Irsa Investments (IRS) 6-K, filed Jan 5, 2021

United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of January 2021.

Commission File Number 001-13542

IRSA Inversiones y Representaciones Sociedad Anónima

(Exact name of registrant as specified in its charter)

IRSA Investments and Representations Inc.

(Translation of registrant’s name into English)

Carlos Della Paolera 261

(C1001ADA) Ciudad Autónoma de Buenos Aires, Argentina

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F ☒ Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached Form 6-K to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

TABLE OF CONTENTS

Page

Explanatory Note	1
Disclaimer Regarding Forward-Looking Statements	2
Available Information	2
Presentation of Financial and Certain Other<br>Information	3
Selected Consolidated Financial Data	5
Local Exchange Market and Exchange Rates	8
Information on the Company	9
Operating and Financial Review and Prospects	28
Directors, Senior Management and Employees	54
Major Shareholders	55
Controls and Procedures	56
Signatures	58

EXPLANATORY NOTE

IRSA Inversiones y Representaciones Sociedad Anónima (“IRSA,” the “Company,” “we,” “our” or “us”) is filing this report on Form 6-K (this “Form 6-K”) pursuant to SEC Financial Reporting Manual, Topic 13 – Effects of Subsequent Events on Financial Statements Required in Filings, which requires retrospective revision of audited financial statements that are incorporated by reference in a registration statement to reflect a subsequent change in accounting principle (or consistent with staff practice, discontinued operations and changes in segment presentation) if the registration statement also incorporates by reference post-event interim financial statements. Exhibit 99.1 to this Form 6-K includes IRSA’s audited consolidated financial statements as of June 30, 2020 and 2019 and for the fiscal years ended June 30, 2020, 2019 and 2018, which have been recast to: (a) present the audited consolidated financial statements in the measuring unit current at the end of the reporting period as of September 30, 2020 (the most recent period for which financial statements were included in this Form 6-K); and (b) reflect IRSA’s loss of control of IDB Development Corporation, Ltd. (“IDBD”) and Discount Investment Corporation, Ltd. (“DIC”) on September 25, 2020 and, consequently, the deconsolidation of such investees since that date. See “Presentation of Financial and Certain Other Information.” Our Audited Consolidated Financial Statements included as Exhibit 99.1 to this Form 6-K amend and replace in their entirety the audited consolidated financial statements of IRSA included in IRSA’s annual report on Form 20-F for the fiscal year ended June 30, 2020 (our “2020 Form 20-F”) originally filed with the U.S. Securities and Exchange Commission (the “SEC”) on November 16, 2020, and the other information in this Form 6-K amends and replaces information set forth in our 2020 Form 20-F to the extent the information contained in our 2020 Form 20-F conflicts with the information contained herein. Exhibit 99.2 to this Form 6-K includes IRSA’s unaudited condensed interim consolidated financial statements as of September 30, 2020 and for the three-month periods ended September 30, 2020 and 2019. This Form 6-K should be read in conjunction with our 2020 Form 20-F.

DISCLAIMER REGARDING FORWARD-LOOKING STATEMENTS

This Form 6-K includes forward-looking statements, principally under “Risk Factors,” “Information on the Company” and “Operating and Financial Review and Prospects.” We have based these forward-looking statements largely on our current beliefs, expectations and projections about future events and financial trends affecting our business. Many important factors, in addition to those discussed elsewhere in this Form 6-K, could cause our actual results to differ substantially from those anticipated in our forward-looking statements, including, among other things:

Factors that could cause actual results to differ materially and adversely include but are not limited to:

●

changes in general economic, financial, business, political, legal, social or other conditions in Argentina and Latin America or changes in developed markets or emerging markets or both;

●

changes in capital markets in general that may affect policies or attitudes toward lending to or investing in Argentina or Argentine companies, including volatility in domestic and international financial markets;

●

inflation and deflation;

●

ongoing economic impacts of the COVID-19 pandemic on the Argentine economy;

●

measures adopted by the Argentine Government in response to the COVID-19 pandemic;

●

impact on our business of the COVID-19 pandemic;

●

economic consequences of the pandemic and the related impact on our business and financial condition;

●

fluctuations in the exchanges rates of the peso and in the prevailing interest rates;

●

increases in financing costs or our inability to obtain additional financing on attractive terms, which may limit our ability to fund existing operations and to finance new activities;

●

current and future government regulation and changes in law or in the interpretation by Argentine courts;

●

price fluctuations in the real estate market;

●

political, civil and armed conflicts;

●

adverse legal or regulatory disputes or proceedings;

●

fluctuations and declines in the aggregate principal amount of Argentine public debt outstanding, default of sovereign debt;

●

government intervention in the private sector and in the economy, including through nationalization, expropriation, labor regulation or other actions;

●

restrictions on transfer of foreign currencies and other exchange controls;

●

increased competition in the shopping mall sector, office or other commercial properties and related industries;

●

potential loss of significant tenants at our shopping malls, offices or other commercial properties;

●

our ability to take advantage of opportunities in the real estate market on a timely basis;

●

restrictions on energy supply or fluctuations in prices of utilities in the Argentine market;

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our ability to meet our debt obligations;

●

shifts in consumer purchasing habits and trends;

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technological changes and our potential inability to implement new technologies;

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deterioration in regional, national or global businesses and economic conditions;

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changes on the applicable regulations to currency exchange or transfers;

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incidents of government corruption that adversely impact the development of our real estate projects;

●

fluctuations and declines in the exchange rate of the peso, the U.S. dollar against other currencies; and

●

the risk factors discussed under “Risk Factors” in our 2020 Form 20-F.

You can identify forward-looking statements because they contain words such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “intends,” “plans,” “estimates,” “anticipates,” “could,” “target,” “projects,” “contemplates,” “potential,” “continue” or similar expressions. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, the effects of future regulation and the effects of competition. Forward-looking statements speak only as of the date they were made, and we undertake no obligation to update publicly or to revise any forward-looking statements after we furnish this Form 6-K because of new information, future events or other factors. In light of the risks and uncertainties described above, the forward-looking events and circumstances discussed in this Form 6-K might not occur and are not guarantees of future performance.

You should not place undue reliance on such statements which speak only as of the date that they were made. These cautionary statements should be considered in connection with any written or oral forward-looking statements that we might issue in the future.

AVAILABLE INFORMATION

We file annual and current reports and other information with the SEC. You may obtain any report, information or other document we file electronically with the SEC at the SEC’s website (http://www.sec.gov) or at our website (http://www.irsa.com.ar). The information contained in our website is not incorporated by reference herein and does not form part of this Form 6-K.

PRESENTATION OF FINANCIAL AND CERTAIN OTHER INFORMATION

In this Form 6-K, references to “IRSA,” the “Company,” “we,” “us” and “our” means IRSA Inversiones y Representaciones Sociedad Anónima and its consolidated subsidiaries, unless the context otherwise requires, or where we make clear that such term refers only to IRSA and not to its subsidiaries.

The terms “Argentine government” and “government” refer to the federal government of Argentina, the term “Central Bank” refers to the Banco Central de la República Argentina (the Argentine Central Bank), the terms “CNV” and “CNV Rules” refer to the Comisión Nacional de Valores (the Argentine National Securities Commission) and the rules issued by the CNV, respectively. In this Form 6-K, when we refer to “peso,” “pesos” or “ARS” we mean Argentine pesos, the legal currency of Argentina, and when we refer to “U.S. dollar,” “U.S. dollars” or “USD” we mean United States dollars, the legal currency of the United States.

References to “GDSs” are to the Global Depositary Shares, each representing 10 shares of our common stock, issued pursuant to the deposit agreement, dated as of March 18, 1997 (the “deposit agreement”), between us, The Bank of New York, as depositary (the “GDS Depositary”), and the owners and holders of the GDSs issued from time to time thereunder, and references to “GDRs” are to the Global Depositary Receipts, which represent the GDSs.

Financial Statements

We prepare and maintain our financial books and records in pesos and in conformity with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”), and the CNV Rules. Our fiscal year begins on July 1 and ends on June 30 of each year.

The following have been filed as exhibits to this Form 6-K:

●

our audited consolidated financial statements as of June 30, 2020 and 2019 and for the years ended June 30, 2020, 2019 and 2018 (our “Audited Consolidated Financial Statements”), which have been recast to: (a) present the Audited Consolidated Financial Statements in the measuring unit current at the end of the reporting period as of September 30, 2020 (the most recent period for which financial statements are included in this Form 6-K); and (b) reflect IRSA’s loss of control in IDBD and DIC on September 25, 2020 and, consequently, the deconsolidation of such investees since that date; and

●

our unaudited condensed interim consolidated financial statements as of September 30, 2020 and for the three-month periods ended September 30, 2020 and 2019 (our “Unaudited Condensed Interim Consolidated Financial Statements” and, together with our Audited Consolidated Financial Statements, our “Financial Statements”).

Our Audited Consolidated Financial Statements have been approved by our Board of Directors on January 5, 2020 and have been audited by Price Waterhouse & Co S.R.L., Argentina, member of PriceWaterhouseCoopers International Limited, an independent registered public accounting firm whose report is included herein.

Deconsolidation of IDBD and DIC

Prior to September 25, 2020, we managed our business and operations in Israel through our subsidiaries IDBD and DIC. On September 25, 2020, the District Court in Tel Aviv-Jaffa (the “Court”), in response to a petition from IDBD’s creditors, declared the insolvency of IDBD and initiated liquidation proceedings (the “Liquidation Proceedings”). The Court appointed a trustee for IDBD’s shares and receivers for DIC’s and Clal’s shares.

Under IFRS 10 “Consolidated Financial Statements” (“IFRS 10”), an investor controls an investee if and only if the investor has all the following: (a) power over the investee; (b) exposure, or rights, to variable returns from its involvement with the investee; and (c) the ability to use its power over the investee to affect the amount of the investor’s returns. Based on the facts and circumstances outlined above, our management believes that, as from September 25, 2020, IRSA lost control over IDBD and DIC (as this term is defined by IFRS 10). Accordingly, (a) our investment in IDBD and DIC has been deconsolidated in our Unaudited Interim Financial Statements, and (b) our Audited Consolidated Financial Statements have been restated to reflect the deconsolidation of IDBD and DIC.

Functional and Presentation Currency; Adjustment for Inflation

Our functional and presentation currency is the peso, and our Financial Statements filed as exhibits to this Form 6-K are presented in pesos.

IAS 29, Financial Reporting in Hyperinflationary Economies (“IAS 29”) requires that the financial statements of an entity whose functional currency is one of a hyperinflationary economy be measured 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. This requirement also includes the comparative information of the financial statements.

In order to conclude that an economy is “hyperinflationary,” IAS 29 outlines a series of factors, including the existence of an accumulated inflation rate in three years that is approximately or exceeds 100%. As of July 1, 2018, Argentina reported a cumulative three-year inflation rate greater than 100% and therefore financial information published as from that date should be adjusted for inflation in accordance with IAS 29. Therefore, our Financial Statements and the financial information included in this Form 6-K have been presented in terms of the measuring unit current at the end of the reporting period as of September 30, 2020. For more information, see “—Financial Statements” and Note 2.1 to our Audited Consolidated Financial Statements.

Effective July 1, 2018, we adopted IFRS 15, Revenues from contracts with customers (“IFRS 15”) and IFRS 9, Financial instruments (“IFRS 9”) using the modified retrospective approach, so that the cumulative impact of the adoption was recognized in the retained earnings at the beginning of the fiscal year starting on July 1, 2018, and the comparative figures were consequently not modified. Accordingly, certain comparisons between periods may be affected. See Note 2.2 to our Audited Consolidated Financial Statements and “Operating Review and Prospects—New Accounting Pronouncements” for a more comprehensive discussion of the effects of the adoption of these new standards.

Organizational Structure

As of September 30, 2020, we had two operations centers to manage our global business, which we refer to in this Form 6-K as the “Operations Center in Argentina” and the “Operations Center in Israel.” Following the loss of control of IDBD and DIC on September 25, 2020, and starting on October 1, 2020, we manage our global business from our Operations Center in Argentina. See above “—Deconsolidation of IDBD and DIC.”

(i) Corresponds to the Company’s associates, which are entities over which the Company has significant influence and are accounted for using the equity method in accordance with IAS 28, and, accordingly, are excluded from consolidation.

(ii) The results for the 2018 fiscal year reflected as “discontinued operations” in our Financial Statements, due to the loss of control in June 2018. See “—Financial Information of our Subsidiaries in Israel.”

(iii) Reflected as “financial assets held for sale” in our Financial Statements.

(iv) Assets and liabilities are reflected as “held for sale” and the results as “discontinued operations” in our Financial Statements.

(v) For more information about the changes within the Operations Center in Israel, see Note 4 to our Audited Consolidated Financial Statements. As from September 25, 2020, IRSA lost control over IDBD and DIC. Accordingly, our investment in IDBD and DIC was deconsolidated in our financial statements as of and for the three-month period ended September 30, 2020.

Currency Translations

We have translated some of the peso amounts contained in this Form 6-K into U.S. dollars for convenience purposes only. Unless otherwise specified or the context otherwise requires, the rate used to convert peso amounts to U.S. dollars is the seller exchange rate quoted by Banco de la Nación Argentina of ARS 76.18 per USD 1.00 as of September 30, 2020. The seller exchange rate quoted by Banco de la Nación Argentina was ARS 84.70 per USD 1.00 as of January 4, 2021. The U.S. dollar equivalent information presented in this Form 6-K is provided solely for the convenience of the reader and should not be construed as implying that the peso amounts represent, or could have been or could be converted into, U.S. dollars at such rates or at any other rate. See “Local Exchange Market and Exchange Rates” and “Risk Factors—Risks relating to Argentina—Continuing inflation may have an adverse effect on the economy and our business, financial condition and the results of our operations” in our 2020 Form 20-F.

Market Share Data

Information regarding market share in a specified region or area is based on data compiled by us from internal sources and from publications such as Bloomberg, the International Council of Shopping Centers, the Argentine Chamber of Shopping Centers (Cámara Argentina de Shopping Centers), and the INDEC.

Certain Measurements

In Argentina the standard measure of area in the real estate market is the sqm (m2, or “sqm”), while in the United States and certain other jurisdictions the standard measure of area is the square foot (sq. ft.). All units of area shown in this Form 6-K (e.g., gross leasable area of buildings (“GLA” or “gross leasable area”), and size of undeveloped land) are expressed in terms of sqm. One sqm is equal to approximately 10.8 square feet. One hectare is equal to approximately 10,000 sqm and to approximately 2.47 acres.

As used herein, GLA in the case of shopping malls refers to the total leasable area of the property, regardless of our ownership interest in such property (excluding common areas and parking and space occupied by supermarkets, hypermarkets, gas stations and co-owners, except where specifically stated).

Rounding Adjustments

Certain numbers and percentages included in this Form 6-K have been subject to rounding adjustments. Accordingly, figures shown for the same category presented in various tables or other sections of this Form 6-K may vary slightly, and figures shown as totals in certain tables may not be the arithmetic aggregation of the figures that precede them.

SELECTED CONSOLIDATED FINANCIAL DATA

The following table presents our selected financial data as of June 30, 2020, 2019 and 2018 and for the fiscal years ended June 30, 2020, 2019, 2018 and 2017. The selected consolidated statement of income and other comprehensive income data and the selected consolidated statement of cash flow data for the fiscal years ended June 30, 2020, 2019 and 2018 and the selected consolidated statement of financial position data as of June 30, 2020 and 2019 have been prepared in accordance with IFRS, as issued by the IASB, and CNV Rules, and have been derived from our Audited Consolidated Financial Statements included as an exhibit to this Form 6-K, which have been recast to: (a) present the Audited Consolidated Financial Statements in the measuring unit current at the end of the reporting period as of September 30, 2020 (the most recent period for which financial statements were included in this Form 6-K); and (b) reflect IRSA’s loss of control in IDBD and DIC on September 25, 2020 and, consequently, the deconsolidation of such investees since that date. The selected consolidated statement of income and other comprehensive income data and the selected consolidated statement of cash flow data for the fiscal year ended June 30, 2017 and the selected consolidated statement of financial position data as of June 30, 2018 have been prepared in accordance with IFRS, as issued by the IASB, and CNV Rules, and have been derived from our audited consolidated financial statements as of June 30, 2019 and 2018 and for the years ended June 30, 2019, 2018 and 2017 filed as an exhibit to our Annual Report on Form 20-F filed with the SEC on October 31, 2019, recast to present such financial information in the measuring unit current as of September 30, 2020 and reflect IRSA’s loss of control in IDBD and DIC on September 25, 2020 and, consequently, the deconsolidation of such investees since that date. The summary financial data as of June 30, 2017 and 2016 and for the fiscal year ended June 30, 2016 have not been presented as these cannot be provided on a restated basis without unreasonable effort or expense. See “Presentation of Financial and Other Information—Functional and Presentation Currency,” “Operating and Financial Review and Prospects—Results of Operations— Effects of Changes in Inflation,” “Risk Factors—Risk Related to Argentina—If the high levels of inflation continue, the Argentine economy and our results of operations could be adversely affected in our 2020 Form 20-F,” and Note 2 to our Audited Consolidated Financial Statements.

The following table also presents our selected financial data as of September 30, 2020 and 2019 and for the three-month periods ended September 30, 2020 and 2019. The selected interim consolidated statement of income and comprehensive income data and the selected interim consolidated statement of cash flow data for the three-month periods ended September 30, 2020 and 2019 and the selected interim consolidated statement of financial position data as of September 30, 2020 have been prepared in accordance with IAS 34, Interim Financial Reporting (“IAS 34”), as issued by the IASB and have been derived from our Unaudited Condensed Interim Consolidated Financial Statements included as an exhibit to this Form 6-K. The results of our operations for the three-month period ended September 30, 2020 are not necessarily indicative of the results to be expected for the full fiscal year ending June 30, 2021.

You should read the information below in conjunction with our Financial Statements, including the notes thereto.

Summarized Consolidated Financial and Other Information

	For the three months			For the fiscal year ended
	ended September 30,			June 30,
	2020	2020	2019	2020	2020	2019	2018	2017
	(in millions of USD)(i)(ii)	(in millions of ARS; except per share<br>data)		(in millions of USD)(i)(ii)	(in millions of ARS; except per share<br>data)
CONSOLIDATED STATEMENT OF INCOME AND OTHER COMPREHENSIVE<br>INCOME
Revenues	21	1,609	4,487	200	15,240	20,071	19,522	19,858
Costs	(14)	(1,097)	(1,682)	(83)	(6,359)	(7,498)	(7,727)	(8,320)
Gross profit	7	512	2,805	117	8,881	12,573	11,795	11,538
Net<br>gain / (loss) from changes in fair value of investment<br>properties	316	24,089	12,349	477	36,313	(41,737)	20,627	(7,951)
General<br>and administrative expenses	(8)	(644)	(661)	(31)	(2,365)	(2,928)	(2,518)	(2,402)
Selling<br>expenses	(6)	(450)	(295)	(17)	(1,306)	(1,160)	(1,195)	(1,163)
Other<br>operating results, net	0	(18)	(56)	0	(24)	(506)	(27)	(986)
Profit / (loss) from operations	308	23.489	14.142	545	41,499	(33,758)	28,682	(964)
Share<br>of profit / (loss) of associates and joint ventures	2	147	737	102	7,771	(7,588)	(3,551)	(1,223)
Profit / (loss) from operations before financial results and income<br>tax	310	23,636	14,879	647	49,270	(41,346)	25,131	(2,187)
Finance<br>income	1	56	83	3	229	202	808	1,041
Finance<br>cost	(21)	(1,593)	(1,782)	(87)	(6,629)	(5,151)	(4,631)	(4,014)
Other<br>financial results	8	624	(9,152)	(87)	(6,657)	2,415	(11,832)	2,308
Inflation<br>adjustment	0	(29)	(393)	1	97	(568)	(949)	(588)
Financial results, net	(12)	(942)	(11,244)	(170)	(12,960)	(3,102)	(16,604)	(1,253)
Profit/ (loss) before income tax	298	22,694	3,635	477	36,310	(44,448)	8,527	(3,440)
Income<br>tax expense	(104)	(7,958)	(2,505)	(95)	(7,216)	4,845	11,455	(1,131)
Profit / (Loss) from continuing operations	193	14,736	1,130	382	29,094	(39,603)	19,982	(4,571)
Profit<br>/ (Loss) from discontinued operation	(84)	(6,396)	13,887	(47)	(3,546)	(1,704)	15,773	9,262
Total Profit / (Loss) for the year	109	8,34	15,017	335	25,548	(41,307)	35,755	4,691
Profit / (loss) from continuing operations attributable<br>to:
Equity<br>holders of the parent	153	11,679	247	290	22,065	(34,991)	16,208	(4,296)
Non-controlling<br>interest	40	3,057	883	92	7,029	(4,612)	3,774	(275)
Total profit / (loss) attributable to:
Equity<br>holders of the parent	87	6,615	4,509	201	15,340	(39,412)	22,66	(1,723)
Non-controlling<br>interest	23	1,725	10,508	134	10,208	(1,895)	13,095	6,414
Profit / (loss) per common share from continuing operations<br>attributable to equity holders of the parent:
Basic	0.15	11.50	7.84	0.35	26.66	(68.55)	39.39	(2.99)
Diluted	0.15	11.42	7.84	0.35	26.50	(68.55)	39.16	(2.99)
Total profit / (loss) per common share attributable to equity<br>holders of the parent:
Basic	0.27	20.31	0.43	0.50	38.35	(60.86)	28.17	(13.13)
Diluted	0.26	20.17	0.43	0.50	38.12	(60.86)	28.17	(13.13)
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE<br>OPERATIONS
Profit/ (loss) for the year	109	8,340	15,017	335	25,548	(41,307)	35,755	4,691
Other comprehensive income (loss):
Items that may be reclassified subsequently to profit or<br>loss:
Currency<br>translation adjustment	(77)	(5,833)	71	7	520	306	(25)	(13,931)
Net<br>change in fair value of hedging instruments	—	—	—	—	—	—	—	—
Revaluation<br>reserve	26	1,954	1,730	—	—	—	—	—
Items that may not be reclassified subsequently to profit or loss,<br>net of income tax
Actuarial<br>loss from defined benefit plans	—	—	(11)	—	—	—	—	—
Other comprehensive income / (loss) from continuing<br>operations	(51)	(3,879)	1,790	7	520	306	(25)	(13,931)
Other<br>comprehensive income / (loss) from discontinued<br>operations	(63)	(4,794)	14,057	194	14,748	(2,486)	14,564	19,271
Total other comprehensive income / (loss) for the year	(114)	(8,673)	15,847	200	15,268	(2,180)	14,539	5,340
Total comprehensive income / (loss) for the year	(4)	(333)	30,864	536	40,816	(43,487)	50,294	10,031
Total<br>comprehensive income / (loss) from continuing<br>operations	143	10,857	2,920	389	29,614	(39,297)	19,958	(18,501)
Total<br>comprehensive income / (loss) from discontinued<br>operations	(147)	(11,190)	27,944	147	11,202	(4,190)	30,336	28,532
Total comprehensive income / (loss) for the year	(4)	(333)	30,864	536	40,816	(43,487)	50,294	10,031
Total comprehensive income / (loss) from continued operation<br>attributable to:
Equity<br>holders of the parent	197	15,034	2,062	296	22,585	(34,685)	15,972	(17,433)
Non-controlling<br>interest	(55)	(4,177)	858	92	7,029	(4,612)	3,985	(1,068)
Total comprehensive income / (loss) attributable to:
Equity<br>holders of the parent	39	2,914	3,568	187	14,280	(40,421)	19,040	1,538
Non-controlling<br>interest	(43)	(3,247)	27,296	348	26,536	(3,066)	31,254	8,493
CASH FLOW DATA
Net<br>cash generated by / (used in) operating activities	44	3,362	10,467	440	33,495	29,111	21,983	20,380
Net<br>cash generated by / (used in) investing activities	544	41,441	3,490	574	43,755	12,045	(32,870)	(6,075)
Net<br>cash generated by / (used in) financing activities	(356)	27,144	(35,239)	(1,076)	(81,952)	(29,878)	(6,634)	5,311

	As<br>of September 30,			For<br>the fiscal year endedJune 30,
	2020	2020	2019	2020	2020	2019	2018
	(in<br>millions of USD)(i)(ii)	(in<br>millions of ARS)		(in<br>millions of USD)(i)(ii)	(in<br>millions of ARS)
CONSOLIDATED<br>STATEMENT OF FINANCIAL POSITION
ASSETS
Non-current<br>assets
Investment<br>properties	2,185	166,478	244,966	3,216	244,966	359,056	389,643
Property, plant and<br>equipment	31	2,338	40,618	533	40,618	34,347	34,011
Trading<br>properties	17	1,328	5,228	69	5,228	8,436	15,916
Intangible<br>assets	16	1,186	29,911	393	29,911	27,563	29,679
Right-of-use<br>assets	8	621	21,379	281	21,379	—	—
Other<br>assets	—	—	—	—	—	37	452
Investment in<br>associates and joint ventures	167	12,718	80,089	1,051	80,089	47,841	62,040
Deferred income tax<br>assets	2	148	681	9	681	614	857
Income tax and<br>Minimum Presumed Income Tax credit	0	26	27	-	27	232	990
Restricted<br>assets	—	—	2,014	26	2,014	4,737	4,893
Trade and other<br>receivables	25	1,881	24,898	327	24,898	19,033	19,491
Employee<br>benefits	—	—	—	—	—	—	—
Investments in<br>financial assets	7	506	3,782	50	3,782	4,444	4,105
Financial assets<br>and other assets held for sale	—	—	—	—	—	6,428	18,642
Derivative<br>financial instruments	—	—	153	2	153	146	—
Total non-current assets	2,458	187,230	453,746	5,956	453,746	512,914	580,719
Current<br>Assets
Trading<br>properties	3	218	2,493	33	2,493	563	7,843
Inventories	1	65	5,041	66	5,041	1,765	1,508
Restricted<br>assets	0	8	6,684	88	6,684	6,741	10,160
Income tax<br>credit	1	105	331	4	331	600	953
Group of assets<br>held for sale	—	—	44,868	589	44,868	12,378	12,427
Trade and other<br>receivables	66	4,998	39,986	525	39,986	34,687	35,789
Investments in<br>financial assets	44	3,378	20,922	275	20,922	49,573	61,015
Financial assets<br>and other assets held for sale	—	—	3,636	48	3,636	17,942	10,690
Derivative<br>financial instruments	0	16	227	3	227	63	208
Cash and cash<br>equivalents	58	4,397	97,276	1,277	97,276	93,060	89,326
Total<br>Current Assets	173	13,185	221,464	2,907	221,464	217,372	229,919
TOTAL<br>ASSETS	2,631	200,415	675,210	8,863	675,210	730,286	810,638
SHAREHOLDERS’<br>EQUITY
Shareholders’<br>equity attributable to equity holders of the parent
Share<br>capital	8	575	575	8	575	575	575
Treasury<br>stock	0	4	4	0	4	4	4
Inflation<br>adjustment of share capital and treasury stock	192	14,613	14,613	192	14,612	14,612	14,612
Share<br>premium	205	15,653	15,653	205	15,653	15,653	15,653
Additional paid-in<br>capital from treasury stock	1	104	102	1	101	83	83
Legal<br>reserve	7	522	522	7	522	522	522
Special<br>reserve	133	10,124	10,124	133	10,121	10,121	10,121
Other<br>reserves	113	8,603	6,345	83	6,348	73,257	5,284
Retained<br>earnings	265	20,177	13,562	179	13,564	(65,475)	47,517
Total capital and reserves attributable to<br>equity holders of the parent	924	70,375	61,500	807	61,500	49,352	94,371
Non-controlling<br>interest	307	23,364	70,544	926	70,544	82,692	89,519
TOTAL<br>SHAREHOLDERS’ EQUITY	1,230	93,739	132,044	1,733	132,044	132,044	183,890
LIABILITIES
Non-current<br>liabilities
Trade and other<br>payables	23	1,745	2,335	30	2,335	2,697	8,653
Lease<br>liabilities	8	586	14,400	189	14,400	—	—
Borrowings	420	31,967	320,616	4,209	320,616	410,853	433,369
Derivative<br>financial instruments	0	29	59	1	59	1,582	57
Deferred income tax<br>liabilities	553	42,121	47,408	622	47,408	56,616	63,538
Employee<br>benefits	—	—	481	6	481	202	263
Salaries and social<br>security liabilities	0	33	210	3	210	169	160
Provisions	2	145	3,297	43	3,297	12,329	8,495
Total<br>non-current liabilities	1,006	76,626	388,806	5,104	388,806	484,448	514,535
Current<br>liabilities
Trade and other<br>payables	66	5,007	31,943	419	31,943	28,559	35,276
Lease<br>liabilities	—	—	23,912	314	23,912	8,759	7,763
Group of<br>liabilities held for sale	2	139	5,242	69	5,242	—	—
Salaries and social<br>security liabilities	3	235	4,419	57	4,419	3,241	3,725
Borrowings	321	24,471	84,338	1,107	84,338	70,014	61,246
Derivative<br>financial instruments	1	60	1,206	16	1,206	38	434
Provisions	1	108	2,627	34	2,627	2,651	2,520
Income tax and<br>minimum presumed income tax (“MPIT”)<br>liabilities	0	30	673	9	673	532	1,249
Total<br>current liabilities	394	30,050	154,360	2,026	154,360	113,794	112,213
TOTAL<br>LIABILITIES	1,400	106,676	543,166	7,130	543,166	598,242	626,748
TOTAL<br>SHAREHOLDERS’ EQUITY AND LIABILITIES	2,631	200,415	675,210	8,863	675,210	730,286	810,638

	As<br>of and for the three months ended September 30,			As<br>of and for the fiscal year endedJune 30,
	2020	2020	2019	2020	2020	2019	2018
	(in<br>millions of USD)(i)(ii)	(in<br>millions of ARS)(except for number of shares, per share and GDS<br>data and ratios)		(in<br>millions of USD)(i)(ii)	(in<br>millions of ARS)(except for number of shares, per share and GDS<br>data and ratios)
OTHER<br>FINANCIAL DATA
Basic net (loss)/<br>income per common share from continuing operations(1)	0.15	11.50	7.84	0.35	26.66	(68.55)	39.39
Diluted net (loss)/<br>income per common share from continuing operations(2)	0.15	11.42	7.84	0.35	26.50	(68.55)	39.16
Basic net (loss)/<br>income per GDS from continuing operations(1)<br>(3)	1.51	115.00	78.40	3.50	266.60	(685.50)	393.90
Diluted net (loss)/<br>income per GDS from continuing operations(2) (3)	1.50	114.20	78.40	3.48	265.00	(685.50)	391.60
Basic net (loss)/<br>income per common share	0.27	20.31	0.43	0.50	38.35	(60.86)	28.17
Diluted net (loss)/<br>income per common share	0.26	20.17	0.43	0.50	38.12	(60.86)	28.17
Basic net (loss)/<br>income per GDS	2.67	203.10	4.30	5.03	383.50	(608.60)	281.73
Diluted net (loss)/<br>income per GDS	2.65	201.70	4.30	5.00	381.20	(608.60)	281.73
Diluted weighted<br>– average number of common shares	578,676,471	578,676,471	578,676,471	578,676,471	578,676,471	578,676,471	578,676,471
Depreciation and<br>amortization	2	122	119	7	519	402	324
Capital<br>expenditures	16	1,202	3,459	156	11,896	20,191	20,523
Working<br>capital	(221)	(16,865)	67,104	881	67,104	103,578	117,706
Ratio of current<br>assets to current liabilities	0.01	0.44	1.43	0.02	1.43	1.91	2.05
Ratio of<br>shareholders’ equity to total liabilities	0.01	0.88	0.24	0.00	0.24	0.22	0.29
Ratio of<br>non-current assets to total assets	0.01	0.93	0.67	0.01	0.67	0.70	0.72
Dividend<br>paid	—	—	—	3	239	—	(1,106)
Dividends per<br>common share	—	—	—	0.01	0.42	—	(1.92)
Dividends per<br>GDS	—	—	—	0.05	4.16	—	(19.20)
Number of common<br>shares outstanding	576,056,589	576,056,589	574,940,605	576,056,589	576,056,589	574,940,605	575,421,864
Capital<br>Stock	575	575	575	575	575	575	575

(i)

Totals may not sum due to rounding.

(ii)

Solely for the convenience of the reader we have translated peso amounts into U.S. dollars at the seller exchange rate quoted by Banco de la Nación Argentina as of September 30, 2020, which was ARS 76.18 per USD 1.00. We make no representation that the peso or U.S. dollar amounts actually represent, could have been or could be converted into U.S. dollars at the rates indicated, at any particular rate or at all. See “Local Exchange Market and Exchange Rates.” Totals may not sum due to rounding.

(1)

Basic net income per share is calculated by dividing the net income available to holders of common shares for the period / year by the weighted average number of shares outstanding during the period / year.

(2)

Diluted net income per share is calculated by dividing the net income for the year by the weighted average number of ordinary shares including treasury shares.

(3)

Determined by multiplying the amounts per share by ten (one GDS is equal to ten common shares). Dividend amounts, corresponding to fiscal years ending on June 30 of each year, are determined by the annual shareholders’ meeting, which takes place in October of each year.

LOCAL EXCHANGE MARKET AND EXCHANGE RATES

The Argentine government has established a series of exchange control measures that restrict the free disposition of funds and the transfer of funds abroad. These measures significantly curtail access to the foreign exchange market Mercado Único y Libre de Cambios (“MULC”) by both individuals and private sector entities. This makes it necessary, among other things, to obtain prior approval from the Banco Central de la República Argentina (the “Central Bank”) to enter into certain foreign exchange transactions such as payments relating to royalties, services or fees payable to related parties of Argentine companies outside Argentina. For more information about exchange controls see, “Item 10. Additional Information—D. Exchange Controls” in our 2020 Form 20-F.

The following table shows the maximum, minimum, average and closing exchange rates for each applicable period to purchases of U.S. dollars.

	Maximum(1)(2)	Minimum(1)(3)	Average(1)(4)	At<br>closing(1)
Fiscal<br>year ended:
June 30,<br>2018	28.8000	16.7500	19.4388	28.8000
June 30,<br>2019	45.8700	27.1600	37.8373	42.3630
June 30,<br>2020	70.3600	41.5000	59.5343	70.3600
Month<br>ended:
July 31,<br>2020	72.2200	70.4200	71.3795	72.2200
August 31,<br>2020	74.0800	72.4200	73.1980	74.0800
September 30,<br>2020	76.0800	74.1500	75.1036	76.0800
October 30,<br>2020	78.2200	76.1500	77.4843	78.2200
November 30,<br>2020	81.2100	78.5900	79.0814	81.2100
December<br>2020	84.0500	81.3300	82.5383	84.0500
January 4, 2021<br>(through January 4, 2021)	84.6000	84.6000	84.6000	84.6000
---	---	---	---	---

Source: Banco de la Nación Argentina

(1)

Average between the offer exchange rate and the bid exchange rate according to Banco de la Nación Argentina’s foreign currency exchange rate.

(2)

The maximum exchange rate appearing in the table was the highest end-of-month exchange rate in the year or shorter period, as indicated.

(3)

The minimum exchange rate appearing in the table was the lowest end-of-month exchange rate in the year or shorter period, as indicated.

(4)

Average exchange rates at the end of the month.

INFORMATION ON THE COMPANY

History and Development of the Company

General Information

Our legal and commercial name is IRSA Inversiones y Representaciones Sociedad Anónima. We were incorporated and organized on April 30, 1943, under Argentine law as a stock corporation (sociedad anónima), and we were registered with the Public Registry of Commerce of the City of Buenos Aires (Inspección General de Justicia or “IGJ”) on June 23, 1943, under number 284, on page 291, book 46 of volume A. Pursuant to our bylaws, our term of duration expires on April 5, 2043.

Our common shares are listed and traded on the Bolsas y Mercados Argentinos (“BYMA”) and our GDSs representing our common shares are listed on the New York Stock Exchange (“NYSE”). Our headquarters are located at Carlos M. Della Paolera 261, 9th Floor, Ciudad Autónoma de Buenos Aires (C1091AAQ), Argentina. Our telephone is +54 (11) 4323-7400. Our website is www.irsa.com.ar. Information contained in or accessible through our website is not a part of this Form 6-K.

We assume no responsibility for the information contained on these sites. Our depositary agent for the GDSs in the United States is The Bank of New York Mellon whose address is 240 Greenwich Street, New York, NY 10286, and whose telephone numbers are +1-888-BNY-ADRS (+1-888-269-2377) for U.S. calls and +1-201-680-6825 for calls outside U.S.

History

From our Operations Center in Argentina we manage our businesses in Argentina and our international investment in Condor Hospitality Trust, Inc., a hotel-focused real estate investment trust (“Condor”).

In July 1994, we acquired a controlling interest in IRSA CP, our main subsidiary in the Operation Center in Argentina, and in January 14, 2010, we acquired from Parque Arauco S.A. a 31.6% stake in IRSA CP. Consequently, we increased our shareholding in IRSA CP to 94.9%. On October 27, 2017, we completed the sale in the secondary market of 2,560,000 ADSs of IRSA CP, which represented 8.1% of IRSA CP. As of June 30, 2020, our holding in IRSA CP was 80.65%, and as of November 30, 2020, after the dividend payment in kind with IRSA CP shares, our holdingin IRSA CP was 79.92%.

Shopping Malls (through our subsidiary IRSA CP)

We are engaged in the acquisition, development and management of Shopping Malls through our subsidiary IRSA CP and its subsidiaries.

Since 1996, we have expanded our real estate activities in the shopping mall segment, through the acquisition and development of shopping malls.

As of June 30, 2020, through our subsidiary IRSA CP, we own 15 shopping malls in Argentina: Alto Palermo, Abasto Shopping, Alto Avellaneda, Alcorta Shopping, Patio Bullrich, Dot Baires Shopping, Soleil Premium Outlet, Distrito Arcos, Alto NOA Shopping, Alto Rosario Shopping, Mendoza Plaza Shopping, Córdoba Shopping Villa Cabrera, La Ribera Shopping, Alto Comahue Sopping and Patio Olmos (operated by a third party), totaling 333,062 sqm.

Offices (through our subsidiary IRSA CP)

We own, develop and manage office buildings throughout Argentina, directly and indirectly through our subsidiary IRSA CP.

During 2005, attractive prospects in office business led us to make an important investment in this segment by acquiring Bouchard 710 building in fiscal year 2005, covering 15,014 sqm of rentable premium space. On July 30, 2020, our subsidiary IRSA CP sold an unrelated third party of the entire building, located at Plaza Roma, in the City of Buenos Aires, for a total amount of USD 87.2 million approximately.

During 2007, we made several significant acquisitions in the Offices segment. We purchased Bouchard Plaza building, also known as “Edificio La Nación,” located in the downtown of the City of Buenos Aires, and during 2015, we completed the sale of all of the floors in Edificio La Nación. In 2007, we also bought Dock del Plata building with a gross leasable area of 7,921 sqm, located in the exclusive area of Puerto Madero, already sold in its entirety, in December 2015. In addition, we acquired a 50% interest in an office building including current leases with a gross leasable area of 31,670 sqm, known as Torre BankBoston, which is located in Buenos Aires, and was designed by the recognized architect Cesar Pelli (who also designed the World Financial Center in New York and the Petronas Towers in Kuala Lumpur).

In 2007, through Panamerican Mall S.A., subsidiary of IRSA CP, we started the construction of one of our most important projects called “Polo Dot,” a Shopping Mall, an Office Building and different plots of land to develop three additional office buildings (one of them may include a hotel). This project is located in Saavedra neighborhood, at the intersection of Avenida General Paz and the Panamerican Highway. First, the Shopping Mall Dot Baires was developed and opened on May, 2009 and then the Office Building was opened in July 2010, which meant our landing on the growing corridor of rental offices located in the North Zone of Buenos Aires. In addition, on June 5, 2017, the Company through IRSA CP, reported the acquisition of the historic Philips Building, adjacent to the Dot Baires Shopping Mall, located in Saavedra neighborhood in the City of Buenos Aires. It has 4 office floors, a total gross leasable area of approximately 7,755 sqm which has a remaining construction capacity of approximately 20,000 sqm. Likewise, through PAMSA, we developed the Zetta building, A+ and potentially LEED building, which was inaugurated on May, 2019, it has 11 office floors with a profitable area of 32,173 sqm, fully leased at the opening date.

In April 2008, we acquired one of the most emblematic building in the City of Buenos Aires, known as “Edificio República.” This property, also designed by the architect César Pelli, is a premium office building in the downtown area of the City of Buenos Aires, which added approximately 19,885 gross leasable sqm to our portfolio.

On December 22, 2014, we transferred to our subsidiary IRSA CP, 83,789 sqm of five buildings of our premium office portfolio and a reserve of land. The premium office buildings transferred included Edificio República, Torre Bank Boston, Edificio Intercontinental Plaza, Edificio Bouchard 710 and Edificio Suipacha and the land reserve “Intercontinental II” with the potential to develop up to 19,600 sqm, each located in the City of Buenos Aires. The acquisition was carried out as part of our strategy to expand our business of developing and operating commercial properties in Argentina and to create a unique and unified portfolio of rental properties consisting of the best office buildings in the City of Buenos Aires and the best shopping malls in Argentina. The total value of the transaction was USD 308.0 million, based on third party appraisals.

As of September 30, 2020, we own 8 premium office buildings of rental office property totaling 93,144 sqm of gross leasable area. On November 5, 2020, our subsidiary IRSA CP sold four floors and fifteen parking spaces of the Boston Tower and on November 12, 2020, it sold three floors and fifteen parking spaces of Boston Tower. For more information, see "Recent Developments – Boston Tower Floor’s sale" in our 2020 Form 20-F.

Sales and developments

Since 1996, we have also expanded our operations to the residential real estate market through the development and construction of apartment tower complexes in the City of Buenos Aires and through the development of private residential communities in the greater Buenos Aires.

We own an important 70-hectare property facing the Río de la Plata in the south of Puerto Madero, 10 minutes from downtown Buenos Aires, called “Solares de Santa María.” We are owners of this property in which we aim to develop an entrepreneurship for mixed purposes, i.e. our development project involves residential complexes as well as offices, stores, hotels, sports and sailing clubs, services areas with schools, supermarkets and parking lots. For more information regarding the status see “B. Business Overview - Sale and Development of Properties and Land Reserves - Mixed uses - Solares de Santa María – City of Buenos Aires.”

In March 2011, we bought the Nobleza Piccardo warehouse, through a subsidiary in which we have a 50% stake. This property is located in the city of San Martín, Province of Buenos Aires, and due to its size and location represents an excellent venue for the future development of different segments. The total plot area is 160,000 sqm. The master plan was carried out by the prestigious Gehl Studio (Denmark), generating a modern concept of a new urban district which is being carried out to a preliminary project / project phase through the Mc Cormack Architecture Studio and Associates and internal and external teams.

We are currently developing the project called “Polo Dot,” through PAMSA, subsidiary of IRSA CP, located in the commercial complex adjoining to Dot Baires Shopping Mall. The project will consist of three office buildings (one of them may include a hotel and recently opened Zetta building) on land reserves we own through IRSA CP and the expansion of Dot Baires Shopping by approximately 15,000 sqm of gross leasable area. In the first phase, we developed the Zetta building which was inaugurated on May 2019. The second stage of the project consists of two office/ hotel buildings that will add 38,400 sqm of GLA to the complex. We have noticed an important demand for premium office spaces in this new commercial center and we are confident that we will be able to generate a quality enterprise similar to the ones that the company has done in the past with attractive income levels and high occupancy.

Likewise, we are moving forward with the construction of Catalinas Building, which is expected to have approximately 35,000 sqm of gross leasable area consisting of 30 office floors and 316 parking spaces, and will be located in the “Catalinas” area in the City of Buenos Aires, one of the most sought after neighborhoods for premium office development in Argentina. IRSA CP acquired from us certain units in the building and owns 30,832 sqm consisting of 26 floors and 272 parking spaces in the building. On December 4, 2015, we sold to Globant 4,636 sqm corresponding to four office floors. Construction work started in late 2016, and is currently expected to be completed in approximately three years. IRSA CP reported with an unrelated third party the assignment and transfer of the right to deed with delivery of possession of two medium-height floors for a total area of approximately 2,430 sqm and 16 parking spaces units in the building. As of June 30, 2020, we had completed 95% of the construction work.

On March 22, 2018 we acquired through IRSA CP, directly and indirectly, 100% of a land of approximately 78,000 sqm of surface located in Camino General Belgrano, between 514 street, avenue 19 and 511 street, in La Plata, Province of Buenos Aires. The objective of this acquisition is to develop a mix uses project given that the land offers location and scale adequate characteristics for the commercial development in a place of great potential.

On July 2018, we acquired through IRSA CP “La Maltería S.A.,” a wholly-owned subsidiary of IRSA CP which is directly or indirectly controlled by the company in a 100%, a property of 147,895 sqm of surface and approximately 40,000 sqm of built surface known as “Maltería Hudson,” located in the intersection between Route 2 and Buenos Aires - La Plata highway, main connection route to the south of Greater Buenos Aires and the Atlantic Coast, in the City of Hudson, province of Buenos Aires. The purpose of this acquisition is the future development of a mixed-use project, with a total constructive capacity of approximately 177.000 sqm, given that the property has location and scale characteristics for a real estate development with great potential.

Hotels

In 1997, we entered the hotel market through the acquisition of a 50% interest in the Llao Llao Hotel near Bariloche Province of Rio Negro and 76.3% in the Intercontinental Hotel in the City of Buenos Aires. In 1998, we also acquired Libertador Hotel in the City of Buenos Aires and subsequently sold a 20% interest in it to an affiliate of Sheraton Hotels, and during the fiscal year 2019, we acquired the interest of 20% and reaching 100% of the capital of Hoteles Argentinos S.A.U and beginning to operate the hotel directly under the name “Libertador.”

International

In July 2008, we decided to expand internationally into the United States, taking advantage of certain investment opportunities generated after the global financial crisis. We acquired a 49% interest in Metropolitan 885 3rd Ave (“Metropolitan”), whose main asset is a 34-story building with 59,000 sqm of gross leasable area named Lipstick Building, located at 885 Third Avenue, New York. On August 7, 2020, as a consequence of negotiations conducted in the context of an increased lease price effective as of May 2020, Metropolitan signed an agreement with the owner of the Ground Lease to terminate the commercial relationship, leaving the administration of the building. For this reason, as of June 30, 2020, Metropolitan no longer recognizes the liability associated with the ground lease, as well as all the assets and liabilities associated with the building and the operation of the administration. For more information see “Recent Developments – Lipstick Building.”

In March 2012, we entered into an agreement with Supertel Hospitality Inc. whereby we invested approximately USD 20 million. In 1994, Supertel Hospitality Inc completed its initial public offering, and in 2015 changed its name to “Condor Hospitality Trust” (“Condor”). Condor is a REIT listed in Nasdaq focused on medium-class hotels located in various states of the United States of America, managed by various operators and franchises. As of June 30, 2020, we hold an 18.9% interest and voting rights in Condor. The Company entered into an agreement to sell such shares, whose sale process has been delayed. For more information see “Investment in Condor Hospitality Trust”

Others

Over the years, we have acquired 29.91% of Banco Hipotecario. Banco Hipotecario has historically been Argentina’s leading mortgage lender, provider of mortgage-related insurance and mortgage loan services.

Significant acquisitions, dispositions and development of business

Boston Tower Sale

On July 15, 2020, IRSA CP entered into a preliminary sale agreement (with delivery of possession) with respect to a medium-height floor from Boston tower located at Della Paolera 265, Catalinas district, City of Buenos Aires, covering a total area of approximately 1,063 sqm and 5 parking lots located in the building. The price of the transaction was ARS 477.7 million (USD 6.7 million), which has been paid in full.

On August 26, 2020, IRSA CP entered into a preliminary sale agreement (with delivery of possession) with respect to 5 floors from Boston tower located at Della Paolera 265, Catalinas district, City of Buenos Aires, covering a total area of approximately 6,235 sqm and 25 parking lots located in the building. The price of the transaction was ARS 2,562 million (USD 34.7 million), which has been paid in full.

Bouchard Sale

On July 30, 2020, IRSA CP sold the entire “Bouchard 710” building, located in the Plaza Roma district of the City of Buenos Aires. The tower has a gross leasable area of 15,014 sqm divided into 12 floors for office use and 116 parking lots. The price of the transaction was approximately ARS 6,300 million (USD 87 million), which has been paid in full.

Lipstick Building, New York, United States

On August 7, 2020, Metropolitan signed an agreement with the owner of the ground lease by which it terminated the relationship, leaving the administration of the building. For this reason, Metropolitan derecognized the liabilities associated with the ground lease, as well as all the assets and liabilities associated with the building and the administration of the building; and made an agreement with the owner of the ground lease that states that Metropolitan is completely released from responsibilities, except for (i) claims for liabilities prior to June 1, 2020 from people who have performed work or provided services in the building or to Metropolitan and (ii) claims from people who have had an accident on the property dated after August 7, 2020. The impact of this agreement was recognized in the Audited Consolidated Financial Statements.

Condor Merger Agreement

On July 19, 2019, Condor entered into a merger agreement with Nextponint Hospitality Trust. In accordance with the contractual terms, each Condor common share, with a par value of USD 0.01 per share, was canceled prior to the merger and became the right to receive a cash amount equivalent to USD 11.10 per share. ordinary action. Additionally, in accordance with the terms and conditions of the merger agreement, each Class E convertible share was automatically canceled and became the right to receive a cash amount equivalent to USD 10.00 per share. The closing of the transaction, which had been scheduled for March 23, 2020, did not occur.

On October 14, 2020, Condor entered into an agreement with Nextponint Hospitality Trust and some of its affiliates "(NHT Parties)" to resolve any and all claims between them related to the aforementioned merger agreement.

Under the agreement with NHT, the Parties will make three payments to Condor in three installments, with the last payment maturing on December 30, 2020 and for a total of USD 7.0 million.

As of September 30, 2020, the Company has 2,245,100 ordinary shares and 325,752 Series E shares of Condor.

Loss of control of IDBD

As described in “Presentation of Financial and Certain Other Information” on September 25, 2020, IRSA lost control of IDBD, deconsolidating the related assets and liabilities and reclassifying the operations from this operations center to discontinued operations.

The following table details the net assets disposed of:

	As<br>of September 30, 2020
ASSETS
	(In millions of ARS)
Investment<br>properties	84,251
Property, plant and<br>equipment	34,396
Trading<br>properties	5,512
Intangible<br>assets	26,194
Right-of-use<br>assets	18,530
Investments in<br>associates and joint<br>ventures	34,721
Deferred income tax<br>assets	407
Income tax<br>credit	305
Restricted<br>assets	6,021
Trade and other<br>receivables	50,669
Investments in<br>financial<br>assets	22,680
Derivative<br>financial<br>instruments	264
Inventories	3,377
Group of assets<br>held for<br>sale	39,441
Cash and cash<br>equivalents	104,164
TOTAL<br>ASSETS	430,932
Borrowings	305,070
Lease<br>liabilities	16,984
Deferred income tax<br>liabilities	11,655
Trade and other<br>payables	22,782
Income tax<br>liabilities	427
Provisions	5,085
Employee<br>benefits	447
Derivative<br>financial<br>instruments	447
Salaries and social<br>security<br>liabilities	3,173
Group of<br>liabilities held for<br>sale	20,646
TOTAL<br>LIABILITIES	386,716
TOTAL<br>NET<br>ASSETS	44,216
Non-controlling<br>interest	(43,846)
Result<br>for loss of<br>control	370
Recycling of<br>currency translation adjustment and other<br>reserves	(3,252)
Total<br>result for loss of control<br>(*)	(2,882)

(*) included within discontinued operations

Recent Developments:

Sale of Manibil

On December 22, 2020, IRSA reported that it had sold and transferred 217,332,873 ordinary Class B shares, nominative not endorsable, with a nominal value of ARS 1 and entitled to one vote per share owned by IRSA, representing 49% of the stock capital of Manibil S.A., a company dedicated to real estate developments. The price for the sale of the shares amounts to ARS 576,974,387.50. After this transaction, IRSA is no longer a shareholder of Manibil S.A. As a repayment of the sale price of the shares, the Company received rights to acquire future real estate assets from Manibil.

Change of Corporate Headquarters

On December 21 2020, IRSA reported that the Company has moved its offices from Bolívar 108, 1st Floor, City of Buenos Aires, to Carlos Della Paolera 261, 9th Floor, City of Buenos Aires. On December 9, 2020, IRSA CP reported that it has moved its offices from Moreno 877, 22 Floor, City of Buenos Aires, to Carlos Della Paolera 261, 8th Floor, City of Buenos Aires.

Termination of Contract with SP

IRSA reported that on November 25, 2020, they requested the termination of the rating services provided by Standard & Poor’s (“Standard & Poor’s”) to IRSA on a global scale and on a national scale for Argentina, given the repayment and cancellation of all of the Company’s New York-law governed debt securities. The Company had no disagreements with respect to the methodology used by Standard & Poor’s. The rating of the Company’s debt securities on a national scale undertaken by Fix SCR S.A. continues to be in force. Fix SCR S.A. is affiliated with Fitch Ratings.

Change of Company’s corporate headquarters –IRSA CP

On December 9, 2020, IRSA CP reported that the Company has moved its offices from Moreno 877, 22 Floor, City of Buenos Aires, to Carlos Della Paolera 261, 8 Floor, City of Buenos Aires.

Shareholders’ Meeting– IRSA CP

On December 9, 2020, IRSA CP’s informs that the Shareholders’ Meeting has resolved to move its corporate headquarters from Moreno 877 to Carlos Della Paolera 261.

Business Overview

Operations and principal activities

Founded in 1943, IRSA Inversiones y Representaciones Sociedad Anónima is one of Argentina’s leading real estate companies and the only Argentine real estate company whose shares are listed both on BYMA and on the NYSE.

We are engaged, directly and indirectly through subsidiaries and joint ventures, in a range of diversified activities, primarily in real estate, including:

i. the acquisition, development and operation of shopping malls,

ii. the acquisition and development of office buildings and other non-shopping mall properties primarily for rental purposes,

iii. the development and sale of residential properties,

iv. the acquisition and operation of luxury hotels,

v. the acquisition of undeveloped land reserves for future development or sale, and

vi. selective investments outside Argentina.

We operate our business in Argentina through seven segments, namely “Shopping Malls,” “Offices” “Sales and Developments,” “Hotels,” “International” and “Corporate” and “Others” as further described below:

Our “Shopping Malls” segment includes the operating results from our portfolio of shopping malls principally comprised of lease and service revenue from tenants. Our Shopping Malls segment had assets of ARS 54,406 million and ARS 55,279 million as of September 30, 2020 and 2019, respectively, representing 29.41% and 29.88% of our operating assets for the Operations Center in Argentina at such dates, respectively. Our Shopping Malls segment generated operating income of ARS 986 million and of ARS 2,082 million for the three-month periods ended September 30, 2020 and 2019, respectively.

Our “Offices” segment includes the operating results from lease revenues of offices, other rental spaces and other service revenues related to the office activities. Our Offices segment had assets of ARS 72,262 million and ARS 40,970 million as of September 30, 2020 and 2019, respectively, representing and 39.06% and 22.14% of our operating assets for the Operations Center in Argentina at such dates, respectively. Our Offices segment generated an operating income of ARS 13,483 million and of ARS 7,413 million for the three-months periods ended September 30, 2020 and 2019, respectively.

Our “Sales and Developments” segment includes the operating results of the development, maintenance and sales of undeveloped parcels of land and/or trading properties. Real estate sales results are also included. Our Sales and Developments segment had assets of ARS 45,273 million and ARS 36,352 million as of September 30, 2020 and 2019, respectively, representing 24.47% and 19.65% of our operating assets for the Operations Center in Argentina. Our Sales and Developments segment generated an operating income of ARS 9,661 million and of ARS 5,045 million for the three-month periods ended September 30, 2020 and 2019, respectively, without considering the share of profit of associates and joint ventures.

Our “Hotels” segment includes the operating results of our hotels mainly comprised of room, catering and restaurant revenues. Our Hotels segment had assets of ARS 1,954 million and ARS 2,155 million as of September 30, 2020 and 2019, respectively, representing 1.06% and 1.16% of our operating assets for the Operations Center in Argentina, respectively. Our Hotels segment generated an operating loss of ARS 191 million and an operating income of ARS 84 million for the three-month periods ended September 30, 2020 and 2019, respectively.

Our “International” segment includes investments that mainly operate in the United States in relation to the lease of office buildings and hotels in that country. We intend to continue evaluating investment opportunities outside Argentina as long as they are attractive investment and development options. Our International segment had assets of ARS 1,884 million and net liabilities of ARS 9,269 million as of September 30, 2020 and 2019, respectively. Our International segment generated operating income of ARS 11 million an operating loss of ARS 43 million for the three-month periods ended September 30, 2020 and 2019, respectively.

Our “Corporate” segment. Since fiscal year 2019, we have decided to disclose certain corporate expenses related to the holding structure in a separate “Corporate” segment. This segment generated a loss of ARS 74 million and ARS 88 million during the three-month periods ended September 30, 2020 and 2019, respectively.

Our “Others” Segment includes the entertainment activities through La Arena and La Rural S.A. and the financial activities carried out by Banco Hipotecario for both years and Tarshop S.A. (“Tarshop”) just for 2020. Our “Others” segment had assets of ARS 9,241 million and ARS 7,357 million as of September 30, 2020 and 2019, respectively, representing 4.99 and 3.98% of our operating assets for the Operations Center in Argentina, respectively. Our Others segment generated an operating income of ARS 492 million and of ARS 257 million for the three-month periods ended September 30, 2020 and 2019, respectively, without considering share of profit of associates and joint ventures.

Our “Shopping Malls” segment includes the operating results from our portfolio of shopping malls principally comprised of lease and service revenue from tenants. Our Shopping Malls segment had assets of ARS 53,165 million and ARS 54,277 million as of June 30, 2020 and 2019, respectively, representing 31.2% and 45.2% of our operating assets for the Operations Center in Argentina at such dates, respectively. Our Shopping Malls segment generated operating income of ARS 1,818 million and an operating loss ARS 37,033 million for the fiscal years ended June 30, 2020 and 2019, respectively.

Our “Offices” segment includes the operating results from lease revenues of offices, other rental spaces and other service revenues related to the office activities. Our Offices segment had assets of ARS 67,827 million and ARS 34,166 million as of June 30, 2020 and 2019, respectively, representing and 39.8% and 28.4% of our operating assets for the Operations Center in Argentina at such dates, respectively. Our Offices segment generated an operating income of ARS 27,099 million and of ARS 2,553 million for the fiscal years ended June 30, 2020 and 2019, respectively.

Our “Sales and Developments” segment includes the operating results of the development, maintenance and sales of undeveloped parcels of land and/or trading properties. Real estate sales results are also included. Our Sales and Developments segment had assets of ARS 36,018 million and ARS 30,558 million as of June 30, 2020 and 2019, respectively, representing 21.1% and 25.4% of our operating assets for the Operations Center in Argentina. Our Sales and Developments segment generated an operating income of ARS 12,694 million and of ARS 680 million for the fiscal years ended June 30, 2020 and 2019, respectively, without considering the share of profit of associates and joint ventures.

Our “Hotels” segment includes the operating results of our hotels mainly comprised of room, catering and restaurant revenues. Our Hotels segment had assets of ARS 1,979 million and ARS 2,075 million as of June 30, 2020 and 2019, respectively, representing 1.2% and 1.7% of our operating assets for the Operations Center in Argentina, respectively. Our Hotels segment generated an operating income of ARS 172 million and of ARS 725 million for the fiscal years ended June 30, 2020 and 2019, respectively.

Our “International” segment includes investments that mainly operate in the United States in relation to the lease of office buildings and hotels in that country. We intend to continue evaluating investment opportunities outside Argentina as long as they are attractive investment and development options. Our International segment had assets of ARS 2,488 million and net liabilities of ARS 7,484 million as of June 30, 2020 and 2019, respectively. Our International segment generated operating losses of ARS 119 million and ARS 129 million for the fiscal years ended June 30, 2020 and 2019, respectively.

“Corporate” segment. Since fiscal year 2019, we have decided to disclose certain corporate expenses related to the holding structure in a separate “Corporate” segment. This segment generated a loss of ARS 304 million and ARS 560 million during fiscal years 2020 and 2019, respectively.

Our “Others” Segment includes the entertainment activities through La Arena and La Rural S.A. and the financial activities carried out by Banco Hipotecario for both years and Tarshop S.A. (“Tarshop”) just for 2019. Our “Others” segment had assets of ARS 8,902 million and ARS 6,510 million as of June 30, 2020 and 2019, respectively, representing 5.2% and 5.4% of our operating assets for the Operations Center in Argentina, respectively. Our Others segment generated an operating income of ARS 596 million and an operating loss of ARS 844 million for the fiscal years ended June 30, 2020 and 2019, respectively, without considering share of profit of associates and joint ventures.

Operations Center in Argentina

Shopping Malls

As of September 30, 2020, IRSA CP owned a majority interest in and operated, a portfolio of 15 shopping malls in Argentina, six of which are located in the City of Buenos Aires (Abasto, Alcorta Shopping, Alto Palermo Shopping, Patio Bullrich, Dot Baires Shopping and Distrito Arcos), two are located in the greater Buenos Aires area (Alto Avellaneda and Soleil Premium Outlet), and the rest are located in different provinces of Argentina (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 and Patio Olmos (operated by a third party) in the City of Córdoba, La Ribera Shopping in Santa Fe (through a joint venture) and Alto Comahue in the City of Neuquén).

The shopping malls we operate comprise a total of 333,345 sqm of GLA (excluding certain spaces occupied by hypermarkets which are not our tenants). Total tenant sales in our shopping malls, as reported by retailers, were ARS 75,321 million for fiscal year 2020 and ARS 101,665 million for fiscal year 2019, a decrease of 25.9% in real terms (+6.7% in nominal terms). The greatest impact of this drop was evidenced in the first quarter of the year because of the closure of operations due to the lockdown decreed in Argentina on March 20, 2020 as a consequence of COVID19. Tenant sales at our shopping malls are relevant to our revenues and profitability because it is an important factor in determining rent our tenants pay. Sales also affect tenant’s overall occupancy costs as a percentage of that tenant’s sales.

The following table shows certain information about IRSA CP’s shopping malls as of September 30, 2020:

Shopping<br>malls	Date<br>of acquisition/<br><br><br><br><br><br>development	Location	GLA<br>(sqm)(1)	Number<br>of stores	Occupancy<br>rate(2)	Our<br>ownership interest(3)	Rental<br>revenue
					(%)	(%)	(in<br>million of ARS )
Alto<br>Palermo	Dec-97	City of Buenos<br>Aires	18,655	136	94.5	100	69
Abasto<br>Shopping(4)	Nov-99	City of Buenos<br>Aires	36,761	163	94.6	100	28
Alto<br>Avellaneda	Dec-97	Buenos Aires<br>Province	38,801	126	96.2	100	8
Alcorta<br>Shopping	Jun-97	City of Buenos<br>Aires	15,725	114	97.4	100	24
Patio<br>Bullrich	Oct-98	City of Buenos<br>Aires	11,396	89	89.7	100	(7)
Dot Baires<br>Shopping	May-09	City of Buenos<br>Aires	48,805	164	71.7	80	10
Soleil Premium<br>Outlet	Jul-10	Buenos Aires<br>Province	15,156	79	95.9	100	16
Distrito<br>Arcos	Dec-14	City of Buenos<br>Aires	14,335	65	100.0	90	26
Alto Noa<br>Shopping	Mar-95	City of<br>Salta	19,313	85	96.6	100	31
Alto Rosario<br>Shopping(4)	Nov-04	City of<br>Rosario	33,682	140	98.3	100	83
Mendoza Plaza<br>Shopping	Dec-94	City of<br>Mendoza	43,123	127	96.0	100	39
Córdoba<br>Shopping	Dec-06	City of<br>Córdoba	15,361	104	98.1	100	29
La Ribera<br>Shopping	Aug-11	City of Santa<br>Fé	10,530	70	97.4	50	2
Alto<br>Comahue	Mar-15	City of<br>Neuquén	11,702	95	93.9	99.95	67
Patio<br>Olmos(5)	Sep-07	City of<br>Córdoba	—	—	—	—	—
Total			333,345	1,557	92.8		425

(1)

Corresponds to gross leasable area in each property. Excludes common areas and parking spaces.

(2)

Calculated dividing occupied sqm by leasable area as of the last day of the fiscal year.

(3)

Company’s effective interest in each of its business units.

(4)

Excludes Museo de los Niños (which represents 3,732 sqm in Abasto and 1,261 sqm in Alto Rosario).

(5) IRSA CP owns the historic building of the Patio Olmos shopping mall in the Province of Córdoba, operated by a third party and does not include the rental revenues of Patio Olmos, for more details see “Accumulated rental income”.

The following table shows information about IRSA CP’s future expansions on current assets as of September 30, 2020:

Expansions	Ownership<br>interest	Surface	Locations
	(%)	(sqm)
Alto Palermo<br>Adjoining Plot	100	3,900	City of Buenos<br>Aires
Subtotal<br>current expansions		3,900
Other future<br>expansions(1)		98,055
Subtotal<br>future expansions		98,055
Total<br>Shopping Malls		101,955
Patio Bullrich -<br>Offices / Hotel	100	10,000	City of Buenos<br>Aires
Philips<br>Building	100	20,000	City of Buenos<br>Aires
Subtotal<br>future expansions		30,000
Total<br>offices		30,000
Total<br>expansions		131,955

(1) Includes Alto Palermo, Paseo Alcorta, Alto Avellaneda, Soleil, Alto Noa, Alto Rosario, Mendoza, Córdoba y La Ribera Shopping

Rental income

The following table sets forth total rental income for each of IRSA CP’s shopping malls for the fiscal years indicated:

	As<br>of September 30,		For<br>the fiscal years ended June 30,(1)
	2020	2019	2020	2019	2018
	(in<br>millions of ARS)
Alto<br>Palermo	69	340	1,073	1,516	1,631
Abasto<br>Shopping	28	312	919	1,412	2,196
Alto<br>Avellaneda	8	213	646	1,015	1,140
Alcorta<br>Shopping	24	171	573	746	791
Patio<br>Bullrich	(7)	101	332	434	458
Dot Baires<br>Shopping	10	230	703	1,196	1,170
Soleil Premium<br>Outlet	16	95	267	395	414
Distrito<br>Arcos	26	174	494	680	667
Alto Noa<br>Shopping	31	70	199	267	300
Alto Rosario<br>Shopping	83	168	560	735	788
Mendoza Plaza<br>Shopping	39	101	318	441	483
Córdoba<br>Shopping Villa Cabrera	29	63	191	265	293
La Ribera<br>Shopping(2)	2	21	64	94	99
Alto<br>Comahue	67	108	406	451	389
Subtotal	425	2,167	6,742	9,646	10,823
Patio<br>Olmos(3)	2	3	8	11	11
Adjustments and<br>eliminations(4)	(58)	(83)	(362)	(463)	(337)
Total	369	2,087	6,389	9,195	10,496

(1) Includes base rent, percentage rent, admission rights, fees, parking, commissions, revenue from non-traditional advertising and others. Does not include Patio Olmos.

(2) Through our joint venture Nuevo Puerto Santa Fé S.A.

(3) IRSA CP owns the historic building where the Patio Olmos shopping mall is located in the province of Cordoba. The property is managed by a third party.

(4) Includes indirect incomes and eliminations between segments. In 2019 and 2018, revenue from Buenos Aires Design are included. End of concession December 5, 2018.

The following table sets forth IRSA CP’s revenue from cumulative leases by revenue category for the fiscal years presented:

	As<br>of September 30,		For<br>the fiscal year ended June 30,
	2020	2019	2020	2019	2018
	(in<br>millions of ARS)
Base<br>rent	123	1,128	3,367	5,146	6,053
Percentage<br>rent	63	499	1,584	1,915	2,006
Total<br>rent	186	1,627	4,951	7,061	8,059
Non-traditional<br>advertising	33	56	198	239	264
Revenues from<br>admission rights	146	263	972	1,131	1,251
Fees	25	29	113	127	149
Parking	3	122	319	509	615
Commissions	29	56	167	346	462
Other	3	15	23	233	24
Subtotal(1)	425	2,168	6,742	9,646	10,823
Patio<br>Olmos	2	2	8	11	11
Adjustments and<br>eliminations(2)	(58)	(83)	(362)	(463)	(337)
Total	369	2,087	6,389	9,195	10,496

(1) Does not include Patio Olmos

(2) Includes indirect incomes and eliminations between segments. In 2019 and 2018, revenues from Buenos Aires Design are included. End of concession December 5, 2018.

Tenant retail sales

For the 2020 fiscal year, IRSA CP’s shopping mall tenants’ sales reached ARS 75,321 million, a decrease of 25.9% in real terms compared to the previous fiscal year (+6,7% in nominal terms).

Tenant sales at the shopping malls located in the City of Buenos Aires and Greater Buenos Aires recorded year-on-year decreases of 26.9% in real terms (+5.0% in nominal terms), up from ARS 70,411 million to ARS 51,464 million during fiscal year 2020, whereas shopping malls in the interior of Argentina decreased approximately 23.7% in real terms (+10.4% in nominal terms) in comparison with the previous fiscal year, from ARS 31,254 million to ARS 23,856 million during fiscal year 2020.

The following table sets forth the total retail sales of IRSA CP’s shopping mall tenants for the fiscal years indicated:

	As<br>of September 30,(1)		For<br>the fiscal years ended June 30,(1)
	2020	2019	2020	2019	2018
	(in<br>millions of ARS)
Alto<br>Palermo	127	3,116	9,191	12,472	13,783
Abasto<br>Shopping	94	3,231	9,346	13,228	15,546
Alto<br>Avellaneda	92	2,829	8,258	11,862	14,955
Alcorta<br>Shopping	17	1,765	5,480	7,035	7,535
Patio<br>Bullrich	168	1,193	3,728	4,622	4,177
Buenos Aires<br>Design(1)	—	—	—	605	1,922
Dot Baires<br>Shopping	83	2,390	7,341	10,137	12,863
Soleil Premium<br>Outlet	184	1,377	3,814	5,443	6,098
Distrito<br>Arcos	500	1,491	4,307	5,007	5,026
Alto Noa<br>Shopping	653	1,099	3,739	4,491	5,425
Alto Rosario<br>Shopping	1,230	2,509	7,783	9,997	11,152
Mendoza Plaza<br>Shopping	1,226	1,971	6,075	7,969	9,412
Córdoba<br>Shopping Villa Cabrera	506	771	2,396	3,261	3,856
La Ribera<br>Shopping(2)	142	572	1,589	2,333	2,824
Alto<br>Comahue	152	799	2,274	3,204	3,510
Total	5,174	25,113	75,321	101,665	118,083

(1) Retail sales based upon information provided to us by retailers and prior owners. The amounts shown reflect 100% of the retail sales of each shopping mall, although in certain cases we own less than 100% of such shopping malls. Includes sales from stands and excludes spaces used for special exhibitions.

(2) End of concession term was December 5, 2018

(3) Owned by Nuevo Puerto Santa Fé S.A., in which we are a joint venture partner.

Total sales by type of business

The following table sets forth the retail sales of IRSA CP’s shopping mall tenants by type of business for the fiscal years indicated:

	As<br>of September 30,(1)		For<br>the fiscal years ended June 30,(1)
	2020	2019	2020	2019	2018
	(in<br>millions of ARS)
Department<br>Store	381	1,327	4,009	5,502	6,771
Clothes and<br>footwear	2,477	13,575	41,203	56,492	61,600
Entertainment	—	1,047	2,311	3,408	3,665
Home and<br>decoration	143	493	1,541	2,258	3,306
Home<br>Appliances	452	3,065	8,494	11,387	13,020
Restaurants	939	3,140	10,764	12,744	13,947
Miscellaneous	23	296	866	1,213	1,274
Services	759	2,170	6,133	8,661	14,501
Total	5,174	25,113	75,321	101,665	118,083

(1) Includes sales from stands and excludes spaces used for special exhibitions.

Occupancy rate

The following table sets forth the occupancy rate of IRSA CP’s shopping malls expressed as a percentage of gross leasable area of each shopping mall for the fiscal years indicated:

	As<br>of September 30,(1)		As<br>of June 30,(1)
	2020	2019	2020	2019	2018
	(%)
Alto<br>Palermo	94.5	98.1	91.9	99.1	99.5
Abasto<br>Shopping	94.6	97.7	94.9	98.7	99.1
Alto<br>Avellaneda	96.2	99.1	97.4	98.6	98.9
Alcorta<br>Shopping	97.4	98.1	97.3	97.9	99.8
Patio<br>Bullrich	89.7	94.7	91.4	93.5	97.1
Dot Baires<br>Shopping	71.7	75.6	74.6	74.5	99.5
Soleil Premium<br>Outlet	95.9	98.9	97.1	99.0	97.7
Distrito<br>Arcos	100.0	94.5	93.8	99.4	99.7
Alto Noa<br>Shopping	99.6	97.2	99.0	99.5	96.8
Alto Rosario<br>Shopping	98.3	99.8	97.2	99.6	99.5
Mendoza Plaza<br>Shopping	96.0	95.0	97.8	97.3	98.3
Córdoba<br>Shopping Villa Cabrera	98.1	99.9	95.4	99.3	100.0
La Ribera<br>Shopping	97.4	95.7	99.0	94.6	94.9
Alto<br>Comahue	93.9	96.9	96.2	96.2	94.4
Total (1)	92.8	94.3	93.2	94.7	98.5

(1) As of September 30, 2020, the occupancy rate decreased mainly due to 12,600 sqm vacancy generated by Walmart in Dot Baires Shopping. Excluding this effect, the occupancy would have been 96.4%.

Rental price

The following table shows the annual average rental price per sqm of our shopping malls for the fiscal years indicated:

	As<br>of September 30,(1)		As<br>of June 30,(1)
	2020	2019	2020	2019	2018
	(en<br>ARS)
Alto<br>Palermo	1,570	12,722	38,255	55,615	62,034
Abasto<br>Shopping	(82)	6,230	17,412	27,113	36,409
Alto<br>Avellaneda	(477)	4,477	12,464	20,817	24,609
Alcorta<br>Shopping	353	7,576	24,507	32,923	35,654
Patio<br>Bullrich	(1,482)	5,823	19,220	25,229	26,674
Dot Baires<br>Shopping	(188)	3,258	9,663	14,328	16,280
Soleil Premium<br>Outlet	487	5,096	13,674	21,277	23,379
Distrito<br>Arcos	1,450	10,203	26,975	39,130	39,393
Alto Noa<br>Shopping	1,266	3,224	8,766	11,703	13,785
Alto Rosario<br>Shopping	1,779	4,036	12,940	17,686	19,629
Mendoza Plaza<br>Shopping	663	2,013	5,953	8,486	9,814
Córdoba<br>Shopping Villa Cabrera	1,501	3,293	9,751	14,071	16,015
La Ribera<br>Shopping	39	1,766	4,869	7,336	8,199
Alto<br>Comahue	5,392	8,510	32,979	31,830	38,722

(1) Corresponds to consolidated annual accumulated rental prices according to the IFRS divided by gross leasable sqm. Does not include revenues from Patio Olmos.

Lease expirations(1)(2)

Includes information as of June 30, 2020 due to the fact that, during the first quarter ended on September 30, 2020, a large portion of our shopping centers were unable to open to the public or did so with under sanitary restrictions, as provided by DNU 297/2020 and subsequent extensions, which made it impossible to renew expired rental contracts and/or to sign new contracts.

The following table sets forth the schedule of estimated lease expirations for our shopping malls for leases in effect as of June 30, 2020, assuming that none of our tenants exercises its option to renew or terminate its lease prior to expiration:

	As<br>of June 30, 2020
Agreements’<br>Expiration	Number<br>of agreements(1)	Sqm<br>to expire	Due<br>to expire (%)	Total<br>lease payments (in millions of ARS)(3)	Agreements<br>(%)
Vacant<br>Stores	113	22,684	6.8
Expired<br>in-force	246	53,600	16.1	486	18.4
As of June 30,<br>2021	424	68,355	20.5	763	28.9
As of June 30,<br>2022	383	48,719	14.6	589	22.3
As of June 30,<br>2023	278	38,916	11.7	418	15.8
As of June 30, 2024<br>and subsequent years	118	100,788	30.3	383	14.5
Total	1,562	333,062	100.0	2,639	100.0

(1) Includes vacant stores as of June 30, 2020. A lease may be associated with one or more stores.

(2) Does not reflect our ownership interest in each property.

(3) The amount expresses the annual base rent as of June 30, 2020 of agreements due to expire.

Five largest tenants of the portfolio

Includes information as of June 30, 2020 due to the fact that, during the quarter ended on September 30, 2020, a large portion of our shopping centers were unable to open to the public or did so under sanitary restrictions, as provided by DNU 297/2020 and subsequent extensions, which made it impossible to renew expired rental contracts and/or to sign new contracts.

The five largest tenants of the portfolio (in terms of sales) account for approximately 16.6% of their gross leasable area as of June 30, 2020 and represent approximately 9.8% of the annual basic rent for the fiscal year ending on that date.

The following table describes our portfolio’s five largest tenants:

Tenant	Type<br>of Business	Sales	Gross<br>Leaseable Area	Gross<br>Leaseable Area
		(%)	(sqm)	(%)
Zara	Clothes and<br>footwear	7.5	10,771	3.2
Falabella	Department<br>store	5.4	28,892	8.7
Nike	Clothes and<br>footwear	4.0	7,610	2.3
Fravega	Home<br>appliances	3.2	3,524	1.1
Mc<br>Donald’s	Restaurant	2.5	4,400	1.3
Total		22.5	55,197	16.6

New leases and renewals

The following table shows certain information about IRSA CP’s leases agreement as of June 30, 2020:

	Number<br>of agreements renewed	Annual<br>base rent (in millions of ARS)	Annual<br>admission rights (in millions of ARS)	Average<br>annual base rent per sqm (ARS)		Number<br>of non-renewed agreements(1)	Non-renewed<br>agreements(1) annual base<br>rent amount (in millions of ARS)
Type<br>of business				New<br>and renewed	Former<br>agreements
Clothing and<br>footwear	268	478	95	12,781	10,103	578	1,122
Restaurant	72	107	15	13,466	11,877	130	226
Miscellaneous(2)	56	112	26	6,741	25,798	147	318
Home	32	61	8	8,484	9,762	54	128
Services	28	47	4	8,636	10,927	12	59
Entertainment	11	19	0	1,224	1,455	14	73
Supermarket	1	5	0	1,222	2,950	1	9
Total	468	829	148	7,057	8,123	936	1,935

(1) Includes vacant stores as of June 30, 2020. Gross leasable area with respect to such vacant stores is included under the type of business of the last tenant to occupy such stores.

(2) Miscellaneous includes anchor store.

Principal Terms of our Leases

Under the Civil and Commercial Code of Argentina, the term of our leases cannot exceed twenty years for the residential destination and fifty years for the other destinations.

Leasable space in our shopping malls is marketed through an exclusive arrangement with our wholly owned subsidiary and real estate broker Fibesa S.A., or “Fibesa.” We use a standard lease agreement for most tenants at our shopping malls, the terms and conditions of which are described below. However, our largest or “anchor” tenants generally negotiate better terms for their respective leases. No assurance can be given that lease terms will be as set forth in the standard lease agreement.

Rent amount specified in our leases generally is the higher of (i) a monthly Base Rent and (ii) a specified percentage of the tenant’s monthly gross sales in the store, which generally ranges between 3% and 12% of tenant’s gross sales. In addition, pursuant to the rent escalation clause in most of our leases, a tenant’s Base Rent generally increases between 18% and 28% on a semi-annually and cumulative basis from the thirteenth (13th) month of effectiveness of the lease. Although many of our lease agreements contain price adjustment provisions, these are not based on an official index nor do they reflect the inflation index. In the event of litigation, there can be no assurance that we will be able to enforce such clauses contained in our lease agreements. These terms and conditions have not been applied during a period when the shopping malls remained closed due to the Social, Preventive and Mandatory Isolation decreed by the government of Argentina as a result of the novel COVID-19 virus since IRSA CP decided to defer the billing and collection of the Base Rent until September 30, 2020, with some exceptions and IRSA CP alsos suspended collection of the collective promotion fund during the same period, prioritizing the long-term relationship with its tenants.

In addition to rent, we charge most of our tenants an admission right, which must be paid upon execution of the lease agreement and upon its renewal. The admission right is normally paid as a lump sum or in a small number of monthly installments. If the tenants pay this fee in installments, the tenants are responsible for paying the balance of any such unpaid amount if they terminate the lease prior to its expiration. In the event of unilateral termination and/or resolution for breach by the tenants, tenants will not be refunded their admission payment without our consent. We lease our stores, kiosks and spaces in our shopping malls through our wholly-owned subsidiary Fibesa. We charge our tenants a fee for the brokerage services, which usually amounts to approximately three months of the Base Rent plus the admission right.

We are responsible, except in the mall Distrito Arcos, for providing each unit within our shopping malls with electricity, a main telephone switchboard, central air conditioning and a connection to a general fire detection system. We also provide the food court tenants with sanitation and with gas systems connections. In Distrito Arcos, the connections are managed by the tenants. Each tenant is responsible for completing all necessary installations within its rental unit, in addition to paying direct related expenses, including electricity, water, gas, telephone and air conditioning. Tenants must also pay for a percentage of total expenses and general taxes related to common areas. We determine this percentage based on different factors. The common area expenses include, among others, administration, security, operations, maintenance, cleaning and taxes.

We carry out promotional and marketing activities to draw consumer traffic to our shopping malls. These activities are paid for with the tenants’ contributions to the Collective Promotion Fund, or “CPF,” which is administered by us. Tenants are required to contribute 15% of their rent (Base Rent plus Percentage Rent) to the CPF. We may increase the percentage tenants must contribute to the CPF with up to 25% of the original amount set forth in the corresponding lease agreement for the contributions to the CPF. We may also require tenants to make extraordinary contributions to the CPF to fund special promotional and marketing campaigns or to cover the costs of special promotional events that benefit all tenants. We may require tenants to make these extraordinary contributions up to four times a year provided that each extraordinary contribution may not exceed 25% of the tenant’s preceding monthly lease payment.

Each tenant leases its rental unit as a shell without any fixtures and is responsible for the interior design of its rental unit. Any modifications and additions to the rental units must be pre-approved by us. We have the option to charge the tenant for all costs incurred in remodeling the rental units and for removing any additions made to the rental unit when the lease expires. Furthermore, tenants are responsible for obtaining adequate insurance for their rental units, which must cover, among other things, damage caused by fire, glass breakage, theft, flood, civil liability and workers’ compensation.

Insurance

We and our subsidiary IRSA CP carry all-risk insurance for the shopping malls and other buildings covering property damage caused by fire, terrorist acts, explosion, gas leak, hail, storms and wind, earthquakes, vandalism, theft and business interruption. In addition, we carry liability insurance covering any potential damage to third parties or property caused by the conduct of our business throughout Argentina. We and our subsidiary IRSA CP are in compliance with all legal requirements related to mandatory insurance, including insurance required by the Occupational Risk Law (Ley de Riesgos del Trabajo), life insurance required under collective bargaining agreements and other insurance required by laws and executive orders. IRSA CP’s and our history of damages is limited to one single claim resulting from a fire in Alto Avellaneda Shopping in March 2006, which loss was substantially recovered from our insurers. These insurance policies contain specifications, limits and deductibles which we believe are adequate to the risks to which we are exposed in our daily operations. We and our subsidiary IRSA CP also maintain liability insurance covering the liability of our directors and corporate officers.

Control Systems

IRSA CP has computer systems equipped to monitor tenants’ sales (except stands) in all of its shopping malls. IRSA CP also conduct regular audits of our tenants’ accounting sales records in all of our shopping malls. Almost every store in its shopping malls has a point of sale that is linked to our main server. IRSA CP uses the information generated from the computer monitoring system to prepare statistical data regarding, among other things, total sales, average sales and peak sale hours for marketing purposes and as a reference for the internal audit. Most of its shopping mall lease agreements require the tenant to have its point of sale system linked to our server. During this fiscal year, we signed an agreement to renew our payment terminals with contactless technology (Clover).

Competition

We are the largest owner and operator of shopping malls, offices and other commercial properties in Argentina in terms of gross leasable area and number of rental properties. Given that most of our shopping malls are located in highly populated areas, there are competing shopping malls within, or in close proximity to, our targeted areas, as well as stores located on avenues or streets. The number of shopping malls in a particular area could have a material effect on our ability to lease space in our shopping malls and on the amount of rent that we are able to charge. We believe that due to the limited availability of large plots of land and zoning restrictions in the City of Buenos Aires, it is difficult for other companies to compete with us in areas through the development of new shopping malls. Our principal competitor is Cencosud S.A. which owns and operates Unicenter Shopping and the Jumbo hypermarket chain, among others.

The following table shows certain information concerning the most significant owners and operators of shopping malls in Argentina, as of June 30, 2020.

Entity	Shopping<br>malls	Location	GLA	Marketshare(1)
				(%)
IRSA<br>CP	Alto<br>Palermo	City of Buenos<br>Aires	18,655	1.44
Abasto<br>Shopping(2)		City of Buenos<br>Aires	36,761	2.83
Alto<br>Avellaneda		Province of Buenos<br>Aires	38,801	2.99
Alcorta<br>Shopping		City of Buenos<br>Aires	15,725	1.21
Patio<br>Bullrich		City of Buenos<br>Aires	11,396	0.88
Dot Baires<br>Shopping(4)		City of Buenos<br>Aires	48,805	3.75
Soleil		Province of Buenos<br>Aires	15,156	1.17
Distrito<br>Arcos		City of Buenos<br>Aires	14,335	1.10
Alto<br>Noa(2)		City of<br>Salta	19,313	1.49
Alto<br>Rosario(3)		City of<br>Rosario	33,682	2.59
Mendoza<br>Plaza		City of<br>Mendoza	43,123	3.32
Córdoba<br>Shopping		City of<br>Córdoba	15,361	1.18
La Ribera<br>Shopping		City of Santa<br>Fe	10,530	0.81
Alto<br>Comahue		City of<br>Neuquén	11,702	0.90
Subtotal			333,345	25.64
Cencosud S.A.			277,203	21.33
Other<br>operators			689,304	53.05
Total			1,299,852	100.00

(1) Corresponding to gross leasable area in respect of total gross leaseable area. Market share is calculated dividing sqm over total sqm.

(2) Does not include Museo de los Niños (3,732 sqm).

(3) Does not include Museo de los Niños (1,261 sqm).

(4) Our interest in PAMSA is 80%:

Source: Argentine Chamber of Shopping Centers.

Seasonality

IRSA CP’s business is directly related with seasonality, affecting the level of our tenants’ sales. During summer holidays (January and February) our tenants’ sales reach their minimum level, whereas during winter holidays (July) and in December (Christmas) they reach their maximum level. Clothing stores generally change their collections in spring and autumn, positively affecting our shopping malls’ sales. Sales at discount prices at the end of each season are also one of the main sources of impact on our business.

Offices

According to Colliers International, as of September 30, 2020, the A+ and A office inventory is 1,827,742 sqm. The vacancy rate was steady at approximately 14.2% during the third quarter of 2020. These values indicate that the market is healthy in terms of its operations, allowing an optimum level of supply with robust values.

Compared to the previous quarter, the Premium Offices prices increased in the order of USD 25.5 per sqm compared to the previous quarter. The prices for A+ properties were USD 30.0 per sqm for the second quarter of 2020. In this context, Catalinas presents as the zone with higher prices per sqm, reaching an average of USD 29.2. Likewise, the industry reported a USD/m2 1.2 decreased in rental prices for A+ properties compared to the second quarter of 2020.

Management of office buildings

We generally act as the manager of the office properties in which we own an interest. We typically own the entire building or a substantial number of floors in the building. The buildings in which we own floors are generally managed pursuant to the terms of a condominium agreement that typically provides for control by a simple majority of the interests based on owned area. As building manager, we handle services such as security, maintenance and housekeeping, which are generally outsourced. The cost of the services is passed through to, and paid for by, the tenants, except in the case of our units that have not been leased, if any, for which we bear the cost. We market our leasable area through commissioned brokers or directly by us.

Leases

We usually lease our offices by using contracts with an average term between three to ten years. Contracts for the rental of office buildings and other commercial properties are generally stated in U.S. dollars. Rental rates for renewed periods are negotiated at market value.

Properties

The following table sets forth certain information regarding IRSA CP’s office buildings, as of September 30, 2020:

	Date<br>of acquisition/development	GLA<br>(sqm)(1)	Occupancy<br>rate(2)	Ownership<br>interest	Total<br>rental income for the three-month period ended September 30,<br>2020
			(%)	(%)	(in<br>thousands of ARS)
Offices
AAA<br>& A buildings
República<br>Building	Dec-14	19,885	86.9	100	115,706
Bankboston<br>Tower(5)	Dec-14	7,383	85.6	100	71,721
Intercontinental<br>Plaza(3)	Dec-14	2,979	100.0	100	31,654
Bouchard<br>710(6)	Dec-14	-	-	100	31,066
Dot<br>Building	Nov-06	11,242	84.9	80	55,714
Zetta	Jun-19	32,173	97.5	80	188,072
Total<br>AAA & A buildings		73,662	91.6		493,933
B<br>buildings
Philips	Jun-17	8,017	85.8	100	8,574
Suipacha<br>652/64	Dec-14	11,465	31.2	100	27,684
Total<br>B buildings		19,482	53.6		36,258
Total<br>Offices		93,144	83.7		530,191
Other<br>rental properties(4)					10,150
Total<br>Offices and Others					540,341

(1) Corresponds to the gross leasable area of each property as of September 30, 2020. Excludes common areas and parking spaces.

(2) Calculated by dividing occupied sqm by leasable area as of September 30, 2020.

(3) We own 13.2% of the building that has 22,535 sqm of gross leasable area.

(4) Includes rental income from all those properties that are not buildings intended for rent, but that are partially or fully rented (Philips Deposit, Anchorena 665 and San Martin Plot)

(5) On November 5, 2020, our subsidiary IRSA CP sold four floors and fifteen parking spaces and on November 12, 2020, it sold three floors and fifteen parking spaces. For more information, see “Recent Developments – Boston Tower Floor’s sale.

(6) On July 30, 2020, IRSA CP sold the entire building. For more information see: “Recent Developments – Bouchard 710 Building sale.”

Occupancy rate

The following table shows our offices occupancy percentage(1) as of the end of fiscal years 2020, 2019 and 2018 and at the end of the three-month periods ended September 30, 2020 and 2019:

	Occupancy<br>rate (1)
	As<br>of September 30,		As<br>of June 30,
	2020	2019	2020	2019	2018
			(%)
Offices:
República<br>Building	86.9	92.6	86.9	95.2	98.4
Bankboston<br>Tower (2)	85.6	93.5	96.4	93.5	85.6
Intercontinental<br>Plaza	100.0	100.0	100.0	100.0	100.0
Bouchard<br>710(3)	—	100.0	92.5	100.0	100.0
Suipacha<br>652/64	31.2	31.2	31.2	44.6	86.2
DOT<br>Building	84.9	100.0	84.9	100.0	100.0
Philips<br>Building	85.8	67.6	82.7	45.7	69.8
Zetta<br>Building	97.5	97.5	97.5	97.5	—
Total	83.7	88.1	86.1	88.3	92.3

(1) Leased sqm pursuant to lease agreements in effect as of June 30, 2020, 2019 and 2018 over gross leasable area of offices for the same fiscal years.

(2) On November 5, 2020, our subsidiary IRSA CP sold four floors and fifteen parking spaces and on November 12, 2020, it sold three floors and fifteen parking spaces. For more information, see “Recent Developments – Boston Tower Floor’s sale.

(3) On July 30, 2020, our subsidiary IRSA CP sold the entire building. For more information see: “Recent Developments – Bouchard 710 Building sale.”

Annual average income per surface area as of June 30, 2020, 2019 and 2018(1):

	Income<br>per sqm(1)
	As<br>of September 30,		As<br>of June 30,
	2020	2019	2020	2019	2018
	(ARS/sqm)
República<br>Building	6,692	6,354	26,992	25,260	17,650
Bankboston<br>Tower(2)	11,354	6,434	24,353	25,914	18,522
Intercontinental<br>Plaza	10,626	2,127	14,607	16,578	18,438
Bouchard<br>710(3)	—	6,769	28,823	26,375	21,985
Suipacha<br>652/64	2,398	3,741	11,740	24,038	9,341
Dot<br>Building	5,840	6,169	26,221	21,522	15,542
Philips<br>Building	4,026	2,799	12,044	27,766	7,738
Zetta<br>Building	5,998	8,270	26,114	17,144	—

(1) Calculated by dividing annual rental income by the gross leasable area of offices based on our interest in each building as of June 30 for each fiscal period.

(2) On November 5, 2020, our subsidiary IRSA CP sold one four floors and fifteen parking spaces and on November 12, 2020, it sold three floors and fifteen parking spaces. For more information, see “Recent Developments – Boston Tower Floor’s sale.

(3) On July 30, 2020, our subsidiary IRSA CP sold the entire building. For more information see: “Recent Developments - Bouchard 710 Building sale”

New agreements and renewals

Includes information as of June 30, 2020 due to the fact that, during the quarter ended on September 30, 2020, a large portion of the offices were unable to open to the public or did so under sanitary restrictions, as provided by DNU 297/2020 and subsequent extensions, which made it impossible to renew expired rental contracts and / or to sign new contracts.

The following table sets forth certain Information on lease agreements as of June 30, 2020:

Building	Number<br>of lease agreements(1)(5)	Annual<br>rental price (In million of ARS) (2)	Rental<br>price per new and renewed sqm(3)	Rental<br>price per previous sqm (ARS)(3)	Number<br>of lease agreements not renewed	Lease<br>agreements not renewed Annual rental price (In million of<br>ARS )(4)
Bouchard<br>710(6)	—	—	—	—	1	14
Bankboston<br>Tower(7)	2	34	1,891	1,933	—	—
Republica<br>Building	3	133	1,703	1,777	2	25
DOT<br>Building	1	17	882	851	—	—
Philips<br>Building	3	35	896	—	—	—
Suipacha<br>664	1	25	1,046	1,046	—	—
Total<br>Offices	10	244	1,369	1,206	3	39

(1) Includes new and renewed lease agreements executed in FY 2019.

(2) Lease agreements in U.S. dollars converted to Pesos at the exchange rate prevailing in the first effective month of the agreement, multiplied by 12 months.

(3) Monthly value.

(4) Lease agreements in U.S. dollars converted to Pesos at the exchange rate prevailing in the last effective month of the agreement, multiplied by 12 months.

(5) It does not include lease agreements over parking spaces, antennas or terrace area.

(6) On July 30, 2020, our subsidiary IRSA CP sold the entire building. For more information see: “Recent Developments – Bouchard 710 Building sale”

(7) On July 15, 2020, our subsidiary IRSA CP sold one floor and five parking spaces and on August 26, 2020, our subsidiary IRSA CP sold five floors and twenty five parking spaces, on November 5, 2020, it sold four floor and fifteen parking spaces and on November 12, 2020, it sold four floors and fifteen parking spaces. For more information, see “Recent Developments – Boston Tower Floor’s sale - Signature of a Purchase ticket regarding Boston Tower floor with possession.”

The following table sets forth the schedule of estimated lease expirations for our offices and other properties for leases in effect as of June 30, 2020. This data is presented assuming that none of our tenants exercises its option to renew or terminate its lease prior to expiration (most leases have renewal clauses):

Expiration<br>year	Number<br>of leases due to expire(1)	Sqm<br>of leases due to expire (sqm)(3)	Sqm<br>of leases due to expire (%)	Annual<br>rental income amount of leases due to expire (in million of<br>ARS)(2)	Annual<br>rental income amount of leases to expire (%)
As of September 30,<br>2020	4	9,454	13	57	3
As of June 30,<br>2021	22	24,983	23	679	33
As of June 30, 2022<br>and thereafter	33	65,149	64	1,345	65
Total	59	99,586	100	2,081	100

(1) Includes offices with leases that have not been renewed as of June 30, 2020.

(2) It does not include sqm used by IRSA CP.

(3) It does not include sqm or revenues from parking spaces.

Hotels

According to the Hotel Vacancy Survey (EOH) prepared by INDEC, at September 2020, overnight stays at hotel and parahotel establishments were estimated at 140 thousand, 96.3% shorter than the same month the previous year. Overnight stays by resident and nonresident travelers decreased by 95.4% and 99.4%, respectively. Total travelers who stayed at hotels during June were 47 thousand, a 97.2% decrease compared to the same month the previous year. The number of resident and nonresident travelers decreased by 96.5% and 99.7%, respectively. The Room Occupancy Rate in September was 80.9%, showing a sharp decrease compared to the same month the previous year. Moreover, the Bed Occupancy Rate for the same period was 95.1%, which represents a sharp decrease compared to September 2019.

Hotels segment has also been affected by the social, preventive, and mandatory isolation decreed by the Argentine government as of March 20, 2020, together with the closure of borders and the arrival of tourism. The Libertador hotel in the city of Buenos Aires and Llao Llao hotal in the province of Río Negro have been temporarily closed since that date and there is no certainty about their reopening and the reactivation of the sector; in turn, the Intercontinental Hotel in the City of Buenos Aires is working only under a contingency and emergency plan.

At the moment, there are no certainties about the opening of the social, preventive and mandatory isolation that motivates the reactivation of the sector. The perspectives of slow normalization and reopening place us at the end of the year or the beginning of next year.

Future confirmations on the relaxation of social isolation, the opening of airports for national and international flights, land borders and normal interprovincial traffic will contribute to the slow normalization. With the reopening, an initial occupancy is expected, oscillating between 5% and 15%, growing gradually.

The crisis in the sector has motivated palliative measures by national and provincial authorities, necessary measures that partially contribute to sustainability. In a complementary way, the management of each one of the hotels makes its best efforts to adapt operationally to the context.

As of September 2020, we kept our 76.34% interest in Intercontinental hotel, 100% interest in Libertador hotel and 50.00% interest in Llao Llao.

The following chart shows certain information regarding our luxury hotels:

Hotels	Date<br>of Acquisition	IRSA’s<br>Interest	Number<br>of rooms	Occupancy<br>(%)(1)	Average<br>Price per Room ARS(2)	As<br>of September 30,		Fiscal<br>Year Sales as of June 30
						2020	2019	2020	2019	2018
						(in<br>millions of ARS)
Intercontinental(3)	11/01/1997	76.34%	313	1.4	7,072	5	92	776	1,129	591
Libertador(4)	03/01/1998	100%	200	0	N/A	1	261	271	636	349
Llao<br>Llao(5)	06/01/1997	50.00%	205	0	N/A	0	348	1,129	1,413	753
Total			718	0.6	7,088	6	702	2,176	3,179	1,692

(1) Accumulated average in the twelve-month period.

(2) Accumulated average in the twelve-month period.

(3) Through Nuevas Fronteras S.A.

(4) Through Hoteles Argentinos S.A.U.

(5) Through Llao Llao Resorts S.A.

Hotel Llao Llao, San Carlos de Bariloche, Province of Rio Negro

In June 1997 we acquired the Hotel Llao Llao from Llao Llao Holding S.A. Fifty percent is currently owned by the Sutton Group. The Hotel Llao Llao is located on the Llao Llao peninsula, 25 kilometers from the City of San Carlos de Bariloche, and it is one of the most important tourist hotels in Argentina. Surrounded by mountains and lakes, this hotel was designed and built by the famous architect Bustillo in a traditional alpine style and first opened in 1938. The hotel was renovated between 1990 and 1993 and has a total constructed surface area of 15,000 sqm and 158 original rooms. The hotel-resort also includes an 18-hole golf course, tennis courts, fitness facility, spa, game room and swimming pool. The hotel is a member of The Leading Hotels of the World, Ltd., a prestigious luxury hospitality organization representing 430 of the world’s finest hotels, resorts and spas. The Hotel Llao Llao is currently being managed by Compañía de Servicios Hoteleros S.A., operator, among others, of the Alvear Palace Hotel, a luxury hotel located in the Recoleta neighborhood of Buenos Aires. During 2007, the hotel was subject to an expansion and the number of suites in the hotel rose to 205 rooms.

Hotel Intercontinental, City of Buenos Aires

In November 1997, we acquired 76.34% of the Hotel Intercontinental. The Hotel Intercontinental is located in the downtown City of Buenos Aires neighborhood of Montserrat, near the Intercontinental Plaza office building. Intercontinental Hotels Corporation, a United States corporation, currently owns 23.66% of the Hotel Intercontinental. The hotel’s meeting facilities include eight meeting rooms, a convention center and a divisible 588 sqm ballroom. Other amenities include a restaurant, a business center, a sauna and a fitness facility with swimming pool. The hotel was completed in December 1994 and has 313 rooms.

Hotel Libertador, City of Buenos Aires

In March 1998 we acquired 100% of the Sheraton Libertador Hotel from Citicorp Equity Investment for an aggregate purchase price of USD 23 million. In March 1999, we sold a 20% interest in the Sheraton Libertador Hotel for USD 4.7 million to Hoteles Sheraton de Argentina.

During the fiscal year 2019, we acquired 20% of the shares of Hoteles Argentinos S.A.U. (“HASAU”), reaching 100% of the capital stock of HASAU and beginning to operate the hotel directly under the name “Libertador.” The hotel is located in downtown Buenos Aires. The hotel contains 193 rooms and 7 suites, eight meeting rooms, a restaurant, a business center, a spa and fitness facilities with a swimming pool.

Bariloche Plot, “El Rancho,” San Carlos de Bariloche, Province of Río Negro

On December 14, 2006, through our hotel operator subsidiary, Llao Llao Resorts S.A., we acquired a land covering 129,533 sqm of surface area in the City of San Carlos de Bariloche in the Province of Río Negro. The total price of the transaction was USD 7 million, of which USD 4.2 million were paid in cash and the balance of USD 2.8 million was financed by means of a mortgage to be paid in 36 monthly, equal and consecutive installments of USD 0.086 million each. The land is in the border of the Lago Gutiérrez, close to the Llao Llao Hotel in an outstanding natural environment and it has a large cottage covering 1,000 sqm of surface area designed by the architect Ezequiel Bustillo.

Sale and Development of Properties and Land Reserves

Residential Development Properties

The acquisition and development of residential apartment complexes and residential communities for sale is one of our core activities. Our development of residential apartment complexes consists of the new construction of high-rise towers or the conversion and renovation of existing structures such as factories or warehouses. In connection with our development of residential communities, we frequently acquire vacant land, develop infrastructure such as roads, utilities and common areas, and sell plots of land for construction of single-family homes. We may also develop or sell portions of land for others to develop complementary facilities such as shopping areas within residential developments.

In the fiscal year ended June 30, 2020, revenues from the development and sale of properties from the Operations Center in Argentina segment amounted to ARS 791 million, compared to ARS 1,205 million posted in the fiscal year ended June 30, 2019.

Construction and renovation works on our residential development properties are performed, under our supervision, by independent Argentine construction companies that are selected through a bidding process. We enter into turnkey contracts with the selected company for the construction of residential development properties pursuant to which the selected company agrees to build and deliver the development for a fixed price and at a fixed date. We are generally not responsible for any additional costs based upon the turnkey contract. All other aspects of the construction, including architectural design, are performed by third parties.

Another modality for the development of residential undertakings is the exchange of land for constructed sqm. In this way, we deliver undeveloped pieces of land and another firm is in charge of building the project. In this case, we receive finished sqm for commercialization, without taking part in the construction works.

The following table shows information about IRSACP’s land reserves as of September 30, 2020:

	Ownership<br>Interest (%)	Date<br>of acquisition	Land<br>Surface (sqm)	Buildable<br>surface (sqm)	GLA<br>(sqm)	Salable<br>Surface (sqm)	Book<br>Value (in millions of ARS)
RESIDENTIAL<br>- BARTER AGREEMENTS
CONIL - Güemes<br>836 – Mz. 99 & Güemes 902 – Mz. 95 &<br>Commercial stores - Buenos Aires(6)	100	Jul-96	—	—	—	1,461	70
Total<br>Intangibles (Residential)			—	—	—	1,461	70
LAND<br>RESERVES:
Catalinas - City of<br>Buenos Aires(4)(5)	100	May-10	3,648	58,100	28,051	—	—
Subtotal<br>offices			3,648	58,100	28,051	—	—
Total<br>under Development			3,648	58,100	28,051	—	—
UOM Luján -<br>Buenos Aires	100	May-08	1,160,000	464,000	—	—	1,326
San Martin Plot (Ex<br>Nobleza Piccardo) - Buenos Aires	50	May-11	159,996	500,000	—	—	3,797
La Plata - Greater<br>Buenos Aires	100	Mar-18	78,614	116,552	—	—	1,293
Caballito plot -<br>City of Buenos Aires	100	Jan-99	23,791	86,387	10,518	75,869	4,353
Subtotal<br>Mixed-uses			1,422,401	1,166,940	10,518	75,869	10,769
Coto Abasto air<br>space - City of Buenos Aires(2)	100	Sep-97	—	21,536	—	16,385	37
Córdoba<br>Shopping Adjoining plots - Córdoba(2)	100	Jun-15	8,000	13,500	—	2,160	36
Neuquén -<br>Residential plot - Neuquén(2)	100	Jun-99	13,000	18,000	—	18,000	86
Subtotal<br>residential			21,000	53,036	—	36,545	159
Polo Dot commercial<br>expansion – City of Buenos Aires	80	Nov-06	—	—	15,940	—	1,888
Paraná plot -<br>Entre Ríos(3)	100	Aug-10	10,022	5,000	5,000	—	—
Subtotal<br>retail			10,022	5,000	20,940	—	1,888
Polo Dot - Offices<br>2 & 3 - City of Buenos Aires	80	Nov-06	12,800	—	38,400	—	3,627
Intercontinental<br>Plaza II - City of Buenos Aires	100	Feb-98	6,135	—	19,598	—	1,484
Córdoba<br>Shopping adjoining plots - Córdoba(2)	100	Jun-15	2,800	5,000	5,000	—	27
Subtotal<br>offices			21,735	5,000	62,998	—	5,138
Total<br>future developments			1,475,158	1,229,976	94,456	112,414	17,954
Other<br>land reserves(1)			1,899	—	7,297	262	1,880
Total<br>land reserves			1,477,057	1,229,976	101,753	112,676	19,834

(1) Includes Zelaya 3102-3103, Chanta IV, Anchorena 665, Condominios del Alto II, Ocampo parking spaces, DOT adjoining plot and Mendoza shopping adjoining plot.

(2) These land reserves are classified as Trading Properties, therefore, their value is maintained at historical cost. The rest of the land reserves are classified as Investment Property, valued at market value.

(3) Sign of the deeds pending subject to certain conditions.

(4) The sale agreements for 86.93% of the property under development have been signed between IRSA and IRSA CP and the remaining units have been sold to Globant, also through an agreement. The deed of sale with both entities has not yet been signed. The aforementioned fair value corresponds only to the land.

(5) On June 10, 2020, IRSA CP informed with an unrelated third party the assignment and transfer of the right to deed with delivery of possession of two floors of medium height of the tower under construction “200 Della Paolera” located in the Catalinas district of the Autonomous City of Buenos Aires for a total area of approximately 2,430 m2 and 16 parking units located in the building.

(6) Classified as Intangible Assets, therefore, their value is kept at historical cost.

The following chart shows information about IRSA’s land reserves as of September 30, 2020:

	IRSA’s<br>Interest	Date<br>of acquisition	Land<br>surface (sqm)	Buildable<br>surface (sqm)	Saleable<br>surface (sqm)	Book<br>Value (ARS millions)
LAND<br>RESERVES
La Adela - Buenos<br>Aires(3)	100%	8/1/2014	9,868,500	3,951,227	—	1,887
Puerto Retiro - BA<br>City(1)	50%	5/18/1997	82,051	246,153	—	-
Solares Santa<br>María - BA City(3)	100%	7/10/1997	716,058	716,058	—	27,580
Subtotal<br>Mixed-uses			10,666,609	4,913,438	—	29,467
Caballito Block 35<br>-BA City(4)	100%	10/22/1998	9,879	57,192	30,064	424
Zetol –<br>Uruguay(4)	90%	6/1/2009	—	—	64,080	334
Vista al Muelle<br>– Uruguay(4)	90%	6/1/2009	—	—	60,360	285
Subtotal Residential			9,879	57,192	154,504	1,043
Total Future Developments			10,676,488	4,970,630	154,504	30,510
Another Land Reserves(2)(3)(4)			5,249,941	—	4,713	618
Total Land Reserves			15,926,429	4,970,630	159,217	31,128

(1) This landplot is under judicial litigation and it is fully allowanced.

(2)

Includes Pilar R8 Km 53, Pontevedra, Mariano Acosta, Merlo and San Luis plot, and Llao Llao plot.

(3)

These properties (La Adela, Solares Santa María, Pilar R.8 Km 53, Pontevedra, Mariano Acosta, Merlo and San Luis) are valuated as Fair Value.

(4)

These properties (Caballito Block 35, Zetol, Vista al Muelle and Llao Llao plot) are valuated as Cost adjusted for inflation.

Residential Properties (available for sale)

In the residential market, we acquire undeveloped properties strategically located in densely populated areas of the City of Buenos Aires, particularly properties located near shopping malls and hypermarkets or those to be constructed. We then develop multi-building high-rise complexes targeting the middle- and high- income market. These are equipped with modern comforts and services, such as open “green areas,” swimming pools, sports and recreation facilities and 24-hour security.

Condominios del Alto II – City of Rosario, Province of Santa Fe (IRSA CP)

The Condominios del Alto II project will be composed of two opposite building blocks, commercially divided into 10 sub-blocks. The project consists of a total of 189 apartments distributed in 6 stories and 195 parking spaces located in two basements. The amenities include a swimming pool with solarium, a multiple use room, sauna, a gym with dressrooms and a laundry. As of the date of this Form 6-K, the works in parcel H have been completed and all the units subject to the barter have been received, with six parking spaces available for sale.

Horizons, Vicente López, Olivos, Province of Buenos Aires.

The IRSA-CYRELA Project, developed over two adjacent blocks, was launched in March 2008 under the name Horizons. Horizons is one of the most significant developments in Greater Buenos Aires, featuring a new concept in residential complexes given its emphasis on the use of common spaces. This project includes two complexes with a total of six buildings: one complex faces the river and consists of three 14-floor buildings, the “Río” complex, and the other one, facing Libertador Avenue, consists of three 17-floor buildings, it is known as the “Parque” complex, thus totaling 59,000 sqm built of saleable area distributed in 467 units (excluding the units to be delivered as consideration for the purchase of the lands). Horizons is a unique and style-innovating residential complex offering 32 amenities, including a meeting room, work zone, heated swimming pools, mansion with spa, sauna, gym, children room, teen room, thematically landscaped areas, and aerobic trail. The showroom was opened to the public in March 2008 with great success. As of June 30, 2020, all the units were sold and the stock available for sale consisted of 1 parking space and 19 storage spaces.

Pereiraola (Greenville), Hudson – Province of Buenos Aires

In April de 2010 we sold Pereiraola S.A., a company owner of certain lands adjacent to Abril Club de Campo that comprised 130 hectares, for USD 11.7 million. The purchaser would develop a project that includes the fractioning into lots, a condo-hotel, two polo fields, and apartment buildings. The delivery to the Company of 39,634 sqm of lots amounting to approximately USD 3 million was included in the sale price. As of September 30, 2020, 10 lots had been transferred and 46 remain to be traded.

Intangibles – Units to be received under barter agreements

Conil – Avellaneda, Province of Buenos Aires (IRSA CP)

These plots of land we own, through IRSA CP, face Alto Avellaneda shopping mall, totaling 2,398 sqm distributed in two opposite corners and, according to urban planning standards, around 6,000 sqm may be built. Its intended use, either through our own development or sale to a third party, is residential with the possibility of a retail space as well. In November 2014, a barter deed was executed to carry out a residential development, in consideration of which IRSA CP will receive 1,389 sqm of retail stores located on the ground floors of blocks 99 and 95 at Güemes 836 and Güemes 902, respectively. The barter was valued at USD 0.7 million. Considerations for block 95 and 99 were estipulated to be delivered in January 2018 and September 2018, respectively. In June 2018 an extension to the barter agreement was signed. In consideration for the delay and as compensation, IRSA CP will receive an additional apartment (55.5 sqm) and one parking lot (14 sqm).

Zetol S.A. and Vista al Muelle S.A. – District of Canelones – Uruguay

In the course of fiscal year 2009 we acquired a 100% ownership interest in Liveck S.A., a company organized under the laws of Uruguay. In June 2009, Liveck had acquired a 90% stake in the capital stock of Vista al Muelle S.A. and Zetol S.A., two companies incorporated under the laws of Uruguay, for USD 7.8 million. The remaining 10% ownership interest in both companies is in the hands of Banzey S.A. These companies have undeveloped lands in Canelones, Uruguay, close to the capital city of Uruguay, Montevideo.

We intend to develop in these 13 plots, with a construction capacity of 182,000 sqm, an urban project that consists of the development and comercialization of 1,860 apartments. Such project has the “urban feasibility” status for the construction of approximately 200,000 sqm for a term of 10 years, which was granted by the Mayor’s Office of the Canelones department and by its Local Legislature. Zetol S.A. and Vista al Muelle S.A. agreed to carry out the infrastructure works for USD 8 million as well as minimum amount of sqm of properties. The satisfaction of this commitment under the terms and conditions agreed upon will grant an additional 10-year effective term to the urban feasibility status.

The total purchase price for Zetol S.A. was USD 7 million; of which USD 2 million were paid. Sellers may opt to receive the balance in cash or through the delivery of units in the buildings to be constructed in the land owned by Zetol S.A. equivalent to 12% of the total marketable meters to be constructed.

Besides, Vista al Muelle S.A. owned since September 2008 a plot of land purchased for USD 0.83 million. Then, in February 2010, plots of land were acquired for USD 1 million. In December 2010, Vista al Muelle S.A. executed the title deed of other plots for a total amount of USD 2.66 million, of which USD 0.3 million were paid. The balance will be repaid by delivering 2,334 sqm of units and/or retail stores to be constructed or in cash.

On June 30, 2009, the Company sold a 50% stake in Liveck S.A. to Cyrela Brazil Realty S.A. for USD 1.3 million. On December 17, 2010, together with Cyrela Brazil Realty S.A. we executed a stock purchase agreement pursuant to which we repurchased from Cyrela Brazil Realty S.A. a 50% shareholding in Liveck S.A. for USD 2.7 million. Accordingly, as of June 30, 2016, our stake, through Tyrus, in Liveck is 100%.

As a result of the plot barter agreements executed in due time between the IMC, Zetol S.A. and Vista al Muelle S.A. in March 2014, the parcel redistribution dealing was concluded. This milestone, as set forth in the amendment to the Master Agreement executed in 2013, initiates the 10-year term for the investment in infrastructure and construction of the buildings mentioned above. Construction capacity of the 13 plots is 182,000 sqm.

On November 15, 2018, the translation deed of sale of the first plot where the first Tower of Departments, Villas and single and double parking spaces is currently being built has been signed, the total exchange price was USD 7,298,705, equivalent to 16% of all of the marketable built meters in the first Tower. 12% of it has been used to cancel part of the price balance maintained to date with the sellers of the plots acquired by Zetol S.A in June 2009. The estimated delivery date of the units is January 2022.

Canteras Natal Crespo, La Calera – Province of Córdoba

On June 26, 2013, we sold 100% of our interest in Canteras Natal Crespo S.A. representing 50% of its capital stock, to Euromayor S.A. de Inversiones for USD 4,215,000 according to the following payment schedule: USD 3,815,000 in cash and USD 400,000 through the transfer of almost 40,000 sqm for business purposes within the project to be developed in the site known as Laguna Azul. Delivery of the non-monetary consideration, which consist in 30,000 sqm, is pending. In December 2019, an agreement was reached with the counterpart that allowed the resale of the non-monetary consideration to an unrelated third party for a total value of USD 450,000.

Projects under Development

Alto Palermo Expansion (IRSA CP)

We keep working on the expansion of Alto Palermo shopping mall, the shopping mall with the highest sales per sqm in our portfolio, that will add a gross leasable area of approximately 3,900 sqm and will consist in moving the food court to a third level by using the area of an adjacent building acquired in 2015. Work progress as of June 30 2020 was 64% and construction works are expected to be finished by June 2021.

200 Della Paolera - Catalinas building (IRSA CP)

The building under construction will have 35,000 sqm of GLA consisting of 30 office floors and 316 parking spaces and will be located in the “Catalinas” area in the City of Buenos Aires, one of the most sought-after spots for Premium office development in Argentina. The Company owns 30,832 sqm consisting of 26 floors and 272 parking spaces in the building. As of September 30, 2020, work progress was 98%.

Mixed uses

Ex UOM – Luján, Province of Buenos Aires (IRSA CP)

This 116-hectare plot of land is located in the 62 Km of the West Highway, in the intersection with Route 5 and was originally purchased by IRSA from Birafriends S.A. for USD 3 million on May 31, 2008. In May 2012, the Company acquired the property through a purchase and sale agreement entered into between related parties, thus becoming the current owner. Our intention is to carry out a mixed-use project, taking advantage of the environment consolidation and the strategic location of the plot. At present, dealings are being carried out so as to change the zoning parameters, thus enabling the consummation of the project.

Ex Nobleza Piccardo Plant – San Martín, Province of Buenos Aires (IRSA CP)

This plot of land is owned by Quality Invest. On May 31, 2011, Quality Invest S.A. and Nobleza Picardo S.A.I.C. y F. (Nobleza) executed the title deed for the purchase of a plot of land extending over 160,000 sqm located in the District of San Martín, Province of Buenos Aires, currently intended for industrial purposes and suitable in terms of characteristics and scales for mixed-use developments.

The Master Plan, by which it is projected to develop a large-scale integral urbanization (residential, commercial, etc.), which includes the construction of approximately 540,000 m2, was endorsed by the Municipality of San Martin through Decree 1589/19 and registered before the General Directorate of Urbanism and Directorate of Urban Planning of the Municipality. Likewise, the subdivision plan in accordance with the urban indicators was presented to the Directorate of Cadastre of the Province of Bs. As.

Additionally, during this fiscal year, the pre-feasibility requirements began to be processed with public bodies. The one corresponding to the Hydraulic Directorate of the Province is in the process of approval, and in the next fiscal year, we will begin the rest of the presentations before the service companies, to obtain the pre-feasibilities of electric power, gas, water and overturning. of effluents.

Córdoba Shopping Mall Project (IRSA CP)

The Company owns a few plots adjacent to Córdoba Shopping Mall with a construction capacity of approximately 17,300 sqm in the center of the City of Córdoba.

In May 2016, a preliminary barter agreement was signed for 13,500 sqm out of the total construction capacity, subject to certain conditions, for a term of one year, at the end of which the deed will be signed. It will be a mixed residential and office project and, as part of the consideration, the Company will receive 2,160 sqm in apartments, parking spaces, shopping space, plus IRSA CP will assume the management of permits, unifications and subdivisions in 3 plots. The consideration will be delivered by May 2022 for Torre I and by July 2024 for Torre II. The value of the barter was USD 4 million.

La Plata Plot of land (IRSA CP)

On March 22, 2018 the Company has acquired, directly and indirectly, 100% of a plot of land of 78,614 sqm located in the city of La Plata, Province of Buenos Aires. The price of the transaction was USD 7.5 million, which have been fully paid.

The price of the operation was set at the amount of USD 7.5 million which have been fully paid. The purpose of this acquisition is the future development of a mixed-use project, given that the property has characteristics for a commercial development in a high potential district.

On January 21, 2019, Ordinance No. 11767, approved by the Honorable Deliberative Council of La Plata on December 26, 2018, has been promulgated. With said promulgation, the uses and indicators requested to develop a project of 116,553 sqm are formally confirmed by said Ordinance.

On September 24, 2020, the agreement that validates Ordinance No. 11767 was signed between the Mayor Dr. Julio Garro and the Director of the Real Estate Business, Dr. Daniel Elsztain, where the uses within the property are fixed, they may be: Shopping and entertainment center, Offices, Hotels, Housing, Medical Assistance Center and any other use authorized by the Planning Code of the City of La Plata.

The Master plan was consolidated with 16 lots, which are already in process to obtain the corresponding subdivision, by Geodesia in the Province of Buenos Aires.

Caballito Plot – City of Buenos Aires

On December 23, 2019, the Company transferred Parcel 1 of the land reserve located at Av. Avellaneda and Olegario Andrade 367 in the Caballito neighborhood of the City of Buenos Aires to an unrelated third party.

Plot 1 has an estimated surface of 3,221 sqm where a 10 floors residential building will be developed for a total area of 11,400 sqm, together with a commercial ground floor of 1,216 sqm and a basement of 138 parking spaces (“Building 1”).

The amount of the operation was set at USD 5.5 million to be paid in future functional units of Building 1, which represent the equivalent of 23.53% of the owned sqm, with a minimum guaranteed of 2,735 sqm composed for 1,215.62 commercial sqm, 1,519.68 residential sqm and a certain number of parking spaces that represent 22.50% of the own sqm with that destination and never less than 31 units.

The consideration is guaranteed by a mortgage on Plot 1 and Building 1 and the buyer has an Option to acquire Plot 2 of the same property until August 31, 2020 and Plots 3 and 4 until March 31, 2021, subject to certain suspensive conditions.

On July 20, 2020, IRSA CP was notified of the filing of a protection action (amparo) that is processed before the Administrative and Tax Litigation Jurisdiction of the City of Buenos Aires, where the plaintiff has requested the nullity of: 1) Administrative act that grants the certificate of environmental aptitude and 2) Administrative act that registered the plans. On October 1, 2020, the Chamber confirmed the precautionary measure. The Government of the City of Buenos Aires appealed the measure by filing an Appeal of Unconstitutionality. For more information, see “ITEM 8. Financial Information—A. Consolidated Statements and Other Financial Information—Legal or Arbitration Proceedings—Caballito.”

La Adela – Buenos Aires

During 2015 the company acquired the “La Adela” land reserve with an area of approximately 1,058 hectares, located in the District of Luján, Province of Buenos Aires, that was previously owned by Cresud for a total amount of ARS 210 million. Given its degree of development and closeness to the City of Buenos Aires, we intend to develop a new real estate project.

Puerto Retiro – City of Buenos Aires

At present, this 8.3 hectare plot of land, which is located in one of the most privileged areas of the city, near Catalinas, Puerto Madero and Retiro and is the only privately owned waterfront property facing directly to Río de la Plata, is affected by a zoning regulation defined as U.P. which prevents the property from being used for any purposes other than strictly port activities.

During fiscal year 1998, the Company initiated negotiations with the authorities of the Government of the City of Buenos Aires in order to obtain a rezoning permit for the property, allowing a change in the use of the property and setting forth new regulations for its development.

In turn, Tandanor filed a civil action against Puerto Retiro S.A. and the other defendants in the criminal case for violation of Section 174 (5) based on Section 173 (7) of the Criminal Code. Such action seeks -on the basis of the nullity of the decree that approved the bidding process involving the Dársena Norte property- the restitution of the property and a reimbursement in favor of Tandanor for all such amounts it has allegedly lost as a result of a suspected fraudulent transaction involving the sale of the property. Puerto Retiro has presented the allegation on the merit of the evidence, highlighting that the current shareholders of Puerto Retiro did not participate in any of the suspected acts in the criminal case since they acquired the shares for consideration and in good faith several years after the facts told in the process. Likewise, it was emphasized that the company Puerto Retiro is foreign - beyond its founders - to the bidding / privatization carried out for the sale of Tandanor shares. The pronouncement of the sentence is pending.

On September 7, 2018, the Oral Federal Criminal Court No. 5 rendered a decision. According to the sentence read by the President of the Court, Puerto Retiro won the preliminary objection of limitation filed in the civil action. However, in the criminal case, where Puerto Retiro is not a party, it was ordered, among other issues, the confiscation (decomiso) of the property owned by Puerto Retiro known as Planta I. The grounds of the Court`s judgement will be read on November 30, 2018. From that moment, all the parties might file the appeals.

On December 27, 2018, an action for annulment was filed against the judgment that ordered the confiscation of the property named “Planta 1.” On March 1, 2019 we were notified of the “in limine” rejection of the action for annulment filed. Subsequently, on March 8, 2019, a motion for restitution was filed against said resolution. On March 19, 2019, we were notified of the Court’s decision that rejected the replacement and declared the appeal filed in a subsidiary inadmissible. On March 22, 2019, a complaint was filed for appeal denied (before the Federal Criminal Cassation Chamber), the caul was granted, which is why the appeal filed is currently pending. In that sense, in April the appeal was maintained and subsequently, its foundations were expanded.

On 21 February 2020, an electronic document was received from the Federal Court of Criminal notifying the decision rejecting the appeals brought by Puerto Retiro against the verdict of the Federal Oral Court 5 that provided for the confiscation of the property Plant I and the distribution of costs in the order caused as regards the exception for the limitation of civil action brought by Puerto Retiro to which the Oral Court took place. Against that decision of appeal, Puerto Retiro was brought in a timely and form of Federal Extraordinary Appeal. In addition, Federal Criminal Cassation Chamber upheld the above limitation period by rejecting, to that effect, the appeal brought by the National State and Tandanor.

In the face of the evolution of the legal cases affecting it and based on the reports of its legal advisors, the Management of Puerto Retiro has decided to record a impairment equivalent to 100% of the book value of its investment property, without prejudice to the reversal of the same in the event that a favorable judgment is obtained in the actions brought.

Solares de Santa María – City of Buenos Aires

Solares de Santa María is a 70-hectare property facing the Río de la Plata in the south of Puerto Madero, 10 minutes from downtown Buenos Aires. We are owners of this property in which we intend to develop an entrepreneurship for mixed purposes, i.e. our development project involves residential complexes as well as offices, stores, hotels, sports and sailing clubs, services areas with schools, supermarkets and parking lots, and we would need to obtain all the necessary permits and authorizations

On October 30, 2012 a new agreement was executed with the Government of the City of Buenos Aires, replacing all prior agreements, and such has been submitted to the Legislature for its consideration. The agreement provided that if by February 28, 2014 the agreement was not approved would become invalidated.

During 2016, a new Agreement was executed with the Executive Branch of the City of Buenos Aires, including a new Bill of Law. The new Bill of Law was submitted to the Legislative Branch of the City of Buenos Aires for consideration and was approved by the relevant commissions, yet, during legislative year 2018 it was reserved and remained without legislative treatment. As a consequence, at the end of the 2018 legislative session, the lack of treatment triggered the automatically invalidity of the above mentioned and executed Agreement with the Executive Branch of the City of Buenos Aires, which include such Bill of Law.

As of the date of this Form 6-K, efforts are still being made both in the CABA with the Goverment as well as in the CABA Legislature in order that the project Law may be treated on the premises, for its treatment and subsequent legislative approval.

Residential

Coto Residential Project (IRSA CP)

The Company owns the right to construct above the premises of the Coto hypermarket that is close to Abasto Shopping in the heart of the City of Buenos Aires which we acquired in September 24, 1997. We estimate it has a construction capacity of 23,000 square feet (it also includes the right to receive certain parking units). The premises are located within the area between Agüero, Lavalle, Guardia Vieja and Gallo streets, in the Abasto neighborhood.

On October 25, 2019, IRSA CP transferred to a non-related third party the rights to develop a residential building (“Tower 1”) on Coto Supermarket airspace located in Abasto neighborhood in the City of Buenos Aires. Tower 1 will have 22 floors of 1 to 3 rooms apartments, totaling an area of 8,400 sqm.

The amount of the operation was set at USD 4.5 million: USD 1 million in cash and the balance in at least 35 apartment units, which represent the equivalent of 24.20% of the owned sqm, with a minimum guaranteed of 1,982 sqm.

In a 30 month-period since the signature, when certain conditions have been met, IRSA CP must transfer to the same unrelated third party the rights to build a second apartment building.

Neuquén Residential Plot– Neuquén, Province of Neuquén (IRSA CP)

Through Shopping Neuquén S.A., we own a plot of 13,000 sqm with construction capacity of 18,000 sqm of residential properties in an area with significant growth potential. This area is located close to the shopping mall Alto Comahue, the hypermarket currently in operation and a hotel to be constructed.

Caballito Plot – City of Buenos Aires

On June 29, 2011, we and TGLT, a residential developer, entered into an agreement to barter for the development of a plot of land located at Méndez de Andes street in the neighborhood of Caballito in the City of Buenos AiresA neighborhood association named Asociación Civil y Vecinal SOS Caballito secured a preliminary injunction which suspended the works to be carried out by TGLT in the above-mentioned property. On April 2018 TGLT and us terminated the barter agreement and we recovered the land. In July 2018, the Supreme Court of Justice issued a favorable final decision allowing the construction of 57,192 sqm of apartments on the plot.

Offices

Polo Dot 2nd and 3rd Stages – City of Buenos Aires (IRSA CP)

These two parcels of 6,400 sqm with a construction capacity of 33,485 sqm each, are located adjoining to where the extension of Dot Baires Shopping is planned. In April 2018, both plots were unified into a single one of 12,800 sqm.

Intercontinental Plaza II Plot - City of Buenos Aires (IRSA CP)

In the heart of the neighborhood of Monserrat, just a few meters from the most trafficked avenue in the city and the financial center, is the Intercontinental Plaza complex consisting of an office tower and the exclusive Intercontinental Hotel. In the current plot of 6,135 sqm a second office tower of 19,600 sqm and 25 stories could be built to supplement the tower currently located in the intersection of Moreno and Tacuarí streets.

Other Land Reserves

Other Land Reserves – Pilar, Pontevedra, Mariano Acosta, Merlo, San Luis Plot, Llao Llao Plot and Casona Abril remaining surface

We grouped here those plots of land with a significant surface area the development of which is not feasible in the short term either due to their current urban and zoning parameters, their legal status or the lack of consolidation of their immediate environment. This group totals around 7 million sqm.

Isla Sirgadero

On September 3, 2015, the entire property of 10,083,270 sqm was sold to several companies for USD 3.9 million, payable in 16 quarterly installments, plus an installment in kind, land resulting from the final blueprint, equivalent to 10% of the surface area. Delivery of the non-monetary consideration, consisting in 1,083,327 sqm, is pending.

International

Lipstick Building, New York, United States

The Lipstick Building is a landmark building in the City of New York, located at Third Avenue and 53th Street in Midtown Manhattan, New York. It was designed by architects John Burgee and Philip Johnson (Glass House and Seagram Building, among other renowned works) and it is named after its elliptical shape and red façade. Its gross leasable area is approximately 58,000 sqm and consists of 34 floors.

On August 7, 2020, as a consequence of negotiations conducted in the context of an increased lease price effective as of May 2020, Metropolitan signed an agreement with the owner of the Ground Lease to terminate the commercial relationship, leaving the administration of the building. For this reason, as of June 30, 2020, Metropolitan no longer recognizes the liability associated with the ground lease, as well as all the assets and liabilities associated with the building and the operation of the administration. For more information see “Recent Developments – Lipstick Building.”

Investment in Condor Hospitality Trust

We maintain our investment in the Condor Hospitality Trust Hotel REIT (NYSE: CDOR) mainly through our subsidiary Real Estate Investment Group VII (“REIG VII”), in which we hold a 100% interest. Condor is a REIT listed in NYSE focused on medium-class hotels located in various states of the United States of America, managed by various operators and franchises.

Condor’s investment strategy is to build a branded premium, select service hotels portfolio within the top 100 Metropolitan Statistical Areas (“MSA”) with a particular focus on the range of MSA 20 to 60. Since the beginning of the reconversion of the hotel portfolio in 2015, Condor has acquired 14 high quality select service hotels in its target markets for a total purchase price of approximately USD 277 million. In addition, during this time, it has sold 53 legacy assets for a total value of approximately USD 161 million.

On July 19, 2019, Condor signed an agreement and merger plan with a company not related to the group. As agreed, each Condor ordinary share, whose nominal value is USD 0.01 per share will be canceled before the merger and will become the right to receive a cash amount equivalent to USD 11.10 per ordinary share. Additionally, in accordance with the terms and conditions of the merger agreement, each Series E convertible share will be automatically canceled and its holders will become entitled to receive a cash amount equal to USD 10.00 per share. The closing of the acquisition, scheduled for March 23, 2020, did not occur.

On October 12, 2020, Condor executed an agreement with Nextponint Hospitality Trust and some of its affiliates (“NHT Parties”) to resolve and settle any and all claims between them related to the merger agreement mentioned hereinabove.

According to the agreement with NHT Parties shall make three payments to Condor in three instalments ending the last payment on December 30, 2020 and totalling USD 7.0 million.

As of the date of presentation of these financial statements, the Company has 2,197,023 common shares and 325,752 Series E shares.

Others

Our interest in Banco Hipotecario

As of September 30, 2020, we held a 29.91% interest in Banco Hipotecario. Established in 1886 by the argentine government and privatized in 1999, Banco Hipotecario has historically been Argentina’s leading mortgage lender, provider of mortgage-related insurance and mortgage loan services. All of its operations are located in Argentina where it operates a nationwide network of 63 branches in the 23 Argentine provinces and the City of Buenos Aires, and 12 additional sales offices throughout Argentina.

Banco Hipotecario is an inclusive commercial bank that provides universal banking services, offering a wide variety of banking products and activities, including a wide range of individual and corporate loans, deposits, credit and debit cards and related financial services to individuals, small-and medium-sized companies and large corporations. As of September 30, 2020, Banco Hipotecario ranked thirteenth in the Argentine financial system in terms of totals assets and twelfth in terms of loans. As of September 30, 2020, Banco Hipotecario’s shareholders’ equity was ARS 15,141.5 million, its consolidated assets were ARS 150,789.5 million, and its net income for the nine-month period ended September 30, 2020 was ARS 291.8 million. Since 1999, Banco Hipotecario’s shares have been listed on the Buenos Aires Stock Exchange in Argentina, and since 2006 it has had a Level I ADR program.

Banco Hipotecario continues its business strategy of diversifying its loan portfolio. As a result, non-mortgage loans were ARS 36,944.8 million as of September 30, 2020. Total non-mortgage loans granted by the bank to the non-financial private sector were ARS 36,939.7 million as of September 30, 2020. Non-performing loans represented 16.9% of its total portfolio as of September 30, 2020.

In recent years, Banco Hipotecario has diversified its funding base and has become one of the most frequent issuers of corporate debt in Argentina based on the percentage of its total funding, by developing presence in the domestic and international capital markets, and it has also increased its deposit base. Its financial indebtedness as a percentage of its total funding was 36.2% as of June 30, 2020.

Its subsidiaries include BACS Banco de Crédito y Securitización S.A., a bank specialized in investment banking, asset securitization and asset management; BACS Administradora de Activos S.A.S.G.F.C.I., a mutual investment fund management company; BHN Sociedad de Inversión S.A., which controls BHN Vida S.A., a life insurance company; and BHN Seguros Generales S.A., a property insurance company.

By virtue of communications “A” 6939 and “7035” of the BCRA, the distribution of dividends is suspended until December 31, 2020.

Other Assets

La Rural (Exhibition and Convention Center)

LRSA holds usufruct rights for the commercial operation of the emblematic Predio Ferial de Palermo (Palermo exhibition center) in the City of Buenos Aires. We own 35% of the equity of LRSA.

In July 2016, we acquired from FEG Entretenimientos S.A. 25% of the shares of EHSA, in which we already held 50% of the share. We also acquired a 1.25% interest in ENUSA from Mr. Marcelo Figoli. The aggregate acquisition price for such acquisitions was ARS 66.5 million. Immediately after this acquisition, we sold 5% of the shares of EHSA to Mr. Diego Finkelstein, who already owned a 25% equity interest. The sale amount was agreed at ARS 13.5 million. As a result, we now hold 70% of the shares of EHSA and Mr. Diego Finkelstein holds the remaining 30%.

EHSA holds, directly and indirectly, 100% of the shares of OASA and 95% of the shares of ENUSA. OASA holds 50% of the voting stock of LRSA and SRA holds the remaining 50%. In addition, OASA manages LRSA pursuant to agreements entered into with SRA that include the right to appoint the chairman of the board of LRSA—with deciding vote on certain key governance matters—and the chief executive of LRSA. ENUSA is mainly engaged in organizing entertainment events for trade fairs.

On August 4, 2017, a 15-year concession for the Exhibition and Convention Center of the City of Buenos Aires was executed by the joint venture La Rural S.A., OFC S.R.L., Ogden Argentina S.A. and Entretenimiento Universal S.A. - Union Transitoria, which was granted pursuant a public bidding process. The members of the joint venture hold the following interests: (a) LRSA 5%; (b) OFC SRL 20%; (c) OASA 55%; and (d) EUSA 20%.

The shareholders of LRSA are Sociedad Rural Argentina and OASA, each of which owns 50% equity interest. OASA and EUSA are controlled by EHSA. Consequently, we indirectly hold a 50.00% interest in the joint venture.

The Exhibition and Convention Center has a surface area of approximately 22,800 sqm and may accommodate approximately 5,000 attendees. It has a main exhibit hall and an ancillary hall, offices and meetings rooms, arranged in three underground levels that were designed to blend into the landscape extending from the School of Law of the University of Buenos Aires to Parque Thays.

Also, La Rural S.A. continues to work on the consolidation of the commercial development of the “Convention Center of Punta del Este,” through its equity participation in the company that holds the concession until 2041.

As a result of the measures adopted by Argentina’s national Government in response to the COVID-19 pandemic, La Rural, the Buenos Aires and Punta del Este Convention Centers have been closed since March 20, 2020, the date on which social, preventive, and mandatory isolation was decreed by the government of Argentina to combat the impact of the COVID-19. All the planned congresses are suspended, a large part of the fairs and conventions were postponed, while the shows scheduled at the DirecTV Arena were mostly canceled. The reopening date of these establishments is uncertain, as well as the future agenda of fairs, conventions and shows.

TGLT (real estate)

TGLT is a real estate company listed on the BYMA which is mainly engaged in residential development projects in Argentina and Uruguay. We hold a 30.2% interest in TGLT.

On August 1, 2017, we exercised our preemptive subscription and accretion rights and purchased 22,225,000 Subordinated Notes Convertible into Newly Issued Shares of TGLT for an aggregate amount of USD 22,225,000 (USD 1.00 par value) due 2027.

On August 8, 2019 has executed with TGLT certain contracts tending to collaborate in the process of financial restructuring of said company through its recapitalization. On December 11, 2019, and in compliance with the contracts signed with TGLT on August 8, 2019, IRSA CP made the exchange of all the Convertible Notes it had of TGLT. Likewise, it subscribed preferred shares making a contribution in kind of the 100% of the shares of the company La Maltería S.A., owner of the property known as Maltería Hudson, for a value of USD 24 million.

As a result of the aforementioned exchange and capitalization, IRSA Commercial Properties obtained 21,600,000 Class A preferred shares and 24,948,798 Class B preferred shares that are added to its holding of 3,003,990 ordinary shares.

On February 10, 2020, the TGLT Board of Directors determined the mandatory conversion of its Convertible Negotiable Obligations and preferred shares with immediate effect, this is how IRSA CP converted its Class A and B preferred shares of TGLT into ordinary shares of the company. As a consequence of this transaction, IRSA CP owns as of March 31, the amount of 279,502,813 ordinary shares of TGLT, representing 30.2% of its capital stock.

DirecTV Arena

DirecTV Arena is an indoor stadium with unique features designed to host top-level international events, including sporting events and concerts. The price set for the transaction was USD 4.2 million. Through these types of investments, our equity stake in LRSA and through the new Convention Center of the City of Buenos Aires, we continue to expand our exposure to conventions, sporting events and entertainment, which could generate synergies with our core shopping mall business.

As is publicly known, the DirecTV Arena stadium has been closed since March 20, the date on which social, preventive, and mandatory isolation was decreed in Argentina due to COVID-19. All the planned congresses are suspended, a large part of the fairs and conventions were postponed, while the shows scheduled at the DirecTV Arena were mostly canceled. The reopening date of these establishments is uncertain, as well as the future agenda of fairs, conventions and shows.

Pareto

On October 8, 2018, the company Pareto S.A. was incorporated, with the social purpose of design, programming and development of software, mobile and web applications.

As of September 30, 2020, IRSA CP’s participation in PARETO S.A. It was 69.96% and after the closing it increased its stake to 91.96%.

Pareto is a 100% digital customer loyalty system that promotes benefits and discounts in all our shopping mall.

Appa, Pareto’s app is a 100% digital customer loyalty system that promotes benefits and discounts across all our shopping malls. The app is also used to pay Parking lots giving customers the most convenient and fast check out available. The plan is to extend this frictionless payments method in gastronomic and apparel stores too.

Legal Framework

Regulation and Government Supervision

The laws and regulations governing the acquisition and transfer of real estate, as well as municipal zoning ordinances, apply to the development and operation of our properties. Currently, Argentine law does not specifically regulate shopping mall leases. Since our shopping mall leases generally diverge from ordinary commercial leases, we have developed contractual provisions which are tailored to the commercial relationship with our shopping mall tenants.

Leases

Argentine law imposes certain restrictions on property owners, including:

a minimum lease term of three years for all purposes, except in particular cases such as embassy, consulate or international organization venues, room with furniture for touristic purposes for less than three months, custody and bailment of goods, exhibition or offering of goods in fairs or in cases where due to the circumstances, the subject matter of the lease requires a shorter term.

Lease term limits

Under the Argentine Civil and Commercial Code lease terms may not exceed 20 years (for residential purpose) or fifty years (all other purposes). Generally, terms in our leases range from three to ten years.

Rescission rights

The Argentine Civil and Commercial Code provides that tenants may terminate leases with other destiny than home destiny, early after the first six months of the effective date. Such termination is subject to penalties which range from one to one and a half months of rent. If the tenant terminates the agreement during the first year of the lease, the penalty is one and a half month’s rent and if termination occurs after the first year of lease, the penalty is one month’s rent.

Other

The Argentine Civil and Commercial Code, among other rules, repealed the Urban Lease Law No. 23,091, which set forth a rule similar to the one described above, but established the obligation to give at least 60 days’ prior notice of exercise of the tenant’s unilateral termination right. There are no court rulings to date with respect to the new regulations related to: (i) the tenant’s unilateral termination right; or (ii) the possibility of agreeing a penalty different from that described above upon such termination.

While current policy discourages government regulation of leases, there can be no assurance that additional regulations will not be imposed in the future by Congress, including regulations similar to those previously in place. Furthermore, most of our leases provide that the tenants pay all costs and taxes related to the property in proportion to their respective leasable areas. In the event of a significant increase in such costs and taxes, the government may respond to political pressure to intervene by regulating this practice, thereby adversely affecting our rental income.

The Argentine Civil and Commercial Code enables landlords to pursue what is known as an “executory proceeding” if a tenant fails to pay rent when due. In executory proceedings, debtors have fewer defenses available to prevent foreclosure, making these proceedings substantially shorter, as the origin of the debt is not in question and the trial should focus on the formalities of the contract. The Argentine Civil and Commercial Code also permits special eviction proceedings, which are carried out in the same way as ordinary proceedings. The Argentine Civil and Commercial Code also requires that a residential tenant receive at least 10 days’ prior notice when a landlord demands payment of rent due if a breach prior to eviction occurs but does not impose any such requirement for other leases. However, court cases pending resolution and numerous procedural hurdles have resulted in significant delays to eviction proceedings in the commercial context, which generally last from six months to two years from the date of filing of the suit for eviction.

Development and use of the land

In the City of Buenos Aires, where the vast majority of our properties are located, we are subject to the following regulations:

Buenos Aires Urban Planning Code

The Buenos Aires Urban Planning Code (Código de Planeamiento Urbano de la Ciudad de Buenos Aires) generally restricts the density and use of property and regulates physical features of improvements to property, such as height, design, set back and overhang, consistent with the city’s urban planning policy. The Secretary of Urban Planning of the City of Buenos Aires (Secretaría de Planeamiento Urbano) is responsible for implementing and enforcing the Buenos Aires Urban Planning Code.

Buenos Aires Building Code

The Buenos Aires Building Code (Código de Edificación de la Ciudad de Buenos Aires) complements the Buenos Aires Urban Planning Code regulating the use and development of property in the City of Buenos Aires. The Building Code requires developers to obtain building permits, including submitting architectural plans for review of the Secretary of Work and Public Services, to monitor regulatory compliance.

Buenos Aires Authorizations and Licenses Code

The Authorizations and Licenses Code (Código de Habilitaciones de la Ciudad de Buenos Aires) sets forth the conditions under which authorizations or licenses to operate may be granted. The General Bureau of Authorizations and Licenses is responsible for implementing and enforcing the Authorizations and Licenses Code. Outside the city of Buenos Aires, our real estate activities are subject to similar municipal zoning, building, occupation and environmental regulations, which must also comply with national standards. In some jurisdictions we may also be subject to regulation of large commercial areas, which require approval of the location of these areas. We believe that all of our real estate properties are in material compliance with relevant laws, ordinances and regulations.

Sales and ownership

Real Estate Installment Sales Law

The Real Estate Installment Sales Law No. 14,005, as amended by Law No. 23,266 and Decree No. 2015/85, or “Real Estate Installment Sales Act,” imposes a series of requirements on contracts for the sale of subdivided real estate property including, for example, that the purchase price for a property is payable in installments. The law requires, among other things:

Registration of intent to sell the property in subdivided plots with the Real Estate Registry in the jurisdiction where the property is located. Registration is only permitted for unencumbered property. Mortgaged property may only be registered if creditors agree to divide the debt in accordance with subdivided plots. Creditors may be judicially compelled to agree to the partition.

Preliminary registration with the Real Estate Registry of the purchase instrument within 30 days after its execution.

Once the property is registered, the installment sale must be completed in a manner consistent with the Real Estate Installment Sales Act. If a dispute arises over the title between the purchaser and third party creditors of the seller, the installment purchaser who has duly registered the purchase instrument will have title to the plot. The purchaser can demand conveyance of title after at least 25% of the purchase price has been paid, although the seller may record a mortgage over the subject property to secure payment of the balance of the purchase price.

After paying of 25% of the purchase price or advancing of at least 50% of construction, the Real Estate Installment Sales Act prohibits termination of the sales contract for failure by the purchaser to pay the balance of the purchase price but gives the seller the right to enforce under any mortgage on the property.

Buildings Law

Buildings Law No. 19,724 (Ley de Pre horizontalidad) was repealed by the Argentine Civil and Commercial Code which provides that for purposes of execution of sales agreements for units under construction, the owner or developer must purchase insurance in favor of prospective purchasers against the risk of frustration of the development pursuant to the agreement for any reason. A breach of this obligation precludes the owner from exercising any right against the purchaser—such as demanding payment of any outstanding installments due—unless he/she fully complies with their obligations, but does not prevent the purchaser from exercising its rights against the seller.

Protection of the Disabled

The Law for Protection of the Disabled No. 22,431, enacted on March 16, 1981, as amended, provides that properties under construction or that are being remodeled must provide access for handicapped persons. Public spaces, entrances, hallways, elevators and common use facilities must be designed to provide mobility for impaired individuals. Buildings developed before enactment of the Protection for the Disabled Law must be reformatted to provide requisite access. Buildings that, because of their architectural design, may not be adapted to the use by the physically impaired, are exempted from these requirements.

Other regulations

Consumer relations, consumer or end user protection

Article 42 of the Argentine Constitution establishes that consumers and users of goods and services have a right to protection of health, safety and economic interests in a consumer relationship. Consumer Protection Law No. 24,240, as amended, regulates several issues concerning the protection of consumers and end users in a consumer relationship, in the arrangement and execution of contracts. The Consumer Protection Law, and the applicable sections of the Argentine Civil and Commercial Code are intended to regulate the constitutional right conferred under the Constitution on the weakest party to the consumer relationship and prevent potential abuses deriving from the stronger bargaining position of vendors of goods and services in a market economy where standard form contracts are widespread.

These laws deem void and unenforceable contractual provisions included in consumer contracts, that:

●

deprive obligations of their nature or limit liability for damages;

●

imply a waiver or restriction of consumer rights and an extension of seller rights; and

●

impose the shifting of the burden of proof from the consumer to the seller in order to protect the consumers.

In addition, the Consumer Protection Law imposes penalties ranging from warnings to the forfeiture of concession rights, privileges, tax regimes or special credits to which the sanctioned party may be entitled, including closing down establishments for a term of up to 30 days.

The Consumer Protection Law and the Argentine Civil and Commercial Code define consumers or end users as the individuals or legal entities that acquire or use goods or services, free of charge or for a price for their own final use or benefit or that of their family or social group. The protection under the laws afforded to consumers and end users encompasses the entire consumer relationship, from the offering of the product or service, to cover more than just those relationships established by means of a contract. Providers of goods and services include those who produce, import, distribute or commercialize goods or supply services to consumers or users (but excludes professionals whose services require a college degree or higher who are required to register in officially recognized professional organizations).

The Argentine Civil and Commercial Code defines a consumer agreement as one that is entered into between a consumer or end user and an individual or entity that manufactures goods or provides services to consumers for private, family or social use. The Consumer Protection Law imposes a range of penalties for violation of its provisions, from warnings to the forfeiture of concession rights, and establishes joint and several liability of each participant in the chain of distribution or whose trademark on the thing or service for damages caused to consumers derived from a defect or risk inherent in the thing or the provision of a service.

The Consumer Protection Law excludes the services supplied by professionals that require a college degree and registration in officially recognized professional organizations or by a governmental authority. However, this law regulates the advertisements that promote the services of such professionals.

The Consumer Protection Law determines that the information contained in the offer addressed to undetermined prospective consumers binds the offeror during the period when the offer is made until its public revocation. Further, it determines that specifications included in advertisements, announcements, prospectuses, circulars or other media bind the offeror and are considered part of the contract entered into by the consumer.

Pursuant to Resolution No. 104/2005 issued by the Secretariat of Technical Coordination reporting to the Argentine Ministry of Treasury, Consumer Protection Law adopted Resolution No. 21/2004 issued by the Mercosur’s Common Market Group, persons engaged in internet commerce must disclose precisely the characteristics of the products and/or services offered and the sale terms. Failure to comply with the terms of the offer is deemed an unjustified denial to sell and may give rise to sanctions.

On September 17, 2014, the Argentine Congress enacted Law No. 26,993 called “Conflict Resolution in Consumer Relationships System” law that provides for creation of new administrative and judicial procedures. The law created a bicameral administrative system: the Preliminary Conciliation Service for Consumer Relations (Servicio de Conciliación Previa en las Relaciones de Consumo), or “COPREC,” and the Consumer Relations Audit, and a number of courts assigned to the resolution of conflicts between consumers and providers (Fuero Judicial Nacional de Consumo). The amount of any filed claim may not exceed a fixed amount equivalent to 55 adjustable minimum wages, as determined by the Ministry of Labor, Employment and Social Security. The claim must be filed with the administrative agency. If an agreement is not reached, the claimant may file the claim in court. While COPREC is currently in full force and effect, the court system (Fuero Judicial Nacional de Consumo) is still pending. Therefore, any current claim must be filed with existing courts. A considerable number of claims pending against us are expected to be settled within the framework of this system.

Antitrust Law

Law No. 27,442, as amended, or the “Antitrust Law,” prevents collusive practices by market participants and requires administrative approval for transactions that according to the Antitrust Law constitute an economic concentration. According to this law, mergers, transfers of goodwill, acquisitions of property or rights over shares, capital or other convertible securities, or similar transactions by which the acquirer controls or substantially influences a company, are considered as an economic concentration. Whenever an economic concentration involves a company or companies and the aggregate volume of business in Argentina of the companies concerned exceeds 100 million mobile units, the respective concentration must be submitted for approval to the CNDC. The request for approval may be filed, either prior to the transaction or the implementing of the control take.

For the purpose of determining the volume of the business mentioned on the paragraph before, the CNDC will annually inform the amount in legal currency that will apply during the corresponding year. For that purpose, the CNDC will consider the mobile unit value current at the last business day of the previous year. When a request for approval is filed, the CNDC may (i) authorize the transaction, (ii) subordinate the transaction to the accomplishment of certain conditions or (iii) reject the authorization.

The Antitrust Law provides that economic concentrations in which the transaction amount and the value of the assets subject to acquisition or disposition do not exceed 20 million mobile units each do not require approval. When the amount of the transactions consummated in the preceding 12 months exceeds in aggregate 20 million mobile units or 60 million mobile units in the preceding 36 months, these transactions require CNDC approval.

As our consolidated annual sales volume and our parent’s consolidated annual sales volume exceed ARS 200.0 million, we must give notice to the CNDC of any concentration provided for under the Antitrust Law.

Money laundering

For more information about money laundering see, “Item 10. Additional Information—E. Money Laundering.”

Environmental Law

Our activities are subject to several national, provincial and municipal environmental provisions.

Article 41 of the Argentine Constitution, as amended in 1994, provides that all Argentine inhabitants have the right to a healthy and balanced environment fit for human development and have the duty to preserve it. Environmental damage shall bring about primarily the obligation to restore it as provided by applicable law. The authorities shall control the protection of this right, the rational use of natural resources, the preservation of the natural and cultural heritage and of biodiversity and shall also provide for environmental information and education. The National Government shall establish minimum standards for environmental protection whereas Provincial and Municipal Governments shall fix specific standards and regulatory provisions.

On November 6, 2009, the Argentine Congress passed Law No. 25,675. Such law regulates the minimum standards for the achievement of a sustainable environment and the preservation and protection of biodiversity and fixes environmental policy goals.

Law No. 25,675 establishes the activities that will be subject to an environmental impact assessment procedure and certain requirements applicable thereto. In addition, such Law sets forth the duties and obligations that will be triggered by any damage to the environment and mainly provides for restoration of the environment to its former condition or, if that is not technically feasible, for payment of compensation in lieu thereof. Such Law also fosters environmental education and provides for certain minimum reporting obligations to be fulfilled by natural and legal entities.

In addition, the CNV Rules require the obligation to report to the CNV any events of any nature and fortuitous acts that seriously hinder or could potentially hinder performance of our activities, including any events that generate or may generate significant impacts on the environment, providing details on the consequences thereof.

The new Argentine Civil and Commercial Code has introduced as a novel feature the acknowledgement of collective rights, including the right to a healthy and balanced environment. Accordingly, the Argentine Civil and Commercial Code expressly sets forth that the law does not protect an abusive exercise of individual rights if such exercise could have an adverse impact on the environment and the rights with a collective impact in general.

Environmental matters

We consistently strive to act responsibly regarding protection of the environment in the management of our operating activities by preventing and minimizing the potential adverse environmental impacts of our activities. We have adopted an environmental impact policy, which is used as a reference for the realization of our investments. We are subject to environmental legislation under a series of laws, ordinances, norms, and national, provincial and municipal regulations of Argentina. Environmental obligations vary depending on the project site, the site’s environmental conditions, current and prior uses, and the activity proposed to be developed. Compliance with environmental laws may result in project delays or impose additional requirements that may result in substantial additional costs that may adversely affect our commercial activities. Before purchasing land or carrying out an investment on a plot of land, we carry out an environmental assessment of the parcel to identify possible environmental contingencies and analyze the possible environmental impact of the investment or the development to be carried out. Historically, our operations have not been negatively affected by the existence or potential existence of pollutants, nor by the failure to obtain environmental approvals or permits.

We intend to continue implementing plans that enhance our monitoring activities, in line with our commitment to and respect for the environment, our compliance obligations and with existing regulations, while seeking to optimize the use of resources.

Organizational Structure

The following table presents information relating to our ownership interest and the percentage of our consolidated total net revenues represented by our subsidiaries as of September 30, 2020:

			% of<br>ownership interest held by the Group
Name<br>of the entity	Country	Main<br>activity	As<br>of September 30, 2020
IRSA’s<br>direct interest:
IRSA CP(1)	Argentina	Real<br>estate	80.65%
E-Commerce Latina<br>S.A.	Argentina	Investment	100.00%
Efanur<br>S.A.	Uruguay	Investment	100.00%
Hoteles Argentinos<br>S.A.U.	Argentina	Hotel	100.00%
Inversora<br>Bolívar S.A.	Argentina	Investment	100.00%
Llao Llao Resorts<br>S.A.(2)	Argentina	Hotel	50.00%
Nuevas Fronteras<br>S.A.	Argentina	Hotel	76.34%
Palermo Invest<br>S.A.	Argentina	Investment	100.00%
Ritelco<br>S.A.	Uruguay	Investment	100.00%
Tyrus<br>S.A.	Uruguay	Investment	100.00%
U.T. IRSA y<br>Galerías Pacifico(2)	Argentina	Investment	50.00%
IRSA<br>CP’s direct interest:
Arcos del Gourmet<br>S.A.	Argentina	Real<br>estate	90.00%
Emprendimiento<br>Recoleta S.A.	Argentina	Real<br>estate	53.68%
Fibesa<br>S.A.(3)	Argentina	Real<br>estate	100.00%
Panamerican Mall<br>S.A.	Argentina	Real<br>estate	80.00%
Shopping<br>Neuquén S.A.	Argentina	Real<br>estate	99.95%
Torodur<br>S.A.	Uruguay	Investment	100.00%
EHSA	Argentina	Investment	70.00%
Centro de<br>Entretenimiento La Plata	Argentina	Real<br>estate	100.00%
Pareto<br>S.A.	Argentina	design and software<br>development	69.69%
Tyrus<br>S.A.’s direct interest:
DFL and DN<br>BV	Bermuda’s /<br>Netherlands	Investment	97.04%
I Madison<br>LLC	USA	Investment	—
IRSA Development<br>LP	USA	Investment	—
IRSA International<br>LLC	USA	Investment	100.00%
Jiwin<br>S.A.	Uruguay	Investment	100.00%
Liveck<br>S.A.	Uruguay	Investment	100.00%
Real Estate<br>Investment Group V LP (REIG V)	Bermuda’s	Investment	—
Real Estate<br>Strategies LLC	USA	Investment	100.00%
Efanur<br>S.A.’s direct interest:
Real Estate<br>Investment Group VII LP (REIG VII)	Bermuda’s	Investment	100.00%

(1) Includes interest held through E-Commerce Latina S.A. and Tyrus S.A..

(2) The Company has consolidated the investment in Llao Llao Resorts S.A. and UT IRSA and Galerías Pacífico considering its equity interest and a shareholder agreement that confers it majority of votes in the decision making process.

(3) Includes interest held through Ritelco S.A. and Torodur S.A.

Except for the aforementioned items the percentage of votes does not differ from stake.

The Company takes into account both quantitative and qualitative aspects in order to determine which non-controlling interests in subsidiaries are considered significant.

Property, Plant and Equipment

In the ordinary course of business, we lease property or spaces for administrative or commercial use both in Argentina under operating lease arrangements. The agreements include several clauses, including but not limited, to fixed, variable or adjustable payments.

The following table sets forth certain information about our properties for the Operation Center in Argentina as of September 30, 2020:

Property(6)		Leasable/<br>Sale sqm / Rooms	Location	Net<br>Book Value ARS(2)	Use	Occupancy<br>rate
República<br>Building(3)	Apr-08	19,885	City of Buenos<br>Aires	12,383	Office<br>Rental	86.9%
BankBoston<br>Tower(3)(13)	Aug-07	7,383	City of Buenos<br>Aires	3,250	Office<br>Rental	85.6%
Bouchard<br>551	Mar-07	–	City of Buenos<br>Aires	427	Office<br>Rental	–
Intercontinental<br>Plaza Building(3)	Nov-97	2,979	City of Buenos<br>Aires	1,566	Office<br>Rental	100%
Bouchard<br>710(3)(14)	Jun-05	-	City of Buenos<br>Aires	-	Office<br>Rental	-
Dot<br>Building(3)	Nov-06	11,242	City of Buenos<br>Aires	5,834	Office<br>Rental	84.9%
Zetta<br>Building	Jun-19	32,173	City of Buenos<br>Aires	17,028	Office<br>Rental	97.5%
Suipacha<br>664	Nov-91	11,465	City of Buenos<br>Aires	2,067	Office<br>Rental	31.20%
Phillips<br>Building	Jun-17	8,017	City of Buenos<br>Aires	3,683	Office<br>Rental	85.80%
Catalinas<br>Building	Jun-20	N/A	City of Buenos<br>Aires	18,698	Office<br>Rental	N/A
San Martín<br>plot (ex Nobleza Picardo)	May-11	109,610	Province of Buenos<br>Aires, Argentina	7,594	Other<br>Rentals	22.5%
Other<br>Properties(5)	N/A	N/A	City and Province<br>of Buenos Aires / Detroit U.S	6,274	Other<br>Rentals	N/A
	N/A
Abasto<br>Shopping(3)	Nov-99	36,761	City of Buenos<br>Aires, Argentina	7,391	Shopping<br>Mall	94.6%
Alto Palermo<br>Shopping(3)	Dec-97	18,655	City of Buenos<br>Aires, Argentina	8,949	Shopping<br>Mall	94.5%
Alto<br>Avellaneda(3)	Dec-97	38,801	Province of Buenos<br>Aires, Argentina	5,043	Shopping<br>Mall	96.2%
Alcorta<br>Shopping(3)(12)	Jun-97	15,725	City of Buenos<br>Aires, Argentina	5,510	Shopping<br>Mall	97.4%
Patio<br>Bullrich(3)	Oct-98	11,396	City of Buenos<br>Aires, Argentina	2,534	Shopping<br>Mall	89.7%
Alto<br>Noa(3)	Nov-95	19,313	City of Salta,<br>Argentina	1,255	Shopping<br>Mall	99.6%
Mendoza<br>Plaza(3)	Dec-94	43,123	Mendoza,<br>Argentina	2,101	Shopping<br>Mall	96.0%
Alto<br>Rosario(3)	Dec-04	33,682	Santa Fe,<br>Argentina	4,458	Shopping<br>Mall	98.3%
Córdoba<br>Shopping –Villa Cabrera(3)(11)	Dec-06	15,361	City of<br>Córdoba, Argentina	1,374	Shopping<br>Mall	98.1%
Dot Baires<br>Shopping(3)	May-09	48,805	City of Buenos<br>Aires, Argentina	5,669	Shopping<br>Mall	71.7%
Soleil Premium<br>Outlet(3)	Jul-10	15,156	Province of Buenos<br>Aires, Argentina	2,013	Shopping<br>Mall	95.9%
La Ribera<br>Shopping(3)	Aug-11	10,530	Santa Fe,<br>Argentina	630	Shopping<br>Mall	97.4%
Distrito<br>Arcos (3)	Dec-14	14,335	City of Buenos<br>Aires, Argentina	2,037	Shopping<br>Mall	95.9%
Alto<br>Comahue(3)	Mar-15	11,702	Neuquén,<br>Argentina	1,366	Shopping<br>Mall	93.9%
Patio<br>Olmos(3)	Sep-97	–	City of<br>Córdoba, Argentina	1,240	Shopping<br>Mall	N/A
Caballito Plot of<br>Land(3)	Nov-97	–	City of Buenos<br>Aires	4,353	Land<br>Reserve	N/A
Santa María<br>del Plata	Oct-97	116,100	City of Buenos<br>Aires	7,594	Other<br>Rentals	17.3%
Catalinas<br>Building	May-10	–	City of Buenos<br>Aires	630	Offices and Other<br>Rentals	N/A
Luján plot of<br>land(3)	May-08	1,160,000	Province of Buenos<br>Aires, Argentina	1,326	Mixed<br>uses	N/A
Other Land<br>Reserves(4)	N/A	N/A	City and Province<br>of Buenos Aires	9,091	Land<br>Reserve	N/A
Building annexed to<br>Alto Palermo Shopping	N/A	N/A	City of Buenos<br>Aires	2,160	Properties under<br>development	N/A
Other<br>Developments(15)	N/A	N/A	City of Buenos<br>Aires	263	Properties under<br>development	N/A
Intercontinental<br>Hotel(7)(12)	Nov-97	313	City of Buenos<br>Aires	640	Hotel	1.4%
Libertador<br>Hotel(8)(12)	Mar-98	200	City of Buenos<br>Aires	309	Hotel	N/A
Llao Llao<br>Hotel(9)(10)(12)	Jun-97	205	City of<br>Bariloche	981	Hotel	N/A

(1) Total leasable area for each property. Excludes common areas and parking spaces.

(2) Cost of acquisition or development plus improvements, less accumulated depreciation, less allowances for our Hotels (considering inflation adjustment). The remaining properties are valued at fair value.

(3) Through IRSA CP.

(4) Includes the following land reserves: Pontevedra plot; Mariano Acosta Plot, San Luis Plot, Pilar plot and Merlo plot (through IRSA) and Intercontinental Plot, the building and plot annexed to Dot, Mendoza Plot, Mendoza 2.992 East Av. Plot and La Plata plot (through IRSA CP).

(5) Includes the following properties: Anchorena 665, Anchorena 545 (Chanta IV), Zelaya 3102, 3103 y 3105, Madero 1020, La Adela, Paseo del Sol, Libertador 498, Beruti Parking Space Santa María del Plata and Detroit properties.

(6) Percentage of occupation of each property. Land reserves are assets that the company keeps in the portfolio for future developments.

(7) Through Nuevas Fronteras S.A.

(8) Through Hoteles Argentinos S.A.U.

(9) Through Llao Llao Resorts S.A.

(10) Includes “Terreno Bariloche.”

(11) The cinema building located at Córdoba Shopping – Villa Cabrera is included in Investment Properties, which is encumbered by a right of antichresis as a result of loan due to Empalme by NAI INTERNACIONAL II Inc. Includes “Ocampo parking spaces”

(12) Express in number of rooms.

(13) On November 5, 2020, our subsidiary IRSA CP sold four floor and fifteen parking spaces and on November 12, 2020, it sold three floors and fifteen parking spaces. For more information, see “Recent Developments – Boston Tower Sale.”

(14) On July 30, 2020, IRSA CP sold the entire building.

(15) Includes the following developments: EH UT, PH Office Park, Phillips Building and Alto Avellaneda.

OPERATING AND FINANCIAL REVIEW AND PROSPECTS

A. Operating Results

The following management’s discussion and analysis of our financial condition and results of operations should be read together with “Selected Consolidated Financial Data” and Our Audited Consolidated Financial Statements and related notes appearing elsewhere in this Form 6-K. This discussion and analysis of our financial condition and results of operations contains forward-looking statements that involve risks, uncertainties and assumptions. These forward-looking statements include such words as, “expects,” “anticipates,” “intends,” “believes” and similar language. Our actual results may differ materially and adversely from those anticipated in these forward-looking statements as a result of many factors, including without limitation those set forth elsewhere in this Form 6-K. See Item 3 “Key Information – D. Risk Factors” for a more complete discussion of the economic and industry-wide factors relevant to us.

General

We prepare our Audited Consolidated Financial Statements in pesos and in accordance with IFRS, as issued by the IASB, and with CNV Rules. Our Audited Consolidated Financial Statements included elsewhere in this Form 6-K have been recast to: (a) present the audited consolidated financial statements in the measuring unit current at the end of the reporting period as of September 30, 2020 (the most recent period for which financial statements were included in this Form 6-K); and (b) reflect IRSA’s loss of control of IDBD and DIC on September 25, 2020 and, consequently, the deconsolidation of such investees since that date. As a result, income and expenses from our Operations Center in Israel have been presented within Discontinued Operations in the consolidated statements of income and other comprehensive income for the years ended June 30, 2020, 2019 and 2018. Accordingly, the following management’s discussion and analysis of our financial condition and results of operations will be focused primarily on our Operations Center in Argentina.

Our Audited Consolidated Financial Statements and the financial information included elsewhere in this Form 6-K have been prepared in accordance with IFRS. We have determined that, as of July 1, 2018, the Argentine economy qualifies as a hyperinflationary economy according to the guidelines of IAS 29 since the total cumulative inflation in Argentina in the 36 months prior to July 1, 2018 exceeded 100%. IAS 29 requires that the financial information recorded in a hyperinflationary currency be adjusted by applying a general price index and expressed in the measuring unit (the hyperinflationary currency) current at the end of the reporting period. Therefore, our Audited Consolidated Financial Statements included in this Form 6-K have been adjusted by applying a general price index. See “Risk Factors—Risks Relating to Argentina—A high level of uncertainty with regard to these economic variables, and a general lack of stability in terms of inflation, could have a negative impact on economic activity and adversely affect our financial condition

Overview

We are engaged, directly and indirectly through subsidiaries and joint ventures, in a range of diversified activities, primarily in real estate, including:

i. the acquisition, development and operation of shopping malls,

ii. the acquisition and development of office buildings and other non-shopping mall properties primarily for rental purposes,

iii. the development and sale of residential properties,

iv. the acquisition and operation of luxury hotels,

v. the acquisition of undeveloped land reserves for future development or sale, and

vi. selective investments outside Argentina.

Effects of the global macroeconomic factors

Until September 25, 2020, most of our assets were located in Israel and Argentina. Upon the loss of control on IDBD and DIC, we conduct our operations mostly in Argentina. Therefore, our financial condition and the results of our operations, as presented in our Audited Consolidated Financial Statements, are significantly dependent upon economic conditions prevailing in Argentina.

The table below shows Argentina’s GDP, inflation rates, dollar exchange rates, the appreciation (depreciation) of the Peso against the U.S. dollar, and the appreciation (depreciation) of the NIS against the U.S. dollar for the indicated periods (inter-annual information—which is the 12 month period preceding the dates presented—is presented to conform to our fiscal year periods).

	As of September 30,	Fiscal year ended June 30,
	2020	2020	2019	2018
	(year-to-year data)
GDP (1)	(10.2)%	(19.1)%	(3.7)%	2.0%
Inflation<br>(IPIM)(2)	11.7%	39.7%	60.8%	44.1%
Inflation<br>(CPI)	7.6%	42.8%	55.8%	29.5%
Depreciation of the<br>Peso against the U.S. dollar	(8.2)%	(66.1)%	(47.1)%	(73.7)%
Average exchange<br>rate per USD1.00(3)	ARS 76.1800	ARS 70.3600	ARS 42.3630	ARS 28.8000
Appreciation/<br>(depreciation) of the NIS against the U.S. Dollar		3.0%	2.4%	(4.8)%

(1) Represents inter-annual growth of the last twelve months GDP average at constant prices (2004).

(2) IPIM (Índice de Precios Internos al por Mayor) is the wholesale price index as measured by the Argentine Ministry of Treasury.

(3) Represents average of the selling and buying exchange rate quoted by Banco de la Nación Argentina as of June 30, 2020. As of December 22, 2020, the exchange rate was 83.2500 per U.S. Dollar.

Source: INDEC and Banco de la Nación Argentina.

Argentine GDP contracted 10.2% during the third quarter of 2020 fiscal year, compared to the third quarter of 2019. Nationally, shopping mall sales decreased 82.2% in fiscal 2020 compared to fiscal 2019. As of June 30, 2020, the unemployment rate was at 13.1% of the country’s economically active population compared to 10.6% as of June 30, 2019. The monthly estimate of economic activity (“EMAE”) as of June 30, 2020, contracted by 12.3% compared to the same month in 2019. In the second quarter of 2020, the activity rate was 38.4%, the employment rate was 33.4% and the unemployment rate was 13.1%.

In the context of the health emergency related to the COVID-19 pandemic, the main impact on the labor market was verified in the dynamics of the employment rate (TE), which measures the proportion of employed persons in relation to the total population. The second quarter of 2020 showed a drop of 8.8 percentage points (p.p.) compared to the first quarter of the year and of 9.2 p.p. compared to the second quarter of 2019, driven by the lower proportion of people who were able to report to work. Due to COVID-19 pandemic, total sales at current prices in the month of June 2020 relevant to the survey reached a total of ARS 2,841.6 million, which represents a decrease of 82.2% compared to the month of June 2019.

Changes in short- and long-term interest rates, unemployment and inflation rates may reduce the availability of consumer credit and the purchasing power of individuals who frequent shopping malls. These factors, combined with low GDP growth, may reduce general consumption rates at our shopping malls. Since most of the lease agreements at our shopping malls, our main source of revenue, require tenants to pay a percentage of their total sales as rent, a general reduction in consumption may reduce our revenue. A reduction in the number of shoppers at our shopping malls and, consequently, in the demand for parking, may also reduce our revenues from services rendered.

Regarding Israel’s economy, and based on information published by OECD, despite a decline in residential investment, activity remained solid at the beginning of 2018, with strong public consumption and good export performance, particularly of services. After picking up to 3.3% in 2017, growth is projected to be around 3.7% in 2018 and 3.6% in 2019. Rising wage pressures are projected to lead to a steady increase in inflation.

Effects of inflation

The following are annual inflation rates during the fiscal years indicated, based on information published by the INDEC, an entity dependent of the Argentine Ministry of Treasury.

	Consumer price index	Wholesale price index
	(year-to-year data)
Fiscal Year ended June 30,
2018	29.5%	44.1%
2019	55.8%	60.8%
2020	42.8%	39.7%
As of September<br>30, 2020	7.6%	11.7%

The current structure of IRSA CP’s leases contracts for shopping mall tenants generally include provisions that provide for payment of variable rent, which is a percentage of the IRSA CP’s shopping mall tenant’s sales. Therefore, the projected cash flows for these shopping malls generally are highly correlated with GDP growth and consumption power.

For the leases of spaces at our shopping malls we use for most tenants a standard lease agreement, the terms and conditions of which are described below. However, our largest tenants generally negotiate better terms for their respective leases. No assurance can be given that lease terms will be as set forth in the standard lease agreement.

The rent specified in our leases generally is the higher of (i) a monthly Base Rent and (ii) a specified percentage of the store’s monthly gross sales, which generally ranges between 2% and 10% of such sales. In addition, pursuant to the rent escalation clause in most of our leases, a tenant’s Base Rent generally increases between 10% and 15% on a semi-annual and cumulative basis from the seventh (7th) month following effectiveness of the lease. Although many of our lease agreements contain price adjustment provisions, these are not based on an official index nor do they reflect the inflation index. In the event of litigation regarding these adjustment provisions, there can be no assurance that we may be able to enforce such clauses contained in our lease agreements. See “Information of the Company—Business Overview—Our Shopping Malls—Principal Terms of our Leases.”

Continuing increases in the rate of inflation are likely to have an adverse effect on our operations. Although higher inflation rates in Argentina may increase minimum lease payments, given that tenants tend to pass on any increases in their expenses to consumers, higher inflation may lead to an increase in the prices our tenants charge consumers for their products and services, which may ultimately reduce their sales volumes and consequently the portion of rent we receive based on our tenants’ gross sales.

In addition, we measure the fair market value of our shopping malls based upon the estimated cash flows generated by such assets which, as discussed in previous paragraphs, is directly related to consumer spending since a significant component of the rent payment received from our tenants is tied to the sales realized by such tenants (i.e. is a percentage of the sales of our tenants). Therefore, macroeconomic conditions in Argentina have an impact in the fair market value of our shopping malls as measured in pesos. Specifically, since our tenants’ products have been adjusted (increased) to account for inflation of the peso, our expected cash flows from our shopping malls have similarly increased in nominal terms since rent is largely dependent on sales of our tenants in pesos.

Seasonality

Our business is directly affected by seasonality, influencing the level of our tenants’ sales. During Argentine summer holidays (January and February) our tenants’ sales typically reach their lowest level, whereas during winter holidays (July) and in Christmas (December) they reach their maximum level. Clothing retailers generally change their collections in spring and autumn, positively affecting our shopping malls’ sales. Discount sales at the end of each season are also one of the main seasonal factors affecting our business. See “Item 5.A. Operating Results – The Ongoing COVID-19 Pandemic.”

In Israel, the retail segment business’s results are subject to seasonal fluctuations as a result of the consumption behavior of the population proximate to the Passover holidays (March and/or April) and Rosh Hashanah and Sukkoth holidays (September and/or October). This also affects the balance sheet values of inventory, customers and suppliers. Revenues from cellular services are usually affected by seasonality with the third quarter of the year characterized by higher roaming revenues due to increased incoming and outgoing tourism.

Effects of interest rate fluctuations

Most of our U.S. dollar-denominated debt accrues interest at a fixed rate. An increase in interest rates will result in a significant increase in our financing costs and may materially affect our financial condition or our results of operations.

In addition, a significant increase of interest rates could deteriorate the terms and conditions in which our tenants obtain financing from banks and financial institutions in the market. As a consequence of that, if they suffer liquidity problems the collection of our lease contracts could be affected by an increase in the level of delinquency.

Effects of foreign currency fluctuations

A significant portion of our financial debt is denominated in U.S. dollars. Therefore, a devaluation or depreciation of the peso against the U.S. dollar would increase our indebtedness measured in pesos and materially affect our results of operations. Foreign currency exchange restrictions imposed by the Argentine government could prevent or restrict our access to U.S. dollars, affecting our ability to service our U.S. dollar denominated- liabilities.

In addition, contracts for the rental of office buildings are generally stated in U.S. dollars, so a devaluation or depreciation of the peso against the U.S. dollar would increase the risk of delinquency on our lease receivables.

As discussed above, we calculate the fair market value of our office properties based on comparable sales transactions. Typically real estate transactions in Argentina are transacted in U.S. dollars. Therefore, a devaluation or depreciation of the peso against the U.S. dollar would increase the value of our real estate properties measured in pesos and an appreciation of the peso would have the opposite effect. In addition, foreign currency exchange restrictions imposed by Argentine government could prevent or restrict the access to U.S. dollars for the acquisition of real estate properties, which are denominated and transacted in U.S dollars in Argentina, that could affect our ability to sell or acquire real estate properties and could have an adverse impact in real estate prices.

For more information about the evolution of the U.S dollar / Peso exchange rate, see “Exchange Rate and Exchange Controls.”

Fluctuations in the market value of our investment properties as a result of revaluations

Currently, our interests in investment properties are revalued quarterly. Any increase or decrease in the fair value of our investment properties, based on appraisal reports prepared by appraisers, is recorded in our consolidated statement of comprehensive income for the fiscal year during which the revaluation occurs. The revaluation of our properties may therefore result in significant fluctuations in the results of our operations.

Property values are affected by, among other factors, a) shopping malls, which are mainly impacted by the discount rate used (WACC), the projected GDP growth and the projected inflation and devaluation for future periods and b) office buildings, which are mostly impacted by the supply and demand of comparable properties and the U.S. dollar / peso exchange rate at the reporting period, as office buildings fair value is generally established in U.S. dollars For example:

●

during the 2018 fiscal year there was a 73.5% depreciation of the peso from ARS 16.63 to USD1.00 as of June 30, 2017 to ARS 28.85 to USD1.00 as of June 30, 2018.

●

during the 2019 fiscal year, there was a 47.1% depreciation of the peso from ARS 28.85 to USD1.00 as of June 30, 2018 to ARS 42.363 to USD1.00 as of June 30, 2019.

●

during the 2020 fiscal year, there was a 66.1% depreciation of the peso from ARS 42.363 to USD1.00 as of June 30, 2019 to ARS 70.36 to USD1.00 as of June 30, 2020.

●

during the first quarter of the 2021 fiscal year, there was a 8.2% depreciation of the peso from ARS 70.36 to USD 1.00 as of June 30, 2020 to ARS 76.18 to USD1.00 as of September 30, 2020.

The value of the Company investment properties is determined in U.S. dollar pursuant to the methodologies further described in “Critical Accounting Policies and estimates” and then determined in pesos (the Company functional and presentation currency).

In the past, purchases and sales of office buildings were usually settled in US dollars, However, as a consequence of the restrictions imposed by the BCRA on foreign exchange transactions, purchase and sales of office buildings are now usually settled in Argentine pesos, using an implicit exchange rate that is higher than the official one (as it was the case in the operations carried out by IRSA CP in the past few months). Therefore, IRSA CP has valued its office buildings and undeveloped parcels of land in Argentine pesos at the end of the year, considering the situation described above, which results in a gain with respect to the values previously recorded.

Factors Affecting Comparability of our Results

Comparability of information

Operations Center in Argentina

Office buildings

On June 30, 2019, IRSA CP’s Office portfolio consisted of 115,378 sqm of GLA after incorporating the recently inaugurated Zetta building. Additionally, we acquired the Maltería Hudson plot that has a surface area of 147,895 sqm and approximately 40,000 GLA at the intersection of Route 2 and Buenos Aires - La Plata highway.

On June 30, 2020, IRSA CP has acquired as an investment property the building “200 Della Paolera” located in Catalinas District in Buenos Aires. It consists of 35,208 sqm of gross leasable area over 30 office floors and includes 316 parking lots in 4 basements.

Shopping malls

During the fiscal years ended June 30, 2020 and 2019, we maintained the same portfolio of operating shopping malls. During the fiscal year ended June 30, 2019, the surface area of our Shopping Malls segment was reduced by 11,875 sqm due to the return of Buenos Aires Design, whose concession terminated in November 2018.

Operations Center in Israel

IDBD and DIC, our principal subsidiaries in the Operations Center in Israel, report their quarterly and annual results following Israeli regulations, whose filing deadlines fall after the filing deadlines in Argentina. In addition, IDBD and DIC fiscal year ends differ from our fiscal year end, consequently, we consolidate the results of operations from IDBD and DIC on a three-month lag basis adjusted for the effects of any significant transactions taking place within such period. As such, our consolidated statement of income and other comprehensive income for the year ended June 30, 2020 includes the results of IDBD and DIC for the 12-month period from April 1, 2019 to March 31, 2020, adjusted for the significant transactions that occurred between April 1, 2020 and June 30, 2020. As further described above, we lost control on IDBD and DIC on September 25, 2020 and thus, our Audited Consolidated Financial Statements included elsewhere in this Form 6-K present the results of operations of the Operations Center in Israel within Discontinued Operations.

Business Segment Reporting

IFRS 8 requires an entity to report financial and descriptive information about its reportable segments, which are operating segments or aggregations of operating segments that meet specified criteria. Operating segments are components of an entity about which separate financial information is available that is evaluated regularly by the CODM. According to IFRS 8, the CODM represents a function whereby strategic decisions are made and resources are assigned. The CODM function is carried out by the President of the Group, Mr. Eduardo S. Elsztain. Upon the acquisition of IDBD, two responsibility levels have been established for resource allocation and assessment of results of the two operations centers, through executive committees in Argentina and Israel.

Segment information is reported from two perspectives: geographic presence (Argentina and Israel) and products and services. In each operations center, the Group considers separately the various activities being developed, which represent reporting operating segments given the nature of its products, services, operations and risks. Management believes the operating segment clustering in each operations center reflects similar economic characteristics in each region, as well as similar products and services offered, types of clients and regulatory environments.

As described in “Presentation of Financial and Certain Other Information,” we lost control of IDBD and DIC on September 25, 2020 and, accordingly, we have presented the results of operations of the Operation Center in Israel within Discontinued Operations in our Audited Consolidated Financial Statements. Segment information for the years ended June 30, 2020, 2019 and 2018 and for the three-month period ended September 30, 2019, has been recast for purposes of comparability.

As from fiscal year 2018, the CODM reviews certain corporate expenses associated with each operations center in an aggregate manner and separately from each of the segments, such expenses have been disclosed in the "Corporate" segment of each operations center. Additionally, as from fiscal year 2018, the CODM reviews the offices business as a single segment and the entertainment business in an aggregate manner and separately from the offices segment. The entertainment business is presented within the "Others" segment.

Below is the segment information which was prepared as follows:

Operations Center in Argentina: Within this operations center, the Group operates in the following segments:

●

The “Shopping Malls” segment includes results principally comprised of lease and service revenues related to rental of commercial space and other spaces in the shopping malls of the Group.

●

The “Offices” segment includes the operating results from lease revenues of offices, other rental spaces and other service revenues related to the office activities.

●

The “Sales and Developments” segment includes the operating results of the development, maintenance and sales of undeveloped parcels of land and/or trading properties. Real estate sales results are also included.

●

The "Hotels" segment includes the operating results mainly comprised of room, catering and restaurant revenues.

●

The “International” segment includes assets and operating profit or loss from business related to associates Condor (hotels) and New Lipstick (offices).

●

The “Others” segment primarily includes the entertainment activities through ALG Golf Center S.A., La Rural S.A. and TGLT, and the financial activities carried out by BHSA.

●

The “Corporate” segment includes the expenses related to the corporate activities of the Operations Center in Argentina.

The CODM periodically reviews the results and certain asset categories and assesses performance of operating segments of this operations center based on a measure of profit or loss of the segment composed by the operating income plus the share of profit / (loss) of joint ventures and associates. The valuation criteria used in preparing this information are consistent with IFRS, the accounting standards used for the preparation of our Audited Consolidated Financial Statements, except for the following:

Operating results from joint ventures are evaluated by the CODM applying proportional consolidation method. Under this method, profit/loss and assets are reported in the Statement of Income and Other Comprehensive Income on a line-by-line basis, based on the percentage held in joint ventures rather than in a single item as required by IFRS. Management believes that the proportional consolidation method provides more useful information to understand the business return. On the other hand, the investment in the joint venture La Rural S.A. is accounted for under the equity method since this method is considered to provide more accurate information in this case.

Operating results from Shopping Malls and Offices segments do not include the amounts pertaining to building administration expenses and collective promotion funds (“FPC,” as per its Spanish acronym) as well as total recovered costs, whether by way of expenses or other concepts included under financial results (for example default interest and other concepts). The CODM examines the net amount from these items (total surplus or deficit between building administration expenses and FPC and recoverable expenses).

The assets’ categories examined by the CODM are: investment properties, property, plant and equipment, trading properties, inventories, right to receive future units under barter agreements, investment in associates and goodwill. The sum of these assets, classified by business segment, is reported under “assets by segment.” Assets are allocated to each segment based on the operations and/or their physical location.

Within the Operations Center in Argentina, most revenue from its operating segments is derived from, and their assets are located in, Argentina, except for the share of profit / (loss) of associates included in the “International” segment located in USA.

Revenues for each reporting segments derive from a large and diverse client base and, therefore, there is no revenue concentration in any particular segment.

Operations Center in Israel: Within this operations center, as of June 30, 2020, the Company operated in the following segments:

●

The “Real Estate” segment in which, through PBC, the Group operates rental properties and residential properties in Israel, USA and other parts of the world and carries out commercial projects in Las Vegas, USA. In this fiscal year, the Company lost control over Gav-Yam. Income was reclassified to discontinued operations and no longer forms part of this segment in this fiscal year. The comparative information has been adjusted accordingly. As of September 2019, Gav-Yam started to be accounted for as an associate.

●

The “Supermarkets” segment in which, through Shufersal, the Group operated a supermarket chain in Israel. Upon the loss of control in 2018 this segment was reclassified to discontinued operations and presented as an associate since 2019. Due to the loss of control, it was reclassified to discontinued operations and no longer represents a segment for fiscal year 2018.

●

The “Telecommunications” segment includes Cellcom whose main activities include the provision of mobile phone services, fixed line phone services, data, Internet and television, among others.

●

The "Insurance" segment includes the investment in Clal, insurance company which main activities includes pension and social security insurance, among others. As stated in Note 14, the Group does not have control over Clal; therefore, the business is reported in a single line as a financial asset held for sale and valued at fair value.

●

The "Others" segment includes other diverse business activities, such as technological developments, tourism, oil and gas assets, electronics, agricultural activities and others.

●

The “Corporate” segment includes the expenses related with the activities of the holding companies.

Goods and services exchanged between segments are calculated on the basis of established prices. Intercompany transactions between segments, if any, are eliminated.

Results of Operations for the Year ended June 30, 2020 compared to the Year ended June 30, 2019

Below is a summary of the operating segments by geography and a reconciliation between the total of the operating result according to the information by segments and the operating result according to the income statement for the years ended June 30, 2020 and 2019.

	Operations<br>Center in Argentina			Operations<br>Center in Israel			Total Segment<br>Information			Joint<br>Ventures			Expenses and<br>Collective Promotion Fund			Inter-segment<br>eliminations and non-reportable assets /<br>liabilities			Total income<br>statement / statement of financial position
	06.30.20	06.30.19	Var.	06.30.20	06.30.19	Var.	06.30.20	06.30.19	Var.	06.30.20	06.30.19	Var.	06.30.20	06.30.19	Var.	06.30.20	06.30.19	Var.	06.30.20	06.30.19	Var.
(in Million<br>ARS)
Revenues	11,991	16,208	(4,217)	––	––	––	11,991	16,208	(4,217)	(65)	(101)	36	3,338	3,990	(652)	(24)	(26)	2	15,240	20,071	(4,831)
Costs	(2,940)	(3,418)	478	––	––	––	(2,940)	(3,418)	478	57	71	(14)	(3,476)	(4,151)	675	––	––	––	(6,359)	(7,498)	1,139
Gross<br>profit/(loss)	9,051	12,790	(3,739)	––	––	––	9,051	12,790	(3,739)	(8)	(30)	22	(138)	(161)	23	(24)	(26)	2	8,881	12,573	(3,692)
Net gain/(loss) from fair value<br>adjustment of investment properties	36,596	(42,639)	79,235	––	––	––	36,596	(42,639)	79,235	(283)	902	(1,185)	––	––	––	––	––	––	36,313	(41,737)	78,050
General and administrative<br>expenses	(2,317)	(2,880)	563	(99)	(115)	16	(2,416)	(2,995)	579	15	19	(4)	––	––	-	36	48	(12)	(2,365)	(2,928)	563
Selling<br>expenses	(1,325)	(1,168)	(157)	––	––	––	(1,325)	(1,168)	(157)	19	8	11	––	––	––	––	––	––	(1,306)	(1,160)	(146)
Impairment of associates and joint<br>ventures	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	-
Other operating results,<br>net	(49)	(711)	662	––	––	––	(49)	(711)	662	19	209	(190)	18	18	––	(12)	(22)	10	(24)	(506)	482
Profit/(loss)<br>from operations	41,956	(34,608)	76,564	(99)	(115)	16	41,857	(34,723)	76,580	(238)	1,108	(1,346)	(120)	(143)	23	––	––	––	41,499	(33,758)	75,257
Share of profit/(loss) of<br>associates and joint ventures	7,587	(6,492)	14,079	––	––	––	7,587	(6,492)	14,079	184	(1,096)	1,280	––	––	––	––	––	––	7,771	(7,588)	15,359
Segment<br>profit/(loss)	49,543	(41,100)	90,643	(99)	(115)	16	49,444	(41,215)	90,659	(54)	12	(66)	(120)	(143)	23	––	––	––	49,270	(41,346)	90,616
Reportable<br>assets	170,379	120,102	50,277	485,812	576,561	(90,749)	656,191	696,663	(40,472)	(745)	(656)	(89)	––	––	––	19,764	34,279	(14,515)	675,210	730,286	(55,076)
Reportable<br>liabil-ities	––	––	––	(434,048)	(496,305)	62,257	(434,048)	(496,305)	62,257	––	––	––	––	––	––	(109,118)	(101,937)	(7,181)	(543,166)	(598,242)	55,076
Net reportable<br>assets	170,379	120,102	50,277	51,764	80,256	(28,492)	222,143	200,358	21,785	(745)	(656)	(89)	––	––	––	(89,354)	(67,658)	(21,696)	132,044	132,044	––

Operations Center in Argentina

Below is a summary analysis of the operating segments by products and services of the Operations Center in Argentina for the years ended June 30, 2020 and 2019.

	Shopping<br>Malls			Offices			Sales and<br>Developments			Hotels			International			Corporate			Others			Total
	06.30.20	06.30.19	Var.	06.30.20	06.30.19	Var.	06.30.20	06.30.19	Var.	06.30.20	06.30.19	Var.	06.30.20	06.30.19	Var.	06.30.20	06.30.19	Var.	06.30.20	06.30.19	Var.	06.30.20	06.30.19	Var.
(in Million<br>ARS)
Revenues	6,389	9,195	(2,806)	2,539	2,409	130	791	1,205	(414)	2,176	3,179	(1,003)	12	15	(3)	––	––	––	84	205	(121)	11,991	16,208	(4,217)
Costs	(610)	(835)	225	(149)	(141)	(8)	(722)	(566)	(156)	(1,340)	(1,707)	367	(13)	(6)	(7)	––	––	––-	(106)	(163)	57	(2,940)	(3,418)	478
Gross<br>profit/(loss)	5,779	8,360	(2,581)	2,390	2,268	122	69	639	(570)	836	1,472	(636)	(1)	9	(10)	––	––	––	(22)	42	(64)	9,051	12,790	(3,739)
Net gain/(loss) from fair value<br>adjustment of investment properties	(2,266)	(43,687)	41,421	25,067	663	24,404	13,111	782	12,329	––	––	––	––	6	(6)	––	––	––	684	(403)	1,087	36,596	(42,639)	79,235
General and administrative<br>expenses	(892)	(1,017)	125	(238)	(228)	(10)	(245)	(305)	60	(394)	(530)	136	(118)	(118)	-	(304)	(560)	256	(126)	(122)	(4)	(2,317)	(2,880)	563
Selling<br>expenses	(763)	(571)	(192)	(90)	(107)	17	(212)	(127)	(85)	(248)	(340)	92	––	––	––	––	––	––	(12)	(23)	11	(1,325)	(1,168)	(157)
Other operating results,<br>net	(40)	(118)	78	(30)	(43)	13	(29)	(309)	280	(22)	123	(145)	––	(26)	26	––	––	––	72	(338)	410	(49)	(711)	662
Profit/(loss)<br>from operations	1,818	(37,033)	38,851	27,099	2,553	24,546	12,694	680	12,014	172	725	(553)	(119)	(129)	10	(304)	(560)	256	596	(844)	1,440	41,956	(34,608)	76,564
Share of profit/(loss) of<br>associates and joint ventures	––	––	––	––	––	––	––	(40)	40	––	––	––	7,942	(3,960)	11,902	––	––	––	(355)	(2,492)	2,137	7,587	(6,492)	14,079
Segment<br>profit/(loss)	1,818	(37,033)	38,851	27,099	2,553	24,546	12,694	640	12,054	172	725	(553)	7,823	(4,089)	11,912	(304)	(560)	256	241	(3,336)	3,577	49,543	(41,100)	90,643
Reportable<br>assets	53,165	54,277	(1,112)	67,827	34,166	33,661	36,018	30,558	5,460	1,979	2,075	(96)	2,488	(7,484)	9,972	––	––	––	8,902	6,510	2,392	170,379	120,102	50,277
Reportable<br>liabilities	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––
Net reportable<br>assets	53,165	54,277	(1,112)	67,827	34,166	33,661	36,018	30,558	5,460	1,979	2,075	(96)	2,488	(7,484)	9,972	––	––	––	8,902	6,510	2,392	170,379	120,102	50,277

Operations Center in Israel

Below is a summary analysis of the operating segments by products and services of the Operations Center in Israel for the years ended June 30, 2020 and 2019.

	Real<br>Estate			Supermarkets			Telecommunications			Insurance			Corporate			Others			Total
	06.30.20	06.30.19	Var.	06.30.20	06.30.19	Var.	06.30.20	06.30.19	Var.	06.30.20	06.30.19	Var.	06.30.20	06.30.19	Var.	06.30.20	06.30.19	Var.	06.30.20	06.30.19	Var.
(in Million<br>Pesos)
Revenues	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––
Costs	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––
Gross<br>profit/(loss)	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––
Net gain/(loss) from fair value<br>adjustment of investment properties	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––
General and administrative<br>expenses	––	––	––	––	––	––	––	––	––	––	––	––	(99)	(115)	16	––	––	––	(99)	(115)	16
Selling<br>expenses	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––
Impairment of associates and joint<br>ventures	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––
Other operating results,<br>net	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––
Profit/(loss) from<br>operations	––	––	––	––	––	––	––	––	––	––	––	––	(99)	(115)	16	––	––	––	(99)	(115)	16
Share of profit/(loss) of<br>associates and joint ventures	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––	––
Segment<br>profit/(loss)	––	––	––	––	––	––	––	––	––	––	––	––	(99)	(115)	16	––	––	––	(99)	(115)	16
Reportable<br>assets	164,649	326,652	(162,003)	30,240	24,775	5,465	150,744	117,753	32,991	3,636	24,370	(20,734)	19,282	44,716	(25,434)	117,261	38,295	78,966	485,812	576,561	(90,749)
Reportable<br>liabilities	(157,533)	(253,584)	96,051	––	––	––	(114,196)	(91,292)	(22,904)	––	––	––	(120,196)	(136,275)	16,079	(42,123)	(15,154)	(26,969)	(434,048)	(496,305)	62,257
Net reportable<br>assets	7,116	73,068	(65,952)	30,240	24,775	5,465	36,548	26,461	10,087	3,636	24,370	(20,734)	(100,914)	(91,559)	(9,355)	75,138	23,141	51,997	51,764	80,256	(28,492)

Revenues 2020 vs 2019

Revenues from sales, leases, and services, according to the income statement, decreased by ARS 4,831 million, from ARS 20,071 million in the fiscal year ended June 30, 2019, to ARS 15,240 million in the fiscal year ended June 30, 2020 (from the Operations Center in Argentina). Excluding revenues from the Operations Center in Israel, revenues from sales, leases, and services decreased by 24.1% mainly explained by the closure of operations of shopping malls since March 20, 2020 due to COVID-19 pandemic.

In turn, revenues from expenses and Collective Promotion Fund decreased by 16.3%, from ARS 3,990 million (out of which ARS 3,670 million are allocated to the Shopping Malls segment and ARS 320 million to the Offices segment in the Operations Center in Argentina) in fiscal year ended June 30, 2019, to ARS 3,338 million (out of which ARS 3,074 million are allocated to the Shopping Malls segment and ARS 264 million to the Offices segment) in fiscal year ended June 30, 2020.

Moreover, revenues from our joint ventures decreased by 35.6%, from ARS 101 million in fiscal year ended June 30, 2019 (out of which ARS 82 million are allocated to the Shopping Malls segment; ARS 18 million to the Offices segment and ARS 1 million to the Sales and Developments segment of the Operations Center in Argentina), to ARS 65 million in fiscal year ended June 30, 2020 (out of which ARS 56 million are allocated to the Shopping Malls segment and ARS 9 million to the Offices segment of the Operations Center in Argentina).

Finally, revenues from inter-segment transactions decreased by ARS 2 million, from ARS 26 million in fiscal year ended June 30, 2019, to ARS 24 million in fiscal year ended June 30, 2020.

Therefore, according to information by segments, revenues decreased by ARS 4,217 million, from ARS 16,208 million in the fiscal year ended June 30, 2019 to ARS 11,991 million in fiscal year ended June 30, 2020 (from the Operations Center in Argentina). Excluding revenues from the Operations Center in Israel, revenues, according to information by segments, decreased by 26.0%.

Operations Center in Argentina

Shopping Malls. Revenues from the Shopping Malls segment decreased by 30.5% from ARS 9,195 million during fiscal year ended June 30, 2019, to ARS 6,389 million during fiscal year June 30, 2020 mainly explained by the closure of operations of shopping malls since March 20, 2020 due to COVID-19 pandemic. Such fall is mainly attributable to: (i) an ARS 2,056 million decrease in revenues from permanent and variable leases (total sales from our lessees went from ARS 101,665 million in fiscal year 2019 to ARS 75,321 million in fiscal year 2020); (ii) an ARS 211 million decrease in the Others segment, mainly attributable to the termination of the Walmart agreement; (iii) an ARS 200 million decrease in parking revenues; and (iv) an ARS 163 million decrease in admission rights.

Offices. Revenues from the Offices segment increased by 5.4% from ARS 2,409 million during fiscal year ended June 30,2019 to ARS 2,539 million during fiscal year ended June 30, 2020. This variation is mainly explained by an increase of 6% in revenues from leases, from ARS 2,365 million during the fiscal year ended June 30, 2019 to ARS 2,508 million during the fiscal year ended June 30, 2020, mainly as a result of an increase in leases of buildings, PH Office Park and Zeta Buildings, and by the effect of the exchange rate variation.

Sales and Developments. Revenues from the Sales and Developments segment recorded a 34.4% decrease, from ARS 1,205 million during fiscal year ended June 30, 2019, to ARS 791 million during fiscal year ended June 30, 2020. This segment often varies significantly from fiscal year to fiscal year to the non-recurrence of different sales transactions carried out by the Group over time.

Hotels. Revenues from our Hotels segment decreased by 31.6% from ARS 3,179 million during the fiscal year ended June 30, 2019 to ARS 2,176 million during the fiscal year ended June 30, 2020, mainly due to a decrease in revenues from Hoteles Argentinos S.A.U. as a result of a deflag process and due to the impact on revenues as a result of the fall in the tourist industry during March because of COVID 19.

International. Revenues from our International segment decreased by 20.0%, recording ARS 12 million during fiscal year ended June 30, 2020, due to an ARS 3 million decrease in revenues from leases.

Corporate. Revenues associated with our Corporate segment showed no variations for the reported fiscal years.

Others. Revenues from the Others segment decreased by 59.0% from ARS 205 million during fiscal year ended June 30, 2019 to ARS 84 million during fiscal year ended June 30, 2020, mainly due to the revenues derived from La Arena and La Rural S.A., OFC S.R.L., Ogden S.A. and Entretenimiento Universal S.A. – Joint venture – (Convention Center and Exhibitions of the City of Buenos Aires Administrator).

Costs 2020 vs 2019

Total consolidated costs, according to the income statement, decreased by ARS 1,139 million, from ARS 7,498 million in fiscal year ended June 30, 2019 to ARS 6,359 million in fiscal year ended June 30, 2020 (from the Operations Center in Argentina). Excluding costs derived from the Operations Center in Israel, costs decreased by 15.2%. Furthermore, consolidated total costs measured as a percentage of consolidated total revenues increased from 37.4% during fiscal year ended June 30, 2019 to 41.7% during fiscal year ended June 30, 2020.

In turn, costs related to expenses and Collective Promotion Fund decreased by 16.3% from ARS 4,151 million during fiscal year ended June 30, 2019 (out of which ARS 3,825 million are allocated to the Shopping Malls segment and ARS 326 million to the Offices segment of the Operations Center in Argentina) to ARS 3,476 million during fiscal year ended June 30, 2020 (out of which ARS 3,200 million are allocated to the Shopping Malls segment and ARS 276 million to the Offices segment of the Operations Center in Argentina) mainly due to lower costs originated by our Shopping Malls, which decreased by 16.3% from ARS 3,825 million during fiscal ended June 30, 2019 to ARS 3,200 million during fiscal year ended June 30, 2020.

Likewise, costs from our joint ventures showed a 19.7% decrease, from ARS 71 million during fiscal year ended June 30, 2019 (out of which ARS 17 million are allocated to the Shopping Malls segment; ARS 45 million to the Offices segment and ARS 9 million to the Sales and Developments segment of the Operations Center in Argentina) to ARS 57 million during fiscal year ended June 30, 2020 (out of which ARS 7 million are allocated to the Shopping Malls segment; ARS 43 million to the Offices segment and ARS 7 million to the Sales and Developments segment of the Operations Center in Argentina).

Finally, costs from inter-segment operations showed no variations for the reported periods.

Therefore, according to information by segments (taking into account the costs from our joint ventures and without considering the costs associated with expenses and collective promotion fund or the costs from inter-segment operations), costs evidenced an decrease of ARS 478 million, from ARS 3,418 million during fiscal year ended June 30, 2019 to ARS 2,940 million during fiscal year ended June 30, 2020 (from the Operations Center in Argentina. Excluding costs derived from the Operations Center in Israel, costs decreased by 14.0%. Likewise, total costs, measured as a percentage of total revenues, according to information by segments, increased from 21.1% during fiscal year ended June 30, 2019 to 24.5% during fiscal year ended June 30, 2020.

Operations Center in Argentina

Shopping Malls. Costs associated with the Shopping Malls segment decreased by 26.9%, from ARS 835 million during fiscal year ended June 30, 2019 to ARS 610 million during fiscal year ended June 30, 2020, mainly due to: (i) a decrease in leases and expenses of ARS 140 million (mainly due to the transfer of the expenses deficit from the previous fiscal year); and (ii) a decrease in salaries, social security and other personnel administrative expenses of ARS 84 million. Costs associated with the Shopping Malls segment, measured as a percentage of the revenues from this segment, increased from 9.1% during fiscal year ended June 30, 2019 to 9.5% during fiscal year 2020.

Offices. Costs associated with the Offices segment increased by 5.7%, from ARS 141 million during fiscal year ended June 30, 2019 to ARS 149 million during fiscal year ended June 30, 2020, mainly due to (i) an increase in leases and expenses of ARS 37 million; offset by: (ii) a decrease in maintenance expenses of ARS 14 million; and (iii) a decrease in amortization and depreciation of ARS 12 million. Costs associated with the Offices segment, measured as a percentage the revenues from this segment, remained stable at 5.9% during fiscal years ended June 30, 2019 and 2020.

Sales and Developments. Costs associated with our Sales and Developments segment recorded a 27.6% increase from ARS 566 million during fiscal year ended June 30, 2019 to ARS 722 million during fiscal year ended June 30, 2020, mainly due to: (i) the exchange transaction with respect to the Coto air space, resulting in fees and compensation costs for ARS 57 million, and an increase in goods and services sale costs of ARS 19 million; and (ii) an increase in the cost of sale of goods and services generated by Catalinas in an amount of ARS 52 million. Costs in the Sales and Developments segment, measured as a percentage of revenues from this segment, increased from 47.0% during fiscal year ended June 30, 2019 to 91.3% during fiscal year ended June 30, 2020.

Hotels. Costs in the Hotels segment decreased by 21.5%, from ARS 1,707 million during fiscal year ended June 30, 2019 to ARS 1,340 million during fiscal year ended June 30, 2020, mainly as a result of (i) an ARS 203 million decrease in the costs of salaries, social security and other personnel expenses; (ii) an ARS 73 million decrease in maintenance, repair, and services; (iii) an ARS 41 million decrease in food, beverages and other hotel expenses; and (iv) an ARS 35 million decrease in fees and compensation services. Costs in the Hotels segment, measured as a percentage of revenues from this segment, increased from 53.7% during fiscal year ended June 30, 2019 to 61.6% during fiscal year ended June 30, 2020.

International. Costs in the International segment increased 116.7%, amounting to ARS 13 million during fiscal year ended June 30, 2020 and ARS 6 million during fiscal year ended June 30, 2019, mainly as a result of: (i) an ARS 5 million increase in maintenance, repair and services; (ii) an ARS 1 million increase in fees and compensation for services; and (iii) an ARS 1 million increase in taxes, fees, and contributions. Costs in the International segment, measured as a percentage of revenues from this segment, increased from 40.0% during fiscal year ended June 30, 2019 to 108.3% during fiscal year ended June 30, 2020.

Corporate. Costs in the Corporate segment did not vary in the reported fiscal years.

Others. Costs in the Others segment decreased by 35.0%, from ARS 163 million during fiscal year ended June 30, 2019 to ARS 106 million during fiscal year ended June 30, 2020, mainly as a result of: (i) an ARS 37 million decrease in leases and expenses; (ii) an ARS 32 million decrease in taxes, fees and contributions; and (iii) an ARS 23 million decrease in fees and compensation for services, partially offset by (iv) an ARS 39 million increase in depreciation and amortization.

Gross profit 2020 vs. 2019

The total consolidated gross profit, according to the income statement, decreased by ARS 3,692 million, from ARS 12,573 million during fiscal year ended June 30, 2019 to ARS 8,881 million during fiscal year ended June 30, 2020 (from the Operations Center in Argentina). Excluding gross profit derived from the Operations Center in Israel, the gross profit decreased by 29.4%. The total consolidated gross profit, measured as a percentage of revenues, decreased from 62.6% during fiscal year ended June 30, 2019 to 58.3% during fiscal year ended June 30, 2020.

In turn, total gross profit (loss) on account of expenses and collective promotion fund decreased by ARS 23 million, from ARS 161 million during fiscal year ended June 30, 2019 (out of which a loss of ARS 155 million derives from the Shopping Malls segment and a loss of ARS 6 million from the Offices segment), to ARS 138 million during fiscal year ended June 30, 2020 (out of which a loss of ARS 126 million derives from the Shopping Malls segment and other loss of ARS 12 million from the Offices segment).

Additionally, the gross profit (loss) from our joint ventures decreased by 73.3%, from ARS 30 million during fiscal year ended June 30, 2019 to ARS 8 million during fiscal year ended June 30, 2020.

Therefore, according to information by segments, gross profit decreased by ARS 3,739 million, from ARS 12,790 million during fiscal year ended June 30, 2019 to ARS 9,051 million during fiscal year ended June 30, 2020 (from the Operations Center in Argentina). Excluding gross profit derived from the Operations Center in Israel, the gross profit decreased by 29.2%. In addition, gross profit, measured as a percentage of revenues, according to information by segments, decreased from 78.9% during fiscal year ended June 30, 2019 to 75.5% during fiscal year ended June 30, 2020.

Operations Center in Argentina

Shopping Malls. Gross profit from the Shopping Malls segment decreased by 30.9%, from ARS 8,360 million during fiscal year ended June 30, 2019 to ARS 5,779 million during fiscal year ended June 30, 2020, mainly as a result of a decrease in total sales of our lessees in real terms, thus resulting in lower percentage rentals under our lease agreements. Gross profit from the Shopping Malls segment as a percentage of the segment revenues, slightly decreased from 90.9% during fiscal year ended June 30, 2019 to 90.5% during fiscal year ended June 30, 2020.

Offices. Gross profit from the Offices segment increased by 5.4% from ARS 2,268 million during fiscal year ended June 30, 2019 to ARS 2,390 million during fiscal year ended June 30, 2020. Gross profit from the Offices segment, measured as percentage of revenues from this segment, remained stable at 94.1% during fiscal years ended June 30, 2019 and 2020.

Sales and developments. Gross profit from the Sales and Developments segment decreased by 89.2%, from ARS 639 million during fiscal year ended June 30, 2019 to ARS 69 million fiscal year ended June 30, 2020. Gross profit from the Sales and Developments segment, measured as a percentage of revenues from this segment, decreased from 53% during fiscal year ended June 30, 2019 to 8.7% during fiscal year ended June 30, 2020.

Hotels. Gross profit from the Hotels segment decreased by 43.2% from ARS 1,472 million during fiscal year ended June 30, 2019 to ARS 836 million during fiscal year ended June 30, 2020. Gross profit from the Hotels segment, measured as a percentage of revenues from this segment, decreased from 46.3% during fiscal year ended June 30, 2019 to 38.4% during fiscal year ended June 30, 2020.

International. Gross profit from the International segment decreased by 111.1%, as a gross profit of ARS 9 million was recorded during fiscal year ended June 30, 2019 and an ARS 1 million gross loss was recorded during fiscal year ended June 30, 2020. Gross profit from the International segment, measured as a percentage of revenues from this segment, decreased from 60.0% positive during fiscal year ended June 30, 2019 to 8.3% negative during fiscal year ended June 30, 2020.

Corporate. Gross profit from the Corporate segment did not show any variations during the reported fiscal years.

Others. Gross profit from the Others segment decreased by 152.4% from a profit of ARS 42 million during fiscal year ended June 30, 2019 to an ARS 22 million loss during fiscal year ended June 30, 2020. Gross profit from the Others segment, measured as a percentage of revenues from this segment, increased from 20.5% positive during fiscal year ended June 30, 2019 to 26.2% negative during fiscal year ended June 30, 2020.

Net gain (loss) from fair value adjustment of investment properties 2020 vs 2019

Total consolidated net gain/(loss) from fair value adjustment of investment properties, according to the income statement, increased by ARS 78,050 million, from a net loss of ARS 41,737 million during fiscal year ended June 30, 2019 to a net gain of ARS 36,313 million during fiscal year ended June 30, 2020 (from the Operations Center in Argentina).

Operations Center in Argentina

For the fiscal year ended June 30, 2020, the net gain/(loss) from fair value adjustment of investment properties was a gain of ARS 36,596 million (an ARS 2,266 million loss from our Shopping Malls segment; an ARS 25,067 million gain from our Offices segment; an ARS 13,111 million gain of our Sales and Developments segment; and an ARS 684 million gain of our Other segment).

The net impact of prices in Pesos of our properties mainly resulted from a change in macroeconomic conditions: (i) the Argentine gross domestic product growth rate estimated for 2020 decreased from 2.2% to -11%; (ii) from June 2019 to June 2020, the Argentine Peso depreciated by 66% with respect to the US Dollar (from ARS 42.26 per USD 1.00 to ARS 70.26 per USD 1.00) which mainly resulted in a decrease in projected cash flows in US Dollars from the Shopping Malls; and (iii) an 8 base point increase in the Dollar discount rate at which the projected cash flow from Shopping Malls is discounted.

The offices market in Argentina is a liquid market, in which a great number of counterparties participates carrying out sale-purchase transactions. This situation results in significant and representative sale-purchase prices. Furthermore, lease agreements are denominated in US dollars and are usually executed for three-year terms, hence this business produces stable cash flows in US dollars. In this sense, we use the Market Approach method to determine the fair value of our Offices and Others segment, the value per sqm being the most representative measurement.

Since September 2019, the real estate market experienced certain operational changes due to the adoption of foreign exchange regulations. As a result, it is very likely that office buildings/lands reserved sales be settled in Pesos at an implied exchange rate higher than the official exchange rate, which can be observed in the transactions conducted by the Company during 2020. Therefore, we have valued our offices and lands reserves in Pesos at the date of each statement of financial position considering the aforementioned situation, thus resulting in a gain with respect to the previously recorded values.

General and administrative expenses 2020 vs 2019

Total general and administrative expenses, according to the income statement, recorded an decrease of ARS 563 million, from ARS 2,928 million during the fiscal year ended June 30, 2019 (out of which ARS 115 million derive from the Operations Center in Israel and ARS 2,813 million from the Operations Center in Argentina) to ARS 2,365 million during the fiscal year ended June 30, 2020 (out of which ARS 99 million derive from the Operations Center in Israel and ARS 2,266 million from the Operations Center in Argentina). Excluding the effect from the Operations Center in Israel, administrative expenses decreased by 19.4%. Total administrative expenses, measured as a percentage of revenues, slightly increased from 14.6% during the fiscal year ended June 30, 2019 to 15.5% during the fiscal year ended June 30, 2020. Excluding the effect from the Operations Center in Israel, total general and administrative expenses, measured as a percentage of revenues, increased from 14.0% during the fiscal year ended June 30, 2019 to 14.9% during the fiscal year ended June 30, 2020.

In turn, administrative expenses of our joint ventures decreased by ARS 4 million, from ARS 19 million during the fiscal year ended June 30, 2019 to ARS 15 million during the year ended June 30, 2020.

Finally, administrative expenses for inter-segment transactions decreased by ARS 12 million, from ARS 48 million during the fiscal year ended June 30, 2019 to ARS 36 million during the fiscal year ended June 30, 2020.

Therefore, according to information by segments, administrative expenses decreased by ARS 579 million, from ARS 2,995 million during the fiscal year ended June 30, 2019 (out of which ARS 115 million derive from the Operations Center in Israel and ARS 2,880 million derive from the Operations Center in Argentina) to ARS 2,416 million during the fiscal year ended June 30, 2020 (out of which ARS 99 million derive from the Operations Center in Israel and ARS 2,317 million from the Operations Center in Argentina). Excluding the administrative expenses from the Operations Center in Israel, expenses decreased by 19.5%. Administrative expenses, measured as a percentage of revenues, slightly increased from 18.5% during the fiscal year ended June 30, 2019 to 20.1% during the fiscal year ended June 30, 2020. Without considering the effects from the Operations Center in Israel, total administrative expenses, measured as a percentage of total revenues, showed an increase, from 17.8% during the fiscal year ended June 30, 2019 to 19.3% during the fiscal year ended June 30, 2020.

Operations Center in Argentina

Shopping Malls. Administrative expenses of Shopping Malls decreased by 12.3%, from ARS 1,017 million during the fiscal year ended June 30, 2019 to ARS 892 million during the fiscal year ended June 30, 2020, mainly due to: (i) a decrease of ARS 92 million in salaries, social security charges and other personnel administrative expenses; (ii) a decrease of ARS 58 million in fees payable to directors, partially offset by: (iii) an increase of ARS 20 million in amortization and depreciation and; (iv) an increase of ARS 11 million in fees and compensation for services. Administrative expenses of Shopping Malls, measured as a percentage of revenues from such segment, increased from 11.1% during the fiscal year ended June 30, 2019 to 14.0% during the fiscal year ended June 30, 2020.

Offices. The general and administrative expenses of our Offices segment increased by 4.4%, from ARS 228 million during the fiscal year ended June 30, 2019 to ARS 238 million during the fiscal year ended June 30, 2020, mainly as a result of: (i) an increase of ARS 7 million in fees and compensation for services; and (ii) an increase of ARS 2 million in taxes, rates and contributions. General and administrative expenses, measured as a percentage of revenues from the same segment, decreased from 9.5% during the fiscal year ended June 30, 2019 to 9.4% during the fiscal year ended June 30, 2020.

Sales and Developments. General and administrative expenses associated with our Sales and Developments segment decreased by 19.7%, from ARS 305 million during the fiscal year ended June 30, 2019 to ARS 245 million during the fiscal year ended June 30, 2020, mainly as a result of: (i) a decrease in salaries, social security and other personnel administrative expenses of ARS 28 million; (ii) a decrease of ARS 14 million in publicity, advertising and other commercial expenses; (iii) a decrease of ARS 6 million in leases and building administrative expenses; and (iv) a decrease of ARS 5 million in fees and compensation for services. General and administrative expenses, measured as a percentage of revenues from the same segment, slightly increased from 25.3% during the fiscal year ended June 30, 2019 to 31.0% during the fiscal year ended June 30, 2020.

Hotels. General and administrative expenses associated with our Hotels segment decreased by 25.7% from ARS 530 million during the fiscal year ended June 30, 2019 to ARS 394 million during the fiscal year ended June 30, 2020, mainly as a result of: (i) an ARS 60 million decrease in fees and compensation for services; (ii) an ARS 54 million decrease in salaries, social security and other personnel administrative expenses; (iii) an ARS 16 million decrease in maintenance, security, cleaning, repairs and related expenses and (iv) an ARS 8 million decrease in taxes, rates and contributions. General and administrative expenses associated with the Hotels segment, measured as a percentage of revenues from this segment, increased from 16.7% during the fiscal year ended June 30, 2019 to 18.1% during the fiscal year ended June 30, 2020.

International. General and administrative expenses associated with our International segment showed no variation and expenses in the amount of ARS 118 million were recorded during the fiscal years ended June 30, 2019 and 2020.

Corporate. General and administrative expenses associated with our Corporate segment decreased by 45.7%, from ARS 560 million during the fiscal year ended June 30, 2019 to ARS 304 million during the fiscal year ended June 30, 2020, mainly as a result of: (i) an ARS 215 million decrease in fees payable to directors; and (ii) an ARS 43 million decrease in salaries, social security and other personnel administrative expenses.

Others. General and administrative expenses associated with our Others segment increased by 3.3%, from ARS 122 million during the fiscal year ended June 30, 2019 to ARS 126 million during the fiscal year ended June 30, 2020, mainly due to (i) an increase of ARS 9 million in maintenance, repairs and services; partially offset by (ii) a decrease of ARS 5 million in taxes, rates and contributions.

Operations Center in Israel

Corporate. General and administrative expenses associated with the Corporate segment decreased from ARS 115 million during the fiscal year ended June 30, 2019 to ARS 99 million during the fiscal year ended June 30, 2020. Such variation was due to a decrease in fees and compensation for services.

Selling expenses 2020 vs 2019

Total consolidated selling expenses, according to the income statement, showed an increase of ARS 146 million, from ARS 1,160 million during the fiscal year ended June 30, 2019 to ARS 1,306 million during the fiscal year ended June 30, 2020 (from the Operations Center in Argentina). Excluding selling expenses from the Operations Center in Israel, selling expenses increased by 12.6%. Total consolidated selling expenses, measured as a percentage of revenues from sales, leases and services, increased from 5.8% during the fiscal year ended June 30, 2019 to 8.6% during the fiscal year ended June 30, 2020.

In turn, selling expenses of our joint ventures increased by ARS 11 million, from ARS 8 million during the fiscal year ended June 30, 2019 to ARS 19 million during the fiscal year ended June 30, 2020.

Therefore, according to information by segments, selling expenses increased by ARS 157 million from ARS 1,168 million during the fiscal year ended June 30, 2019 to ARS 1,325 million during the fiscal year ended June 30, 2020 (from the Operations Center in Argentina). Excluding selling expenses from the Operations Center in Israel, selling expenses increased by 13.4%. Selling expenses, measured as a percentage of revenues, according to information by segments, increased from 7.2% during the fiscal year ended June 30, 2019 to 11.0% during the fiscal year ended June 30, 2020. Without considering the effects from the Operations Center in Israel, total selling expenses, measured as a percentage of total revenues according to information by segments, showed an increase, from 7.2% during the fiscal year ended June 30, 2019 to 11.0% during the fiscal year ended June 30, 2020.

Operations Center in Argentina

Shopping Malls. Selling expenses of the Shopping Malls segment increased by 33.6%, from ARS 571 million during the fiscal year ended June 30, 2019 to ARS 763 million during the fiscal year ended June 30, 2020, mainly as a result of: (i) an increase in the charge of doubtful accounts of ARS 235 million, partially offset by (ii) a decrease in the charge of taxes, rates and contributions of ARS 24 million; (iii) a decrease in the charge of publicity, advertising and other commercial expenses of ARS 11 million; and (iv) a decrease in salaries, social security and other personnel administrative expenses of ARS 4 million. Selling expenses, measured as a percentage of revenues from the Shopping Malls segment, increased from 6.2% during the fiscal year ended June 30, 2019 to 11.9% during the fiscal year ended June 30, 2020.

Offices. Selling expenses associated with our Offices segment decreased by 15.9% from ARS 107 million during the fiscal year ended June 30, 2019 to ARS 90 million during the fiscal year ended June 30, 2020. Such variation was mainly generated as a result of: (i) an ARS 10 million decrease in publicity, advertising, and other commercial expenses; and (ii) an ARS 10 million decrease in the charge of doubtful accounts. Selling expenses associated with our Offices segment, measured as a percentage of revenues from this segment, decreased from 4.4% during the fiscal year ended June 30, 2019 to 3.5% during the fiscal year ended June 30, 2020.

Sales and Developments. Selling expenses associated with our Sales and Developments segment increased by 66.9% from ARS 127 million during the fiscal year ended June 30, 2019 to ARS 212 million during the fiscal year ended June 30, 2020. Such variation was mainly generated by: (i) an ARS 85 million increase in taxes, rates and contributions; (ii) an ARS 12 million increase in publicity, advertising and other commercial expenses, offset by: (iii) an ARS 8 million decrease in the charge of doubtful accounts; (iv) an ARS 2 million decrease in salaries, social security and other personnel administrative expenses; and (v) an ARS 2 million decrease in fees and compensation for services. Selling expenses associated with our Sales and Developments segment, measured as a percentage of revenues from this segment, increased from 10.5% during the fiscal year ended June 30, 2019 to 26.8% during the fiscal year ended June 30, 2020.

Hotels. Selling expenses associated with our Hotels segment decreased by 27.1% from ARS 340 million during the fiscal year ended June 30, 2019 to ARS 248 million during the fiscal year ended June 30, 2020, mainly as a result of: (i) an ARS 47 million decrease in the charge of taxes, rates and contributions; (ii) an ARS 21 million decrease in publicity, advertising and other commercial expenses; (iii) an ARS 12 million decrease in fees and compensation for services; and (iv) an ARS 10 million decrease in salaries, social security and other personnel administrative expenses. Selling expenses associated with our Hotels segment, measured as a percentage of revenues from this segment, slightly increased from 10.7% during the fiscal year ended June 30, 2019 to 11.4% during the fiscal year ended June 30, 2020.

International. Selling expenses associated with the International segment were not recorded in both fiscal years.

Corporate. Selling expenses associated with the Corporate segment were not recorded in both fiscal years.

Others. Selling expenses associated with our Others segment decreased by 47.8% from ARS 23 million during the fiscal year ended June 30, 2019 to ARS 12 million during the fiscal year ended June 30, 2020, mainly due to: (i) an ARS 5 million decrease in the charge of doubtful accounts; and (ii) an ARS 4 million decrease in taxes, rates and contributions. Selling expenses associated with our Others segment, measured as a percentage of revenues from this segment, increased from 11.2% during the fiscal year ended June 30, 2019 to 14.3% during the fiscal year ended June 30, 2020.

Other operating results, net 2020 vs 2019

Other operating results, net, according to the income statement, recorded a variation of ARS 482 million, from a net loss of ARS 506 million during the fiscal year ended June 30, 2019, to a net loss of ARS 24 million during the fiscal year ended June 30, 2020 (from the Operations Center in Argentina).

Other operating results, net, from our joint ventures decreased by ARS 190 million, from a net profit of ARS 209 million during the fiscal year ended June 30, 2019 to a net profit of ARS 19 million during the fiscal year ended June 30, 2020 (out of which a profit of ARS 2 million derives from the Sales and Developments segment, an ARS 19 million profit is allocated to the Offices segment and a loss of ARS 2 million is allocated to the Shopping Malls segment).

In turn, other operating results on account of building administration expenses and collective promotion fund remained unchanged in the reported fiscal years.

Therefore, according to information by segments, the other operating results line, net, increased by ARS 662 million, from a net loss of ARS 711 million during the fiscal year ended June 30, 2019 to a net loss of ARS 49 million during the fiscal year ended June 30, 2020.

Operations Center in Argentina

Shopping Malls. Other operating results, net associated with our Shopping Malls segment decreased by 66.1%, from a net loss of ARS 118 million during the fiscal year ended June 30, 2019 to a net loss of ARS 40 million during the fiscal year ended June 30, 2020, mainly as a result of: (i) a lower charge of donations of ARS 58 million; and (ii) an increase in Others of ARS 27 million, mainly due to a loss for indemnification payment recognized in 2019, partially offset by: (iii) an ARS 13 million decrease in interest earned on operating assets. Other operating results, net, from this segment, as a percentage of revenues from this segment, decreased from 1.3% negative during the fiscal year ended June 30, 2019 to 0.6% negative during the fiscal year ended June 30, 2020.

Offices. Other operating results, net associated with our Offices segment decreased by 30.2%, from a net loss of ARS 43 million during the fiscal year ended June 30, 2019 to a net loss of ARS 30 million during the fiscal year ended June 30, 2020, mainly as a consequence of an ARS 17 million decrease in donations, among other items. Other operating results, net from this segment, as a percentage of the revenues from this segment, decreased from 1.8% negative during the fiscal year ended June 30, 2019 to 1.2% negative during the fiscal year ended June 30, 2020.

Sales and Developments. Other operating results, net associated with our Sales and Developments segment decreased by 90.6%, from a net loss of ARS 309 million during the fiscal year ended June 30, 2019 to a net loss of ARS 29 million during the fiscal year ended June 30, 2020, mainly as a result of a decrease in the provision set up for the write-off of the Puerto Retiro plot of land and a decrease in donations, among other items. Other operating results, net from this segment, as a percentage of the revenues of this segment, decreased from 25.6% negative during the fiscal year ended June 30, 2019 to 3.7% negative during the fiscal year ended June 30, 2020.

Hotels. Other operating results, net associated with the Hotels segment decreased by 117.9%, from a net profit of ARS 123 million during the fiscal year ended June 30, 2019 to a net loss of ARS 22 million during the fiscal year ended June 30, 2020, mainly due to an insurance recovery associated with a boiler-related loss during fiscal year 2019. Other operating results, net from this segment, as a percentage of the revenues from this segment, decreased from 3.9% positive during the fiscal year ended June 30, 2019 to 1.0% negative during the fiscal year ended June 30, 2020.

International. Other operating results, net associated with the International segment showed a net loss of ARS 26 million during the fiscal year ended June 30, 2019. No charge was recognized during the fiscal year ended June 30, 2020, mainly due to a decrease in donations.

Corporate. Other operating results, net associated with the Corporate segment showed no variations between the reported fiscal years.

Others. Other operating results, net associated with the Others segment increased by 121.3%, from a net loss of ARS 338 million during the fiscal year ended June 30, 2019 to a net profit of ARS 72 million during the fiscal year ended June 30, 2020, mainly due to a loss from the sale of Tarshop S.A. and the impairment of the goodwill of La Arena during the comparative fiscal year. Other operating results, net from this segment, as a percentage of the revenues from this segment, decreased from 164.9% negative during the fiscal year ended June 30, 2019 to 85.7% positive during the fiscal year ended June 30, 2020.

Profit / (loss) from operations 2020 vs 2019

Total consolidated profit/ (loss) from operations, according to the income statement, increased from a net loss of ARS 33,758 million during the fiscal year ended June 30, 2019 to a net profit of ARS 41,499 million during the fiscal year ended June 30, 2020 (out of which a net loss of ARS 99 million derives from the Operations Center in Israel and a net profit of ARS 41,598 from the Operations Center in Argentina). Excluding the effect from the Operations Center in Israel, the profit/(loss) from operations varied by 223.6%. Total consolidated profit/(loss) from operations, measured as a percentage of revenues from sales, leases and services, increased from 168.2% negative during the fiscal year ended June 30, 2019 to 272.3% positive during the fiscal year ended June 30, 2020. Excluding the effect from the Operations Center in Israel, total consolidated profit/(loss) from operations, measured as a percentage of total revenues, increased from 167.6% negative during the fiscal year ended June 30, 2019 to 273.0% positive during the fiscal year ended June 30, 2020.

Profit/(loss) from operations from our joint ventures decreased from a profit of ARS 1,108 million during the fiscal year ended June 30, 2019 (out of which a net profit of ARS 125 million is allocated to the Shopping Malls segment; a net profit of ARS 758 million to the Offices segment and a profit of ARS 225 million to the Sales and Developments segment, of the Operations Center in Argentina) to a net loss of ARS 238 million during the fiscal year ended June 30, 2020 (out of which a profit of ARS 16 million is allocated to the Shopping Malls segment, a net loss of ARS 266 million to the Offices segment, and a profit of ARS 12 million to the Sales and Developments segment, of the Operations Center in Argentina).

Therefore, according to information by segments, the net profit from operations increased from a net loss of ARS 34,723 million during the fiscal year ended June 30, 2019 to a net profit of ARS 41,857 million during the fiscal year ended June 30, 2020 (out of which a net loss of ARS 99 million derives from the Operations Center in Israel and a net profit of ARS 41,956 million derives from the Operations Center in Argentina). The profit/(loss) from operations, measured as a percentage of revenues, according to information by segments, increased from a 214.2% loss during the fiscal year ended June 30, 2019 to a 349.1% profit during the fiscal year ended June 30, 2020. Excluding the effect from the Operations Center in Israel, total profit/(loss) from operations, according to information by segments, measured as a percentage of total revenues, increased from a 213.5% loss during the fiscal year ended June 30, 2019 to a 349.9% profit during the fiscal year ended June 30, 2020.

Operations Center in Argentina

Shopping Malls. Profit/(loss) from operations associated with the Shopping Malls segment increased from a loss of ARS 37,033 million during the fiscal year ended June 30, 2019 to a profit of ARS 1,818 million during the fiscal year ended June 30, 2020.

Offices. Profit / (loss) from operations associated with our Offices segment increased by 961.5%, from a net profit of ARS 2,553 million during the fiscal year ended June 30, 2019 to a net profit of ARS 27,099 million during the fiscal year ended June 30, 2020. Such variation was mainly due to an ARS 24,404 million increase in the gain / (loss) from fair value adjustments of investment properties. Profit / (loss) from operations associated with the Offices segment, as a percentage of revenues from such segment, increased from 106.0% during the fiscal year ended June 30, 2019 to 1,067.3% during the fiscal year ended June 30, 2020.

Sales and Developments. Profit / (loss) from operations associated with our Sales and Developments segment increased by 1,766.8%, from a net profit of ARS 680 million during the fiscal year ended June 30, 2019 to a net profit of ARS 12,694 million during the fiscal year ended June 30, 2020. Such increase is mainly due to the gain / (loss) from fair value adjustments of investment properties. Profit / (loss) from operations associated with the Sales and Developments segment, as a percentage of revenues from this segment, increased from 56.4% during the fiscal year ended June 30, 2019 to 1,604.8% during the fiscal year ended June 30, 2020.

Hotels. Profit / (loss) from operations associated with the Hotels segment decreased by 76.3%, from a net profit of ARS 725 million during the fiscal year ended June 30, 2019 to a net profit of ARS 172 million during the fiscal year ended June 30, 2020. Such decrease is mainly due to the deflagging process of Hoteles Argentinos S.A.U. and to the fact that revenues were significantly affected by a decline in the activity since March, attributable to the COVID-19 pandemic. The profit / (loss) from operations associated with the Hotels segment, as a percentage of revenues from such segment, decreased from 22.8% during the fiscal year ended June 30, 2019 to 7.9% during the fiscal year ended June 30, 2020.

International. Profit/(loss) from operations associated with our International segment varied by 7.8% from a net loss of ARS 129 million during the fiscal year ended June 30, 2019 to a net loss of ARS 119 million during the fiscal year ended June 30, 2020. Such variation is due to a decrease in donations.

Corporate. Profit/(loss) from operations associated with our Corporate segment decreased by 45.7% from a loss of ARS 560 million during the fiscal year ended June 30, 2019 to a loss of ARS 304 million during the fiscal year ended June 30, 2020, mainly affected by general and administrative expenses.

Others. Profit/(loss) from operations associated with the Others segment increased from a net loss of ARS 844 million during the fiscal year ended June 30, 2019 to a net profit of ARS 596 million during the fiscal year ended June 30, 2020. The variation is mainly due to the loss generated by the sale of Tarshop, the impairment of the goodwill of La Arena during the fiscal year ended June 30, 2019, and a decrease in share of profit / (loss) of associates and joint ventures. Profit/(loss) from operations of the Others segment, as a percentage of the revenues from such segment, increased from a 411.7% loss during the fiscal year ended June 30, 2019 to a 709.5% profit during the fiscal year ended June 30, 2020.

Operations Center in Israel

Corporate. Profit/ (loss) from operations associated with the Corporate segment went from a net loss of ARS 115 million during the fiscal year ended June 30, 2019 to a net loss of ARS 99 million during the fiscal year ended June 30, 2020. Such variation was due to a decrease in fees and compensation for services.

Share of profit / (loss) of associates and joint ventures 2020 vs 2019

The share of profit / (loss) of associates and joint ventures, according to the income statement, increased by 202.4%, from a net loss of ARS 7,588 million during the fiscal year ended June 30, 2019 to a net profit of ARS 7,771 million during the fiscal year ended June 30, 2020 (from the Operations Center in Argentina), mainly due to the positive results from the International segment.

Also, the net share of profit / (loss) of joint ventures, mainly from Nuevo Puerto Santa Fe S.A. (Shopping Malls segment), Quality Invest S.A. (Offices segment) and Cyrsa S.A. and Puerto Retiro S.A. (Sales and Developments segment), showed a 116.8% increase, from a loss of ARS 1,096 million during the fiscal year ended June 30, 2019 to a profit of ARS 184 million during the fiscal year ended June 30, 2020, mainly due to results from the joint venture Puerto Retiro S.A., as a consequence of the impairment of the plot of land based on the progress of litigations concerning it during the fiscal year ended June 30, 2019 and the share in Quality Invest S.A., mainly attributable to the gain / (loss) from fair value adjustments of investment properties.

Operations Center in Argentina

Shopping Malls. In the information by segments, the share of profit / (loss) of the joint venture Nuevo Puerto Santa Fe S.A. is recorded on a consolidated basis, line by line in this segment.

Offices. In the information by segments, the share of profit / (loss) of the joint venture Quality S.A. is recorded on a consolidated basis, line by line in this segment.

Sales and Developments. The share of profit / (loss) of the joint ventures Cyrsa S.A. and Puerto Retiro S.A is recorded on a consolidated basis, line by line. The share of profit / (loss) of our associate Manibil S.A., which is recorded in this line, increased by ARS 40 million during the fiscal year ended June 30, 2020.

Hotels. This segment does not show results from the share of profit / (loss) of associates and joint ventures.

International. The share of profit / (loss) of associates of this segment increased by 300.6%, from a net loss of ARS 3,960 million during the fiscal year ended June 30, 2019 to a net profit of ARS 7,942 million during the fiscal year ended June 30, 2020, mainly generated by a positive result from our investment in New Lipstick LLC of ARS 8,044 million offset by a negative result from our investment in Condor Hospitality of ARS 110 million.

Other. The share of profit / (loss) of associates from the Others segment decreased by 85.8%, from a net loss of ARS 2,492 million during the fiscal year ended June 30, 2019 to a net loss of ARS 355 million during the fiscal year ended June 30, 2020, mainly as a result of a loss from our investments in Banco Hipotecario S.A. in the amount of ARS 410 million.

Financial results, net

The financial results went from a loss of ARS 3,102 million during the fiscal year ended June 30, 2019 to a loss of ARS 12,960 million during the fiscal year ended June 30, 2020. Such variation is mainly due to the devaluation of the Argentine peso against the dollar.

Income Tax

The Company applies the deferred tax method to calculate the income tax for the reported fiscal years, thus recognizing temporary differences as tax assets and liabilities. The income tax charge went from a profit of ARS 4,845 million for the fiscal year ended June 30, 2019, to a loss of ARS 7,216 million during the fiscal year ended June 30, 2020, from the Operations Center in Argentina.

Profit for the year

As a result of the factors described above, the profit for the year, including the effect of discontinued operations, went from a loss of ARS 41,307 million during the fiscal year ended June 30, 2019 to a profit of ARS 25,548 million during the fiscal year ended June 30, 2020, out of which a profit of ARS 29,171 million derives from the Operations Center in Argentina, and a loss of ARS 3,623 million from the Operations Center in Israel.

Results of Operations for the Year ended June 30, 2019 compared to the Year ended June 30, 2018

Below is a summary of the operating segments by geography and a reconciliation between the operating result according to the information by segments and the operating result according to the income statement for the years ended June 30, 2019 and 2018.

	Operations Center in Argentina			Operations Center in Israel			Total Segment Information			Joint Ventures			Expenses and Collective Promotion Fund			Inter-segment eliminations and non-reportable assets /<br>liabilities			Total income statement / statement of financial<br>position
	06.30.19	06.30.18	Var.	06.30.19	06.30.18	Var.	06.30.19	06.30.18	Var.	06.30.19	06.30.18	Var.	06.30.19	06.30.18	Var.	06.30.19	06.30.18	Var.	06.30.19	06.30.18	Var.
(in Million<br>ARS)
Revenues	16,208	14,935	1,273	-	-	-	16,208	14,935	1,273	(101)	(116)	15	3,990	4,724	(734)	(26)	(21)	(5)	20,071	19,522	549
Costs	(3,418)	(3,016)	(402)	-	-	-	(3,418)	(3,016)	(402)	71	74	(3)	(4,151)	(4,785)	634	-	-	-	(7,498)	(7,727)	229
Gross profit/(loss)	12,790	11,919	871	-	-	-	12,790	11,919	871	(30)	(42)	12	(161)	(61)	(100)	(26)	(21)	(5)	12,573	11,795	778
Net<br>gain/(loss) from fair value adjustment of investment<br>properties	(42,639)	21,764	(64,403)	-	-	-	(42,639)	21,764	(64,403)	902	(1,137)	2,039	-	-	-	-	-	-	(41,737)	20,627	(62,364)
General and<br>administrative expenses	(2,880)	(2,513)	(367)	(115)	(84)	(31)	(2,995)	(2,597)	(398)	19	44	(25)	-	-	-	48	35	13	(2,928)	(2,518)	(410)
Selling<br>expenses	(1,168)	(1,211)	43	-	-	-	(1,168)	(1,211)	43	8	16	(8)	-	-	-	-	-	-	(1,160)	(1,195)	35
Other<br>operating results, net	(711)	(57)	(654)	-	-	-	(711)	(57)	(654)	209	46	163	18	(2)	20	(22)	(14)	(8)	(506)	(27)	(479)
Profit/(loss) from operations	(34,608)	29,902	(64,510)	(115)	(84)	(31)	(34,723)	29,818	(64,541)	1,108	(1,073)	2,181	(143)	(63)	(80)	-	-	-	(33,758)	28,682	(62,440)
Share of<br>profit/(loss) of associates and joint ventures	(6,492)	(4,551)	(1,941)	-	-	-	(6,492)	(4,551)	(1,941)	(1,096)	1,000	(2,096)	-	-	-	-	-	-	(7,588)	(3,551)	(4,037)
Segment profit/(loss)	(41,100)	25,351	(66,451)	(115)	(84)	(31)	(41,215)	25,267	(66,482)	12	(73)	85	(143)	(63)	(80)	-	-	-	(41,346)	25,131	(66,477)
Reportable<br>assets	120,102	164,606	(44,504)	576,561	606,800	(30,239)	696,663	771,406	(74,743)	(656)	331	(987)	-	-	-	34,279	27,117	7,162	730,286	798,854	(68,568)
Reportable<br>liabilities	-	-	-	(496,305)	(515,728)	19,423	(496,305)	(515,728)	19,423	-	-	-	-	-	-	(101,937)	(111,024)	9,087	(598,242)	(626,752)	28,510
Net reportable assets	120,102	164,606	(44,504)	80,256	91,072	(10,816)	200,358	255,678	(55,320)	(656)	331	(987)	-	-	-	(67,658)	(83,907)	16,249	132,044	172,102	(40,058)

Operations Center in Argentina

Below is a summary analysis of the operating segments by products and services of the Operations Center in Argentina for the years ended June 30, 2019 and 2018.

	Shopping Malls			Offices			Sales and Developments			Hotels			International			Corporate			Others			Total
	06.30.19	06.30.18	Var.	06.30.19	06.30.18	Var.	06.30.19	06.30.18	Var.	06.30.19	06.30.18	Var.	06.30.19	06.30.18	Var.	06.30.19	06.30.18	Var.	06.30.19	06.30.18	Var.	06.30.19	06.30.18	Var.
(in Million<br>ARS)
Revenues	9,195	10,497	(1,302)	2,409	1,434	975	1,205	324	881	3,179	2,633	546	15	-	15	-	-	-	205	47	158	16,208	14,935	1,273
Costs	(835)	(892)	57	(141)	(113)	(28)	(566)	(160)	(406)	(1,707)	(1,798)	91	(6)	-	(6)	-	-	-	(163)	(53)	(110)	(3,418)	(3,016)	(402)
Gross profit/(loss)	8,360	9,605	(1,245)	2,268	1,321	947	639	164	475	1,472	835	637	9	-	9	-	-	-	42	(6)	48	12,790	11,919	871
Net<br>gain/(loss) from fair value adjustment of investment<br>properties	(43,687)	6,746	(50,433)	663	6,728	(6,065)	782	7,900	(7,118)	-	-	-	6	-	6	-	-	-	(403)	390	(793)	(42,639)	21,764	(64,403)
General and<br>administrative expenses	(1,017)	(917)	(100)	(228)	(235)	7	(305)	(213)	(92)	(530)	(524)	(6)	(118)	(127)	9	(560)	(413)	(147)	(122)	(84)	(38)	(2,880)	(2,513)	(367)
Selling<br>expenses	(571)	(653)	82	(107)	(153)	46	(127)	(62)	(65)	(340)	(335)	(5)	-	-	-	-	-	-	(23)	(8)	(15)	(1,168)	(1,211)	43
Other<br>operating results, net	(118)	(113)	(5)	(43)	(24)	(19)	(309)	149	(458)	123	(43)	166	(26)	(62)	36	-	-	-	(338)	36	(374)	(711)	(57)	(654)
Profit/(loss) from operations	(37,033)	14,668	(51,701)	2,553	7,637	(5,084)	680	7,938	(7,258)	725	(67)	792	(129)	(189)	60	(560)	(413)	(147)	(844)	328	(1,172)	(34,608)	29,902	(64,510)
Share of<br>profit/(loss) of associates and joint ventures	-	-	-	-	-	-	(40)	4	(44)	-	-	-	(3,960)	(4,763)	803	-	-	-	(2,492)	208	(2,700)	(6,492)	(4,551)	(1,941)
Segment profit/(loss)	(37,033)	14,668	(51,701)	2,553	7,637	(5,084)	640	7,942	(7,302)	725	(67)	792	(4,089)	(4,952)	863	(560)	(413)	(147)	(3,336)	536	(3,872)	(41,100)	25,351	(66,451)
Reportable<br>assets	54,277	97,172	(42,895)	34,166	30,827	3,339	30,558	27,757	2,801	2,075	2,191	(116)	(7,484)	(3,953)	(3,531)	-	-	-	6,510	10,612	(4,102)	120,102	164,606	(44,504)
Reportable<br>liabilities	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-
Net reportable assets	54,277	97,172	(42,895)	34,166	30,827	3,339	30,558	27,757	2,801	2,075	2,191	(116)	(7,484)	(3,953)	(3,531)	-	-	-	6,510	10,612	(4,102)	120,102	164,606	(44,504)

Operations Center in Israel

Below is a summary analysis of the operating segments by products and services of the Operations Center in Israel for the years ended June 30, 2019 and 2018.

	Real Estate			Supermarkets			Telecommunications			Insurance			Corporate			Others			Total
	06.30.19	06.30.18	Var.	06.30.19	06.30.18	Var.	06.30.19	06.30.18	Var.	06.30.19	06.30.18	Var.	06.30.19	06.30.18	Var.	06.30.19	06.30.18	Var.	06.30.19	06.30.18	Var.
(in Million<br>Pesos)
Revenues	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-
Costs	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-
Gross profit/(loss)	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-
Net<br>gain/(loss) from fair value adjustment of investment<br>properties	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-
General and<br>administrative expenses	-	-	-	-	-	-	-	-	-	-	-	-	(115)	(84)	(31)	-	-	-	(115)	(84)	(31)
Selling<br>expenses	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-
Other<br>operating results, net	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-
Profit/(loss) from operations	-	-	-	-	-	-	-	-	-	-	-	-	(115)	(84)	(31)	-	-	-	(115)	(84)	(31)
Share of<br>profit/(loss) of associates and joint ventures	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-
Segment profit/(loss)	-	-	-	-	-	-	-	-	-	-	-	-	(115)	(84)	(31)	-	-	-	(115)	(84)	(31)
Reportable<br>assets	326,652	320,845	5,807	24,775	31,843	(7,068)	117,753	119,199	(1,446)	24,370	29,332	(4,962)	44,716	51,062	(6,346)	38,295	54,519	(16,224)	576,561	606,800	(30,239)
Reportable<br>liabilities	(253,584)	(249,429)	(4,155)	-	-	-	(91,292)	(92,885)	1,593	-	-	-	(136,275)	(167,475)	31,200	(15,154)	(5,939)	(9,215)	(496,305)	(515,728)	19,423
Net reportable assets	73,068	71,416	1,652	24,775	31,843	(7,068)	26,461	26,314	147	24,370	29,332	(4,962)	(91,559)	(116,413)	24,854	23,141	48,580	(25,439)	80,256	91,072	(10,816)

Revenue 2019 vs 2018

Revenues from sales, leases and services, according to the income statement, increased by ARS 549 million, from ARS 19,522 million during the year ended June 30, 2018 to ARS 20,071 million during the year ended June 30, 2019 (from the Operations Center in Argentina). Excluding revenue from the Operations Center in Israel, revenues from sales, leases and services increased by 2.8%.

In turn, revenues from expenses and collective promotion fund decreased by 15.5%, from ARS 4,724 million (out of which ARS 4,424 million are allocated to the Shopping Malls segment and ARS 300 million to the Offices segment of the Operations Center in Argentina) during the year ended June 30, 2018, to ARS 3,990 million (out of which ARS 3,670 million are allocated to the Shopping Malls segment and ARS 320 million to the Offices segment) during the year ended June 30, 2019.

Likewise, revenues from our joint ventures decreased by 12.9%, from ARS 116 million during the fiscal year ended June 30, 2018 (out of which ARS 91 million are allocated to the Shopping Malls segment, ARS 10 million to the Offices segment and ARS 15 million to the Sales and Developments Segment of the Operations Center in Argentina) to ARS 101 million during the year ended June 30, 2019 (out of which ARS 82 million are allocated to the Shopping Malls segment, ARS 18 million to the Offices segment and ARS 1 million to the Sales and Developments segment of the Operations Center in Argentina).

Finally, revenues from inter-segment operations increased ARS 5 million, from ARS 21 million during the year ended June 30, 2018 to ARS 26 million during the year ended June 30, 2019.

Therefore, according to the information by segments, revenues increased ARS 1,273 million, from ARS 14,935 million during the year ended June 30, 2018 to ARS 16,208 million during the year ended June 30, 2019 (from the Operations Center in Argentina). Excluding revenue from the Operations Center in Israel, revenues, according to the information by segments, increased by 8.5%.

Operations Center in Argentina

Shopping Malls. Revenues from the Shopping Malls segment decreased 12.4%, from ARS 10,497 million during fiscal year 2018 to ARS 9,195 million during fiscal year 2019, mainly attributable to: (i) an ARS 1,051 million decrease in revenues from fixed and variable leases as a result of a 13.9% decrease in the total sales of our tenants, from ARS 118,083 million during fiscal year 2018 to ARS 101,665 million during fiscal year 2019, (ii) an ARS 151 million decrease in the revenues from commissions, (iii) an ARS 131 million decrease in the revenues from admission rights, (iv) an ARS 129 million decrease in the revenues from parking fees, (v) an ARS 18 million decrease in the revenue from averaging of scheduled rent escalation; partially mitigated by (vi) an increase of ARS 207 million in other income, mainly attributable to the rescind of the contract with Walmart.

Offices. Revenues from the Offices segment increased 68.0%, from ARS 1,434 million during the year ended June 30, 2018 to ARS 2,409 million during the year ended June 30, 2019. The variation is explained by a significant increase in revenues from leases of different buildings, mainly PH Office Park and Zeta Buildings, and the effect of the exchange rate variation.

Sales and developments. Revenues from the Sales and Developments segment registered an increase of 271.9%, from ARS 324 million during the year ended June 30, 2018 to ARS 1,205 million during the year ended June 30, 2019. This segment often varies significantly from year to year due to the non-recurrence of different sales transactions carried out by the Group over time.

Hotels. Revenues from our Hotels segment increased by 20.7% from ARS 2,633 million during the year ended June 30, 2018 to ARS 3,179 million during the year ended June 30, 2019, mainly due to an increase in the average room rate of our hotel portfolio (measured in pesos).

International. Revenues associated with our International segment increased 100.0%, for ARS 15 million during the year ended June 30, 2019, due to the sale of properties by our subsidiary Real Estate Strategies LLC.

Corporate. Revenues associated with our Corporate segment did not present variations for the years presented.

Others. Revenues from the Others segment increased 336.2%, from ARS 47 million during the year ended June 30, 2018 to ARS 205 million during the year ended June 30, 2019, mainly due to the increase in revenues from La Arena S.A. y La Rural S.A., OFC S.R.L., Ogden S.A and Eentretenumiento Universal S.A. – Unión transitoria – (administradora del Centro de Convenciones y Exposiciones de la Ciudad de Buenos Aires).

Costs 2019 vs 2018

Total consolidated costs, according to the income statement, registered a decrease of ARS 229 million, from ARS 7,727 million during the year ended June 30, 2018 to ARS 7,498 million during the year ended June 30, 2019 (from the Operations Center in Argentina). Excluding costs derived from the Operations Center in Israel, costs decreased by 3.0%. Furthermore, total consolidated costs measured as a percentage of total consolidated revenues increased from 39.6% during the year ended June 30, 2018 to 37.4% during the year ended June 30, 2019.

In turn, costs related to expenses and collective promotion fund decreased by 13.2%, from ARS 4,785 million during the year ended June 30, 2018 (out of which ARS 4,519 million are allocated to the Shopping Malls segment and ARS 266 million to the Offices segment of the Operations Center in Argentina) to ARS 4,151 million during the year ended June 30, 2019 (out of which ARS 3,825 million are allocated to the Shopping Malls segment and ARS 326 million to the Offices segment of the Operations Center in Argentina) due mainly to lower costs originated by our Shopping Malls, which decreased by 15.4%, from ARS 4,519 million during the year ended June 30, 2018 to ARS 3,825 million during the year ended June 30, 2019.

Likewise, costs from our joint ventures decreased by 4.1%, from ARS 74 million during the year ended June 30, 2018 (out of which ARS 10 million are allocated to the Shopping Malls segment, ARS 52 million to the Offices segment and ARS 12 million to the Sales and Developments segment of the Operations Center in Argentina) to ARS 71 million during the year ended June 30, 2019 (out of which ARS 17 million are allocated to the Shopping Malls segment, ARS 45 million to the Offices segment and ARS 9 million to the Sales and Developments segment of the Operations Center in Argentina).

Finally, costs from inter-segment operations showed no variations for the reported periods.

Therefore, according to the information by segments (taking into account the costs from our joint ventures and without considering the costs from expenses and collective promotion fund or the costs from inter-segment operations), costs evidenced an increase of ARS 402 million, from ARS 3,016 million during the year ended June 30, 2018 to ARS 3,418 million during the year ended June 30, 2019 (from the Operations Center in Argentina). Excluding costs derived from the Operations Center in Israel, costs increased by 13.3%. Likewise, total costs measured as a percentage of total revenues, according to information by segments, increased from 20.2% during the year ended June 30, 2018 to 21.1% during the year ended June 30, 2019, mainly from the Operations Center in Israel.

Operations Center in Argentina

Shopping Malls. The costs of our Shopping Malls segment decreased 6.4%, from ARS 892 million during fiscal year 2018 to ARS 835 million during fiscal year 2019, mainly generated by: (i) a decrease in salaries, social security charges and other personnel expenses of ARS 47 million; (ii) a decrease in depreciation and amortization of ARS 22 million; and (iii) a decrease in maintenance, security, cleaning, repairs and related expenses of ARS 10 million; partially offset by: (iv) an increase in costs of leases and expenses for ARS 26 million (generated by the leases in dollar, due to the increase in the exchange rate). The Shopping Malls segment costs, as a percentage of revenues from this segment, increased from 8.5% during fiscal year 2018 to 9.1% during fiscal year 2019.

Offices. Costs in the Offices segment increased by 24.8%, from ARS 113 million during the year ended June 30, 2018 to ARS 141 million during the year ended June 30, 2019, mainly due to: (i) an increase in depreciation and amortization of ARS 57 million; offset by: (i) a decrease in leases and expenses of ARS 14 million; (ii) a decrease in maintenance, repairs and services expenses of ARS 9 million; (iii) a decrease in fees and compensation for services of ARS 5 million; and (iv) a decrease in taxes, fees and contributions of ARS 3 million. Costs in the Offices segment, measured as a percentage of revenues of this segment, decreased from 7.9% during the year ended June 30, 2018 to 5.9% during the year ended June 30, 2019.

Sales and developments. Costs associated with our Sales and Developments segment registered an increase of 253.8%, from ARS 160 million during the year ended June 30, 2018 to ARS 566 million during the year ended June 30, 2019, mainly due to the costs of sales of Catalinas Norte. The costs of the Sales and Developments segment, measured as a percentage of revenues from this segment decreased from 49.4% during the year ended June 30, 2018 to 47.0% during the year ended June 30, 2019.

Hotels. Costs in the Hotels segment decreased by 5.1%, from ARS 1,798 million during the year ended June 30, 2018 to ARS 1,707 million during the year ended June 30, 2019, mainly as a result of: (i) a decrease of ARS 115 million in costs of salaries, social security and other personnel expenses; and (ii) a decrease of ARS 9 million in food, beverages and other hotel expenses, offset by (i) an increase in fees and compensation for services of ARS 31 million. Costs in the Hotels segment, measured as a percentage of revenues of this segment, decreased from 68.3% during the year ended June 30, 2018 to 53.7% during the year ended June 30, 2019.

International. Costs in the International segment increased 100.0%, with ARS 6 million during the year ended June 30, 2019, associated with the cost of sale of properties by our subsidiary Real Estate Strategies LLC.

Corporate. Costs in the Corporate segment did not vary for the years presented.

Others. Costs in the Others segment increased by 207.5%, from ARS 53 million during the year ended June 30, 2018 to ARS 163 million during the year ended June 30, 2019, mainly as a result of: (i) higher charges of ARS 31 million in taxes, fees and contributions, (ii) an increase of ARS 21 million in leases and expenses; (iii) an increase of ARS 18 million in fees and compensation for services, (iv) an increase of ARS 15 million in depreciation and amortization, (v) an increase of ARS 13 million in maintenance, repairs and services; and (vi) an increase of ARS 10 million in salaries, social security and other personnel expenses.

Gross profit 2019 vs 2018

The total consolidated gross profit, according to the income statement, increased by ARS 778 million, from ARS 11,795 million during the year ended June 30, 2018 to ARS 12,573 million during the year ended June 30, 2019 (from the Operations Center in Argentina). Excluding gross profit from the Operations Center in Israel, the gross profit increased by 6.6%. The total consolidated gross profit, measured as a percentage of revenues from sales, leases and services, increased from 60.4% during the year ended June 30, 2018 to 62.6% during the year ended June 30, 2019.

In turn, total gross loss for expenses and collective promotion fund increased ARS 100 million, from ARS 61 million during the year ended June 30, 2018 (out of which a loss of ARS 95 million derives from the Shopping Malls segment and a loss of ARS 34 million from the Offices segment), to ARS 161 million during the year ended June 30, 2019 (out of which a loss of ARS 155 million derives from the Shopping Malls segment and a loss of ARS 6 million from the Offices segment).

Additionally, the gross profit of our joint ventures decreased by 28.6%, from ARS 42 million during the year ended June 30, 2018 to ARS 30 million during the year ended June 30, 2019.

Therefore, according to the information by segments, gross profit increased by ARS 871 million, from ARS 11,919 million during the year ended June 30, 2018 to ARS 12,790 million during the year ended June 30, 2019 (from the Operations Center in Argentina). Excluding gross profit from the Operations Center in Israel, the gross profit increased by 7.3%. Likewise, gross profit, measured as a percentage of revenues, according to information by segments, decreased from 79.8% during the year ended June 30, 2018 to 78.9% during the year ended June 30, 2019.

Operations Center in Argentina

Shopping Malls. Gross profit from the Shopping Malls segment decreased 13.0%, from ARS 9,605 million during fiscal year 2018 to ARS 8,360 million for fiscal year 2019, mainly as a result of a decrease in total sales of our tenants, giving rise to lower rental percentages under our lease agreements. Gross profit from our Shopping Malls segment as a percentage of revenues for the segment decreased from 91.5% during fiscal year 2018 to 90.9% during fiscal year 2019.

Offices. Gross profit of the Offices segment increased by 71.7%, from ARS 1,321 million for the year ended June 30, 2018 to ARS 2,268 million during the year ended June 30, 2019. The gross profit of the Offices segment, measured as a percentage of revenues of this segment, increased from 92.1% during the year ended June 30, 2018 to 94.1% during the year ended June 30, 2019.

Sales and developments. Gross profit of the Sales and Developments segment increased by 289.6%, from ARS 164 million during the year ended June 30, 2018 to ARS 639 million during the year ended June 30, 2019, mainly as a result of higher sales recorded during the year ended June 30, 2019. The gross profit of the Sales and Developments segment, measured as a percentage of this segment’s revenues, increased from 50.6% during the year ended June 30, 2018 to 53.0% during the year ended June 30, 2019.

Hotels. Gross profit for the Hotels segment increased by 76.3% from ARS 835 million during the fiscal year ended June 30, 2018 to ARS 1,472 million during the year ended June 30, 2019. The gross profit of the Hotels segment, measured as a percentage of revenues of this segment, increased from 31.7% during the year ended June 30, 2018 to 46.3% during the year ended June 30, 2019.

International. Gross profit of the International segment increased 100.0%, with a gross profit of ARS 9 million during the year ended June 30, 2019.

Corporate. Gross profit of the Corporate segment did not present variations during the reported years.

Others. Gross profit from the Others segment increased 800.0%, from a loss of ARS 6 million during the year ended June 30, 2018 to a profit of ARS 42 million during the year ended June 30, 2019. The gross profit of the Others segment, measured as a percentage of revenues of this segment, increased from 12.8% negative during the year ended June 30, 2018 to 20.5% positive during the year ended June 30, 2019.

Net gain from fair value adjustment of investment properties 2019 vs 2018

Net gain from fair value adjustment of investment properties, according to the income statement, decreased by ARS 62,364 million, from a net gain of ARS 20,627 million during the year ended June 30, 2018 (from the Operations Center in Argentina) to a net loss of ARS 41,737 million during the year ended June 30, 2019 (from the Operations Center in Argentina).

It should be noted that according to the adjustment for inflation methodology, the gain/(loss) from fair value adjustment of investments properties should be broken down into its two effects: i) adjustment for inflation and ii) loss or gain from actual fair value adjustment, During the year ended June 30, 2019, the inflationary effect exceeds the appreciation of investment properties, therefore, a loss from fair value adjustment of investment properties of ARS 41,737 million is recognized.

Operations Center in Argentina

Shopping Malls segment

The shopping -Malls portfolio decreased between the fiscal year ended June 30, 2019 and 2018, as the end of the concession we had for Buenos Aires Design took place.

The net impact in the peso values of our properties was primarily a consequence of macroeconomic changes: (i) from june 2018 to june 2019, the Argentinian peso depreciated 47% against US Dolar (from ARS 28.75 per dolar to ARS 42.26 per dolar), which had a direct impact in a less projected cash flows in US Dolar from our Shopping Malls segment; and (ii) an increase of 234 basis points on the discount rate in US dolar, which it is used to discount the projected cash flow from Shopping Malls segment.

2. “Offices,” “Sales and developments,” “International” and “Others” segments,

Net gain/(loss) from actual fair value adjustment of investment properties included in these segments decreased by 93.0% during the year ended June 30, 2019.

The Argentine office market is a liquid market, in which a significant volume of counterparties participates and frequently carries out purchase and sale transactions. This allows to observe sale prices that are relevant and representative in the market. Furthermore, lease agreements are denominated in dollars for an average term of 3 years, with the current business thus generating a stable cash flow in dollars, In this sense, the “Market approach” technique is used (market comparable values) for the determination of the fair value of these segments, with the value per sqm being the most representative metric.

Changes in fair value from our Shopping Malls segment differ from our offices segment because the nature of each business is different and prices depend on factors that may not have similarly over time. As we mentioned before, the office property market is dominated by investors and owners that seek medium- to long-term leases and perceive real estate as a safe dollar-denominated investment option. In contrast, the shopping mall segment is a relatively new industry in Argentina where the first shopping mall opened in 1990, compared to markets such as the United States and Brazil where the industry began in the 1950’s and 1960’s, respectively. Additionally, unlike the office properties segment, the financial performance of shopping mall properties is highly correlated with the volatile economic activity in Argentina since the cash flow generated by shopping malls are closely related to the purchasing power of customers.

General and administrative expenses 2019 vs 2018

Total general and administrative expenses, according to the income statement, recorded an increase of ARS 410 million, from ARS 2,518 million during the year ended June 30, 2018 (out of which ARS 84 million derive from the Operations Center in Israel and ARS 2,434 million from the Operations Center in Argentina) to ARS 2,928 million during the year ended June 30, 2019 (out of which ARS 115 million derive from the Operations Center in Israel and ARS 2,813 million from the Operations Center in Argentina). Excluding the effect from the Operations Center in Israel, general and administrative expenses increased by 15.6%. Total general and administrative expenses measured as a percentage of revenues from sales, leases and services slightly increased from 12.9% during the year ended June 30, 2018 to 14.6% during the year ended June 30, 2019. Excluding the effect from the Operations Center in Israel, total general and administrative expenses, according to the income statement, increased from 12.5% during the year ended June 30, 2018 to 14.0% during the year ended June 30, 2019.

In turn, general and administrative expenses of our joint ventures decreased ARS 25 million, from ARS 44 million during the year ended June 30, 2018 to ARS 19 million during the year ended June 30, 2019.

Finally, general and administrative expenses for inter-segment operations increased ARS 13 million, from ARS 35 million during the year ended June 30, 2018 to ARS 48 million during the year ended June 30, 2019.

Therefore, according to the information by segments, general and administrative expenses increased ARS 398 million, from ARS 2,597 million during the year ended June 30, 2018 (out of which ARS 84 million derive from the Operations Center in Israel and ARS 2,513 million from the Operations Center in Argentina) to ARS 2,995 million during the year ended June 30, 2019 (out of which ARS 115 million derive from the Operations Center in Israel and ARS 2,880 million from the Operations Center in Argentina). Excluding the general and administrative expenses from the Operations Center in Israel, expenses increased by 14.6%. General and administrative expenses measured as a percentage of revenues, according to the information by segments, slightly increased from 17.4% during the year ended June 30, 2018 to 18.5% during the year ended June 30, 2019. Without considering the effect from the Operations Center in Israel, total general and administrative expenses, measured as a percentage of total revenues, increased from 16.8% during the year ended June 30, 2018 to 17.8% during the year ended June 30, 2019.

Operations Center in Argentina

Shopping Malls. Administrative expenses of Shopping Malls increased 10.9%, from ARS 917 million during fiscal year 2018 to ARS 1,017 million during fiscal year 2019, mainly due to: (i) an increase of ARS 141 million in salaries, social security charges and other personnel expenses; (ii) an increase of ARS 32 million in maintenance, repair and service expenses and employees’ travel expenses; partially mitigated by (iii) a decrease of ARS 37 million in directors’ fees; (iv) a decrease of ARS 22 million in banking expenses; and (v) a decrease of ARS 13 million in fees and compensations for services. Administrative expenses of Shopping Malls as a percentage of revenues from such segment increased from 8.7% during fiscal year 2018 to 11.1% during fiscal year 2019.

Offices. The general and administrative expenses of our Offices segment decreased by 3.0%, from ARS 235 million during the year ended June 30, 2018 to ARS 228 million during the year ended June 30, 2019, mainly as a result of: (i) a decrease of ARS 13 million in salaries, social security and other personnel expenses; (ii) a decrease of ARS 8 million in fees and compensation for services and (iii) a decrease of ARS 8 million in advertising and other commercial expenses, partially offset by: (iv) an increase of ARS 23 million in fees to directors. General and administrative expenses, measured as a percentage of revenues in the same segment, decreased from 16.4% during the year ended June 30, 2018 to 9.5% during the year ended June 30, 2019.

Sales and developments. General and administrative expenses associated with our Sales and developments segment increased by 43.2%, from ARS 213 million during the year ended June 30, 2018 to ARS 305 million during the year ended June 30, 2019, mainly as a result of an increase in salaries, social security and other personnel expenses of ARS 75 million, among other items. General and administrative expenses, measured as a percentage of revenues in the same segment, decreased from 65.7% during the year ended June 30, 2018 to 25.3% during the year ended June 30, 2019.

Hotels. General and administrative expenses associated with our Hotels segment increased by 1.1% from ARS 524 million during the year ended June 30, 2018 to ARS 530 million during the year ended June 30, 2019, mainly as a result of: (i) an increase of ARS 34 million in fees and compensation for services, offset by (i) a decrease in salaries, social security and other personnel expenses of ARS 18 million and (ii) a decrease of ARS 7 million in taxes, fees and contributions. General and administrative expenses associated with the Hotels segment measured as a percentage of this segment’s revenues decreased from 19.9% during the year ended June 30, 2018 to 16.7% during the year ended June 30, 2019.

International. General and administrative expenses associated with our International segment decreased by 7.1%, from ARS 127 million during the year ended June 30, 2018 to ARS 118 million during the year ended June 30, 2019, mainly due to: (i) an increase in fees and compensation for services of ARS 28 million, (ii) an increase in salaries, social security and other personnel expenses of ARS 12 million, (iii) an increase in maintenance, repairs and services of ARS 6 million, and (iv) an increase in depreciation and amortization of ARS 3 million, partially offset by: (v) decreased taxes, as Imadison’s taxes were paid in the previous year.

Corporate. General and administrative expenses associated with our Corporate segment increased by 35.6%, from ARS 413 million during the year ended June 30, 2018 to ARS 560 million during the year ended June 30, 2019, mainly due to an increase of ARS 187 million in fees to directors, offset by a decrease of ARS 40 million in fees and compensation for services, among other items.

Others. General and administrative expenses associated with our Others segment increased 45.2%, from ARS 84 million during the year ended June 30, 2018 to ARS 122 million during the year ended June 30, 2019, mainly due to (i) an increase of ARS 16 million in other administrative expenses; (ii) an increase of ARS 7 million in maintenance, repairs and services; (iii) an increase of ARS 4 million in fees and compensation for services, and (iv) an increase of ARS 7 million in salaries, social security and other personnel expenses, among other items.

Operations Center in Israel

Corporate. General and administrative expenses associated with the Corporate segment increased from ARS 84 million during the period ended June 30, 2018 to ARS 115 million during the period ended June 30, 2019. Such variation was due to an increase in fees and compensation for services.

Selling expenses 2019 vs 2018

Total consolidated selling expenses, according to the income statement, showed a decrease of ARS 35 million, from ARS 1,195 million during the year ended June 30, 2018 to ARS 1,160 million during the year ended June 30, 2019 (from the Operations Center in Argentina. Excluding selling expenses derived from the Operations Center in Israel, selling expenses decreased by 2.9%. Total consolidated selling expenses measured as a percentage of revenues from sales, leases and services, decreased from 6.1% during the year ended June 30, 2018 to 5.8% during the year ended June 30, 2019.

In turn, selling expenses of our joint ventures decreased ARS 8 million, from ARS 16 million during the year ended June 30, 2018 to ARS 8 million during the year ended June 30, 2019.

Therefore, according to the information by segments, selling expenses decreased ARS 43 million, from ARS 1,211 million during the year ended June 30, 2018 to ARS 1,168 million during the year ended June 30, 2019 (from the Operations Center in Argentina). Excluding selling expenses derived from the Operations Center in Israel, selling expenses decreased by 3.6%, Selling expenses measured as a percentage of revenues, according to information by segments, decreased from 8.1% during the year ended June 30, 2018 to 7.2% during the year ended June 30, 2019.

Operations Center in Argentina

Shopping Malls. Selling expenses from the Shopping Malls segment decreased 12.6%, from ARS 653 million during fiscal year 2018 to ARS 571 million during fiscal year 2019, mainly as a result of: (i) a decrease in publicity, advertising and other commercial expenses of ARS 36 millions; (ii) a decrease in taxes, rates and contributions of ARS 33 millions and (iii) a decrease of ARS 15 millions in bad debt charge; partially offset by (iv) an increase in salaries, social security charges and other personnel expenses of ARS 3 million. Selling expenses as a percentage of revenues from the Shopping Malls segment remained flat in 6.2% during fiscal year 2018 and 2019.

Offices. Selling expenses associated with our Offices segment decreased by 30.1%, from ARS 153 million during the year ended June 30, 2018 to ARS 107 million during the year ended June 30, 2019. This variation was generated mainly as a result of a decrease in the charge of doubtful accounts of ARS 74 million, offset by: (i) an increase of ARS 14 million in taxes, fees and contributions and (ii) an increase of ARS 12 million in advertising and other commercial expenses. Selling expenses associated with our Offices segment, measured as a percentage of this segment's revenues, decreased from 10.7% during the year ended June 30, 2018 to 4.4% during the year ended June 30, 2019.

Sales and developments. Selling expenses associated with the Sales and Developments segment increased 104.8%, from ARS 62 million during the year ended June 30, 2018 to ARS 127 million during the year ended June 30, 2019. This variation was mainly due to an ARS 70 million increase in taxes, fees and contributions. Selling expenses associated with our Sales and developments segment, measured as a percentage of this segment’s revenues, decreased from 19.1% during the year ended June 30, 2018 to 10.5% during the year ended June 30, 2019.

Hotels. Selling expenses associated with our Hotels segment increased 1.5%, from ARS 335 million during the year ended June 30, 2018 to ARS 340 million during the year ended June 30, 2019, mainly as a result of an increase of ARS 28 million in taxes, fees and contributions, offset by: (i) a decrease of ARS 14 million in fees and compensation for services, and (ii) a decrease of ARS 12 million in salaries, social security and other personnel expenses. Selling expenses associated with our Hotels segment measured as a percentage of this segment's revenues decreased from 12.7% during the year ended June 30, 2018 to 10.7% during the year ended June 30, 2019.

International. Selling expenses associated with the International segment did not show variations during the reported years.

Corporate. Selling expenses associated with the Corporate segment did not show variations during the reported years.

Others. Selling expenses associated with our Others segment increased 187.5%, from ARS 8 million during the year ended June 30, 2018 to ARS 23 million during the year ended June 30, 2019, mainly due to: (i) an increase of ARS 8 million in taxes, rates and contributions, (ii) an increase of ARS 6 million in advertising and other commercial expenses, and (iii) an increase of ARS 6 million in doubtful accounts. Selling expenses associated with our Others segment measured as a percentage of this segment's revenues decreased, from 17.0% during the year ended June 30, 2018 to 11.2% during the year ended June 30, 2019.

Other operating results, net 2019 vs 2018

Other operating results, net, according to the income statement, registered a decrease of ARS 479 million, from a net loss of ARS 27 million during the year ended June 30, 2018 to a net loss of ARS 506 million during the year ended June 30, 2019 (from the Operations Center in Argentina).

Other operating results, net from our joint ventures increased ARS 163 million, from a profit of ARS 46 million during the year ended June 30, 2018 to a profit of ARS 209 million during the year ended June 30, 2019 (out of which a profit of ARS 201 million is allocated to the Sales and Developments segment, a profit of ARS 10 million is allocated to the Shopping Malls segment within the Operations Center in Argentina and a loss of ARS 2 million is allocated to the Offices segment).

In turn, other operating results for expenses and collective promotion fund increased ARS 20 million, from ARS 2 million during the year ended June 30, 2018 (out of which a loss of ARS 2 million derives from the Shopping Malls segment), to ARS 18 million during the year ended June 30, 2019 (out of which a profit of ARS 18 million derives from the Shopping Malls segment).

Therefore, according to the information by segments, other operating results, net recorded a decrease of ARS 654 million, from a net loss of ARS 57 million during the year ended June 30, 2018 to a net loss of ARS 711 million during the year ended June 30, 2019.

Operations Center in Argentina

Shopping Malls. Other operating results, net from the Shopping Malls segment increased by 4.4%, from a net loss of ARS 113 million during fiscal year 2018 to a net loss of ARS 118 million during fiscal year 2019, mainly as a result of: (i) an increase in charity charges of ARS 46 million; partially offset by: (ii) a recovery of litigation costs of ARS 25 million and (iii) an increase in the interest for late payment that is charged to our customers of ARS 34 million. Other operating results, net from this segment as a percentage of the revenues from this segment slightly increased from 1.1% negative during the year ended June 30, 2018 to 1.3% negative during the year ended June 30, 2019.

Offices. Other operating results, net, associated with our Offices segment increased by 79.2%, from a net loss of ARS 24 million during the year ended June 30, 2018 to a net loss of ARS 43 million during the year ended June 30, 2019, mainly as a consequence of an increase in donations, among other items. Other operating results, net, of this segment, as a percentage of this segment’s revenues, increased from 1.7% negative during the year ended June 30, 2018 to 1.8% negative during the year ended June 30, 2019.

Sales and developments. Other operating results, net, associated with our Sales and Developments segment decreased by 307.4%, from a net profit of ARS 149 million during the year ended June 30, 2018 to a net loss of ARS 309 million during the year ended June 30, 2019, mainly as a result of a provision set up for the plot of land owned by Puerto Retiro S.A., thus generating a negative result of ARS 304 million, compared to the previous year in which a positive result was obtained due to the sale of floors of Intercontinental Building by IRSA Propiedades Comerciales. Other operating results, net, of this segment, as a percentage of this segment's revenues, decreased from 46.0% positive during the year ended June 30, 2018 to 25.6% negative during the year ended June 30, 2019.

Hotels. Other operating results, net, associated with the Hotels segment increased 386.0%, from a net loss of ARS 43 million during the year ended June 30, 2018 to a net profit of ARS 123 million during the year ended June 30, 2019, mainly due to an insurance recovery associated with a boiler-related loss. Other operating results, net, of this segment, as a percentage of this segment's revenues increased from 1.6% negative during the year ended June 30, 2018 to 3.9% positive during the year ended June 30, 2019.

International. Other operating results, net, of this segment decreased by 58.1%, from a net loss of ARS 62 million during the year ended June 30, 2018 to a net loss of ARS 26 million during the year ended June 30, 2019, mainly due to lower donations and tax charges.

Corporate. Other operating results, net, associated with the Corporate segment did not show variations during the reported years.

Others. Other operating results, net, associated with the Others segment decreased by 1,038.9%, from a net profit of ARS 36 million during the year ended June 30, 2018 to a net loss of ARS 338 million during the year ended June 30, 2019, mainly due to a negative result generated by the sale of Tarshop S.A. and lower results from Entertainment Holdings S.A. Other net operating results, of this segment, as a percentage of this segment's revenues increased from 76.6% positive during the year ended June 30, 2018 to 164.9% negative during the year ended June 30, 2019.

Profit / (loss) from operations 2019 vs 2018

The total consolidated profit from operations, pursuant to the income statement, decreased from a net profit of ARS 28,682 million during the year ended June 30, 2018 to a net loss of ARS 33,758 million during the year ended June 30, 2019 (out of which a net profit of ARS 115 million derives from the Operations Center in Israel and a loss of ARS 33,643 from the Operations Center in Argentina), Excluding the effect from the Operations Center in Israel, profit from operations decreased by 217.0%. The total consolidated profit from operations, measured as a percentage of revenues from sales, leases and services, increased from 146.9% positive during the year ended June 30, 2018 to 168.2% negative during the year ended June 30, 2019, Without considering the effect from the Operations Center in Israel, the total consolidated profit from operations, measured as a percentage of total revenues, increased from 147.4% positive during the year ended June 30, 2018 to 167.6% negative during the year ended June 30, 2019.

Profit from operations of our joint ventures increased from a loss of ARS 1,073 million during the year ended June 30, 2018 (out of which an ARS 122 million profit is allocated to the Shopping Malls segment, a net loss of ARS 1,027 million derives from the Offices segment and an ARS 76 million profit to the Sales and Developments segment of the Operations Center in Argentina), to a net profit of ARS 1,108 million during the year ended June 30, 2019 (out of which a profit of ARS 125 million is allocated to the Shopping Malls segment, a net profit of ARS 758 million derives from the Offices segment and a profit of ARS 225 million to the Sales and Developments of the Operations Center in Argentina).

Therefore, according to the information by segments, profit from operations net loss, decreased from a net profit of ARS 29,818 million during the year ended June 30, 2018 to a net loss of ARS 34,723 million during the year ended June 30, 2019 (out of which ARS 115 million derive from the Operations Center in Israel and a loss of ARS 34,608 from the Operations Center in Argentina). Profit from operations, measured as a percentage of revenues according to segment information, decreased from 199.7% profit during the year ended June 30, 2018 to 214.2% loss during the year ended June 30, 2019. Excluding the effect from the Operations Center in Israel, total profit from operations according to segment information, measured as a percentage of total revenues, increased from 200.2% profit during the year ended June 30, 2018 to 213.5% loss during the year ended June 30, 2019.

Operations Center in Argentina

Shopping Malls. Operating income from the Shopping Malls segment decreased, from a profit of ARS 14,668 million during fiscal year 2018, to a loss of ARS 37,033 million during fiscal year 2019.

Offices. Profit from operations associated with our Offices segment, decreased by 66.6%, from a profit of ARS 7,637 million during the year ended June 30, 2018 to a profit of ARS 2,553 million during the year ended June 30, 2019. The variation is mainly due to a decrease of ARS 6,047 million from the net gain from fair value adjustment of investment properties. Profit from operations of the Offices segment as a percentage of this segment's revenues decreased from 532.6% during the year ended June 30, 2018 to 106.0% during the year ended June 30, 2019.

Sales and developments. Profit from operations associated with our Sales and Developments segment decreased by 91.4%, from an ARS 7,938 million profit during the year ended June 30, 2018 to an ARS 680 million profit during the year ended June 30, 2019. This decrease is mainly due to a decrease of ARS 7,136 million in the net gain from fair value adjustment of investment properties. Profit from operations of the Sales and Developments segment as a percentage of this segment's revenues decreased from 2,450.0% during the year ended June 30, 2018 to 56.4% during the year ended June 30, 2019.

Hotels. Profit from operations associated with the Hotels segment showed an increase of 1,182.1%, from a loss of ARS 67 million during the year ended June 30, 2018 to a profit of ARS 725 million during the year ended June 30, 2019. This increase is mainly due to the increase in the average rate per room of our hotel portfolio (measured in pesos), thus generating an increase in revenues, and to the insurance recovery associated with the boiler-related loss in Intercontinental Hotel. Profit from operations of the Hotels segment as a percentage of this segment's revenues increased from 2.5% during the year ended June 30, 2018 to 22.8% during the year ended June 30, 2019.

International. Profit from operations associated with our International segment changed by 31.7%, from a loss of ARS 189 million during the year ended June 30, 2018 to a loss of ARS 129 million during the year ended June 30, 2019. This variation is due to lower donations and tax charges.

Corporate. Profit from operations associated with our Corporate segment increased by 35.6%, from a loss of ARS 413 million during the year ended June 30, 2018 to a loss of ARS 560 million during the year ended June 30, 2019, mainly affected by general and administrative expenses.

Others. Profit from operations associated with our Others segment decreased, from a net profit of ARS 328 million during the year ended June 30, 2018 to a net loss of ARS 844 million during the year ended June 30, 2019. This variation is mainly due to an ARS 793 million decrease in the net gain from fair value adjustment of investment properties. Profit from operations of the Others segment as a percentage of this segment's revenues decreased from 697.9% profit during the year ended June 30, 2018 to 411.7% loss during the year ended June 30, 2019.

Operations Center in Israel

Corporate. Profit from operations of the Corporate segment went from a net loss of ARS 84 million during the period ended June 30, 2018 to a net loss of ARS 115 million during the year ended June 30, 2019. Such variation was due to an increase in fees and compensation for services.

Share of profit / (loss) of associates and joint ventures 2019 vs 2018

The share of profit / (loss) of associates and joint ventures, pursuant to the income statement, increased by 113.7% from a net loss of ARS 3,551 million during the year ended June 30, 2018 to a net loss of ARS 7,588 million during the year ended June 30, 2019 (from the Operations Center in Argentina), mainly due to the negative results from the Sales and developments. International and Others segments.

Also, the net share of profit / (loss) of associates and joint ventures, mainly from Nuevo Puerto Santa Fe S.A. (Shopping Malls segment), Quality Invest S.A. (Offices segment) and Cyrsa S.A. and Puerto Retiro S.A. (Sales and Developments segment), evidenced a decrease of 209.6%, going from a profit of ARS 1,000 million during the year ended June 30, 2018 to a loss of ARS 1,096 million during the year ended June 30, 2019, mainly due to results from the joint venture Quality Invest S.A. due to lower results in the valuation of investment properties and Puerto Retiro S.A. due to a provision equivalent to 100% of the book value of the plot of land based on the evolution of the judicial actions that affect it.

Operations Center in Argentina

Shopping Malls. In the segment information the share of profit / (loss) of joint venture Nuevo Puerto Santa Fe S.A. is exposed line by line on a consolidated basis.

Offices. In the information by segments, the share of profit / (loss) of joint venture Quality S.A. is exposed line by line on a consolidated basis.

Sales and developments. The share of profit / (loss) of joint ventures Cyrsa S.A. and Puerto Retiro S.A. are exposed line by line on a consolidated basis. The share of profit / (loss) of our associate Manibil S.A., which is disclosed in this line, decreased by ARS 44 million, from a profit of ARS 4 million during the year ended June 30, 2018 to a loss of ARS 40 million during the year ended June 30, 2019.

Hotels. This segment does not present results from the share of profit / (loss) of associates and joint ventures.

International. The share of profit / (loss) of associates and joint ventures of this segment decreased by 16.9%, from a net loss of ARS 4,763 million during the year ended June 30, 2018 to a net loss of ARS 3,960 million during the year ended June 30, 2019, mainly generated by a negative result of our investment in New Lipstick LLC of ARS 4,007 million.

Others. The share of profit / (loss) of associates and joint ventures of the Others segment decreased by 1,298.1%, from a net profit of ARS 208 million during the year ended June 30, 2018 to a net loss of ARS 2,492 million during the year ended June 30, 2019, mainly as a result of a loss from of our investments in Banco Hipotecario S.A. for ARS 2,597 million.

Financial results, net

The financial results went from a loss of ARS 16,604 million during the year ended June 30, 2018 to a loss of ARS 3,102 million during the year ended June 30, 2019, this variation is mainly due to:

Positive variation of the net exchange difference that went from a loss of ARS 14,235 million during the year ended June 30, 2018 to a profit of ARS 1,080 million during the year ended June 30, 2019. This variation lies in the fact that in fiscal year 2019 inflation was higher than devaluation (47% vs, 56%, respectively).

Increase in net interest expense that went from a loss of ARS 4,315 million during the year 2018 to a loss of ARS 5,034 million during the year 2019.

Income tax

The Company applies the deferred tax method to calculate the income tax corresponding to the years presented, thus recognizing temporary differences as tax assets and liabilities. The income tax charge for the year went from a profit of ARS 11,455 million during the year ended June 30, 2018, to a profit of ARS 4,845 million during the year ended June 30, 2019, from the Operations Center in Argentina.

Loss for the year

As a result of the factors described above, the profit of the year, including the effect of discontinued operations, decreased by ARS 77,062, from a profit of ARS 35,755 million during the year ended June 30, 2018 to a loss of ARS 41,307 million during the year ended June 30, 2019, out of which a loss of ARS 39,547 million derives from the Operations Center in Argentina and a loss of ARS 1,760 million from the Operations Center in Israel.

Results of Operations for the Three Months ended September 30, 2020 compared to the Three Months ended September 30, 2019

	Operations Center in Argentina			Operations Center in Israel			Total Segment Information			Joint Ventures			Expenses and Collective Promotion Fund			Inter-segment eliminations and non-reportable assets /<br>liabilities			Total income statement / statement of financial<br>position
	09.30.20	09.30.19	Var.	09.30.20	09.30.19	Var.	09.30.20	09.30.19	Var.	09.30.20	09.30.19	Var.	09.30.20	09.30.19	Var.	09.30.20	09.30.19	Var.	09.30.20	09.30.19	Var.
(in Million<br>ARS)
Revenues	1,218	3,609	(2,391)	—	—	—	1,218	3,609	(2,391)	(8)	(25)	17	405	910	(505)	(6)	(7)	1	1,609	4,487	(2,878)
Costs	(651)	(740)	89	—	—	—	(651)	(740)	89	14	11	3	(460)	(953)	493	—	—	—	(1,097)	(1,682)	585
Gross profit/(loss)	567	2,869	(2,302)	—	—	—	567	2,869	(2,302)	6	(14)	20	(55)	(43)	(12)	(6)	(7)	1	512	2,805	(2,293)
Net<br>gain/(loss) from fair value adjustment of investment<br>properties	24,926	12,897	12,029	—	—	—	24,926	12,897	12,029	(837)	(548)	(289)	—	—	—	—	—	—	24,089	12,349	11,740
General and<br>administrative expenses	(649)	(651)	2	(5)	(28)	23	(654)	(679)	25	1	8	(7)	—	—	—	9	10	(1)	(644)	(661)	17
Selling<br>expenses	(451)	(300)	(151)	—	—	—	(451)	(300)	(151)	1	5	(4)	—	—	—	—	—	—	(450)	(295)	(155)
Other<br>operating results, net	(25)	(65)	40	—	—	—	(25)	(65)	40	1	—	1	9	12	(3)	(3)	(3)	—	(18)	(56)	38
Profit/(loss) from operations	24,368	14,750	9,618	(5)	(28)	23	24,363	14,722	9,641	(828)	(549)	(279)	(46)	(31)	(15)	—	—	—	23,489	14,142	9,347
Share of<br>profit/(loss) of associates and joint ventures	(472)	324	(796)	—	—	—	(472)	324	(796)	619	413	206	—	—	—	—	—	—	147	737	(590)
Segment profit/(loss)	23,896	15,074	8,822	(5)	(28)	23	23,891	15,046	8,845	(209)	(136)	(73)	(46)	(31)	(15)	—	—	—	23,636	14,879	8,757
Reportable<br>assets	185,020	132,844	52,176	1,399	542,703	(541,304)	186,419	675,547	(489,128)	(954)	(771)	(183)	—	—	—	14,950	33,893	(18,943)	200,415	708,669	(508,254)
Reportable<br>liabilities	—	—	—	(2,355)	(480,535)	478,180	(2,355)	(480,535)	478,180	—	—	—	—	—	—	(104,321)	(114,060)	9,739	(106,676)	(594,595)	487,919
Net reportable assets	185,020	132,844	52,176	(956)	62,168	(63,124)	184,064	195,012	(10,948)	(954)	(771)	(183)	—	—	—	(89,371)	(80,167)	(9,204)	93,739	114,074	(20,335)

Operations Center in Argentina

Below is a summary analysis of the operating segments by products and services of the Operations Center in Argentina for the periods ended September 30, 2020 and 2019

	Shopping Malls			Offices			Sales and Developments			Hotels			International			Corporate			Others			Total
	09.30.20	09.30.19	Var.	09.30.20	09.30.19	Var.	09.30.20	09.30.19	Var.	09.30.20	09.30.19	Var.	09.30.20	09.30.19	Var.	09.30.20	09.30.19	Var.	09.30.20	09.30.19	Var.	09.30.20	09.30.19	Var.
(in<br>Million ARS)
Revenues	367	2,085	(1,718)	541	697	(156)	39	83	(44)	6	701	(695)	263	3	260	—	—	—	2	40	(38)	1,218	3,609	(2,391)
Costs	(134)	(180)	46	(45)	(37)	(8)	(97)	(56)	(41)	(129)	(429)	300	(221)	(4)	(217)	—	—	—	(25)	(34)	9	(651)	(740)	89
Gross profit/(loss)	233	1,905	(1,672)	496	660	(164)	(58)	27	(85)	(123)	272	(395)	42	(1)	43	—	—	—	(23)	6	(29)	567	2,869	(2,302)
Net<br>gain/(loss) from fair value adjustment of investment<br>properties	1,178	601	577	13,112	6,845	6,267	10,096	5,153	4,943	—	—	—	2	—	2	—	—	—	538	298	240	24,926	12,897	12,029
General<br>and administrative expenses	(328)	(257)	(71)	(87)	(56)	(31)	(66)	(66)	—	(57)	(107)	50	(17)	(41)	24	(74)	(88)	14	(20)	(36)	16	(649)	(651)	2
Selling<br>expenses	(73)	(140)	67	(37)	(29)	(8)	(305)	(53)	(252)	(19)	(77)	58	(16)	—	(16)	—	—	—	(1)	(1)	—	(451)	(300)	(151)
Other<br>operating results, net	(24)	(27)	3	(1)	(7)	6	(6)	(16)	10	8	(4)	12	—	(1)	1	—	—	—	(2)	(10)	8	(25)	(65)	40
Profit/(loss) from operation s	986	2,082	(1,096)	13,483	7,413	6,070	9,661	5,045	4,616	(191)	84	(275)	11	(43)	54	(74)	(88)	14	492	257	235	24,368	14,750	9,618
Share<br>of profit/(loss) of associates and joint ventures	—	—	—	—	—	—	(8)	1	(9)	—	—	—	(386)	(228)	(158)	—	—	—	(78)	551	(629)	(472)	324	(796)
Segment profit/(loss)	986	2,082	(1,096)	13,483	7,413	6,070	9,653	5,046	4,607	(191)	84	(275)	(375)	(271)	(104)	(74)	(88)	14	414	808	(394)	23,896	15,074	8,822
Reportable<br>assets	54,406	55,279	(873)	72,262	40,970	31,292	45,273	36,352	8,921	1,954	2,155	(201)	1,884	(9,269)	11,153	—	—	—	9,241	7,357	1,884	185,020	132,844	52,176
Reportable<br>liabilities	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Net reportable assets	54,406	55,279	(873)	72,262	40,970	31,292	45,273	36,352	8,921	1,954	2,155	(201)	1,884	(9,269)	11,153	—	—	—	9,241	7,357	1,884	185,020	132,844	52,176

Operations Center in Israel

Below is a summary analysis of the operating segments by products and services of the Operations Center in Israel for the periods ended September 30, 2020 and 2019

	Real Estate			Supermarkets			Telecommunications			Insurance			Corporate			Others			Total
	09.30.20	09.30.19	Var.	09.30.20	09.30.19	Var.	09.30.20	09.30.19	Var.	09.30.20	09.30.19	Var.	09.30.20	09.30.19	Var.	09.30.20	09.30.19	Var.	09.30.20	09.30.19	Var.
(in Million<br>Pesos)
Revenues	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Costs	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Gross profit/(loss)	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Net<br>gain/(loss) from fair value adjustment of investment<br>properties	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
General and<br>administrative expenses	—	—	—	—	—	—	—	—	—	—	—	—	(5)	(28)	23	—	—	—	(5)	(28)	23
Selling<br>expenses	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Other<br>operating results, net	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Profit/(loss) from operations	—	—	—	—	—	—	—	—	—	—	—	—	(5)	(28)	23	—	—	—	(5)	(28)	23
Share of<br>profit/(loss) of associates and joint ventures	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Segment profit/(loss)	—	—	—	—	—	—	—	—	—	—	—	—	(5)	(28)	23	—	—	—	(5)	(28)	23
Reportable<br>assets	—	204,587	(204,587)	—	34,536	(34,536)	—	159,317	(159,317)	—	20,065	(20,065)	1,399	74,195	(72,796)	—	50,003	(50,003)	1,399	542,703	(541,304)
Reportable<br>liabilities	—	(165,817)	165,817	—	—	—	—	(127,182)	127,182	—	—	—	(2,355)	(27,718)	25,363	—	(159,818)	159,818	(2,355)	(480,535)	478,180
Net reportable assets	—	38,770	(38,770)	—	34,536	(34,536)	—	32,135	(32,135)	—	20,065	(20,065)	(956)	46,477	(47,433)	—	(109,815)	109,815	(956)	62,168	(63,124)

Revenues September 2020 vs September 2019

Revenues from sales, leases, and services, according to the income statement, decreased by ARS 2,878 million, from ARS 4,487 million during the three-month period ended September 30, 2019, to ARS 1,609 million during the three-month period ended September 30, 2020 (from the Operations Center in Argentina). In index terms, revenues from sales, leases, and services decreased by 64.1%.

In turn, revenues from expenses and Collective Promotion Fund decreased by 55.5%, from ARS 910 million (out of which ARS 844 million are allocated to the Shopping Malls segment and ARS 66 million to the Offices segment in the Operations Center in Argentina) during the three-month period ended September 30, 2019, to ARS 405 million (out of which ARS 353 million are allocated to the Shopping Malls segment and ARS 52 million to the Offices segment) during the three-month period ended September 30, 2020.

Moreover, revenues from our joint ventures decreased by 68.0%, from ARS 25 million during the three-month period ended September 30, 2019 (out of which ARS 20 million are allocated to the Shopping Malls segment and ARS 5 million to the Offices segment of the Operations Center in Argentina), to ARS 8 million during the three-month period ended September 30, 2020 (out of which ARS 2 million are allocated to the Shopping Malls segment and ARS 6 million to the Offices segment of the Operations Center in Argentina).

Finally, revenues from inter-segment transactions decreased by ARS 1 million, from ARS 7 million during the three-month period ended September 30, 2019, to ARS 6 million during the three-month period ended September 30, 2020.

Therefore, according to information by segments, revenues decreased by ARS 2,391 million, from ARS 3,609 million during the three-month period ended September 30, 2019 to ARS 1,218 million during the three-month period ended September 30, 2020 (from the Operations Center in Argentina). Revenues, according to information by segments, decreased by 66.3%.

Operations Center in Argentina

Shopping Malls. Revenues from the Shopping Malls segment decreased by 82.4% from ARS 2,085 million during the three-month period ended September 30, 2019, to ARS 367 million during the three-month period ended September 30, 2020. Such fall is mainly attributable to: (i) an ARS 926 million decrease in revenues from permanent leases (total sales from our lessees decrease 79.4% from ARS 25,113 million in period 2019 to ARS 5,174 million in period 2020). Compared to the comparative quarter, there is an increase in real terms due to the reopening of some of the shopping malls that were operating as of September 30, 2020; (ii) a decrease in contingent leases income of ARS 437 million; (iii) an ARS 118 million decrease in income from parking; (iv) an ARS 114 million decrease in income from admission rights; and (v) an ARS 72 million decrease in averaging of scheduled rent escalation.

Offices. Revenues from the Offices segment increased by 22.4% from ARS 697 million during the three-month period ended September 30, 2019 to ARS 541 million during the three-month period ended September 30, 2020. This variation is mainly explained by a decrease of 22.6% in revenues from leases, from ARS 691 million during the three-month period ended September 30, 2019 to ARS 535 million during the three-month period ended September 30, 2020, mainly as a result less income from leases due to the sale of Bouchard Building and sale of floors in Boston Tower during this quarter.

Sales and Developments. Revenues from the Sales and Developments segment recorded a 53.0% decrease, from ARS 83 million during the three-month period ended September 30, 2019, to ARS 39 million during the three-month period ended September 30, 2020. This segment often varies significantly from period to period to the non-recurrence of different sales transactions carried out by the Group over time.

Hotels. Revenues from our Hotels segment decreased by 99.1% from ARS 701 million during the three-month period ended September 30, 2019 to ARS 6 million during the three-month period ended September 30, 2020, mainly due to a decrease in revenues as a result of the fall in the tourist industry during this period because of COVID 19.

International. Revenues from our International segment increased by ARS 260 million, from ARS 3 million during the three-month period ended September 30, 2019, to ARS 263 million during the three-month period ended September 30, 2020 due to the sale of Stowe House in USD 3.45 million, generating a profit of USD 0.3 million.

Corporate. Revenues associated with our Corporate segment showed no variations for the reported periods.

Others. Revenues from the Others segment decreased by 95.0% from ARS 40 million during the three-month period ended September 30, 2019 to ARS 2 million during the three-month period ended September 30, 2020, mainly due to the lack of incomes derived from LA RURAL S.A. – OFC S.R.L. – OGDEN S.A. – ENTRETENIMIENTO UNIVERSAL S.A. – Joint venture – (Convention Center and Exhibitions of the City of Buenos Aires Administrator), attributable to the COVID-19 pandemic.

Costs September 2020 vs September 2019

Total consolidated costs, according to the income statement, decreased by ARS 585 million, from ARS 1,682 million during the three-month period ended September 30, 2019 to ARS 1,097 million during the three-month period ended September 30, 2020 (from the Operations Center in Argentina). In index terms, costs decreased by 34.8%. Furthermore, consolidated total costs measured as a percentage of consolidated total revenues increased from 37.5% during the three-month period ended September 30, 2019 to 68.2% during the three-month period ended September 30, 2020.

In turn, costs related to expenses and Collective Promotion Fund decreased by 51.7% from ARS 953 million during the three-month period ended September 30, 2019 (out of which ARS 881 million are allocated to the Shopping Malls segment and ARS 72 million to the Offices segment of the Operations Center in Argentina) to ARS 460 million during the three-month period ended September 30, 2020 (out of which ARS 405 million are allocated to the Shopping Malls segment and ARS 55 million to the Offices segment of the Operations Center in Argentina) mainly due to lower costs originated by our Shopping Malls, which decreased by 54.0% from ARS 881 million during the three-month period ended September 30, 2019 to ARS 405 million during the three-month period ended September 30, 2020.

Likewise, costs from our joint ventures showed a 27.3% increase, from ARS 11 million during the three-month period ended September 30, 2019 (out of which ARS 1 million are allocated to the Shopping Malls segment; ARS 9 million to the Offices segment and ARS 1 million to the Sales and Developments segment of the Operations Center in Argentina) to ARS 14 million during the three-month period ended September 30, 2020 (out of which ARS 2 million are allocated to the Shopping Malls segment; ARS 10 million to the Offices segment and ARS 2 million to the Sales and Developments segment of the Operations Center in Argentina).

Finally, costs from inter-segment operations showed no variations for the reported periods.

Therefore, according to information by segments (taking into account the costs from our joint ventures and without considering the costs associated with expenses and collective promotion fund or the costs from inter-segment operations), costs evidenced a decrease of ARS 89 million, from ARS 740 million during the three-month period ended September 30, 2019 to ARS 651 million during the three-month period ended September 30, 2020 (from the Operations Center in Argentina). In index terms, costs decreased by 12.0%. Likewise, total costs, measured as a percentage of total revenues, according to information by segments, increased from 20.5% during the three-month period ended September 30, 2019 to 53.4% during the three-month period ended September 30, 2020.

Operations Center in Argentina

Shopping Malls. Costs associated with the Shopping Malls segment decreased by 25.6%, from ARS 180 million during the three-month period ended September 30, 2019 to ARS 134 million during the three-month period ended September 30, 2020, mainly due to: (i) a decrease in maintenance expenses of ARS 36 million; (ii) a decrease in leases and expenses of ARS 7 million; (iii) an ARS 4 million decrease in fees and compensation services; partially offset by: (iv) an increase in salaries, social security and other personnel administrative expenses of ARS 7 million. Costs associated with the Shopping Malls segment, measured as a percentage of the revenues from this segment, increased from 8.6% during the three-month period ended September 30, 2019 to 36.5% during the three-month period ended September 30, 2020.

Offices. Costs associated with the Offices segment increased by 21.6%, from ARS 37 million during the three-month period ended September 30, 2019 to ARS 45 million during the three-month period ended September 30, 2020, mainly due to (i) an increase of ARS 7 million in salaries, social security charges and other personnel administrative expenses; (ii) a decrease in amortization and depreciation of ARS 3 million; (iii) an increase in maintenance expenses of ARS 3 million; offset by: (iv) a decrease in leases and expenses of ARS 7 million. Costs associated with the Offices segment, measured as a percentage the revenues from this segment, increased from 5.3% during the three-month period ended September 30, 2019 to 8.3% during the three-month period ended September 30, 2020.

Sales and Developments. Costs associated with our Sales and Developments segment recorded a 73.2% increase from ARS 56 million during the three-month period ended September 30, 2019 to ARS 97 million during the three-month period ended September 30, 2020, mainly due to an increase in the cost of sale of goods and services generated by Catalinas in an amount of ARS 43 million. Costs in the Sales and Developments segment, measured as a percentage of revenues from this segment, increased from 67.5% during the three-month period ended September 30, 2019 to 248.7% during the three-month period ended September 30, 2020.

Hotels. Costs in the Hotels segment decreased by 69.9%, from ARS 429 million during the three-month period ended September 30, 2019 to ARS 129 million during the three-month period ended September 30, 2020, mainly as a result of (i) an ARS 136 million decrease in the costs of salaries, social security and other personnel expenses; (ii) an ARS 81 million decrease in maintenance, repair, and services; (iii) an ARS 41 million decrease in food, beverages and other hotel expenses; and (iv) an ARS 20 million decrease in fees and compensation services. Costs in the Hotels segment, measured as a percentage of revenues from this segment, increased from 61.2% during the three-month period ended September 30, 2019 to 2,150.0% during the three-month period ended September 30, 2020.

International. Costs in the International segment increased 5,425.0%, amounting to ARS 221 million during the three-month period ended September 30, 2020 and ARS 4 million during the three-month period ended September 30, 2019, mainly as a result of an increase in cost of selling properties of ARS 219 million due to the sale of Stowe House. Costs in the International segment, measured as a percentage of revenues from this segment, decreased from 133.3% during the three-month period ended September 30, 2019 to 84.0% during the three-month period ended September 30, 2020.

Corporate. Costs in the Corporate segment did not vary in the reported periods.

Others. Costs in the Others segment decreased by 26.5%, from ARS 34 million during the three-month period ended September 30, 2019 to ARS 25 million during the three-month period ended September 30, 2020, mainly as a result of: (i) a decrease of ARS 5 million in salaries, social security charges and other personnel administrative expenses; and (ii) an decrease in maintenance expenses of ARS 4 million.

Gross profit 2020 vs. 2019

The total consolidated gross profit, according to the income statement, decreased by ARS 2,293 million, from ARS 2,805 million during the three-month period ended September 30, 2019 to ARS 512 million during the three-month period ended September 30, 2020 (from the Operations Center in Argentina). In index terms, the gross profit decreased by 81.7%. The total consolidated gross profit, measured as a percentage of revenues, decreased from 62.5% during the three-month period ended September 30, 2019 to 31.8% during the three-month period ended September 30, 2020.

In turn, total gross profit (loss) on account of expenses and collective promotion fund increased by ARS 12 million, from ARS 43 million during the three-month period ended September 30, 2019 (out of which a loss of ARS 37 million derives from the Shopping Malls segment and a loss of ARS 6 million from the Offices segment), to ARS 55 million during the three-month period ended September 30, 2020 (out of which a loss of ARS 52 million derives from the Shopping Malls segment and other loss of ARS 3 million from the Offices segment).

Additionally, the gross profit (loss) from our joint ventures decreased by 142.9%, from ARS 14 million during the three-month period ended September 30, 2019 to ARS 6 million during the three-month period ended September 30, 2020.

Therefore, according to information by segments, gross profit decreased by ARS 2,302 million, from ARS 2,869 million during the three-month period ended September 30, 2019 to ARS 567 million during the three-month period ended September 30, 2020 (from the Operations Center in Argentina). In index terms, the gross profit decreased by 80.2%. In addition, gross profit, measured as a percentage of revenues, according to information by segments, decreased from 79.5% during the three-month period ended September 30, 2019 to 46.6% during the three-month period ended September 30, 2020.

Operations Center in Argentina

Shopping Malls. Gross profit from the Shopping Malls segment decreased by 87.8%, from ARS 1,905 million during the three-month period ended September 30, 2019 to ARS 233 million during the three-month period ended September 30, 2020, mainly as a result of a decrease in total sales of our lessees in real terms, thus resulting in lower percentage rentals under our lease agreements. Gross profit from the Shopping Malls segment as a percentage of the segment revenues, decreased from 91.4% during the three-month period ended September 30, 2019 to 63.5% during the three-month period ended September 30, 2020.

Offices. Gross profit from the Offices segment decreased by 24.8% from ARS 660 million during the three-month period ended September 30, 2019 to ARS 496 million during the three-month period ended September 30, 2020. Gross profit from the Offices segment, measured as percentage of revenues from this segment, decreased from 94.7% during the three-month period ended September 30, 2019 to 91.7% during the three-month period ended September 30, 2020.

Sales and developments. Gross profit from the Sales and Developments segment decreased by 314.8%, from a profit of ARS 27 million during the three-month period ended September 30, 2019 to an ARS 58 million loss during the three-month period ended September 30, 2020. Gross profit from the Sales and Developments segment, measured as a percentage of revenues from this segment, increased from 32.5% positive during the three-month period ended September 30, 2019 to 148.7% negative during the three-month period ended September 30, 2020.

Hotels. Gross profit from the Hotels segment decreased by 145.2% from a profit of ARS 272 million during the three-month period ended September 30, 2019 to an ARS 123 million loss during the three-month period ended September 30, 2020. Gross profit from the Hotels segment, measured as a percentage of revenues from this segment, increased from 38.8% positive during the three-month period ended September 30, 2019 to 2,050.0% negative during the three-month period ended September 30, 2020.

International. Gross profit from the International segment increased by 4,300.0%, as a gross loss of ARS 1 million was recorded during the three-month period ended September 30, 2019 and a ARS 42 million gross profit was recorded during the three-month period ended September 30, 2020. Gross profit from the International segment, measured as a percentage of revenues from this segment, decreased from 33.3% negative during the three-month period ended September 30, 2019 to 16.0% positive during the three-month period ended September 30, 2020.

Corporate. Gross profit from the Corporate segment did not show any variations during the reported periods.

Others. Gross profit from the Others segment decreased by 483.3% from a profit of ARS 6 million during the three-month period ended September 30, 2019 to an ARS 23 million loss during the three-month period ended September 30, 2020. Gross profit from the Others segment, measured as a percentage of revenues from this segment, increased from 15.0% positive during the three-month period ended September 30, 2019 to 1,150.0% negative during the three-month period ended September 30, 2020.

Net gain (loss) from fair value adjustment of investment properties September 2020 vs September 2019

Total consolidated net gain/(loss) from fair value adjustment of investment properties, according to the income statement, increased by ARS 11,740 million, from a net profit of ARS 12,349 million during the three-month period ended September 30, 2019 (mainly from the Operations Center in Argentina) to a net gain of ARS 24,089 million during the three-month period ended September 30, 2020 (from the Operations Center in Argentina).

Operations Center in Argentina

For the period ended September 30, 2020, the net gain/(loss) from fair value adjustment of investment properties was a gain of ARS 24,926 million (an ARS 1,178 million profit from our Shopping Malls segment; an ARS 13,112 million gain from our Offices segment; an ARS 10,096 million gain of our Sales and Developments segment; an ARS 2 million gain of our International segment; and an ARS 538 million gain of our Other segment).

The net impact of prices in Pesos of our properties mainly resulted from a change in macroeconomic conditions: (i) the Argentine gross domestic product growth rate estimated for 2020 remained in order to -11.5%; and (ii) from June 2020 to September 2020, the Argentine Peso depreciated by 8% with respect to the US Dollar (from ARS 70.26 per USD 1.00 to ARS 75.98 per USD 1.00) which mainly resulted in a decrease in projected cash flows in US Dollars from the Shopping Malls.

Since September 2019, the real estate market experienced certain operational changes due to the adoption of foreign exchange regulations. As a result, it is very likely that office buildings/lands reserved sales be settled in Pesos at an implied exchange rate higher than the official exchange rate, which can be observed in the transactions conducted by the Company before and after closing of these financial statements. Therefore, we have valued our offices and lands reserved in Pesos as of closing of these financial statements considering the aforementioned situation, thus resulting in a gain with respect to the previously recorded values.

General and administrative expenses September 2020 vs September 2019

Total general and administrative expenses, according to the income statement, recorded a decrease of ARS 17 million, from ARS 661 million during the three-month period ended September 30, 2019 (out of which ARS 28 million derive from the Operations Center in Israel and ARS 633 million from the Operations Center in Argentina) to ARS 644 million during the three-month period ended September 30, 2020 (out of which ARS 5 million derive from the Operations Center in Israel and ARS 639 million from the Operations Center in Argentina). Excluding the effect from the Operations Center in Israel, administrative expenses increased by 0.9%. Total administrative expenses, measured as a percentage of revenues, increased from 14.7% during the three-month period ended September 30, 2019 to 40.0% during the three-month period ended September 30, 2020. Excluding the effect from the Operations Center in Israel, total general and administrative expenses, measured as a percentage of revenues, increased from 14.1% during the three-month period ended September 30, 2019 to 39.7% during the three-month period ended September 30, 2020.

In turn, administrative expenses of our joint ventures decreased by ARS 7 million, from ARS 8 million during the three-month period ended September 30, 2019 to ARS 1 million during the three-month period ended September 30, 2020.

Finally, administrative expenses for inter-segment transactions decreased by ARS 1 million, from ARS 10 million during the three-month period ended September 30, 2019 to ARS 9 million during the three-month period ended September 30, 2020.

Therefore, according to information by segments, administrative expenses decreased by ARS 25 million, from ARS 679 million during the three-month period ended September 30, 2019 (out of which ARS 28 million derive from the Operations Center in Israel and ARS 651 million derive from the Operations Center in Argentina) to ARS 654 million during the three-month period ended September 30, 2020 (out of which ARS 5 million derive from the Operations Center in Israel and ARS 649 million from the Operations Center in Argentina). Excluding the administrative expenses from the Operations Center in Israel, expenses decreased by 0.3%. Administrative expenses, measured as a percentage of revenues, increased from 18.8% during the three-month period ended September 30, 2019 to 53.7% during the three-month period ended September 30, 2020. Without considering the effects from the Operations Center in Israel, total administrative expenses, measured as a percentage of total revenues, showed an increase, from 18.0% during the three-month period ended September 30, 2019 to 53.3% during the three-month period ended September 30, 2020.

Operations Center in Argentina

Shopping Malls. Administrative expenses of Shopping Malls increased by 27.6%, from ARS 257 million during the three-month period ended September 30, 2019 to ARS 328 million during the three-month period ended September 30, 2020, mainly due to: (i) an increase of ARS 110 million in fees payable to directors; (ii) an increase of ARS 3 million in amortization and depreciation; partially offset by: (iii) a decrease of ARS 36 million in salaries, social security charges and other personnel administrative expenses; and (iv) a decrease of ARS 3 million in banking expenses. Administrative expenses of Shopping Malls, measured as a percentage of revenues from such segment, increased from 12.3% during the three-month period ended September 30, 2019 to 89.4% during the three-month period ended September 30, 2020.

Offices. The general and administrative expenses of our Offices segment increased by 55.4%, from ARS 56 million during the three-month period ended September 30, 2019 to ARS 87 million during the three-month period ended September 30, 2020, mainly as a result of: (i) a decrease in fees payable to directors of ARS 34 million; partially offset by (ii) a decrease in salaries, social security and other personnel administrative expenses of ARS 5 million. General and administrative expenses, measured as a percentage of revenues from the same segment, increased from 8.0% during the three-month period ended September 30, 2019 to 16.1% during the three-month period ended September 30, 2020.

Sales and Developments. General and administrative expenses associated with our Sales and Developments segment showed no variations remaining stable at ARS 66 million in both periods. General and administrative expenses, measured as a percentage of revenues from the same segment, increased from 79.5% during the three-month period ended September 30, 2019 to 169.2% during the three-month period ended September 30, 2020.

Hotels. General and administrative expenses associated with our Hotels segment decreased by 46.7% from ARS 107 million during the three-month period ended September 30, 2019 to ARS 57 million during the three-month period ended September 30, 2020, mainly as a result of: (i) an ARS 26 million decrease in salaries, social security and other personnel administrative expenses; (ii) an ARS 10 million decrease in maintenance, security, cleaning, repairs and related expenses; (iii) an ARS 8 million decrease in fees and compensation for services; and (iv) an ARS 5 million decrease in taxes, rates and contributions. General and administrative expenses associated with the Hotels segment, measured as a percentage of revenues from this segment, increased from 15.3% during the three-month period ended September 30, 2019 to 950.0% during the three-month period ended September 30, 2020.

International. General and administrative expenses associated with our International decreased by 58.5%, from ARS 41 million during the three-month period ended September 30, 2019 to ARS 17 million during the three-month period ended September 30, 2020, mainly as a result of an ARS 25 million decrease in salaries, social security and other personnel administrative expense.

Corporate. General and administrative expenses associated with our Corporate segment decreased by 15.9%, from ARS 88 million during the three-month period ended September 30, 2019 to ARS 74 million during the three-month period ended September 30, 2020, mainly as a result of: (i) an ARS 10 million decrease in salaries, social security and other personnel administrative expenses; and (ii) an ARS 6 million decrease in business expenses, mobility and library.

Others. General and administrative expenses associated with our Others segment increased by 44.4%, from ARS 36 million during the three-month period ended September 30, 2019 to ARS 20 million during the three-month period ended September 30, 2020, mainly due to (i) a decrease of ARS 12 million in maintenance, repairs and services; and (ii) a decrease of ARS 5 million in fees and compensation for services.

Operations Center in Israel

Corporate. General and administrative expenses associated with the Corporate segment decreased from ARS 28 million during the three-month period ended September 30, 2019 to ARS 5 million during the three-month period ended September 30, 2020. Such variation was due to a decrease in fees and compensation for services.

Selling expenses September 2020 vs September 2019

Total consolidated selling expenses, according to the income statement, showed an increase of ARS 155 million, from ARS 295 million during the three-month period ended September 30, 2019 to ARS 450 million during the three-month period ended September 30, 2020 (from the Operations Center in Argentina). In index terms, selling expenses increased by 52.5%. Total consolidated selling expenses, measured as a percentage of revenues from sales, leases and services, increased from 6.6% during the three-month period ended September 30, 2019 to 28.0% during the three-month period ended September 30, 2020.

In turn, selling expenses of our joint ventures decreased by ARS 4 million, from ARS 5 million during the three-month period ended September 30, 2019 to ARS 1 million during the three-month period ended September 30, 2020.

Therefore, according to information by segments, selling expenses increased by ARS 151 million from ARS 300 million during the three-month period ended September 30, 2019 to ARS 451 million during the three-month period ended September 30, 2020 (from the Operations Center in Argentina). In index terms, selling expenses increased by 50.3%. Selling expenses, measured as a percentage of revenues, according to information by segments, increased from 8.3% during the three-month period ended September 30, 2019 to 37.0% during the three-month period ended September 30, 2020.

Operations Center in Argentina

Shopping Malls. Selling expenses of the Shopping Malls segment decreased by 47.9%, from ARS 140 million during the three-month period ended September 30, 2019 to ARS 73 million during the three-month period ended September 30, 2020, mainly as a result of: (i) a decrease in the charge of taxes, rates and contributions of ARS 53 million; ii) a decrease in the charge of publicity, advertising and other commercial expenses of ARS 7 million; and iii) a decrease in the charge of fees and compensation for services of ARS 4 million. Selling expenses, measured as a percentage of revenues from the Shopping Malls segment, increased from 6.7% during the three-month period ended September 30, 2019 to 19.9% during the three-month period ended September 30, 2020.

Offices. Selling expenses associated with our Offices segment increased by 27.6% from ARS 29 million during the three-month period ended September 30, 2019 to ARS 37 million during the three-month period ended September 30, 2020. Such variation was mainly generated as a result of: (i) an ARS 12 million increase in the charge of taxes, rates and contributions, partially offset by (ii) an ARS 3 million decrease in the charge of doubtful accounts. Selling expenses associated with our Offices segment, measured as a percentage of revenues from this segment, increased from 4.2% during the three-month period ended September 30, 2019 to 6.8% during the three-month period ended September 30, 2020.

Sales and Developments. Selling expenses associated with our Sales and Developments segment increased by 475.5% from ARS 53 million during the three-month period ended September 30, 2019 to ARS 305 million during the three-month period ended September 30, 2020. Such variation was mainly generated by: (i) an ARS 139 million increase in taxes, rates and contributions; and (ii) an ARS 115 million increase in fees and compensation for services. Selling expenses associated with our Sales and Developments segment, measured as a percentage of revenues from this segment, increased from 63.9% during the three-month period ended September 30, 2019 to 782.1% during the three-month period ended September 30, 2020.

Hotels. Selling expenses associated with our Hotels segment decreased by 75.3% from ARS 77 million during the three-month period ended September 30, 2019 to ARS 19 million during the three-month period ended September 30, 2020, mainly as a result of: (i) an ARS 26 million decrease in taxes, rates and contributions; (ii) an ARS 9 million decrease in fees and compensation for services; and (iii) an ARS 8 million decrease in publicity, advertising and other commercial expenses. Selling expenses associated with our Hotels segment, measured as a percentage of revenues from this segment, increased from 11.0% during the three-month period ended September 30, 2019 to 316.7% during the three-month period ended September 30, 2020.

International. Selling expenses associated with the International segment increased by 100,0%, no charge was recorded during the three-month period ended September 30, 2019 and ARS 16 million was recorded during the three-month period ended September 30, 2020, due to fees and compensation for services.

Corporate. Selling expenses associated with the Corporate segment were not recorded in both periods.

Others. Selling expenses associated with our Others segment showed no variations during the reported periods. Selling expenses associated with our Others segment, measured as a percentage of revenues from this segment, increased from 2.5% during the three-month period ended September 30, 2019 to 50.0% during the three-month period ended September 30, 2020.

Other operating results, net September 2020 vs September 2019

Other operating results, net, according to the income statement, recorded a variation of ARS 38 million, from a net loss of ARS 56 million during the three-month period ended September 30, 2019, to a net loss of ARS 18 million during the three-month period ended September 30, 2020 (from the Operations Center in Argentina).

Other operating results, net, from our joint ventures increased by ARS 1 million, no charge was recorded during the three-month period ended September 30, 2019 and a net profit of ARS 1 million was recorded during the three-month period ended September 30, 2020 (from the Sales and Developments segment).

In turn, other operating results on account of building administration expenses and collective promotion fund decreased by ARS 3 million, from ARS 12 million during the three-month period ended September 30, 2019 (out of which a profit of ARS 11 million are allocated to the Shopping Malls segment and a profit of ARS 1 million to the Offices segment) to ARS 9 million during the three-month period ended September 30, 2020 (out of which ARS 8 million are allocated to the Shopping Malls segment and ARS 1 million to the Offices segment).

Therefore, according to information by segments, the other operating results line, net, increased by ARS 40 million, from a net loss of ARS 65 million during the three-month period ended September 30, 2019 to a net loss of ARS 25 million during the three-month period ended September 30, 2020.

Operations Center in Argentina

Shopping Malls. Other operating results, net associated with our Shopping Malls segment decreased by 11.1%, from a net loss of ARS 27 million during the three-month period ended September 30, 2019 to a net loss of ARS 24 million during the three-month period ended September 30, 2020, mainly as a result of: (i) a lower charge of donations of ARS 3 million; (ii) a lower charge of contingencies of ARS 3 million; partially offset by: (iii) a decrease in interest generated by credits and others. Other operating results, net, from this segment, as a percentage of revenues from this segment, increased from 1.3% negative during the three-month period ended September 30, 2019 to 6.5% negative during the three-month period ended September 30, 2020.

Offices. Other operating results, net associated with our Offices segment decreased by 85.7%, from a net loss of ARS 7 million during the three-month period ended September 30, 2019 to a net loss of ARS 1 million during the three-month period ended September 30, 2020, mainly as a consequence of an ARS 6 million decrease in donations, among other items. Other operating results, net from this segment, as a percentage of the revenues from this segment, decreased from 1.0% negative during the three-month period ended September 30, 2019 to 0.2% negative during the three-month period ended September 30, 2020.

Sales and Developments. Other operating results, net associated with our Sales and Developments segment decreased by 62.5%, from a net loss of ARS 16 million during the three-month period ended September 30, 2019 to a net loss of ARS 6 million during the three-month period ended September 30, 2020, mainly as a result of: (i) an ARS 6 decrease in the charge of tax on personal assets; and (ii) an ARS 5 million decrease in donations, among other items. Other operating results, net from this segment, as a percentage of the revenues of this segment, decreased from 19.3% negative during the three-month period ended September 30, 2019 to 15.4% negative during the three-month period ended September 30, 2020.

Hotels. Other operating results, net associated with the Hotels segment increased by 300.0%, from a net loss of ARS 4 million during the three-month period ended September 30, 2019 to a net profit of ARS 8 million during the three-month period ended September 30, 2020, mainly due to an ARS 14 million income by sell of property, plant and equipment. Other operating results, net from this segment, as a percentage of the revenues from this segment, increased from 0.6% negative during the three-month period ended September 30, 2019 to 113.3% positive during the three-month period ended September 30, 2020.

International. Other operating results, net associated with the International segment showed a net loss of ARS 1 million during the three-month period ended September 30, 2019. No charge was recognized during the three-month period ended September 30, 2020, mainly due to a decrease in donations.

Corporate. Other operating results, net associated with the Corporate segment showed no variations between the reported periods.

Others. Other operating results, net associated with the Others segment decreased by 80.0%, from a net loss of ARS 10 million during the three-month period ended September 30, 2019 to a net loss of ARS 2 million during the three-month period ended September 30, 2020, mainly due to a loss in the comparative period related to the sale of Tarshop S.A. Other operating results, net from this segment, as a percentage of the revenues from this segment, increased from 25.0% negative during the three-month period ended September 30, 2019 to 100.0% negative during the three-month period ended September 30, 2020.

Profit / (loss) from operations September 2020 vs September 2019

Total consolidated profit/ (loss) from operations, according to the income statement, increased from a net profit of ARS 14,142 million during the three-month period ended September 30, 2019 to a net profit of ARS 23,489 million during the three-month period ended September 30, 2020 (out of which a net loss of ARS 5 million derives from the Operations Center in Israel and a net profit of ARS 23,494 from the Operations Center in Argentina). Excluding the effect from the Operations Center in Israel, the profit/(loss) from operations varied by 65.8%. Total consolidated profit/(loss) from operations, measured as a percentage of revenues from sales, leases and services, increased from 315.2% positive during the three-month period ended September 30, 2019 to 1,459.9% positive during the three-month period ended September 30, 2020. Excluding the effect from the Operations Center in Israel, total consolidated profit/(loss) from operations, measured as a percentage of total revenues, increased from 315.8% positive during the three-month period ended September 30, 2019 to 1,460.2% positive during the three-month period ended September 30, 2020.

Profit/(loss) from operations from our joint ventures increased from a loss of ARS 549 million during the three-month period ended September 30, 2019 (out of which a net loss of ARS 24 million is allocated to the Shopping Malls segment; a net loss of ARS 530 million to the Offices segment and a profit of ARS 5 million to the Sales and Developments segment, of the Operations Center in Argentina) to a net loss of ARS 828 million during the three-month period ended September 30, 2020 (out of which a profit of ARS 1 million is allocated to the Shopping Malls segment, a net loss of ARS 832 million to the Offices segment, and a profit of ARS 3 million to the Sales and Developments segment, of the Operations Center in Argentina).

Therefore, according to information by segments, the net profit from operations increased from a net profit of ARS 14,722 million during the three-month period ended September 30, 2019 to a net profit of ARS 24,363 million during the three-month period ended September 30, 2020 (out of which a net loss of ARS 5 million derives from the Operations Center in Israel and a net profit of ARS 24,368 million derives from the Operations Center in Argentina). The profit/(loss) from operations, measured as a percentage of revenues, according to information by segments, increased from a 407.9% profit during the three-month period ended September 30, 2019 to a 2,000.2% profit during the three-month period ended September 30, 2020. Excluding the effect from the Operations Center in Israel, total profit/(loss) from operations, according to information by segments, measured as a percentage of total revenues, increased from a 408.7% profit during the three-month period ended September 30, 2019 to a 2,000.7% profit during the three-month period ended September 30, 2020.

Operations Center in Argentina

Shopping Malls. Profit/(loss) from operations associated with the Shopping Malls segment decreased from a profit of ARS 2,082 million during the three-month period ended September 30, 2019 to a profit of ARS 986 million during the three-month period ended September 30, 2020.

Offices. Profit / (loss) from operations associated with our Offices segment increased by 81.9%, from a net profit of ARS 7,413 million during the three-month period ended September 30, 2019 to a net profit of ARS 13,483 million during the three-month period ended September 30, 2020. Such variation was mainly due to an ARS 6,267 million increase in the gain / (loss) from fair value adjustments of investment properties. Profit / (loss) from operations associated with the Offices segment, as a percentage of revenues from such segment, increased from 1,063.6% during the three-month period ended September 30, 2019 to 2,492.2% during the three-month period ended September 30, 2020.

Sales and Developments. Profit / (loss) from operations associated with our Sales and Developments segment increased by 91.5%, from a net profit of ARS 5,045 million during the three-month period ended September 30, 2019 to a net profit of ARS 9,661 million during the three-month period ended September 30, 2020. Such increase is mainly due to the gain / (loss) from fair value adjustments of investment properties. Profit / (loss) from operations associated with the Sales and Developments segment, as a percentage of revenues from this segment, increased from 6,078.3% during the three-month period ended September 30, 2019 to 24,771.8% during the three-month period ended September 30, 2020.

Hotels. Profit / (loss) from operations associated with the Hotels segment decreased by 327.4%, from a net profit of ARS 84 million during the three-month period ended September 30, 2019 to a net loss of ARS 191 million during the three-month period ended September 30, 2020. Such decrease is mainly due to the fact that revenues were significantly affected by a decline in the activity in the present period, attributable to the COVID-19 pandemic. The profit / (loss) from operations associated with the Hotels segment, as a percentage of revenues from such segment, increased from 12.0% during the three-month period ended September 30, 2019 to 3,183.3% during the three-month period ended September 30, 2020.

International. Profit/(loss) from operations associated with our International segment varied by 125.6% from a net loss of ARS 43 million during the three-month period ended September 30, 2019 to a net profit of ARS 11 million during the three-month period ended September 30, 2020. Such variation is due to the income generated by the sale of Stowe House.

Corporate. Profit/(loss) from operations associated with our Corporate segment decreased by 15.9% from a loss of ARS 88 million during the three-month period ended September 30, 2019 to a loss of ARS 74 million during the three-month period ended September 30, 2020, mainly affected by general and administrative expenses.

Others. Profit/(loss) from operations associated with the Others segment increased from a net profit of ARS 257 million during the three-month period ended September 30, 2019 to a net profit of ARS 492 million during the three-month period ended September 30, 2020. The variation is mainly due to the gain / (loss) from fair value adjustments of investment properties.

Operations Center in Israel

Corporate. Profit/ (loss) from operations associated with the Corporate segment went from a net loss of ARS 28 million during the three-month period ended September 30, 2019 to a net loss of ARS 5 million during the three-month period ended September 30, 2020. Mainly due to a decrease in fees and compensation for services.

Share of profit / (loss) of associates and joint ventures September 2020 vs September 2019

The share of profit / (loss) of associates and joint ventures, according to the income statement, decreased by 80.1%, from a net profit of ARS 737 million during the three-month period ended September 30, 2019 to a net profit of ARS 147 million during the three-month period ended September 30, 2020 (from the Operations Center in Argentina), mainly due to the negative results from the Others segment.

Also, the net share of profit / (loss) of joint ventures, mainly from Nuevo Puerto Santa Fe S.A. (Shopping Malls segment), Quality Invest S.A. (Offices segment) and Cyrsa S.A. and Puerto Retiro S.A. (Sales and Developments segment), showed a 49.9% increase, from a profit of ARS 413 million during the three-month period ended September 30, 2019 to a profit of ARS 619 million during the three-month period ended September 30, 2020, mainly due to results from the share in Quality Invest S.A., mainly attributable to the gain / (loss) from fair value adjustments of investment properties.

Operations Center in Argentina

Shopping Malls. In the information by segments, the share of profit / (loss) of the joint venture Nuevo Puerto Santa Fe S.A. is recorded on a consolidated basis, line by line in this segment.

Offices. In the information by segments, the share of profit / (loss) of the joint venture Quality S.A. is recorded on a consolidated basis, line by line in this segment.

Sales and Developments. The share of profit / (loss) of the joint ventures Cyrsa S.A. and Puerto Retiro S.A is recorded on a consolidated basis, line by line. The share of profit / (loss) of our associate Manibil S.A., which is recorded in this line, increased by ARS 9 million during the three-month period ended September 30, 2020.

Hotels. This segment does not show results from the share of profit / (loss) of associates and joint ventures.

International. The share of profit / (loss) of associates of this segment increased by 69.3%, from a net loss of ARS 228 million during the three-month period ended September 30, 2019 to a net loss of ARS 386 million during the three-month period ended September 30, 2020, mainly generated by a negative result from our investment in New Lipstick LLC of ARS 334 million offset by a negative result from our investment in Condor Hospitality of ARS 53 million.

Other. The share of profit / (loss) of associates from the Others segment decreased by 114.2%, from a net profit of ARS 551 million during the three-month period ended September 30, 2019 to a net loss of ARS 78 million during the three-month period ended September 30, 2020, mainly as a result of a loss from our investments in Banco Hipotecario S.A. in the amount of ARS 57 million.

Financial results, net

The financial results went from a loss of ARS 11,244 million during the three-month period ended September 30, 2019 to a loss of ARS 942 million during the three-month period ended September 30, 2020. Mainly due to lower results in terms of the exchange rate variation.

Income Tax

The Company applies the deferred tax method to calculate the income tax for the reported periods, thus recognizing temporary differences as tax assets and liabilities. The income tax charge went from a loss of ARS 2,505 million during the three-month period ended September 30, 2019, to a loss of ARS 7,958 million during the three-month period ended September 30, 2020, from the Operations Center in Argentina.

Profit for the period

As a result of the factors described above, the profit for the period went from a loss of ARS 15,017 million (that includes a profit of ARS 13,887 for the effect of discontinued operations) during the three-month period ended September 30, 2019 to a profit of ARS 8,340 million (that includes a loss of ARS 6,396 for the effect of discontinued operations) during the three-month period ended September 30, 2020.

B. Liquidity and Capital Resources

●

Our principal sources of liquidity have historically been:

●

Cash generated by operations;

●

Cash generated by issuance of debt securities;

●

Cash from borrowing and financing arrangements; and

Cash proceeds from the sale of real estate assets.

Our principal cash requirements or uses (other than in connection with our operating activities) have historically been:

●

capital expenditures for acquisition or construction of investment properties and property, plant and equipment;

●

interest payments and repayments of debt;

●

acquisition of equity interests in companies;

●

payments of dividends; and

●

acquisition of real estate.

Our liquidity and capital resources include our cash and cash equivalents, proceeds from bank borrowings and long-term debt, capital financing and sales of real estate investments.

As of June 30, 2020, our Operation Center in Argentina had negative working capital of ARS 26,224 million while our Operations Center in Israel had positive working capital of ARS 93,328 million, resulting in a consolidated positive working capital of ARS 67,104 million (calculated as current assets less current liabilities as of such date).

At the same date, our Operations Center in Argentina had cash and cash equivalents of ARS 7,780 million while our Operations Center in Israel had cash and cash equivalents of ARS 89,496 million, totaling consolidated cash and cash equivalents for ARS 97,276 million.

As described in “Presentation of Financial and Certain Other Information”, we lost control of IDBD and DIC on September 25, 2020. Accordingly, assets and liabilities corresponding to the Operations Center in Israel have been deconsolidated as from that date.

The commitments and other restrictions resulting from the indebtedness of IDBD and DIC have no effect on IRSA since said indebtedness has no recourse against IRSA, nor has IRSA guaranteed it with its assets. Therefore, IRSA's financial risk with respect to the Israeli business center is limited to the values indicated in the preceding paragraph.

On September 13, 2020, IDBD filed a claim against Dolphin Netherlands B.V. and against IRSA in which it sought to require them, together and separately, to pay it a total of NIS 70 million plus linkage differences and interest in accordance with the law. In addition, in tandem with the submission of the lawsuit, IDBD submitted an urgent petition for placing temporary attachments (in the presence of one party) on Dolphin Netherlands B.V and IRSA, which was not accepted by the Court in the presence of one party and which has been passed on for the respondents to respond to the petition.

The table below shows our cash flow for the fiscal years ended June 30, 2020, 2019 and 2018:

	Year<br>ended June 30,
	2020	2019	2018
	(in<br>millions of ARS)
Net cash flow<br>generated from operating activities	33,495	29,111	21,983
Net cash flow<br>generated from / (used in) investing activities	43,755	12,045	(32,870)
Net cash flow<br>generated from financing activities	(81,952)	(29,878)	(6,634)
Net (decrease) /<br>increase in cash and cash equivalents	(4,702)	11,278	(17,521)

Cash Flow Information

Operating activities

Fiscal year ended June 30, 2020

Our operating activities for the fiscal year ended June 30, 2020 generated net cash inflows of ARS 33,495 million, of which ARS 26,778 are originated in discontinued operations and ARS 6,717 from continuing operations, mainly due to operating income of ARS 7,778 million, a increase in trading properties of ARS 424 million and a decrease in trade and other receivables of ARS 2,045 million, partially offset by a decrease in provisions of ARS 572 million, a decrease in trade and other payables of ARS 328 million and ARS 326 million related to Income Tax paid.

Fiscal year ended June 30, 2019

Our operating activities for the fiscal year ended June 30, 2019 generated net cash inflows of ARS 29,111 million, of which ARS 23,158 million were originated from discontinued operations and ARS 5,953 million from continuing operations, mainly due to a net operating income of ARS 8,806 million, a increase in trading properties of ARS 937 million and a increase in trade and other receivables of ARS 49 million, partially offset by a decrease in provisions of ARS 85 million, a decrease in trade and other payables of ARS 1,305 million and ARS 362 million related to Income Tax paid.

Fiscal year ended June 30, 2018

Our operating activities for the fiscal year ended June 30, 2018 generated net cash inflows of ARS 21,983 million, of which ARS 28,904 million were originated from discontinued operations and ARS (6,921) million from continuing operations, mainly due to a net operating loss of ARS 6,005 million, a increase in trading properties of ARS 357 million, an increase in trade and other payables of ARS 1,354 million, partially offset by a decrease in provisions of ARS 64 million and ARS 1,591 million related to Income Tax paid.

Investment activities

Fiscal year ended June 30, 2020

Our investing activities resulted in net cash outflows of ARS 43,755 million, comprised of ARS 43,840 million discontinued activities inflows and ARS (85) million continuing operations inflows for the fiscal year ended June 30, 2020, mainly due to (i) ARS 21,624 million arising from disposal of investments in financial assets, (ii) ARS 194 million from sales of investment properties, (iii) ARS 225 million from increase in restricted assets, net and (iv) ARS 272 million used in the acquisition and improvements of property, plant and equipment and (v) ARS 3,960 million used in the acquisitions and improvements of investment properties.

Fiscal year ended June 30, 2019

Our investing activities resulted in net cash inflows of ARS 12,045 million, comprised of ARS 13,456 million discontinued activities outflows and ARS (1,411) million continuing operations inflows for the fiscal year ended June 30, 2019. Such net inflows are primarily related to (i) ARS 35,610 million arising from disposal of investments in financial assets and (ii) ARS 6 million from sales of interest held in associates and joint ventures; partially offset by (iii) ARS 33,101 million used in the acquisition of investments in financial assets, (iv) ARS 4,605 million used in the acquisition and improvements of investment properties and (v) ARS 162 million used in the acquisitions and improvements of property, plant and equipment.

Fiscal year ended June 30, 2018

Our investing activities resulted in net cash outflows of ARS 32,870 million, comprised of ARS 21,244 million discontinued activities outflows and ARS 11,626 million continuing operations outflows for the fiscal year ended June 30, 2018. Such net outflows are mainly related to (i) ARS 3,878 million and ARS 706 million used in the acquisition and improvements of investment properties and property, plant and equipment, respectively, (ii) ARS 164 million used in the acquisition of intangible assets, (iii) ARS 35,314 million related to the increase of investments in financial assets, (iv) ARS 19 million from the net decrease of restricted assets; partially offset by (v) ARS 27,945 million arising from disposal of investments in financial assets, and (vi) ARS 146 million collected from loans granted.

Financing activities

Fiscal year ended June 30, 2020

Our financing activities for the fiscal year ended June 30, 2020 resulted in net cash outflows of ARS 81,952 million, of which ARS 75,785 derive from discontinued operations and ARS 6,167 derive from continuing activities, mainly due to (i) the payment of loans and principal on notes of ARS 29,099 million; (ii) the payment of interest on short-term and long-term debt of ARS 5,811 million, and (iii) ARS 2,188 million from the repurchase of non-convertible notes, partially offset by (iv) an increase in borrowings and issuance of non-convertible notes for ARS 23,777 million.

Fiscal year ended June 30, 2019

Our financing activities for the fiscal year ended June 30, 2019 resulted in net cash outflows of ARS 29,878 million, comprised of ARS 23,439 million discontinued activities inflows and ARS 6,439 million continuing operations outflows for the fiscal year ended June 30, 2019. Such net outflows are mainly related to (i) the payment of loans and principal from notes of ARS 4,311 million; (ii) the payment of interest on short-term and long-term debt of ARS 5,724 million; (iii) ARS 1,654 million from the repurchase of non-convertible notes, and (iv) ARS 1,057 million from the acquisition of non-controlling interest in subsidiaries, in part offset by (v) an increase in borrowings and issuance of non-convertible notes for ARS 6,670 million.

Fiscal year ended June 30, 2018

Our financing activities for the fiscal year ended June 30, 2018 resulted in net cash outflows of ARS 6,634 million, corresponding to ARS 7,367 million continuing activities outflows partially offset by ARS 14,001 million discontinued operations inflows. Such net outflows are mainly related to: (i) the payment of loans and principal on notes of ARS 1,732 million; (ii) the payment of interest on short-term and long-term debt of ARS 3,922 million, (iii) ARS 1,106 million related to dividends paid, and (iv) ARS 2,669 million from the acquisition of non-controlling interest in subsidiaries, in part offset by (v) the increase in borrowings and issuance of non-convertible notes for ARS 11,310 million, and (vi) the net proceeds from disposal of non-controlling interest in subsidiaries of ARS 7,249 million.

The following table shows our cash flow for the three-month periods ended September 30, 2020 and 2019:

	Period<br>ended September 30,
	2020	2019
	(in<br>million of ARS)
Net cash flow<br>generated from operating activities	3,362	10,467
Net cash flow<br>generated from / (used in) investing activities	41,441	3,490
Net cash flow<br>generated from financing activities	(27,144)	(35,239)
Net (decrease) /<br>increase in cash and cash equivalents	17,659	(21,282)

As of September 30, 2020, in our Operations Center in Argentina, we had a negative working capital of ARS 16,865 million (calculated as current assets less current liabilities as of that date).

As of the same date, our Operations Center in Argentina had cash and cash equivalents for ARS 4,397 million, which represents the total of cash and cash equivalents at a consolidated level.

Cash Flow Information

Operating activities

Three-month period ended September 30, 2020

Our operating activities for the three-month period ended September 30, 2020 generated net cash inflows of ARS 3,362. million, of which ARS 2,227 are originated in discontinued operations and ARS 1,135 from continuing operations, mainly due to (i) an increase in trade and other payables of ARS 1,885 million; (ii) a decrease in restricted assets of ARS 1,157 million; and (iii) a decrease in trading properties of ARS 256 million; partially offset by (iv) an operating loss of ARS 1,437 million; (v) an increase in trade and other receivables of ARS 643 million; and (vi) a decrease in salaries and social security contributions of ARS 73 million.

Three-month period ended September 30, 2019

Our operating activities for the three-month period ended September 30, 2019 generated net cash inflows of ARS 10,467 million, of which ARS 7,738 million are originated in discontinued operations and ARS 2,729 million in continuing operations, mainly due to: (i) an operating result of ARS 3,407 million; (ii) a decrease in trade and other receivables of ARS 392 million; partially offset by (iii) a decrease in provisions of ARS 186 million; (iv) a decrease in trade and other payables for ARS 476 million; (v) a decrease in salaries and social security contributions of ARS 160 million; and (vi) ARS 197 million related to income tax paid.

Investment activities

Three-month period ended September 30, 2020

Our investment activities generated a net cash inflow of ARS 41,441 million, corresponding to an inflow from discontinued operations of ARS 31,830 million and an inflow of ARS 9,611 million of from continued operations for the three-month period ended on September 30, 2020, mainly due to (i) ARS 9,604 inflow from the sale of investment properties; and (ii) ARS 6,809 million inflow dorm the sale of financial assets; partially offset by (iii) ARS 6,181 million used in the acquisition of investments in financial assets; and (iv) ARS 719 used in the acquisition and improvements of investment properties.

Three-month period ended September 30, 2019

Our investing activities generated a net cash flow inflow of ARS 3,490 million, corresponding to an inflow of funds from discontinued activities of ARS 1,500 million and an inflow of funds from continued operations of ARS 1,990 million for the three-month period ended on September 30, 2019, mainly due to: (i) ARS 14,811 million from the sale of investments in financial assets; partially offset by (ii) ARS 11,245 million used in the acquisition of investments in financial assets; (iii) ARS 824 million used in the acquisition and improvements of investment properties; and (iv) ARS 639 million used to grant loans.

Financing activities

Three-month period ended September 30, 2020

Our financing activities for the three-month period ended September 30, 2020 resulted in a net cash outflow of ARS 27,144 million, out of which ARS 13,019 million correspond to discontinued operations, and ARS 14,125 million correspond to continued operations , mainly due to (i) the cancellation of loans and capital of negotiable obligations of ARS 20,009 million; (ii) the payment of interest on short and long-term debt of ARS 2,624 million; and (iii) ARS 225 million due to the payment of derivative financial instruments; partially offset by (iv) ARS 4,861 million for obtaining short-term loans; (v) borrowing and issuance of negotiable obligations for ARS 3,466 million; and (vi) ARS 525 million from the sale of our own negotiable obligations in the portfolio.

Three-month period ended September 30, 2019

Our financing activities for the three-month period ended September 30, 2019 resulted in an outflow of ARS 35,239 million, out of which ARS 31,325 million correspond to discontinued operations and ARS 3,914 million to continued operations, mainly due to (i) the cancellation of loans and capital of debentures of ARS 17,730 million; (ii) the payment of interest on short and long-term loans of ARS 2,203 million; and (iii) ARS 1,972 million due to the repurchase of debentures; partially offset by (iv) borrowing and issuance of debentures for ARS 16,293 million; and (v) ARS 1,686 million for obtaining short-term loans.

Capital expenditures

Fiscal year ended June 30, 2020

During the fiscal year ended June 30, 2020, we invested ARS 11,897 million, as follows: (a) acquisitions and improvements of property, plant and equipment of ARS 6,107 million, primarily i) ARS 357 million in buildings and facilities, ii) ARS 3,679 million in communication networks, iii) ARS 1,903 million in machinery and equipment and others, iv) improvements in our hotels Sheraton Libertador, Llao Llao and Intercontinental (ARS 15 million, ARS 66 million and ARS 48 million, respectively) and v) ARS 39 million in agricultural establishments; (b) improvements in our rental properties for ARS 2,907 million, out of which ARS 2,052 million derive from our Operations Center in Argentina and ARS 855 million derive from the Operations Center in Israel; (c) the development of properties for ARS 2,883 million.

Fiscal year ended June 30, 2019

During the fiscal year ended June 30, 2019, we invested ARS 20,192 million, as follows: (a) acquisitions and improvements of property, plant and equipment of ARS 7,692 million, primarily i) ARS 118 million in buildings and facilities, ii) ARS 4,951 million in communication networks, iii) ARS 2,553 million in machinery and equipment and others iv) improvements in our hotels Sheraton Libertador, Llao Llao and Intercontinental (ARS 31 million, ARS 16 million and ARS 23 million, respectively); (b) improvements in our rental properties of ARS 2,104 million, primarily in our Operations Center in Israel; (c) the development of properties for ARS 9,759 million, mainly in our Operations Center in Israel; and (d) ARS 637 million related to the acquisition of land reserves.

Fiscal year ended June 30, 2018

During the fiscal year ended June 30, 2018, we invested ARS 20,523 million (including ARS 5,091 million from Shufersal, whose assets were deconsolidated due to the loss of control and ARS 804 million from business combination), as follows: (a) acquisitions and improvements of property, plant and equipment of ARS 11,369 million, primarily i) ARS 2,934 million in buildings and facilities, mainly in supermarkets in Israel through Shufersal, ii) ARS 2,691 million in communication networks, iii) ARS 5,181 million in machinery and equipment and others, iv) improvements in our hotels Sheraton Libertador, Llao Llao and Intercontinental (ARS 11 million, ARS 20 million and ARS 12 million, respectively), and v) ARS 520 million related with business combinations (mainly from the acquisition of New Pharm); (b) improvements in our rental properties of ARS 2,064 million, primarily in our Operations Center in Israel; (c) the development of properties for ARS 3,756 million, mainly in our Operations Center in Israel; (d) ARS 3,050 million related to the acquisition of land reserves, and (e) ARS 284 million related to business combination.

Period ended on September 30, 2020

During the period ended September 30, 2020, we made investments for ARS 1,202 million as follows: (a) acquisition and improvements of property, plant and equipment for ARS 1,056 million , mainly related to: i) ARS 40 million in buildings and facilities, ii) ARS 416 million in communication networks, iii) ARS 536 million in machinery, equipment and others, iv) improvements in Llao Llao and Intercontinental hotels (ARS 22 million and ARS 2 million, respectively), and v) ARS 40 million in agricultural establishments; (b) improvements in our rental properties for ARS 146 million, out of which ARS 106 million correspond to our Argentina Operations Center and ARS 40 million to the Israel Operations Center.

Period ended on September 30, 2019

During the period ended September 30, 2019, we made investments for ARS 3,459 million as follows: (a) acquisition and improvements of property, plant and equipment for ARS 1,732 million , mainly related to: i) ARS 107 million in buildings and facilities, ii) ARS 1,021 million in communication networks, iii) ARS 593 million in machinery, equipment and others, and iv) improvements in our hotels Sheraton Libertador, Llao Llao and Intercontinental (ARS 1 million, ARS 6 million and ARS 4 million, respectively); (b) improvements in our rental properties for ARS 478 million, out of which ARS 249 million correspond to our Argentina Operations Center and ARS 229 million to the Israel Operations Center; (c) properties under development for ARS 1,249 million.

Indebtedness

The breakdown of the Company’s borrowings as of September 30, 2020 was as follows:

	Total as of September 30, 2020
	(million<br>of ARS)
Non-convertible<br>Notes	44,538
Bank<br>loans	3,629
Bank<br>overdrafts	7,110
Other<br>borrowings (i)	1,161
Total borrowings	56,438
Non-current	31,967
Current	24,471
	56,438
Operations Center	Currency	Annual Average Interest Rate	Nominal value	Book value (in million of ARS)
---	---	---	---	---
IRSA<br>Commercial Properties’ 2023 Notes	USD	8.75%	360	27,359
IRSA’s 2020 Notes – Series<br>I(1)	USD	10.00%	181	9,885
IRSA’s<br>2021 Notes – Series III	ARS	Badlar<br>+ 600 bps	353	366
IRSA’s<br>2021 Notes – Series IV	USD	7.00%	51	3,852
IRSA’s<br>2022 Notes – Series V	USD	9.00%	9	529
IRSA’s<br>2021 Notes – Series VI	ARS	Badlar<br>+ 400 bps	335	354
IRSA’s<br>2022 Notes – Series VII	USD	4.00%	33	2.193
Related<br>Party	ARS	Badlar	1	29
Related<br>Party	USD	From<br>5.97% to 14.0%	65	406
Bank<br>loans	USD	5.95%	18	1,336
Bank<br>loans	USD	Libor +<br>1.9%	30	2,106
AABE<br>Debt	ARS	Libor	120	192
Seller<br>financing	USD	N/A	2	178
Others	USD	Libor<br>1m+2% / 3.5%	7	543
Bank<br>overdrafts	ARS	from<br>39.00% to 109.00%	-	7,110
Total(5)				56,438

(1) On October 22, 2020, we announced Notes to be issued by exchange for the Existing Notes, Series I Notes, or through the Cash Subscription, for more information see “Recent Developments – Exchange Offer- Issuance of Series VIII and IX Notes.”

(2) The credit line between IRSA CP and IRSA for an amount of USD 104.5 million is not shown due because it is eliminated in consolidation.

Series II Notes (Issued by IRSA)

IRSA’s Notes Class II at 11.50% maturing in 2020 for a total amount of USD 71.4 million were fully repaid on July 20, 2020.

Series II Notes (Issued by IRSA CP)

On March 23, 2016, IRSA CP issued Notes in an aggregate principal amount of USD360 million under its Global Notes Program. Series II Notes accrue interest semi-annually, at an annual fixed rate of 8.75% and mature on March 23, 2023.

IRSA CP’s Notes due 2023 are subject to certain covenants, events of default and limitations, such as the limitation on incurrence of additional indebtedness, limitation on restricted payments, limitation on transactions with affiliates, and limitation on merger, consolidation and sale of all or substantially all assets.

To incur additional indebtedness, IRSA CP is required to meet a minimum 2.00 to 1.00 Consolidated Interest Coverage Ratio. The Consolidated Interest Coverage Ratio is defined as Consolidated EBITDA divided by consolidated net interest expense. Consolidated EBITDA is defined as operating income plus depreciation and amortization and other consolidated non-cash charges.

The Series II Notes contain financial covenants limiting IRSA CP’s ability to declare or pay dividends in cash or in kind, unless the following conditions are met at the time of payment:

a) no Event of Default shall have occurred and be continuing;

b) IRSA CP may incur at least USD1.00 worth of additional debt pursuant to the “Restriction on Additional Indebtedness”;

c) and the aggregate amount of such dividend exceeds the sum of:

i. 100% of cumulative EBITDA for the period (treated as one accounting period) from July 1, 2015 through the last day of the last fiscal quarter ended prior to the date of such Restricted Payment minus an amount equal to 150% of consolidated interest expense for such period; and

ii. any reductions of Indebtedness of IRSA on a consolidated basis after the Issue Date any reductions of Indebtedness of after the Issue Date exchanged for to Capital Stock of the IRSA or its Subsidiaries.

For more informarion see. “Item 10. Additional Information—D. Exchange Controls”, if Communication “A” 7,106 is extended after March 31, 2021, the maturity of this Note would be affected by such measure.

Series I and II Notes

On May 15, 2019, IRSA issued the Note Series I under Argentine law for an amount of USD 96.3 million due on November 15, 2020, at a fixed rate of 10%. The proceeds were mainly used to repay preexisting debt.

On August 6, 2019, IRSA reopened the Note Series I under Argentine law for an amount of USD 85.2 million, at a price of 103.77%, which resulted in an internal annual rate of return of 8.75% nominal. Also, on the same date, the Notes Series II denominated in Chilean pesos, under writable and payable in dollars, for an amount of CLP 31,502.6 million (equivalent to USD 45 million) at a fixed rate of 10.5% per within 12 months.

On August 6, 2020, Class II denominated in Chilean pesos was fully repaid.

On September 15, 2020, Communication “A” 7,106 established that companies must refinance maturities of financial debt capital in the period from October 15, 2020 to March 31, 2021. In this sense, the Central Bank will give access to companies for up to 40% of maturities and companies must refinance the rest within at least two years. For more information see. “Item 10. Additional Information—D. Exchange Controls”, if Communication “A” 7,106 is extended after March 31, 2021, the capital outstanding maturity of this Note would be affected by such measure.

As a consequence of the new restrictions on access to the Foreign Exchange Market, on October 22, 2020, IRSA launched an exchange offer on its Series I Notes due on November 15, 2020.

The exchange offer consisted on two options for the bondholders: i) a cash consideration of USD 0.69622593 for each USD 1 of existing notes presented to the Exchange and the remaining amount until completing USD 1 for each USD 1 of existing notes presented to the Exchange, in notes Series VIII, and ii) a par for par exchange of notes Series IX for each Existing Notes presented to the Exchange.

The Exchange Offer expired on November 10, 2020 and the Nominal Value of Existing Notes presented and accepted for the Exchange (for both Series) was USD 178,458,188, which represents 98.31% acceptance. Considering that consent has been obtained for an amount greater than 90% of the capital of the existing notes, the Company made the Non-Essential Proposed Modifications and / or the Essential Proposed Modifications, by means of which the terms and conditions of the existing notes will be modified and replaced.

In relation to the Exchange Offer ended on November 10, 2020, on November 12, 2020, IRSA made a partial repayment of Series I Notes for a Nominal Value of USD 178,458,188, after the partial repayment the Nominal Value under circulation was USD 3,060,519.

For more information see: “Recent Developments - Exchange Offer- Issuance of Series VIII and IX Notes.”For more information see: “Recent Developments - Exchange Offer- Issuance of Series VIII and IX Notes.”

Series III, IV and V (issued by IRSA)

On May 21, 2020, we issued in the local market a total amount of USD 65.8 million through the following Notes:

●

Series III: denominated and payable in pesos for ARS 354 million (equivalent at the time of issuance to USD 5.2 million) at a variable rate (private BADLAR + 6.0%) with quarterly payments. The principal will be paid in two installments: the first for an amount equivalent to 30% of the nominal value payable 6 (six) months from the Issue and Settlement Date, and the second for an amount equivalent to 70% of the nominal value payable on the due date, February 21, 2021. Price of issuance was 100.0% of the nominal value.

●

Series IV: denominated in USD and payable in ARS at the applicable exchange rate for USD 51.4 million at a fixed rate of 7.0%, with quarterly payments and principal expiring on May 21, 2021. Price of issuance was 102.0% of the nominal value (IRR 5.03%).

●

Series V: denominated in USD and payable in ARS at the applicable exchange rate for USD 9.2 million at a fixed rate of 9.0%, with quarterly payments and principal expiring on May 21, 2022. Price of issuance was 103.0% of the nominal value (IRR 7.56%).

Series VI and VII (issued by IRSA)

On July 21, 2020, we issued in the local market a total amount of USD 38.4 million through the following Notes:

●

Series VI: denominated and payable in pesos for ARS 335.2 million (equivalent at the time of issuance to USD 4.7 million) at a variable rate (private BADLAR + 4.0%) with quarterly payments. The principal will be paid in two installments: the first for an amount equivalent to 30% of the nominal value payable 9 (nine) months from the Issue and Settlement Date, and the second for an amount equivalent to 70% of the nominal value payable on the due date, July 21, 2021. Price of issuance was 100.0% of the nominal value.

●

Series VII: denominated in dollars and payable in pesos at the applicable exchange rate for USD 33.7 million at a fixed rate of 4.0%, with quarterly payments and principal expiring on January 21, 2022. Price of issuance was 100.0% of the nominal value.

The funds have been used to refinance short-term liabilities.

Communication “A” 7,106

C. Research and Development, Patents and Licenses, Etc.

We have several trademarks registered with the Instituto Nacional de la Propiedad Industrial, the Argentine institute for industrial property. We do not own any patents nor benefit from licenses from third parties.

D. Trend Information

International Macroeconomic Outlook

As reported in the IMF’s “World Economic Outlook,” world GDP is expected to be reduced (4.9)% in 2020 and recover 5.4% in 2021. As with the April 2020 WEO projections, there is a higher-than-usual degree of uncertainty around this forecast. The baseline projection rests on key assumptions about the fallout from the pandemic. In economies with declining infection rates, the slower recovery path in the updated forecast reflects persistent social distancing into the second half of 2020; greater scarring (damage to supply potential) from the larger-than-anticipated hit to activity during the lockdown in the first and second quarters of 2020; and a hit to productivity as surviving businesses ramp up necessary workplace safety and hygiene practices. For economies struggling to control infection rates, a lengthier lockdown will inflict an additional toll on activity. Moreover, the forecast assumes that financial conditions—which have eased following the release of the April 2020 WEO — will remain broadly at current levels. Alternative outcomes to those in the baseline are clearly possible, and not just because of how the pandemic is evolving.

All countries including those that have seemingly passed peaks in infections—should ensure that their health care systems are adequately resourced. The international community must vastly step up its support of national initiatives, including through financial assistance to countries with limited health care capacity and channeling of funding for vaccine production as trials advance, so that adequate, affordable doses are quickly available to all countries. Where lockdowns are required, economic policy should continue to cushion household income losses with sizable, well-targeted measures as well as provide support to firms suffering the consequences of mandated restrictions on activity. Where economies are reopening, targeted support should be gradually unwound as the recovery gets underway, and policies should provide stimulus to lift demand and ease and incentivize the reallocation of resources away from sectors likely to emerge persistently smaller after the pandemic.

Strong multilateral cooperation remains essential on multiple fronts. Liquidity assistance is urgently needed for countries confronting health crises and external funding shortfalls, including through debt relief and financing through the global financial safety net. Beyond the pandemic, policymakers must cooperate to resolve trade and technology tensions that endanger an eventual recovery from the COVID-19 crisis. Furthermore, building on the record drop in greenhouse gas emissions during the pandemic, policymakers should both implement their climate change mitigation commitments and work together to scale up equitably designed carbon taxation or equivalent schemes. The global community must act now to avoid a repeat of this catastrophe by building global stockpiles of essential supplies and protective equipment, funding research and supporting public health systems, and putting in place effective modalities for delivering relief to the neediest.

Argentine macroeconomic context

At the end of 2019, the economy faced a severe balance of payments crisis and public debt. Faced with this scenario, the National Government adopted a set of measures designed to face the most immediate manifestations of the crisis and to stabilize the economy. Regarding monetary policy, the Central Bank of Argentina defined a series of guidelines, highlighting the referring to interest rates and exchange rate management. Foreign exchange regulations and the moderation in prices linked to the limited volatility of the exchange rate allowed a marked reduction of the LELIQ rate from 68% to 38% nominal annually. The progress made the financial system better prepared to face the emergency caused by COVID-19.

Shopping malls sales reached a total ARS 3,758.5 million in September 2020, which represents a 71.4% decrease as compared to fiscal 2019.

The INDEC reported that, for the ten months ended October 31, 2020, industrial activity in Argentina contracted by 9.9% compared to the same period in 2019. The textile industry accumulated a 32.2% contraction during the first ten months of 2020 as compared to the same period last year. Moreover, the monthly estimation of economic activity (“EMAE”) as of September 30, 2020, contracted by 6.9% compared to the same month in 2019.

Regarding the balance of payments, in the second quarter of 2020 the current account surplus reached USD 2,824 million, with USD 4,971 million allocated to the goods and services trade balance, and USD 2,484 million to the net primary deficit, and a surplus of USD 337 million to net secondary income.

During the second quarter of 2020, the financial account showed net outflow of USD 2,514 million, explained by the net acquisition of financial assets for USD 893 million, and net cancellation of liabilities of USD 1,621 million. The sectors that have explained these outflows have been Other sectors for USD 2,433 million and the Government for USD 1,324 million, partially offsetting by the net income of the Central Bank for USD 1,293 million. The international reserves decreased by USD 793 million during the second quarter of 2020.

As of December 18, 2020, the Private Badlar rate in Pesos peaked at 34.31%. As of December 22, 2020, the seller exchange rate quoted by Banco de la Nación Argentina was of ARS 83.25 pesos per USD1.00. As of December 18, 2020, Argentina’s country risk reduced by 466 basis points in year-on-year terms. The debt premium paid by Argentina was at 1,363 basis points as of December 22, 2020, compared to 263 basis points paid by Brazil and 205 basis points paid by Mexico as of that same date.

Likewise, in the national and international framework described above, the Company periodically analyzes alternatives to appreciate its shares value. In that sense, the Board of Directors of the Company will continue in the evaluation of financial, economic and / or corporate tools that allow the Company to improve its position in the market in which it operates and have the necessary liquidity to meet its obligations. Within the framework of this analysis, the indicated tools may be linked to corporate reorganization processes (merger, spin-off or a combination of both), disposal of assets in public and / or private form that may include real estate as well as negotiable securities owned by the Company, incorporation of shareholders through capital increases through the public offering of shares to attract new capital, repurchase of shares and instruments similar to those described that are useful to the proposed objectives.

Evolution of Shopping Malls in Argentina

In September 2020, the Consumer Confidence Index (CCI) showed a 2.4% decline compared to August 2020, and a 4.2% decrease compared to September 2019. Shopping mall sales decrease 82.2% in the fiscal 2020 compared to fiscal 2019.

Evolution of Office Properties in Argentina

Evolution of the Hotel industry in Argentina

Where the interest payable is not fixed, the amount disclosed has been determined by reference to the existing conditions at the reporting date.

G. Safe Harbor

See the discussion at the beginning of this Item 5 and “Forward Looking Statements” in the introduction of this Form 6-K for the forward looking safe harbor provisions.

DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

Directors

The table below shows information about our regular directors and alternate directors as from October 26, 2020:

Name	Date of Birth	Position in IRSA	Date appointed	Term expiration	Current position held since
Eduardo<br>S. Elsztain	01/26/1960	Chairman	2018	2021	1991
Saúl Zang	12/30/1945	First Vice-Chairman	2018	2021	1994
Alejandro<br>G. Elsztain	03/31/1966	Second Vice-Chairman	2019	2022	2001
Fernando<br>A. Elsztain	01/04/1961	Regular Director	2020	2023	1999
Cedric<br>D. Bridger	11/09/1935	Regular Director	2018	2021	2003
Marcos<br>Fischman	04/09/1960	Regular Director	2018	2021	2003
Mauricio<br>E. Wior	10/23/1956	Regular Director	2018	2021	2006
Daniel<br>Ricardo Elsztain	12/22/1972	Regular Director	2020	2023	2007
Oscar<br>Pedro Bergotto	19/07/1946	Regular Director	2019	2022	2019
Demian<br>Brener	20/06/1990	Regular Director	2019	2022	2019
Maria<br>Julia Bearzi	11/15/1975	Regular Director	2019	2022	2019
Liliana<br>L. De Nadai	01/11/1975	Regular Director	2019	2022	2019
Gastón<br>Armando Lernoud	06/04/1968	Alternate Director	2020	2023	2014
Enrique<br>Antonini	03/16/1950	Alternate Director	2019	2022	2007
Gabriel<br>A. G. Reznik	11/18/1958	Alternate Director	2019	2022	2008
David<br>Williams	12/07/1955	Alternate Director	2019	2022	2008
Ben<br>Iosef Elsztain	01/16/1997	Alternate Director	2020	2023	2020
Iair<br>Elsztain	03/05/1995	Alternate Director	2020	2023	2020

Oscar Pedro Bergotto, Demian Brener, David Williams, María Julia Bearzi and Liliana De Nadai are independent directors, pursuant to CNV Rules.

Employees

Operations Center in Argentina

As of September 30, 2020, we had 1,373 employees. Our employees of the segments non relating to our Shopping Mall and Offices had 10 employees. Our Shopping Malls segment had 667 employees, including 304 under collective labor agreements. Our Hotels segment had 696 employees, with 555 represented by the Tourism, Hotel and Gastronomic Workers Union (Unión de Trabajadores del Turismo, Hoteleros y Gastronómicos de la República Argentina, UTHGRA).

	As<br>of September 30,	Year<br>ended on June 30,
	2020	2020	2019	2018
Development and<br>Sale of Properties and Other Non-Shopping Mall<br>Businesses(1)	10	11	12	31
Shopping Malls and<br>Offices(2)	667	784	865	928
Hotels(1)	696	701	832	812
Total	1,373	1,496	1,709	1,771

(1) As of March 2019, we were no longer administrators of Consorcio Libertador S.A. and Consorcio Maipu 1300 S.A.

(2) On December 2018, the concession of the Buenos Aires Design shopping mall ended.

(3) Includes Hotel Intercontinental, Sheraton Libertador and Llao Llao.

Share Ownership

The following table sets forth the amount and percentage of our common shares beneficially owned by our directors, senior managers, and members of the supervisory committee as of September 30, 2020.

		Share<br>ownership
Name	Position	Number<br>of Shares	Percentage
Directors
Eduardo S. Elsztain<br>(1)	Chairman	365,058,886	63.1%
Saúl<br>Zang	Vice-Chairman<br>I	22	0.0%
Alejandro G.<br>Elsztain	Vice- Chairman<br>II	2,279,357	0.4%
Fernando A.<br>Elsztain	Regular<br>Director	—	—
Cedric D.<br>Bridger	Regular<br>Director	—	—
Marcos M.<br>Fischman	Regular<br>Director	—	—
Mauricio E.<br>Wior	Regular<br>Director	—	—
Daniel R.<br>Elsztain	Regular<br>Director	99,890	0.0%
María Julia<br>Bearzi	Regular<br>Director	—	—
Oscar Pedro<br>Bergotto	Regular<br>Director	—	—
Liliana De<br>Nadai	Regular<br>Director	—	—
Damian<br>Brener	Regular<br>Director	—	—
Gaston A.<br>Lernoud	Alternate<br>Director	4,782	0.0%
Enrique<br>Antonini	Alternate<br>Director	—	—
Gabriel A. G.<br>Reznik	Alternate<br>Director	—	—
David<br>Williams	Alternate<br>Director	—	—
Ben<br>Elsztain	Alternate<br>Director	—	—
Iair<br>Elsztain	Alternate<br>Director	900	0.0%
Senior<br>Management
Matías I.<br>Gaivironsky	Chief Financial and<br>Administrative Officer	43,150	0.0%
Jorge<br>Cruces	Chief investment<br>Officer	18,930	0.0%
Supervisory<br>Committee
José D.<br>Abelovich	Member	—	—
Marcelo H.<br>Fuxman	Member	—	—
Noemí I.<br>Cohn	Member	—	—
Roberto D.<br>Murmis	Alternate<br>member	—	—
Paula<br>Sotelo	Alternate<br>member	—	—
Ariela<br>Levy	Alternate<br>member	—	—

(1) Includes (i) 356,913,421 common shares beneficially owned by Cresud and ii) 2,188,790 common shares owned by Helmir and (iii) 5,956,675 common shares owned by Consultores Venture Capital Uruguay S.A.

Option Ownership

No options to purchase common shares have been granted to our Directors, Senior Managers, members of the Supervisory Committee, or Audit Committee.

Employee Participation in our share Capital

There are no arrangements for involving our employees in our capital stock or related to the issuance of options, common shares or securities, other than those described under the following sections: (i) Item 6 – B. Compensation – Capitalization Plan and (ii) Item 6 – B. Compensation – Mid and Long Term Incentive Program.

MAJOR SHAREHOLDERS

Major Shareholders

Information about Major Shareholders

Share Ownership

The following table sets forth information regarding ownership of our capital stock by each person known to us to own beneficially at least 5% of our common shares, ANSES and all our directors and officers as a group.

	Share<br>Ownership as of September 30, 2020
Shareholder	Number<br>of Shares	Percentage<br>(2)
Cresud (1)	359,102,211	62.1%
Directors and<br>officers (excluding Eduardo Elsztain)	2,447,031	0.4%
ANSES	25,914,834	4.5%
Total	387,464,076	67.0%

(1) Eduardo S. Elsztain is the beneficial owner of 177,186,493 common shares of Cresud, representing 35.32% of its total share capital, which include (i) 73,897,991 common shares beneficially owned by IFISA, (ii) 940 common shares owned by Consultores Venture Capital Uruguay S.A. for which Mr. Eduardo S. Elsztain is deemed to be the beneficial owner, (iii) 103,087,210 common shares owned by Agroinvestment S.A. for which Mr. Eduardo S. Elsztain is deemed beneficial owner and (iv) 100,352 common shares directly owned by Mr. Eduardo S. Furthermore, IFISA retains voting power and right of first refusal over an equivalent of 8,669,890 common shares (1.73% of the outstanding) until 02/18/2021. Although Mr. Elsztain does not own a majority of the common shares of Cresud, he is its largest shareholder and exercises substantial influence over it. If Mr. Elsztain is considered to be the beneficial owner of Cresud due to his substantial influence over it, he would be the beneficial owner of 63.1% of our common shares by virtue of his investment in Cresud of 359,102,211 common shares and in Consultores Venture Capital Uruguay S.A. of 5,956,675 common shares. Cresud is a leading Argentine producer of basic agricultural products. Cresud’s common shares began trading in the BYMA on December 12, 1960, under the trading symbol “CRES” and on March 1997 its GDSs began trading in the Nasdaq under the trading symbol “CRESY.”

(2) As of September 30, 2020, the number of outstanding common shares was 578,676,460.

Changes in Share Ownership

Shareholder (3)	September<br>30, 2020 (%)	June<br>30, 2019 (%)	June<br>30, 2018 (%)	June<br>30, 2017 (%)	June<br>30, 2016 (%)
Cresud (1)	62.1	62.1	63.4	63.4	63.4
Directors and<br>officers (2)	0.4	0.5	0.2	0.2	0.2
ANSES	4.5	4.5	4.5	4.5	4.5
Total	67.0	67.1	68.1	68.1	68.1

(2) Includes only direct ownership of our directors and senior management.

(3) As of September 30, 2020, the number of outstanding common shares was 578,676,460.

Differences in Voting Rights

Our major shareholders do not have different voting rights.

Arrangements for change in control

We are not aware of any arrangements that may, when in force, result in a change in control.

Securities held in the host country

As of September 30, 2020, our total issued capital stock outstanding consisted of 578,676,460 common shares. As of September 30, 2020, there were approximately 20,192,273 Global Depositary Shares (representing 201,922,730 of our common shares, or 34.9% of all or our outstanding common shares) held in the United States by approximately 20 registered holders.

CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial and Administrative Officer, to allow our management to make timely decisions regarding required disclosure. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objective. In connection with the preparation of this Form 6-K, we carried out an evaluation under the supervision and with the participation of members of our management team, including our Chief Executive Officer and Chief Financial and Administrative Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of June 30, 2020, taking into account the recast of our audited consolidated financial statements as of such date to: (a) present the Audited Consolidated Financial Statements in the measuring unit current at the end of the reporting period as of September 30, 2020 (the most recent period for which financial statements are included in this Form 6-K); and (b) reflect IRSA’s loss of control in IDBD and DIC on September 25, 2020 and, consequently, the deconsolidation of such investees since that date. Based upon this evaluation our Chief Executive Officer and Chief Financial and Administrative Officer concluded that our disclosure controls and procedures as of the end of the period covered by this Form 6-K were effective at the reasonable assurance level.

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate Internal Control over Financial Reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). Our Internal Control over Financial Reporting includes a series of procedures designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Consolidated Financial Statements for external purposes, in accordance with International Financial Reporting Standards and includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets, (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of Consolidated Financial Statements in accordance with International Financial Reporting Standards and that a company’s receipts and expenditures are being made only in accordance with authorizations of our management and directors, and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our Consolidated Financial Statements.

Because of its inherent limitations, Internal Control over Financial Reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies and procedures may deteriorate.

Management assessed the effectiveness of our Internal Control over Financial Reporting as of June 30, 2020, taking into account the recast of our audited consolidated financial statements as of such date to: (a) present the Audited Consolidated Financial Statements in the measuring unit current at the end of the reporting period as of September 30, 2020 (the most recent period for which financial statements are included in this Form 6-K); and (b) reflect IRSA’s loss of control in IDBD and DIC on September 25, 2020 and, consequently, the deconsolidation of such investees since that date. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control–Integrated Framework (2013). Based on this evaluation, management concluded that our Internal Control over Financial Reporting was effective as of June 30, 2020.

Attestation Report of the Registered Public Accounting Firm

The effectiveness of the Company’s internal control over financial reporting as of June 30, 2020, taking into account the recast of our audited consolidated financial statements as of such date to: (a) present the Audited Consolidated Financial Statements in the measuring unit current at the end of the reporting period as of September 30, 2020 (the most recent period for which financial statements are included in this Form 6-K); and (b) reflect IRSA’s loss of control in IDBD and DIC on September 25, 2020 and, consequently, the deconsolidation of such investees since that date, has been audited by Price Waterhouse & Co S.R.L, Buenos Aires Argentina- member firm of PricewaterhouseCoopers International Limited, an independent registered public accounting firm, as stated in their report which appears herein.

Changes in Internal Control Over Financial Reporting

During the fiscal year ended June 30, 2019, we implemented the Consolidation module of the BPC (Business Planning and Consolidation) application by SAP and accordingly we have updated our internal controls over financial reporting, as necessary, to accommodate modifications to our accounting and financial reporting processes and to take advantage of enhanced automated controls provided by this new system.

Other than as expressly noted above, there have been no changes in our internal control over financial reporting during the fiscal year ended June 30, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Audit Committee Financial Expert

Pursuant to the former applicable rules regarding the Capital Markets Law (formerly the Transparency Decree) and the applicable Rules of the CNV at such moment, our board of directors has established on May 2004 an Audit Committee. The main functions of the Audit Committee are to assist the board of directors in performing their duty of exercising due care, diligence and competence in issues relating to us, specifically in the enforcement of the accounting policy and in the issue of accounting and financial information, the management of business risk and of internal control systems, the conduct and ethical soundness of the company’s business, the supervision of the integrity of our financial statements, the compliance by our company with the legal provisions, the independence and capability of the independent auditor and the performance of the internal audit function of our company and of the external auditors. Also, according to the applicable regulations, we may request to our audit committee to render its opinion in certain transactions, and its conditions, as is the case of related party transactions, as may be reasonably considered adequate according to normal market conditions.

Since October 31, 2019, the members of the Audit Committee are Oscar Pedro Bergotto, Demian Brener and Maria Julia Bearzi, all of them as independent members. Maria Julia Bearzi is the financial expert in accordance with the relevant SEC rules. We have a fully independent audit committee as per the standard provided in Rule 10 (A)-3(B) (1).

Code of Ethics

We have adopted a code of ethics that applies to our directors, officers and employees. Our code of ethics is posted in our website www.irsa.com.ar. On July 25, 2005, our Code of Ethics was amended by our Board of Directors. The amendment was filed with the SEC as an exhibit to our annual report on Form 20-F for the fiscal year ended June 30, 2019.

If we make any substantive amendment to the code of ethics or grant any waivers, including any implicit waiver to any of its provision we will disclose the nature of such amendment or waiver in a report on Form 6-K or in our next annual report on Form 20-F and we will post it in our website.

Audit Committee Pre-Approval Policies and Procedures

Audit Committee pre-approves all services and fees provided by the external auditors to ensure auditors’ independence. One of the main tasks of the Audit Committee is to give it opinion in relation to the appointment of the external auditors, proposed by the Board of Directors to the general shareholders’ meeting. In order to accomplish such task, the Audit Committee shall:

●

Require any additional and complementary documentation related to this analysis.

●

Verify the independence of the external auditors;

●

Analyze different kinds of services that the external auditor would provide to the company. This description must also include an estimate of the fees payable for such services, specifically in order to maintain the principle of independence;

●

Inform the fees billed by the external auditor, separating the services related to the audit services and other special services that could be not included in the audit services previously mentioned.

●

Analyze and supervise the working plan of the external auditors considering the business’ reality and the estimated risks;

●

Propose adjustments (if necessary) to such working plan;

●

Hold meetings with the external auditors in order to: (a) analyze the difficulties, results and conclusions of the proposed working plan; (b) analyze eventual possible conflicts of interests, related party transactions, compliance with the legal framework and information transparency; and

●

Evaluate the performance of external auditors and their opinion regarding our Financial Statements.

INDEX OF EXHIBITS

Exhibit<br>No.	Description<br>of Exhibit
99.1	Audited<br>Consolidated Financial Statements as of June 30, 2020 and 2019 and<br>for the fiscal years ended June 30, 2020, 2019 and<br>2018.
99.2	Unaudited Condensed<br>Interim Consolidated Financial Statements as of September 30, 2020<br>and for the three-month period ended September 30, 2020 and<br>2019.
99.3	Summary<br>of investment properties by type as of June 30, 2020 (in accordance<br>with Regulation S-X 12-28 (1)).
99.4	List of<br>Subsidiaries.
---	---

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	IRSA<br>Inversiones y Representaciones Sociedad Anónima
Date January 5,<br>2021	By: /s/<br>Matías I. Gaivironsky
	Name: Matías<br>I. Gaivironsky<br><br><br>Title: Chief<br>Financial and Administrative<br>Officer

irsarecast

Index

Report of<br>Independent Registered Public Accounting Firm	F-1
Glossary	F-2
Consolidated<br>Statements of Financial Position	F-3
Consolidated<br>Statements of Income and Other Comprehensive<br>Income	F-4
Consolidated<br>Statements of Changes in Shareholders’<br>Equity	F-5
Consolidated<br>Statements of Cash Flows	F-8
Notes to<br>Consolidated Financial Statements
Note 1 – The<br>Group’s business and general information	F-9
Note 2 –<br>Summary of significant accounting policies	F-12
Note 3 –<br>Significant judgments, key assumptions and<br>estimates	F-31
Note 4 –<br>Acquisitions and dispositions	F-32
Note 5 –<br>Financial risk management and fair value<br>estimates	F-40
Note 6 –<br>Segment information	F-47
Note 7 –<br>Information about the main subsidiaries	F-52
Note 8 –<br>Investments in associates and joint ventures	F-53
Note 9 –<br>Investment properties	F-57
Note 10 –<br>Property, plant and equipment	F-60
Note 11 –<br>Trading properties	F-61
Note 12 –<br>Intangible assets	F-62
Note 13 –<br>Rights of use of assets	F-63
Note 14 –<br>Financial instruments by category	F-64
Note 15 –<br>Trade and other receivables	F-68
Note 16 –<br>Cash flow information	F-69
Note 17 –<br>Shareholders’ Equity	F-70
Note 18 –<br>Trade and other payables	F-71
Note 19 –<br>Provisions	F-72
Note 20 –<br>Borrowings	F-74
Note 21 –<br>Taxes	F-76
Note 22 –<br>Leases	F-79
Note 23 –<br>Revenues	F-80
Note 24 –<br>Expenses by nature	F-80
Note 25 –<br>Cost of goods sold and services provided	F-81
Note 26 –<br>Other operating results, net	F-81
Note 27 –<br>Financial results, net	F-81
Note 28 –<br>Earnings per share	F-82
Note 29 –<br>Employee benefits and share-based payments	F-82
Note 30 –<br>Related party transactions	F-84
Note 31 –<br>Foreign currency assets and liabilities	F-89
Note 32 –<br>Groups of assets and liabilities held for sale	F-90
Note 33 –<br>Results from discontinued operations	F-90
Note 34 –<br>Economic framework of the Group’s business	F-91
Note 35 –<br>Subsequent Events	F-94

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of

IRSA Inversiones y Representaciones Sociedad Anónima

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated statements of financial position of IRSA Inversiones y Representaciones Sociedad Anónima and its subsidiaries (the “Company”) as of June 30, 2020 and 2019, and the related consolidated statements of income and other comprehensive income, changes in shareholders’ equity and cash flows for each of the three years in the period ended June 30, 2020, including the related notes and the summary of investment properties by type as of June 30, 2020 listed in the accompanying index (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of June 30, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of June 30, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2020 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting appearing in the accompanying Form 6-K. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Emphasis of Matter

As discussed in Note 1, these consolidated financial statements have been recast to (i) restate all amounts into the current unit of measurement as of September 30, 2020, and (ii) reflect the loss of control of the Company’s subsidiary IDBD.

As discussed in Note 34 to the consolidated financial statements, there are significant uncertainties related to the impact of the current economic context and COVID-19. Management’s evaluation of the events and conditions and management’s plans to mitigate these matters are also described in Note 34.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ PRICE WATERHOUSE & Co. S.R.L

(Partner)

/s/ Walter Rafael Zablocky

Buenos Aires, Argentina

January 5, 2021

We have served as the Company’s auditor since 1992.

F-1

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 Consolidated Financial Statements.

Terms	Definitions
BACS	Banco de<br>Crédito y Securitización S.A.
BCRA	Central Bank of the<br>Argentine Republic
BHSA	Banco Hipotecario<br>S.A.
BYMA	Buenos Aires Stock<br>Exchange
Cellcom	Cellcom Israel<br>Ltd.
Clal	Clal Holdings<br>Insurance Enterprises Ltd.
CNV	Securities National<br>Commission
CODM	Chief Operating<br>Decision Maker
Condor	Condor Hospitality<br>Trust Inc.
CPF	Collective<br>Promotion Funds
CPI	Consumer Price<br>Index
Cresud	Cresud S.A.C.I.F. y<br>A.
DFL	Dolphin Fund<br>Ltd.
DIC	Discount Investment<br>Corporation Ltd.
DIL	Dolphin IL<br>Investment Ltd.
DN<br>B.V.	Dolphin Netherlands<br>B.V.
Dolphin	Dolphin Fund Ltd.<br>and Dolphin Netherlands B.V.
ECLSA	E-Commerce Latina<br>S.A.
Efanur	Efanur<br>S.A.
EHSA	Entertainment<br>Holdings S.A.
ETH	C.A.A. Extra<br>Holdings Ltd.
GAV-YAM	Gav-Yam Bayside<br>Land Corporation Ltd.
GCBA	Autonomous City of<br>Buenos Aires Government
Golan	Golan Telecom<br>Ltd.
HASAU	Hoteles Argentinos<br>S.A.U.
IAS	International<br>Accounting Standards
IASB	International<br>Accounting Interpretations Board
IDB<br>Tourism	IDB Tourism (2009)<br>Ltd
IDBD	IDB Development<br>Corporation Ltd.
IDBH	IDB Holdings<br>Corporation Ltd.
IFISA	Inversiones<br>Financieras del Sur S.A.
IFRIC	International<br>Financial Reporting Standards Interpretation Committee
IFRS	International<br>Financial Reporting Standards
IRSA<br>CP	IRSA Propiedades<br>Comerciales S.A.
IRSA, “The<br>Company”, “Us”, “We”	IRSA Inversiones y<br>Representaciones Sociedad Anónima
ISPRO	Ispro The Israeli<br>Properties Rental Corporation Ltd.
Israir	Israir Airlines<br>& Tourism Ltd.
Koor	Koor Industries<br>Ltd.
Lipstick	Lipstick Management<br>LLC
LRSA	La Rural<br>S.A.
Metropolitan	Metropolitan 885<br>Third Avenue Leasehold LLC
MPIT	Minimum Presumed<br>Income Tax
NCN	Non-Convertible<br>Notes
New<br>Lipstick	New Lipstick<br>LLC
NFSA	Nuevas Fronteras<br>S.A.
NIS	New Israeli<br>Shekel
NYSE	New York Stock<br>Exchange
OASA	OGDEN Argentina<br>S.A.
PBC	Property &<br>Building Corporation Ltd.
PBEL	PBEL Real Estate<br>LTD
Quality	Quality Invest<br>S.A.
Rock<br>Real	Rock Real Estate<br>Partners Limited
Shufersal	Shufersal<br>Ltd.
Tarshop	Tarshop<br>S.A.
TASE	Tel Aviv Stock<br>Exchange
TGLT<br><br><br>FACPCE	TGLT<br>S.A.<br><br><br>Argentine<br>Federation of Accountant
Tyrus	Tyrus<br>S.A.

F-2

IRSA Inversiones y Representaciones Sociedad Anónima

Consolidated Statements of Financial Position

as of June 30, 2020 and 2019

(All amounts in millions of Argentine Pesos, except otherwise indicated)

	Note	06.30.2020	06.30.2019
ASSETS
Non-current assets
Investment<br>properties	9	244,966	359,056
Property,<br>plant and equipment	10	40,618	34,347
Trading<br>properties	11,<br>25	5,228	8,436
Intangible<br>assets	12	29,911	27,563
Right-of-use<br>assets	13	21,379	-
Other<br>assets		-	37
Investments<br>in associates and joint ventures	8	80,089	47,841
Deferred<br>income tax assets	21	681	614
Income<br>tax and MPIT credit		27	232
Restricted<br>assets	14	2,014	4,737
Trade<br>and other receivables	15	24,898	19,033
Investments<br>in financial assets	14	3,782	4,444
Financial<br>assets at fair value through profit or loss	14	-	6,428
Derivative<br>financial instruments	14	153	146
Total non-current assets		453,746	512,914
Current assets
Trading<br>properties	11,<br>25	2,493	563
Inventories	25	5,041	1,765
Restricted<br>assets	14	6,684	6,741
Income<br>tax and MPIT credit		331	600
Group<br>of assets held for sale	32	44,868	12,378
Trade<br>and other receivables	15	39,986	34,687
Investments<br>in financial assets	14	20,922	49,573
Financial<br>assets at fair value through profit or loss	14	3,636	17,942
Derivative<br>financial instruments	14	227	63
Cash<br>and cash equivalents	14	97,276	93,060
Total current assets		221,464	217,372
TOTAL ASSETS		675,210	730,286
SHAREHOLDERS’ EQUITY
Shareholders'<br>equity attributable to equity holders of the parent (according to<br>corresponding statement)		61,500	49,352
Non-controlling<br>interest		70,544	82,692
TOTAL SHAREHOLDERS’ EQUITY		132,044	132,044
LIABILITIES
Non-current liabilities
Borrowings	14,<br>20	320,616	410,853
Lease<br>liabilities		14,400	-
Deferred<br>income tax liabilities	21	47,408	56,616
Trade<br>and other payables	14,<br>18	2,335	2,697
Provisions	19	3,297	12,329
Employee<br>benefits		481	202
Derivative<br>financial instruments	14	59	1,582
Salaries<br>and social security liabilities		210	169
Total non-current liabilities		388,806	484,448
Current liabilities
Trade<br>and other payables	14,<br>18	31,943	28,559
Borrowings	14,<br>20	84,338	70,014
Lease<br>liabilities		5,242	-
Provisions	19	2,627	2,651
Group<br>of liabilities held for sale	32	23,912	8,759
Salaries<br>and social security liabilities		4,419	3,241
Income<br>tax and MPIT liabilities		673	532
Derivative<br>financial instruments	14	1,206	38
Total current liabilities		154,360	113,794
TOTAL LIABILITIES		543,166	598,242
TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES		675,210	730,286

The accompanying notes are an integral part of these Consolidated Financial Statements.

F-3

IRSA Inversiones y Representaciones Sociedad Anónima

Consolidated Statements of Income and Other Comprehensive Income

for the fiscal years ended June 30, 2020, 2019 and 2018

(All amounts in millions of Argentine Pesos, except otherwise indicated)

	Note	06.30.2020	06.30.2019	06.30.2018
Revenues	23	15,240	20,071	19,522
Costs	24,<br>25	(6,359)	(7,498)	(7,727)
Gross profit		8,881	12,573	11,795
Net<br>gain / (loss) from fair value adjustment of investment<br>properties	9	36,313	(41,737)	20,627
General<br>and administrative expenses	24	(2,365)	(2,928)	(2,518)
Selling<br>expenses	24	(1,306)	(1,160)	(1,195)
Other<br>operating results, net	26	(24)	(506)	(27)
Profit / (loss) from operations		41,499	(33,758)	28,682
Share<br>of profit / (loss) of associates and joint ventures	8	7,771	(7,588)	(3,551)
Profit / (loss) before financial results and income<br>tax		49,270	(41,346)	25,131
Finance<br>income	27	229	202	808
Finance<br>costs	27	(6,629)	(5,151)	(4,631)
Other<br>financial results	27	(6,657)	2,415	(11,832)
Inflation<br>adjustment		97	(568)	(949)
Financial results, net		(12,960)	(3,102)	(16,604)
Profit / (loss) before income tax		36,310	(44,448)	8,527
Income<br>tax (expense) / benefit	21	(7,216)	4,845	11,455
Profit / (loss) for the year from continuing<br>operations		29,094	(39,603)	19,982
(Loss)<br>/ profit for the year from discontinued operations	33	(3,546)	(1,704)	15,773
Profit / (loss) for the year		25,548	(41,307)	35,755
Other comprehensive income:
Items that may be reclassified subsequently to profit or<br>loss:
Currency<br>translation adjustment		520	306	(25)
Other comprehensive income for the year from continuing<br>operations		520	306	(25)
Other<br>comprehensive income / (loss) for the year from discontinued<br>operations		14,748	(2,486)	14,564
Total other comprehensive income / (loss) for the year		15,268	(2,180)	14,539
Total comprehensive income / (loss) for the year		40,816	(43,487)	50,294
Total<br>comprehensive income / (loss) from continuing<br>operations		29,614	(39,297)	19,957
Total<br>comprehensive income / (loss) from discontinued<br>operations		11,202	(4,190)	30,337
Total comprehensive income / (loss) for the year		40,816	(43,487)	50,294
Profit / (loss) for the year attributable to:
Equity<br>holders of the parent		15,340	(39,412)	22,660
Non-controlling<br>interest		10,208	(1,895)	13,095
Profit / (loss) from continuing operations attributable<br>to:
Equity<br>holders of the parent		22,065	(34,991)	16,208
Non-controlling<br>interest		7,029	(4,612)	3,774
Total comprehensive income / (loss) attributable to:
Equity<br>holders of the parent		14,280	(40,421)	19,040
Non-controlling<br>interest		26,536	(3,066)	31,254
Total comprehensive income / (loss) from continuing operations<br>attributable to:
Equity<br>holders of the parent		22,585	(34,685)	15,972
Non-controlling<br>interest		7,029	(4,612)	3,985
Profit / (loss) per share attributable to equity holders of the<br>parent:
Basic		26.66	(68.55)	39.39
Diluted		26.50	(68.55)	39.16
Profit / (loss) per share from continuing operations attributable<br>to equity holders of the parent:
Basic		38.35	(60.86)	28.17
Diluted		38.12	(60.86)	28.17

The accompanying notes are an integral part of these Consolidated Financial Statements.

F-4

IRSA Inversiones y Representaciones Sociedad Anónima

Consolidated Statements of Changes in Shareholders’ Equity

for the fiscal years ended June 30, 2020, 2019 and 2018

(All amounts in millions of Argentine Pesos, except otherwise indicated)

	Attributable to equity holders of the parent
	Share capital	Treasury shares	Inflation adjustment of share capital and treasury shares<br>(1)	Share premium	Additional paid-in capital from treasury shares	Legal reserve	Special reserve Resolution CNV 609/12 (2)	Other reserves (3)	Retained earnings	Subtotal	Non-controlling interest	Total Shareholders’ equity
Balance as of July 1, 2019	575	4	14,612	15,653	83	522	10,121	73,257	(65,475)	49,352	82,692	132,044
Prior<br>year adjustments (IFRS 16 and IAS 28) (Note 2.2)	-	-	-	-	-	-	-	-	(1,406)	(1,406)	(926)	(2,332)
Restated balance as of July 1, 2019	575	4	14,612	15,653	83	522	10,121	73,257	(66,881)	47,946	81,766	129,712
Profit<br>for the year	-	-	-	-	-	-	-	-	15,340	15,340	10,208	25,548
Other<br>comprehensive (loss) / income for the year	-	-	-	-	-	-	-	(1,060)	-	(1,060)	16,328	15,268
Total comprehensive income for the year	-	-	-	-	-	-	-	(1,060)	15,340	14,280	26,536	40,816
Loss<br>absorption	-	-	-	-	-	-	-	(65,081)	65,081	-	-	-
Reserve<br>for share-based payments	-	-	-	-	18	-	-	(18)	-	-	-	-
Distribution<br>of dividends in shares (See Note 4.A)	-	-	-	-	-	-	-	(634)	-	(634)	-	(634)
Capitalization<br>of irrevocable contributions	-	-	-	-	-	-	-	-	-	-	33	33
Dividend<br>distribution	-	-	-	-	-	-	-	-	-	-	(2,458)	(2,458)
Decrease<br>due to loss of control (See Note 4.C)	-	-	-	-	-	-	-	-	-	-	(46,617)	(46,617)
Other<br>changes in equity	-	-	-	-	-	-	-	(125)	24	(101)	270	169
Incorporation<br>by business combination	-	-	-	-	-	-	-				8,013	8,013
Changes<br>in non-controlling interest	-	-	-	-	-	-	-	9	-	9	3,001	3,010
Balance as of June 30, 2020	575	4	14,612	15,653	101	522	10,121	6,348	13,564	61,500	70,544	132,044

(1) Includes Ps. 1 of Inflation adjustment of treasury shares. See Note 17.

(2) Related to CNV General Resolution N° 609/12.

(3) Group’s other reserves for the year ended June 30, 2020 were as follows:

	Cost of treasury stock	Changes in non-controlling interest	Reserve for share-based payments	Reserve for future dividends	Currency translation adjustment reserve	Hedging instruments	Special reserve	Reserve for defined contribution plans	Other reserves from subsidiaries	Revaluation surplus	Total Other reserves
Balance as of July 1, 2019	(177)	(5,679)	224	1,822	282	(10)	76,905	(334)	112	112	73,257
Other<br>comprehensive loss for the year	-	-	-	-	(941)	(384)	-	(87)	-	352	(1,060)
Total comprehensive loss for the year	-	-	-	-	(941)	(384)	-	(87)	-	352	(1,060)
Appropriation<br>of retained earnings approved by Shareholders’ meeting held<br>on 10.29.18	(7)	-	(11)	-	-	-	-	-	-	-	(18)
Distribution<br>of dividends in shares	-	-	-	-	-	-	(634)	-	-	-	(634)
Share-based<br>compensation	-	9	-	-	-	-	-	-	-	-	9
Other<br>changes in equity	-	-	-	-	(125)	-	-	-	-	-	(125)
Loss<br>absorption	-	-	-	-	-	-	(65,081)	-	-	-	(65,081)
Balance as of June 30, 2020	(184)	(5,670)	213	1,822	(784)	(394)	11,190	(421)	112	464	6,348

The accompanying notes are an integral part of these Consolidated Financial Statements.

F-5

IRSA Inversiones y Representaciones Sociedad Anónima

Consolidated Statements of Changes in Shareholders’ Equity

for the fiscal years ended June 30, 2020, 2019 and 2018

(All amounts in millions of Argentine Pesos, except otherwise indicated)

	Attributable to equity holders of the parent
	Share capital	Treasury shares	Inflation adjustment of share capital and treasury shares<br>(1)	Share premium	Additional paid-in capital from treasury shares	Legal reserve	Special reserve Resolution CNV 609/12 (2)	Other reserves (3)	Retained earnings	Subtotal	Non-controlling interest	Total Shareholders’ equity
Balance as of July 1, 2018	575	4	14,612	15,653	83	522	10,121	5,284	47,517	94,371	89,519	183,890
Prior<br>year adjustments (IFRS 9 and 15)	-	-	-	-	-	-	-	-	(355)	(355)	(6)	(361)
Balance as of July 1, 2018 (recast)	575	4	14,612	15,653	83	522	10,121	5,284	47,162	94,016	89,513	183,529
Loss<br>for the year	-	-	-	-	-	-	-	-	(39,412)	(39,412)	(1,895)	(41,307)
Other<br>comprehensive loss for the year	-	-	-	-	-	-	-	(1,009)	-	(1,009)	(1,171)	(2,180)
Total profit / (loss) and other comprehensive income for the<br>year	-	-	-	-	-	-	-	(1,009)	(39,412)	(40,421)	(3,066)	(43,487)
Incorporation<br>by business combination	-	-	-	-	-	-	-	-	-	-	8	8
Changes<br>in non-controlling interest	-	-	-	-	-	-	-	(1,475)	-	(1,475)	(247)	(1,722)
Dividend<br>distribution	-	-	-	-	-	-	-	-	(2,811)	(2,811)	(3,585)	(6,396)
Reserve<br>for share-based payments	-	-	-	-	-	-	-	-	-	-	69	69
Capitalization<br>of contributions	-	-	-	-	-	-	-	-	-	-	-	-
Assignment<br>of results according to A.G.O. at 10.31.18	-	-	-	-	-	-	-	70,457	(70,457)	-	-	-
Dividends<br>distribution to non-controlling interest in<br>subsidiaries	-	-	-	-	-	-	-	-	43	43	-	43
Balance as of June 30, 2019	575	4	14,612	15,653	83	522	10,121	73,257	(65,475)	49,352	82,692	132,044

(1) Includes Ps. 1 of Inflation adjustment of treasury stock. See Note 17.

(2) Related to CNV General Resolution N° 609/12.

(3) Group’s other reserves for the year ended June 30, 2019 were 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, 2018	(195)	(4,204)	242	1,822	1,166	115	(334)	6,448	112	112	5,284
Other<br>comprehensive loss for the year	-	-	-	-	(884)	(125)	-	-	-	-	(1,009)
Total comprehensive loss for the year	-	-	-	-	(884)	(125)	-	-	-	-	(1,009)
Share-based<br>compensation	18	-	(18)	-	-	-	-	-	-	-	-
Assignment<br>of results according to A.G.O. at 10.31.18	-	-	-	-	-	-	-	70,457	-	-	70,457
Changes<br>in non-controlling interest	-	(1,475)	-	-	-	-	-	-	-	-	(1,475)
Balance as of June 30, 2019	(177)	(5,679)	224	1,822	282	(10)	(334)	76,905	112	112	73,257

The accompanying notes are an integral part of these Consolidated Financial Statements.

F-6

IRSA Inversiones y Representaciones Sociedad Anónima

Consolidated Statements of Changes in Shareholders’ Equity

for the fiscal years ended June 30, 2020, 2019 and 2018

(All amounts in millions of Argentine Pesos, except otherwise indicated)

	Attributable to equity holders of the parent
	Share capital	Treasury shares	Inflation adjustment of share capital and treasury shares<br>(1)	Share premium	Additional paid-in capital from treasury shares	Legal reserve	Special reserve Resolution CNV 609/12 (2)	Other reserves (3)	Retained earnings	Subtotal	Non-controlling interest	Total Shareholders’ equity
Balance as of July 1, 2017	575	4	14,612	15,653	80	522	10,121	7,255	35,195	84,017	68,836	152,853
Profit<br>for the year	-	-	-	-	-	-	-	-	22,660	22,660	13,095	35,755
Other<br>comprehensive (loss) / income for the year	-	-	-	-	-	-	-	(3,620)	-	(3,620)	18,159	14,539
Total profit / (loss) and other comprehensive income for the<br>year	-	-	-	-	-	-	-	(3,620)	22,660	19,040	31,254	50,294
Changes<br>in non-controlling interest	-	-	-	-	-	-	-	(4,781)	-	(4,781)	11,372	6,591
Dividend<br>distribution	-	-	-	-	-	-	-	-	(4,066)	(4,066)	-	(4,066)
Reserve<br>for share-based payments	-	-	-	-	3	-	-	4	-	7	119	126
Loss<br>of control of subsidiary	-	-	-	-	-	-	-	(22)	22	-	(18,114)	(18,114)
Repayment<br>of dividends in subsidiaries	-	-	-	-	-	-	-	-	154	154	-	154
Capitalization<br>of contributions	-	-	-	-	-	-	-	-	-	-	18	18
Irrevocable<br>contributions	-	-	-	-	-	-	-	-	-	-	11	11
Dividend<br>distribution to non-controlling interest	-	-	-	-	-	-	-	-	-	-	(3,977)	(3,977)
Assignment<br>of results according to A.G.O. at 10.31.17	-	-	-	-	-	-	-	6,448	(6,448)	-	-	-
Balance as of June 30, 2018	575	4	14,612	15,653	83	522	10,121	5,284	47,517	94,371	89,519	183,890

(1) Includes Ps. 1 of Inflation adjustment of treasury stock. See Note 17.

(2) Related to CNV General Resolution N° 609/12.

(3) Group’s other reserves for the year ended June 30, 2018 were 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, 2017	(203)	577	246	1,822	4,689	115	(46)	-	-	55	7,255
Other<br>comprehensive loss for the year	-	-	-	-	(3,523)	-	(266)	-	112	57	(3,620)
Total comprehensive loss for the year	-	-	-	-	(3,523)	-	(266)	-	112	57	(3,620)
Share-based<br>compensation	8	-	(4)	-	-	-	-	-	-	-	4
Loss<br>of control of subsidiary	-	-	-	-	-	-	(22)	-	-	-	(22)
Assignment<br>of results according to A.G.O. at 10.31.17	-	-	-	-	-	-	-	6,448	-	-	6,448
Changes<br>in non-controlling interest	-	(4,781)	-	-	-	-	-	-	-	-	(4,781)
Balance as of June 30, 2018	(195)	(4,204)	242	1,822	1,166	115	(334)	6,448	112	112	5,284

The accompanying notes are an integral part of these Consolidated Financial Statements.

F-7

IRSA Inversiones y Representaciones Sociedad Anónima

Consolidated Statements of Cash Flows

for the fiscal years ended June 30, 2020, 2019 and 2018

(All amounts in millions of Argentine Pesos, except otherwise indicated)

	Note	06.30.2020	06.30.2019	06.30.2018
Operating activities:
Net<br>cash generated from continuing operating activities before income<br>tax paid	16	7,043	6,315	(5,330)
Income<br>tax and MPIT paid		(326)	(362)	(1,591)
Net cash generated from / (used in) continuing operating<br>activities		6,717	5,953	(6,921)
Net<br>cash generated from discontinued operating activities		26,778	23,158	28,904
Net cash generated from operating activities		33,495	29,111	21,983
Investing activities:
Acquisition<br>of participation in associates and joint ventures		-	(94)	(248)
Contributions<br>and issuance of capital in associates and joint<br>ventures		(2,909)	-	-
Acquisition<br>and improvements of investment properties		(3,960)	(4,605)	(3,878)
Proceeds<br>from sales of investment properties		194	43	443
Acquisitions<br>and improvements of property, plant and equipment		(272)	(162)	(706)
Proceeds<br>from sales of property, plant and equipment		-	-	36
Acquisitions<br>of intangible assets		(46)	(209)	(164)
Proceeds<br>from sales of property, plant and equipment		-	-	(237)
Dividends<br>collected from associates and joint ventures		248	235	386
Proceeds<br>from sales of interest held in associates and joint<br>ventures		-	6	93
Proceeds<br>from loans granted		-	223	146
Payment<br>of acquisition of non controlling interest		(225)	-	19
Acquisitions<br>of investments in financial assets		(16,591)	(33,101)	(35,314)
Proceeds<br>from disposal of investments in financial assets		21,624	35,610	27,945
Interest<br>received from financial assets		106	629	283
Dividends<br>received from financial assets		(13)	32	601
Payment<br>for acquisition of other assets		-	(3)	1
Collection<br>for liquidation of associate		-	-	31
Loans<br>granted to related parties		(178)	(15)	(1,025)
Loans<br>granted		1,937	-	(38)
Net cash used in continuing investing activities		(85)	(1,411)	(11,626)
Net<br>cash generated from / (used in) discontinued investing<br>activities		43,840	13,456	(21,244)
Net cash generated from / (used in) investing<br>activities		43,755	12,045	(32,870)
Financing activities:				-
Borrowings<br>and issuance of non-convertible notes		23,777	6,670	11,310
Payment<br>of borrowings and non-convertible notes		(29,099)	(4,311)	(1,732)
Collections<br>/ (Payment) of short term loans, net		2,709	(1,091)	903
Interests<br>paid		(5,811)	(5,724)	(3,922)
Repurchase<br>of non-convertible notes		(2,188)	(1,654)	-
Capital<br>contributions from non-controlling interest in<br>subsidiaries		-	-	14
Acquisition<br>of non-controlling interest in subsidiaries		(648)	(1,057)	(2,669)
Proceeds<br>from sales of non-controlling interest in subsidiaries		(408)	-	7,249
Distribution<br>of capital to non-controlling interest in subsidiaries		-	-	(95)
Borrowings<br>obtained from related parties		-	69	-
Dividends<br>paid to non-controlling interest in subsidiaries		(239)	-	(1,106)
Charge<br>for issuance of shares and other equity instruments		-	-	(3,067)
Adquisition<br>of derivate financial instrument		-	-	262
Proceeds<br>from sale at non-controlling interest		408	-	-
Net<br>proceeds from derivate financial instrument		5,332	659	220
Net cash (used in) / generated from continuing financing<br>activities		(6,167)	(6,439)	7,367
Net<br>cash used in discontinued financing activities		(75,785)	(23,439)	(14,001)
Net cash used in financing activities		(81,952)	(29,878)	(6,634)
Net<br>increase / (decrease) in cash and cash equivalents from continuing<br>activities		465	(1,897)	(11,180)
Net<br>(decrease) / increase in cash and cash equivalents from<br>discontinued activities		(5,167)	13,175	(6,341)
Net<br>(decrease) / increase in cash and cash equivalents		(4,702)	11,278	(17,521)
Cash and cash<br>equivalents at beginning of year		93,060	89,326	77,024
Cash<br>and cash equivalents reclassified as held-for-sale		(484)	(260)	(922)
Foreign<br>exchange gain and inflation adjustment on cash and changes in fair<br>value of cash equivalents		9,402	(7,284)	30,745
Cash and cash equivalents at end of year	14	97,276	93,060	89,326

The accompanying notes are an integral part of these Consolidated Financial Statements.

F-8

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to Consolidated Financial Statements

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

The Group’s business and general information

Purpose of these consolidated financial statements.

These financial statements were prepared to comply with the provisions of the Securities and Exchange Commission (SEC), which require retrospective revision of audited financial statements that are incorporated by reference in a registration statement to reflect a subsequent change in accounting principle (or consistent with staff practice, discontinued operations and changes in segment presentation) if the registration statement also incorporates by reference post-event interim financial statements. The changes incorporated to these consolidated financial statements, as compared to those included in the Company’s Form 20-F for the year ended June 30, 2020 filed with the SEC on November 16, 2020, are the following:



All the amounts in Argentine Pesos included in these consolidated financial statements were restated to the current unit of measurement as of September 30, 2020, by applying the general price index.



Loss of control and deconsolidation of DIC and IDBD:

On September 25, 2020, the Group lost control over IDBD and DIC. These consolidated financial statements have been recast to reflect the deconsolidation of DIC and IDBD for all periods presented. See Note 33.



Update of the economic framework of the Group’s business until the date of issuance of these financial statements (see Note 34)



Update of subsequent events between June 30, 2020 and the date of issuance of these financial statements (see Note 35).

General Infomation

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 and IFIS Limited our ultimate parent company.

These Consolidated Financial Statements have been approved for issue by the Board of Directors on January 5, 2021.

The Group has established two Operations Centers, Argentina and Israel, to manage its global business, mainly through the following companies:

F-9

(*) See Note 4 for more information about the change within the Operations Center in Israel.

Operations Center in Argentina

The activities of the Operations Center in Argentina are mainly developed through IRSA and its principal subsidiary, IRSA CP. Through IRSA and IRSA CP, the Group owns, manages and develops 14 shopping malls across Argentina, a portfolio of offices and other rental properties in the Autonomous City of Buenos Aires, and it entered the United States of America (“USA”) real estate market in 2009, mainly through the acquisition of non-controlling interests in office buildings and hotels. Through IRSA or IRSA CP, the Group also develops residential properties for sale. The Group, through IRSA, is also involved in the operation of branded hotels. The Group uses the term “real estate” indistinctively in these Consolidated Financial Statements to denote investment, development and/or trading properties activities. IRSA CP's shares are listed and traded on both the BYMA (BYMA: IRCP) and the NASDAQ (NASDAQ: IRCP). IRSA's shares are listed on the BYMA (Merval: IRSA) and the NYSE (NYSE: IRS).

The activities of the Group’s “Others” segment is carried out mainly through BHSA, where IRSA holds, directly or indirectly, a 29.91% interest. BHSA is a commercial bank offering a wide variety of banking activities and related financial services to individuals, small and medium-sized companies and large corporations, including the provision of mortgaged loans. BHSA's shares are listed on the BYMA (BYMA: BHIP).

Operations Center in Israel

The activities of the Operations Center in Israel were mainly developed through the subsidiaries, IDBD and DIC, whose activities correspond to one of the Israeli largest and most diversified conglomerates, which are involved, through its subsidiaries and other investments, in several markets and industries, including real estate, supermarkets, insurance, telecommunications, and others.; controlling or holding an equity interest in companies such as Clal (Insurance), Cellcom (Telecommunications), Shufersal (Supermarkets), PBC (Real Estate), among others. IDBD is listed in the TASE as a “Debentures Company” in accordance with Israeli law, since some series of bonds are traded in that Exchange. DIC shares are listed in the TASE.

IDBD and DIC have certain restrictions and financial agreements in relation to their financial debt, including their bonds and loans with banks and financial institutions. Regarding IDBD's financial position, its cash flow and its ability to meet its financial debt commitments, the following should be considered:

As of June 30, 2020, IDBD had a deficit in shareholders’ equity, ongoing negative cash flows from continuing operating activities and a low credit rating, which circumstance may cast significant doubt about IDBD´s ability to continue operating as a going concern. IDBD´s cash flow required to meet its liabilities, including short-term liabilities was based on the realization of assets for which the realization date was not under IDBD´s control. These assets included the current price of Clal’s shares and the impact thereof on swap transaction deposits and the fact that IDBD shall receive, among others, the proceeds from the sale of private investments which were directly owned by IDBD.

F-10

As of June 30, 2020, the aggregate principal amount of the (i) IDBD Series 9 Bonds was NIS 901 million (“Series 9”), (ii) IDBD Series 14 Bonds was NIS 889 million, collateralized by DIC shares owned directly or indirectly by IDBD representing 70% of the share capital of DIC (“Series 14”), and (iii) IDBD Series 15 Bonds was NIS 238 million, collateralized by shares of Clal representing 5% of the share capital of Clal (“Series 15”).

In July 2019 and in June 2020, each of debenture holders (Series 9 and Series 14) and debenture holders (Series 15), respectively, decided to appoint a representative and legal and economic advisor, inter alia, in order to maintain contact with IDBD and / or third parties and to examine proposals that would be presented to the bondholders in connection with the repayment of IDBD's obligations towards the bondholders and to evaluate IDBD’s financial position and the remedies which may be available to the debenture holders.

In June 2020, general meetings of the holders of IDBD's debentures were convened (all of the series, each series separately), where the resolution was not to convene a general meeting which includes in the agenda the decision of making immediately repayable the debentures. The meetings of the debenture holders (Series 9 and Series 15), each decided to pass the said resolution; The meeting of the debenture holders (Series 14), decided not to pass the said resolution, and at a later stage instruct the trustee for debenture holders (Series 14) to postpone the date of the said meeting to September 17, 2020;

In July 2020, Dolphin Netherlands and the controlling interest therein, Mr. Eduardo Elsztain committed vis-à-vis the generality of the debenture holders in IDBD, that subject to defined terms and conditions, during a certain period of time, some transactions would not be executed and/or initiated and/or promoted, and that subject to the provisions of the law, the power of control in corporations that are controlled by the controlling interest in IDBD would not be operated in order to promote any of those actions, unless notification has been delivered in writing to the trustees for debenture holders (Series 9, 14 and 15), at least 14 business days in advance.

On August 31, 2019, IDBD 's Audit Committee and the Board of Directors approved the acceptance of an irrevocable commitment by Dolphin Netherlands B.V. (“Dolphin Netherlands”), the controlling interest in IDBD, to make capital injections into IDBD in an overall amount of NIS 210 million, in three equal annual payments on September 2 in each of the years 2019 to 2021, which would be made in consideration for shares in IDBD or as a subordinated loan on similar terms to the subordinated loans that had been provided by the controlling interest.

In August 2020, IDBD received a letter from Dolphin Netherlands stating, inter alia, that given the fact that some of IDBD's bondholders are expected to include in their agenda for the bondholders' meetings, a proposal to make the outstanding balances of their bonds immediately due and payable, in preparation for the additional inflow of NIS 70 million scheduled for September 2, 2020, Dolphin Netherlands would examine its undertaking towards IDBD, taking into account the questions that arise from IDBD’s bondholders conducts and intentions. To the said Dolphin Netherlands' letter was attached a letter from IRSA to Dolphin Netherlands, according to which, among other things, IRSA would consider the validity of its undertaking to Dolphin Netherlands to transfer to it (in accordance with Dolphin Netherlands’ request) the amounts required for Dolphin Netherlands to meet its commitment to carry out the capital injections into IDBD on September 2, 2020, as aforementioned.

IDBD responded to Dolphin Netherlands’ and IRSA’s letters, noting that, among other things, Dolphin Netherlands' commitment (dated August 29, 2019) towards IDBD is binding and irrevocable, and that there is no basis for not making the capital injections into IDBD, due to other events related to IDBD’s bondholders, which do not fall within the scope of the events listed in the wording of the commitment as expropriating the validity of Dolphin Netherlands' commitment. In addition, it was also mentioned in IDBD’s response letter, that failure to make the payments into IDBD is not acceptable and would leave IDBD with no other choice than to use all its power and rights according to the law to enforce Dolphin Netherlands' commitment as well as IRSA’s undertaking.

Following the above mentioned, on September 13, 2020, IDBD submitted a statement of claim against Dolphin Netherlands and against IRSA, in which it has sought to require them to pay it an amount of NIS 70 million (with the addition of linkage differentials and interest in accordance with the law). In tandem with the submission of the lawsuit, as aforesaid, IDBD submitted an urgent petition for placing temporary attachments (in the presence of one party) on Dolphin Netherlands and IRSA (which was not accepted by the Court in the presence of one party and which has been passed on for the respondents to respond to the petition).

On June 2, 2020, IDBD received a draft proposal from Dolphin IL for IDBD and for the trustees for IDBD’s debentures (Series 9, 14 and 15) for the strengthening of IDBD 's capital structure, by way of an arrangement between Dolphin, IDBD and the debenture holders, based on an economic contribution to IDBD on Dolphin IL's part, together with a full or partial (as the case may be) redemption of the generality of IDBD's debentures. On June 21, 2020, IDBD received an updated proposal in relation to the abovementioned proposal and on June 28, 2020, Dolphin IL approached each of the trustees for the debentures with a request to put said proposal, with slight amendments, on the agenda of meetings of the debenture holders.

On July 6, 2020, the Meeting of debenture holders (Series 9) decided to order the trustee for debenture holders (Series 9) not to accept Dolphin IL's offer.; On July 7, 2020, the Meeting of the debenture holders (Series 14) decided to negotiate for a fixed period of one month in connection with Dolphin IL's proposal, and on July 8, 2020, the Meeting of debenture holders (Series 15) made a similar decision.

On September 2, 2020 IDBD received an updated offer from Dolphin IL which was addressed to it and to IDBD’s debenture holders (Series 9, 14 and 15). On September 9, 2020, Dolphin IL updated the commercial terms of its proposal for debenture holders (Series 9), and on September 16, 2020, IDBD received binding offers to debenture

F-11

holders (Series 14) and debenture holders (Series 15), for the purchase of DIC shares pledged in favor of debenture holders (Series 14) of IDBD, as part of an agreed realization process.

As no agreement has been reached, on September 17, 2020, the Series 9 trustee submitted to the District Court in Tel-Aviv-Jaffa (the "Court") a petition to grant an order for the opening of proceedings for IDBD pursuant to the Insolvency and Economic Rehabilitation Law, 5778 – 2018 and to instruct the appointment of a trustee for IDBD pursuant to Section 43 and to grant the trustee any and all authority over the decision making of IDBD (the “Petition”).

On September 21, 2020, the Series 14 bondholders approved the immediate fully payment of the remaining balances of such series.

On September 22, 2020, IDBD and Dolphin Netherlands submitted an initial response to the Petition, arguing that it is in the best interest of IDBD and its creditors to exhaust the negotiations among the controlling shareholder and its creditors during a short period with the aim to maximize the value of its assets, avoid costs and additional negative effects.

In addition, responses by the Series 14 trustee and the Series 15 trustee were filed requesting the enforcement of liens and the appointment of a receiver as well as an urgent hearing, which was scheduled for September 24, 2020.

On September 25, 2020, the Court resolved that IDBD is insolvent and therefore it resolved to grant all three orders requested and accordingly, issued an order for the initiation of proceedings and liquidation of IDBD, and has appointed a liquidator to IDBD and interim receivers over the pledged DIC and Clal Shares.

Under IFRS 10 “Consolidated Financial Statements” (“IFRS 10”), an investor controls an investee if and only if the investor has all the following: a) power over the investee; b) exposure, or rights, to variable returns from its involvement with the investee; and c) the ability to use its power over the investee to affect the amount of the investor’s returns. Based on the facts and circumstances outlined above, management believe that, as from September 25, 2020, IRSA lost control over IDBD and DIC (as this term is defined by IFRS 10). Accordingly, the Group’s investment in IDBD and DIC has been deconsolidated in its consolidated financial statements as of and for the three-month period ended September 30, 2020.

As further described in Note 1.A), these financial statements have been recast to reflect the loss of control over IDBD and DIC. Accordingly, activities from the Israel Operations Center have been presented in separate line items under “discontinued operations” in the consolidated statements of Income and Comprehensive Income and of Cash Flows for the years ended June 30, 2020, 2019 y 2018. Assets and liabilities from the Israel Operations Center have been presented on a consolidated basis in the Consolidated Statements of Financial Position as of June 30, 2020 and 2019, totaling net assets of Ps. 2,160. (amount attributable to the controlling shareholder) as of June 30, 2020, from which the currency translation adjustment reserve associated of $ 1.657 should be deducted.

The assets and liabilities consolidated in this financial statement are as follow:

Current assets: Ps.203,058

Non-current assets: Ps.275,451

Current liabilities: Ps.109,729

Non-current liabilities: Ps.322,050

Total equity: Ps.46,730

Equity Attributable to equity holders of the parent: Ps.2,160

Summary of significant accounting policies

2.1.

Basis of preparation of the Consolidated Financial Statement

(a)

Basis of preparation

These Consolidated Financial Statements have been prepared in accordance with IFRS issued by IASB and interpretations issued by the IFRIC. All IFRS applicable as of the date of these Consolidated Financial Statements have been applied.

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 in the 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 hyper-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 is approximate or exceeds 100%. It is for this reason that, in accordance with IAS 29, Argentina must be considered a country with high inflation economy starting July 1, 2018.

F-12

In addition, Law No. 27,468 (published in the Official Gazette on December 4, 2018), amended Section 10 of Law No. 23,928, as amended, and established that the derogation of all the laws or regulations imposing or authorizing price indexation, monetary restatement, cost variation or any other method for strengthening debts, taxes, prices or rates of goods, works or services, does not extend to financial statements, as to which the provisions of Section 62 of the General Companies Law No. 19,550 (1984 revision), as amended, shall continue to apply. Moreover, the referred law repealed Decree No. 1269/2002 dated July 16, 2002, as amended, and delegated to the Argentine Executive Branch the power to establish, through its controlling agencies, the effective date of the referred provisions in connection with the financial statements filed with it. Therefore, under General Resolution 777/2018 (published in the Official Gazette on December 28, 2018) the Argentine Securities Commission (CNV) ordered that issuers subject to its supervision shall apply the inflation adjustment to reflect the financial statements in terms of the measuring unit current at the end of the reporting period set forth in IAS 29 in their annual, interim and special financial statements closed on or after December 31, 2018. Thus, these financial statements have been reported in terms of the measuring unit current as of June 30, 2020 accordingly to IAS 29.

Pursuant to IAS 29, the financial statements of an entity whose functional currency is that of a high inflationary economy should be reported in terms of the measuring unit current as of the reporting date of the financial statements. All the amounts included in the statement of financial position which are not stated in terms of the measuring unit current as of the date of the financial statements should be restated applying the general price index. All items in the statement of income should be stated in terms of the measuring unit current as of the date of the financial statements, applying the changes in the general price index occurred from the date on which the revenues and expenses were originally recognized in the financial statements.

Adjustment for inflation in the initial balances has been calculated considering the indexes reported by the FACPCE based on the price indexes published by the Argentine Institute of Statistics and Census (INDEC).

The principal inflation adjustment procedures are the following:



Monetary assets and liabilities that are already recorded at the measuring unitas of the balance sheet’s closing date are not restated because they are already stated in terms of the mesuring unit current as of the date of the financial statements.



Non-monetary assets, and liabilities recorded at cost as of the balance sheet date and equity component are restated by applying the relevant adjustment coefficients.



All items in the statement of income are restated applying the relevant conversion factors.



The effect of inflation in the Company’s net monetary position is included in the statement of income and other comprehensive income/(loss) under Financial results, net, in the item “Inflation adjustment”.



Comparative figures have been adjusted for inflation following the procedure explained in the previous paragraphs.

Upon initially applying inflation adjustment, the equity accounts were restated as follows:



Capital was restated as from the date of subscription or the date of the most recent inflation adjustment for accounting purposes, whichever is later. The resulting amount was included in the “Comprehensive Inflation adjustment of share capital and treasury shares adjustment” account.



Translation difference was restated in current terms.



Other comprehensive income / (loss) was restated as from each accounting allocation.



The other reserves in the statement of income were restated from the initial application date, i.e., June 30, 2016.

In relation to the inflation index to be used and in accordance with the FACPCE Resolution No. 539/18, it will be determined based on the Wholesale Price Index (IPIM) until 2016, considering for the months of November and December 2015 the average variation of Consumer Price indices (CPI) of the Autonomous City of Buenos Aires, because during those two months there were no national IPIM measurements. Then, from January 2017, the National Consumer Price Index (National CPI) will be considered. The tables below show the evolution of these indices in the last two fiscal years and as of June 30, 2020according to official statistics (INDEC) following the guidelines described in Resolution 539/18.

Annual<br>price variation	June<br>30, 2018	June<br>30, 2019	June<br>30, 2020	Cumulative<br>as of June 30, 2020 (3 years)
	29%	56%	43%	128%

As a consequence of the aforementioned, these financial statements as of June 30, 2020 were restated in accordance with IAS 29.

F-13

IDBD and DIC report their quarterly and annual results following the Israeli regulations, whose legal deadlines are after the deadlines in Argentina and since IDBD and DIC fiscal years end differently from IRSA, the results of operations from IDBD and DIC are consolidated with a lag of three months and adjusted for the effects of significant transactions taking place in such period. For these reasons, it is possible to obtain the quarterly results of IDBD and DIC in time so that they can be consolidated by IRSA and reported to the CNV in its consolidated financial statements within the legal deadlines set in Argentina. This way, the Group's consolidated comprehensive income for the year ended June 30, 2020 includes the results of IDBD´s and DIC´s transactions for the 12-month period from April 1, 2019 to March 31, ,2020 adjusted for the significant transactions that occurred between April 1, 2020 and June 30, 2020.

(b)

Current and non-current classification

The Group presents current and non-current assets, and current and non-current liabilities, as separate classifications in its Statement of Financial Position according to the operating cycle of each activity. Current assets and current liabilities include the assets and liabilities that are either realized or settled within 12 months from the end of the fiscal year.

All other assets and liabilities are classified as non-current. Current and deferred tax assets and liabilities (income tax liabilities) are presented separately from each other and from other assets and liabilities, classified as current and non-current, respectively.

(c)

Presentation currency

The Consolidated Financial Statements are presented in millions of Argentine Pesos. Unless otherwise stated or the context otherwise requires, references to ‘Peso amounts’ or ‘Ps.’, are millions of Argentine Pesos, references to ‘US$’ or ‘US Dollars’ are millions of US Dollars and references to "NIS" are millions of New Israeli Shekel. As of June 30, 2020 and 2019, the exchange rate between the Argentine Peso and the NIS was Ps. 21.568 and Ps. 13 per NIS respectively.

(d)

Fiscal year-end

The fiscal year begins on July 1st and ends on June 30 of each year.

(e)

Accounting criteria

See Notes 2.2 to 2.28 with the accounting policies of each item.

(f)

Reporting cash flows

The Group reports operating activities cash flows using the indirect method. Interest paid is presented within financing activities. Interest received for financing of operating activities is presented within operating activities whereas the rest is presented within investing activities. The acquisitions and disposals of investment properties are disclosed within investing activities as this most appropriately reflects the Group’s business activities. Cash flows in respect to trading properties are disclosed within operating activities because these items are sold in the ordinary course of business.

(g)

Use of estimates

The preparation of Financial Statements at a certain date requires the 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 year. Actual results might differ from the estimates and evaluations made at the date of preparation of these Consolidated Financial Statements. The most significant judgments made by Management in applying the Group’s accounting policies and the major estimations and significant judgments are described in Note 3.

2.2.

New accounting standards

The following standards and amendments have been issued by the IASB. Below we outline the standards and amendments that may potentially have an impact on the Group at the time of application.

Standards and amendments adopted by the Group

F-14

IRSA Inversiones y Representaciones Sociedad Anónima

Standards<br>and amendment	Description	Date<br>of mandatory adoption for the Group in the year ended<br>on
IFRS 16<br>"Leases".	Lessees are<br>required to account for all leases under one single model in the<br>balance sheet that is similar to the one used to account for<br>financial leases under IAS 17, including two exceptions for the<br>recognition of leases; low-cost asset leases and short-term leases.<br>Accounting by the lessor has no significant changes.	06-30- 2020
Amendment to<br>IAS 28 “Investment in associates and joint<br>ventures”	Requires the<br>adoption of IFRS 9 regarding long-term investments that are<br>essentially part of the net investment of an entity in an associate<br>or joint venture.	06-30- 2020
Definition of<br>Material - Amendments to IAS 1 and IAS 8	The IASB has<br>made modifications to IAS 1 “Presentation of Financial<br>Statements” and IAS 8“Accounting policies, changes in<br>accounting estimates and errors” and which requires that the<br>assessment of materiality be consistent for the application of<br>IFRS.	06-30-2020
Defining a business<br>- Amendments to IFRS 3	The new business<br>definition requires that a business combination contribute<br>significantly to creating products or services.	06-30-2020
Amendments to IAS<br>19- Plan amendment, curtailment or settlement.	Clarifies the<br>accounting for defined benefit plan amendments, curtailments or<br>settlements. The amendments require an entity to: (i) determine<br>current service cost and net interest for the remainder of the<br>period after a plan amendment, curtailment or settlement, using<br>updated assumptions at the time of the amendment; (ii) recognize<br>any reduction in a surplus immediately in gains or losses, as part<br>of past service cost or a gain or loss on settlement. In other<br>words, any surplus reduction must be recognized, even if that<br>surplus was not previously recognized because of the impact of the<br>asset ceiling; and (iii) separately recognize any change in the<br>asset ceiling through other comprehensive income.	06-30-2019

The adoption of these standards and amendments has not had a material impact for the Group. Except for the following:

IFRS 16: Leases

The standard establishes the criteria for recognition and valuation of leases for lessees and lessors. The changes incorporated mainly impact the tenant's accounting. IFRS 16 provides that the lessee recognizes an asset for the right of use and a liability at present value with respect to those contracts that meet the definition of lease agreements according to IFRS 16. In accordance with the standard, a lease agreement is one that provides the right to control the use of an identified asset for a specific period. In order for a company to have control over the use of an identified asset: a) it must have the right to obtain substantially all the economic benefits of the identified asset and b) it must have the right to direct the use of the identified asset.

The standard allows excluding the short-term contracts (under 12 months) and those in which the underlying asset has low value, such option has been adopted by the Group. Likewise, the Group has opted to recognize as consideration for the right of use, the amount of Ps. 15,661 as lease liabilities. The commitments under operating leases reported in our consolidated financial statements as of June 30, 2019, amounted to Ps. 17,381 (such difference mainly corresponds to the effect of the discount from future payments and the excluded short-term contracts).

Modification to IAS 28 “Investment in associates and joint ventures”

In accordance with the amendment to IAS 28, an entity shall implement the provisions of IFRS 9 to Long-term Investments that are essentially part of the entity's net investment in the associate or in the joint venture according to the definitions of said standard. The provisions of IFRS 9 shall apply to such investments with respect to the participation in the losses of an associate or a joint venture, as well as with respect to the recognition of the impairment of an investment in an associate or joint venture. In addition, when applying IFRS 9 to such long-term investments, the entity will make it prior to the adjustments made to the carrying amount of the investment in accordance with IAS 28.

The Group opted for an accounting policy where the currency translation adjustments arising from these loans are recorded as part of other comprehensive income.

F-15

The effect on retained earnings as of July 1, 2019 arising from the initial adoption of IFRS 16 and IAS 28 is as follows:

	07.01.2019
	Implementación NIIF 16	Implementación IAS 28	Total
ASSETS
Non- Current Assets
Investment<br>properties	459	-	459
Right-of-use<br>assets	15,205	-	15,205
Investments<br>in associates and joint ventures	-	(2,131)	(2,131)
Trade<br>and other receivables	87	-	87
Total Non-Current Assets	15,751	(2,131)	13,620
Current assets	-	-	-
Income<br>tax and MPIT credit	18	-	18
Trade<br>and other receivables	(183)	-	(183)
Group<br>of assets held for sale	3,360	-	3,360
Total current assets	3,195	-	3,195
TOTAL ASSETS	18,946	(2,131)	16,815
SHAREHOLDERS’ EQUITY	-	-	-
Capital and reserves attributable to equity holders of the<br>parent	-	-	-
Retained<br>earnings	(201)	(1,205)	(1,406)
Total capital and reserves attributable to equity holders of the<br>parent	(201)	(1,205)	(1,406)
Non-controlling<br>interest	-	(926)	(926)
TOTAL SHAREHOLDERS’ EQUITY	(201)	(2,131)	(2,332)
LIABILITIES	-	-	-
Non-Current Liabilities	-	-	-
Lease<br>liabilities	11,435	-	11,435
Total Non-Current Liabilities	11,435	-	11,435
Current Liabilities	-	-	-
Lease<br>liabilities	4,225	-	4,225
Trade<br>and other payables	(96)	-	(96)
Group<br>of liabilities held for sale	3,583	-	3,583
Total Current Liabilities	7,712	-	7,712
TOTAL LIABILITIES	19,147	-	19,147
TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES	18,946	(2,131)	16,815

F-16

Standards and amendments not yet adopted by the Group:

Standards<br>and amendment	Description	Date<br>of mandatory adoption for the Group in the year ended<br>on
Covid-19- related lease concessions – Amendments to IFRS<br>16	As a result of the<br>COVID-19 pandemic, lessees have been granted lease concessions.<br>Such concessions may take a variety of forms, including forgiveness<br>or deferral of rental payments. In May 2020, the IASB amended IFRS<br>16 – Leases, whereby lessees are permitted to account for the<br>rent concessions as if they were not lease modifications. In<br>several cases, this will result in such concessions being accounted<br>for as variable rent payments within the period in which they are<br>granted.	06-30- 2021
Property, Plant and Equipment: Proceeds before Intended Use<br>– Amendments to IAS 16	Amendment to IAS 16<br>– Property, Plant and Equipment (PP&E) prohibits<br>deducting from the cost of an item of property, plant and equipment<br>any proceeds from selling items produced while the entity is<br>preparing the asset for its intended use. It also specifies that an<br>entity is “testing whether an item of PPE is functioning<br>properly” when it assesses its technical and physical<br>performance. The financial performance of the asset is not relevant<br>for such assessment.	06-30- 2023
Reference to the Conceptual Framework – Amendments to IFRS<br>3	Some minor<br>amendments were made to IFRS 3 Business combinations to update<br>references to the Conceptual Framework for financial information<br>and add an exception to the recognition principles for liabilities<br>and contingent liabilities within the scope of IAS 37, Provisions,<br>Contingent liabilities and contingent assets and interpretation 21<br>Levies. The amendments also confirm that contingent assets should<br>not be recognized on the acquisition date.	06-30-2023
Annual Improvements to IFRS 2018-2020	The following<br>improvements were issued in May 2020:<br><br><br>IFRS 9 Financial<br>instruments. The amendment clarifies which fees an entity includes<br>when it applies the ‘10 per cent’ test in assessing<br>whether to derecognize a financial liability.<br><br><br>IFRS 16 Leases. The<br>amendment to Illustrative Example 13 removes from the example the<br>illustration of the reimbursement of leasehold improvements by the<br>lessor in order to resolve any potential confusion regarding the<br>treatment of lease incentives that might arise.<br><br><br>IFRS 1 First-time<br>adoption of International Financial Reporting Standards: Entities<br>that have measured their assets and liabilities at the carrying<br>amounts in their parents´ books are also allowed to measure<br>cumulative translation differences using the amounts reported by<br>their parents. This amendment will also apply to associated and<br>joint ventures that have also taken the IFRS 1<br>exemption.<br><br><br>IAS 41: This<br>amendment removes the requirement for entities to exclude taxation<br>cash flows when measuring the fair value pursuant to IAS 41. This<br>amendment is intended to align with the requirement in the standard<br>to discount cash flows on a post-tax basis.	06-30-2023

The future adoption of these standards and amendments will not have a significant impact on the Group.

At the date of issuance of these consolidated financial statements, there are no other standards or modifications issued by the IASB that are not yet effective and are expected to have a significant effect on the Group.

2.3.

Scope of consolidation

(a)

Subsidiaries

Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The Group also analyzes whether there is control when it does not hold more than 50% of the voting rights of an entity, but does have capacity to define its relevant activities because of de-facto control.

The Group uses the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the Group. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date.

The Group recognizes any non-controlling interest in the acquiree on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest’s proportionate share of the acquirer’s net assets. The Group chooses the method to be used on a case-by-case base.

The excess of the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the identifiable net assets acquired is recorded as goodwill. If the total of consideration transferred, non-controlling interest recognized and previously held interest measured is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase,, the difference is recognized directly in the Statement of Income as “Bargain purchase gains”.

The Group conducts its business through several operating and investment companies, the main ones are listed below:

F-17

IRSA Inversiones y Representaciones Sociedad Anónima

			% of ownership interest held by the Group
Name of the entity	Country	Main activity	06.30.2020	06.30.2019	06.30.2018
IRSA's direct interest:
IRSA<br>CP (1)	Argentina	Real<br>estate	80.65%	83.80%	86.34%
E-Commerce<br>Latina S.A.	Argentina	Investment	100.00%	100.00%	100.00%
Efanur<br>S.A.	Uruguay	Investment	100.00%	100.00%	100.00%
Hoteles<br>Argentinos S.A.U.	Argentina	Hotel	100.00%	100.00%	80.00%
Inversora<br>Bolívar S.A.	Argentina	Investment	100.00%	100.00%	100.00%
Llao<br>Llao Resorts S.A. (2)	Argentina	Hotel	50.00%	50.00%	50.00%
Nuevas<br>Fronteras S.A.	Argentina	Hotel	76.34%	76.34%	76.34%
Palermo<br>Invest S.A.	Argentina	Investment	100.00%	100.00%	100.00%
Ritelco<br>S.A.	Uruguay	Investment	100.00%	100.00%	100.00%
Tyrus<br>S.A.	Uruguay	Investment	100.00%	100.00%	100.00%
U.T.<br>IRSA y Galerias Pacifico (2)	Argentina	Investment	50.00%	50.00%	50.00%
IRSA CP's direct interest:
Arcos<br>del Gourmet S.A.	Argentina	Real<br>estate	90.00%	90.00%	90.00%
Emprendimiento<br>Recoleta S.A.	Argentina	Real<br>estate	53.68%	53.68%	53.68%
Fibesa<br>S.A. (3)	Argentina	Real<br>estate	100.00%	100.00%	100.00%
Panamerican<br>Mall S.A.	Argentina	Real<br>estate	80.00%	80.00%	80.00%
Shopping<br>Neuquén S.A.	Argentina	Real<br>estate	99.95%	99.95%	99.92%
Torodur<br>S.A.	Uruguay	Investment	100.00%	100.00%	100.00%
EHSA	Argentina	Investment	70.00%	70.00%	70.00%
Centro<br>de Entretenimiento La Plata	Argentina	Real<br>estate	100.00%	100.00%	100.00%
Pareto<br>S.A.	Argentina	design<br>and software development	69.69%	69.69%	-
La<br>Malteria	Argentina	Real<br>estate	-	100.00%	-
Tyrus S.A.'s direct interest:
DFL<br>and DN BV	Bermuda’s<br>/ Netherlands	Investment	97.04%	96.46%	91.57%
I<br>Madison LLC	USA	Investment	-	-	-
IRSA<br>Development LP	USA	Investment	-	-	-
IRSA<br>International LLC	USA	Investment	100.00%	100.00%	100.00%
Jiwin<br>S.A.	Uruguay	Investment	100.00%	100.00%	100.00%
Liveck<br>S.A. (7)	Uruguay	Investment	100.00%	100.00%	100.00%
Real<br>Estate Investment Group V LP (REIG V)	Bermuda’s	Investment	-	100.00%	100.00%
Real<br>Estate Strategies LLC	USA	Investment	100.00%	100.00%	100.00%
Efanur S.A.'s direct interest:
Real<br>Estate Investment Group VII LP (REIG VII)	Bermuda’s	Investment	100.00%	100.00%	100.00%
DFL's and DN BV's direct interest:
IDB<br>Development Corporation Ltd.	Israel	Investment	100.00%	100.00%	100.00%
Dolphin<br>IL Investment Ltd.	Israel	Investment	100.00%	100.00%	100.00%
DIL's direct interest:
Discount<br>Investment Corporation Ltd. (4)	Israel	Investment	83.72%	83.77%	76.57%
IDBD's direct interest:
IDB<br>Tourism (2009) Ltd.	Israel	Tourism<br>services	100.00%	100.00%	100.00%
IDB<br>Group Investment Inc	Israel	Investment	100.00%	100.00%	100.00%
DIC's direct interest:
Property<br>& Building Corporation Ltd.	Israel	Real<br>estate	72.40%	68.80%	64.40%
Cellcom<br>Israel Ltd. (5)	Israel	Telecommunications	46.20%	44.10%	43.14%
Elron<br>Electronic Industries Ltd.	Israel	Investment	61.06%	61.06%	50.30%
Bartan<br>Holdings and Investments Ltd.	Israel	Investment	55.68%	55.68%	55.68%
Epsilon<br>Investment House Ltd.	Israel	Investment	68.75%	68.75%	68.75%
Mehadrin<br>Ltd (8)	Israel	Agricultural	43.75%	-	-
PBC's direct interest:
Gav-Yam<br>Bayside Land Corporation Ltd. (6)	Israel	Real<br>estate	-	51.70%	51.70%
Ispro<br>The Israeli Properties Rental Corporation Ltd.	Israel	Real<br>estate	100.00%	100.00%	100.00%
Matam<br>- Scientific Industries Center Haifa Ltd.	Israel	Real<br>estate	50.10%	50.10%	50.10%
Hadarim<br>Properties Ltd.	Israel	Real<br>estate	100.00%	100.00%	100.00%
Property<br>& Building (Commercial Centers) Ltd.	Israel	Real<br>estate	100.00%	100.00%	100.00%
PBC<br>USA Investments Inc	USA	Real<br>estate	100.00%	100.00%	100.00%

(1) Includes interest held through E-Commerce Latina S.A. and Tyrus S.A..

(2)

The Group has consolidated the investment in Llao Llao Resorts S.A. and UT IRSA and Galerías Pacífico considering its equity interest and a shareholder agreement that confers it majority of votes in the decision-making process.

(3) Includes interest held through Ritelco S.A. and Torodur S.A.

(4) Includes Tyrus' equity interest.

(5)

DIC considers it exercises effective control over Cellcom because DIC is the group with the higher percentage of votes (48.5%) vis-à-vis other shareholders, also taking into account the historic voting performance in the Shareholders’ Meetings, as well as the evaluation of the holdings of the remaining shareholders, which are highly atomized.

(6)

Control was lost in September 2019. See Note 4.C.

(7)

Includes Tyrus’ and IRSA S.A.’s equity interests.

(8)

DIC considers that it exercises control because DIC is the group with the higher percentage of votes (43.75%) vis-à-vis other shareholders that are highly atomized.

Except for the aforementioned items the percentage of votes does not differ from the stake.

The Group takes into account both quantitative and qualitative aspects in order to determine which non-controlling interests in subsidiaries are considered significant.

(b)

Changes in ownership interests in subsidiaries without change of control

Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions – i.e., as transactions with the owners in their capacity as owners. The recorded value corresponds to the difference between the fair value of the consideration paid and/or received and the relevant share acquired and/or transferred of the carrying value of the net assets of the subsidiary.

(c)

Disposal of subsidiaries with loss of control

F-18

When the Group ceases to have control any retained interest in the entity is re-measured at its fair value at the date when control is lost, with changes in carrying amount recognized in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognized in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognized in other comprehensive income are reclassified to profit or loss.

(d)

Associates

Associates are all entities over which the Group has significant influence but not control, usually representing an interest between 20% and at least 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting, except as otherwise indicated as explained below. Under the equity method, the investment is initially recognized at cost, and the carrying amount is increased or decreased to recognize the investor’s share of the profit or loss of the investee after the date of acquisition. The Group’s investment in associates includes goodwill identified on acquisition.

As of each year-end or upon the existence of evidence of impairment, a determination is made as to whether there is any objective indication of impairment in the value of the investments in associates. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the Associates and its carrying value and recognizes the amount adjacent to "Share of profit / (loss) of associates and joint ventures " in the Statement of Income and Other Comprehensive Income.

Profit and losses resulting from transactions between the Group and the associate are recognized in the Group's financial statements only to the extent of the interests in the associates of the unrelated investor. Unrealized losses are eliminated unless the transaction reflects signs of impairment of the value of the asset transferred. The accounting policies of associates are modified to ensure uniformity within Group policies.

Note 8 includes summary financial information and other information of the Group's associates.

The Group takes into account quantitative and qualitative aspects to determine which investments in associates are considered significant.

(e)

Joint arrangements

Joint arrangements are arrangements of which the Group and other party or parties have joint control bound by a contractual arrangement. Under IFRS 11, investments in joint arrangements are classified as either joint ventures or joint operations depending on the contractual rights and obligations each investor has rather than the legal structure of the joint arrangement. A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. The Group has assessed the nature of its joint arrangements and determined them to be joint ventures.

Investments in joint ventures are accounted for under the equity method. Under the equity method of accounting, interests in joint ventures are initially recognized in the Consolidated Statements of Financial Position at cost and adjusted thereafter to recognize the Group’s share of post-acquisition profits or losses and other comprehensive income in the Statements of Income and Other Comprehensive Income.

The Group determines at each reporting date whether there is any objective evidence that the investment in a joint ventures is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the joint venture and its carrying value and recognizes such difference in "Share of profit / (loss) of associates and joint ventures" in the Statements of Income.

F-19

2.4.

Segment information

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision-Maker (“CODM”), responsible for allocating resources and assessing performance. The operating segments are described in Note 6.

2.5.

Foreign currency translation

(a)

Functional and presentation currency

Items included in the Financial Statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The Consolidated Financial Statements are presented in Argentine Pesos, which is the Group’s presentation currency.

(b)

Transactions and balances in foreign currency

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities nominated in foreign currencies are recognized in the profit or loss for the year.

Foreign exchange gains and losses are presented in the Statement of Income within other financial income, as appropriate, unless they have been capitalized.

(c)

Group companies

The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

(i)

assets, liabilities and goodwill for each Statement of Financial Position presented are translated at the closing rate at the date of that financial position;

(ii)

income and expenses for each Statement of Comprehensive Income are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and

(iii)

all resulting exchange differences are recognized in the Statement of Comprehensive Income.

The accounting policy of the Group consists in accounting for the translation difference of its subsidiaries by the “step-by-step” method according to IAS 21.

2.6.

Investment properties

Investment properties are those properties owned by the Group that are held either to earn long-term rental income or for capital appreciation, or both, and that are not occupied by the Group for its own operations. Investment property also includes property that is being constructed or developed for future use as investment property. The Group also classifies as investment properties land whose future use has not been determined yet. The Group’s investment properties primarily comprise the Group’s portfolio of shopping malls and offices, certain property under development and undeveloped land.

Where a property is partially owner-occupied, with the rest being held for rental income or capital appreciation, the Group accounts for the portions separately. The portion that is owner-occupied is accounted for as property, plant and equipment under IAS 16 “Property, Plant and Equipment” and the portion that is held for rental income or capital appreciation, or both, is treated as investment properties under IAS 40 “Investment Properties”.

Investment properties are measured initially at cost. Cost comprises the purchase price and directly attributable expenditures, such as legal fees, certain direct taxes, commissions and in the case of properties under construction, the capitalization of financial costs.

For properties under development, capitalization of costs includes not only financial costs, but also all costs directly attributable to works in process, from commencement of construction until it is completed and property is in condition to start operating.

F-20

Direct expenses related to lease contract negotiation (such as payment to third parties for services rendered and certain specific taxes related to execution of such contracts) are capitalized as part of the book value of the relevant investment properties and amortized over the term of the lease.

Borrowing costs associated with properties under development or undergoing major refurbishment are capitalized. The finance cost capitalized is calculated using the Group’s weighted average cost of borrowings after adjusting for borrowings associated with specific developments. Where borrowings are associated with specific developments, the amount capitalized is the gross interest incurred on those borrowings less any investment income arising on their temporary investment. Finance cost is capitalized from the commencement of the development work until the date of practical completion. Capitalization of finance costs is suspended if there are prolonged periods when development activity is interrupted. Finance cost is also capitalized on the purchase cost of land or property acquired specifically for redevelopment in the short term but only where activities necessary to prepare the asset for redevelopment are in progress.

After initial recognition, investment property is carried at fair value. Investment property that is being redeveloped for continuing use as investment property or for which the market has become less active continues to be measured at fair value. Investment properties under construction are measured at fair value if the fair value is considered to be reliably determinable. On the other hand, properties under construction for which the fair value cannot be determined reliably, but for which the Group expects it to be determinable when construction is completed, are measured at cost less impairment until the fair value becomes reliably determinable or construction is completed, whichever is earlier.

Fair values are determined differently depending on the type of property being measured.

Generally, for the Operations Center in Argentina, fair value of office buildings and land reserves is based on active market prices, adjusted, if necessary, for differences in the nature, location or condition of the specific asset. If this information is not available, the Group uses alternative valuation methods, such as recent prices on less active markets or discounted cash flow projections. Fair value of office building for the Operations Center in Israel is based on discounted cash flow projections.

The fair value of the Group’s portfolio of Shopping Malls is based on discounted cash flow projections. This method of valuation is commonly used in the shopping mall industry in the region where the Group conducts its operations.

The fair value of office buildings in the Operations Center in Israel is based on discounted cash flow projections.

As required by CNV 576/10 Resolution, valuations are performed as of the financial position date by accredited externals appraisers who have recognized professional qualifications and have recent experience in the location and category of the investment property being valued. These valuations form the basis for the carrying amounts in the Consolidated Financial Statements. The fair value of investment property reflects, among other things, rental income from current leases and other assumptions market participants would make when pricing the property under current market conditions.

Subsequent expenditures are capitalized to the asset’s carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the Group and the cost can be measured reliably. All other repairs and maintenance costs are expensed when incurred. When part of an investment property is replaced, the carrying amount of the replaced part is derecognized.

Changes in fair values are recognized in the Statement of Income under the line item “Net gain or (loss) from fair value adjustment of investment properties”.

Asset transfers, including assets classified as investments properties which are reclassified under other items or vice-versa, may only be carried out when there is a change of use evidenced by: a) commencement of occupation of real property by the Group, where investment property is transferred to property, plant and equipment; b) commencement of development activities for sale purposes, where investment property is transferred to property for sale; c) the end of Group occupation, where it is transferred from property, plant and equipment to investment properties; or d) commencement of an operating lease transaction with a third party, where properties for sale are transferred to investment property. The value of the transfer is the one that the property had at the time of the transfer and subsequently is valued in accordance with the accounting policy related to the item.

The Group may sell its investment property when it considers that such property no longer forms part of the lease business. The carrying value immediately prior to the sale is adjusted to the transaction price, and the adjustment is

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recorded in the Statement of Income and other comprehensive income in the line “Net gain from fair value adjustments of investment properties”.

Investment properties are derecognized when they are disposed of or when they are permanently withdrawn from use and no future economic benefits are expected to arise from their disposals. The disposal of properties is recognized when the significant risks and rewards have been transferred to the buyer. As for unconditional agreements, proceeds are accounted for when title to property passes to the buyer and the buyer intends to make the respective payment. In the case of conditional agreements, disposal are accounted for when the conditions the agreements is subject to has been met.. Where consideration receivable for the sale of the properties is deferred, it is discounted to present value. The difference between the discounted amount and the amount receivable is treated as interest income and recognized over the period using the effective interest method. Direct expenses related to the sale are recognized in the line "Other operating results, net" in the Statement of Income at the time they are incurred.

2.7.

Property, plant and equipment

This category primarily comprises, buildings or portions of a building used for administrative purposes, machines, computers, and other equipment, motor vehicles, furniture, fixtures and fittings and improvements to the Group’s corporate offices.

The Group has also several hotel properties. Based on the respective contractual arrangements with hotel managers and / or given their direct operators nature, the Group considers it retains significant exposure to the variations in the cash flows of the hotel operations, and accordingly, hotels are treated as owner-occupied properties and classified under "Property, plant and equipment".

All property, plant and equipment (“PPE”) is stated at acquisition cost less accumulated depreciation and impairment, if any. The acquisition cost includes expenditures which are directly attributable to the acquisition of the items. For properties under development, capitalization of costs includes not only financial costs, but also all costs directly attributable to works in process, from commencement of construction until it is completed and the property is in conditions to start operating.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. Such costs may include the cost of improvements and replacement of parts as they meet the conditions to be capitalized. The carrying amount of those parts that are replaced is derecognized. Repairs and maintenance are charged as incurred in the Statement of Income. Depreciation, based on a component approach, is calculated using the straight-line method to allocate the cost over the assets’ estimated useful lives.

The remaining useful life as of June 30, 2020 is as follows:

Buildings<br>and facilities	Between<br>5 and 50 years
Machinery<br>and equipment	Between<br>3 and 24 years
Communication<br>networks	Between<br>4 and 20 years
Others	Between<br>3 and 25 years

As of each fiscal year-end, an evaluation is performed to determine the existence of indicators of any decrease in recoverable value or useful life of assets. If there are any indicators, the recoverable amount and/or residual useful life of impaired asset(s) is estimated, and an impairment adjustment is made, if applicable. As of each fiscal year-end, the residual useful life of assets is estimated and adjusted, if necessary. The book amount of an asset is reduced to its recoverable value if the book value greater than its estimated recoverable value.

Gains from the sale of these assets are recognized when the significant risks and rewards have transferred to the buyer. This will normally take place on unconditional exchange, generally when legal title passes to the buyer and it is probable that the buyer will pay. For conditional exchanges, sales are recognized when these conditions are satisfied. Gains and losses on disposals are determined by comparing the proceeds net of direct expenses related to such sales, with the carrying amount as of the date of each transaction. Gains and losses from the disposal of property, plant and equipment items are recognized within “Other operating results, net” in the Statement of Income.

When assets of property, plant and equipment are transferred to investment property, the difference between the value at cost transferred and the fair value of the investment property is allocated to a reserve within equity.

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2.8.

Leases

Leases are recorded pursuant to IFRS 16. The Group recognizes an asset for the right of use and a liability at present value with respect to those contracts that meet the definition of lease agreements according to IFRS 16. For the prior periods’ leases were classified at their inception as either operating or finance leases based on the economic substance of the agreement.

A Group company is the lessor:

Properties leased out to tenants under operating leases are included in “Investment Properties” in the Statement of Financial Position. See Note 2.25 for the recognition of rental income.

A Group company is the lessee:

The Group acquires certain specific assets (especially machinery, computer equipment and real property exploitation concessions) under leases pursuant to IFRS 16. Assets so acquired are recorded as an asset at the present value of the minimum future lease payments. Capitalized lease assets are depreciated over the shorter of the estimated useful life of the assets and the lease term. The finance charges are charged over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Leases falling within the IFRS 16 exemption, where the Group acts as lessee are charged to results at the time they accrue. They mainly include contracts for less than one year and/or for non-material items.

2.9.

Intangible assets

(a)

Goodwill

Goodwill represents future economic benefits arising from assets that are not capable of being individually identified and separately recognized by the Group on an acquisition. Goodwill is initially measured as the difference between the fair value of the consideration transferred, plus the amount of non-controlling interest in the acquisition and, in business combinations achieved in stages, the acquisition-date fair value of the previously held equity interest in the acquisition; and the net fair value of the identifiable assets and liabilities assumed on the acquisition date.

Goodwill is not amortized but tested for impairment at each fiscal year-end, or more frequently if there is an indication of impairment. For the purpose of impairment testing, assets are grouped at the lowest levels for which there are separately identifiable cash flows, referred to as cash-generating units (“CGU”). In order to determine whether any impairment loss should be recognized, the book value of CGU or CGU groups is compared against its recoverable value. Net book value of CGU and CGU groups include goodwill and assets with limited useful life (such as, investment properties, property, plant and equipment, intangible assets and working capital).

If the recoverable amount of the CGU is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata on the basis of the carrying amount of each asset in the unit. Impairment losses recognized for goodwill are not reversed in a subsequent period.

The recoverable amount of a CGU is the higher of the fair value less costs-to-sell and the value-in-use. The fair value is the amount at which a CGU may be sold in a current transaction between unrelated, willing and duly informed parties. Value-in-use is the present value of all estimated future cash flows expected to be derived from CGU or CGU groups.

Goodwill is assigned to the Group's cash generating units on the basis of operating segments. The recoverable amount of a cash generating unit is determined based on fair value calculations. These calculations use the price of the CGU assets and they are compared with the book values plus the goodwill assigned to each cash generating unit.

No material impairment was recorded as a result of the analysis performed. (Note 12)

(b)

Computer software

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Acquired computer software licenses are capitalized on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortized over their estimated useful lives of three years. Costs associated with maintaining computer software programs are recognized as an expense as incurred.

(c)

Branding and client relationships

This relates to the fair value of brands and client relationships arising at the time of the business combination with IDBD. They are subsequently valued at cost, less the accumulated amortization or impairment. Client relationships have an average twelve-year useful life, while one of the brands have an indefinite useful life and the other ten-year useful life.

(d)

Right to receive future units under barter agreements

The Group also enters into barter transactions where it normally exchanges undeveloped parcels of land with third-party developers for future property to be constructed on the bartered land. The Group generally receives monetary assets as part of the transactions and/or a right to receive future units to be constructed by developers. Such rights are initially recognized at cost (which is the fair value of the land assigned) and are not adjusted later, unless there is any sign of impairment.

At each year-end, the Group reviews the carrying amounts of its intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any of such signs exists, the recoverable amount of the asset is estimated in order to determine the extent, if any, of the impairment loss. For intangible assets with indefinite useful lives, the Group annually reviews the existence of an impairment, or more frequently if signs of impairment are identified.

2.10.

Trading properties

Trading properties comprises those properties either intended for sale or in the process of construction for subsequent sale. Trading properties are carried at the lower of cost and net realizable value. Where there is a change in use of investment properties evidenced by the commencement of development with a view to sale, the properties are reclassified as trading properties at cost, which is the carrying value at the date of change in use. They are subsequently carried at the lower of cost and net realizable value. Cost comprises all costs of purchase, costs of conversion and other costs incurred in bringing the trading properties to their present location and condition.

2.11.

Inventories

Inventories include assets held for sale in the ordinary course of the Group's business activities, assets in production or construction process for sale purposes, and materials, agricultural products, supplies or other assets held for consumption in the process of producing sales and/or services.

Inventories are measured at the lower of cost or net realizable value.

Net realizable value is the estimated selling price in the ordinary course of business less selling expenses. It is determined on an ongoing basis, taking into account the product type and aging, based on the accumulated prior experience with the useful life of the product. The Group periodically reviews the inventory and its aging and books an allowance for impairment, as necessary.

The cost of consumable supplies, materials and other assets is determined using the weighted average cost method, the cost of inventories of mobile phones, related accessories and spare parts is priced under the moving average method, and the cost of the remaining inventories is priced under the first in, first out (FIFO) method.

Cost comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Inventories and materials are initially recognized at cash price, and the difference being charged as finance cost.

2.12.

Financial instruments

The Group classifies financial assets in the following categories: those to be measured subsequently at fair value, and those to be measured at amortized cost. This classification depends on whether the financial asset is an equity investment or a debt investment.

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Debt investments

A debt investment is classified at amortized cost only if both of the following criteria are met: (i) the objective of the Group’s business model is to hold the asset to collect the contractual cash flows; and (ii) the contractual terms give rise on specified dates to cash derived solely from payments of principal and interest due on the principal outstanding. The nature of any derivatives embedded in the debt investment are considered in determining whether the cash derives solely from payment of principal and interest due on the principal outstanding and are not accounted for separately.

If either of the two criteria mentioned in the previous paragraph is not met, the debt instrument is classified at fair value through profit or loss. The Group has not designated any debt investment as measured at fair value through profit or loss to eliminate or significantly reduce an accounting mismatch. Changes in fair values and gains from disposal of financial assets at fair value through profit or loss are recorded within “Financial results, net” in the Statement of Income.

Equity investments

All equity investments, which are neither subsidiaries nor associate companies nor joint venture of the Group, are measured at fair value. Equity investments that are held for trading are measured at fair value through profit or loss. For all other equity investments, the Group can make an irrevocable election at initial recognition to recognize changes in fair value through other comprehensive income rather than profit or loss. The Group decided to recognize changes in fair value of equity investments through changes in profit or loss.

At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value though profit or loss are expensed in the Statement of Income.

In general, the Group uses the transaction price to ascertain the fair value of a financial instrument on initial recognition. In the other cases, the Group records a gain or loss on initial recognition only if the fair value of the financial instrument can be supported by other comparable transactions observable in the market for the same type of instrument or if based on a technical valuation that only inputs observable market data. Unrecognized gains or losses on initial recognition of a financial asset are recognized later on, only to the extent they arise from a change in factors (including time) that market participants would consider upon setting the price.

Gains/losses on debt instruments measured at amortized cost and not identified for hedging purposes are charged to income where the financial assets are derecognized or an impairment loss is recognized, and during the amortization process under the effective interest method. The Group is required to reclassify all affected debt investments when and only when its business model for managing those assets changes.

The Group assesses at the end of each reporting period the expected losses for impairment of a financial asset or group of financial assets measured at amortized cost. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) can be reliably estimated. The amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate.

Financial assets and liabilities are offset, and the net amount reported in the statement of financial position, when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis, or realize the asset and settle the liability simultaneously.

2.13.

Derivative financial instruments and hedging activities and options

Derivative financial instruments are initially recognized at fair value. The method of recognizing the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged.

The Group manages exposures to various risks using hedging instruments that provide coverage. The Group does not use derivative financial instruments for speculative purposes. To date, the Group has used put and call options, foreign currency future and forward contracts and interest rate swaps, as appropriate.

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The Group’s policy is to apply hedge accounting where it is permissible under IFRS 9, practical to do so and its application reduces volatility, but transactions that may be effective hedges in economic terms may not always qualify for hedge accounting under IFRS 9.

The fair values of financial instruments that are traded in active markets are computed by reference to market prices. The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. The Group uses its judgment to select a variety of methods and make assumptions that are mainly based on market conditions existing at the end of each reporting year.

2.14.

Groups of assets and liabilities held for sale

The groups of assets and liabilities are classified as held for sale where the Group is expected to recover their value by means of a sale transaction (rather than through use) and where such sale is highly probable. Groups of assets and liabilities held for sale are valued at the lower of their net book value and fair value less selling costs.

2.15.

Trade and other receivables

Trade receivables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method.

An allowance for doubtful accounts is recorded based on the expected loss of the receivables portfolio. Indicators of doubtful accounts include significant financial distress of the debtor, the debtor potentially filing a petition for reorganization or bankruptcy, or any event of default or past due account.

In the case of larger non-homogeneous receivables, the impairment provision is calculated on an individual basis.

The Group collectively evaluates smaller-balance homogeneous receivables for impairment. For that purpose, they are grouped on the basis of similar risk characteristics, and account asset type, collateral type, past-due status and other relevant factors are taken into account.

The amount of the allowance is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The carrying amount of the asset is reduced through the use of a separate account, and the amount of the loss is recognized in the Statements of Income within “Selling expenses”. Subsequent recoveries of amounts previously written off are credited against “Selling expenses” in the Statements of Income.

2.16.

Other assets

Other assets are recognized initially at cost and subsequently measured at the acquisition cost or the net realizable value, the lower.

2.17.

Trade and other payables

Trade payables are initially recognized at fair value and subsequently measured at amortized cost using the effective interest method.

2.18.

Borrowings

Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized as finance cost over the period of the borrowings using the effective interest method.

2.19.

Provisions

Provisions are recognized when: (i) the Group has a present (legal or constructive) obligation as a result of past events; (ii) it is probable that an outflow of resources will be required to settle the obligation; and (iii) a reliable estimate of the amount of the obligation can be made. Provisions are not recognized for future operating losses.

The Group bases its accruals on up-to-date developments, estimates of the outcomes of the matters and legal counsel´s experience in contesting, litigating and settling matters. As the scope of the liabilities becomes better defined or

F-26

more information is available, the Group may be required to change its estimates of future costs, which could have a material adverse effect on its results of operations and financial condition or liquidity.

Provisions are measured at the present value of the cash flows expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provisions due to passage of time is recognized in the Statements of Income.

2.20.

Irrevocable right of use of the capacity of underwater communication lines

Transactions carried out to acquire an irrevocable right of use of the capacity of underwater communication lines are accounted for as service contracts. The amount paid for the rights of use of the communication lines is recognized as “Prepaid expenses” under trade and other receivables, and is amortized over a straight-line basis during the period set forth in the contract (including the option term), which is the estimated useful life of such capacity.

2.21.

Employee benefits

(a)

Defined contribution plans

The Group operates a defined contribution plan, which is a pension plan under which the Group pays fixed contributions into a separate entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current year or prior periods. The contributions are recognized as employee benefit expense in the Statements of Income in the fiscal year they are due.

(b)

Termination benefits

Termination benefits are payable when employment is terminated by the Group before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group recognizes termination benefits when it is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal or as a result of an offer made to encourage voluntary termination as a result of redundancy.

(c)

Bonus plans

The Group recognizes a liability and an expense for bonuses based on a formula that takes into consideration the profit attributable to the Company’s shareholders after certain adjustments. The Group recognizes a provision where contractually obliged or where there is a past practice that has created a constructive obligation.

(d)

Defined benefit plans

The Group’s net obligation concerning defined benefit plans are calculated on an individual basis for each plan, estimating the future benefits employees have gained in exchange for their services in the current and prior periods. The benefit is disclosed at its present value, net of the fair value of the plan assets. Calculations are made on an annual basis by a qualified actuary.

(e)

Share-based payments

The fair value of share-based payments is measured at the date of grant. The Group measures the fair value using the valuation technique that it considers to be the most appropriate to value each class of award. Methods used may include Black-Scholes calculations or other models as appropriate. The valuations take into account factors such as non-transferability, exercise restrictions and behavioral considerations.

The fair value of the share-based payment is expensed and charged to income under the straight-line method over the vesting period in which the right to the equity instrument becomes irrevocable (“vesting period”); such value is based on the best available estimate of the number of equity instruments expected to vest. Such estimate is revised if subsequent information available indicates that the number of equity instruments expected to vest differs from original estimates.

(f)

Other long-term benefits

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The net obligations of IDBD, DIC and its subsidiaries concerning employee long-term benefits, other than retirement plans, is the amount of the minimum future benefits employees have gained in exchange for their services in the current and prior periods. These benefits are discounted at their present values.

2.22.

Current income tax, deferred income tax and minimum presumed income tax

Tax expense for the year comprises the charge for tax currently payable and deferred income. Income tax is recognized in the statements of income, except to the extent that it relates to items recognized in other comprehensive income or directly in equity, in which case, the tax is also recognized in other comprehensive income or directly in equity, respectively.

Current income tax expense is calculated on the basis of the tax laws enacted or substantially enacted at the date of the Statements of Financial Position in the countries where the Company and its subsidiaries operate and generate taxable income. The Group periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. The Group establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is recognized, using the deferred tax liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the Consolidated Financial Statements. However, deferred tax liabilities are not recognized if they arise from the initial recognition of goodwill; deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the date of the Statements of Financial Position and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.

Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. Deferred income tax is provided on temporary differences arising on investments in subsidiaries, joint ventures and associates, except for deferred income tax liabilities where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

The Group is able to control the timing of dividends from its subsidiaries and hence does not expect taxable profit. Hence, deferred tax is recognized in respect of the retained earnings of overseas subsidiaries only if at the date of the Statements of Financial Position, dividends have been accrued as receivable a binding agreement to distribute past earnings in future has been entered into by the subsidiary or there are sale plans in the foreseeable future.

Entities in Argentina are subject to the Minimum Presumed Income Tax (“MPIT”). Pursuant to this tax regime, an entity is required to pay the greater of the income tax or the MPIT. The MPIT provision is calculated on an individual entity basis at the statutory asset tax rate of 1% and is based upon the taxable assets of each company as of the end of the year, as defined by Argentine law. Any excess of the MPIT over the income tax may be carried forward and recognized as a tax credit against future income taxes payable over a 10-year period. When the Group assesses that it is probable that it will use the MPIT payment against future taxable income tax charges within the applicable 10-year period, recognizes the MPIT as a current or non-current receivable, as applicable, within “Trade and other receivables” in the Statements of Financial Position.

The minimum presumed income tax was repealed by Law N ° 27,260 in its article 76 for the periods that begin as of January 1,2020.

Regarding the above mentioned, considering Instruction No. 2 of the Federal Administration of Public Revenues (AFIP), it is not appropriate to record the provision of the above mention tax, in the event that accounting and tax losses occur.

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2.23.

Cash and cash equivalents

Cash and cash equivalents include cash on hand, deposits held with banks, and other short-term highly liquid investments with original maturities of three months or less. Bank overdrafts are not included.

2.24.

Revenue recognition

The group identifies contracts with customers and evaluates the goods and services committed therein to determine performance obligations and their classification between performance obligations that are satisfied at a given time or over time.

Revenue from satisfaction of performance obligations at a given time is recognized when the client obtains control of the committed asset or service considering whether there is a right to collection, if the client has the physical possession, if the client has the legal right and if they have the transferred the risks and benefits.

Additionally and in accordance with IFRS 15, the Group recognizes revenues over time from the sales of real estate developments in which there is no alternative use for the asset and the Group has the right to demand payment of the contract. When these conditions are not met, the income is recognized at the time of delivery or deed.

Revenue from satisfaction of performance obligations over time for real estate developments is recognized by measuring progress towards compliance with the obligation when it can be measured reliably. For this measurement, the Group uses the resourced method, that is, the effort consumed by the entity and determines the percentage of progress based on the estimate of the total development costs.

The Group's revenue is recognized at the probable value of the consideration to which it will be entitled in exchange for transferring the products or services to the customer which is not expected to suffer significant changes.

●

Rental and services

Shopping malls portfolio

Revenues derived from business activities developed in the Group’s shopping malls mainly include rental income under operating leases, admission rights, commissions and revenue from several complementary services provided to the Group’s lessees.

Rental income from shopping mall, admission rights and commissions, are recognized in the Statements of Income on a straight-line basis over the term of the leases. When lease incentives are granted, they are recognized as an integral part of the net consideration for the use of the property and are therefore recognized on the same straight-line basis.

Contingent rents, i.e. lease payments that are not fixed at the inception of a lease, are recorded as income in the periods in which they are known and can be determined. Rent reviews are recognized when such reviews have been agreed with tenants.

The Group’s lease contracts also provide that common area maintenance charges and collective promotion funds of the Group’s shopping malls are borne by the corresponding lessees, generally on a proportionally basis. These common area maintenance charges include all expenses necessary for various purposes including, but not limited to, the operation, maintenance, management, safety, preservation, repair, supervision, insurance and enhancement of the shopping malls. The lessor is responsible for determining the need and suitability of incurring a common area expense. The Group makes the original payment for such expenses, which are then reimbursed by the lessees. The Group considers that it acts as a principal in these cases. Service charge income is presented separately from property operating expenses. Property operating expenses are expensed as incurred.

●

Rental and services

Offices and other rental properties

Rental income from offices and other rental properties include rental income from offices leased out under operating leases, income from services and expenses recovery paid by tenants.

Rental income from offices and other rental properties is recognized in the Statements of Income on a straight-line basis over the term of the leases. When lease incentives are granted, they are recognized as an integral part of the net consideration for the use of the property and are therefore recognized on the same straight-line basis.

A substantial portion of the Group’s leases require the tenant to reimburse the Group for a substantial portion of operating expenses, usually a proportionate share of the allocable operating expenses. Such property operating expenses include necessary expenses such as property operating, repairs and maintenance, security, janitorial, insurance,

F-29

landscaping, leased properties and other administrative expenses, among others. The Group manages its own rental properties. The Group makes the original payment for these expenses, which are then reimbursed by the lessees. The Group considers that it acts as a principal in these cases. The Group accrues reimbursements from tenants as service charge revenue in the period the applicable expenditures are incurred and is presented separately from property operating expenses. Property operating expenses are expensed as incurred.

●

Revenue from communication services and sale of communication equipment (presented within discontinued operations)

Revenue derived from the use of communication networks by the Group, including mobile phones, Internet services, international calls, fixed line calls, interconnection rates, roaming service rates and television, are recognized when the service is provided, proportionally to the extent the transaction has been realized, and provided all other criteria have been met for revenue recognition.

Revenue from the sale of mobile phone cards is initially recognized as deferred revenue and then recognized as revenue as they are used or upon expiration, whichever takes place earlier.

A transaction involving the sale of equipment to a final user normally also involves a service sale transaction. In general, this type of sale is performed without a contractual obligation by the client to consume telephone services for a minimum amount over a predetermined period. As a result, the Group records the sale of equipment separately of the performance obligations and recognizes revenue pursuant to the transaction value upon delivery of the equipment to the client. Revenue from telephone services is recognized and accounted for as they are provided over time. When the client is bound to make a minimum consumption of services during a predefined period, the contract formalizes a transaction of several elements and, therefore, revenue from the sale of equipment is recorded at an amount that should not exceed its fair value, and is recognized upon delivery of the equipment to the client and provided the criteria for recognition are met. The Group ascertains the fair value of individual elements, based on the price at which it is normally sold, after taking into account the relevant discounts.

Revenue derived from long-term contracts is recognized at the present value of future cash flows, discounted at market rates prevailing on the transaction date. Any difference between the original credit and its net present value is accounted for as interest income over the credit term.

● Revenue from agricultural products

Revenue from agricultural products is recognized when the product is delivered and at the time all other criteria for revenue recognition have been met.

●

Revenue from supermarkets

Revenue from the sale of goods in the ordinary course of business is recognized at the fair value of the consideration collected or receivable, net of returns and discounts. When the credit term is short and financing is that typical in the industry, consideration is not discounted. When the credit term is longer than the industry’s average, in accounting for the consideration, the Group discounts it to its net present value by using the client’s risk premium or the market rate. The difference between the fair value and the nominal amount is accounted for under financial income. If discounts are granted and their amount can be measured reliably, the discount is recognized as a reduction of revenue.

Revenues from supermarkets have been recognized in discontinued operations. See Note 4.d.

2.25.

Cost of sales

The cost of sales, includes the acquisition costs and the operational and management costs for shopping malls held by the Group as part of its real estate investments.

The Group’s cost of sales in relation to the supply of communication services (which is presented within discontinued operations in these financial statements) mainly includes the costs to purchase equipment, salaries and related expenses, service costs, royalties, ongoing license dues, interconnection and roaming expenses, cell tower lease costs, depreciation and amortization expenses and maintenance expenses directly related to the services provided.

The cost of sales of supermarkets (which is presented within discontinued operations in these financial statements), includes the acquisition costs for the products less discounts granted by suppliers, as well as all expenses associated with storing and handling inventories and is classified as discontinued operations.

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2.26.

Cost of borrowings and capitalization

The costs for general and specific loans that are directly attributable to the acquisition, construction or production of suitable assets for which a prolonged period is required to place them in the conditions required for their use or sale, are capitalized as part of the cost of those assets until the assets are substantially ready for use or sale. The general loan costs are capitalized according to the average debt rate of the Group. Foreign exchange differences for loans in foreign currency are capitalized if they are considered an adjustment to interest costs. The interest earned on the temporary investments of a specific loan for the acquisition of qualifying assets are deducted from the eligible costs to be capitalized. The rest of the costs from loans are recognized as expenses in the period in which they are incurred.

2.27.

Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.

When any Group’s subsidiary purchases the Company’s equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders until the shares are cancelled or reissued. When such ordinary shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and related income tax effects, is included in equity.

Instruments issued by the Group that will be settled by the Company delivering a fixed number of its own equity instruments in exchange for a fixed amount of cash or another financial asset are classified as equity.

2.28.

Comparability of information

The balances as of June 30, 2019 and 2018 that are disclosed for comparative purposes were restated in accordance with IAS 29, see Note 2.1. Certain items from prior fiscal years have been reclassified for consistency purposes. See Note 4. d. for the loss of control of Shufersal and Note 4.c for the loss of control of Gay-Yam.

During the years ended June 30, 2020, 2019 and 2018, the Argentine Peso suffered a decrease in its value compared to the US dollar and other currencies close to 66%, 45% and 73%, respectively, which has an impact on the comparability of the figures exposed in the financial statements, mainly due to the exposure to the exchange rate of our Income and costs of “offices” segment, and our assets and liabilities, nominated in foreign currency of the Argentine operations center, the aforementioned devaluation also had an effect on the total balances of the Israel operations center.

Significant judgments, key assumptions and estimates

Not all of these significant accounting policies require management to make subjective or complex judgments or estimates. The following is intended to provide an understanding of the policies that management considers critical because of the level of complexity, judgment or estimations involved in their application and their impact on the Consolidated Financial Statements. These judgments involve assumptions or estimates in respect of future events. Actual results may differ from these estimates.

F-31

Estimation	Main<br>assumptions	Potential<br>implications	Main<br>references
Business<br>combination - Allocation of acquisition prices	Assumptions<br>regarding timing, amount of future revenues and expenses, revenue<br>growth, expected rate of return, economic conditions, discount<br>rate, among other.	Should the<br>assumptions made be inaccurate, the recognized combination may not<br>be correct.	Note 4 –<br>Acquisitions and dispositions
Recoverable amounts<br>of cash-generating units (even those including goodwill),<br>associates and assets.	The discount rate<br>and the expected growth rate before taxes in connection with<br>cash-generating units.<br><br><br>The discount rate<br>and the expected growth rate after taxes in connection with<br>associates.<br><br><br>Cash flows are<br>determined based on past experiences with the asset or with similar<br>assets and in accordance with the Group’s best factual<br>assumption relative to the economic conditions expected to<br>prevail.<br><br><br>Business continuity<br>of cash-generating units.<br><br><br>Appraisals made by<br>external appraisers and valuators with relation to the<br>assets’ fair value, net of realization costs (including real<br>estate assets).	Should any of the<br>assumptions made be inaccurate, this could lead to differences in<br>the recoverable values of cash-generating units.	Note 10 –<br>Property, plant and equipment<br><br><br>Note 12 –<br>Intangible assets
Control, joint<br>control or significant influence	Judgment relative<br>to the determination that the Group holds an interest in the shares<br>of investees (considering the existence and influence of<br>significant potential voting rights), its right to designate<br>members in the executive management of such companies (usually the<br>Board of directors) based on the investees’ bylaws; the<br>composition and the rights of other shareholders of such investees<br>and their capacity to establish operating and financial policies<br>for investees or to take part in the establishment<br>thereof.	Accounting<br>treatment of investments as subsidiaries (consolidation) or<br>associates (equity method)	Note<br>2.3
Estimated useful<br>life of intangible assets and property, plant and<br>equipment	Estimated useful<br>life of assets based on their conditions.	Recognition of<br>accelerated or decelerated depreciation by comparison against final<br>actual earnings (losses).	Note 10 –<br>Property, plant and equipment<br><br><br>Note 12 –<br>Intangible assets
Fair value<br>valuation of investment properties	Fair value<br>valuation made by external appraisers and valuators. See Note<br>9.	Incorrect valuation<br>of investment property values	Note 9 –<br>Investment properties
Income<br>tax	The Group estimates<br>the income tax amount payable for transactions where the<br>Treasury’s Claim cannot be clearly determined.<br><br><br>Additionally, the<br>Group evaluates the recoverability of assets due to deferred taxes<br>considering whether some or all of the assets will not be<br>recoverable.	Upon the improper<br>determination of the provision for income tax, the Group will be<br>bound to pay additional taxes, including fines and compensatory and<br>punitive interest.	Note 21 –<br>Taxes
Allowance for<br>doubtful accounts	A periodic review<br>is conducted of receivables risks in the Group’s<br>clients’ portfolios. Bad debts based on the expiration of<br>account receivables and account receivables’ specific<br>conditions.	Improper<br>recognition of charges / reimbursements of the allowance for bad<br>debt.	Note 15 –<br>Trade and other receivables
Level 2 and 3<br>financial instruments	Main assumptions<br>used by the Group are:<br><br><br>● Discounted<br>projected income by interest rate<br><br><br>● Values determined<br>in accordance with the shares in equity funds on the basis of its<br>Financial Statements, based on fair value or investment<br>assessments.<br><br><br>● Comparable market<br>multiple (EV/GMV ratio).<br><br><br>● Underlying<br>asset price (Market price); share price volatility (historical) and<br>market interest-rate (Libor rate curve).	Incorrect<br>recognition of a charge to income / (loss).	Note 14 –<br>Financial instruments by category
Probability<br>estimate of contingent liabilities.	Whether more<br>economic resources may be spent in relation to litigation against<br>the Group; such estimate is based on legal advisors’<br>opinions.	Charge / reversal<br>of provision in relation to a claim.	Note 19 –<br>Provisions
Qualitative<br>considerations for determining whether or not the replacement of<br>the debt instrument involves significantly different<br>terms	The entire set of<br>characteristics of the exchanged debt instruments, and the economic<br>parameters represented therein:<br><br><br>Average lifetime of<br>the exchanged liabilities; Extent of effects of the debt terms<br>(linkage to index; foreign currency; variable interest) on the cash<br>flows from the instruments.	Classification of a<br>debt instrument in a manner whereby it will not reflect the change<br>in the debt terms, which will affect the method of accounting<br>recording.	Note 14 –<br>Financial instruments by category

4. Acquisitions and disposals

Operations Center in Argentina

Distribution of dividends in kind

On October 30, 2019, the General Ordinary Shareholders´ Meeting approved the distribution of a dividend in kind for an equivalent of Ps. 517 (representing Ps. 0.89 per share and equivalent of Ps. 634 at current currency as of June 30, 2020) payable in IRSA CP shares. For distribution, the quoted price of the IRSA CP share was taken as of October 29, 2019, which was Ps. 221 per share. The number of shares distributed amounts to 2,341,463. This transaction was accounted for in equity as a decrease in the net equity attributable to the parent company for an amount of Ps.543. The stake of the Group in IRSA CP as at year-end is 80.65%.

On October 29, 2018 a General Ordinary and Extraordinary Shareholder’s meeting was held, whereby the distribution of a dividend in kind for an equivalent of Ps. 1,967 payable in shares of IRSA CP S.A. was resolved (representing Ps 2.63 per share and equivalent of Ps. 2,810 at current currency as of June 30, 2020). For the distribution, the value of IRSA CP share was taken as of October 26, 2018, which was Ps. 237 per share. The number of shares distributed amounted to 6,418,182. This transaction was accounted for as an equity transaction generating a decrease in the net equity attributable to the parent for Ps. 1,651.

Sale of IRSA CP floors

On June 9, 2020, IRSA CP executed the assignment and transfer the right to sign a title deed, with delivery of possession, with respect to two medium-height floors in the tower under construction known as “200 Della Paolera”, located in the Catalinas district of the Autonomous City of Buenos Aires, covering a total area of approximately 2,430 sq. meters and 16 parking lots, located in the building.

F-32

The transaction price was set at approximately Ps. 1,264 million (USD 16.9 million), which has already been fully paid.

Condor Merger Agreement

On July 19, 2019, Condor executed a merger agreement. As per the contractual terms, each common share of Condor, with a par value of USD 0.01 per share, shall be cancelled prior to the merger and converted into the right to receive an amount in cash equivalent of USD 11.10 per common share. Additionally, pursuant to the terms and conditions of the merger agreement, each convertible Class E share shall be automatically cancelled and shall be converted into the right to receive an amount in cash equivalent of USD 10.00 per share.

The closing of the transaction, scheduled for March 23, 2020, has not yet taken place.

Condor is currently discussing with NexPoint Hospitality Trust the potential amendments to restructure the previously reported acquisition by merger of the company. No assurances may be given with respect to the outcome of such discussions. The Company will continue to review the options and reserves all its rights and remedies under the original merger agreement.

As of the date of presentation of these financial statements, the Group has 2,197,023 common shares and 325,752 Series E shares.

TGLT – Recapitalization Agreement

On August 8, 2019, we entered into certain arrangements with TGLT S.A. (“TGLT”) providing for collaboration in TGLT’s financial restructuring and recapitalization. We participated in the recapitalization agreement whereby TGLT committed: (i) to make a public offer to subscribe Class A preferred shares at a subscription price of USD 1.00 per TGLT share; (ii) to make a public offering of new Class B preferred shares which may be subscribed by (a) the exchange for ordinary shares of TGLT, at an exchange ratio of one Class B preferred share for every 6.94 ordinary shares of the Company and / or (b) the exchange for convertible notes, at an exchange ratio of a Class B preferred share for each USD 1.00 of convertible notes (including accumulated and unpaid interests under the existing convertible notes); and (iii) to grant an option to subscribe new Class C preferred shares in a public offer for cash to be carried out if: (a) the public offer of Class A and Class B preferred shares are consummated and (b) a minimum number of option holders have exercised that option at a subscription price per Class C preferred share of USD 1.00 (or its equivalent in pesos).

Likewise, IRSA CP signed as a holder of convertible notes of TGLT an agreement for deferment of payment of interest payable as of February 15, 2019 and August 15, 2019 until November 8, 2019 and an option agreement which may be subscribed Class C preferred shares.

Finally, supporting the recapitalization plan, IRSA CP signed with TGLT a subscription commitment for Class A preferred shares under Class A Public Offer to make a contribution in kind of shares of the company La Maltería SA, 100% of its ownership, for an amount up to USD 24 million and promised to exchange its convertible negotiable obligations into preferred Class B shares.

In turn, on November 22, 2019, TGLT held a bondholders of convertible negotiable obligations meeting in order to consider the modification of different clauses of the indenture in force at that date, and in line with what was agreed in the recapitalization agreement , IRSA CP voted in favor of the modifications.

Under the agreements described above, the successful consummation of the offer by TGLT, and having reached the thresholds of consent of the holders of convertible notes of TGLT, on December 11, 2019, the Company concluded the envisaged process in the recapitalization agreement and related documents through the subscription of preferred Class A shares, integrating them in kind through the contribution of the shares of the company La Maltería SA, 100% of their ownership and, likewise, proceeded to the exchange of the convertible note - including deferred interest and accrued interest from August 15, 2019 to December 11, 2019 - in preferred Class B shares.

During the fiscal year 2020, preferred shares were converted into ordinary shares, which is why IRSA CP begin to have significant influence, considering TGLT S.A. as an associate company.

E) Sale of Tarshop

On February 14, 2019, IRSA CP sold its entire stake in Tarshop to BHSA. Following this acquisition, BHSA became the holder of 100% of the capital stock of said company.

F-33

The loss recognized for this transaction was approximately Ps. 191.

F) Purchase of equity interest in HASAU (owner of Libertador Hotel)

On February 28, 2019, the Group reported the acquisition, from an unrelated third party, of the twenty percent (20%) of HASAU for an amount of US$ 1.2. As a result of this acquisition, IRSA holds 100% of HASAU's share capital. This transaction was accounted for as an equity transaction generating a decrease in the net equity attributable to the controlling shareholders by Ps. 3 restated at the date of these financial statements.

Operations Center in Israel

Partial sale of Clal

Sales and Swap transactions

On May 1, 2017, August 30, 2017, January 1, 2018, May 3, 2018, August 30, 2018, and January 2, 2019, continuing with the instructions given by the Israel Capital Market, Insurance and Savings Commission, IDBD sold 5% of its stake in Clal on each occasion and 4.5% on the last one respectively, with a subsequent swap transaction with a 2- year expiration term for each transaction. The consideration for the transactions amounted to approximately NIS 944.5, which is partially restricted according to these agreements until the swap expires. These transactions did not meet the de-recognition criteria so the Group maintains the asset as “Financial assets available for sale” and accounted for the loans as a financial liability.

On December 16, 2019, Clal made a public capital increase for 12,066,000 shares at a price of NIS 53.87 per share. IDBD did not take part in such transaction.

Additionally, on that date, IDBD sold 200,000 Clal shares at a price of NIS 53.95 per share, representing 0.3% of the new capital stock.

On December 18, 2019, IDBD sold 617,017 Clal shares at an average price of NIS 53.77 per share, representing 0.9% of the issued capital stock.

Furthermore, a swap transaction carried out by IDBD involving 2,771,309 shares expired in December 2019. The closing price was NIS 52.25 per share.

A swap transaction involving 751,000 shares expired within the January-March 2020 period. The closing price was NIS 45.09 per share.

Other sales agreements

On May 2, 2019, continuing with the instructions given by the Israel Capital Market, Insurance and Savings Commission, IDBD entered into sales agreements with two unrelated parties (the “Buyers”), according to which each of the Buyers will acquire Clal shares representing 4.99% of its share capital at a cash price of NIS 47.7 per share (approximately Ps. 648 per share). In addition, they were granted an option to acquire additional Clal shares for approximately 3% of the issued capital, for a period of 120 days (subject to obtaining a holding permit) at a price of NIS 50 per share.

Additionally on the same day, IDBD also entered into an agreement with a third unrelated buyer (the "Additional Buyer"), according to which the Additional Buyer will receive an option from IDBD, valid for a period of 50 days, to acquire approximately 4.99% of Clal shares (and not less than 3%), at a price of NIS 47.7 per share (approximately Ps. 648 per share). Subject to the exercise of the option by the Additional Buyer, the price will be paid 10% in cash and the rest through a loan that will be provided to the Additional Buyer by IDBD and / or by a related entity and / or by a banking corporation and / or financial institution, under the agreed conditions.

The aforementioned agreements include, among others, a commitment by the Buyers and the Additional Buyer to not sell the shares acquired during an agreed period of 24 months. It is clarified that each of the Buyers and the Additional Buyer have declared and committed to IDBD that there are no agreements or understandings between them regarding the joint ownership of Clal shares that are subject to the aforementioned agreements.

The total amount of Clal shares that can be acquired by the three buyers mentioned above, to the extent that the three agreements are completed and the options are exercised, represents approximately 18% of Clal's share capital.

F-34

As of the date of these financial statements, all previously agreed sales transactions have been consummated.

On June 28 and July 6, 2020, IDBD sold 4,791,618 Clal shares held by it through swap transactions, at an average price of approximately NIS 30 per share, representing 7.1% of the capital stock.

Additionally, on September 3, 2020, IDBD sold 2,376,527 Clal shares at an average price of NIS 32,475 per share, for a total amount of NIS 77.2 million, representing 3.5% of Clal´s capital stock.

As a result of the aforementioned transactions, as of this date, IDBD´s holding in Clal represents 4.99% of its capital stock. It no longer has swap transactions and, accordingly, it is no longer considered as Clal interested party within the context of Israel´s Securities Regulations.

On February 4, 2020, Dolphin furnished to the financial entities through which IDB carried out the swap transactions of Clal shares in August and November 2018, guarantees of approximately NIS 11 million, which shall be part of the committed deposits that IDB undertook as part of the terms of such transactions. Furthermore, on February 18, it deposited further guarantees in the amount of NIS 9 million. Following the last sale described above, the guarantees were returned.

B) Distribution of dividends in kind by PBC. Purchase of Mehadrin shares and acquisition of control

On December 10, 2019, PBC distributed its entire holding in Mehadrin as a dividend in kind and, as a result, DIC holds, directly, a 31.4% interest in Mehadrin. As a consequence of such transaction, Mehadrin became an associate.

In January and February 2020, DIC purchased approximately 8.8% of Mehadrin’s capital stock, for a total cost of NIS 39 (approximately Ps. 767); therefore, the interest in Mehadrin has increased from 31.4% to approximately 40.2%. Such acquisitions resulted in DIC obtaining control over Mehadrin, by the end of February, as it has the majority votes while the remaining equity interests are distributed among several shareholders.

Additionally, from April to June 2020, DIC purchased an additional 3.5% interest in Mehadrin for NIS 14 (approximately Ps. 298), increasing its interest to 43.7%.

Following the taking of control, as mentioned above, since March 9, 2020, the Group has consolidated the operations of this company.

Below is a detail of incorporated net assets and income from such transaction. The process for the assessment of the fair value of incorporated net assets has been significantly completed as of June 30, 2020 and it is expected to conclude in the first months of the fiscal year ending June 30, 2021. However, the Management does not foresee any material adjustments to the incorporated net assets detailed below

F-35

IRSA Inversiones y Representaciones Sociedad Anónima

	06.30.2020
Fair value of identifiable assets and assumed<br>liabilities:
Investment<br>properties	244
Property,<br>plant and equipment	6,576
Intangible<br>assets	61
Investments<br>in associates and joint ventures	2,023
Restricted<br>assets	177
Income<br>tax and MPIT credit	157
Trade<br>and other receivables	10,993
Right-of-use<br>assets	4,327
Derivative<br>financial instruments	40
Inventories	2,695
Borrowings	(7,927)
Deferred<br>income tax liabilities	(945)
Trade<br>and other payables	(5,144)
Lease<br>liabilities	(2,281)
Provisions	(60)
Employee<br>benefits	(138)
Salaries<br>and social security liabilities	(197)
Income<br>tax and MPIT liabilities	(19)
Cash<br>and cash equivalents	2,812
Total identifiable net assets	13,394
Non-controlling<br>interest	(8,013)
Bargain<br>purchase gain (*)	(405)
Previously<br>held interest	4,209
Cash<br>and cash equivalents	767
Total consideration	4,976

(*) Included in “Other operating income, net”

Partial sale of equity interests in Gav-Yam

On July 1, 2019, PBC sold approximately 11.7% of Gav-Yam´s capital stock by private agreements. Following this transaction, PBC´s interest in Gav-Yam decreased from 51.7% to 40%. The consideration received for such sale was NIS 46 (approximately $ 6,949, ).

Furthermore, on September 1, 2019, PBC sold an additional 5.14%, approximately, of Gav-Yam shares and, as a result, PBC´s interest in Gav-Yam decreased from 40% to 34.9%. As a consequence of such sales, PBC forfeited its right to nominate the majority members of the Board of Directors and to appoint or remove key management members. Accordingly, PBC has lost its control over Gav-Yam and has de-consolidated such investment since such date.

Below are the details of the sale:

	09.30.2019
Cash<br>received	15,353
Remeasurement<br>of the fair value of the remaining investment	34,627
Total	49,980
Net<br>assets written off including business key	(30,281)
Gain<br>from sales of a net tax subsidiary, net of taxes (*)	19,699

(*) Said results are disclosed within discontinued operations, under the caption "other operating results, net"

F-36

IRSA Inversiones y Representaciones Sociedad Anónima

The following table details the net assets disposed:

	09.30.2019
Investment<br>properties	167,776
Property,<br>plant and equipment	1,141
Intangible<br>assets	3,532
Right-of-use<br>assets	45
Investments<br>in associates and joint ventures	4,733
Restricted<br>assets	407
Trade<br>and other receivables	1,246
Investments<br>in financial assets	14,581
Trading<br>properties	167
Income<br>tax credit	205
Cash<br>and cash equivalents	11,436
TOTAL ASSETS	205,269
Borrowings	102,749
Lease<br>liabilities	45
Deferred<br>income tax liabilities	22,770
Trade<br>and other payables	2,582
Employee<br>benefits	23
Salaries<br>and social security liabilities	68
Income<br>tax and MPIT liabilities	135
TOTAL LIABILITIES	128,372
Non-controlling<br>interest	46,616
Net assets written off including goodwill	30,281

On January 12, 2020, PBC received a communication from the Ministry of Justice of Israel questioning the loss of control of Gav-Yam in September 2019 and, accordingly, raising its objections to observance by PBC of the concentration law in Israel.

In May 2020, PBC agreed to sell approximately 4.96% of Gav-Yam´s capital stock to an unrelated third party. Therefore, its interest in Gav-Yam decreased from 34.9% to 29.9% after the consummation of the sales transaction and it was thus able to overcome the questioning from the Ministry of Justice of Israel.

D) Changes in equity interest in Shufersal and loss of control

On December 24, 2017, DIC sold Shufersal shares, decreasing its stake from 53.30% to 50.12%. The consideration with respect to the sale of the shares amounted to NIS 169.5 (equivalent to Ps. 2,312). Both transactions were accounted for as an equity transaction generating an increase in equity attributable to the controlling company for

Ps. 783 and Ps. 1,051, respectively.

On June 16, 2018, DIC announced the sale of a percentage of its stake in Shufersal to institutional investors which was completed on June 21, 2018. The percentage sold amounted to 16.56% and the net amount of the consideration was approximately NIS 848 (equivalent to Ps. 14,905), consequently DIC lost control of Shufersal, so the Group deconsolidated the subsidiary at that date.

Below are the details of the sale:

	06.30.2018
Cash<br>received	15,368
Remediation<br>of the fair value of the remaining interest	31,512
Total	46,880
Net<br>assets disposed including goodwill	(20,350)
Gain<br>from the sale of a subsidiary, net of taxes (*)	26,530

(*) Includes Ps. 6,304 as a result of the sale and Ps. 20,227 as a result of the re-measurement at the fair value of the new stake, both included in discontinued operations.

The following table details the net assets disposed:

F-37

	06.30.2018
Investment<br>properties	11,123
Property,<br>plant and equipment	69,420
Intangible<br>assets	17,443
Investments<br>in associates and joint ventures	960
Restricted<br>assets	219
Trade<br>and other receivables	35,005
Investments<br>in financial assets	301
Derivative<br>financial instruments	55
Inventories	15,023
Cash<br>and cash equivalents	13,354
TOTAL ASSETS	162,903
Borrowings	51,010
Deferred<br>income tax liabilities	6,722
Trade<br>and other payables	57,387
Provisions	1,103
Employee<br>benefits	3,027
Salaries<br>and social security liabilities	5,729
Income<br>tax and MPIT liabilities	18
TOTAL LIABILITIES	124,996
Non-controlling<br>interest	17,557
Net assets disposed including goodwill	20,350

Additionally, on November 27, 2018, DIC sold 7.5% of the total shares of Shufersal to institutional investors for a consideration of NIS 416 million (approximately Ps. 7,822). After this transaction, the group holding went down to 26.02% approximately. The profit for this sale was NIS 27 (approximately Ps. 463). See Note 34 regarding the sale of the entire equity interest.

E) Interest increase in Cellcom

On June 27, 2018, Cellcom increased its capital stock in consideration for a gross amount of NIS 280 (approximately Ps. 5,294). DIC participated in such increase and disbursed NIS 145.9 (approximately Ps. 2,757) for 6,314,200 shares.

Furthermore, in December 2018, DIC exercised 1.5 million options (Series 1) held by it in Cellcom, for an amount of NIS 31 million (approximately Ps. 567). In December 2019 and February 2020, DIC purchased Cellcom shares for NIS 19 million (approximately Ps. 384). As a consequence of the exercise of the options and the acquisition, DIC interest in Cellcom increased by 0.9%. These transactions were accounted for as equity transactions generating a decrease in the net equity attributable to the controlling company by Ps. 246, .

Additionally, on December 5, 2019, Cellcom increased its capital stock with the participation of DIC that purchased almost 50% of the shares issued. The consideration paid amounted to NIS 307 (approximately Ps. 6,471 as of such date). Cellcom issued an aggregate number of 30,600,000 common shares, 7,038,000 Series 3 Options and 6,426,000 Series 4 Options at a price of NIS 1.021 per unit (each unit will represent 100 common shares, 23 Series 3 Options and 21 Series 4 Options).

Following the participation of DIC in such issue, the interest percentage was 46.2% of the issued capital stock and approximately 48.5% of the Company´s voting rights (directly and by means of agreements executed with other shareholders of the Company).

F) Sale of IDBT subsidiary

On August 14, 2018, IDBT´s Board of Directors approved an agreement to sell 50% of a subsidiary of IDBT, entrusted with tourism operations for Israir, for a total price of NIS 26 (approximately Ps. 545), which transaction was consummated on December 31, 2018. Such transaction does not affect the intention to sell IDBT in its entirety. The Group evaluated maintaining the criteria to classify the investment as a discontinued operation pursuant to IFRS 5.

G) Agreement to sell plot of land in USA

In July 2019, a subsidiary of IDBG signed an agreement to sell a plot of land next to the Tivoli project in Las Vegas for a consideration of US$ 18 million. The sales transaction was not completed at the date of these financial statements.

F-38

H) Sale of Real Estate

In October 2018, a subsidiary of Ispro signed an agreement for the sale of all of its rights in real estate area of approximately 29 dunams (equivalent to 1 hectare), in which there are 12,700 square meters in the northern industrial zone in Yavneh for NIS 86 million, (equivalent to Ps.6,932). Such agreement has already been executed.

I) Interest increase in PBC

In December 2018 and February 2019, DIC acquired an additional 4.40% of PBC in the market for NIS 81 million (equivalent to Ps.1,545). The present transactions were accounted for as equity transactions, generating an increase in net equity attributable to the controlling company for Ps. 109. See Note 35

J) Repurchase of own shares by DIC

In December 2018, DIC's Board of Directors approved a plan to buy back DIC shares, for a period of one year, until December 2020 amounting up to NIS 120 million (approximately Ps.2,689). Acquisition of securities shall be carried out in accordance with market opportunities, dates, prices and quantities, as determined by the management of DIC, in such a way that in any event, the public holdings shall be, at any time, at least 10.1% of the total issued share capital of DIC.

Since December 2018 as of the fiscal year-end date, DIC acquired 12.2 million shares for a total amount of NIS 119 million (approximately Ps. 2,196). Additionally, in December 2018, minority shareholders of DIC exercised DIC Series 6 options for an amount of NIS 9 million (approximately Ps.187).

As a result of the operations described above, the participation of Dolphin IL in DIC increased approximately by 5.4%. The present transactions were accounted for as equity transactions generating a decrease in the equity attributable to the controlling company for Ps. 143.

K) Interest increase in Elron

In November and December 2018, DIC acquired an additional 9.2% of Elron in the market for NIS 31 million (equivalent to Ps. 600). Additionally, in June 2020, Elron issued shares to the market and third parties unrelated to the Group acquired an interest in the Company in consideration for NIS 26. These transactions were accounted for as an equity transaction generating a decrease in the equity attributable to the controlling company for Ps. 69.

L) Interest increase in DIC

On July 5, 2018, Tyrus acquired 2,062,000 of DIC’s shares in the market for a total amount of NIS 20 million (equivalent to Ps. 490), which represent 1.35% of the Company’s outstanding shares at such date. As a result of this transaction, the Group’s equity interest has increased from 76.57% to 77.92%. This transaction was accounted for as an equity transaction generating an increase in the net equity attributable to the controlling company by Ps. 50.

Considering was what mentioned in note 4.G. above, the stake of the Group in DIC was approximately 83.77% at June 30, 2020, considering the repurchase of treasury shares.

M) Early payment of Ispro bonds

In August 2019, the Audit Committee and the Board of Directors of Ispro approved the full advance payment of (Tranche B) corporate bonds, traded on the TASE. The aggregate amount was NIS 131 (approximately Ps. 2,654). The prepayment of these corporate bonds caused Ispro to become a reporting company for TASE and not a listed company.

N) Agreement for the sale of Ispro

On January 26, 2020, PBC executed an agreement for the sale of all Ispro shares and the rights over the loans granted by the shareholders to ISPRO in consideration for NIS 885. The consummation of the transaction is subject to approval by the Commissioner of Competition pursuant to the Law on Economic Competition, which must be given within a term of 150 days following the execution of the agreement. For this reason, the Group has reclassified the assets and liabilities as available for sale.

At the time of the execution of the agreement, the buyer made a deposit of NIS 15 into an account and undertook to deposit an additional amount of NIS 40, following completion of the due diligence process.

F-39

On March 23, 2020, the buyer contacted PBC and requested a postponement of the dates specified in the sales agreement. PBC informed the buyer that its request would be considered without detrimentally affecting PBC´s rights and obligations pursuant to the agreement. On March 26, 2020, that is, the date of completion of the due diligence process, the buyer defaulted on its obligation to deposit the second payment installment in an amount of NIS 40, into a trust account.

PBC demanded the buyer to cure its default and immediately deposit the second payment installment and proceed with the closing of the transaction in accordance with its terms, without this entailing a limitation on its rights and obligations and any consideration available for the buyer pursuant to the agreement and under the law, until April 20, 2020. Since non-compliance was not occurred until April 20, 2020, the agreement was terminated.

In April 2020, PBC executed an agreement with another buyer for NIS 800 involving all ISPRO shares and the rights over the loans granted by PBC to ISPRO. As a consequence of the agreement for the sale of ISPRO´s shares, the Group has reclassified net assets totaling Ps. 16,657 as “Group of Assets available for Sale”. Income to be recognized at the time of the consummation of the transaction shall be NIS 47 (equivalent of Ps. 906 as of the current fiscal year-end).

O) Cellcom- Golan Telecom Agreement

In February 2020, Cellcom, the shareholders of Golan Telecom and Golan Telecom executed a binding memorandum of understanding for the acquisition of Golan Telecom entire capital stock, for a total amount of NIS 590, payable in 2 installments (NIS 413 at the closing date of the transaction and NIS 177 within a term of 3 years following such closing date). Cellcom shall issue and deposit the Company´s shares for 8.2 million, with a trustee into a trust account (“Shares held in Trust”), as collateral.

The transaction provides for standard conditions and representations and is subject to a due diligence process to be performed by Cellcom and the relevant regulatory authorizations and approvals from material third parties. The parties shall carry out negotiations regarding a detailed agreement; however, they are bound to the memorandum of understanding, regardless of whether the agreement may be executed or not. In the event the conditions for the closing of the transaction were not satisfied before December 31, 2020, the memorandum of understanding or the detailed agreement, as applicable, shall be terminated.

See Note 35 for further information about the execution of the agreement and the grant of the respective approvals.

5. Financial risk management and fair value estimates

The Group's activities expose it to a variety of financial risks: market risk (including foreign currency risk, interest rate risk, indexing risk due to specific clauses and other price risks), credit risk, liquidity risk and capital risk. Within the Group, risk management functions are conducted in relation to financial risks associated to financial instruments to which the Group is exposed during a certain period or as of a specific date.

The general risk management policies of the Group seek both to minimize adverse potential effects on the financial performance of the Group and to manage and control the financial risks effectively. The Group uses financial instruments to hedge certain risk exposures when deemed appropriate based on its internal management risk policies, as explained below.

Given the diversity of characteristics corresponding to the business conducted in its operations centers, the Group has decentralized the risk management policies geographically based on its two operations centers (Argentina and Israel) in order to identify and properly analyze the various types of risks to which each subsidiary is exposed.

The Group’s principal financial instruments in the Operation Center in Argentina comprise cash and cash equivalents, receivables, payables, interest bearing assets and liabilities, other financial liabilities, other investments and derivative financial instruments. The Group manages its exposure to key financial risks in accordance with the Group’s risk management policies.

The Group’s management framework in the Operation Center in Argentina includes policies, procedures, limits and allowed types of derivative financial instruments. The Group has established a Risk Committee, comprising members of senior management and a member of Cresud’s Audit Committee (Parent Company of IRSA), which reviews and oversees management’s compliance with these policies, procedures and limits and has overall accountability for the identification and management of risk across the Group.

F-40

Given the diversity of the activities conducted by IDBD, DIC and its subsidiaries, and the resulting risks, IDBD and DIC manage the exposure to their own key financial risks and those of its wholly-owned subsidiaries (except for IDB Tourism) in conformity with a centralized risk management policy, with the non-wholly owned IDBD and DIC subsidiaries being responsible for establishing the risk policy, taking action to cover market risks and managing their activities in a decentralized way. Both IDBD and DIC as holding and each subsidiary are responsible for managing their own financial risks in accordance with agreed global guidelines. The Chief Financial Officers of each entity are responsible for managing the risk management policies and systems, the definition of hedging strategies, insofar as applicable and based on any restriction that may be apply as a result of financial debt, the supervision of its implementation and the answer to such restrictions. The management framework includes policies, procedures, limits and allowed types of derivative financial instruments.

This section provides a description of the principal risks that could have a material adverse effect on the Group’s strategy in each operations center, performance, results of operations and financial condition. The risks facing the businesses, set out below, do not appear in any particular order of potential materiality or probability of occurrence.

The analysis of sensitivities to market risks included below are based on a change in one factor while holding all other factors constant. In practice this is unlikely to occur, and changes in some of the factors may be correlated – for example, changes in interest rate and changes in foreign currency rates.

This sensitivity analysis provides only a limited, point-in-time view. The actual impact on the Group’s financial instruments may differ significantly from the impact shown in the sensitivity analysis.

(a)

Market risk management

The market risk is the risk of changes in the market price of financial instruments with which the Group operates. The Group’s market risks arise from open positions in foreign currencies, interest-bearing assets and liabilities and equity securities of certain companies, to the extent that these are exposed to market value movements. The Group sets limits on the exposure to these risks that may be accepted, which are monitored on a regular basis.

Foreign Exchange risk and associated derivative financial instruments

The Group publishes its Consolidated Financial Statements in Argentine pesos but conducts operations and holds positions in other currencies. As a result, the Group is exposed to foreign currency exchange risk through exchange rate movements, which affect the value of the Group’s foreign currency positions. Foreign exchange risk arises when future commercial transactions or recognized assets or liabilities are denominated in a currency that is not the entity’s functional currency.

The real estate, commercial and/or financial activities of the Group’s subsidiaries from the operations center in Argentina have the Argentine Peso as functional currency. An important part of the business activities of these subsidiaries is conducted in that currency, thus not exposing the Group to foreign exchange risk. Other Group's subsidiaries have other functional currencies, principally US Dollar. In the ordinary course of business, the Group, through its subsidiaries, transacts in currencies other than the respective functional currencies of the subsidiaries. These transactions are primarily denominated in US Dollars and New Israeli Shekel. Net financial position exposure to the functional currencies is managed on a case-by-case basis, partly by entering into foreign currency derivative instruments and/or by borrowings in foreign currencies, or other methods, considered adequate by the Management, according to circumstances.

Financial instruments are considered sensitive to foreign exchange rates only when they are not in the functional currency of the entity that holds them. The following table shows the net carrying amounts of the Company’s financial instruments nominated in US$ and NIS, broken down by the functional currencies in which the Company operates for the years ended June 30, 2020 and 2019. The amounts are presented in Argentine Pesos, the presentation currency of the Group:

Operations Center in Argentina

	Net monetary position (liability) / asset
Functional currency	June 30, 2020	June 30, 2019
	US$	US$
Argentine<br>Peso	(41,336)	(22,752)
Uruguayan<br>Peso	164	(295)
Total	(41,172)	(23,047)

F-41

The Group estimates that, other factors being constant, a 10% appreciation of the US Dollar against the respective functional currencies at year-end for the Operations Center in Argentina would result in a net additional loss before income tax for the years ended June 30, 2020 and 2019 for an amount of Ps. 1,612 and Ps. 2,304, respectively. A 10% depreciation of the US Dollar against the functional currencies would have an equal and opposite effect on the statements of income.

On the other hand, the Group also uses derivatives, such as future exchange contracts, to manage its exposure to foreign currency risk. As of June 30, 2020 and 2019 the Group has future exchange contracts pending for an amount of US$ 95 and US$ 22, respectively.

2) Operations Center in Israel

As of June 30, 2020 and 2019, the net position of financial instruments in US Dollars, which exposes the Group to the foreign currency risk amounts to Ps. (1,425) and Ps. (12,806), respectively. The Group estimates that, other factors being constant, a 10% appreciation of the US Dollar against the Israeli currency would increase loss before income tax for the year ended June 30, 2020 for an amount of Ps. 536 (Ps. 934 loss in 2019).

Interest rate risk

The Group is exposed to interest rate risk on its investments in debt instruments, short-term and long-term borrowings and derivative financial instruments.

The primary objective of the Group’s investment activities is to preserve principal while at the same time maximizing yields without significantly increasing risk. To achieve this objective, the Group diversifies its portfolio in accordance with the limits set by the Group. The Group maintains a portfolio of cash equivalents and short-term investments in a variety of securities, including both government and corporate obligations and money market funds.

The Group’s interest rate risk principally arises from long-term borrowings (Note 19). Borrowings issued at variable rates expose the Group to cash flow interest rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate risk.

As of June 30, 2020 and 2019, 95.2% and 94.1% of the Group’s long-term financial loans in this operation center have a fixed interest rate so that IRSA is not significantly exposed to the fluctuation risk of the interest rate.

1) Operations Center in Argentina

The Group manages this risk by maintaining an appropriate mix between fixed and floating rate interest bearing liabilities. These activities are evaluated regularly to determine that the Group is not exposed to interest rate fluctuations that could adversely impact its ability to meet its financial obligations and to comply with its borrowing covenants.

The Group occasionally manages its cash flow interest rate risk exposure by different hedging instruments, including but not limited to interest rate swap, depending on each particular case. For example, interest rate swaps have the economic effect of converting borrowings from floating rates to fixed rates or vice versa.

The interest rate risk policy is approved by the Board of Directors. Management analyses the Group’s interest rate exposure on a dynamic basis. Various scenarios are simulated, taking into consideration refinancing, renewal of existing positions and alternative financing sources. Based on these scenarios, the Group calculates the impact on profit and loss of a defined interest rate shift. The scenarios are run only for liabilities that represent the major interest-bearing positions. Trade payables are normally interest-free and have settlement dates within one year. The simulation is done on a regular basis to verify that the maximum potential loss is within the limits set by management.

Note 20 shows a breakdown of the Group’s fixed-rate and floating-rate borrowings per currency denomination and functional currency of the subsidiary that holds the loans for the fiscal years ended June 30, 2020 and 2019.

The Group estimates that, other factors being constant, a 1% increase in floating rates at year-end would increase net loss before income tax for the years ended June 30, 2020 and 2019 in the amount of Ps. 33.3 and Ps. 33.6, respectively. A 1% decrease in floating rates would have an equal and opposite effect on the Statement of Income.

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2) Operations Center in Israel

IDBD and DIC manage the exposure to the interest rate risk in a decentralized way and it is monitored regularly by different management offices in order to confirm that there are no adverse effects over their ability to meet their financial obligations and to comply with their borrowings covenants.

As of June 30, 2020 and 2019, the 99.4% and 97.1%, respectively, of the Group’s long-term financial borrowings in this operations center are at fixed interest rate, therefore, the Group is not significantly exposed to the interest rate fluctuation risk.

The Group estimates that, other factors being constant, a 1% increase in floating rates at year-end would increase net loss before income tax for the year ended June 30, 2020, in approximately Ps. 60 (approximately Ps. 150 in 2019). A 1% decrease in floating rates would have an equal and opposite effect on the Statement of Income.

Risk of fluctuations of the Consumer Price Index ("CPI") of Israel

The Operations Center in Israel has financial liabilities indexed by the Israeli CPI.

Net financial position exposure to the Israeli CPI fluctuations is managed in a decentralized way on a case-by-case basis, by entering into different derivative financial instruments, as the case may be, or by other methods, considered adequate by the Management, based on the circumstances.

As of June 30, 2020, 36.9% of the loans are affected by the evolution of the CPI. A 1% increase in the CPI would generate a loss of Ps. 1,112 (Ps.1,617 for 2019) and a decrease of 1% generates a profit of Ps. 1,135 (Ps.1,635 for 2019).

Other price risks

The Group is exposed to equity securities price risk or derivative financial instruments because of investments held in entities that are publicly traded, which were classified on the Consolidated Statements of Financial Position at “fair value through profit or loss”. The Group regularly reviews the prices evolution of these equity securities in order to identify significant movements.

As of June 30, 2020 and 2019 the total value of Group’s investments in shares and derivative financial instruments of public companies amounts to Ps. 20,869 and Ps. 8,595, respectively.

In the Operations Center in Israel the investment in Clal is classified on the Statements of Financial Position at “fair value through profit or loss” and represents the most significant IDBD’s exposure to price risk. Neither IDBD or DIC has used hedging against these risks (Note 13). IDBD and DIC regularly review the prices evolution of these equity securities in order to identify significant movements.

The Group estimates that, other factors being constant, a 10% decrease in quoted prices of equity securities and in derivative financial instruments portfolio at year-end would generate a loss before income tax for the year ended June 30, 2020, of Ps. 2,086 (Ps. 859 in 2019) for the Operations Center in Argentina and a loss before income tax for the year ended June 30, 2020, of Ps. 464 (Ps. 2,746 in 2019) for the Operations Center in Israel. An increase of 10% on these prices would have an equal and opposite effect in the Statement of Income.

(b) Credit risk management

The credit risk arises from the potential non-performance of contractual obligations by the parties, with a resulting financial loss for the Group. Credit limits have been established to ensure that the Group deals only with approved counterparties and that counterparty concentration risk is addressed and the risk of loss is mitigated. Counterparty exposure is measured as the aggregate of all obligations of any single legal entity or economic entity to the Group.

The Group is subject to credit risk arising from deposits with banks and financial institutions, investments of surplus cash balances, the use of derivative financial instruments and from outstanding receivables

In the Operations Center in Argentina, the credit risk is managed on a country-by-country basis. Each local entity is responsible for managing and analyzing the credit risk. In the Operations Center in Israel, under the policy established by IDBD’s board of directors, the management deposits excess cash in local banks which are not company creditors, in order to keep minimum risk values in cash balances.

F-43

The Group’s policy in each operations center is to manage credit exposure from deposits, short-term investments and other financial instruments by maintaining diversified funding sources in various financial institutions. All the institutions that operate with the Group are well known because of their experience in the market and high credit quality. The Group places its cash and cash equivalents, investments, and other financial instruments with various high credit quality financial institutions, thus mitigating the amount of credit exposure to any one institution. The maximum exposure to credit risk is represented by the carrying amount of cash and cash equivalents and short-term investments in the Statements of Financial Position.

1) Operations Center in Argentina

Trade receivables related to leases and services provided by the Group represent a diversified tenant base and account for 94.2% and 99.1% of the Group’s total trade receivables of the operations center as of June 30, 2020 and 2019, respectively. The Group has specific policies to ensure that rental contracts are transacted with counterparties with appropriate credit quality. The majority of the Group’s shopping mall, offices and other rental properties’ tenants are well recognized retailers, diversified companies, professional organizations, and others. Owing to the long-term nature and diversity of its tenancy arrangements, the credit risk of this type of trade receivables is considered to be low. Generally, the Group has not experienced any significant losses resulting from the non-performance of any counterpart to the lease contracts and, as a result, the allowance for doubtful accounts balance is low. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Group. If there is no independent rating, risk control assesses the credit quality of the customer, taking into account its past experience, financial position, actual experience and other factors. Based on the Group’s analysis, the Group determines the size of the deposit that is required from the tenant at inception. Management does not expect any material losses from non-performance by these counterparties. See details on Note 15.

On the other hand, property receivables related to the sale of trading properties represent 5.8% and 0.9% of the Group’s total trade receivables as of June 30, 2020 and 2019, respectively. Payments on these receivables have generally been received when due. These receivables are generally secured by mortgages on the properties. Therefore, the credit risk on outstanding amounts is considered very low.

2) Operations Center in Israel

IDBD’s and DIC’s primary objective for holding derivative financial instruments is to manage currency exchange rate risk and interest rate risk. IDBD and DIC generally enters into derivative transactions with high-credit-quality counterparties and, by policy, limits the amount of credit exposure to each counterparty. The amounts subject to credit risk related to derivative instruments are generally limited to the amounts, if any, by which counterparty’s obligations exceed the obligations that IDBD has with that counterparty. The credit risk associated with derivative financial instruments is representing by the carrying value of the assets positions of these instruments.

IDBD and DIC’s policy is to manage credit exposure to trade and other receivables within defined trading limits. All IDBD’s significant counterparties have internal trading limits.

Trade receivables from investment and development property activities are primarily derived from leases and services from shopping malls, offices and other rental properties; receivables from the sale of trading properties and investment properties (primarily undeveloped land and non-retail rental properties). IDBD and DIC have a large customer base and is not dependent on any single customer. The credits for sales from the activities of telecommunications and supermarkets do not present large concentrations of credit risk, not depending on a few customers and with most of their transactions in cash or with credit cards (Note 14).

The Group is exposed to liquidity risks, including risks associated with refinancing borrowings as they mature, the risk that borrowing facilities are not available to meet cash requirements, and the risk that financial assets cannot readily be converted to cash without loss of value. Failure to manage liquidity risks could have a material impact on the Group’s cash flow and Statements of Financial Position.

Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. Due to the dynamic nature of the underlying businesses, the Group aims to maintain flexibility in funding its existing and prospective debt requirements by maintaining diversified funding sources.

F-44

Each operation center monitors its current and projected financial position using several key internally generated reports: cash flow; debt maturity; and interest rate exposure. The Group also undertakes sensitivity analysis to assess the impact of proposed transactions, movements in interest rates and changes in property values on the key profitability, liquidity and balance sheet ratios.

The debt of each operation center and the derivative positions are continually reviewed to meet current and expected debt requirements. Each operation center maintains a balance between longer-term and shorter-term financings. Short-term financing is principally raised through bank facilities and overdraft positions. Medium- to longer-term financing comprises public and private bond issues, including private placements. Financing risk is spread by using a variety of types of debt. The maturity profile is managed in accordance with each operation center needs, by spreading the repayment dates and extending facilities, as appropriate.

The tables below show financial liabilities, including each operation center derivative financial liabilities groupings based on the remaining period at the Statements of Financial Position to the contractual maturity date. The amounts disclosed in the tables are the contractual undiscounted cash flows and as a result, they do not reconcile to the amounts disclosed on the Statements of Financial Position. However, undiscounted cash flows in respect of balances due within 12 months generally equal their carrying amounts in the Statements of Financial Position, as the impact of discounting is not significant. The tables include both interest and principal flows.

Where the interest payable is not fixed, the amount disclosed has been determined by reference to the existing conditions at the reporting date.

Operations Center in Argentina

June 30, 2020	Less than 1 year	Between 1 and 2 years	Between 2 and 3 years	Between 3 and 4 years	More than 4 years	Total
Trade<br>and other payables	1,671	168	74	236	1	2,150
Borrowings<br>(excluding finance leases liabilities)	41,342	3,534	29,368	70	233	74,547
Purchase<br>obligations	6,131	919	635	-	-	7,685
Finance<br>leases obligations	57	53	55	58	1,390	1,613
Derivative<br>Financial Instruments	89	30	6	-	-	125
Total	49,290	4,704	30,138	364	1,624	86,120
June 30, 2019	Less than 1 year	Between 1 and 2 years	Between 2 and 3 years	Between 3 and 4 years	More than 4 years	Total
---	---	---	---	---	---	---
Trade<br>and other payables	2,366	360	157	1	416	3,300
Borrowings<br>(excluding finance leases liabilities)	14,114	21,059	4,076	2,664	23,545	65,458
Purchase<br>obligations	1,967	-	-	-	-	1,967
Finance<br>leases obligations	17	6	1	-	-	24
Derivative<br>Financial Instruments	20	12	6	1	-	39
Total	18,484	21,437	4,240	2,666	23,961	70,788

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2) Operations Center in Israel

June 30, 2020	Less than 1 year	Between 1 and 2 years	Between 2 and 3 years	Between 3 and 4 years	More than 4 years	Total
Trade<br>and other payables	27,460	372	66	22	22	27,942
Borrowings<br>(excluding finance leases liabilities)	57,368	58,565	101,243	46,347	132,433	395,956
Purchase<br>obligations	5,639	4,334	3,072	1,944	7,092	22,081
Finance<br>leases obligations	6,131	919	635	-	-	7,685
Derivative<br>Financial Instruments	22	-	-	-	-	22
Total	96,620	64,190	105,016	48,313	139,547	453,686
June 30, 2019	Less than 1 year	Between 1 and 2 years	Between 2 and 3 years	Between 3 and 4 years	More than 4 years	Total
---	---	---	---	---	---	---
Trade<br>and other payables	23,269	459	220	-	-	23,948
Borrowings<br>(excluding finance leases liabilities)	72,291	59,049	62,560	98,217	211,136	503,253
Purchase<br>obligations	37	37	-	-	-	74
Finance<br>leases obligations	4,610	1,469	807	533	-	7,419
Derivative<br>Financial Instruments	37	-	-	-	-	37
Total	100,244	61,014	63,587	98,750	211,136	534,731

See Note 20 for a description of the commitments and restrictions related to loans and the ongoing renegotiations.

(d) Capital risk management

The capital structure of the Group consists of shareholders’ equity and net borrowings. The Group’s equity is analyzed into its various components in the statements of changes in equity. Capital is managed so as to promote the long-term success of the business and to maintain sustainable returns for shareholders. The Group seeks to manage its capital requirements to maximize value through the mix of debt and equity funding, while ensuring that Group entities continue to operate as going concerns, comply with applicable capital requirements and maintain strong credit ratings.

The Group assesses the adequacy of its capital requirements, cost of capital and gearing (i.e., debt/equity mix) as part of its broader strategic plan. The Group continuously reviews its capital structure to ensure that (i) sufficient funds and financing facilities are available to implement the Group’s property development and business acquisition strategies, (ii) adequate financing facilities for unforeseen contingencies are maintained, and (iii) distributions to shareholders are maintained within the Group’s dividend distribution policy. The Group also protects its equity in assets by obtaining appropriate insurance.

The Group’s strategy is to maintain key financing metrics (net debt to total equity ratio or gearing and debt ratio) in order to ensure that asset level performance is translated into enhanced returns for shareholders whilst maintaining an appropriate risk reward balance to accommodate changing financial and operating market cycles.

The following tables details the Group’s key metrics in relation to managing its capital structure. The ratios are within the ranges previously established by the Group’s strategy.

Operation Center in Argentina

	June 30, 2020	June 30, 2019
Gearing<br>ratio (i)	56.92%	40.80%
Debt<br>ratio (ii)	59.71%	47.54%

Operation Center in Israel

	June 30, 2020	June 30, 2019
Gearing<br>ratio (i)	81.55%	86.64%
Debt<br>ratio (ii)	227.18%	286.90

(i)

Calculated as total of borrowings over total borrowings plus equity attributable equity holders of the parent company.

(ii)

Calculated as total borrowings over total properties (including trading properties, property, plant and equipment, investment properties and rights to receive units under barter agreements).

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6. Segment information

IFRS 8 requires an entity to report financial and descriptive information about its reportable segments, which are operating segments or aggregations of operating segments that meet specified criteria. Operating segments are components of an entity about which separate financial information is available that is evaluated regularly by the CODM. According to IFRS 8, the CODM represents a function whereby strategic decisions are made and resources are assigned. The CODM function is carried out by the President of the Group, Mr. Eduardo S. Elsztain. In addition, and due to the acquisition of IDBD, two responsibility levels have been established for resource allocation and assessment of results of the two operations centers, through executive committees in Argentina and Israel.

As from fiscal year 2018, the CODM reviews certain corporate expenses associated with each operation center in an aggregate manner and separately from each of the segments, such expenses have been disclosed in the "Corporate" segment of each operation center. Additionally, as from fiscal year 2018, the CODM also reviews the office business as a single segment and the entertainment business in an aggregate and separate manner from offices, including that concept in the "Others" segment.

As further explained in Note 1, on September 25, 2020, the Group lost control over IDBD and DIC, which comprise the entire Operations Center in Israel. Accordingly, segment information in these financial statements has been recast to reflect the deconsolidation of IDBD, DIC and its subsidiaries. Starting on October 1, 2020, the Group has a single geographic segment, located in Argentina.

Below is the segment information which was prepared as follows:

● Operations Center in Argentina: Within this operations center, the Group operates in the following segments:

The “Shopping Malls” segment includes results principally comprised of lease and service revenues related to rental of commercial space and other spaces in the shopping malls of the Group.

The “Offices” segment includes the operating results from lease revenues of offices, other rental spaces and other service revenues related to the office activities.

The "Hotels" segment includes the operating results mainly comprised of room, catering and restaurant revenues.

The “International” segment includes assets and operating profit or loss from business related to associates Condor (hotels) and New Lipstick (offices).

The “Others” segment primarily includes the entertainment activities through ALG Golf Center S.A., La Rural S.A. and TGLT, and the financial activities carried out by BHSA.

The “Corporate” segment includes the expenses related to the corporate activities of the Operations Center in Argentina.

As of the 2018 fiscal year, the CODM reviews the office business as a single segment and the entertainment business in an aggregate manner and separately from offices, and has been exposed in the "Others" segment.

The CODM periodically reviews the results and certain asset categories and assesses performance of operating segments of this operations center based on a measure of profit or loss of the segment composed by the operating income plus the share of profit / (loss) of joint ventures and associates. The valuation criteria used in preparing this information are consistent with IFRS standards used for the preparation of the Consolidated Financial Statements, except for the following:

●

Operating results from joint ventures are evaluated by the CODM applying proportional consolidation method. Under this method the profit/loss generated and assets are reported in the Statement of Income line-by-line based on the percentage held in joint ventures rather than in a single item as required by IFRS. Management believes that the proportional consolidation method provides more useful information to understand the business return. On the other hand, the investment in the joint venture La Rural S.A. is accounted for under the equity method since this method is considered to provide more accurate information in this case.

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●

Operating results from Shopping Malls and Offices segments do not include the amounts pertaining to building administration expenses and collective promotion funds (“FPC”, as per its Spanish acronym) as well as total recovered costs, whether by way of expenses or other concepts included under financial results (for example default interest and other concepts). The CODM examines the net amount from these items (total surplus or deficit between building administration expenses and FPC and recoverable expenses).

The assets’ categories examined by the CODM are: investment properties, property, plant and equipment, trading properties, inventories, right to receive future units under barter agreements, investment in associates and goodwill. The sum of these assets, classified by business segment, is reported under “assets by segment”. Assets are allocated to each segment based on the operations and/or their physical location.

Revenues for each reporting segments derive from a large and diverse client base and, therefore, there is no revenue concentration in any particular segment.

● Operations Center in Israel: As explained in Note 1, results of operations and cash flows of the Operations Center in Israel have been presented within discontinued operations in these financial statements. Within this operations center, the Group operates in the following segments:

The “Real Estate” segment in which, through PBC, the Group operates rental properties and residential properties in Israel, USA and other parts of the world and carries out commercial projects in Las Vegas, USA. In this fiscal year, the Company lost control over Gav-Yam. Income was reclassified to discontinued operations and no longer forms part of this segment in this fiscal year. Such effect was reclassified in the comparative information. As of September 2018, Gav-Yam started to be valued as an associate.

The “Telecommunications” segment includes Cellcom whose main activities include the provision of mobile phone services, fixed line phone services, data, Internet and television, among others.

The "Others" segment includes other diverse business activities, such as technological developments, tourism, oil and gas assets, electronics, sale of fruit and others.

The “Corporate” segment includes the expenses related with the activities of the holding companies.

The CODM periodically reviews the results and certain asset categories and assesses performance of operating segments of this operations center based on a measure of profit or loss of the segment composed by the operating income plus the share of profit / (loss) of associates and joint ventures. The valuation criteria used in preparing this information are consistent with IFRS standards used for the preparation of the Consolidated Financial Statements.

Goods and services exchanged between segments are calculated on the basis of established prices. Intercompany transactions between segments, if any, are eliminated.

Below is a summary of the Group’s lines of business and a reconciliation between the results from operations as per segment information and the results from operations as per the Statements of Income for the years ended June 30, 2020, 2019 and 2018:

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IRSA Inversiones y Representaciones Sociedad Anónima

	June 30, 2020
	Operations Center in Argentina	Operations Center in Israel	Total	Joint ventures (1)	Expensesand collectivepromotion funds	Elimination of inter-segment transactions and non-reportable assets<br>/ liabilities (2)	Total as per statement of income / statement of financial<br>position
Revenues	11,991	-	11,991	(65)	3,338	(24)	15,240
Costs	(2,940)	-	(2,940)	57	(3,476)	-	(6,359)
Gross profit / (loss)	9,051	-	9,051	(8)	(138)	(24)	8,881
Net<br>gain from fair value adjustment of investment<br>properties	36,596	-	36,596	(283)	-	-	36,313
General<br>and administrative expenses	(2,317)	(99)	(2,416)	15	-	36	(2,365)
Selling<br>expenses	(1,325)	-	(1,325)	19	-	-	(1,306)
Impairment<br>of associates and joint ventures	-	-	-	-	-	-	-
Other<br>operating results, net	(49)	-	(49)	19	18	(12)	(24)
Profit / (loss) from operations	41,956	(99)	41,857	(238)	(120)	-	41,499
Share<br>of profit of associates and joint ventures	7,587	-	7,587	184	-	-	7,771
Segment profit / (loss)	49,543	(99)	49,444	(54)	(120)	-	49,270
Reportable<br>assets	170,379	485,812	656,191	(745)	-	19,764	675,210
Reportable<br>liabilities	-	(434,048)	(434,048)	-	-	(109,118)	(543,166)
Net reportable assets	170,379	51,764	222,143	(745)	-	(89,354)	132,044
	June 30, 2019
---	---	---	---	---	---	---	---
	Operations Center in Argentina	Operations Center in Israel	Total	Joint ventures (1)	Expensesand collectivepromotion funds	Elimination of inter-segment transactions and non-reportable assets<br>/ liabilities (2)	Total as per statement of income / statement of financial<br>position
Revenues	16,208	-	16,208	(101)	3,990	(26)	20,071
Costs	(3,418)	-	(3,418)	71	(4,151)	-	(7,498)
Gross profit / (loss)	12,790	-	12,790	(30)	(161)	(26)	12,573
Net<br>gain from fair value adjustment of investment<br>properties	(42,639)	-	(42,639)	902	-	-	(41,737)
General<br>and administrative expenses	(2,880)	(115)	(2,995)	19	-	48	(2,928)
Selling<br>expenses	(1,168)	-	(1,168)	8	-	-	(1,160)
Other<br>operating results, net	(711)	-	(711)	209	18	(22)	(506)
(Loss) / profit from operations	(34,608)	(115)	(34,723)	1,108	(143)	-	(33,758)
Share<br>of profit of associates and joint ventures	(6,492)	-	(6,492)	(1,096)	-	-	(7,588)
Segment (loss) / profit	(41,100)	(115)	(41,215)	12	(143)	-	(41,346)
Reportable<br>assets	120,102	576,561	696,663	(656)	-	34,279	730,286
Reportable<br>liabilities	-	(496,305)	(496,305)	-	-	(101,937)	(598,242)
Net reportable assets	120,102	80,256	200,358	(656)	-	(67,658)	132,044
	June 30, 2018
---	---	---	---	---	---	---	---
	Operations Center in Argentina	Operations Center in Israel	Total	Joint ventures (1)	Expensesand collectivepromotion funds	Elimination of inter-segment transactions and non-reportable assets<br>/ liabilities (2)	Total as per statement of income / statement of financial<br>position
Revenues	14,935	-	14,935	(116)	4,724	(21)	19,522
Costs	(3,016)	-	(3,016)	74	(4,785)	-	(7,727)
Gross profit / (loss)	11,919	-	11,919	(42)	(61)	(21)	11,795
Net<br>gain from fair value adjustment of investment<br>properties	21,764	-	21,764	(1,137)	-	-	20,627
General<br>and administrative expenses	(2,513)	(84)	(2,597)	44	-	35	(2,518)
Selling<br>expenses	(1,211)	-	(1,211)	16	-	-	(1,195)
Other<br>operating results, net	(57)	-	(57)	46	(2)	(14)	(27)
Profit / (loss) from operations	29,902	(84)	29,818	(1,073)	(63)	-	28,682
Share<br>of profit of associates and joint ventures	(4,551)	-	(4,551)	1,000	-	-	(3,551)
Segment profit / (loss)	25,351	(84)	25,267	(73)	(63)	-	25,131
Reportable<br>assets	164,606	606,800	771,406	331	-	27,117	798,854
Reportable<br>liabilities	-	(515,728)	(515,728)	-	-	(111,024)	(626,752)
Net reportable assets	164,606	91,072	255,678	331	-	(83,907)	172,102

(1) Represents the equity value of joint ventures that were proportionately consolidated for information by segment purposes.

(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 Ps. 18, Ps. 9,322 and Ps. 5,870, as of June 30, 2020, 2019 and 2018, respectively.

F-49

Below is a summarized analysis of the lines of business of Group’s operations center in Argentina for the fiscal years ended June 30, 2020, 2019 and 2018:

	June 30, 2020
	Operations Center in Argentina
	Shopping Malls	Offices	Sales and developments	Hotels	International	Corporate	Others	Total
Revenues	6,389	2,539	791	2,176	12	-	84	11,991
Costs	(610)	(149)	(722)	(1,340)	(13)	-	(106)	(2,940)
Gross profit / (loss)	5,779	2,390	69	836	(1)	-	(22)	9,051
Net<br>(loss) / gain from fair value adjustment of investment<br>properties	(2,266)	25,067	13,111	-	-	-	684	36,596
General<br>and administrative expenses	(892)	(238)	(245)	(394)	(118)	(304)	(126)	(2,317)
Selling<br>expenses	(763)	(90)	(212)	(248)	-	-	(12)	(1,325)
Other<br>operating results, net	(40)	(30)	(29)	(22)	-	-	72	(49)
Profit / (loss) from operations	1,818	27,099	12,694	172	(119)	(304)	596	41,956
Share<br>of profit of associates and joint ventures	-	-	-	-	7,942	-	(355)	7,587
Segment profit	1,818	27,099	12,694	172	7,823	(304)	241	49,543
Investment<br>properties and trading<br>properties	52,868	67,600	34,634	-	331	-	1,552	156,985
Investment<br>in associates and joint ventures	-	-	573	-	2,157	-	7,253	9,983
Other<br>operating assets	297	227	811	1,979	-	-	97	3,411
Operating assets	53,165	67,827	36,018	1,979	2,488	-	8,902	170,379

From all the revenues corresponding to the Operations Center in Argentina, Ps. 11,979 are originated in Argentina, and Ps. 12 in the U.S. No external client represents 10% or more of revenue of any of the reportable segments. From all of the assets corresponding to the Operations Center in Argentina segments, Ps. 167,271 are located in Argentina and Ps. 3,107 in other countries, principally in USA for Ps. 2,488 and Uruguay for Ps. 619.

	June 30, 2019
	Operations Center in Argentina
	Shopping Malls	Offices	Sales and developments	Hotels	International	Corporate	Others	Total
Revenues	9,195	2,409	1,205	3,179	15	-	205	16,208
Costs	(835)	(141)	(566)	(1,707)	(6)	-	(163)	(3,418)
Gross profit	8,360	2,268	639	1,472	9	-	42	12,790
Net<br>(loss) / gain from fair value adjustment of investment<br>properties	(43,687)	663	782	-	6	-	(403)	(42,639)
General<br>and administrative expenses	(1,017)	(228)	(305)	(530)	(118)	(560)	(122)	(2,880)
Selling<br>expenses	(571)	(107)	(127)	(340)	-	-	(23)	(1,168)
Other<br>operating results, net	(118)	(43)	(309)	123	(26)	-	(338)	(711)
(Loss) / profit from operations	(37,033)	2,553	680	725	(129)	(560)	(844)	(34,608)
Share<br>of profit of associates and joint ventures	-	-	(40)	-	(3,960)	-	(2,492)	(6,492)
Segment (loss) / profit	(37,033)	2,553	640	725	(4,089)	(560)	(3,336)	(41,100)
Investment<br>properties and trading<br>properties	54,220	34,104	29,883	2,047	291	-	1,143	121,688
Investment<br>in associates and joint ventures	11	61	477	-	(7,775)	-	5,367	(1,859)
Other<br>operating assetsInvestment	46	1	198	28	-	-	-	273
Operating assets	54,277	34,166	30,558	2,075	(7,484)	-	6,510	120,102

From all the revenues corresponding to the Operations Center in Argentina, included in the segments Ps. 15,678 are originated in Argentina, Ps. 515 are originated in Uruguay and Ps. 15 are originated in USA. No external client represents 10% or more of revenue of any of the reportable segments. From all of the assets corresponding to the Operations Center in Argentina segments, Ps. 126,960 are located in Argentina and Ps. (6,858) in other countries, principally in USA for Ps. (7,484) and Uruguay for Ps. 627.

F-50

IRSA Inversiones y Representaciones Sociedad Anónima

	June 30, 2018
	Operations Center in Argentina
	Shopping Malls	Offices	Sales and developments	Hotels	International	Corporate	Others	Total
Revenues	10,497	1,434	324	2,633	-	-	47	14,935
Costs	(892)	(113)	(160)	(1,798)	-	-	(53)	(3,016)
Gross profit / (loss)	9,605	1,321	164	835	-	-	(6)	11,919
Net<br>gain from fair value adjustment of investment<br>properties	6,746	6,728	7,900	-	-	-	390	21,764
General<br>and administrative expenses	(917)	(235)	(213)	(524)	(127)	(413)	(84)	(2,513)
Selling<br>expenses	(653)	(153)	(62)	(335)	-	-	(8)	(1,211)
Other<br>operating results, net	(113)	(24)	149	(43)	(62)	-	36	(57)
Profit / (loss) from operations	14,668	7,637	7,938	(67)	(189)	(413)	328	29,902
Share<br>of profit of associates and joint ventures	-	-	4	-	(4,763)	-	208	(4,551)
Segment profit / (loss)	14,668	7,637	7,942	(67)	(4,952)	(413)	536	25,351
Investment<br>properties and trading<br>properties	97,100	30,763	27,074	2,162	212	-	1,435	158,746
Investment<br>in associates and joint ventures	11	61	480	-	(4,165)	-	9,177	5,564
Other<br>operating assets	61	3	203	29	-	-	-	296
Operating assets	97,172	30,827	27,757	2,191	(3,953)	-	10,612	164,606

From all the revenues corresponding to the Operations Center in Argentina, the 100% are originated in Argentina. No external client represents 10% or more of revenue of any of the reportable segments. From all of the assets corresponding to the Operations Center in Argentina segments, Ps. 167,823 are located in Argentina and Ps. (3,216) in other countries, principally in USA for Ps. (3,905) and Uruguay for Ps. 737 million.

Below is a summarized analysis of the lines of business of Group’s Operations Center in Israel for the years ended June 30, 2020, 2019 and 2018:

	June 30, 2020
	Operations Center in Israel
	Real Estate	Supermarkets	Telecommunications	Insurance	Corporate	Others	Total
Revenues	-	-	-	-	-	-	-
Costs	-	-	-	-	-	-	-
Gross profit	-	-	-	-	-	-	-
Net<br>loss from fair value adjustment of investment<br>properties	-	-	-	-	-	-	-
General<br>and administrative expenses	-	-	-	-	(99)	-	(99)
Selling<br>expenses	-	-	-	-	-	-	-
Impairment<br>of associates and joint ventures	-	-	-	-	-	-	-
Other<br>operating results, net	-	-	-	-	-	-	-
Profit from operations	-	-	-	-	(99)	-	(99)
Share<br>of loss of associates and joint ventures	-	-	-	-	-	-	-
Segment profit	-	-	-	-	(99)	-	(99)
Operating<br>assets	164,649	30,240	150,744	3,636	19,282	117,261	485,812
Operating<br>liabilities	(157,533)	-	(114,196)	-	(120,196)	(42,123)	(434,048)
Operating assets (liabilities), net	7,116	30,240	36,548	3,636	(100,914)	75,138	51,764
	June 30, 2019
---	---	---	---	---	---	---	---
	Operations Center in Israel
	Real Estate	Supermarkets	Telecommunications	Insurance	Corporate	Others	Total
Revenues	-	-	-	-	-	-	-
Costs	-	-	-	-	-	-	-
Gross profit	-	-	-	-	-	-	-
Net<br>gain from fair value adjustment of investment<br>properties	-	-	-	-	-	-	-
General<br>and administrative expenses	-	-	-	-	(115)	-	(115)
Selling<br>expenses	-	-	-	-	-	-	-
Other<br>operating results, net	-	-	-	-	-	-	-
Profit from operations	-	-	-	-	(115)	-	(115)
Share<br>of profit of associates and joint ventures	-	-	-	-	-	-	-
Segment profit	-	-	-	-	(115)	-	(115)
Operating<br>assets	326,652	24,775	117,753	24,370	44,716	38,295	576,561
Operating<br>liabilities	(253,584)	-	(91,292)	-	(136,275)	(15,154)	(496,305)
Operating assets (liabilities), net	73,068	24,775	26,461	24,370	(91,559)	23,141	80,256

F-51

	June 30, 2018
	Operations Center in Israel
	Real Estate	Supermarkets	Telecommunications	Insurance	Corporate	Others	Total
Revenues	-	-	-	-	-	-	-
Costs	-	-	-	-	-	-	-
Gross profit	-	-	-	-	-	-	-
Net<br>gain from fair value adjustment of investment<br>properties	-	-	-	-	-	-	-
General<br>and administrative expenses	-	-	-	-	(84)	-	(84)
Selling<br>expenses	-	-	-	-	-	-	-
Other<br>operating results, net	-	-	-	-	-	-	-
Profit from operations	-	-	-	-	(84)	-	(84)
Share<br>of profit of associates and joint ventures	-	-	-	-	-	-	-
Segment profit	-	-	-	-	(84)	-	(84)
Operating<br>assets	320,845	31,843	119,199	29,332	51,062	54,519	606,800
Operating<br>liabilities	(249,429)	-	(92,885)	-	(167,475)	(5,939)	(515,728)
Operating assets (liabilities), net	71,416	31,843	26,314	29,332	(116,413)	48,580	91,072

No external client represents 10% or more of the revenue of any of the reportable segments. From all assets corresponding to the Operations Center in Israel segments, Ps. 89,038 are located in USA

(Ps. 79,848 in 2019 and Ps. 83,609 in 2018), Ps. 0 (Ps. 2,130 in 2019 and Ps. 2,512 in 2018) in India and the remaining are located in Israel.

7. Information about the main subsidiaries

The Group conducts its business through several operating and holding subsidiaries. The Group considers that the subsidiaries below are the ones with significant non-controlling interests to the Group.

	Direct interest of non-controlling interest %	Current Assets	Non-current Assets	Current Liabilities	Non-current Liabilities	Net assets	Book value of non-controlling interests
	June<br>30, 2020
Elron	38.94%	3,636	4,270	548	153	7,205	4,467
PBC	27.60%	85,399	121,008	28,139	127,882	50,386	20,738
Cellcom<br>(2)	53.80%	58,970	85,904	33,789	80,409	30,676	19,292
Mehadrin	56.25%	14,036	19,205	15,022	3,591	14,628	8,759
IRSA<br>CP	19.35%	16,067	139,497	17,680	56,526	81,358	4,402
	June<br>30, 2019
---	---	---	---	---	---	---	---
Elron	38.94%	4,867	4,059	569	74	8,283	4,978
PBC	31.20%	68,796	254,539	27,676	224,477	71,182	51,422
Cellcom<br>(2)	55.90%	49,475	63,598	29,366	61,927	21,780	13,755
IRSA<br>CP	16.20%	26,443	98,186	6,241	55,899	62,489	3,351
	Revenues	Net income / (loss)	Total comprehensive income / (loss)	Total comprehensive profit / (loss) attributable to non-controlling<br>interest	Cash of Operating activities	Cash of investing activities	Cash of financial activities	Net Increase / (decrease) in cash and cash equivalents	Dividends distribution to non-controlling shareholders
---	---	---	---	---	---	---	---	---	---
	June<br>30, 2020
Elron<br>(3)	-	(1,910)	(2,007)	5,964	(835)	377	941	483	-
PBC<br>(3)	13,252	13,616	13,096	21,085	6,812	25,699	(21,793)	10,718	1,813
Cellcom<br>(2)(3)	60,369	(2,226)	(2,261)	575	16,056	(7,993)	(6,807)	1,256	-
Mehadrin<br>(3)	2,101	114	132	270	265	(75)	(265)	(75)	18
IRSA<br>CP	9,218	19,543	19,814	1,145	5,264	(3,099)	(3,834)	(1,669)	714
	June<br>30, 2019
---	---	---	---	---	---	---	---	---	---
Elron<br>(3)	-	(1,137)	(979)	2,284	(1,089)	223	1,440	574	-
PBC<br>(3)	19,444	7,485	8,155	5,630	9,776	1,154	3,150	14,080	2,516
Cellcom<br>(2)(3)	51,174	(1,641)	(1,656)	(1,455)	10,792	(9,273)	1,794	3,313	-
IRSA<br>CP	11,655	(27,907)	(27,907)	(161)	6,016	(5,338)	(2,832)	(2,154)	937

(1) Corresponds to the direct interest from the Group.

(2) DIC considers it exercises effective control over Cellcom because DIC is the group with the higher percentage of votes vis-à-vis other shareholders, also taking into account the historic voting performance in the Shareholders’ Meetings.

(3) Presented within discontinued operations

F-52

Restrictions, commitments and other relevant issues

Analysis of the impact of the Concentration Law

On December 2013, was published in the Official Gazette of Israel the Promotion of Competition and Reduction of Concentration Law N°, 5774-13 (‘the Concentration Law’) which has material implications for IDBD, DIC and its investors, including the disposal of the controlling interest in Clal. In accordance with the provisions of the law, the structures of companies that make public offer of their securities are restricted to two layers of public companies.

In November 2017, Dolphin IL, a subsidiary of Dolphin Netherlands B.V. acquired all the shares owned by IDBD in DIC (See note 4). Thus, the section required by the aforementioned law for the year 2017 is completed.

Prior to December 31, 2019 the Group lost control over Gav-Yam and in March 2020 it acquired control over Mehadrin, thus complying with the above-mentioned law.

Dolphin arbitration process

There is an arbitration process going on between Dolphin and ETH (previous shareholder of IDBD) in relation to certain issues connected to the control obtainment of IDBD (mainly regarding who had the right of purchase and the price of the acquisition). In the arbitration process the parties have agreed to designate Eyal Rosovshy and Giora Erdinas to promote a mediation. On August 17, 2017, a mediation hearing was held and the parties failed to reach an agreement. On January 31, 2018, the parties agreed to follow the process in court. As of the date of presentation of these Consolidated Financial Statements, there have been no other developments in the process and it is still pending resolution. Management, based on the opinion of its legal advisors, considers that the resolution of the present litigation will not have an adverse effect for Dolphin.

8. Investments in associates and joint ventures

Changes of the Group’s investments in associates and joint ventures for the fiscal years ended June 30, 2020 and 2019 were as follows:

	June 30, 2020	June 30, 2019
Beginning of the year	38,520	56,171
Adjustment<br>previous periods (IFRS 9 and IAS 28)	(2,131)	(165)
Increase<br>in equity interest in associates and joint ventures	3,598	751
Capital<br>contributions	2,909	142
Capital<br>reduction	(114)	(723)
Decrease<br>of interest in associate	-	(7,727)
Deconsolidation<br>(i)	31,409	-
Share<br>of profit / (loss)	9,330	(7,439)
Currency<br>translation adjustment	55	(435)
Dividends<br>(i)	(1,959)	(1,849)
Other<br>comprehensive income	(1,339)	-
Reclassification<br>to held-for-sale	(2,228)	-
Others	(2)	(434)
Incorporation<br>by business combination	2,023	228
End of the year (ii)	80,071	38,520

(i)

Corresponds to the loss of control over Gav-Yam. See Note 4.

(ii)

Includes Ps. (18) and Ps. (9,322) reflecting interests in companies with negative equity as of June 30, 2020 and 2019, respectively, which are disclosed in “Provisions” (see Note 19).

Below is a detail of the investments and the values of the stake held by the Group in associates and joint ventures for the years ended as of June 30, 2020 and 2019, as well as the Group's share of the comprehensive results of these companies for the years ended on June 30, 2020, 2019 and 2018:

F-53

IRSA Inversiones y Representaciones Sociedad Anónima

	% ownership interest			Value of Group's interest in equity		Group's interest in comprehensive income / (loss)
Name of the entity	June 30, 2020	June 30, 2019	June 30, 2018	June 30, 2020	June 30, 2019	June 30, 2020	June 30, 2019	June 30, 2018
Associates
New<br>Lipstick	49.96%	49.96%	49.90%	503	(9,322)	8,217	(3,444)	(5,697)
BHSA<br>(1)	29.91%	29.91%	29.91%	4,385	4,792	(409)	(2,596)	448
Condor<br>(2)	18.89%	18.89%	28.10%	1,594	1,499	129	42	642
PBEL	45.00%	45.40%	45.40%	-	2,130	-	(126)	448
Shufersal<br>(4)	26.02%	26.02%	33.56%	30,263	24,775	5,614	320	-
Mehadrin	N/A	45.41%	45.41%	-	5,216	-	(119)	1,374
Gav-Yam	34.90%	N/A	N/A	29,365	0.00%	(846)	-	-
Quality<br>(3)	50.00%	50.00%	50.00%	2,262	2,012	199	(628)	943
La<br>Rural SA	50.00%	50.00%	50.00%	219	109	110	155	(47)
TGLT	30.50%	N/A	N/A	2,217	0.00%	(125)	0.00%	0.00%
Other<br>joint ventures	N/A	N/A	N/A	9,263	7,309	(3,504)	(1,478)	1,379
Total associates and joint ventures				80,071	38,520	9,385	(7,874)	(510)
				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<br>Lipstick	U.S.	Real<br>estate	N/A	-	(*) 179	(*) (31)
BHSA	Argentina	Financial	448,689,072	(***) 1.500	(***) (1.369)	(***) 14.195
Condor	EE.UU.	Hotel	2,245,100	(*) 232	(*) (9)	(*) 86
PBEL	India	Real<br>estate	1	(**) (2)	(**) -	(**) (2)
Shufersal	Israel	Retail	123,917,650	(**) 1.399	(**) 310	(**) 1.930
Mehadrin	Israel	Agribusiness	N/A	N/A	N/A	N/A
Gav-Yam	Israel	Real<br>estate	639,727	(**) 1.356	(**) 411	(**) 3.496
Quality	Argentina	Real<br>estate	163,039,244	326	398	4,457
La<br>Rural SA	Argentina	Organization<br>of events	714,498	1	241	352
TGLT	Argentina	Real<br>estate	279,502,813	925	(335)	6,463
Other<br>joint ventures			-	N/A	N/A	N/A

(1)

BHSA is a commercial bank of comprehensive services that offers a variety of banking and financial services for individuals, small and medium businesses and large companies. The market price of the share is 17.15 pesos per share. The effect of the treasury shares in the BHSA portfolio is considered for the calculation.

(2)

Condor is an investment company focused on US hotels. The price of its shares as of June 30, 2020 is US$ 4.10 per share.

(3)

Quality is dedicated to the exploitation of the San Martín property (former property of Nobleza Piccardo S.A.I.C. and F.).

(4)

Shufersal is a company that has supermarkets and pharmacies in Israel, the market price of the share is NIS 22,59 as of June 30, 2020.

(*)

Amounts in millions of US Dollars under USGAAP. Condor’s year-end falls on December 31, so the Group estimates their interest with a three-month lag, including material adjustments, if any.

(**)

Amounts in millions of NIS.

(***)

The balances as of June 30, 2020 correspond to the Financial Statements of BHSA prepared in accordance with BCRA standards.

New Lipstick:

On August 7, 2020, as a consequence of negotiations conducted in the context of an increased lease price effective as of May 2020, as set forth in the lease (hereinafter, “Ground Lease”), Metropolitan (a company where IRSA holds, indirectly, a 49.96% interest) executed an agreement with the Ground Lease lessor to conclude the relationship and terminate the ground lease, abandoning the administration of the building. As a consequence of the foregoing, Metropolitan derecognised the liability associated to the ground lease, as well as all assets and liabilities associated to the building and the administration. Pursuant to such agreement, Metropolitan was fully released from liability except for (i) claims for liabilities prior to June 1, 2020, from those persons who performed works or rendered services in the Building or for Metropolitan and (ii) claims from persons who had an accident in the property after August 7, 2020.

Gav-Yam

Considering that, on June 30, 2020, the market value of Gav-Yam was lower than its carrying value, PBC management considered whether there may be signs of impairment of the investment in such company. Based on the management´s review, with the assistance of external advisors, PBC considered that there was no evidence of investment impairment. Some of the factors considered are listed below:

●

The price of Gav-Yam shares has been significantly volatile since mid-March 2020; therefore, the fact that the market cap of the company was lower than the carrying value as of June 30, 2020 has not been considered as tantamount to a significant or sustained decrease;

●

On August 4, 2020, Aharon Frenkel purchased approximately 8.6% of Gav-Yam´s capital stock at a value of NIS 2,091/share, which circumstance reinforces the management´s conclusions;

●

Gav-Yam income as of March 31, 2020 and June 30, 2020 show that Gav-Yam is a stable company with a high quality and wide-ranging client portfolio.

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Set out below is summarized financial information of the associates and joint ventures considered to be material to the Group:

	Current Assets	Non-current Assets	Current Liabilities	Non-current Liabilities	Net assets	% of ownership interest held	Interest in associate and joint venture	Goodwill and others	Book value
As of 06,30,20
Associates
BHSA	82,753	46,949	110,120	4,984	14,598	29.91%	4,366	19	4,385
Gav-Yam	45,175	178,576	21,306	126,766	75,679	34.90%	26,412	2,953	29,365
Shufersal	78,963	201,349	98,934	139,116	42,262	26.02%	10,995	19,268	30,263
Joint<br>ventures
Quality<br>Invest (ii)	4	5,948	94	1,402	4,456	50.00%	2,228	34	2,262
As of 06,30,19
Associates
BHSA	93,863	33,130	96,366	16,458	14,169	29.91%	4,238	554	4,792
PBEL	3,416	918	680	13,056	(9,402)	45.00%	(4,231)	6,361	2,130
Shufersal	55,702	96,324	58,896	58,988	34,142	26.02%	8,884	15,891	24,775
Joint<br>ventures
Quality<br>Invest (ii)	27	5,299	128	1,241	3,957	50.00%	1,979	33	2,012
Mehadrin	12,800	16,491	14,067	4,004	11,220	45.41%	5,095	121	5,216
	Revenues	Net income / (loss)	Total comprehensive income / (loss)	Dividend distribution	Cash of operating activities	Cash of investing activities	Cash of financing activities	Changes in cash and cash equivalents
---	---	---	---	---	---	---	---	---
As of 06,30,20
Associates
BHSA	14,031	(1,369)	(1,369)	-	5,012	40	(3,730)	1,322
Gav-Yam	12,435	7,283	5,874	3,862	5,475	(6,161)	17,084	16,398
Shufersal	234,688	5,432	4,844	1,545	23,548	(2,916)	(14,849)	5,783
Joint<br>ventures
Quality<br>Invest (ii)	19	398	398	-	(96)	-	96	-
As of 06,30,19
Associates
BHSA	18,787	946	946	308	180	(75)	(2,069)	(1,964)
PBEL	14	(280)	(343)	-	61	257	(329)	(11)
Shufersal	178,319	3,406	3,388	2,635	4,799	(12,413)	1,503	(6,111)
Joint<br>ventures
Quality<br>Invest (ii)	39	(1,256)	(1,256)	-	(133)	-	133	-
Mehadrin	18,656	834	882	-	723	(298)	(1,359)	(934)

(i)

Information under GAAP applicable in the associate and joint ventures´ jurisdiction.

(ii)

In March 2011, Quality acquired an industrial plant located in San Martín, Province of Buenos Aires. The facilities are suitable for multiple uses. On January 20, 2015, Quality agreed with the Municipality of San Martin on certain re zoning and other urban planning matters (“the Agreement”) to surrender a non-significant portion of the land and a monetary consideration of Ps. 43 million, payable in two installments of Ps. 22 each, the first of which was actually paid on June 30, 2015. In July 2017, the Agreement was amended as follows: 1) a revised zoning plan must be submitted within 120 days as from the amendment date, and 2) the second installment of the monetary considerations was increased to Ps. 76 million payables in 18 equal monthly installments. On March 8, 2018, it was agreed with the well-known Gehl Study (Denmark) - Urban Quality Consultant - the elaboration of a Master Plan, generating a modern concept of New Urban District of Mixed Uses.

BHSA

BHSA is subject to certain restrictions on the distribution of profits, as required by BCRA regulations.

As of June 30, 2020, BHSA has a remnant of 35.2 million Class C treasury shares of a par value of Ps. 1 received in 2009 as a result of certain financial transactions. The Annual Shareholders' Meeting decided to allocate 35.1 million of such shares to an employee compensation plan pursuant to Section 67 of Law 26,831. The remaining shares belong to third party holders of Stock Appreciation Rights, who have failed to produce the documentation required for redemption purposes. As of June 30, 2020, considering the effect of such treasury shares, the Group’s interest in BHSA amounts to 29.91%.

The Group estimated that the value in use of its investment in BHSA as of June 30, 2020 and 2019 amounted to Ps. 5,387, Ps. 5,944, respectively. The value in use was estimated based on the present value of future business cash flows. The main assumptions used were the following:

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

The Group considered 7 years as the horizon for the projection of BHSA cash flows.



The “Private BADLAR” interest rate was projected based on internal data and information gathered from external advisors.



The projected exchange rate was estimated in accordance with internal data and external information provided by independent consultants.



The discount rate used to discount actual dividend flows was 13.82% in 2020 and 14.37% in 2019.



The sensitivity to a 1% increase in the discount rate would be a reduction in the value in use of Ps. 577 for 2020 and of Ps.542 for 2019.

Puerto Retiro (joint venture):

At present, this 8.3-hectare plot of land, is affected by a zoning regulation defined as U.P. which prevents the property from being used for any purposes other than strictly port activities.

Puerto Retiro was involved in a judicial bankruptcy action brought by the National Government. The current Board of Directors would not be held personally liable with regard to this action. Management and legal counsel of the Company believe that there are sufficient legal and technical arguments to consider that the petition for extension of the bankruptcy case will be dismissed by the court. However, in view of the current status of the action, its result cannot be predicted.

Moreover, Tandanor filed a civil action against Puerto Retiro S.A. and the other defendants in the criminal case for violation of Section 174 (5) based on Section 173 (7) of the Criminal Code of Argentina. Such action seeks -on the basis of the nullity of the decree that approved the bidding process involving the Dársena Norte property- the restitution of the property and a reimbursement in favor of Tandanor for all such amounts it has allegedly lost as a result of a suspected fraudulent transaction involving the sale of the property. Puerto Retiro has presented the allegation on the merit of the evidence, highlighting that the current shareholders of Puerto Retiro did not participate in any of the suspected acts in the criminal case since they acquired the shares for consideration and in good faith several years after the facts told in the process. Likewise, it was emphasized that the company Puerto Retiro is foreign to the bidding / privatization carried out for the sale of Tandanor shares. On September 7, 2018, the Oral Federal Criminal Court No. 5 rendered a decision. According to the sentence read by the president of the Court, Puerto Retiro won the preliminary objection of limitation filed in the civil action. However, in the criminal case, where Puerto Retiro is not a party, it was ordered, among other issues, the confiscation (“decomiso”) of the property owned by Puerto Retiro known as Planta I. The grounds of the Court`s judgment were read on November 11, 2018. From that moment, all the parties were able to present the appeals. Given this fact, an extraordinary appeal was filed, which was rejected, and as a result, a complaint was filed for a rejected appeal, which was granted. Consequently, the appeal is under study in the Argentine Supreme Court of Justice.

In the criminal action, the claimant reported the violation by Puerto Retiro of the injunction ordered by the criminal court consisting in an order to stay (“prohibición de innovar”) and not to contract with respect to the property disputed in the civil action. As a result of this complaint, the Federal Oral Court No. 5 formed an incident and ordered and executed the closure of the property where the lease agreements were being executed (a heliport and a mooring), in order to enforce compliance with the measure before mentioned. As a result of this circumstance, it was learned that the proceedings were turned over to the Criminal Chamber for the allocation of the court to investigate the possible commission of a crime of disobedience. As of the date of issuance of these financial statements there has been no news about the progress of this cause.

Faced with the evolution of the legal cases that affect it and based on the reports of its legal advisors, Puerto Retiro Management has decided to register in fiscal year 2019 an allowance equivalent to 100% of the book value of its investment property, without prejudice to reverse it when a favorable ruling is obtained in the interposed actions.

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IRSA Inversiones y Representaciones Sociedad Anónima

9. Investment properties

Changes in the Group’s investment properties according to the fair value hierarchy for the years ended June 30, 2020 and 2019 were as follows:

	June 30, 2020		June 30, 2019
	Level 2	Level 3	Level 2	Level 3
Fair value at the beginning of the year	47,287	311,769	39,163	350,480
Adjustments<br>previous periods (IFRS 16)	-	459	-	-
Additions	3,811	1,979	5,561	6,939
Activation<br>of financial costs	87	-	234	17
Capitalized<br>leasing costs	4	17	12	5
Amortization<br>of capitalized leasing costs (i)	(6)	(10)	(9)	(14)
Transfers<br>/ Reclassification to assets held for sale	4,899	(30,984)	(749)	1,216
Incorporation<br>by business combination	-	263	-	-
Deconsolidation<br>(ii)	(1,824)	(167,776)	-	-
Disposals	(1,873)	(14,439)	(77)	(3,957)
Currency<br>translation adjustment	15	57,556	(73)	(3,211)
Net<br>(loss)/ gain from fair value adjustment	30,437	3,295	3,225	(39,706)
Fair value at the end of the year	82,837	162,129	47,287	311,769

(i) Amortization charges of capitalized leasing costs were included in “Costs” in the Statements of Income (Note 23).

(ii) $ 1,694 corresponds to La Maltería and $ 155,846 to Gav-Yam

The following is the balance by type of investment property of the Group as of June 30, 2020 and 2019:

	06.30.2020	06.30.2019
Rental<br>properties	207,434	321,567
Undeveloped<br>parcels of land	29,642	30,690
Properties<br>under development	7,890	6,799
TOTAL	244,966	359,056

Certain investment property assets of the Group have been mortgaged or restricted to secure some of the Group’s borrowings and other payables. Book amount of those properties amounts to Ps. 19,560, Ps. 16,547 as June 30, 2020 and 2019, respectively.

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

	06.30.2020	06.30.2019	06.30.2018
Rental<br>and services income	12,279	15,723	16,594
Direct<br>operating expenses	(8,702)	(8,713)	(8,273)
Development<br>reimbursements / (expenses)	121	(94)	(4,450)
Net<br>realized gain from fair value adjustment of investment<br>properties	16,144	10	590
Net<br>unrealized gain from fair value adjustment of investment<br>properties	20,169	(41,747)	20,037

(i) As of June 30, 2020, $ 504 corresponds to the result realized in previous years. As of June 30, 2018, $ 16 corresponds to results realized in previous years.

See note 5 (liquidity schedule) for detail of contractual commitments related to investment properties.

Valuation processes

The Group’s investment properties were valued at each reporting date by independent professionally qualified appraisers who hold a recognized relevant professional qualification and have experience in the locations and segments of the investment properties appraised. For all investment properties, their current use equates to the highest and best use.

Each operations center has a team which reviews the appraisals performed by the independent appraisers (the “review team”). The review team: i) verifies all major and important assumptions relevant to the appraisal in the valuation report from the independent appraisers; ii) assesses property valuation movements compared to the valuation report from the prior period; and iii) holds discussions with the independent appraisers.

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Changes in Level 2 and 3 fair values, if any, are analyzed at each reporting date during the valuation discussions between the review team and the independent appraisers. In the case of the Operations Center in Argentina, the Board of Directors ultimately approves the fair value calculation for recording into the Financial Statements. In the case of the Operations Center in Israel, the appraisals are examined by Israel Management and reported to the Financial Statements Committee.

Valuation techniques used for the estimation of fair value of the investment property for the Argentina operations center:

The Group has defined valuation techniques according to the characteristics of each property and the type of market in which these assets are located, in order to maximize the use of observable information available for the determination of fair value.

For the Shopping Malls there is no liquid market for the sale of properties with these characteristics that can be taken as a reference of value. Likewise, the Shopping Malls, being a business denominated in pesos, are highly related to the fluctuation of macroeconomic variables in Argentina, the purchasing power of individuals, the economic cycle of Gross Domestic Product (GDP) growth, the evolution of inflation, among others. Consequently, the methodology adopted by the Group for the valuation of Shopping Malls is the discounted cash flow model (“DCF”), which allows the volatility of the Argentine economy to be taken into account and its correlation with the revenue streams of the Malls and the inherent risk of the Argentine macroeconomy. The DCF methodology contemplates the use of certain unobservable valuation assumptions, which are determined reliably based on the information and internal sources available at the date of each measurement. These assumptions mainly include the following:

● Future cash flow projected income based on the current locations, type and quality of the properties, backed by the lease agreements that the Company has signed with its tenants. The Company's revenues are equal to the higher of: i) a Minimum Insured Fixed Value (“VMA”) and ii) a percentage of the tenant's sales in each Shopping Mall. Accordingly, estimates of the evolution of the Gross Domestic Product (“GDP) and the Inflation of the Argentine economy, as provided by an external consultant were used to estimate the evolution of tenant sales, which have a high correlation with these macroeconomic variables. These macroeconomic projections were contrasted with the projections prepared by the International Monetary Fund (“IMF”), the Organization for Economic Cooperation and Development (“OECD”) and with the Survey of Market Expectations (“REM”), which consists of a Survey prepared by the Central Bank of Argentina (BCRA) aimed to local and foreign specialized analysts in order to allow a systematic follow-up of the main short and medium term macroeconomic forecasts on the evolution of the Argentine economy.

● The income from all Shopping Malls was considered to grow with the same elasticity in relation to the evolution of the GDP and the projected inflation. The specific characteristics and risks of each Shopping Mall are captured through the use of the historical average EBITDA Margin of each of them.

● Cash flows from future investments, expansions or improvements in Shopping Mall were not contemplated.

● Terminal value: a perpetuity calculated from the cash flow of the last year of useful life was considered.

● The cash flow for concessions was projected until the termination date of the concession stipulated in the current contract.

● Given the prevailing inflationary context and the volatility of certain macroeconomic variables, a reference long term interest rate in pesos is not available to discount the projected cash flows from shopping malls. Consequently, the projected cash flows were dollarized through the future ARS / US$ exchange rate curve provided by an external consultant, which are contrasted to assess their reasonableness with those of the IMF, OECD, REM and the On-shore Exchange Rate Futures Market (ROFEX). Finally, dollarized cash flows were discounted with a long-term dollar rate, the weighted average capital cost rate (“WACC”), for each valuation date.

● The estimation of the WACC discount rate was determined according to the following components:

a) United State Governments Bonds risk-free rate;

b)Industry beta, considering comparable companies from the United States, Brazil, Chile and Mexico, in order to contemplate the Market Risk on the risk-free rate;

c) Argentine country risk considering the EMBI + Index; and

d)Cost of debt and capital structure, considering that information available from the Argentine corporate market (“blue chips”) was determined as a reference, since sovereign bonds have a history of defaults. Consequently, and because IRSA CP, based on its representativeness and market share represents the most important entity in the sector, we have taken its indicators to determine the discount rate.

For offices, other rental properties and plot of lands, the valuation was determined using transactions of comparable market assets, since the market for offices and land banks in Argentina is liquid and has market transactions that can be taken as reference. These values are adjusted to the differences in key attributes such as location, property

F-58

size and quality of interior fittings. The most significant input to the comparable market approach is the price per square meter that derives from the supply and demand in force in the market at each valuation date.

Since September 2019, the real estate market has faced certain changes in terms of its operation as a consequence of the implementation of regulations applicable to the foreign exchange market. In general terms, the measure adopted on September 1, 2019 by the BCRA sets forth that exporters of goods and services should settle foreign currency from abroad in the local exchange market 5 days after the collection of such funds, at the latest. Furthermore, it provides that legal entities residing in Argentina may buy foreign currency without restrictions for imports or payments of debts on the maturity date thereof, although they shall apply for the BCRA´s prior authorization for the purposes of: buying foreign currency in order to form external assets, prepaying debts, making remittances of profits and dividends abroad or transferring funds abroad. Likewise, pursuant to such regulations, access to the market by natural persons for the purchase of dollars was restricted. Afterwards, the BCRA implemented stricter measures, further limiting access to the foreign exchange market (see Note 34 to these consolidated financial statements).

At present, purchase and sales transactions for office buildings may be settled in Pesos (by using an implicit foreign exchange rate higher than the official one) or in dollars. However, due to the restrictions applicable to access to dollars to which market participant are subject (most of them are domestic companies and local subsidiaries of foreign companies, all of them subject to the foreign exchange restrictions described above), the chances that a natural person or legal entity may obtain the funds required to execute a transaction in dollars are remote. Consequently, the most probable scenario is that any sale of office buildings/reserves be settled in Pesos at an implicit foreign exchange rate higher than the official one. This is evidenced by the transactions consummated by the Company prior to and after the closing of these financial statements. (See Note 4 and Note 35 to the consolidated financial statements). Therefore, the Company has valued its office buildings and land reserves as of the fiscal year-end taking into account the circumstances described above, which represents a gain with respect to the values previously recorded.

In certain situations, it is complex to determine reliably the fair value of developing properties. In order to assess whether the fair value of a developing property can be determined reliably, management considers the following factors, among others:

● The provisions of the construction contract.

● The stage of completion.

● Whether the project / property is standard (typical for the market) or non-standard.

● The level of reliability of cash inflows after completion.

● The specific development risk of the property.

● Previous experience with similar constructions.

● Status of construction permits.

There were no changes in the valuation techniques during the year.

Valuation techniques used to estimate the Fair Value of Investment Properties for the Israel operations center:

Valuations were performed using the DCF method. The discount rates used by appraisers in Israel are mainly in the range of 7% - 9% and are established taking into account the type of property, purpose, location, the level of rent compared to the market price and quality of the tenants.

When determining the value of office buildings, buildings aimed at to the technology sector and commercial spaces (mainly located in the city center and in high-tech office parks with high-quality tenants), the discount rates mainly used are between 7% to 9%, while for workshop, storage and industry buildings (mainly located in peripheral areas of the city) they are valuated using a discount rate between 7.75% -9%.

There were no changes in valuation techniques during the years ended June 30, 2020 and 2019.

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The following table presents information regarding the fair value measurements of investment properties using significant unobservable inputs (Level 3):

				Sensitivity (i)
				06.30.20		06.30.19
Description	Valuation technique	Parameters	Range fiscal year 2019 / (2018)	Increase	Decrease	Increase	Decrease
Rental<br>properties in Israel - Offices (Level 3)	Discounted<br>cash flows	Discount<br>rate	7.50%<br>to 9.75% /	(437)	581
			(7.00%<br>to 9.00% )			(4,108)	4,686
		Weighted<br>average rental value per square meter (m2) per month, in<br>NIS	NIS<br>77 / (NIS 63)/	394	(394)
						7,227	(7,227)
Rental<br>properties in Israel - Commercial use (Level 3)	Discounted<br>cash flows	Discount<br>rate	7.50%<br>to 7.80% /	(214)	281
			(7.00%<br>to 9.00%)			(2,079)	2,376
		Weighted<br>average rental value per square meter (m2) per month, in<br>NIS	NIS<br>41 / (NIS 87)	177	(177)
						3,280	(3,280)
Rental<br>properties in Israel - Industrial use (Level 3)	Discounted<br>cash flows	Discount<br>rate	N/A	N/A	N/A
			(7.75%<br>to 9.00%)			(772)	877
		Weighted<br>average rental value per square meter (m2) per month, in<br>NIS	N/A<br>/ (NIS 31)	N/A	N/A
						1,731	(1,731)
Rental<br>properties in USA - HSBC Building (Level 3)	Discounted<br>cash flows	Discount<br>rate	4.75% / (6.25%)	(6,523)	8,082	(2,348)	2,487
		Weighted<br>average rental value per square meter (m2) per month, in<br>US$	$US 79 /(US$ 73)	6,765	(6,765)
						5,137	(5,137)
Rental<br>properties in USA - Las Vegas project (Level 3)	Discounted<br>cash flows	Discount<br>rate	6.50% / (8.50%)	(1,929)	2,704	(503)	531
		Weighted<br>average rental value per square meter (m2) per month, in<br>US$	$US 25 /(US$ 33)	(1,407)	1,407
						631	(631)
Shopping<br>Malls in Argentina (Level 3)	Discounted<br>cash flows	Discount<br>rate	12.18% / (12.10% )	(4,577)	5,606	(5,025)	6,267
		Growth<br>rate	2.3% / (3%)	2,182	(1,782)	2,363	(1,896)
		Inflation	(*)	9,530	(7,839)	4,401	(4,028)
		Devaluation	(*)	(4,430)	5,415	(4,670)	6,714
Plot<br>of land in Argentina (Level 3)	Comparable<br>with incidence adjustment	Value<br>per square meter (m2)	Ps.<br>32,456 / (Ps. 15,408)	2,324	(2,324)	1,438	(1,438)
		%<br>of incidence	30% / (30%)	7,747	(7,747)	4,799	(4,799)
Properties<br>under development in Israel (Level 3)	Estimated<br>fair value of the investment property after completing the<br>construction	Weighted<br>average construction cost per square meter (m2) in NIS	5,787<br>NIS/m2 /
			(5,787<br>NIS/m2)
		Annual<br>weighted average discount rate	7.00%<br>to 9.00% /	(1,407)	1,407
			(7.00%<br>to 9.00%)			(988)	988

(*) For the next 5 years, an average AR$ / US$ exchange rate with an upward trend was considered, starting at Ps. 64.39 (corresponding to the year ended June 30, 2020) and arriving at Ps.262.56. In the long term, a nominal devaluation rate of 2.1% calculated based on the quotient between inflation in Argentina and the United States is assumed. The considered inflation shows a downward trend, which starts at 47.9% (corresponding to the year ended June 30, 2020) and stabilizes at 23.2% after 5 years.

(i) Considering an increase or decrease of: 100 points for the discount and growth rate in Argentina, 10% for the incidence and inflation, 10% for the devaluation, 50 points for the discount rate of Israel and USA, and 1% for the value of the m2.

10. Property, plant and equipment

Changes in the Group’s property, plant and equipment for the years ended June 30, 2020 and 2019 were as follows:

	Year ended June 30, 2020
	Agricultural establishments	Buildings and facilities	Machinery and equipment	Communication networks	Others	Total
Net book amount at the June 30, 2018	-	4,484	821	23,022	5,682	34,009
Costs	-	11,157	2,500	93,992	10,992	118,641
Accumulated<br>depreciation	-	(6,673)	(1,679)	(70,970)	(5,310)	(84,632)
Balances at June 30, 2018	-	4,484	821	23,022	5,682	34,009
Additions	-	188	105	4,951	2,448	7,692
Disposals	-	-	(2)	(46)	(17)	(65)
Currency<br>translation adjustment	-	(104)	(21)	(600)	(50)	(775)
Transfer	-	205	20	-	(212)	13
Depreciation<br>charges (ii)	-	(465)	(100)	(4,076)	(1,886)	(6,527)
Net book amount at the June 30, 2019	-	4,308	823	23,251	5,965	34,347
Costs	-	11,446	2,602	98,296	13,161	125,505
Accumulated<br>depreciation	-	(7,138)	(1,779)	(75,045)	(7,196)	(91,158)
Balances at June 30, 2019	-	4,308	823	23,251	5,965	34,347
Additions	39	486	71	3,679	1,832	6,107
Disposals	-	(67)	(5)	(3,442)	(44)	(3,558)
Incorporation<br>by business combination	4,332	1,738	406	-	100	6,576
Deconsolidation	-	(455)	(639)	-	(47)	(1,141)
Reclassification<br>to assets assets held for sale	-	(295)	-	-	-	(295)
Currency<br>translation adjustment	334	525	204	3,822	1,381	6,266
Transfers	-	(264)	(16)	406	(406)	(280)
Depreciation<br>charges (i)	(19)	(428)	(86)	(4,986)	(1,885)	(7,404)
Net book amount at the June 30, 2020	4,686	5,548	758	22,730	6,896	40,618
Costs	10,226	13,003	4,826	108,657	13,880	150,592
Accumulated<br>depreciation	(5,540)	(7,455)	(4,068)	(85,927)	(6,984)	(109,974)
Balances at June 30, 2020	4,686	5,548	758	22,730	6,896	40,618

(i) Includes furniture and fixtures and vehicles.

(ii) As of June 30, 2020 and 2019, depreciation charges of property, plant and equipment were recognized: Ps. 6,441 and Ps. 6,972 in "Costs", Ps. 835 and Ps. 440 in "General and administrative expenses" and Ps. 164 and Ps. 115 in "Selling expenses", respectively in the Statements of Income (Note 23). In addition, a depreciation charge in the amount of Ps. 4,323, was recognized in "Discontinued operations" as of June 30, 2018. Likewise, a charge of Ps. 13 has been made in “Discontinued operations” as of June 30, 2020.

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11. Trading properties

Changes in the Group’s trading properties for the fiscal years ended June 30, 2020 and 2019 were as follows:

	Year ended June 30, 2020
	Completed properties	Properties under development	Undeveloped sites	Total
At June 30, 2018	6,293	13,052	4,413	23,758
IFRS<br>15 adjustments	(1,677)	(7,285)	-	(8,962)
Additions	-	3,879	66	3,945
Capitalized<br>financial costs	-	18	-	18
Currency<br>translation adjustment	(683)	(539)	(235)	(1,457)
Transfers	3,736	(3,017)	(662)	57
Impairment	-	-	(49)	(49)
Disposals	(4,777)	(3,534)	-	(8,311)
At June 30, 2019	2,892	2,574	3,533	8,999
Additions	26	1,854	606	2,486
Desconsolidation	-	(167)	-	(167)
Capitalized<br>financial costs	-	13	-	13
Currency<br>translation adjustment	324	33	586	943
Transfers	1,333	(1,066)	(36)	231
Disposals	(2,394)	(2,352)	(38)	(4,784)
At June 30, 2020	2,181	889	4,651	7,721
	June 30, 2020	June 30, 2019
---	---	---
Non-current	5,228	8,436
Current	2,493	563
Total	7,721	8,999

(i) Includes Zetol and Vista al Muelle plots of land, which have been mortgaged to secure Group's borrowings. The net book value amounted to Ps. 438 and Ps. 438 as of June 30, 2019 and 2018, respectively. Additionally, the Group has contractual obligations not provisioned related to these plot of lands committed when certain properties were acquired or real estate projects were approved, and amount to Ps. 501 and Ps. 622, respectively. Both projects are expected to be completed in 2029.

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IRSA Inversiones y Representaciones Sociedad Anónima

12. Intangible assets

Changes in the Group’s intangible assets for the years ended June 30, 2020 and 2019 were as follows:

	Year ended June 30, 2020
	Goodwill	Trademarks	Licenses	Customer relations	Information systems and software	Contracts and others	Total
Balance at June 30, 2018	7,459	7,366	2,816	5,509	3,988	2,542	29,680
Costs	7,459	7,821	10,463	16,576	7,465	6,919	56,703
Accumulated<br>amortization	-	(455)	(7,647)	(11,067)	(3,477)	(4,377)	(27,023)
Net book amount at June 30, 2018	7,459	7,366	2,816	5,509	3,988	2,542	29,680
Additions	-	-	-	17	1,632	2,357	4,006
Impairment	(198)	-	-	-	-	-	(198)
Disposals	-	-	-	-	(66)	-	(66)
Currency<br>translation adjustment	(199)	(218)	(105)	(335)	(61)	54	(864)
Amortization<br>charges (i)	-	(132)	(232)	(1,798)	(1,388)	(1,445)	(4,995)
Balance at June 30, 2019	7,062	7,016	2,479	3,393	4,105	3,508	27,563
Costs	7,062	7,604	10,192	21,832	6,945	9,270	62,905
Accumulated<br>amortization	-	(588)	(7,713)	(18,439)	(2,840)	(5,762)	(35,342)
Net book amount at June 30, 2019	7,062	7,016	2,479	3,393	4,105	3,508	27,563
Additions	-	-	-	-	1,661	3,192	4,853
Disposals	-	-	-	(19)	(147)	(69)	(235)
Deconsolidation	(3,508)	-	-	-	(24)	-	(3,532)
Assets<br>incorporated by business combination	-	-	-	41	20	-	61
Currency<br>translation adjustment	2,521	1,327	426	464	735	744	6,217
Amortization<br>charges (i)	-	(131)	(300)	(1,214)	(1,804)	(1,567)	(5,016)
Balance at June 30, 2020	6,075	8,212	2,605	2,665	4,546	5,808	29,911
Costs	6,075	9,066	12,153	25,548	8,520	14,386	75,748
Accumulated<br>amortization	-	(854)	(9,548)	(22,883)	(3,974)	(8,578)	(45,837)
Net book amount at June 30, 2020	6,075	8,212	2,605	2,665	4,546	5,808	29,911

(iii) Amortization charge was recognized in the amount of Ps. 379 and Ps. 1.133 under "Costs", in the amount of Ps. 1,761 and Ps. 1,452 under "General and administrative expenses" and Ps. 2,907 and Ps. 2,409 under "Selling expenses" as of June 30, 2020 and 2019, respectively in the Statements of Income (Note 24).

The goodwill allocated to telecommunication in Israel amounts to NIS 268 (Ps. 5,868 at the exchange rate at the end of the financial year 2020), the one assigned to supermarkets amounted to NIS 192 and the assigned to Israel real state amounted to NIS 113. The rest is goodwill that is allocated to the real estate segment of Argentina. The only remained goodwill is the one allocated to Telecomunication.

Goodwill impairment test

The Group performs an annual impairment test of the goodwill. For fiscal year 2020, the recoverable value obtained for said test corresponding to the CGUs where the goodwill is assigned (Israel's Telecommunications) was calculated based on the fair value (market value) minus the costs of sale.

For the fiscal year 2019, based on the significant decrease in the market value of Cellcom and its results in the last financial year, caused by the greater competition in the cell phone market in Israel as a result of the entry of new competitors, the Group calculated the recoverable value at the end of the year of the telecommunications CGU based on the value in use of the assets. This test resulted in the goodwill attributable to Cellcom for an amount of Ps. 4,919 (NIS 268) being recoverable.

The value in use as of June 30, 2019, was determined by an independent appraiser and was estimated at Ps. 90,60 (NIS 4,936). There was no impairment.

The cash flow was calculated based on the budgets approved by management covering a period of 5 years. Subsequent cash flows were estimated based on the long-term growth rate. The main data and assumptions used in the calculation of the value in use were the following:

	June 30, 2019<br>(NIS)
Net value of the<br>CGU net of taxes	NIS<br>294
Value of the net<br>operating assets of the telecommunications CGU of Israel (including<br>brands and excluding goodwill)	NIS<br>3,668
Value of goodwill<br>of the CGU	NIS<br>268
Annual discount<br>rate after tax	8.5%
Long-term growth<br>rate	1.5%
Long-term market<br>share	25%
ARPU (average<br>monthly income per user) during the representative term (excludes<br>income from international hosting and roaming)	NIS<br>55.50

The recoverable amount of the CGU would be equal to the book value in the scenarios in which the relevant variables are the following, in the event that the rest of the variables remain constant:

F-62

Annual net discount rate after taxes 9.20%

ARPU (average monthly income per user) during the representative term (excludes income from international hosting and roaming) NIS 53

13. Rights of use of assets

Below is the composition of the rights of use of the Group´s assets as of June 30, 2020 and June 30, 2019:

	June 30, 2020	June 30, 2019
Real<br>Estate	4,431	-
Telecommunications	11,846	-
Machinery<br>and equipment	14	-
Others	5,088	-
Total Right-of-use assets	21,379	-
Non-current	21,379	-
Total	21,379	-

Changes in the Group´s rights of use during the fiscal year ended June 30, 2020, were as follows:

	June 30, 2020	June 30, 2019
IFRS<br>16 inicial adjustments	15,205	-
Additions<br>(i)	8,710	-
Transfer	170	-
Amortization<br>charges	(5,072)	-
Deconsolidation	(45)	-
Currency<br>translation adjustment	2,411	-
Total	21,379	-

(i) includes incorporation by business combination

Depreciation charge for rights of use is detailed below:

	June 30, 2020	June 30, 2019
Real<br>Estate	579	-
Telecommunications	3,397	-
Others	1,096	-
Total depreciation of right-of-use assets	5,072	-

Other charges to income related to rights of use were as follows: Ps. 548 (interest)

	June 30, 2020
Interests	(58)
Results<br>from short-term leases	12,279

The average discount rate and the term of liability for lease recognized as of June 30, 2020 are detailed below:

Center of Operations in<br>Argentina		Center of Operations in Israel
Average discount rate	Maturity date	Average discount rate	Maturity date
10.61%	2023-2041	3%	2022-2090

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14. Financial instruments by category

The following note presents the financial assets and financial liabilities by category and a reconciliation to the corresponding line in the Consolidated Statements of Financial Position, as appropriate. Since the line items “Trade and other receivables” and “Trade and other payables” contain both financial instruments and non-financial assets or liabilities (such as prepayments, trade receivables, trade payables in-kind and tax receivables and payables), the reconciliation is shown in the columns headed “Non-financial assets” and “Non-financial liabilities”. Financial assets and liabilities measured at fair value are assigned based on their different levels in the fair value hierarchy.

IFRS 9 defines the fair value of a financial instrument as the amount for which an asset could be exchanged, or a financial liability settled, between knowledgeable, willing parties in an arm’s length transaction. All financial instruments recognized at fair value are allocated to one of the valuation hierarchy levels of IFRS 7. This valuation hierarchy provides for three levels.

In the case of Level 1, valuation is based on quoted prices (unadjusted) in active markets for identical assets and liabilities that the Company can refer to at the date of valuation. In the case of Level 2, fair value is determined by using valuation methods based on inputs directly or indirectly observable in the market. If the financial instrument concerned has a fixed contract period, the inputs used for valuation must be observable for the whole of this period. In the case of Level 3, the Group uses valuation techniques not based on inputs observable in the market. This is only permissible insofar as no market data is available. The inputs used reflect the Group’s assumptions regarding the factors which market players would consider in their pricing.

The Group’s Finance Division has a team in place in charge of estimating the valuation of financial assets required to be reported in the Consolidated Financial Statements, including the fair value of Level-3 instruments. The team directly reports to the Chief Financial Officer ("CFO"). The CFO and the valuation team discuss the valuation methods and results upon the acquisition of an asset and, as of the end of each reporting period.

According to the Group’s policy, transfers among the several categories of valuation are recognized when occurred, or when there are changes in the prevailing circumstances requiring the transfer.

Financial assets and financial liabilities as of June 30, 2020 are 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, 2020
Assets as per Statement of Financial Position
Trade<br>and other receivables (excluding the allowance for doubtful<br>accounts and other receivables)	53,134	-	-	-	53,134	15,771	68,905
Investments<br>in financial assets:
-<br>Public companies’ securities	-	618	248	-	866	-	866
-<br>Private companies’ securities	-	-	-	3,132	3,132	-	3,132
-<br>Deposits	1,029	66	-	-	1,095	-	1,095
-<br>Bonds	-	9,940	1,555	-	11,495	-	11,495
-<br>Investments in financial assets with quotation	-	6,994	872	250	8,116	-	8,116
Derivative<br>financial instruments:
-<br>Foreign-currency future contracts	-	-	139	-	139	-	139
-<br>Others	66	-	22	153	241	-	241
Restricted<br>assets (i)	8,698	-	-	-	8,698	-	8,698
Financial<br>assets available for sale:
-<br>Clal	-	3,636	-	-	3,636	-	3,636
Cash<br>and cash equivalents:
-<br>Cash at bank and on hand	26,562	-	-	-	26,562	-	26,562
-<br>Short-term investments	67,420	3,294	-	-	70,714	-	70,714
Total assets	156,909	24,548	2,836	3,535	187,828	15,771	203,599

F-64

	Financial liabilities at amortized cost	Financial liabilities at fair value through profit or<br>loss			Subtotal financial liabilities	Non-financial liabilities	Total
		Level 1	Level 2	Level 3
June 30, 2020
Liabilities as per Statement of Financial Position
Trade<br>and other payables	26,898	-	-	-	26,898	7,380	34,278
Borrowings<br>(excluding finance leases)	404,954	-	-	-	404,954	-	404,954
Derivative<br>financial instruments:
-<br>Foreign-currency future contracts	-	-	149	-	149	-	149
-<br>Others	-	-	1,028	22	1,050	-	1,050
-<br>Forwards	-	-	66	-	66	-	66
Total liabilities	431,852	-	1,243	22	433,117	7,380	440,497

Financial assets and financial liabilities as of June 30, 2019 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, 2019
Assets as per Statements of Financial Position
Trade<br>and other receivables (excluding the allowance for doubtful<br>accounts and other receivables)	44,602	-	-	-	44,602	11,974	56,576
Investments<br>in financial assets:	-	-	-	-	-	-	-
-<br>Public companies’ securities	-	1,472	212	43	1,727	-	1,727
-<br>Private companies’ securities	-	-	-	2,810	2,810	-	2,810
-<br>Deposits	5,637	55	-	-	5,692	-	5,692
-<br>Bonds	-	25,738	1,634	1,536	28,908	-	28,908
-<br>Investments in financial assets with quotation	-	14,209	671	-	14,880	-	14,880
Derivative<br>financial instruments	-	-	-	-	-	-	-
-<br>Foreign-currency future contracts	-	-	45	-	45	-	45
-<br>Others	-	-	18	146	164	-	164
Restricted<br>assets (i)	11,478	-	-	-	11,478	-	11,478
Financial<br>assets available for sale:	-	-	-	-	-	-	-
-<br>Clal	-	24,370	-	-	24,370	-	24,370
Cash<br>and cash equivalents:	-	-	-	-	-	-	-
-<br>Cash at bank and on hand	10,348	-	-	-	10,348	-	10,348
-<br>Short term investments	80,605	2,107	-	-	82,712	-	82,712
Total assets	152,670	67,951	2,580	4,535	227,736	11,974	239,710
	Financial liabilities at amortized cost	Financial liabilities at fair value through profit or<br>loss			Subtotal financial liabilities	Non-financial liabilities	Total
---	---	---	---	---	---	---	---
		Level 1	Level 2	Level 3
June 30, 2019
Liabilities as per Statement of Financial Position
Trade<br>and other payables	22,723	-	-	-	22,723	8,533	31,256
Borrowings<br>(excluding finance leases)	480,867	-	-	-	480,867	-	480,867
Derivative<br>financial instruments:	-
-<br>Swaps	-	-	206	-	206	-	206
-<br>Others	-	-	1,340	74	1,414	-	1,414
Total liabilities	503,590	-	1,546	74	505,210	8,533	513,743

(i) The fair value of financial assets and liabilities at their amortized cost does not differ significantly from their book value, except for borrowings (Note 20).

Liabilities carried at amortized cost also include liabilities under finance leases where the Group is the lessee and which therefore have to be measured in accordance with IAS 17 “Leases”. The categories disclosed are determined by reference to IFRS 9. Finance leases are excluded from the scope of IFRS 7 “Financial Instruments Disclosures”. Therefore, finance leases have been shown separately.

The following are details of the book value of financial instruments recognized, which were offset in the statements of financial position:

	As<br>of June 30, 2020			As<br>of June 30, 2019
	Gross amounts recognized	Gross amounts offset	Net<br>amount presented	Gross amounts recognized	Gross amounts offset	Net<br>amount presented
Financial<br>assets
Trade and other<br>receivables (excluding the allowance for doubtful accounts and<br>other receivables)	55,510	(2,376)	53,134	46,929	(2,327)	44,602
Financial<br>liabilities
Trade and other<br>payables	29,274	(2,376)	26,898	25,050	(2,327)	22,723

Income, expense, gains and losses on financial instruments can be assigned to the following categories:

F-65

	Financial assets / liabilities at amortized cost	Financial assets / liabilities at fair value through profit or<br>loss	Total
June 30, 2020
Interest<br>income (i)	216	-	216
Interest<br>expense (i)	(6,347)	-	(6,347)
Foreign<br>exchange gains, net (i)	(6,722)	-	(6,722)
Dividend<br>income	15	-	15
Fair<br>value gain on financial assets at fair value through profit or loss<br>(i)	-	362	362
Gain<br>on derivative financial instruments, net (i)	-	(393)	(393)
Other<br>finance costs (i)	(115)	-	(115)
Total financial instruments	(12,953)	(31)	(12,984)
	Financial assets / liabilities at amortized cost	Financial assets / liabilities at fair value through profit or<br>loss	Total
---	---	---	---
June 30, 2019
Interest<br>income (i)	187	-	187
Interest<br>expense (i)	(5,034)	-	(5,034)
Foreign<br>exchange gains, net (i)	1,080	-	1,080
Dividend<br>income	15	-	15
Fair<br>value gain on financial assets at fair value through profit or loss<br>(i)	-	735	735
Gain<br>on derivative financial instruments, net (i)	-	600	600
Other<br>finance costs (i)	(22)	-	(22)
Total financial instruments	(3,774)	1,335	(2,439)
	Financial assets / liabilities at amortized cost	Financial assets / liabilities at fair value through profit or<br>loss	Total
---	---	---	---
June 30, 2018
Interest<br>income (i)	703	-	703
Interest<br>expense (i)	(4,315)	-	(4,315)
Foreign<br>exchange gains, net (i)	(14,235)	-	(14,235)
Dividend<br>income	105	-	105
Fair<br>value gain on financial assets at fair value through profit or loss<br>(i)	-	1,970	1,970
Gain<br>on derivative financial instruments, net (i)	-	433	433
Other<br>finance costs (i)	(41)	-	(41)
Total financial instruments	(17,783)	2,403	(15,380)

(i)

Included within “Financial results, net“in the Statements of Income.

Clal

Clal is a holding company that mainly operates in the insurance and pension markets and in segments of pension funds. The Company holds assets and other businesses (such as insurance agencies) and is one of the largest insurance groups in Israel. Clal mainly develops its activities in three operating segments: long-term savings, general insurance and health insurance.

Given that IDBD failed to meet the requirements set forth to have control over an insurance company, on August 21, 2013, the Commissioner required that IDBD granted an irrevocable power of attorney to Mr. Moshe Tery ("the Trustee") for the 51% of the shareholding capital and vote interests in Clal, thus transferring control over that investee. From such date, IDBD recognized its equity interest in Clal as a financial asset held for sale, at fair value through profit or loss.

On December 30, 2014, the Commissioner sent an additional letter setting a term by which IDBD’s control over and equity interests in Clal were to be sold and giving directions as to the Trustee’s continuity in office, among other aspects. Refer to Note 4 and Note 34 of these financial statements for the sale of Clal shares.

The following table presents the changes in Level 3 financial instruments as of June 30, 2020 and 2019:

F-66

	Derivative financial instruments - Forwards	Investments in financial assets - Private companies'<br>securities	nvestments in financial assets - Others	Derivative financial instruments	Total
Balances at June 30, 2018	(55)	2,796	2,222	-	4,963
Additions<br>and acquisitions	-	185	-	-	185
Transfer<br>between levels	-	165	(212)	111	64
Transfer<br>of trade and other receivables	-	-	-	-	-
Currency<br>translation adjustment	-	(70)	(32)	20	(82)
Write<br>off	-	-	-	-	-
Gain<br>/ (loss) for the year (i)	(19)	(266)	(399)	15	(669)
Balances at June 30, 2019	(74)	2,810	1,579	146	4,461
Additions<br>and acquisitions	-	38	-	-	38
Transfer<br>between levels	-	-	-	378	378
Currency<br>translation adjustment	(8)	512	114	264	882
Write<br>off	-	-	(1,052)	(657)	(1,709)
Gain<br>/ (loss) for the year (i)	60	(228)	(391)	22	(537)
Balances at June 30, 2020	(22)	3,132	250	153	3,513

(i) Included within “Financial results, net” in the Statements of income.

During the fiscal years ended June 30, 2020 and 2019, there were no transfers between levels of hierarchy of the fair value. When there are no quoted prices available in an active market, fair values (especially derivative instruments) are based on recognized valuation methods. The Group uses a range of valuation models for the measurement of Level 2 and Level 3 instruments, details of which may be obtained from the following table.

Description	Pricing model / method	Parameters	Fair value hierarchy	Range
Interest<br>rate swaps	Cash<br>flows - Theoretical price	Interest<br>rate futures contracts and cash flows	Level<br>2	-
Investments<br>in financial assets - Other private companies’ securities<br>(*)	Cash<br>flow / NAV - Theoretical price	Projected revenue<br>discounted at the discount rate<br><br><br>The value is<br>calculated in accordance with shares in the equity funds on the<br>basis of their Financial Statements, based on fair value or<br>investments assessments.	Level<br>3	1 - 3.5
Investments<br>in financial assets - Others	Discounted<br>cash flows - Theoretical price	Projected revenue<br>discounted at the discount rate<br><br><br>The value is<br>calculated in accordance with shares in the equity funds on the<br>basis of their Financial Statements, based on fair value or<br>investment assessments.	Level<br>3	1 - 3.5
Derivative<br>financial instruments Forwards	Theoretical<br>price	Underlying<br>asset price and volatility	Level 2 and<br>3	-

(*) An increase in the discount rate would decrease the value of investments in private companies, while an increase in projected revenues would increase their value.

As of June 30, 2020, there are no changes in economic or business circumstances that affect the fair value of the Group's financial assets and liabilities.

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15. Trade and other receivables

Group’s trade and other receivables as of June 30, 2020 and 2019 were as follows:

	June 30, 2020	June 30, 2019
Sale,<br>leases and services receivables	41,397	38,172
Less:<br>Allowance for doubtful accounts	(4,021)	(2,856)
Total trade receivables	37,376	35,316
Prepaid<br>expenses	14,529	8,593
Borrowings,<br>deposits and others	10,797	4,434
Advances<br>to suppliers	1,086	1,394
Tax<br>receivables	866	686
Others	230	3,297
Total other receivables	27,508	18,404
Total trade and other receivables	64,884	53,720
Non-current	24,898	19,033
Current	39,986	34,687
Total	64,884	53,720

Book amounts of Group's trade and other receivables in foreign currencies are detailed in Note 31.

The fair value of current receivables approximates their respective carrying amounts because, due to their short-term nature, the effect of discounting is not considered significant.

Trade accounts receivables are generally presented in the Statements of Financial Position net of allowances for doubtful accounts. Impairment policies and procedures by type of receivables are discussed in detail in Note 2. Movements on the Group’s allowance for doubtful accounts were as follows:

	June 30, 2020	June 30, 2019
Beginning of the year	2,856	1,928
Adjustments<br>previous periods (IFRS 9)	-	209
Additions	1,107	840
Recovery	(117)	(66)
Currency<br>translation adjustment	1,146	683
Deconsolidation	(22)	-
Receivables<br>written off during the period/year as uncollectable	(772)	(500)
Transfer<br>to assets held for sale	(22)	-
Incorporation<br>by business combination	19	-
Inflation<br>adjustment	(174)	(238)
End of the year	4,021	2,856

(*) The creation and release of the provision for impaired receivables have been included in “Selling expenses” in the Statements of Income (Note 24).

The Group’s trade receivables comprise several classes. The maximum exposure to credit risk at the reporting date is the carrying amount of each class of receivables (see Note 5). The Group also has receivables from related parties neither of them is due nor impaired.

Due to the distinct characteristics of each type of receivables, an aging analysis of past due unimpaired and impaired receivables is shown by type and class, as of June 30, 2020 and 2019 (a column of non-past due receivables is also included so that the totals can be reconciled with the amounts appearing on the Statement of Financial Position):

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IRSA Inversiones y Representaciones Sociedad Anónima

	Past due
	Up to 3 months	From 3 to 6 months	Over 6 months	Non-past due	Impaired	Total	% of representation
Leases<br>and services	419	60	94	2,495	748	3,816	9.22%
Consumer<br>financing	-	-	-	-	17	17	0.04%
Sale<br>of properties and developments	203	5	5	767	1	981	2.37%
Agricultural<br>products	-	-	-	14,721	504	15,225	36.78%
Sale<br>of communication equipment	1,686	284	131	1,248	22	3,371	8.14%
Telecommunication<br>services	1,600	-	481	13,177	2,729	17,987	43.45%
Total as of June 30, 2020	3,908	349	711	32,408	4,021	41,397	100.00%
Leases<br>and services	452	134	189	2,970	508	4,253	11.14%
Hotel<br>services	-	-	-	158	-	158	0.42%
Consumer<br>financing	-	-	-	-	25	25	0.07%
Sale<br>of properties and developments	92	15	15	2,609	28	2,759	7.23%
Sale<br>of communication equipment	-	-	-	15,323	220	15,543	40.71%
Telecommunication<br>services	1,726	-	532	11,101	2,075	15,434	40.43%
Total as of June 30, 2019	2,270	149	736	32,161	2,856	38,172	100.00%

16. Cash flow information

Following is a detailed description of cash flows generated by the Group’s operations for the years ended June 30, 2020, 2019 and 2018:

	Note	06.30.2020	06.30.2019	06.30.2018
Profit<br>/ (loss) for the period		25,548	(41,307)	35,755
Loss<br>for the period from discontinued operations		3,546	1,704	(15,773)
Adjustments<br>for:				-
Income<br>tax	18	7,216	(4,845)	(11,455)
Amortization<br>and depreciation	20	519	402	324
Loss<br>from disposal of property, plant and equipment		-	-	-
Net<br>gain / (loss) from fair value adjustment of investment<br>properties		(36,313)	41,737	(20,627)
Share-based<br>compensation		-	68	4
Impairment<br>associates		-	-	-
Impairment<br>of goodwill		-	198	-
Impairment<br>of properties for sale				-
Impairment<br>of others assets				-
Net<br>gain from disposal of intangible assets		-	-	-
Gain<br>from disposal of subsidiary and associates		-	162	2
Gain<br>from business combination		-	-	-
Financial<br>results, net		14,136	2,070	1,944
Provisions<br>and allowances		897	980	270
Share<br>of (profit) /loss of associates and joint ventures	7	(7,771)	7,588	3,551
Changes in operating assets and liabilities:				-
Decrease<br>in inventories		5	25	309
Increase<br>in trading properties		(424)	(937)	(357)
Increase<br>in restricted assets		(1,254)	-	-
Decrease<br>/ (increase) in trade and other receivables		2,045	(49)	(728)
Decrease<br>in trade and other payables		(328)	(1,305)	1,354
Decrease<br>in salaries and social security liabilities		(207)	(140)	161
Decrease<br>in provisions		(572)	(85)	(64)
Net cash generated by continuing operating activities before income<br>tax paid		7,043	6,315	(5,330)
Net<br>cash generated by discontinued operating activities before income<br>tax paid		27,151	24,308	29,971
Net cash generated by operating activities before income tax<br>paid		34,194	30,623	24,641

The following table shows balances incorporated as result of business combination / deconsolidation or reclassification of assets and liabilities held for sale of subsidiaries:

F-69

IRSA Inversiones y Representaciones Sociedad Anónima

	June 30, 2020	June 30, 2019
Investment<br>properties	167,513	-10,489
Property,<br>plant and equipment	-5,433	-68,941
Trading<br>properties	167	-
Intangible<br>assets	3,471	-14,812
Investments<br>in associates and joint ventures	2,710	-874
Restricted<br>assets	230	-219
Income<br>tax and MPIT credit	47	-
Trade<br>and other receivables	-9,746	-28,497
Right-of-use<br>assets	-4,281	-
Investments<br>in financial assets	14,581	-6,813
Derivative<br>financial instruments	-40	-55
Inventories	-2,695	-14,114
Borrowings	-94,822	50,387
Deferred<br>income tax liabilities	-21,753	6,693
Trade<br>and other payables	2,490	54,895
Lease<br>liabilities	2,236	-
Provisions	61	1,033
Employee<br>benefits	115	3,001
Salaries<br>and social security liabilities	149	5,719
Income<br>tax expense	-115	17
Net amount of non-cash assets incorporated / held for<br>sale	54,885	-23,069
Cash<br>and cash equivalents	-6,463	-13,295
Non-controlling<br>interest	54,629	17,543
Goodwill	-405	177
Net amount of assets incorporated / held for sale	102,646	-18,644
Seller<br>Financed Amount	-	-
Net (outflow) inflow of cash and cash equivalents / assets and<br>liabilities held for sale	102,646	-18,644

The following table shows a detail of significant non-cash transactions occurred in the years ended June 30, 2020, 2019 and 2018:

	06.30.2020	06.30.2019	06.30.2018
Decrease<br>in associates and joint ventures through an increase in assets held<br>for sale	2,230	-	105
Increase<br>of investment properties through a decrease of financial<br>assets	299	-	9
Increase<br>of properties for sale through an increase in<br>borrowings	13	18	5
Changes<br>in non-controlling interest through a decrease in trade and other<br>receivables	-	-	3,303
Increase<br>of property, plant and equipment through an increase of trade and<br>other payables	796	919	5,231
Increase<br>of intangible assets through an increase of trade and other<br>payables	532	355	12
Distribution<br>of dividends on shares	634	2,811	-
Decrease<br>in associates and joint ventures through an increase in trade and<br>other receivables	-	-	26
Increase<br>in property, plant and equipment through increased<br>borrowings	-	6	22
Registration<br>of investment properties through a decrease in credits for trade<br>and other receivables	30	618	138
Increase<br>in financial instruments through a decrease in investments in<br>associates and joint ventures	-	-	155
Issuance<br>of NCN	23	3,611	-
Increase<br>in trade and other receivables through increase in<br>borrowings	-	-	262
Distribution<br>of dividends to non-controlling interest pending<br>payment	1,896	(366)	(3,659)
Decrease<br>of in investments in associates and joint ventures through a<br>decrease in borrowings	-	9	477
Increase<br>of associates due to loss of control in subsidiaries	1,437	-	-
Decrease<br>in borrowings through a decrease in financial assets	2,642	-	-
Increase<br>in investment properties through an increase in trade and other<br>payables	765	759	318
Increase<br>of investment properties through an increase of<br>borrowings	87	251	65
Increase<br>in investment in associates through a decrease in investments in<br>financial assets	919	-	-
Increase<br>in investments in financial assets through a decrease in investment<br>properties	1,279	-	-
Increase<br>in rights of use through an increase in lease liabilities -<br>Adjustment of opening balances (IFRS 16)	15,205	-	-
Increase<br>in rights of use through an increase in lease<br>liabilities	8,710	-	-

17. Shareholders’ Equity

Share capital and share premium

The share capital of the Group is represented by common shares with a nominal value of Ps. 1 per share and one vote each. No other activity has been recorded for the fiscal years ended June 30, 2020, 2019 and 2018 in the capital accounts, other than those related to the acquisition of treasury shares.

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Inflation adjustment of share capital and treasury shares

The inflation adjustment related to share capital is allocated to an inflation adjustment reserve that forms part of shareholders' equity. The balance of this reserve could be applied only towards the issuance of common stock to shareholders of the Company.

Legal reserve

According to Law N° 19,550, 5% of the profit of the year is destined to the constitution of a legal reserve until it reaches the legal capped amount (20% of total capital). This legal reserve is not available for dividend distribution and can only be released to absorb losses. The Group reached the legal limit of this reserve.

Special reserve

The CNV, through General Ruling N° 562/9 and 576/10, has provided for the application of Technical Resolutions N° 26 and 29 of the FACPCE, which adopt the IFRS, as issued by the IASB, for companies subject to the public offering regime ruled by Law 17,811, due to the listing of their shares or corporate notes, and for entities that have applied for authorization to be listed under the mentioned regime. The Group has applied IFRS, as issued by the IASB, for the first time in the year beginning July 1st, 2012, being its transition date July 1st, 2011. Pursuant to CNV General Ruling N° 609/12, the Company set up a special reserve reflecting the positive difference between the balance of retained earnings disclosed in the first Financial Statements prepared according to IFRS and the balance of retained earnings disclosed in the last Financial Statements prepared in accordance with previously effective accounting standards. The reserve recorded amounted to Ps. 425, which as of June 30, 2017 were fully used to absorb the negative balances in the retained earnings account. During fiscal year ended June 30, 2017, the Company’s Board of Directors decided to change the accounting policy of investment property from the cost method to the fair value method, as allowed by IAS 40. For this reason, as of the transition date, figures have been modified and, hence, the special reserve as set forth by General Ruling CNV N° 609/12 has been increased to Ps. 10,121, which may only be reversed to be capitalized or to absorb potential negative balances under retained earnings.

Additional paid-in capital from treasury shares

Upon sale of treasury shares, the difference between the net realizable value of the treasury shares sold and the acquisition cost will be recognized, whether it is a gain or a loss, under the non-capitalized contribution account and will be known as “Treasury shares trading premium”.

Dividends

See note 4 to these financial statements on distribution of dividend(s) in kind.

18. Trade and other payables

Group’s trade and other payables as of June 30, 2019 and 2018 were as follows:

	June 30, 2020	June 30, 2019
Trade<br>payables	20,151	18,696
Advances<br>from sales, leases and services	2,850	4,857
Construction<br>obligations	438	1,432
Accrued<br>invoices	473	725
Deferred<br>income	153	146
Total trade payables	24,065	25,856
Dividends<br>payable to non-controlling interest	241	220
Taxes<br>payable	171	451
Construction<br>provisions	-	1,562
Other<br>payables	9,801	3,167
Total other payables	10,213	5,400
Total trade and other payables	34,278	31,256
Non-current	2,335	2,697
Current	31,943	28,559
Total	34,278	31,256

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).

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19. Provisions

The Group is subject to claims, lawsuits and other legal proceedings in the ordinary course of business, including claims from clients where a third party seeks reimbursement or damages. The Group’s responsibility under such claims, lawsuits and legal proceedings cannot be estimated with certainty. From time to time, the status of each major issue is evaluated and its potential financial exposure is assessed. If the potential loss involved in the claim or proceeding is deemed probable and the amount may be reasonably estimated, a liability is recorded. The Group estimates the amount of such liability based on the available information and in accordance with the provisions of the IFRS. If additional information becomes available, the Group will make an evaluation of claims, lawsuits and other outstanding proceeding, and will revise its estimates.

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

	Year ended June 30, 2020
	Legal claims (i)	Investments in associates and joint ventures (ii)	Site dismantling and remediation	Other provisions	Total
As of 06.30.18	2,465	5,870	395	2,285	11,015
Additions<br>(i)	692	4,028	-	292	5,012
Recovery	(108)	(9)	-	-	(117)
Used<br>during the period / year	(365)	-	(17)	-	(382)
Inflation<br>adjustment	(82)	-	-	-	(82)
Currency<br>translation adjustment	(32)	(568)	(9)	143	(466)
As of 06.30.19	2,570	9,321	369	2,720	14,980
Additions	477	-	36	-	513
Share<br>of los of associates	-	(8,032)	-	-	(8,032)
Incorporated<br>by business combination	60	-	-	-	60
Recovery	(46)	(1,086)	-	-	(1,132)
Used<br>during the period / year	(701)	-	-	(195)	(896)
Inflation<br>adjustment	(73)	-	-	-	(73)
Currency<br>translation adjustment	397	(185)	78	214	504
As of 06.30.20	2,684	18	483	2,739	5,924
	June 30, 2020	June 30, 2019
---	---	---
Non-Current	3,297	12,329
Current	2,627	2,651
Total	5,924	14,980

(i) Additions and recoveries are included in "Other operating results, net".

(ii) Corresponds to the equity interest in New Lipstick with negative equity in 2019 and Puerto Retiro in 2020 and 2019. Additions and recoveries are included in "Share of profit / (loss) of associates and joint ventures".

(iii) The Group’s companies are required to recognize certain costs related to the dismantling of assets and remediation of sites from the places where such assets are located. The calculation of such expenses is based on the dismantling value for the current year, taking into consideration the best estimate of future changes in prices, inflation, etc. and such costs are capitalized at a risk-free interest rate. Volume projections for retired or built assets are recast based on expected changes from technological rulings and requirements.

(iv) Provisions for other contractual obligations include a series of obligations resulting from a contractual liability or law, regarding which there is a high degree of uncertainty as to the terms and the necessary amounts to discharge such liability.

(v) In November 2009, PBC’s Audit Committee and Board of Directors approved the agreement with Rock Real whereby the latter would look for and propose to PBC the acquisition of commercial properties outside Israel, in addition to assisting in the negotiations and management of such properties. In return, Rock Real would receive 12% of the net income generated by the acquired property. Pursuant to amendment 16 of the Israel Commercial Act 5759-1999, the agreement must be ratified by the Audit Committee before the third year after the effective date; otherwise, it expires. The agreement has not been ratified by the audit committee within such three-year term, so in January 2017 PBC issued a statement that hinted at the expiration of the agreement and informed that it would begin negotiations to reduce the debt. The parties have appointed an arbitrator that should render a decision on the dispute. The remaining corresponds to provisions related to investment properties.

IRSA

On February 23, 2016, a class action was filed against IRSA, Cresud and some first-line managers and directors at the District Court of the USA for the Central District of California. The complaint, on behalf of people holding American Depositary Receipts of the Company between November 3, 2014 and December 30, 2015, claims presumed violations to the US federal securities laws. In addition, it argues that defendants have made material misrepresentations and made some omissions related to the Company’s investment in IDBD.

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Such complaint was voluntarily waived on May 4, 2016 by the plaintiff and filed again on May 9, 2016 with the US District Court for the Eastern District of Pennsylvania.

Furthermore, the Companies and some of its first-line managers and directors are defendants in a class action filed on April 29, 2016 with the US District Court for the Eastern District of Pennsylvania. The complaint, on behalf of people holding American Depositary Receipts of the Companies between May 13, 2015 and December 30, 2015, presumes violations to the US federal securities laws. In addition, it argues that defendants have made material misrepresentations and made some omissions related to the investment of the Company's subsidiary, IRSA, in IDBD.

Subsequently, the Companies requested the transfer of the claim to the district of New York, which was accepted.

On December 8, 2016, the Court appointed the representatives of each presumed class as primary plaintiffs and the lead legal advisor for each of the classes. On February 13, 2017, the plaintiffs of both classes filed a document containing certain amendments. The companies filed a petition requesting that the class action brought by shareholders should be dismissed. On April 12, 2017, the Court suspended the class action filed by shareholders until the Court decides on the petition of dismissal of such class action. Filing information on the motion to dismiss the collective remedy filed by shareholders of IRSA was completed on July 7, 2017.

On September 10, 2018, the New York Court issued an order granting the motion to dismiss the IRSA Case in its entirety.

On September 24, 2018, Plaintiff in the Cresud Case filed a document acknowledging that the Cresud Class Action complaint should be dismissed for the same reasons set forth in the Court’s September 10, 2018 order in the IRSA Case, subject to a right of appeal.

On October 9, 2018, the Plaintiff in the IRSA Case filed a notice of appeal to the United States Court of Appeals for the Second Circuit. On December 12, 2018, Plaintiff in the Cresud Case filed a notice of voluntary dismissal, with prejudice. On December 13, 2018, Plaintiff moved to dismiss the appeal of the IRSA Case in the Second Circuit upon agreement with IRSA and Cresud that the parties shall bear their own costs and fees in the litigation, including the appeal, and that no fees are due. Accordingly, the Second Circuit dismissed Plaintiff’s appeal on December 18, 2018.

The IRSA and Cresud cases are fully resolved without any penalty for the Group.

Claims against Cellcom and its subsidiaries

In the ordinary course of business, Cellcom receives various consumer complaints, mainly through collective actions. They allege excess collections, breach of agreements with customers and failure to comply with established norms or licenses, which could cause harm to consumers.

In addition, the Cellcom receives other claims from employees, subcontractors, suppliers and authorities, generally in relation to non-compliance with the provisions of the law with respect to payments upon termination of employment relationships, breach of contracts, violation of copyright and patents or disputes for payments demanded by the authorities.

Claims against PBC

On July 4, 2017, PBC was served notice from the tax authority of Israel of income tax official assessments based on a “better assessment” of taxes for the years 2012-2015, and concluded that PBC is required to pay approximately

NIS 187 (including interest) since compensation of losses is not admitted.

In the opinion of legal advisors to PBC, PBC has sound arguments against the Revenue Administration’s position and will file its objection to it. As of the date of these Consolidated Financial Statements, there is no provision in relation to this claim.

DIC class action

On October 3, 2018 it was sent an action and a motion to approve that action as a class action (jointly – the "Motion"), which had been filed within the District Court of Tel Aviv Yafo (the "Court") against the Group; against Mr.

F-73

Eduardo Elsztain, the controlling person of the Company (the "Controlling Person"), who serves as chairman of the Company's board of directors; against directors serving in the Group who have an interest in the Controlling Person; and against additional directors and officers serving in the Company (all jointly – the "Respondents"), in connection with the exit of the Company's share, on February 1, 2018, from the TA 90 and TA 125 indices, whereon it had been traded on the Tel Aviv Stock Exchange Ltd. up to that date (the "Indices"), by an applicant alleging to have held the Group's shares prior to February 1, 2018.

In the Motion, the Court is requested, inter alia, to approve the action as a class action and to charge the Respondents with compensating the members of the group according to the damage caused them. The estimated amount is approximately NIS 17.6 million.

DIC believes that it acted lawfully and as required in all that pertains to the subject of the Motion, and accordingly, after having preliminarily reviewed the Group's Motion, believes that it is unfounded.

IDBD class action

On October 3, 2018, an action and a motion to approve a class action had been filed with the District Court in Tel Aviv Yafo (jointly – the "Motion"). The Motion has been filed, against IDBD, against Dolphin IL, against Mr. Eduardo Elsztain and against the Official Receiver, and in it, the Court was requested to hold that the Transaction was not in compliance with the provisions of the Centralization Law, to appoint a trustee over DIC's shares owned by the respondents and to order the payment of monetary damages to the public shareholders in DIC for the alleged preservation of the pyramidal structure in IDBD, at a scope of between NIS 58 and NIS 73.

The bulk of the Applicant's allegations is that the Group continues to be the Controlling Person in DIC (potentially and effectively) even after the completion of the sale of DIC shares to DIL as described in Note 4 in the Annual Financial Statements (the “transaction”) and that the controlling person of IDBD (in his capacity as chairman of the Board of Directors and controlling person of DIC as well) had a personal interest separate from the personal interest of the minority shareholders in DIC, in the manner of implementation of the Centralization Law's provisions, and that he and the Group breached the duty of good faith and the duty of decency toward DIC, and additionally the controlling person of IDBD breached his duty of trust and duty of care toward DIC, this being, allegedly, due to the fact that the decision regarding the preferred alternative for complying with the Centralization Law's Provisions was not brought before DIC's general meeting. The Applicant further alleges deprivation of the minority shareholders in DIC.

Having preliminarily reviewed the Motion, the Management believes that it is unfounded and that once the transaction is consummated, IDBD complies with the provisions of the Concentration Law.

20. Borrowings

The breakdown and the fair value of the Group borrowings as of June 30, 2020 and 2019 was as follows:

	Total as of June 30, 2020 (ii)	Total as of June 30, 2019 (ii)	Fair value as of June 30, 2020	Fair value as of June 30, 2019
NCN	340,026	410,864	271,310	405,386
Bank<br>loans	60,580	62,787	48,799	60,016
Bank<br>overdrafts	2,614	432	2,614	432
Other<br>borrowings (i)	1,734	6,784	1,734	9,543
Total borrowings	404,954	480,867	324,457	475,377
Non-current	320,616	410,853
Current	84,338	70,014
	404,954	480,867

(i) Includes financial leases for Ps. 1 and Ps. 26 as of June 30, 2020 and 2019, respectively.

(ii) Includes Ps. 335,532 and Ps. 423,774 as of June 30, 2020 and 2019, respectively, corresponding to the Operations Center in Israel.

As of June 30, 2020 and 2019, total borrowings include collateralized liabilities (seller financing, leases and bank loans) of Ps. 8,957 and Ps. 16,547, respectively. These borrowings are mainly collateralized by investment properties and property, plant and equipment of the Group (Notes 9 and 10).

Borrowings also include liabilities under finance leases where the Group is the lessee and which therefore were measured in accordance with IAS 17 “Leases”. Information regarding liabilities under finance leases is disclosed in Note 22.

F-74

The terms of the loans include standard covenants for this type of financial operations. As of the date of these financial statements, the Group has complied with the covenants contemplated in its respective loan agreements, with the exception of an IDBG loan, which was reclassified to current loans, since it breached a term that determined the IDBD debt rating (company that guaranteed that loan). The amount thereof is NIS 153.

The maturity of the Group's borrowings (excluding obligations under finance leases) is as follows:

	June 30, 2020	June 30, 2019
Share capital
Less<br>than 1 year	83,504	65,852
Between<br>1 and 2 years	46,202	61,358
Between<br>2 and 3 years	118,111	50,355
Between<br>3 and 4 years	38,368	110,705
Between<br>4 and 5 years	34,710	44,314
Later<br>than 5 years	83,121	143,842
	404,016	476,426
Interest
Less<br>than 1 year	834	4,162
Between<br>1 and 2 years	-	-
Between<br>2 and 3 years	52	-
Between<br>3 and 4 years	-	215
Between<br>4 and 5 years	27	-
Later<br>than 5 years	24	38
	937	4,415
Leases	1	26
	404,954	480,867

The following table shows a breakdown of Group’s borrowing by type of fixed-rate and floating-rate, per currency denomination and per functional currency of the subsidiary that holds the loans for the fiscal years ended June 30, 2020 and 2019.

	June 30, 2020
Rate per currency	Argentine Peso	US dollar	Uruguayan Peso	New Israel Shekel	Total
Fixed rate:
Argentine<br>Peso	2,615	-	-	-	2,615
New<br>Israel Shekel	-	-	-	190,137	190,137
US<br>Dollar	62,762	157	557	280	63,756
Subtotal fixed-rate borrowings	65,377	157	557	190,417	256,508
Floating rate:	-	-	-	-	-
Argentine<br>Peso	960	-	-	-	960
New<br>Israel Shekel	-	-	-	145,115	145,115
US<br>Dollar	2,370	-	-	-	2,370
Subtotal floating-rate borrowings	3,330	-	-	145,115	148,445
Total borrowings as per analysis	68,707	157	557	335,532	404,953
Finance<br>leases obligations	1	-	-	-	1
Total borrowings as per Statement of Financial<br>Position	68,708	157	557	335,532	404,954
	June 30, 2019
---	---	---	---	---	---
Rate per currency	Argentine Peso	US dollar	Uruguayan Peso	New Israel Shekel	Total
Fixed rate:
Argentine<br>Peso	626	-	-	-	626
New<br>Israel Shekel	-	-	-	242,851	242,851
US<br>Dollar	52,466	131	485	12,806	65,888
Subtotal fixed-rate borrowings	53,092	131	485	255,657	309,365
Floating rate:	-	-	-	-	-
Argentine<br>Peso	959	-	-	-	959
New<br>Israel Shekel	-	-	-	168,115	168,115
US<br>Dollar	2,402	-	-	-	2,402
Subtotal floating-rate borrowings	3,361	-	-	168,115	171,476
Total borrowings as per analysis	56,453	131	485	423,772	480,841
Finance<br>leases obligations	26	-	-	-	26
Total borrowings as per Statement of Financial<br>Position	56,479	131	485	423,772	480,867

The following describes the debt issuances made by the Group for the years ended June 30, 2020 and 2019:

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					Interest
Entity	Class	Issuance / expansion date	Amount in original currency	Maturity date	rate	Principal payment	Interest payment
PBC	SERIE<br>I	jul-18	NIS<br>507	06/29/2029	3.95%<br>n.a.	At<br>expiration	quarterly	(1)
PBC	SERIE<br>j	may-19	NIS<br>515	12/31/2029	4.15%<br>n.a.	At<br>expiration	annual
Gav<br>- Yam	SERIE<br>H	sep-17	NIS<br>424	06/30/2034	2.55%<br>n.a.	Annual<br>payments since 2019	biannual	(1)
Gav<br>- Yam	SERIE<br>A	jul-18	NIS<br>320	10/31/2023	3.55%<br>n.a.	Annual<br>payments since 2021	biannual
Gav<br>- Yam	SERIE<br>H	sep-18	NIS<br>596	06/30/2024	2.55%<br>n.a.	Annual<br>payments since 2019	annual	(1)
Gav<br>- Yam	SERIE<br>A	dic-18	NIS<br>351	10/31/2023	3.55%<br>n.a.	Annual<br>payments since 2021	biannual
Cellcom	SERIE<br>L	jan-18	NIS<br>401	1/5/2028	2.5%<br>n.a.	Annual<br>payments since 2023	annual
Cellcom	SERIE<br>K	jul-18	NIS<br>220	7/5/2026	3.55%<br>n.a.	Annual<br>payments since 2021	annual	(1)
Cellcom	SERIE<br>K	dic-18	NIS<br>187	1/7/2026	3.55%<br>n.a.	Annual<br>payments since 2021	annual	(1)
Cellcom	SERIE<br>L	dic-18	NIS<br>213	1/15/2028	2.50%<br>n.a.	Annual<br>payments since 2023	annual
IRSA	Clase<br>I tramo2	aug-19	USD<br>85	11/15/2028	10.00%<br>n.a.	At<br>expiration	quarterly	(1)
IRSA	Clase<br>II	aug-19	CLP<br>31,503	8/6/2020	10.50%<br>n.a.	At<br>expiration	quarterly
IDBD	Serie<br>15	nov-19	NIS<br>237	06/30/2022	4.70%<br>n.a	Two<br>payments	quarterly
IRSA	Clase<br>II	may-20	ARS<br>354	02/19/2021	Badlar.+<br>0.6%n.a.	At<br>expiration	quarterly	(1)
IRSA	Case<br>IV	may-20	USD<br>51	05/19/2021	7%<br>n.a.	At<br>expiration	quarterly
IRSA	Clase<br>V	may-20	USD<br>9	05/19/2022	9%<br>n.a.	At<br>expiration	quarterly

(1) Corresponds a to an expansion of the series.

The following table shows a detail of evolution of borrowing during the years ended June 30, 2020 and 2019:

	June 30, 2020	June 30, 2019
Balance at the beginning of the year	480,867	494,615
Borrowings	33,018	72,743
Payment<br>of borrowings	(73,558)	(61,762)
Collection<br>/ (Payment) of short term loans, net	2,709	(1,091)
Interests<br>paid	(20,620)	(23,370)
Deconsolidation<br>(see Note 4)	(102,749)	-
Accrued<br>interests	22,026	23,924
Changes<br>in fair value of third-party loans	-	(29)
Cumulative<br>translation adjustment and exchange differences, net	64,335	(22,280)
Inflation<br>adjustment	(1,074)	(1,883)
Balance at the end of the year	404,954	480,867

21. Income tax

The Group’s income tax has been calculated on the estimated taxable profit for each year at the rates prevailing in the respective tax jurisdictions. The subsidiaries of the Group in the jurisdictions where the Group operates are required to calculate their income taxes on a separate basis; thus, they are not permitted to compensate subsidiaries’ losses against subsidiaries income.

Argentine tax reform

Law 27,541 on Solidarity and Production Reactivation, which was published in December 2019, introduced some amendments to different taxes and created the so-called Impuesto para una Argentina Inclusiva y Solidaria (PAIS).

The main amendments related to Income Tax that affect the Group companies are:

1) In the first and second fiscal years begun after January 1, 2019 (i.e., for the Group’s fiscal years begun on July 1, 2019 and 2020), the profit / loss for tax inflation adjustment shall be allocated as follows: one sixth in the fiscal year of assessment thereof and the other five sixths over the following fiscal years;

2) The rate applicable to companies for the third fiscal year commencing after January 1, 2018 (i.e., for the Group’s fiscal years begun on July 1, 2019) is increased from 25% to 30%.

Tax inflation adjustment: Law 27,430, which was promulgated by the Argentine Congress on December 29, 2017 in the context of the tax reform, establishes the following rules for the application of the inflation adjustment in income tax: (i) the update of the cost for goods acquired or investments made in the fiscal years that begin as of January 1, 2018 (applicable to IRSA for the year end June 30, 2019), considering the percentage variations of the CPI provided by the National Institute of Statistics and Census (INDEC); and (ii) the application of the adjustment set forth in Title VI of the Income Tax Law when a percentage of variation -of the aforementioned index price - accumulated in thirty-six (36) months prior to the fiscal year end that is liquidated, is greater than 100%, or, with respect to the first, second and third year after its validity, this procedure will be applicable in case the accumulated variation of that index price, calculated from the

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beginning of the first of them and until the end of each year, exceeds 55%, 30% and 15% for the first, second and third year of application, respectively. At the end of this year, there has been an accumulative variation of 55.72% in the index price that exceeds the expected condition of 55% for the application of the adjustment in said first year. Consequently, the tax inflation adjustment has been applied and the cost of goods acquired during the year 2019 has been updated as established in article 58 of the Argentine Income Tax Law.

US tax reform

In December 2017, a bill was passed to reform the Federal Taxation Law in the United States. The reform included a reduction of the corporate tax rate from 35% to 21%, for the tax years 2018 and thereafter. The reform has impact in certain subsidiaries of the Group in the United States.

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

	June 30, 2020	June 30, 2019	June 30, 2018
Current<br>income tax	(278)	(242)	733
Deferred<br>income tax	(6,793)	5,087	10,722
Minimum<br>presumed income tax	(145)	-	-
Income tax from continuing operations	(7,216)	4,845	11,455

The statutory taxes rates in the countries where the Group operates for all of the years presented are:

Tax<br>jurisdiction	Income<br>tax rate
Argentina	25% -<br>35%
Uruguay	0% -<br>25%
U.S.A.	0% -<br>40%
Bermuda	0%
Israel	23% -<br>24%

Below is a reconciliation between income tax expense and the tax calculated applying the current tax rate, applicable in the respective countries, to profit before taxes for years ended June 30, 2020, 2019 and 2018:

	June 30, 2020	June 30, 2019	June 30, 2018
Profit from continuing operations at tax rate applicable in the<br>respective countries (*)	(11,556)	12,557	(2,971)
Permanent differences:
Share<br>of profit of associates and joint ventures	957	(1,790)	(199)
Unrecognized<br>tax loss carryforwards (i)	(898)	(1,987)	56
Changes<br>in fair value of financial instruments	-	-	-
Inflation<br>adjustment permanent difference	1,787	-	-
Tax<br>rate differential	2,673	(88)	12,762
Taxable<br>profit of non-argentinian holding subsidiaries	-	615	(462)
Non-taxable<br>profit, non-deductible expenses and others	1,906	(600)	2,269
Fiscal<br>transparency	161	-	-
Tax<br>inflation adjustment	(2,246)	(3,862)	-
Income tax from continuing operations	(7,216)	4,845	11,455

Deferred tax assets and liabilities of the Group as of June 30, 2020 and 2019 will be recovered as follows:

	June 30, 2020	June 30, 2019
Deferred<br>income tax asset to be recovered after more than 12<br>months	16,219	12,929
Deferred<br>income tax asset to be recovered within 12 months	936	2,230
Deferred income tax assets	17,155	15,159
	June 30, 2020	June 30, 2019
---	---	---
Deferred<br>income tax liability to be recovered after more than 12<br>months	(61,724)	(50,765)
Deferred<br>income tax liability to be recovered within 12 months	(2,158)	(20,396)
Deferred income tax liability	(63,882)	(71,161)
Deferred income tax assets (liabilities), net	(46,727)	(56,002)

The movement in the deferred income tax assets and liabilities during the years ended June 30, 2020 and 2019, without taking into consideration the offsetting of balances within the same tax jurisdiction, is as follows:

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	06.30.19	Cumulative translation adjustment	Charged / (Credited) to the statements of income	Revaluation surplus reserve	Charged / (Credited) to the revaluation surplus<br>reserve	Deconsolidation	Incorporation by business combination	06.30.20
Assets
Property,<br>plant and equipment	184	1,092	(957)	-	-	-	-	319
Investments	6	-	(6)	-	-	-	-	-
Trade<br>and other payables	6,164	924	(901)	-	-	(464)	-	5,723
Tax<br>loss carry-forwards	7,512	1,117	661	-	-	(89)	-	9,201
Others	1,293	180	439	-	-	-	-	1,912
Subtotal assets	15,159	3,313	(764)	-	-	(553)	-	17,155
Liabilities	-	-	-	-	-	-	-	-
Investment<br>properties and Property, plant and equipment	(62,662)	(186)	(8,503)	(98)	386	16,119	(672)	(55,616)
Trade<br>and other receivables	(957)	-	(36)	-	-	-	-	(993)
Investments	(141)	-	65	-	-	-	-	(76)
Tax<br>inflation adjustment	(3,248)	-	(1,404)	-	-	-	-	(4,652)
Borrowings	(1,140)	(304)	416	-	-	-	-	(1,028)
Intangible<br>assets	(2,438)	(550)	412	-	-	-	-	(2,576)
Others	(575)	(577)	2,669	-	-	(196)	(262)	1,059
Subtotal liabilities	(71,161)	(1,617)	(6,381)	(98)	386	15,923	(934)	(63,882)
Assets (Liabilities), net	(56,002)	1,696	(7,145)	(98)	386	15,370	(934)	(46,727)
	06.30.18	Cumulative translation adjustment	Charged / (Credited) to the statements of income	06.30.19
---	---	---	---	---
Assets
Property,<br>plant and equipment	247	(501)	438	184
Investments	-	-	6	6
Trade<br>and other payables	4,961	214	989	6,164
Tax<br>loss carry-forwards	10,545	(283)	(2,750)	7,512
Others	1,075	(66)	284	1,293
Subtotal assets	16,828	(636)	(1,033)	15,159
Liabilities	-	-	-	-
Investment<br>properties and Property, plant and equipment	(71,686)	1,694	7,330	(62,662)
Trade<br>and other receivables	(574)	-	(383)	(957)
Investments	-	(17)	(124)	(141)
Tax<br>inflation adjustment	-	-	(3,248)	(3,248)
Borrowings	(1,387)	101	146	(1,140)
Intangible<br>assets	(3,209)	279	492	(2,438)
Others	(2,652)	683	1,394	(575)
Subtotal liabilities	(79,508)	2,740	5,607	(71,161)
Assets (Liabilities), net	(62,680)	2,104	4,574	(56,002)

Deferred income tax assets are recognized for tax loss carry-forwards to the extent that the realization of the related tax benefits through future taxable profits is probable. Tax loss carry-forwards may have expiration dates or may be permanently available for use by the Group depending on the tax jurisdiction where the tax loss carry-forward is generated. Tax loss carry forwards in Argentina and Uruguay generally expire within 5 years, while in Israel do not expire.

As of June 30, 2020, the Group's recognized tax loss carry forward prescribed as follows:

Date	Total
2021	3
2022	12
2023	2,998
2024	1,277
2025	5,175
Subtotal	9,465
Do<br>not expire	4,074
Total	13,539

In order to fully realize the deferred tax asset, the respective companies of the Group will need to generate future taxable income. To this aim, a projection was made for future years when deferred assets will be deductible. Such projection is based on aspects such as the expected performance of the main macroeconomic variables affecting the business, production issues, pricing, yields and costs that make up the operational flows derived from the regular exploitation of fields and other assets of the group, the flows derived from the performance of financial assets and liabilities and the income generated by the Group’s strategy of crop rotation. Such strategy implies the purchase and/or development of fields in marginal areas or areas with a high upside potential and periodical sale of such properties that are deemed to have reached their maximum appreciation potential.

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Based on the estimated and aggregate effect of all these aspects on the companies’ performance, Management estimates that as at June 30, 2020, it is probable that the Company will realize all of the deferred tax assets.

The Group did not recognize deferred income tax assets (tax loss carry forwards) of Ps. 486,058 for the Operations Center in Israel and Ps. 141 for the Operations Center in Argentina as of June 30, 2020 and Ps. 345,850 for the Operations Center in Israel and Ps. 7,941 for the Operations Center in Argentina as of June 30, 2019. Although the Management estimates that the business will generate sufficient income, pursuant to IAS 12, management has determined that, as a result of the recent loss history and the lack of verifiable and objective evidence due to the subsidiary’s results of operations history, there is sufficient uncertainty as to the generation of sufficient income to be able to offset losses within a reasonable timeframe, therefore, no deferred tax asset is recognized in relation to these losses.

The Group did not recognize deferred income tax liabilities of Ps. 97 and Ps. 93 as of June 30, 2020 and 2019, respectively, related to their investments in foreign subsidiaries, associates and joint ventures. In addition, the withholdings and/or similar taxes paid at source may be creditable against the Group’s potential final tax liability.

On June 30, 2020 and 2019, the Group recognized a deferred liability in the amount of Ps. 975 and Ps. 1,010, respectively, related to the potential future sale of one of its subsidiaries shares.

IDBD and DIC assess whether it is necessary to recognize deferred tax liabilities for the temporary differences arising in relation to its investments in subsidiaries; in this respect, IDBD, DIC and PBC estimate that if each of them is required to dispose of its respective holdings in subsidiaries, they would not be liable to income tax on the sale and, for such reason, they did not recognize the deferred tax liabilities related to this difference in these Consolidated Financial Statements.

22. Leases

The Group as lessee

Operating leases:

In the ordinary course of business, the Group leases property or spaces for administrative or commercial use both in Argentina and Israel under operating lease arrangements. The agreements entered into include several clauses, including but not limited, to fixed, variable or adjustable payments. Some leases were agreed upon with related parties (Note 29).

The future minimum payments that the Group must pay under operating leases are as follows:

	June 30, 2020	June 30, 2019	June 30, 2018
No<br>later than one year	2,485	9,326	5,202
Later<br>than one year and not later than five years	5,669	14,545	10,717
Later<br>than five years	2,582	971	1,567
	10,736	24,842	17,486

The Group as lessor

Leases:

In the Shopping Malls segment and Offices segment of the Operations Center in Argentina and in the Real Estate segment of the Operations Center in Israel, the Group enters into operating lease agreements typical in the business. Given the diversity of properties and lessees, and the various economic and regulatory jurisdictions where the Group operates, the agreements may adopt different forms, such as fixed, variable, adjustable leases, etc. For example, in the Operations Center in Argentina, operating lease agreements with lessees of Shopping Malls generally include escalation clauses and contingent payments. In Israel, agreements tend to be agreed upon for fixed amounts, although in some cases they may include adjustment clauses. Income from leases are recorded in the Statement of Income under rental and service income in all of the filed fiscal years.

Rental properties are considered to be investment property. Book value is included in Note 9. The future minimum proceeds under non-cancellable operating leases from Group’s shopping malls, offices and other buildings are as follows:

	June 30, 2020	June 30, 2019	June 30, 2018
No<br>later than one year	785	14,228	11,521
Later<br>than one year and not later than five years	22,264	32,007	53,549
Later<br>than five years	10,446	22,995	19,844
	33,495	69,230	84,914

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23. Revenues

	June 30, 2020	June 30, 2019	June 30, 2018
Income<br>from communication services	-	-	-
Rental<br>and services income	12,279	15,723	16,594
Sales<br>of communication equipment	-	-	-
Sales<br>of trading properties and developments	785	1,169	305
Revenue<br>from hotels operation and tourism services	2,175	3,179	2,618
Income<br>from agricultural products	-	-	-
Other<br>revenues	1	-	5
Total Group’s revenues	15,240	20,071	19,522

24. Expenses by nature

The Group disclosed expenses in the statements of income by function as part of the line items “Costs”, “General and administrative expenses” and “Selling expenses”. The following tables provide additional disclosure regarding expenses by nature and their relationship to the function within the Group as of June 30, 2020, 2019 and 2018:

	Costs	General and administrative expenses	Selling expenses	Total as of June 30, 2020
Cost<br>of sale of goods and services	672	-	-	672
Salaries,<br>social security costs and other personnel expenses	2,050	860	143	3,053
Depreciation<br>and amortization	350	162	7	519
Fees<br>and payments for services	1,186	(722)	355	819
Maintenance,<br>security, cleaning, repairs and others	1,856	244	3	2,103
Advertising<br>and other selling expenses	554	-	73	627
Taxes,<br>rates and contributions	487	97	669	1,253
Interconnection<br>and roaming expenses	-	-	-	-
Fees<br>to other operators	-	-	-	-
Director´s<br>fees	-	439	-	439
Leases<br>and service charges	143	25	20	188
Allowance<br>for doubtful accounts, net	-	-	333	333
Other<br>expenses	(939)	1,260	(297)	24
Total as of June 30, 2020	6,359	2,365	1,306	10,030
	Costs	General and administrative expenses	Selling expenses	Total as of June 30, 2019
---	---	---	---	---
Cost<br>of sale of goods and services	620	-	-	620
Salaries,<br>social security costs and other personnel expenses	2,663	1,066	162	3,891
Depreciation<br>and amortization	274	123	5	402
Fees<br>and payments for services	160	448	63	671
Maintenance,<br>security, cleaning, repairs and others	2,239	240	5	2,484
Advertising<br>and other selling expenses	597	26	95	718
Taxes,<br>rates and contributions	649	98	662	1,409
Interconnection<br>and roaming expenses	-	-	-	-
Fees<br>to other operators	-	-	-	-
Director´s<br>fees	-	715	-	715
Leases<br>and service charges	143	35	22	200
Allowance<br>for doubtful accounts, net	-	-	137	137
Other<br>expenses	153	177	9	339
Total as of June 30, 2019	7,498	2,928	1,160	11,586
	Costs	General and administrative expenses	Selling expenses	Total as of June 30, 2018
---	---	---	---	---
Cost<br>of sale of goods and services	234	-	-	234
Salaries,<br>social security costs and other personnel expenses	3,110	871	165	4,146
Depreciation<br>and amortization	206	116	2	324
Fees<br>and payments for services	103	452	84	639
Maintenance,<br>security, cleaning, repairs and others	2,456	275	14	2,745
Advertising<br>and other selling expenses	746	14	129	889
Taxes,<br>rates and contributions	666	120	572	1,358
Interconnection<br>and roaming expenses	-	-	-	-
Fees<br>to other operators	(1)	-	-	(1)
Director´s<br>fees	-	552	-	552
Leases<br>and service charges	112	17	12	141
Allowance<br>for doubtful accounts, net	-	-	210	210
Other<br>expenses	95	101	7	203
Total as of June 30, 2018	7,727	2,518	1,195	11,440

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25. Cost of goods sold and services provided

	Total as of June 30, 2020	Total as of June 30, 2019	Total as of June 30, 2018
Inventories<br>at the beginning of the period (*)	10,764	25,266	32,164
Adjustments<br>previous periods	-	(8,962)	-
Purchases<br>and expenses (**)	62,015	60,423	169,167
Capitalized<br>finance costs	13	18	26
Currency<br>translation adjustment	8,894	(1,519)	12,072
Transfers	216	160	(754)
Deconsolidation	(167)	-	(15,023)
Incorporated<br>by business combination	284	-	920
Inventories<br>at the end of the period (*)	(12,762)	(10,764)	(25,266)
Total costs	69,257	64,622	173,306

(*) Includes Ps. 2,291 as cost of goods sold from Gav-Yam which was reclassified as discontinued operations in this fiscal year.

The following table presents the composition of the Group’s inventories for the years ended June 30, 2020 and 2019:

	Total as of June 30, 2020	Total as of June 30, 2019
Real<br>estate	7,721	8,999
Telecommunications	1,817	1,765
Fruits	2,912	-
Others	312	-
Total<br>inventories at the end of the period (*)	12,762	10,764

(*) Inventories includes trading properties and inventories.

26. Other operating results, net

	June 30, 2020	June 30, 2019	June 30, 2018
Gain<br>from disposal of subsidiary and associates (1)	7	(162)	-
Donations	(107)	(220)	(167)
Lawsuits<br>and other contingencies	(117)	(103)	(82)
Operating<br>interest expense	73	95	24
Others<br>(2)	120	(116)	198
Total other operating results, net	(24)	(506)	(27)

(1)

As of June 30, 2018, it includes a favorable ruling entered in a lawsuit in the Operations Center in Israel for an amount of approximately Ps. 1,254. Includes legal costs and expenses.

27. Financial results, net

	June 30, 2020	June 30, 2019	June 30, 2018
Finance<br>income:
-<br>Interest income	216	187	703
-<br>Dividend income	15	15	105
-<br>Other finance income	(2)	-	-
Total finance income	229	202	808
Finance<br>costs:
-<br>Interest expenses	(6,347)	(5,034)	(4,315)
-<br>Loss on debt swap	-	-	(251)
-<br>Other finance costs	(405)	(372)	(103)
Subtotal finance costs	(6,752)	(5,406)	(4,669)
Capitalized<br>finance costs	123	255	38
Total finance costs	(6,629)	(5,151)	(4,631)
Other<br>financial results:
-<br>Fair value gain of financial assets and liabilities at fair value<br>through profit or loss, net	362	735	1,970
-<br>Exchange differences, net	(6,722)	1,080	(14,235)
-<br>Gain from repurchase of negotiable obligations	96	-	-
-<br>Gain from derivative financial instruments, net	(393)	600	433
Total other financial results	(6,657)	2,415	(11,832)
- Inflation<br>adjustment	97	(568)	(949)
Total financial results, net	(12,960)	(3,102)	(16,604)

F-81

28. Earnings per share

(a) Basic

Basic earnings per share amounts are calculated in accordance with IAS 33 "Earning per share" by dividing the profit attributable to equity holders of the Group by the weighted average number of ordinary shares outstanding during the year.

	June 30, 2020	June 30, 2019	June 30, 2018
Profit<br>for the year of continuing operations attributable to equity<br>holders of the parent	22,065	(34,991)	16,208
Profit<br>for the year of discontinued operations attributable to equity<br>holders of the parent	(6,725)	(4,421)	6,452
Profit<br>for the year attributable to equity holders of the<br>parent	15,340	(39,412)	22,660
Weighted<br>average number of ordinary shares outstanding	575	575	575
Basic earnings per share	26.66	(68.55)	39.39

(b) Diluted

Diluted earnings per share amounts are calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential shares. The Group holds treasury shares associated with incentive plans with potentially dilutive effect.

	June 30, 2020	June 30, 2019	June 30, 2018
Profit<br>for the year of continuing operations attributable to equity<br>holders of the parent	22,065	(34,991)	16,208
Profit<br>for the year of discontinued operations attributable to equity<br>holders of the parent	(6,725)	(4,421)	6,452
Profit<br>for the year per share attributable to equity holders of the<br>parent	15,340	(39,412)	22,660
Weighted<br>average number of ordinary shares outstanding	579	579	579
Diluted earnings per share	26.50	(68.55)	39.16

29. Employee benefits

Incentive Plan - Argentina

The Group has an equity incentives plan (“Incentive Plan”), created in September 30, 2011, which is aimed at certain employees, directors and top management of the Company, IRSA CP and Cresud (the “Participants”). Engagement was voluntary and by invitation of the Board of Directors.

Under the Incentive Plan, over the years 2011, 2012 and 2013, Participants will be entitled to receive shares ("Contributions") of the Company and Cresud based on a percentage of their annual bonus for the years 2011, 2012 and 2013, providing they remain as employees of the Company for at least five years, among other conditions required, to qualify for such Contributions. Contributions shall be held by the Company and Cresud, and as the conditions established by the Plan are verified, such contributions shall be transferred to the Participants. In spite of this, the economic rights of the shares in the portfolio assigned to said participants will be received by them.

Regarding the shares to be delivered by Cresud to the employees of the company and IRSA CP, and for the shares to be delivered by IRSA to Cresud employees, the Group accounts the active or passive position measured at the closing date of the financial statements.

As of June 30, 2018, a reserve has been set up under Shareholders’ equity as a result of this Incentive Plan for Ps. 6, based on the market value of the shares to be granted pertaining to the Group’s contributions, proportionately to the period already elapsed for the vesting of shares in the Incentive Plan and adjusted for the probability that any beneficiary should leave the Group before the term and/or the conditions required to qualify for the benefits of said plan are met at each fiscal year-end.

For the fiscal years ended June 30, 2019 and 2018, the Group has incurred a charge related to the Incentive Plan of Ps. 0.43 and Ps. 23,38, respectively. As of June 30, 2018, the total expense has been recognized for having completed the necessary period to grant the total stocks for this benefit. The unrecognized expense for the periods ended June 30, 2017 was Ps. 14.64, and no unrecognized expense is pending after that date.

Movements in the number of matching shares outstanding under the incentive plan corresponding to the Company´s contributions are as follows:

F-82

	June 30, 2020	June 30, 2019	June 30, 2018
At the beginning	3,044,987	3,603,427	3,776,478
Additions	-	-	-
Disposals	-	-	-
Granted	(470,779)	(558,440)	(173,051)
At the end	2,574,208	3,044,987	3,603,427

The fair value determined at the time of granting the plan after obtaining all the corresponding authorizations was Ps. 25.3 per share of IRSA. This fair value was estimated by taking into account the market price of the shares of the Company on said date.

Defined contribution plan - Argentina

The Group operates a defined contribution plan (the “Plan”) which covers certain selected managers from Argentina. The Plan was effective as from January 1, 2006. Participants can make pre-tax contributions to the Plan of up to 2.5% of their monthly salary (“Base Contributions”) and up to 15% of their annual bonus (“Extraordinary Contributions”). Under the Plan, the Group matches employee contributions to the plan at a rate of 200% for Base Contributions and 300% for Extraordinary Contributions.

All contributions are invested in funds administered outside of the Group. Participants or their assignees, as the case may be, will have access to the 100% of the Company contributions under the following circumstances:

(i)

ordinary retirement in accordance with applicable labor regulations;

(ii)

total or permanent incapacity or disability;

(iii)

death.

In case of resignation or termination without fair cause, the manager will receive the Group’s contribution only if he or she has participated in the Plan for at least 5 years.

Contributions made by the Group under the Plan amount to Ps. 25 and Ps. 54 for the fiscal years ended June 30, 2020 and 2019, respectively.

Share base plans associated with certain key members of the management - Israel

DIC and Cellcom have granted an options benefit plans to key management personnel. For the years ended June 30, 2020, 2019 and 2018, the Group has incurred an expense in relation to said benefit plans of Ps. 11, Ps. 68 and Ps. 71, respectively.

The following table shows the detail of the options pending at year end:

	DIC	Cellcom
Exercise price<br>range of outstanding options	NIS 6.90 –<br>12.5	NIS 15.05 –<br>27.7
Average price of<br>outstanding options	NIS<br>6.72	NIS<br>17.8
Amount of<br>outstanding options	2,124,000	759,332
Average remaining<br>useful life	4.43<br>years	3.4<br>years

The fair value of the options was calculated according to the Black-Scholes method, which included assumptions such as the value of the share at the date of granting the plan, expected volatility, expected life of the option or the risk-free rate.

Employee benefits - Israel

Benefits to hired employees include post-employment benefits, retirement benefits, share-based plans and other short and long-term benefits. The Group’s liabilities in relation to severance pay and/or retirement benefits of Israeli employees are calculated in accordance with Israeli laws.

F-83

	June 30, 2020	June 30, 2019	June 30, 2018
Present<br>value of unfunded obligations	-	-	-
Present<br>value of funded obligations	1,467	882	888
Total present value of defined benefits obligations<br>(post-employment)	1,467	882	888
Fair<br>value of plan assets	(1,008)	(1,340)	(1,417)
Recognized liability for defined benefits obligations	459	-458	-529
Liability<br>for other long-term benefits	854	734	36
Total recognized liabilities	1,313	276	-493
Assets<br>designed for payment of employee benefits	(832)	(735)	-
Net position from employee benefits	481	-459	-493

30. Related party transactions

In the normal course of business, the Group conducts transactions with different entities or parties related to it.

Remunerations of the Board of Directors

The Business Companies Act of Argentina (Law N° 19,550), provides that the remuneration to the Board of Directors, where it is not set forth in the Company’s by-laws, shall be fixed by the Shareholders' Meetings. The maximum amount of remuneration that the members of the Board are allowed to receive, including salary and other performance-based remuneration of permanent technical-administrative functions, may not exceed 25% of the profits.

Such maximum amount is limited to 5% where no dividends are distributed to the Shareholders, and will be increased proportionately to the distribution, until reaching such cap where total profits are distributed.

Some of the Group's Directors are hired under the Employment Contract Law N° 20,744. This Act rules on certain conditions of the work relationship, including remuneration, salary protection, working hours, vacations, paid leaves, minimum age requirements, workmen protection and forms of suspension and contract termination. The remuneration of directors for each fiscal year is based on the provisions established by the Business Companies Act, taking into consideration whether such directors perform technical-administrative functions and depending upon the results recorded during the fiscal year. Once such amounts are determined, they should be approved by the Shareholders’ Meeting.

Senior Management remuneration

The members of the Group’s senior management are appointed and removed by the Board of Directors, and perform functions in accordance with the instructions delivered by the Board itself.

The Company’s Senior Management in the Operation Center in Argentina is composed of as follows:

Name	Date<br>of Birth	Position	Current<br>position since
Eduardo S.<br>Elsztain	01/26/1960	General<br>Manager	1991
Daniel R.<br>Elsztain	12/22/1972	Operating<br>Manager	2012
Jorge<br>Cruces	11/07/1966	Investment<br>Manager	2020
Matías I.<br>Gaivironsky	02/23/1976	Administrative and<br>Financial Manager	2011

The Company’s Senior Management in the Operation Center in Israel is composed of as follows:

Name	Date<br>of Birth	Position	Current<br>position since / until
Doron<br>Cohen	09/27/1960	General<br>Manager	2020
Sholem Lapidot<br>(*)	10/22/1979	General<br>Manager	2016 / 01-2020
Gil Kotler<br>(*)	10/04/1966	Financial<br>Manager	2016/ 04-2020
Aaron<br>Kaufman	03/03/1970	Vice president and<br>General Assessor	2016

(*) Left their positions this year.

The total remuneration paid to members of senior management for their functions consists of a fix salary that takes account of the manager's backgrounds capacity and experience, plus an annual bonus based on their individual performance and the Group's results. Members of senior management participate in defined contributions and share-based incentive plans that are described in Note 28.

The aggregate compensation to the Senior Management of the Operations Center in Argentina for the year ended June 30, 2020 amounts to Ps. 13.

The aggregate compensation to the Senior Management of the Operations Center in Israel for the year ended June 30, 2020 amounts to Ps. 161.

F-84

Corporate Service Agreement with Cresud and IRSA CP

Considering that IRSA, Cresud and IRSA CP have operating overlapping areas, the Board of Directors considered it convenient to implement alternatives that allow reducing certain fixed costs of its activity, in order to reduce its impact on operating results, taking advantage of and optimizing the individual efficiencies of each of the companies in the different areas that make up the operational administration.

For this purpose, on June 30, 2004, a Framework Agreement for the Exchange of Corporate Services (“Framework Agreement”) was signed, between IRSA, Cresud and IRSA CP, which was periodically modified, the last update being on June 28, 2019.

Under this Framework Agreement, corporate services are currently provided in the following areas: Corporate Human Resources, Administration and Finance, Planning, Institutional Relations, Compliance, Shared Services Center, Real Estate Business Administration, Directory to distribute Real Estate, HR Real Estate Business, Security, Corporate Legal Management, Corporate Environment, Technical Management Infrastructure and Services, Purchasing and Contracting, Management and Enabling, Investments, Government Affairs, Hotels, Fraud Prevention, Bolivar, Proxy, General Management to distribute, Directory Security.

Under this agreement, the companies entrusted to an external consultant the semi-annual review and evaluation of the criteria used in the process of liquidating corporate services, as well as the distribution bases and supporting documentation used in the aforementioned process, through the preparation of a semi-annual report.

It should be noted that the operation under comment allows Cresud, IRSA and IRSA CP to maintain absolute independence and confidentiality in their strategic and commercial decisions, being the allocation of costs and benefits made on the basis of operational efficiency and equity, without pursuing individual economic benefits for each of the companies.

Offices and Shopping Malls spaces leases

The offices of our President are located at 108 Bolivar, in the Autonomous City of Buenos Aires. The property has been rented to Isaac Elsztain e Hajes S.A., a company controlled by some family members of Eduardo Sergio Elsztain, our president, and to Hamonet S.A., a company controlled by Fernando A. Elsztain, one of our directors, and some of his family members.

In addition, BACS, BHN Sociedad de Inversión S.A., BHN Seguros Generales S.A. and BHN Vida S.A. rent offices owned by IRSA CP in different buildings.

Furthermore, we also let various spaces in our shopping malls (stores, stands, storage space or advertising space) to third parties and related parties such as Tarshop S.A. and BHSA.

Donations granted to Fundación IRSA and Fundación Museo de los Niños

Fundación IRSA is a non-profit charity institution that seeks to support and generate initiatives concerning education, the promotion of corporate social responsibility and the entrepreneurial spirit of the youth. It carries out corporate volunteering programs and fosters donations by the employees. The main members of Fundación IRSA's Board of Directors are: Eduardo S. Elsztain (President); Saul Zang (Vice President I), Alejandro Elsztain (Vice President II) and Mariana C. de Elsztain (secretary). It funds its activities with the donations made by us, Cresud and IRSA CP.

Fundación Museo de los Niños is a non-profit association, created by the same founders of Fundación IRSA and its Management Board is formed by the same members as Fundación IRSA. Fundación Museo de los Niños acts as special vehicle for the development of "Museo de los Niños, Abasto" and "Museo de los Niños, Rosario". On October 29, 1999, our shareholders approved the award of the agreement “Museo de los Niños, Abasto” to Fundación Museo de los Niños. On October 31, 1997, IRSA CP entered into an agreement with Fundación IRSA whereby it loaned 3,800 square meters of the area built in the Abasto Shopping mall for a total term of 30 years, and on November 29, 2005, shareholders of IRSA CP approved another agreement entered into with Fundación Museo de los Niños whereby 2,670.11 square meters built in the Alto Rosario shopping mall were loaned for a term of 30 years. Fundación IRSA has used the available area to house the museum called “Museo de los Niños, Abasto” an interactive learning center for kids and adults, which was opened to the public in April 1999.

F-85

Legal Services

The Group hires legal services from Estudio Zang, Bergel & Viñes, at which Saúl Zang was a founding partner and sits at the Board of Directors of the Group companies.

Purchase and sale of goods and/or service hiring

In the normal course of its business and with the aim of making resources more efficient, in certain occasions purchases and/or hires services which later sells and/or recovers for companies or other related parties, based upon their actual utilization.

Sale of advertising space in media

Our company and our related parties frequently enter into agreements with third parties whereby we sell/acquire rights of use to advertise in media (TV, radio stations, newspapers, etc.) that will later be used in advertising campaigns. Normally, these spaces are sold and/or recovered to/from other companies or other related parties, based on their actual use.

Purchase and sale of financial assets

The Group usually invests excess cash in several instruments that may include those issued by related companies, acquired at issuance or from unrelated third parties through secondary market deals.

Investment in investment funds managed by BACS

The Group invests part of its liquid funds in mutual funds managed by BACS among other entities.

Borrowings

In the normal course of its activities, the Group enters into diverse loan agreements or credit facilities between the group’s companies and/or other related parties. These borrowings generally accrue interests at market rates.

Financial and service operations with BHSA

The Group works with several financial entities in the Argentine market for operations including, but not limited to, credit, investment, purchase and sale of securities and financial derivatives. Such entities include BHSA and its subsidiaries. BHSA and BACS usually act as underwriters in Capital Market transactions. In addition, we have entered into agreements with BHSA, who provides collection services for our shopping malls.

F-86

IRSA Inversiones y Representaciones Sociedad Anónima

The following is a summary presentation of the balances with related parties as of June 30, 2020 and 2019:

Related company	June 30, 2020	June 30, 2019	Description of transaction	Item
Manibil<br>S.A.	-	-	Contributions<br>in advance	Trade<br>and other receivables
New<br>Lipstick LLC	-	1,354	Loans<br>granted	Trade<br>and other receivables
	(83)	-	Loans<br>obtained	Borrowings
	17	15	Reimbursement<br>of expenses receivables	Trade<br>and other receivables
Condor	290	255	Public<br>companies securities	Trade<br>and other receivables
IRSA<br>Real Estate Strategies LP	125	-	Reimbursement<br>of expenses receivables	Trade<br>and other receivables
PBS<br>Real Estate Holdings S.R.L.	508	-	Reimbursement<br>of expenses receivables	Trade<br>and other receivables
Other<br>associates and joint ventures	131	2	Reimbursement<br>of expenses receivables	Trade<br>and other receivables
	-	(18)	Leases<br>and/or rights of use not yet paid	Trade<br>and other payables
	(29)	-	Loans<br>obtained	Borrowings
	9	-	Management<br>fees receivables	Trade<br>and other receivables
	90	18	Leases<br>and/or rights of use receivables	Trade<br>and other receivables
	219	-	Dividends	Trade<br>and other receivables
	(1)		Reimbursement<br>of expenses not yet paid	Trade<br>and other payables
	-	17	Reimbursement<br>of expenses receivables	Trade<br>and other receivables
Total associates and joint ventures	1,276	1,643
Cresud	(3)	(57)	Reimbursement<br>of expenses not yet paid	Trade<br>and other payables
	(264)	(175)	Corporate<br>services not yet paid	Trade<br>and other payables
	1,702	1,746	NCN	Investments<br>in financial assets
	4	8	Leases<br>and/or rights of use receivables	Trade<br>and other receivables
	(1)	(2)	Management<br>fee	Trade<br>and other payables
	(3)	(5)	Share-based<br>payments	Trade<br>and other payables
Total parent company	1,435	1,515
Directors	(137)	(257)	Fees<br>for services received	Trade<br>and other payables
	4	-	Advances	Trade<br>and other receivables
Others<br>(1)	-	42	Leases<br>and/or rights of use receivables	Trade<br>and other receivables
	(57)	-	Loans<br>obtained	Borrowings
	19	58	Reimbursement<br>of expenses receivables	Trade<br>and other receivables
Total others	(171)	(157)
Total at the end of the year	2,540	3,001

(1)

Includes CAMSA., Avenida compras and Avenida Inc., Estudio Zang, Bergel & Viñes, Austral Gold, Fundación IRSA, Hamonet S.A., Museo de los Niños and BHN Vida S.A.

Item	June 30, 2020	June 30, 2019
Trade<br>and other receivables	1,416	1,769
Investments<br>in financial assets	1,702	1,746
Borrowings	(169)	-
Trade<br>and other payables	(409)	(514)
Total	2,540	3,001

F-87

IRSA Inversiones y Representaciones Sociedad Anónima

The following is a summary of the results with related parties for the years ended June 30, 2020, 2019 and 2018:

Related party	June 30, 2020	June 30, 2019	June 30, 2018	Description of transaction
BACS	55	58	3	Leases<br>and/or rights of use
Manibil	-	32	98	Corporate<br>services
Tarshop	-	64	40	Leases<br>and/or rights of use
	-	1	-	Commissions
La<br>Rural S.A.	-	40	33	Leases<br>and/or rights of use
Condor	-	-	297	Financial<br>operations
Other<br>associates anf joint ventures	40	(1)	-	Financial<br>operations
Otras<br>asociadas y negocios conjuntos	10	37	80	Leases<br>and/or rights of use
	(141)	32	404	Honorarios<br>y remuneraciones
Total associates and joint ventures	(36)	263	955
Cresud	20	40	14	Leases<br>and/or rights of use
Cresud	(505)	(588)	(620)	Corporate<br>services
	241	40	380	Financial<br>operations
Total parent company	(244)	(508)	(226)
IFISA	-	-	-	Financial<br>operations
Directors	(437)	(517)	(569)	Fees<br>and remunerations
Taaman	-	-	-	Corporate<br>services
Willfood	-	-	-	Corporate<br>services
Others<br>(1)	-	-	(42)	Corporate<br>services
	-	1	40	Leases<br>and/or rights of use
	-	(1)	362	Financial<br>operations
Otras<br>(1)	-	(1)	(36)	Donationd
	(25)	-	-	Fees<br>and remuneration
Otras<br>(1)	(31)	(1)	(40)	Legal<br>services
Total others	(493)	(519)	(285)
Total at the end of the period	(773)	(764)	444

(1) It includes Isaac Elsztain e Hijos, CAMSA., Hamonet S.A., Ramat Hanassi, Estudio Zang, Bergel & Viñes, and Fundación IRSA.

The following is a summary of the transactions with related parties for the years ended June 30, 2020 and 2019:

Related party	June 30, 2020	June 30, 2019	Description of the operation
La<br>Rural S.A.	-	466	Dividends<br>received
Condor	34	123	Dividends<br>received
BHSA	-	122	Dividends<br>received
Mehadrin	-	152	Dividends<br>received
Manaman	-	114	Dividends<br>received
Nuevo<br>Puerto Santa Fe S.A.	41	15	Dividends<br>received
Nave<br>by the sea	-	50	Dividends<br>received
Shufersal	431	713	Dividends<br>received
Gav<br>Yam	1,436	-	Dividends<br>received
Emco	17	94	Dividends<br>received
Total dividends received	1,959	1,849
Cresud	(386)	1,742	Dividends<br>granted
Helmir	(24)	11	Dividends<br>granted
Total dividends distribution	(410)	1,753
Quality	(51)	(79)	Capital<br>contributions
Manibil	(94)	(33)	Capital<br>contributions
IBC	(2,746)	-	Capitalized<br>loan
Others	(18)	(30)	Capital<br>contributions
Total capital contributions	(2,909)	(142)
TGLT<br>S.A.	1,501	-	Purchase<br>and exchange of shares
Total other transactions	1,501	-

F-88

31. 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 06.30.20	Total as of 06.30.19
Assets
Trade and other receivables
US<br>Dollar	46	70.260	3,246	2,636
Euros	12	78.867	948	212
Receivables with related parties:
US<br>Dollar	5	70.460	335	257
Total trade and other receivables			4,529	3,105
Investments in financial assets
US<br>Dollar	55	70.260	3,879	5,179
Pounds	1	86.896	84	74
Investments with related parties:
US<br>Dollar	19	70.460	1,305	1,746
Total investments in financial assets			5,268	6,999
Derivative financial instruments
US<br>Dollar	-	70.260	-	18
Total Derivative financial instruments			-	18
Cash and cash equivalents
US<br>Dollar	199	70.260	14,015	17,844
Euros	21	78.867	1,665	111
Total cash and cash equivalents			15,680	17,955
Total Assets			25,477	28,077
Liabilities
Trade and other payables
US<br>Dollar	202	70.460	14,201	11,300
Euros	4	87.360	328	55
Payables to related parties:
US<br>Dollar	-	70.460	-	22
Total Trade and other payables			14,529	11,377
Borrowings
US<br>Dollar	931	70.460	65,590	55,636
Euros	-	-	-	-
Borrowings with related parties
US<br>Dollar	1	70.460	379	931
Total Borrowings			65,969	56,567
Derivative financial instruments
US<br>Dollar	1	70.460	102	42
Total derivative financial instruments			102	42
Lease liabilities
US<br>Dollar	0	70.460	9	-
Total lease liabilities			9	-
Total Liabilities			80,609	67,986

(1) Stated in millions of units in foreign currency. Considering foreign currencies those that differ from each Group’s functional currency at each year-end.

(2) Exchange rate as of June 30, of each year according to Banco Nación Argentina records.

(3) The Group uses derivative instruments as complement in order to reduce its exposure to exchange rate movements (see Note 14).

F-89

32. Groups of assets and liabilities held for sale

As mentioned in Note 4., the investments in Israir and Ispro have been reclassified to "Group of assets and liabilities held for sale".

The following table shows the main assets and liabilities classified as held for sale:

	June 30, 2020	June 30, 2019
Property,<br>plant and equipment	38,453	6,942
Intangible<br>assets	1,467	146
Investments<br>in associates	241	643
Deferred<br>income tax assets	876	312
Income<br>tax credits	-	-
Trade<br>and other receivables	1,991	3,233
Cash<br>and cash equivalents	1,840	1,102
Total assets held-for-sale	44,868	12,378
Trade<br>and other payables	10,686	5,216
Salaries<br>and social security liabilities	417	-
Employee<br>benefits	415	311
Deferred<br>income tax liabilities	2,103	55
Borrowings	10,291	3,177
Total liabilities held-for-sale	23,912	8,759
Total net assets held-for-sale	20,956	3,619

The company obtained a valuation of its investment in Israir for purposes of IRSA’s consolidated financial statements as of June 30, 2020 from an outside appraiser. As a result of the appraisal, the management accounted for an impairment of NIS 13 million (Ps. 284 million). This value represents the consideration that the company expects to receive for its stake in Israir as of June 30, 2020.

The management updated the valuation of investment properties of Ispro as a result of an appraisal prepared by an outside appraiser. As a result, the management of such company accounted for an impairment of NIS 33 million (Ps. 722 million) due to the outbreak of the Covid-19, a decrease in expected income from lessees, an expected increase in maintenance costs and a decreased in the CPI compared to the prior valuation.

33. Results from discontinued operations

The results of discontinued operations include the operations of IDBD / DIC for the years ended June 30, 2020, 2019 and 2018, as further explained in Note 1 A).

	June 30, 2020	June 30, 2019	June 30, 2018
Revenues	111,485	107,316	253,256
Costs	(79,931)	(75,102)	(182,473)
Gross profit	31,554	32,214	70,783
Net<br>(loss) / gain from fair value adjustment of investment<br>properties	(3,218)	5,256	5,952
General<br>and administrative expenses	(10,626)	(9,835)	(11,257)
Selling<br>expenses	(14,556)	(13,178)	(46,969)
Impairment<br>of associates	(2,659)	-	-
Other<br>operating results, net	20,112	1,069	29,098
Profit from operations	20,607	15,526	47,607
Share<br>of profit / (loss) of associates and joint ventures	1,559	149	(111)
Profit before financial results and income tax	22,166	15,675	47,496
Finance<br>income	1,449	2,172	1,102
Finance<br>cost	(18,330)	(19,501)	(25,367)
Other<br>financial results	(8,650)	2,075	(4,645)
Financial results, net	(25,531)	(15,254)	(28,910)
(Loss) / profit before income tax	(3,365)	421	18,586
Income<br>tax	(181)	(2,125)	(2,813)
Loss from discontinued operations	(3,546)	(1,704)	15,773
(Loss) / profit for the period from discontinued operations<br>attributable to:
Equity<br>holders of the parent	(6,725)	(4,421)	6,452
Non-controlling<br>interest	3,179	2,717	9,321
Loss per share from discontinued operations attributable to equity<br>holders of the parent:
Basic	(11.70)	(7.68)	11.21
Diluted	(11.61)	(7.64)	11.15

F-90

34. Economic framework of the Group’s business

The Company does business in a complex framework due to the macroeconomic conditions, whose main variables have recently shown high volatility, and also due to regulatory, social and political conditions, both at a national and international level.

Its operating income may be affected by the fluctuations in the inflation rate and in the exchange rate at which the peso is converted into other currencies, mainly the US dollar, the variations in interest rates, which have an impact on the cost of capital, the changes in governmental policies, capital controls and other local and international political or economic events.

In December 2019, a novel strain of coronavirus (SARS-COV-2) causing a severe acute respiratory syndrome (“COVID-19”) was reported to have surfaced in Wuhan, China. COVID-19 has since spread across the world, including Argentina, and on March 11, 2020, the World Health Organization declared COVID-19 a pandemic. By early November approximately 1,284,519 cases of infections had been confirmed in Argentina. In response, countries have adopted extraordinary measures to contain the spread of the virus, including imposing travel restrictions and closing borders, requiring closures of non-essential businesses, instructing residents to practice social distancing, issuing stay-at-home orders, implementing quarantines and similar actions. The ongoing pandemic and these extraordinary government measures are disrupting global economic activity and resulting in significant volatility in global financial markets. According to the International Monetary Fund (“IMF”), the global economy has recently entered into a recession.

The Argentine government has adopted multiple measures in response to the COVID-19 pandemic, including a nationwide mandatory lockdown that began on March 19, 2020 that has been extended several times, most recently through November 8, 2020. The government has also required during the last months the mandatory shutdown of businesses not considered essential. Finally, on November 6, 2020, the government announced the end of the mandatory lockdown for the AMBA (the “Área Metropolitana de Buenos Aires or “AMBA”) and the beginning of the new phase of social distancing. However, Coronavirus cases have risen over the last few months in several regions of the world and the rate of infections is still increasing. Lockdowns return to Europe as cases rise again. Spain, France and the UK have all recorded more than one million cases, and several others are seeing their highest number of new infections since the start of the pandemic.

These measures have significantly affected Argentine companies, which have faced drops in income and the deterioration of their flow of payments. In this context, the Argentine Government announced several actions intended to tackle the financial crisis of the companies adversely affected by the COVID-19 pandemic. In addition to the stagnation of the Argentine economy, there is an international crisis caused by the COVID-19 pandemic. In view of this scenario, a severe downturn in the Argentine economy is expected.

After several negotiations between the Argentine Government and the bondholders, the Argentine Government announced the execution of an agreement in principle with the main groups of bondholders in order to avoid the default. On August 28, 2020, the Government informed that the holders of 93.55% of the aggregate outstanding principal amount of all bonds have accepted a debt exchange and, on August 31, 2020, the Argentine Government obtained the consents required to exchange and/or amend 99.01% of the aggregate outstanding principal amount of all series of eligible bonds. As of the date of these financial statements, the new bonds are already being traded on the market.

However, the Government still faces the challenge of arriving at a successful renegotiation of the debt with the IMF. A favorable outcome for Argentina and the restructuring of its debt with the IMF would have a positive impact on the Argentine economy in the mid- and long-term. On the contrary, failure to reach an agreement with foreign private creditors might lead Argentina to default on its sovereign debt and, as a result, this situation may trigger restrictions on the companies’ ability to obtain new financing.

At a local level, the following circumstances may be noted:

●

In June 2020, the Estimador Mensual de Actividad Económica (“EMAE”) reported by the National Institute of Statistics and Census (Instituto Nacional de Estadísticas y Censos or INDEC) recorded a (12.3)% variation compared to the same month in 2019 and a (7.4)% variation compared to the previous month.

●

The market expectations survey prepared by the Central Bank in July 2020 called Relevamiento de Expectativas de Mercado (“REM”) forecasts that the retail inflation rate for 2020 will be 39.5%. The REM analysts foresee a (12.5)% decrease in the real GDP for 2020. In turn, they foresee a recovery in the economy for 2021 that will grow up to 5.6%. The economy is expected to grow during the third quarter of 2020 as the effects of the pandemic are perceived as transitory and economic recovery is expected to start soon.

F-91

●

The year-over-year inflation rate as of June 30, 2020 was 42.8%.

●

From July 2019 to June 2020, the peso depreciated 66% compared to the US dollar at the average wholesale exchange rate quoted by Banco de la Nación Argentina. In view of the foreign exchange restrictions in force since 2019, the gap between the official peso/US dollar exchange rate and the peso/US dollar exchange rate offered in the black market is almost 75%. This has an impact on the level of economic activity and detrimentally affects the reserves of the Argentine Central Bank. In addition, the current foreign exchange restrictions or those that may be imposed in the future may impair the Company’s ability to access the Sole Free FX Market (Mercado Único Libre de Cambio or MULC) to purchase the currency required to meet its financial obligations.

On September 15, 2020, the Argentine Central Bank issued Communication “A” 7106 which establishes, among other things, that entities with principal maturities falling due between October 15, 2020 and March 31, 2021 related to the issuance of foreign-currency denominated publicly-registered debt securities in Argentina by private sector clients or by the entities themselves, must submit to the Argentine Central Bank a refinancing plan based on the following criteria: (a) the net amount for which access to the foreign exchange is granted within the original terms must not exceed 40% of the principal amount due, and (b) the remaining principal amount must have been refinanced through new foreign debt with an average life of at least 2 years. Therefore, the Company is analyzing the impact of this provision in order to comply with the Central Bank’s requirements in due time and manner, if applicable.

Series I Non-convertible Notes having a par value of USD 181,518,707 and other bank debts shall become due on November 15, 2020.

COVID-19 Pandemic

As it arises from the ‘Economic framework of the Group’s business’ note, the COVID-19 pandemic is having an adverse impact on both the global and the Argentine economy and the Company’s business. Although the COVID-19 pandemic has had an impact nationwide on the business conducted by the Company, it is still too early to assess the total scope of its impact.

Below follows a description of the expected effects of the COVID-19 pandemic on the Company as of the date of these financial statements:

In the Operations Center in Argentina:

●

As a consequence of the preventive and mandatory social isolation, shopping malls across the country have been closed since March 20, 2020. Only those stores engaged in essential activities remain open such as pharmacies, supermarkets and banks whereas some food and clothing stores are offering delivery services and selling products on WhatsApp. In May and June, these measures were relaxed and certain activities were resumed in some marketplaces in the Argentine provinces such as Salta, Mendoza, Santa Fe and Córdoba. Actually, the shopping malls Alto Noa, Mendoza Plaza, Alto Rosario, La Ribera and Córdoba Shopping reopened under strict health and safety protocols providing for reduced shopping hours, social distancing and access controls. The shopping mall in Neuquén was reopened in July 2020 whereas the Distrito Arcos shopping mall, a premium open-air outlet in the City of Buenos Aires, was reopened early in August 2020. As of this date, 44% of the square meters of the Company’s Shopping Malls are open. Nevertheless, the uncertainty posed by this situation may cause the closing of stores that have already opened.

●

As a result of the shopping mall closings, the Company has decided to differ the invoicing and collection of the Monthly Guaranteed Amount (Valor Mensual Asegurado or V.M.A.) until September 30, 2020, with some exceptions, and not to collect the collective promotion fund during such period in an attempt to prioritize its long-term relationship with the lessees. Additionally, an increase in the delinquency rate of some lessees has been noticed. The ensuing impact on shopping malls has been a 30.5% decrease in income from rentals and services compared to the previous fiscal year and an 83% decrease compared to the last quarter of the previous fiscal year. Moreover, the allowance for bad debts is Ps. 328 million for the fiscal year ended June 30, 2020 and Ps. 201 million for the last quarter of the fiscal year.

●

As regards the rental of offices, although most of the lessees are working remotely, they are open under strict health and safety protocols. As of this date, the Company has not experienced any collection difficulties.

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●

La Rural, the Buenos Aires and Punta del Este Convention Centers and the DIRECTV Arena stadium, which are owned directly or indirectly by the Company, are also closed since March 20. All scheduled conferences have been suspended, most of the fairs and conventions were postponed, and most of the scheduled shows in the DIRECTV Arena stadium have been cancelled. The reopening date of these premises is uncertain as well as the future calendar of fairs, conventions and shows.

●

In order to reduce the risk of the virus spreading and protect public health, the Libertador hotels in the City of Buenos Aires and the Llao Llao hotel in the province of Río Negro are temporarily closed and it is still uncertain when they will reopen and go back to normal operations. As regards Hotel Intercontinental in the city of Buenos Aires, it is operating only under a contingency and emergency plan. The impact of all the above on these financial statements has been a 32% decrease in income compared to the previous fiscal year and a 100% decrease compared to the same quarter of the previous year.

In the Operations Center in Israel

●

The COVID-19 pandemic has had a negative impact on the market valuation of IDBD, DIC and operating subsidiaries due to the sharp fall in prices. The mandatory shutdown lasted almost 10 days and was then relaxed under strict health and safety protocols. The effects on the operating businesses have been diverse:

as regards supermarkets (Shufersal) and agriculture (Mahadrin), the impact has been positive in the short-term as these are considered essential activities;

as concerns telecommunications (Cellcom), in particular the international roaming service, there has been a decrease in consumption keyed to a significant drop in international tourism. Cellcom has taken actions to reduce such negative effects by cutting back on expenses and investments during the coronavirus crisis period, including staff downsizing measures.

In PBC, the activities and income from real estate transactions have been adversely affected by the economic situation and the bans on circulation. Consequently, PBC’s cash flow is expected to be somehow vulnerable although it is not possible to estimate as of this date to which extent PBC has made an assessment of its investment properties showing signs of impairment and, as a consequence, a reduction in the value of its properties of Ps. 3,218 has been accounted for.

As regards the Group’s financial debt:

●

IRSA must honor the following maturities within the next 12 months: Series II Non-convertible Notes, having a par value of US$ 71.4, due on July 20, 2020; Series II Non-convertible Notes, having a par value of CLP 31,502.6 (equivalent to US$ 41 approximately), due on August 6, 2020; Series I Non-convertible Notes, having a par value of US$ 181.5, due on November 15, 2020, Series III Non-convertible Notes, having a par value of Ps. 381 (equivalent to US$5), due on February 21, 2021, Series IV Non-convertible Notes, having a par value of US$ 51.3, due on May 21, 2021 and a bank debt in an amount equivalent to US$14.3.

●

Our subsidiary, IRSA CP, must honor the maturity of its Series IV Non-convertible Notes, having a par value of US$ 140, which will become due in September 2020 and a bank debt of US$ 23.

●

The short-term financial debts of our subsidiaries, IDBD-DIC, have a nominal value of US$ 202 (including non-convertible notes and borrowing from banks and financial entities). It should be noted that such commitments have no effects on IRSA because such indebtedness is without recourse against IRSA and is not guaranteed by IRSA’s assets as described in Note 1 to these interim consolidated condensed financial statements.

In May and July 2020, IRSA issued US$ 105.4 non-convertible notes in the local market intended to refinance its short-term debt. The proceeds of such issuances were used by the Company to repay its Non-convertible Notes due on July and August 2020.

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The alternatives that the Company is considering to refinance the repayment of its Non-convertible Notes due in November 2020, February 2021 and June 2021 are a capital increase in an approximate amount of US$ 70 / US$ 100 resolved at the annual shareholders’ meeting held in October 30, 2019 and obtaining financing in the domestic or international capital markets through new issues of debt securities or liability management transactions in the range of US$ 40 and US$ 100, in addition to the transactions already conducted in May and July. In addition, IRSA has a long-standing relationship with banks of the local financial system that may supplement and diversify the Company’s sources of financing in addition to capital market financing. Moreover, as part of our strategy, the Company may sell a portion of its portfolio of assets (hotels and/or land reserves and offices through its subsidiary, IRSA CP) to generate additional funds.

Lastly, IRSA CP has granted IRSA a three-year credit facility up to US$ 180, of which US$ 53.4 were used by IRSA on June 30, 2020. IRSA may still use the remaining balance of such facility and receive dividends from such company in its capacity as controlling shareholder of 80.65% of its capital stock. It should be noted that IRSA CP’s cash and cash equivalents (including current financial investments) as of June 30, 2020 amount to US$ 155 and, following the fiscal year-end, it sold office assets worth US$ 128.6. Moreover, it is working on different financing alternatives in pesos with local banks (syndicated loans and/or bilateral loans) in estimated amounts equivalent to USD 50 and USD 100 to discharge its short-term obligations and it may eventually resort to debt transactions in the local capital market.

The final effects of the coronavirus outbreak and its impact on the country’s economy is unknown and cannot be reasonably foreseen. Nevertheless, although it has had significant effects in the short-run, it is not expected that they will affect the continuation of business. Although there are short-term economic impacts, it is foreseen that the Company will be able to continue meeting its financial commitments in the following twelve months.

The Company is closely monitoring the situation and taking all necessary actions to preserve human life and the Company’s businesses.

35. Subsequent events

Sale of floors in the Boston Tower

On July 15, 2020, IRSA CP entered into a preliminary sales agreement (with delivery of possession) with respect to a medium-height floor in the Boston tower located at Della Paolera 265, Catalinas district, City of Buenos Aires, covering a total area of approximately 1,063 sq. meters and 5 parking lots located in the building. The price of the transaction was Ps. 514.3 (US$ 6.7), which has been paid in full.

On August 26, 2020, IRSA CP executed a preliminary sales agreement (with delivery of possession) with respect to 5 floors in the Boston tower located at Della Paolera 265, Catalinas district, City of Buenos Aires, covering a total area of approximately 6,235 sq. meters and 25 parking lots located in the building. The price of the transaction was Ps. 2,758 million (US$ 34.7 million), which has been paid in full.

Bouchard Sale

On July 30, 2020, IRSA CP sold the entire “Bouchard 710” building, located in the Plaza Roma district of the City of Buenos Aires. The tower has a gross leasable area of 15,014 sq. meters divided into 12 floors for office use and 116 parking lots. The price of the transaction was approximately Ps. 6,782 million (US$ 87 million), which has been paid in full.

Issuance of IRSA Non-convertible Notes

On July 21, 2020, subsequently to the closing of the fiscal year, the Company issued USD 38.4 Non-convertible Notes in the local market through the following instruments:

●

Ps. 360.9 million (equivalent to USD 4.7 million) Series VI NCNs denominated and payable in Argentine pesos at a variable rate (Private Badlar) + 4.0%, with interest accruing on a quarterly basis. The principal amount is repayable in two installments: the first one -equal to 30% of the par value of the notes- payable on the date that is 9 (nine) months after the Issue and Settlement Date and the second installment -equal to 70% of the par value of the notes- payable on the relevant due date, i.e. July 21, 2021. Notes were issued at 100% of their par value.

●

US$ 33.7 million Series VII NCNs denominated in US$ and payable in Argentine pesos at the applicable exchange rate, at a fixed 4.0% rate, with interest accruing on a quarterly basis. Repayment of capital is due on January 21, 2021. Notes were issued at 100% of their par value. The proceeds will be used to refinance short-term indebtedness.

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Payment of non-convertible notes

On July 20, 2020, the Company paid the twentieth interest installment and the principal installment of the US$ 75 Series II Non-convertible Notes issued on July 20, 2010.

On August 6, 2020, the Company paid the second interest installment and the principal installment of the US$ 47 Series II Non-convertible Notes issued on August 6, 2019.

Payment of IRSA CP’s Series IV Non-convertible Notes

On September 14, 2020, the aggregate principal amount of the Series IV Non-convertible Notes in the amount of Ps. 11,176 (US$ 140) and interest accrued as of such date in the amount of Ps. 144 (US$ 1.8) were paid.

Sale of remaining shares in Shufersal

On July 22, 2020, DIC accepted a private investors’ offer to purchase its aggregate shares in Shufersal, representing 26% of the capital stock, in the amount of NIS 1,456 million (NIS 23.5 per share). After the sale, DIC does no longer have any equity interest in such company.

Cellcom

On August 13, 2020, the Israeli Ministry of Communications approved the acquisition of Golan by Cellcom subject to certain conditions. It is worth noting that by such date the Antitrust Commissioner had already granted clearance.

On August 26, 2020, Cellcom informed that it completed the acquisition of Golan in consideration for approximately NIS 545 million in the aggregate, plus the cash equivalents held by Golan as of the closing date less its financial debts, which were paid in full by Cellcom to the Golan shareholders in cash. See information on the agreement in note 4 to these financial statements.

Sale of a subsidiary owned by Elron

On July 16, 2020, Elron, through the investment held by it in CartiHeal (2009) Ltd. (a company in which Elron holds a 27% interest approx.) ("CartiHeal"), entered into an agreement with Bioventus LLC (an international company engaged in the manufacture of medical devices, "Bioventus"), which is a current shareholder of CartiHeal, providing as follows:

● Bioventus will make an additional US$ 15 – US$ 20 investment in CartiHeal, at a company value of USD 180.

● Bioventus will be granted a call option to buy 100% of the shares in CartiHeal.

● CartiHeal will have a put option to sell 100% of its capital stock to Bioventus.

The call option may be exercised at any time after the investment is made. The put option may be exercised subject to pivotal clinical trial success, which includes the successful attainment of certain goals of the secondary trial, subject to obtaining the FDA’s approval of the Agili-C device of CartiHeal, which fully coincides with the success of the trial.

Sale of Clal Shares

On June 28 and July 6, 2020, IDBD sold 4,791,618 shares in Clal held by it through swap transactions, at an average price of NIS 30/share, representing 7.1% of the capital stock.

In addition, on September 3, 2020, IDBD sold 2,376,527 shares in Clal, representing 3.5% of its capital stock, at an average price of NIS 32.475/share, amounting to NIS 77.2 in the aggregate.

As a consequence of such transactions, IDBD’s current stake in Clal represents 4.99% of its capital stock and, as a result, IDBD is no longer regarded as an interested party in Clal under the Israeli Securities Regulations.

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Increase in the interest held in PBC

In July 2020, DIC acquired 1.4% of PBC capital stock in consideration for NIS 18.

DIC notes repurchase plan

On August 20, 2020, DIC’s Board of Directors approved the extension of its notes repurchase plan (Series F and J) until December 31, 2020 up to NIS 300. Repurchases shall be made on the basis of market opportunities and the scope thereof shall be determined by the management.

IDBD financing agreement

On August 30, 2019, the Company's Board of Directors approved the signing of a commitment with Dolphin, to make capital contributions for up to the amount of NIS 210, according to the schedule of commitments assumed by Dolphin between September 2019 and September 2021 with IDBD.

Dolphin undertook to make contributions to IDBD subject to the occurrence of certain events in accordance with the following scheme: (i) NIS 70 to be contributed immediately; (ii) NIS 70 to be contributed until September 2, 2020 and (iii) NIS 70 to be contributed until September 2, 2021. According to Dolphin's agreement with IDBD, said contributions will have the character of capital contributions resulting in the issuance of new IDBD shares in favor of the parent company or may be granted in the form of a subordinated loan.

On September 7, 2020, the Company communicated that, with respect to the capital contributions committed for September 2, 2020 and 2021, it considers that there are doubts regarding the fullfilment of the pre-conditions established for making such contributions. Accordingly, it has resolved not to make the contribution corresponding to 2020.

Shareholders’ Meeting

On October 26, 2020, the Shareholders’ Meeting has resolved to distribute the amount of ARS 484,000,000 (four hundred and eighty four million Argentine pesos), as dividends payable in shares of IRSA Propiedades Comerciales S.A., a Company’s subsidiary, to the shareholders ratably according to their shareholding interests.

Exchange Offer- Issuance of Series VIII and IX Notes

As a consequence of the new restrictions on access to the Foreign Exchange Market, IRSA launched an exchange offer on its Series I Notes due on November 15, 2020 (the “Existing Notes”). The abovementioned restrictions to obtain United States dollars established under Communication “A” 7,106 apply for the purchase of foreign currency intended for repayment of principal maturing between October 15, 2020 and March 31, 2021 in respect of the issuance of foreign currency-denominated debt securities registered with official registries in Argentina by private sector clients or the entities themselves. For such purposes, all Eligible Holders (the “Eligible Holders”) were invited by IRSA to Exchange the Existing Notes, Series I Notes.

On October 22, 2020, IRSA announced Notes to be issued in exchange for the Existing Notes, Series I Notes, or through the Cash Subscription (the “Cash Subscription”), as applicable, pursuant to the terms and methods for the exchange of the Existing Notes. The exchange offer consisted on the following two options for the bondholders terms:

(i)

A repayment of principal amount of Existing Notes tendered for Exchange, in cash in United States Dollars, in an amount resulting from dividing USD 72,607,482.80 by the total number of Existing Notes tendered in Exchange for the Series VIII, always provided such quotient is less than or equal to USD 1 whereas if such quotient is higher than USD 1 the consideration shall be equal to USD 1 (“Principal Repayment”); which would represent at least 40% of the amount of the Existing Notes tendered and the remaining amount until reaching USD 1 of each USD1 of the Existing Notes tendered for Exchange, in Series VIII Notes. Series VIII Notes to be issued at a fixed nominal interest rate of 10.00% per annum and maturing 3 (three) years after the Date of Issue and Settlement, with annual repayments, denominated and payable in United States Dollars, in a principal amount up to USD 108,911224 to be paid in kind by tendering for exchange of the Existing Notes . In all cases, the sum of (i) and (ii) shall be the equivalent to USD1 per each USD1 of Existing Notes tendered for Exchange.; and

(ii)

A par for par exchange of notes Series IX for each Existing Notes presented to the Exchange. Series IX Notes to be issued at a nominal fixed interest rate of 10% per annum, maturing on March 1, 2023, denominated and payable in a principal amount up to USD 108,911,224, that may be increased up to the Maximum Aggregate Principal Amount (the “Maximum Aggregate Principal Amount”), to be paid in kind by tendering for exchange the Existing Notes, or by Subscription in Cash.

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For both options interest accrued on the Existing Notes until the Date of Settlement of the Exchange Offer will be paid in cash:

Moreover, the Company offers an early exchange consideration equivalent to USD 0.02 per each USD 1 of Existing Notes tendered and accepted in exchange for Series IX Notes prior to the deadline to receive the consideration for early acceptance (the “Early Exchange Consideration”). Such consideration shall be paid in Pesos on the Date of Issue and Settlement as per the exchange rate reported by Communication “A” 3500 of the Central Bank of Argentina on the business day next preceding the Exchange Expiration Date. For the purposes of receiving the Early Exchange Consideration, the Eligible Holders shall tender the Existing Notes in their possession on or before the Deadline to Receive the Early Exchange Consideration.

On November 2, 2020, the Company, announced the results of the Early Bird of Series IX Notes. As of October 30, 2020, deadline for accessing the Early Bird, exchange orders have been submitted for a total amount equivalent to USD 70,971,181 for Series IX Notes.

All existing notes presented on or before the above mentioned deadline have been accepted by the Company and will be eligible to receive the consideration on the Issue and Settlement Date.

As timely announced, the Exchange Offer would expire on November 5, 2020, unless it is extended by the Company. Finally, on November 6, 2020, the Company decided to extend the Exchange Offer, to November 10, 2020. This extension does not imply a modification to the economic terms of the Exchange Offer.

On November 11, 2020, IRSA reported the results of the Exchange Offer. Eligible holders have been presented for a total amount equivalent (for both Classes) to USD 178,458,188, representing 98.31% of the face value of the Existing Notes in Circulation, through the participation of 6,571 orders.

SERIES VIII Notes issuance:

The Face Value of Existing Notes presented and accepted for the Exchange totaled USD 104,287,243 and the Nominal Value of Series VIII Notes to be issued was USD 31,679,760. The maturity date will be November 12, 2023.

According to the terms and subject to the conditions established in the Prospectus Supplement, Eligible Holders whose existing notes have been accepted for the Exchange by the Company, will receive for every USD 1 of Existing Notes submitted to the Exchange, the accrued interest of the existing notes until the settlement and issue date and the following:

a. USD 0.69622593 in cash for each USD 1 of Existing Notes presented to the Exchange; and

b. The remaining amount until completing 1 USD for each 1 USD of Existing Notes presented to the Exchange, in Notes Series VIII.

SERIES IX Notes Issuance:

Face Value of Existing Notes presented and accepted for the Exchange totaled USD 74,170,945 and the Nominal Value of Series IX Notes to be issued (together with the Face Value to be issued as a result of the cash subscription) is USD 80,676,505. The maturity date will be March 1, 2023.

Modifications to the Terms of the Existing Notes:

Pursuant to the terms and conditions specified on the pricing supplement of the Existing Notes, and considering that consent has been obtained for an amount greater than 90% of the principal of the Existing Notes, the Company made the Non-Essential Proposed Modifications and / or the Essential Proposed Modifications, by means of which the terms and conditions of the existing notes will be modified and replaced.

Consequently, by virtue of the implementation of the Proposed Non-Essential Modifications, the entire section of "Certain Commitments" and "Events of Default" was eliminated from the terms and conditions set forth in the prospectus supplements dated May 2, 2019 and dated July 25, 2019 corresponding to the Existing Notes.

Additionally, pursuant to the implementation of the Proposed Essential Modifications, the following terms and conditions of the Existing Notes were modified and replaced:

Expiration Date: It will be March 1, 2023.
Interest Payment Dates: will be the same dates reported for Class IX in the Notice of Results.

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The terms and conditions of the Series I Notes are not modified by the Proposed Essential Modifications and the Proposed Non-Essential Modifications will maintain their full validity.

The implementation of the Proposed Essential Modifications and the Proposed Non-Essential Modifications have been approved by the Company's Board of Directors, dated November 11, 2020.

For more information, see "Proposed Modifications to Existing Notes" of the Prospectus and Exchange Supplement.

Series I Cancellation:

In relation to the Exchange Offer ended on November 10, 2020, and as a result of the settlement of said Exchange, on November 12, 2020, the Company made a partial cancelation for a Nominal Value of USD 178,458,188 of Series I Notes, after the cancellation the Nominal Value under circulation will be USD 3,060,519.

Corporate Information: IDBD

IDBD has been maintaining negotiations with creditors in order to restructure its financial debt in favorable terms. As of June 30, 2020, the total balance of (i) IDBD's Series 9 Bonds was NIS 901 million (the “Series 9”), (ii) IDBD’s Series 14 Bonds were NIS 889 million guaranteed by IDBD’s 70% of DIC’s shares (the "Series 14"), (iii) IDBD's Series 15 Bonds were NIS 238 million guaranteed by 5% of Clal’s shares (the "Series 15"). Due to lack of agreement, on September 17, 2020, a petition was submitted in the District Court in Tel-Aviv-Jaffa (“The Court”) on the subject of granting of an order for the opening of proceedings by the Trustee for the holders of the Company’s Bonds (Series 9) (“The petition”). Within the framework of the petition, the Court was requested to grant an order for the opening of proceedings for the Company pursuant to Section 18 of the Insolvency and Economic Rehabilitation Law, 5778 – 2018 (“The Law”); to instruct the appointment of a trustee for the Company according to law. On September 21, 2020, the holders of the bonds (Series 14) of IDB Development approved making the entire uncleared balance of IDB Development's bonds (Series 14) repayable immediately. On September 22, 2020, the Company submitted its initial response to the Petition in the Court, in which it argues that it is in the best interest of the company and all its creditors to exhaust the negotiations with the controlling shareholder and its creditors during a short period in order to try and maximize the value of its assets, for the benefit of the creditors and the company, and avoid costs and additional harmful consequences. In addition, the response of Dolphin Netherlands B.V. (the controlling shareholder of the Company) was also submitted, as were responses by the Trustees for the bondholders (Series 15 and Series 14) of the Company to the Petition. It should be mentioned that in tandem to his response, the Trustee of bondholders (Series 14) of the company submitted petitions for the enforcement of a lien and for the appointment of a receiver as well as an urgent petition for the setting of a hearing on the said petitions for a receivership, together with the hearing on the petition, which was set for September 24, 2020. On September 25, 2020, the Court declared the insolvency and liquidation of IDBD and initiated liquidation proceedings. The Court appointed a trustee for the shares of IDBD and a custodian for the shares of DIC and Clal. We are analyzing together with our local and international advisors the decision, including alternatives and courses of action. See Note 1.

Boston Tower floor´s sale by IRSA CP

On November 5, 2020, IRSA CP has sold and transferred 4 floors of the Boston tower located at 265 Della Paolera Street, in the Catalinas district of the Autonomous City of Buenos Aires for a gross leasable area of approximately 3,892 sqm and 15 garage units located in the building. The transaction price was approximately USD 22.9 million (USD/sqm 5,570), which was paid in full. After this operation, IRSA CP owns 3 floors with an approximate location area of 3,266 m2 in addition to garage units and other complementary spaces.

On November 12, 2020, IRSA CP has sold and transferred three floors of the Boston tower located at 265 Della Paolera Street, in the Catalinas district of the Autonomous City of Buenos Aires for a gross leasable area of approximately 3,266 sqm, a retail store of approximately 225 sqm and 15 garage units located in the building. The transaction price was approximately USD 19.1 million (USD/sqm 5,490), which was paid in full. After this operation, IRSA CP has no remaining leasable area in the building, only keeping a space of the first basement.

Investors Assembly

At the General Ordinary and Extraordinary Shareholders’ Meeting held on October 26, 2020, a distribution of a dividend in kind for ARS 484 million in shares of IRSA Propiedades Comerciales, subsidiary of IRSA.

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Exchange of debentures

On November 12, 2020, the company carried out an exchange operation of its Series I Notes, for a nominal value of USD 181.5 million

Nominal Value of Existing Notes presented and accepted for the Exchange (for both Series): approximately USD 178.5 which represents 98.31% acceptance, through the participation of 6,571 orders.

●

Series VIII: Face Value of Existing Notes presented and accepted for the Exchange: approximately USD 104.3 million.



Nominal Value to be Issued: approximately USD 31.7 million.



Issuance Price: 100% nominal value.



Maturity Date: It will be November 12, 2023.



Consideration of the Exchange Offer: eligible holders whose existing notes have been accepted for the Exchange by the Company, will receive for every USD 1 submitted to the Exchange, the accrued interest of the existing notes until the settlement and issue date and the following:

■

A sum of money of approximately USD 72,6 million for repayment of capital of such existing notes presented to the Exchange, in cash, in United States Dollars, which will be equivalent to USD 0.69622593 for each USD 1 of existing notes presented to the Exchange; and

■

The remaining amount until completing 1 USD for each 1 USD of existing notes presented to the Exchange, in notes Series VIII.



Annual Nominal Fixed Interest Rate: 10.00%.



Amortization: The capital of the Series VIII Notes will be amortized in 3 annual installments (33% of the capital on November 12, 2021, 33% of the capital on November 12, 2022, 34% of the capital on the maturity date of Series VIII).



Interest Payment Dates: Interest will be paid quarterly for the expired period as of the issue and settlement date.



Payment Address: Payment will be made to an account at Argentine Securities Commission in the Autonomous City of Buenos Aires

●

Series IX: Face Value of Existing Notes presented and accepted for the Exchange: approximately USD 74.2 million.



Nominal Value to be Issued (together with the Face Value to be issued as a result of the cash subscription): approximately USD 80.7 million.



Issuance Price: 100% nominal value.



Maturity Date: It will be March 1, 2023.



Consideration of the Exchange Offer: the eligible holders whose existing notes have been accepted for the Exchange by the Company, will receive Series IX Notes for 100% of the capital amount presented for exchange and accepted by the Company and the accrued interest of the existing notes until the settlement and issue date.



Early Bird: will consist of the payment of USD 0.02 for each USD 1 of existing notes delivered and accepted in the Exchange on or before the deadline date to Access the Early Bird. Said consideration will be paid in Pesos on the issue and settlement date according to the exchange rate published by Communication “A” 3500 of the Central Bank of Argentina on the business day prior to the expiration date of the Exchange, which is ARS 79.3433 for each USD 1 of Existing Notes delivered and accepted in the Exchange.



Annual Nominal Fixed Interest Rate: 10.00%.



Amortization: The capital of the Series IX Notes will be amortized in one installment on the maturity date.



Interest Payment Dates: Interest will be paid quarterly for the expired period from the issuance and settlement date.



Payment Address: Payment will be made to an account at Argentine Securities Commission in New York, United States, for which purpose the Company will make US dollars available to an account reported by the Argentine Securities Commission in said jurisdiction.

●

Modifications to the Terms of the Existing Notes: Considering that consent has been obtained for an amount greater than 90% of the existing notes capital, the Company has modified and replaced the following essential and non-essential terms and conditions of the existing notes.



By virtue of the implementation of the Proposed Non-Essential Modifications, the entire section of "Certain Commitments" and "Events of Default" is eliminated from the terms and conditions set forth in the prospectus supplements dated May 2, 2019 and dated July 25, 2019 corresponding to the existing notes.

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

Additionally, pursuant to the implementation of the Proposed Essential Modifications, the following terms and conditions of the Existing Notes are modified and replaced:

■

Expiration Date: It will be March 1, 2023.

■

Interest Payment Dates: will be the same dates reported for Class IX in the Notice of Results.



It is clarified that the terms and conditions of the Series I Notes not modified by the Proposed Essential Modifications and the Proposed Non-Essential Modifications will maintain their full validity.

Loan to related party

On October 23, 2020, Dolphin Netherlands has granted a loan to Yad Leviim Ltd. for a term of 60 days, in a principal amount of USD 16,250,000 at a rate interest of 5% per year. Yad Leviim Ltd. is a company controlling by Eduardo Elsztain.

Sale of Manibil S.A. Shares

On December 22, 2020, the company sold and transferred 217,332,873 (two hundred and seventeen million three hundred thirty-two thousand eight hundred and seventy-three) ordinary Class B shares, nominative not endorsable, with a nominal value of ARS 1 and entitled to one vote per share owned by the Company, representing 49% of the stock capital of MANIBIL SA, a company dedicated to real estate developments. The price for the sale of the shares amounts to Ps. 576,974,387.50 (five hundred seventy-six million nine hundred seventy-four thousand three hundred eighty-seven and fifty cents argentine pesos). After this transaction, IRSA is no longer a shareholder of Manibil S.A. As a repayment of the sale price of the shares, the Company received rights to acquire future real estate assets from Manibil.

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irsaq1fy21

IRSA Inversiones y Representaciones Sociedad Anónima

Unaudited Condensed Interim Consolidated Financial Statements as of September 30, 2020 and for the three-month period ended as of that date, presented comparatively

Legal information

Denomination: IRSA Inversiones y Representaciones Sociedad Anónima.

Fiscal year N°: 78, beginning on July 1st, 2019.

Legal address: 108 Bolívar St., 1st 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: October 29, 2018.

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

Registration number with the Superintendence: 213,036.

Capital: 578,676,460 shares.

Common Stock subscribed, issued and paid up nominal value (in millions of Ps.): 579.

Parent Company: Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria

(Cresud S.A.C.I.F. y A.).

Legal Address: 877 Moreno St., 23rd. 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: 359,102,219 common shares.

Percentage of votes of the Parent Company (direct and indirect interest) on the shareholders’ equity: 62.34% (1).

	CAPITAL<br>STATUS
Type of<br>stock	Shares authorized for<br>Public Offering (2)	Subscribed, issued<br>and paid up nominal value<br><br><br>(in<br>millions of Pesos)
Common stock with a<br>face value of Ps. 1 per share and entitled to 1 vote<br>each	578,676,460	579

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

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

Index

Glossary <br>....	1
Unaudited Condensed<br>Interim Consolidated Statements of Financial<br>Position	2
Unaudited Condensed<br>Interim Consolidated Statements of Income and Other Comprehensive<br>Income	3
Unaudited Condensed<br>Interim Consolidated Statements of Changes in Shareholders’<br>Equity	4
Unaudited Condensed<br>Interim Consolidated Statements of Cash<br>Flows	6
Notes to the<br>Unaudited Condensed Interim Consolidated Financial<br>Statements:
Note 1 – The<br>Group’s business and general information	7
Note 2 –<br>Summary of significant accounting policies	7
Note 3 –<br>Seasonal effects on operations	9
Note 4 –<br>Acquisitions and disposals	9
Note 5 –<br>Financial risk management and fair value<br>estimates	10
Note 6 –<br>Segment information	10
Note 7 –<br>Investments in associates and joint ventures	13
Note 8 –<br>Investment properties	15
Note 9 –<br>Property, plant and equipment	16
Note 10 –<br>Trading properties	16
Note 11 –<br>Intangible assets	16
Note 12 –<br>Right-of-use assets	17
Note 13 –<br>Financial instruments by category	17
Note 14 –<br>Trade and other receivables	18
Note 15 –<br>Cash flow information	20
Note 16 –<br>Trade and other payables	21
Note 17 –<br>Borrowings	22
Note 18 –<br>Provisions	22
Note 19 –<br>Taxes	23
Note 20 –<br>Revenues	23
Note 21 –<br>Expenses by nature	25
Note 22 –<br>Cost of goods sold and services provided	25
Note 23 –<br>Other operating results, net	26
Note 24 –<br>Financial results, net	26
Note 25 –<br>Related party transactions	27
Note 26 – CNV<br>General Resolution N° 622	29
Note 27 –<br>Foreign currency assets and liabilities	29
Note 28 –<br>Groups of assets and liabilities held for sale	30
Note 29 –<br>Results from discontinued operations	30
Note 30 –<br>Other significant events of the period	31
Note 31 –<br>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<br>Crédito y Securitización S.A.
BCRA	Central Bank of the<br>Argentine Republic
BHSA	Banco Hipotecario<br>S.A.
Cellcom	Cellcom Israel<br>Ltd.
Clal	Clal Holdings<br>Insurance Enterprises Ltd.
CNV	Securities Exchange<br>Commission
CODM	Chief operating<br>decision maker
CPF	Collective<br>Promotion Funds
Condor	Condor Hospitality<br>Trust Inc.
Cresud	Cresud S.A.C.I.F. y<br>A.
DIC	Discount Investment<br>Corporation Ltd.
Eclsa	E-Comerce Latina<br>S.A.
Efanur	Efanur<br>S.A.
Financial<br>Statements	Unaudited Condensed<br>Interim Consolidated Financial Statements
Gav-Yam	Gav-Yam, Bayside<br>Land Corporation Ltd
Annual Financial<br>Statements	Consolidated<br>Financial Statements as of June 30, 2019
HASAU	Hoteles Argentinos<br>S.A.U.
IAS	International<br>Accounting Standards
IASB<br><br><br>IBC	International<br>Accounting Standards Board<br><br><br>Israel Broadband<br>Company
IDBT	IDB Tourism (2009)<br>Ltd
IDBD	IDB Development<br>Corporation Ltd.
IFISA	Inversiones<br>Financieras del Sur S.A.
ISPRO	Ispro the Israel<br>Properties Rental Corp. Ltd.
IFRS	International<br>Financial Reporting Standards
IRSA, The<br>Company”, “Us”, “We”	IRSA Inversiones y<br>Representaciones Sociedad Anónima
IRSA<br>CP	IRSA Propiedades<br>Comerciales S.A.
Israir	Israir Airlines<br>& Tourism Ltd.
LRSA<br><br><br>Mehadrin	La Rural<br>S.A.<br><br><br>Mehadrin<br>Ltd.
Metropolitan	Metropolitan 885<br>Third Avenue Leasehold LLC
MPIT	Minimum presumed<br>income tax
NCN	Non-convertible<br>notes
New<br>Lipstick	New Lipstick<br>LLC
NFSA	Nuevas Fronteras<br>S.A.
NIS	New Israeli<br>Shekel
PBC	Property &<br>Building Corporation Ltd.
PBEL	PBEL Real Estate<br>LTD
Quality	Quality Invest<br>S.A.
Shufersal	Shufersal<br>Ltd.
Tarshop	Tarshop<br>S.A.
TGLT	TGLT<br>S.A
Tyrus	Tyrus<br>S.A.

IRSA Inversiones y Representaciones Sociedad Anónima

Unaudited Condensed Interim Consolidated Statements of Financial Position

as of September 30, 2020 and June 30, 2020

(All amounts in millions, except otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

	Note	09.30.2020	06.30.2020
ASSETS
Non-current assets
Investment<br>properties	8	166,478	244,966
Property,<br>plant and equipment	9	2,338	40,618
Trading<br>properties	10, 22	1,328	5,228
Intangible<br>assets	11	1,186	29,911
Right-of-use<br>assets	12	621	21,379
Investments<br>in associates and joint ventures	7	12,718	80,089
Deferred<br>income tax assets	19	148	681
Income<br>tax and MPIT credit		26	27
Restricted<br>assets	13	-	2,014
Trade<br>and other receivables	14	1,881	24,898
Investments<br>in financial assets	13	506	3,782
Derivative<br>financial instruments	13	-	153
Total non-current assets		187,230	453,746
Current assets
Trading<br>properties	10, 22	218	2,493
Inventories	22	65	5,041
Restricted<br>assets	13	8	6,684
Income<br>tax and MPIT credit		105	331
Group<br>of assets held for sale	28	-	44,868
Trade<br>and other receivables	14	4,998	39,986
Investments<br>in financial assets	13	3,378	20,922
Financial<br>assets held for sale	13	-	3,636
Derivative<br>financial instruments	13	16	227
Cash<br>and cash equivalents	13	4,397	97,276
Total current assets		13,185	221,464
TOTAL ASSETS		200,415	675,210
SHAREHOLDERS’ EQUITY
Shareholders'<br>equity attributable to equity holders of the parent (according to<br>corresponding statement)		70,375	61,500
Non-controlling<br>interest		23,364	70,544
TOTAL SHAREHOLDERS’ EQUITY		93,739	132,044
LIABILITIES
Non-current liabilities
Borrowings	17	31,967	320,616
Lease<br>liabilities		586	14,400
Deferred<br>income tax liabilities	19	42,121	47,408
Trade<br>and other payables	16	1,745	2,335
Provisions	18	145	3,297
Employee<br>benefits		-	481
Derivative<br>financial instruments	13	29	59
Salaries<br>and social security liabilities		33	210
Total non-current liabilities		76,626	388,806
Current liabilities
Trade<br>and other payables	16	5,007	31,943
Borrowings	17	24,471	84,338
Lease<br>liabilities		139	5,242
Provisions	18	108	2,627
Group<br>of liabilities held for sale	28	-	23,912
Salaries<br>and social security liabilities		235	4,419
Income<br>tax and MPIT liabilities		30	673
Derivative<br>financial instruments	13	60	1,206
Total current liabilities		30,050	154,360
TOTAL LIABILITIES		106,676	543,166
TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES		200,415	675,210

The accompanying notes are an integral part of these Unaudited Condensed Interim Consolidated Financial Statements.

By:	/s/ <br>Eduardo<br>S. Elsztain
	President

IRSA Inversiones y Representaciones Sociedad Anónima

Unaudited Condensed Interim Consolidated Statements of Income and Other Comprehensive Income

for the three-month periods ended September 30, 2020 and 2019

(All amounts in millions, except otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

	Note	Three month
		09.30.2020	09.30.2019
Revenues	20	1,609	4,487
Costs	21, 22	(1,097)	(1,682)
Gross profit		512	2,805
Net<br>gain from fair value adjustment of investment<br>properties	8	24,089	12,349
General<br>and administrative expenses	21	(644)	(661)
Selling<br>expenses	21	(450)	(295)
Other<br>operating results, net	23	(18)	(56)
Profit from operations		23,489	14,142
Share<br>of profit of associates and joint ventures	7	147	737
Profit before financial results and income tax		23,636	14,879
Finance<br>income	24	56	83
Finance<br>costs	24	(1,593)	(1,782)
Other<br>financial results	24	624	(9,152)
Inflation<br>adjustment		(29)	(393)
Financial results, net		(942)	(11,244)
Profit before income tax		22,694	3,635
Income<br>tax expense	19	(7,958)	(2,505)
Profit for the period from continuing operations		14,736	1,130
(Loss)<br>/ profit for the period from discontinued operations	29	(6,396)	13,887
Profit for the period		8,340	15,017
Other comprehensive income:
Items that may be reclassified subsequently to profit or<br>loss:
Currency<br>translation adjustment		(5,833)	71
Other<br>reserves		1,954	1,730
Items that may not be reclassified subsequently to profit or loss,<br>net of income tax:		-	-
Actuarial<br>profit from defined contribution plans		-	(11)
Other comprehensive (loss) / income for the period from continuing<br>operations		(3,879)	1,790
Other<br>comprehensive (loss) / income for the period from discontinued<br>operations		(4,794)	14,057
Total other comprehensive (loss) / income for the<br>period		(8,673)	15,847
Total comprehensive (loss) / income for the period		(333)	30,864
Total<br>comprehensive income from continuing operations		10,857	2,920
Total<br>comprehensive (loss) / income from discontinued<br>operations		(11,190)	27,944
Total comprehensive (loss) / income for the period		(333)	30,864
Profit for the period attributable to:
Equity<br>holders of the parent		6,615	4,509
Non-controlling<br>interest		1,725	10,508
Profit from continuing operations attributable to:
Equity<br>holders of the parent		11,679	247
Non-controlling<br>interest		3,057	883
Total comprehensive income / (loss) attributable to:
Equity<br>holders of the parent		2,914	3,568
Non-controlling<br>interest		(3,247)	27,296
Total comprehensive income / (loss) from continuing operations<br>attributable to:
Equity<br>holders of the parent		15,034	2,062
Non-controlling<br>interest		(4,177)	858
Profit per share attributable to equity holders of the<br>parent:
Basic		11.50	7.84
Diluted		11.42	7.84
Profit per share from continuing operations attributable to equity<br>holders of the parent:
Basic		20.31	0.43
Diluted		20.17	0.43

The accompanying notes are an integral part of these Unaudited Condensed Interim Consolidated Financial Statements.

By:	/s/ <br>Eduardo<br>S. Elsztain
	President

IRSA Inversiones y Representaciones Sociedad Anónima

Unaudited Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity

for the three-month period ended September 30, 2020

(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<br>(1)	Share premium	Additional paid-in capital from treasury shares	Legal reserve	Special reserve Resolution CNV 609/12 (2)	Other reserves (3)	Retained earnings	Subtotal	Non-controlling interest	Total Shareholders’ equity
Balance as of July 1, 2020	575	4	14,613	15,653	102	522	10,124	6,345	13,562	61,500	70,544	132,044
Profit<br>for the period	-	-	-	-	-	-	-	-	6,615	6,615	1,725	8,340
Other<br>comprehensive loss for the period	-	-	-	-	-	-	-	(3,701)	-	(3,701)	(4,972)	(8,673)
Total profit and other comprehensive (loss) / income for the<br>period	-	-	-	-	-	-	-	(3,701)	6,615	2,914	(3,247)	(333)
Capitalisation<br>of irrevocable contributions	-	-	-	-	-	-	-	-	-	-	4	4
Dividend<br>distribution	-	-	-	-	-	-	-	-	-	-	(20)	(20)
Other<br>changes in equity	-	-	-	-	-	-	-	5,926	-	5,926	(43,846)	(37,920)
Reserve<br>for share-based payments	-	-	-	-	2	-	-	(2)	-	-	-	-
Changes<br>in non-controlling interest	-	-	-	-	-	-	-	35	-	35	(71)	(36)
Balance as of September 30, 2020	575	4	14,613	15,653	104	522	10,124	8,603	20,177	70,375	23,364	93,739

(1) Includes Ps. 1 of Inflation adjustment of treasury shares. See Note 16 to the Annual Financial Statements.

(2) Related to CNV General Resolution N° 609/12.

(3) Group´s other reserves for the period ended September 30, 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	Special reserve	Reserve for defined contribution plans	Other reserves from subsidiaries	Revaluation surplus	Total Other reserves
Balance as of July 1, 2020	(185)	(5,673)	212	1,822	(784)	(394)	11,190	(422)	115	464	6,345
Other<br>comprehensive loss for the period	-	-	-	-	(3,476)	(78)	-	(147)	-	-	(3,701)
Total comprehensive loss for the period	-	-	-	-	(3,476)	(78)	-	(147)	-	-	(3,701)
Reserve<br>for share-based payments	1	-	(3)	-	-	-	-	-	-	-	(2)
Changes<br>in non-controlling interest	-	35	-	-	-	-	-	-	-	-	35
Other<br>changes in equity	-	(52)	-	-	5,034	215	-	784	(115)	60	5,926
Balance as of September 30, 2020	(184)	(5,690)	209	1,822	774	(257)	11,190	215	-	524	8,603

The accompanying notes are an integral part of these Unaudited Condensed Interim Consolidated Financial Statements.

By:	/s/ <br>Eduardo<br>S. Elsztain
	President

IRSA Inversiones y Representaciones Sociedad Anónima

Unaudited Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity

for the three-month period ended September 30, 2019

(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<br>(1)	Share premium	Additional paid-in capital from treasury shares	Legal reserve	Special reserve Resolution CNV 609/12 (2)	Other reserves (3)	Retained earnings	Subtotal	Non-controlling interest	Total Shareholders’ equity
Balance as of July 1, 2019	575	4	14,613	15,653	85	522	10,121	73,258	(65,479)	49,352	82,692	132,044
Adjustments<br>previous periods (IFRS 9 and 15)	-	-	-	-	-	-	-	-	(1,248)	(1,248)	(926)	(2,174)
Balance as of July 1, 2018 (recast)	575	4	14,613	15,653	85	522	10,121	73,258	(66,727)	48,104	81,766	129,870
Profit<br>for the period	-	-	-	-	-	-	-	-	4,509	4,509	10,508	15,017
Other<br>comprehensive (loss) / income for the period	-	-	-	-	-	-	-	(941)	-	(941)	16,788	15,847
Total profit / (loss) and other comprehensive income for the<br>period	-	-	-	-	-	-	-	(941)	4,509	3,568	27,296	30,864
Capitalisation<br>of irrevocable contributions	-	-	-	-	-	-	-	-	-	-	11	11
Dividend<br>distribution	-	-	-	-	-	-	-	-	-	-	(18)	(18)
Decrease<br>due to loss of control	-	-	-	-	-	-	-	-	25	25	(46,419)	(46,394)
Changes<br>in non-controlling interest	-	-	-	-	-	-	-	(185)	-	(185)	(74)	(259)
Balance as of September 30, 2019	575	4	14,613	15,653	85	522	10,121	72,132	(62,193)	51,512	62,562	114,074

(1) Includes Ps. 1 of Inflation adjustment of treasury shares. See Note 16 to the Annual Financial Statements.

(2) Related to CNV General Resolution N° 609/12.

(3) Group’s other reserves for the period ended September 30, 2019 are comprised as follows:

The accompanying notes are an integral part of these Unaudited Condensed Interim Consolidated Financial Statements

	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, 2019	(176)	(5,678)	223	1,821	282	(10)	76,906	(334)	112	112	73,258
Other<br>comprehensive loss for the period	-	-	-	-	(866)	-	-	-	(75)	-	(941)
Total comprehensive loss for the period	-	-	-	-	(866)	-	-	-	(75)	-	(941)
Share-based<br>compensation	3	-	(3)	-	-	-	-	-	-	-	-
Changes<br>in non-controlling interest	-	(185)	-	-	-	-	-	-	-	-	(185)
Balance as of September 30, 2019	(173)	(5,863)	220	1,821	(584)	(10)	76,906	(334)	37	112	72,132

The accompanying notes are an integral part of these Unaudited Condensed Interim Consolidated Financial Statements.

By:	/s/ <br>Eduardo<br>S. Elsztain
	President

IRSA Inversiones y Representaciones Sociedad Anónima

Unaudited Condensed Interim Consolidated Statements of Cash Flows

for the three-month periods ended September 30, 2020 and 2019

(All amounts in millions, except otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

NOTE	Note	09.30.2020	09.30.2019
Operating activities:
Net<br>cash generated from continuing operating activities before income<br>tax paid	15	1,138	2,926
Income<br>tax and MPIT paid		(3)	(197)
Net cash generated from continuing operating<br>activities		1,135	2,729
Net<br>cash generated from discontinued operating activities		2,227	7,738
Net cash generated from operating activities		3,362	10,467
Investing activities:
Acquisition<br>of interest in associates and joint ventures		-	(5)
Contributions<br>and issuance of capital in associates and joint<br>ventures		(8)	(112)
Acquisition<br>and improvements of investment properties		(719)	(824)
Proceeds<br>from sales of investment properties		9,604	-
Acquisitions<br>and improvements of property, plant and equipment		(45)	(40)
Acquisitions<br>of intangible assets		(6)	(7)
Net<br>increase of restricted deposits		-	(226)
Dividends<br>collected from associates and joint ventures		-	26
Proceeds<br>from loans granted		-	45
Acquisitions<br>of investments in financial assets		(6,181)	(11,245)
Proceeds<br>from disposal of investments in financial assets		6,809	14,811
Interest<br>received from financial assets		157	202
Dividends<br>received from financial assets		-	4
Loans<br>granted		-	(639)
Net cash generated from continuing investing<br>activities		9,611	1,990
Net<br>cash generated from discontinued investing activities		31,830	1,500
Net cash generated from investing activities		41,441	3,490
Financing activities:
Borrowings<br>and issuance of non-convertible notes		3,466	16,293
Payment<br>of borrowings and non-convertible notes		(20,009)	(17,730)
Collections<br>of short term loans, net		4,861	1,686
Interests<br>paid		(2,624)	(2,203)
Repurchase<br>of non-convertible notes		(66)	(1,972)
Acquisition<br>of non-controlling interest in subsidiaries		(53)	(246)
Sale<br>of own non-convertible notes		525	-
Net<br>proceeds from derivate financial instrument		(225)	258
Net cash (used in) / generated from continuing financing<br>activities		(14,125)	(3,914)
Net<br>cash generated from /(used in) discontinued financing<br>activities		(13,019)	(31,325)
Net cash generated from financing activities		(27,144)	(35,239)
Net<br>(decrease) / increase in cash and cash equivalents from continuing<br>activities		(3,379)	805
Net<br>(decrease) / increase in cash and cash equivalents from<br>discontinued activities		21,038	(22,087)
Net<br>(decrease) / increase in cash and cash equivalents		17,659	(21,282)
Cash and cash<br>equivalents at beginning of period		97,276	93,059
Cash<br>and cash equivalents reclassified as held-for-sale		-	36
Deconsolidation<br>of subsidiaries		(104,164)	-
Foreign<br>exchange gain and inflation adjustment on cash and changes in fair<br>value of cash equivalents		(6,374)	13,875
Cash and cash equivalents at end of period	13	4,397	85,688

The accompanying notes are an integral part of these Unaudited Condensed Interim Consolidated Financial Statements.

By:	/s/ <br>Eduardo<br>S. Elsztain
	President

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

The Group’s business and general information

These Financial Statements have been approved for issuance by the Board of Directors, on November 17, 2020.

The Group has established two Operations Centers, Argentina and Israel, to manage its global business, mainly through the following companies, as explained below, the Group has lost control of the Israel Operations Center and it has been deconsolidated as of September 30, 2020:

(*) See note 4. to the Annual Financial Statements for more information about the changes within the Operations Center in Israel.

Operations Center in Israel

As stated in Note 1. to the consolidated financial statements as of June 30, 2020, on September 25, 2020 the Court decreed the insolvency and liquidation of IDBD and appointed a trustee for its shares along with a custodian over DIC and Clal shares. After this decision, the Board of Directors of IDBD was removed from its functions, therefore, the Group lost control as of that date. For comparability purposes, the results of the Israel Operations Center for the three-month periods ended September 30 have been reclassified to discontinued operations.

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, 2020 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 September 30, 2020 and 2019 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.

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 September 30, 2020, according to official statistics (INDEC) and following the guidelines described in Resolution 539/18.

	As of<br>September 30, 2020 (accumulated three months)
Price<br>variation	8%

As a consequence of the aforementioned, these financial statements as of September 30, 2020 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, 2020 and September 30, 2019 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 regarding the loss of control in IDBD See note 1. to these Financial Statements.

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, except for those mentioned in Note 30.

Seasonal effects on operations

Operations Center in Argentina

The operations of the Group’s shopping malls are subject to seasonal effects, which affect the level of sales recorded by lessees. During summer time 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 ranging between July and December, compared to the period between January and June.

Acquisitions and disposals

Significant acquisitions and disposals for the three-month period ended September 30, 2020 are detailed below. Significant acquisitions and disposals for the fiscal year ended June 30, 2020, are detailed in Note 4 to the Annual Financial Statements.

Sale of floors from Boston Tower

On July 15, 2020, IRSA CP entered into a preliminary sale agreement (with delivery of possession) with respect to a medium-height floor from Boston tower located at Della Paolera 265, Catalinas district, City of Buenos Aires, covering a total area of approximately 1,063 sq. meters and 5 parking lots located in the building. The price of the transaction was Ps. 477.7 (US$ 6.7), which has been paid in full.

On August 26, 2020, IRSA CP executed a preliminary sale agreement (with delivery of possession) with respect to 5 floors from Boston tower located at Della Paolera 265, Catalinas district, City of Buenos Aires, covering a total area of approximately 6,235 sq. meters and 25 parking lots located in the building. The price of the transaction was Ps. 2,562 million (US$ 34.7 million), which has been paid in full.

Bouchard sale

On July 30, 2020, IRSA CP sold the entire “Bouchard 710” building, located in the Plaza Roma district of the City of Buenos Aires. The tower has a gross leasable area of 15,014 sq. meters divided into 12 floors for office use and 116 parking lots. The price of the transaction was approximately Ps. 6,300 million (US$ 87 million), which has been paid in full.

Lipstick Building, New York, United States

On August 7, 2020, Metropolitan signed an agreement with the owner of the Ground Lease in which it terminated the relationship, leaving the administration of the building. Accordingly, at June 30, 2020, the Group derecognized Metropolitan's liabilities associated with the ground lease, as well as all the assets and liabilities associated with the building and the administration of the building; and made an agreement with the owner of the Ground Lease that states that Metropolitan is completely released from responsibilities, except for (i) claims for liabilities prior to June 1, 2020 from people who have performed work or provided services in the Building or to Metropolitan and (ii) claims from people who have had an accident on the property dated after August 7, 2020.

Condor Merger Agreement

The closing of the transaction, which had been scheduled for March 23, 2020, did not occur.

On October 14, 2020, Condor entered into an agreement with Nextponint Hospitality Trust and some of its affiliates ("NHT Parties") to resolve any and all claims between them related to the aforementioned merger agreement.

Under the agreement with NHT, the Parties will make three payments to Condor in three installments, with the last payment maturing on December 30, 2020 and for a total of USD 7.0 million.

As of the date of presentation of these financial statements, the Company has 2,245,100 ordinary shares and 325,752 Series E shares of Condor.

Loss of control of IDBD

As described in Note 1. to these financial statements, at the end of September 2020, the Group has lost control of IDBD, deconsolidating the related assets and liabilities and reclassifying the operations from this operations center to discontinued operations.

The following table details the net assets disposed:

	09.30.2020
ASSETS
Investment<br>properties	84,251
Property,<br>plant and equipment	34,396
Trading<br>properties	5,512
Intangible<br>assets	26,194
Right-of-use<br>assets	18,530
Investments<br>in associates and joint ventures	34,721
Deferred<br>income tax assets	407
Income<br>tax credit	305
Restricted<br>assets	6,021
Trade<br>and other receivables	50,669
Investments<br>in financial assets	22,680
Derivative<br>financial instruments	264
Inventories	3,377
Group<br>of assets held for sale	39,441
Cash<br>and cash equivalents	104,164
TOTAL ASSETS	430,932
Borrowings	305,070
Lease<br>liabilities	16,984
Deferred<br>income tax liabilities	11,655
Trade<br>and other payables	22,782
Income<br>tax liabilities	427
Provisions	5,085
Employee<br>benefits	447
Derivative<br>financial instruments	447
Salaries<br>and social security liabilities	3,173
Group<br>of liabilities held for sale	20,646
TOTAL LIABILITIES	386,716
TOTAL NET ASSETS	44,216
Non-controlling<br>interest	(43,846)
Result for loss of control	370
Recycling<br>of currency translation adjustment and other reserves	(3,252)
Total result for loss of control (*)	(2,882)

(*) Included within discontinued operations

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, 2020 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 30 in relation to COVID-19. Furthermore, there have been no transfers between the different hierarchies used to assess the fair value of the Group’s financial instruments, except as mentioned in Note 30.

Segment information

As explained in Note 6 to the Annual Financial Statements, the Group reports its financial performance separately in two Operations Centers. As described in Note 1, the Group lost control of IDBD and has reclassified its results to discontinued operations. Segment information for the period ended September 30, 2019 has been recast for the purposes of comparability with the present period.

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 September 30, 2020 and 2019:

	Three Month ended September 30, 2020
	Operations Center in Argentina	Operations Center in Israel	Total	Joint ventures (1)	Expensesand collectivepromotion funds	Elimination of inter-segment transactions and non-reportable assets<br>/ liabilities (2)	Total as per statement of income / statement of financial<br>position
Revenues	1,218	-	1,218	(8)	405	(6)	1,609
Costs	(651)	-	(651)	14	(460)	-	(1,097)
Gross profit / (loss)	567	-	567	6	(55)	(6)	512
Net<br>gain from fair value adjustment of investment<br>properties	24,926	-	24,926	(837)	-	-	24,089
General<br>and administrative expenses	(649)	(5)	(654)	1	-	9	(644)
Selling<br>expenses	(451)	-	(451)	1	-	-	(450)
Impairment<br>of associates and joint ventures	-	-	-	-	-	-	-
Other<br>operating results, net	(25)	-	(25)	1	9	(3)	(18)
Profit / (loss) from operations	24,368	(5)	24,363	(828)	(46)	-	23,489
Share<br>of (loss) / profit of associates and joint ventures	(472)	-	(472)	619	-	-	147
Segment profit / (loss)	23,896	(5)	23,891	(209)	(46)	-	23,636
Reportable<br>assets	185,020	1,399	186,419	(954)	-	14,950	200,415
Reportable<br>liabilities	-	(2,355)	(2,355)	-	-	(104,321)	(106,676)
Net reportable assets	185,020	(956)	184,064	(954)	-	(89,371)	93,739
	Three Month ended September 30, 2019
---	---	---	---	---	---	---	---
	Operations Center in Argentina	Operations Center in Israel	Total	Joint ventures (1)	Expensesand collectivepromotion funds	Elimination of inter-segment transactions and non-reportable assets<br>/ liabilities (2)	Total as per statement of income / statement of financial<br>position
Revenues	3,609	-	3,609	(25)	910	(7)	4,487
Costs	(740)	-	(740)	11	(953)	-	(1,682)
Gross profit / (loss)	2,869	-	2,869	(14)	(43)	(7)	2,805
Net<br>gain from fair value adjustment of investment<br>properties	12,897	-	12,897	(548)	-	-	12,349
General<br>and administrative expenses	(651)	(28)	(679)	8	-	10	(661)
Selling<br>expenses	(300)	-	(300)	5	-	-	(295)
Other<br>operating results, net	(65)	-	(65)	-	12	(3)	(56)
Profit / (loss) from operations	14,750	(28)	14,722	(549)	(31)	-	14,142
Share<br>of profit of associates and joint ventures	324	-	324	413	-	-	737
Segment profit / (loss)	15,074	(28)	15,046	(136)	(31)	-	14,879
Reportable<br>assets	132,844	542,703	675,547	(771)	-	33,893	708,669
Reportable<br>liabilities	-	(480,535)	(480,535)	-	-	(114,060)	(594,595)
Net reportable assets	132,844	62,168	195,012	(771)	-	(80,167)	114,074

(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 Ps. 8,482 and Ps. 6,051 as of September 30, 2020 and 2019 respectively.

Below is a summarized analysis of the segments from the Group’s Operations Center in Argentina for the periods ended September 30, 2020 and 2019:

	Three Month ended September 30, 2020
	Operations Center in Argentina
	Shopping Malls	Offices	Sales and developments	Hotels	International	Corporate	Others	Total
Revenues	367	541	39	6	263	-	2	1,218
Costs	(134)	(45)	(97)	(129)	(221)	-	(25)	(651)
Gross profit / (loss)	233	496	(58)	(123)	42	-	(23)	567
Net<br>gain from fair value adjustment of investment<br>properties	1,178	13,112	10,096	-	2	-	538	24,926
General<br>and administrative expenses	(328)	(87)	(66)	(57)	(17)	(74)	(20)	(649)
Selling<br>expenses	(73)	(37)	(305)	(19)	(16)	-	(1)	(451)
Other<br>operating results, net	(24)	(1)	(6)	8	-	-	(2)	(25)
Profit / (loss) from operations	986	13,483	9,661	(191)	11	(74)	492	24,368
Share<br>of loss of associates and joint ventures	-	-	(8)	-	(386)	-	(78)	(472)
Segment profit / (loss)	986	13,483	9,653	(191)	(375)	(74)	414	23,896
Investment<br>properties and trading<br>properties	54,124	72,026	43,899	-	103	-	1,986	172,138
Investment<br>in associates and joint ventures	-	-	565	-	1,781	-	7,152	9,498
Other<br>operating assets	282	236	809	1,954	-	-	103	3,384
Operating assets	54,406	72,262	45,273	1,954	1,884	-	9,241	185,020

(i) For the three-month period ended September 30, 2020, the net gain from fair value adjustment of investment properties was Ps. 2,565. The net impact of the values in pesos of our properties was mainly a consequence of the change in macroeconomic conditions:

(a) gain of Ps.19,713.7 as a consequence of an increase in the projected inflation rate plus GDP, with the resulting increase in the cash flows from shopping malls revenues;

(b) loss of Ps.22,963.3 due to the conversion to dollars of the projected cash flow in pesos according to the exchange rate estimates used in the cash flow;

(c) an increase of 72 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 Ps.2,244.

(d) positive impact of Ps.14,539.7 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;

(e) Additionally, due to the impact of the inflation adjustment, Ps. 12,160.3 were reclassified for shopping malls from “Net gain from fair value adjustment” to “Inflation Adjustment” in the Statement of Income and Other Comprehensive Income.

The value of our office buildings and other rental properties measured in real terms increased by 11.9% during the three-month period ended as of September 30, 2020, due to a devaluation of the peso which exceeded the period's inflation rate.

	Three Month ended September 30, 2019
	Operations Center in Argentina
	Shopping Malls	Offices	Sales and developments	Hotels	International	Corporate	Others	Total
Revenues	2,085	697	83	701	3	-	40	3,609
Costs	(180)	(37)	(56)	(429)	(4)	-	(34)	(740)
Gross profit / (loss)	1,905	660	27	272	(1)	-	6	2,869
Net<br>gain from fair value adjustment of investment<br>properties	601	6,845	5,153	-	-	-	298	12,897
General<br>and administrative expenses	(257)	(56)	(66)	(107)	(41)	(88)	(36)	(651)
Selling<br>expenses	(140)	(29)	(53)	(77)	-	-	(1)	(300)
Other<br>operating results, net	(27)	(7)	(16)	(4)	(1)	-	(10)	(65)
Profit / (loss) from operations	2,082	7,413	5,045	84	(43)	(88)	257	14,750
Share<br>of profit / (loss) of associates and joint ventures	-	-	1	-	(228)	-	551	324
Segment profit / (loss)	2,082	7,413	5,046	84	(271)	(88)	808	15,074
Investment<br>properties and trading<br>properties	54,965	40,896	35,580	-	116	-	1,443	133,000
Investment<br>in associates and joint ventures	-	-	574	-	(9,619)	-	5,817	(3,228)
Other<br>operating assetsInvestment	314	74	198	2,155	234	-	97	3,072
Operating assets	55,279	40,970	36,352	2,155	(9,269)	-	7,357	132,844

Below is a summarized analysis of the segments from the Group’s Operations Center in Israel for the periods ended September 30, 2020 and 2019:

	Three Month ended September 30, 2020
	Operations Center in Israel
	Real Estate	Supermarkets	Telecommunications	Insurance	Corporate	Others	Total
Revenues	-	-	-	-	-	-	-
Costs	-	-	-	-	-	-	-
Gross profit	-	-	-	-	-	-	-
Net<br>gain from fair value adjustment of investment<br>properties	-	-	-	-	-	-	-
General<br>and administrative expenses	-	-	-	-	(5)	-	(5)
Selling<br>expenses	-	-	-	-	-	-	-
Impairment<br>of associates and joint ventures	-	-	-	-	-	-	-
Other<br>operating results, net	-	-	-	-	-	-	-
Profit from operations	-	-	-	-	(5)	-	(5)
Share<br>of profit of associates and joint ventures	-	-	-	-	-	-	-
Segment profit	-	-	-	-	(5)	-	(5)
Operating<br>assets	-	-	-	-	1,399	-	1,399
Operating<br>liabilities	-	-	-	-	(2,355)	-	(2,355)
Operating assets (liabilities), net	-	-	-	-	(956)	-	(956)
	Three Month ended September 30, 2019
---	---	---	---	---	---	---	---
	Operations Center in Israel
	Real Estate	Supermarkets	Telecommunications	Insurance	Corporate	Others	Total
Revenues	-	-	-	-	-	-	-
Costs	-	-	-	-	-	-	-
Gross profit	-	-	-	-	-	-	-
Net<br>gain from fair value adjustment of investment<br>properties	-	-	-	-	-	-	-
General<br>and administrative expenses	-	-	-	-	(28)	-	(28)
Selling<br>expenses	-	-	-	-	-	-	-
Other<br>operating results, net	-	-	-	-	-	-	-
Profit from operations	-	-	-	-	(28)	-	(28)
Share<br>of profit of associates and joint ventures	-	-	-	-	-	-	-
Segment profit	-	-	-	-	(28)	-	(28)
Operating<br>assets	204,587	34,536	159,317	20,065	74,195	50,003	542,703
Operating<br>liabilities	(165,817)	-	(127,182)	-	(27,718)	(159,818)	(480,535)
Operating assets (liabilities), net	38,770	34,536	32,135	20,065	46,477	(109,815)	62,168

Investments in associates and joint ventures

Changes in the Group’s investments in associates and joint ventures for the three-month period ended September 30, 2020 and for the year ended June 30, 2020 were as follows:

	September 30, 2020	June 30, 2020
Beginning of the period / year	80,073	38,519
Adjustment<br>previous periods (IFRS 9 and IAS 28)	-	(2,130)
Increase<br>of equity interest in associates and joint ventures	-	3,598
Capital<br>contributions	8	2,909
Capital<br>reduction	-	(114)
Decrease<br>of interest in associate (iv)	(30,980)	-
Deconsolidation<br>(iii)	(34,721)	31,409
Share<br>of profit	662	9,330
Currency<br>translation adjustment	(2,417)	57
Dividends<br>(i)	-	(1,959)
Other<br>comprehensive loss	(333)	(1,340)
Reclassification<br>to held-for-sale	-	(2,228)
Others	409	(1)
Incorporation<br>by business combination	-	2,023
End of the period / year (ii)	12,701	80,073

(i) Note 25.

(ii) As of September 30, 2020 and June 30, 2020 includes Ps. (17) and Ps. (16), reflecting interests in companies with negative equity, which were disclosed in “Provisions” (Note 18).

(iii) The amount as of September 30, 2020 corresponds to the effect of the deconsolidation of IDBD and DIC (See note 4.E).

Regarding the amount as of June 30, 2020, it corresponds to the effect of the deconsolidation of Gav-Yam (See Note 4 to the consolidated Financial Statements as of June 30, 2020)

(iv) Corresponds to the sale of the remaining equity interest in Shufersal in July 2020.

	% ownership interest		Value of Group's interest in equity		Group's interest in comprehensive income / (loss)
Name of the entity	September 30, 2020	June 30, 2020	September 30, 2020	June 30, 2020	September 30, 2020	September 30, 2019
Associates
New<br>Lipstick	49.96%	49.96%	173	503	(330)	(2,141)
BHSA	29.91%	29.91%	4,327	4,385	(60)	477
Condor	18.89%	18.89%	1,548	1,594	(55)	(17)
PBEL	N/A	45.40%	-	-	-	-
Shufersal	N/A	26.02%	-	30,263	17	-
Mehadrin	N/A	45.41%	-	-	-	-
Gav-Yam	N/A	N/A	-	29,365	28	-
Quality	50.00%	50.00%	2,892	2,262	622	400
La<br>Rural SA	50.00%	50.00%	235	219	16	81
TGLT	30.50%	N/A	2,166	2,217	(39)	-
Other<br>joint ventures	N/A	N/A	1,360	9,265	(1,954)	19
Total associates and joint ventures			12,701	80,073	(1,755)	(1,181)

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<br>Lipstick	U.S.	Real<br>estate	N/A	-	(*) (9)	(*) (31)
BHSA	Argentina	Financial	448,689,072	(***) 1,500	(***) (194)	(***) 14,001
Condor	EE.UU.	Hotel	2,245,100	(*) 232	(*) (10)	(*) 76
PBEL	India	Real<br>estate	N/A	(**) (2)	(**) -	(**) (2)
Shufersal	Israel	Retail	N/A	(**) 1,399	(**) 80	(**) 1,930
Mehadrin	Israel	Agropecuaria	N/A	N/A	N/A	N/A
Gav-Yam	Israel	Inmobiliaria	N/A	(**) 1,356	(**) 68	(**) 3,526
Quality	Argentina	Real<br>estate	163,039,244	406	1,243	5,717
La<br>Rural SA	Argentina	Organization<br>of events	714,498	1	224	327
TGLT<br>(1)	Argentina	Real<br>estate	279,502,813	925	(477)	6,295
Other<br>joint ventures			N/A	N/A	N/A	N/A

(*)

Amounts in millions of US Dollars under USGAAP. Condor’s year-end falls on December 31, so the Group estimates their interest with a three-month lag, including material adjustments, if any.

(**)

Amounts in millions of NIS.

(***)

Information as of September 30, 2020 according to BCRA's standards.

(1)

Additionally, 21,600,000 preferred class A shares and 24,948,798 preferred class B shares were subscribed, subject to conversion. As of the date of issuance of these financial statements, these preferred shares have not yet been converted.

Puerto Retiro (joint venture):

There have been no changes to what was informed in Note 8 to the Annual Financial Statements.

Investment properties

Changes in the Group’s investment properties for the three-month period ended September 30, 2020 and for the year ended June 30, 2020 were as follows:

	Three Month ended September 30, 2020				Year ended June 30, 2020
	Rental properties	Undeveloped parcels of land	Properties under development	Total	Total
Fair value at the beginning of the period / year	207,434	33,966	3,566	244,966	359,057
Adjustments<br>previous periods	-	-	-	-	459
Additions	146	-	-	146	5,790
Incorporation<br>by business combination	-	-	-	-	263
Capitalized<br>finance costs	-	-	-	-	87
Capitalized<br>leasing costs	16	1	-	17	21
Amortization<br>of capitalized leasing costs (i)	(3)	-	-	(3)	(16)
Reclassification<br>to assets held for sale	-	-	-	-	(26,085)
Deconsolidation	(82,116)	(854)	(1,281)	(84,251)	(169,600)
Disposals	(9,607)	-	-	(9,607)	(16,312)
Currency<br>translation adjustment	(8,628)	(89)	(142)	(8,859)	57,570
Net<br>(loss)/ gain from fair value adjustment	13,909	9,326	834	24,069	33,732
Fair value at the end of the period / year	121,151	42,350	2,977	166,478	244,966

(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:

	09.30.2020	09.30.2020
Rental<br>and services income	1,304	3,704
Direct<br>operating expenses	(653)	1,195
Development<br>reimbursements / (expenses)	(17)	(23)
Net<br>realized gain from fair value adjustment of investment<br>properties	187	-
Net<br>unrealized gain from fair value adjustment of investment<br>properties	23,902	12,349

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 September 30, 2020, considering the market conditions existing at that date due to the pandemic described in Note 30, incorporating the effect of the variation in the exchange rate in other assets denominated in US Dollars.

Property, plant and equipment

Changes in the Group’s property, plant and equipment for the three-month period ended September 30, 2020 and for the year ended June 30, 2019 were as follows:

	Three Month ended September 30, 2020						Year ended June 30, 2020
	Agricultural establishments	Buildings and facilities	Machinery and equipment	Communication networks	Others	Total	Total
Costs	10,226	13,003	4,826	108,657	13,880	150,592	125,505
Accumulated<br>depreciation	(5,540)	(7,455)	(4,068)	(85,927)	(6,984)	(109,974)	(91,158)
Net book amount at the beginning of the period / year	4,686	5,548	758	22,730	6,896	40,618	34,347
Additions	40	64	3	416	533	1,056	6,107
Disposals	-	(19)	(1)	(40)	-	(60)	(3,558)
Incorporation<br>by business combination	-	-	-	-	-	-	6,576
Impairment<br>/ recovery	(4,373)	(3,071)	(570)	(20,300)	(6,082)	(34,396)	(1,141)
Reclassification<br>to assets assets held for sale	-	(20)	-	-	-	(20)	(295)
Currency<br>translation adjustment	(333)	(249)	(44)	(1,636)	(487)	(2,749)	6,266
Transfers	-	-	-	-	-	-	(280)
Depreciation<br>charges (i)	(20)	(169)	(14)	(1,170)	(738)	(2,111)	(7,404)
Balances at the end of the period / year	-	2,084	132	-	122	2,338	40,618
Costs	5,167	9,264	4,088	80,895	8,118	107,532	150,592
Accumulated<br>depreciation	(5,167)	(7,180)	(3,956)	(80,895)	(7,996)	(105,194)	(109,974)
Net book amount at the end of the period / year	-	2,084	132	-	122	2,338	40,618

(i) As of September 30, 2020, depreciation charges of property, plant and equipment were recognized as follows: Ps. 65 in "Costs" and Ps. 4 in "General and administrative expenses", respectively in the Statement of Income (Note 21). On the other hand, Ps 2.042 has been charged to the result of discontinued operations.

10.

Trading properties

Changes in the Group’s trading properties for the three-month period ended September 30, 2020 and for the year ended June 30, 2020 were as follows:

	Three Month ended September 30, 2020				Year ended June 30, 2020
	Completed properties	Properties under development	Undeveloped sites	Total	Total
Beginning of the period / year	2,180	892	4,649	7,721	8,999
Adjustment<br>previous periods	-	-	-	-	-
Additions	-	112	278	390	2,486
Desconsolidation	(1,526)	(102)	(3,884)	(5,512)	(167)
Capitalized<br>financial costs	-	-	-	-	13
Currency<br>translation adjustment	(140)	(14)	(268)	(422)	943
Transfers	139	(139)	-	-	231
Capitalized<br>finance costs	-	-	-	-	-
Disposals	(557)	(74)	-	(631)	(4,784)
End of the period / year	96	675	775	1,546	7,721
Non-current				1,328	5,228
Current				218	2,493
Total				1,546	7,721

11.

Intangible assets

Changes in the Group’s intangible assets for the three-month period ended September 30, 2020 and for the year ended June 30, 2020 were as follows:

	Three Month ended September 30, 2020							Year ended June 30, 2020
	Goodwill	Trademarks	Licenses	Customer relations	Information systems and software	Contracts and others	Total	Total
Costs	6,075	9,066	12,153	25,548	8,520	14,386	75,748	62,905
Accumulated<br>amortization	-	(854)	(9,548)	(22,883)	(3,974)	(8,578)	(45,837)	(35,342)
Net book amount at the beginning of the period / year	6,075	8,212	2,605	2,665	4,546	5,808	29,911	27,563
Additions	-	-	-	20	284	634	938	4,853
Disposals	-	-	-	-	(79)	-	(79)	(235)
Impairment	(5,859)	(7,607)	(2,360)	(2,251)	(3,514)	(4,603)	(26,194)	(3,532)
Transfers<br>to trading properties	-	-	-	-	-	-	-	-
Assets<br>incorporated by business combination	-	-	-	-	-	-	-	61
Currency<br>translation adjustment	(91)	(585)	(186)	(196)	(329)	(388)	(1,775)	6,217
Amortization<br>charges (i)	-	(20)	(59)	(238)	(742)	(556)	(1,615)	(5,016)
Balances at the end of the period / year	125	-	-	-	166	895	1,186	29,911
Costs	125	814	8,929	22,395	4,338	9,478	46,079	75,748
Accumulated<br>amortization	-	(814)	(8,929)	(22,395)	(4,172)	(8,583)	(44,893)	(45,837)
Net book amount at the end of the period / year	125	-	-	-	166	895	1,186	29,911

(ii) As of September 30, 2020, amortization charges were recognized in the amount of Ps. 2 in "Costs" and Ps. 27 in "General and administrative expenses", in the Statement of Income (Note 21). On the other hand, Ps 1.586 has been charged to the result of discontinued operations.

12.

Right-of-use assets

The Group’s right-of-use assets as of September 30, 2020 and June 30, 2020 are the following:

	September 30, 2020	June 30, 2020
Real<br>Estate	8	4,431
Telecommunications	-	11,846
Machinery<br>and equipment	11	14
Others	602	5,088
Total Right-of-use assets	621	21,379
Non-current	621	21,379
Total	621	21,379

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

	September 30, 2020	September 30, 2019
Real<br>Estate	397	579
Telecommunications	2,293	3,397
Others	646	1,096
Total depreciation of right-of-use assets	3,336	5,072

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 September 30, 2020 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
September 30, 2020
Assets as per Statement of Financial Position
Trade<br>and other receivables (excluding the allowance for doubtful<br>accounts and other receivables)	4,152	-	-	-	4,152	3,396	7,548
Investments<br>in financial assets:
-<br>Public companies’ securities	-	302	-	177	479	-	479
-<br>Bonds	-	2,109	-	-	2,109	-	2,109
-<br>Investments in financial assets with quotation	10	329	931	26	1,296	-	1,296
Derivative<br>financial instruments:
-<br>Warrants	-	-	-	-	-	-	-
-<br>Foreign-currency future contracts	-	-	16	-	16	-	16
Restricted<br>assets (i)	8	-	-	-	8	-	8
Cash<br>and cash equivalents:
-<br>Cash at bank and on hand	4,330	-	-	-	4,330	-	4,330
-<br>Short-term investments	-	67	-	-	67	-	67
Total assets	8,500	2,807	947	203	12,457	3,396	15,853
	Financial liabilities at amortized cost	Financial liabilities at fair value through profit or<br>loss			Subtotal financial liabilities	Non-financial liabilities	Total
---	---	---	---	---	---	---	---
		Level 1	Level 2	Level 3
September 30, 2020
Liabilities as per Statement of Financial Position
Trade<br>and other payables	3,983	-	-	-	3,983	2,769	6,752
Borrowings<br>(excluding finance leases)	56,438	-	-	-	56,438	-	56,438
Derivative<br>financial instruments:
-<br>Forwards	-	-	89	-	89	-	89
Total liabilities	60,421	-	89	-	60,510	2,769	63,279

Financial assets and financial liabilities as of June 30, 2020 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, 2020
Assets as per Statements of Financial Position
Trade<br>and other receivables (excluding the allowance for doubtful<br>accounts and other receivables)	53,134	-	-	-	53,134	15,771	68,905
Investments<br>in financial assets:	-	-	-	-	-	-	-
-<br>Public companies’ securities	-	618	248	-	866	-	866
-<br>Private companies’ securities	-	-	-	3,132	3,132	-	3,132
-<br>Deposits	1,028	66	-	-	1,094	-	1,094
-<br>Bonds	-	9,940	1,555	-	11,495	-	11,495
-<br>Investments in financial assets with quotation	-	6,995	872	250	8,117	-	8,117
Derivative<br>financial instruments	-	-	-	-	-	-	-
-<br>Foreign-currency future contracts	-	-	139	-	139	-	139
-<br>Others	66	-	22	153	241	-	241
Restricted<br>assets (i)	8,698	-	-	-	8,698	-	8,698
Financial<br>assets available for sale:	-	-	-	-	-	-	-
-<br>Clal	-	3,636	-	-	3,636	-	3,636
Cash<br>and cash equivalents:	-	-	-	-	-	-	-
-<br>Cash at bank and on hand	26,562	-	-	-	26,562	-	26,562
-<br>Short term investments	67,420	3,294	-	-	70,714	-	70,714
Total assets	156,908	24,549	2,836	3,535	187,828	15,771	203,599
	Financial liabilities at amortized cost	Financial liabilities at fair value through profit or<br>loss			Subtotal financial liabilities	Non-financial liabilities	Total
---	---	---	---	---	---	---	---
		Level 1	Level 2	Level 3
June 30, 2020
Liabilities as per Statement of Financial Position
Trade<br>and other payables	26,898	-	-	-	26,898	7,380	34,278
Borrowings<br>(excluding finance leases)	404,954	-	-	-	404,954	-	404,954
Derivative<br>financial instruments:	-
-<br>Foreign-currency future contracts	-	-	149	-	149	-	149
-<br>Swaps	-	-	1,028	22	1,050	-	1,050
-<br>Others	-	-	66	-	66	-	66
Total liabilities	431,852	-	1,243	22	433,117	7,380	440,497

(i) Corresponds to security deposits and escrows.

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, 2020.

As of September 30, 2020, there have been no changes to the economic or business circumstances affecting the fair value of the financial assets and liabilities of the Group.

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
Promissory<br>note	Theoretical<br>price	Acquisition<br>agreement.	Level<br>2	-
Investments<br>in financial assets - Other private companies’<br>securities	Cash<br>flow / NAV - Theoretical price	Projected revenue<br>discounted at the discount rate /<br><br><br>The value is<br>calculated in accordance with shares in the equity funds on the<br>basis of their Financial Statements, based on fair value or<br>investments assessments.	Level<br>3	1 - 3.5
Investments<br>in financial assets - Others	Discounted<br>cash flow - Theoretical price	Projected revenue<br>discounted at the discount rate /<br><br><br>The value is<br>calculated in accordance with shares in the equity funds on the<br>basis of their Financial Statements, based on fair value or<br>investment assessments.	Level<br>3	1 - 3.5
Derivative<br>financial instruments – Forwards	Theoretical<br>price	Underlying<br>asset price and volatility	Level 2 and<br>3	-

The following table presents the changes in Level 3 instruments as of September 30, 2020 and June 30, 2020:

	Derivative financial instruments - Forwards	Investments in financial assets - Private companies'<br>securities	nvestments in financial assets - Others	Investments in financial assets - Public companies	Derivative financial instruments	Total as of September 30, 2020	Total as of June 30, 2020
Balances at beginning of the period / year	(22)	3,132	250	-	153	3,513	4,460
Additions<br>and acquisitions	-	-	-	-	-	-	38
Transfer<br>to level 1	-	-	-	247	-	247	378
Currency<br>translation adjustment	-	-	-	-	-	-	883
Desconsolidation	22	(3,132)	(219)	-	(153)	(3,482)	-
Write<br>off	-	-	-	-	-	-	(1,709)
Gain<br>/ (loss) for the period / year (i)	-	-	(5)	(70)	-	(75)	(537)
Balances at the end of the period / year	-	-	26	177	-	203	3,513

(i)

Included within “Financial results, net” in the Statements of Income.

14.

Trade and other receivables

Group’s trade and other receivables as of September 30, 2020 and June 30, 2020 are as follows:

	September 30, 2020	June 30, 2020
Sale,<br>leases and services receivables	3,095	41,397
Less:<br>Allowance for doubtful accounts	(669)	(4,021)
Total trade receivables	2,426	37,376
Prepaid<br>expenses	530	14,529
Borrowings,<br>deposits and others	1,470	10,797
Advances<br>to suppliers	886	1,086
Tax<br>receivables	763	866
Others	804	230
Total other receivables	4,453	27,508
Total trade and other receivables	6,879	64,884
Non-current	1,881	24,898
Current	4,998	39,986
Total	6,879	64,884

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

	September 30, 2020	June 30, 2020
Beginning of the period / year	4,021	2,856
Adjustments<br>previous periods (IFRS 9)	-	-
Additions	355	1,107
Recovery	(72)	(117)
Currency<br>translation adjustment	(238)	1,145
Deconsolidation	(3,328)	(22)
Receivables<br>written off during the period/year as uncollectable	(20)	(772)
Transfer<br>to assets held for sale	-	(22)
Incorporation<br>by business combination	-	19
Inflation<br>adjustment	(49)	(173)
End of the period / year	669	4,021

The creation and release of the allowance for doubtful accounts have been included in “Selling expenses” in the Statement of Income (Note 21).

15.

Cash flow information

Following is a detailed description of cash flows generated by the Group’s operations for the three month periods ended September 30, 2020 and 2019:

	Note	Three Month ended September 30, 2020	Three Month ended September 30, 2019
Profit<br>for the period		8,340	15,017
Profit<br>/ (Loss) for the period from discontinued operations		6,396	(13,887)
Adjustments<br>for:
Income<br>tax	19	7,958	2,505
Amortization<br>and depreciation	21	122	119
Loss<br>from disposal of property, plant and equipment		-	-
Net<br>gain from fair value adjustment of investment<br>properties		(24,089)	(12,349)
Financial<br>results, net		(87)	12,670
Provisions<br>and allowances		70	69
Share<br>of profit of associates and joint ventures	7	(147)	(737)
Changes in operating assets and liabilities:
Decrease<br>in inventories		5	1
Decrease<br>/ (increase) in trading properties		256	(52)
Decrease<br>in restricted assets		1,157	-
(Increase)<br>/ decrease in trade and other receivables		(643)	392
Increase<br>/ (decrease) in trade and other payables		1,885	(476)
Decrease<br>in salaries and social security liabilities		(73)	(160)
Decrease<br>in provisions		(12)	(186)
Net cash generated by continuing operating activities before income<br>tax paid		1,138	2,926
Net<br>cash generated by discontinued operating activities before income<br>tax paid		2,405	7,897
Net cash generated by operating activities before income tax<br>paid		3,543	10,823

The following table presents a detail of significant non-cash transactions occurred in the three-month periods ended September 30, 2020 and 2019:

	Three Month ended September 30, 2020	Three Month ended September 30, 2019
Decrease<br>of associates and joint ventures through an increase of trade and<br>other receivables	-	26
Increase<br>in rights of use through increased lease liabilities	24	-
Increase<br>of investment properties through a decrease of financial<br>assets	-	299
Increase<br>of trade and other receivables through a decrease of associates and<br>joint ventures	11	-
Increase<br>of property, plant and equipment through an increase of trade and<br>other payables	-	618
Increase<br>of intangible assets through an increase of trade and other<br>payables	-	36
Increase<br>of investment properties through an increase of<br>borrowings	81	-
Increase<br>of trading properties through an increase of<br>borrowings	12	5
Distribution<br>of dividends to non-controlling interest pending<br>payment	-	18
Decrease<br>of interest in associates and joint ventures	30.980	-
Increase<br>in investment properties through an increase in trade and other<br>payables	-	499
Increase<br>of right-of-use assets through a decrease in property, plant and<br>equipment	-	23
Decrease<br>of investments in associates and joint ventures through a<br>reclassification to assets held for sale	-	4.434

16.

Trade and other payables

Group’s trade and other payables as of September 30, 2020 and June 30, 2020 were as follows:

	September 30, 2020	June 30, 2020
Trade<br>payables	800	20,151
Advances<br>from sales, leases and services	2,640	2,850
Construction<br>obligations	-	438
Accrued<br>invoices	396	473
Deferred<br>income	-	153
Total trade payables	3,836	24,065
Dividends<br>payable to non-controlling interest	-	241
Taxes<br>payable	215	171
Construction<br>provisions	-	-
Other<br>payables	2,701	9,801
Total other payables	2,916	10,213
Total trade and other payables	6,752	34,278
Non-current	1,745	2,335
Current	5,007	31,943
Total	6,752	34,278

17.

Borrowings

The breakdown of the Group’s borrowings as of September 30, 2020 and June 30, 2020 was as follows:

	Total as of September 30, 2020 (ii)	Total as of June 30, 2020 (ii)	Fair value as of September 30, 2020	Fair value as of June 30, 2020
NCN	44,538	340,026	185,441	252,018
Bank<br>loans	3,629	60,580	39,103	45,329
Bank<br>overdrafts	7,110	2,614	7,110	2,428
Other<br>borrowings (i)	1,161	1,734	1,161	1,611
Total borrowings	56,438	404,954	232,815	301,386
Non-current	31,967	320,616
Current	24,471	84,338
	56,438	404,954

Issuance of IRSA Non-convertible Notes

On July 21, 2020, subsequently to the closing of the fiscal year, the Company issued USD 38.4 million Non-convertible Notes in the local market through the following instruments:

●

Ps. 335.2 (equivalent to USD 4.7 million) Series VI NCNs denominated and payable in Argentine pesos at a variable rate (Private Badlar)

4.0%, with interest accruing on a quarterly basis. The principal amount is repayable in two installments: the first one -equal to 30% of the par value of the notes- payable on the date that is 9 (nine) months after the Issue and Settlement Date and the second installment -equal to 70% of the par value of the notes- payable on the relevant due date, i.e. July 21, 2021. Notes were issued at 100% of their par value.

●

Payment of non-convertible notes

On July 20, 2020, the Company paid the twentieth interest installment and the principal installment of the US$ 75 Series II Non-convertible Notes issued on July 20, 2010.

On August 6, 2020, the Company paid the second interest installment and the principal installment of the US$ 47 Series II Non-convertible Notes issued on August 6, 2019.

Payment of IRSA CP’s Series IV Non-convertible Notes

On September 14, 2020, the aggregate principal amount of the Series IV Non-convertible Notes in the amount of Ps. 10,381 (US$ 140 million) and interest accrued as of such date in the amount of Ps. 134 (US$ 1.8 million) were paid.

18.

Provisions

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

	Legal claims (i)	Investments in associates and joint ventures (ii)	Site dismantling and remediation	Other provisions	Total	Total
Beginning of period / year	2,686	16	482	2,740	5,924	14,980
Additions	7	-	20	(79)	(52)	513
Share<br>of loss of associates	-	1	(1)	(1)	(1)	(8,032)
Incorporated<br>by business combination	-	-	-	-	-	60
Recovery	(1)	-	-	-	(1)	(1,132)
Used<br>during the period / year	(44)	-	-	(20)	(64)	(896)
Inflation<br>adjustment	(17)	-	-	-	(17)	(73)
Desconsolidation	(2,217)	-	(468)	(2,400)	(5,085)	-
Currency<br>translation adjustment	(178)	-	(33)	(240)	(451)	504
End of period / year	236	17	-	-	253	5,924
Non-current					145	3,297
Current					108	2,627
Total					253	5,924

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

(ii) Corresponds to investments in New Lipstick and Puerto Retiro, companies that have negative equity. The increase and recovery is included in "Share of profit of associates and joint ventures ".

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:

	September 30, 2020	September 30, 2019
Current<br>income tax	(5)	(194)
Deferred<br>income tax	(7,953)	(2,311)
Income tax from continuing operations	(7,958)	(2,505)

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 three-month periods ended September 30, 2020 and 2019:

	Three Month ended September 30, 2020	Three months ended September 30, 2019
Profit from continuing operations at tax rate applicable in the<br>respective countries (*)	(6,808)	(1,458)
Permanent differences:
Share<br>of profit of associates and joint ventures	(44)	190
Unrecognized<br>tax loss carryforwards (i)	(2,415)	(808)
Inflation<br>adjustment permanent difference	446	(1,013)
Tax<br>rate differential	1,636	662
Non-taxable<br>profit, non-deductible expenses and others	222	1,113
Fiscal<br>transparency	-	149
Tax<br>inflation adjustment	(995)	(1,340)
Income tax from continuing operations	(7,958)	(2,505)

(i)

Corresponds principally to Operations Center in Argentina.

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

	September 30, 2020	June 30, 2020
Beginning of period / year	(46,727)	(56,001)
Use<br>of tax los carryforwards	-	-
Currency<br>translation adjustment	1,240	1,694
Incorporated<br>by business combination	-	(933)
Deconsolidation	11,248	15,370
Charged<br>to the revaluation surplus reserve	-	386
Revaluation<br>surplus reserve	-	(98)
Deferred<br>income tax charge	(7,734)	(7,145)
End of period / year	(41,973)	(46,727)
Deferred<br>income tax assets	148	681
Deferred<br>income tax liabilities	(42,121)	(47,408)
Deferred income tax liabilities, net	(41,973)	(46,727)

20.

Revenues

	Three months ended September 30, 2020	Three months ended September 30, 2019
Rental<br>and services income	1,304	3,704
Sales<br>of trading properties and developments	299	80
Revenue<br>from hotels operation and tourism services	6	703
Total Group’s revenues	1,609	4,487

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 September 30, 2020	Total as of September 30, 2019
Cost<br>of sale of goods and services	294	-	-	294	72
Salaries,<br>social security costs and other personnel expenses	368	165	23	556	932
Depreciation<br>and amortization	72	50	-	122	119
Fees<br>and payments for services	11	59	134	204	150
Maintenance,<br>security, cleaning, repairs and others	242	46	-	288	583
Advertising<br>and other selling expenses	22	-	2	24	170
Taxes,<br>rates and contributions	59	16	238	313	323
Interconnection<br>and roaming expenses	-	-	-	-	-
Fees<br>to other operators	-	-	-	-	-
Director´s<br>fees	-	285	-	285	128
Leases<br>and service charges	25	9	6	40	53
Allowance<br>for doubtful accounts, net	-	-	45	45	39
Other<br>expenses	4	14	2	20	69
Total as of September 30, 2020	1,097	644	450	2,191
Total as of September 30, 2019	1,682	661	295		2,638

22.

Cost of goods sold and services provided

	Total as of September 30, 2020	Total as of September 30, 2019
Inventories<br>at the beginning of the period (*)	12,762	22,274
Adjustments<br>previous periods	-	(8,126)
Purchases<br>and expenses (**)	7,700	41,852
Capitalized<br>finance costs	-	99
Currency<br>translation adjustment	8,262	(369)
Transfers	-	(810)
Disposals	(631)	(1,231)
Deconsolidation	(3,377)	-
Inventories<br>at the end of the period (*)	(1,611)	(11,065)
Total costs	23,105	42,624

The following table presents the composition of the Group’s inventories as of September 30, 2020 and June 30, 2020:

	Total as of September 30, 2020	Total as of September 30, 2019
Real<br>estate	1,546	7,721
Others	65	-
Telecommunications	-	5,041
Total<br>inventories at the end of the period (*)	1,611	12,762

(*) Inventories include trading properties and inventories.

23.

Other operating results, net

	Three months ended September 30, 2020	Three months ended September 30, 2019
Gain<br>from disposal of subsidiary and associates (1)	-	(8)
Donations	(19)	(38)
Lawsuits<br>and other contingencies	(25)	(30)
Operating<br>interest expense	13	26
Others<br>(2)	13	(6)
Total other operating results, net	(18)	(56)

24.

Financial results, net

	Three months ended September 30, 2020	Three months ended September 30, 2019
Finance<br>income:
-<br>Interest income	17	83
-<br>Dividend income	12	-
-<br>Other finance income	27	-
Total finance income	56	83
Finance<br>costs:
-<br>Interest expenses	(1,485)	(1,661)
-<br>Loss on debt swap	(5)	(3)
-<br>Other finance costs	(196)	(164)
Subtotal finance costs	(1,686)	(1,828)
Capitalized<br>finance costs	93	46
Total finance costs	(1,593)	(1,782)
Other<br>financial results:
-<br>Fair value gain of financial assets and liabilities at fair value<br>through profit or loss, net	800	(456)
-<br>Exchange differences, net	(8)	(8,929)
-<br>Gain from repurchase of negotiable obligations	20	8
-<br>Gain from derivative financial instruments, net	(188)	225
Total other financial results	624	(9,152)
- Inflation<br>adjustment	(29)	(393)
Total financial results, net	(942)	(11,244)

25.

Related party transactions

The following is a summary of the balances with related parties as of September 30, 2020 and June 30, 2019:

Item	September 30, 2020	June 30, 2020
Trade<br>and other receivables	387	1,416
Investments<br>in financial assets	2	1,702
Borrowings	(29)	(169)
Trade<br>and other payables	(70)	(410)
Total	290	2,539
Related party	September 30, 2020	June 30, 2020	Description of transaction	Item
Manibil<br>S.A.	-	-	Contributions<br>in advance	Trade<br>and other receivable
New<br>Lipstick LLC	-	-	Loans<br>granted	Trade<br>and other receivable
	-	(83)	Loans<br>obtained	Borrowings
	18	17	Reimbursement<br>of expenses receivable	Trade<br>and other receivable
Condor	222	290	Public<br>companies securities	Trade<br>and other receivable
IRSA<br>Real Estate Strategies LP	127	125	Reimbursement<br>of expenses receivable	Trade<br>and other receivable
Other<br>associates and joint ventures	-	131	Reimbursement<br>of expenses receivable	Trade<br>and other receivable
	-	-	Leases<br>and/or rights of use payable	Trade<br>and other payables
	(29)	(29)	Loans<br>obtained	Borrowings
	-	9	Management<br>fees	Trade<br>and other receivable
	-	90	Leases<br>and/or rights of use receivable	Trade<br>and other receivable
	-	219	Dividends	Trade<br>and other receivable
	(1)	(1)	Reimbursement<br>of expenses receivable	Trade<br>and other payables
	-	-	Reimbursement<br>of expenses payable	Trade<br>and other receivable
Total associates and joint ventures	337	1,276
Cresud	(4)	(3)	Reimbursement<br>of expenses receivable	Trade<br>and other payables
	(48)	(264)	Corporate<br>services receivable	Trade<br>and other payables
	2	1,702	NCN	Investment<br>in financial assets
	4	4	Leases<br>and/or rights of use receivable	Trade<br>and other payables
	(1)	(1)	Management<br>fee	Trade<br>and other payables
	-	(3)	Share<br>based payments	Trade<br>and other payables
Total parent company	(47)	1,435
Directors	(16)	(137)	Fees<br>for services received	Trade<br>and other payables
	-	4	Advances	Trade<br>and other receivable
Others<br>(1)	-	-	Leases<br>and/or rights of use receivable	Trade<br>and other receivable
	-	(57)	Loans<br>granted	Trade<br>and other receivable
	-	(1)	Reimbursement<br>of expenses payable	Trade<br>and other payables
	16	19	Reimbursement<br>of expenses receivable	Trade<br>and other receivable
Total directors and others	-	(172)
	290	2,539

(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.

The following is a summary of the results with related parties for the three-month periods ended September 30, 2020 and 2019:

Related party	Three Month ended September 30, 2020	Three months ended September 30, 2019	Description of transaction
BACS	28	-	Leases<br>and/or rights of use
Manibil	-	-	Corporate<br>services
Tarshop	-	-	Leases<br>and/or rights of use
	-	-	Commissions
La<br>Rural S.A.	-	-	Leases<br>and/or rights of use
Condor	-	-	Financial<br>operations
Other<br>associates anf joint ventures	-	-	Financial<br>operations
Otras<br>asociadas y negocios conjuntos	9	41	Leases<br>and/or rights of use
	-	(3)	Corporate<br>services
Otras<br>asociadas y negocios conjuntos	(9)	-	Honorarios<br>y remuneraciones
Total associates and joint ventures	28	38
Cresud	4	4	Leases<br>and/or rights of use
	(204)	(155)	Corporate<br>services
	299	96	Financial<br>operations
Total parent company	99	(55)
Directors	(515)	(145)	Fees<br>and remunerations
	-	41	Leases<br>and/or rights of use
	-	-	Financial<br>operations
	-	(14)	Donationd
	-	(11)	Corporate<br>services
	(20)	-	Fees<br>and remuneration
Total others	(535)	(129)
Total at the end of the period	(408)	(146)

(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 three-month periods ended September 30, 2020 and 2019:

Related party	Three Month ended September 30, 2020	Three months ended September 30, 2019	Description of the operation
Condor	-	36	Dividends<br>received
Total dividends received	-	36
Quality	8	16	Capital<br>contributions
Manibil	-	94	Capital<br>contributions
Total capital contributions	8	110
Pareto	53	-	Purchase<br>and exchange of shares
Total other transactions	53	-

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 -<br>Property, plant and equipment	Note 8 Investment<br>properties and Note 9 Property, plant and equipment
Exhibit B -<br>Intangible assets	Note 11 Intangible<br>assets
Exhibit C -<br>Investment in associates	Note 7 Investments<br>in associates and joint ventures
Exhibit D - Other<br>investments	Note 13 Financial<br>instruments by category
Exhibit E –<br>Provisions	Note 18<br>Provisions
Exhibit F - Cost of<br>sales and services provided	Note 22 Cost of<br>goods sold and services provided
Exhibit G - Foreign<br>currency assets and liabilities	Note 27 Foreign<br>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 09.30.20	Total as of 06.30.20
Assets
Trade and other receivables
US<br>Dollar	11	75.980	870	3,246
Euros	0	88.965	11	948
Receivables with related parties:
US<br>Dollar	0	76.180	18	335
Total trade and other receivables			899	4,529
Investments in financial assets
US<br>Dollar	0	75.980	10	3,879
Pounds	3	22.223	69	84
Investments with related parties:
US<br>Dollar	16	76.180	1,212	1,305
Total investments in financial assets			1,291	5,268
Derivative financial instruments
US<br>Dollar	-	75.980	-	-
Total Derivative financial instruments			-	-
Cash and cash equivalents
US<br>Dollar	22	75.980	1,689	14,015
Euros	1	88.965	1	1,665
Total cash and cash equivalents			1,690	15,680
Total Assets			3,880	25,477
Liabilities
Trade and other payables
US<br>Dollar	181	76.180	13,822	14,201
Euros	0	98.490	-	328
Payables to related parties:
US<br>Dollar	-	76.180	-	-
Total Trade and other payables			13,822	14,529
Borrowings
US<br>Dollar	241	76.180	18,385	65,590
Borrowings with related parties
US<br>Dollar	1	76.180	67	379
Total Borrowings			18,452	65,969
Derivative financial instruments
US<br>Dollar	0	76.180	1	102
Total derivative financial instruments			1	102
Lease liabilities
US<br>Dollar	0	76.180	2	-
Total lease liabilities			2	-
Total Liabilities			32,277	80,600

(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 September 30, 2020 according to Banco de la Nación Argentina.

28.

Groups of assets and liabilities held for sale

As mentioned in Note 4.C. to the Annual Financial Statements, the Group had as of June 30, 2020

has certain assets and liabilities classified as held for sale. The following table presents the main ones:

	September 30, 2020	June 30, 2020
Property,<br>plant and equipment	-	38,453
Intangible<br>assets	-	1,467
Investments<br>in associates	-	241
Deferred<br>income tax assets	-	876
Investment<br>properties	-	-
Income<br>tax credits	-	-
Trade<br>and other receivables	-	1,991
Cash<br>and cash equivalents	-	1,840
Total assets held-for-sale	-	44,868
Trade<br>and other payables	-	10,686
Salaries<br>and social security liabilities	-	417
Employee<br>benefits	-	416
Deferred<br>income tax liabilities	-	2,103
Borrowings	-	10,290
Total liabilities held-for-sale	-	23,912
Total net assets held-for-sale	-	20,956

29.

Results from discontinued operations

The results of the discontinued operations include the IDBD / DIC operations which were deconsolidated in the current period (see Note 4.E) and the results of the comparative periods have been reclassified.

	Three months ended September 30, 2020	Three months ended September 30, 2019
Revenues	27,124	27,100
Costs	(22,008)	(18,143)
Gross profit	5,116	8,957
Net<br>loss from fair value adjustment of investment<br>properties	(20)	-
General<br>and administrative expenses	(3,122)	(2,569)
Selling<br>expenses	(2,974)	(3,185)
Other<br>operating results, net	(1,867)	19,881
(Loss) / profit from operations	(2,867)	23,084
Share<br>of profit / (loss) of associates and joint ventures	515	(528)
(Loss) / profit before financial results and income<br>tax	(2,352)	22,556
Finance<br>income	377	317
Finance<br>cost	(4,946)	(7,321)
Other<br>financial results	327	(1,624)
Financial results, net	(4,242)	(8,628)
(Loss) / profit before income tax	(6,594)	13,928
Income<br>tax	198	(41)
(Loss) / profit from discontinued operations	(6,396)	13,887
(Loss) / profit for the period from discontinued operations<br>attributable to:
Equity<br>holders of the parent	(5,064)	4,271
Non-controlling<br>interest	(1,332)	9,616
(Loss) / profit per share from discontinued operations attributable<br>to equity holders of the parent:
Basic	(8.81)	7.42
Diluted	(8.81)	7.36

(1)

As of September 30, 2020 corresponds mainly to the loss of control of IDBD; As of September 30, 2019, it mainly corresponds to the result from the loss of control of Gav-Yam and the fair value measurement of the remaining investment.

30.

Other relevant events of the period

Economic context in which the company operates

Its operating income may be affected by fluctuations in the inflation index and the argentine peso exchange rate against other currencies, mainly the dollar, variations in interest rates which have an impact on the cost of capital, changes in government policies, capital control and other political or economic developments both locally and internationally.

In December 2019, a new coronavirus strain (SARS-COV-2), causing a 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 actions intended to prevent the spread of the virus, including, travel bans, border shutdowns, closing of non-essential businesses, instructions to residents to practice social distancing and implementation of lockdowns, among others. The ongoing pandemic and these extraordinary governmental actions are affecting the worldwide economy and have rendered global financial markets highly volatile.

The first case of COVID-19 in Argentina was reported on March 3, 2020 and until November 8, 2020, more than 1,200,000 cases of infections had been confirmed in Argentina. As a result, the Argentine the National Government implemented a series of health measures of social, preventive and mandatory isolation at the national level that began on March 19, 2020 and extended several times, most recently until November 8, 2020 inclusive in the Metropolitan Area of Buenos Aires although it has been extended in some cities in the interior of the country. Among this measures, that affected the local economy, the following stand out: the extension of the public emergency in health matters, the total closure of borders, the suspension of international and domestic flights, the suspension of medium and long-distance land transport, the suspension of artistic and sports shows, closure of businesses not considered essential, including shopping malls and hotels.

At the local environment, the following circumstances may be noted:

●

In August 2020, an indicador called “Monthly Estimator of Economic Activity” (“EMAE”) reported by the National Institute of Statistics and Censuses (“INDEC”), registered a variation of (11.6%) compared to the same month of 2019, and from 1,1% compared to the previous month.

●

The market expectations survey prepared by Central Bank in October 2020, called the Market Expectations Survey (“REM” in Spanish), estimates a retail inflation of 35.8% for 2020. The analysts who confirm the REM forecast a variation in real GDP for 2020 of (11.6)%. In turn, they foresee that in 2021 economic activity will rebound in activity, reaching an economic growth of 4.5%.

●

The interannual inflation as of September 30, 2020 reached 36.6%.

●

In the period from September 2019 to September 2020, the argentine peso depreciated 32.3% compared to the US dollar at the average wholesale exchange rate quoted byBanco de la Nación Argentina. Given the exchange restrictions in force since August 2019, as of September 30, 2020 the exchange gap between the official peso/US dollar exchange rate and the peso/US dollar exchange rate offered in the black market is almost 82%. This has an impact on the level of economic activity and detrimentally affects the reserves of the of the Argentine Central Bank. In addition, the current foreign exchange restrictions or those that may be imposed in the future may impair the Company’s ability to access the Sole Free FX Market (Mercado Único Libre de Cambio or MULC) to purchase the currency required to meet its financial obligations.

On September 15, 2020, the Argentine Central Bank issued Communication “A” 7106 which establishes, among other things, that entities with principal maturities falling due between October 15, 2020 and March 31, 2021 related to the issuance of foreign-currency denominated publicly-registered debt securities in Argentina by private sector clients or by the entities themselves, must submit to the Argentine Central Bank a refinancing plan based on the following criteria: (a) the net amount for which access to the foreign exchange is granted within the original terms must not exceed 40% of the principal amount due, and (b) the remaining principal amount must have been refinanced through new foreign debt with an average life of at least 2 years. It is worth mentioning that for the maturities to be registered from the effective date of the communication (September 16, 2020) and until 12.31.2020, the refinancing plan must be submitted prior to 09.30.2020; and the submission deadline for the remaining maturities -between January 1, 2021 and March 31, 2021, must be submitted with a term of at least 30 calendar days before the maturity of the capital to be refinanced.

COVID-19 PANDEMIC

As described above, the COVID-19 is having an adverse impact on both the global and the Argentine economy and the Company’s business.

Below follows a description of the expected effects of the COVID-19 pandemic on the Company as of the date of these financial statements:

●

Because of the social, preventive and obligatory lockdown, shopping malls throughout the country were closed since March 20, 2020, exclusively remaining operational those stores dedicated to activities considered essential such as pharmacies, supermarkets and banks. The reopening of shopping malls in the interior of the country began during the months of May, June, and July. In August 2020, the Arcos District, an open-air premium outlet in the city of Buenos Aires, was opened and in October 2020, the Group’s shopping malls in City and Greater Buenos Aires were reopened. As of October 31, 2020, all the Group’s shopping malls were open and operating under strict protocols. However the uncertainty posed by this situation may cause the closing of stores that have already opened, as happened in some shopping malls in the interior of the country in previous months due to the increase in cases in those regions.

●

As a result of the shopping mall closings, the Company has decided to differ the invoicing and collection of the Monthly Guaranteed Amount (Valor Mensual Asegurado or V.M.A.) until September 30, 2020, with some exceptions, and not to collect the collective promotion fund during such period in an attempt to prioritize its long-term relationship with the lessees. Additionally, an increase in the delinquency rate of some lessees has been noticedAs a result of the above, the impact on shopping malls is a 82.4% decrease in income from rentals and services during the first quarter of fiscal year 2021 compared to the same period of last fiscal year, and a 12.6% increase compared to the immediately preceding quarter. Additionally, the charge for bad debts in the first quarter of fiscal year 2021 is ARS 40 million and ARS 37 million in the same period of previous fiscal year.

●

In relation rental of offices, although most of the tenants are working in the home office mode, they are operational with strict safety and hygiene protocols. To date, we have not evidenced a deterioration in collections.

●

La Rural, the Buenos Aires and Punta del Este Convention Centers and the DIRECTV Arena stadium, establishments that the Group owns directly or indirectly, have also been closed since March 20. All planned congresses were suspended, most of the fairs and conventions have been postponed, while the shows scheduled at the DIRECTV Arena stadium were mostly cancelled. The reopening date of these establishments is uncertain, as well as the future agenda of fairs, conventions and shows.

●

The Libertador hotel in the City of Buenos Aires and Llao Llao in the province of Río Negro have temporarily closed since the mandatory lockdown decreed in March 2020, while the Intercontinental Hotel in the City of Buenos Aires has worked only under a contingency and emergency plan. As a result of the above, the impact on these financial statements is a 99% decrease in revenues compared to same period of previous fiscal year After the end of first quarter of fiscal year 2021, on November 16, the Llao Llao Hotel opened its doors operating under strict protocols. It is expected that the hotels in the city of Buenos Aires will gradually begin to restart their activity in the coming months.

In financial matters, in May and July 2020, IRSA has issued Notes in the local market for an approximate amount of USD 105.4 million. With those proceeds, the Company canceled its Series II Notes for a nominal value of USD 71.4 million maturing on July 20, 2020 and Series II Notes for a nominal value of CLP 31,502.6 million (equivalent to approximately USD 41 million) maturing on August 6, 2020. On the other hand, IRSA CP canceled its Series IV Notes on September 14 for a nominal value of USD 140 million.

The maturity of IRSA Series I notes for a nominal value of USD 181.5 million falls within the period contemplated by communication “A” 7106 of the BCRA mentioned above. In this sense, IRSA presented a proposal to the BCRA in the corresponding terms and carried out an exchange operation through the payment in cash of USD 72.6 million and the issuance of two new series of Notes: Series VIII and Series IX for a nominal value of USD 31.7 million and USD 80.7 million (including USD 6.5 million of new subscriptions). The exchange offer was accepted by 98.3%

In the next 12 months, IRSA faces the maturity of its Series III Notes for a nominal value of ARS 354 million (equivalent to USD 4.6 million) maturing on February 21, 2021, Series IV Notes for a nominal value of USD 51.4 million maturing on May 21, 2021, Series VI Notes for a nominal value of ARS 335 million (equivalent to USD 4.4 million) maturing on July 21, 2021, bank overdrafts for an amount equivalent to USD 22.0 million and other banking debt for USD 11.8 million. For its part, IRSA CP has maturities of banking debt for the approximate sum of USD 72.7 million.

It is important to mention that IRSA has approved with IRSA CP a credit line for up to USD 180 million over 3 years, of which as of September 30, 2020 IRSA used approximately USD 104.5 million, leaving the balance available. Additionally, at the Annual Shareholders Meeting, held on October 26, 2020, IRSA CP approved the distribution of a cash dividend of ARS 9,700 million that will be paid on November 25. As of September 30, IRSA owned an 80.65% stake in IRSA CP.

The final extent of the Coronavirus outbreak and its impact on the country's economy is unknown and difficult to fully predict. However, although it has produced significant short-term effects, they are not expected to affect business continuity and the Company’s ability to meet financial commitments for the next twelve months.

The Company is closely monitoring the situation and taking all necessary measures to preserve human life and the Group's businesses.

31.

Subsequent events

Investors Assembly

Exchange of debentures

On November 12, 2020, the company carried out an exchange operation of its Series I Notes, for a nominal value of USD 181.5 million

Nominal Value of Existing Notes presented and accepted for the Exchange (for both Series): approximately USD 178.5 which represents 98.31% acceptance, through the participation of 6,571 orders.

●

Series VIII: Face Value of Existing Notes presented and accepted for the Exchange: approximately USD 104.3 million.

●

Nominal Value to be Issued: approximately USD 31.7 million.

●

Issuance Price: 100% nominal value.

●

Maturity Date: It will be November 12, 2023.

●

■

The remaining amount until completing 1 USD for each 1 USD of existing notes presented to the Exchange, in notes Series VIII.

●

Annual Nominal Fixed Interest Rate: 10.00%.

●

Interest Payment Dates: Interest will be paid quarterly for the expired period as of the issue and settlement date.

●

Payment Address: Payment will be made to an account at Argentine Securities Commission in the Autonomous City of Buenos Aires

●

Series IX: Face Value of Existing Notes presented and accepted for the Exchange: approximately USD 74.2 million.

●

Nominal Value to be Issued (together with the Face Value to be issued as a result of the cash subscription): approximately USD 80.7 million.

●

Issuance Price: 100% nominal value.

●

Maturity Date: It will be March 1, 2023.

●

Annual Nominal Fixed Interest Rate: 10.00%.

●

Amortization: The capital of the Series IX Notes will be amortized in one installment on the maturity date.

●

Interest Payment Dates: Interest will be paid quarterly for the expired period from the issuance and settlement date.

●

Additionally, pursuant to the implementation of the Proposed Essential Modifications, the following terms and conditions of the Existing Notes are modified and replaced:

■

Expiration Date: It will be March 1, 2023.

■

Interest Payment Dates: will be the same dates reported for Class IX in the Notice of Results.

●

Boston Tower Office Floors Sale

On November 5, 2020, IRSA Commercial Properties sold and transferred 4 additional floors for a gross rental area of approximately 3,892 sqm and 15 garage units located in the building. The transaction price was approximately Ps. 1,812 (USD 22.9 million).

Finally, on November 12, 2020, the Company sold and transferred the last 3 floors with a rental area of 3,266 m2, a retail store of 228 m2 and 15 parking spaces for a total price of approximately Ps. 1,521 (USD 19.1 million)

Loan to related party

irsa-ex994

Schedule I

The following is a summary of the Group’s investment properties as of June 30, 2020 prepared in accordance with SEC Regulation S-X 12-28:

		Initial costs		Subsequent costs	Costs at end of the year
Name	Encumbrances	Plot of land	Buildings, facilities and improvements	Improvements / Additions / Disposals / Transfers	Plot of land	Buildings, facilities and improvements	Total	Capitalized costs, net	Fair value adjustments	Fair Value at the end of the year	Date of construction	Date of acquisition
Rental properties
Operations Center in Argentina
Abasto<br>Shopping	-	206	5,338	260	206	5,598	5,804	3	1,524	7,331	Nov-98	Jul-94
Alto<br>Palermo Shopping	-	183	8,604	551	183	9,155	9,338	5	-466	8,877	Oct-90	Nov-97
Alto<br>Avellaneda	-	365	3,518	834	365	4,352	4,717	9	279	5,005	Oct-95	Dec-1997
Alcorta<br>Shopping	-	220	2,471	720	220	3,191	3,411	1	1,828	5,240	Jun-92	Jun-97
Alto<br>Noa	-	8	928	173	8	1,101	1,109	-	137	1,246	Sep-94	Mar-95
Patio<br>Bullrich	-	177	3,250	339	177	3,589	3,766	1	-1,253	2,514	Sep-88	Oct-98
Alto<br>Rosario	-	794	391	962	794	1,353	2,147	5	2,270	4,422	Nov-04	Nov-04
Mendoza<br>Plaza	-	222	1,579	1,029	222	2,608	2,830	12	-757	2,085	Jun-94	Dec-1994
Dot<br>Baires Shopping	-	677	493	4,724	677	5,217	5,894	6	-260	5,640	May-09	Nov-06
Córdoba<br>Shopping	Antichresis	81	1,449	271	81	1,720	1,801	-	-438	1,363	Mar-90	Dec-2006
Distrito<br>Arcos	-	-	-	2,270	-	2,270	2,270	-	-234	2,036	-	Nov-09
Alto<br>Comahue	-	55	156	2,557	55	2,713	2,768	-	-1,408	1,360	-	May-06
Patio<br>Olmos	-	167	311	1	167	312	479	1	488	968	May-95	Sep-07
Soleil<br>Premium Outlet	-	179	601	484	179	1,085	1,264	1	732	1,997	-	Jul-10
Dot<br>building	-	153	50	2,030	153	2,080	2,233	11	2,305	4,549	Sep-10	Nov-06
Bouchard<br>710	-	1,387	741	88	1,387	829	2,216	3	4,583	6,802	-	Jun-05
Bouchard<br>551	-	80	47	64	80	111	191	-	143	334	-	Mar-07
Intercontinental<br>Plaza	-	42	589	3	42	592	634	1	434	1,069	Jun-96	Nov-97
BankBoston<br>Tower	-	1,282	1,033	4	1,282	1,037	2,319	3	4,828	7,150	-	Aug-2007
República<br>building	-	1,708	1,377	8	1,708	1,385	3,093	1	6,562	9,656	-	Apr-2008
La<br>Adela	-	1,251	-	-	1,251	-	1,251	-	221	1,472	-	Jul-14
Philips<br>Building	-	-	1,453	1	-	1,454	1,454	-	1,418	2,872	-	Jun-17
Zetta<br>Building	-	462	-	3,579	462	3,579	4,041	128	9,109	13,278	-	Dec<br>-14
Catalinas<br>Building	-	1,453	-	4,143	1,453	4,143	5,596	255	8,730	14,581	-	May<br>-10
Others	-	252	890	414	252	1,304	1,556	-	3,310	4,866	n/a	n/a

Schedule I (Continued)

		Initial costs		Subsequent costs	Costs at end of the year
Name	Encumbrances	Plot of land	Buildings, facilities and improvements	Improvements / Additions / Disposals / Transfers	Plot of land	Buildings, facilities and improvements	Total	Capitalized costs, net	Fair value adjustments	Fair Value at the end of the year	Date of construction	Date of acquisition
Operations Center in Israel
Tivoli	-	360	4,502	2,896	360	7,398	7,758	-	7,855	15,613	Apr-11	Oct-15
HSBC	Mortgage	13,771	5,113	655	13,771	5,768	19,539	-	49,176	68,715	1927-1984	Oct-15
Others		2,843	6,441	690	2,843	7,131	9,974	-	-3,581	6,393	N/A	N/A
Total Rental properties		28,378	51,325	29,750	28,378	81,075	109,453	446	97,535	207,434
Undeveloped parcels of land
Operations Center in Argentina
Building<br>annexed to Dot	-	713	-	-	713	-	713	-	3,589	4,302	-	Nov-06
Luján<br>plot of land	-	362	-	37	362	37	399	-	634	1,033	-	May-12
Caballito<br>– Ferro	-	783	-	221	783	221	1,004	-	2,391	3,395	-	Nov-97
Santa<br>María del Plata	-	3,345	-	-	3,345	-	3,345	-	18,161	21,506	-	Jul-97
La<br>Plata plot of land	-	402	-	-	402	-	402	-	606	1,008		Mar-18
Intercontinental<br>tower B	-	358	-	575	358	575	933	-	225	1,158	-	-
Others	-	126	-	72	126	72	198	-	424	622	-	-
Operations Center in Israel
Tivoli	-	804	-	10	804	10	814	-	128	942	Apr-11	Oct-15
Total undeveloped parcels of land		6,893	-	915	6,893	915	7,808	-	26,158	33,966

Schedule I (Continued)

		Initial costs		Subsequent costs	Costs at end of the year
Name	Encumbrances	Plot of land	Buildings, facilities and improvements	Improvements / Additions / Disposals / Transfers	Plot of land	Buildings, facilities and improvements	Total	Capitalized costs, net	Fair value adjustments	Fair Value at the end of the year	Date of construction	Date of acquisition
Properties under development
Operations Center in Argentina
PH<br>Office Park	-	-	-	16	-	16	16	-	-	16	in<br>progress	-
Building<br>annexed to Alto Palermo Shopping	-	605	-	1,072	605	1,072	1,677	-	221	1,898	in<br>progress	-
EH<br>UT	-	-	-	114	-	114	114	-	-33	81	in<br>progress	-
Others		-	-	159	-	159	159	-	-12	147
Operations Center in Israel
Tivoli	-	77	1,092	447	77	1,539	1,616	-	-192	1,424	in<br>progress	Oct-15
Total properties under development		682	1,092	1,808	682	2,900	3,582	-	-16	3,566
Total		35,953	52,417	32,473	35,953	84,890	120,843	446	123,677	244,966

listofsubsidiariesexhibit

LIST OF SUBSIDIARIES

The following table lists our subsidiaries and their jurisdiction of incorporation as of September 30, 2020:

			% of<br>ownership interest held by the Group
Name<br>of the entity	Country	Main<br>activity	As<br>of September 30, 2020
IRSA’s<br>direct interest:
IRSA CP(1)	Argentina	Real<br>estate	80.65%
E-Commerce Latina<br>S.A.	Argentina	Investment	100.00%
Efanur<br>S.A.	Uruguay	Investment	100.00%
Hoteles Argentinos<br>S.A.U.	Argentina	Hotel	100.00%
Inversora<br>Bolívar S.A.	Argentina	Investment	100.00%
Llao Llao Resorts<br>S.A.(2)	Argentina	Hotel	50.00%
Nuevas Fronteras<br>S.A.	Argentina	Hotel	76.34%
Palermo Invest<br>S.A.	Argentina	Investment	100.00%
Ritelco<br>S.A.	Uruguay	Investment	100.00%
Tyrus<br>S.A.	Uruguay	Investment	100.00%
U.T. IRSA y<br>Galerías Pacifico(2)	Argentina	Investment	50.00%
IRSA<br>CP’s direct interest:
Arcos del Gourmet<br>S.A.	Argentina	Real<br>estate	90.00%
Emprendimiento<br>Recoleta S.A.	Argentina	Real<br>estate	53.68%
Fibesa<br>S.A.(3)	Argentina	Real<br>estate	100.00%
Panamerican Mall<br>S.A.	Argentina	Real<br>estate	80.00%
Shopping<br>Neuquén S.A.	Argentina	Real<br>estate	99.95%
Torodur<br>S.A.	Uruguay	Investment	100.00%
EHSA	Argentina	Investment	70.00%
Centro de<br>Entretenimiento La Plata	Argentina	Real<br>estate	100.00%
Pareto<br>S.A.	Argentina	design and software<br>development	69.69%
Tyrus<br>S.A.’s direct interest:
DFL and DN<br>BV	Bermuda’s /<br>Netherlands	Investment	97.04%
I Madison<br>LLC	USA	Investment	—
IRSA Development<br>LP	USA	Investment	—
IRSA International<br>LLC	USA	Investment	100.00%
Jiwin<br>S.A.	Uruguay	Investment	100.00%
Liveck<br>S.A.	Uruguay	Investment	100.00%
Real Estate<br>Investment Group V LP (REIG V)	Bermuda’s	Investment	—
Real Estate<br>Strategies LLC	USA	Investment	100.00%
Efanur<br>S.A.’s direct interest:
Real Estate<br>Investment Group VII LP (REIG VII)	Bermuda’s	Investment	100.00%

(1)

Includes interest held through E-Commerce Latina S.A. and Tyrus S.A..

(2)

The Company has consolidated the investment in Llao Llao Resorts S.A. and UT IRSA and Galerías Pacífico considering its equity interest and a shareholder agreement that confers it majority of votes in the decision making process.

(3)

Includes interest held through Ritelco S.A. and Torodur S.A.

Irsa Investments & Representations Inc 6-K, filed Jan 5, 2021

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