Denomination: IRSA Inversiones y Representaciones Sociedad Anónima.

 

Fiscal year N°: 81, beginning on July 1st, 2023.

 

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 April 27, 2023 and registered in the Superintendence on September 12, 2023 with the number 15555, Book 114 Volume – of Joint Stock Companies.

 

Expiration of the Company’s by-laws: April 5, 2043.

 

Registration number with the Superintendence: 213,036.

 

Capital: 736,822,824 shares. (*)

 

Common Stock subscribed, issued and paid-up nominal value (in millions of ARS): 7,368.

 

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 of parent Company: Real estate, agricultural, commercial and financial activities.

 

Direct and indirect interest of the Parent Company on the capital stock: 415,859,290 common shares.

 

Percentage of votes of the Parent Company (direct and indirect interest) on the shareholders’ equity: 57.16% (1).

 

Type of stock	CAPITAL STATUS
	Shares authorized for Public Offering (2)	Subscribed, issued and paid-up nominal value (in millions of Argentine Pesos)
Common stock with a face value of ARS 10 per share and entitled to 1 vote each	736,822,824	7,368

 

(1) For computation purposes, treasury shares have been subtracted.

(2) Company not included in the Optional Statutory System of Public Offer of Compulsory Acquisition.

 

(*) The capital increase and the issuance of shares resolved by the board of directors on January 4, 2024, are in process of being registered in the “Inspección General de Justicia” (General Inspection of Justice).

 

Glossary	1
Unaudited Condensed Interim Consolidated Statement of Financial Position	2
Unaudited Condensed Interim Consolidated Statement of Income and Other Comprehensive Income	3
Unaudited Condensed Interim Consolidated Statement of Changes in Shareholders’ Equity	4
Unaudited Condensed Interim Consolidated Statement 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	8
Note 3 – Seasonal effects on operations	9
Note 4 – Acquisitions and disposals	9
Note 5 – Financial risk management and fair value estimates	11
Note 6 – Segment information	11
Note 7 – Investments in associates and joint ventures	13
Note 8 – Investment properties	15
Note 9 – Property, plant and equipment	18
Note 10 – Trading properties	18
Note 11 – Intangible assets	19
Note 12 – Right-of-use assets	19
Note 13 – Financial instruments by category	20
Note 14 – Trade and other receivables	21
Note 15 – Cash flow and cash equivalent information	22
Note 16 – Trade and other payables	23
Note 17 – Borrowings	23
Note 18 – Provisions	23
Note 19 – Taxes	24
Note 20 – Revenues	25
Note 21 – Expenses by nature	25
Note 22 – Costs	26
Note 23 – Other operating results, net	26
Note 24 – Financial results, net	26
Note 25 – Related party transactions	27
Note 26 – CNV General Resolution N° 622	29
Note 27 – Foreign currency assets and liabilities	29
Note 28 – Other relevant events of the period	30
Note 29 – Subsequent events	33

  

 

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
Annual Financial Statements		Consolidated Financial Statements as of June 30, 2023
BACS		Banco de Crédito y Securitización S.A.
BHSA		Banco Hipotecario S.A.
CCL		Cash settlement
Celap		Centro de Entretenimientos La Plata S.A.
CNV		Securities Exchange Commission (Argentina)
Condor		Condor Hospitality Trust Inc.
CPF		Collective Promotion Funds
CPI		Consumer Price Index
Cresud		Cresud S.A.C.I.F. y A.
Financial Statements		Unaudited Condensed Interim Consolidated Financial Statements
GCDI		GCDI S.A.
IAS		International Accounting Standards
IASB		International Accounting Standards Board
IFRS		International Financial Reporting Standards
INDEC		Argentine Institute of Statistics and Census
IRSA, The Company”, “Us”, “We”		IRSA Inversiones y Representaciones Sociedad Anónima
IRSA CP		IRSA Propiedades Comerciales S.A.
MEP		Electronic Payment Market
MPIT		Minimum presumed income tax
New Lipstick		New Lipstick LLC
Puerto Retiro		Puerto Retiro S.A.

 

 

	Note	12.31.2023	06.30.2023
ASSETS
Non-current assets
Investment properties	8	1,285,849	1,178,019
Property, plant and equipment	9	20,634	20,973
Trading properties	10, 22	13,415	12,472
Intangible assets	11	35,882	16,420
Right-of-use assets	12	6,242	6,066
Investments in associates and joint ventures	7	81,531	76,617
Deferred income tax assets	19	3,590	1,777
Income tax credit		23	43
Trade and other receivables	13, 14	12,534	9,170
Investments in financial assets	13	6,648	3,972
Total non-current assets		1,466,348	1,325,529
Current assets
Trading properties	10, 22	371	298
Inventories	22	587	684
Income tax credit		320	1,507
Trade and other receivables	13, 14	65,241	53,475
Investments in financial assets	13	102,292	71,118
Cash and cash equivalents	13	16,035	18,052
Total current assets		184,846	145,134
TOTAL ASSETS		1,651,194	1,470,663
SHAREHOLDERS’ EQUITY
Shareholders' equity attributable to equity holders of the parent (according to corresponding statement)		788,455	748,240
Non-controlling interest		49,267	46,151
TOTAL SHAREHOLDERS’ EQUITY		837,722	794,391
LIABILITIES
Non-current liabilities
Borrowings	13, 17	202,927	139,136
Lease liabilities		8,178	5,463
Deferred income tax liabilities	19	393,115	342,431
Trade and other payables	13, 16	25,787	20,332
Provisions	18	18,678	12,233
Salaries and social security liabilities		100	186
Total non-current liabilities		648,785	519,781
Current liabilities
Borrowings	13, 17	113,427	83,942
Lease liabilities		1,378	772
Trade and other payables	13, 16	40,846	62,114
Income tax liabilities		4,091	2,176
Provisions	18	1,588	1,744
Derivative financial instruments	13	11	12
Salaries and social security liabilities		3,346	5,731
Total current liabilities		164,687	156,491
TOTAL LIABILITIES		813,472	676,272
TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES		1,651,194	1,470,663

 

 

 

		Six months		Three months
	Note	12.31.2023	12.31.2022	12.31.2023	12.31.2022
Revenues	20	101,457	96,193	54,359	53,574
Costs	21, 22	(32,756)	(32,632)	(17,430)	(17,056)
Gross profit		68,701	63,561	36,929	36,518
Net gain / (loss) from fair value adjustment of investment properties	8	137,822	(91,958)	(18,980)	(67,743)
General and administrative expenses	21	(6,821)	(12,294)	(7,449)	(6,711)
Selling expenses	21	(5,725)	(4,030)	(3,257)	(2,229)
Other operating results, net	23	(698)	(9,532)	(63)	(10,225)
Profit / (loss) from operations		193,279	(54,253)	7,180	(50,390)
Share of profit of associates and joint ventures	7	19,926	4,104	16,528	607
Profit / (loss) before financial results and income tax		213,205	(50,149)	23,708	(49,783)
Finance income	24	4,768	838	4,189	623
Finance costs	24	(15,109)	(16,112)	(8,792)	(9,361)
Other financial results	24	(33,873)	7,926	(30,257)	7,141
Inflation adjustment	24	32,560	26,831	22,581	10,429
Financial results, net		(11,654)	19,483	(12,279)	8,832
Profit / (loss) before income tax		201,551	(30,666)	11,429	(40,951)
Income tax expense	19	(54,958)	78,738	10,880	84,287
Profit for the period		146,593	48,072	22,309	43,336
Other comprehensive loss:
Items that may be reclassified subsequently to profit or loss:
Currency translation adjustment and other comprehensive loss from subsidiaries (i)		(4,436)	(1,230)	(3,921)	(280)
Revaluation deficit		-	(544)	-	(544)
Total other comprehensive loss for the period		(4,436)	(1,774)	(3,921)	(824)
Total comprehensive income for the period		142,157	46,298	18,388	42,512
Profit / (loss) for the period attributable to:
Equity holders of the parent		141,519	46,992	23,422	42,749
Non-controlling interest		5,074	1,080	(1,113)	587
Total comprehensive income / (loss) attributable to:
Equity holders of the parent		136,611	45,210	19,014	41,862
Non-controlling interest		5,546	1,088	(626)	650
Profit per share attributable to equity holders of the parent: (ii)
Basic		189.45	62.66	31.35	57.00
Diluted		189.70	63.93	31.40	58.16

 

 

 

	Attributable to equity holders of the parent
	Share capital
	Outstanding shares	Shares to issue (iv)	Treasury shares	Inflation adjustment of share capital and treasury shares (i)	Warrants (ii)	Share premium	Additional paid-in capital from treasury shares	Legal reserve	Special reserve Resolution CNV 609/12	Other reserves (v)	Retained earnings	Subtotal	Non-controlling interest	Total Shareholders’ equity
Balance as of June 30, 2023	799	6,553	12	178,219	12,949	264,576	1,037	20,741	103,170	24,315	135,869	748,240	46,151	794,391
Net profit for the period	-	-	-	-	-	-	-	-	-	-	141,519	141,519	5,074	146,593
Other comprehensive (loss) / income for the period	-	-	-	-	-	-	-	-	-	(4,908)	-	(4,908)	472	(4,436)
Total comprehensive (loss) / income for the period	-	-	-	-	-	-	-	-	-	(4,908)	141,519	136,611	5,546	142,157
Assignment of results according to Shareholders´ Meeting	-	-	-	-	-	-	-	5,926	-	22,014	(27,940)	-	-	-
Repurchase of treasury shares (iii)	(168)	-	168	-	-	-	-	-	-	(5,879)	-	(5,879)	-	(5,879)
Warrants exercise (ii)	4	-	-	-	(63)	135	-	-	-	-	-	76	-	76
Issuance of shares	6,640	(6,553)	(87)	-	-	-	(3,850)	-	-	3,850	-	-	-	-
Capitalization of irrevocable contributions	-	-	-	-	-	-	-	-	-	-	-	-	31	31
Dividend distribution (iv)	-	-	-	-	-	-	-	-	-	-	(90,585)	(90,585)	(2,469)	(93,054)
Reserve for share-based payments	1	-	(1)	-	-	-	(52)	-	-	52	-	-	-	-
Changes in non-controlling interest	-	-	-	-	-	-	-	-	-	(8)	-	(8)	8	-
Balance as of December 31, 2023	7,276	-	92	178,219	12,886	264,711	(2,865)	26,667	103,170	39,436	158,863	788,455	49,267	837,722

 

(i) Includes ARS 13 of Inflation adjustment of treasury shares. See Note 17 to the Annual Consolidated Financial Statements as of June 30,2023.

(ii) As of December 31, 2023, the remaining warrants to exercise amount to 79,319,038. See Note 28 to these Financial Statements.

(iii) Related to the Shares Buyback Program approved by the Board on June 15, 2023. As of December 31, 2023 the Company has bought 7,839,874 shares. See Note 28 to these Financial Statements.

(iv) See Note 28 to these Financial Statements.

(v) Group´s other reserves for the period ended December 31, 2023 are comprised as follows:

 

	Cost of treasury stock	Reserve for future dividends	Currency translation adjustment reserve	Special reserve	Other reserves (1)	Total Other reserves
Balance as of June 30, 2023	(6,870)	18,568	390	64,295	(52,068)	24,315
Other comprehensive loss for the period	-	-	(4,908)	-	-	(4,908)
Total comprehensive loss for the period	-	-	(4,908)	-	-	(4,908)
Assignment of results according to Shareholders´ Meeting	-	22,014	-	-	-	22,014
Repurchase of treasury shares	(5,879)	-	-	-	-	(5,879)
Issuance of shares	3,850	-	-	-	-	3,850
Reserve for share-based payments	54	-	-	-	(2)	52
Changes in non-controlling interest	-	-	-	-	(8)	(8)
Balance as of December 31, 2023	(8,845)	40,582	(4,518)	64,295	(52,078)	39,436

 

 

 

 

 

 

	Attributable to equity holders of the parent
	Share capital
	Outstanding shares	Treasury shares	Inflation adjustment of share capital and treasury shares (i)	Warrants	Share premium	Additional paid-in capital from treasury shares	Legal reserve	Special reserve Resolution CNV 609/12	Other reserves (ii)	Retained earnings	Subtotal	Non-controlling interest	Total Shareholders’ equity
Balance as of June 30, 2022	805	6	155,578	12,990	293,670	1,084	13,888	103,170	(27,860)	154,408	707,739	48,447	756,186
Net profit for the period	-	-	-	-	-	-	-	-	-	46,992	46,992	1,080	48,072
Other comprehensive (loss) / income for the period	-	-	-	-	-	-	-	-	(1,782)	-	(1,782)	8	(1,774)
Total comprehensive (loss) / income for the period	-	-	-	-	-	-	-	-	(1,782)	46,992	45,210	1,088	46,298
Assignment of results according to Shareholders´ Meeting	-	-	-	-	-	-	6,853	-	114,359	(121,212)	-	-	-
Repurchase of treasury shares	(5)	5	-	-	-	-	-	-	(2,512)	-	(2,512)	-	(2,512)
Warrants exercise	-	-	-	(2)	9	-	-	-	-	-	7	-	7
Dividend distribution	-	-	-	-	-	-	-	-	-	(19,336)	(19,336)	(473)	(19,809)
Reserve for share-based payments	-	-	-	-	-	(9)	-	-	9	-	-	-	-
Other changes in equity	-	-	-	-	-	-	-	-	(1,350)	-	(1,350)	-	(1,350)
Changes in non-controlling interest	-	-	-	-	-	-	-	-	(50)	-	(50)	50	-
Balance as of December 31, 2022	800	11	155,578	12,988	293,679	1,075	20,741	103,170	80,814	60,852	729,708	49,112	778,820

 

(i) Includes ARS 8 of Inflation adjustment of treasury shares. See Note 17 to the Annual Financial Statements.

(ii) Group’s other reserves for the period ended December 31, 2022 are comprised as follows:

 

	Cost of treasury stock	Reserve for future dividends	Currency translation adjustment reserve	Special reserve	Other reserves (1)	Total Other reserves
Balance as of June 30, 2022	(3,313)	18,568	2,246	5,963	(51,324)	(27,860)
Other comprehensive loss for the period	-	-	(1,237)	-	(545)	(1,782)
Total comprehensive loss for the period	-	-	(1,237)	-	(545)	(1,782)
Assignment of results according to Shareholders' Meeting	-	-	-	114,359	-	114,359
Repurchase of treasury shares	(2,512)	-	-	-	-	(2,512)
Reserve for share-based payments	13	-	-	-	(4)	9
Other changes in equity	-	-	(1,350)	-	-	(1,350)
Changes in non-controlling interest	-	-	-	-	(50)	(50)
Balance as of December 31, 2022	(5,812)	18,568	(341)	120,322	(51,923)	80,814

 

 

 

 

 

	Note	12.31.2023	12.31.2022
Operating activities:
Net cash generated from operating activities before income tax paid	15	36,122	34,642
Income tax paid		(2,577)	(1,507)
Net cash generated from operating activities		33,545	33,135
Investing activities:
Acquisition and improvements of investment properties		(3,272)	(4,120)
Proceeds from sales of investment properties		25,659	6,627
Acquisitions and improvements of property, plant and equipment		(856)	(729)
Proceeds from sales of property, plant and equipment		2	28
Acquisitions of intangible assets		(156)	(125)
Dividends collected from associates and joint ventures		245	660
Proceeds from sales of interest held in associates and joint ventures		13,015	-
Payments of derivative financial instruments		-	(31)
Acquisitions of investments in financial assets		(95,777)	(23,371)
Proceeds from disposal of investments in financial assets		111,112	31,231
Interest received from financial assets		1,126	328
Proceeds from loans granted to related parties		622	-
Increase of loans granted to related parties		(99)	-
Net cash generated from investing activities		51,621	10,498
Financing activities:
Borrowings, issuance and new placement of non-convertible notes		4,424	1,386
Payment of borrowings and non-convertible notes		(11,371)	(42,613)
Obtaining / (payments) of short term loans, net		28,249	(10,030)
Interests paid		(17,661)	(14,760)
Capital contributions from non-controlling interest in subsidiaries		31	-
Payment of borrowings to related parties		-	(56)
Borrowings obtained from related parties		-	16
Dividends paid		(88,003)	(13,415)
Warrants exercise		76	6
Payment of financial leases		(144)	(37)
Repurchase of treasury shares		(5,879)	(2,512)
Net cash used in financing activities		(90,278)	(82,015)
Net decrease in cash and cash equivalents		(5,112)	(38,382)
Cash and cash equivalents at the beginning of the period	13	18,052	56,921
Inflation adjustment		(4,458)	(707)
Foreign exchange gain on cash and unrealized fair value result for cash equivalents		7,553	(153)
Cash and cash equivalents at end of the period	13	16,035	17,679

 

 

(Amounts in millions of Argentine pesos, except otherwise indicated)

 

 

These Financial Statements have been approved for issuance by the Board of Directors, on February 5, 2024.

 

IRSA was founded in 1943, and it has engaged in diverse 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 shareholders are Inversiones Financieras del Sur S.A., Agroinvestment S.A. and Consultores Venture Capital Uruguay S.A., and whose final beneficiary is Eduardo Sergio Elsztain.

 

As of the end of these Consolidated Financial Statements, the Group owns 15 shopping malls, 5 office buildings, three hotels and an extensive land reserve for future mixed-use developments. Additionally, the Group holds a 29.91% interest in Banco Hipotecario S.A. (BHSA), which is a leading commercial bank in the provision of mortgaged loans in Argentina. BHSA's shares are listed on the BYMA.

 

The Group 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.

 

Likewise, the Group manages a 5 office buildings portfolio and has majority stakes in three luxury hotels including the Libertador and Intercontinental hotels in the Autonomous City of Buenos Aires and the exclusive Llao Llao resort, in the city of San Carlos de Bariloche, in southern Argentina. Additionally, the Group participates in the development of residential properties for sale, as well as in other investments.

 

 

The Group operated in an economic context whose main variables have shown strong volatility. The main ones are detailed below:

 

 

On December 10, 2023 a new government took office in Argentina with plans to carry out extensive reforms of laws and regulations.

 

 

 

Among its first measures, the new government issued a Decree of Necessity and Urgency (DNU, by its Spanish acronym) modifying several laws, introducing reforms in the labor market, customs code, and the status of public companies, among others. Although the DNU must be discussed and ratified by at least one chamber of the National Congress, its provisions have been partially in force since December 29, 2023, considering a series of judicial actions that have granted the suspension of certain modifications.

 

Additionally, the National Congress was called to extraordinary sessions to consider a series of legislative initiatives, including an “Omnibus Law”.

 

The regulatory and legislative situation as of December 31, 2023, does not substantially differ from that established by the previous government. The company's financial statements should be read considering these circumstances.

 

 

 

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, 2023 prepared in accordance with IFRS Accounting Standards. 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 Accounting Standards.

 

These financial statements for the interim periods of six months ended December 31, 2023 and 2022 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 exceeds 100%. Accumulated inflation in Argentina in three years is over 100%. For that reason, in accordance with IAS 29, Argentina must be considered a country with a highly inflationary economy starting July 1, 2018.

 

In relation to the inflation index to be used and in accordance with Argentine Federation of Professional Councils in Economic Sciences (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 between the last fiscal year and as of December 31, 2023, and for the 12-month period ending on the same date, according to official statistics (INDEC) and following the guidelines described in Resolution 539/18.

 

	As of December 31, 2023 (six months)	As of December 31, 2023 (twelve months)
Price variation	107%	211%

 

 

 

As a consequence of the aforementioned, these financial statements as of December 31, 2023 were restated in accordance with IAS 29.

 

 

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.

 

 

 

Balance items as of June 30, 2023 and December 31, 2022 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.

 

 

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.

 

 

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.

 

 

Significant acquisitions and disposals for the six-month period ended December 31, 2023 are detailed below. Significant acquisitions and disposals for the fiscal year ended June 30, 2023, are detailed in Note 4 to the Annual Financial Statements.

 

 

On July 24, 2023, IRSA signed the deed for the sale of all the functional and complementary units of the “Maple Building” located at 664 Suipacha Street in the Autonomous City of Buenos Aires. The price of the operation was USD 6.75 million, of which USD 3 million has been collected in cash, USD 750,000 through the delivery of 3 functional units in a building owned by the buyer at Avenida Córdoba 637 in the Autonomous City of Buenos Aires, with a bailment agreement for 30 months and the remaining balance of USD 3 million will be paid as follows:

 

- USD 2.5 million in 10 semiannual, equal and consecutive installments of USD 250,000, the first due 24 months from the signing of the deed, with an annual interest of 5%; - USD 0.5 million through the provision of services by the buyer, which were valued at the CCL exchange rate according to the conditions agreed in the contract.

 

 

 

 

 

On August 9, 2023, IRSA signed the deed for the sale of the 9th floor of the "261 Della Paolera" tower located in the Catalinas neighborhood of the Autonomous City of Buenos Aires with a total of 1,184 square meters, 10 parking spaces, and 2 complementary units of the same building. The transaction price was approximate USD (MEP) 6.3 million, which had already been paid in ARS.

 

On October 5, 2023, the transfer deed was signed for the sale of the 25th and 26th floors of the “261 Della Paolera” tower located in the Catalinas neighborhood of the Autonomous City of Buenos Aires for a total of 2,395 square meters, 18 units of garages and 6 complementary units of the same building. The transaction price was approximately USD (MEP) 14.9 million, all of which were paid in full in ARS.

 

 

 

On August 31, 2023, IRSA sold and transferred 100% of its participation in Quality Invest S.A. representing 50% of the share capital. The amount of the transaction amounted to USD 22.9 million, of which USD 21.5 million has been collected together with the transfer of the shares and the balance of USD 1.4 million will be collected after 3 years, accruing an interest of 7% per year.

 

 

On October 31, 2023, Vista al Muelle S.A. (VAM), a subsidiary of Liveck S.A., sold two of its plots in the department of Canelones (Uruguay) to the Boating Trust for USD 6 million. In the same transaction, the trust sold units in Tower II to VAM for USD 5 million, which VAM used to fully settle its debt with the Chamyan family. The operation resulted in a profit of USD 1 million.

 

 

On December 7, 2023, the Company signed a barter agreement transferring the “Ezpeleta land plot” of 46 hectares, located in the district of Quilmes, Buenos Aires province.

 

 

The transaction price was set at USD 16.4 million and will be paid to IRSA through the delivery of 125 single-family lots of the project and also 40% of the buildable square meters of the multifamily lots of said project.

 

 

 

During the months of November and December 2023, IRSA sold 1,583,560 common-shares of GCDI, equivalent to 0.17% of the capital share, for a total of ARS 25.5 million.

 

 

 

 

 

On November 10, 2023, the Company executed a Trust Administration Contract at cost for a project development and construction of a residential building, stores (gastronomic use), and complementary parking spaces, which is subject to fulfillment of certain suspensive conditions detailed below, and in which the Company will have the character of money trustor. Likewise, and as beneficiary of the trust, IRSA will receive approximately 5,128 salable square meters and 32 parking spaces. TMF Trust Company (Argentina) S.A., a company with a fiduciary purpose that is not a related party, will act as trustee.

 

The aforementioned trust contract involves the contribution of a building owned by Banco Hipotecario S.A. (“BHSA”), an entity in which the Company holds a significant interest. The building is located in the block embraced by the streets Carlos Pellegrini, Presidente Perón, Sarmiento and Pasaje Carabelas, in the City of Buenos Aires. The contribution was made on December 28, 2023.

 

 

 

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, 2023 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).

 

 

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.

 

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 six-month periods ended December 31, 2023 and 2022:

 

	12.31.2023
	Total	Joint ventures (1)	Expenses and collective promotion funds	Elimination of inter-segment transactions and non-reportable assets / liabilities (2)	Total as per statement of income / statement of financial position
Revenues	84,304	(457)	17,610	-	101,457
Costs	(14,828)	56	(17,984)	-	(32,756)
Gross profit / (loss)	69,476	(401)	(374)	-	68,701
Net gain from fair value adjustment of investment properties	138,962	(1,140)	-	-	137,822
General and administrative expenses	(6,955)	54	-	80	(6,821)
Selling expenses	(5,766)	41	-	-	(5,725)
Other operating results, net	(758)	(7)	147	(80)	(698)
Profit / (loss) from operations	194,959	(1,453)	(227)	-	193,279
Share of profit / (loss) of associates and joint ventures	18,970	956	-	-	19,926
Segment profit / (loss)	213,929	(497)	(227)	-	213,205
Reportable assets	1,429,905	3,462	-	217,827	1,651,194
Reportable liabilities (i)	-	-	-	(813,472)	(813,472)
Net reportable assets	1,429,905	3,462	-	(595,645)	837,722

 

 

 

 

	12.31.2022
	Total	Joint ventures (1)	Expenses and collective promotion funds	Elimination of inter-segment transactions and non-reportable assets / liabilities (2)	Total as per statement of income / statement of financial position
Revenues	77,591	(430)	19,032	-	96,193
Costs	(13,436)	196	(19,392)	-	(32,632)
Gross profit / (loss)	64,155	(234)	(360)	-	63,561
Net loss from fair value adjustment of investment properties	(94,114)	2,156	-	-	(91,958)
General and administrative expenses	(12,407)	63	-	50	(12,294)
Selling expenses	(4,057)	27	-	-	(4,030)
Other operating results, net	(9,610)	(44)	172	(50)	(9,532)
Loss from operations	(56,033)	1,968	(188)	-	(54,253)
Share of profit of associates and joint ventures	5,409	(1,305)	-	-	4,104
Segment (loss) / profit	(50,624)	663	(188)	-	(50,149)
Reportable assets	1,359,479	(8,225)	-	172,252	1,523,506
Reportable liabilities (i)	-	-	-	(744,691)	(744,691)
Net reportable assets	1,359,479	(8,225)	-	(572,439)	778,815

 

(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). Includes deferred income tax assets, income tax 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 6 as of December 31, 2023.

 

(i) The CODM focuses its review on reportable assets.

 

Below is a summarized analysis of the segments from the Group for the periods ended December 31, 2023 and 2022:

 

	12.31.2023
	Shopping Malls	Offices	Sales and developments	Hotels	Others (i)	Total
Revenues	56,210	3,512	4,527	18,871	1,184	84,304
Costs	(2,909)	(284)	(2,459)	(8,372)	(804)	(14,828)
Gross profit	53,301	3,228	2,068	10,499	380	69,476
Net gain / (loss) from fair value adjustment of investment properties	152,015	466	(13,889)	-	370	138,962
General and administrative expenses	(6,475)	(533)	(2,572)	(2,734)	5,359	(6,955)
Selling expenses	(2,466)	(115)	(1,705)	(1,286)	(194)	(5,766)
Other operating results, net	(549)	(58)	(994)	(141)	984	(758)
Profit / (loss) from operations	195,826	2,988	(17,092)	6,338	6,899	194,959
Share of profit of associates and joint ventures	-	-	-	-	18,970	18,970
Segment profit / (loss)	195,826	2,988	(17,092)	6,338	25,869	213,929
Investment properties and trading properties	534,349	222,074	540,904	-	2,312	1,299,639
Investment in associates and joint ventures	-	-	-	-	77,950	77,950
Other operating assets	1,381	220	29,985	17,746	2,984	52,316
Reportable assets	535,730	222,294	570,889	17,746	83,246	1,429,905

 

 

 

 

 

	12.31.2022
	Shopping Malls	Offices	Sales and developments	Hotels	Others (i)	Total
Revenues	49,181	5,092	6,764	15,480	1,074	77,591
Costs	(3,179)	(395)	(1,554)	(7,449)	(859)	(13,436)
Gross profit	46,002	4,697	5,210	8,031	215	64,155
Net loss from fair value adjustment of investment properties	(18,364)	(24,707)	(50,890)	-	(153)	(94,114)
General and administrative expenses	(6,048)	(710)	(2,242)	(2,236)	(1,171)	(12,407)
Selling expenses	(2,283)	(65)	(436)	(1,158)	(115)	(4,057)
Other operating results, net	358	(44)	(9)	(75)	(9,840)	(9,610)
Profit / (loss) from operations	19,665	(20,829)	(48,367)	4,562	(11,064)	(56,033)
Share of profit of associates and joint ventures	-	-	-	-	5,409	5,409
Segment profit / (loss)	19,665	(20,829)	(48,367)	4,562	(5,655)	(50,624)
Investment properties and trading properties	390,667	281,737	584,167	-	1,756	1,258,327
Investment in associates and joint ventures	-	-	-	-	56,848	56,848
Other operating assets	1,186	3,821	14,327	18,445	6,525	44,304
Reportable assets	391,853	285,558	598,494	18,445	65,129	1,359,479

 

 

Changes in the Group’s investments in associates and joint ventures for the six-month period ended December 31, 2023 and for the year ended June 30, 2023 were as follows:

 

	12.31.2023	06.30.2023
Beginning of the period / year	76,615	71,848
Sale of interest in associates and joint ventures (i)	(14,462)	-
Capital contributions	-	114
Share of profit	19,926	5,419
Currency translation adjustment	(309)	(107)
Dividends (Note 25)	(245)	(659)
End of the period / year (ii)	81,525	76,615

 

(i) As of December 31, 2023, corresponds to the sale of interest in Quality Invest S.A. and GCDI S.A. (former TGLT S.A.).

(ii) As of December 31, 2023 and June 30, 2023 includes ARS (6) and ARS (2) respectively, reflecting interests in companies with negative equity, which were disclosed in “Provisions” (Note 18).

 

	% ownership interest		Value of Group's interest in equity		Group's interest in comprehensive income / (loss)
Name of the entity	12.31.2023	06.30.2023	12.31.2023	06.30.2023	12.31.2023	06.30.2023
Associates and joint ventures
New Lipstick	49.96%	49.96%	945	502	327	6
BHSA	29.91%	29.91%	62,256	49,430	12,826	3,893
Quality (1)	-	50.00%	-	14,440	-	(1,526)
La Rural SA	50.00%	50.00%	8,595	2,509	6,085	1,585
GCDI (2)	27.94%	27.82%	2,772	3,958	(1,165)	(44)
Other joint ventures	N/A	N/A	6,957	5,776	1,544	258
Total associates and joint ventures			81,525	76,615	19,617	4,172

 

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)		(Loss) / profit for the period		Shareholders’ equity
Associates and joint ventures
New Lipstick	USA	Real estate	23,631,037	(*)	47	(*)	(1)	(*)	(46)
BHSA	Argentina	Financial	448,689,072	(**)	1,500	(**)	42,877	(**)	203,407
La Rural SA	Argentina	Organization of events	715		1		12,245		16,811
GCDI (2)	Argentina	Real estate	255,747,035		915		(1,637)		9,918

 

(1) Interest in Quality Invest S.A. was sold on August 31, 2023. See note 4 to these Financial Statements.

(2) See note 8 to the Annual Financial Statements as of June 30, 2023. See note 4 to these Financial Statements.

 

 

 

 

 

There have been no changes to what was informed in Note 8 to the Annual Financial Statements. See note 28 regarding the extension of the concession contract of La Rural S.A.

 

 

Regarding the information provided in Note 7 to the Annual Financial Statements as of June 30, 2023, the following should be noted:

 

 

(i): This process was initiated on June 18, 2015, by AGSA to raise the nullity of the revocation of the contract for the readjustment of the use and exploitation concession, established by Resolution No. 170/2014 by the Agencia de Administración de Bienes del Estado (State Assets Administration Office, or AABE in Spanish). Evidence was produced, and arguments were presented.

 

On August 24, 2022, the Court rejected the lawsuit filed by Arcos del Gourmet SA, with costs. On August 26, 2022, Arcos del Gourmet S.A. appealed the final judgment issued in the case. On September 19, 2023, Chamber V of the Federal Administrative Litigation Court issued a judgment rejecting the appeal filed by Arcos del Gourmet SA.

 

The judgment of the Court was appealed to the Supreme Court of Justice of the Nation through an extraordinary federal appeal filed on October 17, 2023. The legal advisors of the Company believe that this appeal has reasonable prospects of success, as there is federal subject matter to enable the intervention of the Supreme Court.

 

(i.a.) INCIDENT NO. 1 - PLAINTIFF: ARCOS DEL GOURMET SA DEFENDANT: EN-AABE AND OTHERS REGARDING A PRECAUTIONARY MEASURE (CAF 030002/2015/1)

 

On March 1, 2019, a request was made for the issuance of a precautionary measure aimed at "ordering AABE to suspend any judicial or administrative eviction procedure, by which it intends to forcibly execute Resolution AABE No. 170/2014, until a final judgment is issued in the nullity lawsuit brought on its basis", particularly the case titled "Playas Ferroviarias de Buenos Aires SA v. Arcos del Gourmet SA regarding Eviction Law 17,901" (File No. CAF 47454/2018). On May 6, 2021, an extension of the precautionary measure was granted. Against this resolution, Playas Ferroviarias and AABE filed an appeal. On September 7, 2021, the Chamber ruled in favor of the appeals filed by AABE and Playas Ferroviarias. Against this resolution, AGSA filed an extraordinary federal appeal on September 21, 2021. On November 17, 2021, the Chamber issued a judgment denying the extraordinary appeal filed by AGSA with costs, arguing that the attempted appeal was not directed at a final judgment or equivalent resolution.

 

 

On April 8, 2015, AGSA initiated this lawsuit since AGSA was not allowed to pay the March 2015 canon corresponding to the Readjustment Contract of Use and Exploitation that Arcos agreed with ADIF. To date, all the canons that have been accrued to date have been judicially deposited - and those amounts invested in fixed-term deposits. On November 17, 2017, ADIF answered the lawsuit. The trial opened for evidence on March 21, 2019, which was produced, and arguments were presented in December 2022.

 

 

 

 

 

 

On June 14, 2018, Playas Ferroviarias de Buenos Aires S.A. initiated an eviction process against AGSA. On February 13, 2019, it was decided to accumulate the eviction process with the nullity action promoted by AGSA (referred to in the preceding 1.A). On May 11, 2022, the Court ruled to decree the immediate eviction of AGSA and/or occupants and/or intruders of the properties. At the same time, it ordered Playas Ferroviarias de Buenos Aires S.A. to make arrangements to ensure the continuity of the commercial activities of the sub-lessees and the employment sources they employ and, for at least 6 months, the values agreed upon with the current concessionaire must be maintained. The next day, AGSA appealed. Finally, on July 13, 2022, the Prosecutor published the opinion. As a result of the opinion, Chamber V ordered the transfer of the case to judgment. Chamber V issued its judgment on September 19, 2023, rejecting the appeal filed by AGSA and confirming the judgment of the lower court. Against this judgment, AGSA filed an extraordinary federal appeal, which has not yet been resolved.

 

 

Federación de Comercio e Industria de la Ciudad de Buenos Aires (Federation of Commerce and Industry of the City of Buenos Aires, or FECOBA in Spanish) argued that the project executed in DISTRICT ARCOS did not have the necessary environmental approvals and did not comply with zoning guidelines. It also requested a precautionary measure, which was admitted and caused the opening to the public to be delayed until December 18, 2014, which now operates normally. In the main process, after the filing of several procedural appeals, Chamber III of the Appeals Court issued a judgment on February 14, 2019, as follows: AGSA and GCBA were convicted, with AGSA being required to allocate at least 23,319.41 square meters for public use and utility with unrestricted access and special and preferential allocation to the generation of new park-like green spaces - located wholly or partially on the property subject to the lawsuit (Distrito Arcos) or adjacent lands. In case the company cannot allocate the entire land fraction to the City of Buenos Aires, then it must pay, after a valuation, the necessary amount of money so that the Administration proceeds to search for a property to fulfill the purpose established during the term of the concession contract. If none of the mentioned alternatives are carried out by AGSA, the demolition of the necessary works on the property to comply with the stipulated in the Urban Planning Code (art. 3.1.2) would be ordered. Subsequently, within the framework of the appeal for constitutional review denied filed by AGSA against the aforementioned judgment, the Superior Court of Justice ruled that the demolition of the works carried out on the property where the "Distrito Arcos" Shopping Center is currently located, as ordered by the Chamber, is not appropriate, confirming the rest of the sentence. Our legal advisors are analyzing the procedural steps to follow.

 

 

Changes in the Group’s investment properties for the six-month period ended December 31, 2023 and for the year ended June 30, 2023 were as follows:

 

	12.31.2023		06.30.2023
	Level 2	Level 3	Level 2	Level 3
Fair value at the beginning of the period / year	812,416	365,603	929,193	377,524
Additions	1,264	2,356	6,855	5,603
Capitalized leasing costs	3	41	29	105
Amortization of capitalized leasing costs (i)	(40)	(60)	(37)	(35)
(Disposals) / Transfers	(33,850)	(2)	(41,439)	1,823
Currency translation adjustment	296	-	(37)	-
Net (loss) / gain from fair value adjustment (ii)	(10,729)	148,551	(82,148)	(19,417)
Fair value at the end of the period / year	769,360	516,489	812,416	365,603

 

 

 

 

The following is the balance by type of investment property of the Group for the six-month period ended December 31, 2023 and for the year ended June 30, 2023:

 

	12.31.2023	06.30.2023
Shopping Malls (i)	534,344	383,498
Offices and other rental properties	246,122	273,750
Undeveloped parcels of land	503,680	519,532
Properties under development	253	161
Others	1450	1078
Total	1,285,849	1,178,019

 

 

The following amounts have been recognized in the Statements of Income and Other Comprehensive Income:

 

	12.31.2023	12.31.2022
Revenues (Note 20)	78,799	74,448
Direct operating costs	(22,154)	(23,894)
Development costs	(409)	(240)
Net realized gain from fair value adjustment of investment properties (i)	17,330	3,429
Net unrealized gain / (loss) from fair value adjustment of investment properties (ii)	120,492	(95,387)

 

 

Valuation techniques are described in Note 9 to the Annual Financial Statements. There were no changes to such techniques.

 

 

On December 21, 2021, 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 866,806 sqm, which will drive growth for the coming years through the development of mixed-use projects.

 

IRSA agreed to give in 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, and the sum of USD 2 million in cash and the amount of 3,000,000 sovereign bonds (AL35) which have already been paid.

 

In March 2023, Mensura was approved with a proposal for subdivision, fractioning, transfer of streets and public space and we are in the process of deeding the 3 plots and the public park sector that is transferred for consideration.

 

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 the judicial front, it should be noted that there are two (2) related judicial processes:

 

 

 

 

 

 

Changes in the Group’s property, plant and equipment for the six-month period ended December 31, 2023 and for the year ended June 30, 2023 were as follows:

 

	Buildings and facilities	Machinery and equipment	Others (i)	12.31.2023	06.30.2023
Costs	46,973	19,197	4,364	70,534	82,481
Accumulated depreciation	(27,978)	(18,174)	(3,409)	(49,561)	(46,883)
Net book amount at the beginning of the period / year	18,995	1,023	955	20,973	35,598
Additions	520	178	158	856	1,639
Disposals	-	(3)	-	(3)	(6,994)
Currency translation adjustment	-	-	22	22	(6)
Transfers	-	6	-	6	(6,586)
Depreciation charges (ii)	(905)	(220)	(95)	(1,220)	(2,678)
Balances at the end of the period / year	18,610	984	1,040	20,634	20,973
Costs	47,493	19,378	4,544	71,415	70,534
Accumulated depreciation	(28,883)	(18,394)	(3,504)	(50,781)	(49,561)
Net book amount at the end of the period / year	18,610	984	1,040	20,634	20,973

 

 

 

 

Changes in the Group’s trading properties for the six-month period ended December 31, 2023 and for the year ended June 30, 2023 were as follows:

 

 

	Completed properties	Properties under development	Undeveloped properties	12.31.2023	06.30.2023
Beginning of the period / year	1,228	6,703	4,839	12,770	14,410
Additions	-	189	24	213	655
Currency translation adjustment	-	2,378	-	2,378	30
Transfers	-	-	-	-	(893)
Disposals	(23)	(1,552)	-	(1,575)	(1,432)
End of the period / year	1,205	7,718	4,863	13,786	12,770
Non-current				13,415	12,472
Current				371	298
Total				13,786	12,770

 

 

 

 

Changes in the Group’s intangible assets for the six-month period ended December 31, 2023 and for the year ended June 30, 2023 were as follows:

 

	Goodwill	Information systems and software	Future units to be received from barters and others	12.31.2023	06.30.2023
Costs	984	6,171	17,221	24,376	22,235
Accumulated amortization	-	(5,654)	(2,302)	(7,956)	(7,181)
Net book amount at the beginning of the period / year	984	517	14,919	16,420	15,054
Additions	3	152	4,392	4,547	2,924
Disposals	-	-	(132)	(132)	(370)
Transfers	-	-	15,248	15,248	(413)
Currency translation adjustment	3	-	-	3	-
Amortization charges (i)	-	(195)	(9)	(204)	(775)
Balances at the end of the period / year	990	474	34,418	35,882	16,420
Costs	990	6,323	36,729	44,042	24,376
Accumulated amortization	-	(5,849)	(2,311)	(8,160)	(7,956)
Net book amount at the end of the period / year	990	474	34,418	35,882	16,420

 

 

 

 

The Group’s right-of-use assets as of December 31, 2023 and June 30, 2023 are the following:

 

	12.31.2023	06.30.2023
Offices, shopping malls and other rental properties	1,278	945
Convention center	4,964	5,121
Total Right-of-use assets	6,242	6,066
Non-current	6,242	6,066
Total	6,242	6,066

 

 

The depreciation charge of the right-of use-assets is detailed below:

 

	12.31.2023	12.31.2022
Offices, shopping malls and other rental properties	122	66
Convention center	155	105
Total depreciation of right-of-use assets (i)	277	171

 

 

 

 

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 14 to the Annual Financial Statements. Financial assets and financial liabilities as of December 31, 2023 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
December 31, 2023
Assets as per Statements of Financial Position
Trade and other receivables (excluding the allowance for doubtful accounts and other receivables) (Note 14)	65,690	-	65,690	14,467	80,157
Investments in financial assets:
- Public companies’ securities	-	13,871	13,871	-	13,871
- Mutual funds	-	52,214	52,214	-	52,214
- Bonds	-	36,207	36,207	-	36,207
- Others	2,605	4,043	6,648	-	6,648
Cash and cash equivalents:
- Cash at bank and on hand	13,605	-	13,605	-	13,605
- Short-term investments	-	2,430	2,430	-	2,430
Total assets	81,900	108,765	190,665	14,467	205,132

 

 

	Financial liabilities at amortized cost	Financial liabilities at fair value through profit or loss	Subtotal financial liabilities	Non-financial liabilities	Total
		Level 1
December 31, 2023
Liabilities as per Statements of Financial Position
Trade and other payables (Note 16)	27,945	-	27,945	38,688	66,633
Borrowings (Note 17)	316,354	-	316,354	-	316,354
Derivative financial instruments:
- Bond futures	-	11	11	-	11
Total liabilities	344,299	11	344,310	38,688	382,998

 

Financial assets and financial liabilities as of June 30, 2023 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
June 30, 2023
Assets as per Statements of Financial Position
Trade and other receivables (excluding the allowance for doubtful accounts and other receivables) (Note 14)	49,914	-	49,914	15,199	65,113
Investments in financial assets:
- Public companies’ securities	-	10,428	10,428	-	10,428
- Mutual funds	-	41,647	41,647	-	41,647
- Bonds	-	19,044	19,044	-	19,044
- Others	1,297	2,674	3,971	-	3,971
Cash and cash equivalents:
- Cash at bank and on hand	10,858	-	10,858	-	10,858
- Short term investments	-	7,194	7,194	-	7,194
Total assets	62,069	80,987	143,056	15,199	158,255

 

 

 

 

	Financial liabilities at amortized cost	Financial liabilities at fair value through profit or loss	Subtotal financial liabilities	Non-financial liabilities	Total
		Level 1
June 30, 2023
Liabilities as per Statements of Financial Position
Trade and other payables (Note 16)	40,641	-	40,641	41,805	82,446
Borrowings (Note 17)	223,078	-	223,078	-	223,078
Derivative financial instruments:
- Bond futures	-	12	12	-	12
Total liabilities	263,719	12	263,731	41,805	305,536

 

As of December 31, 2023, there have been no changes to the economic or business circumstances affecting the fair value of the financial assets and liabilities of the Group.

 

 

Group’s trade and other receivables as of December 31, 2023 and June 30, 2023 are as follows:

 

	12.31.2023	06.30.2023
Sale, leases and services receivables	32,161	30,833
Less: Allowance for doubtful accounts	(2,382)	(2,468)
Total trade receivables	29,779	28,365
Borrowings, deposits and others	28,912	19,352
Advances to suppliers	5,308	4,813
Tax receivables	2,856	3,059
Prepaid expenses	1,690	1,259
Long-term incentive plan	1	2
Others	9,229	5,795
Total other receivables	47,996	34,280
Total trade and other receivables	77,775	62,645
Non-current	12,534	9,170
Current	65,241	53,475
Total	77,775	62,645

 

Movements on the Group’s allowance for doubtful accounts were as follows:

 

	12.31.2023	06.30.2023
Beginning of the period / year	2,468	3,803
Additions (i)	167	434
Recovery (i)	(116)	(250)
Exchange rate differences	1,499	767
Inflation adjustment	(1,636)	(2,286)
End of the period / year	2,382	2,468

 

(i) Additions and recovery of the allowance for doubtful accounts have been included in “Selling expenses” in the Statement of Income and Other Comprehensive Income (Note 21).

 

 

 

 

Following is a detailed description of cash flows generated by the Group’s operations for the six-month periods ended December 31, 2023 and 2022:

 

	Note	12.31.2023	12.31.2022
Profit for the period		146,593	48,072
Adjustments for:
Income tax	19	54,958	(78,738)
Amortization and depreciation	21	1,801	2,162
Loss from disposal of property, plant and equipment		1	-
Net (gain) / loss from fair value adjustment of investment properties	8	(137,822)	91,958
Loss from disposal of intangible assets		132	-
Loss from disposal of joint ventures		865	-
Realization of currency translation adjustment		-	(875)
Gain from disposal of trading properties		(2,222)	(5,266)
Financial results, net		11,025	(28,750)
Provisions and allowances		(1,871)	14,140
Share of profit of associates and joint ventures	7	(19,926)	(4,104)
Changes in operating assets and liabilities:
Decrease / (increase) in inventories		97	(65)
(Increase) / decrease in trading properties		(117)	293
Increase in trade and other receivables		(3,399)	(2,276)
Decrease in trade and other payables		(11,319)	(934)
Decrease in salaries and social security liabilities		(2,465)	(897)
Decrease in provisions		(209)	(78)
Net cash generated by operating activities before income tax paid		36,122	34,642

 

 

 

	12.31.2023	12.31.2022
Issuance of non-convertible notes	-	81,978
Increase in investment properties through an increase in trade and other payables	-	134
Currency translation adjustment	4,436	1,774
Decrease in investment properties through an increase in property, plant and equipment	6	31
Decrease in property, plant and equipment through an increase in investment properties	-	6,627
Decrease in property, plant and equipment through an increase in revaluation surplus	-	544
Decrease in investments in financial assets through a decrease in trade and other payables	-	760
Decrease in dividends receivables through an increase in investments in financial assets	-	22
Decrease in Shareholders’ Equity through a decrease in trade and other receivables	2,316	-
Decrease in investment properties through a decrease in investments in financial assets	-	162
Decrease in Shareholders’ Equity through a decrease in investments in financial assets	-	6,393
Increase in right-of-use assets through a decrease in lease liabilities	455	-
Decrease in Shareholders’ Equity through an increase in trade and other payables	2,735	-
Decrease in trading properties through a decrease in borrowings	1,263	-
Increase in intangible assets through a decrease in trading properties	-	1,037
Barter transactions of investment properties	392	-
Decrease in investment properties through an increase in trade and other receivables	1,567	-
Decrease in investments in associates and joint ventures through an increase in trade and other receivables	748	-
Increase in intangible assets through a decrease in investment properties	15,248	-
Increase in intangible assets through trade and other payables	4,391	-
Increase of investments in financial assets through an increase in borrowings	276	-

 

 

 

 

 

Group’s trade and other payables as of December 31, 2023 and June 30, 2023 were as follows:

 

	12.31.2023	06.30.2023
Customers´ advances (*)	17,774	18,784
Trade payables	4,173	5,840
Accrued invoices	4,593	5,067
Admission fees (*)	16,294	16,885
Other income to be accrued	282	300
Tenant deposits	454	291
Total trade payables	43,570	47,167
Taxes payable	4,322	5,834
Other payables	18,741	29,445
Total other payables	23,063	35,279
Total trade and other payables	66,633	82,446
Non-current	25,787	20,332
Current	40,846	62,114
Total	66,633	82,446

 

(*) Mainly, corresponds to admission rights and rents collected in advance, which will accrue in an average term of 3 to 5 years.

 

 

The breakdown of the Group’s borrowings as of December 31, 2023 and June 30, 2023 was as follows:

 

	Book value		Fair value
	12.31.2023	06.30.2023	12.31.2023	06.30.2023
Non-convertible notes	275,062	199,638	269,605	201,039
Bank loans and others	4,523	5,322	4,523	5,322
Bank overdrafts	31,560	13,623	31,560	13,623
Other borrowings	3,765	3,555	3,765	3,555
Loans with non-controlling interests	1,444	940	1,444	940
Total borrowings	316,354	223,078	310,897	224,479
Non-current	202,927	139,136
Current	113,427	83,942
Total	316,354	223,078

 

The table below shows the movements in the Group's provisions categorized by type:

 

	Legal claims (iii)	Investments in associates and joint ventures (ii)	12.31.2023	06.30.2023
Beginning of the period / year	13,975	2	13,977	1,756
Additions (i)	1,724	-	1,724	15,864
Share of loss of associates	-	4	4	(33)
Recovery (i)	(41)	-	(41)	(463)
Used during the period / year	(209)	-	(209)	(138)
Inflation adjustment	4,811	-	4,811	(3,009)
End of the period / year	20,260	6	20,266	13,977
Non-current			18,678	12,233
Current			1,588	1,744
Total			20,266	13,977

 

(i) Additions and recovery of legal claims are included in "Other operating results, net".

(ii) Corresponds to investments in Puerto Retiro, a joint venture with negative equity.

(iii) Includes the provision for the IDBD demand.

 

 

 

 

 

 

As indicated in Note 1 to the Annual Consolidated Financial Statements as of June 30, 2023, the Group lost control of IDBD on September 25, 2020.

 

On September 21, 2020, IDBD filed a lawsuit against Dolphin Netherlands B.V. (“Dolphin BV”) and IRSA before the Tel-Aviv Jaffa District Court (civil case no. 29694-09-20). The amount claimed by IDBD is NIS 140 million, alleging that Dolphin BV and IRSA breached an alleged legally binding commitment to transfer to IDBD 2 installments of NIS 70 million. On December 24, 2020, and following approval by the insolvency court, the IDBD trustee filed a motion to dismiss the claim, maintaining the right as IDBD trustee, to file a new inter alia claim in the same matter, after conduct an investigation into the reasons for IDBD's insolvency. On December 24, 2020, the court entered a judgment to dismiss the claim as requested. On October 31, 2021, the Insolvency Commissioner notified that he did not oppose the motion, and on that same date, the court affirmed the motion initiated by the trustee of IDBD.

 

On December 26, 2021 IDBD filed the lawsuit against Dolphin BV and IRSA for the sum of NIS 140 million, plus interest and costs.

 

On January 30, 2023, a copy of the lawsuit was sent to us and we evaluated the legal defense alternatives for the company's interests. Throughout the year 2023 and up to the present date, the legal process has continued as usual, and the Company has responded to all requests made to it.

 

The company is currently discussing the validity of the claim regarding its liability and, subsidiarily, rebutting the substantive arguments raised by IDBD. However, based on the analysis conducted by the Company's lawyers to date, a provision related to this claim has been recorded in accordance with applicable accounting standards. As of the issuance date of these condensed interim financial statements, the legal process is still ongoing.

 

 

The details of the Group’s income tax, is as follows:

	12.31.2023	12.31.2022
Current income tax	(6,087)	41,682
Deferred income tax	(48,871)	37,056
Income tax	(54,958)	78,738

 

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 six-month periods ended December 31, 2023 and 2022:

 

	12.31.2023	12.31.2022
Profit for the period at tax rate applicable in the respective countries	(62,245)	(3,348)
Permanent differences:
Share of profit of associates and joint ventures	5,076	1,794
Provision of tax loss carry forwards	(446)	(32,589)
Inflation adjustment permanent difference	2,319	26,974
Difference between provision and tax return	3,123	35,226
Non-taxable profit, non-deductible expenses and others	4,792	57,485
Tax inflation adjustment	(7,577)	(6,804)
Income tax	(54,958)	78,738

 

 

 

 

 

 

The gross movement in the deferred income tax account is as follows:

 

	12.31.2023	06.30.2023
Beginning of period / year	(340,654)	(438,911)
Deferred income tax charge	(48,871)	98,257
End of period / year	(389,525)	(340,654)
Deferred income tax assets	3,590	1,777
Deferred income tax liabilities	(393,115)	(342,431)
Deferred income tax liabilities, net	(389,525)	(340,654)