IRSA Inversiones y Representaciones Sociedad Anónima
 
 
Unaudited Condensed Interim Consolidated Financial Statements as of December 31, 2021 and for the six and three-month periods ended as of that date, presented comparatively
 
 
 
 
 
 
 
 
 
 
Legal information
 
 
Denomination: IRSA Inversiones y Representaciones Sociedad Anónima.
 
Fiscal year N°: 79, beginning on July 1st, 2021.
 
Legal address: 261 Carlos Della Paolera St., 9th floor, Autonomous City of Buenos Aires, Argentina.
 
Company activity: Real estate investment and development.
 
Date of registration of the by-laws in the Public Registry of Commerce: June 23, 1943.
 
Date of registration of last amendment of the by-laws in the Public Registry of Commerce: General Ordinary and Extraordinary Shareholders’ Meeting held on December 12, 2019 and registered in the Superintendence on October 13,2020 with the number 9896, Book 1200 Volume – of Joint Stock Companies.
 
Expiration of the Company’s by-laws: April 5, 2043.
 
Registration number with the Superintendence: 213,036.
 
Capital: 810,870,597 shares. (*)
 
Common Stock subscribed, issued and paid-up nominal value (in millions of ARS): 811.
 
Parent Company: Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria
(Cresud S.A.C.I.F. y A.).
 
Legal Address: 261 Carlos Della Paolera St., 9th floor, Autonomous City of Buenos Aires, Argentina.
 
Main activity: Real estate, agricultural, commercial and financial activities.
 
Direct and indirect interest of the Parent Company on the capital stock: 434,263,359 common shares.
 
Percentage of votes of the Parent Company (direct and indirect interest) on the shareholders’ equity: 53.68% (1).
 
 
CAPITAL STATUS
 
Type of stock
 
Shares authorized for Public Offering (2)
 
 
Subscribed, issued and paid-up nominal value
(in millions of Pesos)
 
Common stock with a face value of ARS 1 per share and entitled to 1 vote each
  810,870,597 
  811 
 
(1) For computation purposes, treasury shares have been subtracted.
(2) Company not included in the Optional Statutory System of Public Offer of Compulsory Acquisition.
 
(*) By Extraordinary Shareholders’ Meeting dated December 22, 2021, an increase of the capital stock of the company was approved, as a result of the merger by absorption with IRSA Propiedades Comerciales S.A. in the amount of ARS 152,158,215 through the issuance of 152,158,215 ordinary shares of ARS 1 par value each and one vote per share. The procedure is in progress. In the same way, the capital increase and the issuance of shares related to the 5,181 warrants exercised in November are in process of being registered in the “Inspección General de Justicia” (General Inspection of Justice).
 
 
Index
 
Glossary  ...
1
Unaudited Condensed Interim Consolidated Statements of Financial Position                                                                                                                              
2
Unaudited Condensed Interim Consolidated Statements of Income and Other Comprehensive Income
3
Unaudited Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity
4
Unaudited Condensed Interim Consolidated Statements of Cash Flows                                                                                                                              
6
Notes to the Unaudited Condensed Interim Consolidated Financial Statements:
 
Note 1 – The Group’s business and general information 
7
Note 2 – Summary of significant accounting policies 
7
Note 3 – Seasonal effects on operations 
8
Note 4 – Acquisitions and disposals 
9
Note 5 – Financial risk management and fair value estimates 
11
Note 6 – Segment information 
11
Note 7 – Investments in associates and joint ventures 
13
Note 8 – Investment properties 
14
Note 9 – Property, plant and equipment 
15
Note 10 – Trading properties 
16
Note 11 – Intangible assets 
16
Note 12 – Right-of-use assets 
17
Note 13 – Financial instruments by category 
17
Note 14 – Trade and other receivables 
19
Note 15 – Cash flow information 
20
Note 16 – Trade and other payables 
20
Note 17 – Borrowings 
21
Note 18 – Provisions 
22
Note 19 – Taxes 
22
Note 20 – Revenues 
24
Note 21 – Expenses by nature 
24
Note 22 – Cost of goods sold and services provided 
24
Note 23 – Other operating results, net 
25
Note 24 – Financial results, net 
25
Note 25 – Related party transactions 
25
Note 26 – CNV General Resolution N° 622 
28
Note 27 – Foreign currency assets and liabilities 
28
Note 28 – Results from discontinued operations 
29
Note 29 – Other significant events of the period 
29
Note 30 – Subsequent Events 
31
 
 
 
Glossary
 
The following are not technical definitions, but help the reader to understand certain terms used in the wording of the notes to the Group´s Financial Statements.
 
Terms
 
Definitions
BACS
 
Banco de Crédito y Securitización S.A.
BHSA
 
Banco Hipotecario S.A.
Clal
 
Clal Holdings Insurance Enterprises Ltd.
CNV
 
Securities Exchange Commission
CPF
 
Collective Promotion Funds
Condor
 
Condor Hospitality Trust Inc.
Cresud
 
Cresud S.A.C.I.F. y A.
DIC
 
Discount Investment Corporation Ltd.
Efanur
 
Efanur S.A.
Financial Statements
 
Unaudited Condensed Interim Consolidated Financial Statements
Annual Financial Statements
 
Consolidated Financial Statements as of June 30, 2019
HASAU
 
Hoteles Argentinos S.A.U.
IAS
 
International Accounting Standards
IASB
 
International Accounting Standards Board
IDBD
 
IDB Development Corporation Ltd.
IFRS
 
International Financial Reporting Standards
IRSA, The Company”, “Us”, “We”
 
IRSA Inversiones y Representaciones Sociedad Anónima
IRSA CP
 
IRSA Propiedades Comerciales S.A.
MPIT
 
Minimum presumed income tax
NCN
 
Non-convertible notes
New Lipstick
 
New Lipstick LLC
NIS
 
New Israeli Shekel
Quality
 
Quality Invest S.A.
Shufersal
 
Shufersal Ltd.
TGLT
 
TGLT S.A.
Tyrus
 
Tyrus S.A.
 
 
1
IRSA Inversiones y Representaciones Sociedad Anónima
 
Unaudited Condensed Interim Consolidated Statements of Financial Position
as of December 31, 2021 and June 30, 2021
(All amounts in millions, except otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina
 
 
Note
  12.31.2021 
  06.30.2021 
ASSETS
 
    
    
Non-current assets
 
    
    
Investment properties
8
  238,739 
  220,590 
Property, plant and equipment
9
  6,009 
  4,993 
Trading properties
10, 22
  1,959 
  1,980 
Intangible assets
11
  2,669 
  2,891 
Right-of-use assets
12
  949 
  977 
Investments in associates and joint ventures
7
  12,266 
  14,652 
Deferred income tax assets
19
  551 
  537 
Income tax and MPIT credit
 
  28 
  36 
Trade and other receivables
14
  2,788 
  3,429 
Investments in financial assets
13
  834 
  1,467 
Total non-current assets
 
  266,792 
  251,552 
Current assets
 
    
    
Trading properties
10, 22
  137 
  137 
Inventories
22
  92 
  87 
Income tax and MPIT credit
 
  54 
  199 
Trade and other receivables
14
  10,265 
  10,207 
Investments in financial assets
13
  3,701 
  3,813 
Derivative financial instruments
13
  10 
  - 
Cash and cash equivalents
13
  7,264 
  2,326 
Total current assets
 
  21,523 
  16,769 
TOTAL ASSETS
 
  288,315 
  268,321 
SHAREHOLDERS’ EQUITY
 
    
    
Shareholders' equity attributable to equity holders of the parent (according to corresponding statement)
 
  116,762 
  74,471 
Non-controlling interest
 
  7,947 
  25,162 
TOTAL SHAREHOLDERS’ EQUITY
 
  124,709 
  99,633 
LIABILITIES
 
    
    
Non-current liabilities
 
    
    
Borrowings
17
  52,812 
  56,275 
Lease liabilities
 
  879 
  1,026 
Deferred income tax liabilities
19
  87,293 
  82,801 
Trade and other payables
16
  1,839 
  1,671 
Provisions
18
  1,576 
  137 
Derivative financial instruments
13
  1 
  11 
Salaries and social security liabilities
 
  89 
  104 
Total non-current liabilities
 
  144,489 
  142,025 
Current liabilities
 
    
    
Trade and other payables
16
  6,310 
  6,146 
Borrowings
17
  11,684 
  18,559 
Lease liabilities
 
  110 
  65 
Provisions
18
  216 
  177 
Salaries and social security liabilities
 
  560 
  525 
Income tax and MPIT liabilities
 
  205 
  1,133 
Derivative financial instruments
13
  32 
  58 
Total current liabilities
 
  19,117 
  26,663 
TOTAL LIABILITIES
 
  163,606 
  168,688 
TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES
 
  288,315 
  268,321 
 
The accompanying notes are an integral part of these Unaudited Condensed Interim Consolidated Financial Statements.
 
 
 
 
 
                                            .
Eduardo S. Elsztain
President
 
 
2
IRSA Inversiones y Representaciones Sociedad Anónima
 
Unaudited Condensed Interim Consolidated Statements of Income and Other Comprehensive Income
for the six and three-month periods ended December 31, 2021 and 2020
(All amounts in millions, except otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina
 
 
 
 
Six months
 
 
Three months
 
 
Note
  12.31.2021 
  12.31.2020 
  12.31.2021 
  12.31.2020 
Revenues
20
  11,051 
  7,473 
  6,222 
  4,770 
Costs
21, 22
  (4,216)
  (3,968)
  (2,283)
  (2,124)
Gross profit
 
  6,835 
  3,505 
  3,939 
  2,646 
Net gain / (loss) from fair value adjustment of investment properties
8
  22,450 
  13,986 
  29,607 
  (26,492)
General and administrative expenses
21
  (1,894)
  (2,287)
  (1,082)
  (1,205)
Selling expenses
21
  (840)
  (1,188)
  (467)
  (432)
Other operating results, net
23
  (40)
  (71)
  (106)
  (89)
Profit/ (loss) from operations
 
  26,511 
  13,945 
  31,891 
  (25,572)
Share of (loss) / profit of associates and joint ventures
7
  (120)
  (683)
  51 
  (931)
Profit / (loss) before financial results and income tax
 
  26,391 
  13,262 
  31,942 
  (26,503)
Finance income
24
  157 
  103 
  89 
  8 
Finance costs
24
  (3,857)
  (4,781)
  (1,860)
  (2,104)
Other financial results
24
  7,656 
  4,776 
  4,387 
  3,727 
Inflation adjustment
24
  430 
  1,674 
  55 
  1,772 
Financial results, net
 
  4,386 
  1,772 
  2,671 
  3,403 
Profit / (loss) before income tax
 
  30,777 
  15,034 
  34,613 
  (23,100)
Income tax
19
  (5,257)
  (6,044)
  (7,975)
  7,328 
Profit/ (loss) for the period from continuing operations
 
  25,520 
  8,990 
  26,638 
  (15,772)
Loss for the period from discontinued operations
28
  - 
  (10,748)
  - 
  - 
Profit / (loss) for the period
 
  25,520 
  (1,758)
  26,638 
  (15,772)
Other comprehensive income:
 
    
    
    
    
Items that may be reclassified subsequently to profit or loss:
 
    
    
    
    
Currency translation adjustment
 
  (434)
  1,058 
  (253)
  1,852 
Revaluation surplus
 
  - 
  430 
  - 
  430 
Other comprehensive (loss) / income for the period from continuing operations
 
  (434)
  1,488 
  (253)
  2,282 
Other comprehensive loss for the period from discontinued operations
 
  - 
  (13,781)
  - 
  - 
Total other comprehensive loss for the period
 
  (434)
  (12,293)
  (253)
  2,282 
Total comprehensive income / (loss) for the period
 
  25,086 
  (14,051)
  26,385 
  (13,490)
 
    
    
    
    
Total comprehensive income / (loss) from continuing operations
 
  25,086 
  10,478 
  26,385 
  (13,490)
Total comprehensive loss from discontinued operations
 
  - 
  (24,529)
  - 
  - 
Total comprehensive income / (loss) for the period
 
  25,086 
  (14,051)
  26,385 
  (13,490)
 
    
    
    
    
Profit/ (loss) for the period attributable to:
 
    
    
    
    
Equity holders of the parent
 
  25,722 
  (882)
  26,383 
  (11,998)
Non-controlling interest
 
  (202)
  (876)
  255 
  (3,774)
 
    
    
    
    
Profit / (loss) from continuing operations attributable to:
 
    
    
    
    
Equity holders of the parent
 
  25,722 
  7,606 
  26,383 
  (11,998)
Non-controlling interest
 
  (202)
  1,384 
  255 
  (3,774)
 
    
    
    
    
Total comprehensive income/ (loss) attributable to:
 
    
    
    
    
Equity holders of the parent
 
  25,301 
  (5,066)
  26,142 
  (9,961)
Non-controlling interest
 
  (215)
  (8,985)
  243 
  (3,529)
 
    
    
    
    
Total comprehensive Income/(loss) from continuing operations attributable to:
 
    
    
    
    
Equity holders of the parent
 
  25,301 
  10,159 
  26,141 
  (9,962)
Non-controlling interest
 
  (215)
  319 
  244 
  (3,528)
 
    
    
    
    
Profit / (loss) per share attributable to equity holders of the parent: (i)
 
    
    
    
    
Basic
 
  31.80 
  (1.53)
  32.62 
  (20.87)
Diluted
 
  28.87 
  (1.53)
  29.62 
  (20.87)
 
    
    
    
    
Profit/ (loss) per share from continuing operations attributable to equity holders of the parent:
 
    
    
    
    
Basic
 
  31.80 
  13.23 
  32.62 
  (20.87)
Diluted
 
  28.87 
  13.18 
  29.62 
  (20.87)
 
(i) The basic profit/loss per share have been calculated using 808,898,749 shares at 12.31.21 and 575,377,891 at 12.31.20. If 808,898,749 shares had been used for the calculation, the result per share would be (ARS 1.09) for 12.31.20. The diluted profit/loss per share have been calculated using 890,815,893 shares at 12.31.21 and 576,529,312 at 12.31.20. If 890,815,893 shares had been used for the calculation, the result per share would be (ARS 0.99) for 12.31.20. See note 17 to the Annual Financial Statements.
 
The accompanying notes are an integral part of these Unaudited Condensed Interim Consolidated Financial Statements.
 
 
 
 
 
 
                                            .
Eduardo S. Elsztain
President
 
 
3
IRSA Inversiones y Representaciones Sociedad Anónima
 
Unaudited Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity
for the six-month period ended December 31, 2021
(All amounts in millions, except otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina
 
 
 
 
Attributable to equity holders of the parent
 
 
 
 
 
 
 
 
 
Share capital
 
 
Treasury shares
 
 
Inflation adjustment of share capital and treasury shares (i)
 
 
 Warrants (iii)
 
 
Share premium
 
 
Additional paid-in capital from treasury shares
 
 
Legal reserve
 
 
Special reserve Resolution CNV 609/12 (ii)
 
 
Other reserves (iv)
 
 
Retained earnings
 
 
Subtotal
 
 
Non-controlling interest
 
 
Total Shareholders’ equity
 
Balance as of July 1, 2021
  657 
  2 
  24,970 
  2,143 
  29,038 
  178 
  1,930 
  17,013 
  32,867 
  (34,327)
  74,471 
  25,162 
  99,633 
Profit / (loss) for the period
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  25,722 
  25,722 
  (202)
  25,520 
Other comprehensive loss for the period
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (421)
  - 
  (421)
  (13)
  (434)
Total profit / (loss) and other comprehensive (loss) for the period
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (421)
  25,722 
  25,301 
  (215)
  25,086 
Assignment of results according to A.G.O.
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (36,967)
  36,967 
  - 
  - 
  - 
Warrants exercise (iii)
  - 
  - 
  - 
  (1)
  4 
  - 
  - 
  - 
  - 
  - 
  3 
  - 
  3 
Capitalisation of irrevocable contributions
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  17 
  17 
Dividend distribution
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (30)
  (30)
Incorporated by merger
  152 
  - 
  - 
  - 
  19,509 
  - 
  359 
  - 
  (474)
  (2,559)
  16,987 
  (16,987)
  - 
Balance as of December 31, 2021
  809 
  2 
  24,970 
  2,142 
  48,551 
  178 
  2,289 
  17,013 
  (4,995)
  25,803 
  116,762 
  7,947 
  124,709 
 
    
    
    
    
    
    
    
    
    
    
    
    
    
 
(i) Includes ARS 1 of Inflation adjustment of treasury shares. See Note 17 to the Annual Financial Statements.
(ii) Related to CNV General Resolution N° 609/12.
(iii) As of December 31, 2021, the remaining warrants to exercise amount to 79,964,078, equivalent to the same number of shares. See Note 29 to this Financial Statements.
(iv) Group´s other reserves for the period ended December 31, 2021 are comprised as follows:
 
 
 
Cost of treasury stock
 
 
Changes in non-controlling interest
 
 
Reserve for share-based payments
 
 
Reserve for future dividends
 
 
Currency translation adjustment reserve
 
 
Hedging instruments
 
 
Special reserve
 
 
Reserve for defined contribution plans
 
 
Other reserves
 
 
Revaluation surplus
 
 
Total Other reserves
 
Balance as of July 1, 2021
  (308)
  (10,148)
  347 
  3,061 
  780 
  (777)
  37,951 
  153 
  - 
  1,808 
  32,867 
Other comprehensive loss for the period
  - 
  - 
  - 
  - 
  (421)
  - 
  - 
  - 
  - 
  - 
  (421)
Total comprehensive loss for the period
  - 
  - 
  - 
  - 
  (421)
  - 
  - 
  - 
  - 
  - 
  (421)
Assignment of results according to A.G.O.
  - 
  - 
  - 
  - 
  - 
  - 
  (36,967)
  - 
  - 
  - 
  (36,967)
Incorporated by merger
  - 
  (622)
  - 
  - 
  (14)
  - 
  - 
  - 
  25 
  137 
  (474)
Balance as of December 31, 2021
  (308)
  (10,770)
  347 
  3,061 
  345 
  (777)
  984 
  153 
  25 
  1,945 
  (4,995)
 
 There are no cumulative unpaid dividends on preferred shares.
 The accompanying notes are an integral part of these Unaudited Condensed Interim Consolidated Financial Statements.
 
 
 
 
 
                                            .
Eduardo S. Elsztain
President
 
 
4
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
 
Unaudited Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity
for the six-month period ended December 31, 2021
(All amounts in millions, except otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina
 
 
 
 
Attributable to equity holders of the parent
 
 
 
 
 
 
 
 
 
Share capital
 
 
Treasury shares
 
 
Inflation adjustment of share capital and treasury shares (i)
 
 
Share premium
 
 
Additional paid-in capital from treasury shares
 
 
Legal reserve
 
 
Special reserve Resolution CNV 609/12 (ii)
 
 
Other reserves (iii)
 
 
Accumulated deficit
 
 
Subtotal
 
 
Non-controlling interest
 
 
Total Shareholders’ equity
 
Balance as of July 1, 2020
  575 
  2 
  24,950 
  26,303 
  172 
  877 
  17,013 
  10,663 
  22,789 
  103,344 
  118,542 
  221,886 
Loss for the period
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (882)
  (882)
  (876)
  (1,758)
Other comprehensive loss for the period
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (4,184)
  - 
  (4,184)
  (8,109)
  (12,293)
Total profit and other comprehensive loss for the period
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (4,184)
  (882)
  (5,066)
  (8,985)
  (14,051)
Assignment of results according to A.G.O.
  - 
  - 
  - 
  - 
  - 
  1,135 
  - 
  20,611 
  (21,746)
  - 
  - 
  - 
Distribution of dividends in shares
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (875)
  (875)
  - 
  (875)
Capitalisation of irrevocable contributions
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  20 
  20 
Dividend distribution
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (3,232)
  (3,232)
Decrease due to loss of control
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (75,299)
  (75,299)
Other changes in equity
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  8,813 
  - 
  8,813 
  1,468 
  10,281 
Reserve for share-based payments
  - 
  - 
  - 
  - 
  3 
  - 
  - 
  (3)
  - 
  - 
  - 
  - 
Changes in non-controlling interest
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (395)
  - 
  (395)
  957 
  562 
Balance as of December 31, 2020
  575 
  2 
  24,950 
  26,303 
  175 
  2,012 
  17,013 
  35,505 
  (714)
  105,821 
  33,471 
  139,292 
 
(i) Includes ARS 1 of Inflation adjustment of treasury shares. See Note 16 to the Annual Financial Statements.
(ii) Related to CNV General Resolution N° 609/12.
(iii) Group’s other reserves for the period ended December 31, 2020 are comprised as follows:
 
 
 
Cost of treasury stock
 
 
Changes in non-controlling interest
 
 
Reserve for share-based payments
 
 
Reserve for future dividends
 
 
Currency translation adjustment reserve
 
 
Hedging instruments
 
 
Reserve for defined contribution plans
 
 
Special reserve
 
 
Other reserves from subsidiaries
 
 
Revaluation surplus
 
 
Total Other reserves
 
Balance as of July 1, 2020
  (311)
  (9,533)
  356 
  3,061 
  (1,318)
  (614)
  (657)
  18,804 
  193 
  682 
  10,663 
Other comprehensive loss for the period
  - 
  - 
  - 
  - 
  (4,696)
  (130)
  247 
  - 
  - 
  395 
  (4,184)
Total comprehensive loss for the period
  - 
  - 
  - 
  - 
  (4,696)
  (130)
  247 
  - 
  - 
  395 
  (4,184)
Reserve for share-based payments
  2 
  - 
  (5)
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (3)
Assignment of results according to A.G.O.
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  20,611 
  - 
  - 
  20,611 
Changes in non-controlling interest
  - 
  (395)
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (395)
Other changes in equity
  - 
  (92)
  - 
  - 
  7,811 
  (8)
  1,293 
  - 
  (193)
  2 
  8,813 
Balance as of December 31, 2020
  (309)
  (10,020)
  351 
  3,061 
  1,797 
  (752)
  883 
  39,415 
  - 
  1,079 
  35,505 
 
    
    
    
    
    
    
    
    
    
    
    
  
    There are no cumulative unpaid dividends on preferred shares.
 
The accompanying notes are an integral part of these Unaudited Condensed Interim Consolidated Financial Statements.
 
 
 
 
 
                                            .
Eduardo S. Elsztain
President
 
 
5
IRSA Inversiones y Representaciones Sociedad Anónima
 
Unaudited Condensed Interim Consolidated Statements of Cash Flows
for the six-month period ended December 31, 2021 and 2020
(All amounts in millions, except otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina
 
 
 
Note
  12.31.2021 
  12.31.2020 
Operating activities:
 
    
    
Net cash generated from continuing operating activities before income tax paid
15
  4,799 
  2,964 
Income tax and MPIT paid
 
  (107)
  (51)
Net cash generated from continuing operating activities
 
  4,692 
  2,913 
Net cash generated from discontinued operating activities
 
  - 
  3,732 
Net cash generated from operating activities
 
  4,692 
  6,645 
Investing activities:
 
    
    
Contributions and issuance of capital in associates and joint ventures
 
  (30)
  (41)
Acquisition and improvements of investment properties
 
  (1,449)
  (3,067)
Proceeds from sales of investment properties
 
  4,611 
  21,370 
Acquisitions and improvements of property, plant and equipment
 
  (133)
  (113)
Acquisitions of intangible assets
 
  (4)
  (14)
Dividends collected from associates and joint ventures
 
  2,634 
  - 
Proceeds from loans granted
 
  334 
  - 
Payment of derivative financial instruments
 
  (41)
  (507)
Acquisitions of investments in financial assets
 
  (1,379)
  (17,708)
Proceeds from disposal of investments in financial assets
 
  1,460 
  23,172 
Interest received
 
  118 
  472 
Proceeds from sales of intangible assets
 
  248 
  - 
Net cash generated from continuing investing activities
 
  6,369 
  23,564 
Net cash generated from discontinued investing activities
 
  - 
  53,485 
Net cash generated from investing activities
 
  6,369 
  77,049 
Financing activities:
 
    
    
Borrowings and issuance of non-convertible notes
 
  6,804 
  4,986 
Payment of borrowings and non-convertible notes
 
  (5,671)
  (41,106)
(Payment) / collection of short-term loans, net
 
  (516)
  3,588 
Interests paid
 
  (3,609)
  (5,666)
Repurchase of non-convertible notes
 
  (2,761)
  (201)
Acquisition of non-controlling interest in subsidiaries
 
  - 
  (217)
Proceeds from warrants exercise
 
  3 
  - 
Payment of borrowings to related parties
 
  (299)
  - 
Dividends paid to non-controlling interest in subsidiaries
 
  - 
  (3,115)
Sale of own non-convertible notes
 
  - 
  4,737 
Dividends paid
 
  (32)
  - 
Payment of lease liabilities
 
  (13)
  (29)
Net cash used in continuing financing activities
 
  (6,094)
  (37,023)
Net cash used in discontinued financing activities
 
  - 
  (21,874)
Net cash used in financing activities
 
  (6,094)
  (58,897)
Net increase / (decrease) in cash and cash equivalents from continuing activities
 
  4,967 
  (10,546)
Net increase in cash and cash equivalents from discontinued activities
 
  - 
  35,343 
Net increase in cash and cash equivalents
 
  4,967 
  24,797 
Cash and cash equivalents at beginning of period
 
  2,326 
  163,461 
Inflation adjustment
 
  (47)
  (3)
Deconsolidation of subsidiaries
 
  - 
  (175,036)
Foreign exchange gain/ (loss) on cash and fair value result for cash equivalents
 
  18 
  (10,794)
Cash and cash equivalents at end of period
13
  7,264 
  2,425 
 
The accompanying notes are an integral part of these Unaudited Condensed Interim Consolidated Financial Statements.
 
 
 
 
 
                                            .
Eduardo S. Elsztain
President
 
 
6
IRSA Inversiones y Representaciones Sociedad Anónima
 
Notes to the Unaudited Condensed Interim Consolidated Financial Statements
(Amounts in millions, except otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina
 
1.
The Group’s business and general information
 
These Financial Statements have been approved for issuance by the Board of Directors, on February 9, 2022.
 
IRSA was founded in 1943, and it is engaged in a diversified range of real estate activities in Argentina since 1991. IRSA and its subsidiaries are collectively referred to hereinafter as “the Group”. Cresud is our direct parent company, whose main shareholder and final beneficiary is Eduardo Sergio Elsztain.
 
As of the end of these Unaudited Condensed Interim Consolidated Financial Statements (hereinafter, Financial Statements), the Group operates 335,279 square meters (sqm) in 14 shopping malls, 109,859  sqm in 7 premium offices and an extensive land reserve for future commercial developments; operates and holds a majority interest (with the exception of La Ribera Shopping Center, of which it has a 50% ownership interest) in a portfolio of 14 shopping malls in Argentina, six of which are located in the Autonomous City of Buenos Aires (Abasto Shopping, Alcorta Shopping, Alto Palermo, Patio Bullrich, Dot Baires Shopping and Distrito Arcos), two in Buenos Aires province (Alto Avellaneda and Soleil Premium Outlet) and the rest are situated in different provinces (Alto Noa in the City of Salta, Alto Rosario in the City of Rosario, Mendoza Plaza in the City of Mendoza, Córdoba Shopping Villa Cabrera in the City of Córdoba, Alto Comahue in the City of Neuquén and La Ribera Shopping in the City of Santa Fe). The Group also owns the historic building where the Patio Olmos Shopping Mall is located, operated by a third party.
 
As stated in Note 1 to the consolidated financial statements as of June 30, 2021, after the declaration of insolvency and liquidation of IDBD in which the Group lost control of it, the results of such company as of December 30,2020 were included in discontinued operations.
 
2.
Summary of significant accounting policies
 
2.1.
Basis of preparation
 
These financial statements have been prepared in accordance with IAS 34 “Interim financial reporting” and should therefore be read in conjunction with the Group's annual Consolidated Financial Statements as of June 30, 2021 prepared in accordance with IFRS. Also, these financial statements include additional information required by Law No. 19,550 and / or regulations of the CNV. Such information is included in the notes to these financial statements, as accepted by IFRS.
 
These financial statements for the interim periods of six months ended December 31, 2021 and 2020 have not been audited. Management considers that they include all the necessary adjustments to fairly present the results of each period. Intermediate period results do not necessarily reflect the proportion of the Group's results for the entire fiscal years.
 
IAS 29 "Financial Reporting in Hyperinflationary Economies" requires that the financial statements of an entity whose functional currency is one of a hyperinflationary economy be expressed in terms of the current unit of measurement at the closing date of the reporting period, regardless of whether they are based on the historical cost method or the current cost method. To do so, in general terms, the inflation produced from the date of acquisition or from the revaluation date, as applicable, must be calculated by non-monetary items. This requirement also includes the comparative information of the financial statements.
 
In order to conclude on whether an economy is categorized as highly inflationary in the terms of IAS 29, the standard details a series of factors to be considered, including the existence of an accumulated inflation rate in three years that approximates or exceed 100%. Accumulated inflation in Argentina in three years is over 100%. For that reason, in accordance with IAS 29, Argentina must be considered a country with a highly inflationary economy starting July 1, 2018.
 
 
7
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
 
In relation to the inflation index to be used and in accordance with FACPCE Resolution No. 539/18, it is determined based on the Wholesale Price Index (IPIM) until 2016, considering the average variation of the Consumer Price Index (CPI) of the Autonomous City of Buenos Aires for the months of November and December 2015, because during those two months there were no national IPIM measurements. Then, from January 2017, the National Consumer Price Index (National CPI) is considered. The table below presents the index for the period ended December 31, 2021, according to official statistics (INDEC) and following the guidelines described in Resolution 539/18.
 
 
 
As of December 31, 2021 (accumulated six months)
 
Price variation
  20%
 
As a consequence of the aforementioned, these financial statements as of December 31, 2021 were restated in accordance with IAS 29.
 
 
2.2.
Significant accounting policies
 
The accounting policies applied in the presentation of these Financial Statements are consistent with those applied in the preparation of the Annual Financial Statements, as described in Note 2 to those Financial Statements.
 
 
2.3.
Comparability of information
 
Balance items as of June 30, 2021 and December 31, 2020 presented in these Unaudited Condensed Interim Consolidated Financial Statements for comparative purposes arise from the financial statements as of and for such periods restated according to IAS 29 (See note 2.1). Certain items from prior periods have been reclassified for consistency purposes.
 
See Note 29 for information on the context in which the Group operates.
 
 
2.4.
Use of estimates
 
The preparation of Financial Statements at a certain date requires Management to make estimations and evaluations affecting the amount of assets and liabilities recorded and contingent assets and liabilities disclosed at such date, as well as income and expenses recorded during the period. Actual results might differ from the estimates and evaluations made at the date of preparation of these financial statements. In the preparation of these financial statements, the significant judgments made by Management in applying the Group’s accounting policies and the main sources of uncertainty were the same as the ones applied by the Group in the preparation of the Annual Financial Statements described in Note 3 to those Financial Statements.
 
 
3.
Seasonal effects on operations
 
The operations of the Group’s shopping malls are subject to seasonal effects, which affect the level of sales recorded by lessees. During summertime in Argentina (January and February), the lessees of shopping malls experience the lowest sales levels in comparison with the winter holidays (July) and Christmas and year-end holidays celebrated in December, when they tend to record peaks of sales. Apparel stores generally change their collections during the spring and the fall, which impacts positively on shopping malls sales. Sale discounts at the end of each season also affect the business. As a consequence, for shopping mall operations, a higher level of business activity is expected in the period from July through December, compared to the period from January through June.
 
 
 
8
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
4.
Acquisitions and disposals
 
Significant acquisitions and disposals for the six-month period ended December 31, 2021 are detailed below. Significant acquisitions and disposals for the fiscal year ended June 30, 2021, are detailed in Note 4 to the Annual Financial Statements.
 
A.
Sale of real estate parcels in Hudson
On August 2, 2021, the bill for the sale of several parcels of the property called Casonas located in Hudson, Berazategui district, was signed. The price of the transaction was USD 0.6 million.
 
B.
Sale of Mariano Acosta Plot
 
On August 9, 2021, a sale bill for Mariano Acosta Plot was signed for a total amount of USD 0.7 million. With the signing of the bill, the amount of USD 0.5 million was received and the remaining balance of USD 0.2 million at the signing of the deed.
 
C.
Sale of Merlo Plot
 
On August 9, 2021, a sale bill for Merlo Plot was signed for a total amount of USD 0.7 million. With the signing of the bill, the amount of USD 0.5 million was received and the remaining balance of USD 0.2 million at the signing of the deed.
 
D.
Sale of Catalinas Tower building
 
On November 2, 2021, three medium-height floors of the tower “261 Della Paolera” located in the Catalinas district of the Autonomous City of Buenos Aires for a total area of approximately 3,582 square meters and 36 parking spaces located in the building were sold.
 
The transaction price was approximately ARS 3,197 million, which as of the date of issuance of these financial statements were paid in full.
 
On December 15, 2021, possession of the 12th floor and 12 parking spaces of the “261 Della Paolera” tower were handed over to the European Union. The total of the operation was USD 9 million.
 
E.
Transfer of rights Libertador Trust
 
On November 18, 2021, the deed for transfer of rights of an apartment and complementary units of the Libertador Trust was signed for USD 1 million.
 
F.
Sale of parking spaces – Libertador Building
 
On December 21, 2021, 33 parking spaces of Libertador Building 498 were sold for a value of USD 0.8 million.
 
 
 
9
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
 
G.
Investment in Condor Hospitality Inc
 
On September 22, 2021, Condor Hospitality Trust S.A. (“Condor”) has signed a sale agreement for its portfolio of 15 hotels in the United States with B9 Cowboy Mezz A LLC, an affiliate of Blackstone Real Estate Partners. Said sale was approved by the Condor Shareholders' Meeting held on November 12, 2021 and was completed on the 19th of the same month for an amount of USD 305 million. Within this framework, Condor announced a Liquidation and Dissolution Plan, with the intention of distributing certain net income from the sale of the hotel portfolio to the shareholders in one or more installments, which was approved by the Condor Shareholders' Meeting held on December 1, 2021.
 
On December 10, 2021, in accordance with the aforementioned Plan, Condor's Board of Directors approved the distribution of a special dividend of USD 7.94 per share, which payment was made on December 30, 2021, corresponding to IRSA an approximate amount of USD 25.3 million for its direct and indirect holding of 3,191,213 common shares that, as of the date of issuance of the financial statements, have already been fully collected. As of December 31, 2021, Condor shares were delisted from the NYSE, pending the final liquidation of the company.
 
H.
Merger by absorption of IRSA and IRSA CP
 
On September 30, 2021, IRSA & IRSA CP Boards of Directors approved the prior merger agreement between both companies and the corresponding special financial statements as of June 30, 2021, initiating the corporate reorganization process under the terms of art. 82 et seq. of the General Law of Companies. The merger process has particular characteristics given that they are two companies included in the public offering regime, reason why, not only apply the current provisions of the General Law of Companies but also the procedures established regarding reorganization of companies of the Regulations of the “Comisión Nacional de Valores” (National Securities Commission) and the markets, both national and foreign, where their shares are listed.
 
The Merger is carried out in order to streamline the technical, administrative, operational and economic resources of both Companies, standing out among others: (a) the operation and maintenance of a single transactional information system and centralization of the entire accounting registration process; (b) presentation of a single financial statement to the different control agencies with the consequent cost savings in accounting and advisory fees, tariffs and other related expenses; (c) simplification of the accounting information reporting and consolidation process, as a consequence of the reduction that the merger would imply for the corporate structure as a whole; (d) removal of the IRSA CP public offering listing on BYMA and NASDAQ with the associated costs that this represents; (e) cost reduction for legal fees and tax filings; (f) increase in the percentage of the capital stock that is listed in the different markets, increasing the liquidity of the listed shares; (g) tax efficiencies and (h) preventively avoid the potential overlap of activities between the Companies.
 
In accordance with the commitments assumed in the Prior Merger Commitment, having obtained the administrative consent of the United States Securities and Exchange Commission, an entity to which they are subject because both companies list their shares in markets that operate in said jurisdiction, The shareholders' meetings of both companies were called.
 
On December 22, 2021, the Shareholders' Meetings of IRSA and IRSA CP were held, approving the merger by absorption, whose effective date was established on July 1, 2021. As of that date, the transfer to the absorbent of the totality of the equity of the absorbed company, thereby incorporating all its rights and obligations, assets and liabilities into the equity of the absorbing company.
 
Likewise, and within the framework of the reorganization process, the Board of Directors has approved the exchange ratio, which has been established at 1.40 IRSA shares for each IRSA CP share, which is equivalent to 0.56 IRSA GDS for each ADS of IRSA CP. Within this framework, it was decided to increase the share capital by issuing 152,158,215 new shares in IRSA.
 
 
10
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
The exchange of IRSA CP shares for IRSA shares will be carried out once the entire administrative process has been completed and once the registration has been made in the “Inspección General de Justicia” (General Inspection of Justice), a process that may take several months.
 
5.
Financial risk management and fair value estimates
 
These Financial Statements do not include all the information and disclosures on financial risk management; therefore, they should be read along with Note 5 to the Annual Financial Statements. There have been no changes in risk management or risk management policies applied by the Group since year-end.
 
From June 30, 2021 and up to the date of issuance of these Financial Statements, there have been no significant changes in business or economic circumstances affecting the fair value of the Group's assets or liabilities (either measured at fair value or amortized cost) except for what is mentioned in Note 29 in relation to COVID-19.
 
6.
Segment information
 
Segment information was prepared and classified according to the business in which the Group operates, they were descripted in Note 6 to the Annual Financial Statements.
 
Below is a summary of the Group’s operating segments and a reconciliation between the operating income according to segment information and the operating income of the Statements of Income and Other Comprehensive Income of the Group for the periods ended December 31, 2021 and 2020:
 
 
 
Six Months ended December 31, 2021
 
 
 
Total
 
 
Joint ventures (1)
 
 
Expensesand collectivepromotion funds
 
 
Elimination of inter-segment transactions and non-reportable assets / liabilities (2)
 
 
Total as per statement of income / statement of financial position
 
Revenues
  8,816 
  (63)
  2,313 
  (15)
  11,051 
Costs
  (1,862)
  33 
  (2,387)
  - 
  (4,216)
Gross profit / (loss)
  6,954 
  (30)
  (74)
  (15)
  6,835 
Net gain from fair value adjustment of investment properties
  22,385 
  65 
  - 
  - 
  22,450 
General and administrative expenses
  (1,924)
  6 
  - 
  24 
  (1,894)
Selling expenses
  (835)
  (5)
  - 
  - 
  (840)
Other operating results, net
  (60)
  - 
  29 
  (9)
  (40)
Profit / (loss) from operations
  26,520 
  36 
  (45)
  - 
  26,511 
Share of profit of associates and joint ventures
  (77)
  (43)
  - 
  - 
  (120)
Segment profit / (loss)
  26,443 
  (7)
  (45)
  - 
  26,391 
Reportable assets
  263,435 
  (1,770)
  - 
  26,650 
  288,315 
Reportable liabilities
  - 
  - 
  - 
  (163,606)
  (163,606)
Net reportable assets
  263,435 
  (1,770)
  - 
  (136,956)
  124,709 
 
 
 
Six Months ended December 31, 2020
 
 
 
Total
 
 
Joint ventures (1)
 
 
Expensesand collectivepromotion funds
 
 
Elimination of inter-segment transactions and non-reportable assets / liabilities (2)
 
 
Total as per statement of income / statement of financial position
 
Revenues
  5,818 
  (26)
  1,701 
  (20)
  7,473 
Costs
  (2,148)
  47 
  (1,867)
  - 
  (3,968)
Gross profit / (loss)
  3,670 
  21 
  (166)
  (20)
  3,505 
Net gain from fair value adjustment of investment properties
  14,753 
  (767)
  - 
  - 
  13,986 
General and administrative expenses
  (2,322)
  5 
  - 
  30 
  (2,287)
Selling expenses
  (1,198)
  10 
  - 
  - 
  (1,188)
Other operating results, net
  (141)
  2 
  78 
  (10)
  (71)
Profit / (loss) from operations
  14,762 
  (729)
  (88)
  - 
  13,945 
Share of profit of associates and joint ventures
  (1,218)
  535 
  - 
  - 
  (683)
Segment profit / (loss)
  13,544 
  (194)
  (88)
  - 
  13,262 
Reportable assets
  279,041 
  (1,446)
  - 
  24,483 
  302,078 
Reportable liabilities
  - 
  - 
  - 
  (162,788)
  (162,788)
Net reportable assets
  279,041 
  (1,446)
  - 
  (138,305)
  139,290 
 
 
 
11
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
(1) Represents the equity value of joint ventures that were proportionately consolidated for segment information.
(2) Includes deferred income tax assets, income tax and MPIT credits, trade and other receivables, investment in financial assets, cash and cash equivalents and intangible assets except for rights to receive future units under barter agreements, net of investments in associates with negative equity which are included in provisions in the amount of ARS 10 and ARS 12 as of December 31, 2021 and 2020 respectively.
 
Below is a summarized analysis of the segments from the Group for the periods ended December 31, 2021 and 2020:
 
 
 
Six Months ended December 31, 2021
 
 
 
Shopping Malls
 
 
Offices
 
 
Sales and developments
 
 
Hotels
 
 
International
 
 
Corporate
 
 
Others
 
 
Total
 
Revenues
  5,991 
  1,250 
  131 
  1,383 
  5 
  - 
  56 
  8,816 
Costs
  (582)
  (152)
  (135)
  (782)
  (10)
  - 
  (201)
  (1,862)
Gross profit / (loss)
  5,409 
  1,098 
  (4)
  601 
  (5)
  - 
  (145)
  6,954 
Net (loss) / gain from fair value adjustment of investment properties (i)
  (5,549)
  1,041 
  26,380 
  - 
  4 
  - 
  509 
  22,385 
General and administrative expenses
  (863)
  (246)
  (172)
  (257)
  (38)
  (280)
  (68)
  (1,924)
Selling expenses
  (272)
  (75)
  (267)
  (122)
  - 
  (84)
  (15)
  (835)
Other operating results, net
  (70)
  (2)
  (74)
  (4)
  3 
  - 
  87 
  (60)
(Loss) / profit from operations
  (1,345)
  1,816 
  25,863 
  218 
  (36)
  (364)
  368 
  26,520 
Share of profit of associates and joint ventures
  - 
  - 
  - 
  - 
  304 
  - 
  (381)
  (77)
Segment (loss) / profit
  (1,345)
  1,816 
  25,863 
  218 
  268 
  (364)
  (13)
  26,443 
 
    
    
    
    
    
    
    
    
Investment properties and trading properties
  60,687 
  89,165 
  93,881 
  - 
  114 
  - 
  2,579 
  246,426 
Investment in associates and joint ventures
  - 
  - 
  - 
  - 
  319 
  - 
  8,037 
  8,356 
Other operating assets
  390 
  2,739 
  2,310 
  3,042 
  - 
  9 
  163 
  8,653 
Operating assets
  61,077 
  91,904 
  96,191 
  3,042 
  433 
  9 
  10,779 
  263,435 
 
(i) For the six-month period ended December 31, 2021, the net gain from fair value adjustment of investment properties was ARS 22,450. The net impact of the values in pesos of our properties was mainly a consequence of the change in macroeconomic conditions:
(a) gain of ARS 2,440 as a consequence of the variation in the projected income growth rate increase and the conversion to dollars of the projected cash flow in pesos according to the exchange rate estimates used in the cash flow from shopping malls.
(b) positive impact of ARS 3,533 resulting from the conversion into pesos of the value of the shopping malls in dollars based on the exchange rate at the end of the period.
(c) an increase of 40 basis points in the discount rate, mainly due to an increase in the country-risk rate component of the WACC discount rate used to discount the cash flow, which led to a decrease in the value of the shopping malls of ARS 2,857.
(d) Additionally, due to the impact of the inflation adjustment, ARS 10,387 were reclassified for shopping malls from “Net gain from fair value adjustment” to “Inflation Adjustment” in the Statement of Income and Other Comprehensive Income.
(e) The value of our office buildings and other rental properties measured in real terms decreased by 0.67% during the six-month period ended as of December 31, 2021, due to the variation of the implicit exchange rate. Likewise, there is an impact for the sales of the period and the increase in the valuation of Costa Urbana whose development project was approved by the Legislature of the Autonomous City of Buenos Aires. See Note 8.
 
 
 
Six Months ended December 31, 2020
 
 
 
Shopping Malls
 
 
Offices
 
 
Sales and developments
 
 
Hotels
 
 
International
 
 
Corporate
 
 
Others
 
 
Total
 
Revenues
  2,933 
  1,688 
  540 
  180 
  448 
  - 
  29 
  5,818 
Costs
  (441)
  (137)
  (560)
  (506)
  (379)
  - 
  (125)
  (2,148)
Gross profit / (loss)
  2,492 
  1,551 
  (20)
  (326)
  69 
  - 
  (96)
  3,670 
Net (loss) / gain from fair value adjustment of investment properties
  (7,188)
  11,767 
  9,309 
  - 
  5 
  - 
  860 
  14,753 
General and administrative expenses
  (1,017)
  (269)
  (220)
  (237)
  (47)
  (491)
  (41)
  (2,322)
Selling expenses
  (175)
  (119)
  (798)
  (71)
  (30)
  - 
  (5)
  (1,198)
Other operating results, net
  (88)
  (5)
  (56)
  15 
  (2)
  - 
  (5)
  (141)
(Loss) / profit from operations
  (5,976)
  12,925 
  8,215 
  (619)
  (5)
  (491)
  713 
  14,762 
Share of loss of associates and joint ventures
  - 
  - 
  (23)
  - 
  (818)
  - 
  (377)
  (1,218)
Segment (loss) / profit
  (5,976)
  12,925 
  8,192 
  (619)
  (823)
  (491)
  336 
  13,544 
 
    
    
    
    
    
    
    
    
Investment properties and trading properties
  81,954 
  104,415 
  66,947 
  - 
  168 
  - 
  3,057 
  256,541 
Investment in associates and joint ventures
  - 
  - 
  940 
  - 
  2,804 
  - 
  11,833 
  15,577 
Other operating assets
  450 
  1,579 
  1,502 
  3,219 
  - 
  11 
  162 
  6,923 
Operating assets
  82,404 
  105,994 
  69,389 
  3,219 
  2,972 
  11 
  15,052 
  279,041 
 
 
 
12
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
7.
Investments in associates and joint ventures
 
Changes in the Group’s investments in associates and joint ventures for the six-month period ended December 31, 2021 and for the year ended June 30, 2021 were as follows:
 
 
 
December 31, 2021
 
 
June 30, 2021
 
Beginning of the period / year
  14,644 
  134,549 
Increase of equity interest and capital contributions
  665 
  51 
Decrease of interest in associate (iv)
  - 
  (52,812)
Deconsolidation (i)
  - 
  (58,345)
Share of profit
  30 
  (3,655)
Impairment (iii)
  (150)
  (754)
Currency translation adjustment
  (299)
  (4,311)
Dividends (v)
  (2,634)
  - 
Other comprehensive income
  - 
  (65)
Others
  - 
  (14)
End of the period / year (ii)
  12,256 
  14,644 
 
(i)
Corresponds to the deconsolidation of IDBD. See Note 4.G to the consolidated Financial Statements as of June 30, 2021.
(ii)
As of December 31, 2021 and June 30, 2021 includes ARS (10) and ARS (8), reflecting interests in companies with negative equity, which were disclosed in “Provisions” (Note 18).
(iii)
Corresponds to the investment in TGLT S.A.
(iv)
Corresponds to the sale of the remaining equity interest in Shufersal in July 2020.
(v)
Corresponds to dividends distributed by Condor. See Note 4.G.
 
 
% ownership interest
 
 
Value of Group's interest in equity
 
 
Group's interest in comprehensive income / (loss)
 
Name of the entity
 
December 31, 2021
 
 
June 30, 2021
 
 
December 31, 2021
 
 
June 30, 2021
 
 
December 31, 2021
 
 
December 31, 2020
 
Associates
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
New Lipstick
  49.96%
  49.96%
  229 
  263 
  (5)
  (569)
BHSA
  29.91%
  29.91%
  6,271 
  6,457 
  (187)
  243 
Condor
  21.70%
  18.89%
  - 
  1,951 
  302 
  (251)
Quality
  50.00%
  50.00%
  3,512 
  3,525 
  (43)
  578 
La Rural S.A.
  50.00%
  50.00%
  618 
  204 
  (5)
  49 
TGLT
  27.82%
  27.82%
  957 
  1,129 
  (82)
  (635)
Other joint ventures
  N/A 
  N/A 
  669 
  1,115 
  (249)
  (3,201)
Total associates and joint ventures
    
    
  12,256 
  14,644 
  (269)
  (3,786)
 
Below is additional information about the Group’s investments in associates and joint ventures:
 

   
 
Latest financial statements issued
 
Name of the entity
Place of business / Country of incorporation
Main activity
 
Common shares 1 vote
 
 
Share capital (nominal value)
 
 
Profit / (loss) for the period
 
 
Shareholders’ equity
 
Associates
 
 
 
 
 
 
 
 
 
 
 
 
 
 
New Lipstick
U.S.
Real estate
  N/A 
  - 
  (*) (1) 
  (*) (41) 
BHSA
Argentina
Financial
  448,689,072 
  (**) 1,500 
  (**) (620) 
  (**) 20,188 
Quality
Argentina
Real estate
  225,146,912 
  406 
  (86)
  6,912 
La Rural S.A.
Argentina
Organization of events
  714,998 
  1 
  11 
  302 
TGLT
Argentina
Real estate
  257,320,997 
  925 
  (82)
  5,117 
 
(*) 
Amounts in millions of US Dollars under USGAAP.
(**) 
Information as of December 31, 2021 according to IFRS.
 
Puerto Retiro (joint venture):
 
There have been no changes to what was informed in Note 8 to the Annual Financial Statements.
 
 
13
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
 
8.
Investment properties
 
Changes in the Group’s investment properties for the six-month period ended December 31, 2021 and for the year ended June 30, 2021 were as follows:
 
 
 
Six Months ended December 31, 2021
 
 
Year ended June 30, 2021
 
 
 
Rental properties
 
 
Undeveloped parcels of land
 
 
Properties under development
 
 
Total
 
 
Total
 
Fair value at the beginning of the period / year
  151,158 
  65,258 
  4,174 
  220,590 
  411,637 
Additions
  545 
  448 
  456 
  1,449 
  1,248 
Capitalized leasing costs
  13 
  - 
  - 
  13 
  27 
Amortization of capitalized leasing costs (i)
  (10)
  - 
  - 
  (10)
  (15)
Transfers
  (1,127)
  - 
  - 
  (1,127)
  (638)
Deconsolidation
  - 
  - 
  - 
  - 
  (141,575)
Disposals
  (4,354)
  (257)
  - 
  (4,611)
  (25,806)
Currency translation adjustment
  (13)
  - 
  (2)
  (15)
  (14,896)
Net (loss) / gain from fair value adjustment
  (3,961)
  26,334 
  77 
  22,450 
  (9,392)
Fair value at the end of the period / year
  142,251 
  91,783 
  4,705 
  238,739 
  220,590 
 
(i)
Amortization charges of capitalized leasing costs were included in “Costs” in the Statements of Income (Note 21).
 
The following amounts have been recognized in the Statements of Income:
 
 
  12.31.2021 
  12.31.2020 
Rental and services income
  9,543 
  6,319 
Direct operating expenses
  (3,291)
  (2,465)
Development expenses
  (84)
  (133)
Net realized gain from fair value adjustment of investment properties (i) (ii)
  2,062 
  11,948 
Net unrealized gain from fair value adjustment of investment properties
  20,388 
  2,038 
 
(i)
As of December 31, 2021 includes ARS 13 for the sale of Casona Hudson, ARS 61 for the sale of the Merlo Land, ARS 55 for the sale of the Mariano Acosta Land, ARS 66 for the sale of parking spaces of Libertador 498 and ARS 1,867 for the sale of floors of Catalinas Building. As of December 31, 2020 includes ARS 5,962 for the sale of Torre Boston and ARS 5,986 for the sale of Bouchard 710.
 
(ii)
As of December 31, 2021 corresponds (ARS 63) to the realized result from fair value adjustment for the period ((ARS 75) for the sale of Casona Hudson, (ARS 16) for the sale of the Merlo Land, (ARS 18) for the sale of the Mariano Acosta Land, (ARS 79) for the sale of parking spaces of Libertador 498 and ARS 125 for the sale of floors of Catalinas Building) and ARS 2,125 for realized result from fair value adjustment made in previous years (ARS 88 for the sale of Casona Hudson, ARS 77 for the sale of the Merlo Land, ARS 73 for the sale of the Mariano Acosta Land, ARS 145 for the sale of parking spaces of Libertador 498 and ARS 1,742 for the sale of floors of Catalinas Building). As of December 31, 2020, (ARS 1,825) corresponds to net realized fair value adjustment on investment properties for the period ((ARS 1,260) for the sale of Torre Boston and (ARS 565) for the sale of Bouchard 710) and ARS 13,773 corresponds to the realized fair value adjustment made in previous years (ARS 7,224 for the sale of Torre Boston and ARS 6,549 for the sale of Bouchard 710).
 
Valuation techniques are described in Note 9 to the Annual Financial Statements. There were no changes to such techniques. The Group has reassessed the assumptions December 31, 2021, considering the market conditions existing at that date due to the pandemic described in Note 29, incorporating the effect of the variation in the exchange rate in other assets denominated in US Dollars.
 
 
 
14
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
Costa Urbana –former Solares de Santa María– Costanera Sur, Buenos Aires City (IRSA)
 
On December 21, it was published the law from Buenos Aires City congress approving the Regulations for the development of the property of approximately 70 hectares, owned by the Company since 1997, previously known as "Solares de Santa María", located in front of the Río de la Plata in the South Coast of the Autonomous City of Buenos Aires, southeast of Puerto Madero. The published law grants a New Standard, designated: "U73 - Public Park and Costa Urbana Urbanization", which enables the combination of diverse uses such as homes, offices, retail, services, public spaces, education, and entertainment.
 
The Company will have a construction capacity of approximately 895,000 sqm, which will drive growth for the coming years through the development of mixed-use projects.
 
IRSA will destinate 50.8 hectares for public use, which represents approximately 71% of the total area of the property and will contribute with three additional lots of the property, two for the Sustainable Urban Development Fund and one for the Innovation Trust, Science and Technology of the Government of the Autonomous City of Buenos Aires, to which the sum of USD 2 million in cash and the amount of 3,000,000 sovereign bonds (AL35) will also be contributed.
 
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.
 
The financial valuation of the property at fair value amounts to approximately USD 360 million as of December 31, 2021.
 
9.
Property, plant and equipment
 
Changes in the Group’s property, plant and equipment for the six-month period ended December 31, 2021 and for the year ended June 30, 2021 were as follows:
 
 
 
Six Months ended December 31, 2021
 
 
Year ended June 30, 2021
 
 
 
Buildings and facilities
 
 
Machinery and equipment
 
 
Others
 
 
Total
 
 
Total
 
Costs
  8,522 
  3,027 
  696 
  12,245 
  253,050 
Accumulated depreciation
  (3,925)
  (2,822)
  (505)
  (7,252)
  (184,797)
Net book amount at the beginning of the period / year
  4,597 
  205 
  191 
  4,993 
  68,253 
Additions
  48 
  26 
  59 
  133 
  1,994 
Disposals
  - 
  - 
  - 
  - 
  (108)
Deconsolidation
  - 
  - 
  - 
  - 
  (57,798)
Reclassification to assets held for sale
  - 
  - 
  - 
  - 
  (34)
Currency translation adjustment
  - 
  - 
  - 
  - 
  (4,620)
Transfers
  1,127 
  - 
  - 
  1,127 
  1,191 
Depreciation charges (i)
  (185)
  (43)
  (16)
  (244)
  (3,885)
Balances at the end of the period / year
  5,587 
  188 
  234 
  6,009 
  4,993 
Costs
  9,697 
  3,053 
  755 
  13,505 
  12,245 
Accumulated depreciation
  (4,110)
  (2,865)
  (521)
  (7,496)
  (7,252)
Net book amount at the end of the period / year
  5,587 
  188 
  234 
  6,009 
  4,993 
 
 
 
15
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
(i)
As of December 31, 2021, depreciation charges of property, plant and equipment were recognized as follows: ARS 175 in "Costs", ARS 67 in "General and administrative expenses" and ARS 2 in "Selling expenses", respectively in the Statement of Income (Note 21).
 
10.
Trading properties
 
Changes in the Group’s trading properties for the six-month period ended December 31, 2021 and for the year ended June 30, 2021 were as follows:
 
 
 
Six Months ended December 31, 2021
 
 
Year ended June 30, 2021
 
 
 
Completed properties
 
 
Properties under development
 
 
Undeveloped sites
 
 
Total
 
 
Total
 
Beginning of the period / year
  146 
  965 
  1,006 
  2,117 
  12,975 
Additions
  - 
  108 
  1 
  109 
  969 
Deconsolidation
  - 
  - 
  - 
  - 
  (9,262)
Currency translation adjustment
  - 
  (130)
  - 
  (130)
  (836)
Disposals
  - 
  - 
  - 
  - 
  (1,729)
End of the period / year
  146 
  943 
  1,007 
  2,096 
  2,117 
Non-current
    
    
    
  1,959 
  1,980 
Current
    
    
    
  137 
  137 
Total
    
    
    
  2,096 
  2,117 
 
 
11.
Intangible assets
 
Changes in the Group’s intangible assets for the six-month period ended December 31, 2021 and for the year ended June 30, 2021 were as follows:
 
 
 
Six Months ended December 31, 2021
 
 
Year ended June 30, 2021
 
 
 
Goodwill
 
 
Information systems and software
 
 
Contracts and others
 
 
Total
 
 
Total
 
Costs
  163 
  950 
  2,852 
  3,965 
  127,288 
Accumulated amortization
  - 
  (703)
  (371)
  (1,074)
  (77,023)
Net book amount at the beginning of the period / year
  163 
  247 
  2,481 
  2,891 
  50,265 
Additions
  - 
  4 
  - 
  4 
  2,620 
Disposals
  - 
  - 
  (171)
  (171)
  (134)
Impairment
  - 
  - 
  - 
  - 
  (48)
Deconsolidation
  - 
  - 
  - 
  - 
  (44,016)
Currency translation adjustment
  - 
  - 
  - 
  - 
  (2,983)
Amortization charges (i)
  - 
  (55)
  - 
  (55)
  (2,813)
Balances at the end of the period / year
  163 
  196 
  2,310 
  2,669 
  2,891 
Costs
  163 
  954 
  2,681 
  3,798 
  3,965 
Accumulated amortization
  - 
  (758)
  (371)
  (1,129)
  (1,074)
Net book amount at the end of the period / year
  163 
  196 
  2,310 
  2,669 
  2,891 
 
(i)
As of December 31, 2021, amortization charges were recognized in the amount of ARS 11 in "Costs" and ARS 44 in "General and administrative expenses", in the Statement of Income (Note 21).
 
 
 
16
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
 
12.
Right-of-use assets
 
The Group’s right-of-use assets as of December 31, 2021 and June 30, 2021 are the following:
 
 
 
December 31, 2021
 
 
June 30, 2021
 
Real Estate
  21 
  13 
Machinery and equipment
  3 
  5 
Others
  925 
  959 
Total Right-of-use assets
  949 
  977 
Non-current
  949 
  977 
Total
  949 
  977 
 
The depreciation charge of the right-of use-assets is detailed below:
 
 
 
December 31, 2021
 
 
December 31, 2020
 
Real Estate
  28 
  1,556 
Telecommunications
  - 
  356 
Others
  7 
  340 
Total depreciation of right-of-use assets (i)
  35 
  2,252 
 
(i)
As of December 31, 2021, amortization charges were recognized in the amount of ARS 30 in "Costs" and ARS 5 in "General and administrative expenses", in the Statement of Income (Note 21). Includes ARS 2,190 charged to the result of discontinued operations as of December 31, 2020
 
 
13.
Financial instruments by category
 
This note presents the financial assets and financial liabilities by category of financial instrument and a reconciliation to the corresponding line in the Consolidated Statements of Financial Position, as appropriate. Financial assets and liabilities measured at fair value are assigned based on their different levels in the fair value hierarchy. For further information related to fair value hierarchy refer to Note 13 to the Annual Financial Statements. Financial assets and financial liabilities as of December 31, 2021 are the following:
 
 
 
Financial assets at amortized cost
 
 
Financial assets at fair value through profit or loss
 
 
Subtotal financial assets
 
 
Non-financial assets
 
 
Total
 
 
 
 
 
 
Level 1
 
 
Level 2
 
 
Level 3
 
 
 
 
 
 
 
 
 
 
December 31, 2021
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets as per Statement of Financial Position
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Trade and other receivables (excluding the allowance for doubtful accounts and other receivables)
  9,227 
  - 
  - 
  - 
  9,227 
  4,713 
  13,940 
Investments in financial assets:
    
    
    
    
    
    
    
  - Public companies’ securities
  - 
  355 
  - 
  - 
  355 
  - 
  355 
  - Bonds
  - 
  3,130 
  - 
  - 
  3,130 
  - 
  3,130 
  - Warrants from related parties
  - 
  36 
  - 
  - 
  36 
  - 
  36 
  - Investments in financial assets with quotation
  11 
  1,003 
  - 
  - 
  1,014 
  - 
  1,014 
Derivative financial instruments:
    
    
    
    
    
    
    
  - Foreign-currency future contracts
  - 
  10 
  - 
  - 
  10 
  - 
  10 
Cash and cash equivalents:
    
    
    
    
    
    
    
  - Cash at bank and on hand
  4,720 
  - 
  - 
  - 
  4,720 
  - 
  4,720 
  - Short-term investments
  - 
  2,544 
  - 
  - 
  2,544 
  - 
  2,544 
Total assets
  13,958 
  7,078 
  - 
  - 
  21,036 
  4,713 
  25,749 
 
 
 
17
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
 
 
 
Financial liabilities at amortized cost
 
 
Financial liabilities at fair value through profit or loss
 
 
Subtotal financial liabilities
 
 
Non-financial liabilities
 
 
Total
 
 
 
 
 
 
Level 1
 
 
Level 2
 
 
Level 3
 
 
 
 
 
 
 
 
 
 
December 31, 2021
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities as per Statement of Financial Position
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Trade and other payables
  3,315 
  - 
  - 
  - 
  3,315 
  4,834 
  8,149 
Borrowings (excluding finance leases)
  64,496 
  - 
  - 
  - 
  64,496 
  - 
  64,496 
Derivative financial instruments:
    
    
    
    
    
    
    
  - Swaps
  - 
  - 
  33 
  - 
  33 
  - 
  33 
Total liabilities
  67,811 
  - 
  33 
  - 
  67,844 
  4,834 
  72,678 
 
Financial assets and financial liabilities as of June 30, 2021 were as follows:
 
 
 
Financial assets at amortized cost
 
 
Financial assets at fair value through profit or loss
 
 
Subtotal financial assets
 
 
Non-financial assets
 
 
Total
 
 
 
 
 
 
Level 1
 
 
Level 2
 
 
Level 3
 
 
 
 
 
 
 
 
 
 
June 30, 2021
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets as per Statements of Financial Position
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Trade and other receivables (excluding the allowance for doubtful accounts and other receivables)
  8,709 
  - 
  - 
  - 
  8,709 
  5,952 
  14,661 
Investments in financial assets:
    
    
    
    
    
    
    
  - Public companies’ securities
  - 
  1,176 
  - 
  - 
  1,176 
  - 
  1,176 
  - Bonds
  - 
  3,265 
  - 
  - 
  3,265 
  - 
  3,265 
  - Investments in financial assets with quotation
  11 
  770 
  - 
  58 
  839 
  - 
  839 
Cash and cash equivalents:
    
    
    
    
    
    
    
  - Cash at bank and on hand
  1,359 
  - 
  - 
  - 
  1,359 
  - 
  1,359 
  - Short term investments
  - 
  967 
  - 
  - 
  967 
  - 
  967 
Total assets
  10,079 
  6,178 
  - 
  58 
  16,315 
  5,952 
  22,267 
 
 
 
 
Financial liabilities at amortized cost
 
 
Financial liabilities at fair value through profit or loss
 
 
Subtotal financial liabilities
 
 
Non-financial liabilities
 
 
Total
 
 
 
 
 
 
Level 1
 
 
Level 2
 
 
Level 3
 
 
 
 
 
 
 
 
 
 
June 30, 2021
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities as per Statement of Financial Position
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Trade and other payables
  3,474 
  - 
  - 
  - 
  3,474 
  4,343 
  7,817 
Borrowings (excluding finance leases)
  74,834 
  - 
  - 
  - 
  74,834 
  - 
  74,834 
Derivative financial instruments:
    
    
    
    
    
    
    
  - Swaps
  - 
  - 
  69 
  - 
  69 
  - 
  69 
Total liabilities
  78,308 
  - 
  69 
  - 
  78,377 
  4,343 
  82,720 
 
The fair value of financial assets and liabilities at their amortized cost does not differ significantly from their book value, except for borrowings (Note 17). The fair value of payables approximates their respective carrying amounts because, due to their short-term nature, the effect of discounting is not considered significant. Fair values are based on discounted cash flows (Level 3).
 
The valuation models used by the Group for the measurement of Level 2 and Level 3 instruments are no different from those used as of June 30, 2021.
 
As of December 31, 2021, there have been no changes to the economic or business circumstances affecting the fair value of the financial assets and liabilities of the Group, except as mentioned in Note 29.
 
 
18
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
The Group uses a range of valuation models for the measurement of Level 2 and Level 3 instruments. Details of such models are presented in the following table. When no quoted prices are available in an active market, fair values (particularly with derivatives) are based on recognized valuation methods.
 
Description
Pricing model / method
Parameters
 
Fair value hierarchy
 
Range
 
 
 
 
 
 
 
 
 
Derivative financial instruments – Swaps
Theoretical price
Underlying asset price and volatility
Level 2 and 3
 
  - 
 
The following table presents the changes in Level 3 instruments as of December 31, 2021 and June 30, 2021:
 
 
 
Investments in financial assets - Others
 
 
Total as of December 31, 2021
 
 
Total as of June 30, 2021
 
Balances at beginning of the period / year
  58 
  58 
  5,902 
Currency translation adjustment
  (6)
  (6)
  (5)
Deconsolidation
  - 
  - 
  (5,850)
Write off
  (70)
  (70)
  - 
Gain for the period / year (i)
  18 
  18 
  11 
Balances at the end of the period / year
  - 
  - 
  58 
 
(i)
Included within “Financial results, net” in the Statements of Income.
 
14.
Trade and other receivables
 
Group’s trade and other receivables as of December 31, 2021 and June 30, 2021 are as follows:
 
 
 
December 31, 2021
 
 
June 30, 2021
 
Sale, leases and services receivables
  6,070 
  5,532 
Less: Allowance for doubtful accounts
  (887)
  (1,025)
Total trade receivables
  5,183 
  4,507 
Prepaid expenses
  633 
  970 
Borrowings, deposits and others
  3,769 
  4,419 
Advances to suppliers
  858 
  1,144 
Tax receivables
  1,417 
  1,404 
Others
  1,193 
  1,192 
Total other receivables
  7,870 
  9,129 
Total trade and other receivables
  13,053 
  13,636 
Non-current
  2,788 
  3,429 
Current
  10,265 
  10,207 
Total
  13,053 
  13,636 
 
Movements on the Group’s allowance for doubtful accounts were as follows:
 
 
 
December 31, 2021
 
 
June 30, 2021
 
Beginning of the period / year
  1,025 
  6,757 
Additions (i)
  186 
  909 
Recovery (i)
  (150)
  (276)
Currency translation adjustment
  14 
  (332)
Deconsolidation
  - 
  (5,592)
Receivables written off during the period/year as uncollectable
  - 
  (34)
Inflation adjustment
  (188)
  (407)
End of the period / year
  887 
  1,025 
 
(i)
Additions and recovery of the allowance for doubtful accounts have been included in “Selling expenses” in the Statement of Income (Note 21).
 
 
19
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
15.
Cash flow and cash equivalent information
 
Following is a detailed description of cash flows generated by the Group’s operations for the six-month period ended December 31, 2021 and 2020:
 
 
Note
 
Six Months ended December 31, 2021
 
 
Six Months ended December 31, 2020
 
Profit / (loss) for the period
 
  25,520 
  (1,758)
Profit for the period from discontinued operations
 
  - 
  10,748 
Adjustments for:
 
    
    
Income tax
19
  5,257 
  6,044 
Amortization and depreciation
21
  344 
  346 
Net loss from fair value adjustment of investment properties
 
  (22,450)
  (13,986)
Net gain from disposal of intangible assets
 
  (77)
  - 
Financial results, net
 
  (3,975)
  (3,203)
Provisions and allowances
 
  545 
  864 
Share of (profit) / loss of associates and joint ventures
7
  120 
  683 
Changes in operating assets and liabilities:
 
    
    
(Increase) / decrease in inventories
 
  (5)
  15 
(Increase) / decrease in trading properties
 
  (48)
  1,131 
Increase in trade and other receivables
 
  (446)
  (1,035)
Increase in trade and other payables
 
  44 
  3,169 
Increase in salaries and social security liabilities
 
  24 
  11 
Decrease in provisions
 
  (54)
  (65)
Net cash generated by continuing operating activities before income tax paid
 
  4,799 
  2,964 
Net cash generated by discontinued operating activities before income tax paid
 
  - 
  4,033 
Net cash generated by operating activities before income tax paid
 
  4,799 
  6,997 
 
    
    
 
The following table presents a detail of significant non-cash transactions occurred in the six-month period ended December 31, 2021 and 2020:
 
 
 
Six Months ended December 31, 2021
 
 
Six Months ended December 31, 2020
 
Increase in rights of use through increased lease liabilities
  - 
  36 
Decrease in investment properties through an increase in property, plant and equipment
  1,127 
  - 
Decrease in lease liabilities through a decrease in trade and other receivables
  3 
  - 
Decrease of property, plant and equipment through an increase of receivables and tax debts
  - 
  50 
Increase of trading properties through an increase of trade and other payables
  - 
  386 
Distribution of dividends in shares
  - 
  875 
Currency translation adjustment
  434 
  12,293 
Increase in investment properties through an increase in trade and other payables
  135 
  - 
Increase in investments in associates and joint ventures through a decrease in investments in financial assets
  635 
  - 
 
 
16.
Trade and other payables
 
Group’s trade and other payables as of December 31, 2021 and June 30, 2021 were as follows:
 
 
 
December 31, 2021
 
 
June 30, 2021
 
Trade payables
  1,020 
  1,239 
Advances from sales, leases and services
  4,031 
  3,629 
Accrued invoices
  864 
  1,035 
Total trade payables
  5,915 
  5,903 
Taxes payable
  890 
  823 
Other payables
  1,344 
  1,091 
Total other payables
  2,234 
  1,914 
Total trade and other payables
  8,149 
  7,817 
Non-current
  1,839 
  1,671 
Current
  6,310 
  6,146 
Total
  8,149 
  7,817 
 
 
20
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
 
17.
Borrowings
 
The breakdown of the Group’s borrowings as of December 31, 2021 and June 30, 2021 was as follows:
 
 
 
Total as of December 31, 2021
 
 
Total as of June 30, 2021
 
 
Fair value as of December 31, 2021
 
 
Fair value as of June 30, 2021
 
NCN
  55,233 
  62,489 
  53,533 
  58,749 
Bank loans
  2,217 
  3,753 
  2,217 
  3,769 
Bank overdrafts
  5,306 
  6,364 
  5,306 
  6,359 
Other borrowings
  1,379 
  1,666 
  1,377 
  1,666 
AABE Debt
  306 
  311 
  306 
  311 
Loans with non-controlling interests
  55 
  251 
  55 
  251 
Total borrowings
  64,496 
  74,834 
  62,794 
  71,105 
Non-current
  52,812 
  56,275 
    
    
Current
  11,684 
  18,559 
    
    
Total
  64,496 
  74,834 
    
    
 
Issuance of IRSA Non-convertible Notes
 
On August 26, 2021, the Company issued USD 58.1 million Non-convertible Notes in the local market through the following instruments:
 
●
Series XIII: denominated in dollars and payable in pesos at the applicable exchange rate for USD 58.1 million at a fixed rate of 3.9%, with semi-annual payments. The principal payment will be in three installments, counted from the date of issuance: the first for 25% of the nominal value on August 26, 2023; the second for 25% on February 26, 2024, and the third for 50% of the nominal value on August 26, 2024. The price of issuance was 100.0% of the nominal value.
 
The funds have been used to refinance short-term liabilities.
 
IRSA´s Series VII Non-convertible Notes Redemption
  
The Company resolved to early redeem the Series VII Notes maturing last January 21, 2022.
 
The redemption took place on November 25, 2021, in accordance with the terms and conditions detailed in the Prospectus Supplement for Series VII Notes.
 
The redemption price was 100% of the face value of the Series VII Notes, plus accrued and unpaid interest, as of the date set for redemption.
 
 
21
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
 
18.
Provisions
 
The table below shows the movements in the Group's provisions categorized by type:
 
 
 
Six Months ended December 31, 2021
 
 
Year ended June 30, 2021
 
 
 
Income tax (iii)
 
 
Legal claims
 
 
Investments in associates and joint ventures (ii)
 
 
Total
 
 
Total
 
Beginning of period / year
  - 
  306 
  8 
  314 
  9,955 
Additions (i)
  71 
  153 
  - 
  224 
  11 
Share of loss of associates
  - 
  - 
  2 
  2 
  - 
Deconsolidation
  - 
  - 
  - 
  - 
  (8,545)
Recovery (i)
  - 
  (18)
  - 
  (18)
  (63)
Used during the period / year
  - 
  (54)
  - 
  (54)
  (156)
Inflation adjustment
  - 
  (53)
  - 
  (53)
  (137)
Transfers (Note 19)
  1,377 
  - 
  - 
  1,377 
  - 
Currency translation adjustment
  - 
  - 
  - 
  - 
  (751)
End of period / year
  1,448 
  334 
  10 
  1,792 
  314 
Non-current
    
    
    
  1,576 
  137 
Current
    
    
    
  216 
  177 
Total
    
    
    
  1,792 
  314 
 
(i) Additions and recovery of legal claims are included in "Other operating results, net". Tax contingency increases are included in “Financial results, net”
(ii) Corresponds to investments in Puerto Retiro, company that has negative equity.
(iii) See Note 19 – Submission of income tax presentation.
 
There were no significant changes to the processes mentioned in Note 18 to the Annual Financial Statements.
 
19.
Taxes
 
The details of the Group’s income tax, is as follows:
 
 
December 31, 2021
 
 
December 31, 2020
 
Current income tax
  (779)
  15 
Deferred income tax
  (4,478)
  (6,059)
Income tax from continuing operations
  (5,257)
  (6,044)
 
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 period ended December 31, 2021 and 2020:
 
 
 
Six Months ended December 31, 2021
 
 
Six Months ended December 31, 2020
 
Profit from continuing operations at tax rate applicable in the respective countries
  (10,772)
  (4,510)
Permanent differences:
    
    
Share of profit of associates and joint ventures
  42 
  205 
Unrecognized tax loss carryforwards
  3,809 
  (1,787)
Inflation adjustment permanent difference
  4,948 
  1,819 
Tax rate differential
  69 
  2,638 
Non-taxable profit, non-deductible expenses and others
  (213)
  91 
Tax inflation adjustment
  (3,140)
  (4,500)
Income tax from continuing operations
  (5,257)
  (6,044)
 
 
 
 
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IRSA Inversiones y Representaciones Sociedad Anónima
 
 
The gross movement in the deferred income tax account is as follows:
 
 
 
December 31, 2021
 
 
June 30, 2021
 
Beginning of period / year
  (82,264)
  (78,519)
Currency translation adjustment
  - 
  2,024 
Deconsolidation
  - 
  18,901 
Assets held for sale
  - 
  46 
Revaluation surplus reserve
  - 
  (100)
Deferred income tax charge
  (4,478)
  (24,616)
End of period / year
  (86,742)
  (82,264)
Deferred income tax assets
  551 
  537 
Deferred income tax liabilities
  (87,293)
  (82,801)
Deferred income tax liabilities, net
  (86,742)
  (82,264)
 
As of December 31, 2021, unrecognized ARS 4,250 million of tax loss carry forward. Based on the evolution of the business, Management is evaluating their recoverability.
 
Submission of income tax presentation
 
Dated November 15, 2021 IRSA CP hereinafter "the taxpayer", which according to what is detailed in the Note. 4.1 has been absorbed by the Company, filed to the Argentine Tax Authority the income tax for the fiscal year ended June 30, 2021 applying the systemic and comprehensive inflation adjustment mechanism as detailed: restating tax amortizations according to articles 87 and 88; updating the computable cost of real estate acquired or built prior to July 1, 2018 and sold in this fiscal year under the terms of article 63; updating the loss of the fiscal period 2018, until the concurrence of the tax result of the exercise, following the methodology provided in article 25 and updating the costs of inventories as established in article 59, all articles mentioned belong to the income tax law (ordered text in 2019).
 
The non-application of the aforementioned mechanisms would have implied that the tax to be paid amounted to ARS 1,377, in this way the effective rate to be paid would have consumed a substantial portion of the income obtained by the taxpayer exceeding the reasonable limit of taxation, being configured in the opinion of the taxpayer and his tax and legal advisors an assumption of confiscation, an assumption that at the date of issuance of these financial statements has not been validated or challenged by the Argentine Tax Authority or by higher courts. Together with the aforementioned income tax presentation, a multinote form was presented in which the application of the mechanisms was reported, arguing that the effective tax rate would represent a percentage that would exceed the reasonable limits of imposition, setting up a situation of confiscation, in violation of art. 17 of the National Constitution (according to doctrine of the judgment "Candy S.A. c/AFIP and another a/ protection action", judgment of 07/03/2009, Judgments 332:1571, and subsequent precedents).
 
The aforementioned legal doctrine of the national supreme court is fully applicable to the particular case of IRSA, since the application of the regulations that do not allow the application of the integral and systematic inflation adjustment would prevent, as happened in the "Candy case", recognizing the totality of the inflationary effect in its tax balance causing the company to pay taxes on fictitious income.
 
Notwithstanding what is detailed in the previous paragraph, and given the existing background, the taxpayer timely determined and accounted for the income tax for the fiscal year ended June 30, 2021 without considering the aforementioned adjustment mechanisms, considering that , in the opinion of their tax advisors, the Argentine Tax Authority could challenge the presentation and said challenge could be validated by higher courts because there is no uniform jurisprudence to date that irrefutably validates the taxpayer's position. In this sense, after the merger process detailed in Note 4.1, the Company's Board of Directors has reassessed, together with its tax advisors, the characteristics of the presentation, the existing background and the analysis that the taxpayer made in a timely manner, having concluded in the same sense and therefore it has decided to keep the liability accounted for, which at the closing date of these financial statements with the computation of accrued interest amounts to ARS 1,448, and is disclosed in the item Non-current provisions. As of the date of issuance of these financial statements, the Company has not received any challenge or formal rejection by the Tax Authority.
 
 
 
 
23
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
 
20.
Revenues
 
 
Six Months ended December 31, 2021
 
 
Six Months ended December 31, 2020
 
Rental and services income
  9,543 
  6,319 
Sales of trading properties and developments
  126 
  973 
Revenue from hotels operation and tourism services
  1,382 
  181 
Total Group’s revenues
  11,051 
  7,473 
 
21.
Expenses by nature
 
The Group discloses expenses in the statements of income by function as part of the line items “Costs”, “General and administrative expenses” and “Selling expenses”. The following table provides additional disclosures regarding expenses by nature and their relationship to the function within the Group.
 
 
 
Costs
 
 
General and administrative expenses
 
 
Selling expenses
 
 
Total as of December 31, 2021
 
 
Total as of December 31, 2020
 
Cost of sale of goods and services
  154 
  - 
  - 
  154 
  869 
Salaries, social security costs and other personnel expenses
  1,485 
  821 
  49 
  2,355 
  2,100 
Depreciation and amortization
  226 
  116 
  2 
  344 
  346 
Fees and payments for services
  131 
  249 
  32 
  412 
  773 
Maintenance, security, cleaning, repairs and others
  1,224 
  151 
  1 
  1,376 
  1,038 
Advertising and other selling expenses
  467 
  - 
  141 
  608 
  263 
Taxes, rates and contributions
  370 
  64 
  571 
  1,005 
  1,019 
Director´s fees
  - 
  385 
  - 
  385 
  761 
Leases and service charges
  98 
  27 
  3 
  128 
  117 
Allowance for doubtful accounts, net
  - 
  - 
  36 
  36 
  33 
Other expenses
  61 
  81 
  5 
  147 
  124 
Total as of December 31, 2021
  4,216 
  1,894 
  840 
  6,950 
  - 
Total as of December 31, 2020
  3,968 
  2,287 
  1,188 
  - 
  7,443 
 
 
22.
Cost of goods sold and services provided
 
 
 
Total as of December 31, 2021
 
 
Total as of December 31, 2020
 
Inventories at the beginning of the period
  2,204 
  21,447 
Purchases and expenses
  4,329 
  35,452 
Currency translation adjustment
  (129)
  (6,446)
Disposals
  - 
  (1,416)
Deconsolidation
  - 
  (5,675)
Inventories at the end of the period
  (2,188)
  (2,411)
Total costs
  4,216 
  40,951 
 
The following table presents the composition of the Group’s inventories as of December 31, 2021 and June 30, 2021:
 
 
 
Total as of December 31, 2021
 
 
Total as of June 30, 2021
 
Real estate
  2,096 
  2,117 
Others
  92 
  87 
Total inventories at the end of the period (*)
  2,188 
  2,204 
 
(*) Inventories include trading properties and inventories.
 
 
 
24
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
 
23.
Other operating results, net
 
 
 
Six Months ended December 31, 2021
 
 
Six Months ended December 31, 2020
 
Donations
  (34)
  (93)
Lawsuits and other contingencies
  (135)
  (76)
Management fees
  11 
  6 
Operating interest expense
  79 
  70 
Others
  39 
  22 
Total other operating results, net
  (40)
  (71)
 
24.
Financial results, net
 
 
 
Six Months ended December 31, 2021
 
 
Six Months ended December 31, 2020
 
Finance income:
 
 
 
 
 
 
 - Interest income
  157 
  73 
 - Dividend income
  - 
  30 
Total finance income
  157 
  103 
Finance costs:
    
    
 - Interest expenses
  (3,507)
  (4,567)
 - Other finance costs
  (350)
  (599)
Subtotal finance costs
  (3,857)
  (5,166)
Capitalized finance costs
  - 
  385 
Total finance costs
  (3,857)
  (4,781)
Other financial results:
    
    
 - Fair value gain of financial assets and liabilities at fair value through profit or loss, net
  857 
  5,686 
 - Exchange differences, net
  5,986 
  (42)
 - Gain / (loss) from repurchase of negotiable obligations
  790 
  (331)
 - Gain / (loss) from derivative financial instruments, net
  11 
  (476)
 - Other financial results
  12 
  (61)
Total other financial results
  7,656 
  4,776 
 - Inflation adjustment
  430 
  1,674 
Total financial results, net
  4,386 
  1,772 
  
25.
Related party transactions
 
The following is a summary of the balances with related parties as of December 31, 2021 and June 30, 2021:
 
Item
 
 December 31, 2021
 
 
 June 30, 2021
 
Trade and other receivables
  2,772 
  3,590 
Investments in financial assets
  2,174 
  1,897 
Borrowings
  (797)
  (1,086)
Trade and other payables
  (582)
  (550)
Total
  3,567 
  3,851 
 
 
 
25
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
 
 Related party
 
 December 31, 2021
 
 
 June 30, 2021
 
 Description of transaction
 Item
New Lipstick LLC
  25 
  28 
 Reimbursement of expenses receivable
 Trade and other receivable
Condor
  - 
  662 
 Public company’s securities
 Trade and other receivable
 
  - 
  344 
 Loans granted
 Trade and other receivable
 
  - 
  6 
 Others
 Trade and other receivable
 
  - 
  58 
 Others
 Investment in financial assets
Lipstick Management LLC
  (176)
  (193)
 Loans obtained
 Borrowings
Metropolitan 885 Third Av. LLC
  (219)
  (568)
 Loans obtained
 Borrowings
La Rural S.A.
  125 
  88 
 Loans granted
 Trade and other receivable
 
  204 
  246 
 Dividends
 Trade and other receivable
 
  (5)
  (15)
 Leases and/or rights of use payable
 Trade and other payables
Other associates and joint ventures
  - 
  2 
 Reimbursement of expenses receivable
 Trade and other receivable
 
  (39)
  (44)
 Loans obtained
 Borrowings
 
  6 
  7 
  Leases and/or rights of use receivable
 Trade and other receivable
 
  10 
  (2)
 Unpaid contributions
 Trade and other payables
 
  14 
  7 
 Management Fee
 Trade and other receivable
 
  (101)
  (126)
 NCN
 Borrowings
 
  (29)
  (88)
 Others
 Trade and other payables
 
  24 
  29 
 Others
 Trade and other receivable
 
  1 
  1 
 Share based payments
 Trade and other payables
 
  - 
  (7)
 Lease liabilities
 Trade and other payables
 
  - 
  8 
 Loans granted
 Trade and other receivable
 
  36 
  - 
 Warrants from related parties
 Investment in financial assets
Total associates and joint ventures
  (124)
  443 
 
 
Cresud
  6 
  16 
 Reimbursement of expenses receivable
 Trade and other receivable
 
  (193)
  (107)
 Corporate services payable
 Trade and other payables
 
  2,138 
  1,839 
 NCN
 Investment in financial assets
 
  (117)
  (174)
 Others
 Trade and other payables
 
  (3)
  (4)
 Share based payments
 Trade and other payables
Total parent company
  1,831 
  1,570 
 
 
Futuros y Opciones S.A.
  - 
  (114)
 Loans obtained
 Borrowings
 
  2 
  4 
 Others
 Trade and other receivable
Helmir S.A.
  (35)
  (39)
 NCN
Borrowings
Total subsidiaries of parent company
  (33)
  (149)
 
 
Directors
  (218)
  (152)
 Fees for services received
 Trade and other payables
 
  5 
  6 
 Advances
 Trade and other receivable
Finkelstein
  (172)
  - 
 Loans obtained
 Borrowings
Yad Leviim LTD
  1,770 
  1,938 
 Loans granted
 Trade and other receivable
Others (1)
  (2)
  (1)
 Legal Services
 Trade and other payables
 
  (55)
  (2)
 Loans obtained
 Borrowings
 
  570 
  176 
 Others
 Trade and other receivable
 
  (19)
  - 
 Others
 Trade and other payables
 
  (7)
  (1)
 Management Fee
 Trade and other payables
 
  21 
  23 
 Reimbursement of expenses receivable
 Trade and other receivable
Total directors and others
  1,893 
  1,987 
 
 
 Total at the end of the period / year
  3,567 
  3,851 
 
 
 
(1) Includes CAMSA, Estudio Zang, Bergel & Viñes, Austral Gold, Fundación IRSA, Hamonet S.A., CAM Communication LP, Gary Gladstein and Fundación Museo de los Niños.
 
 
26
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
The following is a summary of the results with related parties for the six-month periods ended December 31, 2021 and 2020:
 
Related party
 
 Six Months ended December 31, 2021
 
 
 Six Months ended December 31, 2020
 
Description of transaction
 BACS
  22 
  48 
 Leases and/or rights of use
 BHN Vida S.A
  12 
  - 
 Leases and/or rights of use
 BHN Seguros Generales S.A.
  11 
  - 
 Financial operations
 Helmir
  1 
  - 
 Financial operations
 Other associates and joint ventures
  - 
  (5)
 Leases and/or rights of use
 
  - 
  (26)
 Corporate services
Total associates and joint ventures
  46 
  17 
 
Cresud
  30 
  26 
 Leases and/or rights of use
 
  (324)
  (445)
 Corporate services
 
  (126)
  245 
 Financial operations
Total parent company
  (420)
  (174)
 
 Directors
  (370)
  (761)
 Fees and remunerations
 Yad Leviim LTD
  44 
  4 
 Financial operations
 
  (17)
  - 
 Donations
 
  (17)
  - 
 Legal services
 
  - 
  18 
 Fees and remuneration
Total others
  (360)
  (739)
 
Total at the end of the period
  (734)
  (896)
 
 
(1)
Includes Isaac Elsztain e Hijos, CAMSA. Hamonet S.A., Ramat Hanassi, Estudio Zang, Bergel y Viñes, Austral Gold, La Rural, New Lipstick, Condor, TGLT and Fundación IRSA.
 
The following is a summary of the transactions with related parties for the six-month periods ended December 31, 2021 and 2020:
 
Related party
 
 Six Months ended December 31, 2021
 
 
 Six Months ended December 31, 2020
 
Description of the operation
Cresud
  - 
  (528)
Dividends granted
Total dividends distribution
  - 
  (528)
 
Quality
  30 
  29 
Capital contributions
Condor
  635 
  - 
Exchange of shares
Puerto Retiro
  - 
  12 
Capitalized loan
Total capital contributions
  665 
  41 
 
Condor
  2,634 
  - 
Purchase and exchange of shares
Total other transactions
  2,634 
  - 
 
 
 
 
27
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
26.
CNV General Resolution N° 622
 
As required by Section 1°, Chapter III, Title IV of CNV General Resolution N° 622, below there is a detail of the notes to the Unaudited Condensed Interim Consolidated Financial Statements that disclose the information required by the Resolution in Exhibits.
 
Exhibit A - Property, plant and equipment
Note 8 Investment properties and Note 9 Property, plant and equipment
Exhibit B - Intangible assets
Note 11 Intangible assets
Exhibit C - Investment in associates
Note 7 Investments in associates and joint ventures
Exhibit D - Other investments
Note 13 Financial instruments by category
Exhibit E – Provisions
Note 18 Provisions
Exhibit F - Cost of sales and services provided
Note 22 Cost of goods sold and services provided
Exhibit G - Foreign currency assets and liabilities
Note 27 Foreign currency assets and liabilities
 
27.
Foreign currency assets and liabilities
 
Book amounts of foreign currency assets and liabilities are as follows:
 
Item / Currency (1)
 
Amount (2)
 
 
Peso exchange rate (3)
 
 
Total as of 12.31.2021
 
 
Total as of 06.30.2021
 
Assets
 
 
 
 
 
 
 
 
 
 
 
 
Trade and other receivables
 
 
 
 
 
 
 
 
 
 
 
 
US Dollar
  29 
  102.52 
  2,990 
  3,914 
Euros
  0 
  115.89 
  11 
  29 
Receivables with related parties:
    
    
    
    
US Dollar
  18 
  102.72 
  1,831 
  2,315 
Total trade and other receivables
    
    
  4,832 
  6,258 
Investments in financial assets
    
    
    
    
US Dollar
  9 
  102.52 
  892 
  813 
Pounds
  1 
  138.25 
  85 
  120 
Nuevo Israel Shekel
  24 
  33.06 
  786 
  735 
Investments with related parties:
    
    
    
    
US Dollar
  23 
  102.72 
  2,394 
  2,700 
Total investments in financial assets
    
    
  4,157 
  4,368 
Cash and cash equivalents
    
    
    
    
US Dollar
  17 
  102.52 
  1,771 
  1,269 
Euros
  0 
  115.89 
  1 
  1 
Total cash and cash equivalents
    
    
  1,772 
  1,270 
Total Assets
    
    
  10,761 
  11,896 
 
    
    
    
    
Liabilities
    
    
    
    
Trade and other payables
    
    
    
    
US Dollar
  10 
  102.72 
  986 
  1,456 
Euros
  - 
  116.37 
  - 
  39 
Payables to related parties:
    
    
    
    
US Dollar
  0 
  102.72 
  9 
  64 
Total Trade and other payables
    
    
  995 
  1,559 
Borrowings
    
    
    
    
US Dollar
  511 
  102.72 
  52,449 
  60,334 
Borrowings with related parties
    
    
    
    
US Dollar
  7 
  102.72 
  764 
  1,752 
Total Borrowings
    
    
  53,213 
  62,086 
Derivative financial instruments
    
    
    
    
US Dollar
  0 
  102.72 
  33 
  70 
Total derivative financial instruments
    
    
  33 
  70 
Lease liabilities
    
    
    
    
US Dollar
  9 
  102.72 
  876 
  942 
Lease liabilities with related parties
    
    
    
    
US Dollar
  - 
  102.72 
  - 
  7 
Total lease liabilities
    
    
  876 
  949 
Total Liabilities
    
    
  55,117 
  64,664 
 
(1) Considering foreign currencies those that differ from each Group’s subsidiaries functional currency at each period/year-end.
(2) Stated in millions of each foreign currency.
(3) Exchange rates as of December 31, 2021 according to Banco de la Nación Argentina.
 
 
28
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
28.
Results from discontinued operations
 
 
The results of the discontinued operations include the IDBD / DIC operations which were deconsolidated in the comparative period (see Note 4.G to the Annual Financial Statements).
 
 
 
Six Months ended December 31, 2021
 
 
Six Months ended December 31, 2020
 
Revenues
  - 
  45,579 
Costs
  - 
  (36,983)
Gross profit
  - 
  8,596 
Net gain from fair value adjustment of investment properties
  - 
  (33)
General and administrative expenses
  - 
  (5,247)
Selling expenses
  - 
  (4,998)
Other operating results, net
  - 
  1,706 
Profit from operations
  - 
  24 
Share of profit of associates and joint ventures
  - 
  866 
Profit before financial results and income tax
  - 
  890 
Finance income
  - 
  633 
Finance cost
  - 
  (8,311)
Other financial results
  - 
  549 
Financial results, net
  - 
  (7,129)
Profit before income tax
  - 
  (6,239)
Income tax
  - 
  333 
Loss from operations that are discontinued
  - 
  (5,906)
Loss for loss of control
  - 
  (4,842)
Loss from discontinued operations
  - 
  (10,748)
 
    
    
Loss for the period from discontinued operations attributable to:
    
    
Equity holders of the parent
  - 
  (8,488)
Non-controlling interest
  - 
  (2,260)
Loss per share from discontinued operations attributable to equity holders of the parent:
    
    
Basic
  - 
  (14.76)
Diluted
  - 
  (14.76)

29.
Other relevant events of the period
 
IRSA Shareholders’ Meeting
 
On October 21, 2021, the Ordinary Shareholders’ Meeting approved among others:
 
Partially write off the special reserve in the amount of ARS 30,693 which, restated for inflation, amounts to the sum of ARS 36,967, and use it for the total absorption of the negative result for the fiscal year ended June 30, 2021.
 
Warrants exercise
 
During the six-month period ended December 31, 2021, certain warrant holders exercised their right to acquire additional shares. As of December 31, 2021, USD 15,518.30 was collected, for a converted common shares equivalent of 35,922. Amounts in USD are expressed in integers
 
 
29
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
 
Economic context in which the Group operates
 
The Group operates in a complex context both due to macroeconomic conditions, whose main variables have recently experienced strong volatility, as well as regulatory, social, and political conditions, both nationally and internationally.
 
The results from operations may be affected by fluctuations in the inflation and the exchange rate of the Argentine peso against other currencies, mainly the dollar, changes in interest rates which have an impact on the cost of capital, changes in government policies, capital controls and other political or economic events both locally and internationally.
 
The main indicators of the Argentine economy are described below:
 
●
In November 2021, the Monthly Economic Activity Estimator (“EMAE” in Spanish) reported by the National Institute of Statistics and Censuses (“INDEC” in Spanish), registered a variation of 9.3% compared to the same month of 2020, and 1.7% compared to the previous month.
 
●
The annual retail inflation reached 50.94% in the last 12 months. The survey on market expectations prepared by the Argentine Central Bank in December 2021, called the Market Expectations Survey (“REM” in Spanish), estimates a retail inflation of 54.8% i.a. for December 2022 and 43.4% for December 2023. Analysts participating in the REM forecast a rebound in economic activity in 2022, reaching an economic growth of 2.9%.
 
●
In the period from December 2020 to December 2021, the Argentine peso depreciated 22.1% against the US dollar according to the wholesale average exchange rate of Banco de la Nación Argentina. Given the exchange restrictions in force since August 2019, as of December 31, 2021, there is an exchange gap of approximately 92.3% between the official price of the dollar and its price in parallel markets, which impacts the level of activity in the economy and affects the level of reserves of the Argentine Central Bank. Additionally, these exchange restrictions, or those that may be dictated in the future, could affect the Group's ability to access the Single Free Exchange Market (“MULC” in Spanish) to acquire the necessary currencies to meet its financial obligations.
 
COVID-19 Pandemic
 
In December 2019, a new strain of coronavirus (SARS-COV-2), which caused severe acute respiratory syndrome (COVID-19) appeared in Wuhan, China. On March 11, 2020, the World Health Organization declared COVID-19 a pandemic. In response, countries have taken extraordinary measures to contain the spread of the virus, including imposing travel restrictions and closing borders, closing businesses deemed non-essential, instructing residents to practice social distancing, implementing lockdowns, among other measures. The ongoing pandemic and these extraordinary government measures are affecting global economic activity, resulting in significant volatility in global financial markets.
 
On March 3, 2020, the first case of COVID-19 was registered in the country and as of today, more than 8,500,000 cases of infections had been confirmed in Argentina, by virtue of which the Argentinian Government implemented a series of health measures of social, preventive and mandatory lockdown at the national level with the closure of non-essential activities, including shopping malls, as well as the suspension of flights and border closures, for much of the years 2020 and 2021.
 
Since the beginning of fiscal year 2022, and until the date of presentation of the financial statements, the Company's shopping malls are fully operational, as well as the office buildings, despite the remote work modality that some tenants continue to apply. Regarding hotels, although they have been operating since December 2020, the sector continues working with certain restrictions on air flows and the influx of international tourism.
 
The final extent of the Coronavirus outbreak and its impact on the country's economy is still uncertain. However, although it has produced significant short-term effects, they are not expected to affect business continuity and the Group’s ability to meet its financial commitments for the next twelve months.
 
 
30
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
The Group is closely monitoring the situation and taking all necessary measures to preserve human life and the Group's businesses.
 
30.
Subsequent events
 
Transfer of rights Libertador Trust
 
On February 2, 2022, the deed for transfer of rights of an apartment and complementary units of the Libertador Trust was signed for USD 0.9 million.
 
  31
 
 
 
 
 
Free translation from the original prepared in Spanish for publication in Argentina
REVIEW REPORT ON THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
 
To the Shareholders, President and Directors of
IRSA Inversiones y Representaciones Sociedad Anónima
Legal address: Carlos Della Paolera 261 - 9th floor
Autonomous City of Buenos Aires
Tax Registration Number: 30-52532274-9
 
 
Introduction
We have reviewed the accompanying unaudited condensed interim consolidated financial statements of IRSA Inversiones y Representaciones Sociedad Anónima and its subsidiaries (“the Company”), which comprise the unaudited condensed interim consolidated statement of financial position at December 31, 2021, the unaudited condensed interim consolidated statements of income and other comprehensive income for the six month period and threemonth period ended December 31, 2021, the unaudited condense interim consolidated statements of changes in shareholders’ equity and of cash flows for the six month period then ended, and selected explanatory notes.
 
The balances and other information for the fiscal year ended on June 30, 2021 and its interim periods are an integral part of the financial statements mentioned above; therefore, they must be considered in connection with these financial statements.
 
Management’s responsibility
The Board of Directors of the Company is responsible for the preparation and presentation of these unaudited condensed interim consolidated financial statements in accordance with International Financial Reporting Standards, adopted by the Argentine Federation of Professional Councils in Economic Sciences (FACPCE) as professional accounting standards and included by the National Securities Commission (CNV) in its regulations, as approved by the International Accounting Standards Board (IASB), and is therefore responsible for the preparation and presentation of the unaudited condensed interim consolidated financial statements mentioned in the first paragraph, in accordance with International Accounting Standard 34 Interim Financial Information (IAS 34).
 
Scope of our review
Our review was limited to the application of the procedures established under International Standards on Review Engagements ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity, adopted as a review standard in Argentina by Technical Pronouncement No. 33 of the FACPCE and approved by the International Auditing and Assurance Standards Board (IAASB). A review of interim financial information consists of inquiries of Company staff responsible for preparing the information included in the unaudited condensed interim consolidated financial statements and of analytical and other review procedures. This review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion on the consolidated statement of financial position and the consolidated statements of income and other comprehensive income and of cash flows of the Company.
 
Conclusion
On the basis of our review, nothing has come to our attention that causes us to believe that the unaudited condensed interim consolidated financial statements mentioned in the first paragraph of this report have not been prepared, in all material respects, in accordance with International Accounting Standard 34 Interim financial reporting.
 
Report on compliance with current regulations
In accordance with current regulations, we report, in connection with IRSA Inversiones y Representaciones Sociedad Anónima, that:
 
a)
the unaudited condensed interim consolidated financial statements of IRSA Inversiones y Representaciones Sociedad Anónima have not been transcribed into the Inventory and Balance Sheet book and, except for the above mentioned situation, as regards those matters that are within our competence, they are in compliance with the provisions of the General Companies Law and pertinent resolutions of the National Securities Commission;
 
b)
the unaudited condensed interim separate financial statements of IRSA Inversiones y Representaciones Sociedad Anónima arise from accounting records carried in all formal aspects in accordance with legal requirements except for i) the lack of transcription to the Inventories and Balance Sheet Book, and ii) the lack of transcription to the General Journal Book of the accounting entries corresponding to the month of December 2021;
 
c)
we have read the Business Summary (“Reseña Informativa”), on which we have no observations to make regarding matters that are within our competence;
 
d)
at December 31, 2021 the debt of IRSA Inversiones y Representaciones Sociedad Anónima accrued in favor of the Argentine Integrated Social Security System, as shown by the Company’s accounting records, amounted to ARS 40,512,941, which was not due at that date.
 
 
Autonomous City of Buenos Aires, February 9, 2022
 
 
PRICE WATERHOUSE & CO. S.R.L.
 
                                                                    (Partner)
 
ABELOVICH, POLANO & ASOCIADOS S.R.L.
 
                                                                                      (Partner)
C.P.C.E.C.A.B.A. V° 1 F° 17
 
C.P.C.E.C.A.B.A. V. 1 F. 30
Marcelo Héctor Fuxman
Public Accountant (UBA)
C.P.C.E. C.A.B.A. V. 134 F. 85
Carlos Brondo
Public Accountant (UNCUYO)
C.P.C.E.C.A.B.A. V. 391 F. 078
 
José Daniel Abelovich
Public Accountant (UBA)
C.P.C.E. C.A.B.A. V. 102 F. 191
 
 
 
32
 
 
 
 
 
 
IRSA Inversiones y Representaciones Sociedad Anónima
 
Unaudited Condensed Interim Separate Financial Statements as of December 31, 2021 and for the six and three-month periods ended as of that date, presented comparatively

 
 
 

IRSA Inversiones y Representaciones Sociedad Anónima
Unaudited Condensed Interim Separate Statements of Financial Position
as of December 31, 2021 and June 30, 2021
(All amounts in millions, except otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina

 
 
Note
  12.31.21 
  06.30.21 
ASSETS
 
    
    
Non-current assets
 
    
    
Investment properties
7
  189,250 
  46,531 
Property, plant and equipment
8
  1,612 
  37 
Trading properties
9
  872 
  716 
Intangible assets
10
  2,441 
  1,106 
Rights of use assets
11
  666 
  11 
Investments in subsidiaries, associates and joint ventures
6
  59,049 
  84,686 
Income tax credit
 
  9 
  1 
Trade and other receivables
13
  1,983 
  1,408 
Total non-current assets
 
  255,882 
  134,496 
Current assets
 
    
    
Trading properties
9
  137 
  132 
Inventories
 
  43 
  1 
Income tax credit
 
  33 
  7 
Trade and other receivables
13
  5,546 
  1,128 
Derivative financial instruments
12
  10 
  - 
Investments in financial assets
12
  3,160 
  295 
Cash and cash equivalents
12
  2,665 
  648 
Total current assets
 
  11,594 
  2,211 
TOTAL ASSETS
 
  267,476 
  136,707 
SHAREHOLDERS’ EQUITY
 
    
    
Shareholders' equity (according to corresponding statements)
 
  117,150 
  74,787 
TOTAL SHAREHOLDERS’ EQUITY
 
  117,150 
  74,787 
LIABILITIES
 
    
    
Non-current liabilities
 
    
    
Trade and other payables
14
  1,301 
  6 
Borrowings
15
  58,391 
  19,388 
Deferred income tax liabilities
16
  73,975 
  23,282 
Other liabilities
 
  62 
  - 
Provisions
17
  1,539 
  32 
Lease liabilities
 
  - 
  7 
Total non-current liabilities
 
  135,268 
  42,715 
Current liabilities
 
    
    
Trade and other payables
14
  4,405 
  863 
Salaries and social security liabilities
 
  301 
  1 
Borrowings
15
  10,185 
  18,294 
Provisions
17
  165 
  42 
Lease liabilities
 
  2 
  5 
Total current liabilities
 
  15,058 
  19,205 
TOTAL LIABILITIES
 
  150,326 
  61,920 
TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES
 
  267,476 
  136,707 
 
The accompanying notes are an integral part of these Financial Statements.
 
 
 
 
 
 
                                            .
Eduardo S. Elsztain
President
 

1
IRSA Inversiones y Representaciones Sociedad Anónima
Unaudited Condensed Interim Separate Statements of Income and Other Comprehensive Income
for the six and three-month periods ended December 31, 2021 and 2020
 (All amounts in millions, except otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina
 
 
 
 
 
Six month
 
 
Three month
 
 
Note
  12.31.21 
  12.31.20 
  12.31.21 
  12.31.20 
Revenues
18
  7,658 
  3,143 
  4,230 
  1,924 
Costs
19
  (2,852)
  (1,894)
  (1,526)
  (932)
Gross profit
 
  4,806 
  1,249 
  2,704 
  992 
Net gain/ (loss) from fair value adjustment of investment properties
7
  23,767 
  7,008 
  29,349 
  (5,221)
General and administrative expenses
19
  (1,441)
  (383)
  (838)
  (202)
Selling expenses
19
  (660)
  (78)
  (368)
  (58)
Other operating results, net
20
  (44)
  (1,069)
  (351)
  (1,062)
Profit/ (loss) from operations
 
  26,428 
  6,727 
  30,496 
  (5,551)
Share of loss of subsidiaries, associates and joint ventures
6
  (1,191)
  (1,434)
  (643)
  (11,878)
Profit/ (loss) before financial results and income tax
 
  25,237 
  5,293 
  29,853 
  (17,429)
Finance income
21
  95 
  32 
  88 
  14 
Finance costs
21
  (3,762)
  (2,539)
  (1,597)
  (1,067)
Other financial results
21
  8,219 
  1,946 
  4,508 
  2,238 
Inflation adjustment
21
  562 
  (157)
  159 
  412 
Financial results, net
 
  5,114 
  (718)
  3,158 
  1,597 
Profit/ (loss) before income tax
 
  30,351 
  4,575 
  33,011 
  (15,832)
Income tax
16
  (4,976)
  (3,636)
  (7,347)
  2,676 
Profit/ (loss) for the period
 
  25,375 
  939 
  25,664 
  (13,156)
 
    
    
    
    
Other comprehensive (loss)/ income:
 
    
    
    
    
Items that may be reclassified subsequently to profit or loss:
 
    
    
    
    
Share of other comprehensive income of subsidiaries, associates and joint ventures
 
  - 
  512 
  - 
  66 
Currency translation adjustment of subsidiaries, associates and joint ventures
 
  (421)
  (4,696)
  (244)
  1,238 
Total other comprehensive (loss)/ profit for the period (i)
6
  (421)
  (4,184)
  (244)
  1,304 
Total comprehensive profit/ (loss) for the period
 
  24,954 
  (3,245)
  25,420 
  (11,852)
 
    
    
    
    
Profit/ (loss) per share for the period (ii)
 
    
    
    
    
Basic
 
  31.37 
  1.63 
  31.72 
  (22.88)
Diluted
 
  28.48 
  1.63 
  28.80 
  (22.88)
 
(i)
Components of other comprehensive income have no impact on income tax.
(ii)
The loss/profit per share basic have been calculated using 808,898,749 shares at 12.31.21 and 575,377,891 at 12.31.20. If 808,898,749 shares had been used for the calculation, the result per share would be ARS 1.16 for 12.31.20. The loss/profit per share diluted have been calculated using 890,815,983 shares at 12.31.21 and 576,529,312 at 12.31.20. If 890,815,983 shares had been used for the calculation, the result per share would be ARS 1.05 for 12.31.20 See Note 17 to the Annual Financial Statements as of June 30, 2021.
 
The accompanying notes are an integral part of these Financial Statements.
 
 
 
 
 
                                            .
Eduardo S. Elsztain
President
 

 
2
IRSA Inversiones y Representaciones Sociedad Anónima
Unaudited Condensed Interim Separate Statements of Changes in Shareholders’ Equity
for the six-month period ended December 31, 2021
(All amounts in millions, except otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina
 
 
 
 
Share capital
 
 
Treasury shares
 
 
Inflation adjustment of Share Capital and Treasury Shares (1)
 
 
Share premium
 
 
Additional Paid-in capital from Treasury Shares
 
 
Warrants (2)
 
 
Legal reserve
 
 
CNV 609/12 Resolution reserve
 
 
 Other reserves (3)
 
 
Retained earnings
 
 
Total Shareholders’ equity
 
Balance as of June 30, 2021
  657 
  2 
  24,970 
  29,038 
  178 
  2,143 
  1,930 
  17,013 
  35,825 
  (36,969)
  74,787 
Profit for the period
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  25,375 
  25,375 
Other comprehensive loss for the period
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (421)
  - 
  (421)
Warrants exercise
  - 
  - 
  - 
  4 
  - 
  (1)
  - 
  - 
  - 
  - 
  3 
Incorporated by merger
  152 
  - 
  - 
  19,509 
  - 
  - 
  359 
  - 
  (52)
  (2,562)
  17,406 
Shareholders’ meeting held as of 10.21.21
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (36,967)
  36,967 
  - 
Balance as of December 31, 2021
  809 
  2 
  24,970 
  48,551 
  178 
  2,142 
  2,289 
  17,013 
  (1,615)
  22,811 
  117,150 
 
(1) Includes ARS 1 of inflation adjustment of treasury shares. See Note 16 of Consolidated Financial Statements as of June 30, 2021.
(2) As of December 31, 2021, the remaining warrants to exercise amount to 79,964,078, equivalent to the same number of shares. See Note 29 to the interim condensed consolidated financial statements.
(3) The composition of Other reserves of the Company as of December 31, 2021 is as follows:
 
 
 
 
Cost of Treasury shares
 
 
Changes in non-controlling interest
 
 
Reserve for share-based payments
 
 
Reserve for future dividends
 
 
Currency translation adjustment reserve
 
 
Special reserve
 
 
Other reserves of subsidiaries
 
 
Total Other reserves
 
Balance as of June 30, 2021
  (308)
  (7,191)
  347 
  3,061 
  780 
  37,951 
  1,185 
  35,825 
Other comprehensive loss for the period
  - 
  - 
  - 
  - 
  (421)
  - 
  - 
  (421)
Incorporated by merger
  - 
  (175)
  - 
  - 
  (14)
  - 
  137 
  (52)
Shareholders’ meeting held as of 10.21.21
  - 
  - 
  - 
  - 
  - 
  (36,967)
  - 
  (36,967)
Balance as of December 31, 2021
  (308)
  (7,366)
  347 
  3,061 
  345 
  984 
  1,322 
  (1,615)
 
 There are no cumulative unpaid dividends on preferred shares
 
  The accompanying notes are an integral part of these Financial Statements.
 
 
 
 
 
 
                                            .
Eduardo S. Elsztain
President
 
 
3
IRSA Inversiones y Representaciones Sociedad Anónima
 
Unaudited Condensed Interim Separate Statements of Changes in Shareholders’ Equity
for the six-month period ended December 31, 2020
(All amounts in millions, except otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina
 
 
 
 
Share capital
 
 
Treasury shares
 
 
Inflation adjustment of Share Capital and Treasury Shares (1)
 
 
Share premium
 
 
Additional Paid-in capital from Treasury Shares
 
 
Legal reserve
 
 
CNV 609/12 Resolution reserve
 
 
Other reserves (2)
 
 
Accumulated losses
 
 
Total Shareholders’ equity
 
Balance as of June 30, 2020
  575 
  2 
  24,951 
  26,303 
  172 
  877 
  17,013 
  12,658 
  18,751 
  101,302 
Profit for the period
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  939 
  939 
Other comprehensive loss for the period
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (4,184)
  - 
  (4,184)
Shareholders’ meeting held as of 10.26.20
  - 
  - 
  - 
  - 
  - 
  1,135 
  - 
  20,611 
  (21,746)
  - 
Dividend distribution in shares
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (875)
  (875)
Share-based payments
  - 
  - 
  - 
  - 
  3 
  - 
  - 
  (3)
  - 
  - 
Changes in non-controlling interest
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  619 
  - 
  619 
Other changes in subsidiaries` equity
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  8,816 
  - 
  8,816 
Balance as of December 31, 2020
  575 
  2 
  24,951 
  26,303 
  175 
  2,012 
  17,013 
  38,517 
  (2,931)
  106,617 
 
(1) Includes ARS 1 of inflation adjustment of treasury shares. See Note 16 of Consolidated Financial Statements as of June 30, 2020.
(2) 
The composition of Other reserves of the Company as of December 31, 2020 is as follows:
 
 
 
Cost of Treasury shares
 
 
Changes in non-controlling interest
 
 
Reserve for share-based payments
 
 
Reserve for future dividends
 
 
Currency translation adjustment reserve
 
 
Special reserve
 
 
Other reserves of subsidiaries
 
 
Total Other reserves
 
Balance as of June 30, 2020
  (311)
  (7,541)
  356 
  3,061 
  (1,316)
  18,804 
  (395)
  12,658 
Other comprehensive loss for the period
  - 
  - 
  - 
  - 
  (4,696)
  - 
  512 
  (4,184)
Shareholders’ meeting held as of 10.26.20
  - 
  - 
  - 
  - 
  - 
  - 
  20,611 
  20,611 
Reserve for share-based payments
  2 
  - 
  (5)
  - 
  - 
  - 
  - 
  (3)
Changes in non-controlling interest
  - 
  619 
  - 
  - 
  - 
  - 
  - 
  619 
Other changes in subsidiaries` equity
  - 
  (91)
  - 
  - 
  7,813 
  - 
  1,094 
  8,816 
Balance as of December 31, 2020
  (309)
  (7,013)
  351 
  3,061 
  1,801 
  18,804 
  21,822 
  38,517 
 
 
There are no cumulative unpaid dividends on preferred shares.
 
The accompanying notes are an integral part of these Financial Statements.
 
 
 
 
                                            .
Eduardo S. Elsztain
President
 
 
4
IRSA Inversiones y Representaciones Sociedad Anónima
Unaudited Condensed Interim Separate Statements of Cash Flows
for the six-month periods ended December 31, 2021 and 2020
(All amounts in millions, except otherwise indicated)
 
Free translation from the original prepared in Spanish for publication in Argentina
 
 
 
Note
  12.31.21 
  12.31.20 
Operating activities (1)
 
    
    
Profit for the period
 
  25,375 
  939 
Adjustments:
 
    
    
Income tax
16
  4,976 
  3,636 
Amortization and depreciation
19
  350 
  9 
Gain from disposal of trading properties
 
  - 
  (1,257)
Financial results, net
 
  (4,938)
  (1,161)
(Increase)/ decrease in trading properties
9
  (1)
  515 
Net gain from fair value adjustment of investment properties
7
  (23,767)
  (7,008)
Share of profit of subsidiaries, associates and joint ventures
6
  1,191 
  1,434 
Loss from disposal of subsidiaries
 
  - 
  1,014 
Gain from disposal of intangible assets
 
  (77)
  - 
Provisions and allowances
 
  511 
  (23)
Management fees
 
  (90)
  - 
Increase in inventories
 
  (1)
  - 
Increase/ (decrease) in salaries and social security liabilities
 
  11 
  (11)
Decrease / (increase) in trade and other receivables
 
  84 
  (51)
Use of provisions
 
  (45)
  - 
(Decrease)/ increase in trade and other payables
 
  (525)
  1,917 
Net cash flow generated from / (used in) operating activities
 
  3,054 
  (47)
Investing activities (1)
 
    
    
Capital contributions to subsidiaries, associates and joint ventures
6
  (346)
  (601)
Acquisition of investment properties
 
  (1,269)
  - 
Acquisition of property, plant and equipment
8
  (29)
  (26)
Acquisition of intangible assets
10
  (3)
  (3)
Increase of investments in financial assets
 
  (1,099)
  (1,363)
Proceeds from sale of investment properties
 
  4,598 
  - 
Proceeds from sale of intangible assets
 
  113 
  - 
Decrease in derivative financial instruments
 
  (10)
  (41)
Proceeds from sale of investments in financial assets
 
  1,243 
  3,081 
Loans payment received from related parties
 
  5 
  - 
Interest received
 
  103 
  - 
Dividends received
 
  281 
  - 
Net cash flow generated from investing activities
 
  3,587 
  1,047 
Financing activities (1)
 
    
    
Short-term loans obtained, net
 
  (475)
  2,152 
Borrowings obtained
 
  412 
  - 
Payment of loans
 
  (536)
  (503)
Interests paid
 
  (3,594)
  (2,900)
Loans obtained from subsidiaries, associates and joint ventures
 
  230 
  14,919 
Payment of loans from subsidiaries, associates and joint ventures
 
  (5)
  (50)
Payment of finance leases
 
  (4)
  - 
Exercise of warrants
 
  3 
  - 
Payment of NCN
 
  (4,557)
  (23,005)
Issuance of NCN
 
  6,392 
  4,484 
Repurchase of non-convertible notes
 
  (2,672)
  - 
Net cash flow used in financing activities
 
  (4,806)
  (4,903)
Increase/ (decrease) in cash and cash equivalents, net
 
  1,835 
  (3,903)
Cash and cash equivalents at the beginning of the period
12
  648 
  3,988 
Cash and cash equivalents incorporated by merger
 
  65 
  - 
Foreign exchange gain on cash and fair value result for cash equivalents
 
  143 
  (3)
Inflation adjustment
 
  (26)
  (2)
Cash and cash equivalents at the end of the period
12
  2,665 
  80 
 
(1)
See operations that do not affect cash flows in Note 24 to these financial statements.
 
 
 
 
 
                                            .
Eduardo S. Elsztain
President
 
 
5
IRSA Inversiones y Representaciones Sociedad Anónima
 Notes to the Unaudited Condensed Interim Consolidated Separate Financial Statements
(All amounts in millions, except otherwise indicated)
 
Free translation from the original prepared in Spanish for publication in Argentina
 
1.
General information and company’s business
 
IRSA Inversiones y Representaciones Sociedad Anónima (“IRSA” or “The Company”) was founded in 1943, it is primarily engaged in managing real estate holdings in Argentina since 1991.
 
IRSA is a corporation incorporated and domiciled in Argentina. The registered office is Carlos Della Paolera 261, 9th. Floor, Buenos Aires, Argentina.
 
The Company owns, manages and develops a portfolio of office and other rental properties in Buenos Aires. Directly and indirectly, it also participates in the operation of shopping malls. In addition, IRSA through its subsidiaries, associates and joint ventures manages and develops branded hotels across Argentina.
 
These Unaudited Condensed Interim Separate Financial Statements have been approved for issue by the Board of Directors on February 9, 2022.
 
2.
Basis of preparation of the Unaudited Condensed Interim Separate Financial Statements
 
2.1. 
Basis of preparation
 
These financial statements have been prepared in accordance with IAS 34 “Interim financial reporting” and should therefore be read in conjunction with the Group's annual Consolidated Financial Statements and Financial Statements of Fusion as of June 30, 2021 prepared in accordance with IFRS. Also, these financial statements include additional information required by Law No. 19,550 and / or regulations of the CNV. Such information is included in the notes to these financial statements, as accepted by IFRS.
 
These financial statements for the interim periods of three month ended December 31, 2021 and 2020 have not been audited. Management considers that they include all the necessary adjustments to fairly present the results of each period. Intermediate period results do not necessarily reflect the proportion of the Group's results for the entire fiscal years.
 
IAS 29 "Financial Reporting in Hyperinflationary Economies" requires that the financial statements of an entity whose functional currency is one of a hyperinflationary economy be expressed in terms of the current unit of measurement at the closing date of the reporting period, regardless of whether they are based on the historical cost method or the current cost method. To do so, in general terms, the inflation produced from the date of acquisition or from the revaluation date, as applicable, must be calculated by non-monetary items. This requirement also includes the comparative information of the financial statements.
 
In order to conclude on whether an economy is categorized as highly inflationary in the terms of IAS 29, the standard details a series of factors to be considered, including the existence of an accumulated inflation rate in three years that approximates or exceed 100%. Accumulated inflation in Argentina in three years is over 100%. For that reason, in accordance with IAS 29, Argentina must be considered a country with a highly inflationary economy starting July 1, 2018.
 
 
 
6
IRSA Inversiones y Representaciones Sociedad Anónima
 
In relation to the inflation index to be used and in accordance with FACPCE Resolution No. 539/18, it is determined based on the Wholesale Price Index (IPIM) until 2016, considering the average variation of the Consumer Price Index (CPI) of the Autonomous City of Buenos Aires for the months of November and December 2015, because during those two months there were no national IPIM measurements. Then, from January 2017, the National Consumer Price Index (National CPI) is considered. The table below presents the index for the period ended December 31, 2021, according to official statistics (INDEC) and following the guidelines described in Resolution 539/18:
 
Price variation
 
December 31, 2021
(six-month accumulated)
 
 
  20%
 
As a consequence of the aforementioned, these Unaudited Consolidated Financial Statements as of December 31, 2021 were restated in accordance with IAS 29.
 
2.2. Significant accounting policies
 
The accounting policies adopted in the preparation of these Unaudited Condensed Interim Separate Financial Statements are consistent with those applied in the Annual Financial Statements as of June 30, 2021. The main accounting policies are described in Note 2 of those Annual Financial Statements.
 
2.3.
Comparability of information
 
The amounts as of June 30, 2021 and December 31, 2020, which are disclosed for comparative purposes, arise from the financial statements at said dates restated in accordance with IAS 29 (note 2.1).
 
See Note 29 to the Unaudited Condensed Interim Consolidated Financial Statements for information on the context in which the Group operates.
 
2.4.            
Use of estimates
 
The preparation of Financial Statements at a certain date requires Management to make estimates and evaluations affecting the amount of assets and liabilities recorded and contingent assets and liabilities disclosed at such date, as well as income and expenses recorded during the period. Actual results might differ from the estimates and evaluations made at the date of preparation of these Unaudited Condensed Interim Separate Financial Statements. In the preparation of these Unaudited Condensed Interim Separate Financial Statements, the main significant judgments made by Management in applying the Company’s accounting policies and the major sources of uncertainty were the same that the Company used in the preparation of the Separate Financial Statements for the fiscal year ended June 30, 2021, described in Note 3 to those financial statements.
 
3. 
Seasonal effects on operations
 
See Note 3 to the Unaudited Condensed Interim Consolidated Financial Statements.
 
4.            
Acquisitions and disposals
 
4.1            
Merger by absorption of IRSA and IRSA Propiedades Comerciales
 
On September 30, 2021, IRSA & IRSA Propiedades Comerciales Boards of Directors approved the prior merger agreement between both companies and the corresponding special financial statements as of June 30, 2021, initiating the corporate reorganization process under the terms of art. 82 et seq. of the General Law of Companies. The merger process has particular characteristics given that they are two companies included in the public offering regime, reason why, not only the current provisions of the General Law of Companies apply but also the procedures established regarding reorganization of companies of the Regulations of the “Comisión Nacional de Valores” (National Securities Commission) and the markets, both national and foreign, where their shares are listed.
 
 
 
7
IRSA Inversiones y Representaciones Sociedad Anónima
 
The Merger is carried out in order to streamline the technical, administrative, operational and economic resources of both Companies, standing out among others: (a) the operation and maintenance of a single transactional information system and centralization of the entire accounting registration process; (b) presentation of a single financial statement to the different control agencies with the consequent cost savings in accounting and advisory fees, tariffs and other related expenses; (c) simplification of the accounting information reporting and consolidation process, as a consequence of the reduction that the merger would imply for the corporate structure as a whole; (d) removal of the IRSA PC public offering listing on BYMA and NASDAQ with the associated costs that this represents; (e) cost reduction for legal fees and tax filings; (f) increase in the percentage of the capital stock that is listed in the different markets, increasing the liquidity of the listed shares; (g) tax efficiencies and (h) preventively avoid the potential overlap of activities between the Companies.
 
In accordance with the commitments assumed in the Prior Merger Commitment, having obtained the administrative consent of the United States Securities and Exchange Commission, an entity to which they are subject because both companies list their shares in markets that operate in said jurisdiction, The shareholders' meetings of both companies were called.
 
On December 22, 2021, the Shareholders' Meetings of IRSA and IRSA PC were held, approving the merger by absorption, whose effective date was established on July 1, 2021. As of that date, the transfer to the absorbent of the totality of the equity of the absorbed company, thereby incorporating all its rights and obligations, assets and liabilities into the equity of the absorbing company.
 
Likewise, and within the framework of the reorganization process, the Board of Directors has approved the exchange ratio, which has been established at 1.40 IRSA shares for each IRSA PC share, which is equivalent to 0.56 IRSA GDS for each ADS of IRSA PC. Within this framework, it was decided to increase the share capital by issuing 152,158,215 new shares in IRSA.
 
The exchange of IRSA PC shares for IRSA shares will be carried out once the entire administrative process has been completed and once the registration has been made in the “Inspección General de Justicia” (General Inspection of Justice), a process that may take several months.
 
The following are the net assets incorporated:
 
 
  12.31.21(*)
 
    
Investment properties
  122,288 
Property, plant and equipment
  1,621 
Trading properties
  160 
Intangible assets
  1,409 
Rights of use assets
  874 
Investments in subsidiaries, associates and joint ventures (**)
  (24,198)
Income tax credit
  37 
Trade and other receivables
  5,313 
Inventories
  41 
Investments in financial assets
  3,091 
Cash and cash equivalents
  65 
Total Assets
  110,701 
Trade and other payables
  5,082 
Borrowings
  40,459 
Deferred income tax liabilities
  46,170 
Provisions
  166 
Lease liabilities
  (2)
Income tax liabilities
  1,131 
Salaries and social security liabilities
  289 
Total Liabilities
  93,295 
Total net Assets
  17,406 
 
(*) The absorption was carried out at the accounting values of the absorbed company on the effective date of the merger.
(**) Includes the effect of the reduction of the investment that IRSA held in IRSA CP.
 
Significant acquisitions and disposals of the Company and/or its subsidiaries for the six-month period ended December 31, 2021 are detailed in Note 4 to the Unaudited Condensed Interim Consolidated Financial Statements.
 
 
8
IRSA Inversiones y Representaciones Sociedad Anónima
 
5.            
Financial risk management and fair value estimates
 
These Unaudited Condensed Interim Financial Statements do not include all the information and disclosures of the risk management, so they should be read together with the Annual Separate Financial Statements as of June 30, 2021. There has been no changes in the risk management or risk management policies applied by the Company since the end of the annual fiscal year. See notes to the Unaudited Condensed Interim Consolidated Financial Statements. Furthermore, there have been no transfers between the different hierarchies used to assess the fair value of the Company’s financial instruments.
 
6.            
Information about the main subsidiaries, associates and joint ventures
 
The Company conducts its business through several operating and holding subsidiaries, associates and joint ventures. Its main subsidiaries include Tyrus, Efanur, Panamerican Mall S.A. and Torodur S.A.. The main associates include BHSA.
 
The Company indirectly participated, until September 25, 2020, through Tyrus, in IDB Development Ltd. (“IDBD”) and Discount Investment Company Ltd (“DIC”), since on that date the insolvency and liquidation of IDBD was decreed generating the loss of control of both companies.
 
Detailed below is the evolution of investments in subsidiaries, associates and joint ventures of the Company, for the six-month period ended December 31, 2021 and for the year ended June 30, 2021:
 
 
  12.31.21 
  06.30.21 
Beginning of period / year
  84,686 
  119,869 
Share of profit
  (1,041)
  (28,589)
Other comprehensive loss
  (421)
  (5,879)
Impairment of associates and joint ventures
  (150)
  (48)
Capital contributions (Note 22)
  501 
  4,290 
Incorporated by merger (Note 4.1)
  (24,198)
  - 
Changes in non-controlling interest
  - 
  446 
Dividends (Note 22)
  (390)
  (12,265)
Sale of interest
  - 
  (2,599)
Other changes in subsidiaries’ equity
  - 
  9,461 
End of the period / year
  58,987 
  84,686 
 
 
 
9
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
Name of the entity
 
% ownership interest
 
Company´s interest in equity
 
Company’s interest in comprehensive income/ (loss)
12.31.21
06.30.21
 
12.31.21
 
06.30.21
 
12.31.21
 
12.31.20
Subsidiaries
 
 
 
 
 
 
 
 
 
 
 
IRSA CP (11)
 
-
78.07%
 
 -
 
68,027
 
 -
 
4,842
Tyrus
 
100.00%
100.00%
 
4,080
 
4,430
 
(245)
 
(8,095)
Efanur
 
99.08%
100.00%
 
3,216
 
3,262
 
(46)
 
(290)
Ritelco S.A.
 
100.00%
100.00%
 
1,049
 
1,091
 
(42)
 
(2,000)
Inversora Bolívar S.A.
 
96.87%
96.57%
 
1,086
 
1,108
 
(32)
 
32
ECLSA
 
98.93%
99.08%
 
1,596
 
2,119
 
(66)
 
145
Palermo Invest S.A.
 
97.35%
97.34%
 
1,120
 
1,137
 
(32)
 
36
NFSA
 
76.34%
76.34%
 
499
 
552
 
(52)
 
(88)
Llao Llao Resort S.A.
 
50.00%
50.00%
 
562
 
605
 
(43)
 
(17)
HASAU
 
100.00%
100.00%
 
334
 
333
 
(32)
 
(91)
Liveck S.A.
 
9.30%
9.30%
 
77
 
87
 
(9)
 
(2)
Panamerican Mall S.A. (12)
 
80.00%
-
 
25,806
 
 -
 
(99)
 
 -
Torodur S.A. (12)
 
100.00%
-
 
8,322
 
 -
 
(864)
 
 -
Arcos del Gourmet S.A. (12)
 
90.00%
-
 
2,189
 
 -
 
43
 
 -
Shopping Neuquén S.A. (12)
 
99.95%
-
 
1,101
 
 -
 
75
 
 -
Centro de Entretenimientos La Plata S.A. (8)(7)(6)(12)
 
95.40%
-
 
708
 
 -
 
(7)
 
 -
We Are Appa S.A. (12)
 
93.61%
-
 
349
 
 -
 
(192)
 
 -
Entertainment Holdings S.A. (12)
 
70.00%
-
 
41
 
 -
 
82
 
 -
Emprendimiento Recoleta S.A. (4)(12)
 
53.68%
-
 
59
 
 -
 
(21)
 
 -
Entretenimiento Universal S.A. (5)(12)
 
3.75%
-
 
(1)
 
 -
 
1
 
 -
Fibesa S.A. (5)(12)
 
97.00%
-
 
(61)
 
 -
 
57
 
 -
Associates
 
 
 
 
 
 
 
 
 
 
 
BHSA (1)(2)
 
4.93%
4.93%
 
995
 
1,026
 
(31)
 
41
Manibil S.A. (3)
 
-
-
 
 -
 
 -
 
 -
 
(23)
BACS (2)
 
37.72%
37.72%
 
565
 
579
 
(15)
 
(2)
TGLT S.A. (9)(10)(12)
 
27.82%
-
 
957
 
 -
 
(171)
 
 -
Joint ventures
 
 
 
 
 
 
 
 
 
 
 
IRSA - Galerías Pacífico S.A. - U.T.
 
50.00%
50.00%
 
428
 
258
 
169
 
(112)
Cyrsa S.A.
 
50.00%
50.00%
 
64
 
72
 
(8)
 
6
Quality Invest S.A. (12)
 
50.00%
-
 
3,512
 
 -
 
(43)
 
 -
Nuevo Puerto Santa Fe S.A. (8)(12)
 
50.00%
-
 
334
 
 -
 
11
 
 -
Total subsidiaries, associates and joint ventures
 
 
 
 
58,987
 
84,686
 
(1,612)
 
(5,618)
 
 
 
10
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
 

   
 
Latest financial information issued
 
Name of the entity
Location of business / Country of incorporation
Main activity
 
Common shares 1 vote
 
 
Share capital (nominal value)
 
 
Profit / (loss) for the period
 
 
Shareholders’ equity
 
Subsidiaries
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tyrus
Uruguay
Investment
  21,365,969,547 
  7,480 
  (6)
  3,914 
Efanur
Uruguay
Investment
  461,751,428 
  131 
  294 
  3,216 
Ritelco S.A.
Uruguay
Investment
  453,321,177 
  453 
  (43)
  1,049 
Inversora Bolívar S.A.
Argentina
Investment
  1,473,847,188 
  93 
  (33)
  1,125 
ECLSA
Argentina
Investment
  1,710,302,484 
  80 
  (28)
  1,607 
Palermo Invest S.A.
Argentina
Investment
  1,126,647,085 
  161 
  (32)
  1,130 
NFSA
Argentina
Hotel
  38,068,999 
  50 
  (80)
  890 
Llao Llao Resort S.A.
Argentina
Hotel
  73,580,206 
  147 
  (86)
  1,123 
HASAU
Argentina
Hotel
  603,978,099 
  26 
  (32)
  351 
Liveck S.A.
Uruguay
Investment
  41,855,579 
  415 
  (28)
  415 
Panamerican Mall S.A. (12)
Argentina
Real estate
  397,661,435 
  497 
  (120)
  32,263 
Torodur S.A.(12)
Uruguay
Investment
  2,514,547,001 
  1,884 
  (847)
  8,357 
Arcos del Gourmet S.A. (12)
Argentina
Real estate
  72,973,903 
  81 
  110 
  2,432 
Shopping Neuquén S.A. (12)
Argentina
Real estate
  53,511,353 
  54 
  75 
  1,102 
Centro de Entretenimiento La Plata S.A. (8)(7)(6)(12)
Argentina
Real estate
  36,824 
  95 
  4 
  159 
We Are Appa S.A. (12)
Argentina
Developer
  484,727,737 
  518 
  (204)
  240 
Entertainment Holdings S.A. (12)
Argentina
Investment
  32,503,379 
  46 
  102 
  282 
Emprendimiento Recoleta S.A. (4)(12)
Argentina
Real estate
  13,449,990 
  25 
  (38)
  111 
Entretenimiento Universal S.A.(12)
Argentina
Event organization and others
  825 
  - 
  29 
  (32)
Fibesa S.A.(12)
Argentina
Real estate
 
(i)
 
  2 
  120 
  190 
Associates
 
 
    
    
    
    
BHSA (1)(2)
Argentina
Financial
  73,939,835 
  1,500 
  (620)
  20,188 
BACS (2)
Argentina
Financial
  33,125,751 
  88 
  (40)
  1,498 
TGLT S.A. (9)(12)
Argentina
Real estate
  257,320,997 
  925 
  (82)
  5,117 
Joint ventures
 
 
    
    
    
    
IRSA - Galerías Pacífico S.A. - U.T.
Argentina
Hotel
  500,000 
  1 
  338 
  855 
Cyrsa S.A.
Argentina
Real estate
  8,748,270 
  3 
  (16)
  127 
Quality Invest S.A. (12)
Argentina
Financial
  225,146,912 
  406 
  (86)
  6,912 
Nuevo Puerto Santa Fe S.A. (8)(12)
Argentina
Financial
  138,750 
  28 
  21 
  631 
 
 
(1)
Considered significant. See Notes 7 to 8 to the Annual Consolidated Financial Statements.
(2)
Information as of December 31, 2021 according to BCRA's standards. For the purpose of the valuation of the investments in the Company, figures as of December 31, 2021 have been considered, with the necessary IFRS adjustments. Share market price of Banco Hipotecario S.A as of December 31, 2021 amounts to ARS 8.76. See Note 8 to the Consolidated Financial Statements as of June 30, 2021.
(3)
As mentioned in note 4G. to the Consolidated Financial Statements, the Company, on December 22, 2020, sold 217,332,873 shares, that represents the 49% of the capital stock of Manibil S.A.. The operation was completed in February 2021, so the Company leaves the character of shareholder of that Company from that moment.
(4)
Concession ended on November 18, 2018. As of September 30, 2021, is in liquidation.
(5)
Included in other payables.
(6)
Corresponds to profit for the six-month periods ended December 31, 2021 and 2020, respectively.
(7)
Include the necessary adjustments to get to the balances in accordance with the International Financial Reporting Standards.
(8)
Nominal value per share ARS 100.
(9)
See note 4 to the Annual Consolidated Financial Statements as of June 30, 2021.
(10)
Includes ARS 2 of other comprehensive income. For the purposes of the valuation of the investment in the Company, the financial information prepared by TGLT S.A. has been considered.
(11)
See Note 4.1.
(12)
Incorporation by merger with IRSA CP (Note 4.1.).
(i)
Corresponds to 2,323,126 shares. Nominal value per share ARS 1 with 5 votes rights.
 
7.            
Investment properties
 
Changes in the Company’s investment properties for the six-month period ended December 31, 2021 and for the year ended June 30, 2021 were as follows:
 
 
 
12.31.21
 
 
06.30.21
 
 
 
Shopping Malls
 
 
Office and Other rental properties
 
 
Undeveloped parcels of land
 
 
Properties under development
 
 
Total
 
 
Total
 
Fair value at the beginning of the period / year
  - 
  6,764 
  39,767 
  - 
  46,531 
  43,303 
Additions
  167 
  186 
  448 
  456 
  1,257 
  6 
Disposals
  - 
  (4,341)
  (257)
  - 
  (4,598)
  (32)
Incorporated by merger (Note 4.1)
  49,872 
  51,795 
  16,650 
  3,971 
  122,288 
  - 
Net gain from fair value adjustment
  (4,357)
  1,741 
  26,393 
  (10)
  23,767 
  3,254 
Initial additions lease costs
  9 
  3 
  - 
  - 
  12 
  - 
Amortization of capitalized lease costs
  (4)
  (3)
  - 
  - 
  (7)
  - 
Fair value at the end of the period / year
  45,687 
  56,145 
  83,001 
  4,417 
  189,250 
  46,531 
 
 
 
11
IRSA Inversiones y Representaciones Sociedad Anónima
 
The following amounts have been recognized in the Statements of Comprehensive Income:
 
 
  12.31.21 
  12.31.20 
Sale, rental and services´ income (Note 18)
  7,532 
  57 
Rental and services´ costs (Note19)
  (2,718)
  (17)
Cost of sales and developments (Note19)
  (57)
  (36)
Net unrealized gain from fair value adjustment on investment properties
  23,830 
  7,008 
Net realized loss from fair value adjustment on investment properties
  (63)
  - 
 
Valuation techniques are described in Note 9 to the Consolidated Financial Statements as of June 30, 2021. There were no changes to the valuation techniques.
 
For information on the development of Costa Urbana, see Note 8 to the consolidated financial statements as of December 31, 2021.
 
8.            
Property, plant and equipment
 
Changes in the Company’s property, plant and equipment for the six-month period ended December 31, 2021 and for the year ended June 30, 2021 were as follows:
 
 
 
12.21.21
 
 
06.30.21
 
 
 
Buildings and facilities
 
 
Furniture and fixtures
 
 
Machinery and equipment
 
 
Vehicles
 
 
Others
 
 
Total
 
 
Total
 
Costs
  337 
  120 
  325 
  8 
  - 
  790 
  763 
Accumulated depreciation
  (330)
  (94)
  (321)
  (8)
  - 
  (753)
  (731)
Net book amount at the beginning of the period / year
  7 
  26 
  4 
  - 
  - 
  37 
  32 
Additions
  9 
  1 
  19 
  - 
  - 
  29 
  27 
Depreciation (Note 19)
  (30)
  (8)
  (37)
  - 
  - 
  (75)
  (22)
Incorporated by merger (Note 4.1)
  1,378 
  76 
  165 
  - 
  2 
  1,621 
  - 
Balances at the end of the period / year
  1,364 
  95 
  151 
  - 
  2 
  1,612 
  37 
Costs
  2,306 
  499 
  2,728 
  42 
  2 
  5,577 
  790 
Accumulated depreciation
  (942)
  (404)
  (2,577)
  (42)
  - 
  (3,965)
  (753)
Net book amount at the end of the period / year
  1,364 
  95 
  151 
  - 
  2 
  1,612 
  37 
 
 
9.            
Trading properties
 
Changes in the Company’s trading properties for the six-month period ended December 31, 2021 and for the year ended June 30, 2021 were as follows:
 
 
 
12.31.21
 
 
06.30.21
 
 
 
Completed properties
 
 
Undevelopedproperties
 
 
Total
 
 
Total
 
Beginning of the period / year
  132 
  716 
  848 
  2,576 
Additions
  - 
  1 
  1 
  1,044 
Capitalized finance costs
  - 
  - 
  - 
  564 
Disposals (Note 19)
  - 
  - 
  - 
  (3,336)
Incorporated by merger (Note 4.1)
  14 
  146 
  160 
  - 
End of the period / year
  146 
  863 
  1,009 
  848 
Non-current
    
    
  872 
  716 
Current
    
    
  137 
  132 
Total
    
    
  1,009 
  848 
 
 
 
12
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
10.            
Intangible assets
 
Changes in Company’s intangible assets for the six-month period ended December 31, 2021 and for the year ended June 30, 2021 were as follows:
 
 
 
12.31.21
 
 
06.30.21
 
 
 
Computer software
 
 
Future units to be received from barters
 
 
Total
 
 
Total
 
Costs
  66 
  1,085 
  1,151 
  163 
Accumulated amortization
  (45)
  - 
  (45)
  (34)
Net book amount at the beginning of the period / year
  21 
  1,085 
  1,106 
  129 
Additions
  3 
  - 
  3 
  989 
Disposals
  - 
  (36)
  (36)
  - 
Amortization (Note 19)
  (41)
  - 
  (41)
  (12)
Incorporated by merger (Note 4.1)
  148 
  1,261 
  1,409 
  - 
Balances at the end of the period / year
  131 
  2,310 
  2,441 
  1,106 
Costs
  806 
  2,310 
  3,116 
  1,152 
Accumulated amortization
  (675)
  - 
  (675)
  (46)
Net book amount at the end of the period / year
  131 
  2,310 
  2,441 
  1,106 
 
11.            
Rights of use assets
 
Changes in Company’s rights of use assets for the six-month period ended December 31, 2021 and for the year ended June 30, 2021 were as follows:
 
 
  12.31.21 
  06.30.21 
Shopping malls
  663 
  - 
Machinery and equipment
  3 
  - 
Offices
  - 
  11 
Total rights of use assets
  666 
  11 
Non-current
  666 
  11 
Total
  666 
  11 
 
The charges to income related to rights of use assets were the following:
 
 
  12.31.21 
  06.30.21 
Shopping malls
  218 
  - 
Machinery and equipment
  2 
  - 
Others
  7 
  - 
Total amortizations and depreciation (Note 19)
  227 
  - 
 
 
12.            
Financial instruments by category
 
This note presents financial assets and financial liabilities by category of financial instrument and a reconciliation to the corresponding line item in the Statements of Financial Position, as appropriate. Financial assets and liabilities measured at fair value are assigned based on their different levels in the fair value hierarchy. For further information, related to fair value hierarchy see Note 13 to the Consolidated Financial Statements as of June 30, 2021.
 
 
13
IRSA Inversiones y Representaciones Sociedad Anónima
 
Financial assets and financial liabilities as of December 31, 2021 and June 30, 2021 are as follows:
 
 
 
Financial assets at amortized cost (i)
 
 
Financial assets at fair value through profit or loss
 
 
Subtotal financial assets
 
 
Non-financial assets
 
 
Total
 
 
 
 
 
 
Level 1
 
 
 
 
 
 
 
 
 
 
December 31, 2021
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets as per Statement of Financial Position
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Trade and other receivables (excluding the allowance for doubtful accounts and other receivables) (Note 13)
  5,364 
  - 
  5,364 
  2,934 
  8,298 
Investments in financial assets:
    
    
    
    
    
 - Public companies’ securities
  - 
  178 
  178 
  - 
  178 
 - Mutual funds (ii)
  - 
  31 
  31 
  - 
  31 
 - Bonds
  - 
  2,951 
  2,951 
  - 
  2,951 
 - Futures on foreign currency
  - 
  10 
  10 
  - 
  10 
Cash and cash equivalents:
    
    
    
    
    
 - Cash at bank and on hand
  869 
  - 
  869 
  - 
  869 
 - Short- term investments
  - 
  1,796 
  1,796 
  - 
  1,796 
Total
  6,233 
  4,966 
  11,199 
  2,934 
  14,133 
 
    
    
    
    
    
 
    
    
    
    
    
 
 
 
Financial liabilities at amortized cost (i)
 
 
Subtotal financial liabilities
 
 
Non-financial liabilities
 
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2021
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities as per Statement of Financial Position
 
 
 
 
 
 
 
 
 
 
 
 
Trade and other payables (Note 14)
  2,301 
  2,301 
  3,405 
  5,706 
Borrowings (Note 15)
  68,576 
  68,576 
  - 
  68,576 
Total
  70,877 
  70,877 
  3,405 
  74,282 
 
    
    
    
    
 
 
 
Financial assets at amortized cost (i)
 
 
Financial assets at fair value through profit or loss
 
 
Subtotal financial assets
 
 
Non-financial assets
 
 
Total
 
 
 
 
 
 
Level 1
 
 
 
 
 
 
 
 
 
 
June 30, 2021
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets as per Statement of Financial Position
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Trade and other receivables (excluding the allowance for doubtful accounts and other receivables) (Note 13)
  1,201 
  - 
  1,201 
  1,346 
  2,547 
Investments in financial assets:
    
    
    
    
    
 - Mutual funds (ii)
  - 
  12 
  12 
  - 
  12 
 - Bonds
  - 
  283 
  283 
  - 
  283 
Cash and cash equivalents:
    
    
    
    
    
 - Cash at bank and on hand
  106 
  - 
  106 
  - 
  106 
 - Short-term investments
  - 
  542 
  542 
  - 
  542 
Total
  1,307 
  837 
  2,144 
  1,346 
  3,490 
 
 
 
Financial liabilities at amortized cost (i)
 
 
Subtotal financial liabilities
 
 
Non-financial liabilities
 
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
June 30, 2021
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities as per Statement of Financial Position
 
 
 
 
 
 
 
 
 
 
 
 
Trade and other payables (Note 14)
  820 
  820 
  49 
  869 
Borrowings (Note 15)
  37,682 
  37,682 
  - 
  37,682 
Total
  38,502 
  38,502 
  49 
  38,551 
 
(i)
The fair value of financial assets and liabilities at amortized cost does not differ significantly from their book value, except for borrowings (Note 15). The fair value of payables approximates their respective carrying amounts because, due to their short-term nature, the effect of discounting is not considered significant.
(ii)
See description of reprofiling of public debt instruments in Note 33 to the consolidated annual financial statements.
 
As of December 31, 2021, there have been no changes to the economic or business circumstances affecting the fair value of the financial assets and liabilities of the Company.
 
 
 
14
IRSA Inversiones y Representaciones Sociedad Anónima
 
 13.          Trade and other receivables
 
 
Company’s trade and other receivables, as of December 31, 2021 and June 30, 2021 are comprised as follows:
 
 
  12.31.21 
  06.30.21 
Sales, leases and services receivables
  4,389 
  435 
Less: Allowance for doubtful accounts
  (769)
  (11)
Total trade receivables
  3,620 
  424 
Borrowings granted, deposits and others
  1,257 
  587 
Advance payments
  737 
  260 
Tax credits
  1,177 
  861 
Prepaid expenses
  489 
  219 
Long-term incentive plan
  15 
  18 
Dividends
  90 
  156 
Others
  144 
  11 
Total other receivables
  3,909 
  2,112 
Total trade and other receivables
  7,529 
  2,536 
Non-current
  1,983 
  1,408 
Current
  5,546 
  1,128 
Total
  7,529 
  2,536 
 
 
Movements on the Company’s allowance for doubtful accounts are as follows:
 
 
  12.31.21 
  06.30.21 
Beginning of period /year
  11 
  18 
Additions
  168 
  4 
Disposals / Recoveries
  (130)
  (1)
Currency translation adjustment
  869 
  - 
Inflation adjustment
  13 
  (10)
Incorporated by merger (Note 4.1)
  (162)
  - 
End of the period / year
  769 
  11 
 
 
The additions, disposals and recoveries of the allowance for doubtful accounts have been included in “Selling expenses” in the Statements of Income (Note 19). Amounts charged to the allowance for doubtful accounts are generally written off when there is no expectation of recovery.
 
14.
         Trade and other payables
 
Company’s trade and other payables as of December 31, 2021 and June 30, 2021 were as follows:
 
 
  12.31.21 
  06.30.21 
Customers´ advances
  1,378 
  33 
Trade payables
  887 
  413 
Accrued invoices
  653 
  359 
Admission rights
  1,226 
  - 
Other income to be accrued
  59 
  - 
Tenant deposits
  63 
  1 
Total trade payables
  4,266 
  806 
Director´s fees
  212 
  23 
Long-term incentive plan
  3 
  16 
Tax amnesty plans
  23 
  2 
Other payables
  483 
  9 
Other tax payables
  719 
  13 
Total other payables
  1,440 
  63 
Total trade and other payables
  5,706 
  869 
Non-current
  1,301 
  6 
Current
  4,405 
  863 
Total
  5,706 
  869 
 
 
 
15
IRSA Inversiones y Representaciones Sociedad Anónima
 
15. Borrowings
 
Company’s borrowings as of December 31, 2021 and June 30, 2021 are comprised as follows:
 
 
 
 
Book value as of 12.31.21
 
 
Book value as of 06.30.21
 
 
Fair value as of 12.31.21
 
 
Fair value as of 06.30.21
 
NCN
  54,842 
  19,687 
  53,143 
  19,111 
Bank loans
  835 
  1,055 
  835 
  1,055 
Related parties (Note 22)
  7,807 
  16,935 
  7,799 
  16,732 
Bank overdrafts
  5,092 
  5 
  5,092 
  5 
Total borrowings
  68,576 
  37,682 
  66,869 
  36,903 
Non-current
  58,391 
  19,388 
    
    
Current
  10,185 
  18,294 
    
    
Total
  68,576 
  37,682 
    
    
 
See Note 17 to the Unaudited Condensed Interim Consolidated Financial Statements.
 
 
16.
Currents and deferred income tax
 
The charge for the Company’s income tax is comprised as follows:
 
 
  12.31.21 
  12.31.20 
Deferred income tax
  (4,523)
  (3,636)
Current income tax
  (453)
  - 
Income tax
  (4,976)
  (3,636)
 
Below is a reconciliation between income tax recognized and the amount which would arise from applying the prevailing tax rate on profit before income tax for the six-month periods ended December 31, 2021 and 2020:
 
 
  12.31.21 
  12.31.20 
Net income at tax rate (i)
  (10,623)
  (1,373)
Permanent differences:
    
    
Share of profit of subsidiaries, associates and joint ventures
  (417)
  (735)
Income tax rate differential
  - 
  423 
Difference between provision and tax return
  207 
  98 
Recovery/ (provision) of loss carry forwards
  3,901 
  (1,691)
Inflation adjustment for tax purposes
  (3,781)
  (2,685)
Inflation adjustment
  5,735 
  2,273 
Non-deductible expenses and others
  2 
  54 
Income tax
  (4,976)
  (3,636)
 
(1) Income tax rate relevant in Argentina as of December 31, 2021 and 2020 was 35 % and 30 %, respectively.
 
Changes in the deferred tax account are as follows:
 
 
  12.31.21 
  06.30.20 
Beginning of the period / year
  (23,282)
  (13,439)
Income tax charge
  (4,523)
  (9,843)
Incorporated by merger (Note 4.1)
  (46,170)
  - 
End of the period / year
  (73,975)
  (23,282)
 
As of December 31, 2021, unrecognized ARS 3,170 million of tax loss carryforward. Based on the evolution of the business, Management is evaluating their recoverability.
 
 
16
IRSA Inversiones y Representaciones Sociedad Anónima
 
See Note 19 to the interim condensed consolidated financial statements.
 
17. Provisions
 
The table below presents the changes in the Company's provisions as of December 31, 2021 and June 30, 2021 were as follows:
 
 
 
12.31.21
 
 
06.30.21
 
 
 
Income tax (ii)
 
 
Labor, legal and other claims (i)
 
 
Total
 
 
Total
 
Beginning of period / year
  - 
  74 
  74 
  506 
Additions (i)
  71 
  118 
  189 
  32 
Decreases (i)
  - 
  (15)
  (15)
  (25)
Utilizations
  - 
  (45)
  (45)
  (32)
Transfers (Note 16)
  1,377 
  - 
  1,377 
  - 
Incorporated by merger (Note 4.1)
  - 
  166 
  166 
  - 
Inflation adjustment
  - 
  (42)
  (42)
  (43)
Share of loss
  - 
  - 
  - 
  (364)
End of period / year
  1,448 
  256 
  1,704 
  74 
Non-current
    
    
  1,539 
  32 
Current
    
    
  165 
  42 
Total
    
    
  1,704 
  74 
 
(i)
Additions and decreases in labor, legal and other claims are included in "Other operating results, net”. Additions and decreases in tax contingencies are included in "Financial results, net”.
(ii)
See Note 19 to the interim condensed consolidated financial statements – “Submission of income tax presentation”.
 
18. Revenues
 
 
  12.31.21 
  12.31.20 
Base rent
  2,678 
  48 
Contingent rent
  2,565 
  - 
Admission rights
  401 
  - 
Parking fees
  130 
  - 
Property management fees
  69 
  9 
Others
  42 
  - 
Averaging of scheduled rent escalation
  (280)
  - 
Rentals and services income
  5,605 
  57 
Sale of trading properties
  126 
  3,086 
Total revenues from sales, rentals and services
  5,731 
  3,143 
Expenses and collective promotion fund
  1,927 
  - 
Total revenues from expenses and collective promotion funds
  1,927 
  - 
Total revenues
  7,658 
  3,143 
 
19. Expenses by nature
 
The Company discloses expenses in the Statements of Income and Other Comprehensive Income by function as part of the line items “Costs”, “General and administrative expenses” and “Selling expenses”. The following table provides additional disclosure regarding expenses by nature and their relationship to the function within the Company.
 
 
 
Costs (i)
 
General and administrative expenses
 
 
Selling expenses
 
  12.31.21 
  12.31.20 
Salaries, social security costs and other personnel expenses
  830 
  691 
  23 
  1,544 
  184 
Maintenance, security, cleaning, repairs and others
  858 
  86 
  1 
  945 
  62 
Taxes, rates and contributions
  299 
  2 
  453 
  754 
  88 
Advertising and other selling expenses
  385 
  - 
  124 
  509 
  3 
Director´s fees (Note 22)
  - 
  370 
  - 
  370 
  75 
Amortization and depreciation
  282 
  66 
  2 
  350 
  9 
Fees and payments for services
  45 
  152 
  12 
  209 
  57 
Leases and services’ charges
  86 
  22 
  3 
  111 
  23 
Traveling, transportation and stationery expenses
  17 
  40 
  4 
  61 
  12 
Cost of sales of trading properties
  40 
  - 
  - 
  40 
  1,828 
Allowance for doubtful accounts (charge and recovery, net) (Note 13)
  - 
  - 
  38 
  38 
  3 
Bank expenses
  2 
  12 
  - 
  14 
  11 
Others
  8 
  - 
  - 
  8 
  - 
Total expenses by nature as of 12.31.21
  2,852 
  1,441 
  660 
  4,953 
  - 
Total expenses by nature as of 12.31.20
  1,894 
  383 
  78 
  - 
  2,355 
 
 
 
17
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
(i)
For the six-month period ended December 31, 2021, includes ARS 2,718 of rental and services costs and ARS 134 of costs of sales and developments, of which ARS 57 corresponds to investment properties and ARS 77 to trading properties. For the six-month period ended December 31, 2020, includes ARS 17 which correspond to rental and services costs and ARS 1,877 to costs of sales and developments, of which ARS 36 corresponds to investment properties and ARS 1,841 to trading properties.
 
20. Other operating results, net
 
 
  12.31.21 
  12.31.20 
Lawsuits and other contingencies (i)
  (103)
  (18)
Donations
  (34)
  (47)
Loss from purchase or disposal of subsidiaries, associates and/or joint ventures
  - 
  (1,014)
Management fee
  90 
  - 
Interest generated by operating credits
  66 
  6 
Others
  (63)
  4 
Total other operating results, net
  (44)
  (1,069)
 
(i)
Includes legal costs and expenses.
 
21. Financial results, net
 
 
  12.31.21 
  12.31.20 
Interest income
  95 
  32 
Total finance income
  95 
  32 
Interest expense
  (3,455)
  (2,720)
Other finance costs
  (307)
  (205)
Subtotal finance costs
  (3,762)
  (2,925)
Capitalized finance costs
  - 
  386 
Total finance costs
  (3,762)
  (2,539)
Net exchange difference
  6,935 
  (817)
Net gain from changes in fair value of financial assets
  661 
  2,891 
Gain/ (loss) from derivative financial instruments, net
  1 
  (65)
Gain from repurchase of non-convertible notes
  608 
  - 
Other financial results
  14 
  (63)
Total other financial results
  8,219 
  1,946 
Inflation adjustment
  562 
  (157)
Total financial results, net
  5,114 
  (718)
 
 
22.  Related party transactions
 
The following is a summary of the balances with related parties as of December 31, 2021 and June 30, 2021:
 
Item
  12.31.21 
  06.30.21 
Rights of use assets
  655 
  11 
Trade and other payables
  1,498 
  1,004 
Investments in financial assets
  2,339 
  283 
Trade and other receivables
  (743)
  (409)
Lease liabilities
  - 
  (13)
Borrowings
  (7,807)
  (16,935)
 
  (4,058)
  (16,059)
 
 
Related parties
  12.31.21 
  06.30.21 
Operation description
Item
Cresud
  (3)
  (1)
Long-term incentive plan payable
Trade and other receivables
 
  (256)
  (861)
Non-Convertible Notes
Borrowings
 
  (275)
  (61)
Corporate services payable
Trade and other receivables
 
  (31)
  (13)
Reimbursement of expenses payable
Trade and other receivables
 
  6 
  8 
Leases receivable
Trade and other payables
 
  2,339 
  - 
Non-Convertible Notes
Investments in financial assets
 
  (2)
  (2)
Management fee
Trade and other receivables
Total parent company
  1,778 
  (930)
 
 
 
 
18
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
Related parties
  12.31.21 
  06.30.21 
Operation description
Item
IRSA CP (*)
  - 
  171 
Reimbursement of expenses receivable
Trade and other payables
 
  - 
  (12)
Leases receivable
Trade and other receivables
 
  - 
  (5,120)
Non-Convertible Notes
Borrowings
 
  - 
  (9,453)
Loans received
Borrowings
 
  - 
  11 
Rights of use assets
Rights of use assets
 
  - 
  (60)
Corporate services payable
Trade and other receivables
 
  - 
  283 
Non-Convertible Notes
Investments in financial assets
 
  - 
  (14)
Non-Convertible Notes
Trade and other receivables
 
  - 
  (7)
Reimbursement of expenses payable
Trade and other receivables
 
  - 
  (2)
Leases payable
Trade and other receivables
 
  - 
  (13)
Lease liabilities
Lease liabilities
Tyrus
  324 
  581 
Borrowings granted
Trade and other payables
 
  4 
  - 
Reimbursement of expenses receivable
Trade and other payables
ECLSA
  - 
  5 
Reimbursement of expenses receivable
Trade and other payables
 
  (559)
  - 
Loans received
Borrowings
 
  - 
  129 
Dividends receivable
Trade and other payables
Panamerican Mall S.A.
  1 
  - 
Long-term incentive plan receivable
Trade and other payables
 
  50 
  - 
Reimbursement of expenses receivable
Trade and other payables
 
  8 
  - 
Management fees receivables
Trade and other payables
 
  221 
  - 
Borrowings granted
Trade and other payables
 
  (22)
  - 
Leases payable
Trade and other receivables
Arcos del Gourmet S.A.
  (3)
  - 
Leases and rights of use payable
Trade and other receivables
 
  (9)
  - 
Leases payable
Trade and other receivables
 
  4 
  - 
Management fees receivables
Trade and other payables
 
  18 
  - 
Reimbursement of expenses receivable
Trade and other payables
Fibesa S.A.
  2 
  - 
Reimbursement of expenses receivable
Trade and other payables
 
  (91)
  (67)
Loans received
Borrowings
 
  13 
  16 
Long-term incentive plan receivable
Trade and other payables
 
  90 
  - 
Dividends receivable
Trade and other payables
Shopping Neuquen S.A.
  655 
  - 
Rights of use assets
Rights of use assets
 
  30 
  - 
Reimbursement of expenses receivable
Trade and other payables
 
  177 
  - 
Borrowings granted
Trade and other payables
Efanur
  (147)
  (164)
Loans received
Borrowings
Torodur S.A.
  (801)
  (811)
Non-Convertible Notes
Borrowings
 
  (5,335)
  - 
Loans received
Borrowings
Ogden Argentina S.A
  367 
  - 
Borrowings granted
Trade and other payables
 
  1 
  - 
Reimbursement of expenses receivable
Trade and other payables
Ritelco S.A.
  (36)
  (47)
Loans received
Borrowings
 
  3 
  4 
Reimbursement of expenses receivable
Trade and other payables
Entretenimiento Universal S.A.
  49 
  - 
Borrowings granted
Trade and other payables
We are Appa S.A
  (1)
  - 
Other liabilities
Trade and other receivables
 
  1 
  - 
Other credits
Trade and other payables
La Arena S.A.
  1 
  - 
Reimbursement of expenses receivable
Trade and other payables
IRSA International LLC
  (32)
  - 
Other liabilities
Trade and other receivables
Emprendimiento Recoleta S.A
  1 
  1 
Long-term incentive plan receivable
Trade and other payables
Boulevard Norte S.A
  (5)
  - 
Reimbursement of expenses payable
Trade and other receivables
Palermo Invest S.A.
  - 
  14 
Dividends receivable
Trade and other payables
 
  2 
  1 
Contributions to integrate
Trade and other payables
Inversora Bolívar S.A.
  - 
  12 
Dividends receivable
Trade and other payables
Real Estate Investment Group VII LP
  (35)
  (41)
Loans received
Borrowings
TGLT S.A.
  - 
  (58)
Other liabilities
Trade and other receivables
Nuevo Puerto Santa Fe S.A
  11 
  - 
Management fees receivables
Trade and other payables
 
  (1)
  - 
Leases and rights of use payable
Trade and other receivables
 
  1 
  - 
Long-term incentive plan receivable
Trade and other payables
 
  2 
  - 
Reimbursement of expenses receivable
Trade and other payables
Quality S.A
  10 
  - 
Contributions to integrate
Trade and other payables
Total subsidiaries, associates and joint ventures
  (5,031)
  (14,641)
 
 
 
 
 
19
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
Related parties
  12.31.21 
  06.30.21 
Operation description
Item
Directors
  - 
  (23)
Reimbursement of expenses payable
Trade and other receivables
 
  (212)
  - 
Fees
Trade and other receivables
 
  5 
  6 
Borrowings granted
Trade and other payables
Total directors
  (207)
  (17)
 
 
Futuros y Opciones.Com S.A.
  1 
  - 
Reimbursement of expenses receivable
Trade and other payables
 
  2 
  - 
Prepayments
Trade and other payables
 
  - 
  (36)
Surety
Borrowings
CYRSA S.A
  (39)
  (43)
Loans received
Borrowings
Banco Hipotecario S.A.
  6 
  (1)
Leases receivable
Trade and other payables
 
  (1)
  - 
Leases and rights of use payable
Trade and other receivables
BHN Vida S.A.
  (3)
  - 
Guaranty deposits
Trade and other receivables
 
  (58)
  (65)
Non-Convertible Notes
Borrowings
BHN Sociedad de Inversion S.A.
  1 
  - 
Leases receivable
Trade and other payables
BACS ADMINISTRADORA DE ACTIVOS S.A
  7 
  - 
Leases receivable
Trade and other payables
BHN Seguros Generales S.A.
  (43)
  (63)
Non-Convertible Notes
Borrowings
Banco de Crédito y Securitización
  (4)
  - 
Leases and rights of use payable
Trade and other receivables
Consultores Asset Management S.A. (CAMSA)
  - 
  7 
Reimbursement of expenses receivable
Trade and other payables
 
  11 
  - 
Reimbursement of expenses receivable
Trade and other payables
Estudio Zang, Bergel & Viñes
  (1)
  1 
Legal Services
Trade and other receivables
 
  1 
  - 
Reimbursement of expenses receivable
Trade and other payables
Austral Gold
  2 
  1 
Reimbursement of expenses receivable
Trade and other payables
Fundación Museo de los Niños
  9 
  - 
Leases receivable
Trade and other payables
IRSA - Galerías Pacífico S.A. U.T.
  (223)
  - 
Loans received
Borrowings
 
  (134)
  (157)
Other liabilities
Trade and other receivables
La Rural S.A.
  (4)
  - 
Leases and rights of use payable
Trade and other receivables
New Lipstick
  25 
  28 
Reimbursement of expenses receivable
Trade and other payables
Lipstick Management LLC
  (120)
  (133)
Loans received
Borrowings
Liveck S.A.
  1 
  2 
Borrowings granted
Trade and other payables
Inversiones Financieras del Sur S.A.
  1 
  - 
Reimbursement of expenses receivable
Trade and other payables
Agrofy S.A.
  1 
  - 
Reimbursement of expenses receivable
Trade and other payables
Hoteles Argentinos S.A
  3 
  - 
Other credits
Trade and other payables
 
  5 
  5 
Hotel services receivable
Trade and other payables
Nuevas Fronteras S.A
  (29)
  (31)
Loans received
Borrowings
 
  18 
  10 
Hotel services receivable
Trade and other payables
Llao Llao Resorts S.A.
  1 
  4 
Hotel services receivable
Trade and other payables
 
  1 
  - 
Reimbursement of expenses receivable
Trade and other payables
Helmir S.A
  (35)
  - 
Non-Convertible Notes
Borrowings
Total others
  (598)
  (471)
 
 
Total
  (4,058)
  (16,059)
 
 
 
 
 
20
IRSA Inversiones y Representaciones Sociedad Anónima
 
The following is a summary of the results with related parties for the six-month period ended December 31, 2021 and 2020:
 
Related party
  12.31.21 
  12.31.20 
Operation description
Cresud
  30 
  18 
Leases and/or rights of use
 
  (126)
  (57)
Financial operations
 
  (324)
  (109)
Corporate services
Total parent company
  (420)
  (148)
 
IRSA CP (*)
  - 
  728 
Financial operations
 
  - 
  (32)
Corporate services
 
  - 
  (5)
Leases and/or rights of use
Arcos del Gourmet S.A.
  (5)
  - 
Leases and/or rights of use
 
  22 
  - 
Fees
Fibesa S.A.
  2 
  - 
Leases and/or rights of use
 
  1 
  - 
Fees
 
  3 
  - 
Financial operations
Ritelco
  4 
  - 
Financial operations
Torodur S.A.
  807 
  - 
Financial operations
Efanur
  16 
  (2)
Financial operations
Helmir S.A
  1 
  - 
Financial operations
Tyrus S.A.
  (37)
  9 
Financial operations
Lipstick Management
  12 
  - 
Financial operations
Shopping Neuquén S.A.
  (17)
  - 
Financial operations
 
  (218)
  - 
Leases and/or rights of use
Ogden Argentina S.A
  (36)
  - 
Financial operations
Entretenimiento Universal S.A.
  (5)
  - 
Financial operations
ECLSA
  (6)
  - 
Financial operations
Panamerican Mall S.A.
  42 
  - 
Fees
 
  (4)
  - 
Leases and/or rights of use
 
  (24)
  - 
Financial operations
Emprendimiento Recoleta S.A.
  1 
  - 
Fees
CYRSA S.A
  4 
  - 
Financial operations
CELP S.A.
  (2)
  - 
Leases and/or rights of use
We are Appa S.A
  3 
  - 
Fees
 
  1 
  - 
Leases and/or rights of use
Nuevo Puerto Santa Fe S.A.
  (1)
  - 
Leases and/or rights of use
 
  7 
  - 
Fees
Quality Invest S.A.
  2 
  - 
Fees
 
  (1)
  - 
Leases and/or rights of use
Other subsidiaries, associates and joint ventures (1)
  - 
  11 
Financial operations
Total subsidiaries, associates and joint ventures
  572 
  709 
 
Directors
  (370)
  (75)
Fees
Senior Management
  (8)
  (6)
Fees
Total Directors and Senior Management
  (378)
  (81)
 
BHN Seguros Generales S.A.
  11 
  - 
Leases and/or rights of use
BHN Sociedad de Inversión S.A.
  4 
  - 
Leases and/or rights of use
BHN Vida S.A.
  12 
  5 
Leases and/or rights of use
BACS Administradora de Activos S.A.
  9 
  - 
Leases and/or rights of use
Austral Gold S.A
  2 
  - 
Leases and/or rights of use
 
  2 
  - 
Fees
Consultores Asset Management S.A.
  4 
  - 
Leases and/or rights of use
 
  1 
  - 
Fees
Hamonet S.A.
  (2)
  - 
Leases and/or rights of use
Isaac Elsztain e Hijos S.C.A.
  (5)
  (5)
Leases and/or rights of use
Estudio Zang, Bergel & Viñes
  (17)
  (12)
Fees
Banco de Crédito y Securitización S.A.
  22 
  - 
Leases and/or rights of use
Consultores Assets Management
  - 
  8 
Leases and/or rights of use
Fundación IRSA
  (17)
  - 
Donations
 
  1 
  - 
Leases and/or rights of use
Museo de los niños
  - 
  (20)
Donations
 
  (6)
  - 
Discounts received in leases and/or rights of use
Fundación Puerta 18
  (5)
  (14)
Donations
IRSA - Galerías Pacífico S.A. U.T.
  7 
  - 
Financial operations
HASA
  1 
  - 
Fees
Nuevas Fronteras S.A.
  8 
  - 
Fees
 
  2 
  - 
Financial operations
Total others
  34 
  (38)
 
Total at the end of the period
  (192)
  442 
 
 
(1)
It includes Inversora Bolívar S.A., Cyrsa S.A., BACS, Palermo Invest S.A., y Liveck S.A...
(*) As of December 31, 2021, the balances of IRSA CP are zero due to the merger between both companies. See Note 4.1.
 
21
IRSA Inversiones y Representaciones Sociedad Anónima
 
The following is a summary of the transactions with related parties without impact in results for the six-month period ended December 31, 2021 and 2020:
 
Related party
  12.31.21 
  12.31.20 
 
IRSA CP
  - 
  (12,265)
Dividends distribution
Total distribution of dividends
  - 
  (12,265)
 
Fibesa S.A.
  108 
  - 
Dividends received
Arcos del Gourmet S.A
  282 
  - 
Dividends received
Total distribution of dividends
  390 
  - 
 
PISA
  (14)
  - 
Irrevocable contributions
Inversora Bolívar S.A.
  (11)
  - 
Irrevocable contributions
ECLASA
  (125)
  - 
Irrevocable contributions
Total distribution of dividends
  (150)
  - 
 
Tyrus
  (117)
  (3,482)
Irrevocable contributions granted
HASA
  (32)
  (25)
Irrevocable contributions granted
Liveck S.A.
  - 
  (5)
Irrevocable contributions granted
Quality Invest S.A.
  (30)
  - 
Irrevocable contributions granted
Torodur S.A
  (172)
  - 
Irrevocable contributions granted
Total contributions to subsidiaries
  (351)
  (3,512)
 
 
 
23.
Foreign currency assets and liabilities
 
Book amounts of foreign currency assets and liabilities are as follows:
 
Item (1)
 
 Amount (2)
 
 
 Foreign exchange rate (3)
 
 
Total as of 12.31.21
 
 
Total as of 06.30.21
 
Assets
 
 
 
 
 
 
 
 
 
 
 
 
Trade and other receivables
 
 
 
 
 
 
 
 
 
 
 
 
US Dollar
  7.71 
  102.52 
  790 
  340 
 Euros
  0.09 
  115.89 
  11 
  17 
Receivables with related parties
    
    
    
    
US Dollar
  10.06 
  102.72 
  1,033 
  620 
Total Trade and other receivables
    
    
  1,834 
  977 
Investments in financial assets
    
    
    
    
US Dollar
  6.08 
  102.52 
  623 
  12 
Investment in financial assets with related parties
    
    
    
    
US Dollar
  22.77 
  102.72 
  2,339 
  283 
Total Investments in financial assets
    
    
  2,962 
  295 
Cash and cash equivalents
    
    
    
    
US Dollar
  6.93 
  102.52 
  710 
  104 
Total Cash and cash equivalents
    
    
  710 
  104 
Total Assets
    
    
  5,506 
  1,376 
 
    
    
    
    
Liabilities
    
    
    
    
Trade and other payables
    
    
    
    
US Dollar
  3.10 
  102.72 
  318 
  153 
Euros
  - 
  - 
  - 
  16 
Payables with related parties
    
    
    
    
US Dollar
  0.43 
  102.72 
  44 
  63 
Total Trade and other payables
    
    
  362 
  232 
Lease liabilities
    
    
    
    
US Dollar
  0.02 
  102.72 
  2 
  12 
Total Lease liabilities
    
    
  2 
  12 
Borrowings
    
    
    
    
US Dollar
  489.59 
  102.72 
  50,291 
  15,462 
Borrowings with related parties
    
    
    
    
US Dollar
  76.31 
  102.72 
  7,839 
  6,346 
Total Borrowings
    
    
  58,130 
  21,808 
Total Liabilities
    
    
  58,494 
  22,052 
 
(1)
Considering foreign currencies those that differ from Group’s functional currency at each period / year.
(2)
Expressed in millions of foreign currency.
(3)
Exchange rate as of December 31, 2021 according to Banco de la Nación Argentina records.
 
 
22
IRSA Inversiones y Representaciones Sociedad Anónima
 
 
24.
Additional information
 
Operations not affecting funds
 
  12.31.21 
  12.31.20 
 
    
    
Currency translation adjustment
  (421)
  (4,696)
Other comprehensive gain of subsidiaries
  - 
  512 
Changes in non-controlling interest
  - 
  619 
Other changes in subsidiaries` equity
  - 
  8,816 
Increase in borrowings through an increase in trading properties
  - 
  386 
Increase in investments in associates and joint ventures through dividends received
  - 
  2,912 
Dividends received through a decrease in borrowings of subsidiaries
  - 
  9,352 
Increase in investments in associates and joint ventures through a decrease in trade and other receivables
  - 
  1,076 
Decrease in borrowings through a decrease in trade and other receivables
  - 
  593 
Distribution of dividends in shares through a decrease in investments in associates and joint ventures
  - 
  875 
Issuance of NCN through of payment of loans
  - 
  613 
Decrease in lease liabilities through a decrease in trade and other receivables
  3 
  - 
Increase in dividends receivable through a decrease in investments in associates and joint ventures
  109 
  - 
Decrease in dividends receivable through an increase in investments in associates and joint ventures
  155 
  - 
Decrease in investments in associates and joint ventures through a decrease in other liabilities.
  8 
  - 
 
Incorporation by merger
 
 
 
 
 
 
 
 
  12.31.21 
Book value of identifiable assets and assumed liabilities::
    
Investment properties
  122,288 
Property, plant and equipment
  1,621 
Trading properties
  160 
Intangible assets
  1,409 
Investments in subsidiaries, associates and joint ventures
  24,144 
Investments in financial assets
  3,091 
Income tax credit
  37 
Trade and other receivables
  5,313 
Rights of use assets
  874 
Inventories
  41 
Borrowings
  40,459 
Deferred income tax liabilities
  46,170 
Trade and other payables
  5,082 
Lease liabilities
  2 
Provisions
  166 
Other liabilities
  54 
Salaries and social security liabilities
  289 
Income tax liabilities
  1,131 
Cash and cash equivalents
  65 
 
 
25.
CNV General Resolution N° 622/13
 
As required by Section 1°, Chapter III, Title IV of CNV General Resolution N° 622/13, below is a detail of the notes to the Unaudited Condensed Interim Separate Financial Statements that disclose the information required by the Resolution in Exhibits.
 
Exhibit A - Property, plant and equipment
Note 7 Investment properties and Note 8 Property, plant and equipment
Exhibit B - Intangible assets
Note 10 Intangible assets
Exhibit C - Equity investments
Note 6 Information about the main subsidiaries, associates and joint ventures
Exhibit D - Other investments
Note 12 Financial instruments by category
Exhibit E - Provisions
Note 13 Trade and other receivables and Note 17 Provisions
Exhibit F - Cost of sales and services provided
Note 9 Trading properties and Note 19 Expenses by nature
Exhibit G - Foreign currency assets and liabilities
Note 23 Foreign currency assets and liabilities
 
 
 
23
IRSA Inversiones y Representaciones Sociedad Anónima
 
26.
     CNV General Resolution N° 629/14 – Storage of documentation
 
On August 14, 2014, the CNV issued General Resolution N° 629 whereby it introduced amendments to rules related to storage and conservation of corporate books, accounting books and commercial documentation. In this sense, it should be noted that the Company has entrusted the storage of certain non-sensitive and old information to the following provider:
 
Storage of documentation responsible
 
Location
Iron Mountain Argentina S.A.
 
Av. Amancio Alcorta 2482, Autonomous City of Buenos Aires
 
San Miguel de Tucumán 601, Carlos Spegazzini.
 
Torcuato Di Tella 1800, Carlos Spegazzini.
 
Puente del Inca 2540, Carlos Spegazzini
 
It is further noted that a detailed list of all documentation held in custody by providers, as well as documentation required in section 5 a.3) of Section I, Chapter V, Title II of the CNV RULES (2013 as amended) are available at the registered office.
 
On February 5, 2014 there was a widely known accident in Iron Mountain’s warehouse. Such company is a supplier of the Company and Company’s documentation was being kept in the mentioned warehouse. Based on the internal review carried out by the Company, duly reported to the CNV on February 12, 2014, the information kept at the Iron Mountain premises that were on fire do not appear to be sensitive or capable of affecting normal operations.
 
27.
Economic context in which the Company operates
 
See Note 29 to the Unaudited Condensed Interim Consolidated Financial Statements.
 
28.
Subsequent events
 
See Note 30 to the Unaudited Condensed Interim Consolidated Financial Statements.
 
 
24
 
Free translation from the original prepared in Spanish for publication in Argentina
 
 
REVIEW REPORT ON THE UNAUDITED CONDENSED INTERIM SEPARATE FINANCIAL STATEMENTS
  
To the Shareholders, President and Directors of
IRSA Inversiones y Representaciones Sociedad Anónima
Legal address: Carlos Della Paolera 261 - 9th floor
Autonomous City of Buenos Aires
Tax Registration Number: 30-52532274-9
 
Introduction
 
We have reviewed the accompanying unaudited condensed interim separate financial statements of IRSA Inversiones y Representaciones Sociedad Anónima (“the Company”), including the unaudited condensed interim separate statement of financial position at December 31, 2021, the unaudited condensed interim separate statements of income and other comprehensive income for the six month period and threemonth period ended December 31, 2021 and the unaudited condense interim separate statements of changes in shareholders’ equity and of cash flows for the sixmonth period then ended, and selected explanatory notes.
 
The balances and other information for the fiscal year ended on June 30, 2021 and its interim periods are an integral part of the financial statements mentioned above; therefore, they must be considered in connection with these financial statements.
 
Management’s responsibility
 
The Board of Directors of the Company is responsible for the preparation and presentation of these unaudited condensed interim separate financial statements in accordance with International Financial Reporting Standards, adopted by the Argentine Federation of Professional Councils in Economic Sciences (FACPCE) as professional accounting standards and included by the National Securities Commission (CNV) in its regulations, as approved by the International Accounting Standards Board (IASB), and is therefore responsible for the preparation and presentation of the unaudited condensed interim separate financial statements mentioned in the first paragraph, in accordance with International Accounting Standard 34 Interim Financial Information (IAS 34).
 
 
25
 
Free translation from the original prepared in Spanish for publication in Argentina
 
 
Scope of our review
 
Our review was limited to the application of the procedures established under International Standards on Review Engagements ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity, adopted as a review standard in Argentina by Technical Pronouncement No. 33 of the FACPCE and approved by the International Auditing and Assurance Standards Board (IAASB). A review of interim financial information consists of inquiries of Company staff responsible for preparing the information included in the unaudited condensed interim separate financial statements and of analytical and other review procedures. This review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion on the separate statements of financial position, and the separate statements of income and other comprehensive income and of cash flows of the Company.
 
Conclusion
 
On the basis of our review, nothing has come to our attention that causes us to believe that the unaudited condensed interim separate financial statements mentioned in the first paragraph of this report have not been prepared, in all material respects, in accordance with International Accounting Standard 34 Interim Financial Reporting.
 
Report on compliance with current regulations
 
In accordance with current regulations, we report, in connection with IRSA Inversiones y Representaciones Sociedad Anónima, that:
 
a) the unaudited condensed interim separate financial statements of IRSA Inversiones y Representaciones Sociedad Anónima have not been transcribed into the Inventory and Balance Sheet book and, except for the above mentioned situation, as regards those matters that are within our competence, they are in compliance with the provisions of the General Companies Law and pertinent resolutions of the National Securities Commission;
 
b) the unaudited condensed interim separate financial statements of IRSA Inversiones y Representaciones Sociedad Anónima arise from accounting records carried in all formal aspects in accordance with legal requirements except for i) the lack of transcription to the Inventories and Balance Sheet Book, and ii) the lack of transcription to the General Journal Book of the accounting entries corresponding to the month of December 2021;
 
 
 
26
 
Free translation from the original prepared in Spanish for publication in Argentina
 
 
c) at December 31, 2021 the debt of IRSA Inversiones y Representaciones Sociedad Anónima accrued in favor of the Argentine Integrated Social Security System, as shown by the Company’s accounting records, amounted to ARS 40,512,941, which was not due at that date.
 
Autonomous City of Buenos Aires, February 9, 2022
 
PRICE WATERHOUSE & CO. S.R.L.
 
                                                                    (Partner)
 
ABELOVICH, POLANO & ASOCIADOS S.R.L.
 
                                                                                      (Partner)
C.P.C.E.C.A.B.A. V° 1 F° 17
 
C.P.C.E.C.A.B.A. V. 1 F. 30
Marcelo Héctor Fuxman
Public Accountant (UBA)
C.P.C.E. C.A.B.A. V. 134 F. 85
Carlos Brondo
Public Accountant (UNCUYO)
C.P.C.E.C.A.B.A. V. 391 F. 078
 
 José Daniel Abelovich
Public Accountant (UBA)
C.P.C.E. C.A.B.A. V. 102 F. 191
 
 
 
27
 
 
I. Brief comment on the Company’s activities during the period, including references to significant events occurred after the end of the period.
 
Economic context in which the Group operates
 
The Group operates in a complex context both due to macroeconomic conditions, whose main variables have recently experienced strong volatility, as well as regulatory, social, and political conditions, both nationally and internationally.
 
The results from operations may be affected by fluctuations in the inflation and the exchange rate of the Argentine peso against other currencies, mainly the dollar, changes in interest rates which have an impact on the cost of capital, changes in government policies, capital controls and other political or economic events both locally and internationally.
 
The main indicators of the Argentine economy are described below:
 
●
In November 2021, the Monthly Economic Activity Estimator (“EMAE” in Spanish) reported by the National Institute of Statistics and Censuses (“INDEC” in Spanish), registered a variation of 9.3% compared to the same month of 2020, and 1.7% compared to the previous month.
 
●
The annual retail inflation reached 50.94% in the last 12 months. The survey on market expectations prepared by the Argentine Central Bank in December 2021, called the Market Expectations Survey (“REM” in Spanish), estimates a retail inflation of 54.8% i.a. for December 2022 and 43.4% for December 2023. Analysts participating in the REM forecast a rebound in economic activity in 2022, reaching an economic growth of 2.9%.
 
●
In the period from December 2020 to December 2021, the Argentine peso depreciated 22.1% against the US dollar according to the wholesale average exchange rate of Banco de la Nación Argentina. Given the exchange restrictions in force since August 2019, as of December 31, 2021, there is an exchange gap of approximately 92.3% between the official price of the dollar and its price in parallel markets, which impacts the level of activity in the economy and affects the level of reserves of the Argentine Central Bank. Additionally, these exchange restrictions, or those that may be dictated in the future, could affect the Group's ability to access the Single Free Exchange Market (“MULC” in Spanish) to acquire the necessary currencies to meet its financial obligations.
 
COVID-19 pandemic
 
In December 2019, a new strain of coronavirus (SARS-COV-2), which caused severe acute respiratory syndrome (COVID-19) appeared in Wuhan, China. On March 11, 2020, the World Health Organization declared COVID-19 a pandemic. In response, countries have taken extraordinary measures to contain the spread of the virus, including imposing travel restrictions and closing borders, closing businesses deemed non-essential, instructing residents to practice social distancing, implementing lockdowns, among other measures. The ongoing pandemic and these extraordinary government measures are affecting global economic activity, resulting in significant volatility in global financial markets.
 
On March 3, 2020, the first case of COVID-19 was registered in the country and as of today, more than 8,500,000 cases of infections had been confirmed in Argentina, by virtue of which the Argentinian Government implemented a series of health measures of social, preventive and mandatory lockdown at the national level with the closure of non-essential activities, including shopping malls, as well as the suspension of flights and border closures, for much of the years 2020 and 2021.
 
Since the beginning of fiscal year 2022, and until the date of presentation of the financial statements, the Company's shopping malls are fully operational, as well as the office buildings, despite the remote work modality that some tenants continue to apply. Regarding hotels, although they have been operating since December 2020, the sector continues working with certain restrictions on air flows and the influx of international tourism.
 
The final extent of the Coronavirus outbreak and its impact on the country's economy is still uncertain. However, although it has produced significant short-term effects, they are not expected to affect business continuity and the Group’s ability to meet its financial commitments for the next twelve months.
 
The Group is closely monitoring the situation and taking all necessary measures to preserve human life and the Group's businesses.
 
Merger by absorption of IRSA and IRSA Propiedades Comerciales
 
On September 30, 2021, IRSA & IRSA Propiedades Comerciales Boards of Directors approved the prior merger agreement between both companies and the corresponding special financial statements as of June 30, 2021, initiating the corporate reorganization process under the terms of art. 82 et seq. of the General Law of Companies. The merger process has particular characteristics given that they are two companies included in the public offering regime, reason why, not only apply the current provisions of the General Law of Companies but also the procedures established regarding reorganization of companies of the Regulations of the “Comisión Nacional de Valores” (National Securities Commission) and the markets, both national and foreign, where their shares are listed.
 
The Merger is carried out in order to streamline the technical, administrative, operational and economic resources of both Companies, standing out among others: (a) the operation and maintenance of a single transactional information system and centralization of the entire accounting registration process; (b) presentation of a single financial statement to the different control agencies with the consequent cost savings in accounting and advisory fees, tariffs and other related expenses; (c) simplification of the accounting information reporting and consolidation process, as a consequence of the reduction that the merger would imply for the corporate structure as a whole; (d) removal of the IRSA PC public offering listing on BYMA and NASDAQ with the associated costs that this represents; (e) cost reduction for legal fees and tax filings; (f) increase in the percentage of the capital stock that is listed in the different markets, increasing the liquidity of the listed shares; (g) tax efficiencies and (h) preventively avoid the potential overlap of activities between the Companies.
 
In accordance with the commitments assumed in the Prior Merger Commitment, having obtained the administrative consent of the United States Securities and Exchange Commission, an entity to which they are subject because both companies list their shares in markets that operate in said jurisdiction, The shareholders' meetings of both companies were called.
 
On December 22, 2021, the Shareholders' Meetings of IRSA and IRSA PC were held, approving the merger by absorption, whose effective date was established on July 1, 2021. As of that date, the transfer to the absorbent of the total equity of the absorbed company, thereby incorporating all its rights and obligations, assets and liabilities into the equity of the absorbing company.
 
Likewise, and within the framework of the reorganization process, the Board of Directors has approved the exchange ratio, which has been established at 1.40 IRSA shares for each IRSA PC share, which is equivalent to 0.56 IRSA GDS for each ADS of IRSA PC. Within this framework, it was decided to increase the share capital by issuing 152,158,215 new shares in IRSA.
 
The exchange of IRSA PC shares for IRSA shares will be carried out once the entire administrative process has been completed and once the registration has been made in the “Inspección General de Justicia” (General Inspection of Justice), a process that may take several months.
 
 
1
 
IRSA Inversiones y Representaciones Sociedad Anónima
 
Summary as of December 31, 2021
 
 
Consolidated Results
 
(in millions of ARS)
 
IIQ 22
 
 
IIQ 21
 
 
YoY Var
 
 
IIQ 20
 
 
YoY Var
 
Revenues
  6,222 
  4,770 
  30.4%
  8,937 
  (30.4)%
Result from fair value adjustment of investment properties
  29,607 
  (26,492)
  - 
  (12,762)
  - 
Result from operations
  31,891 
  (25,572)
  - 
  (8,891)
  - 
Depreciation and amortization
  180 
  141 
  27.7%
  281 
  (35.9)%
EBITDA (1)
  32,071 
  (25,431)
  - 
  (8,610)
  - 
Adjusted EBITDA (1)
  4,392 
  4,012 
  9.5%
  3,662 
  19.9%
Result for the period
  26,638 
  (15,772)
  - 
  (15,253)
  - 
Attributable to equity holders of the parent
  26,383 
  (11,998)
  - 
  (10,498)
  - 
Attributable to non-controlling interest
  255 
  (3,774)
  - 
  (4,755)
  - 
(1)
See Point XIX: EBITDA Reconciliation
 
(in millions of ARS)
  6M 22 
  6M 21 
 
YoY Var
 
  6M 20 
 
YoY Var
 
Revenues
  11,051 
  7,473 
  47.9%
  16,477 
  (32.9)%
Result from fair value adjustment of investment properties
  22,450 
  13,986 
  60.5%
  7,989 
  181.0%
Result from operations
  26,511 
  13,945 
  90.1%
  14,873 
  78.2%
Depreciation and amortization
  344 
  346 
  (0.6)%
  480 
  (28.3)%
EBITDA (1)
  26,855 
  14,291 
  87.9%
  15,353 
  74.9%
Adjusted EBITDA (1)
  6,467 
  12,253 
  (47.2)%
  6,874 
  (5.9)%
Result for the period
  25,520 
  (1,758)
  - 
  9,979 
  155.7%
Attributable to equity holders of the parent
  25,722 
  (882)
  - 
  (2,922)
  - 
Attributable to non-controlling interest
  (202)
  (876)
  (76.9)%
  12,901 
  (101.6)%
(1)
See Point XIX: EBITDA Reconciliation
 
Group’s income increased by 47.9% during the first semester of fiscal year 2022 compared to the same quarter of fiscal year 2021 mainly due to the impact of COVID-19 pandemic in the Shopping Malls and Hotels segments that straightly affected operations during previous fiscal year.
 
Adjusted EBITDA decreased by 47.2% mainly explained by Sales and Developments segment which recorded lower sales of investment properties compared to last fiscal year. Rental segments Adjusted EBITDA reached ARS 5,489 million, ARS 4,298 million from the Shopping Malls segment, ARS 834 million from the Offices segment and ARS 357 million from Hotels Segment, increasing 68.7% compared to the previous fiscal year but still 31.5% below pre-pandemic levels.
 
Net result for the first half of fiscal year 2022 registered a gain of ARS 25,520 million compared to a loss of ARS 1,758 million during the same period of previous fiscal. This is mainly explained by the gain recorded for changes in the fair value of investment properties due to the increase in the valuation of the "Costa Urbana" property, whose development project was approved by the Legislature of the Autonomous City of Buenos Aires in December 2021.
 
II. Shopping Malls
 
Our portfolio’s leasable area totaled 335,279 sqm of GLA. Real tenants’ sales of our shopping centers reached ARS 92,168 million in the first half of fiscal year 2022, 122% higher than in 6M21 and 0.7% lower than in 6M20. Sales for the second quarter of fiscal year 2022 were ARS 54,479, exceeding sales for the same period of 2021 and 2020 by 66.0% and 7.6%, respectively.
 
Portfolio’s occupancy reached 89.1%, mainly due to the exit of Garbarino in Alto Avellaneda Shopping. Excluding the effect of the remaining vacancy from large stores, occupancy would have been 95.5%.
 
 
2
 
IRSA Inversiones y Representaciones Sociedad Anónima
 
Summary as of December 31, 2021
 
 
Shopping Malls’ Operating Indicators
 
 
 
IIQ 22
 
 
IQ 22
 
 
IVQ 21
 
 
IIIQ 21
 
 
IIQ 21
 
Gross leasable area (sqm)
  335,279 
  335,641 
  334,826 
  335,893 
  333,460 
Tenants’ sales (3 months cumulative in current currency)
  54,479 
  37,689 
  18,640 
  31,148 
  32,809 
Occupancy
  89.1%
  89.6%
  89.9%
  89.5%
  88.3%
 
Shopping Malls’ Financial Indicators
 
(in millions of ARS)
 
 
IIQ 22
 
 
IIQ 21
 
 
YoY Var
 
 
IIQ 20
 
 
YoY Var
 
Revenues from sales, leases, and services
  3,539 
  2,316 
  52.8%
  3,984 
  (11.2)%
Net result from fair value adjustment on investment properties
  (1,473)
  (9,167)
  (83.9)%
  (4,865)
  (69.7)%
Result from operations
  1,125 
  (7,641)
  - 
  (1,964)
  - 
Depreciation and amortization
  40 
  32 
  25.0%
  86 
  (53.5)%
EBITDA (1)
  1,165 
  (7,609)
  - 
  (1,878)
  - 
Adjusted EBITDA (1)
  2,638 
  1,558 
  69.3%
  2,987 
  (11.7)%
(1)
See Point XIX: EBITDA Reconciliation
 
(in millions of ARS)
 
  6M 22 
  6M 21 
 
YoY Var
 
  6M 20 
 
YoY Var
 
Revenues from sales, leases, and services
  5,991 
  2,933 
  104.3%
  7,488 
  (20.0)%
Net result from fair value adjustment on investment properties
  (5,549)
  (7,188)
  (22.8)%
  (3,855)
  43.9%
Result from operations
  (1,345)
  (5,976)
  (77.5)%
  1,536 
  (187.6)%
Depreciation and amortization
  94 
  103 
  (8.7)%
  148 
  (36.5)%
EBITDA (1)
  (1,251)
  (5,873)
  (78.7)%
  1,684 
  (174.3)%
Adjusted EBITDA (1)
  4,298 
  1,315 
  226.8%
  5,539 
  (22.4)%
(1)
See Point XIX: EBITDA Reconciliation
 
Income from this segment during the first semester of fiscal year 2022 reached ARS 5,991 million, an increase of 104.3% when compared with the same period of previous fiscal year, but still 20.0% below pre-pandemic levels. Adjusted EBITDA for the first half of fiscal year 2022 reached ARS 4,298 million, a 22.4% lower than in the first half of fiscal year 2020, not affected by the pandemic.
 
Operating data of our shopping malls
 
 
Date of acquisition
Location
 
Gross Leasable Area (sqm)(1)
 
 
Stores
 
 
Occupancy (2)
 
 
IRSA CP Interest (3)
 
Alto Palermo
Dec-97
City of Buenos Aires
  19,925 
  144 
  100.0%
  100%
Abasto Shopping(4)
Nov-99
City of Buenos Aires
  36,798 
  159 
  96.1%
  100%
Alto Avellaneda
Dec-97
Province of Buenos Aires
  40,288 
  123 
  64.8%
  100%
Alcorta Shopping
Jun-97
City of Buenos Aires
  15,812 
  114 
  99.3%
  100%
Patio Bullrich
Oct-98
City of Buenos Aires
  11,396 
  90 
  91.2%
  100%
Dot Baires Shopping
May-09
City of Buenos Aires
  46,993 
  163 
  79.5%
  80%
Soleil
Jul-10
Province of Buenos Aires
  16,077 
  75 
  98.4%
  100%
Distrito Arcos
Dec-14
City of Buenos Aires
  14,335 
  64 
  100.0%
  90.0%
Alto Noa Shopping
Mar-95
Salta
  19,388 
  84 
  98.6%
  100%
Alto Rosario Shopping
Nov-04
Santa Fe
  33,732 
  136 
  94.2%
  100%
Mendoza Plaza Shopping
Dec-94
Mendoza
  42,947 
  129 
  84.1%
  100%
Córdoba Shopping
Dec-06
Córdoba
  15,360 
  106 
  99.0%
  100%
La Ribera Shopping
Aug-11
Santa Fe
  10,531 
  69 
  96.8%
  50%
Alto Comahue
Mar-15
Neuquén
  11,697 
  92 
  95.9%
  99.95%
Patio Olmos(5)
Sep-07
Córdoba
  - 
  - 
  - 
    
Total
 
 
  335,279 
  1,548 
  89.1%
    
 
(1) Corresponds to gross leasable area in each property. Excludes common areas and parking spaces.
(2) Calculated dividing occupied square meters by leasable area as of the last day of the fiscal period.
(3) Company’s effective interest in each of its business units.
(4) Excludes Museo de los Niños (3,732 square meters in Abasto).
(5) IRSA CP owns the historic building of the Patio Olmos shopping mall in the Province of Córdoba, operated by a third party.
 
Cumulative tenants’ sales in real terms as of December 31, 2021, compared to the same periods of fiscal years 2021 and 2020
 
(ARS million) 
 
IIQ 22
 
 
IIQ 21
 
 
YoY Var
 
 
IIQ 20
 
 
YoY Var
 
Alto Palermo
  7,006 
  3,581 
  95.6%
  6,556 
  6.9%
Abasto Shopping
  6,699 
  3,108 
  115.5%
  6,331 
  5.8%
Alto Avellaneda
  4,921 
  2,307 
  113.3%
  5,755 
  (14.5)%
Alcorta Shopping
  5,053 
  2,947 
  71.5%
  4,000 
  26.3%
Patio Bullrich
  2,593 
  1,908 
  35.9%
  2,589 
  0.2%
Dot Baires Shopping
  4,440 
  2,595 
  71.1%
  5,156 
  (13.9)%
Soleil
  3,058 
  1,945 
  57.2%
  2,587 
  18.2%
Distrito Arcos
  4,022 
  2,620 
  53.5%
  3,001 
  34.0%
Alto Noa Shopping
  2,285 
  1,786 
  27.9%
  1,996 
  14.5%
Alto Rosario Shopping
  6,457 
  4,283 
  50.8%
  5,093 
  26.8%
Mendoza Plaza Shopping
  3,399 
  3,255 
  4.4%
  3,454 
  (1.6)%
Córdoba Shopping
  2,167 
  1,372 
  57.9%
  1,629 
  33.0%
La Ribera Shopping(1)
  970 
  487 
  99.2%
  976 
  (0.6)%
Alto Comahue
  1,409 
  615 
  129.1%
  1,525 
  (7.6)%
Total sales
  54,479 
  32,809 
  66.0%
  50,648 
  7.6%
(1) Through our joint venture Nuevo Puerto Santa Fe S.A.
 
(ARS million) 
  6M 22 
  6M 21 
 
YoY Var
 
  6M 20 
 
YoY Var
 
Alto Palermo
  11,451 
  3,795 
  201.7%
  11,793 
  (2.9)%
Abasto Shopping
  11,101 
  3,265 
  240.0%
  11,760 
  (5.6)%
Alto Avellaneda
  8,209 
  2,461 
  233.6%
  10,509 
  (21.9)%
Alcorta Shopping
  8,359 
  2,975 
  181.0%
  6,967 
  20.0%
Patio Bullrich
  4,186 
  2,189 
  91.2%
  4,593 
  (8.9)%
Dot Baires Shopping
  7,319 
  2,735 
  167.6%
  9,173 
  (20.2)%
Soleil
  5,507 
  2,254 
  144.3%
  4,901 
  12.4%
Distrito Arcos
  6,881 
  3,461 
  98.8%
  5,507 
  25.0%
Alto Noa Shopping
  4,134 
  2,884 
  43.3%
  3,842 
  7.6%
Alto Rosario Shopping
  11,104 
  6,350 
  74.9%
  9,309 
  19.3%
Mendoza Plaza Shopping
  6,058 
  5,315 
  14.0%
  6,766 
  (10.5)%
Córdoba Shopping
  3,695 
  2,222 
  66.3%
  2,925 
  26.3%
La Ribera Shopping(1)
  1,636 
  725 
  125.7%
  1,937 
  (15.5)%
Alto Comahue
  2,528 
  871 
  190.2%
  2,867 
  (11.8)%
Total sales
  92,168 
  41,502 
  122.1%
  92,849 
  -0.7%
(1) Through our joint venture Nuevo Puerto Santa Fe S.A.
 
Cumulative tenants’ sales per type of business in real terms as of December 31, 2021, compared to the same periods of fiscal years 2021 and 2020(1)
 
(ARS million) 
 
IIQ 22
 
 
IIQ 21
 
 
YoY Var
 
 
IIQ 20
 
 
YoY Var
 
Department Store
  - 
  837 
  (100.0)%
  2,738 
  (100.0)%
Clothes and footwear
  34,074 
  20,408 
  67.0%
  29,554 
  15.3%
Entertainment
  1,101 
  67 
  1543.3%
  1,000 
  10.1%
Home and decoration
  1,336 
  865 
  54.5%
  1,057 
  26.4%
Home Appliances
  4,436 
  1,793 
  147.4%
  4,807 
  (7.7)%
Restaurants
  8,401 
  5,097 
  64.8%
  7,148 
  17.5%
Miscellaneous
  819 
  335 
  144.5%
  516 
  58.7%
Services
  4,312 
  3,407 
  26.6%
  3,828 
  12.6%
Total
  54,479 
  32,809 
  66.0%
  50,648 
  7.6%
(1)      
Includes sales from stands and excludes spaces used for special exhibitions.
 
 
3
 

 
 
(ARS million) 
  6M 22 
  6M 21 
 
YoY Var
 
  6M 20 
 
YoY Var
 
Department Store
  - 
  1,476 
  (100.0)%
  4,969 
  (100.0)%
Clothes and footwear
  56,486 
  24,568 
  129.9%
  52,364 
  7.9%
Entertainment
  1,944 
  76 
  2457.9%
  2,760 
  (29.6)%
Home and decoration
  2,399 
  1,088 
  120.5%
  1,886 
  27.2%
Restaurants
  8,030 
  2,523 
  218.3%
  9,958 
  (19.4)%
Miscellaneous
  14,069 
  6,713 
  109.6%
  12,425 
  13.2%
Services
  1,425 
  375 
  280.0%
  1,013 
  40.7%
Home Appliances
  7,815 
  4,683 
  66.9%
  7,474 
  4.6%
Total
  92,168 
  41,502 
  122.1%
  92,849 
  (0.7)%
(1)      
Includes sales from stands and excludes spaces used for special exhibitions.
 
Revenues from cumulative leases as of December 31, 2021, compared to the same periods of fiscal years 2021 and 2020
 
(ARS million) 
 
IIQ 22
 
 
IIQ 21
 
 
YoY Var
 
 
IIQ 20
 
 
YoY Var
 
Base rent
  1,065 
  1,230 
  (13.4)%
  1,705 
  (37.5)%
Percentage rent
  1,910 
  593 
  222.1%
  1,338 
  42.8%
Total rent
  2,975 
  1,823 
  63.2%
  3,043 
  (2.2)%
Non-traditional advertising
  78 
  8 
  875.0%
  101 
  (22.8)%
Revenues from admission rights
  249 
  248 
  0.4%
  495 
  (49.7)%
Fees
  39 
  41 
  (4.9)%
  47 
  (17.0)%
Parking
  128 
  8 
  1500.0%
  187 
  (31.6)%
Commissions
  64 
  57 
  12.3%
  95 
  (32.6)%
Other
  6 
  131 
  (95.4)%
  16 
  (62.5)%
Subtotal
  3,539 
  2,316 
  52.8%
  3,984 
  (11.2)%
Expenses and Collective Promotion Fund
  1,253 
  946 
  32.5%
  1,504 
  (16.7)%
Total
  4,792 
  3,262 
  46.9%
  5,488 
  (12.7)%
 
 
(ARS million) 
  6M 22 
  6M 21 
 
YoY Var
 
  6M 20 
 
YoY Var
 
Base rent (1)
  1,853 
  1,339 
  38.4%
  3,463 
  (46.5)%
Percentage rent (1)
  3,130 
  699 
  347.8%
  2,178 
  43.7%
Total rent
  4,983 
  2,038 
  144.5%
  5,641 
  (11.7)%
Non-traditional advertising
  125 
  63 
  98.4%
  195 
  (35.9)%
Revenues from admission rights
  467 
  494 
  (5.5)%
  935 
  (50.1)%
Fees
  79 
  83 
  (4.8)%
  97 
  (18.6)%
Parking
  196 
  12 
  1533.3%
  390 
  (49.7)%
Commissions
  124 
  106 
  17.0%
  189 
  (34.4)%
Other
  17 
  137 
  (87.6)%
  41 
  (58.5)%
Subtotal(2)
  5,991 
  2,933 
  104.3%
  7,488 
  (20.0)%
Expenses and Collective Promotion Fund
  2,314 
  1,541 
  50.2%
  2,924 
  (20.9)%
Total
  8,305 
  4,474 
  85.6%
  10,412 
  (20.2)%
(1)
Includes Revenues from stands for ARS 362.7 million cumulative as of December 2021
(2)
Includes ARS 5.7 million from Patio Olmos.
 
III. Offices
 
According to Cushman & Wakefield, the quarter closed with a stable vacancy of 15.3%, in the Buenos Aires City premium market, due to the gradual occupation of workspaces thanks to advances in vaccination and end of the winter period, while prices show a decline averaging USD 24.7 per sqm.
 
 
 
4
 
IRSA Inversiones y Representaciones Sociedad Anónima
 
Summary as of December 31, 2021
 
 
Offices’ Operating Indicators
 
 
 
IIQ 22
 
 
IQ 22
 
 
IVQ 21
 
 
IIIQ 21
 
 
IIQ 21
 
Gross Leasable area
  109,859 
  113,451 
  113,291 
  114,475 
  114,475 
Total Occupancy
  68.6%
  72.4%
  74.7%
  76.3%
  75.6%
Class A+ & A Occupancy
  76.7%
  78.9%
  80.1%
  81.2%
  79.5%
Class B Occupancy
  30.9%
  41.1%
  48.5%
  52.4%
  56.7%
Rent USD/sqm
  24.9 
  25.1 
  25.7 
  25.4 
  25.7 
 
The gross leasable area during the second quarter of fiscal year 2022 was 109,859 sqm, decreasing slightly when compared to the previous quarter due to the four floors sale in the “261 Della Paolera” building. Portfolio average A+ & A reached 76.7%, and average rental price reached USD 24.9 per sqm.
 
Offices’ Financial Indicators
 
(in ARS million) 
 
IIQ 22
 
 
IIQ 21
 
 
YoY Var
 
 
IIQ 20
 
 
YoY Var
 
Revenues from sales, leases and services
  461 
  779 
  (40.8)%
  1,078 
  (57.2)%
Net result from fair value adjustment on investment properties, PP&E e inventories
  3,061 
  (10,266)
  - 
  (4,667)
  - 
Profit from operations
  3,246 
  (9,735)
  - 
  (3,875)
  - 
Depreciation and amortization
  44 
  7 
  528.6%
  32 
  37.5%
EBITDA(1)
  3,290 
  (9,728)
  - 
  (3,843)
  - 
Adjusted EBITDA (1)
  229 
  538 
  (57.4)%
  824 
  (72.2)%
(1)
See Point XIX: EBITDA Reconciliation
 
(in ARS million) 
  6M 22 
  6M 21 
 
YoY Var
 
  6M 20 
 
YoY Var
 
Revenues from sales, leases and services
  1,250 
  1,688 
  (25.9)%
  2,250 
  (44.4)%
Net result from fair value adjustment on investment properties, PP&E e inventories
  1,041 
  11,767 
  (91.2)%
  6,835 
  (84.8)%
Profit from operations
  1,816 
  12,925 
  (85.9)%
  8,584 
  (78.8)%
Depreciation and amortization
  59 
  32 
  84.4%
  43 
  37.2%
EBITDA(1)
  1,875 
  12,957 
  (85.5)%
  8,627 
  (78.3)%
Adjusted EBITDA (1)
  834 
  1,190 
  (29.9)%
  1,792 
  (53.5)%
(1)
See Point XIX: EBITDA Reconciliation
 
During the first quarter of fiscal year 2022, revenues from the offices segment decreased by 25.9% and Adjusted EBITDA decreased 29.9% compared to the previous fiscal year, mainly explained by the lower occupancy and the exchange rate lag, keeping the rental prices stable. Adjusted EBITDA margin was 66.7%, 3.7 bps lower than the previous year.
 
 
 
5
 
IRSA Inversiones y Representaciones Sociedad Anónima
 
Summary as of December 31, 2021
 
 
Below is information on our office segment and other rental properties:
 
Offices & Others
Date of Acquisition
 
Gross Leasable Area (sqm)(1)
 
 
Occupancy (2)
 
 
Actual Interest
 
 
6M 22 - Rental revenues (ARS thousand) (5)
 
AAA & A Offices
 
 
 
 
 
 
 
 
 
 
 
 
 
Republica Building
Dec-14
  19,885 
  60.9%
  100%
  217,445 
Boston Tower
Dec-14
    
    
    
  693 
Intercontinental Plaza (3)
Dec-14
  2,979 
  100.0%
  100%
  53,574 
Dot Building
Nov-06
  11,242 
  84.9%
  80%
  113,820 
Zetta
May-19
  32,173 
  89.8%
  80%
  437,094 
261 Della Paolera – Catalinas
Dec-20
  24,098 
  65.5%
  100%
  298,501 
Total AAA & A Offices
 
  90,377 
  76.7%
    
  1,121,127 
 
    
    
    
    
B Offices
 
    
    
    
    
Suipacha 652/64
Dec-14
  11,465 
  - 
  100%
  8,320 
Philips
Jun-17
  8,017 
  75.1%
  100%
  75,081 
Total B Buildings
 
  19,482 
  30.9%
  100%
  83,401 
Subtotal Offices
 
  109,859 
  68.6%
    
  1,204,528 
 
    
    
    
    
Other rental properties (4)
 
    
    
    
  43,442 
Total Offices and Others
 
    
    
    
  1,247,970 
(1) Corresponds to the total gross leasable area of each property as of December 31, 2021. Excludes common areas and parking lots.
(2) Calculated by dividing occupied square meters by gross leasable area as of December 31, 2021.
(3) We own 13.2% of the building that has 22,535 square meters of gross leasable area.
(4) Includes all those properties that are not buildings intended for rent, but that are partially or fully rented (Philips Deposit, Anchorena 665, San Martin Plot and Santa María del Plata).
(5) Corresponds to the accumulated income of the period.
 
IV. Hotels
 
After the restrictions imposed in 2020 due to the pandemic, which kept the sector without operations for approximately 9 months, the activity begins to show signs of recovery thanks to domestic tourism and the government's incentives to promote it in a context where certain restrictions still apply in air flows and the arrival of international tourism.
 
 (in ARS million)
 
IIQ 22
 
 
IIQ 21
 
 
YoY Var
 
 
IIQ 20
 
 
YoY Var
 
Revenues
  862 
  170 
  407.1%
  1,427 
  (39.6)%
Profit from operations
  199 
  (297)
  - 
  353 
  (43.6)%
Depreciation and amortization
  71 
  78 
  (9.0)%
  111 
  (36.0)%
EBITDA
  270 
  (219)
  - 
  464 
  (41.8)%
 
(in ARS million)
  6M 22 
  6M 21 
 
YoY Var
 
  6M 20 
 
YoY Var
 
Revenues
  1,383 
  180 
  668.3%
  2,606 
  (46.9)%
Profit from operations
  218 
  (619)
  - 
  496 
  (56.0)%
Depreciation and amortization
  139 
  157 
  (11.5)%
  185 
  (24.9)%
EBITDA
  357 
  (462)
  - 
  681 
  (47.6)%
 
During the first half of fiscal year 2022, Hotels segment recorded a decrease in revenues of 46.9% compared with the same period of fiscal year 2020 while the segment’s EBITDA reached ARS 357 million, a 47.6% decrease when compared to the same period of fiscal year 2020, not affected by the pandemic.
 
 
6
 
IRSA Inversiones y Representaciones Sociedad Anónima
 
Summary as of December 31, 2021
 
 
The following chart shows certain information regarding our luxury hotels:
 
Hotels
 
Date of Acquisition
 
 
IRSA’s Interest
 
 
Number of rooms
 
 
Occupancy
 
Intercontinental (1)
 
11/01/1997
 
  76,34%
  313 
  36.9%
Sheraton Libertador (2)
 
03/01/1998
 
  100,00%
  200 
  35.5%
Llao Llao (3)
 
06/01/1997
 
  50,00%
  205 
  57.9%
Total
  - 
  - 
  718 
  42.5%
(1)
Through Nuevas Fronteras S.A. (Subsidiary of IRSA).
(2)
Through Hoteles Argentinos S.A.U.
(3)
Through Llao Llao Resorts S.A.
 
 
Hotels’ operating and financial indicators.
 
 
 
IIQ 22
 
 
IQ 22
 
 
IVQ 21
 
 
IIIQ 21
 
 
IIQ 21
 
Average Occupancy
  42.5%
  21.0%
  12,1%
  28.2%
  8.0%
Average Rate per Room (USD/night)
  205 
  243 
  151 
  230 
  175 
 
V. Sales and Developments
 
(in ARS million)
 
IIQ 22
 
 
IIQ 21
 
 
YoY Var
 
 
IIQ 20
 
 
YoY Var
 
Revenues
  131 
  474 
  (72.4)%
  805 
  (83.7)%
Net result from fair value adjustment on investment properties
  27,751 
  (7,656)
  - 
  (3,432)
  - 
Result from operations
  27,375 
  (8,019)
  - 
  (3,273)
  - 
Depreciation and amortization
  3 
  4 
  (25.0)%
  5 
  (40.0)%
Net result from fair value adjustment on investment properties
  1,928 
  2,951 
  (34.7)%
  - 
  - 
Barter Agreement results
  - 
  - 
  - 
  490 
  (100.0)%
EBITDA (1)
  27,378 
  (8,015)
  - 
  (3,268)
  - 
Adjusted EBITDA (1)
  1,555 
  2,592 
  (40.0)%
  (326)
  - 
(1)
See Point XIX: EBITDA Reconciliation
 
(in ARS million)
  6M 22 
  6M 21 
 
YoY Var
 
  6M 20 
 
YoY Var
 
Revenues
  131 
  540 
  (75.7)%
  945 
  (86.1)%
Net result from fair value adjustment on investment properties
  26,380 
  9,309 
  183.4%
  5,228 
  404.6%
Result from operations
  25,863 
  8,215 
  214.8%
  5,204 
  397.0%
Depreciation and amortization
  5 
  11 
  (54.5)%
  10 
  (50.0)%
Net result from fair value adjustment on investment properties
  2,062 
  11,948 
  (82.7)%
  - 
  - 
Barter Agreement results
  - 
  - 
  - 
  490 
  (100.0)%
EBITDA (1)
  25,868 
  8,226 
  214.5%
  5,214 
  396.1%
Adjusted EBITDA (1)
  1,550 
  10,865 
  (85.7)%
  (504)
  - 
(1)
See Point XIX: EBITDA Reconciliation
 
Adjusted EBITDA of “Sales and Developments” segment decreased by 85.7% during the first half of fiscal year 2022 compared to the previous fiscal year, due to lower sales of investment properties. While the Bouchard 710 and the Boston Tower buildings were sold last year, only four floors of the “200 Della Paolera” building were sold this semester.
 
 
 
7
 
IRSA Inversiones y Representaciones Sociedad Anónima
 
Summary as of December 31, 2021
 
 
 
VI. International
 
Investment in Condor Hospitality Inc.
 
On September 22, 2021, Condor Hospitality Trust S.A. (“Condor”) has signed a sale agreement for its portfolio of 15 hotels in the United States with B9 Cowboy Mezz A LLC, an affiliate of Blackstone Real Estate Partners. Said sale was approved by the Condor Shareholders' Meeting held on November 12, 2021 and was completed on the 19th of the same month for an amount of USD 305 million. Within this framework, Condor announced a Liquidation and Dissolution Plan, with the intention of distributing certain net income from the sale of the hotel portfolio to the shareholders in one or more installments, which was approved by the Condor Shareholders' Meeting held on December 1, 2021.
 
On December 10, 2021, in accordance with the aforementioned Plan, Condor's Board of Directors approved the distribution of a special dividend of USD 7.94 per share, which payment was made on December 30, 2021, corresponding to IRSA an approximate amount of USD 25.3 million for its direct and indirect holding of 3,191,213 common shares that, as of the date of issuance of the financial statements, have already been fully collected. As of December 31, 2021, Condor shares were delisted from the NYSE, pending the final liquidation of the residual company.
 
VII. Corporate
 
(in millions of ARS)
 
IIQ 22
 
 
IIQ 21
 
 
YoY Var
 
 
IIQ 20
 
 
YoY Var
 
Revenues
  - 
  - 
  - 
  - 
  - 
Result from operations
  (237)
  (358)
  (33.8)%
  (332)
  (28.6)%
Depreciation and amortization
  2 
  1 
  100.0%
  2 
  0.0%
EBITDA
  (235)
  (357)
  (34.2)%
  (330)
  (28.8)%
 
(in millions of ARS)
  6M 22 
  6M 21 
 
YoY Var
 
  6M 20 
 
YoY Var
 
Revenues
  - 
  - 
  - 
  - 
  - 
Result from operations
  (364)
  (491)
  (25.9)%
  (479)
  (24.0)%
Depreciation and amortization
  5 
  3 
  66.7%
  4 
  25.0%
EBITDA
  (359)
  (488)
  (26.4)%
  (475)
  (24.4)%
 
VIII. Financial Operations and Others
 
Interest in Banco Hipotecario S.A. (“BHSA”)
 
BHSA is a leading bank in the mortgage lending industry, in which IRSA held an equity interest of 29.91% as of December 31, 2021. During the first half of fiscal year 2022, the investment in Banco Hipotecario generated an ARS 187 million loss compared to a ARS 243 million gain during the same period of 2021. For further information, visit http://www.cnv.gob.ar or http://www.hipotecario.com.ar.
 
IX. EBITDA by Segment (ARS million)
 
  6M 22 
 
Shopping Malls
 
 
Offices
 
 
Sales and Developments
 
 
Hotels
 
 
International
 
 
Corporate
 
 
Others
 
 
Total
 
 
Result from operations
 
  (1,345)
  1,816 
  25,863 
  218 
  (36)
  (364)
  368 
  26,520 
 
Depreciation and amortization
 
  94 
  59 
  5 
  139 
  - 
  5 
  43 
  345 
 
EBITDA
 
  (1,251)
  1,875 
  25,868 
  357 
  (36)
  (359)
  411 
  26,865 
 
  6M 21 
 
Shopping Malls
 
 
Offices
 
 
Sales and Developments
 
 
Hotels
 
 
International
 
 
Corporate
 
 
Others
 
 
Total
 
 
Result from operations
 
  (5,976)
  12,925 
  8,215 
  (619)
  (5)
  (491)
  713 
  14,762 
 
Depreciation and amortization
 
  103 
  32 
  11 
  157 
  - 
  3 
  43 
  349 
 
EBITDA
 
  (5,873)
  12,957 
  8,226 
  (462)
  (5)
  (488)
  756 
  15,111 
 
EBITDA Var
 
  (78.7)%
  (85.5)%
  214.5%
  - 
  620.0%
  (26.4)%
  (45.6)%
  77.8%
 
  6M 20 
 
Shopping Malls
 
 
Offices
 
 
Sales and Developments
 
 
Hotels
 
 
International
 
 
Corporate
 
 
Others
 
 
Total
 
 
Result from operations
 
  1,536 
  8,584 
  5,204 
  496 
  (113)
  (479)
  370 
  15,598 
 
Depreciation and amortization
 
  148 
  43 
  10 
  185 
  2 
  4 
  42 
  434 
 
EBITDA
 
  1,684 
  8,627 
  5,214 
  681 
  (111)
  (475)
  412 
  16,032 
 
EBITDA Var
 
  (174.3)%
  -78.3%
  396.1%
  (47.6)%
  (67.6)%
  (24.4)%
  (0.2)%
  67.6%
 
X. Reconciliation with Consolidated Statements of Income (ARS million)
 
Below is an explanation of the reconciliation of the company’s profit by segment with its Consolidated Statements of Income. The difference lies in the presence of joint ventures included in the segment but not in the Statements of Income.
 
 
 
Total as per segment
 
 
Joint ventures*
 
 
Expenses and CPF
 
 
 Elimination of inter-segment transactions
 
 
Total as per Statements of Income
 
Revenues
  8,816 
  (63)
  2,313 
  (15)
  11,051 
Costs
  (1,862)
  33 
  (2,387)
  - 
  (4,216)
Gross result
  6,954 
  (30)
  (74)
  (15)
  6,835 
Result from sales of investment properties
  22,385 
  65 
  - 
  - 
  22,450 
General and administrative expenses
  (1,924)
  6 
  - 
  24 
  (1,894)
Selling expenses
  (835 
  (5)
  - 
  - 
  (840 
Other operating results, net
  (60)
  - 
  29 
  (9)
  (40)
Result from operations
  26,520 
  36 
  (45)
  - 
  26,511 
Share of loss of associates and joint ventures
  (77)
  (43)
  - 
  - 
  (120)
Result before financial results and income tax
  26,443 
  (7)
  (45)
  - 
  26,391 
*Includes Puerto Retiro, CYRSA, Nuevo Puerto Santa Fe and Quality (San Martín plot).
 
XI. Financial Debt and Other Indebtedness
 
The following table describes our total indebtedness as of December 31, 2021:
 
Description
Currency
 
Amount (USD MM) (1)
 
 
Interest Rate
 
Maturity
Bank overdrafts
ARS
  54.4 
 
Floating
 
< 360 days
PAMSA loan
USD
  13.5 
 
Fixed
 
Feb-23
Series X NCN
ARS
  6.8 
 
Floating
 
Mar-22
Series V NCN
USD
  9.2 
  9.0%
May-22
Series II NCN
USD
  356.0 
  8.75%
Mar-23
Series IX NCN
USD
  51.5 
  10.0%
Mar-23
Series I NCN
USD
  3.1 
  10.0%
Mar-23
Series VIII NCN
USD
  18.0 
  10.0%
Nov-23
Series XI NCN
USD
  12.8 
  5.0%
Mar-24
Series XII NCN
ARS
  41.6 
 
Floating
 
Mar-24
Series XIII NCN
USD
  31.2 
  3.9%
Aug-24
Other debt
USD
  3.9 
  - 
Feb-22
IRSA’s Total Debt
USD
  602.0 
    
 
Cash & Cash Equivalents + Investments
USD
  101.2 
    
 
IRSA’s Net Debt
USD
  500.8 
    
 
(1) 
Principal amount in USD (million) at an exchange rate of ARS 102.72/USD, without considering accrued interest or eliminations of balances with subsidiaries.
(2) 
Includes Cash and cash equivalents, Investments in Current Financial Assets and related companies notes holding.
(3) 
Includes amounts taken by IRSA and subsidiaries.
 
 
8
 
IRSA Inversiones y Representaciones Sociedad Anónima
 
Summary as of December 31, 2021
 
 
 
XII. Material and Subsequent Events
 
October 2021: General Ordinary Shareholders’ Meeting
 
At the General Ordinary and Extraordinary Shareholders’ Meeting held on October21, 2021, the following matters, inter alia, were resolved:
 
●
To partially write off the special reserve in the amount of ARS 30,693,399,903 which, adjusted for inflation, amounts to the sum of ARS 33,542,594,551, and use it for the total absorption of the negative result for the fiscal year 2021
 
●
Designation of board members.
 
●
Compensations to the Board of Directors for the fiscal year ended June 30, 2021.
 
November 2021: Series VII Notes Redemption
 
The Company resolved to early redeem the Series VII Notes maturing last January 21, 2022.
 
The redemption took place on November 25, 2021, in accordance with the terms and conditions detailed in the Prospectus Supplement for Series VII Notes.
 
The redemption price was 100% of the face value of the Series VII Notes, plus accrued and unpaid interest, as of the date set for redemption.
 
November 2021: Warrants exercise
 
Between November 17 and 25, 2021, certain warrants holders have exercised their right to acquire additional shares and 5,181 ordinary shares of the Company were registered, with a nominal value of VN ARS 1. As a result of the exercise, USD 2,238.19 has collected the Company.
 
After the exercise of these warrants, the number of shares and the capital stock of the Company goes from 658,707,201 to 658,712,382, and the new number of outstanding warrants goes from 79,969,259 to 79,964,078.
 
November and December 2021: “Della Paolera 261” floors sale
 
During the quarter, the Company sold and transferred three and one medium-height floors of the “261 Della Paolera” tower for a total area of ​​approximately 4,797 sqm and 48 parking spaces located in the building.
 
The transaction price corresponding to the three floors sold in November was approximately ARS 3,197 million, equivalent to USD 32.0 million (USD/sqm 8,950), while the price of the floor sold in December was approximately USD 9.2 million (USD/sqm 7,560), including the interior design work. Both transactions were paid in full.
 
After this transaction, IRSA retains its rights for 20 floors of the building with an approximate leasable area of 24,000 sqm, in addition to parking spaces and other complementary spaces.
 
December 2021: Costa Urbana project approval
 
On December 21, it was published the law from Buenos Aires City congress approving the Regulations for the development of the property of approximately 70 hectares, owned by the Company since 1997, previously known as "Solares de Santa María", located in front of the Río de la Plata in the South Coast of the Autonomous City of Buenos Aires, southeast of Puerto Madero. The published law grants a New Standard, designated: "U73 - Public Park and Costa Urbana Urbanization", which enables the combination of diverse uses such as homes, offices, retail, services, public spaces, education, and entertainment.
 
The Company will have a construction capacity of approximately 895,000 sqm, which will drive growth for the coming years through the development of mixed-use projects.
 
IRSA will destinate 50.8 hectares for public use, which represents approximately 71% of the total area of the property and will contribute with three additional lots of the property, two for the Sustainable Urban Development Fund and one for the Innovation Trust, Science and Technology of the Government of the Autonomous City of Buenos Aires, to which the sum of USD 2 million in cash and the amount of 3,000,000 sovereign bonds (AL35) will also be contributed.
 
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 the City of Buenos Aires, 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.
 
The financial valuation of the property at fair value amounts to approximately USD 360 million as of December 31, 2021.
 
February 2022: Appointment of new Regular Director
 
As a subsequent event, on January 31, 2022, the Board of Directors resolved to appoint Mr. David Williams, Alternate Director of the Company since December 12, 2019, as a Regular Director to replace Mr. Marcos Oscar Moisés Fischman until the expiration of the mandate on June 30, 2022.
 
February 2022: Senior Management
 
As a subsequent event, the Company informed the Senior Management designated by the Board of Directors’ Meeting held on February 9, 2022:
 
Name
Position
Eduardo S. Elsztain
Chief Executive Officer
Arnaldo Jawerbaum
Chief Operating Officer
Jorge Cruces
Chief Investment Officer
Matias Gaivironsky
Chief Administrative and Financial Officer
 
XIII. Summarized Comparative Consolidated Balance Sheet
 
(in ARS million) 
  12.31.2021 
  12.31.2020 
  12.31.2019 
Non-current assets
  266,792 
  283,634 
  664,404 
Current assets
  21,523 
  18,444 
  366,203 
Total assets
  288,315 
  302,078 
  1,030,607 
Capital and reserves attributable to the equity holders of the parent
  116,762 
  105,821 
  70,566 
Non-controlling interest
  7,947 
  33,470 
  96,696 
Total shareholders’ equity
  124,709 
  139,291 
  167,262 
Non-current liabilities
  144,489 
  128,990 
  638,803 
Current liabilities
  19,117 
  33,797 
  224,542 
Total liabilities
  163,606 
  162,787 
  863,345 
Total liabilities and shareholders’ equity
  288,315 
  302,078 
  1,030,607 
  
XIV. Summarized Comparative Consolidated Income Statement
 
 (in ARS million) 
  12.31.2021 
  12.31.2020 
  12.31.2019 
Profit from operations
  26,511 
  13,945 
  14,873 
Share of profit of associates and joint ventures
  (120)
  (683)
  (2,284)
Profit from operations before financing and taxation
  26,391 
  13,262 
  12,589 
Financial income
  157 
  103 
  223 
Financial cost
  (3,857)
  (4,781)
  (5,905)
Other financial results
  7,656 
  4,776 
  (8,706)
Inflation adjustment
  430 
  1,674 
  500 
Financial results, net
  4,386 
  1,772 
  (13,888)
Results before income tax
  30,777 
  15,034 
  (1,299)
Income tax
  (5,257)
  (6,044)
  (4,106)
Results of the period from continued operations
  25,520 
  8,990 
  (5,405)
Results from discontinued operations after taxes
  - 
  (10,748)
  15,384 
Result of the period
  25,520 
  (1,758)
  9,979 
Other comprehensive results for the period
  (434)
  (12,293)
  15,185 
Total comprehensive result for the period
  25,086 
  (14,051)
  25,164 
 
    
    
    
Attributable to:
    
    
    
Equity holders of the parent
  25,301 
  (5,066)
  (8,021)
Non-controlling interest
  (215)
  (8,985)
  33,185 
 
XV. Summary Comparative Consolidated Cash Flow
 
(in ARS million) 
  12.31.2021 
  12.31.2020 
  12.31.2019 
Net cash generated from operating activities
  4,692 
  6,645 
  34,481 
Net cash generated from investing activities
  6,369 
  77,049 
  28,400 
Net cash used in financing activities
  (6,094)
  (58,897)
  (94,091)
Net increase / (decrease) in cash and cash equivalents
  4,967 
  24,797 
  (31,210)
Cash and cash equivalents at beginning of year
  2,326 
  163,461 
  156,376 
Cash and cash equivalents reclassified to available for sale
  - 
  - 
  (1,073)
Results from changes in the purchasing power of the cash currency
  (47)
  (3)
  (255)
Subsidiaries deconsolidation
  - 
  (175,036)
  - 
Foreign exchange gain on cash and changes in fair value of cash equivalents
  18 
  (10,794)
  9,225 
Cash and cash equivalents at period-end
  7,264 
  2,425 
  133,063 
 
XVI. Comparative Ratios
 
(in ARS million) 
  12.31.2021 
 
 
 
  12.31.2020 
 
 
 
  12.31.2019 
 
 
 
Liquidity
    
 
 
 
    
 
 
 
    
 
 
 
CURRENT ASSETS
  21,523 
  1.13 
  18,444 
  0.55 
  366,203 
  1.63 
CURRENT LIABILITIES
  19,117 
    
  33,797 
    
  224,542 
    
Indebtedness
    
    
    
    
    
    
TOTAL LIABILITIES
  163,606 
  1.40 
  162,787 
  1.54 
  863,345 
  12.23 
SHAREHOLDERS’ EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT
  116,762 
    
  105,821 
    
  70,566 
    
Solvency
    
    
    
    
    
    
SHAREHOLDERS’ EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT
  116,762 
  0.71 
  105,821 
  0.65 
  70,566 
  0.08 
TOTAL LIABILITIES
  163,606 
    
  162,787 
    
  863,345 
    
Capital Assets
    
    
    
    
    
    
NON-CURRENT ASSETS
  266,792 
  0.93 
  283,634 
  0.94 
  664,404 
  0.64 
TOTAL ASSETS
  288,315 
    
  302,078 
    
  1,030,607 
    
 
 
 
9
 
IRSA Inversiones y Representaciones Sociedad Anónima
 
Summary as of December 31, 2021
 
 
 
XVII. EBITDA Reconciliation
 
In this summary report we present EBITDA and Adjusted EBITDA. We define EBITDA as profit for the period excluding: (i) interest income, (ii) interest expense, (iii) income tax expense, and (iv) depreciation and amortization. We define Adjusted EBITDA as EBITDA minus (i) total financial results, net excluding interest expense, net (mainly foreign exchange differences, net gains/losses from derivative financial instruments; gains/losses of financial assets and liabilities at fair value through profit or loss; and other financial results, net) and minus (ii) share of profit of associates and joint ventures and minus (iii) net profit from fair value adjustment of investment properties, not realized.
 
EBITDA and Adjusted EBITDA are non-IFRS financial measures that do not have standardized meanings prescribed by IFRS. We present EBITDA and adjusted EBITDA because we believe they provide investors supplemental measures of our financial performance that may facilitate period-to-period comparisons on a consistent basis. Our management also uses EBITDA and Adjusted EBITDA from time to time, among other measures, for internal planning and performance measurement purposes. EBITDA and Adjusted EBITDA should not be construed as an alternative to profit from operations, as an indicator of operating performance or as an alternative to cash flow provided by operating activities, in each case, as determined in accordance with IFRS. EBITDA and Adjusted EBITDA, as calculated by us, may not be comparable to similarly titled measures reported by other companies. The table below presents a reconciliation of profit from operations to EBITDA and Adjusted EBITDA for the periods indicated:
 
 
For the six-month period ended December 31 (in ARS million)
 
 
 
2021
 
 
2020
 
 
2019
 
Profit for the period
  25,520 
  (1,758)
  9,979 
Result from discontinued operations
  - 
  10,748 
  (15,384)
Interest income 
  (157)
  (73)
  (217)
Interest expense 
  3,507 
  4,567 
  5,618 
Income tax
  5,257 
  6,044 
  4,106 
Depreciation and amortization 
  344 
  346 
  480 
EBITDA (unaudited) 
  34,471 
  19,874 
  4,582 
Net gain from fair value adjustment of investment properties
  (22,450)
  (13,986)
  (7,989)
Realized net gain from fair value adjustment of investment properties
  2,062 
  11,948 
  - 
Barter agreement results
  - 
  - 
  (490)
Share of profit of associates and joint ventures 
  120 
  683 
  2,284 
Dividends earned
  - 
  (30)
  (6)
Foreign exchange differences net 
  (5,986)
  42 
  8,433 
Result from derivative financial instruments 
  (11)
  476 
  163 
Fair value gains of financial assets and liabilities at fair value through profit or loss
  (857)
  (5,686)
  240 
Inflation adjustment
  (430)
  (1,674)
  (500)
Other financial costs/income
  (452)
  606 
  157 
Adjusted EBITDA (unaudited) 
  6,467 
  12,253 
  6,874 
Adjusted EBITDA Margin (unaudited)(1)
  58.52%
  163.96%
  41.72%
(1) Adjusted EBITDA margin is calculated as Adjusted EBITDA, divided by revenue from sales, rents and services.
 
 
 
10
 
IRSA Inversiones y Representaciones Sociedad Anónima
 
Summary as of December 31, 2021
 
 
 
XVIII.  NOI Reconciliation
 
In addition, we present in this summary report Net Operating Income or “NOI”. We define NOI as gross profit from operations, less Selling expenses, plus realized result from fair value adjustments of investment properties, less barter agreement results, plus Depreciation and amortization.
 
NOI is a non-IFRS financial measure that does not have a standardized meaning prescribed by IFRS. We present NOI because we believe it provides investors a supplemental measure of our financial performance that may facilitate period-to-period comparisons on a consistent basis. Our management also uses NOI from time to time, among other measures, for internal planning and performance measurement purposes. NOI should not be construed as an alternative to profit from operations, as an indicator of operating performance or as an alternative to cash flow provided by operating activities, in each case, as determined in accordance with IFRS. NOI, as calculated by us, may not be comparable to similarly titled measures reported by other companies. The table below presents a reconciliation of profit from operations to NOI for the periods indicated:
 
 
For the six-month period ended December 31 (in ARS million)
 
 
 
2021
 
 
2020
 
 
2019
 
Gross profit
  6,835 
  3,505 
  10,430 
Selling expenses 
  (840)
  (1,188)
  (1,144)
Depreciation and amortization 
  344 
  346 
  480 
Realized result from fair value of investment properties
  2,062 
  11,948 
  - 
Barter agreement results
  - 
  - 
  (490)
NOI (unaudited)
  8,401 
  14,611 
  9,276 
 
 
 
11
 
IRSA Inversiones y Representaciones Sociedad Anónima
 
Summary as of December 31, 2021
 
 
 
XIX. 
FFO Reconciliation
 
We also present in this summary report Adjusted Funds From Operations attributable to the controlling interest (or “Adjusted FFO”), which we define as Total profit for the year or period plus depreciation and amortization of property, plant and equipment, intangible assets and amortization of initial costs of leases minus total net financial results excluding net financial interests, minus unrealized result from fair value adjustments of investment properties minus inflation adjustment plus deferred tax, and less non-controlling interest net of the result for fair value, less the result of participation in associates and joint ventures.
 
Adjusted FFO is a non-IFRS financial measure that does not have a standardized meaning prescribed by IFRS. Adjusted FFO is not equivalent to our profit for the period as determined under IFRS. Our definition of Adjusted FFO is not consistent and does not comply with the standards established by the White Paper on funds from operations (FFO) approved by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”), as revised in February 2004, or the “White Paper.”
 
We present Adjusted FFO because we believe it provides investors a supplemental measure of our financial performance that may facilitate period-to-period comparisons on a consistent basis. Our management also uses Adjusted FFO from time to time, among other measures, for internal planning and performance measurement purposes. Adjusted FFO should not be construed as an alternative to profit from operations, as an indicator of operating performance or as an alternative to cash flow provided by operating activities, in each case, as determined in accordance with IFRS. Adjusted FFO, as calculated by us, may not be comparable to similarly titled measures reported by other companies. The table below presents a reconciliation of profit from operations to Adjusted FFO for the periods indicated:
 
 
For the six-month period ended December 31 (in ARS million)
 
 
 
2021
 
 
2020
 
 
2019
 
Result for the period 
  25,520 
  (1,758)
  9,979 
Result from fair value adjustments of investment properties
  (22,450)
  (13,986)
  (7,989)
Result from fair value adjustments of investment properties, realized
  2,062 
  11,948 
  - 
Depreciation and amortization 
  344 
  346 
  480 
Foreign exchange, net 
  (5,986)
  42 
  8,433 
Other financial results
  (12)
  61 
  - 
Results from derivative financial instruments 
  (11)
  476 
  163 
Results of financial assets and liabilities at fair value through profit or loss
  (857)
  (5,686)
  240 
Dividends earned
  - 
  (30)
  (6)
Other financial costs 
  350 
  599 
  420 
Deferred income tax 
  4,478 
  6,059 
  3,400 
Non-controlling interest
  202 
  876 
  (12,901)
Non-controlling interest related to PAMSA’s fair value
  (207)
  998 
  401 
Results of associates and joint ventures
  120 
  683 
  2,284 
Inflation adjustment
  (430)
  (1,674)
  (500)
Repurchase of non-convertible notes
  (790)
  331 
  (130)
Adjusted FFO
  2,333 
  (715)
  4,274 
 
 
12
 
IRSA Inversiones y Representaciones Sociedad Anónima
 
Summary as of December 31, 2021
 
 
XX. Brief comment on prospects for the Fiscal Year
 
We are optimistic about the recovery of the shopping center business during fiscal year 2022. Activity indicators, such as tenants’ sales and visiting public, evolve favorably and we continue working on occupying the area that was made available because of the pandemic. Likewise, we will continue to position the company's Marketplace to complement physical in-store sales with online sales, offering our customers different purchase and delivery alternatives.
 
The office segment represents a challenge this year. In the first half of the year, we have observed a slight reduction in rental prices ​​together with an increase in vacancies, mainly in B category. We are confident in the quality of our portfolio, after the “flight to quality” process that we have carried out in recent years, to be able to offer the best services and attract the most premium and demanding corporations in a context of transition towards a hybrid work modality. We will work during the year on the full occupation of the "261 Della Paolera" building, inaugurated in December 2020, as well as the rest of the vacant area of ​​the portfolio.
 
Regarding hotels segment, after the restrictions imposed in 2020 due to the pandemic, which kept the sector without operations for approximately 9 months, the activity is beginning to show signs of recovery from domestic tourism and government incentives to promote it. The sector awaits the resumption of air flows and the arrival of international tourism to recover its income levels prior to the pandemic.
 
After more than 20 years since we acquired the property known as Solares de Santa María in Puerto Madero Sur, the legislature of the city of Buenos Aires approved in December the Regulations for the development of the "Costa Urbana" project. The published law grants a New Standard, designated: "U73 - Public Park and Urban Coastal Development", which enables the combination of diverse uses such as housing, offices, shops, services, public spaces, education and entertainment. The Company will have a construction capacity of approximately 895,000 m², which will drive growth for the coming years through the development of mixed-use projects.
 
Within the framework of the corporate reorganization process that began at the beginning of the year, the shareholders' meetings of IRSA and IRSA PC held on December 22, 2021 approved the merger by absorption between the companies, in which IRSA absorbs IRSA PC, which dissolves without liquidating. The effective date of the merger is July 1, 2021. Both companies have initiated the administrative processes before the National Securities Commission for the administrative compliance of said body and its subsequent registration before the General Inspection of Justice, in charge of the Registry Public in the Autonomous City of Buenos Aires, of (i) the merger by absorption; (ii) the capital increase by merger and authorization of the public offering of said shares by IRSA; (iii) the dissolution without liquidation of IRSA PC; (iv) the transfer of the public offer and the cancellation of the public offer of IRSA PC. The approvals by the controlling agencies could take several months.
 
In 2022 we will continue working on the reduction and efficiency of the cost structure and on the consolidation of the best real estate portfolio in Argentina, maintaining our commitment to preserve the health and well-being of clients, employees, tenants, and the entire population.
 
Eduardo S. Elsztain
Chairman
 
 
 
 
 
13