REGISTRATION STATEMENT PURSUANT TO SECTION 12 (b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
IRSA Inversiones y Representaciones Sociedad Anónima
Title of each class
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Name of each exchange on which registered
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Global Depositary Shares, each representing ten shares of Common Stock
|
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New York Stock Exchange
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Common Stock, par value one Peso per share
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New York Stock Exchange*
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Page number | ||
1 | ||
Item 1
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1 | |
Item 2
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1 | |
Item 3
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1 | |
1 | ||
4 | ||
4 | ||
4 | ||
Item 4
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23 | |
24 | ||
36 | ||
59 | ||
59 | ||
Item 4 A
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61 | |
Item 5
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61 | |
61 | ||
107 | ||
107 | ||
108 | ||
108 | ||
108 | ||
Item 6
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109 | |
109 | ||
112 | ||
113 | ||
113 | ||
114 | ||
Item 7
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114 | |
114 | ||
115 | ||
119 | ||
Item 8
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119 | |
119 | ||
122 | ||
Item 9
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122 | |
122 | ||
123 | ||
123 | ||
124 | ||
124 | ||
124 | ||
Item 10
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124 | |
124 | ||
124 | ||
128 | ||
128 | ||
133 | ||
137 | ||
137 | ||
137 | ||
137 | ||
Item 11
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137 | |
Item 12
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138 | |
138 | ||
138 | ||
138 | ||
138 | ||
138 | ||
Item 13
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138 | |
Item 14
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138 | |
138 | ||
Item 15
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139 | |
139 | ||
140 | ||
140 | ||
140 | ||
Item 16
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141 | |
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141 | |
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141 | |
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141 | |
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141 | |
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141 | |
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142 | |
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142 | |
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142 | |
143 | ||
Item 17
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143 | |
Item 18
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143 | |
Item 19
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143 |
·
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changes in general economic, business, political, legal, social or other conditions in Argentina or elsewhere in Latin America or changes in either developed or emerging markets;
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·
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changes in capital markets in general that may affect policies or attitudes toward lending to Argentina or Argentine companies;
|
·
|
inflation;
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·
|
fluctuations in interest rates;
|
·
|
current and future government regulation (including amendments to the Argentine Civil Code);
|
·
|
adverse legal or regulatory disputes or proceedings;
|
·
|
fluctuations and declines in the value of Argentine public debt;
|
·
|
government intervention in the private sector, including through nationalization, expropriation, labor regulation or other actions;
|
·
|
restrictions on transfer of foreign currencies;
|
·
|
competition in the shopping center sector, office or other commercial properties and related industries;
|
·
|
potential loss of significant tenants at our shopping centers;
|
·
|
our ability to timely transact in the Argentine real estate market;
|
·
|
our ability to meet our debt obligations;
|
·
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shifts in consumer purchasing habits and trends;
|
·
|
technological changes and our potential inability to implement new technologies;
|
·
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deterioration in regional and national business and economic conditions in Argentina;
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·
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fluctuations and declines in the exchange rate of the Peso;
|
·
|
risks related to our investment in Israel; and
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·
|
the risk factors discussed under “Risk Factors” beginning on page 4.
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ITEM 3.
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For the fiscal year ended June 30,
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||||||||||||||||||||
2015
|
2015
|
2014
|
2013
|
2012
|
||||||||||||||||
(in thousands of
US$) (ii)
|
(in thousands of Ps., except
ratios and per common share data) (i)
|
|||||||||||||||||||
Consolidated Statements of income
|
||||||||||||||||||||
Income from sales, rents and services
|
276,785 | 2,515,421 | 2,108,874 | 1,592,890 | 1,297,183 | |||||||||||||||
Income from common maintenance expenses collected and collective promotion fund (“FPC”)
|
97,624 | 887,208 | 736,302 | 594,290 | 493,133 | |||||||||||||||
Costs
|
(166,216 | ) | (1,510,574 | ) | (1,354,493 | ) | (1,087,611 | ) | (858,658 | ) | ||||||||||
Gross profit
|
208,193 | 1,892,055 | 1,490,683 | 1,099,569 | 931,658 | |||||||||||||||
Gain from disposal of investment properties
|
127,946 | 1,162,770 | 235,507 | 183,767 | 116,689 | |||||||||||||||
General and administrative expenses
|
(41,206 | ) | (374,481 | ) | (296,928 | ) | (194,841 | ) | (174,347 | ) | ||||||||||
Selling expenses
|
(21,289 | ) | (193,470 | ) | (146,236 | ) | (106,125 | ) | (84,773 | ) | ||||||||||
Other operating results, net
|
3,135 | 28,488 | (45,870 | ) | 93,268 | (32,446 | ) | |||||||||||||
Profit from operations
|
276,779 | 2,515,362 | 1,237,156 | 1,075,638 | 756,781 | |||||||||||||||
Share of (loss) /profit of associates and joint ventures
|
(112,551 | ) | (1,022,861 | ) | (413,771 | ) | (7,391 | ) | 11,660 | |||||||||||
Profit before financial results and income tax
|
164,228 | 1,492,501 | 823,385 | 1,068,247 | 768,441 | |||||||||||||||
Finance income
|
15,087 | 137,114 | 131,509 | 119,525 | 105,100 | |||||||||||||||
Finance cost
|
(121,828) | (1,107,173 | ) | (1,726,875 | ) | (772,412 | ) | (528,010 | ) | |||||||||||
Other financial results
|
3,949 | 35,893 | (123,903 | ) | 14,695 | (3,917 | ) | |||||||||||||
Financial results, net
|
(102,792 | ) | (934,166 | ) | (1,719,269 | ) | (638,192 | ) | (426,827 | ) | ||||||||||
Profit/ (loss) before income tax
|
61,436 | 558,335 | (895,884 | ) | 430,055 | 341,614 | ||||||||||||||
Income tax expense
|
(53,726 | ) | (488,266 | ) | 64,267 | (132,847 | ) | (116,938 | ) | |||||||||||
Total profit/ (loss) for the year
|
7,710 | 70,069 | (831,617 | ) | 297,208 | 224,676 | ||||||||||||||
Attributable to:
|
||||||||||||||||||||
Equity holders of the parent
|
(4,533 | ) | (41,193 | ) | (786,487 | ) | 238,737 | 203,891 | ||||||||||||
Non-controlling interest
|
12,243 | 111,262 | (45,130 | ) | 58,471 | 20,785 | ||||||||||||||
Profit per common share attributable to equity holders of the parent:
|
||||||||||||||||||||
Basic
|
(0.01 | ) | (0.07 | ) | (1.37 | ) | 0.41 | 0.35 | ||||||||||||
Diluted
|
(0.01 | ) | (0.07 | ) | (1.37 | ) | 0.41 | 0.35 | ||||||||||||
Consolidated Statements of Comprehensive Income
Profit/ (loss) for the year
|
7,710 | 70,069 | (831,617 | ) | 297,208 | 224,676 | ||||||||||||||
Other comprehensive income:
|
||||||||||||||||||||
Items that may be reclassified subsequently to profit or loss:
|
||||||||||||||||||||
Currency translation adjustment
|
(11,894 | ) | (108,097 | ) | 442,844 | 56,799 | 14,682 | |||||||||||||
Other comprehensive income for the year
|
(11,894 | ) | (108,097 | ) | 442,844 | 56,799 | 14,682 | |||||||||||||
Total other comprehensive income for the year
|
(4,184 | ) | (38,028 | ) | (388,773 | ) | 354,007 | 239,358 | ||||||||||||
Attributable to:
|
||||||||||||||||||||
Equity holders of the parent
|
(18,206 | ) | (165,457 | ) | (438,332 | ) | 287,926 | 218,393 | ||||||||||||
Non-controlling interest
|
14,022 | 127,429 | 49,559 | 66,081 | 20,965 | |||||||||||||||
CASH FLOW DATA
|
||||||||||||||||||||
Net cash generated from operating activities
|
91,757 | 833,888 | 1,021,979 | 863,373 | 691,882 | |||||||||||||||
Net cash used in investing activities
|
28,756 | 261,333 | (917,120 | ) | (45,892 | ) | (246,776 | ) | ||||||||||||
Net cash used in financing activities
|
(152,914 | ) | (1,389,685 | ) | (596,767 | ) | (306,268 | ) | (492,857 | ) |
For the fiscal year ended
|
As of
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|||||||||||||||||||||||
June 30,
|
July 1,
|
|||||||||||||||||||||||
2015
|
2015
|
2014
|
2013
|
2012
|
2011
|
|||||||||||||||||||
(in thousands of
US$)(ii)
|
(in thousands of Ps. except ratios) (i)
|
|||||||||||||||||||||||
Consolidated Statements of Financial Position
|
||||||||||||||||||||||||
ASSETS
|
||||||||||||||||||||||||
Non-current assets
|
||||||||||||||||||||||||
Investment properties
|
384,031 | 3,490,077 | 3,269,595 | 3,983,266 | 3,265,962 | 3,330,817 | ||||||||||||||||||
Property, plant and equipment
|
26,753 | 243,134 | 220,013 | 212,673 | 228,033 | 235,245 | ||||||||||||||||||
Trading properties
|
14,096 | 128,104 | 130,657 | 94,464 | 83,148 | 71,915 | ||||||||||||||||||
Intangible assets
|
14,019 | 127,409 | 124,085 | 172,878 | 122,614 | 125,125 | ||||||||||||||||||
Investment in associates and joint ventures
|
280,694 | 2,550,946 | 2,260,805 | 1,423,936 | 1,445,815 | 1,373,215 | ||||||||||||||||||
Deferred income tax assets
|
5,811 | 52,810 | 368,641 | 85,236 | 34,255 | 17,903 | ||||||||||||||||||
Income tax and Minimum Presumed Income Tax credit
|
11,941 | 108,522 | 110,185 | 130,086 | 103,263 | 78,387 | ||||||||||||||||||
Restricted assets
|
- | - | - | 10,881 | - | - | ||||||||||||||||||
Trade and other receivables
|
12,670 | 115,141 | 92,388 | 85,126 | 93,109 | 86,622 | ||||||||||||||||||
Investments in financial assets
|
77,300 | 702,503 | 274,716 | 267,455 | 655,660 | 432,676 | ||||||||||||||||||
Derivative financial instruments
|
22,712 | 206,407 | - | 21,208 | 18,434 | 60,442 | ||||||||||||||||||
Total non-current assets
|
850,028 | 7,725,053 | 6,851,085 | 6,487,209 | 6,050,293 | 5,812,347 | ||||||||||||||||||
Current Assets
|
||||||||||||||||||||||||
Trading properties
|
363 | 3,300 | 4,596 | 11,689 | 9,714 | 26,115 | ||||||||||||||||||
Inventories
|
2,506 | 22,770 | 16,963 | 16,321 | 15,659 | 6,820 | ||||||||||||||||||
Restricted assets
|
1,037 | 9,424 | - | 1,022 | - | - | ||||||||||||||||||
Income tax credit
|
2,092 | 19,009 | 15,866 | - | - | - | ||||||||||||||||||
Assets held for sale
|
- | - | 1,357,866 | - | - | - | ||||||||||||||||||
Trade and other receivables
|
126,548 | 1,150,070 | 706,846 | 769,333 | 475,877 | 419,995 | ||||||||||||||||||
Investments in financial assets
|
32,505 | 295,409 | 234,107 | 244,053 | 78,909 | 65,076 | ||||||||||||||||||
Derivative financial instruments
|
3,208 | 29,158 | 12,870 | - | - | - | ||||||||||||||||||
Cash and cash equivalents
|
41,283 | 375,180 | 609,907 | 796,902 | 259,169 | 301,559 | ||||||||||||||||||
Total Current Assets
|
209,542 | 1,904,320 | 2,959,021 | 1,839,320 | 839,328 | 819,565 | ||||||||||||||||||
TOTAL ASSETS
|
1,059,570 | 9,629,373 | 9,810,106 | 8,326,529 | 6,889,621 | 6,631,912 | ||||||||||||||||||
SHAREHOLDERS´ EQUITY
|
||||||||||||||||||||||||
Share capital
|
63,210 | 574,451 | 573,771 | 578,676 | 578,676 | 578,676 | ||||||||||||||||||
Treasury stock
|
465 | 4,225 | 4,905 | - | - | - | ||||||||||||||||||
Inflation adjustment of share capital and treasury stock
|
13,571 | 123,329 | 123,329 | 123,329 | 274,387 | 274,387 | ||||||||||||||||||
Share premium
|
87,271 | 793,123 | 793,123 | 793,123 | 793,123 | 793,123 | ||||||||||||||||||
Additional paid-in capital from treasury stock
|
796 | 7,233 | - | - | - | - | ||||||||||||||||||
Cost of treasury stock
|
(3,711 | ) | (33,729 | ) | (37,906 | ) | - | - | - | |||||||||||||||
Changes in non-controlling interest
|
(623 | ) | (5,659 | ) | (21,808 | ) | (20,782 | ) | (15,714 | ) | - | |||||||||||||
Cumulative translation adjustment
|
30,223 | 274,667 | 398,931 | 50,776 | 14,502 | - | ||||||||||||||||||
Reserve for share-based compensation
|
7,023 | 63,824 | 53,235 | 8,258 | 2,595 | - | ||||||||||||||||||
Legal reserve
|
12,857 | 116,840 | 116,840 | 85,140 | 71,136 | 57,031 | ||||||||||||||||||
Reserve for new developments
|
- | - | 413,206 | 492,441 | 419,783 | 391,262 | ||||||||||||||||||
Special reserve
|
421 | 3,824 | 375,487 | 395,249 | - | - | ||||||||||||||||||
Retained earnings
|
(4,447 | ) | (40,414 | ) | (784,869 | ) | 239,328 | 510,853 | 656,525 | |||||||||||||||
Equity attributable to equity holders of the parent
|
207,055 | 1,881,714 | 2,008,244 | 2,745,538 | 2,649,341 | 2,751,004 | ||||||||||||||||||
Non-controlling interest
|
41,444 | 376,644 | 548,352 | 385,151 | 390,428 | 331,609 | ||||||||||||||||||
TOTAL SHAREHOLDERS´ EQUITY
|
248,499 | 2,258,358 | 2,556,596 | 3,130,689 | 3,039,769 | 3,082,613 | ||||||||||||||||||
LIABILITIES
|
||||||||||||||||||||||||
Non-current liabilities
|
||||||||||||||||||||||||
Trade and other payables
|
28,018 | 254,628 | 202,652 | 211,118 | 166,656 | 149,355 | ||||||||||||||||||
Borrowings
|
411,095 | 3,736,028 | 3,756,003 | 2,922,642 | 2,048,397 | 1,725,272 | ||||||||||||||||||
Derivative financial instruments
|
29,165 | 265,056 | 320,847 | - | - | - | ||||||||||||||||||
Deferred income tax liabilities
|
5,660 | 51,440 | 345,607 | 395,936 | 411,232 | 485,032 | ||||||||||||||||||
Payroll and social security liabilities
|
244 | 2,220 | 3,749 | 3,160 | - | - | ||||||||||||||||||
Provisions
|
41,166 | 374,121 | 205,228 | 57,737 | 17,823 | 12,881 | ||||||||||||||||||
Total non-current liabilities
|
515,349 | 4,683,493 | 4,834,086 | 3,590,593 | 2,644,108 | 2,372,540 | ||||||||||||||||||
Current liabilities
|
||||||||||||||||||||||||
Trade and other payables
|
98,591 | 895,996 | 678,725 | 677,010 | 492,243 | 402,751 | ||||||||||||||||||
Income tax and Minimum Presumed Income Tax liabilities
|
14,897 | 135,380 | 64,677 | 90,916 | 113,552 | 69,226 | ||||||||||||||||||
Liabilities held for sale
|
- | - | 806,612 | - | - | - | ||||||||||||||||||
Salaries and social security liabilities
|
13,491 | 122,606 | 99,276 | 49,010 | 39,607 | 34,089 | ||||||||||||||||||
Derivative financial instruments
|
26,968 | 245,088 | 14,225 | 1,732 | - | - | ||||||||||||||||||
Borrowings
|
136,107 | 1,236,940 | 737,477 | 772,529 | 557,896 | 667,587 | ||||||||||||||||||
Provisions
|
5,668 | 51,512 | 18,432 | 14,050 | 2,446 | 3,106 | ||||||||||||||||||
Total current liabilities
|
295,722 | 2,687,522 | 2,419,424 | 1,605,247 | 1,205,744 | 1,176,759 | ||||||||||||||||||
TOTAL LIABILITIES
|
811,071 | 7,371,015 | 7,253,510 | 5,195,840 | 3,849,852 | 3,549,299 | ||||||||||||||||||
TOTAL SHAREHOLDERS EQUITY AND LIABILITIES
|
1,059,570 | 9,629,373 | 9.810.106 | 8.326.529 | 6.889.621 | 6.631.912 |
2015
|
2015
|
2014
|
2013
|
2012
|
||||||||||||||||
OTHER FINANCIAL DATA
|
(in thousands of US$) (ii)
|
(in thousands of Ps., except ratios, per common
share and per GDS data) (i)
|
||||||||||||||||||
Basic net income per common share
|
(0.01 | ) | (0.07 | ) | (1.37 | ) | 0.41 | 0.35 | ||||||||||||
Diluted net income/(loss) per common share
|
(0.01 | ) | (0.07 | ) | (1.37 | ) | 0.41 | 0.35 | ||||||||||||
Basic net income/(loss) per GDS
|
(0.08 | ) | (0.72 | ) | (13.70 | ) | 4.10 | 3.50 | ||||||||||||
Diluted net income per GDS
|
(0.08 | ) | (0.71 | ) | (13.70 | ) | 4.10 | 3.50 | ||||||||||||
Diluted weighted – average number of common shares
|
573,779,206 | 573,779,206 | 575,932,689 | 578,676,460 | 578,676,460 | |||||||||||||||
Depreciation and amortization
|
19,287 | 175,281 | 225,819 | 220,021 | 168,877 | |||||||||||||||
Capital expenditures
|
58,573 | 532,308 | 318,375 | 920,874 | 133,877 | |||||||||||||||
Working capital
|
(86,180 | ) | (783,202 | ) | 539,597 | 234,073 | (366,416 | ) | ||||||||||||
Ratio of current assets to current liabilities
|
0.71 | 0.71 | 1.22 | 1.15 | 0.70 | |||||||||||||||
Ratio of shareholders’ equity to total liabilities
|
0.31 | 0.31 | 0.35 | 0.60 | 0.79 | |||||||||||||||
Ratio of non current assets to total assets
|
0.80 | 0.80 | 0.70 | 0.78 | 0.88 | |||||||||||||||
Dividend paid
|
(7,614.44 | ) | (69,200 | ) | (113,251 | ) | (239,652 | ) | (262,724 | ) | ||||||||||
Dividends per common share
|
(0.01 | ) | (0.12 | ) | (0.20 | ) | (0.41 | ) | (0.45 | ) | ||||||||||
Dividends per GDS
|
(0.13 | ) | (1.20 | ) | (1.97 | ) | (4.14 | ) | (4.54 | ) | ||||||||||
Number of common shares outstanding
|
574,450,945 | 574,450,945 | 573,771,763 | 578,676,460 | 578,676,460 | |||||||||||||||
Capital Stock
|
63,210 | 574,451 | 573,771 | 578,676 | 578,676 |
Maximum(1)(2)
|
Minimum(1)(3)
|
Average(1)(4)
|
At closing(1)
|
|||||||||||||
Fiscal year ended June 30, 2011
|
4.0900 | 3.9110 | 3.9810 | 4.0900 | ||||||||||||
Fiscal year ended June 30, 2012
|
4.5070 | 4.0900 | 4.2808 | 4.5070 | ||||||||||||
Fiscal year ended June 30, 2013
|
5.3680 | 4.5050 | 4.8914 | 5.3680 | ||||||||||||
Fiscal year ended June 30, 2014
|
8.0830 | 5.3700 | 6.7657 | 8.0830 | ||||||||||||
Fiscal year ended June 30, 2015
|
9.0380 | 8.0850 | 8.5599 | 9.0380 | ||||||||||||
July 2015
|
9.1400 | 9.0430 | 9.0934 | 9.1400 | ||||||||||||
August 2015
|
9.2460 | 9.1450 | 9.1939 | 9.2460 | ||||||||||||
September 2015
|
9.3720 | 9.2540 | 9.3167 | 9.3720 | ||||||||||||
October 2015
|
9.4960 | 9.3800 | 9.4407 | 9.4960 | ||||||||||||
November 2015 (through November 12, 2015)
|
9.5650
|
9.5050
|
9.5337
|
9.5650
|
·
|
decline in our lease prices or increases in levels of default by our tenants due to recessions, increases in interest rates and other factors that we cannot control;
|
·
|
the accessibility and the attractiveness of the area where the shopping center is located;
|
·
|
the intrinsic attractiveness of the shopping center;
|
·
|
the flow of people and the level of sales of each shopping center rental unit;
|
·
|
increasing competition from internet sales;
|
·
|
the amount of rent collected from each shopping center rental unit;
|
·
|
changes in consumer demand and availability of consumer credit (considering the limits impose by the Central Bank to interest rates charged by financial institutions), both of which are highly sensitive to general macroeconomic conditions; and
|
·
|
fluctuations in occupancy levels in our shopping centers.
|
·
|
downturns in the national, regional and local economic climate;
|
·
|
volatility and decline in discretionary spending;
|
·
|
competition from other shopping centers and office, and commercial buildings;
|
·
|
local real estate market conditions, such as oversupply or reduction in demand for retail, office, or other commercial space;
|
·
|
decreases in consumption levels;
|
·
|
changes in interest rates and availability of financing;
|
·
|
the exercise by our tenants of their legal right to early termination of their leases;
|
·
|
vacancies, changes in market rental rates and the need to periodically repair, renovate and re-lease space;
|
·
|
increased operating costs, including insurance expense, salary increases, utilities, real estate taxes, state and local taxes and heightened security costs;
|
·
|
civil disturbances, earthquakes and other natural disasters, or terrorist acts or acts of war which may result in uninsured or underinsured losses;
|
·
|
significant expenditures associated with each investment, such as debt service payments, real estate taxes, insurance and maintenance costs which are generally not reduced when circumstances cause a reduction in revenues from a property;
|
·
|
declines in the financial condition of our tenants and our ability to collect rents from our tenants;
|
·
|
changes in our ability or our tenants’ ability to provide for adequate maintenance and insurance, possibly decreasing the useful life of and revenue from property;
|
·
|
changes in law or governmental regulations (such as those governing usage, zoning and real property taxes) or government action such as expropriation, confiscation or revocation of concessions; and
|
·
|
interpretation by judges of the New Civil Code (in force from August 1, 2015).
|
·
|
we may not be able to obtain financing for acquisitions on favorable terms;
|
·
|
acquired properties may fail to perform as expected;
|
·
|
the actual costs of repositioning or redeveloping acquired properties may be higher than our estimates; and
|
·
|
acquired properties may be located in new markets where we may have limited knowledge and understanding of the local economy, absence of business relationships in the area or unfamiliarity with local governmental and permitting procedures.
|
·
|
our estimates of the cost of improvements needed to bring the property up to established standards for the market may prove to be inaccurate;
|
·
|
properties we acquire may fail to achieve, within the time frames we project, the occupancy or rental rates we expect to achieve at the time we make the decision to acquire, which may result in the properties’ failure to achieve the returns we projected;
|
·
|
our pre-acquisition evaluation of the physical condition of each new investment may not detect certain defects or identify necessary repairs, which could significantly increase our total acquisition costs; and
|
·
|
our investigation of a property or building prior to its acquisition, and any representations we may receive from the seller of such building or property, may fail to reveal various liabilities, which could reduce the cash flow from the property or increase our acquisition cost.
|
·
|
liabilities for clean-up of undisclosed environmental contamination;
|
·
|
law reforms and governmental regulations (such as those governing usage, zoning and real property taxes); and
|
·
|
liabilities incurred in the ordinary course of business.
|
·
|
delay lease commencements;
|
·
|
decline to extend or renew leases upon expiration;
|
·
|
fail to make rental payments when due; or
|
·
|
close stores or declare bankruptcy.
|
·
|
a prohibition to include automatic price adjustment clauses based on inflation increases in lease agreements; and
|
·
|
the imposition of a two-year minimum lease term for all purposes, except in particular cases such as embassy, consulate or international organization venues, room with furniture for touristic purposes for less than three months, custody and bailment of goods, exhibition or offering of goods in fairs or in cases where due to the circumstances, the subject matter of the lease agreement requires a shorter term.
|
·
|
a decrease in demand for office space;
|
·
|
a deterioration in the financial condition of our tenants may result in defaults under leases due to bankruptcy, lack of liquidity or for other reasons;
|
·
|
difficulties or delays renewing leases or re-leasing space;
|
·
|
decreases in rents as a result of oversupply, particularly of newer buildings;
|
·
|
competition from developers, owners and operators of office properties and other commercial real estate, including sublease space available from our tenants; and
|
·
|
maintenance, repair and renovation costs incurred to maintain the competitiveness of our office buildings.
|
·
|
abandonment of development opportunities and renovation proposals;
|
·
|
construction costs of a project may exceed our original estimates for reasons including raises in interest rates or increases in the costs of materials and labor, making a project unprofitable;
|
·
|
occupancy rates and rents at newly completed properties may fluctuate depending on a number of factors, including market and economic conditions, resulting in lower than projected rental rates and a corresponding lower return on our investment;
|
·
|
pre-construction buyers may default on their purchase contracts or units in new buildings may remain unsold upon completion of construction;
|
·
|
the unavailability of favorable financing alternatives in the private and public debt markets;
|
·
|
sale prices for residential units may be insufficient to cover development costs;
|
·
|
construction and lease-up may not be completed on schedule, resulting in increased debt service expense and construction costs;
|
·
|
impossibility to obtain or delays in obtaining necessary zoning, land-use, building, occupancy and other required governmental permits and authorizations, or building moratoria and anti-growth legislation;
|
·
|
significant time lags between the commencement and completion of projects subjects us to greater risks due to fluctuation in the general economy;
|
·
|
construction may not be completed on schedule because of a number of factors, including weather, labor disruptions, construction delays or delays in receipt of zoning or other regulatory approvals, or man-made or natural disasters (such as fires, hurricanes, earthquakes or floods), resulting in increased debt service expense and construction costs;
|
·
|
general changes in our tenants’ demand for rental properties; and
|
·
|
we may incur capital expenditures that could result in considerable time consuming efforts and which may never be completed due to government restrictions.
|
·
|
our ability to form successful relationships with international and local operators to run our hotels;
|
·
|
changes in tourism and travel trends, including seasonal changes and changes due to pandemic outbreaks, such as the A H1N1 virus, a potential ebola outbreak, among others, or weather phenomena’s or other natural events, such as the eruption of the Puyehué and the Calbuco volcano in June 2011 and April 2015, respectively;
|
·
|
affluence of tourists, which can be affected by a slowdown in global economy; and
|
·
|
taxes and governmental regulations affecting wages, prices, interest rates, construction procedures and costs.
|
·
|
50% of our cumulative consolidated net income; or
|
·
|
75% of our cumulative consolidated net income if our consolidated interest coverage ratio for our most recent four consecutive fiscal quarters is at least 3.0 to 1; or
|
·
|
100% of cumulative consolidated net income if our consolidated interest coverage ratio for our most recent four consecutive fiscal quarters is at least 4.0 to 1; or
|
· | 100% of the aggregate net cash proceeds (with certain exceptions) and the fair market value of property other than cash received by us or by our restricted subsidiaries from (a) any contribution to our capital stock or the capital stock of our restricted subsidiaries or issuance and sale of our qualified capital stock or the qualified capital stock of our restricted subsidiaries subsequent to the issue of our notes due, (b) issuance and sale subsequent to the issuance of our notes due 2017 or our indebtedness or the indebtedness of our restricted subsidiaries that has been converted into or exchanged for our qualified capital stock, or (c) any reduction in our indebtedness or any restricted subsidiary, (d) any reduction in debt investment (other than permitted investments) and return on assets, or (e) any distribution received from non-restricted subsidiaries. |
·
|
As a result, we cannot assure you that in the future we will pay any dividends in respect of our common shares.
|
Significant acquisitions, dispositions and development of business
|
·
|
Appointment of Eduardo Sergio Elsztain as sole chairman of IDBD’s Board of Directors;
|
·
|
Dolphin’s commitment (directly or through any vehicle controlled by Eduardo Sergio Elsztain) to accelerate its obligation to exercise the Series 4 warrants for NIS150 million, and thus IDBD will have the possibility to require their exercise since May 20, 2015 (later it was clarified that this date would be no later than June 2, 2015) instead of on July 19, 2015, provided that before May 20, 2015, IDBD receives a written irrevocable commitment from the representatives of the IDBD bondholders to the effect that until July 20, 2015 they will not call a bondholders meeting (unless they are required to do so under the applicable laws) that includes in its agenda any of the following items:
|
i)
|
Appointment of advisers (financial, legal or otherwise);
|
ii)
|
Appointment of a committee representing IDBD’s bondholders (as defined below);
|
iii)
|
File legal actions against IDBD; and
|
iv)
|
Accelerate the maturity or demand immediate payment of any indebtedness of IDBD.
|
·
|
IDBD’s Board of Directors should set up a committee composed of two members of IDBD’s monitoring committee and two members of IDBD’s board appointed by Dolphin, which shall have the following duties, subject to the applicable law (later it was clarified that such committee shall not have the authority to make any decision but rather only to make recommendations to the board of directors):
|
i)
|
Manage, discuss, negotiate and conclude negotiations with the representatives of IDBD’s bondholders regarding their requests;
|
ii)
|
Negotiate with IDBD’s financial creditors a new set of covenants for IDBD’s financial indebtedness; and
|
iii)
|
Devise a business and financial plan for IDBD.
|
·
|
Dolphin (directly or through any vehicle controlled by Eduardo Sergio Elsztain), promised to submit offers to purchase IDBD shares in the public phase of the public offering at an amount of up to NIS100 million at a price per share which is no less than the opening price in the public phase of the public offering, and subject to the following conditions, inter alia:
|
i)
|
That IDBD makes a public offering of its shares under terms acceptable to the market and approved by IDBD’s Board of Directors, for an amount of at least NIS100 million and not to exceed NIS125 million, and that the offering is made between October 1, 2015 and November 15, 2015.
|
ii)
|
The commitment assumed by Dolphin would automatically expire upon the occurrence of any of the following events before the day of the public auction under the public offering: (i) if any of IDBD’s creditors or any of the representatives of IDBD’s bondholders files legal actions against IDBD, including a request for early or immediate repayment or acceleration of any portion of IDBD’s debt; (ii) if a meeting of any of IDBD’s bondholders is called including in its agenda any of the matters set forth above; (iii) if IDBD receives capital contributions for a total amount of NIS100 million in any manner, whether through a rights offering, the exercise of warrants, a private or public placement, and if such contributions are made by Dolphin directly or through any vehicle controlled by Eduardo Sergio Elsztain (apart from the capital contributions creditable against the remaining NIS8.5 million obligation under Dolphin’s irrevocable proposal dated December 29, 2014), or by any other individual or legal entity, or the investor public, and at any event when the aggregate amount of such capital contributions under paragraph 5 (d) (iii) of the proposal so submitted is lower than NIS100 million, Dolphin’s commitment under Section 5 (c) above would be reduced accordingly; or (iv) if a material adverse event or change occurs in IDBD or its control structure or in any of its material affiliates.
|
·
|
DIC’s Warrants would be divided into 4 series, and the exercise price of each of such series would be approximately NIS125 million, as follows:
|
i)
|
The first series of warrants would be exercisable until December 21, 2015, for a price to be determined based on acceptable market conditions and after consultation with capital market experts, but in no case for a higher price than NIS6.53 (“DIC’s #1 Warrants”).
|
ii)
|
The second series of warrants would be exercisable until December 21, 2016, for an exercise price equivalent to 110% of DIC’s #1 Warrants’ exercise price.
|
iii)
|
The third series of warrants would be exercisable until December 21, 2017, for an exercise price of: (i) 110% of DIC’s #1 Warrants’ exercise price, in the event they are exercised before December 21, 2016; or (ii) 120% of DIC’s #1 Warrants’ exercise price if they are exercised between December 21, 2016 and December 21, 2017.
|
iv)
|
The fourth series of warrants would be exercisable until December 21, 2018, for an exercise price of: (i) 110% of DIC’s #1 Warrants’ exercise price, in the event they are exercised before December 21, 2016; or (ii) 130% of DIC’s #1 Warrants’ exercise price if they are exercised between December 21, 2016 and December 21, 2018.
|
·
|
As part of DIC’s Rights Offering, IDBD would promise to exercise all DIC’s #1 Warrants issued in favor of IDBD, for a total amount of approximately NIS92.5 million (“IDBD’s Investment Amount”) by December 21, 2015, provided that the following conditions have been satisfied as of such date:
|
i)
|
IDBD should have the written consent of IDBD’s main lenders for IDBD to exercise DIC’s #1 Warrants issued in its favor under DIC’s Rights Offering.
|
ii)
|
IDBD should have conducted and completed a Public Offering (as defined below), under which it should have raised an amount of at least NIS200 million.
|
iii)
|
IDBD should have received the written consent of its main lenders in order for any amount injected as capital in IDBD after the date of such proposal in excess of NIS100 million and up to NIS350 million, to be used at any time for injection from IDBD into DIC, through any capital injection method.
|
iv)
|
IDBD's obligation expires upon the occurrence of any of the events which result in the expiration of Dolphin's commitment pursuant to the proposal (as described below) or in case of a material adverse event or change occurs in IDBD or its control structure or in any of its material affiliates.
|
·
|
In turn, Dolphin proposed the following to IDBD:
|
i)
|
IDBD’s public offering amount under Dolphin’s proposal dated May 6 would be increased by at least NIS100 million and up to NIS125 million (the “Public Offering under the Proposal to IDBD and DIC”). In other words, the total amount would be increased from a minimum of NIS100 million to a minimum of NIS200 million, and the maximum amount would be increased from a maximum of NIS125 million to a maximum of NIS250 million (the “Total Increased Amount”).
|
ii)
|
Therefore, Dolphin’s obligation to participate in the Public Offering under the Proposal to IDBD and DIC would be increased (compared to the proposal dated May 6, 2015) by an amount equal to the difference between the Total Increased Amount and the total amount of commitments received, always provided that such amounts were not higher than NIS200 million (the “Capital Contribution Amount”).
|
iii)
|
The approval of this proposal would constitute IDBD’s confirmation and approval that all of Dolphin’s commitments under this proposal would imply the full and complete settlement of its remaining obligations to inject NIS8.5 million in IDBD, pursuant to Dolphin’s irrevocable proposal dated December 29, 2014 (provided however that Dolphin shall participate in an amount exceeding NIS8.5 million).
|
iv)
|
The amount mention in section 5(d)(iii) of the May 6 proposal shall be NIS200 million.
|
v)
|
Dolphin’s commitment would automatically expire upon the occurrence of any of the following events: (i) if any of DIC’s creditors or any of the trustees of DIC’s bonds filed any legal action against DIC, including a request for early repayment or acceleration of any portion of DIC’s debt; and/or (ii) if any meeting of DIC’s bondholders included in its agenda any or many of the following matters: (a) appointment of advisers (financial, legal or otherwise); (b) appointment of a committee of representatives of DIC’s bondholders; (c) filing of any legal action against DIC; and/or (d) request for early or immediate repayment of any portion of DIC’s debt, or any similar discussion.
|
Ps. (in thousands)
|
||||
Carrying value of non-controlling interest
|
949 | |||
Price paid for the non-controlling interest
|
(5,750 | ) | ||
Reserve recognized in the Shareholders’ equity
|
(4,801 | ) |
Ps. (in thousands)
|
||||
Carrying value of non-controlling interest
|
20,950 | |||
Price paid for the non-controlling interest
|
- | |||
Reserve recognized in the Shareholders’ equity
|
20,950 |
Fiscal year ended June 30, 2014
|
Ps. (in thousands)
|
||||
Carrying value of non-controlling interest acquired by the Company
|
182 | |||
Price paid for the non-controlling interest
|
(1,208 | ) | ||
Reserve recognized in the Shareholders’ equity
|
(1,026 | ) |
Fiscal year ended June 30, 2013
|
Ps. (in thousands)
|
||||
Carrying value of non-controlling interest acquired by the Company
|
824 | |||
Price paid for the non-controlling interest
|
(2,364 | ) | ||
Reserve recognized in the Shareholders’ equity
|
(1,540 | ) |
Ps. (in thousands)
|
||||
Carrying value of the equity interests acquired by the Company
|
857 | |||
Price paid for the non-controlling interest
|
(4,544 | ) | ||
Reserve recognized in the parent’s equity due to the acquisition
|
(3,687 | ) |
·
|
The termination or expiration of the Proposal to IDBD and DIC would not repeal the commitments undertaken by Dolphin under the proposal submitted by Dolphin to IDBD on May 6, 2015 always provided that such commitments continued in full force and effect subject to the proposed terms, or Dolphin’s remaining commitment to inject NIS8.5 million in IDBD pursuant to its irrevocable proposal dated December 29, 2014.
|
·
|
A further condition would be added to the Proposal to IDBD and DIC whereby if Dolphin’s interest in the rights public offering were lower than NIS8.5 million, Dolphin would remain obliged vis-à-vis IDBD to inject the remaining amount arising from subtracting NIS8.5 million and the amount effectively injected at this instance by Dolphin.
|
·
|
IDBD would replace its commitment to exercise DIC’s Series 1 warrants for NIS92.5 million with the commitment to exercise the Series 1 warrants for at least the amount that results from subtracting (a) the Capital Contribution Amount; less (b) NIS100 million, always provided that such amount does not exceed NIS92.5 million.
|
·
|
Dolphin agrees that the new shares to be acquired by Dolphin or any entity controlled by Eduardo Sergio Elsztain under the public offering of shares to be made by IDBD during October 2015 would not grant to it the right to participate in the Tender Offer always provided that such new shares are still held by Dolphin or an entity controlled by Eduardo Sergio Elsztain. Notwithstanding, nothing will prevent Dolphin and/or the entity controlled by Eduardo Sergio Elsztain that holds such new shares to be acquired under the public offering to be made in October 2015 by IDBD from freely disposing of them.
|
·
|
Replacement of the obligation to carry out Tender Offers for a total of NIS512 million with the obligation by Dolphin and Extra (and/or their related parties) to inject NIS512 million in IDBD against the issuance of bonds. The NIS512 million would be injected in two tranches of NIS256 million each (the “First Tranche” and the “Second Tranche”, respectively).
|
i)
|
The First Tranche would be completed by December 31, 2015, and against its injection IDBD would issue in favor of such investors other than Dolphin, Extra and/or any of their related parties (the “Minority Investors”) bonds for a principal amount of NIS256 million, by reopening Series 9 (“Series 9”), or by issuing a new series of bonds under terms and conditions replicating those of Series 9 (“IDBD’s New Bonds”).
|
ii)
|
The Second Tranche would be completed by January 31, 2016 and against its injection the Minority Investors would receive IDBD’s New Bonds for a principal amount of NIS256 million.
|
iii)
|
Following the exercise of the First Tranche and Second Tranche, Minority Investors would deliver 64 million shares to the obligors under the Tender Offer.
|
iv)
|
In addition, on January 31, 2016, Dolphin and Extra (or any of their related parties) would purchase the remaining shares held by the Minority Investors for a total of NIS90 million, payable on that same date.
|
·
|
If the sale of Clal is consummated, IDBD will carry out a partial bond repurchase offering at par value among all series of bonds.
|
·
|
The Trustees’ Proposal would be carried out before IDBD launches a new issuance of shares or rights or, alternatively, each new share or right issued would not be part of the proposal as submitted.
|
·
|
The Trustees’ Proposal is not approved by the Minority Investors; and such approval would be sought after the proposal is accepted by IDBD, Dolphin and Extra.
|
·
|
The shares held by Dolphin and any other company controlled by Eduardo Sergio Elsztain are not entitled to participate as offerees in the Tender Offers.
|
·
|
The shares held or that were held by Dolphin and/or by companies controlled by Eduardo Sergio and which were transferred or will be transferred by them to other parties, will not be entitled to participate in the Tender Offers.
|
·
|
These remedies will not apply to shares which were acquired from the minority shareholders within the framework of the trade in the stock exchange and which came into the possession of IFISA.
|
•
|
Consideration of documents contemplated in Section 234, paragraph 1, of the Argentine Companies Law No. 19,550 for the fiscal year ended June 30, 2015.
|
•
|
Consideration of Board of Directors’ performance.
|
•
|
Consideration of Supervisory Committee’s performance.
|
• Consideration of compensation payable to the Board of Directors for $18,596,284 (total compensation) for the fiscal year ended June 30, 2015. Delegation on the Board of Directors of powers to approve the Audit Committee’s budget.
|
•
|
Consideration of compensation payable to the Supervisory Committee for the fiscal year ended June 30, 2015.
|
•
|
Determination of the number and election of Regular Directors and Alternate Directors, as applicable.
|
•
|
Appointment of Regular and Alternate Members of the Supervisory Committee.
|
•
|
Appointment of Certifying Accountant for the next fiscal year and determination of its compensation. Delegation of powers.
|
•
|
Updating of report on Shared Services Agreement.
|
•
|
Treatment of amounts paid as personal assets tax levied on the shareholders.
|
•
|
Consideration of renewal of delegation on the Board of Directors of the powers to determine the time and currency of issue and further terms and conditions of the notes to be issued under the Global Note Program for up to US$ 300,000,000 currently outstanding, in accordance with the resolutions adopted at the Shareholders’ Meeting dated October 31, 2011.
|
•
|
Treatment and allocation of net income for the fiscal year ended June 30, 2015. Consideration of payment of a cash dividend for up to $72,000 thousand.
|
•
|
Consideration of Special Merger Financial Statements of Unicity SA; Special Merger Financial Statements of Solares de Santa María SA; Special Spin-Off Financial Statements of E-Commerce Latina SA; Special Spin-off-Merger Financial Statements of E-Commerce Latina SA; Special Merger Individual Financial Statements of IRSA Inversiones y Representaciones Sociedad Anónima (IRSA) and Consolidated Financial Statements of IRSA for Merger with Solares de Santa María SA and Unicity SA and Spin-Off-Merger with E-Commerce Latina SA prepared as of June 30, 2015, as well as Supervisory Committee’s and Auditor’s Reports. Consideration of preliminary merger agreement with Solares de Santa María SA and Unicity SA and preliminary spin-off-merger agreement with E-Commerce Latina SA and further documents. Authorizations and delegations of powers. Appointment of representative to execute final agreement and carry out additional proceedings.
|
·
|
the acquisition, development and operation of shopping centers,
|
·
|
the acquisition and development of office and other non-shopping center properties primarily for rental purposes,
|
·
|
the acquisition and operation of luxury hotels,
|
·
|
the development and sale of residential properties,
|
·
|
the acquisition of undeveloped land reserves for future development or sale, and
|
·
|
selective investments outside Argentina.
|
Date of Acquisition | Leasable Area
sqm (1)
|
IRSA Commercial Properties’ Interest (3) | Occupancy Rate(2) | Accumulated Annual Rental Income as of fiscal year ended (4) | Book Value
in thousands of Ps.)(5)
|
||||||||||||||||||||||||
2015 | 2014 | 2013 | |||||||||||||||||||||||||||
Shopping Centers (6)
|
|||||||||||||||||||||||||||||
Alto Palermo
|
Nov-97
|
19,545.0 | 100.00 | % | 99.7 | % | 295,285 | 244,214 | 196,001 | 221,792 | |||||||||||||||||||
Abasto Shopping (7)
|
Jul-94
|
36,669.1 | 100.00 | % | 100.0 | % | 301,685 | 238,021 | 192,495 | 255,335 | |||||||||||||||||||
Alto Avellaneda
|
Nov-97
|
36,728.6 | 100.00 | % | 99.9 | % | 199,920 | 160,894 | 128,114 | 131,140 | |||||||||||||||||||
Alcorta Shopping
|
Jun-97
|
15,432.9 | 100.00 | % | 100.0 | % | 140,533 | 105,791 | 82,470 | 106,091 | |||||||||||||||||||
Patio Bullrich
|
Oct-98
|
11,636.2 | 100.00 | % | 100.0 | % | 98,359 | 79,374 | 66,424 | 112,426 | |||||||||||||||||||
Alto NOA
|
Mar-95
|
19,072.9 | 100.00 | % | 100.0 | % | 50,669 | 38,746 | 31,150 | 29,708 | |||||||||||||||||||
Buenos Aires Design
|
Nov-97
|
13,888.2 | 53.70 | % | 94.6 | % | 35,320 | 27,360 | 23,145 | 12,860 | |||||||||||||||||||
Alto Rosario (7)
|
Nov-04
|
28,395.6 | 100.00 | % | 97.9 | % | 137,639 | 100,072 | 78,743 | 115,014 | |||||||||||||||||||
Mendoza Plaza
|
Dec-94
|
42,039.5 | 100.00 | % | 96.1 | % | 91,694 | 74,110 | 61,928 | 101,657 | |||||||||||||||||||
Dot Baires Shopping
|
May-09
|
49,847.9 | 80.00 | % | 99.7 | % | 199,474 | 158,306 | 128,196 | 377,260 | |||||||||||||||||||
Córdoba Shopping Villa Cabrera
|
Dec-06
|
15,328.0 | 100.00 | % | 99.8 | % | 54,445 | 39,763 | 32,314 | 61,111 | |||||||||||||||||||
Soleil Premium Outlet
|
Jul-10
|
13,993.1 | 100.00 | % | 99.4 | % | 59,366 | 44,178 | 27,927 | 84,301 | |||||||||||||||||||
La Ribera Shopping (8)
|
Aug-11
|
9,750.3 | 50.00 | % | 99.3 | % | 13,068 | 9,360 | 7,236 | 21,185 | |||||||||||||||||||
Distrito Arcos (9)
|
Dec-14
|
12,127.3 | 90.00 | % | 97.3 | % | 22,934 | - | - | 229,800 | |||||||||||||||||||
Alto Comahue (10)
|
Mar-15
|
9,456.9 | 99.10 | % | 94.2 | % | 11,690 | - | - | 309,103 | |||||||||||||||||||
TOTAL GENERAL |
333,911.5
|
98.7 | % |
1,712,081
|
1,320,189
|
1,056,143
|
2,168,783
|
(1) Total leasable area in each property. Excludes common areas and parking spaces.-
|
(2) Calculated dividing occupied square meters by leasable area on the last day of the fiscal year.-
|
(3) IRSA Commercial Properties’ effective interest in each of its business units. IRSA has a 95.80% interest in IRSA Commercial Properties.
|
(4) Corresponds to total leases, consolidated according to IFRS. Does not include income relating to common maintenance expenses and collective promotion fund.
|
(5) Cost of acquisition plus improvements, less accumulated depreciation, plus adjustment for inflation, if applicable.
|
(6) Through IRSA Commercial Properties.
|
(7) Excludes Museo de los Niños (3,732 square meters in Abasto and 1,261 square meters in Alto Rosario).
(8) We jointly own La Ribera Shopping through a joint venture and therefore its results of operations are not consolidated with ours.
(9) Opening was on December 18, 2014
(10) Opening was on March 17, 2015.
|
As of June 30,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
(In Ps.)
|
||||||||||||
Abasto
|
3,150.2 | 2,447.0 | 1,939.0 | |||||||||
Alto Palermo
|
2,662.1 | 2,111.2 | 1,609.8 | |||||||||
Alto Avellaneda
|
2,895.1 | 2,333.8 | 1,868.8 | |||||||||
Alcorta Shopping
|
1,474.7 | 1,120.4 | 822.7 | |||||||||
Patio Bullrich
|
888.5 | 689.3 | 548.3 | |||||||||
Alto NOA
|
1,068.6 | 766.1 | 609.2 | |||||||||
Buenos Aires Design
|
326.0 | 272.2 | 241.5 | |||||||||
Mendoza Plaza
|
1,906.7 | 1,514.7 | 1,206.7 | |||||||||
Alto Rosario
|
1,951.8 | 1,378.3 | 1,060.2 | |||||||||
Córdoba Shopping- Villa Cabrera
|
756.0 | 546.6 | 432.9 | |||||||||
Dot Baires Shopping
|
2,570.6 | 2,008.3 | 1,566.6 | |||||||||
Soleil Premium Outlet Shopping
|
938.4 | 664.0 | 366.4 | |||||||||
La Ribera Shopping
|
398.1 | 280.8 | 209.9 | |||||||||
Distrito Arcos (2)
|
339.9 | 0.0 | 0.0 | |||||||||
Alto Comahue (3)
|
182.1 | 0.0 | 0.0 | |||||||||
Total Sales
|
21,508.7 | 16,132.8 | 12,482.0 |
(1)
|
Retail sales based upon information provided to us by tenants and past owners. The amounts shown reflect 100% of the retail sales of each shopping center, although in certain cases we own less than 100% of such shopping centers. Excludes sales from the booths and spaces used for special exhibitions.
|
(2)
|
Opening was on December 18, 2014.
|
(3)
|
Opening was on March 17, 2015.
|
Lease Agreements Expiration as of June 30:
|
Number of Lease Agreements
to Expire (1)
|
Square Meters of Leases to Expire
|
Square Meter Percentage of Leases to Expire
|
Amount of Lease Agreements
to Expire (3)
|
Percentage of Lease Agreements to Expire
|
|||||||||||||||
(sqm)
|
(%)
|
(Ps.)
|
(%)
|
|||||||||||||||||
2016
|
633 | 105,333.7 | 31 | % | 321,158,626.4 | 38 | % | |||||||||||||
2017
|
413 | 62,978.6 | 19 | % | 209,324,015.3 | 25 | % | |||||||||||||
2018
|
393 | 66,763.5 | 20 | % | 205,918,292.3 | 24 | % | |||||||||||||
2019 and subsequent years
|
215 | 98,835.7 | 30 | % | 106,729,754.2 | 13 | % | |||||||||||||
Total (2)
|
1,654 | 333,911.5 | 100 | % | 843,130,688.2 | 100 | % |
(1)
|
Includes vacant stores relating to leases expired as of June 30, 2015. A lease may be associated to one or more stores.
|
(2)
|
Incldes the base rent and does not reflect or ownership interest in each property.
|
(3)
|
Annual basic rent as of June 30, 2015 under leases subject to expiration.
|
Number of Agreements | Annual Base Rent Amount (Ps.) | Annual Admission Rights Amount (Ps.) |
Average Annual Base Rent per sqm (Ps.)
|
Average Annual Base Rent per sqm (Ps.)
|
Number of non-renewed agreements (1) | Non-renewed agreements (1) Annual Base Rent Amount (Ps.) | ||||||||||||||||||||||
Type of Business |
|
|
|
New and renewed
|
Former agreements
|
|
|
|||||||||||||||||||||
Clothes and footwear
|
391 | 223,614,392.90 | 61,844,417.00 | 5,314.50 | 4,036.40 | 581 | 307,355,562.50 | |||||||||||||||||||||
Miscellaneous
|
90 | 47,196,397.60 | 19,970,450.30 | 3,160.80 | 2,415.70 | 137 | 49,714,790.90 | |||||||||||||||||||||
Restaurant
|
88 | 35,261,497.90 | 6,666,073.80 | 3,848.60 | 2,698.70 | 125 | 53,098,038.70 | |||||||||||||||||||||
Home
|
42 | 15,560,441.90 | 4,102,247.30 | 2,822.10 | 2,815.30 | 50 | 20,824,495.80 | |||||||||||||||||||||
Services
|
27 | 7,061,303.30 | 978,818.40 | 1,541.90 | 1,155.50 | 42 | 9,410,003.90 | |||||||||||||||||||||
Technology
|
23 | 15,404,643.00 | 1,849,358.60 | 2,500.70 | 2,122.50 | 31 | 35,472,465.20 | |||||||||||||||||||||
Entertainment
|
5 | 1,636,560.00 | 5,000.00 | 150.4 | 86.2 | 22 | 21,520,094.60 | |||||||||||||||||||||
Total
|
666 | 345,735,236.60 | 95,416,365.40 | 3,705.50 | 2,841.70 | 988 | 497,395,451.60 |
As of June 30,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Abasto
|
100.0 | % | 99.4 | % | 99.8 | % | ||||||
Alto Palermo
|
99.7 | % | 98.9 | % | 98.4 | % | ||||||
Alto Avellaneda
|
99.9 | % | 99.5 | % | 99.9 | % | ||||||
Alcorta Shopping
|
100.0 | % | 99.8 | % | 99.8 | % | ||||||
Patio Bullrich
|
100.0 | % | 99.6 | % | 99.7 | % | ||||||
Alto NOA
|
100.0 | % | 99.7 | % | 99.7 | % | ||||||
Buenos Aires Design
|
94.6 | % | 92.3 | % | 99.0 | % | ||||||
Mendoza Plaza
|
96.1 | % | 95.0 | % | 97.7 | % | ||||||
Alto Rosario
|
97.9 | % | 97.0 | % | 97.1 | % | ||||||
Córdoba Shopping Villa Cabrera
|
99.8 | % | 99.8 | % | 100.0 | % | ||||||
Dot Baires Shopping
|
99.7 | % | 99.7 | % | 99.4 | % | ||||||
Soleil Premium Outlet
|
99.4 | % | 100.0 | % | 100.0 | % | ||||||
La Ribera Shopping
|
99.3 | % | 99.6 | % | 97.7 | % | ||||||
Distrito Arcos (2)
|
97.3 | % | - | - | ||||||||
Alto Comahue (3)
|
94.2 | % | - | - | ||||||||
Weighted Average
|
98.7 | % | 98.4 | % | 99.1 | % |
Fiscal Year ended June 30, (1)
|
||||||||||||
2015(4)
|
2014(4)
|
2013(4)
|
||||||||||
(in Ps.)
|
||||||||||||
Abasto
|
8,227.2 | 6,254.6 | 5,104.9 | |||||||||
Alto Palermo
|
15,107.9 | 12,618.5 | 10,487.1 | |||||||||
Alto Avellaneda
|
5,443.2 | 4,400.3 | 3,467.9 | |||||||||
Alcorta Shopping
|
9,106.1 | 7,000.2 | 5,832.0 | |||||||||
Patio Bullrich
|
8,452.8 | 6,762.3 | 5,685.5 | |||||||||
Alto Noa
|
2,656.6 | 2,022.5 | 1,627.3 | |||||||||
Buenos Aires Design
|
2,543.2 | 1,874.9 | 1,683.7 | |||||||||
Mendoza Plaza
|
2,181.1 | 1,802.8 | 1,466.2 | |||||||||
Alto Rosario
|
4,847.2 | 3,390.4 | 2,843.6 | |||||||||
Córdoba Shopping Villa Cabrera
|
3,552.0 | 2,503.8 | 2,139.2 | |||||||||
Dot Baires Shopping
|
4,001.7 | 3,389.3 | 2,578.4 | |||||||||
Soleil Premium Outlet
|
4,242.5 | 2,908.4 | 2,052.1 | |||||||||
La Ribera Shopping
|
1,340.3 | 1,129.7 | 863.7 | |||||||||
Distrito Arcos (2)
|
1,891.1 | - | - | |||||||||
Alto Comahue (3)
|
1,236.1 | - | - |
As of June 30,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Anchor Store
|
1,299.3 | 1,098.4 | 869.5 | |||||||||
Clothes and footwear
|
11,124.8 | 7,940.1 | 6,149.9 | |||||||||
Entertainment
|
722.3 | 546.5 | 461.5 | |||||||||
Home
|
617.1 | 486.4 | 401.4 | |||||||||
Technology
|
2,994.2 | 2,526.5 | 1,921.1 | |||||||||
Restaurant
|
1,938.4 | 1,476.8 | 1,161.5 | |||||||||
Miscellaneous
|
2,589.4 | 1,922.3 | 1,438.2 | |||||||||
Services
|
223.2 | 135.8 | 78.9 | |||||||||
Total
|
21,508.7 | 16,132.8 | 12,482.0 |
Company
|
Shopping Center
|
Location (1)
|
Gross Leasable Area
|
Stores
|
National GLA Percentage (2)
|
Stores Percentage (2)
|
||||||||||||
IRSA Commercial Properties
|
||||||||||||||||||
Dot Baires Shopping
|
CABA
|
49,848 | 156 | 2.67 | % | 2.25 | % | |||||||||||
Mendoza Plaza Shopping
|
Mendoza
|
42,040 | 144 | 2.25 | % | 2.07 | % | |||||||||||
Abasto de Buenos Aires
|
CABA
|
40,401 | 170 | 2.17 | % | 2.45 | % | |||||||||||
Alto Avellaneda
|
GBA
|
36,729 | 139 | 1.97 | % | 2.00 | % | |||||||||||
Alto Rosario
|
Rosario
|
29,656 | 146 | 1.59 | % | 2.10 | % | |||||||||||
Alto Palermo Shopping
|
CABA
|
19,545 | 146 | 1.05 | % | 2.10 | % | |||||||||||
Alto NOA
|
Salta
|
19,073 | 89 | 1.02 | % | 1.28 | % | |||||||||||
Alcorta Shopping
|
CABA
|
15,433 | 106 | 0.83 | % | 1.53 | % | |||||||||||
Córdoba Shopping
|
Córdoba
|
15,328 | 107 | 0.82 | % | 1.54 | % | |||||||||||
Soleil Premium Outlet
|
GBA
|
13,993 | 78 | 0.75 | % | 1.12 | % | |||||||||||
Buenos Aires Design
|
CABA
|
13,888 | 63 | 0.74 | % | 0.91 | % | |||||||||||
Distrito Arcos
|
CABA
|
12,127 | 63 | 0.65 | % | 0.91 | % | |||||||||||
Patio Bullrich
|
CABA
|
11,636 | 87 | 0.62 | % | 1.25 | % | |||||||||||
La Ribera Shopping
|
Santa Fe
|
9,750 | 60 | 0.52 | % | 0.86 | % | |||||||||||
Alto Comahue
|
Neuquen
|
9,457 | 102 | 0.51 | % | 1.47 | % | |||||||||||
Subtotal
|
338,904 | 1,656 | 18.16 | % | 23.84 | % | ||||||||||||
Cencosud
|
||||||||||||||||||
Subtotal
|
651,105 | 1,465 | 34.90 | %(3) | 21.08 | % | ||||||||||||
Other
|
||||||||||||||||||
Operators
|
||||||||||||||||||
Subtotal
|
875,557 | 3,827 | 46.95 | % | 55.10 | % | ||||||||||||
Total
|
1,865,566 | 6,948 | 100 | % | 100 | % |
Date of Acquisition | Gross Leasable Area (sqm) (1) | Occupancy (2) | IRSA’s Effective Interest | Monthly Rental Income (in thousands of Ps.) (3) |
Annual accumulated rental income over fiscal years Ps./000(4)
|
Book Value
(in thousands of Ps.)
|
||||||||||||||||||||||||||||||
2015 | 2014 | 2013 | ||||||||||||||||||||||||||||||||||
Offices
|
||||||||||||||||||||||||||||||||||||
Edificio República
|
04/28/08
|
19,885 | 93.6 | % | 100.0 | % | 4,919 | 61,934 | 45,676 | 32,721 | 194,971 | |||||||||||||||||||||||||
Torre BankBoston
|
08/27/07
|
14,873 | 100.0 | % | 100.0 | % | 3,954 | 41,932 | 34,744 | 25,146 | 138,432 | |||||||||||||||||||||||||
Bouchard 551
|
03/15/07
|
- | - | 100.0 | % | 135 | 10,176 | 23,519 | 30,008 | 7,698 | ||||||||||||||||||||||||||
Intercontinental Plaza(8)
|
11/18/97
|
22,535 | 100.0 | % | 100.0 | % | - | 55,973 | 40,108 | 30,178 | 41,106 | |||||||||||||||||||||||||
Bouchard 710
|
06/01/05
|
15,014 | 100.0 | % | 100.0 | % | 4,170 | 48,327 | 34,606 | 26,025 | 60,923 | |||||||||||||||||||||||||
Dique IV, Juana Manso 295
|
12/02/97
|
11,298 | 99.5 | % | 100.0 | % | 2,634 | 32,171 | 25,195 | 18,282 | 51,835 | |||||||||||||||||||||||||
Maipú 1300 (9)
|
09/28/95
|
4,759 | 90.9 | % | 100.0 | % | 1,020 | 15,848 | 15,499 | 15,147 | 14,713 | |||||||||||||||||||||||||
Libertador 498
|
12/20/95
|
620 | 100.0 | % | 100.0 | % | 372 | 1,952 | 3,184 | 2,946 | 3,938 | |||||||||||||||||||||||||
Suipacha 652/64
|
11/22/91
|
11,453 | 96.7 | % | 100.0 | % | 1,385 | 16,023 | 12,636 | 8,689 | 8,255 | |||||||||||||||||||||||||
Madero 1020
|
12/21/95
|
- | - | 100.0 | % | 2 | 26 | 24 | 24 | 113 | ||||||||||||||||||||||||||
Dot Building (5)
|
11/28/06
|
11,242 | 100.0 | % | 80.0 | % | 2,067 | 27,416 | 18,985 | 12,924 | 126,365 | |||||||||||||||||||||||||
Subtotal Offices
|
111,679 | 98.1 | % | N/A | 20,658 | 311,778 | 254,176 | 202,090 | 648,349 | |||||||||||||||||||||||||||
Other Properties
|
||||||||||||||||||||||||||||||||||||
Nobleza Piccardo (6)
|
05/31/11
|
106,610 | 74.8 | % | 50.0 | % | 144 | 7,960 | 8,238 | 7,117 | 4,297 | |||||||||||||||||||||||||
Other Properties (7)
|
N/A | 36,441 | 45.3 | % | N/A | 659 | 6,960 | 2,792 | 2,000 | 53,627 | ||||||||||||||||||||||||||
Subtotal Other Properties
|
143,051 | 67.4 | % | N/A | 803 | 14,920 | 11,030 | 9,117 | 57,924 | |||||||||||||||||||||||||||
Total Offices and Other
|
254,730 | 80.7 | % | N/A | 21,461 | 326,698 | 265,206 | 211,207 | 706,273 |
As of June 30, | |||||||||||||||||||||
Year of
expiration
|
Number of
Leases (1)
|
Surface area subject
to expiration (sqm)
|
Percentage subject
to expiration
|
Amount (Ps.) (3)
|
Percentage of
Leases
|
||||||||||||||||
2015
|
21 | 36,077 | 11 | % | 34,850,999 | 10 | % | ||||||||||||||
2016
|
44 | 39,579 | 12 | % | 101,818,807 | 30 | % | ||||||||||||||
2017
|
61 | 70,084 | 22 | % | 147,468,004 | 44 | % | ||||||||||||||
2018+ | 26 | 171,372 | 54 | % | 54,468,450 | 16 | % | ||||||||||||||
Total
|
152 | 317,112 | 100 | % | 338,606,260 | 100 | % |
Occupancy Percentage(1)
|
||||||||
2015
|
2014
|
|||||||
Offices
|
||||||||
Edificio República
|
93.6 | % | 94.0 | % | ||||
Torre BankBoston
|
100.0 | % | 100.0 | % | ||||
Bouchard 551
|
- | 100.0 | % | |||||
Intercontinental Plaza(2)
|
100.0 | % | 100.0 | % | ||||
Bouchard 710
|
100.0 | % | 99.8 | % | ||||
Dique IV, Juana Manso 295
|
99.5 | % | 94.4 | % | ||||
Maipú 1300 (3)
|
90.9 | % | 87.3 | % | ||||
Libertador 498
|
100.0 | % | 100.0 | % | ||||
Suipacha 652/64
|
96.7 | % | 100.0 | % | ||||
DOT Building
|
100.0 | % | 100.0 | % | ||||
Subtotal Offices
|
98.1 | % | 97.7 | % |
Annual income per surface area (1) (Ps./sqm)
|
||||||||||||
2015(2)
|
2014(2)
|
2013(2)
|
||||||||||
Offices
|
||||||||||||
Edificio República
|
3,115 | 2,297 | 1,646 | |||||||||
Torre BankBoston
|
2,819 | 2,336 | 1,691 | |||||||||
Bouchard 557
|
- | - | 2,484 | |||||||||
Intercontinental Plaza(4)
|
2,484 | 1,780 | 1,339 | |||||||||
Bouchard 710
|
3,219 | 2,305 | 1,733 | |||||||||
Dique IV, Juana Manso 295
|
2,847 | 2,230 | 1,618 | |||||||||
Maipú 1300(5)
|
3,330 | 3,257 | 1,612 | |||||||||
Libertador 498
|
3,149 | 5,137 | 4,752 | |||||||||
Suipacha 652/64
|
1,399 | 1,103 | 759 | |||||||||
DOT Building
|
2,439 | 1,689 | 1,150 | |||||||||
Others(3)
|
61 | 47 | 96 |
Property
|
Number of Agreements(1)(5)
|
Annual Rental income (2)
|
Rental income per sqm New and Renewed (3)
|
Previous rental income per sqm (3)
|
N° of non-renewed agreements
|
Non-renewed agreements Annual rental income (4)
|
||||||||||||||||||
Maipú 1300 (7)
|
7.0 | 6,861,836.7 | 179.1 | 125.0 | - | - | ||||||||||||||||||
Av. Libertador 498
|
1.0 | 1,108,857.6 | 149.1 | - | - | - | ||||||||||||||||||
Intercontinental Plaza(6)
|
17.0 | 40,828,101.1 | 191.6 | - | - | - | ||||||||||||||||||
Bouchard 710
|
7.0 | 33,005,245.8 | 234.2 | 333.3 | - | - | ||||||||||||||||||
Bouchard 557
|
2.0 | 5,996,891.4 | 253.3 | - | - | - | ||||||||||||||||||
Della Paolera 265
|
4.0 | 20,996,908.2 | 178.4 | - | - | - | ||||||||||||||||||
Edificio República
|
6.0 | 25,355,740.9 | 250.9 | 260.5 | - | - | ||||||||||||||||||
Juana Manso 295
|
4.0 | 27,770,144.5 | 211.6 | - | - | - | ||||||||||||||||||
DOT Building
|
1.0 | 3,884,587.8 | 218.1 | - | - | - | ||||||||||||||||||
Suipacha 664
|
2.0 | 2,492,596.9 | 75.4 | 34.6 | - | - | ||||||||||||||||||
Total Offices
|
51.0 | 168,300,910.9 | 205.5 | 97.5 | - | - |
As of june 30,
|
||||||||||||
Development
|
2015
|
2014
|
2013
|
|||||||||
(Ps./000)
|
||||||||||||
Residential apartments
|
||||||||||||
Caballito Nuevo (5)
|
2,139 | 986 | 6,983 | |||||||||
Condominios I and II (1)
|
6,616 | 51,917 | 4,262 | |||||||||
Horizons (4)
|
5,225 | 22,890 | 117,090 | |||||||||
Other residential apartments (2)
|
- | 44 | 811 | |||||||||
Subtotal residential apartments
|
13,980 | 75,837 | 129,146 | |||||||||
Residential communities
|
||||||||||||
Abril (3)
|
644 | 1,750 | 1,113 | |||||||||
El Encuentro (5)
|
461 | 7,944 | 11,698 | |||||||||
Subtotal residential communities
|
1,105 | 9,694 | 12,811 | |||||||||
Land reserve
|
||||||||||||
Canteras Natal Crespo
|
- | - | 39 | |||||||||
Neuquén(1)
|
- | 13,390 | - | |||||||||
Subtotal land reserves
|
- | 13,390 | 39 | |||||||||
TOTAL
|
15,085 | 98,921 | 141,996 |
Development
|
Company
|
Interest
|
Date of Acquisition
|
Surface area sqm
|
Area intended for sale sqm
|
Area intended for Construction sqm
|
Sold
|
Title deed executed
|
Location
|
Accumulated income as of June 2015
|
Accumulated income as of June 2014
|
Accumulated income as of June 2013
|
Book Value
|
||||||||||||||||||||||||||||||
Residential
|
|||||||||||||||||||||||||||||||||||||||||||
Available for sale (4)
|
|||||||||||||||||||||||||||||||||||||||||||
Condominios del Alto I
|
IRSA Commercial Properties
|
100%
|
04/30/1999
|
- | 2,082 | - |
71%
|
67%
|
Santa Fe
|
6,314 | 2,614 | 4,262 | 21 | ||||||||||||||||||||||||||||||
Condominios del Alto II
|
IRSA Commercial Properties
|
100%
|
04/30/1999
|
- | 5,009 | - |
96%
|
93%
|
Santa Fe
|
302 | 49,303 | - | 518 | ||||||||||||||||||||||||||||||
Caballito Nuevo
|
IRSA
|
100%
|
11/03/1997
|
- | 8,173 | - |
98%
|
98%
|
CABA
|
2,139 | 986 | 6,983 | - | ||||||||||||||||||||||||||||||
San Martín de Tours
|
IRSA
|
100%
|
03/01/2003
|
- | 3,492 | - |
99%
|
99%
|
CABA
|
- | - | - | 124 | ||||||||||||||||||||||||||||||
El Encuentro
|
IRSA
|
100%
|
11/18/1997
|
- | 127,795 | - |
100%
|
99%
|
Buenos Aires
|
461 | 7,944 | 11,698 | - | ||||||||||||||||||||||||||||||
Abril Club de Campo – Lots
|
IRSA
|
100%
|
01/03/1995
|
- | 5,135 | - |
99%
|
99%
|
Buenos Aires
|
644 | 1,750 | 1,113 | - | ||||||||||||||||||||||||||||||
Abril Club de Campo - Casona (5)
|
IRSA
|
100%
|
01/03/1995
|
31,224 | 34,605 | - |
-
|
-
|
Buenos Aires
|
- | - | - | 2,357 | ||||||||||||||||||||||||||||||
Torres Jardín
|
IRSA
|
100%
|
07/18/1996
|
- | - |
-
|
-
|
CABA
|
- | 44 | 811 | - | |||||||||||||||||||||||||||||||
Apartment Entre Rios 465/9
|
IRSA Commercial Properties
|
100%
|
-
|
Buenos Aires
|
1,400 | ||||||||||||||||||||||||||||||||||||||
Horizons
|
IRSA
|
50%
|
01/16/2007
|
- | 71,512 | - |
100%'
|
98%
|
Buenos Aires
|
5,225 | 22,890 | 117,090 | 3,130 | ||||||||||||||||||||||||||||||
Units to be received
|
- | - | - | - | - | ||||||||||||||||||||||||||||||||||||||
Beruti (Astor Palermo) (1)
|
IRSA Commercial Properties
|
100%
|
06/24/2008
|
- | 2,632 | - |
-
|
-
|
CABA
|
- | - | - | 32,872 | ||||||||||||||||||||||||||||||
Caballito Manzana 35
|
IRSA
|
100%
|
10/22/1998
|
- | 8,258 | - |
-
|
-
|
CABA
|
- | - | - | 52,205 | ||||||||||||||||||||||||||||||
CONIL - Güemes 836 - Mz 99 and Güemes 902 - Mz 95 and Retail Stores
|
IRSA Commercial Properties
|
100%
|
11/05/2014
|
- | 1,389 | - |
-
|
-
|
Buenos Aires
|
- | - | - | 5,409 | ||||||||||||||||||||||||||||||
Canteras Natal Crespo (2 commercial parcels) | IRSA | - | - | 40,333 | - | 60,499 | - | - | Buenos Aires | - | - | 39 | 3,595 | ||||||||||||||||||||||||||||||
Subtotal Residential
|
71,557 | 270,082 | 60,499 | 15,085 | 85,531 | 141,996 | 101,631 | ||||||||||||||||||||||||||||||||||||
Land Reserves
|
|||||||||||||||||||||||||||||||||||||||||||
Isla Sirgadero
|
IRSA
|
100%
|
02/16/2007
|
8,360,000 | - | - |
-
|
-
|
Santa Fe
|
- | - | - | 2,894 | ||||||||||||||||||||||||||||||
Pilar R8 Km 53
|
IRSA
|
100%
|
05/29/1997
|
74,828 | - | - |
-
|
-
|
Buenos Aires
|
- | - | - | 1,55 | ||||||||||||||||||||||||||||||
Pontevedra
|
IRSA
|
100%
|
02/28/1998
|
730,994 | - | - |
-
|
-
|
Buenos Aires
|
- | - | - | 918 | ||||||||||||||||||||||||||||||
Mariano Acosta
|
IRSA
|
100%
|
02/28/1998
|
967,29 | - | - |
-
|
-
|
Buenos Aires
|
- | - | - | 804 | ||||||||||||||||||||||||||||||
Merlo
|
IRSA
|
100%
|
02/28/1998
|
1,004,987 | - | - |
-
|
-
|
Buenos Aires
|
- | - | - | 639 | ||||||||||||||||||||||||||||||
San Luis Plot of Land
|
IRSA
|
50%
|
03/31/2008
|
3,250,523 | - | - |
-
|
-
|
San Luis
|
- | - | - | 1,584 | ||||||||||||||||||||||||||||||
Subtotal Land Reserves
|
14,388,622 | - | - | - | - | 8,389 | |||||||||||||||||||||||||||||||||||||
Future Developments
|
|||||||||||||||||||||||||||||||||||||||||||
Mixed Uses
|
|||||||||||||||||||||||||||||||||||||||||||
UOM Lujan (7)
|
IRSA Commercial Properties
|
100%
|
05/31/2008
|
1,160,000 | - | - | N/A | N/A |
Buenos Aires
|
- | - | - | 41,972 | ||||||||||||||||||||||||||||||
La Adela | IRSA | 100% | 08/01/2014 | 10,580,000 | - | - | N/A | N/A | Buenos Aires | 1,400 | - | - | 214,594 | ||||||||||||||||||||||||||||||
Nobleza Piccardo (8)
|
IRSA Commercial Properties
|
50%
|
05/31/2011
|
159,995 | - | 127,996 | N/A | N/A |
Buenos Aires
|
- | - | - | 40,059 | ||||||||||||||||||||||||||||||
Puerto Retiro
|
IRSA
|
50%
|
05/18/1997
|
82,051 | - | - | N/A | N/A |
CABA
|
- | - | - | 22,128 | ||||||||||||||||||||||||||||||
Solares Santa María (9)
|
IRSA
|
100%
|
07/10/1997
|
716,058 | - | - | N/A | N/A |
CABA
|
- | - | - | 171,461 | ||||||||||||||||||||||||||||||
Residential
|
-
|
-
|
- | - | - | - | |||||||||||||||||||||||||||||||||||||
Coto Abasto Air Space
|
IRSA Commercial Properties
|
100%
|
09/24/1997
|
- | - | 21,536 | N/A | N/A |
CABA
|
- | - | - | 8,945 | ||||||||||||||||||||||||||||||
Neuquén – Housing Plots of Land
|
IRSA Commercial Properties
|
100%
|
07/06/1999
|
13 | - | 18 | N/A | N/A |
Neuquén
|
- | 13,390 | - | 803 | ||||||||||||||||||||||||||||||
Uruguay Zetol
|
IRSA
|
90%
|
06/01/2009
|
152,977 | 62,756 | - | N/A | N/A |
Uruguay
|
- | - | - | 62,567 | ||||||||||||||||||||||||||||||
Uruguay Vista al Muelle
|
IRSA
|
90%
|
06/01/2009
|
102,216 | 62,737 | - | N/A | N/A |
Uruguay
|
- | - | - | 43,362 | ||||||||||||||||||||||||||||||
Pereiraola (Greenville)
|
IRSA
|
100%
|
04/21/2010
|
- | 39,634 | - |
-
|
-
|
Buenos Aires
|
- | - | - | 8,200 | ||||||||||||||||||||||||||||||
Retail
|
|||||||||||||||||||||||||||||||||||||||||||
Caballito Shopping Plot of Land (10)
|
IRSA Commercial Properties
|
100%
|
- | 23,791 | - | - | N/A | N/A |
CABA
|
- | - | - | 45,812 | ||||||||||||||||||||||||||||||
Potential Dot Expansion
|
IRSA Commercial Properties
|
80%
|
- | 15,881 | - | 47,643 | N/A | N/A |
CABA
|
- | - | - | - | ||||||||||||||||||||||||||||||
Offices
|
|||||||||||||||||||||||||||||||||||||||||||
Philips Adjoining Plots - Offices 1 and 2
|
IRSA Commercial Properties
|
80%
|
11/28/2006
|
12,8 | - | 38,4 | N/A | N/A |
CABA
|
- | - | - | 25,336 | ||||||||||||||||||||||||||||||
Baicom
|
IRSA
|
50%
|
12/23/2009
|
6,905 | - | 34,5 | N/A | N/A |
CABA
|
- | - | - | 4,183 | ||||||||||||||||||||||||||||||
Intercontinental Plaza II(11)
|
IRSA Commercial Properties
|
100%
|
02/28/1998
|
6,135 | - | 19,598 | N/A | N/A |
CABA
|
- | - | - | 1,564 | ||||||||||||||||||||||||||||||
Catalinas Norte Plot
|
IRSA
|
100%
|
12/17/2009
|
3,649 | - | 35,3 | N/A | N/A |
CABA
|
- | - | - | 109,496 | ||||||||||||||||||||||||||||||
Subtotal Future Development
|
13,035,458 | 165,127 | 342,973 | 1,400 | 13,390 | - | 800,482 | ||||||||||||||||||||||||||||||||||||
Total Land Reserves
|
27,495,637 | 435,209 | 403,472 | 16,485 | 98,921 | 141,996 | 910,516 |
(1)
|
Area intended for sale means own square meters of residential apartments, including parking spaces and storage spaces. Stated at 100%, before any sale.
|
(2)
|
Sold % comprises such sale transactions for which a Purchase Agreement (Boleto) has been executed, for which Possession has been taken or a Title Deed has been signed. Includes square meters of residential apartments, parking and storage spaces.
|
(3)
|
The Title Deed executed % comprises such sale transactions for which a Title Deed has been executed. Includes the square meters of residential apartments, parking and storage spaces.
|
(4)
|
In such case where IRSA/IRSA Commercial Properties received units under a barter agreement, the "Area intended for sale" corresponds to such area received rather than the entire development.
|
(5)
|
The Area intended for sale includes 31,224 sqm of land and 4,712.81 sqm in the aggregate of La Casona (deducting 1,331.76 sqm of ground floor).
|
(6)
|
The Area intended for sale does not include 171 commercial parking spaces to be received or rebate units.
|
(7)
|
The Feasibility of Mixed Uses Permit has been applied for and provincial approval is pending.
|
(8)
|
The 127,996 square meters derive from the current regulations, we are working on a preliminary project of 479,415 square meters intended for construction (pending approval).
|
(9)
|
The Feasibility permit has been applied for 716,058 square meters intended for construction, and approval is pending from the Legislature of the City of Buenos Aires.
|
(10)
|
Preliminary project of 71,374 square meters intended for construction, approval of urban parameters is pending.
|
(11)
|
The 6,135 square meters of Land are those of the parcel, which includes Inter I and II. During May, 2015, we reported that, through IRSA Commercial Properties, we have signed an agreement to transfer to a non related party 8,470 sqm corresponding to nine office floors and the sign of the deed and the delivery of the units was on June 30, 2015. During September, 2015, we sold through IRSA Commercial Properties seven floors of Intercontinental Plaza, for more information please see “Item 4. Recent Developments.”
|
(12)
|
On September 3, 2015, we signed the transfer deed for the sale of the "Isla Sirgadero" plot of land. The price of the transaction was Ps. 10.7 million.
|
Hotels |
Date of Acquisition
|
IRSA’s Interest
|
Number of rooms
|
Occupancy(1)
|
Average Price per Room Ps.(2)
|
Fiscal Year Sales as of June 30,
|
Book Value
|
|||||||||||||||||||||||||||||
2015
|
2014
|
2013
|
||||||||||||||||||||||||||||||||||
Intercontinental (3)
|
11/01/1997
|
76.34 | % | 309 | 68.74 | % | 1,276 | 143,281 | 123,925 | 87,081 | 51,875 | |||||||||||||||||||||||||
Sheraton Libertador (4)
|
03/01/1998
|
80.00 | % | 200 | 75.75 | % | 1,142 | 93,801 | 74,178 | 52,089 | 31,400 | |||||||||||||||||||||||||
Llao Llao (5)
|
06/01/1997
|
50.00 | % | 205 | 51.37 | % | 2,746 | 159,215 | 133,459 | 86,666 | 81,539 | |||||||||||||||||||||||||
Total
|
- | - | 714 | 65.69 | % | 1,564 | 396,297 | 331,562 | 225,836 | 164,814 |
(1) Accumulated average in the twelve-month period.
|
||||||||||
(2) Accumulated average in the twelve-month period.
|
||||||||||
(3) Through Nuevas Fronteras S.A. (Subsidiary of IRSA).
|
||||||||||
(4) Through Hoteles Argentinos S.A.
|
||||||||||
(5) Through Llao Llao Resorts S.A.
|
Lipstick Building
|
Jun-15
|
Jun-14
|
YoY Var
|
|||||||||
Gross Leasable Area (sqm)
|
58,094 | 58,092 | - | |||||||||
Occupancy
|
91.86 | % | 88.94 | % |
2.92pp
|
|||||||
Rent (US$/sqm)
|
64.74 | 63.69 | 1.65 | % |
At June 30,
|
% Change
|
|||||||||||
2015
|
2014
|
2015/2014 | ||||||||||
(in millions of Pesos, except for percentages)
|
||||||||||||
Bonds
|
Ps. | 4,926.7 | Ps. | 3,501.7 | 40.7 | % | ||||||
Subordinated Bonds
|
100.0 | - |
NM
|
|||||||||
Borrowings from Central Bank.
|
0.1 | 0.1 | 42.0 | % | ||||||||
Borrowings from banks and international entities
|
297.4 | 558.4 | -46.8 | % | ||||||||
Deposits
|
18,191.2 | 13,691.3 | 32.9 | % | ||||||||
Total
|
Ps. | 23,515.4 | Ps. | 17,751.5 | 32.5 | % |
(1)
|
Excludes accrued interest.
|
·
|
a prohibition to include automatic price adjustment clauses based on inflation increases in lease agreements; and
|
·
|
the imposition of a two-year minimum lease term for all purposes, except in particular cases such as embassy, consulate or international organization venues, room with furniture for touristic purposes for less than three months, custody and bailment of goods, exhibition or offering of goods in fairs or in cases where due to the circumstances, the subject matter of the lease agreement requires a shorter term.
|
·
|
The registration of the intention to sell the property in subdivided plots with the Real Estate Registry (Registro de la Propiedad Inmueble) corresponding to the jurisdiction of the property. Registration will only be possible with regard to unencumbered property. Mortgaged property may only be registered where creditors agree to divide the debt in accordance with the subdivided plots. However, creditors may be judicially compelled to agree to the division.
|
·
|
The preliminary registration with the Real Estate Registry of the purchase instrument within 30 days of execution of the agreements.
|
·
|
deprive obligations of their nature or limit liability for damages;
|
·
|
imply a waiver or restriction of consumer rights and an extension of seller rights; and
|
·
|
impose the shifting of the burden of proof from the consumer to the seller in order to protect the consumers.
|
Subsidiary
|
Activity
|
Country of
incorporation
|
Ownership
percentage (1)
|
Voting power
percentage
|
Percentage
of our total
net revenues
|
|||||||||
IRSA Commercial Properties S.A.
|
Real estate
|
Argentina
|
95.80 | % | 95.80 | % | 81.06 | % | ||||||
E-Commerce Latina S.A.
|
Investment
|
Argentina
|
100 | % | 100 | % | 0 | % | ||||||
Efanur S.A.
|
Investment
|
Uruguay
|
100 | % | 100 | % | 0 | % | ||||||
Hoteles Argentinos S.A.
|
Hotel
|
Argentina
|
80 | % | 80 | % | 2. 76 | % | ||||||
Llao Llao Resorts S.A.
|
Hotel
|
Argentina
|
50 | % | 50 | % | 4.68 | % | ||||||
Nuevas Fronteras S.A
|
Hotel
|
Argentina
|
76.34 | % | 76.34 | % | 4.21 | % | ||||||
Inversora Bolívar S.A.
|
Investment
|
Argentina
|
100 | % | 100 | % | 0 | % | ||||||
Palermo Invest S.A.
|
Investment
|
Argentina
|
100 | % | 100 | % | 0 | % | ||||||
Ritelco S.A.
|
Investment
|
Uruguay
|
100 | % | 100 | % | 0 | % | ||||||
Solares de Santa Maria S.A.
|
Real estate
|
Argentina
|
100 | % | 100 | % | 0.14 | % | ||||||
Tyrus S.A.
|
Investment
|
Uruguay
|
100 | % | 100 | % | 0.83 | % | ||||||
Unicity S.A.
|
Investment
|
Argentina
|
100 | % | 100 | % | 0.0 | % |
(1)
|
Includes direct and indirect ownership.
|
Property (6)
|
Date of Acquisition
|
Leasable/
Sale m2 (1)
|
Location
|
Net Book
Value Ps.(2)
|
Encumbrance
|
Outstanding principal amount Ps./000
|
Maturity Date
|
Balance due at maturity
Ps./000
|
Rate
|
Use
|
Occupancy rate (7)
|
||||||||||||||||||||||||||
Intercontinental Plaza(10)
|
18/11/1997
|
22,535 |
City of Buenos Aires
|
41,106 | - | - | - | - | - |
Office Rental
|
100,0 | % | |||||||||||||||||||||||||
Bouchard 710
|
01/06/2005
|
15,014 |
City of Buenos Aires
|
60,923 | - | - | - | - | - |
Office Rental
|
100,0 | % | |||||||||||||||||||||||||
Bouchard 551
|
15/03/2007
|
- |
City of Buenos Aires
|
7,698 | - | - | - | - | - |
Office Rental
|
100,0 | % | |||||||||||||||||||||||||
Libertador 498
|
20/12/1995
|
620 |
City of Buenos Aires
|
3,938 | - | - | - | - | - |
Office Rental
|
100,0 | % | |||||||||||||||||||||||||
Maipú 1300 (12)
|
28/09/1995
|
4,759 |
City of Buenos Aires
|
14,713 | - | - | - | - | - |
Office Rental
|
90.9 | % | |||||||||||||||||||||||||
Madero 1020
|
21/12/1995
|
- |
City of Buenos Aires
|
113 | - | - | - | - | - |
Office Rental
|
100,0 | % | |||||||||||||||||||||||||
Suipacha 652
|
22/11/1991
|
11,453 |
City of Buenos Aires
|
8,255 | - | - | - | - | - |
Office Rental
|
96.7 | % | |||||||||||||||||||||||||
República Building
|
28/04/2008
|
19,885 |
City of Buenos Aires
|
194,971 | - | - | - | - | - |
Office Rental
|
93.6 | % | |||||||||||||||||||||||||
Dique IV, Juana Manso 295
|
02/12/1997
|
11,298 |
City of Buenos Aires
|
51,835 | - | - | - | - | - |
Office Rental
|
99.5 | % | |||||||||||||||||||||||||
Torre Bank Boston
|
27/08/2007
|
14,873 |
City of Buenos Aires
|
138,432 | - | - | - | - | - |
Office Rental
|
100 | % | |||||||||||||||||||||||||
Terreno Catalinas Norte
|
17/12/2009
|
N/A |
City of Buenos Aires
|
109,496 | - | - | - | - | - |
Other Rentals
|
N/A | ||||||||||||||||||||||||||
Dot Building (3)
|
28/11/2006
|
11,242 |
City of Buenos Aires
|
126,365 | - | - | - | - | - |
Office Rental
|
100,0 | % | |||||||||||||||||||||||||
Other Properties (5)
|
N/A | N/A |
City of Buenos Aires
|
53,627 | - | - | - | - | - |
Other Rentals
|
N/A | ||||||||||||||||||||||||||
Alto Palermo Shopping (3)
|
23/11/1997
|
19,545.0 |
City of Buenos Aires
|
221,792 | - | - | - | - | - |
Shopping Center
|
99.7 | % | |||||||||||||||||||||||||
Abasto Shopping (3)
|
17/07/1994
|
36,669.1 |
City of Buenos Aires
|
255,335 | - | - | - | - | - |
Shopping Center
|
100 | % | |||||||||||||||||||||||||
Alto Avellaneda (3)
|
23/11/1997
|
36,728.6 |
Province of Buenos Aires
|
131,140 | - | - | - | - | - |
Shopping Center
|
99,9 | % | |||||||||||||||||||||||||
Paseo Alcorta (3)
|
06/06/1997
|
15,432.9 |
City of Buenos Aires
|
106,091 | - | - | - | - | - |
Shopping Center
|
100 | % | |||||||||||||||||||||||||
Patio Bullrich (3)
|
01/10/1998
|
11,636.2 |
City of Buenos Aires
|
112,426 | - | - | - | - | - |
Shopping Center
|
100 | % | |||||||||||||||||||||||||
Alto Noa (3)
|
29/03/1995
|
19,072.9 |
City of Salta
|
29,708 | - | - | - | - | - |
Shopping Center
|
100 | % | |||||||||||||||||||||||||
Buenos Aires Design (3)
|
18/11/1997
|
13,888.2 |
City of Buenos Aires
|
12,860 | - | - | - | - | - |
Shopping Center
|
94.6 | % | |||||||||||||||||||||||||
Alto Rosario Shopping (3)
|
09/11/2004
|
28,395.6 |
City of Rosario
|
115,014 | - | - | - | - | - |
Shopping Center
|
97.9 | % | |||||||||||||||||||||||||
Mendoza Plaza Shopping (3)
|
02/12/2004
|
42,039.5 |
City of Mendoza
|
101,657 | - | - | - | - | - |
Shopping Center
|
96,1 | % | |||||||||||||||||||||||||
Córdoba Shopping – Villa Cabrera (3)
|
31/12/2006
|
15,328.0 |
City of Cordoba
|
61,111 |
Hipoteca -Anticresis
|
1,4 |
Ene-17
|
3,3 |
Libor+1,5%+CER
|
Shopping Center
|
99,8 | % | |||||||||||||||||||||||||
Dot Baires Shopping (3)
|
01/05/2009
|
49,847.9 |
City of Buenos Aires
|
377,260 | - | - | - | - |
Shopping Center
|
99,7 | % | ||||||||||||||||||||||||||
Soleil Factory (3)
|
01/07/2010
|
13,993.1 |
Province of Buenos Aires
|
84,301 | - | - | - | - | - |
Shopping Center
|
99.4 | % | |||||||||||||||||||||||||
Alto Comahue (3)
|
06/07/1999
|
9,456.9 |
Province of Neuquen
|
309,103 | - | - | - | - | - |
Shopping Center (in construction)
|
94.2 | % | |||||||||||||||||||||||||
Distrito Arcos (3)
|
01/12/2011
|
12,127.3 |
City of Buenos Aires
|
229,800 | - | - | - | - | - |
Shopping Center (in construction)
|
97.3 | % | |||||||||||||||||||||||||
Santa María del Plata
|
10/07/1997
|
716,058 |
Province of Buenos Aires
|
158,951 | - | - | - | - | - |
Land Reserve
|
N/A | ||||||||||||||||||||||||||
Patio Olmos (3)
|
25/09/2007
|
5,147 |
City of Cordoba
|
27,050 | - | - | - | - | - |
Land Reserve
|
N/A | ||||||||||||||||||||||||||
Caballito Plot of Land
|
11/03/1997
|
8,173 |
City of Buenos Aires
|
45,812 | - | - | - | - | - |
Land Reserve
|
N/A | ||||||||||||||||||||||||||
Other Land Reserves (4)
|
N/A | 14,388,622 |
City and Province of Buenos Aires.
|
8,403 | - | - | - | - | - |
Land Reserve
|
N/A | ||||||||||||||||||||||||||
Luján (3)
|
31/05/08
|
1,160,000 |
Province of Buenos Aires.
|
33,906 | - | - | - | - | - |
Land Reserve
|
N/A | ||||||||||||||||||||||||||
Hotel Llao Llao (11)
|
01/06/1997
|
24,000 |
Ciudad de Bariloche
|
81,539 | - | - | - | - | - |
Hotel
|
51.37 | % | |||||||||||||||||||||||||
Hotel Intercontinental
|
01/11/1997
|
37,600 |
City of Buenos Aires
|
51,875 | - | - | - | - | - |
Hotel
|
68.74 | % | |||||||||||||||||||||||||
Hotel Libertador
|
01/03/1998
|
17,463 |
City of Buenos Aires
|
31,400 | - | - | - | - | - |
Hotel
|
75.75 | % |
Unresolved Staff Comments.
|
·
|
Business combinations;
|
·
|
Impairment testing of goodwill and intangible assets;
|
·
|
Determination of the fair value of financial instruments;
|
·
|
Trading property;
|
·
|
Allowances;
|
·
|
Taxation;
|
·
|
Venture capital organization;
|
·
|
Acquisition of assets carried out between entities under common control.
|
Description
|
Pricing model
|
Pricing method
|
Parameters
|
Range
|
||||||
Foreign currency-contracts
|
Present value method
|
Theoretical price
|
Money market curve, interest-rate curve; Foreign exchange curve.
|
- | ||||||
Commitment to tender offer IDBD
|
Black-Scholes
|
Theoretical price
|
Underlying asset price; share price volatility (historical) and interest-rate curve (NIS rate curve).
|
Underlying asset price
3.5 to 4.7
Share price volatility
30% to 40%
Money market interest rate 0.7% to 1%
|
||||||
Other Borrowings
|
Weighted probability of the difference between market price and the Commitment to tender offer of shares in IDBD
|
Theoretical price
|
Underlying asset price; share price volatility (historical) and interest-rate curve (NIS rate curve). IRSA 2017 interest-rate and scenario weights.
|
Underlying asset price
1.55 to 2.35
Share price volatility
60% to 80%
Money market interest rate 0.02% to 0.9%
|
||||||
IDBD Shares
|
Weighted probability of the difference between market price and the Commitment to tender offer of shares in IDBD
|
Theoretical price
|
Underlying asset price; share price volatility (historical) and interest-rate curve (NIS rate curve). IRSA 2017 interest-rate and scenario weights.
|
Underlying asset price
1.55 to 2.35
Share price volatility
60% to 80%
Money market interest rate 0.02% to 0.9%
|
||||||
Call option of Arcos
|
Discounted cash flow
|
- |
Projected income and discounted interest rate.
|
- | ||||||
Interest rate swaps
|
Cash flow
|
Theoretical price
|
Interest rate and cash flow forward contract.
|
- | ||||||
Preferred shares of Condor
|
Binomial tree
|
Theoretical price
|
Underlying asset price (market price), share price volatility (historical) and money market interest-rate curve (Libor rate).
|
Underlying asset price 1.96 to 2.65
Share price volatility 56% to 76%
Money market interest rate 0.67% to
0.83%
|
||||||
Warrants of Condor
|
Black-Scholes
|
Theoretical price
|
Underlying asset price (market price), share price volatility (historical) and money market interest-rate curve (Libor rate).
|
Underlying asset price 1.96 to 2.65
Share price volatility 56% to 76%
Money market interest rate 0.67% to
0.83%
|
·
|
the acquisition, development and operation of shopping centers,
|
·
|
the acquisition and development of office and other non-shopping center properties primarily for rental purposes,
|
·
|
the acquisition and operation of luxury hotels,
|
·
|
the development and sale of residential properties,
|
·
|
the acquisition of undeveloped land reserves for future development or sale, and
|
·
|
selective investments outside Argentina.
|
Fiscal year ended June 30,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
GDP growth
|
1.2 | % | 0.0 | % | 5.5 | % | ||||||
Inflation (IPIM)(1)
|
13,6 | % | 27.7 | % | 13.5 | % | ||||||
Inflation (CPI)(2)
|
15.0 | %(4) | 15.0 | %(4) | 10.5 | % | ||||||
Appreciation (depreciation) of the Peso against the U.S. Dollar
|
(12 | %) | (50.6 | %) | (19.1 | %) | ||||||
Average exchange rate per US$1.00(3)
|
Ps.8.6098
|
Ps.6.9333
|
Ps.4.9339
|
(1)
|
IPIM is the wholesale price index as measured by the Argentine Ministry of Economy and Production.
|
(2)
|
CPI is the consumer price index as measured by the Argentine Ministry of Economy and Production.
|
(3)
|
Represents average of the selling and buying exchange rate.
|
Sources:
|
INDEC, Argentine Ministry of Economy and Production, Banco de la Nación Argentina.
|
Year ended June 30, |
Consumer Price Index
|
Wholesale Price Index
|
||||||
2002
|
28.4 |
%
|
88.2 | % | ||||
2003
|
10.2 |
%
|
8.1 | % | ||||
2004
|
4.9 |
%
|
8.6 | % | ||||
2005
|
9.0 |
%
|
7.7 | % | ||||
2006
|
11.0 |
%
|
12.1 | % | ||||
2007
|
8.8 |
%
|
9.4 | % | ||||
2008
|
9.3 |
%
|
13.8 | % | ||||
2009
|
5.3 |
%
|
5.6 | % | ||||
2010
|
11.0 |
%
|
15.5 | % | ||||
2011
|
9.7 |
%
|
12.5 | % | ||||
2012
|
9.9 |
%
|
12.8 | % | ||||
2013
|
10.5 |
%
|
13.5 | % | ||||
2014
|
15.0 |
%(1)
|
27.7 | % | ||||
2015
|
15.0 |
%
|
13.4 | % |
(1)
|
In January 2014 the Argentine government established IPCNu, which more broadly reflects consumer prices by considering price information from the 23 provinces of Argentina and the City of Buenos Aires. Therefore, the consumer price index for the fiscal year ended June 30, 2014 only takes into account the six month period starting on January 1, 2014.
|
•
|
The “Shopping Centers” segment includes the operating results of the Company’s shopping centers portfolio principally comprised of lease and service revenues related to rental of commercial space and other spaces in the shopping centers of the Company.
|
•
|
The “Offices and others” segment includes the operating results of the Company’s lease revenues of office and other rental space and other service revenues related to the office activities.
|
•
|
The “Sales and Development” segment includes the operating results of the sales of Undeveloped parcels of land and/or trading properties, as the results related with its development and maintenance. Also included in this segment are the results of the sale of real property intended for rent, sales of hotels and other properties included in the international segment.
|
•
|
The “Hotels” segment includes the operating results of the Company’s hotels mainly comprised of room, catering and restaurant revenues.
|
•
|
The “International” segment includes profit or loss on investments in subsidiaries and/or associates that mainly operate in the United States in relation to the lease of office buildings and hotels in that country, and the results arising from investment in IDBD at fair value.
|
•
|
The “Financial operations and others” segment primarily includes the financial activities carried out by the associates Banco Hipotecario and Tarshop, and consumer finance residual financial operations of Apsamedia S.A. (currently merged with IRSA Commercial Properties). The e-commerce activities conducted through the associate Avenida Inc. are also included until the first quarter of the current fiscal year. This investment began to be considered a financial asset from the second quarter of this fiscal year.
|
Fiscal Year ended June 30, 2015
In thousands of Ps.
|
||||||||||||||||||||
Total Segment Information
|
Adjustment for share of profit / (loss) of joint ventures
|
Common maintenance expenses
and collective promotion fund
|
Adjustment to income for elimination between segment transactions
|
As per Statement
of income
|
||||||||||||||||
Income from sales, rents and services
|
2,548,440 | (27,532 | ) | - | (5,487 | ) | 2,515,421 | |||||||||||||
Income from common maintenance expenses and collective promotion fund
|
- | - | 887,208 | - | 887,208 | |||||||||||||||
Costs
|
(627,903 | ) | 14,752 | (901,283 | ) | 3,860 | (1,510,574 | ) | ||||||||||||
Gross Profit / (loss)
|
1,920,537 | (12,780 | ) | (14,075 | ) | (1,627 | ) | 1,892,055 | ||||||||||||
Gain from disposal of investment properties
|
1,162,770 | - | - | - | 1,162,770 | |||||||||||||||
General and administrative expenses
|
(378,125 | ) | 1,042 | - | 2,602 | (374,481 | ) | |||||||||||||
Selling expenses
|
(195,866 | ) | 2,075 | - | 321 | (193,470 | ) | |||||||||||||
Other operating results, net
|
28,679 | 1,105 | - | (1,296 | ) | 28,488 | ||||||||||||||
Profit / (loss) from operations
|
2,537,995 | (8,558 | ) | (14,075 | ) | - | 2,515,362 | |||||||||||||
Share of (loss) / profit of associates and joint ventures
|
(1,035,036
|
) | 12,175 | - | - |
(1,022,861
|
) | |||||||||||||
Segment Profit / (loss) Before Financing and Taxation
|
1,502,959
|
3,617 | (14,075 | ) | - |
1,492,501
|
Fiscal Year ended June 30, 2014
In thousands of Ps.
|
||||||||||||||||||||
Total Segment Information
|
Adjustment for share of profit / (loss) of joint ventures
|
Common maintenance expenses
and collective promotion fund
|
Adjustment to income for elimination between segment transactions
|
As per Statement of comprehensive income
|
||||||||||||||||
Income from sales, rents and services
|
2,155,760 | (40,636 | ) | - | (6,250 | ) | 2,108,874 | |||||||||||||
Income from common maintenance expenses and collective promotion fund
|
- | - | 736,302 | - | 736,302 | |||||||||||||||
Costs
|
(638,654 | ) | 23,183 | (743,703 | ) | 4,681 | (1,354,493 | ) | ||||||||||||
Gross Profit / (loss)
|
1,517,106 | (17,453 | ) | (7,401 | ) | (1,569 | ) | 1,490,683 | ||||||||||||
Gain from disposal of investment properties
|
235,507 | - | - | - | 235,507 | |||||||||||||||
General and administrative expenses
|
(300,066 | ) | 804 | - | 2,334 | (296,928 | ) | |||||||||||||
Selling expenses
|
(150,109 | ) | 3,507 | - | 366 | (146,236 | ) | |||||||||||||
Other operating results, net
|
(47,922 | ) | 3,183 | - | (1,131 | ) | (45,870 | ) | ||||||||||||
Profit / (loss) from operations
|
1,254,516 | (9,959 | ) | (7,401 | ) | - | 1,237,156 | |||||||||||||
Share of (loss) / profit of associates and joint ventures
|
(440,139 | ) | 26,368 | - | - | (413,771 | ) | |||||||||||||
Segment Profit / (loss) Before Financing and Taxation
|
814,377 | 16,409 | (7,401 | ) | - | 823,385 |
Fiscal Year ended June 30, 2013
In thousands of Ps.
|
||||||||||||||||||||
Total Segment Information
|
Adjustment for share of profit / (loss) of joint ventures
|
Common maintenance expenses
and collective promotion fund
|
Adjustment to income for elimination between segment transactions
|
As per Statement of comprehensive income
|
||||||||||||||||
Income from sales, rents and services
|
1,728,248 | (131,459 | ) | - | (3,899 | ) | 1,592,890 | |||||||||||||
Income from common maintenance expenses and collective promotion fund
|
- | - | 594,290 | - | 594,290 | |||||||||||||||
Costs
|
(591,610 | ) | 101,112 | (599,780 | ) | 2,667 | (1,087,611 | ) | ||||||||||||
Gross profit / (loss)
|
1,136,638 | (30,347 | ) | (5,490 | ) | (1,232 | ) | 1,099,569 | ||||||||||||
Gain from disposal of investment properties
|
183,767 | - | - | - | 183,767 | |||||||||||||||
General and administrative expenses
|
(198,772 | ) | 2,157 | - | 1,774 | (194,841 | ) | |||||||||||||
Selling expenses
|
(117,230 | ) | 10,993 | - | 112 | (106,125 | ) | |||||||||||||
Other operating results, net
|
92,425 | 1,497 | - | (654 | ) | 93,268 | ||||||||||||||
Profit / (loss) from operations
|
1,096,828 | (15,700 | ) | (5,490 | ) | - | 1,075,638 | |||||||||||||
Share of (loss) / profit of associates and joint ventures
|
(20,080 | ) | 12,689 | - | - | (7,391 | ) | |||||||||||||
Segment Profit / (loss) Before financing and Taxation
|
1,076,748 | (3,011 | ) | (5,490 | ) | - | 1,068,247 |
June 30,
2015
|
June 30,
2014
|
June 30,
2013
|
||||||||||
In thousands of Ps. | ||||||||||||
Total Assets per segment based on segment information
|
6,461,794
|
7,206,639 | 5,814,519 | |||||||||
Minus:
|
||||||||||||
Proportionate share in assets per segment of joint ventures (2)
|
(96,911 | ) | (148,752 | ) | (186,513 | ) | ||||||
Plus:
|
||||||||||||
Investment in joint ventures (1)
|
169,415 | 293,509 | 264,461 | |||||||||
Other non-reportable assets
|
3,095,075 | 2,458,710 | 2,434,062 | |||||||||
Total Consolidated Assets as per Statement of financial position
|
9,629,373
|
9,810,106 | 8,326,529 |
June 30,
2015
|
June 30,
2014
|
June 30,
2013
|
||||||||||
Thousands of Ps. | ||||||||||||
Investment properties
|
87,583 | 137,253 | 161,664 | |||||||||
Property, plant and equipment
|
600 | 99 | 112 | |||||||||
Trading properties
|
3,130 | 5,908 | 19,396 | |||||||||
Goodwill
|
5,234 | 5,235 | 5,235 | |||||||||
Inventories
|
364 | 257 | 106 | |||||||||
Total proportionate share in assets per segment of joint ventures
|
96,911 | 148,752 | 186,513 |
Fiscal Year ended June 30, 2015
Thousands of Ps.
|
||||||||||||||||||||||||||||
Shopping Centers
|
Offices
and others
|
Sales and developments
|
Hotels
|
International
|
Financial operations and others
|
Total Urban Properties and Investment
|
||||||||||||||||||||||
Revenues (i)
|
1,778,310 | 332,728 | 15,085 | 396,297 | 25,873 | 147 | 2,548,440 | |||||||||||||||||||||
Costs
|
(290,302 | ) | (33,431 | ) | (19,109 | ) | (277,885 | ) | (7,121 | ) | (55 | ) | (627,903 | ) | ||||||||||||||
Gross Profit
|
1,488,008 | 299,297 | (4,024 | ) | 118,412 | 18,752 | 92 | 1,920,537 | ||||||||||||||||||||
Gain from disposal of investment properties
|
- | - | 1,162,770 | - | - | - | 1,162,770 | |||||||||||||||||||||
General and administrative expenses
|
(136,151 | ) | (58,971 | ) | (49,690 | ) | (77,567 | ) | (55,746 | ) | - | (378,125 | ) | |||||||||||||||
Selling expenses
|
(112,825 | ) | (21,130 | ) | (9,146 | ) | (52,386 | ) | - | (379 | ) | (195,866 | ) | |||||||||||||||
Other operating results, net
|
(48,810 | ) | (117,610 | ) | 13,093 | (461 | ) | 184,886 | (2,419 | ) | 28,679 | |||||||||||||||||
Profit / (loss) from operations
|
1,190,222 | 101,586 | 1,113,003 | (12,002 | ) | 147,892 | (2,706 | ) | 2,537,995 | |||||||||||||||||||
Share of profit / (loss) of associates and joint ventures
|
- | (2,570 | ) | 918 | 1,254 | (1,191,116 | ) | 156,478 | (1,035,036 | ) | ||||||||||||||||||
Segment Profit / (loss)
|
1,190,222 | 99,016 | 1,113,921 | (10,748 | ) | (1,043,224 | ) | 153,772 | 1,502,959 | |||||||||||||||||||
Investment properties
|
2,300,044 | 939,002 | 338,614 | - | - | - | 3,577,660 | |||||||||||||||||||||
Property, plant and equipment
|
48,345 | 28,013 | 1,242 | 164,815 | 1,319 | - | 243,734 | |||||||||||||||||||||
Trading properties
|
- | - | 134,534 | - | - | - | 134,534 | |||||||||||||||||||||
Goodwill
|
6,804 | 3,911 | - | - | - | - | 10,715 | |||||||||||||||||||||
Right to receive future units under barter agreements
|
- | - | 90,486 | - | - | - | 90,486 | |||||||||||||||||||||
Inventories
|
15,711 | - | 497 | 6,926 | - | - | 23,134 | |||||||||||||||||||||
Investments in associates and joint ventures
|
- | 20,746 | 46,555 | - | 909,911 | 1,404,319 | 2,381,531 | |||||||||||||||||||||
Operating assets (ii)
|
2,370,904 | 991,672 | 611,928 | 171,741 | 911,230 | 1,404,319 | 6,461,794 |
Fiscal Year ended June 30, 2014
Thousands of Ps.
|
||||||||||||||||||||||||||||
Shopping Centers
|
Offices and others
|
Sales and developments
|
Hotels
|
International
|
Financial operations and others
|
Total Urban Properties and Investment
|
||||||||||||||||||||||
Revenues (i)
|
1,383,008 | 271,159 | 85,531 | 331,562 | 83,926 | 574 | 2,155,760 | |||||||||||||||||||||
Costs
|
(293,278 | ) | (42,015 | ) | (33,498 | ) | (215,980 | ) | (53,510 | ) | (373 | ) | (638,654 | ) | ||||||||||||||
Gross Profit
|
1,089,730 | 229,144 | 52,033 | 115,582 | 30,416 | 201 | 1,517,106 | |||||||||||||||||||||
Gain from disposal of investment property
|
- | - | 235,507 | - | - | - | 235,507 | |||||||||||||||||||||
General and administrative expenses
|
(101,538 | ) | (41,945 | ) | (37,466 | ) | (59,585 | ) | (59,476 | ) | (56 | ) | (300,066 | ) | ||||||||||||||
Selling expenses
|
(73,427 | ) | (20,751 | ) | (13,706 | ) | (42,335 | ) | - | 110 | (150,109 | ) | ||||||||||||||||
Other operating results, net
|
(46,568 | ) | (3,060 | ) | 8,137 | (2,680 | ) | (895 | ) | (2,856 | ) | (47,922 | ) | |||||||||||||||
Profit / (loss) from operations
|
868,197 | 163,388 | 244,505 | 10,982 | (29,955 | ) | (2,601 | ) | 1,254,516 | |||||||||||||||||||
Share of profit / (loss) of associates and joint ventures
|
- | (899 | ) | 6,368 | 789 | (616,313 | ) | 169,916 | (440,139 | ) | ||||||||||||||||||
Segment Profit / (loss)
|
868,197 | 162,489 | 250,873 | 11,771 | (646,268 | ) | 167,315 | 814,377 | ||||||||||||||||||||
Investment properties
|
2,253,372 | 783,683 | 369,793 | - | - | - | 3,406,848 | |||||||||||||||||||||
Property, plant and equipment
|
20,455 | 30,026 | 3,744 | 164,386 | 1,501 | - | 220,112 | |||||||||||||||||||||
Trading properties
|
- | - | 141,161 | - | - | - | 141,161 | |||||||||||||||||||||
Goodwill
|
1,667 | 9,392 | - | - | - | - | 11,059 | |||||||||||||||||||||
Right to receive future units under barter agreements
|
- | - | 85,077 | - | - | - | 85,077 | |||||||||||||||||||||
Assets classified as held for sale (iii)
|
- | - | - | - | 1,357,866 | - | 1,357,866 | |||||||||||||||||||||
Inventories
|
10,625 | - | 584 | 6,011 | - | - | 17,220 | |||||||||||||||||||||
Investments in associates and joint ventures
|
- | 23,208 | 38,289 | 22,129 | 628,658 | 1,255,012 | 1,967,296 | |||||||||||||||||||||
Operating assets (ii)
|
2,286,119 | 846,309 | 638,648 | 192,526 | 1,988,025 | 1,255,012 | 7,206,639 |
Fiscal Year ended June 30, 2013
Thousands of Ps.
|
||||||||||||||||||||||||||||
Shopping Centers
|
Offices and
others
|
Sales and developments
|
Hotels
|
International
|
Financial operations and others
|
Total Urban Properties and Investment
|
||||||||||||||||||||||
Revenues (i)
|
1,103,044 | 217,171 | 141,996 | 225,836 | 38,998 | 1,203 | 1,728,248 | |||||||||||||||||||||
Costs
|
(241,057 | ) | (43,377 | ) | (106,399 | ) | (168,283 | ) | (31,587 | ) | (907 | ) | (591,610 | ) | ||||||||||||||
Gross Profit
|
861,987 | 173,794 | 35,597 | 57,553 | 7,411 | 296 | 1,136,638 | |||||||||||||||||||||
Gain from disposal of investment properties
|
- | - | 183,767 | - | - | - | 183,767 | |||||||||||||||||||||
General and administrative expenses
|
(67,596 | ) | (34,984 | ) | (32,901 | ) | (49,883 | ) | (13,158 | ) | (250 | ) | (198,772 | ) | ||||||||||||||
Selling expenses
|
(58,908 | ) | (11,360 | ) | (16,455 | ) | (28,919 | ) | - | (1,588 | ) | (117,230 | ) | |||||||||||||||
Other operating results, net
|
(45,020 | ) | (247 | ) | 6,342 | (369 | ) | 135,082 | (3,363 | ) | 92,425 | |||||||||||||||||
Profit / (loss) from operations
|
690,463 | 127,203 | 176,350 | (21,618 | ) | 129,335 | (4,905 | ) | 1,096,828 | |||||||||||||||||||
Share of profit / (loss) of associates and joint ventures
|
- | (2,514 | ) | 2,329 | 83 | (82,552 | ) | 62,574 | (20,080 | ) | ||||||||||||||||||
Segment Profit / (loss)
|
690,463 | 124,689 | 178,679 | (21,535 | ) | 46,783 | 57,669 | 1,076,748 | ||||||||||||||||||||
Investment properties
|
2,224,008 | 799,644 | 376,691 | - | 744,587 | - | 4,144,930 | |||||||||||||||||||||
Property, plant and equipment
|
17,385 | 23,029 | 3,972 | 168,200 | 199 | - | 212,785 | |||||||||||||||||||||
Trading properties
|
- | - | 125,549 | - | - | - | 125,549 | |||||||||||||||||||||
Goodwill
|
1,667 | 9,392 | - | - | 51,069 | - | 62,128 | |||||||||||||||||||||
Right to receive future units under barter agreements
|
- | - | 93,225 | - | - | - | 93,225 | |||||||||||||||||||||
Inventories
|
10,002 | - | 463 | 5,962 | - | - | 16,427 | |||||||||||||||||||||
Investments in associates and joint ventures
|
- | 23,385 | 32,759 | 21,339 | 802 | 1,081,190 | 1,159,475 | |||||||||||||||||||||
Total segment assets (ii)
|
2,253,062 | 855,450 | 632,659 | 195,501 | 796,657 | 1,081,190 | 5,814,519 |
Fiscal Year ended on June 30, 2015
In millions of Ps.
|
||||||||||||||||||||
Revenues
|
Income statement (i)
|
Interest in joint ventures
|
Common maintenance expenses
and collective promotion fund
|
Inter-segment eliminations
|
Segment-reporting
|
|||||||||||||||
Shopping Centers
|
2,570.9 | 13.1 | (805.6 | ) | - | 1,778.3 | ||||||||||||||
Offices and Others
|
397.3 | 9.2 | (79.3 | ) | 5.5 | 332.7 | ||||||||||||||
Sales and Developments
|
9.9 | 5.2 | - | - | 15.1 | |||||||||||||||
Hotels
|
396.3 | - | - | - | 396.3 | |||||||||||||||
International
|
28.1 | - | (2.3 | ) | - | 25.9 | ||||||||||||||
Financial Operations and Others
|
0.1 | - | - | - | 0.1 | |||||||||||||||
Total revenues
|
3,402.6 | 27.5 | (887.2 | ) | 5.5 | 2,548.4 |
Fiscal Year ended on June 30, 2014
In millions of Ps.
|
||||||||||||||||||||
Revenues
|
Income statement (i)
|
Interest in joint ventures
|
Common maintenance expenses
and collective promotion fund
|
Inter-segment eliminations
|
Segment-reporting
|
|||||||||||||||
Shopping Centers
|
2,032.0 | 9.3 | (659.7 | ) | 1.4 | 1,383.0 | ||||||||||||||
Offices and Others
|
327.6 | 8.5 | (69.7 | ) | 4.8 | 271.2 | ||||||||||||||
Sales and Developments
|
62.6 | 22.9 | - | - | 85.5 | |||||||||||||||
Hotels
|
331.6 | - | - | - | 331.6 | |||||||||||||||
International
|
90.8 | - | (6.9 | ) | - | 83.9 | ||||||||||||||
Financial Operations and Others
|
0.6 | - | - | - | 0.6 | |||||||||||||||
Total revenues
|
2,845.2 | 40.6 | (736.3 | ) | 6.3 | 2,155.8 |
Fiscal Year ended on June 30, 2015
In millions of Ps.
|
||||||||||||||||||||
Costs
|
Income statement
|
Interest in joint ventures
|
Common maintenance expenses
and collective promotion funds
|
Inter-segment eliminations
|
Segment-reporting
|
|||||||||||||||
Shopping Centers
|
(1,102.2 | ) | (4.0 | ) | 819.7 | (3.9 | ) | (290.3 | ) | |||||||||||
Offices and Others
|
(107.5 | ) | (5.2 | ) | 79.3 | - | (33.4 | ) | ||||||||||||
Sales and Developments
|
(13.6 | ) | (5.5 | ) | - | - | (19.1 | ) | ||||||||||||
Hotels
|
(277.9 | ) | - | - | - | (277.9 | ) | |||||||||||||
International
|
(9.4 | ) | - | 2.3 | - | (7.1 | ) | |||||||||||||
Financial Operations and Others
|
(0.1 | ) | - | - | - | (0.1 | ) | |||||||||||||
Total Costs
|
(1,510.6 | ) | (14.8 | ) | 901.3 | (3.9 | ) | (627.9 | ) |
Fiscal Year ended on June 30, 2014
In millions of Ps.
|
||||||||||||||||||||
Costs
|
Income statement
|
Interest in joint ventures
|
Common maintenance expenses
and collective promotion funds
|
Inter-segment eliminations
|
Segment-reporting
|
|||||||||||||||
Shopping Centers
|
(952.9 | ) | (2.8 | ) | 667.1 | (4.7 | ) | (293.3 | ) | |||||||||||
Offices and Others
|
(107.3 | ) | (4.4 | ) | 69.7 | - | (42.0 | ) | ||||||||||||
Sales and Developments
|
(17.5 | ) | (16.0 | ) | - | - | (33.5 | ) | ||||||||||||
Hotels
|
(216.0 | ) | - | - | - | (216.0 | ) | |||||||||||||
International
|
(60.4 | ) | - | 6.9 | - | (53.5 | ) | |||||||||||||
Financial Operations and Others
|
(0.4 | ) | - | - | - | (0.4 | ) | |||||||||||||
Total Costs
|
(1,354.5 | ) | (23.2 | ) | 743.7 | (4.7 | ) | (638.7 | ) |
Fiscal Year ended on June 30, 2015
In millions of Ps.
|
||||||||||||||||||||
Gross profit
|
Income statement
|
Interest in joint ventures
|
Common maintenance expenses
and collective promotion fund
|
Inter-segment eliminations
|
Segment-reporting
|
|||||||||||||||
Shopping Centers
|
1,468.7 | 9.1 | 14.1 | (3.9 | ) | 1,488.0 | ||||||||||||||
Offices and Others
|
289.8 | 4.0 | - | 5.5 | 299.3 | |||||||||||||||
Sales and Developments
|
(3.7 | ) | (0.3 | ) | - | - | (4.0 | ) | ||||||||||||
Hotels
|
118.4 | - | - | - | 118.4 | |||||||||||||||
International
|
18.8 | - | - | - | 18.8 | |||||||||||||||
Financial Operations and Others
|
0.1 | - | - | - | 0.1 | |||||||||||||||
Total Gross Profit
|
1,892.1 | 12.8 | 14.1 | 1.6 | 1,920.5 |
Fiscal Year ended on June 30, 2014
In millions of Ps.
|
||||||||||||||||||||
Gross profit
|
Income statement
|
Interest in joint ventures
|
Common maintenance expenses
and collective promotion fund
|
Inter-segment eliminations
|
Segment-reporting
|
|||||||||||||||
Shopping Centers
|
1,079.1 | 6.5 | 7.4 | (3.3 | ) | 1,089.7 | ||||||||||||||
Offices and Others
|
220.3 | 4.1 | - | 4.8 | 229.1 | |||||||||||||||
Sales and Developments
|
45.1 | 6.9 | - | - | 52.0 | |||||||||||||||
Hotels
|
115.6 | - | - | - | 115.6 | |||||||||||||||
International
|
30.4 | - | - | - | 30.4 | |||||||||||||||
Financial Operations and Others
|
0.2 | - | - | - | 0.2 | |||||||||||||||
Total Gross Profit
|
1,490.7 | 17.5 | 7.4 | 1.6 | 1,517.1 |
Fiscal Year ended on June 30, 2015
In millions of Ps.
|
||||||||||||||||||||
General & administrative expenses
|
Income statement
|
Interest in joint ventures
|
Common maintenance expenses
and collective promotion fund
|
Inter-segment eliminations
|
Segment-reporting
|
|||||||||||||||
Shopping Centers
|
(135.5 | ) | (0.2 | ) | - | (0.4 | ) | (136.1 | ) | |||||||||||
Offices and Others
|
(58.2 | ) | (0.3 | ) | - | (0.5 | ) | (59.0 | ) | |||||||||||
Sales and Developments
|
(48.8 | ) | (0.5 | ) | - | (0.4 | ) | (49.7 | ) | |||||||||||
Hotels
|
(76.3 | ) | - | - | (1.3 | ) | (77.6 | ) | ||||||||||||
International
|
(55.7 | ) | - | - | - | (55.7 | ) | |||||||||||||
Financial Operations and Others
|
- | - | - | - | - | |||||||||||||||
Total expenses
|
(374.5 | ) | (1.0 | ) | - | (2.6 | ) | (378.1 | ) |
Fiscal Year ended on June 30, 2014
In millions of Ps.
|
||||||||||||||||||||
General & administrative expenses
|
Income statement
|
Interest in joint ventures
|
Common maintenance expenses
and collective promotion fund
|
Inter-segment eliminations
|
Segment-reporting
|
|||||||||||||||
Shopping Centers
|
(100.7 | ) | (0.1 | ) | - | (0.7 | ) | (101.5 | ) | |||||||||||
Offices and Others
|
(41.2 | ) | (0.1 | ) | - | (0.6 | ) | (41.9 | ) | |||||||||||
Sales and Developments
|
(37.0 | ) | (0.5 | ) | - | - | (37.5 | ) | ||||||||||||
Hotels
|
(58.6 | ) | - | - | (1.0 | ) | (59.6 | ) | ||||||||||||
International
|
(59.5 | ) | - | - | - | (59.5 | ) | |||||||||||||
Financial Operations and Others
|
(0.1 | ) | - | - | - | (0.1 | ) | |||||||||||||
Total expenses
|
(297.1 | ) | (0.8 | ) | - | (2.3 | ) | (300.1 | ) |
Fiscal Year ended on June 30, 2015
In millions of Ps.
|
||||||||||||||||||||
Selling expenses
|
Income statement
|
Interest in joint ventures
|
Common maintenance expenses
and collective promotion fund
|
Inter-segment eliminations
|
Segment-reporting
|
|||||||||||||||
Shopping Centers
|
(111.9 | ) | (0.8 | ) | - | (0.1 | ) | (112.8 | ) | |||||||||||
Offices and Others
|
(20.6 | ) | (0.5 | ) | - | - | (21.1 | ) | ||||||||||||
Sales and Developments
|
(8.4 | ) | (0.8 | ) | - | - | (9.2 | ) | ||||||||||||
Hotels
|
(52.2 | ) | - | - | (0.2 | ) | (52.4 | ) | ||||||||||||
International
|
- | - | - | - | - | |||||||||||||||
Financial Operations and Others
|
(0.4 | ) | - | - | - | (0.4 | ) | |||||||||||||
Total expenses
|
(193.5 | ) | (2.1 | ) | - | (0.3 | ) | (195.9 | ) |
Fiscal Year ended on June 30, 2014
In millions of Ps.
|
||||||||||||||||||||
Selling expenses
|
Income statement
|
Interest in joint ventures
|
Common maintenance expenses
and collective promotion fund
|
Inter-segment eliminations
|
Segment-reporting
|
|||||||||||||||
Shopping Centers
|
(72.5 | ) | (0.7 | ) | - | (0.2 | ) | (73.4 | ) | |||||||||||
Offices and Others
|
(20.3 | ) | (0.4 | ) | - | - | (20.8 | ) | ||||||||||||
Sales and Developments
|
(11.3 | ) | (2.4 | ) | - | - | (13.7 | ) | ||||||||||||
Hotels
|
(42.2 | ) | - | - | (0.2 | ) | (42.3 | ) | ||||||||||||
International
|
- | - | - | - | - | |||||||||||||||
Financial Operations and Others
|
0.1 | - | - | - | 0.1 | |||||||||||||||
Total expenses
|
(146.2 | ) | (3.5 | ) | - | (0.4 | ) | (150.1 | ) |
Fiscal Year ended on June 30, 2015
In millions of Ps.
|
||||||||||||||||||||
Other Operating results, net
|
Income statement
|
Interest in joint ventures
|
Common maintenance expenses
and collective promotion fund
|
Inter-segment eliminations
|
Segment-reporting
|
|||||||||||||||
Shopping Centers
|
(47.6 | ) | (1.2 | ) | - | - | (48.8 | ) | ||||||||||||
Offices and Others
|
(118.4 | ) | 0.1 | - | 0.7 | (117.6 | ) | |||||||||||||
Sales and Developments
|
12.5 | - | - | 0.6 | 13.1 | |||||||||||||||
Hotels
|
(0.5 | ) | - | - | - | (0.5 | ) | |||||||||||||
International
|
184.9 | - | - | - | 184.9 | |||||||||||||||
Financial Operations and Others
|
(2.4 | ) | - | - | - | (2.4 | ) | |||||||||||||
Total results
|
28.5 | (1.1 | ) | - | 1.3 | 28.6 |
Fiscal Year ended on June 30, 2014
In millions of Ps.
|
||||||||||||||||||||
Other Operating results, net
|
Income statement
|
Interest in joint ventures
|
Common maintenance expenses
and collective promotion fund
|
Inter-segment eliminations
|
Segment-reporting
|
|||||||||||||||
Shopping Centers
|
(46.0 | ) | (0.7 | ) | - | 0.1 | (46.6 | ) | ||||||||||||
Offices and Others
|
(1.8 | ) | (2.3 | ) | - | 1.0 | (3.1 | ) | ||||||||||||
Sales and Developments
|
8.3 | (0.2 | ) | - | - | 8.1 | ||||||||||||||
Hotels
|
(2.7 | ) | - | - | - | (2.7 | ) | |||||||||||||
International
|
(0.9 | ) | - | - | - | (0.9 | ) | |||||||||||||
Financial Operations and Others
|
(2.9 | ) | - | - | - | (2.9 | ) | |||||||||||||
Total results
|
(46.0 | ) | (3.2 | ) | - | 1.1 | (47.9 | ) |
Fiscal Year ended on June 30, 2015
In millions of Ps.
|
||||||||||||||||||||
Operating income/(loss)
|
Income statement
|
Interest in joint ventures
|
Common maintenance expenses
and collective promotion fund
|
Inter-segment eliminations
|
Segment-reporting
|
|||||||||||||||
Shopping Centers
|
1,173.6 | 6.9 | 14.1 | (4.4 | ) | 1,190.2 | ||||||||||||||
Offices and Others
|
92.6 | 3.3 | - | 5.7 | 101.6 | |||||||||||||||
Sales and Developments
|
1,114.4 | (1.6 | ) | - | 0.2 | 1,113.0 | ||||||||||||||
Hotels
|
(10.5 | ) | - | - | (1.5 | ) | (12.0 | ) | ||||||||||||
International
|
147.9 | - | - | - | 147.9 | |||||||||||||||
Financial Operations and Others
|
(2.7 | ) | - | - | - | (2.7 | ) | |||||||||||||
Total Operating income/(loss)
|
2,515.3 | 8.6 | 14.1 | - | 2,538.0 |
Fiscal Year ended on June 30, 2014
In millions of Ps.
|
||||||||||||||||||||
Operating income/(loss)
|
Income statement
|
Interest in joint ventures
|
Common maintenance expenses
and collective promotion fund
|
Inter-segment eliminations
|
Segment-reporting
|
|||||||||||||||
Shopping Centers
|
859.9 | 5.0 | 7.4 | (4.1 | ) | 868.2 | ||||||||||||||
Offices and Others
|
157.0 | 1.2 | - | 5.2 | 163.4 | |||||||||||||||
Sales and Developments
|
240.7 | 3.8 | - | - | 244.5 | |||||||||||||||
Hotels
|
12.1 | - | - | (1.1 | ) | 11.0 | ||||||||||||||
International
|
(30.0 | ) | - | - | - | (30.0 | ) | |||||||||||||
Financial Operations and Others
|
(2.6 | ) | - | - | - | (2.6 | ) | |||||||||||||
Total Operating income/(loss)
|
1,237.0 | 10.0 | 7.4 | - | 1,254.5 |
Fiscal Year ended on June 30, 2015
In millions of Ps.
|
||||||||||||||||||||
Share of profit / (loss) of associates and joint ventures
|
Income statement
|
Interest in joint ventures
|
Common maintenance expenses
and collective promotion fund
|
Inter-segment eliminations
|
Segment-reporting
|
|||||||||||||||
Shopping Centers
|
4.6 | (4.6 | ) | - | - | - | ||||||||||||||
Offices and Others
|
(0.5 | ) | (2.1 | ) | - | - | (2.6 | ) | ||||||||||||
Sales and Developments
|
6.5 | (5.6 | ) | - | - | 0.9 | ||||||||||||||
Hotels
|
1.3 | - | - | - | 1.3 | |||||||||||||||
International
|
(1.191.1 | ) | - | - | - | (1.191.1 | ) | |||||||||||||
Financial Operations and Others
|
156.5 | - | - | - | 156.5 | |||||||||||||||
Total share of profit / (loss)
|
(1.022.7 | ) | (12.3 | ) | - | - | (1,035.4 | ) |
Fiscal Year ended on June 30, 2014
In millions of Ps.
|
||||||||||||||||||||
Share of profit / (loss) of associates and joint ventures
|
Income statement
|
Interest in joint ventures
|
Common maintenance expenses
and collective promotion fund
|
Inter-segment eliminations
|
Segment-reporting
|
|||||||||||||||
Shopping Centers
|
5.1 | (5.1 | ) | - | - | - | ||||||||||||||
Offices and Others
|
0.1 | (1.0 | ) | - | - | (0.9 | ) | |||||||||||||
Sales and Developments
|
26.7 | (20.3 | ) | - | - | 6.4 | ||||||||||||||
Hotels
|
0.8 | - | - | - | 0.8 | |||||||||||||||
International
|
(616.3 | ) | - | - | - | (616.3 | ) | |||||||||||||
Financial Operations and Others
|
169.9 | - | - | - | 169.9 | |||||||||||||||
Total share of profit / (loss)
|
(413.8 | ) | (26.4 | ) | - | - | (440.1 | ) |
Fiscal Year ended on June 30, 2014
In millions of Ps.
|
||||||||||||||||||||
Revenues
|
Income statement (i)
|
Interest in joint ventures
|
Common maintenance expenses
and collective promotion fund
|
Inter-segment eliminations
|
Segment-reporting
|
|||||||||||||||
Shopping Centers
|
2,032.0 | 9.3 | (659.7 | ) | 1.4 | 1,383.0 | ||||||||||||||
Offices and Others
|
327.6 | 8.5 | (69.7 | ) | 4.8 | 271.2 | ||||||||||||||
Sales and Developments
|
62.6 | 22.9 | - | - | 85.5 | |||||||||||||||
Hotels
|
331.6 | - | - | - | 331.6 | |||||||||||||||
International
|
90.8 | - | (6.9 | ) | - | 83.9 | ||||||||||||||
Financial Operations and Others
|
0.6 | - | - | - | 0.6 | |||||||||||||||
Total revenues
|
2,845.2 | 40.6 | (736.3 | ) | 6.3 | 2,155.8 |
Fiscal Year ended on June 30, 2013
In millions of Ps.
|
||||||||||||||||||||
Revenues
|
Income statement (i)
|
Interest in joint ventures
|
Common maintenance expenses
and collective promotion fund
|
Inter-segment eliminations
|
Segment-reporting
|
|||||||||||||||
Shopping Centers
|
1,613.3 | 7.0 | (517.2 | ) | - | 1,103.0 | ||||||||||||||
Offices and Others
|
281.1 | 7.4 | (75.2 | ) | 3.9 | 217.2 | ||||||||||||||
Sales and Developments
|
24.9 | 117.1 | - | - | 142.0 | |||||||||||||||
Hotels
|
225.8 | - | - | - | 225.8 | |||||||||||||||
International
|
40.9 | - | (1.9 | ) | - | 39.0 | ||||||||||||||
Financial Operations and Others
|
1.2 | - | - | - | 1.2 | |||||||||||||||
Total revenues
|
2,187.2 | 131.5 | (594.3 | ) | 3.9 | 1,728.2 |
Fiscal Year ended on June 30, 2014
In millions of Ps.
|
||||||||||||||||||||
Costs
|
Income statement
|
Interest in joint ventures
|
Common maintenance expenses
and collective promotion fund
|
Inter-segment eliminations
|
Segment-reporting
|
|||||||||||||||
Shopping Centers
|
(952.9 | ) | (2.8 | ) | 667.1 | (4.7 | ) | (293.3 | ) | |||||||||||
Offices and Others
|
(107.3 | ) | (4.4 | ) | 69.7 | - | (42.0 | ) | ||||||||||||
Sales and Developments
|
(17.5 | ) | (16.0 | ) | - | - | (33.5 | ) | ||||||||||||
Hotels
|
(216.0 | ) | - | - | - | (216.0 | ) | |||||||||||||
International
|
(60.4 | ) | - | 6.9 | - | (53.5 | ) | |||||||||||||
Financial Operations and Others
|
(0.4 | ) | - | - | - | (0.4 | ) | |||||||||||||
Total Costs
|
(1,354.5 | ) | (23.2 | ) | 743.7 | (4.7 | ) | (638.7 | ) |
Fiscal Year ended on June 30, 2013
In millions of Ps.
|
||||||||||||||||||||
Costs
|
Income statement
|
Interest in joint ventures
|
Common maintenance expenses
and collective promotion fund
|
Inter-segment eliminations
|
Segment-reporting
|
|||||||||||||||
Shopping Centers
|
(758.9 | ) | (2.1 | ) | 522.7 | (2.7 | ) | (241.1 | ) | |||||||||||
Offices and Others
|
(113.8 | ) | (4.8 | ) | 75.2 | - | (43.4 | ) | ||||||||||||
Sales and Developments
|
(12.2 | ) | (94.2 | ) | - | - | (106.4 | ) | ||||||||||||
Hotels
|
(168.3 | ) | - | - | - | (168.3 | ) | |||||||||||||
International
|
(33.5 | ) | - | 1.9 | - | (31.6 | ) | |||||||||||||
Financial Operations and Others
|
(0.9 | ) | - | - | - | (0.9 | ) | |||||||||||||
Total Costs
|
(1,087.6 | ) | (101.1 | ) | 599.8 | (2.7 | ) | (591.6 | ) |
Fiscal Year ended on June 30, 2014
In millions of Ps.
|
||||||||||||||||||||
General & administrative expenses
|
Income statement
|
Interest in joint ventures
|
Common maintenance expenses
and collective promotion fund
|
Inter-segment eliminations
|
Segment-reporting
|
|||||||||||||||
Shopping Centers
|
(100.7 | ) | (0.1 | ) | - | (0.7 | ) | (101.5 | ) | |||||||||||
Offices and Others
|
(41.2 | ) | (0.1 | ) | - | (0.6 | ) | (41.9 | ) | |||||||||||
Sales and Developments
|
(37.0 | ) | (0.5 | ) | - | - | (37.5 | ) | ||||||||||||
Hotels
|
(58.6 | ) | - | - | (1.0 | ) | (59.6 | ) | ||||||||||||
International
|
(59.5 | ) | - | - | - | (59.5 | ) | |||||||||||||
Financial Operations and Others
|
(0.1 | ) | - | - | - | (0.1 | ) | |||||||||||||
Total expenses
|
(297.1 | ) | (0.7 | ) | - | (2.3 | ) | (300.1 | ) |
Fiscal Year ended on June 30, 2013
In millions of Ps.
|
||||||||||||||||||||
General & administrative expenses
|
Income statement
|
Interest in joint ventures
|
Common maintenance expenses
and collective promotion fund
|
Inter-segment eliminations
|
Segment-reporting
|
|||||||||||||||
Shopping Centers
|
(66.4 | ) | (0.1 | ) | - | (1.1 | ) | (67.6 | ) | |||||||||||
Offices and Others
|
(34.8 | ) | (0.2 | ) | - | - | (35.0 | ) | ||||||||||||
Sales and Developments
|
(31.0 | ) | (1.9 | ) | - | - | (32.9 | ) | ||||||||||||
Hotels
|
(49.4 | ) | - | - | (0.5 | ) | (49.9 | ) | ||||||||||||
International
|
(13.2 | ) | - | - | - | (13.2 | ) | |||||||||||||
Financial Operations and Others
|
(0.3 | ) | - | - | - | (0.3 | ) | |||||||||||||
Total expenses
|
(195.1 | ) | (2.2 | ) | - | (1.6 | ) | (198.9 | ) |
Fiscal Year ended on June 30, 2014
In millions of Ps.
|
||||||||||||||||||||
Selling expenses
|
Income statement
|
Interest in joint ventures
|
Common maintenance expenses
and collective promotion fund
|
Inter-segment eliminations
|
Segment-reporting
|
|||||||||||||||
Shopping Centers
|
(72.5 | ) | (0.7 | ) | - | (0.2 | ) | (73.4 | ) | |||||||||||
Offices and Others
|
(20.3 | ) | (0.4 | ) | - | - | (20.8 | ) | ||||||||||||
Sales and Developments
|
(11.3 | ) | (2.4 | ) | - | - | (13.7 | ) | ||||||||||||
Hotels
|
(42.2 | ) | - | - | (0.2 | ) | (42.3 | ) | ||||||||||||
International
|
- | - | - | - | - | |||||||||||||||
Financial Operations and Others
|
0.1 | - | - | - | 0.1 | |||||||||||||||
Total expenses
|
(146.2 | ) | (3.5 | ) | - | (0.4 | ) | (150.1 | ) |
Fiscal Year ended on June 30, 2013
In millions of Ps.
|
||||||||||||||||||||
Selling expenses
|
Income statement
|
Interest in joint ventures
|
Common maintenance expenses
and collective promotion fund
|
Inter-segment eliminations
|
Segment-reporting
|
|||||||||||||||
Shopping Centers
|
(58.2 | ) | (0.7 | ) | - | - | (58.9 | ) | ||||||||||||
Offices and Others
|
(10.9 | ) | (0.5 | ) | - | - | (11.4 | ) | ||||||||||||
Sales and Developments
|
(6.7 | ) | (9.8 | ) | - | - | (16.5 | ) | ||||||||||||
Hotels
|
(28.7 | ) | - | - | (0.1 | ) | (28.9 | ) | ||||||||||||
International
|
- | - | - | - | - | |||||||||||||||
Financial Operations and Others
|
(1.6 | ) | - | - | - | (1.6 | ) | |||||||||||||
Total expenses
|
(106.1 | ) | (11.0 | ) | - | (0.1 | ) | (117.2 | ) |
Fiscal Year ended on June 30, 2014
In millions of Ps.
|
||||||||||||||||||||
Other Operating results, net
|
Income statement
|
Interest in joint ventures
|
Common maintenance expenses
and collective promotion fund
|
Inter-segment eliminations
|
Segment-reporting
|
|||||||||||||||
Shopping Centers
|
(46.0 | ) | (0.7 | ) | - | 0.1 | (46.6 | ) | ||||||||||||
Offices and Others
|
(1.8 | ) | (2.3 | ) | - | 1.0 | (3.1 | ) | ||||||||||||
Sales and Developments
|
8.3 | (0.2 | ) | - | - | 8.1 | ||||||||||||||
Hotels
|
(2.7 | ) | - | - | - | (2.7 | ) | |||||||||||||
International
|
(0.9 | ) | - | - | - | (0.9 | ) | |||||||||||||
Financial Operations and Others
|
(2.9 | ) | - | - | - | (2.9 | ) | |||||||||||||
Total results
|
(45.8 | ) | (3.2 | ) | - | 1.1 | (47.9 | ) |
Fiscal Year ended on June 30, 2013
In millions of Ps.
|
||||||||||||||||||||
Other Operating results, net
|
Income statement
|
Interest in joint ventures
|
Common maintenance expenses
and collective promotion fund
|
Inter-segment eliminations
|
Segment-reporting
|
|||||||||||||||
Shopping Centers
|
(44.5 | ) | (0.5 | ) | - | - | (45 | ) | ||||||||||||
Offices and Others
|
0.2 | (1.0 | ) | - | 0.6 | (0.2 | ) | |||||||||||||
Sales and Developments
|
6.3 | - | - | - | 6.3 | |||||||||||||||
Hotels
|
(0.4 | ) | - | - | - | (0.4 | ) | |||||||||||||
International
|
135.1 | - | - | - | 135.1 | |||||||||||||||
Financial Operations and Others
|
(3.4 | ) | - | - | - | (3.4 | ) | |||||||||||||
Total results
|
93.3 | (1.5 | ) | - | 0.6 | 92.4 |
Fiscal Year ended on June 30, 2014
In millions of Ps.
|
||||||||||||||||||||
Operating income/(loss)
|
Income statement
|
Interest in joint ventures
|
Common maintenance expenses
and collective promotion fund
|
Inter-segment eliminations
|
Segment-reporting
|
|||||||||||||||
Shopping Centers
|
859.9 | 5.0 | 7.4 | (4.1 | ) | 868.2 | ||||||||||||||
Offices and Others
|
157.0 | 1.2 | - | 5.2 | 163.4 | |||||||||||||||
Sales and Developments
|
240.7 | 3.8 | - | - | 244.5 | |||||||||||||||
Hotels
|
12.1 | - | - | (1.1 | ) | 11.0 | ||||||||||||||
International
|
(30.0 | ) | - | - | - | (30.0 | ) | |||||||||||||
Financial Operations and Others
|
(2.6 | ) | - | - | - | (2.6 | ) | |||||||||||||
Total Operating income/(loss)
|
1,237.0 | 10.0 | 7.4 | - | 1,254.5 |
Fiscal Year ended on June 30, 2013
In millions of Ps.
|
||||||||||||||||||||
Operating income/(loss)
|
Income statement
|
Interest in joint ventures
|
Common maintenance expenses
and collective promotion fund
|
Inter-segment eliminations
|
Segment-reporting
|
|||||||||||||||
Shopping Centers
|
685.2 | 3.5 | 5.5 | (3.8 | ) | 690.5 | ||||||||||||||
Offices and Others
|
121.8 | 0.9 | - | 4.4 | 127.1 | |||||||||||||||
Sales and Developments
|
165.1 | 11.3 | - | - | 176.4 | |||||||||||||||
Hotels
|
(21.1 | ) | - | - | (0.6 | ) | (21.7 | ) | ||||||||||||
International
|
129.3 | - | - | - | 129.3 | |||||||||||||||
Financial Operations and Others
|
(5.0 | ) | - | - | - | (5.0 | ) | |||||||||||||
Total Operating income/(loss)
|
1,075.3 | 15.7 | 5.5 | - | 1096.5 |
Twelve-month period ended June 30,
|
% Change
|
|||||||||||
2015
|
2014
|
2015/2014 | ||||||||||
(in millions of Pesos, except for percentages)
|
||||||||||||
Financial income
|
Ps. | 5,524.0 | Ps. | 4,696.2 | 17.6 | % | ||||||
Financial expenses
|
(3,244.0 | ) | (2,403.1 | ) | 35.0 | % | ||||||
Net financial income
|
Ps. | 2,280.0 | Ps. | 2,293.1 | -0.6 | % | ||||||
Provision for loan losses
|
(375.3 | ) | (303.3 | ) | 23.7 | % | ||||||
Net contribution from insurance (1)
|
1,105.6 | 720.4 | 53.5 | % | ||||||||
Other income from services
|
2,028.6 | 1,222.8 | 65.9 | % | ||||||||
Other expenses for services
|
(619.0 | ) | (507.9 | ) | 21.9 | % | ||||||
Administrative expenses
|
(3,366.9 | ) | (2,340.8 | ) | 43.8 | % | ||||||
Net income from financial transactions
|
Ps. | 1,053.0 | Ps. | 1,084.3 | -2.9 | % | ||||||
Miscellaneous expenses, net (2)
|
(151.9 | ) | (99.2 | ) | 53.2 | % | ||||||
Non-Controlling interest
|
13.7 | 11.0 | 23.8 | % | ||||||||
Income tax
|
(377.6 | ) | (369.1 | ) | 2.3 | % | ||||||
Net income
|
Ps. | 537.2 | Ps. | 627.0 | -14.3 | % |
·
|
An increase in administrative expenses of Ps.1,026.1 million.
|
·
|
An increase in financial expenditures of Ps.840.9 million.
|
·
|
An increase in the provision for loan losses of Ps.72.0 million.
|
·
|
An increase in miscellaneous expenses, net of Ps.52.7 million.
|
·
|
An increase in financial income of Ps.827.8 million.
|
·
|
An increase in income from services, net of Ps.1,079.9 million.
|
Twelve-month periods ended June 30,
|
% Change
|
|||||||||||
2015
|
2014
|
2015/2014 | ||||||||||
(in millions of Pesos, except for percentages)
|
||||||||||||
Interests from:
|
Ps. | Ps. | ||||||||||
Mortgage loans and other financial transactions
|
|
413.0 | 353.8 | 16.7 | % | |||||||
Financial trusts
|
157.6 | 139.8 | 12.7 | % | ||||||||
Cash and due from banks
|
6.3 | 12.2 | -48.7 | % | ||||||||
Interbank Loans
|
65.5 | 55.6 | 17.7 | % | ||||||||
Other Loans
|
839.2 | 600.9 | 39.7 | % | ||||||||
Credit card Loans
|
1,789.7 | 1,114.0 | 60.7 | % | ||||||||
Personal Loans
|
839.8 | 609.1 | 37.9 | % | ||||||||
Overdraft facilities
|
261.6 | 256.5 | 2.0 | % | ||||||||
Government and Corporate Securities
|
1,016.6 | 774.8 | 31.2 | % | ||||||||
Adjustment from application of CER clause
|
9.2 | 13.9 | -33.4 | % | ||||||||
Hedges
|
(69.1 | ) | 634.2 | -110.9 | % | |||||||
Others
|
194.6 | 131.4 | 48.3 | % | ||||||||
Total Financial Income
|
Ps. | 5,524.0 | Ps. | 4,696.2 | 17.6 | % |
·
|
Higher income from credit cards and personal loans as a result of higher loans originations. The balances of credit card loans and personal loans have increased 29.9% and 42.9%, respectively, during the twelve-month period ended June 30, 2015.
|
·
|
Higher income from other loans because of higher average balances
|
·
|
Higher income from and government and corporate securities, mainly due to higher market prices. Additionally, the balances of government and corporate securities has increased 55.3% during the twelve-month period ended June 30, 2015.
|
·
|
Lower income from hedge operations.
|
Twelve-month periods ended June 30,
|
% Change
|
|||||||||||
2015
|
2014
|
2015/2014 | ||||||||||
(in millions of Pesos, except for percentages)
|
||||||||||||
Bonds and similar obligations
|
Ps. | 726.2 | Ps. | 462.0 | 57.2 | % | ||||||
Borrowings from banks
|
77.2 | 95.0 | -18.8 | % | ||||||||
Other(*)
|
2.5 | 1.5 | 60.0 | % | ||||||||
Time deposits
|
1,866.7 | 1,294.3 | 44.2 | % | ||||||||
Effects of changes in exchange rates
|
59.5 | 139.9 | -57.5 | % | ||||||||
Forward transactions
|
69.1 | 70.7 | -2.2 | % | ||||||||
Contributions and taxes on financial income
|
442.8 | 339.7 | 30.4 | % | ||||||||
Total Financial expenses
|
Ps. | 3,244.0 | Ps. | 2,403.1 | 35.0 | % |
·
|
Higher interest liabilities as a result of increased average balances on time deposits. The balances of time deposits increased 31.5%, during the twelve-month period ended June 30, 2015.
|
·
|
Higher liabilities resulting from increased of contributions and taxes on financial income.
|
·
|
Higher interest liabilities resulting from increase of Bonds and similar obligations as consequences of higher average balances. The balances of bonds increased 43.6%, during the twelve-month period ended June 30, 2015.
|
Twelve-month periods ended June 30,
|
% Change
|
|||||||||||
2015
|
2014
|
2015/2014 | ||||||||||
(in millions of Pesos, except for percentages)
|
||||||||||||
Provision for loan losses
|
Ps. | 375.3 | Ps. | 303.3 | 23.7 | % | ||||||
Charge-offs
|
Ps, | 201.1 | Ps. | 125.9 | 59.8 | % |
Twelve-month periods ended June 30
|
% Change
|
|||||||||||
2015
|
2014
|
2015/2014 | ||||||||||
(in millions of Pesos, except for percentages)
|
||||||||||||
Insurance premiums earned
|
||||||||||||
Life
|
Ps. | 17.1 | Ps. | 26.7 | -36.1 | % | ||||||
Property damage
|
16.0 | 16.3 | -2.0 | % | ||||||||
Unemployment
|
0.2 | 0.3 | -35.5 | % | ||||||||
Others (a)
|
1,222.2 | 851.8 | 43.5 | % | ||||||||
Total Premiums earned
|
Ps. | 1,255.5 | Ps. | 895.1 | 40.3 | % | ||||||
Insurance claims
|
||||||||||||
Life
|
Ps. | 3.5 | Ps. | 5.0 | -28.6 | % | ||||||
Property damage
|
0.1 | 0.2 | -31.2 | % | ||||||||
Others (b)
|
146.3 | 169.5 | -13.6 | % | ||||||||
Total claims
|
Ps. | 149.9 | Ps. | 174.7 | -14.2 | % | ||||||
Net contribution from insurance activity
|
Ps. | 1,105.6 | Ps, | 720.4 | 53.5 | % |
(a)
|
As of June 30, 2015 and 2014 contains Ps. 1,132.8 million and Ps.792.1 million, respectively, related to the activity of its subsidiary BHN Sociedad de Inversión S.A. As mentioned before, BHN Sociedad Inversion has increased their activity regarding the rise in the origination of loans granted by Banco Hipotecario and the rise in the origination of Mortgage loans granted by PROCREAR.
|
(b)
|
As of June 30, 2015 and 2014 contains Ps. 145.7 million and Ps.169.0 million, respectively, related to the activity of its subsidiary BHN Sociedad de Inversión S.A.
|
Twelve-month periods ended June 30,
|
% Change
|
|||||||||||
2015
|
2014
|
2015/2014 | ||||||||||
(in millions of Pesos, except for percentages)
|
||||||||||||
Loan servicing fees from third parties
|
Ps. | 37.2 | Ps. | 30.9 | 20.7 | % | ||||||
Credit Card Commissions
|
1,048.9 | 705.1 | 48.7 | % | ||||||||
Other Commissions
|
209.2 | 130.6 | 60.2 | % | ||||||||
Total Commissions
|
Ps. | 1,295.3 | Ps. | 866.6 | 49.5 | % | ||||||
Commissions earned by subsidiaries
|
600.0 | 285.7 | 110.0 | % | ||||||||
Recovery of loan expenses
|
19.5 | 37.3 | -47.6 | % | ||||||||
Income from services PROCREAR
|
106.6 | 30.9 | 244.5 | % | ||||||||
Others
|
7.2 | 2.3 | 219.9 | % | ||||||||
Total Others
|
Ps. | 733.3 | Ps. | 356.2 | 105.9 | % | ||||||
Total Other Income from Services
|
Ps. | 2,028.6 | Ps. | 1,222.8 | 65.9 | % |
Twelve-month periods ended June 30,
|
% Change
|
|||||||||||
2015
|
2014
|
2015/2014 | ||||||||||
(in millions of Pesos, except for percentages)
|
||||||||||||
Structuring and underwriting fees
|
Ps. | 16.5 | Ps. | 14.3 | 15.5 | % | ||||||
Retail Bank originations
|
7.7 | 6.3 | 21.5 | % | ||||||||
Collections
|
0.2 | 0.2 | 13.8 | % | ||||||||
Banking services
|
452.2 | 373.4 | 21.1 | % | ||||||||
Co branding Aerolíneas Argentinas
|
27.3 | 11.4 | 139.8 | % | ||||||||
Commissions paid to real estate agents
|
36.7 | 40.7 | -9.8 | % | ||||||||
Total Commissions
|
Ps. | 540.6 | Ps. | 446.3 | 21.1 | % | ||||||
Contributions and taxes on income from services
|
78.4 | 61.6 | 27.2 | % | ||||||||
Total Other expenses for services
|
Ps. | 619.0 | Ps. | 507.9 | 21.9 | % |
Twelve-month periods ended June 30,
|
% Change
|
||||||||||||
2015
|
2014
|
2015/2014 | |||||||||||
(in millions of Pesos, except for percentages)
|
|||||||||||||
Salaries and social security contributions
|
Ps. | 1,775.5 |
Ps.
|
Ps. | 1,284.8 | 38.2 | % | ||||||
Fees and external administrative services
|
472.5 | 329.7 | 43.3 | % | |||||||||
Advertising and publicity
|
179.5 | 118.3 | 51.8 | % | |||||||||
Value added tax and other taxes
|
167.2 | 113.9 | 46.8 | % | |||||||||
Electricity and communications
|
116.9 | 71.9 | 62.5 | % | |||||||||
Maintenance and repair
|
96.8 | 54.0 | 79.4 | % | |||||||||
Depreciation of bank premises and equipment
|
35.3 | 21.0 | 68.0 | % | |||||||||
Amortization of organizational expenses
|
75.8 | 41.3 | 83.5 | % | |||||||||
Corporate personnel benefits
|
132.8 | 121.8 | 9.0 | % | |||||||||
Rent
|
97.5 | 69.8 | 39.7 | % | |||||||||
Others
|
217.1 | 114.3 | 90.0 | % | |||||||||
Total
|
Ps. | 3,366.9 |
Ps.
|
Ps. | 2,340.8 | 43.8 | % |
Twelve-month periods ended June 30, | % Change | |||||||||||
2015 | 2014 | 2015/2014 | ||||||||||
(in millions of Pesos, except for percentages) | ||||||||||||
Penalty interest
|
Ps. | 86.9 | Ps. | 59.3 | 46.5 | % | ||||||
Reversal of provision for loan losses
|
77.5 | 15.4 |
NM
|
|||||||||
Loan loss recoveries
|
94.2 | 66.7 | 41.3 | % | ||||||||
Others
|
58.9 | 47.5 | 23.8 | % | ||||||||
Total Miscellaneous Income
|
Ps. | 317.5 | Ps. | 188.9 | 68.1 | % | ||||||
Provision for lawsuits contingencies
|
Ps. | 19.2 | Ps. | 29.4 | 34.6 | % | ||||||
Provision for other contingencies and miscellaneous receivables
|
- | 7.4 | -100.0 | % | ||||||||
Provision for administrative organization
|
84.0 | 11.2 |
NM
|
|||||||||
Other taxes
|
124.6 | 26.3 |
NM
|
|||||||||
Benefits prepayments
|
70.5 | 71.3 | -1.2 | % | ||||||||
Others
|
171.1 | 142.5 | 20.1 | % | ||||||||
Total Miscellaneous Expenses
|
Ps. | 469.4 | Ps. | 288.1 | 63.0 | % | ||||||
Total Miscellaneous Expenses, net
|
Ps. | (151.9 | ) | Ps. | (99.2 | ) | 53.3 | % |
·
|
Higher provision for administrative organization
|
·
|
Higher other miscellaneous expenses related to penalties imposed in the framework of Financial Summary Proceedings N° 1320
|
·
|
Higher penalty interest and reversal of provision for contingencies.
|
June 30, 2015
|
||||
(in millions of Pesos)
|
||||
Holding booked at fair value
|
||||
Government securities denominated in Pesos
|
Ps. | 1,581.4 | ||
Government securities denominated in US$
|
340.1 | |||
Bills issued by Provincial Governments denominated in Pesos
|
297.1 | |||
Bills issued by Provincial Governments denominated in US$
|
7.1 | |||
Ps. | 2,225.7 | |||
Holding booked at cost plus return
|
||||
Bills issued by Provincial Governments denominated in Pesos
|
66.9 | |||
Bills issued by Provincial Governments denominated in US$
|
125.9 | |||
Ps. | 192.8 | |||
Investment in listed corporate securities
|
||||
Corporate securities denominated in Pesos
|
430.9 | |||
Ps. | 430.9 | |||
Securities issued by the BCRA
|
||||
Quoted bills and notes issued by the BCRA
|
672.2 | |||
Unquoted bills and notes issued by the BCRA
|
1,750.0 | |||
Ps. | 2,422.2 | |||
Total
|
Ps. | 5,271.6 |
June 30, 2015
|
||||
(in millions of Pesos)
|
||||
Government Securities by country:
|
||||
Argentina
|
5,271.6 | |||
5,271.6 | ||||
Government Securities by counterparty:
|
||||
Goverment securities
|
2,418.5 | |||
Central Bank bills and notes
|
2,422.2 | |||
Corporate securities
|
430.9 | |||
5,271.6 | ||||
Government Securities by Financial Instruments in accordance with Argentine Banking GAAP:
|
||||
Recorded at fair value
|
3,328.8 | |||
Recorded at cost plus return
|
1,942.8 | |||
5,271.6 |
At June 30,
|
% Change
|
|||||||||||
2015
|
2014
|
2015/2014 | ||||||||||
(in millions of Pesos, except for percentages)
|
||||||||||||
Bonds
|
Ps. | 4,926.7 | Ps. | 3,501.7 | 40.7 | % | ||||||
Subordinated Bonds
|
100.0 | - |
NM
|
|||||||||
Borrowings from Argentina Central Bank.
|
0.1 | 0.1 | 42.0 | % | ||||||||
Borrowings from banks and international entities
|
297.4 | 558.4 | -46.8 | % | ||||||||
Deposits
|
18,191.2 | 13,691.3 | 32.9 | % | ||||||||
Total
|
Ps. | 23,515.4 | Ps. | 17,751.5 | 32.5 | % |
Outstanding principal amount
|
Date of issue
|
Maturity Date
|
Annual
Interest rate
|
|||||||
(millions of Pesos)
|
(%)
|
|||||||||
Banco Hipotecario
|
||||||||||
Series 5 (US$ 250,000,000)
|
1,914.5 |
Apr 27, 2006
|
Apr 27, 2016
|
9.75%
|
||||||
Series XII (US$ 44,508,000
|
359.0 |
Aug 14, 2013
|
Aug 14, 2017
|
3.95%
|
||||||
Series XIV (Ps.115,400,000)
|
115.4 |
Nov 11, 2013
|
Nov 11, 2015
|
Badlar + 375bp
|
||||||
Series XVI (Ps.89,683,000)
|
89.7 |
Jan 31, 2014
|
Jan 31, 2016
|
Badlar + 425bp
|
||||||
Series XIX (Ps.275,830,000)
|
275.8 |
May 16, 2014
|
Nov 16, 2015
|
Badlar + 375bp
|
||||||
Series XXI (Ps.222,345,000)
|
222.3 |
Jul 30, 2014
|
Jan 30, 2016
|
Badlar + 275bp
|
||||||
Series XXII (Ps.253,152,000)
|
253.2 |
Nov 5, 2014
|
Aug 5, 2015
|
LEBAC x 0.95
|
||||||
Series XXIII (Ps.119,386,000)
|
119.4 |
Nov 5, 2014
|
May 5, 2016
|
Badlar + 325bp
|
||||||
Series XXIV (Ps.27,505,000)
|
27.5 |
Feb 5, 2015
|
Jan 31, 2016
|
LEBAC x 0.95
|
||||||
Series XXV (Ps.308,300,000)
|
298.5 |
Feb 5, 2015
|
Aug 5, 2016
|
9 months 27.5%, and after Badlar + 450 bp
|
||||||
Series XXVII (Ps.281,740,000)
|
260.1 |
May 22, 2015
|
Nov 22, 2016
|
9 months 28.0%, and after Badlar + 450 bp
|
||||||
BACS Banco de Crédito y Securitización S.A.
|
||||||||||
Series I (Ps.130,435,000)
|
130.4 |
Feb 19, 2014
|
Aug 19, 2015
|
Badlar +450bp
|
||||||
Series III (Ps.132,726,000)
|
132.7 |
19-Ago-14
|
19-May-16
|
Badlar + 275 bp
|
||||||
Series IV (Ps.105,555,000)
|
105.6 |
21-Nov-14
|
21-Ago-16
|
Badlar + 350 bp
|
||||||
Series V (Ps.150,000,000)
|
150.0 |
17-Abr-15
|
17-Ene-17
|
9 months 27.48%, and afer Badlar + 450 bp
|
||||||
Tarshop S.A.
|
||||||||||
Series XI (Ps.10,837,187)
|
10.8 |
May 23, 2013
|
May 23, 2016
|
Badlar + 580bp
|
||||||
Series XII (Ps.83,588,235)
|
83.1 |
Aug 09, 2013
|
Aug 09, 2015
|
15% | ||||||
Series XV (Ps.119,755,000)
|
114.0 |
Apr 21, 2014
|
Oct 21, 2015
|
Badlar + 490bp
|
||||||
Series XVII (Ps.41,065,777)
|
40.8 |
Nov 26, 2014
|
Aug 26, 2015
|
LEBAC x 0.95
|
||||||
Series XVIII (Ps.69,290,713)
|
68.9 |
Nov 26, 2014
|
May 26, 2016
|
Badlar + 425 bp
|
||||||
Series XIX (Ps.6,315,789)
|
6.3 |
Nov 26, 2014
|
Nov 26 ,2017
|
Badlar + 525 bp
|
||||||
Series XX (Ps.69,100,000)
|
68.7 |
Apr 24, 2015
|
Jan 24, 2016
|
27.50%
|
||||||
Series XXI (Ps.80,500,000)
|
80.0 |
Apr 24, 2015
|
Oct 24, 2016
|
28.50%
|
||||||
Ps. 4,926.7
|
At June 30,
|
%Change
|
|||||||||||
2015
|
2014
|
2015/2014 | ||||||||||
(in millions of Pesos, except for percentages)
|
||||||||||||
Checking accounts
|
Ps. | 3,151.3 | Ps. | 2,800.9 | 12.5 | % | ||||||
Saving accounts
|
2,953.1 | 1,662.4 | 77.6 | % | ||||||||
Time deposits
|
11,898.2 | 9,049.6 | 31.5 | % | ||||||||
Other deposits accounts
|
188.6 | 178.4 | 5.7 | % | ||||||||
Accrued interest payable
|
237.6 | 215.9 | 10.1 | % | ||||||||
Total
|
Ps. | 18,428.8 | Ps. | 13,907.2 | 32.5 | % |
Twelve-month period ended June 30,
|
% Change
|
|||||||||||
2014
|
2013
|
2014/2013 | ||||||||||
(in millions of Pesos, except for percentages)
|
||||||||||||
Financial income
|
Ps. | 4,696.2 | Ps. | 2,424.2 | 93.7 | % | ||||||
Financial expenses
|
(2,403.1 | ) | (1,284.3 | ) | 87.1 | % | ||||||
Net financial income
|
Ps. | 2,293.1 | Ps. | 1,139.9 | 101.2 | % | ||||||
Provision for loan losses
|
(303.3 | ) | (233.4 | ) | 30.0 | % | ||||||
Net contribution from insurance (1)
|
720.4 | 359.8 | 100.2 | % | ||||||||
Other income from services
|
1,222.8 | 977.6 | 25.1 | % | ||||||||
Other expenses for services
|
(507.9 | ) | (233.3 | ) | 117.7 | % | ||||||
Administrative expenses
|
(2,340.8 | ) | (1,612.2 | ) | 45.2 | % | ||||||
Net income from financial transactions
|
Ps. | 1,084.3 | Ps. | 398.4 | 172.2 | % | ||||||
Miscellaneous income, net (2)
|
(99.2 | ) | 31.4 |
NM
|
||||||||
Non-Controlling interest
|
11.0 | (14.1 | ) |
NM
|
||||||||
Income tax
|
(369.1 | ) | (76.5 | ) |
NM
|
|||||||
Net income
|
Ps. | 627.0 | Ps. | 339.1 | 84.9 | % |
·
|
Higher financial income principally as a result of an increase on consumer products partially and higher income from government and private securities.
|
·
|
Higher income from services mainly due to increase in credit card commissions, and the increase in the activity developed by BHN Sociedad de Inversión S.A.
|
·
|
Higher administrative expenses mainly related to salaries, social security contributions, and fees related to actions adopted by the Bank in developing its retail banking business.
|
·
|
Higher financial expenditures principally as a result of higher interest liabilities resulting from increased average balances of time deposits and bonds and similar obligations.
|
Twelve-month period ended June 30,
|
% Change
|
|||||||||||
2014
|
2013
|
2014/2013 | ||||||||||
(in millions of Pesos, except for percentages)
|
||||||||||||
Interests from:
|
||||||||||||
Mortgage loans and other financial transactions
|
Ps. | 353.8 | Ps. | 264.3 | 33.8 | % | ||||||
Financial trusts
|
139.8 | 134.2 | 4.2 | % | ||||||||
Cash and due from banks
|
12.2 | 6.9 | 76.5 | % | ||||||||
Interbank Loans
|
55.6 | 49.8 | 11.6 | % | ||||||||
Other Loans
|
600.9 | 321.3 | 87.0 | % | ||||||||
Credit card Loans
|
1,114.0 | 649.3 | 71.6 | % | ||||||||
Personal Loans
|
609.1 | 371.1 | 64.2 | % | ||||||||
Overdraft facilities
|
256.5 | 168.8 | 52.0 | % | ||||||||
Government and Corporate Securities
|
774.8 | 285.9 | 171.0 | % | ||||||||
Adjustment from application of CER clause
|
13.9 | 8.3 | 67.0 | % | ||||||||
Hedges
|
634.2 | 95.3 |
NM
|
|||||||||
Others
|
131.4 | 69.0 | 90.3 | % | ||||||||
Total Financial Income
|
Ps. | 4,696.2 | Ps. | 2,424.2 | 93.7 | % |
·
|
Higher income from credit cards and personal loans as a result of higher loans originations. The balances of credit card loans and personal loans have increased 46.4% and 51.0%, respectively, during the twelve-month period ended June 30, 2014.
|
·
|
Higher income from other loans because of higher average balances
|
·
|
Higher income from hedge operations and government and corporate securities, mainly due to higher market prices.
|
Twelve-month periods ended June 30,
|
% Change
|
|||||||||||
2014
|
2013
|
2014/2013 | ||||||||||
(in millions of Pesos, except for percentages)
|
||||||||||||
Bonds and similar obligations
|
Ps. | 462.0 | Ps. | 267.2 | 72.9 | % | ||||||
Borrowings from banks
|
95.0 | 50.0 | 90.1 | % | ||||||||
Borrowings from Argentina Central Bank
|
- | 0.1 | -100.0 | % | ||||||||
Other(1)
|
1.5 | 1.8 | -19.5 | % | ||||||||
Time deposits
|
1,294.3 | 677.6 | 91.0 | % | ||||||||
Effects of changes in exchange rates
|
139.9 | 93.2 | 50.2 | % | ||||||||
Forward transactions
|
70.7 | 30.6 | 131.0 | % | ||||||||
Contributions and taxes on financial income
|
339.7 | 163.8 | 107.4 | % | ||||||||
Total Financial expenses
|
Ps. | 2,403.1 | Ps. | 1,284.3 | 87.1 | % |
1)
|
Higher interest liabilities as a result of increased average balances on time deposits. The balances of time deposits increased 54.2%, during the twelve-month period ended June 30, 2014.
|
2)
|
Higher liabilities resulting from increased of contributions and taxes on financial income.
|
3)
|
Higher interest liabilities resulting from increase of bonds and similar obligations as consequences of higher average balances. The balances of bonds increased 52.8%, during the twelve-month period ended June 30, 2014.
|
Twelve-month periods ended June 30,
|
% Change
|
|||||||||||
2014
|
2013
|
2014/2013 | ||||||||||
(in millions of Pesos, except for percentages)
|
||||||||||||
Provision for loan losses
|
Ps. | 303.3 | Ps. | 233.4 | 30.0 | % | ||||||
Charge-offs
|
Ps. | 125.9 | Ps. | 74.2 | 69.7 | % |
Twelve-month periods ended June 30
|
% Change
|
|||||||||||
2014
|
2013
|
2014/2013 | ||||||||||
(in millions of Pesos, except for percentages)
|
||||||||||||
Insurance premiums earned
|
||||||||||||
Life
|
Ps. | 26.7 | Ps. | 43.9 | -39.2 | % | ||||||
Property damage
|
16.3 | 18.4 | -11.5 | % | ||||||||
Unemployment
|
0.3 | 0.4 | -33.1 | % | ||||||||
Others (a)
|
851.8 | 354.7 | 140.2 | % | ||||||||
Total Premiums earned
|
Ps. | 895.1 | Ps. | 417.4 | 114.5 | % | ||||||
Insurance claims
|
||||||||||||
Life
|
Ps. | 5.0 | Ps. | 4.7 | 5.1 | % | ||||||
Property damage
|
0.2 | 0.3 | -37.9 | % | ||||||||
Unemployment
|
- | - |
NM
|
|||||||||
Others (b)
|
169.5 | 52.6 | 223.7 | % | ||||||||
Total claims
|
Ps. | 174.7 | Ps. | 57.6 | 203.9 | % | ||||||
Net contribution from insurance activity
|
Ps. | 720.4 | Ps. | 359.8 | 100.1 | % | ||||||
(a)
|
As of June 30, 2014 and 2013 contains Ps.792.1 million and Ps.316.2 million, respectively, related to the activity of its subsidiary BHN Sociedad de Inversión S.A.
|
Twelve-month periods ended June 30,
|
% Change
|
|||||||||||
2014
|
2013
|
2014/2013 | ||||||||||
(in millions of Pesos, except for percentages)
|
||||||||||||
Loan servicing fees from third parties
|
Ps. | 30.9 | Ps. | 26.5 | 16.2 | % | ||||||
FONAVI commissions
|
- | 11.4 | -100 | % | ||||||||
Credit Card Commissions
|
705.1 | 555.1 | 27.0 | % | ||||||||
Other Commissions
|
130.6 | 77.2 | 69.2 | % | ||||||||
Total Commissions
|
Ps. | 866.6 | Ps. | 670.2 | 29.3 | % | ||||||
Commissions earned by subsidiaries
|
285.7 | 226.9 | 25.9 | % | ||||||||
Recovery of loan expenses
|
37.3 | 68.7 | -45.7 | % | ||||||||
Others
|
33.2 | 11.8 | 181.7 | % | ||||||||
Total Others
|
Ps. | 356.2 | Ps. | 307.4 | 15.9 | % | ||||||
Total Other Income from Services
|
Ps. | 1,222.8 | Ps. | 977.6 | 25.1 | % |
Twelve-month periods ended June 30,
|
% Change
|
|||||||||||
2014
|
2013
|
2014/2013 | ||||||||||
(in millions of Pesos, except for percentages)
|
||||||||||||
Structuring and underwriting fees
|
Ps. | 14.3 | Ps. | 8.2 | 74.4 | % | ||||||
Retail Bank originations
|
6.3 | 2.0 |
NM
|
|||||||||
Collections
|
0.2 | 0.2 | 26.6 | % | ||||||||
Banking services
|
384.8 | 155.4 | 147.6 | % | ||||||||
Commissions paid to real estate agents
|
40.7 | 28.3 | 43.6 | % | ||||||||
Total Commissions
|
446.3 | 194.1 | 130.0 | % | ||||||||
Contributions and taxes on income from services
|
61.6 | 39.2 | 57.1 | % | ||||||||
Total Other expenses for services
|
Ps. | 507.9 | Ps. | 233.3 | 117.7 | % |
Twelve-month periods ended June 30,
|
% Change
|
|||||||||||
2014
|
2013
|
2014/2013 | ||||||||||
(in millions of Pesos, except for percentages)
|
||||||||||||
Salaries and social security contributions
|
Ps. | 1,284.8 | Ps. | 845.0 | 52.1 | % | ||||||
Fees and external administrative services
|
329.7 | 221.2 | 49.0 | % | ||||||||
Advertising and publicity
|
118.3 | 88.5 | 33.6 | % | ||||||||
Value added tax and other taxes
|
113.9 | 115.4 | -1.2 | % | ||||||||
Electricity and communications
|
71.9 | 56.5 | 27.3 | % | ||||||||
Maintenance and repair
|
54.0 | 37.2 | 45.2 | % | ||||||||
Depreciation of bank premises and equipment
|
21.0 | 15.8 | 32.6 | % | ||||||||
Amortization of organizational expenses
|
41.3 | 19.5 | 111.3 | % | ||||||||
Corporate personnel benefits
|
121.8 | 43.8 | 178.2 | % | ||||||||
Rent
|
69.8 | 49.9 | 39.8 | % | ||||||||
Others
|
114.3 | 119.4 | -4.3 | % | ||||||||
Total
|
Ps. | 2,340.8 | Ps. | 1,612.2 | 45.2 | % |
Twelve-month Periods ended June 30,
|
% Change
|
|||||||||||
2014
|
2013
|
2014/2013 | ||||||||||
(in millions of Pesos, except for percentages)
|
||||||||||||
Penalty interest
|
Ps. | 59.3 | Ps. | 54.8 | 8.1 | % | ||||||
Reversal of provision for loan losses
|
15.4 | 9.7 | 58.5 | % | ||||||||
Loan loss recoveries
|
66.7 | 91.1 | -26.8 | % | ||||||||
Others
|
47.5 | 37.7 | 25.9 | % | ||||||||
Total Miscellaneous Income
|
Ps. | 188.9 | Ps. | 193.3 | -2.3 | % | ||||||
Provision for lawsuits contingencies
|
Ps. | 29.4 | Ps. | 18.9 | 55.2 | % | ||||||
Provision for other contingencies and miscellaneous receivables
|
7.4 | 0.9 |
NM
|
|||||||||
Provision for administrative organization
|
11.2 | -1.7 |
NM
|
|||||||||
Other taxes
|
26.3 | 26.3 | 72.3 | % | ||||||||
Benefits prepayments
|
71.3 | 71.3 | -10.7 | % | ||||||||
Others
|
142.5 | 46.3 |
NM
|
|||||||||
Total Miscellaneous Expenses
|
Ps. | 288.1 | Ps. | 162.0 | 77.7 | % | ||||||
Total Miscellaneous Expenses, net
|
Ps. | (99.2 | ) | Ps. | 31.4 |
NM
|
June 30, 2014
|
||||
(in millions of Pesos)
|
||||
Holding booked at fair value
|
||||
Government securities denominated in Pesos
|
439.8 | |||
Government securities denominated in US$
|
844.0 | |||
Ps. | 1,283.8 | |||
Holding booked at cost plus return
|
||||
Discount Bonds
|
13.5 | |||
PRO XIII Bonds
|
15.8 | |||
Other Bonds
|
39.5 | |||
Ps. | 68.8 | |||
Investment in listed corporate securities
|
||||
Corporate securities denominated in Pesos
|
345.6 | |||
Ps. | 345.6 | |||
Securities issued by the BCRA
|
||||
Quoted bills and notes issued by the BCRA
|
354.5 | |||
Unquoted bills and notes issued by the BCRA
|
1,342.5 | |||
Ps. | 1,697.0 | |||
Total
|
Ps. | 3,395.2 |
June 30, 2014
|
||||
(in millions of Pesos)
|
||||
Government Securities by country:
|
||||
Argentina
|
3,395.2 | |||
Ps. | 3,395.2 | |||
Government Securities by counterparty:
|
||||
Government securities
|
1,352.6 | |||
Central Bank bills and notes
|
1,697.0 | |||
Corporate securities
|
345.6 | |||
Ps. | 3,395.2 | |||
Government Securities by Financial Instruments in accordance with Argentine Banking GAAP:
|
||||
Recorded at fair value
|
1,983.9 | |||
Recorded at cost plus return
|
1,411.3 | |||
Ps. | 3,395.2 |
·
|
Banco Hipotecario’s portfolios of securities are monitored on a daily basis and risk is quantified through globally accepted methodologies and practices ( “value at risk”) whose limits are fixed by the Finance Committee. The robustness of the models used is verified through back-testing procedures and the portfolio exposed to price risks is subject to stress testing.
|
·
|
As regards the foreign exchange rate risk, exposure to foreign exchange and its associated risk is described in a weekly report that details the different products and securities exposed.
|
·
|
As regards interest rate risk, the amounts and contractual conditions of new originations and of the current portfolio (i.e., loans, deposits, swaps, hedges, securities and other) are monitored to ensure that Banco Hipotecario is permanently within the limits of its pre-defined risk appetite. This follow up is accompanied by an ongoing analysis of the various hedging alternatives in order to reduce interest rate balances.
|
At June 30,
|
% Change
|
|||||||||||
2014
|
2013
|
2014/2013 | ||||||||||
(in millions of Pesos, except for percentages)
|
||||||||||||
Bonds
|
Ps. | 3,501.7 | Ps. | 2,291.7 | 52.8 | % | ||||||
Borrowings from Argentina Central Bank.
|
0.1 | - |
NM
|
|||||||||
Borrowings from banks and international entities
|
558.4 | 393.0 | 42.1 | % | ||||||||
Deposits
|
13,691.3 | 8,899.2 | 53.8 | % | ||||||||
Total
|
Ps. | 17,751.5 | Ps. | 11,583.9 | 53.2 | % |
Outstanding principal amount
|
Date of issue
|
Maturity Date
|
Annual
Interest rate
|
||||
(millions of Pesos)
|
(%)
|
||||||
Banco Hipotecario S.A.
|
|||||||
Series 5 (US$ 250,000 thousand)
|
1,709.8 |
Apr. 27, 2006
|
Apr. 27, 2016
|
9.750%
|
|||
Series IX (Ps.258,997)
|
202.4 |
Apr 25, 2013
|
Jan 25, 2015
|
Badlar +280bp
|
|||
Series X (Ps.34,523)
|
32.5 |
Aug 14, 2013
|
Aug 09, 2014
|
22.00%
|
|||
Series XI (Ps.146,137)
|
131.0 |
Aug 14, 2013
|
May 14, 2015
|
Badlar +375bp
|
|||
Series XII (US$ 44,508 thousand)
|
362.0 |
Aug 14, 2013
|
Aug 14, 2017
|
3.95%
|
|||
Series XIII (Ps.55,510)
|
55.6 |
Nov 11, 2013
|
Nov 06, 2014
|
23.50%
|
|||
Series XIV (Ps.115,400)
|
115.4 |
Nov 11, 2013
|
Nov 11, 2015
|
Badlar +375bp
|
|||
Series XV (Ps.12,340)
|
12.3 |
Jan 31, 2014
|
Jan 26, 2015
|
27.00%
|
|||
Series XVI (Ps.89,683)
|
89.7 |
Jan 31, 2014
|
Jan 31, 2016
|
Badlar +425bp
|
|||
Series XVIII (Ps.20,046)
|
20.0 |
May 16, 2014
|
Feb 16, 2015
|
27.00%
|
|||
Series XIX (Ps.275,830)
|
270.0 |
May 16, 2014
|
Nov 16, 2015
|
Badlar +375bp
|
|||
BACS Banco de Crédito y Securitización S.A.
|
|||||||
Series I (Ps.130,435)
|
126.3 |
Feb 19, 2014
|
Aug 19, 2015
|
Badlar +450bp
|
|||
Tarshop S.A.
|
|||||||
Long term bond Series VIII (Ps.79,589)
|
74.0 |
Jan 28, 2013
|
Jul 30, 2014
|
Badlar+445bp
|
|||
Long term bond Series X (Ps.72,592)
|
70.6 |
May 23, 2013
|
Nov 23, 2014
|
Badlar+475bp
|
|||
Long term bond Series XI (Ps.10,837)
|
9.7 |
May 23, 2013
|
May 23, 2016
|
Badlar+580bp
|
|||
Long term bond Series XII (Ps.83,588)
|
74.8 |
Aug 09, 2013
|
Aug 09, 2015
|
15.00%
|
|||
Long term bond Series XIV (Ps.30,245)
|
28.4 |
Apr 21, 2014
|
Jan 21, 2015
|
30.00%
|
|||
Long term bond Series XV (Ps.119,755)
|
117.2 |
Apr 21, 2014
|
Oct 21, 2015
|
Badlar+490bp
|
|||
Ps. 3,501.7
|
At June 30,
|
%Change
|
|||||||||||
2014
|
2013
|
2014/2013 | ||||||||||
(in millions of Pesos, except for percentages)
|
||||||||||||
Checking accounts
|
Ps. | 2,800.9 | Ps. | 1,689.8 | 65.8 | % | ||||||
Saving accounts
|
1,662.4 | 1,225.6 | 35.6 | % | ||||||||
Time deposits
|
9,049.6 | 5,870.2 | 54.2 | % | ||||||||
Other deposits accounts
|
178.4 | 113.6 | 57.0 | % | ||||||||
Accrued interest payable
|
215.9 | 78.9 | 173.5 | % | ||||||||
Total
|
Ps. | 13,907.2 | Ps. | 8,978.1 | 54.9 | % |
·
|
Cash generated by operations;
|
·
|
Cash generated by issuance of debt securities;
|
·
|
Cash from borrowing and financing arrangements; and
|
·
|
Cash proceeds from the sale of real estate assets.
|
·
|
capital expenditures for acquisition or construction of investment properties and property, plant and equipment;
|
·
|
interest payments and repayments of debt;
|
·
|
acquisition of shares in companies;
|
·
|
payments of dividends; and
|
·
|
acquisitions or purchases of real estate.
|
Year ended June 30,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
(in millions of Ps.)
|
||||||||||||
Net cash flow generated by operations
|
833.9 | 1,022.0 | 863.4 | |||||||||
Net cash flow used in investment activities
|
261.3 | (917.1 | ) | (45.9 | ) | |||||||
Net cash flow used in financing activities
|
(1,389.7 | ) | (596.8 | ) | (306.3 | ) | ||||||
Net (decrease) increase in cash and cash equivalents
|
(294.5 | ) | (491.9 | ) | 511.2 |
Currency
|
Less than 1 year (4)
|
More than 1 and up to 2 years
|
More than 2 and up to 3 years
|
More than 3 and up to 4 years
|
More than 4 years
|
Total (1)
|
Anual Average Interest Rate
|
||||||||||||||||
(In thousands of Pesos, constant currency, as of June 30, 2014)(2)
|
%
|
||||||||||||||||||||||
Bank loans (3)
|
$ | 687,406 | 5,846 | 2,312 | - | - | 695,564 |
20.2%
|
|||||||||||||||
Banco Provincia de Buenos Aires loan
|
$ | 106,469 | - | - | - | - | 106,469 |
22.51%
|
|||||||||||||||
Other loans
|
NIS
|
15,089 | - | - | - | - | 15,089 | N/A | |||||||||||||||
IRSA Commercial Properties’ 2017 Notes for US$ 120 M (2)
|
US$
|
10,677 | 1,025,376 | - | - | - | 1,036,053 |
7.88%
|
|||||||||||||||
IRSA’s 2015 Notes (Serie I)
|
$ | 214,084 | - | - | - | - | 214,084 |
Badlar + 395ptos
|
|||||||||||||||
IRSA’s 2017 Notes (2)
|
US$
|
47,318 | 1,352,655 | - | - | - | 1,399,973 |
8.50%
|
|||||||||||||||
IRSA’s 2017 Notes
|
$ | 258 | 10,730 | - | - | - | 10,988 |
Badlar + 450 ptos
|
|||||||||||||||
IRSA’s 2020 Notes (2)
|
US$
|
64,795 | - | - | - | 1,244,990 | 1,309,785 |
11.50%
|
|||||||||||||||
Related Party
|
$ | 1,633 | 2,249 | - | - | - | 3,882 |
15.25%
|
|||||||||||||||
Related Party
|
$ | 4,388 | 3,500 | 1,750 | - | - | 9,638 |
24%
|
|||||||||||||||
Related Party
|
$ | 7,826 | - | - | - | - | 7,826 |
Badlar + 300
|
|||||||||||||||
Related Party
|
$ | - | 14,438 | - | - | - | 14,438 |
Badlar
|
|||||||||||||||
Syndicated loans
|
$ | 75,485 | - | - | - | - | 75,485 |
15.30%
|
|||||||||||||||
Seller financing (2)
|
US$
|
- | - | - | - | 21,271 | 21,271 | N/A | |||||||||||||||
Seller financing (2)
|
US$
|
- | - | - | - | 49,688 | 49,688 |
3.50%
|
|||||||||||||||
Financial Leases (2)
|
US$
|
1,512 | 612 | 611 | - | - | 2,735 |
from 7.14% a 13.28%
|
|||||||||||||||
Total bank and other debt
|
1,236,940
|
2,415,406 | 4,673 | 0 | 1,315,949 |
4,972,968
|
(1) Figures may not sum due to rounding.
|
||||||||||
(2) Exchange rate as of June 30, 2015 US$1.00 = Ps. 9,088, R$ 1.00 = Ps.2.93 and NIS 1.00 = Ps. 2.4072.93 and NIS 1.00 = Ps. 2.407
|
||||||||||
(3) Includes bank overdrafts.
|
||||||||||
(4) Incldes acrrued interest. |
·
|
50% of the cumulative consolidated net income; or
|
·
|
75% of the cumulative consolidated net income if the consolidated interest coverage ratio for the most recent four consecutive fiscal quarters is at least 3.0 to 1; or
|
·
|
100% of the cumulative consolidated net income if the consolidated interest coverage ratio for the most recent four consecutive fiscal quarters is at least 4.0 to 1; plus
|
·
|
100% of the aggregate net cash proceeds (with certain exceptions) and the fair market value of property other than cash received by the Company or by its restricted subsidiaries from (a) any contribution to the Company’s capital stock or the capital stock of its restricted subsidiaries or issuance and sale of the Company’s qualified capital stock or the qualified capital stock of its restricted subsidiaries subsequent to the issue of the Company’s notes due 2017, or (b) issuance and sale subsequent to the issuance of the company’s notes due 2017 or its indebtedness or the indebtedness of its restricted subsidiaries that has been converted into or exchanged for qualified capital stock of the Company, (c) any kind of reduction in the Company’s indebtedness or the indebtedness of any of its restricted subsidiaries; or (d) any kind of reduction in investments in debt certificates (other than permitted investments) and in the return on assets; or (e) any distribution received from an unrestricted subsidiary.
|
As of June 30, 2015
|
Less than 1 year
|
Between 1 and 2 years
|
Between 2 and 3 years
|
Between 3 and 4 years
|
More than 4 years
|
Total (1)
|
||||||||||||||||||
Trade and other payables
|
447,353 | 10,737 | 2,799 | 326 | - | 461,215 | ||||||||||||||||||
Borrowings (excluding finance lease liabilities)
|
876,481 | 2,822,013 | 147,382 | 142,965 | 1,553,119 | 5,541,960 | ||||||||||||||||||
Finance leases
|
1,515 | 616 | 608 | - | - | 2,739 | ||||||||||||||||||
Derivative financial instruments
|
237,585 | 265,056 | - | - | - | 502,641 | ||||||||||||||||||
Total year
|
1,562,934 | 3,098,422 | 150,789 | 143,291 | 1,553,119 | 6,508,555 |
(1)
|
Includes accrued and prospective interest, if applicable.
|
Name
|
Date of Birth
|
Position in IRSA
|
Date of current appointment
|
Term expiration
|
Current position held since
|
|
Eduardo S. Elsztain
|
01/26/1960
|
Chairman
|
2015
|
2018
|
1991
|
|
Saúl Zang
|
12/30/1945
|
First Vice-Chairman
|
2015
|
2018
|
1994
|
|
Alejandro G. Elsztain
|
03/31/1966
|
Second Vice-Chairman
|
2013
|
2016
|
2001
|
|
Fernando A. Elsztain
|
01/04/1961
|
Regular Director
|
2014
|
2017
|
1999
|
|
Carlos Ricardo Esteves
|
05/25/1949
|
Regular Director
|
2014
|
2017
|
2005
|
|
Cedric D. Bridger
|
11/09/1935
|
Regular Director
|
2015
|
2018
|
2003
|
|
Marcos Fischman
|
04/09/1960
|
Regular Director
|
2015
|
2018
|
2003
|
|
Fernando Rubín
|
06/20/1966
|
Regular Director
|
2013
|
2016
|
2004
|
|
Gary S. Gladstein
|
07/07/1944
|
Regular Director
|
2013
|
2016
|
2004
|
|
Mario Blejer
|
06/11/1948
|
Regular Director
|
2014
|
2017
|
2005
|
|
Mauricio Wior
|
10/23/1956
|
Regular Director
|
2015
|
2018
|
2006
|
|
Gabriel A. G. Reznik
|
11/18/1958
|
Regular Director
|
2014
|
2017
|
2008
|
|
Ricardo H. Liberman
|
12/18/1959
|
Regular Director
|
2014
|
2017
|
2008
|
|
Daniel Ricardo Elsztain
|
12/22/1972
|
Regular Director
|
2014
|
2017
|
2007
|
|
Gastón Armando Lernoud
|
06/04/1968
|
Alternate Director
|
2014
|
2017
|
2014
|
|
Enrique Antonini
|
03/16/1950
|
Alternate Director
|
2013
|
2016
|
2007
|
·
|
designate the managers of our Company and establish the duties and compensation of such managers;
|
·
|
grant and revoke powers of attorney on behalf of our Company;
|
·
|
hire, discipline and fire personnel and determine wages, salaries and compensation of personnel;
|
·
|
enter into contracts related to our business;
|
·
|
manage our assets;
|
·
|
enter into loan agreements for our business and set up liens to secure our obligations; and
|
·
|
perform any other acts necessary to manage our day-to-day business.
|
Name
|
Date of birth
|
Position
|
Current position held since
|
Eduardo S. Elsztain
|
01/26/1960
|
Chief Executive Officer
|
1991
|
Daniel R. Elsztain
|
12/22/1972
|
Chief Operating Officer
|
2012
|
Javier E. Nahmod
|
11/10/1977
|
Chief Real Estate Officer
|
2014
|
David A. Perednik
|
11/15/1957
|
Chief Administrative Officer
|
2002
|
Matías I. Gaivironsky
|
02/23/1976
|
Chief Financial Officer
|
2011
|
Name
|
Date of Birth
|
Position
|
Expiration Date
|
Current position held since
|
José D. Abelovich
|
07/20/1956
|
Regular Member
|
2016
|
1992
|
Marcelo H. Fuxman
|
11/30/1955
|
Regular Member
|
2016
|
1992
|
Noemí I. Cohn
|
05/20/1959
|
Regular Member
|
2016
|
2010
|
Sergio L. Kolaczyk
|
11/28/1964
|
Alternate Member
|
2016
|
2003
|
Roberto D. Murmis
|
04/07/1959
|
Alternate Member
|
2016
|
2005
|
Alicia G. Rigueira
|
12/02/1951
|
Alternate Member
|
2016
|
2006
|
·
|
Effectiveness and efficiency of operations
|
·
|
Reliability of financial reporting, and
|
·
|
Compliance with applicable laws and regulations
|
·
|
the board of directors, by establishing the objectives, principles and values, setting the tone at the top and making the overall assessment of results;
|
·
|
the management of each area is responsible for the internal control in relation to objectives and activities of the relevant area, i.e. the implementation of policies and procedures to achieve the results of the areas and, therefore, those of the entity as a whole;
|
·
|
the rest of the personnel plays a role in exercising control, by generating information used in the control system or taking action to ensure control.
|
•
|
ordinary retirement in accordance with applicable labor regulations;
|
|||
•
|
total or permanent incapacity or disability; and
|
|||
•
|
death.
|
•
|
if an employee resigns or is dismissed for no cause, he or she will be entitled to the benefit only if 5 years have elapsed from the moment of each contribution
|
•
|
retirement
|
•
|
total or permanent disability
|
•
|
death
|
Year
|
Development and sale of properties and Office and other non-shopping center retail properties (1)
|
Shopping Centers
|
Hotels(2)
|
Total
|
||||||||||||
As of June 30, 2013
|
91 | 787 | 662 | 1,540 | ||||||||||||
As of June 30, 2014
|
89 | 872 | 647 | 1,608 | ||||||||||||
As of June 30, 2015(3)
|
34 | 973 | 704 | 1,711 |
(1)
|
Includes IRSA, Consorcio Libertador S.A. and Consorcio Maipú 1300 S.A.
|
(2)
|
Includes Hotel Intercontinental, Sheraton Libertador and Llao Llao.
|
(3)
|
Duing April and May 2015, the employees who were assigned to us, and used to be in charge of the building’s operations and the real estate business, were transferred to IRSA Commercial Properties.
|
Name
|
Position
|
Number of Shares
|
Percentage
|
||||||
Directors
|
|||||||||
Eduardo Sergio Elsztain (1)
|
Chairman
|
372,113,311 | 64.3 | % | |||||
Saúl Zang
|
Vice-Chairman I
|
8 | 0.0 | % | |||||
Alejandro Gustavo Elsztain
|
Vice- Chairman II
|
622,400 | 0.1 | % | |||||
Fernando Adrián Elsztain
|
Regular Director
|
- | - | ||||||
Carlos Ricardo Esteves
|
Regular Director
|
- | - | ||||||
Cedric D. Bridger
|
Regular Director
|
- | - | ||||||
Marcos Fischman
|
Regular Director
|
- | - | ||||||
Fernando Rubín
|
Regular Director
|
64,226 | 0.0 | % | |||||
Gary S. Gladstein
|
Regular Director
|
210,030 | 0.0 | % | |||||
Mario Blejer
|
Regular Director
|
- | 0.0 | % | |||||
Mauricio Wior
|
Regular Director
|
- | - | ||||||
Gabriel Adolfo Gregorio Reznik
|
Regular Director
|
- | - | ||||||
Ricardo Liberman
|
Regular Director
|
- | - | ||||||
Daniel Ricardo Elsztain
|
Regular Director
|
146,320 | 0.0 | % | |||||
Gaston Armando Lernoud
|
Alternate Director
|
12,282 | 0.0 | % | |||||
Enrique Antonini
|
Alternate Director
|
- | - | ||||||
Senior Management
|
|||||||||
Matias Gaivironsky
|
Chief Financial Officer
|
46,150 | 0.0 | % | |||||
Javier Ezequiel Nahmod
|
Chief Real Estate Officer
|
26,494 | 0.0 | % | |||||
David Alberto Perednik
|
Chief Administrative Officer
|
11,742 | 0.0 | % | |||||
Supervisory Committee
|
|||||||||
José Daniel Abelovich
|
Member
|
- | - | ||||||
Marcelo Héctor Fuxman
|
Member
|
- | - | ||||||
Noemí Ivonne Cohn
|
Member
|
- | - | ||||||
Sergio Leonardo Kolaczyk
|
Alternate member
|
- | - | ||||||
Roberto Daniel Murmis
|
Alternate member
|
- | - | ||||||
Alicia Graciela Rigueira
|
Alternate member
|
- | - |
(1)
|
Includes (i) 372,112,411 common shares beneficially owned by Cresud, and (ii) 900 common shares owned directly by Mr. Eduardo S. Elsztain.
|
Share Ownership as of June 30, 2015
|
||||||||
Shareholder
|
Number of Shares
|
Percentage (3)
|
||||||
Cresud (1) (2)
|
372,113,311 | 64.3 | % | |||||
Directors and officers (excluding Eduardo Elsztain)
|
1,139,652 | 0.2 | % | |||||
ANSES
|
25,914,834 | 4.5 | % | |||||
Total
|
399,167,797 | 69.0 | % | |||||
(1)
|
Eduardo S. Elsztain is the beneficial owner of 187,772,805, which includes (i) 187,552,100 common shares beneficially owned by IFISA (ii) 880 common shares beneficially owned by Consultores Venture Capital, (iii) 219,825 beneficially owned by Eduardo Sergio Elsztain, representing 37.4% of its total share capital. Although Mr. Elsztain does not own a majority of the common shares of Cresud, he is its largest shareholder and exercises substantial influence over Cresud. If Mr. Elsztain is considered to be the beneficial owner of Cresud due to his substantial influence over it, he would be the beneficial owner of 64.3% of our common shares by virtue of his investment in Cresud.
|
(2)
|
Includes (i) 372,112,411 common shares beneficially owned by Cresud, and (ii) 900 common shares owned directly by Mr. Eduardo S. Elsztain. As a result, Mr. Elsztain’s aggregate beneficial ownership of our outstanding common shares may be as high as 372,113,311 common shares, representing 64.3% of our outstanding common shares.
|
(3)
|
As of June 30, 2015, the number of outstanding common shares was 578,676,460.
|
Changes in Share Ownership
|
||||||||||||||||||||
Shareholder
|
June 30,2015 (%)
|
June 30,2014 (%)
|
June 30, 2013 (%)
|
June 30, 2012 (%)
|
June 30, 2011 (%)
|
|||||||||||||||
Cresud (1)
|
64.3 | 65.5 | 65.5 | 64.2 | 57.7 | |||||||||||||||
Inversiones Financieras del Sur S.A. (2)
|
- | 0.5 | 0.6 | 1.7 | - | |||||||||||||||
D.E. Shaw & Co. Inc.
|
- | - | - | - | 7.7 | |||||||||||||||
Directors and officers (3)
|
0.3 | 0.3 | 0.5 | 0.8 | 1.4 | |||||||||||||||
ANSES
|
4.5 | 4.5 | 4.5 | 4.5 | 4.5 | |||||||||||||||
Total
|
69.1 | 70.8 | 71.1 | 71.2 | 71.3 |
(1)
|
Eduardo S. Elsztain is the beneficial owner of 187,772,805 common shares of Cresud, representing 37.4% of its total share capital. Although Mr. Elsztain does not own a majority of the common shares of Cresud, he is its largest shareholder and exercises substantial influence over Cresud. If Mr. Elsztain is considered to be the beneficial owner of Cresud due to his substantial influence over it, he would be the beneficial owner of 64.3% of our common shares by virtue of his investment in Cresud.
|
(2)
|
Eduardo S. Elsztain is the Chairman of the board of directors of IFIS Limited, a corporation organized under the laws of Bermuda and Inversiones Financieras del Sur S.A., a corporation organized under the laws of Uruguay. Mr. Elsztain holds (through companies controlled by him and proxies) a majority of the voting power in IFIS Limited., which owns 100% of IFISA
|
(3)
|
Includes only direct ownership of our directors and senior management.
|
(4)
|
As of June 30, 2015, the number of outstanding common shares was 578,676,460.
|
(4)
|
5% to our legal reserve, up to 20% of our capital stock;
|
(5)
|
a certain amount determined at a shareholders’ meeting is allocated to compensation of our directors and the members of our Supervisory Committee;
|
(6)
|
to an optional reserve, a contingency reserve, a new account or for whatever other purpose our shareholders may determine.
|
·
|
50% of our cumulative consolidated net income; or
|
·
|
75% of our cumulative consolidated net income if the consolidated interest coverage ratio is at least 3.0 to 1; or
|
·
|
100% of our cumulative consolidated net income if the consolidated interest coverage ratio is at least 4.0 to 1.
|
·
|
100% of the aggregate net cash proceeds (with certain exceptions) and the fair market value of property other than cash received by the Company or by its restricted subsidiaries from (a) any contribution to the Company’s capital stock or the capital stock of its restricted subsidiaries or issuance and sale of the Company’s qualified capital stock or the qualified capital stock of its restricted subsidiaries subsequent to the issue of the Company’s notes due 2017, or (b) issuance and sale subsequent to the issuance of the Company’s notes due 2017 or its indebtedness or the indebtedness of its restricted subsidiaries that has been converted into or exchanged for qualified capital stock of the Company, (c) any kind of reduction in the Company’s indebtedness or the indebtedness of any of its restricted subsidiaries; or (d) any kind of reduction in investments in debt certificates (other than permitted investments) and in the return on assets; or (e) any distribution received from an unrestricted subsidiary.
|
Year declared
|
Cash dividends
|
Cash dividends(1)
|
Stock dividends(1)
|
Total per common share
|
||||||||||||
(in million of Ps.)
|
(Ps.)
|
(Ps.)
|
(Ps.)
|
|||||||||||||
1997
|
15.0
|
0.110
|
—
|
0.110
|
||||||||||||
1998
|
13.0
|
0.060
|
0.05
|
0.110
|
||||||||||||
1999
|
18.0
|
0.076
|
0.04
|
0.116
|
||||||||||||
2000
|
—
|
—
|
0.20
|
0.204
|
||||||||||||
2001
|
—
|
—
|
—
|
—
|
||||||||||||
2002
|
—
|
—
|
—
|
—
|
||||||||||||
2003
|
—
|
—
|
—
|
—
|
||||||||||||
2004
|
—
|
—
|
—
|
—
|
||||||||||||
2005
|
—
|
—
|
—
|
—
|
||||||||||||
2006
|
—
|
—
|
—
|
—
|
||||||||||||
2007
|
—
|
—
|
—
|
—
|
||||||||||||
2008
|
—
|
—
|
—
|
—
|
||||||||||||
2009
|
31.7
|
0.055
|
—
|
0.055
|
||||||||||||
2010
|
120.0
|
0.207
|
—
|
0.207
|
||||||||||||
2011
|
311.6
|
0.539
|
—
|
0.539
|
||||||||||||
2012
|
99.0
|
0.171
|
—
|
0.171
|
||||||||||||
2013
|
180.0
|
0.311
|
—
|
0.311
|
||||||||||||
2014
|
306.6
|
0.532
|
—
|
0.532
|
||||||||||||
2015
|
56.6
|
0.9869
|
—
|
0.9869
|
(1)
|
Corresponds to payments per common share.
|
Year declared
|
Cash dividends(1)
|
Stock dividends(1)
|
Total per share
|
|||||||||
(Ps.)
|
(Ps.)
|
(Ps.)
|
||||||||||
2005
|
14,686,488 | - | 0.0188 | |||||||||
2006
|
29,000,000 | - | 0.0372 | |||||||||
2007
|
47,000,000 | - | 0.0601 | |||||||||
2008
|
55,721,393 | - | 0.0712 | |||||||||
2009
|
60,237,864 | - | 0.0770 | |||||||||
2010
|
56,000,000 | - | 0.0716 | |||||||||
2011
|
243,824,500 | - | 0.1936 | |||||||||
2012
|
294,054,600 | - | 0.2334 | |||||||||
2013
|
306,500,000 | - | 0.2432 | |||||||||
2014
|
407,522,074 | - | 0.3234 | |||||||||
2015
|
437,193,000 | - | 0.3469 |
(1)
|
Corresponds to payments per share.
|
•
|
Consideration of documents contemplated in Section 234, paragraph 1, of the Argentine Companies Law No. 19,550 for the fiscal year ended June 30, 2015.
|
•
|
Consideration of Board of Directors’ performance.
|
•
|
Consideration of Supervisory Committee’s performance.
|
• Consideration of compensation payable to the Board of Directors for $18,596,284 (total compensation) for the fiscal year ended June 30, 2015. Delegation on the Board of Directors of powers to approve the Audit Committee’s budget.
|
•
|
Consideration of compensation payable to the Supervisory Committee for the fiscal year ended June 30, 2015.
|
•
|
Determination of the number and election of Regular Directors and Alternate Directors, as applicable.
|
•
|
Appointment of Regular and Alternate Members of the Supervisory Committee.
|
•
|
Appointment of Certifying Accountant for the next fiscal year and determination of its compensation. Delegation of powers.
|
•
|
Updating of report on Shared Services Agreement.
|
•
|
Treatment of amounts paid as personal assets tax levied on the shareholders.
|
•
|
Consideration of renewal of delegation on the Board of Directors of the powers to determine the time and currency of issue and further terms and conditions of the notes to be issued under the Global Note Program for up to US$ 300,000,000 currently outstanding, in accordance with the resolutions adopted at the Shareholders’ Meeting dated October 31, 2011.
|
•
|
Treatment and allocation of net income for the fiscal year ended June 30, 2015 for $520,161 thousand. Consideration of payment of a cash dividend for up to $72,000 thousand.
|
•
|
Consideration of Special Merger Financial Statements of Unicity SA; Special Merger Financial Statements of Solares de Santa María SA; Special Spin-Off Financial Statements of E-Commerce Latina SA; Special Spin-off-Merger Financial Statements of E-Commerce Latina SA; Special Merger Individual Financial Statements of IRSA Inversiones y Representaciones Sociedad Anónima (IRSA) and Consolidated Financial Statements of IRSA for Merger with Solares de Santa María SA and Unicity SA and Spin-Off-Merger with E-Commerce Latina SA prepared as of June 30, 2015, as well as Supervisory Committee’s and Auditor’s Reports. Consideration of preliminary merger agreement with Solares de Santa María SA and Unicity SA and preliminary spin-off-merger agreement with E-Commerce Latina SA and further documents. Authorizations and delegations of powers. Appointment of representative to execute final agreement and carry out additional proceedings.
|
•
|
Treatment and allocation of net income for the fiscal year ended June 30, 2015. Consideration of payment of a cash dividend for up to Ps. 72.0 million.
|
•
|
Consideration of compensation payable to the Board of Directors for Ps. 18.6 million (total compensation) for the fiscal year ended June 30, 2015.
|
•
|
Consideration of renewal of delegation on the Board of Directors of the powers to determine the time and currency of issue and further terms and conditions of the notes to be issued under the Global Note Program for up to US$ 300,000,000 currently outstanding, in accordance with the resolutions adopted at the Shareholders’ Meeting dated October 31, 2011.
|
Buenos Aires Stock Exchange
|
NYSE
|
|||||||||||||||||||||||
Share
|
Ps. per Share
|
GDS
|
US$ per GDS
|
|||||||||||||||||||||
Volume
|
High
|
Low
|
Volume
|
High
|
Low
|
|||||||||||||||||||
Fiscal Year 2011
|
||||||||||||||||||||||||
1st Quarter
|
5,280,873 | 5.80 | 4.12 | 3,216,854 | 14.79 | 10.41 | ||||||||||||||||||
2nd Quarter
|
6,160,767 | 6.97 | 5.52 | 6,564,773 | 17.56 | 13.92 | ||||||||||||||||||
3rd Quarter
|
4,155,521 | 6.85 | 5.72 | 2,538,953 | 16.77 | 13.80 | ||||||||||||||||||
4th Quarter
|
2,138,722 | 5.90 | 5.29 | 3,134,678 | 13.78 | 12.46 | ||||||||||||||||||
Annual
|
17,735,883 | 6.97 | 4.12 | 15,455,258 | 17.56 | 10.41 | ||||||||||||||||||
Fiscal Year 2012
|
||||||||||||||||||||||||
1st Quarter
|
1,559,282 | 5.83 | 4.00 | 2,145,035 | 13.75 | 8.52 | ||||||||||||||||||
2nd Quarter
|
980,406 | 5.20 | 3.95 | 1,398,563 | 11.17 | 8.60 | ||||||||||||||||||
3rd Quarter
|
1,338,946 | 5.50 | 4.60 | 2,481,773 | 11.24 | 10.01 | ||||||||||||||||||
4th Quarter
|
1,298,975 | 5.03 | 3.87 | 5,169,653 | 9.67 | 6.48 | ||||||||||||||||||
Annual
|
5,177,609 | 5.83 | 3.87 | 11,195,024 | 13.75 | 6.48 | ||||||||||||||||||
Fiscal Year 2013
|
||||||||||||||||||||||||
1st Quarter
|
1,583,675 | 4.90 | 4.25 | 2,809,916 | 7.35 | 6.55 | ||||||||||||||||||
2nd Quarter
|
1,299,758 | 5.65 | 4.40 | 2,584,636 | 8.10 | 6.88 | ||||||||||||||||||
3rd Quarter
|
5,457,467 | 8.00 | 4.95 | 3,557,654 | 9.48 | 7.26 | ||||||||||||||||||
4th Quarter
|
2,940,138 | 8.50 | 5.80 | 5,672,720 | 9.53 | 7.00 | ||||||||||||||||||
Annual
|
11,281,038 | 8.50 | 4.25 | 14,624,926 | 9.53 | 6.55 | ||||||||||||||||||
Fiscal Year 2014
|
||||||||||||||||||||||||
1st Quarter
|
2,288,603 | 8.15 | 5.60 | 3,003,517 | 8.92 | 7.28 | ||||||||||||||||||
2nd Quarter
|
2,143,645 | 11.50 | 8.10 | 3,821,126 | 12.22 | 9.06 | ||||||||||||||||||
3rd Quarter
|
1,044,008 | 12.00 | 10.45 | 1,469,214 | 12.06 | 9.41 | ||||||||||||||||||
4th Quarter
|
1,018,570 | 18.45 | 10.70 | 4,515,032 | 17.73 | 10.71 | ||||||||||||||||||
Annual
|
6,494,826 | 18.45 | 5.60 | 12,808,889 | 17.73 | 7.28 | ||||||||||||||||||
Fiscal Year 2015
|
||||||||||||||||||||||||
1st Quarter
|
4,637,175 | 21.00 | 14.00 | 3,942,683 | 17.39 | 13.76 | ||||||||||||||||||
2nd Quarter
|
591,870 | 21.00 | 16.90 | 4,186,746 | 17.72 | 12.90 | ||||||||||||||||||
3rd Quarter
|
1,769,874 | 25.00 | 17.50 | 4,887,484 | 21.10 | 15.26 | ||||||||||||||||||
4th Quarter
|
1,268,471 | 24.00 | 20,50 | 3,739,942 | 19.88 | 17.61 | ||||||||||||||||||
Annual
|
8,267,390 | 25.00 | 14.00 | 16,756,855 | 21.10 | 12.90 | ||||||||||||||||||
Fiscal Year 2016
|
||||||||||||||||||||||||
1st Quarter
|
4,637,175 | 24.50 | 18.50 | 3,942,683 | 18.54 | 13.92 | ||||||||||||||||||
July 2015
|
1,306,446 | 24.50 | 21.90 | 1,221,373 | 18.54 | 16.65 | ||||||||||||||||||
August, 2015
|
366,564 | 24.20 | 19.10 | 853,091 | 17.91 | 14.21 | ||||||||||||||||||
September, 2015
|
539,736 | 21.00 | 18.50 | 983,941 | 14.97 | 13.92 | ||||||||||||||||||
October, 2015
|
264,740 | 24.95 | 19.80 | 1.841,175 | 18.15 | 14.75 | ||||||||||||||||||
As of November 12, 2015
|
133,484
|
25.50
|
24.50
|
1,360,098
|
17.95
|
17.43
|
C.
|
·
|
Promoting the participation of small investors, union associations, industry groups and trade associations, professional associations and all public savings entities in the capital market, particularly encouraging mechanisms designed to promote domestic savings and channel such funds towards the development of production;
|
·
|
Strengthening mechanisms for the protection of and prevention of abuses against small investors for the protection of consumers’ rights;
|
·
|
Promoting access of small and medium-sized companies to the capital market;
|
·
|
Fostering the creation of a federally integrated capital market through mechanisms designed to achieve an interconnection of computer systems from different trading markets, with the use of state-of-the-art technology;
|
·
|
Encouraging simpler trading procedures available to users to attain greater liquidity and competitiveness in order to provide the most favorable conditions for the implementation of transactions.
|
As of June 30,
|
||||||||
2015
|
2014
|
|||||||
Market capitalization (Ps. billion)
|
4,025 | 3,957 | ||||||
Average daily trading volume (1) (Ps. million)
|
149.6 | 200.5 | ||||||
Number of listed companies
|
99 | 104 |
•
|
Invest, develop and operate real estate developments;
|
||||||||
•
|
Invest, develop and operate personal property, including securities;
|
||||||||
•
|
Construct and operate works, services and public property;
|
||||||||
•
|
Manage real or personal property, whether owned by us or by third parties;
|
||||||||
•
|
Build, recycle, or repair real property whether owned by us or by third parties;
|
||||||||
•
|
Advise third parties with respect to the aforementioned activities;
|
||||||||
•
|
Finance projects, undertakings, works and/or real estate transactions of third parties;
|
||||||||
•
|
Finance, create, develop and operate projects related to Internet.
|
•
|
shall not be allowed to make use of any corporate assets or confidential information for his/her own private purposes;
|
•
|
shall not be allowed to profit or permit a third party to profit, whether by an action or an omission to act, from any business opportunities available to the company;
|
•
|
shall be required to exercise any powers conferred to them solely for the purposes for which they were conferred under the law or the corporate bylaws or by a shareholders’ meeting or the board of directors;
|
•
|
shall be required to meticulously ensure that no conflict of interest, whether direct or indirect, shall under any circumstances arise between his/her actions and the company’s interests.
|
i) Directors, members of the supervisory body or surveillance committee, as well as chief executive officers or special managers of the issuing company appointed under section 270 of Argentine Corporation Law;
|
ii) Natural persons or legal entities controlling or holding a substantial interest, as determined by the CNV, in the capital stock of the issuer or the issuer’s controlling entity;
|
iii) Any other company under the common control of the same controlling entity;
|
iv) The ascendants, descendants, spouses or siblings of any of the natural persons referred to in paragraphs i) and ii) above;
|
v)
|
Companies in which any of the persons referred to in paragraphs i) to iv) above hold a significant direct or indirect interest. Provided none of the circumstances described above is present, a subsidiary of the issuer shall not be deemed a “related party”.
|
•
|
allocate 5% of such net profits to legal reserve, until the amount of such reserve equals 20% of the capital stock;
|
•
|
the sum established by the shareholders’ meeting as remuneration of the of Directors and the supervisory committee;
|
•
|
dividends, additional dividends to preferred shares if any, or to optional reserve funds or contingency reserves or to a new account, or for whatever purpose the shareholders’ meeting determines.
|
•
|
allocate 5% of such net profits to legal reserve, until the amount of such reserve equals 20% of our capital stock;
|
|||
•
|
the sum established by the shareholders’ meeting as remuneration of the board of Directors and the supervisory committee; and
|
|||
•
|
dividends, additional dividends to preferred shares if any, or to optional reserve funds or contingency reserves or to a new account, or for whatever purpose the shareholders determine at the shareholders’ meeting.
|
•
|
to be applied to satisfy our liabilities; and
|
|||
•
|
to be proportionally distributed among holders of preferred stock in accordance with the terms of the preferred stock. If any surplus remains, our shareholders are entitled to receive and share proportionally in all net assets available for distribution to our shareholders, subject to the order of preference established by our by-laws.
|
•
|
acquisitions by persons holding or controlling common shares or convertible securities in accordance to Decree N° 677/2001, supersede by Law N° 26,831, notwithstanding the provisions of the Comisión Nacional de Valores ; and
|
||
•
|
holdings of more than 35%, which derive from the distribution of common shares or dividends paid in shares approved by the shareholders, or the issuance of common shares as a result of a merger approved by the shareholders; in both cases, the excess holding shall be disposed of within 180 days of its registration in the relevant shareholder’s account, or prior to the holding of our shareholders meeting, whatever occurs first.
|
•
|
matters that may not be approved at an ordinary shareholders’ meeting;
|
||||||||
•
|
the amendment of our by-laws;
|
||||||||
•
|
reductions in our share capital;
|
||||||||
•
|
redemption, reimbursement and amortization of our shares;
|
||||||||
•
|
mergers, and other corporate changes, including dissolution and winding-up;
|
||||||||
•
|
limitations or suspensions to preemptive rights to the subscription of the new shares; and
|
||||||||
•
|
issuance of debentures, convertible negotiable obligations and bonds that not qualify as notes (obligaciones negociables).
|
•
|
advanced winding-up of the company;
|
||||||
•
|
transfer of the domicile of the company outside of Argentina;
|
||||||
•
|
fundamental change in the purpose of the company;
|
||||||
•
|
total or partial mandatory repayment by the shareholders of the paid-in capital; and
|
||||||
•
|
a merger or a spin-off, when our company will not be the surviving company.
|
§
|
a bank;
|
§
|
a dealer in securities or currencies;
|
§
|
a financial institution;
|
§
|
a regulated investment company;
|
§
|
a real estate investment trust;
|
§
|
an insurance company;
|
§
|
a tax exempt organization;
|
§
|
a person holding the common shares or GDSs as part of a hedging, integrated or conversion transaction, constructive sale or straddle;
|
§
|
a trader in securities that has elected the mark-to-market method of accounting for your securities;
|
§
|
a person liable for alternative minimum tax;
|
§
|
a person who owns or is deemed to own 10% or more of the voting stock of our company;
|
§
|
a partnership or other pass –through entity for United States federal income tax purposes; or
|
§
|
a person whose “functional currency” is not the U.S. Dollar.
|
§
|
an individual citizen or resident of the United States;
|
§
|
a corporation created or organized in or under the laws of the United States, any state thereof or the District of Columbia;
|
§
|
an estate the income of which is subject to United States federal income taxation regardless of its source; or
|
§
|
a trust if it (1) is subject to the primary supervision of a court within the United States and one or more United States persons have the authority to control all substantial decisions of the trust or (2) has a valid election in effect under applicable United States Treasury regulations to be treated as a United States person.
|
•
|
at least 75% of our gross income is passive income; or
|
|||
•
|
at least 50% of the value (determined based on a quarterly average) of our assets is attributable to assets that produce or are held for the production of passive income.
|
•
|
the excess distribution or gain will be allocated ratably over your holding period for the common shares or GDSs;
|
|||
•
|
the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we become a PFIC, will be treated as ordinary income; and
|
|||
•
|
the amount allocated to each other year will be subject to tax at the highest tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.
|
•
|
acquisitions by existing shareholders or by those exercising control over shares or convertible securities in accordance with the provisions under Law 26.831, irrespective of the application of the regulations imposed by the CNV; and
|
||
•
|
holdings of more than 35%, which derive from the distribution of common shares or dividends paid in shares approved by the shareholders, or the issuance of common shares as a result of a merger approved by the shareholders; in both cases, the excess holding shall be disposed of within 180 days of its registration in the relevant shareholder’s account, or prior to the holding of our shareholders meeting, whatever occurs first.
|
•
|
the identity and nationality of the offering party and, in the event the offer is made by a group, the identity of each member of the group;
|
||||
•
|
the terms and conditions of the offering, including the price, the tender offer period and the requirements for accepting the tender offer;
|
||||
•
|
accounting documentation required by Argentine law relating to the offering party;
|
||||
•
|
details of all prior acquisitions by the offering party of common shares or securities convertible into shares of our capital stock.
|
•
|
the highest price per share of our common stock paid by the offering party, or on behalf of the offering party, for any acquisition of shares or convertible securities within the 2 years prior to the commencement of the tender offer;
|
||
•
|
the highest closing selling price of a share of our common stock on the BASE during the thirty day period immediately preceding the commencement of the tender offer;
|
||
•
|
the highest price resulting from the calculations made according to the provisions of (i) and (ii) above multiplied by a fraction the numerator of which is such highest price and the denominator of which is the lowest closing price of a share of our common stock on the BASE during the two-year period prior to the period referred to in sub-sections (i) or (ii), as applicable;
|
||
•
|
our aggregate net earnings per common share during our preceding four completed fiscal quarters prior to the commencement of the tender offer, multiplied by our highest price to earnings ratio during the two-year period immediately preceding the commencement of the tender offer. Such multiples shall be determined considering the average closing selling price of our common stock in the BASE, and our aggregate net income from our preceding four completed fiscal quarters; and,
|
||
•
|
the book value per share of our common stock at the time the tender offer is commenced, multiplied by the highest ratio determined by a fraction the numerator of which is the closing selling price of a share of our common stock oi the BASE on each day during the two year period prior to the commencement of the tender offer and the denominator of which is the latest known book value per share of our common stock on each such date.
|
|
· 50% of our cumulative consolidated net income; or
|
|
|
· 75% of our cumulative consolidated net income if our consolidated interest coverage ratio for our most recent four consecutive fiscal quarters is at least 3.0 to 1; or
|
|
|
· 100% of our cumulative consolidated net income if our consolidated interest coverage ratio for our most recent four consecutive fiscal quarters is at least 4.0 to 1; or
|
|
|
· 100% of our aggregate net cash proceeds (with certain exceptions) and the fair market value of property other than cash received by us or by our restricted subsidiaries from (a) any contribution to our capital stock or the capital stock of our restricted subsidiaries or issuance and sale of our qualified capital stock or the qualified capital stock of our restricted subsidiaries subsequent to the issue of our notes due, (b) issuance and sale subsequent to the issuance of our Series I and Series II notes or our indebtedness or the indebtedness of our restricted subsidiaries that has been converted into or exchanged for our qualified capital stock, or (c) any reduction in our indebtedness or any restricted subsidiary, (d) any reduction in debt investment (other than permitted investments) and return on assets, or (e) any distribution received from non-restricted subsidiaries.
|
B.
|
Management´s Annual Report on Internal Control Over Financial Reporting
|
·
|
Require any additional and complementary documentation related to this analysis.
|
·
|
Verify the independence of the external auditors;
|
·
|
Analyze different kinds of services that the external auditor would provide to the company. This description must also include an estimate of the fees payable for such services, specifically in order to maintain the principle of independence;
|
·
|
Inform the fees billed by the external auditor, separating the services related to the audit services and other special services that could be not included in the audit services previously mentioned.
|
·
|
Take notice of any strategy proposed by of the external auditors and review it in accordance with the reality other business and the risks involved;
|
·
|
Analyze and supervise the working plan of the external auditors considering the business’ reality and the estimated risks;
|
·
|
Propose adjustments (if necessary) to such working plan;
|
·
|
Hold meetings with the external auditors in order to: (a) analyze the difficulties, results and conclusions of the proposed working plan; (b) analyze eventual possible conflicts of interests, related party transactions, compliance with the legal framework and information transparency; and
|
NYSE Standards for U.S. companies Listed Companies Manual Section 303.A
|
|
IRSA’s Corporate Practices
|
Section 303A.01 A NYSE-listed company must have a majority of independent directors on its board of directors.
|
|
We follow Argentine law which does not require that a majority of the board of directors be comprised of independent directors. Argentine law instead requires that public companies in Argentina have a sufficient number of independent directors to be able to form an audit committee of at least three members, the majority of which must be independent pursuant to the criteria established by the Rules of the CNV.
|
Section 303A.02 This section establishes general standards to evaluate directors’ independence (no director qualifies as “independent” unless the board of directors affirmatively determines that the director has no material relationship with the listed company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the company)), and emphasizes that the concern is independence from management. The board is also required to express an opinion with regard to the independence or lack of independence, on a case by case basis, of each individual director.
|
|
CNV standards (former General Resolution N° 400 and now General Resolucion 622/2013, as amended) for purposes of identifying an independent director are substantially similar to NYSE’s standards. CNV standards provide that independence is required with respect to the company itself and to its shareholders with direct or indirect material holdings (35% or more). To qualify as an independent director, such person must not perform executive functions within the company. Close relatives of any persons who would not qualify as “independent directors” shall also not be considered “independent.” When directors are appointed, each shareholder that nominates a director is required to report at the meeting whether or not such director is independent.
|
Section 303A.03 Non-management directors must meet at regularly scheduled executive meetings not attended by management.
|
|
Neither Argentine law nor our by-laws require that any such meetings be held.
Our board of directors as a whole is responsible for monitoring the company’s affairs. In addition, under Argentine law, the board of directors may approve the delegation of specific responsibilities to designated directors or non-director managers of a company. Also, it is mandatory for public companies to form a supervisory committee (composed of syndics) which is responsible for monitoring legal compliance by a company under Argentine law and compliance with its by-laws.
|
Section 303A.05(a) Listed companies shall have a “Compensation Committee” comprised entirely of independent directors.
|
|
Neither Argentine law nor our by-laws require the formation of a “Compensation Committee.” Under Argentine law, if the compensation of the members of the board of directors and the supervisory committee is not established in the by-laws of a company, it should be determined at the shareholders meeting.
|
Section 303A.05(b). The “Compensation Committee” shall have a written charter addressing the committee’s purpose and certain minimum responsibilities as set forth in Section 303A.05(b)(i) and (ii).
|
|
Neither Argentine law nor our by-laws require the formation of a “Compensation Committee.”
|
NYSE Standards for U.S. companies Listed Companies Manual Section 303.A
|
|
IRSA’s Corporate Practices
|
Section 303A.06 Listed companies must have an “Audit Committee” that satisfies the requirements of Rule 10 A-3 under the 1934 Exchange Act (the “Exchange Act”). Foreign private issuers must satisfy the requirements of Rule 10 A-3 under the Exchange Act as of July 31, 2005.
|
|
Pursuant to the Capital Markets Law and the Rules of the CNV, from May 27, 2004 we have appointed an “Audit Committee” composed of three of the members of the Board of Directors. Since December 21, 2005 all of its members are independent as per the criteria of Rule 10 A-3 under the Exchange Act.
|
Section 303A.07(a) The Audit Committee shall consist of at least three members. All of its members shall be financially literate or must acquire such financial knowledge within a reasonable period and at least one of its members shall have experience in accounting or financial administration.
|
|
In accordance with Argentine law, a public Company must have an Audit Committee with a minimum of three members of the board of directors, the majority of which shall be independent pursuant to the criteria established by the CNV. There is no requirement related to the financial expertise of the members of the Audit Committee. However, our Audit Committee has a financial expert. The committee creates its own written internal code that addresses among others: (i) its purpose; (ii) an annual performance evaluation of the committee; and (iii) its duties and responsibilities.
|
ITEM 19.
|
Exhibit N°
|
|
Description of Exhibit
|
||
1.1*
|
|
Estatutos of the registrant, which serve as the registrant’s articles of incorporation and bylaws, and an English translation thereof.
|
||
1.2****
|
|
English translation of the amendment to the bylaws.
|
||
1.3**********
|
Amended and restated English translation of the bylaws.
|
|||
2.1*
|
|
Form of Deposit Agreement among us, The Bank of New York, as Depositary, and the holders from time to time of American Depositary Receipts issued there under.
|
||
2.2*
|
|
Shareholders Agreement, dated November 18, 1997, among IRSA International Limited, Parque Arauco S.A. and Sociedad Anónima Mercado de Abasto Proveedor (SAMAP).
|
||
2.3*
|
|
Put Option Agreement dated November 17, 1997, among IRSA Inversiones y Representaciones Sociedad Anónima and GSEM/AP.
|
||
2.4*
|
|
Offering Circular, dated March 24, 2000, regarding the issuance of Ps. 85,000,000 of our 14.875% Notes due 2005.
|
||
2.5****
|
|
Indenture dated May 11, 2007, between us as Issuer, The Bank of New York as trustee, Co-Registrar, Principal Paying Agent and Transfer Agent, and Banco Santander Río S.A. as Registrar, Paying Agent, Transfer Agent and Representative of the Trustee in Argentina for the US$ 200,000,000 Global Note Program for Notes due no less than 30 days from date of original issue.
|
||
4.1**
|
|
Agreement for the exchange of Corporate Service between us, IRSA and Cresud dated June 30, 2004.
|
||
4.2****
|
|
English translation of the Amendment to the Agreement for the exchange of Corporate Service between us, IRSA and Cresud dated August 23, 2007
|
||
4.3*****
|
|
English translation of the Second Agreement for the Implementation of the Amendment to the Corporate Services Master Agreement, dated August 14, 2008.
|
||
4.4******
|
|
English translation of the Third Agreement for the Implementation of the Amendment to the Corporate Services Master Agreement, dated November 27, 2009.
|
||
4.5*******
|
|
English translation of the Amendment to the Agreement for the exchange of Corporate Service between us, IRSA and Cresud, dated March 12, 2010.
|
||
4.6********
|
English translation of the Amendment to the Agreement for the exchange of Corporate Service between us, IRSA and Cresud, dated July 11, 2011.
|
|||
4.7*********
|
||||
4.8**********
|
English translation of the Sixth Agreement for the Implementation of the Amendment to the Corporate Services Master Agreement dated November 12, 2013.
|
|||
4.9*********** | English translation of the Second Amendment to the exchange of Operating Services Agreement between the Company, Cresud and Alto Palermo, dated February 24, 2014. | |||
4.10 | English translation of the Seventh Agreement for the Implementation of the Amendment to the Corporate Services Master Agreement dated February 18, 2015. | |||
8.1
|
|
|||
11.1***
|
|
Code of Ethics of the Company.
|
||
12.1
|
|
|||
12.2
|
|
|||
13.1
|
|
|||
13.2
|
|
15.1
|
Consolidated financial statements of IDBD Development Corporation Ltd. as of and for the year ended December 31, 2014 unaudited (not in accordance with U.S. GAAS).
|
*
|
Incorporated herein by reference to the same-numbered exhibit to the registrant’s registration statement on Form 20-F (File N° 000-30982).
|
**
|
Incorporated herein by reference to the registrant’s registration statement on Form 6-K (SEC File N° 000-30982).
|
***
|
Incorporated herein by reference to the registrant’s registration statement on Form 6-K reported on August 1, 2005.
|
****
|
Incorporated herein by reference to the annual report on Form 20-F (File N° 128 0-30982) filed with the SEC on December 27, 2007.
|
*****
|
Incorporated herein by reference to the annual report on Form 20-F (File N° 128 0-30982) filed with the SEC on December 30, 2008.
|
******
|
Incorporated herein by reference to the annual report on Form 20-F (File N° 1280-30982) filed with the SEC on December 30, 2009.
|
*******
|
Incorporated herein by reference to the annual report on Form 20-F (File N° 1280-30982) filed with the SEC on December 30, 2010.
|
********
|
Incorporated herein by reference to the annual report on Form 20-F (File N° 1280-30982) filed with the SEC on December 28, 2011.
|
*********
|
Incorporated herein by reference to the annual report on Form 20-F (File N° 1280-30982) filed with the SEC on October 26, 2012.
|
********** | Incorporated herein by reference to the annual report on Form 20-F (File N° 1280-30982) filed with the SEC on October 31, 2014. |
IRSA Inversiones y Representaciones Sociedad Anónima | |||
Date November 17, 2015
|
By:
|
/s/ Matias I. Gaivironsky | |
Name Matías I. Gaivinronsky | |||
Title Chief Financial Officer | |||
INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS
IRSA Inversiones y Representaciones Sociedad Anónima
|
Page |
|
|
Report of Independent Registered Public Accounting Firm
|
F - 2
|
Consolidated Statements of Financial Position as of June 30, 2015 and 2014
|
F - 3
|
Consolidated Statements of Comprehensive Income for the fiscal years ended June 30, 2015, 2014 and 2013
|
F - 4
|
Consolidated Statements of Changes in Shareholders’ Equity for the fiscal years ended June 30, 2015, 2014 and 2013
|
F - 6
|
Consolidated Statements of Cash Flows for the fiscal years ended June 30, 2015, 2014 and 2013
|
F - 9
|
Notes to the Consolidated Financial Statements
|
F - 10
|
Report of Independent Registered Public Accounting Firm
ASSETS
|
Note
|
06.30.2015
|
06.30.2014
|
||||||
Non- Current Assets
|
|||||||||
Investment properties
|
10
|
3,490,077 | 3,269,595 | ||||||
Property, plant and equipment
|
11
|
243,134 | 220,013 | ||||||
Trading properties
|
12
|
128,104 | 130,657 | ||||||
Intangible assets
|
13
|
127,409 | 124,085 | ||||||
Investments in associates and joint ventures
|
8,9
|
2,550,946 | 2,260,805 | ||||||
Deferred income tax assets
|
27
|
52,810 | 368,641 | ||||||
Income tax and minimum presumed income tax ("MPIT") credit
|
108,522 | 110,185 | |||||||
Trade and other receivables
|
17
|
115,141 | 92,388 | ||||||
Investments in financial assets
|
18
|
702,503 | 274,716 | ||||||
Derivative financial instruments
|
19
|
206,407 | - | ||||||
Total Non-Current Assets
|
7,725,053 | 6,851,085 | |||||||
Current Assets
|
|||||||||
Trading properties
|
12
|
3,300 | 4,596 | ||||||
Inventories
|
14
|
22,770 | 16,963 | ||||||
Restricted assets
|
16
|
9,424 | - | ||||||
Income tax and minimum presumed income tax ("MPIT") credit
|
19,009 | 15,866 | |||||||
Assets held for sale
|
42
|
- | 1,357,866 | ||||||
Trade and other receivables
|
17
|
1,150,070 | 706,846 | ||||||
Investments in financial assets
|
18
|
295,409 | 234,107 | ||||||
Derivative financial instruments
|
19
|
29,158 | 12,870 | ||||||
Cash and cash equivalents
|
20
|
375,180 | 609,907 | ||||||
Total Current Assets
|
1,904,320 | 2,959,021 | |||||||
TOTAL ASSETS
|
9,629,373 | 9,810,106 | |||||||
SHAREHOLDERS' EQUITY
|
|||||||||
Capital and reserves attributable to equity holders of the parent
|
|||||||||
Share capital
|
574,451 | 573,771 | |||||||
Treasury stock
|
4,225 | 4,905 | |||||||
Inflation adjustment of share capital and treasury stock
|
123,329 | 123,329 | |||||||
Share premium
|
793,123 | 793,123 | |||||||
Additional paid-in capital from treasury stock
|
7,233 | - | |||||||
Cost of treasury stock
|
(33,729 | ) | (37,906 | ) | |||||
Changes in non-controlling interest
|
(5,659 | ) | (21,808 | ) | |||||
Reserve for share-based compensation
|
26
|
63,824 | 53,235 | ||||||
Legal reserve
|
116,840 | 116,840 | |||||||
Special reserve
|
3,824 | 375,487 | |||||||
Reserve for new developments
|
- | 413,206 | |||||||
Cumulative translation adjustment
|
274,667 | 398,931 | |||||||
Accumulated deficit
|
(40,414 | ) | (784,869 | ) | |||||
Total capital and reserves attributable to equity holders of the parent
|
1,881,714 | 2,008,244 | |||||||
Non-controlling interest
|
376,644 | 548,352 | |||||||
TOTAL SHAREHOLDERS' EQUITY
|
2,258,358 | 2,556,596 | |||||||
LIABILITIES
|
|||||||||
Non-Current Liabilities
|
|||||||||
Trade and other payables
|
21
|
254,628 | 202,652 | ||||||
Borrowings….…………
|
24
|
3,736,028 | 3,756,003 | ||||||
Derivative financial instruments
|
19
|
265,056 | 320,847 | ||||||
Deferred income tax liabilities
|
27
|
51,440 | 345,607 | ||||||
Salaries and social security liabilities
|
22
|
2,220 | 3,749 | ||||||
Provisions
|
23
|
374,121 | 205,228 | ||||||
Total Non-Current Liabilities
|
4,683,493 | 4,834,086 | |||||||
Current Liabilities
|
|||||||||
Trade and other payables
|
21
|
895,996 | 678,725 | ||||||
Income tax and minimum presumed income tax ("MPIT") liabilities
|
135,380 | 64,677 | |||||||
Liabilities held for sale
|
42
|
- | 806,612 | ||||||
Salaries and social security liabilities
|
22
|
122,606 | 99,276 | ||||||
Derivative financial instruments
|
19
|
245,088 | 14,225 | ||||||
Borrowings
|
24
|
1,236,940 | 737,477 | ||||||
Provisions
|
23
|
51,512 | 18,432 | ||||||
Total Current Liabilities
|
2,687,522 | 2,419,424 | |||||||
TOTAL LIABILITIES
|
7,371,015 | 7,253,510 | |||||||
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES
|
9,629,373 | 9,810,106 |
IRSA Inversiones y Representaciones Sociedad Anónima | |||
|
By:
|
/s/ | |
Name | |||
Title | |||
Note
|
06.30.2015 | 06.30.2014 | 06.30.2013 | ||||||||||
Income from sales, rents and services
|
30
|
2,515,421 | 2,108,874 | 1,592,890 | |||||||||
Income from expenses and collective promotion fund (“FPC”)
|
30
|
887,208 | 736,302 | 594,290 | |||||||||
Costs
|
31
|
(1,510,574 | ) | (1,354,493 | ) | (1,087,611 | ) | ||||||
Gross Profit
|
1,892,055 | 1,490,683 | 1,099,569 | ||||||||||
Gain from disposal of investment properties
|
3,10
|
1,162,770 | 235,507 | 183,767 | |||||||||
General and administrative expenses
|
32
|
(374,481 | ) | (296,928 | ) | (194,841 | ) | ||||||
Selling expenses
|
32
|
(193,470 | ) | (146,236 | ) | (106,125 | ) | ||||||
Other operating results, net
|
34
|
28,488 | (45,870 | ) | 93,268 | ||||||||
Profit from operations
|
2,515,362 | 1,237,156 | 1,075,638 | ||||||||||
Share of loss of associates and joint ventures
|
8,9
|
(1,022,861 | ) | (413,771 | ) | (7,391 | ) | ||||||
Profit before financial results and income tax
|
1,492,501 | 823,385 | 1,068,247 | ||||||||||
Finance income
|
35
|
137,114 | 131,509 | 119,525 | |||||||||
Finance costs
|
35
|
(1,107,173 | ) | (1,726,875 | ) | (772,412 | ) | ||||||
Other financial results
|
35
|
35,893 | (123,903 | ) | 14,695 | ||||||||
Financial results, net
|
35
|
(934,166 | ) | (1,719,269 | ) | (638,192 | ) | ||||||
Profit / (Loss) before income tax
|
558,335 | (895,884 | ) | 430,055 | |||||||||
Income tax
|
27
|
(488,266 | ) | 64,267 | (132,847 | ) | |||||||
Profit / (Loss) for the year
|
70,069 | (831,617 | ) | 297,208 | |||||||||
Attributable to:
|
|||||||||||||
Equity holders of the parent
|
(41,193 | ) | (786,487 | ) | 238,737 | ||||||||
Non-controlling interest
|
111,262 | (45,130 | ) | 58,471 | |||||||||
Profit / (Loss) per share attributable to equity holders of the parent during the year (Note 36):
|
|||||||||||||
Basic
|
(0.07 | ) | (1.37 | ) | 0.41 | ||||||||
Diluted
|
(0.07 | ) | (1.37 | ) | 0.41 |
IRSA Inversiones y Representaciones Sociedad Anónima | |||
|
By:
|
/s/ | |
Name | |||
Title | |||
06.30.2015 | 06.30.2014 | 06.30.2013 | ||||||||||
Profit / (Loss) for the year
|
70,069 | (831,617 | ) | 297,208 | ||||||||
Other comprehensive income:
|
||||||||||||
Items that may be reclassified subsequently to profit or loss:
|
||||||||||||
Currency translation adjustment
|
(108,097 | ) | 442,844 | 56,799 | ||||||||
Other comprehensive income for the year (i)
|
(108,097 | ) | 442,844 | 56,799 | ||||||||
Total comprehensive income for the year
|
(38,028 | ) | (388,773 | ) | 354,007 | |||||||
Attributable to:
|
||||||||||||
Equity holders of the parent
|
(165,457 | ) | (438,332 | ) | 287,926 | |||||||
Non-controlling interest
|
127,429 | 49,559 | 66,081 |
(i)
|
Components of other comprehensive income have no impact on income tax.
|
IRSA Inversiones y Representaciones Sociedad Anónima | |||
|
By:
|
/s/ | |
Name | |||
Title | |||
Attributable to equity holders of the parent
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share capital
|
Treasury stock
|
Inflation
adjustment
of share capital
and treasury
stock (2)
|
Share premium
|
Additional paid-in capital from treasury stock
|
Cost of
treasury
stock
|
Changes in
non-controlling interest
|
Reserve for share-based compensation
|
Legal reserve
|
Special reserve
(1)
|
Reserve for new development
|
Cumulative translation adjustment
|
Accumulated deficit
|
Subtotal
|
Non-controlling interest
|
Total shareholders' equity
|
|||||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2014
|
573,771 | 4,905 | 123,329 | 793,123 | - | (37,906 | ) | (21,808 | ) | 53,235 | 116,840 | 375,487 | 413,206 | 398,931 | (784,869 | ) | 2,008,244 | 548,352 | 2,556,596 | |||||||||||||||||||||||||||||||||||||||||||||
Profit for the year
|
- | - | - | - | - | - | - | - | - | - | - | - | (41,193 | ) | (41,193 | ) | 111,262 | 70,069 | ||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income for the year
|
- | - | - | - | - | - | - | - | - | - | - | (124,264 | ) | - | (124,264 | ) | 16,167 | (108,097 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Total comprehensive income for the year
|
- | - | - | - | - | - | - | - | - | - | - | (124,264 | ) | (41,193 | ) | (165,457 | ) | 127,429 | (38,028 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Reversal of reserve for new developments – Shareholders’ meeting held 06.19.14
|
- | - | - | - | - | - | - | - | (371,663 | ) | (413,206 | ) | - | 784,869 | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||
Reserve for share-based compensation
|
- | - | - | - | - | - | - | 21,999 | - | - | - | - | - | 21,999 | - | 21,999 | ||||||||||||||||||||||||||||||||||||||||||||||||
Equity-settled compensation plan
|
680 | (680 | ) | - | - | 7,233 | 4,177 | - | (11,410 | ) | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
Capital reduction
|
- | - | - | - | - | - | - | - | - | - | - | - | - | - | (228,101 | ) | (228,101 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Changes in non-controlling interest
|
- | - | - | - | - | - | 16,149 | - | - | - | - | - | - | 16,149 | (21,899 | ) | (5,750 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Reimbursement of expired dividends
|
- | - | - | - | - | - | - | - | - | - | - | - | 779 | 779 | 34 | 813 | ||||||||||||||||||||||||||||||||||||||||||||||||
Distribution of dividends of subsidiaries
|
- | - | - | - | - | - | - | - | - | - | - | - | - | - | (65,085 | ) | (65,085 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Capital contribution of non-controlling interest
|
- | - | - | - | - | - | - | - | - | - | - | - | - | - | 15,914 | 15,914 | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2015
|
574,451 | 4,225 | 123,329 | 793,123 | 7,233 | (33,729 | ) | (5,659 | ) | 63,824 | 116,840 | 3,824 | - | 274,667 | (40,414 | ) | 1,881,714 | 376,644 | 2,258,358 |
(1)
|
Related to CNV General Resolution N° 609/12. See Note 29.
|
(2)
|
Includes Ps. 901 of Inflation adjustment treasury stock. See Note 29.
|
IRSA Inversiones y Representaciones Sociedad Anónima | |||
|
By:
|
/s/ | |
Name | |||
Title | |||
Attributable to equity holders of the parent
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share capital
|
Treasury stock
|
Inflation
adjustment of
share capital and treasury stock (2)
|
Share
premium
|
Cost of
treasury
stock
|
Changes in
non-controlling interest
|
Reserve for share-based compensation
|
Legal reserve
|
Special reserve
(1)
|
Reserve for new development
|
Cumulative translation adjustment
|
Retained earnings /
Accumulated Deficit
|
Subtotal
|
Non-controlling interest
|
Total shareholders' equity
|
||||||||||||||||||||||||||||||||||||||||||||||
Balance at July 1st, 2013
|
578,676 | - | 123,329 | 793,123 | - | (20,782 | ) | 8,258 | 85,140 | 395,249 | 492,441 | 50,776 | 239,328 | 2,745,538 | 385,151 | 3,130,689 | ||||||||||||||||||||||||||||||||||||||||||||
Loss for the year
|
- | - | - | - | - | - | - | - | - | - | - | (786,487 | ) | (786,487 | ) | (45,130 | ) | (831,617 | ) | |||||||||||||||||||||||||||||||||||||||||
Other comprehensive income for the year
|
- | - | - | - | - | - | - | - | - | - | 348,155 | - | 348,155 | 94,689 | 442,844 | |||||||||||||||||||||||||||||||||||||||||||||
Total comprehensive income for the year
|
- | - | - | - | - | - | - | - | - | - | 348,155 | (786,487 | ) | (438,332 | ) | 49,559 | (388,773 | ) | ||||||||||||||||||||||||||||||||||||||||||
Distribution of retained earnings approved by Shareholders’ meeting held 10.31.13
|
- | - | - | - | - | - | - | 31,700 | (19,762 | ) | - | - | (11,938 | ) | - | - | - | |||||||||||||||||||||||||||||||||||||||||||
Reversal of reserve for new developments – approved by Shareholders’ meeting held 10.31.13
|
- | - | - | - | - | - | - | - | - | (22,610 | ) | - | 22,610 | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||
Dividends distribution – approved by Shareholders’ meeting held 10.31.13
|
- | - | - | - | - | - | - | - | - | - | - | (250,000 | ) | (250,000 | ) | - | (250,000 | ) | ||||||||||||||||||||||||||||||||||||||||||
Reversal of reserve for new developments – approved by Shareholders’ meeting held 06.19.14
|
- | - | - | - | - | - | - | - | - | (56,625 | ) | - | 56,625 | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||
Reserve for share-based compensation (Note 26)
|
- | - | - | - | - | - | 44,977 | - | - | - | - | - | 44,977 | (287 | ) | 44,690 | ||||||||||||||||||||||||||||||||||||||||||||
Purchase of Treasury stock
|
(4,905 | ) | 4,905 | - | - | (37,906 | ) | - | - | - | - | - | - | - | (37,906 | ) | - | (37,906 | ) | |||||||||||||||||||||||||||||||||||||||||
Distribution of share capital of subsidiaries
|
- | - | - | - | - | - | - | - | - | - | - | - | - | (4,163 | ) | (4,163 | ) | |||||||||||||||||||||||||||||||||||||||||||
Changes in non-controlling interest (Note 3)
|
- | - | - | - | - | (1,026 | ) | - | - | - | - | - | - | (1,026 | ) | (182 | ) | (1,208 | ) | |||||||||||||||||||||||||||||||||||||||||
Reimbursement of expired dividends
|
- | - | - | - | - | - | - | - | - | - | - | 1,618 | 1,618 | 72 | 1,690 | |||||||||||||||||||||||||||||||||||||||||||||
Dividends distribution – approved by Shareholders’ meeting held 06.19.2014
|
- | - | - | - | - | - | - | - | - | - | - | (56,625 | ) | (56,625 | ) | - | (56,625 | ) | ||||||||||||||||||||||||||||||||||||||||||
Dividends distributed by subsidiaries
|
- | - | - | - | - | - | - | - | - | - | - | - | - | (20,837 | ) | (20,837 | ) | |||||||||||||||||||||||||||||||||||||||||||
Capital contribution of non-controlling interest
|
- | - | - | - | - | - | - | - | - | - | - | - | - | 139,039 | 139,039 | |||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2014
|
573,771 | 4,905 | 123,329 | 793,123 | (37,906 | ) | (21,808 | ) | 53,235 | 116,840 | 375,487 | 413,206 | 398,931 | (784,869 | ) | 2,008,244 | 548,352 | 2,556,596 |
(1)
|
Related to CNV General Resolution N° 609/12. See Note 29.
|
(2)
|
Includes Ps. 1,045 of Inflation adjustment treasury stock. See Note 29.
|
IRSA Inversiones y Representaciones Sociedad Anónima | |||
|
By:
|
/s/ | |
Name | |||
Title | |||
Attributable to equity holders of the parent
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
Share capital
|
Inflation
adjustment of share capital
|
Share
premium
|
Changes in
non-controlling interest
|
Reserve for share-based compensation
|
Legal reserve
|
Special reserve
(1)
|
Reserve for new developments
|
Cumulative translation adjustment
|
Retained earnings / Accumulated deficit
|
Subtotal
|
Non-controlling interest
|
Total shareholders’ equity
|
||||||||||||||||||||||||||||||||||||||||
Balance at July 1st, 2012
|
578,676 | 274,387 | 793,123 | (15,714 | ) | 2,595 | 71,136 | - | 419,783 | 14,502 | 510,853 | 2,649,341 | 390,428 | 3,039,769 | ||||||||||||||||||||||||||||||||||||||
Profit for the year
|
- | - | - | - | - | - | - | - | - | 238,737 | 238,737 | 58,471 | 297,208 | |||||||||||||||||||||||||||||||||||||||
Other comprehensive income for the year
|
- | - | - | - | - | - | - | - | 49,189 | - | 49,189 | 7,610 | 56,799 | |||||||||||||||||||||||||||||||||||||||
Total comprehensive income for the year
|
- | - | - | - | - | - | - | - | 49,189 | 238,737 | 287,926 | 66,081 | 354,007 | |||||||||||||||||||||||||||||||||||||||
Appropriation of retained earnings approved by Shareholders’ meeting held 10.31.12
|
- | - | - | - | - | 14,004 | - | 72,658 | - | (86,662 | ) | - | - | - | ||||||||||||||||||||||||||||||||||||||
Reclassification of the deferred tax liability – Approved by Shareholders’ meeting held 10.31.12
|
- | (151,058 | ) | - | - | - | - | - | - | - | 151,058 | - | - | - | ||||||||||||||||||||||||||||||||||||||
Dividends distribution – approved by Shareholders’ meeting held 10.31.12
|
- | - | - | - | - | - | - | - | - | (180,000 | ) | (180,000 | ) | - | (180,000 | ) | ||||||||||||||||||||||||||||||||||||
Dividends distribution of non-controlling interest
|
- | - | - | - | - | - | - | - | - | - | - | (27,045 | ) | (27,045 | ) | |||||||||||||||||||||||||||||||||||||
Acquisition of non-controlling interest by business combination (Note 3)
|
- | - | - | - | - | - | - | - | - | - | - | 102,723 | 102,723 | |||||||||||||||||||||||||||||||||||||||
Cumulative translation adjustment for interest held before business combination (Note 3)
|
- | - | - | - | - | - | - | - | (12,915 | ) | - | (12,915 | ) | - | (12,915 | ) | ||||||||||||||||||||||||||||||||||||
Distribution of share capital of subsidiaries
|
- | - | - | - | - | - | - | - | - | - | - | (152,102 | ) | (152,102 | ) | |||||||||||||||||||||||||||||||||||||
Reserve for share-based compensation (Note 26)
|
- | - | - | - | 5,663 | - | - | - | - | - | 5,663 | 193 | 5,856 | |||||||||||||||||||||||||||||||||||||||
Reallocation General Resolution N° 609/12
|
- | - | - | - | - | - | 395,249 | - | - | (395,249 | ) | - | - | - | ||||||||||||||||||||||||||||||||||||||
Capital contribution of non-controlling interest
|
- | - | - | - | - | - | - | - | - | - | 6,510 | 6,510 | ||||||||||||||||||||||||||||||||||||||||
Conversion of notes
|
- | - | - | - | - | - | - | - | - | - | - | 126 | 126 | |||||||||||||||||||||||||||||||||||||||
Changes in non-controlling interest
|
- | - | - | (5,068 | ) | - | - | - | - | - | - | (5,068 | ) | (1,798 | ) | (6,866 | ) | |||||||||||||||||||||||||||||||||||
Reimbursement of expired dividends
|
- | - | - | - | - | - | - | - | - | 591 | 591 | 35 | 626 | |||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2013
|
578,676 | 123,329 | 793,123 | (20,782 | ) | 8,258 | 85,140 | 395,249 | 492,441 | 50,776 | 239,328 | 2,745,538 | 385,151 | 3,130,689 |
(1)
|
Corresponds to CNV General Resolution N° 609/12. See Note 29.
|
Note
|
06.30.2015 | 06.30.2014 | 06.30.2013 | ||||||||||
Operating activities:
|
|||||||||||||
Cash generated by operations before income tax paid
|
20
|
1,263,380 | 1,298,251 | 1,141,013 | |||||||||
Income tax and Minimum Presumed Income tax paid
|
(429,492 | ) | (276,272 | ) | (277,640 | ) | |||||||
Net cash generated by operating activities
|
833,888 | 1,021,979 | 863,373 | ||||||||||
Investing activities:
|
|||||||||||||
Capital contributions in associates and joint ventures
|
8,9
|
(39,307 | ) | (20,059 | ) | (67,438 | ) | ||||||
Purchases of associates and joint ventures
|
3,8,9
|
(1,241,562 | ) | (1,131,806 | ) | (25,899 | ) | ||||||
Purchases of investment properties
|
10
|
(407,365 | ) | (264,853 | ) | (210,456 | ) | ||||||
Proceeds from sale of investment properties
|
2,446,685 | 402,139 | 127,688 | ||||||||||
Purchases of property, plant and equipment
|
11
|
(47,788 | ) | (23,224 | ) | (13,415 | ) | ||||||
Purchases of intangible assets
|
13
|
(4,668 | ) | (11,739 | ) | (800 | ) | ||||||
Purchase of investments in financial assets
|
(2,933,606 | ) | (1,533,331 | ) | (950,913 | ) | |||||||
Proceeds from sale of investments in financial assets
|
2,339,172 | 1,647,674 | 1,197,240 | ||||||||||
Advanced payments
|
(13,995 | ) | (29,647 | ) | (15,780 | ) | |||||||
Proceeds from sale of joint ventures
|
55,843 | 22,754 | - | ||||||||||
Acquisition of subsidiaries, net of cash acquired
|
3
|
- | - | (117,874 | ) | ||||||||
Interest received
|
95,051 | 10,166 | 18,399 | ||||||||||
Loans granted to associates and joint ventures
|
- | (2,090 | ) | (41,591 | ) | ||||||||
Dividends received
|
12,873 | 16,896 | 54,246 | ||||||||||
Loans repayments received from associates and joint ventures
|
- | - | 701 | ||||||||||
Net cash used in investing activities
|
261,333 | (917,120 | ) | (45,892 | ) | ||||||||
Financing activities:
|
|||||||||||||
Borrowings
|
606,258 | 501,770 | 646,750 | ||||||||||
Repayments of borrowings
|
(963,900 | ) | (446,164 | ) | (206,390 | ) | |||||||
Payment of seller financing of shares
|
(105,861 | ) | (1,640 | ) | (10,910 | ) | |||||||
Acquisition of non-controlling interest in subsidiaries
|
(5,750 | ) | (1,208 | ) | (4,062 | ) | |||||||
Dividends paid
|
29
|
(69,200 | ) | (113,251 | ) | (239,652 | ) | ||||||
Capital contribution of non-controlling interest
|
15,914 | 139,039 | 6,510 | ||||||||||
Interest paid
|
(546,916 | ) | (414,932 | ) | (269,785 | ) | |||||||
Distribution of capital of subsidiaries
|
(228,101 | ) | (4,163 | ) | (152,102 | ) | |||||||
Repurchase of treasury stock
|
- | (37,906 | ) | - | |||||||||
Payment of seller financing
|
(2,688 | ) | (1,871 | ) | (1,107 | ) | |||||||
Acquisition of derivative financial instruments
|
(110,848 | ) | (37,961 | ) | - | ||||||||
Proceeds from derivative financial instruments
|
1,506 | 62,158 | - | ||||||||||
Issuance of non-convertible notes
|
- | 218,262 | - | ||||||||||
Loans from associates and joint ventures
|
22,151 | 17,246 | 70,672 | ||||||||||
Payments of borrowings from subsidiaries, associates and joint ventures
|
(2,250 | ) | (188,906 | ) | - | ||||||||
Payment of non-convertible notes
|
- | (287,240 | ) | (146,192 | ) | ||||||||
Net cash used in financing activities
|
(1,389,685 | ) | (596,767 | ) | (306,268 | ) | |||||||
Net (decrease) / increase in cash and cash equivalents
|
(294,464 | ) | (491,908 | ) | 511,213 | ||||||||
Cash and cash equivalents at beginning of year
|
20
|
609,907 | 796,902 | 259,169 | |||||||||
Foreign exchange on cash and cash equivalents
|
59,737 | 304,913 | 26,520 | ||||||||||
Cash and cash equivalents at end of the year
|
20
|
375,180 | 609,907 | 796,902 |
1.
|
The Group’s business and general information
|
1.
|
The Group’s business and general information (Continued)
|
2.1.
|
Basis of preparation of the consolidated financial statement
|
(a)
|
Basis of preparation
|
(b)
|
Current and non-current classification
|
2.
|
Summary of significant accounting policies (Continued)
|
(b)
|
Current and non-current classification (Continued)
|
(c)
|
Presentation currency
|
(d)
|
Fiscal year-end
|
(e)
|
Accounting conventions
|
(f)
|
Reporting cash flows
|
(g)
|
Use of estimates
|
2.2.
|
New accounting standards
|
2.2.
|
New accounting standards (Continued)
|
2.2.
|
New accounting standards (Continued)
|
·
|
IFRS 5 “Non-current Assets Held for Sale and Discontinued Operations”: A new classification category has been established for these assets and the amendment adds guidance on how to treat changes to disposal plans for those assets classified as held for sale.
|
·
|
IFRS 7 “Financial Instruments: Disclosures”: It clarifies that amendments established in December, 2011 on offsetting financial assets and liabilities, and amendments established in September 2014 will be of retroactive application to annual fiscal years as from January 1, 2013, in the first case, and January 1, 2016 in the second case. In addition, it sets forth the specific disclosure requirements related to servicing contracts related to financial assets transferred.
|
·
|
IAS 34 “Interim Financial Reporting”: It clarifies that supplementary information included in interim financial statements through cross reference with other statements or reference information should be available contemporaneously with such interim financial statements.
|
2.3.
|
Scope of consolidation
|
(a)
|
Subsidiaries
|
(a)
|
Subsidiaries (Continued)
|
June 30, 2015
|
June 30, 2014
|
June 30, 2013
|
||||||||||||||||||||||||
Name of the entity
|
Place of
business / country of incorporation
|
Main activities
(*)
|
% of ownership interest held
by the Group
|
% of ownership interest held
by the NCI
(5)
|
% of ownership interest held by the Group
|
% of ownership interest held by the NCI
(5)
|
% of ownership interest held by the Group
|
% of ownership interest held by the NCI
(5)
|
||||||||||||||||||
Direct equity interest of IRSA:
|
||||||||||||||||||||||||||
IRSA CP
|
Argentina
|
Real estate
|
95.80 | % | 4.20 | % | 95.71 | % | 4.29 | % | 95.68 | % | 4.32 | % | ||||||||||||
E-Commerce Latina S.A. (4)
|
Argentina
|
Investment
|
100.00 | % | - | 100.00 | % | - | 100.00 | % | - | |||||||||||||||
Efanur S.A.
|
Uruguay
|
Investment
|
100.00 | % | - | 100.00 | % | - | 100.00 | % | - | |||||||||||||||
Hoteles Argentinos S.A.
|
Argentina
|
Hotel
|
80.00 | % | 20.00 | % | 80.00 | % | 20.00 | % | 80.00 | % | 20.00 | % | ||||||||||||
Inversora Bolívar S.A.
|
Argentina
|
Investment
|
100.00 | % | - | 100.00 | % | - | 100.00 | % | - | |||||||||||||||
Llao Llao Resorts S.A. (1)
|
Argentina
|
Hotel
|
50.00 | % | 50.00 | % | 50.00 | % | 50.00 | % | 50.00 | % | 50.00 | % | ||||||||||||
Nuevas Fronteras S.A.
|
Argentina
|
Hotel
|
76.34 | % | 23.66 | % | 76.34 | % | 23.66 | % | 76.34 | % | 23.66 | % | ||||||||||||
Palermo Invest S.A.
|
Argentina
|
Investment
|
100.00 | % | - | 100.00 | % | - | 100.00 | % | - | |||||||||||||||
Ritelco S.A.
|
Uruguay
|
Investment
|
100.00 | % | - | 100.00 | % | - | 100.00 | % | - | |||||||||||||||
Solares de Santa María S.A.
|
Argentina
|
Real estate
|
100.00 | % | - | 100.00 | % | - | 100.00 | % | - | |||||||||||||||
Tyrus S.A.
|
Uruguay
|
Investment
|
100.00 | % | - | 100.00 | % | - | 100.00 | % | - | |||||||||||||||
Unicity S.A.
|
Argentina
|
Investment
|
100.00 | % | - | 100.00 | % | - | 100.00 | % | - | |||||||||||||||
Interest indirectly held through IRSA CP:
|
||||||||||||||||||||||||||
Arcos del Gourmet S.A.
|
Argentina
|
Real estate
|
86.22 | % | 13.78 | % | 86.14 | % | 13.86 | % | 86.12 | % | 13.88 | % | ||||||||||||
Emprendimiento Recoleta S.A.
|
Argentina
|
Real estate
|
51.43 | % | 48.57 | % | 51.38 | % | 48.62 | % | 51.36 | % | 48.64 | % | ||||||||||||
Fibesa S.A.
|
Argentina
|
Real estate
|
95.80 | % | 4.20 | % | 95.71 | % | 4.29 | % | 95.68 | % | 4.32 | % | ||||||||||||
Panamerican Mall S.A.
|
Argentina
|
Real estate
|
76.64 | % | 23.36 | % | 76.57 | % | 23.43 | % | 76.55 | % | 23.45 | % | ||||||||||||
Shopping Neuquén S.A.
|
Argentina
|
Real estate
|
95.38 | % | 4.62 | % | 94.95 | % | 5.05 | % | 94.80 | % | 5.20 | % | ||||||||||||
Torodur S.A.
|
Uruguay
|
Investment
|
95.80 | % | 4.20 | % | 95.71 | % | 4.29 | % | 95.68 | % | 4.32 | % |
(a)
|
Subsidiaries
|
June 30, 2015
|
June 30, 2014
|
June 30, 2013
|
||||||||||||||||||||||||
Name of the entity
|
Place of
business / country of incorporation
|
Main activities
(*)
|
% of
ownership interest held
by the Group
|
% of ownership interest held by the NCI
(5)
|
% of
ownership interest held
by the Group
|
% of ownership interest held by the NCI
(5)
|
% of
ownership interest held
by the Group
|
% of ownership interest held by the NCI
(5)
|
||||||||||||||||||
Interest indirectly held through Tyrus S.A.:
|
||||||||||||||||||||||||||
Dolphin Fund Ltd (2) (3)
|
Bermuda
|
Investment
|
91.57 | % | 8.43 | % | 86.16 | % | 13.84 | % | 99.39 | % | 0.61 | % | ||||||||||||
I Madison LLC
|
United States
|
Investment
|
100.00 | % | - | 100.00 | % | - | 100.00 | % | - | |||||||||||||||
IRSA Development LP
|
United States
|
Investment
|
100.00 | % | - | 100.00 | % | - | 100.00 | % | - | |||||||||||||||
IRSA International LLC
|
United States
|
Investment
|
100.00 | % | - | 100.00 | % | - | 100.00 | % | - | |||||||||||||||
Jiwin S.A.
|
Uruguay
|
Investment
|
100.00 | % | - | 100.00 | % | - | 100.00 | % | - | |||||||||||||||
Liveck S.A.
|
Uruguay
|
Investment
|
100.00 | % | - | 100.00 | % | - | 100.00 | % | - | |||||||||||||||
Real Estate Investment Group LP (“REIG”)
|
Bermuda
|
Investment
|
64.01 | % | 35.99 | % | 64.01 | % | 35.99 | % | 64.01 | % | 35.99 | % | ||||||||||||
Real Estate Investment Group II LP
|
Bermuda
|
Investment
|
80.54 | % | 19.46 | % | 80.54 | % | 19.46 | % | 80.54 | % | 19.46 | % | ||||||||||||
Real Estate Investment Group III LP (3)
|
Bermuda
|
Investment
|
81.19 | % | 18.81 | % | 81.19 | % | 18.81 | % | 81.19 | % | 18.81 | % | ||||||||||||
Real Estate Investment Group IV LP
|
Bermuda
|
Investment
|
100.00 | % | - | 100.00 | % | - | 100.00 | % | - | |||||||||||||||
Real Estate Investment Group V LP
|
Bermuda
|
Investment
|
100.00 | % | - | 100.00 | % | - | 100.00 | % | - | |||||||||||||||
Real Estate Strategies LLC
|
United States
|
Investment
|
100.00 | % | - | 100.00 | % | - | 100.00 | % | - | |||||||||||||||
Interest indirectly held through Efanur S.A.:
|
||||||||||||||||||||||||||
Real Estate Strategies LP
|
Bermuda
|
Investment
|
66.83 | % | 33.17 | % | 66.83 | % | 33.17 | % | 66.83 | % | 33.17 | % |
(*)
|
Substantially all holding companies do not have significant assets and liabilities other than their respective interest holdings in operating entities.
|
(1)
|
The Group has consolidated the investment in Llao Llao Resorts S.A. considering its equity interest and a shareholder agreement that confers it majority of votes in the decision making process.
|
(2)
|
The Group has consolidated its indirect interest in Dolphin Fund Ltd. (DFL) considering its exposure to variable returns coming from its investment in DFL and the nature of the relationship between the Group and the shareholders with right to vote of DFL.
|
(3)
|
Includes interest indirectly held through Ritelco S.A..
|
(4)
|
Includes interest indirectly held through Tyrus S.A..
|
(5)
|
Non controlling interest (NCI).
|
2.
|
Summary of significant accounting policies (Continued)
|
2.3.
|
Scope of consolidation (Continued)
|
(a)
|
Subsidiaries
|
(b)
|
Changes in ownership interests in subsidiaries without change of control
|
(c)
|
Disposal of subsidiaries without of control
|
(d)
|
Associates
|
(d)
|
Associates (Continued)
|
(d)
|
Associates (Continued)
|
(e)
|
Joint arrangements
|
(e)
|
Joint ventures (Continued)
|
2.4.
|
Segment information
|
2.5.
|
Foreign currency translation
|
(a)
|
Functional and presentation currency
|
2.5.
|
Foreign currency translation (Continued)
|
(b)
|
Transactions and balances in foreign currency
|
(c)
|
Group companies
|
2.6.
|
Investment properties
|
2.
|
Summary of significant accounting policies (Continued)
|
2.6.
|
Investment properties (Continued)
|
2.
|
Summary of significant accounting policies (Continued)
|
2.6.
|
Investment properties (Continued)
|
Shopping center portfolio
|
Between 3 and 25 years
|
Office and other rental properties
|
Between 9 and 29 years
|
Hotels buildings and facilities
|
Between 14 and 24 years
|
Other buildings and facilities
|
Between 15 and 30 years
|
Furniture and fixtures
|
10 years
|
Machinery and equipment
|
Between 3 and 10 years
|
Vehicles
|
5 years
|
2.8.
|
Leases
|
2.9.
|
Intangible assets
|
(a)
|
Goodwill
|
(b)
|
Computer software
|
2.9.
|
Intangible assets (Continued)
|
(b)
|
Computer software (Continued)
|
(c)
|
Rights of use
|
(d)
|
Right to receive future units under barter agreements
|
(a)
|
Goodwill
|
(b)
|
Property, plant and equipment, investment property and finite-life intangible assets
|
2.11.
|
Trading properties
|
2.12.
|
Inventories
|
2.12.
|
Inventories (Continued)
|
2.13.
|
Financial instruments
|
(a)
|
Classification
|
2.13.
|
Financial instruments (Continued)
|
(b)
|
Recognition and measurement
|
2.13.
|
Financial instruments (Continued)
|
(b)
|
Recognition and measurement (Continued)
|
(c)
|
Impairment of financial assets
|
2.13.
|
Financial instruments (Continued)
|
(d)
|
Offsetting financial instruments
|
2.14.
|
Derivative financial instruments and hedging activities
|
2.14.
|
Derivative financial instruments and hedging activities (Continued)
|
2.16.
|
Restricted assets
|
2.17.
|
Trade and other receivables
|
2.17.
|
Trade and other receivables (Continued)
|
2.18.
|
Trade and other payables
|
2.19.
|
Tenant deposits
|
2.20.
|
Borrowings
|
2.21.
|
Borrowings costs
|
(a)
|
Pension obligations
|
(b)
|
Termination benefits
|
(c)
|
Bonus plans
|
2.24.
|
Share-based payments
|
·
|
Shopping centers portfolio
|
·
|
Office and other rental properties portfolio
|
·
|
Development property activities
|
·
|
Hotel operations of the Group
|
2.28.
|
Share capital
|
2.29.
|
Earnings / (loss) per share
|
2.33
|
Acquisition of assets carried out between entities under common control
|
2.34
|
Total or partial disposal of foreign operation
|
3.
|
Acquisitions, dispositions, transactions and/or authorization pending approval
|
3.1.
|
Acquisitions and dispositions
|
3.
|
Acquisitions, dispositions, transactions and/or authorization pending approval (Continued)
|
3.1.
|
Acquisition and disposals (Continued)
|
3.
|
Acquisitions, dispositions, transactions and/or authorization pending approval (Continued)
|
3.1.
|
Acquisition and disposals (Continued)
|
3.
|
Acquisitions, dispositions, transactions and/or authorization pending approval (Continued)
|
3.1.
|
Acquisition and disposals (Continued)
|
3.1.
|
Acquisition and disposals (Continued)
|
3.
|
Acquisitions, dispositions, transactions and/or authorization pending approval (Continued)
|
3.1.
|
Acquisition and disposals (Continued)
|
3.
|
Acquisitions, dispositions, transactions and/or authorization pending approval (Continued)
|
3.1.
|
Acquisition and disposals (Continued)
|
3.
|
Acquisitions, dispositions, transactions and/or authorization pending approval (Continued)
|
3.1.
|
Acquisition and disposals (Continued)
|
3.
|
Acquisitions, dispositions, transactions and/or authorization pending approval (Continued)
|
3.1.
|
Acquisition and disposals (Continued)
|
Ps.
|
||||
Carrying value of non-controlling interest
|
949 | |||
Price paid for the non-controlling interest
|
(5,750 | ) | ||
Reserve recognized in the Shareholders’ equity
|
(4,801 | ) |
Ps.
|
||||
Carrying value of non-controlling interest
|
20,950 | |||
Price paid for the non-controlling interest
|
- | |||
Reserve recognized in the Shareholders’ equity
|
20,950 |
3.
|
Acquisitions, dispositions, transactions and/or authorization pending approval (Continued)
|
3.1.
|
Acquisition and disposals (Continued)
|
3.
|
Acquisitions, dispositions, transactions and/or authorization pending approval (Continued)
|
3.1.
|
Acquisition and disposals (Continued)
|
Ps.
|
||||
Carrying value of non-controlling interest acquired by the Group
|
182 | |||
Price paid for the non-controlling interest
|
(1,208 | ) | ||
Reserve recognized in the Shareholders’ equity
|
(1,026 | ) |
3.
|
Acquisitions, dispositions, transactions and/or authorization pending approval (Continued)
|
3.1.
|
Acquisition and disposals (Continued)
|
3.
|
Acquisitions, dispositions, transactions and/or authorization pending approval (Continued)
|
3.1.
|
Acquisition and disposals (Continued)
|
3.
|
Acquisitions, dispositions, transactions and/or authorization pending approval (Continued)
|
3.1.
|
Acquisition and disposals (Continued)
|
Ps.
|
||||
Carrying value of non-controlling interest acquired by the Group
|
824 | |||
Price paid for the non-controlling interest
|
(2,364 | ) | ||
Reserve recognized in the Shareholders’ equity
|
(1,540 | ) |
Ps.
|
||||
Carrying value of the equity interests acquired by the Group
|
857 | |||
Price paid for the non-controlling interest
|
(4,544 | ) | ||
Reserve recognized in the parent’s equity due to the acquisition
|
(3,687 | ) |
4.
|
Risk management (Continued)
|
(a)
|
Market risk management
|
4.
|
Risk management (Continued)
|
(a)
|
Market risk management (Continued)
|
Net monetary position (Liability)/Asset
|
||||||||||||||||
June 30, 2015
|
June 30, 2014
|
|||||||||||||||
Functional Currency |
US$
|
NIS
|
US$
|
NIS
|
||||||||||||
Argentine Peso | (2,575,919 | ) | - | (3,051,877 | ) | - | ||||||||||
Uruguayan Peso | (67,082 | ) | - | (63,254 | ) | - | ||||||||||
US Dollar | - | (244,923 | ) | - | (86,581 | ) | ||||||||||
Total | (2,643,001 | ) | (244,923 | ) | (3,115,131 | ) | (86,581 | ) |
4.
|
Risk management (Continued)
|
(a)
|
Market risk management (Continued)
|
4.
|
Risk management (Continued)
|
(a)
|
Market risk management (Continued)
|
June 30, 2015
|
||||||||||||||||
Functional currency
|
||||||||||||||||
Rate per currency |
Argentine
Peso
|
Uruguayan
Peso
|
US Dollar
|
Total
|
||||||||||||
Fixed rate:
|
||||||||||||||||
Argentine Peso
|
209,487 | - | - | 209,487 | ||||||||||||
US Dollar
|
3,745,811 | 70,959 | 15,089 | 3,831,859 | ||||||||||||
Subtotal fixed-rate borrowings
|
3,955,298 | 70,959 | 15,089 | 4,041,346 | ||||||||||||
Variable rate:
|
||||||||||||||||
Argentine Peso
|
928,887 | - | - | 928,887 | ||||||||||||
US Dollar
|
- | - | - | - | ||||||||||||
Subtotal variable-rate borrowings
|
928,887 | - | - | 928,887 | ||||||||||||
Total borrowings as per analysis
|
4,884,185 | 70,959 | 15,089 | 4,970,233 | ||||||||||||
Finance leases obligations
|
2,735 | - | - | 2,735 | ||||||||||||
Total borrowings as per statement of financial position
|
4,886,920 | 70,959 | 15,089 | 4,972,968 |
4.
|
Risk management (Continued)
|
(a)
|
Market risk management (Continued)
|
June 30, 2014
Functional currency
|
||||||||||||||||
Rate per currency
|
Argentine
Peso
|
Uruguayan
Peso
|
US Dollar
|
Total
|
||||||||||||
Fixed rate:
|
||||||||||||||||
Argentine Peso
|
210,421 | - | - | 210,421 | ||||||||||||
US Dollar
|
3,381,332 | 64,672 | 677,365 | 4,123,369 | ||||||||||||
Subtotal fixed-rate borrowings
|
3,591,753 | 64,672 | 677,365 | 4,333,790 | ||||||||||||
Variable rate:
|
||||||||||||||||
Argentine Peso
|
759,959 | - | - | 759,959 | ||||||||||||
US Dollar
|
- | - | - | - | ||||||||||||
Subtotal variable-rate borrowings
|
759,959 | - | - | 759,959 | ||||||||||||
Total borrowings as per analysis
|
4,351,712 | 64,672 | 677,365 | 5,093,749 | ||||||||||||
Finance lease obligations
|
2,752 | - | - | 2,752 | ||||||||||||
Total borrowings as per statement of financial position
|
4,354,464 | 64,672 |
(i) 677,365
|
5,096,501 |
4.
|
Risk management (Continued)
|
(a)
|
Market risk management (Continued)
|
Increase loss before income tax (in million)
|
||||
Company
|
June 30, 2015
|
|||
IDBD
|
127.9 | |||
Condor
|
39.0 | |||
TGLT
|
7.2 | |||
Avenida
|
10.2 | |||
Others
|
1.7 | |||
Total
|
186 |
(b)
|
Credit Risk Management
|
4.
|
Risk management (Continued)
|
(b)
|
Credit risk management (Continued)
|
4.
|
Risk management (Continued)
|
(c)
|
Liquidity risk management
|
4.
|
Risk management (Continued)
|
(c)
|
Liquidity risk management (Continued)
|
At June 30, 2015
|
Less than 1 year
|
Between 1 and 2 years
|
Between 2 and 3 years
|
Between 3 and 4 years
|
More than 4 years
|
Total
|
||||||||||||||||||
Trade and other payables
|
447,353 | 10,737 | 2,799 | 326 | - | 461,215 | ||||||||||||||||||
Borrowings (excluding finance leases liabilities)
|
876,481 | 2,822,013 | 147,382 | 142,965 | 1,553,119 | 5,541,960 | ||||||||||||||||||
Finance leases
|
1,515 | 616 | 608 | - | - | 2,739 | ||||||||||||||||||
Derivative financial instruments
|
237,585 | 265,056 | - | - | - | 502,641 | ||||||||||||||||||
Total year
|
1,562,934 | 3,098,422 | 150,789 | 143,291 | 1,553,119 | 6,508,555 |
At June 30, 2014
|
Less than 1 year
|
Between 1 and 2 years
|
Between 2 and 3 years
|
Between 3 and 4 years
|
More than 4 years
|
Total
|
||||||||||||||||||
Trade and other payables (i)
|
631,980 | 67,232 | 47,809 | 16,646 | 47,322 | 810,989 | ||||||||||||||||||
Borrowings (excluding finance leases liabilities) (ii)
|
1,733,305 | 653,608 | 2,615,045 | 226,214 | 1,493,185 | 6,721,357 | ||||||||||||||||||
Finance leases
|
1,780 | 547 | 426 | - | - | 2,753 | ||||||||||||||||||
Derivative financial instruments
|
- | 144,808 | 176,039 | - | - | 320,847 | ||||||||||||||||||
Total year
|
2,367,065 | 866,195 | 2,839,319 | 242,860 | 1,540,507 | 7,855,946 |
(i)
|
Includes 170,245 disclosed in the line “Liabilities directly associated with assets classified as held for sale” (Note 42)
|
(ii)
|
Includes 603,021 disclosed in the line “Liabilities directly associated with assets classified as held for sale” (Note 42)
|
(d)
|
Capital risk management
|
4.
|
Risk management (Continued)
|
(d)
|
Capital risk management (Continued)
|
June 30, 2015
|
June 30, 2014
|
|||||||
Gearing ratio (i)
|
68.77 | % | 63.74 | % | ||||
Debt ratio (ii)
|
20.38 | % | 21.50 | % |
4.
|
Risk management (Continued)
|
(d) Capital risk management (Continued)
|
4.
|
Risk management (Continued)
|
(d)
|
Capital risk management (Continued)
|
(a)
|
Business combinations – purchase price allocation
|
(b)
|
Impairment testing of goodwill, assets classified as held for sale, other non-current assets and calculation of fair value
|
(b)
|
Impairment testing of goodwill, assets classified as held for sale, other non-current assets and calculation of fair value (Continued)
|
(b)
|
Impairment testing of goodwill, assets classified as held for sale, other non-current assets and calculation of fair value (Continued)
|
Cash-generating unit
|
Country
|
Segment
|
Valuation method
|
June 30
2015
|
June 30
2014
|
||||||
Torre Bank Boston
|
Argentina
|
Offices and other
|
Market comparable
|
5,481 | 5,481 | ||||||
Distrito Arcos
|
Argentina
|
Offices and other
|
Discounted cash flow
|
30,261 | 31,827 | ||||||
Conil (ii)
|
Argentina
|
Center Properties
|
Market comparable
|
- | 343 | ||||||
Value at year end of non-current assets other than goodwill (i)
|
368,232 | 390,976 | |||||||||
Total assets allocated to Cash-generating units
|
403,974 | 428,627 |
(i) Non-current assets include investment properties (principally shopping centers and offices), property, plant and equipment, intangible assets and net working capital.
|
(ii) As from July 1st, 2014, the Company was merge into IRSA CP.
|
(b)
|
Impairment testing of goodwill, assets classified as held for sale, other non-current assets and calculation of fair value (Continued)
|
2015
|
2014
|
|
Operating Shopping Center
|
Capitalization
|
Capitalization
|
Shopping Centers (concession)
|
Discounted cash flows
|
Discounted cash flow
|
Offices and other
|
Market comparable
|
Market comparable
|
(c) Trading properties
|
(d)
|
Fair value of derivatives and other financial instruments
|
(e) Allowances for trade receivables
|
6.
|
Segment information
|
·
|
The operating segment’s reported revenue, including both sales to external customers and inter-segment sales or transfers, is ten per cent or more of the combined revenue, internal and external, of all operating segments;
|
6.
|
Segment information (Continued)
|
·
|
The absolute amount of its reported profit or loss is ten percent or more of the greater, in absolute amount, of:
|
o
|
the combined reported profit of all operating segments that do not report a loss; and
|
o
|
the combined reported loss of all operating segments that report a loss.
|
·
|
Its assets are ten percent or more of the combined assets of all operating segments.
|
6.
|
Segment information (Continued)
|
6.
|
Segment information (Continued)
|
6.
|
Segment information (Continued)
|
June 30, 2015
|
||||||||||||||||||||||||||||
Shopping Center
|
Offices
and others
|
Sal es and developments
|
Hotels
|
International
|
Financial operations and others
|
Total Urban Properties and Investment
|
||||||||||||||||||||||
Revenues (i)
|
1,778,310 | 332,728 | 15,085 | 396,297 | 25,873 | 147 | 2,548,440 | |||||||||||||||||||||
Costs
|
(290,302 | ) | (33,431 | ) | (19,109 | ) | (277,885 | ) | (7,121 | ) | (55 | ) | (627,903 | ) | ||||||||||||||
Gross Profit / (Loss)
|
1,488,008 | 299,297 | (4,024 | ) | 118,412 | 18,752 | 92 | 1,920,537 | ||||||||||||||||||||
Gain from disposal of investment properties
|
- | - | 1,162,770 | - | - | - | 1,162,770 | |||||||||||||||||||||
General and administrative expenses
|
(136,151 | ) | (58,971 | ) | (49,690 | ) | (77,567 | ) | (55,746 | ) | - | (378,125 | ) | |||||||||||||||
Selling expenses
|
(112,825 | ) | (21,130 | ) | (9,146 | ) | (52,386 | ) | - | (379 | ) | (195,866 | ) | |||||||||||||||
Other operating results, net
|
(48,810 | ) | (117,610 | ) | 13,093 | (461 | ) | 184,886 | (2,419 | ) | 28,679 | |||||||||||||||||
Profit / (Loss) from operations
|
1,190,222 | 101,586 | 1,113,003 | (12,002 | ) | 147,892 | (2,706 | ) | 2,537,995 | |||||||||||||||||||
Share of (loss) / profit of associates and joint ventures
|
- | (2,570 | ) | 918 | 1,254 | (1,191,116 | ) | 156,478 | (1,035,036 | ) | ||||||||||||||||||
Segment Profit / (Loss)
|
1,190,222 | 99,016 | 1,113,921 | (10,748 | ) | (1,043,224 | ) | 153,772 | 1,502,959 | |||||||||||||||||||
Investment properties
|
2,300,044 | 939,002 | 338,614 | - | - | - | 3,577,660 | |||||||||||||||||||||
Property, plant and equipment
|
48,345 | 28,013 | 1,242 | 164,815 | 1,319 | - | 243,734 | |||||||||||||||||||||
Trading properties
|
- | - | 134,534 | - | - | - | 134,534 | |||||||||||||||||||||
Goodwill
|
6,804 | 3,911 | - | - | - | - | 10,715 | |||||||||||||||||||||
Right to receive future units under barter agreements
|
- | - | 90,486 | - | - | - | 90,486 | |||||||||||||||||||||
Inventories
|
15,711 | - | 497 | 6,926 | - | - | 23,134 | |||||||||||||||||||||
Investments in associates and joint ventures
|
- | 20,746 | 46,555 | - | 909,911 | 1,404,319 | 2,381,531 | |||||||||||||||||||||
Operating assets (ii)
|
2,370,904 | 991,672 | 611,928 | 171,741 | 911,230 | 1,404,319 | 6,461,794 |
(i)
|
From all of the Group’s revenues, Ps. 2,522 million is originated in Argentina and Ps. 26 million in United States.
|
(ii)
|
From all of the Group’s assets included in the segment, Ps. 5,445 million is located in Argentina and Ps. 1,017 million in other countries, principally in Israel for Ps. 907 and Uruguay for Ps. 106 million, respectively.
|
6.
|
Segment information (Continued)
|
June 30, 2014
|
||||||||||||||||||||||||||||
Shopping Center
|
Offices
and others
|
Sales and developments
|
Hotels
|
International
|
Financial operations and others
|
Total Urban Properties and Investment
|
||||||||||||||||||||||
Revenues (i)
|
1,383,008 | 271,159 | 85,531 | 331,562 | 83,926 | 574 | 2,155,760 | |||||||||||||||||||||
Costs
|
(293,278 | ) | (42,015 | ) | (33,498 | ) | (215,980 | ) | (53,510 | ) | (373 | ) | (638,654 | ) | ||||||||||||||
Gross Profit
|
1,089,730 | 229,144 | 52,033 | 115,582 | 30,416 | 201 | 1,517,106 | |||||||||||||||||||||
Gain from disposal of investment properties
|
- | - | 235,507 | - | - | - | 235,507 | |||||||||||||||||||||
General and administrative expenses
|
(101,538 | ) | (41,945 | ) | (37,466 | ) | (59,585 | ) | (59,476 | ) | (56 | ) | (300,066 | ) | ||||||||||||||
Selling expenses
|
(73,427 | ) | (20,751 | ) | (13,706 | ) | (42,335 | ) | - | 110 | (150,109 | ) | ||||||||||||||||
Other operating results, net
|
(46,568 | ) | (3,060 | ) | 8,137 | (2,680 | ) | (895 | ) | (2,856 | ) | (47,922 | ) | |||||||||||||||
Profit / (Loss) from operations
|
868,197 | 163,388 | 244,505 | 10,982 | (29,955 | ) | (2,601 | ) | 1,254,516 | |||||||||||||||||||
Share of (loss) / profit of associates and joint ventures
|
- | (899 | ) | 6,368 | 789 | (616,313 | ) | 169,916 | (440,139 | ) | ||||||||||||||||||
Segment Profit / (Loss)
|
868,197 | 162,489 | 250,873 | 11,771 | (646,268 | ) | 167,315 | 814,377 | ||||||||||||||||||||
Investment properties
|
2,253,372 | 783,683 | 369,793 | - | - | - | 3,406,848 | |||||||||||||||||||||
Property, plant and equipment
|
20,455 | 30,026 | 3,744 | 164,386 | 1,501 | - | 220,112 | |||||||||||||||||||||
Trading properties
|
- | - | 141,161 | - | - | - | 141,161 | |||||||||||||||||||||
Goodwill
|
1,667 | 9,392 | - | - | - | - | 11,059 | |||||||||||||||||||||
Right to receive future units under barter agreements
|
- | - | 85,077 | - | - | - | 85,077 | |||||||||||||||||||||
Assets classified as held for sale (iii)
|
- | - | - | - | 1,357,866 | - | 1,357,866 | |||||||||||||||||||||
Inventories
|
10,625 | - | 584 | 6,011 | - | - | 17,220 | |||||||||||||||||||||
Investments in associates and joint ventures
|
- | 23,208 | 38,289 | 22,129 | 628,658 | 1,255,012 | 1,967,296 | |||||||||||||||||||||
Operating assets (ii)
|
2,286,119 | 846,309 | 638,648 | 192,526 | 1,988,025 | 1,255,012 | 7,206,639 |
(ii)
|
From all of the Group´s assets included in the segment, Ps. 5,108 million is located in Argentina and Ps. 2,099 million in other countries, principally in United States for Ps. 1,392, Israel for Ps. 595 million, and Uruguay for Ps. 112 million respectively.
|
6.
|
Segment information (Continued)
|
June 30, 2013
|
||||||||||||||||||||||||||||
Shopping Center
|
Offices
and others
|
Sales and developments
|
Hotels
|
International
|
Financial operations and others
|
Total Urban Properties and Investment
|
||||||||||||||||||||||
Revenues (i)
|
1,103,044 | 217,171 | 141,996 | 225,836 | 38,998 | 1,203 | 1,728,248 | |||||||||||||||||||||
Costs
|
(241,057 | ) | (43,377 | ) | (106,399 | ) | (168,283 | ) | (31,587 | ) | (907 | ) | (591,610 | ) | ||||||||||||||
Gross Profit
|
861,987 | 173,794 | 35,597 | 57,553 | 7,411 | 296 | 1,136,638 | |||||||||||||||||||||
Gain from disposal of investment property
|
- | - | 183,767 | - | - | - | 183,767 | |||||||||||||||||||||
General and administrative expenses
|
(67,596 | ) | (34,984 | ) | (32,901 | ) | (49,883 | ) | (13,158 | ) | (250 | ) | (198,772 | ) | ||||||||||||||
Selling expenses
|
(58,908 | ) | (11,360 | ) | (16,455 | ) | (28,919 | ) | - | (1,588 | ) | (117,230 | ) | |||||||||||||||
Other operating results, net
|
(45,020 | ) | (247 | ) | 6,342 | (369 | ) | 135,082 | (3,363 | ) | 92,425 | |||||||||||||||||
Profit / (Loss) from operations
|
690,463 | 127,203 | 176,350 | (21,618 | ) | 129,335 | (4,905 | ) | 1,096,828 | |||||||||||||||||||
Share of (loss) / profit of associates and joint ventures
|
- | (2,514 | ) | 2,329 | 83 | (82,552 | ) | 62,574 | (20,080 | ) | ||||||||||||||||||
Segment Profit / (Loss)
|
690,463 | 124,689 | 178,679 | (21,535 | ) | 46,783 | 57,669 | 1,076,748 | ||||||||||||||||||||
Investment properties
|
2,224,008 | 799,644 | 376,691 | - | 744,587 | - | 4,144,930 | |||||||||||||||||||||
Property, plant and equipment
|
17,385 | 23,029 | 3,972 | 168,200 | 199 | - | 212,785 | |||||||||||||||||||||
Trading properties
|
- | - | 125,549 | - | - | - | 125,549 | |||||||||||||||||||||
Goodwill
|
1,667 | 9,392 | - | - | 51,069 | - | 62,128 | |||||||||||||||||||||
Right to receive future units under barter agreements
|
- | - | 93,225 | - | - | - | 93,225 | |||||||||||||||||||||
Inventories
|
10,002 | - | 463 | 5,962 | - | - | 16,427 | |||||||||||||||||||||
Investments in associates and joint ventures
|
- | 23,385 | 32,759 | 21,339 | 802 | 1,081,190 | 1,159,475 | |||||||||||||||||||||
Operating assets (ii)
|
2,253,062 | 855,450 | 632,659 | 195,501 | 796,657 | 1,081,190 | 5,814,519 |
(i)
|
From all of the Group’s revenues, Ps. 1,689 million is originated in Argentina and Ps. 39 million in United States.
|
(ii)
|
From all of the Group´s assets included in the segment, Ps. 4,937 million is located in Argentina and Ps. 877 million in other countries, principally in United States for Ps. 797 and Uruguay for Ps. 81 million, respectively.
|
June 30, 2015
|
||||||||||||||||||||
Total Segment Information
|
Adjustment for share of profit / (loss) of joint ventures
|
Expenses
and collective promotion funds
|
Adjustment to income for elimination between segment transactions
|
As per Statement
of income
|
||||||||||||||||
Income from sales, rents and services
|
2,548,440 | (27,532 | ) | - | (5,487 | ) | 2,515,421 | |||||||||||||
Income from expenses and collective promotion fund
|
- | - | 887,208 | - | 887,208 | |||||||||||||||
Costs
|
(627,903 | ) | 14,752 | (901,283 | ) | 3,860 | (1,510,574 | ) | ||||||||||||
Gross Profit / (Loss)
|
1,920,537 | (12,780 | ) | (14,075 | ) | (1,627 | ) | 1,892,055 | ||||||||||||
Gain from disposal of investment properties
|
1,162,770 | - | - | - | 1,162,770 | |||||||||||||||
General and administrative expenses
|
(378,125 | ) | 1,042 | - | 2,602 | (374,481 | ) | |||||||||||||
Selling expenses
|
(195,866 | ) | 2,075 | - | 321 | (193,470 | ) | |||||||||||||
Other operating results, net
|
28,679 | 1,105 | - | (1,296 | ) | 28,488 | ||||||||||||||
Profit / (Loss) from operations
|
2,537,995 | (8,558 | ) | (14,075 | ) | - | 2,515,362 | |||||||||||||
Share of (loss) / profit of associates and join ventures
|
(1,035,036 | ) | 12,175 | - | - | (1,022,861 | ) | |||||||||||||
Segment Profit / (Loss) Before Financing and Taxation
|
1,502,959 | 3,617 | (14,075 | ) | - | 1,492,501 |
June 30, 2014
|
||||||||||||||||||||
Total Segment Information
|
Adjustment for share of profit / (loss) of joint ventures
|
Expenses
and collective promotion funds
|
Adjustment to income for elimination between segment transactions
|
As per Statement of income
|
||||||||||||||||
Income from sales, rents and services
|
2,155,760 | (40,636 | ) | - | (6,250 | ) | 2,108,874 | |||||||||||||
Income from expenses and collective promotion fund
|
- | - | 736,302 | - | 736,302 | |||||||||||||||
Costs
|
(638,654 | ) | 23,183 | (743,703 | ) | 4,681 | (1,354,493 | ) | ||||||||||||
Gross Profit / (Loss)
|
1,517,106 | (17,453 | ) | (7,401 | ) | (1,569 | ) | 1,490,683 | ||||||||||||
Gain from disposal of investment properties
|
235,507 | - | - | - | 235,507 | |||||||||||||||
General and administrative expenses
|
(300,066 | ) | 804 | - | 2,334 | (296,928 | ) | |||||||||||||
Selling expenses
|
(150,109 | ) | 3,507 | - | 366 | (146,236 | ) | |||||||||||||
Other operating results, net
|
(47,922 | ) | 3,183 | - | (1,131 | ) | (45,870 | ) | ||||||||||||
Profit / (Loss) from operations
|
1,254,516 | (9,959 | ) | (7,401 | ) | - | 1,237,156 | |||||||||||||
Share of (loss) / profit of associates and join ventures
|
(440,139 | ) | 26,368 | - | - | (413,771 | ) | |||||||||||||
Segment Profit / (Loss) Before Financing and Taxation
|
814,377 | 16,409 | (7,401 | ) | - | 823,385 |
June 30, 2013
|
||||||||||||||||||||
Total Segment Information
|
Adjustment for share of profit / (loss) of joint ventures
|
Expenses
and collective promotion funds
|
Adjustment to income for elimination between segment transactions
|
As per Statement of income
|
||||||||||||||||
Income from sales, rents and services
|
1,728,248 | (131,459 | ) | - | (3,899 | ) | 1,592,890 | |||||||||||||
Income from expenses and collective promotion fund
|
- | - | 594,290 | - | 594,290 | |||||||||||||||
Costs
|
(591,610 | ) | 101,112 | (599,780 | ) | 2,667 | (1,087,611 | ) | ||||||||||||
Gross profit / (Loss)
|
1,136,638 | (30,347 | ) | (5,490 | ) | (1,232 | ) | 1,099,569 | ||||||||||||
Gain from disposal of investment properties
|
183,767 | - | - | - | 183,767 | |||||||||||||||
General and administrative expenses
|
(198,772 | ) | 2,157 | - | 1,774 | (194,841 | ) | |||||||||||||
Selling expenses
|
(117,230 | ) | 10,993 | - | 112 | (106,125 | ) | |||||||||||||
Other operating results, net
|
92,425 | 1,497 | - | (654 | ) | 93,268 | ||||||||||||||
Profit / (Loss) from operations
|
1,096,828 | (15,700 | ) | (5,490 | ) | - | 1,075,638 | |||||||||||||
Share of (loss) / profit of associates
|
(20,080 | ) | 12,689 | - | - | (7,391 | ) | |||||||||||||
Segment Profit / (Loss) Before financing and Taxation
|
1,076,748 | (3,011 | ) | (5,490 | ) | - | 1,068,247 |
June 30,
2015
|
June 30,
2014
|
June 30,
2013
|
||||||||||
Total Assets per segment based on segment information
|
6,461,794 | 7,206,639 | 5,814,519 | |||||||||
Minus:
|
||||||||||||
Proportionate share in assets per segment of joint ventures (2)
|
(96,911 | ) | (148,752 | ) | (186,513 | ) | ||||||
Plus:
|
||||||||||||
Investment in joint ventures (1)
|
169,415 | 293,509 | 264,461 | |||||||||
Other non-reportable assets
|
3,095,075 | 2,458,710 | 2,434,062 | |||||||||
Total Consolidated Assets as per Statement of financial position
|
9,629,373 | 9,810,106 | 8,326,529 |
(1)
|
Represents the proportionate equity value of joint ventures that were proportionately consolidated for information by segment purposes.
|
(2)
|
of the following amounts related to the proportionate share iof operating segment assets of the joint ventures, namely, Nuevo Puerto Santa Fe S.A., Quality Invest S.A., Baicom S.A., Cyrsa S.A. and Puerto Retiro S.A. are reported as part of total operating segment assets by segment:
|
June 30,
2015
|
June 30,
2014
|
June 30,
2013
|
||||||||||
Investment properties
|
87,583 | 137,253 | 161,664 | |||||||||
Property, plant and equipment
|
600 | 99 | 112 | |||||||||
Trading properties
|
3,130 | 5,908 | 19,396 | |||||||||
Goodwill
|
5,234 | 5,235 | 5,235 | |||||||||
Inventories
|
364 | 257 | 106 | |||||||||
Total proportionate share in assets per segment of joint ventures
|
96,911 | 148,752 | 186,513 |
7.
|
Information about subsidiaries
|
7.
|
Information about subsidiaries (Continued)
|
Equity attributable to non-controlling interest
(in million)
|
||||||||
Subsidiary
|
June 30, 2015
|
June 30, 2014
|
||||||
Rigby 183 LLC
|
4.7 | 120.1 | ||||||
Panamerican Mall S.A.
|
128.9 | 148.4 | ||||||
Dolphin
|
(7.0 | ) | 96.9 | |||||
Real Estate Strategies LLC
|
119.8 | 80.0 |
7.
|
Information about subsidiaries (Continued)
|
RES
|
PAMSA
|
RIGBY
|
Dolphin Fund Ltd.
|
|||||||||||||||||||||||||||||
June 30,
2015
|
June 30,
2014
|
June 30,
2015
|
June 30,
2014
|
June 30,
2015
|
June 30,
2014
|
June 30,
2015
|
June 30,
2014
|
|||||||||||||||||||||||||
ASSETS
|
||||||||||||||||||||||||||||||||
Total non-current assets
|
356,005 | 234,926 | 517,465 | 474,207 | - | - | 1,107,066 | 595,991 | ||||||||||||||||||||||||
Total current assets
|
29,874 | 12,301 | 487,921 | 361,857 | 18,921 | 1,288,300 | 329,563 | 448,539 | ||||||||||||||||||||||||
TOTAL ASSETS
|
385,879 | 247,227 | 1,005,386 | 836,064 | 18,921 | 1,288,300 | 1,436,629 | 1,044,530 | ||||||||||||||||||||||||
LIABILITIES
|
||||||||||||||||||||||||||||||||
Total non-current liabilities
|
13,771 | - | 20,791 | 17,895 | - | - | 265,056 | 320,847 | ||||||||||||||||||||||||
Total current liabilities
|
11,263 | 5,551 | 310,407 | 76,329 | 399 | 817,275 | 284,853 | 187,825 | ||||||||||||||||||||||||
TOTAL LIABILITIES
|
25,034 | 5,551 | 331,198 | 94,224 | 399 | 817,275 | 549,909 | 508,672 | ||||||||||||||||||||||||
NET ASSETS
|
360,845 | 241,676 | 674,188 | 741,840 | 18,522 | 471,025 | 886,720 | 535,858 |
RES
|
PAMSA
|
RIGBY
|
Dolphin Fund Ltd.
|
|||||||||||||||||||||||||||||
June 30,
2015
|
June 30,
2014
|
June 30,
2015
|
June 30,
2014
|
June 30,
2015
|
June 30,
2014
|
June 30,
2015
|
June 30,
2014
|
|||||||||||||||||||||||||
Revenues
|
- | - | 333,292 | 262,273 | 28,131 | 90,820 | - | - | ||||||||||||||||||||||||
Profit / (Loss) before income tax
|
123,730 | 84,240 | 225,004 | 168,211 | 397,496 | (12,264 | ) | (998,862 | ) | (802,155 | ) | |||||||||||||||||||||
Income tax expense
|
(4,778 | ) | (3,940 | ) | (78,794 | ) | (58,888 | ) | - | - | - | - | ||||||||||||||||||||
Profit / (Loss) for the year
|
118,952 | 80,300 | 146,210 | 109,323 | 397,496 | (12,264 | ) | (998,862 | ) | (802,155 | ) | |||||||||||||||||||||
Other comprehensive income
|
216 | - | - | - | (185,971 | ) | 160,112 | 19,487 | 271,213 | |||||||||||||||||||||||
Total comprehensive income / (loss) for the year
|
119,168 | 80,300 | 146,210 | 109,323 | 211,525 | 147,848 | (979,375 | ) | (530,942 | ) | ||||||||||||||||||||||
Profit / (Loss) attributable to non-controlling interest
|
39,506 | 26,672 | 29,242 | 21,865 | 108,931 | 40,877 | (101,500 | ) | (80,237 | ) | ||||||||||||||||||||||
Dividends paid to non-controlling interest
|
- | - | 42,772 | - | - | - | - | - | ||||||||||||||||||||||||
Capital distribution of non-controlling interest
|
- | - | - | - | 224,319 | - | - | - |
7.
|
Information about subsidiaries (Continued)
|
RES
|
PAMSA
|
RIGBY
|
||||||||||||||||||||||
June 30,
2015
|
June 30,
2014
|
June 30,
2015
|
June 30,
2014
|
June 30,
2015
|
June 30,
2014
|
|||||||||||||||||||
Net cash (used in) generated from operating activities:
|
(681 | ) | (9,360 | ) | 119,826 | (23,749 | ) | 164 | 19,352 | |||||||||||||||
Net cash generated from (used in) investing activities
|
- | 5,206 | (154,008 | ) | 60,871 | 1,538,344 | (9,810 | ) | ||||||||||||||||
Net cash (used in) generated from financing activities:
|
- | - | (116 | ) | (4,301 | ) | (1,537,472 | ) | (17,760 | ) | ||||||||||||||
Net increase / (decrease) in cash and cash equivalents
|
(681 | ) | (4,154 | ) | (34,298 | ) | 32,821 | 1,036 | (8,218 | ) | ||||||||||||||
Foreign exchange gain on cash and cash equivalents
|
21 | 6 | 44,387 | 150 | 941 | 4,247 | ||||||||||||||||||
Cash and cash equivalents at the beginning of the year
|
695 | 4,842 | 464 | 11,416 | 7,519 | 11,490 | ||||||||||||||||||
Cash and cash equivalents at end of year
|
35 | 694 | 10,553 | 44,387 | 9,496 | 7,519 |
8.
|
Interests in joint ventures
|
8.
|
Interests in joint ventures (Continued)
|
Value of Group's interest in equity | Group's interest in comprehensive income | % ownership interest held | |||||||||||||||||||||||||||||||||||||||||||||||||
June 30, | June 30, | June 30, | Last financial statements issued | ||||||||||||||||||||||||||||||||||||||||||||||||
Name of the entity | Place of business / country of incorporation | Main activity | Nature of the relationship | Common shares 1 vote | 2015 | 2014 | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 | Common stock (nominal value) | Profit (loss) for the year | Shareholders' Equity | ||||||||||||||||||||||||||||||||||||
Quality Invest S.A. (1)
|
Argentina
|
Real estate
|
(2)
|
70,314,342 | 74,485 | 65,927 | 2,055 | 1,181 | (3,056 | ) | 50 | % | 50 | % | 50 | % | 140,629 | 4,129 | 146,932 | ||||||||||||||||||||||||||||||||
Nuevo Puerto Santa Fe S.A.
|
Argentina
|
Real estate
|
(3)
|
138,750 | 28,803 | 26,870 | 4,559 | 4,874 | 2,729 | 50 | % | 50 | % | 50 | % | 27,750 | 9,468 | 47,351 | |||||||||||||||||||||||||||||||||
Canteras Natal Crespo S.A.
|
Argentina
|
Real estate
|
(4)
|
- | - | - | - | - | (870 | ) | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
Cyrsa S.A. (1)
|
Argentina
|
Real estate
|
(5)
|
119,608,531 | 17,532 | 152,229 | 7,152 | 22,602 | 15,898 | 50 | % | 50 | % | 50 | % | 239,217 | 14,306 | 35,064 | |||||||||||||||||||||||||||||||||
Puerto Retiro S.A. (1)
|
Argentina
|
Real estate
|
(6)
|
23,067,250 | 45,745 | 44,858 | (881 | ) | (1,828 | ) | (1,434 | ) | 50 | % | 50 | % | 50 | % | 46,135 | (1,763 | ) | 33,073 | |||||||||||||||||||||||||||||
Baicom Networks S.A.
|
Argentina
|
Real estate
|
(7)
|
4,701,455 | 2,850 | 3,566 | (714 | ) | (475 | ) | (580 | ) | 50 | % | 50 | % | 50 | % | 9,403 | (1,431 | ) | 5,148 | |||||||||||||||||||||||||||||
Entertainment Holdings S.A.
|
Argentina
|
Investment
|
(8)
|
22,395,574 | 20,736 | 23,267 | (2,632 | ) | (838 | ) | (2,514 | ) | 50 | % | 50 | % | 50 | % | 44,791 | 1,187 | 41,348 | ||||||||||||||||||||||||||||||
Entertainment Universal S.A.
|
Argentina
|
Event organization
and others
|
(9)
|
300 | 10 | (59 | ) | 69 | (47 | ) | - | 50 | % | 50 | % | - | 12 | 2,457 | 764 | ||||||||||||||||||||||||||||||||
190,161 | 316,658 | 9,608 | 25,469 | 10,173 |
(1)
|
Considered material to the Group.
|
(2)
|
Quality Invest S.A. (“Quality”) is a joint venture between the Group and Efesul S.A., and is a company engaged in the operation of the San Martín premises (formerly owned by Nobleza Piccardo S.A.I.C. y F.).
|
(3)
|
Nuevo Puerto Santa Fe S.A. (“NPSF”) is a joint venture between the Group and Grainco S.A., an Argentinian company. The Investment consists of the right to use and operate a shopping center in the province of Santa Fe (“La Ribera Shopping”). (Note 3).
|
(4)
|
On June 28, 2013 IRSA sold, assigned and transferred to Euromayor S.A. de Inversiones the 100% of its interest in Canteras Natal Crespo S.A. This represents the 50% of Canteras Natal Crespo S.A.’s share capital (See Note 3).
|
(5)
|
Cyrsa S.A. (“Cyrsa”) is a joint venture between the Group and Cyrela Brazil Realty S.A. Emprendimentos e Participaçoes, Brazilian corporation, engaged in developing a residential apartment complex known as "Horizons" in the Northern part of Greater Buenos Aires.
|
(6)
|
Puerto Retiro S.A. ("Puerto Retiro") is a joint venture between the Group and Havord Corporation N.V. Puerto Retiro owns a land reserve.
|
(7)
|
Baicom Networks S.A. (“Baicom”) is a joint venture between the Group and Hector Masoero, Octopus S.A. and Rafael Garfunkel. Baicom owns a land reserve.
|
(8)
|
Entertainment Holdings S.A. is a joint venture which principal assets is an indirect interest of 25% in La Rural S.A. (“LRSA”), engaged in the operation of the exhibition grounds in Buenos Aires. See Note 3.
|
(9)
|
Entretenimiento Universal S.A. is a company engaged in event organization, shows and food services. See Note 3.
|
8.
|
Interests in joint ventures (Continued)
|
June 30,
2015
|
June 30,
2014
|
|||||||
Beginning of the year
|
316,658 | 287,846 | ||||||
Capital contribution
|
8,369 | 3,343 | ||||||
Cash dividends (ii)
|
(33,614 | ) | - | |||||
Share of profit
|
9,608 | 25,469 | ||||||
Capital reduction (iii)
|
(110,860 | ) | - | |||||
End of the year
|
190,161 |
(i) 316,658
|
8.
|
Interests in joint ventures (Continued)
|
8.
|
Interests in joint ventures (Continued)
|
8.
|
Interests in joint ventures (Continued)
|
8.
|
Interests in joint ventures (Continued)
|
June 30, 2015
|
||||||||||||
Cyrsa S.A.
|
Puerto
Retiro S.A.
|
Quality
Invest S.A.
|
||||||||||
Assets
|
||||||||||||
Total non-current assets
|
42,512 | 45,941 | 150,042 | |||||||||
Current
|
||||||||||||
Cash and cash equivalents
|
4,506 | - | 1 | |||||||||
Other current assets
|
12,941 | 597 | 4,476 | |||||||||
Total current assets
|
17,447 | 597 | 4,477 | |||||||||
Total assets
|
59,959 | 46,538 | 154,519 | |||||||||
Liabilities
|
||||||||||||
Non-current
|
||||||||||||
Financial liabilities (i)
|
1,104 | 9,133 | 1,195 | |||||||||
Other liabilities
|
- | 126 | 368 | |||||||||
Total non-current liabilities
|
1,104 | 9,259 | 1,563 | |||||||||
Current
|
||||||||||||
Financial liabilities (i)
|
1,529 | 3,823 | 2,045 | |||||||||
Other liabilities
|
22,262 | 383 | 3,978 | |||||||||
Total current liabilities
|
23,791 | 4,206 | 6,023 | |||||||||
Total liabilities
|
24,895 | 13,465 | 7,586 | |||||||||
Net assets
|
35,064 | 33,073 | 146,933 |
June 30, 2014
|
||||||||||||
Cyrsa S.A.
|
Puerto
Retiro S.A.
|
Quality
Invest S.A.
|
||||||||||
Assets
|
||||||||||||
Total non-current assets
|
286,950 | 45,484 | 132,806 | |||||||||
Current
|
||||||||||||
Cash and cash equivalents
|
4,144 | - | 1,572 | |||||||||
Other current assets
|
44,814 | 199 | 902 | |||||||||
Total current assets
|
48,958 | 199 | 2,474 | |||||||||
Total assets
|
335,908 | 45,683 | 135,280 | |||||||||
Liabilities
|
||||||||||||
Non-current
|
||||||||||||
Financial liabilities (i)
|
- | 9,006 | 1,378 | |||||||||
Other liabilities
|
- | 78 | 299 | |||||||||
Total non-current liabilities
|
- | 9,084 | 1,677 | |||||||||
Current
|
||||||||||||
Financial liabilities (i)
|
8,733 | 4,639 | 63 | |||||||||
Other liabilities
|
22,716 | 662 | 3,737 | |||||||||
Total current liabilities
|
31,449 | 5,301 | 3,800 | |||||||||
Total liabilities
|
31,449 | 14,385 | 5,477 | |||||||||
Net assets
|
304,459 | 31,298 | 129,803 |
8.
|
Interests in joint ventures (Continued)
|
Cyrsa S.A.
|
Puerto Retiro S.A.
|
Quality Invest S.A.
|
||||||||||||||||||||||
June 30,
2015
|
June 30,
2014
|
June 30,
2015
|
June 30,
2014
|
June 30,
2015
|
June 30,
2014
|
|||||||||||||||||||
Revenues
|
10,806 | 46,185 | 2,199 | 52 | 15,920 | 16,476 | ||||||||||||||||||
Interest income
|
25,052 | 66,290 | 63 | 134 | 283 | 178 | ||||||||||||||||||
Income tax expense
|
(9,829 | ) | (25,275 | ) | (34 | ) | (187 | ) | 182 | 1,796 | ||||||||||||||
Profit / (Loss) for the year
|
14,306 | 45,206 | (1,763 | ) | (3,657 | ) | 4,129 | 2,383 | ||||||||||||||||
Dividends received
|
30,990 | - | - | - | - | - |
Cyrsa S.A.
|
Puerto Retiro S.A.
|
Quality S.A.
|
||||||||||||||||||||||
June 30,
2015
|
June 30,
2014
|
June 30,
2015
|
June 30,
2014
|
June 30,
2015
|
June 30,
2014
|
|||||||||||||||||||
Net assets at beginning of the year
|
304,459 | 259,253 | 31,298 | 31,393 | 129,803 | 126,420 | ||||||||||||||||||
Profit / (Loss) for the year
|
14,306 | 45,206 | (1,763 | ) | (3,657 | ) | 4,129 | 2,383 | ||||||||||||||||
Capital reduction
|
(221,721 | ) | - | - | - | - | - | |||||||||||||||||
Release of reserves
|
(15,335 | ) | - | - | - | - | - | |||||||||||||||||
Dividends distribution
|
(46,645 | ) | - | - | - | - | - | |||||||||||||||||
Loss absorption
|
- | - | 3,538 | - | - | - | ||||||||||||||||||
Irrevocable contributions
|
- | - | - | 3,562 | 13,001 | 1,000 | ||||||||||||||||||
Net assets at end of the year
|
35,064 | 304,459 | 33,073 | 31,298 | 146,933 | 129,803 | ||||||||||||||||||
Interest held
|
50.00 | % | 50.00 | % | 50.00 | % | 50.00 | % | 50.00 | % | 50.00 | % | ||||||||||||
Interest in joint ventures
|
17,532 | 152,229 | 16,537 | 15,649 | 73,467 | 64,902 | ||||||||||||||||||
Higher value
|
- | - | 29,209 | 29,209 | 1,231 | 1,025 | ||||||||||||||||||
Book amount at end of the year
|
17,532 | 152,229 | 45,746 | 44,858 | 74,698 | 65,927 |
9.
|
Interests in associates
|
9.
|
Interests in associates (Continued)
|
Value of the Group's interest in equity | Group's interest in Comprehensive Income | % ownership interest held | |||||||||||||||||||||||||||||||||||||||||||||||||
June 30, | June 30, | June 30, | Last financial statements issued | ||||||||||||||||||||||||||||||||||||||||||||||||
Name of the entity | Place of business / country of incorporation | Main activity | Nature of the relationship | Common shares 1 vote | 2015 | 2014 | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 | Common stock (nominal value) | Net income fot the year | Shareholders' Equity | ||||||||||||||||||||||||||||||||||||
Tarshop
|
Argentina
|
Consumer financing
|
(1)
|
26,759,288 | 32,267 | 18,681 | (8,430 | ) | (16,300 | ) | 2,649 | 20 | % | 20 | % | 20 | % | 243,796 | (*) (46,377 | ) | 181,271 | ||||||||||||||||||||||||||||||
New Lipstick LLC
|
United States
|
Real estate
|
(2)
|
N/A | (344,627 | ) | (176,923 | ) | (169,226 | ) | (154,499 | ) | (88,706 | ) | 49.73 | % | 49.80 | % | 49.87 | % | N/A | (33,111 | ) | (105,449 | ) | ||||||||||||||||||||||||||
Rigby
|
United States
|
Real estate
|
(3)
|
N/A | - | - | - | - | 4,414 | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
Lipstick Management LLC
|
United States
|
Management company
|
(4)
|
N/A | 2,827 | 1,739 | 1,020 | 900 | 447 | 49 | % | 49 | % | 49 | % | N/A | (*) 188 | (*) 630 | |||||||||||||||||||||||||||||||||
BHSA
|
Argentina
|
Financial
|
(5)
|
446,515,208 | 1,356,237 | 1,211,625 | 143,293 | 184,449 | 58,721 | 29.99 | % | 29.77 | % | 29.77 | % | 1,500,000 | 465,157 | 4,397,569 | |||||||||||||||||||||||||||||||||
Manibil S.A.
|
Argentina
|
Real estate
|
(6)
|
30,397,880 | 46,556 | 38,289 | 918 | 6,369 | 2,329 | 49 | % | 49 | % | 49 | % | 77,037 | 1,871 | 94,992 | |||||||||||||||||||||||||||||||||
Banco de Crédito & Securitización S.A.
|
Argentina
|
Financial
|
(7)
|
3,984,375 | 15,814 | 13,610 | 2,205 | 3,709 | 1,198 | 6.38 | % | 6.38 | % | 6.38 | % | 62,500 | 34,587 | 248,070 | |||||||||||||||||||||||||||||||||
Bitania 26 S.A.
|
Argentina
|
Real estate
|
(8)
|
- | - | 22,129 | 1,254 | 789 | 84 | - | 49 | % | 49 | % | - | - | - | ||||||||||||||||||||||||||||||||||
Avenida Inc.
|
United States
|
Investment
|
(9)
|
- | - | 11,096 | 19,388 | (1,944 | ) | - | - | 24.79 | % | - | - | - | - | ||||||||||||||||||||||||||||||||||
IDB Development Corporation Ltd.
|
Israel
|
Investment
|
(10)
|
324,445,664 | 907,084 | 595,342 | (918,336 | ) | (507,363 | ) | - | 49.00 | % | 26.65 | % | - | N/A | N/A | N/A | ||||||||||||||||||||||||||||||||
Condor
|
United States
|
Hotel
|
(11)
|
1,261,723 | (18,304 | ) | 31,577 | (49,881 | ) | 15,517 | - | 26.91 | % | 26.91 | % | - | - | - | - | ||||||||||||||||||||||||||||||||
1,997,854 | 1,767,165 | (977,825 | ) | (468,373 | ) | (18,864 | ) |
(1)
|
Tarshop is primarily engaged in credit card and loan origination activities.
|
(2)
|
New Lipstick LLC (“New Lipstick”) net equity comprises a rental office building in New York City known as the “Lipstick Building” with related debt.
|
(3)
|
Rigby owns a rental office building located at 183 Madison Avenue, New York, NY. Since December 31, 2012, Rigby began to be reported in a consolidated basis and ceased to be an associate. The building was sold in September 2014, having no remaining interest as of June 30, 2015. See Note 42.
|
(4)
|
Lipstick Management LLC is engaged in managing the Lipstick Building, an office building for rent located in New York City.
|
(5)
|
BHSA is a full-service commercial bank offering a wide variety of banking activities and related financial services to individuals, small- and medium-sized companies and large corporations. Share market value is Ps. 5.70.
|
(6)
|
Manibil S.A. is engaged in the development and sale of real estate investment projects in the City of Buenos Aires and its surrounding areas.
|
(7)
|
Banco de Crédito & Securitización S.A. (“BACS”) is a second-tier commercial bank established in 2000 in order to foster asset securitization. The bank also offers products, such as, export financing and pre-financing and purchase of mortgage-backed and personal assets. Its product and service offering is mainly distributed through a network of financial entities. BACS is controlled by BHSA. In addition, the Group directly holds an additional 6.38% interest.
|
(8)
|
The main asset of Bitania 26 S.A. (“Bitania”) is a hotel located in the City of Rosario known as Esplendor Savoy Rosario. As of June 30, 2015, the Group no longer has interest in the company.
|
(9)
|
Avenida Inc. is principally engaged in investing activities. As of June 30, 2015, holds 100% of Avenida Compras S.A., a Company engaged in e-commerce activity. As of June 30, 2015, the Group no longer has significant influence in the company (see Note 3.1).
|
(10)
|
The Group acquired IDB on May 7, 2014. IDBD is one of the Israeli biggest and most diversified investment groups. The Group has valued its interest in IDBD at fair value through profit or loss, according to an exception of IAS 28. See Notes 2.3 (d) and 3 for further information. Since interest in IDBD is valued at fair value, participation in financial statements and other comprehensive income statement of IDBD is not shown in the table above. Share market value is 1.957 NIS.
|
(11)
|
Condor is an investment Company engaged in hotels in United States (see Note 3.1).
|
June 30,
2015
|
June 30,
2014
|
|||||||
Beginning of the year
|
1,767,165 | 1,096,999 | ||||||
Acquisition / Increase in equity interest in associates (see Note 3)
|
1,254,306 | 1,131,806 | ||||||
Capital contributions
|
30,938 | 16,716 | ||||||
Share in (losses) / profit
|
(31,469 | ) | 77,721 | |||||
Currency translation adjustment
|
54,644 | (29,133 | ) | |||||
Cash dividends (ii)
|
(12,873 | ) | (9,983 | ) | ||||
Sale of equity interest (see Note 3)
|
(33,768 | ) | - | |||||
Reclassification to financial instruments (see Note 3)
|
(30,089 | ) | - | |||||
Unrealized loss on investments at fair value
|
(1,001,000 | ) | (516,961 | ) | ||||
End of the year (i)
|
1,997,854 | 1,767,165 |
9.
|
Interests in associates (Continued)
|
9.
|
Interests in associates (Continued)
|
(i)
|
Appointment of Eduardo Sergio Elsztain as single chairman of IDBD’s Board of Directors;
|
(ii)
|
Dolphin’s commitment (directly or through any vehicle controlled by Eduardo Sergio Elsztain) to accelerate its obligation to exercise the Series 4 warrants for NIS 150 million, and thus IDBD will have the possibility to require their exercise since May 20, 2015 instead of on July 19, 2015, provided that before May 20, 2015, (later it was clarified that this date would be no later than June 2, 2015), IDBD receives a written irrevocable commitment from the representatives of the bondholders to the effect that until July 20, 2015 they will not call a bondholders meeting (unless they are required to do so under the applicable laws) that includes in its agenda any of the following items:
|
(a)
|
Appointment of advisers (financial, legal or otherwise);
|
(b)
|
Appointment of a committee representing IDBD’s bondholders (as defined below);
|
(c)
|
File legal actions against IDBD; and
|
(d)
|
Request of an early or immediate payment of any indebtedness of IDBD.
|
(iii)
|
IDBD’s Board of Directors should set up a committee composed of two members of IDBD’s monitoring committee and two members of IDBD’s board appointed by Dolphin, which shall have the following duties, subject to the applicable law (later it was clarified that such committee shall not have the authority to make any decisions but rather only to make recommendations to the Board of Directors:
|
(a)
|
Manage, discuss, negotiate and conclude negotiations with the representatives of IDBD’s bondholders regarding their requests;
|
(b)
|
Negotiate with IDBD’s financial creditors a new set of covenants for IDBD’s financial indebtedness; and
|
(c)
|
Devise a business and financial plan for IDBD.
|
(iv)
|
Dolphin (directly or through any vehicle controlled by Eduardo Sergio Elsztain), promises to submit offers to purchase IDBD in the public phase of the public offering at an amount of up to NIS 100 million at a price per share which is no less than the opening price in the public phase of the public offering, and subject to the following conditions, inter alia:
|
(a)
|
That IDBD makes a public offering of its shares under terms acceptable to the market and approved by IDBD’s Board of Directors, for an amount of at least NIS 100 million and not to exceed NIS 125 million, and that the offering is made between October 1, 2015 and November 15, 2015.
|
9.
|
Interests in associates (Continued)
|
(b)
|
The commitment assumed by Dolphin would automatically expire upon the occurrence of any of the following events before the day of the public auction under the public offering: (i) if any of IDBD’s creditors or any of the representatives of IDBD’s bondholders files legal actions against IDBD, including a request for early or immediate repayment or acceleration of any portion of IDBD’s debt; (ii) if a meeting of any of IDBD’s bondholders is called including in its agenda any of the matters set forth in paragraph (ii); (iii) if IDBD receives capital contributions for a total amount of NIS 100 million in any manner, whether through a rights offering, the exercise of warrants, a private or public placement, and if such contributions are made by Dolphin directly or through any vehicle controlled by Eduardo Sergio Elsztain (apart from the capital contributions creditable against the remaining NIS 8.5 million obligation under Dolphin’s irrevocable proposal dated December 29, 2014), or by any other individual or legal entity, or the investor public, and at any event when the aggregate amount of such capital contributions under paragraph 5 (d) (iii) of the proposal so submitted is lower than NIS 100 million, Dolphin’s commitment under Section (iv. a) above would be reduced accordingly; or (iv) if a material adverse event or change occurs in IDBD or its control structure or in any of its material affiliates.
|
-
|
Replacement of the obligation to make Tender Offers in the market for a total of NIS 512 million prsuant to the Arrangement for Dolphin’s obligation to inject in IDBD NIS 512 million in two installments of NIS 256 million against the issuance of Bonds by the company.
|
-
|
The NIS 512 million injected by Dolphin would be against IDBD Bonds for a principal amount of 512 million.
|
-
|
Following the first injection of NIS 256 million, the shares currently pledged in favor of ETH would be assigned to Dolphin, plus 2.1 million additional shares in IDBD owned by ETH.
|
9.
|
Interests in associates (Continued)
|
-
|
After completion of the injection of NIS 512 million, all the shares to be acquired under the Tender Offer would be assigned to Dolphin. In addition, Dolphin would buy all shares and warrants of all remaining series of IDBD for a total amount of NIS 30 million and would inject NIS 20 million in IDBD against the issuance of Bonds for a principal amount of NIS 20 million in favor of the holders of the shares and warrants so purchased.
|
-
|
The bonds to be purchased by Dolphin would have the following features (the “Bonds”):
|
·
|
The principal amount would be repayable in six annual, equal installments, on December 15, 2022 through 2027.
|
·
|
They would have a dividend coupon attached, accruing interest at 4% per annum, payable on a yearly basis.
|
·
|
They would be indexed (principal amount and interest) according to the Israeli Price Index.
|
·
|
They would not be secured by any collateral and would not have any preference over IDBD’s existing bonds.
|
-
|
ETH would be able to participate on a joint and several basis in 50% of this Tender Offer Alternative Proposal.
|
-
|
DIC’s Warrants would be divided into 4 series, and the exercise price of each of such series would be approximately NIS 125 million, as follows:
|
·
|
The first series of warrants would be exercisable until December 21, 2015, for a price to be determined based on acceptable market conditions and after consultation with capital market experts, but in no case for a higher price than NIS 6.53 (“DIC’s 1 Warrants”).
|
·
|
The second series of warrants would be exercisable until December 21, 2016, for an exercise price equivalent to 110% of DIC’s 1 Warrants’ exercise price.
|
9.
|
Interests in associates (Continued)
|
·
|
The third series of warrants would be exercisable until December 21, 2017, for an exercise price of: (i) 110% of DIC’s 1 Warrants’ exercise price, in the event they are exercised before December 21, 2016; or (ii) 120% of DIC’s 1 Warrants’ exercise price if they are exercised between December 21, 2016 and December 21, 2017.
|
·
|
The fourth series of warrants would be exercisable until December 21, 2018, for an exercise price of: (i) 110% of DIC’s 1 Warrants’ exercise price, in the event they are exercised before December 21, 2016; or (ii) 130% of DIC’s 1 Warrants’ exercise price if they are exercised between December 21, 2016 and December 21, 2018.
|
-
|
As part of DIC’s Rights Offering, IDBD would promise to exercise all DIC’s 1 Warrants issued in favor of IDBD, for a total amount of approximately NIS 92.5 million (“IDBD’s Investment Amount”) by December 21, 2015, provided that the following conditions have been satisfied as of such date:
|
·
|
IDBD should have the written consent of IDBD’s main lenders for IDBD to exercise DIC’s 1 Warrants issued in its favor under DIC’s Rights Offering.
|
·
|
IDBD should have conducted and completed a Rights Public Offering (as such term is defined below), under which it should have raised an amount of at least NIS 200 million.
|
·
|
IDBD should have received the written consent of its main lenders in order for any amount injected as capital in IDBD after the date of such proposal in excess of NIS 100 million and up to NIS 350 million, to be used at any time for injection from IDBD into DIC, through any capital injection method.
|
·
|
IDBD´s obligation expires upon the occurrence of any of the events which result in the expiration of Dolphin´s commitment pursuant to the proposal (as described below) or in case of a material adverse event or change occurs in IDBD or its control structure or in any of its material affiliates.
|
-
|
IDBD’s public offering amount under Dolphin’s proposal dated May 6 would be increased by at least NIS 100 million and up to NIS 125 million (the “Rights Public Offering under the Proposal to IDBD and DIC”). In other words, the total amount would be increased from a minimum of NIS 100 million to a minimum of NIS 200 million, and the maximum amount would be increased from a maximum of NIS 125 million to a maximum of NIS 250 million (the “Total Increased Amount”).
|
-
|
Therefore, Dolphin’s obligation to participate in the Rights Public Offering under the Proposal to IDBD and DIC would be increased (compared to the proposal dated May 6, 2015) by an amount equal to the difference between the Total Increased Amount and the total amount of commitments received, always provided that such amount were not higher than NIS 200 million (the “Capital Contribution Amount”).
|
9.
|
Interests in associates (Continued)
|
-
|
The approval of this proposal would constitute IDBD’s confirmation and approval that all of Dolphin’s commitments under this proposal would imply the full and complete settlement of its remaining obligations to inject NIS 8.5 million in IDBD, pursuant to Dolphin’s irrevocable proposal dated December 29, 2014 (provided however that Dolphin shall participate in an amount exceeding NIS 8.5 million).
|
-
|
The amount mention in section 5(d)(iii) of the May 6 proposal shall be NIS 200 million. Dolphin's commitment would automatically expire upon the occurrence of any of the following events: (i) if any of DIC’s creditors or any of the trustees of DIC’s bonds filed any legal action against DIC, including a request for the early repayment or acceleration of any portion of DIC’s debt; and/or (ii) if any meeting of DIC’s bondholders included in its agenda one or many of the following matters: (a) appointment of advisers (financial, legal or otherwise); (b) appointment of a committee of representatives of DIC’s bondholders; (c) filing of any legal action against DIC; and/or (d) requests for early or immediate repayment of any portion of DIC’s debt, or any similar discussion.
|
9.
|
Interests in associates (Continued)
|
9.
|
Interests in associates (Continued)
|
BHSA
|
||||||||
June 30,
2015
|
June 30,
2014
|
|||||||
Assets
|
||||||||
Total non-current Assets
|
10,233,808 | 8,794,304 | ||||||
Current
|
||||||||
Cash and cash equivalents
|
3,312,594 | 3,111,615 | ||||||
Other current assets
|
21,537,466 | 15,432,874 | ||||||
Total current assets
|
24,850,060 | 18,544,489 | ||||||
Total assets
|
35,083,868 | 27,338,793 | ||||||
Liabilities
|
||||||||
Non-current
|
||||||||
Financial liabilities (i)
|
3,625,045 | 4,208,630 | ||||||
Other liabilities
|
100,132 | (129,996 | ) | |||||
Total non-current liabilities
|
3,725,177 | 4,078,634 | ||||||
Current
|
||||||||
Financial liabilities (i)
|
25,775,030 | 18,140,073 | ||||||
Other liabilities
|
1,117,945 | 1,095,056 | ||||||
Total current liabilities
|
26,892,975 | 19,235,129 | ||||||
Total liabilities
|
30,618,152 | 23,313,763 | ||||||
Net assets
|
4,465,716 | 4,025,030 | ||||||
Non-controlling interest
|
68,147 | 50,662 | ||||||
Net assets of the Parent company
|
4,397,569 | 3,974,368 |
(i)
|
Exclude Trade and other payables and provisions.
|
BHSA
|
||||||||
June 30,
2015
|
June 30,
2014
|
|||||||
Revenues
|
4,499,581 | 3,046,657 | ||||||
Depreciation and amortization
|
(140,747 | ) | (86,035 | ) | ||||
Interest income
|
4,215,729 | 3,729,649 | ||||||
Interest expense
|
(2,785,449 | ) | (2,059,377 | ) | ||||
Allowance for trade receivables
|
(343,471 | ) | (333,025 | ) | ||||
General and administrative expenses
|
(3,273,162 | ) | (2,297,449 | ) | ||||
Other expenses
|
(1,211,684 | ) | (1,022,315 | ) | ||||
Other earnings, net
|
(145,254 | ) | (94,463 | ) | ||||
Income tax expense
|
(354,828 | ) | (301,273 | ) | ||||
Profit for the year
|
460,715 | 582,369 | ||||||
Other comprehensive income
|
- | 14,760 | ||||||
Total other comprehensive income for the year
|
460,715 | 597,129 | ||||||
Loss attributable to non-controlling interest
|
(4,303 | ) | (9,760 | ) | ||||
Dividends received
|
12,873 | 9,144 |
BHSA
|
||||||||
June 30,
2015
|
June 30,
2014
|
|||||||
Net assets at beginning of the year
|
3,974,368 | 3,397,479 | ||||||
Profit for the year
|
465,018 | 592,129 | ||||||
Other comprehensive income
|
- | 14,760 | ||||||
Dividends distribution
|
(41,817 | ) | (30,000 | ) | ||||
Net assets at end of the year
|
4,397,569 | 3,974,368 | ||||||
Interest held
|
30.74 | % | 30.51 | % | ||||
Interest in associates
|
1,351,718 | 1,212,781 | ||||||
Goodwill
|
4,904 | - | ||||||
Intergroup transactions
|
(385 | ) | (1,156 | ) | ||||
Book amount at the end of the year
|
1,356,237 | 1,211,625 |
9.
|
Interests in associates (Continued)
|
9.
|
Interests in associates (Continued)
|
IDBD
(in millions of pesos)
|
||||||||
June 30,
2015
|
June 30,
2014
|
|||||||
Assets
|
||||||||
Non- Current Assets
|
||||||||
Investment in associates
|
8,866 | 9,118 | ||||||
Other investments and derivative financial instruments
|
833 | 5,856 | ||||||
Property, plant and equipment
|
13,450 | 12,791 | ||||||
Investment properties
|
27,299 | 24,317 | ||||||
Intangible assets
|
11,419 | 12,580 | ||||||
Other non-current assets
|
3,068 | 3,375 | ||||||
Total non-current assets
|
64,935 | 68,037 | ||||||
Current Assets
|
||||||||
Other investments and derivative financial instruments
|
5,251 | 8,354 | ||||||
Trade and other receivables
|
6,101 | 6,878 | ||||||
Cash and cash equivalents
|
8,375 | 10,829 | ||||||
Other current assets
|
10,617 | 5,762 | ||||||
Total current assets
|
30,344 | 31,823 | ||||||
Total assets
|
95,279 | 99,860 | ||||||
Liabilities
|
||||||||
Non-Current Liabilities
|
||||||||
Obligations
|
41,961 | 45,756 | ||||||
Bank loan and other financial liabilities
|
7,553 | 6,747 | ||||||
Financial instruments
|
7,274 | 8,072 | ||||||
Other non-current liabilities
|
4,896 | 4,767 | ||||||
Total non-current liabilities
|
61,684 | 65,342 | ||||||
Current Liabilities
|
||||||||
Obligations
|
7,002 | 7,899 | ||||||
Bank loan and other financial liabilities
|
5,338 | 6,340 | ||||||
Trade payables
|
6,053 | 5,923 | ||||||
Other current liabilities
|
5,816 | 6,502 | ||||||
Total current liabilities
|
24,209 | 26,664 | ||||||
Total liabilities
|
85,893 | 92,006 | ||||||
Net assets
|
9,386 | 7,854 | ||||||
Non-controlling interest
|
8,526 | 8,643 | ||||||
Net assets of the Parent company
|
860 | (789 | ) |
9.
|
Interests in associates (Continued)
|
IDBD
(in millions of pesos)
|
||||||||
June 30,
2015
(period of
twelve months)
|
June 30,
2014
(period of
six months)
|
|||||||
Net cash generated by operating activities
|
2,909 | 3,346 | ||||||
Net cash generated by investing activities
|
1,389 | 4,228 | ||||||
Net cash used in financing activities
|
(4,505 | ) | (11,805 | ) | ||||
Net decrease in cash and cash equivalents
|
(207 | ) | (4,231 | ) | ||||
Net decrease in cash and cash equivalents from continuing operations
|
(207 | ) | (6,935 | ) | ||||
Net increase in cash and cash equivalents from discontinued operations
|
- | 2,704 | ||||||
Net decrease in cash and cash equivalents
|
(207 | ) | (4,231 | ) | ||||
Cash and cash equivalents at beginning of period
|
8,480 | 11,870 | ||||||
Foreign exchange gain on cash and cash equivalents
|
107 | 2,846 | ||||||
Changes in cash included in assets classified as held for sale
|
(5 | ) | 344 | |||||
Cash and cash equivalents at end of year
|
8,375 | 10,829 |
IDBD
(in millions of pesos)
|
||||||||
June 30,
2015
(period of
twelve months)
|
June 30,
2014
(period of
six months)
|
|||||||
Gross profit
|
7,316 | 9,564 | ||||||
Profit before Income Tax
|
945 | 1,013 | ||||||
Income tax
|
(232 | ) | (592 | ) | ||||
Profit from continuing operations
|
713 | 421 | ||||||
Profit from discontinued operations
|
- | 144 | ||||||
Net Profit for the period
|
713 | 565 | ||||||
Other comprehensive income
|
(562 | ) | 221 | |||||
Total comprehensive income for the period
|
151 | 786 | ||||||
Profit attributable to non-controlling interest
|
140 | 833 |
10.
|
Investment properties
|
Shopping Center
|
Office buildings and other rental properties
|
Undeveloped parcel of lands
|
Properties under development
|
Total
|
||||||||||||||||
At July 1st, 2013
|
||||||||||||||||||||
Costs
|
3,099,729 | 1,756,964 | 367,591 | 185,185 | 5,409,469 | |||||||||||||||
Accumulated amortization
|
(1,239,831 | ) | (186,372 | ) | - | - | (1,426,203 | ) | ||||||||||||
Residual value
|
1,859,898 | 1,570,592 | 367,591 | 185,185 | 3,983,266 | |||||||||||||||
Year ended June 30, 2014
|
||||||||||||||||||||
Opening residual value
|
1,859,898 | 1,570,592 | 367,591 | 185,185 | 3,983,266 | |||||||||||||||
Additions
|
61,108 | 23,988 | 454 | 156,927 | 242,477 | |||||||||||||||
Currency translation adjustment
|
- | 375,263 | - | - | 375,263 | |||||||||||||||
Reclassification of held for sale
|
- | (1,098,990 | ) | - | - | (1,098,990 | ) | |||||||||||||
Disposals
|
(35 | ) | (46,977 | ) | - | (684 | ) | (47,696 | ) | |||||||||||
Transfers
|
(25,332 | ) | 15,076 | (174 | ) | (803 | ) | (11,233 | ) | |||||||||||
Financial costs capitalized
|
- | - | - | 22,376 | 22,376 | |||||||||||||||
Depreciation (i) (Note 32)
|
(130,394 | ) | (65,474 | ) | - | - | (195,868 | ) | ||||||||||||
Closing residual value
|
1,765,245 | 773,478 | 367,871 | 363,001 | 3,269,595 | |||||||||||||||
At June 30, 2014
|
||||||||||||||||||||
Costs
|
3,135,470 | 1,022,389 | 367,871 | 363,001 | 4,888,731 | |||||||||||||||
Accumulated amortization
|
(1,370,225 | ) | (248,911 | ) | - | - | (1,619,136 | ) | ||||||||||||
Residual value
|
1,765,245 | 773,478 | 367,871 | 363,001 | 3,269,595 | |||||||||||||||
Year ended June 30, 2015
|
||||||||||||||||||||
Opening residual value
|
1,765,245 | 773,478 | 367,871 | 363,001 | 3,269,595 | |||||||||||||||
Additions
|
60,361 | 220,152 | 1,569 | 186,457 | 468,539 | |||||||||||||||
Transfers (ii)
|
490,191 | 23,080 | 25,331 | (538,602 | ) | - | ||||||||||||||
Transfers to property, plant and equipment
|
(140 | ) | 10,404 | - | (8,779 | ) | 1,485 | |||||||||||||
Transfers to trading property
|
(3,107 | ) | - | - | - | (3,107 | ) | |||||||||||||
Disposals
|
(114 | ) | (93,566 | ) | (3,251 | ) | (2,077 | ) | (99,008 | ) | ||||||||||
Depreciation (i) (Note 32)
|
(123,387 | ) | (24,040 | ) | - | - | (147,427 | ) | ||||||||||||
Closing residual value
|
2,189,049 | 909,508 | 391,520 | - | 3,490,077 | |||||||||||||||
At June 30, 2015
|
||||||||||||||||||||
Costs
|
3,682,661 | 1,182,459 | 391,520 | - | 5,256,640 | |||||||||||||||
Accumulated amortization
|
(1,493,612 | ) | (272,951 | ) | - | - | (1,766,563 | ) | ||||||||||||
Residual value
|
2,189,049 | 909,508 | 391,520 | - | 3,490,077 |
10.
|
Investment properties (Continued)
|
June 30,
2015
|
June 30,
2014
|
June 30,
2013
|
||||||||||
Rental and service income
|
2,109,117 | 1,714,097 | 1,340,984 | |||||||||
Income from expenses and collective promotion fund
|
887,208 | 736,302 | 594,290 | |||||||||
Direct operating expenses
|
(1,496,986 | ) | (1,336,987 | ) | (1,075,423 | ) | ||||||
Development expenditures
|
(13,588 | ) | (17,506 | ) | (12,188 | ) | ||||||
Gain from disposal of investment property
|
1,162,770 | 235,507 | 183,767 |
June 30,
2015
|
June 30,
2014
|
|||||||
Soleil Premium Outlet (i)
|
- | 88,634 | ||||||
Córdoba Shopping (ii)
|
61,111 | 64,951 | ||||||
Total
|
61,111 | 153,585 |
10.
|
Investment properties (Continued)
|
Initial costs
|
Subsequent costs
|
Costs at end of the year
|
|||||||||||||||||||||||||||||||||||||||||||
Name
|
Encumbrances
|
Plot of land
|
Buildings, facilities and improvements
|
Improvements / Additions/ Disposals/ Transfers
|
Plot of land
|
Buildings, facilities
and improvements
|
Total
|
Accumulated depreciation
|
Net book amount
|
Date of construction
|
Date of acquisition
|
Useful life as of 06.30.15
|
|||||||||||||||||||||||||||||||||
Shopping centers:
|
|||||||||||||||||||||||||||||||||||||||||||||
Abasto de Buenos Aires
|
- | 9,753 | 430,847 | 10,553 | 9,753 | 441,400 | 451,153 | (195,818 | ) | 255,335 |
Nov-98
|
Jul-94
|
17 | ||||||||||||||||||||||||||||||||
Alto Palermo Shopping
|
- | 8,694 | 594,621 | 13,609 | 8,694 | 608,230 | 616,924 | (395,132 | ) | 221,792 |
Oct-90
|
Nov-97
|
15 | ||||||||||||||||||||||||||||||||
Alto Avellaneda
|
- | 18,089 | 299,323 | 22,073 | 18,089 | 321,396 | 339,485 | (208,345 | ) | 131,140 |
Oct-95
|
Dec-97
|
12 | ||||||||||||||||||||||||||||||||
Paseo Alcorta
|
- | 8,006 | 169,389 | 12,128 | 8,006 | 181,517 | 189,523 | (83,432 | ) | 106,091 |
Jun-92
|
Jun-97
|
16 | ||||||||||||||||||||||||||||||||
Alto Noa
|
- | 227 | 68,467 | 2,706 | 227 | 71,173 | 71,400 | (41,692 | ) | 29,708 |
Sep-94
|
Mar-95
|
14 | ||||||||||||||||||||||||||||||||
Buenos Aires Design
|
- | - | 63,738 | 9,332 | - | 73,070 | 73,070 | (60,210 | ) | 12,860 |
Nov-93
|
Nov-97
|
3 | ||||||||||||||||||||||||||||||||
Patio Bullrich
|
- | 9,814 | 220,955 | 7,840 | 9,814 | 228,795 | 238,609 | (126,183 | ) | 112,426 |
Sep-88
|
Oct-98
|
17 | ||||||||||||||||||||||||||||||||
Alto Rosario
|
- | 25,686 | 138,227 | 3,237 | 25,686 | 141,464 | 167,150 | (52,136 | ) | 115,014 |
Nov-04
|
Nov-04
|
19 | ||||||||||||||||||||||||||||||||
Mendoza Plaza
|
- | 10,546 | 173,150 | 14,210 | 10,546 | 187,360 | 197,906 | (96,249 | ) | 101,657 |
Jun-94
|
Dec-94
|
16 | ||||||||||||||||||||||||||||||||
Dot Baires Shopping
|
- | 84,890 | 321,589 | 89,629 | 53,462 | 442,646 | 496,108 | (118,848 | ) | 377,260 | - |
Nov-06
|
26 | ||||||||||||||||||||||||||||||||
Córdoba Shopping
|
Antichresis
|
5,009 | 112,650 | (352 | ) | 5,009 | 112,298 | 117,307 | (56,196 | ) | 61,111 |
Mar-90
|
Dec-06
|
15 | |||||||||||||||||||||||||||||||
Distrito Arcos
|
- | - | - | 236,656 | - | 236,656 | 236,656 | (6,856 | ) | 229,800 | - |
Nov-09
|
31 | ||||||||||||||||||||||||||||||||
Alto Comahue
|
- | 1,143 | 10,201 | 302,721 | 1,143 | 312,922 | 314,065 | (4,962 | ) | 309,103 | - |
May-06
|
22 | ||||||||||||||||||||||||||||||||
Patio Olmos
|
- | 11,532 | 21,943 | - | 11,532 | 21,943 | 33,475 | (6,425 | ) | 27,050 |
May-95
|
Sep-07
|
17 | ||||||||||||||||||||||||||||||||
Soleil Factory
|
- | 23,267 | 55,905 | 36,113 | 23,267 | 92,018 | 115,285 | (30,984 | ) | 84,301 | - |
Jun-10
|
9 | ||||||||||||||||||||||||||||||||
Ocampo parking space
|
- | 3,201 | 21,137 | 207 | 3,201 | 21,344 | 24,545 | (10,144 | ) | 14,401 | - |
Sep-06
|
23 | ||||||||||||||||||||||||||||||||
Total Shopping Centers
|
219,857 | 2,702,142 | 760,662 | 188,429 | 3,494,232 | 3,682,661 | (1,493,612 | ) | 2,189,049 |
10.
|
Investment properties (Continued)
|
Initial costs
|
Subsequent costs
|
Costs at end of the year
|
||||||||||||||||||||||||||||||||||||||||||||||
Name
|
Encumbrances
|
Plot of land
|
Buildings, facilities and improvements
|
Improvements / Additions / Disposals / Transfers
|
Plot of land
|
Buildings, facilities
and improvements
|
Total
|
Accumulated depreciation
|
Net book
amount
|
Date of construction
|
Date of acquisition
|
Useful life as of 06.30.15
|
||||||||||||||||||||||||||||||||||||
Office building and other rental properties portfolio:
|
||||||||||||||||||||||||||||||||||||||||||||||||
Abasto Office
|
- | - | - | 14,288 | - | 14,288 | 14,288 | (3,204 | ) | 11,084 |
Mar-13
|
- | 17 | |||||||||||||||||||||||||||||||||||
Building annexed to Alto Palermo Shopping
|
- | - | 38,201 | - | - | 38,201 | 38,201 | (5,659 | ) | 32,542 | - |
Jun-06
|
9 | |||||||||||||||||||||||||||||||||||
Dot building
|
- | 13,346 | 75,482 | 54,466 | 44,775 | 98,519 | 143,294 | (16,929 | ) | 126,365 | - |
Nov-06
|
30 | |||||||||||||||||||||||||||||||||||
Anchorena 545/665
|
- | 3,018 | 14,851 | - | 3,018 | 14,851 | 17,869 | (4,697 | ) | 13,172 | - |
Agu-08
|
- | |||||||||||||||||||||||||||||||||||
Zelaya 3102, 3103 and 3105
|
- | 1,723 | - | - | 1,723 | - | 1,723 | - | 1,723 | - |
Jul-05
|
- | ||||||||||||||||||||||||||||||||||||
Bouchard 710
|
- | 40,167 | 21,398 | 132 | 40,167 | 21,530 | 61,697 | (774 | ) | 60,923 | - |
Jun-05
|
26 | |||||||||||||||||||||||||||||||||||
Bouchard 551
|
- | 4,963 | 4,634 | 534 | 4,963 | 5,168 | 10,131 | (2,433 | ) | 7,698 | - |
Mar-07
|
29 | |||||||||||||||||||||||||||||||||||
Dique IV
|
- | 3,660 | 63,181 | 1,941 | 3,660 | 65,122 | 68,782 | (16,947 | ) | 51,835 |
Apr-09
|
- | 32 | |||||||||||||||||||||||||||||||||||
Intercontinental Plaza (i)
|
- | 2,929 | 44,526 | 341 | 2,929 | 44,867 | 47,796 | (6,690 | ) | 41,106 |
Jun-96
|
Nov-97
|
24 | |||||||||||||||||||||||||||||||||||
Libertador 498
|
- | 1,088 | 4,487 | 891 | 1,088 | 5,378 | 6,466 | (2,528 | ) | 3,938 | - |
Dec-95
|
23 | |||||||||||||||||||||||||||||||||||
Madero 1020
|
- | 70 | 294 | - | 70 | 294 | 364 | (251 | ) | 113 | - |
Dec-95
|
5 | |||||||||||||||||||||||||||||||||||
Maipú 1300
|
- | 4,992 | 20,131 | 1,605 | 4,992 | 21,736 | 26,728 | (12,015 | ) | 14,713 | - |
Sep-95
|
22 | |||||||||||||||||||||||||||||||||||
Rivadavia 2768
|
- | 88 | 498 | - | 88 | 498 | 586 | (304 | ) | 282 |
Jun-95
|
Sep-91
|
12 | |||||||||||||||||||||||||||||||||||
Suipacha 652
|
- | 2,712 | 4,872 | 1,020 | 2,712 | 5,892 | 8,604 | (349 | ) | 8,255 |
Jun-94
|
Nov-91
|
10 | |||||||||||||||||||||||||||||||||||
Torre BankBoston
|
- | 78,362 | 63,370 | - | 78,362 | 63,370 | 141,732 | (3,300 | ) | 138,432 | - |
Agu-07
|
27 | |||||||||||||||||||||||||||||||||||
República building
|
- | 111,070 | 89,775 | 96 | 111,070 | 89,871 | 200,941 | (5,970 | ) | 194,971 | - |
Apr-08
|
26 | |||||||||||||||||||||||||||||||||||
Constitución 1111
|
- | 256 | 1,082 | - | 256 | 1,082 | 1,338 | (655 | ) | 683 |
Mar-95
|
Jun-94
|
21 | |||||||||||||||||||||||||||||||||||
La Adela
|
- | 214,594 | - | - | 214,594 | - | 214,594 | - | 214,594 | - |
Jul-14
|
- | ||||||||||||||||||||||||||||||||||||
Santa María del Plata
|
- | 12,500 | - | 24 | 12,500 | 24 | 12,524 | (14 | ) | 12,510 | - |
Jun-97
|
- | |||||||||||||||||||||||||||||||||||
Total Office and Other rental properties portfolio
|
495,538 | 446,782 | 75,338 | 526,967 | 490,691 | 1,017,658 | (82,719 | ) | 934,939 |
10.
|
Investment properties (Continued)
|
Initial costs
|
Subsequent costs
|
Costs at end of the year
|
||||||||||||||||||||||||||||||||||||||||||||||
Name
|
Encumbrances
|
Plot of land
|
Buildings, facilities and improvements
|
Improvements / Additions / Disposals / Transfers
|
Plot of land
|
Buildings, facilities
and improvements
|
Total
|
Accumulated depreciation
|
Net book
amount
|
Date of construction
|
Date of acquisition
|
Useful life as of 06.30.15
|
||||||||||||||||||||||||||||||||||||
Undeveloped parcels of lands:
|
||||||||||||||||||||||||||||||||||||||||||||||||
Building annexed to DOT
|
- | 25,336 | - | - | 25,336 | - | 25,336 | - | 25,336 | - |
Nov-06
|
- | ||||||||||||||||||||||||||||||||||||
Luján plot of land
|
- | 41,861 | - | 111 | 41,972 | - | 41,972 | - | 41,972 | - |
May-12
|
- | ||||||||||||||||||||||||||||||||||||
Caballito - Ferro
|
- | 45,812 | - | - | 45,812 | - | 45,812 | - | 45,812 | - |
Nov-97
|
- | ||||||||||||||||||||||||||||||||||||
Intercontinental plot of land
|
- | 1,564 | - | - | 1,564 | - | 1,564 | - | 1,564 | - |
Feb-98
|
- | ||||||||||||||||||||||||||||||||||||
Santa María del Plata
|
- | 158,523 | - | 428 | 158,951 | - | 158,951 | - | 158,951 | - |
Jun-97
|
- | ||||||||||||||||||||||||||||||||||||
Catalinas Norte
|
- | 100,862 | 1,803 | 6,831 | 100,862 | 8,634 | 109,496 | - | 109,496 | - |
Dec-09
|
- | ||||||||||||||||||||||||||||||||||||
Pilar
|
- | 1,550 | - | - | 1,550 | - | 1,550 | - | 1,550 | - |
Jul-97
|
- | ||||||||||||||||||||||||||||||||||||
Others
|
- | 3,272 | - | 3,567 | 6,839 | - | 6,839 | - | 6,839 | - | - | - | ||||||||||||||||||||||||||||||||||||
Total undeveloped parcels of land
|
378,780 | 1,803 | 10,937 | 382,886 | 8,634 | 391,520 | - | 391,520 | ||||||||||||||||||||||||||||||||||||||||
Total
|
1,094,175 | 3,150,727 | 846,937 | 1,098,282 | 3,993,557 | 5,091,839 | (1,576,331 | ) | 3,515,508 |
(i)
|
As of June 30, 2015 includes property, plant and equipment for an amount of Ps. 25,431 since are offices used by the Group.
|
11.
|
Property, plant and equipment
|
Hotel buildings and facilities
|
Other buildings and facilities
|
Furniture
and fixtures
|
Machinery and equipment
|
Vehicles
|
Total
|
|||||||||||||||||||
At July 1st, 2013
|
||||||||||||||||||||||||
Costs
|
380,543 | 62,773 | 14,336 | 87,846 | 512 | 546,010 | ||||||||||||||||||
Accumulated depreciation
|
(212,343 | ) | (37,252 | ) | (10,296 | ) | (72,934 | ) | (512 | ) | (333,337 | ) | ||||||||||||
Residual value
|
168,200 | 25,521 | 4,040 | 14,912 | - | 212,673 | ||||||||||||||||||
Year ended June 30, 2014
|
||||||||||||||||||||||||
Opening residual value
|
168,200 | 25,521 | 4,040 | 14,912 | - | 212,673 | ||||||||||||||||||
Additions
|
9,980 | 1,596 | 2,818 | 9,481 | - | 23,875 | ||||||||||||||||||
Currency translation adjustment
|
- | - | 92 | - | - | 92 | ||||||||||||||||||
Disposals
|
(24 | ) | - | - | (36 | ) | - | (60 | ) | |||||||||||||||
Transfers
|
- | 12,231 | - | - | - | 12,231 | ||||||||||||||||||
Depreciation charge (i) (Note 32)
|
(13,770 | ) | (7,044 | ) | (906 | ) | (7,078 | ) | - | (28,798 | ) | |||||||||||||
Closing residual value
|
164,386 | 32,304 | 6,044 | 17,279 | - | 220,013 | ||||||||||||||||||
At June 30, 2014
|
||||||||||||||||||||||||
Costs
|
390,499 | 76,600 | 17,246 | 97,291 | 512 | 582,148 | ||||||||||||||||||
Accumulated depreciation
|
(226,113 | ) | (44,296 | ) | (11,202 | ) | (80,012 | ) | (512 | ) | (362,135 | ) | ||||||||||||
Residual value
|
164,386 | 32,304 | 6,044 | 17,279 | - | 220,013 | ||||||||||||||||||
Year ended June 30, 2015
|
||||||||||||||||||||||||
Opening residual value
|
164,386 | 32,304 | 6,044 | 17,279 | - | 220,013 | ||||||||||||||||||
Additions
|
14,737 | 6,233 | 2,693 | 23,248 | 2,863 | 49,774 | ||||||||||||||||||
Currency translation adjustment
|
- | - | 102 | - | - | 102 | ||||||||||||||||||
Disposals
|
- | - | (46 | ) | - | - | (46 | ) | ||||||||||||||||
Transfers of investment properties
|
- | (10,404 | ) | 3,618 | 5,301 | - | (1,485 | ) | ||||||||||||||||
Depreciation charge (i) (Note 32)
|
(14,309 | ) | (398 | ) | (1,513 | ) | (8,527 | ) | (477 | ) | (25,224 | ) | ||||||||||||
Closing residual value
|
164,814 | 27,735 | 10,898 | 37,301 | 2,386 | 243,134 | ||||||||||||||||||
At June 30, 2015
|
||||||||||||||||||||||||
Costs
|
405,236 | 72,429 | 23,613 | 125,840 | 3,375 | 630,493 | ||||||||||||||||||
Accumulated depreciation
|
(240,422 | ) | (44,694 | ) | (12,715 | ) | (88,539 | ) | (989 | ) | (387,359 | ) | ||||||||||||
Residual value
|
164,814 | 27,735 | 10,898 | 37,301 | 2,386 | 243,134 |
11.
|
Property, plant and equipment (Continued)
|
June 30,
2015
|
June 30,
2014
|
|||||||
Sheraton Libertador
|
31,400 | 35,149 | ||||||
Total
|
31,400 | 35,149 |
June 30,
2015
|
June 30,
2014
|
|||||||
Costs – Finance leases
|
7,689 | 2,684 | ||||||
Accumulated depreciation
|
(5,509 | ) | (288 | ) | ||||
Residual value
|
2,180 | 2,396 |
11.
|
Property, plant and equipment (Continued)
|
Initial costs
|
Subsequent costs
|
Costs at end of the year
|
|||||||||||||||||||||||||||||||||||||||
Name
|
Encumbrances
|
Plot of land
|
Buildings, facilities
and improvements
|
Improvements / Additions / Disposals / Transfers
|
Plot of land
|
Buildings, facilities and improvements
|
Total
|
Accumulated amortization
|
Net book amount
|
Date of acquisition
|
Useful life for calculating depreciation
|
||||||||||||||||||||||||||||||
Hotels:
|
|||||||||||||||||||||||||||||||||||||||||
Llao Llao
|
- | 24,973 | 92,011 | 7,196 | 24,973 | 99,207 | 124,180 | (42,641 | ) | 81,539 |
jun-97
|
10 | |||||||||||||||||||||||||||||
Hotel Intercontinental
|
- | 8,672 | 122,714 | 17,392 | 8,672 | 140,106 | 148,778 | (96,903 | ) | 51,875 |
nov-97
|
10 | |||||||||||||||||||||||||||||
Sheraton Libertador
|
Mortgage
|
3,027 | 120,670 | 8,581 | 3,027 | 129,251 | 132,278 | (100,878 | ) | 31,400 |
mar-98
|
9 | |||||||||||||||||||||||||||||
Total Hotels
|
36,672 | 335,395 | 33,169 | 36,672 | 368,564 | 405,236 | (240,422 | ) | 164,814 |
12.
|
Trading properties
|
Completed properties
|
Properties
under development
|
Undeveloped
sites
|
Total
|
|||||||||||||
At July 1st, 2013
|
6,794 | 88,864 | 10,495 | 106,153 | ||||||||||||
Additions
|
1,400 | 2,694 | - | 4,094 | ||||||||||||
Currency translation adjustment
|
- | 27,630 | - | 27,630 | ||||||||||||
Transfers
|
7,897 | - | (747 | ) | 7,150 | |||||||||||
Disposals
|
(9,774 | ) | - | - | (9,774 | ) | ||||||||||
At June 30, 2014
|
6,317 | 119,188 | 9,748 | 135,253 | ||||||||||||
Additions
|
- | 1,066 | - | 1,066 | ||||||||||||
Currency translation adjustment
|
- | (6,125 | ) | - | (6,125 | ) | ||||||||||
Transfers of investment properties
|
- | - | 3,107 | 3,107 | ||||||||||||
Disposals
|
(1,897 | ) | - | - | (1,897 | ) | ||||||||||
June 30, 2015
|
4,420 | 114,129 | 12,855 | 131,404 |
June 30,
2015
|
June 30,
2014
|
|||||||
Net book amount
|
||||||||
Non-current
|
128,104 | 130,657 | ||||||
Current
|
3,300 | 4,596 | ||||||
131,404 | 135,253 |
June 30,
2015
|
June 30,
2014
|
|||||||
Vista al Muelle
|
43,362 | 45,368 | ||||||
Zetol
|
62,567 | 65,620 | ||||||
Total
|
105,929 | 110,988 |
12.
|
Trading properties (Continued)
|
Description
|
Encumbrances
|
Net book
amount
|
Date of acquisition
|
||||||
Undeveloped sites:
|
|||||||||
Air space Coto
|
- | 8,945 |
sep-97
|
||||||
Córdoba plot of land
|
- | 3,107 |
may-15
|
||||||
Residential project Neuquén
|
- | 803 |
may-06
|
||||||
Total undeveloped sites
|
12,855 | ||||||||
Properties under development:
|
|||||||||
Vista al Muelle
|
Mortgage
|
43,362 |
jun-09
|
||||||
Zetol
|
Mortgage
|
62,567 |
jun-09
|
||||||
Pereiraola
|
- | 8,200 |
dec-96
|
||||||
Total properties under development
|
114,129 | ||||||||
Completed properties:
|
|||||||||
Abril
|
- | 2,357 |
jan-95
|
||||||
San Martín de Tours
|
- | 124 |
mar-03
|
||||||
Entre Rios 465/9 apartment
|
- | 1,400 |
nov-13
|
||||||
Condominios I
|
- | 21 |
nov-13
|
||||||
Condominios II
|
- | 518 |
apr-11
|
||||||
Total completed properties
|
4,420 | ||||||||
Total
|
131,404 |
|
13.
|
Intangible assets
|
Goodwill
|
Computer software
|
Rights
of use (ii)
|
Right to receive future units under barter agreements (iii)
|
Others
|
Total
|
|||||||||||||||||||
At July 1st, 2013
|
||||||||||||||||||||||||
Cost
|
56,893 | 17,752 | 20,873 | 93,225 | 907 | 189,650 | ||||||||||||||||||
Accumulated depreciation
|
- | (15,998 | ) | - | - | (774 | ) | (16,772 | ) | |||||||||||||||
Residual value
|
56,893 | 1,754 | 20,873 | 93,225 | 133 | 172,878 | ||||||||||||||||||
Year ended June 30, 2014
|
||||||||||||||||||||||||
Opening residual value
|
56,893 | 1,754 | 20,873 | 93,225 | 133 | 172,878 | ||||||||||||||||||
Additions
|
- | 785 | - | - | 10,954 | 11,739 | ||||||||||||||||||
Currency translation adjustment
|
26,016 | - | - | - | - | 26,016 | ||||||||||||||||||
Transfers
|
- | - | - | (8,148 | ) | - | (8,148 | ) | ||||||||||||||||
Reclassification of held for sale
|
(77,085 | ) | - | - | - | - | (77,085 | ) | ||||||||||||||||
Disposals
|
- | (162 | ) | - | - | - | (162 | ) | ||||||||||||||||
Amortization charges (i)
|
- | (1,073 | ) | - | - | (80 | ) | (1,153 | ) | |||||||||||||||
Residual value at the year end
|
5,824 | 1,304 | 20,873 | 85,077 | 11,007 | 124,085 | ||||||||||||||||||
At June 30, 2014
|
||||||||||||||||||||||||
Cost
|
5,824 | 18,324 | 20,873 | 85,077 | 11,861 | 141,959 | ||||||||||||||||||
Accumulated depreciation
|
- | (17,020 | ) | - | - | (854 | ) | (17,874 | ) | |||||||||||||||
Residual value
|
5,824 | 1,304 | 20,873 | 85,077 | 11,007 | 124,085 | ||||||||||||||||||
Fiscal year ended June 30, 2015
|
||||||||||||||||||||||||
Opening residual value
|
5,824 | 1,304 | 20,873 | 85,077 | 11,007 | 124,085 | ||||||||||||||||||
Additions
|
- | 925 | - | 5,409 | - | 6,334 | ||||||||||||||||||
Disposals
|
(343 | ) | (37 | ) | - | - | - | (380 | ) | |||||||||||||||
Amortization charges (i)
|
- | (1,011 | ) | (471 | ) | - | (1,148 | ) | (2,630 | ) | ||||||||||||||
Closing residual value
|
5,481 | 1,181 | 20,402 | 90,486 | 9,859 | 127,409 | ||||||||||||||||||
At June 30, 2015
|
||||||||||||||||||||||||
Cost
|
5,481 | 19,212 | 20,873 | 90,486 | 11,861 | 147,913 | ||||||||||||||||||
Accumulated depreciation
|
- | (18,031 | ) | (471 | ) | - | (2,002 | ) | (20,504 | ) | ||||||||||||||
Residual value
|
5,481 | 1,181 | 20,402 | 90,486 | 9,859 | 127,409 |
(i)
|
As of June 30, 2015 and 2014 amortization charges of intangible assets are included in “General and administrative expenses” in the statement of income (Note 32). There are no impairment charges for any of the years presented.
|
(ii)
|
Correspond to Distrito Arcos. Depreciation began in January, 2015, upon delivery of the shopping center.
|
(iii)
|
Correspond to receivables in kind representing the right to receive residential apartments in the future by way of barter agreements (Note 38).
|
14.
|
Inventories
|
June 30,
2015
|
June 30,
2014
|
|||||||
Current
|
||||||||
Hotel supplies
|
6,926 | 6,011 | ||||||
Materials and other items of inventories
|
15,844 | 10,952 | ||||||
Current inventories
|
22,770 | 16,963 | ||||||
Total inventories
|
22,770 | 16,963 |
15.
|
Financial instruments by category
|
Financial assets at amortized cost
|
Financial assets at fair value through profit or loss
|
Subtotal
financial assets
|
Non-financial assets
|
Total
|
||||||||||||||||
June 30, 2015
|
||||||||||||||||||||
Assets as per statement of financial position
|
||||||||||||||||||||
IDBD (Note 9) (i)
|
- | 907,084 | 907,084 | - | 907,084 | |||||||||||||||
Trade and other receivables (excluding the allowance for doubtful accounts and other receivables) (Note 17)
|
1,153,809 | - | 1,153,809 | 206,710 | 1,360,519 | |||||||||||||||
Investments in financial assets (Note 18)
|
109,831 | 888,081 | 997,912 | - | 997,912 | |||||||||||||||
Derivative financial instruments (Note 19)
|
- | 235,565 | 235,565 | - | 235,565 | |||||||||||||||
Cash and cash equivalents (Note 20)
|
372,825 | 2,355 | 375,180 | - | 375,180 | |||||||||||||||
Total
|
1,636,465 | 2,033,085 | 3,669,550 | 206,710 | 3,876,260 |
(i)
|
The Group has reported its interest in the associate IDBD at fair value with changes to Statement of income, as per IAS 28. Therefore, the Group has included such interest in the table in order to report the relevant performance.
|
15.
|
Financial instruments by category (Continued)
|
Financial liabilities at
amortized cost
|
Financial liabilities at fair value
|
Subtotal
financial liabilities
|
Non-financial liabilities
|
Total
|
||||||||||||||||
Liabilities as per statement of financial position
|
||||||||||||||||||||
Trade and other payables (Note 21)
|
460,460 | - | 460,460 | 690,164 | 1,150,624 | |||||||||||||||
Borrowings (excluding finance leases liabilities) (Note 24)
|
4,955,144 | 15,089 | 4,970,233 | - | 4,970,233 | |||||||||||||||
Derivative financial instruments (Note 19)
|
- | 510,144 | 510,144 | - | 510,144 | |||||||||||||||
Total
|
5,415,604 | 525,233 | 5,940,837 | 690,164 | 6,631,001 |
Financial assets at amortized cost
|
Financial assets at fair value through profit or loss
|
Subtotal
financial assets
|
Non-financial assets
|
Total
|
||||||||||||||||
June 30, 2014
|
||||||||||||||||||||
Assets as per statement of financial position
|
||||||||||||||||||||
IDBD (Note 9) (i)
|
- | 595,342 | 595,342 | - | 595,342 | |||||||||||||||
Trade and other receivables (excluding the allowance for doubtful accounts and other receivables) (Note 17)
|
693,481 | - | 693,481 | 188,062 | 881,543 | |||||||||||||||
Investments in financial assets (Note 18)
|
14,079 | 494,744 | 508,823 | - | 508,823 | |||||||||||||||
Derivative financial instruments (Note 19)
|
- | 12,870 | 12,870 | - | 12,870 | |||||||||||||||
Cash and cash equivalents (Note 20)
|
607,291 | 2,616 | 609,907 | - | 609,907 | |||||||||||||||
Total
|
1,314,851 | 1,105,572 | 2,420,423 | 188,062 | 2,608,485 |
(i)
|
The Group has reported its interest in the associate IDBD at fair value with changes to income statement, as per IAS 28. Therefore, the Group has included such interest in the table in order to report the relevant performance.
|
Financial liabilities at
amortized cost
|
Financial liabilities at fair value
|
Subtotal
financial liabilities
|
Non-financial liabilities
|
Total
|
||||||||||||||||
Liabilities as per statement of financial position
|
||||||||||||||||||||
Trade and other payables (Note 21)
|
344,904 | - | 344,904 | 536,473 | 881,377 | |||||||||||||||
Borrowings (excluding finance leases liabilities) (Note 24)
|
4,416,384 | 74,344 | 4,490,728 | - | 4,490,728 | |||||||||||||||
Derivative financial instruments (Note 19)
|
- | 335,072 | 335,072 | - | 335,072 | |||||||||||||||
Total
|
4,761,288 | 409,416 | 5,170,704 | 536,473 | 5,707,177 |
15.
|
Financial instruments by category (Continued)
|
Financial assets / liabilities at amortized cost
|
Financial assets / liabilities at fair value through profit or loss
|
Total
|
||||||||||
June 30, 2015
|
||||||||||||
Interest income (i)
|
60,972 | 4,868 | 65,840 | |||||||||
Interest expense (i)
|
(627,773 | ) | - | (627,773 | ) | |||||||
Foreign exchange gains / (losses), net (i)
|
(353,236 | ) | - | (353,236 | ) | |||||||
Dividend income (i)
|
- | 16,622 | 16,622 | |||||||||
Fair value gain on financial assets at fair value through profit or loss (i)
|
- | 52,060 | 52,060 | |||||||||
Loss on derivative financial instruments, net (i)
|
- | (16,167 | ) | (16,167 | ) | |||||||
Other finance costs (i)
|
(71,512 | ) | - | (71,512 | ) | |||||||
Fair value loss on associates (ii)
|
- | (1,001,000 | ) | (1,001,000 | ) | |||||||
Net result
|
(991,549 | ) | (943,617 | ) | (1,935,166 | ) |
Financial assets / liabilities at amortized cost
|
Financial assets / liabilities at fair value through profit or loss
|
Total
|
||||||||||
June 30, 2014
|
||||||||||||
Interest income (i)
|
75,680 | - | 75,680 | |||||||||
Interest expense (i)
|
(470,488 | ) | - | (470,488 | ) | |||||||
Foreign exchange gains / (losses), net (i)
|
(1,162,452 | ) | - | (1,162,452 | ) | |||||||
Dividend income (i)
|
15,041 | - | 15,041 | |||||||||
Fair value gains on financial assets at fair value through profit or loss (i)
|
- | 215,430 | 215,430 | |||||||||
Loss on derivative financial instruments, net (i)
|
- | (316,632 | ) | (316,632 | ) | |||||||
Loss from repurchase of non-convertible notes (i)
|
(22,701 | ) | - | (22,701 | ) | |||||||
Other finance costs (i)
|
(53,147 | ) | - | (53,147 | ) | |||||||
Fair value loss on associates (ii)
|
- | (516,961 | ) | (516,961 | ) | |||||||
Net result
|
(1,618,067 | ) | (618,163 | ) | (2,236,230 | ) |
15.
|
Financial instruments by category (Continued)
|
Financial assets / liabilities at amortized cost
|
Financial assets / liabilities at fair value through profit or loss
|
Total
|
||||||||||
June 30, 2013
|
||||||||||||
Interest income (i)
|
38,244 | - | 38,244 | |||||||||
Interest expense (i)
|
(320,956 | ) | - | (320,956 | ) | |||||||
Foreign exchange gains / (losses), net (i)
|
(349,441 | ) | - | (349,441 | ) | |||||||
Dividend income (i)
|
23,249 | - | 23,249 | |||||||||
Fair value gains on financial assets at fair value through profit or loss (i)
|
- | 1,396 | 1,396 | |||||||||
Gain on derivative financial instruments, net (i)
|
- | 11,242 | 11,242 | |||||||||
Gain from repurchase of non-convertible notes (i)
|
2,057 | - | 2,057 | |||||||||
Other finance costs (i)
|
(43,983 | ) | - | (43,983 | ) | |||||||
Net result
|
(650,830 | ) | 12,638 | (638,192 | ) |
(i)
|
Included in “Financial results, net” in the statement of income.
|
(ii)
|
Included in “Share of profit / (loss) of associates and joint ventures” in the statement of income.
|
15.
|
Financial instruments by category (Continued)
|
15.
|
Financial instruments by category (Continued)
|
15.
|
Financial instruments by category (Continued)
|
·
|
Quoted market price of IDBD share as of June 30, 2015 as published in the TASE: NIS 1.96 per share
|
·
|
Number of shares eligible to participate in the tender offer under the various scenarios and assigned probability of occurrence; and
|
·
|
Discount rate to be applied to the fixed-price tender offer obligation of 0.07%
|
15.
|
Financial instruments by category (Continued)
|
June 30, 2015
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Assets
|
||||||||||||||||
Financial assets at fair value through profit or loss:
|
||||||||||||||||
- Investment in equity securities of TGLT
|
71,573 | - | - | 71,573 | ||||||||||||
- Investment in preferred shares of Condor
|
- | - | 348,854 | 348,854 | ||||||||||||
- Investment in equity securities of Avenida Inc.
|
102,316 | - | - | 102,316 | ||||||||||||
- Mutual funds
|
144,808 | - | - | 144,808 | ||||||||||||
- Banco Macro bonds
|
1,789 | - | - | 1,789 | ||||||||||||
- Public companies securities
|
16,640 | - | - | 16,640 | ||||||||||||
- Government bonds
|
101,649 | - | - | 101,649 | ||||||||||||
Derivative financial instruments:
|
||||||||||||||||
- Warrants of IDBD
|
228,414 | - | - | 228,414 | ||||||||||||
- Warrants of Condor
|
- | - | 7,151 | 7,151 | ||||||||||||
Cash and cash equivalents:
|
||||||||||||||||
- Mutual funds
|
2,355 | - | - | 2,355 | ||||||||||||
Investment in associates:
|
||||||||||||||||
- IDBD
|
- | - | 907,084 | 907,084 | ||||||||||||
Total assets
|
699,544 | - | 1,263,089 | 1,932,633 |
June 30, 2015
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Liabilities
|
||||||||||||||||
Derivative financial instruments:
|
||||||||||||||||
- Commitment to tender offer shares in IDBD
|
- | - | 502,641 | 502,641 | ||||||||||||
- Foreign-currency future contracts
|
7,503 | - | - | 7,503 | ||||||||||||
Borrowings:
|
||||||||||||||||
- Other borrowings
|
- | - | 15,089 | 15,089 | ||||||||||||
Total liabilities
|
7,503 | - | 517,730 | 525,233 |
15.
|
Financial instruments by category (Continued)
|
June 30, 2014
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Assets
|
||||||||||||||||
Financial assets at fair value through profit or loss:
|
||||||||||||||||
- Investment in equity securities of TGLT
|
63,546 | - | - | 63,546 | ||||||||||||
- Investment in equity securities of Hersha
|
53,901 | - | - | 53,901 | ||||||||||||
- Investment in preferred shares of Condor
|
- | - | 211,170 | 211,170 | ||||||||||||
- Mutual funds
|
140,095 | - | - | 140,095 | ||||||||||||
- Banco Macro bonds
|
1,438 | - | - | 1,438 | ||||||||||||
- Government bonds
|
10,276 | 10,276 | ||||||||||||||
- Public companies securities
|
14,318 | - | - | 14,318 | ||||||||||||
Derivative financial instruments:
|
||||||||||||||||
- Foreign-currency future contracts
|
- | 1,200 | - | 1,200 | ||||||||||||
- IDBD preemptive rights
|
10,986 | - | - | 10,986 | ||||||||||||
- Interest rate swaps (i)
|
- | 684 | - | 684 | ||||||||||||
Cash and cash equivalents:
|
||||||||||||||||
- Mutual funds
|
2,616 | - | - | 2,616 | ||||||||||||
Investment in associates:
|
||||||||||||||||
- IDBD
|
595,342 | - | - | 595,342 | ||||||||||||
Total assets
|
892,518 | 1,884 | 211,170 | 1,105,572 |
(i)
|
Includes Ps. 299 in the line Assets held for sale (See note 42).
|
June 30, 2014
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Liabilities
|
||||||||||||||||
Derivative financial instruments:
|
||||||||||||||||
- Foreign-currency future contracts
|
- | 14,225 | - | 14,225 | ||||||||||||
- Commitment to tender offer shares in IDBD
|
- | - | 320,847 | 320,847 | ||||||||||||
Borrowings:
|
||||||||||||||||
- Other borrowings
|
22,901 | 51,443 | - | 74,344 | ||||||||||||
Total liabilities
|
22,901 | 65,668 | 320,847 | 409,416 |
15.
|
Financial instruments by category (Continued)
|
Preferred shares of Condor
|
Warrants of Condor
|
Investment in associate IDBD
|
Commitment to tender offer of shares in IDBD
|
Other borrowings
|
Total
|
|||||||||||||||||||
Balance at July 1st, 2013
|
139,121 | 16,949 | - | - | 156,070 | |||||||||||||||||||
Currency translation adjustment
|
- | - | - | (5,247 | ) | - | (5,247 | ) | ||||||||||||||||
Total gains / losses for the year 2014 (i)
|
72,049 | (16,949 | ) | - | (315,600 | ) | - | (260,500 | ) | |||||||||||||||
Balance at June 30, 2014
|
211,170 | - | - | (320,847 | ) | - | (109,677 | ) | ||||||||||||||||
Transferencia a nivel 3
|
1,825,450 | - | (86,210 | ) | 1,739,240 | |||||||||||||||||||
Currency translation adjustment
|
- | - | 82,634 | (45,260 | ) | 18,580 | 55,954 | |||||||||||||||||
Total gains / losses for the year 2015 (i)
|
137,684 | 7,151 | (1,001,000 | ) | (136,534 | ) | 52,541 | (940,158 | ) | |||||||||||||||
Balance at June 30, 2015
|
348,854 | 7,151 | 907,084 | (502,641 | ) | (15,089 | ) | 745,359 |
15.
|
Financial instruments by category (Continued)
|
Description
|
Pricing model
|
Pricing method
|
Parameters
|
Range
|
||||
Foreign currency-contracts
|
Present value method
|
Theoretical price
|
Money market curve, interest-rate curve; Foreign exchange curve.
|
-
|
||||
Commitment to tender offer IDBD
|
Black-Scholes
|
Theoretical price
|
Underlying asset price; share price volatility (historical) and interest-rate curve (NIS rate curve).
|
Underlying asset price
3.5 to 4.7
Share price volatility
30% to 40%
Money market interest rate 0.7% to 1%
|
||||
Other Borrowings
|
Weighted probability of the difference between market price and the Commitment to tender offer of shares in IDBD
|
Theoretical price
|
Underlying asset price; share price volatility (historical) and interest-rate curve (NIS rate curve). IRSA 2017 interest-rate and scenario weights.
|
Underlying asset price
1.55 to 2.35
Share price volatility
60% to 80%
Money market interest rate 0.02% to 0.9%
|
||||
IDBD Shares
|
Weighted probability of the difference between market price and the Commitment to tender offer of shares in IDBD
|
Theoretical price
|
Underlying asset price; share price volatility (historical) and interest-rate curve (NIS rate curve). IRSA 2017 interest-rate and scenario weights.
|
Underlying asset price
1.55 to 2.35
Share price volatility
60% to 80%
Money market interest rate 0.02% to 0.9%
|
||||
Call option of Arcos
|
Discounted cash flow
|
-
|
Projected income and discounted interest rate.
|
-
|
||||
Interest rate swaps
|
Cash flow
|
Theoretical price
|
Interest rate and cash flow forward contract.
|
-
|
||||
Preferred shares of Condor
|
Binomial tree
|
Theoretical price
|
Underlying asset price (market price), share price volatility (historical) and money market interest-rate curve (Libor rate).
|
Underlying asset price 1.96 to 2.65
Share price volatility 56% to 76%
Money market interest rate 0.67% to
0.83%
|
||||
Warrants of Condor
|
Black-Scholes
|
Theoretical price
|
Underlying asset price (market price), share price volatility (historical) and money market interest-rate curve (Libor rate).
|
Underlying asset price 1.96 to 2.65
Share price volatility 56% to 76%
Money market interest rate 0.67% to
0.83%
|
16.
|
Restricted assets
|
June 30,
2015
|
June 30,
2014
|
|||||||
Current
|
||||||||
Escrow deposits
|
9,424 | - | ||||||
Total current restricted assets
|
9,424 | - | ||||||
Total restricted assets
|
9,424 | - |
17.
|
Trade and other receivables
|
June 30,
2015
|
June 30,
2014
|
|||||||
Non-current
|
||||||||
Trade, leases and services receivables
|
62,080 | 55,105 | ||||||
Less: allowance for doubtful accounts
|
(2,208 | ) | (2,208 | ) | ||||
Total Non-current trade receivables
|
59,872 | 52,897 | ||||||
Receivables from sale of joint venture
|
3,595 | 3,213 | ||||||
VAT receivables
|
24,943 | 19,710 | ||||||
Loans granted
|
1,561 | 762 | ||||||
Prepaid expenses
|
11,274 | 14,332 | ||||||
Advances for share purchases (see Note 3)
|
12,134 | - | ||||||
Others
|
487 | 331 | ||||||
Total Non-current other receivables
|
53,994 | 38,348 | ||||||
Related parties (Note 37)
|
1,275 | 1,143 | ||||||
Total non-current trade and other receivables
|
115,141 | 92,388 | ||||||
Current
|
||||||||
Consumer financing receivables
|
14,620 | 14,861 | ||||||
Leases and services receivables
|
356,217 | 256,110 | ||||||
Receivables from hotel operations
|
21,144 | 24,767 | ||||||
Post-dated checks
|
234,059 | 183,422 | ||||||
Trade and lease debtors under legal proceedings
|
69,236 | 59,397 | ||||||
Less: allowance for doubtful accounts
|
(92,935 | ) | (79,926 | ) | ||||
Total Current trade receivables
|
602,341 | 458,631 | ||||||
VAT receivables
|
7,309 | 8,788 | ||||||
Other tax receivables
|
15,398 | 16,085 | ||||||
Loans granted
|
16,448 | 18,178 | ||||||
Prepaid expenses
|
99,345 | 54,626 | ||||||
Advances to suppliers
|
48,441 | 74,521 | ||||||
Contributions to be paid in by non-controlling interests
|
- | 12,840 | ||||||
Advance payments for foreign currency future contracts
|
7,578 | - | ||||||
Others
|
22,889 | 20,231 | ||||||
Less: allowance for other receivables
|
(165 | ) | (175 | ) | ||||
Total Current other receivables
|
217,243 | 205,094 | ||||||
Related parties (Note 37)
|
330,486 | 43,121 | ||||||
Total Current trade and other receivables
|
1,150,070 | 706,846 | ||||||
Total trade and other receivables
|
1,265,211 | 799,234 |
17.
|
Trade and other receivables (Continued)
|
June 30,
2015
|
June 30,
2014
|
|||||||
Beginning of the year
|
82,309 | 79,148 | ||||||
Additions
|
26,251 | 17,671 | ||||||
Unused amounts reversed
|
(11,875 | ) | (6,045 | ) | ||||
Receivables written off during the year as uncollectable
|
(1,377 | ) | (8,465 | ) | ||||
End of the year
|
95,308 | 82,309 |
17.
|
Trade and other receivables (Continued)
|
Expired
|
||||||||||||||||||||||||
Up to
3 months
|
3 to 6
months
|
Over 6 months
|
Not past due
|
Impaired
|
Total
|
|||||||||||||||||||
Shopping center’s leases and services
|
39,119 | 10,437 | 13,986 | 555,039 | 69,846 | 688,427 | ||||||||||||||||||
Office leases and services
|
3,761 | 3,645 | 1,801 | 11,888 | 9,540 | 30,635 | ||||||||||||||||||
Hotel leases and services
|
854 | - | - | 16,195 | 757 | 17,806 | ||||||||||||||||||
Consumer financing
|
- | - | - | 4,635 | 14,620 | 19,255 | ||||||||||||||||||
Sale of properties
|
64 | 63 | 277 | 449 | 380 | 1,233 | ||||||||||||||||||
Total as of June 30, 2015
|
43,798 | 14,145 | 16,064 | 588,206 | 95,143 | 757,356 | ||||||||||||||||||
Shopping center’s leases and services
|
24,637 | 9,555 | 11,194 | 422,357 | 56,405 | 524,148 | ||||||||||||||||||
Office leases and services
|
5,845 | 708 | 8,177 | 3,272 | 7,968 | 25,970 | ||||||||||||||||||
Hotel leases and services
|
16,890 | - | - | 7,489 | 388 | 24,767 | ||||||||||||||||||
Consumer financing
|
- | - | - | - | 14,861 | 14,861 | ||||||||||||||||||
Sale of properties
|
41 | 43 | 218 | 1,102 | 2,512 | 3,916 | ||||||||||||||||||
Total as of June 30, 2014
|
47,413 | 10,306 | 19,589 | 434,220 | 82,134 | 593,662 |
17.
|
Trade and other receivables (Continued)
|
18.
|
Investments in financial assets
|
June 30,
2015
|
June 30,
2014
|
|||||||
Non-current
|
||||||||
Financial assets at fair value
|
||||||||
Investment in preferred shares of Condor
|
348,854 | 211,170 | ||||||
Investment in equity securities in TGLT (i)
|
71,573 | 63,546 | ||||||
Investment in equity securities in Avenida Inc. (see Note 3)
|
102,316 | - | ||||||
Financial assets at amortized cost
|
||||||||
Non-Convertible Notes related parties (Note 37)
|
179,760 | - | ||||||
Total investments in non-current financial assets
|
702,503 | 274,716 | ||||||
Current
|
||||||||
Financial assets at fair value
|
||||||||
Mutual funds
|
144,808 | 140,095 | ||||||
Investment in equity securities in Hersha (see Note 3) (ii)
|
- | 53,901 | ||||||
Banco Macro bonds
|
1,789 | 1,438 | ||||||
Public companies securities
|
16,640 | 14,318 | ||||||
Government bonds
|
101,649 | 10,276 | ||||||
Financial assets at amortized cost
|
||||||||
Non-Convertible Notes related parties (Note 37)
|
30,523 | 14,079 | ||||||
Total investments in current financial assets
|
295,409 | 234,107 | ||||||
Total investments in financial assets
|
997,912 | 508,823 |
19.
|
Derivative Financial Instruments
|
June 30,
2015
|
June 30,
2014
|
|||||||
Assets
|
||||||||
Non-current
|
||||||||
Warrants of IDBD (Note 3)
|
199,256 | - | ||||||
Warrants of Condor (i)
|
7,151 | - | ||||||
Total non-current derivative financial instruments
|
206,407 | - |
Current
|
||||||||
Interest rate swaps
|
- | 684 | ||||||
Foreign currency future contracts
|
- | 1,200 | ||||||
Warrants of IDBD (Note 3)
|
29,158 | - | ||||||
IDBD preemptive rights (Note 3)
|
- | 10,986 | ||||||
Total current derivative financial instruments
|
29,158 | 12,870 | ||||||
Total assets
|
235,565 | 12,870 |
Liabilities
|
||||||||
Non-current
|
||||||||
Commitment to tender offer shares in IDBD (Note 3)
|
(265,056 | ) | (320,847 | ) | ||||
Total non-current derivative financial instruments
|
(265,056 | ) | (320,847 | ) | ||||
Current
|
||||||||
Commitment to tender offer shares in IDBD (Note 3)
|
(237,585 | ) | - | |||||
Foreign currency future contracts
|
(7,503 | ) | (14,225 | ) | ||||
Total current derivative financial instruments
|
(245,088 | ) | (14,225 | ) | ||||
Total liabilities
|
(510,144 | ) | (335,072 | ) | ||||
Total derivative financial instruments
|
(274,579 | ) | (322,202 | ) |
(i)
|
The balance represents the fair value of Condor’s warrants purchased in February 2012.
|
19.
|
Derivative Financial instruments (Continued)
|
Futures
|
Amount (US$)
|
Due date
|
June 30,
2015
|
June 30,
2014
|
|||||||||
Banco ICBC
|
10,000 |
07/31/2014
|
- | 1,200 | |||||||||
Total
|
10,000 | - | 1,200 |
Futures
|
Amount (US$)
|
Due date
|
June 30,
2015
|
June 30,
2014
|
|||||||||
Banco Galicia
|
10,000 |
07/31/2014
|
- | (9,000 | ) | ||||||||
Banco Hipotecario
|
5,000 |
07/31/2014
|
- | (5,225 | ) | ||||||||
Banco Finansur
|
15,000 |
03/31/2016
|
(7,503 | ) | - | ||||||||
Total
|
30,000 | (7,503 | ) | (14,225 | ) |
Futures
|
Amount (US$)
|
June 30,
2015
|
June 30,
2014
|
June 30,
2013
|
||||||||||||
Banco ICBC
|
10,000 | (1,098 | ) | (4,373 | ) | - | ||||||||||
Banco Galicia
|
10,000 | (1,098 | ) | (16,238 | ) | - | ||||||||||
Banco Hipotecario
|
5,000 | (549 | ) | 30,896 | - | |||||||||||
Banco Itaú
|
20,000 | - | 2,205 | (2,977 | ) | |||||||||||
Banco Finansur
|
15,000 | (7,503 | ) | - | - | |||||||||||
Total
|
60,000 | (10,248 | ) | 12,490 | (2,977 | ) |
19.
|
Derivative Financial instruments (Continued)
|
Interest rate swaps
|
Amount
(US$)
|
Amount
(Ps.)
|
Due date
|
Rate
|
June 30,
2015
|
June 30,
2014
|
|||||||||||||||
Banco Galicia
|
10,000 | - |
12/31/2014
|
24.25 | % | - | 34 | ||||||||||||||
Banco ICBC
|
- | 50,000 |
09/10/2014
|
21.60 | % | - | 234 | ||||||||||||||
Banco ICBC
|
- | 50,000 |
09/12/2014
|
22.15 | % | - | 179 | ||||||||||||||
Banco ICBC
|
- | 20,000 |
10/15/2014
|
22.95 | % | - | 73 | ||||||||||||||
Banco Santander Río
|
- | 5,000 |
09/18/2014
|
22.50 | % | - | 16 | ||||||||||||||
Banco Santander Río.
|
- | 20,000 |
12/03/2014
|
24.25 | % | - | 38 | ||||||||||||||
Banco Itaú
|
- | 25,000 |
09/25/2014
|
22.85 | % | - | 76 | ||||||||||||||
Banco Galicia
|
- | 10,000 |
12/31/2014
|
24.25 | % | - | 34 | ||||||||||||||
Banco M&T (*)
|
75,000 | - |
12/01/2019
|
4.22 | % | - | - | ||||||||||||||
Total
|
85,000 | 180,000 | - | 684 |
Interest rate swaps
|
Amount
(US$)
|
Amount
(Ps.)
|
June 30,
2015
|
June 30,
2014
|
June 30,
2013
|
|||||||||||||||
Banco Galicia
|
10,000 | - | - | 22 | - | |||||||||||||||
Banco ICBC
|
- | 50,000 | (204 | ) | 557 | - | ||||||||||||||
Banco ICBC
|
- | 50,000 | (230 | ) | 311 | - | ||||||||||||||
Banco ICBC
|
- | 20,000 | (186 | ) | 89 | - | ||||||||||||||
Banco Santander Río
|
- | 5,000 | (27 | ) | 19 | - | ||||||||||||||
Banco Santander Río.
|
- | 20,000 | (355 | ) | 22 | - | ||||||||||||||
Banco Itaú
|
- | 25,000 | (166 | ) | 48 | - | ||||||||||||||
Banco Galicia
|
- | 10,000 | (434 | ) | 30 | - | ||||||||||||||
Banco M&T
|
75,000 | - | - | - | 15,726 | |||||||||||||||
Total
|
85,000 | 180,000 | (1,602 | ) | 1,098 | 15,726 |
20.
|
Cash flow information
|
June 30,
2015
|
June 30,
2014
|
|||||||
Cash at bank and on hand
|
372,825 | 607,291 | ||||||
Mutual funds
|
2,355 | 2,616 | ||||||
Total cash and cash equivalents
|
375,180 | 609,907 |
Note
|
June 30,
2015
|
June 30,
2014
|
June 30,
2013
|
||||||||||
Profit / (Loss) for the year
|
70,069 | (831,617 | ) | 297,208 | |||||||||
Adjustments for:
|
|||||||||||||
Income tax expense
|
27
|
488,266 | (64,267 | ) | 132,847 | ||||||||
Retirement of obsolete property, plant and equipment and investment properties
|
10.11
|
160 | 60 | 605 | |||||||||
Amortization and depreciation
|
32
|
175,281 | 225,819 | 220,021 | |||||||||
Gain from disposal of investment property
|
(1,162,770 | ) | (235,507 | ) | (183,767 | ) | |||||||
Dividends received
|
35
|
(16,622 | ) | (15,041 | ) | (23,249 | ) | ||||||
Derecognition of intangible assets
|
13
|
380 | 162 | - | |||||||||
Share-based payments
|
26
|
21,999 | 44,690 | 5,856 | |||||||||
Changes in fair value of investments in financial assets and liabilities
|
35
|
(52,060 | ) | (215,430 | ) | (1,396 | ) | ||||||
Gain / (loss) from derivative financial instruments
|
35
|
16,167 | 316,632 | (12,487 | ) | ||||||||
Loss from purchase of subsidiaries
|
34
|
- | - | (137,062 | ) | ||||||||
Interest expense, net
|
35
|
561,933 | 417,184 | 282,712 | |||||||||
Provisions and allowances
|
74,658 | 96,149 | 90,771 | ||||||||||
Share of profit of associates and joint ventures
|
8.9
|
1,022,861 | 413,771 | 7,391 | |||||||||
Gain on repurchase of Non-Convertible notes
|
35
|
- | 22,701 | - | |||||||||
Reversal of currency translation adjustment
|
34
|
(188,323 | ) | - | - | ||||||||
Unrealized foreign exchange loss, net
|
429,071 | 1,186,894 | 336,913 | ||||||||||
Gain sale of subsidiaries and joint ventures
|
34
|
(22,075 | ) | - | (15,433 | ) | |||||||
Changes in operating assets and liabilities:
|
|||||||||||||
Increase in inventories
|
(5,807 | ) | (642 | ) | (662 | ) | |||||||
(Increase) / Decrease in trading properties
|
(304 | ) | 5,680 | 4,466 | |||||||||
Increase in trade and other receivables
|
(400,090 | ) | (14,054 | ) | (63,168 | ) | |||||||
Increase in restricted founds
|
- | - | (85 | ) | |||||||||
Increase/ (Decrease) in trade and other payables
|
232,806 | (103,754 | ) | 189,850 | |||||||||
Increase in salaries and social security liabilities
|
21,801 | 50,855 | 12,563 | ||||||||||
Decrease in provisions
|
23
|
(4,021 | ) | (2,034 | ) | (2,881 | ) | ||||||
Net cash generated by operating activities before income tax paid
|
1,263,380 | 1,298,251 | 1,141,013 |
20.
|
Cash flow information (Continued)
|
Additional information
|
||||||||||||
Non-cash activities
|
||||||||||||
June 30,
2015
|
June 30,
2014
|
June 30,
2013
|
||||||||||
Use of tax loss carryforwards
|
157,367 | - | - | |||||||||
Increase in investments in financial assets through an increase in borrowings
|
- | - | 18,767 | |||||||||
Decrease in borrowings through a decrease in financial assets
|
- | 23,829 | - | |||||||||
Reimbursement of expired dividends
|
813 | 1,690 | 626 | |||||||||
Dividends payable
|
- | 56,625 | 4,169 | |||||||||
Increase in properties, plant and equipment through an increase in borrowings
|
1,986 | 651 | 2,004 | |||||||||
Decrease in investment properties through an increase in intangible assets
|
1,666 | 998 | - | |||||||||
Increase in borrowings through a decrease in dividends payable
|
- | 160,173 | - | |||||||||
Increase in trading properties through a decrease in intangible assets
|
- | 7,150 | - | |||||||||
Decrease in trade and other receivables, net through an increase in assets held for sale
|
- | 17,990 | - | |||||||||
Decrease in investment properties through an increase in assets held for sale
|
- | 1,098,990 | - | |||||||||
Decrease in intangible assets through an increase in assets held for sale
|
- | 77,085 | - | |||||||||
Decrease in restricted assets through an increase in assets held for sale
|
8,742 | 163,501 | - | |||||||||
Decrease in derivative financial assets through an increase in assets held for sale
|
- | 299 | - | |||||||||
Increase in restricted funds through a decrease in trade and other payables
|
- | 146,394 | - | |||||||||
Decrease in trade and other payables through an increase in liabilities directly associated with assets classified as held for sale
|
- | 170,245 | - | |||||||||
Decrease in borrowings through an increase in liabilities directly associated with assets classified as held for sale
|
- | 603,021 | - | |||||||||
Decrease in deferred income tax liabilities through an increase in liabilities directly associated with assets classified as held for sale
|
- | 33,346 | - | |||||||||
Conversion of notes
|
- | - | 126 | |||||||||
Decrease in Shareholder’s equity through an increase in borrowings
|
- | - | 1,640 | |||||||||
Decrease in Shareholder’s equity through an increase in trade and other payables
|
42,772 | - | 1,164 | |||||||||
Decrease in investments in associates and joint ventures through an increase in trade and other receivables
|
- | - | 20,869 | |||||||||
Decrease in borrowings through a decrease in investments in subsidiaries, associates and joint ventures
|
136,685 | - | - | |||||||||
Decrease in investments properties through an increase in trade and other receivables
|
- | - | 118,936 | |||||||||
Increase in investment properties, through a decrease in property, plant and equipment
|
1,485 | 12,231 | - | |||||||||
Increase in financial assets through a decrease in investments in associates and joint ventures
|
30,089 | - | - | |||||||||
Increase in investment properties through a decrease in financial assets
|
48,217 | - | - | |||||||||
Decrease of investment in properties through an increase in trading properties
|
3,107 | - | - | |||||||||
Decrease in trading properties through a decrease in trade and other payables
|
1,135 | - | - | |||||||||
Dividends distribution not yet paid
|
4,594 | - | - | |||||||||
Increase in equity interest in associates through a decrease in derivative financial instruments
|
12,744 | - | - |
21.
|
Trade and other payables
|
June 30,
2015
|
June 30,
2014
|
|||||||
Non-current
|
||||||||
Admission rights
|
146,036 | 113,617 | ||||||
Sale and rent payments received in advance
|
63,986 | 51,638 | ||||||
Guarantee deposits
|
6,236 | 6,759 | ||||||
Total Non-current trade payables
|
216,258 | 172,014 | ||||||
Tax payment facilities plan
|
24,080 | 14,813 | ||||||
Deferred income tax
|
7,420 | 7,914 | ||||||
Others
|
6,825 | 7,716 | ||||||
Total Non-current other payables
|
38,325 | 30,443 | ||||||
Related parties (Note 37)
|
45 | 195 | ||||||
Total Non-current trade and other payables
|
254,628 | 202,652 | ||||||
Current
|
||||||||
Trade payables
|
104,185 | 64,217 | ||||||
Accrued invoices
|
118,985 | 107,982 | ||||||
Guarantee deposits
|
14,302 | 9,985 | ||||||
Admission rights
|
142,709 | 111,024 | ||||||
Sale and rent payments received in advance
|
223,068 | 180,985 | ||||||
Total Current trade payables
|
603,249 | 474,193 | ||||||
VAT payables
|
43,732 | 28,509 | ||||||
Deferred revenue
|
495 | 495 | ||||||
Other tax payables
|
38,639 | 27,478 | ||||||
Dividends payable to non-controlling shareholders
|
59,377 | 23,940 | ||||||
Others
|
16,032 | 7,449 | ||||||
Total Current other payables
|
158,275 | 87,871 | ||||||
Related parties (Note 37)
|
134,472 | 116,661 | ||||||
Total Current trade and other payables
|
895,996 | 678,725 | ||||||
Total trade and other payables
|
1,150,624 | 881,377 |
22.
|
Salaries and social security liabilities
|
June 30,
2015
|
June 30,
2014
|
|||||||
Non-current
|
||||||||
Social security payable
|
2,220 | 3,749 | ||||||
Total non-current salaries and social security liabilities
|
2,220 | 3,749 |
Current
|
||||||||
Provision for vacation, bonuses and others
|
95,372 | 80,577 | ||||||
Social security payable
|
26,406 | 18,098 | ||||||
Others
|
828 | 601 | ||||||
Total current salaries and social security liabilities
|
122,606 | 99,276 | ||||||
Total salaries and social security liabilities
|
124,826 | 103,025 |
23.
|
Provisions
|
23.
|
Provisions (Continued)
|
Labor,
legal and other claims (i)
|
Tax and social security claims
|
Investments
in associates and joint ventures (ii)
|
Total
|
|||||||||||||
At July 1st, 2013
|
31,010 | 1,686 | 39,091 | 71,787 | ||||||||||||
Additions
|
23,641 | 478 | 115,359 | 139,478 | ||||||||||||
Recovery
|
(7,529 | ) | (574 | ) | - | (8,103 | ) | |||||||||
Used during the year
|
(2,034 | ) | - | - | (2,034 | ) | ||||||||||
Contributions
|
- | - | (16,667 | ) | (16,667 | ) | ||||||||||
Currency translation adjustment
|
- | - | 39,199 | 39,199 | ||||||||||||
At June 30, 2014
|
45,088 | 1,590 | 176,982 | 223,660 | ||||||||||||
Additions
|
34,316 | 285 | 159,022 | 193,623 | ||||||||||||
Recovery
|
(14,157 | ) | (399 | ) | (59 | ) | (14,615 | ) | ||||||||
Used during the year
|
(4,021 | ) | - | - | (4,021 | ) | ||||||||||
Contributions
|
- | - | (1,522 | ) | (1,522 | ) | ||||||||||
Currency translation adjustment
|
- | - | 28,508 | 28,508 | ||||||||||||
At June 30, 2015
|
61,226 | 1,476 | 362,931 | 425,633 |
(i)
|
Additions and recoveries are included in "Other operating results, net".
|
(ii)
|
Corresponds to equity interests in associates with negative equity, principally New Lipstick LLC and Condor. Additions and recoveries are included in "Share of profit / (loss) of associates and joint ventures".
|
June 30,
2015
|
June 30,
2014
|
|||||||
Non-current
|
374,121 | 205,228 | ||||||
Current
|
51,512 | 18,432 | ||||||
425,633 | 223,660 |
23.
|
Provisions (Continued)
|
24.
|
Borrowings
|
Book value
|
||||||||||||||||
Secured / unsecured
|
Currency
|
Rate
|
Effective
interest rate %
|
Nominal Value
of principal
|
June 30,
2015
|
June 30,
2014
|
||||||||||
Non-current
|
||||||||||||||||
NCN IRSA due 2015
|
Unsecured
|
Ps.
|
Floating
|
Badlar + 395ps
|
- | - | 209,297 | |||||||||
NCN IRSA due 2017
|
Unsecured
|
US$
|
Fixed
|
8.5%
|
149,000 | 1,352,655 | 1,210,359 | |||||||||
NCN IRSA due 2017
|
Unsecured
|
Ps.
|
Floating
|
Badlar + 450 ps
|
10,790 | 10,730 | 10,734 | |||||||||
NCN APSA due 2017
|
Unsecured
|
US$
|
Fixed
|
7.875%
|
114,284 | 1,025,376 | 866,549 | |||||||||
NCN IRSA due 2020
|
Unsecured
|
US$
|
Fixed
|
11.5%
|
139,493 | 1,244,990 | 1,111,449 | |||||||||
Seller financing of plot of land (i)
|
Secured
|
US$
|
-
|
-
|
2,334 | 21,271 | 19,072 | |||||||||
Seller financing of Soleil Factory (ii)
|
Secured
|
US$
|
Fixed
|
-
|
- | - | 80,126 | |||||||||
Seller financing of Zetol S.A. (iii)
|
Secured
|
US$
|
Fixed
|
3.5%
|
4,500 | 49,688 | 22,058 | |||||||||
Bank loans (iv)
|
Unsecured
|
Ps.
|
Fixed
|
(iv)
|
14,253 | 8,158 | 3,938 | |||||||||
Syndicated loan (v)
|
Unsecured
|
Ps.
|
Fixed
|
(v)
|
- | - | 74,964 | |||||||||
Banco Provincia de Buenos Aires loan (vi)
|
Unsecured
|
Ps.
|
Fixed
|
(vi)'
|
- | - | 6,421 | |||||||||
Finance leases obligations
|
Secured
|
US$
|
Fixed
|
7.14% to 13.28%
|
483 | 1,223 | 972 | |||||||||
Borrowings non-current
|
3,714,091 | 3,615,939 | ||||||||||||||
Related parties (Note 37) (1)
|
21,937 | 140,064 | ||||||||||||||
Total Non-current borrowings
|
3,736,028 | 3,756,003 |
24.
|
Borrowings (Continued)
|
Book value
|
||||||||||||||||
Secured / unsecured
|
Currency
|
Rate
|
Effective
interest rate %
|
Nominal Value
of principal
|
June 30,
2015
|
June 30,
2014
|
||||||||||
Current
|
||||||||||||||||
NCN IRSA due 2015
|
Unsecured
|
Ps.
|
Floating
|
Badlar + 395ps
|
209,398 | 214,084 | 4,325 | |||||||||
NCN IRSA due 2017
|
Unsecured
|
US$
|
Fixed
|
8.5%
|
149,000 | 47,318 | 41,472 | |||||||||
NCN IRSA due 2017
|
Unsecured
|
Ps.
|
Floating
|
Badlar + 450 ps
|
10,790 | 258 | 255 | |||||||||
NCN APSA due 2017
|
Unsecured
|
US$
|
Fixed
|
7.875%
|
114,284 | 10,677 | 8,968 | |||||||||
NCN IRSA due 2020
|
Unsecured
|
US$
|
Fixed
|
11.5%
|
139,493 | 64,795 | 57,281 | |||||||||
Bank overdraft (vii)
|
Unsecured
|
Ps.
|
Floating
|
(vii)
|
- | 681,551 | 401,963 | |||||||||
Bank loan (iv)
|
Unsecured
|
Ps.
|
Fixed
|
15.25%
|
14,253 | 5,855 | 907 | |||||||||
Syndicated loan (v)
|
Unsecured
|
Ps.
|
Fixed
|
(v)
|
75,571 | 75,485 | 101,339 | |||||||||
Banco Provincia de Buenos Aires loan (vi)
|
Unsecured
|
Ps.
|
Fixed
|
(vi)
|
106,444 | 106,469 | 13,869 | |||||||||
Seller financing of plot of land (i)
|
Secured
|
US$
|
Fixed
|
3.5%
|
- | - | 2,335 | |||||||||
Seller financing of Soleil Factory (ii)
|
Secured
|
US$
|
Fixed
|
5%
|
- | - | 5,128 | |||||||||
Seller financing of Zetol S.A. (iii)
|
Secured
|
US$
|
Fixed
|
3.5%
|
- | - | 21,207 | |||||||||
Finance lease obligations
|
Secured
|
US$
|
Fixed
|
7.50%
|
560 | 1,512 | 1,780 | |||||||||
Other borrowings
|
Unsecured
|
-
|
-
|
-
|
- | 15,089 | 74,344 | |||||||||
Borrowings current
|
1,223,093 | 735,173 | ||||||||||||||
Related parties (Note 37) (1)
|
13,847 | 2,304 | ||||||||||||||
Total Current borrowings
|
1,236,940 | 737,477 | ||||||||||||||
Total borrowings
|
4,972,968 | 4,493,480 |
24.
|
Borrowings (Continued)
|
(1)
|
Related parties breakdown (Note 37)
|
Book value
|
||||||||||||||||
Secured / unsecured
|
Currency
|
Rate
|
Effective
interest rate %
|
Nominal Value
of principal
|
June 30,
2015
|
June 30,
2014
|
||||||||||
Non-current
|
||||||||||||||||
Banco Hipotecario
|
Unsecured
|
Ps.
|
Fixed
|
24%
|
7,000 | 5,250 | - | |||||||||
Banco Hipotecario
|
Unsecured
|
Ps.
|
Fixed
|
15.25%
|
8,000 | 2,249 | 6,750 | |||||||||
Cyrsa S.A.
|
Unsecured
|
Ps.
|
Floating
|
Badlar
|
12,735 | 14,438 | 133,314 | |||||||||
Total non-current related parties borrowings
|
21,937 | 140,064 | ||||||||||||||
Current
|
||||||||||||||||
Banco Hipotecario
|
Unsecured
|
Ps.
|
Fixed
|
15.25%
|
5,000 | 1,633 | - | |||||||||
Banco Hipotecario
|
Unsecured
|
Ps.
|
Fixed
|
24%
|
7,000 | 4,388 | 2,233 | |||||||||
Nuevo Puerto Santa Fe
|
Unsecured
|
Ps.
|
Floating
|
Badlar + 300
|
6,635 | 7,826 | 71 | |||||||||
Total current related parties borrowings
|
13,847 | 2,304 | ||||||||||||||
Total related parties borrowings
|
35,784 | 142,368 |
24.
|
Borrowings (Continued)
|
June 30,
2015
|
June 30,
2014
|
|||||||
Fixed rate:
|
||||||||
Less than 1 year
|
206,716 | 215,486 | ||||||
Between 1 and 2 years
|
2,390,101 | 85,446 | ||||||
Between 2 and 3 years
|
2,338 | 866,811 | ||||||
Between 3 and 4 years
|
- | 81,126 | ||||||
Between 4 and 5 years
|
- | 1,252,947 | ||||||
Later than 5 years
|
1,315,949 | 1,108,122 | ||||||
3,915,104 | 3,609,938 | |||||||
Floating rate:
|
||||||||
Less than 1 year
|
846,647 | 401,340 | ||||||
Between 1 and 2 years
|
24,713 | 211,898 | ||||||
Between 2 and 3 years
|
- | 145,354 | ||||||
Between 3 and 4 years
|
- | - | ||||||
Between 4 and 5 years
|
- | - | ||||||
Later than 5 years
|
- | - | ||||||
871,360 | 758,592 | |||||||
Accrue interest and expenses
|
||||||||
Less than 1 year
|
182,065 | 118,871 | ||||||
Between 1 and 2 years
|
1,704 | - | ||||||
Between 2 and 3 years
|
- | - | ||||||
Between 3 and 4 years
|
- | - | ||||||
Between 4 and 5 years
|
- | 3,327 | ||||||
Later than 5 years
|
- | - | ||||||
183,769 | 122,198 | |||||||
4,970,233 | 4,490,728 |
24.
|
Borrowings (Continued)
|
June 30,
2015
|
June 30,
2014
|
|||||||
APSA NCN due 2017
|
1,091,287 | 976,661 | ||||||
IRSA NCN due 2017
|
1,430,459 | 1,244,281 | ||||||
IRSA NCN due 2020
|
1,585,947 | 1,422,987 | ||||||
Seller financing of Soleil Factory goodwill
|
- | 110,931 | ||||||
Seller financing
|
104,125 | 78,448 | ||||||
Syndicated loan
|
- | 191,185 | ||||||
Banco Provincia de Buenos Aires loan
|
- | 19,548 | ||||||
Bank loans
|
16,213 | 9,949 | ||||||
4,228,031 | 4,053,990 |
(*) See Note 42.
|
24.
|
Borrowings (Continued)
|
(i)
|
50% of IRSA’s cumulative consolidated net income; or 75% of IRSA’s cumulative consolidated net income if the coverage of consolidated interest ratio is at least 3.0 to 1; or 100% of IRSA’s cumulative consolidated net income if the coverage of consolidated interest ratio is at least 4.0 to 1;
|
(ii)
|
net cash proceeds from new capital contributions;
|
(iii)
|
reduction of the indebtedness of IRSA or its restricted subsidiaries;
|
(iv)
|
reduction in investments in debt certificates (other than permitted investments);
|
(v)
|
distributions received from unrestricted subsidiaries.
|
·
|
Class III Corporate Notes at Badlar rate plus 249 basis points for a face value of Ps. 153.2 million, to be matured 18 months after the issuing date and to be amortized in 3 consecutive payments within 12, 15 and 18 months, and interests to be paid in 6 installments, on a quarterly basis, from May 14, 2012.
|
·
|
Class IV Corporate Notes at a fixed rate of 7.45% for a face value of US$ 33.8 million (equal to Ps. 146.9 million), to be matured 24 months after the issuing date, to be subscribed and paid in Argentine Pesos at the applicable exchange rate, to be amortized in 4 equal and consecutive payments within 15, 18, 21 and 24 months, to be paid in 8 installments, on a quarterly basis, from May 14, 2012.
|
24.
|
Borrowings (Continued)
|
24.
|
Borrowings (Continued)
|
25.
|
Employee benefits
|
(i)
|
ordinary retirement in accordance with applicable labor regulations;
|
(ii)
|
total or permanent incapacity or disability;
|
(iii)
|
death.
|
June 30,
2015
|
June 30,
2014
|
June 30,
2013
|
||||||||||
At the beginning
|
5,786,387 | 2,181,615 | 1,117,608 | |||||||||
To be granted
|
18,734 | 3,666,123 | 1,069,259 | |||||||||
Expired
|
(680,047 | ) | (61,351 | ) | (5,252 | ) | ||||||
Granted
|
(685,568 | ) | - | - | ||||||||
At the end
|
4,439,506 | 5,786,387 | 2,181,615 |
Tax jurisdiction
|
Income tax rate
|
|||
Argentina
|
35 | % | ||
Uruguay
|
0% - 25 | % | ||
U.S.A.
|
0% - 45 | % | ||
Bermuda
|
0 | % |
June 30,
2015
|
June 30,
2014
|
June 30,
2013
|
||||||||||
Net income at tax rate applicable to profits in the respective countries
|
(1,002,982 | ) | 242,949 | (156,163 | ) | |||||||
Tax effects of:
|
||||||||||||
Share of profit / (loss) of associates and joint ventures
|
478,254 | (128,372 | ) | 26,303 | ||||||||
Unrecognized tax losses carry forwards
|
(8,958 | ) | (51,944 | ) | (7,260 | ) | ||||||
Non-taxable income
|
57,050 | 24,509 | 3,203 | |||||||||
Others
|
(5,940 | ) | (3,816 | ) | 1,070 | |||||||
Income tax
|
(482,576 | ) | 83,326 | (132,847 | ) | |||||||
Minimum Presumed Income tax (MPIT)
|
(5,690 | ) | (19,059 | ) | - | |||||||
Income tax and Minimum Presumed Income Tax
|
(488,266 | ) | 64,267 | (132,847 | ) |
June 30,
2015
|
June 30,
2014
|
|||||||
Current income tax
|
(652,858 | ) | (235,010 | ) | ||||
Deferred income tax
|
170,282 | 318,336 | ||||||
Minimum Presumed Income tax (MPIT)
|
(5,690 | ) | (19,059 | ) | ||||
Income tax
|
(488,266 | ) | 64,267 |
June 30,
2015
|
June 30,
2014
|
|||||||
Beginning of year
|
23,034 | (310,700 | ) | |||||
Cumulative translation adjustment
|
(1,233 | ) | (17,948 | ) | ||||
Reclassified to / (from) assets held for sale
|
(33,346 | ) | 33,346 | |||||
Income tax expense and deferred income tax
|
170,282 | 318,336 | ||||||
Use of tax loss carryforwards
|
(157,367 | ) | - | |||||
End of year
|
1,370 | 23,034 |
Deferred income tax assets
|
At the beginning of the year
|
Reclassified
from assets
held for sale
|
Cumulative translation adjustment
|
Charged /
(Credited) to the statement of income
|
Use of
tax loss carryforwards
|
At the end
the year
|
||||||||||||||||||
Trading properties
|
17,890 | - | - | 6,932 | - | 24,822 | ||||||||||||||||||
Investment properties and Properties, plant and equipment
|
- | - | - | 68,790 | - | 68,790 | ||||||||||||||||||
Investments
|
62,806 | - | - | - | - | 62,806 | ||||||||||||||||||
Trade and other payables
|
101,222 | - | - | 220,059 | - | 321,281 | ||||||||||||||||||
Tax loss carry-forwards
|
385,033 | - | - | 88,106 | (157,367 | ) | 315,772 | |||||||||||||||||
Others
|
38,021 | - | - | (2,189 | ) | - | 35,832 | |||||||||||||||||
Subtotal deferred income tax assets
|
604,972 | - | - | 381,698 | (157,367 | ) | 829,303 | |||||||||||||||||
Deferred income tax liabilities
|
||||||||||||||||||||||||
Investment properties and Properties, plant and equipment
|
(452,460 | ) | (33,346 | ) | (1,233 | ) | 487,039 | - | - | |||||||||||||||
Trade and other receivables
|
(65,699 | ) | - | - | (686,146 | ) | - | (751,845 | ) | |||||||||||||||
Investments
|
(52,875 | ) | - | - | (19,733 | ) | - | (72,608 | ) | |||||||||||||||
Others
|
(10,904 | ) | - | - | 7,424 | - | (3,480 | ) | ||||||||||||||||
Subtotal deferred income tax liabilities
|
(581,938 | ) | (33,346 | ) | (1,233 | ) | (211,416 | ) | - | (827,933 | ) | |||||||||||||
Deferred income tax Asset (Liability), net as of June 30, 2015
|
23,034 | (33,346 | ) | (1,233 | ) | 170,282 | (157,367 | ) | 1,370 | |||||||||||||||
Deferred income tax assets
|
328,191 | - | - | 276,781 | - | 604,972 | ||||||||||||||||||
Deferred income tax liabilities
|
(638,891 | ) | 33,346 | (14,948 | ) | 41,555 | - | (581,938 | ) | |||||||||||||||
Deferred income tax Asset (Liability), net as of June 30, 2014
|
(310,700 | ) | 33,346 | (17,948 | ) | 318,336 | - | 23,034 |
Jurisdiction
|
|||||||||||||
Date
of generation
|
Due date
|
Argentina
|
Uruguay
|
Total
|
|||||||||
2011
|
2016
|
32,694 | 903 | 33,597 | |||||||||
2012
|
2017
|
36,379 | 9,777 | 46,156 | |||||||||
2013
|
2018
|
21,084 | 1,093 | 22,177 | |||||||||
2014
|
2019
|
873,852 | 16,057 | 889,909 | |||||||||
2015
|
2020
|
18,287 | 4,336 | 22,623 | |||||||||
982,296 | 32,166 | 1,014,462 |
June 30,
2015
|
June 30,
2014
|
|||||||
Deferred income tax asset to be recovered after more than 12 months
|
542,456 | 514,692 | ||||||
Deferred income tax asset to be recovered within 12 months
|
286,847 | 90,280 | ||||||
Deferred income tax assets
|
829,303 | 604,972 | ||||||
June 30,
2015
|
June 30,
2014
|
|||||||
Deferred income tax liabilities to be recovered after more than 12 months
|
(711,529 | ) | (566,615 | ) | ||||
Deferred income tax liabilities to be recovered within 12 months
|
(116,404 | ) | (15,323 | ) | ||||
Deferred income tax liabilities
|
(827,933 | ) | (581,938 | ) | ||||
Total Deferred income tax assets, net
|
1,370 | 23,034 |
28.
|
Leases
|
June 30,
2015
|
June 30,
2014
|
June 30,
2013
|
||||||||||
No later than 1 year
|
10,674 | 10,714 | 7,855 | |||||||||
Later than one year and not later than five years
|
16,736 | 22,461 | 16,146 | |||||||||
Later than 5 years
|
34,800 | 37,200 | 39,884 | |||||||||
62,210 | 70,375 | 63,885 |
28.
|
Leases (Continued)
|
June 30,
2015
|
June 30,
2014
|
June 30,
2014
|
||||||||||
No later than 1 year
|
1,619 | 1,942 | 1,513 | |||||||||
Later than one year and not later than five years
|
1,352 | 1,112 | 1,279 | |||||||||
2,971 | 3,054 | 2,792 | ||||||||||
Finance charges
|
(236 | ) | (302 | ) | (279 | ) | ||||||
Present value of finance lease liabilities
|
2,735 | 2,752 | 2,513 |
June 30,
2015
|
June 30,
2014
|
June 30,
2014
|
||||||||||
No later than 1 year
|
1,512 | 1,780 | 1,243 | |||||||||
Later than one year and not later than five years
|
1,223 | 972 | 1,270 | |||||||||
Present value of finance lease liabilities
|
2,735 | 2,752 | 2,513 |
·
|
Leases of office and other buildings
|
28.
|
Leases (Continued)
|
·
|
Leases of shopping centers
|
June 30,
2015
|
June 30,
2014
|
|||||||
2015
|
- | 731,570 | ||||||
2016
|
982,335 | 522,764 | ||||||
2017
|
690,358 | 220,605 | ||||||
2018
|
322,625 | 58,600 | ||||||
2019
|
83,321 | 18,291 | ||||||
Later than 2019
|
23,989 | 14,420 | ||||||
2,102,628 | 1,566,250 |
29.
|
Shareholders' Equity
|
29.
|
Shareholders’ Equity (Continued)
|
30.
|
Revenues
|
June 30,
2015
|
June 30,
2014
|
June 30,
2013
|
||||||||||
Base rent
|
1,253,190 | 1,079,779 | 828,923 | |||||||||
Contingent rent
|
461,583 | 329,889 | 254,854 | |||||||||
Admission rights
|
156,438 | 126,495 | 107,608 | |||||||||
Averaging scheduled rent escalation
|
31,293 | 14,771 | 22,641 | |||||||||
Parking fees
|
112,120 | 81,382 | 62,484 | |||||||||
Letting fees
|
51,333 | 42,458 | 33,620 | |||||||||
Property management fee
|
33,784 | 27,121 | 21,803 | |||||||||
Others
|
9,376 | 12,202 | 9,051 | |||||||||
Rental and service income
|
2,109,117 | 1,714,097 | 1,340,984 | |||||||||
Sale of trading properties
|
9,860 | 62,641 | 24,867 | |||||||||
Revenue from hotel operations
|
396,297 | 331,562 | 225,836 | |||||||||
Consumer financing
|
147 | 574 | 1,203 | |||||||||
Total income from sales, rents and services
|
2,515,421 | 2,108,874 | 1,592,890 | |||||||||
Income from expenses adjustment and collective promotion fund
|
887,208 | 736,302 | 594,290 | |||||||||
Total revenues
|
3,402,629 | 2,845,176 | 2,187,180 |
31.
|
Costs
|
June 30,
2015
|
June 30,
2014
|
June 30,
2013
|
||||||||||
Costs of rental and services costs
|
1,219,046 | 1,120,634 | 906,233 | |||||||||
Cost of sale and development
|
13,588 | 17,506 | 12,188 | |||||||||
Costs from hotel operations
|
277,885 | 215,980 | 168,283 | |||||||||
Costs from consumer financing
|
55 | 373 | 907 | |||||||||
Total costs
|
1,510,574 | 1,354,493 | 1,087,611 |
32.
|
Expenses by nature
|
32.
|
Expenses by nature (Continued)
|
Group Costs
|
||||||||||||||||||||||||||||
Costs of sale and development
|
Costs of rental and services
|
Costs from consumer financing
|
Costs from hotel operations
|
General and administrative expenses
|
Selling expenses
|
Total
|
||||||||||||||||||||||
Salaries, social security costs and other personnel expenses
|
154 | 404,075 | - | 162,423 | 117,044 | 35,927 | 719,623 | |||||||||||||||||||||
Maintenance, security, cleaning, repair and others
|
6,560 | 326,024 | 9 | 33,984 | 19,837 | 2,019 | 388,433 | |||||||||||||||||||||
Depreciation and amortization
|
- | 156,922 | - | 11,578 | 6,493 | 288 | 175,281 | |||||||||||||||||||||
Advertising and others selling expenses
|
- | 173,266 | - | 6,556 | - | 34,529 | 214,351 | |||||||||||||||||||||
Taxes, rates and contributions
|
3,272 | 108,332 | - | 335 | 11,779 | 92,851 | 216,569 | |||||||||||||||||||||
Fees and payments for services
|
512 | 8,573 | 46 | 1,334 | 84,040 | 6,349 | 100,854 | |||||||||||||||||||||
Director´s fees
|
- | - | - | - | 98,691 | - | 98,691 | |||||||||||||||||||||
Food, beverage and other lodging expenses
|
- | - | - | 60,852 | 8,264 | 4,361 | 73,477 | |||||||||||||||||||||
Other expenses
|
25 | 24,490 | - | 539 | 24,469 | 1,255 | 50,778 | |||||||||||||||||||||
Leases and service charges
|
1,167 | 17,364 | - | 284 | 3,864 | 1,515 | 24,194 | |||||||||||||||||||||
Allowance for doubtful accounts and other receivables, net
|
- | - | - | - | - | 14,376 | 14,376 | |||||||||||||||||||||
Cost of sales of properties
|
1,898 | - | - | - | - | - | 1,898 | |||||||||||||||||||||
Total expenses by nature
|
13,588 | 1,219,046 | 55 | 277,885 | 374,481 | 193,470 | 2,078,525 |
32.
|
Expenses by nature (Continued)
|
Group Costs
|
||||||||||||||||||||||||||||
Costs of sale and development
|
Costs of rental and services
|
Costs from consumer financing
|
Costs from hotel operations
|
General and administrative expenses
|
Selling expenses
|
Total
|
||||||||||||||||||||||
Salaries, social security costs and other personnel expenses
|
168 | 362,055 | - | 121,332 | 98,775 | 27,356 | 609,686 | |||||||||||||||||||||
Maintenance, security, cleaning, repair and others
|
3,551 | 255,053 | 3 | 26,321 | 14,272 | 665 | 299,865 | |||||||||||||||||||||
Depreciation and amortization
|
707 | 209,302 | - | 10,819 | 4,757 | 234 | 225,819 | |||||||||||||||||||||
Advertising and others selling expenses
|
1 | 145,331 | - | 4,701 | - | 24,318 | 174,351 | |||||||||||||||||||||
Taxes, rates and contributions
|
2,299 | 86,996 | - | - | 9,961 | 70,870 | 170,126 | |||||||||||||||||||||
Fees and payments for services
|
66 | 28,762 | 368 | 2,347 | 56,605 | 5,127 | 93,275 | |||||||||||||||||||||
Director´s fees
|
- | - | - | - | 68,506 | - | 68,506 | |||||||||||||||||||||
Food, beverage and other lodging expenses
|
- | - | - | 49,792 | 6,726 | 3,753 | 60,271 | |||||||||||||||||||||
Other expenses
|
35 | 16,435 | 2 | 388 | 28,216 | 1,170 | 46,246 | |||||||||||||||||||||
Leases and service charges
|
1,404 | 16,700 | - | 280 | 9,110 | 1,117 | 28,611 | |||||||||||||||||||||
Allowance for doubtful accounts and other receivables, net
|
- | - | - | - | - | 11,626 | 11,626 | |||||||||||||||||||||
Cost of sales of properties
|
9,275 | - | - | - | - | - | 9,275 | |||||||||||||||||||||
Total expenses by nature
|
17,506 | 1,120,634 | 373 | 215,980 | 296,928 | 146,236 | 1,797,657 |
32.
|
Expenses by nature (Continued)
|
Group Costs
|
||||||||||||||||||||||||||||
Costs of sale and development
|
Costs of rental and services
|
Costs from consumer financing
|
Costs from hotel operations
|
General and administrative expenses
|
Selling expenses
|
Total
|
||||||||||||||||||||||
Salaries, social security costs and other personnel expenses
|
155 | 244,311 | 3 | 96,096 | 62,688 | 18,098 | 421,351 | |||||||||||||||||||||
Maintenance, security, cleaning, repair and others
|
2,747 | 226,208 | 38 | 21,754 | 11,769 | 691 | 263,207 | |||||||||||||||||||||
Depreciation and amortization
|
529 | 199,866 | - | 13,591 | 5,815 | 220 | 220,021 | |||||||||||||||||||||
Advertising and others selling expenses
|
- | 115,013 | - | 4,869 | 12 | 16,580 | 136,474 | |||||||||||||||||||||
Taxes, rates and contributions
|
1,500 | 68,982 | - | 263 | 7,585 | 50,925 | 129,255 | |||||||||||||||||||||
Fees and payments for services
|
237 | 29,390 | 858 | 1,301 | 30,753 | 3,525 | 66,064 | |||||||||||||||||||||
Director´s fees
|
- | - | - | - | 62,873 | - | 62,873 | |||||||||||||||||||||
Food, beverage and other lodging expenses
|
- | - | - | 29,643 | 2,900 | 680 | 33,223 | |||||||||||||||||||||
Other expenses
|
32 | 10,958 | 8 | 630 | 8,985 | 1,798 | 22,411 | |||||||||||||||||||||
Leases and service charges
|
1,774 | 11,505 | - | 136 | 1,461 | 783 | 15,659 | |||||||||||||||||||||
Allowance for doubtful accounts and other receivables, net
|
- | - | - | - | - | 12,825 | 12,825 | |||||||||||||||||||||
Cost of sales of properties
|
5,214 | - | - | - | - | - | 5,214 | |||||||||||||||||||||
Total expenses by nature
|
12,188 | 906,233 | 907 | 168,283 | 194,841 | 106,125 | 1,388,577 |
33.
|
Employee costs
|
June 30,
2015
|
June 30,
2014
|
June 30,
2013
|
||||||||||
Salaries, bonuses and social security expenses
|
670,063 | 496,922 | 389,740 | |||||||||
Costs of equity incentive plan
|
24,960 | 70,868 | 5,856 | |||||||||
Defined contribution plan costs
|
7,598 | 7,584 | 4,976 | |||||||||
Other employee costs and benefits
|
17,002 | 34,312 | 20,779 | |||||||||
Total employee costs
|
719,623 | 609,686 | 421,351 |
34.
|
Other operating results, net
|
June 30,
2015
|
June 30,
2014
|
June 30,
2013
|
||||||||||
Result from purchase of subsidiaries (Note 3)
|
- | - | 137,062 | |||||||||
Gain from disposal of equity interest in subsidiaries, associates and joint ventures (Note 3)
|
22,075 | - | 15,433 | |||||||||
Expenses from transfers of assets to IRSA CP (1)
|
(110,482 | ) | - | - | ||||||||
Reversal of currency translation adjustment (2)
|
188,323 | - | - | |||||||||
Tax on shareholders’ personal assets
|
(4,997 | ) | (3,831 | ) | (5,132 | ) | ||||||
Donations
|
(40,236 | ) | (32,779 | ) | (30,592 | ) | ||||||
Judgments and other contingencies (3)
|
(21,477 | ) | (19,666 | ) | (17,765 | ) | ||||||
Others
|
(4,718 | ) | 10,406 | (5,738 | ) | |||||||
Total other operating results, net
|
28,488 | (45,870 | ) | 93,268 |
35.
|
Financial results, net
|
June 30,
2015
|
June 30,
2014
|
June 30,
2013
|
||||||||||
Finance income:
|
||||||||||||
- Interest income
|
65,840 | 75,680 | 38,244 | |||||||||
- Foreign exchange
|
54,652 | 40,788 | 58,032 | |||||||||
- Dividends income
|
16,622 | 15,041 | 23,249 | |||||||||
Total finance income
|
137,114 | 131,509 | 119,525 |
35.
|
Financial results, net (Continued)
|
June 30,
2015
|
June 30,
2014
|
June 30,
2013
|
||||||||||
Finance costs:
|
||||||||||||
- Interest expense
|
(640,730 | ) | (492,864 | ) | (331,263 | ) | ||||||
- Foreign exchange
|
(407,888 | ) | (1,203,240 | ) | (407,473 | ) | ||||||
- Other financial costs
|
(71,512 | ) | (53,147 | ) | (43,983 | ) | ||||||
Finance cost
|
(1,120,130 | ) | (1,749,251 | ) | (782,719 | ) | ||||||
Less: Capitalized finance costs
|
12,957 | 22,376 | 10,307 | |||||||||
Total finance costs
|
(1,107,173 | ) | (1,726,875 | ) | (772,412 | ) | ||||||
Other financial results:
|
||||||||||||
- Fair value gain of financial assets and liabilities at fair value through profit or loss
|
52,060 | 215,430 | 1,396 | |||||||||
- (Loss) / Gain on derivative financial instruments, net
|
(16,167 | ) | (316,632 | ) | 11,242 | |||||||
- (Loss) / Gain on repurchase of Non-Convertible notes
|
- | (22,701 | ) | 2,057 | ||||||||
Total other financial results
|
35,893 | (123,903 | ) | 14,695 | ||||||||
Total financial results, net
|
(934,166 | ) | (1,719,269 | ) | (638,192 | ) |
36.
|
Earnings per share
|
(a)
|
Basic
|
June 30,
2015
|
June 30,
2014
|
June 30,
2013
|
||||||||||
Total comprehensive income attributable to equity holders of the parent
|
(41,193 | ) | (786,487 | ) | 238,737 | |||||||
Weighted average number of ordinary shares in issue
|
573,779 | 575,933 | 578,676 | |||||||||
Basic (loss) / earnings per share
|
(0.07 | ) | (1.37 | ) | 0.41 |
(b)
|
Diluted
|
June 30,
2015
|
June 30,
2014
|
|||||||
Total comprehensive income attributable to equity holders of the parent
|
(41,193 | ) | (786,487 | ) | ||||
Weighted average number of ordinary shares in issue
|
578,005 | 578,676 | ||||||
Diluted loss per share
|
(0.07 | ) | (1.37 | ) |
37.
|
Related party transactions
|
-
|
An entity, individual or close relative of such individual or legal entity exercises control, or joint control, or significant influence over the reporting entity, or is a member of the Board of Directors or the Senior Management of the entity or its controlling company.
|
-
|
An entity is a subsidiary, associate or joint venture of the entity or its controlling or controlled company.
|
1.
|
Remunerations of the Board of Directors
|
37.
|
Related party transactions (Continued)
|
2.
|
Senior Management remuneration
|
Name
|
Date of birth
|
Position
|
In the position since
|
Eduardo S. Elsztain
|
01/26/1960
|
General Manager
|
1991
|
Daniel R. Elsztain
|
12/22/1972
|
Chief Operations Officer of the real estate business
|
2012
|
Matias Gaivironsky
|
02/23/1976
|
Financial Manager
|
2011
|
David A. Perednik
|
11/15/1957
|
Administrative Manager
|
2002
|
Javier E. Nahmod
|
11/10/1977
|
Real Estate Manager
|
2014
|
3.
|
Corporate Service Agreement
|
37.
|
Related party transactions (Continued)
|
4.
|
Donations granted to Fundación IRSA
|
5.
|
Rentals and/or rights of use
|
(a)
|
Lease agreements, gratuitous bailment agreements or agreements for the use of space in shopping centers:
|
37.
|
Related party transactions (Continued)
|
5.
|
Leases and/or rights of use (Continued)
|
(a)
|
Lease agreements, gratuitous bailment agreements or agreements for the use of space in shopping centers: (Continued)
|
(b)
|
Rights of use granted to Fundación Museo de los Niños:
|
37.
|
Related party transactions (Continued)
|
5.
|
Leases and/or rights of use (Continued)
|
(c)
|
Office rental (the Group as lessee):
|
6.
|
Service provider or recipient:
|
(a)
|
Management Fee:
|
37.
|
Related party transactions (Continued)
|
6.
|
Service provider or recipient: (Continued)
|
(b)
|
Special reimbursement programs with several means of payment:
|
(c)
|
Legal services:
|
7.
|
Purchase and sale of goods and/or service hiring:
|
(a)
|
Sale of radio or TV advertising seconds and/or spaces in newspapers and magazines:
|
37.
|
Related party transactions (Continued)
|
7.
|
Purchase and sale of goods and/or service hiring: (Continued)
|
(b)
|
Sale of supplies and materials:
|
(c)
|
Reimbursement of expenses
|
(d)
|
Transfer of tax credits
|
8.
|
Financial operations:
|
(a)
|
Borrowings
|
(b)
|
Master agreement for US dollar-denominated forward transactions with Banco Hipotecario S.A.
|
37.
|
Related party transactions (Continued)
|
8.
|
Financial operations (Continued)
|
(c)
|
Purchase and sale of financial assets
|
37.
|
Related party transactions (Continued)
|
Related party
|
Description of transaction
|
Investments in financial assets non-current
|
Investments in financial assets current
|
Trade and other receivables
non-current
|
Trade and other receivables current
|
Trade and other payables
non-current
|
Trade and other payables
current
|
Borrowings
non-current
|
Borrowings current
|
Derivative financial instruments current
|
|||||||||||||||||||||||||||
Parent Company
|
|||||||||||||||||||||||||||||||||||||
Cresud S.A.C.I.F. y A.
|
Reimbursement of expenses
|
- | - | - | 12 | - | (9,789 | ) | - | - | - | ||||||||||||||||||||||||||
Corporate services
|
- | - | - | - | - | (52,534 | ) | - | - | - | |||||||||||||||||||||||||||
Sale of good and/or services
|
- | - | - | 216 | - | - | - | - | - | ||||||||||||||||||||||||||||
Management Fee
|
- | - | - | - | - | (12 | ) | - | - | - | |||||||||||||||||||||||||||
Leases and/or rights of use
|
- | - | - | 1,424 | - | - | - | - | - | ||||||||||||||||||||||||||||
Non-Convertible Notes
|
79,760 | 30,071 | - | - | - | - | (16,504 | ) | (743 | ) | - | ||||||||||||||||||||||||||
Long-term incentive plan
|
- | - | - | - | - | (8,087 | ) | - | - | - | |||||||||||||||||||||||||||
Share-based payments
|
- | - | - | - | - | (16,575 | ) | - | - | - | |||||||||||||||||||||||||||
Total Parent Company
|
79,760 | 30,071 | - | 1,652 | - | (86,997 | ) | (16,504 | ) | (743 | ) | - | |||||||||||||||||||||||||
Associates
|
|||||||||||||||||||||||||||||||||||||
Banco Hipotecario S.A.
|
Reimbursement of expenses
|
- | - | - | - | - | (97 | ) | - | - | - | ||||||||||||||||||||||||||
Advances
|
- | - | - | - | - | (1,428 | ) | - | - | - | |||||||||||||||||||||||||||
Borrowings
|
- | - | - | - | - | - | (7,499 | ) | (21,804 | ) | - | ||||||||||||||||||||||||||
Commissions per stands
|
- | - | - | 68 | - | - | - | - | - | ||||||||||||||||||||||||||||
Leases and/or rights of use
|
- | - | - | 762 | - | - | - | - | - | ||||||||||||||||||||||||||||
Lipstick Management LLC
|
Reimbursement of expenses
|
- | - | - | 854 | - | - | - | - | - | |||||||||||||||||||||||||||
Metropolitan
|
Reimbursement of expenses
|
- | - | - | - | - | (10 | ) | - | - | - | ||||||||||||||||||||||||||
New Lipstick LLC
|
Reimbursement of expenses
|
- | - | - | 2,567 | - | - | - | - | - | |||||||||||||||||||||||||||
Non-Convertible Notes
|
100,000 | 452 | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||
Banco de Crédito y Securitización S.A.
|
Reimbursement of expenses
|
- | - | - | 1,766 | - | - | - | - | - | |||||||||||||||||||||||||||
Leases and/or rights of use
|
- | - | - | 42 | - | - | - | - | - | ||||||||||||||||||||||||||||
Reimbursement of expenses
|
- | - | - | 1,79 | - | - | - | - | - | ||||||||||||||||||||||||||||
Tarshop S.A.
|
Leases and/or rights of use
|
- | - | - | - | (25 | ) | (722 | ) | - | - | - | |||||||||||||||||||||||||
Condor
|
Borrowings
|
- | - | - | 29,492 | - | - | - | - | - | |||||||||||||||||||||||||||
Total Associates
|
100,000 | 452 | - | 37,341 | (25 | ) | -2,257 | (7,499 | ) | (21,804 | ) | - |
Related party
|
Description of transaction
|
Investments in financial assets non-current
|
Investments in financial assets current
|
Trade and other receivables
non-current
|
Trade and other receivables current
|
Trade and other payables
non-current
|
Trade and other payables
current
|
Borrowings
non-current
|
Borrowings current
|
Derivative financial instruments current
|
|||||||||||||||||||||||||||
Joint Ventures
|
|||||||||||||||||||||||||||||||||||||
Contributions to be paid in
|
- | - | - | 10 | - | - | - | - | - | ||||||||||||||||||||||||||||
Baicom Networks S.A.
|
Management fees
|
- | - | - | 16 | - | - | - | - | - | |||||||||||||||||||||||||||
Borrowings
|
- | - | 1,275 | 222 | - | - | - | - | - | ||||||||||||||||||||||||||||
Reimbursement of expenses
|
- | - | - | 924 | - | - | - | - | - | ||||||||||||||||||||||||||||
Entertainment Holding S.A.
|
Reimbursement of expenses
|
- | - | - | 211 | - | - | - | - | - | |||||||||||||||||||||||||||
Borrowings
|
- | - | - | 72 | - | - | - | - | - | ||||||||||||||||||||||||||||
Entretenimiento Universal S.A.
|
Reimbursement of expenses
|
- | - | - | 115 | - | - | - | - | - | |||||||||||||||||||||||||||
Borrowings
|
- | - | - | 80 | - | - | - | - | - | ||||||||||||||||||||||||||||
Cyrsa S.A.
|
Borrowings
|
- | - | - | - | - | - | (14,438 | ) | - | - | ||||||||||||||||||||||||||
Credit due to capital reduction
|
- | - | - | 8,847 | - | - | - | - | - | ||||||||||||||||||||||||||||
Reimbursement of expenses
|
- | - | - | 11 | - | (19 | ) | - | - | - | |||||||||||||||||||||||||||
Nuevo Puerto Santa Fe S.A.
|
Reimbursement of expenses
|
- | - | - | 543 | - | (5 | ) | - | - | - | ||||||||||||||||||||||||||
Proceeds from leasing
|
- | - | - | - | - | (4 | ) | - | - | - | |||||||||||||||||||||||||||
Share-based payments
|
- | - | - | 467 | - | - | - | - | - | ||||||||||||||||||||||||||||
Leases and/or rights of use
|
- | - | - | - | - | (594 | ) | - | - | - | |||||||||||||||||||||||||||
Borrowings
|
- | - | - | - | - | - | - | (7,826 | ) | - | |||||||||||||||||||||||||||
Management fees
|
- | - | - | 2,644 | - | - | - | - | - | ||||||||||||||||||||||||||||
Puerto Retiro S.A.
|
Borrowings
|
- | - | - | 2,148 | - | - | - | - | - | |||||||||||||||||||||||||||
Reimbursement of expenses
|
- | - | - | 257 | - | - | - | - | - | ||||||||||||||||||||||||||||
Quality Invest S.A.
|
Management fees
|
- | - | - | 22 | - | - | - | - | - | |||||||||||||||||||||||||||
Reimbursement of expenses
|
- | - | - | 233 | - | - | - | - | - | ||||||||||||||||||||||||||||
Total Joint Ventures
|
- | - | 1,275 | 16,822 | - | (622 | ) | (14,438 | ) | (7,826 | ) | - |
Related party
|
Description of transaction
|
Investments in financial assets non-current
|
Investments in financial assets current
|
Trade and other receivables
non-current
|
Trade and other receivables current
|
Trade and other payables
non-current
|
Trade and other payables current
|
Borrowings
non-current
|
Borrowings current
|
Derivative financial instruments current
|
|||||||||||||||||||||||||||
Subsidiaries of the parent company
|
|||||||||||||||||||||||||||||||||||||
Helmir
|
Non-Convertible Notes
|
- | - | - | - | - | - | (27,544 | ) | (1,254 | ) | - | |||||||||||||||||||||||||
Exportaciones Agroindustriales
|
Other liabilities
|
- | - | - | - | - | (3,0649 | ) | - | - | - | ||||||||||||||||||||||||||
Futuros y Opciones.com S.A.
|
Reimbursement of expenses
|
- | - | - | 123 | - | (29 | ) | - | - | - | ||||||||||||||||||||||||||
FyO Trading S.A.
|
Reimbursement of expenses
|
- | - | - | 1 | - | - | - | - | - | |||||||||||||||||||||||||||
Total Subsidiaries of the parent company
|
- | - | - | 124 | - | (3,093 | ) | (27,544 | ) | (1,254 | ) | - | |||||||||||||||||||||||||
Other related parties
|
|||||||||||||||||||||||||||||||||||||
Consultores Asset Management S.A.
|
Reimbursement of expenses
|
- | - | - | 5,215 | - | - | - | - | - | |||||||||||||||||||||||||||
Estudio Zang, Bergel y Viñes
|
Advances
|
- | - | - | 33 | - | - | - | - | - | |||||||||||||||||||||||||||
Legal services
|
- | - | - | 377 | - | (900 | ) | - | - | - | |||||||||||||||||||||||||||
Austral Gold
|
Reimbursement of expenses
|
- | - | - | 3 | - | - | - | - | - | |||||||||||||||||||||||||||
Consultores Venture Capital Uruguay
|
- | - | - | 1,125 | - | - | - | - | - | ||||||||||||||||||||||||||||
Ogden Argentina S.A.
|
Reimbursement of expenses
|
- | - | - | 250 | - | - | - | - | - | |||||||||||||||||||||||||||
Borrowings
|
- | - | - | 724 | - | - | - | - | - | ||||||||||||||||||||||||||||
Elsztain Managing Partners
|
Management fees
|
- | - | - | - | - | (34 | ) | - | - | - | ||||||||||||||||||||||||||
Reimbursement of expenses
|
- | - | - | 100 | - | - | - | - | - | ||||||||||||||||||||||||||||
Fundación IRSA
|
|||||||||||||||||||||||||||||||||||||
Inversiones Financieras del Sur
|
Borrowings
|
- | - | - | 264,673 | - | - | - | - | - | |||||||||||||||||||||||||||
Museo de los Niños
|
Reimbursement of expenses
|
- | - | - | 94 | - | - | - | - | - | |||||||||||||||||||||||||||
Leases and/or rights of use
|
- | - | - | 750 | - | - | - | - | - | ||||||||||||||||||||||||||||
Boulevard Norte S.A.
|
Reimbursement of expenses
|
- | - | - | 881 | - | - | - | - | - | |||||||||||||||||||||||||||
Borrowings
|
- | - | - | 5 | - | - | - | - | - | ||||||||||||||||||||||||||||
Total Other related parties
|
- | - | - | 274,23 | - | (934 | ) | - | - | - |
Related party
|
Description of transaction
|
Investments in financial assets non-current
|
Investments in financial assets current
|
Trade and other receivables
non-current
|
Trade and other receivables current
|
Trade and other payables
non-current
|
Trade and other payables
current
|
Borrowings
non-current
|
Borrowings current
|
Derivative financial instruments current
|
|||||||||||||||||||||||||||
Directors and Senior Management
|
|||||||||||||||||||||||||||||||||||||
Directors
|
Reimbursement of expenses
|
- | - | - | - | - | (15 | ) | - | - | - | ||||||||||||||||||||||||||
Advances
|
- | - | - | 317 | - | - | - | - | - | ||||||||||||||||||||||||||||
Fees
|
- | - | - | - | - | (40,554 | ) | - | - | - | |||||||||||||||||||||||||||
Guarantee deposits
|
- | - | - | - | (20 | ) | - | - | - | - | |||||||||||||||||||||||||||
Total Directors and Senior Management
|
- | - | - | 317 | (20 | ) | (40,569 | ) | - | - | - | ||||||||||||||||||||||||||
Total
|
179,76 | 30,523 | 1,275 | 330,486 | (45 | ) | -134,472 | (65,985 | ) | (31,627 | ) | - |
Related party
|
Description of transaction
|
Investments in financial assets non-current
|
Investments in financial assets current
|
Trade and other receivables
non-current
|
Trade and other receivables current
|
Trade and other payables
non-current
|
Trade and other payables
current
|
Borrowings
non-current
|
Borrowings current
|
Derivative financial instruments current
|
|||||||||||||||||||||||||||
Parent Company
|
|||||||||||||||||||||||||||||||||||||
Cresud S.A.C.I.F. y A.
|
Reimbursement of expenses
|
- | - | - | 16 | - | (3,723 | ) | - | - | - | ||||||||||||||||||||||||||
Corporate services
|
- | - | - | - | - | (33,710 | ) | - | - | - | |||||||||||||||||||||||||||
Sale of good and/or services
|
- | - | - | 701 | - | - | - | - | - | ||||||||||||||||||||||||||||
Dividends payable
|
- | - | - | - | - | (36,462 | ) | - | - | - | |||||||||||||||||||||||||||
Leases and/or rights of use
|
- | - | - | 1,598 | - | - | - | - | - | ||||||||||||||||||||||||||||
Non-Convertible Notes
|
- | 14,079 | - | - | - | - | (56,972 | ) | (2,023 | ) | - | ||||||||||||||||||||||||||
Long-term incentive plan
|
- | - | - | - | - | (10,557 | ) | - | - | - | |||||||||||||||||||||||||||
Share-based payments
|
- | - | - | - | - | (3,673 | ) | - | - | - | |||||||||||||||||||||||||||
Total Parent Company
|
- | 14,079 | - | 2,315 | - | (88,125 | ) | (56,972 | ) | (2,023 | ) | - | |||||||||||||||||||||||||
Associates
|
|||||||||||||||||||||||||||||||||||||
Banco Hipotecario S.A.
|
Reimbursement of expenses
|
- | - | - | - | - | (1,547 | ) | - | - | |||||||||||||||||||||||||||
Borrowings
|
- | - | - | - | - | - | (17,781 | ) | (23,285 | ) | |||||||||||||||||||||||||||
Derivatives
|
- | - | - | - | - | - | - | - | (5,225 | ) | |||||||||||||||||||||||||||
Leases and/or rights of use
|
- | - | - | 200 | - | - | - | - | - | ||||||||||||||||||||||||||||
Commissions per stands
|
- | - | - | 59 | - | - | - | - | - | ||||||||||||||||||||||||||||
Lipstick Management LLC
|
Reimbursement of expenses
|
- | - | - | 765 | - | - | - | - | - | |||||||||||||||||||||||||||
New Lipstick LLC
|
Reimbursement of expenses
|
- | - | - | 2,297 | - | - | - | - | - | |||||||||||||||||||||||||||
Banco de Crédito y Securitización S.A.
|
Leases and/or rights of use
|
- | - | - | 19 | - | (80 | ) | - | - | - | ||||||||||||||||||||||||||
Tarshop S.A.
|
Leases and/or rights of use
|
- | - | - | - | (175 | ) | (677 | ) | - | - | - | |||||||||||||||||||||||||
Reimbursement of expenses
|
- | - | - | 687 | - | - | - | - | - | ||||||||||||||||||||||||||||
Commissions per stands
|
- | - | - | 19 | - | - | - | - | - | ||||||||||||||||||||||||||||
Condor
|
Dividends received
|
- | - | - | 11,296 | - | - | - | - | - | |||||||||||||||||||||||||||
Total Associates
|
- | - | - | 15,342 | (175 | ) | (2,304 | ) | (17,781 | ) | (23,285 | ) | (5,225 | ) |
Related party
|
Description
|
Investments in financial assets
|
Investments in financial assets current
|
Trade and other receivables
non-current
|
Trade and other receivables
current
|
Trade and other payables
non-current
|
Trade and other payables
current
|
Borrowings non-current
|
Borrowings current
|
Derivative financial instruments current
|
|||||||||||||||||||||||||||
Joint Ventures
|
|||||||||||||||||||||||||||||||||||||
Contributions to be paid in
|
- | - | - | 10 | - | - | - | - | - | ||||||||||||||||||||||||||||
Baicom Networks S.A.
|
Management fees
|
- | - | - | 2 | - | - | - | - | - | |||||||||||||||||||||||||||
Borrowings
|
- | - | 1,143 | - | - | - | - | - | - | ||||||||||||||||||||||||||||
Reimbursement of expenses
|
- | - | - | 193 | - | - | - | - | - | ||||||||||||||||||||||||||||
Entertainment Holding S.A.
|
Reimbursement of expenses
|
- | - | - | 165 | - | - | - | - | - | |||||||||||||||||||||||||||
Borrowings
|
- | - | - | 20 | - | - | - | - | - | ||||||||||||||||||||||||||||
Entretenimiento Universal S.A.
|
Reimbursement of expenses
|
- | - | - | 103 | - | - | - | - | - | |||||||||||||||||||||||||||
Borrowings
|
- | - | - | 68 | - | - | - | - | - | ||||||||||||||||||||||||||||
Boulevard Norte S.A.
|
Reimbursement of expenses
|
- | - | - | 864 | - | - | - | - | - | |||||||||||||||||||||||||||
Borrowings
|
- | - | - | 4 | - | - | - | - | - | ||||||||||||||||||||||||||||
Cyrsa S.A.
|
Borrowings
|
- | - | - | - | - | - | (133,314 | ) | - | - | ||||||||||||||||||||||||||
Reimbursement of expenses
|
- | - | - | 66 | - | (9 | ) | - | - | - | |||||||||||||||||||||||||||
Nuevo Puerto Santa Fe S.A.
|
Reimbursement of expenses
|
- | - | - | 223 | - | (72 | ) | - | - | - | ||||||||||||||||||||||||||
Proceeds from leasing
|
- | - | - | - | - | (18 | ) | - | - | - | |||||||||||||||||||||||||||
Leases and/or rights of use
|
- | - | - | - | - | (630 | ) | - | - | - | |||||||||||||||||||||||||||
Management fees
|
- | - | - | 1,338 | - | - | - | - | - | ||||||||||||||||||||||||||||
Share-based payments
|
- | - | - | 304 | - | - | - | - | - | ||||||||||||||||||||||||||||
Borrowings
|
- | - | - | - | - | - | - | (71 | ) | - | |||||||||||||||||||||||||||
Puerto Retiro S.A.
|
Contributions to be paid in
|
- | - | - | 160 | - | - | - | - | - | |||||||||||||||||||||||||||
Borrowings
|
- | - | - | 3,23 | - | - | - | - | - | ||||||||||||||||||||||||||||
Reimbursement of expenses
|
- | - | - | 213 | - | - | - | - | - | ||||||||||||||||||||||||||||
Quality Invest S.A.
|
Management fees
|
- | - | - | 22 | - | (45 | ) | - | - | - | ||||||||||||||||||||||||||
Reimbursement of expenses
|
- | - | - | 64 | - | - | - | - | - | ||||||||||||||||||||||||||||
Total Joint Ventures
|
- | - | 1,143 | 7,049 | - | (774 | ) | (133,314 | ) | (71 | ) | - |
Related party
|
Description of transaction
|
Investments in financial assets
non-current
|
Investments in financial assets current
|
Trade and other receivables non-current
|
Trade and other receivables
current
|
Trade and other payables
non-current
|
Trade and other payables current
|
Borrowings
non-current
|
Borrowings current
|
Derivative financial instruments current
|
|||||||||||||||||||||||||||
Subsidiaries of the parent company
|
|||||||||||||||||||||||||||||||||||||
Cactus Argentina S.A.
|
Reimbursement of expenses
|
- | - | - | 2 | - | (515 | ) | - | - | - | ||||||||||||||||||||||||||
Exportaciones Agroindustriales
|
Borrowings
|
- | - | - | 2,134 | - | - | - | - | - | |||||||||||||||||||||||||||
Futuros y Opciones.com S.A.
|
Reimbursement of expenses
|
- | - | - | 138 | - | (29 | ) | - | - | - | ||||||||||||||||||||||||||
FyO Trading S.A.
|
Reimbursement of expenses
|
- | - | - | 1 | - | - | - | - | - | |||||||||||||||||||||||||||
Total Subsidiaries of the parent company
|
- | - | - | 2,275 | - | (544 | ) | - | - | - | |||||||||||||||||||||||||||
Other related parties
|
|||||||||||||||||||||||||||||||||||||
Consultores Asset Management S.A.
|
Reimbursement of expenses
|
- | - | - | 14,378 | - | (11,099 | ) | - | - | - | ||||||||||||||||||||||||||
Estudio Zang, Bergel y Viñes
|
Advances
|
- | - | - | 4 | - | - | - | - | - | |||||||||||||||||||||||||||
Legal services
|
- | - | - | - | - | (513 | ) | - | - | - | |||||||||||||||||||||||||||
Austral Gold
|
Reimbursement of expenses
|
- | - | - | 8 | - | (1 | ) | - | - | - | ||||||||||||||||||||||||||
Ogden Argentina S.A.
|
Reimbursement of expenses
|
- | - | - | 228 | - | - | - | - | - | |||||||||||||||||||||||||||
Borrowings
|
- | - | - | 4 | - | - | - | - | - | ||||||||||||||||||||||||||||
EMP
|
Management fees
|
- | - | - | - | - | (31 | ) | - | - | - | ||||||||||||||||||||||||||
Fundación IRSA
|
Reimbursement of expenses
|
- | - | - | 72 | - | - | - | - | - | |||||||||||||||||||||||||||
IRSA Real Estate Strategies LP
|
Capital contribution
|
- | - | - | - | - | (8 | ) | - | - | - | ||||||||||||||||||||||||||
Inversiones Financieras del Sur S.A.
|
Borrowings
|
- | - | - | 378 | - | (5 | ) | - | - | - | ||||||||||||||||||||||||||
IRSA Developments LP
|
Capital contribution
|
- | - | - | - | - | (13 | ) | - | - | - | ||||||||||||||||||||||||||
Museo de los Niños
|
Reimbursement of expenses
|
- | - | - | 767 | - | (9 | ) | - | - | - | ||||||||||||||||||||||||||
Total Other related parties
|
- | - | - | 15,839 | - | (11,679 | ) | - | - | - | |||||||||||||||||||||||||||
Directors and Senior Management
|
|||||||||||||||||||||||||||||||||||||
Directors
|
Fees
|
- | - | - | 301 | - | (13,225 | ) | - | - | - | ||||||||||||||||||||||||||
Reimbursement of expenses
|
- | - | - | - | - | (10 | ) | - | - | - | |||||||||||||||||||||||||||
Guarantee deposits
|
- | - | - | - | (20 | ) | - | - | - | - | |||||||||||||||||||||||||||
Total Directors and Senior Management
|
- | - | - | 301 | (20 | ) | (13,235 | ) | - | - | - | ||||||||||||||||||||||||||
Total
|
- | 14,079 | 1,143 | 43,121 | (195 | ) | (116,661 | ) | (208,067 | ) | (25,379 | ) | (5,225 | ) |
37.
|
Related party transactions (Continued)
|
Related party
|
Leases and/or rights
of use
|
Management
fees
|
Corporate
services
|
Legal
services
|
Financial operations
|
Donations
|
Fees and salaries
|
Letting fees
|
||||||||||||||||||||||||
Parent Company
|
||||||||||||||||||||||||||||||||
Cresud S.A.C.I.F. y A.
|
4,286 | (110 | ) | (96,323 | ) | - | (8,424 | ) | - | - | - | |||||||||||||||||||||
Total Parent Company
|
4,286 | (110 | ) | (96,323 | ) | - | (8,424 | ) | - | - | - | |||||||||||||||||||||
Associates
|
||||||||||||||||||||||||||||||||
Banco Hipotecario S.A.
|
2,105 | - | - | - | (132 | ) | - | - | 5 | |||||||||||||||||||||||
Banco de Crédito y Securitización S.A.
|
4,459 | - | - | - | 452 | - | - | - | ||||||||||||||||||||||||
Tarshop S.A.
|
9,120 | - | - | - | - | - | - | 72 | ||||||||||||||||||||||||
Total Associates
|
15,684 | - | - | - | 320 | - | - | 77 | ||||||||||||||||||||||||
Joint Ventures
|
||||||||||||||||||||||||||||||||
Baicom Networks S.A.
|
- | 12 | - | - | 150 | - | - | - | ||||||||||||||||||||||||
Cyrsa S.A.
|
- | - | - | - | (9,176 | ) | - | - | - | |||||||||||||||||||||||
Nuevo Puerto Santa Fe S.A.
|
(712 | ) | 2,164 | - | - | (1,400 | ) | - | - | - | ||||||||||||||||||||||
Entretenimiento Universal S.A.
|
- | - | - | - | 13 | - | - | - | ||||||||||||||||||||||||
Entertainment Holding S.A.
|
- | - | - | - | 12 | - | - | - | ||||||||||||||||||||||||
Puerto Retiro S.A.
|
- | - | - | - | 563 | - | - | - | ||||||||||||||||||||||||
Quality Invest S.A.
|
- | 216 | - | - | - | - | - | - | ||||||||||||||||||||||||
Total Joint Ventures
|
(712 | ) | 2,392 | - | - | (9,838 | ) | - | - | - | ||||||||||||||||||||||
Subsidiaries Cresud S.A.C.I.F. y A.
|
||||||||||||||||||||||||||||||||
Exportaciones Agroindustriales Argentinas
|
- | - | - | - | 133 | - | - | - | ||||||||||||||||||||||||
Total Subsidiaries Cresud S.A.C.I.F. y A.
|
- | - | - | - | 133 | - | - | - | ||||||||||||||||||||||||
Other related parties
|
||||||||||||||||||||||||||||||||
Estudio Zang, Bergel & Viñes
|
- | - | - | (3,872 | ) | - | - | - | - | |||||||||||||||||||||||
Isaac Elsztain e Hijos S.C.A.
|
(486 | ) | - | - | - | - | - | - | - | |||||||||||||||||||||||
Consultores Asset Management S.A.
|
342 | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Boulevard Norte S.A.
|
- | - | - | - | 1 | - | - | - | ||||||||||||||||||||||||
Ogden Argentina S.A.
|
- | - | - | - | 20 | - | - | - | ||||||||||||||||||||||||
Fundación IRSA
|
- | - | - | - | - | (4,731 | ) | - | - | |||||||||||||||||||||||
Hamonet S.A.
|
(254 | ) | - | - | - | - | - | - | - | |||||||||||||||||||||||
Inversiones Financieras del Sur S.A.
|
- | - | - | - | 221,966 | - | - | - | ||||||||||||||||||||||||
Condor
|
- | - | - | - | 161,002 | - | - | - | ||||||||||||||||||||||||
Total Other related parties
|
(398 | ) | - | - | (3,872 | ) | 382,989 | (4,731 | ) | - | - | |||||||||||||||||||||
Directors and Senior Management
|
||||||||||||||||||||||||||||||||
Directors
|
- | - | - | - | - | - | (99,379 | ) | - | |||||||||||||||||||||||
Senior Management
|
- | - | - | - | - | - | (5,583 | ) | - | |||||||||||||||||||||||
Total Directors and Senior Management
|
- | - | - | - | - | - | (104,962 | ) | - | |||||||||||||||||||||||
Total
|
18,860 | 2,282 | (96,323 | ) | (3,872 | ) | 365,180 | (4,731 | ) | (104,962 | ) | 77 |
37.
|
Related party transactions (Continued)
|
Related party
|
Leases and/or rights
of use
|
Management fees
|
Corporate services
|
Legal services
|
Financial operations
|
Donations
|
Fees and salaries
|
|||||||||||||||||||||
Parent Company
|
||||||||||||||||||||||||||||
Cresud S.A.C.I.F. y A.
|
2,111 | - | (95,951 | ) | - | (50,245 | ) | - | - | |||||||||||||||||||
Total Parent Company
|
2,111 | - | (95,951 | ) | - | (50,245 | ) | - | - | |||||||||||||||||||
Associates
|
||||||||||||||||||||||||||||
Banco Hipotecario S.A.
|
560 | - | - | - | 26,453 | - | - | |||||||||||||||||||||
Banco de Crédito y Securitización S.A.
|
1,544 | - | - | - | - | - | - | |||||||||||||||||||||
Tarshop S.A.
|
8,172 | (239 | ) | - | - | - | - | - | ||||||||||||||||||||
Total Associates
|
10,276 | (239 | ) | - | - | 26,453 | - | - | ||||||||||||||||||||
Joint Ventures
|
||||||||||||||||||||||||||||
Baicom Networks S.A.
|
- | 12 | - | - | 136 | - | - | |||||||||||||||||||||
Cyrsa S.A.
|
- | - | - | - | (20,897 | ) | - | - | ||||||||||||||||||||
Nuevo Puerto Santa Fe S.A.
|
(632 | ) | 1,124 | - | - | - | - | - | ||||||||||||||||||||
Puerto Retiro S.A.
|
- | - | - | - | 917 | - | - | |||||||||||||||||||||
Quality Invest S.A.
|
- | 216 | - | - | - | - | - | |||||||||||||||||||||
Total Joint Ventures
|
(632 | ) | 1,352 | - | - | (19,844 | ) | - | - | |||||||||||||||||||
Other related parties
|
||||||||||||||||||||||||||||
Estudio Zang, Bergel & Viñes
|
- | - | - | (3,541 | ) | - | - | - | ||||||||||||||||||||
Fundación IRSA
|
- | - | - | - | - | (3,325 | ) | - | ||||||||||||||||||||
Isaac Elsztain e Hijos S.C.A.
|
(506 | ) | - | - | - | - | - | - | ||||||||||||||||||||
Consultores Asset Management S.A.
|
- | 230 | - | - | - | - | - | |||||||||||||||||||||
Hamonet S.A.
|
(258 | ) | - | - | - | - | - | - | ||||||||||||||||||||
Inversiones Financieras del Sur S.A.
|
- | - | - | - | 321 | - | - | |||||||||||||||||||||
Total Other related parties
|
(764 | ) | 230 | - | (3,541 | ) | 321 | (3,325 | ) | - | ||||||||||||||||||
Directors and Senior Management
|
||||||||||||||||||||||||||||
Senior Management
|
- | - | - | - | - | - | (11,533 | ) | ||||||||||||||||||||
Directors
|
- | - | - | - | - | - | (68,506 | ) | ||||||||||||||||||||
Total Directors and Senior Management
|
- | - | - | - | - | - | (80,039 | ) | ||||||||||||||||||||
Total
|
10,991 | 1,343 | (95,951 | ) | (3,541 | ) | (43,315 | ) | (3,325 | ) | (80,039 | ) |
Related party
|
Leases and/or rights of use
|
Management fees
|
Corporate services
|
Legal services
|
Financial operations
|
Donations
|
Fees and salaries
|
|||||||||||||||||||||
Parent Company
|
||||||||||||||||||||||||||||
Cresud S.A.C.I.F. y A.
|
- | - | (88,941 | ) | - | 6,998 | - | - | ||||||||||||||||||||
Total Parent Company
|
- | - | (88,941 | ) | - | 6,998 | - | - | ||||||||||||||||||||
Associates
|
||||||||||||||||||||||||||||
Banco Hipotecario S.A.
|
453 | - | - | - | (1,377 | ) | - | - | ||||||||||||||||||||
Tarshop S.A.
|
5,991 | 301 | - | - | - | - | - | |||||||||||||||||||||
Total Associates
|
6,444 | 301 | - | - | (1,377 | ) | - | - | ||||||||||||||||||||
Joint Ventures
|
||||||||||||||||||||||||||||
Baicom Networks S.A.
|
- | - | - | - | 96 | - | - | |||||||||||||||||||||
Canteras Natal Crespo S.A.
|
- | 96 | - | - | 11 | - | - | |||||||||||||||||||||
Cyrsa S.A.
|
- | - | - | - | (8,724 | ) | - | - | ||||||||||||||||||||
Nuevo Puerto Santa Fe S.A.
|
(111 | ) | 888 | - | - | - | - | - | ||||||||||||||||||||
Puerto Retiro S.A.
|
- | - | - | - | 481 | - | - | |||||||||||||||||||||
Quality Invest S.A.
|
- | 216 | - | - | (28 | ) | - | - | ||||||||||||||||||||
Total Joint Ventures
|
(111 | ) | 1,200 | - | - | (8,164 | ) | - | - | |||||||||||||||||||
Other related parties
|
||||||||||||||||||||||||||||
Estudio Zang, Bergel & Viñes
|
- | - | - | (2,784 | ) | - | - | - | ||||||||||||||||||||
Fundación IRSA
|
- | - | - | - | - | (1,420 | ) | - | ||||||||||||||||||||
Isaac Elsztain e Hijos S.C.A.
|
(372 | ) | - | - | - | - | - | - | ||||||||||||||||||||
Hamonet S.A.
|
(178 | ) | - | - | - | - | - | - | ||||||||||||||||||||
Inversiones Financieras del Sur S.A.
|
- | - | - | - | 155 | - | - | |||||||||||||||||||||
Total Other related parties
|
(550 | ) | - | - | (2,784 | ) | 155 | (1,420 | ) | - | ||||||||||||||||||
Directors and Senior Management
|
||||||||||||||||||||||||||||
Senior Management
|
- | - | - | - | - | - | (6,905 | ) | ||||||||||||||||||||
Directors
|
- | - | - | - | - | - | (55,968 | ) | ||||||||||||||||||||
Total Directors and Senior Management
|
- | - | - | - | - | - | (62,873 | ) | ||||||||||||||||||||
Total
|
5,783 | 1,501 | (88,941 | ) | (2,784 | ) | (2,388 | ) | (1,420 | ) | (62,873 | ) |
38.
|
Barters transactions
|
38.
|
Barter transactions (Continued)
|
38.
|
Barter transactions (Continued)
|
Exhibit A - Property, plant and equipment
|
Note 10 Investment properties and Note 11 Property, plant and equipment
|
Exhibit B - Intangible assets
|
Note 13 Intangible assets
|
Exhibit C - Equity investments
|
Note 8 - Interest in joint ventures and Note 9 - Interest in associates
|
Exhibit D - Other investments
|
Note 15 Financial instruments by category
|
Exhibit E – Provisions
|
Note 17 Trading and other receivables and Note 23 Provisions
|
Exhibit F - Cost of sales and services provided
|
Note 12 Trading properties
|
Exhibit G - Foreign currency assets and liabilities
|
Note 40 Foreign currency assets and liabilities
|
40.
|
Foreign currency assets and liabilities
|
Items (3)
|
Amount of foreign currency (1)
|
Exchange rate
prevailing (2)
|
Total as of
06.30.15
|
Amount of foreign currency (1)
|
Exchange rate
prevailing (2)
|
Total as of
06.30.14
|
||||||||||||||||||
Assets
|
||||||||||||||||||||||||
Trade and other receivables
|
||||||||||||||||||||||||
US Dollar
|
10,979 | 8.988 | 98,681 | 5,952 | 8.033 | 47,811 | ||||||||||||||||||
Swiss francs
|
- | 9.608 | - | 27 | 9.051 | 242 | ||||||||||||||||||
Euros
|
- | 10.005 | 3 | 2 | 10.991 | 26 | ||||||||||||||||||
Uruguayan Pesos
|
1,122 | 0.334 | 375 | 1,100 | 0.356 | 392 | ||||||||||||||||||
New Israel Shekel
|
15,005 | 2.381 | 35,726 | - | - | - | ||||||||||||||||||
Receivables with related parties:
|
||||||||||||||||||||||||
US Dollar
|
4,053 | 9.088 | 36,830 | 1,993 | 8.133 | 16,208 | ||||||||||||||||||
Total trade and other receivables
|
171,615 | 64,679 | ||||||||||||||||||||||
Investments in financial assets
|
||||||||||||||||||||||||
US Dollar
|
26,618 | 8.988 | 239,246 | 35,240 | 8.033 | 283,083 | ||||||||||||||||||
Pounds
|
721 | 14.134 | 10,196 | 1,021 | 13.913 | 14,206 | ||||||||||||||||||
New Israel Shekel
|
2,672 | 2.381 | 6,361 | 5 | 2.377 | 13 | ||||||||||||||||||
Investments with related parties:
|
||||||||||||||||||||||||
US Dollar
|
50,472 | 9.088 | 458,685 | - | 8.133 | - | ||||||||||||||||||
Total investments in financial assets
|
714,488 | 297,302 | ||||||||||||||||||||||
Derivative financial instruments
|
||||||||||||||||||||||||
US Dollar
|
- | 8.988 | - | |||||||||||||||||||||
New Israel Shekel
|
95,936 | 2.381 | 228,415 | 4,622 | 2.377 | 10,986 | ||||||||||||||||||
Total derivative financial instruments
|
228,415 | 10,986 | ||||||||||||||||||||||
Cash and cash equivalents
|
||||||||||||||||||||||||
US Dollar
|
33,541 | 8.988 | 301,463 | 15,147 | 8.033 | 121,674 | ||||||||||||||||||
Euros
|
109 | 10.005 | 1,094 | 116 | 10.991 | 1,278 | ||||||||||||||||||
Brazilian Reais
|
12 | 3.000 | 35 | 2 | 3.550 | 6 | ||||||||||||||||||
Swiss francs
|
- | 8.720 | 1 | - | 9.051 | 1 | ||||||||||||||||||
Uruguayan Pesos
|
24 | 0.334 | 8 | 90 | 0.356 | 32 | ||||||||||||||||||
New Israel Shekel
|
968 | 2.381 | 2,304 | 116,210 | 2.377 | 276,235 | ||||||||||||||||||
Pounds
|
2 | 14.134 | 32 | 2 | 13.913 | 32 | ||||||||||||||||||
Total cash and cash equivalents
|
304,937 | 399,258 | ||||||||||||||||||||||
Total assets as of 06.30.15
|
1,419,455 | |||||||||||||||||||||||
Total assets as of 06.30.14
|
772,225 | |||||||||||||||||||||||
Liabilities
|
||||||||||||||||||||||||
Trade and other payables
|
||||||||||||||||||||||||
US Dollar
|
8,347 | 9.088 | 75,862 | 13,637 | 8.133 | 110,908 | ||||||||||||||||||
Swiss francs
|
- | 9.728 | - | - | - | - | ||||||||||||||||||
Uruguayan Pesos
|
63 | 0.335 | 21 | 1,486 | 0.382 | 567 | ||||||||||||||||||
Payables with related parties:
|
||||||||||||||||||||||||
US Dollar
|
32 | 9.088 | 289 | 1,506 | 8.133 | 12,248 | ||||||||||||||||||
Total trade and other payables
|
76,172 | 123,723 | ||||||||||||||||||||||
Borrowings
|
||||||||||||||||||||||||
US Dollar
|
402,796 | 9.088 | 3,660,607 | 426,670 | 8.133 | 3,470,110 | ||||||||||||||||||
Borrowings with related parties:
|
||||||||||||||||||||||||
US Dollar
|
4,518 | 9.088 | 41,057 | - | 8.133 | - | ||||||||||||||||||
Total borrowings
|
3,701,664 | 3,470,110 | ||||||||||||||||||||||
Derivative financial instruments
|
||||||||||||||||||||||||
New Israel Shekel
|
208,825
|
2.407 |
502,641
|
134,980 | 2.377 | 320,847 | ||||||||||||||||||
Total derivative financial instruments
|
502,641 | 320,847 | ||||||||||||||||||||||
Provisions
|
||||||||||||||||||||||||
US Dollar
|
10 | 9.088 | 91 | 200 | 8.133 | 1,627 | ||||||||||||||||||
Total provisions
|
91 | 1,627 | ||||||||||||||||||||||
Payroll and social security liabilities
|
||||||||||||||||||||||||
Uruguayan Pesos
|
587 | 0.335 | 197 | - | - | - | ||||||||||||||||||
Total salaries and social security liabilities
|
197 | - | ||||||||||||||||||||||
Total liabilities as of 06.30.15
|
4,280,765
|
|||||||||||||||||||||||
Total liabilities as of 06.30.14
|
3,916,307 |
41.
|
CNV General Ruling N° 629/14 – Storage of documentation
|
Storage of documentation responsible
|
Location
|
Iron Mountain Argentina S.A.
|
Av. Amancio Alcorta 2482, C.A.B.A.
|
Iron Mountain Argentina S.A.
|
Pedro de Mendoza 2143, C.A.B.A.
|
Iron Mountain Argentina S.A.
|
Saraza 6135, C.A.B.A.
|
Iron Mountain Argentina S.A.
|
Azara 1245, C.A.B.A. (i)
|
Iron Mountain Argentina S.A.
|
Polígono Industrial Spegazzini, Au. Ezeiza-Cañuelas KM 45
|
Iron Mountain Argentina S.A.
|
Cañada de Gomez 3825, C.A.B.A.
|
42.
|
Group of assets and liabilities held for sale
|
42.
|
Group of assets held for sale (Continued)
|
06.30.14 | ||||
Investment properties
|
1,098,990 | |||
Intangible assets – Goodwill
|
77,086 | |||
Restricted assets
|
163,501 | |||
Trade and other receivables
|
17,990 | |||
Derivative financial instruments
|
299 | |||
Total
|
1,357,866 |
06.30.14 | ||||
Trade and other liabilities
|
170,245 | |||
Deferred income tax liabilities
|
33,346 | |||
Borrowings
|
603,021 | |||
Total
|
806,612 |
43.
|
Negative working capital
|
44.
|
Subsequent events
|
44.
|
Subsequent Events (continued)
|
44.
|
Subsequent Events (continued)
|
-
|
The termination or expiration of the Proposal to IDBD and DIC would not repeal the commitments undertaken by Dolphin under the proposal submitted by Dolphin to IDBD on May 6, 2015 (described in Note 9 to these financial statements) always provided that such commitments continued in full force and effect subject to the proposed terms, or Dolphin’s remaining commitment to inject NIS 8.5 million in IDBD pursuant to its irrevocable proposal dated December 29, 2014.
|
-
|
A further condition would be added to the Proposal to IDBD and DIC whereby if Dolphin’s interest in the rights public offering were lower than NIS 8.5 million, Dolphin would remain obliged vis-à-vis IDBD to inject the remaining amount arising from subtracting NIS 8.5 million and the amount effectively injected at this instance by Dolphin.
|
44.
|
Subsequent Events (continued)
|
-
|
IDBD would replace its commitment to exercise DIC’s Series 1 warrants for NIS 92.5 million with the commitment to exercise the Series 1 warrants for at least the amount that results from subtracting (a) the Capital Contribution Amount (as defined in Note 9 to these financial statements); minus (b) NIS 100 million, always provided that such amount does not exceed NIS 92.5 million.
|
-
|
Dolphin agrees that the new shares to be acquired by Dolphin or any entity controlled by Eduardo Sergio Elsztain under the public offering of shares to be made by IDBD during October 2015 (as disclosed in note 3 to these Financial Statements) would not grant to it the right to participate in the Tender Offer (as such term is defined in note 3 to these Financial Statements) always provided that such new shares are still held by Dolphin or an entity controlled by Eduardo Sergio Elsztain. Notwithstanding, nothing will prevent Dolphin and/or the entity controlled by Eduardo Sergio Elsztain that holds such new shares to be acquired under the public offering to be made in October 2015 by IDBD from freely disposing of them.
|
44.
|
Subsequent Events (continued)
|
-
|
Replacement of the obligation to carry out Tender Offers for a total of NIS 512 million with the obligation by Dolphin and ETH (and/or their related parties) to inject NIS 512 million in IDBD against the issuance of bonds. The NIS 512 million would be injected in two tranches of NIS 256 million each (the “First Tranche” and the “Second Tranche”, respectively).
|
·
|
The First Tranche would be completed by December 31, 2015, and against its injection IDBD would issue in favor of such investors other than Dolphin, ETH and/or any of their related parties (the “Minority Investors”) bonds for a principal amount of NIS 256 million, by reopening Series 9 (“Series 9”), or by issuing a new series of bonds under terms and conditions replicating those of Series 9 (“IDBD’s New Bonds”).
|
·
|
The Second Tranche would be completed by January 31, 2016 and against its injection the Minority Investors would receive IDBD’s New Bonds for a principal amount of NIS 256 million.
|
·
|
Following the exercise of the First Tranche and Second Tranche, Minority Investors would deliver 64 million shares to the obligors under the Tender Offer.
|
·
|
In addition, on January 31, 2016, Dolphin and ETH (or any of their related parties) would purchase the remaining shares held by the Minority Investors for a total of NIS 90 million, payable on that same date.
|
-
|
If the sale of Clal is consummated, IDBD will carry out a partial bond repurchase offering at par value among all series of bonds.
|
-
|
The Trustees’ Proposal would be carried out before IDBD launches a new issuance of shares or rights or, alternatively, each new share or right issued would not be part of the proposal as submitted.
|
-
|
The Trustees’ Proposal has not been already approved by the Minority Investors; and such approval would be sought after the proposal is accepted by IDBD, Dolphin and ETH.
|
44.
|
Subsequent Events (continued)
|
-
|
The shares held by Dolphin and any other company controlled by Eduardo S. Elsztain are not entitled to participate as offerees in the Tender Offers
|
-
|
the shares held or that were held by Dolphin and/or by companies controlled by Mr. Elsztain and which were transferred or will be transferred by them to other parties, will not be entitled to participate in the Tender Offers
|
-
|
These remedies will not apply to shares which were acquired from the minority shareholders within the framework of the trade in the stock exchange and which came into the possession of IFISA.
|
44.
|
Subsequent Events (continued)
|
44.
|
Subsequent Events (continued)
|
44.
|
Subsequent Events (continued)
|
•
|
eliminate the limitation that bans RES from holding more than 34% of issued and outstanding ordinary shares;
|
•
|
eliminate the obligation to exchange preferred shares Series B if a person or group holds more than 35% of voting shares of Condor; and
|
•
|
Authorize the issuance of non-voting ordinary shares.
|
Price Waterhouse & Co. S.R.L. | |||
|
By:
|
/s/ Marcelo Trama | |
Name Marcelo Trama | |||
Title Partner | |||
June 30,
|
||||||||
2015
|
2014
|
|||||||
ASSETS
|
||||||||
Cash and due from banks
|
Ps. | 492,233 | Ps. | 610,106 | ||||
Banks and correspondents
|
2,709,342 | 2,398,062 | ||||||
3,201,575 | 3,008,168 | |||||||
Government and corporate securities (Note 4)
|
5,271,583 | 3,395,192 | ||||||
Loans (Note 5)
|
||||||||
Mortgage loans
|
2,413,401 | 2,197,336 | ||||||
Credit card loans
|
8,500,601 | 5,950,266 | ||||||
Other loans
|
8,334,879 | 7,277,967 | ||||||
19,248,881 | 15,425,569 | |||||||
Plus: Accrued interest receivable
|
218,089 | 150,676 | ||||||
Less: Allowance for loan losses (Note 6)
|
(433,825 | ) | (356,267 | ) | ||||
19,033,145 | 15,219,978 | |||||||
Other receivables from financial transactions (Note 7)
|
||||||||
Collateral receivable under repurchase agreements
|
35,621 | 60,196 | ||||||
Amounts receivable under derivative financial instruments
|
4,785 | 45,817 | ||||||
Loans in trust pending securitization
|
10,301 | 10,776 | ||||||
Amounts receivable under reverse repurchase agreements of government and corporate securities
|
94,597 | 498,000 | ||||||
Other (Note 7)
|
3,247,013 | 1,961,678 | ||||||
3,392,317 | 2,576,467 | |||||||
Plus: Accrued interest receivable
|
8,440 | 8,165 | ||||||
Less: Allowance for Other receivables from financial transactions
|
(22,611 | ) | (11,189 | ) | ||||
3,378,146 | 2,573,443 | |||||||
Assets under financial leases
|
125,461 | 71,907 | ||||||
Investments in other companies
|
70,806 | 19,241 | ||||||
Miscellaneous receivables (Note 8)
|
1,559,217 | 1,117,890 | ||||||
Bank premises and equipment (Note 9)
|
186,320 | 150,489 | ||||||
Miscellaneous assets (Note 10)
|
60,413 | 50,483 | ||||||
Intangible assets (Note 11)
|
426,148 | 244,540 | ||||||
Items pending allocation
|
8,542 | 4,254 | ||||||
Total Assets
|
Ps. | 33,321,356 | Ps. | 25,855,585 |
June 30
|
||||||||
2015
|
2014
|
|||||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
LIABILITIES
|
||||||||
Deposits
|
||||||||
Checking accounts
|
Ps. 3,151,296
|
Ps. 2,800,899
|
||||||
Saving accounts
|
2,953,065 | 1,662,444 | ||||||
Time deposits
|
11,898,186 | 9,049,574 | ||||||
Other deposit accounts
|
188,604 | 178,426 | ||||||
18,191,151 | 13,691,343 | |||||||
Plus: Accrued interest payable
|
237,680 | 215,811 | ||||||
18,428,831 | 13,907,154 | |||||||
Other liabilities from financial transactions
|
||||||||
Other banks and international entities (Note 14)
|
297,357 | 558,449 | ||||||
Bonds (Note 15)
|
4,926,694 | 3,501,712 | ||||||
Argentine Central Bank
|
115 | 81 | ||||||
Amounts payable under derivative financial instruments
|
334,874 | 300,099 | ||||||
Borrowings under repurchase agreements collateralized by government securities
|
93,660 | 384,117 | ||||||
Obligation to return securities acquired under reverse repurchase agreements of government and corporate securities (Note 13)
|
34,481 | 140,804 | ||||||
Other
|
1,867,191 | 1,083,892 | ||||||
7,554,372 | 5,969,154 | |||||||
Plus: Accrued interest payable
|
135,471 | 97,156 | ||||||
7,689,843 | 6,066,310 | |||||||
Miscellaneous liabilities
|
||||||||
Taxes
|
326,154 | 352,988 | ||||||
Sundry creditors (Note 20)
|
1,468,191 | 724,210 | ||||||
Other (Note 20)
|
272,415 | 178,649 | ||||||
2,066,760 | 1,255,847 | |||||||
Reserve for contingencies (Note 12)
|
221,950 | 152,789 | ||||||
Subordinated bonds (Note 16)
|
100,452 | - | ||||||
Items pending allocation
|
44,847 | 208,293 | ||||||
Non-controlling interest
|
67,957 | 59,849 | ||||||
Total Liabilities
|
28,620,640 | 21,650,242 | ||||||
SHAREHOLDERS' EQUITY
|
||||||||
Common stock
|
1,463,365 | 1,463,365 | ||||||
Treasury stock
|
54,149 | 54,149 | ||||||
Paid in capital
|
834 | 834 | ||||||
Inflation adjustment on common stock
|
699,601 | 699,601 | ||||||
Reserves
|
1,842,198 | 1,292,226 | ||||||
Retained earnings
|
640,569 | 695,168 | ||||||
Total Shareholders' Equity
|
4,700,716 | 4,205,343 | ||||||
Total Liabilities and Shareholders' Equity
|
Ps. 33,321,356
|
Ps. 25,855,585
|
June 30,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Financial income
|
||||||||||||
Interest on loans and other receivables from financial transactions
|
Ps. | 4,326,324 | Ps. | 3,779,073 | Ps. | 1,961,272 | ||||||
Income from government and corporate securities.
|
1,191,396 | 904,985 | 456,004 | |||||||||
Other
|
6,250 | 12,186 | 6,906 | |||||||||
5,523,970 | 4,696,244 | 2,424,182 | ||||||||||
Financial expenses
|
||||||||||||
Interest on deposits and other liabilities from financial transactions
|
2,801,201 | 2,063,512 | 1,120,480 | |||||||||
Contributions and taxes on financial income
|
442,814 | 339,676 | 163,794 | |||||||||
3,244,015 | 2,403,188 | 1,284,274 | ||||||||||
Gross brokerage margin
|
Ps. | 2,279,955 | Ps. | 2,293,056 | Ps. | 1,139,908 | ||||||
Provision for loan losses (Note 6)
|
375,270 | 303,348 | 233,376 | |||||||||
Income from services
|
||||||||||||
Insurance premiums
|
1,255,436 | 895,129 | 417,368 | |||||||||
Commissions (Note 21)
|
1,295,325 | 866,616 | 670,213 | |||||||||
Other (Note 21)
|
733,262 | 356,153 | 307,398 | |||||||||
3,284,023 | 2,117,898 | 1,394,979 | ||||||||||
Expenses for services
|
||||||||||||
Insurance claims
|
149,871 | 174,715 | 57,583 | |||||||||
Commissions (Note 21)
|
540,542 | 446,257 | 194,064 | |||||||||
Contributions and taxes on income from services
|
78,457 | 61,666 | 39,261 | |||||||||
768,870 | 682,638 | 290,908 | ||||||||||
Administrative expenses
|
||||||||||||
Salaries and social security contributions
|
1,775,548 | 1,284,840 | 844,965 | |||||||||
Advertising expenses
|
179,542 | 118,277 | 88,538 | |||||||||
Value added tax and other taxes
|
167,249 | 113,917 | 115,353 | |||||||||
Directors’ and Syndics’ fees
|
65,788 | 71,027 | 31,774 | |||||||||
Fees for administrative services
|
406,690 | 258,668 | 189,428 | |||||||||
Maintenance and repairs
|
96,821 | 53,981 | 37,186 | |||||||||
Electricity and communications
|
116,907 | 71,942 | 56,515 | |||||||||
Depreciation of bank premises and equipment
|
35,267 | 20,992 | 15,830 | |||||||||
Rent
|
97,482 | 69,774 | 49,895 | |||||||||
Other
|
425,595 | 277,361 | 182,718 | |||||||||
3,366,889 | 2,340,779 | 1,612,202 | ||||||||||
Net income from financial transactions
|
Ps. | 1,052,949 | Ps. | 1,084,189 | Ps. | 398,401 |
June 30,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Miscellaneous income
|
||||||||||||
Penalty interest
|
86,874 | 59,281 | 54,833 | |||||||||
Loans recoveries
|
171,781 | 82,104 | 100,834 | |||||||||
Other (Note 22)
|
58,875 | 47,543 | 37,755 | |||||||||
317,530 | 188,928 | 193,422 | ||||||||||
Miscellaneous expenses
|
||||||||||||
Provision for other contingencies and miscellaneous receivables
|
132,614 | 67,564 | 31,058 | |||||||||
Other (Note 22)
|
336,720 | 220,430 | 130,966 | |||||||||
469,334 | 287,994 | 162,024 | ||||||||||
Income before income taxes and Non-controlling interest
|
Ps. | 901,145 | Ps. | 985,123 | Ps. | 429,799 | ||||||
Income taxes (Note 24)
|
377,613 | 369,127 | 76,529 | |||||||||
Non-controlling interest
|
13,658 | 11,031 | (14,148 | ) | ||||||||
Net income for the period
|
Ps. | 537,190 | Ps. | 627,027 | Ps. | 339,122 |
Reserves | ||||||||||||||||||||||||||
Common stock (Note 26) | Paid in capital (Note 26) | Treasury stock (Note 26) | Inflation adjustment of common stock (Note 26) |
Legal
(Note 26)
|
Voluntary
(Note 26)
|
Retained earnings | Total shareholders' equity | |||||||||||||||||||
Balance as of June 30, 2012
|
Ps. | 1,463,365 | Ps. | 834 | Ps. | 54,149 | Ps. | 699,601 | Ps. | 526,828 | Ps. | 367,601 | Ps. | 256,816 | Ps. | 3,369,194 | ||||||||||
Distribution of retained earnings approved by the General Shareholders’ Meeting held on 04/13/11. Approval of BCRA on 09/20/12
|
- | - | - | - | - | - | (100,000 | ) | (100,000 | ) | ||||||||||||||||
Net income for the period
|
- | - | - | - | - | - | 339,122 | 339,122 | ||||||||||||||||||
Balance as of June 30, 2013
|
Ps. | 1,463,365 | Ps. | 834 | Ps. | 54,149 | Ps. | 699,601 | Ps. | 526,828 | Ps. | 367,601 | Ps. | 495,938 | Ps. | 3,608,316 | ||||||||||
Distribution of retained earnings approved by the General Shareholders’ Meeting held on 08/23/13
|
- | - | - | - | 68,721 | 244,886 | (343,607 | ) | (30,000 | ) | ||||||||||||||||
Distribution of retained earnings approved by the General Shareholders’ Meeting held on 04/24/14
|
- | - | - | - | 84,190 | - | (84,190 | ) | - | |||||||||||||||||
Net income for the period
|
- | - | - | - | - | - | 627,027 | 627,027 | ||||||||||||||||||
Balance as of June 30, 2014
|
Ps. | 1,463,365 | Ps. | 834 | Ps. | 54,149 | Ps. | 699,601 | Ps. | 679,739 | Ps. | 612,487 | Ps. | 695,168 | Ps. | 4,205,343 | ||||||||||
Distribution of retained earnings approved by the General Shareholders’ Meeting held on 04/24/14. Approval of BCRA on 12/23/14
|
- | - | - | - | - | - | (41,817 | ) | (41,817 | ) | ||||||||||||||||
Distribution of retained earnings approved by the General Shareholders’ Meeting held on 03/21/15.
|
- | - | - | - | 109,994 | 439,978 | (549,972 | ) | - | |||||||||||||||||
Net income for the period
|
- | - | - | - | - | - | 537,190 | 537,190 | ||||||||||||||||||
Balance as of June 30, 2015
|
Ps. | 1,463,365 | Ps. | 834 | Ps. | 54,149 | Ps. | 699,601 | Ps. | 789,733 | Ps. | 1,052,465 | Ps. | 640,569 | Ps. | 4,700,716 |
2015
|
2014
|
2013
|
||||||||||
Cash flows from operating activities:
|
||||||||||||
Net income
|
Ps. | 537,190 | Ps. | 627,027 | Ps. | 339,122 | ||||||
Adjustments to reconcile net income to net cash provided by Cash Flows from operating activities:
|
||||||||||||
Provision for loan losses and for contingencies and miscellaneous receivables, net of reversals
|
258,567 | 273,423 | 163,600 | |||||||||
Net gain on investment government securities
|
(179,430 | ) | (89,484 | ) | (8,802 | ) | ||||||
Gain / (loss) on derivative financial instruments
|
(63 | ) | - | (46 | ) | |||||||
Depreciation and amortization
|
114,799 | 66,103 | 39,152 | |||||||||
Net gain on sale of premises and equipment and miscellaneous assets
|
(578 | ) | (2,944 | ) | (1,160 | ) | ||||||
Net Indexing (CER and CVS) and interest of loans and deposits incurred but not paid
|
(177,558 | ) | (19,112 | ) | (127,277 | ) | ||||||
Non-controlling interest
|
(13,658 | ) | (11,031 | ) | 14,148 | |||||||
Net change in trading securities
|
1,269,136 | (858,189 | ) | 907,867 | ||||||||
Net change in other assets
|
(2,850,499 | ) | (661,376 | ) | (136,396 | ) | ||||||
Net change in other liabilities
|
1,179,439 | 1,391,036 | (482,324 | ) | ||||||||
Net cash (used in) operating activities
|
137,345 | 715,453 | 707,884 | |||||||||
Cash flows from investing activities:
|
||||||||||||
(Increase)/Decrease in loans, net
|
(4,502,150 | ) | (5,780,425 | ) | (2,692,773 | ) | ||||||
Proceeds from securitization of consumer loans
|
401,331 | 749,589 | 380,415 | |||||||||
Proceeds from maturities of available for sale securities
|
808,876 | 81,100 | 345,961 | |||||||||
Purchases of investments in other companies
|
(45,000 | ) | (10,013 | ) | (5,012 | ) | ||||||
Proceeds from sales, net of payments for purchases, of available for sale securities
|
(2,082,693 | ) | (1,166,729 | ) | 25,697 | |||||||
Proceeds from sale of premises and equipment
|
8,491 | 1,874 | 1,029 | |||||||||
Purchases of premises and equipment, miscellaneous and intangible assets
|
(350,659 | ) | (212,026 | ) | (117,240 | ) | ||||||
Net cash provided by investing activities
|
(5,761,804 | ) | (6,336,630 | ) | (2,061,923 | ) | ||||||
Cash flows from financing activities:
|
||||||||||||
Increase in deposits, net
|
4,499,808 | 4,792,123 | 2,093,107 | |||||||||
Principal payments on bonds, notes, and other debts
|
(626,754 | ) | (853,108 | ) | (584,601 | ) | ||||||
Proceeds from issuance of bonds, notes and other debts
|
1,934,019 | 1,435,183 | 653,781 | |||||||||
Payments of debt issuance cost
|
(19,406 | ) | (12,855 | ) | (8,425 | ) | ||||||
Distribution of dividends
|
(41,817 | ) | (29,968 | ) | (99,895 | ) | ||||||
(Decrease)/Increase in borrowings, net
|
(23,518 | ) | 806,185 | 89,175 | ||||||||
Net cash provided by financing activities
|
5,722,332 | 6,137,560 | 2,143,142 | |||||||||
Net increase/(decrease) in cash and cash equivalents
|
97,873 | 516,383 | 789,103 | |||||||||
Cash and cash equivalents at the beginning of the period
|
3,008,168 | 2,217,327 | 1,352,474 | |||||||||
Effect of foreign exchange changes on cash and cash equivalents
|
95,534 | 274,458 | 75,750 | |||||||||
Cash and cash equivalents at the end of the period
|
Ps. | 3,201,575 | Ps. | 3,008,168 | Ps. | 2,217,327 | ||||||
Supplemental disclosure of cash flow information:
|
||||||||||||
Cash paid for interest
|
Ps. | 2,525,829 | Ps. | 1,555,976 | Ps. | 939,573 | ||||||
Cash paid for presumptive minimum income tax and income tax.
|
343,504 | 113,576 | 71,481 | |||||||||
Non-cash transactions involving securitizations
|
151,576 | 165,249 | 87,925 |
1.
|
General
|
June 30,
|
||||||||
Issuing Company
|
2015
|
2014
|
||||||
BHN Sociedad de Inversión Sociedad Anónima
|
99.99 | % | 99.99 | % | ||||
BHN Seguros Generales Sociedad Anónima
|
99.99 | % | 99.99 | % | ||||
BHN Vida Sociedad Anónima
|
99.99 | % | 99.99 | % | ||||
BACS Banco de Crédito y Securitización Sociedad Anónima
|
87.50 | % | 87.50 | % | ||||
BACS Administradora de activos S.A. S.G.F.C.I.
|
85.00 | % | 85.00 | % | ||||
Tarshop S.A. (*)
|
80.00 | % | 80.00 | % | ||||
BH Valores SA
|
100.00 | % | 100.00 | % |
Buildings
|
50 years
|
Furniture and fixtures
|
10 years
|
Machinery and equipment
|
5 years
|
Other
|
5 years
|
June 30,
|
||||||||
2015
|
2014
|
|||||||
BACS Banco de Crédito y Securitización S.A.
|
Ps. | 32,536 | Ps. | 28,383 | ||||
BHN Sociedad de Inversión S.A.
|
74 | 63 | ||||||
Tarshop S.A.
|
35,347 | 31,403 | ||||||
Total
|
Ps. | 67,957 | Ps. | 59,849 |
a.
|
Capital stock, treasury shares, non-capitalized contributions, reserves, and capital adjustment:
|
b.
|
Results:
|
June 30,
|
||||||||
2015
|
2014
|
|||||||
Banco Hipotecario S.A.
|
||||||||
Securities issued by the BCRA as collateral for OCT transactions
|
Ps. | 70,464 | Ps. | - | ||||
Government securities as collateral for OCT transactions
|
40,200 | 275,370 | ||||||
Deposits in pesos as collateral for visa credit card transactions
|
117,723 | 59,610 | ||||||
Securities issued by the BCRA as collateral for the custody of securities
|
162,759 | - | ||||||
Government securities as collateral for the custody of securities.
|
- | 173,600 | ||||||
Deposits in pesos and in U$S as collateral for leases
|
754 | 1,028 | ||||||
Ps. | 391,900 | Ps. | 509,608 | |||||
Tarshop S.A.
|
||||||||
Deposits in pesos and in U$S as collateral for leases
|
Ps. | 505 | Ps. | 497 | ||||
Certificates of participation in Financial Trusts granted as commercial pledge for a loan received
|
32,203 | 32,202 | ||||||
Time deposits pledged for tax obligations arising from Financial Trusts
|
4,891 | 3,736 | ||||||
Deposits in pesos related to Financial Trusts transactions
|
16,182 | 24,542 | ||||||
Receivable in trust to secure a syndicated loan received
|
- | 83,229 | ||||||
Deposits in pesos as collateral for visa credit card transactions
|
512 | - | ||||||
Government securities as collateral for visa credit card transactions
|
1,038 | - | ||||||
Ps. | 55,331 | Ps. | 144,206 | |||||
BACS Banco de Crédito y Securitización S.A.
|
||||||||
Deposits in pesos as collateral for repurchase agreements
|
Ps. | - | Ps. | 4,170 | ||||
Ps. | - | Ps. | 4,170 | |||||
BH Valores S.A.
|
||||||||
Mercado de Valores de Buenos Aires SA’s share pledged on behalf of Chubb Argentina de Seguros SA.
|
Ps. | 4,000 | Ps. | 4,000 | ||||
Total
|
Ps. | 451,231 | Ps. | 661,984 |
June 30,
|
||||||||
2015
|
2014
|
|||||||
Holding booked at fair value
|
||||||||
Government securities in pesos
|
Ps. | 1,581,383 | Ps. | 439,798 | ||||
Government securities in US$
|
340,053 | 844,014 | ||||||
Bills issued by Provincial Governments in US$
|
297,137 | - | ||||||
Bills issued by Provincial Governments in pesos
|
7,133 | - | ||||||
Ps. | 2,225,706 | Ps. | 1,283,812 | |||||
Holding booked at cost plus return
|
||||||||
Government securities in pesos
|
Ps. | - | Ps. | 29,275 | ||||
Bills issued by Provincial Governments in pesos
|
66,916 | - | ||||||
Bills issued by Provincial Governments in US$
|
125,862 | 39,573 | ||||||
Ps. | 192,778 | Ps. | 68,848 | |||||
Investment in listed corporate securities
|
||||||||
Corporate securities denominated in pesos
|
Ps. | 430,855 | Ps. | 345,565 | ||||
Ps. | 430,855 | Ps. | 345,565 | |||||
Securities issued by the BCRA
|
||||||||
Quoted bills and notes issued by the BCRA
|
Ps. | 672,239 | Ps. | 354,542 | ||||
Unquoted bills and notes issued by the BCRA
|
1,750,005 | 1,342,425 | ||||||
Ps. | 2,422,244 | Ps. | 1,696,967 | |||||
Total
|
Ps. | 5,271,583 | Ps. | 3,395,192 |
·
|
Mortgage loans:
|
·
|
Construction project loans - loans made to various entities for the construction of housing units
|
·
|
Individual residential mortgage loans - mortgage loans made to individuals to finance the acquisition, construction, completion, enlargement, and/or remodeling of their homes
|
·
|
Other loans:
|
·
|
Certain financial and non-financial sector loans including loans to credit card holders and to individuals
|
·
|
Public Loans – loans to National Government and Provinces
|
June,
|
||||||||
2015
|
2014
|
|||||||
Non-financial public sector
|
Ps. | 89,132 | Ps. | 129,023 | ||||
Financial sector
|
348,549 | 373,078 | ||||||
Non-financial private sector
|
||||||||
With preferred guarantees (a)
|
2,413,401 | 2,197,328 | ||||||
Without preferred guarantees
|
||||||||
Personal loans
|
2,650,127 | 2,040,282 | ||||||
Credit Card Loans
|
8,500,601 | 5,950,266 | ||||||
Overdraft facilities
|
685,978 | 1,139,629 | ||||||
Other loans (b)
|
4,561,093 | 3,595,963 | ||||||
Accrued interest receivable
|
218,089 | 150,676 | ||||||
Reserve for loan losses (see note 6)
|
(433,825 | ) | (356,267 | ) | ||||
Total
|
Ps. | 19,033,145 | Ps. | 15,219,978 |
(a)
|
Preferred guarantees include first priority mortgages or pledges, cash, gold or public sector bond collateral, certain collateral held in trust, or certain guarantees by the Argentine government.
|
(b)
|
Comprised of:
|
June 30,
|
||||||||
2015
|
2014
|
|||||||
Short term loans in pesos
|
Ps. | 2,729,892 | Ps. | 2,256,595 | ||||
Short term loans in US dollars
|
692,190 | 693,809 | ||||||
Loans for the financing of manufacturers
|
61,234 | 24,805 | ||||||
Export prefinancing
|
406,621 | 278,720 | ||||||
Other loans
|
671,156 | 342,034 | ||||||
Total
|
Ps. | 4,561,093 | Ps. | 3,595,963 |
June 30,
|
||||||||
2015
|
2014
|
|||||||
Balance at beginning of period
|
Ps. | 356,267 | Ps. | 296,633 | ||||
Provision charged to income
|
375,270 | 303,348 | ||||||
Loans charged off
|
(297,712 | ) | (243,714 | ) | ||||
Balance at end of period
|
Ps. | 433,825 | Ps. | 356,267 |
June 30,
|
||||||||
2015
|
2014
|
|||||||
Preferred guarantees, including deposits with the
|
||||||||
Argentine Central Bank
|
Ps. | 434,689 | Ps. | 507,836 | ||||
Unsecured guarantees (a)
|
2,966,068 | 2,076,796 | ||||||
Subtotal
|
3,400,757 | 2,584,632 | ||||||
Less: Allowance for losses
|
(22,611 | ) | (11,189 | ) | ||||
Total
|
Ps. | 3,378,146 | Ps. | 2,573,443 |
June 30,
|
||||||||
2015
|
2014
|
|||||||
Subordinated bonds (a)
|
Ps. | 1,452,436 | Ps. | 424,548 | ||||
Certificates of participation (see note 19)
|
388,250 | 330,855 | ||||||
Bonds held in the Bank’s portfolio (b)
|
- | 46,036 | ||||||
Bonds unquoted
|
192,621 | 333,330 | ||||||
Collateral for OTC transactions
|
114,034 | 275,370 | ||||||
Amounts receivable from spot and forward sales pending settlement
|
524,785 | 202,617 | ||||||
Other
|
574,887 | 348,922 | ||||||
Total
|
Ps. | 3,247,013 | Ps. | 1,961,678 |
June 30,
|
||||||||
2015
|
2014
|
|||||||
Withholdings, credits and prepaid income tax
|
Ps. | 33,812 | Ps. | 21,569 | ||||
Recoverable expenses, taxes, and advances to third parties
|
60,935 | 58,414 | ||||||
Attachments for non-restructured ON
|
7,526 | 8,703 | ||||||
Guarantee deposit (*)
|
171,891 | 179,296 | ||||||
Guarantee deposit for credit card transactions
|
117,723 | 59,610 | ||||||
Presumptive minimum income – Credit tax (see note 25)
|
61,561 | 183,668 | ||||||
Receivables from master servicing activities
|
787 | 899 | ||||||
Other Directors fees
|
13,749 | 11,323 | ||||||
Loans to Bank staff
|
179,588 | 178,260 | ||||||
Other
|
925,623 | 430,126 | ||||||
Subtotal
|
1,573,195 | 1,131,868 | ||||||
Less: Allowance for collection risks
|
(13,978 | ) | (13,978 | ) | ||||
Total
|
Ps. | 1,559,217 | Ps. | 1,117,890 |
June 30,
|
||||||||
2015
|
2014
|
|||||||
Land and buildings
|
Ps. | 117,090 | Ps. | 117,090 | ||||
Furniture and fixtures
|
63,915 | 49,421 | ||||||
Machinery and equipment
|
185,369 | 145,416 | ||||||
Other
|
40,106 | 25,007 | ||||||
Accumulated depreciation
|
(220,160 | ) | (186,445 | ) | ||||
Total
|
Ps. | 186,320 | Ps. | 150,489 |
June 30,
|
||||||||
2015
|
2014
|
|||||||
Properties held for sale
|
Ps. | 33,587 | Ps. | 30,297 | ||||
Assets leased to others
|
22,656 | 19,947 | ||||||
Stationery and supplies
|
23,349 | 18,244 | ||||||
Other
|
1,688 | 2,164 | ||||||
Accumulated depreciation
|
(20,867 | ) | (20,169 | ) | ||||
Total
|
Ps. | 60,413 | Ps. | 50,483 |
June 30,
|
||||||||
2015
|
2014
|
|||||||
Third parties fees, re-engineering, restructuring and capitalized software costs
|
Ps. | 131,714 | Ps. | 79,064 | ||||
Goodwill (*)
|
18,508 | 21,938 | ||||||
Mortgage loan origination expenses related to Pro.Cre.Ar (see note 31)
|
275,926 | 143,538 | ||||||
Total
|
Ps. | 426,148 | Ps. | 244,540 |
12.
|
Reserve for contingencies
|
June 30,
|
||||||||
2015
|
2014
|
|||||||
Legal Contingencies (a)
|
Ps. | 78,863 | Ps. | 79,559 | ||||
Incurred but not reported and pending insurance claims (b)
|
1,181 | 1,181 | ||||||
Contingency risks
|
112,043 | 47,292 | ||||||
Tax Provision
|
11,401 | 11,912 | ||||||
Bonds subject to lawsuits (c)
|
14,290 | 12,845 | ||||||
Allowance for administrative-disciplinary-criminal penalties (d).
|
4,172 | - | ||||||
Total
|
Ps. | 221,950 | Ps. | 152,789 |
(a) Includes legal contingencies and expected legal fees.
|
(b) As of June 30, 2015 and 2014, it is composed of: Debts to insured for Ps. 1,181 (outstanding claims for Ps. 559 and IBNR for Ps. 622).
|
(c) Includes negotiable obligations past due whose holders did not enter to the comprehensive financial debt restructuring which ended on January, 2004.
|
(d) Includes a charge relating to a sanction for Ps. 4,040 imposed on BHSA by the Superintendent of Financial and Foreign Exchange Institutions through Resolution No. 685 in connection with the Financial Summary Proceedings No. 1320 (Note 30). At the close of these Financial Statements, this amount was deposited as resolved by the Executive Committee and the Bank’s Board of Directors.
|
June 30,
|
||||||||
2015
|
2014
|
|||||||
Reverse repurchase agreements collateralized by securities issued by the BCRA (*)
|
Ps. | 11,114 | Ps. | 13,078 | ||||
Reverse repurchase agreements collateralized by other government securities (*)
|
23,367 | 127,726 | ||||||
Total
|
Ps. | 34,481 | Ps. | 140,804 |
14.
|
Other Liabilities from Financial Transactions - Other Banks and International Entities
|
Description
|
Average Annual
interest rate
|
Average Maturity date
|
2015
|
2014
|
|||||||||
Interbank loans in pesos
|
23.02 | % |
August, 2015
|
Ps. | 297,357 | Ps. | 558,449 | ||||||
Total
|
Ps. | 297,357 | Ps. | 558,449 |
June 30,
|
|||||||||||||||
Issue date
|
Maturity date
|
2015
|
Annual
interest rate
|
2014
|
|||||||||||
Banco Hipotecario S.A.
|
|||||||||||||||
Series 5 (US$ 250,000 thousand)
|
04/27/06
|
04/27/16
|
a |
9.750%
|
1,914,484 | 1,709,848 | |||||||||
Series IX (Ps. 258,997)
|
04/25/13
|
01/25/15
|
b/c |
Badlar +280bp
|
- | 202,413 | |||||||||
Series X (Ps. 34,523)
|
08/14/13
|
08/09/14
|
a |
22.0%
|
- | 32,465 | |||||||||
Series XI (Ps. 146,137)
|
08/14/13
|
05/14/15
|
b/c |
Badlar +375bp
|
- | 130,998 | |||||||||
Series XII (US$. 44,508 thousand)
|
08/14/13
|
08/14/17
|
a |
3.95%
|
358,989 | 361,970 | |||||||||
Series XIII (Ps. 55,510)
|
11/11/13
|
11/06/14
|
a |
23.50%
|
- | 55,510 | |||||||||
Series XIV (Ps. 115,400)
|
11/11/13
|
11/11/15
|
b/c |
Badlar +375bp
|
115,400 | 115,400 | |||||||||
Series XV (Ps. 12,340)
|
01/31/14
|
01/26/15
|
a |
27.00%
|
- | 12,340 | |||||||||
Series XVI (Ps. 89,683)
|
01/31/14
|
01/31/16
|
b/c |
Badlar +425bp
|
89,683 | 89,683 | |||||||||
Series XVIII (Ps. 20,046)
|
05/16/14
|
02/16/15
|
a |
27.0%
|
- | 20,046 | |||||||||
Series XIX (Ps. 275,830)
|
05/16/14
|
11/16/15
|
b/c |
Badlar +375bp
|
275,830 | 270,001 | |||||||||
Series XXI (Ps. 222,345)
|
07/30/14
|
01/30/16
|
b/c |
Badlar +275bp
|
222,345 | - | |||||||||
Series XXII (Ps. 253,152)
|
11/05/14
|
08/05/15
|
b/d |
LEBACx0.95
|
253,152 | - | |||||||||
Series XXIII (Ps. 119,386)
|
11/05/14
|
05/08/16
|
b/c |
Badlar +325bp
|
119,386 | - | |||||||||
Series XXIV (Ps. 27,505)
|
02/05/15
|
01/31/16
|
b |
LEBACx0.95
|
27,505 | - | |||||||||
Series XXV (Ps. 308,300)
|
02/05/15
|
08/05/16
|
a/b |
Mixed (e)
|
298,496 | - | |||||||||
Series XXVII (Ps. 281,740)
|
05/22/15
|
11/22/16
|
a/b |
Mixed (e)
|
260,096 | - | |||||||||
Tarshop S.A.
|
|||||||||||||||
Series VIII (Ps. 79,589)
|
01/28/13
|
07/30/14
|
b/c |
Badlar+445bp
|
- | 74,007 | |||||||||
Series X (Ps. 72,592)
|
05/23/13
|
11/23/14
|
b/c |
Badlar+475bp
|
- | 70,532 | |||||||||
Series XI (Ps. 10,837)
|
05/23/13
|
05/23/16
|
b/c |
Badlar+580bp
|
10,775 | 9,729 | |||||||||
Series XII (Ps. 83,588)
|
08/09/13
|
08/09/15
|
a |
15.0%
|
83,112 | 74,822 | |||||||||
Series XIV (Ps. 30,245)
|
04/21/14
|
01/21/15
|
a |
30.0%
|
- | 28,442 | |||||||||
Series XV (Ps. 119,755)
|
04/21/14
|
10/21/15
|
b/c |
Badlar+490bp
|
113,967 | 117,203 | |||||||||
Series XVII (Ps. 41,066)
|
11/26/14
|
08/26/15
|
b/d |
LEBACx0.95
|
40,832 | - | |||||||||
Series XVIII (Ps. 69,291)
|
11/26/14
|
05/26/16
|
b/c |
Badlar+425bp
|
68,896 | - | |||||||||
Series XIX (Ps. 6,314)
|
11/26/14
|
11/26/17
|
b/c |
Badlar+525bp
|
6,280 | - | |||||||||
Series XX (Ps. 69,100)
|
04/24/15
|
01/24/16
|
a |
27.5%
|
68,707 | - | |||||||||
Series XXI (Ps. 80,500)v
|
04/24/14
|
10/24/16
|
a |
28.5%
|
80,043 | - | |||||||||
BACS Banco de Crédito y Securitización S.A.
|
|||||||||||||||
Series I (Ps. 130,435)
|
02/19/14
|
08/19/15
|
b/c |
Badlar+450bp
|
130,435 | 126,303 | |||||||||
Series III (Ps. 132,726)
|
08/19/14
|
05/19/16
|
b/c |
Badlar +275bp
|
132,726 | - | |||||||||
Series IV (Ps. 105,555)
|
11/21/14
|
08/21/16
|
b/c |
Badlar +350bp
|
105,555 | - | |||||||||
Series V (Ps. 150,000)
|
04/17/15
|
01/17/17
|
a/b |
Mixed (d)
|
150,000 | - | |||||||||
4,926,694 | 3,501,712 |
June 30, 2016
|
Ps. | 3,667,236 | ||
June 30, 2017
|
900,469 | |||
June 30, 2018
|
358,989 | |||
Thereafter
|
- | |||
Total
|
Ps. | 4,926,694 |
Type of Contract
|
Notional amount
|
Net Book Value Asset/(Liabilities)
|
Fair Value
|
|||||||||||||||||||||
2015
|
2014
|
2015
|
2014
|
2015
|
2014
|
|||||||||||||||||||
Forwards (1)(a)
|
- | 427,849 | - | 34,670 | - | 33,794 | ||||||||||||||||||
Futures (2)
|
||||||||||||||||||||||||
Purchases (a)
|
2,405,951 | 3,540,782 | (505 | ) | (1,145 | ) | (505 | ) | (1,145 | ) | ||||||||||||||
Sales (a)
|
(1,519,307 | ) | 2,456,907 | |||||||||||||||||||||
Interest rate swaps (3)(b)
|
30,000 | - | 63 | - | 63 | - | ||||||||||||||||||
(442 | ) | 33,525 | (442 | ) | 32,649 |
(a)
|
Underlying: Foreign currency.
|
(b)
|
Underlying: Interest rate.
|
1.
|
Forwards: US dollar forward transactions have been carried out, the settlement of which, in general, is made without delivery of the underlying asset but by means of the payment in Pesos of currency differences. These transactions were performed mainly as hedge for foreign currency positions. Transactions with settlement in Pesos were made upon maturity.
|
2.
|
Futures: Future currency transactions have been carried out through which the forward purchase and sale of foreign currencies (US dollar) was agreed upon. These transactions were performed as hedge for foreign currency position. Settlement is carried on a daily basis for the difference.
|
3.
|
On February 18, 2015, OTC Transactions – Badlar rate swaps for agreed upon fixed interest rate were conducted. These are settled by paying the difference in Pesos. Income has been accounted for in the amount of Ps. 391 as of June 30, 2015.
|
Debt Securities
Class A1/AV
|
Debt Securities
Class A2/AF
|
Debt Securities
Class B
|
Certificates of
Participation
|
Total
|
||||||||||||||||
BHN II – Issued on 05.09.97 (*)
|
||||||||||||||||||||
Face value in Ps.
|
44,554 | 51,363 | 3,730 | 6,927 | 106,574 | |||||||||||||||
Declared Maturity Date
|
03.25.2001 | 07.25.2009 | 03.25.2012 | 05.25.2013 | ||||||||||||||||
BHN III – Issued on 10.29.97 (*)
|
||||||||||||||||||||
Face value in Ps.
|
14,896 | 82,090 | 5,060 | 3,374 | 105,420 | |||||||||||||||
Declared Maturity Date
|
05.31.2017 | 05.31.2017 | 05.31.2018 | 05.31.2018 | ||||||||||||||||
BHN IV – Issued on 03.15.00 (*)
|
||||||||||||||||||||
Face value in Ps.
|
36,500 | 119,500 | 24,375 | 14,625 | 195,000 | |||||||||||||||
Declared Maturity Date
|
03.31.2011 | 03.31.2011 | 01.31.2020 | 01.31.2020 | ||||||||||||||||
BACS I – Issued on 02.15.2001 (*)
|
||||||||||||||||||||
Face value in Ps.
|
30,000 | 65,000 | 12,164 | 8,690 | 115,854 | |||||||||||||||
Declared Maturity Date
|
05.31.2010 | 05.31.2010 | 06.30.2020 | 06.30.2020 | ||||||||||||||||
BACS III – Issued on 12.23.2005
|
||||||||||||||||||||
Face value in Ps.
|
77,600 | 1,200 | 1,200 | 80,000 | ||||||||||||||||
Declared Maturity Date
|
03.20.2013 | 09.20.2013 | 08.20.2015 | |||||||||||||||||
BACS Funding I Issued on 11.15.2001 (*)
|
||||||||||||||||||||
Face value in Ps.
|
- | - | - | 29,907 | 29,907 | |||||||||||||||
Declared Maturity Date
|
11.15.2031 | |||||||||||||||||||
BACS Funding II Issued on 11.23.2001 (*)
|
||||||||||||||||||||
Face value in Ps.
|
- | - | - | 12,104 | 12,104 | |||||||||||||||
Declared Maturity Date
|
11.23.2031 | |||||||||||||||||||
BHSA I Issued on 02.01.2002
|
||||||||||||||||||||
Face value in Ps.
|
- | - | - | 43,412 | 43,412 | |||||||||||||||
Declared Maturity Date
|
02.01.2021 | |||||||||||||||||||
CHA VI Issued on 04.07.2006
|
||||||||||||||||||||
Face value in Ps.
|
56,702 | - | - | 12,447 | 69,149 | |||||||||||||||
Declared Maturity Date
|
12.31.2016 | 12.31.2026 | ||||||||||||||||||
CHA VII Issued on 09.27.2006
|
||||||||||||||||||||
Face value in Ps.
|
58,527 | - | - | 12,848 | 71,375 | |||||||||||||||
Declared Maturity Date
|
08.31.2017 | 02.28.2028 | ||||||||||||||||||
CHA VIII Issued on 03.26.2007
|
||||||||||||||||||||
Face value in Ps.
|
61.088 | - | - | 13,409 | 74.497 | |||||||||||||||
Declared Maturity Date
|
08.31.2024 | 08.31.2028 | ||||||||||||||||||
CHA IX Issued on 08.28.2009
|
||||||||||||||||||||
Face value in Ps.
|
192,509 | - | - | 10,132 | 202,641 | |||||||||||||||
Declared Maturity Date
|
02.07.2027 | 07.07.2027 | ||||||||||||||||||
CHA X Issued on 08.28.2009
|
||||||||||||||||||||
Face value in Ps.
|
- | - | - | 17,224 | 17,224 | |||||||||||||||
Face value en US$
|
85,001 | - | - | - | 85,001 | |||||||||||||||
Declared Maturity Date
|
01.07.2027 | 06.07.2028 | ||||||||||||||||||
CHA XI Issued on 12.21.2009
|
||||||||||||||||||||
Face value in Ps.
|
204,250 | - | - | 10,750 | 215,000 | |||||||||||||||
Declared Maturity Date
|
03.10.2024 | 10.10.2024 | ||||||||||||||||||
CHA XII Issued on 07.21.2010
|
||||||||||||||||||||
Face value in Ps.
|
259,932 | - | - | 13,680 | 273,612 | |||||||||||||||
Declared Maturity Date
|
11.10.2028 | 02.10.2029 | ||||||||||||||||||
CHA XIII Issued on 12.02.2010
|
||||||||||||||||||||
Face value in Ps.
|
110,299 | - | - | 5,805 | 116,104 | |||||||||||||||
Declared Maturity Date
|
12.10.2029 | 04.10.2030 | ||||||||||||||||||
CHA XIV Issued on 03.18.2011
|
||||||||||||||||||||
Face value in Ps.
|
119,876 | - | - | 6,309 | 126,185 | |||||||||||||||
Declared Maturity Date
|
05.10.2030 | 08.10.2030 | ||||||||||||||||||
(*)
|
Trusts subject to the pesification of foreign currency assets and liabilities at the $1.00=US$1 rate established by Law 25561 and Decree 214, as they were created under Argentine legislation. Certain holders of Class A debt securities have started declarative actions against the trustee pursuant to the application of the pesification measures set forth in Law 25561 and Decree 214, in order to maintain the currency of origin of said securities. In these declarative actions, the Bank acted together with BACS as third party. The trustee has duly answered to this claim, being the final resolution to this situation is still pending.
|
Debt Securities
|
Certificates of
Participation
|
Total
|
||||||||||
Series LXXVIII– Issued on 01.22.14
|
||||||||||||
Face value in Ps.
|
153,087 | 49,100 | 202,187 | |||||||||
Estimated Maturity Date
|
06.05.2015 | 06.05.2015 | ||||||||||
Series LXXIX– Issued on 03.18.14
|
||||||||||||
Face value in Ps.
|
151,750 | 49,659 | 201,409 | |||||||||
Estimated Maturity Date
|
08.05.2015 | 08.05.2015 | ||||||||||
Series LXXXI– Issued on 10.17.14
|
||||||||||||
Face value in Ps.
|
81,450 | 28,231 | 109,681 | |||||||||
Estimated Maturity Date
|
09.10.2015 | 09.10.2015 | ||||||||||
Series LXXXII– Issued on 01.19.15
|
||||||||||||
Face value in Ps.
|
87,450 | 33,489 | 120,939 | |||||||||
Estimated Maturity Date
|
03.07.2016 | 03.07.2016 | ||||||||||
Series LXXXIII– Issued on 05.27.15
|
I | |||||||||||
Face value in Ps.
|
111,222 | 42,591 | 153,813 | |||||||||
Estimated Maturity Date
|
08.05.2016 | 08.05.2016 | ||||||||||
Series LXXXIV– Privately issued on 03.15.15
|
||||||||||||
Face value in Ps.
|
61,273 | 23,829 | 85,102 | |||||||||
Estimated Maturity Date
|
09.15.2016 | 09.15.2016 | ||||||||||
Series LXXXV– Privately issued on 06.15.15
|
||||||||||||
Face value in Ps.
|
60,265 | 23,436 | 83,701 | |||||||||
Estimated Maturity Date
|
12.15.2016 | 12.15.2016 | ||||||||||
June 30,
|
||||||||
2015
|
2014
|
|||||||
Class B debt securities – BHN II
|
Ps. | 7,000 | Ps. | - | ||||
Class B debt securities – BHN III
|
7,203 | 7,203 | ||||||
Class B debt securities – BHN IV
|
79,351 | 79,351 | ||||||
Class A debt securities – BHN IV
|
44 | 45 | ||||||
Class A debt securities – CHA VI to CHA XIV
|
75,417 | 53,549 | ||||||
Class A debt securities – BACS I
|
20,234 | 20,234 | ||||||
Class B debt securities – BACS I
|
1,081 | 1,081 | ||||||
Debt securities – BACS III
|
15,768 | 18,107 | ||||||
Debt securities – Tarshop Series LXXV
|
- | 88,541 | ||||||
Debt securities – Tarshop Series LXXIX
|
2,042 | - | ||||||
Debt securities – Tarshop Series LXXXII
|
7,198 | - | ||||||
Debt securities – Tarshop Series LXXXIII
|
13,530 | - | ||||||
Debt securities – Tarshop Series LXXXIV
|
20,927 | - | ||||||
Debt securities – Tarshop Series LXXXV
|
19,448 | - | ||||||
Subtotal
|
Ps. | 269,243 | Ps. | 268,111 |
June 30,
|
||||||||
2015
|
2014
|
|||||||
Certificates of participation – BHN II
|
Ps. | 41,722 | Ps. | 41,722 | ||||
Certificates of participation – BHN III
|
14,970 | 14,970 | ||||||
Certificates of participation – CHA VI
|
13,592 | 13,708 | ||||||
Certificates of participation – CHA VII
|
953 | 4,427 | ||||||
Certificates of participation – CHA VIII
|
- | 2,769 | ||||||
Certificates of participation – CHA IX
|
10,677 | 11,493 | ||||||
Certificates of participation – CHA X
|
26,085 | 24,908 | ||||||
Certificates of participation – CHA XI
|
14,488 | 14,613 | ||||||
Certificates of participation – CHA XII
|
18,298 | 19,198 | ||||||
Certificates of participation – CHA XIII
|
5,330 | 5,985 | ||||||
Certificates of participation – CHA XIV
|
5,401 | 6,404 | ||||||
Certificates of participation – BHSA I
|
9,192 | 7,013 | ||||||
Certificates of participation – BACS III
|
1,003 | 1,003 | ||||||
Certificates of Participation – Tarshop Series LXXIV
|
- | 15,844 | ||||||
Certificates of Participation – Tarshop Series LXXV
|
- | 25,282 | ||||||
Certificates of Participation – Tarshop Series LXXVI
|
- | 21,779 | ||||||
Certificates of Participation – Tarshop Series LXXVII
|
- | 30,996 | ||||||
Certificates of Participation – Tarshop Series LXXVIII
|
- | 39,885 | ||||||
Certificates of Participation – Tarshop Series LXXIX
|
48,523 | 12,065 | ||||||
Certificates of Participation – Tarshop Series LXXX
|
47,053 | 16,791 | ||||||
Certificates of Participation – Tarshop Series LXXXI
|
23,782 | - | ||||||
Certificates of Participation – Tarshop Series LXXXII
|
24,551 | - | ||||||
Certificates of Participation – Tarshop Series LXXXIII
|
34,032 | - | ||||||
Certificates of Participation – Tarshop Series LXXXIV
|
23,486 | - | ||||||
Certificates of Participation – Tarshop Series LXXXV
|
25,112 | - | ||||||
Subtotal
|
Ps. | 388,250 | Ps. | 330,855 | ||||
Total
|
Ps. | 657,493 | Ps. | 598,966 |
June 30,
|
||||||||
2015
|
2014
|
|||||||
Sundry creditors:
|
||||||||
Accrued fees and expenses payable
|
Ps. | 1,291,772 | Ps. | 655,475 | ||||
Summary proceedings in financial matters N° 1320 (*)
|
53,632 | - | ||||||
Unallocated collections
|
9,464 | 14,845 | ||||||
Withholdings and taxes payable
|
96,350 | 39,347 | ||||||
Other
|
16,973 | 14,543 | ||||||
Total
|
Ps. | 1,468,191 | Ps. | 724,210 |
June 30,
|
||||||||
2015
|
2014
|
|||||||
Other:
|
||||||||
Directors and Syndics accrued fees payable
|
Ps. | 47,829 | Ps. | 38,145 | ||||
Payroll withholdings and contributions
|
91,217 | 51,898 | ||||||
Gratifications
|
68,810 | 39,166 | ||||||
Salaries and social securities
|
64,559 | 49,440 | ||||||
Total
|
Ps. | 272,415 | Ps. | 178,649 |
June 30,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Loan servicing fees from third parties
|
Ps. | 37,240 | Ps. | 30,854 | Ps. | 26,548 | ||||||
Commissions from FONAVI
|
- | - | 11,361 | |||||||||
Commissions for credit cards
|
1,048,855 | 705,143 | 555,128 | |||||||||
Other
|
209,230 | 130,619 | 77,176 | |||||||||
Total
|
Ps. | 1,295,325 | Ps. | 866,616 | Ps. | 670,213 |
June 30,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Reimbursement of loan expenses paid by third parties
|
Ps. | 19,547 | Ps. | 37,289 | Ps. | 68,731 | ||||||
Income from services from PROCREAR (note 31)
|
106,619 | 30,947 | 9,863 | |||||||||
Other (*)
|
607,096 | 287,917 | 228,804 | |||||||||
Total
|
Ps. | 733,262 | Ps. | 356,153 | Ps. | 307,398 |
June 30, | ||||||||||||
2015 | 2014 | 2013 | ||||||||||
Structuring and underwriting fees
|
Ps. | 16,466 | Ps. | 14,254 | Ps. | 8,200 | ||||||
Retail bank originations
|
7,690 | 6,327 | 1,958 | |||||||||
Collections
|
181 | 159 | 158 | |||||||||
Aerolíneas Argentinas co-branding
|
27,329 | 11,398 | 469 | |||||||||
Services on loans
|
452,188 | 373,412 | 154,930 | |||||||||
Commissions paid to real estate agents
|
36,688 | 40,707 | 28,349 | |||||||||
Total
|
Ps. | 540,542 | Ps. | 446,257 | Ps. | 194,064 |
June 30,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Income on operations with premises and equipment and miscellaneous assets
|
Ps. | 578 | Ps. | 2,944 | Ps. | 1,158 | ||||||
Rental income
|
2,267 | 2,290 | 1,603 | |||||||||
Interest on loans to bank staff
|
31,447 | 26,601 | 20,668 | |||||||||
Income from equity investments
|
6,641 | - | - | |||||||||
Other
|
17,942 | 15,708 | 14,326 | |||||||||
Total
|
Ps. | 58,875 | Ps. | 47,543 | Ps. | 37,755 |
June 30,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Depreciation of miscellaneous assets
|
Ps. | 340 | Ps. | 388 | Ps. | 350 | ||||||
Gross revenue tax
|
7,126 | 4,395 | 2,445 | |||||||||
Other taxes
|
117,464 | 78,784 | 23,835 | |||||||||
Debit card discounts
|
20,624 | 14,285 | 12,052 | |||||||||
Credit card and others discounts
|
40,577 | 43,422 | 55,130 | |||||||||
Benefits prepayments
|
9,268 | 6,008 | 4,166 | |||||||||
Donations
|
39,842 | 24,325 | 18,048 | |||||||||
Amortization of goodwill
|
3,430 | 3,430 | 3,429 | |||||||||
Payment Summary proceedings in financial matters N° 1320 (*)
|
53,632 | - | - | |||||||||
Other
|
44,417 | 45,393 | 11,511 | |||||||||
Total
|
Ps. | 336,720 | Ps. | 220,430 | Ps. | 130,966 |
US$
|
Euro
|
Yen
|
Total
|
|||||||||||||
(in Pesos)
|
||||||||||||||||
Assets:
|
||||||||||||||||
Cash and due from banks
|
732,799 | 18,561 | 5 | 751,365 | ||||||||||||
Government and corporate securities
|
797,684 | - | - | 797,684 | ||||||||||||
Loans
|
1,223,758 | - | - | 1,223,758 | ||||||||||||
Other receivables from financial transactions
|
471,249 | - | - | 471,249 | ||||||||||||
Miscellaneous receivables
|
28,059 | 30 | - | 28,089 | ||||||||||||
Total as of June 30, 2015
|
3,253,549 | 18,591 | 5 | 3,272,145 | ||||||||||||
Total as of June 30, 2014
|
3,888,459 | 19,472 | 5 | 3,907,936 | ||||||||||||
Liabilities:
|
||||||||||||||||
Deposits
|
609,328 | - | - | 609,328 | ||||||||||||
Other liabilities from financial transactions
|
2,470,533 | 101,460 | - | 2,571,993 | ||||||||||||
Miscellaneous liabilities
|
2,286 | 12 | - | 2,298 | ||||||||||||
Items pending allocation
|
177 | 18 | - | 195 | ||||||||||||
Total as of June 30, 2015
|
3,082,324 | 101,490 | - | 3,183,814 | ||||||||||||
Total as of June 30, 2014
|
3,448,283 | 55,890 | - | 3,504,173 |
As of June 30, 2015 the Bank recorded the Ps. 61,561 tax credit.
|
Shareholder
|
Class of
Shares
|
Number of
Shares
|
Total %
Ownership
|
Voting Rights
|
|||||||||
Argentine government (through FFFRI) (b)
|
A | 668,711,843 | 44.6 | % |
1 vote
|
||||||||
Banco Nación, as trustee for the Bank's Programa de Propiedad Participada (a)
|
B | 57,009,279 | 3.8 | % |
1 vote
|
||||||||
Argentine government (through FFFRI)
|
C | 75,000,000 | 5.0 | % |
1 vote
|
||||||||
Public investors (c) (d)
|
D | 699,278,878 | 46.6 | % |
3 votes
|
||||||||
1,500,000,000 | 100.0 | % |
(a)
|
The Bank's Programa de Propiedad Participada (“PPP”) is the Bank's employee stock ownership plan. Under Decree 2127/2012 and Resolution 264/2013 issued by the Ministry of Economy and Public Finance, the PPP was implemented. Under this plan, in a first stage, out of a total of 75,000,000, 17,990,721 Class B shares were converted into Class A shares, to be allocated among the employees that have withdrawn from the Bank in accordance with the implementation guidelines. Upon delivery to the former employees, the 17,990,721 shares will
|
(b)
|
become Class D shares. The shares allocated to the Bank’s current employees are designated as Class B shares, representing the PPP.
|
(c)
|
Under the Bylaws, the affirmative vote of the holders of Class A Shares is required in order to effectuate: (i) mergers or spin-offs; (ii) an acquisition of shares (constituting a Control Acquisition or resulting in the Bank being subject to a control situation); (iii) the transfer to third parties of a substantial part of the loan portfolio of the Bank, (iv) a change in the Bank’s corporate purpose; (v) the transfer of the Bank’s corporate domicile outside of Argentina, and (vi) the voluntary dissolution of the Bank.
|
(d)
|
For so long as Class A Shares represent more than 42% of the Bank’s capital, the Class D Shares shall be entitled to three votes per share, except that holders of Class D Shares will be entitled to one vote per share in the case of a vote on: (i) a fundamental change in the Bank’s corporate purpose; (ii) a change of the Bank’s domicile to be outside of Argentina; (iii) dissolution prior to the expiration of the Bank’s corporate existence; (iv) a merger or spin-off in which the Bank is not the surviving corporation; and (v) a total or partial recapitalization following a mandatory reduction of capital.
|
(e)
|
By reason of the expiration on January 29, 2009 of the Total Return Swap that had been executed and delivered on January 29, 2004, Deutsche Bank AG transferred to the Bank 71,100,000 ordinary Class “D” shares in Banco Hipotecario Sociedad Anónima with face value $ 1 each, which are available for the term and in the conditions prescribed by the Argentine Companies Law, in its Section 221. The General Ordinary Shareholders’ Meeting held on April 30, 2010 resolved to extend for a year, counted as from January 31, 2010, the term for realizing the treasury shares held by the Bank.
|
June 30,
|
||||||||
2015
|
2014
|
|||||||
Commitments to extend credit
|
||||||||
Mortgage loans and other loans (a)
|
Ps. | 291,342 | Ps. | 132,180 | ||||
Credit card loans (b)
|
14,049,429 | 11,913,152 | ||||||
Clearing items in process (c)
|
137,944 | 163,304 | ||||||
Other guarantees (d)
|
57,739 | 46,646 |
(a)
|
Commitments to extend credit are agreements to lend to a customer at a future date, subject to such customers meeting of pre-defined contractual milestones. Typically, the Bank will commit to extend financing for construction project lending on the basis of the certified progress of the work under construction. Most arrangements require the borrower to pledge the land or buildings under construction as collateral. In the opinion of management, the Bank’s outstanding commitments do not represent unusual credit risk. The Bank’s exposure to credit loss in the event of nonperformance by the other party is represented by the contractual notional amount of those commitments.
|
(b)
|
The Bank has a unilateral and irrevocable right to reduce or change the credit card limit, thus it considered there is no off-balance sheet risk. In the opinion of management, the
|
|
Bank’s outstanding commitments do not represent unusual credit risk. The Bank’s exposure to credit loss in the event of nonperformance by the other party is represented by the contractual notional amount of those commitments.
|
(c)
|
The Bank accounts for items drawn on other banks in memorandum accounts until such time as the related item clears or is accepted. In the opinion of management, the Bank’s risk of loss on these clearing transactions is not significant as the transactions primarily relate to collections on behalf of third parties.
|
(d)
|
Mainly includes the amounts given as collateral for transactions held by customers.
|
1.
|
On September 13, 2013, the Bank was notified of Resolution No. 611 handed down by the Superintendent of Financial and Foreign Exchange Institutions, whereby it ordered to commence summary proceedings against the Bank and the manager Christian Giummarra and the former manager Aixa Manelli (Summary Proceedings No. 5469 on Foreign Exchange Matters) charging them with alleged violation of the foreign exchange laws in selling foreign currency to persons prohibited from trading foreign currency by the Argentine Central Bank. The cumulative amount derived from the alleged violation in the sale of foreign currency is around US$ 39.9 thousand and Euro 1.1 thousand. The relevant defenses and arguments have been filed and evidence has been offered in support of all the defendants subject to the summary proceedings. Due to its related subject matter, the record of this case was joined with Summary Proceedings No. 5529 on Foreign Exchange Matters (File 101,327/10). Therefore, its procedural status is described together with the latter.
|
2.
|
On October 8, 2013, the Bank was notified of Resolution No. 720 handed down by the Superintendent of Financial and Foreign Exchange Institutions, ordering to commence summary proceedings against the Bank and its Organization and Procedures Manager, Mr. Christian Giummarra, and the former Systems Manager, Ms. Aixa Manelli (Summary
|
|
Proceedings No. 5529 on Foreign Exchange Matters) in accordance with Section 8 of the Criminal Foreign Exchange Regime Law (Ley de Régimen Penal Cambiario) –as amended by Decree 480/95- charging them with alleged violation of the foreign exchange laws in selling foreign currency to persons prohibited from trading foreign currency by the Argentine Central Bank. The cumulative amount derived from the alleged violation in the sale of foreign currency is around US$ 86.4 thousand. The relevant defenses and arguments were filed and evidence was offered in support of all the defendants subject to the summary proceedings. The BCRA opened the discovery stage, and evidence was produced in due time. Once the discovery stage came to a conclusion, the attorneys submitted their closing arguments. The Argentine Central Bank now is expected to send the case file to the competent courts.
|
3.
|
On February 19, 2014, the Bank was notified of Resolution No. 209/13 handed down by the Chairman of the Financial Information Unit (UIF), whereby it ordered to commence summary proceedings against the Bank, its directors (Messrs. Eduardo S. Elsztain; Mario Blejer; Ernesto M. Viñes; Jacobo J. Dreizzen; Edgardo L. Fornero; Carlos B. Písula; Gabriel G. Reznik; Pablo D. Vergara del Carril; Mauricio E. Wior; Saul Zang); the Risk and Controlling Manager, Mr. Gustavo D. Efkhanian and the Manager of the Money Laundering Prevention and Control Unit Manager, Mr. Jorge Gimeno. In these proceedings, an investigation is made into the defendants’ liability for alleged violation of the provisions of Section 21 of Law 25,246, as amended, and Resolution UIF No. 228/2007 due to certain defaults detected by the BCRA in the inspection of the organization and in internal controls implemented for the prevention of money-laundering derived from illegal activities. On March 25, 2014, the relevant defenses and arguments were filed in support of the Bank and the individuals subject to the summary proceedings.
|
4.
|
On August 26, 2014, the Bank was notified of the Resolution passed by the Superintendent of Financial and Foreign Exchange Institutions No. 416 dated August 7, 2014 ordering the start of Summary Proceedings No. 5843 in the terms of Section 8 of the Foreign Exchange Criminal Regime Law No. 19,359 (as signed into law pursuant to Decree No. 480/95). In the above-mentioned summary proceedings, Banco Hipotecario, its directors (Messrs. Eduardo S. Elsztain; Jacobo J. Dreizzen; Edgardo L. Fornero; Carlos B. Písula; Gabriel G. Reznik; Pablo D. Vergara del Carril; Ernesto M. Viñes; Saul Zang; and Mauricio E. Wior) and former directors (Ms. Clarisa D. Lifsic de Estol and Mr. Federico L. Bensadón), and two former managers (Messrs. Gabriel G. Saidón and Enrique L. Benitez), are charged with failure to comply with the rules disclosed by Communication “A” 3471 (paragraphs 2 and 3) and by Communication “A” 4805 (Paragraph 2.2.) due to certain transfers of currency made abroad between August and October 2008 to guarantee the “CER Swap Linked to PG08 and External Debt” swap transaction for a total of US$ 45,968 thousand, without the authorization of the Argentine Central Bank. BHSA has been allowed to review the proceedings (case file No. 100.308/10) which are being handled by the Argentine Central Bank’s Department of Foreign Exchange Contentious Matters. The relevant defenses and
|
|
arguments were filed in support of the subjects to the summary proceedings. The BCRA opened the discovery stage on March 16, 2015.
|
5.
|
On December 29, 2014, the Bank was notified of the Resolution passed by the Superintendent of Financial and Foreign Exchange Institutions No. 824 dated December 1, 2014 ordering the start of Summary Proceedings No. 6086 on Foreign Exchange Matters (File 101.534/11) against Banco Hipotecario S.A. and a former Manager (Mr. Gabriel Cambiasso) and five assistants (Claudio H. Martin; Daniel J. Sagray; Rubén E. Perón; Marcelo D. Buzetti and Pablo E. Pizarro) at the Cordoba Branch, in the terms of Section 8 of the Foreign Exchange Criminal Regime Law (as signed into law pursuant to Decree No. 480/95). In the above-mentioned summary proceedings, an investigation is made in connection with excesses in the limits for selling foreign currency to two entities in the City of Cordoba (for a combined amount of US$ 701,270), which allegedly violate the provisions of Communication “A” 5085, paragraph 4.2.1.
|
6.
|
Banco de Crédito y Securitización S.A. has been notified of Resolution No. 738 dated October 22, 2013 (Summary Proceedings No. 1406/201 on Financial Matters, File 100,553/12) handed down by the BCRA’s Superintendent of Financial and Exchange Institutions, ordering to start summary proceedings against this Bank, its Chairman, Mr. Eduardo S. Elsztain, and the Vice-Chairman, Mr. Ernesto M. Viñes, due to the late filing of documentation related to the appointment of the Bank’s authorities. On November 8, 2013, the defenses in support of the Bank’s rights were filed, and the proceedings are pending an administrative decision by the BCRA.
|
7.
|
On November 25, 2014, Tarshop S.A. was notified by the Financial Information Unit that summary proceedings had been filed, identified under Resolution No. 234/14, for potential formal violations derived from the alleged non-compliance with Section 21, paragraph a) of Law 25,246 and UIF Resolutions No. 27/11 and 2/12. Summonses were sent to the Company (Tarshop S.A.), its Compliance Officer (Mauricio Elías Wior) and the Directors then in office (Messrs. Eduardo Sergio Elsztain, Saúl Zang, Marcelo Gustavo Cufré and Fernando Sergio Rubín) for them to file their defenses. In the legal counsel’s opinion, at the current stage of the proceedings and based on the precedents existing at the UIF in similar cases, it is likely that a penalty be imposed under the scope of the administrative proceedings. For such reason, allowances have been recorded in this regard. In the framework of the summary proceedings described above, the evidence offered by the defendants in the summary proceedings was produced and the next stage is the submission of closing arguments.
|
1.
|
On May 4, 2012 the Bank was notified of Resolution No. 186, dated April 25, 2012 issued by the Superintendent of Financial and Foreign Exchange Institutions whereby Summary Proceedings No. 4976 on Foreign Exchange Matters were commenced against the Bank, its directors (Messrs. Eduardo S. Elsztain; Gabriel G. Reznik; Pablo D. Vergara del Carril; Ernesto M. Viñes; Saul Zang; Carlos B. Písula; Edgardo L. Fornero; Jacobo J. Dreizzen); former directors (Ms. Clarisa D. Lifsic de Estol; Messrs. Julio A. Macchi; Federico L. Bensadón; and Jorge M. Grouman) and the former Finance Manager Gabriel G. Saidón, under section 8 of the Foreign Exchange Criminal Regime Law (as signed into law by Decree No. 480/95).
|
2.
|
On October 7, 2014, BHSA was notified of Resolution No. 513 dated August 16, 2014 handed down by the Superintendent of Financial and Foreign Exchange Institutions in the summary proceedings in financial matters No. 1365 (on grounds of alleged failure to comply with the minimum requirements in terms of internal controls under Communication “A” 2525) whereby Banco Hipotecario S.A. was imposed a fine for Ps. 112 and its directors (Messrs. Pablo D. Vergara del Carril; Carlos B. Písula, Eduardo S. Elsztain, Jacobo J. Dreizzen, Gabriel G. Reznik; Edgardo L. Fornero; Ernesto M. Viñes; and Saul Zang) and former directors (Ms. Clarisa D. Lifsic de Estol and Messrs. Jorge L. March; and Federico L. Bensadón) were fined for different amounts.
|
3.
|
On October 31, 2014, BHSA was notified of Resolution No. 685 dated October 29, 2014 handed down by the Superintendent of Financial and Foreign Exchange Institutions in the summary proceedings in financial matters No. 1320 whereby the Bank and its authorities had been charged, on one hand, with the violation of the rules governing financial aid to the Non-Financial Public Sector, with excess over the limits of fractioned exposure to credit risk from the non-financial public sector, with excess in the allocation of assets to guarantee, with failure to satisfy minimum capital requirements and with objections against the accounting
|
|
treatment afforded to the “Cer Swap Linked to PG08 and External Debt” transaction and on the other hand, with delays in communicating the appointment of new directors and tardiness in the provision of documentation associated to the directors recently elected by the shareholders’ meetings.
|
I.
|
Differences in measurement methods
|
June 30,
|
|||||||||||||
2015
|
2014
|
2013
|
|||||||||||
Net income as reported under Argentine Banking GAAP
|
|
Ps. | 537,190 | 627,027 | 339,122 | ||||||||
U.S. GAAP adjustments:
|
|||||||||||||
- Loan origination fees and costs
|
(a)
|
(19,325 | ) | 27,525 | (29,863 | ) | |||||||
- Loan loss reserve
|
(b)
|
(30,703 | ) | (29,677 | ) | (25,253 | ) | ||||||
- Derivative financial instruments
|
(c)
|
876 | (941 | ) | (1,223 | ) | |||||||
- Government securities
|
(d)
|
18,230 | (17,669 | ) | 12,727 | ||||||||
- Provincial public debt
|
(e)
|
- | - | 331 | |||||||||
- Financial liabilities
|
(f)
|
2,709 | 4,136 | 3,154 | |||||||||
- Securitizations
|
(g)
|
16,434 | (10,725 | ) | (17,512 | ) | |||||||
- Intangible assets
|
|||||||||||||
Software costs
|
(h)
|
(26,525 | ) | (18,396 | ) | (8,639 | ) | ||||||
Other intangible assets
|
(h)
|
(3,156 | ) | (4,793 | ) | (3,157 | ) | ||||||
Business combinations
|
(h)
|
991 | 989 | 991 | |||||||||
- Impairment of fixed and foreclosed assets
|
(i)
|
944 | 983 | 932 | |||||||||
- Vacation provision
|
(k)
|
(17,302 | ) | (18,955 | ) | (7,714 | ) | ||||||
- Insurance technical reserve
|
(l)
|
2,780 | 1,398 | 1,003 | |||||||||
- Capitalization of interest cost
|
(m)
|
775 | 301 | 553 | |||||||||
- Deferred income tax
|
(n)
|
44,673 | 55,122 | (20,057 | ) | ||||||||
- Non-Controlling interest
|
(j)
|
(13,658 | ) | (11,031 | ) | 14,148 | |||||||
Net income in accordance with U.S. GAAP
|
|
Ps. | 514,933 | 605,294 | 259,543 | ||||||||
- Less Net (Gain) / Loss attributable to the Non-Controlling interest
|
(j)
|
4,369 | 10,284 | (8,834 | ) | ||||||||
Net income attributable to Controlling interest in accordance with U.S. GAAP
|
|
Ps. | 519,302 | 615,578 | 250,709 | ||||||||
Basic and diluted net income per share in accordance with U.S. GAAP
|
3.519 | 4.136 | 1.774 | ||||||||||
Average number of shares outstanding (in thousands)
|
1,463,365 | 1,463,365 | 1,463,365 |
June 30,
|
|||||||||
|
2015
|
2014
|
|||||||
Total shareholders' equity under Argentine Banking GAAP
|
|
Ps. | 4,700,716 | 4,205,343 | |||||
U.S. GAAP adjustments:
|
|||||||||
- Loan origination fees and costs
|
(a)
|
(90,893 | ) | (71,568 | ) | ||||
- Loan loss reserve
|
(b)
|
(220,541 | ) | (189,838 | ) | ||||
- Derivative financial Instruments
|
(c)
|
- | (876 | ) | |||||
- Government securities
|
(d)
|
37,759 | 3,871 | ||||||
- Financial liabilities
|
(f)
|
10,282 | 7,573 | ||||||
- Securitizations
|
(g)
|
(15,442 | ) | (31,876 | ) | ||||
- Intangible assets
|
|||||||||
Software costs
|
(h)
|
(63,888 | ) | (37,363 | ) | ||||
Other intangible assets
|
(h)
|
(59 | ) | 3,097 | |||||
Business combinations
|
(h)
|
(1,176 | ) | (2,167 | ) | ||||
- Impairment of fixed and foreclosed assets
|
(i)
|
(37,379 | ) | (38,323 | ) | ||||
- Vacation provision
|
(k)
|
(57,634 | ) | (40,332 | ) | ||||
- Insurance technical reserve
|
(l)
|
(339 | ) | (3,119 | ) | ||||
- Capitalization of interest cost
|
(m)
|
4,001 | 3,226 | ||||||
- Deferred income Tax
|
(n)
|
258,903 | 214,230 | ||||||
- Non-Controlling interest
|
(j)
|
67,957 | 59,849 | ||||||
Total Shareholders’ Equity under U.S. GAAP
|
|
Ps. | 4,592,267 | 4,081,727 | |||||
- Non-Controlling Interest under U.S. GAAP
|
(j)
|
(68,126 | ) | (50,662 | ) | ||||
Consolidated Parent Company Shareholders’ Equity under U.S. GAAP
|
|
Ps. | 4,524,141 | 4,031,065 |
Total Shareholders’ Equity
|
||||
Balance as of June 30, 2013
|
Ps. | 3,423,204 | ||
Cash dividends
|
(30,000 | ) | ||
Other Comprehensive Income
|
22,283 | |||
Net income for the twelve-month period in accordance with U.S. GAAP
|
615,578 | |||
Balance as of June 30, 2014
|
Ps. | 4,031,065 | ||
Cash dividends
|
(41,817 | ) | ||
Other Comprehensive Income
|
15,591 | |||
Net income for the twelve-month period in accordance with U.S. GAAP
|
519,302 | |||
Balance as of June 30, 2015
|
Ps. | 4,524,141 |
a)
|
Loans considered impaired, in accordance with ASC 310-10 “Accounting for Creditors for Impairment of a Loan”, are recorded at the present value of the expected future cash flows discounted at the loan’s effective contractual interest rate or at the fair value of the collateral if the loan is collateral dependent. Under ASC 310-10, a loan is considered impaired when, based on current information, it is probable that the borrower will be unable to pay contractual interest or principal payments as scheduled in the loan agreement. ASC 310-10 applies to all loans except smaller-balance homogeneous consumer loans, loans carried at the lower of cost or fair value, debt securities, and leases.
|
b)
|
In addition, the Bank has performed a migration analysis for mortgage, credit cards and consumer loans following the ASC 450-20 and historical loss ratios were determined by analyzing historical losses, in order to calculate the allowance required for smaller-balance impaired loans and unimpaired loans for U.S. GAAP purposes. Loss estimates are analyzed by loan type and thus for homogeneous groups of clients. Such historical ratios were updated to incorporate the most recent data reflecting current economic conditions, industry performance
|
|
trends, geographic or obligor concentrations within each portfolio segment, and any other pertinent information that may affect the estimation of the allowance for loan losses.
|
c)
|
Under Argentine Banking GAAP, loans that were previously charged-off, which are subsequently restructured and become performing loans, are included again in the Bank’s assets, according to the policies adopted by the bank. Under U.S. GAAP recoveries of loans previously charged off should be recorded when received. As of June 2015 and 2014, the Bank recorded an adjustment to shareholders’ equity related to reinstated loans of Ps. (62,502) and Ps. (79,889), respectively.
|
d)
|
Effective July 1, 2010, the Bank implemented new accounting guidance provided by SFAS 166 and 167 (ASU 2009-16 and ASU 2009-17, respectively, under the new codification), which amend the accounting for transfers of financial assets and consolidation of variable interest entities (VIEs). As a result of applying such guidance, the Bank, or its subsidiaries, were deemed to be the primary beneficiary of the securitization trusts because the Bank, or its subsidiaries, have the power to direct the activities of these VIEs through its servicing responsibilities and duties. Additionally, the Bank, or its subsidiaries, through its retained interests held in these securitizations have the obligation to absorb losses or the right to receive benefits from the VIEs. As a result of the analysis performed, the Bank should consolidate assets and liabilities of those securitization trusts, elimininating the investment in the retained interests and recording and adjustment in the allowance for loan losses of such securitization trusts.
|
2015 | 2014 | |||||||||||||||||||||||
Allowances under Arg. Banking GAAP
|
Allowances under U.S. GAAP
|
Adjustment to shareholders’ equity
|
Allowances under Arg. Banking GAAP
|
Allowances under U.S. GAAP
|
Adjustment to shareholders’ equity
|
|||||||||||||||||||
Migration analysis (*)
|
346,797 | 476,665 | (129,868 | ) | 292,526 | 455,354 | (162,828 | ) | ||||||||||||||||
ASC 310-10
|
91,365 | 51,612 | 39,753 | 68,788 | 14,736 | 54,052 | ||||||||||||||||||
Reinstated loans
|
- | 62,502 | (62,502 | ) | - | 79,889 | (79,889 | ) | ||||||||||||||||
Subtotal
|
438,162 | 590,779 | (152,617 | ) | 361,314 | 549,979 | (188,665 | ) |
(*) Migration analysis of Banco Hipotecario and its subsidiaries.
|
2015
|
2014
|
|||||||||||||||||||||||
Allowances under Arg. Banking GAAP
|
Allowances under U.S. GAAP
|
Adjustment to shareholders’ equity
|
Allowances under Arg. Banking GAAP
|
Allowances under U.S. GAAP
|
Adjustment to shareholders’ equity
|
|||||||||||||||||||
Reconsolidated trusts
|
76,232 | 144,156 | (67,924 | ) | 45,504 | 46,677 | (1,173 | ) | ||||||||||||||||
Subtotal
|
76,232 | 144,156 | (67,924 | ) | 45,504 | 46,677 | (1,173 | ) | ||||||||||||||||
Total | 514,394 | 734,935 | (220,541 | ) | 406,818 | 596,656 | (189,838 | ) |
June 30,
|
||||||||
2015
|
2014
|
|||||||
Discount Bonds
|
Ps. | (534 | ) | Ps. | (4,126 | ) | ||
Unquoted Securities issued by the BCRA
|
1,352 | 7,387 | ||||||
Bills issued by Provincial Governments
|
8,472 | 4,234 | ||||||
Other National Government Bonds
|
28,469 | (3,624 | ) | |||||
Total
|
Ps. | 37,759 | Ps. | 3,871 |
·
|
Discount Bonds
|
2015
|
2014
|
|||||||||||||||||||||||||||||||||||||||
Amortized Cost U.S. GAAP
|
Book Value Argentine Banking GAAP
|
Fair Value – Book value under U.S. GAAP
|
Unrealized (Loss)/Gain
|
Shareholders’ equity Adjustment
|
Amortized Cost U.S. GAAP
|
Book Value Argentine Banking GAAP
|
Fair Value – Book value under U.S. GAAP
|
Unrealized (Loss)/Gain
|
Shareholders’ equity Adjustment
|
|||||||||||||||||||||||||||||||
(In thousands of $)
|
||||||||||||||||||||||||||||||||||||||||
Discount Bonds
|
9,624 | 9,624 | 9,090 | (11,013 | ) | (534 | ) | 77,177 | 91,782 | 87,656 | 10,479 | (4,126 | ) |
a.
|
Intent and ability of the Bank to retain its investment for a period of time that allows for any anticipated recovery in market value;
|
b.
|
Expectation to recover the entire amortized cost of the security;
|
c.
|
Recoveries in fair value after the balance sheet date;
|
d.
|
The financial condition and near-term prospects of the issuer, including any specific events which may influence the operations of the issuer (such as changes in technology that may impair the earnings potential of the investment or the discontinuance of a segment of a business that may affect the future earnings potential).
|
e.
|
Likelihood that it will be required to sell debt investments before recovery of amortized cost.
|
·
|
Other Bonds
|
2015
|
2014
|
|||||||||||||||||||||||||||||||||||||||
Amortized Cost U.S. GAAP
|
Book Value Argentine Banking GAAP
|
Fair Value – Book value under U.S. GAAP
|
Unrealized (Loss)/Gain
|
Shareholders’ equity Adjustment
|
Amortized Cost U.S. GAAP
|
Book Value Argentine Banking GAAP
|
Fair Value – Book value under U.S. GAAP
|
Unrealized (Loss)/Gain
|
Shareholders’ equity Adjustment
|
|||||||||||||||||||||||||||||||
(In thousands of $)
|
||||||||||||||||||||||||||||||||||||||||
Unquoted securities issued by the BCRA
|
1,719,856 | 1,719,856 | 1,721,208 | 1,352 | 1,352 | 1,342,425 | 1,342,425 | 1,349,812 | 7,387 | 7,387 | ||||||||||||||||||||||||||||||
Bills issued by Provincial Governments
|
539,172 | 539,172 | 547,644 | 8,472 | 8,472 | 423,275 | 423,275 | 427,509 | 4,234 | 4,234 | ||||||||||||||||||||||||||||||
Other National Government Bonds
|
648,921 | 648,921 | 677,390 | 28,469 | 28,465 | 33,136 | 32,796 | 29,172 | - | (3,624 | ) |
·
|
Insufficient Equity Investment at Risk
|
·
|
Equity lacks decision-making rights
|
·
|
Equity with non-substantive voting rights
|
·
|
Lacking the obligation to Absorb an Entity´s Expected Losses
|
·
|
Lacking the right to receive an Entity´s expected residual returns
|
June 30,
|
||||||||
2015
|
2014
|
|||||||
Cash and due from banks
|
Ps. | 88,236 | Ps. | 103,693 | ||||
Loans (net of allowances)
|
2,235,655 | 1,771,175 | ||||||
Other assets
|
1,149,023 | 826,795 | ||||||
Total Assets
|
Ps. | 3,472,914 | Ps. | 2,701,663 | ||||
Debt Securities
|
Ps. | 2,868,064 | Ps. | 2,214,488 | ||||
Certificates of Participation
|
451,365 | 427,246 | ||||||
Other liabilities
|
153,485 | 59,929 | ||||||
Total Liabilities
|
Ps. | 3,472,914 | Ps. | 2,701,663 |
The intangible assets identified as part of the acquisition where customer relationships, trademark and workforce amounted to Ps. 24,394 as of August 31, 2010 subject to amortization.
|
Jurisdiction
|
Tax year
|
|||
Argentina
|
2010 – 2014 |
II.
|
Additional disclosure requirements:
|
·
|
Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
|
·
|
Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
|
·
|
Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement.
|
a)
|
Securities
|
b)
|
Securities receivable under repurchase agreements
|
c)
|
Derivatives
|
d)
|
Derivatives
|
Balances as of June 30, 2015
|
||||||||||||||||
Total carrying value
|
Quoted market prices in active markets
(Level 1)
|
Internal models with significant observable market parameters
(Level 2)
|
Internal models with significant unobservable market parameters
(Level 3)
|
|||||||||||||
ASSETS
|
||||||||||||||||
Government and corporate securities
|
||||||||||||||||
Trading securities
|
1,244,278 | 1,244,278 | - | - | ||||||||||||
Available for sale securities
|
1,210,421 | 729,986 | 480,435 | - | ||||||||||||
Instruments issued by the BCRA
|
2,422,813 | 672,239 | 1,750,574 | - | ||||||||||||
Corporate securities
|
430,855 | 430,855 | - | - | ||||||||||||
Other receivables from financial transactions
|
||||||||||||||||
Trading securities
|
231,366 | 231,366 | - | - | ||||||||||||
Available for sale securities
|
231,400 | 231,117 | 283 | - | ||||||||||||
Futures
|
182 | 182 | - | - | ||||||||||||
Interest rate swaps
|
575 | 575 | - | - | ||||||||||||
Miscellaneous assets
|
||||||||||||||||
Trading securities
|
162,759 | 162,759 | - | - | ||||||||||||
TOTAL ASSETS AT FAIR VALUE
|
5,934,649 | 3,703,357 | 2,231,292 | - | ||||||||||||
LIABILITIES
|
||||||||||||||||
Other obligations from financial transactions
|
||||||||||||||||
Trading securities
|
(105,684 | ) | (105,684 | ) | - | - | ||||||||||
Available for sale securities
|
(247,143 | ) | (247,143 | ) | - | - | ||||||||||
Futures
|
(687 | ) | (687 | ) | - | - | ||||||||||
Interest rate swaps
|
(512 | ) | (512 | ) | - | - | ||||||||||
Deposits
|
||||||||||||||||
Trading securities
|
(99,515 | ) | (99,515 | ) | - | - | ||||||||||
Available for sale securities
|
(16,288 | ) | (16,288 | ) | - | - | ||||||||||
TOTAL LIABILITIES AT FAIR VALUE
|
(469,829 | ) | (469,829 | ) | - | - |
Balances as of June 30, 2014
|
||||||||||||||||
Total carrying value
|
Quoted market prices in active markets
(Level 1)
|
Internal models with significant observable market parameters
(Level 2)
|
Internal models with significant unobservable market parameters
(Level 3)
|
|||||||||||||
ASSETS
|
||||||||||||||||
Government and corporate securities
|
||||||||||||||||
Trading securities
|
1,316,864 | 1,316,864 | - | - | ||||||||||||
Available for sale securities
|
486,322 | 437,566 | 48,756 | - | ||||||||||||
Instruments issued by the BCRA
|
1,704,354 | 354,542 | 1,349,812 | - | ||||||||||||
Corporate securities
|
345,565 | 345,565 | - | - | ||||||||||||
Other receivables from financial transactions
|
||||||||||||||||
Trading securities
|
1,279 | 1,279 | - | - | ||||||||||||
Available for sale securities
|
58,015 | 58,015 | - | - | ||||||||||||
Forwards
|
33,794 | - | 33,794 | - | ||||||||||||
Futures
|
6,766 | 6,766 | - | - | ||||||||||||
TOTAL ASSETS AT FAIR VALUE
|
3,952,959 | 2,520,597 | 1,432,362 | - | ||||||||||||
LIABILITIES
|
||||||||||||||||
Other obligations from financial transactions
|
||||||||||||||||
Futures
|
(7,911 | ) | (7,911 | ) | - | - | ||||||||||
TOTAL LIABILITIES AT FAIR VALUE
|
(7,911 | ) | (7,911 | ) | - | - |
As of June 30, 2015
|
||||||||||||
Consumer Loan Portfolio
|
Commercial Loan Portfolio
|
Total
|
||||||||||
Allowance for credit losses:
|
||||||||||||
Ending balance: individually evaluated for impairment
|
Ps. | - | Ps. | 26,410 | Ps. | 26,410 | ||||||
Ending balance: collectively evaluated for impairment
|
683,323 | 25,202 | 708,525 | |||||||||
Ending Balance
|
Ps. | 683,323 | Ps. | 51,612 | Ps. | 734,935 | ||||||
Financing receivables:
|
||||||||||||
Ending balance: individually evaluated for impairment
|
- | Ps. | 44,496 | Ps. | 44,496 | |||||||
Ending balance: collectively evaluated for impairment
|
15,266,470 | 6,853,897 | 22,120,367 | |||||||||
Ending Balance
|
Ps. | 15,266,470 | Ps. | 6,898,393 | Ps. | 22,164,863 |
As of June 30, 2014
|
||||||||||||
Consumer Loan Portfolio
|
Commercial Loan Portfolio
|
Total
|
||||||||||
Allowance for credit losses:
|
||||||||||||
Ending balance: individually evaluated for impairment
|
Ps. | - | Ps. | 11,296 | Ps. | 11,296 | ||||||
Ending balance: collectively evaluated for impairment
|
581,920 | 3,440 | 585,360 | |||||||||
Ending Balance
|
Ps. | 581,920 | Ps. | 14,736 | Ps. | 596,656 | ||||||
Financing receivables:
|
||||||||||||
Ending balance: individually evaluated for impairment
|
Ps. | - | Ps. | 24,323 | Ps. | 24,323 | ||||||
Ending balance: collectively evaluated for impairment
|
11,592,745 | 6,182,266 | 17,775,011 | |||||||||
Ending Balance
|
Ps. | 11,592,745 | Ps. | 6,206,589 | Ps. | 17,799,334 |
As of June 30,
|
||||||||
2015
|
2014
|
|||||||
Allowance for credit losses:
|
||||||||
Beginning Balance
|
Ps. | 596,656 | Ps. | 508,654 | ||||
Charge-offs
|
(267,694 | ) | (245,023 | ) | ||||
Provision for loan losses
|
405,973 | 333,025 | ||||||
Ending Balance
|
Ps. | 734,935 | Ps. | 596,656 |
As of June 30, 2015
|
||||||||||||
Recorded Investment
|
Unpaid Principal Balance
|
Related Allowance
|
||||||||||
With no related allowance recorded:
|
||||||||||||
Commercial
|
||||||||||||
Impaired Loans
|
Ps. | - | Ps. | - | Ps. | - | ||||||
With an allowance recorded:
|
||||||||||||
Commercial
|
||||||||||||
Impaired Loans
|
Ps. | 44,496 | Ps. | 37,658 | Ps. | 26,410 | ||||||
Total
|
Ps. | 44,496 | Ps. | 37,658 | Ps. | 26,410 |
As of June 30, 2014
|
||||||||||||
Recorded Investment
|
Unpaid Principal Balance
|
Related Allowance
|
||||||||||
With no related allowance recorded:
|
||||||||||||
Commercial
|
||||||||||||
Impaired Loans
|
Ps. | - | Ps. | - | Ps. | - | ||||||
With an allowance recorded:
|
||||||||||||
Commercial
|
||||||||||||
Impaired Loans
|
Ps. | 24,323 | Ps. | 21,441 | Ps. | 11,296 | ||||||
Total
|
Ps. | 24,323 | Ps. | 21,441 | Ps. | 11,296 |
As of June 30,
|
||||||||
2015
|
2014
|
|||||||
Consumer
|
||||||||
Advances
|
Ps. | 187 | Ps. | 566 | ||||
Mortgage Loans
|
30,739 | 37,955 | ||||||
Personal Loans – BHSA
|
88,514 | 74,950 | ||||||
Personal Loans – Financial trusts
|
52,827 | - | ||||||
Credit Card Loans – BHSA
|
115,792 | 104,200 | ||||||
Credit card Loans – Tarshop
|
109,319 | 117,809 | ||||||
Total Consumer
|
Ps. | 397,378 | Ps. | 335,480 | ||||
Commercial
|
||||||||
Performing Loans
|
Ps. | Ps. | - | |||||
Impaired Loans
|
44,496 | 24,323 | ||||||
Total Commercial
|
Ps. | 44,496 | Ps. | 24,323 | ||||
Total Non accrual loans
|
Ps. | 441,874 | Ps. | 359,803 |
As of June 30, 2015
|
||||||||||||||||||||||||||||
30-90 Days
|
91-180 Days
|
181-360 Days
|
Greater
|
Total
|
Current
|
Total
|
||||||||||||||||||||||
Past Due
|
Past Due
|
Past Due
|
than 360
|
Past Due
|
Financing
|
|||||||||||||||||||||||
Consumer
|
||||||||||||||||||||||||||||
Advances
|
904 | 119 | 62 | 6 | 1,091 | 17,846 | 18,937 | |||||||||||||||||||||
Mortgage Loans
|
24,196 | 6,707 | 4,350 | 19,682 | 54,935 | 2,662,466 | 2,717,401 | |||||||||||||||||||||
Personal Loans – BHSA
|
74,437 | 40,349 | 47,916 | 249 | 162,951 | 2,449,316 | 2,612,267 | |||||||||||||||||||||
Personal Loans – Financial trusts
|
94,144 | 31,334 | 21,030 | 463 | 146,971 | 727,455 | 874,426 | |||||||||||||||||||||
Credit Card Loans – BHSA
|
58,835 | 53,133 | 62,318 | 341 | 174,627 | 7,349,464 | 7,524,091 | |||||||||||||||||||||
Credit card Loans – Tarshop
|
112,302 | 49,500 | 53,187 | 6,632 | 221,621 | 1,297,727 | 1,519,348 | |||||||||||||||||||||
Total Consumer Loans
|
364,818 | 181,142 | 188,863 | 27,373 | 762,196 | 14,504,274 | 15,266,470 | |||||||||||||||||||||
Commercial:
|
||||||||||||||||||||||||||||
Performing Loans
|
1,568 | - | - | - | 1,568 | 6,852,329 | 6,853,897 | |||||||||||||||||||||
Impaired loans
|
- | 173 | 11,402 | 32,921 | 44,496 | - | 44,496 | |||||||||||||||||||||
Total Commercial Loans
|
1,568 | 173 | 11,402 | 32,921 | 46,064 | 6,852,329 | 6,898,393 | |||||||||||||||||||||
Total
|
366,386 | 181,315 | 200,265 | 60,294 | 808,260 | 21,356,603 | 22,164,863 |
As of June 30, 2014
|
||||||||||||||||||||||||||||
30-90 Days
|
91-180 Days
|
181-360 Days
|
Greater
|
Total
|
Current
|
Total
|
||||||||||||||||||||||
Past Due
|
Past Due
|
Past Due
|
than 360
|
Past Due
|
Financing
|
|||||||||||||||||||||||
Consumer
|
||||||||||||||||||||||||||||
Advances
|
837 | 111 | 131 | 324 | 1,403 | 24,648 | 26,051 | |||||||||||||||||||||
Mortgage Loans
|
27,812 | 7,235 | 5,403 | 25,317 | 65,767 | 2,801,484 | 2,867,251 | |||||||||||||||||||||
Personal Loans
|
78,819 | 36,785 | 37,735 | 430 | 153,769 | 1,937,243 | 2,091,012 | |||||||||||||||||||||
Credit Card Loans – BHSA
|
71,613 | 54,950 | 49,225 | 25 | 175,813 | 5,009,921 | 5,185,734 | |||||||||||||||||||||
Credit card Loans – Tarshop
|
156,447 | 57,833 | 55,617 | 4,359 | 274,256 | 1,148,441 | 1,422,697 | |||||||||||||||||||||
Total Consumer Loans
|
335,528 | 156,914 | 148,111 | 30,455 | 671,008 | 10,921,737 | 11,592,745 | |||||||||||||||||||||
Commercial:
|
||||||||||||||||||||||||||||
Performing Loans
|
164 | - | - | - | 164 | 6,182,102 | 6,182,266 | |||||||||||||||||||||
Impaired loans
|
- | 1,777 | 5,550 | 16,996 | 24,323 | - | 24,323 | |||||||||||||||||||||
Total Commercial Loans
|
164 | 1,777 | 5,550 | 16,996 | 24,487 | 6,182,102 | 6,206,589 | |||||||||||||||||||||
Total
|
335,692 | 158,691 | 153,661 | 47,451 | 695,495 | 17,103,839 | 17,799,334 |
Loan Classification
|
Description
|
1. Normal Situation
|
The debtor is widely able to meet its financial obligations, demonstrating significant cash flows, a liquid financial situation, an adequate financial structure, a timely payment record, competent management, available information in a timely, accurate manner and satisfactory internal controls. The debtor is in a sector of activity that is operating properly and has good prospects.
|
2. With Special Follow-up
|
Cash flow analysis reflects that the debt may be repaid even though it is possible that the customer’s future payment ability may deteriorate without a proper follow-up.
|
3. With Problems
|
Cash flow analysis evidences problems to repay the debt, and therefore, if these problems are not solved, there may be some losses.
|
4. High Risk of Insolvency
|
Cash flow analysis evidences that repayment of the full debt is highly unlikely.
|
5. Uncollectible
|
The amounts in this category are deemed total
|
losses. Even though these assets may be recovered under certain future circumstances, inability to make payments is evident at the date of the analysis. It includes loans to insolvent or bankrupt borrowers.
|
Consumer Portfolio:
|
Loan Classification
|
Description
|
1. Normal Situation
|
Loans with timely repayment or arrears not exceeding 31 days, both of principal and interest.
|
2. Low Risk
|
Occasional late payments, with a payment in arrears of more than 32 days and up to 90 days. A customer classified as “Medium Risk” having been refinanced may be recategorized within this category, as long as he amortizes one principal installment (whether monthly or bimonthly) or repays 5% of principal.
|
3. Medium Risk
|
Some inability to make payments, with arrears of more than 91 days and up to 180 days. A customer classified as “High Risk” having been refinanced may be recategorized within this category, as long as he amortizes two principal installments (whether monthly or bimonthly) or repays 5% of principal.
|
4. High Risk
|
Judicial proceedings demanding payment have been initiated or arrears of more than 180 days and up to one year. A customer classified as “Uncollectible” having been refinanced may be recategorized within this category, as long as he amortizes three principal installments (whether monthly or bimonthly) or repays 10% of principal.
|
5. Uncollectible
|
Loans to insolvent or bankrupt borrowers, or subject to judicial proceedings, with little or no possibility of collection, or with arrears in excess of one year.
|
As of June 30, 2015
|
||||||||||||||||||||||||
"1"
|
"2"
|
"3"
|
"4"
|
"5"
|
||||||||||||||||||||
Normal Situation
|
With special follow-up or Low Risk
|
With problems or Medium Risk
|
High risk of insolvency or High risk
|
Uncollectible
|
Total
|
|||||||||||||||||||
Consumer
|
||||||||||||||||||||||||
Advances
|
17,846 | 904 | 119 | 62 | 6 | 18,937 | ||||||||||||||||||
Mortgage Loans
|
2,662,466 | 24,196 | 6,707 | 4,350 | 19,682 | 2,717,401 | ||||||||||||||||||
Personal Loans – BHSA
|
2,449,316 | 74,437 | 40,349 | 47,916 | 249 | 2,612,267 | ||||||||||||||||||
Personal Loans – Financial trusts
|
796,527 | 24,931 | 31,418 | 21,550 | - | 874,426 | ||||||||||||||||||
Credit Card Loans – BHSA
|
7,349,464 | 58,835 | 53,133 | 62,318 | 341 | 7,524,091 | ||||||||||||||||||
Credit card Loans – Tarshop
|
1,297,727 | 112,302 | 49,500 | 53,187 | 6,632 | 1,519,348 | ||||||||||||||||||
Total Consumer Loans
|
14,573,346 | 295,605 | 181,226 | 189,383 | 26,910 | 15,266,470 | ||||||||||||||||||
Commercial:
|
||||||||||||||||||||||||
Performing loans
|
6,852,329 | 1,568 | - | - | - | 6,853,897 | ||||||||||||||||||
Impaired loans
|
- | - | 173 | 11,402 | 32,921 | 44,496 | ||||||||||||||||||
Total Commercial Loans
|
6,852,329 | 1,568 | 173 | 11,402 | 32,921 | 6,898,393 | ||||||||||||||||||
Total Financing Receivables
|
21,425,675 | 297,173 | 181,399 | 200,785 | 59,831 | 22,164,863 |
As of June 30, 2014
|
||||||||||||||||||||||||
"1"
|
"2"
|
"3"
|
"4"
|
"5"
|
||||||||||||||||||||
Normal Situation
|
With special follow-up or Low Risk
|
With problems or Medium Risk
|
High risk of insolvency or High risk
|
Uncollectible
|
Total
|
|||||||||||||||||||
Consumer
|
||||||||||||||||||||||||
Advances
|
24,648 | 837 | 111 | 131 | 324 | 26,051 | ||||||||||||||||||
Mortgage Loans
|
2,801,484 | 27,812 | 7,235 | 5,403 | 25,317 | 2,867,251 | ||||||||||||||||||
Personal Loans
|
1,937,243 | 78,819 | 36,785 | 37,735 | 430 | 2,091,012 | ||||||||||||||||||
Credit Card Loans – BHSA
|
5,009,921 | 71,613 | 54,950 | 49,225 | 25 | 5,185,734 | ||||||||||||||||||
Credit card Loans – Tarshop
|
1,148,441 | 156,447 | 57,833 | 55,617 | 4,359 | 1,422,697 | ||||||||||||||||||
Total Consumer Loans
|
10,921,737 | 335,528 | 156,914 | 148,111 | 30,455 | 11,592,745 | ||||||||||||||||||
Commercial:
|
||||||||||||||||||||||||
Performing loans
|
6,182,102 | 164 | - | - | - | 6,182,266 | ||||||||||||||||||
Impaired loans
|
- | - | 1,777 | 5,550 | 16,996 | 24,323 | ||||||||||||||||||
Total Commercial Loans
|
6,182,102 | 164 | 1,777 | 5,550 | 16,996 | 6,206,589 | ||||||||||||||||||
Total Financing Receivables
|
17,103,839 | 335,692 | 158,691 | 153,661 | 47,451 | 17,799,334 |
As of June 30, 2015
|
||||||||
Number of contracts
|
Post-modification Outstanding recorded investment
|
|||||||
Consumer
|
||||||||
Advances
|
63 | Ps. | 1,463 | |||||
Mortgage Loans
|
174 | 4,490 | ||||||
Personal Loans
|
6,921 | 160,312 | ||||||
Credit Card Loans – BHSA
|
21,472 | 245,522 | ||||||
Credit card Loans – Tarshop
|
15,512 | 92,758 | ||||||
Total Consumer
|
44,142 | Ps. | 504,545 | |||||
Commercial
|
||||||||
Performing Loans
|
- | Ps. | - | |||||
Impaired Loans
|
- | - | ||||||
Total Commercial
|
- | Ps. | - | |||||
Total TDRs
|
44,142 | Ps. | 504,545 |
As of June 30, 2014
|
||||||||
Number of contracts
|
Post-modification Outstanding recorded investment
|
|||||||
Consumer
|
||||||||
Advances
|
52 | Ps. | 987 | |||||
Mortgage Loans
|
110 | 3,602 | ||||||
Personal Loans
|
4,140 | 79,250 | ||||||
Credit Card Loans – BHSA
|
1,209 | 14,749 | ||||||
Credit card Loans – Tarshop
|
18,553 | 89,655 | ||||||
Total Consumer
|
24,064 | Ps. | 188,243 | |||||
Commercial
|
||||||||
Performing Loans
|
- | Ps. | - | |||||
Impaired Loans
|
- | - | ||||||
Total Commercial
|
- | Ps. | - | |||||
Total TDRs
|
24,064 | Ps. | 188,243 |
As of June 30,
|
||||||||||||||||
2015
|
2014
|
|||||||||||||||
Number of contracts
|
Recorded investment
|
Number of contracts
|
Recorded investment
|
|||||||||||||
Consumer
|
||||||||||||||||
Advances
|
10 | Ps. | 197 | 6 | Ps. | 85 | ||||||||||
Mortgage Loans
|
25 | 783 | 22 | 490 | ||||||||||||
Personal Loans
|
1,116 | 21,602 | 469 | 6,816 | ||||||||||||
Credit Card Loans – BHSA
|
672 | 7,923 | 590 | 6,262 | ||||||||||||
Credit card Loans – Tarshop
|
5,146 | 26,253 | 8,571 | 41,835 | ||||||||||||
Total Consumer
|
6,969 | Ps. | 56,758 | 9,658 | Ps. | 55,488 | ||||||||||
Commercial
|
||||||||||||||||
Performing Loans
|
- | Ps. | - | - | Ps. | - | ||||||||||
Impaired Loans
|
- | - | - | - | ||||||||||||
Total Commercial
|
- | Ps. | - | - | Ps. | - | ||||||||||
Total TDRs that subsequently defaulted
|
6,969 | Ps. | 56,758 | 9,658 | Ps. | 55,488 |
Argentine Banking GAAP
|
U.S. GAAP
|
Adjustment
|
||||||||||
June 30, 2014
|
Ps. | 406,818 | Ps. | 596,656 | Ps. | (189,838 | ) | |||||
Variances
|
107,576 | 138,279 | (30,703 | ) | ||||||||
June 30, 2015
|
Ps. | 514,394 | Ps. | 734,935 | Ps. | (220,541 | ) |
June 30,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Income Statement
|
||||||||||||
Financial income
|
Ps. | 5,559,510 | Ps. | 4,666,910 | Ps. | 2,418,505 | ||||||
Financial expenses
|
(3,241,306 | ) | (2,399,052 | ) | (1,281,120 | ) | ||||||
Net financial income
|
Ps. | 2,318,204 | Ps. | 2,267,858 | Ps. | 1,137,385 | ||||||
Provision for loan losses
|
(405,973 | ) | (333,025 | ) | (258,629 | ) | ||||||
Income from services
|
3,264,698 | 2,145,423 | 1,365,116 | |||||||||
Expenses for services
|
(768,870 | ) | (682,638 | ) | (290,908 | ) | ||||||
Administrative expenses
|
(3,411,162 | ) | (2,380,651 | ) | (1,621,522 | ) | ||||||
Net income from financial transactions
|
Ps. | 996,897 | Ps. | 1,016,967 | Ps. | 331,442 | ||||||
Miscellaneous income
|
317,530 | 188,928 | 193,422 | |||||||||
Miscellaneous expenses
|
(466,554 | ) | (286,596 | ) | (168,735 | ) | ||||||
Income before income taxes and Non-controlling interest
|
Ps. | 847,873 | Ps. | 919,299 | Ps. | 356,129 | ||||||
Income taxes
|
(332,940 | ) | (314,005 | ) | (96,586 | ) | ||||||
Net income under U.S. GAAP
|
Ps. | 514,933 | Ps. | 605,294 | Ps. | 259,543 | ||||||
Less Net (Loss) attributable to the Non-controlling interest
|
4,369 | 10,284 | (8,834 | ) | ||||||||
Net income attributable Controlling interest in accordance with U.S. GAAP
|
Ps. | 519,302 | Ps. | 615,578 | Ps. | 250,709 | ||||||
Other comprehensive income (loss):
|
||||||||||||
Unrealized gains (loss) on securities
|
15,591 | 22,283 | (7,377 | ) | ||||||||
Other comprehensive income (loss)
|
Ps. | 15,591 | Ps. | 22,283 | Ps. | (7,377 | ) | |||||
Comprehensive income
|
Ps. | 534,893 | Ps. | 637,861 | Ps. | 243,332 |
Issue date
|
Maturity date
|
Annual interest rate
|
||
Banco Hipotecario S.A.
|
||||
Series XXX (Ps. 314,611)
|
09/04/15
|
03/04/17
|
a/b
|
Mixed (c)
|
Series XXXI (US$. 14,730 thousand)
|
09/04/15
|
09/04/18
|
a
|
2.0%
|
BACS Banco de Crédito y Securitización S.A.
|
||||
Series VI (Ps. 141,666)
|
07/23/15
|
04/24/17
|
a/b
|
Mixed (d)
|
Tarshop S.A.
|
||||
Series XXII (Ps. 126,667)v
|
07/30/15
|
01/30/17
|
a
|
29.0%
|
Page
|
|
Consolidated Financial Statements:
|
|
Independent Auditors Report
|
F-288
|
Consolidated Balance Sheet
As of June 30, 2015 and 2014
|
F-289
|
Consolidated Statements of Operations
For the Years Ended June 30, 2015, 2014, and 2013
|
F-290
|
Consolidated Statements of Changes in Members’ Deficit
For the Years Ended June 30, 2015, 2014, and 2013
|
F-291
|
Consolidated Statements of Cash Flows
For the Years Ended June 30, 2015, 2014, and 2013
|
F-292
|
Consolidated Notes to Financial Statements
June 30, 2015, 2014, and 2013
|
F-293
|
(A LIMITED LIABILITY COMPANY)
|
CONSOLIDATED BALANCE SHEETS
|
AS OF JUNE 30,
|
(Amounts in US dollars)
|
2015
|
2014
|
|||||||
Real estate, net
|
$ | 140,469,010 | $ | 142,358,747 | ||||
Cash and cash equivalents
|
1,075,395 | 851,726 | ||||||
Tenant receivables, net of allowance for doubtful accounts of
|
||||||||
$132,141 and $7,264 respectively
|
344,104 | 422,944 | ||||||
Prepaid expenses and other assets
|
5,809,307 | 5,476,492 | ||||||
Due from related party
|
125,029 | 120,274 | ||||||
Restricted cash
|
3,477,967 | 6,155,597 | ||||||
Deferred rent receivable
|
8,856,399 | 6,938,578 | ||||||
Lease intangibles, net
|
26,533,839 | 30,012,973 | ||||||
Goodwill
|
5,422,615 | 5,422,615 | ||||||
Total
|
$ | 192,113,665 | $ | 197,759,946 | ||||
Liabilities:
|
||||||||
Note payable
|
$ | 113,201,357 | $ | 113,201,357 | ||||
Accrued interest payable
|
316,216 | 313,950 | ||||||
Accounts payable and accrued expenses
|
3,031,831 | 1,584,699 | ||||||
Due to related parties
|
319,133 | 553,616 | ||||||
Deferred revenue
|
918,800 | 619,885 | ||||||
Tenants’ security deposits
|
682,727 | 657,978 | ||||||
Deferred ground rent payable
|
136,727,666 | 108,312,912 | ||||||
Lease intangibles, net
|
42,365,499 | 45,279,291 | ||||||
Total liabilities
|
297,563,229 | 270,523,688 | ||||||
Members' deficit
|
(105,449,564 | ) | (72,763,742 | ) | ||||
Total
|
$ | 192,113,665 | $ | 197,759,946 | ||||
(A LIMITED LIABILITY COMPANY)
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
FOR THE YEARS ENDED JUNE 30,
|
(Amounts in US dollars)
|
2015
|
2014
|
2013
|
||||||||||
Revenues
|
||||||||||||
Base rents
|
$ | 40,597,526 | $ | 38,375,303 | $ | 38,146,887 | ||||||
Tenant reimbursements and escalations
|
6,903,479 | 5,427,358 | 5,354,160 | |||||||||
Other rental revenue
|
40,779 | 45,292 | 73,833 | |||||||||
Other revenue
|
1,622 | - | - | |||||||||
Interest income
|
- | - | 625 | |||||||||
Total
|
47,543,406 | 43,847,953 | 43,575,505 | |||||||||
Expenses
|
||||||||||||
Real estate taxes
|
10,716,257 | 9,919,196 | 9,442,029 | |||||||||
Utilities
|
2,927,214 | 2,598,340 | 2,511,198 | |||||||||
Janitorial
|
2,056,750 | 2,157,449 | 2,054,086 | |||||||||
Insurance
|
318,027 | 315,545 | 296,897 | |||||||||
Repairs and maintenance
|
2,262,799 | 1,445,342 | 1,332,208 | |||||||||
Bad debt expense
|
124,877 | - | 433,551 | |||||||||
Security
|
1,047,372 | 912,362 | 846,602 | |||||||||
General and administrative
|
835,373 | 829,010 | 875,597 | |||||||||
Management fees
|
988,189 | 948,084 | 877,898 | |||||||||
Elevator
|
311,875 | 286,013 | 174,475 | |||||||||
HVAC
|
62,442 | 107,515 | 48,947 | |||||||||
Tenant reimbursable costs
|
154,557 | 122,139 | 159,564 | |||||||||
Ground rent
|
45,457,736 | 45,457,735 | 45,457,737 | |||||||||
Interest expense
|
4,786,205 | 4,789,913 | 4,843,275 | |||||||||
Amortization
|
3,005,570 | 3,087,330 | 2,947,812 | |||||||||
Depreciation
|
5,599,278 | 4,886,008 | 4,428,733 | |||||||||
Total
|
80,654,521 | 77,861,981 | 76,730,609 | |||||||||
Net loss
|
$ | (33,111,115 | ) | $ | (34,014,028 | ) | $ | (33,155,104 | ) |
(A LIMITED LIABILITY COMPANY)
|
||||||
CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS' DEFICIT
|
||||||
FOR THE YEARS ENDED JUNE 30,
|
||||||
(Amounts in US dollars)
|
2015
|
2014
|
2013
|
||||||||||
Balance, beginning of years
|
$ | (72,763,742 | ) | $ | (43,679,661 | ) | $ | (20,096,088 | ) | |||
Contributions from members
|
425,293 | 4,952,500 | 9,571,531 | |||||||||
Distribution to member
|
- | (22,553 | ) | - | ||||||||
Net loss
|
(33,111,115 | ) | (34,014,028 | ) | (33,155,104 | ) | ||||||
Balance, end of years
|
$ | (105,449,564 | ) | $ | (72,763,742 | ) | $ | (43,679,661 | ) | |||
2015
|
2014
|
2013
|
||||||||||
Operating activities
|
||||||||||||
Net loss
|
$ | (33,111,115 | ) | $ | (34,014,028 | ) | $ | (33,155,104 | ) | |||
Adjustments to reconcile net loss to net cash
|
||||||||||||
used in operating activities:
|
||||||||||||
Amortization
|
3,005,570 | 3,087,330 | 2,947,812 | |||||||||
Depreciation
|
5,599,278 | 4,886,008 | 4,428,733 | |||||||||
Bad debt (recovery) expense
|
124,877 | (3,827 | ) | 433,551 | ||||||||
Deferred rent
|
(1,917,821 | ) | (1,929,668 | ) | (1,972,066 | ) | ||||||
Below market lease amortization
|
(2,475,983 | ) | (2,821,032 | ) | (3,287,160 | ) | ||||||
Above market lease amortization
|
1,442,682 | 1,544,576 | 1,548,129 | |||||||||
Above market ground lease amortization
|
(437,809 | ) | (437,809 | ) | (437,808 | ) | ||||||
Deferred ground rent
|
28,414,754 | 28,822,593 | 29,220,501 | |||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Restricted cash
|
2,702,379 | 525,764 | (2,616,256 | ) | ||||||||
Due from related party
|
(4,755 | ) | - | 4,000 | ||||||||
Tenant receivables
|
(46,037 | ) | (86,094 | ) | (78,989 | ) | ||||||
Prepaid expenses and other assets
|
(332,815 | ) | (340,620 | ) | (233,930 | ) | ||||||
Accrued interest payable
|
2,273 | (3,019 | ) | (3,332 | ) | |||||||
Accounts payable and accrued expenses
|
349,380 | 33,811 | (569,720 | ) | ||||||||
Due to related parties
|
(234,483 | ) | 208,304 | 34,445 | ||||||||
Deferred leasing costs
|
(994,677 | ) | (1,526,938 | ) | (795,940 | ) | ||||||
Unearned revenue
|
298,915 | 310,488 | 51,876 | |||||||||
Net cash (used in) provided by operating activities
|
2,384,613 | (1,744,161 | ) | (4,481,258 | ) | |||||||
Investing activities
|
||||||||||||
Additions to real estate
|
(2,586,237 | ) | (3,700,979 | ) | (4,934,785 | ) | ||||||
Net cash used in investing activities
|
(2,586,237 | ) | (3,700,979 | ) | (4,934,785 | ) | ||||||
Financing activities
|
||||||||||||
Note principal payments
|
- | (1,912 | ) | (110,817 | ) | |||||||
Contributions from members
|
425,293 | 4,952,500 | 9,571,531 | |||||||||
Net cash provided by financing activities
|
425,293 | 4,950,588 | 9,460,714 | |||||||||
Net (decrease) increase in cash and cash equivalents
|
223,669 | (494,552 | ) | 44,671 | ||||||||
Cash and cash equivalents, beginning of years
|
851,726 | 1,346,278 | 1,301,607 | |||||||||
Cash and cash equivalents, end of years
|
$ | 1,075,395 | $ | 851,726 | $ | 1,346,278 | ||||||
Supplemental disclosure of cash flow information:
|
||||||||||||
Interest paid
|
$ | 4,783,939 | $ | 4,792,932 | $ | 4,846,607 | ||||||
Schedule of Noncash Investing Activities
|
||||||||||||
Real estate additions were financed through accounts payable
|
$ | 1,691,693 | $ | 568,390 | $ | 507,133 | ||||||
Deferred leasing costs additions were financed through accounts payable
|
$ | 90,308 | $ | 115,867 | $ | - | ||||||
Schedule of Noncash Financing Activities
|
||||||||||||
Lobby exhibit acquired in the year ended June 30, 2013, included in real
|
||||||||||||
estate, and transferred to a 49% member of the Company as a distribution.
|
$ | - | $ | 22,553 | $ | - |
Percentage of
Ownership
|
Initial Capital
Contributions
|
|||||||
IRSA International, LLC
|
49.00 | $ | 15,417,925 | |||||
Marciano Investment Group, LLC
|
42.00 | 13,215,365 | ||||||
Lomas Urbanas S.A.
|
2.27 | 714,259 | ||||||
Avi Chicouri
|
3.07 | - | ||||||
Par Holdings, LLC
|
3.66 | - | ||||||
Total
|
100.00 | $ | 29,347,549 |
Certain prior year balances have been reclassified to conform to the current year consolidated financial statement presentation.
|
2015
|
2014
|
|||||||
Building and improvements
|
$ | 144,892,369 | $ | 144,879,174 | ||||
Tenant improvements
|
16,334,789 | 12,638,444 | ||||||
161,227,158 | 157,517,618 | |||||||
Less: accumulated depreciation
|
(20,758,148 | ) | (15,158,871 | ) | ||||
Total
|
$ | 140,469,010 | $ | 142,358,747 |
Depreciation expense amounted to $5,599,278 and $4,886,008, and $4,428,733 for the years ended June 30, 2015, 2014, and 2013, respectively.
|
Leases
In-place
|
Leasing
Costs
|
Above
Market
Leases
|
Total
|
Below
Market
Leases
|
Above Market
Ground Leases
|
Total
|
||||||||||||||||||||||
Cost
|
$ | 27,149,892 | $ | 4,111,694 | $ | 15,316,749 | $ | 46,578,335 | $ | 30,470,806 | $ | 29,041,332 | $ | 59,512,138 | ||||||||||||||
Less: accumulated
Amortization
|
(12,088,790 | ) | (1,083,075 | ) | (6,872,631 | ) | (20,044,496 | ) | (15,176,499 | ) | (1,970,140 | ) | (17,146,639 | ) | ||||||||||||||
Totals
|
$ | 15,061,102 | $ | 3,028,619 | $ | 8,444,118 | $ | 26,533,839 | $ | 15,294,307 | $ | 27,071,192 | $ | 42,365,499 |
Leases
In-place
|
Leasing
Costs
|
Above
Market
Leases
|
Total
|
Below
Market
Leases
|
Above Market
Ground Leases
|
Total
|
||||||||||||||||||||||
Cost
|
$ | 27,149,892 | $ | 3,142,576 | $ | 15,316,749 | $ | 45,609,217 | $ | 30,470,806 | $ | 29,041,332 | $ | 59,512,138 | ||||||||||||||
Less: accumulated
Amortization
|
(9,520,879 | ) | (645,416 | ) | (5,429,949 | ) | (15,596,244 | ) | (12,700,516 | ) | (1,532,331 | ) | (14,232,847 | ) | ||||||||||||||
Totals
|
$ | 17,629,013 | $ | 2,497,160 | $ | 9,886,800 | $ | 30,012,973 | $ | 17,770,290 | $ | 27,509,001 | $ | 45,279,291 |
Leases
In-place
|
Leasing
Costs
|
Above Market Leases
|
Total
|
Below Market Leases
|
Above Market Ground Leases
|
Total
|
||||||||||||||||||||||
2016
|
$ | 2,541,147 | $ | 448,938 | $ | 1,407,364 | $ | 4,397,449 | $ | 2,463,176 | $ | 437,809 | $ | 2,900,985 | ||||||||||||||
2017
|
2,540,843 | 380,183 | 1,407,364 | 4,328,390 | 2,459,981 | 437,809 | 2,897,790 | |||||||||||||||||||||
2018
|
2,483,557 | 278,611 | 1,407,364 | 4,169,532 | 2,387,551 | 437,809 | 2,825,360 | |||||||||||||||||||||
2019
|
2,464,461 | 260,308 | 1,407,364 | 4,132,133 | 2,363,408 | 437,809 | 2,801,217 | |||||||||||||||||||||
2020
|
2,462,742 | 213,759 | 1,407,364 | 4,083,865 | 2,356,387 | 437,809 | 2,794,196 | |||||||||||||||||||||
Thereafter
|
2,568,352 | 1,446,820 | 1,407,298 | 5,422,470 | 3,263,804 | 24,882,147 | 28,145,951 | |||||||||||||||||||||
Totals
|
$ | 15,061,102 | $ | 3,028,619 | $ | 8,444,118 | $ | 26,533,839 | $ | 15,294,307 | $ | 27,071,192 | $ | 42,365,499 |
Purchase Date
|
Target IRR
|
|||
April 30, 2020
|
7.47 | % | ||
April 30, 2037
|
7.67 | % | ||
April 30, 2047
|
7.92 | % | ||
April 30, 2057
|
8.17 | % | ||
April 30, 2067
|
8.42 | % | ||
April 30, 2077
|
8.67 | % |
Ground Lease
|
Ground Sub-Sublease
|
Total
|
||||||||||
2016
|
$ | 17,139,836 | $ | 759,000 | $ | 17,898,836 | ||||||
2017
|
17,568,332 | 759,000 | 18,327,332 | |||||||||
2018
|
18,007,540 | 759,000 | 18,766,540 | |||||||||
2019
|
18,457,729 | 759,000 | 19,216,729 | |||||||||
2020
|
18,934,872 | 632,500 | 19,567,372 | |||||||||
Thereafter
|
2,837,562,375 | - | 2,837,562,375 | |||||||||
Total
|
$ | 2,927,670,684 | $ | 3,668,500 | $ | 2,931,339,184 |
2016
|
$ | 39,207,929 | ||
2017
|
40,626,201 | |||
2018
|
38,220,542 | |||
2019
|
37,075,235 | |||
2020
|
36,531,739 | |||
Thereafter
|
59,314,354 | |||
Total
|
$ | 250,976,000 |
2015
|
2014
|
|||||||
Due from related party:
|
||||||||
Lipstick Management LLC
|
$ | 123,959 | $ | 120,274 | ||||
Rigby 183 LLC
|
405 | - | ||||||
I Madison LLC
|
310 | - | ||||||
IRSA International LLC
|
355 | - | ||||||
$ | 125,029 | $ | 120,274 |
2015
|
2014
|
|||||||
Due to related party:
|
||||||||
IRSA International, LLC
|
$ | (39,979 | ) | $ | (39,979 | ) | ||
Lipstick Management LLC
|
(38,280 | ) | (272,763 | ) | ||||
IRSA Inversiones y Representaciones
|
||||||||
Sociedad Anonima
|
(240,874 | ) | (240,874 | ) | ||||
$ | (319,133 | ) | $ | (553,616 | ) |
Corporate Departments
|
Department
|
Division / Subdivision
|
Distribution Method
|
Human Resources
|
Human Resources
|
By headcount (non-corporate personnel) and weighting the percentages of other areas (corporate personnel).
|
|
Project Management
|
|||
Project Quality
|
|||
Safety and Hygiene
|
|||
Finance
|
Capital Markets
|
Weighting is as follows:
Capital Markets 20%
Relations with Investors 20%
Financial Risk 10%
Financial Administration 20%
Planning 20%
Financial Analysis 10%
Investors Relations: Number of business highlights during the semester, number of result announcements, number of meetings with investors (current or potential) to discuss the companies’ business and strategy, number of active coverages, number of result conferences, the complexity of the website of each company, number of relevant facts published in the Argentine Securities and Exchange Commission and the US Securities and Exchange Commission, and number of Roadshows (Deal o Non-Deal). All items involved are weighted in equal parts.
Capital Markets: Amount of financial transactions conducted in the period weighted at 70% and the remaining 30% corresponds to updates of offering memoranda and “horizontal” works (20F, annual reports, Press Release, etc.)
Financial Risk: Time invested in the duties performed.
Financial Administration: Total assets weighted at 40% and total liabilities weighted at 60%. The resulting percentage shall be weighted at 80% over the total. The remaining 20% will correspond to the percentage that each company consummates over the total inquiries for special transactions.
- Planning: Proportional among the three companies.
Financial Analysis: Time devoted to the tasks performed.
|
|
Relations with Investors
|
|||
Financial Risk
|
|||
Financial Administration
|
|||
Planning
|
|||
Financial Analysis
|
|||
Institutional Relations
|
Institutional Relations
|
Tasks performed and the time spent in each.
|
|
Administration and Control
Each one of the sectors comprising the Department is weighted.
|
Accounting and Reporting
|
The records of accounting and revenues per company are weighted.
|
|
Taxes
|
Salaries are weighted according to the position and tasks performed (per company and in equal shares)
|
||
Budget and Global Management Control
|
Same percentage as Administration and Control Department
|
||
SOX Regulation
|
Distribution of key control % per front / company (scope matrixes on 2012 base + parking space process to be included in 2013)
|
||
Shared Services Center (CSC)
(The percentages of all the sectors reporting to the CSC are weighted according to projected salaries of the sector in question over CSC total salaries).
|
Expenses Administration
|
Number of Expense Transactions performed by each Company + Direct Allocation of Resources
|
|
Revenues Administration
|
Number of Revenue Transactions performed by each Company + Direct Allocation of Resources
|
||
Customer Administration
|
Direct Allocation of Resources
|
||
Collections Administration
|
Direct Allocation of Resources
|
||
Treasury Administration
|
Number of Treasury Transactions performed by each Company.
|
||
Own Account Administration
|
Number of Transactions performed by each Company.
|
||
Technology
|
Weighting of time spent in each task (related to the services).
|
||
IT Services
|
Number of CASTI incidents processed for each Company.
|
||
Master Data
|
According to the time devoted to each company during the previous semester.
|
||
Maintenance Systems
|
Hours devoted to each task.
|
||
Project Systems
|
Hours devoted to each task.
|
||
Commercial Transactions
|
Hours devoted to each task.
|
||
IT Security
|
Weighting of time spent in each task.
|
||
Process Quality
|
Weighting of time spent in each task.
|
||
CSC Human Resources
|
50% weighting of % of CSC sectors; 50% weighting of Corporate sectors.
|
||
Errand Running Service
|
Number of errands run.
|
||
Real Estate Business Management
(each of the Departments comprising the Area are weighted. It does not render services to Cresud)
|
Real Estate IT Services
|
70% IRSAPC, 30% to be distributed IRSAPC and IRSA based on supervised projects.
|
|
Real Estate Business Analysis
|
Hours devoted to reviewed projects as applicable to IRSA PC or IRSA.
|
||
Real Estate Credit Risk
|
Hours worked for each company.
|
||
Real Estate Legal Affairs
|
Weighting of hours and salaries.
|
||
Real Estate Budget and Management Control
|
Actual revenues per company.
|
||
Real Estate Business Board of Directors to be Distributed
|
Real Estate Business Board of Directors to be Distributed
|
Proportional between IRSA and IRSAPC. Excludes Cresud.
|
|
Real Estate Business HHRR
|
Real Estate Business HHRR
|
Based on payroll.
|
|
Insurance
|
Insurance
|
Based on the amount of premiums under the annual insurance program.
|
|
Safety
|
Safety
|
Per hour
|
|
Contracts
|
Contracts
|
Number of contracts executed.
|
|
Technical, Infrastructure and Services, Architecture and Design, and Development and Works Department
An average is obtained from the Departments reporting to it
|
Technical, Infrastructure and Services
(IRSAPC – IRSA: Weighted average from the Departments reporting to it less the percentage allocated to CRESUD. CRESUD: a percentage is calculated based on the hours spent in the tasks performed/planned)
|
Planning and Control
|
Weighted average of the areas under the supervision of the TIS Department of IRSA and IRSAPC, excluding CRESUD.
|
Logistics
|
Weighted between directly assigned personnel and centralized personnel distributed per square meter of the real property (IRSA and IRSAPC) and time spent in tasks (CRESUD).
|
||
Distributed Operations
|
Square meters of real property held, operated and to which maintenance services are provided (IRSA and IRSAPC) and time spent in tasks (CRESUD).
|
||
Architecture
|
IRSA/IRSAPC: Personnel distributed per surface area and number of stores.
|
||
Third parties' services
|
Distribution of resource allocation.
|
||
Traveling Personnel
|
Maintenance hours (IRSA and IRSAPC) and time spent in tasks (CRESUD).
|
||
Engineering and Maintenance
|
Square meters of real property held, to which maintenance, engineering and other services are provided (IRSA and IRSAPC) and time spent in tasks (CRESUD).
|
||
Development and Works
|
Tasks performed and time spent in each.
|
||
Architecture and Design
|
Completed projects.
|
||
Purchases and Hirings
|
Purchases and Hirings
|
Weighted volume and amounts of purchase orders.
|
|
Environment and Quality
|
Environment and Quality
|
The distribution of corporate costs of the Environment, Farming Quality and Standardization area will be made according to the hours devoted to each global topic by person and company during the period.
|
|
Real Estate
|
Real Estate
|
Salaries are weighted according to the position and tasks performed (per companies and in equal shares).
|
|
Governmental Affairs
|
Weighting of allocated projects.
|
||
Hotels
|
Hotels
|
100% IRSA.
|
|
Internal Audit
|
Internal Audit
|
Times estimated/forecast in the annual plan.
|
|
Fraud Prevention
|
Fraud Prevention
|
Proportional among the three companies
|
|
Board of Directors to be Distributed
|
Board of Directors to be Distributed
|
Proportional among the three companies
|
|
Audit Committee
|
Audit Committee
|
Weighting of tasks performed.
|
|
General Management Department to be Distributed
|
General Management Department to be Distributed
|
Proportional among the three companies
|
|
Board of Directors’ Safety
|
Board of Directors’ Safety
|
Proportional among the three companies
|
Name of the entity
|
Place of business / country of incorporation
|
Direct equity interest of IRSA:
|
|
IRSA Propiedades Comerciales S.A. (IRSA CP)
|
Argentina
|
E-Commerce Latina S.A.
|
Argentina
|
Efanur S.A.
|
Uruguay
|
Hoteles Argentinos S.A.
|
Argentina
|
Inversora Bolívar S.A.
|
Argentina
|
Llao Llao Resorts S.A. (1)
|
Argentina
|
Nuevas Fronteras S.A.
|
Argentina
|
Palermo Invest S.A.
|
Argentina
|
Ritelco S.A.
|
Uruguay
|
Solares de Santa María S.A.
|
Argentina
|
Tyrus S.A.
|
Uruguay
|
Unicity S.A.
|
Argentina
|
Interest indirectly held through APSA:
|
|
Arcos del Gourmet S.A.
|
Argentina
|
Emprendimiento Recoleta S.A.
|
Argentina
|
Fibesa S.A.
|
Argentina
|
Panamerican Mall S.A.
|
Argentina
|
Shopping Neuquén S.A.
|
Argentina
|
Torodur S.A.
|
Uruguay
|
Interest indirectly held through Tyrus S.A.:
|
|
Dolphin Fund Ltd (2)
|
Bermuda
|
I Madison LLC
|
United States
|
IRSA Development LP
|
United States
|
IRSA International LLC
|
United States
|
Jiwin S.A.
|
Uruguay
|
Liveck S.A.
|
Uruguay
|
Real Estate Investment Group LP (“REIG”)
|
Bermuda
|
Real Estate Investment Group II LP
|
Bermuda
|
Real Estate Investment Group III LP
|
Bermuda
|
Real Estate Investment Group IV LP
|
Bermuda
|
Real Estate Investment Group V LP
|
Bermuda
|
Real Estate Strategies LLC
|
United States
|
Interest indirectly held through Efanur S.A.:
|
|
Real State Strategies LP
|
Bermuda
|
(1)
|
We have consolidated the investment in Llao Llao Resorts S.A. considering its equity interest and a shareholder agreement that confers it majority of votes in the decision making process.
|
(2)
|
We have consolidated our indirect interest in Dolphin Fund Ltd. (DFL) considering its exposure to variable returns coming from its investment in DFL and the nature of the relationship between the Group and the shareholders with right to vote of DFL.
|
1.
|
I have reviewed this annual report on Form 20-F of IRSA Inversiones y Representaciones Sociedad Anónima (the “Company”) for the fiscal year ended June 30, 2015;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period converted by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial position at June 30, 2015 and 2014 and the results of operations and cash flows of the Company for the periods ended June 30, 2015, 2014 and 2013;
|
4.
|
The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15(d)-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervisions, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
|
d)
|
Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and
|
5.
|
The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.
|
|
IRSA Inversiones y Representaciones Sociedad Anónima
|
||
November 17, 2015.
|
By:
|
/s/ Eduardo S. Elsztain
|
|
Eduardo S. Elsztain
|
|||
Chief Executive Officer
|
|||
1.
|
I have reviewed this annual report on Form 20-F of IRSA Inversiones y Representaciones Sociedad Anónima (the “Company”) for the fiscal year ended June 30, 2015;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period converted by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial position at June 30, 2015 and 2014 and the results of operations and cash flows of the Company for the periods ended June 30, 2015, 2014 and 2013;
|
4.
|
The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15(d)-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervisions, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
|
d)
|
Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and
|
5.
|
The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.
|
IRSA Inversiones y Representaciones Sociedad Anónima
|
|||
November 17, 2015.
|
By:
|
/s/ Matias I. Gaivironsky
|
|
Matias I. Gaivironsky
|
|||
Chief Financial Officer
|
|||
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities and Exchange Act of 1934, except as disclosed in “Item 15. Controls and Procedures ̶ A. Disclosure Controls and Procedures” of the Report; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
IRSA Inversiones y Representaciones Sociedad Anónima
|
|||
November 17, 2015.
|
By:
|
/s/ Eduardo S. Elsztain
|
|
Eduardo S. Elsztain
|
|||
Chief Executive Officer
|
|||
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities and Exchange Act of 1934, except as disclosed in “Item 15. Controls and Procedures ̶ A. Disclosure Controls and Procedures” of the Report; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
IRSA Inversiones y Representaciones Sociedad Anónima
|
|||
November 17, 2015.
|
By:
|
/s/ Matías Gaivironsky
|
|
Matías Gaivironsky
|
|||
Chief Financial Officer
|
|||
* *
|
The following is a convenience translation to English.
|
Consolidated Statements of Financial Position
|
4-5
|
Consolidated Statements of Income
|
6
|
Consolidated Statements of Comprehensive Income
|
7
|
Statements of Changes in Equity
|
8-10
|
Consolidated Statements of Cash Flows
|
11-12
|
Notes to the Financial Statements
|
|
Note 1-General
|
13-23
|
Note 2- Significant Accounting Policies
|
24-52
|
Note 3- Investments
|
53-92
|
Note 4- Other investments, including derivatives
|
92-93
|
Note 5- Loans, deposits, charged and restricted deposits and debit balances
|
93
|
Note 6- Fixed Assets
|
94-96
|
Note 7- Investment Property
|
97-101
|
Note 8- Trade Receivables
|
102
|
Note 9- Inventory
|
102
|
Note 10- Intangible Assets
|
103-106
|
Note 11- Accounts Receivable and Debit Balances
|
107
|
Note 12- Inventory of buildings for sale
|
107
|
Note 13- Assets and liabilities of realization groups and other assets and liabilities classified as held-for-sale
|
108
|
Note 14- Cash and Cash Equivalents
|
108
|
Note 15- Equity and Reserves
|
109-116
|
Note 16- Bank Loans and other Financial Liabilities at Amortized Cost
|
117-170
|
Note 17- Provisions
|
170-171
|
Note 18- Employee benefits
|
172
|
Note 19- Accounts Payable and Credit Balances
|
173
|
Note 20- Trade Payables
|
173
|
Note 21- Financial Instruments
|
173-197
|
Note 22- Liens and Guarantees
|
198-200
|
Note 23- Contingent Liabilities, Commitments and Lawsuits
|
201-241
|
Note 24- Sales and services
|
242
|
Note 25- The Group's share of the profits (losses) of investee companies that are treated under the equity method of accounting, net
|
242
|
Note 26- Profit (loss) on disposal and the writing down of investments and assets, and dividends
|
243
|
Note 27- Changes in the fair value of investment property
|
244
|
Note 28- Financing income and expenses
|
245
|
Note 29- Cost of sales and services
|
246
|
Note 30- Selling and marketing expenses
|
247
|
Note 31- Administrative and general expenses
|
247
|
Note 32- Taxes on income
|
248-253
|
Note 33- Related and Interested Parties
|
254-279
|
Note 34- Segments
|
280-292
|
Note 35- Events after the date of the statement of financial position
|
292-294
|
Appendix to the Financial Statements
|
295-297
|
1.
|
Included by way of reference to attached papers to the financial statements of Discount Investment Corporation Ltd. as at December 31, 2014, which were submitted by it to the Israel Securities Authority and which were published on March 25, 2015 (reference no. 2015-01-061831).
|
˗
|
Economic papers in connection with an impairment test regarding the goodwill attributed toCellcom Israel Ltd. as at December 31, 2014.
|
2.
|
A valuation as at September 30, 2014 of a commerce and offices project, Great Wash Park, LLC in Las Vegas, which is partly held by the Company and Property & Building Corporation, Ltd. ("Property & Building"), is included in these financial statements by way of reference to the said valuation which is attached with the financial statements of Property & Building as at 30 September, 2014, which was filed by it to the Israel Securities Authority and published on November 16, 2014 (ref. no: 2014-01-195366)
|
3.
|
Data regarding the Company’s liabilities are attached to these financial statements, pursuant to Regulation 38E of the Securities Regulations (Periodic and Immediate Reports), 5730 - 1970, by way of reference to the aforementioned data which are included in the report regarding the corporation's liabilities, which was submitted by the company to the Israel Securities Authority and published on March 31, 2015 (reference number 2015-01-125458).
|
December 31
|
|||||||||
Note
|
2014(2)
|
2013(2)
|
|||||||
NIS millions
|
|||||||||
Non-current assets
|
|
||||||||
Investments in investee companies accounted by the equity method
|
3
|
3,753 | 3,749 | (1) | |||||
Other investments, including derivatives
|
4
|
2,122 | 355 | ||||||
Loans, pledged and restricted deposits and debit balances
|
5
|
151 | 93 | ||||||
Fixed assets
|
6
|
5,559 | 5,488 | ||||||
Investment property
|
7
|
11,175 | 9,827 | (3) | |||||
Assets designated for the payment of employee benefits
|
1 | 1 | |||||||
Long-term trade receivables
|
8
|
476 | 512 | ||||||
Real estate and other inventory
|
375 | 374 | |||||||
Deferred expenses
|
284 | 276 | |||||||
Deferred tax assets
|
32
|
53 | 157 | ||||||
Intangible assets
|
10
|
4,782 | 5,394 | (1) | |||||
28,731 | 26,226 | ||||||||
Current assets
|
|||||||||
Other investments, including derivatives
|
4
|
3,317 | 2,982 | ||||||
Loans, deposits and pledged and restricted deposits
|
5
|
514 | 667 | ||||||
Receivables and debit balances
|
11
|
384 | 455 | ||||||
Current tax assets
|
46 | 29 | |||||||
Trade receivables
|
8
|
2,712 | 3,059 | ||||||
Inventory
|
9
|
851 | 809 | ||||||
Inventory of buildings for sale
|
12
|
691 | 849 | ||||||
Assets of disposal groups and other assets classified as held for sale
|
13
|
5 | 4,779 | (1) | |||||
Cash and cash equivalents
|
14
|
3,578 | 6,313 | ||||||
12,098 | 19,942 | ||||||||
Total assets
|
40,829 | 46,168 | |||||||
(1)
|
Reclassified - see Note 1.F(1). below.
|
(2)
|
For the principal details regarding subsidiaries whose consolidation was discontinued or applied for the first time in the Company’s financial statements, see Note 3.I.3.b(1) below.
|
December 31
|
|||||||||
Note
|
2013(2)
|
2012(2)
|
|||||||
NIS millions
|
|||||||||
Capital
|
15
|
||||||||
Share capital
|
- | 61 | |||||||
Premium on shares
|
2,698 | 2,146 | |||||||
Capital reserves
|
(87 | ) | (401 | ) | |||||
Treasury shares
|
- | (656 | ) | ||||||
Accumulated losses
|
(2,834 | ) | (1,822 | ) | |||||
Capital deficit attributed to shareholders of the Company
|
(223 | ) | (672 | ) | |||||
Non-controlling interests
|
3,534 | 4,687 | |||||||
3,311 | 4,015 | ||||||||
Non-current liabilities
|
|||||||||
Debentures
|
16
|
18,721 | 20,672 | ||||||
Loans from banks and other financial liabilities
|
16
|
3,664 | 4,196 | ||||||
Hybrid financial instrument in respect of non-recourse loan
|
16
|
3,090 | 3,057 | ||||||
Financial liabilities presented at fair value
|
13 | 11 | |||||||
Other non-financial liabilities
|
108 | 121 | (1) (3) | ||||||
Provisions
|
17
|
235 | 132 | (1) | |||||
Deferred tax liabilities
|
32
|
1,508 | 1,456 | ||||||
Employee benefits
|
18
|
174 | 144 | ||||||
27,513 | 29,789 | ||||||||
Current liabilities
|
|||||||||
Debentures and current maturities of debentures
|
3,303 | 4,527 | |||||||
Credit from banking corporations and current maturities of loans from banks and others
|
16
|
1,863 | 2,482 | ||||||
Financial liabilities presented at fair value
|
50 | 101 | |||||||
Payables and credit balances
|
19
|
1,912 | 2,358 | (1) | |||||
Trade payables
|
20
|
2,504 | 2,291 | ||||||
Current tax liabilities
|
133 | 155 | |||||||
Overdraft
|
80 | 78 | |||||||
Provisions
|
17
|
160 | 207 | (1) | |||||
Liabilities of disposal groups and other liabilities classified as held for sale
|
- | 165 | |||||||
10,005 | 12,364 | ||||||||
Total capital and liabilities
|
40,829 | 46,168 |
For the year ended December 31
|
|||||||||||||
Note
|
2014(2)
|
2013(1)
|
2012 (1)
|
||||||||||
NIS millions
|
|||||||||||||
Revenues
|
|
||||||||||||
Sales and services
|
24
|
18,546 | 19,985 | 20,462 | |||||||||
The Group's share in the profit of investee companies accounted for by the equity method, net
|
25
|
- | 61 | - | |||||||||
Gain from realization and increase in value of investments assets and dividends
|
26A.
|
958 | 179 | (1) | 241 | ||||||||
Increase in fair value of investment property
|
27A.
|
439 | 417 | 540 | |||||||||
Other revenues
|
1 | 24 | 30 | ||||||||||
Financing income
|
28A.
|
1,200 | 665 | 824 | |||||||||
21,144 | 21,331 | 22,097 | |||||||||||
Expenses
|
|||||||||||||
Cost of sales and services
|
29
|
13,215 | 13,835 | (3) | 14,208 | (3) | |||||||
Research and development expenses
|
27 | 108 | 36 | ||||||||||
Selling and marketing expenses
|
30
|
3,503 | 3,501 | (3) | 3,427 | (3) | |||||||
General and administrative expenses
|
31
|
1,034 | 1,139 | 1,191 | |||||||||
The Group's share in the loss of investee companies accounted for by the equity method, net
|
25
|
500 | (5) | - | 932 | ||||||||
Loss from realization, impairment, and write-down of investments and assets
|
26B.
|
844 | 138 | 450 | |||||||||
Decrease in fair value of investment property
|
27B.
|
26 | 97 | - | |||||||||
Other expenses
|
11 | 13 | 60 | ||||||||||
Financing expenses
|
28B.
|
2,475 | 2,446 | 2,297 | |||||||||
21,635 | 21,277 | 22,601 | |||||||||||
Profit (loss) before taxes on income
|
(491 | ) | 54 | (504 | ) | ||||||||
Taxes on income
|
32
|
(359 | ) | (304 | ) | (452 | ) | ||||||
Loss for the year from continuing operations
|
(850 | ) | (250 | ) | (956 | ) | |||||||
Profit from discontinued operations, after tax
|
64 | 763 | (1) | 463 | |||||||||
Net profit (loss) for the year
|
(786 | ) | 513 | (493 | ) | ||||||||
Net profit (loss) for the year attributed to:
|
|||||||||||||
The Company’s owners
|
(999 | ) | (153 | ) | (733 | ) | |||||||
Non-controlling interests
|
213 | 666 | 240 | ||||||||||
(786 | ) | 513 | (493 | ) | |||||||||
Earnings (loss) per share to the Company’s owners(4)
|
15
|
NIS
|
NIS
|
NIS
|
|||||||||
Basic and diluted loss per share from continuing operations
|
(4.10 | ) | (2.52 | )(1) | (5.79 | ) | |||||||
Basic and diluted earnings per share from discontinued operations
|
0.13 | 1.82 | (1) | 2.43 | |||||||||
Basic and diluted earnings (loss) per share
|
(3.97 | ) | (0.7 | ) | (3.36 | ) |
(1)
|
For details regarding the deconsolidation of Clal Holdings Insurance Enterprises, dated August 21, 2013, see notes 3.H.5.b and 3.I.1. below .
|
(2)
|
For details regarding the deconsolidation of Given Imaging in February 2014, and regarding the profit generated by the realization of the investment therein, see note 3.H.6.a. below.
|
(3)
|
Reclassified - see note 1.F.(2). below.
|
(4)
|
The presented data has been retroactively adjusted, in accordance with the changes in the company's issued share capital, including the benefit component in the rights issuance subsequent to the date of the statement of financial position. See note 1.F.(3). below.
|
For the year ended December 31
|
||||||||||||
2014(1)
|
2013(1)
|
2012(1)
|
||||||||||
NIS millions
|
||||||||||||
Net profit (loss) for the year
|
(786 | ) | 513 | (493 | ) | |||||||
Other comprehensive income items after initial recognition under comprehensive income which have been transferred or will be transferred to profit and loss, net of tax
|
||||||||||||
Foreign currency translation differences for foreign operations
|
348 | (263 | ) | (23 | ) | |||||||
Foreign currency translation differences for foreign operations, charged to profit or loss
|
25 | 3 | 10 | |||||||||
Effective part in changes in the fair value of cash flow hedging
|
10 | (12 | ) | (5 | ) | |||||||
Net change in the fair value of cash flow hedging, charged to profit and loss
|
- | 11 | (15 | ) | ||||||||
Profit from hedging of net investment in foreign operations
|
- | - | 35 | |||||||||
Profit from hedging of net investment in foreign operations, charged to profit and loss
|
- | - | (35 | ) | ||||||||
Impairment of net assets, charged against revaluation reserve
|
- | - | (5 | ) | ||||||||
The Group's share in other comprehensive income (loss) in respect of investee companies accounted for by the equity method
|
572 | (315 | ) | (106 | ) | |||||||
Total other comprehensive income (loss) after initial recognition under comprehensive income which has been transferred or will be transferred to profit and loss
|
955 | (576 | ) | (144 | ) | |||||||
Other comprehensive income items which will not be transferred to profit and loss, net of tax
|
||||||||||||
Revaluation of fixed assets transferred to investment property
|
5 | 7 | 80 | |||||||||
Actuarial gain (loss) from defined benefit plan
|
(14 | ) | 6 | (23 | ) | |||||||
Change, net, in the fair value of financial assets at fair value through comprehensive income
|
(2 | ) | (8 | ) | (5 | ) | ||||||
The Group's share in other comprehensive income (loss) in respect of investee companies accounted by the equity method
|
3 | - | (5 | ) | ||||||||
Total other comprehensive income (loss) which will not be transferred to profit and loss
|
(8 | ) | 5 | 47 | ||||||||
Total comprehensive income (loss) for the year, net of tax
|
947 | (571 | ) | (97 | ) | |||||||
Total comprehensive income (loss) for the year
|
161 | (58 | ) | (590 | ) | |||||||
Attributed to:
|
||||||||||||
The Company’s owners
|
(385 | ) | (487 | ) | (804 | ) | ||||||
Non-controlling interests
|
546 | 429 | 214 | |||||||||
Comprehensive loss for the year
|
161 | (58 | ) | (590 | ) |
(1)
|
For the principal details regarding subsidiaries whose consolidation was discontinued or applied for the first time in the Company’s financial statements, see Note 3.I.3.b. below.
|
Attributed to the Company's owners | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Share capital | Premium on shares | Other reserves | Reserves in respect of transactions with non-controlling interests | Reserves from translation differences | Hedging reserves | Reserves in respect of available-for-sale financial assets through other comprehensive income | Revaluation reserves | Treasury shares | Accumulated losses | Total capital (capital deficit) atributed to shareholders of the Company | Non-controlling interests | Total Capital | ||||||||||||||||||||||||||||||||||||||||
NIS millions | ||||||||||||||||||||||||||||||||||||||||||||||||||||
For the year ended December 31, 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as at January 1, 2014
|
61 | 2,146 | 251 | 45 | (692 | ) | (71 | ) | (14 | ) | 80 | (656 | ) | (1,822 | ) | (672 | ) | 4,687 | 4,015 | |||||||||||||||||||||||||||||||||
Profit (loss) for the year
|
- | - | - | - | - | - | - | - | - | (999 | ) | (999 | ) | 213 | (786 | ) | ||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) for the year (see Note 15.E. below)
|
- | - | - | - | 502 | 114 | (1 | ) | 1 | - | (2 | ) | 614 | 334 | 948 | |||||||||||||||||||||||||||||||||||||
Transactions with owners charged directly to equity, investments of owners and distributions to owners
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in the Company’s capital (see note 15.A. below)
|
(61 | ) | (595 | ) | - | - | - | - | - | - | 656 | - | - | - | - | |||||||||||||||||||||||||||||||||||||
Conversion to capital of loans and issues (see note 15.B. below)
|
- | 1,147 | - | - | - | - | - | - | - | - | 1,147 | - | 1,147 | |||||||||||||||||||||||||||||||||||||||
Dividends to non-controlling interests
|
- | - | - | - | - | - | - | - | - | - | - | (349 | ) | (349 | ) | |||||||||||||||||||||||||||||||||||||
Acquisition of interests in subsidiaries from non-controlling interests (1) (see also note 3.H.4.B below)
|
- | - | - | (185 | ) | (123 | ) | - | - | - | - | - | (308 | ) | (859 | ) | (1,167 | ) | ||||||||||||||||||||||||||||||||||
Sale of interests in subsidiaries to non-controlling interests(2)
|
- | - | - | (5 | ) | - | - | - | - | - | - | (5 | ) | 38 | 33 | |||||||||||||||||||||||||||||||||||||
Change in non-controlling interests following discontinuance of consolidation of a subsidiary
(see note 3.H.6.a. below)
|
- | - | - | - | - | - | - | - | - | - | - | (538 | ) | (538 | ) | |||||||||||||||||||||||||||||||||||||
Share-based payments granted by consolidated companies
|
- | - | - | - | - | - | - | - | - | - | - | 9 | 9 | |||||||||||||||||||||||||||||||||||||||
Realization of financial assets measured at fair value through other comprehensive income
|
- | - | - | - | - | - | 11 | - | - | (11 | ) | - | - | - | ||||||||||||||||||||||||||||||||||||||
Balance as at December 31, 2014
|
- | 2,698 | 251 | (145 | ) | (313 | ) | 43 | (4 | ) | 81 | - | (2,834 | ) | (223 | ) | 3,535 | 3,312 |
(1)
|
Includes effects in respect of expirations of share-based payment instruments in consolidated companies.
|
(2)
|
Includes effects in respect of realizations of share-based payment instruments in consolidated companies.
|
Attributed to the Company's owners | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Share Capital | Premium on shares | Other reserves | Reserves in respect of transactions with non-controlling interests | Reserves from translation differences | Hedging reserves | Reserves in respect of available-for-sale financial assets through other comprehensive income | Revaluation reserves | Treasury shares | Accumulated losses | Total capital (capital deficit) attributed to shareholders of the Company | Non-controlling interests | Total capital | ||||||||||||||||||||||||||||||||||||||||
NIS millions | ||||||||||||||||||||||||||||||||||||||||||||||||||||
For the year ended December 31, 2013 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as at January 1, 2013
|
61 | 2,146 | 251 | 53 | (419 | ) | (68 | ) | (14 | ) | 78 | (656 | ) | (1,671 | ) | (239 | ) | 4,807 | 4,568 | |||||||||||||||||||||||||||||||||
Profit (loss) for the year
|
- | - | - | - | - | - | - | - | - | (153 | ) | (153 | ) | 666 | 513 | |||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) for the year (see Note 15.E. below)
|
- | - | - | - | (328 | ) | (10 | ) | (3 | ) | 3 | - | 4 | (334 | ) | (237 | ) | (571 | ) | |||||||||||||||||||||||||||||||||
Transactions with owners charged directly to equity, investments of owners and distributions to owners
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends to non-controlling interests
|
- | - | - | - | - | - | - | - | - | - | - | (319 | ) | (319 | ) | |||||||||||||||||||||||||||||||||||||
Acquisition of interests in subsidiaries from holders of non-controlling interests(1)
|
- | - | - | 14 | - | - | - | - | - | - | 14 | (25 | ) | (11 | ) | |||||||||||||||||||||||||||||||||||||
Sale of interests in subsidiaries to non-controlling interests(2)
|
- | - | - | (32 | ) | 64 | 7 | - | - | - | - | 39 | 580 | 619 | ||||||||||||||||||||||||||||||||||||||
Non-controlling interests in respect of business combination
|
- | - | - | - | - | - | - | - | - | - | - | 543 | 543 | |||||||||||||||||||||||||||||||||||||||
Change in non-controlling interests following discontinuance of consolidation of subsidiary (primarily Clal Holdings Insurance Enterprises)
|
- | - | - | - | - | - | - | - | - | - | - | (1,673 | ) | (1,673 | ) | |||||||||||||||||||||||||||||||||||||
Sale of interests in subsidiaries to non-controlling interests through profit sharing policies, net (3)
|
- | - | - | 10 | (9 | ) | - | - | - | - | - | 1 | 306 | 307 | ||||||||||||||||||||||||||||||||||||||
Transaction with controlling shareholder in subsidiary
|
- | - | - | - | - | - | - | - | - | - | - | 1 | 1 | |||||||||||||||||||||||||||||||||||||||
Share-based payments granted by consolidated companies
|
- | - | - | - | - | - | - | - | - | - | - | 38 | 38 | |||||||||||||||||||||||||||||||||||||||
Realization of financial assets measured at fair value through other comprehensive income
|
- | - | - | - | - | - | 3 | - | - | (3 | ) | - | - | - | ||||||||||||||||||||||||||||||||||||||
Amortization of revaluation reserve, following rise to control, to surplus
|
- | - | - | - | - | - | - | (1 | ) | - | 1 | - | - | - | ||||||||||||||||||||||||||||||||||||||
Balance as at December 31, 2013
|
61 | 2,146 | 251 | 45 | (692 | )(4) | (71 | ) | (14 | ) | 80 | (656 | ) | (1,822 | ) | (672 | ) | 4,687 | 4,015 |
(1)
|
Includes effects in respect of expiration of share-based payment instruments in consolidated companies.
|
(2)
|
Includes effects in respect of realization of share-based payment instruments in consolidated companies.
|
(3)
|
Including effects with respect to the discontinuance of the consolidation of Clal Holdings Insurance Enterprises
|
(4)
|
Includes NIS 14 million with respect to the assets and liabilities of Given Imaging Ltd., which are classified as held for sale.
|
Attributed to the Company's owners | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Share capital | Premium on shares | Other reserves | Reserves in respect of transactions with non-controlling interests | Reserves from translation differences | Hedging reserves | Reserves in respect of available-for-sale financial assets through other comprehensive income | Revaluation reserves | Treasury shares | Accumulated losses | Total capital (capital deficit) attributed to shareholders of the Company | Non-controlling interests | Total capital | ||||||||||||||||||||||||||||||||||||||||
NIS millions | ||||||||||||||||||||||||||||||||||||||||||||||||||||
For the year ended December 31, 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as at January 1, 2012
|
61 | 2,146 | 251 | 140 | (381 | ) | (19 | ) | (12 | ) | 60 | (656 | ) | (938 | ) | 652 | 7,310 | 7,962 | ||||||||||||||||||||||||||||||||||
Profit (loss) for the year
|
- | - | - | - | - | - | - | - | - | (733) | (733 | ) | 240 | (493 | ) | |||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) for the year (see Note 15.E. below)
|
- | - | - | - | (38 | ) | (49 | ) | (2 | ) | 31 | - | (13 | ) | (71 | ) | (26 | ) | (97 | ) | ||||||||||||||||||||||||||||||||
Transactions with owners charged directly to equity, investments of owners and distributions to owners
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends to non-controlling interests
|
- | - | - | - | - | - | - | - | - | - | - | (687 | ) | (687 | ) | |||||||||||||||||||||||||||||||||||||
Acquisition of interests in subsidiaries from holders of non-controlling interests(1)
|
- | - | - | (8 | ) | - | - | - | - | - | - | (8 | ) | (20 | ) | (28 | ) | |||||||||||||||||||||||||||||||||||
Sale of interests in subsidiaries to non-controlling interests(2)
|
- | - | - | - | - | - | - | - | - | - | - | 23 | 23 | |||||||||||||||||||||||||||||||||||||||
Change in non-controlling interests following discontinuance of consolidation of a subsidiary
|
- | - | - | - | - | - | - | - | - | - | - | (2,088 | ) | (2,088 | ) | |||||||||||||||||||||||||||||||||||||
Acquisition of interests in subsidiaries to non-controlling interests through profit sharing policies, net
|
- | - | - | (30 | ) | - | - | - | - | - | - | (30 | ) | (16 | ) | (46 | ) | |||||||||||||||||||||||||||||||||||
Share-based payments granted by consolidated companies
|
- | - | - | - | - | - | - | - | - | - | - | 22 | 22 | |||||||||||||||||||||||||||||||||||||||
Provision of beneficiary loans to a subsidiary
|
- | - | - | (6 | ) | - | - | - | - | - | - | (6 | ) | 6 | - | |||||||||||||||||||||||||||||||||||||
Charging the share of non-controlling interests in the capital deficit of a subsidiary to the owners of the Company
|
- | - | - | (43 | ) | - | - | - | - | - | - | (43 | ) | 43 | - | |||||||||||||||||||||||||||||||||||||
Amortization of revaluation reserve, following rise to control, to surplus
|
- | - | - | - | - | - | - | (13 | ) | - | 13 | - | - | - | ||||||||||||||||||||||||||||||||||||||
Balance as at December 31, 2012
|
61 | 2,146 | 251 | 53 | (419 | ) | (68 | ) | (14 | ) | 78 | (656 | ) | (1,671 | ) | (239 | ) | 4,807 | 4,568 |
(1)
|
Includes effects in respect of expirations of share-based payment instruments in consolidated companies.
|
(2)
|
Includes effects in respect of realizations of share-based payment instruments in consolidated companies.
|
For the year ended December 31
|
||||||||||||
2014(1)
|
2013(1)
|
2012(1)
|
||||||||||
NIS millions
|
||||||||||||
Cash flows from operating activities | ||||||||||||
Profit (loss) for the year
|
(786 | ) | 513 | (493 | ) | |||||||
Profit (loss) from discontinued operations, after tax
|
(64 | )(3) | (763 | ) (2)(3) | (463 | )(3) | ||||||
Adjustments:
|
||||||||||||
The Group's share in the loss (net profit) of investee companies accounted for by the equity method, net
|
500 | (61 | ) | 932 | ||||||||
Dividends received
|
27 | 40 | 77 | |||||||||
Realization losses (profits), decrease (increase) and write-downs, net, of investments, assets and dividends
|
(114 | ) | 41 | (2) | 209 | |||||||
Increase in fair value of real estate investments, net
|
(413 | ) | (320 | ) | (540 | ) | ||||||
Amortization of fixed assets and deferred expenses
|
776 | (4) | 754 | 819 | ||||||||
Amortization of intangible assets and others
|
355 | (5) | 374 | 423 | ||||||||
Financing costs, net
|
1,274 | 1,766 | 1,444 | |||||||||
Expenses of tax on income, net
|
359 | 304 | 452 | |||||||||
Income tax paid, net
|
(197 | ) | (208 | ) | (223 | ) | ||||||
Share-based payment transactions
|
9 | 27 | 13 | |||||||||
Receipts (payments) in respect of the settlement of derivatives, net
|
(6 | ) | (17 | ) | 20 | |||||||
1,720 | 2,368 | 2,670 | ||||||||||
Changes in other balance sheet items
|
||||||||||||
Change in other receivables and debit balances (including long term amounts)
|
(37 | ) | (53 | ) | (87 | ) | ||||||
Change in trade receivables (including long term amounts)
|
495 | 559 | 287 | |||||||||
Change in inventory
|
49 | 196 | 15 | |||||||||
Change in non-current inventory
|
(13 | ) | (43 | ) | (15 | ) | ||||||
Change in provisions and in employee benefits
|
2 | 9 | 27 | |||||||||
Change in trade payables
|
(20 | ) | (160 | ) | (140 | ) | ||||||
Change in other payables, credit balances and liabilities in respect of government grants and others (including long term amounts)
|
113 | (6) | 11 | (114 | ) | |||||||
589 | 519 | (27 | ) | |||||||||
Net cash provided from continuing operating activities
|
2,309 | 2,887 | 2,643 | |||||||||
Net cash provided from discontinued operating activities
|
- | 1,362 | 680 | |||||||||
Net cash provided from operating activities
|
2,309 | 4,249 | 3,323 |
(1)
|
For the principal details regarding subsidiaries whose consolidation was discontinued or applied in the Company’s financial statements, see Note 3.I.3.b. below.
|
(2)
|
For the details regarding the deconsolidation of Clal Holdings Insurance Enterprises and restatement with respect to discontinued operation, see notes 3.I.1, 3.H.5.a. and . 3.I.3.a. below.
|
(3)
|
Including effects with respect to the realization of an investment in Credit Suisse, see note 3.H.4.c. and 3.I.1. below.
|
(4)
|
Includes impairment loss in respect of fixed assets in the amount of NIS 54 million with respect to the current business plan of Shufersal, see note 3.H.3.B. below and amortization for impairment loss of excess cost attributecd to Shufersal in the amount of NIS 12 million.
|
(5)
|
Includes amortization for impairment loss of excess cost attributed to Shufersal in the amount of NIS 60 million.
|
(6)
|
Includes a provision for an onerous contract in the amount of NIS 101 million, and liabilities in respect of dismissal in the amount of NIS 29 million in respect of the current business plan of Shufersal, see note 3.H.3.B below.
|
For the year ended December 31
|
||||||||||||
2014(1)
|
2013(1)
|
2012(1)
|
||||||||||
NIS millions
|
||||||||||||
Cash flows from investing activities
|
||||||||||||
Deposits, loans and long term investments provided
|
(197 | ) | (2 | ) | (12 | ) | ||||||
Repayment of long term deposits and loans provided
|
95 | 18 | 10 | |||||||||
Decrease (increase) in pledged and restricted deposits, net
|
478 | (196 | ) | 550 | ||||||||
Current investments, loans and short-term deposits, net
|
(438 | ) | (915 | ) | (383 | ) | ||||||
Investments and loans in investee companies accounted by the equity method
|
(50 | ) | (35 | ) | (231 | ) | ||||||
Non-current investments
|
(3 | ) | (126 | ) | (74 | ) | ||||||
Investments in fixed assets and intangible assets
|
(840 | ) | (734 | ) | (905 | ) | ||||||
Investments in investment property
|
(463 | ) | (508 | ) | (322 | ) | ||||||
Receipts (payments) in respect of the settlement of derivatives, net
|
4 | (12 | ) | 14 | ||||||||
Acquisitions of subsidiaries, net of acquired cash, as part of their initial consolidation
|
(6 | ) | 127 | (7 | ) | |||||||
Receipts in respect of the realization of consolidated companies, net of cash spent as part of the discontinuance of their consolidation
|
1,315 | (2) | (2 | ) | 1,663 | |||||||
Receipts from realization of non-current investments, including dividend from the realization
|
93 | 366 | 176 | |||||||||
Receipts from realization of investment property, fixed assets and other assets
|
229 | 622 | 539 | |||||||||
Taxes paid in respect of investment property, fixed assets and other assets
|
(88 | ) | (12 | ) | (83 | ) | ||||||
Interest received
|
116 | 136 | 190 | |||||||||
Net cash provided from (used for) continuing investing activities
|
245 | (1,273 | ) | 1,125 | ||||||||
Net cash provided from (used for) discontinued investing activities
|
1,202 | (3) | (1,915 | ) | (575 | ) | ||||||
Net cash provided from (used for) investing activities
|
1,447 | (3,188 | ) | 550 | ||||||||
Cash flows from financing activities
|
||||||||||||
Repayment of non-current financial liabilities
|
(5,958 | ) (5) | (5,552 | ) | (6,357 | ) | ||||||
Interest paid
|
(1,724 | ) | (1,668 | ) | (1,978 | ) | ||||||
Purchase of shares in consolidated companies from non-controlling interests and acquisition of options for the acquisition of non-controlling interests
|
(1,167 | ) (4) | (11 | ) | (27 | ) | ||||||
Dividends to non-controlling interests in consolidated companies
|
(349 | ) | (272 | ) | (449 | ) | ||||||
Receipts from non-controlling interests in consolidated companies, net
|
2 | 92 | 18 | |||||||||
Company capital issues
|
1,147 | - | - | |||||||||
Non-current financial liabilities received
|
1,332 | 3,248 | 4,133 | |||||||||
Current financial liabilities, net
|
120 | (134 | ) | 186 | ||||||||
Sales of shares in consolidated companies to non-controlling interests
|
- | 528 | - | |||||||||
Receipts Payments in respect of the settlement of derivatives, net
|
(101 | ) | (27 | ) | (12 | ) | ||||||
Net cash used for continuing financing activities
|
(6,698 | ) | (3,796 | ) | (4,486 | ) | ||||||
Net cash used for discontinued financing activities
|
- | (659 | ) | (954 | ) | |||||||
Net cash used for financing activities
|
(6,698 | ) | (4,455 | ) | (5,440 | ) | ||||||
Change in cash and cash equivalents from continuing operations
|
(4,144 | ) | (2,182 | ) | (718 | ) | ||||||
Change in cash and cash equivalents from discontinued operations
|
1,202 | (1,212 | ) | (849 | ) | |||||||
Change in cash and cash equivalents from continuing operations and discontinued operations
|
(2,942 | ) | (3,394 | ) | (1,567 | ) | ||||||
Balance of cash and cash equivalents at beginning of year
|
6,313 | 9,943 | 11,575 | |||||||||
Effects of fluctuations in exchange rates on balances of cash and cash equivalents
|
54 | (106 | ) | (42 | ) | |||||||
Change in cash presented under held for sale assets
|
153 | 23 | - | |||||||||
Balance of cash presented under held for sale assets
|
- | (153 | ) | (23 | ) (3) | |||||||
Balance of cash and cash equivalents at end of year
|
3,578 | 6,313 | 9,943 |
(1)
|
For the principal details regarding subsidiaries whose consolidation was discontinued or applied for the first time in the Company’s financial statements, see Note 3.I.3.b. below.
|
(2)
|
For details regarding the realization of the investment in Given Imaging and its deconsolidation in February 2014, see note 3.H.6.a. below.
|
(3)
|
Including effects with respect to the realization of an investment in Credit Suisse, see notes 3.H.4.c. and 3.I.1. below.
|
(4)
|
For details regarding the merger transaction between Koor and Discount Investment. see note 3.H.4.C. below. For details regarding the acquisition of Shufersal shares, see note 3.H.3.C. below.
|
(5)
|
For details regarding the early redemption of debentures and regarding the repayment of Koor’s loans, see notes 3.H.4.B. below .
|
(6)
|
Includes consideration from the exercise of options into shares received from non-controlling interests.
|
(7)
|
See note 3.E. below.
|
Note 1 – General
|
|
A.
|
IDB Development Corporation Ltd. (“the Company”) is an Israeli resident Company incorporated in Israel. The Company’s registered address of record is 3 Azrieli Center, Triangular Tower, 44th floor, Tel Aviv. The Company is a holding company, investing on its own behalf and through investee companies in companies mainly operating in various sectors of the Israeli and global economy. Some of the investee companies operate by way of global diversification of their investments. In recent years, the Company put a special emphasis on examining possibilities for disposing of such investments, considering, inter alia, the Company’s financing needs and regulatory developments. For this matter, see the sale of its controlling holding stake in Given which closed in February 2014 (note 3.H.6.a below) and the completion of the merger transaction as part of which Koor became a wholly owned subsidiary of Discount Investments in March 2014 (note 3.H.4.b below), which included realization of all Credit Suisse shares (note 3.H.4.b below). See also note 3.H.5.c below with regard to a letter received on December 30, 2014, from the Commissioner of the Capital Market, Insurance and Savings at the Ministry of Finance (“the Commissioner”), which includes, inter alia, a timeframe for the sale of the Company’s control and holdings in Clal Holdings Insurance Enterprises.
|
|
As of the supplementary judgment, as part of which the debt arrangement at IDB Holdings Corporation Ltd. (“IDB Holdings”) was approved in January 2014 and until the date of completion of the first stage of the debt arrangement, in May 2014, all of the issued share capital (apart from shares held by the Company itself, which were dormant shares) and all of the voting rights at the Company were held by IDB Holdings through the trustees appointed by the Tel-Aviv-Jaffa District Court to carry out the debt arrangement at IDB Holdings. At the date of completion of the first stage of the debt arrangement, the (indirect) control in the Company was transferred to Mr. Eduardo Elsztain and Mr. Mordechai Ben-Moshe, in equal shares (through corporations under their control – Dolphin Netherlands B.V. (“Dolphin Netherlands”), a company incorporated in The Netherlands and which is under the control of Mr. Eduardo Elsztain and CAA Extra Holdings Ltd. (“CAA”), a company fully owned by Mr. Mordechai Ben-Moshe), and IDB Holdings no longer holds shares of the Company.
|
|
Following a rights issue to the shareholders of the Company, which took place in January-February 2015, the amount of the holding of corporations controlled by Mr. Eduardo Elsztain (“Dolphin companies,” and together with CAA, “the controlling shareholders”) increased to approximately 61.5% of the Company’s issued capital, whereas the amount of the holding of Mr. Mordechai Ben-Moshe, through CAA, decreased to approximately 16.2% of the Company’s issued capital (as compared with a holding before the rights issue of approximately 31.3% of the Company’s issued capital by each of the parties). Taking into account the provisions included in the shareholders’ agreement between the Company’s controlling shareholders, as the Company was informed by the controlling shareholders (and particularly the provision that insofar as either of the parties will hold more than 5% of the issued and paid-up capital of the Company more than the other party, then a decision made by that party will bind the other party and the parties will vote by virtue of their shares at the Company’s general meeting according to the decision by the party with the greater holding as well as an instruction regarding the composition of the Company’s Board of Directors), the specified changes in the rates of holding at the Company may lead to changes in the Company’s control structure and the composition of its Board of Directors. The decrease in the rate of holding of Mr. Mordechai Ben-Moshe in the Company’s issued capital to below a rate of 26.65% as stated above, may constitute cause for the lending corporations of the Company and Discount Investments to demand immediate repayment of the loans, as stated in notes 16.E.n and 16.F.1.b below. For details regarding a dispute between the controlling shareholders of the Company regarding the implementation of the aforesaid rights issue and the aforesaid changes in the amounts of the holdings in the Company resulting therefrom, and regarding offers to hold an arbitration between the parties, see note 15.B.5 below.
|
Note 1 – General (cont.)
|
|
B.
|
Regarding the Company’s financial position, its cash flows and its ability to service its liabilities, it should be noted that following the completion of the debt arrangement in IDB Holdings and until the date of the report, since May 2014, a sum of NIS 1,448 million has been invested in the Company’s equity by the controlling owners of the Company (as part of the framework of investments in the company upon completion of the debt arrangement, participation in rights issues made by the Company in June 2014 and January 2015, and the exercise of options) and a sum of NIS 115 million was invested by the public as part of participation in the aforesaid rights issues.
|
|
As part of the Company’s rights issue of January 2015, the Company received consideration in a total amount of NIS 417 million, where the participation of Dolphin Netherlands and Dolphin Fund amounted to NIS 391.5 million, whereas CAA did not participate in the rights issue. For additional details with regard to the rights issue, including with regard to the Company’s position regarding the liability of CAA to participate in the rights issue, see note 15.B.6 and note 16.G.2.j below.
|
|
The Company’s financing agreements include grounds for demanding immediate repayment, including ones that relate to legal proceedings or events involving a change in control. As stated in note 16.E.n below, as at the date of publication of the report, the Company is acting to reach agreements with a lending corporation with regard to changes in the amounts of the holdings in it following the rights issue made in January-February 2015, as stated in note 1.A above.
|
|
With regard to the uncertainties relating to the Company’s financial position and its ability to serve its liabilities, it should be noted that: (a)The payments of dividends from direct investees have decreased in recent years, and there are restrictions upon the distribution of dividends by those companies; (b) There is a need to arrange the control covenant and the financial covenants of the Company to lending institutions, so that alternative financial covenants are formulated that will apply initially to the results of the second quarter of 2015; see note 16.E.l below. In addition, pursuant to agreements with financing providers with regard to restrictions and financial covenants, any realization of material holdings would be subject to consent of these providers (for details of limits on borrowing, pledging, investing and realizing and additional restrictions pursuant to agreements with financing providers, see note 16.E below); in the Company’s estimate, failure to arrange the financial covenants with the financing factors as specified is a block on its ability to raise new credit or refinance its debts (on this matter see also note 16.D below regarding the rating of the Company’s bonds) and the covenants that are to be determined will have a significant effect on the Company’s options on this matter; (c) Legal proceedings are taking place against the Company, including a motion for a derivative action on behalf of Discount Investments with regard to dividends that it distributed. For details, see notes 16.G.1 and 23.C.1.h below;
|
Note 1 – General (cont.)
|
C.
|
These financial statements have also been prepared pursuant to the Securities (Annual Financial Statements) Regulations, 2010 (“the Financial Statements Regulations,”).
|
D.
|
Definitions
|
|
1.
|
Subsidiaries – entities controlled by the Company. Control is achieved when the Group is exposed to, or has an interest in, variable returns on its involvement with the investee and may influence these returns through its influence over the investee. When testing for existence of control, real voting rights, held by the Group and by others, are taken into account. See also note 2.A below.
|
|
2.
|
Associates – companies (including gas and oil partnerships and participation units in venture capital funds) in which the Company or its subsidiaries have a direct or indirect holding and where significant influence exists over their financial and operating policies and which are not subsidiaries. The investments in these companies are presented on the equity basis.
|
|
3.
|
Joint arrangement – an arrangement in which the Group has joint control with other(s), achieved through an agreement requiring unanimous agreement by all parties to said agreement with regard to operations which materially influence the returns from said arrangement.
|
|
4.
|
Joint venture – a joint arrangement in which the parties there to have an interest in net assets attributable to the arrangement.
|
|
5.
|
Joint operations – a joint venture in which the Group has an interest in assets and commitments to liabilities attributable to the arrangement.
|
|
6.
|
Investees – subsidiaries, associates and joint ventures.
|
Note 1 – General (cont.)
|
|
7.
|
Significant influence – 20% or more of the voting rights or the right to appoint 20% or more of the board of directors, unless it is apparent that significant influence does not actually exist. A holding of less than 20% of such rights may also be considered as granting significant influence in cases where such influence is clearly apparent.
|
8.
|
Functional currency and presentation currency
|
|
These financial statements are presented in NIS, which is the Company’s functional currency, and the financial data in them have been rounded to the nearest million, except when otherwise indicated. The NIS is the currency that represents the principal economic environment in which the Company operates.
|
9.
|
Financial statements regulations – the Israeli Securities Regulations (Annual Financial Statements), 2010.
|
10.
|
The Israeli Companies Law – the Companies Law, 5759-1999.
|
11.
|
IFRS – International financial reporting standards.
|
12.
|
In these financial statements –
|
The Company
|
-IDB Development Corporation Ltd.
|
The Group
|
-The Company and its investees.
|
IDB Holdings
|
-IDB Holding Corporation Ltd. – the parent company until May 7, 2014.
|
Discount Investments
|
-Discount Investment Corporation Ltd.
|
Clal Holdings Insurance Enterprises
|
-Clal Holdings Insurance Enterprises Ltd.
|
IDB Tourism
|
-IDB Tourism (2009) Ltd.
|
Elron
|
-Elron Electronic Industries Ltd.
|
Cellcom
|
-Cellcom Israel Ltd.
|
Given
|
-Given Imaging Ltd.
|
Shufersal
|
-Shufersal Ltd.
|
Property & Building
|
-Property & Building Corporation Ltd.
|
Koor
|
-Koor Industries Ltd.
|
Adama
|
-Adama Agricultural Solutions Ltd. (formerly: Makhteshim-Agan Industries Ltd.)
|
Credit Suisse
|
-Credit Suisse Group AG
|
E.
|
Basis for preparing the financial statements
|
1.
|
Basis of measurement
|
|
These financial statements were prepared on the basis of the historical cost of assets and liabilities except for the following assets and liabilities: financial instruments, derivatives and other assets and liabilities measured at fair value through profit or loss; financial instruments measured at fair value through other comprehensive income; liability for cash-settled share-based payment; investment property; inventory; biological assets; non-current assets and disposal groups held-for-sale; insurance liability; assets and liabilities for employee benefits; deferred tax assets and liabilities; biological assets measured at fair value less selling costs; liabilities in respect of options to investors the exercise price of which is linked to the CPI; provisions and investments in equity accounted investees.
|
For
|
information regarding the measurement of these assets and liabilities see Note 2 regarding significant accounting policies.
|
|
The value of non-monetary assets and equity items that were measured on the historical cost basis was adjusted to changes in the Consumer Price Index (CPI) until December 31, 2003, since until that date the economy of Israel was considered hyperinflationary economy.
|
Note 1 – General (cont.)
|
E.
|
Basis for preparing the financial statements (cont.)
|
Index
|
Exchange rate
|
|||||||||||||||
Known
|
Month
|
USD
|
Swiss Franc
|
|||||||||||||
Points
|
NIS | |||||||||||||||
as of:
|
||||||||||||||||
December 31, 2014
|
119.77 | 119.77 | 3.889 | 3.925 | ||||||||||||
December 31, 2013
|
119.89 | 120.01 | 3.471 | 38.973 | ||||||||||||
December 31, 2012
|
117.64 | 117.87 | 3.733 | 4.077 | ||||||||||||
Change in the period:
|
||||||||||||||||
For the year ending
|
||||||||||||||||
December 31, 2014
|
(0.1 | %) | (0.2 | %) | 12.0 | % | 0.7 | % | ||||||||
December 31, 2013
|
1.9 | % | 1.8 | % | (7.0 | %) | (4.4 | %) | ||||||||
December 31, 2012
|
1.4 | % | 1.6 | % | (2.3 | %) | 0.4 | % |
3.
|
a.Use of estimates and judgment
|
|
The preparation of financial statements in conformity with IFRS, requires managements of the Company and investee companies to make judgments, estimates and assumptions, including actuarial estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income, expenses and also components of capital. Actual results, which manifest at a later time, may differ from these estimates.
|
|
The preparation of accounting estimates used in the preparation of the Company’s financial statements requires managements of the Company and investee companies to make assumptions regarding circumstances and events that involve considerable uncertainty. These managements prepare the estimates on the basis of past experience, various facts, external circumstances, and reasonable assumptions according to the pertinent circumstances of each estimate.
|
|
Estimates and underlying assumptions used in the preparation of these financial statements are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.
|
|
Below is a description of the critical accounting estimates that were used in preparing these financial statements, which required managements of the Company and investee companies to make assumptions regarding significantly uncertain circumstances and events.
|
|
Themain estimates with regard to insurance business included in comparative figures on the financial statements are primarily based on actuarial assessments. Assessment of class action lawsuits (see Note 23) is based on the assessment by Legal Counsel, while other estimates are based,inter alia, on external valuations and assessments by other experts.
|
Note 1 – General (cont.)
|
E.
|
Basis for preparing the financial statements (cont.)
|
Estimate
|
Main assumptions
|
Potential implications
|
Main references
|
Fair value measurement of investment property.
|
Expected rate of return on investment property.
|
Gain or loss due to change in fair value of investment property and investment property under construction.
|
Notes 2.f below and Note 7.b below.
|
Recoverable amount of cash-generating units (including those including goodwill), of associates and assets.
|
Pre-tax discount rate and expected growth rate - with regard to cash-generating units.
After -tax discount rate and expected growth rate - with regard to associates.
Cash flows are determined based on past experience with the asset or with similar assets and on the Group’s best assumption with regard to economic conditions expected to prevail.
Assessments by external assessors and valuators with regard to fair value, net of realization cost, of assets (including real estate properties).
|
Change in impairment loss.
|
Note 10.D.1 below with regard to impairment review of goodwill attributable to Cellcom and determination of the recoverable amount of operations thereof.
Notes 3.H.3.b and 10.D.2 below with regard to impairment review of goodwill attributable to Shufersal and determination of the recoverable amount of operations thereof.
Note 3.H.4.d below with regard to the examination of an impairment of the investment in Adama.
Note 3.G.3 below with regard to the Company’s estimate regarding the likelihood of completing one of the alternatives of either turning the Company or Discount Investments into a private company, or a merger between the Company and Discount Investments, which would enable the continued control of Cellcom and Shufersal by the Company after December 2019.
|
Existence of control, effective control or significant influence
|
Judgment with regard to determination of the Group’s holding stake in shares of investees (considering the existence and influence of significant potential voting rights), its right to appoint members of the executive body of these companies (typically, the Board of Directors) based on bylaws of these investees, the composition and rights of other shareholders of these investees and its capacity to set operating and financial policy for the investees or to participate in setting such policy.
|
Accounting treatment of investee as a subsidiary or as an equity accounted entity.
|
Note 2.a.1 below with regard to accounting treatment of subsidiaries and equity-accounted investees.
|
Valuation and estimated useful life of intangible assets
|
Estimated useful life of intangible assets and expected economic developments.
Expected cash flows from customer relations and other intangible assets and replacement cost of brands.
|
Misallocation of acquisition cost of investments in investees.
Recognition of accelerated or decelerated depreciation compared to eventual actual results.
|
Note 10 – Intangible assets.
|
Note 1 – General (cont.)
|
E.
|
Basis for preparing the financial statements (cont.)
|
Estimate
|
Main assumptions
|
Potential implications
|
Main references
|
Uncertain tax positions.
|
The degree of uncertainty associated with acceptance of the Group’s tax positions and the risk of incurring additional tax and interest expenses. This is based on analysis of multiple factors, including interpretations of tax statutes and the Group’s past experience, including with regard to classification of tax losses carried forward.
Estimate of the amount of losses carried forward that can be utilized, the expected taxable income, its timing and the amount of deferred taxes to be recognized.
|
Recognition of additional expenses for taxes on income.
Changes in amounts of tax assets for tax losses carried forward.
|
Note 32 – Taxes on income.
|
Hybrid financial instrument with respect to Koor’s non-recourse loan.
|
The value of Adama’s shares.
Unobserved data underlying the binomial model applied to determine the value of embedded derivatives.
|
Change in gain or loss with respect to change in fair value of embedded derivative and to change in carrying amount of the host contract recognized under financing income or expenses.
|
Note 21.G.2 below with respect to sensitivity analysis of financial instruments measured at fair value at level 3.
Note 16.F.1.d below with respect to key estimates used to determine the fair value of embedded derivative and the book value of the host contract in the hybrid financial instrument.
Note 2.C.2 below with respect to accounting policies used to determine the carrying amount of the host contract and the fair value of the embedded derivative.
|
Estimation of likelihood of contingent liabilities.
|
Whether it is more likely than not to expend economic resources with respect to lawsuits filed against the Company and its investees, based on the opinion of legal counsel.
|
Creating or reversing a provision with respect to a claim.
|
Note 23 with respect to contingent claims and contingent liabilities.
|
Un-asserted legal claim.
|
Reliance on internal estimates by handling parties and the management of Clal Holdings Insurance Enterprises. Weighing the estimated likelihood of a claim being filed and the likelihood of any claim filed to prevail.
|
In view of the preliminary stage of the clarification of the legal claims, the actual results may differ from the assessment made prior to the filing of the suit.
|
Note 23.C.2 with respect to claims against Clal Insurance Group.
|
Classification of operations as held for sale
|
Estimate whereby the sale is expected within one year
|
The expected sale would not occur within one year, hence it would not be thus classified and would not be measured at the lower of market value net of selling costs and carrying amount.
|
Note 1 – General (cont.)
|
E.
|
Basis for preparing the financial statements (cont.)
|
|
b.
|
Fair value determination
|
|
1.
|
Note 4 – Other Investments;
|
|
2.
|
Note 6 – Fixed assets acquired in a business combination;
|
|
3.
|
Note 7 – Investment property;
|
|
4.
|
Note 10 – Intangible assets;
|
|
5.
|
Note 21 – Financial instruments;
|
|
6.
|
Note 16.F.1.d regarding the embedded derivative in the non-recourse loan;
|
|
7.
|
Annex B – Share-based payment arrangements
|
|
Level 1 - Quoted (un-adjusted) prices on active markets for identical assets or liabilities.
|
|
Level 2 - Observed market data, directly or indirectly, not included in Level 1.
|
|
Level 3 - Data not based on observed market data.
|
|
4.
|
Examination of the materiality of asset valuations for purposes of disclosure or attachment
|
Note 1 – General (cont.)
|
E.
|
Basis for preparing the financial statements (cont.)
|
|
5.
|
Attachment of material associates
|
|
a.
|
The result of multiplying the associate’s assets by the rate held in it, is less than 0.5% of total assets in the Company’s Statement of Financial Position;
|
|
b.
|
The result of multiplying the associates’ income by the rate held in it, is less than 0.5% of total income in the consolidated income statement of the Company for the reporting quarter;
|
|
c.
|
The Company’s share of the results of the associate (in absolute value) is less than 5% of the Group’s share of profits of associates, net, in the reporting quarter (in absolute value).
|
Note 1 – General (cont.)
|
E.
|
Basis for preparing the financial statements (cont.)
|
|
6.
|
Initial application of new standards and changes in estimates
|
|
a.
|
Interpretation of the Committee for Interpretations of International Financial Reporting IFRIC 21, Levies (hereunder – “the interpretation”)
|
|
The interpretation provides guidelines for the accounting treatment of liabilities for the payment of governmental levies which are covered by IAS 37, Provisions, Contingent Liabilities and Contingent Assets, as well as governmental levies which are not covered by IAS 37, due to the fact that the timing and amounts of their repayment are certain. A “levy” is defined as a negative flow of resources which is imposed on an entity by the government through legislation and/or regulation.
|
|
The interpretation affects the accounting treatment of betterment levies in the Group’s financial statements, in a manner whereby the liability for payment of betterment levies is recognized on the exercise date of the rights. Accordingly, the measurement of the fair value of the investment property prior to the recognition of the liability to pay betterment fees, includes the negative cash flows attributed to the levy. The interpretation was adopted retrospectively beginning on January 1, 2014. The effect of the retrospective adoption of the interpretation is that sums in the amount of NIS 92 million were written off from the item for other non-financial liabilities, which is included under non-current liabilities in the Statement of Financial Position as at December 31, 2013, and which were taken into account in the calculation of the fair value of the investment property on that date (as a decrease in value).
|
|
b.
|
Amended IAS 32, “Financial Instruments: Presentation” (“IAS 32”)
|
F.
|
Reclassification
|
|
1.
|
The following are the reclassifications made in the Statement of Financial Position
|
As of December 31
|
||||
2013
|
||||
NIS millions
|
||||
Non-current assets
|
||||
Investments in equity accounted investees
|
61 | |||
Investment property
|
(92 | ) | ||
Intangible assets
|
(67 | ) | ||
Total non-current assets
|
(98 | ) | ||
Current assets
|
||||
Assets of realization groups and other assets held for sale
|
6 | |||
Total current assets
|
6 | |||
Total Assets
|
(92 | ) | ||
Non-current liabilities
|
||||
Provisions
|
6 | |||
Other non-financial liabilities
|
(94 | ) | ||
Total non-current liabilities
|
(88 | ) | ||
Current liabilities
|
||||
Other accounts payable
|
(11 | ) | ||
Provisions
|
7 | |||
Total current liabilities
|
(4 | ) | ||
Total liabilities
|
(92 | ) |
|
|
2.
|
The following are reclassifications made in the Statement of Income:
|
For the year ended
December 31
|
||||||||
2013
|
2013
|
|||||||
NIS millions
|
||||||||
Income
|
||||||||
Profit from realization and increase in value of investments
|
83 | * | - | |||||
Total income
|
83 | - | ||||||
Expenses
|
||||||||
Cost of sales and services
|
137 | 124 | ||||||
Selling and marketing expenses
|
(137 | ) | (124 | ) | ||||
Total expenses
|
- | - | ||||||
Profit after tax for the year from discontinued operations
|
(83 | )* | - |
|
3.
|
Reclassifications made on the profit per share data
|
Note 2 – Principles of the Accounting Policy
|
A.
|
Consolidated financial statements
|
Note 2 – Principles of the Accounting Policy (cont.)
|
A.
|
Consolidated financial statements (cont.)
|
|
In a business combinations achieved in stapes, the difference between the acquisition date fair value of the Group’s pre-existing equity rights in the acquired entity and the carrying amount at that date is recognized in profit or loss under gain on sale and increase in value of investments and assets, dividends and gain from rise to control. For this purpose, the fair value of a marketable asset is its market value, except when circumstances clearly indicate that the fair value of the aforesaid asset is different from its market value.
|
|
The consideration paid includes the fair value of any contingent consideration. After the acquisition date, the Group recognizes changes in fair value of the contingent consideration classified as a financial liability in the Statement of Income, whereas contingent consideration classified as an equity instrument is not remeasured. Changes in liabilities for contingent consideration in business combinations that occurred before January 1, 2010, continue to be applied to goodwill and are not recognized in the Statement of Income.
|
|
Costs associated with the acquisition that were incurred by the acquirer in the business combination such as: broker’s fees, consulting fees, legal fees, valuations and other fees with respect to professional or consulting services, other than those related to debt or capital issuance with respect to the business combination, are expensed in the period in which the services are rendered.
|
|
2.
|
Non-controlling shareholders
|
Note 2 – Principles of the Accounting Policy (cont.)
|
A.
|
Consolidated financial statements (cont.)
|
|
2.
|
Non-controlling shareholders (cont'd)
|
|
3.
|
Transactions resulting in discontinuance of consolidation of financial statements
|
|
5.
|
Reversal of mutual transactions
|
Note 2 – Principles of the Accounting Policy (cont.)
|
A.
|
Consolidated financial statements (cont.)
|
|
7.
|
Change in the amounts of holdings in equity-accounted associates and joint ventures on a balance sheet basis value, while maintaining significant influence or joint control
|
|
8.
|
Loss of significant influence or joint control
|
Note 2 – Principles of the Accounting Policy (cont.)
|
A.
|
Consolidated financial statements (cont.)
|
|
8.
|
Loss of significant influence or joint control (cont'd)
|
B.
|
Foreign currency
|
|
1.
|
Foreign currency transactions
|
|
2.
|
Foreign operations
|
Note 2 – Principles of the Accounting Policy (cont.)
|
B.
|
Foreign currency (cont.)
|
|
2.
|
Foreign operations (cont.)
|
C.
|
Financial instruments
|
|
1.
|
Non-derivative financial instruments
|
Note 2 – Principles of the Accounting Policy (cont.)
|
C.
|
Financial instruments (cont.)
|
|
1.
|
Non-derivative financial instruments (cont.)
|
Note 2 – Principles of the Accounting Policy (cont.)
|
C.
|
Financial instruments (cont.)
|
|
1.
|
Non-derivative financial instruments (cont.)
|
|
2.
|
Derivative financial instruments, including hedge accounting
|
Note 2 – Principles of the Accounting Policy (cont.)
|
C.
|
Financial instruments (cont.)
|
|
2.
|
Derivative financial instruments, including hedge accounting (cont.)
|
|
3.
|
Hybrid financial instruments
|
|
4.
|
Assets and liabilities linked to the CPI which are not measured at fair value
|
|
5.
|
Financial liabilities
|
Note 2 – Principles of the Accounting Policy (cont.)
|
C.
|
Financial instruments (cont.)
|
|
5.
|
Financial liabilities (cont'd)
|
Note 2 – Principles of the Accounting Policy (cont.)
|
D.
|
Fixed assets
|
|
1.
|
Recognition and measurement
|
|
2.
|
Subsequent costs
|
|
3.
|
Depreciation
|
Note 2 – Principles of the Accounting Policy (cont.)
|
D.
|
Fixed assets (cont.)
|
|
3.
|
Depreciation (cont'd)
|
Years
|
|||||
Buildings
|
25-50 | ||||
Machinery, plant & equipment
|
3-22 |
(mainly 10-14 years)
|
|||
Office furniture and equipment
|
3-17 |
|
|||
Computers
|
3-7 | ||||
Vehicles
|
3-10 | ||||
Fixtures in leased buildings
|
3-24 | ||||
Communications network
|
4-20 | ||||
Communications network control and examination equipment
|
4-7 | ||||
Airplanes
|
20-25 | ||||
Land under finance lease*
|
Up to 98 years (including future lease option)
|
|
*
|
See also section G below in this note.
|
E.
|
Intangible assets
|
|
1.
|
Goodwill
|
|
2.
|
R&D
|
Note 2 – Principles of the Accounting Policy (cont.)
|
E.
|
Intangible assets (cont.)
|
|
3.
|
Other intangible assets
|
|
a.
|
Intangible assets that are acquired in a business combination are recognized at their acquisition date fair value. Subsequent to initial recognition, intangible assets acquired by the Group are measured at cost (including direct costs required in order to bring the assets to operation), less accumulated amortization (other than intangible assets having an indefinite useful life) and impairment losses.
|
|
b.
|
Subsequent expenditure is recognized as intangible asset only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognized in income statement as incurred.
|
|
c.
|
Customer relations – The excess cost that was attributed in subsidiaries to customer relations. These customer relations have a finite useful life.
|
|
d.
|
Brand – The excess cost that was attributed in subsidiaries to a brand. Some of the brands have a finite useful life and some have an indefinite useful life.
|
|
e.
|
Lease agreements – Excess cost attributed in a subsidiary to lease agreements. The lease agreements have a limited period of time. The useful life of this asset takes into consideration also options to extend the lease period.
|
|
f.
|
Other than goodwill, for part of the brands and the agreement with Rafael, which have indefinite useful lives, amortization is calculated in accordance with the expected economic benefit from the assets in each period, on the basis of the estimated useful life of each group of assets, from the date that they are available for use (meaning are brought to the working condition for their intended use). If the intangible assets consist of several components with different estimated useful lives, the individual significant components are amortized over their individual useful lives. Intangible assets created in Group companies are not systematically amortized until they are available for use. Therefore, intangible assets not available for use, such as development costs, are tested for impairment at least once a year, until such date as they are available for use.
|
Years
|
|
Client relations
|
5-10 years (2012 & 2013: 5-20 years, mainly 6-8 years)
|
Brands and trademarks
|
20 years (2012 & 2013: 8-20 years, mainly 20 years)
|
Licenses
|
17-20 (mainly 17 years)
|
Licensing in associate
|
8
|
IT
|
4
|
Software
|
3-7
|
Concessions
|
8-33 (mainly 4-10 years)
|
Use rights of patents and technology
|
2012 & 2013: 8-20 years (mainly 8 years)
|
Development costs recognized as intangible asset
|
2012 & 2013: 3 years
|
Intangible assets from acquisition of products in associate
|
20
|
Non-competition and confidentiality agreement
|
2-5
|
Marketing rights in associate
|
5-10
|
Lease agreements
|
3-20
|
Orders backlog
|
1-3
|
Right to use trademarks of an associate
|
mainly 4 years
|
Note 2 – Principles of the Accounting Policy (cont.)
|
E.
|
Intangible assets (cont.)
|
|
3.
|
Other intangible assets (cont.)
|
F.
|
Investment property (real estate)
|
|
1.
|
Use in the production or supply of goods or services or for administrative purposes; or
|
|
2.
|
Sale in the ordinary course of business.
|
|
1.
|
According to fair value (without the capitalization of borrowing costs) when the fair value of the investment property under construction is reliably determinable; and
|
|
2.
|
When the fair value is not reliably determinable, at fair value of the land plus cost during the construction period until the earlier of the date on which construction is completed or when its fair value becomes reliably determinable.
|
G.
|
Leased Assets and Lease Payments
|
Note 2 – Principles of the Accounting Policy (cont.)
|
G.
|
Leased Assets and Lease Payments (cont'd)
|
H.
|
Transactions for the acquisition of an irrevocable right to use the capacity of underwater communication lines
|
I.
|
Inventory
|
Note 2 – Principles of the Accounting Policy (cont.)
|
K.
|
Inventory of real estate and residential apartments
|
L.
|
Capitalization of borrowing costs
|
|
Specific borrowing costs and non-specific borrowing costs were capitalized to qualified assets over the period required for completion and construction, through the date on which they are ready for their designated use. Non-specific credit costs are capitalized to the investment in qualifying assets, or portion thereof, which was not financed with specific credit by means of a rate which is the weighted-average cost of the credit sources which were not specifically capitalized. Exchange rate differentials due to borrowing in foreign currency are capitalized to the extent considered as adjustment to interest costs. Other borrowing costs are recognized on the income statement when incurred. In the event of suspension of active development of a qualifying asset, the capitalization of the credit costs is suspended during that period.
|
Note 2 – Principles of the Accounting Policy (cont.)
|
|
2.
|
Non-financial assets
|
Note 2 – Principles of the Accounting Policy (cont.)
|
|
2.
|
Non-financial assets (cont.)
|
Note 2 – Principles of the Accounting Policy (cont.)
|
|
3.
|
Investments in associates and in joint ventures
|
N.
|
Non-current assets and disposal groups held for sale
|
Note 2 – Principles of the Accounting Policy (cont.)
|
O.
|
Share capital
|
P.
|
Employee benefits
|
|
1.
|
Post-employment benefits
|
|
b.
|
Defined benefit plans
|
Note 2 – Principles of the Accounting Policy (cont.)
|
P.
|
Employee benefits (cont.)
|
|
1.
|
Post-employment benefits (cont.)
|
|
b.
|
Defined benefit plans (cont.)
|
|
2.
|
Other long-term employee benefits
|
|
3.
|
Benefits with respect to termination of employment
|
|
4.
|
Short-term benefits to employees
|
|
5.
|
Share-based payment transactions
|
Note 2 – Principles of the Accounting Policy (cont.)
|
P.
|
Employee benefits (cont.)
|
Q.
|
Provisions
|
R.
|
Income
|
|
1.
|
Sale of goods
|
Note 2 – Principles of the Accounting Policy (cont.)
|
R.
|
Income (cont'd)
|
|
1.
|
Sale of goods (cont'd)
|
|
2.
|
Customer loyalty programs
|
|
3.
|
Sale of inventory of land and residential apartments
|
|
4.
|
Services
|
|
5.
|
Income from communication services and sale of communication equipment
|
Note 2 – Principles of the Accounting Policy (cont.)
|
R.
|
Income (cont'd)
|
|
5.
|
Income from communication services and sale of communication equipment (cont'd)
|
|
6.
|
Income from provision of tourism services
|
|
The amount of income can be reliably measured;
|
|
The economic benefits related to the transaction are expected to flow to the Group;
|
|
7.
|
Income from commissions on a gross and net basis
|
Note 2 – Principles of the Accounting Policy (cont.)
|
R.
|
Income (cont'd)
|
|
10.Fair value of consideration that is contingent upon the occurrence of certain events
|
S.
|
Cost of sales
|
|
1.
|
The cost of sales, from retail operations, includes the cost of purchasing retail inventory less supplier discounts, as aforementioned, and includes also expenses regarding loss, depreciation of goods, independent shelf stocking, storage and handling of inventory until the end selling point. It also includes operation and management costs of commercial centers held by the Group as part of investment property.
|
|
2.
|
Supplier discounts – the Group recognizes discounts received from suppliers as a deduction from the purchase cost. Therefore, the part of the discounts that relates to the purchases added to the closing inventory is attributed to inventory, and the rest of the discounts reduce the cost of sales.
|
T.
|
Leases
|
|
●
|
The fulfilment of the arrangement is dependent on the use of a specific asset; and
|
|
●
|
The arrangement contains a rights to use the asset.
|
Note 2 – Principles of the Accounting Policy (cont.)
|
T.
|
Leases (cont.)
|
U.
|
Financing income and expenses
|
Note 2 – Principles of the Accounting Policy (cont.)
|
V.
|
Taxes on income
|
Note 2 – Principles of the Accounting Policy (cont.)
|
|
W. Discontinued operations
|
X.
|
New standards and interpretations not yet adopted
|
Note 2 – Principles of the Accounting Policy (cont.)
|
X.
|
New standards and interpretations not yet adopted (cont.)
|
|
2.
|
IFRS 15, Income from Contracts with Customers (“IFRS 15”)
|
Note 3 – Investments
|
A.
|
Composition of investments in equity accounted investees
|
as at December 31
|
||||||||
2014
|
2013
|
|||||||
NIS Million
|
||||||||
Value in Statement of Financial Position of the investment in shares
|
3,801 | 3,181 | * | |||||
Loans and a capital note
|
540 | 642 | ||||||
Less: provision for impairment
|
(588 | ) | (74 | ) | ||||
3,753 | (1) | 3,749 | (1) |
|
*
|
Reclassification; see note 1.F.1 above.
|
(1)
|
The aforesaid value includes:
|
Balance of attributed excess cost – for amortization
|
106 | 130 | ||||||
Balance of goodwill
|
468 | 855 | ||||||
574 | 985 |
|
(2)
|
Loans and a capital note
|
Interest rates
as at
December 31,
|
as at December 31
|
|||||||||||
2014
|
2014
|
2013
|
||||||||||
%
|
NIS Millions
|
|||||||||||
Dollars or linked thereto
|
6-15.0 | 369 | 314 | |||||||||
NIS (CPI-linked and unlinked)
|
2.3-9.1 | 143 | 142 | |||||||||
Other currencies or linked thereto
|
3.6 | 28 | 186 | |||||||||
540 | 642 |
|
Most of the loans have no repayment dates.
|
Note 3 – Investments (cont.)
|
B.
|
Movement in investments in investee companies treated according to the equity method (hereunder in this section – “associates”)
|
For the year ended December 31 | ||||||||
2014
|
2013
|
|||||||
NIS millions
|
||||||||
Balance at beginning of the year
|
3,749 | (1) | 4,791 | (1) | ||||
Investments in shares and participation units
|
49 | 41 | ||||||
Changes in loans and capital notes, net
|
29 | 22 | ||||||
Dividends recorded
|
(24 | ) | (74 | ) | ||||
The Group’s share in profits of associates, net
|
(10 | ) | 62 | |||||
Provision for impairment, net
|
(490 | ) | - | |||||
Capital reserves from translation differences in respect of associates
|
349 | (299 | ) | |||||
Decrease in investments due to the reclassification of an investment in an associate to a financial asset measured by fair value through profit or loss (see also section H.2.a of this note below)
|
(70 | ) | - | |||||
Changes in investments in associates due to companies the consolidation of which was discontinued
|
(4 | ) | (150 | ) | ||||
The Group’s share in hedge funds of associates
|
120 | 3 | ||||||
The Group’s share in the recording of hedge funds of associates to profit or loss
|
53 | (17 | ) | |||||
The Group’s share in actuarial differences of associates
|
2 | - | ||||||
Changes in investments in associates, due to their first time consolidation (2)
|
- | (582 | ) | |||||
Changes in an investment as a result of sales and issues to a third party
|
- | (48 | ) | |||||
Balance at end of year
|
3,753 | 3,749 |
(1)
|
Reclassified; see note 1.F.1 above.
|
(2)
|
Including associates which were consolidated for the first time.
|
Note 3 – Investments (cont.)
|
C.
|
Details regarding associates and joint transactions
|
|
1.
|
Summary information on an associate which is material
|
·
|
The Company’s share in the sum of the investment in the associate (in linkage) exceeds 10% of the total assets in the relevant consolidated Statement of Financial Position;
|
·
|
The Company’s share in the associate’s results (in linkage) exceeds 10% (in absolute value) of the net profit attributed to the Company’s owners in the relevant year.
|
2014
|
2013
|
|||||||
Adama
|
||||||||
NIS millions
|
||||||||
Current assets
|
11,861 | 9,513 | ||||||
Non-current assets
|
6,590 | 5,957 | ||||||
Total assets
|
18,451 | 15,470 | ||||||
Current liabilities
|
(7,201 | ) | (5,633 | ) | ||||
Non-current liabilities
|
(5,034 | ) | (4,963 | ) | ||||
Total liabilities
|
(12,235 | ) | (10,596 | ) | ||||
Total assets, net
|
6,216 | 4,874 | ||||||
The Group’s share of the assets, net
|
2,487 | 1,950 | ||||||
Goodwill
|
983 | (1) 884 | ||||||
Reconciliations for fair value made on the acquisition date
|
88 | 115 | ||||||
Impairment of investment (see section H.4.d in this Note below)
|
(541 | ) | - | |||||
Other reconciliations
|
(14 | ) | (1 | ) | ||||
Value of the associate in the Group’s books
|
3,003 | 2,948 | ||||||
Income
|
11,474 | 11,669 | ||||||
Profit for the period
|
498 | 471 | ||||||
Other comprehensive income (loss)
|
148 | (171 | ) | |||||
Total comprehensive income of the associate
|
646 | 300 | ||||||
Less other comprehensive loss attributable to non-controlling shareholders of the associate
|
2 | - | ||||||
Total comprehensive income attributable to the owners of the associate
|
648 | 300 | ||||||
The Group’s share in the associate’s total comprehensive income
|
259 | 120 | ||||||
Amortization of reconciliations for fair value made on the acquisition date
|
(38 | ) | (49 | ) | ||||
Impairment of investment (see section H.4.d in this Note below)
|
(516 | ) | - | |||||
Foreign currency translation differentials for the associate
|
356 | (223 | ) | |||||
Other reconciliations
|
(5 | ) | (5 | ) | ||||
Total comprehensive income (loss) of the associate as presented in the books
|
56 | (157 | ) |
|
*
|
Assets and liabilities were translated according to the representative exchange rates as at December 31 of each year and income and profit or loss were translated according to the average exchange rates in each year.
|
|
(1)
|
Restated; see note 1.F.1.
|
Note 3 – Investments (cont.)
|
C.
|
Details regarding associates and joint transactions (cont.)
|
|
2.
|
Summary information on associates and joint transactions that are not material
|
For December 31 | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
NIS millions | ||||||||||||
A.Summary of data on investee companies (1) | ||||||||||||
Book value of investee companies
|
426 | 447 | 4,367 | |||||||||
The Group’s share in profit for the period
|
(122 | ) | (99 | ) | (959 | ) | ||||||
The Group’s share in other comprehensive income (loss)
|
163 | (21 | ) | (110 | ) | |||||||
The Group’s share in total comprehensive income (loss)
|
41 | (120 | ) | 1,069 | ||||||||
B.Summary of Data on Joint Transactions
|
||||||||||||
Book value of investments in joint transactions
|
324 | 354 | 363 | |||||||||
The Group’s share in profit (loss) for the period
|
(23 | ) | 21 | 27 | ||||||||
The Group’s share in other comprehensive income (loss)
|
2 | (3 | ) | (1 | ) | |||||||
The Group’s share in other comprehensive income (loss)
|
(21 | ) | 18 | 26 |
|
(1)
|
The data includes sums for investment in Credit Suisse Emerging Markets Credit Opportunity Fund LP (hereunder “EMCO Fund”), 12.2% of which is held by Koor. It should be noted that although the amount of the Group’s holding in the EMCO Fund is less than 20%, it will be subject to the equity accounting method. Koor has a material influence over the EMCO Fund since it has the power to participate in certain material decisions of the Fund, such as decisions pertaining to investment, through a joint representative of Koor and Clal Insurance group representative. Noted that the EMCO Fund statements were prepared for November 30, 2013 and November 30, 2012, and Koor made the necessary adjustments in its financial statements for the time gap between the aforesaid statements of the EMCO Fund and the financial statements of Koor as of December 31, 2012-2014, respectively.
|
|
(2)
|
According to the materiality tests as stated in section (1) above in this note, the investment in Adama for 2012 was not classified as material, and therefore the above figures include the amounts that relate to Adama.
|
Note 3 – Investments (cont.)
|
D.
|
Additional details regarding the main consolidated investees that are directly held by the Company*
|
Company rights in the share capital and voting
|
Scope of investment in investee
|
Loans and capital notes
|
Total
|
Country of incorporation
|
|||||||||||||
%
(rounded)
|
NIS Millions
|
||||||||||||||||
As of December 31, 2014
|
|||||||||||||||||
Discount Investments
|
74 | 894 | - | 894 |
Israel
|
||||||||||||
IDB Group USA Investment Inc. )1)
|
50 | (650 | ) | 1,196 | 546 |
USA
|
|||||||||||
IDB Tourism (2)
|
100 | 180 | 59 | 239 |
Israel
|
||||||||||||
424 | 1,255 | 1,679 | |||||||||||||||
As of December 31, 2013
|
|||||||||||||||||
Discount Investments
|
74 | 1,069 | - | 1,069 |
Israel
|
||||||||||||
Koor (3)
|
1 | 124 | - | 124 |
Israel
|
||||||||||||
IDB Group USA Investment Inc. )1)
|
50 | (418 | ) | 926 | 508 |
USA
|
|||||||||||
IDB Tourism (2)
|
100 | (127 | ) | 219 | 92 |
Israel
|
|||||||||||
Noya Oil & Gas Explorations (4)
|
47.5 | 3 | 1 | 4 |
Israel
|
||||||||||||
IDB - DT (2010) Energy (4)
|
50 | (11 | ) | 12 | 1 |
Israel
|
|||||||||||
640 | 1,158 | 1,798 |
*
|
The above investments do not include investments in headquarter companies that are fully owned by the Company.
|
(1)
|
The holding of capital is by way of a wholly owned subsidiary. An additional 50% is held by a company that is fully owned by PBC. The loans were granted directly to IDB Group USA.
|
(2)
|
For details regarding liens and guarantees, see Note 22 below.
|
(3)
|
As of December 31, 2013 it was held at a rate of 67% by Discount Investments and as of December 31 2014 is held at a rate of 100%.
|
(4)
|
The financial statements for Noya and IDB-DT (2010) Energy were consolidated in the Company’s financial statements until December 31, 2013, in accordance with the shareholders agreement in which the Company has equal representation on the companies’ Boards of Directors and in the event of a disagreement, as long as Mr. Nochi Dankner is controlling shareholder in the Company, the matter will be brought before the Company for a decision. In January 2014, in light of the fact that Mr. Nochi Dankner ceased to be controlling shareholder in the Company, the Company has ceased to consolidate the statements and they are treated according to the equity method.
|
Note 3 – Investments (cont.)
|
E.
|
Subsidiaries
|
As of December 31, 2014
|
For the year ending December 31, 2014
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Holding percentage of share capital and voting rights of non-controlling shareholders
|
Current assets
|
Non-current assets
|
Current liabilities
|
Non-current liabilities
|
Total assets, net
|
Book value of non-controlling shareholders
|
Income (8)
|
Net profit
|
Other comprehensive income (loss)
|
Total comprehensive income (loss)
|
Profit (loss) attributed to non-controlling shareholders
|
Other comprehensive income (loss) attributed to non-controlling shareholders
|
Cash flows from current activity
|
Cash flows from investing activity
|
Cash flows from financing activity
|
Increase (decrease) net of cash and cash equivalents
|
Dividends distributed to non-controlling shareholders
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
%
|
NIS Millions
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subsidiaries that are directly held by the company
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discount Investments (2)
|
26.1 | 11,486 | 25,657 | 7,982 | 24,809 | 4,352 | 3,541 | 20,081 | (109 | ) | 870 | 761 | 225 | 336 | 2,279 | 1,254 | (6,023 | ) | (2,490 | ) | 345 | |||||||||||||||||||||||||||||||||||||||||||||||||||
IDBG (3)
|
- | (3) | 69 | 624 | 15 | 169 | 509 | (37 | ) | 57 | (38 | ) | 57 | 19 | (16 | ) | (3 | ) | 36 | (34 | ) | (14 | ) | (12 | ) | - | ||||||||||||||||||||||||||||||||||||||||||||||
IDB Tourism (4)
|
- | 241 | 645 | 589 | 29 | 268 | 30 | 1,004 | (14 | ) | 18 | 4 | 4 | - | 29 | (16 | ) | (167 | ) | (154 | ) | 4 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total in the Company’s consolidated financial statements
|
3,534 | 213 | 333 | 349 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subsidiaries that are indirectly held by the Company(5):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Elron
|
49.7 | 624 | 145 | 19 | - | 750 | 525 | 630 | 354 | 96 | 450 | 236 | 66 | (38 | ) | 555 | (408 | ) | 109 | 199 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Property & Building Corporation
|
23.5 | 2,964 | 11,611 | 1,968 | 9,881 | 2,726 | 1,785 | 1,634 | 245 | 329 | 574 | 166 | 141 | 484 | (359 | ) | (638 | ) | (513 | ) | 54 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Cellcom (6)(7)
|
58.2 | 3,250 | 5,469 | 2,406 | 3,777 | 2,536 | 1,164 | 4,670 | 188 | 9 | 197 | 219 | 6 | 1,557 | (350 | ) | (1,106 | ) | 101 | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Shufersal (7)
|
50.4 | 2,938 | 5,127 | 2,879 | 3,425 | 1,761 | 916 | 11,673 | (418 | ) | (12 | ) | (430 | ) | (205 | ) | (8 | ) | 331 | (247 | ) | (426 | ) | (342 | ) | 37 | ||||||||||||||||||||||||||||||||||||||||||||||
Discount Investments (Company headquarters and other investments)
|
(849 | ) | (191 | ) | 131 | 55 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3,541 | 225 | 336 | 345 |
(1)
|
The data is after the necessary reconciliation to the consolidated statements of the aforementioned companies, for presentation in the consolidated statements of the Company including goodwill and excess cost attributed to the presented companies.
|
(2)
|
Including figures for Koor, which was directly held by the Company at a rate of approximately 1.6% and indirectly by Discount Investments, until its merger with Discount Investments.
|
(3)
|
IDB Group USA Investment Inc. – the data relate to the 50% directly held by the Company. An additional 50% is held by Property & Building Corporation, the data relating to which are presented within the data of Discount Investments.
|
(4)
|
The Company holds 100% of the share capital of IDB Tourism. The balance of non-controlling shareholders relates to investee companies of IDB Tourism.
|
(5)
|
The holding percentages of subsidiaries indirectly held are the holding percentages that are not held by Discount Investments. The data relating to non-controlling shareholders include the share of non-controlling shareholders in Discount Investments.
|
(6)
|
The holding percentage of non-controlling shareholders in Cellcom - 54.8%.
|
(7)
|
Although Discount Investments holds less than half of the voting rights in Cellcom and Shufersal, it estimates that it has effective control of them (inter alia, due to the high holding percentage that the Group holds of voting rights, the dispersal of the other voting rights, and in light of the voting patterns in the General meeting of shareholders), and as such, their financial statements were consolidated in the Company’s financial statements.
|
(8)
|
Subsidiary income is included in the group of income in the Company’s consolidated income statement.
|
Note 3 – Investments (cont.)
|
E.
|
Subsidiaries (cont.)
|
as at December 31, 2013
|
For the year ended December 31, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Holding percentage of share capital and voting rights of non-controlling shareholders
|
Current assets
|
Non-current assets
|
Current liabilities
|
Non-current liabilities
|
Total assets, net
|
Book value of non-controlling shareholders
|
Income (9)
|
Net profit
|
Other comprehensive income (loss)
|
Total comprehensive income (loss)
|
Profit (loss) attributed to non-controlling shareholders
|
Other comprehensive income (loss) attributed to non-controlling shareholders
|
Cash flows from current activity
|
Cash flows from investing activity
|
Cash flows from financing activity
|
Increase (decrease) net of cash and cash equivalents
|
Dividends distributed to non-controlling shareholders
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
%
|
NIS Millions
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subsidiaries that are directly held by the company
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discount Investments (2)
|
26.1 | 16,754 | 25,134 | 9,982 | 25,987 | 5,919 | 4,679 | 19,936 | 795 | (525 | ) | 270 | 557 | (241 | ) | 2,811 | 969 | (3,043 | ) | 737 | 271 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Clal Holdings Insurance Enterprises (3)
|
- | - | - | - | - | - | - | 199 | 8 | 207 | 124 | 4 | 1,350 | (4,097 | ) | (659 | ) | (3,406 | ) | 47 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
IDBG (4)
|
(4) | 117 | 525 | 118 | 33 | 491 | (17 | ) | 127 | (61 | ) | (39 | ) | (100 | ) | (16 | ) | 1 | 100 | (27 | ) | (75 | ) | (2 | ) | 1 | ||||||||||||||||||||||||||||||||||||||||||||||
IDB Tourism (5)
|
- | 250 | 603 | 711 | 20 | 122 | 30 | 1,090 | - | (12 | ) | (12 | ) | 5 | (1 | ) | 36 | 1 | (29 | ) | 8 | - | ||||||||||||||||||||||||||||||||||||||||||||||||||
Other subsidiaries with non-controlling shareholders
|
(5 | ) | (4 | ) | - | 1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total in the Company’s consolidated financial statements
|
4,687 | 666 | (237 | ) | 319 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subsidiaries that are indirectly held by the Company (6)
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Elron
|
49.7 | 539 | 265 | 27 | 19 | 758 | 476 | 40 | 42 | (55 | ) | (13 | ) | 24 | (37 | ) | (37 | ) | (19 | ) | - | (56 | ) | - | ||||||||||||||||||||||||||||||||||||||||||||||||
PCB
|
23.5 | 3,719 | 10,326 | 2,352 | 9,491 | 2,202 | 1,528 | 1,695 | 155 | (128 | ) | 27 | 121 | (53 | ) | 600 | (297 | ) | (354 | ) | (51 | ) | 86 | |||||||||||||||||||||||||||||||||||||||||||||||||
Koor Industries
|
31.4 | 3,994 | 3,360 | 1,631 | 3,074 | 2,649 | 1,246 | 429 | 648 | (225 | ) | 423 | 228 | (89 | ) | 2 | 2,423 | (1,512 | ) | (913 | ) | 4 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Cellcom (7)(8)
|
58.1 | 3,448 | 5,757 | 2,359 | 4,525 | 2,321 | 916 | 5,086 | 342 | (2 | ) | 340 | 233 | (1 | ) | 1,557 | (345 | ) | (1,569 | ) | (357 | ) | 49 | |||||||||||||||||||||||||||||||||||||||||||||||||
Shufersal (8)
|
52.9 | 3,391 | 5,359 | 2,397 | 4,092 | 2,261 | 1,197 | 11,971 | 8 | (4 | ) | 4 | 38 | (3 | ) | 630 | (802 | ) | 405 | 233 | 132 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Discount Investments (Company headquarters and other investments)
|
(684 | ) | (87 | ) | (58 | ) | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4,679 | 557 | (241 | ) | 271 |
(1)
|
The data is after the necessary reconciliation to the consolidated statements of the aforementioned companies, for presentation in the consolidated statements of the Company including goodwill and surplus cost attributed to the presented companies.
|
(2)
|
Including figures for Koor, which was held directly by the Company and indirectly by Discount Investments.
|
(3)
|
The results of Clal Insurance’s activity until the date of cessation of consolidation on August 21, 2013, and include the effect of Clal Insurance’s holdings in the Group’s companies through profit sharing policies. For details on liability assets of Clal Holdings Insurance Enterprises prior the exit from consolidation and its income until the date of cessation of consolidation, see note 3.I below.
|
(4)
|
IDB Group USA Investment Inc. – the data relate to the 50% directly held by the Company. An additional 50% is held by Property & Building Corporation, the data relating to which are presented within the data of Discount Investments.
|
(5)
|
The Company holds 100% of the share capital of IDB Tourism. The balance of non-controlling shareholders relates to investee companies of IDB Tourism.
|
(6)
|
The holding percentages of subsidiaries indirectly held are the holding percentages that are not held by Discount Investments and/or the Company.
|
(7)
|
The holding percentage of non-controlling shareholders in Cellcom - 54.7%.
|
(8)
|
Although Discount Investments holds less than half of the voting rights in Cellcom and Shufersal, it estimates that it has effective control of them (inter alia, due to the high holding percentage that the Group holds of voting rights, the dispersal of the other voting rights, and in light of the voting patterns in the General meeting of shareholders), and as such, their financial statements were consolidated in the Company’s financial statements.
|
(9)
|
Subsidiary income is included in the group of income in the Company’s consolidated statement of income.
|
Note 3 – Investments (cont.)
|
E.
|
Subsidiaries (cont.)
|
As of December 31, 2014
|
For the year ending December 31, 2014
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Holding percentage of share capital and voting rights of non-controlling shareholders %
|
Current assets
|
Non-current assets
|
Current liabilities
|
Non-current liabilities
|
Total assets, net
|
Book value of non-controlling shareholders
|
Income (8)
|
Net profit
|
Other comprehensive income (loss)
|
Total comprehensive income (loss)
|
Profit (loss) attributed to non-controlling shareholders
|
Other comprehensive income (loss) attributed to non-controlling shareholders
|
Cash flows from current activity
|
Cash flows from investing activity
|
Cash flows from financing activity
|
Increase (decrease) net of cash and cash equivalents
|
Dividends distributed to non-controlling shareholders
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
NIS Millions
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subsidiaries that are directly held by the company
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discount Investments (2)
|
26.1 | 11,486 | 25,657 | 7,982 | 24,809 | 4,352 | 3,541 | 20,081 | (109 | ) | 870 | 761 | 225 | 336 | 2,279 | 1,254 | (6,023 | ) | (2,490 | ) | 345 | |||||||||||||||||||||||||||||||||||||||||||||||||||
IDBG (3)
|
(3 | ) | 69 | 624 | 15 | 169 | 509 | (37 | ) | 57 | (38 | ) | 57 | 19 | (16 | ) | (3 | ) | 36 | (34 | ) | (14 | ) | (12 | ) | - | ||||||||||||||||||||||||||||||||||||||||||||||
IDB Tourism (4)
|
- | 241 | 645 | 589 | 29 | 268 | 30 | 1,004 | (14 | ) | 18 | 4 | 4 | - | 29 | (16 | ) | (167 | ) | (154 | ) | 4 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total in the Company’s consolidated financial statements
|
3,534 | 213 | 333 | 349 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subsidiaries that are indirectly held by the Company(5):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Elron
|
49.7 | 624 | 145 | 19 | - | 750 | 525 | 630 | 354 | 96 | 450 | 236 | 66 | -38 | 555 | (408 | ) | 109 | 199 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Property & Building Corporation
|
23.5 | 2,964 | 11,611 | 1,968 | 9,881 | 2,726 | 1,785 | 1,634 | 245 | 329 | 574 | 166 | 141 | 484 | (359 | ) | (638 | ) | (513 | ) | 54 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Cellcom (6)(7)
|
58.2 | 3,25 | 5,469 | 2,406 | 3,777 | 2,536 | 1,164 | 4,67 | 188 | 9 | 197 | 219 | 6 | 1,557 | (350 | ) | (1,106 | ) | 101 | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Shufersal (7)
|
50.4 | 2,938 | 5,127 | 2,879 | 3,425 | 1,761 | 916 | 11,673 | (418 | ) | (12 | ) | (430 | ) | (205 | ) | (8 | ) | 331 | (247 | ) | (426 | ) | (342 | ) | 37 | ||||||||||||||||||||||||||||||||||||||||||||||
Discount Investments (Company headquarters and other investments)
|
(849 | ) | (191 | ) | 131 | 55 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3,541 | 225 | 336 | 345 |
(1)
|
The data is after the necessary reconciliation to the consolidated statements of the aforementioned companies, for presentation in the consolidated statements of the Company including goodwill and surplus cost attributed to the presented companies.
|
(2)
|
Including figures for Koor, which was held directly by the Company and indirectly by Discount Investments.
|
(3)
|
Clal Insurance’s operating results include an effect in respect of Clal Insurance’s holdings in the Group’s companies through profit sharing policies.
|
(4)
|
Mostly IDB Tourism and IDB Group.
|
(5)
|
The holding percentages of the indirectly held subsidiaries are the holding rates that are not held by either Discount Investments and/or the Company.
|
(6)
|
The holding percentage of non-controlling shareholders in Cellcom - 53%.
|
(7)
|
Although Discount Investments holds less than half of the voting rights in Cellcom and Shufersal, it estimates that it has effective control of them (inter alia, due to the high holding percentage that the Group holds of voting rights, the dispersal of the other voting rights, and in light of the voting patterns in the General meeting of shareholders), and as such, their financial statements were consolidated in the Company’s financial statements.
|
(8)
|
The holding percentage of non-controlling shareholders in Shufersal – 50.5%. The rate of holding in the equity was calculated as an effective rate, neutralizing shares held by a wholly owned subsidiary of Shufersal.
|
(9)
|
The subsidiary’s income as included in the Income group in the Company’s consolidated income statement.
|
Note 3 – Investments (cont.)
|
F.
|
Information on marketable investments, held by the Company and Discount Investment:
|
Balance sheet value in the holder's books | Market Value | |||||||||||
31.12.2014 | 31.12.2014 | 26.31.2015 | (2) | |||||||||
NIS millions | ||||||||||||
Name of the Company | ||||||||||||
Held by the Company
|
||||||||||||
Discount Investments (1) (consolidated)
|
894 | 476 | 486 | |||||||||
Equity accounted partnerships
|
||||||||||||
Modiin Energy
|
1 | 1 | 1 | |||||||||
Consolidated by Discount Investments
|
||||||||||||
Elron Electronic Industries Ltd.
|
305 | 239 | 288 | |||||||||
Cellcom
|
1,843 | 1,427 | 857 | |||||||||
Properties and Building Company
|
1,218 | 946 | 1,193 | |||||||||
Shufersal
|
1,140 | 876 | 947 |
|
(1)
|
Including goodwill in an amount of NIS 65 million attributed to companies directly held by Discount Investments: Property and Building – NIS 54 million; Adama– NIS 9 million; Shufersal – NIS 2 million.
|
|
(2)
|
On the basis of the shares held by the Group companies as at December 31, 2014 (without reconciliation for any dividends that were proposed but not yet distributed during the period).
|
G.
|
Additional information on investments of the Company and its investee companies
|
|
1.
|
The Company and some of its investee companies are subject, in certain cases, to contractual restrictions and restrictions provided in the law with respect to realizing existing investments or lien holdings in investee companies such as Batucha for securing repayment of its liabilities, and restrict their ability with respect to carrying out new investments or increasing existing investments. For information on the restrictions that apply to the Company, including during the execution of new investments, in the realization and lien of holdings by virtue of agreements with the financing entities, see Note 16.E. below. The Company and some of its investee companies are subject, in certain cases, to legal restrictions with respect to business activity and in carrying out new investments or increasing existing investments in investee companies, including the need to receive approvals or permits from various regulators for crossing the holding rate prescribed in the law, such as directives regarding the supervision of insurance business, directives of the Ministry of Communications, directives regarding restrictive practices, directives regulating the oil industry, directives regarding the requirement to hold tenders, directives regarding price control of products and services, directives regarding consumerism and restrictions deriving from benefits or approvals from the tax authorities. For details regarding the letter of the Company and Cellcom to the Ministry of Communications, and Cellcom’s approach for a motion for the approval of the Ministry of Communication for a change in the (indirect) control structure of Cellcom, which also included a request to change the instructions included in Cellcom’s communications licenses, including with regard to the requirement for holdings of Israeli parties, see note 23.B.1 below.
In addition, the provisions of certain laws and some of the terms of licenses in the communications sector, which were granted to a number of the Company’s investee companies, include restrictions on cross ownership (which generally means holding means of control in competitors). Furthermore, the Company’s investee companies are affected by, inter alia, changes in the budgets of government offices and bodies and by the government’s policies on various matters (such as the monetary policy). In addition, some of the Company’s investee companies have foreign operations, sell products or services outside of Israel or their securities are traded outside of Israel. These companies are affected by the economic situation including changes in the exchange rates and rate of inflation, the political situation and by legislative and regulatory arrangement in these countries.
|
Note 3 – Investments (cont.)
|
G.
|
Additional information on investments of the Company and its investee companies (cont.)
|
|
2.
|
The Company and some of its investee companies are affected by “Proper Conduct of Banking Business” directives of the Israeli Supervisor of Banks, which include, inter alia, restrictions on the amount of loans a banking entity in Israel can provide to a “single borrower”, to a single “group of borrowers”, and to the largest borrowers and “groups of borrowers” of a banking entity (as these terms are defined in the aforesaid directives). The Company, its controlling shareholders and part of their investee companies are considered a single “group of borrowers” for this purpose.
|
|
3.
|
In December 2013, the official Reshumot published in Israel the Promotion of Competition and Reduction of Centralization Law, 5774-2013 (in this section: “the Law”).
|
|
a.
|
Changing either the Company or Discount Investments into a private company which is not a reporting corporation (and as a result not a “tier company”); and
|
|
b.
|
A merger between the Company and Discount Investments. The Board of Directors of Discount Investments has appointed an advisory committee with a similar function. As at the date of approval of these financial statements, this is an examination only of the specified alternatives, and there is no certainty regarding the implementation of any of the specified structural changes. The implementation of an alternative that would be adopted is likely to take several years.
|
Note 3 – Investments (cont.)
|
G.
|
Additional information on investments of the Company and its investee companies (cont.)
|
Note 3 – Investments (cont.)
|
G.
|
Additional information on investments of the Company and its investee companies (cont.)
|
H.
|
Development of investments in investee companies
|
|
1.
|
Cellcom
|
|
2.
|
Property & Building and Las Vegas projects
|
|
a.
|
Property & Building held 20% of the shares of TPD Investment Limited (“TPD”), an associate in England, the principle assets of which are a hotel in England. In addition to the holding of Property & Building in TPD, an English partner also held it at a rate of 60% and an additional partner held it at a rate of 20%. The acquisition of the hotel in 2006 was financed by a bank loan, without right of recourse, the balance of which as at December 31, 2013 amounted to £394 million and the date of its repayment was in July 2014 and the remainder of the acquisition was financed by a shareholders loan. In addition, as at December 31, 2013, a debt was recorded in the books of TPD to the lending bank at an amount of 65 million pound sterling, in respect of a SWAP transaction intended to fix the interest rate of the bank loan.
|
Note 3 – Investments (cont.)
|
H.
|
Development of investments in investee companies (cont.)
|
|
2.
|
Property & Building and Las Vegas projects (cont'd)
|
|
a. (cont'd)
|
|
b.
|
For details of main realizations and revaluations of investment property made by Property & Building and its subsidiaries in 2014, see note 7.B below.
|
Note 3 – Investments (cont.)
|
H.
|
Development of investments in investee companies (cont.)
|
|
3.
|
Shufersal
|
|
a.
|
In January 2014 Shufersal received a tax arrangement from the Israel Tax Authority, according to which an agreement and a plan to separate Shufersal’s real estate was exempt from income tax and betterment tax, in accordance with the provisions of Part E2 of the Income Tax Ordinance, and subject to the terms set forth therein, and accordingly, the separation entered into force from the effective date (March 31, 2013). According to the aforesaid agreement, Shufersal transferred to Shufersal Real Estate, a wholly owned subsidiary of it (“Shufersal Real Estate”), in effect as of March 31, 2013, in consideration for an allotment of shares, most of its real estate and most of its direct holdings in certain subsidiaries that hold real estate, including that debt that is attributable to the transferred assets, with the transferred debt being on the level of the internal relations between Shufersal and Shufersal Real Estate and there being no change in Shufersal’s liabilities to third parties. The purpose of the split is management focusing, development and enhancement of real estate as an additional business area of Shufersal, and exposing value for Shufersal and its shareholders. See also note 32.I below.
|
|
b.
|
In June 2014, the Board of Directors of Shufersal approved an updated business plan for Shufersal, which is intended to create a growth-oriented commercial and operational infrastructure for the years to come, to reinforce its competitive ability, to improve value offered to customers, including discounting the purchasing basket and improving service.
|
Note 3 – Investments (cont.)
|
H.
|
Development of investments in investee companies (cont.)
|
|
3.
|
Shufersal (cont.)
|
|
b.
|
(cont.)
|
Details
|
Non-recurring
expenses
|
||||
(NIS millions)
|
|||||
Total
|
|||||
Closure of branches – impairment losses
|
(1)
|
(39 | ) | ||
Closure of branches – non-recurring operating expenses
|
(1)
|
(101 | ) | ||
Reduction of branches – impairment losses
|
(2)
|
(15 | ) | ||
Voluntary retirement plan for employees
|
(3)
|
(29 | ) | ||
Total non-recurring expenses recorded by Shufersal
|
(184 | ) | |||
Total non-recurring expenses after attributing taxes recorded by Shufersal
|
(144 | ) | |||
Total non-recurring expenses after attributing taxes in the Company’s consolidated income statement (adding amortization of excess cost attributed in Discount Investments to the relevant assets)
|
(197 | ) | |||
The share of the Company’s owners in the specified costs after attributing taxes
|
(69 | ) |
|
(1)
|
Non-recurring operating expenses with respect to the closure of branches - as stated in note 2.M.2 above, for the purpose of the impairment test, Shufersal branches are combined into geographical regions which constitute separate cash generating units (hereinafter, in this section: “Cash Generating Unit” or “Region”). According to Shufersal’s strategy, the closure of a losing branch in an area that includes additional branches may result in a reduction of the profitability of other branches which are located in the same geographical area, in other words, there is a dependence between the cash flows of branches in the same geographical area. In light of the foregoing, the impairment test for retail activity is performed on the level of the region, and the recoverable amount is calculated for the cash generating unit.
|
Note 3 – Investments (cont.)
|
H.
|
Development of investments in investee companies (cont.)
|
|
3.
|
Shufersal (cont.)
|
|
b.
|
(cont.)
|
|
(1)
|
Non-recurring operating expenses with respect to the closure of branches (cont'd)
|
|
(2)
|
Reduction of branches - as part of the increased efficiency program, Shufersal intends to reduce the size of branches, and to sublet the remaining areas in the properties. These branches include equipment and leasehold improvements (the “Property”), and in light of the process involving the reduction of the branches’ area, Shufersal evaluated the recoverable amount of the property in these branches, based on fair value less realization costs, and recognized under the item “sales and marketing expenses” impairment losses in the amount of NIS 15 million before tax. The main assumption in determining the aforesaid recoverable amount was that the leasehold improvements in the reduced areas in these branches will not generate economic benefits subsequent to the reduction, and were therefore fully depreciated.
|
|
(3)
|
Employee benefits - as part of the increased efficiency program, approval was also given for a voluntary retirement program for employees in preferred conditions, and accordingly, Shufersal recorded in 2014 expenses with respect to the dismissal of employees in the amount of NIS 29 million, before tax. Additionally, as part of the increased efficiency program Shufersal recorded actuarial losses amounting to NIS 4 million before attributing taxes (NIS 3 million net after the attribution of taxes), within other comprehensive loss in respect of the voluntary retirement program.
|
Note 3 – Investments (cont.)
|
H.
|
Development of investments in investee companies (cont.)
|
|
3.
|
Shufersal (cont.)
|
|
c.
|
In the fourth quarter of 2014 and the first quarter of 2015, Discount Investments acquired on the stock exchange approximately 2.4% and approximately 0.9% of Shufersal’s share capital, respectively, in considerations which amounted to NIS 45 million and NIS 18 million, respectively. Subsequent to the aforesaid acquisitions, Discount Investments holds approximately 50.5% of the capital and voting rights at Shufersal. As a result of the aforesaid acquisitions, the Company recorded in 2014 its share of a negative capital reserve amounting to NIS 11 million from a transaction with the non-controlling shareholders, and is expected to record in the first quarter of 2015 its share of a negative capital fund amounting to NIS 5 million from a transaction with the non-controlling shareholders. In this context it is noted that in January 2015 Discount Investments received a notification of a merger between it and Shufersal by the Antitrust Commissioner permitting it to hold Shufersal at a rate greater than 50%.
|
|
d.
|
In March 2014, the Promotion of Competition in the Food Sector Law, 5774-2014, was published in Reshumot (“the Food Law”). The Food Law includes three sets of provisions:
|
|
a.
|
Provisions regulating the activities of suppliers and retailers, including the activities of large retailers;
|
|
b.
|
Provisions regarding geographical competition between retailers; and
|
|
c.
|
Provisions regulating price transparency.
|
|
Shufersal is operating in accordance with the Food Law, all provisions of which commenced application in January 2015. In Shufersal’s estimate, the Food Law may have an adverse effect on its business results, and proximate to the approval date of these financial statements, Shufersal is unable to estimate the degree to which the above will affect its business operations. Additionally, the provisions of the Food Law with regard to geographic competition of retailers may affect Shufersal’s ability to expand by opening new branches in certain areas, and under certain circumstances Shufersal may be required to close some of its active branches.
|
|
e.
|
In the fourth quarter of 2014, Shufersal recorded a profit in a sum of NIS 26 million from the reversal of an impairment that it recorded in the past for its investment in Lev Hamifratz Ltd., an included company that is held by it at a rate of 37% (“Lev Hamifratz”), in view of an improvement in the results of Lev Hamifratz, improved finance terms that were approved for it and negotiations that Shufersal held for the sale of its holding in Lev Hamifratz or for increasing its holding in it. The aforesaid profit was included in these financial statements in the Group’s share of the loss of investee companies that are treated under the equity, net. The Company’s share in the aforesaid profit amounted to NIS 9 million. As of the date of approval of these financial statements, Shufersal is holding negotiations with one of the partners in Lev Hamifratz for the acquisition of its share therein in an amount of 37% and in shareholders’ loans that it gave to Lev Hamifratz. There is no certainty that the aforesaid negotiations will result in a transaction.
|
|
f.
|
For information on the testing of impairment and amortization for impairment made by the Group with regard to goodwill attributed to Shufersal as at December 31, 2014, see note 10.D.2 below.
|
|
g.
|
For details regarding a voluntary retirement plan for Shufersal’s employees and regarding an actuarial estimate of a liability with respect to a defined benefit plan performed by Shufersal as part of the increased efficiency plan, see note 18.C below.
|
Note 3 – Investments (cont.)
|
H.
|
Development of investments in investee companies (cont.)
|
|
4.
|
Koor
|
|
a.
|
In October 2014, Adama entered into an agreement with China National Agrochemical Corporation, which holds Adama at a rate of 60% (hereinafter: “ChemChina”), in which, at the completion date of the transaction, and subject to compliance with conditioned terms specified in the agreement, Adama will acquire, through a wholly owned subsidiary (in this section, the “Buyer”), from a wholly owned subsidiary of ChemChina (in this section, the “Seller”), as a single unit, 100% of the issued and paid-up share capital of a private holding company incorporated in China, whose main holding is class A shares, which constitutes approximately 20.15% of the issued share capital of Hubei Sanonda Co., Ltd. (hereinafter: “Sanonda”), a public company whose shares are traded on the stock exchange in Shenzhen, China, in which Adama held, prior to the aforementioned transaction, class B shares which constitute 10.6% of the issued and paid-up capital of Sanonda, as well as the entire issued and paid-up share capital of three private companies – (1) Jiangsu Anpon Electrochemical Co.; (2) Jiangsu Maidao Agrochemical Co.; and (3) Jiangsu Huaihe Chemical Co. (together with Sanonda, “the Chinese Companies”). The engagement in the agreement was approved by the audit committee and board of directors of Adama, after receiving a recommendation from the special committee of the board of directors, and from the meeting of Adama’s shareholders.
|
-
|
The correctness of the presentations made by the buyer and the seller, and compliance with their undertakings as of the completion date, in all material respects.
|
-
|
Receipt of the required governmental approvals: (1) receipt of an exemption from the China Securities Regulatory Commission (CSRC), according to which the acquisition of Sanonda shares within the framework of the transaction (indirectly, through the acquisition of the shares of the aforementioned private holding company) does not require the performance of a tender offer; (2) approval from the Ministry of Commerce of the People’s Republic of China, or an approved local representation thereof, for the transaction and the issuance of appropriate certificates for the companies in China; (3) issuance of new business licenses to the companies in China by the Industry and Trade Administration of China (hereinafter in this section: the “Governmental Approvals”).
|
-
|
Receipt of approval from the General Director of the Antitrust Authority in Israel for the making of the transaction, insofar as such approval may be required by law.
|
-
|
Receipt of approvals from certain banks who have provided loans to the Chinese companies.
|
-
|
Sanonda’s fulfillment of its liabilities in the interim period and non-performance of actions which it has been prohibited to perform under the agreement, although non-fulfillment of its liabilities, or the performance of such actions, will constitute grounds for non-completion of the merger only if they have a significant negative impact on Sanonda, as this term was defined in the agreement.
|
-
|
Insofar as Adama will not complete an initial public offering of its shares on the New York Stock Exchange by March 31, 2015, the buyers undertaking to complete the transaction will be subject to: (A) Approval of the audit committee and board of directors of Adama, that the performance of the transaction is not reasonably expected to harm Adama’s ability to fulfill its existing and projected liabilities in the ordinary course of business, or its expected cash flow requirements, while taking into account the interests of the bondholders and the lenders, and maximizing value for Adama’s shareholders; (B) Receipt of written approval from Koor,
|
Note 3 – Investments (cont.)
|
H.
|
Development of investments in investee companies (cont.)
|
|
4.
|
Koor (cont.)
|
|
a.
|
(cont.)
|
1.
|
confirming that the financing of the agreement is not reasonably expected to have a negative impact on the value or financial position of Adama, provided that Koor exercises its right of approval in an acceptable commercial manner, and in good faith, and does not withhold approval for reasons associated with assets acquired in the transaction only (assuming that the value of these assets on the completion date of the transaction will not be significantly different than their value on the signing date of the agreement). In this context, it is noted that Koor and ChemChina have amended the shareholders agreement between them, in connection with their holding of Adama, such that, insofar as Adama will not complete the aforementioned public offering by March 31, 2015, and the transaction will be duly approved by the audit committee and the board of directors of Adama, as stated above, but will not be completed as a result of its non-approval by Koor, the commencement of the non-competition period specified in the shareholders agreement will be postponed by 24 months from September 30, 2014, and ChemChina will be entitled to postpone it by an additional six months.
|
2.
|
Subject to compliance with all conditioned terms for the completion of the transaction (or a waiver of the existence of any particular conditioned terms, by a party which is entitled to do so under the terms of the agreement), the completion date of the transaction will fall on the later of either: the fourth business day after the issuance of a new business license for each of the target companies; or the fifteenth business day that occurs after the earlier of either: (a) the date of completion of the Adama IPO; or (b) the date on which the buyer notifies the seller of the completion of the last of the conditioned terms described above, provided that, in any case, the completion date does not occur before January 1, 2015. The parties will invest their best efforts to complete the transaction as soon as possible, after the completion of the IPO of Adama shares, and the receipt of all other authorizations required for the completion of the transaction. Insofar as the transaction will not be completed by March 31, 2015, the parties will invest their best efforts to hold a discussion in good faith regarding available alternatives for the completion of the transaction, Adama and its shareholders are examining various possibilities with regard to the performance of the business combination between Adama and the Chinese companies, either by way of completing the transaction or by other ways.
|
3.
|
It should be noted, that the transaction is further to understandings which were included in the shareholders agreement, and that, subject to the compliance with the terms and conditions of the purchase agreement (including approval from Koor, which will be required insofar as the IPO will not be performed by March 31, 2015, as stated above), Koor provided its consent for the transaction, which was required by virtue of provisions of the shareholders agreement.
|
|
b.
|
Further to Discount Investments’ engagement with Koor in 2013 in a merger agreement (“The Merger Agreement”), in which Koor would become a private company whose issued and paid-up share capital (except for the deferred shares in Koor’s equity) would be held by Discount Investments (“The Merger Transaction”). In March 2014, the merger transaction was completed.
|
Note 3 – Investments (cont.)
|
H.
|
Development of investments in investee companies (cont.)
|
|
4.
|
Koor (cont.)
|
|
b.
|
(cont.)
|
|
-
|
In the event that Adama shares are issued to the public - the sum of the future consideration for a Koor share will be calculated based on the value of Koor holdings in Adama shares at the price of an Adama share on the stock exchange after the closing date for the look up period if any applies to the sale of this holding following the aforesaid issue, less certain expenses as stated below, and this sum shall be paid within 120 days of the date on which the aforesaid look up period ends.
|
|
-
|
In the event of an actual sale of an aggregate amount of over 40% of Koor holdings in Adama shares to an unrelated third party – the sum of the future consideration per Koor share will be calculated based on the value of Koor’s holding of Adama shares at the price per Adama share set forth in the sales transaction, less said certain expenses, and this sum will be paid within 120 days from the date of completion of the sales transaction.
|
|
-
|
If by October 17, 2018, no issue is made to the public, and said sales transaction is not executed as previously mentioned - the sum of the future consideration per Koor share will be calculated based on the fair value of Koor’s holding in Adama shares on that day, as to be determined by the court-appointed appraiser, less said certain expenses, and this sum will be paid within 120 days after the date of receipt of aforesaid valuation.
|
Note 3 – Investments (cont.)
|
H.
|
Development of investments in investee companies (cont.)
|
|
4.
|
Koor (cont.)
|
|
b.
|
(cont.)
|
|
c.
|
In January 2014, Koor sold its entire balance of its holdings in Credit Suisse shares, for a total consideration of CHF 312 million (NIS 1,202 million). In respect of these realizations, Koor recorded, in the first quarter of 2014, net profit of NIS 64 million. The Company’s share in the aforementioned profit is NIS 32 million. The comparative figures for the first nine months and the third quarter of 2013 were restated in the consolidated statement of income and in the consolidated statement of cash flows, in order to present the discontinued operation separately from the continuing operation. For details, see note 3.I.1 below.
|
|
d.
|
In November 2014, Adama published a document to register its shares for trade in the U.S.A (“The Registration Document”), as part of which Adama intended to issue shares to the public at the NYSE stock exchange at a price range of USD 16 to USD 18 per share. Due to the current capital market conditions, Adama decided not to pursue the aforesaid issue and it intends to consider the timing of the issue according to developments in market conditions.
|
|
In view of the postponement of the issue as aforesaid, the Company performed an impairment review with respect to its investment in Adama in its financial statements as of September 30, 2014.
|
|
In addition, as in every period, in its financial statements as of December 31, 2014, the Company updated the value of the hybrid financial instrument for a non-recourse loan that Koor received (for details regarding the financial treatment of the aforesaid financial instrument, see note 16.F.1.d below), based on an opinion given by an independent appraiser which is attached to these financial statements pursuant to regulation 8B of the Reporting Regulations, and the value of the (K series) bonds as stated in section b above.
|
|
The aforesaid impairment review (as of September 30, 2014) and the base asset that was used to measure the hybrid financial instrument and the (K series) bonds (as of December 31, 2014) are based on a fair value in an amount of approximately USD 14.6 and approximately USD 14.7, respectively, per Adama share according to the value per share reflected in the lower range published as part of the aforementioned registration document (USD 16 per Adama share), after deducting the shares’ non-negotiable component at rates of approximately 8.9% and approximately 8.2%, respectively.
|
|
As a result of all of the aforementioned, in 2014 the Company recorded a net loss in an amount of NIS 351 million, which is made up its share in the impairment of the investment in Adama in an amount of NIS 354 million and its share of finance income, net, in a sum of NIS 3 million for updating the value of the hybrid financial instrument and the (K series) bonds.
|
|
For details regarding the components of the hybrid financial instrument in respect of the non-recourse loan as specified and its value on the books, see note 16.F.1.d below.
|
Note 3 – Investments (cont.)
|
H.
|
Development of investments in investee companies (cont.)
|
|
4.
|
Koor (cont.)
|
|
e.
|
Permit to control Koor Tadiran Gemel Ltd.
|
|
On May 8, 2014, the controlling shareholders of the Company, Messrs. Mordechai Ben-Moshe and Eduardo Elsztain, through corporations controlled by them, received a letter from the Commissioner with regard to Koor’s control over Koor-Tadiran Gemel Ltd. (a management company wholly owned by Koor) (“Koor-Tadiran”). The letter stated, inter alia: that a control permit for Koor-Tadiran is held by Koor and not by the controlling shareholders thereof as required, and that the Commissioner is prepared to consider not regarding the transfer of control in the Company to them as an unlawful transfer and also allowing Koor to retain the control permit over Koor-Tadiran provided that no directors who are employed or who have been employed by the companies controlling Koor or who are or were related to the controlling shareholders in the Company will hold office in Koor-Tadiran, on the conditions stated in the letter, and on the condition that the amount of the holding of the means of control in the corporations controlled by the Company and the persons that directly and indirectly hold means of control in Koor will exceed 50% and Koor’s means of control in Koor-Tadiran will not be pledged, all of which until the examination of the application for a control in Koor-Tadiran is completed, or until July 30, 2014, whichever is the earlier.
|
|
On July 31, 2014, the controlling shareholders of the Company, Messrs. Mordechai Ben-Moshe and Eduardo Elsztain, received, through corporations controlled by them, a control permit to hold means of control and joint control in Koor-Tadiran through the Company, Discount Investments and Koor (together: “the holding companies”), which replaces the previous permit of May 8, 2014. This control permit states, inter alia, certain provisions with regard to the amount of the holdings in the holding companies and the making of issues of means of control in them, and it also provides that at least 50% of the means of control that the Company holds in Discount Investments will be unencumbered and free of charges. On March 16, 2015 a revised control permit was received from the Commissioner, in which the requirement included in the permit, which stipulated that at least 50% of the means of control that the Company holds in Discount Investments will be unencumbered and free of charges, was cancelled, with effect from March 15, 2015.
|
|
a.
|
Expiration of an agreement to sell the shares of Clal Holdings Insurance Enterprises held by the Company
|
Note 3 – Investments (cont.)
|
H.
|
Development of investments in investee companies (cont.)
|
|
5.
|
Clal Holdings Insurance Enterprises (cont.)
|
|
b.
|
The appointment of a trustee for the holdings of the controlling shareholders in the shares of Clal Holdings Insurance Enterprises
|
|
1.
|
The offeror (and insofar as a group of proposers is concerned – all of the constituents of the group) whose proposal is submitted for the court’s approval (“the successful offeror”) will confirm in advance that it is aware that the transfer of the means of control in the Company or in IDB Holdings to it does not constitute approval of the Commissioner of the transfer of means of control in the Company and does not constitute the granting of a control permit / a permit to hold means of control in the Clal Group.
|
|
2.
|
The successful offeror shall confirm that it agrees to the appointment of a trustee chosen by the Commissioner, whether the current trustee (as stated above) or another (in this section: “the trustee”), and that it is aware that the powers given to the Trustee will be in accordance with an irrevocable trust deed attached to the letter. In addition, as long as the transaction to sell the shares of Clal Holdings Insurance Enterprises to JT (see section a above with regard to the expiration of the aforesaid transaction) has not been completed, the successful offeror confirms that it agrees that certain provisions stated in the Commissioner’s letter will apply irrevocably, including:
|
Note 3 – Investments (cont.)
|
H.
|
Development of investments in investee companies (cont.)
|
|
5.
|
Clal Holdings Insurance Enterprises (cont.)
|
|
b.
|
The appointment of a trustee for the holdings of the controlling shareholders in the shares of Clal Holdings Insurance Enterprises (cont.)
|
|
2.
|
(cont.)
|
|
a.
|
The Trustee will continue to hold office as long as the Commissioner has not granted a control permit to a controlling shareholder in the Clal Group, or alternately a mechanism of an insurer without a controlling shareholder is implemented (as stated in the draft Promotion of Competition and Reduction of Centralization Law, 5772-2012 (following which the Promotion of Competition and the Reduction of Centralization Law, 5774-2013, was published on December 11, 2013) (“the draft Centralization Law”);
|
|
b.
|
During the trustee’s tenure, the successful offeror will waive the exercise of the voting rights attached to the means of control in Clal Holdings Insurance Enterprises and the financial institutions of the Clal Group, and will irrevocably agree to refrain from any action that amounts, directly or indirectly, to the direction of their operations, including by way of holding office as an officer in them, and that during the period of the trustee’s holding of office, the appointment of directors in the company and in the financial institutions of the Clal Group will be in accordance with the mechanism provided in the draft Concentration Law (and insofar as this cannot be done – by a committee that will be appointed by the Minister of Finance or the Commissioner) (see below with regard to clarifications that were received from the Commissioner on this matter);
|
|
c.
|
The letter further stated that within 30 days of the occurrence of a “Cessation Event” (as defined within that letter, which includes the non-compliance with the conditional terms in respect of the transaction to sell the shares of Clal Holdings Insurance Enterprises to JT (see section A. above)) the successful offeror will be permitted to file an application to receive a control permit or announce its intention of acting to sell the means of control in the Clal Group to third parties. The successful offeror will be given the opportunity of obtaining a control permit or a possibility of submitting to the Commissioner an agreement to sell the means of control in the Clal Group until December 31, 2014, and if the successful offeror is not granted a control permit or does not produce a sale agreement by that date, the trustee will act to realize the means of control in the Company at his sole discretion and subject to the Commissioner’s instructions, including by way of sale of the shares on the stock exchange, with the proceeds of the aforesaid sale being transferred to the Company. For an update on this matter, see below.
|
|
d.
|
As a condition for the Commissioner’s consent as stated above, the successful offeror will be required to give his prior written consent to the aforesaid conditions and will be required to act in order to obtain from the court a decision that these conditions form part of the terms of his offer for a debt arrangement in the Company. On November 28, 2013, the entities of the Elsztain-Extra Group notified the Commissioner of their consent and the giving of their undertaking as required by the Commissioner and the expert.
|
Note 3 – Investments (cont.)
|
H.
|
Development of investments in investee companies (cont.)
|
|
5.
|
Clal Holdings Insurance Enterprises (cont.)
|
|
b.
|
The appointment of a trustee for the holdings of the controlling shareholders in the shares of Clal Holdings Insurance Enterprises (cont.)
|
|
2.
|
(cont.)
|
|
d.
|
(cont.)
|
|
c.
|
The filing of an application to receive a new control permit and to cancel the old control permit, and determining a timeframe for the sale of the Company’s control and holdings in Clal Holdings Insurance Enterprises
|
Note 3 – Investments (cont.)
|
H.
|
Development of investments in investee companies (cont.)
|
|
5.
|
Clal Holdings Insurance Enterprises (cont.)
|
|
c.
|
The filing of an application to receive a new control permit and to cancel the old control permit, and determining a timeframe for the sale of the Company’s control and holdings in Clal Holdings Insurance Enterprises (cont.)
|
|
1.
|
The Company will act to sell the control in Clal Holdings Insurance Enterprises, so that it is no longer a part of the chain of control in Clal Holdings Insurance Enterprises. In accordance with the Control Policy Document it was determined that the minimal holding rate for control over Clal Holdings Insurance Enterprises, at the date of the specified letter, is 30% of the total means of control. The sale of control as specified will be done under the conditions and dates detailed below:
|
|
a.
|
The Company will engage with a recognized investment bank (Israeli or foreign) the identity of which will be confirmed by the trustee, to formulate an action outline to sell the control. The Company’s Board of Directors and the trustee will approve the outline, until and no later than June 30, 2015.
|
|
b.
|
The Company will sign an agreement to sell the control to a potential buyer for a price and commercial terms as it sees fit, until and no later than December 31, 2015.
|
|
c.
|
Should an agreement be signed as specified in section (B) above on the date, the possibility to complete the procedure to receive a control permit from the Commissioner will be given to the potential buyer, this until and no later than June 30, 2016.
|
|
2.
|
During the period until December 31, 2015 the Company will be entitled to sell some of the means of control in Clal Holdings Insurance Enterprises, so long as this will not impact the Company’s commitment to act to sell the control, as specified in section 1 above.
|
|
3.
|
Should any of the conditions stated in section 1 above is not complied with, on the dates stipulated alongside them, or if the control is sold to a potential buyer, and the Company retains means of control (“a terminating event”), then in each of these cases the Company will act to sell all of the means of control in Clal Holdings Insurance Enterprises that it owns, apart from the amount that it is permitted by law to hold in an insurer without a permit from the Commissioner, including by way of selling the means of control on the stock exchange or in off-exchange transactions, pursuant to the outline set out below and no later than the following dates:
|
|
a.
|
During a period of four months, starting from the occurrence of a terminating event, the Company shall sell at least 5% of the means of control in Clal Holdings Insurance Enterprises.
|
|
b.
|
During each of the subsequent periods of four months each, the Company shall sell in each period at least an additional 5% of the means of control in Clal Holdings Insurance Enterprises.
|
|
c.
|
If, in any four month period, more than 5% of the means of control in Clal Holdings Insurance Enterprises are sold, then in such a case the amount of the means of control sold in excess of the aforesaid amount will be offset against the required amount in the following period.
|
|
4.
|
Should the Company not fulfill its obligation as set forth in section (3) above, then the trustee will be entitled to act in the specified outline in its place, in accordance with all of the authorities vested in it under the stipulations of the trusteeship letter provided to it. The consideration for the sale as specified will be transferred to the Company. Expenses in respect of executing the sale of means of control will be borne solely by the Company.
|
Note 3 – Investments (cont.)
|
H.
|
Development of investments in investee companies (cont.)
|
|
5.
|
Clal Holdings Insurance Enterprises (cont.)
|
|
c.
|
The filing of an application to receive a new control permit and to cancel the old control permit, and determining a timeframe for the sale of the Company’s control and holdings in Clal Holdings Insurance Enterprises (cont.)
|
|
5.
|
Notwithstanding what is stated in sections (1) to (3) above, insofar as the control is sold to a potential buyer that received a control permit from the Commissioner, and the Company retains means of control in Clal Holdings Insurance Enterprises in an amount that requires a holding permit by law, the Company may file an application to receive a holding permit for the means of control that it holds, but what is stated in this section shall not constitute prior approval for the receipt of such a permit. If the Company does not receive a holding permit as aforesaid within six months of the date on which the permit control is given to the potential buyer, this date will be regarded as a terminating event and the provisions of sections 3 and 4 above will apply, mutatis mutandis.
|
|
6.
|
At the end of each quarter, or upon a request of the Commissioner or the trustee, the Company shall deliver to the Commissioner or to the trustee, as applicable, a status report regarding the progress in the sale outline.
|
|
7.
|
It was further stated in the letter that prima facie the Commissioner did not see any reason why the Company should not sell the control also to its controlling shareholders, or to any of them (alone, or jointly with another third party), however the letter has emphasized that any request to receive a control permit, including a request by one of the controlling shareholders in the Company, will be examined, inter alia, also in light of the stipulations of the Centralization Law, and that that stated in the Commissioner’s letter does not constitute an approval that it is possible to perform the sale as specified in accordance with the stipulations of the Centralization Law.
|
|
8.
|
The Commissioner’s letter clarified that there is no practical possibility as far as the Commissioner is concerned, to examine a number of requests for control permits in the Clal Group simultaneously, and insofar as requests requiring such examination are submitted in the future, the examination of these requests will not be done simultaneously.
|
|
9.
|
As required by the Commissioner’s letter, the Company signed an amended trusteeship letter (in the format attached to the Commissioner’s letter). Additionally, it has been clarified in the letter that as long as no other instruction was given by the Commissioner, the following instructions will apply irrevocably:
|
|
a.
|
The trustee will continue to serve in his role as long as the Company holds means of control in Clal Holdings Insurance Enterprises, without a permit, in an amount that requires a permit by law, without holding such a permit, or alternatively the Commissioner instructs in writing of the termination of the trustee’s service.
|
|
b.
|
During the trustee’s term of service, the Company and its controlling shareholders will not activate the voting rights attached to the means of control in Clal Holdings Insurance Enterprises and the corporations of the Clal Group listed in the Commissioner’s letter, including Clal Insurance Company (“Clal Group Companies”), and refrain from taking any action which may, directly or indirectly, constitute the direction of the business of Clal Holdings Insurance Enterprises or the Clal Group Companies, including by way of serving as a senior officer in Clal Holdings Insurance Enterprises or in Clal Group Companies.
|
|
c.
|
During the term of service of the trustee, appointment of directors in Clal Holdings Insurance Enterprises and in the Clal Group Companies will be done in accordance with the mechanisms stated in the Commissioner’s letter of May 8, 2014 (as stated in note 3.H.5.b above). In this regard, it has been clarified that appointment of directors in Clal Holdings Insurance Enterprises and in Clal Insurance Company will be made by the Committee for the Appointment of Directors in Insurers with no Controlling Owner, according to the meaning thereof in the Control of Financial Services (Insurance) Law, 5741-1981. Insofar as it is not possible to appoint directors by the committee as specified, the appointment of directors in these companies will be done by a different committee appointed by the Minister of Finance or by the Commissioner, or by any other way instructed by the Commissioner.
|
Note 3 – Investments (cont.)
|
H.
|
Development of investments in investee companies (cont.)
|
|
5.
|
Clal Holdings Insurance Enterprises (cont.)
|
|
c.
|
The filing of an application to receive a new control permit and to cancel the old control permit, and determining a timeframe for the sale of the Company’s control and holdings in Clal Holdings Insurance Enterprises (cont.)
|
|
10. Subject to compliance with the conditions and restrictions stated in sections (1) to (6) above and in section (9) above, and subject to the receipt of the consent in writing by the Company to all of the conditions stated in the specified letter, the Commissioner shall not view the continued holding of the means of control in the Company and in the Clal Group Companies, as an unlawful holding.
|
|
d.
|
The stock exchange value of the shares of Clal Holdings Insurance Enterprises held by the Company as of December 31, 2014 was NIS 1,696 million.
|
|
The difference between the value of the shares of Clal Holdings Insurance Enterprises that the Company held shortly before the date of the approval of these financial statements, which stood at NIS 1,878 million, and the value of the shares as of December 31, 2014, is positive and amounts to NIS 182 million.
|
|
e.
|
Cancellation of the previous control permit
|
|
For details regarding the cancellation of the previous control permit for the financial institutions in the Group, see section 3.K.4 below.
|
|
f.
|
In March 2015, the Company wrote to the trustee, Mr. Moshe Tery, asking him to act, by virtue of his position as trustee for the company and within the framework of the powers granted to him, in order that Clal Holdings Insurance Enterprises, subject to the distribution tests provided in the law, would distribute a dividend to its shareholders, on the earliest possible date.
|
Note 3 – Investments (cont.)
|
H.
|
Development of investments in investee companies (cont.)
|
|
6.
|
Other
|
|
a.
|
Further to a binding agreement signed by Given in December 2013 with a corporation from the Covidien Group, which is a leading global company in the field of health products (“Covidien”), for carrying out a transaction in which Covidien will acquire all of Given’s share capital for 30 dollars per share and in cash by way of a triple reverse merger transaction, in January 2014, the transaction was approved by a special majority of the general meeting of Given shareholders, and after receipt of the necessary regulatory requirements, the transaction was completed in February 2014. As a result of completion of the transaction, Discount Investments, Elron and RDC Rafael Development Corporation Ltd. (which held Given at the date of signing of the specified agreement in rates of approximately 14.7%, approximately 21.2% and approximately 8.3%, respectively) received in consideration of their holdings in Given shares amounts of 142 million dollars, 204 million dollars and 80 million dollars (61 million dollars less deduction of taxes), respectively, and the Company recorded in the first quarter of 2014, its share in the net profit (after tax) in an amount of NIS 324 million, and also the realization of the Company’s share in negative capital reserves in an amount of NIS 18 million, and as a result, the equity attributed to the owners of the Company increased by NIS 342 million.
|
|
b.
|
On February 17, 2015, after the date of the Statement of Financial Position, an agreement was signed between IDB Tourism and a number of its subsidiaries and a third party, to sell the operations of Diesenhaus Ltd. (“Diesenhaus”) in the outgoing tourism and internal tourism sector and the shares of certain subsidiaries of Diesenhaus (“The Subsidiaries”) in consideration for a total amount of up to approximately USD 13.8 million which shall be paid in a number of stages and a part of which is subject to meeting certain conditions. Within the framework of the transaction, the subsidiaries will repay their debt to Diesenhaus and these amounts will be used to reduce Diesenhaus’s credit facilities which were placed for the working capital funding needs of the subsidiaries. At the date of completion of the transaction, the Company is expected to record its share in the profit, which is estimated at an amount of NIS 12 million.
|
|
c.
|
In March 2015, after the date of the Statement of Financial Position, IDB Tourism and the Company approved the making of a settlement (“the agreement”) with S.H. Sky Investments (T.R.T.) Limited Partnership (“Sky Fund”), according to which, subject to the completion of the transaction to sell Diesenhaus’s operations (as specified in section B. above), in consideration of between USD 12.0-13.5 million, an amount of between NIS 17.4 million and NIS 19.4 million will be paid to Sky Fund out of the consideration for the Diesenhaus transaction (depending on the amount of the Diesenhaus transaction) as a success fee for the years in which Sky Fund managed the IDB Tourism group and for initiating the Diesenhaus transaction, and additionally an amount of NIS 0.6 million in respect of interest for funds deposited by the Company for Sky Fund in the trusteeship account of the trustee appointed by the Court (as stated in note 16.C.4 below) (it should be noted that this amount reflects the same conditions according to which the remaining creditors of the Company were paid in respect of amounts deposited with the observer in accordance with a settlement with the same creditors that was proposed by the observer and approved by the court).
|
|
The payment of the aforesaid amounts will constitute full and final payment of all of the liabilities of the IDB Tourism Group and the Company to Sky Fund. Should the Diesenhaus transaction not be completed by June 30, 2015, the agreement will be cancelled and the parties have agreed to negotiate a new settlement between them.
|
Note 3 – Investments (cont.)
|
H.
|
Development of investments in investee companies (cont.)
|
|
6.
|
Other (cont.)
|
|
d.
|
In October 2014, Curetech Ltd. (“Curetech”), a company that is held in an amount of approximately 29% by Clal Venture Capital Limited Partnership (“CVC”), which is held by the Company in an amount of approximately 33%, entered into a license agreement and into a supply and production services agreement (jointly: “the agreements”), according to which Curetech will grant the buyer an exclusive global license to develop and trade the Pidilizumab drug (“the drug”) that Curetech is developing. The consideration paid to Curetech will include an immediate payment in a sum of up to $5 million, future payments that are conditional upon reaching milestones up to a total amount of $85 million, future payments that are conditional on certain annual sales’ turnovers of the drug and royalties based on sales in variable amounts, in accordance with the annual sales’ turnover.
|
|
7.
|
Dividends
|
|
a.
|
In November 2014 Discount Investments distributed a cash dividend at an amount of NIS 200 million. The Company’s share in the stated dividend is NIS 148 million.
|
|
b.
|
In March 2014, Shufersal distributed a cash dividend of NIS 70 million.
|
|
c.
|
In September 2014, Elron distributed a cash dividend of USD 110 million.
|
|
d.
|
Details regarding dividends received by the Company from directly held investees:
|
For the year ending
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
NIS millions
|
||||||||||||
From Discount Investments
|
148 | - | - | |||||||||
From Clal Holdings Insurance Enterprises
|
- | 66 | 236 | |||||||||
From Clal Industries
|
- | - | 194 | |||||||||
148 | 66 | 430 |
|
e.
|
For details regarding the Company’s letter to the trustee requesting that Clal Holdings Insurance Enterprises will distribute a dividend to its shareholders, see note 3.H.5.f above.
|
|
As at December 31, 2014, the companies that are directly held by the Company, Discount Investment and IDB Tourism, had a negative balance of profits suitable for distribution and were unable to distribute dividends.
|
I.
|
Details regarding companies whose consolidation was ended during the reporting period and discontinued operations
|
|
1.
|
Discontinued operations
|
I.
|
Details regarding companies whose consolidation was ended during the reporting period and discontinued operations (cont.)
|
|
1.
|
Discontinued operations (cont.)
|
For the year ended December 31 2014 | For the year ended December 31 2013 | For the year ended December 31 2012 | ||||||||||||||||||||||||||||||
Credit Suisse | Clal Holding Insurance Enterprises Ltd. | Credit Suisse | Total | Clal Holding Insurance Enterprises Ltd. | Clal Indistries | Credit Suisse | Total | |||||||||||||||||||||||||
NIS millions | ||||||||||||||||||||||||||||||||
Income
|
||||||||||||||||||||||||||||||||
Sales and services
|
- | - | - | - | - | 2,328 | - | 2,328 | ||||||||||||||||||||||||
Income from insurance and finance businesses
|
- | 11,244 | - | 11,244 | 18,571 | 22 | - | 18,593 | ||||||||||||||||||||||||
Company share of the net income of investees treated using the equity accounting method, net
|
- | 1 | - | 1 | 7 | 27 | - | 34 | ||||||||||||||||||||||||
Profit from discontinued operations
|
- | - | - | - | - | 322 | - | 322 | ||||||||||||||||||||||||
Earnings from the disposal and increase in value of investments and assets
|
64 | 43 | 637 | (4) | 680 | 26 | 60 | 159 | 245 | |||||||||||||||||||||||
Increase in fair value of investment property
|
- | - | - | - | 21 | - | - | 21 | ||||||||||||||||||||||||
Other income
|
- | 7 | - | 7 | 2 | 10 | - | 12 | ||||||||||||||||||||||||
Financial income
|
- | 7 | 4 | 11 | 16 | 39 | 3 | 58 | ||||||||||||||||||||||||
64 | 11,302 | 641 | 11,943 | 18,643 | 2,808 | 162 | 21,613 | |||||||||||||||||||||||||
Expenses
|
||||||||||||||||||||||||||||||||
Cost of sales and services
|
- | - | - | - | - | 1,770 | - | 1,770 | ||||||||||||||||||||||||
Cost of insurance businesses
|
- | 8,933 | - | 8,933 | 14,759 | - | - | 14,759 | ||||||||||||||||||||||||
Costs and expenses in connection with insurance businesses and financial services
|
- | 1,693 | - | 1,693 | 3,077 | - | - | 3,077 | ||||||||||||||||||||||||
Research and development expenses
|
- | - | - | - | - | 28 | - | 28 | ||||||||||||||||||||||||
Sales and marketing expenses
|
- | - | - | - | - | 253 | - | 253 | ||||||||||||||||||||||||
General and administrative expenses
|
- | - | - | - | - | 127 | - | 127 | ||||||||||||||||||||||||
Loss from the realization and impairment of investments and assets
|
- | 189 | (2)(3) | - | 189 | 426 | 32 | - | 458 | |||||||||||||||||||||||
Other expenses
|
- | 24 | - | 24 | 1 | 20 | - | 21 | ||||||||||||||||||||||||
Financing expenses
|
- | 183 | - | 183 | 327 | 163 | (9 | ) | 481 | |||||||||||||||||||||||
- | 11,022 | - | 11,022 | 18,590 | 2,393 | (9 | ) | 20,974 | ||||||||||||||||||||||||
Income before taxes on income
|
64 | 280 | 641 | 921 | 53 | 415 | 171 | 639 | ||||||||||||||||||||||||
Taxes on Income
|
- | (164 | ) | 6 | (158 | ) | (133 | ) | (43 | ) | - | (176 | ) | |||||||||||||||||||
Income (loss) for the period from discontinued activities
|
64 | 116 | 647 | 763 | (80 | ) | 372 | 171 | 463 | |||||||||||||||||||||||
Net income (loss) from discontinued activities attributed to:
|
||||||||||||||||||||||||||||||||
Company owners
|
33 | (11 | ) | 414 | 403 | 62 | 359 | 112 | 533 | |||||||||||||||||||||||
Non-controlling rights
|
31 | 127 | 233 | 360 | (142 | ) | 13 | 59 | (70 | ) | ||||||||||||||||||||||
64 | 116 | 647 | 763 | (80 | ) | 372 | 171 | 463 |
|
(1)
|
Relates to the period between January 1, 2013 and August 21, 2013
|
|
(2)
|
Including an amortization of NIS 169 million in respect of setting the balance of the investment in Clal Holdings Insurance Enterprises according to the market value at August 21, 2013 (due to the expiration of the agreement to sell the Company’s holdings in Clal Holdings Insurance Enterprises, the increase in the fair value of the investment in Clal Holdings Insurance Enterprises for the period from August 21, 2013 until the end of 2013, in an amount of approximately NIS 83 million was reclassified from discontinued operations to continuing operations in the item “Loss from realization, impairment and amortization of investments and assets”). In addition, it includes expenses in a sum of NIS 2 million for the sale transaction.
|
|
(3)
|
See note 3.H.5.a above.
|
|
(4)
|
Includes NIS 12 million in respect of a distribution made by Credit Suisse in May 2013.
|
I.
|
Details regarding companies whose consolidation was ended during the reporting period and discontinued operations (cont.)
|
|
2.
|
Assets, realization groups and held-for-sale liabilities
|
As at December 31, 2013
|
||||
NIS Millions
|
||||
Assets of realization groups and other assets classified as held-for-sale
|
||||
Investment in Clal Holdings Insurance Enterprises Ltd.
|
2,055 | |||
Investment in Credit Suisse
|
1,138 | |||
Fixed assets(1)
|
37 | |||
Investment property
|
187 | |||
Intangible assets(1)
|
481 | (2) | ||
Loans, deposits and investments(1)
|
431 | |||
Trade receivables(1)
|
115 | |||
Inventory(1)
|
107 | |||
Cash and cash equivalents(1)
|
153 | |||
Other assets
|
75 | |||
4,779 | ||||
Assets of realization groups and other assets classified as held-for-sale(1)
|
||||
Other payables and credit balances
|
88 | |||
Trade payables
|
37 | |||
Other liabilities
|
40 | |||
165 | ||||
|
(1)
|
Relates to amounts in respect of Given.
|
|
(2)
|
Reclassified.
|
I.
|
Details regarding companies whose consolidation was ended during the reporting period and discontinued operations (cont.)
|
|
3.
|
a. Details regarding Given, whose consolidation was ended in February 2014:
|
At the consolidation cessation date
|
||||
NIS Millions
|
||||
Effect of the sale of the holding in Given on the financial position, as at the date of deconsolidation
|
||||
Assets classified as held for sale
|
1,332 | |||
Liabilities classified as held for sale
|
201 | |||
Cash flow arising from the sale for the Group
|
||||
Consideration received from the sale less cash spent within the deconsolidation
|
1,323 | |||
For the period from January 1, 2014 until the date of deconsolidation
|
||||
NIS millions
|
||||
Given’s effect on the Group’s results until the date of deconsolidation in February 2014
|
||||
Sales and services
|
86 | |||
Loss attributable to the owners of the Company
|
(70 | ) | ||
Loss attributable to non-controlling shareholders
|
(81 | ) |
|
b.
|
The main companies whose consolidation was ended or begun in these financial statements
|
|
1.
|
The following are companies whose consolidation was ended
|
Investee Company name
|
Deconsolidation date
|
Maxima Air Separation Center Ltd.
|
June 2012
|
Clal Industries
|
July 2012
|
Ham-Let (Israel Canada) Ltd.
|
August 2012
|
Guard
|
August 2012
|
Ma’ariv Holdings Ltd.
|
September 2012
|
Titanium
|
December 2012
|
Clal Holdings Insurance Enterprises Ltd. (see also a. above and sections H.5.a and I.1 in this Note)
|
August 2013
|
Given (see also Note 3.H.6.a. below)
|
February 2014
|
|
2.
|
Company consolidated for the first time
|
J.
|
The following are details regarding the liquid resources, gross debt and significant restrictions upon the transfer of resources between entities within the Group, relating mainly to a restriction upon the transfer of cash as of December 31, 2014, and after the date of the Statement of Financial Position (in NIS millions):
|
Name of the company
|
Amount of the restricted/ charged asset
|
Amount of the liability in the Statement of Financial Position (principal only)
|
Restriction
|
Note
|
||||||
The Company and directly and indirectly consolidated companies of the Company
|
Restriction on distribution of dividend
Distributable profits – dividends distribution
|
15.D
3.H.7
3.K and L
|
||||||||
Cellcom
|
1,353 |
Financial covenants:
- Early repayment cause (cross default or cessation of rating)
- Cash dividend
- Non-creation of pledges over Cellcom’s and Netvision’s assets
|
16.F.2 and 22.G
|
|||||||
Property & Building and asset companies wholly owned by it
|
2,967 | 1,271 1,556 |
Financial covenants relating to bonds:
-Early repayment cause including due to cross default, cessation of rating and lowering rating;
- Restrictions on dividend distribution
Financial covenants with regard to a bank loan:
- Mortgage on HSBC Building and pledges on rental agreements and rental fees from the building etc.;
- Early repayment causes
|
16.F.3 and 22.I
|
||||||
Shufersal
|
863 |
Financial covenants:
- Early repayment causes including due to cross default
- Meeting shareholders capital
- Non-creation of a floating pledge on all of its assets
- Restrictions on dividend distribution
|
16.F.4 and 22.H
|
|||||||
Discount Investments
|
3,051 | 521 4,557 4,487 | (**) |
Financial covenants with regard to a bank loan:
- Early repayment causes including due to cross default or in events of change in control;
- Refraining from giving charges to others.
Obligation towards bondholders
Pledge over Adama shares
-Pledge to secure a loan provided to Koor from a Chinese bank as part of the Adama and ChemChina merger.
|
16.F.1.b and 22.E
16.F.1.f
|
|||||
Adama (*)
|
Financial covenants:
- Early repayment causes
- Meeting shareholders capital
- Meeting a retained earnings balance
|
16.F.5.b and c
|
(*)
|
Upon the completion of the merger transaction with ChemChina, the profit distribution determined in the shareholders agreement and Adama’s articles of association entered into effect, according to which subject to the stipulations of the articles of association and the instructions of the Companies Law, the board of directors of Adama will be entitled from time to time to declare and cause Adama to pay dividends in respect of any financial periods, as the board of directors of Adama shall see fit justifiably considering Adama’s profits. Subject to any law and the reasonable cash flow liquidity requirements applying to Adama, Adama will declare an annual dividend at an amount of no less than 40% of its profits for that year. Since the first offering of Adama’s shares to the public was not completed within three years of the date of completing the merger transaction with ChemChina (i.e., by October 17, 2014), then, starting from the first financial year after the third anniversary of the closing of the merger transaction with ChemChina (i.e., 2015), subject to any law and the reasonable cash flow liquidity requirements applying to Adama, Adama will declare an annual dividend in an amount of no less than 80% of its profits for that year.
|
K.
|
Capital requirements for insurance companies in Israel
|
As at December 31 | As at December 31 | |||||||||||||||
2014 | 2013 | |||||||||||||||
Insurance companies | Insurance companies | |||||||||||||||
Clal Insurance | Clal Credit | Clal Insurance | Clal Credit | |||||||||||||
NIS millions | ||||||||||||||||
Minimum equity:
|
||||||||||||||||
Amount required pursuant to the amended Capital Regulations
|
4,569 | 35 | 4,477 | 34 | ||||||||||||
Current amount as calculated pursuant to the Capital Regulations:
|
||||||||||||||||
Basic tier 1 capital
|
4,147 | 172 | 3,766 | 146 | ||||||||||||
Tier 2 subordinated capital (see section 3.b)
|
432 | - | 621 | - | ||||||||||||
Tier 2 hybrid capital (see section 3.b)
|
2,081 | - | 1,566 | - | ||||||||||||
Total Tier 2 capital
|
2,513 | - | 2,187 | - | ||||||||||||
Total current capital, calculated according to the Capital Regulations
|
6,660 | 172 | 5,953 | 146 | ||||||||||||
Surplus
|
2,091 | 137 | 1,476 | 112 | ||||||||||||
Capital operations which took place after the reporting date:
|
||||||||||||||||
Reduction of subordinated Tier 2 capital
|
(15 | ) | - | 29 | - | |||||||||||
Surplus taking into account Events Subsequent to the statements Date
|
2,076 | 137 | 1,447 | - | ||||||||||||
The investment amount to be provided against surplus capital, in accordance with directives of the Commissioner, or which is actually held against surplus capital, and which therefore constitutes non-distributable retained earnings
|
25 | - | 27 | - | ||||||||||||
*) Total required amount, capital requirements in respect of:
|
||||||||||||||||
Non-life insurance activities / required Tier 1 capital
|
628 | 30 | 655 | 30 | ||||||||||||
Activities in long-term care insurance
|
104 | - | 101 | - | ||||||||||||
Extraordinary risks in life insurance
|
411 | - | 400 | - | ||||||||||||
Deferred acquisition costs in life insurance and disease and hospitalization insurance
|
1,248 | - | 1,233 | - | ||||||||||||
Requirements in respect of guaranteed yield plans
|
5 | - | 10 | - | ||||||||||||
Non-recognized assets, as defined in the Capital Regulations
|
78 | 1 | 64 | - | ||||||||||||
Investment in consolidated insurance and management companies (including acquired management activities)
|
551 | - | 548 | - | ||||||||||||
Equity required in respect of investments
|
1,024 | 2 | 963 | 2 | ||||||||||||
Catastrophe risks in non-life insurance
|
134 | - | 115 | - | ||||||||||||
Operational risks
|
285 | 2 | 287 | 2 | ||||||||||||
Guarantees
|
101 | - | 101 | - | ||||||||||||
Total required capital
|
4,569 | 35 | 4,477 | 34 | ||||||||||||
**Reduction of capital required in respect of the original difference (see section 3.f.)
|
208 | - | 211 | - | ||||||||||||
Tax reserve in respect of provident fund acquisition (see section 3.f.)
|
76 | - | 54 | - |
K.
|
Capital requirements for insurance companies in Israel (cont.)
|
|
1.
|
The Board of Directors of Clal Holdings Insurance Enterprises supervises the yield on capital, which the Clal Holdings Insurance Enterprises group defines as comprehensive income (loss) for the period, which is attributed to its shareholders divided by the equity attributed to the shareholders of the Company. The Board of Directors of Clal Holdings Insurance Enterprises decides upon the amounts of the dividends for the shareholders. The Board of Directors of Clal Insurance determined the target capital at approximately 12% above the minimum equity required by law (herein: the “target equity”). It is hereby clarified that the above is not a binding equity requirement, but rather an equity level which Clal Insurance will strive to maintain, and no certainty exists that Clal Insurance will meet this target at all times. As of December 31, 2014, Clal Insurance complied with the target equity. The policy of the management of Clal Holdings Insurance Enterprises is to hold a strong capital basis in order to retain its ability to continue its operations so that it can produce a return for its shareholders, and in order to comply with external equity requirements to which it is subject by virtue of its holding in Clal Insurance, and in order to support the equity needs of its consolidated companies, some of which are subject to external equity requirements, as stated in this section and in section L below, and future business development.
|
|
2.
|
In addition to the general requirements and the Companies Law, dividend distributions performed out of capital surplus in an insurance company are also subject to liquidity requirements, and to compliance with the terms of the Investment Regulations and additional directive published by the Commissioner of Capital Markets from time to time.
|
|
3.
|
a. Minimum capital –
|
|
b.
|
Composition of insurer’s capital
|
|
1.
|
Tier 1 capital - including Basic Tier 1capital (at the level of equity attributed to shareholders). The overall rate of the Tier 1 capital must not be less than 60% of the insurer’s equity.
|
|
2.
|
Tier 2 capital - Including Tier 2 hybrid capital instruments (excluding periodic accrued interest payments), Tier 2 subordinated capital instruments (as defined in the Circular), and any other component or instrument approved by the Commissioner. A Tier 2 hybrid capital instrument is subordinate to any other debt, excluding Tier 1 capital, and includes financial instruments which are available to absorb the insurer’s losses by postponing principal and interest payments. The first repayment date for Tier 2 capital instruments will be after the end of a period reflecting the weighted average of the periods for repayment of the insurance liabilities plus two years, or 20 years, whichever is earlier, but no earlier than 8 years from the issue date. In the event that a Tier 2 hybrid capital instrument includes an early redemption incentive, the first date of the early redemption incentive may be no earlier than 5 years from the instrument’s issue date.
|
K.
|
Capital requirements for insurance companies in Israel (cont.)
|
|
3. (cont.)
|
|
b.
|
Composition of insurer’s capital (cont.)
|
|
3.
|
Tier 3 capital - including Tier 3 hybrid capital instruments (excluding periodic accrued interest payments) and another component or instrument approved by the Commissioner. Tier 3 capital instruments are subordinate to all other instrument, excluding Tier 1 and Tier 2 capital, and includes financial instruments which are available to absorb the insurer’s losses by postponing only principal payments. It can be stipulated that Tier 3 capital will not come before Tier 2 capital, and will be equivalent to it in the order of credit. The first repayment date of Tier 3 capital instruments is no earlier than 5 years from their issue date. In the event that a Tier 3 hybrid capital instrument includes an early redemption incentive, the first date of the early redemption incentive may be no earlier than 3 years from the instrument’s issue date. The overall amount of Tier 3 capital must not exceed 15% of the insurer’s total equity.
|
|
1.
|
Tier 2 subordinated capital issued up to December 31, 2009 will be recognized until its final repayment date, under the conditions in which it was recognized until the publication of the Circular.
|
|
2.
|
Tier 2 subordinated capital which was issued beginning on January 1, 2010 and thereafter will not be recognized upon the application of the directive in Israel, or beginning on January 31, 2013, whichever is earlier.
|
|
3.
|
Hybrid tier 1, hybrid tier 2 and hybrid tier 3 instruments issued on January 1, 2010 or thereafter, and which were approved by the Commissioner, will be recognized until their final payment date, under the conditions under which they were issued, and in accordance with the rate restrictions applicable to the various tiers.
|
|
4.
|
Hybrid tier 1, hybrid tier 2 and hybrid tier 3 instruments will be issued beginning on the date the Circular comes into force, according to the conditions specified therein, will be fully recognized upon the application of the directive in Israel, until their repayment dates.
|
|
c.
|
In accordance with the Commissioner’s letter, the Commissioner will not approve a dividend distribution unless, after carrying out the distribution, the insurer has a ratio of recognized equity to required equity of at least 105% and all of the following documents are submitted to the Commissioner:
|
|
1.
|
The insurance company’s annual earnings projection, for the two years following the dividend distribution date.
|
|
2.
|
Submission of an updated debt service plan approved by the Board of Directors of the insurance company.
|
|
3.
|
Submission of a capital make-up action plan approved by the Board of Directors of the insurance company.
|
|
4.
|
Minutes of the meeting of the Board of Directors of the insurance company at which the dividend distribution was approved.
|
K.
|
Capital requirements for insurance companies in Israel (cont.)
|
|
3. (cont.)
|
|
c.
|
Composition of insurer’s capital (cont.)
|
For the year ended December 31
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Amount for distributing dividends (in NIS millions)
|
- | 100 | 200 | |||||||||
Total NIS per share
|
- | 0.84 | 1.69 | |||||||||
Prior Commissioner approval required
|
- |
No
|
Yes
|
|
d.
|
In November 2014, the Commissioner published a letter to the managers of the Insurance companies (“The Letter”) regarding an outline for implementation of a solvency regime based on Solvency II in Israel. In the letter the Commissioner noted that the European parliament resolved that the implementation of the Directive in Europe will be at the start of 2016, and schedules were set forth to implement the final instructions. In light of the intention to publish final instructions in Europe until June 2015, the Commissioner intends, during 2016, to publish instructions regarding the adjustment of the first pillar of the Directive to the local market which will replace the current instructions and that the insurance companies will be required to meet these instructions as of the annual financial statements for 2016. For a period to be determined, insurance companies will be required to meet the capital requirements both according to the existing instructions and according to the final instructions to be determined. Until the final implementation, the Commissioner intends to publish instructions for the performance of quantitative evaluation surveys (IQIS) for 2014 and 2015 and determine a quarterly reporting format according to the new outline.
|
|
The implementation of the Solvency II Directive, according to the IQIS model derived from the Commission’s instruction to perform quantitative evaluation surveys, may reduce the capital ratio (existing capital compared to required capital) of the insurance companies at the Group. The model is structurally sensitive to changes in market and other variables and therefore the capital requirements reflected from it may be more volatile.
|
|
e.
|
The capital requirements under the Capital Regulations will continue to be based on solo financial statements. In order to calculate recognized capital in accordance with the Capital Regulations, an insurance company’s investment in an insurance company or in a controlled managing company, as well as in other investees, will be calculated on an equity basis using the ultimate holding rate for them.
|
K.
|
Capital requirements for insurance companies in Israel (cont.)
|
|
3. (cont.)
|
|
f.
|
The minimum equity required of Clal Insurance was reduced, with the Commissioner’s approval, in respect of the original difference attributed to the managing companies and to the provident funds which are under its control, at a rate of 35% of the balance of the original aforementioned difference. When calculating the amount permitted for dividend distribution, this reduction will be added to each capital level required (see details in Section 3c above). In September 2013, Clal Insurance received a letter from the Commissioner stipulating that the amount of the reduction that will be added to the minimum required capital, in calculating the amount permitted for distribution as a dividend, will be after deduction of the accumulated tax reserve at Clal Insurance in view of the acquisition of provident fund activity. It is also noted that this authorization will be revoked upon the entry into validity of the capital requirements set forth in the first layer of the Directive (see section d. above) that will replace the Capital Requirements, and does not reflect the control policy for implementation of the above requirements.
|
|
g.
|
In March 2013, Clal Insurance received a letter from the Commissioner according to which, concerning the instructions of the law on credit rating, the rating determined according to the internal credit rating model of Clal Insurance will be considered a rating which corresponds, in terms of risk, to the rating of a rating company, according to the conditions and for the branches determined. In accordance with the Commissioner’s approval, Clal Insurance is permitted to allocate equity in respect of matching loans, which are rated according to the internal model according to the percentages set forth in the Capital Regulations. If a loan exists with an external rating, the allocation of equity will be according to the lower of the ratings. The letter stipulates that Clal Insurance is required to file immediate and periodical reports as detailed in the annex to the letter. Likewise, by March 2 2014, the supplements required by the Commissioner regarding validation and control were provided. Clal Insurance implemented the aforementioned instructions, and, as a result, the capital requirements decreased by NIS 3 million, correct as at the end of the report period.
|
|
4.
|
Permit given by the Commissioner to the previous controlling shareholders of IDB Holdings, to hold control of Clal Holdings Insurance Enterprises and financial institutions
|
K.
|
Capital requirements for insurance companies in Israel (cont.)
|
|
4.
|
Permit given by the Commissioner to the previous controlling shareholders of IDB Holdings, to hold control of Clal Holdings Insurance Enterprises and financial institutions (cont'd)
|
|
5.
|
Clal Insurance is required to supplement the equity required of Clal Credit Insurance according to the Capital Regulations up to 50% of the required capital, only in the event that the equity of Clal Credit Insurance is negative, and will be valid so long as Clal Insurance is the controlling shareholder of Clal Credit Insurance.
|
|
6.
|
Clal Insurance is required supplement, at any time, the shareholders capital of Clal Pension and Provident, to the amount stipulated in the Income Tax Regulations (Regulations for Approval and Management of Provident Funds), 5724-1964. This undertaking will remain in force so long as Clal Insurance controls Clal Pension and Provident Funds, either directly or indirectly.
|
L.
|
Capital requirements in companies that manage pension funds and provident funds
|
|
1.
|
In February 2012, the Supervision of Financial Services Regulations (Provident Funds) (Minimum Equity Capital Required of a Managing Company of a Provident Fund or Pension Fund) Regulations, 5772-2012, and Income Tax Regulations (Rules for Approval and Management of Provident Funds) (hereinafter: the “New Regulations”) were published. Pursuant to the New Regulations, the capital requirements of managing companies were expanded, and they include capital requirements in accordance with the extent of the assets under management and the annual expenses, but not less than an initial capital of NIS 10 million.
|
L.
|
Capital requirements in companies that manage pension funds and provident funds (cont.)
|
|
2.
|
In view of the publication of the capital regulations for managing companies and for the purpose of financing investing activities and operating activities, which include, inter alia, investment in development of a system to manage member rights in the pension funds, investment in the development of a system to manage member rights in provident funds, as well as repayment of agent commissions (which are charged to deferred acquisition costs (DAC)) to Clal Insurance, the boards of directors of Clal Insurance and Clal Pension and Provident approved the creation of a credit facility from Clal Insurance to Clal Pension and Provident Funds, up to a cumulative total of NIS 150 million, which was used up in its entirety by the end of 2013. The amounts that were withdrawn as part of the updated credit facility, will bear interest until their repayment date at an annual rate of 4.7%.
|
A.
|
Non-current investments
|
|
As of December 31
|
|||||||
2014
|
2014
|
|||||||
NIS millions
|
||||||||
Financial assets presented by fair value through profit or loss:
|
||||||||
Shares registered for trade (1)
|
1,700 | 4 | ||||||
Shares not registered for trade (2)
|
266 | 291 | ||||||
Deposits
|
49 | 47 | ||||||
Derivatives not used for accounting hedging
|
4 | 6 | ||||||
Others
|
102 | 4 | ||||||
2,121 | 352 | |||||||
Financial assets designated at fair value through other comprehensive income:
|
||||||||
Shares listed for trading
|
1 | 3 | ||||||
Total non-current uncharged investments
|
2,122 | 355 |
|
(1)
|
Including an investment in Clal Holdings Insurance Enterprises shares in a sum of NIS 1,696 million.
|
|
(2)
|
With regard to the valuation of the fair value of the Group’s investments in a number of private companies, see note 21.G.2 below.
|
B.
|
Current investments
|
As of December 31
|
||||||||
2014
|
2013
|
|||||||
NIS millions
|
||||||||
Financial assets at fair value through profit or loss:
|
||||||||
Government bonds and short-term treasury bills
|
1,469 | 1,489 | ||||||
Mutual fund participation certificates
|
887 | 536 | ||||||
Non-convertible corporate bonds
|
651 | 672 | ||||||
Exchange traded notes
|
288 | 257 | ||||||
Shares
|
19 | 21 | ||||||
Derivatives not for hedging purposes
|
2 | 5 | ||||||
Other
|
1 | 2 | ||||||
3,317 | 2,982 |
Note 5 – Loans, deposits, charged deposits and debit balances
|
A.
|
Non-current loans, charged deposits and debit balances
|
As at December 31
|
||||||||
2014
|
2013
|
|||||||
NIS Millions
|
||||||||
Composition
|
||||||||
Short-term loans and deposits
|
179 | 29 | ||||||
Charged deposits(1)
|
18 | 52 | ||||||
Deposits in trust
|
- | 11 | ||||||
Long-term debit balances
|
114 | 12 | ||||||
311 | 104 | |||||||
Less current maturities of loans and deposits
|
(156 | ) | (11 | ) | ||||
Less current maturities of debit balances
|
(4 | ) | - | |||||
151 | 93 |
|
(1)
|
In respect of a deposit that was pledged by the Company for a financial institution in respect of a loan which was received. For details, see note 16.C.2.
|
B.
|
Current loans, deposits and charged deposits
|
As at December 31
|
||||||||
2014
|
2013
|
|||||||
NIS Millions
|
||||||||
Composition
|
||||||||
Deposits at banks
|
213 | 43 | ||||||
Charged deposits
|
143 | 612 | ||||||
Other deposits and loans
|
2 | 1 | ||||||
Current maturities of non-current loans and deposits
|
156 | 11 | ||||||
514 | 667 |
Note 6 – Fixed Assets
|
A.
|
Composition and movement
|
Buildings | Machinery, plant & equipment | Communications network | Airplanes | Computer, office furniture, equipment and other | Installations and leasehold improvements | Total | ||||||||||||||||||||||
NIS millions | ||||||||||||||||||||||||||||
Cost | ||||||||||||||||||||||||||||
Balance as at January 1, 2013 | 2,566 | 2,555 | 5,628 | 487 | 1,484 | 1,689 | 14,409 | |||||||||||||||||||||
Transfer from assets held for sale
|
108 | 42 | - | - | 5 | - | 155 | |||||||||||||||||||||
Acquisitions through business combination
|
- | 82 | - | - | 61 | 24 | 167 | |||||||||||||||||||||
Additions
|
115 | 141 | 213 | 3 | 59 | 106 | 637 | |||||||||||||||||||||
Disposals(1)
|
(10 | ) | (8 | ) | (346 | ) | - | (410 | ) | (42 | ) | (816 | ) | |||||||||||||||
Disposals following discontinuance of consolidation
|
(145 | ) | - | - | - | (489 | ) | (107 | ) | (741 | ) | |||||||||||||||||
Transfer from investment property under construction
|
6 | - | - | - | - | - | 6 | |||||||||||||||||||||
Transfer to investment property
|
(4 | ) | - | - | - | - | - | (4 | ) | |||||||||||||||||||
Transfer to assets held for sale
|
(116 | ) | (77 | ) | - | - | (111 | ) | (46 | ) | (350 | ) | ||||||||||||||||
Effect of changes in exchange rates
|
- | (7 | ) | - | (35 | ) | (7 | ) | (4 | ) | (53 | ) | ||||||||||||||||
Balance as at December 31, 2013
|
2,520 | 2,728 | 5,495 | 455 | 592 | 1,620 | 13,410 | |||||||||||||||||||||
Additions
|
113 | 176 | 340 | 9 | 59 | 142 | 839 | |||||||||||||||||||||
Disposals(1)
|
(29 | ) | (145 | ) | (161 | ) | - | (138 | ) | (122 | ) | (595 | ) | |||||||||||||||
Revaluation of assets transferred to investment property
|
6 | - | - | - | - | - | 6 | |||||||||||||||||||||
Transfer from investment property
|
1 | - | - | - | - | - | 1 | |||||||||||||||||||||
Transfer to investment property
|
(46 | ) | - | - | - | - | - | (46 | ) | |||||||||||||||||||
Effect of changes in exchange rates
|
- | 2 | - | 55 | 4 | 2 | 63 | |||||||||||||||||||||
Balance as at December 31, 2014
|
2,565 | 2,761 | 5,674 | 519 | 517 | 1,642 | 13,678 |
|
(1)
|
The Group derecognizes assets that were fully depreciated and are not used by the Group.
|
Note 6 – Fixed Assets (cont.)
|
A.
|
Composition and movement (cont.)
|
Buildings
|
Machinery, plant & equipment
|
Communications network
|
Airplanes
|
Computers, office furniture, equipment and other
|
Installations and leasehold improvements
|
Total
|
||||||||||||||||||||||
NIS millions
|
||||||||||||||||||||||||||||
Accumulated depreciation and impairment losses
|
||||||||||||||||||||||||||||
Balance as at January 1, 2013
|
544 | 1,897 | 3,902 | 44 | 1,133 | 1,027 | 8,547 | |||||||||||||||||||||
Transfer from assets held for sale
|
56 | 30 | - | - | 4 | - | 90 | |||||||||||||||||||||
Acquisitions through business combination
|
- | 56 | - | - | 51 | 14 | 121 | |||||||||||||||||||||
Depreciation for the year
|
48 | 151 | 340 | 21 | 108 | 106 | 774 | |||||||||||||||||||||
Reversal of impairment loss
|
(1 | ) | - | - | - | - | (2 | ) | (3 | ) | ||||||||||||||||||
Disposals(1)
|
(2 | ) | (8 | ) | (341 | ) | - | (397 | ) | (42 | ) | (790 | ) | |||||||||||||||
Disposals following discontinuance of consolidation
|
(58 | ) | - | - | - | (422 | ) | (74 | ) | (554 | ) | |||||||||||||||||
Transfer to investment property
|
(1 | ) | - | - | - | - | - | (1 | ) | |||||||||||||||||||
Transfer to assets held for sale
|
(49 | ) | (56 | ) | - | - | (101 | ) | (38 | ) | (244 | ) | ||||||||||||||||
Effect of changes in exchange rates
|
- | (5 | ) | - | (4 | ) | (7 | ) | (2 | ) | (18 | ) | ||||||||||||||||
Balance as of December 31, 2013
|
537 | 2,065 | 3,901 | 61 | 369 | 989 | 7,922 | |||||||||||||||||||||
Depreciation for the year
|
44 | 157 | 330 | 22 | 60 | 126 | 739 | |||||||||||||||||||||
Impairment loss(2)
|
19 | 3 | - | - | - | - | 22 | |||||||||||||||||||||
Reversal of impairment loss
|
(1 | ) | - | - | - | - | (1 | ) | (2 | ) | ||||||||||||||||||
Disposals(1)
|
(16 | ) | (142 | ) | (156 | ) | - | (131 | ) | (122 | ) | (567 | ) | |||||||||||||||
Transfer to investment property
|
(11 | ) | - | - | - | - | - | (11 | ) | |||||||||||||||||||
Effect of changes in exchange rates
|
- | 2 | - | 9 | 3 | 2 | 16 | |||||||||||||||||||||
Balance as of December 31, 2014
|
572 | 2,085 | 4,075 | 92 | 301 | 994 | 8,119 | |||||||||||||||||||||
Net carrying amount
|
||||||||||||||||||||||||||||
As at January 1, 2013
|
2,022 | 658 | 1,726 | 443 | 351 | 662 | 5,862 | |||||||||||||||||||||
As at December 31, 2013
|
1,983 | 663 | 1,594 | 394 | 223 | 631 | 5,488 | |||||||||||||||||||||
As at December 31, 2014
|
1,993 | 676 | 1,599 | 427 | 216 | 648 | 5,559 |
(1)
|
The Group derecognizes assets that were fully depreciated and are not used by the Group.
|
(2)
|
For details regarding non-recurring expenses recorded in respect of an updated business plan in Shufersal, see Note 3.H.3.b. above.
|
Note 6 – Fixed Assets (cont.)
|
B.
|
Additional information
|
|
1.
|
The balance of borrowing costs capitalized into fixed assets as at December 31, 2014 amounts to NIS 35 million (as at December 31, 2013 – NIS 28 million). It is noted, that Shufersal acquired land with the intention of constructing a logistic center on it, which will be used for fixed assets. Costs invested in the land and equipment during 2014 amounted to NIS131 million, and included borrowing costs which were capitalized to the fixed asset which is under construction totaling NIS 7 million. The nominal discount rate used to determine the capitalized borrowing costs is 4.42%. Shufersal has no specific borrowing costs.
|
|
2.
|
The cost of fixed assets as at December 31, 2014 and December 31, 2013 is presented after the deduction of investment grants received totaling NIS 39 million.
|
|
3.
|
During the ordinary course of business, the Group acquires fixed assets using credit. The cost amounts, which have not yet been paid as at December 31, 2014 are NIS 203 million (as at December 31, 2013 – NIS 99 million).
|
|
4.
|
Fixed assets under construction amounts as at December 31, 2014 to NIS 291 million (as at December 31, 2013 – NIS 167 million).
|
|
5.
|
The fair value of fixed assets, recognized as part of a business combination is based on an estimate of the amount for which the fixed assets could have been replaced on the day of the valuation with a different asset of similar characteristics of use, in a transaction between a willing seller and a willing buyer, acting rationally in a transaction unaffected by a special relationship between the parties. Accordingly:
|
·
|
The market value of land and buildings was valued by a real estate appraiser.
|
·
|
The market value of leasehold improvements and equipment, facilities and vehicles in the branches was valued according to their depreciated cost on Shufersal’s books, which is a close approximation of their fair value, in light of the reasonable depreciation rates applied to them.
|
·
|
The market value of items located in the factories, equipment and fixtures, as well as facilities, is based on the quoted market values of similar items, insofar as such are available, and replacement costs when such quotes as specified are unavailable. The estimate of reduced replacement costs takes into account adjustments in respect of physical erosion and functional and economical obsolescence of the fixed asset item.
|
|
6.
|
With regard to pledges – see note 22 below.
|
Note 7 – Investment Property
|
A.
|
Composition and changes in the carrying amount of investment property
|
Investment property measured at fair value at level 3*
|
||||||||||||||||
Available land
|
Rental buildings
|
Buildings under construction
|
Total
|
|||||||||||||
NIS millions
|
||||||||||||||||
2014
|
525 | 8,532 | 770 | 9,827 | ||||||||||||
Balance as at January 1, 2014
|
||||||||||||||||
Movement in the year
|
||||||||||||||||
Acquisitions and investments in existing properties
|
3 | 51 | 448 | 502 | ||||||||||||
Transfer from fixed assets
|
- | 35 | - | 35 | ||||||||||||
Transfer from investment property under construction
|
- | 454 | (454 | ) | - | |||||||||||
Capitalized costs and expenses
|
- | 1 | - | 1 | ||||||||||||
Disposals
|
- | - | (4 | ) | (4 | ) | ||||||||||
Transfer to fixed assets
|
- | (1 | ) | - | (1 | ) | ||||||||||
Classification to assets held-for-sale
|
- | (3 | ) | - | (3 | ) | ||||||||||
Transfer to investment property under construction
|
(42 | ) | - | 42 | - | |||||||||||
Increase in fair value, net
|
12 | 372 | 29 | 413 | ||||||||||||
Translation differences, net resulting from translation of financial statements of foreign operations
|
9 | 359 | 37 | 405 | ||||||||||||
Balance as at December 31, 2014
|
507 | 9,800 | 868 | 11,175 |
Investment property measured at fair value at level 3* | ||||||||||||||||
Available land | Rental buildings | Buildings under construction | Total | |||||||||||||
NIS millions | ||||||||||||||||
2013 | 614 | 10,898 | 512 | 12,115 | ||||||||||||
Balance as at January 1, 2013(1) | ||||||||||||||||
Movement in the year
|
||||||||||||||||
Acquisitions and investments in existing properties
|
4 | 341 | 377 | 722 | ||||||||||||
Transfer from fixed assets
|
- | 12 | - | 12 | ||||||||||||
Transfer from investment property under construction
|
- | 113 | (113 | ) | - | |||||||||||
Transfer from land
|
- | - | 17 | 17 | ||||||||||||
Sales
|
- | (547 | ) | (3 | ) | (550 | ) | |||||||||
Reduction due to deconsolidation of company
|
- | (2,242 | ) | - | (2,242 | ) | ||||||||||
Transfer to fixed assets
|
- | - | (6 | ) | (6 | ) | ||||||||||
Classification to assets held-for-sale
|
(106 | ) | (126 | ) | - | (232 | ) | |||||||||
Transfer to investment property under construction
|
(17 | ) | - | 17 | - | |||||||||||
Changes in capitalized costs and expenses
|
- | (2 | ) | (3 | ) | (5 | ) | |||||||||
Classification from liability for construction services
|
- | - | (70 | ) | (70 | ) | ||||||||||
Increase in fair value, net
|
36 | 244 | 55 | 335 | ||||||||||||
Translation differences, net resulting from translation of financial statements of foreign operations
|
(6 | ) | (250 | ) | (13 | ) | (269 | ) | ||||||||
Balance as at December 31, 2013
|
525 | 8,532 | 770 | 9,827 |
(1)
|
Retrospective application of IFRIC 21 – Levies, see note 1.E.6.a above.
|
Note 7 – Investment Property (cont.)
|
B.
|
Update of fair value
|
|
1.
|
On December 31, 2014 the fair value of the HSBC Building in New York City was updated to an amount of USD 763 million, according to a valuation prepared by an independent appraiser in U.S.A. The previous valuation of this property was prepared for March 31, 2014 and amounted to USD 715 million. Subsequent to that, these financial statements include income totaling NIS 272 million, from an increase in fair value of investment property, a provision for payment of consultation services totalling NIS 45 million to a former interested party (included in these financial statements under the item “General and administrative expenses”) and deferred tax expenses totalling NIS 85 million.
|
|
The net profit arising for Property & Building from the update of value of the HSBC Building amounted to NIS 142 million and the Company’s share in this profit amounted to NIS 81 million.
|
|
2.
|
On June 30, 2014, Property & Building updated the fair value estimates for all of its investment property in Israel as a year had elapsed since the previous estimate. The change in the fair value was primarily due to a significant change in the cash flow which is expected to arise from its properties, due to the fact that they are leased through CPI-linked contracts (which increased at a rate of approximately 1% from the date of the last update of the fair value estimates of all of Property & Building’s investment property in Israel, which was performed in June 2013), and due to the real increase in rent charged for Property & Building’s revenue-generating properties in Israel.
|
|
3.
|
The valuation of the Tivoli project in Las Vegas was updated to September 30, 2014 to an amount of USD 278 million. As a result, the Company and Property & Building each recognized an impairment of approx. NIS 11 million. The Company’s share in this impairment in the consolidated financial statements amounted to NIS 17 million.
|
Note 7 - Investment Property (cont.)
|
C.
|
Determination of fair value
|
|
1.
|
Data concerning fair value measurement of level-3 investment property
|
Asset class
|
Valuation techniques for determining fair value
|
Significant unobservable data
|
|
||||||||||||||||||
Cash flows discount rate (% for the year)
|
Interaction between significant unobservable data and fair value management | ||||||||||||||||||||
2014
|
2013
|
||||||||||||||||||||
Range
|
Weighted average
|
Range
|
Weighted average
|
||||||||||||||||||
Rental properties
|
Fair value is estimated using revenue discount techniques*: the valuation model is based on the present value of the estimated NOI (Net Operating Income) arising from the property. The valuation of real estate is based on net annual cash flows, discounted by a discount rate that reflects the specific risks embodied therein, and, as generally accepted, in comparable assets. Actual lease agreements in respect of which payments differ from appropriate rental, if any, are subject to adjustments in order to reflect actual lease payments in the period of the agreement. Valuations take into account the type of lessees actually occupying the leased property, or responsible for settling the liabilities resulting from the lease terms, or lessees that might occupy the property following the lease of a vacant property, including a general assessment of their credit worthiness; the distribution of responsibility between the Group and the lessee in respect of the maintenance and insurance of the property; the physical condition and the remaining economic life of the property, wherever these parameters are relevant.
|
Revenue generating assets in Israel
|
Office use
|
7.5%-8.25 | % | 8.2 | % | 7.5 | %- | 7.9 |
Estimated fair value will increase if:
|
||||||||||
|
9 | % |
• The market value of the lease payments increases.
|
||||||||||||||||||
Commercial use
|
7.25%-12 | % | 8.1 | % | 7.25 | %- | 8.2 | % |
• The cash flows capitalization rate decreases.
|
||||||||||||
12 | % |
There is no internal interaction between significant unobservable data.
|
|||||||||||||||||||
Industrial use
|
8%-9.5 | % | 8.5 | % | 8.0 | %- | 8.6 | % | |||||||||||||
10.5 | % | ||||||||||||||||||||
Revenue generating assets in U.S.A
|
HSBC Building
|
Office use
|
5.25%-6.75 | % | 6.0 | % | 5.25 | %- | 6.1 | % | |||||||||||
7.0 | % | ||||||||||||||||||||
GW Project
|
Commercial and office use
|
9 | % | 9 | % | 9 | % | 9 | % | ||||||||||||
Value of rental fees (NIS per sq. meter per month)
|
|||||||||||||||||||||
Revenue generating assets in Israel
|
Office use
|
NIS 41-
|
NIS 61
|
NIS 13-
|
NIS 61
|
||||||||||||||||
NIS 104
|
NIS 112
|
||||||||||||||||||||
Commercial use
|
NIS 10-
|
NIS 88
|
NIS 9-
|
NIS 88
|
|||||||||||||||||
NIS 500
|
NIS 450
|
||||||||||||||||||||
Industrial use
|
NIS 7-
|
NIS 32
|
NIS 7-
|
NIS 30
|
|||||||||||||||||
NIS 56
|
NIS 78
|
||||||||||||||||||||
Revenue generating assets in U.S.A
|
HSBC Building
|
Office use
|
NIS 297-
|
NIS 386
|
NIS 271- NIS 489
|
NIS 320
|
|||||||||||||||
NIS 526
|
|||||||||||||||||||||
GW Project
|
Office use
|
NIS 447
|
NIS 447
|
NIS 399
|
NIS 399
|
||||||||||||||||
GW Project
|
Commercial and office use
|
NIS 510
|
NIS 510
|
NIS 512
|
NIS 512
|
||||||||||||||||
Construction costs per sq. meter
|
|||||||||||||||||||||
Investment property under construction
|
The valuation is based on the estimated fair value of investment property after the completion of the construction thereof, less the present value of the estimated construction costs expected to be incurred in order to complete the construction, while taking into account a capitalization rate adjusted for the risks and characteristics relevant to the property.
|
Assets under construction in Israel
|
NIS 4,000-
|
NIS 5,452
|
NIS 4,000-
|
NIS 5,100
|
Estimated fair value will increase if:
|
||||||||||||||
|
NIS 6,100, depending on location
|
NIS 6,000, depending on location
|
• Construction costs per sq.m. decrease.
|
||||||||||||||||||
|
|
• The cash flows capitalization rate decreases.
|
|||||||||||||||||||
Assets under construction in U.S.A – GW Project
|
NIS 5,308
|
NIS 5,308
|
NIS 3,997
|
NIS 3,997
|
There is no internal interaction between significant unobservable data.
|
||||||||||||||||
Annual discount rate of the cash flows
|
|||||||||||||||||||||
Assets under construction in Israel
|
7.75 | %- | 8.6 | % | 7 | %- | 9.2 | % | |||||||||||||
9 | % | 10 | % | ||||||||||||||||||
Assets under construction in U.S.A – GW Project |
|
9 | % | 9 | % | 9 | % | 9 | % | ||||||||||||
Available land
|
The fair value is determined while using a comparison technique. The technique is based on the sq.m. value of comparable assets resulting from transactions observable in the market, after various adjustments, such as for dimensions, location, etc.
|
Estimated fair value will increase if the sq.m. value of comparable assets increases.
|
Note 7 - Investment Property (cont.)
|
C.
|
Determination of fair value (cont.)
|
|
2.
|
Valuation processes implemented in the Group
|
·
|
Capitalization rates, which are based on professional publications in the relevant markets, if any, and on comparison with similar transactions, after the necessary adjustments.
|
·
|
Market rent, which is based on professional publications in the relevant markets and on comparison with similar transactions, after the necessary adjustments.
|
·
|
Construction costs per sq.m. that are based on agreements with performance contractors and detailed budgets for each project.
|
|
3.
|
Adjustments to book value
|
As of December 31
|
||||||||
2014
|
2013
|
|||||||
NIS millions
|
||||||||
Fair value as provided by external appraisers
|
11,278 | (1) 9,911 | ||||||
Less amounts attributed to revenues receivable for rental, based on the straight-line method
|
(103 | ) | (84 | ) | ||||
Fair value, as presented in the financial statements
|
11,175 | 9,827 |
|
(1) Retrospective application of IFRIC 21 – Levies, see note 1.E.6.a above.
|
D.
|
Amounts that were recognized in the Statement of Income
|
For the year ended December 31
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
NIS millions
|
||||||||||||
Amounts recognized as rent
|
780 | 772 | 976 | |||||||||
Direct operating expenses deriving from investment property (1)
|
181 | 176 | 199 | |||||||||
Increase in fair value of investment property
|
439 | 417 | 540 | |||||||||
Decrease in fair value of investment property
|
26 | 97 | - |
|
(1)
|
Including expenses in insignificant amounts in respect of investment property that did not produce rental revenue.
|
Note 7 - Investment Property (cont.)
|
D.
|
Amounts that were recognized in the Statement of Income (cont.)
|
For the year ended December 31, 2014 | ||||||||||||||||
Available lands | Rental buildings | Buildings under construction | Total | |||||||||||||
NIS millioins | ||||||||||||||||
Net changes in fair value attributed to investment property, not yet realized
|
12 | 372 | 29 | 413 |
For the year ended December 31, 2013
|
||||||||||||||||
Available lands
|
Rental buildings
|
Buildings under construction
|
Total
|
|||||||||||||
NIS millions
|
||||||||||||||||
Net changes in fair value attributed to investment property, not yet realized
|
15 | * | 246 | 55 | 316 | |||||||||||
Net changes in fair value attributed to investment property, realized
|
21 | 1 | - | 22 | ||||||||||||
36 | 247 | 55 | 338 |
|
* Retrospective application of IFRIC 21 – Levies, see note 1.E.6.a above.
|
E.
|
Rental agreements
|
As of December 31
|
||||||||
2014
|
2013
|
|||||||
NIS millions
|
||||||||
Up to one year
|
754 | 702 | ||||||
From one year up to five years
|
2,179 | 1,870 | ||||||
Exceeding five years
|
1,523 | 1,346 | ||||||
4,456 | 3,918 |
Note 8 - Trade Receivables
|
|
As of December 31
|
|||||||
2014
|
2013
|
|||||||
NIS millions
|
||||||||
Long term trade receivables
|
1,142 | 1,462 | ||||||
Less -
|
||||||||
Current maturities
|
(606 | ) | (878 | ) | ||||
Deferred interest income
|
(52 | ) | (65 | ) | ||||
Provision for doubtful debts
|
(8 | ) | (7 | ) | ||||
476 | 512 |
|
The balance of long term trade receivables in respect of sales of equipment in payments made by Cellcom (mainly in 36 payments) and their present values as of December 31, 2014, and December 31, 2013, were calculated based on discount rates of 3.9% and 5.2%, respectively.
|
|
As of December 31
|
|||||||
2014
|
2013
|
|||||||
NIS millions
|
||||||||
Outstanding debts
|
967 | 1,115 | ||||||
Checks receivable
|
186 | 66 | ||||||
Credit card companies
|
1,212 | 1,303 | ||||||
Current maturities of long term trade receivables
|
606 | 878 | ||||||
2,971 | 3,362 | |||||||
Less - provision for doubtful debts
|
(259 | ) | (303 | ) | ||||
2,712 | 3,059 |
As of December 31 | ||||||||
2014 | 2013 | |||||||
NIS millions | ||||||||
Inventory of purchased goods (mainly in respect of retail activities of Shufersal) (1)
|
748 | 710 | ||||||
Phones and other communication equipment (in respect of cellular and internet activities of Cellcom) (2)
|
79 | 75 | ||||||
Inventory of manufactured products and inventory of spare parts
|
24 | 24 | ||||||
851 | 809 |
(1)
|
The inventory of purchased goods is presented net of provisions for impairment of NIS 22 million (2013 - NIS 27 million).
|
(2)
|
The inventory of phones and other communication equipment is presented net of a provision for impairment and an inventory write-off of NIS 6 million (2013 - NIS 7 million).
|
Goodwill
|
Brands and trade names
|
Technology, development in process and concessions
|
Licenses
|
Customer relations
|
Information systems and software
|
Expenses due to the acquisition of life and general insurance portfolios
|
Other
|
Total
|
||||||||||||||||||||||||||||
NIS millions
|
||||||||||||||||||||||||||||||||||||
Cost
|
||||||||||||||||||||||||||||||||||||
Balance as at January 1, 2013
|
5,103 | (1) | 1,063 | 9 | (2) | 539 | 1,461 | 2,105 | 635 | 688 | 11,603 | |||||||||||||||||||||||||
Transfer from assets held for sale
|
1 | - | - | - | - | - | - | 4 | 5 | |||||||||||||||||||||||||||
Acquisitions as part of a business combination
|
242 | 106 | 373 | - | 20 | 2 | - | 10 | 753 | |||||||||||||||||||||||||||
Acquisitions and additions
|
- | 3 | - | - | - | 235 | - | 2 | 240 | |||||||||||||||||||||||||||
Assets classified as held for sale
|
(279 | )(1) | (100 | ) | (347 | ) | - | (18 | ) | (2 | ) | - | (9 | ) | (755 | ) | ||||||||||||||||||||
Derecognitions
|
(6 | ) | (10 | ) | - | (7 | ) | (357 | ) | (117 | ) | - | (14 | ) | (511 | ) | ||||||||||||||||||||
Consolidation discontinuance
|
(833 | ) | (30 | ) | (4 | ) | - | - | (1,469 | ) | (635 | ) | (293 | ) | (3,264 | ) | ||||||||||||||||||||
Adjustments to goodwill in respect of a put option to holders of non-controlling interests in a subsidiary
|
7 | - | - | - | - | - | - | - | 7 | |||||||||||||||||||||||||||
Withdrawal of profits by partners in a partnership
|
12 | - | - | - | - | - | - | - | 12 | |||||||||||||||||||||||||||
Effect of changes in exchange rates
|
(19 | ) | (9 | ) | (26 | ) | - | (3 | ) | (1 | ) | - | (4 | ) | (62 | ) | ||||||||||||||||||||
Balance as at December 31, 2013
|
4,228 | 1,023 | 5 | 532 | 1,103 | 753 | - | 384 | 8,028 | |||||||||||||||||||||||||||
Acquisitions as part of a business combination
|
4 | - | - | - | - | - | - | 2 | 6 | |||||||||||||||||||||||||||
Acquisitions and additions
|
- | - | - | - | - | 125 | - | - | 125 | |||||||||||||||||||||||||||
Derecognitions (2)
|
- | (31 | ) | - | - | (19 | ) | (96 | ) | - | (35 | ) | (181 | ) | ||||||||||||||||||||||
Consolidation discontinuance
|
- | - | - | - | - | - | - | (17 | ) | (17 | ) | |||||||||||||||||||||||||
Adjustments to goodwill in respect of a put option to holders of non-controlling interests in a subsidiary
|
2 | - | - | - | - | - | - | - | 2 | |||||||||||||||||||||||||||
Withdrawal of profits by partners in a partnership
|
12 | - | - | - | - | - | - | - | 12 | |||||||||||||||||||||||||||
Effect of changes in exchange rates
|
6 | 2 | 1 | - | 2 | 3 | - | 2 | 16 | |||||||||||||||||||||||||||
Balance as at December 31, 2014
|
4,252 | 994 | 6 | 532 | 1,086 | 785 | - | 336 | 7,991 |
(1)
|
Reclassified, see note 1.F above.
|
(2)
|
Reclassified against amortizations and losses from impairment of intangible assets.
|
Goodwill
|
Brands and trade names
|
Technology, development in process and concessions
|
Licenses
|
Customer relations
|
Information systems and software
|
Expenses due to the acquisition of life and general insurance portfolios
|
Other
|
Total
|
||||||||||||||||||||||||||||
NIS millions
|
||||||||||||||||||||||||||||||||||||
Amortizations and impairment losses
|
||||||||||||||||||||||||||||||||||||
Balance as at January 1, 2013
|
751 | (1) | 164 | (2) 1 | 270 | 1,021 | 1,231 | 609 | 393 | 4,440 | ||||||||||||||||||||||||||
Transfer from assets held for sale
|
- | - | - | - | - | - | - | 1 | 1 | |||||||||||||||||||||||||||
Amortization for the year
|
- | 47 | 29 | 29 | 130 | 208 | 7 | 33 | 483 | |||||||||||||||||||||||||||
Derecognitions
|
- | (9 | ) | - | (7 | ) | (357 | ) | (117 | ) | - | (13 | ) | (503 | ) | |||||||||||||||||||||
Acquisitions as part of a business combination
|
- | 38 | 191 | - | 10 | 2 | - | 8 | 249 | |||||||||||||||||||||||||||
Impairment loss
|
91 | 2 | - | - | - | 2 | - | - | 95 | |||||||||||||||||||||||||||
Assets classified as held for sale
|
- | (44 | ) | (207 | ) | - | (10 | ) | (2 | ) | - | (8 | ) | (271 | ) | |||||||||||||||||||||
Consolidation discontinuance
|
(116 | ) | (30 | ) | - | - | - | (839 | ) | (616 | ) | (236 | ) | (1,837 | ) | |||||||||||||||||||||
Effect of changes in exchange rates
|
(1 | ) | (3 | ) | (14 | ) | - | (1 | ) | (1 | ) | - | (3 | ) | (23 | ) | ||||||||||||||||||||
Balance as at December 31, 2013
|
725 | 165 | - | 292 | 793 | 484 | - | 175 | 2,634 | |||||||||||||||||||||||||||
Amortization for the year
|
- | 37 | 1 | 29 | 104 | 108 | - | 20 | 299 | |||||||||||||||||||||||||||
Derecognitions
|
- | (31 | ) | - | - | (19 | ) | (96 | ) | - | (35 | ) | (181 | ) | ||||||||||||||||||||||
Impairment loss (3)
|
396 | (4) | 37 | 3 | - | 9 | - | - | 25 | 470 | ||||||||||||||||||||||||||
Consolidation discontinuance
|
- | - | - | - | - | - | - | (17 | ) | (17 | ) | |||||||||||||||||||||||||
Effect of changes in exchange rates
|
1 | - | - | - | - | 3 | - | - | 4 | |||||||||||||||||||||||||||
Balance as at December 31, 2014
|
1,122 | 208 | 4 | 321 | 887 | 499 | - | 168 | 3,209 | |||||||||||||||||||||||||||
Carrying amount
|
||||||||||||||||||||||||||||||||||||
As at January 1, 2013
|
4,352 | 899 | 8 | 269 | 440 | 874 | 26 | 295 | 7,163 | |||||||||||||||||||||||||||
As at December 31, 2013
|
3,503 | 858 | 5 | 240 | 310 | 269 | - | 209 | 5,394 | |||||||||||||||||||||||||||
As at December 31, 2014
|
3,130 | 786 | 2 | 211 | 199 | 286 | - | 168 | 4,782 |
(1)
|
Reclassified, see note 1.F. above.
|
(2)
|
Reclassified against the cost of intangible assets.
|
(3)
|
For details regarding non-recurring expenses recorded in respect of an updated business plan in Shufersal, see note 3.H.3.b above.
|
(4)
|
With regard to the impairment of goodwill with respect to the Group’s investments in Cellcom and Shufersal, see section D. below.
|
B.
|
The fair value of intangible assets acquired in various business combinations was determined on the date of each business combination, as follows:
|
|
Brands and trade names
|
|
Rental agreements
|
|
Licenses
|
C.
|
Additional details on principal cash-generating units that include goodwill or an intangible asset with an indefinite useful life
|
|
1.
|
As at December 31, 2014, goodwill and a brand with an indefinite useful life attributable to Cellcom amount to NIS 2.135 billion and NIS 0.231 billion, respectively.
|
|
2.
|
As at December 31, 2014, goodwill attributable to Shufersal’s retail activity amounts to NIS 755 million. The recoverable amount of Shufersal’s activity as at December 31, 2014, was assessed by an external appraiser on the basis of its value in use, as detailed in section D.2 below.
|
|
3.
|
The Group has a number of consolidated companies, the operations of which have been attributed goodwill in an amount that is immaterial compared to the balance of goodwill in the Company’s consolidated financial statements. The value of Property & Building’s operations, which is based on Property & Building’s stock exchange value as at December 31, 2014 (and in the required adjustments in respect of the fair value of Property & Building’s financial liabilities) which is higher than the value of the specified operations in these financial statements. The recoverable amount of the operations of other companies was determined on the basis of examinations for impairment performed, including economic studies, performed by external appraisers using the value in use method. The recoverable amount of the specified operations is higher than their value in the financial statements. In those cases where the recoverable amount was found to be lower than the carrying amount, impairment reductions of immaterial amounts were recorded.
|
D.
|
Examination for impairment in investee companies in 2014
|
|
1.
|
In view of a decline in Cellcom’s market value and the intensifying competition in the cellular market in Israel, which led to a decline in Cellcom’s profitability, Discount Investments performed an examination for impairment of the goodwill attributed to Cellcom as at December 31, 2014. Further to that stated in note 3.G.3 above with regard to the structural changes being examined, the recoverable amount of Cellcom’s operations as at December 31, 2014 was calculated using the value in use method. In accordance with Regulation 8.b of the Reporting Regulations, an economic report concerning this subject is attached to these financial statements by way of reference, which was attached to the financial statements of Discount Investments as at June 30, 2014, which were submitted by it to the Securities Authority and released on March 25, 2015 (reference no. 2015-01-061831).
|
|
2.
|
Discount Investments carried out an examination for impairment of the goodwill attributable to Shufersal as at December 31, 2014. Further to that stated in Note 3.G.3 above with regard to the examined structural changes, the recoverable amount of Shufersal’s operations as at December 31, 2014 was calculated using the value in use method. In accordance with Regulation 8.b of the Reporting Regulations, an economic report concerning this subject at the specified date is attached to these financial statements by way of reference, which was attached to the financial statements of Discount Investments as at December 31, 2014, which were submitted by it to the Securities Authority and released on March 25, 2015 (reference no. 2015-01-061831).
|
|
The value of the assets attributable to Shufersal’s activity less the liabilities attributable to its activity in the financial statements of the Company as at December 31, 2014 (including deferred tax balances attributable to excess costs created upon the acquisition of Shufersal, against which goodwill was recorded by Discount Investments) (“The value of Shufersal’s operations in the financial statements”), is higher than the middle of the range specified in the aforesaid economic paper for the recoverable amount of Shufersal’s activity at that date. Therefore, the Company recorded its share in an impairment in an amount if NIS 130 million with respect to the impairment of the aforesaid goodwill, based on the middle of the range of the valuation of the recoverable amount as at December 31, 2014, as determined in the specified economic paper.
|
E.
|
During the ordinary course of business, Cellcom acquires intangible assets using credit.
|
As of December 31
|
||||||||
2014
|
2013
|
|||||||
NIS millions
|
||||||||
Revenues receivable
|
41 | 112 | ||||||
Prepaid expenses
|
116 | 110 | ||||||
Advances to suppliers
|
94 | 76 | ||||||
Institutions
|
20 | 43 | ||||||
Deposits in trust
|
7 | 12 | ||||||
Other
|
106 | 102 | ||||||
384 | 455 |
Note 12 - Inventory of buildings for sale
|
A.
|
Composition
|
As of December 31
|
||||||||
2014
|
2013
|
|||||||
NIS millions
|
||||||||
Costs incurred:
|
||||||||
Land
|
253 | 332 | ||||||
Construction and other
|
336 | 374 | ||||||
589 | 706 | |||||||
Inventory of finished buildings
|
102 | 143 | ||||||
691 | 849 |
For the year ended
December 31,
|
||||||||
2014
|
2013
|
|||||||
NIS millions
|
||||||||
Balance at the start of the year
|
849 | 1,144 | ||||||
Additions
|
154 | 141 | ||||||
Disposals
|
(329 | ) | (452 | ) | ||||
Translation differences from the translation of financial statements of foreign operations
|
10 | (17 | ) | |||||
Transfer from inventory of land
|
26 | 40 | ||||||
Less - Provision for loss
|
(19 | ) | (7 | ) | ||||
Balance at the end of the year
|
691 | 849 |
|
Assets
|
As of December 31
|
||||||||
2014
|
2013
|
|||||||
NIS millions
|
||||||||
Investment in Clal Holdings Insurance Enterprises Ltd. – see note 3.H.5.a above.
|
- | 2,055 | ||||||
Investment in Credit Suisse - See note 3.H.4.c. above.
|
- | 1,138 | ||||||
Other assets of realization groups (1)
|
5 | 1,586 | (2) | |||||
5 | 4,779 |
Liabilities of realization groups (1)
|
- | 165 |
(1)
|
For further details on the composition of assets and liabilities held-for-sale as at December 31, 2013, see note 3.I.2 above.
|
(2)
|
Reclassified, see note 1.F above.
|
Note 14 - Cash and Cash Equivalents
|
|
As of December 31
|
|||||||
2014
|
2013
|
|||||||
NIS millions
|
||||||||
Composition:
|
||||||||
Balances at banks
|
454 | 872 | ||||||
Call deposits
|
3,124 | 5,441 | ||||||
3,578 | 6,313 |
Note 15 – Equity and Reserves
|
A.
|
The Company’s registered and issued share capital
|
|
The Company’s registered share capital as at December 31, 2013, consisted of 100 million ordinary “A” class shares with a nominal value of NIS 1 each, and the issued share capital amounted to NIS 57,587,883, of which a total of 11,336,914 ordinary A shares were dormant shares (as defined in section 308 of the Companies Law) (“Dormant Shares”), which did not grant voting rights/ any rights. The remaining shares (46,250,969 ordinary A shares) were held by IDB Holdings.
|
|
In January 2014, as a result of the approval of the debt arrangement at IDB Holdings as detailed in Note 16.G.2.a below, the dormant shares were transferred to the trustees for the arrangement, for the purpose of fulfilling such arrangement.
|
|
On May 1, 2014, the Company decided, in accordance with the stipulations of the debt arrangement at IDB Holdings, to cancel the dormant shares and to cancel the Company’s entire registered unallocated capital of Type A shares, to unify the registered, issued and paid-up capital of the Company, in a manner whereby all of the Company’s 46,250,969 issued shares (the issued and paid-up capital less the dormant shares) will be unified into a single ordinary share, and to cancel the nominal value of the aforementioned ordinary share (“The consolidation of capital”), in a manner whereby, after the capital consolidation, the Company’s issued capital included one ordinary share with no nominal value. The aforesaid ordinary share without nominal value was split to 200 million ordinary shares with no nominal value (“ordinary shares”), and the Company’s registered capital amounted to 500 million ordinary shares.
|
B.
|
Investments in the Company’s capital during 2014 and until the date of publication of this report
|
|
The following are the amounts of the investment made in the Company’s capital during 2014 and until the date of publication of this report:
|
Method of investment
|
Amount in NIS millions
|
Date
|
Details in section
|
|||
Conversion of convertible loans into capital
|
170 |
May 2014
|
(1)
|
|||
Injection of capital by the controlling shareholders
|
480 |
May 2014
|
(1)
|
|||
Rights issue
|
321 |
July 2014
|
(3)
|
|||
Exercise of options by the controlling shareholders
|
176 |
November 2014
|
(4)
|
|||
Total in 2014
|
1,147 | |||||
Rights issue subsequent to the date of the Statement of Financial Position
|
417 |
January-February 2015
|
(5)
|
|||
Total investments in capital
|
1,564 |
Note 15 – Equity and Reserves (cont.)
|
B.
|
Investments in the Company’s capital during 2014 and until the date of publication of this report (cont.)
|
Note 15 – Equity and Reserves (cont.)
|
B.
|
Investments in the Company’s capital during 2014 and until the date of publication of this report (cont.)
|
1
|
The Company was given a notification regarding the exercise of the entire share options (Series 1) held by CAA prior to exercising them; in fact, one option expired without being exercised.
|
Note 15 – Equity and Reserves (cont.)
|
B.
|
Investments in the Company’s capital during 2014 and until the date of publication of this report (cont.)
|
|
6.
|
The claims of the controlling shareholders of the Company with regard to the rights issue; the Company’s position with regard to the participation of the controlling shareholders in the rights issue; and the position of the trustees of the arrangement with regard to Inversiones Financieras Del Sur S.A. – “IFISA”
|
Note 15 – Equity and Reserves (cont.)
|
B.
|
Investments in the Company’s capital during 2014 and until the date of publication of this report
|
|
6.
|
The claims of the controlling shareholders of the Company with regard to the rights issue; the Company’s position with regard to the participation of the controlling shareholders in the rights issue; and the position of the trustees of the arrangement with regard to Inversiones Financieras Del Sur S.A. – “IFISA” (cont.)
|
Note 15 – Equity and Reserves (cont.)
|
B.
|
Investments in the Company’s capital during 2014 and until the date of publication of this report
|
|
6.
|
The claims of the controlling shareholders of the Company with regard to the rights issue; the Company’s position with regard to the participation of the controlling shareholders in the rights issue; and the position of the trustees of the arrangement with regard to Inversiones Financieras Del Sur S.A. – “IFISA” (cont.)
|
C.
|
Equity management
|
D.
|
As part of the creditors’ arrangement at IDB Holdings, the Dolphinand Extra groups gave an undertaking that they will exercise their powers and rights so that the Company will not distribute a dividend before December 31, 2015.
|
Note 15 – Equity and Reserves (cont.)
|
E.
|
Changes in comprehensive income (loss)
|
For the year ended December 31 | ||||||||||||||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||||||||||||||
Total equity attributed to the owners of the Company
|
Non-controlling rights
|
Total equity
|
Total equity attributed to the owners
of the Company
|
Non-controlling rights
|
Total
equity
|
Total equity attributed to the owners
of the Company
|
Non-controlling rights
|
Total
equity
|
||||||||||||||||||||||||||||
NIS millions
|
||||||||||||||||||||||||||||||||||||
Income (loss) for the year
|
(999 | ) | 213 | (786 | ) | (153 | ) | 666 | 513 | (733 | ) | 240 | (493 | ) | ||||||||||||||||||||||
Other components of comprehensive income (loss), net of tax
|
||||||||||||||||||||||||||||||||||||
Foreign currency translation differences from foreign operations
|
237 | 111 | 348 | (165 | ) | (98 | ) | (263 | ) | (37 | ) | 14 | (23 | ) | ||||||||||||||||||||||
Net change in fair value of cash flow hedge, that was recognized in profit or loss
|
4 | 6 | 10 | 4 | 7 | 11 | (5 | ) | (10 | ) | (15 | ) | ||||||||||||||||||||||||
Revaluation of fixed assets that were transferred to investment property
|
1 | 4 | 5 | 3 | 4 | 7 | 33 | 47 | 80 | |||||||||||||||||||||||||||
Group’s share in other comprehensive income (loss) of investee companies accounted for by the equity method
|
359 | 216 | 575 | (176 | ) | (139 | ) | (315 | ) | (57 | ) | (54 | ) | (111 | ) | |||||||||||||||||||||
Other components of other comprehensive income (loss)
|
13 | (4 | ) | 9 | - | (11 | ) | (11 | ) | (5 | ) | (23 | ) | (28 | ) | |||||||||||||||||||||
Other comprehensive income (loss) for the year, net of tax
|
614 | 333 | 947 | (334 | ) | (237 | ) | (571 | ) | (71 | ) | (26 | ) | (97 | ) | |||||||||||||||||||||
Total comprehensive income (loss) for the year
|
(385 | ) | 546 | 161 | (487 | ) | 429 | (58 | ) | (804 | ) | 214 | (590 | ) |
F.
|
Earnings (losses) per share
|
|
The profit (loss) per share data were retrospectively adjusted for all of the presented periods according to the changes in the Company’s issued share capital, including for the benefit component in the rights issue after the date of the Statement of Financial Position, as stated in section B.5 above.
|
|
The profit (loss) per share data are based on the following data:
|
For the year ended December 31 | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
NIS millions | ||||||||||||
Loss for the year from continuing operations
|
(1,032 | ) | (553 | ) | (1,266 | ) | ||||||
Difference from the Company’s share in losses of investee companies
|
(1 | ) | - | (5 | ) | |||||||
Loss attributed to the holders of ordinary shares from continuing operations
|
(1,033 | ) | (553 | ) | (1,271 | ) |
Net income for the year from discontinued operations
|
33 | 400 | 533 | |||||||||
Difference from the Company’s share in losses of investee companies
|
- | (1 | ) | - | ||||||||
Profit attributed to the holders of ordinary shares from discontinued operations
|
33 | 399 | 533 |
|
2.
|
Income (loss) attributed to the holders of Ordinary Shares (diluted)
|
For the year ended December 31 | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
NIS millions | ||||||||||||
Loss for the year from continuing operations
|
(1,032 | ) | (553 | ) | (1,266 | ) | ||||||
Difference from the Company’s share in losses of investee companies
|
(1 | ) | - | (5 | ) | |||||||
Loss attributed to the holders of ordinary shares from continuing operations
|
(1,033 | ) | (553 | ) | (1,271 | ) |
Net income for the year from discontinued operations
|
33 | 400 | 533 | |||||||||
Difference from the Company’s share in losses of investee companies
|
- | (1 | ) | (1 | ) | |||||||
Profit attributed to the holders of ordinary shares from discontinued operations
|
33 | 399 | 532 |
|
3.
|
Weighted average number of ordinary shares – basic and diluted
|
For the year ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Shares in Thousands | ||||||||||||
Weighted average number of ordinary shares used for the calculation of basic and diluted earnings (losses) per share
|
252,077 | 219,475 | 219,475 |
Note 16 – Bank Loans and other Financial Liabilities at Amortized Cost
|
A.
|
Non-Current Liabilities
|
As at December 31
|
||||||||
2014
|
2013
|
|||||||
NIS millions
|
||||||||
Bonds
|
22,024 | 24,119 | ||||||
Less current maturities
|
(3,303 | ) | (3,447 | ) | ||||
18,721 | 20,672 |
As at December 31, 2014
|
||||||||||||||||||
Linkage basis
|
Nominal interest
|
Principal payment date
|
Nominal value
|
Book value
|
||||||||||||||
Series
|
%
|
NIS millions
|
||||||||||||||||
The Company (see also sections D and G below)
|
Series G
|
CPI
|
4.50 | 2012-2018 | 1,070 | 1,313 | ||||||||||||
Series I
|
CPI
|
4.95 | 2020-2025 | 874 | 1,067 | |||||||||||||
Series J
|
Unlinked
|
6.60 | 2012-2018 | 412 | 409 | |||||||||||||
2,356 | 2,789 | |||||||||||||||||
Current maturities
|
433 | |||||||||||||||||
2,356 | ||||||||||||||||||
Discount Investment (see also section F.1. below)
|
Series D(a)
|
CPI
|
5.00 | 2012-2016 | 255 | 317 | ||||||||||||
|
Series F(a)
|
CPI
|
4.95 | 2017-2025 | 2,772 | 3,222 | ||||||||||||
Series G
|
Unlinked
|
6.35 | 2012-2016 | 16 | 16 | |||||||||||||
Series I
|
Unlinked
|
6.70 | 2010-2018 | 813 | 814 | |||||||||||||
Seies H and other bonds
|
CPI
|
4.45-5.50 | 1997-2019 | 170 | 205 | |||||||||||||
4,026 | 4,574 | |||||||||||||||||
Current maturities
|
353 | |||||||||||||||||
4,221 | ||||||||||||||||||
Property & Building (see also section F.3. below)
|
Property Series F(b)
|
CPI
|
4.95 | 2015-2023 | 743 | 781 | ||||||||||||
Property Series C
|
CPI
|
5.00 | 2009-2017 | 825 | 1,014 | |||||||||||||
Property Series D
|
CPI
|
4.95 | 2020-2025 | 1,114 | 1,355 | |||||||||||||
Property Series G (b)
|
Unlinked
|
7.05 | 2012-2025 | 450 | 490 | |||||||||||||
Gav-Yam Series E
|
CPI
|
4.55 | 2014-2018 | 566 | 687 | |||||||||||||
Gav-Yam Series F (c)
|
CPI
|
4.75 | 2021-2026 | 1,226 | 1,518 | |||||||||||||
Gav-Yam Series G
|
Unlinked
|
6.41 | 2013-2017 | 322 | 322 | |||||||||||||
Ispro Series B
|
CPI
|
5.40 | 2007-2021 | 357 | 446 | |||||||||||||
5,603 | 6,613 | |||||||||||||||||
Current maturities
|
810 | |||||||||||||||||
5,803 |
Note 16 – Bank Loans and other Financial Liabilities at Amortized Cost (cont.)
|
A.
|
Non-Current Liabilities (cont.)
|
|
1.
|
Bonds (cont.)
|
As at December 31, 2014
|
||||||||||||||||||
Linkage
|
Stated interest
|
Principal
payment date
|
Nominal value
|
Book value
|
||||||||||||||
Series
|
basis
|
%
|
NIS millions
|
|||||||||||||||
Cellcom (see also section F.2 below)
|
Series B
|
CPI
|
5.30 | 2013-2017 | 555 | 668 | ||||||||||||
Series D
|
CPI
|
5.19 | 2013-2017 | 1,454 | 1,722 | |||||||||||||
Series E
|
Unlinked
|
6.25 | 2013-2017 | 899 | 897 | |||||||||||||
Series F
|
CPI
|
4.60 | 2017-2020 | 715 | 741 | |||||||||||||
Series G
|
Unlinked
|
6.99 | 2017-2019 | 285 | 286 | |||||||||||||
Series H(d)
|
CPI
|
1.98 | 2018-2024 | 106 | 105 | |||||||||||||
Series I(d)
|
Unlinked
|
4.14 | 2018-2025 | 223 | 221 | |||||||||||||
4,237 | 4,640 | |||||||||||||||||
Current maturities
|
1,092 | |||||||||||||||||
3,548 | ||||||||||||||||||
Shufersal (see also section F.4. below)
|
Series B
|
CPI
|
5.20 | 2015-2019 | 1,706 | 2,210 | ||||||||||||
Series C
|
Unlinked
|
5.45 | 2010-2017 | 341 | 343 | |||||||||||||
Series D
|
CPI
|
2.99 | 2014-2029 | 443 | 439 | |||||||||||||
Series E
|
Unlinked
|
5.09 | 2014-2029 | 420 | 416 | |||||||||||||
2,910 | 3,408 | |||||||||||||||||
Current maturities
|
615 | |||||||||||||||||
2,793 |
|
(a)
|
For details regarding an exchange acquisition offer of Series D bonds of Discount Investments, for Series F bonds was completed in January 2014, see section F.1 below.
|
|
(b)
|
In September 2014, Property & Building bonds issued to the public a total nominal value of NIS 86 million of its existing Series F, at a price that reflects an effective interest rate of 2.13% per annum, linked to the Consumer Price Index, and for a total consideration of NIS 102 million and also bonds at total nominal value of NIS 276 million of its existing Series G, at a price reflecting an effective interest rate of 4.01% per annum, which is unlinked to the CPI or to any currency, and for a total consideration of NIS 326 million.
|
|
(c)
|
In April 2014, Gav-Yam Land Corporation Ltd. (“Gav-Yam”), a subsidiary of Property & Building, issued bonds to the public at a total nominal value of NIS 221 million of its existing Series F, at a price reflecting an effective interest rate of 3.13% per annum which is linked to the CPI, and in total consideration for NIS 306 million.
|
|
(d)
|
In July 2014, Cellcom issued bonds to the public at a total nominal value of NIS 106 million of its Series H (new series), which carries interest at a rate of 1.98% per annum, and is linked to the Consumer Price Index, for total consideration of NIS 105 million and also bonds at a total nominal value of NIS 223 million of its Series I (new series), which carries interest at a rate of 4.14% per annum, unlinked to the CPI or any currency, and for a total consideration of NIS 221 million.
|
Note 16 – Bank Loans and other Financial Liabilities at Amortized Cost (cont.)
|
A.
|
Non-Current Liabilities (cont.)
|
|
1.
|
Bonds (cont.)
|
As at December 31, 2013
|
||||||||||||||||||
Linkage basis
|
Nominal interest
|
Principal payment date
|
Nominal value
|
Book value
|
||||||||||||||
Series
|
%
|
NIS millions
|
||||||||||||||||
The Company
|
Series C
|
CPI
|
5.90 | 2013 | 5 | 7 | ||||||||||||
Series G
|
CPI
|
4.50 | 2012-2018 | 1,431 | 1,757 | |||||||||||||
Series H
|
CPI
|
4.10 | 2013 | 14 | 17 | |||||||||||||
Series I
|
CPI
|
4.95 | 2020-2025 | 874 | 1,069 | |||||||||||||
Series J
|
Unlinked
|
6.60 | 2012-2018 | 551 | 547 | |||||||||||||
2,875 | 3,397 | |||||||||||||||||
Current maturities
|
609 | |||||||||||||||||
2,788 | ||||||||||||||||||
Discount Investments
|
Series D
|
CPI
|
5.00 | 2012-2016 | 1,187 | 1,473 | ||||||||||||
|
Series F
|
CPI
|
4.95 | 2017-2025 | 1,884 | 2,179 | ||||||||||||
Series G
|
Unlinked
|
6.35 | 2012-2016 | 24 | 24 | |||||||||||||
Series I
|
Unlinked
|
6.70 | 2010-2018 | 961 | 962 | |||||||||||||
Other bonds
|
CPI
|
4.45-5.50 | 1997-2019 | 222 | 271 | |||||||||||||
4,278 | 4,909 | |||||||||||||||||
Current maturities
|
698 | |||||||||||||||||
4,211 | ||||||||||||||||||
Property & Building
|
Property Series F
|
CPI
|
4.95 | 2009-2023 | 657 | 686 | ||||||||||||
Property Series C
|
CPI
|
5.00 | 2009-2017 | 1,110 | 1,358 | |||||||||||||
Property Series D
|
CPI
|
4.95 | 2020-2025 | 1,119 | 1,358 | |||||||||||||
Property Series E and G
|
Unlinked
|
5.70-7.05 | 2012-2025 | 341 | 343 | |||||||||||||
Gav-Yam Series E
|
CPI
|
4.55 | 2014-2018 | 707 | 859 | |||||||||||||
Gav-Yam Series F
|
CPI
|
4.75 | 2021-2026 | 1,005 | 1,218 | |||||||||||||
Gav-Yam Series G
|
Unlinked
|
6.41 | 2013-2017 | 429 | 429 | |||||||||||||
Ispro Series B
|
CPI
|
5.40 | 2007-2012 | 408 | 513 | |||||||||||||
5,776 | 6,764 | |||||||||||||||||
Current maturities
|
848 | |||||||||||||||||
5,916 | ||||||||||||||||||
Cellcom
|
Series B
|
CPI
|
5.30 | 2013-2017 | 740 | 893 | ||||||||||||
Series D
|
CPI
|
5.19 | 2013-2017 | 1,939 | 2,305 | |||||||||||||
Series E
|
Unlinked
|
6.25 | 2013-2017 | 1,199 | 1,197 | |||||||||||||
Series F
|
CPI
|
4.60 | 2017-2020 | 715 | 744 | |||||||||||||
Series G
|
Unlinked
|
6.99 | 2017-2019 | 285 | 286 | |||||||||||||
4,878 | 5,425 | |||||||||||||||||
Current maturities
|
1,093 | |||||||||||||||||
4,332 | ||||||||||||||||||
Shufersal
|
Series B
|
CPI
|
5.20 | 2015-2019 | 1,706 | 2,252 | ||||||||||||
Series C
|
Unlinked
|
5.45 | 2010-2017 | 455 | 460 | |||||||||||||
Series D
|
CPI
|
2.99 | 2014-2029 | 472 | 468 | |||||||||||||
Series E
|
Unlinked
|
5.09 | 2014-2029 | 448 | 444 | |||||||||||||
3,081 | 3,624 | |||||||||||||||||
Current maturities
|
199 | |||||||||||||||||
3,425 |
Note 16 – Bank Loans and other Financial Liabilities at Amortized Cost (cont.)
|
A.
|
Non-Current Liabilities (cont.)
|
|
2.
|
Bank loans and other financial liabilities
|
December 31
|
||||||||
2014
|
2013
|
|||||||
NIS millions
|
||||||||
Loans from banks (see details in subsection (a) below)
|
4,437 | 5,352 | ||||||
Loans from others
|
582 | 450 | ||||||
5,019 | 5,802 | |||||||
Less current maturities
|
(1,491 | ) | (1,735 | ) | ||||
3,528 | 4,067 | |||||||
Liabilities in respect of construction (1)
|
103 | 132 | ||||||
Other liabilities (2)
|
125 | 125 | ||||||
228 | 257 | |||||||
Less current maturities
|
(92 | ) | (128 | ) | ||||
136 | 129 | |||||||
3,664 | 4,196 |
|
(1)
|
The liabilities are or will be paid in construction services or in cash, at a certain percentage of the sales receipts of the project.
|
|
(2)
|
Including a liability in connection with a partnership agreement signed in August 2006 among Shufersal, Leumi Card Ltd. (“Leumi Card”) and Paz Oil Company Ltd. (“Paz”), for the founding of a limited partnership (“the partnership”) by the abovementioned parties, to concentrate the ongoing administrative activity of credit cards of the Shufersal chain. The partners’ share in the partnership is as follows: Shufersal – 64%, Leumi Card Ltd. – 16% and Paz – 20%.
|
Note 16 – Bank Loans and other Financial Liabilities at Amortized Cost (cont.)
|
A.
|
Non-Current Liabilities (cont.)
|
Book value as at December 31
|
||||||||||
Linkage
|
Interest
|
2014
|
2013
|
|||||||
basis
|
%
|
NIS millions
|
||||||||
The Company (see also section C.(1) below)
|
Unlinked
|
6.49-7.55
|
190 | 549 | ||||||
Unlinked
|
Prime + 1.0-1.95
|
633 | 696 | |||||||
USD
|
LIBOR +3.38%
|
- | 195 | |||||||
823 | 1,440 | |||||||||
Discount Investments (see also section F.1.b below)
|
Unlinked
|
5.39-5.90
|
214 | 281 | ||||||
Unlinked
|
Prime + 0.52-0.6
|
307 | 379 | |||||||
521 | 660 | |||||||||
Cellcom
|
Unlinked
|
6.0
|
- | 12 | ||||||
Shufersal
|
Unlinked
|
3.70-4.90
|
- | 3 | ||||||
CPI
|
3.25-4.95
(2013: 4.4-7.40)
|
6 | 6 | |||||||
6 | 9 | |||||||||
Property & Building (see also section F.3.a below)
|
Unlinked
|
6.4
|
35 | 192 | ||||||
CPI
|
4.3
|
1,041 | 1,102 | |||||||
USD
|
5.0
|
1,524 | 1,356 | |||||||
2,600 | 2,650 | |||||||||
Elron
|
USD
|
WSJ+0.75%
|
- | 14 | ||||||
Bartan
|
Unlinked
|
4.8
|
11 | 15 | ||||||
IDB Tourism
|
Unlinked
|
4.7
|
9 | 2 | ||||||
USD
|
5.1-5.65
|
239 | 346 | |||||||
248 | 348 | |||||||||
IDB Group (see also section F.3.c below)
|
USD
|
LIBOR + 5
|
228 | 204 | ||||||
Total loans
|
4,437 | 5,352 |
|
3.
|
Net liability for non-recourse loan (1)
|
As of December 31
|
||||||||
2014
|
2013
|
|||||||
NIS millions
|
||||||||
Host contract of a hybrid financial instrument in respect of non-recourse loan
|
3,162 | 3,664 | ||||||
Less the embedded derivative
|
(72 | ) | (607 | ) | ||||
Hybrid financial instrument in respect of non-recourse loans (1)
|
3,090 | 3,057 |
|
For details of the linkage terms, see note 21.D.
|
(1)
|
See section F.1.d below.
|
Note 16 – Bank Loans and other Financial Liabilities at Amortized Cost (cont.)
|
B.
|
Current Liabilities
|
|
Credit from banking corporations and current maturities of loans from banks and others
|
As of December 31
|
||||||||
2014
|
2013
|
|||||||
NIS millions
|
||||||||
Current maturities of other liabilities
|
181 | 215 | ||||||
Current maturities of loans from banks
|
1,402 | 1,648 | ||||||
Short-term loans from banks
|
266 | 601 | (1) | |||||
Short-term loans
|
14 | 18 | ||||||
1,863 | 2,482 |
|
(1)
|
For details regarding the repayment of the entire balances of the Morgan Stanley credit and the Citigroup credit in January 2014, see section F.1.e below.
|
C.
|
Developments in the Company’s Liabilities in 2014 and After the Date of the Statement of Financial Position
|
|
1.
|
In December 2010, the Company signed an agreement with a banking institution that previously provided it with a loan of NIS 750 million. As part of the agreement, each of the (equal semi-annual) principal payments of the loan will be deferred for three years, so that instead of the payments being executed semi-annually commencing from March 2011 through March 2015, they will be executed semi-annually commencing from March 2014 through March 2018. In addition, each of the principal payments will bear, commencing from their initial dates of payment until the new dates of payment (i.e., for a three-year period), interest on the basis of the Prime rate plus a margin of 1.3% instead of the fixed interest that was paid until the original repayment dates. In accordance with the aforementioned consent, additional refinancing of current principal payments in respect of this loan were also performed in March and September of 2014, and a final refinance was made in March 2015. For information pertaining to financial restrictions and covenants in connection with the aforementioned loan and additional loans of the Company, see note 16.E. below.
|
|
2.
|
Loan from a guaranteed creditor of the Company (entities from the Menorah Group (“Menorah”))
|
Note 16 – Bank Loans and other Financial Liabilities at Amortized Cost (cont.)
|
C.
|
Developments in the Company’s Liabilities in 2014 and After the Date of the Statement of Financial Position (cont.)
|
|
2.
|
Loan from a guaranteed creditor of the Company (entities from the Menorah Group (“Menorah”)) (cont.)
|
The pledged asset
|
As of December 31, 2014
|
Shortly before the publication of this report
|
||||||||||||||
Amount
|
Rate of pledged holdings
|
Amount
|
Rate of pledged holdings
|
|||||||||||||
NIS millions nominal value
|
%
|
NIS millions nominal value
|
%
|
|||||||||||||
Discount Investments
|
13.5 | 15.8 | 20.4 | 23.9 | ||||||||||||
Clal Holdings Insurance Enterprises
|
2.2 | 4 | 2.2 | 4 | ||||||||||||
Cash (NIS millions)
|
18 | 2 | 2 18 | |||||||||||||
Note 16 – Bank Loans and other Financial Liabilities at Amortized Cost (cont.)
|
C.
|
Developments in the Company’s Liabilities in 2014 and After the Date of the Statement of Financial Position (cont.)
|
|
2.
|
Loan from a guaranteed creditor of the Company (entities from the Menorah Group (“Menorah”)) (cont.)
|
Value of marketable shares pledged in favor of the lender (“security value”)
|
Balance of the loan, net 3
|
Ratio of security value to balance of the loan, net in percentages (“cover ratio”)
|
Minimal cover ratio required by the lender
|
|||||||||||||
NIS millions
|
%
|
|||||||||||||||
As of December 31, 2014
|
225 | 136 | 165 | % | 150 | % | ||||||||||
As of March 26, 2015
|
194 | 134 | 220 | % | 150 | % |
Note 16 – Bank Loans and other Financial Liabilities at Amortized Cost (cont.)
|
C.
|
Developments in the Company’s Liabilities in 2014 and After the Date of the Statement of Financial Position (cont.)
|
|
2.
|
Loan from a guaranteed creditor of the Company (entities from the Menorah Group (“Menorah”)) (cont.)
|
C.
|
Developments in the Company’s Liabilities in 2014 and After the Date of the Statement of Financial Position (cont.)
|
|
2.
|
Loan from a guaranteed creditor of the Company (entities from the Menorah Group (“Menorah”)) (cont.)
|
|
3.
|
Advancing a bridging loan to the Company and converting it into capital – On March 10, 2014, the Company signed an agreement with Dolphin Fund Limited and E.T.H M.B.M Extra Holdings Ltd. (companies under the control of Mr. Eduardo Elsztain and Mr. Mordechai Ben-Moshe, respectively (jointly and severally: “the investors”)); Adv. Hagai Olman and Mr. Eyal Gabbay (the trustees for the creditors’ arrangement in IDB Holding (“the trustees for the arrangement”); and IDB Holding (through the trustees for the arrangement), regarding the provision of a bridging loan to the Company in the amount of NIS 170 million (“the loan”). The stated bridging loan was given in accordance with the provisions of the debt arrangement in IDB Holding, as specified in note 16.G below. For details of the conversion of the bridging loan into the Company’s capital and additional investments in the Company’s capital in accordance with the provisions of the debt arrangement as aforesaid, see note 15.B.1 above.
|
|
4.
|
Payment of interest to the Company’s creditors in respect of amounts deposited in the observer’s trusteeship account
|
|
In accordance with the decision by the District Court in Tel-Aviv-Jaffa dated June 9, 2013 (as part of the legal proceeding as specified in Note 16.G below), the Company regularly transferred the amounts to its financial creditors in accordance with their payment schedules, to a designated trusteeship account held by the Court appointed observer. In accordance with the Court’s decision from October 17, 2013, 65% of the aforementioned funds were released in favor of the creditors to which they were due, including the income accumulated in the deposit account in respect of these amounts, and as of that date the Company was required to continue to pay its payments to its financial creditors, so that 65% of them will be transferred to the creditors to which they are due, and 35% will continue to be transferred to the aforesaid trusteeship account. During January 2014, the full balance of these funds was released by the observer, in accordance with the Court’s decision dated January 15, 2014. As of the date of release of the balance of funds, the Company transferred and is transferring to its financial creditors, the full payments to which they are due, in accordance with the payment schedules of their loans.
|
|
During 2013 the Company received letters from its lending corporations according to which their position is that the Company has violated the loan agreement with them and that they are entitled, inter alia, to arrears interest payment with respect to any payment which unpaid and/or will not be paid to them at its due date.
|
|
During 2013 the Company received letters from its lending corporations according to which their position is that the Company has violated the loan agreement with them and that they are entitled, inter alia, to arrears interest payment with respect to any payment which unpaid and/or will not be paid to them at its due date.
|
|
Note 16 – Bank Loans and other Financial Liabilities at Amortized Cost (cont.)
|
C.
|
Developments in the Company’s Liabilities in 2014 and After the Date of the Statement of Financial Position (cont.)
|
|
4.
|
Payment of interest to the Company’s creditors in respect of amounts deposited in the observer’s trusteeship account (cont.)
|
|
As part of a motion filed with the Court in November 2013 by a bank creditor of the Company (whose loan was finally repaid according to its payment schedule in January 2014), the Company was required to pay all of the interest payments (including excess interest) to which the aforesaid bank creditor is entitled according to the loan agreement in respect of the funds held in trusteeship by the observer as stated above. The Company’s position is that payment transfers made to the observer, in accordance with the Court’s decision, constitute full repayment of its liabilities, and accordingly the relevant creditors are not entitled to arrears interest payment in respect of them and the Company has claims also with regard to the non-entitlement to interest and linkage beyond the interest on the deposit which was held by the observer. On March 27, 2014, the observer filed, following the Official Receiver’s offer to authorize the observer to manage the negotiations between the parties, a settlement proposal, subject to the consent of the Company and the creditors, according to which the Company will bear approximately one third of the difference between the contractual interest (which does not include arrears interest) and the interest on the deposit accumulated on the observer’s account, meaning in total the Company will pay of approximately NIS 7 million to its creditors, beyond the interest on the deposit which has been paid to them. On September 21, 2014, a hearing was held on the aforementioned motion, in which the Court instructed that it would be appropriate for the parties to reach a settlement. The parties were requested to notify the representative of the parent company whether they accepted the aforementioned proposal by the observer. On September 30, 2014, the trustees for the Company’s bonds Series G, I and J announced, in light of the Court’s position, as expressed in the hearing dated September 21, 2014, their intention to notify the Court on October 7, 2014 of their agreement for the Court to determine the matter of the interest payment by way of a settlement.
|
|
Additionally, in a meeting of the holders of the Company’s Series C bonds, which was held on October 1, 2014, a decision was reached to instruct the trustee for the series C bonds to agree to the observer’s settlement proposal. Further to the creditor’s aforementioned notices, on October 20, 2014, the Company’s Board of Directors resolved to accept the settlement proposal, with respect to the creditors who had agreed to it. In light of the above, the Company requested the Court to approve the settlement proposal with those of the Company’s creditors who have agreed to it (Bank Hapoalim, Israel Discount Bank, Bank Mizrahi Tefahot, HSBC bank, BNP bank, Harel Insurance Company, and the holders of the series C, G, H, I & J bonds) in a manner whereby they will be paid a total of NIS 6.4 million, in accordance with the proportion of the distribution between the creditors, as set forth in the observer’s settlement proposal, while determining in its decision that the Company’s consent does not derogate from its rights and claims regarding any entities which have not agreed to the settlement – Sky Fund. On October 26, 2014, a ruling was given on the settlement by the Court, with respect to the dispute between the Company and all of the parties, excluding Sky Fund. The Court stated that the proposal weighed, in a balanced manner, all of the risks and rewards of each of the parties to the request, and ordered payment to the creditors (excluding Sky Fund) in the total amount of NIS 6.4 million, by December 1, 2014.
|
|
It is noted that this amount was paid in full by the Company during November 2014, and accordingly, the Company reversed, in the fourth quarter of 2014, a provision in an amount of NIS 15 million.
|
|
With respect to Sky Fund, due to the fact that it has not filed a motion with the Court on the matter, the Court determined that its claims should not be heard, and insofar as it will file a motion with the authorized Court, such claims will be heard. As at the date of publication date of the report, a motion by Sky Fund has not been filed on the subject. The balance of the provision on the books as at December 31, 2014 in respect of the interest for the period in which payments for the creditors were deposited into the trust account, amounts to a total of NIS 1.5 million. For details of the settlement between IDB Tourism, the Company and Sky Fund regarding, inter alia, the payment of interest for the money that was deposited in the observer’s trust account, see note 3.H.6.c above.
|
Note 16 – Bank Loans and other Financial Liabilities at Amortized Cost (cont.)
|
C.
|
Developments in the Company’s Liabilities in 2014 and After the Date of the Statement of Financial Position (cont.)
|
|
5.
|
Offsetting the expenses of trustees to the arrangement
|
|
In connection with the funds which were deposited in the observer’s account and which were released in accordance with the Court’s decisions dated October 17, 2013 and January 15, 2014, as stated above, it is noted that the trustees for the Company’s bonds Series G, I and J offset, from the payments which had been released and transferred to them, as stated above, amounts for the purpose of covering the expenses of the relevant trustee and his agents, and covering additional expenses, which according to the specified trustees, it was the Company’s duty to bear. During the reporting period, the Company reached agreements with the trustees to the bonds, and paid a total of NIS 890 thousand, net, in respect of the trustee’s expenses, as stated above. On September 17, 2014, each of the trustees for the aforementioned bonds announced that, following negotiations between the trustee’s service providers, the trustee and the Company, agreements had been reached regarding the reduction of the payments to the service providers, and payment of their fees by the Company, and that such agreements allowed repayment, to the aforementioned bond holders, some of the amounts which had been offset, as stated above. In light of the above, on September 30, 2014, the trustees for the aforementioned bonds repaid to the holders of the aforementioned series of bonds, who held the bonds on the relevant specified dates (with respect to Series G and I - July 4, 2014 and with respect to Series J – November 28, 2013), NIS 1,280 thousand out of the amounts that had been offset by the trustees to cover the aforementioned expenses.
|
|
6.
|
In connection with the convertible bonds issued by IDB Tourism to Sky Fund, the repayment of which was secured by a guarantee from the Company, on August 11, 2013, the repayment date of the aforementioned bonds, the Company repaid to Sky Fund, by virtue of the aforementioned guarantee, the balance of the bonds in the amount of approx. NIS 70 million (by depositing the payment with the Observer, whereby, in accordance with the Court’s decisions, all of the aforementioned funds which had been deposited with the observer were released, as specified in note 16.C.4 above).
|
|
7.
|
With regard to a guarantee which was provided by the Company in favor of IDB Tourism (2009) Ltd. (“IDB Tourism”), a wholly owned subsidiary of the Company, in respect of a loan in the amount of USD 39 million which was received in the past by IDB Tourism from a banking corporation, and regarding a letter received from the banking corporation in which it was demanded that the Company repay the loan, by virtue of the guarantee that it provided, on April 1, 2014, the Company paid to the aforementioned banking corporation a total of USD 39 million (NIS 135.7 million). On July 6. 2014, approval was received from the banking corporation for the cancellation of the Company’s guarantee in favor of IDB Tourism.
|
Note 16 – Bank Loans and other Financial Liabilities at Amortized Cost (cont.)
|
D.
|
Current Rating of the Company’s Bonds
|
|
a.
|
Net debt of the Company (solo) and of its wholly owned designated subsidiaries (directly or indirectly), will not exceed a limit of NIS 6.7 billion, net of an amount equal to the total cash receipt which will be actually received by the Company (after the deduction of taxes, levies and any other payments required with respect to the sale) with respect to the sale or transfer of the holdings of the Company (or of a subsidiary wholly owned by the Company5) in corporations in which the Company is an interested party.
|
|
b.
|
The balance of cash and marketable securities will not fall below the amount of the forecasted current maturities for the two quarters following the reporting quarter (“the liquidity covenant”) (no change was made to this covenant as part of the understandings of June 2012). See section L below for details regarding consent to suspend this covenant.
|
|
c.
|
Value of holdings in the relevant companies - the average aggregate market value (in accordance with the stock exchange closing price) of the Company’s holdings (concatenated, with full dilution) in Clal Holdings Insurance Enterprises, Shufersal and Cellcom, on the last day of the reporting quarter, together with the 19 consecutive trading days which preceded it, with the addition of the Company’s relative share (in consideration to its chain holding rates) of the cash dividend amounts distributed by the aforementioned companies beginning on June 29, 20126 (“the value of holdings in the relevant companies” and “the relevant companies”, respectively), will be no less than NIS 1,692 million. The Company will not be considered as breaching this condition if, during the ten consecutive trading days after the last day of the reported quarter, the average value of the holdings in the relevant companies exceeds the aforementioned amount.7
|
4
|
In case of differences in the wording of the agreements vis-a-vis the lending corporations, the more stringent and restrictive wording is provided hereunder.
|
6
|
And subject to the condition that as at the date of the examination, the addition with respect to the dividends distributed by Cellcom and Shufersal, and the addition with respect to the dividends distributed by Clal Holdings Insurance Enterprises, will be restricted by the cash amounts held by Discount Investment and the Company, respectively.
|
7
|
Except in the event that, during the 12 business days after the last date of the reported quarter, a suspension of trading of three or more days occurred.
|
Note 16 – Bank Loans and other Financial Liabilities at Amortized Cost (cont.)
|
|
c.
|
Value of holdings in the relevant companies (cont'd)
|
|
d.
|
The loan agreements with some of the lending corporations include provisions which require their advance consent in the event that assets of the Company are charged, where the total value of the above exceeds 25% of the total value of all assets (including cash) (“value of all assets”), in the event of the sale of major holdings (on this matter, the shares of Discount Investment and Clal Holdings Insurance Enterprises which are held by the Company, and, until the aforementioned understandings were reached with lending corporations in June 2012, also the shares of Clal Industries) to third parties, where the cumulative value of the major holdings sold as aforesaid will be 20% or more of the total value of all assets, and also in the event that the cumulative value of major holdings sold together with the cumulative value of the Company’s charged assets is 25% or more of the value of all assets.8
|
8
|
Regarding the specified instructions: the rate of value of the Company’s pledged assets and/or main holdings, will be determined at the date of creation of each pledge and/or at the date of each sale according to the matter; the value of each asset will be calculated according to the higher of market value or the value presented within the Company’s (unconsolidated) financial statements, unless the book value as stated is higher by 25% or more than the market value consecutively in two subsequent quarters, in which case the “value” will be determined according to market value, as long as the aforesaid gap continues.
|
Note 16 – Bank Loans and other Financial Liabilities at Amortized Cost (cont.)
|
|
1.
|
The Company will be entitled to perform additional charges on holdings in investee companies, beginning on June 29, 2012, without approval from the lending corporations, insofar as an addition of collateral is required for existing secured lenders only, up to a value of collateral of NIS 100 million (less repayments to secured creditors, as specified below), where towards some of the lending corporations, the aforementioned limit will be calculated in accordance with the market value of the assets as at June 29, 2012, and for the other part, according to the market value of the assets on the date of the charge (“the charges bank” or “the restriction on additional charges”).
|
|
2.
|
The Company will be entitled to schedule earlier repayments to secured creditors on account of the principal of existing debts, subject to the provision of an update to the lending corporations. However, the performance of such payments (beyond the required repayments which were performed in connection with the Clal Industries transaction) will reduce the amount of the series of charges specified above by half of the amount whose payment date was rescheduled for an earlier date, as aforesaid.
|
|
3.
|
The Company will be entitled to sell, beginning on June 29, 2012, holdings in Clal Holdings Insurance Enterprises and in Discount Investment Corporation (“major holdings”), without the approval of the lending corporation, subject to the following conditions: (a) The cumulative market value of the major holdings sold after June 29, 2012 must not exceed a total of NIS 100 million, where for some of the lending corporations, the aforementioned limit will be calculated according to the market value of the assets as at June 29, 2012, and for the other part, in accordance with the market value as at the date of the sale (“restriction regarding the sale amount of the major holdings”); (b)The Company will not discontinue its holdings of control (at least 50.01% of issued and paid-up capital, with full dilution) of any of the aforementioned companies; and (c)The consideration with respect to the sale of the aforementioned holdings will be in cash only, and will be entirely used only for the agreed and permitted uses, as these are defined in section E below.
|
|
Note 16 – Bank Loans and other Financial Liabilities at Amortized Cost (cont.)
|
|
e.
|
The balance of the Company’s liquid resources, from any source whatsoever, will only be used for the agreed-upon purposes, including repayment of existing debts according to their amortization schedules, early repayment of existing debts which are secured by charges, for the purpose of fulfilling financial ratios by virtue of existing debts towards the aforementioned financiers, for the purpose of financing current expenses in the ordinary course of business, and for the purpose of performing permitted investments, as defined below (hereinafter, jointly: “permitted uses”).
|
|
f.
|
The Company will not perform changes to the terms of the unsecured loans which have been provided to it, which will improve the condition of the relevant creditor, unless it will reach an understanding with the other lending corporations (where the loan agreements with whom include the financial covenants specified above) regarding an identical improvement of their condition, including changes to the original amortization schedule of its existing credit, in a manner which will involve the earlier scheduling of any repayment date, except for an early repayment initiated by the Company in favor of secured creditors, and an improvement of the interest terms to a certain lender, including an undertaking according to which, in the event that the Company agrees to increase the interest rate with respect to any of its unsecured debts, the increased interest rate will apply at the same ratio also towards the other lending corporations.
|
|
g.
|
The Company will not perform (directly and/or through a wholly owned subsidiary) a buy-back, redemption or repayment of any bonds whatsoever which have been issued and/or will be issued by it, and will not finance any of the aforementioned activities. It is clarified that the foregoing does not apply to current repayments, in accordance with currently existing amortization schedules.
|
|
h.
|
The understandings with the lending corporations also stipulated that the report of forecasted cash flows published by the Company in the first quarter of 2012 does not assume a dividend distribution by the Company during the period included therein, due to the negative amount of the Company’s distributable surplus. However, the Company undertook to provide notice 21 days before reaching a decision regarding a dividend distribution. On this matter, “dividend” means: including transaction with related parties and other companies in the Group. See also section e. above that by virtue of the undertaking included in it, the Company is prevented from distributing dividends.
|
|
i.
|
The Company has undertaken not to provide any loans to a shareholder or to any entity related to a shareholder, excluding as part of the permitted investments, as defined in section e above, and not to make repayment in any manner, to any entity in the group of existing and/or future shareholders, except as agreed. For details regarding a bridging loan given to the Company by the Dolphin Group and Extra, which was converted into the Company’s share capital, see notes 16.C.3 and 15.B.1 above.
|
|
j.
|
The Company has undertaken not to pay management fees to a shareholder or to a related party to a shareholder, without the advance written consent of the lending corporations, except as agreed.
|
10
|
It should be noted that during January 2014, the Company notified its lending corporations in connection with an investment which it performed in IDB Tourism, in the amount of NIS 10 million.
|
11
|
See also section l below regarding the Company’s obligation towards two of its lenders, not to invest additional funds in the Plaza project.
|
12
|
The trustees for the bonds of the Company and IDB Holdings demanded that the Company does not make any additional investments without their consent. The Company updates, in certain cases, the trustees to the bonds with regards to making investments.
|
Note 16 – Bank Loans and other Financial Liabilities at Amortized Cost (cont.)
|
|
k.
|
In the event that an undertaking to fulfill certain financial covenants has been given to a certain lending corporation, which includes various and/or additional terms in addition to the terms specified in the letters of undertaking given to the other lending corporations (“the additional terms”), notice will be given to the other lending corporations, and at the request of any of the foregoing, the Company will agree to the application of the additional terms also with respect to it.
|
|
l.
|
Negotiations to arrange the financial covenants
|
|
1.
|
Until the end of April 2014, the parties will work to formulate an arrangement which will replace the existing financial covenants and apply for the first time to the results of the second quarter of 2014 (ending on June 30, 2014). If the parties do not reach an understanding, the financial covenants from before the understandings of June 29, 2012 will come into effect again (and particularly the “economic capital” mechanism, including the mending periods included in it).
|
|
2.
|
The covenant involving the balance of cash and marketable securities (see section (B) above) has been suspended beginning in the second quarter of 2013, and it was agreed that it will be re-applied, unless otherwise agreed, with respect to the results for the second quarter of 2014 and thereafter;
|
Note 16 – Bank Loans and other Financial Liabilities at Amortized Cost (cont.)
|
Note 16 – Bank Loans and other Financial Liabilities at Amortized Cost (cont.)
|
|
m.
|
Additional grounds for immediate repayment
|
Note 16 – Bank Loans and other Financial Liabilities at Amortized Cost (cont.)
|
|
n.
|
Change of control in the Company
|
Note 16 – Bank Loans and other Financial Liabilities at Amortized Cost (cont.)
|
|
o.
|
Cancellation of the transaction for the sale of the Company’s holdings in Clal Holdings Insurance Enterprises to JT
|
F.
|
Main changes in 2014 in long-term liabilities and financial covenants of the corporation’s held companies
|
|
1.
|
Discount Investment Corporation
|
|
a.
|
In January 2014, Discount Investment Corporation issued to the public, according to its shelf offer report of January 2014, which was published pursuant to its shelf prospectus of December 2013 (which amended its shelf prospectus of June 2013), series F linked bonds with a nominal value of NIS 898 million, by way of an expansion of the series, in return for the acquisition of series D linked bonds with a nominal value of NIS 794 million.
|
|
The series F bonds issued as aforesaid were listed on the stock exchange and the series D bonds that were acquired by Discount Investments as aforesaid expired and were delisted from the stock exchange.
|
|
b.
|
In July 2014, two banking corporations that provided loans to Discount Investments, the principal balances of which as at December 31, 2014 are NIS 271 million and NIS 250 million, with regard to their right to place the stated loans for immediate repayment in case of a change in control, agreed that the change of control as part of the completion of the debt arrangement of IDB Holdings, as stated in note 16.G.2 below, shall not constitute grounds for demanding immediate repayment of their loan to Discount Investments if all of the following conditions are satisfied: (a) Messrs. Eduardo Elsztain and Mordechai Ben-Moshe, who hold the controlling interests (indirectly and in equal shares) in the Company, shall each hold, directly and/or indirectly through Companies controlled by them, at least 26.65% of the issued and paid up share capital of the Company (on a fully diluted basis) and the rights attached to the aforesaid shares; (b) the Company shall itself control Discount Investments directly and/or indirectly (on a fully diluted basis). It should be noted, that each of the stated lenders is entitled to place its loan for immediate repayment in case another creditor of Discount Investments places for immediate repayment a debt of Discount Investments towards it. As stated in note 15.B.5 above, in February 2015 rights issued by the Company were exercised, and subsequently the rate of holding by Mr. Mordechai Ben Moshe in the issued capital of the Company fell below a rate of 26.65%, a change which may constitute grounds for any of the banking corporations mentioned above to place its loan for immediate repayment. Discount Investments contacted each of the banking corporations and requested their consent that changes in the percentage holdings of the control group of the Company as a result of the rights issue will not constitute grounds for to place its loan for immediate repayment, as long as Messrs.
|
Note 16 – Bank Loans and other Financial Liabilities at Amortized Cost (cont.)
|
F.
|
Main changes in 2014 in long-term liabilities and financial covenants of the corporation’s held companies (cont.)
|
|
1.
|
Discount Investment Corporation (cont.)
|
|
b. (cont'd)
|
|
Elsztain and Ben-Moshe continue to hold cumulatively (directly or indirectly through corporations that they control) more than 53.3% of the Company’s issued capital, and alternatively that non-holding by a controlling shareholder of the minimum stated threshold of 26.65% of the Company’s issued capital shall not constitute grounds to place the loan for immediate repayment during the period until June 30, 2015, and in this period the banking corporation and Discount Investments will discuss the revision of the provisions of the loan agreement with respect to the composition of the Company’s control group. As at the date of approval of this report, the banking corporations have not yet responded to Discount Investments’ request and there is no certainty that agreements will be achieved with the banking corporations or any of them on this matter.
|
|
c.
|
In December 2014, the Board of Directors of Discount Investments approved a plan for repurchase of its bonds, as they are in outstanding from time to time, by Discount Investments or a wholly owned subsidiary, in a total scope of NIS 200 million during a period of 12 months. The acquisitions will be made from time to time on the stock exchange and/or off of the stock exchange, directly and/or by a third party, in different scopes and prices, according to the discretion of the management of Discount Investments and with note, inter alia, to the market conditions and to the price of its bonds on the stock exchange, and only so long as no acquisition will cause a loss to Discount Investments at the time of its performance. In December 2014, a wholly owned subsidiary of Discount Investments acquired its bonds in an immaterial amount and after the date of the Statement of Financial Position, the aforesaid subsidiary acquired on the stock exchange series D bonds of Discount Investments with a nominal value of NIS 44 million, series F bonds with a nominal value of NIS 53 million and series I bonds with a nominal value of NIS 5 million, for a total consideration of NIS 106 million. The aforesaid bonds will not be delisted from trade on the stock exchange. As a result of the aforesaid acquisitions, the Company will record in the first quarter of 2015, its share in the profit in an amount of NIS 19 million.
|
|
d.
|
As part of completion the merger agreement between Adama and ChemChina in October 2011, Koor was given, through a Chinese bank (‘the Chinese bank’) a non-recourse loan in a sum of $960 million, secured by a charge on Adama’s shares held by Koor immediately after the completion of the merger transaction (hereafter in this section, ‘the charged shares’ and ‘the non-recourse loan’), which is repayable by means of Adama shares as stated below. The non-recourse loan was given to Koor and its wholly owned subsidiary, and was divided between Koor and the aforesaid subsidiary in proportion to the number of charged shares held by each one of them.
|
Note 16 – Bank Loans and other Financial Liabilities at Amortized Cost (cont.)
|
F.
|
Main changes in 2014 in long-term liabilities and financial covenants of the corporation’s held companies (cont.)
|
|
1.
|
Discount Investment Corporation (cont.)
|
|
d. (cont'd)
|
|
The following are details regarding the main terms of the non-recourse loan:
|
·
|
Payment of principal and interest: the principal of the non-recourse loan will be paid in full at the end of seven years from the date on which the loan is given. In the first four years from the date on which the non-recourse loan is given (hereafter ‘the period of the first four years’), the interest is not paid (apart from dividends received on the charged shares) but is added to the principal every three months and will be paid with the principal at the end of the seventh year. After the period of the first four years, the current interest will be paid in case at the end of each interest period (the interest period is every three months on fixed dates).
|
·
|
Interest: the non-recourse loan bears interest at a rate that does not exceed the finance cost that ChemChina will take for the purpose pf paying the overall merger consideration, and in any case will not exceed the Libor rate (for six months) plus 4.5% per annum that will be fixed for each two consecutive quarters in advance. (Taking into account the Libor rate shortly before the date of approval of these financial statements, the effective interest (after grossing up the deduction of taxes insofar as any will be payable and before commissions) is estimated at approximately 5.3%). Insofar as there will be a liability to deduct tax at source in Israel for the interest payments, Koor will pay these payments and will gross up the full tax. In addition, Koor undertook to indemnify ChemChina for business taxes that ChemChina will be liable to pay pursuant to the law in China for such interest payments (insofar as there will be no exemption for such taxes) up to an amount of 5% of the interest (plus grossing-up, insofar as it applies). It should be noted that the payment of the business tax in China is likely to be charged also during the period when the interest is accumulated (i.e., during the period of the first four years).
|
·
|
‘Breach event’: the non-payment of the loan principal or interest; Koor’s liquidation or insolvency, suspension of proceedings or creditors’ arrangements, or the filing of proceedings for liquidation, insolvency, a suspension of proceedings or creditors’ arrangements that are not cancelled within the stated period; an incorrect declaration on a material aspect or a material breach of the terms of the loan agreement; if the performance of Koor’s undertakings pursuant to the loan agreement will become unlawful.
|
·
|
The charged shares: realization of the charge on the charged shares will be the only remedy available to the Chinese bank for the purpose of repaying the loan and securing the liabilities pursuant to the loan, except in certain cases where the validity of the charge in favor of the Chinese is prejudiced during the period of 90 days from the date of transfer of Adama’s shares to an authorized transferee, insofar as they will be transferred, pursuant to agreements with ChemChina, in which case the loan will become a recourse loan (with a right of recourse against Koor for the lower of the balance of the debt for the loan or the value of the charged shares), but only as long as the defect is not remedied. Should the loan become a recourse loan, such a defect will constitute grounds for the Chinese bank to demand immediate repayment of the loan, if the defect is not remedied within the period of time determined.
|
Note 16 – Bank Loans and other Financial Liabilities at Amortized Cost (cont.)
|
F.
|
Main changes in 2014 in long-term liabilities and financial covenants of the corporation’s held companies (cont.)
|
|
1.
|
Discount Investment Corporation (cont.)
|
As of December 31
|
||||||||
2014
|
2013
|
|||||||
NIS millions
|
||||||||
Host contract in the hybrid financial instrument for the non-recourse loan
|
3,170 | 3,676 | ||||||
Embedded derivative
|
(72 | ) | (607 | ) | ||||
3,098 | 3,069 | |||||||
Less deferred expenses
|
(8 | ) | (12 | ) | ||||
Hybrid financial instrument for the non-recourse loan
|
3,090 | 3,057 |
·
|
As of December 31, 2014 – the future value of Adama shares was calculated by discounting the base asset value (less the non-marketability component of the shares) until the date of delivery of the shares (and alternatively the date of repayment of the loan) at the rate of return on capital as at December 31, 2014. Based on the findings of a binomial model it was estimated that the date of delivery of the shares (and alternatively the date of repayment of the loan) is approximately one year after the date of the estimate.
|
·
|
As at December 31, 2013 – the value of Adama’s shares expected at the end of loan term was calculated based on the rate of return on the capital as of December 31, 2013, which was used in estimating the value of Adama’s shares. The value of Adama’s shares, which was estimated in accordance with a capitalization of Adama’s operating cash flow forecast for the aforesaid date, is capitalized with Adama’s weighted cost of capital, less Adama’s net financial liabilities.
|
Note 16 – Bank Loans and other Financial Liabilities at Amortized Cost (cont.)
|
F.
|
Main changes in 2014 in long-term liabilities and financial covenants of the corporation’s held companies (cont.)
|
|
1.
|
Discount Investment Corporation (cont.)
|
As of December 31, 2014
|
As of December 31, 2013
|
|
Standard deviation
|
33.05%
|
39.3%
|
Non-marketability discount *
|
For the purpose of estimating the discount rate for non-marketability until the date of registration for trade or the making liquid of the base asset, a put option model was used (Average Put Option). Accordingly, a fixed discount rate was estimated at 8.2%.
|
For the purpose of estimating the discount rate for non-negotiability, the average put option model was used for various possible listing dates (see above). The discount rate was reduced to its minimum value throughout the model in accordance with the various probabilities for negotiability of the shares on future dates. The weighted amount of the discount as of the date of the estimate stood at 8.1%.
|
Control premium
|
Not relevant.**
|
3.3%-6.6% and on average 4.95% of the value of the base asset***.
|
Rate of return on the capital
|
12.54%
|
12.11%
|
*
|
The estimates regarding the date of a future issuance or the making liquid of the shares were changed at the date of valuation as at December 31, 2014 subsequent to the postponement of the issuance as aforesaid. In the valuation as at December 31, 2013, the non-marketability discount that decreases until the expected listing date is consistent with the valuation methodology that was used with regard to scenario method valuation and is consistent with the treatment for the host contract, whose value was based inter alia on the main scenario of listing by the end of the option period, and therefore a non-marketability discount was not deducted in that scenario.
|
**
|
The valuation as at December 31, 2014 was based on the value per share reflected in the lower range published within the registration document as aforesaid and as the aforesaid value does not reflect a control value, no control premium deduction was required at this date.
|
***
|
The control premium inherent in the value of the benefit as of the date of completion of the Adama-ChemChina transaction is estimated at a sum of $169 million. In May 2011 a decision was made by the court in a legal proceeding against Koor and Adama with regard to the aforesaid transaction, according to which the value of the surplus benefit should be divided between all of the shareholders of Adama, and the settlement in the aforesaid legal proceeding in which Koor paid $45 million to the other shareholders of Adam was given the force of a final judgment.
|
Note 16 – Bank Loans and other Financial Liabilities at Amortized Cost (cont.)
|
F.
|
Main changes in 2014 in long-term liabilities and financial covenants of the corporation’s held companies (cont.)
|
|
1.
|
Discount Investment Corporation (cont.)
|
|
e.
|
Until January 15, 2014, Koor and private headquarter companies wholly owned by it, were engaged with a corporation from the Morgan Stanley Group and with a corporation from Citigroup (“the lending corporations”) in credit facility arrangements without right of recourse, which were secured by Credit Suisse shares (“Morgan Stanley Credit” and “Citigroup Credit,” jointly: the “Credit Arrangements with the Lending Corporations”).
|
|
f.
|
In March 2015, the Board of Directors of Discount Investments approved, at the request of the trustees to its series B, D, F, G, H & I bondholders, the provision of a commitment by Discount Investments according to that specified below, and this until September 15, 2015 (“the commitment period”):
|
-
|
Discount Investments will not distribute any dividend of any type to its shareholders.
|
-
|
Discount Investments will not pledge directly or through a headquarter company under its full ownership, the control core in any of the companies held by it, unless it delivers prior written notice to the trustees of its bonds 21 days in advance.
|
-
|
Discount Investments will not receive a new loan at an amount exceeding NIS 50 million which is secured by charges over its assets or that includes financial covenants towards the lender, unless it delivers to the trustees of the bonds prior written notice 21 days in advance.
|
-
|
Discount Investments will not repay in early repayments, payments to a single financial creditor at a total amount exceeding NIS 50 million during the commitment period, unless it provides prior written notice to the trustees 21 days in advance.
|
-
|
Discount Investments will not change for any of its financial creditors: (1) the interest rates; (2) the financial covenants; and (3) the collaterals provided to them according to the existing credit and financing agreements, unless it provides prior written notice of 21 days to the trustees.
|
-
|
Discount Investments will deliver notice to the trustees and any of its financial creditors, the debt towards which is over NIS 10 million, will give written notice of the placing of its debt for immediate repayment.
|
Note 16 – Bank Loans and other Financial Liabilities at Amortized Cost (cont.)
|
F.
|
Main changes in 2014 in long-term liabilities and financial covenants of the corporation’s held companies (cont.)
|
|
a.
|
Cellcom undertook to comply with financial covenants and other restrictions with regard to the series F and series G bonds that it issued to the public in Israel in March 2012, including:
|
·
|
A debt to EBITDA13 ratio exceeding 5, or exceeding 4.5 over four consecutive quarters, shall be regarded as grounds for demanding immediate repayment of the aforesaid bonds. As of December 31, 2014, this ratio stood at 2.3.
|
·
|
An undertaking not to distribute more than 95% of the profits that may be distributed pursuant to the Companies Law (‘the profits’), provided that if the debt to EBITDA ratio13 exceeds 3.5, Cellcom shall not distribute more than 85% of the profits, and if the debt to EBITDA ratio13 exceeds 4, Cellcom shall not distribute more than 70% of the profits. A failure to comply with this criterion will be regarded as grounds for demanding immediate repayment of the aforesaid bonds.
|
·
|
A demand for immediate repayment of another debt of Cellcom (cross-default), except for immediate repayment of a debt in an amount of NIS 150 million or less, shall be regarded as grounds for demanding immediate repayment of the bonds.
|
·
|
An undertaking not to create charges, subject to certain exceptions. A failure to comply with this undertaking shall be regarded as a ground for demanding immediate repayment of the bonds.
|
·
|
An undertaking to pay additional interest of 0.25% per annum on the aforesaid bonds for a decrease of two ratings in their rating in comparison to the ratio given to the aforesaid bonds prior to their issue, and an undertaking to pay additional interest of 0.25% per annum on the aforesaid bonds for every additional rating up to a maximum addition of 1% per annum. In June 2013, Maalot revised the rating of Cellcom’s bonds traded on the Tel-Aviv Stock Exchange from a rating of AA- with a negative rating forecast to a rating of A+ with a stable rating forecast.
|
·
|
Where the aforesaid bonds stop being rated for a period exceeding 60 days, this shall constitute grounds for demanding immediate repayment.
|
13
|
Debt to EBITDA ratio – the ratio between Cellcom’s net debt and its EBITDA, neutralizing non-recurring effects. For this matter, net debt - credit and loans from banking corporations and from others and liabilities for bonds, less cash and cash equivalents and current investments in negotiable securities; EBITDA – profit before depreciation and reductions, other expenses/income, net, finance expenses/income, net, and taxes of income, for the period of the 12 months that preceded the date of Cellcom’s last consolidated financial statements.
|
Note 16 – Bank Loans and other Financial Liabilities at Amortized Cost (cont.)
|
F.
|
Main changes in 2014 in long-term liabilities and financial covenants of the corporation’s held companies (cont.)
|
|
b.
|
In connection with the issuance of series H and I bonds of Cellcom to the public in Israel, which took place in July 2014, Cellcom undertook, pursuant to a new trust deed (“the new trust deed”), to comply with financial covenants and other additional covenants, beyond the obligations which it accepted as part of a trust deed in connection with the issuance of its bonds (Series F and G) (“the existing trust deed”) as specified in section a. above, including: (1) in addition to the financial covenant which Cellcom undertook in the past, in the existing trust deed, according to which, if the net debt to EBITDA ratio exceeds 5, or exceeds 4.5 for four consecutive quarters, the foregoing will constitute grounds for requiring the immediate repayment of the bonds, the aforementioned financial covenant, in accordance with the new trust deed, will also constitute a condition for distributing a dividend; and (2) compliance with the financial covenants will constitute a condition for the issuance of additional bonds from either of the two new series.
|
|
The new trust deed includes grounds for requiring the immediate repayment of the bonds, are mostly similar to the grounds for requiring immediate repayment specified in the existing trust deed, excluding certain new grounds for requiring immediate repayment which are not included in the existing trust deed, and certain changes to the grounds for requiring immediate repayment which are in the existing trust deed, including: (1) breach of the aforementioned restriction regarding dividend distribution; (2) requiring the immediate repayment of another debt of Cellcom (cross default), in a minimum amount of NIS 150 million, which constitutes grounds for requiring the immediate repayment of Cellcom’s bonds. In accordance with the existing trust deed, the foregoing will not apply to any cross default which has been caused by another series of Cellcom bonds; (3) the existence of a real concern that Cellcom will not fulfill its material obligations towards the bond holders; (4) the inclusion of a warning in Cellcom’s financial statements of a concern regarding the continued existence of Cellcom as a going concern, for a period of two consecutive quarters; and (5) a breach of Cellcom’s undertakings regarding the issuance of new bonds.
|
|
As at December 31, 2014, and shortly before the approval of these financial statements, Cellcom was in compliance with the covenants that were determined.
|
|
3.
|
Property & Building
|
|
a.
|
In June 2012, a corporation that is wholly owned by Property & Building, which directly holds the HSBC building (“the building corporation”) and a special purpose American corporation that directly holds all of the rights in the building corporation (“the additional corporation,” and jointly, “the property companies”) entered into loan agreements (jointly, in this section: “the agreement”) with the American bank, J.P. Morgan Chase Bank, N.A. (“Morgan Bank”), in which Morgan Bank gave the property companies a loan in a total amount of $400 million for a period of ten years. The loan is comprised of a main loan in an amount of $300 million, which was given to the building corporation (‘the main loan’), and a secondary loan in an amount of $100 million, which was given to the additional corporation (“the secondary loan,” and jointly with the main loan hereafter in this section, “the loan”). The following are details of the main terms of the loan:
|
·
|
The balance of the loan as of December 31, 2014: $400 million (NIS 1,556 million).
|
·
|
The date of repaying the principal: the principal of the main loan is repayable starting from the sixth year after it was given in accordance with a thirty year payment schedule, in monthly payments. The balance of the principal of the loan (including the secondary loan) is repayable in one payment at the end of the loan period in July 2022.
|
·
|
The rate of interest: fixed annual interest in an average amount of 5.04% (calculated on the basis of 360 days per annum – reflects an effective interest rate of 5.23% per annum). The interest is paid each month.
|
·
|
The loan currency: US dollar.
|
F.
|
Main changes in 2014 in long-term liabilities and financial covenants of the corporation’s held companies (cont.)
|
·
|
Collateral: as collateral for the repayment of the main loan (in a sum of $300 million), a first degree mortgage was registered on the HSBC building and the land on which it is constructed, and additional charges as customary on the lease agreements and rent accruing from the property, on the bank accounts involved in operating the property, a change on insurance receipts, rights to tax returns with regard to the asset and so on. As collateral for the repayment of the secondary loan (in a sum of $100 million), a first degree charge was registered on all of the rights in the building corporation.
|
·
|
A right of recourse against Property & Building and/or the property companies: the loan is without any right of recourse against Property & Building and/or the property companies. A wholly owned subsidiary of Property & Building, which indirectly owns the property in its entirety (in this section “the subsidiary”), gave a carve-out guarantee for an unlimited amount for the payment of all of the losses that may be caused to Morgan Bank as a result of special defined cases only, which are customary cases in agreements of this kind (such as fraud, false representation, and so on). In addition, Property & Building gave a limited carve-out guarantee up to an amount of $125 million. Moreover, each of the property companies and the subsidiary undertook to indemnify Morgan Bank for any loss that it may suffer, for an unlimited amount, as a result of cases concerning hazardous substances and environmental protection.
|
·
|
Cross-default mechanism: a breach of the main loan constitutes a breach of the secondary loan, but not vice versa.
|
·
|
Additional restrictions:
|
1.
|
All of the money received from operating the HSBC building are deposited in designated accounts that are charged to Morgan Bank (as of December 31, 2013 – a sum of NIS 40 million). This money is transferred during the lifetime of the loan to the building corporation after the current payment of the loan principal and interest thereon. In the following cases, the money received will be held in the designated accounts until the incident is repaired or terminated:
|
§
|
A breach of the agreement that constitutes a ground for demanding immediate repayment of the loan.
|
§
|
The existence of insolvency and/or bankruptcy proceedings of Property & Building.
|
§
|
When the quarterly debt service cover ratio (the ratio between the net operating income for the period and the total payments of principal and interest for the loan during that period) is less than 1.05.
|
§
|
In a case of non-renewal of the lease agreement by HSBC Bank (the main tenant of the HSBC building) or the vacating of the premises by it before the end of the lease agreement without it being replaced by another tenant in accordance with the terms stipulated in the agreement.
|
2.
|
The taking loans and additional debts by the property companies requires approval of Morgan Bank, but it is possible to receive additional finance by complying with certain criteria that are stipulated in the agreement.
|
3.
|
It is not possible to create additional charges on the HSBC building or with regard thereto.
|
4.
|
The ownership rights in the HSBC building and the ancillary rights may be transferred subject to an assignment of the loan and Morgan Bank’s consent. Morgan Bank’s consent will not be required in a case of a transfer of rights insofar as Property & Building (directly or indirectly) will continue to hold at least 25% of the HSBC building and the rights ancillary rights thereto and it will continue to retain control of the building corporation. There are no restrictions on a change of the holdings in Property & Building as long as Property & Building is a public company.
|
Note 16 – Bank Loans and other Financial Liabilities at Amortized Cost (cont.)
|
F.
|
Main changes in 2014 in long-term liabilities and financial covenants of the corporation’s held companies (cont.)
|
5.
|
Transactions with major tenants, related parties or with regard to main parts of the HSBC building are subject to the approval of Morgan Bank.
|
6.
|
It is not possible to sell, transfer, charge or issue securities of Property & Building, except as stated above and in other permitted transfers.
|
7.
|
It is not possible to change the type of incorporation of the property companies and they undertook to act in a single field of activity as the property corporation and not to change the field of activity.
|
·
|
Grounds for demanding immediate repayment of the credit: in a case of a breach of the aforesaid restrictions with regard to the change on the HSBC building or a transfer of the rights therein without the prior consent of Morgan Bank, and if customary grounds in agreements of this kind arise, Morgan Bank may demand immediate repayment of the loan, make use of money deposited in the aforesaid designated accounts, take control of the building and manage it, and act to realize the collateral. The property company is in compliance with all of the aforesaid restrictions.
|
|
b.
|
The following are details of main terms relating to the series F and G bonds that Property & Building issued to the public in 2012:
|
·
|
Collateral: Property & Building’s aforesaid bonds from series F and G are not secured by charges, but Property & Building undertook not to charge its assets (apart from certain exceptions stated in the Trust Deed), in addition to charges existing on the date of issuing the aforesaid bonds. Property & Building will be entitled to cancel its undertaking not to create charges, subject to creating collateral in favor of the trustee of the bonds as stated in the Trust Deed.
|
·
|
Financial covenants: with regard to the series F and G bonds, Property & Building undertook to comply with the following financial covenants:
|
Description of the covenant
|
Covenant
|
As of December 31, 2014
|
||||||
Minimal equity attributed to the shareholders of Property & Building
|
NIS 700 million
|
NIS 1,529 million
|
||||||
The maximum ratio between the net financial debt and the net consolidated assets of Property & Building
|
75 | % | 61.8 | % | ||||
The maximum ratio between the net financial debt and the annual EBIDTA of Property & Building consolidated
|
17 | 13.9 |
Note 16 – Bank Loans and other Financial Liabilities at Amortized Cost (cont.)
|
F.
|
Main changes in 2014 in long-term liabilities and financial covenants of the corporation’s held companies (cont.)
|
·
|
Additional restrictions: Property & Building undertook not to make a distribution, if as a result thereof the net financial debt ratio to the net amount of consolidated assets exceeds 70% or if the equity attributed to its shareholders will be less than NIS 900 million. In addition, if the rating of the bonds of Property & Building will decrease by two ratings in comparison to their rating on the date of the aforesaid issue, the rate of interest for the bonds from the aforesaid issue will increase by 0.5%. For each decrease in rating by a further rating, the interest rate for the bonds of the aforesaid issue will increase by an additional 0.25%, but not more than 1% in aggregate.
|
·
|
Grounds for demanding immediate repayment of the bonds from the aforesaid issue: in addition to standard grounds for immediate repayment (including, inter alia, insolvency events and various enforcement operations against Property & Building, a significant deterioration in its business and a real concern of non-payment, delisting, a merger subject to exceptions, a change in its field of operations, and so on), immediate payment of the aforesaid bonds may be demanded in the following cases:
|
·
|
Cross-default – if immediate payment is demanded for another series of Property & Building’s bonds or a bank loan in an amount of more than NIS 300 million.
|
|
c.
|
In the third quarter of 2014, Great Wash Park, LLC, which is an investee company held by IDB Group USA Investments Inc. (hereinafter: “IDBG”), a company under the joint control and the joint ownership of Property & Building and IDB Development, and which is building a commercial and office project in Las Vegas, USA, extended the repayment date of a bank loan in the amount of USD 59 million, until December 2016, without changing the other loan terms.
|
|
4.
|
Shufersal
|
·
|
A mechanism that adjusts the interest rate as a result of a change in the rating of the bonds: the bonds were rated by Maalot with an A+ rating. In the event that the bond rating will be two ratings lower than an A+ rating (or a corresponding rating), the annual interest will increase by an amount of 0.25%. In any case of an additional decrease in the rating, the annual interest rate will increase by an additional 0.25% for each additional rating as aforesaid. In any case, the additional annual interest for the reduction in the rating as aforesaid shall not exceed 1% in addition to the annual interest determined on the date of issuing the bonds. If the bonds are rated lower than (BBB-) (or any corresponding rating) and the rating is not increased within 60 days to above the aforesaid level, it shall constitute a ground for demanding immediate repayment.
|
·
|
Right to early repayment: from October 2014, Shufersal will be entitled to opt to carry out an early redemption of its bonds, in whole or in part.
|
·
|
Financial covenants which Shufersal undertook to comply with (Shufersal will be regarded as in breach of its liabilities stated below only if it does not comply with the relevant financial covenants during two consecutive calendar quarters).
|
·
|
The ratio between Shufersal’s net debt and its total balance sheet on the date when each calendar quarter ends, as these figures appear in its consolidated reviewed or audited financial statements, as applicable, for the relevant calendar quarter, shall not exceed 60%. For this purpose, “net debt” – the cumulative amount of the following balance sheet items: current maturities of long-term loans, current maturities of bonds, long-term liabilities to banking corporations and others, and long-term liabilities for bonds, less cash and cash equivalents, short-term deposit and negotiable collateral.
|
F.
|
Main changes in 2014 in long-term liabilities and financial covenants of the corporation’s held companies (cont.)
|
|
4.
|
Shufersal (cont.)
|
·
|
Shufersal’s total equity (including rights that do not grant control) on the last day of each calendar quarter, as this figure appears in the consolidated reviewed or audited financial statements, as applicable, for the relevant calendar quarter, shall not be less than NIS 550 million.
|
·
|
An undertaking not to create a current charge: Shufersal undertook not to create a current charge on all of its assets in favor of any third party, unless it receives approval of a meeting of the bondholders to do so.
|
·
|
Cross-default: grounds for demanding immediate repayment of the bonds was determined in a case where immediate repayment of another debt that Shufersal took from a banking corporation or a financial institution was demanded (except for a debt where there is no right of recourse against Shufersal), provided that the total amount of the demand for immediate repayment as aforesaid exceeds NIS 300 million; or immediate repayment is demanded (not on Shufersal’s initiative) for another series of bonds that was issued by Shufersal and which is in circulation, provided that the total amount for which the demand for immediate repayment was made exceeds NIS 40 million.
|
·
|
The need for the consent of the bondholders for certain operations: as part of the grounds for demanding immediate repayment of the bonds, the trust deeds of the bonds also determined the following grounds: [a] the implementation of a merger (as defined in the Companies Law) between Shufersal and another company, with certain exceptions determined in the trust deeds, without obtaining approval of the bondholders, unless the acquiring company gives notice that there is no reasonable concern that as a result of the merger the acquiring company will not be able to carry out all of the liabilities for the bonds on time; [b] a sale by Shufersal to another (except a sale to corporations controlled by it) of all or most of its assets (as the term is defined in the trust deeds) without receiving approval of the bondholders, with certain exceptions that are stipulated in the trust deeds. Shufersal undertook not to expand the series of bonds, insofar as an expansion of a series as aforesaid will prejudice its existing rating at that time.
|
·
|
Restrictions on distributing dividends: Shufersal undertook not to make a distribution of dividends to its shareholders and/or a self-purchase of its shares and/or any other distribution as defined in the Companies Law: (1) insofar as the result of a distribution as aforesaid is that Shufersal’s total capital (including rights that do not grant control), according to its consolidated financial statements, will fall below NIS 750 million; (a) insofar as in consequence of such a distribution, the ratio between Shufersal’s net debt (as defined above), calculated in accordance with Shufersal’s most recent audited or reviewed (as applicable) consolidated financial statements prior to the date of the distribution and its annual EBITDA (as defined below), taking into account such a distribution, will exceed 7.
|
|
For this purpose, ‘annual EBITDA’ means the cumulative amount during a period of twelve calendar months of Shufersal’s operating profit (before expenses and other income), plus depreciation and amortization, calculated in accordance with the figures as stated in Shufersal’s audited or reviewed (as applicable) consolidated financial statements for the last four quarters that preceded the date of the distribution.
|
F.
|
Main changes in 2014 in long-term liabilities and financial covenants of the corporation’s held companies (cont.)
|
|
5.
|
Adama
|
|
a.
|
In February 2014, Adama performed a private offering of bonds with a total nominal value of NIS 488 million, from its existing Series D, which were offered at a price which reflected an effective interest rate of 2.64% per year, unlinked to the CPI or to any currency. The total consideration received by Adama with respect to these bonds amounted to NIS 527 million.
|
|
b.
|
Adama has an obligation to various banks to comply with financial covenants by virtue of the financial documents that regulate the long-term bank credit of Adama and its consolidated companies (“the finance documents”), of which the main ones, as of December 31, 2014, are as follows:
|
1.
|
The ratio between Adama’s interest-bearing financial liabilities and its equity shall not exceed 1.25. As of December 31, 2014, this ratio stood de facto at 0.7.
|
2.
|
The ratio between the Adama’s interest-bearing financial undertakings and its earnings before interest, taxes, depreciation and amortization (EBITDA) shall not exceed 4. As of December 31, 2014, this ratio stood at 2.5.
|
3.
|
Adama’s equity shall not be less than $1.22 billion. As of December 31, 2014, the equity amounted to a sum of $1.598 billion.
|
4.
|
The finance documents of one of the banks stipulate further that the amount of Adama’s surplus balance or profit balance according to its financial statements as of any date shall not be less than a sum of $700 million. As of December 31, 2014, Adama’s surplus balance amounted to a sum of $1.114 billion.
|
|
c.
|
The securitization agreement for the book debts of Adama and its consolidated companies (including the updates to it) includes liabilities of Adama to comply with financial ratios, of which the main ones are as follows:
|
|
1.
|
The ratio between Adama’s net debt and its equity shall not exceed 1.25. As of December 31, 2014, this ratio stood at 0.7.
|
|
2.
|
The ratio between Adama’s net debt and its EBITDA shall not exceed 4. As of December 31, 2014, this ratio stood at 2.5.
|
|
3.
|
Adama’s equity shall not be less than US$1 billion. As of December 31, 2014, the equity amounted to US$ 1.598 billion.
|
F.
|
Main changes in 2014 in long-term liabilities and financial covenants of the corporation’s held companies (cont.)
|
|
5.
|
Adama (cont.)
|
|
c.
|
(cont.)
|
|
6.
|
Other consolidated companies
|
|
1.
|
Israir took a loan from a banking corporation, whose balance, as of the date of the Statement of Financial Position, is aproximately NIS 235 million, for the purpose of financing the purchase of airplanes. For this debt, the company gave a comfort letter as stated in note 22.C below. During the period, Israir reached non-bonding agreements with the bank with regard to the deferral of the repayment of the loan. As of the date of the report, the bank is extending the repayment of the loan every two weeks. Moreover, contacts are taking place with various financing institutions to refinance the loan in return for a charge on the airplanes as stated in section 2 below, in such a way that will also allow Israir to complete the purchase of an additional airplane, for which Israel paid a prepayment in a sum of approximately $8 million.
|
|
2.
|
On March 3, 2015, IDB Tourism and Israir, two wholly owned subsidiaries of the Company (directly and indirectly) engaged with a foreign banking corporation with a letter of commitment (“letter of commitment”) according to which the foreign banking corporation will act to arrange finance at an estimated scope of US$90 million (“the credit”) in favor of Israir, which will be secured by a charge on four aircraft owned by Israir (the finance, if received, is intended in part to repay existing credit secured by the same four aircraft) as well as a charge on a new, fifth aircraft which is planned to be delivered to Israir during the first quarter of 2016. Within the commitment letter, the foreign banking corporation was provided an agreed exclusivity period to place and arrange the credit as stated. The commitment letter does not bind the foreign banking corporation to provide the credit. At this date, there is no certainty that a binding financing agreement will be signed with the foreign banking corporation or that the credit will be provided to Israir as stated.
|
|
3.
|
As part of the financial covenants that were determined in loan agreements of the IDB Tourism group with banks, the balance of which as of December 31, 2014, stands at a sum of approximately NIS 250 million, it was determined that in the event of a change of control in the Company, directly or indirectly, the aforesaid banks have the right to demand immediate repayment of the loans that were given to IDB Tourism and/or to companies controlled by it.
|
|
IDB Tourism and companies of the group are in continuous contact with the aforesaid banking corporations. In the opinion of the management of IDB Tourism, even in a case of a change of control, IDB Tourism will not be required to pay the aforesaid loans immediately.
|
|
4.
|
Additional consolidated companies are a party to loan agreements in which financial covenants were determined. As of the date of the Statement of Financial Position, the aforesaid companies were in compliance with the criteria determined as aforesaid.
|
G.
|
Legal proceeding regarding the Company’s financial position; the creditors’ arrangement in IDB Holdings and additional proceedings relating thereto
|
|
a.
|
On April 21, 2013, a “Motion for the Recovery of IDB Development Corporation Ltd.” (“the involuntary arrangement motion”) was filed pursuant to section 350 of the Companies Law, in the Tel-Aviv-Jaffa District Court, by Hermetic Trust (1975) Ltd., as trustee for the Company’s series G and I bonds and by Strauss Lazar Trust Company (1992) Ltd., as trustee for the Company’s series J bonds (jointly “the applicants”), against the Company and inter alia against IDB Holdings, the lending banks and the Company’s unsecured and secured financial creditors, the trustees for the Company’s series C and H bonds, and S.H. Sky Investments (T.R.) Limited Partnership. In the aforesaid motion it was claimed that the Company is in a state of insolvency without any practical possibility of raising capital and without any ability to comply with all of its future liabilities, and therefore the court was requested to order the convening of meetings in order to approve a creditors’ arrangement. At the same time, the applicants filed an urgent motion for temporary remedies in which the court was requested to appoint an officer of the court who would be authorized to supervise the management of the Company and whose consent would be required for carrying out certain operations and to instruct that the payments to the Company’s financial creditors will be deposited in a trust account opened by the officeholder. Accordingly, on April 30, 2013, the Court ordered the appointment of Attorney Hagai Olman as an officeholder who was given powers of an observer (“the observer”) and Mr. Eyal Gabbay as economic expert. On June 9, 2013 the Court order, inter alia, that the amounts intended for paying the Company’s creditors should be deposited with the observer. On October 17, 2014, the Court ordered the release of 65% of the funds deposited in the observer’s account to the creditors entitled to them and the continued making of payments to the creditors at the aforesaid percentage. On January 7, 2014 a motion was filed with the Court by the trustees for the Company’s bonds (series G, I and J) to order the release of the funds deposited in the observer’s trust account.
|
|
b.
|
On January 8, 2014 a notice was filed to the Court by the trustees to the aforesaid bonds, according to which in light of the approval of the creditors’ arrangement at IDB Holdings, as suggested on behalf of Dolphin Group and on behalf of Extra Group, the trustees to the aforesaid bonds agree to the deletion of the motion for an involuntary debt arrangement. On January 14, 2014 the observer’s response and the Official Receiver’s response to the deletion motion were filed to the Court.
|
|
Both of the aforesaid responses expressed, inter alia, the position that it would be right to close the case on the involuntary debt arrangement motion against the corporation only after implementation of the arrangement in IDB Holdings and that all of the money deposited with the observer should be released to the corporation’s creditors, and an order should be made that the payments should continue to be made to the creditors by the corporation according to schedule. On the same date, the expert also filed his position, according to which, in view of the approval of the debt arrangement in IDB Holdings and the change in circumstances, it was possible to transfer the payments from the observer’s account to the creditors.
|
|
Moreover, it was stated that there might be a basis for concluding both proceedings, in IDB Holdings and in the corporation, at the same time. On January 15, 2014, the Court ruled on the striking-out motion and held that, as at that date, the proceeding relating to the involuntary debt arrangement motion would remain as it was, in order, inter alia, to complete the creditors’ arrangement in IDB Holdings, which was also relevant to the corporation, and in order to allow the observer to supervise what was being done in the corporation. With regard to the motions to release the money, the court ordered the observer to transfer the balance of the money that was deposited in the trust account to the corporation’s creditors, according to their proportional shares.
|
G.
|
Legal proceeding regarding the Company’s financial position; the creditors’ arrangement in IDB Holdings and additional proceedings relating thereto (cont.)
|
|
b. (cont'd)
|
|
For additional details regarding the funds in the observer’s account which were released to the Company’s financial creditors, and regarding a ruling on a settlement between the Company and its creditors (excluding Sky Fund which objected to the settlement offer) given in October 2014 by the Court, which ratifies a settlement offer by the observer on the matter of interest payments to the Company’s creditors in respect of the funds deposited with the observer as stated, see NoteC.4 above.
|
c.
|
For details regarding the Company’s motion to the Court with respect to Menorah’s demand for immediate repayment of the debt towards it, and regarding further developments with regard to the loan from Menorah, including the release of some of the collateral provided to Menorah in July 2014 and the pledging of additional collateral in November and December 2014 and January 2015, see Note C.2 above.
|
d.
|
For details regarding the ratification of the creditors’ arrangement at IDB Holdings and its implementation, see Note G.2 below.
|
e.
|
On May 15, 2014, the trustees for the Company’s (series G and J) bonds gave notice that after the completion of the creditors’ arrangement at IDB Holdings, the activity of the representatives of the Company’s bond holders has ended.
|
|
2.
|
The creditors’ arrangement in IDB Holdings and additional proceedings relating thereto
|
G.
|
Legal proceeding regarding the Company’s financial position; the creditors’ arrangement in IDB Holdings and additional proceedings relating thereto (cont.)
|
|
2.
|
The creditors’ arrangement in IDB Holdings and additional proceedings relating thereto (cont.)
|
|
b.
|
Provisions of the creditors’ arrangement at IDB Holdings pursuant to the arrangement offer of the Dolphin and Extra Group
|
|
1.
|
As part of the arrangement and as of the first completion date,16 the issued capital of the Company will be set at 200,000,000 ordinary shares (without a nominal value) and its registered capital with be determined as 500,000,000 (as specified below, the Company’s registered capital was changed on May 1, 2014).
|
|
2.
|
As part of the arrangement, the creditors of IDB Holdings will be entitled to receive all of the following amounts of the consideration (“the consideration for the arrangement”), on the dates and in the manner stated in subsections 4 to 6 below:
|
|
a.
|
The amounts of cash in the account of IDB Holdings less an amount that was set aside for the benefit of anticipated future expenses;17
|
|
b.
|
Shares of the Company;
|
14
|
As part of the creditors’ arrangement offer, ExtraHolding GmbH and ExtraEnergie GmbH, German companies controlled indirectly by Mr. Mordechai Ben-Moshe, undertook to those entitled per the arrangement (i.e., the creditors of IDB Holdings) to provide Extra the funds that it is liable to pay pursuant to the creditors’ arrangement offer, so that Extra would comply with its financial undertakings pursuant to the creditors’ arrangement. However, see note 16.G.e below, with regard to the agreements letter signed by the parties on April 8, 2014 arranging the identity of the investor at the debt arrangement, according to which Extra, ExtraHolding GmbH and ExtraEnergie GmbH are not bound by any commitment with regard to the arrangement.
|
15
|
According to the provisions of the arrangement, the Dolphin and Extra Group were able to inform, until the date of implementation of the arrangement, that the investment will be made by a special-purpose limited company, set up for the purpose of the implementation of the arrangement and which is owned by the Dolphin and Extra Group. With regard to the agreements letter signed by the parties on April 8, 2014 arranging the identity of the investor, see note 16.G.(e) below.
|
16
|
‘The first completion date’ – a date that will occur at least seven days after the conditions precedent of the arrangement will be satisfied. As stated in note 16.G.1 below, the first completion date occurred on May 7-12, 2014.
|
17
|
On the first completion date, an amount of NIS 150 million was distributed to those entitled per the arrangement, out of the cash balance of IDB Holdings, and an amount of NIS 39 million was allocated in favor of future expenses.
|
G.
|
Legal proceeding regarding the Company’s financial position; the creditors’ arrangement in IDB Holdings and additional proceedings relating thereto (cont.)
|
|
2.
|
The creditors’ arrangement in IDB Holdings and additional proceedings relating thereto (cont.)
|
|
b.
|
Provisions of the creditors’ arrangement at IDB Holdings pursuant to the arrangement offer of the Elsztain and Extra Group (cont.)
|
|
2.
|
(cont.)
|
|
c.
|
A sum of NIS 300 or NIS 800 million, which will be paid to the beneficiaries of the arrangement18 by the investors in return for the shares of the Company, which the investors will buy from the beneficiaries of the arrangement (‘the consideration for the acquired shares of IDB Development’).
|
|
d.
|
The net proceeds, in a sum of approximately NIS 48 million, for a settlement with the Manor family and the Livnat family (former controlling shareholders of the Company), which was approved by the court on October 31, 2013, in a claim for the return of amounts of dividends that were distributed to them by IDB Holdings in the years 2008-2010 (“the dividend settlement”).
|
|
e.
|
Receipts from the claims that will be accepted by IDB Holdings in the future, after completion of the arrangement (less the fees and expenses involved in conducting the legal proceedings), which the court-appointed expert for examining the debt arrangement estimated before the date of approval of the debt arrangement at approximately NIS 200 million (the aforesaid amount includes the receipts from the dividend settlement (“the receipts from the claims”).20
|
18
|
“The beneficiaries of the arrangement” – creditors of IDB Holdings, whose debt will be subject to the arrangement, pursuant to the provisions of the arrangement offer.
|
19
|
It is noted that in accordance with the provisions of the arrangement, had Clal Insurance Enterprise Holdings transaction been completed before the last date for completion of the Clal Insurance Enterprise Holdings transaction, the beneficiaries of the arrangement would have held, subsequent to the completion of the arrangement, a total of 29.95% of the Company’s issued and paid-up capital, and the consideration for the acquired IDB Development shares would have been NIS 800 million.
|
20
|
Subject to the instructions of the court, all of the rights of claim in the name of and on behalf of IDB Holdings only will be assigned to the trustees for the arrangement, in such a way that will ensure that the rights of claim of IDB Holdings against third parties (shareholders, officers and so on) (hereafter: ‘the claims’) will be exhausted, and the receipts from the claims, net, after covering all of the fees and expenses involved in the various legal proceedings, will be allocated to persons who were beneficiaries of the arrangement and will be paid to the beneficiaries of the arrangement shortly after they are received.
|
21
|
It is noted that within the arrangement considerations, a conditional consideration was included (which was not fulfilled), according to which an amount of NIS 100 million was to be paid to the beneficiaries of the arrangement insofar as Clal Insurance Enterprise Holdings transaction is not completed until the last date to complete the Clal Insurance Enterprise Holdings transaction, however in place of that an alternative transaction would be signed to sell the holdings in Clal Insurance Enterprise Holdings, until December 31, 2014 (according to a company valuation of Clal Insurance Enterprise Holdings in the amount of NIS 4.2 billion at least), the consideration of which at an amount of at least NIS 1.344 billion (gross) would be received by the Company until June 30, 2015.
|
G.
|
Legal proceeding regarding the Company’s financial position; the creditors’ arrangement in IDB Holdings and additional proceedings relating thereto (cont.)
|
|
2.
|
The creditors’ arrangement in IDB Holdings and additional proceedings relating thereto (cont.)
|
|
b.
|
Provisions of the creditors’ arrangement at IDB Holdings pursuant to the arrangement offer of the Elsztain and Extra Group (cont.)
|
|
3.
|
Pursuant to the provisions of the arrangement, the investors gave their consent that insofar as the first completion date will not occur by March 15, 2014, and insofar as it will be necessary in order to provide the cash flow needs of the Company, the Company will be given, no later than March 15, 2014, a bridging loan in a sum of at least NIS 100 million out of a sum of NIS 950 million that was made available for the purpose of implementing the arrangement offer (‘the money for the arrangement’). For details regarding an agreement to provide a bridging loan to the Company, in a sum of NIS 170 million, signed on March 10, 2014, see note 16.C.3 above. Upon the completion of the arrangement in May 2014, an amount of NIS 150 million out of the loan was converted to the Company’s share capital (see section f of this note below).
|
|
4.
|
The arrangement stipulated that if on the first completion date it will not yet be known whether the Clal Holdings Insurance Enterprises transaction will be completed or not, then the following provisions shall apply:22
|
|
a.
|
A sum of NIS 650 million out of the money for the arrangement will be deposited in trust with the trustees for the arrangement (‘the trust amount’) until an event terminating the Clal Holdings Insurance Enterprises transaction occurs or until September 30, 2014, whichever is the earlier.
|
|
b.
|
A sum of NIS 150 million out of the money for the arrangement will be invested by the investors in the Company, as stated in Note 16.G.(2). (f) below, a sum of NIS 150 million out of the amount of the bridging loan was converted into an investment in the capital of the Company and a sum of NIS 20 million out of the bridging loan became a part of the Clal loans and in June 2014 this amount was also converted into an investment in the Company’s capital.
|
|
c.
|
Moreover, according to this alternative it was determined in the arrangement offer that the investors will buy shares of the Company from the beneficiaries of the arrangement. The purchase of the shares will be done by means of a payment in cash in a sum of NIS 150 million to the arrangement trustees, which will be transferred by them to the trustees of the arrangement on the first completion date. After the first completion date, the shares of the Company in the possession of the investors will amount to 53.3% of the issued and paid-up capital of the Company.
|
|
d.
|
It was determined that the shares of the Company that constitute 20.75% of the issued and paid up capital of the Company after the first completion date (‘the Clal alternative shares’) will be deposited with the arrangement trustees in trust for the investors. The investors and the arrangement trustees will act with regard to the Clal alternative shares in accordance with the instructions of the investors for all intents and purposes.
|
|
e.
|
It was determined that the shares of the Company that constitute 25.95% of the issued and paid-up capital of the Company after the first completion date will be distributed among the beneficiaries of the arrangement.
|
|
f.
|
It was determined that the receipts of the dividend settlement that were transferred prior to the first completion date and the net amounts of cash in the account of IDB Holdings, as stated in Note 16.G.2.b.(2) above, will also be distributed to the beneficiaries of the arrangement.
|
22
|
It is noted that as at the first completion date of the debt arrangement (May 7, 2014) it was not yet known whether the Clal Insurance Enterprise Holdings transaction would be completed, so in reality the initial provisions were implemented on the first completion date.
|
G.
|
Legal proceeding regarding the Company’s financial position; the creditors’ arrangement in IDB Holdings and additional proceedings relating thereto (cont.)
|
|
2.
|
The creditors’ arrangement in IDB Holdings and additional proceedings relating thereto (cont.)
|
|
b.
|
Provisions of the creditors’ arrangement at IDB Holdings pursuant to the arrangement offer of the Elsztain and Extra Group (cont.)
|
4.
|
(cont'd)
|
|
g.
|
It has further been determined that on the first completion date, all of the bonds of IDB Holdings (including the unpaid debt balance and including entitlement to interest) and all of the finance agreements of IDB Holdings with the lending banks were cancelled, with all of their annexes and the documents ancillary to them. After completing the distribution of the consideration received as part of the arrangement (i.e., the consideration on the first completion date and on the second completion date, as defined below), the arrangement trustees shall give notice of the amount regarded as paid on account of the liabilities of IDB Holdings to its creditors, as these liabilities are reflected in the debt determinations. The balance of the debt of IDB Holdings that has not yet been paid to its creditors shall not bear any interest or linkage differentials whatsoever and shall be paid, if at all, out of additional future receipts that will be received within the framework of the arrangement, if any.
|
5.
|
|
September 30, 2014 – the last date for completion of the Clal Holdings Insurance Enterprises transaction
|
|
a.
|
A sum of NIS 500 million out of the trust amount will be invested in the Company. Insofar as the aforesaid sum, in whole or in part, was given to the Company as the Clal loan, that amount will be converted into capital in the Company (for details regarding the provision of an amount of NIS 480 million to the Company and the conversion of the balance of the bridging loan amounting to NIS 20 million to the Company’s capital, see note 16.G.f below);
|
|
b.
|
The Clal alternative shares will be distributed in full to the beneficiaries of the arrangement;
|
|
c.
|
An amount of NIS 150 million out of the trust amount will be distributed to the beneficiaries of the arrangement.
|
G.
|
Legal proceeding regarding the Company’s financial position; the creditors’ arrangement in IDB Holdings and additional proceedings relating thereto (cont.)
|
|
2.
|
The creditors’ arrangement in IDB Holdings and additional proceedings relating thereto (cont.)
|
|
b.
|
Provisions of the creditors’ arrangement at IDB Holdings pursuant to the arrangement offer of the Elsztain and Extra Group (cont.)
|
|
a.
|
Tender offers up to December 31, 2015, for shares of the Company held by the shareholders from among the public, with a share value according to the arrangement (as defined below), in return for a sum of at least NIS 249.8 million.
|
|
b
|
Tender offers up to December 31, 2016, for additional shares of the Company held by the shareholders from among the public, with a share value according to the arrangement plus 5%, on an overall scale that, together with the amount in the tender offers up to December 31, 2015, will amount to at least NIS 512.09 million.
|
|
7.
|
Extra and Dolphin Fund will participate, each according to its share, in issues of rights that the Company will carry out, insofar as it will decide to carry them out, to raise capital in order to implement its business plans in 2014 and 2015, in amounts that will not be less than the following: in 2014, not less than NIS 300 million, and in 2015, not less than NIS 500 million, respectively. In the clarification document of November 28, 2013, to the joint offer of November 26, 2013, it was clarified as follows: “It will be further clarified that section 12 of the joint offer regarding an undertaking on the part of Extra Israel and Dolphin Fund Limited to participate, each according to his share, in issues of rights that will be made by the Company, insofar as the Board of Directors of the Company will decide to make them, in order to raise capital in order to implement its business plans in 2014 and 2015, in amounts that will not be less than the following: in 2014, not less than NIS 300 million, and in 2015, not less than NIS 500 million, respectively, constitutes a valid and complete undertaking on the part of the investor within the framework of the joint offer, including to the creditors of IDB Holdings in favor of the Company.”
|
23
|
As collateral for carrying out the undertaking to make tender offers, the investors will charge, on the first completion date in favor of the trustees for the arrangement, a number of shares of IDB Development equal to half the number of the shares that the investors undertook to offer to buy as part of the tender offers, and the following provisions will apply: (1) the trustees of the arrangement will release from the change, prior to the implementation of each tender offer as aforesaid, half of the number of the shares for which the investors will give notice that they are about to make a tender offer in that tender offer, in return for or for the purpose of depositing collateral that the investors will deposit for the implementation of that tender offer; (2) at any time, the trustees of the arrangement or the investors can demand a change on additional shares or a release of shares from the charge so that half of the shares, for which the investors remain liable to make a tender offer pursuant to the above provisions, will be charged at any time in favor of the trustees of the arrangement, subject to what is stated in subsection (1). Within the framework of the Letter of Consent of April 8, 2014, as stated in note 16.G.e below, it was resolved to increase the number of shares to ensure the making of the tender orders as aforesaid for all of the shares that the investors undertook to acquire within the framework of the tender offers (instead of half).
|
G.
|
Legal proceeding regarding the Company’s financial position; the creditors’ arrangement in IDB Holdings and additional proceedings relating thereto (cont.)
|
|
2.
|
The creditors’ arrangement in IDB Holdings and additional proceedings relating thereto (cont.)
|
|
b.
|
Provisions of the creditors’ arrangement at IDB Holdings pursuant to the arrangement offer of the Elsztain and Extra Group (cont.)
|
|
8.
|
In the event that the investors do not comply with the undertaking to make the payments that the investors are liable to make on the date of completion of the arrangement, the beneficiaries of the arrangement will be able to choose, as they wish, one of the following two alternatives for agreed compensation: (1) All of the stages of implementing the arrangement will take place except that instead of the shares that are supposed to be issued to the investors, the Company shall issue to the investors shares in a reduced amount as stated in the arrangement offer; or (2) receiving agreed compensation in an amount of NIS 100 million (NIS 50 million from each of the items of collateral provided by the Dolphin and Extra Group); and with regard to the two alternatives, the aforesaid compensation (as applicable) will constitute an absolute, final and exhaustive remedy against the investors, the Dolphin and Extra Group.
|
|
9.
|
Corporate governance provisions
|
G.
|
Legal proceeding regarding the Company’s financial position; the creditors’ arrangement in IDB Holdings and additional proceedings relating thereto (cont.)
|
|
2.
|
The creditors’ arrangement in IDB Holdings and additional proceedings relating thereto (cont.)
|
|
b.
|
Provisions of the creditors’ arrangement at IDB Holdings pursuant to the arrangement offer of the Elsztain and Extra Group (cont.)
|
|
10. The following table summarizes the main commercial terms stated above, according to the scenario in which the Clal Holdings Insurance Enterprises transaction was not completed:
|
Main commercial terms of the debt arrangement according to the scenario where the Clal Holdings Insurance Enterprises transaction was not completed (in NIS millions)
|
|
Value of the company before the money
|
1,133
|
Injection into the Company
|
650
|
Cash for the beneficiaries of the arrangement (part of which will be distributed on the first completion date and part on the second completion date)
|
150 on the first completion date
150 on the second completion date
Total as part of the arrangement: 300
|
Shares of the Company that will be received by the beneficiaries of the arrangement as part of the arrangement
|
46.7%
|
Shares of the Company held by the investors
|
53.3%
|
Undertaking to buy shares of the Company through tender offers (backed up by a charge on the Company’s shares, as specified in Note 16.G.2.b.6 above and Note 16.G.2.e below)
|
Tender offers will be made in a total amount of approximately NIS 512 million, as follows:
a.Tender offers up to December 31, 2015, for shares of the Company held by the shareholders from among the public, with a share value according to the arrangement (as defined below), in return for a sum of at least NIS 249.8 million.
b.Tender offers up to December 31, 2016, for additional shares of the Company held by the shareholders from among the public, with a share value according to the arrangement plus 5%, on an overall scale that, together with the amount in the tender offers up to December 31, 2015, will amount to at least NIS 512.09 million.
‘Share value according to the arrangement’ – as stated in Note 16.G.2.b.6 above.
|
Additions
|
The arrangement offer provided that until the completion of the arrangement, the Company will be given a bridging loan in an amount of at least NIS 100 million, in return for a charge of the shares of the Company or the cash in the account of IDB Holdings, according the choice of the beneficiaries of the arrangement.24
Extra and Dolphin Fund will participate, each according to its share, in issues of rights that the Company will carry out, insofar as it will decide to carry them out, to raise capital in order to implement its business plans in 2014 and 2015, in amounts that will not be less than the following: in 2014, not less than NIS 300 million, and in 2015, not less than NIS 500 million, respectively. In addition, clarifications were given as stated in Note 16.G.2.b.7 above.
|
Cash held by IDB Holdings and receipts from claims, insofar as any are received (to the best of the Company’s knowledge, as of the date of publication of the report, the amount of cash in IDB Holdings’ account is approximately NIS 27 million).
|
Will be transferred to the beneficiaries of the arrangement, after deducting expenses.
|
G.
|
Legal proceeding regarding the Company’s financial position; the creditors’ arrangement in IDB Holdings and additional proceedings relating thereto (cont.)
|
|
2.
|
The creditors’ arrangement in IDB Holdings and additional proceedings relating thereto (cont.)
|
|
b.
|
Provisions of the creditors’ arrangement at IDB Holdings pursuant to the arrangement offer of the Elsztain and Extra Group (cont.)
|
|
11. The preliminary approvals from the Tax Authority (VAT and Income Tax), which were received by IDB Holdings on March 18 and 20, 2014, respectively, determine the tax arrangements that arise from the debt arrangement on the level of IDB Holdings and on the level of deduction of tax at source for the beneficiaries of the arrangement.
|
|
12. On April 6, 2014, Cellcom received approval of the Ministry of Communications for the transfer of indirect control in the Cellcom Group to Eduardo Elsztain and Mordechai Ben-Moshe, through corporations controlled by them, as a result of the implementation of the debt arrangement in IDB Holdings. In the report filed by the trustees for the settlement with the Court on April 6, 2014, the trustees stated, inter alia, that upon the receipt of the aforementioned approval from the Ministry of Communication, all of the conditional terms for the completion of the creditors’ settlement had been fulfilled; however, following the request by the investors to establish a designated corporation under their control, which will constitute the investor in accordance with the provisions of the creditors’ settlement, changes were required to some of the permits which had already been received, in order to complete the settlement. For developments on this matter, see notes 16.G.2.e and f below.
|
|
c.
|
On January 22, 2014, a ‘Motion for cancellation of a decision, reconsideration and giving instructions’ was filed by Mr. Nochi Dankner and Ganden Holdings Ltd. (former controlling shareholders of the Company and of IDB Holdings, “the Dankner Group”), in which the court was requested to cancel the supplementary judgment that was given on January 5, 2014, or alternatively to reconsider this decision (“the Motion to Reconsider”). On April 8, 2014 the Court dismissed the Motion to Reconsider.
|
|
d.
|
On March 25, 2014, a letter was sent by the trustees for the implementation of the arrangement to Mr. Eduardo Elsztain, further to his notice that the investor on behalf of the Dolphin Group would be a special-purpose corporation wholly owned and controlled by Dolphin Fund, directly or through another foreign corporation wholly owned and controlled by Dolphin Fund (‘the special-purpose company’). In their letter, the trustees emphasized that the founding of the special-purpose company for the purpose of implementing the arrangements did not derogate from the liabilities of Mr. Elsztain and Dolphin Fund pursuant to the provisions of the arrangement, including future liabilities, and including the tender offers and rights issue.
|
|
e.
|
On April 8, 2014, a letter of understanding was signed between all of the aforementioned entities (“the Letter of Understanding” or “the updated arrangement outline”), according to which Dolphin Fund, Mr. Eduardo Elsztain and Extra notified the trustees of the arrangement, in accordance with the provisions of the arrangement, that:
|
G.
|
Legal proceeding regarding the Company’s financial position; the creditors’ arrangement in IDB Holdings and additional proceedings relating thereto (cont.)
|
|
2.
|
The creditors’ arrangement in IDB Holdings and additional proceedings relating thereto (cont.)
|
e.
|
(cont.)
|
|
a.
|
The “Investor”, as defined in the settlement, will be a designated limited liability company, with the name of “D.H. the Investor in the Settlement Ltd.” (“the designated company”), which is owned (in equal parts) by Dolphin Fund and by Extra.
|
|
b.
|
The trustees for the settlement were notified of the designated company’s decision and announcement that the Company’s shares to which it is entitled under the settlement (including on the first completion date, according to the meaning thereof in note 16.G.2 above) should be transferred to the two corporations specified below (“the holding corporations”):
|
|
1.
|
Half of the shares to Dolphin Netherlands BV (“Dolphin”), which is (indirectly) wholly owned by Dolphin Fund.
|
|
2.
|
Half of the shares to CAA, which is wholly owned by Mr. Mordechai Ben-Moshe.
|
|
c.
|
In accordance with the provisions of the settlement, the entities which are obligated by the provisions of the settlement, jointly and severally, are only the designated company, due to its status as the “Investor,” as defined in the settlement, and the holding corporations,25 and for the avoidance of doubt, Extra, ExtraHolding GmbH, ExtraEnergie GmbH, Dolphin Fund and Eduardo Elsztain are not bound by any obligation whatsoever under the settlement including all documents comprising the settlement, as well as all annexes or clarifications submitted with respect thereto or by virtue thereof.
|
|
The Letter of Understanding included, inter alia, the following undertakings:
|
|
a.
|
Increasing the number of the Company’s shares that will serve as collateral for the purpose of the undertakings to publish and perform the tender offers in accordance with the settlement, in a manner whereby the Holding Corporations will pledge, on the first completion date, in favor of the trustees for the settlement, Company shares in a number equal to the total number of shares which the Holding Corporations undertook to offer to purchase within the framework of the tender offers, and not half, as originally determined.
|
b.
|
In the event of a rights issue performed by the Company prior to the distribution of the “Clal alternate shares” (see note 16.G.2.b.4.d. above), then a mechanism will be agreed between the trustees for the settlement, and the Holding Corporations and the Designated Company, to secure the entitlement of the Holding Corporations or the entitlement of the beneficiaries of the settlement (as applicable) to rights which were due to them on the date of the rights issue, with respect to Clal alternate shares, in a manner which will not prevent the beneficiaries of the settlement, if entitled to receive the Clal alternate shares, or from the Holding Corporations, if entitled to receive the Clal alternate shares, from purchasing rights, in accordance with their share, or in any other manner which will be agreed upon with the Holding Corporations and the trustees for the settlement.
|
|
On April 8, 2014, the trustees for the settlement filed a report with the Court, in which they requested approval for the Letter of Understanding (“the report of the trustees for the settlement”), and on the same date, the Court approved the Letter of Understanding, in accordance with the contents of the report of the trustees for the settlement. In accordance with the Court’s decision, the trustees for the settlement signed the Letter of Understandings, and accordingly, confirmed that in light of the foregoing, the entities obligated under the provisions of the settlement are only the designated company, due to its status as the “Investor,” as defined in the settlement, and the holding corporations. Moreover, the trustees for the settlement confirmed that E.T.H M.B.M Extra Holdings Ltd., ExtraHolding GmbH, ExtraEnergie GmbH, Dolphin Fund and Eduardo Elsztain are not obligated by any obligation whatsoever under the settlement (including all documents comprising the settlement, as well as all annexes or clarifications submitted with respect thereto) or by virtue thereof.
|
25
|
It is hereby clarified that the designated company and the holding corporations were established upon the conclusion of the Letter of Understanding, and that they did not take upon themselves any undertakings whatsoever beyond those specified in the settlement, and as specified in this section.
|
G.
|
Legal proceeding regarding the Company’s financial position; the creditors’ arrangement in IDB Holdings and additional proceedings relating thereto (cont.)
|
|
2.
|
The creditors’ arrangement in IDB Holdings and additional proceedings relating thereto (cont.)
|
|
e. (cont.)
|
|
b.
|
(cont.)
|
|
On April 13, 2014, the trustees for the bonds of IDB Holdings filed a motion with the Court to clarify that the rights and claims of the bond holders are reserved to them, as specified in the motion, with respect to that stated in the report of the trustees for the settlement dated April 8, 2014, and the Court approved the foregoing request on the same date.
|
|
The designated company, Dolphin Netherlands and CAA (together: “the undertaking companies”) have confirmed and notified the Israel Securities Authority and the Company as follows: CAA and Dolphin Netherlands have each confirmed that by the end of 2016: (a) the sole and exclusive activity of each of them is and will be the holding of the Company’s shares, and no other activity whatsoever is being or will be conducted by them, of any type or kind, save such holding of the Company’s shares; and (b) that none of them have or will have any undertaking, of any kind whatsoever, save their undertakings in accordance with the creditors’ settlement. The designated company has confirmed that by the end of 2016 it does not have and will not have any activity or undertaking, of any kind whatsoever, save its undertakings in accordance with the creditors’ settlement.
Before the performance of any change in the circumstances described above in any of the undertaking companies, by the end of 2016, the undertaking companies regarding which the aforementioned change will apply, as the case may be, will reach an understanding with the staff of the Israel Securities Authority regarding an agreed-upon outline for disclosure of the financial statements of the undertaking companies, to which the foregoing change applies, or any other agreed-upon alternative.
|
|
f.
|
Performance of the creditor’s arrangement in IDB Holdings and the distribution of the consideration for the arrangement. On April 29, 2014, all of the conditions precedent for completion of the arrangement were fulfilled. Between May 7 and May 12, 2014, the creditors’ arrangement at IDB Holdings was completed. Inter alia, on May 8, 2014, Company shares constituting 53.3% of the Company’s issued and paid-in share capital were transferred to Dolphin Netherlands and to CAA in equal parts, and (indirect) control of the Company was transferred to Mr. Eduardo Elsztain and to Mr. Mordechai Ben-Moshe, such that IDB Holdings no longer holds any Company shares; NIS 150 million out of the bridging loan provided to the Company in March 2013 (as specified in Notes 16.G.2.b.3 and 16.G.3 above) was converted into Company capital and NIS 20 million out of the bridging loan was repaid upon the completion of the arrangement on May 7, 2014 and became part of the Clal loans; as of May 12, 2014, Company shares were listed for trading on the stock exchange and the Company became a public company; in conjunction with the completion of the arrangement, the beneficiaries of the arrangement received NIS 150 million out of the cash balance at IDB Holdings and NIS 39 million was allocated for future expenses.
|
G.
|
Legal proceeding regarding the Company’s financial position; the creditors’ arrangement in IDB Holdings and additional proceedings relating thereto (cont.)
|
|
2.
|
The creditors’ arrangement in IDB Holdings and additional proceedings relating thereto (cont.)
|
G.
|
Legal proceeding regarding the Company’s financial position; the creditors’ arrangement in IDB Holdings and additional proceedings relating thereto (cont.)
|
|
2.
|
The creditors’ arrangement in IDB Holdings and additional proceedings relating thereto (cont.)
|
|
g.
|
On January 18, 2015 the Company received a letter from the trustees to the arrangement, in which they raised claims against the rights issue the Company performed in accordance with a shelf offer report dated January 19, 2015 (as specified in note 15.B.5 above), which included claims that the rights issue of the Company does not reflect the value of control of the Company, rather the value of the interest of the minority shareholders derived from the obligation of the Company’s controlling shareholders to perform tender offers on the Company’s shares in accordance with the provisions of the debt arrangement at IDB Holdings and that the interest of the minority shareholders will be diluted if minority shareholders participate in the rights issue; and that dilution of the entitlement of the minority shareholders to participate in the tender offers and the increase of the Company’s issued share capital amount to an interested parties’ transaction that benefits the controlling owners and requires the approval of the general meeting. The trustees of the arrangement asked the Company to act to carry out only a private placement of rights, with the approval of the shareholders’ meeting, in accordance with the Company’s liquidity needs, and they requested that the controlling owners would undertake to refrain from trading their shares until the date of realizing their whole undertaking to carry out tender offers or until the end of 2016, whichever is the earlier. Alternatively, the Company was requested to examine a possibility of separating the entitlement to participate in the tender offers from the Company’s shares prior to the rights issue, so that the right to participate in the tender offers would be given solely to the existing minority shareholders in the Company. Moreover, the Company was requested to give notice of its consent to release the shares deposited in trust with the trustees of the arrangement, unconditionally.
|
|
On January 22, 2015, the Company responded to the trustees of the arrangement in a letter in which it rejected all of their claims against the rights issue, and it stated in the letter, inter alia, that: while the need to raise capital for the Company immediately could not be in dispute, the other possibilities that the trustees of the arrangement proposed (such as making a private placement or separating the entitlement to participate in the tender offers from the Company’s shares prior to the rights issue so that the right to participate in the tender offers would belong only to the minority shareholders that existed prior to the rights issue) are not within the Company’s ability, are not within its exclusive control and were not proposed to the Company by its controlling shareholders;
|
G.
|
Legal proceeding regarding the Company’s financial position; the creditors’ arrangement in IDB Holdings and additional proceedings relating thereto (cont.)
|
|
2.
|
The creditors’ arrangement in IDB Holdings and additional proceedings relating thereto (cont.)
|
|
g.
|
(cont.)
|
|
that the beneficiaries of the arrangement were not given protection that the undertakings to make tender offers would be solely to them, but from the outset it was clear that the right would belong to all of the minority shareholders on the date of making the offers; that the rights issue is beneficial and it by nature treats the shareholders equally and is not an interested parties’ transaction; to the request of the trustees of the arrangement that the Company would agree unconditionally to release the shares deposited with them in trust, the Company replied that it already gave its conditional consent to the release of these shares, there is no reason why the trustees of the arrangement should not agree to the Company’s offer and that the trustees of the arrangement are fully liable for the release of the shares deposited with them to the beneficiaries of the arrangement and they will be liable for all of the damage that will be caused to them, if any, as a result thereof. The Company emphasized that if the trustees of the arrangement would apply to the court with regard to the rights issue, they should take into account the huge damage that might be caused as a result thereof to the Company and the derivative liability for that.
|
|
In addition, on January 26, 2015, a motion was filed with the court by the Organization for Protection of the Public’s Savings and Mr. Ohad Aloni, in which the court was requested to approve the publication of a specification of an ordinary/ involuntary tender offer for the purchase of ordinary shares with no nominal value of the Company, issued to the minority shareholders of the Company in accordance with the shelf offer report published by the Company on January 19, 2015, in order to protect the aforesaid minority shareholders from the dilution of their entitlement to participate in the tender offers which Dolphin Netherlands and CAA undertook to perform in accordance with the provisions of the debt arrangement at IDB Holdings (as specified in note 16.G.b.6 above) (“the Motion to Publish a Tender Offer”). On January 28, 2015, the Court approved the motion by Hermetic Trust (1975) Ltd., in its role as a trustee for the bond holders (Series G and I) of the Company, an urgent motion to join the procedure in light of the expected implications of the motion to publish a tender offer on the rights of the bond holders of the Company and on the Company’s ability to serve its debt. On January 29, 2015 the Israeli Securities Authority filed its position on the motion to publish a tender offer, in which the Authority gave notice that the petitioners’ motion is not legally possible. At the same date the Company filed its response to the motion to publish a tender offer, as part of which it was claimed that the motion is bound to be rejected both due to lack of authority by the Court to discuss the motion as well as the fact that the motion contradicts the Companies Law. It was also claimed, that the motion adversely impacts the Company’s ability to raise capital.
|
G.
|
Legal proceeding regarding the Company’s financial position; the creditors’ arrangement in IDB Holdings and additional proceedings relating thereto (cont.)
|
|
2.
|
The creditors’ arrangement in IDB Holdings and additional proceedings relating thereto (cont.)
|
|
g.
|
(cont.)
|
|
h.
|
On February 9, 2015, the trustees to the arrangement filed to the Court a motion to instruct the distribution of considerations to the beneficiaries to the arrangement, despite the Company’s objection and the granting of a warrant preventing the Company from objecting to the settlement agreement with regard to the derived claims against IDB Holdings (for details regarding the aforesaid derived claims and the settlement agreement as specified, see note 23.C.1.d below). as part of the aforesaid motion, the Court was requested to approve the distribution of the remaining consideration to which the beneficiaries of the arrangement are entitled in accordance with the debt arrangement at IDB Holdings and which have not been distributed yet and are currently held in trust by the trustees to the arrangement (apart from the amounts paid in accordance with the settlement agreement with regard to the specified derived claims, subsequent to its approval, at an amount of NIS 7 million to the Company).
|
G.
|
Legal proceeding regarding the Company’s financial position; the creditors’ arrangement in IDB Holdings and additional proceedings relating thereto (cont.)
|
|
2.
|
The creditors’ arrangement in IDB Holdings and additional proceedings relating thereto (cont.)
|
|
i.
|
A motion to provide an injunction to copy the IT materials of IDB Holdings – further to the motion by the trustees to the arrangement, a legal adviser was appointed to conduct investigations and represent the trustees to the arrangement in legal proceedings of IDB Holdings (the legal firm Naor-Gersht) (‘the legal adviser” or “the investigators”). On January 21, 2015, a motion was filed with the Court to grant an injunction for the copying of IDB Holdings’ computer material by the aforesaid legal adviser, as part of which the Court was requested to grant an injunction ex parte, which allows the aforesaid legal adviser or anyone on his behalf to copy, through a skilled professional, all of the magnetic media relating to IDB Holdings saved on the computer servers at the offices of IDB Holdings, and this, inter alia, because of the mixed use of the servers of the Company and IDB Holdings. On February 1, 2015, the Court granted the motion as requested. Pursuant to a decision of the Company’s Audit Committee and Board of Directors, on February 4, 2015, the Company filed with the Court an urgent motion to clarify the Court’s decision with regard to the copying of IDB Holdings’ IT material with regard to the manner of its application, in light of that in order to fulfil the Court’s decision and to transfer to copy all of the material belonging to IDB Holdings, screening and filtering work must first be done between the material belonging to IDB Holdings and the material belonging to the Company (which, in the Company’s opinion, the aforesaid legal adviser is not entitled to receive).
|
G.
|
Legal proceeding regarding the Company’s financial position; the creditors’ arrangement in IDB Holdings and additional proceedings relating thereto (cont.)
|
|
2.
|
The creditors’ arrangement in IDB Holdings and additional proceedings relating thereto (cont.)
|
|
i.
|
(cont.)
|
|
j.
|
Irrevocable offer received from Dolphin Netherlands to raise capital for the Company – on January 1, 2015, after having received the recommendations of the independent committee on this matter, the Company’s Board of Directors resolved, on the basis of Dolphin Netherlands’ offer (which was in effect until that date), to raise capital, which has been received at the Company on December 29, 2014, that the Company will act to raise capital by way of a rights issue in accordance with the outline of the offer. For details regarding a rights issue performed by the Company in January-February 2015, in accordance with the outline of the stated offer, see note 15.B.(5) above. Following are the principles of the irrevocable offer received by the Company from Dolphin Netherlands for the raising of significant capital for the Company and the strengthening of its capital structure:
|
|
1.
|
The Company will immediately perform a rights issue of scope of approximately NIS 800 million (including the public’s share) (“the maximum immediate consideration”).
|
G.
|
Legal proceeding regarding the Company’s financial position; the creditors’ arrangement in IDB Holdings and additional proceedings relating thereto (cont.)
|
|
2.
|
The creditors’ arrangement in IDB Holdings and additional proceedings relating thereto (cont.)
|
|
J.
|
(cont.)
|
|
2.
|
As part of the rights issue, the following will be issued to the existing shareholders of the Company: (a) shares of the Company (“the rights offer shares”) and (b) share options (issued for no consideration) exercisable for shares of the Company (“the share options”). The maximum future consideration for the Company from the exercising of all of the share options will be approximately NIS 1.2 billion (including the public’s share).
|
|
3.
|
The price per share (“PPS”) of the rights offer shares will be according to accepted market conditions and following consultation with capital market experts.
|
|
4.
|
The share options will be divided into three series as follows:
|
|
a.
|
First series exercisable for a period of one year from the date of the rights offer at an exercise price equal to 110% of the PPS.
|
|
b.
|
Second series exercisable for a period of two years from the date of the rights offer at an exercise price equal to 120% of the PPS.
|
|
c.
|
Third series exercisable for a period of three years from the date of the rights offer at an exercise price equal to 130% of the PPS.
|
|
5.
|
Dolphin Netherlands’ undertaking to inject funds –
|
|
1.
|
Dolphin Netherlands (or another entity controlled by Mr. Eduardo Elsztain) undertakes to inject funds into the Company in an amount of not less than NIS 256 million and up to NIS 400 million, as follows:
|
|
a.
|
NIS 256 million, to be injected by exercising all of the rights relating to the rights offer shares issued to Dolphin in the rights issue.
|
|
b.
|
An additional investment (“the additional investment”) at an amount equaling – (a) the maximum immediate consideration less (b) the amounts actually received by the Company in the rights offer, apart from share options exercising, so long as the additional investment does not exceed an amount of NIS 144 million.
|
|
c.
|
The additional investment will be performed by acquiring additional rights in the rights issue and in case Dolphin Netherlands (or another entity controlled by Mr. Eduardo Elsztain) does not purchase additional rights to cover the full additional investment by acquiring additional rights in the rights offer, the amount remaining will be invested by participating at an additional rights issue performed by the Company, at a scope of no more than NIS 460 million.
|
|
2.
|
According to the Company’s request, Dolphin Netherlands will exercise share options from the first series in total consideration for the Company of up to NIS 150 million, under the condition that such a request is made within six months and twelve months from the date of the rights issue.
|
|
3.
|
Dolphin Netherlands will exercise all of the share options it receives in the rights offer, subject to fulfilling the following two cumulative conditions:
|
|
a.
|
The Company and its relevant lenders reach an agreement regarding the changing of covenants to which the Company is obligated with respect to these lenders.
|
|
b.
|
A control permit is obtained from the Commissioner of the Capital Market, Insurance and Savings for control of Clal Insurance Company Ltd., a subsidiary of Clal Holdings Insurance Enterprises (“Clal Insurance Company”), while Clal is controlled by the Company (with regards to the matter of the control of Clal Insurance Company, see also note 3.H.5.c. above).
|
|
4.
|
Any amount injected by Dolphin Netherlands into the Company in accordance with this subsection (5), will be on account of the amounts to which “the investor” has undertaken as part of the undertaking to participate in a rights offer by the Company in accordance with the debt arrangement at IDB Holdings.
|
G.
|
Legal proceeding regarding the Company’s financial position; the creditors’ arrangement in IDB Holdings and additional proceedings relating thereto (cont.)
|
|
2.
|
The creditors’ arrangement in IDB Holdings and additional proceedings relating thereto (cont.)
|
|
It should be further noted that prior to the making of the rights issue that was completed in February 2015, Dolphin Netherlands gave notice that insofar as the undertaking of Dolphin Netherlands to inject money into the Company as part of the terms of Dolphin’s offer would be performed (in full or in part) by another entity controlled by Mr. Eduardo Elsztain (“Elsztain corporation”) as stated above in the offer of Dolphin Netherlands, then the Elsztain corporation would agree to undertake, jointly and severally with Dolphin Netherlands, to perform all of the undertakings of Dolphin Netherlands pursuant to the debt arrangement in IDB Holdings and that any amount that would be injected by Dolphin Netherlands and/or the Elsztain corporation into the Company as part of the rights issue would be account of the amounts that the “investor” undertook as a party of the undertaking to participate in rights issues of the Company pursuant to the debt arrangement in IDB Holdings.
|
A.
|
Composition
|
Site dismantling and remediation (B)
|
Legal claims (C)
|
Contractual obligations and onerous contracts (D)
|
Provision for warranty and other provisions
|
Total
|
||||||||||||||||
NIS millions
|
||||||||||||||||||||
Balance as at January 1, 2014
|
21 | 83 | (1) | 207 | 28 | (1) | 339 | |||||||||||||
Provisions made during the year
|
1 | 35 | 162 | (2) | - | 198 | ||||||||||||||
Provisions utilized during the year
|
- | (2 | ) | (23 | ) | - | (25 | ) | ||||||||||||
Provisions reversed during the year
|
(1 | ) | (44 | ) | (75 | ) | (8 | ) | (128 | ) | ||||||||||
Changes from exchange rate differences
|
- | - | 11 | - | 11 | |||||||||||||||
Balance as at December 31, 2014
|
21 | 72 | 282 | 20 | 395 | |||||||||||||||
Non-current portion
|
21 | - | 196 | 18 | 235 | |||||||||||||||
Current portion
|
- | 72 | 86 | 2 | 160 | |||||||||||||||
Balances as at December 31, 2014:
|
21 | 72 | 282 | 20 | 395 | |||||||||||||||
Non-current portion
|
21 | 2 | 87 | 22 | (1) | 132 | ||||||||||||||
Current portion
|
- | 81 | (1) | 120 | 6 | 207 | ||||||||||||||
Balances as at December 31, 2013:
|
21 | 83 | 207 | 28 | 339 |
(1)
|
Reclassified, see note 1.F.1 above.
|
(2)
|
For details regarding a provision recorded by Shufersal as part of an updated business plan with respect to onerous rental contracts, for the leasing of commerce areas, which are not cancellable, see note 3.H.3.b above.
|
B.
|
Site dismantling and remediation - The Group companies are required to recognize certain costs of removal of assets and remediation of sites on which the assets were located. The aforesaid expenses are calculated based on the dismantling value in the current year, while taking into consideration the best assessment of future changes in price, inflation, etc., and are capitalized at a risk-free interest rate. The forecasts regarding the volume of the removed or constructed assets are updated according to expected changes in regulations and technological requirements.
|
C.
|
Legal claims - Legal claims are filed against Group companies in the ordinary course of business, and regarding part of the claims, motions are filed for approving them as class actions. Where provisions were necessary to cover the exposure resulting from said claims, provisions were included, which are adequate in the opinion of the managements of the Group companies, based on, inter alia, legal opinions regarding the chances of such claims. For details on claims, see note 23.C, and for details on contingent liabilities, see note 23.A.
|
D.
|
Other contractual obligations - Provisions for other contractual obligations include a number of obligations arising from a contractual liability or legislation, in respect of which there is a high component of uncertainty in terms of the timing and the amounts required in order to settle the liability.
|
As at December 31
|
||||||||
2014
|
2013
|
|||||||
NIS Millions
|
||||||||
Employee benefits presented as non-current liabilities
|
||||||||
Present value of unfunded obligations
|
104 | 75 | ||||||
Present value of funded obligations
|
449 | 422 | ||||||
Total present value of defined benefit obligations (post-employment)
|
553 | 497 | ||||||
Fair value of plan assets
|
392 | 366 | ||||||
Recognized liability for defined benefit obligations
|
161 | 131 | ||||||
Liability for grants
|
20 | 21 | ||||||
Liability for other long-term benefits
|
12 | 12 | ||||||
Liability for vacation and remuneration of employees
|
52 | 53 | ||||||
Total
|
245 | 217 | ||||||
* Plan assets comprise:
|
||||||||
Equity instruments
|
72 | 64 | ||||||
Government bonds
|
146 | 147 | ||||||
Corporate bonds
|
100 | 100 | ||||||
Cash and other
|
74 | 55 | ||||||
Total
|
392 | 366 | ||||||
Total employee benefits presented in the following sections:
|
||||||||
Assets designed for payment of benefits for employees
|
1 | 1 | ||||||
Accounts payable and credit balances
|
72 | 74 | ||||||
Long-term employee benefits
|
174 | 144 |
B.
|
In November 2014 The Israel Securities Authority published accounting staff position document number 21-1 relating to the existence of a deep market in high quality corporate bonds in Israel, for the determination of the discount rate of obligations for defined benefit denominated in NIS in accordance with IAS 19, Employee Benefits. According to the aforesaid position document, the proper implementation manner for transition from use of the rate of return of government bonds to a rate of return of high quality corporate bonds is on a prospective basis. As a result of the specified change in the discount rate, Adama recorded actuarial gains under other comprehensive income, amounting to USD 10 million. The Company’s share in the aforesaid actuarial gains recorded by Adama amounts to NIS 11 million.
|
C.
|
Significant changes to employee benefits at a consolidated company – Shufersal
|
|
1.
|
Change to measurement according to a discount rate derived from the returns on corporate bonds – as a result from the change in the discount rate as specified in section B. above. As a result of the specified change, a decrease occurred in the liability (gross) of Shufersal with respect to a defined benefit plan totaling NIS 29 million (the Company’s share in the aforesaid amount is NIS 10 million).
|
|
2.
|
The increasing of the minimum wage in Israel – in January 2015 an amendment to the Minimum Wage Law was approved, according to which the minimum wage will be increased to NIS 5,000 per month in three stages: on April 1, 2015 the minimum wage will be increased to NIS 4,650, on August 1, 2016 the minimum wage will be increased to NIS 4,825 and on January 1, 2017 the minimum wage will be increased to NIS 5,000. As of April 2016 the minimum wage will be 47.5% of the average wage in the market at April in each relevant year. Shufersal estimates, that the increase of the minimum wage as stated may have an adverse effect on its business results and cause an addition to its payroll expenses. As a result of the aforesaid increase in the minimum wage, in increase occurred in the liability (gross) of Shufersal with respect to a defined benefit in the amount of NIS 4 million (the Company’s share in the aforesaid amount was NIS 1 million).
|
|
3.
|
Update of employee turnover rate – in 2014 Shufersal updated the turnover rate, including the expected rate of employees leaving in a manner that entitles them to severance supplements by law. As a result, an increase occurred in the liability (gross) of Shufersal with respect to a defined benefit plan, at an amount of NIS 18 million (the Company’s share in the stated amount is NIS 7 million).
|
D.
|
Voluntary retirement plan in Cellcom
|
December 31
|
||||||||
2014
|
2013
|
|||||||
NIS millions
|
||||||||
Accrued expenses - interest
|
491 | 765 | ||||||
Accrued expenses - other
|
131 | 124 | (1) | |||||
Liabilities to employees
|
344 | 349 | ||||||
Institutions
|
62 | 58 | ||||||
Advances from purchasers of apartments
|
204 | 311 | ||||||
Provisions for expenses
|
90 | 68 | ||||||
Advance payments from customers
|
367 | 318 | ||||||
Advanced revenues
|
77 | 84 | ||||||
Other accounts payable and credit balances
|
146 | 281 | ||||||
1,912 | 2,358 |
Note 20 - Trade Payables
|
December 31
|
||||||||
2014
|
2013
|
|||||||
NIS millions
|
||||||||
Outstanding debts
|
2,166 | 1,982 | ||||||
Post-dated checks
|
338 | 309 | ||||||
2,504 | 2,291 |
A.
|
Management of financial risks
|
|
-
|
Credit risks
|
|
-
|
Market risks (comprised of index risk, currency risk, interest risk and other price risk)
|
|
-
|
Liquidity risks
|
|
-
|
Operating risks
|
A.
|
Management of financial risks (cont.)
|
|
1.
|
Risk management policy of the Company and its wholly-owned companies (excluding IDB Tourism)
|
|
Market risks - The Company is directly exposed to market risks as a result of changes in the tradable value of its holdings, changes in the consumer price index, and changes in interest rates, which may affect its assets and liabilities and impair the business results, shareholders’ equity, cash balances and cash flows, and the value of the Company. Considering the situation of the Company and the restrictions applying to it, the ability of the Company to manage market risks has significantly decreased, since as at the reporting date the Company is not able to engage in new hedge contracts.
|
|
The Company is exposed to the various market risks, also indirectly, due to the impact thereof on its investee companies.
|
A.
|
Management of financial risks (cont.)
|
|
1.
|
Risk management policy of the Company and its wholly-owned companies (excluding IDB Tourism) (cont.)
|
A.
|
Management of financial risks (cont.)
|
|
1.
|
Risk management policy of the Company and its wholly-owned companies (excluding IDB Tourism) (cont.)
|
|
2.
|
Risk management policy of subsidiaries
|
|
a.
|
Discount Investments
|
A.
|
Management of financial risks (cont.)
|
|
a.
|
Discount Investments (cont.)
|
·
|
Expected dividends from investee companies - in such respect, Discount Investments monitors the profitability of the investee companies, the available cash flows thereof and their ability to distribute dividend.
|
·
|
Sale of holdings in investee companies - it should be noted, that Discount Investments controls major public companies, leading their fields of operation, whose shares are highly tradable, and the holdings of Discount Investments therein are not pledged under specific pledge. Discount Investments is able to realize limited percentages of the share capital of investee companies thereof, and is also able to realize all or most of its holding in the shares of one of the investee companies.
|
A.
|
Management of financial risks (cont.)
|
|
a.
|
Discount Investments (cont.)
|
·
|
Debt recycling - Discount Investments examines periodically the possibility of enlarging an existing bonds series, replacing existing bonds series of short duration with existing bonds series of longer duration (similar to the replacement carried out in January 2014, as detailed in Note 16.F.1.a. above), or issuing a new bonds series. In addition and if necessary, Discount Investments will act in order to raise loans from financial institutions. Recently the market value of Discount Investments main assets has declined (mainly as a result of the competitive environment in which they operate) and as a result the leverage level of Discount Investments and the yields to maturity on its bonds have increased, which may limit its ability to refinance its debt as stated.
|
|
b.
|
Cellcom
|
A.
|
Management of financial risks (cont.)
|
|
c.
|
Property & Building
|
|
d.
|
Shufersal
|
A.
|
Management of financial risks (cont.)
|
|
e.
|
Elron
|
|
3.
|
As at December 31, 2013, the investments in Credit Suisse shares and in Clal Holdings Insurance Enterprises were classified as held for sale (in January 2014, the investment in Credit Suisse was realized in full, as stated in note 3.H.4.c above). In addition, the assets and liabilities of Given were classified as a realization group held for sale (the realization of Given was completed in February 2014, as stated in note 3.H.6.a above). Therefore, as at December 31, 2013, the investments in Credit Suisse and in Clal Holdings Insurance Enterprises and Given’s assets and liabilities were not included in this note.
|
B.
|
Credit risks
|
|
1.
|
The maximum exposure to credit risk on the date of the Statement of Financial Position was as follows:
|
As of December 31
|
||||||||
2014
|
2013
|
|||||||
NIS millions
|
||||||||
Non-current assets
|
||||||||
Other investments*
|
151 | 51 | ||||||
Loans, deposits, restricted deposits and debit balances
|
140 | 81 | ||||||
Long-term trade receivables
|
476 | 512 | ||||||
Current assets
|
||||||||
Current investments, excluding derivatives*
|
2,121 | 2,163 | ||||||
Short-term loans, deposits and pledged and restricted deposits
|
514 | 667 | ||||||
Financial receivables
|
132 | 212 | ||||||
Trade receivables
|
2,712 | 3,059 | ||||||
Cash and cash equivalents
|
3,578 | 6,313 | ||||||
Derivatives
|
||||||||
Exchange rate forward contracts
|
1 | 3 | ||||||
Index forward contracts
|
5 | 8 | ||||||
9,830 | 13,069 |
|
*
|
Excluding shares, participation certificates in trust funds and exchange trade funds.
|
|
**
|
In addition, the Group has loans granted to investee companies accounted for by the equity method, amounting to NIS 540 million and NIS 642 million as at December 31, 2014 and 2013, respectively. For additional details regarding loans to affiliated companies, see note 3.A.2.
|
B.
|
Credit risks (cont.)
|
|
2.
|
The maximum exposure to credit risk due to trade receivables, accounts receivable, loans and other investments, by geographic regions and according to their book value, was as follows:
|
As of December 31
|
||||||||
2014
|
2013
|
|||||||
NIS millions
|
||||||||
Israel
|
9,005 | 12,495 | ||||||
United States
|
707 | 540 | ||||||
United Kingdom
|
106 | 8 | ||||||
Other regions
|
12 | 26 | ||||||
9,830 | 13,069 |
|
3.
|
The maximum exposure to credit risk due to trade receivables, accounts receivable, loans and other investments, by counterparties, according to their book value, was as follows:
|
December 31
|
||||||||
2014
|
2013
|
|||||||
NIS millions
|
||||||||
Financial corporations
|
4,117 | 7,041 | ||||||
End customers
|
1,703 | 2,078 | ||||||
Short term loans and bonds issued by the Israeli government
|
1,469 | 1,483 | ||||||
Credit card companies
|
1,039 | 1,095 | ||||||
Bonds issued by other corporations*
|
651 | 678 | ||||||
Accounts receivable, investments and other loans
|
405 | 296 | ||||||
Communication operators
|
206 | 172 | ||||||
Retail customers
|
100 | 111 | ||||||
Corporations
|
44 | 46 | ||||||
Distributors and agents
|
25 | 17 | ||||||
Private customers
|
23 | 19 | ||||||
Lessees
|
21 | 22 | ||||||
Purchase vouchers
|
17 | 10 | ||||||
Wholesale customers
|
10 | 1 | ||||||
9,830 | 13,069 |
*
|
As at December 31, 2014 and December 31, 2013, bonds at an amount of NIS 647 million and NIS 668 million, respectively, are rated A- or higher.
|
B.
|
Credit risks (cont.)
|
|
4.
|
The following is the aging of debts of trade receivables, accounts receivable, loans and other investments:
|
December 31
|
||||||||||||||||
2014
|
2013
|
|||||||||||||||
Gross
|
Provision for doubtful debts
|
Gross
|
Provision for doubtful debts
|
|||||||||||||
NIS millions
|
||||||||||||||||
Not past due
|
9,679 | (30 | ) | 12,883 | (21 | ) | ||||||||||
0 - 30 days past due
|
34 | (1 | ) | 33 | (1 | ) | ||||||||||
31 - 120 days past due
|
16 | (4 | ) | 18 | (2 | ) | ||||||||||
Above 120 days past due
|
369 | (233 | ) | 445 | (286 | ) | ||||||||||
10,098 | (268 | ) | 13,379 | (310 | ) | |||||||||||
Net balance
|
(9,83 | ) | 13,069 |
|
5.
|
The following are the changes in the provision for impairment in respect of trade receivables and accounts receivable balances and loans granted during the year:
|
For the year ended
December 31
|
||||||||
2014
|
2013
|
|||||||
NIS millions
|
||||||||
Balance at the beginning of the year
|
310 | 426 | ||||||
Increase in expenses from doubtful debts
|
37 | 104 | ||||||
Bad debts written off
|
(79 | ) | (152 | ) | ||||
Cessation of consolidation of investee companies, net
|
- | (68 | ) | |||||
Balance at the end of year
|
268 | 310 |
As at December 31, 2014 | ||||||||||||||||||||||||||||||||
Carrying amount (1) | Forecast cash flow (2) | First year | Second year | Third year | Forth year | Fifth year | Over 5 years | |||||||||||||||||||||||||
NIS millions | ||||||||||||||||||||||||||||||||
Non-derivative financial liabilities
|
||||||||||||||||||||||||||||||||
Bonds(3)
|
22,451 | (27,099 | ) | (4,400 | ) | (4,208 | ) | (4,520 | ) | (2,866 | ) | (1,861 | ) | (9,244 | ) | |||||||||||||||||
Loans from banks
|
4,462 | (5,301 | ) | (1,076 | ) | (1,279 | ) | (546 | ) | (398 | ) | (168 | ) | (1,834 | ) | |||||||||||||||||
Host contract in hybrid financial instrument in respect of non-recourse loan(4)
|
3,162 | (5,444 | ) | (60 | ) | (264 | ) | (263 | ) | (4,857 | ) | - | - | |||||||||||||||||||
Loans from others
|
584 | (652 | ) | (42 | ) | (39 | ) | (87 | ) | (131 | ) | (26 | ) | (327 | ) | |||||||||||||||||
Liabilities in respect of construction
|
103 | (103 | ) | (35 | ) | (7 | ) | (55 | ) | (6 | ) | - | - | |||||||||||||||||||
Other liabilities
|
125 | (125 | ) | - | (113 | ) | - | - | (4 | ) | (8 | ) | ||||||||||||||||||||
Overdraft
|
80 | (80 | ) | (80 | ) | - | - | - | - | - | ||||||||||||||||||||||
Short-term loans from banks
|
266 | (266 | ) | (266 | ) | - | - | - | - | - | ||||||||||||||||||||||
Short-term loans from others
|
14 | (14 | ) | (14 | ) | - | - | - | - | - | ||||||||||||||||||||||
Financial accounts payable and credit balances
|
635 | (635 | ) | (635 | ) | - | - | - | - | - | ||||||||||||||||||||||
Trade payables
|
2,504 | (2,504 | ) | (2,504 | ) | - | - | - | - | - | ||||||||||||||||||||||
Financial liabilities - Derivative instruments
|
||||||||||||||||||||||||||||||||
CPI forward contracts
|
62 | (62 | ) | (49 | ) | (9 | ) | - | (4 | ) | - | - | ||||||||||||||||||||
Other derivatives
|
1 | (1 | ) | (1 | ) | - | - | - | - | - | ||||||||||||||||||||||
Total
|
34,449 | (42,286 | ) | (9,162 | ) | (5,919 | ) | (5,471 | ) | (8,262 | ) | (2,059 | ) | (11,413 | ) |
(1)
|
The carrying amount includes current maturities and accrued interest as at December 31, 2014. The forecast cash flow includes all future interest payments.
|
(2)
|
The forecast cash flow was calculated based on the known CPI, interest rate and exchange rate as at December 31, 2014. The forecast cash flow does not include expected effects of changes in the CPI, exchange rates and interest rates.
|
(3)
|
See note 35.C below regarding the bond exchange made by Cellcom subsequent to date of the Statement of Financial Position.
|
(4)
|
Represents the contractual cash flows of the non-recourse loan, which is secured by and repayable through shares of Adama, and includes Koor’s obligations to indemnify ChemChina in respect of business taxes that ChemChina will be charged, in accordance with Chinese law, in respect of interest payments on the aforementioned loan (to the extent that there will be no tax exemption on such taxes), see note 16.F.1.d. above.
|
As at December 31, 2013 | ||||||||||||||||||||||||||||||||
Carrying amount(1) | Forecast cash flow (2) | First year | Second year | Third year | Fourth year | Fifth year | Over 5 years | |||||||||||||||||||||||||
NIS millions | ||||||||||||||||||||||||||||||||
Non-derivative financial liabilities
|
||||||||||||||||||||||||||||||||
Bonds(3)
|
25,875 | (30,974 | ) | (5,904 | ) | (4,629 | ) | (4,421 | ) | (4,272 | ) | (2,587 | ) | (9,161 | ) | |||||||||||||||||
Loans from banks
|
5,410 | (6,312 | ) | (1,878 | ) | (808 | ) | (1,079 | ) | (512 | ) | (362 | ) | (1,673 | ) | |||||||||||||||||
Liabilities for the transfer of shares of Makhteshim Agan(4)
|
3,664 | (4,871 | ) | (14 | ) | (54 | ) | (235 | ) | (234 | ) | (4,334 | ) | - | ||||||||||||||||||
Loans from others
|
460 | (549 | ) | (114 | ) | (34 | ) | (32 | ) | (80 | ) | (124 | ) | (165 | ) | |||||||||||||||||
Liabilities in respect of construction and investment property
|
132 | (132 | ) | (53 | ) | (55 | ) | (19 | ) | - | (2 | ) | (3 | ) | ||||||||||||||||||
Other liabilities
|
125 | (125 | ) | - | (8 | ) | (104 | ) | - | (5 | ) | (8 | ) | |||||||||||||||||||
Overdraft
|
78 | (78 | ) | (78 | ) | - | - | - | - | - | ||||||||||||||||||||||
Short-term loans from banks
|
601 | (601 | ) | (601 | ) | - | - | - | - | - | ||||||||||||||||||||||
Short-term loans from others
|
18 | (18 | ) | (18 | ) | - | - | - | - | - | ||||||||||||||||||||||
Financial accounts payable and credit balances
|
662 | * | * | (662) | * | (662) | - | - | - | - | - | |||||||||||||||||||||
Trade payables
|
2,291 | (2,291 | ) | (2,291 | ) | - | - | - | - | - | ||||||||||||||||||||||
Financial liabilities - Derivative instruments
|
||||||||||||||||||||||||||||||||
CPI forward contracts
|
75 | (75 | ) | (64 | ) | (10 | ) | (1 | ) | - | - | - | ||||||||||||||||||||
FX Options and forward contracts
|
19 | (19 | ) | (19 | ) | - | - | - | - | - | ||||||||||||||||||||||
Non-banking derivative financial instruments
|
18 | (18 | ) | (18 | ) | - | - | - | - | - | ||||||||||||||||||||||
Total
|
39,428 | (46,725 | ) | (11,714 | ) | (5,598 | ) | (5,891 | ) | (5,098 | ) | (7,414 | ) | (11,010 | ) |
*
|
Reclassified.
|
(1)
|
The carrying amount includes current maturities and accrued interest as at December 31, 2013. The forecast cash flow includes all interest payments.
|
(2)
|
The anticipated cash flow was calculated on the basis of the CPI, interest and exchange rates known as at December 31, 2013. The anticipated flows do not include expected effects of changes in the CPI, exchange rates and interest.
|
(3)
|
The cash flow includes the amount of the early redemption of Koor’s bonds, in accordance with the amendment to the trust deeds, as at December 31, 2013, see note 3.H.4.c. above.
|
(4)
|
Represents the contractual cash flows of the non-recourse loan, which is secured by and repayable through shares of Adama, and includes Koor’s obligations to indemnify ChemChina in respect of business taxes that ChemChina will be charged, in accordance with Chinese law, in respect of interest payments on the aforementioned loan (to the extent that there will be no tax exemption on such taxes), see note 16.F.1.d. above.
|
As at December 31, 2014
|
||||||||||||||||||||||||
CPI-
linked
|
Dollar-
linked
|
Other currency-
linked
|
Unlinked
|
Non-monetary
items(1)
|
Total
|
|||||||||||||||||||
NIS millions
|
||||||||||||||||||||||||
Assets(2)
|
||||||||||||||||||||||||
Investments in investee companies accounted for by the equity method
|
- | - | - | - | 3,753 | (3) | 3,753 | |||||||||||||||||
Other investments, including derivatives
|
4 | - | 98 | 53 | 1,967 | 2,122 | ||||||||||||||||||
Loans, restricted and pledged deposits and debit balances
|
20 | 262 | - | 18 | 11 | 311 | ||||||||||||||||||
Fixed assets
|
- | - | - | - | 5,559 | 5,559 | ||||||||||||||||||
Investment property
|
- | - | - | - | 11,175 | 11,175 | ||||||||||||||||||
Assets designated for payment of employee benefits
|
- | - | - | - | 1 | 1 | ||||||||||||||||||
Long-term trade receivables and accounts receivable
|
- | - | - | 1,082 | - | 1,082 | ||||||||||||||||||
Non-current inventory
|
- | - | - | - | 375 | 375 | ||||||||||||||||||
Deferred expenses
|
- | - | - | - | 284 | 284 | ||||||||||||||||||
Deferred tax assets
|
- | - | - | - | 53 | 53 | ||||||||||||||||||
Intangible assets
|
- | - | - | - | 4,782 | 4,782 | ||||||||||||||||||
Current investments, including derivatives
|
858 | 1 | - | 1,264 | 1,194 | 3,317 | ||||||||||||||||||
Short-term loans and deposits
|
5 | 245 | - | 108 | - | 358 | ||||||||||||||||||
Accounts receivable and debit balances
|
10 | 25 | 3 | 90 | 252 | 380 | ||||||||||||||||||
Current tax assets
|
- | - | - | - | 46 | 46 | ||||||||||||||||||
Trade receivables
|
- | 179 | 75 | 1,852 | - | 2,106 | ||||||||||||||||||
Inventory
|
- | - | - | - | 851 | 851 | ||||||||||||||||||
Inventory of buildings for sale
|
- | - | - | - | 691 | 691 | ||||||||||||||||||
Assets held for sale
|
- | - | - | - | 5 | 5 | ||||||||||||||||||
Cash and cash equivalents
|
- | 373 | 56 | 3,149 | - | 3,578 | ||||||||||||||||||
Total assets
|
897 | 1,085 | 232 | 7,616 | 30,999 | 40,829 | ||||||||||||||||||
Liabilities(2)
|
||||||||||||||||||||||||
Bonds
|
17,810 | - | - | 4,214 | - | 22,024 | ||||||||||||||||||
Loans from banks and other financial liabilities
|
1,458 | 2,101 | - | 1,687 | - | 5,246 | ||||||||||||||||||
Hybrid financial instrument in respect of non-recourse loan (4)
|
- | 3,090 | - | - | - | 3,090 | ||||||||||||||||||
Financial liabilities, presented by fair value
|
61 | 2 | - | - | - | 63 | ||||||||||||||||||
Other liabilities
|
- | - | - | 3 | 172 | 175 | ||||||||||||||||||
Non-current provisions
|
- | - | - | - | 235 | 235 | ||||||||||||||||||
Deferred tax liabilities
|
- | - | - | - | 1,508 | 1,508 | ||||||||||||||||||
Employee benefits
|
- | - | - | - | 174 | 174 | ||||||||||||||||||
Current credit from banking corporations and others
|
- | - | - | 280 | - | 280 | ||||||||||||||||||
Creditors and credit balances
|
362 | 88 | 2 | 637 | 757 | 1,846 | ||||||||||||||||||
Trade payables
|
- | 310 | 60 | 2,134 | - | 2,504 | ||||||||||||||||||
Current tax liabilities
|
- | - | - | - | 133 | 133 | ||||||||||||||||||
Overdraft
|
- | 66 | 14 | - | - | 80 | ||||||||||||||||||
Current provisions
|
- | - | - | - | 160 | 160 | ||||||||||||||||||
Total liabilities
|
19,691 | 5,657 | 76 | 8,955 | 3,139 | 37,518 | ||||||||||||||||||
Net balance as at December 31, 2014
|
(18,794 | ) | (4,572 | ) | 156 | (1,339 | ) | 27,860 | 3,311 |
(1)
|
Including shares, participation certificates in mutual funds, exchange-traded notes and monetary items excluded from the scope of IFRS 7.
|
(2)
|
Non-current assets and liabilities in this table include the current maturities in respect thereof.
|
(3)
|
Including loans totaling NIS 369 million and NIS 28 million, linked to the exchange rates of the dollar and the euro, respectively.
|
As at December 31, 2013
|
||||||||||||||||||||||||
CPI-
linked
|
Dollar-
linked
|
Other currency-
linked
|
Unlinked
|
Non-monetary
items(1)
|
Total
|
|||||||||||||||||||
NIS millions
|
||||||||||||||||||||||||
Assets(2)
|
||||||||||||||||||||||||
Investments in investee companies accounted for by the equity method
|
- | - | - | - | 3,749 | (5)(3), | 3,749 | |||||||||||||||||
Other investments, including derivatives
|
6 | - | - | 51 | 298 | 355 | ||||||||||||||||||
Loans and debit balances
|
23 | 14 | - | 55 | 12 | 104 | ||||||||||||||||||
Fixed assets
|
- | - | - | - | 5,488 | 5,488 | ||||||||||||||||||
Investment property
|
- | - | - | - | 9,827 | (6) | 9,827 | |||||||||||||||||
Assets designated for payment of employee benefits
|
- | - | - | - | 1 | 1 | ||||||||||||||||||
Long-term trade receivables and accounts receivable
|
- | - | 1,390 | - | 1,390 | |||||||||||||||||||
Non-current inventory
|
- | - | - | - | 374 | 374 | ||||||||||||||||||
Deferred expenses
|
- | - | - | - | 276 | 276 | ||||||||||||||||||
Deferred tax assets
|
- | - | - | - | 157 | 157 | ||||||||||||||||||
Intangible assets
|
- | - | - | - | 5,394 | (5) | 5,394 | |||||||||||||||||
Current investments, including derivatives
|
996 | 3 | - | 1,169 | 814 | 2,982 | ||||||||||||||||||
Short-term loans and deposits
|
20 | 118 | - | 518 | - | 656 | ||||||||||||||||||
Accounts receivable and debit balances
|
15 | 113 | 3 | 81 | 243 | 455 | ||||||||||||||||||
Current tax assets
|
- | - | - | - | 29 | 29 | ||||||||||||||||||
Trade receivables
|
4 | 120 | 14 | 2,043 | - | 2,181 | ||||||||||||||||||
Inventory
|
- | - | - | - | 809 | 809 | ||||||||||||||||||
Inventory of buildings for sale
|
- | - | - | - | 849 | 849 | ||||||||||||||||||
Assets held for sale
|
- | 605 | 95 | 18 | 4,061 | (5) | 4,779 | |||||||||||||||||
Cash and cash equivalents
|
- | 1,078 | 27 | 5,208 | - | 6,313 | ||||||||||||||||||
Total assets
|
1,064 | 2,051 | 139 | 10,533 | 32,381 | 46,168 | ||||||||||||||||||
Liabilities(2)
|
||||||||||||||||||||||||
Bonds
|
19,418 | - | - | 4,701 | - | 24,119 | ||||||||||||||||||
Loans from banks and other financial liabilities
|
1,352 | 2,198 | - | 2,509 | - | 6,059 | ||||||||||||||||||
Hybrid financial instrument in respect of non-recourse loan (4)
|
- | 3,057 | - | - | - | 3,057 | ||||||||||||||||||
Financial liabilities, presented by fair value
|
11 | - | - | - | - | 11 | ||||||||||||||||||
Other liabilities
|
- | - | - | - | (5),(6)206 | 206 | ||||||||||||||||||
Non-current provisions
|
- | - | - | - | (5)132 | 132 | ||||||||||||||||||
Deferred tax liabilities
|
- | - | - | - | 1,456 | 1,456 | ||||||||||||||||||
Employee benefits
|
- | - | - | - | 144 | 144 | ||||||||||||||||||
Current credit from banking corporations and others
|
742 | 18 | 431 | 508 | - | 1,699 | ||||||||||||||||||
Financial liabilities presented at fair value
|
64 | 24 | - | - | 13 | 101 | ||||||||||||||||||
Creditors and credit balances
|
630 | (5) 67 | 4 | 704 | (5) 868 | 2,273 | ||||||||||||||||||
Trade payables
|
- | 219 | 25 | 2,047 | - | 2,291 | ||||||||||||||||||
Current tax liabilities
|
- | - | - | - | 155 | 155 | ||||||||||||||||||
Overdraft
|
- | 59 | 17 | 2 | - | 78 | ||||||||||||||||||
Current provisions
|
- | - | - | - | (5) 207 | 207 | ||||||||||||||||||
Liabilities of disposal groups and other liabilities classified as held for sale
|
- | 58 | 23 | 42 | 42 | 165 | ||||||||||||||||||
Total liabilities
|
22,217 | 5,700 | 500 | 10,513 | 3,223 | 42,153 | ||||||||||||||||||
Net balance as at December 31, 2014
|
(21,153 | ) | (3,649 | ) | (361 | ) | 20 | 29,158 | 4,015 |
(1)
|
Including shares, participation certificates in mutual funds, exchange-traded notes and monetary items excluded from the scope of IFRS 7.
|
(2)
|
Non-current assets in this table include the current maturities in respect thereof.
|
(3)
|
Including loans totaling NIS 314 million, NIS 122 million and NIS 64 million, linked to the exchange rates of the dollar, the pound sterling and the euro, respectively.
|
(4)
|
Regarding the right of Koor and its consolidated company to repay the loan by way of a transfer of shares of Adama, see note 16.F.1.d above.
|
(5)
|
Reclassified; see note 1.F.1 above.
|
(6)
|
Retrospective implementation of IFRIC 21, Levies – see notes 1.E.6.a and 1.F.1 above.
|
|
1.
|
Sensitivity analysis
|
As at December 31, 2014
|
||||||||||||||||||||
Effect on profit and loss
|
Effect on equity
|
|||||||||||||||||||
Rate of change
|
Effect on
total profit (loss)
|
Effect on profit attributed to the shareholders
|
Effect on
total equity
|
Effect on equity attributed to the shareholders
|
||||||||||||||||
%
|
NIS millions
|
|||||||||||||||||||
CPI
|
1 | (144 | ) | (90 | ) | (144 | ) | (90 | ) | |||||||||||
Dollar
|
5 | (155 | ) | (111 | ) | (155 | ) | (111 | ) | |||||||||||
CPI
|
2 | (290 | ) | (181 | ) | (290 | ) | (181 | ) | |||||||||||
Dollar
|
10 | (310 | ) | (221 | ) | (310 | ) | (221 | ) | |||||||||||
CPI
|
(1 | ) | 144 | 90 | 144 | 90 | ||||||||||||||
Dollar
|
(5 | ) | 155 | 111 | 155 | 111 | ||||||||||||||
CPI
|
(2 | ) | 290 | 181 | 290 | 181 | ||||||||||||||
Dollar
|
(10 | ) | 310 | 221 | 310 | 221 |
As at December 31, 2013
|
||||||||||||||||||||
Effect on profit and loss
|
Effect on equity
|
|||||||||||||||||||
Rate of change
|
Effect on
total profit (loss)
|
Effect on profit attributed to the shareholders
|
Effect on
total equity
|
Effect on equity attributed to the shareholders
|
||||||||||||||||
%
|
NIS millions
|
|||||||||||||||||||
CPI
|
1 | (172 | ) | (102 | ) | (172 | ) | (102 | ) | |||||||||||
Dollar
|
5 | (131 | ) | (71 | ) | (131 | ) | (71 | ) | |||||||||||
Swiss Franc
|
5 | (21 | ) | (10 | ) | (21 | ) | (10 | ) | |||||||||||
CPI
|
2 | (345 | ) | (203 | ) | (345 | ) | (203 | ) | |||||||||||
Dollar
|
10 | (266 | ) | (143 | ) | (266 | ) | (143 | ) | |||||||||||
Swiss Franc
|
10 | (43 | ) | (21 | ) | (43 | ) | (21 | ) | |||||||||||
CPI
|
(1 | ) | 172 | 102 | 172 | 102 | ||||||||||||||
Dollar
|
(5 | ) | 133 | 71 | 133 | 71 | ||||||||||||||
Swiss Franc
|
(5 | ) | 21 | 10 | 21 | 10 | ||||||||||||||
CPI
|
(2 | ) | 345 | 203 | 345 | 203 | ||||||||||||||
Dollar
|
(10 | ) | 268 | 143 | 268 | 143 | ||||||||||||||
Swiss Franc
|
(10 | ) | 43 | 21 | 43 | 21 |
|
Notes to the above sensitive analysis:
|
(1)
|
The analysis was performed in respect of monetary financial instruments only. Shares, participation certificates in mutual funds and exchange-traded notes were excluded from this sensitivity analysis.
|
(2)
|
The analysis including effects of financial derivatives.
|
(3)
|
Changes in exchange rates of other currencies did not have a material effect on equity and profit or loss.
|
|
2.
|
Positions in derivatives
|
|
a.
|
As at December 31, 2014, in NIS millions:
|
|
CPI / NIS
|
|||||||||||||||
Nominal value
|
Fair value
|
Nominal value
|
Fair value
|
|||||||||||||
Up to one year
|
More than one year
|
|||||||||||||||
Long
|
||||||||||||||||
1. Future contracts for hedging purposes* – not eligible for hedge accounting
|
3,053 | (49 | ) | 700 | (14 | ) | ||||||||||
Future contract - SWAP**
|
7 | 1 | 22 | 4 |
*
|
These contracts are designed to hedge CPI-linked liabilities, so that if the CPI actually increases by more than the index stipulated in the contract, the Group will receive the difference; in the opposite case, the Group will pay the difference.
|
**
|
This future contract swaps the CPI-linked liability cash flow for a nominal Shekel cash flow at fixed interest.
|
USD / NIS
|
||||||||||||||||
Nominal value
|
Fair value
|
|||||||||||||||
LONG
|
SHORT
|
LONG
|
SHORT
|
|||||||||||||
2. Derivatives for hedging purposes – not eligible for hedge accounting
|
||||||||||||||||
Up to one year
|
||||||||||||||||
Future purchases of dollars
|
18 | - | - | - | ||||||||||||
CALL options
|
25 | - | 1 | - |
|
b.
|
As at December 31, 2013, in NIS millions
|
CPI / NIS
|
||||||||||||||||
Nominal value
|
Fair value
|
Nominal value
|
Fair value
|
|||||||||||||
Up to one year
|
More than one year
|
|||||||||||||||
LONG
|
||||||||||||||||
1. Future contracts for hedging purposes* – not eligible for hedge accounting
|
2,615 | (64 | ) | 653 | (11 | ) | ||||||||||
Future contract - SWAP**
|
7 | 1 | 29 | 6 |
*
|
These contracts are designed to hedge CPI-linked liabilities, so that if the CPI actually increases by more than the index stipulated in the contract, the Group will receive the difference; in the opposite case, the Group will pay the difference.
|
**
|
This future contract swaps the CPI-linked liability cash flow for a nominal Shekel cash flow at fixed interest.
|
USD / NIS
|
||||||||||||||||
Nominal value
|
Fair value
|
|||||||||||||||
LONG
|
SHORT
|
LONG
|
SHORT
|
|||||||||||||
2. Derivatives for hedging purposes – not eligible for hedge accounting
|
||||||||||||||||
Future purchases of dollars
|
92 | - | (1 | ) | - | |||||||||||
CALL options
|
231 | - | 1 | - | ||||||||||||
Cross Currency Swap
|
145 | - | (12 | ) | - | |||||||||||
Derivatives for hedging purposes – eligible for hedge accounting
|
||||||||||||||||
Future purchases of dollars
|
90 | - | (6 | ) | - |
Euro / NIS
|
||||
Up to one year
|
||||
Nominal value
|
Fair value
|
|||
LONG
|
SHORT
|
LONG
|
SHORT
|
|
3. Derivatives for hedging purposes:
|
||||
Future purchases of Euro– not eligible for hedge accounting
|
4
|
-
|
-
|
-
|
As of December 31
|
||||||||
2014
|
2013
|
|||||||
NIS millions
|
||||||||
Instruments at fixed interest
|
||||||||
Financial assets*
|
5,919 | 8,403 | ||||||
Financial liabilities
|
(25,799 | ) | (28,127 | ) | ||||
(19,880 | ) | (19,724 | ) | |||||
Instruments at variable interest
|
||||||||
Financial assets
|
106 | 115 | ||||||
Financial liabilities**
|
(1,617 | ) | (3,563 | ) | ||||
(1,511 | ) | (3,448 | ) |
**
|
Not including the non-recourse loan provided to Koor by a Chinese bank, which is repayable with Adama shares – see note 16.F.1.d above.
|
|
2.
|
Sensitivity analysis of the annual anticipated cash flow for instruments at variable interest rates
|
As at December 31
|
||||||||||||||||||||||||||||||||
2014
|
2013
|
|||||||||||||||||||||||||||||||
Profit (loss)
|
Equity
|
Profit (loss)
|
Equity
|
|||||||||||||||||||||||||||||
Increase
|
Decrease
|
Increase
|
Decrease
|
Increase
|
Decrease
|
Increase
|
Decrease
|
|||||||||||||||||||||||||
Instruments at variable rate – sensitivity of cash flow, net
|
(16 | ) | 16 | (16 | ) | 16 | (9 | ) | 16 | (9 | ) | 16 |
|
*
|
Not including the effect of the change in interest rate on the non-recourse loan Koor received from a Chinese bank, which is repayable with Adama shares – see note 16.F.1.d above.
|
|
3.
|
Following are the effects of changes in interest rates on equity, for fixed interest rate instruments measured at fair value
|
December 31,
|
||||
2014
|
2013
|
|||
Effect on
total equity and total profit or loss
|
Effect on share of
shareholders
|
Effect on
total equity and total profit or loss
|
Effect on share of
share
holders
|
|
NIS millions
|
||||
Absolute Increase of 1% in the interest rate
|
(106)
|
(54)
|
(87)
|
(40)
|
2014
|
|||||||||||||||||||||
Fair value(5)
|
|
||||||||||||||||||||
Carrying amount
|
Level 1
|
Level 2
|
Level 3
|
Total
|
Capitalization interest rate used in the calculation of fair value | ||||||||||||||||
Financial Assets
|
|||||||||||||||||||||
Long-term trade receivables(1)
|
476 | - | - | 476 | 476 |
5.20
|
|||||||||||||||
Financial liabilities
|
|||||||||||||||||||||
Bonds(2),(3)
|
(22,451 | ) | (22,214 | ) | (19 | ) | - | (22,230 | ) |
1.09-17.93
|
|||||||||||
Long-term loans from banks(2),(3)
|
(4,462 | ) | - | (4,259 | ) | (18 | ) | (4,277 | ) |
1.90-110.27
|
|||||||||||
Host contract in compound financial instrument in respect of non-recourse loans(4)
|
(3,162 | ) | - | - | (3,150 | ) | (3,150 | ) |
12.54
|
||||||||||||
Loans from others
|
(584 | ) | - | (525 | ) | - | (525 | ) |
2.59-15.96
|
||||||||||||
(30,659 | ) | (22,214 | ) | (4,803 | ) | (3,168 | ) | (30,190 | ) |
2013
|
||||||||||||||||||||||||
Fair value(5)
|
|
|||||||||||||||||||||||
Carrying amount
|
Level 1
|
Level 2
|
Level 3
|
Total
|
Capitalization interest rate used in the calculation of fair value | |||||||||||||||||||
Financial Assets
|
||||||||||||||||||||||||
Long-term trade receivables(1)
|
512 | - | - | 512 | 512 | 5.20 | ||||||||||||||||||
Financial liabilities
|
||||||||||||||||||||||||
Bonds(2),(3)
|
(25,875 | ) | (26,648 | ) | (58 | ) | - | (26,710 | ) | 0.53-12.85 | ||||||||||||||
Long-term loans from banks(2),(3)
|
(5,410 | ) | - | (5,252 | ) | (50 | ) | (5,302 | ) | 0.8-424.82 | ||||||||||||||
Host contract in compound financial instrument in respect of non-recourse loans(4)
|
(3,664 | ) | - | - | (3,360 | ) | (3,360 | ) | 12.1 | |||||||||||||||
`Loans from others
|
(460 | ) | - | (322 | ) | - | (322 | ) | 1-35.24 | |||||||||||||||
(35,409 | ) | (26,648 | ) | (5,632 | ) | (3,410 | ) | (35,690 | ) |
|
(1)
|
The fair value of long-term trade receivables was determined on the basis of the present value of the future cash flows, discounted by the market interest rate as at measuring date.
|
|
(2)
|
The carrying amount includes current maturities and accrued interest. The fair value as at the date of the report includes principal and interest that were paid in January of the subsequent year, and in respect of which the Ex Day fell before the date of the report.
|
|
(3)
|
The fair value of bonds which are traded on the stock exchange was assessed based on their quoted price, and the related interest rate reflects the yield-to-maturity embodied in such quoted price. The fair value of bonds which are not traded on the stock exchange and of long-term loans from banks was estimated using the future cash flows discounting technique, in respect of the principal and interest component, discounted by the market interest rate as at the measurement date.
|
|
(4)
|
The fair value of the host contract in the compound financial instrument related to the non-recourse loan was determined by an external appraiser based on the value of the shares of Adama, see note 16.F.1.d. above.
|
|
(5)
|
For details on the different levels in the fair value hierarchy, see note 1.E.3.b above.
|
G.
|
(cont.)
|
|
2.
|
Fair value hierarchy of financial instruments measured by fair value
|
·
|
Forward contracts, the fair value of which is estimated based on quotes by banks/ brokers or based on the discounting of the difference between the forward price, as denominated in the contract, and the current forward price for the remaining period of the contract until redemption, using appropriate market interest rates for similar instruments, including adjustments required due to credit risks of the parties, when appropriate.
|
·
|
Foreign currency options, the fair value of which is determined according to Black & Scholes model, and the Garman-Kohlhagen model.
|
G.
|
(cont.)
|
|
2.
|
Fair value hierarchy of financial instruments measured by fair value
|
|
Financial instruments measured at fair value at level 3
|
For the year ended December 31, 2014
|
||||||||
Financial assets
|
Financial liabilities
|
|||||||
Financial assets measured at fair value through profit and loss
|
Embedded derivative in non-recourse loan and other
|
|||||||
NIS millions
|
||||||||
Balance as at January 1, 2014
|
296 | 602 | (2) | |||||
Total income (losses) recognized:
|
- | |||||||
In Statement of Income
|
15 | ** | (535 | ) | ||||
In other comprehensive income (in the ‘Reserves from translation differences’ item)
|
12 | - | ||||||
Amounts paid or accrued
|
- | 19 | ||||||
Acquisitions
|
3 | - | ||||||
Sales
|
(44 | ) | - | |||||
Redemptions
|
(2 | ) | - | |||||
Issue of series T bonds in Discount Investments
|
- | (15 | ) | |||||
Initial recognition in fair value***
|
90 | - | ||||||
Balance as at December 31, 2014
|
370 | (1) | 71 | (2) | ||||
*The total profits (losses) for the period that were included in the Statement of Income for assets and liabilities held as of December 31, 2014:
|
||||||||
Net income (loss) from realization and increase in value (impairment) of investments and assets
|
(10 | ) | (535 | ) |
**Not including income from dividends in a sum of NIS 24 million.
*** A financial asset measured at fair value in the Statement of Income as a result of a decrease in the amount of the holding and the loss of material influence – see note 3.H.2.a below.
|
(1)
|
The Group holds several private companies, and the fair value of the Group’s investments therein was assessed by using the following assessment methods:
|
·
|
The cash flow discount method was implemented where the companies under assessment are capable to estimate the future cash flows thereof.
|
·
|
The transactions method - according to this method, the value of the Group’s investments in the companies under assessment was assessed on the basis of the price determined in other transactions involving the securities thereof, while carrying out the relevant adjustments.
|
·
|
Option Pricing Model - An option pricing model based on the Black & Scholes model or on the binomial model. This method is based on the assumption that the securities of an entity may be considered as call options on the value of such entity as a whole.
|
·
|
The value of investments in venture capital funds which are not registered for trade is determined on the basis of the Group’s share in the funds’ equity based on the financial statements thereof, which are based on fair value or valuations of the investments thereof.
|
(2)
|
Including an embedded derivative in respect of a non-recourse loan received by Koor as stated in note 20.F.4.b above.
|
G.
|
(cont.)
|
|
2.
|
Fair value hierarchy (cont.)
|
|
Financial instruments measured at fair value at level 3 (cont.)
|
For the year ended December 31, 2013
|
||||||||||||||||
Financial assets
|
Financial liabilities
|
|||||||||||||||
Financial assets measured at fair value through profit and loss
|
Financial assets designated to fair value through other comprehensive income
|
Total
|
Embedded derivative in non-recourse loan and other
|
|||||||||||||
NIS millions
|
||||||||||||||||
Balance as at January 1, 2013
|
931 | 4 | 935 | 653 | ||||||||||||
Total gains (losses) recognized:
|
||||||||||||||||
In profit and loss
|
37 | ** | - | 37 | (85 | ) | ||||||||||
In other comprehensive income (in the ‘Reserves from translation differences’ item)
|
(6 | ) | (4 | ) | (10 | ) | - | |||||||||
Amounts paid or accrued
|
(2 | ) | - | (2 | ) | 13 | ||||||||||
Acquisitions
|
59 | - | 59 | - | ||||||||||||
Sales
|
(92 | ) | - | (92 | ) | - | ||||||||||
Business combination
|
- | - | - | (4 | ) | |||||||||||
Redemptions
|
(5 | ) | - | (5 | ) | - | ||||||||||
Settlements
|
- | - | - | 21 | ||||||||||||
Financial instruments of realization groups classified as held-for-sale
|
(2 | ) | - | (2 | ) | 4 | ||||||||||
Cessation of consolidation
|
(624 | ) | - | (624 | ) | - | ||||||||||
Balance as at December 31, 2013
|
296 | - | 296 | (1) | 602 | (2) | ||||||||||
*The total income (losses) for the period that were included in the Statement of Income for assets and liabilities held as of December 31, 2013: | 1 | (85 | ) |
**Excluding dividend income in a sum of NIS 9 million.
|
(1)
|
The Group holds several private companies, and the fair value of the Group’s investments therein was assessed by using the following assessment methods:
|
·
|
The cash flow discount method was implemented where the companies under assessment are capable to estimate the future cash flows thereof.
|
·
|
The transactions method - according to this method, the value of the Group’s investments in the companies under assessment was assessed on the basis of the price determined in other transactions involving the securities thereof, while carrying out the relevant adjustments.
|
·
|
Option Pricing Model - An option pricing model based on the Black & Scholes model or on the binomial model. This method is based on the assumption that the securities of an entity may be considered as call options on the value of such entity as a whole.
|
·
|
The value of investments in venture capital funds which are not registered for trade is determined on the basis of the Group’s share in the funds’ equity based on the financial statements thereof, which are based on fair value or valuations of the investments thereof.
|
(2)
|
Including an embedded derivative in respect of a non-recourse loan received by Koor as detailed in note 20.F.4.b above.
|
G.
|
(cont.)
|
|
2.
|
Fair value hierarchy (cont.)
|
As at December 31, 2014
|
||||||||||||||||
Effect on total equity
|
Effect on the profit or loss
|
|||||||||||||||
Unobservable data
|
Increase in the parameter of
|
Decrease in the parameter of
|
Increase in the parameter of
|
Decrease in the parameter of
|
||||||||||||
NIS millions
|
||||||||||||||||
Change of 5% in the standard deviation of Adama shares
|
29 | (27 | ) | 29 | (27 | ) | ||||||||||
Change of 2.5% in the discount rate in respect of the non-marketability of Adama shares
|
(21 | ) | 24 | (21 | ) | 24 | ||||||||||
Change of 5% in Adama’s value
|
45 | (38 | ) | 45 | (38 | ) |
As at December 31, 2013
|
||||||||||||||||
Effect on total equity
|
Effect on the profit or loss
|
|||||||||||||||
Unobservable data
|
Increase in the parameter of
|
Decrease in the parameter of
|
Increase in the parameter of
|
Decrease in the parameter of
|
||||||||||||
NIS millions
|
||||||||||||||||
Change of 5% in the standard deviation of Adama shares
|
48 | (50 | ) | 48 | (50 | ) | ||||||||||
Change of 2.5% in the discount rate in respect of the non-marketability of Adama shares
|
(6 | ) | 4 | (6 | ) | 4 | ||||||||||
Change of 5% in Adama’s value
|
104 | (100 | ) | 104 | (100 | ) |
|
1.
|
Change in the fair value of securities measured by fair value through profit or loss would have affected the profit or loss by the following amounts (after tax):
|
For the year ending December 31
|
||||||||||||||||
2014
|
2013
|
|||||||||||||||
Effect on the profit or loss
|
Effect on the shareholders share
|
Effect on the profit or loss
|
Effect on the shareholders share
|
|||||||||||||
NIS millions
|
||||||||||||||||
Increase of 5%
|
250 | 175 | 148 | 67 | ||||||||||||
Increase of 10%
|
498 | 348 | 296 | 136 | ||||||||||||
Decrease of 5%
|
(250 | ) | (175 | ) | (148 | ) | (67 | ) | ||||||||
Decrease of 10%
|
(498 | ) | (348 | ) | (296 | ) | (136 | ) |
|
2.
|
A change in the fair value of financial assets measured by fair value through other comprehensive income would have affected the equity in immaterial amounts.
|
As at December 31, 2014
|
As at December 31, 2013
|
|||||||||||||||||||||||
Gross amounts of financial assets (liabilities) recognized
|
Gross amounts of financial assets (liabilities) recognized and offset in the Statement of Financial Position
|
Net amounts of financial assets (liabilities) presented in the Statement of Financial Position
|
Gross amounts of financial assets (liabilities) recognized
|
Gross amounts of financial assets (liabilities) recognized and offset in the Statement of Financial Position
|
Net amounts of financial assets (liabilities) presented in the Statement of Financial Position
|
|||||||||||||||||||
NIS millions
|
||||||||||||||||||||||||
Financial assets
|
||||||||||||||||||||||||
Trade receivables
|
342 | (238 | ) | 104 | 340 | (264 | ) | 76 | ||||||||||||||||
Financial liabilities
|
||||||||||||||||||||||||
Trade payables and accrued expenses
|
(264 | ) | 238 | (26 | ) | (316 | ) | 264 | (52 | ) |
Note 22 – Charges and Guarantees
|
A.
|
The Company and several consolidated companies registered fixed and/or floating liens on their assets (including shares, real estate assets, investment property and fixed assets) to secure repayment of the liabilities. In addition, certain consolidated companies have undertaken not to register liens on their assets in favor of third parties without prior written consent from the lenders (negative pledge). In certain events, creation or realization of liens is subject to regulatory permits, including pursuant to the terms of various permits and/or licenses. See note 16.E.d.1 and 2 above for information pertaining to the provisions that were set out in agreements between the Company and banks, which determine, inter alia, a limit on charging additional assets in order to give additional collateral to secured lenders.
|
B.
|
With respect to a loan that was received by the Company from a financial institution, the book value of which as of December 31, 2014, is NIS 148 million, the Company charged shares of Discount Investments and shares of Clal Holdings Insurance Enterprises, as well as an amount of cash of NIS 18 million. For details, see also note 16.C.2 above.
|
C.
|
The Company gave a bank a comfort letter with respect to its holdings in Israir, by which, inter alia, it will make all efforts to help Israir obtain financial means to meet its liabilities to the bank, and if necessary will act to sell the airplanes so that the sale proceeds may serve to repay the debt. The comfort letter states that it does not create of an undertaking to repay the credit and/or security and/or guarantee. In the comfort letter, the Company undertook to retain control of IDB Tourism and/or its subsidiary (see also note 23.B.10 and 11 below).
|
|
1.
|
Guarantees for loans received from banking corporations
|
The Guarantor
|
Details
|
Sum of the guarantee
as at December 31, 2014
|
|||
NIS Millions
|
|||||
The Company
|
Guarantee to wholly owned consolidated company of the Company for a loan from a banking corporation
|
7 | |||
Shufersal and its consolidated company
|
Guarantee for the associate’s debt to the banking corporation
|
25 | |||
Property & Building
|
Guarantees to wholly owned consolidated company of the Company for loans from banking corporations
|
457 | |||
Property & Building
|
Guarantees for associates and joint transactions for their loans from banking corporations
|
360 | |||
IDB Tourism (2009)
|
Guarantee to a consolidated company for a loan from a banking corporation
|
235 | |||
Andim Tourism and Aviation Ltd.
|
Guarantee for consolidated companies to banking corporations
|
For an unlimited amount *
|
|
*
|
The balance of the debt to the banking corporation as at 31 December, 2014, is NIS 22 million.
|
|
2.
|
Other guarantees
|
The Guarantor
|
Details
|
Sum of the guarantee
as at December 31, 2014
|
|||
NIS Millions
|
|||||
Consolidated companies of Property & Building
|
Guarantees and insurance policies that were provided by banks and insurance companies at the request of consolidated companies of Property & Building to secure the money of the purchasers of the apartments, in accordance with the Sales (Apartments)(Assurances of Investments of Purchasers of Apartments) Law 5735-1974.
|
310 | |||
Property & Building and its consolidated companies
|
Bank guarantees for institutions, service providers, land owners and others during the ordinary course of their business.
|
166 | |||
Koor
|
Guarantee to Bezeq with regards to a service provision agreement for products sold to it by a Koor subsidiary.
|
165 | |||
Cellcom and its consolidated companies
|
Bank guarantees on behalf of the Israeli government to assure implementation of the terms of the licenses.
|
83 | |||
Cellcom and its consolidated companies
|
Bank guarantees on behalf of suppliers, government institutions and others
|
49 | |||
Shufersal
|
Various guarantees
|
4 | |||
Diesenhaus Ltd.
|
Bank and other guarantees to consolidated companies to secure credit from suppliers and lessees and performing tenders
|
3 | |||
Diesenhaus Travel and Tourism (1979) Ltd.
|
Bank and other guarantees to consolidated companies to secure credit from suppliers and lessees and performing tenders
|
2 | |||
Open Sky Ltd.
|
Bank guarantees in favor of airlines
|
5 | |||
Israir Flight and Tourism Ltd.
|
Bank guarantees in favor of suppliers
|
5 | |||
IDB Tourism (2009)
|
Guarantee in favor of a supplier of a consolidated company
|
10 |
E.
|
Discount Investments undertook to two banks that provided it loans whose balance as at December 31, 2014, amounted to NIS 521 million to avoid granting liens on behalf of others, subject to certain exceptions set forth in the aforesaid loan agreements (these exceptions include with regards to the two said banks an instance of a fixed pledge on an asset on behalf of a third party that financed its purchase, in order to secure credit for the purchase of said asset only, and with regards to one of the aforesaid banks - even in the case of a fixed pledge on behalf of a third party, when simultaneously said asset will be charged with an identical charge on behalf of said bank to secure Discount Investments’ loans from it).
|
F.
|
Ÿ
|
Adama shares owned by Koor are charged to secure the loan received by Koor from a Chinese bank, as stated in note 16.F.1.d.
|
|
Ÿ
|
To secure the undertakings of the other consolidated companies and their subsidiaries to banks and others, in the total amount of NIS 3,130 million, and to secure bank guarantees amounting to NIS 476 million, these companies pledged various assets, including the share capital of investee companies and property rights (sum of said undertaking also includes loans from Morgan Bank, as stated in note 16.F.3.a above, some of which was also registered as a first class mortgage as specified in said note).
|
G.
|
As part of the issuance of Cellcom bonds (see also Note 16.f.2. above), Cellcom undertook to not register liens on its assets, with the exception of certain unusual cases.
|
H.
|
As part of the issuance of Shufersal bonds from Series D and E (see note 16.F.4 above), Shufersal undertook to not register a fixed lien on all of its assets to any third party, unless it obtained approval of the meeting of holders of bonds.
|
I.
|
As part of the issuance of Cellcom bonds of Series F and G (see note 16.F.3.b above), Property & Building undertook to not register liens on its assets, with the exception of certain exceptions listed in the trust deed, in addition to existing liens on the date of issuance of said bonds.
|
J.
|
To secure the undertakings of the other consolidated companies and their subsidiaries to banks and others, in the total amount of NIS 355 million, and to secure bank guarantees amounting to NIS 12 million, these companies pledged various assets, including their share capital and investee companies and property rights, planes, insurance rights of property and land rights.
|
|
A.
|
Contingent Liabilities
|
|
1.
|
The Group has issued certain officers and employees in the Group, as well as to certain officers in a number of investee companies, advance letters of undertaking to indemnify those officers on account of their responsibility and liability for acts in the course of their duties, same being subject to certain terms and conditions and pertaining to certain pecuniary liabilities, applied to them in the setting of their said responsibilities and which, pursuant to law, indemnification is permitted on which account. See also note 33.B.5 below.
|
|
2.
|
In the preparation of economic papers, economic opinion and actuary declarations prepared for the Company and investee companies, by external experts, the Company and its investee companies gave said experts undertakings to indemnify them on account of damages that are caused to them as a result of third party actions against them pertaining to those economic papers, economic opinion and actuary declarations.
|
|
3.
|
In relation to the implications of legislation to promote competition and minimize market concentration, on the Company’s ability to control reporting corporations, see note 3.G.3 above.
|
B.
|
Commitments:
|
|
1.
|
Cellcom has undertakings relating to the license granted to it in 1994, the principal ones of which are:
|
|
2.
|
As of December 31, 2014, Cellcom and companies held by it have obligations to purchase equipment for the communication network, cellular telephone equipment and software and system maintenance, in a sum of approximately NIS 995 million.
|
|
3.
|
During 2003-2013, Netvision entered into several agreements with Mediterranean Nautilus Ltd. and Mediterranean Nautilus (Israel) Ltd. (hereinafter jointly: “Med Nautilus”). Under the agreements with Med Nautilus, Netvision acquired IRUs in certain communication capacities on Med Nautilus’ communication lines, as well as maintenance and operation services in connection with the aforesaid communication lines. The 2013 agreement contains an option, according to which Netvision is entitled to purchase additional capacity. The duration of the agreement pertaining to part of the capacity purchased from Med Nautilus is until May 2032. Netvision has the option to terminate the agreements pertaining to certain portions of the capacity in 2022 and 2027. The balance of Netvision’s liabilities to Med Nautilus on account of the IRUs of international communication lines under all the agreements extant as of December 31, 2014, is NIS 343 million.
|
|
4.
|
In March 2012 and May 2013, Cellcom entered into agreements with Apple Sales International to purchase and distribute iPad Tablets and iPhone devices, respectively, in Israel. In accordance with the terms and conditions of the agreements, Cellcom undertook to purchase, over a period of 3 years, a minimum number of such devices, which is expected to constitute a significant share of the aggregate expected total sum of acquisitions of tablets and cellular phones by Cellcom over such period. The aggregate sum of purchases will be dependent on the iPad and iPhone prices, respectively, at the date of purchase thereof.
|
|
5.
|
In 2013 Cellcom renewed its agreement with Amdocs on account of operation, maintenance, management and development services for Cellcom and Netvision’s billing system and customer system. The agreement is until February 2024, and Cellcom is entitled to terminate it, commencing on August 2016, subject to payment of compensation on account of the early termination. Moreover, Cellcom entered into a new agreement with Amdocs to develop a new version of the billing system that would serve Cellcom and Netvision. In March 2014, Cellcom engaged in an additional agreement with Amdocs to supply a customer relations management system which will replace Cellcom’s and Netvision’s existing customer relations management systems and serve both companies. As part of the agreement, Cellcom has undertaken to purchase maintenance services for a period of one year from the launch date of the system, subsequent to which it has an option to purchase maintenance services for seven additional years. As at December 31, 2014 Cellcom’s total liabilities with regard to these agreements amount to NIS 108 million.
|
|
6.
|
The following are details of Cellcom’s engagements in agreements for sharing networks and sites:
|
|
a.
|
In December 2013 Cellcom engaged with Golan Telecom Ltd. (“Golan”), as part of which Cellcom granted Golan an Indefeasible Right of Use with respect to its second and third generation network, which will replace the intra-national roaming agreement extant between Golan and Cellcom, Golan will continue to operate its own network center.
|
|
b.
|
In September 2014, Cellcom engaged with Pelephone Communication Ltd. (“Pelephone”) in a cooperation agreement with regard to maintenance services for passive components at cellular sites, including the merging of passive components and reducing costs, through a joint contractor. The selected contractor through a process of obtaining quotes will engage in separate agreements with each of Cellcom and Pelephone, as a rule, for a period of 5 years at least. The agreement is subject to regulatory approvals and there is no certainty such approvals will be granted.
|
|
7.
|
In June 2014, the Board of Directors of Cellcom resolved to implement Cellcom’s entry into the TV Over IP services sector. In advance of its launch of the aforementioned services, Cellcom engaged in purchasing agreements for equipment, content and associated services. Entry into a new and saturated market will require significant investments and additional operating expenses.
|
|
8.
|
There are engagements entered into by Properties and Building and by consolidated subsidiaries of its in Israel, principally pertaining to the acquisition of land, residential construction and development and erection of buildings, which are estimated, as of December 31, 2014, at an aggregate sum of NIS 328 million.
|
|
9.
|
A consolidated subsidiary of Property and Building engages in the ordinary course of its business in combination transactions with land owners (including “demolition and construction” projects) according to which, in consideration of the purchase of the land, the vendors will receive a share of the proceeds of the project and/or some of the units to be built. The transactions are partly conditional on approval of a city building plan allowing residential building on the land.
|
|
10. In April 2007 Israir entered into a contract with Airbus to purchase three airplanes. Two of the airplanes were received during 2010, and the third airplane, on account of which Israir has paid an advance of approximately $8 million, has not yet been received. Pursuant to the terms and conditions of the agreement, Israir was supposed to transfer an additional sum of advance on account of the third airplane by the end of the first half of 2012. In light of the failure to meet the payment stipulation in the agreement, Israir and Airbus decided that the delivery date for the plane, which was expected to be August 2013, will be postponed to 2016.
|
|
11. For details regarding an agreement of IDB Tourism with a foreign banking corporation in a letter of commitment, which will be secured by a charge on four aircrafts owned by Israir and a charge on a new fifth aircraft, see note 16.F.6.2.
|
|
12. As of December 31, 2014 the Company and its consolidated subsidiaries had liabilities to pay rent as follows:
|
Consolidated
|
||||
NIS millions
|
||||
Up to one year
|
659 | |||
One year to five years
|
1,794 | |||
More than five years
|
739 | |||
3,192 |
C.
|
Lawsuits
|
|
1.
|
Lawsuits against the Company
|
|
a.
|
In May 2009, a lawsuit was filed with the Tel Aviv District Court (“the Court”) against the Company, seeking cancellation of the Company’s full buy-back offer issued by the Company in January 2009, with the share buy-back pursuant to this offer completed in March 2009 (“the tender offer”) and, alternatively, an assessment relief, pursuant to Section 338 of the Companies Law, 1999 (“The Companies Law”), along with a motion for class action status for this lawsuit. The class which plaintiffs seek to represent includes all offerees in this tender offer.
|
C.
|
Lawsuits (cont.)
|
|
1.
|
Lawsuits against the Company (cont.)
|
|
a. (cont'd)
|
|
b.
|
In October 2010, a lawsuit was filed with the Central District Court by Alpha Capital Anstalt (“Alpha”) and by Ness Energy of Israel Inc. (“Ness Israel”) (jointly: “the plaintiffs”) against the Company, Noya Oil and Gas Exploration Ltd. (which owns a 75% controlling stake in the Modi’in General Partner) (“Noya”) and Du-Tzach Ltd., a company controlled by Mr. Yitzhak Sultan (“Du-Tzach”) (jointly: “the defendants”). In this lawsuit, the plaintiffs seek declarative injunction against the share allocation (“the allocation”) made by Noya to Du-Tzach, which resulted in Du-Tzach becoming a 95% owner of Noya’s issued share capital and against sale of half of Du-Tzach’s holding stake in Noya to the Company.
|
C.
|
Lawsuits (cont.)
|
|
1.
|
Lawsuits against the Company (cont.)
|
|
b. (cont'd)
|
|
c.
|
In September 2012, a motion for approval of a derivative claim was filed with the Economic Section of the Tel Aviv-Yafo District Court by a plaintiff who claims to be a shareholder of IDB Holdings (“the plaintiff”). The motion was filed against controlling shareholders of IDB Holdings, officers of the Company and of IDB Holdings (in this section c., jointly: “the companies”) who served on the relevant dates (jointly: “the defendants”) as well as against the Company and IDB Holdings as pro-forma defendants. The motion concerns decisions by the companies with regard to a transaction involving acquisition shares of Ganden Tourism and Aviation Ltd. (currently named Andim Tourism and Aviation Ltd.) (“Ganden Tourism”) by the Company, which closed in October 2009.
|
C.
|
Lawsuits (cont.)
|
|
1.
|
Lawsuits against the Company (cont.)
|
|
c.
|
(cont.)
|
|
d.
|
In April 2013, a motion for approval of derivative claim and a statement of derivative claim were filed with the Economic Section of the Tel Aviv-Yafo District Court by a plaintiff who claims to hold Company bonds, in the name of the Company, against IDB Holdings and against members of the Board of Directors of the Company in the relevant period. This motion alleges that the dividend distributed by the Company in November 2011, amounting to NIS 64 million, constitutes a forbidden distribution pursuant to Section 302 of the Companies Law and that the decision to distribute this dividend was made unlawfully. The motion alleges that, according to the plaintiff, the earnings test in conformity with the Companies Law was not performed, since upon the date of decision on this distribution, it was expected that the Company’s next (future) financial statements would indicate negative retained earnings.
|
C.
|
Lawsuits (cont.)
|
|
1.
|
Lawsuits against the Company (cont.)
|
|
d.
|
(cont.)
|
C.
|
Lawsuits (cont.)
|
|
1.
|
Lawsuits against the Company (cont.)
|
|
d.
|
(cont.)
|
1.
|
The settlement agreement would become effective contingent on fulfillment of all of the following conditions precedent: (a) Approval of the settlement agreement as a final, conclusive verdict - both in this claim and in the other derived claim; (b) Final, conclusive approval of the settlement agreement by the Court hearing the IDB Holdings debt restructuring.
|
2.
|
This derived claim and in the other derived claim would be accepted, meaning that amounts paid pursuant there to would be paid in conformity with the outline set forth in the settlement agreement.
|
|
3.
|
The maximum amount which the Company may receive pursuant to the settlement agreement (subject to fulfillment of the conditions precedent) is NIS 50.6 million, partly paid by IDB Holdings and partly paid by the other defendants in this claim and in the other derivative claim (through the insurance company), as set forth below: (a) NIS 34.6 million would be paid to the Company as follows: NIS 7 million would be paid by IDB Holdings in cash; another NIS 27.6 million would be paid by the other defendants in this claim and in the other derivative claim (through the insurance company). (b) NIS 16 million would be paid to the Company by IDB Holdings out of future receipts by IDB Holdings, if any, in conjunction with motions for approval of derivative claims and/or derivative claims by IDB Holdings against the controlling shareholders and officers thereof.
|
|
4.
|
The award to plaintiffs in this claim and in the other derivative claim and their legal fees would be paid out of the aforementioned amounts, as percentage, as determined by the Court.
|
|
5.
|
Payment of the aforementioned amounts would be made against final and absolute discharge of all claims by the Company against any party, at present or in future, with regard to the dividends distributed by the Company in 2010-2011 and the Company would be prevented by Court action from making any claims with regard to said distributions (“the estoppel clauses”).
|
C.
|
Lawsuits (cont.)
|
|
1.
|
Lawsuits against the Company (cont.)
|
|
d.
|
(cont.)
|
|
e.
|
On August 1, 2013, a motion for approval of a derivative claim was filed with the Economic Section of the Tel Aviv-Yafo District Court by a plaintiff who claims to be a holder of Company bonds, in the name of the Company, against IDB holdings and officers that currently hold office in the Company or held office in it in the past.
|
C.
|
Lawsuits (cont.)
|
|
1.
|
Lawsuits against the Company (cont.)
|
|
e.
|
(cont.)
|
|
f.
|
For more information on a “Motion for the Recovery of IDB Development Corporation Ltd.” (the motion for an involuntary arrangement) pursuant to section 350 of the Companies Law, which was filed with the Tel Aviv-Jaffa District Court on April 21, 2013, and on the legal proceeding with regard to the Company’s financial position, including the opinion of the Company’s legal counsel, see note 16.G.1 above.
|
|
g.
|
On November 28, 2013, the Company received final warning letters prior to taking legal action, from attorneys of the Trustees for IDB Holdings bonds (Series A, B, C, D and E). These warning letters are addressed to Board members and management of the Company and of IDB Holdings alleging, inter alia, that IDB Holdings “captains”, including its officers, are directly liable for the alleged heavy damage incurred by IDB Holdings, its shareholders and creditors.
|
|
These letters list a string of alleged deeds and omissions in the affairs of IDB Holdings and/or the Company and/or investees (present or past) thereof, which the aforementioned Trustees allege were made or caused by officers of IDB Holdings and which the Trustees allege are partly concerning the conduct of IDB Group at times, other than in the best interest of Group companies (and in particular, the Company and IDB Holdings) - but rather in the best interest of controlling shareholders thereof. The letters further allege that the aforementioned Trustees intend to have launched appropriate legal proceedings, whether by IDB Holdings, by an officer or by any other party (including by the Trustees) in order to ensure full payment for damage allegedly caused by the events listed in the letters.
|
|
h.
|
In December 2013, a motion for approval of a derivative claim was filed with the Central District Court, by a plaintiff who claims to be a shareholder of Discount Investments, against Discount Investments, against Board members of Discount Investments in 2010-2011 and against the Company (“the Rosenfeld motion”) with regard to dividend distributions declared by Discount Investments, for being forbidden distributions due to failing the earnings test.
|
C.
|
Lawsuits (cont.)
|
|
1.
|
Lawsuits against the Company (cont.)
|
|
h.
|
(cont.)
|
C.
|
Lawsuits (cont.)
|
|
1.
|
Lawsuits against the Company (cont.)
|
|
i.
|
On June 29, 2014, the Campaign for Government Quality in Israel, NGO (“the petitioner”) filed a petition with the Supreme Court in Jerusalem, sitting as the High Court of Justice (“the petition” and “the High Court of Justice”, respectively) against the Supervisor of Banks, the Governor of the Bank of Israel, former controlling shareholders of the Company, the Company, IDB Holdings and four banks.
|
C.
|
Lawsuits (cont.)
|
|
1.
|
Lawsuits against the Company (cont.)
|
|
j.
|
For more information about a proceeding concerning a motion filed by the Company with the Court in May 2014 with regard to a demand from Menorah for immediate repayment of the Company’s debt there to, which has been concluded, see note 16.c(2) below.
|
|
k.
|
On January 21, 2015, a motion was filed with the Court, seeking a Court order for copying computer content of IDB Holdings by the Legal Counsel for Inquiries and Representation of the Trustees of the debt restructuring in legal proceedings, whereby the Court was asked to issue an order in presence of one party, allowing the aforementioned Legal Counsel to copy all magnetic media concerning IDB Holdings, which is stored in computer servers at IDB Holdings offices due, inter alia, to the mix of servers of the Company and of IDB Holdings. For further details and for additional motions and decisions on this matter, see note 16.G.2.i above.
|
|
2.
|
Lawsuits against Clal Holdings Insurance Enterprises Group
|
C.
|
Lawsuits (cont.)
|
|
2.
|
Lawsuits against Clal Holdings Insurance Enterprises Group (cont.)
|
|
The financial institutions in the group are involved on a regular basis in learning, identification and handling of issues which may derive from the aforementioned complexities, both in relation to individual cases and in relation to types of customers and/or products. In addition, further to the provisions of the Commissioner’s directive regarding the cleansing of data regarding the rights of members of financial institutions, the investee companies of Clal Holdings Insurance Enterprises Group have been making preparations to carry out a comprehensive process of data cleansing in the systems dealing with long-term savings and opposite customers in connection with product data and customer data. The financial institutions in the group made certain provisions in their financial statements as needed, but at this stage the companies of the group cannot estimate the full scope and costs of the treatment and cleansing processes and the full consequences thereof, including in relation to their past activity. In addition, it is impossible to even predict the types of claims that will arise in connection with the above and/or the exposure that derives from them in connection with the activities in these areas which could arise through, among other ways, the procedural mechanism of the class action suit and/or wide-ranging decisions made by the Commissioner.
|
C.
|
Lawsuits (cont.)
|
|
2.
|
Lawsuits against Clal Holdings Insurance Enterprises Group (cont.)
|
|
a.
|
Consumer claims and derivative actions
|
C.
|
Lawsuits (cont.)
|
|
2.
|
Lawsuits against Clal Holdings Insurance Enterprises Group (cont.)
|
|
a.
|
Consumer claims and derivative actions (cont'd)
|
Note 23 – Contingent Liabilities, Commitments and Lawsuits (cont.)
|
C.
|
Lawsuits (cont.)
|
|
2.
|
Lawsuits against Clal Holdings Insurance Enterprises Group (cont.)
|
|
a.
|
Consumer claims and derivative actions
|
Amount of claim
|
Type of claim
|
Number of claims
|
1.Claims that stipulate the amount referring to the company
|
||
a.Up to NIS 100 million
|
Claims certified as class action
Motions to certify class action
|
1
14
|
b. Between NIS 100-500 million
|
Motions to certify class action
|
8
|
c. Between NIS 500 million and 1 billion
|
Motions to certify class action
|
1
|
d.Above NIS 1 billion
|
Motions to certify class action
|
1
|
e.Annual amount stated (and accordingly the total amount is dependent upon the period)
|
Motions to certify class action
|
1
|
2.Claims that stipulate a comprehensive for all of the defendants, without attributing a specific amount to each defendant
|
||
a. Up to NIS 100 million
|
Motions to certify class action
|
4
|
Motions to certify derivative action
|
1
|
|
b. Between NIS 100-500 million
|
Motions to certify class action
|
1
|
c.Between NIS 500 million and 1 billion
|
Motions to certify class action
|
2
|
d. Above NIS 1 billion
|
Motions to certify derivative action
|
2
|
3. Claims that did not stipulate an amount
|
Claims certified as class actions
|
126
|
Motions to certify class actions
|
4
|
|
1.
|
In April 2008 Clal Insurance received a monetary claim that was filed with the Jerusalem Labor Court (“the claim”) as well as a motion to certify the claim as a class action (“the motion”).
|
|
a.
|
The discrimination practiced by the respondent contravenes any law and any provision and/or action based on this discrimination be declared null and void.
|
Note 23 - Contingent Liabilities, Commitments and Lawsuits (cont.)
|
C.
|
Lawsuits (cont.)
|
|
2.
|
Lawsuits against Clal Holdings Insurance Enterprises Group (cont.)
|
|
a.
|
Consumer claims and derivative actions (cont.)
|
|
b.
|
The plaintiff and other members of the class it seeks to represent (“the class”) are entitled to select between the following alternatives: (1) to equalize the pension coefficient for an insured woman and an insured man and to rule that in the event of a lump sum payment instead of a pension, the lump sum payment shall be increased to the insured woman, in the ratio existing between the pension coefficient of an insured man and the pension coefficient of an insured woman at the relevant age; (2) to reduce both retroactively and prospectively the amount of risk premium charged to the insured women and to set them at the appropriate risk amounts, according to the plaintiff, for an insured woman, whereby the reduced amounts shall be added to the accumulated amount of savings.
|
|
c.
|
To issue appropriate rulings in respect of the other members of the class who have not been located or have not exercised their right to select between these choices.
|
Note 23 - Contingent Liabilities, Commitments and Lawsuits (cont.)
|
C.
|
Lawsuits (cont.)
|
|
2.
|
Lawsuits against Clal Holdings Insurance Enterprises Group (cont.)
|
|
a.
|
Consumer claims and derivative actions (cont.)
|
|
2.
|
In April 2010 a monetary claim against Clal Insurance and three other insurance companies (“the respondents”) was filed with the Central District Court (“the claim”), together with a motion to certify the claim as a class action (“the motion”).
|
|
3.
|
In January 2008 Clal Insurance received a claim filed against it with the Tel Aviv-Jaffa District Court (“the claim”) together with a motion to certify the claim as a class action (“the motion”). The claim was filed by several plaintiffs and against other respondents, all of which are insurance companies.
|
Note 23 - Contingent Liabilities, Commitments and Lawsuits (cont.)
|
C.
|
Lawsuits (cont.)
|
|
2.
|
Lawsuits against Clal Holdings Insurance Enterprises Group (cont.)
|
|
a.
|
Consumer claims and derivative actions (cont.)
|
|
3. (cont'd)
|
|
4.
|
In March 2010, a monetary claim was filed against Clal Insurance with the Central District Court (“the claim”), along with a motion to certify the claim as a class action (“the motion”).
|
27
|
A pension conversion factor is the coefficient that reflects the life expectancy and which is used by the insurer at the retirement age for purposes of converting the amount of the accumulated savings into a monthly allowance.
|
C.
|
Lawsuits (cont.)
|
|
2.
|
Lawsuits against Clal Holdings Insurance Enterprises Group (cont.)
|
|
a.
|
Consumer claims and derivative actions (cont.)
|
|
5.
|
In May 2011, a claim was received by Clal Insurance which was filed with the Central District Court (“the claim”), against it and against other insurance companies (jointly: “the defendants”) along with a motion to certify the claim as a class action (“the motion”).
|
Note 23 - Contingent Liabilities, Commitments and Lawsuits (cont.)
|
C.
|
Lawsuits (cont.)
|
|
2.
|
Lawsuits against Clal Holdings Insurance Enterprises Group (cont.)
|
|
a.
|
Consumer claims and derivative actions (cont.)
|
|
6.
|
In July 2011, a claim was filed against Clal Insurance, with the Central District Court (“the claim”), along with a motion to certify the claim as a class action (“the motion”).
|
Note 23 - Contingent Liabilities, Commitments and Lawsuits (cont.)
|
C.
|
Lawsuits (cont.)
|
|
2.
|
Lawsuits against Clal Holdings Insurance Enterprises Group (cont.)
|
|
a.
|
Consumer claims and derivative actions (cont.)
|
|
7.
|
In May 2012, a claim was filed against Clal Insurance, Clal Health, and against an additional insurance company and three HMOs (“the respondents”) with the District Court of Jerusalem (“the claim”), along with a motion to certify the claim as a class action (“the motion”).
|
|
8.
|
In May 2012, a claim was filed against Clal Insurance, Clal Health, Toren Insurance Agencies Ltd., and against additional insurance companies (“the defendants”) with the District Court of Jerusalem (“the claim”), along with a motion to certify the claim as a class action (“the motion”).
|
Note 23 - Contingent Liabilities, Commitments and Lawsuits (cont.)
|
C.
|
Lawsuits (cont.)
|
|
2.
|
Lawsuits against Clal Holdings Insurance Enterprises Group (cont.)
|
|
a.
|
Consumer claims and derivative actions (cont.)
|
|
9.
|
In May 2013 a claim was filed against Clal Insurance with the Tel Aviv district Court (“the claim”), along with a motion to certify the claim as a class action (“the motion”).
|
Note 23 - Contingent Liabilities, Commitments and Lawsuits (cont.)
|
C.
|
Lawsuits (cont.)
|
|
2.
|
Lawsuits against Clal Holdings Insurance Enterprises Group (cont.)
|
|
a.
|
Consumer claims and derivative actions (cont.)
|
10.
|
In June 2013 a claim was filed against Clal Insurance with the Tel-Aviv-Jaffa District Court (“the claim”), along with a motion to certify the claim as a class action (“the motion”).
|
11.
|
In July 2013 a claim was filed against Clal Insurance with the Central District Court (“the claim”), together with a motion to certify the claim as a class action (“the motion”). Both the motion and the claim were filed against a medical expert and a medical service company which provide services to Clal Insurance.
|
Note 23 - Contingent Liabilities, Commitments and Lawsuits (cont.)
|
C.
|
Lawsuits (cont.)
|
|
2.
|
Lawsuits against Clal Holdings Insurance Enterprises Group (cont.)
|
|
a.
|
Consumer claims and derivative actions (cont.)
|
12.
|
In February 2014 a motion to certify a derivative action and a derivative action (derivative action case no. 9167-01-14) were filed with the District Court (Financial Department) in Tel-Aviv against Clal Insurance, four other insurance companies and Clalit Health Services (“Clalit”).
|
Note 23 - Contingent Liabilities, Commitments and Lawsuits (cont.)
|
C.
|
Lawsuits (cont.)
|
|
2.
|
Lawsuits against Clal Holdings Insurance Enterprises Group (cont.)
|
|
a.
|
Consumer claims and derivative actions (cont.)
|
13.
|
In July 2014, a claim (“the claim”) and a Motion to Certify the Action as a Class Action (“the motion”) were filed with the Central District Court in Lod against Clal Pension and Provident Ltd. and against four additional pension fund management companies (“the defendants”).
|
Note 23 - Contingent Liabilities, Commitments and Lawsuits (cont.)
|
C.
|
Lawsuits (cont.)
|
|
2.
|
Lawsuits against Clal Holdings Insurance Enterprises Group (cont.)
|
|
a.
|
Consumer claims and derivative actions (cont.)
|
14.
|
In November 2014, a claim (“the claim”) and a Motion for Certification of the Claim as a Class Action (“the motion”) were filed in the Tel-Aviv District Court (Economic Division) against Jerusalem Bank (“Jerusalem Bank”) and against several additional defendants that held office as directors of Clal Finance Batucha Investment Management Ltd. (“Clal Batucha”) in the years 2007 until the sale of Clal Batucha to Jerusalem Bank in December 2013 (“the defendants”).
|
|
The subject-matter of the case is the plaintiff’s claims that Clal Batucha, in its capacity as a portfolio manager, carried out transactions with securities of companies in the IDB group, while preferring its own interests and those of various companies in the IDB group over the interests of its customers.
|
|
According to the plaintiff, Clal Batucha violated provisions of the law, including provisions of the Regulation of the Occupation of Investment Advice, Investment Marketing and Investment Portfolio Management Law, 5755-1995 (“the Investment Regulation Law”), which concern the duty of faith of Clal Batucha to its customers, its duty to notify its customers with regard to conflicts of interests that it has in carrying out such transactions, and its failure to obtain their prior consent before carrying out any transaction that involves a conflict of interests, and a prohibition of preferring financial assets of Clal Batucha or a corporation related to it.
|
Note 23 - Contingent Liabilities, Commitments and Lawsuits (cont.)
|
C.
|
Lawsuits (cont.)
|
|
2.
|
Lawsuits against Clal Holdings Insurance Enterprises Group (cont.)
|
|
a.
|
Consumer claims and derivative actions (cont.)
|
15.
|
In December 2014, an action (‘the claim’) and a motion to certify it as a class action (‘the motion’) were filed in the Jerusalem District Court against Clal Insurance.
|
|
The comprehensive alleged damage to all the members of the class is not estimated by the plaintiff for the reason that she claims that she does not know the number of policyholders that are entitled to restitution. The plaintiff’s alleged personal damage amounts to a sum of NIS 800 thousand.
|
C.
|
Lawsuits (cont.)
|
|
2.
|
Lawsuits against Clal Holdings Insurance Enterprises Group (cont.)
|
|
b.
|
Insurance agency claims
|
|
c.
|
Between January 2004 and June 2013, Clal Insurance entered into a renewable annual agreement with the Hadassah Medical organization (“Hadassah”) for second tier professional liability insurance, providing insurance coverage from claims in an amount higher than the sum provided by the self-insurance provided by Hadassah (“the first tier”).
|
C.
|
Lawsuits (cont.)
|
|
2.
|
Lawsuits against Clal Holdings Insurance Enterprises Group (cont.)
|
|
d.
|
Moreover and in general, in addition to the general exposure that the institutional bodies of the Clal Holdings Insurance Enterprises group have with respect to future actions, from time to time, including as a result of complaints of policyholders, audits and requests to receive information, there is also an exposure for warnings regarding the Commissioner’s intention to impose on those bodies financial sanctions and/or instructions of the Commissioner regarding an amendment and/or restitution and/or the implementation of certain operations with regard to operations that were carried out by institutional bodies in the group in the past, with regard to a policyholder or group of policyholders and/or exposure for wide-ranging decisions that the Commissioner publishes as part of his authority pursuant to the Control of Financial Services (Insurance) Law, 5741-1981, in which framework the Commissioner can also order the making of restitution to customers for the defects addressed by the warnings or the decisions and/or position papers published by supervisory bodies whose status and degree of influence are uncertain. Moreover, from time to time the financial institutions are subject to hearings and/or discussions with the Commissioner of Insurance’s office with regard to the aforesaid warnings and/or decisions and no final decision has yet been made in those matters. In the reporting year, financial statements in the group received several warnings with regard to an intention to impose financial sanctions on them. Each warning in itself is not in a material amount and the financial institutions are examining the need to make provisions in the financial statements with regard to the aforesaid warnings on the basis of an opinion of their legal advisers and/or are in the process of studying the warnings, as applicable.
|
|
1.
|
In August 2013, the Commissioner published a fundamental decision with regard to raising management fees without giving notice and on December 17, 2014, an amendment to the decision was published, postponing the dates for completing its implementation (‘the decision’).
|
|
Pursuant to the provisions of the decision, management companies are required to examine all of the accounts in which management fees were raised in the period between January 1, 2006, and December 31, 2009 (hereinafter: ‘the restitution period’) and to return to each member, who was charged management fees during that period other than pursuant to the provisions of regulation 53B(a) of the Income Tax Regulations, the amounts that he was overcharged, unless an examination exception and/or a restitution exception applies to that member, as stated below. The amounts standing to the member’s credit according to the decision will bear annual interest at a rate of 5.1%, starting from the date on which the management fees were overcharged until the date of making the payments pursuant to the provisions of the decision.
|
|
The decision determined cases in which an exemption will be given with regard to the examination and restitution of money, and other cases in which an exemption will be given with regard to the restitution of money only. Moreover, various provisions were determined with regard to the manner of carrying out the restitution, documentation of the restitution, giving notice to members and reporting to the Commissioner with regard to the implementation of the restitution instructions.
|
|
Pursuant to the provisions of the decision, by August 31, 2005, management companies are required to complete the making of the examination and the restitution, and by December 31, 2015, the companies are required to send the Commissioner a summary report of the internal auditor of the companies, confirming the implementation of the provisions of the decision. Clal Pension and Provident is acting to make the restitution.
|
Note 23 - Contingent Liabilities, Commitments and Lawsuits (cont.)
|
C.
|
Lawsuits (cont.)
|
|
2.
|
Lawsuits against Clal Holdings Insurance Enterprises Group (cont.)
|
|
d.
|
(cont.)
|
|
2.
|
In December 2014, a fundamental draft decision was published with regard to joining group life insurance (‘the draft decision’). The draft decision was published as a result of wide-ranging on the subjects of collective life insurances that the Commissioner carried out in the insurance companies, in which cases were found in which policyholders were included in collective life insurance policies with obtaining their prior, written and express consent, even though the policyholders paid the cost of the insurance (in full or in part) (“the policyholders”).
|
|
Pursuant to the provisions of the draft decision, an insurance company needs to have the ability to present a written consent of a policyholder to join such collective life insurance. It was also determined that with regard to existing collective life insurance policies with regard to which an insurance company cannot present a written consent, the insurance company should verify the existence of written consent of those policyholders to joining the aforesaid policies, no later than the forthcoming renewal date of the policies or within eight months of the date of publication, whichever is the earlier (“the renewal date”). If the insurance company does not obtain the consent of a certain policyholder in such policies by the renewal date, the insurance shall not be renewed for that policyholder in the group of policyholders, and notice of this shall be sent to the policyholder (while the policy continues for the other policyholders). The aforesaid shall not apply to a group of policyholders for which the Commissioner gave approval to exempt the insurance company from the duty of maintaining a list of policyholders.
|
|
The company is studying the draft decision. At this stage, before the final wording is published, there is no certainty with regard to its provisions, as well as the manner of implementation that will be required and the expected ramifications of the draft decision, insofar as one will be published. It should be noted that the insurance companies are holding discussions with the Commissioner with regard to the draft decision.
|
|
3.
|
In February 2015, a fundamental decision was published with regard to the Equal Rights for Persons with Disabilities Law, 5758-1998 (“the Equal Rights Law”). as part of the decision, it is clarified, inter alia, that the insurance company is liable to deliver to a policyholder with disabilities that is given different treatment, as defined in the law, or a person with disabilities who was refused insurance, a reasoned notice in writing that will state that the insurance company’s decision derived from the fact that in its estimation the particular insurance risk as a result of the disability is greater in comparison to the insurance risk of persons who do not have that disability. The aforesaid notice shall also include a synopsis of at least one of the following matters: the actuarial figures, statistical figures, medical information or other information regarding the increase of the specific insurance risk, which formed the basis for the aforesaid decision of the insurance company, and a summary of the information on which it relied with respect to that person (such as: a reference to professional articles or a reference to a reinsurer’s guidelines, with regard to the underwriting terms on which the company relief for the purpose of its decision). With regard to a class action being managed against Clal Insurance in this regard, see section C.2.a.7 and C.2.a.8 above in this note. The decision gives the Commissioner authority with regard to the implementation of the provisions of the law.
|
|
In September 2014, the draft Equal Rights for Persons with Disabilities (Insurer’s Notice regarding Different Treatment of a Person or a Refusal to Insure him) Regulations, 5774-2014 (‘the draft regulations’), which state, inter alia, the wording of the notice that should be given to the insured pursuant to the Equal Rights Law, with regard to the right of a person whom an insurer has refused to insure or who received different treatment from the insurer as stated in the Equal Rights Law to file a complaint with the Commissioner and with the Complaints Committee or to file a claim with the court. The regulations will come into effect 30 days after they are published. The companies are holding discussions with the Commissioner with regard to the draft regulations.
|
Note 23 - Contingent Liabilities, Commitments and Lawsuits (cont.)
|
C.
|
Lawsuits (cont.)
|
|
2.
|
Lawsuits against Clal Holdings Insurance Enterprises Group (cont.)
|
|
d.
|
(cont.)
|
|
4.
|
In March 2015, the Commissioner published a draft of a fundamental decision regarding the payment of VAT and impairment of an automobile that was not repaired. Pursuant to the draft decision, it was determined that in a case where an insured or a third party claims his direct damage for the repair of the automobile and the insurer does not reject his claim, he is liable to pay him an insurance payout that includes, inter alia, the impairment of the automobile and the VAT (provided that he is not entitled to deduct input tax), even if he did not repair the car de facto. The company is studying the draft decision. At this stage, before the final wording of the decision is published, there is no certainty with regard to its provisions, as well as the manner of implementation that will be required and the expected ramifications of the draft decision, insofar as it will be published as a binding decision.
|
|
5.
|
Moreover, Clal Insurance is holding discussions with the Commissioner as part of a draft decision concerning one-time deposits of policyholders in policies that guarantee a yield (‘the policies’). Pursuant to the draft, Clal Insurance is required to carry out certain operations with regard to policyholders where the actual yield of the one-time deposits, which bore the yield of a profit-participating portfolio, was equal to or exceeded the guarantees yield in the policies, and certain operations with regard to policyholder where the actual yield on the one-time deposits was lower than the guaranteed yield. Clal Insurance is holding discussions with the Commissioner with regard to the draft decision. Therefore, at this stage, in view of the fact that it is not known that the final wording of the decision will be, if and insofar as one will be made, Clal Insurance is unable to estimate the ramifications and the extent of its impact on Clal Insurance, if and insofar as it will be published.
|
|
6.
|
In January 2015, the “Commissioner’s Position – Definition of the Insurance Event in Nursing Insurance” was published, with the purpose of clarifying the Commissioner’s interpretation of the definition of a nursing insurance event that appears in the Nursing Circular. Pursuant to the position paper, when resolving claims, an insurance company is required to examine whether a policyholder is capable of carrying out by himself a material part of the action, so that the examination will be made in accordance with the purposive interpretation described as part of the position paper. The company is studying the ramifications of the Commissioner’s position with regard to the manner of resolving nursing insurance claims. At this stage, before an up-to-date practice has been formulated for the implementation of the provision of the circular, and in view of the manner of implementing the circular to the best of the company’s understanding, the Company’s estimates that no material change will occur in the manner in which it implements the circular. However, the manner in which the circular will be interpreted by the Commissioner and the courts after the publication of the Commissioner’s position may have an impact on the scope of the change that will result from the Commissioner’s aforesaid position.
|
|
7.
|
In addition, in January 2015, before the final wording of the Commissions Regulations was published as stated above, the Commissioner published a wide-ranging position of the Commissioner with regard to the payment of a financial institution to a licensee (‘the position paper’). Pursuant to the position paper, the Commissioner objects to financial institutions paying licensees commissions that are based on the management fees paid by the member or the policyholder, according to which the commissions that will be paid to the licensee will be higher insofar as the management fees that will be paid by the customer will be higher.
The insurance companies contacted the Commissioner with regard to the status and legality of the position paper. In March 2015, the Commissioner notified the financial institutions, inter alia, that the position paper does not constitute a new positive regulation of the manner in which the commissions should be calculated, that the Commissioner did not intend to exercise the enforcement power given to him pursuant to the provisions of the law in this regard with respect to the customers that joined before the publication of the position paper, and even in the period shortly thereafter, and that the Commissioner intended to publish clarifications with regard to the position paper.
|
Note 23 - Contingent Liabilities, Commitments and Lawsuits (cont.)
|
C.
|
Lawsuits (cont.)
|
|
2.
|
Lawsuits against Clal Holdings Insurance Enterprises Group (cont.)
|
|
d.
|
(cont.)
|
|
7.
|
(cont.)
|
|
e.
|
In addition to the lawsuits set out in sections A, B and C above, the total amount of the pending immaterial lawsuits against investee companies of Clal Holdings Insurance Enterprises Group is NIS 66 million.
|
|
3.
|
Lawsuits against Discount Investments
|
|
a.
|
In September 2012, a motion to certify the filing of a derivative action in an amount of NIS 370 million in the name of Discount Investments against its directors was filed with the Tel-Aviv-Jaffa District Court (in this section, “the Motion for Certification”), by applicants claiming to be minority shareholders of Discount Investments (hereinafter in this section, “the applicants”). Together with the motion for approval, a draft of the derivative claim was also filed with the Court.
|
|
b.
|
In July 2014, a claim was filed with the court against Koor with regard to a claim of a breach of an agreement for the payment of a finder’s commission for the sale of Adama to ChemChina, in a total amount of NIS 32 million.
|
|
c.
|
For information on motions for certifying the filing of derivative actions that were filed by the Petitioners who are claiming to be shareholders of Discount Investments, with regards to dividends distributed by Discount Investments in 2010-2011, and that were filed, as applicable, against Discount Investments, against directors and two officers of Discount Investments during the relevant period, against the Company, against Clal Holdings Insurance Enterprises, against Clal Finance and against other parties, see section C.1.h above in this note.
|
Note 23 - Contingent Liabilities, Commitments and Lawsuits (cont.)
|
C.
|
Lawsuits (cont.)
|
|
4.
|
Lawsuits against Cellcom and its subsidiaries
|
Note 23 - Contingent Liabilities, Commitments and Lawsuits (cont.)
|
C.
|
Lawsuits (cont.)
|
|
4.
|
Lawsuits against Cellcom and its subsidiaries (cont.)
|
Amount of the claim
|
Number of claims
|
Amount of the claims
(millions of NIS)
|
||||||
Up to NIS 100 million
|
34 | 885 | ||||||
NIS 100 million to NIS 500 million
|
7 | 1,263 | ||||||
NIS 500 million to NIS 1 billion
|
1 | 606 | ||||||
Claims in which no amount was stated
|
8 | - | ||||||
Claims against Cellcom and additional defendants jointly
|
7 | 958 | ||||||
Claims against Cellcom and additional defendants in which no amount was stated
|
4 | - |
Note 23 - Contingent Liabilities, Commitments and Lawsuits (cont.)
|
C.
|
Lawsuits (cont.)
|
|
4.
|
Lawsuits against Cellcom and its subsidiaries (cont.)
|
|
b.
|
Environmental claims
|
|
5.
|
Lawsuits against Koor and its subsidiaries
|
Note 23 - Contingent Liabilities, Commitments and Lawsuits (cont.)
|
C.
|
Lawsuits (cont.)
|
|
5.
|
Lawsuits against Koor and its subsidiaries (cont.)
|
|
a.
|
Environmental claims
|
Amount of the claim
|
Number of claims
|
Amount of the claim (Millions of NIS)
|
||||||
Up to NIS 100 million
|
1 | 78 |
|
b.
|
Claims of employees, subcontractors, suppliers, authorities and others
|
|
6.
|
Lawsuits against Shufersal
|
Note 23 - Contingent Liabilities, Commitments and Lawsuits (cont.)
|
C.
|
Lawsuits (cont.)
|
|
6.
|
Lawsuits against Shufersal (cont.)
|
Amount of the claim
|
Number of claims
|
Amount of the claims
(in millions of NIS)
|
||||||
Up to NIS 100 million
|
34 | 620 | ||||||
Between NIS 100 and 500 million
|
1 | 133 |
Note 23 - Contingent Liabilities, Commitments and Lawsuits (cont.)
|
C.
|
Lawsuits (cont.)
|
|
6.
|
Lawsuits against Shufersal (cont.)
|
|
b.
|
Claims of employees, subcontractors, suppliers, authorities and other claims
|
|
7.
|
Lawsuits against Elron
|
Note 23 - Contingent Liabilities, Commitments and Lawsuits (cont.)
|
C.
|
Lawsuits (cont.)
|
|
7.
|
Lawsuits against Elron (cont.)
|
|
8.
|
Lawsuits against the IDB Tourism Group
|
Note 24 – Sales and services
|
|
For the year ended December 31
|
|||||||||||
2014
|
2013
|
2012
|
||||||||||
NIS millions
|
||||||||||||
From the sale of purchased products
|
11,532 | 11,843 | 11,540 | |||||||||
From the performance of works and services, primarily communications services
|
3,608 | 4,024 | 4,621 | |||||||||
Tourism services
|
1,001 | 1,059 | 1,223 | |||||||||
From the sale of communications equipment
|
1,005 | 942 | 1,356 | |||||||||
From the rental of buildings and from storage services
|
829 | 822 | 833 | |||||||||
From the sale of products that have been manufactured
|
129 | 716 | 285 | |||||||||
From the sale of apartments and land (1)
|
396 | 534 | 379 | |||||||||
From management fees and consultancy fees of an investments house
|
46 | 45 | 45 | |||||||||
From the sale of newspapers, advertising space and printing works
|
- | - | 180 | |||||||||
Total
|
18,546 | 19,985 | 20,462 | |||||||||
Note 25 – The Group's share of the profits (losses) of investee companies that are treated under the equity method of accounting, net
|
For the year ended December 31
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
NIS millions
|
||||||||||||
Profit (loss) under the equity method of accounting
|
||||||||||||
The Group's share of the net profit (loss) of investee companies treated under the equity method of accounting
|
30 | 112 | (777 | ) | ||||||||
Amortization of surplus cost for included companies
|
(40 | ) | (51 | ) | (97 | ) | ||||||
Loss on impairment in the value of investments
|
(490 | )(1) | - | (58 | ) | |||||||
Total net profit (loss) on the equity method basis
|
(500 | ) | 61 | (932 | ) |
Note 26 – Profit (loss) on disposal and the writing down of investments, assets and dividends
|
|
A.
|
Profit on disposal and increase in the value of investments and assets, dividends and profit as a result of an increase to control
|
For the year ended December 31
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
NIS millions
|
||||||||||||
Gain from the disposal of investments in investee companies
|
(1) 873 | 18 | 149 | |||||||||
Gain on increase in the value of investments that are measured at fair value through the statement of income
|
54 | (2) 126 | 25 | |||||||||
Dividend income and cash distributions from financial assets that are measured at fair value through profit and loss
|
24 | 9 | 22 | |||||||||
Cancellation of provision for impairment of assets
|
7 | 13 | 2 | |||||||||
Gain on the loss of control in a subsidiary and from the loss of significant influence in an affiliated company, including re-measurement to fair value of the equity rights that remain in the company being sold
|
- | 10 | 26 | |||||||||
Gain on the issuance of equity of investee companies to a third party
|
- | 1 | 5 | |||||||||
Gain on the re-measurement to fair value of equity rights in a company that has been acquired, which were held prior to the acquisition of control
|
- | 2 | - | |||||||||
Gain from disposal of assets
|
- | - | 12 | |||||||||
958 | 179 | 241 | ||||||||||
(1)
|
For details of the disposal of the investment in Given – see note 3.H.6.a above.
|
(2)
|
Restated, including a sum of NIS 83 million for the increase in value of Insurance Enterprise Holdings, which were presented as part of the discontinued activity, as stated in note 3.I.1 above.
|
|
B.
|
Loss on disposal, decrease in value and the writing down of investments and assets
|
For the year ended December 31
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
NIS millions
|
||||||||||||
Impairment in the value of assets and investments
|
(1) 405 | 89 | 385 | |||||||||
Impairment loss on investments measured at fair value through the statement of income
|
(2) 399 | 22 | 45 | |||||||||
Loss from loss of control in a subsidiary and from the loss of material influence in an included company, including a remeasurement for fair value of residual capital rights that remain in the sold company
|
(3) 32 | - | - | |||||||||
Loss on the disposal of assets
|
8 | 27 | 6 | |||||||||
Loss from the sale of investments in investee companies
|
- | - | 14 | |||||||||
844 | 138 | 450 | ||||||||||
(1)
|
For details regarding the amortization of goodwill for the corporation’s investments in Cellcom and Shufersal – see notes 10.d.1 and 10.d.2, respectively, above.
|
(2)
|
Including a loss from impairment of the investment in Clal Holdings Insurance Enterprises in a sum of NIS 360 million.
|
(3)
|
For details regarding the accounting treatment of TPD – see note 3.h.2.a above.
|
Note 27 – Changes in the fair value of investment property
|
For the year ended December 31
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
NIS millions
|
||||||||||||
A. Increase in the fair value of investment property
|
||||||||||||
Revaluation of the HSBC Building and the building in Chicago (see also note 7.b.(1) above)
|
272 | 175 | 354 | |||||||||
Revaluation of investment property in Israel (see also Note 7.b.(2) above)
|
167 | 242 | 186 | |||||||||
439 | 417 | 540 | ||||||||||
B. Impairment in the fair value of investment real estate
|
||||||||||||
Decrease in value of a commercial and office project in Las Vegas (GW) (see note 7.b.(3) above)
|
26 | 79 | - | |||||||||
Decrease in value of a building in Chicago
|
- | 18 | - | |||||||||
26 | 97 | - | ||||||||||
Note 28 –
|
Financing income and expenses
|
|
A.
|
Financing income
|
For the year ended December 31
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
NIS millions
|
||||||||||||
Financial assets and financial liabilities at fair value through the statement of income
|
||||||||||||
Net change in the fair value of financial assets
|
55 | 84 | 103 | |||||||||
Dividend income
|
- | - | 7 | |||||||||
Loans, receivables and financial instruments at amortized cost
|
||||||||||||
Income from interest in deposits in banks
|
63 | 87 | 128 | |||||||||
Income from interest on loans, deposits and receivables*
|
12 | 14 | 29 | |||||||||
Financing income on sale transactions in payments*
|
71 | 95 | 101 | |||||||||
Income from the self-purchase of bonds
|
- | - | 33 | |||||||||
Income from other financial instruments
|
||||||||||||
Change in value of a host contract in a hybrid financial instrument for a non-recourse loan of Koor (1)
|
928 | - | - | |||||||||
Other
|
||||||||||||
Net gain on changes in foreign currency exchange rates (3)
|
- | 323 | 60 | |||||||||
Financing income on assets designated for the payment of employee benefits
|
10 | 9 | 12 | |||||||||
Income from interest from investee companies that are treated under the equity method of accounting
|
33 | 25 | 316 | |||||||||
Others
|
28 | 28 | 35 | |||||||||
Total financing income
|
1,200 | 665 | 824 |
|
* Including index-linkage differentials.
|
Note 28 – Financing income and expenses (cont.)
|
|
B.
|
Financing expenses
|
For the year ended December 31
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
NIS millions
|
||||||||||||
Financial liabilities measured at amortized cost
|
||||||||||||
Interest expenses and linkage differentials on financial liabilities
|
1,389 | 2,045 | 2,062 | |||||||||
Change in the value of a host contract in a hybrid financial instrument for a non-recourse loan of Koor (1)
|
- | 181 | 161 | |||||||||
Financial assets and financial liabilities at fair value through the statement of income
|
||||||||||||
Change in the fair value of conditional consideration in respect of a business combination
|
7 | 6 | 7 | |||||||||
Interest expenses on financial liabilities
|
5 | 2 | 2 | |||||||||
Net negative change in the fair value of derivative financial instruments including instruments for hedging cash flows that have been transferred from equity (2)
|
592 | 176 | 19 | |||||||||
Other
|
||||||||||||
Net loss on changes in foreign currency exchange rates (3)
|
431 | - | - | |||||||||
Financing expenses on employee benefit liabilities (the discounting component)
|
14 | 13 | 18 | |||||||||
Other financing expenses on financial liabilities
|
- | 1 | 5 | |||||||||
Commissions
|
11 | 13 | 9 | |||||||||
Other financing expenses
|
45 | 24 | 30 | |||||||||
Total financing expenses
|
2,494 | 2,461 | 2,313 | |||||||||
Less capitalized credit costs
|
(19 | ) | (15 | ) | (16 | ) | ||||||
Total financing expenses reflected in the statement of income
|
2,475 | 2,446 | 2,297 | |||||||||
(1)
|
For details regarding the book value of the host contract in a hybrid financial instrument for a non-recourse loan of Koor, see note 16.A.3 above.
|
(2)
|
In 2013 and 2014, Koor recorded expenses of NIS 553 and NIS 85 million, respectively, for a change in the value of the embedded derivative in the hybrid financial instrument for the non-recourse loan. In 2012, Koor recorded income in a sum of NIS 17 million for a change in the value of the embedded derivative in the hybrid financial instrument for the non-recourse loan. The aforesaid amounts are included in the net negative change in the fair value of derivative financial assets.
|
(3)
|
Including an expense in a sum of NIS 426 million in 2014 and income in a sum of NIS 270 million and NIS 84 million in 2013 and 2012, respectively, for exchange rate differentials that were recorded for the host contract in the hybrid financial instrument for a non-recourse loan.
|
|
C.
|
Financing income and expenses, net, include the following amounts, relating to financial assets (liabilities), which are not presented at fair value through the statement of income:
|
For the year ended December 31
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
NIS millions
|
||||||||||||
Total interest income
|
147 | * | 202 | 259 | ||||||||
Total interest expenses
|
1,389 | 2,045 | 2,062 | |||||||||
|
*
|
Not including a change in the value of a host contract in a hybrid financial instrument for a non-recourse loan of Koor.
|
Note 29 – Cost of sales and services
|
For the year ended December 31
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
NIS millions
|
||||||||||||
Sales of products that have been manufactured:
|
||||||||||||
Materials
|
34 | 85 | 124 | |||||||||
Depreciation and amortization
|
4 | 12 | 37 | |||||||||
Salaries and social benefits
|
7 | 30 | 122 | |||||||||
External work
|
4 | 5 | 14 | |||||||||
Purchase of finished goods
|
- | - | 11 | |||||||||
Other manufacturing expenses (primarily energy expenses)
|
14 | 64 | 82 | |||||||||
Changes in inventory, work in progress and finished goods
|
(4 | ) | (7 | ) | (4 | ) | ||||||
59 | 189 | 386 | ||||||||||
Construction:
|
||||||||||||
Construction costs
|
189 | (1) 375 | 128 | |||||||||
Land
|
108 | 57 | 79 | |||||||||
Provision for a loss
|
19 | (1) 7 | - | |||||||||
Other costs
|
58 | 61 | 44 | |||||||||
374 | 500 | 251 | ||||||||||
Works and services:
|
||||||||||||
Rental of buildings and storage services
|
145 | 147 | 142 | |||||||||
Rental fees and ancillary expenses
|
339 | 391 | 394 | |||||||||
Performance of works and services, primarily communications services
|
905 | 1,099 | 1,188 | |||||||||
Salaries
|
652 | 658 | 657 | |||||||||
Depreciation and amortization
|
518 | 576 | 614 | |||||||||
Inventory written down
|
292 | 282 | 284 | |||||||||
Cost of tourism services and other services
|
768 | 793 | 940 | |||||||||
Sale of purchased products
|
8,318 | (2) 8,390 | (2) 8,207 | |||||||||
Sale of communications equipment
|
738 | 719 | 1,013 | |||||||||
12,675 | 13,055 | 13,439 | ||||||||||
Others:
|
||||||||||||
Provision for impairment in value
|
9 | - | 3 | |||||||||
Royalties and levies
|
98 | 91 | 129 | |||||||||
Total others
|
107 | 91 | 132 | |||||||||
Total
|
13,215 | 13,835 | 14,208 |
Note 30 – Sales and marketing expenses*
|
For the year ended December 31
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
NIS millions
|
||||||||||||
Wages, salaries and social benefits (1)
|
1,333 | 1,442 | 1,353 | |||||||||
Advertising
|
229 | 265 | 254 | |||||||||
Depreciation and amortization
|
350 | (3) | 299 | 318 | ||||||||
Rent, building maintenance and municipal taxes
|
979 | (3) | 883 | 891 | ||||||||
Commissions and royalties
|
217 | 206 | 214 | |||||||||
Packaging and delivery expenses
|
- | - | (2) | 20 | (2) | |||||||
Others
|
395 | 406 | 377 | |||||||||
3,503 | 3,501 | 3,427 | ||||||||||
(1)Including share based payments.
|
2 | 7 | 2 | |||||||||
*Less participation of suppliers.
|
46 | 48 | 50 | |||||||||
(2)Reclassified – see note 1.f.(2) above
|
||||||||||||
(3)For details regarding one-time expenses that were recorded for a current business program in Shufersal, see note 3.H.3.b. above.
|
||||||||||||
Note 31 – Research and development expenses
|
For the year ended December 31
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
NIS millions
|
||||||||||||
Wages and salaries (1)
|
357 | 388 | 362 | |||||||||
Depreciation and amortization
|
163 | 199 | 246 | |||||||||
Rent and building maintenance
|
97 | 117 | 122 | |||||||||
Consulting and legal (2)
|
182 | 138 | 128 | |||||||||
Provision for doubtful and bad debts
|
33 | 83 | 79 | |||||||||
Others
|
202 | 214 | 254 | |||||||||
1,034 | 1,139 | 1,191 | ||||||||||
(1)Including share based payments.
|
2 | 10 | 11 | |||||||||
(2)Including consulting services relating to the purchase of real estate assets abroad.
|
50 | 4 | 13 | |||||||||
Note 32 – Taxes on income
|
|
A.
|
Tax expense components
|
For the year ended December 31
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
NIS millions
|
||||||||||||
Current tax expenses
|
||||||||||||
Taxes for current period (1)
|
244 | 396 | 503 | |||||||||
Net adjustments for previous years
|
(13 | ) | (6 | ) | (42 | ) | ||||||
Total current tax expenses
|
231 | 390 | 461 | |||||||||
Deferred tax expenses (income)
|
||||||||||||
Change in deferred taxes for temporary provisions (1)
|
128 | (9 | ) | 165 | ||||||||
Change in deferred taxes as a result of a change in the tax rates
|
- | 81 | 2 | |||||||||
Total deferred tax expenses
|
128 | 72 | 167 | |||||||||
Total tax es on income (including tax for discontinued operations)
|
359 | 462 | 628 | |||||||||
After neutralization of taxes for discontinued operations
|
- | (158 | ) | (176 | ) | |||||||
Taxes on income expenses from continuing operations
|
359 | 304 | 452 | |||||||||
|
(1)
|
Takes into account losses, tax benefits and temporary provisions from previous years, for which deferred taxes were not recorded as stated in section I below.
|
|
B.
|
The tax rates that apply to the income of the companies in the Group
|
·
|
The following are the relevant tax rates in Israel in the years 2012-2014:
|
·
|
In August 2013, the Knesset passed legislation, increasing the tax rate for companies to 26.5% (an increase of 1.5%) from January 1, 2014, and also amending the Law for the Encouragement of Capital Investments such that as from that date, the tax that will apply to a preferred company in Development Area A will stand at 9% and the tax rate that will apply to companies in the rest of the country will stand at 16%. The current taxes for the reported periods are calculated in accordance with the tax rates presented above.
|
|
C.
|
The non-application of International Financial Reporting Standards (IFRS) for tax purposes
|
Note 32 –
|
Taxes on income (cont.)
|
|
D.
|
Reconciliation between the amount of the theoretical tax on the income (loss) before taxes on income and the tax expenses
|
For the year ended December 31
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
NIS millions
|
||||||||||||
Loss before taxation, as reported in the statement of income
|
(491 | ) | (1) 54 | (504 | ) | |||||||
The Group's principal tax rate
|
26.5 | % | 25 | % | 25 | % | ||||||
Tax (tax saving) calculated in accordance with the Group's principal tax rate
|
(130 | ) | 14 | (126 | ) | |||||||
Tax (tax saving) in respect of:
|
||||||||||||
The Group's share of the (profits) losses after tax on (profits of) disposal and write-downs of investee companies that are exempt from taxation, net
|
230 | (1) (110) | 271 | |||||||||
Adjustments in respect of different tax rates in subsidiary companies that operate overseas
|
24 | 30 | 53 | |||||||||
Change in timing differences in respect of which deferred taxes have not been recognized
|
127 | 185 | 52 | |||||||||
Losses, tax benefits and timing differences from previous years in respect of which deferred taxes have not been recorded
|
(150 | ) | (541 | ) | (23 | ) | ||||||
Reduction of deferred tax assets that were recognized in previous years for losses carried forward
|
- | 10 | 32 | |||||||||
Losses and current benefits for tax purposes in respect of which a deferred tax asset has not been recognized and credits for which a tax benefit has not been recognized
|
259 | 687 | 216 | |||||||||
The impact of changes in the tax rates
|
- | 71 | - | |||||||||
Disallowed expenses
|
25 | 18 | 31 | |||||||||
Income that is exempt from taxation
|
(8 | ) | (42 | ) | (25 | ) | ||||||
Prior year taxation
|
(21 | ) | - | (2 | ) | |||||||
Other differences
|
3 | (18 | ) | (27 | ) | |||||||
Taxes on income
|
359 | 304 | 452 | |||||||||
|
(1)
|
Restated – See Note 3.i.1 above on the subject of discontinued operations.
|
Note 32 – Taxes on income (cont.)
|
|
E.
|
Final tax assessments
|
|
1.
|
The Company – up to and including the 2012 tax year.
|
|
2.
|
For companies in the Group – up to and including the tax years 1996-2013.
|
|
F.
|
Losses and deductions for tax purposes that are available to be transferred to the coming years:
|
|
1.
|
As of December 31, 2014, the Company has capital losses of NIS 4.1 billion and business losses of NIS 1.7 billion, which are available to be carried forward. Deferred taxes have not been recorded in respect of these losses since there is no certainty that they will be exploited in the foreseeable future.
|
|
2.
|
The balance of the losses for tax purposes of consolidated companies amounts to approximately NIS 13.2 billion as of December 31, 2014, and deferred taxes have not been recorded in respect of NIS 11.2 billion of these losses since there is no certainty that they will be utilized in the foreseeable future.
|
|
G.
|
In 2013, the Group recognized a deferred tax asset in an amount of NIS 108 million and a deferred tax liability in an amount of NIS 15 million, in respect of timing differences relating to Given and in respect of unexploited tax losses, which are expected to be exploited at the time of the completion of the transaction that is mentioned in note 3.H.6.a above. As a result, in 2013 the Group recorded net deferred tax income of NIS 100 million (the Company's share of the aforesaid income amounted to NIS 23 million) and a capital reserve on translation differences of NIS 5 million, which is attributed to the Company. In 2014, the Group recorded a reversal of the amounts of the aforesaid deferred taxes on the date of the actual disposal of Given.
|
|
H.
|
Further to what is stated in note 3.H.3.a above with regard to a program for the split of Shufersal’s real estate, the spin-off was made as a split exempt from Income Tax and Land Appreciation Tax pursuant to the provisions of part E2 of the Income Tax Ordinance and subject to the terms provided therein. The main restrictions that were imposed on Shufersal Real Estate and Shufersal as a result of the spin-off, which mostly end on March 31, 2015, mainly concern the issue of the shares of the Shufersal Real Estate Company and the sale of assets by Shufersal Real Estate, and reduced Income Tax and an exemption from real estate taxation for real estate for which construction has not yet begun or real estate/branches whose construction is in progress and where the utilized building rights, prior to the spin-off, were less than 30% of the building rights that can be utilized.
|
Note 32 – Taxes on income (cont.)
|
|
I.
|
Deferred tax assets and liabilities
|
Fixed assets
|
Employee benefits
|
Financial instruments
|
Deductions and losses carried forward for tax purposes
|
Intangible assets
|
Investment property
|
Others
|
Total
|
|||||||||||||||||||||||||
NIS millions
|
||||||||||||||||||||||||||||||||
Movement in deferred tax assets (liabilities):
|
||||||||||||||||||||||||||||||||
Balance as of January 1, 2013
|
(437 | ) | 84 | (179 | ) | 475 | (659 | ) | (866 | ) | 79 | (1,503 | ) | |||||||||||||||||||
Changes reflected in the statement of income
|
20 | 9 | 125 | 208 | 18 | (330 | ) | (41 | ) | 9 | ||||||||||||||||||||||
Changes reflected in the statement of other comprehensive income
|
6 | (4 | ) | 1 | (7 | ) | - | 7 | 9 | 12 | ||||||||||||||||||||||
Business combinations
|
- | - | (1 | ) | 10 | (3 | ) | - | 1 | 7 | ||||||||||||||||||||||
Changes as a result of a change in the tax rates
|
(25 | ) | 3 | (1 | ) | 11 | (32 | ) | (45 | ) | 8 | (81 | ) | |||||||||||||||||||
Discontinuation of consolidation and disposal groups that are held for sale, net
|
(4 | ) | (39 | ) | 62 | (121 | ) | 335 | 23 | 1 | 257 | |||||||||||||||||||||
Balance as of December 31, 2013
|
(440 | ) | 53 | 7 | 576 | (341 | ) | (1,211 | ) | 57 | *(1,299 | ) | ||||||||||||||||||||
Changes reflected in the statement of income
|
(16 | ) | 7 | (109 | ) | 134 | 48 | (199 | ) | 7 | (128 | ) | ||||||||||||||||||||
Changes reflected in the statement of other comprehensive income
|
(11 | ) | 7 | (4 | ) | 40 | - | (52 | ) | (8 | ) | (28 | ) | |||||||||||||||||||
Balance as of December 31, 2014
|
(467 | ) | 67 | (106 | ) | 750 | (293 | ) | (1,462 | ) | 56 | *(1,455 | ) | |||||||||||||||||||
Note 32 – Taxes on income (cont.)
|
|
I.
|
Deferred tax assets and liabilities (cont.)
|
|
1.
|
Deferred tax assets and liabilities that have been recognized (cont.)
|
As of December 31, 2014
|
||||||||||||||||||||||||||||||||
Fixed assets
|
Employee benefits
|
Financial instruments
|
Deductions and losses carried forward for tax purposes
|
Intangible assets
|
Investment property
|
Others
|
Total
|
|||||||||||||||||||||||||
NIS millions
|
||||||||||||||||||||||||||||||||
Deferred tax assets
|
40 | 70 | 19 | 750 | 5 | - | 99 | 983 | ||||||||||||||||||||||||
Deferred tax liabilities
|
(507 | ) | (3 | ) | (125 | ) | - | (298 | ) | (1,462 | ) | (43 | ) | (2,438 | ) | |||||||||||||||||
Total
|
(467 | ) | 67 | (106 | ) | 750 | (293 | ) | (1,462 | ) | 56 | (1,455 | )* |
|
*
|
Presented in the Statement of Financial Position.
|
As of December 31
|
||||||||
2014
|
2013
|
|||||||
NIS millions
|
||||||||
Deferred tax assets
|
53 | 157 | ||||||
Deferred tax liabilities
|
(1,508 | ) | (1,456 | ) | ||||
(1,455 | ) | (1,299 | ) | |||||
Note 32 – Taxes on income (cont.)
|
|
I.
|
Deferred tax assets and liabilities (cont.)
|
|
2.
|
Timing differences for which deferred taxes have not been recognized
|
As of December 31
|
||||||||
2014
|
2013
|
|||||||
NIS millions
|
||||||||
Deductible timing differences
|
11,472 | 11,698 | ||||||
Losses for tax purposes
|
17,084 | 19,334 | ||||||
28,556 | 31,032 | |||||||
Note 33 - Related and Interested Parties29
|
A.
|
Insignificant transactions that are not extraordinary
|
|
1.
|
The Audit Committee (and in previous years, the Company’s Board of Directors) determined guidelines and rules for classifying a transaction of the Company or of its subsidiary with an interested party as an insignificant transaction as provided in regulation 41(a3)(1) of the Securities Regulations (Annual Financial Statements) 5770 - 2010 (“the Financial Statements Regulations”). These rules and guidelines are used to examine the scope of the disclosure required in a periodic report and in the prospectus (including in shelf prospectus reports) with respect to a transaction of the Company, an entity controlled by it and a related company with a controlling shareholder or in which the controlling shareholder has an interest in the approval of the aforementioned transaction, as specified in regulation 22 of the Securities Regulations (Periodic and Immediate Reports), 5730 - 1970 (“the Periodic Reports Regulations”) and in regulation 54 of the Securities Regulations (Details of a Prospectus and Draft of a Prospectus – Structure and Shape), 5729 - 1969 (hereunder – “the Prospectus Details Regulations”), for examining the need to provide an immediate report on the said transaction of the Company as specified in regulation 37A(6) of the Periodic Reports Regulations, for the purpose of approving transactions with a controlling owner or in which the controlling owner has a personal interest, which are not extraordinary and are not negligible, pursuant to the provisions of section 117(2a) of the Companies Law and for the purpose of approving negligible transactions with an interested party or in which an interested party has a personal interest (all of which as stated in section 126 of the company’s Articles).30 (The types of transactions specified in the aforementioned Financial Statement Regulations, Periodic Reports Regulations and Prospectus Details Regulations are hereafter referred to as “interested party transactions”).
|
|
Note 33 - Related and Interested Parties (cont.)
|
A.
|
Insignificant transactions that are not extraordinary (cont.)
|
|
2.
|
To the best of the Company’s knowledge, the Company and its subsidiaries conduct or conducted insignificant transactions that are not extraordinary with interested parties of the Company, such transactions between the Company and related parties of the Company, including among themselves (including joint transactions between companies in the Group), and they have commitments to conduct such transactions of the following types and characteristics:
|
29
|
It should be noted that (a) as part of the approval of the creditors’ arrangement in IDB Holding Corporation Ltd. By the court on January 5, 2014 (in accordance with the outline of Mr. Eduardo Elsztain and a corporation controlled by him (Dolphin Fund Limited) together with E.T.H. M.R.M. Extra Holdings Ltd. (which is controlled by Mr. Mordechai Ben-Moshe)), the control of IDB Holdings (and indirectly also the Company) was taken from the previous owners, Nochi Dankner, Shelly Bergman, Ruth and Isaac Manor and Avraham Livnat (including parties related to any of the above) (“the previous controlling shareholders”). Consequently, starting from the aforesaid date, the Company no longer regards transactions in which the previous controlling shareholders have or had a personal interest as transactions in which a current controlling shareholder in the Company has a personal interest or as transactions with related parties; (b) Until July 5, 2012, the date of completion of the sale of most of the Company's holdings in Clal
|
Industries Ltd. (“Clal Industries”), Clal Industries was a (consolidated) subsidiary under the control of the Company. As from the aforesaid date and in respect of 2012 and 2013, and until March 6, 2013, Clal Industries, for the sake of caution and for the purpose of this note, is considered a related party of the Company. On March 6, 2013, IDB Development sold the rest of its holdings (approx. 10.6%) in Clal Industries. For the sake of caution, from March 6, 2013 until the end of 2013, transactions of the Company and/or of companies under its control with companies in the Clal Industries Group may have been considered transactions in which the controlling shareholder in the Company during the relevant periods (Mr. Avraham Livnat) might have a personal interest due to business ties of companies controlled by him with a company controlled by Clal Industries; and (c) as a result the appointment of a trustee for the Company’s holdings in Clal Holdings Insurance Enterprises, as described in note 3.H.5.b. above, the Company discontinued the consolidation of the financial statements of Clal Holdings Insurance Enterprises in the Company’s financial statements for the third quarter of 2013, and therefore, this note includes transactions of the Clal Holdings Insurance Enterprises Group with the Company and with its related parties in respect of 2013 and 2014.
|
30
|
In this regard, the Audit Committee determined in March 2014 that transactions as aforesaid in which the controlling shareholder has a personal interest, which are not extraordinary or negligible, shall be approved by the Audit Committee, and in March 2015, the Audit Committee determined that transactions with an interested party or in which an interested party has a personal interest (all of which as stated in article 126 of the company’s Articles), which are negligible transactions, do not require approval of the Audit Committee and will be approved pursuant to the provisions of the law and the Articles. A banking corporation (Union Bank of Israel Ltd.) is considered, for the purpose of this note, an interested party of the Company as well as a related party to the Company and other companies in the IDB Group until 2013 (due to the fact that it is a corporation under the control of Mrs. Ruth Manor, who was one of the former controlling shareholders of the Company); Clal Finance Batucha, Epsilon Investment House Ltd. (“Epsilon”) and Clal Insurance Enterprises are considered interested parties of companies of the IDB Group and related parties of the Company and companies of the IDB Group during the periods relevant to this note.
|
Note 33 - Related and Interested Parties (cont.)
|
A.
|
Insignificant transactions that are not extraordinary (cont.)
|
|
2.
|
(cont.)
|
|
3.
|
According to the covenants and guidelines, if no special qualitative considerations arise from the overall circumstances of the matter, an interested party transaction that is not an extraordinary transaction (i.e., it is executed in the ordinary course of business, at market terms and is not supposed to have a material effect on the profitability, assets or liabilities of the Company) will be considered insignificant if the relevant ratio calculated for the transaction is less than 0.5% and the amount of the transaction does not exceed NIS 8 million (with this amount being adjusted from time to time according to the rate of increase in the Consumer Price Index from the index known at the beginning of 2010). As of December 31, 2014, this amount stands at NIS 8.7 million (‘the amount of the negligibility ceiling”). In every interested party transaction that is being examined for insignificance, one or more of the ratios relevant to the specific transaction will be calculated on the basis of the most recent audited or reviewed consolidated financial statements of the Company: (a) for purchases of fixed assets (“non-current asset”) – the amount of the transaction compared to total assets in the statement of financial position that is included in the most recent consolidated financial statements of the Company; (b) for sales of fixed assets (“non-current asset”) – the gain/loss from the transaction compared to the average annual profit (meaning for four quarters) in the last 12 quarters for which audited or reviewed consolidated financial statements of the Company were published.
|
Note 33 - Related and Interested Parties (cont.)
|
A.
|
Insignificant transactions that are not extraordinary (cont.)
|
|
3.
|
(cont.)
|
|
4.
|
The classification of a transaction as insignificant was made on the basis of the aforementioned covenants and guidelines that were valid on the date of the transaction, as relevant.
|
Note 33 - Related and Interested Parties (cont.)
|
B.
|
Transactions with controlling shareholders or in which controlling shareholders have a personal interest, which are listed in section 270(4) and/or 270(4a) of the Companies Law, that were entered into in 2014 or on a date between the end of the reporting year and the date of filing the report or that are in effect on the reporting date
|
|
1.
|
Until 2014 (inclusive), the Company and IDB Holdings shared manpower that served in both companies (except for employees who were employed in IDB Holdings itself (the former Chairman of the Board and the former Executive VP’s of IDB Holdings), in accordance with an arrangement which was approved by the general meeting of the Company’s shareholders in January 2004, after approval by its Audit Committee and Board of Directors (“the manpower arrangement”), regarding the distribution of the payroll expenses paid to the shared manpower. In accordance with the manpower arrangement, the Company is the employer of the relevant employees, and IDB Holdings participated in their manpower expenses at the rate of 20% from the said expenses, up to an annual maximum amount which amounted, as of May 2014, to NIS 23.4 million. The manpower arrangement also stipulated that it did not apply to any payments paid by the Company to the Chairman of the Board of the Company and/or his deputies, and it provides, after an amendment to the manpower arrangement was approved in March 2011 by the Board of Directors of the Company, after having been approved by the Company's Audit Committee, that when Mr. Haim Gavrieli begins to serve as the Company’s CEO on April 1, 2011, the manpower arrangement would also apply to amounts paid by the Company to the Company’s CEO as from that date.
|
|
For the period from January 1, 2014, until May 2014 (inclusive), the Company paid expenses for joint manpower in a sum of NIS 4.6 million; IDB Holdings contributed to these expenses in an amount of 20%, i.e., a sum of NIS 0.92 million. In addition, IDB Holdings paid the Company a sum of NIS 410 thousand, which constitutes 20% of the amounts of provisions for the termination of employment relations, vacation and holiday pay for the joint manpower, which were recorded in the Company’s books.
|
|
According to understandings reached between the Company and IDB Holdings, since June 2014 the aforesaid agreement and the arrangement stated in subsections (2) and (3) below no longer apply, and new consents apply between the Company and IDB Holdings, according to which IDB Holdings pays from that time fixed monthly amounts for management services that are provided by the Company to IDB Holdings. For the period from June 1, 2014, until December 31, 2014, IDB Holdings paid the Company a sum of NIS 850 thousand for the management services. On March 30, 2015, the Audit Committee and the Board of Directors of the Company approved the Company’s transaction with IDB Holdings (through the trustees of the arrangement) in the agreement (in this section b – “the Management Services Agreement”), according to which management services will be provided to IDB Holdings by the Company or someone acting on its behalf (“the service providers”), from January 1, 2015, until August 31, 2015 (or earlier, insofar as the sale of the shelf corporation of IDB Holdings will be completed before that date). as part of the Management Services Agreement, there are provisions, inter alia, with regard to granting a release from liability, pursuant to the law, to the service providers for any damage resulting from a breach of a duty of care in an act done in gone faith when providing the services, starting from January 2014. The Management Services Agreement is subject to the approval of the court. For providing the services pursuant to the Management Services Agreement, IDB Holdings shall pay the Company for the first quarter of 2015 a fixed monthly sum of NIS 80 thousand (plus VAT) and for the remainder of the months until the agreement ends, a fixed monthly sum of NIS 65 thousand (plus VAT).
|
Note 33 - Related and Interested Parties (cont.)
|
B.
|
Transactions with controlling shareholders or in which controlling shareholders have a personal interest, which are listed in section 270(4) and/or 270(4a) of the Companies Law, that were entered into in 2014 or on a date between the end of the reporting year and the date of filing the report or that are in effect on the reporting date (cont.)
|
|
2.
|
Until May 2014 (inclusive), the Company and IDB Holdings had arrangements that were approved by the general meeting of the Company’s shareholders in January 2004, after having been approved by the Company's Audit Committee and Board of Directors, as follows:
|
|
a.
|
The Company paid the office expenses, property insurance, employers liability, third party responsibility and employees fidelity, refreshment and entertainment expenses and related expenses (“the additional expenses”), and IDB Holdings participated in these expenses at the rate of 20% (up to an annual maximum amount of NIS 310 thousand, linked to the CPI, with the addition of 20% per annum of this amount beginning from January 1, 2004; as of May 31, 2014, the aforesaid maximum amount was NIS 2.59 million). In 2014 (up to and including May 2014), the Company and IDB Holdings paid the additional expenses in a total amount of NIS 0.68 million, of which the Company’s share was NIS 0.55 million (in 2013 and 2012, the total amount of the additional expenses stood at NIS 1.72 million and NIS 1.99 million, respectively, of which the Company’s share was NIS 1.38 million and NIS 1.59 million, respectively).
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b.
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The Company paid IDB Holdings, for each year (up to and including May 2014), 80% of the annual depreciation of the furniture and equipment (“the furniture and equipment”) owned by IDB Holdings which serve both companies at the Azrieli Center in Tel Aviv (up to an annual maximum of NIS 640 thousand, linked to the CPI, that increases each year by 20%, as from January 1, 2004; as of May 31, 2014, the aforesaid maximum amount was NIS 5.3 million). For this purpose, it should be noted, that the annual amount of the depreciation on the furniture and equipment, based on figures in the books of IDB Holdings as of May 31, 2014, amounted to NIS 8.6 thousand (in 2013 and 2012, the amount stood at NIS 23.3 thousand and NIS 29.7 thousand, respectively). The Company and IDB Holdings split the amount so that the Company paid 80% and IDB Holdings paid 20%.
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As stated in subsection 1 above, according to the understandings reached between the Company and IDB Holdings, starting from June 2014, the aforesaid arrangements no longer apply, and new consents apply between the Company and IDB Holdings according to which IDB Holdings pays from that date fixed monthly amounts for management services that are provided by the Company to IDB Holdings.
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3.
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a.
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In August 2004 the Company entered into an agreement with Clal Industries (through a wholly-owned subsidiary)31, as well as with DIC and Property & Building, regarding the division of the use of the space leased by the Company at the Azrieli Center in Tel Aviv that includes offices, parking spaces and storage space, which is used by the said companies as well as the Company (“the leasehold”), and regarding the breakdown of the rental and related fees in respect of the leasehold as from May 1, 2004 (“the expense breakdown agreement”). The Company’s undertaking in the Expense Breakdown Agreement was approved by the general meeting of the Company’s shareholders in September 2004, after it was approved by its Audit Committee and Board of Directors. The Expense Breakdown Agreement provides, inter alia, that additional companies of the IDB Group may request to join the arrangements between the parties, following which, at the terms provided in it. In July 2005, K.B.A. Townbuilders Group Ltd. (a company which was controlled by Clal Industries and was held by Property & Building) joined the Expense Breakdown Agreement;32 as of September 2006, Koor joined the Expense Breakdown Agreement; and as of May 2010, Modiin – Energy Management (1992) Ltd., a company controlled (indirectly) by the Company, joined the agreement33 (the aforesaid companies together with the Company, Clal Industries, DIC and Property & Building are hereinafter called: “the participating companies”).
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31
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As at January 1, 2014, this agreement was assigned to Clal Industries Ltd., with the consent of the parties to the agreement.
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32
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It is noted that in August 2013, Property & Building sold its holdings in this company, and as from September 30, 2013, this company does not make use of the leasehold, and accordingly, does not participate in the distribution of expenses.
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33
|
After the date of the Statement of Financial Position, the Company and Modiin – Energy Management (1992) Ltd. reached understandings with regard to a past debt of Modiin that was in dispute with regard to this agreement.
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Note 33 - Related and Interested Parties (cont.)
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B.
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Transactions with controlling shareholders or in which controlling shareholders have a personal interest, which are listed in section 270(4) and/or 270(4a) of the Companies Law, that were entered into in 2014 or on a date between the end of the reporting year and the date of filing the report or that are in effect on the reporting date (cont.)
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3.
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a.
|
(cont'd)
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Under the Expense Breakdown Agreement, the Company places parts of the leasehold at the disposal of the participating companies and each one of the participating companies bears the relative share of the rental and related expenses pertaining to the leasehold, on the basis of the ratio of the number of employees employed by that company in the leasehold’s premises, to the total number of employees employed by all of the participating companies in the office space, without taking into consideration the operating staff that serves all the participating companies in the leasehold’s premises and the payment for parking spaces and storage space included in the leasehold, which is based on the space actually used by each company.
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b.
|
In January 2004, after receiving the approval of the Company’s Audit Committee and Board of Directors, the general meeting of the Company’s shareholders approved arrangements between the Company and IDB Holdings regarding the breakdown of the rental and related payments in respect of certain areas the Company leases at the Azrieli Center in Tel Aviv (as described in section (a) above). In accordance with these arrangements, commencing on January 1, 2004, the Company paid 80% of the rental and related payments that were payable by it in accordance with the arrangements described in subsection a above, while IDB Holdings paid 20% of the said amounts, until May 2014 (inclusive). Since June 2014, new consents have come into effect between the Company and IDB Holdings (through the trustees of the arrangement), according to which IDB Holdings pays fixed monthly amounts (for further details, see subsection 1 above).
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Note 33 - Related and Interested Parties (cont.)
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B.
|
Transactions with controlling shareholders or in which controlling shareholders have a personal interest, which are listed in section 270(4) and/or 270(4a) of the Companies Law, that were entered into in 2014 or on a date between the end of the reporting year and the date of filing the report or that are in effect on the reporting date (cont.)
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4.
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In December 2005, after receiving the approval of its Audit Committee and Board of Directors, the Company’s general meeting approved the registration of the Company and of a wholly owned subsidiary as a “single dealer” together with IDB Holdings in accordance with the Value Added Tax Law, 5736 - 1975. The registration as a single dealer is not supposed to change the overall tax liability of the consolidated dealers. Nevertheless, such a registration creates a partnership for VAT purposes that can create a joint obligation of the single dealer for all the debts accumulated in the consolidation period by each one of the dealers included in the dealers’ consolidation. The Company and IDB Holdings have undertaken towards each other (“the other company”) to indemnify the other company for any amount the other company is required to pay (if at all) by the tax authorities, which is due to a debt not relating to a transaction executed by the other company, and therefore the other company is not required to pay VAT on it at source. In June 2014, the registration of the Company and IDB Holdings as one dealer as aforesaid was separated, and each of the companies was registered as a separate dealer. As of the date of separating the registration as aforesaid and as of the date of publishing the report, there were no liabilities between the Company and IDB Holdings. However, in view of the state of IDB Holdings, it is possible that the Company will have an exposure in an immaterial amount for the aforesaid.
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5.
|
Officers’ liability insurance, letters of indemnity, officers’ letter of release from liability and payment of remuneration to directors
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a.
|
Officers’ liability insurance:
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The liability of the officers of the Company, IDB Holdings and some of their investee companies, including officers who and/or whose relatives are controlling shareholders of the Company, was and is insured by several insurance policies as stated in this note below:
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The July 2013 decisions – In July 2013, the general shareholders’ meeting of the Company approved (after approval was given by of the Company’s Remuneration Committee and Board of Directors) entering into transactions, from time to time, of the Company, IDB Holdings and most of the private corporations held by them (not through public companies) (“the IDB Holdings Division”) in insurance policy/policies, which will be shared by the companies of the IDB Holdings Division, or which will be separate for any of them, for a number of insurance periods which will not cumulatively exceed three years, beginning on August 1, 2013, which will include officers’ liability insurance, including officers and/or relatives of such officers who are controlling shareholders in the Company, in which the controlling shareholder of the Company have a personal interest in their service / employment, as these will be from time to time during those periods, whereby such engagements may also be made by way of extending, from time to time, existing policies, in whole or in part, including by changing the terms of the policies which will be extended, as aforesaid, and/or by ways of purchasing insurance cover for a period of up to two years after the end of the policy which ended with respect to claims which will be filed for the first time after the end of that policy, in respect of actions which were performed before the end of the policy period (meaning, the purchase of a “disclosure period” for a period of up to two years), in the event of non-renewal or cancellation of an existing policy - in accordance with the principal terms of the agreement specified in the decisions of July 2013, including, inter alia, a total maximum liability limit of up to $ 140 million, per claim and cumulatively for the insurance period, as well as a limit applicable to the annual premiums for any insurance year which will not exceed $ 1 million for the policy shared by the companies of the IDB Holdings Division, with the addition of 20% per year (whereby, out of the above amount, the share of each one among IDB Holdings and the Company (along with the rest of the shared companies) will not exceed half of the relevant amount per year), or a total of $ 800 thousand per policy in case of a separate policy for each IDB Holdings and the Company (with or without additional private headquarter companies) for a given insurance year, with an increase of 20% per year. Moreover, such insurance policies can be issued by insurers controlled by Clal Insurance Enterprise Holdings, including its subsidiary Clal Insurance Company Ltd.
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Note 33 - Related and Interested Parties (cont.)
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B.
|
Transactions with controlling shareholders or in which controlling shareholders have a personal interest, which are listed in section 270(4) and/or 270(4a) of the Companies Law, that were entered into in 2014 or on a date between the end of the reporting year and the date of filing the report or that are in effect on the reporting date (cont.)
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|
5.
|
Officers’ liability insurance, letters of indemnity, officers’ letter of release from liability and payment of remuneration to directors (cont.)
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|
a.
|
Officers’ liability insurance: (cont.)
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(“Clal Insurance”), and in such a case (as long as Clal Holdings Insurance Enterprises is controlled by the Company), the insurer will not be involved in determining the insurance premium for those policies by the reinsurers, and the amount of the handling fees that will be paid to the insurer shall not deviate from what is accepted in the insurance market for transactions of such a type and scope as of the date of the transaction, and shall not exceed 10% of the premiums paid for the aforesaid policies.
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|
It should be noted that the aforementioned decisions regarding the Company’s engagements in officer’s liability insurance policies were also approved on the dates specified above by the general shareholders’ meeting of IDB Holdings (after approval by its Remuneration Committee and Board of Directors).
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|
The 2013-2014 policy – According to the decisions of July 2013, companies of the IDB Holdings Division purchased an officers’ liability insurance policy with respect to the period of one year beginning on December 1, 2013, the terms of which are in accordance with the principal terms of the engagement as determined in the resolutions from July 2013, with liability limits of $ 50 million per incident and cumulatively, at a total cost of $990 thousand (the Company paid half of the cost).
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As part of the aforesaid policy, it is stipulated inter alia that the provision regarding “transaction” events (as mentioned below) will not apply with respect to any event which was under the auspices of the Court’s decision. Following the taking out of a kind of “run off” type policy, the coverage under the policy was limited solely to claims that will be filed during the insurance period for acts done after December 1, 2013.
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In this regard, a ‘transaction’ event is one of the following events: (1) a consolidation or merger into another entity or a sale of the main assets to another; (2) a purchase by any person or entity (whether separately or together with others) of more than 50% of the voting rights or the right to appoint directors; (3) becoming a subsidiary of another entity or a change of control; or (4) insolvency, receivership, bankruptcy or liquidation.
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Note 33 - Related and Interested Parties (cont.)
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B.
|
Transactions with controlling shareholders or in which controlling shareholders have a personal interest, which are listed in section 270(4) and/or 270(4a) of the Companies Law, that were entered into in 2014 or on a date between the end of the reporting year and the date of filing the report or that are in effect on the reporting date (cont.)
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|
5.
|
Officers’ liability insurance, letters of indemnity, officers’ letter of release from liability and payment of remuneration to directors (cont.)
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|
a.
|
Officers’ liability insurance: (cont.)
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|
Changes in the 2013-2014 policy – On the date of completing the creditors’ arrangement in IDB Holdings and listing the shares of the Company on the Stock Exchange, the Company ceased to be a subsidiary of IDB Holdings, and in the absence of a change of the aforesaid policy, the policy was not to cover the officers of the Company for acts during the remainder of the insurance policy.
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|
In view of the aforesaid, the Company and IDB Holdings entered into an agreement on May 7, 2014, with regard to changes in the policy that relate to settling the continued insurance cover of officers in the Company, according to which the cover will continue to apply as it was at the time that the Company was a subsidiary of IDB Holdings during the balance of the insurance period of the policy, provided that liability for the listing of the Company’s shares on the Stick Exchange will be excluded and liability for the expected publication of the shelf prospectus by the Company and the issues of securities pursuant thereto will be excluded (‘the agreement’).
This agreement was signed following the Remuneration Committee, the Audit Committee and the Board of Directors of the company gave its approval on May 5, 2014, and the general meeting of the Company gave its approval on May 7, 2014, for the Company to enter into the agreement.
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|
The main points of the agreement are as follows: (a) the IDB Development Group (the Company and specific subsidiaries stated above, jointly: ‘the IDB Development Group’) will continue to be insured in accordance with the policy even after the Company has stopped being a subsidiary of IDB Holdings; (b) IDB Holdings undertook that throughout the whole insurance period, it would not cancel the policy and/or cause it to be cancelled or change its terms in any way that will derogate from the insurance cover provided by the policy to the IDB Development Group and/or to the officers in the Company. IDB Holdings and the Company undertook, inter alia, that throughout the whole of the insurance period they would not act in a manner that will derogate from the insurance cover that is provided by the policy or in any manner that will prejudice their rights and the rights of the policyholders pursuant to the policy, and that they will assist one another with regard to the realization of their rights as part of the policy, insofar as their involvement is required pursuant to the terms of the policy, and they confirmed that subject to the law and without derogating from any right of the insured pursuant to the policy, they will coordinate between them a request to an insurance company with regard to the policy in the case of a claim that includes claims both against the officers and/or the directors in IDB Holdings and against the officers in the Company; (c) the policy will be changed in such a way that the liability of the insurer with regard to the listing of the Company’s shares on the Stock Exchange or with regard to the expected publication of the shelf prospectus and the issue of securities will pursuant thereto will be excluded by the Company; (d) the Company and IDB Holdings will act to reach an agreement between them, with regard to the insurance cost according to the policy from the date of completing the arrangement, taking into account the significance of the creditors’ arrangement and in it the scope of the assets of the group under the Company as compared with the scope of the activity and the assets of IDB Holdings after the completion of the creditors’ arrangement. Pursuant to the agreement between the Company and IDB Holdings, whereby IDB Holdings paid 1/3 of the premium expenses, while the company paid 2/3 of the premium expenses (as opposed to an equal division between them), for the period starting on the day of completing the first stage of the debt arrangement, namely May 7, 2014, until the end of the insurance period. The consent of the insurers to the changes required in the policy (see sections (a) and (c) in the paragraph above) was received.
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Note 33 - Related and Interested Parties (cont.)
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B.
|
Transactions with controlling shareholders or in which controlling shareholders have a personal interest, which are listed in section 270(4) and/or 270(4a) of the Companies Law, that were entered into in 2014 or on a date between the end of the reporting year and the date of filing the report or that are in effect on the reporting date (cont.)
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|
5.
|
Officers’ liability insurance, letters of indemnity, officers’ letter of release from liability and payment of remuneration to directors (cont.)
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|
a.
|
Officers’ liability insurance: (cont.)
|
|
Changes in the 2013-2014 policy (cont.)
|
|
Remuneration policy – insurance – On November 13, 2014, the general meeting of the Company’s shareholders approved the Company’s remuneration policy, after it was approved by the Board of Directors of the Company. According to the remuneration policy, the officers of the Company (including directors) may be entitled, subject to the approval of the competent organs for this purpose in the Company, to officer’s liability insurance, subject to the provisions of every law. The remuneration policy states that the maximum cover for a current insurance policy shall not exceed $150 million and the maximum cover for an insurance policy of the POSI (“Public Offering of Securities Insurance”) type should not exceed $120 million (for details regarding POSI type insurance that was bought by the company in May 2014, see this section below).
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Note 33 - Related and Interested Parties (cont.)
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B.
|
Transactions with controlling shareholders or in which controlling shareholders have a personal interest, which are listed in section 270(4) and/or 270(4a) of the Companies Law, that were entered into in 2014 or on a date between the end of the reporting year and the date of filing the report or that are in effect on the reporting date (cont.)
|
|
5.
|
Officers’ liability insurance, letters of indemnity, officers’ letter of release from liability and payment of remuneration to directors (cont.)
|
|
a.
|
Officers’ liability insurance: (cont.)
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Note 33 - Related and Interested Parties (cont.)
|
B.
|
Transactions with controlling shareholders or in which controlling shareholders have a personal interest, which are listed in section 270(4) and/or 270(4a) of the Companies Law, that were entered into in 2014 or on a date between the end of the reporting year and the date of filing the report or that are in effect on the reporting date (cont.)
|
|
5.
|
Officers’ liability insurance, letters of indemnity, officers’ letter of release from liability and payment of remuneration to directors (cont.)
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Note 33 - Related and Interested Parties (cont.)
|
B.
|
Transactions with controlling shareholders or in which controlling shareholders have a personal interest, which are listed in section 270(4) and/or 270(4a) of the Companies Law, that were entered into in 2014 or on a date between the end of the reporting year and the date of filing the report or that are in effect on the reporting date (cont.)
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|
5.
|
Officers’ liability insurance, letters of indemnity, officers’ letter of release from liability and payment of remuneration to directors (cont.)
|
|
The new indemnification letter also provides that its provisions supersede any previous commitment or understanding (from before the signing of the new indemnification letters), provided verbally or in writing, between the Company and its officers with respect to the matters indicated in the new indemnification letter, also with respect to events that occurred before the signing of the new indemnification letter. The aforesaid is subject to the stipulation that the previous indemnification letter provided to the officer, if provided, continue to be in effect, subject to any law, with respect to any event that occurred before the signing of the new indemnification letter (even if the indemnification in respect of which was requested from the Company after the signing of the new indemnification letter) if the terms of new indemnification letter impair the terms of indemnification of the said officer with respect to such an event.
It should be noted that in November 2011 the competent organs of IDB Holdings approved the grant of new indemnification letters as aforesaid by the Company (further to approvals of the competent organs of the Company) to officers of the Company, those presently serving and those who will serve in it from time to time, who are controlling shareholders in the Company (as these were on the date of the general meeting that took place in November 2011) or their relatives or persons where the controlling shareholders may be regarded as having a personal interest in approving the grant of indemnification letters to them or who are directors in IDB Holdings. Since the date of the meeting, the Company has issued to its officers, including officers that were controlling shareholders of the Company or their relatives, new letters of indemnification. as part of the remuneration policy that was approved as stated in section B.5.a above in this note, it was determined that the officers in the company (including directors) may be entitled, subject to the approval of the competent organs of the Company for this purpose, to a letter of indemnification, subject to the provisions of any law, and that the amount of the indemnification shall not exceed 25% of the Company’s equity (provided that this amount shall not be less than NIS 100 million in total).
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Note 33 - Related and Interested Parties (cont.)
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B.
|
Transactions with controlling shareholders or in which controlling shareholders have a personal interest, which are listed in section 270(4) and/or 270(4a) of the Companies Law, that were entered into in 2014 or on a date between the end of the reporting year and the date of filing the report or that are in effect on the reporting date (cont.)
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|
5.
|
Officers’ liability insurance, letters of indemnity, officers’ letter of release from liability and payment of remuneration to directors (cont.)
|
|
As of the date of the report, after approval of the Remuneration Committee and the Board of Directors of the Company, the company published an immediate report for convening a special general meeting of the company, at which the agenda will include approval of the granting of letters of indemnification from the company for the officers that hold office in the Company and/or that will hold office in the Company from time to time, and who and/or whose relatives are controlling shareholders in the Company on the date of the report, and also for officers in the Company whose controlling owners in the Company may be regarded as having a personal interest in the approval of granting letters of indemnification to them, who hold office and/or will hold officer in the Company from time to time, for their operations by virtue of their office in the Company and for their operations by virtue of their office, at the request of the company, as officers in another company, in which the Company holds shares (directly or indirectly) or in which the Company has any interest, with the wording and on terms that are identical to the wording of the letter of indemnification used by the Company, which came into effect on May 7, 2014 (the date of completion of the first stage of the debt arrangement in IDB Holdings).
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|
c.
|
Release of officers:
|
Note 33 - Related and Interested Parties (cont.)
|
B.
|
Transactions with controlling shareholders or in which controlling shareholders have a personal interest, which are listed in section 270(4) and/or 270(4a) of the Companies Law, that were entered into in 2014 or on a date between the end of the reporting year and the date of filing the report or that are in effect on the reporting date (cont.)
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|
5.
|
Officers’ liability insurance, letters of indemnity, officers’ letter of release from liability and payment of remuneration to directors (cont.)
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|
d.
|
Interested parties in the Company (including controlling shareholders in it during the relevant periods) and/or their relatives, who serve and/or who served as directors or other officers in subsidiaries and/or related companies of the Company, receive from certain companies, as aforesaid, indemnification and/or release letters, and their liability is insured as accepted in those companies. Without derogating from the generality of the foregoing, it is noted that as part of the completion of the merger transaction of Koor with Discount Investments, as stated in note 3.H.4.b. above, in March 2014, Discount Investments provided the directors and officers of Koor (including those among them who are or were interested parties and/or controlling shareholders in the Company) indemnification letters with respect to their actions by virtue of their service in Koor and with respect to their actions by virtue of their service at the request of Koor as officers in the investee companies of Koor, or in whom Koor has an interest. The maximum indemnification amount pursuant to the aforesaid indemnification letters is identical to the amount of the indemnification in the letters of indemnification given by Discount Investments to its directors and officers.
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e.
|
Directors’ remuneration:
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|
1.
|
In October 2010, after approval by the Company’s Audit Committee and Board of Directors, the general shareholders’ meeting of the Company resolved to approve the payment of directors’ remuneration for the years 2011 through 2015 (inclusive), including directors who are controlling shareholders of the Company and/or their relatives (“directors who are controlling shareholders”) at the time of the resolution. According to the aforesaid resolution, the directors’ remuneration payable to each director in respect of any given time in the aforementioned period will be at the maximum amounts allowed and according to the director’s aforesaid classification as an expert or non-expert director, and according to the classification of the Company, all as applicable at that time according to the Companies (Rules Concerning Remuneration and Expenses for an Outside Director) Regulations, 5760-2000 (“the Remuneration Regulations”). The directors’ remuneration will not be paid to directors of the Company who receive from the Company or from a company under its control or from IDB Holdings, a salary for responsibilities other than that of a director, for as long as the director is entitled to such a salary. In view of the provisions of Amendment no. 16, the validity of the aforesaid resolution regarding the payment of remuneration to directors from among the controlling shareholders or to directors where the controlling shareholders have a personal interest in the payment of remuneration to them, expired at the end of three years from July 2010, i.e., in July 2013, and from the aforesaid date, the Company has not paid directors’ remuneration to directors from among the controlling shareholders.
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|
As of the date of the report, the Company published an immediate report regarding the convening of a special general meeting of the Company (‘the meeting report’), at which the agenda contains the approval of payment of remuneration to the directors that hold office in the Company and/or that will hold office in the Company from time to time, and who and/or whose relatives are controlling shareholders of the Company, and to directors of the Company where controlling shareholders of the Company may be regarded as having a personal interest in the approval of the payment of remuneration to them, who hold office and/or who will hold office in the Company from time to time. According to the meeting report, the payment of remuneration to the directors as aforesaid shall be in the maximum possible fixed amounts and in accordance with the classification of each director as aforesaid as an expert director or as a non-expert director and in accordance with the classification of the Company, all of which at that time pursuant to the Remuneration Regulations.
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|
Directors’ remuneration and related expenses not exceeding accepted amounts, which were paid by the Company to its directors in 2014, 2013 and 2012 (a total of 8 to 12 recipients), amounted to a total of NIS 1,287 thousand, NIS 1,270 thousand and NIS 1,241 thousand, respectively.
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Note 33 - Related and Interested Parties (cont.)
|
B.
|
Transactions with controlling shareholders or in which controlling shareholders have a personal interest, which are listed in section 270(4) and/or 270(4a) of the Companies Law, that were entered into in 2014 or on a date between the end of the reporting year and the date of filing the report or that are in effect on the reporting date (cont.)
|
|
5.
|
Officers’ liability insurance, letters of indemnity, officers’ letter of release from liability and payment of remuneration to directors (cont.)
|
|
e.
|
Directors’ remuneration: (cont.)
|
|
2.
|
IDB Holdings received directors’ remuneration from investee companies of the Company in respect of the service of officer/s in IDB Holdings (who were also officer/s in the Company), including officer/s who were controlling shareholder/s and/or a relative of a controlling shareholder, as directors in those investee companies. In 2014 (for their holding of office in the fourth quarter of 2013 only), 2013 and 2012, the aforesaid amounted to NIS 0.11 million, NIS 0.64 million and NIS 1.2 million, respectively.
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|
3.
|
Investee companies of the Company received directors' remuneration from other investee companies for the service of interested parties of the Company, including individuals who were controlling shareholders and/or their relatives, as directors in those paying companies.
|
|
6.
|
As of the date of the report, after approval of the Remuneration Committee and the Board of Directors of the Company, the Company published an immediate report regarding the convening of a special general meeting of the Company at which the agenda included approval of the payment of expenses and/or a reimbursement of expenses, whether prospectively or retrospectively, to the joint chairmen of the Board of Directors of the Company, for personal expenses that they actually incurred and/or will incur as part of their position in the Company, and including such expenses that they will lay out for anyone acting on their behalf (such as advisors, personal assistants, administrative staff), all of which in return for the production of written receipts, from May 7, 2014 (i.e., the date on which Messrs. Eduardo Elsztain and Mordechai Ben-Moshe began to be controlling owners in the Company) and for three additional years from the date of the approval of the general meeting and subject to its approval, as stated below: reimbursement of expenses in Israel – the payment / reimbursement will be for expenses that were and/or will actually be incurred, as part of carrying out their duties in the company and will include expenses that are required for the Company in order to manage its current business operations; expenses for participating in meetings of the Board of Directors and committees of the Board of Directors of the Company; expenses for promoting the Company’s business and expanding its operations, including expenses involved in business meetings with service providers, etc., including, inter alia, the following expenses (for each of the joint chairmen): meal expenses, including hospitality expenses, suppliers, etc., in an amount that shall not exceed NIS 3,000 per month; travel and parking expenses in a total amount that shall not exceed NIS 1,500 per month (not including car maintenance); communication expenses in a total amount that shall not exceed NIS 500 per month. In addition, the Company will pay expenses for office space that was and/or is being made available to the limited staff of each of the joint chairmen of the Board of Directors at the Company’s existing offices, at a total estimated cost of up to approximately NIS 8,000 per month. The aforesaid total estimated cost is the additional cost that the Company will pay in view of the agreement between the Company and additional parties (including also companies held by the Company) with regard to the division of the use of the areas that the Company rents from a third party in the Azrieli Center in Tel-Aviv (for details regarding this agreement, see section B.3.a above in this note). In the period that passed from May 7, 2014, to December 31, 2014, the cumulative reimbursement of expenses for the two joint chairmen together amounts to approximately NIS 93 thousand. If the matter is not approved by the general meeting of the Company, the joint chairmen shall pay the aforesaid expenses and return to the Company the amounts it paid for them.
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|
It is clarified that nothing stated above shall prevent the Company from paying directly any costs and expenses of the Company that derive from foreign business trips of the joint chairman on behalf of the Company, and the Company shall pay the costs of foreign business trips on behalf of the Company (or private companies that it controls) made by the chairmen, including expenses in reasonable amounts for flight tickets, car rental/taxis abroad, hotel accommodation and subsistence expenses, provided that the purpose of the trip is business on behalf of the Company as aforesaid.
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Note 33 - Related and Interested Parties (cont.)
|
B.
|
Transactions with controlling shareholders or in which controlling shareholders have a personal interest, which are listed in section 270(4) and/or 270(4a) of the Companies Law, that were entered into in 2014 or on a date between the end of the reporting year and the date of filing the report or that are in effect on the reporting date (cont.)
|
|
6.
|
(Cont'd)
|
|
The chairmen shall pay themselves any additional cost of a foreign trip that derives for an extension of the duration of the stay abroad for their own private purposes and/or as a result of the use of that trip also for private purposes. The aforesaid provisions for the reimbursement of expenses shall apply whether additional terms of office and employment have and/or will be approved for the chairmen by the Company or not. The Company’s internal auditor and Remuneration Committee will make a check each quarter and monitor the reimbursement of expenses, with regard to the reasonableness of the components and amount of the quarterly expenses, as well as the manner of making the reimbursement pursuant to the Company’s instructions and procedures.
|
|
7.
|
Other transactions
|
|
a.
|
On July 31, 2006 the Company’s Board of Directors resolved that the Company’s annual budget for charitable donations would be determined each year by the Company's Board of Directors and would be up to 1.5% of net income according to its annual audited consolidated financial statements for the prior year. Furthermore, on the same date, after receiving the approval of the Company’s Audit Committee, the Company's Board of Directors resolved, with respect to donations given by the Company to not-for-profit associations that are certified as public institutions under Section 46 of the Income Tax Ordinance, to approve the granting of donations by the Company to IDB Community Fund (RA) (“the Fund”), which has the necessary certificate. Donations by the Company to the Fund in each calendar year will be up to 100% of the overall donations budget for that year but not more than 1.5% of the annual net income of the Company according to its audited consolidated financial statements for the prior year (“Fund Donations Account”). Full or partial use of the Fund Donations Account will be made pursuant to resolutions passed from time to time by the Board of Directors of the Company.
|
|
The decision regarding approval of a fixed annual Fund Donations Framework for the Company was approved by the Company’s general meeting of shareholders in September 2006, after it was approved by its Audit Committee and Board of Directors. It is noted that also subsidiaries of the Company have approved a donations framework for the Fund, as aforesaid, and from time to time, have provided donations to the Fund accordingly.
|
|
In accordance with the provisions of Amendment 16, in November 2011 the Audit Committee of IDB Holdings decided to limit the period of the aforesaid decision of the Company’s general meeting of shareholders to a period beginning on the date of the said general meeting and ending on November 30, 2017, meaning an additional approx. six years from the date of the aforementioned decision. Similar decisions were made also by subsidiaries of the Company that had also approved a donation framework for the aforementioned Fund, and are public companies.
|
|
In 2014, 2013 and 2012, the Company did not pass any resolutions regarding the contribution to the aforementioned Fund. In 2012, the Company gave a sum of NIS 1 million as a donation to the Fund and in 2013 and 2014 no donations were given by the Company to the Fund. It should be noted that, as of the reporting date, Mr. Haim Gavrieli, the CEO of the Company, holds office as chairman of the board of the Fund and a board member in the Fund.
|
Note 33 - Related and Interested Parties (cont.)
|
B.
|
Transactions with controlling shareholders or in which controlling shareholders have a personal interest, which are listed in section 270(4) and/or 270(4a) of the Companies Law, that were entered into in 2014 or on a date between the end of the reporting year and the date of filing the report or that are in effect on the reporting date (cont.)
|
|
7.
|
Other transactions (cont.)
|
|
b.
|
In June 2013, the District Court in Jerusalem approved a settlement in connection with the claim and the motion to approve it as a class action against Discount Investments and against the directors and the CEO of Koor, that was filed in March 2009 concerning claims of non-compliance with the provisions of the Companies Law and Securities laws and whose total amount of monetary remedies that were claimed amounted to NIS 272 million.
|
|
Pursuant to the settlement that was approved, Discount Investments will make four annual payments in the amount of NIS 4.5 million each, beginning in August 2013 as remuneration to the Group that will be composed of Koor shareholders (with the exception of the Company) that did not use the rights they received from Koor to purchase shares as part of a rights issue which was performed by Koor in November 2008. If some of the aforementioned some of remuneration remains and is unclaimed, it will be donated to a public cause. In addition, Discount Investments paid a sum of NIS 3.6 million, some of which as compensation to the Plaintiff in the legal proceedings and the majority as retainer to the attorney. The legal proceedings against the directors and general manager of Koor were denied. In August 2013, Discount Investments received from the officers’ liability policy insurers about half of the sums to be borne by Discount Investments, as specified above. The said settlement was approved in April 2013 by the general assembly of shareholders of Discount Investments, including the Company and IDB Holdings, and some of their officers (including controlling shareholders during the relevant period) may be considered as having a personal interest in Discount Investments’ entering into the said settlement.
|
|
c.
|
Further to the notice of the trustees of the debt arrangement of IDB Holdings, in which the creditors of IDB Holdings were invited to submit debt claims to the Arrangement Trustees by March 6, 2014, which would set out the debt of IDB Holdings to them, on March 5, 2014, the Board of Directors of the Company decided, after the approval of the Audit Committee, to approve the filing of a debt claim against IDB Holdings, in a sum of NIS 442 million, with regard to distributions of dividends that were made by the Company in the years 2010 and 2011, and motions and derivative claims with regard to the distributions of dividends, which are described in notes 23.C.1.d and 23.C.1.e above (in this subsection – “the derivative claims”).
|
|
d.
|
For information about an agreement signed on March 10, 2014, for the advancing of a bridging loan to the Company in a sum of NIS 170 million between the Company and Dolphin Fund Limited and E.T.H. M.B.M Extra Holdings Ltd. (companies controlled by Mr. Eduardo Elsztain and Mr. Mordechai Ben-Moshe, respectively), jointly and severally; Adv. Hagai Olman and Mr. Eyal Gabbay (trustees of the debt arrangement); and IDB Holdings (through the trustees of the debt arrangement), out of the funds secured for creditors arrangement in IDB Holdings, and with regard to the advancing of the aforesaid bridging loan, see note 16.C.3 above. The Company's entering into the aforesaid bridging loan agreement was approved by the Audit Committee and the Board of Directors of the Company on the aforesaid date.
|
|
e.
|
In May 2014, the Board of Directors of the Company resolved, after it received approvals of the Audit Committee of the Company, to make short extensions of an agreement between the Company and JT Capital Fund Pte. Ltd. (“JT”) for the sale of the Company’s holdings in Clal Holdings Insurance Enterprises(“the Clal Insurance agreement”). On May 5, 2014, the Board of Directors of the Company resolved, after receiving the approval of the Audit Committee of the Company for this, to enter into an amendment to the Clal Insurance agreement, as stated in note 3.H.5.a above (it should be noted that at the end of May 29, 2014, the Clal Insurance agreement expired without the transaction being completed).
|
Note 33 - Related and Interested Parties (cont.)
|
B.
|
Transactions with controlling shareholders or in which controlling shareholders have a personal interest, which are listed in section 270(4) and/or 270(4a) of the Companies Law, that were entered into in 2014 or on a date between the end of the reporting year and the date of filing the report or that are in effect on the reporting date (cont.)
|
|
7.
|
Other transactions (cont.)
|
f.
|
On May 20, 2014, the Board of Directors of the Company resolved, after receiving the approval of the Audit Committee of the Company for this purpose, to approve a transaction of entering into a loan agreement between the Company and the trustees of the debt arrangement in IDB Holdings, in a total amount of NIS 500 million (principal) (including a supplementary loan in a sum of NIS 20 million (principal), which had already been advanced de facto to the Company as part of the bridging loan agreement that was signed on March 10, 2014 (see subsection d. above) (‘the loan agreement’)). It should be noted that, pursuant to the terms of the loan agreement, since before the credit was advanced to the Company a terminating event for the Clal Insurance transaction occurred (see note 3.H.5.a above) the loan agreement was cancelled.
|
C.
|
Other employment and remuneration transactions
|
|
1.
|
In 2014, the cost in the Company’s books of employing Mr. Haim Gavrieli as CEO of the Company amounted to an amount of NIS 2,011 thousand and a sum of NIS 976 thousand, which is equal to a retirement bonus that will be paid on the date of retirement (in an amount of the cost of six months’ employment, as approved by the general meeting of the Company in November 2014) (in 2013 and 2012, approximately NIS 1.8 million and approximately NIS 2 million, respectively). According to the agreement that existed between the Company and IDB Holdings with regard to the use of joint manpower (see section B.1 of this note above), IDB Holdings contributed 20% of the cost of employing Mr. Gavrieli until May 2014 (inclusive). Since June 2014, there is a new agreement between the Company and IDB Holdings (through the arrangement trustees) according to which IDB Holdings pays fixed monthly amounts for management services (for additional details, see section B.1 above in this note).
|
|
2.
|
In 2014, 2013 and 2012, the Company received directors’ remuneration from its held companies, for the office of interested parties therein as directors in those companies, in a total amount of NIS 214 thousand, NIS 291 thousand and NIS 316 thousand, respectively (not included directors’ remuneration from Discount Investments; for details of the management agreement with Discount Investments, see section D.1 below).
|
|
3.
|
During the years 2014 and 2013, the Company paid fees for the services of each of Messrs. Eyal Gabbay and Hagai Olman, who acted as experts on behalf of the court (Mr. Eyal Gabbay) and as an observer on the Board of Directors of the Company (Adv. Hagai Olman), a sum of NIS 304 thousand and NIS 1,134 thousand, respectively.
|
D.
|
Other transactions or payments
|
|
1.
|
There was an agreement between the Company and each of Discount Investments and Clal Insurance Enterprise Holdings, according to which the Company provided management services to those companies, which included, inter alia, appointments of employees of the Company, IDB Holdings, or their subsidiaries as directors in those companies, in return for management fees. In view of the provisions of Amendment no. 16, in November 2011 the general meeting of Discount Investments approved once again, and in May 2012 the general meeting of Clal Holdings Insurance Enterprises approved once again, after the approval of the Audit Committees and Boards of Directors of each of them, the making of such an agreement by each of them with the Company.
|
|
In February 2014, after the termination of the office of all of the directors on behalf of the Company in the companies of the Clal Holdings Insurance Enterprises Group, and in view of the restrictions which were imposed on the Company as part of the Commissioner’s letter of November 2013 (see note 3.H.5.b. above), Clal Holdings Insurance Enterprises gave notice to the Company of the suspension of the management agreement between them. Consequently, as of the date of publication of the report, Clal Holdings Insurance Enterprises does not pay management fees to the Company.
|
Note 33 - Related and Interested Parties (cont.)
|
D.
|
Other transactions or payments (cont.)
|
|
1.
|
(cont.)
|
|
In November 2014, three years expired from the approval of the aforesaid transaction by the general meeting of Discount Investments. Therefore, in view of the provisions of the Companies Law, since December 2014 and as of the date of publication of the report, Discount Investments does not pay management fees to the Company and such a payment is subject to the approval of the competent organs of Discount Investments, including the approval of its general meeting with a special majority.
|
|
It should be noted that from March 2014 until the date of publication of the report, no employees of the Company held office on the Board of Directors of Discount Investments. In the years 2014, 2013 and 2012, the Company received management fees from the aforesaid companies in a total amount of approximately NIS 1 million, NIS 3.85 million and NIS 5.1 million, respectively
|
2.
|
In March 2014, the Audit Committee and the Board of Directors of the Company gave their approval that the Company would be liable for half of the costs relating to the implementation of the creditors’ arrangement in IDB Holdings. According to a report of the trustees of the arrangement as filed with the court, these costs include, inter alia, half of the costs of obtaining the various permits required for implementing the arrangement, half of the costs of the examination ordered by the District Court as part of the judgment of December 17, 2013, half of the costs of handling the investment in the Company and advancing the loans to the Company, all of the costs of the Company’s legal advisers with regard to the implementation of the arrangement and half of the costs of listing the Company’s shares, with the exception of fees that the Company will pay in full. In 2014, the Company paid for its share of the costs relating to the implementation of the creditors’ arrangement in the Company a sum of NIS 1.4 million.
|
3.
|
On August 4, 2014, the Board of Directors of the Company resolved, after obtaining the approval of the Audit Committee of the Company for this purpose, to approve the Company’s position with regard to a settlement between the parties (not including the Company) in the derivative actions, not to oppose the settlement, except what is stated in the provisions that deprive the Company of the right to take legal action in other actions that also relate to distributions of dividends, which the Company made during the years 2010-2011, on account, inter alia, of Discount Investments’ claims (see note 23.C.1.h above). The resolution was ratified in January 2015. On March 5, 2015, the Board of Directors of the Company resolved, after obtaining the approval of the Audit Committee of the Company for this purpose, to agree to an amendment of the settlement between the parties in the derivative actions, and insofar as its wording is completed and agreed by the other parties, it will be filed with the court hearing the derivative actions. According to the main elements of the aforesaid amendment that is being formulated, if the Discount Investments’ claim is successful, the Company will retain the right of suing the directors and officers of the Company and IDB Holdings for a cause of action arising from that claim, on certain conditions. For further details, see note 23.C.1.d. above.
|
|
4.
|
Additional joint transactions between investees and related parties:
|
|
·
|
In November 2010, Koor and the Clal Insurance Group undertook to invest in equal shares a total sum of $250 million in the EMCO Fund (a private investment fund managed by corporations from the Credit Suisse Group). The period of making the investments in the EMCO Fund ended in November 2012. As of December 31, 2014, and as of the date of this report, the cumulative amount of the investment of Koor in the EMCO fund stood at a sum of approximately NIS 46 million. In addition, Koor and the Clal Insurance Group are liable to make investments in a sum of up to $2 million in the Group, each. Since the beginning of the investment in the ENCO Fund, Koor and Clal Insurance have received from the Fund amounts on a scale of approximately $29 million each.
|
|
·
|
In January 2014, the Audit Committee and Board of Directors of Discount Investments approved an undertaking of Discount Investments, according to which for a period of three years from the completion of the merger of Adama with ChemChina (October 17, 2011), Discount Investments would not carry out transactions as a result of which it would stop controlling Koor, unless after them Koor would continue to be controlled by another entity from the IDB Group, and after the aforesaid period of three years, Discount Investments would not sell the control in Koor to a competitor of Adama or a competitor of ChemChina. The aforesaid undertaking is valid as long as the provisions of the Shareholders’ Agreement between Koor and ChemChina with regard to Adama, which relate to the control of Koor, will remain valid.
|
Note 33 - Related and Interested Parties (cont.)
|
D.
|
Other transactions or payments (cont.)
|
|
5.
|
Additional transactions during the course of regular business, which are not exceptional, in amounts that exceed NIS 8.7 million for a single transaction:
|
·
|
Shufersal carried out a large number of regular transactions with suppliers that are interested parties and related parties of the Company in a total amount of NIS 17 million, NIS 439 million and NIS 377 million in 2014, 2013 and 2012 respectively. The transactions included the acquisition of food products, toiletries and other products for sale in stores.
|
·
|
In 2012, the Hadera Paper Group (from the Clal Industries Group) acquired from Cargal Carton Products in the amount of NIS 45 million.
|
·
|
In 2013, Adama received insurance services from Clal Insurance Group in the amount of $4.5 million (in 2012 – $4.5 million).
|
·
|
Shufersal is insured by elementary insurance, car insurance and health insurance by Clal Insurance. The total annual premium paid by Shufersal for the insurance policies in 2014 and 2013 amounted to NIS 19 million and NIS 18 million, respectively.
|
·
|
Property & Building received interest income for loans it granted to equity accounted investee companies that amounted in 2014 to NIS 34 million (in 2013 – NIS 32 million and in 2012 – the sums were lower than the negligibility threshold for disclosure).
|
·
|
Adama sold some of its products in the normal course of its business to the companies Cresud S.A.C.I.F. y A and Futuros y Opciones.Com S.A., companies that operate in Argentina, which are indirectly controlled by Mr. Eduardo Elsztain, one of the controlling owners of the Company. These sales amounted in 2014 and 2015 up to the date of the report to approximately $3.6 million and approximately $260 thousand, respectively.
|
Note 33 - Related and Interested Parties (cont.)
|
|
E. Transactions with related parties and interested parties
|
|
1.
|
Balances with related parties and interested parties
|
Interest
|
As at 31 December
|
|||||||||||
Rate
|
2014
|
2013
|
||||||||||
%
|
NIS Millions
|
|||||||||||
Long-term loans for investee companies(1)
|
||||||||||||
Shekel (linked and unlinked)
|
2.3-9.31 | 143 | (2) | 142 | (2) | |||||||
Linked to dollar rate
|
3.6-15.0 | 369 | 314 | |||||||||
Linked to Euro
|
3.6 | 28 | 64 | |||||||||
Linked to Pound Sterling
|
6.0 | - | 122 | |||||||||
Customers, debtors and accounts receivable:
|
||||||||||||
Associates and jointly-controlled entities
|
14 | 11 | ||||||||||
Other related parties and interested parties
|
44 | 27 | ||||||||||
Cash and short-term deposits deposited with the interested party
|
- | 268 | ||||||||||
Highest balance due in the year of cash in Union Bank of Israel (interested party)
|
- | 445 | ||||||||||
Accounts payable:
|
||||||||||||
Interested parties
|
- | 3 | ||||||||||
Liability to suppliers and service providers:
|
||||||||||||
Associates and jointly-controlled entities
|
- | 1 | ||||||||||
Other related parties and interested parties
|
8 | 68 | ||||||||||
Loans received:
|
||||||||||||
Bonds of the Company and of Consolidated Companies held by Interested and Related Parties
|
438 | 513 | ||||||||||
Including current maturities
|
90 | 123 | ||||||||||
Loans received from interested parties
|
- | 3 |
|
(1) The dates of repayment for the loans have not yet been determined.
|
|
(2) The loans are presented in the consolidated statements after the amortization for impairment in an amount of NIS 39 million and NIS 62 million as of December 31, 2014, and December 31, 2013, respectively.
|
Note 33 - Related and Interested Parties (cont.)
|
|
E. Transactions with related parties and interested parties (cont.)
|
|
1.
|
Balances with related parties and interested parties (cont.)
|
As at 31 December 2014
|
||||||||||||
Linkage Base
|
Sum
|
Interest
|
Dates of Repayment
|
|||||||||
NIS Millions
|
%
|
|||||||||||
Linked
|
396 | 2.99-5.40 | 2016-2029 | |||||||||
Unlinked
|
42 | 5.45-6.70 | 2015-2018 | |||||||||
438 |
As at 31 December 2013
|
||||||||||||
Linkage Base
|
Sum
|
Interest
|
Dates of Repayment
|
|||||||||
NIS Millions
|
%
|
|||||||||||
Linked
|
463 | 2.99-5.70 | 2014-2029 | |||||||||
Unlinked
|
50 | 5.45-6.70 | 2014-2018 | |||||||||
513 |
|
2.
|
Revenue and expenses from related parties and interested parties
|
For the year ended December 31 | ||||||||||||||||||||||||
2014 | 2013 | 2012 | 2014 | 2013 | 2012 | |||||||||||||||||||
Number of recipients | NIS millions | |||||||||||||||||||||||
Revenue:
|
|
|||||||||||||||||||||||
Participation of the parent company in salary and incidental expenses and other expenses
|
2 | * | 4 | 6 | ||||||||||||||||||||
Management fees from investee companies
|
- | 1 | 23 | |||||||||||||||||||||
Expenses:
|
||||||||||||||||||||||||
a. Benefits for employment of key managerial
personnel (including directors):
|
||||||||||||||||||||||||
Short-term benefits for key managerial personnel
|
1 | 1 | 1 | 3 | 2 | 2 | ||||||||||||||||||
Short-term benefits for directors
|
- | 1 | 3 | - | 5 | 8 | ||||||||||||||||||
b. Benefits for employment of relatives of directors
and interested parties
|
- | 3 | 6 | - | 1 | 3 | ||||||||||||||||||
c. Benefits for directors and interested parties who are not employed (salary of directors in the Company and in consolidated companies)
|
7 | 12 | 12 | 1 | 3 | 5 | ||||||||||||||||||
d. Other expenses:
|
||||||||||||||||||||||||
Donations to the IDB Community Involvement
Fund (RA)
|
- | - | 1 |
|
*
|
For the period from January 1, 2014, until and including May 2014.
|
Note 33 - Related and Interested Parties (cont.)
|
|
E. Transactions with related parties and interested parties (cont.)
|
|
3.
|
The following are transaction with former related parties and interested parties, which were described in the Related Parties and Interested Parties Note in the Company’s financial statements of 2013:
|
For the year ending December 31
|
|||||||||
2013
|
2012
|
||||||||
Amounts of transactions in
NIS millions
|
|||||||||
Nature of the transaction
|
Related party / interested party *
|
||||||||
1. Payment for courier services that was paid by a subsidiary (Cellcom) to a company held by Avi Fisher together with his relative.
|
A company controlled by the Company
|
- | 11.3 | ||||||
2. Income from flight services that a subsidiary received from held companies and officers in a subsidiary (IDB Development), including officers who or whose relatives are controlling shareholders of the company.
|
Held companies
|
- | 1.4 | ||||||
3.Payments that subsidiaries of the company (the Mashav Group) made for services that they received from held companies under the joint control of the Company and a controlling shareholder therein (companies in the Taavura Group).
|
Held companies
|
16 | ** | 132 | |||||
4.Income from the provision of services that a held company under joint control of a subsidiary and a controlling shareholder in the Company (a company from the Taavura Group) received from a company held by a controlling shareholder in the Company (Taavura Tifzoret).
|
A company controlled by a controlling shareholder
|
9 | ** | 55 | |||||
5.Payments for various services that were paid by companies under joint control (companies from the Taavura Group) to a company held by a controlling shareholder of the Company (Taavura Tifzoret).
|
A company controlled by a controlling shareholder
|
3 | ** | 49 | |||||
6.Payments made by subsidiaries (companies from the Mashav Group) for transport services to a company held by a controlling shareholder of the Company (Taavura Tifzoret).
|
Held company
|
3 | ** | 25 | |||||
7.Income from providing logistic services received by a held company under joint control (a subsidiary of Maman Cargo and Handling terminals Ltd. (‘Maman’) from a company controlled by a controlling shareholder of the Company (H & O Fashion Ltd.).
|
Held company
|
2.4 | ** | 14 | |||||
8.Payments for logistic services paid by a subsidiary (Shufersal) to a jointly controlled held company (a subsidiary of Maman).
|
Held company
|
20 | 22 | ||||||
9.Rent paid by a jointly controlled held company (a subsidiary of Maman) to a company that is jointly controlled by Maman and another subsidiary (Gav Yam Real Estate Ltd.).
|
Held company
|
9 | 9 | ||||||
10.Payments for management and operating services paid by a subsidiary (Cellcom) to a company held by the controlling shareholder together with his relatives (Tikshuvim Business Communications Center Ltd.).
|
A company controlled by a controlling shareholder
|
- | 8 | ||||||
11.Income from providing storage services that a jointly controlled held company (Maman) received from a company (indirectly) held by a controlling shareholder of the Company (O.P.S.A. International Shipping Ltd.).
|
Held company
|
1.7 | ** | 8.4 | |||||
12.Income from sales, maintenance and ancillary services that a jointly controlled company (a company in the Taavura Group) received from a held company (Yafora Ltd.).
|
Held company
|
- | 10 | ||||||
13.Rent that a subsidiary (Shufersal) paid to a company in which a controlling shareholder together with his relatives are interested parties.
|
A company in which a controlling shareholder has an interest
|
11 | 11 |
Note 33 - Related and Interested Parties (cont.)
|
|
E. Transactions with related parties and interested parties (cont.)
|
|
3.
|
The following are transaction with former related parties and interested parties, which were described in the Related Parties and Interested Parties Note in the Company’s financial statements of 2013: (cont.)
|
For the year ending December 31
|
|||||||||
2013
|
2012
|
||||||||
Amounts of transactions in
NIS millions
|
|||||||||
Nature of the transaction
|
Related party / interested party *
|
||||||||
14.Rent that was paid to a subsidiary (Gav-Yam) by another subsidiary (Hadera Paper).
|
Companies controlled by the Company
|
26 | 28 | ||||||
|
|||||||||
15.A payment for the purchase of products that was made by a subsidiary (Shufersal) to another subsidiary (Hogla Kimberley).
|
Companies controlled by the Company
|
210 | - | ||||||
16.Payments made by a subsidiary (Shufersal) for the purchase of products for a held company (Yafora Tavori).
|
Held company
|
147 | - | ||||||
17.A payment made by a subsidiary (Shufersal) for leasing services to a company owned by a controlling shareholder who holds it jointly with his relatives (Prime Lease Car Fleet Management Ltd.).
|
A company controlled by a controlling shareholder
|
7 | 15 | ||||||
18.A final payment made by subsidiaries (IDB Development and Discount Investments) to another subsidiary (Clal Finances) for an indemnification undertaking in an agreement for the sale of 50% of the shares of Ilanot Batucha Investment House Ltd. in 2003.
|
A company controlled by the Company
|
- | 5 | ||||||
19.A provision with regard to a consulting agreement with an interested party with regard to the purchase of real estate abroad (Rock Real).
|
Interested party in the Company
|
62 | 77 |
Note 34 – Segments
|
|
A.
|
General
|
|
B.
|
The sectorial results
|
Note 34 – Segments (cont.)
|
For the year 2014
|
Cellcom
|
Property and Buildings and projects in Los Angeles
|
Shufersal
|
Adama (1)
|
Clal Holdings Insurance Enterprises (3)
|
Others (4)
|
Adjustments (5)
|
Consolidated
|
||||||||||||||||||||||||
NIS millions
|
||||||||||||||||||||||||||||||||
Revenues
|
||||||||||||||||||||||||||||||||
From sales and services
|
4,570 | 1,168 | 11,602 | 11,474 | - | 1,001 | (11,269 | ) | 18,546 | |||||||||||||||||||||||
Income from insurance business
|
- | - | - | - | 15,044 | - | (15,044 | ) | - | |||||||||||||||||||||||
Gain in the disposal of investments and assets,
|
- | - | - | - | 29 | - | 929 | 958 | ||||||||||||||||||||||||
Increase in the fair value of real estate for investment and other properties
|
- | 425 | 12 | - | - | - | 2 | 439 | ||||||||||||||||||||||||
Other income
|
- | - | - | 17 | 2 | - | (18 | ) | 1 | |||||||||||||||||||||||
Financing income
|
100 | 98 | 85 | 462 | - | 3 | 452 | 1,200 | ||||||||||||||||||||||||
Total sectorial income in the year 2014
|
4,670 | 1,691 | 11,699 | 11,953 | 15,075 | 1,004 | (24,948 | ) | 21,144 | |||||||||||||||||||||||
Expenses
|
||||||||||||||||||||||||||||||||
Cost of sales and services
|
2,664 | 534 | 9,050 | 7,832 | - | 823 | (7,688 | ) | 13,215 | |||||||||||||||||||||||
Cost of insurance business
|
- | - | - | - | 11,787 | - | (11,787 | ) | - | |||||||||||||||||||||||
Costs and expenses in connection with insurance business and financial services
|
- | - | - | - | 2,556 | - | (2,556 | ) | - | |||||||||||||||||||||||
Oil exploration expenses
|
- | - | - | - | - | 78 | (78 | ) | - | |||||||||||||||||||||||
Research and development expenses
|
- | - | - | 120 | - | - | (93 | ) | 27 | |||||||||||||||||||||||
Selling and marketing expenses
|
672 | 24 | 2,680 | 2,040 | - | 94 | (2,007 | ) | 3,503 | |||||||||||||||||||||||
Administrative and general expenses
|
463 | 132 | 125 | 400 | - | 83 | (169 | ) | 1,034 | |||||||||||||||||||||||
Company’s share in net profit (loss) of affiliated companies, net
|
- | 78 | - | 591 | (42 | ) | - | (127 | ) | 500 | ||||||||||||||||||||||
Loss upon disposal and impairment in value of investment property and other assets
|
217 | 30 | 182 | - | 360 | 2 | 53 | 844 | ||||||||||||||||||||||||
Drop in fair value of investment property and other assets
|
- | 26 | - | - | 21 | - | (21 | ) | 26 | |||||||||||||||||||||||
Other expenses
|
39 | - | 1 | 11 | 41 | 13 | (94 | ) | 11 | |||||||||||||||||||||||
Financing expenses
|
298 | 502 | 158 | 908 | 218 | 19 | 372 | 2,475 | ||||||||||||||||||||||||
4,353 | 1,326 | 12,196 | 11,902 | 14,941 | 1,112 | (24,195 | ) | 21,635 | ||||||||||||||||||||||||
Income (loss) before taxes on income
|
317 | 365 | (497 | ) | 51 | 134 | (108 | ) | (753 | ) | (491 | ) | ||||||||||||||||||||
Taxes on income
|
(129 | ) | (161 | ) | 78 | (167 | ) | (189 | ) | (1 | ) | 210 | (359 | ) | ||||||||||||||||||
Non-controlling interests
|
(219 | ) | (147 | ) | 205 | (141 | ) | (305 | ) | 49 | 345 | (213 | ) | |||||||||||||||||||
Discontinued operations after taxation
|
- | - | - | - | - | 64 | - | 64 | ||||||||||||||||||||||||
Sectorial results for the year 2014 –attributed to Company shareholders
|
(31 | ) | 57 | (214 | ) | (257 | ) | (360 | ) | 4 | (198 | ) | (999 | ) | ||||||||||||||||||
Depreciation and amortization included under expenses
|
581 | 9 | 472 | 664 | 203 | 26 | ||||||||||||||||||||||||||
Impairment in value included under expenses
|
298 | - | 233 | 354 | (5) | 21 | - | |||||||||||||||||||||||||
67 | 76 | 54 | 131 | 1,137 | 1 | |||||||||||||||||||||||||||
Interest expenses
|
251 | 502 | 168 | 387 | 190 | 13 |
Note 34 – Segments (cont.)
|
|
B.
|
The sectorial results (cont.)
|
|
(1)
|
The liabilities of the Adama Sector as of December 31, 2014, which are stated below in this note, include the host contract on a mixed financial instrument in respect of a non-recourse loan in an amount of NIS 3,162 million (the non-recourse loan is repayable by means of Adama shares, as detailed in Note 16.F.1.d above), where the financing income in respect thereof (interest and linkage differences) for the year ended December 31, 2014 amounts to NIS 544 million. This financing income has not been presented as part of the information in respect of a sector, since it does not form part of the internal reporting format, as part of the Adama sector, which is routinely provided to the Group's chief operating decision maker.
|
|
In addition, the Adama sector liabilities as of December 31, 2014 include an embedded derivative with a value of NIS 72 million, where the financing expenses in respect of the revaluation of the derivative for the year ended December 31, 2014 amounts to NIS 551 million. These financing expenses have not been presented as part of the information in respect of a sector, since it does not form part of the format for the internal reporting, as part of the Adama sector, which is routinely provided to the Group's chief operating decision maker.
|
|
(2)
|
The Clal Holdings Insurance Enterprises' results are presented in accordance with Clal Holdings Insurance Enterprises' full operating results for the entire year 2014.
|
|
(3)
|
Includes the IDB Tourism and Oil and Gas Assets sectors and Credit Suisse.
|
|
(4)
|
Derives mainly from the elimination of inter-sectorial balances that are recorded in the financial statements based on the balance sheet value as well as companies that do not comply with the definitions for a sector of operations.
|
|
(5)
|
For details of the impairment recorded for the investment in Adama, see note 3.H.4.d.
|
Note 34 – Segments (cont.)
|
|
B.
|
The sectorial results (cont.)
|
For the year 2013
|
Cellcom
|
Property and Buildings and projects in Los Angeles
|
Shufersal
|
Adama (1)
|
Credit
Suisse(2)
|
Clal Holdings Insurance Enterprises(3)
|
Others (4)
|
Adjustments (5)
|
Consolidated
|
|||||||||||||||||||||||||||
NIS Millions
|
||||||||||||||||||||||||||||||||||||
Revenues
|
||||||||||||||||||||||||||||||||||||
From sales and services
|
4,927 | 1,306 | 11,909 | 11,130 | - | - | 1,059 | (10,346 | ) | 19,985 | ||||||||||||||||||||||||||
Income from insurance business
|
- | - | - | - | - | 18,494 | - | (18,494 | ) | - | ||||||||||||||||||||||||||
The Company’s share of the net income (loss) of affiliated companies, net
|
- | (10 | ) | - | (90 | ) | - | 5 | 3 | 153 | 61 | |||||||||||||||||||||||||
Gain in the disposal of investments and assets, dividends and gain on an increase to control
|
3 | 2 | - | - | 637 | 32 | - | (495 | ) | (7)179 | ||||||||||||||||||||||||||
Other income
|
- | 16 | - | 46 | - | 5 | 8 | (51 | ) | 24 | ||||||||||||||||||||||||||
Increase in the fair value of investment property
|
- | 394 | 23 | - | - | - | - | - | 417 | |||||||||||||||||||||||||||
Financing income
|
156 | 104 | 39 | 480 | - | 11 | 21 | (146 | ) | 665 | ||||||||||||||||||||||||||
Total sectorial income in the year 2013
|
5,086 | 1,812 | 11,971 | 11,566 | 637 | 18,547 | 1,091 | (29,379 | ) | 21,331 | ||||||||||||||||||||||||||
Expenses
|
||||||||||||||||||||||||||||||||||||
Cost of sales and services
|
2,910 | 661 | 9,098 | (7) | 7,746 | - | - | 860 | (7,440 | ) | 13,835 | |||||||||||||||||||||||||
Cost of insurance business
|
- | - | - | - | - | 14,568 | - | (14,568 | ) | - | ||||||||||||||||||||||||||
Costs and expenses in connection with insurance business and financial services
|
- | - | - | - | - | 2,708 | - | (2,708 | ) | - | ||||||||||||||||||||||||||
Oil exploration expenses
|
- | - | - | - | - | - | 113 | (113 | ) | - | ||||||||||||||||||||||||||
Research and development expenses
|
- | - | - | - | - | - | - | 108 | 108 | |||||||||||||||||||||||||||
Selling and marketing expenses
|
717 | 29 | 2,417 | (7) | 1,884 | - | - | 105 | (1,651 | ) | 3,501 | |||||||||||||||||||||||||
Administrative and general expenses
|
570 | 82 | 123 | 413 | - | - | 98 | (147 | ) | 1,139 | ||||||||||||||||||||||||||
Impairment in value of investment property and other assets
|
- | 97 | - | - | - | 21 | - | (21 | ) | 97 | ||||||||||||||||||||||||||
Loss on the disposal and writing down of investments and assets
|
- | - | 91 | - | - | - | - | 47 | 138 | |||||||||||||||||||||||||||
Other expenses
|
2 | - | 12 | 6 | - | 30 | - | (37 | ) | 13 | ||||||||||||||||||||||||||
Financing expenses
|
402 | 654 | 168 | 987 | - | 245 | 53 | (63 | ) | 2,446 | ||||||||||||||||||||||||||
4,601 | 1,523 | 11,909 | 11,036 | - | 17,572 | 1,229 | (26,593 | ) | 21,277 | |||||||||||||||||||||||||||
Income (loss) before taxes on income
|
485 | 289 | 62 | 530 | 637 | 975 | (138 | ) | (2,786 | ) | 54 | |||||||||||||||||||||||||
Taxes on income
|
(142 | ) | (189 | ) | (53 | ) | (162 | ) | 6 | (390 | ) | (2 | ) | 628 | (304 | ) | ||||||||||||||||||||
Non-controlling interests
|
(234 | ) | (112 | ) | (39 | ) | (283 | ) | (232 | ) | (513 | ) | 119 | 628 | (666 | ) | ||||||||||||||||||||
Discontinued operations after taxation
|
- | - | - | - | - | - | - | (7)763 | (7)763 | |||||||||||||||||||||||||||
Sectorial results for the year 2013 –attributed to shareholders in the Company
|
109 | (12 | ) | (30 | ) | 85 | 411 | 72 | (21 | ) | (767 | ) | (153 | ) | ||||||||||||||||||||||
Depreciation and amortization included under expenses (6)
|
666 | 10 | 421 | 682 | - | 198 | 25 | |||||||||||||||||||||||||||||
Impairment in value included under expenses
|
7 | - | 83 | - | - | 21 | - | |||||||||||||||||||||||||||||
Interest income
|
98 | 69 | 39 | 84 | - | 1,684 | 2 | |||||||||||||||||||||||||||||
Interest expenses
|
308 | 539 | 151 | 438 | - | 254 | 32 |
Note 34 – Sectors (cont.)
|
|
B.
|
The sectorial results (cont.)
|
|
(1)
|
The liabilities of the Adama Segment as of December 31, 2013, include the host contract on a mixed financial instrument in respect of a non-recourse loan in an amount of NIS 3,664 million (the non-recourse loan is repayable by means of Adam shares, as detailed in Note 16.F.1.d above), where the financing income in respect thereof (interest and linkage differences) for the year ended December 31, 2013 amount to NIS 89 million. This financing income has not been presented as part of the information in respect of a sector, since it does not form part of the internal reporting format, as part of the Credit Suisse sector, which is routinely provided to the Group's chief operating decision maker.
|
|
In addition, the Adama sector liabilities as of December 31, 2013 include an embedded derivative with a value of NIS 607 million, where the financing expenses in respect of the revaluation of the derivative for the year ended December 31, 2013 amounted to NIS 85 million. These financing expenses have not been presented as part of the information in respect of a sector, since it does not form part of the format for the internal reporting, as part of the Adama sector, which is routinely provided to the Group's chief operating decision maker.
|
|
(2)
|
The Credit Suisse sector is classified as discontinued operations, as detailed in Note 3.H.4.c above. The liabilities of the Credit Suisse sector as of December 31, 2013, which are detailed further on in this note, include NIS 431 million of loans from foreign banks, where the financing income in respect of them (interest and exchange differences) in the year ended December 31, 2013 amount to NIS 48 million. This financing income is not presented as part of the information in connection with a sector, since it does not form part of the format for the internal reporting, as part of the Credit Suisse sector, which is routinely provided to the Group's chief operating decision maker. In addition, financing income in respect of liabilities for options on the exchange rate of the Swiss Franc against the Shekel for the year ended December 31, 2013 amount to NIS 4 million. This financing income has been presented as part of the Credit Suisse sector, but separately from the sectorial results (since they form part of the internal reporting sector, under the Credit Suisse sector, which is routinely provided to the Group's chief operating decision maker, but separately from the sectorial results).
|
|
(3)
|
Clal Holdings Insurance Enterprises' results are presented in accordance with Clal Holdings Insurance Enterprises' full operating results for the entire year 2013, in accordance with the data that the Company’s chief operating decision maker received in 2013.
|
|
(4)
|
Includes the IDB Tourism and Oil and Gas Assets sectors.
|
|
(5)
|
Derives primarily from the elimination of inter-sectorial balances that are recorded in the financial statements under the equity method of accounting as well as companies that do not comply with the definitions for a sector of operations.
|
|
(6)
|
Not including the writing down of investments that are recorded under the Company's share of the net income (loss) of affiliated companies, net under gain on disposal and write-downs of investments and assets.
|
|
(7)
|
Reclassified, see Note 1.F.2 above.
|
Note 34 – Segments (cont.)
|
|
C.
|
The sectorial results
|
For the year 2012
|
Cellcom
|
Property and Buildings and projects in Los Angeles
|
Shufersal
|
Adama(1)
|
Credit Suisse(2)
|
Mashav(3)
|
Clal Holdings Insurance Enterprises
|
Oil and gas Assets (4)
|
Tourism(4)
|
Adjustments(5)
|
Consolidated
|
|||||||||||||||||||||||||||||||||
NIS Millions
|
||||||||||||||||||||||||||||||||||||||||||||
Revenues
|
||||||||||||||||||||||||||||||||||||||||||||
From sales and services
|
5,938 | 1,159 | 11,570 | 10,910 | - | 1,516 | - | - | 1,222 | (11,853 | ) | 20,462 | ||||||||||||||||||||||||||||||||
Income from insurance business
|
- | - | - | - | - | - | 18,571 | - | - | (18,571 | ) | - | ||||||||||||||||||||||||||||||||
Gain in the disposal of investments and assets, dividends and gain on an increase to control
|
6 | (2 | ) | 11 | - | 159 | - | 26 | - | - | 41 | 241 | ||||||||||||||||||||||||||||||||
Other income
|
2 | - | - | 15 | - | 21 | 2 | 23 | - | (33 | ) | 30 | ||||||||||||||||||||||||||||||||
Increase in the fair value of investment property
|
- | 523 | (3 | ) | - | - | 2 | 21 | - | - | (3 | ) | 540 | |||||||||||||||||||||||||||||||
Financing income
|
181 | 393 | 48 | 469 | - | 17 | 5 | 4 | 2 | (295 | ) | 824 | ||||||||||||||||||||||||||||||||
Total sectorial income in the year 2012
|
6,127 | 2,073 | 11,626 | 11,394 | 159 | 1,556 | 18,625 | 27 | 1,224 | (30,714 | ) | 22,097 | ||||||||||||||||||||||||||||||||
Expenses
|
||||||||||||||||||||||||||||||||||||||||||||
Cost of sales and services
|
3,369 | 405 | 8,897 | (7) | 7,566 | - | 1,202 | - | - | 998 | (8,229 | )(7) | 14,208 | |||||||||||||||||||||||||||||||
Cost of insurance business
|
- | - | - | - | - | - | 14,759 | - | - | (14,759 | ) | - | ||||||||||||||||||||||||||||||||
Costs and expenses in connection with insurance business and financial services
|
- | - | - | - | - | - | 3,080 | - | - | (3,080 | ) | - | ||||||||||||||||||||||||||||||||
Oil exploration expenses
|
- | - | - | - | - | - | - | 63 | - | (63 | ) | - | ||||||||||||||||||||||||||||||||
Research and development expenses
|
- | - | - | - | - | - | - | - | - | 36 | 36 | |||||||||||||||||||||||||||||||||
Selling and marketing expenses
|
865 | 26 | 2,385 | (7) | 1,877 | - | 16 | - | - | 132 | (1,874 | )(7) | 3,427 | |||||||||||||||||||||||||||||||
Administrative and general expenses
|
629 | 89 | 124 | 391 | - | - | - | 33 | 97 | (172 | ) | 1,191 | ||||||||||||||||||||||||||||||||
The Company’s share of the net income (loss) of affiliated companies, net
|
2 | 873 | - | 109 | - | 111 | -7 | 124 | (3 | ) | (277 | ) | 932 | |||||||||||||||||||||||||||||||
Loss on the disposal and writing down of investments and assets
|
2 | - | 188 | - | - | - | 426 | 335 | - | (501 | ) | 450 | ||||||||||||||||||||||||||||||||
Other expenses
|
- | 6 | - | 12 | - | - | 1 | 1 | 3 | 37 | 60 | |||||||||||||||||||||||||||||||||
Financing expenses
|
440 | 564 | 148 | 894 | - | 71 | 316 | 1 | 32 | (169 | ) | 2,297 | ||||||||||||||||||||||||||||||||
5,307 | 1,963 | 11,742 | 10,849 | - | 1,4 | 18,575 | 557 | 1,259 | (29,051 | ) | 22,601 | |||||||||||||||||||||||||||||||||
Income (loss) before taxes on income
|
820 | 110 | (116 | ) | 545 | 159 | 156 | 50 | (530 | ) | (35 | ) | (1,663 | ) | (504 | ) | ||||||||||||||||||||||||||||
Taxes on income
|
(220 | ) | (224 | ) | 5 | (151 | ) | - | (43 | ) | (133 | ) | (3 | ) | - | 317 | (452 | ) | ||||||||||||||||||||||||||
Non-controlling interests
|
(407 | ) | (123 | ) | (1 | ) | (327 | ) | (55 | ) | (62 | ) | 145 | 372 | (4 | ) | 222 | (240 | ) | |||||||||||||||||||||||||
Discontinued operations after taxation
|
- | - | - | - | - | - | - | - | - | 463 | 463 | |||||||||||||||||||||||||||||||||
Sectorial results for the year 2012 –attributed to shareholders in the Company
|
193 | (237 | ) | (112 | ) | 67 | 104 | 51 | 62 | (161 | ) | (39 | ) | (661 | ) | (733 | ) | |||||||||||||||||||||||||||
Depreciation and amortization included under expenses (6)
|
761 | 12 | 462 | 713 | - | - | 229 | - | 28 | |||||||||||||||||||||||||||||||||||
Impairment in value included under expenses
|
- | - | 188 | - | - | - | 237 | 335 | - | |||||||||||||||||||||||||||||||||||
Interest income
|
114 | 217 | 43 | 77 | - | - | 1,680 | 2 | 2 | |||||||||||||||||||||||||||||||||||
Interest expenses
|
346 | 456 | 157 | 429 | - | - | 251 | - | 23 |
Note 34 – Segments (cont.)
|
|
C.
|
The sectorial results (cont.)
|
(1)
|
The liabilities of the Adama Sector as of December 31, 2012, include the host contract on a mixed financial instrument in respect of a non-recourse loan in an amount of NIS 3,753 million (the non-recourse loan is repayable by means of Adama shares, where the financing expenses in respect thereof (interest and linkage differences) for the year ended December 31, 2012 amount to NIS 78 million. This financing income has not been presented as part of the information in respect of a sector, since it does not form part of internal reporting format, as part of the Adama sector, which is routinely provided to the Group's chief operational decision maker.
|
|
In addition, the Adama sector liabilities as of December 31, 2012 include an embedded derivative with a value of NIS 679 million, where the financing income in respect of the revaluation of the derivative for the year ended December 31, 2012 amounted to NIS 17 million. These financing expenses have not been presented as part of the information in respect of a sector, since it does not form part of the format for the internal reporting, as part of the Adama sector, which is routinely provided to the Group's chief operational decision maker.
|
(2)
|
The Credit Suisse sector is classified as discontinued operations, as detailed in note 3.H.4.c above. The liabilities of the Credit Suisse sector as of December 31, 2012, which are detailed further on in this note, include NIS 1,240 million of loans from foreign banks, net of charged deposits where the financing expenses in respect of them (interest and exchange differences) in the year ended December 31, 2012, amount to NIS 44 million. This financing income is not presented as part of the information in connection with a sector, since it does not form part of the format for the internal reporting, as part of the Credit Suisse sector, which is routinely provided to the Group's chief operational decision maker. In addition, the liabilities of the Credit Suisse sector as of December 31, 2012, include liabilities for options on the exchange rate of the Swiss Franc against the Shekel in an amount of NIS 14 million, where the financing income in respect thereof for the year ended December 31, 2012 amounted to NIS 12 million. This financing income has been presented as part of the Credit Suisse sector, but separately from the sectorial results (since they form part of the internal reporting sector, under the Credit Suisse sector, which is regularly provided to the Group's chief operational decision maker, but separately from the sectorial results).
|
(3)
|
As a result of the sale of the Company’s main holdings in Clal Industries, Mashav ceased to be a reportable sector in the Company's financial statements, as of the third quarter of 2012.
|
(4)
|
This sector is not reportable.
|
(5)
|
Derives primarily from the elimination of the Adama sector balance that is recorded in the financial statements under the equity method of accounting, from the cancellation of balances in respect of the Clal Insurance Business Holdings presented in the financial statements as a financial asset that is measured at fair value, as well as companies that do not comply with the definitions for an sector of operations.
|
(6)
|
Not including the writing down of investments that are recorded under the Company's share of the net income (loss) of affiliated companies, net under gain on disposal and write-downs of investments and assets.
|
(7)
|
Reclassified, see Note 1.F.2 above.
|
|
D.
|
The composition of the adjustments to consolidated
|
For the year ended December 31
|
||||||||||||||||||||||||
2014
|
2013
|
2012
|
||||||||||||||||||||||
Sales and services
|
Sectorial results – attributed to the shareholders in the Company
|
Sales and services
|
Sectorial results – attributed to the shareholders in the Company
|
Sales and services
|
Sectorial results – attributed to the shareholders in the Company
|
|||||||||||||||||||
NIS Millions
|
||||||||||||||||||||||||
Cancellation of amounts in respect of sectors that are classified in the financial statements as held companies that are treated under the equity method of accounting (1)
|
(11,474 | ) | - | (11,130 | ) | - | (10,910 | ) | - | |||||||||||||||
The inclusion of the expenses of head office companies that are held and which do not meet the definition of a sector
|
226 | (237 | ) | 733 | (1,522 | ) (2) | 573 | (1,124 | ) | |||||||||||||||
Discontinued operations
|
- | - | - | 763 | (2) | (1,516 | ) | 463 | ||||||||||||||||
Other adjustments
|
(21 | ) | 39 | 51 | (8 | ) | - | - | ||||||||||||||||
(11,269 | ) | (198 | ) | (10,346 | ) | (767 | ) | (11,853 | ) | (661 | ) |
|
(1)
|
In relation to companies whose financial statements have been initially consolidated in the period – including their sales and services, from the beginning of the year until the time of their initial consolidation.
|
|
(2)
|
Reclassification; see note 1.F.2 above.
|
Note 34 – Segments (cont.)
|
|
E.
|
Sectorial balance sheet figures as of December 31, 2014
|
Cellcom
|
Property and Buildings and projects in Los Angeles
|
Shufersal
|
Adama
|
Clal Holdings Insurance Enterprises
|
Others (1)
|
Adjustments
|
Consolidated
|
||||||||||||||||||||||||||||
NIS millions
|
|||||||||||||||||||||||||||||||||||
1 | ) |
Sectorial assets *
|
7,240 | 15,188 | 7,063 | 18,452 | 91,088 | 886 | (99,088 | ) | 40,829 | ||||||||||||||||||||||||
* |
Includes investments in investee companies that are treated with the equity method of accounting
|
- | 561 | 51 | 299 | 212 | - | - | - | ||||||||||||||||||||||||||
2 | ) |
Sectorial liabilities
|
6,148 | 13,228 | 6,054 | 15,325 | 86,785 | 677 | (90,699 | ) | 37,518 | ||||||||||||||||||||||||
3 | ) |
Adjustments of fair value, goodwill and surplus cost that are attributed to the sector
|
1,427 | 132 | 752 | 529 | - | - | - | - |
(1)
|
Includes the IDB Tourism sector and the Oil and Gas Assets.
|
|
F.
|
Sectorial balance sheet data as of December 31, 2013
|
Cellcom
|
Property and Buildings and projects in Los Angeles
|
Shufersal
|
Adama
|
Credit
Suisse
|
Clal Holdings Insurance Enterprises
|
Others (1)
|
Adjustments
|
Consolidated
|
|||||||||||||||||||||||||||||||
NIS Millions
|
|||||||||||||||||||||||||||||||||||||||
1. |
Sectorial assets *
|
7,579 | (3) | 14,516 | (3) | 7,278 | 15,470 | 1,138 | 86,050 | 974 | (86,837 | )(2)(3) | 46,168 | ||||||||||||||||||||||||||
* |
Includes investments in held companies that are treated under the equity method of accounting
|
- | 589 | 25 | 254 | - | 138 | - | - | - | |||||||||||||||||||||||||||||
2. |
Sectorial liabilities
|
6,869 | (3) | 12,831 | (2) | 6,080 | 13,653 | 431 | 82,123 | 1,039 | (80,873 | )(2)(3) | 42,153 | ||||||||||||||||||||||||||
3. |
Adjustments of fair value, goodwill and surplus cost that are attributed to the sector
|
1,525 | (3) | 128 | 1,012 | 1,242 | - | - | - | - | - |
|
(1)
|
Includes the IDB Tourism sector and the Oil and Gas Assets.
|
|
(2)
|
Retroactive application of IFRIC 21 - Levies, see note 1.E.6.a above.
|
|
(3)
|
Reclassified.
|
Note 34 – Sectors (cont.)
|
|
G.
|
Sectorial assets
|
|
** The composition of the adjustments to consolidated:
|
As of December 31
|
||||||||
2014
|
2013
|
|||||||
NIS millions
|
||||||||
The sectorial assets
|
||||||||
Elimination of amounts in respect of a sector that is classified in the financial statements as a held company that is treated under the equity method of accounting
|
(18,452 | ) | (15,578 | ) | ||||
Elimination of amounts in respect of a sector that is classified in the financial statements as a financial asset that is measured at fair value
|
(91,088 | ) | (86,050 | ) | ||||
Inclusion of the amount of the investment in a company that is presented as a financial asset that is measured at fair value
|
1,696 | 3,182 | ||||||
Inclusion of the amount of the investment in companies that are recorded under the equity method of accounting, as recorded in the financial statements
|
3,102 | 2,055 | ||||||
Inclusion of adjustments to fair value for the assets of held companies and goodwill in respect thereof
|
2,770 | 3,453 | (2) | |||||
Inclusion of the assets of head office companies and held companies that do not meet the definition of a sector
|
3,048 | 6,142 | (1) | |||||
Other adjustments
|
(164 | ) | (41 | )(1) | ||||
(99,088 | ) | (86,837 | ) | |||||
The sectorial liabilities
|
||||||||
Elimination of amounts in respect of a sector that is classified in the financial statements as a held company that is treated under the equity method of accounting
|
(15,325 | ) | (13,669 | ) | ||||
Elimination of amounts in respect of segments that are classified in the financial statements as a financial asset that is measured at fair value
|
(86,785 | ) | (82,123 | ) | ||||
Inclusion of the liabilities of head office companies and held companies that do not meet the definition of a sector
|
11,168 | 14,495 | (1) | |||||
Inclusion of adjustments to fair value for the liabilities of subsidiary companies
|
392 | 464 | (2) | |||||
Other adjustments
|
(149 | ) | (40 | )(1) | ||||
(90,699 | ) | (80,873 | ) | |||||
|
(1)
|
Retroactive application of IFRIC 21 - Levies, see note 1.E.6.a above.
|
|
(2)
|
Reclassified.
|
|
H.
|
Investments in equity
|
Cellcom
|
Property and Building and projects in Los Angeles
|
Shufersal
|
Adama
|
Clal Holdings Insurance Enterprises
|
Others
|
|||||||||||||||||||
NIS millions
|
||||||||||||||||||||||||
For 2014
|
487 | 371 | 458 | 667 | 405 | 17 | ||||||||||||||||||
For 2013
|
365 | 503 | 349 | 753 | 327 | - | ||||||||||||||||||
Note 34 – Segments (cont.)
|
|
I.
|
The types of products and services from which the reportable segments generate their revenues:
|
|
- Cellcom – Cellular telephone services, content and added value services, other services and revenues from the sale of end-user equipment in the cellular field, as well as the provision of internet connection services, international telephony and the provision of managed services.
|
|
- Property and Buildings and project in Los Angeles – the rental of income-generating properties and residential buildings.
|
|
- Shufersal – Retail and the rental of income-generating properties.
|
|
- Adama – the sale of agro products and non-agro products.
|
|
- Clal Holdings Insurance Enterprises- operates through subsidiary companies in the fields of insurance, pensions and provident funds, in the field of financial services and in the holding of assets and real businesses.
|
|
- Credit Suisse – Financial services in the private banking field, investment banking and asset management. (Credit Suisse ceased to be a reportable sector in the Company’s financial statements as from 2014.
|
|
- Mashav – include the cement companies, through Nesher, which produces cement and Taavura, which is engaged in the provision of haulage, infrastructure and logistical services, the importing and marketing of trucks, buses, heavy equipment and cranes. (Mashav ceased to be a reportable sector as from the third quarter of 2012.
|
|
J.
|
Information regarding income from products and services, based on the financial information in the Company’s consolidated financial statements
|
For the year ended December 31
|
|||||||||||||
2014
|
2013
|
2012
|
|||||||||||
NIS millions
|
|||||||||||||
Information in respect of sales and services to external customers
|
|||||||||||||
Cellular -
|
|||||||||||||
Cellular communications and other services
|
2,621 | 2,937 | 3,445 | ||||||||||
Landline communications services
|
489 | 559 | 599 | ||||||||||
Sale of telephone equipment
|
1,005 | 942 | 1,356 | ||||||||||
Internet services -
|
451 | 483 | 531 | ||||||||||
Real Estate -
|
|||||||||||||
Leasing of income-generating properties
|
803 | 795 | 828 | ||||||||||
Residential construction
|
423 | 560 | 382 | ||||||||||
Retail -
|
11,532 | 11,843 | 11,503 | ||||||||||
Tourism -
|
1,001 | 1,059 | 1,222 | ||||||||||
Financial -
|
Other
|
45 | 45 | 45 | |||||||||
Journalism, advertising space and printing works -
|
- | - | 180 | ||||||||||
Other products -
|
176 | 762 | 371 | ||||||||||
18,546 | 19,985 | 20,462 |
Note 34 – Segments (cont.)
|
|
K.
|
Information on the basis of geographical areas
|
|
1.
|
Revenues from sales to external customers on the basis of geographical location, based on the financial information in the Company's consolidated financial statements
|
For the year ended December 31
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
NIS millions
|
||||||||||||
Israel
|
17,889 | 18,591 | 19,738 | |||||||||
USA
|
473 | 955 | 435 | |||||||||
Europe
|
112 | 273 | 177 | |||||||||
Asia, except for India and Japan
|
13 | 66 | 56 | |||||||||
Others
|
59 | 100 | 56 | |||||||||
18,546 | 19,985 | 20,462 | ||||||||||
|
2.
|
Non-current assets on a geographical basis*
|
As of December 31
|
||||||||
2014
|
2013
|
|||||||
NIS millions
|
||||||||
Israel
|
18,026 | 18,146 | ||||||
USA
|
4,105 | 3,328 | ||||||
Europe
|
54 | 54 | ||||||
22,185 | 21,528 | |||||||
|
*
|
Excluding investments in held companies that are treated under the equity method of accounting
|
Note 35 – Events after the date of the Statement of Financial Position
|
A.
|
For details of the rights issue that the Company undertook in January 2015, whose immediate proceeds amounted to a gross total of NIS 417 million; see note 15.B.5 above.
|
B.
|
In January 2015, Adama carried out a private issue of 533,330 units of Adama securities, as detailed below:
|
Item
|
Additional details
|
Quantity for each unit
|
Total quantity issued
|
|||
Series B bonds
|
(1) |
NIS 1,000 par value
|
NIS 533,000,000 par value
|
|||
Option notes
|
(2) |
5 option certificates
|
2.67 million options
|
|
The total net proceeds from the issue amounted to NIS 690 million.
|
(1)
|
Series B bonds were issued by way of expanding the series and are linked to the index with an annual interest rate of 5.15%, and the repayment of principal will be made in 17 equal installments between the years 2020 and 2036.
|
(2)
|
Options are not registered for trade on the Stock Exchange and may be exercised by May 10, 2015 (inclusive). Each option may be realized into NIS 100 par value of Adama’s existing Series B bonds against a payment in cash (which is not linked to any basis of linkage whatsoever) totaling NIS 127. The options not exercised by May 10, 2015 shall expire. Should all of the options stated above be exercised in full, then Adama will issue NIS 267 million par value of Series B bonds and will receive in return NIS 339 million.
|
Note 35 – Events after the date of the Statement of Financial Position (cont.)
|
|
C.
|
In February 2015, Elron invested in Pocared Diagnostics Ltd. (Pocared), an Israeli company that is developing an advanced technological system to automatically and swiftly diagnose infectious diseases using an optical technology, and that was being held by Elron at the rate of 50.3% of its issued share capital and dealt with accordingly using the balance sheet value method, invested a sum of $4.5 million (out of a total investment of $5 million that Elron and other of its shareholders invested in Pocared.
|
|
It should be mentioned that some of Pocared’s shareholders, including Elron, undertook to invest an additional sum in Pocared of up to $10 million subject to Pocared complying with certain milestones. Elron's share in the above additional investment total is $8.9 million.
|
|
As a result of this investment, Elron’s holding in Pocared rose to about 53.3% of its issued share capital and to about 50.1% of its share capital on a full dilution basis, and for the first time Elron has the right to appoint most of Pocared’s board of directors and as from February 2015, Elron will begin to consolidate Pocared’s financial statements into its own. Owing to this change in the accounting records, Elron is expected to declare, during the first quarter of 2015, an estimated profit of $11 million in respect of the new measurement of fair value of Pocared’s shares that Elron was holding prior to the above consolidation (a fair assessment of value totaling $11.7 million less the value in Elron’s books of the previous holding totaling $0.7 million). The Company's share in Elron's profit estimated above amounts to $4 million dollars. The above profit data that Elron will record as a result of the change in the accounting records method, is an estimate only and is subject to the completion of a valuation of Pocared’s assets and liabilities by an external appraiser and also the approval of Elron’s financial statements as of March 31, 2015.
|
|
D.
|
In February 2015, Cellcom issued shares to the public, pursuant to its shelf offer report of January 2015, which was published pursuant to its shelf prospectus of January 2015 (which amended its shelf prospectus of June 2014) and also through a private issue to institutional investors:
|
·
|
NIS 844 million nominal value additional bonds from Cellcom’s existing H series (which are index-linked) by way of expanding the series in return for the purchase of NIS 555 million nominal value of D series bonds (which are index-linked).
|
·
|
NIS 335 million nominal value for additional bonds from Cellcom’s existing I series (which are not index-linked), by way of expanding the series in return for the purchase of NIS 272 million nominal value B Series bonds (which are not index-linked).
|
|
The bonds in the H and I Series that were issued as aforesaid were listed on the Stock Exchange, and the D and E series bonds, which were purchased by Cellcom as aforesaid, expired and were delisted from the Stock Exchange.
|
|
E.
|
In February 2015, Cellcom entered into an engagement through a collective labor agreement with the employees’ representatives and with the New General Federation of Workers for a period of three years (from 2015 until 2017). This agreement applies to Cellcom’s employees and those of 013 Netvision Ltd., a subsidiary of Cellcom, apart from management positions and other particular positions. This agreement relates to policy and hiring conditions involving different aspects, including a minimum wage, an annual increase in salary, incentives, benefits and one-time payments or other annual payments to employees, a welfare budget, as well as regarding the procedures for manning job positions, mobility and dismissal, the authority of Cellcom’s management and that of the employees’ representatives in relation to the above procedures. The agreement includes innovative conditions according to which employees have the right to participate in Cellcom’s operating profit over and above a certain threshold and to enjoy additional payments under certain conditions. According to Cellcom’s estimates, the cost of this agreement to Cellcom over the coming three years is estimated at NIS 200 million before tax.
|
|
F.
|
For details concerning the approval of the Discount Investments Board, at the request of the trustees for the holders of its bonds involving B, D, F, G, H & I series, for giving its undertaking in connection with certain activities, see Note 16.F.1.f above.
|
Note 35 – Events after the date of the Statement of Financial Position (cont.)
|
|
G.
|
In February 2015, the percentage of Mr. Mordechai Ben-Moshe’s holding in the Company's issued share capital decreased. This decrease may constitute a ground to demand immediate repayment of the loans that the Company and Discount Investments received. For details, see notes 16.E.n and 16.F.1.b above. Furthermore, the aforesaid change in the structure of the control of the Company will require the approval of the Ministry of Communications with regard to Cellcom’s licenses. For details, see note 23.B.1 above.
|
|
H.
|
For details concerning the agreement that was signed between IDB Tourism and several of its subsidiaries and a third party, for the sale of Diesenhaus’ tourist activities both domestic and incoming and the shares of certain of Diesenhaus’ subsidiaries which are subject to pending conditions, see note 3.H.6.b above.
|
|
For details concerning IDB Tourism and the Company's engagement in the compromise agreement with the Sky Fund, subject to completing the transaction for the sale of Diesenhaus’ activities, see Note 3.H.6.c above.
|
|
I.
|
For details concerning the IDB Tourism and Israir’s engagement with a foreign banking corporation by way of a Letter of Undertaking for a reorganization amounting to an estimated scope of about $90 million for the benefit of Israir; see note 16.F.6.1 above.
|
|
J.
|
Regarding claims submitted against held corporations after the date of the statement on financial position and changes that apply after this date involving pending and standing claims as of the financial statement’s date, see note 23 above.
|
Holding percentage
|
||||||
Company name
|
Holding company
|
%
|
||||
Discount Investment Corporation Ltd.
|
IDB Development Corporation Ltd.
|
73.92 |
Consolidated subsidiary
|
|||
Clal Holdings Insurance Enterprises Ltd.
|
IDB Development Corporation Ltd.
|
54.97 |
Investment presented at fair value through the Statement of Income
|
|||
IDB Tourism (2009) Ltd.
|
IDB Development Corporation Ltd.
|
100.00 |
Consolidated subsidiary
|
|||
IDB Group Investment Inc. (1)
|
Maniv Issues Ltd.
|
50.00 |
Consolidated subsidiary
|
|||
Modiin Energy Limited Partnership
|
IDB Development Corporation Ltd.
|
9.12 |
Included partnership
|
Holding percentage
|
||||||
Company name
|
Holding company
|
%
|
||||
Koor Industries Ltd. (2)
|
Discount Investment Corporation Ltd.
|
100.00 |
Consolidated subsidiary
|
|||
Elron Electronic Industries Ltd.
|
Discount Investment Corporation Ltd.
|
50.32 |
Consolidated subsidiary
|
|||
Bartan Holdings and Investments Ltd. (3)
|
Discount Investment Corporation Ltd.
|
55.68 |
Consolidated subsidiary
|
|||
Epsilon Investment House Ltd.
|
Discount Investment Corporation Ltd.
|
68.75 |
Consolidated subsidiary
|
|||
Property & Building Corporation Ltd.(5)
|
Discount Investment Corporation Ltd.
|
76.46 |
Consolidated subsidiary
|
|||
Gav Yam Land Ltd.
|
Property & Building Corporation Ltd.
|
69.07 |
Consolidated subsidiary
|
|||
Israel Property Rental Corporation Ltd.(ISPRO) (1)
|
Property & Building Corporation Ltd.
|
100.00 |
Consolidated subsidiary
|
|||
MATAM - Haifa Science Industries Center
|
Property & Building Corporation Ltd.
|
50.10 |
Consolidated subsidiary
|
|||
Neveh-Gad Building & Development Ltd.
|
Property & Building Corporation Ltd.
|
100.00 |
Consolidated subsidiary
|
|||
Hadarim Properties Ltd.
|
Property & Building Corporation Ltd.
|
100.00 |
Consolidated subsidiary
|
|||
PBC USA Investment Inc.
|
Property & Building Corporation Ltd.
|
100.00 |
Consolidated subsidiary
|
|||
Cellcom Israel Ltd. (5)
|
Discount Investment Corporation Ltd.
|
41.78 | (4) |
Consolidated subsidiary
|
||
Netvision Ltd.
|
Cellcom Israel Ltd.
|
100.00 |
Consolidated subsidiary
|
|||
Shufersal Ltd. (5)
|
Discount Investment Corporation Ltd.
|
45.49 | (4) |
Consolidated subsidiary
|
||
Shufersal Real Estate Ltd.
|
Shufersal Ltd.
|
100.00 |
Consolidated subsidiary
|
|||
Adama Agricultural Solutions Ltd. (5)
|
Koor industries Ltd.
|
40.00 |
Included
|
(1)
|
The other 50% is held indirectly by Property & Building Corporation Ltd.
|
(2)
|
See note 3.H.4.b.
|
(3)
|
Includes a holding through another company in the Discount Investments Ltd. group.
|
(4)
|
45.17% of voting rights.
|
(5)
|
Includes a holding through companies that are fully owned by the holding company.
|
Holding percentage
|
||||||
Company name
|
Holding company
|
%
|
||||
Clal Travel & Tourism Holdings Ltd.
|
IDB Tourism (2009) Ltd.
|
100.00 |
Consolidated subsidiary
|
|||
Diesenhaus Ltd.
|
Clal Travel & Tourism Holdings Ltd.
|
100.00 |
Consolidated subsidiary
|
|||
Diesenhaus Unitours Incoming Tourism (1998) Ltd.
|
Diesenhaus Ltd.
|
100.00 |
Consolidated subsidiary
|
|||
Diesenhaus Travel & Tourism (1979) Ltd.
|
Diesenhaus Ltd.
|
100.00 |
Consolidated subsidiary
|
|||
Diesenhaus Ramat Hasharon (1982) Ltd.
|
Diesenhaus Travel & Tourism (1979) Ltd.
|
50.00 |
Affiliated company
|
|||
Anadim Tourism & Aviation Ltd.
|
IDB Tourism (2009) Ltd.
|
100.00 |
Consolidated subsidiary
|
|||
Open Ski Ltd.
|
Anadim Tourism & Aviation Ltd.
|
53.50 |
Consolidated subsidiary
|
|||
Israir Airlines & Tourism Ltd.
|
Anadim Tourism & Aviation Ltd.
|
100.00 |
Consolidated subsidiary
|
In Cellcom
|
||||
The subsidiary company’s equity as of December 31, 2013
|
||||
Number of shares
|
100,584,490 | |||
Total equity attributed to the shareholders of the subsidiary (in NIS millions)
|
1,076 | |||
General details of the plan
|
||||
The year in which the plan was approved
|
2006 | |||
The number of options remaining as of December 31, 2014, which have not yet been granted
|
(a) 769,517
|
|||
The maximum contractual lifetime of the options at the time of their grant
|
3.5-6 years
|
|||
Vesting
|
||||
The number of vesting years from the time of the grant
|
2-4 | |||
The vesting time of the first tranche – end of year from the date of the grant
|
1 | |||
The vesting time of the last tranche – end of year from the date of the grant
|
2-4 | |||
The percentage of the options vesting at the end of each year
|
25%-50 | % | ||
The exercise price (for the options in existence as of December 31, 2014)
|
||||
The base exercise price per share at the time of the grant of the options
|
(a) $5.91-$31.74
|
|||
Adjustment of the exercise price for the distribution of dividends
|
Yes
|
|||
Adjustment of the exercise price for a change in the index
|
No
|
|||
The share price of the subsidiary company on the Stock Exchange (for the options in existence as of December 31, 2014)
|
||||
At the time of the grant (the time of the approval by the Board of Directors)
|
$ | 6.14-$33.69 | ||
At the time of the allocation of the options
|
$ | 6.14-$33.69 | ||
Movements in the number of option warrants in circulation in 2014
|
||||
Balance as of January 1, 2014
|
2,965,964 | |||
Exercised in the course of the year
|
(1,986,093 | ) | ||
Expired or forfeited in the course of the year
|
(341,006 | ) | ||
Balance as of December 31, 2014
|
638,865 | |||
Additional data as of December 31, 2014
|
||||
Exercise price of the options in circulation
|
$ | 5.67-$28.95 | ||
Weighted average exercise price of the options in circulation
|
$ | 15.86 | ||
Number of exercisable options
|
445,365 | |||
Weighted average exercise price of the exercisable options
|
$ | 17.00 | ||
Weighted average lifetime of the options in circulation
|
2.1 years
|
|||
Benefits inherent in the options that have been granted (including in respect of plans that have ended)
|
||||
Expenses recorded in the year 2014 (in NIS millions)
|
3 | |||
Expenses recorded in the year 2013 (in NIS millions)
|
9 | |||
Expenses recorded in the year 2012 (in NIS millions)
|
7 |
(a)
|
The exercise price serves solely and exclusively for the purpose of determining the benefit component of the options, in accordance with which the quantity of shares that will actually be issued in return for exercising the options will be calculated. Only the nominal value of the shares that will be issued in return for exercising the options will be paid when the options are exercised.
|