6-K 1 a6kirsa.htm FORM 6-K a6kirsa
 
 
 
 
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
Unaudited Condensed Interim Consolidated Financial Statements as of September 30, 2021 and for the three-month period ended as of that date, presented comparatively
 
 
 
 
 
 
 
 
 
Legal information
 
 
Denomination: IRSA Inversiones y Representaciones Sociedad Anónima.
 
Fiscal year N°: 79, beginning on July 1st, 2021.
 
Legal address: 261 Carlos Della Paolera St., 9th floor, Autonomous City of Buenos Aires, Argentina.
 
Company activity: Real estate investment and development.
 
Date of registration of the by-laws in the Public Registry of Commerce: June 23, 1943.
 
Date of registration of last amendment of the by-laws in the Public Registry of Commerce: General Ordinary and Extraordinary Shareholders’ Meeting held on December 12, 2019 and registered in the Superintendence on October 13,2020 with the number 9896, Book 1200 Volume – of Joint Stock Companies.
 
Expiration of the Company’s by-laws: April 5, 2043.
 
Registration number with the Superintendence: 213,036.
 
Capital: 658,707,201 shares.
 
Common Stock subscribed, issued and paid up nominal value (in millions of ARS): 659.
 
Parent Company: Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria
(Cresud S.A.C.I.F. y A.).
 
Legal Address: 261 Carlos Della Paolera St., 9th floor, Autonomous City of Buenos Aires, Argentina.
 
Main activity: Real estate, agricultural, commercial and financial activities.
 
Direct and indirect interest of the Parent Company on the capital stock: 408,746,837 common shares.
 
Percentage of votes of the Parent Company (direct and indirect interest) on the shareholders’ equity: 62.22% (1).
 
 
Type of stock
CAPITAL STATUS
Shares authorized for Public Offering (2)
Subscribed, issued and paid up nominal value
(in millions of Pesos)
Common stock with a face value of ARS 1 per share and entitled to 1 vote each
658,707,201
659
 
(1) For computation purposes, treasury shares have been subtracted.
(2) Company not included in the Optional Statutory System of Public Offer of Compulsory Acquisition.
 
 
 
 
Index
 
Glossary 
 
1
Unaudited Condensed Interim Consolidated Statements of Financial Position                                                                                                                              
 
2
Unaudited Condensed Interim Consolidated Statements of Income and Other Comprehensive Income
 
3
Unaudited Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity
 
4
Unaudited Condensed Interim Consolidated Statements of Cash Flows                                                                                                                              
 
6
Notes to the Unaudited Condensed Interim Consolidated Financial Statements:
 
 
Note 1 – The Group’s business and general information 
 
7
Note 2 – Summary of significant accounting policies 
 
7
Note 3 – Seasonal effects on operations 
 
8
Note 4 – Acquisitions and disposals 
 
8
Note 5 – Financial risk management and fair value estimates 
 
10
Note 6 – Segment information 
 
10
Note 7 – Investments in associates and joint ventures 
 
12
Note 8 – Investment properties 
 
13
Note 9 – Property, plant and equipment 
 
15
Note 10 – Trading properties 
 
15
Note 11 – Intangible assets 
 
16
Note 12 – Right-of-use assets 
 
16
Note 13 – Financial instruments by category 
 
17
Note 14 – Trade and other receivables 
 
19
Note 15 – Cash flow information 
 
19
Note 16 – Trade and other payables 
 
20
Note 17 – Borrowings 
 
20
Note 18 – Provisions 
 
21
Note 19 – Taxes 
 
21
Note 20 – Revenues 
 
22
Note 21 – Expenses by nature 
 
22
Note 22 – Cost of goods sold and services provided 
 
23
Note 23 – Other operating results, net 
 
23
Note 24 – Financial results, net 
 
23
Note 25 – Related party transactions 
 
24
Note 26 – CNV General Resolution N° 622 
 
26
Note 27 – Foreign currency assets and liabilities 
 
26
Note 28 – Results from discontinued operations 
 
27
Note 29 – Other significant events of the period 
 
27
Note 30 – Subsequent Events 
 
29
 
 
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 Financial Statements.
 
Terms
 
Definitions
BACS
 
Banco de Crédito y Securitización S.A.
BHSA
 
Banco Hipotecario S.A.
Clal
 
Clal Holdings Insurance Enterprises Ltd.
CNV
 
Securities Exchange Commission
CPF
 
Collective Promotion Funds
Condor
 
Condor Hospitality Trust Inc.
Cresud
 
Cresud S.A.C.I.F. y A.
DIC
 
Discount Investment Corporation Ltd.
Efanur
 
Efanur S.A.
Financial Statements
 
Unaudited Condensed Interim Consolidated Financial Statements
Annual Financial Statements
 
Consolidated Financial Statements as of June 30, 2019
HASAU
 
Hoteles Argentinos S.A.U.
IAS
 
International Accounting Standards
IASB
 
International Accounting Standards Board
IDBD
 
IDB Development Corporation Ltd.
IFRS
 
International Financial Reporting Standards
IRSA, The Company”, “Us”, “We”
 
IRSA Inversiones y Representaciones Sociedad Anónima
IRSA CP
 
IRSA Propiedades Comerciales S.A.
MPIT
 
Minimum presumed income tax
NCN
 
Non-convertible notes
New Lipstick
 
New Lipstick LLC
NIS
 
New Israeli Shekel
Quality
 
Quality Invest S.A.
Shufersal
 
Shufersal Ltd.
TGLT
 
TGLT S.A.
Tyrus
 
Tyrus S.A.
 
 
 
1
IRSA Inversiones y Representaciones Sociedad Anónima
 
Unaudited Condensed Interim Consolidated Statements of Financial Position
as of September 30, 2021 and June 30, 2021
(All amounts in millions, except otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina
 
 
 
Note
  09.30.2021 
  06.30.2021 
ASSETS
 
    
    
Non-current assets
 
    
    
Investment properties
8
  193,895 
  200,154 
Property, plant and equipment
9
  4,521 
  4,531 
Trading properties
10, 22
  1,803 
  1,797 
Intangible assets
11
  2,480 
  2,623 
Right-of-use assets
12
  871 
  886 
Investments in associates and joint ventures
7
  13,616 
  13,294 
Deferred income tax assets
19
  560 
  487 
Income tax and MPIT credit
 
  28 
  33 
Trade and other receivables
14
  3,339 
  3,111 
Investments in financial assets
13
  683 
  1,331 
Total non-current assets
 
  221,796 
  228,247 
Current assets
 
    
    
Trading properties
10, 22
  125 
  125 
Inventories
22
  76 
  79 
Income tax and MPIT credit
 
  153 
  180 
Trade and other receivables
14
  9,302 
  9,262 
Investments in financial assets
13
  3,499 
  3,460 
Cash and cash equivalents
13
  2,153 
  2,110 
Total current assets
 
  15,308 
  15,216 
TOTAL ASSETS
 
  237,104 
  243,463 
SHAREHOLDERS’ EQUITY
 
    
    
Shareholders' equity attributable to equity holders of the parent (according to corresponding statement)
 
  66,801 
  67,572 
Non-controlling interest
 
  22,423 
  22,831 
TOTAL SHAREHOLDERS’ EQUITY
 
  89,224 
  90,403 
LIABILITIES
 
    
    
Non-current liabilities
 
    
    
Borrowings
17
  51,226 
  51,061 
Lease liabilities
 
  830 
  932 
Deferred income tax liabilities
19
  71,311 
  75,130 
Trade and other payables
16
  1,702 
  1,516 
Income tax and MPIT liabilities
 
  1,367 
  - 
Provisions
18
  101 
  125 
Derivative financial instruments
13
  4 
  10 
Salaries and social security liabilities
 
  88 
  94 
Total non-current liabilities
 
  126,629 
  128,868 
Current liabilities
 
    
    
Trade and other payables
16
  5,752 
  5,577 
Borrowings
17
  13,856 
  16,839 
Lease liabilities
 
  114 
  59 
Provisions
18
  147 
  161 
Salaries and social security liabilities
 
  400 
  476 
Income tax and MPIT liabilities
 
  941 
  1,028 
Derivative financial instruments
13
  41 
  52 
Total current liabilities
 
  21,251 
  24,192 
TOTAL LIABILITIES
 
  147,880 
  153,060 
TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES
 
  237,104 
  243,463 
  
The accompanying notes are an integral part of these Unaudited Condensed Interim Consolidated Financial Statements.
 
 
 
Company Name IRSA Inversiones y Representaaciones Sociedad Anónima
 
 
 
 
 


By:  
/s/ Saúl Zang
 
 
 
Name Saúl Zang
 
 
 
Title Vicepresident I
 
 
 
 
 
2
IRSA Inversiones y Representaciones Sociedad Anónima
 
Unaudited Condensed Interim Consolidated Statements of Income and Other Comprehensive Income
for the three-month period ended September 30, 2021 and 2020
(All amounts in millions, except otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina
 
 
 
 
 
Three months
 
 
Note
  09.30.2021 
  09.30.2020 
Revenues
20
  4,382 
  2,453 
Costs
21, 22
  (1,754)
  (1,673)
Gross profit
 
  2,628 
  780 
Net (loss) / gain from fair value adjustment of investment properties
8
  (6,494)
  36,728 
General and administrative expenses
21
  (737)
  (982)
Selling expenses
21
  (338)
  (686)
Other operating results, net
23
  252 
  16 
(Loss) / profit from operations
 
  (4,689)
  35,856 
Share of (loss) / profit of associates and joint ventures
7
  (155)
  225 
(Loss) / income before financial results and income tax
 
  (4,844)
  36,081 
Finance income
24
  62 
  86 
Finance costs
24
  (2,004)
  (2,429)
Other financial results
24
  2,966 
  952 
Inflation adjustment
24
  340 
  (89)
Financial results, net
 
  1,364 
  (1,480)
(Loss) / profit before income tax
 
  (3,480)
  34,601 
Income tax
19
  2,466 
  (12,133)
(Loss) / profit for the period from continuing operations
 
  (1,014)
  22,468 
Loss for the period from discontinued operations
28
  - 
  (9,752)
(Loss) / profit for the period
 
  (1,014)
  12,716 
Other comprehensive income:
 
    
    
Items that may be reclassified subsequently to profit or loss:
 
    
    
Currency translation adjustment
 
  (164)
  (720)
Other comprehensive (loss) / income for the period from continuing operations
 
  (164)
  (720)
Other comprehensive income for the period from discontinued operations
 
  - 
  (12,503)
Total other comprehensive loss for the period
 
  (164)
  (13,223)
Total comprehensive loss for the period
 
  (1,178)
  (507)
 
    
    
Total comprehensive (loss) / income from continuing operations
 
  (1,178)
  21,748 
Total comprehensive income from discontinued operations
 
  - 
  (22,255)
Total comprehensive loss for the period
 
  (1,178)
  (507)
 
    
    
(Loss) / profit for the period attributable to:
 
    
    
Equity holders of the parent
 
  (600)
  10,086 
Non-controlling interest
 
  (414)
  2,630 
 
    
    
Profit / (loss) from continuing operations attributable to:
 
    
    
Equity holders of the parent
 
  (600)
  17,788 
Non-controlling interest
 
  (414)
  4,680 
 
    
    
Total comprehensive (Loss) / income attributable to:
 
    
    
Equity holders of the parent
 
  (762)
  4,443 
Non-controlling interest
 
  (416)
  (4,950)
 
    
    
Total comprehensive (Loss) / income from continuing operations attributable to:
 
    
    
Equity holders of the parent
 
  (762)
  18,257 
Non-controlling interest
 
  (416)
  3,491 
 
    
    
(Loss) / profit per share attributable to equity holders of the parent: (i)
 
    
    
Basic
 
  (0.91)
  17.53 
Diluted
 
  (0.91)
  17.48 
 
    
    
(Loss) / profit per share from continuing operations attributable to equity holders of the parent: (i)
 
    
    
Basic
 
  (0.91)
  30.92 
Diluted
 
  (0.91)
  30.83 
 
(i) The loss/profit per share have been calculated using 656,700,315 shares at 09.30.21 and 575,377,891 at 09.30.20. If 656,700,315 shares had been used for the calculation, the result per share would be ARS 15.36 for 09.30.20. See note 17 to the Annual Financial Statements.
 
The accompanying notes are an integral part of these Unaudited Condensed Interim Consolidated Financial Statements.
 
 
 
Company Name IRSA Inversiones y Representaaciones Sociedad Anónima
 
 
 
 
 


By:  
/s/ Saúl Zang
 
 
 
Name Saúl Zang
 
 
 
Title Vicepresident I
 
 
 
 
 
3
IRSA Inversiones y Representaciones Sociedad Anónima
 
Unaudited Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity
for the three-month period ended September 30, 2021
(All amounts in millions, except otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina
 
 
 
Attributable to equity holders of the parent
 
 
 
 
 
 
 
 
 
Share capital
 
 
Treasury shares
 
 
Inflation adjustment of share capital and treasury shares (i)
 
 
 Warrants (iii)
 
 
Share premium
 
 
Additional paid-in capital from treasury shares
 
 
Legal reserve
 
 
Special reserve Resolution CNV 609/12 (ii)
 
 
Other reserves (iv)
 
 
Accumulated deficit
 
 
Subtotal
 
 
Non-controlling interest
 
 
Total Shareholders’ equity
 
Balance as of July 1, 2021
  657 
  2 
  22,596 
  1,944 
  26,347 
  162 
  1,752 
  15,432 
  29,827 
  (31,147)
  67,572 
  22,831 
  90,403 
Loss for the period
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (600)
  (600)
  (414)
  (1,014)
Other comprehensive loss for the period
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (162)
  - 
  (162)
  (2)
  (164)
Total (loss) and other comprehensive (loss) for the period
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (162)
  (600)
  (762)
  (416)
  (1,178)
Warrants exercise (iii)
  - 
  - 
  - 
  (1)
  3 
  - 
  - 
  - 
  - 
  - 
  2 
  - 
  2 
Capitalisation of irrevocable contributions
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  8 
  8 
Other changes in equity
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (9)
  - 
  (9)
  - 
  (9)
Changes in non-controlling interest
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (2)
  - 
  (2)
  - 
  (2)
Balance as of September 30, 2021
  657 
  2 
  22,596 
  1,943 
  26,350 
  162 
  1,752 
  15,432 
  29,654 
  (31,747)
  66,801 
  22,423 
  89,224 
 
(i) Includes ARS 1 of Inflation adjustment of treasury shares. See Note 17 to the Annual Financial Statements.
(ii) Related to CNV General Resolution N° 609/12.
(iii) Between September 17,2021 and September 25,2021, 30,741 warrants were exercised so the equivalent in shares was issued.
(iv) Group´s other reserves for the period ended September 30, 2021 are comprised 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
 
 
Revaluation surplus
 
 
Total Other reserves
 
Balance as of July 1, 2021
  (279)
  (9,204)
  315 
  2,778 
  707 
  (705)
  34,435 
  139 
  1,641 
  29,827 
Other comprehensive loss for the period
  - 
  - 
  - 
  - 
  (162)
  - 
  - 
  - 
  - 
  (162)
Total comprehensive loss for the period
  - 
  - 
  - 
  - 
  (162)
  - 
  - 
  - 
  - 
  (162)
Changes in non-controlling interest
  - 
  (2)
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (2)
Other changes in equity
  - 
  - 
  - 
  - 
  (9)
  - 
  - 
  - 
  - 
  (9)
Balance as of September 30, 2021
  (279)
  (9,206)
  315 
  2,778 
  536 
  (705)
  34,435 
  139 
  1,641 
  29,654 
 
 There are no cumulative unpaid dividends on preferred shares.
 The accompanying notes are an integral part of these Unaudited Condensed Interim Consolidated Financial Statements.

 
Company Name IRSA Inversiones y Representaaciones Sociedad Anónima
 
 
 
 
 


By:  
/s/ Saúl Zang
 
 
 
Name Saúl Zang
 
 
 
Title Vicepresident I
 
 
 
 
 
4
 
 
Unaudited Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity
for the three-month period ended September 30, 2021
(All amounts in millions, except otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina
 
 
 
 
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, 2020
  575 
  2 
  22,586 
  23,866 
  156 
  796 
  15,436 
  9,674 
  20,679 
  93,770 
  107,559 
  201,329 
Profit for the period
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  10,086 
  10,086 
  2,630 
  12,716 
Other comprehensive loss for the period
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (5,643)
  - 
  (5,643)
  (7,580)
  (13,223)
Total profit and other comprehensive loss for the period
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (5,643)
  10,086 
  4,443 
  (4,950)
  (507)
Capitalisation of irrevocable contributions
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  6 
  6 
Dividend distribution
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (30)
  (30)
Other changes in equity
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  9,035 
  - 
  9,035 
  (66,852)
  (57,817)
Reserve for share-based payments
  - 
  - 
  - 
  - 
  3 
  - 
  - 
  (3)
  - 
  - 
  - 
  - 
Changes in non-controlling interest
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  53 
  - 
  53 
  (108)
  (55)
Balance as of September 30, 2020
  575 
  2 
  22,586 
  23,866 
  159 
  796 
  15,436 
  13,116 
  30,765 
  107,301 
  35,625 
  142,926 
 
(i) Includes ARS 1 of Inflation adjustment of treasury shares. See Note 16 to the Annual Financial Statements.
(ii) Related to CNV General Resolution N° 609/12.
(iii) Group’s other reserves for the period ended September 30, 2020 are comprised 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, 2020
  (282)
  (8,650)
  323 
  2,778 
  (1,195)
  (601)
  (643)
  17,062 
  175 
  707 
  9,674 
Other comprehensive loss for the period
  - 
  - 
  - 
  - 
  (5,300)
  (119)
  (224)
  - 
  - 
  - 
  (5,643)
Total comprehensive loss for the period
  - 
  - 
  - 
  - 
  (5,300)
  (119)
  (224)
  - 
  - 
  - 
  (5,643)
Reserve for share-based payments
  2 
  - 
  (5)
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (3)
Changes in non-controlling interest
  - 
  53 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  53 
Other changes in equity
  - 
  (79)
  - 
  - 
  7,675 
  328 
  1,195 
  - 
  (175)
  91 
  9,035 
Balance as of September 30, 2020
  (280)
  (8,676)
  318 
  2,778 
  1,180 
  (392)
  328 
  17,062 
  - 
  798 
  13,116 
 
    There are no cumulative unpaid dividends on preferred shares.
 
The accompanying notes are an integral part of these Unaudited Condensed Interim Consolidated Financial Statements.
 
 
Company Name IRSA Inversiones y Representaaciones Sociedad Anónima
 
 
 
 
 


By:  
/s/ Saúl Zang
 
 
 
Name Saúl Zang
 
 
 
Title Vicepresident I
 
 
 
 
 
 
5
IRSA Inversiones y Representaciones Sociedad Anónima
 
Unaudited Condensed Interim Consolidated Statements of Cash Flows
for the three-month period ended September 30, 2021 and 2020
(All amounts in millions, except otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina
 
 
Note
  09.30.2021 
  09.30.2020 
Operating activities:
 
    
    
Net cash generated from continuing operating activities before income tax paid
15
  1,659 
  1,735 
Income tax and MPIT paid
 
  (6)
  (5)
Net cash generated from continuing operating activities
 
  1,653 
  1,730 
Net cash generated from discontinued operating activities
 
  - 
  3,395 
Net cash generated from operating activities
 
  1,653 
  5,125 
Investing activities:
 
    
    
Contributions and issuance of capital in associates and joint ventures
 
  (29)
  (12)
Acquisition and improvements of investment properties
 
  (370)
  (1,096)
Proceeds from sales of investment properties
 
  238 
  14,643 
Acquisitions and improvements of property, plant and equipment
 
  (97)
  (69)
Acquisitions of intangible assets
 
  (8)
  (9)
Acquisitions of investments in financial assets
 
  (896)
  (9,424)
Proceeds from disposal of investments in financial assets
 
  767 
  10,383 
Interest received from financial assets
 
  189 
  239 
Dividends received from financial assets
 
  1 
  - 
Net cash (used in) / generated from continuing investing activities
 
  (205)
  14,655 
Net cash generated from discontinued investing activities
 
  - 
  48,532 
Net cash (used in) / generated from investing activities
 
  (205)
  63,187 
Financing activities:
 
    
    
Borrowings and issuance of non-convertible notes
 
  2,853 
  5,285 
Payment of borrowings and non-convertible notes
 
  (709)
  (30,508)
Collections of short-term loans, net
 
  (201)
  7,412 
Interests paid
 
  (2,801)
  (4,001)
Repurchase of non-convertible notes
 
  (177)
  (101)
Acquisition of non-controlling interest in subsidiaries
 
  - 
  (81)
Proceeds from warrants exercise
 
  2 
  - 
Sale of own non-convertible notes
 
  - 
  800 
Net proceeds from derivate financial instrument
 
  (15)
  (343)
Net cash used in continuing financing activities
 
  (1,048)
  (21,537)
Net cash used in discontinued financing activities
 
  - 
  (19,850)
Net cash used in financing activities
 
  (1,048)
  (41,387)
Net increase / (decrease) in cash and cash equivalents from continuing activities
 
  400 
  (5,152)
Net increase in cash and cash equivalents from discontinued activities
 
  - 
  32,077 
Net increase in cash and cash equivalents
 
  400 
  26,925 
Cash and cash equivalents at beginning of period
 
  2,110 
  148,318 
Deconsolidation of subsidiaries
 
  - 
  (158,820)
Foreign exchange gain and inflation adjustment on cash and changes in fair value of cash equivalents
 
  (357)
  (9,719)
Cash and cash equivalents at end of period
13
  2,153 
  6,704 
 
The accompanying notes are an integral part of these Unaudited Condensed Interim Consolidated Financial Statements.
 
 
Company Name IRSA Inversiones y Representaaciones Sociedad Anónima
 
 
 
 
 


By:  
/s/ Saúl Zang
 
 
 
Name Saúl Zang
 
 
 
Title Vicepresident I
 
 
 
 
 
 
6
IRSA Inversiones y Representaciones Sociedad Anónima
 
Notes to the Unaudited Condensed Interim Consolidated Financial Statements
(Amounts in millions, except otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina
 
1.
The Group’s business and general information
 
These Financial Statements have been approved for issuance by the Board of Directors, on November 8, 2021.
 
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.
 
As stated in Note 1 to the consolidated financial statements as of June 30, 2021, 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 as of that date, consequently, the results of such company as of September 30,2020 are included in discontinued operations.
 
2.
Summary of significant accounting policies
 
2.1.
Basis of preparation
 
These financial statements have been prepared in accordance with IAS 34 “Interim financial reporting” and should therefore be read in conjunction with the Group's annual Consolidated Financial Statements as of June 30, 2021 prepared in accordance with IFRS. Also, these financial statements include additional information required by Law No. 19,550 and / or regulations of the CNV. Such information is included in the notes to these financial statements, as accepted by IFRS.
 
These financial statements for the interim periods of three months ended September 30, 2021 and 2020 have not been audited. Management considers that they include all the necessary adjustments to fairly present the results of each period. Intermediate period results do not necessarily reflect the proportion of the Group's results for the entire fiscal years.
 
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 by non-monetary items. This requirement also includes the comparative information of the financial statements.
 
In order to conclude on whether an economy is categorized as highly inflationary in the terms of IAS 29, the standard details a series of factors to be considered, including the existence of an accumulated inflation rate in three years that approximates or exceed 100%. Accumulated inflation in Argentina in three years is over 100%. For that reason, in accordance with IAS 29, Argentina must be considered a country with a highly inflationary economy starting July 1, 2018.
 
In relation to the inflation index to be used and in accordance with FACPCE Resolution No. 539/18, it is determined based on the Wholesale Price Index (IPIM) until 2016, considering the average variation of the Consumer Price Index (CPI) of the Autonomous City of Buenos Aires for the months of November and December 2015, because during those two months there were no national IPIM measurements. Then, from January 2017, the National Consumer Price Index (National CPI) is considered. The table below presents the index for the period ended September 30, 2021, according to official statistics (INDEC) and following the guidelines described in Resolution 539/18.
 
 
 
As of September 30, 2021 (accumulated three months)
 
Price variation
  9%
 
 
7
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
As a consequence of the aforementioned, these financial statements as of September 30, 2021 were restated in accordance with IAS 29.
 
2.2.
Significant accounting policies
 
The accounting policies applied in the presentation of these Financial Statements are consistent with those applied in the preparation of the Annual Financial Statements, as described in Note 2 to those Financial Statements.
 
2.3.
Comparability of information
 
Balance items as of June 30, 2021 and September 30, 2020 presented in these Unaudited Condensed Interim Consolidated Financial Statements for comparative purposes arise from the financial statements as of and for such periods restated according to IAS 29 (See note 2.1). Certain items from prior periods have been reclassified for consistency purposes.
 
See Note 29 for information on the context in which the Group operates.
 
2.4.
Use of estimates
 
The preparation of Financial Statements at a certain date requires 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 period. Actual results might differ from the estimates and evaluations made at the date of preparation of these financial statements. In the preparation of these financial statements, the significant judgments made by Management in applying the Group’s accounting policies and the main sources of uncertainty were the same as the ones applied by the Group in the preparation of the Annual Financial Statements described in Note 3 to those Financial Statements.
 
3.
Seasonal effects on operations
 
The operations of the Group’s shopping malls are subject to seasonal effects, which affect the level of sales recorded by lessees. During summer time in Argentina (January and February), the lessees of shopping malls experience the lowest sales levels in comparison with the winter holidays (July) and Christmas and year-end holidays celebrated in December, when they tend to record peaks of sales. Apparel stores generally change their collections during the spring and the fall, which impacts positively on shopping malls sales. Sale discounts at the end of each season also affect the business. As a consequence, for shopping mall operations, a higher level of business activity is expected in the period from July through December, compared to the period from January through June.
 
4.
Acquisitions and disposals
 
Significant acquisitions and disposals for the three-month period ended September 30, 2021 are detailed below. Significant acquisitions and disposals for the fiscal year ended June 30, 2021, are detailed in Note 4 to the Annual Financial Statements.
 
A.
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 USD 0.6.
 
 
8
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
B.
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.
 
C.
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.
 
D.
Sale of portfolio Hotels - Condor Agreement
 
On September 22, 2021, Condor Hospitality Trust S.A. (“Condor”) has signed a sale agreement for its portfolio of 15 hotels in the United States with B9 Cowboy Mezz A LLC, an affiliate of Blackstone Real Estate Partners.
 
In this context, Condor announced a Liquidation and Dissolution Plan with the intention of distributing certain net proceeds from the sale of the hotel portfolio to shareholders in one or more instalments.
 
The sale agreement and the implementation of the Liquidation Plan are subject to the approval of the Condor Shareholders' Meeting.
 
As of the date of these financial statement presentation, the Company owns, directly and indirectly, 3,191,213 ordinary shares representing 21.7% of the capital stock.
 
E.
IRSA – IRSA CP Merger Proposal
 
On September 30, 2021, IRSA & IRSA CP Boards of Directors approved the prior merger agreement between both companies and the corresponding special financial statements as of June 30, 2021, initiating the corporate reorganization process under the terms of art. 82 et seq. of the General Law of Companies. The merger process has particular characteristics given that they are two companies included in the public offering regime, reason why, not only apply the current provisions of the General Law of Companies but also the procedures established regarding reorganization of companies of the regulations of the “Comisión Nacional de Valores” (National Securities Commission) and the markets, both national and foreign, where their shares are listed.
 
The Merger is carried out in order to streamline the technical, administrative, operational and economic resources of both Companies, standing out among others: (a) the operation and maintenance of a single transactional information system and centralization of the entire accounting registration process; (b) presentation of a single financial statement to the different control agencies with the consequent cost savings in accounting and advisory fees, tariffs and other related expenses; (c) simplification of the accounting information reporting and consolidation process, as a consequence of the reduction that the merger would imply for the corporate structure as a whole; (d) removal of the IRSA CP public offering listing on BYMA and NASDAQ with the associated costs that this represents; (e) cost reduction for legal fees and tax filings; (f) increase in the percentage of the capital stock that is listed in the different markets, increasing the liquidity of the listed shares; (g) tax efficiencies and (h) preventively avoid the potential overlap of activities between the Companies.
 
The merger is subject to the approval of the shareholders' meeting of both companies whose call will be made once they have the administrative approval of the United States Securities and Exchange Commission, an entity to which they are subject since both companies list their shares in markets that operate in said jurisdiction.
 
 
 
9
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
 
Once the merger by absorption between IRSA as the absorbing company and IRSA CP as the absorbed company has been approved, the effective date will be July 1, 2021, date from which the transfer to the absorbing company of all the assets of the absorbed company will take effect, thereby incorporating all its rights and obligations, assets, and liabilities into the equity of the absorbing company, all subject to the required corporate approvals.
 
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.
 
The exchange of IRSA CP shares for IRSA shares will be carried out once the entire administrative process has been completed and once the registration has been made in the “Inspección General de Justicia” (General Inspection of Justice), a process that may take several months.
 
5.
Financial risk management and fair value estimates
 
These Financial Statements do not include all the information and disclosures on financial risk management; therefore, they should be read along with Note 5 to the Annual Financial Statements. There have been no changes in risk management or risk management policies applied by the Group since year-end.
 
From June 30, 2021 and up to the date of issuance of these Financial Statements, there have been no significant changes in business or economic circumstances affecting the fair value of the Group's assets or liabilities (either measured at fair value or amortized cost) except for what is mentioned in Note 30 in relation to COVID-19.
 
6.
Segment information
 
Segment information was prepared and classified according to the business in which the Group operates, they were descripted in Note 6 to the Annual Financial Statements.
 
Below is a summary of the Group’s operating segments and a reconciliation between the operating income according to segment information and the operating income of the Statements of Income and Other Comprehensive Income of the Group for the periods ended September 30, 2021 and 2020:
 
 
 
Three Months ended September 30, 2021
 
 
 
Total
 
 
Joint ventures (1)
 
 
Expensesand collectivepromotion funds
 
 
Elimination of inter-segment transactions and non-reportable assets / liabilities (2)
 
 
Total as per statement of income / statement of financial position
 
Revenues
  3,430 
  (24)
  985 
  (9)
  4,382 
Costs
  (745)
  16 
  (1,025)
  - 
  (1,754)
Gross profit / (loss)
  2,685 
  (8)
  (40)
  (9)
  2,628 
Net gain from fair value adjustment of investment properties
  (6,609)
  115 
  - 
  - 
  (6,494)
General and administrative expenses
  (752)
  2 
  - 
  13 
  (737)
Selling expenses
  (337)
  (1)
  - 
  - 
  (338)
Other operating results, net
  239 
  1 
  16 
  (4)
  252 
(Loss) / profit from operations
  (4,774)
  109 
  (24)
  - 
  (4,689)
Share of profit of associates and joint ventures
  (80)
  (75)
  - 
  - 
  (155)
Segment (loss) / profit
  (4,854)
  34 
  (24)
  - 
  (4,844)
Reportable assets
  217,894 
  (1,588)
  - 
  20,798 
  237,104 
Reportable liabilities
  - 
  - 
  - 
  (147,880)
  (147,880)
Net reportable assets
  217,894 
  (1,588)
  - 
  (127,082)
  89,224 
 
 
 
 
 
10
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
 
 
 
Three Months ended September 30, 2020
 
 
 
Total
 
 
Joint ventures (1)
 
 
Expensesand collectivepromotion funds
 
 
Elimination of inter-segment transactions and non-reportable assets / liabilities (2)
 
 
Total as per statement of income / statement of financial position
 
Revenues
  1,857 
  (12)
  617 
  (9)
  2,453 
Costs
  (993)
  21 
  (701)
  - 
  (1,673)
Gross profit / (loss)
  864 
  9 
  (84)
  (9)
  780 
Net gain from fair value adjustment of investment properties
  38,004 
  (1,276)
  - 
  - 
  36,728 
General and administrative expenses
  (997)
  1 
  - 
  14 
  (982)
Selling expenses
  (687)
  1 
  - 
  - 
  (686)
Other operating results, net
  (26)
  2 
  45 
  (5)
  16 
Profit / (loss) from operations
  37,158 
  (1,263)
  (39)
  - 
  35,856 
Share of profit of associates and joint ventures
  (720)
  945 
  - 
  - 
  225 
Segment profit / (loss)
  36,438 
  (318)
  (39)
  - 
  36,081 
Reportable assets
  282,110 
  (1,454)
  - 
  24,918 
  305,574 
Reportable liabilities
  - 
  - 
  - 
  (162,650)
  (162,650)
Net reportable assets
  282,110 
  (1,454)
  - 
  (137,732)
  142,924 
 
(1) Represents the equity value of joint ventures that were proportionately consolidated for segment information.
(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 8 and ARS 26 as of September 30, 2021 and 2020 respectively.
 
Below is a summarized analysis of the segments from the Group’s Operations Center in Argentina for the periods ended September 30, 2021 and 2020:
 
 
 
Three Months ended September 30, 2021
 
 
 
Operations Center in Argentina
 
 
 
Shopping Malls
 
 
Offices
 
 
Sales and developments
 
 
Hotels
 
 
International
 
 
Corporate
 
 
Others
 
 
Total
 
Revenues
  2,225 
  716 
  - 
  473 
  2 
  - 
  14 
  3,430 
Costs
  (274)
  (48)
  (31)
  (296)
  (7)
  - 
  (89)
  (745)
Gross profit / (loss)
  1,951 
  668 
  (31)
  177 
  (5)
  - 
  (75)
  2,685 
Net (loss) / gain from fair value adjustment of investment properties (i)
  (3,698)
  (1,833)
  (1,244)
  - 
  3 
  - 
  163 
  (6,609)
General and administrative expenses
  (312)
  (87)
  (78)
  (113)
  (12)
  (115)
  (35)
  (752)
Selling expenses
  (208)
  (47)
  (36)
  (44)
  - 
  - 
  (2)
  (337)
Other operating results, net
  26 
  19 
  185 
  (3)
  4 
  - 
  8 
  239 
(Loss) / profit from operations
  (2,241)
  (1,280)
  (1,204)
  17 
  (10)
  (115)
  59 
  (4,774)
Share of profit of associates and joint ventures
  - 
  - 
  - 
  - 
  328 
  - 
  (408)
  (80)
Segment (loss) / profit
  (2,241)
  (1,280)
  (1,204)
  17 
  318 
  (115)
  (349)
  (4,854)
 
    
    
    
    
    
    
    
    
Investment properties and trading properties
  56,144 
  82,436 
  59,670 
  - 
  109 
  - 
  2,483 
  200,842 
Investment in associates and joint ventures
  - 
  - 
  - 
  - 
  2,871 
  - 
  7,235 
  10,106 
Other operating assets
  369 
  1,494 
  2,129 
  2,796 
  - 
  9 
  149 
  6,946 
Operating assets
  56,513 
  83,930 
  61,799 
  2,796 
  2,980 
  9 
  9,867 
  217,894 
 
(i) For the three-month period ended September 30, 2021, the net loss from fair value adjustment of investment properties was ARS 6,494. The net impact of the values in pesos of our properties was mainly a consequence of the change in macroeconomic conditions:
(a) loss of ARS 3,185.6 as a consequence of the variation in the projected income growth rate increase in the projected inflation rate and the conversion to dollars of the projected cash flow in pesos according to the exchange rate estimates used in the cash flow from shopping malls;
(b) positive impact of ARS 1,525.5 resulting from the conversion into pesos of the value of the shopping malls in dollars based on the exchange rate at the end of the period;
(c) an increase of 30 basis points in the discount rate, mainly due to an increase in the country-risk rate component of the WACC discount rate used to discount the cash flow, which led to a decrease in the value of the shopping malls of ARS 1,280.1.
(d) Additionally, due to the impact of the inflation adjustment, ARS 4,717.0 were reclassified for shopping malls from “Net gain from fair value adjustment” to “Inflation Adjustment” in the Statement of Income and Other Comprehensive Income.
(e) The value of our office buildings and other rental properties measured in real terms decreased by 2.4% during the three-month period ended as of September 30, 2021, due to the implicit exchange rate.
 
 
 
11
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
 
 
 
Three Months ended September 30, 2020
 
 
 
Operations Center in Argentina
 
 
 
Shopping Malls
 
 
Offices
 
 
Sales and developments
 
 
Hotels
 
 
International
 
 
Corporate
 
 
Others
 
 
Total
 
Revenues
  560 
  825 
  59 
  9 
  401 
  - 
  3 
  1,857 
Costs
  (204)
  (69)
  (148)
  (197)
  (337)
  - 
  (38)
  (993)
Gross profit / (loss)
  356 
  756 
  (89)
  (188)
  64 
  - 
  (35)
  864 
Net gain from fair value adjustment of investment properties
  1,796 
  19,992 
  15,393 
  - 
  3 
  - 
  820 
  38,004 
General and administrative expenses
  (500)
  (133)
  (101)
  (87)
  (26)
  (120)
  (30)
  (997)
Selling expenses
  (111)
  (56)
  (465)
  (29)
  (24)
  - 
  (2)
  (687)
Other operating results, net
  (28)
  2 
  (9)
  12 
  - 
  - 
  (3)
  (26)
Profit / (loss) from operations
  1,513 
  20,561 
  14,729 
  (292)
  17 
  (120)
  750 
  37,158 
Share of profit of associates and joint ventures
  - 
  - 
  (12)
  - 
  (589)
  - 
  (119)
  (720)
Segment profit / (loss)
  1,513 
  20,561 
  14,717 
  (292)
  (572)
  (120)
  631 
  36,438 
 
    
    
    
    
    
    
    
    
Investment properties and trading properties
  82,524 
  109,819 
  66,933 
  - 
  157 
  - 
  3,027 
  262,460 
Investment in associates and joint ventures
  - 
  - 
  861 
  - 
  2,716 
  - 
  10,905 
  14,482 
Other operating assetsInvestment
  431 
  360 
  1,233 
  2,979 
  - 
  9 
  156 
  5,168 
Operating assets
  82,955 
  110,179 
  69,027 
  2,979 
  2,873 
  9 
  14,088 
  282,110 
 

7.
Investments in associates and joint ventures
 
Changes in the Group’s investments in associates and joint ventures for the three-month period ended September 30, 2021 and for the year ended June 30, 2021 were as follows:
 
 
 
September 30, 2021
 
 
June 30, 2021
 
Beginning of the period / year
  13,287 
  122,084 
Increase of equity interest and capital contributions
  604 
  46 
Decrease of interest in associate (iv)
  - 
  (47,919)
Deconsolidation (i)
  - 
  (52,940)
Share of profit
  (155)
  (3,317)
Impairment (iii)
  (2)
  (684)
Currency translation adjustment
  (131)
  (3,911)
Other comprehensive income
  - 
  (59)
Others
  5 
  (13)
End of the period / year (ii)
  13,608 
  13,287 
 
(i)
Corresponds to the deconsolidation of IDBD. See Note 4.G to the consolidated Financial Statements as of June 30, 2021.
(ii)
As of September 30, 2021 and June 30, 2021 includes ARS (8) and ARS (7), reflecting interests in companies with negative equity, which were disclosed in “Provisions” (Note 18).
(iii)
Corresponds to the investment in TGLT S.A.
(iv)
Corresponds to the sale of the remaining equity interest in Shufersal in July 2020.
 
 
% ownership interest
 
 
Value of Group's interest in equity
 
 
Group's interest in comprehensive income / (loss)
 
Name of the entity
 
September 30, 2021
 
 
June 30, 2021
 
 
September 30, 2021
 
 
June 30, 2021
 
 
September 30, 2021
 
 
September 30, 2020
 
Associates
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
New Lipstick
  49.96%
  49.96%
  226 
  238 
  (4)
  (503)
BHSA
  29.91%
  29.91%
  5,499 
  5,859 
  (359)
  (91)
Condor
  21.70%
  18.89%
  2,564 
  1,770 
  331 
  (84)
Quality
  50.00%
  50.00%
  3,154 
  3,199 
  (72)
  948 
La Rural SA
  50.00%
  50.00%
  178 
  185 
  (6)
  24 
TGLT
  27.82%
  27.82%
  1,001 
  1,024 
  (23)
  (59)
Other joint ventures
  N/A 
  N/A 
  986 
  1,012 
  (153)
  (2,910)
Total associates and joint ventures
    
    
  13,608 
  13,287 
  (286)
  (2,675)
 
 
 
12
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
Below is additional information about the Group’s investments in associates and joint ventures:
 
 
 
 
 
  Latest financial statement issued
Name of the entity
Place of business / Country of incorporation
Main activity
 
Common shares 1 vote
 
 
Share capital (nominal value)
 
 
Profit / (loss) for the period
 
 
Shareholders’ equity
 
Associates
 
 
 
 
 
 
 
 
 
 
 
 
 
 
New Lipstick
U.S.
Real estate
  N/A 
  - 
  (*) (0) 
  (*) (41) 
BHSA
Argentina
Financial
  448,689,072 
  (**) 1,500 
  (**) (685) 
  (**) 18,145 
Condor
EE.UU.
Hotel
  3,191,214 
  (*) 232 
  (*) (125) 
  (*) 119 
Quality
Argentina
Real estate
  406,316,259 
  406 
  (144)
  6,206 
La Rural SA
Argentina
Organization of events
  714,498 
  1 
  (2)
  101 
TGLT
Argentina
Real estate
  257,320,997 
  925 
  (82)
  4,635 
 
(*) 
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.
(**) 
Information as of September 30, 2021 according to IFRS.
 
Puerto Retiro (joint venture):
 
There have been no changes to what was informed in Note 8 to the Annual Financial Statements.
 
8.
Investment properties
 
Changes in the Group’s investment properties for the three-month period ended September 30, 2021 and for the year ended June 30, 2021 were as follows:
 
 
 
Three Months ended September 30, 2021
 
 
Year ended June 30, 2021
 
 
 
Rental properties
 
 
Undeveloped parcels of land
 
 
Properties under development
 
 
Total
 
 
Total
 
Fair value at the beginning of the period / year
  137,155 
  59,212 
  3,787 
  200,154 
  373,502 
Additions
  224 
  3 
  260 
  487 
  1,133 
Capitalized leasing costs
  5 
  - 
  - 
  5 
  24 
Amortization of capitalized leasing costs (i)
  (5)
  - 
  - 
  (5)
  (14)
Transfers
  - 
  - 
  - 
  - 
  (579)
Deconsolidation
  - 
  - 
  - 
  - 
  (128,458)
Disposals
  (12)
  (233)
  - 
  (245)
  (23,415)
Currency translation adjustment
  (5)
  - 
  (2)
  (7)
  (13,518)
Net (loss) from fair value adjustment
  (5,233)
  (1,244)
  (17)
  (6,494)
  (8,521)
Fair value at the end of the period / year
  132,129 
  57,738 
  4,028 
  193,895 
  200,154 
 
(i)
Amortization charges of capitalized leasing costs were included in “Costs” in the Statements of Income (Note 21).

 
 
13
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
The following amounts have been recognized in the Statements of Income:
 
 
  09.30.2021 
  09.30.2020 
Rental and services income
  3,909 
  1,989 
Direct operating expenses
  (1,417)
  (996)
Development reimbursements / (expenses)
  (32)
  (26)
Net realized gain from fair value adjustment of investment properties (i) (ii)
  122 
  8,163 
Net unrealized gain from fair value adjustment of investment properties
  (6,616)
  28,565 
 
(i)
As of September 30, 2021 includes ARS 18 for the sale of Casona Hudson, ARS 55 for the sale of Merlo Plot and ARS 49 for the sale of Mariano Acosta Plot. As of September 30, 2020 includes ARS 2,732 for the sale of Boston Tower and ARS 5,431 for the sale of Bouchard 710.
 
(ii)
As of September 30, 2021, (ARS 99) corresponds to the realized result from fair value adjustment for the period ((ARS 68) for the sale of Casona Hudson, (ARS 15) for the sale of Merlo Plot and (ARS 16) for the sale of Mariano Acosta Plot) and ARS 221 for realized result from fair value adjustment made in previous years (ARS 86 for the sale of Casona Hudson, ARS 70 for the sale of Merlo Plot and ARS 65 for the sale of Mariano Acosta Plot). As of September 30, 2020 ARS 285 corresponds to net realized fair value adjustment on investment properties for the period (ARS 797 for the sale of Boston Tower and (ARS 512) for the sale of Bouchard 710) and ARS 7,878 corresponds to the realized fair value adjustment made in previous years (ARS 1,935 for the sale of Boston Tower and ARS 5,943 for the sale of Bouchard 710).
 
Valuation techniques are described in Note 9 to the Annual Financial Statements. There were no changes to such techniques. The Group has reassessed the assumptions September 30, 2021, considering the market conditions existing at that date due to the pandemic described in Note 29, incorporating the effect of the variation in the exchange rate in other assets denominated in US Dollars.
 
Costa Urbana –former Solares de Santa María– Costanera Sur, Buenos Aires City (IRSA)
 
The Company owns an important property of more than 70 hectares, which was 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 was renamed “Costa Urbana”. The Company intends 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, the Company has 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 Total Occupancy Factor (“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, the non-binding Public Hearing was held from October 15, 2021 to November 8, 2021 and is pending the treatment in second reading for final legislative approval.
 
The accounting valuation as of September 30, 2021 does not reflect any of these potential changes, valuing the land with the same methodology and assumptions as in previous years.
 
 
14
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
9.
Property, plant and equipment
 
Changes in the Group’s property, plant and equipment for the three-month period ended September 30, 2021 and for the year ended June 30, 2021 were as follows:
 
 
 
Three Months ended September 30, 2021
 
 
Year ended June 30, 2021
 
 
 
Buildings and facilities
 
 
Machinery and equipment
 
 
Others
 
 
Total
 
 
Total
 
Costs
  7,733 
  2,746 
  632 
  11,111 
  229,607 
Accumulated depreciation
  (3,562)
  (2,560)
  (458)
  (6,580)
  (167,677)
Net book amount at the beginning of the period / year
  4,171 
  186 
  174 
  4,531 
  61,930 
Additions
  22 
  20 
  55 
  97 
  1,810 
Disposals
  - 
  - 
  - 
  - 
  (99)
Deconsolidation
  - 
  - 
  - 
  - 
  (52,444)
Reclassification to assets assets held for sale
  - 
  - 
  - 
  - 
  (31)
Currency translation adjustment
  - 
  - 
  - 
  - 
  (4,191)
Transfers
  - 
  - 
  - 
  - 
  1,081 
Depreciation charges (i)
  (77)
  (21)
  (9)
  (107)
  (3,525)
Balances at the end of the period / year
  4,116 
  185 
  220 
  4,521 
  4,531 
Costs
  7,755 
  2,766 
  687 
  11,208 
  11,111 
Accumulated depreciation
  (3,639)
  (2,581)
  (467)
  (6,687)
  (6,580)
Net book amount at the end of the period / year
  4,116 
  185 
  220 
  4,521 
  4,531 
 
(i)
As of September 30, 2021, depreciation charges of property, plant and equipment were recognized as follows: ARS 75 in "Costs" and ARS 32 in "General and administrative expenses", respectively in the Statement of Income (Note 21).

 
10.
Trading properties
 
Changes in the Group’s trading properties for the three-month period ended September 30, 2021 and for the year ended June 30, 2021 were as follows:
 
 
 
Three Months ended September 30, 2021
 
 
Year ended June 30, 2021
 
 
 
Completed properties
 
 
Properties under development
 
 
Undeveloped sites
 
 
Total
 
 
Total
 
Beginning of the period / year
  132 
  877 
  913 
  1,922 
  11,773 
Additions
  - 
  44 
  1 
  45 
  880 
Deconsolidation
  - 
  - 
  - 
  - 
  (8,404)
Currency translation adjustment
  - 
  (39)
  - 
  (39)
  (758)
Disposals
  - 
  - 
  - 
  - 
  (1,569)
End of the period / year
  132 
  882 
  914 
  1,928 
  1,922 
Non-current
    
    
    
  1,803 
  1,797 
Current
    
    
    
  125 
  125 
Total
    
    
    
  1,928 
  1,922 
 
 
 
15
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
11.
Intangible assets
 
Changes in the Group’s intangible assets for the three-month period ended September 30, 2021 and for the year ended June 30, 2021 were as follows:
 
 
 
Three Months ended September 30, 2021
 
 
Year ended June 30, 2021
 
 
 
Goodwill
 
 
Information systems and software
 
 
Contracts and others
 
 
Total
 
 
Total
 
Costs
  148 
  862 
  2,588 
  3,598 
  115,495 
Accumulated amortization
  - 
  (638)
  (337)
  (975)
  (69,890)
Net book amount at the beginning of the period / year
  148 
  224 
  2,251 
  2,623 
  45,605 
Additions
  - 
  7 
  1 
  8 
  2,377 
Disposals
  - 
  - 
  (123)
  (123)
  (121)
Impairment
  - 
  - 
  - 
  - 
  (44)
Deconsolidation
  - 
  - 
  - 
  - 
  (39,939)
Currency translation adjustment
  - 
  - 
  - 
  - 
  (2,702)
Amortization charges (i)
  - 
  (28)
  - 
  (28)
  (2,553)
Balances at the end of the period / year
  148 
  203 
  2,129 
  2,480 
  2,623 
Costs
  148 
  869 
  2,466 
  3,483 
  3,598 
Accumulated amortization
  - 
  (666)
  (337)
  (1,003)
  (975)
Net book amount at the end of the period / year
  148 
  203 
  2,129 
  2,480 
  2,623 
 
(i)
As of September 30, 2021, amortization charges were recognized in the amount of ARS 9 in "Costs" and ARS 19 in "General and administrative expenses", in the Statement of Income (Note 21).
 
 
12.
Right-of-use assets
 
The Group’s right-of-use assets as of September 30, 2021 and June 30, 2021 are the following:
 
 
 
September 30, 2021
 
 
June 30, 2021
 
Real Estate
  14 
  12 
Machinery and equipment
  4 
  4 
Others
  853 
  870 
Total Right-of-use assets
  871 
  886 
Non-current
  871 
  886 
Total
  871 
  886 
 
The depreciation charge of the right-of use-assets is detailed below:
 
 
 
September 30, 2021
 
 
September 30, 2020
 
Real Estate
  12 
  1,412 
Telecommunications
  - 
  323 
Others
  2 
  297 
Total depreciation of right-of-use assets (i)
  14 
  2,032 
 
(i)
As of September 30, 2021, amortization charges were recognized in the amount of ARS 11 in "Costs" and ARS 3 in "General and administrative expenses", in the Statement of Income (Note 21). Includes ARS 1,996 charged to the result of discontinued operations as of September 30, 2020
 
 
 
16
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
13.
Financial instruments by category
 
This note presents the financial assets and financial liabilities by category of financial instrument and a reconciliation to the corresponding line in the Consolidated Statements of Financial Position, as appropriate. Financial assets and liabilities measured at fair value are assigned based on their different levels in the fair value hierarchy. For further information related to fair value hierarchy refer to Note 13 to the Annual Financial Statements. Financial assets and financial liabilities as of September 30, 2021 are the following:
 
 
 
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
 
 
 
 
 
 
 
 
 
 
September 30, 2021
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets as per Statement of Financial Position
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Trade and other receivables (excluding the allowance for doubtful accounts and other receivables)
  8,332 
  - 
  - 
  - 
  8,332 
  5,277 
  13,609 
Investments in financial assets:
    
    
    
    
    
    
    
  - Public companies’ securities
  - 
  327 
  - 
  - 
  327 
  - 
  327 
  - Bonds
  - 
  2,957 
  - 
  - 
  2,957 
  - 
  2,957 
  - Investments in financial assets with quotation
  11 
  833 
  - 
  54 
  898 
  - 
  898 
Cash and cash equivalents:
    
    
    
    
    
    
    
  - Cash at bank and on hand
  1,311 
  - 
  - 
  - 
  1,311 
  - 
  1,311 
  - Short-term investments
  - 
  842 
  - 
  - 
  842 
  - 
  842 
Total assets
  9,654 
  4,959 
  - 
  54 
  14,667 
  5,277 
  19,944 
 
 
 
 
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
 
 
 
 
 
 
 
 
 
 
September 30, 2021
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities as per Statement of Financial Position
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Trade and other payables
  3,062 
  - 
  - 
  - 
  3,062 
  4,392 
  7,454 
Borrowings (excluding finance leases)
  65,082 
  - 
  - 
  - 
  65,082 
  - 
  65,082 
Derivative financial instruments:
    
    
    
    
    
    
    
  - Swaps
  - 
  - 
  45 
  - 
  45 
  - 
  45 
Total liabilities
  68,144 
  - 
  45 
  - 
  68,189 
  4,392 
  72,581 
 
Financial assets and financial liabilities as of June 30, 2021 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, 2021
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets as per Statements of Financial Position
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Trade and other receivables (excluding the allowance for doubtful accounts and other receivables)
  7,902 
  - 
  - 
  - 
  7,902 
  5,401 
  13,303 
Investments in financial assets:
    
    
    
    
    
    
    
  - Public companies’ securities
  - 
  1,067 
  - 
  - 
  1,067 
  - 
  1,067 
  - Bonds
  - 
  2,963 
  - 
  - 
  2,963 
  - 
  2,963 
  - Investments in financial assets with quotation
  11 
  698 
  - 
  52 
  761 
  - 
  761 
Cash and cash equivalents:
    
    
    
    
    
    
    
  - Cash at bank and on hand
  1,232 
  - 
  - 
  - 
  1,232 
  - 
  1,232 
  - Short term investments
  - 
  878 
  - 
  - 
  878 
  - 
  878 
Total assets
  9,145 
  5,606 
  - 
  52 
  14,803 
  5,401 
  20,204 
 
 
 
17
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
 
 
 
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 Statement of Financial Position
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Trade and other payables
  3,152 
  - 
  - 
  - 
  3,152 
  3,941 
  7,093 
Borrowings (excluding finance leases)
  67,900 
  - 
  - 
  - 
  67,900 
  - 
  67,900 
Derivative financial instruments:
    
    
    
    
    
    
    
  - Swaps
  - 
  - 
  62 
  - 
  62 
  - 
  62 
Total liabilities
  71,052 
  - 
  62 
  - 
  71,114 
  3,941 
  75,055 
 
The fair value of financial assets and liabilities at their amortized cost does not differ significantly from their book value, except for borrowings (Note 17). 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).
 
The valuation models used by the Group for the measurement of Level 2 and Level 3 instruments are no different from those used as of June 30, 2021.
 
As of September 30, 2021, there have been no changes to the economic or business circumstances affecting the fair value of the financial assets and liabilities of the Group, except as mentioned in Note 29.
 
The Group uses a range of valuation models for the measurement of Level 2 and Level 3 instruments. Details of such models are presented in the following table. When no quoted prices are available in an active market, fair values (particularly with derivatives) are based on recognized valuation methods.
 
Description
Pricing model / method
Parameters
Fair value hierarchy
 
Range
 
 
 
 
 
 
 
 
Condor´s 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 6 to 8. Volatility of the share 57% to 77%. Market interest rate 1.15% to 1.75%
 
Derivative financial instruments – Swaps
Theoretical price
Underlying asset price and volatility
Level 2 and 3
  - 
 
The following table presents the changes in Level 3 instruments as of September 30, 2021 and June 30, 2021:
 
 
 
Investments in financial assets - Others
 
 
Total as of September 30, 2021
 
 
Total as of June 30, 2021
 
Balances at beginning of the period / year
  52 
  52 
  5,355 
Currency translation adjustment
  (2)
  (2)
  (5)
Deconsolidation
  - 
  - 
  (5,308)
Gain for the period / year (i)
  4 
  4 
  10 
Balances at the end of the period / year
  54 
  54 
  52 
 
(i)
Included within “Financial results, net” in the Statements of Income.
 
 
 
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IRSA Inversiones y Representaciones Sociedad Anónima
 
 
 
14.
Trade and other receivables
 
Group’s trade and other receivables as of September 30, 2021 and June 30, 2021 are as follows:
 
 
 
September 30, 2021
 
 
June 30, 2021
 
Sale, leases and services receivables
  5,434 
  5,019 
Less: Allowance for doubtful accounts
  (968)
  (930)
Total trade receivables
  4,466 
  4,089 
Prepaid expenses
  703 
  880 
Borrowings, deposits and others
  3,817 
  4,010 
Advances to suppliers
  952 
  1,038 
Tax receivables
  1,606 
  1,274 
Others
  1,097 
  1,082 
Total other receivables
  8,175 
  8,284 
Total trade and other receivables
  12,641 
  12,373 
Non-current
  3,339 
  3,111 
Current
  9,302 
  9,262 
Total
  12,641 
  12,373 
 
Movements on the Group’s allowance for doubtful accounts were as follows:
 
 
 
September 30, 2021
 
 
June 30, 2021
 
Beginning of the period / year
  930 
  6,131 
Additions
  146 
  825 
Recovery
  (34)
  (250)
Currency translation adjustment
  9 
  (302)
Deconsolidation
  - 
  (5,074)
Receivables written off during the period/year as uncollectable
  - 
  (31)
Inflation adjustment
  (83)
  (369)
End of the period / year
  968 
  930 
 
The creation and release of the allowance for doubtful accounts have been included in “Selling expenses” in the Statement of Income (Note 21).
 
15.
Cash flow and cash equivalent information
 
Following is a detailed description of cash flows generated by the Group’s operations for the three-month period ended September 30, 2021 and 2020:
 
 
Note
 
Three Months ended September 30, 2021
 
 
Three Months ended September 30, 2020
 
(Loss) / profit for the period
 
  (1,014)
  12,716 
Profit for the period from discontinued operations
 
  - 
  9,752 
Adjustments for:
 
    
    
Income tax
19
  (2,466)
  12,133 
Amortization and depreciation
21
  149 
  186 
Net gain / (loss) from fair value adjustment of investment properties
 
  6,494 
  (36,728)
Financial results, net
 
  (1,611)
  (135)
Provisions and allowances
 
  124 
  108 
Share of (profit) / loss of associates and joint ventures
7
  155 
  (225)
Changes in operating assets and liabilities:
 
    
    
Decrease in inventories
 
  4 
  8 
(Increase) / decrease in trading properties
 
  (14)
  390 
Decrease in restricted assets
 
  - 
  1,764 
Decrease / (increase) in trade and other receivables
 
  19 
  (980)
(Decrease) / increase in trade and other payables
 
  (52)
  2,874 
Decrease in salaries and social security liabilities
 
  (86)
  (111)
Decrease in provisions
 
  (43)
  (17)
Net cash generated by continuing operating activities before income tax paid
 
  1,659 
  1,735 
Net cash generated by discontinued operating activities before income tax paid
 
  - 
  3,667 
Net cash generated by operating activities before income tax paid
 
  1,659 
  5,402 
 
 
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IRSA Inversiones y Representaciones Sociedad Anónima
 
 
 
The following table presents a detail of significant non-cash transactions occurred in the three-month period ended September 30, 2021 and 2020:
 
 
 
Three Months ended September 30, 2021
 
 
Three Months ended September 30, 2020
 
Increase in rights of use through increased lease liabilities
  - 
  37 
Increase of trade and other receivables through a decrease of associates and joint ventures
  - 
  17 
Decrease of interest in associates and joint ventures
  - 
  47,236 
Increase of investment properties through an increase of borrowings
  - 
  124 
Increase of trading properties through an increase of trade and other payables
  - 
  18 
Distribution of dividends in shares
  575 
  - 
Increase in investment properties through an increase in borrowings
  117 
  - 
 
 
16.
Trade and other payables
 
Group’s trade and other payables as of September 30, 2021 and June 30, 2021 were as follows:
 
 
 
September 30, 2021
 
 
June 30, 2021
 
Trade payables
  998 
  1,125 
Advances from sales, leases and services
  3,356 
  3,293 
Accrued invoices
  979 
  939 
Total trade payables
  5,333 
  5,357 
Taxes payable
  1,119 
  746 
Other payables
  1,002 
  990 
Total other payables
  2,121 
  1,736 
Total trade and other payables
  7,454 
  7,093 
Non-current
  1,702 
  1,516 
Current
  5,752 
  5,577 
Total
  7,454 
  7,093 
 
 
17.
Borrowings
 
The breakdown of the Group’s borrowings as of September 30, 2021 and June 30, 2021 was as follows:
 
 
 
Total as of September 30, 2021
 
 
Total as of June 30, 2021
 
 
Fair value as of September 30, 2021
 
 
Fair value as of June 30, 2021
 
NCN
  55,473 
  56,700 
  53,715 
  53,306 
Bank loans
  2,687 
  3,405 
  2,687 
  3,419 
Bank overdrafts
  4,993 
  5,775 
  4,993 
  5,770 
Other borrowings
  1,595 
  1,511 
  1,595 
  1,511 
AABE Debt
  281 
  282 
  281 
  282 
Loans with non-controlling interests
  53 
  227 
  53 
  227 
Total borrowings
  65,082 
  67,900 
  63,324 
  64,515 
Non-current
  51,226 
  51,061 
    
    
Current
  13,856 
  16,839 
    
    
Total
  65,082 
  67,900 
    
    
 
 
 
20
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
 
Issuance of IRSA Non-convertible Notes
 
On August 26, 2021, the Company issued USD 58.1 Non-convertible Notes in the local market through the following instruments:
 
●
Series XIII: denominated in 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 have been used to refinance short-term liabilities.
 
 
18.
Provisions
 
The table below shows the movements in the Group's provisions categorized by type:
 
 
 
Three Months ended September 30, 2021
 
 
Year ended June 30, 2021
 
 
 
Legal claims (i)
 
 
Investments in associates and joint ventures (ii)
 
 
Total
 
 
Total
 
Beginning of period / year
  279 
  7 
  286 
  9,033 
Additions
  25 
  - 
  25 
  11 
Share of loss of associates
  - 
  1 
  1 
  - 
Deconsolidation
  - 
  - 
  - 
  (7,754)
Recovery
  (12)
  - 
  (12)
  (57)
Used during the period / year
  (29)
  - 
  (29)
  (141)
Inflation adjustment
  (23)
  - 
  (23)
  (125)
Currency translation adjustment
  - 
  - 
  - 
  (681)
End of period / year
  240 
  8 
  248 
  286 
Non-current
    
    
  101 
  125 
Current
    
    
  147 
  161 
Total
    
    
  248 
  286 
 
(i)
Additions and recovery are included in "Other operating results, net".
(ii)
Corresponds to investments in Puerto Retiro, company that has negative equity. The increase and recovery are included in "Share of profit of associates and joint ventures ".
 
There were no significant changes to the processes mentioned in Note 18 to the Annual Financial Statements.
 
19.
Taxes
 
The details of the Group’s income tax, is as follows:
 
 
September 30, 2021
 
 
September 30, 2020
 
Current income tax (i)
  (1,426)
  (8)
Deferred income tax
  3,892 
  (12,125)
Income tax from continuing operations
  2,466 
  (12,133)
 
(i)
If the merger with IRSA CP is approved by the General Shareholders' Meeting, the income tax liability from the absorbed company will be offset with the unrecognized tax loss carryforwards which amounts to ARS 12,869.
 
 
 
21
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
Below is a reconciliation between income tax recognized and the amount which would result from applying the prevailing tax rate on profit before income tax for the three-month period ended September 30, 2021 and 2020:
 
 
 
Three Months ended September 30, 2021
 
 
Three Months ended September 30, 2020
 
Profit from continuing operations at tax rate applicable in the respective countries
  1,218 
  (10,380)
Permanent differences:
    
    
Share of profit of associates and joint ventures
  54 
  (67)
Unrecognized tax loss carryforwards
  463 
  (3,682)
Inflation adjustment permanent difference
  2,471 
  680 
Tax rate differential
  (12)
  2,494 
Non-taxable profit, non-deductible expenses and others
  (279)
  338 
Tax inflation adjustment
  (1,449)
  (1,516)
Income tax from continuing operations
  2,466 
  (12,133)
 
The gross movement in the deferred income tax account is as follows:
 
 
 
September 30, 2021
 
 
June 30, 2021
 
Beginning of period / year
  (74,643)
  (71,245)
Currency translation adjustment
  - 
  1,836 
Deconsolidation
  - 
  17,150 
Assets held for sale
  - 
  42 
Revaluation surplus reserve
  - 
  (91)
Deferred income tax charge
  3,892 
  (22,335)
End of period / year
  (70,751)
  (74,643)
Deferred income tax assets
  560 
  487 
Deferred income tax liabilities
  (71,311)
  (75,130)
Deferred income tax liabilities, net
  (70,751)
  (74,643)
 
20.
Revenues
 
 
 
Three Months ended September 30, 2021
 
 
Three Months ended September 30, 2020
 
Rental and services income
  3,909 
  1,989 
Sales of trading properties and developments
  - 
  455 
Revenue from hotels operation and tourism services
  473 
  9 
Total Group’s revenues
  4,382 
  2,453 
 
21.
Expenses by nature
 
The Group discloses expenses in the statements of income by function as part of the line items “Costs”, “General and administrative expenses” and “Selling expenses”. The following table provides additional disclosures regarding expenses by nature and their relationship to the function within the Group.
 
 
 
Costs
 
 
General and administrative expenses
 
 
Selling expenses
 
 
Total as of September 30, 2021
 
 
Total as of September 30, 2020
 
Cost of sale of goods and services
  39 
  - 
  - 
  39 
  448 
Salaries, social security costs and other personnel expenses
  643 
  310 
  20 
  973 
  848 
Depreciation and amortization
  95 
  54 
  - 
  149 
  186 
Fees and payments for services
  52 
  106 
  15 
  173 
  311 
Maintenance, security, cleaning, repairs and others
  530 
  61 
  1 
  592 
  440 
Advertising and other selling expenses
  175 
  - 
  11 
  186 
  37 
Taxes, rates and contributions
  165 
  21 
  176 
  362 
  477 
Director´s fees
  - 
  142 
  - 
  142 
  435 
Leases and service charges
  40 
  10 
  1 
  51 
  59 
Allowance for doubtful accounts, net
  - 
  - 
  111 
  111 
  69 
Other expenses
  15 
  33 
  3 
  51 
  31 
Total as of September 30, 2021
  1,754 
  737 
  338 
  2,829 
  - 
Total as of September 30, 2020
  1,673 
  982 
  686 
  - 
  3,341 
 
 
 
 
22
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
22.
Cost of goods sold and services provided
 
 
 
Total as of September 30, 2021
 
 
Total as of September 30, 2020
 
Inventories at the beginning of the period
  2,001 
  19,458 
Purchases and expenses
  1,794 
  11,742 
Currency translation adjustment
  (37)
  12,597 
Disposals
  - 
  (962)
Deconsolidation
  - 
  (5,149)
Inventories at the end of the period
  (2,004)
  (2,456)
Total costs
  1,754 
  35,230 
 
The following table presents the composition of the Group’s inventories as of September 30, 2021 and June 30, 2021:
 
 
 
Total as of September 30, 2021
 
 
Total as of June 30, 2021
 
Real estate
  1,928 
  1,922 
Others
  76 
  79 
Total inventories at the end of the period (*)
  2,004 
  2,001 
 
(*) Inventories include trading properties and inventories.
 
 
23.
Other operating results, net
 
 
 
Three Months ended September 30, 2021
 
 
Three Months ended September 30, 2020
 
Donations
  (16)
  (28)
Lawsuits and other contingencies
  (13)
  (39)
Operating interest expense
  66 
  64 
Others
  215 
  19 
Total other operating results, net
  252 
  16 
 
 
24.
Financial results, net
 
 
 
Three Months ended September 30, 2021
 
 
Three Months ended September 30, 2020
 
Finance income:
 
 
 
 
 
 
 - Interest income
  62 
  27 
 - Dividend income
  - 
  18 
 - Other finance income
  - 
  41 
Total finance income
  62 
  86 
Finance costs:
    
    
 - Interest expenses
  (1,863)
  (2,265)
 - Loss on debt swap
  - 
  (7)
 - Other finance costs
  (141)
  (299)
Subtotal finance costs
  (2,004)
  (2,571)
Capitalized finance costs
  - 
  142 
Total finance costs
  (2,004)
  (2,429)
Other financial results:
    
    
 - Fair value gain of financial assets and liabilities at fair value through profit or loss, net
  124 
  1,220 
 - Exchange differences, net
  2,842 
  (13)
 - (Loss) / gain from repurchase of negotiable obligations
  (1)
  31 
 - Gain / (loss) from derivative financial instruments, net
  3 
  (286)
 - Other financial results
  (2)
  - 
Total other financial results
  2,966 
  952 
 - Inflation adjustment
  340 
  (89)
Total financial results, net
  1,364 
  (1,480)
 
 
 
23
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
25.
Related party transactions
 
The following is a summary of the balances with related parties as of September 30, 2021 and June 30, 2021:
 
Item
 
 September 30, 2021
 
 
 June 30, 2021
 
Trade and other receivables
  2,639 
  3,258 
Investments in financial assets
  1,596 
  1,721 
Borrowings
  (983)
  (986)
Trade and other payables
  (652)
  (499)
Total
  2,600 
  3,494 
 
 Related party
 
 September 30, 2021
 
 
 June 30, 2021
 
 Description of transaction
 Item
New Lipstick LLC
  24 
  25 
 Reimbursement of expenses receivable
 Trade and other receivable
Condor
  - 
  601 
 Public companies securities
 Trade and other receivable
 
  312 
  313 
 Loans granted
 Trade and other receivable
 
  6 
  5 
 Others
 Trade and other receivable
 
  50 
  52 
 Others
 Investment in financial assets
Lipstick Management LLC
  (167)
  (175)
 Loans obtained
 Borrowings
Metropolitan 885 Third Av. LLC
  (489)
  (516)
 Loans obtained
 Borrowings
La Rural S.A.
  73 
  80 
 Loans granted
 Trade and other receivable
 
  204 
  223 
 Dividends
 Trade and other receivable
 
  (3)
  (14)
 Leases and/or rights of use payable
 Trade and other payables
Other associates and joint ventures
  - 
  2 
 Reimbursement of expenses receivable
 Trade and other receivable
 
  (38)
  (39)
 Loans obtained
 Borrowings
 
  14 
  7 
  Leases and/or rights of use receivable
 Trade and other receivable
 
  (2)
  (2)
 Unpaid contributions
 Trade and other payables
 
  7 
  7 
 Reimbursement of expenses receivable
 Trade and other receivable
 
  (97)
  (115)
 NCN
 Borrowings
 
  (24)
  (80)
 Others
 Trade and other payables
 
  12 
  26 
 Others
 Trade and other receivable
 
  1 
  1 
 Share based payments
 Trade and other payables
 
  (2)
  (7)
 Lease liabilities
 Trade and other payables
 
  9 
  8 
 Loans granted
 Trade and other receivable
Total associates and joint ventures
  (110)
  402 
 
 
Cresud
  38 
  14 
 Reimbursement of expenses receivable
 Trade and other receivable
 
  (159)
  (97)
 Corporate services payable
 Trade and other payables
 
  1,546 
  1,669 
 NCN
 Investment in financial assets
 
  (227)
  (157)
 Others
 Trade and other payables
 
  (3)
  (3)
 Share based payments
 Trade and other payables
Total parent company
  1,195 
  1,426 
 
 
Futuros y Opciones S.A.
  - 
  (104)
 Loans obtained
 Borrowings
 
  3 
  3 
 Others
 Trade and other receivable
Helmir S.A.
  (33)
  (35)
 NCN
Borrowings
Total subsidiaries of parent company
  (30)
  (136)
 
 
Directors
  (230)
  (138)
 Fees for services received
 Trade and other payables
 
  5 
  5 
 Advances
 Trade and other receivable
Finkelstein
  (159)
  - 
 Loans obtained
 Borrowings
Yad Levim LTD
  1,681 
  1,758 
 Loans granted
 Trade and other receivable
Others (1)
  (1)
  (1)
 Legal Services
 Trade and other payables
 
  - 
  (2)
 Loans obtained
 Borrowings
 
  237 
  160 
 Others
 Trade and other receivable
 
  (2)
  (1)
 Management Fee
 Trade and other payables
 
  14 
  21 
 Reimbursement of expenses receivable
 Trade and other receivable
Total directors and others
  1,545 
  1,802 
 
 
 Total at the end of the period / year
  2,600 
  3,494 
 
 
 
(1)
Includes CAMSA, Estudio Zang, Bergel & Viñes, Austral Gold, Fundación IRSA, Hamonet S.A., CAM Communication LP, Gary Gladstein and Fundación Museo de los Niños.
 
 
24
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
 
The following is a summary of the results with related parties for the three-month periods ended September 30, 2021 and 2020:
 
Related party
 
 Three Months ended September 30, 2021
 
 
 Three Months ended September 30, 2020
 
Description of transaction
 BACS
  20 
  43 
 Leases and/or rights of use
 BHN Vida S.A
  6 
  - 
 Leases and/or rights of use
 BHN Seguros Generales S.A.
  6 
  - 
 Financial operations
 Helmir
  1 
  - 
 Financial operations
 Other associates and joint ventures
  (8)
  14 
 Leases and/or rights of use
 
  - 
  (14)
 Corporate services
Total associates and joint ventures
  25 
  43 
 
Cresud
  (43)
  6 
 Leases and/or rights of use
 
  (212)
  (311)
 Corporate services
 
  (2)
  456 
 Financial operations
Total parent company
  (257)
  151 
 
 Directors
  (140)
  (785)
 Fees and remunerations
 Senior Management
  (24)
  - 
 Fees and remunerations
 
  14 
  - 
 Financial operations
 
  (5)
  - 
 Legal services
 
  - 
  (30)
 Fees and remuneration
Total others
  (155)
  (815)
 
Total at the end of the period
  (387)
  (621)
 
 
(1)
Includes Isaac Elsztain e Hijos, CAMSA. Hamonet S.A., Ramat Hanassi, Estudio Zang, Bergel y Viñes, Austral Gold, La Rural, New Lipstick, Condor, TGLT and Fundación IRSA.
 
The following is a summary of the transactions with related parties for the three-month periods ended September 30, 2021 and 2020:
 
Related party
 
 Three Months ended September 30, 2021
 
 
 Three Months ended September 30, 2020
 
Quality
  27 
  12 
Condor
  577 
  - 
Total capital contributions
  604 
  12 
We Are Appa (former Pareto)
  - 
  81 
Total other transactions
  - 
  81 
 
 
 
25
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
26.
CNV General Resolution N° 622
 
As required by Section 1°, Chapter III, Title IV of CNV General Resolution N° 622, below there is a detail of the notes to the Unaudited Condensed Interim Consolidated Financial Statements that disclose the information required by the Resolution in Exhibits.
 
Exhibit A - Property, plant and equipment
Note 8 Investment properties and Note 9 Property, plant and equipment
Exhibit B - Intangible assets
Note 11 Intangible assets
Exhibit C - Investment in associates
Note 7 Investments in associates and joint ventures
Exhibit D - Other investments
Note 13 Financial instruments by category
Exhibit E – Provisions
Note 18 Provisions
Exhibit F - Cost of sales and services provided
Note 22 Cost of goods sold and services provided
Exhibit G - Foreign currency assets and liabilities
Note 27 Foreign currency assets and liabilities
 
27.
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 09.30.2021
 
 
Total as of 06.30.2021
 
Assets
 
 
 
 
 
 
 
 
 
 
 
 
Trade and other receivables
 
 
 
 
 
 
 
 
 
 
 
 
US Dollar
  35 
  98.540 
  3,433 
  3,552 
Euros
  0 
  113.883 
  26 
  26 
Receivables with related parties:
    
    
    
    
US Dollar
  20 
  98.740 
  2,018 
  2,100 
Total trade and other receivables
    
    
  5,477 
  5,678 
Investments in financial assets
    
    
    
    
US Dollar
  8 
  98.540 
  770 
  738 
Pounds
  1 
  132.625 
  82 
  109 
Nuevo Israel Shekel
  20 
  30.590 
  618 
  667 
Investments with related parties:
    
    
    
    
US Dollar
  23 
  98.740 
  2,282 
  2,450 
Total investments in financial assets
    
    
  3,752 
  3,964 
Cash and cash equivalents
    
    
    
    
US Dollar
  10 
  98.540 
  1,012 
  1,152 
Euros
  0 
  113.883 
  1 
  1 
Total cash and cash equivalents
    
    
  1,013 
  1,153 
Total Assets
    
    
  10,242 
  10,795 
 
    
    
    
    
Liabilities
    
    
    
    
Trade and other payables
    
    
    
    
US Dollar
  11 
  98.740 
  1,111 
  1,321 
Euros
  0 
  114.361 
  14 
  35 
Payables to related parties:
    
    
    
    
US Dollar
  0 
  98.740 
  7 
  58 
Total Trade and other payables
    
    
  1,132 
  1,414 
Borrowings
    
    
    
    
US Dollar
  539 
  98.740 
  53,242 
  54,744 
Borrowings with related parties
    
    
    
    
US Dollar
  15 
  98.740 
  1,500 
  1,590 
Total Borrowings
    
    
  54,742 
  56,334 
Derivative financial instruments
    
    
    
    
US Dollar
  0 
  98.740 
  45 
  63 
Total derivative financial instruments
    
    
  45 
  63 
Lease liabilities
    
    
    
    
US Dollar
  8 
  98.740 
  824 
  855 
Lease liabilities with related parties
    
    
    
    
US Dollar
  0 
  98.740 
  2 
  7 
Total lease liabilities
    
    
  826 
  862 
Total Liabilities
    
    
  56,745 
  58,673 
 
(1) Considering foreign currencies those that differ from each Group’s subsidiaries functional currency at each period/year-end.
(2) Stated in millions of each foreign currency.
(3) Exchange rates as of September 30, 2021 according to Banco de la Nación Argentina.
 
 
26
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
28.
Results from discontinued operations
 
The results of the discontinued operations include the IDBD / DIC operations which were deconsolidated in the comparative period (see Note 4.G to the Annual Financial Statements).
 
 
 
 
Three Months ended September 30, 2021
 
 
Three Months ended September 30, 2020
 
Revenues
  - 
  41,357 
Costs
  - 
  (33,557)
Gross profit
  - 
  7,800 
Net gain from fair value adjustment of investment properties
  - 
  (30)
General and administrative expenses
  - 
  (4,760)
Selling expenses
  - 
  (4,535)
Other operating results, net
  - 
  1,548 
Profit from operations
  - 
  23 
Share of profit of associates and joint ventures
  - 
  786 
Profit before financial results and income tax
  - 
  809 
Finance income
  - 
  574 
Finance cost
  - 
  (7,541)
Other financial results
  - 
  498 
Financial results, net
  - 
  (6,469)
Profit before income tax
  - 
  (5,660)
Income tax
  - 
  302 
Loss from operations that are discontinued
  - 
  (5,358)
Loss for loss of control
  - 
  (4,394)
Loss from discontinued operations
  - 
  (9,752)
 
    
    
Loss for the period from discontinued operations attributable to:
    
    
Equity holders of the parent
  - 
  (7,702)
Non-controlling interest
  - 
  (2,050)
Loss per share from discontinued operations attributable to equity holders of the parent:
    
    
Basic
  - 
  (13.39)
Diluted
  - 
  (13.39)
 
 
29.
Other relevant events of the period
 
Economic context in which the Group operates
 
The Group operates in a complex context both due to macroeconomic conditions, whose main variables have recently experienced strong volatility, as well as regulatory, social, and political conditions, both nationally and internationally.
 
The results from operations may be affected by fluctuations in the inflation and the exchange rate of the Argentine peso against other currencies, mainly the dollar, changes in interest rates which have an impact on the cost of capital, changes in government policies, capital controls and other political or economic events both locally and internationally.
 
In December 2019, a new strain of coronavirus (SARS-COV-2), which caused 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 measures to contain the spread of the virus, including imposing travel restrictions and closing borders, closing businesses deemed non-essential, instructing residents to practice social distancing, implementing lockdowns, among other measures. The ongoing pandemic and these extraordinary government measures are affecting global economic activity, resulting in significant volatility in global financial markets.
 
 
27
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
On March 3, 2020, the first case of COVID-19 was registered in the country and as of today, more than 5,290,000 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. Due to the flexibility that has occurred in the economic activities since the beginning of this fiscal year and as of the date of issuance of these financial statements, 100% of the shopping malls are operational.
 
At the local environment, the following circumstances were observed:
 
●
In August 2021, the Monthly Economic Activity Estimator (“EMAE” in Spanish) reported by the National Institute of Statistics and Censuses (“INDEC” in Spanish), registered a variation of 12.8% compared to the same month of 2020, and 1.1% compared to the previous month.
 
●
The annual retail inflation reached 52.47% in the last 12 months. The survey on market expectations prepared by the Argentine Central Bank in September 2021, called the Market Expectations Survey (“REM” in Spanish), estimates a retail inflation of 48.2% i.a. for December 2021 and 46.0% for December 2022. Analysts participating in the REM forecast a rebound in economic activity in 2021, reaching an economic growth of 7.6%.
 
●
In the period from September 2020 to September 2021, the Argentine peso depreciated 29.6% against the US dollar according to the wholesale average exchange rate of Banco de la Nación Argentina. Given the exchange restrictions in force since August 2019, as of September 30, 2021, there is an exchange gap of approximately 78.9% between the official price of the dollar and its price in parallel markets, which impacts the level of activity in the economy and affects the level of reserves of the Argentine Central Bank. Additionally, these exchange restrictions, or those that may be dictated in the future, could affect the Group's ability to access the Single Free Exchange Market (“MULC” in Spanish) to acquire the necessary currencies to meet its financial obligations.
 
COVID-19 PANDEMIC
 
As described above, the COVID-19 pandemic has adversely impacted both the global economy and the Argentine economy and the Group's business, mainly in Shopping Malls and Hotels segments. Since the beginning of fiscal year 2022, and until the date of presentation of the financial statements, the Company's shopping malls are fully operational, as well as the office buildings, despite the remote work modality that some tenants continue to apply. Regarding hotels, although they have been operating since December 2020, the sector continues working with certain restrictions on air flows and the influx of international 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 Group’s ability to meet its financial commitments for the next twelve months.
 
The Group is closely monitoring the situation and taking all necessary measures to preserve human life and the Group's businesses.
 
 
 
28
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
 
30.
Subsequent events
 
IRSA Shareholders’ Meeting
 
On October 21, 2021, the Ordinary Shareholders’ Meeting approved among others:
 
Partially write off the special reserve in the amount of ARS 30,693 which, restated for inflation at the time of the shareholders’ meeting, amounts to the sum of ARS 33,543, and use it for the total absorption of the negative result for the fiscal year ended June 30, 2021.
 
 
Sale of Catalinas Tower building
 
On November 2, 2021, our subsidiary, IRSA CP, completed the sale of three medium-height floors of the “261 Della Paolera” tower located in the Catalinas district of the Autonomous City of Buenos Aires for a total area of approximately 3,582 square meters and 36 parking lots located in the building.
 
The transaction price was approximately ARS 3,197, which as of the date of issuance of these financial statements were paid in full.
 
 
29
 
 
REVIEW REPORT ON THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
 
To the Shareholders, President and Directors of
IRSA Inversiones y Representaciones Sociedad Anónima
Legal address: Carlos Della Paolera 261 - 9th floor
Autonomous City of Buenos Aires
Tax Registration Number: 30-52532274-9
 
Introduction
We have reviewed the accompanying unaudited condensed interim consolidated financial statements of IRSA Inversiones y Representaciones Sociedad Anónima and its subsidiaries (“the Company”), which comprise the unaudited condensed interim consolidated statement of financial position at September 30, 2021, the unaudited condensed interim consolidated statements of income and other comprehensive income for the three-month period ended September 30, 2021, the unaudited condense interim consolidated statements of changes in shareholders’ equity and of cash flows for the three-month period then ended, and selected explanatory notes.
 
The balances and other information for the fiscal year ended on June 30, 2021 and its interim periods are an integral part of the financial statements mentioned above; therefore, they must be considered in connection with these financial statements.
 
Management’s responsibility
The Board of Directors of the Company is responsible for the preparation and presentation of these unaudited condensed interim consolidated financial statements in accordance with International Financial Reporting Standards, adopted by the Argentine Federation of Professional Councils in Economic Sciences (FACPCE) as professional accounting standards and included by the National Securities Commission (CNV) in its regulations, as approved by the International Accounting Standards Board (IASB), and is therefore responsible for the preparation and presentation of the unaudited condensed interim consolidated financial statements mentioned in the first paragraph, in accordance with International Accounting Standard 34 Interim Financial Information (IAS 34).
 
Scope of our review
Our review was limited to the application of the procedures established under International Standards on Review Engagements ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity, adopted as a review standard in Argentina by Technical Pronouncement No. 33 of the FACPCE and approved by the International Auditing and Assurance Standards Board (IAASB). A review of interim financial information consists of inquiries of Company staff responsible for preparing the information included in the unaudited condensed interim consolidated financial statements and of analytical and other review procedures. This review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion on the consolidated statement of financial position and the consolidated statements of income and other comprehensive income and of cash flows of the Company.
 
 
 
30
 
 
Conclusion
On the basis of our review, nothing has come to our attention that causes us to believe that the unaudited condensed interim consolidated financial statements mentioned in the first paragraph of this report have not been prepared, in all material respects, in accordance with International Accounting Standard 34 Interim financial reporting.
 
Report on compliance with current regulations
In accordance with current regulations, we report, in connection with IRSA Inversiones y Representaciones Sociedad Anónima, that:
 
a)
the unaudited condensed interim consolidated financial statements of IRSA Inversiones y Representaciones Sociedad Anónima have not been transcribed into the Inventory and Balance Sheet book and, except for the above mentioned situation, as regards those matters that are within our competence, they are in compliance with the provisions of the General Companies Law and pertinent resolutions of the National Securities Commission;
 
b)
the unaudited condensed interim separate financial statements of IRSA Inversiones y Representaciones Sociedad Anónima arise from accounting records carried in all formal aspects in accordance with legal requirements except for i) the lack of transcription to the Inventories and Balance Sheet Book, and ii) the lack of transcription to the General Journal Book of the accounting entries corresponding to the month of September 2021;
 
c)
we have read the Business Summary (“Reseña Informativa”), on which we have no observations to make regarding matters that are within our competence;
 
d)
at September 30, 2021 the debt of IRSA Inversiones y Representaciones Sociedad Anónima accrued in favor of the Argentine Integrated Social Security System, as shown by the Company’s accounting records, amounted to ARS 124,333.53, which was not due at that date.
 
Autonomous City of Buenos Aires, November 8, 2021
 
PRICE WATERHOUSE & CO. S.R.L.
                                                                    (Partner)
 
ABELOVICH, POLANO & ASOCIADOS S.R.L.
                                                                                      (Partner)
C.P.C.E.C.A.B.A. V° 1 F° 17
 
C.P.C.E.C.A.B.A. V° 1 F° 30
Walter ZablockyPublic Accountant (UNLP)
C.P.C.E.C.A.B.A. V. 340 F. 156
 
Noemí I. Cohn
Public Accountant (UBA)
C.P.C.E. C.A.B.A. V. 126 F. 135
 
 
 
 
31
 
 

 
IRSA Inversiones y Representaciones Sociedad Anónima
 
Unaudited Condensed Interim Separate Financial Statements as of September 30, 2021 and for the three-month period ended as of that date, presented comparatively
 
 
 
 
32
IRSA Inversiones y Representaciones Sociedad Anónima
Unaudited Condensed Interim Separate Statements of Financial Position
as of September 30, 2021 and June 30, 2021
(All amounts in millions, except otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina
 
 
Note
  09.30.2021 
  06.30.2021 
ASSETS
 
    
    
Non-current assets
 
    
    
Investment properties
7
  41,226 
  42,221 
Property, plant and equipment
8
  33 
  33 
Trading properties
9
  650 
  650 
Intangible assets
10
  1,004 
  1,004 
Rights of use assets
 
  9 
  10 
Investments in subsidiaries, associates and joint ventures
6
  75,941 
  76,840 
Trade and other receivables
12
  1,104 
  1,278 
Total non-current assets
 
  119,967 
  122,036 
Current assets
 
    
    
Trading properties
9
  121 
  121 
Inventories
 
  1 
  1 
Trade and other receivables
12
  1,139 
  1,024 
Income tax and MPIT credit
 
  7 
  6 
Investments in financial assets
11
  259 
  267 
Cash and cash equivalents
11
  595 
  589 
Total current assets
 
  2,122 
  2,008 
TOTAL ASSETS
 
  122,089 
  124,044 
SHAREHOLDERS’ EQUITY
 
    
    
Shareholders' equity (according to corresponding statements)
 
  67,089 
  67,860 
TOTAL SHAREHOLDERS’ EQUITY
 
  67,089 
  67,860 
LIABILITIES
 
    
    
Non-current liabilities
 
    
    
Trade and other payables
13
  49 
  5 
Borrowings
14
  23,050 
  17,592 
Deferred income tax liabilities
15
  19,746 
  21,125 
Provisions
16
  6 
  29 
Lease liabilities
 
  5 
  6 
Total non-current liabilities
 
  42,856 
  38,757 
Current liabilities
 
    
    
Trade and other payables
13
  682 
  783 
Salaries and social security liabilities
 
  2 
  2 
Borrowings
14
  11,420 
  16,599 
Provisions
16
  35 
  38 
Lease liabilities
 
  5 
  5 
Total current liabilities
 
  12,144 
  17,427 
TOTAL LIABILITIES
 
  55,000 
  56,184 
TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES
 
  122,089 
  124,044 
 
The accompanying notes are an integral part of these Financial Statements.
 
 
Company Name IRSA Inversiones y Representaaciones Sociedad Anónima
 
 
 
 
 


By:  
/s/ Saúl Zang
 
 
 
Name Saúl Zang
 
 
 
Title Vicepresident I
 
 
 
 

33
IRSA Inversiones y Representaciones Sociedad Anónima
Unaudited Condensed Interim Separate Statements of Income and Other Comprehensive Income
for the three-month period ended September 30, 2021 and 2020
 (All amounts in millions, except otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina
 
 
Note
  09.30.2021 
  09.30.2020 
Revenues
17
  41 
  1,106 
Costs
18
  (51)
  (873)
(Loss) / gross profit
 
  (10)
  233 
Net gain from fair value adjustment of investment properties
7
  (847)
  11,096 
General and administrative expenses
18
  (166)
  (164)
Selling expenses
18
  (30)
  (18)
Other operating results, net
19
  211 
  (6)
(Loss) / profit from operations
 
  (842)
  11,141 
Share of profit of subsidiaries, associates and joint ventures
6
  (1,598)
  9,476 
(Loss) / profit before financial results and income tax
 
  (2,440)
  20,617 
Finance income
20
  8 
  16 
Finance costs
20
  (718)
  (1,336)
Other financial results
20
  1,339 
  (265)
Inflation adjustment
20
  (172)
  (516)
Financial results, net
 
  457 
  (2,101)
(Loss) / profit before income tax
 
  (1,983)
  18,516 
Income tax
15
  1,379 
  (5,727)
(Loss) / profit for the period
 
  (604)
  12,789 
 
    
    
Other comprehensive income:
 
    
    
Items that may be reclassified subsequently to profit or loss:
 
    
    
Share of other comprehensive loss of subsidiaries, associates and joint ventures
 
  - 
  (344)
Currency translation adjustment of subsidiaries, associates and joint ventures
 
  (162)
  (5,299)
Total other comprehensive loss for the period (i)
6
  (162)
  (5,643)
Total comprehensive (loss)/ profit for the period
 
  (766)
  7,146 
 
    
    
(Loss) / profit per share for the period (ii)
 
    
    
Basic
 
  (0.92)
  22.24 
Diluted
 
  (0.92)
  22.16 
 
(i)
Components of other comprehensive income have no impact on income tax.
(ii)
The loss/profit per share have been calculated using 656,700,315 shares at 09.30.21 and 575,377,891 at 09.30.20. If 656,700,315 shares had been used for the calculation, the result per share would be ARS 19.47 for 09.30.20. See Note 17 to the Annual Financial Statements.
 
The accompanying notes are an integral part of these Financial Statements.
 
 
Company Name IRSA Inversiones y Representaaciones Sociedad Anónima
 
 
 
 
 


By:  
/s/ Saúl Zang
 
 
 
Name Saúl Zang
 
 
 
Title Vicepresident I
 

 

 
34
IRSA Inversiones y Representaciones Sociedad Anónima
Unaudited Condensed Interim Separate Statements of Changes in Shareholders’ Equity
for the three-month period ended September 30, 2021
(All amounts in millions, except otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina
 
 
 
Share capital
 
 
Treasury shares
 
 
Inflation adjustment of Share Capital and Treasury Shares (1)
 
 
Share premium
 
 
Additional Paid-in capital from Treasury Shares
 
 
Warrants
 
 
Legal reserve
 
 
CNV 609/12 Resolution reserve
 
 
 Other reserves (2)
 
 
Accumulated deficit
 
 
Total Shareholders’ equity
 
Balance as of June 30, 2021
  657 
  2 
  22,596 
  26,347 
  162 
  1,944 
  1,752 
  15,437 
  32,506 
  (33,543)
  67,860 
Loss for the period
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (604)
  (604)
Other comprehensive loss for the period
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (162)
  - 
  (162)
Exercise warrants (3)
  - 
  - 
  - 
  3 
  - 
  (1)
  - 
  - 
  - 
  - 
  2 
Changes in non-controlling interest
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  2 
  - 
  2 
Other changes in subsidiaries` equity
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (9)
  - 
  (9)
Balance as of September 30, 2021
  657 
  2 
  22,596 
  26,350 
  162 
  1,943 
  1,752 
  15,437 
  32,337 
  (34,147)
  67,089 
 
(1) Includes ARS 1 of inflation adjustment of treasury shares. See Note 16 of Consolidated Financial Statements as of June 30, 2021.
(2) Between September 17,2021 and September 25, 2021, 30,741 warrants were exercised so the equivalent in shares was issued.
(3) The composition of Other reserves of the Company as of September 30, 2021 is as follows:
 
 
 
Cost of Treasury shares
 
 
Changes in non-controlling interest
 
 
Reserve for share-based payments
 
 
Reserve for future dividends
 
 
Currency translation adjustment reserve
 
 
Special reserve
 
 
Other reserves of subsidiaries
 
 
Total Other reserves
 
Balance as of June 30, 2021
  (279)
  (6,525)
  315 
  2,777 
  707 
  34,435 
  1,076 
  32,506 
Other comprehensive loss for the period
  - 
  - 
  - 
  - 
  (162)
  - 
  - 
  (162)
Changes in non-controlling interest
  - 
  2 
  - 
  - 
  - 
  - 
  - 
  2 
Other changes in subsidiaries` equity
  - 
  - 
  - 
  - 
  (9)
  - 
  - 
  (9)
Balance as of September 30, 2021
  (279)
  (6,523)
  315 
  2,777 
  536 
  34,435 
  1,076 
  32,337 
 
There are no cumulative unpaid dividends on preferred.
 
The accompanying notes are an integral part of these Financial Statements.
 
 
Company Name IRSA Inversiones y Representaaciones Sociedad Anónima
 
 
 
 
 


By:  
/s/ Saúl Zang
 
 
 
Name Saúl Zang
 
 
 
Title Vicepresident I
 
 
 
 
35
IRSA Inversiones y Representaciones Sociedad Anónima

Unaudited Condensed Interim Separate Statements of Changes in Shareholders’ Equity
for the three-month period ended September 30, 2020
(All amounts in millions, except otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina
 
 
 
 
Share capital
 
 
Treasury shares
 
 
Inflation adjustment of Share Capital and Treasury Shares (1)
 
 
Share premium
 
 
Additional Paid-in capital from Treasury Shares
 
 
Warrants
 
 
Legal reserve
 
 
CNV 609/12 Resolution reserve
 
 
Other reserves (2)
 
 
Retained earnings
 
 
Total Shareholders’ equity
 
Balance as of June 30, 2020
  575 
  2 
  22,586 
  23,866 
  156 
  - 
  796 
  15,436 
  11,486 
  17,016 
  91,919 
Profit for the period
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  12,789 
  12,789 
Other comprehensive loss for the period
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (5,643)
  - 
  (5,643)
Reserve for share-based payments
  - 
  - 
  - 
  - 
  3 
  - 
  - 
  - 
  (3)
  - 
  - 
Changes in non-controlling interest
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  53 
  - 
  53 
Other changes in subsidiaries` equity
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  9,035 
  - 
  9,035 
Balance as of September 30, 2020
  575 
  2 
  22,586 
  23,866 
  159 
  - 
  796 
  15,436 
  14,928 
  29,805 
  108,153 
 
(1) Includes ARS 1 of inflation adjustment of treasury shares. See Note 16 of Consolidated Financial Statements as of June 30, 2020.
 
(2) The composition of Other reserves of the Company as of September 30, 2020 is as follows:
 
 
 
Cost of Treasury shares
 
 
Changes in non-controlling interest
 
 
Reserve for share-based payments
 
 
Reserve for future dividends
 
 
Currency translation adjustment reserve
 
 
Special reserve
 
 
Other reserves of subsidiaries
 
 
Total Other reserves
 
Balance as of June 30, 2020
  (281)
  (6,841)
  320 
  2,777 
  (1,194)
  17,063 
  (358)
  11,486 
Other comprehensive loss for the period
  - 
  - 
  - 
  - 
  (5,299)
  - 
  (344)
  (5,643)
Reserve for share-based payments
  2 
  - 
  (5)
  - 
  - 
  - 
  - 
  (3)
Dividend distribution in shares
  - 
  53 
  - 
  - 
  - 
  - 
  - 
  53 
Changes in non-controlling interest
  - 
  (79)
  - 
  - 
  7,675 
  - 
  1,439 
  9,035 
Balance as of September 30, 2020
  (279)
  (6,867)
  315 
  2,777 
  1,182 
  17,063 
  737 
  14,928 
 
There are no cumulative unpaid dividends on preferred shares.
 
The accompanying notes are an integral part of these financial statements.


 
Company Name IRSA Inversiones y Representaaciones Sociedad Anónima
 
 
 
 
 


By:  
/s/ Saúl Zang
 
 
 
Name Saúl Zang
 
 
 
Title Vicepresident I
 
 
 
36
IRSA Inversiones y Representaciones Sociedad Anónima
Unaudited Condensed Interim Separate Statements of Cash Flows
for the three-month period ended September 30, 2021 and 2020
(All amounts in millions, except otherwise indicated)
 
Free translation from the original prepared in Spanish for publication in Argentina
 
 
Note
  09.30.2021 
  09.30.2020 
Operating activities
 
    
    
(Loss) / profit for the period
 
  (604)
  12,789 
Adjustments:
 
    
    
Income tax
15
  (1,379)
  5,727 
Amortization and depreciation
18
  2 
  3 
Gain from disposal of trading properties
 
  - 
  (242)
Financial results, net
 
  (497)
  6,982 
Increase in trading properties
9
  - 
  (23)
Net gain from fair value adjustment of investment properties
7
  847 
  (11,096)
Share of profit of subsidiaries, associates and joint ventures
6
  1,598 
  (9,476)
Fair value adjustment of investments in financial assets
 
  - 
  (6)
Provisions and allowances
 
  (4)
  6 
Changes in operating assets and liabilities:
 
    
    
Decrease in salaries and social security liabilities
 
  - 
  (5)
Increase in trade and other receivables
 
  102 
  313 
(Decrease) / increase in trade and other payables
 
  (88)
  933 
Net cash flow (used in)/ generated by operating activities
 
  (23)
  5,905 
Investing activities
 
    
    
Capital contributions to subsidiaries, associates and joint ventures
6
  (5)
  (15)
Acquisition of property, plant and equipment
8
  (1)
  (24)
Acquisition of intangible assets
10
  - 
  (2)
Increase of investments in financial assets
 
  (77)
  (944)
Proceeds from sale of investment properties
 
  148 
  1,360 
Proceeds from sale of investments in financial assets
 
  153 
  - 
Proceeds from borrowings granted to subsidiaries, associates and joint ventures
 
  - 
  5 
Net cash flow generated from investing activities
 
  218 
  380 
Financing activities
 
    
    
Short-term loans obtained, net
 
  312 
  1,047 
Payment of borrowings
 
  (351)
  (340)
Interests paid
 
  (986)
  (1,564)
Loans obtained from subsidiaries, associates and joint ventures
 
  90 
  - 
Payment of loans from subsidiaries, associates and joint ventures
 
  (1,842)
  (32)
Payment of NCN
 
  (80)
  (12,658)
Issuance of NCN
 
  2,853 
  3,696 
Repurchase of NCN
 
  (177)
  - 
Payments liabilities for lease
 
  (1)
  - 
Payments from derivative financial instruments
 
  - 
  (30)
Proceeds from warrants exercise
 
  2 
  - 
Net cash flow used in financing activities
 
  (180)
  (9,881)
Increase/ (decrease) in cash and cash equivalents, net
 
  15 
  (3,596)
Cash and cash equivalents at the beginning of the period
11
  589 
  3,617 
Foreign exchange gain of cash and changes in fair value of cash equivalents
 
  (9)
  - 
Cash and cash equivalents at the end of the period
11
  595 
  21 
 
    
    
Additional information
 
    
    
Currency translation adjustment
 
  (162)
  (5,299)
Other comprehensive gain / (loss) of subsidiaries
 
  - 
  (344)
Changes in non-controlling interest
 
  2 
  53 
Other changes in subsidiaries` equity
 
  (9)
  9,035 
Increase in borrowings through an increase in trading properties
 
  - 
  142 
Issuance of NCN
 
  2,911 
  557 
Decrease in loans obtained from subsidiaries, associates and joint ventures through an increase in investments in subsidiaries
 
  198 
  - 
Decrease in dividends receivable through an increase in Investments in associates and joint ventures
 
  136 
  - 
Increase in loans with subsidiaries through an increase in investments in subsidiaries
 
  535 
  - 
 
  The accompanying notes are an integral part of these Financial Statements.
 
 
Company Name IRSA Inversiones y Representaaciones Sociedad Anónima
 
 
 
 
 


By:  
/s/ Saúl Zang
 
 
 
Name Saúl Zang
 
 
 
Title Vicepresident I
 
 
 
37
IRSA Inversiones y Representaciones Sociedad Anónima
 Notes to the Unaudited Condensed Interim Consolidated Separate Financial Statements
(All amounts in millions, except otherwise indicated)
 
Free translation from the original prepared in Spanish for publication in Argentina
 
 
1.
General information and company’s business
 
IRSA Inversiones y Representaciones Sociedad Anónima (“IRSA” or “The Company”) was founded in 1943, it is primarily engaged in managing real estate holdings in Argentina since 1991.
 
IRSA is a corporation incorporated and domiciled in Argentina. The registered office is Carlos Della Paolera 261, 9th. Floor, Buenos Aires, Argentina.
 
The Company owns, manages and develops, directly and indirectly through its subsidiaries, a portfolio of office and other rental properties in Buenos Aires. In addition, IRSA through its subsidiaries, associates and joint ventures manages and develops shopping malls and branded hotels across Argentina, and also office properties in the United States and in numerous markets and industry sectors in Israel, such as real estate, supermarkets, insurance, telecommunications, etc.
 
See Note 4.E to the Unaudited Condensed Interim Consolidated Financial Statements.
 
These Unaudited Condensed Interim Separate Financial Statements have been approved for issue by the Board of Directors on November 8, 2021.
 
2.
Basis of preparation of the Unaudited Condensed Interim Separate Financial Statements
 
2.1. 
Basis of preparation
 
These financial statements have been prepared in accordance with IAS 34 “Interim financial reporting” and should therefore be read in conjunction with the Group's annual Consolidated Financial Statements as of June 30, 2021 prepared in accordance with IFRS. Also, these financial statements include additional information required by Law No. 19,550 and / or regulations of the CNV. Such information is included in the notes to these financial statements, as accepted by IFRS.
 
These financial statements for the interim periods of three month ended September 30, 2021 and 2020 have not been audited. Management considers that they include all the necessary adjustments to fairly present the results of each period. Intermediate period results do not necessarily reflect the proportion of the Group's results for the entire fiscal years.
 
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 by non-monetary items. This requirement also includes the comparative information of the financial statements.
 
In order to conclude on whether an economy is categorized as highly inflationary in the terms of IAS 29, the standard details a series of factors to be considered, including the existence of an accumulated inflation rate in three years that approximates or exceed 100%. Accumulated inflation in Argentina in three years is over 100%. For that reason, in accordance with IAS 29, Argentina must be considered a country with a highly inflationary economy starting July 1, 2018.
 
In relation to the inflation index to be used and in accordance with FACPCE Resolution No. 539/18, it is determined based on the Wholesale Price Index (IPIM) until 2016, considering the average variation of the Consumer Price Index (CPI) of the Autonomous City of Buenos Aires for the months of November and December 2015, because during those two months there were no national IPIM measurements. Then, from January 2017, the National Consumer Price Index (National CPI) is considered. The table below presents the index for the period ended September 30, 2021, according to official statistics (INDEC) and following the guidelines described in Resolution 539/18
 
Price variation
 
Quarter ended September 30, 2021
 
 
  9%
 
As a consequence of the aforementioned, these Unaudited Consolidated Financial Statements as of September 30, 2021 were restated in accordance with IAS 29.
 
2.2. Significant accounting policies
 
The accounting policies adopted in the preparation of these Unaudited Condensed Interim Separate Financial Statements are consistent with those applied in the Annual Financial Statements as of June 30, 2021. The main accounting policies are described in Note 2 of those Annual Financial Statements.
 
2.3.
Comparability of information
 
The amounts as of June 30, 2021 and September 30, 2020, which are disclosed for comparative purposes, arise from the financial statements at said dates restated in accordance with IAS 29 (note 2.1).
 
2.4.            
Use of estimates
 
The preparation of Financial Statements at a certain date requires Management to make estimates 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 period. Actual results might differ from the estimates and evaluations made at the date of preparation of these Unaudited Condensed Interim Separate Financial Statements. In the preparation of these Unaudited Condensed Interim Separate Financial Statements, the main significant judgments made by Management in applying the Company’s accounting policies and the major sources of uncertainty were the same that the Company used in the preparation of the Separate Financial Statements for the fiscal year ended June 30, 2021, described in Note 3 to those financial statements.
 
3. 
Seasonal effects on operations
 
See Note 3 to the Unaudited Condensed Interim Consolidated Financial Statements.
 
4.            
Acquisitions and disposals
 
Significant acquisitions and disposals of the Company and/or its subsidiaries for the three-month period ended September 30, 2021 are detailed in Note 4 to the Unaudited Condensed Interim Consolidated Financial Statements.
 
5.            
Financial risk management and fair value estimates
 
These Unaudited Condensed Interim Financial Statements do not include all the information and disclosures of the risk management, so they should be read together with the Annual Separate Financial Statements as of June 30, 2021. There has been no changes in the risk management or risk management policies applied by the Company since the end of the annual fiscal year. See notes to the Unaudited Condensed Interim Consolidated Financial Statements. Furthermore, there have been no transfers between the different hierarchies used to assess the fair value of the Company’s financial instruments.
 
6.            
Information about the main subsidiaries, associates and joint ventures
 
The Company conducts its business through several operating and holding subsidiaries, associates and joint ventures. Its main subsidiaries include IRSA CP, Tyrus and Efanur. The main associates include BHSA.
 
The Company indirectly participated, until September 25, 2020, through Tyrus, in IDB Development Ltd. (“IDBD”) and Discount Investment Company Ltd (“DIC”), since on that date the insolvency and liquidation of IDBD was decreed generating the loss of control of both companies.
 
 
38
IRSA Inversiones y Representaciones Sociedad Anónima
 
Detailed below is the evolution of investments in subsidiaries, associates and joint ventures of the Company, for the three-month period ended September 30, 2021 and for the year ended June 30, 2021:
 
 
  09.30.2021 
  06.30.2021 
Beginning of period / year
  76,840 
  108,762 
Share of profit
  (1,598)
  (25,940)
Other comprehensive loss
  (162)
  (5,334)
Devaluation
  - 
  (43)
Capital contributions (Note 21)
  141 
  3,893 
Changes in non-controlling interest
  2 
  404 
Dividends
  - 
  (11,128)
Acquisition/ sale of interest
  727 
  (2,359)
Other changes in subsidiaries’ equity
  (9)
  8,585 
End of the period / year
  75,941 
  76,840 
 
 
  Name of the entity
    % ownership interest            
    Company´s interest in equity           
    Company’s interest in comprehensive income   
  Subsidiaries
   09.30.2021   
   06.30.2021   
   09.30.2021   
   06.30.2021   
   09.30.2021   
   06.30.2021   
IRSA CP
  79.92%
  78.07%
  60,995 
  61,725 
  (2,517)
  14,222 
Tyrus
  100.00%
  100.00%
  3,790 
  4,019 
  272 
  (10,309)
Efanur
  100.00%
  100.00%
  3,141 
  2,959 
  181 
  (168)
Ritelco S.A.
  100.00%
  100.00%
  920 
  990 
  (69)
  60 
Inversora Bolívar S.A.
  96.87%
  96.57%
  957 
  1,005 
  (58)
  (18)
ECLSA
  98.93%
  99.08%
  2,073 
  1,922 
  597 
  245 
Palermo Invest S.A.
  97.35%
  97.34%
  985 
  1,032 
  (59)
  (21)
NFSA
  76.34%
  76.34%
  468 
  501 
  (32)
  (77)
Llao Llao Resort S.A.
  50.00%
  50.00%
  514 
  549 
  (35)
  (9)
HASAU
  100.00%
  100.00%
  287 
  303 
  (16)
  (28)
Liveck S.A.
  9.30%
  9.30%
  77 
  79 
  (2)
  (1)
Associates
    
    
    
    
    
    
BHSA (1) (2)
  4.93%
  4.93%
  872 
  931 
  (58)
  (15)
Manibil S.A. (3)
  0.00%
  0.00%
  - 
  - 
  - 
  (12)
BACS (2)
  37.72%
  37.72%
  512 
  526 
  (14)
  2 
Joint ventures
    
    
    
    
    
    
IRSA - Galerías Pacífico S.A. - U.T.
  50.00%
  50.00%
  288 
  233 
  54 
  (45)
Cyrsa S.A.
  50.00%
  50.00%
  62 
  66 
  (4)
  7 
Total subsidiaries, associates and joint ventures
    
    
  75,941 
  76,840 
  (1,760)
  3,833 
 
 
Name of the entity
Location of business / Country of incorporation 
Main activity 
  Common shares 1 vote  
    Latest financial statements issued
Subsidiaries
  

 
   Share capital (nominal value)   
   Profit / (loss) for the period   
   Shareholders’ equity   
IRSA CP
Argentina
Real estate
  432,545,580 
  54,123 
  (1,709)
  77,598 
Tyrus
Uruguay
Investment
  21,317,148,247 
  21,317 
  87 
  3,595 
Efanur
Uruguay
Investment
  461,751,428 
  462 
  333 
  3,141 
Ritelco S.A.
Uruguay
Investment
  453,321,177 
  453 
  (70)
  921 
Inversora Bolívar S.A.
Argentina
Investment
  1,461,147,188 
  1,513 
  (60)
  991 
ECLSA
Argentina
Investment
  1,710,302,484 
  1,729 
  67 
  1,551 
Palermo Invest S.A.
Argentina
Investment
  1,125,397,085 
  1,156 
  (61)
  994 
NFSA
Argentina
Hotel
  38,068,999 
  50 
  (47)
  833 
Llao Llao Resort S.A.
Argentina
Hotel
  73,580,206 
  147 
  (70)
  1,027 
HASAU
Argentina
Hotel
  603,978,099 
  604 
  (16)
  303 
Liveck S.A.
Uruguay
Investment
  38,600,337 
  415 
  1 
  443 
Associates
 
 
    
    
    
    
BHSA (1) (2)
Argentina
Financial
  73,939,835 
  1,500 
  (1,181)
  17,699 
BACS (2)
Argentina
Financial
  33,125,751 
  88 
  (38)
  1,358 
Joint ventures
 
 
    
    
    
    
IRSA - Galerías Pacífico S.A. - U.T.
Argentina
Hotel
  500,000 
  1 
  107 
  577 
Cyrsa S.A.
Argentina
Real estate
  8,748,270 
  17 
  (8)
  123 
 
 
(1)
Considered significant. See Notes 7 to 8 to the Annual Consolidated Financial Statements.
(2)
Information as of September 30, 2021 according to BCRA's standards. For the purpose of the valuation of the investments in the Company, figures as of September 30, 2021 have been considered, with the necessary IFRS adjustments. Share market price of Banco Hipotecario S.A as of September 30, 2021 amounts to ARS 9.58. See Note 8 to the Consolidated Financial Statements as of June 30, 2021.
(3)
As mentioned in note 4G. to the Consolidated Financial Statements, the Company, on December 22, 2020, sold 217,332,873 shares, that represents the 49% of the capital stock of Manibil SA. The operation was completed in February 2021, so the Company leaves the character of shareholder of that Company from that moment.
 
 
39
IRSA Inversiones y Representaciones Sociedad Anónima
 
7.            
Investment properties
 
 
 
Period ended September 30, 2021
 
 
Year ended June 30, 2021
 
 
 
Rental properties
 
 
Undeveloped parcels of land
 
 
Total
 
 
Total
 
Fair value at the beginning of the period / year
  6,137 
  36,084 
  42,221 
  39,291 
Additions
  - 
  - 
  - 
  5 
Disposals
  - 
  (148)
  (148)
  (29)
Net gain from fair value adjustment
  (119)
  (728)
  (847)
  2,954 
Fair value at the end of the period / year
  6,018 
  35,208 
  41,226 
  42,221 
 
The following amounts have been recognized in the Statements of Comprehensive Income: 
 
 
  09.30.2021 
  09.30.2020 
Sale, rental and services´ income (Note 17)
  41 
  18 
Rental and services´ costs (Note18)
  (31)
  4 
Cost of sales and developments (Note18)
  (13)
  16 
Net unrealized gain from fair value adjustment of investment properties
  (816)
  11,096 
Net realized loss from fair value adjustment on investment properties
  (31)
  - 
 
Valuation techniques are described in Note 9 to the Consolidated Financial Statements as of June 30, 2021. There were no changes to the valuation techniques.
 
8.            
Property, plant and equipment
 
Changes in the Company’s property, plant and equipment for the three-month period ended September 30, 2021 and for the year ended June 30, 2021 were as follows:
 
 
 
Period ended September 30, 2021
 
 
Year ended June 30, 2021
 
 
 
Buildings and facilities
 
 
Furniture and fixtures
 
 
Machinery and equipment
 
 
Vehicles
 
 
Total
 
 
Total
 
Costs
  306 
  109 
  294 
  7 
  716 
  691 
Accumulated depreciation
  (300)
  (85)
  (291)
  (7)
  (683)
  (664)
Net book amount at the beginning of the period / year
  6 
  24 
  3 
  - 
  33 
  27 
Additions
  - 
  - 
  1 
  - 
  1 
  25 
Depreciation (Note 18)
  - 
  - 
  (1)
  - 
  (1)
  (19)
Balances at the end of the period / year
  6 
  24 
  3 
  - 
  33 
  33 
Costs
  306 
  109 
  295 
  7 
  717 
  716 
Accumulated depreciation
  (300)
  (85)
  (292)
  (7)
  (684)
  (683)
Net book amount at the end of the period / year
  6 
  24 
  3 
  - 
  33 
  33 
 
 
9.            
Trading properties
 
Changes in the Company’s trading properties for the three-month period ended September 30, 2021 and for the year ended June 30, 2021 were as follows:
 
 
 
Period ended September 30, 2021
 
 
Year ended June 30, 2021
 
 
 
Completed properties
 
 
Undevelopedproperties
 
 
Total
 
 
Total
 
Beginning of the period / year
  120 
  651 
  771 
  2,337 
Additions
  - 
  - 
  - 
  949 
Capitalized finance costs
  - 
  - 
  - 
  512 
Disposals (Note 18)
  - 
  - 
  - 
  (3,027)
End of the period / year
  120 
  651 
  771 
  771 
Non-current
    
    
  650 
  650 
Current
    
    
  121 
  121 
Total
    
    
  771 
  771 
 
 
 
40
IRSA Inversiones y Representaciones Sociedad Anónima
 

10.            
Intangible assets
 
Changes in Company’s intangible assets for the three-month period ended September 30, 2021 and for the year ended June 30, 2021 were as follows:
 
 
 
Period ended September 30, 2021
 
 
Year ended June 30, 2021
 
 
 
Computer software
 
 
Future units to be received from barters
 
 
Total
 
 
Total
 
Costs
  60 
  985 
  1,045 
  148 
Accumulated amortization
  (41)
  - 
  (41)
  (30)
Net book amount at the beginning of the period / year
  19 
  985 
  1,004 
  118 
Additions
  - 
  - 
  - 
  897 
Amortization (Note 19)
  - 
  - 
  - 
  (11)
Balances at the end of the period / year
  19 
  985 
  1,004 
  1,004 
Costs
  60 
  985 
  1,045 
  1,045 
Accumulated amortization
  (41)
  - 
  (41)
  (41)
Net book amount at the end of the period / year
  19 
  985 
  1,004 
  1,004 

11.            
Financial instruments by category
 
This note presents financial assets and financial liabilities by category of financial instrument and a reconciliation to the corresponding line item in the Statements of Financial Position, as appropriate. Financial assets and liabilities measured at fair value are assigned based on their different levels in the fair value hierarchy. For further information, related to fair value hierarchy see Note 13 to the Consolidated Financial Statements as of June 30, 2021.
 
 
 
Financial assets at amortized cost (i)
 
 
Financial assets at fair value through profit or loss
 
 
Subtotal financial assets
 
 
Non-financial assets
 
 
Total
 
 
 
 
 
 
Level 1
 
 
 
 
 
 
 
 
 
 
September 30, 2021
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets as per Statement of Financial Position
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Trade and other receivables (excluding the allowance for doubtful accounts and other receivables) (Note 12)
  691 
  - 
  691 
  1,562 
  2,253 
Investments in financial assets:
    
    
    
    
    
 - Mutual funds (ii)
  - 
  11 
  11 
  - 
  11 
 - Bonds
  - 
  248 
  248 
  - 
  248 
Cash and cash equivalents:
    
    
    
    
    
 - Cash at bank and on hand
  244 
  - 
  244 
  - 
  244 
 - Short- term investments
  - 
  351 
  351 
  - 
  351 
Total
  935 
  610 
  1,545 
  1,562 
  3,107 
 
    
    
    
    
    
 
    
    
    
    
    
 
 
 
Financial liabilities at amortized cost (i)
 
 
Non-financial liabilities
 
 
Subtotal financial liabilities
 
 
 
 
 
 
 
 
 
 
 
September 30, 2021
 
 
 
 
 
 
 
 
 
Liabilities as per Statement of Financial Position
 
 
 
 
 
 
 
 
 
Trade and other payables (Note 13)
  675 
  56 
  731 
Borrowings (Note 14)
  34,470 
  - 
  34,470 
Total
  35,145 
  56 
  35,201 
 
 
 
41
 
 
 
 
Financial assets at amortized cost (i)
 
 
Financial assets at fair value through profit or loss
 
 
Subtotal financial assets
 
 
Non-financial assets
 
 
Total
 
 
 
 
 
 
Level 1
 
 
 
 
 
 
 
 
 
 
June 30, 2021
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets as per Statement of Financial Position
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Trade and other receivables (excluding the allowance for doubtful accounts and other receivables) (Note 12)
  1,090 
  - 
  1,090 
  1,221 
  2,311 
Investments in financial assets:
    
    
    
    
    
 - Mutual funds (ii)
  - 
  11 
  11 
  - 
  11 
 - Bonds
  - 
  256 
  256 
  - 
  256 
Cash and cash equivalents:
    
    
    
    
    
 - Cash at bank and on hand
  97 
  - 
  97 
  - 
  97 
 - Short-term investments
  - 
  492 
  492 
  - 
  492 
Total
  1,187 
  759 
  1,946 
  1,221 
  3,167 
 
 
 
Financial liabilities at amortized cost (i)
 
 
Non-financial liabilities
 
 
Total
 
 
 
 
 
 
 
 
 
 
 
June 30, 2021
 
 
 
 
 
 
 
 
 
Liabilities as per Statement of Financial Position
 
 
 
 
 
 
 
 
 
Trade and other payables (Note 13)
  745 
  43 
  788 
Borrowings (Note 14)
  34,191 
  - 
  34,191 
Total
  34,936 
  43 
  34,979 
 
(i)
The fair value of financial assets and liabilities at amortized cost does not differ significantly from their book value, except for borrowings (Note 14). 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.
(ii)
See description of reprofiling of public debt instruments in Note 33 to the consolidated annual financial statements.
 
As of September 30, 2021, there have been no changes to the economic or business circumstances affecting the fair value of the financial assets and liabilities of the Company.
 
12.            Trade and other receivables
 
Company’s trade and other receivables, as of September 30, 2021 and June 30, 2021 are comprised as follows:
 
 
 
September 30, 2021
 
 
June 30, 2021
 
Sales, leases and services receivables
  352 
  394 
Less: Allowance for doubtful accounts
  (10)
  (10)
Total trade receivables
  342 
  384 
Borrowings granted, deposits and others
  314 
  533 
Advance payments
  226 
  236 
Tax credits
  1,120 
  780 
Prepaid expenses
  177 
  199 
Long-term incentive plan
  15 
  17 
Dividends
  - 
  141 
Others
  49 
  12 
Total other receivables
  1,901 
  1,918 
Total trade and other receivables
  2,243 
  2,302 
Non-current
  1,104 
  1,278 
Current
  1,139 
  1,024 
Total
  2,243 
  2,302 
  
Movements on the Company’s allowance for doubtful accounts are as follows:
 
 
 
September 30, 2021
 
 
June 30, 2021
 
Beginning of period /year
  10 
  17 
Additions
  - 
  4 
Disposals / Recoveries
  - 
  (4)
Inflation adjustment
  - 
  (7)
End of the period / year
  10 
  10 
 
 
42
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
The creation and release of the allowance for doubtful accounts have been included in “Selling expenses” in the Statements of Income (Note 18). Amounts charged to the allowance for doubtful accounts are generally written off, when there is no expectation of recovery.
 
13.
         Trade and other payables
 
 
 
September 30, 2021
 
 
June 30, 2021
 
Customers´ advances
  42 
  30 
Trade payables
  247 
  375 
Accrued invoices
  352 
  326 
Tenant deposits
  1 
  1 
Total trade payables
  642 
  732 
Director´s fees
  44 
  21 
Long-term incentive plan
  13 
  14 
Tax amnesty plans
  1 
  1 
Other tax payables
  12 
  11 
Other
  19 
  9 
Total other payables
  89 
  56 
Total trade and other payables
  731 
  788 
Non-current
  49 
  5 
Current
  682 
  783 
Total
  731 
  788 
 

14. Borrowings
 
Company’s borrowings as of September 30, 2021 and June 30, 2021 are comprised as follows:
 
 
 
Book value as of 09.30.2021
 
 
Book value as of 06.30.2021
 
 
Fair value as of 09.30.2021
 
 
Fair value as of 06.30.2021
 
NCN
  19,563 
  17,863 
  18,964 
  17,340 
Bank loans
  638 
  957 
  638 
  957 
Related parties (Note 21)
  14,014 
  15,366 
  13,744 
  15,182 
Bank overdrafts
  255 
  5 
  255 
  5 
Total borrowings
  34,470 
  34,191 
  33,601 
  33,484 
Non-current
  23,050 
  17,592 
    
    
Current
  11,420 
  16,599 
    
    
Total
  34,470 
  34,191 
    
    
 
See Note 17 to the Unaudited Condensed Interim Consolidated Financial Statements.
 
15. Currents and deferred income tax
 
 
  09.30.2021 
  09.30.2020 
Deferred income tax
  1,379 
  (5,727)
Income tax
  1,379 
  (5,727)

Below is a reconciliation between income tax recognized and the amount which would arise from applying the prevailing tax rate on profit before income tax for the three-month periods ended September 30, 2021 and 2020:
 
 
 
43
 
 
 
  09.30.2021 
  09.30.2020 
Net income at tax rate (i)
  694 
  (5,555)
Permanent differences:
    
    
Share of profit of subsidiaries, associates and joint ventures
  (559)
  2,843 
Income tax rate differential
  - 
  656 
Difference between provision and tax return
  - 
  87 
Tax loss carryfowards´ allowance
  506 
  (3,618)
Inflation adjustment for tax purposes
  (725)
  (967)
Inflation adjustment
  1,436 
  967 
Non deductible expenses and others
  27 
  (140)
Income tax
  1,379 
  (5,727)
 
(1) Income tax rate in effect in Argentina as of September 30, 2021 and 2020 was 35 % and 30 %, respectively.
 
The gross movement on the deferred income tax account is the following:
 
 
  09.30.2021 
  06.30.2021 
Beginning of the period / year
  (21,125)
  (12,194)
Income tax charge
  1,379 
  (8,931)
End of the period / year
  (19,746)
  (21,125)
 
As of September 30, 2021, the Company recognized tax loss carry forward prescribed as follows:
 
Fecha
 
Total
 
2023
  1,272 
2024
  2,334 
2025
  7,739 
2026
  1,509 
2027
  15 
Total tax losses
  12,869 
 
 
16. Provisions
 
The table below presents the changes in the Company's provisions as of September 30, 2021 and June 30, 2021 were as follows:
 
 
 
Period ended September 30, 2021
 
 
Year ended June 30, 2021
 
 
 
Investments in subsidiaries, associates and joint ventures (i)
 
 
Total
 
 
Total
 
Beginning of period / year
  67 
  67 
  459 
Additions
  8 
  8 
  29 
Decreases
  (12)
  (12)
  (23)
Utilizations
  (17)
  (17)
  (29)
Share of loss
  - 
  - 
  (330)
Inflation adjustment
  (5)
  (5)
  (39)
End of period / year
  41 
  41 
  67 
Non current
    
  6 
  29 
Current
    
  35 
  38 
Total
    
  41 
  67 
 
(i)
Additions and decreases are included in "Other operating results, net” (Note 19).
 
 
44
IRSA Inversiones y Representaciones Sociedad Anónima
 
17. Revenues
 
 
  09.30.2021 
  09.30.2020 
Sale of trading properties
  - 
  1,088 
Rental income, averaging of scheduled rental escalation and expense reimbursements
  41 
  18 
Sales, rental and services´ income
  41 
  1,106 
 
 
18. Expenses by nature

The Company discloses expenses in the 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 table provides additional disclosure regarding expenses by nature and their relationship to the function within the Company.
 
 
 
Costs (i)
 
 
General and administrative expenses
 
 
Selling expenses
 
  09.30.2021 
  09.30.2020 
Cost of sales of trading properties (Note 9)
  - 
  - 
  - 
  - 
  846 
Salaries, social security costs and other personnel expenses
  2 
  84 
  - 
  86 
  67 
Taxes, rates and contributions
  8 
  - 
  24 
  32 
  21 
Fees and payments for services
  3 
  22 
  3 
  28 
  26 
Director´s fees (Note 21)
  - 
  35 
  - 
  35 
  38 
Maintenance, security, cleaning, repairs and others
  36 
  11 
  - 
  47 
  24 
Traveling, transportation and stationery expenses
  - 
  4 
  - 
  4 
  6 
Leases and services’ charges
  2 
  8 
  - 
  10 
  11 
Advertising and other selling expenses
  - 
  - 
  3 
  3 
  - 
Bank charges
  - 
  - 
  - 
  - 
  7 
Amortization and depreciation
  - 
  2 
  - 
  2 
  3 
Allowance for doubtful accounts (charge and recovery, net) (Note 12)
  - 
  - 
  - 
  - 
  6 
Total expenses by nature as of 09.30.2021
  51 
  166 
  30 
  247 
  - 
Total expenses by nature as of 09.30.2020
  873 
  164 
  18 
  - 
  1,055 
 
(i)
For the three-month period ended September 30, 2021, includes ARS 31 of rental and services costs and ARS 20 of costs of sales and developments, of which ARS 7 corresponds to investment properties and ARS 13 to trading properties. For the three-month period ended September 30, 2020, includes ARS 4 which correspond to rental and services costs;ARS 869 to costs of sales and developments, of which ARS 16 corresponds to investment properties and ARS 853 to trading properties.
 
 
19. Other operating results, net
 
 
  09.30.2021 
  09.30.2020 
Lawsuits and other contingencies (i)
  3 
  - 
Donations
  (10)
  (9)
Operating interest expense
  3 
  4 
Others
  215 
  (1)
Total other operating results, net
  211 
  (6)
 

(i)
Includes legal costs and expenses.
 
 
45
IRSA Inversiones y Representaciones Sociedad Anónima
 
  20. Financial results, net
 
 
  09.30.2021 
  09.30.2020 
Interest income
  8 
  16 
Total finance income
  8 
  16 
Interest expense
  (695)
  (1,394)
Other finance costs
  (23)
  (84)
Subtotal finance costs
  (718)
  (1,478)
Capitalized finance costs
  - 
  142 
Total finance costs
  (718)
  (1,336)
Net exchange difference
  1,170 
  (191)
Net gain/ loss from changes in fair value of financial assets
  172 
  (61)
Loss from derivative financial instruments, net
  - 
  (13)
Other financial results
  (3)
  - 
Total other financial results
  1,339 
  (265)
Inflation adjustment
  (172)
  (516)
Total financial results, net
  457 
  (2,101)
 
21.  Related party transactions
 
Item
  09.30.2021 
  06.30.2021 
Rights of use assets
  9 
  10 
Trade and other receivables
  539 
  914 
Investments in financial assests
  248 
  257 
Trade and other payables
  (382)
  (374)
Borrowings
  (14,014)
  (15,366)
Lease liabilities
  (10)
  (11)
Total
  (13,610)
  (14,570)
 
 
 
46
IRSA Inversiones y Representaciones Sociedad Anónima
 
Related parties
  09.30.2021 
  06.30.2021 
Operation description
Item
Cresud
  (1)
  (1)
Long-term incentive plan payable
Trade and other payables
 
  (736)
  (781)
Non-Convertible Notes
Borrowings
 
  (103)
  (56)
Corporate services payable
Trade and other payables
 
  (6)
  (12)
Reimbursement of expenses payable
Trade and other payables
 
  - 
  8 
Leases receivable
Trade and other receivables
 
  (2)
  (2)
Management fee
Trade and other payables
Total parent company
  (848)
  (844)
 
 
IRSA CP
  118 
  155 
Reimbursement of expenses receivable
Trade and other receivables
 
  (3)
  (11)
Leases receivable
Trade and other payables
 
  (7,284)
  (4,646)
Non-Convertible Notes
Borrowings
 
  (4,126)
  (8,577)
Loans received
Borrowings
 
  9 
  10 
Rights of use
Rights of use assets
 
  (62)
  (55)
Corporate services payable
Trade and other payables
 
  248 
  257 
Non-Convertible Notes
Investments in financial assests
 
  (12)
  (13)
Non-Convertible Notes
Trade and other payables
 
  (18)
  (7)
Reimbursement of expenses payable
Trade and other payables
 
  - 
  (2)
Leases payable
Trade and other payables
 
  (10)
  (11)
Lease liabilities
Lease liabilities
Tyrus
  309 
  527 
Borrowings granted
Trade and other receivables
 
  4 
  4 
Reimbursement of expenses receivable
Trade and other receivables
ECLSA
  (535)
  - 
Other liabilities
Borrowings
 
  - 
  117 
Dividends receivable
Trade and other receivables
Panamerican Mall S.A.
  1 
  1 
Long-term incentive plan receivable
Trade and other receivables
Efanur
  (141)
  (149)
Loans received
Borrowings
Torodur S.A.
  (696)
  (735)
Non-Convertible Notes
Borrowings
Ritelco S.A.
  (34)
  (43)
Loans received
Borrowings
Ritelco S.A.
  3 
  3 
Reimbursement of expenses receivable
Trade and other receivables
NFSA
  (28)
  (28)
Loans received
Borrowings
NFSA
  12 
  9 
Hotel services receivable
Trade and other receivables
Fibesa S.A.
  13 
  14 
Long-term incentive plan receivable
Trade and other receivables
Fibesa S.A.
  (61)
  (61)
Loans received
Borrowings
Real Estate Investment Group VII LP
  (34)
  (39)
Loans received
Borrowings
Palermo Invest S.A.
  - 
  13 
Dividends receivable
Trade and other receivables
Palermo Invest S.A.
  2 
  1 
Contributions to integrate
Trade and other receivables
HASAU
  4 
  4 
Hotel services receivable
Trade and other receivables
HASAU
  30 
  - 
Contributions to integrate
Trade and other receivables
Llao Llao Resorts S.A.
  2 
  3 
Hotel services receivable
Trade and other receivables
New Lipstick
  23 
  27 
Reimbursement of expenses receivable
Trade and other receivables
Lipstick Management LLC
  (114)
  (120)
Loans received
Borrowings
Cyrsa S.A.
  (38)
  (39)
Loans received
Borrowings
Inversora Bolívar S.A.
  - 
  11 
Dividends receivable
Trade and other receivables
Liveck S.A.
  1 
  1 
Borrowings granted
Trade and other receivables
Banco Hipotecario S.A
  (1)
  (1)
Leases and rights of use payable
Trade and other payables
TGLT S.A.
  - 
  (52)
Other liabilities
Trade and other payables
UTE IRSA – Galerías Pacífico S.A.
  (90)
  - 
Borrowings obtained
Borrowings
 
  (130)
  (142)
Hotel services payables
Trade and other payables
Emprendimiento Recoleta S.A
  1 
  1 
Long-term incentive plan receivable
Trade and other receivables
Other subsidiaries, associates and joint ventures (1)
  1 
  1 
Reimbursement of expenses receivable
Trade and other receivables
Total subsidiaries, associates and joint ventures
  (12,636)
  (13,572)
 
 
Directors
  (44)
  (20)
Fees
Trade and other payables
 
  5 
  5 
Borrowings granted
Trade and other receivables
Total Directors
  (39)
  (15)
 
 
Consultores Asset Management S.A.
  8 
  7 
Reimbursement of expenses receivable
Trade and other receivables
BHN Vida S.A.
  (56)
  (59)
Non-Convertible Notes
Borrowings
BHN Seguros S.A.
  (41)
  (56)
Non-Convertible Notes
Borrowings
Austral Gold Argentina S.A.
  1 
  - 
Reimbursement of expenses receivable
Trade and other receivables
Futuros y Opciones S.A.
  - 
  (33)
Surety
Borrowings
 
  1 
  1 
Other credits
Trade and other receivables
Other subsidiaries, associates and joint ventures (2)
  - 
  1 
Reimbursement of expenses receivable
Trade and other receivables
Total others
  (87)
  (139)
 
 
Total
  (13,610)
  (14,570)
 
 
  
(1)
It includes Inversora Bolívar S.A., Cyrsa S.A., BACS, Palermo Invest S.A., y Liveck S.A...
(2)
It includes Austral Gold Argentina S.A., Hamonet S.A., e Isaac Elsztain e Hijos S.C.A.
 
 
 
47
IRSA Inversiones y Representaciones Sociedad Anónima
 
The following is a summary of the results with related parties for the three-month period ended September 30, 2021 and 2020:
 
Related parties
 
  30.09.2021 
  30.09.2020 
Operation description
Cresud
  1 
  3 
Leases and/or rights of use
 
  35 
  - 
Financial operations
 
  (53)
  (47)
Corporate services
Total parent company
  (17)
  (44)
 
IRSA CP
  82 
  (707)
Financial operations
 
  (13)
  (6)
Corporate services
 
  (3)
  (3)
Leases and/or rights of use
 
  (1)
  - 
Fees
Fibesa
  - 
  1 
Financial operations
ECLSA
  - 
  8 
Financial operations
Ritelco
  2 
  - 
Financial operations
Efanur
  8 
  (2)
Financial operations
Nuevas Fronteras S.A.
  4 
  (2)
Financial operations
Tyrus
  (19)
  5 
Financial operations
Cyrsa
  - 
  - 
Financial operations
Lipstick Management
  5 
  (2)
Financial operations
Torodur
  22 
  (35)
Financial operations
Other subsidiaries, associates and joint ventures (1)
  - 
  5 
Fees
 
  - 
  2 
Financial operations
Total subsidiaries, associates and joint ventures
  87 
  (736)
 
Directores
  (35)
  (38)
Fees
Senior Management
  (5)
  (3)
Fees
Total Directors and Senior Managment
  (40)
  (41)
 
Fundación IRSA
  (8)
  - 
Fees
Estudio Zang, Bergel & Viñes
  (2)
  (5)
Financial operations
BHN Vida S.A.
  2 
  2 
Financial operations
BHN Seguros
  2 
  - 
Financial operations
Other subsidiaries, associates and joint ventures (2)
  1 
  - 
Financial operations
Total others
  (5)
  (3)
 
Total at the end of the period
  25 
  (824)
 
 
(1)
It includes Inversora Bolívar S.A., Cyrsa S.A., BACS, Palermo Invest S.A., y Liveck S.A...
(2)
It includes Austral Gold Argentina S.A., Hamonet S.A., e Isaac Elsztain e Hijos S.C.A.
 
The following is a summary of the transactions with related parties without impact in results for the three-month period ended September 30, 2021 and 2020:
 
Related parties
  30.09.2021 
  30.09.2020 
Operation description
Tyrus
  (4)
  (11)
Contributions granted
Ibosa
  (10)
  - 
Dividend capitalization
Palermo Invest S.A.
  (13)
  - 
Dividend capitalization
ECLSA
  (114)
  - 
Dividend capitalization
Liveck S.A.
  - 
  (5)
Contributions granted
Total contributions to subsidiaries
  (141)
  (16)
 
 
 
 
48
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
22. Foreign currency assets and liabilities
 
Book amounts of foreign currency assets and liabilities are as follows:
 
Item (1)
 
 Amount (2)
 
 
 Foreign exchange rate (3)
 
 
Total as of 09.30.2021
 
 
Total as of 06.30.2021
 
Assets
 
 
 
 
 
 
 
 
 
 
 
 
Trade and other receivables
 
 
 
 
 
 
 
 
 
 
 
 
US Dollar
  3.15 
  98.54 
  310 
  308 
Euros
  0.15 
  113.88 
  17 
  15 
Receivables with related parties
    
    
    
    
US Dollar
  3.30 
  98.74 
  326 
  563 
Total Trade and other receivables
    
    
  653 
  886 
Investments in financial assets
    
    
    
    
US Dollar
  0.10 
  98.54 
  10 
  11 
Investments in financial assets with related parties
    
    
    
    
US Dollar
  2.62 
  98.74 
  259 
  257 
Total Investments in financial assets
    
    
  269 
  268 
Cash and cash equivalents
    
    
    
    
US Dollar
  0.88 
  98.54 
  87 
  94 
Total Cash and cash equivalents
    
    
  87 
  94 
Total Assets
    
    
  1,009 
  1,248 
 
    
    
    
    
Liabilities
    
    
    
    
Trade and other payables
    
    
    
    
US Dollar
  1.40 
  98.74 
  138 
  139 
Euros
  0.11 
  114.36 
  13 
  14 
Payables with related parties
    
    
    
    
US Dollar
  0.08 
  98.74 
  8 
  57 
Total Trade and other payables
    
    
  159 
  210 
Lease liabilities
    
    
    
    
US Dollar
  0.09 
  98.74 
  9 
  11 
Total Lease liabilities
    
    
  9 
  11 
Borrowings
    
    
    
    
US Dollar
  160.40 
  98.74 
  15,838 
  14,030 
Borrowings with related parties
    
    
    
    
US Dollar
  90.15 
  98.74 
  8,901 
  5,758 
Total Borrowings
    
    
  24,739 
  19,788 
Total Liabilities
    
    
  24,907 
  20,009 
 
(1)
Considering foreign currencies those that differ from Group’s functional currency at each period / year.
(2)
Expressed in millions of foreign currency.
(3)
Exchange rate as of September 30, 2021 according to Banco de la Nación Argentina records.
 
 
23.
CNV General Resolution N° 622/13
 
As required by Section 1°, Chapter III, Title IV of CNV General Resolution N° 622/13, below is a detail of the notes to the Unaudited Condensed Interim Separate Financial Statements that disclose the information required by the Resolution in Exhibits.
 
Exhibit A - Property, plant and equipment
Note 7 Investment properties and Note 8 Property, plant and equipment
Exhibit B - Intangible assets
Note 10 Intangible assets
Exhibit C - Equity investments
Note 6 Information about the main subsidiaries, associates and joint ventures
Exhibit D - Other investments
Note 11 Financial instruments by category
Exhibit E - Provisions
Note 12 Trade and other receivables and Note 16 Provisions
Exhibit F - Cost of sales and services provided
Note 9 Trading properties and Note 18 Expenses by nature
Exhibit G - Foreign currency assets and liabilities
Note 22 Foreign currency assets and liabilities
 
 
 
49
IRSA Inversiones y Representaciones Sociedad Anónima
 
24.
     CNV General Resolution N° 629/14 – Storage of documentation
 
On August 14, 2014, the CNV issued General Resolution N° 629 whereby it introduced amendments to rules related to storage and conservation of corporate books, accounting books and commercial documentation. In this sense, it should be noted that the Company has entrusted the storage of certain non-sensitive and old information to the following provider:
 
Storage of documentation responsible
 
Location
Iron Mountain Argentina S.A.
 
Av. Amancio Alcorta 2482, Autonomous City of Buenos Aires
 
Pedro de Mendoza 2143, Autonomous City of Buenos Aires
 
Saraza 6135, Autonomous City of Buenos Aires
 
Azara 1245, Autonomous City of Buenos Aires
 
Polígono industrial Spegazzini, Autopista Ezeiza Km 45, Cañuelas, Province of Buenos Aires
 
 
Cañada de Gómez 3825, Autonomous City of Buenos Aires
 
It is further noted that a detailed list of all documentation held in custody by providers, as well as documentation required in section 5 a.3) of Section I, Chapter V, Title II of the CNV RULES (2013 as amended) are available at the registered office.
 
On February 5, 2014 there was a widely known accident in Iron Mountain’s warehouse. Such company is a supplier of the Company and Company’s documentation was being kept in the mentioned warehouse. Based on the internal review carried out by the Company, duly reported to the CNV on February 12, 2014, the information kept at the Iron Mountain premises that were on fire do not appear to be sensitive or capable of affecting normal operations.
 
25.
Economic context in which the Company operates
 
See Note 29 to the Unaudited Condensed Interim Consolidated Financial Statements.
 
26.
Subsequent events
 
See Note 30 to the Unaudited Condensed Interim Consolidated Financial Statements.
 
 
50
 
Free translation from the original prepared in Spanish for publication in Argentina
 
 
REVIEW REPORT ON THE UNAUDITED CONDENSED INTERIM SEPARATE FINANCIAL STATEMENTS
  
To the Shareholders, President and Directors of
IRSA Inversiones y Representaciones Sociedad Anónima
Legal address: Carlos Della Paolera 261 - 9th floor
Autonomous City of Buenos Aires
Tax Registration Number: 30-52532274-9
 
Introduction
 
We have reviewed the accompanying unaudited condensed interim separate financial statements of IRSA Inversiones y Representaciones Sociedad Anónima (“the Company”), including the unaudited condensed interim separate statement of financial position at September 30, 2021, the unaudited condensed interim separate statements of income and other comprehensive income for the three-month period ended September 30, 2021 and the unaudited condense interim separate statements of changes in shareholders’ equity and of cash flows for the three-month period then ended, and selected explanatory notes.
 
The balances and other information for the fiscal year ended on June 30, 2021 and its interim periods are an integral part of the financial statements mentioned above; therefore, they must be considered in connection with these financial statements.
 
Management’s responsibility
 
The Board of Directors of the Company is responsible for the preparation and presentation of these unaudited condensed interim separate financial statements in accordance with International Financial Reporting Standards, adopted by the Argentine Federation of Professional Councils in Economic Sciences (FACPCE) as professional accounting standards and included by the National Securities Commission (CNV) in its regulations, as approved by the International Accounting Standards Board (IASB), and is therefore responsible for the preparation and presentation of the unaudited condensed interim separate financial statements mentioned in the first paragraph, in accordance with International Accounting Standard 34 Interim Financial Information (IAS 34).
 
 
51
Free translation from the original prepared in Spanish for publication in Argentina
 
 
Scope of our review
 
Our review was limited to the application of the procedures established under International Standards on Review Engagements ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity, adopted as a review standard in Argentina by Technical Pronouncement No. 33 of the FACPCE and approved by the International Auditing and Assurance Standards Board (IAASB). A review of interim financial information consists of inquiries of Company staff responsible for preparing the information included in the unaudited condensed interim separate financial statements and of analytical and other review procedures. This review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion on the separate statements of financial position, and the separate statements of income and other comprehensive income and of cash flows of the Company.
  
Conclusion
 
On the basis of our review, nothing has come to our attention that causes us to believe that the unaudited condensed interim separate financial statements mentioned in the first paragraph of this report have not been prepared, in all material respects, in accordance with International Accounting Standard 34 Interim Financial Reporting.
 
Report on compliance with current regulations
 
In accordance with current regulations, we report, in connection with IRSA Inversiones y Representaciones Sociedad Anónima, that:
 
a) the unaudited condensed interim separate financial statements of IRSA Inversiones y Representaciones Sociedad Anónima have not been transcribed into the Inventory and Balance Sheet book and, except for the above mentioned situation, as regards those matters that are within our competence, they are in compliance with the provisions of the General Companies Law and pertinent resolutions of the National Securities Commission;
 
b) the unaudited condensed interim separate financial statements of IRSA Inversiones y Representaciones Sociedad Anónima arise from accounting records carried in all formal aspects in accordance with legal requirements except for i) the lack of transcription to the Inventories and Balance Sheet Book, and ii) the lack of transcription to the General Journal Book of the accounting entries corresponding to the month of September 2021;
 
 
 
52
 
Free translation from the original prepared in Spanish for publication in Argentina
 
 
c) at September 30, 2021 the debt of IRSA Inversiones y Representaciones Sociedad Anónima accrued in favor of the Argentine Integrated Social Security System, as shown by the Company’s accounting records, amounted to ARS 124,333.53, which was not due at that date.
 
Autonomous City of Buenos Aires, November 8, 2021
 
PRICE WATERHOUSE & CO. S.R.L.
                                                                    (Partner)
 
ABELOVICH, POLANO & ASOCIADOS S.R.L.
                                                                                      (Partner)
C.P.C.E.C.A.B.A. V° 1 F° 17
 
 C.P.C.E.C.A.B.A. V° 1 F° 30
Walter Zablocky
Public Accountant (UNLP)
C.P.C.E.C.A.B.A. V. 340 F. 156
 
Noemí I. Cohn
Public Accountant (UBA)
C.P.C.E. C.A.B.A. V. 116 F. 135
 
 
 
53
 
IRSA Inversiones y Representaciones Sociedad Anónima 
 
Summary as of September 30, 2021 
 
I. Brief comment on the Company’s activities during the period, including references to significant events occurred after the end of the period.
 
Economic context in which the Group operates
 
The Group operates in a complex context both due to macroeconomic conditions, whose main variables have recently experienced strong volatility, as well as regulatory, social, and political conditions, both nationally and internationally.
 
The results from operations may be affected by fluctuations in the inflation and the exchange rate of the Argentine peso against other currencies, mainly the dollar, changes in interest rates which have an impact on the cost of capital, changes in government policies, capital controls and other political or economic events both locally and internationally.
 
In December 2019, a new strain of coronavirus (SARS-COV-2), which caused 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 measures to contain the spread of the virus, including imposing travel restrictions and closing borders, closing businesses deemed non-essential, instructing residents to practice social distancing, implementing lockdowns, among other measures. The ongoing pandemic and these extraordinary government measures are affecting global economic activity, resulting in significant volatility in global financial markets.
 
On March 3, 2020, the first case of COVID-19 was registered in the country and as of today, more than 5,290,000 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. Due to the flexibility that has occurred in the economic activities since the beginning of this fiscal year and as of the date of issuance of these financial statements, 100% of the shopping malls are operational.
 
At the local environment, the following circumstances were observed:
 
●
In August 2021, the Monthly Economic Activity Estimator (“EMAE” in Spanish) reported by the National Institute of Statistics and Censuses (“INDEC” in Spanish), registered a variation of 12.8% compared to the same month of 2020, and 1.1% compared to the previous month.
 
●
The annual retail inflation reached 52.47% in the last 12 months. The survey on market expectations prepared by the Argentine Central Bank in September 2021, called the Market Expectations Survey (“REM” in Spanish), estimates a retail inflation of 48.2% i.a. for December 2021 and 46.0% for December 2022. Analysts participating in the REM forecast a rebound in economic activity in 2021, reaching an economic growth of 7.6%.
 
●
In the period from September 2020 to September 2021, the Argentine peso depreciated 29.6% against the US dollar according to the wholesale average exchange rate of Banco de la Nación Argentina. Given the exchange restrictions in force since August 2019, as of September 30, 2021, there is an exchange gap of approximately 78.9% between the official price of the dollar and its price in parallel markets, which impacts the level of activity in the economy and affects the level of reserves of the Argentine Central Bank. Additionally, these exchange restrictions, or those that may be dictated in the future, could affect the Group's ability to access the Single Free Exchange Market (“MULC” in Spanish) to acquire the necessary currencies to meet its financial obligations.
  
 
 
1
 
IRSA Inversiones y Representaciones Sociedad Anónima 
 
Summary as of September 30, 2021
 
 
COVID-19 pandemic
 
As described above, the COVID-19 pandemic has adversely impacted both the global economy and the Argentine economy and the Group's business, mainly in Shopping Malls and Hotels segments. Since the beginning of fiscal year 2022, and until the date of presentation of the financial statements, the Company's shopping malls are fully operational, as well as the office buildings, despite the remote work modality that some tenants continue to apply. Regarding hotels, although they have been operating since December 2020, the sector continues working with certain restrictions on air flows and the influx of international 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 Group’s ability to meet its financial commitments for the next twelve months.
 
The Group is closely monitoring the situation and taking all necessary measures to preserve human life and the Group's businesses.
 
 
 
2
 
IRSA Inversiones y Representaciones Sociedad Anónima
 
Summary as of September 30, 2021
 
 
Consolidated Results
 
(in millions of ARS)
 
IQ 22
 
 
IQ 21
 
 
YoY Var
 
 
IQ 20
 
 
YoY Var
 
Revenues
  4,382 
  2,453 
  78.6%
  6,841 
  (35.9)%
Result from fair value adjustment of investment properties
  (6,494)
  36,728 
  (117.7)%
  18,829 
  (134.5)%
Result from operations
  (4,689)
  35,856 
  (113.1)%
  21,562 
  (121.7)%
Depreciation and amortization
  149 
  186 
  (19.9)%
  181 
  (17.9)%
EBITDA (1)
  (4,540)
  36,042 
  (112.6)%
  21,744 
  (120.9)%
Adjusted EBITDA (1)
  2,076 
  7,477 
  (72.2)%
  2,915 
  (28.8)%
Result for the period
  (1,014)
  12,716 
  (108.0)%
  22,897 
  (104.4)%
Attributable to equity holders of the parent
  (600)
  10,086 
  (105.9)%
  6,875 
  (108.7)%
Attributable to non-controlling interest
  (414)
  2,630 
  (115.7)%
  16,022 
  (102.6)%
(1)
See Point XIX: EBITDA Reconciliation
 
Group’s income increased by 78.6% during the first quarter of fiscal year 2022 compared to the same quarter of fiscal year 2021 mainly due to the impact of COVID-19 pandemic in the Shopping Malls and Hotels segments that straightly affected operations during previous fiscal year, while adjusted EBITDA decreased by 72.2% mainly explained by Sales and Developments segment whose adjusted EBITDA reached ARS 7,710 million during the first quarter of previous fiscal year due to Bouchard 710 and Boston Tower’s office sales. Compared with the first quarter of fiscal year 2020, that was not affected by the COVID-19 pandemic, the decrease in EBITDA is 28.8%. Rental segments Adjusted EBITDA reached ARS 2,152 million, ARS 1,506 million from the Shopping Malls segment ARS 567 million from the Offices segment and ARS 79 million from Hotels Segment.
 
Net result for the first quarter of fiscal year 2022 registered a loss of ARS 1,014 million compared to a gain of ARS 12,716 million during the same quarter of previous fiscal year mainly explained by a loss due to changes in the fair value of investment properties.
 
II. Shopping Malls (through our subsidiary IRSA Propiedades Comerciales S.A.)
 
Our portfolio’s leasable area totaled 335,641 sqm of GLA (excluding certain spaces occupied by hypermarkets, which are not our tenants). Real tenants’ sales of our shopping centers reached ARS 34,205 million in the first quarter of fiscal year 2022, 322% higher than in IQ21 affected by the closure of operations and 10.7% below the first quarter of FY20, not affected by the pandemic. Portfolio’s occupancy reached 89.6%, mainly due to the exit of Falabella in Mendoza Plaza Shopping. Excluding the effect of the remaining vacancy from large stores, occupancy would have been 94.3%.
 
Shopping Malls’ Operating Indicators
 
 
 
IQ 22
 
 
IVQ 21
 
 
IIIQ 21
 
 
IIQ 21
 
 
IQ 21
 
Gross leasable area (sqm)
  335,641 
  334,826 
  335,893 
  333,460 
  333,345 
Tenants’ sales (3 months cumulative in current currency)
  34,205 
  16,913 
  28,263 
  29,804 
  8,105 
Occupancy
  89.6%
  89.9%
  89.5%
  88.3%
  92.8%
 
Shopping Malls’ Financial Indicators
 
(in millions of ARS)
 
 
IQ 22
 
 
IQ 21
 
 
YoY Var
 
 
IQ 20
 
 
YoY Var
 
Revenues from sales, leases, and services
  2.225 
  560 
  297.3%
  3.179 
  (30.0)%
Net result from fair value adjustment on investment properties
  (3.698)
  1.796 
  (305.9)%
  916 
  (503.7)%
Result from operations
  (2.241)
  1.513 
  (248.1)%
  3.174 
  (170.6)%
Depreciation and amortization
  49 
  64 
  (23.4)%
  57 
  (14.0)%
EBITDA (1)
  (2.192)
  1.577 
  (239.0)%
  3.231 
  (167.8)%
Adjusted EBITDA (1)
  1.506 
  (219)
  - 
  2.315 
  (34.9)%
(1)
See Point XIX: EBITDA Reconciliation
 

 
 
3
 
 
IRSA Inversiones y Representaciones Sociedad Anónima 
 
Summary as of September 30, 2021 
 
Income from this segment increased by 297.3% during the first quarter of fiscal year 2022 when compared with the same period of previous fiscal year, mainly explained by the closure of operations due to COVID-19 from March 20 to October 14, 2020. As of the date of presentation of the financial statements, all the Company's shopping malls are operational.
 
Adjusted EBITDA for the first quarter of fiscal year 2022 reached ARS 1,506 million, a 34.9% below that the first quarter of fiscal year 2020, not affected by the pandemic.
 
Operating data of our shopping malls
 
 
Date of acquisition
Location
 
Gross Leasable Area (sqm)(1)
 
 
Stores
 
 
Occupancy (2)
 
 
IRSA CP Interest (3)
 
Alto Palermo
Dec-97
City of Buenos Aires
  20,071 
  133 
  99.7%
  100%
Abasto Shopping(4)
Nov-99
City of Buenos Aires
  36,797 
  159 
  95.8%
  100%
Alto Avellaneda
Dec-97
Province of Buenos Aires
  40,286 
  125 
  68.2%
  100%
Alcorta Shopping
Jun-97
City of Buenos Aires
  15,812 
  112 
  99.4%
  100%
Patio Bullrich
Oct-98
City of Buenos Aires
  11,396 
  89 
  87.4%
  100%
Dot Baires Shopping
May-09
City of Buenos Aires
  47,366 
  164 
  83.1%
  80%
Soleil
Jul-10
Province of Buenos Aires
  15,925 
  78 
  93.5%
  100%
Distrito Arcos
Dec-14
City of Buenos Aires
  14,335 
  65 
  100.0%
  90.0%
Alto Noa Shopping
Mar-95
Salta
  19,388 
  84 
  97.5%
  100%
Alto Rosario Shopping
Nov-04
Santa Fe
  33,731 
  138 
  94.8%
  100%
Mendoza Plaza Shopping
Dec-94
Mendoza
  42,947 
  131 
  85.7%
  100%
Córdoba Shopping
Dec-06
Córdoba
  15,360 
  105 
  97.6%
  100%
La Ribera Shopping
Aug-11
Santa Fe
  10,530 
  70 
  97.3%
  50%
Alto Comahue
Mar-15
Neuquén
  11,697 
  94 
  92.2%
  99.95%
Patio Olmos(5)
Sep-07
Córdoba
    
  - 
    
    
Total
 
 
  335,641 
  1,547 
  89.6%
    
(1) Corresponds to gross leasable area in 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 period.
(3) Company’s effective interest in each of its business units.
(4) Excludes Museo de los Niños (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.
 
Tenant Retail Sales in real terms as of September 30, 2021, compared to the same quarter of fiscal years 2021 and 2020 (1)
 
(ARS million) 
 
IQ 22
 
 
IQ 21
 
 
YoY Var
 
 
IQ 20
 
 
YoY Var
 
Alto Palermo
  4,033 
  199 
  1,926.6%
  4,752 
  (15.1)%
Abasto Shopping
  3,998 
  147 
  2,619.7%
  4,926 
  (18.8)%
Alto Avellaneda
  2,983 
  144 
  1,971.5%
  4,314 
  (30.9)%
Alcorta Shopping
  3,016 
  27 
  11,070.4%
  2,693 
  12.0%
Patio Bullrich
  1,450 
  263 
  451.3%
  1,819 
  (20.3)%
Dot Baires Shopping
  2,609 
  130 
  1,906.9%
  3,644 
  (28.4)%
Soleil
  2,222 
  288 
  671.5%
  2,099 
  5.9%
Distrito Arcos
  2,595 
  783 
  231.4%
  2,274 
  14.1%
Alto Noa Shopping
  1,677 
  1,023 
  63.9%
  1,674 
  0.2%
Alto Rosario Shopping
  4,218 
  1,927 
  118.9%
  3,826 
  10.2%
Mendoza Plaza Shopping
  2,417 
  1,921 
  25.8%
  3,006 
  (19.6)%
Córdoba Shopping
  1,380 
  793 
  74.0%
  1,177 
  17.2%
La Ribera Shopping(1)
  591 
  222 
  166.2%
  872 
  (32.2)%
Alto Comahue
  1,016 
  238 
  326.9%
  1,218 
  (16.6)%
Total sales
  34,205 
  8,105 
  322.0%
  38,294 
  (10.7)%
(1) Through our joint venture Nuevo Puerto Santa Fe S.A.
 
 
4
 
 
IRSA Inversiones y Representaciones Sociedad Anónima 
 
Summary as of September 30, 2021 
 
 
Cumulative tenants’ sales per type of business in real terms compared to the same quarter of fiscal years 2021 and 2020(1)
 
(ARS million) 
 
IQ 22
 
 
IQ 21
 
 
YoY Var
 
 
IQ 20
 
 
YoY Var
 
Department Store
  - 
  580 
  -100.0%
  2,025 
  (100.0)%
Clothes and footwear
  20,326 
  4,023 
  405.2%
  20,698 
  (1.8)%
Entertainment
  755 
  - 
  - 
  1,597 
  (52.7)%
Home and decoration
  987 
  243 
  306.2%
  752 
  31.3%
Home Appliances
  3,264 
  663 
  392.3%
  4,674 
  (30.2)%
Restaurants
  5,133 
  1,410 
  264.0%
  4,788 
  7.2%
Miscellaneous
  576 
  113 
  409.7%
  451 
  27.7%
Services
  3,164 
  1,073 
  194.9%
  3,309 
  (4.4)%
Total
  34,205 
  8,105 
  322.0%
  38,294 
  (10.7)%
(1)      
Includes sales from stands and excludes spaces used for special exhibitions.
 
Revenues from cumulative leases as of September 30, 2021, compared to the same quarter of fiscal years 2021 and 2020
 
(ARS million) 
 
IQ 22
 
 
IQ 21
 
 
YoY Var
 
 
IQ 20
 
 
YoY Var
 
Base rent (1)
  715 
  99 
  622.2%
  1,594 
  (55.1)%
Percentage rent (1)
  1,107 
  96 
  1,053.1%
  761 
  45.5%
Total rent
  1,822 
  195 
  834.1%
  2,355 
  (22.6)%
Non-traditional advertising
  44 
  50 
  (12.0)%
  85 
  (48.2)%
Revenues from admission rights
  198 
  223 
  (11.2)%
  401 
  (50.6)%
Fees
  35 
  38 
  (7.9)%
  44 
  (20.5)%
Parking
  62 
  5 
  1,140.0%
  186 
  (66.7)%
Commissions
  54 
  44 
  22.7%
  85 
  (36.5)%
Other
  10 
  5 
  100.0%
  23 
  (56.5)%
Subtotal(2)
  2,225 
  560 
  297.3%
  3,179 
  (30.0)%
Expenses and Collective Promotion Fund
  963 
  540 
  78.3%
  1,287 
  (25.2)%
Total
  3,188 
  1,100 
  189.8%
  4,466 
  (28.6)%
(1)
Includes Revenues from stands for ARS 107.3 million cumulative as of September 2021
(2)
Includes ARS 2.7 million from Patio Olmos.
 
III. Offices
 
According to Cushman & Wakefield, the quarter closed with a stable vacancy of 14.3%, in the Buenos Aires City premium market, due to the gradual occupation of workspaces thanks to advances in vaccination and end of the winter period, while prices show a decline averaging USD 25.1 / m2.
 
Offices’ Operating Indicators
 
 
 
IQ 22
 
 
IVQ 21
 
 
IIIQ 21
 
 
IIQ 21
 
 
IQ 21
 
Gross Leasable area
  113,451 
  113,291 
  114,475 
  114,475 
  93,144 
Total Occupancy
  72.4%
  74.7%
  76.3%
  75.6%
  83.7%
Class A+ & A Occupancy
  78.9%
  80.1%
  81.2%
  79.5%
  91.6%
Class B Occupancy
  41.1%
  48.5%
  52.4%
  56.7%
  53.6%
Rent USD/sqm
  25.1 
  25.7 
  25.4 
  25.7 
  26.0 
 
The gross leasable area during the first quarter of fiscal year 2022 was 113,451 m2, in line with the previous quarter. Portfolio average A+ & A reached 78.9%, and average rental price reached USD 25.1 per sqm.
 
 
5
 
IRSA Inversiones y Representaciones Sociedad Anónima
 
Summary as of September 30, 2021
 
 
Offices’ Financial Indicators
 
(in ARS million) 
 
IQ 22
 
 
IQ 21
 
 
YoY Var
 
 
IQ 20
 
 
YoY Var
 
Revenues from sales, leases and services
  716 
  825 
  (13.2)%
  1,063 
  (32.6)%
Net result from fair value adjustment on investment properties, PP&E e inventories
  (1,833)
  19,992 
  (109.2)%
  10,437 
  (117.6)%
Profit from operations
  (1,280)
  20,561 
  (106.2)%
  11,303 
  (111.3)%
Depreciation and amortization
  14 
  23 
  (39.1)%
  11 
  27.3%
EBITDA(1)
  (1,266)
  20,584 
  (106.2)%
  11,314 
  (111.2)%
Adjusted EBITDA (1)
  567 
  592 
  (4.2)%
  877 
  (35.3)%
(1)
See Point XIX: EBITDA Reconciliation
 
During the first quarter of fiscal year 2022, revenues from the offices segment decreased by 13.2% and Adjusted EBITDA decreased 4.2% compared to the previous fiscal year, mainly explained by the lower occupancy and sale of part of the portfolio, although compensated by the incorporation of “261 Della Paolera”. Adjusted EBITDA margin was 79.1%, 7.3 bps higher than the previous year.
 
Below is information on our office segment and other rental properties:
 
Offices & Others
Date of Acquisition
 
Gross Leasable Area (sqm)(1)
 
 
Occupancy (2)
 
 
IRSA CP’s Actual Interest
 
 
3M 22 - Rental revenues (ARS thousand) (6)
 
AAA & A Offices
 
 
 
 
 
 
 
 
 
 
 
 
 
Republica Building
Dec-14
  19,885 
  60.9%
  100%
  94,443 
Boston Tower (6)
Dec-14
    
    
    
  311 
Intercontinental Plaza (3)
Dec-14
  2,979 
  100.0%
  100%
  56,813 
Dot Building
Nov-06
  11,242 
  84.9%
  80%
  63,353 
Zetta
May-19
  32,173 
  81.1%
  80%
  206,243 
261 Della Paolera – Catalinas (5)
Dec-20
  27,690 
  84.6%
  100%
  241,202 
Total AAA & A Offices
 
  93,969 
  78.9%
    
  662,365 
 
    
    
    
    
B Offices
 
    
    
    
    
Suipacha 652/64
Dec-14
  11,465 
  17.3%
  100%
  12,713 
Philips
Jun-17
  8,017 
  75.1%
  100%
  32,953 
Total B Buildings
 
  19,482 
  41.1%
  100%
  45,666 
Subtotal Offices
 
  113,451 
  72.4%
    
  708,031 
 
    
    
    
    
Other rental properties (4)
 
    
    
    
  7,698 
Total Offices and Others
 
    
    
    
  715,729 
(1) Corresponds to the total gross leasable area of each property as of September 30, 2021. Excludes common areas and parking lots.
(2) Calculated by dividing occupied square meters by gross leasable area as of September 30, 2021.
(3) We own 13.2% of the building that has 22,535 square meters of gross leasable area.
(4) Includes all those properties that are not buildings intended for rent, but that are partially or fully rented (Philips Deposit, Anchorena 665, San Martin Plot and Santa María del Plata).
(5) Includes 824 square meters of gross leasable area of the basement.
(6) The office buildings were sold during the fiscal year.
 
IV. Hotels
 
After the restrictions imposed in 2020 due to the pandemic, which kept the sector without operations for approximately 9 months, the activity begins to show signs of recovery thanks to domestic tourism and the government's incentives to promote it in a context where certain restrictions still apply in air flows and the arrival of international tourism.
 
The Group's hotels located in the City of Buenos Aires operate with low occupancy levels, while the Llao Llao resort, in the city of Bariloche, shows a growing demand for domestic tourism and operational indicators similar to those observed before the pandemic.
 
 
6
 
 
IRSA Inversiones y Representaciones Sociedad Anónima 
 
Summary as of September 30, 2021 
 
 (in ARS million)
 
IQ 22
 
 
IQ 21
 
 
YoY Var
 
 
IQ 20
 
 
YoY Var
 
Revenues
  473 
  9 
  5,155.6%
  1.069 
  (55.8)%
Profit from operations
  17 
  (292)
  - 
  128 
  (86.7)%
Depreciation and amortization
  62 
  72 
  (13.9)%
  67 
  (7.5)%
EBITDA
  79 
  (220)
  - 
  195 
  (59.5)%
 
During the first quarter of fiscal year 2022, Hotels segment recorded a decrease in revenues of 55.8% compared with the same quarter of fiscal year 2020 while the segment’s EBITDA reached ARS 79 million, a 59.5% decrease when compared to the same period of fiscal year 2020.
 
The following chart shows certain information regarding our luxury hotels:
 
Hotels
 
Date of Acquisition
 
 
IRSA’s Interest
 
 
Number of rooms
 
 
Occupancy
 
Intercontinental (1)
 
11/01/1997
 
  76,34%
  313 
  11.7%
Sheraton Libertador (2)
 
03/01/1998
 
  100,00%
  200 
  9.6%
Llao Llao (3)
 
06/01/1997
 
  50,00%
  205 
  46.4%
Total
  - 
  - 
  718 
  21.0%
(1)
Through Nuevas Fronteras S.A. (Subsidiary of IRSA).
(2)
Through Hoteles Argentinos S.A.U.
 
(3)
Through Llao Llao Resorts S.A.
 
Hotels’ operating and financial indicators.
 
 
 
IQ 22
 
 
IVQ 21
 
 
IIIQ 21
 
 
IIQ 21
 
 
IQ 21
 
Average Occupancy
  21.0%
  12,1%
  28.2%
  8.0%
  0.6%
Average Rate per Room (USD/night)
  243 
  151 
  230 
  175 
  95 
 
V. Sales and Developments
 
(in ARS million)
 
IQ 22
 
 
IQ 21
 
 
YoY Var
 
 
IQ 20
 
 
YoY Var
 
Revenues
  - 
  59 
  (100.0)%
  127 
  (100.0)%
Net result from fair value adjustment on investment properties
  (1,244)
  15,393 
  (108.1)%
  7,856 
  (115.8)%
Result from operations
  (1,204)
  14,729 
  (108.2)%
  7,692 
  (115.7)%
Depreciation and amortization
  2 
  6 
  (66.7)%
  18 
  (88.9)%
Net result from fair value adjustment on investment properties
  122 
  8,163 
  (98.5)%
  - 
  - 
Barter Agreement results
  - 
  - 
  - 
  - 
  - 
EBITDA (1)
  (1,202)
  14,735 
  (108.2)%
  7,710 
  (115.6)%
Adjusted EBITDA (1)
  164 
  7,505 
  (97.8)%
  (146)
  - 
(1)
See Point XIX: EBITDA Reconciliation
 
Revenues from the “Sales and Development” segment decreased 100% during the first quarter of fiscal year 2022 compared to previous fiscal year. Adjusted EBITDA of Sales and Developments was ARS 164 million during the period compared to ARS 7,505 million in the same quarter of last year, mainly due to the impact of the realized fair value of the sales of Bouchard 710 and Torre Boston in the latter.
 
VI. CAPEX (through our subsidiary IRSA Propiedades Comerciales S.A.)
 
Alto Palermo Expansion
 
We keep working on the expansion of Alto Palermo shopping mall, the shopping mall with 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 in moving the food court to a third level by using the area of an adjacent building acquired in 2015. Work progress as of September 30, 2021, was 95.7% and construction works are expected to be finished by January 2022.
 
 
 
 
7
 
 
IRSA Inversiones y Representaciones Sociedad Anónima 
 
Summary as of September 30, 2021 
 
VII. International
 
Investment in Condor Hospitality Inc.
 
On September 22, 2021, Condor Hospitality Trust S.A. (“Condor”) has signed a sale agreement for its portfolio of 15 hotels in the United States with B9 Cowboy Mezz A LLC, an affiliate of Blackstone Real Estate Partners. This agreement is subject to the approval of the Condor Shareholders' Meeting.
 
In this context, Condor announced a Liquidation and Dissolution Plan with the intention of distributing certain net proceeds from the sale of the hotel portfolio to shareholders in one or more instalments.
 
The sale agreement and the implementation of the Liquidation Plan are subject to the approval of the Condor Shareholders' Meeting.
 
As of the date of these financial statement presentation, the Company owns, directly and indirectly, 3,191,213 ordinary shares representing 21.7% of the capital stock
 
VIII. Corporate
 
(in millions of ARS)
 
IQ 22
 
 
IQ 21
 
 
YoY Var
 
 
IQ 20
 
 
YoY Var
 
Revenues
  - 
  - 
  - 
  - 
  - 
Result from operations
  (115)
  (120)
  (4.2)%
  (176)
  (34.7)%
Depreciation and amortization
  3 
  2 
  50.0%
  2 
  50.0%
EBITDA
  (112)
  (118)
  (5.1)%
  (174)
  (35.6)%
 
IX. Financial Operations and Others
 
Interest in Banco Hipotecario S.A. (“BHSA”)
 
BHSA is a leading bank in the mortgage lending industry, in which IRSA held an equity interest of 29.91% as of September 30, 2021. During the first quarter of fiscal year 2021, the investment in Banco Hipotecario generated an ARS 360 million loss compared to a ARS 88 million loss during the same period of 2021. For further information, visit http://www.cnv.gob.ar or http://www.hipotecario.com.ar.
  
X. EBITDA by Segment (ARS million)
 
IQ 22
 
Shopping Malls
 
 
Offices
 
 
Sales and Developments
 
 
Hotels
 
 
International
 
 
Corporate
 
 
Others
 
 
Total
 
Result from operations
  (2,241)
  (1,280)
  (1,204)
  17 
  (10)
  (115)
  59 
  (4,774)
Depreciation and amortization
  49 
  14 
  2 
  62 
  - 
  3 
  20 
  150 
EBITDA
  (2,192)
  (1,266)
  (1,202)
  79 
  (10)
  (112)
  79 
  (4,624)
 
IQ 21
 
Shopping Malls
 
 
Offices
 
 
Sales and Developments
 
 
Hotels
 
 
International
 
 
Corporate
 
 
Others
 
 
Total
 
Result from operations
  1,513 
  20,561 
  14,729 
  (292)
  17 
  (120)
  750 
  37,158 
Depreciation and amortization
  64 
  23 
  6 
  72 
  - 
  2 
  19 
  186 
EBITDA
  1,577 
  20,584 
  14,735 
  (220)
  17 
  (118)
  769 
  37,344 
EBITDA Var
  (239.0)%
  (106.2)%
  (108.2)%
  - 
  (158.8)%
  (5.1)%
  (89.7)%
  (112.4)%
 
IQ 20
 
Shopping Malls
 
 
Offices
 
 
Sales and Developments
 
 
Hotels
 
 
International
 
 
Corporate
 
 
Others
 
 
Total
 
Result from operations
  3,174 
  11,303 
  7,692 
  128 
  (66)
  (134)
  392 
  22,489 
Depreciation and amortization
  56 
  11 
  18 
  67 
  2 
  2 
  15 
  171 
EBITDA
  3,230 
  11,314 
  7,710 
  195 
  (64)
  (132)
  407 
  22,660 
EBITDA Var
  (167.9)%
  (111.2)%
  (115.6)%
  (59.5)%
  (84.4)%
  (15.2)%
  (80.6)%
  (120.4)%
 
 
8
 
IRSA Inversiones y Representaciones Sociedad Anónima
 
Summary as of September 30, 2021
 
 
 
XI. Reconciliation with Consolidated Statements of Income (ARS million)
 
Below is an explanation of the reconciliation of the company’s profit by segment with its Consolidated Statements of Income. The difference lies in the presence of joint ventures included in the segment but not in the Statements of Income.
 
 
 
Total as per segment
 
 
Joint ventures*
 
 
Expenses and CPF
 
 
 Elimination of inter-segment transactions
 
 
Total as per Statements of Income
 
Revenues
  3,430 
  (24)
  985 
  (9)
  4,382 
Costs
  (745)
  16 
  (1,025)
  - 
  (1,754)
Gross result
  2,685 
  (8)
  (40)
  (9)
  2,628 
Result from sales of investment properties
  (6,609)
  115 
  - 
  - 
  (6,494)
General and administrative expenses
  (752)
  2 
  - 
  13 
  (737)
Selling expenses
  (337)
  (1)
  - 
  - 
  8338)
Other operating results, net
  239 
  1 
  16 
  (4)
  252 
Result from operations
  (4,774)
  109 
  (24)
  - 
  (4,689)
Share of loss of associates and joint ventures
  (80)
  (75)
  - 
  - 
  (155)
Result before financial results and income tax
  (4,854)
  34 
  (24)
  - 
  (4,844)
*Includes Puerto Retiro, CYRSA, Nuevo Puerto Santa Fe and Quality (San Martín plot).
 
XII. Financial Debt and Other Indebtedness
 
The following table describes our total indebtedness as of September 30, 2021:
 
Description
Currency
 
Amount (USD MM) (1)
 
 
Interest Rate
 
Maturity
Bank overdrafts
ARS
  3.2 
 
Floating
 
< 360 days
Series VII NCN
USD
  33.7 
  4.0%
Jan-22
Series X NCN
ARS
  7.1 
 
Floating
 
Mar-22
Series V NCN
USD
  9.2 
  9.0%
May-22
Series IX NCN
USD
  80.7 
  10.0%
Mar-23
Series I NCN
USD
  3.1 
  10.0%
Mar-23
Series VIII NCN
USD
  31.8 
  10.0%
Nov-23
Series XI NCN
USD
  15.8 
  5.0%
Mar-24
Series XII NCN
ARS
  48.3 
 
Floating
 
Mar-24
Series XIII NCN
USD
  58.2 
  3.9%
Aug-24
Loan with IRSA CP (3)
USD
  41.4 
  - 
Mar-22
Other debt
USD
  5.9 
  - 
Feb-22
IRSA’s Total Debt
USD
  338.3 
    
 
Cash & Cash Equivalents + Investments
USD
  6.8 
    
 
IRSA’s Net Debt
USD
  331.6 
    
 
Bank loans and overdrafts
ARS
  51.7 
  - 
 < 360 days
PAMSA loan
USD
  16.2 
 
Fixed
 
Feb-23
IRSA CP NCN Class II
USD
  358.5 
  8.75%
Mar-23
IRSA CP’s Total Debt
USD
  426.4 
    
 
Cash & Cash Equivalents + Investments (2)
USD
  126.0 
    
 
Intercompany Credit
USD
  41.4 
    
 
IRSA CP’s Net Debt
USD
  259.0 
    
 
(1) 
Principal amount in USD (million) at an exchange rate of ARS 98.74/USD, without considering accrued interest or eliminations of balances with subsidiaries.
(2) 
Includes Cash and cash equivalents, Investments in Current Financial Assets and related companies notes holding.
(3) 
Includes amounts taken by IRSA and subsidiaries.
 
 
9
 
IRSA Inversiones y Representaciones Sociedad Anónima
 
Summary as of September 30, 2021
 
 
XIII. Material and Subsequent Events
 
August 2021: Note’s issuance
 
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 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.
 
September 2021: Warrants exercise
 
Between September 17 and 25, 2021, certain warrants holders have exercised their right to acquire additional shares and 30,741 ordinary shares of the Company were registered, with a nominal value of VN ARS 1. As a result of the exercise, USD 13,280.11 has collected the Company.
 
After the exercise of these warrants, the number of shares and the capital stock of the Company goes from 658,676,460 to 658,707,201, and the new number of outstanding warrants goes from 80,000,000 to 79,969,259.
 
September 2021: Merger Proposal
 
On September 30, 2021, IRSA & IRSA Propiedades Comerciales Boards of Directors approved the prior merger agreement between both companies and the corresponding special financial statements as of June 30, 2021, initiating the corporate reorganization process under the terms of art. 82 et seq. of the General Law of Companies. The merger process has particular characteristics given that they are two companies included in the public offering regime, reason why, not only apply the current provisions of the General Law of Companies but also the procedures established regarding reorganization of companies of the Regulations of the “Comisión Nacional de Valores” (National Securities Commission) and the markets, both national and foreign, where their shares are listed.
 
The Merger is carried out in order to streamline the technical, administrative, operational and economic resources of both Companies, standing out among others: (a) the operation and maintenance of a single transactional information system and centralization of the entire accounting registration process; (b) presentation of a single financial statement to the different control agencies with the consequent cost savings in accounting and advisory fees, tariffs and other related expenses; (c) simplification of the accounting information reporting and consolidation process,as a consequence of the reduction that the merger would imply for the corporate structure as a whole; (d) removal of the IRSA PC public offering listing on BYMA and NASDAQ with the associated costs that this represents; (e) cost reduction for legal fees and tax filings; (f) increase in the percentage of the capital stock that is listed in the different markets, increasing the liquidity of the listed shares; (g) tax efficiencies and (h) preventively avoid the potential overlap of activities between the Companies.
 
The merger is subject to the approval of the shareholders' meeting of both companies whose call will be made once they have the administrative approval of the United States Securities and Exchange Commission, an entity to which they are subject since both companies list their shares in markets that operate in said jurisdiction.
 
Once the merger by absorption between IRSA as the absorbing company and IRSA CP as the absorbed company has been approved, the effective date will be July 1, 2021, date from which the transfer to the absorbing company of all the assets of the absorbed company will take effect, thereby incorporating all its rights and obligations, assets, and liabilities into the equity of the absorbing company, all subject to the required corporate approvals.
 
 
10
 
 
IRSA Inversiones y Representaciones Sociedad Anónima 
 
Summary as of September 30, 2021
 
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.
 
The exchange of IRSA PC shares for IRSA shares will be carried out once the entire administrative process has been completed and once the registration has been made in the “Inspección General de Justicia” (General Inspection of Justice), a process that may take several months.
 
October 2021: General Ordinary Shareholders’ Meeting
 
At the General Ordinary and Extraordinary Shareholders’ Meeting held on October21, 2021, the following matters, inter alia, were resolved:
 
●
To partially write off the special reserve in the amount of ARS 30,693,399,903 which, adjusted for inflation, amounts to the sum of ARS 33,542,594,551, and use it for the total absorption of the negative result for the fiscal year 2021
 
●
Designation of board members.
 
●
Compensations to the Board of Directors for the fiscal year ended June 30, 2021.

XIV. Summarized Comparative Consolidated Balance Sheet
 
(in ARS million) 
  09.30.2021 
  09.30.2020 
  09.30.2019 
Non-current assets
  221,796 
  285,472 
  738,472 
Current assets
  15,308 
  20,103 
  342,046 
Total assets
  237,104 
  305,575 
  1,080,518 
Capital and reserves attributable to the equity holders of the parent
  66,801 
  107,302 
  78,541 
Non-controlling interest
  22,423 
  35,623 
  95,390 
Total shareholders’ equity
  89,224 
  142,925 
  173,931 
Non-current liabilities
  126,629 
  116,833 
  694,829 
Current liabilities
  21,251 
  45,817 
  211,758 
Total liabilities
  147,880 
  162,650 
  906,587 
Total liabilities and shareholders’ equity
  237,104 
  305,575 
  1,080,518 
 
 
 
11
 
IRSA Inversiones y Representaciones Sociedad Anónima
 
Summary as of September 30, 2021
 
 
 
XV. Summarized Comparative Consolidated Income Statement
 
 (in ARS million) 
  09.30.2021 
  09.30.2020 
  09.30.2021 
Profit from operations
  (4,689)
  35,856 
  21,562 
Share of profit of associates and joint ventures
  (155)
  225 
  1,124 
(Loss) / Profit from operations before financing and taxation
  (4,844)
  36,081 
  22,686 
Financial income
  62 
  86 
  127 
Financial cost
  (2,004)
  (2,429)
  (2,717)
Other financial results
  2,966 
  952 
  (13,955)
Inflation adjustment
  340 
  (89)
  (599)
Financial results, net
  1,364 
  (1,480)
  (17,144)
Results before income tax
  (3,480)
  34,601 
  5,542 
Income tax
  2,466 
  (12,133)
  (3,819)
Results of the period from continued operations
  (1,014)
  22,468 
  1,723 
Profit from discontinued operations after taxes
  0 
  (9,752)
  21,174 
Result of the period
  (1,014)
  12,716 
  22,897 
Other comprehensive (loss) / income for the period
  (164)
  (13,223)
  24,162 
Total comprehensive result for the period
  (1,178)
  (507)
  47,059 
 
    
    
    
Attributable to:
    
    
    
Equity holders of the parent
  (762)
  4,443 
  5,440 
Non-controlling interest
  (416)
  (4,950)
  41,619 
 
XVI. Summary Comparative Consolidated Cash Flow
 
(in ARS million) 
  09.30.2021 
  09.30.2020 
  09.30.2019 
Net cash generated from operating activities
  1,653 
  5,125 
  15,959 
Net cash generated from investing activities
  (205)
  63,187 
  5,321 
Net cash used in financing activities
  (1,048)
  (41,387)
  (53,729)
Net increase in cash and cash equivalents
  400 
  26,925 
  (32,449)
Cash and cash equivalents at beginning of year
  2,110 
  148,318 
  141,888 
Cash and cash equivalents reclassified to available for sale
  - 
  - 
  55 
Subsidiaries deconsolidation
  - 
  (158,820)
  - 
Foreign exchange gain on cash and changes in fair value of cash equivalents
  (357)
  (9,719)
  21,155 
Cash and cash equivalents at period-end
  2,153 
  6,704 
  130,649 
 
XVII. Comparative Ratios
 
(in ARS million) 
  09.30.2021 
 
 
 
  09.30.2020 
 
 
 
 
 
 
 
 
 
Liquidity
    
 
 
 
    
 
 
 
 
 
 
 
 
 
CURRENT ASSETS
  15,308 
  0.72 
  20,103 
  0.44 
  342,046 
  1.62 
CURRENT LIABILITIES
  21,251 
    
  45,817 
    
  211,758 
    
Indebtedness
    
    
    
    
    
    
TOTAL LIABILITIES
  147,880 
  2.21 
  162,650 
  1.52 
  906,587 
  11.54 
SHAREHOLDERS’ EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT
  66,801 
    
  107,302 
    
  78,541 
    
Solvency
    
    
    
    
    
    
SHAREHOLDERS’ EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT
  66,801 
  0.45 
  107,302 
  0.66 
  78,541 
  0.09 
TOTAL LIABILITIES
  147,880 
    
  162,650 
    
  906,587 
    
Capital Assets
    
    
    
    
    
    
NON-CURRENT ASSETS
  221,796 
  0.94 
  285,472 
  0.93 
  738,472 
  0.68 
TOTAL ASSETS
  237,104 
    
  305,575 
    
  1,080,518 
    
 

 
 
12
 
IRSA Inversiones y Representaciones Sociedad Anónima
 
Summary as of September 30, 2021
 
 
 
XVIII. EBITDA Reconciliation
 
In this summary report we present EBITDA and Adjusted EBITDA. We define EBITDA as profit for the period excluding: (i) interest income, (ii) interest expense, (iii) income tax expense, and (iv) depreciation and amortization. We define Adjusted EBITDA as EBITDA minus (i) total financial results, net excluding interest expense, net (mainly foreign exchange differences, net gains/losses from derivative financial instruments; gains/losses of financial assets and liabilities at fair value through profit or loss; and other financial results, net) and minus (ii) share of profit of associates and joint ventures and minus (iii) net profit from fair value adjustment of investment properties, not realized.
 
EBITDA and Adjusted EBITDA are non-IFRS financial measures that do not have standardized meanings prescribed by IFRS. We present EBITDA and adjusted EBITDA because we believe they provide investors supplemental measures of our financial performance that may facilitate period-to-period comparisons on a consistent basis. Our management also uses EBITDA and Adjusted EBITDA from time to time, among other measures, for internal planning and performance measurement purposes. EBITDA and Adjusted EBITDA should not be construed as an alternative to profit from operations, as an indicator of operating performance or as an alternative to cash flow provided by operating activities, in each case, as determined in accordance with IFRS. EBITDA and Adjusted EBITDA, as calculated by us, may not be comparable to similarly titled measures reported by other companies. The table below presents a reconciliation of profit from operations to EBITDA and Adjusted EBITDA for the periods indicated:
 
 
 
 
2021
 
 
2020
 
 
2019
 
Profit for the period
  (1,014)
  12,716 
  22,897 
Result from discontinued operations
  - 
  9,752 
  (21,174)
Interest income 
  (62)
  (27)
  (127)
Interest expense 
  1,863 
  2,265 
  2,533 
Income tax
  (2,466)
  12,133 
  3,819 
Depreciation and amortization 
  149 
  186 
  181 
EBITDA (unaudited) 
  (1,530)
  37,025 
  8,130 
Net gain from fair value adjustment of investment properties
  6,494 
  (36,728)
  (18,829)
Realized net gain from fair value adjustment of investment properties
  122 
  8,163 
  - 
Share of profit of associates and joint ventures 
  155 
  (225)
  (1,124)
Dividends earned
  - 
  (18)
  - 
Foreign exchange differences net 
  (2,842)
  13 
  13,614 
Result from derivative financial instruments 
  (3)
  286 
  (343)
Fair value gains of financial assets and liabilities at fair value through profit or loss
  (124)
  (1,220)
  695 
Inflation adjustment
  (340)
  89 
  599 
Other financial costs/income
  144 
  92 
  173 
Adjusted EBITDA (unaudited) 
  2,076 
  7,477 
  2,915 
Adjusted EBITDA Margin (unaudited)(1)
  47.38%
  304.81%
  42.61%
(1) Adjusted EBITDA margin is calculated as Adjusted EBITDA, divided by revenue from sales, rents and services.
 
 
 
13
 
IRSA Inversiones y Representaciones Sociedad Anónima
 
Summary as of September 30, 2021
 
 
XIX. Brief comment on prospects for the Fiscal Year
 
We are optimistic about the recovery of the shopping center business during fiscal year 2022. Activity indicators, such as tenants’ sales and visiting public, evolve favorably and we continue working on occupying the area that was made available because of the pandemic. Likewise, we will continue to position the company's Marketplace to complement physical in-store sales with online sales, offering our customers different purchase and delivery alternatives.
 
The office segment continues to evolve in line with new hybrid work trends. Although we have evidenced a slight reduction in rental values along with an increase in vacancies, our current portfolio, after a "flight to quality" process, brings together the differential characteristics to offer the services level required by the most demanding corporations. We will work during the fiscal year on the full occupancy of the building "261 Della Paolera", inaugurated in December 2020, as well as the rest of the vacant surface of the portfolio.
 
Regarding hotels segment, after the restrictions imposed in 2020 due to the pandemic, which kept the sector without operations for approximately 9 months, the activity is beginning to show signs of recovery from domestic tourism and government incentives to promote it. 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.
 
In 2022 we will continue working in 2022 to reduce and make the structure costs more efficient and to consolidate the best real estate portfolio in Argentina.
 
The Company's Board of Directors approved during the quarter a corporate reorganization process consisting of a merger by absorption within the framework of the Companies Law No. 19,550 and the Income Tax Law No. 20,628, in which the Company would absorb IRSA PC, which would be dissolved without being liquidated. The process is pending approval by the Shareholders' Meeting which will be carried out in the coming months.
 
The Company remains committed to preserve the health and well-being of its customers, employees, tenants, and the entire population, constantly re-evaluating its decisions in accordance with the evolution of events, the regulations that are issued and the guidelines of the competent authorities.
 
Saúl Zang
First Vice-Chairman
 
 
 
14