EX-99.1 2 exhibit991.htm ADDITIONAL EXHIBITS exhibit991
 
 
 
 
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
Unaudited Condensed Interim Consolidated Financial Statements as of March 31, 2022 and for the nine and three-month periods 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: 810,870,080 shares. (*)
 
Common Stock subscribed, issued and paid-up nominal value (in millions of ARS): 811.
 
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: 434,263,359 common shares.
 
Percentage of votes of the Parent Company (direct and indirect interest) on the shareholders’ equity: 53.71% (1).
 
 
CAPITAL STATUS
 
Type of stock
 
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
  810,878,080 
  811 
 
(1) For computation purposes, treasury shares have been subtracted.
(2) Company not included in the Optional Statutory System of Public Offer of Compulsory Acquisition.
 
(*) By Extraordinary Shareholders’ Meeting dated December 22, 2021, an increase of the capital stock of the company was approved, as a result of the merger by absorption with IRSA Propiedades Comerciales S.A. in the amount of ARS 152,158,215 through the issuance of 152,158,215 ordinary shares of ARS 1 par value each and one vote per share. After March 31, 2022, and prior to the date of presentation of these financial statements, the merger is registered and approved in the corresponding control agencies. In the same way, the capital increase and the issuance of shares related to the 7,483 warrants exercised in February are in process of being registered in the “Inspección General de Justicia” (General Inspection of Justice).
 
 
 
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 
9
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 
16
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 
20
Note 16 – Trade and other payables 
20
Note 17 – Borrowings 
21
Note 18 – Provisions 
22
Note 19 – Taxes 
22
Note 20 – Revenues 
24
Note 21 – Expenses by nature 
24
Note 22 – Cost of goods sold and services provided 
24
Note 23 – Other operating results, net 
25
Note 24 – Financial results, net 
25
Note 25 – Related party transactions 
26
Note 26 – CNV General Resolution N° 622 
28
Note 27 – Foreign currency assets and liabilities 
28
Note 28 – Results from discontinued operations 
29
Note 29 – Other significant events of the period 
29
Note 30 – Subsequent Events 
31
 
 
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.
CNV
 
Securities Exchange Commission
CPF
 
Collective Promotion Funds
Condor
 
Condor Hospitality Trust Inc.
Cresud
 
Cresud S.A.C.I.F. y A.
Financial Statements
 
Unaudited Condensed Interim Consolidated Financial Statements
Annual Financial Statements
 
Consolidated Financial Statements as of June 30, 2019
IAS
 
International Accounting Standards
IASB
 
International Accounting Standards Board
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
Shufersal
 
Shufersal Ltd.
TGLT
 
TGLT S.A.
 
 
1
IRSA Inversiones y Representaciones Sociedad Anónima
 
Unaudited Condensed Interim Consolidated Statements of Financial Position
as of March 31, 2022 and June 30, 2021
(All amounts in millions of pesos, except otherwise indicated)
 
 
 
Note
 
03.31.2022
 
 
06.30.2021
 
ASSETS
 
 
 
 
 
 
 
Non-current assets
 
 
 
 
 
 
 
Investment properties
8
  234,561 
  256,038 
Property, plant and equipment
9
  6,820 
  5,796 
Trading properties
10, 22
  2,389 
  2,298 
Intangible assets
11
  3,103 
  3,355 
Right-of-use assets
12
  1,084 
  1,134 
Investments in associates and joint ventures
7
  13,325 
  17,006 
Deferred income tax assets
19
  722 
  623 
Income tax and MPIT credit
 
  25 
  42 
Trade and other receivables
14
  4,097 
  3,980 
Investments in financial assets
13
  1,038 
  1,703 
Total non-current assets
 
  267,164 
  291,975 
Current assets
 
    
    
Trading properties
10, 22
  299 
  159 
Inventories
22
  109 
  101 
Income tax and MPIT credit
 
  60 
  231 
Trade and other receivables
14
  11,838 
  11,848 
Investments in financial assets
13
  6,402 
  4,426 
Derivative financial instruments
13
  4 
  - 
Cash and cash equivalents
13
  5,687 
  2,699 
Total current assets
 
  24,399 
  19,464 
TOTAL ASSETS
 
  291,563 
  311,439 
SHAREHOLDERS’ EQUITY
 
    
    
Shareholders' equity attributable to equity holders of the parent (according to corresponding statement)
 
  117,889 
  86,438 
Non-controlling interest
 
  8,394 
  29,206 
TOTAL SHAREHOLDERS’ EQUITY
 
  126,283 
  115,644 
LIABILITIES
 
    
    
Non-current liabilities
 
    
    
Borrowings
17
  50,935 
  65,318 
Lease liabilities
 
  947 
  1,191 
Deferred income tax liabilities
19
  84,251 
  96,106 
Trade and other payables
16
  2,303 
  1,939 
Provisions
18
  1,727 
  159 
Derivative financial instruments
13
  - 
  13 
Salaries and social security liabilities
 
  91 
  120 
Total non-current liabilities
 
  140,254 
  164,846 
Current liabilities
 
    
    
Trade and other payables
16
  7,312 
  7,134 
Borrowings
17
  12,037 
  21,541 
Lease liabilities
 
  132 
  77 
Provisions
18
  223 
  205 
Salaries and social security liabilities
 
  518 
  610 
Income tax and MPIT liabilities
 
  4,782 
  1,315 
Derivative financial instruments
13
  22 
  67 
Total current liabilities
 
  25,026 
  30,949 
TOTAL LIABILITIES
 
  165,280 
  195,795 
TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES
 
  291,563 
  311,439 
 
The accompanying notes are an integral part of these Unaudited Condensed Interim Consolidated Financial Statements.
 
 
 
 
 
                                            .
Eduardo S. Elsztain
President
 
 
2
IRSA Inversiones y Representaciones Sociedad Anónima
 
Unaudited Condensed Interim Consolidated Statements of Income and Other Comprehensive Income
for the nine and three-month periods ended March 31, 2022 and 2021
(All amounts in millions of pesos, except otherwise indicated)
 
 
 
 
Nine months
 
 
Three months
 
 
Note
 
03.31.2022
 
 
03.31.2021
 
 
03.31.2022
 
 
03.31.2021
 
Revenues
20
  19,461 
  14,234 
  6,634 
  5,560 
Costs
21, 22
  (7,459)
  (6,915)
  (2,566)
  (2,309)
Gross profit
 
  12,002 
  7,319 
  4,068 
  3,251 
Net loss from fair value adjustment of investment properties
8
  (11,095)
  (10,635)
  (37,153)
  (26,869)
General and administrative expenses
21
  (3,115)
  (3,384)
  (917)
  (729)
Selling expenses
21
  (1,349)
  (1,624)
  (374)
  (245)
Other operating results, net
23
  130 
  (81)
  176 
  1 
Loss from operations
 
  (3,427)
  (8,405)
  (34,200)
  (24,591)
Share of loss of associates and joint ventures
7
  (753)
  (3,168)
  (614)
  (2,375)
Loss before financial results and income tax
 
  (4,180)
  (11,573)
  (34,814)
  (26,966)
Finance income
24
  289 
  140 
  107 
  20 
Finance costs
24
  (6,360)
  (7,182)
  (1,883)
  (1,633)
Other financial results
24
  14,527 
  9,056 
  5,641 
  3,513 
Inflation adjustment
24
  1,206 
  309 
  707 
  (2,387)
Financial results, net
 
  9,662 
  2,323 
  4,572 
  (487)
Profit / (loss) before income tax
 
  5,482 
  (9,250)
  (30,242)
  (27,453)
Income tax
19
  6,020 
  (1,097)
  12,122 
  5,918 
Profit/ (loss) for the period from continuing operations
 
  11,502 
  (10,347)
  (18,120)
  (21,535)
Loss for the period from discontinued operations
28
  - 
  (12,474)
  - 
  - 
Profit / (loss) for the period
 
  11,502 
  (22,821)
  (18,120)
  (21,535)
Other comprehensive income:
 
    
    
    
    
Items that may be reclassified subsequently to profit or loss:
 
    
    
    
    
Currency translation adjustment
 
  (684)
  (23)
  (180)
  (498)
Revaluation surplus
 
  - 
  570 
  - 
  71 
Other comprehensive (loss) / income for the period from continuing operations
 
  (684)
  547 
  (180)
  (427)
Other comprehensive loss for the period from discontinued operations
 
  - 
  (15,996)
  - 
  - 
Total other comprehensive loss for the period
 
  (684)
  (15,449)
  (180)
  (427)
Total comprehensive income / (loss) for the period
 
  10,818 
  (38,270)
  (18,300)
  (21,962)
 
    
    
    
    
Total comprehensive income / (loss) from continuing operations
 
  10,818 
  (9,800)
  (18,300)
  (21,962)
Total comprehensive loss from discontinued operations
 
  - 
  (28,470)
  - 
  - 
Total comprehensive income / (loss) for the period
 
  10,818 
  (38,270)
  (18,300)
  (21,962)
 
    
    
    
    
Profit/ (loss) for the period attributable to:
 
    
    
    
    
Equity holders of the parent
 
  12,470 
  (17,818)
  (17,385)
  (17,547)
Non-controlling interest
 
  (968)
  (5,003)
  (735)
  (3,988)
 
    
    
    
    
Profit / (loss) from continuing operations attributable to:
 
    
    
    
    
Equity holders of the parent
 
  12,470 
  (7,966)
  (17,385)
  (17,547)
Non-controlling interest
 
  (968)
  (2,381)
  (735)
  (3,988)
 
    
    
    
    
Total comprehensive income/ (loss) attributable to:
 
    
    
    
    
Equity holders of the parent
 
  11,792 
  (23,994)
  (17,574)
  (18,114)
Non-controlling interest
 
  (974)
  (14,276)
  (726)
  (3,848)
 
    
    
    
    
Total comprehensive Income/(loss) from continuing operations attributable to:
 
    
    
    
    
Equity holders of the parent
 
  11,792 
  (6,320)
  (17,574)
  (18,114)
Non-controlling interest
 
  (974)
  (3,480)
  (726)
  (3,848)
 
    
    
    
    
Profit / (loss) per share attributable to equity holders of the parent: (i)
 
    
    
    
    
Basic
 
  15.42 
  (30.91)
  (21.49)
  (30.44)
Diluted
 
  14.00 
  (30.91)
  (21.49)
  (30.44)
 
    
    
    
    
Profit/ (loss) per share from continuing operations attributable to equity holders of the parent:
 
    
    
    
    
Basic
 
  15.42 
  (13.82)
  (21.49)
  (30.44)
Diluted
 
  14.00 
  (13.82)
  (21.49)
  (30.44)
 
(i)
The basic profit/ (loss) per share have been calculated using 808,894,532 shares at 03.31.22 and 576,478,838 at 03.31.21. If 808,894,532 shares had been used for the calculation, the result per share would be (ARS 22.03) for 03.31.21. The diluted profit/ (loss) per share have been calculated using 890,834.686 shares at 03.31.22 and 578,676,471 at 03.31.21. If 890,834,686 shares had been used for the calculation, the result per share would be (ARS 20.00) for 03.31.21. See note 17 to the Annual Financial Statements
(ii)
The accompanying notes are an integral part of these Unaudited Condensed Interim Consolidated Financial Statements.
 
 
 
 
                                            .
Eduardo S. Elsztain
President
 
 
3
IRSA Inversiones y Representaciones Sociedad Anónima
 
Unaudited Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity
for the nine-month period ended March 31, 2022
(All amounts in millions of pesos, except otherwise indicated)
 
 
 
Attributable to equity holders of the parent
 
 
 
 
 
 
 
 
 
Share capital
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Issued
 
 
To issue
 
 
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 (v)
 
 
Retained earnings
 
 
Subtotal
 
 
Non-controlling interest
 
 
Total Shareholders’ equity
 
Balance as of July 1, 2021
  657 
  - 
  2 
  29,087 
  2,487 
  33,703 
  207 
  2,241 
  19,746 
  38,151 
  (39,843)
  86,438 
  29,206 
  115,644 
Profit / (loss) for the period
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  12,470 
  12,470 
  (968)
  11,502 
Other comprehensive loss for the period
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (678)
  - 
  (678)
  (6)
  (684)
Total profit / (loss) and other comprehensive loss for the period
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (678)
  12,470 
  11,792 
  (974)
  10,818 
Assignment of results according to A.G.O.
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (42,908)
  42,908 
  - 
  - 
  - 
Warrants exercise (iii)
  - 
  - 
  - 
  - 
  (1)
  5 
  - 
  - 
  - 
  - 
  - 
  4 
  - 
  4 
Repurchase of own shares (iv)
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (33)
  - 
  (33)
  - 
  (33)
Capitalisation of irrevocable contributions
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  26 
  26 
Dividend distribution
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (91)
  (91)
Incorporated by merger
  - 
  152 
  - 
  24 
  - 
  22,558 
  - 
  417 
  - 
  (491)
  (2,972)
  19,688 
  (19,773)
  (85)
Balance as of March 31, 2022
  657 
  152 
  2 
  29,111 
  2,486 
  56,266 
  207 
  2,658 
  19,746 
  (5,959)
  12,563 
  117,889 
  8,394 
  126,283 
 
(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) As of March 31, 2022, the remaining warrants to exercise amount to 79,956,595, equivalent to the same number of shares. See Note 29 to this Financial Statements.
(iv) Related to the Shares Buyback Program approved by the Board on March 11, 2022. As of March 31, 2022 the Company has bought 339,622 shares. See Note 29 to this Financial Statement
(v) Group´s other reserves for the period ended March 31, 2022 are comprised as follows:
()
(NaN)
 
 
 
Cost of treasury stock
 
 
Changes in non-controlling interest
 
 
Reserve for share-based payments
 
 
Reserve for future dividends
 
 
Currency translation adjustment reserve
 
 
Hedging instruments
 
 
Special reserve
 
 
Reserve for defined contribution plans
 
 
Other reserves
 
 
Revaluation surplus
 
 
Total Other reserves
 
Balance as of July 1, 2021
  (358)
  (11,771)
  401 
  3,552 
  904 
  (902)
  44,048 
  177 
  - 
  2,100 
  38,151 
Other comprehensive loss for the period
  - 
  - 
  - 
  - 
  (678)
  - 
  - 
  - 
  - 
  - 
  (678)
Total comprehensive loss for the period
  - 
  - 
  - 
  - 
  (678)
  - 
  - 
  - 
  - 
  - 
  (678)
Repurchase of own shares
  (33)
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (33)
Assignment of results according to A.G.O.
  - 
  - 
  - 
  - 
  - 
  - 
  (42,908)
  - 
  - 
  - 
  (42,908)
Incorporated by merger
  - 
  (663)
  - 
  - 
  (16)
  - 
  - 
  - 
  29 
  159 
  (491)
Balance as of March 31, 2022
  (391)
  (12,434)
  401 
  3,552 
  210 
  (902)
  1,140 
  177 
  29 
  2,259 
  (5,959)
 
 There are no cumulative unpaid dividends on preferred shares.
 The accompanying notes are an integral part of these Unaudited Condensed Interim Consolidated Financial Statements.
 
 
4
 
 
Unaudited Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity
for the nine-month period ended March 31, 2021
(All amounts in millions of pesos, except otherwise indicated)
 
 
 
Attributable to equity holders of the parent
 
 
 
 
 
 
 
 
 
Share capital
 
 
Treasury shares
 
 
Inflation adjustment of share capital and treasury shares (i)
 
 
Share premium
 
 
Additional paid-in capital from treasury shares
 
 
Legal reserve
 
 
Special reserve Resolution CNV 609/12 (ii)
 
 
Other reserves (iii)
 
 
Accumulated deficit
 
 
Subtotal
 
 
Non-controlling interest
 
 
Total Shareholders’ equity
 
Balance as of July 1, 2020
  577 
  2 
  29,049 
  30,531 
  200 
  1,017 
  19,746 
  12,380 
  26,450 
  119,952 
  137,590 
  257,542 
Loss for the period
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (17,818)
  (17,818)
  (5,003)
  (22,821)
Other comprehensive loss for the period
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (6,176)
  - 
  (6,176)
  (9,273)
  (15,449)
Total loss and other comprehensive loss for the period
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (6,176)
  (17,818)
  (23,994)
  (14,276)
  (38,270)
Assignment of results according to A.G.O.
  - 
  - 
  - 
  - 
  - 
  1,224 
  - 
  22,222 
  (23,446)
  - 
  - 
  - 
Distribution of dividends in shares
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (1,017)
  (1,017)
  - 
  (1,017)
Capitalisation of irrevocable contributions
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  22 
  22 
Dividend distribution
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (3,750)
  (3,750)
Decrease due to loss of control
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (87,398)
  (87,398)
Other changes in equity
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  10,980 
  - 
  10,980 
  1,477 
  12,457 
Reserve for share-based payments
  - 
  - 
  - 
  - 
  6 
  - 
  - 
  (6)
  - 
  - 
  - 
  - 
Changes in non-controlling interest
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (571)
  - 
  (571)
  1,246 
  675 
Balance as of March 31, 2021
  577 
  2 
  29,049 
  30,531 
  206 
  2,241 
  19,746 
  38,829 
  (15,831)
  105,350 
  34,911 
  140,261 
 
(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) Group’s other reserves for the period ended March 31, 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
 
 
Other reserves from subsidiaries
 
 
Revaluation surplus
 
 
Total Other reserves
 
Balance as of July 1, 2020
  (361)
  (11,064)
  414 
  3,552 
  (1,529)
  (768)
  21,827 
  (822)
  225 
  906 
  12,380 
Other comprehensive loss for the period
  - 
  - 
  - 
  - 
  (6,797)
  (101)
  - 
  237 
  - 
  485 
  (6,176)
Total comprehensive loss for the period
  - 
  - 
  - 
  - 
  (6,797)
  (101)
  - 
  237 
  - 
  485 
  (6,176)
Reserve for share-based payments
  3 
  - 
  (9)
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (6)
Assignment of results according to A.G.O.
  - 
  - 
  - 
  - 
  - 
  - 
  22,222 
  - 
  - 
  - 
  22,222 
Changes in non-controlling interest
  - 
  (571)
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (571)
Other changes in equity
  - 
  (109)
  - 
  - 
  9,821 
  (484)
  - 
  1,312 
  (225)
  665 
  10,980 
Balance as of March 31, 2021
  (358)
  (11,744)
  405 
  3,552 
  1,495 
  (1,353)
  44,049 
  727 
  - 
  2,056 
  38,829 
 
    
    
    
    
    
    
    
    
    
    
    
 
    There are no cumulative unpaid dividends on preferred shares.
 
The accompanying notes are an integral part of these Unaudited Condensed Interim Consolidated Financial Statements.
 
 
 
 
 
                                            .
Eduardo S. Elsztain
President
 
 
5
IRSA Inversiones y Representaciones Sociedad Anónima
 
Unaudited Condensed Interim Consolidated Statements of Cash Flows
for the nine-month period ended March 31, 2022 and 2021
(All amounts in millions of pesos, except otherwise indicated)
 
 
 
Note
 
03.31.2022
 
 
03.31.2021
 
Operating activities:
 
 
 
 
 
 
 
Net cash generated from continuing operating activities before income tax paid
15
  7,290 
  51 
Income tax and MPIT paid
 
  (209)
  (65)
Net cash generated from / (used in) continuing operating activities
 
  7,081 
  (14)
Net cash generated from discontinued operating activities
 
  - 
  4,334 
Net cash generated from operating activities
 
  7,081 
  4,320 
Investing activities:
 
    
    
Contributions and issuance of capital in associates and joint ventures
 
  (138)
  (56)
Acquisition and improvements of investment properties
 
  (2,267)
  (1,404)
Advances for the acquisition of investment properties
 
  (2,239)
  - 
Proceeds from sales of investment properties
 
  11,457 
  24,864 
Acquisitions and improvements of property, plant and equipment
 
  (139)
  (323)
Proceeds from sales of property, plant and equipment
 
  - 
  54 
Acquisitions of intangible assets
 
  (21)
  (19)
Dividends collected from associates and joint ventures
 
  3,057 
  - 
Proceeds from loans granted
 
  386 
  - 
Payment of derivative financial instruments
 
  (60)
  (696)
Acquisitions of investments in financial assets
 
  (8,559)
  (11,959)
Proceeds from disposal of investments in financial assets
 
  7,940 
  18,871 
Interest received
 
  223 
  779 
Proceeds from sales of intangible assets
 
  135 
  - 
Net cash generated from continuing investing activities
 
  9,775 
  30,111 
Net cash generated from discontinued investing activities
 
  - 
  61,633 
Net cash generated from investing activities
 
  9,775 
  91,744 
Financing activities:
 
    
    
Borrowings and issuance of non-convertible notes
 
  4,145 
  14,808 
Payment of borrowings and non-convertible notes
 
  (8,494)
  (52,305)
(Payment) / collection of short-term loans, net
 
  (4,035)
  10,060 
Interests paid
 
  (6,637)
  (10,336)
Repurchase of non-convertible notes
 
  (784)
  (4,673)
Acquisition of non-controlling interest in subsidiaries
 
  - 
  (82)
Proceeds from warrants exercise
 
  4 
  - 
Payment of borrowings to related parties
 
  (347)
  - 
Dividends paid to non-controlling interest in subsidiaries
 
  (91)
  (3,617)
Sale of own non-convertible notes
 
  2,900 
  7,886 
Payment of lease liabilities
 
  (25)
  (45)
Repurchase of own shares
 
  (33)
  - 
Net cash used in continuing financing activities
 
  (13,397)
  (38,304)
Net cash used in discontinued financing activities
 
  - 
  (25,389)
Net cash used in financing activities
 
  (13,397)
  (63,693)
Net increase / (decrease) in cash and cash equivalents from continuing activities
 
  3,459 
  (8,207)
Net increase in cash and cash equivalents from discontinued activities
 
  - 
  40,578 
Net increase in cash and cash equivalents
 
  3,459 
  32,371 
Cash and cash equivalents at beginning of period
 
  2,699 
  189,730 
Inflation adjustment
 
  (207)
  (250)
Deconsolidation of subsidiaries
 
  - 
  (203,165)
Foreign exchange gain/ (loss) on cash and fair value result for cash equivalents
 
  (264)
  (12,404)
Cash and cash equivalents at end of period
13
  5,687 
  6,282 
 
The accompanying notes are an integral part of these Unaudited Condensed Interim Consolidated Financial Statements.
 
 
 
 
 
                                            .
Eduardo S. Elsztain
President
 
 
6
IRSA Inversiones y Representaciones Sociedad Anónima
 
Notes to the Unaudited Condensed Interim Consolidated Financial Statements
(Amounts in millions of pesos, except otherwise indicated)
 
1.
The Group’s business and general information
 
These Financial Statements have been approved for issuance by the Board of Directors, on February 9, 2022.
 
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, whose main shareholder and final beneficiary is Eduardo Sergio Elsztain.
 
As of the end of these Unaudited Condensed Interim Consolidated Financial Statements (hereinafter, Financial Statements), the Group operates 14 shopping malls, 7 premium offices and an extensive land reserve for future commercial developments; operates and holds a majority interest (with the exception of La Ribera Shopping Center, of which it has a 50% ownership interest) in a portfolio of 14 shopping malls in Argentina, six of which are located in the Autonomous City of Buenos Aires (Abasto Shopping, Alcorta Shopping, Alto Palermo, Patio Bullrich, Dot Baires Shopping and Distrito Arcos), two in Buenos Aires province (Alto Avellaneda and Soleil Premium Outlet) and the rest are situated in different provinces (Alto Noa in the City of Salta, Alto Rosario in the City of Rosario, Mendoza Plaza in the City of Mendoza, Córdoba Shopping Villa Cabrera in the City of Córdoba, Alto Comahue in the City of Neuquén and La Ribera Shopping in the City of Santa Fe). The Group also owns the historic building where the Patio Olmos Shopping Mall is located, operated by a third party.
 
As stated in Note 1 to the consolidated financial statements as of June 30, 2021, after the declaration of insolvency and liquidation of IDBD in which the Group lost control of it, the results of such company as of December 30,2020 were 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 six months ended March 31, 2022 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.
 
 
7
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
 
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 March 31, 2022, according to official statistics (INDEC) and following the guidelines described in Resolution 539/18.
 
 
 
As of March 31, 2022 (accumulated nine months)
 
Price variation
  40%
 
As a consequence of the aforementioned, these financial statements as of March 31, 2022 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 March 31, 2021 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 summertime 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.
 
 
 
8
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
4.
Acquisitions and disposals
 
Significant acquisitions and disposals for the nine-month period ended March 31, 2022 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 Catalinas Tower building
 
On November 2, 2021, three medium-height floors of the tower “261 Della Paolera” 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 spaces located in the building were sold. The transaction price was approximately USD 32 million.
 
On December 15, 2021, one medium-heigh floor and 12 parking spaces were sold. The transaction price was approximately USD 9.2 million.
 
On March 9, 2022 three floors of the tower for a total leasable area of approximately 3,550 sqm, 30 parking lots located in the building and other complementary units were sold. The transaction price was approximately USD 31.6 million.
 
On March 29, 2022 two floors for a total leasable area of approximately 2,370 sqm and 24 parking lots located in the building were sold. The transaction price was approximately USD 20.4 million.
 
B.
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. Such sale was approved by the Condor Shareholders' Meeting held on November 12, 2021 and was completed on the 19th of the same month for an amount of USD 305 million. Within this framework, Condor announced a Liquidation and Dissolution Plan, with the intention of distributing certain net income from the sale of the hotel portfolio to the shareholders in one or more installments, which was approved by the Condor Shareholders' Meeting held on December 1, 2021.
 
On December 10, 2021, in accordance with the aforementioned Plan, Condor's Board of Directors approved the distribution of a special dividend of USD 7.94 per share, which payment was made on December 30, 2021, corresponding to IRSA an approximate amount of USD 25.3 million for its direct and indirect holding of 3,191,213 common shares that, as of the date of issuance of the financial statements, have already been fully collected. As of March 31, 2022, Condor shares were delisted from the NYSE, pending the final liquidation of the company.
 
C.
Merger by absorption of IRSA and IRSA CP
 
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
 
 
9
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
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.
 
In accordance with the commitments assumed in the Prior Merger Commitment, having obtained the administrative consent of the United States Securities and Exchange Commission, an entity to which they are subject because both companies list their shares in markets that operate in said jurisdiction, The shareholders' meetings of both companies were called.
 
On December 22, 2021, the Shareholders' Meetings of IRSA and IRSA CP were held, approving the merger by absorption, whose effective date was established on July 1, 2021. As of that date, the transfer to the absorbent of the totality of the equity of the absorbed company, thereby incorporating all its rights and obligations, assets and liabilities into the equity of the absorbing company.
 
Likewise, and within the framework of the reorganization process, the Board of Directors has approved the exchange ratio, which has been established at 1.40 IRSA shares for each IRSA CP share, which is equivalent to 0.56 IRSA GDS for each ADS of IRSA CP. Within this framework, it was decided to increase the share capital by issuing 152,158,215 new shares in IRSA.
 
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).
 
After March 31, 2022, and prior to the date of presentation of these financial statements, the merger is registered and approved in the corresponding control agencies.
 
D.
Beruti Building Adjudication
 
The Company has purchased, by public auction from the Government of the Autonomous City of Buenos Aires (hereinafter "GCABA"), a property located in the corner of Av. Coronel Díaz and Beruti, in front of the Alto Palermo shopping center, owned by the Company, in one of the main commercial corridors of the city, in the Palermo neighborhood.
 
The property, built on an area of approximately 2,386.63 sqm, consists of a ground floor, six upper levels and a basement, and has a total covered area of 8,136.85 sqm, with future expansion potential. The purchase price was ARS 2,158 million, which was fully paid.
 
As of today, the signing of the transfer deed of ownership is pending. Simultaneously with the deed, the Company is required to sign a bailment agreement with the GCABA, with the latter holding the property free of charge for a period of 30 months, in accordance with the conditions agreed upon in the auction.
 
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 29 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 described in Note 6 to the Annual Financial Statements.
 
 
10
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
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 March 31, 2022 and 2021:
 
 
 
Nine Months ended March 31, 2022
 
 
 
Total
 
 
Joint ventures (1)
 
 
Expensesand collectivepromotion funds (2)
 
 
Elimination of inter-segment transactions and non-reportable assets / liabilities (3)
 
 
Total as per statement of income / statement of financial position
 
Revenues
  15,634 
  (159)
  4,001 
  (15)
  19,461 
Costs
  (3,406)
  60 
  (4,112)
  (1)
  (7,459)
Gross profit / (loss)
  12,228 
  (99)
  (111)
  (16)
  12,002 
Net gain from fair value adjustment of investment properties
  (12,204)
  1,109 
  - 
  - 
  (11,095)
General and administrative expenses
  (3,159)
  10 
  - 
  34 
  (3,115)
Selling expenses
  (1,348)
  (1)
  - 
  - 
  (1,349)
Other operating results, net
  108 
  - 
  40 
  (18)
  130 
(Loss) / profit from operations
  (4,375)
  1,019 
  (71)
  - 
  (3,427)
Share of profit of associates and joint ventures
  (71)
  (682)
  - 
  - 
  (753)
Segment (loss) / profit
  (4,446)
  337 
  (71)
  - 
  (4,180)
Reportable assets
  261,642 
  (1,652)
  - 
  31,573 
  291,563 
Reportable liabilities
  - 
  - 
  - 
  (165,280)
  (165,280)
Net reportable assets
  261,642 
  (1,652)
  - 
  (133,707)
  126,283 
 
 
 
Nine Months ended March 31, 2021
 
 
 
Total
 
 
Joint ventures (1)
 
 
Expensesand collectivepromotion funds (2)
 
 
Elimination of inter-segment transactions and non-reportable assets / liabilities (3)
 
 
Total as per statement of income / statement of financial position
 
Revenues
  11,183 
  (51)
  3,133 
  (31)
  14,234 
Costs
  (3,597)
  79 
  (3,397)
  - 
  (6,915)
Gross profit / (loss)
  7,586 
  28 
  (264)
  (31)
  7,319 
Net gain from fair value adjustment of investment properties
  (10,484)
  (151)
  - 
  - 
  (10,635)
General and administrative expenses
  (3,442)
  10 
  - 
  48 
  (3,384)
Selling expenses
  (1,642)
  18 
  - 
  - 
  (1,624)
Other operating results, net
  (183)
  (3)
  122 
  (17)
  (81)
Profit from operations
  (8,165)
  (98)
  (142)
  - 
  (8,405)
Share of profit of associates and joint ventures
  (3,223)
  55 
  - 
  - 
  (3,168)
Segment profit
  (11,388)
  (43)
  (142)
  - 
  (11,573)
Reportable assets
  294,625 
  (1,503)
  - 
  35,524 
  328,646 
Reportable liabilities
  - 
  - 
  - 
  (188,386)
  (188,386)
Net reportable assets
  294,625 
  (1,503)
  - 
  (152,862)
  140,260 
 
(1) Represents the equity value of joint ventures that were proportionately consolidated for segment information.
(2) Includes amounts pertaining to building administration expenses and collective promotion funds (“FPC”, as per its Spanish acronym) as well as total recovered costs, whether by way of expenses or other concepts included under financial results (for example default interest and other concepts)
(3) 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 12 and ARS 18 as of March 31, 2022 and 2021 respectively.
 

 
11
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
Below is a summarized analysis of the segments from the Group for the periods ended March 31, 2022 and 2021:
 
 
 
Nine Months ended March 31, 2022
 
 
 
Shopping Malls
 
 
Offices
 
 
Sales and developments
 
 
Hotels
 
 
International
 
 
Corporate
 
 
Others
 
 
Total
 
Revenues
  10,533 
  2,183 
  126 
  2,689 
  10 
  - 
  93 
  15,634 
Costs
  (996)
  (236)
  (287)
  (1,505)
  (14)
  - 
  (368)
  (3,406)
Gross profit / (loss)
  9,537 
  1,947 
  (161)
  1,184 
  (4)
  - 
  (275)
  12,228 
Net (loss) / gain from fair value adjustment of investment properties (i)
  (9,267)
  (22,163)
  18,803 
  - 
  4 
  - 
  419 
  (12,204)
General and administrative expenses
  (1,305)
  (377)
  (253)
  (465)
  (54)
  (591)
  (114)
  (3,159)
Selling expenses
  (478)
  (89)
  (421)
  (213)
  - 
  (119)
  (28)
  (1,348)
Other operating results, net
  (119)
  (32)
  (11)
  (10)
  209 
  - 
  71 
  108 
(Loss) / profit from operations
  (1,632)
  (20,714)
  17,957 
  496 
  155 
  (710)
  73 
  (4,375)
Share of profit of associates and joint ventures
  - 
  - 
  - 
  - 
  384 
  - 
  (455)
  (71)
Segment (loss) / profit
  (1,632)
  (20,714)
  17,957 
  496 
  539 
  (710)
  (382)
  (4,446)
 
    
    
    
    
    
    
    
    
Investment properties and trading properties
  67,969 
  80,481 
  91,345 
  - 
  123 
  - 
  2,786 
  242,704 
Investment in associates and joint ventures
  - 
  - 
  - 
  - 
  139 
  - 
  9,280 
  9,419 
Other operating assets
  435 
  3,076 
  2,310 
  3,499 
  - 
  10 
  189 
  9,519 
Operating assets
  68,404 
  83,557 
  93,655 
  3,499 
  262 
  10 
  12,255 
  261,642 
 
 
 
 
Nine Months ended March 31, 2021
 
 
 
Shopping Malls
 
 
Offices
 
 
Sales and developments
 
 
Hotels
 
 
International
 
 
Corporate
 
 
Others
 
 
Total
 
Revenues
  5,813 
  2,935 
  799 
  1,042 
  521 
  - 
  73 
  11,183 
Costs
  (772)
  (231)
  (782)
  (1,131)
  (441)
  - 
  (240)
  (3,597)
Gross profit / (loss)
  5,041 
  2,704 
  17 
  (89)
  80 
  - 
  (167)
  7,586 
Net (loss) / gain from fair value adjustment of investment properties
  (15,041)
  3,071 
  565 
  - 
  6 
  - 
  915 
  (10,484)
General and administrative expenses
  (1,670)
  (444)
  (360)
  (461)
  (64)
  (372)
  (71)
  (3,442)
Selling expenses
  (292)
  (183)
  (963)
  (160)
  (36)
  - 
  (8)
  (1,642)
Other operating results, net
  (143)
  (3)
  (12)
  (9)
  (11)
  - 
  (5)
  (183)
(Loss) / profit from operations
  (12,105)
  5,145 
  (753)
  (719)
  (25)
  (372)
  664 
  (8,165)
Share of loss of associates and joint ventures
  - 
  - 
  (25)
  - 
  (985)
  - 
  (2,213)
  (3,223)
Segment (loss) / profit
  (12,105)
  5,145 
  (778)
  (719)
  (1,010)
  (372)
  (1,549)
  (11,388)
 
    
    
    
    
    
    
    
    
Investment properties and trading properties
  88,775 
  108,551 
  69,786 
  - 
  171 
  - 
  3,198 
  270,481 
Investment in associates and joint ventures
  - 
  - 
  - 
  - 
  3,122 
  - 
  11,880 
  15,002 
Other operating assets
  526 
  1,960 
  2,793 
  3,662 
  - 
  12 
  189 
  9,142 
Operating assets
  89,301 
  110,511 
  72,579 
  3,662 
  3,293 
  12 
  15,267 
  294,625 
 
 
7.
Investments in associates and joint ventures
 
Changes in the Group’s investments in associates and joint ventures for the nine-month period ended March 31, 2022 and for the year ended June 30, 2021 were as follows:
 
 
 
March 31, 2022
 
 
June 30, 2021
 
Beginning of the period / year
  16,996 
  156,171 
Increase of equity interest and capital contributions
  875 
  59 
Decrease of interest in associate (iv)
  - 
  (61,299)
Deconsolidation (i)
  - 
  (67,721)
Share of profit
  (686)
  (4,243)
Impairment (iii)
  (67)
  (875)
Currency translation adjustment
  (389)
  (5,003)
Dividends (v)
  (3,057)
  - 
Other comprehensive income
  - 
  (75)
Others
  (359)
  (18)
End of the period / year (ii)
  13,313 
  16,996 
 
(i)
Corresponds to the deconsolidation of IDBD. See Note 4.G to the consolidated Financial Statements as of June 30, 2021.
(ii)
As of March 31, 2022 and June 30, 2021 includes ARS (12) and ARS (10), 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.
(v)
Corresponds to dividends distributed by Condor. See Note 4.G.
 
 
12
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
 
 
% ownership interest
 
 
Value of Group's interest in equity
 
 
Group's interest in comprehensive income / (loss)
 
Name of the entity
 
March 31, 2022
 
 
June 30, 2021
 
 
March 31, 2022
 
 
June 30, 2021
 
 
March 31, 2022
 
 
March 31, 2021
 
Associates
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
New Lipstick
  49.96%
  49.96%
  127 
  305 
  113 
  (666)
BHSA
  29.91%
  29.91%
  7,416 
  7,494 
  (79)
  (642)
Condor
  21.70%
  18.89%
  - 
  2,265 
  362 
  (321)
Quality
  50.00%
  50.00%
  3,443 
  4,092 
  (683)
  129 
La Rural S.A.
  50.00%
  50.00%
  267 
  236 
  30 
  (61)
TGLT
  27.82%
  27.82%
  962 
  1,310 
  (347)
  (1,478)
Other joint ventures
  N/A 
  N/A 
  1,098 
  1,294 
  (471)
  (4,025)
Total associates and joint ventures
    
    
  13,313 
  16,996 
  (1,075)
  (7,064)
 
Below is additional information about the Group’s investments in associates and joint ventures:
 


   
 
Latest financial statements 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 
  - 
  (*) (1) 
  (*) (41) 
BHSA
Argentina
Financial
  448,689,072 
  (**) 1,500 
  (**) (262) 
  (**) 23,890 
Quality
Argentina
Real estate
  225,146,912 
  406 
  (1,366)
  6,756 
La Rural S.A.
Argentina
Organization of events
  714,998 
  1 
  76 
  414 
TGLT
Argentina
Real estate
  257,320,997 
  925 
  (1,020)
  5,020 
 
 
(*) 
Amounts in millions of US Dollars under USGAAP.
(**) 
Information as of March 31, 2022 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 nine-month period ended March 31, 2022 and for the year ended June 30, 2021 were as follows:
 
 
 
Nine Months ended March 31, 2022
 
 
Year ended June 30, 2021
 
 
 
Shopping Malls
 
 
Rental properties
 
 
Undeveloped parcels of land
 
 
Properties under development
 
 
Total
 
 
Total
 
Fair value at the beginning of the period / year
  71,040 
  104,410 
  75,744 
  4,844 
  256,038 
  477,787 
Additions
  543 
  550 
  543 
  760 
  2,396 
  1,448 
Capitalized leasing costs
  13 
  15 
  - 
  - 
  28 
  31 
Amortization of capitalized leasing costs (i)
  (7)
  (9)
  - 
  - 
  (16)
  (18)
Transfers
  - 
  (1,308)
  - 
  - 
  (1,308)
  (741)
Deconsolidation
  - 
  - 
  - 
  - 
  - 
  (164,325)
Disposals
  - 
  (11,116)
  (341)
  - 
  (11,457)
  (29,953)
Currency translation adjustment
  - 
  (24)
  - 
  (1)
  (25)
  (17,290)
Net (loss) / gain from fair value adjustment
  (8,934)
  (14,661)
  12,708 
  (208)
  (11,095)
  (10,901)
Fair value at the end of the period / year
  62,655 
  77,857 
  88,654 
  5,395 
  234,561 
  256,038 
 
(i)
Amortization charges of capitalized leasing costs were included in “Costs” in the Statements of Income (Note 21).
 
(ii)
For the nine-month period ended March 31, 2022, the net loss from fair value adjustment of investment properties was ARS 11,095. The net impact of the values in pesos of our properties was mainly a consequence of the change in macroeconomic conditions:
 
 
13
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
a)
gain of ARS 2,252 as a consequence of the variation in the projected income growth rate increase 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 5,932 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 13 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 1,793.
d)
Additionally, due to the impact of the inflation adjustment, ARS 20,222 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 17,67% during the nine-month period ended as of March 31, 2022, due to the variation of the implicit exchange rate. Likewise, there is an impact for the sales of the which include the sale of the Republica building in April 2022. See Subsequent events note.
 
The following amounts have been recognized in the Statements of Income:
 
 
  03.31.2022 
  03.31.2021 
Rental and services income
  16,657 
  11,896 
Direct operating expenses
  (5,674)
  (4,571)
Development expenses
  (189)
  (112)
Net realized gain from fair value adjustment of investment properties (i) (ii)
  4,680 
  15,128 
Net unrealized gain from fair value adjustment of investment properties
  (15,775)
  (25,763)
 
(i)
As of March 31, 2022 includes ARS 15 for the sale of Casona Hudson, ARS 71 for the sale of the Merlo Land, ARS 64 for the sale of the Mariano Acosta Land, ARS 76 for the sale of parking spaces of Libertador 498 and ARS 4,454 for the sale of floors of Catalinas Building. As of March 31, 2021 includes ARS 7,598 for the sale of Torre Boston, ARS 7,504 for the sale of Bouchard 710 and ARS 26 for the sale of 10 parking spaces in Bouchard 557.
 
(ii)
As of March 31, 2022 corresponds ARS 2,548 to the realized result from fair value adjustment for the period (ARS 87 for the sale of Casona Hudson, ARS 19 for the sale of the Merlo Land, ARS 21 for the sale of the Mariano Acosta Land, ARS 91 for the sale of parking spaces of Libertador 498 and ARS 2,330 for the sale of floors of Catalinas Building) and ARS 7,228 for realized result from fair value adjustment made in previous years (ARS 102 for the sale of Casona Hudson, ARS 90 for the sale of the Merlo Land, ARS 85 for the sale of the Mariano Acosta Land, ARS 167 for the sale of parking spaces of Libertador 498 and ARS 6,784 for the sale of floors of Catalinas Building).
 
 As of March 31, 2021, (ARS 2,170) corresponds to net realized fair value adjustment on investment properties for the period ((ARS 1,496) for the sale of Torre Boston and (ARS 658) for the sale of Bouchard 710) and (ARS 16) for the sale of 10 parking spaces in Bouchard 557) and ARS 17,298 corresponds to the realized fair value adjustment made in previous years (ARS 9,096 for the sale of Torre Boston, ARS 8,160 for the sale of Bouchard 710 and ARS 42 for the sale of 10 parking spaces in Bouchard 557).
 
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 March 31, 2022, 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)
 
On December 21, it was published the law from Buenos Aires City congress approving the Regulations for the development of the property of approximately 70 hectares, owned by the Company since 1997, previously known as "Solares de Santa María", located in front of the Río de la Plata in the South Coast of the Autonomous City of Buenos Aires, southeast of Puerto Madero. The published law grants a New Standard, designated: "U73 - Public Park and Costa Urbana Urbanization", which enables the combination of diverse uses such as homes, offices, retail, services, public spaces, education, and entertainment.
 
The Company will have a construction capacity of approximately 895,000 sqm, which will drive growth for the coming years through the development of mixed-use projects
 
IRSA will allocate 50.8 hectares for public use, which represents approximately 71% of the total area of the property to the development of public green spaces and will contribute with three additional lots of the property, two for the Sustainable Urban Development Fund (FODUS) and one for the Innovation Trust, Science and Technology of the Government of the Autonomous City of Buenos Aires, to which the sum of USD 2 million in cash and the amount of 3,000,000 sovereign bonds (AL35) will also be contributed
 
 
14
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
Likewise, the Company will be in charge of the infrastructure and road works on the property and will carry out the public space works contributing up to USD 40 million together with the maintenance of the public spaces assigned for 10 years or until the sum of USD 10 million is completed.
 
“Costa Urbana” will change the landscape of Buenos Aires City, giving life to an undeveloped area and will be in an exceptional property due to its size, location and connectivity, providing the City the possibility of expanding and recovering access to the Río de la Plata coast with areas for walks, recreation, green spaces, public parks and mixed uses.
 
On October 29, 2021, a notification was received in relation to a collective protective petition requesting the convening of a public hearing prescribed by art. 63 of the Constitution of the City of Buenos Aires and the suspension of the treatment of Bill 1831 - J 2021 (first Instance trail in contentious Administrative and Tax matters No. 10, Sec. 19 - Cause "Civil Association Observatory of the Right to the city and others against GCBA and Others on protection - others" - EXP J-01-00166469-3/2021-0). The Company proceeded to answer the notification on November 12, 2021, requesting its rejection and on March 10, 2022, the court issued a ruling partially upholding the protective petition. On March 15, 2022, IRSA appealed said ruling, as did the Government of the Autonomous City of Buenos Aires, co-defendant in the case. On March 17, 2022, the court granted the appeals in relation and with suspensive effect, of the contested sentence (in accordance with the provisions of Law No. 2145). The matter is to be resolved by the in Administrative, Tax and Consumer Relations Litigation- Room IV.
.
9.
Property, plant and equipment
 
Changes in the Group’s property, plant and equipment for the nine-month period ended March 31, 2022 and for the year ended June 30, 2021 were as follows:
 
 
 
Nine Months ended March 31, 2022
 
 
Year ended June 30, 2021
 
 
 
Buildings and facilities
 
 
Machinery and equipment
 
 
Others
 
 
Total
 
 
Total
 
Costs
  9,892 
  3,513 
  808 
  14,213 
  293,716 
Accumulated depreciation
  (4,556)
  (3,275)
  (586)
  (8,417)
  (214,494)
Net book amount at the beginning of the period / year
  5,336 
  238 
  222 
  5,796 
  79,222 
Additions
  100 
  37 
  2 
  139 
  2,314 
Disposals
  - 
  - 
  - 
  - 
  (126)
Deconsolidation
  - 
  - 
  - 
  - 
  (67,086)
Reclassification to assets held for sale
  - 
  - 
  - 
  - 
  (39)
Currency translation adjustment
  - 
  - 
  (2)
  (2)
  (5,364)
Transfers
  1,308 
  - 
  - 
  1,308 
  1,383 
Depreciation charges (i)
  (324)
  (72)
  (25)
  (421)
  (4,508)
Balances at the end of the period / year
  6,420 
  203 
  197 
  6,820 
  5,796 
Costs
  11,300 
  3,550 
  808 
  15,658 
  14,213 
Accumulated depreciation
  (4,880)
  (3,347)
  (611)
  (8,838)
  (8,417)
Net book amount at the end of the period / year
  6,420 
  203 
  197 
  6,820 
  5,796 
 
(i)
As of March 31, 2022, depreciation charges of property, plant and equipment were recognized as follows: ARS 307 in "Costs", ARS 111 in "General and administrative expenses" and ARS 3 in "Selling expenses", respectively in the Statement of Income (Note 21).
 
 
15
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
10.
Trading properties
 
Changes in the Group’s trading properties for the nine-month period ended March 31, 2022 and for the year ended June 30, 2021 were as follows:
 
 
 
Nine Months ended March 31, 2022
 
 
Year ended June 30, 2021
 
 
 
Completed properties
 
 
Properties under development
 
 
Undeveloped sites
 
 
Total
 
 
Total
 
Beginning of the period / year
  169 
  1,121 
  1,167 
  2,457 
  15,061 
Additions
  - 
  358 
  2 
  360 
  1,125 
Deconsolidation
  - 
  - 
  - 
  - 
  (10,751)
Currency translation adjustment
  - 
  (129)
  - 
  (129)
  (971)
Disposals
  - 
  - 
  - 
  - 
  (2,007)
End of the period / year
  169 
  1,350 
  1,169 
  2,688 
  2,457 
Non-current
    
    
    
  2,389 
  2,298 
Current
    
    
    
  299 
  159 
Total
    
    
    
  2,688 
  2,457 
 
11.
Intangible assets
 
Changes in the Group’s intangible assets for the nine-month period ended March 31, 2022 and for the year ended June 30, 2021 were as follows:
 
 
 
Nine Months ended March 31, 2022
 
 
Year ended June 30, 2021
 
 
 
Goodwill
 
 
Information systems and software
 
 
Contracts and others
 
 
Total
 
 
Total
 
Costs
  189 
  1,102 
  3,311 
  4,602 
  147,742 
Accumulated amortization
  - 
  (816)
  (431)
  (1,247)
  (89,402)
Net book amount at the beginning of the period / year
  189 
  286 
  2,880 
  3,355 
  58,340 
Additions
  - 
  9 
  33 
  42 
  3,041 
Disposals
  - 
  - 
  (199)
  (199)
  (155)
Impairment
  - 
  - 
  - 
  - 
  (56)
Deconsolidation
  - 
  - 
  - 
  - 
  (51,089)
Currency translation adjustment
  - 
  - 
  - 
  - 
  (3,462)
Amortization charges (i)
  - 
  (95)
  - 
  (95)
  (3,264)
Balances at the end of the period / year
  189 
  200 
  2,714 
  3,103 
  3,355 
Costs
  189 
  1,111 
  3,145 
  4,445 
  4,602 
Accumulated amortization
  - 
  (911)
  (431)
  (1,342)
  (1,247)
Net book amount at the end of the period / year
  189 
  200 
  2,714 
  3,103 
  3,355 
 
(i)
As of March 31, 2022, amortization charges were recognized in the amount of ARS 20 in "Costs" and ARS 75 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 March 31, 2022 and June 30, 2021 are the following:
 
 
 
March 31, 2022
 
 
June 30, 2021
 
Real Estate
  24 
  15 
Machinery and equipment
  2 
  6 
Others
  1,058 
  1,113 
Total Right-of-use assets
  1,084 
  1,134 
Non-current
  1,084 
  1,134 
Total
  1,084 
  1,134 
 
 
 
16
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
The depreciation charge of the right-of use-assets is detailed below:
 
 
 
March 31, 2022
 
 
March 31, 2021
 
Real Estate
  36 
  1,807 
Telecommunications
  - 
  414 
Others
  11 
  430 
Total depreciation of right-of-use assets (i)
  47 
  2,651 
 
(i)
As of March 31, 2022, amortization charges were recognized in "Costs", in the Statement of Income (Note 21). As of March 31, 2021 includes ARS 2,553 in “discontinued operations”.
 
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 March 31, 2022 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
 
 
 
 
 
 
 
 
 
 
March 31, 2022
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets as per Statement of Financial Position
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Trade and other receivables (excluding the allowance for doubtful accounts and other receivables)
  10,454 
  - 
  - 
  - 
  10,454 
  6,356 
  16,810 
Investments in financial assets:
    
    
    
    
    
    
    
  - Public companies’ securities
  - 
  646 
  - 
  - 
  646 
  - 
  646 
  - Bonds
  - 
  5,618 
  - 
  - 
  5,618 
  - 
  5,618 
  - Investments in financial assets with quotation
  10 
  1,166 
  - 
  - 
  1,176 
  - 
  1,176 
Derivative financial instruments:
    
    
    
    
    
    
    
  - Bond futures
  - 
  4 
  - 
  - 
  4 
  - 
  4 
Cash and cash equivalents:
    
    
    
    
    
    
    
  - Cash at bank and on hand
  2,941 
  - 
  - 
  - 
  2,941 
  - 
  2,941 
  - Short-term investments
  252 
  2,494 
  - 
  - 
  2,746 
  - 
  2,746 
Total assets
  13,657 
  9,928 
  - 
  - 
  23,585 
  6,356 
  29,941 
 
 
 
 
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
 
 
 
 
 
 
 
 
 
 
March 31, 2022
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities as per Statement of Financial Position
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Trade and other payables
  4,792 
  - 
  - 
  - 
  4,792 
  4,823 
  9,615 
Borrowings (excluding finance leases)
  62,972 
  - 
  - 
  - 
  62,972 
  - 
  62,972 
Derivative financial instruments:
    
    
    
    
    
    
    
  - Swaps
  - 
  - 
  22 
  - 
  22 
  - 
  22 
Total liabilities
  67,764 
  - 
  22 
  - 
  67,786 
  4,823 
  72,609 
 
 
 
 
17
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
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)
  10,109 
  - 
  - 
  - 
  10,109 
  6,909 
  17,018 
Investments in financial assets:
    
    
    
    
    
    
    
  - Public companies’ securities
  - 
  1,364 
  - 
  - 
  1,364 
  - 
  1,364 
  - Bonds
  - 
  3,791 
  - 
  - 
  3,791 
  - 
  3,791 
  - Investments in financial assets with quotation
  14 
  893 
  - 
  67 
  974 
  - 
  974 
Cash and cash equivalents:
    
    
    
    
    
    
    
  - Cash at bank and on hand
  1,576 
  - 
  - 
  - 
  1,576 
  - 
  1,576 
  - Short term investments
  - 
  1,123 
  - 
  - 
  1,123 
  - 
  1,123 
Total assets
  11,699 
  7,171 
  - 
  67 
  18,937 
  6,909 
  25,846 
 
 
 
 
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
  4,032 
  - 
  - 
  - 
  4,032 
  5,041 
  9,073 
Borrowings (excluding finance leases)
  86,859 
  - 
  - 
  - 
  86,859 
  - 
  86,859 
Derivative financial instruments:
    
    
    
    
    
    
    
  - Swaps
  - 
  - 
  80 
  - 
  80 
  - 
  80 
Total liabilities
  90,891 
  - 
  80 
  - 
  90,971 
  5,041 
  96,012 
 
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 March 31, 2022, 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.
 
 
18
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
 
Description
Pricing model / method
Parameters
 
Fair value hierarchy
 
Range
 
 
 
 
 
 
 
 
 
Derivative financial instruments – Swaps
Theoretical price
Underlying asset price and volatility
Level 2 and 3
 
  - 
 
 
 
19
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
The following table presents the changes in Level 3 instruments as of March 31, 2022 and June 30, 2021:
 
 
 
Investments in financial assets - Others
 
 
Total as of March 31, 2022
 
 
Total as of June 30, 2021
 
Balances at beginning of the period / year
  67 
  67 
  6,850 
Currency translation adjustment
  (7)
  (7)
  (6)
Deconsolidation
  - 
  - 
  (6,790)
Write off
  (81)
  (81)
  - 
Gain for the period / year (i)
  21 
  21 
  13 
Balances at the end of the period / year
  - 
  - 
  67 
 
(i)
Included within “Financial results, net” in the Statements of Income.
 
 
14.
Trade and other receivables
 
Group’s trade and other receivables as of March 31, 2022 and June 30, 2021 are as follows:
 
 
 
March 31, 2022
 
 
June 30, 2021
 
Sale, leases and services receivables
  6,955 
  6,421 
Less: Allowance for doubtful accounts
  (875)
  (1,190)
Total trade receivables
  6,080 
  5,231 
Prepaid expenses
  572 
  1,125 
Borrowings, deposits and others
  4,050 
  5,129 
Advances to suppliers (i)
  3,109 
  1,328 
Tax receivables
  1,033 
  1,630 
Others
  1,091 
  1,385 
Total other receivables
  9,855 
  10,597 
Total trade and other receivables
  15,935 
  15,828 
Non-current
  4,097 
  3,980 
Current
  11,838 
  11,848 
Total
  15,935 
  15,828 
 
(i)
 Includes advance made for the Beruti aquisition. See Note 4.D.
 
Movements on the Group’s allowance for doubtful accounts were as follows:
 
 
 
March 31, 2022
 
 
June 30, 2021
 
Beginning of the period / year
  1,190 
  7,843 
Additions (i)
  206 
  1,055 
Recovery (i)
  (199)
  (320)
Currency translation adjustment
  - 
  (385)
Deconsolidation
  - 
  (6,491)
Receivables written off during the period/year as uncollectable
  - 
  (39)
Inflation adjustment
  (322)
  (473)
End of the period / year
  875 
  1,190 
 
(i)
Additions and recovery of the allowance for doubtful accounts have been included in “Selling expenses” in the Statement of Income (Note 21).
 
 
20
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
 
15.
Cash flow and cash equivalent information
 
Following is a detailed description of cash flows generated by the Group’s operations for the nine-month period ended March 31, 2022 and 2020:
 
 
Note
 
Nine Months ended March 31, 2022
 
 
Nine Months ended March 31, 2021
 
Profit / (loss) for the period
 
  11,502 
  (22,821)
Profit for the period from discontinued operations
 
  - 
  12,474 
Adjustments for:
 
    
    
Income tax
19
  (6,020)
  1,097 
Amortization and depreciation
21
  579 
  640 
Net gain from fair value adjustment of investment properties
 
  11,095 
  10,635 
Net gain from disposal of intangible assets
 
  (93)
  - 
Gain from disposal of subsidiary
 
  - 
  (51)
Financial results, net
 
  (11,629)
  (1,908)
Provisions and allowances
 
  828 
  1,180 
Share of (profit) / loss of associates and joint ventures
7
  753 
  3,168 
Changes in operating assets and liabilities:
 
    
    
(Increase) / decrease in inventories
 
  (7)
  26 
(Increase) / decrease in trading properties
 
  (95)
  726 
Increase in trade and other receivables
 
  (85)
  (2,021)
Increase / (decrease) in trade and other payables
 
  665 
  (3,191)
(Decrease) / increase in salaries and social security liabilities
 
  (133)
  205 
Decrease in provisions
 
  (70)
  (108)
Net cash generated by continuing operating activities before income tax paid
 
  7,290 
  51 
Net cash generated by discontinued operating activities before income tax paid
 
  - 
  4,683 
Net cash generated by operating activities before income tax paid
 
  7,290 
  4,734 
 
The following table presents a detail of significant non-cash transactions occurred in the nine-month period ended March 31, 2022 and 2020:
 
 
 
Nine Months ended March 31, 2022
 
 
Nine Months ended March 31, 2021
 
Decrease in investment properties through an increase in property, plant and equipment
  1,308 
  - 
Decrease in lease liabilities through a decrease in trade and other receivables
  3 
  - 
Decrease of property, plant and equipment through an increase of receivables and tax debts
  - 
  84 
Increase of trading properties through an increase in borrowings
  - 
  147 
Distribution of dividends in shares
  - 
  1,017 
Increase in intangible assets through a decrease in investment in associates
  - 
  1,053 
Increase in intangible assets through an increase in trade and other payables
  4 
  - 
Increase in intangible assets through an increase salaries and social security liabilities
  17 
  - 
Currency translation adjustment
  684 
  15,449 
Increase in investment properties through an increase in trade and other payables
  157 
  - 
Increase in investments in associates through a decrease in investments in financial assets
  737 
  - 
 
16.
Trade and other payables
 
Group’s trade and other payables as of March 31, 2022 and June 30, 2021 were as follows:
 
 
 
March 31, 2022
 
 
June 30, 2021
 
Trade payables
  2,406 
  1,438 
Advances from sales, leases and services
  4,517 
  4,212 
Accrued invoices
  708 
  1,201 
Total trade payables
  7,631 
  6,851 
Taxes payable
  400 
  955 
Other payables
  1,584 
  1,267 
Total other payables
  1,984 
  2,222 
Total trade and other payables
  9,615 
  9,073 
Non-current
  2,303 
  1,939 
Current
  7,312 
  7,134 
Total
  9,615 
  9,073 
 
 
 
21
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
 
17.
Borrowings
 
The breakdown of the Group’s borrowings as of March 31, 2022 and June 30, 2021 was as follows:
 
 
 
Total as of March 31, 2022
 
 
Total as of June 30, 2021
 
 
Fair value as of March 31, 2022
 
 
Fair value as of June 30, 2021
 
NCN
  58,300 
  72,531 
  56,453 
  68,189 
Bank loans
  1,360 
  4,356 
  1,360 
  4,374 
Bank overdrafts
  1,843 
  7,387 
  1,843 
  7,381 
Other borrowings
  879 
  1,933 
  878 
  1,933 
AABE Debt
  342 
  361 
  342 
  361 
Loans with non-controlling interests
  248 
  291 
  248 
  291 
Total borrowings
  62,972 
  86,859 
  61,124 
  82,529 
Non-current
  50,935 
  65,318 
    
    
Current
  12,037 
  21,541 
    
    
Total
  62,972 
  86,859 
    
    
 
Issuance of IRSA Non-convertible Notes

On August 26, 2021, the Company issued USD 58.1 million 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.
 
IRSA´s Series VII Non-convertible Notes Redemption
 
The Company resolved to early redeem the Series VII Notes maturing last January 21, 2022.
  
The redemption took place on November 25, 2021, in accordance with the terms and conditions detailed in the Prospectus Supplement for Series VII Notes.
 
The redemption price was 100% of the face value of the Series VII Notes, plus accrued and unpaid interest, as of the date set for redemption.
 
 
22
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
 
18.
Provisions
 
The table below shows the movements in the Group's provisions categorized by type:
 
 
 
Nine Months ended March 31, 2022
 
 
Year ended June 30, 2021
 
 
 
Income tax (iii)
 
 
Legal claims
 
 
Investments in associates and joint ventures (ii)
 
 
Total
 
 
Total
 
Beginning of period / year
  - 
  354 
  10 
  364 
  11,555 
Additions (i)
  235 
  200 
  - 
  435 
  13 
Share of loss of associates
  - 
  - 
  2 
  2 
  - 
Deconsolidation
  - 
  - 
  - 
  - 
  (9,919)
Recovery (i)
  - 
  (23)
  - 
  (23)
  (74)
Used during the period / year
  - 
  (70)
  - 
  (70)
  (180)
Inflation adjustment
  (298)
  (112)
  - 
  (410)
  (159)
Transfers (Note 19)
  1,652 
  - 
  - 
  1,652 
  - 
Currency translation adjustment
  - 
  - 
  - 
  - 
  (872)
End of period / year
  1,589 
  349 
  12 
  1,950 
  364 
Non-current
    
    
    
  1,727 
  159 
Current
    
    
    
  223 
  205 
Total
    
    
    
  1,950 
  364 
 
(i) Additions and recovery of legal claims are included in "Other operating results, net". Tax contingency increases are included in “Financial results, net”
(ii) Corresponds to investments in Puerto Retiro, company that has negative equity.
(iii) See Note 19 – Submission of income tax presentation.
 
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:
 
 
 
March 31, 2022
 
 
March 31, 2021
 
Current income tax
  (5,934)
  29 
Deferred income tax
  11,954 
  (1,126)
Income tax from continuing operations
  6,020 
  (1,097)
 
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 nine-month period ended March 31, 2022 and 2021:
 
 
 
Nine Months ended March 31, 2022
 
 
Nine Months ended March 31, 2021
 
Loss/ (profit) from continuing operations at tax rate applicable in the respective countries
  (1,606)
  2,775 
Permanent differences:
    
    
Share of profit of associates and joint ventures
  (164)
  951 
Unrecognized tax loss carryforwards
  4,790 
  (1,942)
Inflation adjustment permanent difference
  9,326 
  4,149 
Tax rate differential
  - 
  3,352 
Non-taxable profit, non-deductible expenses and others
  (400)
  (1,302)
Tax inflation adjustment
  (5,926)
  (9,080)
Income tax from continuing operations
  6,020 
  (1,097)
 
Tax modifications
 
Due to the enactment of Law No. 27,639 published in the Official Gazette on June 16, 2021 and effective for fiscal years beginning on or after January 1, 2021, the current rates for corporate income tax are modified in accordance at the following scale:
 
 
23
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
 
 
 
Acumulated net income gain
 
 
Will pay
 
   
 
Over the surplus
 
 
More than
 
 
Up to
 
 
ARS
 
 
% More
 
 
ARS
 
  - 
  5,000,000 
  - 
  25%
  - 
  5,000,000 
  50,000,000 
  1,250,000 
  30%
  5,000,000 
  50,000,000 
 
Onwards
 
  14,750,000 
  35%
  50,000,000 
 
The amounts provided for in the scale will be adjusted annually, as of January 1, 2022, considering the annual variation of the Consumer Price Index (CPI), corresponding to the month of October of the year prior to the adjustment, compared to the same month. from the previous year. The amounts determined by application of the described mechanism will be applicable for the fiscal years that begin after each update.
 
The gross movement in the deferred income tax account is as follows:
 
 
 
March 31, 2022
 
 
June 30, 2021
 
Beginning of period / year
  (95,483)
  (91,137)
Currency translation adjustment
  - 
  2,350 
Deconsolidation
  - 
  21,938 
Assets held for sale
  - 
  53 
Revaluation surplus reserve
  - 
  (116)
Deferred income tax charge
  11,954 
  (28,571)
End of period / year
  (83,529)
  (95,483)
Deferred income tax assets
  722 
  623 
Deferred income tax liabilities
  (84,251)
  (96,106)
Deferred income tax liabilities, net
  (83,529)
  (95,483)
 
Submission of income tax presentation
 
Dated November 15, 2021 IRSA CP hereinafter "the taxpayer", which according to what is detailed in the Note. 4.1 has been absorbed by the Company, filed to the Argentine Tax Authority the income tax for the fiscal year ended June 30, 2021 applying the systemic and comprehensive inflation adjustment mechanism as detailed: restating tax amortizations according to articles 87 and 88; updating the computable cost of real estate acquired or built prior to July 1, 2018 and sold in this fiscal year under the terms of article 63; updating the loss of the fiscal period 2018, until the limit of the tax result of the exercise, following the methodology provided in article 25 and updating the costs of inventories as established in article 59, all articles mentioned belong to the income tax law (ordered text in 2019).
 
The non-application of the aforementioned mechanisms would have implied that the tax to be paid amounted to ARS 1,377, in this way the effective rate to be paid would have consumed a substantial portion of the income obtained by the taxpayer exceeding the reasonable limit of taxation, being configured in the opinion of the taxpayer and his tax and legal advisors an assumption of confiscation, an assumption that at the date of issuance of these financial statements has not been validated or challenged by the Argentine Tax Authority or by higher courts. Together with the aforementioned income tax presentation, a multinote form was presented in which the application of the mechanisms was reported, arguing that the effective tax rate would represent a percentage that would exceed the reasonable limits of taxation, setting up a situation of confiscation, in violation of art. 17 of the National Constitution (according to doctrine of the judgment "Candy S.A. c/AFIP and another a/ protection action", judgment of 07/03/2009, Judgments 332:1571, and subsequent precedents).
 
The aforementioned legal doctrine of the national supreme court is fully applicable to the particular case of IRSA, since the application of the regulations that do not allow the application of the integral and systematic inflation adjustment would prevent, as happened in the "Candy case", recognizing the totality of the inflationary effect in its tax balance causing the company to pay taxes on fictitious income.
 
Notwithstanding what is detailed in the previous paragraph, and given the existing background, the taxpayer timely determined and accounted for the income tax for the fiscal year ended June 30, 2021 without considering the aforementioned adjustment mechanisms, considering that , in the opinion of their tax advisors, the Argentine Tax Authority could challenge the presentation and said challenge could be validated by higher courts because there is no uniform jurisprudence to date that irrefutably validates the taxpayer's position. In this sense, after the merger process detailed in Note 4.1, the Company's Board
 
 
24
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
of Directors has reassessed, together with its tax advisors, the characteristics of the presentation, the existing background and the analysis that the taxpayer made in a timely manner, having concluded in the same sense and therefore it has decided to keep the liability accounted for, which at the closing date of these financial statements with the computation of accrued interest amounts to ARS 1,589, and is disclosed in the item Non-current provisions. As of the date of issuance of these financial statements, the Company has not received any challenge or formal rejection by the Tax Authority.
 
20.
Revenues
 
 
 
Nine Months ended March 31, 2022
 
 
Nine Months ended March 31, 2021
 
Rental and services income
  16,657 
  11,896 
Sales of trading properties and developments
  117 
  1,296 
Revenue from hotels operation and tourism services
  2,687 
  1,042 
Total Group’s revenues
  19,461 
  14,234 
 
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 March 31, 2022
 
 
Total as of March 31, 2021
 
Cost of sale of goods and services
  253 
  - 
  - 
  253 
  1,157 
Salaries, social security costs and other personnel expenses
  2,634 
  1,315 
  88 
  4,037 
  3,802 
Depreciation and amortization
  387 
  189 
  3 
  579 
  640 
Fees and payments for services
  233 
  388 
  168 
  789 
  750 
Maintenance, security, cleaning, repairs and others
  2,212 
  284 
  2 
  2,498 
  1,999 
Advertising and other selling expenses
  741 
  - 
  226 
  967 
  447 
Taxes, rates and contributions
  716 
  100 
  842 
  1,658 
  1,603 
Director´s fees
  - 
  657 
  - 
  657 
  1,097 
Leases and service charges
  183 
  42 
  6 
  231 
  201 
Allowance for doubtful accounts, net
  - 
  - 
  7 
  7 
  27 
Other expenses
  100 
  140 
  7 
  247 
  200 
Total as of March 31, 2022
  7,459 
  3,115 
  1,349 
  11,923 
  - 
Total as of March 31, 2021
  6,915 
  3,384 
  1,624 
  - 
  11,923 
 
22.
Cost of goods sold and services provided
 
 
 
Total as of March 31, 2022
 
 
Total as of March 31, 2021
 
Inventories at the beginning of the period
  2,558 
  24,893 
Purchases and expenses
  7,827 
  43,774 
Currency translation adjustment
  (129)
  (7,834)
Disposals
  - 
  (1,734)
Deconsolidation
  - 
  (6,586)
Inventories at the end of the period
  (2,797)
  (2,672)
Total costs (i)
  7,459 
  49,841 
 
(i)
As March 31, 2021 ARS 42,926 were included in discontinued operations.
 
The following table presents the composition of the Group’s inventories as of March 31, 2022 and June 30, 2021:
 
 
 
Total as of March 31, 2022
 
 
Total as of June 30, 2021
 
Real estate
  2,688 
  2,457 
Others
  109 
  101 
Total inventories at the end of the period (*)
  2,797 
  2,558 
 
(*) Inventories include trading properties and inventories.
 
 
25
IRSA Inversiones y Representaciones Sociedad Anónima
 

23.
Other operating results, net
 
 
 
Nine Months ended March 31, 2022
 
 
Nine Months ended March 31, 2021
 
Gain from disposal of subsidiary and associates
  - 
  51 
Donations
  (78)
  (171)
Lawsuits and other contingencies
  (182)
  (67)
Management fees
  18 
  11 
Operating interest expense
  81 
  101 
Others
  291 
  (6)
Total other operating results, net
  130 
  (81)
 
24.
Financial results, net
 
 
 
Nine Months ended March 31, 2022
 
 
Nine Months ended March 31, 2021
 
Finance income:
 
 
 
 
 
 
 - Interest income
  289 
  139 
 - Dividend income
  - 
  1 
Total finance income
  289 
  140 
Finance costs:
    
    
 - Interest expenses
  (5,782)
  (6,897)
 - Other finance costs
  (578)
  (903)
Subtotal finance costs
  (6,360)
  (7,800)
Capitalized finance costs
  - 
  618 
Total finance costs
  (6,360)
  (7,182)
Other financial results:
    
    
 - Fair value gain of financial assets and liabilities at fair value through profit or loss, net
  2,385 
  6,541 
 - Exchange differences, net
  10,708 
  3,584 
 - Gain / (loss) from repurchase of negotiable obligations
  1,212 
  (314)
 - Gain / (loss) from derivative financial instruments, net
  14 
  (646)
 - Other financial results
  208 
  (109)
Total other financial results
  14,527 
  9,056 
 - Inflation adjustment
  1,206 
  309 
Total financial results, net
  9,662 
  2,323 
 
 
 
26
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
 
25.
Related party transactions
 
The following is a summary of the balances with related parties as of March 31, 2022 and June 30, 2021:
 
Item
 
 March 31, 2022
 
 June 30, 2021
Trade and other receivables
 
3,387
 
4,167
Investments in financial assets
 
2,170
 
2,202
Borrowings
 
(249)
 
(1,261)
Trade and other payables
 
(1,063)
 
(639)
Total
 
4,245
 
4,469
 
 Related party
 
 
 March 31, 2022
 
 
 June 30, 2021
 
 Description of transaction
 Item
New Lipstick LLC
  27 
  32 
 Reimbursement of expenses receivable
 Trade and other receivable
Condor
  - 
  769 
 Public company’s securities
 Trade and other receivable
 
  - 
  400 
 Loans granted
 Trade and other receivable
 
  - 
  7 
 Others
 Trade and other receivable
 
  - 
  67 
 Others
 Investment in financial assets
Comparaencasa Ltd.
  242 
  - 
 Public company’s securities
 Trade and other receivable
 
  (36)
  - 
 Others
 Trade and other payables
Galerias Pacifico
  538 
  184 
 Others
 Trade and other receivable
Lipstick Management LLC
  - 
  (224)
 Loans obtained
 Borrowings
Metropolitan 885 Third Av. LLC (1)
  - 
  (660)
 Loans obtained
 Borrowings
La Rural S.A.
  137 
  102 
 Loans granted
 Trade and other receivable
 
  204 
  285 
 Dividends
 Trade and other receivable
 
  (5)
  - 
 Others
 Trade and other payables
 
  - 
  (20)
 Leases and/or rights of use payable
 Trade and other payables
Other associates and joint ventures
  - 
  3 
 Reimbursement of expenses receivable
 Trade and other receivable
 
  (42)
  (49)
 Loans obtained
 Borrowings
 
  6 
  8 
  Leases and/or rights of use receivable
 Trade and other receivable
 
  24 
  (3)
 Unpaid contributions
 Trade and other payables
 
  6 
  8 
 Management Fee
 Trade and other receivable
 
  (110)
  (147)
 NCN
 Borrowings
 
  (25)
  (102)
 Others
 Trade and other payables
 
  27 
  34 
 Others
 Trade and other receivable
 
  1 
  1 
 Share based payments
 Trade and other payables
 
  - 
  (8)
 Lease liabilities
 Trade and other payables
 
  - 
  10 
 Loans granted
 Trade and other receivable
Total associates and joint ventures
  994 
  697 
 
 
Cresud
  5 
  18 
 Reimbursement of expenses receivable
 Trade and other receivable
 
  (348)
  (124)
 Corporate services payable
 Trade and other payables
 
  2,170 
  2,135 
 NCN
 Investment in financial assets
 
  (172)
  (201)
 Others
 Trade and other payables
 
  (3)
  (4)
 Share based payments
 Trade and other payables
Total parent company
  1,652 
  1,824 
 
 
Futuros y Opciones S.A.
  - 
  (133)
 Loans obtained
 Borrowings
 
  2 
  4 
 Others
 Trade and other receivable
Helmir S.A.
  (37)
  (45)
 NCN
Borrowings
Total subsidiaries of parent company
  (35)
  (174)
 
 
Directors
  (474)
  (176)
 Fees for services received
 Trade and other payables
 
  - 
  7 
 Advances
 Trade and other receivable
Yad Leviim LTD (2)
  1,935 
  2,249 
 Loans granted
 Trade and other receivable
Others (3)
  (1)
  (1)
 Legal Services
 Trade and other payables
 
  (60)
  (3)
 Loans obtained
 Borrowings
 
  232 
  20 
 Others
 Trade and other receivable
 
  (18)
  - 
 Others
 Trade and other payables
 
  (6)
  (1)
 Management Fee
 Trade and other payables
 
  26 
  27 
 Reimbursement of expenses receivable
 Trade and other receivable
Total directors and others
  1,634 
  2,122 
 
 
 Total at the end of the period / year
  4,245 
  4,469 
 
 
 
(1) On January 31, 2021 Metropolitan 885 3rd Av, LLC was liquidated.
(2) On March 22, 2022 the loan between Tyrus S.A. and YAD LEVIIM LTD was renovated fot 2 more years preserving the same conditions.
(3) Includes CAMSA, Estudio Zang, Bergel & Viñes, Austral Gold, Fundación IRSA, Hamonet S.A., CAM Communication LP, Gary Gladstein and Fundación Museo de los Niños.
 
 
27
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
The following is a summary of the results with related parties for the nine-month periods ended March 31, 2022 and 2021:
 
Related party
 
 
 Nine Months ended March 31, 2022
 
 
 Nine Months ended March 31, 2021
 
Description of transaction
 BACS
  45 
  50 
 Leases and/or rights of use
 Condor
  22 
  78 
 Financial operations
 BHN Vida S.A
  21 
  16 
 Leases and/or rights of use
 BHN Seguros Generales S.A.
  20 
  2 
 Financial operations
 Lipstick Management LLC
  17 
  - 
 Leases and/or rights of use
 Metropolitan 885 Third Av. LLC (1)
  28 
  - 
 Financial operations
 Comparaencasa Ltd.
  165 
  - 
 Financial operations
 Otras asociadas y negocios conjuntos
  77 
  3 
 Financial operations
 
  (5)
  (23)
 Leases and/or rights of use
 
  15 
  - 
 Corporate services
Total associates and joint ventures
  405 
  126 
 
Cresud
  38 
  16 
 Leases and/or rights of use
 
  (743)
  (534)
 Corporate services
 
  (148)
  271 
 Financial operations
Total parent company
  (853)
  (247)
 
 Helmir
  2 
  2 
 Financial operations
Total parent company
  2 
  2 
 
 Directors
  (657)
  (822)
 Fees and remunerations
 Senior Management
  (23)
  (37)
 Fees and remunerations
 Finkelstein
  32 
  - 
 Financial operations
 Yad Leviim LTD
  74 
  1 
 Financial operations
 Others (2)
  (20)
  - 
 Financial operations
 
  4 
  2 
 Leases and/or rights of use
 
  (43)
  (28)
 Donations
 
  (26)
  (33)
 Legal services
 
  (8)
  - 
 Fees and remuneration
 Otras (1)
  3 
  - 
 Legal services
Total others
  (664)
  (917)
 
Total at the end of the period
  (1,110)
  (1,036)
 
 
(1)
On January 31, 2021 Metropolitan 885 3rd Av, LLC was liquidated.
(2)
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 nine-month periods ended March 31, 2022 and 2021:
 
Related party
 
 Nine Months ended March 31, 2022
 
 
 Nine Months ended March 31, 2021
 
Description of the operation
Cresud
  - 
  (543)
Dividends granted
Total dividends distribution
  - 
  (543)
 
Quality
  35 
  34 
Capital contributions
Condor
  736 
  - 
Exchange of shares
Puerto Retiro
  - 
  22 
Capitalized loan
Others
  104 
  - 
Capital contributions
Total capital contributions
  875 
  56 
 
Condor
  3,057 
  - 
Dividends received
Total other transactions
  3,057 
  - 
 
 
 
 
28
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 03.31.2022
 
 
Total as of 06.30.2021
 
Assets
 
 
 
 
 
 
 
 
 
 
 
 
Trade and other receivables
 
 
 
 
 
 
 
 
 
 
 
 
US Dollar
  27 
  110.81 
  2,972 
  4,543 
Euros
  0 
  122.62 
  11 
  34 
Receivables with related parties:
    
    
    
    
US Dollar
  18 
  111.01 
  1,986 
  2,687 
Total trade and other receivables
    
    
  4,969 
  7,264 
Investments in financial assets
    
    
    
    
US Dollar
  13 
  110.81 
  1,483 
  944 
Pounds
  1 
  145.54 
  98 
  140 
Nuevo Israel Shekel
  23 
  34.79 
  786 
  853 
Investments with related parties:
    
    
    
    
US Dollar
  24 
  111.01 
  2,687 
  3,134 
Total investments in financial assets
    
    
  5,054 
  5,071 
Cash and cash equivalents
    
    
    
    
US Dollar
  6 
  110.81 
  664 
  1,473 
Euros
  0 
  122.62 
  1 
  1 
Total cash and cash equivalents
    
    
  665 
  1,474 
Total Assets
    
    
  10,688 
  13,809 
 
    
    
    
    
Liabilities
    
    
    
    
Trade and other payables
    
    
    
    
US Dollar
  11 
  111.01 
  1,174 
  1,690 
Euros
  0 
  123.12 
  18 
  45 
Payables to related parties:
    
    
    
    
US Dollar
  0 
  111.01 
  47 
  74 
Total Trade and other payables
    
    
  1,239 
  1,809 
Borrowings
    
    
    
    
US Dollar
  499 
  111.01 
  55,355 
  70,029 
Borrowings with related parties
    
    
    
    
US Dollar
  6 
  111.01 
  696 
  2,034 
Total Borrowings
    
    
  56,051 
  72,063 
Derivative financial instruments
    
    
    
    
US Dollar
  0 
  111.01 
  26 
  81 
Total derivative financial instruments
    
    
  26 
  81 
Lease liabilities
    
    
    
    
US Dollar
  9 
  111.01 
  967 
  1,093 
Lease liabilities with related parties
    
    
    
    
US Dollar
  - 
  111.01 
  - 
  8 
Total lease liabilities
    
    
  967 
  1,101 
Total Liabilities
    
    
  58,283 
  75,054 
 
(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 March 31, 2022 according to Banco de la Nación Argentina.
 
 
29
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).
 
 
 
Nine Months ended March 31, 2022
 
 
Nine Months ended March 31, 2021
 
Revenues
  - 
  52,904 
Costs
  - 
  (42,926)
Gross profit
  - 
  9,978 
Net gain from fair value adjustment of investment properties
  - 
  (39)
General and administrative expenses
  - 
  (6,090)
Selling expenses
  - 
  (5,801)
Other operating results, net
  - 
  1,980 
Profit from operations
  - 
  28 
Share of profit of associates and joint ventures
  - 
  1,005 
Profit before financial results and income tax
  - 
  1,033 
Finance income
  - 
  735 
Finance cost
  - 
  (9,647)
Other financial results
  - 
  637 
Financial results, net
  - 
  (8,275)
Profit before income tax
  - 
  (7,242)
Income tax
  - 
  387 
Loss from operations that are discontinued
  - 
  (6,855)
Loss for loss of control
  - 
  (5,619)
Loss from discontinued operations
  - 
  (12,474)
 
    
    
Loss for the period from discontinued operations attributable to:
    
    
Equity holders of the parent
  - 
  (9,854)
Non-controlling interest
  - 
  (2,620)
Loss per share from discontinued operations attributable to equity holders of the parent:
    
    
Basic
  - 
  (17.09)
Diluted
  - 
  (17.09)
 
 
29.
Other relevant events of the period
 
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, amounts to the sum of ARS 36,967, and use it for the total absorption of the negative result for the fiscal year ended June 30, 2021.
 
Shares Buyback Program
 
On March 11, 2022, the IRSA Board of Directors approved the shares buyback program issued by the Company and established the terms and conditions for the acquisition of shares issued by the Company, under the terms of Article 64 of Law No. 26,831 and the regulations of the CNV, for up to a maximum amount of ARS1,000 million and up to 10% of the capital stock, up to a daily limit of up to 25% of the average volume of daily transactions experienced by the Company's shares, jointly in the listed markets, during the previous 90 business days, and up to a maximum price of USD 7 per ADS and ARS 140 per share. Likewise, the buyback term was set at up to 120 days, beginning the day following the date of publication of the information in the Daily Bulletin of the Buenos Aires Stock Exchange.
 
 
30
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
As of March 31, 2022 the Company has acquired 339,622 common shares for an amount of ARS 33 million approximately, representing the 3.29% of the program. As of the date of issuance of these financial statements there is no due date that determine the end of the program.
 
Warrants exercise
 
During the nine-month period ended March 31, 2022, certain warrant holders exercised their right to acquire additional shares. As of March 31, 2022, USD 18,751 was received, for a converted warrants of 43,405 to common shares. Amounts in USD are expressed in integers
 
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.
 
The main indicators of the Argentine economy are described below:
 
●
In February 2022, the Monthly Economic Activity Estimator (“EMAE” in Spanish) reported by the National Institute of Statistics and Censuses (“INDEC” in Spanish), registered a variation of 9.1% compared to the same month of 2021, and 1.8% compared to the previous month.
●
The annual retail inflation reached 55.11% in the last 12 months. The survey on market expectations prepared by the Argentine Central Bank in March 2022, called the Market Expectations Survey (“REM” in Spanish), estimates a retail inflation of 59.2% i.a. for December 2022 and 47.5% for December 2023. Analysts participating in the REM forecast a rebound in economic activity in 2022, reaching an economic growth of 3.2%.
●
In the period from March 2021 to March 2022, the Argentine peso depreciated 20.5% 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 March 31, 2022, there is an exchange gap of approximately 72.2% 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
 
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 9,000,000 cases of infections had been confirmed in Argentina, by virtue of which the Argentinian Government implemented a series of health measures of social, preventive and mandatory lockdown at the national level with the closure of non-essential activities, including shopping malls, as well as the suspension of flights and border closures, for much of the years 2020 and 2021.
 
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
 
 
31
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
continue to apply. Regarding hotels, operating since December 2020, the sector begins to show signs of recovery thanks to domestic tourism and the government's incentives to promote it after the prolonged restrictions on air flows that directly affected the influx of international tourism.
 
The effects of the coronavirus pandemic 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.
 
30.
Subsequent events
 
Republica Building Sale
 
On April 19th 2022, the Company has sold the “República” building. The transaction price was set at USD 131.8 million, of which USD 105.1 million was paid in cash, and the remaining amount with the delivery of a plot of land located on the district of Quilmes, Buenos Aires Province.
 
Share Buyback program
 
During April and May, the Company acquired 408,902 common shares (NAV ARS 1 per share) for a total of ARS 40 million, representing 4.01% of the program.
 
 
32
 
 
 
33