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Related party transactions | 12 Months Ended
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Jun. 30, 2023
Related party transactions |
Related party transactions | 30. Related party transactions In the normal course of business, the Group conducts transactions with different entities or parties related to it. Remunerations of the Board of Directors The Business Companies Act of Argentina (Law N° 19,550), provides that the remuneration to the Board of Directors, where it is not set forth in the Company’s by-laws, shall be fixed by the Shareholders' Meetings. The maximum amount of remuneration that the members of the Board are allowed to receive, including salary and other performance-based remuneration of permanent technical-administrative functions, may not exceed 25% of the profits. Such maximum amount is limited to 5% where no dividends are distributed to the Shareholders, and will be increased proportionately to the distribution, until reaching such cap where total profits are distributed, except that such remunerations were expressly agreed by the Shareholders' Meeting, for which purpose the matter must be included as one of the items on the agenda. Some of the Group's Directors are hired under the Employment Contract Law N° 20,744. This Act rules on certain conditions of the work relationship, including remuneration, salary protection, working hours, vacations, paid leaves, minimum age requirements, workmen protection and forms of suspension and contract termination. The remuneration of directors for each fiscal year is based on the provisions established by the Business Companies Act, taking into consideration whether such directors perform technical-administrative functions and depending upon the results recorded during the fiscal year. Once such amounts are determined, they should be approved by the Shareholders’ Meeting. Senior Management remuneration The members of the Group’s senior management are appointed and removed by the Board of Directors and perform functions in accordance with the instructions delivered by the Board itself. The Company’s Senior Management is composed of as follows:
Name | Date of Birth | Position | Current position since
Eduardo S. Elsztain | 01/26/1960 | General Manager | 1991
Arnaldo Jawerbaum | 08/13/1966 | Operating Manager | 2022
Jorge Cruces | 11/07/1966 | Investment Manager | 2020
Matías I. Gaivironsky | 02/23/1976 | Administrative and Financial Manager | 2011
The total remuneration paid to members of senior management for their functions consists of a fixed salary that takes account of the manager's background capacity and experience, plus an annual bonus based on their individual performance and the Group's results. Members of senior management participate in defined contributions and share-based incentive plans that are described in Note 29. The aggregate compensation to the Senior Management for the year ended June 30, 2023 amounts to ARS 178. Corporate Service Agreement with Cresud Considering that IRSA and Cresud have operating overlapping areas, the Board of Directors considered it convenient to implement alternatives that allow reducing certain fixed costs of its activity, in order to reduce its impact on operating results, taking advantage of and optimizing the individual efficiencies of each of the companies in the different areas that make up the operational administration. For this purpose, on June 30, 2004, a Framework Agreement for the Exchange of Corporate Services (“Framework Agreement”) was signed, between IRSA, Cresud and IRSA CP. On December 22, 2021, were held the shareholders' meeting approving the merger by absorption of IRSA and IRSA CP, for which IRSA, in its capacity as absorbing company, is the successor of all the rights and obligations assumed by IRSA CP by the Framework Agreement. The last modification to the Framework Agreement was made on July 12, 2022. Under this Framework Agreement, corporate services are currently provided for different areas including: Corporate Human Resources, Administration and Finance, Planning, Institutional Relations, Compliance and others. Under this agreement, the companies entrusted to an external consultant the semi-annual review and evaluation of the criteria used in the process of apportionment of costs to be settled for corporate services, as well as the distribution bases and supporting documentation used in the aforementioned process, through the preparation of a semi-annual report. It should be noted that the operation under comment allows Cresud and IRSA to maintain absolute independence and confidentiality in their strategic and commercial decisions, being the allocation of costs and benefits made on the basis of operational efficiency and equity, without pursuing individual economic benefits for each of the companies. Offices and Shopping Malls spaces leases The offices of our President are located at 108 Bolivar, in the Autonomous City of Buenos Aires. The property has been rented to Isaac Elsztain e Hajes S.A., a company controlled by some family members of Eduardo Sergio Elsztain, our president, and to Hamonet S.A., a company controlled by Fernando A. Elsztain, one of our directors, and some of his family members. Furthermore, we also let various spaces in our shopping malls (stores, stands, storage space or advertising space) to third parties and related parties such as BHSA. Donations granted to Fundación IRSA and Fundación Museo de los Niños Fundación IRSA is a non-profit charity institution that seeks to support and generate initiatives concerning education, the promotion of corporate social responsibility and the entrepreneurial spirit of the youth. It carries out corporate volunteering programs and fosters donations by the employees. The main members of Fundación IRSA's Board of Directors are: Eduardo S. Elsztain (President); Saul Zang (Vice President I), Alejandro Elsztain (Vice President II) and Mariana C. de Elsztain (secretary). It funds its activities with the donations made by us and Cresud. Fundación Museo de los Niños is a non-profit association, created by the same founders of Fundación IRSA and its Management Board is formed by the same members as Fundación IRSA. Fundación Museo de los Niños acts as a special vehicle for the development of "Museo de los Niños, Abasto" and "Museo de los Niños, Rosario". On October 29, 1999, our shareholders approved the award of the agreement “Museo de los Niños, Abasto” to Fundación Museo de los Niños. On October 31, 1997, IRSA CP entered into an agreement with Fundación IRSA whereby it loaned 3,800 square meters of the area built in the Abasto Shopping mall for a total term of 30 years, and on November 29, 2005, shareholders of IRSA CP approved another agreement entered into with Fundación Museo de los Niños whereby 2,670.11 square meters built in the Alto Rosario shopping mall were loaned for a term of 30 years. Fundación IRSA has used the available area to house the museum called “Museo de los Niños, Abasto” an interactive learning center for kids and adults, which was opened to the public in April 1999. Legal Services The Group hires legal services from Estudio Zang, Bergel & Viñes, at which Saúl Zang was a founding partner and sits at the Board of Directors of the Group companies. Hotel services Our company and related parties sometimes rent from NFSA and Hoteles Argentinos S.A. hotel services and conference rooms for events. Purchase and sale of goods and/or service hiring In the normal course of its business and with the aim of making resources more efficient, in certain occasions purchases and/or hires services which later sells and/or recovers for companies or other related parties, based upon their actual utilization. Sale of advertising space in media Our company and our related parties frequently enter into agreements with third parties whereby we sell/acquire rights of use to advertise in media (TV, radio stations, newspapers, etc.) that will later be used in advertising campaigns. Normally, these spaces are sold and/or recovered to/from other companies or other related parties, based on their actual use. Purchase and sale of financial assets The Group usually invests excess cash in several instruments that may include those issued by related companies, acquired at issuance or from unrelated third parties through secondary market deals. Investment in investment funds managed by BACS The Group invests part of its liquid funds in mutual funds managed by BACS among other entities. Borrowings In the normal course of its activities, the Group enters into diverse loan agreements or credit facilities between the group’s companies and/or other related parties. These borrowings generally accrue interests at market rates. Financial and service operations with BHSA The Group works with several financial entities in the Argentine market for operations including, but not limited to, credit, investment, purchase and sale of securities and financial derivatives. Such entities include BHSA and its subsidiaries. BHSA and BACS usually act as underwriters in Capital Market transactions. In addition, we have entered into agreements with BHSA, who provides collection services for our shopping malls. The following is a summary presentation of the balances with related parties as of June 30, 2023 and 2022:
Item |  | 06.30.2023 |  |  | 06.30.2022 |
Trade and other receivables |  |  | 7,809 |  |  |  | 9,447 |
Investments in financial assets |  |  | 1,722 |  |  |  | 6,110 |
Borrowings |  |  | (308 | ) |  |  | (358 | )
Trade and other payables |  |  | (8,768 | ) |  |  | (2,402 | )
Total |  |  | 455 |  |  |  | 12,797 |
Related party |  | 06.30.2023 |  |  | 06.30.2022 |  |  | Description of transaction |  | Item |
New Lipstick LLC |  |  | 62 |  |  |  | 65 |  |  | Reimbursement of expenses receivable |  | Trade and other receivable |
Comparaencasa Ltd. |  |  | 559 |  |  |  | 589 |  |  | Other investments |  | Investments in financial assets |
|  |  | - |  |  |  | (88 | ) |  | Others |  | Trade and other payables |
Galerias Pacifico |  |  | 1,570 |  |  |  | 1,516 |  |  | Others |  | Trade and other receivable |
La Rural S.A. |  |  | 796 |  |  |  | 530 |  |  | Loans granted |  | Trade and other receivable |
|  |  | - |  |  |  | 440 |  |  | Dividends |  | Trade and other receivable |
|  |  | (137 | ) |  |  | (11 | ) |  | Others |  | Trade and other payables |
|  |  | 2 |  |  |  | 9 |  |  | Others |  | Trade and other receivable |
Other associates and joint ventures |  |  | 1 |  |  |  | 2 |  |  | Reimbursement of expenses receivable |  | Trade and other receivable |
|  |  | (86 | ) |  |  | (132 | ) |  | Loans obtained |  | Borrowings |
|  |  | 12 |  |  |  | 14 |  |  | Leases and/or rights of use receivable |  | Trade and other receivable |
|  |  | 45 |  |  |  | - |  |  | Irrevocable contributions pending subscription |  | Trade and other receivable |
|  |  | 27 |  |  |  | 41 |  |  | Management Fee |  | Trade and other receivable |
|  |  | (134 | ) |  |  | (135 | ) |  | NCN |  | Borrowings |
|  |  | (70 | ) |  |  | (91 | ) |  | Others |  | Trade and other payables |
|  |  | 18 |  |  |  | 108 |  |  | Others |  | Trade and other receivable |
|  |  | 1 |  |  |  | 2 |  |  | Share based payments |  | Trade and other payables |
Total associates and joint ventures |  |  | 2,666 |  |  |  | 2,859 |  |  |  |  |  |
Cresud |  |  | - |  |  |  | 11 |  |  | Reimbursement of expenses receivable |  | Trade and other receivable |
|  |  | (784 | ) |  |  | (897 | ) |  | Corporate services receivable |  | Trade and other payables |
|  |  | 427 |  |  |  | 5,521 |  |  | NCN |  | Investment in financial assets |
|  |  | (252 | ) |  |  | (442 | ) |  | Others |  | Trade and other payables |
|  |  | (3 | ) |  |  | (6 | ) |  | Share based payments |  | Trade and other payables |
Total parent company |  |  | (612 | ) |  |  | 4,187 |  |  |  |  |  |
Futuros y Opciones S.A. |  |  | 1 |  |  |  | 4 |  |  | Others |  | Trade and other receivable |
Helmir S.A. |  |  | (88 | ) |  |  | (91 | ) |  | NCN |  | Borrowings |
Total subsidiaries of parent company |  |  | (87 | ) |  |  | (87 | ) |  |  |  |  |
Directors |  |  | (7,388 | ) |  |  | (785 | ) |  | Fees for services received |  | Trade and other payables |
|  |  | - |  |  |  | 1,300 |  |  | Advances |  | Trade and other receivable |
Rundel Global LTD |  |  | 736 |  |  |  | - |  |  | Other investments |  | Investments in financial assets |
Yad Levim LTD |  |  | 4,739 |  |  |  | 4,762 |  |  | Loans granted |  | Trade and other receivable |
Others (1) |  |  | (9 | ) |  |  | (28 | ) |  | Leases and/or rights of use receivable |  | Trade and other payables |
|  |  | 511 |  |  |  | 591 |  |  | Others |  | Trade and other receivable |
|  |  | (126 | ) |  |  | (30 | ) |  | Others |  | Trade and other payables |
|  |  | - |  |  |  | (26 | ) |  | Management Fee |  | Trade and other payables |
|  |  | 25 |  |  |  | 54 |  |  | Reimbursement of expenses receivable |  | Trade and other receivable |
Total directors and others |  |  | (1,512 | ) |  |  | 5,838 |  |  |  |  |  |
Total at the end of the year |  |  | 455 |  |  |  | 12,797 |  |  |  |  |  |
(1) | Includes CAMSA, Estudio Zang, Bergel y Viñes, Fundación Puerta 18, Sociedad Rural Argentina, CAM Communication LP, Sutton and Fundación Museo de los Niños.
The following is a summary of the results with related parties for the years ended June 30, 2023, 2022 and 2021:
Related party |  | 06.30.2023 |  |  | 06.30.2022 |  |  | 06.30.2021 |  |  | Description of transaction |
BACS |  |  | - |  |  |  | 125 |  |  |  | 276 |  |  | Financial operations |
Metropolitan (1) |  |  | - |  |  |  | 67 |  |  |  | 54 |  |  | Financial operations |
BHN Vida S.A |  |  | (3 | ) |  |  | 54 |  |  |  | 54 |  |  | Leases and/or rights of use |
BHN Seguros Generales S.A. |  |  | (1 | ) |  |  | 52 |  |  |  | 22 |  |  | Leases and/or rights of use |
Lipstick Management LLC |  |  | - |  |  |  | 43 |  |  |  | 30 |  |  | Financial operations |
Comparaencasa Ltd. |  |  | 75 |  |  |  | 414 |  |  |  | - |  |  | Financial operations |
La Rural S.A. |  |  | - |  |  |  | - |  |  |  | (54 | ) |  | Leases and/or rights of use |
Condor |  |  | 4 |  |  |  | 58 |  |  |  | 901 |  |  | Financial operations |
Otras asociadas y negocios conjuntos |  |  | 70 |  |  |  | 293 |  |  |  | 41 |  |  | Financial operations |
|  |  | (63 | ) |  |  | (30 | ) |  |  | (28 | ) |  | Leases and/or rights of use |
|  |  | 92 |  |  |  | 67 |  |  |  | - |  |  | Corporate services |
Total associates and joint ventures |  |  | 174 |  |  |  | 1,143 |  |  |  | 1,296 |  |  |  |
Cresud |  |  | 103 |  |  |  | 132 |  |  |  | 127 |  |  | Leases and/or rights of use |
|  |  | (2,846 | ) |  |  | (2,455 | ) |  |  | (2,520 | ) |  | Corporate services |
|  |  | 3,975 |  |  |  | (54 | ) |  |  | 1,164 |  |  | Financial operations |
Total parent company |  |  | 1,232 |  |  |  | (2,377 | ) |  |  | (1,229 | ) |  |  |
Helmir |  |  | (25 | ) |  |  | 2 |  |  |  | 338 |  |  | Financial operations |
Total subsidiaries of parent company |  |  | (25 | ) |  |  | 2 |  |  |  | 338 |  |  |  |
Directors |  |  | (9,070 | ) |  |  | (2,836 | ) |  |  | (2,988 | ) |  | Fees and remunerations |
Senior Management |  |  | (178 | ) |  |  | (166 | ) |  |  | (155 | ) |  | Fees and remunerations |
Rundel Globa LTD |  |  | 132 |  |  |  | - |  |  |  | - |  |  | Financial operations |
Yad Leviim LTD |  |  | 215 |  |  |  | 244 |  |  |  | - |  |  | Financial operations |
Others (2) |  |  | 15 |  |  |  | 13 |  |  |  | - |  |  | Corporate services |
|  |  | (18 | ) |  |  | 22 |  |  |  | (56 | ) |  | Leases and/or rights of use |
|  |  | (23 | ) |  |  | 37 |  |  |  | (6 | ) |  | Financial operations |
|  |  | (150 | ) |  |  | (136 | ) |  |  | (188 | ) |  | Donations |
|  |  | (215 | ) |  |  | (32 | ) |  |  | - |  |  | Fees and remuneration |
|  |  | (100 | ) |  |  | (106 | ) |  |  | (106 | ) |  | Legal services |
Total others |  |  | 9,392 |  |  |  | (2,960 | ) |  |  | (3,499 | ) |  |  |
Total at the end of the year |  |  | 8,011 | ) |  |  | (4,192 | ) |  |  | (3,094 | ) |  |  |
(1) | On January 31, 2022 Metropolitan 885 3rd Av, LLC was liquidated.
(2) | It includes CAMSA, Fundación Puerta 18, Galerías Pacífico, Estudio Zang, Bergel & Viñes, Austral Gold, Fundación Museo de los Niños, Sociedad Rural Argentina, Sutton, Espacio Digital S.A. and Casposo Argentina Ltd.
The following is a summary of the transactions with related parties for the years ended June 30, 2023 and 2022:
Related party |  | 06.30.2023 |  |  | 06.30.2022 |  |  | Description of the operation |
Quality |  |  | (55 | ) |  |  | (88 | ) |  | Capital contributions |
Condor |  |  | - |  |  |  | (1,865 | ) |  | Exchange of shares |
Comparaencasa |  |  | - |  |  |  | (278 | ) |  | Capital contributions |
Total capital contributions |  |  | (55 | ) |  |  | (2,231 | ) |  |  |
Cresud |  |  | (18,797 | ) |  |  | - |  |  | Dividend distributed |
Helmir |  |  | (948 | ) |  |  | - |  |  | Dividend distributed |
Total other transactions |  |  | (19,745 | ) |  |  | - |  |  |  |
Condor |  |  | 103 |  |  |  | 7,731 |  |  | Dividends received |
Nuevo Puerto Santa Fe |  |  | 216 |  |  |  | - |  |  | Dividends received |
Total other transactions |  |  | 319 |  |  |  | 7,731 |  |  |  |

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