Notes to the Unaudited Condensed Interim Consolidated Financial
Statements
(Amounts
in millions, except otherwise indicated)
Free
translation from the original prepared in Spanish for publication
in Argentina
1.
The
Group’s business and general information
These
Financial Statements have been approved for issuance by the Board
of Directors, on May 10, 2019.
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
is our ultimate parent company.
The
Group has established two Operations Centers, Argentina and Israel,
to manage its global business, mainly through the following
companies:
(*)
See note 4.G. to the Annual Financial Statements for more
information about the changes within the Operations Center in
Israel.
2.
Summary
of significant accounting policies
2.1.
Basis
of preparation
The
CNV, in Title IV "Periodic Information Regime" - Chapter III "Rules
relating to the presentation and valuation of financial statements"
- Article 1, of its standards, has established the application of
the Technical Resolution No. 26 (RT 26) of the FACPCE and its
amendments, which adopt IFRS, issued by the IASB, for certain
companies included in the public offering regime of Law No. 26,831,
either because of its stock or its non-convertible notes, or that
have requested authorization to be included in the aforementioned
regime.
For the
preparation of these financial statements, the Group has made use
of the option provided by IAS 34, and has prepared them in
condensed form. Therefore, these financial statements do not
include all the information required in a complete set of annual
financial statements and, consequently, their reading is
recommended together with the annual financial statements as of
June 30, 2018.
The
management of the Group has prepared these financial statements in
accordance with the accounting principles established by the CNV,
which are based on the application of IFRS, in particular of IAS
34.
Additionally, the
information required by the CNV indicated in article 1, Chapter
III, Title IV of General Resolution N° 622/13 has been
included. This information is included in a note to these financial
statements.
IRSA
Inversiones y Representaciones Sociedad Anónima
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 high
inflation 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 exceed 100%.
Accumulated inflation in Argentina in three years is over 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.
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 in fine 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 current measuring
unit set forth in IAS 29 in their annual, interim and special
financial statements closed on or after December 31,
2018.
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 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 recorded in the current currency as of the
balance sheet’s closing date are not restated because they
are already stated in terms of the currency unit current as of the
date of the financial statements.
-
Non-monetary assets
and liabilities are recorded at cost as of the balance sheet date,
and equity components are restated applying the relevant adjustment
ratios.
-
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 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 “Capital adjustment”
account.
-
Other comprehensive
income / (loss) was restated as from each accounting
allocation.
-
The other reserves
in the statement of income were restated as of the initial
application date, i.e., June 30, 2016.
IRSA
Inversiones y Representaciones Sociedad Anónima
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 except for what it’s mentioned in Note
2.1 to the present Financial Statements.
As
described in Note 2.2 to the Annual Financial Statements, the Group
adopted IFRS 15 “Revenues from contracts with
customers” and IFRS 9 “Financial instruments” in
the present fiscal year using the cumulative effect approach, so
that the cumulative impact of the adoption was recognized in the
retained earnings at the beginning of the period, and the
comparative figures have not been modified due to this
adoption.
The
main changes are the following:
IFRS 15: Revenues from contracts with customers
The
standard introduces a new five-step model for recognizing revenue
from contracts with customers:
1.
Identifying the
contract with the customer.
2.
Identifying
separate performance obligations in the contract.
3.
Determining the
transaction price.
4.
Allocating the
transaction price to separate performance obligations.
5.
Recognizing revenue
when the performance obligations are satisfied.
IFRS 9: Financial instruments
The new
standard includes a new model of "expected credit loss" for
receivables or other assets not measured at fair value. The new
model presents a dual measurement approach for impairment: if the
credit risk of a financial asset has not increased significantly
since its initial recognition, an allowance for impairment will be
recorded in the amount of expected credit losses resulting from the
possible non- compliance events within a certain period. If the
credit risk has increased significantly, in most cases the
allowance will increase and the amount of the expected losses
should be recorded.
In
accordance with the new standard, in cases where a change in terms
or exchange of financial liabilities is immaterial and does not
lead, at the time of analysis, to the reduction of the previous
liability and recognition of the new liability, the new cash flows
must be discounted at the original effective interest rate,
recording the impact of the difference between the present value of
the financial liability that has the new terms and the present
value of the original financial liability in net
income.
The
effect on the income statement for the nine-month period ended
March 31, 2019 for the first implementation of IFRS 15 is as
follows:
|
|
|
Nine month
|
|
|
|
03.31.2019
|
|
|
|
According to previous standards
|
|
Implementation of IFRS 15
|
|
Current statement of income
|
|
Revenues
|
|
46,375
|
|
1,793
|
|
48,168
|
|
Costs
|
|
(27,800)
|
|
(946)
|
|
(28,746)
|
|
Gross profit
|
|
18,575
|
|
847
|
|
19,422
|
|
Net gain from fair value adjustment of investment
properties
|
|
(4,674)
|
|
-
|
|
(4,674)
|
|
General and administrative expenses
|
|
(5,433)
|
|
-
|
|
(5,433)
|
|
Selling expenses
|
|
(6,906)
|
|
875
|
|
(6,031)
|
|
Other operating results, net
|
|
30
|
|
-
|
|
30
|
|
Profit from operations
|
|
1,592
|
|
1,722
|
|
3,314
|
|
Share of profit of associates and joint ventures
|
|
(1,159)
|
|
(54)
|
|
(1,213)
|
|
Profit before financial results and income tax
|
|
433
|
|
1,668
|
|
2,101
|
|
Finance income
|
|
2,055
|
|
-
|
|
2,055
|
|
Finance costs
|
|
(14,655)
|
|
(11)
|
|
(14,666)
|
|
Other financial results
|
|
81
|
|
-
|
|
81
|
|
Inflation adjustment
|
|
(560)
|
|
|
|
(560)
|
|
Financial results, net
|
|
(13,079)
|
|
(11)
|
|
(13,090)
|
|
Income before income tax
|
|
(12,646)
|
|
1,657
|
|
(10,989)
|
|
Income tax expense
|
|
1,728
|
|
(113)
|
|
1,615
|
|
Income for the period from continuing operations
|
|
(10,918)
|
|
1,544
|
|
(9,374)
|
|
Loss for the period from discontinued operations
|
|
309
|
|
-
|
|
309
|
|
Profit for the period
|
|
(10,609)
|
|
1,544
|
|
(9,065)
|
IRSA
Inversiones y Representaciones Sociedad Anónima
The
effect on the retained earnings as of July 1, 2018 for the first
implementation of IFRS 9 and 15 is as follows:
|
|
|
|
|
|
|
|
|
07.01.2018
|
|
|
|
Implementation of IFRS 15
|
|
Implementation of IFRS 9
|
|
Total
|
|
ASSETS
|
|
|
|
|
|
|
|
Non- Current Assets
|
|
|
|
|
|
|
|
Trading properties
|
|
(4,438)
|
|
-
|
|
(4,438)
|
|
Investments in associates and joint ventures
|
|
158
|
|
(257)
|
|
(99)
|
|
Deferred income tax assets
|
|
(229)
|
|
-
|
|
(229)
|
|
Trade and other receivables
|
|
707
|
|
(125)
|
|
582
|
|
Total Non-Current Assets
|
|
(3,802)
|
|
(382)
|
|
(4,184)
|
|
Current Assets
|
|
|
|
|
|
|
|
Trading properties
|
|
(1,043)
|
|
-
|
|
(1,043)
|
|
Trade and other receivables
|
|
416
|
|
88
|
|
504
|
|
Total Current Assets
|
|
(627)
|
|
88
|
|
(539)
|
|
TOTAL ASSETS
|
|
(4,429)
|
|
(294)
|
|
(4,723)
|
|
SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
Capital and reserves attributable to equity holders of the
parent
|
|
|
|
|
|
|
|
Retained earnings
|
|
142
|
|
(353)
|
|
(211)
|
|
Total capital and reserves attributable to equity holders of the
parent
|
|
142
|
|
(353)
|
|
(211)
|
|
Non-controlling interest
|
|
185
|
|
(190)
|
|
(5)
|
|
TOTAL SHAREHOLDERS’ EQUITY
|
|
327
|
|
(543)
|
|
(216)
|
|
LIABILITIES
|
|
|
|
|
|
|
|
Non-Current Liabilities
|
|
|
|
|
|
|
|
Trade and other payables
|
|
(1,924)
|
|
-
|
|
(1,924)
|
|
Borrowings
|
|
-
|
|
280
|
|
280
|
|
Deferred income tax liabilities
|
|
(53)
|
|
(112)
|
|
(165)
|
|
Total Non-Current Liabilities
|
|
(1,977)
|
|
168
|
|
(1,809)
|
|
Current Liabilities
|
|
|
|
|
|
|
|
Trade and other payables
|
|
(2,779)
|
|
-
|
|
(2,779)
|
|
Borrowings
|
|
-
|
|
81
|
|
81
|
|
Total Current Liabilities
|
|
(2,779)
|
|
81
|
|
(2,698)
|
|
TOTAL LIABILITIES
|
|
(4,756)
|
|
249
|
|
(4,507)
|
|
TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES
|
|
(4,429)
|
|
(294)
|
|
(4,723)
|
2.3.
Comparability
of information
Balance
items as of June 30, 2018 and March 31, 2018 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 Shufersal.
See note 4.G. to the Annual Financial Statements.
The
preparation of Financial Statements at a certain date requires
Management to make estimations and evaluations affecting the amount
of assets and liabilities recorded and contingent assets and
liabilities disclosed at such date, as well as income and expenses
recorded during the period. Actual results might differ from the
estimates and evaluations made at the date of preparation of these
financial statements. In the preparation of these financial
statements, the significant judgments made by Management in
applying the Group’s accounting policies and the main sources
of uncertainty were the same as the ones applied by the Group in
the preparation of the Annual Financial Statements described in
Note 3 to those Financial Statements.
3.
Seasonal
effects on operations
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.
IRSA
Inversiones y Representaciones Sociedad Anónima
Operations
Center in Israel
The
results of operations of telecommunications and tourism are usually
affected by seasonality in summer months in Israel and by the
Jewish New Year, given a higher consumption due to internal and
external tourism.
4.
Acquisitions
and disposals
Significant
acquisitions and disposals for the nine-month period ended March
31, 2019 are detailed below. Significant acquisitions and disposals
for the fiscal year ended June 30, 2018, are detailed in Note 4 to
the Annual Financial Statements.
Operations
Center in Argentina
Dividend distribution
On
October 29, 2018 the Shareholder’s meeting was held, whereby
the distribution of a dividend in kind for an equivalent of Ps.
1,412 payable in shares of IRSA CP was resolved. For the
distribution, the value of IRSA CP share was taken as of October
26, 2018, which was Ps. 220 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 equity
attributable to holders of the parent for Ps. 780, restated as of
the date of these financial statements.
Sale of Tarshop
On
February 14, 2019, IRSA CP sold its entire stake in Tarshop to
BHSA. With this acquisition BHSA became the holder of 100% of the
capital of said company. The price of the operation was established
at USD 0.1, which have already been received.
The
parties agreed that the seller will be entitled to a variable
compensation, if the buyer, in a period not exceeding 2 years, sell
all or part of the participation to a third party.
The
result transcended to third parties for this transaction was
approximately Ps. 115.
Purchase of equity interest in HASA (owner of Libertador
Hotel)
On
February 28, 2019, the Group reported acquired, from an unrelated
third party, the twenty percent (20%) of HASA for an amount of USD
1.2 . As a result of this acquisition, IRSA holds 100% of HASA'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. 2 restated to these financial
statements.
Operations
Center in Israel
A)
Possible sale of a subsidiary of IDB Tourism
On
August 14, 2018, the Board of Directors of IDB Tourism approved its
engagement in a memorandum of understanding for the sale of 50% of
the issued share capital of a company which manages the incoming
tourism operation which is held by Israir for a total consideration
of NIS 26 million (approximately Ps. 260 as of the date of the
transaction). This transaction does not change the intentions of
selling the whole investment in IDBT, which the management of the
company expects to complete before June 2019.
IRSA
Inversiones y Representaciones Sociedad Anónima
On
January 2, 2019 and August 30, 2018 continuing with the
instructions given by the Commissioner of Capital Markets,
Insurance and Savings of Israel, IDBD has sold 4.5% and 5%
respectively of its stake in Clal through a swap transactions in
the same conditions that applied to the swap transactions described
in Note 4 to the Annual Consolidated Financial Statements. The
consideration was set at an amount of approximately NIS 300 million
(equivalent to approximately Ps. 3,036 as of the transaction date).
After the completion of the transactions, IDBD’s interest in
Clal was reduced to 25.3% of its share capital. (See note
30).
Additionally, on
January 2, 2019 the swap transaction was completed with respect to
555,788 shares of Clal, which constitute 1% of the issued capital
of Clal. It is hereby clarified that the terms of the swap
transaction will remain in effect with respect to the balance of
shares of Clal which are the subject of the swap transaction, which
constitute approximately 29% of the issued capital of Clal as of
the date of these financial statements (See note 30).
C)
Agreement to sell plot of land in USA
In
August 2018, 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 (approximately Ps. 739 as of the
date of issuance of these financial statements). The same has
already been concrete.
D)
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. 227
as of that date), 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 shareholders by Ps. 14 restated to these financial
statements.
E)
Sale of Shufersal shares
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. 4,166 as of the date of the transaction). After
this transaction, the group holding went down to 26,02%
approximately.
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. 3,483 at the
date of the transaction). The same has already been
concrete.
G)
Increase in participation in PBC
In
December 2018 and February 2019, DIC acquired an additional 4.38%
of PBC in the market for NIS 81 million (equivalent to Ps. 823 as
of the date of each transaction). The present transactions were
accounted for as equity transactions, generating an increase in net
equity attributable to the controlling company for Ps. 58 restated
as of the date of these financial statements.
H)
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 2019 amounting
up to NIS 120 million (approximately Ps.1,432 as of the date of
these financial statements). 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.
IRSA
Inversiones y Representaciones Sociedad Anónima
Since
December 2018 as of the date of these financial statements, DIC
acquired 12.2 million shares for a total amount of NIS 119 million
(approximately Ps. 1,169 as of the date of each transaction).
Additionally, in December 2018, minority shareholders of DIC
exercised DIC Series 6 options for an amount of NIS 9 million
(approximately Ps. 100 as of that date).
As a
result of the operations described above, the participation of
Dolphin IL in DIC increased aproximately by 5.4%. The present
transactions were accounted for as an equity transaction generating
a decrease in the equity attributable to holders of the parent for
Ps. 76, restated as of the date of these financial
statements.
I)
Increase in participation in Cellcom
In
December 2018, Discount Investment exercised 1.5 million options
(Series 1) of Cellcom held by it in the amount of NIS 31 million
(approximately Ps. 302 as of that date). In addition, in December
2018 and February 2019, DIC acquired shares of Cellcom at a cost of
NIS 19 million (approximately Ps. 205 at the date of each
transaction). As a result of the exercise of the options and the
acquisition, the share of DIC in Cellcom increased by 0.9%. The
present transactions were accounted for as an equity transaction
generating a decrease in the equity attributable to holders of the
parent for
Ps.
102, restated as of the date of these financial
statements.
J)
Increase in participation 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. 311 as of that
date). This transaction was accounted for as an equity transaction
generating a decrease in the equity attributable to holders of the
parent for Ps. 25, restated as of the date of these financial
statements.
5.
Financial
risk management and fair value estimates
These
Financial Statements do not include all the information and
disclosures on financial risk management; therefore, they should be
read along with Note 5 to the Annual Financial
Statements.
There
have been no changes in risk management or risk management policies
applied by the Group since year-end.
Since
June 30, 2018 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). Furthermore, there have been no transfers between the
different hierarchies used to assess the fair value of the
Group’s financial instruments.
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 4.G. to the
Annual Financial Statements, the Group lost control of Shufersal as
of June 30, 2018 and has reclassified its results to discontinued
operations. Segment information for the period ended March 31, 2018
has been recast for the purposes of comparability with the present
period.
Below
is a summary of the Group’s business units and a
reconciliation between the operating income according to segment
information and the operating income of the statement of income and
other comprehensive income of the Group for the periods ended March
31, 2019 and 2018:
IRSA
Inversiones y Representaciones Sociedad Anónima
|
|
Nine months ended March 31, 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
/ liabilities (2)
|
Total as per statement of income / statement of financial
position
|
|
Revenues
|
7,536
|
38,885
|
46,421
|
(45)
|
1,803
|
(11)
|
48,168
|
|
Costs
|
(1,492)
|
(25,403)
|
(26,895)
|
31
|
(1,882)
|
-
|
(28,746)
|
|
Gross profit / (loss)
|
6,044
|
13,482
|
19,526
|
(14)
|
(79)
|
(11)
|
19,422
|
|
Net (loss) / gain from fair value adjustment of investment
properties
|
(5,860)
|
1,248
|
(4,612)
|
(62)
|
-
|
-
|
(4,674)
|
|
General and administrative expenses
|
(1,307)
|
(4,151)
|
(5,458)
|
9
|
-
|
16
|
(5,433)
|
|
Selling expenses
|
(521)
|
(5,513)
|
(6,034)
|
3
|
-
|
-
|
(6,031)
|
|
Other operating results, net
|
(438)
|
351
|
(87)
|
122
|
-
|
(5)
|
30
|
|
(Loss) / profit from operations
|
(2,082)
|
5,417
|
3,335
|
58
|
(79)
|
-
|
3,314
|
|
Share of (loss) of associates and joint ventures
|
(872)
|
(263)
|
(1,135)
|
(78)
|
-
|
-
|
(1,213)
|
|
Segment (loss) / profit
|
(2,954)
|
5,154
|
2,200
|
(20)
|
(79)
|
-
|
2,101
|
|
Reportable assets
|
92,880
|
377,927
|
470,807
|
(508)
|
-
|
21,521
|
491,820
|
|
Reportable liabilities
|
-
|
(327,827)
|
(327,827)
|
-
|
-
|
(64,511)
|
(392,338)
|
|
Net reportable assets
|
92,880
|
50,100
|
142,980
|
(508)
|
-
|
(42,990)
|
99,482
|
|
|
Nine Monts ended March 31, 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
/ liabilities (2)
|
Total as per statement of income / statement of financial
position
|
|
Revenues
|
6,779
|
30,455
|
37,234
|
(66)
|
2,160
|
(9)
|
39,319
|
|
Costs
|
(1,415)
|
(18,906)
|
(20,321)
|
39
|
(2,207)
|
-
|
(22,489)
|
|
Gross profit / (loss)
|
5,364
|
11,549
|
16,913
|
(27)
|
(47)
|
(9)
|
16,830
|
|
Net gain from fair value adjustment of investment
properties
|
5,911
|
2,118
|
8,029
|
(56)
|
-
|
-
|
7,973
|
|
General and administrative expenses
|
(1,127)
|
(3,700)
|
(4,827)
|
25
|
-
|
12
|
(4,790)
|
|
Selling expenses
|
(511)
|
(5,160)
|
(5,671)
|
10
|
-
|
-
|
(5,661)
|
|
Other operating results, net
|
(134)
|
1,282
|
1,148
|
25
|
-
|
(3)
|
1,170
|
|
Profit / (loss) from operations
|
9,503
|
6,089
|
15,592
|
(23)
|
(47)
|
-
|
15,522
|
|
Share of profit / (loss) of associates and joint
ventures
|
285
|
(416)
|
(131)
|
238
|
-
|
-
|
107
|
|
Segment profit / (loss)
|
9,788
|
5,673
|
15,461
|
215
|
(47)
|
-
|
15,629
|
|
Reportable assets
|
93,980
|
326,048
|
420,028
|
(73)
|
-
|
17,601
|
437,556
|
|
Reportable liabilities
|
-
|
(288,428)
|
(288,428)
|
-
|
-
|
(53,444)
|
(341,872)
|
|
Net reportable assets
|
93,980
|
37,620
|
131,600
|
(73)
|
-
|
(35,843)
|
95,684
|
(1)
Represents the
equity value of joint ventures that were proportionately
consolidated for the 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. 4,081 as of March 31, 2019.
Below
is a summarized analysis of the business unit of the Group’s
Operations Center in Argentina for the periods ended March 31, 2019
and 2018:
|
|
Nine months ended March 31, 2019
|
|
|
Operations Center in Argentina
|
|
|
Shopping Malls
|
Offices
|
Sales and developments
|
Hotels
|
International
|
Corporate
|
Others
|
Total
|
|
Revenues
|
4,256
|
1,038
|
625
|
1,539
|
7
|
-
|
71
|
7,536
|
|
Costs
|
(349)
|
(45)
|
(253)
|
(768)
|
(3)
|
-
|
(74)
|
(1,492)
|
|
Gross profit / (loss)
|
3,907
|
993
|
372
|
771
|
4
|
-
|
(3)
|
6,044
|
|
Net (loss) / gain from fair value adjustment of investment
properties
|
(10,204)
|
3,189
|
1,257
|
-
|
3
|
-
|
(105)
|
(5,860)
|
|
General and administrative expenses
|
(464)
|
(106)
|
(120)
|
(239)
|
(56)
|
(265)
|
(57)
|
(1,307)
|
|
Selling expenses
|
(287)
|
(47)
|
(24)
|
(154)
|
-
|
-
|
(9)
|
(521)
|
|
Other operating results, net
|
(64)
|
(16)
|
(148)
|
25
|
(6)
|
-
|
(229)
|
(438)
|
|
(Loss) / profit from operations
|
(7,112)
|
4,013
|
1,337
|
403
|
(55)
|
(265)
|
(403)
|
(2,082)
|
|
Share of profit of associates and joint ventures
|
-
|
-
|
(20)
|
-
|
(360)
|
-
|
(492)
|
(872)
|
|
Segment (loss) / profit
|
(7,112)
|
4,013
|
1,317
|
403
|
(415)
|
(265)
|
(895)
|
(2,954)
|
|
|
|
|
|
|
|
|
|
|
|
Investment properties and trading properties
|
47,829
|
22,895
|
18,074
|
-
|
64
|
-
|
751
|
89,613
|
|
Investment in associates and joint ventures
|
-
|
-
|
267
|
-
|
(3,045)
|
-
|
4,182
|
1,404
|
|
Other operating assets
|
200
|
107
|
117
|
1,252
|
129
|
-
|
58
|
1,863
|
|
Operating assets
|
48,029
|
23,002
|
18,458
|
1,252
|
(2,852)
|
-
|
4,991
|
92,880
|
IRSA
Inversiones y Representaciones Sociedad Anónima
For the
nine-month period ended March 31, 2019, the net loss from the fair
value adjustment of investment property amounted to Ps. (5,860),
and it was generated by:
1.
Shopping Malls Segment
The net
result of shopping malls was affected by:
a) an
increase of 98 basis points, originated mainly by a rise in the
country risk component of the discount rate WACC seeks to discount
the flow of funds basis points in the discount rate, representing a
decrease of Ps. 5,408 in the value of shopping Malls;
b)
negative
result of Ps. 2,591 million due to a decrease due to the conversion
to USD of the projected cash flow in pesos according to the
exchange rate estimates used in the cash flow
c)
positive impact of Ps. 14,886 million as a result of the conversion
to pesos of the value of shopping malls in dollars based on the
exchange rate at the end of the period (depreciation of the
Argentine peso of 50% against the dollar).
2.
“Offices", "Sales and developments" and "Others"
segments
The net
result of the properties included in these segments increased
during the nine-month period to March 31, 2019, mainly as a result
of the impact of the depreciation of the Argentine peso by 50% and
of the additions that occurred during the period.
3.
Additionally due to the impact of the inflation adjustment Ps.
29,402 were reclassified to “inflation
adjustment”.
|
|
Nine months ended March 31, 2018
|
|
|
Operations Center in Argentina
|
|
|
Shopping Malls
|
Offices
|
Sales and developments
|
Hotels
|
International
|
Corporate
|
Others
|
Total
|
|
Revenues
|
4,761
|
636
|
132
|
1,239
|
-
|
-
|
11
|
6,779
|
|
Costs
|
(407)
|
(45)
|
(88)
|
(830)
|
-
|
-
|
(45)
|
(1,415)
|
|
Gross profit / (loss)
|
4,354
|
591
|
44
|
409
|
-
|
-
|
(34)
|
5,364
|
|
Net gain / (loss) from fair value adjustment of investment
properties
|
5,463
|
98
|
365
|
-
|
-
|
-
|
(15)
|
5,911
|
|
General and administrative expenses
|
(393)
|
(102)
|
(91)
|
(260)
|
(70)
|
(189)
|
(22)
|
(1,127)
|
|
Selling expenses
|
(293)
|
(50)
|
(26)
|
(139)
|
-
|
-
|
(3)
|
(511)
|
|
Other operating results, net
|
(65)
|
(6)
|
(39)
|
(14)
|
(25)
|
-
|
15
|
(134)
|
|
Profit / (loss) from operations
|
9,066
|
531
|
253
|
(4)
|
(95)
|
(189)
|
(59)
|
9,503
|
|
Share of profit of associates and joint ventures
|
-
|
-
|
(11)
|
-
|
14
|
-
|
282
|
285
|
|
Segment profit / (loss)
|
9,066
|
531
|
242
|
(4)
|
(81)
|
(189)
|
223
|
9,788
|
|
|
|
|
|
|
|
|
|
|
|
Investment properties and trading properties
|
58,784
|
14,659
|
11,353
|
-
|
-
|
-
|
463
|
85,259
|
|
Investment in associates and joint ventures
|
-
|
-
|
274
|
-
|
1,023
|
-
|
5,552
|
6,849
|
|
Other operating assets
|
181
|
116
|
118
|
1,326
|
94
|
-
|
37
|
1,872
|
|
Operating assets
|
58,965
|
14,775
|
11,745
|
1,326
|
1,117
|
-
|
6,052
|
93,980
|
.
Below
is a summarized analysis of the business unit of the Group’s
Operations Center in Israel for the periods ended March 31, 2019
and 2018:
|
|
Nine months ended March 31, 2019
|
|
|
Operations Center in Israel
|
|
|
Real Estate
|
Supermarkets
|
Telecommunications
|
Insurance
|
Corporate
|
Others
|
Total
|
|
Revenues
|
10,621
|
-
|
27,134
|
-
|
-
|
1,130
|
38,885
|
|
Costs
|
(4,787)
|
-
|
(20,140)
|
-
|
-
|
(476)
|
(25,403)
|
|
Gross profit
|
5,834
|
-
|
6,994
|
-
|
-
|
654
|
13,482
|
|
Net gain from fair value adjustment of investment
properties
|
1,248
|
-
|
-
|
-
|
-
|
-
|
1,248
|
|
General and administrative expenses
|
(527)
|
-
|
(2,374)
|
-
|
(511)
|
(739)
|
(4,151)
|
|
Selling expenses
|
(198)
|
-
|
(5,089)
|
-
|
-
|
(226)
|
(5,513)
|
|
Other operating results, net
|
-
|
-
|
-
|
-
|
218
|
133
|
351
|
|
Profit / (loss) from operations
|
6,357
|
-
|
(469)
|
-
|
(293)
|
(178)
|
5,417
|
|
Share of (loss) / profit of associates and joint
ventures
|
(154)
|
340
|
-
|
-
|
-
|
(449)
|
(263)
|
|
Segment profit / (loss)
|
6,203
|
340
|
(469)
|
-
|
(293)
|
(627)
|
5,154
|
|
|
|
|
|
|
|
|
|
|
Operating assets
|
207,825
|
15,934
|
81,568
|
16,209
|
30,968
|
25,423
|
377,927
|
|
Operating liabilities
|
(161,409)
|
-
|
(64,287)
|
-
|
(89,883)
|
(12,248)
|
(327,827)
|
|
Operating assets (liabilities), net
|
46,416
|
15,934
|
17,281
|
16,209
|
(58,915)
|
13,175
|
50,100
|
IRSA
Inversiones y Representaciones Sociedad Anónima
|
|
Nine months ended March 31, 2018
|
|
|
Operations Center in Israel
|
|
|
Real Estate
|
Supermarkets
|
Telecommunications
|
Insurance
|
Corporate
|
Others
|
Total
|
|
Revenues
|
6,111
|
-
|
23,595
|
-
|
-
|
749
|
30,455
|
|
Costs
|
(1,940)
|
-
|
(16,660)
|
-
|
-
|
(306)
|
(18,906)
|
|
Gross profit
|
4,171
|
-
|
6,935
|
-
|
-
|
443
|
11,549
|
|
Net gain from fair value adjustment of investment
properties
|
2,118
|
-
|
-
|
-
|
-
|
-
|
2,118
|
|
General and administrative expenses
|
(440)
|
-
|
(2,256)
|
-
|
(447)
|
(557)
|
(3,700)
|
|
Selling expenses
|
(128)
|
-
|
(4,843)
|
-
|
-
|
(189)
|
(5,160)
|
|
Other operating results, net
|
214
|
-
|
251
|
-
|
706
|
111
|
1,282
|
|
Profit / (loss) from operations
|
5,935
|
-
|
87
|
-
|
259
|
(192)
|
6,089
|
|
Share of profit of associates and joint ventures
|
(68)
|
-
|
-
|
-
|
-
|
(348)
|
(416)
|
|
Segment profit
|
5,867
|
-
|
87
|
-
|
259
|
(540)
|
5,673
|
|
|
|
|
|
|
|
|
|
|
Operating assets
|
142,571
|
65,536
|
51,548
|
17,415
|
24,702
|
24,276
|
326,048
|
|
Operating liabilities
|
(111,808)
|
(47,529)
|
(40,606)
|
-
|
(75,329)
|
(13,156)
|
(288,428)
|
|
Operating assets (liabilities), net
|
30,763
|
18,007
|
10,942
|
17,415
|
(50,627)
|
11,120
|
37,620
|
7.
Investments
in associates and joint ventures
Changes
in the Group’s investments in associates and joint ventures
for the nine -month period ended March 31, 2019 and for the year
ended June 30, 2018 were as follows:
|
|
March 31, 2019
|
|
June 30, 2018
|
|
Beginning of the period / year
|
33,395
|
|
16,077
|
|
Adjustment previous periods (IFRS 9 and 15)
|
(99)
|
|
-
|
|
Increase in equity interest in associates and joint
ventures
|
346
|
|
525
|
|
Issuance of capital and contributions
|
25
|
|
256
|
|
Capital reduction
|
(389)
|
|
(470)
|
|
Decrease of interest in associate
|
(4,610)
|
|
(481)
|
|
Share of profit / (loss)
|
(1,213)
|
|
(2,236)
|
|
Transfer to borrowings to associates
|
-
|
|
(302)
|
|
Currency translation adjustment
|
1,453
|
|
1,931
|
|
Incorporation of deconsolidated subsidiary, net
|
-
|
|
18,735
|
|
Dividends (i)
|
(984)
|
|
(484)
|
|
Distribution for associate liquidation
|
-
|
|
(102)
|
|
Reclassification to held-for-sale
|
-
|
|
(78)
|
|
Others
|
(94)
|
|
24
|
|
End of the period / year (ii)
|
27,830
|
|
33,395
|
(ii)
As of March 31,
2019 and June 30, 2018 includes Ps. (4,067) of New Lipstick and Ps.
(14) of Puerto Retiro and as of the June 30, 2018 Ps. (3,489) of
New Lipstick, reflecting interests in companies with negative
equity, which were disclosed in “Provisions” (see Note
17).
|
Name of the entity
|
|
% ownership interest
|
|
Value of Group's interest in equity
|
|
Group's interest in comprehensive income / (loss)
|
|
|
March 31, 2019
|
June 30, 2018
|
|
March 31, 2019
|
June 30, 2018
|
|
March 31, 2019
|
March 31, 2018
|
|
Associates
|
|
|
|
|
|
|
|
|
|
|
New Lipstick (1)
|
|
49.96%
|
49.90%
|
|
(4,067)
|
(3,489)
|
|
(577)
|
(6)
|
|
Tarshop (2)
|
|
N/A
|
20.00%
|
|
N/A
|
176
|
|
N/A
|
(9)
|
|
BHSA
|
|
29.91%
|
29.91%
|
|
3,930
|
4,668
|
|
(533)
|
348
|
|
Condor
|
|
18.89%
|
18.90%
|
|
996
|
992
|
|
68
|
11
|
|
PBEL
|
|
45.00%
|
45.00%
|
|
1,492
|
1,493
|
|
120
|
1,280
|
|
Shufersal
|
|
26.02%
|
33.56%
|
|
15,934
|
18,734
|
|
1,416
|
N/A
|
|
Other associates
|
|
N/A
|
N/A
|
|
2,350
|
3,027
|
|
(302)
|
(2,031)
|
|
Joint
ventures
|
|
|
|
|
|
|
|
|
|
|
Quality
|
|
50.00%
|
50.00%
|
|
1,609
|
1,523
|
|
61
|
118
|
|
La Rural SA
|
|
50.00%
|
50.00%
|
|
25
|
249
|
|
53
|
(9)
|
|
Mehadrin
|
|
45.41%
|
45.41%
|
|
3,056
|
3,233
|
|
(116)
|
2,130
|
|
Other joint ventures
|
|
N/A
|
N/A
|
|
2,505
|
2,789
|
|
50
|
(2,289)
|
|
Total associates and joint ventures
|
|
|
|
|
27,830
|
33,395
|
|
240
|
(457)
|
IRSA
Inversiones y Representaciones Sociedad Anónima
(1)
On March 4th 2019,
Metropolitan a subsidiary of New Lipstick, has renegotiated its
non-recourse debt with IRSA, for an amount of USD 11 plus a
contingent amount over the option price on part of the parcel of
the land where the Lipstick building is built. The debt is due on
April 30, 2021. Metropolitan decided to not exercise the option to
purchase a part of the parcel of land where the Lipstick Building
was built in New York City. The period available for IRSA to
exercise such purchase option expired on April 30, 2019.
Metropolitan's decision to not exercise this option does not
constitute an event of default under any agreement or other
undertaking to which Metropolitan or any of its affiliates is a
party.
(2)
See Note 4. Sale of
Tarshop.
Below
is additional information about the Group’s investments in
associates and joint ventures:
|
Name of the entity
|
|
Place of business / Country of incorporation
|
|
Main activity
|
|
Common shares 1 vote
|
|
Latest financial statements issued
|
|
|
|
|
|
Share capital (nominal value)
|
|
Profit / (loss) for the period
|
|
Shareholders’ equity
|
|
Associates
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Lipstick
|
|
U.S.
|
|
Real estate
|
|
N/A
|
|
N/A
|
|
(*) (24)
|
|
(*) (202)
|
|
BHSA
|
|
Argentina
|
|
Financial
|
|
448,689,072
|
|
(***) 1.500
|
|
(***) 37
|
|
(***) 9.906
|
|
Condor
|
|
EE.UU.
|
|
Hotel
|
|
2,245,100
|
|
N/A
|
|
(*) (1)
|
|
(*) 108
|
|
PBEL
|
|
India
|
|
Real estate
|
|
450
|
|
(**) 1
|
|
(**) (18)
|
|
(**) (520)
|
|
Shufersal
|
|
Israel
|
|
Retail
|
|
79,282,087
|
|
(**) 242
|
|
(**) 198
|
|
(**) 1.796
|
|
Other associates
|
|
|
|
|
|
|
|
N/A
|
|
N/A
|
|
N/A
|
|
Joint
ventures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quality
|
|
Argentina
|
|
Real estate
|
|
120,827,022
|
|
280
|
|
121
|
|
3,189
|
|
La Rural SA
|
|
Argentina
|
|
Organization of events
|
|
714,498
|
|
1
|
|
49
|
|
195
|
|
Mehadrin
|
|
Israel
|
|
Agriculture
|
|
1,509,889
|
|
(**) 3
|
|
(**) (35)
|
|
(**) 544
|
|
Other joint ventures
|
|
|
|
|
|
-
|
|
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
March 31, 2019
according to BCRA's
standards.
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.
The
Company was involved in a judicial bankruptcy action brought by the
National Government, to which this Board of Directors is totally
alien. 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. The dictation of the sentence is
expected. 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 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 Supreme
Court of Justice of the Nation.
IRSA
Inversiones y Representaciones Sociedad Anónima
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 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.
Changes
in the Group’s investment properties for the nine-month
period ended March 31, 2019 and for the year ended June 30, 2018
were as follows:
|
|
Nine months ended March 31, 2019
|
|
Year ended June 30, 2018
|
|
|
Rental properties
|
|
Undeveloped parcels of land
|
|
Properties under development
|
|
Total
|
|
Total
|
|
Fair value at the beginning of the period / year
|
201,780
|
|
17,858
|
|
12,011
|
|
231,649
|
|
184,146
|
|
Additions
|
835
|
|
345
|
|
3,661
|
|
4,841
|
|
5,272
|
|
Capitalized finance costs
|
-
|
|
-
|
|
28
|
|
28
|
|
122
|
|
Capitalized leasing costs
|
9
|
|
-
|
|
-
|
|
9
|
|
33
|
|
Amortization of capitalized leasing costs (i)
|
(7)
|
|
-
|
|
-
|
|
(7)
|
|
(7)
|
|
Transfers
|
1,683
|
|
(524)
|
|
(1,159)
|
|
-
|
|
-
|
|
Transfers to / from property, plant and equipment
|
(13)
|
|
-
|
|
-
|
|
(13)
|
|
2,475
|
|
Transfers to / from trading properties
|
-
|
|
(69)
|
|
616
|
|
547
|
|
363
|
|
Transfers to assets held-for-sale
|
-
|
|
-
|
|
-
|
|
-
|
|
(741)
|
|
Assets incorporated by business combination
|
-
|
|
-
|
|
-
|
|
-
|
|
169
|
|
Deconsolidation
|
-
|
|
-
|
|
-
|
|
-
|
|
(6,613)
|
|
Disposals
|
(899)
|
|
(1,464)
|
|
-
|
|
(2,363)
|
|
(784)
|
|
Currency translation adjustment
|
11,466
|
|
189
|
|
1,001
|
|
12,656
|
|
31,412
|
|
Net gain from fair value adjustment
|
(9,290)
|
|
1,062
|
|
3,554
|
|
(4,674)
|
|
15,802
|
|
Fair value at the end of the period / year
|
205,564
|
|
17,397
|
|
19,712
|
|
242,673
|
|
231,649
|
(i)
Amortization
charges of capitalized leasing costs were included in
“Costs” in the Statements of Income (Note
20).
The
following amounts have been recognized in the Statements of
Income:
|
|
03.31.2019
|
|
03.31.2018
|
|
Rental and services income
|
14,481
|
|
13,294
|
|
Direct operating expenses
|
(3,843)
|
|
(3,714)
|
|
Development expenditures
|
(3,309)
|
|
(944)
|
|
Net realized gain from fair value adjustment of investment
properties
|
521
|
|
579
|
|
Net unrealized gain from fair value adjustment of investment
properties
|
(5,195)
|
|
7,126
|
Valuation
techniques are described in Note 9 to the Annual Financial
Statements. There were no changes to such techniques. The Company
has reassessed the assumptions at the end of the period,
incorporating the effect of the variation in the exchange rate in
other assets denominated in US Dollars.
IRSA
Inversiones y Representaciones Sociedad Anónima
9.
Property,
plant and equipment
Changes
in the Group’s property, plant and equipment for the
nine-month period ended March 31, 2019 and for the year ended June
30, 2018 were as follows:
|
|
Nine month ended March 31, 2019
|
|
Year ended June 30, 2018
|
|
|
Buildings and facilities
|
|
Machinery and equipment
|
|
Communication networks
|
|
Others
|
|
Total
|
|
Total
|
|
Costs
|
6,635
|
|
1,485
|
|
55,882
|
|
6,533
|
|
70,535
|
|
99,415
|
|
Accumulated depreciation
|
(3,966)
|
|
(998)
|
|
(42,196)
|
|
(3,156)
|
|
(50,316)
|
|
(48,257)
|
|
Net book amount at the beginning of the period / year
|
2,669
|
|
487
|
|
13,686
|
|
3,377
|
|
20,219
|
|
51,158
|
|
Additions
|
91
|
|
33
|
|
2,310
|
|
1,180
|
|
3,614
|
|
6,451
|
|
Disposals
|
-
|
|
(1)
|
|
(17)
|
|
-
|
|
(18)
|
|
(234)
|
|
Deconsolidation
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(41,271)
|
|
Impairment / recovery
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(113)
|
|
Assets incorporated by business combinations
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(933)
|
|
Currency translation adjustment
|
73
|
|
24
|
|
924
|
|
305
|
|
1,326
|
|
13,251
|
|
Transfers from / to investment properties
|
13
|
|
-
|
|
-
|
|
-
|
|
13
|
|
(2,281)
|
|
Depreciation charges (i)
|
(210)
|
|
(40)
|
|
(1,804)
|
|
(838)
|
|
(2,892)
|
|
(5,809)
|
|
Balances at the end of the period / year
|
2,636
|
|
503
|
|
15,099
|
|
4,024
|
|
22,262
|
|
20,219
|
|
Costs
|
6,750
|
|
1,546
|
|
60,110
|
|
7,330
|
|
75,736
|
|
70,535
|
|
Accumulated depreciation
|
(4,114)
|
|
(1,043)
|
|
(45,011)
|
|
(3,306)
|
|
(53,474)
|
|
(50,316)
|
|
Net book amount at the end of the period / year
|
2,636
|
|
503
|
|
15,099
|
|
4,024
|
|
22,262
|
|
20,219
|
(i)
As of March 31,
2019, depreciation charges of property, plant and equipment were
recognized as follows: Ps. 2,565 in "Costs", Ps. 267 in "General
and administrative expenses" and Ps. 60 in "Selling expenses",
respectively in the Statement of Income (Note 20).
Changes
in the Group’s trading properties for the nine-month period
ended March 31, 2019 and for the year ended June 30, 2018 were as
follows:
|
|
Nine month ended March 31, 2019
|
|
Year ended June 30, 2018
|
|
|
Completed properties
|
|
Properties under development
|
|
Undeveloped sites
|
|
Total
|
|
Total
|
|
Beginning of the period / year
|
3,744
|
|
7,852
|
|
2,529
|
|
14,125
|
|
11,262
|
|
Adjustment previous periods (IFRS 15)
|
(997)
|
|
(4,484)
|
|
-
|
|
(5,481)
|
|
-
|
|
Additions
|
-
|
|
2,497
|
|
9
|
|
2,506
|
|
3,108
|
|
Assets incorporated by business combinations
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Currency translation adjustment
|
(282)
|
|
(53)
|
|
11
|
|
(324)
|
|
2,804
|
|
Transfers
|
2,250
|
|
(1,919)
|
|
(331)
|
|
-
|
|
-
|
|
Transfers from intangible assets
|
1
|
|
-
|
|
-
|
|
1
|
|
26
|
|
Transfers to investment properties
|
-
|
|
(547)
|
|
-
|
|
(547)
|
|
(363)
|
|
Capitalized finance costs
|
-
|
|
67
|
|
-
|
|
67
|
|
16
|
|
Disposals
|
(3,270)
|
|
(842)
|
|
-
|
|
(4,112)
|
|
(2,728)
|
|
End of the period / year
|
1,446
|
|
2,571
|
|
2,218
|
|
6,235
|
|
14,125
|
|
Non-current
|
|
|
|
|
|
|
2,972
|
|
9,464
|
|
Current
|
|
|
|
|
|
|
3,263
|
|
4,661
|
|
Total
|
|
|
|
|
|
|
6,235
|
|
14,125
|
IRSA
Inversiones y Representaciones Sociedad Anónima
Changes
in the Group’s intangible assets for the nine-month period
ended March 31, 2019 and for the year ended June 30, 2018 were as
follows:
|
|
Nine month ended March 31, 2019
|
Year ended June 30, 2018
|
|
|
Goodwill
|
Trademarks
|
Licenses
|
Customer relations
|
Information systems and software
|
Contracts and others
|
Total
|
Total
|
|
Costs
|
4,434
|
4,649
|
6,220
|
9,854
|
4,439
|
4,110
|
33,706
|
32,745
|
|
Accumulated amortization
|
-
|
(269)
|
(4,547)
|
(6,580)
|
(2,067)
|
(2,598)
|
(16,061)
|
(10,983)
|
|
Net book amount at the beginning of the period / year
|
4,434
|
4,380
|
1,673
|
3,274
|
2,372
|
1,512
|
17,645
|
21,762
|
|
Additions
|
-
|
-
|
-
|
10
|
688
|
1,038
|
1,736
|
1,066
|
|
Disposals
|
-
|
-
|
-
|
-
|
(30)
|
-
|
(30)
|
-
|
|
Deconsolidation
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(10,370)
|
|
Impairment
|
(118)
|
-
|
-
|
-
|
-
|
-
|
(118)
|
-
|
|
Transfers to trading properties
|
-
|
-
|
-
|
-
|
-
|
(1)
|
(1)
|
(26)
|
|
Assets incorporated by business combination
|
-
|
-
|
-
|
-
|
44
|
-
|
44
|
1,689
|
|
Currency translation adjustment
|
283
|
263
|
82
|
24
|
143
|
192
|
987
|
6,804
|
|
Amortization charges (i)
|
-
|
(58)
|
(108)
|
(888)
|
(629)
|
(739)
|
(2,422)
|
(3,280)
|
|
Balances at the end of the period / year
|
4,599
|
4,585
|
1,647
|
2,420
|
2,588
|
2,002
|
17,841
|
17,645
|
|
Costs
|
4,599
|
4,912
|
6,624
|
14,189
|
4,327
|
5,643
|
40,294
|
33,706
|
|
Accumulated amortization
|
-
|
(327)
|
(4,977)
|
(11,769)
|
(1,739)
|
(3,641)
|
(22,453)
|
(16,061)
|
|
Net book amount at the end of the period / year
|
4,599
|
4,585
|
1,647
|
2,420
|
2,588
|
2,002
|
17,841
|
17,645
|
(i) As
of March 31, 2019, amortization charges were recognized in the
amount of Ps. 687 in "Costs", Ps. 627 in "General and
administrative expenses" and
Ps.
1,108 in "Selling expenses", in the Statement of Income (Note
20).
12.
Financial
instruments by category
The
present note shows 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 see Note 14 to the Annual Financial Statements. Financial
assets and financial liabilities as of March 31, 2019 are as
follows:
IRSA
Inversiones y Representaciones Sociedad Anónima
|
|
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
|
|
|
|
|
|
|
|
March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets as per Statement of Financial Position
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other receivables (excluding the allowance for doubtful
accounts and other receivables)
|
31,713
|
|
-
|
-
|
-
|
|
31,713
|
|
7,846
|
|
39,559
|
|
Investments in financial assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
- Public companies’ securities
|
-
|
|
-
|
-
|
198
|
|
198
|
|
-
|
|
198
|
|
- Private companies’ securities
|
-
|
|
-
|
-
|
1,946
|
|
1,946
|
|
-
|
|
1,946
|
|
- Deposits
|
3,497
|
|
-
|
-
|
-
|
|
3,497
|
|
-
|
|
3,497
|
|
- Bonds
|
-
|
|
-
|
656
|
-
|
|
656
|
|
-
|
|
656
|
|
- Convertible Notes
|
-
|
|
-
|
-
|
1,012
|
|
1,012
|
|
-
|
|
1,012
|
|
- Investments in financial assets with
quotation
|
-
|
|
27,807
|
-
|
-
|
|
27,807
|
|
-
|
|
27,807
|
|
Derivative financial instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
- Foreign-currency future contracts
|
-
|
|
-
|
182
|
-
|
|
182
|
|
-
|
|
182
|
|
- Others
|
-
|
|
-
|
11
|
-
|
|
11
|
|
-
|
|
11
|
|
Restricted assets (i)
|
9,143
|
|
-
|
-
|
-
|
|
9,143
|
|
-
|
|
9,143
|
|
Financial assets held for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
- Clal
|
-
|
|
16,209
|
-
|
-
|
|
16,209
|
|
-
|
|
16,209
|
|
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
|
- Cash at bank and on hand
|
7,580
|
|
-
|
-
|
-
|
|
7,580
|
|
-
|
|
7,580
|
|
- Short-term investments
|
52,253
|
|
1,524
|
-
|
-
|
|
53,777
|
|
-
|
|
53,777
|
|
Total assets
|
104,186
|
|
45,540
|
849
|
3,156
|
|
153,731
|
|
7,846
|
|
161,577
|
|
|
Financial liabilities at amortized cost
|
|
Financial liabilities at fair value through profit or
loss
|
|
Subtotal financial liabilities
|
|
Non-financial liabilities
|
|
Total
|
|
|
|
|
Level 1
|
Level 2
|
Level 3
|
|
|
|
|
|
|
|
March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities as per Statement of Financial Position
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other payables
|
18,339
|
|
-
|
-
|
-
|
|
18,339
|
|
4,715
|
|
23,054
|
|
Borrowings (excluding finance leases)
|
316,162
|
|
-
|
-
|
-
|
|
316,162
|
|
-
|
|
316,162
|
|
Derivative financial instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
- Swaps
|
-
|
|
-
|
584
|
-
|
|
584
|
|
-
|
|
584
|
|
- Others
|
-
|
|
-
|
-
|
48
|
|
48
|
|
-
|
|
48
|
|
- Forwards
|
-
|
|
-
|
12
|
-
|
|
12
|
|
-
|
|
12
|
|
Total liabilities
|
334,501
|
|
-
|
596
|
48
|
|
335,145
|
|
4,715
|
|
339,860
|
IRSA
Inversiones y Representaciones Sociedad Anónima
Financial assets
and financial liabilities as of June 30, 2018 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, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets as per Statements of Financial Position
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other receivables (excluding the allowance for doubtful
accounts and other receivables)
|
26,548
|
|
-
|
-
|
-
|
|
26,548
|
|
7,461
|
|
34,009
|
|
Investments in financial assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
- Public companies’ securities
|
-
|
|
-
|
-
|
192
|
|
192
|
|
-
|
|
192
|
|
- Private companies’ securities
|
-
|
|
-
|
-
|
1,662
|
|
1,662
|
|
-
|
|
1,662
|
|
- Deposits
|
1,987
|
|
-
|
-
|
-
|
|
1,987
|
|
-
|
|
1,987
|
|
- Bonds
|
14
|
|
-
|
719
|
-
|
|
733
|
|
-
|
|
733
|
|
- Convertible Notes
|
-
|
|
-
|
-
|
1,129
|
|
1,129
|
|
-
|
|
1,129
|
|
- Investments in financial assets with
quotation
|
-
|
|
33,014
|
-
|
-
|
|
33,014
|
|
-
|
|
33,014
|
|
Derivative financial instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
- Foreign-currency future contracts
|
-
|
|
-
|
101
|
-
|
|
101
|
|
-
|
|
101
|
|
- Swaps
|
-
|
|
-
|
23
|
-
|
|
23
|
|
-
|
|
23
|
|
Restricted assets (i)
|
8,950
|
|
-
|
-
|
-
|
|
8,950
|
|
-
|
|
8,950
|
|
Financial assets held for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
- Clal
|
-
|
|
17,439
|
-
|
-
|
|
17,439
|
|
-
|
|
17,439
|
|
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
|
- Cash at bank and on hand
|
9,182
|
|
-
|
-
|
-
|
|
9,182
|
|
-
|
|
9,182
|
|
- Short term investments
|
40,322
|
|
3,602
|
-
|
-
|
|
43,924
|
|
-
|
|
43,924
|
|
Total assets
|
87,003
|
|
54,055
|
843
|
2,983
|
|
144,884
|
|
7,461
|
|
152,345
|
|
|
Financial liabilities at amortized cost
|
|
Financial liabilities at fair value through profit or
loss
|
|
Subtotal financial liabilities
|
|
Non-financial liabilities
|
|
Total
|
|
|
|
|
Level 1
|
Level 2
|
Level 3
|
|
|
|
|
|
|
|
June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities as per Statement of Financial Position
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other payables
|
14,892
|
|
-
|
-
|
-
|
|
14,892
|
|
11,225
|
|
26,117
|
|
Borrowings (excluding finance leases)
|
294,035
|
|
-
|
-
|
-
|
|
294,035
|
|
-
|
|
294,035
|
|
Derivative financial instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
- Foreign-currency future contracts
|
-
|
|
-
|
11
|
-
|
|
11
|
|
-
|
|
11
|
|
- Swaps
|
-
|
|
-
|
67
|
-
|
|
67
|
|
-
|
|
67
|
|
- Others
|
-
|
|
12
|
-
|
33
|
|
45
|
|
-
|
|
45
|
|
- Forwards
|
-
|
|
-
|
169
|
-
|
|
169
|
|
-
|
|
169
|
|
Total liabilities
|
308,927
|
|
12
|
247
|
33
|
|
309,219
|
|
11,225
|
|
320,444
|
(i)
Corresponds to deposits in guarantee 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 16).
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).
IRSA
Inversiones y Representaciones Sociedad Anónima
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, 2018.
As of
March 31, 2019, 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 which may be obtained from
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
|
|
Interest
rate swaps
|
|
Cash flows - Theoretical price
|
|
Interest
rate future contracts and cash flows
|
|
Level 2
|
|
-
|
|
Preferred
shares of Condor
|
|
Binomial tree – Theoretical price I
|
|
Underlying
asset price (Market price); share price volatility (historical) and
market interest rate (Libor rate curve).
|
|
Level 3
|
|
Underlying asset price 10 to 11
Share price volatility 58% to 78%
Market interest-rate
2.9%
to 3.5%
|
|
Promissory
note
|
|
Discounted cash flows - Theoretical price
|
|
Underlying
asset price (Market price); share price volatility (historical) and
market interest rate (Libor rate curve).
|
|
Level 3
|
|
Underlying asset price 10 to 11
Share price volatility 58% to 78%
Market interest-rate
2.9%
to 3.5%
|
|
Condor
warrants
|
|
Black-Scholes – Theoretical price
|
|
Underlying
asset price (Market price); share price volatility (historical) and
market interest rate (Libor rate curve).
|
|
Level 3
|
|
Underlying asset price 10 to 11
Share price volatility 58% to 78%
Market interest rate
2.9% to 3.5%
|
|
TGLT
Non-Convertible Notes
|
|
Black-Scholes – Theoretical price
|
|
Underlying
asset price (Market price); share price volatility (historical) and
market interest rate (Libor rate curve).
|
|
Level 3
|
|
Underlying asset price 10 to 13
Share price volatility 55% to 75%
Market interest rate
8% to 9%
|
|
Call
option of Arcos
|
|
Discounted cash flows
|
|
Projected
revenues and discounting rate.
|
|
Level 3
|
|
-
|
|
Investments
in financial assets - Other private companies’
securities
|
|
Cash flow / NAV - Theoretical price
|
|
Projected revenue
discounted at the discount rate /
The
value is calculated in accordance with shares in the equity funds
on the basis of their Financial Statements, based on fair value or
investments assessments.
|
|
Level
3
|
|
1 -
3.5
|
|
Investments
in financial assets - Others
|
|
Discounted cash flow - Theoretical price
|
|
Projected revenue
discounted at the discount rate /
The
value is calculated in accordance with shares in the equity funds
on the basis of their Financial Statements, based on fair value or
investment assessments.
|
|
Level
3
|
|
1 -
3.5
|
|
Derivative
financial instruments – Forwards
|
|
Theoretical price
|
|
Underlying
asset price and volatility
|
|
Level 2
and 3
|
|
-
|
The
following table presents the changes in Level 3 instruments as of
March 31, 2019 and June 30, 2018:
|
|
Investments in financial assets - Public companies’
Securities
|
|
Derivative financial instruments - Others
|
|
Investments in financial assets - Private companies’
Securities
|
|
Investments in financial assets - Convertible Notes
|
|
Total as of March 31, 2019
|
|
Total as of June 30, 2018
|
|
Balances at beginning of the period / year
|
192
|
|
(34)
|
|
1,750
|
|
1,042
|
|
2,950
|
|
1,910
|
|
Additions and acquisitions
|
-
|
|
-
|
|
110
|
|
-
|
|
110
|
|
826
|
|
Transfer to level 1
|
-
|
|
-
|
|
73
|
|
-
|
|
73
|
|
(179)
|
|
Currency translation adjustment
|
12
|
|
(4)
|
|
(9)
|
|
19
|
|
18
|
|
407
|
|
Deconsolidation
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(185)
|
|
Write off
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(95)
|
|
Gain / (loss) for the period / year (i)
|
(6)
|
|
(10)
|
|
22
|
|
(49)
|
|
(43)
|
|
266
|
|
Balances at the end of the period / year
|
198
|
|
(48)
|
|
1,946
|
|
1,012
|
|
3,108
|
|
2,950
|
(i)
Included within “Financial results, net” in the
Statements of Income.
IRSA
Inversiones y Representaciones Sociedad Anónima
Clal
As
mentioned in Note 13 to the Annual Financial Statements, IDBD is
subject to a judicial process on the sale of its equity interest in
Clal. Following completion of the transactions mentioned in note 4
to these financial statements, IDBD’s interest in Clal was
reduced to 25.3% of its share capital. (See note 30).
On
March 29, 2019, the ultimate controlling shareholder of the Company
has submitted to the Head of Capital Market, Insurance and Savings
Authority a request for a control permit in Clal and Clal Insurance
Company Ltd., a private company, approximately 99.8% of whose
shares are held by Clal.
Three
alternatives were submitted, the first one focused on receipt of a
control permit in Clal through a special purpose vehicle to be
formed by corporations controlled by the Company which would
acquire the participation of IDBD in Clal. In addition, the two
remaining alternatives, focuses on the method for holding Clal -
holding through IDBD or through Discount Investment Corporation
Ltd.
As of
the date of these financial statements, no response has been
received from the Capital Market, Insurance and Savings Authority
Commission.
13.
Trade
and other receivables
Group’s trade
and other receivables as of March 31, 2019 and June 30, 2018 are as
follows:
|
|
March 31, 2019
|
|
June 30, 2018
|
|
Sale, leases and services receivables
|
24,595
|
|
22,390
|
|
Less: Allowance for doubtful accounts
|
(1,912)
|
|
(1,147)
|
|
Total trade receivables
|
22,683
|
|
21,243
|
|
Prepaid expenses
|
5,897
|
|
5,302
|
|
Borrowings, deposits and other debit balances
|
5,864
|
|
3,255
|
|
Advances to suppliers
|
829
|
|
1,048
|
|
Tax receivables
|
415
|
|
506
|
|
Others
|
1,959
|
|
1,508
|
|
Total other receivables
|
14,964
|
|
11,619
|
|
Total trade and other receivables
|
37,647
|
|
32,862
|
|
Non-current
|
15,113
|
|
11,587
|
|
Current
|
22,534
|
|
21,275
|
|
Total
|
37,647
|
|
32,862
|
Movements on the
Group’s allowance for doubtful accounts were as
follows:
|
|
March 31, 2019
|
|
June 30, 2018
|
|
Beginning of the period / year
|
1,145
|
|
519
|
|
Adjustments previous periods (IFRS 9)
|
125
|
|
-
|
|
Additions
|
451
|
|
492
|
|
Recoveries
|
(39)
|
|
(44)
|
|
Currency translation adjustment
|
518
|
|
820
|
|
Deconsolidation
|
-
|
|
(209)
|
|
Receivables written off during the period/year as
uncollectable
|
(211)
|
|
(430)
|
|
Inflation adjustment
|
(77)
|
|
(1)
|
|
End of the period / year
|
1,912
|
|
1,147
|
The
creation and release of the allowance for doubtful accounts have
been included in “Selling expenses” in the Statement of
Income (Note 20).
IRSA
Inversiones y Representaciones Sociedad Anónima
14.
Cash
flow information
Following is a
detailed description of cash flows generated by the Group’s
operations for the nine-month periods ended March 31, 2019 and
2018:
|
|
Note
|
Nine months ended 03.31.2019
|
|
Nine months ended 03.31.2018
|
|
(Loss) / profit for the period
|
|
(9,065)
|
|
10,463
|
|
Profit for the period from discontinued operations
|
|
(309)
|
|
(1,924)
|
|
Adjustments for
:
|
|
|
|
|
|
Income tax
|
18
|
(1,615)
|
|
(4,681)
|
|
Amortization and depreciation
|
20
|
5,321
|
|
4,807
|
|
Loss from disposal of property, plant and equipment
|
|
-
|
|
54
|
|
Net (loss) / gain from fair value adjustment of investment
properties
|
|
4,674
|
|
(7,973)
|
|
Share-based compensation
|
|
32
|
|
65
|
|
Net gain from disposal of intangible assets
|
|
(9)
|
|
-
|
|
Goodwill impairment
|
|
118
|
|
-
|
|
Gain from disposal of subsidiary and associates
|
|
(608)
|
|
(576)
|
|
Gain from disposal of trading properties
|
|
(386)
|
|
-
|
|
Impairment of other assets
|
|
203
|
|
-
|
|
Financial results, net
|
|
12,422
|
|
10,667
|
|
Provisions and allowances
|
|
828
|
|
242
|
|
Share of profit of associates and joint ventures
|
7
|
1,213
|
|
(107)
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
(Increase) / decrease in inventories
|
|
(239)
|
|
1,296
|
|
Decrease / (increase) in trading properties
|
|
527
|
|
(7)
|
|
Increase in restricted assets
|
|
(130)
|
|
-
|
|
Decrease in trade and other receivables
|
|
616
|
|
1,353
|
|
Decrease in trade and other payables
|
|
(1,343)
|
|
(4,424)
|
|
(Decrease) / increase in salaries and social security
liabilities
|
|
(222)
|
|
378
|
|
Decrease in provisions
|
|
(204)
|
|
(248)
|
|
Net cash generated by continuing operating activities before income
tax paid
|
|
11,824
|
|
9,385
|
|
Net cash generated by discontinued operating activities before
income tax paid
|
|
579
|
|
438
|
|
Net cash generated by operating activities before income tax
paid
|
|
12,403
|
|
9,823
|
The
following table presents a detail of significant non-cash
transactions occurred in the nine-month periods ended March 31,
2019 and 2018:
|
|
|
Nine months ended 03.31.2019
|
|
Nine months ended 03.31.2018
|
|
Dividends distribution to non-controlling shareholders not yet
paid
|
|
-
|
|
1,802
|
|
Increase in investment properties through an increase in trade and
other payables
|
|
293
|
|
26
|
|
Decrease in investments in associates and joint ventures through a
reduction in borrowings
|
|
5
|
|
6
|
|
Increase in trade and other receivables through an increase in
investments in associates and joint ventures
|
277
|
|
120
|
|
Changes in non-controlling interest through a decrease in trade and
other receivable
|
|
-
|
|
2,136
|
|
Increase of intangibles through a decrease in properties for
sale
|
|
1
|
|
-
|
|
Increase in property, plant and equipment through an increase in
borrowings
|
|
-
|
|
305
|
|
Increase in properties for sale through an increase in
borrowings
|
|
67
|
|
9
|
|
Increase in investment properties through an increase in
borrowings
|
|
28
|
|
26
|
|
Increase in associates and joint ventures through a decrease in
derivative financial instruments and other receivables with related
parties
|
-
|
|
6
|
|
Decrease in associates and joint ventures through a reduction in
borrowings
|
|
-
|
|
294
|
|
Decrease in associates and joint ventures through an increase in
assets destined for sale
|
|
-
|
|
68
|
|
Increase of intangibles through a decrease in properties for
sale
|
|
-
|
|
34
|
|
Increase in other non-current receivables through an increase in
borrowings
|
|
-
|
|
169
|
|
Decrease in trade and other receivable through an increase in
investments in associates and joint ventures
|
|
5
|
|
-
|
|
Increase in property, plant and equipment through a decrease in
investment property
|
|
13
|
|
-
|
|
Increase in property, plant and equipment through an increase in
trade and other payables
|
|
934
|
|
-
|
|
Decrease in associates and joint ventures through an increase in
trade and other receivable
|
|
740
|
|
-
|
|
Decrease in investment in associates and joint ventures, through a
decrease in equity
|
|
99
|
|
-
|
|
Increase in intangible assets through an increase in trade and
other payables
|
|
211
|
|
-
|
|
Increase in properties for sale through a decrease in investment
properties
|
|
547
|
|
-
|
IRSA
Inversiones y Representaciones Sociedad Anónima
15.
Trade
and other payables
Group’s trade
and other payables as of March 31, 2019 and June 30, 2018 were as
follows:
|
|
March 31, 2019
|
|
June 30, 2018
|
|
Trade payables
|
13,642
|
|
14,441
|
|
Sales, rental and services payments received in
advance
|
2,381
|
|
4,831
|
|
Construction obligations
|
1,038
|
|
2,100
|
|
Accrued invoices
|
993
|
|
1,352
|
|
Deferred income
|
133
|
|
53
|
|
Total trade payables
|
18,187
|
|
22,777
|
|
Dividends payable to non-controlling shareholders
|
1,731
|
|
175
|
|
Tax payables
|
147
|
|
462
|
|
Construction obligations
|
477
|
|
741
|
|
Other payables
|
2,512
|
|
1,962
|
|
Total other payables
|
4,867
|
|
3,340
|
|
Total trade and other payables
|
23,054
|
|
26,117
|
|
Non-current
|
4,431
|
|
5,145
|
|
Current
|
18,623
|
|
20,972
|
|
Total
|
23,054
|
|
26,117
|
The
breakdown of the Group’s borrowings as of March 31, 2019 and
June 30, 2018 was as follows:
|
|
Total as of March 31, 2019 (ii)
|
|
Total as of June 30, 2018 (ii)
|
|
Fair value as of March 31, 2019
|
|
Fair value as of June 30, 2018
|
|
NCN
|
266,004
|
|
243,552
|
|
262,630
|
|
260,900
|
|
Bank loans
|
45,200
|
|
44,463
|
|
41,261
|
|
45,306
|
|
Bank overdrafts
|
755
|
|
953
|
|
671
|
|
954
|
|
Other borrowings (i)
|
4,219
|
|
5,090
|
|
5,768
|
|
6,776
|
|
Total borrowings
|
316,178
|
|
294,058
|
|
310,330
|
|
313,936
|
|
Non-current
|
268,138
|
|
257,647
|
|
|
|
|
|
Current
|
48,040
|
|
36,411
|
|
|
|
|
|
|
316,178
|
|
294,058
|
|
|
|
|
(i)
Includes finance leases in the amount of Ps. 16 and Ps. 23 as of
March 31, 2019 and June 30, 2018, respectively.
(ii)
Includes Ps. 279,719 and Ps. 257,272 as of March 31, 2019 and June
30, 2018, respectively, corresponding to the Operations Center in
Israel.
The
following table describes the Group’s issuance of debt during
the present period:
|
Entity
|
Class
|
Issuance / expansion date
|
Amount in original currency
|
Maturity date
|
Interest
|
Principal payment
|
Interest payment
|
|
|
nominal
|
|
Cellcom
|
SERIES K
|
Jul-18
|
NIS 220
|
05/07/2026
|
3.55% e.a.
|
Annual payments since 2021
|
annually
|
(1)
|
|
Cellcom
|
SERIES K
|
Dic-18
|
NIS 187
|
05/07/2026
|
3.55% e.a.
|
Annual payments since 2021
|
annually
|
|
|
Cellcom
|
SERIES L
|
Dic-18
|
NIS 213
|
05/01/2028
|
2.50% e.a.
|
Annual payments since 2023
|
annually
|
|
|
PBC
|
SERIES I
|
jul-18
|
NIS 507
|
29/06/2029
|
3.95% e.a.
|
At expiration
|
quarterlyl
|
(1)
|
|
Gav - Yam
|
SERIES A
|
jul-18
|
NIS 320
|
31/10/2023
|
3.55
%
e.a.
|
Annual payments since 2021
|
biannually
|
|
|
Gav - Yam
|
SERIES A
|
Dic-18
|
NIS 351
|
31/10/2023
|
3.55
%
e.a.
|
Annual payments since 2021
|
biannually
|
|
|
Gav - Yam
|
SERIES H
|
sep-18
|
NIS 596
|
30/06/2034
|
2.55% e.a.
|
At expiration
|
annually
|
(1)
|
(1)
Corresponds to an
expansion of the series.
On
August 9, 2018 the Board of Directors of IDBD resolved to perform a
partial prepayment of series M debentures of IDBD which took place
on August 28, 2018. The partial prepayment amounted to NIS 146
million (approximately Ps. 1,491 as of the date of issuance of
these financial statements) which represents a 14.02% of the
remaining amount of series M debentures.
IRSA
Inversiones y Representaciones Sociedad Anónima
The
table below shows the movements in the Group's provisions
categorized by type:
|
|
Nine month ended March 31, 2019
|
|
Year ended June 30, 2018
|
|
|
Legal claims (i)
|
|
Investments in associates and joint ventures (ii)
|
|
Site dismantling and remediation
|
|
Other provisions
|
|
Total
|
|
Total
|
|
Beginning of period / year
|
1,456
|
|
3,489
|
|
236
|
|
1,369
|
|
6,550
|
|
3,323
|
|
Additions
|
331
|
|
383
|
|
-
|
|
155
|
|
869
|
|
3,877
|
|
Incorporated by business combination
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
17
|
|
Recovery
|
(70)
|
|
-
|
|
-
|
|
-
|
|
(70)
|
|
(356)
|
|
Used during the period / year
|
(167)
|
|
-
|
|
(10)
|
|
-
|
|
(177)
|
|
(313)
|
|
Deconsolidation
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(656)
|
|
Inflation adjustment
|
(31)
|
|
-
|
|
-
|
|
-
|
|
(31)
|
|
(14)
|
|
Currency translation adjustment
|
117
|
|
209
|
|
13
|
|
291
|
|
630
|
|
672
|
|
End of period / year
|
1,636
|
|
4,081
|
|
239
|
|
1,815
|
|
7,771
|
|
6,550
|
|
Non-current
|
|
|
|
|
|
|
|
|
6,100
|
|
5,051
|
|
Current
|
|
|
|
|
|
|
|
|
1,671
|
|
1,499
|
|
Total
|
|
|
|
|
|
|
|
|
7,771
|
|
6,550
|
(i)
Additions and
recoveries are included in "Other operating results,
net".
(ii)
Corresponds to
investments in New Lipstick and Puerto Retiro, companies that have
negative net worth. The increases and recoveries are 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.
The
details of the Group’s income tax, is as
follows:
|
|
March 31, 2019
|
|
March 31, 2018
|
|
Current income tax
|
(967)
|
|
(962)
|
|
Deferred income tax
|
2,582
|
|
5,643
|
|
Income tax from continuing operations
|
1,615
|
|
4,681
|
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 nine-month periods ended March 31, 2019
and 2018:
|
|
Nine months ended March 31, 2019
|
|
Nine months ended March 31, 2018
|
|
Profit from continuing operations at tax rate applicable in the
respective countries (*)
|
3,073
|
|
(1,203)
|
|
Permanent differences:
|
|
|
|
|
Share of profit of associates and joint ventures
|
64
|
|
(17)
|
|
Unrecognized tax loss carryforwards (i)
|
(1,131)
|
|
(2,002)
|
|
Changes in fair value of financial instruments
|
-
|
|
370
|
|
Result of exposure to permanent inflation
|
(405)
|
|
768
|
|
Tax rate differential
|
846
|
|
5,942
|
|
Non-taxable profit / (loss), non-deductible expenses and
others
|
(832)
|
|
823
|
|
Income tax from continuing operations
|
1,615
|
|
4,681
|
(i)
Corresponds
principally to holding companies in Israel.
IRSA
Inversiones y Representaciones Sociedad Anónima
The
gross movement in the deferred income tax account is as
follows:
|
|
March 31, 2019
|
|
June 30, 2018
|
|
Beginning of period / year
|
(37,266)
|
|
(42,507)
|
|
Adjustments previous periods (IFRS 9 and 15)
|
(64)
|
|
-
|
|
Use of tax losses
|
-
|
|
4
|
|
Currency translation adjustment
|
(683)
|
|
(5,454)
|
|
Incorporated by business combination
|
-
|
|
4,247
|
|
Deferred income tax charge
|
2,582
|
|
6,444
|
|
End of period / year
|
(35,431)
|
|
(37,266)
|
|
Deferred income tax assets
|
414
|
|
509
|
|
Deferred income tax liabilities
|
(35,845)
|
|
(37,775)
|
|
Deferred income tax liabilities, net
|
(35,431)
|
|
(37,266)
|
|
|
Nine months ended March 31, 2019
|
|
Nine months ended March 31, 2018
|
|
Income from communication services
|
20,479
|
|
17,528
|
|
Rental and services income
|
14,481
|
|
13,294
|
|
Sale of communication equipment
|
6,655
|
|
6,072
|
|
Sale of trading properties and developments
|
4,244
|
|
851
|
|
Revenue from hotels operation and tourism services
|
1,653
|
|
1,294
|
|
Other revenues
|
656
|
|
280
|
|
Total Group’s revenues
|
48,168
|
|
39,319
|
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 March 31, 2019
|
|
Total as of March 31, 2018
|
|
Cost of sale of goods and services
|
8,595
|
|
-
|
|
-
|
|
8,595
|
|
5,103
|
|
Salaries, social security costs and other personnel
expenses
|
3,012
|
|
1,989
|
|
2,364
|
|
7,365
|
|
6,708
|
|
Depreciation and amortization
|
3,259
|
|
894
|
|
1,168
|
|
5,321
|
|
4,807
|
|
Fees and payments for services
|
2,697
|
|
1,299
|
|
88
|
|
4,084
|
|
3,367
|
|
Maintenance, security, cleaning, repairs and others
|
2,287
|
|
339
|
|
182
|
|
2,808
|
|
2,245
|
|
Advertising and other selling expenses
|
309
|
|
8
|
|
1,136
|
|
1,453
|
|
1,875
|
|
Taxes, rates and contributions
|
443
|
|
42
|
|
258
|
|
743
|
|
746
|
|
Interconnection and roaming expenses
|
2,915
|
|
-
|
|
-
|
|
2,915
|
|
2,516
|
|
Fees to other operators
|
4,138
|
|
-
|
|
-
|
|
4,138
|
|
2,997
|
|
Director´s fees
|
-
|
|
386
|
|
-
|
|
386
|
|
279
|
|
Leases and service charges
|
60
|
|
16
|
|
184
|
|
260
|
|
255
|
|
Allowance for doubtful accounts, net
|
-
|
|
9
|
|
396
|
|
405
|
|
297
|
|
Other expenses
|
1,031
|
|
451
|
|
255
|
|
1,737
|
|
1,745
|
|
Total as of March 31, 2019
|
28,746
|
|
5,433
|
|
6,031
|
|
40,210
|
|
|
|
Total as of March 31, 2018
|
22,489
|
|
4,790
|
|
5,661
|
|
|
|
32,940
|
21.
Cost
of goods sold and services provided
|
|
Total as of March 31, 2019
|
|
Total as of March 31, 2018
|
|
Inventories at the beginning of the period (*)
|
15,022
|
|
19,089
|
|
Adjustments previous periods (IFRS 15)
|
(5,480)
|
|
-
|
|
Purchases and expenses (**)
|
28,225
|
|
70,547
|
|
Capitalized finance costs
|
67
|
|
9
|
|
Currency translation adjustment
|
(250)
|
|
4,388
|
|
Transfers
|
(546)
|
|
3
|
|
Disposals
|
(830)
|
|
-
|
|
Transfers to investment properties
|
-
|
|
(746)
|
|
Inventories at the end of the period (*)
|
(7,462)
|
|
(17,901)
|
|
Total costs
|
28,746
|
|
75,389
|
IRSA
Inversiones y Representaciones Sociedad Anónima
The
following table presents the composition of the Group’s
inventories as of March 31, 2019 and June 30, 2018:
|
|
Total as of March 31, 2019
|
|
Total as of March 31, 2018
|
|
Real estate
|
6,263
|
|
14,161
|
|
Telecommunications
|
1,182
|
|
842
|
|
Others
|
17
|
|
19
|
|
Total inventories at the end of the period (*)
|
7,462
|
|
15,022
|
(*)
Inventories includes trading properties and
inventories.
(**)
Includes the cost of goods sold of Shufersal, which were
reclassified to discontinued operations in an amount of Ps. 52,900
for March 31, 2018.
22.
Other
operating results, net
|
|
Nine months ended March 31, 2019
|
|
Nine months ended March 31, 2018
|
|
Gain from disposal of subsidiary and associates (1)
|
608
|
|
576
|
|
Donations
|
(109)
|
|
(96)
|
|
Lawsuits and other contingencies
|
(37)
|
|
697
|
|
Others
|
(432)
|
|
(7)
|
|
Total other operating results, net
|
30
|
|
1,170
|
(1)
As of March 31,
2019 and 2018 includes the result from the sale of the Group´s
equity interest in Cyber Secdo and Rimon, and Cloudyn
respectively.
23.
Financial
results, net
|
|
Nine months ended March 31, 2019
|
|
Nine months ended March 31, 2018
|
|
Finance income:
|
|
|
|
|
- Interest income
|
949
|
|
920
|
|
- Foreign exchange gain
|
725
|
|
(216)
|
|
- Dividend income
|
50
|
|
99
|
|
- Other finance income
|
331
|
|
-
|
|
Total finance income
|
2,055
|
|
803
|
|
Finance costs:
|
|
|
|
|
- Interest expenses
|
(11,578)
|
|
(9,118)
|
|
- Loss on debt swap
|
-
|
|
(3,931)
|
|
- Foreign exchange loss
|
(2,815)
|
|
(353)
|
|
- Other finance costs
|
(368)
|
|
(421)
|
|
Subtotal finance costs
|
(14,761)
|
|
(13,823)
|
|
Capitalized finance costs
|
95
|
|
22
|
|
Total finance costs
|
(14,666)
|
|
(13,801)
|
|
Other financial results:
|
|
|
|
|
- Fair value gain of financial assets and liabilities at fair
value through profit or loss, net
|
(328)
|
|
1,606
|
|
- Gain from derivative financial instruments,
net
|
409
|
|
12
|
|
Total other financial results
|
81
|
|
1,618
|
|
-
Inflation adjustment
|
(560)
|
|
(391)
|
|
Total financial results, net
|
(13,090)
|
|
(11,771)
|
24.
Related
party transactions
The
following is a summary of the balances with related parties as of
March 31, 2019 and June 30, 2018:
|
Item
|
|
March 31, 2019
|
|
June 30, 2018
|
|
Trade and other receivables
|
|
1,305
|
|
1,064
|
|
Investments in financial assets
|
|
1,398
|
|
488
|
|
Trade and other payables
|
|
(300)
|
|
(272)
|
|
Borrowings
|
|
(52)
|
|
(13)
|
|
Total
|
|
2,351
|
|
1,267
|
IRSA
Inversiones y Representaciones Sociedad Anónima
|
Related party
|
|
March 31, 2019
|
|
June 30, 2018
|
|
Description of transaction
|
|
Item
|
|
Manibil S.A.
|
|
-
|
|
102
|
|
Contributions in advance
|
|
Trade and other receivable
|
|
New Lipstick LLC
|
|
894
|
|
832
|
|
Loans granted
|
|
Trade and other receivable
|
|
|
|
10
|
|
10
|
|
Reimbursement of expenses receivable
|
|
Trade and other receivable
|
|
Condor
|
|
15
|
|
-
|
|
Dividends receivable
|
|
Trade and other receivable
|
|
|
|
198
|
|
192
|
|
Public companies securities
|
|
Investment in financial assets
|
|
Puerto Retiro
|
|
14
|
|
-
|
|
Loans granted
|
|
Trade and other receivable
|
|
Lipstick management
|
|
(45)
|
|
-
|
|
Loans granted
|
|
Borrowings
|
|
LRSA
|
|
2
|
|
41
|
|
Leases and/or rights of use receivable
|
|
Trade and other receivable
|
|
|
|
31
|
|
(1)
|
|
Reimbursement of expenses
|
|
Trade and other receivable
|
|
|
|
1
|
|
-
|
|
Loans granted
|
|
Trade and other receivable
|
|
|
|
277
|
|
10
|
|
Dividends receivable
|
|
Trade and other receivable
|
|
Other associates and joint ventures
|
|
1
|
|
1
|
|
Reimbursement of expenses receivable
|
|
Trade and other receivable
|
|
|
|
(8)
|
|
(14)
|
|
Loans obtained
|
|
Borrowings
|
|
|
|
-
|
|
(1)
|
|
Leases and/or rights of use payable
|
|
Trade and other payables
|
|
|
|
9
|
|
6
|
|
Leases and/or rights of use receivable
|
|
Trade and other receivable
|
|
|
|
-
|
|
1
|
|
Management fees
|
|
Trade and other receivable
|
|
|
|
-
|
|
11
|
|
Loans granted
|
|
Trade and other receivable
|
|
|
|
1
|
|
1
|
|
Long-term incentive plan
|
|
Trade and other receivable
|
|
|
|
(1)
|
|
(1)
|
|
Reimbursement of expenses payable
|
|
Trade and other receivable
|
|
Total associates and joint ventures
|
|
1,399
|
|
1,190
|
|
|
|
|
|
Cresud
|
|
(52)
|
|
(23)
|
|
Reimbursement of expenses receivable
|
|
Trade and other payables
|
|
|
|
(88)
|
|
(80)
|
|
Corporate services receivable
|
|
Trade and other payables
|
|
|
|
1,200
|
|
296
|
|
NCN
|
|
Investment in financial assets
|
|
|
|
6
|
|
(3)
|
|
Leases and/or rights of use receivable
|
|
Trade and other payables
|
|
|
|
(1)
|
|
(31)
|
|
Management fee
|
|
Trade and other payables
|
|
|
|
(3)
|
|
(4)
|
|
Share based payments
|
|
Trade and other payables
|
|
Total parent company
|
|
1,062
|
|
155
|
|
|
|
|
|
RES LP
|
|
-
|
|
3
|
|
Reimbursement of expenses receivable
|
|
Trade and other receivable
|
|
|
|
-
|
|
27
|
|
Dividends receivables
|
|
Trade and other receivable
|
|
Directors
|
|
(150)
|
|
(118)
|
|
Fees for services received
|
|
Trade and other payables
|
|
Others (1)
|
|
-
|
|
1
|
|
Leases and/or rights of use receivable
|
|
Trade and other receivable
|
|
|
|
38
|
|
-
|
|
Reimbursement of expenses receivable
|
|
Trade and other receivable
|
|
|
|
3
|
|
10
|
|
Fees receivable
|
|
Trade and other receivable
|
|
|
|
(1)
|
|
(1)
|
|
Fees for legal services
|
|
Trade and other payables
|
|
Total directors and others
|
|
(110)
|
|
(78)
|
|
|
|
|
|
Total at the end of the period/year
|
|
2,351
|
|
1,267
|
|
|
|
|
(1)
It includes CAMSA,
Estudio Zang, Bergel & Viñes, Austral Gold, Fundación
IRSA, Hamonet S.A., CAM Communication LP, Gary Gladstein and
Fundación Museo de los Niños.
IRSA
Inversiones y Representaciones Sociedad Anónima
The following is a summary of the results with related parties for
the nine-month periods ended March 31, 2019 and 2018:
|
Related party
|
|
Nine months ended March 31, 2019
|
|
Nine months ended March 31, 2018
|
Description of transaction
|
|
BACS
|
|
26
|
|
-
|
Leases and/or rights of use
|
|
Manibil
|
|
19
|
|
-
|
Corporate services
|
|
Tarshop
|
|
26
|
|
-
|
Leases and/or rights of use
|
|
|
|
1
|
|
-
|
Commisions
|
|
La Rural S.A.
|
|
24
|
|
-
|
Leases and/or rights of use
|
|
Condor
|
|
-
|
|
303
|
Financial operations
|
|
ISPRO - Mehadrin
|
|
-
|
|
116
|
Corporate services
|
|
Other associates anf joint ventures
|
|
7
|
|
(2)
|
Financial operations
|
|
|
15
|
|
22
|
Leases and/or rights of use
|
|
|
-
|
|
3
|
Corporate services
|
|
Total associates and joint ventures
|
|
118
|
|
442
|
|
|
Cresud
|
|
17
|
|
8
|
Leases and/or rights of use
|
|
|
|
(254)
|
|
(259)
|
Corporate services
|
|
|
|
327
|
|
88
|
Financial operations
|
|
Total parent company
|
|
90
|
|
(163)
|
|
|
IFISA
|
|
-
|
|
87
|
Financial operations
|
|
Directors
|
|
(360)
|
|
(127)
|
Fees and remunerations
|
|
Taaman
|
|
-
|
|
176
|
Corporate services
|
|
Willfood
|
|
-
|
|
207
|
Corporate services
|
|
Others (1)
|
|
-
|
|
6
|
Corporate services
|
|
|
|
2
|
|
2
|
Leases and/or rights of use
|
|
|
|
7
|
|
6
|
Financial operations
|
|
|
|
(11)
|
|
(17)
|
Donations
|
|
|
|
-
|
|
(5)
|
Legal services
|
|
Total others
|
|
(362)
|
|
335
|
|
|
Total at the end of the period
|
|
(154)
|
|
614
|
|
(1)
It includes
Isaac
Elsztain e Hijos, CAMSA. Hamonet S.A., Ramat Hanassi, Estudio Zang,
Bergel y Viñes, Austral Gold, La Rural, New Lipstick, Condor
and Fundación IRSA.
The
following is a summary of the transactions with related parties for
the nine-month periods ended March 31, 2019 and 2018:
|
Related party
|
|
Nine months ended March 31, 2019
|
|
Nine months ended March 31, 2018
|
|
Description of the operation
|
|
La Rural S.A.
|
|
277
|
|
20
|
|
Dividends received
|
|
Nuevo Puerto Santa Fe S.A.
|
|
10
|
|
-
|
|
Dividends received
|
|
Condor
|
|
62
|
|
-
|
|
Dividends received
|
|
Mehadrin
|
|
61
|
|
-
|
|
Dividends received
|
|
Manaman
|
|
68
|
|
-
|
|
Dividends received
|
|
Emco
|
|
475
|
|
-
|
|
Dividends received
|
|
Nave by the sea
|
|
31
|
|
-
|
|
Dividends received
|
|
Total dividends received
|
|
984
|
|
20
|
|
|
|
Cresud
|
|
1,053
|
|
1,365
|
|
Dividends distributed
|
|
Helmir
|
|
7
|
|
8
|
|
Dividends distributed
|
|
Total dividends distributed
|
|
1,060
|
|
1,373
|
|
|
|
Manibil
|
|
-
|
|
68
|
|
Capital contributions
|
|
Quality
|
|
25
|
|
-
|
|
Capital contributions
|
|
Total capital contributions
|
|
25
|
|
68
|
|
|
|
IFISA
|
|
-
|
|
3,047
|
|
Purchase of non-controlling interest
|
|
Total other transactions
|
|
-
|
|
3,047
|
|
|
25.
CNV
General Resolution N° 622
As
required by Section 1°, Chapter III, Title IV of CNV General
Resolution N° 622, below there is a detail of the notes to the
Unaudited Condensed Interim Consolidated Financial Statements that
disclose the information required by the Resolution in
Exhibits.
|
Exhibit
A - Property, plant and equipment
|
Note 8
Investment properties and Note 9 Property, plant and
equipment
|
|
Exhibit
B - Intangible assets
|
Note 11
Intangible assets
|
|
Exhibit
C - Equity investments
|
Note 7
Equity interest in associates and joint ventures
|
|
Exhibit
D - Other investments
|
Note 12
Financial instruments by category
|
|
Exhibit
E - Provisions
|
Note 17
Provisions
|
|
Exhibit
F - Cost of sales and services provided
|
Note 21
Cost of goods sold and services provided
|
|
Exhibit
G - Foreign currency assets and liabilities
|
Note 26
Foreign currency assets and liabilities
|
IRSA Inversiones y Representaciones Sociedad
Anónima
26.
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 03.31.19
|
Total as of 06.30.18
|
|
Assets
|
|
|
|
|
|
Trade and other receivables
|
|
|
|
|
|
US Dollar
|
38
|
43.150
|
1,630
|
1,710
|
|
Euros
|
4
|
48.376
|
181
|
255
|
|
Receivables with related parties:
|
|
|
|
|
|
US Dollar
|
3
|
43.350
|
136
|
2,086
|
|
Total trade and other receivables
|
|
|
1,947
|
4,051
|
|
Investments in financial assets
|
|
|
|
|
|
US Dollar
|
80
|
43.150
|
3,472
|
5,112
|
|
Pounds
|
1
|
56.026
|
45
|
55
|
|
Investments with related parties:
|
|
|
|
|
|
US Dollar
|
-
|
43.350
|
-
|
488
|
|
Total investments in financial assets
|
|
|
3,517
|
5,655
|
|
Derivative financial instruments
|
|
|
|
|
|
US Dollar
|
1
|
43.150
|
60
|
46
|
|
Total Derivative financial instruments
|
|
|
60
|
46
|
|
Cash and cash equivalents
|
|
|
|
|
|
US Dollar
|
220
|
43.150
|
9,494
|
11,006
|
|
Euros
|
1
|
48.376
|
72
|
94
|
|
Total cash and cash equivalents
|
|
|
9,566
|
11,100
|
|
Total Assets
|
|
|
15,090
|
20,852
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Trade and other payables
|
|
|
|
|
|
US Dollar
|
175
|
43.350
|
7,583
|
4,279
|
|
Euros
|
1
|
43.163
|
60
|
125
|
|
Payables to related parties:
|
|
|
|
|
|
US Dollar
|
(0)
|
43.350
|
(1)
|
36
|
|
Total Trade and other payables
|
|
|
7,642
|
4,440
|
|
Borrowings
|
|
|
|
|
|
US Dollar
|
814
|
43.350
|
35,285
|
35,618
|
|
Borrowings with related parties
|
|
|
|
|
|
US Dollar
|
1
|
43.350
|
45
|
-
|
|
Total Borrowings
|
|
|
35,330
|
35,618
|
|
Derivative financial instruments
|
|
|
|
|
|
US Dollar
|
1
|
43.350
|
24
|
-
|
|
Total derivative financial instruments
|
|
|
24
|
-
|
|
Total Liabilities
|
|
|
42,996
|
40,058
|
(1)
Considering
foreign currencies those that differ from each Group’s
subsidiaries functional currency at each
period/year-end.
(2)
Stated in millions
of the corresponding in foreign currency.
(3)
Exchange rates as
of March 31, 2019 and June 30, 2018, respectively according to
Banco Nación Argentina.
IRSA Inversiones y Representaciones Sociedad
Anónima
27.
Groups
of assets and liabilities held for sale
As
mentioned in Note 4.F. to the Annual Financial Statements, the
Group has certain assets and liabilities classified as held for
sale. The following table shows the main ones:
|
|
March 31, 2019
|
|
June 30, 2018
|
|
Property, plant and equipment
|
4,524
|
|
3,839
|
|
Intangible assets
|
95
|
|
46
|
|
Investments in associates
|
155
|
|
67
|
|
Deferred income tax assets
|
132
|
|
147
|
|
Investment properties
|
1,111
|
|
741
|
|
Income tax credits
|
11
|
|
-
|
|
Trade and other receivables
|
1,683
|
|
2,055
|
|
Cash and cash equivalents
|
1,026
|
|
494
|
|
Total assets held-for-sale
|
8,737
|
|
7,389
|
|
Trade and other payables
|
3,187
|
|
2,785
|
|
Employee benefits
|
215
|
|
213
|
|
Deferred income tax liability
|
-
|
|
23
|
|
Borrowings
|
1,993
|
|
1,594
|
|
Total liabilities held-for-sale
|
5,395
|
|
4,615
|
|
Total net assets held-for-sale
|
3,342
|
|
2,774
|
28.
Results
from discontinued operations
The
results from operations of Shufersal for the period ended March 31,
2018 and the results from Israir and IDB Tourism for both periods;
have been reclassified in the Statements of Income under
discontinued operations.
|
|
Nine months ended March 31, 2019
|
|
Nine months ended March 31, 2018
|
|
Revenues
|
10,184
|
|
79,910
|
|
Costs
|
(8,997)
|
|
(60,246)
|
|
Gross profit
|
1,187
|
|
19,664
|
|
Net gain from fair value adjustment of investment
properties
|
-
|
|
268
|
|
General and administrative expenses
|
(411)
|
|
(1,401)
|
|
Selling expenses
|
(461)
|
|
(15,071)
|
|
Other operating results, net
|
(111)
|
|
(271)
|
|
Profit from operations
|
204
|
|
3,189
|
|
Share of profit of associates and joint ventures
|
40
|
|
104
|
|
Profit before financial results and income tax
|
244
|
|
3,293
|
|
Finance income
|
64
|
|
98
|
|
Finance cost
|
(77)
|
|
(875)
|
|
Other financial results
|
36
|
|
(112)
|
|
Financial results, net
|
23
|
|
(889)
|
|
Profit before income tax
|
267
|
|
2,404
|
|
Income tax
|
42
|
|
(480)
|
|
Profit from discontinued operations
|
309
|
|
1,924
|
|
|
|
|
|
|
(Loss) / profit for the period from discontinued operations
attributable to:
|
|
|
|
|
Equity holders of the parent
|
348
|
|
786
|
|
Non-controlling interest
|
(39)
|
|
1,138
|
|
Profit per share from discontinued operations attributable to
equity holders of the parent:
|
|
|
|
|
Basic
|
0.61
|
|
1.37
|
|
Diluted
|
0.60
|
|
1.36
|
As of
March 31, 2018, Ps. 71,469 of the total revenues from discontinued
operations and Ps. 1,603 of the total profit from discontinued
operations correspond to Shufersal.
29.
Other
relevant events of the period
IRSA Class action
On
September 10, 2018, the New York Court issued an order granting the
motion to dismiss the IRSA Case in its entirety.
IRSA Inversiones y Representaciones Sociedad
Anónima
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 Case is fully and finally resolved. The Cresud Case awaits an
entry of judgment by the court and the companies hold that such
allegations are meritless and will continue making a strong defense
in that action.
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 with the District Court of Tel Aviv Yafo (the "Court")
against the Group; against Mr. 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.
The
Company 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, feels 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 had been filed, against the 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 73
million.
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 od DIC shares to DIL as described
in Note 4 in the annual financial statements (the
“transaction”) and that the controlling person of the
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 feels that it is
unfounded and that it will not change the fact that after the
making of the Transaction, IDBD complies with the provisions of the
Centralization Law, all as set forth in the Company's
reports.
IRSA Inversiones y Representaciones Sociedad
Anónima
Dividend distribution of the BHSA
On
Abril 10th, 2019, the shareholders of BHSA aproved a cash dividend
for an amount of Ps. 250. The Group has collected approximately Ps.
75.
Devaluation of the Argentine peso
As of
the date of issuance of these Financial Statements, the argentine
peso has suffered a devaluation against the US dollar and other
currencies, close to 4.38%, which has an impact on the figures
presented on these Financial Statements, mainly due to the exposure
to the revaluation of our financial assets and liabilities
nominated in foreign currency.
Agreements to the sale fo Clal shares
In
relation to IDB Development Corporation Ltd. ("IDBD") stake in Clal
Insurance Enterprise Holdings Ltd. ("Clal") and the instructions
given by the Capital Markets, Insurance and Savings Commission of
Israel, on May 2, 2019, IDBD has entered into sale agreements with
two unrelated third parties (the “Buyers”), according
to which each of the Buyers will acquire shares of Clal which
constitute approximately 4.99% of its issued capital, in
consideration of a cash payment of NIS 47.7 per share
(approximately Ps. 587 per share as of the date of the
transaction). Additionally, each of the Buyers was given an option
to acquire additional shares of Clal for approximately 3% of its
issued capital, for a period of 120 days, subject to the receipt of
a holding permit, at a price of NIS 50 per share.
On the
same date, IDBD also engaged, in an agreement with a third
unrelated buyer (the “Additional Buyer”), according to
which the Additional Buyer will receive an option, valid for a
period of 50 days, to acquire shares of Clal representative of
approximately 4.99% of its issued capital (and no less than 3% of
its issued capital), in consideration of NIS 47.7 per share
(approximately Ps. 587 per share as of the date of the
transaction). Subject to the exercise of the option by the
Additional Buyer, the price will be paid by the Additional Buyer
10% in cash and the remainder will be paid through a loan which
will be provided to the Additional Buyer by IDBD and/or by a
related entity thereof and/or by a banking corporation and/or
financial institution, under conditions which were agreed
upon.
The
Agreements include, inter alia, an undertaking by the Buyers and
the Additional Buyer not to sell the acquired shares during
agreed-upon periods. It is hereby clarified that each of the
Buyers, and the Additional Buyer, have declared and undertaken
towards IDBD that no arrangements or understandings exist between
them and the other buyers and/or the Additional Buyer (as
applicable) regarding the joint holding of the shares of Clal which
form the subject of the Agreements.
The
total scope of the shares of Clal which may be acquired by the
aforementioned three buyers, insofar as the three agreements will
be completed, and the options thereunder exercised, amounts to
approximately 18% of the issued capital of Clal Insurance
Enterprises.
The
Company’s engagement in the aforementioned agreements has
been approved by IDBD's Board of Directors.
Regarding swap
transactions which were executed by IDBD with respect to shares of
Clal (see note 4 to these financial statements and note 4 to the
anual consolidated financial statements), IDBD has requested the
Commissioner to provide his consent for the update of the terms, in
a manner which will allow the execution of the sale of shares of
Clal which forms the subject of the swap transactions through over
the counter transactions, to a particular buyer (instead of sale
through distribution of the shares), and which will also allow IDBD
to instruct the financial entities through which the swap
transactions were executed to execute the sales to the Buyers and
to the Additional Buyer.
Sale of Clal shares
On May
3, 2019, IDBD completed the sale of Clal shares representative of
4.99% of its share capital to one of the unrelated parties (the
“first buyer”), for an approximate amount of NIS 132
million, NIS 47.7 per share (approximately Ps. 1,623 per share on
the day of the transaction). The consideration with respect to the
Sold Shares will remain in the trust account which is pledged in
favor of the Company’s bond holders (Series M), and will
serve, in the Company’s discretion, to make a prepayment, or
to make payments in accordance with the amortization schedule of
the Company’s bonds.
IRSA Inversiones y Representaciones Sociedad
Anónima
In
addition, on May 2, 2019, the Swap Transaction with respect to
2,215,521 Clal shares, representative of approximately 4% of its
share capital was concluded, through the sale to the other
unrelated party (the "Second Purchaser"), according to a price per
share. In accordance with the agreement with the second Purchaser,
the early termination of the Swap Transaction will be implemented
as soon as possible with respect to the shares representing 1% of
Clal's capital stock, in order to complete the sale to this
Purchaser.
As a
consequence of the above mentioned sales, IDBD's holding in Clal
Insurance Enterprises was reduced to 20.3% of its share capital
(approximately 15.4% through a trustee) and the company owns
approximately an additional 25% through swaps transactions, which
will be reduced to 24% when the additional 1% sale to the Second
Buyer.
IRSA Inversiones y Representaciones S.A. – Non-Convertible
Notes Class I
On May
8, 2018, the Non-convertible notes Class I were auctioned, within
the framework of the Program approved by the Shareholders’
meeting for up to US$ 350 million. The liquidation will take place
on May 15, 2018. The following were the results of the
auction:
Non-convertible
notes Class I for an amount of nominal value US$ 96,347,038
maturing 18 months from the issuance date, integrated in dollars
and / or in kind with the non-convertible notes Class XVIII and
payable in dollars, which accrue a fixed interest of 10.00% per
annum, with interest payable quarterly. The capital will be
amortized in a single installment at maturity.
Free
translation from the original prepared in Spanish for publication
in Argentina