  |  |  | 2,837 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 2,936 |
Others |  |  | 2,338 |  |  |  | 522 |  |  |  | (267 | ) |  |  | - |  |  |  | (2,119 | ) |  |  | 38 |  |  |  | 512 |
Subtotal assets |  |  | 23,935 |  |  |  | 5,352 |  |  |  | (2,462 | ) |  |  | - |  |  |  | (20,843 | ) |  |  | 38 |  |  |  | 6,020 |
Liabilities |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Investment properties and Property, plant and equipment |  |  | (77,595 | ) |  |  | (1,492 | ) |  |  | (7,211 | ) |  |  | (83 | ) |  |  | 28,563 |  |  |  | - |  |  |  | (57,818 | )
Trade and other receivables |  |  | (1,385 | ) |  |  | - |  |  |  | (1,904 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (3,289 | )
Investments |  |  | (107 | ) |  |  | - |  |  |  | 104 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (3 | )
Tax inflation adjustment |  |  | (6,491 | ) |  |  | - |  |  |  | (6,509 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (13,000 | )
Borrowings |  |  | (1,433 | ) |  |  | (475 | ) |  |  | 94 |  |  |  | - |  |  |  | 1,816 |  |  |  | - |  |  |  | 2 |
Intangible assets |  |  | (3,595 | ) |  |  | (1,179 | ) |  |  | 168 |  |  |  | - |  |  |  | 4,531 |  |  |  | - |  |  |  | (75 | )
Others |  |  | 1,478 |  |  |  | (525 | ) |  |  | (2,718 | ) |  |  | - |  |  |  | 1,626 |  |  |  | - |  |  |  | (139 | )
Subtotal liabilities |  |  | (89,128 | ) |  |  | (3,671 | ) |  |  | (17,976 | ) |  |  | (83 | ) |  |  | 36,536 |  |  |  | - |  |  |  | (74,322 | )
Assets (Liabilities), net |  |  | (65,193 | ) |  |  | 1,681 |  |  |  | (20,438 | ) |  |  | (83 | ) |  |  | 15,693 |  |  |  | 38 |  |  |  | (68,302 | )

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|  | 06.30.19 |  |  | Cumulative translation adjustment |  |  | Charged / (Credited) to the Consolidated Statements of Income and Other Comprehensive Income |  |  | Revaluation surplus reserve |  |  | Charged / (Credited) to the revaluation surplus reserve |  |  | Deconsolidation |  |  | Incorporation by business combination |  |  | 06.30.20 |
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property, plant and equipment |  |  | 255 |  |  |  | 1,524 |  |  |  | (1,334 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 445 |
Investments |  |  | 9 |  |  |  | - |  |  |  | (9 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Trade and other payables |  |  | 8,600 |  |  |  | 1,289 |  |  |  | (1,256 | ) |  |  | - |  |  |  | - |  |  |  | (647 | ) |  |  | - |  |  |  | 7,986 |
Tax loss carry-forwards |  |  | 10,479 |  |  |  | 1,560 |  |  |  | 922 |  |  |  | - |  |  |  | - |  |  |  | (125 | ) |  |  | - |  |  |  | 12,836 |
Others |  |  | 1,805 |  |  |  | 250 |  |  |  | 613 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 2,668 |
Subtotal assets |  |  | 21,148 |  |  |  | 4,623 |  |  |  | (1,064 | ) |  |  | - |  |  |  | - |  |  |  | (772 | ) |  |  | - |  |  |  | 23,935 |
Liabilities |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Investment properties and Property, plant and equipment |  |  | (87,425 | ) |  |  | (260 | ) |  |  | (11,864 | ) |  |  | (137 | ) |  |  | 539 |  |  |  | 22,489 |  |  |  | (937 | ) |  |  | (77,595 | )
Trade and other receivables |  |  | (1,335 | ) |  |  | - |  |  |  | (50 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (1,385 | )
Investments |  |  | (197 | ) |  |  | - |  |  |  | 90 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (107 | )
Tax inflation adjustment |  |  | (4,532 | ) |  |  | - |  |  |  | (1,959 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (6,491 | )
Borrowings |  |  | (1,589 | ) |  |  | (424 | ) |  |  | 580 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (1,433 | )
Intangible assets |  |  | (3,402 | ) |  |  | (768 | ) |  |  | 575 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (3,595 | )
Others |  |  | (802 | ) |  |  | (804 | ) |  |  | 3,722 |  |  |  | - |  |  |  | - |  |  |  | (273 | ) |  |  | (365 | ) |  |  | 1,478 |
Subtotal liabilities |  |  | (99,282 | ) |  |  | (2,256 | ) |  |  | (8,906 | ) |  |  | (137 | ) |  |  | 539 |  |  |  | 22,216 |  |  |  | (1,302 | ) |  |  | (89,128 | )
Assets (Liabilities), net |  |  | (78,134 | ) |  |  | 2,367 |  |  |  | (9,970 | ) |  |  | (137 | ) |  |  | 539 |  |  |  | 21,444 |  |  |  | (1,302 | ) |  |  | (65,193 | )

Deferred income tax assets are recognized for tax loss carry-forwards to the extent that the realization of the related tax benefits through future taxable profits is probable. Tax loss carry-forwards may have expiration dates or may be permanently available for use by the Group depending on the tax jurisdiction where the tax loss carry-forward is generated. Tax loss carry forwards in Argentina and Uruguay generally expire within 5 years.

As of June 30, 2021, the Group’s recognized tax loss carry forward prescribed as follows:

Date |  | Total |
2024 |  |  | 31 |
2025 |  |  | 477 |
2026 |  |  | 157 |
Total |  |  | 665 |

In order to fully realize the deferred tax asset, the respective companies of the Group will need to generate future taxable income. To this aim, a projection was made for future years when deferred assets will be deductible. Such projection is based on aspects such as the expected performance of the main macroeconomic variables affecting the business, production issues, pricing, yields and costs that make up the operational flows derived from the regular exploitation of fields and other assets of the group, the flows derived from the performance of financial assets and liabilities and the income generated by the Group’s strategy of crop rotation. Such strategy implies the purchase and/or development of fields in marginal areas or areas with a high upside potential and periodical sale of such properties that are deemed to have reached their maximum appreciation potential.

Based on the estimated and aggregate effect of all these aspects on the companies’ performance, Management estimates that as at June 30, 2021, it is probable that the Company will realize all of the deferred tax assets.

The Group did not recognize deferred income tax assets (tax loss carry forwards) of ARS 1,883 as of June 30, 2021 and ARS 197 as of June 30, 2020. Although the Management estimates that the business will generate sufficient income, pursuant to IAS 12, management has determined that, as a result of the recent loss history and the lack of verifiable and objective evidence due to the subsidiary’s results of operations history, there is sufficient uncertainty as to the generation of sufficient income to be able to offset losses within a reasonable timeframe, therefore, no deferred tax asset is recognized in relation to these losses.

The Group did not recognize deferred income tax liabilities of ARS 135 as of June 30, 2020, related to their investments in foreign subsidiaries, associates and joint ventures. In addition, the withholdings and/or similar taxes paid at source may be creditable against the Group’s potential final tax liability.

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On June 30, 2020, the Group recognized a deferred liability in the amount of ARS 1,361 related to the potential future sale of one of its subsidiaries shares.

22. Leases

The Group as lessee

In the ordinary course of business, the Group leases property or spaces for administrative or commercial use both in Argentina and Israel. The agreements entered into include several clauses, including but not limited, to fixed, variable or adjustable payments. Some leases were agreed upon with related parties (Note 30).

The future minimum payments that the Group must pay under leases are as follows:

|  | June 30, 2021 |  |  | June 30, 2020 |  |  | June 30, 2019 |
No later than one year |  |  | - |  |  |  | 3,467 |  |  |  | 13,012 |
Later than one year and not later than five years |  |  | - |  |  |  | 7,910 |  |  |  | 20,294 |
Later than five years |  |  | - |  |  |  | 3,602 |  |  |  | 1,355 |
|  |  | - |  |  |  | 14,979 |  |  |  | 34,661 |

The Group as lessor

Leases:

In the Shopping Malls segment and Offices segment, the Group enters into operating lease agreements typical in the business. Given the diversity of properties and lessees, and the various economic and regulatory jurisdictions where the Group operates, the agreements may adopt different forms, such as fixed, variable, adjustable leases, etc. For example, operating lease agreements with lessees of Shopping Malls generally include escalation clauses and contingent payments. Income from leases are recorded in the Statement of Income under rental and service income in all of the filed fiscal years.

Rental properties are considered to be investment property. Book value is included in Note 9. The future minimum proceeds under non-cancellable operating leases from Group’s shopping malls, offices and other buildings are as follows:

|  | June 30, 2021 |  |  | June 30, 2020 |  |  | June 30, 2019 |
No later than one year |  |  | 4,023 |  |  |  | 1,095 |  |  |  | 19,850 |
Later than one year and not later than five years |  |  | 8,059 |  |  |  | 31,063 |  |  |  | 44,656 |
Later than five years |  |  | 2,266 |  |  |  | 14,574 |  |  |  | 32,083 |
|  |  | 14,348 |  |  |  | 46,732 |  |  |  | 96,589 |

23. Revenues

|  | June 30, 2021 |  |  | June 30, 2020 |  |  | June 30, 2019 |
Rental and services income |  |  | 11,034 |  |  |  | 17,131 |  |  |  | 21,937 |
Sales of trading properties and developments |  |  | 1,024 |  |  |  | 1,095 |  |  |  | 1,631 |
Revenue from hotels operation and tourism services |  |  | 920 |  |  |  | 3,037 |  |  |  | 4,436 |
Total Group’s revenues |  |  | 12,978 |  |  |  | 21,263 |  |  |  | 28,004 |

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24. Expenses by nature

The Group disclosed expenses in the Consolidated Statements of Income and Other Comprehensive Income by function as part of the line items “Costs”, “General and administrative expenses” and “Selling expenses”. The following tables provide additional disclosure regarding expenses by nature and their relationship to the function within the Group as of June 30, 2021, 2020 and 2019:

|  | Costs |  |  | General and administrative expenses |  |  | Selling expenses |  |  | Total as of June 30, 2021 |
Cost of sale of goods and services |  |  | 1,000 |  |  |  | - |  |  |  | - |  |  |  | 1,000 |
Salaries, social security costs and other personnel expenses |  |  | 2,239 |  |  |  | 1,156 |  |  |  | 146 |  |  |  | 3,541 |
Depreciation and amortization |  |  | 412 |  |  |  | 224 |  |  |  | 6 |  |  |  | 642 |
Fees and payments for services |  |  | 127 |  |  |  | 228 |  |  |  | 295 |  |  |  | 650 |
Maintenance, security, cleaning, repairs and others |  |  | 1,679 |  |  |  | 273 |  |  |  | 3 |  |  |  | 1,955 |
Advertising and other selling expenses |  |  | 358 |  |  |  | - |  |  |  | 40 |  |  |  | 398 |
Taxes, rates and contributions |  |  | 511 |  |  |  | 124 |  |  |  | 787 |  |  |  | 1,422 |
Director´s fees |  |  | - |  |  |  | 845 |  |  |  | - |  |  |  | 845 |
Leases and service charges |  |  | 189 |  |  |  | 36 |  |  |  | 14 |  |  |  | 239 |
Allowance for doubtful accounts, net |  |  | - |  |  |  | - |  |  |  | 194 |  |  |  | 194 |
Other expenses |  |  | 49 |  |  |  | 131 |  |  |  | 5 |  |  |  | 185 |
Total as of June 30, 2021 |  |  | 6,564 |  |  |  | 3,017 |  |  |  | 1,490 |  |  |  | 11,071 |

|  | Costs |  |  | General and administrative expenses |  |  | Selling expenses |  |  | Total as of June 30, 2020 |
Cost of sale of goods and services |  |  | 939 |  |  |  | - |  |  |  | - |  |  |  | 939 |
Salaries, social security costs and other personnel expenses |  |  | 2,861 |  |  |  | 1,200 |  |  |  | 201 |  |  |  | 4,262 |
Depreciation and amortization |  |  | 488 |  |  |  | 225 |  |  |  | 3 |  |  |  | 716 |
Fees and payments for services |  |  | 225 |  |  |  | 566 |  |  |  | 66 |  |  |  | 857 |
Maintenance, security, cleaning, repairs and others |  |  | 2,590 |  |  |  | 340 |  |  |  | 5 |  |  |  | 2,935 |
Advertising and other selling expenses |  |  | 774 |  |  |  | - |  |  |  | 103 |  |  |  | 877 |
Taxes, rates and contributions |  |  | 678 |  |  |  | 134 |  |  |  | 933 |  |  |  | 1,745 |
Director´s fees |  |  | - |  |  |  | 613 |  |  |  | - |  |  |  | 613 |
Leases and service charges |  |  | 200 |  |  |  | 35 |  |  |  | 29 |  |  |  | 264 |
Allowance for doubtful accounts, net |  |  | - |  |  |  | - |  |  |  | 464 |  |  |  | 464 |
Other expenses |  |  | 117 |  |  |  | 188 |  |  |  | 18 |  |  |  | 323 |
Total as of June 30, 2020 |  |  | 8,872 |  |  |  | 3,301 |  |  |  | 1,822 |  |  |  | 13,995 |

|  | Costs |  |  | General and administrative expenses |  |  | Selling expenses |  |  | Total as of June 30, 2019 |
Cost of sale of goods and services |  |  | 865 |  |  |  | - |  |  |  | - |  |  |  | 865 |
Salaries, social security costs and other personnel expenses |  |  | 3,716 |  |  |  | 1,488 |  |  |  | 225 |  |  |  | 5,429 |
Depreciation and amortization |  |  | 382 |  |  |  | 172 |  |  |  | 6 |  |  |  | 560 |
Fees and payments for services |  |  | 223 |  |  |  | 625 |  |  |  | 88 |  |  |  | 936 |
Maintenance, security, cleaning, repairs and others |  |  | 3,123 |  |  |  | 335 |  |  |  | 6 |  |  |  | 3,464 |
Advertising and other selling expenses |  |  | 833 |  |  |  | 36 |  |  |  | 133 |  |  |  | 1,002 |
Taxes, rates and contributions |  |  | 906 |  |  |  | 137 |  |  |  | 923 |  |  |  | 1,966 |
Director´s fees |  |  | - |  |  |  | 998 |  |  |  | - |  |  |  | 998 |
Leases and service charges |  |  | 200 |  |  |  | 49 |  |  |  | 30 |  |  |  | 279 |
Allowance for doubtful accounts, net |  |  | - |  |  |  | - |  |  |  | 191 |  |  |  | 191 |
Other expenses |  |  | 213 |  |  |  | 246 |  |  |  | 17 |  |  |  | 476 |
Total as of June 30, 2019 |  |  | 10,461 |  |  |  | 4,086 |  |  |  | 1,619 |  |  |  | 16,166 |

25. Cost of goods sold and services provided

|  | Total as of June 30, 2021 |  |  | Total as of June 30, 2020 |  |  | Total as of June 30, 2019 |
Inventories at the beginning of the year (*) |  |  | 17,807 |  |  |  | 15,017 |  |  |  | 35,250 |
Adjustments previous years |  |  | - |  |  |  | - |  |  |  | (12,504 | )
Purchases and expenses |  |  | 1,389 |  |  |  | 86,523 |  |  |  | 84,303 |
Capitalized finance costs |  |  | - |  |  |  | 18 |  |  |  | 26 |
Currency translation adjustment |  |  | (5,784 | ) |  |  | 12,410 |  |  |  | (2,119 | )
Transfers |  |  | (306 | ) |  |  | 302 |  |  |  | 224 |
Deconsolidation |  |  | (4,712 | ) |  |  | (233 | ) |  |  | - |
Incorporated by business combination |  |  | - |  |  |  | 397 |  |  |  | - |
Inventories at the end of the year (*) |  |  | (1,830 | ) |  |  | (17,807 | ) |  |  | (15,017 | )
Total costs |  |  | 6,564 |  |  |  | 96,627 |  |  |  | 90,163 |

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The following table presents the composition of the Group’s inventories for the years ended June 30, 2021 and 2020:

|  | Total as of June 30, 2021 |  |  | Total as of June 30, 2020 |
Real estate |  |  | 1,758 |  |  |  | 10,772 |
Telecommunications |  |  | - |  |  |  | 2,535 |
Fruits |  |  | - |  |  |  | 4,063 |
Others |  |  | 72 |  |  |  | 437 |
Total inventories at the end of the year (*) |  |  | 1,830 |  |  |  | 17,807 |

(*) Inventories includes trading properties and inventories.

26. Other operating results, net

|  | June 30, 2021 |  |  | June 30, 2020 |  |  | June 30, 2019 |
Result from purchase / sale of subsidiary and associates |  |  | 37 |  |  |  | (9 | ) |  |  | (225 | )
Donations |  |  | (137 | ) |  |  | (149 | ) |  |  | (307 | )
Lawsuits and other contingencies |  |  | (87 | ) |  |  | (164 | ) |  |  | (144 | )
Interest generated by operating credits |  |  | 97 |  |  |  | 254 |  |  |  | 369 |
Others |  |  | 4 |  |  |  | 187 |  |  |  | (163 | )
Total other operating results, net |  |  | (86 | ) |  |  | 119 |  |  |  | (470 | )

27. Financial results, net

|  | June 30, 2021 |  |  | June 30, 2020 |  |  | June 30, 2019 |
Finance income: |  |  |  |  |  |  |  |  |
- Interest income |  |  | 360 |  |  |  | 299 |  |  |  | 260 |
- Dividend income |  |  | 1 |  |  |  | 21 |  |  |  | 21 |
Total finance income |  |  | 361 |  |  |  | 320 |  |  |  | 281 |
Finance costs: |  |  |  |  |  |  |  |  |  |  |  |
- Interest expenses |  |  | (6,974 | ) |  |  | (8,857 | ) |  |  | (7,023 | )
- Other finance costs |  |  | (792 | ) |  |  | (563 | ) |  |  | (520 | )
Subtotal finance costs |  |  | (7,766 | ) |  |  | (9,420 | ) |  |  | (7,543 | )
Capitalized finance costs |  |  | 468 |  |  |  | 169 |  |  |  | 356 |
Total finance costs |  |  | (7,298 | ) |  |  | (9,251 | ) |  |  | (7,187 | )
Other financial results: |  |  |  |  |  |  |  |  |  |  |  |
- Fair value gain of financial assets and liabilities at fair value through profit or loss, net |  |  | 5,318 |  |  |  | 505 |  |  |  | 1,026 |
- Exchange differences, net |  |  | 7,020 |  |  |  | (9,383 | ) |  |  | 1,507 |
- (Loss) / gain from repurchase of negotiable obligations |  |  | (95 | ) |  |  | 139 |  |  |  | - |
- (Loss) / gain from derivative financial instruments, net |  |  | (452 | ) |  |  | (549 | ) |  |  | 837 |
- Other financial results |  |  | (74 | ) |  |  | - |  |  |  | - |
Total other financial results |  |  | 11,717 |  |  |  | (9,288 | ) |  |  | 3,370 |
- Inflation adjustment |  |  | (1,446 | ) |  |  | (16 | ) |  |  | (1,028 | )
Total financial results, net |  |  | 3,334 |  |  |  | (18,235 | ) |  |  | (4,564 | )

28. Earnings per share

Below is a reconciliation between the weighted-average number of common shares outstanding and the diluted weighted-average number of common shares.

|  | June 30, 2021 |  |  | June 30, 2020 |  |  | June 30, 2019 |
Weighted - average outstanding shares |  |  | 588 |  |  |  | 575 |  |  |  | 575 |
Adjustments for calculation of diluted earnings per share |  |  |  |  |  |  |  |  |  |  |  |
Treasury shares |  |  | - |  |  |  | 2 |  |  |  | - |
Weighted - average diluted common shares |  |  | 588 |  |  |  | 577 |  |  |  | 575 |

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(a) Basic

Basic earnings per share amounts are calculated in accordance with IAS 33 “Earning per share” by dividing the profit attributable to equity holders of the Group by the weighted average number of ordinary shares outstanding during the year.

|  | June 30, 2021 |  |  | June 30, 2020 |  |  | June 30, 2019 |
(Loss) / profit for the year of continuing operations attributable to equity holders of the parent |  |  | (22,879 | ) |  |  | 29,932 |  |  |  | (48,819 | )
Loss for the year of discontinued operations attributable to equity holders of the parent |  |  | (7,050 | ) |  |  | (8,527 | ) |  |  | (6,169 | )
(Loss) / profit for the year attributable to equity holders of the parent |  |  | (29,929 | ) |  |  | 21,405 |  |  |  | (54,988 | )
Weighted average number of ordinary shares outstanding |  |  | 588 |  |  |  | 575 |  |  |  | 575 |
Basic earnings per share |  |  | (50.86 | ) |  |  | 37.20 |  |  |  | (95.64 | )

(b) Diluted

Diluted earnings per share amounts are calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential shares. The Group holds treasury shares and, as of fiscal year 2021, warrants associated with incentive plans with potentially dilutive effect.

|  | June 30, 2021 |  |  | June 30, 2020 |  |  | June 30, 2019 |
(Loss) / profit for the year of continuing operations attributable to equity holders of the parent |  |  | (22,879 | ) |  |  | 29,932 |  |  |  | (48,819 | )
Loss for the year of discontinued operations attributable to equity holders of the parent |  |  | (7,050 | ) |  |  | (8,527 | ) |  |  | (6,169 | )
(Loss) / profit for the year per share attributable to equity holders of the parent |  |  | (29,929 | ) |  |  | 21,405 |  |  |  | (54,988 | )
Weighted average number of ordinary shares outstanding |  |  | 588 |  |  |  | 577 |  |  |  | 575 |
Diluted earnings per share |  |  | (50.86 | ) |  |  | 37.10 |  |  |  | (95.64 | )

29. Employee benefits and share-based payments

Incentive Plan - Argentina

The Group has an equity incentives plan (“Incentive Plan”), created in September 30, 2011, which is aimed at certain employees, directors and top management of the Company, IRSA CP and Cresud (the “Participants”). Engagement was voluntary and by invitation of the Board of Directors.

Under the Incentive Plan, over the years 2011, 2012 and 2013, Participants will be entitled to receive shares (“Contributions”) of the Company and Cresud based on a percentage of their annual bonus for the years 2011, 2012 and 2013, providing they remain as employees of the Company for at least five years, among other conditions required, to qualify for such Contributions. Contributions shall be held by the Company and Cresud, and as the conditions established by the Plan are verified, such contributions shall be transferred to the Participants. In spite of this, the economic rights of the shares in the portfolio assigned to said participants will be received by them.

Regarding the shares to be delivered by Cresud to the employees of the company and IRSA CP, and for the shares to be delivered by IRSA to Cresud employees, the Group accounts the active or passive position measured at the closing date of the financial statements.

For the fiscal years ended June 30, 2021 and 2020, the Group has incurred a charge related to the Incentive Plan of ARS 0.6 and ARS 0,4, respectively.

Movements in the number of matching shares outstanding under the incentive plan corresponding to the Company´s contributions are as follows:

|  | June 30, 2021 |  |  | June 30, 2020 |  |  | June 30, 2019 |
At the beginning |  |  | 2.4 |  |  |  | 2.8 |  |  |  | 3.3 |
Granted |  |  | -0.3 |  |  |  | -0.4 |  |  |  | -0.5 |
At the end |  |  | 2.1 |  |  |  | 2.4 |  |  |  | 2.8 |

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The fair value determined at the time of granting the plan after obtaining all the corresponding authorizations was ARS 25.3 per share of IRSA. This fair value was estimated by taking into account the market price of the shares of the Company on said date.

Defined contribution plan - Argentina

The Group operates a defined contribution plan (the “Plan”) which covers certain selected managers from Argentina. The Plan was effective as from January 1, 2006. Participants can make pre-tax contributions to the Plan of up to 2.5% of their monthly salary (“Base Contributions”) and up to 15% of their annual bonus (“Extraordinary Contributions”). Under the Plan, the Group matches employee contributions to the plan at a rate of 200% for Base Contributions and 300% for Extraordinary Contributions.

All contributions are invested in funds administered outside of the Group. Participants or their assignees, as the case may be, will have access to the 100% of the Company contributions under the following circumstances:

| (i) | ordinary retirement in accordance with applicable labor regulations;
| (ii) | total or permanent incapacity or disability;
| (iii) | death.

In case of resignation or termination without fair cause, the manager will receive the Group’s contribution only if he or she has participated in the Plan for at least 5 years.

Contributions made by the Group under the Plan amount to ARS 58 and ARS 54 for the fiscal years ended June 30, 2021 and 2020, respectively.

30. Related party transactions

In the normal course of business, the Group conducts transactions with different entities or parties related to it.

Remunerations of the Board of Directors

The Business Companies Act of Argentina (Law N° 19,550), provides that the remuneration to the Board of Directors, where it is not set forth in the Company’s by-laws, shall be fixed by the Shareholders’ Meetings. The maximum amount of remuneration that the members of the Board are allowed to receive, including salary and other performance-based remuneration of permanent technical-administrative functions, may not exceed 25% of the profits.

Such maximum amount is limited to 5% where no dividends are distributed to the Shareholders, and will be increased proportionately to the distribution, until reaching such cap where total profits are distributed.

Some of the Group’s Directors are hired under the Employment Contract Law N° 20,744. This Act rules on certain conditions of the work relationship, including remuneration, salary protection, working hours, vacations, paid leaves, minimum age requirements, workmen protection and forms of suspension and contract termination. The remuneration of directors for each fiscal year is based on the provisions established by the Business Companies Act, taking into consideration whether such directors perform technical-administrative functions and depending upon the results recorded during the fiscal year. Once such amounts are determined, they should be approved by the Shareholders’ Meeting.

Senior Management remuneration

The members of the Group’s senior management are appointed and removed by the Board of Directors, and perform functions in accordance with the instructions delivered by the Board itself.

The Company’s Senior Management is composed of as follows:

Name | Date of Birth | Position | Current position since
Eduardo S. Elsztain | 01/26/1960 | General Manager | 1991
Daniel R. Elsztain | 12/22/1972 | Operating Manager | 2012
Jorge Cruces | 11/07/1966 | Investment Manager | 2020
Matías I. Gaivironsky | 02/23/1976 | Administrative and Financial Manager | 2011

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The total remuneration paid to members of senior management for their functions consists of a fix salary that takes account of the manager’s backgrounds capacity and experience, plus an annual bonus based on their individual performance and the Group’s results. Members of senior management participate in defined contributions and share-based incentive plans that are described in Note 29.

The aggregate compensation to the Senior Management for the year ended June 30, 2021 amounts to ARS 44.

Corporate Service Agreement with Cresud and IRSA CP

Considering that IRSA, Cresud and IRSA CP have operating overlapping areas, the Board of Directors considered it convenient to implement alternatives that allow reducing certain fixed costs of its activity, in order to reduce its impact on operating results, taking advantage of and optimizing the individual efficiencies of each of the companies in the different areas that make up the operational administration.

For this purpose, on June 30, 2004, a Framework Agreement for the Exchange of Corporate Services (“Framework Agreement”) was signed, between IRSA, Cresud and IRSA CP, which was periodically modified, the last update being on June 28, 2019.

Under this Framework Agreement, corporate services are currently provided in the following areas: Corporate Human Resources, Administration and Finance, Planning, Institutional Relations, Compliance, Shared Services Center, Real Estate Business Administration, Directory to distribute Real Estate, HR Real Estate Business, Security, Corporate Legal Management, Corporate Environment, Technical Management Infrastructure and Services, Purchasing and Contracting, Management and Enabling, Investments, Government Affairs, Hotels, Fraud Prevention, Bolivar, Proxy, General Management to distribute, Directory Security.

Under this agreement, the companies entrusted to an external consultant the semi-annual review and evaluation of the criteria used in the process of liquidating corporate services, as well as the distribution bases and supporting documentation used in the aforementioned process, through the preparation of a semi-annual report.

It should be noted that the operation under comment allows Cresud, IRSA and IRSA CP to maintain absolute independence and confidentiality in their strategic and commercial decisions, being the allocation of costs and benefits made on the basis of operational efficiency and equity, without pursuing individual economic benefits for each of the companies.

Offices and Shopping Malls spaces leases

The offices of our President are located at 108 Bolivar, in the Autonomous City of Buenos Aires. The property has been rented to Isaac Elsztain e Hajes S.A., a company controlled by some family members of Eduardo Sergio Elsztain, our president, and to Hamonet S.A., a company controlled by Fernando A. Elsztain, one of our directors, and some of his family members.

In addition, BACS, BHN Sociedad de Inversión S.A., BHN Seguros Generales S.A. and BHN Vida S.A. rent offices owned by IRSA CP in different buildings.

Furthermore, we also let various spaces in our shopping malls (stores, stands, storage space or advertising space) to third parties and related parties such as BHSA.

Donations granted to Fundación IRSA and Fundación Museo de los Niños

Fundación IRSA is a non-profit charity institution that seeks to support and generate initiatives concerning education, the promotion of corporate social responsibility and the entrepreneurial spirit of the youth. It carries out corporate volunteering programs and fosters donations by the employees. The main members of Fundación IRSA’s Board of Directors are: Eduardo S. Elsztain (President); Saul Zang (Vice President I), Alejandro Elsztain (Vice President II) and Mariana C. de Elsztain (secretary). It funds its activities with the donations made by us, Cresud and IRSA CP.

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Fundación Museo de los Niños is a non-profit association, created by the same founders of Fundación IRSA and its Management Board is formed by the same members as Fundación IRSA. Fundación Museo de los Niños acts as special vehicle for the development of “Museo de los Niños, Abasto” and “Museo de los Niños, Rosario”. On October 29, 1999, our shareholders approved the award of the agreement “Museo de los Niños, Abasto” to Fundación Museo de los Niños. On October 31, 1997, IRSA CP entered into an agreement with Fundación IRSA whereby it loaned 3,800 square meters of the area built in the Abasto Shopping mall for a total term of 30 years, and on November 29, 2005, shareholders of IRSA CP approved another agreement entered into with Fundación Museo de los Niños whereby 2,670.11 square meters built in the Alto Rosario shopping mall were loaned for a term of 30 years. Fundación IRSA has used the available area to house the museum called “Museo de los Niños, Abasto” an interactive learning center for kids and adults, which was opened to the public in April 1999.

Legal Services

The Group hires legal services from Estudio Zang, Bergel & Viñes, at which Saúl Zang was a founding partner and sits at the Board of Directors of the Group companies.

Purchase and sale of goods and/or service hiring

In the normal course of its business and with the aim of making resources more efficient, in certain occasions purchases and/or hires services which later sells and/or recovers for companies or other related parties, based upon their actual utilization.

Sale of advertising space in media

Our company and our related parties frequently enter into agreements with third parties whereby we sell/acquire rights of use to advertise in media (TV, radio stations, newspapers, etc.) that will later be used in advertising campaigns. Normally, these spaces are sold and/or recovered to/from other companies or other related parties, based on their actual use.

Purchase and sale of financial assets

The Group usually invests excess cash in several instruments that may include those issued by related companies, acquired at issuance or from unrelated third parties through secondary market deals.

Investment in investment funds managed by BACS

The Group invests part of its liquid funds in mutual funds managed by BACS among other entities.

Borrowings

In the normal course of its activities, the Group enters into diverse loan agreements or credit facilities between the group’s companies and/or other related parties. These borrowings generally accrue interests at market rates.

Financial and service operations with BHSA

The Group works with several financial entities in the Argentine market for operations including, but not limited to, credit, investment, purchase and sale of securities and financial derivatives. Such entities include BHSA and its subsidiaries. BHSA and BACS usually act as underwriters in Capital Market transactions. In addition, we have entered into agreements with BHSA, who provides collection services for our shopping malls.

The following is a summary presentation of the balances with related parties as of June 30, 2021 and 2020:

Item |  | June 30, 2021 |  |  | June 30, 2020 |
Trade and other receivables |  |  | 2,981 |  |  |  | 2,361 |
Investments in financial assets |  |  | 1,575 |  |  |  | 2,414 |
Borrowings |  |  | (902 | ) |  |  | (236 | )
Trade and other payables |  |  | (457 | ) |  |  | (571 | )
Total |  |  | 3,197 |  |  |  | 3,968 |

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Related party |  | June 30, 2021 |  |  | June 30, 2020 |  |  | Description of transaction |  | Item |
New Lipstick LLC |  |  | - |  |  |  | (116 | ) |  | Loans obtained |  | Borrowings |
|  |  | 23 |  |  |  | 24 |  |  | Reimbursement of expenses receivable |  | Trade and other receivable |
Condor |  |  | 550 |  |  |  | 365 |  |  | Public companies securities |  | Trade and other receivable |
|  |  | 286 |  |  |  | - |  |  | Loans granted |  | Trade and other receivable |
|  |  | 5 |  |  |  | - |  |  | Others |  | Trade and other receivable |
|  |  | 48 |  |  |  | 39 |  |  | Others |  | Investment in financial assets |
IRSA Real Estate Strategies LP |  |  | - |  |  |  | 174 |  |  | Reimbursement of expenses receivable |  | Trade and other receivable |
PBS Real Estate Holdings S.R.L |  |  | - |  |  |  | 709 |  |  | Reimbursement of expenses receivable |  | Trade and other receivable |
Lipstick Management LLC |  |  | (160 | ) |  |  | - |  |  | Loans obtained |  | Borrowings |
Metropolitan 885 Third Av. LLC |  |  | (472 | ) |  |  | - |  |  | Loans obtained |  | Borrowings |
La Rural S.A. |  |  | 73 |  |  |  | 110 |  |  | Loans granted |  | Trade and other receivable |
|  |  | 204 |  |  |  | 306 |  |  | Dividends |  | Trade and other receivable |
|  |  | - |  |  |  | 7 |  |  | Leases and/or rights of use receivable |  | Trade and other payables |
|  |  | (13 | ) |  |  | - |  |  | Leases and/or rights of use payable |  | Trade and other payables |
Other associates and joint ventures |  |  | 2 |  |  |  | 184 |  |  | Reimbursement of expenses receivable |  | Trade and other receivable |
|  |  | (36 | ) |  |  | (41 | ) |  | Loans obtained |  | Borrowings |
|  |  | - |  |  |  | 12 |  |  | Management fees |  | Trade and other receivable |
|  |  | 6 |  |  |  | 126 |  |  | Leases and/or rights of use receivable |  | Trade and other receivable |
|  |  | (2 | ) |  |  | - |  |  | Dividends |  | Trade and other receivable |
|  |  | 6 |  |  |  | - |  |  | Reimbursement of expenses receivable |  | Trade and other receivable |
|  |  | (105 | ) |  |  | - |  |  | NCN |  | Borrowings |
|  |  | (73 | ) |  |  | - |  |  | Others |  | Trade and other payables |
|  |  | 24 |  |  |  | - |  |  | Others |  | Trade and other receivable |
|  |  | 1 |  |  |  | - |  |  | Share based payments |  | Trade and other payables |
|  |  | (6 | ) |  |  | - |  |  | Lease liabilities |  | Trade and other payables |
|  |  | 7 |  |  |  | - |  |  | Loans granted |  | Trade and other receivable |
|  |  | - |  |  |  | 305 |  |  | Dividends |  | Trade and other receivable |
|  |  | - |  |  |  | (2 | ) |  | Reimbursement of expenses payable |  | Trade and other payables |
Total associates and joint ventures |  |  | 368 |  |  |  | 2,202 |  |  |  |  |  |
Cresud |  |  | - |  |  |  | (5 | ) |  | Reimbursement of expenses receivable |  | Trade and other payables |
|  |  | 13 |  |  |  | - |  |  | Corporate services receivable |  | Trade and other payables |
|  |  | (89 | ) |  |  | (367 | ) |  | NCN |  | Investment in financial assets |
|  |  | 1,527 |  |  |  | 2,375 |  |  | Leases and/or rights of use receivable |  | Trade and other payables |
|  |  | (144 | ) |  |  | - |  |  | Management fee |  | Trade and other payables |
|  |  | - |  |  |  | 6 |  |  |  |  |  |
|  |  | - |  |  |  | (2 | ) |  |  |  |  |
|  |  | (3 | ) |  |  | (5 | ) |  | Share based payments |  | Trade and other payables |
Total parent company |  |  | 1,304 |  |  |  | 2,002 |  |  |  |  |  |
Futuros y Opciones S.A. |  |  | (95 | ) |  |  | - |  |  | Loans obtained |  | Borrowings |
|  |  | 3 |  |  |  | - |  |  | Others |  | Trade and other receivable |
Helmir S.A. |  |  | (32 | ) |  |  | - |  |  | NCN |  | Borrowings |
Total subsidiaries of parent company |  |  | (124 | ) |  |  | - |  |  |  |  |  |
Directors |  |  | (126 | ) |  |  | (190 | ) |  | Fees for services received |  | Trade and other payables |
|  |  | 5 |  |  |  | 6 |  |  | Advances |  | Trade and other receivable |
Yad Levim LTD |  |  | 1,609 |  |  |  | - |  |  | Loans granted |  | Trade and other receivable |
Others (1) |  |  | (1 | ) |  |  | - |  |  | Leases and/or rights of use receivable |  | Trade and other receivable |
|  |  | (2 | ) |  |  | (79 | ) |  | Loans obtained |  | Borrowings |
|  |  | 146 |  |  |  | - |  |  | Others |  | Trade and other payables |
|  |  | (1 | ) |  |  | - |  |  | Management Fee |  | Trade and other payables |
|  |  | 19 |  |  |  | 27 |  |  | Reimbursement of expenses receivable |  | Trade and other receivable |
Total directors and others |  |  | 1,649 |  |  |  | (236 | ) |  |  |  |  |
Total at the end of the year |  |  | 3,197 |  |  |  | 3,968 |  |  |  |  |  |

(1) | Includes CAMSA, Avenida compras and Avenida Inc., Estudio Zang, Bergel & Viñes, Austral Gold, Fundación IRSA, Hamonet S.A., Museo de los Niños and BHN Vida S.A.

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The following is a summary of the results with related parties for the years ended June 30, 2021, 2020 and 2019:

Related party |  | June 30, 2021 |  |  | June 30, 2020 |  |  | June 30, 2019 |  |  | Description of transaction |
BACS |  |  | 78 |  |  |  | 77 |  |  |  | 81 |  |  | Leases and/or rights of use |
Manibil |  |  | - |  |  |  | - |  |  |  | 45 |  |  | Corporate services |
BHN Vida S.A |  |  | 15 |  |  |  | - |  |  |  | - |  |  | Leases and/or rights of use |
BHN Seguros Generales S.A. |  |  | 6 |  |  |  | - |  |  |  | - |  |  | Leases and/or rights of use |
Helmir |  |  | 96 |  |  |  | - |  |  |  | - |  |  | Financial operations |
Tarshop |  |  | - |  |  |  | - |  |  |  | 89 |  |  | Leases and/or rights of use |
|  |  | - |  |  |  | - |  |  |  | 2 |  |  | Commissions |
La Rural S.A. |  |  | (15 | ) |  |  | - |  |  |  | 56 |  |  | Leases and/or rights of use |
Other associates anf joint ventures |  |  | (3 | ) |  |  | 56 |  |  |  | (2 | ) |  | Financial operations |
|  |  | (8 | ) |  |  | 14 |  |  |  | 51 |  |  | Leases and/or rights of use |
|  |  | - |  |  |  | (197 | ) |  |  | 45 |  |  | Corporate services |
Total associates and joint ventures |  |  | 169 |  |  |  | (50 | ) |  |  | 367 |  |  |  |
Cresud |  |  | 36 |  |  |  | 29 |  |  |  | 56 |  |  | Leases and/or rights of use |
|  |  | (713 | ) |  |  | (704 | ) |  |  | (820 | ) |  | Corporate services |
|  |  | 329 |  |  |  | 336 |  |  |  | 56 |  |  | Financial operations |
Total parent company |  |  | (348 | ) |  |  | (339 | ) |  |  | (708 | ) |  |  |
Directors |  |  | (845 | ) |  |  | (613 | ) |  |  | (721 | ) |  | Fees and remunerations |
Senior Management |  |  | (44 | ) |  |  | (45 | ) |  |  | (66 | ) |  | Fees and remunerations |
Taaman |  |  | - |  |  |  | - |  |  |  | 69 |  |  | Corporate services |
Others (1) |  |  | (16 | ) |  |  | - |  |  |  | 2 |  |  | Leases and/or rights of use |
|  |  | (2 | ) |  |  | - |  |  |  | (2 | ) |  | Financial operations |
|  |  | (53 | ) |  |  | - |  |  |  | (2 | ) |  | Donations |
|  |  | - |  |  |  | (35 | ) |  |  | - |  |  | Fees and remuneration |
|  |  | (30 | ) |  |  | (44 | ) |  |  | - |  |  | Legal services |
Total others |  |  | (990 | ) |  |  | (737 | ) |  |  | (720 | ) |  |  |
Total at the end of the year |  |  | (1,169 | ) |  |  | (1,126 | ) |  |  | (1,061 | ) |  |  |

(1) | It includes Isaac Elsztain e Hijos, CAMSA, Hamonet S.A., Ramat Hanassi, Estudio Zang, Bergel & Viñes, and Fundación IRSA.

The following is a summary of the transactions with related parties for the years ended June 30, 2021 and 2020:

Related party |  | June 30, 2021 |  |  | June 30, 2020 |  |  | Description of the operation |
Condor |  |  | - |  |  |  | 48 |  |  | Dividends received |
Nuevo Puerto Santa Fe S.A. |  |  | - |  |  |  | 57 |  |  | Dividends received |
Shufersal |  |  | - |  |  |  | 601 |  |  | Dividends received |
Gav Yam |  |  | - |  |  |  | 2,004 |  |  | Dividends received |
Emco |  |  | - |  |  |  | 24 |  |  | Dividends received |
Total dividends received |  |  | - |  |  |  | 2,734 |  |  |  |
Cresud |  |  | (176 | ) |  |  | (539 | ) |  | Dividends granted |
Helmir |  |  | - |  |  |  | (33 | ) |  | Dividends granted |
Total dividends distribution |  |  | (176 | ) |  |  | (572 | ) |  |  |
Quality |  |  | (30 | ) |  |  | (71 | ) |  | Capital contributions |
Manibil |  |  | - |  |  |  | (131 | ) |  | Capital contributions |
IBC |  |  | - |  |  |  | (3,832 | ) |  | Capitalized loan |
Others (1) |  |  | (12 | ) |  |  | (24 | ) |  | Capital contributions |
Total capital contributions |  |  | (42 | ) |  |  | (4,058 | ) |  |  |
TGLT S.A. |  |  | - |  |  |  | 2,094 |  |  | Purchase and exchange of shares |
Total other transactions |  |  | - |  |  |  | 2,094 |  |  |  |

(1) | It includes Puerto Retiro S.A. and Gan Falah.

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31. Foreign currency assets and liabilities

Book amounts of foreign currency assets and liabilities are as follows:

Item / Currency (1) |  |  | Amount (2) |  |  | Peso exchange rate (3) |  |  | Total as of 06.30.21 |  |  | Total as of 06.30.20 |
Assets |  |  |  |  |  |  |  |  |  |  |  |
Trade and other receivables |  |  |  |  |  |  |  |  |  |  |  |
US Dollar |  |  | 34 |  |  |  | 95.52 |  |  |  | 3,250 |  |  |  | 4,529 |
Euros |  |  | - |  |  |  | 113.096 |  |  |  | 24 |  |  |  | 1,323 |
Receivables with related parties: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
US Dollar |  |  | 20 |  |  |  | 95.72 |  |  |  | 1,922 |  |  |  | 467 |
Total trade and other receivables |  |  |  |  |  |  |  |  |  |  | 5,196 |  |  |  | 6,319 |
Investments in financial assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
US Dollar |  |  | 7 |  |  |  | 95.52 |  |  |  | 675 |  |  |  | 5,412 |
Pounds |  |  | 1 |  |  |  | 131.877 |  |  |  | 100 |  |  |  | 117 |
New Israel Shekel |  |  | 21 |  |  |  | 29.356 |  |  |  | 610 |  |  |  | - |
Investments with related parties: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
US Dollar |  |  | 23 |  |  |  | 95.72 |  |  |  | 2,242 |  |  |  | 1,820 |
Total investments in financial assets |  |  |  |  |  |  |  |  |  |  | 3,627 |  |  |  | 7,349 |
Cash and cash equivalents |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
US Dollar |  |  | 11 |  |  |  | 95.52 |  |  |  | 1,054 |  |  |  | 19,553 |
Euros |  |  | - |  |  |  | 113.096 |  |  |  | 1 |  |  |  | 2,324 |
Total cash and cash equivalents |  |  |  |  |  |  |  |  |  |  | 1,055 |  |  |  | 21,877 |
Total Assets |  |  |  |  |  |  |  |  |  |  | 9,878 |  |  |  | 35,545 |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trade and other payables |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
US Dollar |  |  | 13 |  |  |  | 95.72 |  |  |  | 1,209 |  |  |  | 19,813 |
Euros |  |  | - |  |  |  | 113.572 |  |  |  | 32 |  |  |  | 458 |
Payables to related parties: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
US Dollar |  |  | 1 |  |  |  | 95.72 |  |  |  | 53 |  |  |  | - |
Total Trade and other payables |  |  |  |  |  |  |  |  |  |  | 1,294 |  |  |  | 20,271 |
Borrowings |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
US Dollar |  |  | 523 |  |  |  | 95.72 |  |  |  | 50,094 |  |  |  | 91,511 |
Borrowings with related parties |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
US Dollar |  |  | 15 |  |  |  | 95.72 |  |  |  | 1,455 |  |  |  | 529 |
Total Borrowings |  |  |  |  |  |  |  |  |  |  | 51,549 |  |  |  | 92,040 |
Derivative financial instruments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
US Dollar |  |  | 1 |  |  |  | 95.72 |  |  |  | 58 |  |  |  | 143 |
Total derivative financial instruments |  |  |  |  |  |  |  |  |  |  | 58 |  |  |  | 143 |
Lease liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
US Dollar |  |  | 8 |  |  |  | 95.72 |  |  |  | 782 |  |  |  | 12 |
Lease liabilities with related parties |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
US Dollar |  |  | - |  |  |  | 95.72 |  |  |  | 6 |  |  |  | - |
Total lease liabilities |  |  |  |  |  |  |  |  |  |  | 788 |  |  |  | 12 |
Total Liabilities |  |  |  |  |  |  |  |  |  |  | 53,689 |  |  |  | 112,466 |

(1) | Stated in millions of units in foreign currency. Considering foreign currencies those that differ from each Group’s functional currency at each year-end.
(2) | Exchange rate as of June 30, of each year according to Banco Nación Argentina records.
(3) | The Group uses derivative instruments as complement in order to reduce its exposure to exchange rate movements (see Note 14).

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32. Groups of assets and liabilities held for sale

As of June 30, 2020, the Group had certain assets and liabilities classified as held for sale. The following table shows the main ones:

|  | June 30, 2021 |  |  | June 30, 2020 (i) |
Property, plant and equipment |  |  | - |  |  |  | 53,650 |
Intangible assets |  |  | - |  |  |  | 2,047 |
Investments in associates |  |  | - |  |  |  | 336 |
Deferred income tax assets |  |  | - |  |  |  | 1,223 |
Trade and other receivables |  |  | - |  |  |  | 2,777 |
Cash and cash equivalents |  |  | - |  |  |  | 2,567 |
Total assets held-for-sale |  |  | - |  |  |  | 62,600 |
Trade and other payables |  |  | - |  |  |  | 14,909 |
Salaries and social security liabilities |  |  | - |  |  |  | 581 |
Employee benefits |  |  | - |  |  |  | 580 |
Deferred income tax liabilities |  |  | - |  |  |  | 2,933 |
Borrowings |  |  | - |  |  |  | 14,359 |
Total liabilities held-for-sale |  |  | - |  |  |  | 33,362 |
Total net assets held-for-sale |  |  | - |  |  |  | 29,238 |

(i) | Corresponds to investments in ISRAIR and ISPRO.

33. Results from discontinued operations

The results of discontinued operations include the operations of IDBD / DIC which were deconsolidated in the current year (see Note 4.E) and the results of the comparative fiscal years have been reclassified.

|  | June 30, 2021 |  |  | June 30, 2020 |  |  | June 30, 2019 |
Revenues |  |  | 37,844 |  |  |  | 155,544 |  |  |  | 149,726 |
Costs |  |  | (30,707 | ) |  |  | (111,519 | ) |  |  | (104,782 | )
Gross profit |  |  | 7,137 |  |  |  | 44,025 |  |  |  | 44,944 |
Net loss from fair value adjustment of investment properties |  |  | (28 | ) |  |  | (4,490 | ) |  |  | 7,333 |
General and administrative expenses |  |  | (4,355 | ) |  |  | (14,824 | ) |  |  | (13,721 | )
Selling expenses |  |  | (4,150 | ) |  |  | (20,308 | ) |  |  | (18,386 | )
Impairment of associates and joint ventures |  |  | - |  |  |  | (3,710 | ) |  |  | - |
Other operating results, net |  |  | 1,416 |  |  |  | 536 |  |  |  | 1,492 |
Profit from operations |  |  | 20 |  |  |  | 1,229 |  |  |  | 21,662 |
Share of profit of associates and joint ventures |  |  | 719 |  |  |  | 2,175 |  |  |  | 208 |
Profit before financial results and income tax |  |  | 739 |  |  |  | 3,404 |  |  |  | 21,870 |
Finance income |  |  | 526 |  |  |  | 2,022 |  |  |  | 3,031 |
Finance cost |  |  | (6,901 | ) |  |  | (25,576 | ) |  |  | (27,208 | )
Other financial results |  |  | 458 |  |  |  | (12,068 | ) |  |  | 2,892 |
Financial results, net |  |  | (5,917 | ) |  |  | (35,622 | ) |  |  | (21,285 | )
Loss before income tax |  |  | (5,178 | ) |  |  | (32,218 | ) |  |  | 585 |
Income tax |  |  | 277 |  |  |  | (252 | ) |  |  | (2,965 | )
Loss from operations that are discontinued |  |  | (4,901 | ) |  |  | (32,470 | ) |  |  | (2,380 | )
(Loss) / gain for loss of control |  |  | (4,022 | ) |  |  | 27,523 |  |  |  | - |
Loss from discontinued operations |  |  | (8,923 | ) |  |  | (4,947 | ) |  |  | (2,380 | )
(Loss) / profit for the year from discontinued operations attributable to: |  |  |  |  |  |  |  |  |  |  |  |
Equity holders of the parent |  |  | (7,050 | ) |  |  | (8,527 | ) |  |  | (6,169 | )
Non-controlling interest |  |  | (1,873 | ) |  |  | 3,580 |  |  |  | 3,789 |
Loss per share from discontinued operations attributable to equity holders of the parent: |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  | (11.98 | ) |  |  | (14.82 | ) |  |  | (10.73 | )
Diluted |  |  | (11.98 | ) |  |  | (14.82 | ) |  |  | (10.73 | )

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34. Other relevant events of the year

Purchase-sale bill of “Catalinas” building

On June 18, 2021, a purchase-sale bill was signed for the 12th floor and parking spaces located in the 2nd basement of the property called “Catalinas”, receiving an advanced payment for USD 2 million. The price of the transaction was USD 7. To date, possession has not been transferred, which is agreed no later than December 15, 2021.

Capital increase

On April 12, 2021, the Company announced the launch of its public offering of shares for up to 80 million shares (or its equivalent 8 million GDS) and 80 million warrants to subscribe for new common shares, to registered holders as of April 16, 2021. Each right corresponding to one share (or GDS) allowed its holder to subscribe 0.1382465082 new ordinary shares and receive free of charge an option with the right to subscribe 1 additional ordinary share in the future. The final subscription price for the new shares was ARS 58.35 or USD 0.36 and for the new GDS it was USD 3.60. The new shares, registered, of ARS 1 (one peso) of par value each and with the right to one vote per share gives the right to receive dividends under the same conditions as the current shares in circulation.

The 80,000,000 new shares (or its equivalent 8 million GDS) offered were totally subscribed.

Likewise, 80,000,000 options were issued that will entitle the holders through their exercise to acquire up to 80 million additional new shares. The exercise price of the warrants is USD 0.432. The warrants may be exercised quarterly from the 90th day of their issuance on the 17th to the 25th (inclusive) of the months of February, May, September, and November of each year on the business day prior to maturity and on the date of maturity (if dates are business days in the city of New York and in the Autonomous City of Buenos Aires) until their expiration 5 years from the date of issue.

The Company received all the funds in the amount of USD 28.8 and issued the new shares, increasing the capital stock to 658,676,460 shares.

Economic context in which the Group operates

The Company does business in a complex framework due to the macroeconomic conditions, whose main variables have recently shown high volatility, and also due to regulatory, social and political conditions, both at a national and international level.

Its operating income may be affected by the fluctuations in the inflation rate and in the exchange rate at which the peso is converted into other currencies, mainly the US dollar, the variations in interest rates, which have an impact on the cost of capital, the changes in governmental policies, capital controls and other local and international political or economic events.

In December 2019, a new coronavirus strain (SARS-COV-2), causing a severe acute respiratory syndrome (COVID-19), appeared in Wuhan, China. On March 11, 2020, the World Health Organization declared COVID-19 a pandemic. In response, countries have taken extraordinary actions intended to prevent the spread of the virus, including, travel bans, border shutdowns, closing of non-essential businesses, instructions to residents to practice social distancing and implementation of lockdowns, among others. The ongoing pandemic and these extraordinary governmental actions are affecting the worldwide economy and have rendered global financial markets highly volatile.

On March 3, 2020, the first case of COVID-19 was registered in the country and as of today, more than 5,000,000 cases of infections had been confirmed in Argentina, by virtue of which the Argentinian Government implemented a series of health measures of social, preventive, and mandatory lockdown at the national level with the closure of non-essential activities, including shopping malls, as well as the suspension of flights and border closures, for much of the year 2020. Since October 2020, a large part of the activities started to become more flexible, in line with a decrease in infections, although between April 16 and June 11, 2021, because of the sustained increase in the cases registered, the National Government established restrictions on night activity and the closure of shopping malls in Buenos Aires Metropolitan Area. As of the date of these financial statements, 100% of the shopping malls are operational.

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These measures have significantly affected Argentine companies, which have faced drops in income and the deterioration of their flow of payments. In this context, the Argentine Government announced several actions intended to tackle the financial crisis of the companies adversely affected by the COVID-19 pandemic. In addition to the stagnation of the Argentine economy, there is an international crisis caused by the COVID-19 pandemic. In this scenario, a strong contraction of the Argentine economy was evidenced.

At the local environment, the following circumstances may be noted:

| · | In May 2021, an indicator called “Monthly Estimator of Economic Activity” (“EMAE”) reported by the National Institute of Statistics and Censuses (“INDEC”), registered a variation of (13.6%) compared to the same month of 2020, and from (2.0%) compared to the previous month.
| · | The retail inflation reached 50.20% in the last 12 months. The market expectations survey prepared by the Central Bank in April 2021 called Relevamiento de Expectativas de Mercado (“REM”) forecasts that the retail inflation rate for December 2021 of 47.3% yoy. Analysts participating in the REM forecast a rebound in economic activity in 2021, reaching an economic growth of 6.4%.
| · | From July 2020 to June 2021, the argentine peso depreciated 35.9% compared to the US dollar at the average wholesale exchange rate quoted by Banco de la Nación Argentina. Given the exchange restrictions in force since August 2019, as of June 30, 2021 the exchange gap between the official peso/US dollar exchange rate and the peso/US dollar exchange rate offered in the black market is almost 77.5%. This has an impact on the level of economic activity and detrimentally affects the reserves of the of the Argentine Central Bank. In addition, the current foreign exchange restrictions or those that may be imposed in the future may impair the Company’s ability to access the Sole Free FX Market (Mercado Único Libre de Cambio or MULC) to purchase the currency required to meet its financial obligations.

COVID-19 Pandemic

As described above, the COVID-19 pandemic is adversely impacting both the global economy and the Argentine economy and the Group’s business. The current estimated impacts of the COVID-19 pandemic on the Company as of the date of these financial statements are established below.

| · | During the fourth quarter of fiscal year 2021, shopping malls in the Buenos Aires Metropolitan Area suspended their operations between April 16 and June 11, operating only those items considered essential such as pharmacies, supermarkets, and banks. The impact on income for the closing months due to the pandemic was 40.3% in fiscal year 2021.
| · | Regarding the offices, although most of the tenants continue to work from home, they are operational with strict safety and hygiene protocols. To today, we have registered a slight increase in vacancies, although we have not evidenced a deterioration in collections.
| · | La Rural, the Buenos Aires and Punta del Este Convention Centers and the Arena stadium, establishments that the Group owns directly or indirectly, were closed from March 20, 2020, to July 12, 2021, date from which the protocols for holding events, congresses and exhibitions were activated.
| · | The Libertador and Intercontinental hotels in the City of Buenos Aires have been operating since December 2020, although with low occupancy levels. The Llao Llao Resort, located in Bariloche, was able to operate during the quarter with average occupancy levels thanks to the domestic tourism.

The final scope of the Coronavirus outbreak and its impact on the country’s economy is still uncertain. However, although it has produced significant short-term effects, they are not expected to affect business continuity and its ability to meet its financial commitments for the next twelve months.

The Company is closely monitoring the situation and taking all necessary measures to preserve human life and the Group’s businesses.

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35. Subsequent events

Sale of real estate parcels in Hudson

On August 2, 2021, our subsidiary IRSA CP signed the bill for the sale of several parcels of the property called Casonas located in Hudson, Berazategui district. The price of the transaction was USD0.6.

Sale of Mariano Acosta Plot

On August 9, 2021, the sales ticket for Mariano Acosta Plot was signed for a total amount of USD 0.7. With the signing of the ticket, the amount of USD 0.5 was received and the remaining balance of USD 0.2 at the signing of the deed.

Sale of Merlo Plot

On August 9, 2021, the sales ticket for Merlo Plot was signed for a total amount of USD 0.7. With the signing of the ticket, the amount of USD 0.5 was received and the remaining balance of USD 0.2 at the signing of the deed.

Issuance of IRSA Non-convertible Notes

On August 26, 2021, the Company issued USD 58.1 Non-convertible Notes in the local market. The main characteristics of the issue are detailed below:

| · | Series XIII: denominated in USD and payable in ARS at the applicable exchange rate for USD 58.1 at a fixed rate of 3.9%, with semiannual payments plus. The principal will be paid in three installments, counted from the date of issue: the first one - equal to 25% of the par value of the notes - payable on the date that is 12 (twelve) months after the Issue, on August 26, 2023; the second one - equal to 25% of the par value of the notes - payable on the date that is 30 (thirty) months after the Issue, on February 26, 2024 and the third one - equal to 50% of the par value of the notes - payable on the relevant due date, i.e. July 26, 2024. Price of issuance was 100.0% of the nominal value.

The funds have been used mainly to refinance short-term liabilities.

Corporate reorganization process

On September 30, 2021 the Company’s Board of Directors has approved the beginning of the corporate reorganization process in the terms of article 82 and sbqs. of the General Companies Law No. 19,550, the Income Tax Law No. 20,628, amendments and regulations, CNV’s Rules and the Listing Regulations of BYMA, by which IRSA, acting as the absorbing company, will merge by absorption with IRSA Propiedades Comerciales S.A. (“IRSA PC”), as the absorbed company. In this regard, the Board of Directors has approved: (i) the individual and special merger financial statements as of June 30, 2021; (ii) the consolidated and special merger financial statements as of June 30, 2021; (iii) the subscription of the Prior Merger Agreement between both companies and (iv) establish the effective date of reorganization on July 1, 2021.

The merger is subject to the approval of the shareholders’ meeting of both companies, which will be held once both companies have the administrative approval of the United States Securities and Exchange Commission, an entity to which they are subject because both companies’ shares are listed in markets that operate in said jurisdiction.

Likewise, and within the framework of the reorganization process, the Board of Directors has approved the exchange ratio, which has been established at 1.40 IRSA shares for each IRSA PC share, which is equivalent to 0.56 IRSA GDS for each ADS of IRSA PC.

Condor Hospitality Trust agreement

On September 23, 2021, Condor Hospitality Trust, Inc. announced an agreement with affiliates of Blackstone Real Estate Partners to sell its entire portfolio of hotels in a US$ 305 million transaction. This is an all cash transaction without the assumption of any existing debt. Completion of the transaction, which is expected to occur in the fourth quarter of 2021, is subject to customary closing conditions, including the approval of the Condor’s shareholders.

Condor also announced that its Board of Directors has unanimously adopted a Plan of Liquidation and Dissolution (the “Plan of Liquidation”). The Plan of Liquidation contemplates an orderly wind down of the Company’s business affairs. Following the closing of the sale of the hotel portfolio and the payment of outstanding liabilities, along with the taking of other actions specified in the Plan of Liquidation, including reserving for certain contingent liabilities and claims, the Company intends to distribute certain net proceeds from the sale of the hotel portfolio to the Condor’s shareholders in one or more liquidating distribution installments. The implementation of the Plan of Liquidation is conditioned on obtaining approval of the Condor’s shareholders.

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CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2021

NEW LIPSTICK, LLC AND SUBSIDIARY

TABLE OF CONTENTS

INDEPENDENT AUDITOR’S REPORT |  | F-84 |
CONSOLIDATED FINANCIAL STATEMENTS |  |  |
Consolidated Balance Sheet |  | F-85 |
Consolidated Statement of Operations |  | F-86 |
Consolidated Statement of Changes in Members’ Deficit |  | F-87 |
Consolidated Statement of Cash Florw |  | F-88 |
Notes to Consolidated Financial Statements |  | F-89 – F-92 |
SUPPLEMENTAL INFORMATION |  | F-93 |
Consolidating Balance Sheet |  | F-94 |
Consolidating Statement of Operations |  | F-95 |

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INDEPENDENT AUDITOR’S REPORT

To the Members of

New Lipstick, LLC

Report on the Consolidated Financial Statements

We have audited the accompanying consolidated financial statements of New Lipstick, LLC and Subsidiary (a limited liability company) (the ‘Company’) as of June 30, 2020, which comprise the consolidated balance sheet and the consolidated statements of operations, changes in members’ deficit and cash flow for the year then ended, and the related notes to the consolidated financial statements.

Responsibilities of Management for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of June 30, 2020, and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter - Termination of the ground lease and abandoning of the administration of the building

We draw attention to Notes 5 and 6 of the consolidated financial statements which describe the effects of the termination of the ground lease and the abandonment of the administration of the building that occurred subsequent to the date of the accompanying consolidated financial statements.

Our opinion is not modified in respect of the above mentioned matters.

Other matters

| - | As of June 30, 2020, the Company had a members’ deficit of $37,984,853. This deficit relates to the notes payable to the members described in Note 4.
| - | The supplemental information presented on pages 13-14 is for additional analysis and is not a required part of the consolidated financial statements. Such information has not been subject to the audit procedures applied in the audit of the consolidated financial statements, and accordingly, we do not express an opinion or provide any assurance on it.

October 30, 2020

(Partner)
Noemí I. Cohn

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NEW LIPSTICK, LLC AND SUBSIDIARY

CONSOLIDATED BALANCE SHEET

JUNE 30, 2021

|  | 06/30/2021 (Unaudited) |  |  | 06/30/2020 (Audited) |
ASSETS |  |  |  |  |  |
Cash and cash equivalents |  | $ | 1,672,952 |  |  | $ | 6,132,232 |
Tenant receivables, net |  |  | - |  |  |  | 48,794 |
Due from related party |  |  | 5,047,367 |  |  |  | 2,188,579 |
TOTAL ASSETS |  | $ | 6,720,319 |  |  | $ | 8,369,605 |
LIABILITIES AND MEMBERS' DEFICIT |  |  |  |  |  |  |  |
LIABILITIES |  |  |  |  |  |  |  |
Accounts payable and accrued expenses |  | $ | 1,961,534 |  |  | $ | 1,788,955 |
Notes payable to members |  |  | 45,143,841 |  |  |  | 44,275,534 |
Deferred revenue |  |  | - |  |  |  | 48,794 |
Due to related parties |  |  | 241,174 |  |  |  | 241,175 |
TOTAL LIABILITIES |  |  | 47,346,549 |  |  |  | 46,354,458 |
MEMBERS' DEFICIT |  |  | (40,626,230 | ) |  |  | (37,984,853 | )
TOTAL LIABILITIES AND MEMBERS' DEFICIT |  | $ | 6,720,319 |  |  | $ | 8,369,605 |

The accompanying notes are an integral part of these consolidated financial statements.

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NEW LIPSTICK, LLC AND SUBSIDIARY

CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED JUNE 30, 2021

|  | 06/30/2021 (Unaudited) |  |  | 06/30/2020 (Audited) |  |  | 06/30/2019 (Unaudited) |
REVENUES: |  |  |  |  |  |  |  |  |
Base rents |  | $ | - |  |  | $ | 42,376,323 |  |  | $ | 42,591,305 |
Tenant reimbursements |  |  | 468,126 |  |  |  | 8,868,733 |  |  |  | 7,851,478 |
Other rental revenue |  |  | 455 |  |  |  | 252,478 |  |  |  | 385,239 |
Interest income |  |  | 79,231 |  |  |  | - |  |  |  | - |
TOTAL REVENUES |  |  | 547,812 |  |  |  | 51,497,534 |  |  |  | 50,828,022 |
EXPENSES: |  |  |  |  |  |  |  |  |  |  |  |
Real estate taxes |  |  | 1,071,339 |  |  |  | 12,829,755 |  |  |  | 12,121,647 |
Utilities |  |  | 93,915 |  |  |  | 2,335,535 |  |  |  | 2,393,263 |
Janitorial |  |  | 152,054 |  |  |  | 1,819,490 |  |  |  | 1,813,184 |
Insurance |  |  | - |  |  |  | 380,405 |  |  |  | 344,508 |
Repairs and maintenance |  |  | - |  |  |  | 2,106,485 |  |  |  | 1,379,744 |
Security |  |  | 91,885 |  |  |  | 1,228,882 |  |  |  | 1,149,765 |
Goodwill |  |  | - |  |  |  | - |  |  |  | 5,422,615 |
General and administrative |  |  | 249,428 |  |  |  | 3,868,430 |  |  |  | 3,067,133 |
Management fees |  |  | 96,917 |  |  |  | 1,232,949 |  |  |  | 1,120,813 |
Elevator |  |  | - |  |  |  | 328,939 |  |  |  | 364,581 |
HVAC |  |  | - |  |  |  | 64,748 |  |  |  | 85,035 |
Ground rent |  |  | - |  |  |  | 42,597,980 |  |  |  | 45,895,545 |
Interest expense |  |  | 863,307 |  |  |  | 2,359,235 |  |  |  | 3,890,401 |
Depreciation and amortization |  |  | - |  |  |  | 5,226,229 |  |  |  | 5,520,008 |
Amortization of lease intangibles |  |  | - |  |  |  | 3,054,196 |  |  |  | 3,097,661 |
TOTAL EXPENSES |  |  | 2,618,845 |  |  |  | 79,433,258 |  |  |  | 87,665,903 |
OTHER (LOSS) / GAIN |  |  |  |  |  |  |  |  |  |  |  |
Gain on debt forgiveness |  |  | - |  |  |  | 40,196,070 |  |  |  | - |
(Loss) / Gain due to cancelation of ground lease and loss of control over the building |  |  | (570,344 | ) |  |  | 164,808,338 |  |  |  | - |
NET (LOSS) / GAIN |  | $ | (2,641,377 | ) |  | $ | 177,068,684 |  |  | $ | (36,837,881 | )

The accompanying notes are an integral part of these consolidated financial statements.

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NEW LIPSTICK, LLC AND SUBSIDIARY

CONSOLIDATED STATEMENT OF CHANGES IN MEMBERS’ DEFICIT

FOR THE YEAR ENDED JUNE 30, 2021

Members' deficit - July 1, 2018 (Unaudited) |  | $ | (178,265,656 | )
Capital contribution |  |  | 50,000 |
Net loss |  |  | (36,837,881 | )
Members' deficit - June 30, 2019 (Unaudited) |  | $ | (215,053,537 | )
Net Gain |  |  | 177,068,684 |
Members' deficit - June 30, 2020 (Audited) |  | $ | (37,984,853 | )
Net loss |  |  | (2,641,377 | )
Members' deficit - June 30, 2021 (Unaudited) |  | $ | (40,626,230 | )

The accompanying notes are an integral part of these consolidated financial statements.

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NEW LIPSTICK, LLC AND SUBSIDIARY

CONSOLIDATED STATEMENT OF CASH FLOW

FOR THE YEAR ENDED JUNE 30, 2021

|  | 06/30/2021 (Unaudited) |  |  | 06/30/2020 (Audited) |  |  | 06/30/2019 (Unaudited) |
CASH FLOWS FROM OPERATING ACTIVITIES: |  |  |  |  |  |  |  |  |
Net (loss) / gain |  | $ | (2,641,377 | ) |  | $ | 177,068,684 |  |  | $ | (36,837,881 | )
Adjustments for: |  |  |  |  |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | - |  |  |  | 5,226,229 |  |  |  | 5,726,461 |
Deferred rent receivable |  |  | - |  |  |  | - |  |  |  | 1,610,861 |
Amortization of above market leases |  |  | - |  |  |  | - |  |  |  | 1,407,363 |
Accretion of below market leases |  |  | - |  |  |  | - |  |  |  | (2,363,408 | )
Accretion of above market ground lease |  |  | - |  |  |  | - |  |  |  | (437,809 | )
Amortization of lease intangible assets |  |  | - |  |  |  | 3,054,196 |  |  |  | (3,097,661 | )
Amortization of loan costs |  |  | - |  |  |  | - |  |  |  | 231,355 |
Gain on debt forgiveness |  |  | - |  |  |  | (40,196,070 | ) |  |  | - |
(Loss) / Gain due to cancelation of ground lease and loss of control over the building |  |  | 570,344 |  |  |  | (164,808,338 | ) |  |  | - |
Interest costs |  |  | 863,307 |  |  |  | 1,370,796 |  |  |  | - |
Write-off of tenants receivable |  |  | - |  |  |  | (727,423 | ) |  |  | - |
Goodwill |  |  | - |  |  |  | - |  |  |  | 5,422,615 |
Changes in operating assets and liabilities: |  |  | - |  |  |  | - |  |  |  | - |
Restricted cash |  |  | - |  |  |  | 3,711,128 |  |  |  | - |
Tenant receivables, net |  |  | 48,794 |  |  |  | 1,039,907 |  |  |  | 3,265 |
Receivables from related party |  |  | (2,858,788 | ) |  |  | (2,068,305 | ) |  |  | - |
Prepaid expenses and other assets |  |  | - |  |  |  | 6,665,497 |  |  |  | (289,946 | )
Lease intangibles, net |  |  | (48,794 | ) |  |  | - |  |  |  | 6,032,359 |
Accounts payable and accrued expenses |  |  | (392,766 | ) |  |  | 9,628,400 |  |  |  | (918,623 | )
Deferred ground rent |  |  | (4,460,119 | ) |  |  | - |  |  |  | 26,678,815 |
Tenant security deposits |  |  | - |  |  |  | - |  |  |  | (52,174 | )
Deferred revenue |  |  | - |  |  |  | - |  |  |  | 246,138 |
Deferred rent receivable |  |  | - |  |  |  | 7,871,348 |  |  |  | - |
Lease intangibles, net |  |  | - |  |  |  | 8,435,334 |  |  |  | - |
TOTAL ADJUSTMENTS |  |  | (1,817,903 | ) |  |  | (160,797,301 | ) |  |  | 40,199,611 |
NET CASH (USED IN) / PROVIDED BY OPERATING ACTIVITIES |  |  | (4,459,280 | ) |  |  | 16,271,383 |  |  |  | 3,361,730 |
CASH FLOWS FROM INVESTING ACTIVITIES: |  |  |  |  |  |  |  |  |  |  |  |
Capital expenditures |  |  | - |  |  |  | - |  |  |  | (35,001 | )
Repayment on notes payable |  |  | - |  |  |  | (11,000,000 | ) |  |  | - |
NET CASH USED IN INVESTING ACTIVITIES |  |  | - |  |  |  | (11,000,000 | ) |  |  | (35,001 | )
CASH FLOWS FROM FINANCING ACTIVITIES: |  |  |  |  |  |  |  |  |  |  |  |
Payments on debt issuance costs |  |  | - |  |  |  | - |  |  |  | (298,295 | )
Contribution from Members |  |  | - |  |  |  | - |  |  |  | 50,000 |
Net change in restricted cash |  |  | - |  |  |  | - |  |  |  | 265,499 |
Repayments on notes payable |  |  | - |  |  |  | - |  |  |  | (5,989,372 | )
Borrowings from shareholders |  |  | - |  |  |  | - |  |  |  | 1,771,768 |
NET CASH USED IN FINANCING ACTIVITIES |  |  | - |  |  |  | - |  |  |  | (4,200,400 | )
NET (DECREASE) / INCREASE IN CASH AND CASH EQUIVALENTS |  |  | (4,459,280 | ) |  |  | 5,271,383 |  |  |  | (873,671 | )
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR |  |  | 6,132,232 |  |  |  | 860,849 |  |  |  | 1,734,520 |
CASH AND CASH EQUIVALENTS AT END OF YEAR |  | $ | 1,672,952 |  |  | $ | 6,132,232 |  |  | $ | 860,849 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |  |  |  |  |  |  |  |  |  |  |  |
Cash paid for interest |  |  | - |  |  |  | - |  |  | $ | 4,126,052 |

The accompanying notes are an integral part of these consolidated financial statements.

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NEW LIPSTICK, LLC AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2021

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

New Lipstick, LLC (the “Company”) was organized as a Delaware limited liability company and commenced operations on November 3, 2010. The Company was formed among IRSA International, LLC (“IRSA”), Marciano Investment Group, LLC (“Marciano”), Avi Chicouri (“Avi”), Par Holdings, LLC (“Par”), and Armenonville, collectively (the “Members”). On December 15, 2010, Armenonville assigned 100 percent of its membership interest to Lomas Urbanas S.A. IRSA is a wholly-owned subsidiary of Tyrus S.A. (“TYRUS”), a wholly-owned subsidiary of IRSA Inversiones y Representaciones Sociedad Anonima, a company whose shares are listed on the Buenos Aires and New York Stock exchanges. The Company was formed in order to acquire 100% interest in Metropolitan 885 Third Avenue Leasehold LLC (“Metro 885”), its wholly-owned subsidiary.

Metro 885 was organized for the purpose of acquiring and operating a 34 story class A office tower more commonly known as the Lipstick Building, located at 885 Third Avenue in New York (the “Property”). Metro 885 leased the land which contains approximately 28,000 square feet. On July 9, 2007, the Company acquired the Property. The Property contains approximately 635,800 square feet of rentable space, consisting of rental and office spaces.

On August 7, 2020, as a result of negotiations initiated in the context of the increase in the local levy from May 2020 established by the lease itself (hereinafter "Ground Lease"), signed an agreement with the owner of the Ground Lease in which the relationship is terminated and the lease is terminated, leaving the building management. For this reason, Metropolitan preceded eliminating as of June 30, 2020, the liability it had associated with the ground lease, as well as all the assets and liabilities associated with the building and the operation of the administration. The net effect amounted to $ 0.5 million that is included within ‘Other loss’ in the consolidated Statement of Operations as of June 30, 2021.

Additionally to this, at June 30, 2020, the Company:

| · | Reported that it has decided to stop facing the cost of renting land (Ground Lease) where the Lipstick Building is located in New York City, handing over the management of the property;
| · | Signed an agreement with the owner of the Ground Lease to terminate the commercial relationship, leaving the administration of the building. For this reason, Metropolitan derecognised as of June 30, 2020, the liability associated with the ground lease, as well as all the assets and liabilities associated with the building and the operation of the administration.

Pursuant to such agreement, Metropolitan was fully released from liability except for (i) claims for liabilities prior to June 1, 2020, from those persons who performed works or rendered services in the Building or for Metropolitan and (ii) claims from persons who had an accident in the property after August 7, 2020.

The Company operates under the guidelines of an Operating Agreement (the “Agreement”) entered into by the Members on November 15, 2010. The Company has adopted a fiscal year end of June 30. The manager of the Company is Lipstick Management, LLC (“LM”), a company affiliated with IRSA.

The Agreement calls for Class A and Class B Members’, Class A Members are IRSA, Marciano and Lomas Urbanas S.A. and Class B members are Avi and PAR.

Class B Membership interests of any Class B Member shall be automatically converted, in whole and not in part, into an equal number of Class A Membership interests on the earlier to occur of the date on which LM certifies that all unreturned additional Class A capital contributions and all unreturned Class A capital contributions have been reduced to zero.

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NEW LIPSTICK, LLC AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2021

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Organization (continued)

Any Class A Member, as defined in the Agreement, may transfer, directly or indirectly, any or all of its percentage interest as a Member in the Company to an unaffiliated third party, but the offering member must first offer the right of first offer (“ROFO”) to each of the Class A members by written notice specifying the cash price and the other terms and conditions of the offer. Upon receipt of the ROFO notice, each of the offeree members has the right, exercisable in ten (10) days, to accept or decline the offer.

The Company shall continue perpetually until dissolution, liquidation or termination. The liability of the members of the Company is limited to the members’ total contribution, plus any amounts guaranteed by the members.

The terms of the Agreement provide for initial capital contributions and percentage interests as follows:

|  | Percentage of Ownership |  |  | Initial Capital Contributions |
IRSA International, LLC |  |  | 49.0 | % |  |  | 15,417,925 |
Marciano Investment Group, LLC |  |  | 42.0 | % |  |  | 13,215,365 |
Lomas Urbanes S.A. |  |  | 2.27 | % |  |  | 714,259 |
Avi Chicouri |  |  | 3.07 | % |  |  | - |
Par Holdings, LLC |  |  | 3.66 | % |  |  | - |
Total |  |  | 100.00 | % |  |  | 29,347,549 |

In accordance with the Agreement, the members may be required to make additional capital contributions which are reasonably related to the operations and/or leasing of the Property and its activities. For the year ended June 30, 2021, there were no contributions made by any of the members.

Distributions of capital will be made to the Members at the times, and in aggregated amounts determined by the Board of Directors of the Company. There were no distributions for the year ended June 30, 2021.

The Company’s profits and losses are allocated to the members.

Principles of Consolidation

The consolidated financial statements include the accounts of New Lipstick, LLC and its wholly owned subsidiary, Metro 885, collectively referred to as the “Company”. All significant intercompany balances and transactions have been eliminated in consolidation.

Basis of Preparation

The Company prepares its consolidated financial statements on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Use of Estimates

To prepare consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ significantly from those estimates.

Cash and Cash Equivalents

The Company considers highly liquid investments purchased with maturities of three months or less upon acquisition to be cash equivalents

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NEW LIPSTICK, LLC AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2021

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Concentration of Credit Risk

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash deposits in excess of the Federal Deposit Insurance Corporation insured limit of $250,000. As at June 30, 2021 cash deposits exceeded these insured limits.

Revenue Recognition

The Company receives reimbursements from tenants for certain costs as provided for in the lease agreements. These costs include real estate taxes, utilities, insurance, common area maintenance and other recoverable costs in excess of a base year amount. The reimbursements are recognized when the tenants are billed.

Income Taxes

The Company is treated as a partnership for federal income tax purposes and, accordingly, generally would not incur income taxes or have any unrecognized tax benefits. Instead, its earnings and losses are included in the personal tax returns of the members and taxed depending on the members’ personal tax situation. As a result, the consolidated financial statements do not reflect a provision for federal income taxes. The Company is no longer subject to U.S. Federal examinations by tax authorities for years before 2015.

The Company recognizes and measures tax positions taken or expected to be taken in its tax return based on their technical merit and assesses the likelihood that the positions will be sustained upon examination based on the facts, circumstances and information available at the end of each period. Interest and penalties on tax liabilities, if any, would be recorded in interest expense and other non-interest expense, respectively.

2. RELATED PARTY TRANSACTIONS

Other Related Party Transactions

At June 30, 2021 the Company is owed the following balances from the following related parties for expenses paid on their behalf.

Due from related party: |  |  |
IRSA International LLC |  | $ | 2,231,712 |
Efanur S.A. |  |  | 2,815,655 |
|  | $ | 5,047,367 |

Additionally, at June 30,2021, the amounts listed below represent expenses paid by the Company on behalf of related companies, which will be reimbursed by related companies.

Due to related parties: |  |  |
IRSA International LLC |  | $ | 300 |
IRSA Inversiones y Representaciones |  |  |  |
Sociedad Anonima |  |  | 240,874 |
|  | $ | 241,174 |

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NEW LIPSTICK, LLC AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2021

3. NOTES PAYABLE TO MEMBERS

On August 15, 2017, the Company entered into notes payable with two Members, IRSA International, LLC and Marciano Investment Group, LLC. The notes payable are for the totalamount of $40,000,000, and originally matured on August 15, 2019, but was extended without a specif date but with the same terms.. The notes bear interest at LIBOR plus 200 basis points (2.1005% at June 30, 2021). Interest expense related to these notes was approximately $863,000 for the year ended June 30,2021. There were no principal payments during the year ended June 30, 2021.

As of June 30, 2021, the balance of the notes including accrued interest amounted to approximately $45,144,000. Proceeds were contributed to the Company’s wholly owned subsidiary.

4. COMMITMENTS AND CONTINGENCIES

Litigation

The Company, from time to time, is involved in litigation arising during the ordinary course of business. Based on currently available information, management believes that the resolution of any potential claims will not have a material adverse effect on the Company’s consolidated operating results or financial position.

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SUPPLEMENTAL INFORMATION

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NEW LIPSTICK, LLC AND SUBSIDIARY

CONSOLIDATED BALANCE SHEET

JUNE 30, 2021

|  | Metro 885 |  |  | New Lipstick |  |  | Consolidating Entries |  |  | Totals |
ASSETS |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 1,668,446 |  |  | $ | 4,506 |  |  | $ | - |  |  | $ | 1,672,952 |
Investment in Metro 885 |  |  | - |  |  |  | 4,638,505 |  |  |  | (4,638,505 | ) |  |  | - |
Due from related party |  |  | 4,927,093 |  |  |  | 120,274 |  |  |  | - |  |  |  | 5,047,367 |
TOTAL ASSETS |  | $ | 6,595,539 |  |  | $ | 4,763,285 |  |  | $ | (4,638,505 | ) |  | $ | 6,720,319 |
LIABILITIES AND MEMBERS' DEFICIT |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Accounts payable and accrued expenses |  | $ | 1,957,034 |  |  | $ | 4,500 |  |  | $ | - |  |  | $ | 1,961,534 |
Notes payable to related parties |  |  | - |  |  |  | 45,143,841 |  |  |  | - |  |  |  | 45,143,841 |
Due to related parties |  |  | - |  |  |  | 241,174 |  |  |  | - |  |  |  | 241,174 |
TOTAL LIABILITIES |  |  | 1,957,034 |  |  |  | 45,389,515 |  |  |  | - |  |  |  | 47,346,549 |
MEMBERS' DEFICIT |  |  | 4,638,505 |  |  |  | (40,626,230 | ) |  |  | (4,638,505 | ) |  |  | (40,626,230 | )
TOTAL LIABILITIES AND MEMBERS' DEFICIT |  | $ | 6,595,539 |  |  | $ | 4,763,285 |  |  | $ | (4,638,505 | ) |  | $ | 6,720,319 |

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NEW LIPSTICK, LLC AND SUBSIDIARY

CONSOLIDATED STATEMENT OF OPERATIONS

JUNE 30, 2021

|  | Metro 885 |  |  | New Lipstick |  |  | Consolidating Entries |  |  | Totals |
REVENUES: |  |  |  |  |  |  |  |  |  |  |  |
Tenant reimbursements |  | $ | 468,126 |  |  |  |  |  |  |  |  | $ | 468,126 |
Other rental revenue |  |  | 455 |  |  |  | - |  |  |  | - |  |  |  | 455 |
Interest income |  |  | 79,231 |  |  |  |  |  |  |  |  |  |  |  | 79,231 |
Investment loss |  |  | - |  |  |  | (1,769,412 | ) |  |  | (1,769,412 | ) |  |  | - |
TOTAL REVENUES |  |  | 547,812 |  |  |  | (1,769,412 | ) |  |  | (1,769,412 | ) |  |  | 547,812 |
EXPENSES: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate taxes |  |  | 1,071,339 |  |  |  | - |  |  |  | - |  |  |  | 1,071,339 |
Utilities |  |  | 93,915 |  |  |  | - |  |  |  | - |  |  |  | 93,915 |
Janitorial |  |  | 152,054 |  |  |  | - |  |  |  | - |  |  |  | 152,054 |
Security |  |  | 91,885 |  |  |  | - |  |  |  | - |  |  |  | 91,885 |
General and administrative |  |  | 240,770 |  |  |  | 8,658 |  |  |  | - |  |  |  | 249,428 |
Management fees |  |  | 96,917 |  |  |  | - |  |  |  | - |  |  |  | 96,917 |
Interest expense |  |  | - |  |  |  | 863,307 |  |  |  | - |  |  |  | 863,307 |
TOTAL EXPENSES |  |  | 1,746,880 |  |  |  | 871,965 |  |  |  | - |  |  |  | 2,618,845 |
OTHER INCOME |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Management quitment |  |  | (570,344 | ) |  |  |  |  |  |  |  |  |  |  | (570,344 | )
NET LOSS |  | $ | (1,769,412 | ) |  | $ | (2,641,377 | ) |  | $ | (1,769,412 | ) |  | $ | (2,641,377 | )

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