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Related party transactions | 12 Months Ended
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Jun. 30, 2023
Related party transactions |
Related party transactions | 32. Related party transactions In the normal course of business, the Group conducts transactions with different entities or parties related to it. All transactions are carried out in accordance with market parameters. Remunerations of the Board of Directors The Act N° 19,550 provides that the remuneration of 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 Act 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 Act N° 19,550, taking into consideration whether such directors perform technical-administrative functions and depending upon the results recorded by the Company during the fiscal year. Once such amounts are determined, they should be approved by the Shareholders’ Meeting. Senior Management remuneration The members of the Senior or Top Management are appointed and removed by the Board of Directors, and perform functions in accordance with the instructions delivered by the Board itself. The Society’s Senior Management is composed of as follows:
Name |  | Date of birth |  | Position |  | Current position since
Alejandro G. Elsztain |  | 03/31/1966 |  | General Manager |  | 1994
Diego Chillado Biaus |  | 09/15/1978 |  | Operative Manager |  | 2022
Matías I. Gaivironsky |  | 02/23/1976 |  | Administrative and Financial Manager |  | 2011
Alejandro Casaretto |  | 10/15/1952 |  | Regional Agricultural Manager |  | 2008
The remuneration earned by Senior Management for their functions consists of an amount that is fixed taking into account the manager's background, capacity and experience, plus an annual bonus based on their individual performance and the Group's results. Members of the senior management participate in defined contributions and share-based incentive plans that are described in Note 31, respectively. The aggregate compensation to the Senior Management of the Operations Center in Argentina for the year ended June 30, 2023 amounts to ARS 243. Corporate Service Agreement with IRSA Considering that Cresud and IRSA have operating overlapping areas, the Board of Directors considered it convenient to implement alternatives that allow reducing certain fixed costs of its activity, in order to reduce its impact on operating results, taking advantage of and optimizing the individual efficiencies of each of the companies in the different areas that make up the operational administration. For this purpose, on June 30, 2004, a Framework Agreement for the Exchange of Corporate Services (“Framework Agreement”) was signed, between IRSA, Cresud and IRSA CP, which was periodically modified, the last update being on June 28, 2019. 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 semiannual review and evaluation of the criteria used in the process of liquidating corporate services, as well as the distribution bases and supporting documentation used in the aforementioned process, through the preparation of a semi-annual report. It should be noted that the operation under comment allows Cresud 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 Hijos 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 its family members. In addition, Tarshop, BACS, BHN Sociedad de Inversión S.A., BHN Seguros Generales S.A. and BHN Visa S.A. rent offices owned by IRSA in different buildings. Furthermore, we also let various spaces in our Shopping malls (stores, stands, storage space or advertising space) to third parties and related parties such us Tarshop S.A. and BHSA. Lease agreements entered into with associates included similar provisions and amounts to those included in agreements with third parties. 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 IRSA. Fundación Museo de los Niños is a non-profit association, created by the same founders of Fundación IRSA and its Management Board is formed by the same members as Fundación IRSA. Fundación Museo de los Niños acts as special vehicle for the development of "Museo de los Niños, Abasto" and "Museo de los Niños, Rosario". On October 29, 1999, our shareholders approved the award of the agreement “Museo de los Niños, Abasto” to Fundación Museo de los Niños. On October 31, 1997, IRSA CP entered into an agreement with Fundación IRSA whereby it loaned 3,800 square meters of the area built in the Abasto Shopping Mall for a total term of 30 years, and on November 29, 2005, shareholders of IRSA CP approved another agreement entered into with Fundación Museo de los Niños whereby 2,670.11 square meters built in the Shopping Mall Alto Rosario 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-Sale of goods and/or services hiring In the normal course of its business and with the aim of make resources more efficient, in certain occasions purchase and/or hire services which later sells and/or recover 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-sale of financial assets Cash surplus are usually invested in several instruments that may include those issued by related companies acquired at issuance or from unrelated third parties through transactions in the secondary market. Investment in investment funds managed by BACS The Group invests parts of 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 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. San Bernardo lease The Company leased in January 2019 a farm in the Province of Córdoba owned by San Bernardo de Córdoba S.A. (formerly Isaac Elsztain e hijos S.C.A), continuing the lease held in August 2015, for a fraction of 10,896 hectares. The lease was agreed for 12,590 hectares and the price was set at the amount of pesos equivalent to 2.5 kg of meat per hectare. The price of meat will be set taking into account the price per kilo of meat determined by the I.N.M.L (cattle index of the Liniers Market) reported on the website of said Market. Additionally, a production prize equivalent to 15% of the kilos produced in excess of 175,000 was agreed for the total of the existing property. Consulting Agreement In accordance with the terms of the Consulting Agreement, in force as from November 7, 1994, and its amendments, CAMSA provides us with advisory services on matters related to activities and investments included agricultural, real estate, financial and hotel operations, among others. An 85% of the capital stock of CAMSA is held by one of our shareholders and President of our Board of Directors, while the remaining 15% of the capital stock is owned by our First Vice President. Based on the terms and conditions of the Consulting Agreement, CAMSA provides us with the following services:
| · | advise in relation to investing in all aspects of the agricultural business, real estate, financial, and hotel operations, among others, and business proposals;
| · | acts on behalf of our company in such transactions, negotiating prices, terms and conditions and other terms of each transaction; and
| · | provides advisory services on investments in securities related to such transactions.
As regards the Consulting Agreement, in consideration for its services we pay CAMSA an annual fee equal to 10% of our annual net income after tax. During fiscal year 2021, no charge was recognized. During the years ended as of June 30, 2023 and 2022, ARS 4,760 and ARS 8,988 were recognized in results for this concept, respectively. The Consulting Agreement can be revoked by any of the parties upon prior written notice that should not exceed 60 days. If we revoke the Consulting Agreement without cause, we will be liable to pay CAMSA twice the average fee amounts paid for management services during the two fiscal years preceding such revocation. 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 |  |  | 8,285 |  |  |  | 8,983 |
Investments in financial assets |  |  | 1,295 |  |  |  | 640 |
Trade and other payables |  |  | (11,007 | ) |  |  | (8,971 | )
Borrowings |  |  | (220 | ) |  |  | (268 | )
Total |  |  | (1,647 | ) |  |  | 384 |
Related party |  | 06.30.2023 |  | 06.30.2022 |  | Description of transaction |  | Item
New Lipstick LLC |  | 62 |  | 65 |  | Reimbursement of expenses |  | Trade and other receivables
Other associates and joint ventures (i) |  | 12 |  | 15 |  | Leases and/or rights of use receivable |  | Trade and other receivables
|  | - |  | 440 |  | Dividends receivables |  | Trade and other receivables
|  | 45 |  | - |  | Contributions pending subscription |  | Trade and other receivables
|  | 559 |  | 588 |  | Other investments |  | Investments in financial assets
|  | (134) |  | (136) |  | Non-convertible notes |  | Borrowings
|  | 1 |  | 2 |  | Equity incentive plan receivable |  | Trade and other receivables
|  | 796 |  | 530 |  | Loans granted |  | Trade and other receivables
|  | (86) |  | (132) |  | Borrowings |  | Borrowings
|  | 1 |  | 2 |  | Reimbursement of expenses |  | Trade and other receivables
|  | 27 |  | 41 |  | Management fees receivable |  | Trade and other receivables
|  | (207) |  | (190) |  | Other payables |  | Trade and other payables
|  | 1,590 |  | 1,524 |  | Other receivables |  | Trade and other receivables
Total associates and joint ventures |  | 2,666 |  | 2,749 |  |  |  |
CAMSA and its subsidiaries |  | (3,127) |  | (8,565) |  | Management fee payables |  | Trade and other payables
Yad Levim LTD |  | 4,739 |  | 4,762 |  | Loans granted |  | Trade and other receivables
Other related parties (ii) |  | 516 |  | 941 |  | Other receivables |  | Trade and other receivables
|  | (124) |  | (23) |  | Other payables |  | Trade and other payables
|  | - |  | 52 |  | Non-convertible notes |  | Investments in financial assets
|  | 736 |  | - |  | Other investments |  | Investments in financial assets
|  | - |  | (26) |  | Management fee payables |  | Trade and other payables
|  | 25 |  | 54 |  | Reimbursement of expenses |  | Trade and other receivables
|  | (9) |  | (28) |  | Legal services |  | Trade and other payables
Total other related parties |  | 2,756 |  | (2,833) |  |  |  |
IFISA |  | 471 |  | 580 |  | Financial operations receivables |  | Trade and other receivables
Total direct parent company |  | 471 |  | 580 |  |  |  |
Directors and Senior Management |  | (7,540) |  | (139) |  | Fees |  | Trade and other payables
|  | - |  | 27 |  | Advances receivable |  | Trade and other receivables
Total Directors and Senior Management |  | (7,540) |  | (112) |  |  |  |
Total |  | (1,647) |  | 384 |  |  |  |
(i) | Includes Quality Invest S.A., Banco Hipotecario S.A., Cyrsa S.A., Nuevo Puerto Santa Fe S.A., Banco Hipotecario, GCDI S.A., Avenida Inc., Avenida Compras S.A., Agrofy S.A., BHN Seguros Generales S.A., BHN Vida S.A. and OFC S.R.L..
(ii) | Includes Estudio Zang, Bergel y Viñes, Fundación Puerta 18, Sociedad Rural Argentina, CAM Communication LP, Sutton, Fundación Museo de los Niños, Viflor S.A. and Agrofy S.A..
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 |  | - |  | - |  | 276 |  | Leases and/or rights of use
|  | - |  | 125 |  | - |  | Financial operations
BHN Vida S.A. |  | (3) |  | - |  | - |  | Financial operations
BHN Seguros Generales S.A. |  | (1) |  | - |  | - |  | Financial operations
Other associates and joint ventures |  | (63) |  | 75 |  | (6) |  | Leases and/or rights of use
|  | 92 |  | 67 |  | - |  | Corporate services
|  | 149 |  | 817 |  | 330 |  | Financial operations
Total associates and joint ventures |  | 174 |  | 1,084 |  | 600 |  |
CAMSA and its subsidiaries |  | (4,760) |  | (8,988) |  | - |  | Management fee
Other related parties (i) |  | (1) |  | (19) |  | (24) |  | Leases and/or rights of use
|  | (12) |  | - |  | - |  | Fees and remunerations
|  | (215) |  | - |  | - |  | Corporate services
|  | (179) |  | - |  | (24) |  | Legal services
|  | 225 |  | 123 |  | - |  | Financial operations
|  | (23) |  | - |  | (56) |  | Donations
|  | 294 |  | - |  | - |  | Income from sales and services from agricultural business
Total other related parties |  | (4,671) |  | (8,884) |  | (104) |  |
IFISA |  | 32 |  | (13) |  | 28 |  | Financial operations
Total Parent Company |  | 32 |  | (13) |  | 28 |  |
Directors |  | (9,202) |  | (2,979) |  | (3,475) |  | Management fee
Senior Management |  | (243) |  | (229) |  | (84) |  | Compensation of Directors and senior management
Total Directors and Senior Management |  | (9,445) |  | (3,208) |  | (3,559) |  |
Total |  | (13,910) |  | (11,021) |  | (3,035) |  |
(i) | Includes Fundación Puerta 18, Galerías Pacífico, Estudio Zang, Austral Gold, Bergel y Viñes, Fundación Museo de los Niños, Sociedad Rural Argentina, Sutton, Espacio Digital S.A., Casposo Argentina Ltd, Uranga Trading, Isaac Elsztain e Hijos S.C.A. and Hamonet S.A...
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 transaction
Quality |  | (55) |  | (88) |  | Irrevocable contributions
Condor |  | - |  | (1,865) |  | Irrevocable contributions
Agrofy |  | - |  | (1,076) |  | Irrevocable contributions
Comparaencasa |  | - |  | (278) |  | Irrevocable contributions
Total contributions |  | (55) |  | (3,307) |  |
Agro-Uranga S.A. |  | 201 |  | 151 |  | Dividends received
Uranga Trading S.A. |  | 112 |  | 41 |  | Dividends received
Viflor |  | 6 |  | - |  | Dividends received
Condor |  | 103 |  | 7,731 |  | Dividends received
Nuevo Puerto Santa Fe S.A. |  | 216 |  | - |  | Dividends received
Total dividends received |  | 638 |  | 7,923 |  |

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