United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 30, 2023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☐	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
	Date of event requiring this shell company report ___

Commission file number 001-29190

CRESUD SOCIEDAD ANONIMA COMERCIAL

INMOBILIARIA FINANCIERA Y AGROPECUARIA

(Exact name of Registrant as specified in its charter)

Cresud Inc.

(Translation of Registrant’s name into English)

Republic of Argentina

(Jurisdiction of incorporation or organization)

Carlos M. Della Paolera 261, 9th Floor (C1001ADA),

City of Buenos Aires, Argentina

(Address of principal executive offices)

Matías Iván Gaivironsky

Chief Financial and Administrative Officer

Tel +(5411) 4323-7449 - ir@cresud.com.ar

Carlos M. Della Paolera 261, 9th Floor, (C1001ADA),

City of Buenos Aires, Argentina

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
American Depositary Shares (ADSs), each representing ten shares of Common Stock	CRESY	Nasdaq National Market of the Nasdaq Stock Market
Common Stock, par value ARS 1.00 per share		Nasdaq National Market of the Nasdaq Stock Market*

* Not for trading, but only in connection with the registration of American Depositary Shares, pursuant to the requirements of the Securities and Exchange Commission.

Securities registered or to be registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the Annual Report: 593,389,883.

Indicate by check mark if the registrant is a well known seasoned issuer, as defined in Rule 405 of the Securities Act: ☐ Yes     ☒ No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934. ☒ Yes     ☐ No

Note: Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(a) of the Securities Exchange Act of 1934 from their obligations under those Sections Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes     ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes     ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

Large accelerated filer	☐	Non-accelerated filer	☐
Accelerated filer	☒	Emerging growth company	☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐

†The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If  securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by checkmark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ☐ International Financial Reporting Standards as issued by the International Accounting Standards Board ☒ Other ☐

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

☐ Item 17     ☐ Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes     ☒  No

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by the court. Yes ☐     No ☐ 

Please send copies of notices and communications from the

Securities and Exchange Commission to:

Carolina Zang	Juan M. Naveira
Zang Bergel & Viñes Abogados	Simpson Thacher & Bartlett LLP
Florida 537, 18th Floor C1005AAK City of Buenos Aires, Argentina.	425 Lexington Avenue New York, NY 10017 United States of America

TABLE OF CONTENTS

	Page No.
GLOSSARY	i
DISCLAIMER REGARDING FORWARD-LOOKING STATEMENTS	iv
AVAILABLE INFORMATION	vi
PRESENTATION OF FINANCIAL AND CERTAIN OTHER INFORMATION	vii
Part I	1
ITEM 1. Identity of Directors, Senior Management, Advisers and Auditors	1
ITEM 2. Offer Statistics and Expected Timetable	1
ITEM 3. Key Information	1
A. Reserved	1
A.1. Local Exchange Market and Exchange Rates	1
B. Capitalization and Indebtedness	1
C. Reasons for the Offer and Use of Proceeds	1
D. Risk Factors	2
ITEM 4. Information on the Company	61
A. History and Development of the Company	61
B. Business Overview	75
C. Organizational Structure	139
D. Property, Plant and Equipment	140
ITEM 4A. Unresolved staff comments	143
ITEM 5. Operating and Financial Review and Prospects	143
A. Operating Results	143
B. Liquidity and Capital Resources	186
C. Research and Development, Patents and Licenses, Etc.	196
D. Trend Information	197
E. Critical Accounting Estimates	200
ITEM 6. Directors, Senior Management and Employees	202
A. Directors and Senior Management	202
B. Compensation	208
C. Board Practices	210
D. Employees	211
E. Share Ownership	211
ITEM 7. Major Shareholders and Related Party Transactions	212
A. Major Shareholders	212
B. Related Party Transactions	214
C. Interests of Experts and Counsel	218
ITEM 8. Financial Information	218
A. Consolidated Statements and Other Financial Information	218
B. Significant Changes	227
ITEM 9. The Offer and Listing	227
A. Offer and Listing Details	227
B. Plan of Distribution	228
C. Markets	228
D. Selling Shareholders	231
E. Dilution	231
F. Expenses of the Issue	231

ITEM 10. Additional Information	231
A. Share Capital	231
B. Memorandum and Articles of Association	231
C. Material Contracts	239
D. Exchange Controls	239
E. Money Laundering	244
F. Taxation	247
G. Dividends and Paying Agents	256
H. Statement by Experts	256
I. Documents on Display	256
J. Subsidiary Information	256
ITEM 11. Quantitative and Qualitative Disclosures about Market Risk	256
ITEM 12. Description of Securities Other than Equity Securities	257
A. Debt Securities	257
B. Warrants and Rights	257
C. Other Securities	257
D. American Depositary Shares	257
Part II	259
ITEM 13. Defaults, Dividend Arrearages and Delinquencies	259
ITEM 14. Material Modifications to the Rights of Security Holders and Use of Proceeds	259
ITEM 15. Controls and Procedures	259
A. Disclosure Controls and Procedures	259
B. Management’s Annual Report on Internal Control Over Financial Reporting	259
C. Attestation Report of the Registered Public Accounting Firm	260
D. Changes in Internal Control Over Financial Reporting	260
ITEM 16. Reserved	260
ITEM 16A. Audit Committee Financial Expert	260
ITEM 16B. Code of Ethics	260
ITEM 16C. Principal Accountant Fees and Service	261
ITEM 16D. Exemption from the Listing Standards for Audit Committees	262
ITEM 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers	262
ITEM 16F. Change In Registrant’s Certifying Accountant	263
ITEM 16G. Corporate Governance	263
ITEM 16H. Mine Safety Disclosures	266
ITEM 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	266
Part III	267
ITEM 17. Financial Statements	267
ITEM 18. Financial Statements	267
ITEM 19. Exhibits	267

GLOSSARY

Glossary of certain terms used in this Annual Report

Unless the context indicates otherwise, the following terms have the meanings shown below:

· “ADR”: American Depositary Receipt which represent the ADSs;

· “ADS” or “ADSs”: American Depositary Shares each representing 10 shares of our common stock issued pursuant to the deposit agreement, dated as of March 18, 1997 (the “Deposit Agreement”), between us and the ADS Depositary;

· “ADS Depositary”: The Bank of New York;

· “AFIP”: Federal Administration of Public Revenue (Administración Federal de Ingresos Públicos);

· “Agrofy”: Agrofy S.A.U.;

· “AMAUTA”: Amauta Agro S.A.;

· “ANSES”: National Social Security Agency (Administración Nacional de la Seguridad Social);

· “Annual Report”: this annual report;

· “ARS, Pesos or Peso”: Argentine Pesos;

· “Anti-Money Laundering Law”: Law No. 25,246, subsequently amended by, among others, Laws No. 26,087, 26,119, 26,268, 26,683, 26,733, 26,734 and Decree No. 27/2018;

· “Argentine Government”: Federal government of Argentina;

· “Audited Consolidated Financial Statements”: audited Consolidated Financial Statements as of June 30, 2023 and 2022 and for the years ended June 30, 2023, 2022 and 2021, and the notes thereto;

· “BACS”: Banco de Crédito y Securitización S.A.;

· “Banco Hipotecario”: Banco Hipotecario S.A.;

· “BASE”: Buenos Aires Stock Exchange;

· “Board of Directors”: the board of directors of CRESUD;

· “ByMA”: Argentine stock exchange and markets (Bolsas y Mercados Argentinos S.A.);

· “CABA”: Autonomus City of Buenos Aires (Ciudad Autónoma de Buenos Aires);

· “Caja de Valores”: depositary authorized to act in accordance with the Capital Markets Law (Caja de Valores S.A.);

· “CCI”: Consumer Confidence Index;

· “Central Bank”: The Argentine Central Bank (Banco Central de la República Argentina);

· “CML”: Capital Markets Law No. 26,831, as amended by, among others, Law 27,440;

· “CNDC”: National Competition Authority (Comisión Nacional de Defensa de la Competencia);

· “CNV”: The Argentine National Securities Commission (Comisión Nacional de Valores);

· “CNV Rules”: the rules issued by the CNV;

· “CODM”: Chief Operating Decision Maker;

· “Consumer Protection Law”: Argentine Law No. 24,240;

· “Corporate Criminal Liability Law”: Corporate Criminal Liability Law No. 27,401;

· “Covid-19”: the novel coronavirus, pneumonia originating in Wuhan, China;

· “COPREC”: Preliminary Conciliation Service for Consumer Relationships (Servicio de Conciliación Previa en las Relaciones de Consumo);

· “COSO Report”: the Committee of Sponsoring Organizations of the Treadway Commission;

i

· “CPI”: Consumer Price Index;

· “CPF”: Collective Promotion Fund;

· “CRESUD” or Company”: Cresud Sociedad Anónima Comercial, Inmobiliaria, Financiera y Agropecuaria;

· “CSJN”: Supreme Court (Corte Suprema de Justicia de la Nación);

· “CVCU”: Consultores Venture Capital Uruguay S.A.;

· “Dolphin B.V”: Dolphin Netherlands B.V.;

· “Edenor”: Empresa Distribuidora y Comercializadora Norte S.A.;

· “EMAE”: Monthly estimate of economic activity;

· “EOH”: Hotel Vacancy Survey (Encuesta de Ocupación Hotelera);

· “EU”: European Union;

· “Exchange Act”: United States Securities Exchange Act of 1934, as amended;

· “Executive Plan”: incentive plan for the Company’s executive officers;

· “FCPA”: U.S. Foreign Corrupt Practices Act of 1977;

· “FPC”: Building administration expenses and collective promotion funds (Fondo de Promoción Colectiva);

· “FyO”: Futuros y Opciones.Com S.A.;

· “GCBA”: Government of the Autonomous City of Buenos Aires (Gobierno de la Ciudad de Buenos Aires);

· “GCDI”: GCDI S.A.;

· “GDP”: Gross Domestic Product;

· “GDRs”: Global Depositary Receipts, which represent the GDSs;

· “GDSs”: Global Depositary Shares each representing 10 shares of IRSA’s common stock, issued pursuant to the deposit agreement, dated as of as of May 24, 1994, as amended and restated as of December 12, 1994, as amended and restated as of November 15, 2000, between IRSA and the GDS Depositary;

· “GDS Depositary”: The Bank of New York;

· “GLA”: Gross Leasable Area;

· “IAS 29”: Financial Reporting in Hyperinflationary Economies;

· “IASB”: International Accounting Standards Board;

· “ICSID”: International Centre for Settlement of Investment;

· “IFRS”: International Financial Reporting Standards;

· “IGJ”: Public Registry of Commerce of the City of Buenos Aires (Inspección General de Justicia);

· “ILPA Plan”: Long-Term Share-Based Incentive Plan;

· “IMF”: International Money Fund;

·  “Income Tax Law”: Law No. 20,628, as amended; 

· “INCRA”: Brazilian Institute of Agrarian Development (Instituto Nacional de Colonização e Reforma Agrária);

· “INDEC”: National Institute of Statistics and Censuses (Instituto Nacional de Estadística y Censos);

· “Investment Company Act”: Investment Company Act of 1940, as amended;

· “IPC”: Consumer Price Index (Índice de Precios al Consumidor);

· “IRS”: Internal Revenue Service;

· “IRSA”: IRSA Inversiones y Representaciones S.A.;

ii

· “IRSA CP”: IRSA Propiedades Comerciales S.A.;

· “kg” or “kgs”: Argentina standard measure of weight, a kilogram is equal to approximately 2.2 pounds;

· “KPIs”: key performance indicators;

· “LGS”: Argentine General Corporation Law No. 19,550 (Ley General de Sociedades);

· “MAE”: Mercado Abierto Electrónico S.A.;

· “MERCOSUR”: Common Market of the South;

· “MULC”: Foreign Exchange Market (Mercado Único y Libre de Cambios);

· “m2, or “sqm”: Standard measure of area in the real estate market in Argentina is the square meters;

· “NASDAQ”: National Market of the Nasdaq Stock Market;

· “NIS”: Israel Currency;

· “NYSE”: New York Stock Exchange;

· “Official Gazette”: Official Gazette of Argentina (Boletín Oficial de la República Argentina);

· “Paris Club 2014 Settlement Agreement”: settlement agreement reached among the Argentina and Paris Club members on May 29, 2014;

· “PASO”: Mandatory and simultaneous open primary elections (Elecciones primarias abiertas simultáneas y obligatorias);

· “PEN”: Argentine Executive Branch (Poder Ejecutivo Nacional);

· “PFIC”: Passive Foreign Investment Company;

· “PROCREAR”: Argentine Bicentennial Credit Program for Single Family Housing (“Programa de Crédito Argentino del Bicentenario para la Vivienda Única Familiar”);

· “Real, Reais, Rs. or BRL”: Brazilian Real, the legal currency Brazil;

· “Real Estate Registry”: Argentine Real Estate Property Registry (Registro de la Propiedad Inmueble);

· “RWS”: Responsible Wool Standard;

· “SAF Agreement”: Agreement executed between the IMF and Argentina on January 28, 2022.

· “SEC”: United States Securities and Exchange Commission;

· “Securities Act”: U.S. Securities Act of 1933, as amended;

· “SENASA”: Servicio Nacional de Sanidad y Calidad Agroalimentaria;

· “RTRS”: Round Table on Responsible Soy;

· “TAP”: Tax on Personal Assets;

· “tons” or “Tns”: Argentina standard measure of weight, a metric ton is equal to 1,000 kilograms;

· “UIF”: Financial Information Unit (Unidad de Información Financiera);

· “U.S.”: United States of America;

· “USD and/or U.S. dollars”: U.S. currency;

· “VAT”: Value Added Tax;

· “WEO”: World Economic Outlook, prepared by IMF;

· “YPF”: Yacimientos Petrolíferos Fiscales S.A.;

· “2013 COSO Report”: Integrated Framework-Internal Control issued by the Committee of Sponsoring Organizations of the Treadway Commission.

· “2BSvs”: Biomass Biofuels Sustainability voluntary scheme.

iii

DISCLAIMER REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report contains and incorporates by reference statements that constitute estimates and forward-looking statements. The words “believe,” “will,” “may,” “may have,” “would,” “estimate,” “continues,” “anticipates,” “intends,” “should,” “plans,” “expects,” “predicts,” “potential,” “seek” and similar words or phrases, or the negative of these terms or other similar expressions, are intended to identify estimates and forward-looking statements. Some of these statements include statements regarding our current intent, belief or expectations. While we consider these expectations and assumptions to be reasonable, forward-looking statements are subject to various risks and uncertainties, most of which are difficult to predict and many of which are beyond our control. Forward-looking statements are not guarantees of future performance. Actual results may be substantially different from the expectations described in the forward-looking statements. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results.

We have based these forward-looking statements on our current beliefs, expectations and assumptions about future events. While we consider these expectations and assumptions to be reasonable, they are inherently subject to significant risks and uncertainties, most of which are difficult to predict and many of which are beyond our control. The risks and uncertainties that may affect our forward-looking statements include, among others, the following:

· changes in general economic, financial, business, political, legal, social or other conditions in Argentina (including as a result of the presidential, provincial and congressional elections which will take place in Argentina on October 22, 2023), Brazil (including as a result of the uncertainties related to the ability of the current government to continue promoting economic and financial reforms in the country), Latin America, and other developed and/or emerging markets;

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

· inflation and interest rates;

· impact of the variants of Covid-19 and the spread of other infectious diseases on our business;

· fluctuations in the exchanges rates of the Peso and Reais, and in the prevailing interest rates in Argentina;

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

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

· price fluctuations in the agricultural real estate market;

· political, civil and armed conflicts;

· risks related to climate change;

· adverse legal or regulatory disputes or proceedings;

· fluctuations in the aggregate principal amount of Argentine and Brazilian public debt outstanding and default on Argentina’s of sovereign debt;

iv

· the impact of the agreement with the IMF and the restructuring of Argentina’s sovereign debt with the IMF and the Paris Club;

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

· restrictions on transfer of foreign currencies and other exchange controls;

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

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

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

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

· our ability to meet our debt obligations;

· shifts in consumer purchasing habits and trends;

· technological changes and our potential inability to implement new technologies;

· deterioration of regional, national or global businesses and economic conditions;

· the integration of any acquisitions and the failure to realize expected synergies;

· the implementation of a possible tax reform and/or an increase and/or creation of taxes;

· changes in current regulations related to urban and commercial leases;

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

· fluctuations and declines in the exchange rate of the Argentine Peso, Reais and the U.S. dollar against other currencies;

· fluctuation in market prices for our agriculture products could adversely affect our financial condition and result of operations;

· pest infestations and diseases may have an adverse impact on our crop yields and cattle production;

· our business is seasonal, and our revenues may fluctuate significantly depending on the growing cycle;

· the creation of export taxes may have an adverse impact on our sales and results of operations; and

· the risk factors discussed under “Risk Factors”.

Forward-looking statements refer only to the date of this Annual Report, and neither we undertake any obligation to update or revise any estimate or forward-looking statement due to new information, future events or otherwise. Additional factors or events affecting our business may emerge from time to time, and we cannot predict all of these factors or events, nor can we assess the future.

v

AVAILABLE INFORMATION

We file annual and current reports and other information with the United States Securities and Exchange Commission (“SEC”). You may obtain any report, information or other document we file electronically with the SEC at the SEC’s website (http://www.sec.gov) or at our website (http://www.cresud.com.ar). The information contained in our website does not form part of this Annual Report.

vi

PRESENTATION OF FINANCIAL AND CERTAIN OTHER INFORMATION

In this annual report (the “Annual Report”), references to “Cresud,” the “Company,” “we,” “us” and “our” means Cresud Sociedad Anónima Comercial, Inmobiliaria, Financiera y Agropecuaria, and its consolidated subsidiaries, unless the context otherwise requires, or where we make clear that such term refers only to Cresud and not to its subsidiaries.

References to “ADSs” are to the American Depositary Shares, each representing 10 shares of our common stock, issued pursuant to the Deposit Agreement, between us, The Bank of New York, as depositary (the “ADS Depositary”), and the owners and holders of the ADRs issued from time to time thereunder, and references to “ADRs” are to the American Depositary Receipts, which represent the ADSs.

Financial Statements

We prepare and maintain our financial books and records in Pesos (as defined below in section “-Currency”) and in accordance with IFRS, as issued by the IASB and the CNV Rules. Our fiscal year begins on July 1 of each year and ends on June 30 of each year thereafter.

Our audited Consolidated Financial Statements as of June 30, 2023 and 2022 and for the years ended June 30, 2023, 2022 and 2021, and the notes thereto (our “Audited Consolidated Financial Statements”) are set forth on pages F-1 through F-109 of this Annual Report.

Our Audited Consolidated Financial Statements have been approved by resolution of the Board of Directors’ meeting held on October 19, 2023 and have been audited by Price Waterhouse & Co S.R.L., Argentina, member of PricewaterhouseCoopers International Limited, an independent registered public accounting firm whose report is included herein.

Functional and Presentation Currency; Adjustment for Inflation

Our functional and presentation currency is the Argentine Peso, and our Audited Consolidated Financial Statements included in this Annual Report are presented in Argentine Pesos.

IAS 29 requires that the financial statements of an entity whose functional currency is one of a hyperinflationary economy be measured in terms of the current unit of measurement at the closing date of the financial statements, regardless of whether they are based on the historical cost method or the current cost method. This requirement also includes the comparative information of the financial statements.

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

See Note 2.2 to our Audited Consolidated Financial Statements for more information about the adoption of new standards.

Currency

Unless otherwise specified or the context otherwise requires, references in this Annual Report to “Peso,” “Pesos” or “ARS” are to Argentine pesos, references to “U.S. dollars,” “dollars” or “USD” are to United States dollars and references to “Real,” “Reais,” “Rs.” or “BRL” are to Brazilian Real, the legal currency Brazil.

vii

We have translated some of the Peso amounts contained in this Annual Report into U.S. dollars for convenience purposes only. Unless otherwise specified or the context otherwise required, the rate used to convert Peso amounts to U.S. dollars is the seller exchange rate quoted by Banco de la Nación Argentina of ARS 256.70 per USD 1.00 as of June 30, 2023. The average seller exchange rate for fiscal year 2023, quoted by Banco de la Nación Argentina was ARS 179.84. The seller exchange rate quoted by Banco de la Nación Argentina was ARS 350.10 per USD 1.00 as of October 18, 2023. The U.S. dollar-equivalent information presented in this Annual Report is provided solely for the convenience of the reader and should not be construed as implying that the Peso amounts represent, or could have been or could be converted into, U.S. dollars at such rates or at any other rate. See “Item 3. Key Information-A1. Local Exchange Market and Exchange Rates” and “Risk Factors-Risks relating to Argentina-Continuing high rates of inflation may have an adverse effect on the economy and our business, financial condition and results of our operations.”

Certain Measurements

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

In Argentina the standard measure of weight are the tons (“tons” or “Tns”) and kilograms (“kg” or “kgs”), while in the United States and certain other jurisdictions the standard measure of weight are the pound or the bushel. A metric ton is equal to 1,000 kilograms. A kilogram is equal to approximately 2.2 pounds. A metric ton of wheat is equal to approximately 36.74 bushels. A metric ton of corn is equal to approximately 39.37 bushels. A metric ton of soybean is equal to approximately 36.74 bushels. One kilogram of live weight cattle is equal to approximately 0.5 to 0.6 kilogram of carcass (meat and bones).

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

Rounding Adjustments

Certain figures which appear in this Annual Report (including percentage amounts) and in our financial statements have been subject to rounding adjustments for ease of presentation. Accordingly, figures shown for the same category presented in different tables or different parts of this Annual Report and in our financial statements may vary slightly, and figures shown as totals in certain tables may not be arithmetic aggregation of the figures that precede them.

Economic, Industry and Market Data

Economic, industry and market data and other statistical information included or incorporated by reference into this Annual Report is based on data compiled by us from internal sources and based on publications such as Bloomberg, the International Council of Shopping Centers, the Argentine Chamber of Shopping Centers (Cámara Argentina de Shopping Centers), and the INDEC. Although we believe these sources are reliable, we have not independently verified the information and cannot guarantee its accuracy or completeness.

viii

PART I

Item 1. Identity of Directors, Senior Management and Advisers

This item is not applicable.

Item 2. Offer Statistics and Expected Timetable

This item is not applicable.

Item 3. Key Information

A. Reserved

A.1. Local Exchange Market and Exchange Rates

The Argentine Government has established a series of exchange control measures that restrict the free flow of currency and the transfer of funds abroad. These measures significantly curtail access to the MULC by both individuals and private sector entities. This makes it necessary, among other things, to obtain prior approval from the Central Bank to enter into certain foreign exchange transactions such as payments relating to royalties, services or fees payable outside Argentina. For more information about exchange controls see, “Item 10. Additional Information-D. Exchange Controls”.

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

	Maximum (1) (2)		Minimum (1) (3)		Average (1) (4)		At closing (1)
Fiscal year ended:
June 30, 2021		95.62		70.42		83.81		95.62
June 30, 2022		125.13		95.66		105.27		125.13
June 30, 2023		256.50		125.35		179.71		256.50
Month ended:
July 31, 2023		275.05		257.70		266.23		275.05
August 31, 2023		349.60		275.95		321.75		349.50
September 30, 2023		349.60		349.45		349.50		349.45
October, 2023 (through October 18, 2023)		349.60		349.45		349.56		349.60

 ____________

Source: Banco de la Nación Argentina

(1)	Average between the offer exchange rate and the bid exchange rate according to Banco de la Nación Argentina’s foreign currency exchange rate.
(2)	The maximum exchange rate appearing in the table was the highest end-of-month exchange rate in the year or shorter period, as indicated.
(3)	The minimum exchange rate appearing in the table was the lowest end-of-month exchange rate in the year or shorter period, as indicated.
(4)	Average exchange rates at the end of the month.

B. Capitalization and Indebtedness

This section is not applicable.

C. Reasons for the Offer and use of Proceeds

This section is not applicable.

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D. Risk Factors

Summary of Risk Factors

The following summarizes some, but not all, of the risks provided below. Please carefully consider all of the information discussed in this Item 3.D. “Risk Factors” in this Annual Report for a more thorough description of these and other risks:

Risks Relating to Argentina, Brazil and other Countries Where We Operate

· We depend on macroeconomic and political conditions in Argentina.

· The impact of the next presidential, congressional and provincial elections on the future economic and political environment of Argentina remains uncertain.

· Economic and political developments in Argentina, and future policies of the Argentine Government may adversely affect the Argentine economy and the sectors in which we perform our activities.

· Continuing high rates of inflation may have an adverse effect on the economy and our business, financial condition and results of operations.

· High levels of public spending in Argentina could generate long-lasting adverse consequences for the Argentine economy.

· Argentina’s ability to obtain financing in the international capital markets is limited, which may impair our ability to access international credit markets to finance our operations in Argentina.

· Fluctuations in the value of the Peso could adversely affect the Argentine economy as well as our financial condition and results of operations.

· The Argentine economy and finances may be adversely affected as a consequence of a decrease in the international prices of commodities.

· The Brazilian government has exercised, and continues to exercise, significant influence over the Brazilian economy, which, together with Brazilian political and economic conditions, may adversely affect us.

· Inflation and fluctuation in interest rates could have a material adverse effect on our business, financial condition and results of operations.

Risks Relating to Our Agricultural Business

· Fluctuation in market prices for our agriculture products could adversely affect our financial condition and results of operations.

· Unpredictable weather conditions, pest infestations and diseases may have an adverse impact on our crop yields and cattle production. We may be exposed to material losses due to volatile crop prices since a significant portion of our production is not hedged, and exposed to crop price risk.

· Worldwide competition in the markets for our products could adversely affect our business and results of operations.

· Our business is seasonal, and our revenues may fluctuate significantly depending on the growing cycle.

· A substantial portion of our assets is farmland, an asset that is highly illiquid.

· Worldwide competition in the markets for our products could adversely affect our business and results of operations.

· Our level of debt may adversely affect our operations and our ability to pay our debt as it becomes due and our capacity to successfully access the local and international markets on favorable terms affects our cost of funding.

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Risks Relating to IRSA’s Business in Argentina

· IRSA is subject to risks inherent to the operation of shopping malls that may affect our profitability.

· IRSA could be adversely affected by decreases in the value of our investments.

· The increasingly competitive real estate sector in Argentina may adversely affect IRSA’s ability to rent or sell office space and other real estate.

· IRSA’s assets are highly concentrated in certain geographic areas and an economic downturn in such areas could have a material adverse effect on its results of operations and financial condition.

· The loss of tenants could adversely affect IRSA’s operating revenue and value of its properties.

· IRSA may face risks associated with acquisitions of properties, IRSA’s future acquisitions may not be profitable and the properties IRSA acquires may be subject to unknown liabilities.

· Some of the land IRSA has purchased is not zoned for development purposes, and it may be unable to obtain, or may face delays in obtaining, the necessary zoning permits and other authorizations.

· The increasingly competitive real estate sector in Argentina may adversely affect IRSA’s ability to rent or sell office space and other real estate and may affect the sale and lease price of IRSA’s premises.

Risks Relating to IRSA’s Investment in Banco Hipotecario

· The short-term structure of the deposit base of the Argentine financial system, including Banco Hipotecario, could lead to a reduction in liquidity levels and limit the long-term expansion of financial intermediation.

· Banco Hipotecario issues debt in the local and international capital markets as one of its sources of funding and its capacity to successfully access the local and international markets on favorable terms affects its cost of funding.

· The asset quality of financial institutions is exposed to the non-financial public sector’s and Central Bank’s indebtedness.

· Banco Hipotecario operates in a highly regulated environment and its operations are subject to capital controls regulations adopted by several regulatory agencies.

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Risks Relating to our ADSs and Common Shares

· Shares eligible for sale could adversely affect the price of our common shares and ADSs.

· If we issue additional equity securities in the future, you may suffer dilution, and trading prices for our equity securities may decline.

· We are subject to certain different corporate disclosure requirements and accounting standards than domestic issuers of listed securities in the United States.

· Investors may not be able to effect service of process within the United States, limiting their recovery of any foreign judgment.

· Under Argentine law, shareholder rights may be fewer or less well defined than in other jurisdictions and our ability to pay dividends is limited by law and our by-laws.

· Restrictions on the movement of capital out of Argentina may impair your ability to receive dividends and distributions on, and the proceeds of any sale of, the common shares underlying the ADSs.

· The warrants are exercisable under limited circumstances and will expire.

Risk Factors

You should carefully consider the risks described below, in addition to the other information contained in this Annual Report, before making an investment decision. We also may face additional risks and uncertainties not currently known to us, or which as of the date of this Annual Report we might not consider significant, which may adversely affect our business. In general, you take more risk when you invest in securities of issuers in emerging markets, such as Argentina, than when you invest in securities of issuers in the United States, and certain other markets. You should understand that an investment in our common shares and ADSs involves a high degree of risk, including the possibility of loss of your entire investment.

Risks Relating to Argentina

We depend on macroeconomic and political conditions in Argentina.

The Argentine economy has experienced significant volatility in recent decades, characterized by periods of low or negative growth, high levels of inflation and currency devaluation. Sustainable economic growth in Argentina depends on a variety of factors including the international demand for Argentine exports, the stability and competitiveness of the Peso against foreign currencies, confidence among consumers and foreign and domestic investors and a stable rate of inflation, national employment levels and the circumstances of Argentina’s regional trade partners. The Argentine macroeconomic environment, in which we operate, remains vulnerable, as reflected by the following economic conditions: (i) according to the data published by the INDEC in 2022 and 2023, for the fiscal years ended June 30, 2021 and 2022, Argentina’s real GDP increased by 10.4% compared to the year ended June 30, 2020, and increased by 5.2% compared to the year ended June 30, 2021, respectively; (ii) continued increases in public expenditures have resulted and could continue to result in fiscal deficit and affect economic growth; (iii) inflation remains high and may continue at those levels in the future; (iv) investment as a percentage of GDP remains low to sustain the growth rate of the past decades; (v) protests or strikes may adversely affect the stability of the political, social and economic environment and may negatively impact the global financial market’s confidence in the Argentine economy; (vi) energy or natural gas supply may not be sufficient to supply increased industrial activity (thereby limiting industrial development) and consumption; (vii) unemployment and informal employment remain high; and (viii) the Argentine Government’s economic expectations may not be met and the process of restoring the confidence in the Argentine economy may take longer than anticipated.

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As in the recent past, Argentina’s economy may be adversely affected if political and social pressures inhibit the implementation by the Argentine Government of policies designed to control inflation, generate growth and enhance consumer and investor confidence, or if policies implemented by the Argentine Government that are designed to achieve these goals are not successful. These events could materially affect our financial condition and results of operation or cause the market value of our ADSs and our common shares to decline. Moreover, Argentina’s economic growth was severely impacted as a consequence of the Covid-19 pandemic. For more information, see “Item 3. Key Information—D. Risk Factors—Risks Relating to Argentina—The impact of the next presidential, congressional and provincial elections on the future economic and political environment of Argentina remains uncertain.”

We cannot assure you that a decline in economic growth will not adversely affect our business, financial condition or results of operation and cause the market value of our ADSs and our common shares to decline.

The impact of the next presidential, congressional and provincial elections on the future economic and political environment of Argentina remains uncertain.

The Argentine economy is subject to the effects of uncertainty over political developments in Argentina. On October 22, 2023, Argentina will hold presidential, provincial and congressional elections. As a result of these elections, the President of Argentina, the head of the government of the CABA, the governors of certain Argentine provinces, half of the members of the Congress and one third of the members of the Senate and other positions, such as provincial legislators, mayors and municipal councilors, will be elected.

Prior to such elections, the PASO elections were held on August 13, 2023. The PASO elections are meant to elect the definitive candidates of each party to be voted in the general election in October 2023. As a result of the PASO elections, the candidates appointed by the parties obtained these results: (i) “La Libertad Avanza” obtained 29.9% of the votes; (ii) “Juntos por el Cambio” obtained 28.0% of the votes; and (iii) “Unión por la Patria” obtained 27.3% of the votes. General elections will be held throughout the country on October 22, 2023, which will define who will be the future President of Argentina.

Electoral uncertainty could lead to high volatility in Argentine financial markets, and uncertainty regarding political developments and the policies the Argentine Government may adopt or alter may have material adverse effects on the macroeconomic environment in Argentina, as well as on businesses operating in Argentina, including ours.

On October 10, 2023, the IMF released its World Economic Outlook (“WEO”) report where it estimates that by the end of 2023 Argentina’s GDP will decrease 2.5% compared to 2022 and that inflation will stand at 135.7%. The persistent inflation and lower growth could exacerbate social discontent and weaken political support, causing difficulties in implementing the planned subsidies and social assistance reforms and in securing debt rollover rates.

No assurances can be made as to the policies that may be implemented by a new Argentine Government, or that political developments in Argentina will not adversely affect the Argentine economy and our business, financial condition and results of operations. In addition, we cannot assure you that future economic, regulatory, social and political developments in Argentina will not impair our business, financial condition, or results of operations, or cause the market value of our ADSs and our common shares to decline.

Economic and political developments in Argentina, and future policies of the Argentine Government may adversely affect the Argentine economy and the sectors in which we perform our activities

The Argentine Government has historically exercised significant influence over the economy, and our Company has operated in a highly regulated environment. In the recent past, the Argentine Government has directly intervened in the economy, including through the implementation of expropriation and nationalization measures, price controls and exchange controls.

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In the future, the Argentine Government may introduce new exchange controls and/or strengthen the existing ones, create restrictions on transfers to other countries, restrictions to capital movement or other measures in response to an eventual capital flight or a significant depreciation in the Peso, measures that can, in turn, affect our ability to access the international capital markets. In the event of any economic, social or political crisis, companies operating in Argentina may face the risk of strikes, expropriation, nationalization, mandatory amendment of existing contracts, and changes in taxation policies, including tax increases and retroactive tax claims. In addition, Argentine courts have sanctioned modifications on rules related to labor matters, requiring companies to assume greater responsibility for the assumption of costs and risks associated with subcontracted labor and the calculation of salaries, severance payments and social security contributions. Since we operate in a context in which the governing law and applicable regulations change frequently, in part as the result of changes in government administrations, it is difficult to predict if and how our activities will be affected by such changes (See “—The impact of the next presidential, congressional and provincial elections on the future economic and political environment of Argentina remains uncertain.”)

On September 1, 2019, as a result of the economic instability and uncertainty, the depreciation of the Argentine Peso and rising inflation rates, the former Argentine administration and the Central Bank adopted a series of measures reinstating foreign exchange controls. Following the change in government, the new administration extended the validity of such measures and established further restrictions by means of the enacted Social Solidarity and Productive Reactivation Law N° 27.541, including a new tax on certain transactions involving the purchase of foreign currency by both Argentine individuals and entities. Additional volatility, appreciation or depreciation of the Peso against the U.S. dollar or reduction of the Central Bank’s reserves because of currency intervention could adversely affect the Argentine economy and our ability to service our debt obligations and could affect the value of our ADSs and our common shares. We cannot assure you that the official exchange rate will not fluctuate significantly in the future. There can be no assurances regarding future modifications to exchange controls. Exchange controls could adversely affect our financial condition or results of operations and our ability to meet our foreign currency obligations and execute our financing plans. For more information, please see “Item 10. Additional Information - D. Exchange Controls”.

The success of these measures or other measures that the Central Bank may implement in the future, are subject to uncertainty and any further depreciation of the Argentine Peso, further inflation or our inability to acquire foreign currency could have a material adverse effect on our financial condition and results of operations. We cannot predict the effectiveness of these measures. We cannot predict whether, and to what extent, the value of the Argentine Peso may depreciate or appreciate against the U.S. dollar or other foreign currencies, and how these uncertainties will affect our businesses. Furthermore, no assurance can be given that, in the future, no additional currency or foreign exchange restrictions or controls will be imposed. Existing and future measures may negatively affect Argentina’s international competitiveness, discouraging foreign investments and lending by foreign investors or increasing foreign capital outflow which could have an adverse effect on economic activity in Argentina, and which in turn could adversely affect our business and results of operations. We cannot predict how these conditions will affect our ability to meet our liabilities denominated in currencies other than the Argentine Peso. Any restrictions on transferring funds abroad imposed by the government could undermine our ability to pay dividends on our ADSs or make payments (of principal or interest) under our outstanding indebtedness in U.S. dollars, as well as to comply with any other obligation denominated in foreign currency.

In this context, in the PASO elections held on August 13, 2023, the political party “La Libertad Avanza” obtained the highest percentage of the votes (29.9%). Javier Milei is the leader of this political party and, if elected as president, he proposes a plan to dollarize the Argentine economy, among other measures (such as potentially closing the Central Bank). This could have a negative effect on the country’s economy. We cannot predict what impact it will have on our business financial condition, or results of operations.

We cannot affirm that the Argentine economic, regulatory, social and political framework or the policies or measures that the Argentine Government adopts or may adopt, will not adversely affect the market value of our ADSs, our business, financial condition and/or results of operation.

Continuing high rates of inflation may have an adverse effect on the economy and our business, financial condition and results of operations.

Historically, high rates of inflation have undermined the Argentine economy and the Argentine Government’s ability to foster conditions for stable growth. High rates of inflation may also undermine Argentina’s competitiveness in international markets and adversely affect economic activity and employment, as well as our business, financial condition and results of operations.

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Argentina has confronted inflationary pressures, evidenced by significantly higher fuel, energy and food prices, among other factors. The National CPI variation was 94.8% in 2022, 50.9% in 2021 and 36.1% in 2020. On July 7, 2023, the Central Bank announced that the new inflation estimates for 2023, 2024 and 2025 are 142.4%, 105.0% and 54.8%, respectively, pursuant to its survey of market expectations (Relevamiento de Expectativas de Mercado) which was carried out between June 28 and June 30, 2023. After the PASO elections, the Argentine Government devalued the Peso by 22%, and this devaluation, which is expected to continue until October 2023, is immediately reflected in prices and the inflation rate, which was 12.7%, as of September, 2023. The Argentine Government’s adjustments to electricity and gas tariffs, as well as the increase in the price of gasoline have affected prices, creating additional inflationary pressure. If the value of the Argentine Peso cannot be stabilized through fiscal and monetary policies, an increase in inflation rates could be expected.

A high inflation rate or a hyperinflationary process affects Argentina’s foreign competitiveness by diluting the effects of the Peso depreciation, negatively impacting employment and the level of economic activity and undermining confidence in Argentina’s banking system, which may further limit the availability of domestic and international credit to businesses. In turn, a portion of the Argentine debt continues to be adjusted by the CER, a currency index, that is strongly correlated with inflation. Therefore, any significant increase in inflation would drive an increase in the Argentine external debt and consequently in Argentina’s financial obligations, which could exacerbate the stress on the Argentine economy. The efforts undertaken by the Argentine Government to reduce inflation have not achieved the desired results. A continuing inflationary environment could undermine our results of operation, adversely affect our ability to finance the working capital needs of our businesses on favorable terms and our results of operation and cause the market value of our ADSs and our common shares to decline.

There is uncertainty regarding the effectiveness of the policies implemented by the Argentine Government to reduce and control inflation and the potential impact of those policies. An increase in inflation may adversely affect the Argentine economy, which in turn may have a negative impact on our financial condition and results of operation.

There can be no assurances that inflation rates will not continue to escalate in the future or that the measures adopted or that may be adopted by the Argentine Government to control inflation will be effective or successful. High rates of inflation remain a challenge for Argentina. Significant increases in the rates of inflation could have a material adverse effect on Argentina’s economy and in turn could increase our costs of operation, in particular labor costs, and may negatively affect our business, financial condition and results of operations.

High levels of public spending in Argentina could generate long-lasting adverse consequences for the Argentine economy.

During recent years, the Argentine Government has substantially increased public spending. Argentina recorded a primary deficit of 6.5%, 3.0% and 2.4% of GDP in 2020, 2021 and 2022, respectively. If government spending continues to outpace fiscal revenue, the fiscal deficit is likely to increase.

The Argentine Government’s ability to access the long-term financial markets to finance such increased spending is limited given the high levels of public sector indebtedness. The inability to access the capital markets to fund its deficit or the use of other sources of financing may have a negative impact on the economy and, in addition, could limit the access to such capital markets for Argentine companies, which could adversely affect our business, financial condition and results of operations.

Argentina’s ability to obtain financing in the international capital markets is limited, which may impair our ability to access international credit markets to finance our operations in Argentina.

Argentina’s history of defaults on its external debt and the protracted litigation with holdout creditors may reoccur in the future and prevent Argentine companies such as us from accessing the international capital markets readily or may result in higher costs and more onerous terms for such financing, and may therefore negatively affect our business, results of operation, financial condition, the value of our securities, and our ability to meet our financial obligations. Following the default on its external debt in 2001, Argentina sought to restructure its outstanding debt in exchange offers in 2005 and again in 2010. Holders of approximately 93% of Argentina’s defaulted debt participated in the exchanges, but a number of bondholders held out from the exchange offers and pursued legal actions against Argentina. The Argentine Government settled several agreements with the defaulted bondholders, ending more than 15 years of litigation. In addition, in August 2020, the Argentine Government successfully negotiated the debt restructuring of Argentine bonds representing approximately USD 65 billion owed to several bondholders.

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On January 28, 2022, Argentina signed an agreement with the IMF (the “SAF Agreement”) to refinance indebtedness for more than USD 40 billion, which Argentina originally incurred with the IMF in 2018. Argentina and the IMF agreed on certain measures related to the reduction of public spending and subsidy rates, focused on the energy sector. The agreement was approved by the Argentinean Congress and by the Board of the IMF. Among other points, an economic and monetary policy was established, where the IMF will be the co-director, carrying out quarterly audits on Argentina’s finances and economic development.

On September 19, 2022, IMF staff and the Argentine authorities reached an agreement on an updated macroeconomic framework and associated policies needed to complete the second review under the SAF Agreement. The agreement was subject to approval by the IMF Executive Board. Upon completion of the review, Argentina would have access to about USD 3.9 billion. Most of the quantitative program targets through end-June 2022 were met, with the exception of the net international reserves floor, mainly due to higher-than-programmed import volume growth and delays in external official support. The agreement was halted due to a period of volatility in the foreign exchange and bond markets and certain measures were taken to correct earlier setbacks and rebuild credibility. On March 13, 2023, the IMF approved the fourth revision of the SAF Agreement and authorized the disbursement of approximately USD 5.3 billion. On August 23, 2023, the IMF approved the fifth and sixth revisions to the SAF Agreement, resulting in a new disbursement of USD 7.5 million.

On March 13, 2020, the Minister of Economy addressed a letter to the Paris Club members expressing Argentina’s decision to postpone until May 5, 2021 the USD 2,100 million payment originally due on May 5, 2020, in accordance with the terms of the settlement agreement reached with the Paris Club members on May 29, 2014 (the “Paris Club 2014 Settlement Agreement”). On April 7, 2020, the Minister of Economy sent the Paris Club members a proposal to modify the existing terms of the Paris Club 2014 Settlement Agreement, mainly seeking an extension of the maturity dates and a significant reduction in the interest rate. On June 22, 2021, Argentina’s Minister of Economy announced that the Argentine Government obtained a “time bridge” within the framework of the Paris Club negotiations, consequently avoiding default. Pursuant to such agreements, Argentina should have reached a restructuring agreement with the Paris Club members by March 31, 2022. However, on March 31, 2022, such agreement was extended until July 31, 2022 and, on May 31, 2022, it was further extended until September 30, 2024.

On October 28, 2022, the Minister of Economy announced a new agreement with the Paris Club. The agreement is an addendum to the Paris Club 2014 Settlement Agreement and recognizes a principal amount of USD 1,971 million, extending a repayment period of thirteen semi-annual installments, starting in December 2022 and to be finally cancelled in September 2028. Pursuant to this new agreement, the interest rate was improved from 9% to 3.9% in the first three installments, with a gradual increase to 4.5%. The payment profile implies an average semi-annual payment of USD 170 million (principal and interest included). Over the next two years, Argentina will repay 40% of the principal due.

A breach by Argentina of any of the aforementioned agreements could affect the ability of Argentina and our ability to obtain credit. Our company cannot predict how this agreement and the policies developed based on it will impact Argentina’s ability to access international capital markets (and indirectly in our ability to access those markets), in the Argentine economy or in our economic and financial situation or in our capacity to extend the maturity dates of our debt or other conditions that could affect our results and operations or businesses.

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Fluctuations in the value of the Peso could adversely affect the Argentine economy as well as our financial condition and results of operations.

Significant fluctuation in the exchange rate of the Peso against foreign currencies may adversely affect the Argentine economy as well as our financial condition and results of operations. The Argentine Peso has been subject to significant devaluation against the U.S. dollar in the past and may be subject to fluctuations in the future. We cannot predict whether and to what extent the value of the Peso could depreciate or appreciate against the U.S. dollar and the way in which any such fluctuations could affect our business. The value of the Peso compared to other currencies is dependent, in addition to other factors listed above, on the level of international reserves maintained by the Central Bank, which have also shown significant fluctuations in recent years. As of October 11, 2023, the international reserves of the Central Bank totaled USD 25,772 million. According to the exchange rate information published by the Banco de la Nación Argentina, the Argentine Peso depreciated by 105.0% against the U.S. dollar during our fiscal year ended June 30, 2023 (compared to 30.9%, 35.9% and 66.1% in the years ended June 30, 2022, 2021 and 2020, respectively). As of the date of this Annual Report the Peso has depreciated by approximately 36%.

Fluctuations in the value of the Peso may also adversely affect the Argentine economy, as well as our products, our financial condition and results of operation. The devaluation of the Argentine Peso may have a negative impact on the ability of certain Argentine businesses to service their foreign currency-denominated debt, lead to high inflation, significantly reduce real wages, jeopardize the stability of businesses whose success depends on domestic market demand, including public utilities and the financial industry, and adversely affect the Argentine Government’s ability to honor its foreign debt obligations.

On the other hand, a significant appreciation of the Argentine Peso against the U.S. dollar also presents risks for the Argentine economy, including the possibility of a reduction in exports (as a consequence of the loss of external competitiveness). Any such increase could also have a negative effect on economic growth and employment, reduce the Argentine public sector’s revenues from tax collection in real terms, and have a material adverse effect on our business, our results of operation, our ability to repay our debt within the respective maturity dates and affect the market value of our ADSs, as a result of the overall effects of the weakening of the Argentine economy.

The Argentine economy and finances may be adversely affected as a consequence of a decrease in the international prices of commodities

The commodities market is characterized by its volatility. Commodities exports have contributed significantly to the revenues of the Argentine Government. Subsequently, the Argentine economy has remained relatively dependent on the price of its exports (mainly soy). Given its reliance on agricultural commodities, Argentina is also vulnerable to weather events. During 2018, Argentina suffered a huge drought - presumably the biggest drought in the last 50 years. The effects of the drought in the agricultural sector caused significant economic problems for Argentina, with impacts in the soy and corn harvests that generated damages of approximately USD 6 billion. Currently, Argentina is facing another severe drought, which may negatively affect the production of agricultural commodities and is expected to result in net income losses of USD 10,425 billion for the production sector, equivalent to 2.2% of the GDP that the IMF projects for Argentina in 2023. The negative impact that the droughts which occurred in Argentina in 2018 and 2023 have had in Argentina has been reinforced by the historic drop in the Paraná river (Argentina’s main river) and a large number of fire outbreaks in multiple Argentine provinces during 2022. These environmental events have negatively affected the agriculture sector in Argentina.

A sustained decrease in the international price of the main commodities exported by Argentina, or any future climate event or condition may have an adverse effect in the agricultural sector and therefore in the revenues of the Argentine Government and its capacity to comply with the payments of its public debt, eventually generating recessive or inflationary pressures. In addition, such circumstances could have a negative impact on the government’s tax revenues and on the availability of foreign currency. Any such developments may adversely affect Argentina’s economy and, as a result, our business, results of operations and financial condition.

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The interruption of the publication of Argentine economic indexes or changes in their calculation methodologies could affect the projections made by the Company.

In 2014, the INDEC established a new consumer price index, the CPI, which reflects a broad measurement of consumer prices, considering price information from the 24 provinces of the country, divided into six regions. Faced with the credibility of the CPI, as well as other indices published by the INDEC, being called into question, the Argentine Government declared a state of administrative emergency for the national statistical system and the INDEC on January 8, 2016, based on the determination that the INDEC had failed to produce reliable statistical information, particularly with respect to CPI, GDP, inflation and foreign trade data, as well as with poverty and unemployment rates. The INDEC temporarily suspended the publication of certain statistical data until the reorganization of its technical and administrative structure to recover its ability to produce reliable statistical information. In 2017, the INDEC began publishing a National CPI, which is based on a survey conducted by the INDEC and several provincial statistical offices in 39 urban areas including each of Argentina’s provinces. The official CPI inflation rate for the fiscal year ended June 30, 2023 was 115,6 %.

Any future required correction or restatement of the INDEC indexes could result in decreased confidence in Argentina’s economy, which, in turn, could have an adverse effect on our ability to access international capital markets to finance our operations and growth, and which could, in turn, adversely affect our results of operation and financial condition and cause the market value of our ADSs and our common shares to decline.

Restrictions on transfers of foreign currency and the repatriation of capital from Argentina may impair our ability to pay dividends and distributions and investors may face restrictions on their ability to collect capital and interest payments in connection with corporate bonds issued by Argentine companies.

The Argentine government may impose restrictions on the exchange of Argentine currency for foreign currencies and on the remittance to foreign investors of funds derived from investments in Argentina in circumstances in which a serious imbalance in Argentina’s balance of payments develops or in which there is reason to anticipate such an imbalance. The Argentine Government has implemented a number of monetary and exchange control measures, including restrictions on the free use of funds deposited in banks and on the transfer of funds abroad without the prior approval of the Central Bank.

Therefore, there are certain restrictions in Argentina that affect corporations’ ability to access the MULC to acquire foreign currency to transfer funds to other countries, service debt, make payments outside Argentina and other operations, requiring, in some cases, prior approval by the Central Bank.

Through Emergency Decree No. 609/2019, the PEN established restrictions on the exchange market, establishing that the countervalue of the export of goods and services must be brought into the country in foreign currency and/or traded in the exchange market under the conditions and terms established by the Central Bank, which will provide the assumptions under which access to the exchange market for the purchase of foreign currency and precious metals and transfers abroad will require prior authorization, based on objective guidelines in accordance with the conditions in force in the exchange market, and distinguishing the situation of human persons from that of legal entities.

In this regard, pursuant to the provisions of Emergency Decree No. 609/2019, the Central Bank issued several communications which later, with some modifications, were included in the Consolidated Text on Foreign Trade and Exchange regulations established by Communication “A” No. 6844. The Consolidated Text on Foreign Trade and Exchange imposes certain foreign exchange restrictions such as prior approval of the Central Bank (i) for the payment of dividends; (ii) for the access to the foreign exchange market for non-residents, except for specific exceptions (diplomatic representations, certain international organizations and institutions abroad, individuals living abroad who receive retirements plans or pensions from ANSES); and (iii) to constitute external assets, remit family assistance and the formation of guarantees and operating payments related to derivative transactions, for resident individuals, if the total amount of the above-mentioned transactions exceeds the equivalent of USD 200 per month in all entities authorized to operate in foreign exchange, of which only up to USD 100 can be acquired in cash, otherwise, the transaction will be made by debit to local accounts. 

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Due to the financial complications Argentina is currently undergoing, we cannot rule out that the Argentine Government or the Central Bank may in the future impose further formal restrictions on the outflow of foreign currency from the country, such as the restrictions set forth by the Central Bank in Communication “A” No. 7746, dated 04/20/2023, for outflows through the foreign exchange market, by means of which it modified the terms to access the foreign exchange market, as well as the restrictions set forth in Communication “A” No. 7766, dated 05/11/2023, which established the obligation to inform who are the individuals or legal entities that exercise a direct control over the person accessing the foreign exchange market and those persons that are part of the same economic group. Such measures could adversely affect Argentina’s global competitiveness, discourage foreign investment and lending by foreign investors or increase the outflow of foreign capital, which could have an adverse effect on Argentina’s economic activity, and could adversely affect our business and results of operations or impair our ability to pay dividends in U.S. dollars or prevent us from servicing our international debts.

Moreover, on September 15, 2020, Communication “A” 7,106 established that companies must refinance the maturities of the capital of the financial debt in the period between October 15, 2020 and December 31, 2023. Subsequently, such period was extended in various opportunities, with the final extension being issued on October 13, 2022, pursuant to Communication “A” 7,621 by which it was further extended until December 31, 2023. In this regard, the Central Bank will grant companies access to the MULC for up to 40% of the maturities and the companies must refinance the remaining 60% within a period of at least two years.

In addition, as a result of the deepening of exchange controls, the difference between the official exchange rate, which is currently utilized for both commercial and financial operations, and other informal exchange rates that arose implicitly as a result of certain operations commonly carried out in the capital market (“cash with liquidation”), which increased during 2023, was a gap of approximately 90% as of June 30, 2023. The Argentine Government could maintain a single official exchange rate or create multiple exchange rates for different types of transactions, substantially modifying the applicable exchange rate at which we acquire currency to service our outstanding foreign currency denominated liabilities. We cannot predict how such current restrictions may evolve after this Annual Report, mainly regarding limitations to transfer funds outside the country. The Argentine Government may impose further exchange controls or restrictions to capital transfers and modify and adopt other policies that may limit or restrict our ability to access international capital markets, to make payments of principal and interest and other additional amounts outside the country (including payments relating to our notes), to import certain products or goods that we use as inputs, undermine our ability to pay dividends on our ADSs in U.S. dollars, or affect in other ways our business and our results of operation, or cause the market value of our ADSs and our common shares to decline.

 As of the date of this Annual Report, the restrictions outlined above remain in place. Such measures may negatively affect Argentina’s international competitiveness, discouraging foreign investments and lending by foreign investors or increasing foreign capital outflow which could have an adverse effect on economic activity in Argentina, and which in turn could adversely affect our business and results of operations. The challenge will be to achieve acceptance by creditors, in accordance with the Central Bank regulations mentioned above, especially when it has highly diversified and retail creditors.

The company has several dollar-denominated maturities affected by these measures. For more information, see “Operating and Financial Review and Prospects-Liquidity and capital resources-Indebtedness”.

As of the date of this Annual Report, we have outstanding obligations pursuant to the Series XXXI, XXXIII, XXXIV, XXXVII and XXXVIII Notes issued by the Company for USD 113.9 million. We cannot predict whether the Government will impose further exchange controls and transfer restrictions that may impair our ability to access the MULC for the repayment of the total amount or part of such obligations.

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A high level of uncertainty with regard to these economic variables, and a general lack of stability in terms of inflation, could have a negative impact on economic activity and adversely affect our financial condition.

As of July 1, 2018, the Peso qualified as a currency of a hyperinflationary economy and we were required to restate our historical financial statements in terms of the measuring unit current at the end of the reporting year, which could adversely affect our results of operations and financial condition.

Pursuant to IAS 29, the financial statements of entities whose functional currency is that of a hyperinflationary economy must be restated for the effects of changes in a suitable general price index. IAS 29 does not prescribe when hyperinflation arises, but includes several characteristics of hyperinflation. The IASB does not identify specific hyperinflationary jurisdictions. However, in June 2018, the International Practices Task Force of the Center for Quality, which monitors “highly inflationary countries”, categorized Argentina as a country with projected three-year cumulative inflation rate greater than 100%. Additionally, some of the other qualitative factors of IAS 29 were present, providing prima facie evidence that the Argentine economy was hyperinflationary for the purposes of IAS 29. Therefore, Argentine companies that prepare financial statements pursuant to IFRS and use the Peso as their functional currency were required to apply IAS 29 to their financial statements for periods ending on and after July 1, 2018.

Adjustments to reflect inflation, including tax indexation, such as those required by IAS 29, are in principle prohibited in Argentina. However, on December 4, 2018, the Argentine Government enacted Law No. 27,468, which lifted the ban on indexation of financial statements. Certain regulatory authorities, such as the CNV and the IGJ, have required that financial statements for periods ended on and after December 31, 2018, be restated for inflation in accordance with IAS 29.

During the first three fiscal years beginning after January 1, 2018, inflation adjustment for tax purposes was applicable if the variation in the CPI exceeds 55% in 2019, 30% in 2020 and 15% in 2021.

Therefore, inflation adjustment for tax purposes:

· Year ended June 30, 2019: one third of the adjustment to be allocated to 2019 and the remaining two thirds to be allocated in equal parts in the following two years.

· Years ended June 30, 2020 and 2021: one sixth of the adjustment to be allocated to 2020 and 2021 and the remaining portions in equal parts in the five following years.

Beginning in fiscal year 2022, the inflation adjustment for tax purposes is applicable if the variation in the accumulated CPI in the 36 months prior to the end of the fiscal year being settled is higher than 100%. In that case, the result of inflation adjustment for tax purposes is fully allocated to the fiscal year in which it originated.

We cannot predict the future impact that the eventual application of inflation adjustment for tax purposes and other related inflation adjustments described above will have on our financial statements or their effects on our business, results of operations and financial condition.

Certain measures that may be taken by the Argentine Government, or changes in policies, laws and regulations, may adversely affect the Argentine economy and, as a result, our business, financial condition and results of operations.

The Argentine Government exercises substantial control over the economy and may increase its level of intervention in certain areas of the economy, including through the regulation of market conditions and prices.

On August 23, 2023, the Chamber of Deputies approved a draft amendment to the lease law, aiming to reduce the minimum term of lease agreements to two years and establish an adjustment to the rental fee using the CPI published by the INDEC, or a combination of permitted indexes, as the parties may agree. Also, this bill established that rental value adjustments could be made at periods agreed upon by the parties, which should be no shorter than four months.

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This bill was approved by the Chamber of Deputies and subsequently discussed by the Senate. The Senate agreed to make changes to the bill. These changes include: (i) that the minimum term of the lease agreements is maintained at three years, (ii) that the minimum update of the value of the rental fee is made every six months, and (iii) that the Casa Propia coefficient index, developed by the Ministry of Territorial Development and Habitat (Ministerio de Desarrollo Territorial y Hábitat) is used to adjust the increase in the rental fee.

On October 11, 2023, in light of the proposed changes made by the Senate, the Chamber of Deputies revisited and approved the text proposed by the Senate, and the bill was enacted into law with the scope set forth above.

We cannot predict at this time how the approval of this new law may affect our business, the result of our operations, or our financial condition.

Historically, actions of the Argentine government concerning the economy, including decisions regarding interest rates, taxes, price controls, wage increases, increased benefits for workers, exchange controls and potential changes in the market of foreign currency, have had a substantial adverse effect on Argentina’s economic growth.

It is widely reported by private economists that expropriations, price controls, exchange controls and other direct involvement by the Argentine government in the economy have had an adverse impact on the level of investment in Argentina, the access of Argentine companies to international capital markets and Argentina’s commercial and diplomatic relations with other countries. If the level of Government intervention in the economy continues or increases, the Argentine economy and, in turn, our business, results of operations and financial condition could be adversely affected.

The operating costs of the Company could increase as a result of the promotion or adoption of certain measures by the Argentine Government as well as pressure from union sectors

In the past, the Argentine Government has promoted and adopted laws and collective labor agreements that imposed on private sector employers the obligation to maintain certain salary levels and provide additional benefits to their employees. In addition, employers have come under strong pressure from their employees and from unions to grant wage increases and other benefits.

We cannot be sure that in the future the Argentine Government will not enact measures that result in increases in the minimum, vital and mobile salary and/or in benefits, compensation or other labor costs that employers must bear. Any salary increase and/or any other labor cost could result in higher costs and a decrease in the results of the Company’s operations.

Failure to adequately address actual and perceived risks of institutional deterioration and corruption may adversely affect Argentina’s economy and financial condition

A lack of a solid and transparent institutional framework for contracts with the Argentine Government and its agencies and corruption allegations have affected and continue to affect Argentina. Argentina ranked 94 of 180 in the Transparency International’s 2022 Corruption Perceptions Index.

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As of the date of this Annual Report, there are various ongoing investigations into allegations of money laundering and corruption being conducted by the Office of the Argentine Federal Prosecutor, which have negatively impacted the Argentine economy and political environment. Depending on the results of these investigations and how long it takes to finalize them, companies involved may be subject to, among other consequences, a decrease in their credit ratings, having claims filed against them by investors in their equity and debt securities, and may further experience restrictions on their access to financing through the capital markets, all of which will likely decrease their income. Additionally, if criminal cases against companies move forward, they may be restricted from rendering services or may face new restrictions due to their customers’ internal policies and procedures. These adverse effects could restrict these companies’ ability to conduct their operating activities and to fulfill their financial obligations.

Moreover, in February 2023, the Political Trial Commission of the Chamber of Deputies approved the admissibility of files being processed against the current members of the CSJN and initiated proceedings against each member. While the outcome of the impeachment trial remains uncertain, this situation has intensified the institutional imbalance in Argentina, leading to a negative impact on the country’s politics and economy.

 Recognizing that the failure to address these issues could increase the risk of political instability, distort decision-making processes and adversely affect Argentina’s international reputation and ability to attract foreign investment, the Argentine Government has announced several measures aimed at strengthening Argentina’s institutions and reducing corruption. These measures include the reduction of criminal sentences in exchange for cooperation with the government in corruption investigations, increased access to public information, the seizing of assets from corrupt officials, increasing the powers of the Anticorruption Office (Oficina Anticorrupción) and submitting a bill for the issuance of a new public ethic law, among others. The government’s ability to implement these initiatives is uncertain as it would be subject to independent review by the judicial branch, as well as legislative support from opposition parties.

We cannot estimate the impact that these investigations could have on the Argentine economy. Similarly, it is not possible to predict the duration of corruption investigations, nor which companies might be involved or how far-reaching the effects of these investigations might be, which may negatively impact the Argentine economy. In turn, the decrease in investor confidence resulting from any of these, among other issues, could have a significant adverse effect on the growth of the Argentine economy, which could, in turn, harm our business, our financial condition and results of operation and affect the trading price of our common shares and ADSs.

Property values in U.S. dollars in Argentina could decline significantly.

Property values in U.S. dollars are influenced by multiple factors that are beyond our control, such as a decreased demand for real estate properties due to a deterioration of macroeconomic conditions or an increase in supply of real estate properties that could adversely affect the value in U.S. dollars of real estate properties. We cannot assure you that property values in U.S. dollars will increase or that they will not be reduced. Most of the properties we own are located in Argentina. As a result, a reduction in the value in U.S. dollars of properties in Argentina could materially affect our business and our financial statements due to the valuation of our investment properties at fair market value in U.S. dollars.

The emergence and spread of a pandemic-level disease or threat to public health, such as Covid-19, may have a material adverse impact on the Argentine and global economy, our business operations, financial condition or results of operations

Global public health threats, such as Covid-19 (as described more fully below), influenza and other highly communicable diseases or viruses, outbreaks of which have from time to time occurred in various parts of the world, could adversely impact our operations, as well as the operations of our customers.

The Covid-19 pandemic has reached every region of the world and has resulted in widespread adverse impacts on the global economy. The outbreak of Covid-19 has already caused severe global disruptions and may continue to negatively affect economic conditions regionally as well as globally and otherwise impact our operations. Governments in affected countries may impose travel bans, quarantines and other emergency public health measures. Companies may take precautions, such as requiring employees to work remotely, imposing travel restrictions and temporarily closing businesses. These future prevention and mitigation measures, are likely to continue to have an adverse impact on global economic conditions, which could materially and adversely affect our future operations.

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On March 12, 2020, the PEN issued Decree No. 260/2020 which declared a public health emergency for a period of one year (currently extended until December 31, 2023, pursuant to Decree No. 863/2022). During 2020 a mandatory quarantine was established, which was extended several times until November 8, 2020. Finally, on November 6, 2020, the Argentine Government declared the end of the mandatory quarantine and adopted social-distancing measures in the Buenos Aires metropolitan area, which were extended until December 31, 2021. As of the date of this Annual Report, these measures are not in effect.

The long-term effects on the global economy, Argentine economy and the Company of the coronavirus pandemic, are difficult to assess or predict, and may include a decline in market prices (including the market prices of our common shares), risks to employee health and safety, collapse in the demand for our products and reduced sales in the impacted geographic locations. Furthermore, the crisis caused by Covid-19 resulted in a decrease in the demand for crude oil, mainly in the second and third quarters of 2020, since industrial and domestic activity slowed down in many countries due to control measures.

Covid-19 has significantly affected economic conditions in Argentina and in the rest of the world and it is possible that it will continue to affect such conditions during 2023 and in future years. Both the Covid-19 pandemic and the measures implemented by the Argentine Government to mitigate its effects may continue to affect our business, financial condition and results of operations. Additional variants or strains of Covid-19 or an outbreak of another pandemic, disease or similar threat to public health could have or continue to have material adverse effects on the global economic, financial and trade conditions, which could materially and adversely affect our business, financial condition and results of operations.

The continuing occurrence of any of the foregoing events or other epidemics or an increase in the severity or duration of the Covid-19 or other epidemics could have a material adverse effect on our business, results of operations, cash flows and financial condition.

The Argentine economy could be adversely affected by economic developments in other global markets.

The effects of a global or regional financial crisis and related turmoil in the global financial system may have a negative impact on our business, capacity to access credit and international capital markets, financial condition and results of operation, which is likely to be more severe on an emerging market economy, such as Argentina (See “— Argentina’s ability to obtain financing in the international capital markets is limited, which may impair our ability to access international credit markets to finance our operations in Argentina.”). This was the case in 2008, when the global economic crisis led to a sudden economic decline in Argentina in 2009, accompanied by inflationary pressures, depreciation of the Peso and a drop in consumer and investor confidence.

In 2020, a new global financial crisis began as a result of the Covid-19. The stock market crash, which began in late February 2020 and intensified throughout 2020 and 2021, affected many stock markets in the world. As a consequence of the Covid-19, the estimated contraction in the world’s economy for 2020 was 3.5% according to what both the IMF and the Organization for Cooperation and Economic Development expressed. Additionally, the IMF published that the impact of Covid-19 on the world’s economy affects both the supply and the demand side. On the supply side, the virus increases not only morbidity and mortality, but also the efforts and measures taken by governments and companies to combat these effects, which lead to restrictions in freedom of movement, higher operating costs due to the reduction in the supply chain and the tightening of credit. On the demand side, the uncertainty that the virus generates, precautionary behaviors, quarantine efforts and high financing costs all reduce the possibility of spending money. The Covid-19 pandemic has reached every region of the world and has resulted in widespread adverse impacts on the global economy. Different parts of the world are currently experiencing divergent virus case growth rates which leads to recoveries also diverging dangerously between and within countries. Although throughout 2022 and up to the date of this annual report the Covid-19 outbreak decreased significantly, the impact of Covid-19 on sectoral economic activity cannot be measured. According to a report published by the IMF in October 2022, despite the global recovery in 2021, the pandemic has continued to take an enormous health and socioeconomic toll, affecting lives and livelihoods everywhere. Inflation, which had already been rising in many countries as a result of supply-demand imbalances and policy support during the pandemic, is likely to remain high (See “-The emergence and spread of a pandemic-level disease or threat to public health, such as Covid-19, may have a material adverse impact on the Argentine and global economy, our business operations, financial condition or results of operations”).

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We cannot assure you that events in other market countries, in the United States or elsewhere will not adversely affect our financial performance.

The Argentine economy is vulnerable to external shocks that could be caused by significant economic difficulties of Argentina’s major regional trading partners, or by more general “contagion” effects. Such external shocks and “contagion” effects could have a material adverse effect on Argentina’s economic growth, and consequently, on our results of operation and financial condition.

Although economic conditions vary from country to country, investors’ perceptions of events occurring in certain countries have in the past substantially affected, and may continue to substantially affect, capital flows into and investments in securities of issuers from other countries, including Argentina. There can be no assurance that the Argentine financial system and securities markets will not be adversely affected by policies that may be adopted by foreign governments or the Argentine Government in the future. Argentina can also be adversely affected by negative economic or financial events that take place in other countries, subsequently affecting our operations and financial condition, including our ability to repay our debt at its maturity date.

Argentina’s economy is vulnerable to external shocks. For example, economic slowdowns, especially in Argentina’s major trading partners such as Brazil, led to declines in Argentine exports in the last few years. Specifically, fluctuations in the price of commodities sold by Argentina and a significant devaluation of the Peso against the U.S. dollar could harm Argentina’s competitiveness and affect its exports. In addition, international investors’ reactions to events occurring in one market may result in a “contagion” effect which could lead to an entire region or class of investment being disfavored by international investors.

Additionally, financial and securities markets in Argentina are also influenced by economic and market conditions in other markets worldwide.

General elections in Brazil, including the election of the president, were held on October 2, 2022. Historically, election years in Brazil, and especially presidential elections, are marked by political uncertainty which generates greater instability and volatility. Moreover, the Brazilian Supreme Court recently overturned criminal convictions and restored former President Luis Inácio Lula da Silva’s political rights, allowing him to run in the presidential election. According to the official results, Lula obtained 48.4% of the votes while Bolsonaro obtained 43.2% of the votes. As no presidential candidate received a majority of the votes on 2 October, Lula and Bolsonaro advanced to a runoff election, which was scheduled for October 30, 2022. On October 30, 2022, Lula da Silva won the elections for the presidency of Brazil, obtaining 50.9% of the votes, compared to the 49.1% of the votes obtained by the outgoing president, Jair Bolsonaro. As a result, Lula da Silva took office on January 1, 2023. As a consequence, we cannot provide certainties of the effects that the current administration results of the election may have on the Brazilian economy and its impact in Argentina, taking not account that both countries are close commercial partners and members of the MERCOSUR.

At the same time, general worldwide economic conditions have experienced significant instability in recent years, including high volatility in the prices of primary commodities and the recent global economic uncertainty and financial market conditions caused by the war between Ukraine and Russia and the recent attack by Hamas on Israel from the Gaza Strip. (See “The Russian invasion of Ukraine and the recent attack by Hamas on Israel from the Gaza Strip could have an unpredictable effect on the global economy and on international and local securities markets, and adversely affect our business and results of operations”).

There can be no assurance that the Argentine financial system and securities markets will not be adversely affected by policies that may be adopted by foreign governments or the Argentine Government in the future, or by events in the economies of developed countries or in other emerging markets.

Finally, international investors’ perceptions of events occurring in one market may generate a “contagion” effect by which an entire region or class of investment is disfavored by international investors. Argentina could be adversely affected by negative economic or financial developments in other emerging and developed countries, which in turn may have a material adverse effect on the Argentine economy and, indirectly, on our business, financial condition and results of operations, and the market value of our ADSs and common shares.

The Russian invasion of Ukraine and the recent attack by Hamas on Israel from the Gaza Strip could have an unpredictable effect on the global economy and on international and local securities markets, and adversely affect our business and results of operations.

Global markets have recently experienced volatility and disruption following the escalation of geopolitical tensions, the start of military conflict between Russia and Ukraine and the recent attack by Hamas on Israel from the Gaza Strip.

The recent outbreak of war in Ukraine has affected global economic markets, including a dramatic increase in the price of oil and gas, and the uncertain resolution of this conflict could result in protracted and/or severe damage to the global economy.

Russia’s recent military interventions in Ukraine have led to, and may lead to, additional sanctions being levied by the United States, the European Union and other countries against Russia and possibly countries that support, directly or indirectly, Russia’s incursion. Russia’s military incursion and the resulting sanctions could adversely affect global energy and financial markets, including Argentina’s, and thus could affect our businesses and the businesses of our customers, even though we do not have any direct exposure to Russia or the adjoining geographic regions.

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The extent and duration of the military action, sanctions and resulting market disruptions are impossible to predict, but could be substantial. Any such disruptions caused by Russian military action or resulting sanctions may magnify the impact of other risks described herein. We cannot predict the progress or outcome of the situation in Ukraine, as the conflict and governmental reactions are rapidly developing and beyond their control. Prolonged unrest, intensified military activities or more extensive sanctions impacting the region, could have a material adverse effect on the global economy, and such effect could in turn have a material adverse effect on our business, financial condition, results of operations and prospects.

Although up to the date of this annual report the conflict is regional in nature, the possible involvement of other member countries of the North Atlantic Treaty Organization could result in a transnational conflict, which could significantly affect the world economy and Argentina and, therefore, our results of operation. Volatility in oil and other commodity prices may adversely affect the Argentine economy and our business. The materialization of some or all of these risks, as well as the events that arise in the main regional partners, including the member countries of MERCOSUR, could have a material negative effect on the Argentine economy, on the interest of investors in Argentine companies, and, indirectly, on our business and results of operation.

On October 7, 2023, Hamas militants and members of other terrorist organizations infiltrated Israel’s southern border from the Gaza Strip and conducted a series of terror attacks on civilian and military targets. Thereafter, these terrorists launched extensive rocket attacks on Israeli population and industrial centers located along the Israeli border with the Gaza Strip. Shortly following the attack, Israel’s security cabinet declared war against Hamas. The intensity and duration of Israel’s current war against Hamas is difficult to predict, and as are such war’s economic implications on the Company’s business and operations and on the global geopolitical instability.

Any deterioration in credit markets resulting directly or indirectly from the ongoing Russian invasion of Ukraine or the recent attack by Hamas on Israel from the Gaza Strip could limit our ability to obtain external financing to fund our operations and capital expenditures. As a result, a downturn in the worldwide economy resulting from the Russian invasion of Ukraine, the recent attack by Hamas on Israel from the Gaza Strip and other conflicts with a global impact that may arise from time to time could have a material adverse effect on our business, results of operations, and/or financial condition.

Our internal policies and procedures might not be sufficient to guarantee compliance with anti-corruption and anti-bribery laws and regulations.

Our operations are subject to various anti-corruption and anti-bribery laws and regulations, including the Corporate Criminal Liability Law and the FCPA. Both the Corporate Criminal Liability Law and the FCPA impose liability against companies who engage in bribery of Argentine government officials, either directly or through intermediaries. The anti-corruption laws generally prohibit providing anything of value to Argentine government officials for the purposes of obtaining or retaining business or securing any improper business advantage. As part of our business, we may deal with entities in which the employees are considered government officials. We have a compliance program that is designed to manage the risks of doing business in light of these new and existing legal and regulatory requirements.

Although we have internal policies and procedures designed to ensure compliance with applicable anti-corruption and anti-bribery laws and regulations, there can be no assurance that such policies and procedures will be sufficient. Violations of anti-corruption laws and sanctions regulations could lead to financial penalties being imposed on us, limits being placed on our activities, our authorizations and licenses being revoked, damage to our reputation and other consequences that could have a material adverse effect on our business, results of operations and financial condition. Further, litigations or investigations relating to alleged or suspected violations of anti-corruption laws and sanctions regulations could be costly.

Argentina is subject to litigation by foreign shareholders of Argentine companies and holders of Argentina’s defaulted bonds, which have resulted and may result in adverse judgments or injunctions against Argentina’s assets and limit its financial resources.

There are outstanding claims against the Argentine Government submitted before ICSID which may entail new sanctions against the Argentine Government, which in turn could have a substantially adverse effect on the Argentine Government’s ability to implement reforms and to foster economic growth. We cannot assure you that in the future the Argentine Government will not breach its obligations.

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Litigation, as well as ICSID claims against the Argentine Government, have resulted in material judgments and may result in further material judgments, and could result in attachment of or injunctions relating to assets of Argentina that the government intended for other uses. As a consequence, the Argentine Government may not have all the necessary financial resources to honor its obligations, implement reforms and foster growth, which could have a material adverse effect on Argentina’s economy, and consequently, our business, financial condition and results of operations. There are pending ICSID claims against the Argentine Government which could result in further awards against Argentina, which in turn could have a material adverse effect on the Argentine Government’s ability to implement reforms and foster economic growth.

It is important to note the recent ruling in the lawsuit brought by Petersen and Eton Park Capital Management, L.P., Eton Park Master Fund, LTD. and Eton Park Fund, L.P. who filed opening briefs in support of cross-motions for summary judgment with respect to a claim of liability and damages against YPF and Argentina. Plaintiffs requested the District Court for summary judgment in their favor, while each of the defendants argued that they had no liability and should not indemnify the plaintiffs and requested the District Court for summary judgment in their favor and to dismiss all remaining claims against them.

In a decision rendered on March 31, 2023, the District Court granted YPF’s summary judgment motion and denied plaintiffs’ summary judgment motion as to YPF in its entirety. The District Court decided that YPF has no contractual liability and owes no damages to plaintiffs for breach of contract and, accordingly, dismissed plaintiffs’ claims against YPF. The District Court denied the Argentina’s motion for summary judgment and, as a result, Argentina was sentenced to pay USD 16 billion and the proceedings are expected to continue between plaintiffs and Argentina. Following the decision of the U.S. Court of Appeals for the Second Circuit, either party can seek review from the Supreme Court of the United States. As of the date of this Annual Report, the Argentine Government has not yet appealed this ruling before a higher court. Plaintiffs may appeal the District Court’s judgment as to YPF or seek to reassert previously dismissed claims against YPF, in each case, in accordance with applicable procedural law. Should that be the case, YPF is expected to continue to defend itself in accordance with the applicable legal procedure and available defenses. Following the decision of the U.S. Court of Appeals for the Second Circuit, either party can seek review from the Supreme Court of the United States. As of the date of this Annual Report, the Argentine Government has appealed this ruling before a higher court.

Also, we cannot assure that no new litigation will be filed against Argentina, nor that these new cases will not affect the Argentina´s economy and our business.

Risks Relating to Brazil

The Brazilian government has exercised, and continues to exercise, significant influence over the Brazilian economy, which, together with Brazilian political and economic conditions, may adversely affect us.

We may be adversely affected by the following factors, as well as the Brazilian federal government’s response to these factors:

· economic and social instability;

· increase in interest rates;

· exchange controls and restrictions on remittances abroad;

· restrictions and taxes on agricultural exports;

· exchange rate fluctuations;

· inflation;

· volatility and liquidity in domestic capital and credit markets;

· expansion or contraction of the Brazilian economy, as measured by GDP growth rates;

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· allegations of corruption against political parties, elected officials or other public officials, including allegations made in relation to the Lava Jato investigation;

· government policies related to our sector; and

· fiscal or monetary policy and amendments to tax legislation; and other political, diplomatic, social or economic developments in or affecting Brazil.

Historically, the Brazilian government has frequently intervened in the Brazilian economy and has occasionally made significant changes in economic policies and regulations, including, among others, the enactment of new tax laws, changes in monetary, fiscal and tax policies, currency devaluations, capital controls and limits on imports.

The Brazilian economy has experienced volatile growth and slowdowns in recent years. The Brazilian GDP decreased 4.1% in 2020. In 2021, the Brazilian economy began to grow considerably. The Brazilian GDP increased 4.6% in 2021, 2.9% in 2022, and 3.3% in the first six months of 2023.

Inflation and interest rates have increased more recently, and the Brazilian real has weakened significantly in relation to the U.S. dollar. Adverse economic conditions in Brazil may materially and adversely affect our business, financial condition and results of operations.

As a result of investigations carried out in connection with the Lava Jato (Car Wash) operation into corruption in Brazil, a number of senior politicians, including congressmen, and executive officers of certain of the major state-owned companies in Brazil have resigned or been arrested, while others are being investigated for allegations of unethical and illegal conduct. The matters that have come, and may continue to come, to light as a result of, or in connection with, the Lava Jato operation and other similar operations have adversely affected, and we expect that they will continue to adversely affect, the Brazilian economy, markets and trading prices of securities issued by Brazilian issuers in the near future.

The ultimate outcome of these investigations is uncertain, but they have already had an adverse effect on the image and reputation of the implicated companies, and on the general market perception of the Brazilian economy, the political environment and the Brazilian capital markets. The development of these investigations has affected and may continue to adversely affect us. We cannot predict if these investigations will bring further political or economic instability to Brazil, or if new allegations will be raised against high-level members of the Brazilian federal government. In addition, we cannot predict the results of these investigations, nor their effects on the Brazilian economy.

The ongoing economic uncertainty and political instability in Brazil may adversely affect the Brazilian economy, our business, and the market price of our shares and ADSs.

Brazil’s political environment has historically influenced, and continues to influence, the performance of the country’s economy. Political crisis have affected and continue to affect the confidence of investors and the general public, which have historically resulted in economic deceleration and heightened volatility in the securities issued by Brazilian companies.

In recent years, there has been significant political turmoil in connection with the impeachment of the former president (who was removed from office in August 2016) and ongoing investigations of her successor (who left office in January 2019) as part of the ongoing “Lava Jato” investigations. Presidential elections were held in Brazil in October 2022. We cannot predict which policies the new President of Brazil, who will assume office on January 1, 2023, may adopt or change during his mandate or the effect that any such policies might have on our business and on the Brazilian economy. Any such new policies or changes to current policies may have a material adverse effect on us. The political uncertainty resulting from the presidential elections and the transition to a new government may have an adverse effect on our business, results of operations and financial condition and the price of our shares and ADSs.

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Furthermore, Brazil’s federal budget has been in deficit since 2014. Similarly, the governments of Brazil’s constituent states are also facing fiscal concerns due to their high debt burdens, declining revenues and inflexible expenditures. While the Brazilian Congress has approved a ceiling on government spending that will limit primary public expenditure growth to the prior year’s inflation for a period of at least 10 years, local and foreign investors believe that fiscal reforms, and in particular the reform of Brazil’s pension system, which was approved in 2019 by the Brazilian Congress, will be critical for Brazil to comply with the spending limit. As of the date of this annual report, discussions in the Brazilian Congress relating to fiscal reform remain ongoing. Diminished confidence in the Brazilian government’s budgetary condition and fiscal stance could result in downgrades of Brazil’s sovereign debt by credit rating agencies, negatively impact Brazil’s economy, lead to further depreciation of the real and an increase in inflation and interest rates, thus adversely affecting our business, results of operations and financial condition.

Uncertainty about the Brazilian government’s implementation of changes in policies or regulations that affect such implementation may contribute to economic instability in Brazil and increase the volatility of securities issued abroad by Brazilian companies, including our securities. Any of the above factors may create additional political uncertainty, adversely affect the Brazilian economy, our business, financial condition, results of operations and the market price of our shares and ADSs. 

Inflation, coupled with the Brazilian government’s measures to fight inflation, may hinder Brazilian economic growth and increase interest rates, which could have a material adverse effect on us.

Brazil has in the past experienced significantly high rates of inflation. As a result, the Brazilian government adopted monetary policies that resulted in Brazilian interest rates being among the highest in the world. The Central Bank’s Monetary Policy Committee (Comitê de Política Monetária do Banco Central), or COPOM, establishes an official interest rate target for the Brazilian financial system based on the level of economic growth, inflation rate and other economic indicators in Brazil. The SELIC rate has increased and decreased over time and, as of June 30, 2023, it was 13.75% per year. The inflation rate, as measured by the General Market Price Index (Índice Geral de Preços-Mercado), or IGP-M, and calculated by Fundação Getúlio Vargas, or FGV, was 7.3% in 2019, 23.1% in 2020, 17.8% in 2021, and 5.5% in 2022. Cumulative inflation in the first six months of 2023, calculated by the same index, was (4.5)%. The inflation rate, as measured by the Broad Consumer National Price Index (Índice Nacional de Preços ao Consumidor Amplo), or IPCA, and calculated by Instituto Brasileiro de Geografia e Estatistica, or IBGE, was 4.3% in 2019, 4.5% in 2020, 10.1% in 2021, and 5.8% in 2022. Cumulative inflation in the first six months of 2023, calculated by the same index, was 2.9%.

Inflation and the government measures to fight inflation have had and may continue to have significant effects on the Brazilian economy and our business. In addition, the Brazilian government’s measures to control inflation have often included maintaining a tight monetary policy with high interest rates, thereby restricting the availability of credit and slowing economic growth. On the other hand, an easing of monetary policies of the Brazilian government may trigger increases in inflation. In the event of an increase in inflation, we may not be able to adjust our daily rates to offset the effects of inflation on our cost structure, which may materially and adversely affect us.

An increase in interest rates may have a significant adverse effect on us. In addition, as of June 30, 2023, certain of our loans were subject to interest rate fluctuations, such as the Brazilian long-term interest rate (Taxa de Juros de Longo Prazo, or TJLP), and the interbank deposit rate (Certificados de Depósitos Interbancários), or CDI. In the event of an abrupt increase in interest rates, our ability to comply with our financial obligations may be materially and adversely affected.

Changes in tax laws or changes in their interpretation may increase our tax burden and, as a result, negatively affect our results of operations and financial condition.

The Brazilian government regularly implements changes to tax regimes that may increase our and our suppliers’ and customers’ tax burdens, which may in turn increase the prices we charge for the products we sell, restrict our ability to do business in our existing markets and, therefore, materially adversely affect our results of operations and financial condition.

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These changes include modifications in the tax rates and, on occasion, enactment of temporary taxes, the proceeds of which are earmarked for designated governmental purposes. In the past, the Brazilian government has presented certain tax reform proposals, which have been mainly designed to simplify the Brazilian tax system, to avoid internal disputes within and between the Brazilian states and municipalities, and to redistribute tax revenues. The tax reform proposals provide for changes in the rules governing the federal Social Integration Program (Programa de Integração Social) or PIS, and Contribution for Social Security Funding (Contribuição para o Financiamento da Seguridade Social), or COFINS, taxes, ICMS and certain other taxes, such as increases in payroll taxes and in the withholding tax over dividend distributions.

The effects of these proposed tax reform measures and any other changes that could result from the enactment of additional tax reforms have not been, and cannot be, quantified yet due to the uncertainty of whether any changes will be implemented.

Fluctuations in the value of the Brazilian real in relation to the U.S. dollar could adversely affect us. 

Foreign exchange fluctuations, particularly of the Brazilian real against the U.S. dollar, may significantly affect our results of operations given that: (1) our products and the basic supplies used in our production are traded internationally; (2) soybean prices are defined based on prices prevalent on the Chicago Board of Trade, or CBOT; and (3) most markets are served by several suppliers from different countries, and competitiveness of farm products abroad may increase in relation to ours in light of the appreciation of the Brazilian currency in relation to the U.S. dollar. Fluctuations in the value of the real in relation to the U.S. dollar could impact our export revenue, our sales in U.S. dollars in the Brazilian market and our financial expenses and operating costs, which may adversely affect our business, financial condition and results of operations.

The real has suffered frequent depreciations and appreciations in relation to the U.S. dollar and other foreign currencies during the past decade. The Brazilian government has in the past utilized different exchange rate regimes, including sudden devaluations, periodic mini devaluations (during which the frequency of adjustments has ranged from daily to monthly), exchange controls, dual exchange rate markets and a floating exchange rate system. Since 1999, Brazil has adopted a floating exchange rate system with interventions by the Central Bank in buying or selling foreign currency. From time to time, there have been significant fluctuations in the exchange rate between the Brazilian real and the U.S. dollar and other currencies. The devaluations in more recent periods resulted in significant fluctuations in the exchange rates of the real against the U.S. dollar and other currencies.

 In 2019, the real depreciated by 0.6% against the U.S. dollar, and on December 31, 2019, the real/U.S. dollar exchange rate was BRL 4.0307. In 2020, the real depreciated by 29.2% against the U.S. dollar, and on December 31, 2020, the real/U.S. dollar exchange rate was BRL 5.1967. In 2021, the real depreciated by 7.4% against the U.S. dollar, and on December 31, 2021, the real/U.S dollar exchange rate was BRL 5.5799. In 2022, the real appreciated by 6.5% against the U.S. dollar, and the real/U.S. dollar exchange rate was BRL 5.2177 per USD 1.00 on December 31, 2022. In 2023 (until September 30, 2023), the real appreciated by 4.0% against the U.S. dollar, and the real/U.S. dollar exchange rate was BRL 5.0076 per USD 1.00 on September 30, 2023. There can be no assurance that the real will not depreciate or appreciate against the U.S. dollar in the future.

 We also hold derivative financial instruments to hedge risks relating to revenue from exports and operating costs denominated in foreign currencies. If we fail to manage these instruments properly, we may be adversely affected by our exposure to these risks, which may have a material adverse effect on our financial condition and results of operations.

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The imposition of restrictions on acquisitions of agricultural properties by foreign nationals in Brazil may materially restrict the development of our investment in Brasilagro.

In August 2010, the then-president of Brazil approved the opinion of the Federal Attorney General’s Office (AGU) affirming the constitutionality of Brazilian Law No. 5,709/71, which imposes important limitations on the acquisition and lease of land in Brazil by foreigners and by Brazilian companies controlled by foreigners. Pursuant to this legislation, companies that are majority-owned by foreigners are not allowed to acquire agricultural properties in excess of 100 indefinite exploration modules, or MEI (which are measurement units adopted by the Brazilian Institute of Agrarian Development (Instituto Nacional de Colonização e Reforma Agrária, or “INCRA”), within different Brazilian regions, and which range from five to 100 hectares) absent the prior approval of the Brazilian Congress, while the acquisition of areas measuring less than 100 MEIs by such companies requires the prior approval of INCRA. In addition, agricultural areas that are owned by foreigners or companies controlled by foreigners shall not exceed 25% of the surface area of the municipality, of which area up to 40% shall not belong to foreigners or companies controlled by foreigners of the same nationality, meaning that the sum of agricultural areas that belong to foreigners or companies controlled by foreigners of the same nationality shall not exceed 10% of the surface area of the relevant municipality. In addition, INCRA is also required to verify if the agricultural, cattle-raising, industrial or colonization projects to be developed in such areas were previously approved by the relevant authorities. After that analysis, INCRA will issue a certificate allowing the acquisition or rural lease of the property. The purchase and rural lease of agricultural properties that do not comply with the aforementioned requirements need to be authorized by the Brazilian Congress. In both cases, it is not possible to determine an estimated time frame for the approval procedure, since at the date of this annual report, there are no known cases on the granting of such certificates.

Recently, Brazilian Law No. 13,986, of April 7, 2020, amended Law No. 5,709/91 and provided that the limitations mentioned above do not apply to: (i) the pledge of real estate as collateral (including the fiduciary transfer of real estate property); and (ii) debt settlements arising from the execution of real estate collateral. Both exceptions favor Brazilian companies controlled by foreigners or foreign entities. Both exceptions favor Brazilian companies controlled by foreigners or foreign entities, which could create new business opportunities.

In accordance with the applicable regulations in Brazil and taking into consideration that some investors apply resources in Brasilagro indirectly by the investment funds that hold some of its shares or by other means, Brasilagro cannot identify the percentage of share capital that is owned by final foreigners’ beneficiaries. If the authorities come to understand that Brasilagro should be considered a foreign company, for the purposes of Law No. 5,709/71, Brasilagro may be subject to eventual questions involving acquisitions and leasing carried out by the Company after the approval of Opinion AGU-LA-2010, and the possible application of Law No. 5,709/71 may result in substantial delays in our future acquisitions of rural properties and our inability to obtain the necessary approvals. Additionally, acquisitions made in breach of existing restrictions may be declared null and void.

The applicability of Law No. 5,709/71 is being discussed in the Original Civil Action (ACO) No. 2,463 and in Action for Breach of Fundamental Precept (ADPF) No. 342, both in the Supreme Federal Court (Supremo Tribunal Federal, or “STF”). The first action (ACO No. 2,463) concerns Opinion No. 461/2012-E of the São Paulo’s General Controller of Justice (Corregedoria Geral de Justiça do Estado de São Paulo), which established that Notaries and Real Estate Registry Officials of the State of São Paulo would be exempt to comply with the restrictions imposed from Lei No. 5, 709/71 and by Decree No. 74,965/74. The second action (ADPF No. 342), to which the first is attached, was proposed on April 16, 2015 by the Brazilian Rural Society questioning the applicability of paragraph 1, article 1, of Law No. 5,709/71 and consequently, of the opinion issued by the Attorney General's Office (AGU) in 2010.

The trial of the Plenary of the SFT began in February 2021, with the vote of the Reporting Minister Marco Aurélio, who understood that the restrictions on companies assimilated to foreign companies must be maintained. Justice Alexandre de Moraes asked for views of the proceedings, interrupting the trial, which was only resumed in June 2021, when he presented his vote diverging from the rapporteur, understanding the inapplicability of the restrictions. As of June 30, 2023, approximately 56.1% of BrasilAgro’s common shares were held by foreigners. Bearing that in mind, the implementation of Law No. 5,709/71 may impose on us additional procedures and approvals in connection with future acquisitions of land, which may result in material delays and our inability to obtain required approvals. There is also a case pending on the STF on the Opinion No. 461/2012-E, issued by São Paulo’s General Controller of Justice (Corregedoria Geral de Justiça do Estado de São Paulo), which has established that entities providing notary and registrar services located in the State of São Paulo are exempt from observing certain restrictions and requirements imposed by Law No. 5,709/71 and Decree No. 74,965/74. Moreover, on April 16, 2015, the Brazilian Rural Society filed a claim for the acknowledgment of non-compliance with basic principles (ADPF) under certain provisions of the Brazilian Constitution with the Supreme Court in order to (i) rule that paragraph 1, article 1, of Law No. 5,709/71 was repealed by the 1988 Federal Constitution and (ii) reverse the opinion issued by the Federal Attorney General (AGU) of 2010.

In June 2021, Supreme Court Justice Alexandre de Moraes issued an opinion to repeal certain restrictions on the ownership of property by foreigners and reverse the opinion issued by the Federal Attorney General (AGU) in 2010.

The proceeding, however, is pending judgment by the Supreme Court. As of the date hereof, we are not able to provide an estimate of the timeframe for a final judgment to be issued by the Supreme Court. Depending on the final decisions of these pending lawsuits, we may need to modify our business strategy and intended practices in order to be able to acquire agricultural properties.

This might have a negative impact on new business opportunities, resulting in an increase in the number of transactions Brasilagro completes It might also require the execution of joint ventures or shareholder agreements, which increases the complexity, and the risks associated with such transactions and transaction costs.

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Any regulatory limitations and restrictions could materially limit Brasilagro’s ability to acquire agricultural properties, increase the investments, transaction costs or complexity of such transactions, or complicate the regulatory procedures required, any of which could materially and adversely affect Brasilagro and us and our ability to successfully implement our business strategy.

We are subject to extensive Brazilian environmental regulation that may significantly increase the company’s expenses.

Our business activities in Brazil are subject to extensive federal, state and municipal laws and regulations concerning environmental protection, which impose on us various environmental obligations, such as environmental licensing requirements, minimum standards for the release of effluents, use of agrochemicals, management of solid waste, protection of certain areas (legal reserve and permanent preservation areas), and the need for a special authorization to use water, among others. The failure to comply with such laws and regulations may subject the violator to administrative fines, mandatory interruption of activities and criminal sanctions, in addition to the obligation to rectify damages and pay environmental and third-party damage compensation, without any caps. In addition, Brazilian environmental law adopts a joint and several and strict liability system for environmental damages, which makes the polluter liable even in cases where it is not negligent and would render us jointly and severally liable for the obligations of our contractors or off-takers. If we become subject to environmental liabilities, any costs we may incur to rectify possible environmental damage would lead to a reduction in our financial resources, which would otherwise remain at our disposal for current or future strategic investment, thus causing an adverse impact on our business, financial condition and results of operations.

As environmental laws and their enforcement become increasingly stricter, our expenses for complying with environmental requirements are likely to increase in the future. Furthermore, the possible implementation of new regulations, changes in existing regulations or the adoption of other measures could cause the amount and frequency of our expenditures on environmental preservation to vary significantly compared to present estimates or historical costs. Any unplanned future expenses could force us to reduce or forego strategic investments and as a result could materially and adversely affect our business, financial condition and results of operations.

Risks Relating to other Countries Where We Operate

Our business is dependent on economic conditions in the countries where we operate or intend to operate.

We have made investments in farmland in Argentina, Brazil, Paraguay and Bolivia and we may possibly make investments in other countries in and outside Latin America and United States, among others. Owing that demand for livestock and agricultural products is usually correlated to economic conditions prevailing in the local market, which in turn is dependent on the macroeconomic condition of the country in which the market is located, our financial condition and results of operations are, to a considerable extent, dependent upon political and economic conditions prevailing from time to time in the countries where we operate. Latin American countries have historically experienced uneven periods of economic growth, as well as recession, periods of high inflation and economic instability. Certain countries have experienced severe economic crisis, which may still have future effects. As a result, governments may not have the necessary financial resources to implement reforms and foster growth. Any of these adverse economic conditions could have a material adverse effect on our business.

We face the risk of political and economic crises, instability, terrorism, civil strife, expropriation and other risks of doing business in emerging markets.

In addition to Argentina and Brazil, we conduct or intend to conduct our operations in other Latin American countries such as Paraguay and Bolivia, among others. Economic and political developments in the countries in which we operate, including future economic changes or crisis (such as inflation or recession), government deadlock, political instability, terrorism, civil strife, changes in laws and regulations, expropriation or nationalization of property, and exchange controls could adversely affect our business, financial condition and results of operations.

In particular, fluctuations in the economies of Argentina and Brazil and actions adopted by the governments of those countries have had and may continue to have a significant impact on companies operating in those countries, including us. Specifically, we have been affected and may continue to be affected by inflation, increased interest rates, fluctuations in the value of the Peso and Brazilian Real against foreign currencies, price and foreign exchange controls, regulatory policies, business and tax regulations and in general by the political, social and economic scenarios in Argentina and Brazil and in other countries that may affect Argentina and Brazil.

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Although economic conditions in one country may differ significantly from another country, we cannot assure that events in one only country will not adversely affect our business or the market value of, or market for, our common shares and/or ADSs.

Governments in the countries where we operate or intend to operate exercise significant influence over their economies.

Emerging market governments, including governments in the countries where we operate, frequently intervene in the economies of their respective countries and occasionally make significant changes in monetary, credit, industry and other policies and regulations. Governmental actions to control inflation and other policies and regulations have often involved, among other measures, price controls, currency devaluations, capital controls and limits on imports. Our business, financial condition, results of operations and prospects may be adversely affected by changes in government policies or regulations, including factors, such as:

· exchange rates and exchange control policies;

· inflation rates;

· labor laws;

· economic growth;

· currency fluctuations;

· monetary policy;

· liquidity and solvency of the financial system;

· limitations on ownership of rural land by foreigners;

· developments in trade negotiations through the World Trade Organization or other international organizations;

· environmental regulations;

· restrictions on repatriation of investments and on the transfer of funds abroad;

· expropriation or nationalization;

· import/export restrictions or other laws and policies affecting foreign trade and investment;

· price controls or price fixing regulations;

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· restrictions on land acquisition or use or agricultural commodity production

· interest rates;

· tariff and inflation control policies;

· import duties on information technology equipment;

· liquidity of domestic capital and lending markets;

· electricity rationing;

· tax policies;

· armed conflict or war declaration; and

· other political, social and economic developments, including political, social or economic instability, in or affecting the country where each business is based.

Uncertainty on whether governments will implement changes in policy or regulation affecting these or other factors in the future may contribute to economic uncertainty and heightened volatility in the securities markets, which may have a material and adverse effect on our business, results of operations and financial condition. In addition, an eventual reduction of foreign investment in any of the countries where we operate may have a negative impact on such country’s economy, affecting interest rates and the ability of companies to access financial markets.

Developments in other markets may affect the Latin American countries where we operate or intend to operate, and as a result our financial condition and results of operations may be adversely affected.

The market value of securities of companies such as us may be, to varying degrees, affected by economic and market conditions in other global markets. Although economic conditions vary from country to country, investors’ perception of the events occurring in one country may substantially affect capital flows into and securities from issuers in other countries, including Latin American countries. Various Latin American economies have been adversely impacted by the political and economic events that occurred in several emerging economies in recent times. Furthermore, Latin American economies may be affected by events in developed economies which are trading partners or that impact the global economy and adversely affect our activities and the results of our operations.

Land in Latin American countries may be subject to expropriation or occupation.

Our land may be subject to expropriation by the governments of the countries where we operate and intend to operate. An expropriation could materially impair the normal use of our lands or have a material adverse effect on our results of operations. In addition, social movements, such as Movimento dos Trabalhadores Rurais Sem Terra and Comissão Pastoral da Terra in Brazil, are active in certain countries where we operate or intend to operate. Such movements advocate land reform and mandatory property redistribution by governments. Invasions and occupations of rural areas by a large number of individuals is common practice for these movements, and, in certain areas, including some of those in which we are likely to invest, police protection and effective eviction proceedings are not available to land owners. As a result, we cannot assure you that our properties will not be subject to invasion or occupation. A land invasion or occupation could materially affect the normal use of our properties or have a material adverse effect on us or the value of our common shares and our ADSs.

We may invest in countries other than Argentina and Brazil and cannot give you any assurance as to the countries in which we will ultimately invest, and we could fail to list all risk factors for each possible country.

We have a broad and opportunistic business strategy therefore we may invest in countries other than Argentina and Brazil including countries in other emerging markets outside Latin America (e.g., Africa). As a result, it is not possible at this time to identify all risk factors that may affect our future operations and the value of our common shares and ADSs.

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Disruption of transportation and logistics services or insufficient investment in public infrastructure could adversely affect our operating results.

One of the principal disadvantages of the agricultural sector in the countries in which we operate is that key growing regions lie far from major ports. As a result, efficient access to transportation and port infrastructure is critical to the growth of agriculture as a whole in the countries in which we operate and of our operations in particular. Improvements in transportation infrastructure are likely required to make agricultural production accessible to export terminals at competitive prices. A substantial portion of agricultural production in the countries in which we operate is currently transported by truck, a means of transportation significantly more expensive than the rail transportation available to U.S. and other international producers. Our dependence on truck transportation may affect our position as a low-cost producer so that our ability to compete in the world markets may be impaired.

Even though road and rail improvement projects have been considered for some areas of Brazil, and in some cases implemented, substantial investments are required for road and rail improvement projects, which may not be completed on a timely basis, if at all. Any delay or failure in developing infrastructure systems could reduce the demand for our products, impede our products’ delivery or impose additional costs on us. We currently outsource the transportation and logistics services necessary to operate our business. Any disruption in these services could result in supply problems at our farms and processing facilities and impair our ability to deliver our products to our customers in a timely manner.

The result of BrasilAgro’s operations are dependent upon economic conditions in Paraguay, in which BrasilAgro operates, and any decline in economic conditions could harm our results of operations or financial condition.

As of June 30, 2023, 28% of BrasilAgro’s assets were located in Paraguay. Paraguay has a history of economic and political instability, exchange controls, frequent changes in regulatory policies, corruption, and weak judicial security. However, in 2013, Paraguay had the highest GDP growth rate in Latin America and the third highest in the world with 14%. Since then, GDP has grown by 4% in 2014, 3% in 2015, 3.8% in 2016, 4.3% in 2017, 3.6% in 2018, 0.2% in 2019, decreased 6.0% in 2020, an increase of 4.1% in 2021 and an increase of 0.08% in 2022. Paraguay’s GDP is closely related to the performance of the Paraguayan agricultural sector, which can be volatile and could adversely affect our business, financial condition and results of operations.

The exchange rate of Paraguay is free and floating and the Central Bank of Paraguay participates actively in the exchange market in order to reduce volatility. In 2018, the Paraguayan currency appreciated against the dollar by 6.7%, in 2019 the appreciation was 8.26%, in 2020 the appreciation was 6.7% while in 2021 the it had a decrease by 0.55% and had an increase by 6.92% in 2022. A significant depreciation of the local currency could adversely affect our business, financial condition and results of operations. However, since most of our costs of raw materials and supplies are denominated in U.S. dollars, a significant depreciation of the local currency could adversely affect our business, financial condition and results of operations, as well as impact other expenses, such as professional fees and maintenance costs.

In addition, a significant deterioration in the economic growth of Paraguay or any of its main trading partners, such as Brazil or Argentina, could have a material impact on the trade balance of Paraguay and could adversely affect their economic growth, which could adversely affect our business, financial condition and results of operations.

The result of BrasilAgro’s operations are dependent upon economic conditions in Bolivia, in which BrasilAgro operates, and any decline in economic conditions could harm our results of operations or financial condition.

As of June 30, 2023, 5% of BrasilAgro’s assets were located in Bolivia. Bolivia is exposed to frequent has a history of economic, social and political instability, exchange controls, frequent changes in regulatory frameworks policies, civic and labor strikes, high tax rates and corruption among state officials, the judiciary and also the private sector.

Bolivia is exposed to high risk of social unrest, causing marches and roadblocks deployed by protesters to pressure the government, increasing disruption risks. Furthermore, protests over environmental issues often overlap significantly with labor disputes, which can escalate into disruptive forms of protest, including site occupations.

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In turn, the Bolivian economy is the 14th largest in Latin America and is heavily dependent on export commodities such as natural gas and minerals. Bolivia’s GDP growth over the last decade has been among the highest in Latin America, growing by 4.9% in 2015, 4.3% in 2016, 4.2% in 2017, 4.2% in 2018 and 2.2% in 2019, while in 2020 it had a decrease by 7.3%, an increase of 6.1% in 2021, and an increase of 3.2% in 2022. Within this context, inflation has been relatively low and under control for the last 30 years. The inflation rate for 2023 was around 3.6%. In addition, Bolivia it is in the process of becoming an active partner of MERCOSUR, a common market aiming to gradually integrate economic activity among Brazil, Argentina, Uruguay, Paraguay and Bolivia.

A significant deterioration in the global and internal macroeconomics, political stability or social unrest of Bolivia, could have a material impact on their economic growth, which could adversely affect our business, financial condition and results of operations.

Risks Relating to Our Agricultural Business

 Fluctuation in market prices for our agriculture products could adversely affect our financial condition and results of operations.

Prices for crops, oilseeds and by-products, like those of other commodities, have historically been cyclical and sensitive to domestic and international changes in supply and demand and can be expected to fluctuate significantly. In addition, the agricultural products and by-products we produce are traded on commodities and futures exchanges and thus are subject to speculative trading, which may adversely affect us. The prices that we are able to obtain for our agriculture products depend on many factors beyond our control, including:

· prevailing world prices, which historically have been subject to significant fluctuations over relatively short periods of time, depending on worldwide demand and supply;

· changes in the agricultural subsidy levels in certain important countries (mainly the United States and countries in the EU) and the adoption of other government policies affecting industry market conditions and prices;

· changes to trade barriers of certain important consumer markets (including China, India, the U.S. and the E.U.) and the adoption of other governmental policies affecting industry market conditions and prices;

· changes in government policies for biofuels;

· world inventory levels, i.e., the supply of commodities carried over from year to year;

· climatic conditions and natural disasters in areas where agricultural products are cultivated;

· the production capacity of our competitors; and

· demand and supply of competing commodities and substitutes.

Unpredictable weather conditions, pest infestations and diseases may have an adverse impact on our crop yields and cattle production.

The occurrence of severe adverse weather conditions, especially droughts, hail, or floods, is unpredictable and may have a potentially devastating impact upon our crop production and, to a lesser extent, our cattle and wool production, and may otherwise adversely affect the supply and price of the agricultural commodities that we sell and use in our business. The occurrence of severe adverse weather conditions may reduce yields on our farmlands or require us to increase our level of investment to maintain yields. Additionally, higher than average temperatures and rainfall can contribute to an increased presence of pest and insects that may adversely impact our agricultural production.

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According to the United States Department of Agriculture USDA estimates, Argentina’s crops output (wheat, corn and soybean) for the 2022/2023 season will be reaching a production of 101.6 million tons. The estimated production of soybean is supposed to reach 51 million tons, the wheat production 12.6 million tons and the corn production 38 million tons.

The occurrence and effects of disease and plagues can be unpredictable and devastating to agricultural products, potentially rendering all or a substantial portion of the affected harvests unsuitable for sale. Our agricultural products are also susceptible to fungus and bacteria that are associated with excessively humid conditions. Even when only a portion of the production is damaged, our results of operations could be adversely affected because all or a substantial portion of the production costs had already been incurred. Although some diseases are treatable, the cost of treatment is high, and we cannot assure you that such events in the future will not adversely affect our operating results and financial condition. Furthermore, if we fail to control a given plague or disease and our production is threatened, we may be unable to supply our main customers, which could affect our results of operations and financial condition.

As a result, we cannot assure you that the current and future severe adverse weather conditions or pest infestations will not adversely affect our operating results and financial condition.

Our cattle are subject to diseases.

Diseases among our cattle herds, such as mastitis, tuberculosis, brucellosis and foot-and-mouth disease, can have an adverse effect on fattening production, rendering cows unable to produce meat for human consumption. Outbreaks of cattle diseases may also result in the closure of certain important markets, such as the United States, to our cattle products. In addition, outbreaks, or fears of outbreaks, of any of these or other animal diseases can lead to the cancellation of our customers’ orders and, particularly if the disease can affect humans, or create adverse publicity that can have adverse material effect in the consumer demand of our products.

Although we abide by national veterinary health guidelines, which include laboratory analyses and vaccination, to control diseases among the herds, especially foot-and-mouth disease, we cannot assure that future outbreaks of cattle diseases will not occur. A future outbreak of diseases among our cattle herds may adversely affect our cattle sales which could adversely affect our operating results and financial condition.

We may be exposed to material losses due to volatile crop prices since a significant portion of our production is not hedged, and exposed to crop price risk.

Due to the fact that we do not have all of our crops hedged, we are unable to have guaranteed minimum prices for all of our production and are therefore exposed to significant risks associated with the level and volatility of crop prices. We are subject to fluctuations in crop prices which could result in receiving a lower price for our crops than our production cost. We are also subject to exchange rate risks related to our crops that are hedged, given that our futures and options positions are valued in U.S. dollars, and thus are subject to exchange rate risk.

In addition, if severe weather or any other disaster generates a lower crop production than the position already sold in the market, we may suffer material losses in the repurchase of the sold contracts.

The creation of export taxes may have an adverse impact on our sales and results of operations.

The Argentine Government has imposed new taxes on exports as a mechanism to control inflation and exchange rate fluctuations, increase tax revenues and reduce Argentina’s fiscal deficit.

On December 2015, the Mauricio Macri’s administration announced the reduction of 35% to 30% of export duties on soybean and the removal of all of the export duties for the rest of the products.  

For reference purposes, Decree 1343/17 implemented a monthly reduction of 0.5% of the export duty in force on soybean, wheat and soybean oil from January 2018 to December 2019 inclusive.

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On September 4, 2018, pursuant to Decree 793/2018, the Argentine Government introduced a 12% rate on export of goods and services, valid until December 31, 2020, which was included in the MERCOSUR Common Nomenclature with a cap of  (i) ARS 3 for each dollar of taxable value or the official FOB price, as appropriate, for the goods and services set forth in Annex I of the aforementioned decree and of (ii) ARS 4 for all other manufactured products. On December 28, 2018, the Argentine Government issued Decree No. 1201/2018 that established, until December 31, 2021, a 5% export tax for services provided in the country, whose effective use or exploitation is carried out abroad. This measure became effective on January 1, 2019.

On the other hand, the Argentine Government has approached in different ways how the withholding scheme on grain exports should have been applied. For such purposes, Decree No. 789/2020, which entered into force on October 6, 2020, provided for the reduction for three months of the withholding on the export of soybeans and their main derivatives. Then the regulation that sets 0% of the rate of the export duty was extended until December 31, 2022 through Decree No. 831. In turn, Decree No. 150/2021 established that the goods must not bear any other rate of export duty.

Through Decree No. 911/2021 and Resolution No. 301/2021, the guidelines for the export of meat were established. Until December 31, 2023, the export of whole carcasses, half carcasses, forequarters and hindquarters with bone, incomplete half carcasses with bones and incomplete forequarters with bone is prohibited.

Export taxes may have a material adverse effect on our sales and results of operations. We produce exportable goods and, therefore, an increase in export taxes is likely to result in a decrease in our products’ price, and, therefore, may result in a decrease of our sales. We cannot guarantee the impact of those or any other future measures that might be adopted by the Argentine Government on our financial condition and result of operations.

We may face risks associated with land-takings in Argentina.

Land-taking is a long-standing problem in Argentina that has escalated throughout the years with every economic crisis.

The spread of land takes has revived an old debate in Argentina. There is a conflict between two groups that claim, on the one hand, a right to decent housing, and on the other hand a group that claims that the right to private property should be respected. Argentina’s constant and cyclical economic crises over the past 50 years have also caused poverty to rise sharply, resulting in a housing deficit.

As a consequence, we cannot provide assurance that Government responses to such disruptions will restore investor confidence in Argentine lands, which could have an adverse impact on our financial condition and results of operations.

The imposition of restrictions on acquisitions of agricultural properties by foreign nationals in the countries where we operate may materially restrict the development of our business in such countries.

Depending on the assets and/or activities that the company undertakes in Argentina, limitations could be imposed on holding percentages by foreigners in accordance with Law No. 26,737 “Régimen de Protección al Dominio Nacional sobre la Propiedad, Posesión o Tenencia de las Tierras Rurales” which regulates, with respect to foreigners or companies controlled by foreigners, the limits to the ownership and possession of rural lands, regardless of their intended use or production destination.

Besides Argentina, in the rest of the countries where we operate, there are laws in place that impose limitations on the purchase and lease of rural land by foreigners and/or companies controlled by foreigners. Such regulations have been incorporated into the local legislation of those countries, by means of (i) Law No. 1,715 of Bolivia; and (ii) Law No. 2,532 of Paraguay, and bill for the “Proteccion Nacional de las Tierras Rurales”, which we do not know the impact it could have on our operations if it becomes law. In regards to Brazil, for further information concerning this subject, please see “Risks relating to Brazil - The imposition of restrictions on acquisitions of agricultural properties by foreign nationals in Brazil may materially restrict the development of our investment in BrasilAgro.”

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A global economic recession could decrease the demand for our products or lower prices.

The demand for the products we sell may be affected by international, national and local economic conditions that are beyond our control. Adverse changes in the real or perceived economic climate, such as rising fuel prices, higher interest rates, falls and / or volatility of real estate and real estate markets, more restrictive credit markets, higher taxes and changes in government policies could reduce the level of demand or prices of the products we produce. We cannot predict the time or duration, magnitude or strength of this slowdown or economic recovery. If a recession continues for a prolonged period of time or worsens, we may experience a declined in long period of declining demand and prices. In addition, economic recessions have and can negatively affect our suppliers, which can lead to interruptions in goods and services and financial losses.

An international credit crisis could have a negative impact on our major customers which in turn could materially adversely affect our results of operations and liquidity.

The most recent international credit crisis that started in 2008 had a significant negative impact on businesses around the world. Although we believe that available borrowing capacity under the current conditions and proceeds resulting from potential farmland sales will provide us with sufficient liquidity through the current economic environment, the impact of the crisis on our major customers cannot be predicted and may be quite severe. A disruption in the ability of our significant customers to access liquidity could cause serious disruptions or an overall deterioration of their businesses which could lead to a reduction in their future orders of our products and the inability or failure on their part to meet their payment obligations to us, any of which could have a material adverse effect on our results of operations and liquidity.

Government intervention in the markets may have a direct impact on our prices.

The Argentine Government has set certain industry market conditions and prices in the past. In order to prevent a substantial increase in the price of basic products as a result of inflation, the Argentine Government is adopting an interventionist policy. In March 2002, the Argentine Government fixed the price for milk after a conflict among producers and the Argentine Government. Since 2005, the Argentine Government, in order to increase the domestic availability of beef and reduce domestic prices, adopted several measures: it increased turnover tax and established a minimum average number of animals to be slaughtered. In March 2006, the registries for beef exports were temporarily suspended. This last measure was softened once prices decreased. There can be no assurance that the Argentine Government will not interfere in other areas by setting prices or regulating other market conditions. Accordingly, we cannot assure you that we will be able to freely negotiate all our products’ prices in the future or that the prices or other market conditions that the Argentine Government could impose will allow us to freely negotiate the price of our products.

We do not maintain insurance over all our crop storage facilities; therefore, if a fire or other disaster damages some or all of our harvest, we will not be completely covered.

Our production is, in general, subject to different risks and hazards, including adverse weather conditions, fires, diseases, pest infestations and other natural phenomena. We store a significant portion of our grain production during harvest due to the seasonal drop in prices that normally occurs at that time. Currently, we store a significant portion of our grain production in plastic silos. We do not maintain insurance on our plastic silos. Although our plastic silos are placed in several different locations, and it is unlikely that a natural disaster affects all of them simultaneously, a fire or other natural disaster which damages the stored grain, particularly if such event occurs shortly after harvesting, could have an adverse effect on our operating results and financial condition.

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Worldwide competition in the markets for our products could adversely affect our business and results of operations.

We experience substantial worldwide competition in each of our markets in which we operate, and in many of our product lines. The market for cereals, oil seeds and by-products is highly competitive and also sensitive to changes in industry capacity, inventories and cyclical changes in the world’s economies, any of which may significantly affect the selling prices of our products and thereby our profitability. Argentina is more competitive in the oilseed market than in the market for cereals. Due to the fact that many of our products are agricultural commodities, they compete in the international markets almost exclusively on the basis of price. The market for commodities is highly fragmented. Small producers can also be important competitors, some of which operate in the informal economy and are able to offer lower prices by meeting lower quality standards. Competition from other producers is a barrier to expanding our sales in the domestic/foreign market. Many other producers of these products are larger than us, and have greater financial and other resources. Moreover, many other producers receive subsidies from their respective countries while we do not receive any such subsidies from the Argentine Government. These subsidies may allow producers from other countries to produce at lower costs than us and/or to endure periods of low prices and operating losses for longer periods than we can. Any increased competitive pressure with respect to our products could materially and adversely affect our financial condition and results of operations.

Social movements may affect the use of our agricultural properties or cause damage to them.

Social movements, such as the Landless Rural Workers’ Movement (Movimento dos Trabalhadores Rurais Sem Terra) and the Pastoral Land Commission (Comissão Pastoral da Terra) are active in Brazil and advocate for land reform and property redistribution by the Brazilian Government. Invasion and occupation of agricultural land by large numbers of people is a common practice among the members of such movements and, in certain regions, including those where we currently invest, remedies such as police protection or eviction procedures are inadequate or non-existent. As a result, we cannot assure you that our agricultural properties will not be subject to invasion or occupation by any social movement. Any invasion or occupation may materially impair the use of our lands and adversely affect our business, financial condition, and results of operations.

If we are unable to maintain our relationships with our customers, our business may be adversely affected.

Our cattle sales are diversified but we are and will continue to be significantly dependent on a number of third-party relationships, mainly with our customers for crop sales. For the fiscal year of 2023, our sales from the agribusiness segment (excluding sales of farms) were made to approximately 30 customers. Sales to our ten largest customers represented approximately 55% to 60%, of our net agriculture sales. Some of these customers included Cargill, FASA, Bunge Alimentos S.A., ACA, GLENCORE and QUILMES. We have signed non-binding letters of intent with some of our largest customers that allow us to estimate the volume of the demand for certain products and to plan production accordingly. We generally enter into short-term agreements with a term of less than a year.

We sell our crop production mainly to exporters and manufacturers that process the raw materials to produce meal and oil, products that are sent to the export markets. The Argentine crop market is characterized by the existence of a few purchasers and a great number of sellers. Although most of the purchasers are international companies with strong financial conditions, we cannot assure you that this situation will remain the same in the future or this market will not get more concentrated in the future.

We may not be able to maintain or form new relationships with customers or others who provide products and services that are important to our business. Accordingly, we cannot assure you that our existing or prospective relationships will lead to a sustained business or the generation of significant revenues.

Our business is seasonal, and our revenues may fluctuate significantly depending on the growing cycle.

Our agricultural business is highly seasonal due to its nature and cycle. The harvest and sale of crops (corn, soybean and sunflower) generally occurs from February to June. Wheat is harvested from December to January. Our operations and sales are affected by the growing cycle of the crops we process and by decreases during the summer in the price of the cattle we fatten. As a result, our results of operations have varied significantly from period to period, and are likely to continue to vary, due to seasonal factors.

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A substantial portion of our assets is farmland, an asset that is highly illiquid.

We have been successful in partially rotating and monetizing a portion of our investments in farmland. Ownership of a significant portion of the land we operate is a key part of our business model. However, agricultural real estate is generally an illiquid asset. Moreover, the adoption of laws and regulations that impose limitations on ownership of rural land by foreigners in the jurisdictions in which we operate may also limit the liquidity of our farmland holdings. As a result, it is unlikely that we will be able to adjust our owned agricultural real estate portfolio promptly in response to changes in economic, business or regulatory conditions. Illiquidity in local market conditions may adversely affect our ability to complete dispositions, to receive proceeds generated from any such sales or to repatriate any such proceeds.

The restrictions imposed on our subsidiaries’ dividend payments may adversely affect us.

We have subsidiaries, and therefore, dividends in cash and other permitted payments of our subsidiaries constitute a major source of our income. The debt agreements of our subsidiaries contain covenants that may restrict their ability to pay dividends or proceed with other types of distributions. If our subsidiaries are prevented from making payments to us or if they are only allowed to pay limited amounts, we may be unable to pay dividends or to repay our indebtedness.

We could be materially and adversely affected by our investment in BrasilAgro.

We consolidated our financial statements with our subsidiary BrasilAgro. BrasilAgro was formed on September 23, 2005 to exploit opportunities in the Brazilian agricultural sector. BrasilAgro seeks to acquire and develop future properties to produce a diversified range of agricultural products (which may include sugarcane, grains, cotton, forestry products and livestock). BrasilAgro is a company that has been operating since 2006. As a result, it has a developing business strategy and an established track record. BrasilAgro’s business strategy may not be successful, and if not successful, BrasilAgro may be unable to successfully modify its strategy. BrasilAgro’s ability to implement its proposed business strategy may be materially and adversely affected by many known and unknown factors. If we were to write-off our investments in BrasilAgro, this would likely materially and adversely affect our business. As of June 30, 2023, we owned 37.88% (net of treasury shares) of the outstanding common shares of BrasilAgro.

Changes in facts and circumstances may affect our accounting consolidation over BrasilAgro

As of June 30, 2023, we owned 37.88% net of treasury shares of the outstanding common shares of BrasilAgro. We concluded that on accounting basis we exercise “de facto control” on BrasilAgro, based on the following: (i) the percentage and concentration of our voting rights, and the absence of the shareholders with significant voting rights (ii) the record of attendance to Shareholders’ Meetings and the record of votes cast by the other shareholders; and (iii) the effective control exercised by us to direct BrasilAgro’s relevant activities through the Board of Directors, where we appointed five out of nine board members. However, changes in fact pattern that we assessed might result in deconsolidation from an accounting perspective. 

Labor relations could negatively impact us.

As of June 30, 2023, approximately 30% of our employees in our Agricultural Business in Argentina were represented by unions under collective agreements. While we currently enjoy good relations with our employees and unions, we cannot assure that such good labor relations will continue in the future positively or that their eventual deterioration does not affect us materially or negatively.

Our internal processes and controls might not be sufficient to comply with the extensive environmental regulation and current or future environmental regulations could prevent us from fully developing our land reserves.

Our activities are subject to a wide set of federal, state and local laws and regulations relating to the protection of the environment, which impose various environmental obligations. Obligations include compulsory maintenance of certain preserved areas in our properties, management of pesticides and associated hazardous waste and the acquisition of permits for water use. Our proposed business is likely to involve the handling and use of hazardous materials that may cause the emission of certain regulated substances. In addition, the storage and processing of our products may create hazardous conditions. We could be exposed to criminal and administrative penalties, in addition to the obligation to remedy the adverse effects of our operations on the environment and to indemnify third parties for damages, including the payment of penalties for non-compliance with these laws and regulations. Since environmental laws and their enforcement are becoming more stringent in Argentina, our capital expenditures and expenses for environmental compliance may substantially increase in the future. In addition, due to the possibility of future regulatory or other developments, the amount and timing of environmental-related capital expenditures and expenses may vary substantially from those currently anticipated. The cost of compliance with environmental regulation may result in reductions of other strategic investments which may consequently decrease our profits. Any material unforeseen environmental costs may have a material adverse effect on our business, results of operations, financial condition or prospects. We cannot ensure that our internal processes and controls may be sufficient to comply with the extensive environmental regulation.

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As of June 30, 2023, we owned land reserves extending over more than 347,480 hectares that were purchased at very attractive prices. In addition, we have a concession over 132,000 hectares reserved for future development. We believe that there are technological tools available to improve productivity in these farmlands and, therefore, achieve returns in the long term. However, current or future environmental regulations could prevent us from fully developing our land reserves by requiring that we maintain part of this land as natural woodlands not to be used for production purposes.

New restrictions on agricultural and food products we produce that contain genetically modified organisms could be established resulting in a potential adverse effect on our business.

Our agricultural products contain genetically modified organisms in varying proportions according to the year and the country of production. The use of genetically modified organisms in food has been achieved with varying degrees of acceptance in the markets in which we operate. Argentina and Brazil, for example, have approved the use of genetically modified organisms in food products, and genetically modified organisms and non-genetically modified organisms grains in those countries are produced and mixed frequently during the process of grain origination. Elsewhere, adverse publicity about genetically modified foods has led to Government regulation that limits sales of genetically modified organisms products. It is possible that new restrictions may be imposed on genetically modified organisms products in the main markets for some of our products, which could have an adverse effect on our business, equity and the result of our operations.

If our products become contaminated, we may be subject to product liability claims, product withdrawals and export restrictions that could adversely affect our business.

While we are subject to strict production protocols, the sale of products implies the risk of injury to consumers. These injuries may result from manipulation by third parties, bioterrorism, product contamination or deterioration, including the presence of bacteria, pathogens, foreign objects, substances, chemicals, other agents or waste introduced during the growth phases, storage, handling or transport.

We cannot be sure that the consumption of our products will not cause a health-related illness in the future or that we will not be subject to claims or judgments related to such matters. Even if a product liability claim is unsuccessful or not fully realized, the negative publicity surrounding any claim that our products caused a disease or injury could negatively affect our reputation with current and potential customers and our image as a Company, and we could also incur significant incidents. In addition, claims or liabilities of this nature may not be covered by any compensation or contribution rights we may have against others, which could have a material adverse effect on our business, equity status and the result of our operations.

Increased energy prices and fuel shortages could adversely affect our operations.

We require substantial amounts of fuel oil and other resources for our harvest activities and transportatiton of our agricultural products. We rely upon third parties for our supply of the energy resources consumed in our operations. The prices for and availability of energy resources may be subject to change or curtailment, respectively, due to, among other things, new laws or regulations, imposition of new taxes or tariffs, interruptions in production by suppliers, worldwide price levels and market conditions. The prices of various sources of energy may increase significantly from current levels. An increase in energy prices could materially adversely affect our results of operations and financial condition.

Over the last few years, the Argentine Government has taken certain measures in order to reduce the use of energy during peak months of the year by frequently cutting energy supply to industrial facilities and large consumers to ensure adequate supply for residential buildings. If energy supply is cut for an extended period of time or energy tariffs continue increasing and we are unable to find replacement sources at comparable prices, or at all, our business and results of operations could be adversely affected.

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We hold Argentine securities which might be more volatile than U.S. securities and carry a greater risk of default.

We currently have and in the past have had certain investments in Argentine Government debt securities, corporate debt securities, and equity securities. In particular, we hold a significant interest in IRSA, an Argentine company that has suffered material losses, particularly during the fiscal years 2001 and 2002. Although our holding of these investments, excluding IRSA, tends to be short term, investments in such securities involve certain risks, including market volatility, which is higher than those typically associated with U.S. Government and corporate securities, and loss of principal.

Some of the issuers in which we have invested and may invest in the future, including the Argentine Government, have in the past experienced substantial difficulties in servicing their debt obligations, which have led to the restructuring of certain indebtedness. We cannot assure that the issuers in which we have invested or may invest will not be subject to similar or other difficulties in the future which may adversely affect the value of our investments in such issuers. In addition, such issuers and, therefore, such investments, are generally subject to the risks that are described in this section with respect to us, and, thus, could have little or no value.

Risks Relating to our Business

Our level of debt may adversely affect our operations and our ability to pay our debt as it becomes due and our capacity to successfully access the local and international markets on favorable terms affects our cost of funding.

As of June 30, 2023, CRESUD’s consolidated financial gross debt amounted to ARS 262,052 million. We cannot assure you that we will have sufficient cash flows and adequate financial capacity to finance our business in the future. Although CRESUD is generating sufficient funds from its operating cash flows to meet our debt service obligations and its ability to obtain new financing is adequate, considering the current availability of loan financing in Argentina, we cannot assure you that we will have sufficient cash flows and adequate financial structure in the future.

Our leverage may affect our ability to refinance existing debt or borrow additional funds to finance working capital requirements, acquisitions and capital expenditures. In addition, the recent disruptions in the local capital and the macroeconomic conditions of Argentine markets, may adversely impact our ability to refinance existing debt and the availability and cost of credit in the future. In such conditions, access to equity and debt financing options may be restricted and it may be uncertain how long these economic circumstances may last. This would require us to allocate a substantial portion of cash flow to repay principal and interest, thereby reducing the amount of money available to invest in operations, including acquisitions and capital expenditures. Furthermore, our leverage could also affect our competitiveness and limit our ability to pay our debt due to changes in market conditions, changes in the real estate industry and/or future economic downturns.

The success of our businesses and the feasibility of our transactions depend on the continuity of investments in the real estate markets and our ability to access capital and debt financing. In the long term, lack of confidence in real estate investment and lack of access to credit for acquisitions could restrict growth. As part of our business strategy, we will strive to increase our real estate portfolio through strategic acquisitions of properties at favorable prices and properties with added value which we believe meet the requirements to increase the value of our properties.

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Our credit ratings are an important part of maintaining our liquidity. Any downgrade in credit ratings could potentially increase our borrowing costs or, depending on the severity of the downgrade, substantially limit our access to capital markets, require us to make cash payments or post collateral and permit termination by counterparties of certain significant contracts. Factors that may impact our credit ratings include, among others, debt levels, planned asset purchases or sales, and near-term and long-term growth opportunities. A ratings downgrade could adversely impact our ability to access debt markets in the future, increase the cost of future debt, and potentially require us to post letters of credit for certain obligations. 

We may not be able to generate sufficient cash flows from operations to satisfy our debt service requirements or to obtain future financing. If we cannot satisfy our debt service requirements or if we default on any financial or other covenants in our debt arrangements, the lenders and/or holders of our securities will be able to accelerate the maturity of such debt or default under other debt arrangements. Our ability to service debt obligations or to refinance them will depend upon our future financial and operating performance, which will, in part, be subject to factors beyond our control such as macroeconomic conditions and regulatory changes in Argentina. If we cannot obtain future financing, we may have to delay or abandon some or all of our planned capital expenditures, which could adversely affect our ability to generate cash flows and repay our obligations as they become due.

For more information see “Item 5. Operating and Financial Review and Prospects-B. Liquidity and capital resources-Indebtedness”.

We depend on our chairman and senior management.

Our success depends, to a significant extent, on the continued employment of Mr. Eduardo S. Elsztain, our chairman, and Alejandro G. Elsztain, our chief executive officer, and second vice-chairman. The loss of their services for any reason could have a material adverse effect on our business. If our current principal shareholders were to lose their influence on the management of our business, our principal executive officers could resign or be removed from office.

Our future success also depends in part upon our ability to attract and retain other highly qualified personnel. We cannot assure you that we will be successful in hiring or retaining qualified personnel, or that any of our personnel will remain employed by us.

The Investment Company Act may limit our future activities.

Under Section 3(a)(3) of the Investment Company Act, an investment company is defined in relevant part to include any company that owns or proposes to acquire investment securities that have a value exceeding 40% of such company’s unconsolidated total assets (exclusive of U.S. Government securities and cash items). Investments in minority interests of related entities as well as majority interests in consolidated subsidiaries which themselves are investment companies are included within the definition of “investment securities” for purposes of the 40% limit under the Investment Company Act.

Companies that are investment companies within the meaning of the Investment Company Act, and that do not qualify for an exemption from the provisions, are required to register with the SEC and are subject to substantial regulations with respect to capital structure, operations, transactions with affiliates and other matters. In the event such companies do not register under the Investment Company Act, they may not, among other things, conduct public offerings of their securities in the United States or engage in interstate commerce in the United States. Moreover, even if we desired to register with the SEC as an investment company, we could not do so without an order of the SEC because we are a non-U.S. corporation, and it is unlikely that the SEC would issue such an order.

As of June 30, 2023, we owned approximately 56.93% equity interest in IRSA (net of treasury shares). Although we believe we are not an “investment company” for purposes of the Investment Company Act, our belief is subject to substantial uncertainty, and we cannot give you any assurance that we would not be determined to be an “investment company” under the Investment Company Act. As a result, the uncertainty regarding our status under the Investment Company Act may adversely affect our ability to offer and sell securities in the United States or to U.S. persons. The U.S. capital markets have historically been an important source of funding for us, and our ability to obtain financing in the future may be adversely affected by a lack of access to the U.S. markets. If an exemption under the Investment Company Act is unavailable to us in the future and we desire to access the U.S. capital markets, our only recourse would be to file an application to the SEC for an exemption from the provisions of the Investment Company Act which is a lengthy and highly uncertain process.

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Moreover, if we offer and sell securities in the United States or to U.S. persons and we were deemed to be an investment company under the investment company act and not exempted from the application of the Investment Company Act, contracts we enter into in violation of, or whose performance entails a violation of, the Investment Company Act, including any such securities, may not be enforceable against us.

Risks Relating to IRSA’s business in Argentina

IRSA is subject to risks inherent to the operation of shopping malls that may affect our profitability.

IRSA’s shopping malls are subject to various factors that affect their development, administration and profitability, including:

· declines in lease prices or increases in levels of default by our tenants due to economic conditions;

· increases in interest rates and other factors outside our control;

· the accessibility and attractiveness of the areas where our shopping malls are located;

· the intrinsic attractiveness of the shopping mall;

· the flow of people and the level of sales of rental units in our shopping malls;

· the increasing competition from internet sales;

· the amount of rent collected from tenants at our shopping malls;

· changes in consumer demand and availability of consumer credit, both of which are highly sensitive to general macroeconomic conditions; and

· fluctuations in occupancy levels in our shopping malls.

An increase in our operating costs could also have a material adverse effect on us if our tenants were to become unable to pay higher rent we may be required to impose as a result of increased expenses. Moreover, the shopping mall business is closely related to consumer spending and affected by prevailing economic conditions. All of our shopping malls and commercial properties are located in Argentina, and consequently, these operations may be adversely affected by recession or economic uncertainty in Argentina. Persistently poor economic conditions could result in a decline in consumer spending which could have a material adverse effect on shopping mall revenue.

IRSA could be adversely affected by decreases in the value of our investments.

IRSA’s investments are exposed to the risks generally inherent to the real estate industry, many of which are out of our control. Any of these risks could adversely and materially affect IRSA’s business, financial condition and results of operations. Any returns on capital expenditures associated with real estate are dependent upon sales volumes and/or revenue from leases and the expenses incurred. In addition, there are other factors that may adversely affect the performance and value of a property, including local economic conditions prevailing in the area where the property is located, macroeconomic conditions in Argentina and globally, competition, IRSA’s ability to find lessees and their ability to perform on their leases, changes in legislation and in governmental regulations (such as the use of properties, urban planning and real estate taxes) as well as exchange controls (given that the real estate market in Argentina relies on the U.S. dollar to determine valuations), variations in interest rates (including the risk of an increase in interest rates that reduces sales of lots for residential development) and the availability of third party financing. In addition, and given the relative illiquidity of the Argentine real estate market, we could be unable to effectively respond to adverse market conditions and/or be compelled to undersell one or more properties. Some significant expenses, such as debt service, real estate taxes and operating and maintenance costs do not fall when there are circumstances that reduce the revenue from an investment, increasing our relative expenditures. These factors and events could impair IRSA’s ability to respond to adverse changes in the returns on IRSA’s investments, which in turn could have an adverse effect on our financial position and the results of IRSA’s operations.

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IRSA’s level of debt may adversely affect our operations and its ability to pay its debt as it becomes due and its capacity to successfully access the local and international markets on favorable terms affects its cost of funding.

As of June 30, 2023, IRSA’s consolidated financial gross debt amounted to ARS 107,941 million. We are generating sufficient funds from our operating cash flows to meet our debt service obligations and our ability to obtain new financing is adequate, considering the current availability of loan financing in Argentina, we cannot assure you that we will have sufficient cash flows and adequate financial structure in the future. For more information see “Item 10. Additional Information-D. Exchange Controls.”

IRSA’s leverage may affect IRSA’s ability to refinance existing debt or borrow additional funds to finance working capital requirements, acquisitions and capital expenditures. In addition, the recent disruptions in the local capital and the macroeconomic conditions of Argentine markets, may adversely impact our ability to refinance existing debt and the availability and cost of credit in the future. In such conditions, access to equity and debt financing options may be restricted and it may be uncertain how long these economic circumstances may last. This would require IRSA to allocate a substantial portion of cash flow to repay principal and interest, thereby reducing the amount of money available to invest in operations, including acquisitions and capital expenditures. Furthermore, IRSA’s leverage could also affect our competitiveness and limit our ability to pay its debt due to changes in market conditions, changes in the real estate industry and/or future economic downturns.

The success of IRSA’s businesses and the feasibility of IRSA’s transactions depend on the continuity of investments in the real estate markets and IRSA’s ability to access capital and debt financing. In the long term, lack of confidence in real estate investment and lack of access to credit for acquisitions could restrict growth. As part of IRSA’s business strategy, IRSA will strive to increase its real estate portfolio through strategic acquisitions of properties at favorable prices and properties with added value which IRSA’s believe meet the requirements to increase the value of our properties.

IRSA may not be able to generate sufficient cash flows from operations to satisfy IRSA’s debt service requirements or to obtain future financing. If IRSA cannot satisfy IRSA’s debt service requirements or if IRSA defaults on any financial or other covenants in its debt arrangements, the lenders and/or holders of IRSA’s securities will be able to accelerate the maturity of such debt or default under other debt arrangements. IRSA’s ability to service debt obligations or to refinance them will depend upon our future financial and operating performance, which will, in part, be subject to factors beyond its control such as macroeconomic conditions and regulatory changes in Argentina. If IRSA cannot obtain future financing, IRSA may have to delay or abandon some or all of its planned capital expenditures, which could adversely affect IRSA’s ability to generate cash flows and repay its obligations as they become due.

For more information see “Item 5. Operating and Financial Review and Prospects-B. Liquidity and capital resources-Indebtedness”.

IRSA’s assets are highly concentrated in certain geographic areas and an economic downturn in such areas could have a material adverse effect on our results of operations and financial condition.

As of June 30, 2023, most of IRSA’s revenue from leases and services provided by the Shopping Malls segment derived from properties located in the City of Buenos Aires and the Greater Buenos Aires metropolitan area. In addition, all of IRSA’s office buildings are located in Buenos Aires and a substantial portion of IRSA’s revenue is derived from such properties. Although IRSA owns properties and may acquire or develop additional properties outside Buenos Aires and the Greater Buenos Aires metro area, IRSA could be largely affected by economic conditions or by other effects which could affect these high populated areas. Consequently, an economic downturn in those areas could cause a reduction in our rental income and adversely affect its ability to comply with IRSA’s debt service and fund operations.

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The loss of tenants could adversely affect our operating revenue and value of our properties.

Although no single tenant represents more than 6.9% of IRSA’s revenues in any fiscal year, if a significant number of tenants at its retail or office properties were to experience financial difficulties, including bankruptcy, insolvency or a general downturn of business, or if IRSA failed to retain them, IRSA’s business could be adversely affected. Further, IRSA’s shopping malls typically have a significant “anchor” tenant, such as well-known department stores, that generate consumer traffic at each mall. A decision by such tenants to cease operating at any of IRSA’s shopping mall properties could have a material adverse effect on our financial condition and the results of our operations. In addition, the closing of one or more stores that attract consumer traffic may motivate other tenants to terminate or to not renew their leases, to seek rent concessions and/or close their stores. Moreover, tenants at one or more properties might terminate their leases as a result of mergers, acquisitions, consolidations, dispositions or bankruptcies. The bankruptcy and/or closure of multiple stores, if IRSA is not able to successfully release the affected space, could have a material adverse effect on both the operating revenue and underlying value of the properties involved.

IRSA may face risks associated with acquisitions of properties, future acquisitions may not be profitable and the properties IRSA acquires may be subject to unknown liabilities.

As part of IRSA’s growth strategy, IRSA has acquired, and intends to do so in the future, properties, including large properties, that tend to increase the size of our operations and potentially alter our capital structure. Although IRSA believes that the acquisitions IRSA has completed in the past and that IRSA expects to undertake enhance IRSA’s financial performance, the success of such transactions is subject to a number of uncertainties, including the risk that:

· IRSA 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 IRSA’s estimates;

· acquired properties may be located in new markets where IRSA may have limited knowledge and understanding of the local economy, absence of business relationships in the area or are unfamiliar with local governmental and permitting procedures; and

· IRSA may not be able to efficiently integrate acquired properties, particularly portfolios of properties, into IRSA’s organization and to manage new properties in a way that allows it to realize cost savings and synergies.

IRSA’s performance is subject to the risks associated with its properties and with the real estate industry.

IRSA’s operating performance and the value of its real estate assets, and as a result, the value of its securities, are subject to the risk that its properties may not be able to generate sufficient revenue to meet its operating expenses, including debt service and capital expenditures, its cash flow needs and its ability to service our debt service obligations. Events or conditions beyond its control that may adversely affect its operations or the value of its properties include:

· downturns in national, regional and local economies;

· decrease in consumer spending and consumption;

· competition from other shopping malls and sales outlets;

· local real estate market conditions, such as oversupply or lower demand for retail space;

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· changes in interest rates and availability of financing;

· the exercise by our tenants of their 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 expenses, salary increases, utilities, real estate taxes, federal and local taxes and higher security costs;

· the impact of losses resulting from civil disturbances, strikes, natural disasters, terrorist acts or acts of war;

· significant fixed expenditures associated with each investment property, such as debt service payments, real estate taxes, insurance and maintenance costs;

· declines in the financial condition of our tenants and our ability to collect rents when due;

· changes in our or our tenants’ ability to provide for adequate maintenance and insurance that result in a reduction in the useful life of a property; and

· changes in law or governmental regulations (such as those governing usage, zoning and real property taxes) or changes in the exchange controls or government action (such as expropriation).

If any one or more of the foregoing conditions were to affect IRSA’s activities, this could have a material adverse effect on our financial condition and results of operations, and as a result, on the Company’s results.

An adverse economic environment for real estate companies and the credit crisis may adversely affect IRSA’s results of operations.

The success of IRSA’s business and profitability of its operations depend on continued investment in real estate and access to long-term financing. A prolonged crisis of confidence in real estate investments and lack of credit for acquisitions may constrain IRSA’s growth and the maintenance of our current business and operations. As part of IRSA’s strategy, IRSA intends to increase its properties portfolio through strategic acquisitions at favorable prices, where IRSA believes it can bring the necessary expertise to enhance property values. In order to pursue acquisitions, IRSA may require capital or debt financing. Disruptions in the financial markets may adversely impact IRSA’s ability to refinance existing debt and the availability and cost of credit in the future. Any consideration of sales of existing properties or portfolio interests may be offset by lower property values. IRSA’s ability to make scheduled payments or to refinance IRSA’s existing debt obligations depends on our operating and financial performance, which in turn is subject to prevailing economic conditions. If disruptions in financial markets prevail or arise in the future, we cannot provide assurances that Argentine Government responses to such disruptions will restore investor confidence.

In September 2021, Evergrande, one of China’s largest real estate companies, announced that it would be unable to pay its debt obligations. Since then, the markets have been negatively affected by the announcement. On August 2023, Evergrande filed for Chapter 15 bankruptcy seeking recognition of foreign restructuring proceedings in the High Court of Hong Kong and in the High Court of the Eastern Caribbean Supreme Court in the British Virgin Islands. As of December, 2022, the real estate industry in China accounts for approximately 26% of China’s economic activity, and more than two-thirds of household wealth is tied up in real estate. 

We cannot predict whether, and to what extent, the uncertainty of the property crisis in China may and how will affect our business, stabilize the markets or increase liquidity and the availability of credit.

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IRSA’s revenue and profit may be materially and adversely affected by continuing inflation and economic activity in Argentina.

IRSA’s business is mainly driven by consumer spending since a portion of the revenue from its Shopping Mall segment derives directly from the sales of our tenants, whose revenue relies on the sales to consumers. As a result, IRSA’s revenues and net income are impacted to a significant extent by economic conditions in Argentina, including the development in the textile industry and domestic consumption. Consumer spending is influenced by many factors beyond IRSA’s control, including consumer perception of current and future economic conditions, inflation, political uncertainty, rates of employment, interest rates, taxation and currency exchange rates. Any continuing economic slowdown, whether actual or perceived, could significantly reduce domestic consumer spending in Argentina and therefore adversely affect our business, financial condition and results of operations.

IRSA’s future acquisitions may not be profitable.

IRSA seeks to acquire additional shopping malls to the extent IRSA manages to acquire them on favorable terms and conditions and they meet our investment criteria. Acquisitions of commercial properties entail general investment risks associated with any real estate investment, including:

· IRSA’s estimates of the cost of improvements needed to bring the property up to established standards for the market may prove to be inaccurate;

· properties IRSA acquires 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;

· IRSA’s pre-acquisitions evaluation and 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

· IRSA’s investigation of a property or building prior to its acquisition, and any representations IRSA 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.

If IRSA acquires a business, IRSA will be required to merge and integrate the operations, personnel, accounting and information systems of such acquired business. In addition, acquisitions of or investments in companies may cause disruptions in our operations and divert management’s attention away from day-to-day operations, which could impair our relationships with our current tenants and employees.

The properties IRSA acquires may be subject to unknown liabilities.

The properties that IRSA acquires may be subject to unknown liabilities, in respect to which IRSA may have limited or no recourse to the former owners. If a liability were asserted against IRSA based on IRSA’s ownership of an acquired property, IRSA may be required to incur significant expenditures to settle, which could adversely affect IRSA’s financial results and cash flow. Unknown liabilities relating to acquired properties could include:

· liabilities for clean-up of undisclosed environmental contamination;

· the costs of changes in laws or in governmental regulations (such as those governing usage, zoning and real property taxes or exchange controls regulations imposed by the BCRA); and

· liabilities incurred in the ordinary course of business.

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IRSA’s dependence on rental income may adversely affect IRSA’s ability to meet IRSA’s debt obligations.

A substantial part of IRSA’s revenue is derived from rental income. As a result, IRSA’s performance depends on its ability to collect rent from IRSA’s tenants. IRSA’s revenue and profits would be negatively affected if a significant number of its tenants or any significant tenant were to:

· delay lease commencements;

· decline to extend or renew leases upon expiration;

· fail to make rental payments when due; or

· close stores or declare bankruptcy.

Any of these actions could result in the termination of leases and the loss of related rental income. In addition, IRSA cannot assure you that any tenant whose lease expires will renew that lease or that we will be able to re-let the space on economically reasonable terms. The loss of rental revenue from a number of our tenants and IRSA’s inability to replace such tenants may adversely affect our profitability and its ability to comply with our debt service obligations. These factors are particularly disruptive in the context of emergency situations, such as the Covid-19 pandemic, which has caused significant adverse impacts on our business as tenants have been required to shut down or significantly reduce their operating activities.

It may be difficult to buy and sell real estate quickly and transfer restrictions may apply to part of IRSA’s portfolio of properties.

Real estate investments are relatively illiquid and this tends to limit our ability to change the mix of IRSA’s portfolio in response to economic circumstances or other conditions. In addition, significant expenditures associated with each investment, such as mortgage payments (if any), real estate taxes and maintenance costs, are generally not reduced when an investment generates lower revenue. If revenue from a property declines while expenses remain the same, our results of operations would be adversely affected. Certain properties are mortgaged and if we were unable to meet our underlying payment obligations, we could suffer losses as a result of foreclosures on those mortgaged properties. Furthermore, if we are required to dispose of one or more of our mortgaged properties, we would not be able to obtain release of the mortgage interest without payment of the associated debt. The foreclosure of a mortgage on a property or inability to sell a property could adversely affect our business. In this kind of transactions, we may agree not to sell the acquired properties for a considerable time which could affect our results of operations.

Some of the land IRSA has purchased is not zoned for development and IRSA may be unable to obtain, or may face delays in obtaining, the necessary zoning permits and other authorizations.

IRSA owns several plots of land which are not zoned for our intended development plans. In addition, IRSA has not yet applied for the required land-use, building, occupancy and other required governmental permits and authorizations for these properties. We cannot assure you that IRSA will continue to be successful in its attempts to rezone land and to obtain all necessary permits and authorizations, or that rezoning efforts and permit requests will not be delayed or rejected. Moreover, IRSA may be affected by building moratorium and anti-growth legislation. If IRSA is unable to obtain the governmental permits and authorizations we need to develop our present and future projects as planned, IRSA may be forced to make unwanted modifications to such projects or abandon them altogether.

IRSA may face risks associated with land-takings in Argentina.

Land-taking is a long-standing problem in Argentina that has escalated throughout the years with every economic crisis.

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The spread of land takes has revived in Argentina an old debate in Argentina. There is a conflict between two groups that claim, on the one hand, a right to decent housing, and on the other hand a group that claims that the right to private property should be respected Argentina’s constant and cyclical economic crises over the past 50 years have also caused poverty to rise sharply, so less people can access a roof, resulting in a housing deficit.

As a consequence, we cannot provide assurance that Argentine Government responses to such disruptions will restore investor confidence in Argentine lands, which could have an adverse impact on our financial condition and results of operations.

IRSA’s ability to grow will be limited if IRSA cannot obtain additional financing.

Although IRSA is liquid as of the date of this Annual Report, IRSA must maintain liquidity to fund its working capital, service its outstanding indebtedness and finance investment opportunities. Without sufficient liquidity, IRSA could be forced to curtail its operations or may not be able to pursue new business opportunities.

IRSA’s growth strategy is focused on the development and redevelopment of properties IRSA already owns and the acquisition of additional properties for development. As a result, IRSA is likely to have to depend to an important degree on the availability of capital financing, which may or may not be available on favorable terms if at all. IRSA cannot assure you that additional financing, refinancing or other capital will be available in the amounts IRSA requires or on favorable terms. IRSA’s access to debt or equity capital markets depends on a number of factors, including the market’s perception of IRSA’s growth potential, IRSA’s ability to pay dividends, IRSA’s financial condition, IRSA’s credit rating and its current and potential future earnings. Depending on these factors, we could experience delays or difficulties in implementing IRSA’s growth strategy on satisfactory terms or at all.

The capital and credit markets for Argentina have been experiencing extreme volatility and disruption since the last years. If IRSA’s current resources does not satisfy our liquidity requirements, IRSA may have to seek additional financing. The availability of financing will depend on a variety of factors, such as economic and market conditions, the availability of credit and our credit ratings, as well as the possibility that lenders could develop a negative perception of the prospects of risk in Argentina, of IRSA’s company or the industry generally. IRSA may not be able to successfully obtain any necessary additional financing on favorable terms, or at all.

A downgrade in IRSA’s credit rating could negatively impact our cost of and ability to access capital.

IRSA’s credit ratings are an important part of maintaining its liquidity. Any downgrade in credit ratings could potentially increase IRSA’s borrowing costs or, depending on the severity of the downgrade, substantially limit IRSA’s access to capital markets, require IRSA to make cash payments or post collateral and permit termination by counterparties of certain significant contracts. Factors that may impact IRSA’s credit ratings include, among others, debt levels, planned asset purchases or sales, and near-term and long-term growth opportunities. Factors such as liquidity, asset quality, cost structure, product mix, and others are also considered by the rating agencies. A ratings downgrade could adversely impact IRSA’s ability to access debt markets in the future, increase the cost of future debt, and potentially require IRSA to post letters of credit for certain obligations. 

Adverse incidents that occur in IRSA’s shopping malls may result in damage to IRSA’s reputation and a decrease in the number of customers.

Given that IRSA’s shopping malls are open to the public, with significant circulation of people, accidents, theft, robbery, public protest, pandemic effects and other incidents may occur in our facilities, regardless of the preventative measures we adopt. If such an incident or series of incidents occurs, shopping mall customers and visitors may choose to visit other shopping venues that they believe are safer, which may cause a reduction in the sales volume and operating income of our shopping malls.

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Argentine laws governing leases impose restrictions that limit IRSA’s flexibility.

Argentine laws governing leases impose certain restrictions, including the imposition of a three-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 requires a shorter term.

On August 23, 2023, the Chamber of Deputies approved a draft amendment to the lease law, aiming to reduce the minimum term of lease agreements to a two years and establish an adjustment to the rental fee using the CPI published by the INDEC, or a combination of permitted indexes, as the parties may agree. Also, this bill established that rental value adjustments could be made at periods agreed upon by the parties, which should be no shorter than four months.

This bill was approved by the Chamber of Deputies and subsequently discussed by the Senate. The Senate agreed to make changes to the bill. These changes include: (i) that the minimum term of the lease agreements is maintained at three years, (ii) that the minimum update of the value of the rental fee is made every six months, and (iii) that the Casa Propia coefficient index, developed by the Ministry of Territorial Development and Habitat (Ministerio de Desarrollo Territorial y Hábitat) is used to adjust the increase in the rental fee.

On October 11, 2023, in light of the proposed changes made by the Senate, the Chamber of Deputies revisited and approved the text proposed by the Senate, and the bill was enacted into law with the scope set forth above.

We cannot predict at this time how the approval of this new law may affect our business, the result of our operations, or our financial situation.

As a result, IRSA is exposed to the risk of higher rates of inflation under IRSA’s leases, and any exercise of rescission rights by our tenants could materially and adversely affect IRSA’s business and results of operations. IRSA cannot assure you that IRSA’s tenants will not exercise such right, especially if rental rates stabilize or decline in the future or if economic conditions continue to deteriorate.

We cannot predict at this time how the approval of this new law may affect IRSA’s business, the result of IRSA’s operations, or IRSA’s financial condition.

IRSA may be liable for certain defects in IRSA’s buildings.

The Argentine Civil and Commercial Code imposes liability for real estate developers, builders, technical project managers and architects in case of hidden defects in a property for a period of three years from the date title on the property is tendered to the purchaser, even when those defects did not cause significant property damage. If any defect affects the structural soundness or makes the property unfit for use, the liability term is ten years.

In IRSA’s real estate developments, IRSA usually act as developers and sellers while construction generally is carried out by third party contractors. Absent a specific claim, IRSA cannot quantify the potential cost of any obligation that may arise as a result of a future claim, and IRSA has not recorded provisions associated with them in IRSA’s financial statements. If IRSA was required to remedy any defects on completed works, our financial condition and results of operations could be adversely affected.

IRSA could have losses if we have to resort to eviction proceedings in Argentina to collect unpaid rent because such proceedings are complex and time-consuming.

Although Argentine law permits filing of an executive proceeding to collect unpaid rent and a special proceeding to evict tenants, eviction proceedings in Argentina are complex and time-consuming. Historically, the heavy workloads of the courts and the numerous procedural steps required have generally delayed landlords’ efforts to evict tenants. Eviction proceedings generally take between six months and two years from the date of filing of the suit to the time of actual eviction.

Historically, IRSA has sought to negotiate the termination of leases with defaulting tenants after the first few months of non-payment in an effort to avoid legal proceedings. Delinquency may increase significantly in the future, and such negotiations with tenants may not be as successful as they have been in the past. Moreover, new Argentine laws and regulations may forbid or restrict eviction, and in each such case they would likely have a material and adverse effect on our financial condition and results of operations.

Climate change may have adverse effects on IRSA’s business.

We, our customers, and communities in which we operate, may be adversely affected by the physical risks of climate change, including increases in temperatures, sea levels, and the frequency and severity of adverse climatic events including fires, storms, floods and droughts. These effects, whether acute or chronic in nature, may directly impact us and our customers through disruptions to business and economic activity or impacts on income and asset values.

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Climate change implies multiple drivers of financial risk that could adversely affect us:

· Transition risks: the move to a low-carbon economy, both at idiosyncratic and systemic levels -such as through policy, regulatory and technological changes, and business and consumers preferences- could increase our expenses and impact our strategies.

· Physical risks: discrete events, such as flooding and wildfires, and extreme weather impacts and longer-term shifts in climate patterns, such as extreme heat, sea level rise and more frequent and prolonged drought, which could result in financial losses that could impair asset values and the creditworthiness of our customers. Such events could disrupt our operations or those of our customers or third parties on which we rely and do business with.

· Liability risks: parties who may suffer losses from the effects of climate change may seek compensation from state entities, regulators, investors and lenders, among others.

· Credit risks: physical climate change could lead to increased credit exposure and companies with business models not aligned with the transition to a low-carbon economy may face a higher risk of reduced corporate earnings and business disruption due to new regulations or market shifts.

· Market and liquidity risks: market and liquidity changes in the most carbon-intensive sectors could affect energy and commodity prices, corporate bonds, equities and certain derivatives contracts. Increasing frequency of severe weather events could affect macroeconomic conditions, weakening fundamental factors such as economic growth, employment and inflation. Companies could face liquidity risks derived from cash outflows targeted to improve their reputation in the market or solve climate-related problems.

· Operational risks: severe weather events could directly impact business continuity and operations both of customers and ours operations.

· Regulatory compliance risks: increased regulatory compliance risk may result from the increasing pace, breadth and depth of regulatory expectations requiring implementation in short timeframes across multiple jurisdictions and from changes in public policy, laws and regulations in connection with climate change and related environmental sustainability matters.

· Conduct risks: increasing demand for “green” products where there are differing and developing standards or taxonomies.

· Reputational risk: our reputation and client relationships may be damaged as a result of our practices and decisions related to climate change, social and environmental matters, or to the practices or involvement of our clients vendors or suppliers, in certain industries or projects associated with causing or exacerbating climate change.

Initiatives to mitigate or respond to climate change may impact market and asset prices, economic activity, and customer behavior, particularly in emissions intensive industry sectors and geographies affected by these changes. Any of the conditions described above, or failure to effectively manage and disclose these risks could adversely affect our business, prospects, reputation, financial performance or financial condition.

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The recurrence of a credit crisis could have a negative impact on IRSA’s major customers, which in turn could materially adversely affect IRSA’s results of operations and liquidity.

Argentina is undergoing a credit crisis that could negatively impact IRSA’s tenants’ ability to comply with their lease obligations. The impact of a future credit crisis on IRSA’s major tenants cannot be predicted and may be quite severe. A disruption in the ability of IRSA’s significant tenants to access liquidity could pose serious disruptions or an overall deterioration of their businesses, which could lead to a significant reduction in future orders of their products and their inability or failure to comply with their obligations, any of which could have a material adverse effect on our results of operations and liquidity.

IRSA is subject to risks inherent to the operation of office buildings that may affect IRSA’s profitability.

Office buildings are exposed to various factors that may affect their development, administration and profitability, including the following factors:

· lower demand for office space as a consequence of the implementation of hybrid and home office work;

· a deterioration in the financial condition of our tenants that causes defaults under leases due to lack of liquidity, access to capital or for other reasons;

· difficulties or delays renewing leases or re-leasing space;

· decreases in rents as a result of oversupply, particularly offerings at newer or re-developed properties;

· competition from developers, owners and operators of office properties and other commercial real estate, including sublease space available from our tenants;

· maintenance, repair and renovation costs incurred to maintain the competitiveness of our office buildings;

· exchange controls that may interfere with their ability to pay rents that generally are pegged to the U.S. dollar;

· the consequences of a pandemic, epidemic or disease outbreak that would produce lower demand for offices spaces; and

· an increase in our operating costs, caused by inflation or by other factors could have a material adverse effect on us if our tenants are unable to pay higher rent as a result of increased expenses.

IRSA’s investment in property development and management activities may be less profitable than IRSA anticipate.

IRSA is engaged in the development and construction of properties to be used for office, residential or commercial purposes, shopping malls and residential complexes, in general through third-party contractors. Risks associated with our development, reconversion and construction activities include the following, among others:

· abandonment of development opportunities and renovation proposals;

· construction costs may exceed our estimates for reasons including higher interest rates or increases in the cost 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 revenue 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;

· lack of affordable financing alternatives in the private and public debt markets;

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· sale prices of residential units may be insufficient to cover development costs;

· construction and lease commencements may not be completed on schedule, resulting in increased debt service expense and construction costs;

· failure 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 be delayed because of a number of factors, including weather, strikes or delays in receipt of zoning or other regulatory approvals, or man-made or natural disasters, resulting in increased debt service expense and construction costs;

· changes in our tenants’ demand for rental properties outside of Buenos Aires; and

· IRSA may incur capital expenditures that require considerable time and effort and which may never be completed due to government restrictions or overall market conditions.

In addition, IRSA may face claims for the enforcement of labor laws in Argentina. Many companies hire personnel from third parties that provide outsourced services, and sign indemnity agreements if labor claims from employees of such third parties arise. However, in recent years several courts have rejected the existence of independence in those labor relations and ruled that joint and several responsibilities by both companies. 

While IRSA’s policies with respect to expansion, renovation and development activities are intended to limit some of the risks otherwise associated with such activities, IRSA is nevertheless subject to risks associated with property development, such as cost overruns, design changes and timing delays arising from a lack of availability of materials and labor, weather conditions and other factors outside of our control, as well as financing costs that, may exceed original estimates, possibly making the associated investment unprofitable. Any delays or unanticipated expenses could adversely affect the investment returns from these development projects and harm our operating results.

Greater than expected increases in construction costs could adversely affect the profitability of IRSA’s new developments.

IRSA’s business activities include real estate developments. One of the main risks related to this activity corresponds to potential increases in construction costs, which may be driven by higher demand and new development projects in the shopping malls and buildings sectors. Increases higher than those included in the original budget may result in lower profitability than expected.

The increasingly competitive real estate sector in Argentina may adversely affect IRSA’s ability to rent or sell office space and other real estate and may affect the sale and lease price of IRSA’s premises.

IRSA’s real estate activities are highly concentrated in the Buenos Aires metropolitan area where the market is highly competitive due to a scarcity of properties in sought-after locations and an increasing number of local and international competitors. The Argentine real estate industry is highly competitive and fragmented and does not have high barriers to entry for new competitors. The main competitive factors in the real estate development business include availability and location of land, price, funding, design, quality, reputation and partnerships with developers. A number of residential and commercial developers and real estate service companies compete in identifying land acquisition opportunities, attracting financial resources, and appealing to prospective purchasers and tenants. Other companies, including joint ventures of foreign and local companies, have become increasingly active in the market, further increasing competition. If one or more of our competitors is able to acquire and develop desirable properties, because it has access to greater financial resources or otherwise, if we are unable to respond to such pressures as promptly as our competitors, or competition increases, our business and financial condition could be adversely affected.

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All of IRSA’s shopping mall and commercial office properties are located in Argentina. There are other shopping malls and independent retail stores and residential properties that are within the geographic scope of each of our properties. The number of competing properties in a particular area could have a material adverse effect both on our ability to lease retail space in our shopping malls or sell units in our residential complexes and on the amount of rent or the sale price that we are able to charge. IRSA cannot assure you that other shopping mall operators will not invest in Argentina in the near future. If additional competitors become active in the shopping mall segment, such competition could have a material adverse effect on our results of operations.

Substantially all of IRSA’s offices and other non-shopping mall rental properties are located in developed urban areas. There are many office buildings, shopping malls, retail and residential premises in the areas where IRSA’s properties are located. This is a highly fragmented market, and the abundance of comparable properties in our vicinity may adversely affect our ability to rent or sell office space and other real estate and may affect the sale and lease price of our premises. In the future, both national and foreign companies may participate in Argentina’s real estate development market, competing with us for business opportunities.

Some potential losses are not covered by insurance and certain kinds of insurance coverage may become prohibitively expensive.

IRSA currently have insurance policies in place that cover potential risks such as civil liability, fire, lost profit and floods, including extended coverage and losses from leases on all of IRSA’s properties. Although we believe the policy specifications and insured limits of these policies are customary, there are certain types of losses, such as lease and other contract claims, terrorism and acts of war that generally are not insured under the insurance policies offered in Argentina. In the event of a loss that was not insured or a loss in excess of insured limits, IRSA could lose all or a portion of the capital IRSA has invested in a property, as well as its anticipated future revenue. In such an event, IRSA might nevertheless remain obligated for any mortgage debt or other financial obligations related to the property. IRSA cannot assure you that material losses in excess of insurance proceeds will not occur in the future. If any of IRSA’s properties were to experience a catastrophic loss, it could seriously disrupt our operations, delay revenue and result in large expenses to repair or rebuild the property. Insurance companies may no longer offer coverage against certain types of losses, such as losses due to terrorist acts and the existence of mold or, if offered, these types of insurance may become too expensive. 

IRSA does not has life or disability insurance for our key employees. If any of our key employees were to die or become disabled, IRSA could experience losses caused by a disruption in our operations which will not be covered by insurance, and this could have a material adverse effect on our financial condition and results of operations.

An uninsured loss or a loss that exceeds policies on IRSA’s properties could subject us to lost capital or revenue on those properties.

The terms of IRSA’s standard form property leases currently in effect, require tenants to indemnify and hold us harmless from liabilities resulting from injury to persons or property at or outside the premises, due to activities conducted on the properties, except for claims arising from negligence or intentional misconduct of IRSA’s agents. Tenants are generally required, at the tenant’s expense, to obtain and keep in full force during the term of the lease, liability insurance policies. IRSA cannot provide assurance that IRSA’s tenants will be able to properly maintain their insurance policies or have the ability to pay deductibles. If an uninsured loss occurs or a loss arises that exceeds the combined aggregate limits for the policies, or if a loss arises that is subject to a substantial deductible under an insurance policy, we could lose all or part of IRSA’s capital invested in, and anticipated revenue from, one or more of IRSA’s properties, which could have a material adverse effect on our business, financial condition and results of operations.

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Demand for IRSA’s premium properties, aimed at high-income consumers, may not be sufficient.

IRSA have focused on development projects that cater to affluent consumers and IRSA has entered into property barter arrangements pursuant to which IRSA contributes undeveloped land parcels to joint venture entities with developers who agree to deliver units at premium development locations in exchange for IRSA’s land contribution. When the developers return these properties to us, demand for premium residential units could be significantly lower. In such case, IRSA would be unable to sell these residential units at the estimated prices or time frame, which could have an adverse effect on IRSA’s financial condition and results of operations.

IRSA is subject to risks affecting the hotel industry.

The full-service segment of the lodging industry in which our hotels operate is highly competitive. The operational success of IRSA’s hotels is highly dependent on our ability to compete in areas such as access, location, quality of accommodations, rates, quality food and beverage facilities and other services and amenities. IRSA’s hotels may face additional competition if other companies decide to build new hotels or improve their existing hotels to increase their attractiveness.

In addition, the profitability of our hotels depends on:

· 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 Influenza A Subtype H1N1 and Zika viruses, a potential Ebola outbreak, Covid-19, monkeypox, among others, or weather phenomenons 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 and local economy; and

· taxes and governmental regulations affecting wages, prices, interest rates, construction procedures and costs.

The shift by consumers to purchasing goods over the internet, where barriers to entry are low, may negatively affect sales at IRSA’s shopping malls.

In recent years, internet retail sales have grown significantly in Argentina, even though the market share of such sales is still modest. The Internet enables manufacturers and retailers to sell directly to consumers, diminishing the importance of traditional distribution channels such as retail stores and shopping malls. IRSA believes that our target consumers are increasingly using the Internet, from home, work or elsewhere, to shop electronically for retail goods, and this trend is likely to continue. Retailers at IRSA’s properties face increasing competition from online sales and this could cause the termination or non-renewal of their leases or a reduction in their gross sales, affecting our percentage rent based revenue. If e-commerce and retail sales through the Internet continue to grow, retailers’ and consumers’ reliance on our shopping malls could be materially diminished, having a material adverse effect on our financial condition, results of operations and business prospects.

IRSA’s business is subject to extensive regulation and additional regulations may be imposed in the future.

IRSA’s activities are subject to Argentine federal, state and municipal laws, and to regulations, authorizations and licenses required with respect to construction, zoning, use of the soil, environmental protection and historical landmark preservation, consumer protection, antitrust and other requirements, all of which affect IRSA’s ability to acquire land, buildings and shopping malls, develop and build projects and negotiate with customers. In addition, companies in this industry are subject to increasing tax rates, the introduction of new taxes and changes in the taxation regime. IRSA’s is required to obtain permits from different government agencies in order to carry out our projects. Maintaining IRSA’s licenses and authorizations can be costly. If we fail to comply with such laws, regulations, licenses and authorizations, IRSA may face fines, project shutdowns, and cancellation of licenses and revocation of authorizations.

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In addition, public agencies may issue new and stricter standards, or enforce or construe existing laws and regulations in a more restrictive manner, which may force us to incur expenditures in order to comply. Development activities are also subject to risks of potential delays in or an inability to obtain all necessary zoning, environmental, land-use, development, building, occupancy and other permits and authorizations. Any such delays or failures to obtain such government approvals may have an adverse effect on IRSA’s business.

In the past, the Argentine Government issued regulations regarding leases in response to housing shortages, high rates of inflation and difficulties in accessing credit. Such regulations limited or prohibited increases on rental prices and prohibited eviction of tenants, even for failure to pay rent. Most of IRSA’s leases provide that tenants pay all costs and taxes related to their respective leased areas. In the event of a significant increase in such costs and taxes, the Argentine Government may respond to political pressure to intervene by regulating this practice, thereby negatively affecting IRSA’s rental income. IRSA cannot assure you that the Argentine Government will not impose similar or other regulations in the future. Changes in existing laws or the enactment of new laws governing the ownership, operation or leasing of shopping malls and office properties in Argentina could negatively affect the real estate and the rental market and materially and adversely affect IRSA’s operations and financial condition.

Labor relations may negatively impact IRSA.

As of June 30, 2023, 61.1% of IRSA’s workforce was represented by unions under collective bargaining agreements. Although IRSA currently enjoys good relations with IRSA’s employees and their unions, IRSA cannot assure you that labor relations will continue to be positive or that deterioration in labor relations will not materially and adversely affect us.

IRSA’s results of operations include unrealized revaluation adjustments on investment properties, which may fluctuate significantly over financial periods and may materially and adversely affect IRSA’s business, results of operations and financial condition.

During the year ended June 30, 2023, IRSA had fair value loss on investment properties of ARS 49,145 million. Although the upward or downward revaluation adjustments reflect unrealized capital gains or losses on our investment properties during the relevant periods, the adjustments do not reflect the actual cash flow or profit or losses generated from the sales or rental of our investment properties. Unless such investment properties are disposed of at similarly revalued amounts, IRSA will not realize the actual cash flow. The amount of revaluation adjustments has been, and will continue to be, significantly affected by the prevailing property markets and macroeconomic conditions prevailing in Argentina and will be subject to market fluctuations in those markets.

We cannot guarantee whether changes in market conditions will increase, maintain or decrease the historical average fair value gains on our investment properties or at all. In addition, the fair value of our investment properties may materially differ from the amount we receive from any actual sale of an investment property. If there is any material downward adjustment in the revaluation of our investment properties in the future or if our investment properties are disposed of at significantly lower prices than their valuation or appraised value, our business, results of operations and financial condition may be materially and adversely affected.

Due to the currency mismatches between IRSA’s assets and liabilities, IRSA has high currency exposure.

As of June 30, 2023, the majority of its liabilities, such as its Series VIII, XI, XIII, XIV, XV, XVI and XVII Notes, were denominated in U.S. dollars while the Company’s revenues are mainly denominated in Pesos. This currency gap mainly affects our operational flows to pay interests of our U.S. dollar denominated debt, considering our assets are transacted in U.S dollars.  In addition, restrictions to access to MULC to acquire the required U.S. dollars to pay our U.S. dollar denominated debt or future regulations that may be enacted establishing a different exchange rate (higher than the current official exchange rate) to convert the Pesos into U.S. dollars  exposes us to a risk of volatility, which may adversely affect our financial results if the U.S. dollar appreciates against the Peso and may affected our ability to pay interests of our U.S. dollar denominated debt. Any depreciation of the Peso against the U.S. dollar increases the nominal amount of IRSA’s debt in Pesos, which further adversely affects the results of IRSA’s operations and financial conditions and may increase the collection risk of IRSA’s leases and other receivables from our tenants and mortgages, most of which generate Peso denominated revenue.

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IRSA issue debt in the local and international capital markets as one of its main sources of funding and its capacity to successfully access the local and international markets on favorable terms affects its cost of funding.

IRSA’s ability to successfully access the local and international capital markets on acceptable terms depends largely on capital markets conditions prevailing in Argentina and internationally. IRSA has no control over capital markets conditions, which can be volatile and unpredictable. If IRSA is unable to issue debt in the local and/or international capital markets and on terms acceptable to IRSA, whether as a result of regulations and foreign exchange restrictions, a deterioration in capital markets conditions or otherwise, IRSA would likely be compelled to seek alternatives for funding, which may include short-term or more expensive funding sources. If this were to happen, IRSA may be unable to fund our liquidity needs at competitive costs and its business results of operations and financial condition may be materially and adversely affected.

Property ownership through joint ventures or investees may limit our ability to act exclusively in our interest.

We develop and acquire properties in joint ventures with other persons or entities or make minority investments in entities when we believe circumstances warrant the use of such structures.

As of June 30, 2023, IRSA owns 50% of Quality Invest S.A., which was recently sold (see “Recent Developments - Sale of Quality Invest S.A.”). In the Sales and Developments segment, IRSA owns 50% of the equity of Puerto Retiro and 50% of the equity of Cyrsa S.A. In the Hotel segment, IRSA owns 50% of the equity of Hotel Llao Llao and the other 50% is owned by the Sutton Group. In the Shopping Malls segment IRSA owns 50% of the equity of Nuevo Puerto Santa Fe S.A., which is the tenant of a building in which it built and currently operates “La Ribera” shopping mall.

In addition, IRSA holds approximately 29.91% of the equity of Banco Hipotecario, of which the Argentine Government is the controlling shareholder.

IRSA could engage in a dispute with one or more of its joint venture partners or controlling shareholders in an investment that might affect its ability to operate a jointly-owned property. Moreover, its joint venture partners or controlling shareholders in an investment may, at any time, have business, economic or other objectives that are inconsistent with its objectives, including objectives that relate to the timing and terms of any sale or refinancing of a property. For example, the approval of certain of its investors is required with respect to operating budgets and refinancing, encumbering, expanding or selling any of these properties. In some instances, its joint venture partners or controlling shareholders in an investment may have competing interests in their markets that could create conflicts of interest. If the objectives of its joint venture partners or controlling shareholder in an investment are inconsistent with our own objectives, IRSA will not be able to act exclusively in our interests. 

If one or more of the investors in any of its jointly owned properties were to experience financial difficulties, including bankruptcy, insolvency or a general downturn of business, there could be an adverse effect on the relevant property or properties and in turn, on IRSA’s financial performance. Should a joint venture partner or controlling shareholder in an investment declare bankruptcy, IRSA could be liable for its partner’s common share of joint venture liabilities or liabilities of the investment vehicle.

IRSA is dependent on our Board of Directors, senior management and other key personnel.

IRSA’s success, to a significant extent, depends on the continued employment of Eduardo S. Elsztain and certain other members of our Board of Directors and senior management, who have significant expertise and knowledge of our business and industry. The loss or interruption of their services for any reason could have a material adverse effect on our business and results of operations. Our future success also depends in part upon our ability to attract and retain other highly qualified personnel. We cannot assure you that we will be successful in hiring or retaining qualified personnel, or that any of our personnel will remain employed by us, which may have a material adverse effect on our financial condition and results of operations.

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IRSA may face potential conflicts of interest relating to our principal shareholders.

IRSA’s largest beneficial owner is Mr. Eduardo S. Elsztain, according to his indirect shareholding through Cresud S.A.C.I.F. y A. As of June 30, 2023, such beneficial ownership consisted of 471,976,181 common shares held by Cresud S.A.C.I.F. y A. Conflicts of interest between our management and that of our related companies may arise in connection with the performance of their respective business activities. As of June 30, 2023, Mr. Eduardo S. Elsztain also beneficially owned approximately 58.2% of IRSA’s common shares. IRSA cannot assure you that our principal shareholders and our affiliates will not limit or cause us to forego business opportunities that our affiliates may pursue or that the pursuit of other opportunities will be in our interest.

Disease outbreaks or other public health concerns could reduce traffic in IRSA’s shopping malls.

As a result of the Covid-19 pandemic, the Argentine government enacted several regulations limiting the operation of schools, cinemas and shopping malls, which has significantly reduced traffic at our shopping malls. See “Risks Relating to Argentina -The emergence and spread of a pandemic-level disease or threat to public health, such as Covid-19, may have a material adverse impact on the Argentine and global economy, our business operations, financial condition or results of operations.” IRSA cannot assure you that new disease outbreaks or health hazards will not occur in the future, or that such an outbreak or health hazard would not significantly affect consumer and/or tourists’ activity. The recurrence of such a scenario could adversely affect IRSA’s business and IRSA’s results of operations.

Risks Relating to IRSA’s Investment in Banco Hipotecario

As of June 30, 2023, IRSA owned approximately 29.91% of the outstanding capital stock of Banco Hipotecario. Banco Hipotecario’s assets as of such date were ARS 672,049.9 million. All of Banco Hipotecario’s operations, properties and customers are located in Argentina. Accordingly, the quality of Banco Hipotecario’s loan portfolio, financial condition and results of operations depend on economic, regulatory and political conditions prevailing in Argentina. These conditions include growth rates, inflation rates, exchange rates, changes to interest rates, changes to government policies, social instability and other political, economic or international developments either taking place in, or otherwise affecting, Argentina.

The short-term structure of the deposit base of the Argentine financial system, including Banco Hipotecario, could lead to a reduction in liquidity levels and limit the long-term expansion of financial intermediation.

Given the short-term structure of the deposit base of the Argentine financial system, credit lines are also predominantly short-term, with the exception of mortgages, which represent a low proportion of the existing credit base. Although liquidity levels are currently reasonable, no assurance can be given that these levels will not be reduced due to a future negative economic scenario. Therefore, there is still a risk of low liquidity levels that could increase funding cost in the event of a withdrawal of a significant amount of the deposit base of the financial system, and limit the long-term expansion of financial intermediation including Banco Hipotecario.

The growth and profitability of Argentina’s financial system partially depend on the development of long-term funding. During 2019, Central Bank reserves registered an abrupt fall mainly due to U.S. dollars sales by the Central Bank and the National Treasury to the private sector; cancellation of public debt; and outflow of U.S. dollars deposits from the private sector. As a consequence, there is a reduction of loans denominated in U.S. dollars. Since most deposits in the Argentine financial system are short-term, a substantial portion of the loans have the same or similar maturities, and there is a small portion of long-term credit lines. The uncertainty with respect to the level of inflation in future years is a principal obstacle to a faster recovery of Argentina’s private sector long-term lending. This uncertainty has had, and may continue to have a significant impact on both the supply of and demand for long-term loans as borrowers try to hedge against inflation risk by borrowing at fixed rates while lenders hedge against inflation risk by offering loans at floating rates. If longer-term financial intermediation activity does not grow, the ability of financial institutions, including Banco Hipotecario, to generate profits will be negatively affected.

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Banco Hipotecario issues debt in the local and international capital markets as one of its sources of funding and its capacity to successfully access the local and international markets on favorable terms affects its cost of funding.

In recent years, Banco Hipotecario has diversified its financing sources by increasing deposits. Still, Banco Hipotecario remains having presence in the local and international capital markets. As of June 30, 2023, the issuance of notes represented 2.8% of its total liabilities. The ability of Banco Hipotecario to successfully access the local and international capital markets and on acceptable terms depends largely on capital markets conditions prevailing in Argentina and internationally. Banco Hipotecario has no control over capital markets conditions, which can be volatile and unpredictable.

The stability of the financial system depends upon the ability of financial institutions, including Banco Hipotecario, to maintain and increase the confidence of depositors.

The measures implemented by the Argentine Government in late 2001 and early 2002, in particular the restrictions imposed on depositors to withdraw money freely from banks and the “pesification” and restructuring of their deposits, were strongly opposed by depositors due to the losses on their savings and undermined their confidence in the Argentine financial system and in all financial institutions operating in Argentina.

If depositors once again withdraw their money from banks in the future, there may be a substantial negative impact on the manner in which financial institutions, including Banco Hipotecario, conduct their business, and on their ability to operate as financial intermediaries. Loss of confidence in the international financial markets may also adversely affect the confidence of Argentine depositors in local banks.

In the future, an adverse economic situation, even if it is not related to the financial system, could trigger a massive withdrawal of capital from local banks by depositors, as an alternative to protect their assets from potential crises. Any massive withdrawal of deposits could cause liquidity issues in the financial sector and, consequently, a contraction in credit supply.

The occurrence of any of the above could have a material and adverse effect on Banco Hipotecario’s expenses and business, results of operations and financial condition.

The asset quality of financial institutions is exposed to the non-financial public sector and Central Bank’s indebtedness.

Financial institutions carry significant portfolios of bonds issued by the Argentine Government and by provincial governments as well as loans granted to these governments. The exposure of the financial system to the non-financial public sector’s indebtedness had been shrinking steadily, from 49.0% of total assets in 2002 to 16.8% towards the end of 2022. To an extent, the value of the assets held by Argentine banks, as well as their capacity to generate income, is dependent on the creditworthiness of the non-financial public sector, which is in turn tied to the Argentine Government’s ability to foster sustainable long-term growth, generate fiscal revenue and reduce public expenditure.

In addition, financial institutions currently carry securities issued by the Central Bank in their portfolios, which generally are short-term. As of June 30, 2023, Banco Hipotecario’s total exposure to the public sector was ARS 80,932.20 million, which represented 12.04% of its assets as of that date, and the total exposure to securities issued by the Central Bank was ARS 144,256.44 million, which represented 21.47% of its total assets as of June 30, 2023.

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Banco Hipotecario could suffer losses in its investment portfolios due to volatility in the capital markets and in the exchange rate, which could significantly affect Banco Hipotecario's financial condition and results of operations.

As of June 30, 2023, Banco Hipotecario had a total exposure in Leliq of ARS 141,818 million, and had arranged swap transactions with the Central Bank against Leliq amounting to ARS 221,303 million. Banco Hipotecario could suffer losses related to its U.S. dollar investments due to changes in market prices, defaults, fluctuations in market interest rates and exchange rates, changes in the market perception of the credit quality of both public sector instruments and private issues, or other reasons. A decline in the performance of the capital markets may cause Banco Hipotecario to record net losses due to a decrease in the value of its investment portfolios, in addition to losses from trading positions caused by volatility in financial market prices, even in the absence of a general economic downturn. Any of these losses could have a material adverse effect on Banco Hipotecario's financial condition and results of operations.

The quality of Banco Hipotecario’s assets and that of other financial institutions may deteriorate if the Argentine private sector is affected by economic events in Argentina or international macroeconomic conditions.

The capacity of many Argentine private sector debtors to repay their loans has in the past deteriorated as a result of certain economic events in Argentina or macroeconomic conditions, materially affecting the asset quality of financial institutions, including Banco Hipotecario. The ratio of non-performing private sector loans has increased in recent years, as Argentina’s economic outlook deteriorated. Banco Hipotecario recorded non-performing loan ratios of 12.3%, 13.4% and 4.2% for June 30, 2020, 2021, and 2022, respectively. The quality of its loan portfolio is highly sensitive to economic conditions prevailing from time to time in Argentina, and as a result if Argentina were to experience adverse macroeconomic conditions, the quality of Banco Hipotecario’s loan portfolio and the recoverability of its loans would likely be adversely affected. This might affect the creditworthiness of Banco Hipotecario’s loan portfolio and the results of operations.

The Consumer Protection Law may limit some of the rights afforded to Banco Hipotecario.

Argentine Law No. 24,240 (the “Consumer Protection Law”) sets forth a series of rules and principles designed to protect consumers, which include Banco Hipotecario’s customers. The Consumer Protection Law was amended by Law No. 26,361 on March 12, 2008 to expand its applicability and the penalties associated with violations thereof. Additionally, Law No. 25,065 (as amended by Law No. 26,010 and Law No. 26,361, the “Credit Card Law”) also sets forth public policy regulations designed to protect credit card holders. Recent Central Bank regulations, such as Communication “A” 5,388, also protects consumers of financial services.

In addition, the Civil and Commercial Code has a chapter on consumer protection, stressing that the rules governing consumer relations should be applied and interpreted in accordance with the principle of consumer protection and that a consumer contract should be interpreted in the sense most favorable to it. The application of both the Consumer Protection Law and the Credit Card Law by administrative authorities and courts at the federal, provincial and municipal levels has increased. This trend has increased general consumer protection levels. If Banco Hipotecario is found to be liable for violations of any of the provisions of these laws, the potential penalties could limit some of Banco Hipotecario’s rights, for example, with respect to its ability to collect payments due from services and financing provided by us, and adversely affect Banco Hipotecario’s financial results of operations.

We cannot assure you that court and administrative rulings based on the newly-enacted regulation or measures adopted by the enforcement authorities will not increase the degree of protection given to Banco Hipotecario’s debtors and other customers in the future, or that they will not favor the claims brought by consumer groups or associations. This may prevent or hinder the collection of payments resulting from services rendered and financing granted by us, which may have an adverse effect on Banco Hipotecario’s business and results of operations.

Class actions against financial institutions for unliquidated amounts may adversely affect the financial system’s profitability.

Certain public and private organizations have initiated class actions against financial institutions in Argentina. The National Constitution and the Consumer Protection Law contain certain provisions regarding class actions. However, their guidance with respect to procedural rules for instituting and trying class action cases is limited. Nonetheless, through an ad hoc doctrine, Argentine courts have admitted class actions in some cases, including various lawsuits against financial entities related to “collective interests” such as alleged overcharging on products, interest rates and advice in the sale of public securities, etc. If class action plaintiffs were to prevail against financial institutions, their success could have an adverse effect on the financial industry in general and indirectly on Banco Hipotecario’s business.

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Banco Hipotecario operates in a highly regulated environment and its operations are subject to capital controls regulations adopted by several regulatory agencies.

Financial institutions are subject to a major number of regulations concerning functions historically determined by the Central Bank and other regulatory authorities. The Central Bank may penalize Banco Hipotecario and its directors, members of the Executive Committee and members of its Supervisory Committee, in the event of any breach of the applicable regulation. Potential sanctions, for any breach of the applicable regulations, may vary from administrative and/or disciplinary penalties to criminal sanctions. Similarly, the CNV, which authorizes securities offerings and regulates the capital markets in Argentina, has the authority to impose sanctions on us and Banco Hipotecario’s Board of Directors for breaches of corporate governance established in the capital markets laws and the CNV Rules. The UIF regulates matters relating to the prevention of asset laundering and has the ability to monitor compliance with any such regulations by financial institutions and, eventually, impose sanctions.

We cannot assure you whether such regulatory authorities will commence proceedings against Banco Hipotecario, its shareholders, directors or its Supervisory Committee, or penalize Banco Hipotecario. Banco Hipotecario has adopted “Know Your Customer” and other policies and procedures to comply with its duties under currently applicable rules and regulations.

In addition to regulations specific to the banking industry, Banco Hipotecario is subject to a wide range of federal, provincial and municipal regulations and supervision generally applicable to businesses operating in Argentina, including laws and regulations pertaining to labor, social security, public health, consumer protection, the environment, competition and price controls. We cannot assure you that existing or future legislation and regulation will not require material expenditures by Banco Hipotecario or otherwise have a material adverse effect on Banco Hipotecario’s consolidated operations.

The effects of legislation that restricts our ability to pursue mortgage foreclosure proceedings could adversely affect us.

The ability to pursue foreclosure proceedings through completion, in order to recover on defaulted mortgage loans, has an impact on financial institutions activities. On December 13, 2006, pursuant to Law No. 26,177, the “Restructuring Unit Law” was created to allow all mortgage loans to be restructured between debtors and the former Banco Hipotecario Nacional, insofar as such mortgages had been granted prior to the effectiveness of the Convertibility Law. Law No. 26,313, the “Pre-convertibility Mortgage Loans Restructuring Law,” was enacted by the Argentine Congress on November 21, 2007 and partially signed into law on December 6, 2007 to establish the procedure to be followed in the restructuring of mortgage loans within the scope of Section 23 of the Mortgage Refinancing System Law in accordance with the guidelines established by the Restructuring Unit Law. To this end, a recalculation was established for certain mortgage loans originated by the former Banco Hipotecario Nacional before April 1, 1991.

Executive Branch Decree No. 2,107/08 issued on December 19, 2008 regulated the Pre-convertibility Mortgage Loans Restructuring Law and established that the recalculation of the debt applies to the individual mortgage loans from global operations in effect on December 31, 2008 and agreed upon prior to April 1, 1991, and in arrears at least since November 2007 and remaining in arrears on December 31, 2008. In turn, the Executive Branch Decree No. 1,366/10, published on September 21, 2010, expanded the universe of Pre-convertibility loans subject to restructuring to include the individual mortgage loans not originating in global operations insofar as they met the other requirements imposed by Executive Branch Decree No. 2,107/08. In addition, Law No. 26,313 and its regulatory decrees also condoned the debts on mortgage loans granted before the Convertibility Law in so far as they had been granted to deal with emergency situations and in so far as they met the arrears requirement imposed on the loans subject to recalculation.

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Subject to the Central Bank’s supervision, Banco Hipotecario implemented the recalculation of mortgage loans within the scope of the aforementioned rules by adjusting the value of the new installments to a maximum amount not in excess of 20% of household income. In this respect, we estimate that Banco Hipotecario has sufficient loan loss provisions to face any adverse economic impact on the portfolio involved. We cannot assure that the Argentine Government will not enact additional laws restricting our ability to enforce our rights as a creditor and/or imposing a condition or a reduction of principal on the amounts unpaid in our mortgage loan portfolio. Any such circumstance could have a significant adverse effect on our financial condition and the results of our operations.

Increased competition and M&A activities in the banking industry may adversely affect Banco Hipotecario.

Banco Hipotecario foresees increased competition in the banking sector. If the trend towards decreasing spreads is not offset by an increase in lending volumes, the ensuing losses could lead to mergers in the industry. These mergers could lead to the establishment of larger, stronger banks with more resources than us. Therefore, although the demand for financial products and services in the market continues to grow, competition may adversely affect Banco Hipotecario’s results of operations, resulting in shrinking spreads and commissions.

Future governmental measures may adversely affect the economy and the operations of financial institutions.

The Argentine Government has historically exercised significant influence over the economy, and financial institutions, in particular, have operated in a highly regulated environment. We cannot assure you that the laws and regulations currently governing the economy or the banking sector will remain unaltered in the future or that any such changes will not adversely affect Banco Hipotecario’s business, financial condition or results of operations and Banco Hipotecario’s ability to honor its debt obligations in foreign currency.

Several legislative bills to amend the Financial Institutions Law have been sent to the Argentine Congress. If the law currently in force were to be comprehensively modified, the financial system as a whole could be substantially and adversely affected. If any of these legislative bills were to be enacted or if the Financial Institutions Law were amended in any other way, the impact of the subsequent amendments to the regulations on the financial institutions in general, Banco Hipotecario’s business, its financial condition and the results of operations is uncertain.

Law No. 26,739 was enacted to amend the Central Bank’s charter, the principal aspects of which are: (i) to broaden the scope of the Central Bank’s mission (by establishing that such institution shall be responsible for financial stability and economic development while pursuing social equity); (ii) to change the obligation to maintain an equivalent ratio between the monetary base and the amount of international reserves; (iii) to establish that the Board of Directors of the institution will be the authority responsible for determining the level of reserves required to guarantee normal operation of the MULC based on changes in external accounts; and (iv) to empower the monetary authority to regulate and provide guidance on credit through the financial system institutions, so as to “promote long-term production investment.”

In addition, the Civil and Commercial Code, among other things, modifies the applicable regime for contractual provisions relating to foreign currency payment obligations by establishing that foreign currency payment obligations may be discharged in Pesos. This amends the legal framework, pursuant to which debtors may only discharge their foreign currency payment obligations by making payment in the specific foreign currency agreed upon in their agreements; provided however that the option to discharge in Pesos a foreign currency obligation may be waived by the debtor is still under discussion. However, in recent years some court decisions have established the obligation to pay in foreign currency when it was so freely agreed by the parties. We are not able to ensure that any current or future laws and regulations (including, in particular, the amendment to the Financial Institutions Law and the amendment to the Central Bank’s charter) will not result in significant costs to Banco Hipotecario, or will otherwise have an adverse effect on Banco Hipotecario’s operations.

Banco Hipotecario’s obligations as trustee of PROCREAR trust are limited.

Banco Hipotecario currently acts as trustee of the PROCREAR Trust, which aims to facilitate access to housing solutions by providing mortgage loans for construction and developing housing complexes across Argentina. Under the terms and conditions of the PROCREAR Trust, all the duties and obligations under the trust have to be settled with the trust estate. Notwithstanding, if the aforementioned is not met, Banco Hipotecario could have its reputation affected. In addition, if the Argentine Government decides to terminate the PROCREAR Trust and/or terminate Banco Hipotecario’s role as trustee of the PROCREAR Trust, this may adversely affect Banco Hipotecario’s results of operations.

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The exposure of Banco Hipotecario to individual borrowers could lead to higher levels of past due loans, allowances for loan losses and charge-offs.

A substantial portion of Banco Hipotecario’s loan portfolio consists of loans to individual customers in the lower-middle to middle income segments of the Argentine population. The quality of Banco Hipotecario’s portfolio of loans to individuals is dependent to a significant extent on economic conditions prevailing from time to time in Argentina. Lower-middle to middle income individuals are more likely to be exposed to and adversely affected by adverse developments in the Argentine economy than corporations and high-income individuals. As a result, lending to these segments represents higher risk than lending to such other market segments. Consequently, Banco Hipotecario may experience higher levels of past due amounts, which could result in higher provisions for loan losses. Therefore, there can be no assurance that the levels of past due amounts and subsequent charge-offs will not be materially higher in the future.

An increase in fraud or transaction errors may adversely affect Banco Hipotecario.

As with other financial institutions, Banco Hipotecario is susceptible to, among other things, fraud by employees or outsiders, unauthorized transactions by employees and other operational errors (including clerical or record keeping errors and errors resulting from faulty computer or telecommunications systems). Given the high volume of transactions that may occur at a financial institution, errors could be repeated or compounded before they are discovered and remedied. In addition, some of our transactions are not fully automated, which may further increase the risk that human error or employee tampering will result in losses that may be difficult to detect quickly or at all. Losses from fraud by employees or outsiders, unauthorized transactions by employees and other operational errors might adversely affect Banco Hipotecario’s reputation, business, the results of operations and financial condition.

Risks Relating to the ADSs and the Common Shares.

Shares eligible for sale could adversely affect the price of our common shares and ADSs.

The market prices of our common shares and ADS could decline as a result of sales by our existing shareholders of common shares or ADSs in the market, or the perception that these sales could occur. These sales also might make it difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. The ADSs are freely transferable under U.S. securities laws, including common shares sold to our affiliates. Cresud, which as of June 30, 2023, was the beneficial owner of approximately 38.5% (without considering treasury shares) of our common shares (or approximately 228,519,673 common shares which may be exchanged for an aggregate of 22,851,967 ADSs), is free to dispose of any or all of its common shares or ADSs at any time in its discretion. Sales of a large number of our common shares and/or ADSs would likely have an adverse effect on the market price of our common shares and the ADSs.

If we issue additional equity securities in the future, you may suffer dilution, and trading prices for our equity securities may decline.

We may issue additional shares of our common stock for financing future acquisitions or new projects or for other general corporate purposes. Any such issuance could result in a dilution of your ownership stake and/or the perception of any such issuances could have an adverse impact on the market price of the ADSs.

We are subject to certain different corporate disclosure requirements and accounting standards than domestic issuers of listed securities in the United States

There is less publicly available information about the issuers of securities listed on the Argentine stock exchanges than information publicly available about domestic issuers of listed securities in the United States and certain other countries.

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Although the ADSs are listed on the NASDAQ Global Market, as a foreign private issuer we are able to rely on home country governance requirements rather than relying on the NASDAQ corporate governance requirements. See “Item 16.G. Corporate Governance-Compliance with NASDAQ listing standards on corporate governance.” Additionally, as a foreign private issuer, we are exempt from certain rules under the Exchange Act including (i) the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; (ii) the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and (iii) the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified information, or current reports on Form 8-K, upon the occurrence of specified significant events. In addition, foreign private issuers are not required to file their Annual Report on Form 20-F until four months after the end of each fiscal year, while United States domestic issuers that are accelerated filers are required to file their Annual Report on Form 10-K within 75 days after the end of each fiscal year. Foreign private issuers are also exempt from the Regulation Fair Disclosure, aimed at preventing issuers from making selective disclosures of material information. As a result of the above, you may not have the same protections afforded to shareholders companies that are not foreign private issuers.

Investors may not be able to effect service of process within the United States, limiting their recovery of any foreign judgment.

We are a publicly held corporation (sociedad anónima) organized under the laws of Argentina. Most of our directors and our senior managers are located in Argentina. As a result, it may not be possible for investors to effect service of process within the United States upon us or such persons or to enforce against us or them in United States courts judgments obtained in such courts predicated upon the civil liability provisions of the United States federal securities laws. We have been advised by our Argentine counsel, Zang, Bergel & Viñes, that there is doubt whether the Argentine courts will enforce, to the same extent and in as timely a manner as a United States or foreign court, an action predicated solely upon the civil liability provisions of the United States federal securities laws or other foreign regulations brought against such persons or against us.

If we are considered to be a passive foreign investment company for United States federal income tax purposes, United States holders of our common shares or ADSs would suffer negative consequences.

Based on the past and projected composition of our income and assets and the valuation of our assets, including goodwill, we do not believe we were a passive foreign investment company (a “PFIC”) for United States federal income tax purposes for the taxable year ending June 30, 2023, and do not currently expect to become a PFIC, although there can be no assurance in this regard. The determination of whether we are a PFIC is made annually. Accordingly, it is possible that we may be a PFIC in the current or any future taxable year due to changes in our asset or income composition or if our projections are not accurate. The volatility and instability of Argentina’s economic and financial system may substantially affect the composition of our income and assets and the accuracy of our projections. In addition, this determination is based on the interpretation of certain United States Treasury regulations relating to rental income, which regulations are potentially subject to different interpretations. If we become a PFIC, U.S. Holders (as defined in “Item 10. Additional Information—F. Taxation—United States Taxation”) of our common shares or ADSs will be subject to certain United States federal income tax rules that have negative consequences for them such as additional tax and an interest charge upon certain distributions by us or upon a sale or other disposition of our common shares or ADSs at a gain, as well as reporting requirements. See “Item 10. Additional Information—F. Taxation—United States Taxation—Passive Foreign Investment Company” for a more detailed discussion of the consequences if we are deemed a PFIC. You should consult your own tax advisors regarding the application of the PFIC rules to your particular circumstances.

Changes in Argentine tax laws may affect the tax treatment of our common shares or ADSs.

Law No. 26,893, which amended Law No. 20,628 (the “Income Tax Law”), was enacted on September 12, 2013, and published in the Official Gazette on September 23, 2013. According to the amendments, the distribution of dividends by an Argentine corporation was subject to income tax at a rate of 10.0%, unless such dividends were distributed to Argentine corporate entities.

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The dividend tax was repealed by Law No. 27,260, published in the Official Gazette on July 22, 2016, and consequently no income tax withholding was applicable on the distribution of dividends in respect of both Argentine and non-Argentine resident shareholders, except when dividends distributed were greater than the income determined according to the application of the Income Tax Law, accumulated at the fiscal year immediately preceding the year in which the distribution is made. In such case, the excess was subject to a rate of 35%, for both Argentine and non-Argentine resident shareholders. This treatment still applies to dividends to be distributed at any time out of retained earnings accumulated until the end of the last fiscal year starting before January 1, 2018.

However, pursuant to Law No. 27,430, as amended by Law No. 27,541 and Law No. 27,630, dividends distributed out of earnings accrued in fiscal years starting on or after January 1, 2018, and other profits paid in cash or in kind -except for stock dividends or quota dividends- by companies and other entities incorporated in Argentina referred to in the Income Tax Law, to Argentine resident individuals, resident undivided estates and foreign beneficiaries are subject to income tax at a 7% rate on profits accrued in fiscal years starting on January 1, 2018 and onwards. If dividends are distributed to Argentine corporate taxpayers (in general, entities organized or incorporated under Argentine law, certain traders and intermediaries, local branches of foreign entities, sole proprietorships and individuals carrying on certain commercial activities in Argentina), no dividend tax would apply.

In addition, capital gains originated from the disposal of shares and other securities, including securities representing shares and deposit certificates, are subject to capital gains tax. Law No. 27,430 effective as of January 1, 2018, provides that capital gains obtained by Argentine resident individuals from the disposal of shares and ADSs are exempt from capital gains tax in the following cases: (i) when the shares are placed through a public offering authorized by the CNV, (ii) when the shares are traded in stock markets authorized by the CNV, under segments that ensure priority of price-time and interference of offers, and/or (iii) when the sale, exchange or other disposition of shares is made through an initial public offering and/or exchange of shares authorized by the CNV.

Such law also provides that the capital gains tax applicable to non-residents for transactions entered into until December 30, 2017 is still due, although no taxes will be claimed to non-residents with respect to past sales of Argentine shares or other securities traded in the CNV’s authorized markets (such as ADSs) as long as the cause of the non-payment was the absence of regulations stating the mechanism of tax collection at the time the transaction was closed. The AFIP’s General Resolution No. 4,227, which came into effect on April 26, 2018, stipulates the procedures through which the income tax should be paid to the AFIP. The payment of capital gains tax applicable for transactions entered into before December 30, 2017 was due on June 11, 2018.

In addition, Decree No. 824/2019, published in the Official Gazette on December 6, 2019 and which introduced the new consolidated text of the Income Tax Law, maintains the 15% capital gains tax (calculated on the actual net gain or a presumed net gain equal to 90% of the sale price) on the disposal of shares or securities by non-residents. However, non-residents are exempt from the capital gains tax on gains obtained from the sale of (a) Argentine shares in the following cases: (i) when the shares are placed through a public offering authorized by the CNV, (ii) when the shares were traded in stock markets authorized by the CNV, under segments that ensure priority of price-time and interference of offers, and/or (iii) when the sale, exchange or other disposition of shares is made through an initial public offering and/or exchange of shares authorized by the CNV; and (b) depositary shares or depositary receipts issued abroad, when the underlying securities are shares (i) issued by Argentine companies, and (ii) with authorization of public offering. The exemptions will only apply to the extent the foreign beneficiaries reside in, and the funds used for the investment proceed from jurisdictions not considered as not cooperating for purposes of fiscal transparency.

In case the exemption is not applicable and, to the extent foreign beneficiaries neither reside in, nor the funds arise from, jurisdictions considered as not cooperating for purposes of fiscal transparency, the gain realized from the disposition of shares would be subject to Argentine income tax at a 13.5% effective rate on the gross price. In case such foreign beneficiaries reside in, or the funds arise from, jurisdictions considered as not cooperating for purposes of fiscal transparency, a 31.5% effective rate on the gross price should apply.

Therefore, holders of our common shares, including in the form of ADSs, are encouraged to consult their tax advisors as to the particular Argentine income tax consequences under their specific facts.

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Holders of the ADSs may be unable to exercise voting rights with respect to the common shares underlying their ADSs.

As a holder of ADS, we will not treat you as one of our shareholders and you will not have shareholder rights. The depositary will be the holder of the common shares underlying your ADSs and holders may exercise voting rights with respect to the common shares represented by the ADSs only in accordance with the deposit agreement relating to the ADSs. There are no provisions under Argentine law or under our bylaws that limit the exercise by ADS holders of their voting rights through the depositary with respect to the underlying common shares. However, there are practical limitations on the ability of ADS holders to exercise their voting rights due to the additional procedural steps involved in communicating with these holders. For example, holders of our common shares will receive notice of shareholders’ meetings through publication of a notice in the CNV’s website, an Official Gazette in Argentina, an Argentine newspaper of general circulation and the bulletin of BASE, and will be able to exercise their voting rights by either attending the meeting in person or voting by proxy. ADS holders, by comparison, will not receive notice directly from us. Instead, in accordance with the deposit agreement, we will provide the notice to the ADS Depositary. If we ask the ADS Depositary to do so, the ADS Depositary will mail to holders of ADSs the notice of the meeting and a statement as to the manner in which instructions may be given by holders. To exercise their voting rights, ADS holders must then instruct the ADS Depositary as to voting the common shares represented by their ADSs. Under the deposit agreement, the ADS Depositary is not required to carry out any voting instructions unless it receives a legal opinion from us that the matters to be voted on would not violate our by‑laws or Argentine law. We are not required to instruct our legal counsel to give that opinion. Due to these procedural steps involving the ADS Depositary, the process for exercising voting rights may take longer for ADS holders than for holders of common shares and common shares represented by ADSs may not be voted as you desire.

We are traded on more than one market and this may result in price variations; in addition, investors may not be able to easily move shares for trading between such markets.

In addition to the trading of our ADSs in the United States, our common shares are traded in Argentina. Trading the ADSs or our common shares on these markets will take place in different currencies (U.S. dollars on the NASDAQ and Pesos on ByMA), and at different times (resulting from different time zones, different trading days and different public holidays in the United States and Argentina). The trading prices of these securities on these two markets may differ due to these and other factors. Any decrease in the price of our common shares on ByMA could cause a decrease in the trading price of the ADSs on the NASDAQ. Investors could seek to sell or buy our shares to take advantage of any price differences between the markets through a practice referred to as arbitrage. Any arbitrage activity could create unexpected volatility in both our share prices on one exchange, and the ADSs available for trading on the other exchange. In addition, holders of ADSs will not be immediately able to surrender their ADSs and withdraw the underlying common shares for trading on the other market without effecting necessary procedures with the ADS Depositary. This could result in time delays and additional cost for holders of ADSs.

Under Argentine law, shareholder rights may be fewer or less well defined than in other jurisdictions.

Our corporate affairs are governed by our by-laws and by Argentine corporate law, which differ from the legal principles that would apply if we were incorporated in a jurisdiction in the United States, such as the States of Delaware or New York, or in other jurisdictions outside Argentina. In addition, your rights or the rights of holders of our common shares to protect your or their interests in connection with actions by our Board of Directors may be fewer and less well defined under Argentine corporate law than under the laws of those other jurisdictions. Although insider trading and price manipulation are illegal under Argentine law, the Argentine securities markets are not as highly regulated or supervised as the United States securities markets or markets in some other jurisdictions. In addition, rules and policies against self-dealing and regarding the preservation of shareholder interests may be less well defined and enforced in Argentina than in the United States, putting holders of our common shares and ADSs at a potential disadvantage.

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Restrictions on the movement of capital out of Argentina may impair your ability to receive dividends and distributions on, and the proceeds of any sale of, the common shares underlying the ADSs.

Over the last twenty years in Argentina exchange controls and transfer restrictions have been periodically imposed, substantially limiting the ability of companies to retain foreign currency or make payments abroad. Since 2019, new regulations have significantly curtailed access to the foreign exchange market by individuals and private sector entities.

In this regard, the Argentine Government imposed restrictions on the conversion of Argentine currency into foreign currencies and on the remittance to foreign investors of proceeds from their investments in Argentina. Argentine law currently permits the Argentine Government to impose these kind of restrictions temporarily in circumstances where a serious imbalance develops in Argentina’s balance of payments or where there are reasons to foresee such an imbalance. We cannot assure you that ADS Depositary for the ADSs may hold the Pesos it cannot convert for the account of the ADS holders who have not been paid. No assurance can be given that payments to non-resident investors will not suffer delays under the current foreign exchange market regulations or be subject to any additional restrictions, such as a different exchange rate to convert the Pesos into U.S dollars, that may be higher than the current official exchange rate. In this regard, we suggest consulting with the corresponding custodian banks about the exchange regulations applicable. See “Item 10. Additional Information-D Exchange Controls.”

The protections afforded to minority shareholders in Argentina are different from and more limited than those in the United States and may be more difficult to enforce.

Under Argentine law, the protections afforded to minority shareholders are different from, and much more limited than, those in the United States and some other Latin American countries. For example, the legal framework with respect to shareholder disputes, such as derivative lawsuits and class actions, is less developed under Argentine law than under United States law as a result of Argentina’s short history with these types of claims and few successful cases. In addition, there are different procedural requirements for bringing these types of shareholder lawsuits. As a result, it may be more difficult for our minority shareholders to enforce their rights against us or our directors or controlling shareholder than it would be for shareholders of a United States company.

We may not pay any dividends.

In accordance with Argentine corporate law, we may pay dividends to shareholders out of net and realized profits, if any, as set forth in our Audited Financial Statements prepared in accordance with IFRS. The approval, amount and payment of dividends are subject to the approval by our shareholders at our annual ordinary shareholders meeting. The approval of dividends requires the affirmative vote of a majority of the shareholders entitled to vote present at the meeting. As a result, we cannot assure you that we will be able to generate enough net and realized profits so as to pay dividends or that our shareholders will decide that dividends will be paid.

Our ability to pay dividends is limited by law and our by-laws.

In accordance with Argentine corporate law, we may pay dividends in Pesos out of retained earnings and/or Other Reserves, if any, to the extent set forth in our Audited Financial Statements prepared in accordance with IFRS. Our shareholders’ ability to receive cash dividends may be limited by the ability of the ADS Depositary to convert cash dividends paid in Pesos into U.S. dollars. Under the terms of our deposit agreement with the depositary for the ADSs, to the extent that the depositary can in its judgment convert Pesos (or any other foreign currency) into U.S. dollars on a reasonable basis and transfer the resulting U.S. dollars to the United States, the depositary will promptly as practicable convert or cause to be converted all cash dividends received by it on the deposited securities into U.S. dollars. If in the judgment of the depositary this conversion is not possible on a reasonable basis (including as a result of applicable Argentine laws, regulations and approval requirements), the depositary may distribute the foreign currency received by it or in its discretion hold such currency uninvested for the respective accounts of the owners entitled to receive the same. As a result, if the exchange rate fluctuates significantly during a time when the depositary cannot convert the foreign currency, you may lose some or all of the value of the dividend distribution.

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You might be unable to exercise preemptive or accretion rights with respect to the common shares underlying your ADSs.

Under Argentine corporate law, if we issue new common shares as part of a capital increase, our shareholders will generally have the right to subscribe for a proportional number of common shares of the class held by them to maintain their existing ownership percentage, which is known as preemptive rights. In addition, shareholders are entitled to the right to subscribe for the unsubscribed common shares of either the class held by them or other classes which remain unsubscribed at the end of a preemptive rights offering, on a pro rata basis, which is known as accretion rights. Under the deposit agreement, the ADS Depositary will not exercise rights on your behalf or make rights available to you unless we instruct it to do so, and we are not required to give that instruction. In addition, you may not be able to exercise the preemptive or accretion rights relating to the common shares underlying your ADSs unless a registration statement under the Securities Act, is effective with respect to those rights or an exemption from the registration requirements of the Securities Act is available. We are not obligated to file a registration statement with respect to the common shares relating to these preemptive rights, and we cannot assure you that we will file any such registration statement. Unless we file a registration statement or an exemption from registration is available, you may receive only the net proceeds from the sale of your preemptive rights by the ADS Depositary or, if the preemptive rights cannot be sold, they will be allowed to lapse. As a result, U.S. holders of common shares or ADSs may suffer dilution of their interest in our company upon future capital increases. 

Our shareholders may be subject to liability for certain votes of their securities.

Our shareholders are not liable for our obligations. Instead, shareholders are generally liable only for the payment of the shares they subscribe for. However, shareholders who have a conflict of interest with us and do not abstain from voting may be held liable for damages to us, but only if the transaction would not have been approved without such shareholders’ votes. Furthermore, shareholders who willfully or negligently vote in favor of a resolution that is subsequently declared void by a court as contrary to LGS or our bylaws may be held jointly and severally liable for damages to us or to other third parties, including other shareholders.

Our warrants are exercisable under limited circumstances and will expire.

On March 10, 2021, we issued an aggregate of 90,000,000 warrants to purchase 90,000,000 of our common shares, and will expire on March 10, 2026. Each warrant entitles its holder to purchase one common share. Each warrant will be exercisable only if the common share rights or ADS rights to which such warrant relates have been exercised, and such warrant will be exercisable after 90 days following its issuance during the nine-day period from and including the 17th through the 25th day of each February, May, September and November (to the extent such dates are business days in New York City and Buenos Aires, Argentina). As of the date of this Annual Report, there are 88,236,618 warrants outstanding.

Item 4. Information on the Company

A. History and Development of the Company

General Information

Our legal name is Cresud Sociedad Anónima Comercial, Inmobiliaria, Financiera y Agropecuaria, and our commercial name is “Cresud”. We were incorporated and organized on December 31, 1936, under Argentine law as a stock corporation (sociedad anónima) and were registered with the IGJ, on February 19, 1937 under number 26, on page 2, book 45 of National By-laws Volume. Pursuant to our bylaws, our term of duration expires on June 6, 2082.

Our common shares are listed and traded on the ByMA and our ADSs representing our common shares are listed on the NASDAQ. Our headquarters are located at Carlos M. Della Paolera 261, 9th Floor (C1001ADA), City of Buenos Aires, Argentina. Our telephone is +54 (11) 4814-7800, and our website is www.cresud.com.ar. Information contained in or accessible through our website is not a part of this Annual Report. We assume no responsibility for the information contained on these sites.

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Our depositary agent for the ADSs in the United States is The Bank of New York Mellon whose address is 240 Greenwich Street, New York, NY 10286, and whose telephone numbers are +1-888-BNY-ADRS (+1-888-269-2377) for U. S. calls and +1-201-680-6825 for calls outside U.S.

History

We were incorporated in 1936 as a subsidiary of Credit Foncier, a Belgian company engaged in the business of providing rural and urban loans in Argentina. We were incorporated to manage real estate holdings foreclosed by Credit Foncier. Credit Foncier was liquidated in 1959, and as part of such liquidation, our shares were distributed to Credit Foncier’s shareholders and in 1960 were listed on the BASE. During the 1960s and 1970s, our business shifted to exclusively agricultural activities.

During 1993 and 1994, Consultores Asset Management acquired on behalf of certain investors approximately 22% of our outstanding shares on the Buenos Aires Stock Exchange. In late 1994, an investor group led by Consultores Asset Management (and including Dolphin Fund plc., currently Dolphin Fund Ltd.) purchased additional shares increasing their aggregate shareholding to approximately 51.4% of our outstanding shares. In 1995, we increased our capital through a rights offering and global public offering of ADSs representing our common shares and listed such ADSs on the NASDAQ. We started our agricultural activities with seven farmlands and 20,000 hectares under management.

In 2002, we acquired a 19.85% interest in IRSA, a real estate company related to certain shareholders of Cresud, and in 2009, we increased our ownership percentage in IRSA to 55.64% and IRSA became Cresud’s direct principal subsidiary. As of June 30, 2023, we had a 56.93% equity interest in IRSA (net of treasury shares) and a majority of our directors are also directors of IRSA. IRSA is one of Argentina’s largest real estate companies and is engaged in a range of diversified real estate activities including residential properties, office buildings, shopping malls and luxury hotels, as well as the sales and development residential properties, it has a 29.9% interest in Banco Hipotecario, one of the main financial institutions in the country, and selected investments outside of Argentina. IRSA’s common shares are listed and traded on the ByMA and IRSA’s GDSs representing its common shares are listed on the NYSE.

In March 2008 we made a follow on offering for up to 180 million shares in the local and international markets, which were fully subscribed, for a total amount of USD 288 million. The proceeds allowed us to expand our international operations to Paraguay and Bolivia, currently we run these operations through BrasilAgro.

In line with our international expansion strategy, in September of 2005 we participated in the creation of BrasilAgro with the purpose of replicating our business model in Brazil. We created BrasilAgro together with our partners, Cape Town Llc, Tarpon Investimentos S.A., Tarpon Agro LLC, Agro Investments S.A. and Agro Managers S.A. On May 2, 2006, BrasilAgro’s shares were listed on the Novo Mercado of the Brazilian Stock Exchange with the symbol AGRO3 and on November 8, 2012, BrasilAgro’s ADSs became listed on the NYSE, under the ticker LND. In February 2021, it made a capital increase for BRL 440 million shares, we subscribed shares in the capitalization. In addition, in May 2021 we exercised warrants that had been granted to the founders of the Company at the initial public offering, before its maturity. As a result of our follow-on subscription and the warrants exercise we increased our stake in BrasilAgro, net of treasury shares, to 39.4%. As of June 30, 2023, our interest in BrasilAgro was 37.88% (net of treasury shares).

Also, we provide the best services for the agricultural community through our subsidiaries. We boost our clients’ businesses through the consulting, marketing and storage services operated by FyO, which main business is crop trading (crop brokerage, futures and options, consulting, logistics and financial services) and sale and distribution of own inputs and third-party products. As of June 30, 2023, we had a 49.55% equity interest in FyO.

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We are pioneers in creating the first online agro marketplace, Agrofy, which is already operating in Argentina, Brazil and Uruguay with regional expansion plans. Agrofy continued to position itself this year as the leading online business platform for agriculture in Argentina, Brazil and Uruguay, exceeding 40 million visits. As of June 30, 2023, our interest in Agrofy is 18.6% and 1.7% of the capital stock through BrasilAgro. Looking ahead to next year, the company will continue working on its expansion plans to other countries in the region.

As of June 30, 2023, we owned, directly and through our subsidiaries, 27 farms, with a total area of 616,803 hectares distributed in Argentina, Brazil, Bolivia and Paraguay. In addition, we have the rights to hold approximately 132,000 hectares of land under concession for a 35-year period that can be extended for another 29 years.

During our fiscal year ended June 30, 2022, a reorganization process was completed by virtue of which IRSA and IRSA CP executed a Merger Agreement pursuant to which IRSA CP merged into IRSA, by way of absorption by IRSA of IRSA CP, and IRSA assumed, by universal succession, all of the assets and liabilities and succeed to all of the rights and obligations of IRSA CP effective as of July 1, 2021. The merger of IRSA CP with IRSA as surviving corporation was duly registered by the corresponding Argentine control authorities on April 27, 2022.

Significant acquisitions, dispositions and development of business

Agricultural Business

Panamby Farm (Brazil)

On September 12, 2022, BrasilAgro has acquired a farmland located in the municipality of Querệncia, state of Mato Grosso, Brazil. The property has an arable area of 5,400 hectares (10,800 hectares of total area), of which 80% are suitable for second crop. The acquisition value is BRL 285.6 million (equivalent to 302 soybean bags per arable hectare at the date of transaction), which will be paid in two installments, a down payment of BRL 140 million at the signing of the contract and a second installment of BRL 145.6 million that will be paid on August 21, 2023.

Sale of fraction of farm “Morotí” (Paraguay)

On October 6, 2022, BrasilAgro completed the sale of a fraction of 863 hectares (498 arable hectares) of the “Morotí” farm located in the State of Boquerón, Paraguay. The sale value was USD 1.5 million, and the buyer made an initial payment of USD 748.5 thousand. The remaining balance will be paid in three equal annual instalments. This fraction of the field was valued on the books at BRL 853 thousand. After this transaction, a remainder of 58,722 hectares of this field remains in the hands of BrasilAgro.

Rio do Meio II Farm (Brazil)

On November 8, 2022, BrasilAgro signed a contract for the sale of 1,965 hectares (1,423 arable hectares) of the Rio do Meio farm, a rural property located in the municipality of Correntina - Bahia, which was acquired in January 2020. The value to be paid was set at 291 soybeans bags, equivalent to BRL 62.4 million on the date of the transaction. The buyer made an initial payment of BRL 17.7 million. The contract establishes a schedule for the transfer of ownership and revenue is recognized in four stages. The first was completed on November 14, 2022, and a revenue of BRL 20 million was recognized. The other phases are scheduled for July of each year until 2025. This fraction of the field was valued on the books at BRL 17.8 million. After this transaction, a remnant of 5,750 hectares of said farm remains in the hands of Brasilagro.

Sale of farm “Araucaria” (Brazil)

In March 2023, Brasilagro signed two contracts for the sale of the remaining surface of 5,517 hectares (4,011 arable hectares) of its Araucaria farm, located in the municipality of Mineiros, State of Goiás, Brazil.

The first transaction was carried out on March 28, 2023, selling 5,185 hectares (3,796 arable hectares) at a value of 790 soybeans bags per arable hectare, equivalent to BRL 409.3 million as of the date of the transaction. The amounts will be paid in 7 instalments, the first on July 30, 2023, and the second on August 16, 2023, and the balance are scheduled for March 1 of each year until 2028. The domain transfer was made on June 15, 2023.

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The second transaction was carried out on March 29, 2023, in which 332 hectares (215 arable hectares) were sold for a value of 297 soybeans bags per arable hectare, equivalent to BRL 8.5 million on the date of the transaction. The amounts will be paid in 5 instalments, of which the first was collected on April 14, 2023, and the others are scheduled for March 30 of each year until 2027. The domain transfer was made on May 31, 2023.

Sale of fraction of farm “Jatoba VII” (Paraguay)

On June 29, 2023, BrasilAgro completed the sale of 4,408 hectares (3,202 arable hectares) of the “Jatobá VII” farm, located in the municipality of Jaborandi - Bahia. The sale value was BRL 121.6 million (equivalent to 952,815 soybean bags). Payments will be in BRL and made in 7 annual instalments, making the first of them at the time of signing the contract. The remaining instalments are scheduled for July 31 of each year until 2029.

Farm purchase - Los Sauces

On June 30, 2023, Cresud signed the deed for the acquisition and obtained control of the 1,250-hectare “Los Sauces” farm (1,200 arable agricultural hectares) located in the department of Conhello, province of La Pampa. The purchase price was USD 4.5 million. As of the date of these Annual Report, there is a pending balance of USD 2.7 million to be paid in three installments, the first for USD 1.3 million payable on April 30, 2024, the second for USD 0.7 million on December 20, 2024 and the third for USD 0.7 million on December 20, 2025.

Urban property business and investments

“261 Della Paolera” floors sales

On August 17, 2022, IRSA sold and transferred one floor of the tower “261 Della Paolera” for a total leasable area of approximately 1,184 square meters and 8 parking spaces located in the building. The transaction price was approximately USD 12.6 million (USD/square meters 10,600), which has already been paid.

On February 28, 2023, the deed for the sale of 2 floors with a total of 2,394 square meters, 18 parking spaces, and 4 complementary units of the aforementioned building was signed. The transaction price was USD 22.5 million, which has already been paid.

On March 28, 2023, the deed for the sale of 5 floors with a total of 5,922 square meters, 49 parking spaces, and 10 complementary units of the same building was signed. The transaction price was USD 58.7 million, which had already been paid.

For information see “Recent Developments—IRSA’s Recent Developments—261 Della Paolera floors sales”. 

Barter transaction Córdoba

On August 18, 2022, the transfer of ownership was made as an exchange of the Property “Lot 16” located in the province of Córdoba. The price of the transaction was USD 2 million, and in exchange, the client assumed the commitment and the obligation to transfer, under the horizontal property regime, future real estate which will consist of functional units (apartments) and complementary units (storage rooms). The construction and completion of this real estate will be at the client’s sole expense.

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Zetol - Sell of plot and Carrasco Boating Trust interest

On November 23, 2022, Zetol, subsidiary of Liveck S.A., sold the property number 46,931 located in Ciudad de la Costa, department of Canelones, to the Boating Trust for an amount of USD 8 million. The form of payment was the equivalent of USD 6 million in units and USD 2 million remains as an account receivable.

The units were delivered to the Maneiro family as partial cancellation of the debt that Liveck maintains with them for the purchase of the shares of Zetol.

Also, on the same date, a novation agreement was entered into between Zetol and the Carrasco Boating Trust, replacing the receivable of USD 2 million that Zetol had for the sale of the plot, becoming trustor and beneficiary of the Carrasco Boating Trust that will carry out the real estate development. As a result, Zetol has the right to receive the net proceeds from the sale of units, equivalent to 791.7 square meters.

Purchase of property on Paseo Colón Avenue

The Company purchased by public auction from the GCBA, a property located at 245 Paseo Colón Avenue and 12 parking spaces located at 275 Paseo Colón Avenue. The property, with potential for mixed uses, has 13 stories of offices space in a covered area of approximately 13,700 sqm and an underground parking area. The purchase price was ARS 1,435 million, which was paid in full. On March 7, 2023, the transfer deed of ownership was signed.

On May 29, 2023, the title transfer deed was signed and simultaneously the Company signed a bailment agreement with GCBA, which will maintain possession of the property free of charge for a period of 18 months (with the option to require a 6-month extension with a lease agreement), in accordance with the conditions agreed upon in the auction.

Purchase of We Are Appa´s common-shares

On June 22, 2023, IRSA purchased 5.04% of the common shares of We Are Appa for a purchase price of USD 115,000, which is equivalent to ARS 55.3 million. As a result, IRSA's holding in We Are Appa increased to 98.67% of the share capital.

Barter transaction Conil

On June 27, 2023, the barter transaction was signed with Fideicomiso Esquina Guemes, which received 2 commercial premises, 2 apartments units and 4 parking spaces of the property located at Avenida General Güemes 898, Avellaneda district, province of Buenos Aires, which they were classified as “trading properties”. Likewise, a partial amendment of the barter transaction contract was signed, with which the parcel of land initially alloted is reincorporated.

Barter transaction Air Space Coto “Tower 2”

On June 30, 2023, in compliance with the barter transaction entered into in June 2016 with Abasto Twins S.A., the assignment of a functional parking space and the aerial right to raise of the “Tower 2 of  Coto Abasto” for a price of USD 3 million was signed, for which the sum of USD 15,250 was received in cash, and as non-cash consideration, the obligation to receive at least 29 functional units of the future tower, representing the equivalent of 20% of the square meters of the plans approved by the Government of the City of Buenos Aires, for the construction of the tower, with a minimum insured of 1,639 square meters.

For information of significant acquisitions, dispositions and development of business after June 30, 2023, please see “Recent Developments”.

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Recent Developments

Cresud’s Recent Developments

General Ordinary and Extraordinary Shareholders’ Meeting

On September 5, 2023, we informed that our Board of Directors had resolved to call a General Ordinary and Extraordinary Shareholders’ Meeting, which was held on October 5, 2023, resolving the following:

1. Appointment of two shareholders to sign the meeting’s minutes.

2. Approval of the documents contemplated in section 234, paragraph 1, of LGS for the fiscal year ended June 30, 2023.

3. Approval of the allocation of the net income for the fiscal year as follows: (i) ARS 2,141,753,578.64 to the Legal Reserve, which sum, upon being adjusted, amounts to ARS 2,561,020,945.02 in accordance with the laws in force and, (ii) the balance of ARS 40,693,317,994.15, which sum, adjusted as of the date of this meeting, amounts to ARS 48,659,397,955.44, to the distribution of a dividend to the shareholders in proportion to their shareholding interests, payable (a) in cash, in the amount of ARS 22,000,000,000; (b) in kind, that is in shares issued by IRSA owned by the Company and for an amount of 22,090,627 shares of a par value of ARS 10.00, which amount was adjusted for inflation following the distribution of fully paid-up shares and the change in the par value, by means of an exchange ratio whereby each share of ARS 1.00 par value was equal to 0.90780451408 of ARS 10.00 par value, as of the closing exchange rate prevailing on October 4, 2023 of ARS 644.75 per share of IRSA; (iii) the balance in the amount of ARS 12,416,466,197.19 to set up a Reserve for future dividends, delegating powers to the Board of Directors to allocate the amounts to such intended use and (iv) by reason of the changes resulting from adjustments made, to modify and submit to the CNV the Allocations to Directors updated table, as set forth in Chapter III, Article I, section 3 of the CNV Rules (2013 Revision).

4. Approval of the Board of Directors´ performance for the fiscal year ended June 30, 2023, regarding the duties discharged by each one of its members and those discharged by the regular directors also performing tasks as members of the Audit and Executive Committees formed within the Board, during the fiscal year ended June 30, 2023.

5. Approval of the Supervisory Committee´s performance for the fiscal year ended June 30, 2023.

6. Approval of: (i) the compensation payable to the Company´s Board of Directors, in the aggregate amount of ARS 129,128,606 (one hundred twenty-nine million one hundred twenty-eight thousand six hundred and six Pesos) for the fiscal year ended June 30, 2023, for technical and administrative duties discharged by the directors, which compensation is commensurate with the reasonableness standards governing remunerations for the performance of executive tasks and has taken into account the Board members´ technical and operating skills and capabilities and their business expertise together with the commitment with their duties, along with comparable market criteria for companies of similar standing, all the foregoing in accordance with the corporate governance practices set forth in the Corporate Governance Code; and (ii) the delegation of authority to the Board of Directors for it to (a) proceed with the allocation and distribution thereof in a timely manner in accordance with the specific tasks performed in due course by its members; (b) to make advance payments of monthly fees subject to consideration by the ensuing Ordinary Shareholders´ Meeting.

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7. Approval of payment to the Supervisory Committee for duties discharged in the fiscal year ended June 30, 2023, of the aggregate amount of ARS 8,450,000, and to delegate authority to the Supervisory Committee to make the individual allocation of the stated amount.

8. Approval of: (i) the number of regular directors should remain unchanged at 12 and that the number of alternate directors should be fixed at 5; (ii) the appointment of Messrs. Eduardo Sergio Elsztain, Saúl Zang and Alejandro Gustavo Casaretto and Mrs. Mariana Renata Carmona as Regular Directors should be renewed for a term of three fiscal years, that is, until June 30, 2026 and (iii) the appointment of Mr. Eduardo Ohan Kalpakian as Alternate Director should be renewed for a term of three fiscal years, that is, until June 30, 2026. It was put on record that elected regular directors, Messrs. Eduardo Sergio Elsztain, Saúl Zang, Alejandro Gustavo Casaretto and Mrs. Mariana Renata Carmona and the elected alternate director Mr. Eduardo Ohan Kalpakian, are non-independent directors pursuant to the provisions of Section 11, Article III, Chapter II of the CNV Rules (2013 Revision).

9. Approval of: (i) the appointment of Messrs. José Daniel Abelovich and Marcelo Héctor Fuxman and Ms. Noemí Ivonne Cohn as Regular members of the Supervisory Committee and Mr. Roberto Daniel Murmis and Mmes. Cynthia Deokmellian and Paula Sotelo as Alternate members of the Supervisory Committee for a term of one fiscal year, putting on record that, pursuant to the CNV rules, the nominees act in their independent capacity and that they have provided remunerated professional assistance in connection with companies under Section 33 of the AGCL. Furthermore, it was motioned to authorize the proposed members of the Supervisory Committee to discharge duties in such capacity in other companies pursuant to the provisions of Sections 273 and 298 of the AGCL.

10. Approval of the appointment as certifying accountants for the fiscal year 2023/2024 of Price Waterhouse & Co. S.R.L. member of PricewaterhouseCoopers International Limited, acting through Mr. Carlos Brondo as Regular Independent Auditor and Mr. Andrés Suarez as Alternate Independent Auditor.

11. Approval of the compensation payable to the certifying accountants for duties discharged in the fiscal year ended June 30, 2023 in the amount of ARS 78,993,550.

12. Approval of: (i) the reversal of the allocation of 5,676,603 treasury shares for the implementation of an incentive program intended for employees, management members and directors of the Company and (ii) the distribution of the aggregate amount of 5,791,355  treasury shares of the Company including the number of shares specified in paragraph (i) above, to the Shareholders in proportion to their holdings and (iii) the grant of authorization to the Board of Directors to implement the distribution of the above stated shares.

13. Appointment of attorneys and authorizations for the registration of procedures related to this meeting by the CNV, BYMA, Caja de Valores and the IGJ.

Share repurchase program. Modification of Maximum Price.

On September 6, 2023, we informed that on this date, the Board of Directors of the Company, by virtue of the powers granted at the meeting of the Board held on November 11, 2022, in connection with the creation of the share repurchase program for up to ARS 4,000,000,000 (four thousand million Pesos) pursuant to the terms of Section 64 of Law 26,831 and the Rules of the CNV, has resolved to modify the acquisition price of the Company’s own shares establishing a maximum value of USD 9.0 (nine US dollars) per ADS and up to a maximum value in Pesos of ARS 720 (seven hundred and twenty Pesos) per share, maintaining the remaining terms and conditions duly communicated. 

The Company also informed that it proceeded with the repurchase of common shares, and a total of 12,670,512 common shares were repurchased, representing approximately 78.51% of the approved program.

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Exercise of Warrants

On September 29, 2023, we reported that between September 17, 2023, and September 25, 2023, certain holders of warrants had exercised their right to acquire additional shares of the Company. As a result, a total of 64,162 common shares of the Company were issued, with a face value of ARS 1, and the company collected USD 32,311.98.

After the exercise of these warrants, the number of shares and the capital stock of the Company increased from 593,389,883 to 593,454,045, and the number of outstanding warrants decreased from 88,293,771 to 88,236,618.

Likewise, the exercise of the warrants has been carried out in accordance with the terms and conditions established in the issuance prospectus dated February 12, 2021, and complementary notices regarding the offer made by the Company of 90,000,000 ordinary book-entry shares and 90,000,000 warrants.

Cash dividend payment

In accordance with the resolution of the with the resolution of the Ordinary and Extraordinary General Shareholders’ Meeting dated October 5, 2023 and the Board of Directors meeting, due to the delegations made by the Shareholders Meeting, a cash dividend for the sum of ARS 22,000,000,000 and a dividend in kind through the delivery of 22,090,627 shares of IRSA owned by the Company, according to the price of said shares as of October 4, 2023 which amounts to the sum of ARS 644.75, charged to the fiscal year ended June 30, 2023, equivalent to 3743.644234382% for the cash dividend and 2423.657698% for the dividend in kind, of the share capital with the right to collect represented by a total of 587,662,679 shares, will be made available to the shareholders as of October 12, 2023 or on the later date resulting from the application of the regulations that operate in the jurisdictions where the Company’s shares are listed.

 The amount per share (nominal value ARS 1) will be ARS 37.43644234382 and the amount for each American Depositary Shares (“ADS”) will be ARS 374.3644234382, and the dividend in kind will be delivered at a ratio of: 0.03759065836 IRSA shares per CRESUD share and 0.3759065836 IRSA shares per CRESUD ADR, payable to all shareholders that have such quality as of October 11, 2023, according to the registry held by Caja de Valores.

 Payment will be made through Caja de Valores, at its address at 25 de Mayo 362, Ciudad Autónoma de Buenos Aires, from 10 a.m. to 3 p.m. 

 Holders of ADSs will receive the amounts corresponding to the dividend through The Bank of New York Mellon, depositary of said certificates as of the date resulting from the application of the regulations in force in the jurisdiction where the Company’s ADSs are listed.

 It is noted that the distribution of dividends is subject to the 7% withholding tax established in article 97 of the Income Tax Law (T.O. Decree 824/2019 and mod.). Likewise, and based on the provisions of article 6 of RG AFIP 4478/2019, the withholding of the payment of dividends in cash and in kind will be deducted directly from the cash dividend.

Distribution of own shares

In accordance with the resolution of the Ordinary and Extraordinary General Shareholders Meeting held on October 5, 2023 and the provisions of the Board of Directors meeting on the same date, it has been arranged to distribute the company’s own treasury shares for a total of 5,791,355 ordinary shares of 1 vote per share and VN ARS 1.00 each, according to the following conditions: (i) Process start date: October 12, 2023; (ii) Payment address: Caja de Valores 25 de Mayo 362, City of Buenos Aires; and (iii) Time: Monday to Friday from 10:00 a.m. to 3:00 p.m. (Buenos Aires time).

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The distribution of the shares constitutes 0.0098548967 shares per ordinary share and 0.098548967 per ADS, a percentage of 0.98548967% of the stock capital of ARS 587,662,679, net of treasury shares.

The fractions of shares will be settled in cash in accordance with the regulations of the ByMA on fractions less than 1 share or 1 ADS. It is recorded that the shares mentioned above will be received in the respective proportion by the holders of outstanding shares of the company as of October 11, 2023. 

Los Pozos fraction sale

On October 6. 2023, the company has informed that it has sold a 4,262 hectares fraction of land reserve with productive potential of “Los Pozos” farm, keeping the ownership of approximately 235,300 hectares of the property.

The total amount of the operation was set at USD 2.3 million, of which USD 0.9 million has been already paid. The remaining balance of USD 1.4 million, is guaranteed with a mortgage on the property, and will be paid in 2 installments, the first of USD 0.27 million in September 2024 and the remainder of USD 1.13 million in September 2025.

The book value of the fraction sold was ARS 119.2 million and the gain from the operation, which will be recognized in the company’s financial statements for the second quarter of fiscal period 2024, amounts to the approximate sum of ARS 722.9 million.

IRSA’s Recent Developments

Suipacha 652/664 building sale

On July 24, 2023, IRSA announced that it sold the entire “Maple” building, which is located at Suipacha 652/664, Microcentro, Autonomous City of Buenos Aires.

The B-class building, acquired by IRSA in 1991, features 7 floors of office space and 62 parking lots and has a gross leasable area of 11,465 sqm, which were vacant at the time of the transaction.

The transaction price was USD 6.75 million, of which USD 3 million has been collected in cash, USD 750,000 through the delivery of 3 functional units in a building owned by the buyer, with a 30-month non-onerous lease contract, and the remaining balance of USD 3 million will be paid as follows: (i) USD 2.5 million in 10 semiannual, equal and consecutive installments of USD 250,000, the first installment maturing 24 months after the signing of the deed, with an annual interest rate of 5%; and (ii) USD 500,000 through the provision of services by the buyer.

This sale is part of IRSA’s strategy to consolidate a premium office portfolio in the City of Buenos Aires.

261 Della Paolera floors sales

On August 9, 2023, IRSA informed that it has sold and transferred one floor of the tower “261 Della Paolera” located in the Catalinas district of the Autonomous City of Buenos Aires for a total leasable area of approximately 1,184 sqm and 10 parking lots located in the building.

The transaction price was approximately USD 12.1 million (USD/sqm 10,248), which had already been paid.

The financial result of this transaction will be recognized in IRSA’s financial statements for the first quarter of fiscal year 2024.

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On October 5, 2023, IRSA informed that it has sold and transferred two floors of the tower “261 Della Paolera” located in the Catalinas district of the Autonomous City of Buenos Aires for a total leasable area of approximately 2,395 sqm and 18 parking lots located in the building.

The transaction price was approximately USD (MEP) 14.9 million (USD/sqm 6,300), which had already been paid.

After this transaction, IRSA retains its rights for 4 floors of the building with an approximate leasable area of 4,937 sqm, in addition to parking lots and other complementary spaces.

The financial result of this transaction will be recognized in IRSA’s financial statements for the second quarter of fiscal year 2024.

Sale of Quality Invest S.A.

On August 31, 2023, IRSA informed that they have sold and transferred 100% of their participation in Quality Invest S.A. representing 50% of the capital stock.

Quality Invest S.A. is the owner of the property located at Avenida San Martín 601/611/645 in the city of San Martín, Province of Buenos Aires, of 159,996 sqm with a current covered surface of 80,027 sqm, which was the headquarters of Nobleza Piccardo’s industrial plant until 2011.

The transaction price was USD 22.9 million, of which USD 21.5 million have been collected together with the transfer of the shares and the remaining amount of USD 1.4 million will be collected after 3 years, bearing interest at 7% per annum.

General Ordinary Shareholders’ Meeting

On September 5, 2023, IRSA informed that their Board of Directors had resolved to call a General Ordinary and Extraordinary Shareholders’ Meeting to be held on October 5, 2023, with the following agenda:

1. Appointment of two shareholders to sign the meeting’s minutes.

2. Approval of the documents contemplated in section 234, paragraph 1, of LGS for the fiscal year ended June 30, 2023.

3. Approval of the allocation of net income for the fiscal year ended June 30, 2023 for ARS 57,350,858,685.45, as follows: (I) to the legal reserve for ARS 2,867,542,934.27, which sum, upon being adjusted, amounts to ARS 3,428,890,040.70, in accordance with the laws in force and, II) the balance of ARS 54,483,315,751.18, which sum, upon being adjusted, amounts to ARS 65,148,910,773.25, to the distribution of a dividend to the Shareholders in proportion to their shareholding interests, payable in cash, in the amount of ARS 64,000,000,000.  Taking into account that the adjusted income suffices to make payments of the proposed dividends, it was approved, by majority vote, (i) to allocate the balance of the adjusted income for the fiscal year, that is, the amount of ARS 1,148,910,773.25 to the Reserve for distribution of future dividends and (ii) not to reverse the reserve for distribution of future dividends or the Special Reserve in the amounts originally recommended in this item on the Agenda.

4. Approval of the IRSA’s Board of Directors’ performance for the fiscal year ended June 30, 2023, regarding the duties discharged by each one of its members and those discharged by the regular directors also performing tasks as members of the IRSA’s Audit and Executive Committees formed within the Board, during the fiscal year ended June 30, 2023.

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5. Approval of the IRSA‘s Supervisory Committee’s performance for the fiscal year ended June 30, 2023.

6. Approval of: (I) the compensation payable to IRSA’s Board of Directors, in the aggregate amount of ARS 9,050,000,000 for the fiscal year ended June 30, 2023, for technical and administrative duties discharged by the directors, which compensation is commensurate with the reasonableness standards governing remunerations for the performance of executive tasks and has taken into account the IRSA ‘s Board members’ technical and operating skills and capabilities and their business expertise together with the commitment with their duties and, in the particular year under consideration, the successful outcome of their performance in connection with the debt refinancing and repayment process and the IRSA’s financial management, along with comparable market criteria for companies of similar standing, all the foregoing in accordance with the corporate governance practices set forth in the Corporate Governance Code; and (II) the delegation of authority to the Board of Directors for it to (i) proceed with the allocation and distribution thereof in a timely manner in accordance with the specific tasks performed in due course by its members; (ii) based on the changes in the compensation amounts recommended in this item on the agenda, to make all adjustments as may be required in the Allocations to Directors table, as set forth in Chapter III, Article I, section 3 of the CNV Rules (2013 Revision) and timely submit same before the CNV and (iii) to make advance payments of monthly fees subject to consideration by the ensuing Ordinary Shareholders´ Meeting.

7. Approval of payment to the IRSA’s Supervisory Committee for duties discharged in the fiscal year ended June 30, 2023, of the aggregate amount of ARS 8,450,000 (eight million four hundred and fifty thousand Pesos), and to delegate authority to the Supervisory Committee to make the individual allocation of the stated amount.

8. Approval of: (i) the number of regular directors should remain unchanged at 12 (twelve) and that the number of alternate directors should be fixed at 3 (three); (ii) the appointment of Messrs. Fernando Adrián Elsztain, Daniel Ricardo Elsztain, Oscar Pedro Bergotto and Nicolás Bendersky as Regular Directors should be renewed for a term of three fiscal years, that is, until June 30, 2026 and (iii) the appointment of Mr. Iair Manuel Elsztain as Alternate Director should be renewed for a term of three fiscal years, that is, until June 30, 2026. It was put on record that proposed regular directors, Messrs. Fernando Adrián Elsztain, Daniel Ricardo Elsztain and Nicolás Bendersky and alternate director Mr. Iair Manuel Elsztain, are non-independent directors whereas proposed director Mr. Oscar Pedro is an independent director pursuant to the provisions of Section 11, Article III, Chapter II of the CNV Rules (2013 Revision).

9. Approval of: (i) the appointment of Messrs. José Daniel Abelovich and Marcelo Héctor Fuxman and Ms. Noemí Ivonne Cohn as Regular members of the Supervisory Committee and Mr. Roberto Daniel Murmis and Mmes. Cynthia Deokmellian and Paula Sotelo as Alternate members of the Supervisory Committee for a term of one fiscal year, putting on record that, pursuant to the CNV rules, the nominees act in their independent capacity and that they have provided remunerated professional assistance in connection with companies under Section 33 of the AGCL and (ii) that authorization be granted to the proposed members of the Supervisory Committee to discharge duties in such capacity in other companies pursuant to the provisions of Sections 273 and 298 of the AGCL.

10. Approval of the appointment as certifying accountants for the fiscal year 2023/2024 of the following firms (a) Price Waterhouse & Co. S.R.L. member of PricewaterhouseCoopers International Limited, acting through Mr. Carlos Brondo as Regular Independent Auditor and Mr. Andrés Suarez as Alternate Independent Auditor; and (b) Abelovich Polano & Asociados, acting through Ms. Noemi Ivonne Cohn as Regular Independent Auditor and Messrs. José Daniel Abelovich and Marcelo Héctor Fuxman as Alternate Independent Auditors.

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11. Approval of the compensation payable to the certifying accountants for duties discharged in the fiscal year ended June 30, 2023 in the amount of ARS 147,080,905.

12. Approval of: (i) the reversal of the allocation of 9,419,623 treasury shares of ARS 1.00 par value for the implementation of an incentive program intended for employees, management members and directors of the Company and (ii) the distribution of the aggregate amount of 13,928,410 treasury shares of the Company with a par value of ARS 1.00 that considering the distribution of fully paid-up shares and the change in the par value and that each share of ARS 1.00 par value was equal to 0.90780451408 shares of ARS 10.00 par value- after being adjusted as mentioned above, is equal to 12,644,273 shares of ARS 10.00 par value, including the number of shares specified in paragraph (i) above, to the Shareholders in proportion to their holdings and (ii) the grant of authorization to the Board of Directors to implement the distribution of the above stated shares.

13. Approval of the extension of the Program for the issuance of simple, non-convertible, unconditional notes, secured or unsecured, subordinated or senior, to be paid in in cash and/or in kind for a maximum outstanding amount of up to USD 750,000,000 (seven hundred fifty million dollars) or its equivalent in other currencies or value units, for an additional term of five years to be computed since the expiration of the term, that is, since March 20, 2024, or such longer term as permitted by the CNV Rules.

14. Approval of the: (I) the delegation to the Board of Directors of the broadest powers to resolve upon the proceedings for and the implementation of the extension of the Program; (II) the renewal of the delegation to the Board of Directors, as resolved at the Shareholders’ Meetings held on October 31, 2017, of the broadest powers to: (a) determine the terms and conditions of the Program, pursuant to the provisions of the Argentine Negotiable Obligations Law No. 23,576, as amended and regulated, including the powers to determine the amount thereof within the maximum amounts approved by the Shareholders’ Meeting; (b) approve and execute all such contracts and documents as may be related to the Program and the issuance of the various series and/or tranches of notes thereunder; and (c) determine the time and currency of issuance, term, price, payment method and conditions, type and rate of interest, use of proceeds and any further terms and conditions applicable to the various series and/or tranches of notes issued under the Program; (III) that the Board be granted authorization to (a) approve, execute, grant and/or deliver any agreement, contract, document, instrument and/or security related to the proceedings for and/or implementation of the extension of the program and/or the increase or decrease of its amount and/or the issuance of the various series and/or tranches of notes thereunder, as may be deemed necessary by the Board of Directors or as may be requested by the Argentine Securities Commission, any securities markets in Argentina and/or abroad, Caja de Valores and/or any equivalent agencies; (b) apply for and secure authorization by the Argentine Securities Commission to carry out the public offering of such notes; (c) as applicable, apply for and secure before any competent authority or authorized securities market of Argentina and/or abroad the authorization for listing and trading such notes, and (d) carry out any proceedings, actions, filings and/or applications related to the program and/or the extension thereof and/or the increase and/or decrease of its amount and/or the issuance of the various series and/or tranches of notes under the program; and (IV) that the Board of Directors be granted authorization to sub-delegate the powers and authorizations referred to in items (I), (II) and (III) above to one or more of its members, Company´s managers or such individuals as may be appointed for such purposes in compliance with the laws in force.

15. Approval of the appointment of attorneys and authorizations for the registration of procedures related to this meeting by the CNV, BYMA and the IGJ.

Share repurchase program. Modification of Maximum Price.

On September 5, 2023, IRSA informed that on September 5, 2023, its board of directors, by virtue of the powers granted at the meeting of the board held on June 15, 2023, in connection with the creation of the share repurchase program for up to ARS 5,000,000,000 (five billion Pesos) pursuant to the terms of Section 64 of Law 26,831 and the Rules of the CNV, had resolved to modify the acquisition price of IRSA’s own shares establishing a maximum value of USD 9.0 (nine U.S. dollars) per GDS and up to a maximum value in Pesos of ARS 720 (seven hundred and twenty Pesos) per share, maintaining the remaining terms and conditions duly communicated. 

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Change in the total amount of shares and its nominal value

On September 13, 2023, IRSA informed that its shareholders’ meeting held on April 27, 2023 approved: (i) an increase in the capital stock in the amount of ARS 6,552,405,000, through the partial capitalization of the Issue Premium account, resulting in the issuance of 6,552,405,000 common shares, with a par value of ARS 1.00 (one Peso) and with the right to one vote per share; and (ii) change in the nominal value of the common shares from ARS 1.00 to ARS 10.00 each and entitled to one (1) vote per share.

Having obtained the authorizations from the CNV and from the BASE, IRSA that announced all shareholders who had such quality as of September 19, 2023, according to the registry maintained by Caja de Valores, and effective as of September 20, 2023, the shares distribution and the change in nominal value was made simultaneously and the entry of the change of 811,137,457 book-entry common shares, each with a nominal value of ARS 1.00 and one vote per share, for the amount of 736,354,245 book-entry common shares, each with a nominal value of ARS 10.00 and one vote per share, consequently, a reverse split of IRSA’s shares shall be carried out, where every 1 (one) old share with a nominal value of ARS 1.00 shall be exchanged for 0.907804514 new shares with a nominal value ARS 10.00. The new shares distributed due to the described capitalization have economic rights under equal conditions with those that are currently in circulation.

Also, regarding the GDS holders, IRSA instructed to the GDS Depositary to process the reverse split, at the same rate as mentioned above for the ADR program, effective October 3, 2023.

Regarding the shareholders who, because of the entry in the Scriptural Registry, have fractions of common shares with a nominal value of ARS 10.00 and one vote per share, they were settled in cash in accordance with the listing regulations of ByMA. Regarding the shareholders who, due to the exchange of shares, did not reach at least one share with a nominal value of ARS 10.00, the necessary amount was assigned to them until the nominal value of ARS 10.00 is completed.

IRSA’s share capital after these transactions amount to ARS 7,363,542,450 represented by 736,354,245 book-entry common shares with a nominal value of ARS 10.00 each and one vote per share.

Likewise, the BASE has been requested to change the modality of the negotiation of the shares representing the share capital. Specifically, the negotiation price will be registered per share instead of being negotiated by ARS of nominal value, given that the change in nominal value, and the issuance of shares resulting from the capitalization, would produce a substantial downward effect on the share price.

This capitalization and change in the nominal value of the shares do not modify the economic values of the holdings or the percentage of participation in the share capital.

Warrants - Modification on Ratio and Price

On September 14, 2023, IRSA reported that as a result of (i) an increase in the capital stock through the partial capitalization of the Issue Premium account; and (ii) an amendment to section seven of its bylaws, changing the nominal value of the common shares from ARS 1 (one Peso) to ARS 10 (ten Pesos) each and entitled to one (1) vote per share, which was informed in September 13, 2023, where the outstanding shares will change from 811,137,457 common shares, with a nominal value of ARS 1.00 each and one vote per share, to the amount of 736,354,245 common shares with a nominal value of ARS 10.00 each and one vote per share, as it was approved by the shareholders meeting held on April 27, 2023. The terms and conditions of the outstanding warrants for common shares of the Company have been modified as follows: 

Amount of shares to be issued per warrant: (i) ratio previous to the adjustment: 1.1719 (Nominal Value ARS 1); and (ii) ratio after the adjustment (current): 1.0639 (Nominal Value ARS 10). Warrant exercise price per new share to be issued: (i) price previous to the adjustment: USD 0.3689 (Nominal Value ARS 1); and (ii) price after the adjustment (current): USD 0.4063 (Nominal Value ARS 10). The other terms and conditions of the warrants remain the same.

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Exercise of IRSA’s Warrants

On September 29, 2023, IRSA reported that between September 17, 2023 and September 25, 2023, certain holders of warrants had exercised their right to acquire additional shares pf IRSA. As a result, a total of 63,039 ordinary shares of IRSA will be registered, with a face value of ARS 10.00, and IRSA collected USD 27,246.88.

 After the exercise of these warrants, the number of shares of IRSA increased from 736,354,245 to 736,421,306 with a face value of ARS 10.00, the stock capital increases from 7,363,542,450 to 7,364,213,060, and the new number of outstanding warrants decreased from 79,709,301 to 79,646,262.

 Likewise, the exercise of the warrants has been carried out in accordance with the terms and conditions established in the issuance prospectus dated April 12, 2021, and complementary notices regarding the offer made by IRSA of 80,000,000 ordinary book-entry shares and 80,000,000 warrants.

Cash dividend payment from IRSA

In accordance with the resolution of the Ordinary and Extraordinary General Shareholders’ meeting and the Board of Directors meeting dated October 5, 2023, due to the delegations made by the Shareholders’ Meeting, a cash dividend of ARS 64,000,000,000, charged to the year ended on June 30, 2023, equivalent to 884.687833212% of the stock capital with collection right represented by a total of 723,419,014 shares with a nominal value ARS 10.00, will be made available to IRSA’s shareholders of record as of October 12, 2023, or on the subsequent date resulting from the application of the regulations in the jurisdictions where IRSA’s shares are listed.

The amount per ordinary share (nominal value ARS 10) will be ARS 88.4687833212 and the amount per each Global Depositary Share (GDS) IRSA will be ARS 884.687833212, payable to all shareholders that have such quality as of October 11, 2023, according to the registry held by Caja de Valores.

Payment will be made through Caja de Valores, at its address located at 25 de Mayo 362, City of Buenos Aires, from 10:00 a.m. to 3:00 p.m. (Buenos Aires time).

GDS holders will receive the amounts corresponding to the dividend through The Bank of New York Mellon, which is the depositary of said certificates as of the date resulting from the application of the regulations in force in the jurisdiction where IRSA’s GDSs are listed.

The distribution of dividends is subject to the 7% withholding tax established in section 97 of the Income Tax Law (Decree 824/2019 as amended).

Distribution of IRSA’s shares

In accordance with the resolution of the Ordinary and Extraordinary General Shareholders’ meeting and the Board of Directors meeting held on October 5, 2023, IRSA is expected to distribute 12,644,273 ordinary treasury shares, each of which grants 1 vote per share, and with a face value of ARS 10.00 each, according to the following conditions: (i) process start date: October 12, 2023; (ii) payment address: Caja de Valores 25 de Mayo 362, City of Buenos Aires; and (iii) time of payment: Monday to Friday from 10:00 a.m. to 3:00 p.m. (Buenos Aires time).

The distribution of these shares constitutes 0.01747849138 shares per ordinary share and 0.1747849138 per GDS, a percentage of 1.747849138% of the stock capital of 723,419,014 shares and a face value of ARS 10.00 each, net of treasury shares.

The fractions of shares will be settled in cash in accordance with the regulations of the ByMA S.A. on fractions less than 1 share or 1 GDS. It is recorded that the shares mentioned above will be received in the respective proportion by the holders of record of outstanding shares of the company as of October 11, 2023.

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Repurchase of Own Shares

On October 19, 2023, IRSA reported that it proceeded with the repurchase of common shares, representing approximately 42.23% of the approved program. 

B. Business Overview

General

We are an Argentine company, leader in the agribusiness for more than 80 years. We produce high quality goods, adding value to the Argentine agricultural production chain, with a growing presence in the region through investments in Brazil, Paraguay, and Bolivia.

Currently, we are one of the leading agricultural companies in the region and the only company of the sector whose shares are listed both on the Buenos Aires Stock Exchange (ByMA:CRES) and NASDAQ (NASDAQ:CRESY) with full transparency and responsibility.

Our sector is one of the main engines of the productive, economic, and social development of the country. We have advanced in terms of production, technology, and competitiveness in the agricultural sector, but we still have a lot to do to preserve our natural resources, while feeding a growing population.

We produce oilseed grains and cereals, sugar cane and meat for the world, seeking maximum efficiency in the management of natural resources and optimizing our assets. One of our greatest assets is our people with decades of experience in our company, extensive knowledge of agribusiness and local and regional reality.

Additionally, we participate in the real estate business in Argentina through our subsidiary IRSA (ByMA:IRSA, NYSE:IRS), one of the leading real estate companies in Argentina, dedicated to the country, as well as selective investments outside Argentina.

During the fiscal year ended June 30, 2023 and 2022, we had consolidated revenues of ARS 190,405 million, and ARS 206,634 million, and consolidated (loss) / profit from operation, before financing and taxation, of ARS 23,260 million and ARS 92,773 million, respectively. During the fiscal year ended June 30, 2023 and 2022, our total consolidated assets decreased 6.69% from ARS 1,140,909 million to ARS 1,069,353 million, and our consolidated shareholders’ equity increased 7.15% from ARS 445,799 million to ARS 483,026 million.

Segment information is analyzed based on products and services: (i) agricultural business and (ii) urban properties and investment business.

After the merger of IRSA with IRSA CP, the urban properties and investment business structure is made up of the following five segments: (i) Shopping Malls; (ii) Offices; (iii) Hotels; (iv) Sales and development; and (v) Others.

The “Offices and Other Rental Properties” segment is renamed “Offices” and will exclusively include the results from the company’s six buildings. The other rental properties that were part of this segment were allocated to the “Sales and Developments” segment, which will include the results generated by these assets, as well as those from Land Reserves, Barter Agreements and Properties for Sale. Likewise, the “Others” segment is incorporated, which will group the results from investments in associates and foreign companies that were previously allocated in the “Corporate” and “International” segments. The “Shopping Malls” and “Hotels” segments did not undergo any changes.

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Agricultural Business

Our Agricultural business is further comprised of four reportable segments:

· The “Agricultural production” segment consists of planting, harvesting and sale of crops as wheat, corn, soybeans, cotton and sunflowers; breeding, purchasing and/or fattening of free-range cattle for sale to slaughterhouses and local livestock auction markets; leasing of the Company’s farms to third parties; and planting, harvesting and sale of sugarcane. Our Agricultural production segment had assets of ARS 167,259 million and ARS 149,040 million as of June 30, 2023 and 2022, respectively, representing 79.26% and 75.82% respectively of our agricultural business assets at both dates. Our Agricultural production segment generated loss from operations of (ARS 7,970) million and profit ARS 23,263 million for fiscal years ended June 30, 2023 and 2022, respectively, representing (150.52%) and 51.43%, of our consolidated profit from operations from Agricultural Business for such years, respectively.

The segment “agricultural production” aggregates the crops, cattle, sugarcane and agricultural rental and services activities:

· Our “Crops” activity consists of planting, harvesting and sale of crops as wheat, corn, soybeans, cotton, and sunflowers. The Company is focused on the long-term performance of the land and seeks to maximize the use of the land through crop rotation, the use of technology and techniques. In this way, the type and quantity of harvested crops change in each agricultural campaign. Our Crops activity had assets of ARS 104,979 million and ARS 80,489 million as of June 30, 2023 and 2022, respectively, representing 49.75% and 40.95% of our Agricultural Business assets at such dates, respectively. Our Crops activity generated loss from operations of (ARS 1,252) million and profit ARS 7,975 million for fiscal years ended June 30, 2023 and 2022, respectively, representing (23.64%) and 17.63%, of our consolidated profit from operations from Agricultural Business for such years, respectively.

· Our “Cattle” activity consists of breeding, purchasing and/or fattening of free-range cattle for sale to meat processors and local livestock auction markets. Our Cattle activity had assets of ARS 26,178 million and ARS 27,801 million as of June 30, 2023 and 2022, respectively, representing 12.40% and 14.14% of our agricultural business assets at such dates, respectively. Our Cattle activity generated loss from operations of (ARS 5,518) million and (ARS 126) million for fiscal years ended June 30, 2023 and 2022, respectively, representing (104.21%) and (0.28%), of our consolidated profit from operations from Agricultural Business for such years, respectively.

· Our “Sugarcane” activity consists of planting, harvesting and sale of sugarcane. Our Sugarcane activity had assets of ARS 35,952 million and ARS 40,601 million as of June 30, 2023 and 2022, respectively, representing 17.04% and 20.66% of our agricultural business assets at such dates, respectively. Our Sugarcane activity generated loss from operations of (ARS 1,904) million and profit ARS 14,293 million for fiscal years ended June 30, 2023 and 2022, representing (35.96%) and 31.60% of our consolidated profit from operations from Agricultural Business for such years, respectively.

· Our “Agricultural rentals and Services” activity consists of agricultural services (for example: irrigation) and leasing of the Company’s farms to third parties. Our Agricultural Rentals and Services activity had assets of ARS 150 million and ARS 149 million as of June 30, 2023 and 2022, respectively, representing 0.07% and 0.08% of our agricultural business assets at such dates, respectively. Our Agricultural Rentals and Services activity generated profit from operations of ARS 704 million and ARS 1,121 million for fiscal years ended June 30, 2023 and 2022, respectively, representing 13.30% and 2.48% of our consolidated profit from operations from Agricultural Business for such years, respectively.

· Our “Land transformation and Sales” segment comprises gains from the disposal and development of farmlands activities. Our Land Transformation and Sales segment had assets of ARS 26,851 million and ARS 30,069 million as of June 30, 2023 and 2022, respectively, representing 12.72% and 15.30% of our agricultural business assets at such dates, respectively. Our Land Transformation and Sales segment generated profit from operations of ARS 10,029 million and ARS 18,954 million for fiscal years ended June 30, 2023 and 2022, respectively, representing 189.41% and 41.90% of our consolidated profit from operations from Agricultural Business for such years, respectively.

· Our “Other segments” includes, principally, feedlot farming, slaughtering and processing in the meat refrigeration plant, among others. Our Others segment had assets of ARS 16,924 million and ARS 17,452 million as of June 30, 2023 and 2022, respectively, representing 8.02% and 8.88% of our agricultural business assets at such dates, respectively. Our Others activity generated profit from operations of ARS 4,633 million and ARS 4,611 million for fiscal years ended June 30, 2023 and 2022, representing 87.50% and 10.19% of our consolidated profit from operations from Agricultural Business for such years, respectively. The segment “Other segments” aggregate the activities Agro-industrial and Others.

· The “Corporate” segment includes, principally, the corporate expenses related to the agricultural business. Our Corporate segment and corporate activity generated operating loss of (ARS 1,397) million and (ARS 1,593) million for fiscal years ended June 30, 2023 and 2022, representing (26.38%) and (3.52%) of our consolidated profit from operations from Agricultural Business for such years, respectively.

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Urban properties and investment business

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

· Our “Shopping Malls” segment includes the operating results from our portfolio of shopping malls principally comprising of lease and service revenue from tenants. Our Shopping Malls segment had assets of ARS 187,797 million and ARS 198,802 million as of June 30, 2023 and 2022, respectively, representing 29.58% and 28.29% of our operating assets for the urban properties and investment business at such dates, respectively. Our Shopping Malls segment generated operating profit of ARS 23,621 million and ARS 27,036 million for the fiscal year ended June 30, 2023 and 2022, respectively.

· Our “Offices” segment includes the operating results from lease revenues of offices, other rental spaces and other service revenues related to the office activities. Our Offices segment had assets of ARS 121,082 million and ARS 153,485 million as of June 30, 2023 and 2022, respectively, representing 19.07% and 21.84% of our operating assets for the urban properties and investment business at such dates, respectively. Our Offices segment generated an operating loss of (ARS 1,757) million and (ARS 6,463) million for the fiscal year ended June 30, 2023 and 2022, respectively.

· Our “Sales and Developments” segment includes the operating results of the development, maintenance and sales of undeveloped parcels of land and/or trading properties. Real estate sales results are also included. Our Sales and Developments segment had assets of ARS 285,654 million and ARS 311,886 million as of June 30, 2023 and 2022, respectively, representing 44.99% and 44.39% of our operating assets for the urban properties and investment business at such dates, respectively. Our Sales and Developments segment generated an operating loss of (ARS 36,623) million and profit ARS 33,606 million for the fiscal years ended June 30, 2023 and 2022, respectively.

· Our “Hotels” segment includes the operating results of our hotels mainly comprised of room, catering and restaurant revenues. Our Hotels segment had assets of ARS 9,430 million and ARS 9,699 million as of June 30, 2023 and 2022, respectively, representing 1.49% and 1.38% of our operating assets for the urban properties and investment business, respectively. Our Hotels segment generated an operating profit of ARS 2,902 million and ARS 1,505 million for the fiscal years ended June 30, 2023 and 2022, respectively.

· Our “Others” primarily includes the entertainment activity through La Arena S.A. (former ALG Golf Center S.A.), La Rural S.A. and Buenos Aires Convention Center (Concession), We Are Appa, investments in associates such as GCDI (former TGLT S.A.) and the financial activities carried out through BHSA / BACS, as well as other investments in associates for both years. Our Others segment had assets of ARS 30,971 million and ARS 28,793 million as of June 30, 2023 and 2022, respectively, representing 4.88% and 4.10% of our operating assets for the urban properties and investment business, respectively. Our Others segment generating loss of (ARS 7,930) million and profit ARS 216 million for the fiscal years ended June 30, 2023 and 2022, respectively.

COVID-19 pandemic

During 2020 and 2021, the Argentine Government issued a series of preventive measures to contain the spread of Covid-19 and mitigate its impact on the Argentine economy. On March 19, 2020, the Argentine Government declared a nationwide lockdown from March 20, 2020 through March 31, 2020, which was extended several times until November 6, 2020, when the country shifted towards a “social distancing” phase, instead of a strict lockdown. Agriculture activities were declared as essential activities, so the operations were not stopped despite the Covid-19 pandemic.

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As of the date of this annual report, the measures adopted by the Argentine Government regarding Covid-19 are no longer in force.

Since the beginning of fiscal year 2022, and until the date of this Annual Report, IRSA’s shopping malls were fully operational, as well as the office buildings, despite the remote work modality that some tenants continue to apply. Regarding hotels, operating since December 2020, the sector is recovering thanks to domestic tourism and the Argentine Government’s incentives to promote it after the prolonged restrictions on air flows that directly affected the influx of international tourism. 

The Company is closely monitoring the situation and taking all necessary measures to preserve human life and the Company’s businesses.

Agricultural Business

As of June 30, 2023, we owned 27 farms with approximately 616,803 hectares distributed in Argentina, Brazil, Bolivia and Paraguay.

During the fiscal year 2023 we used 101,681 hectares of the land we own for crop production, approximately 66,006 hectares are for cattle production, 85,000 hectares are for sheep production and approximately 28,064 hectares are leased to third parties for crop and cattle production.

The remaining 347,480 hectares of land reserves are primarily natural woodlands. In addition, we have the rights to hold approximately 132,000 hectares of land under concession for a 35-year period that can be extended for another 29 years. Out of this total, we have assigned 22,314 hectares for crop production and 2,604 hectares for cattle production. Also, during the fiscal year ended on June 30, 2023, we leased 99,183 hectares to third parties for crop production and 13,821 hectares for cattle production.

The following table sets forth, at the dates indicated, the amount of land used for each production activity (including owned and leased land, and land under concession):

	2023(1)		2022(1)		2021(1)		2020(1)		2019(1)
Crops (2)		223,178		220,663		224,185		229,070		220,170
Cattle (3)		82,431		78,537		80,835		87,788		95,247
Sheep		85,000		85,000		85,000		85,000		85,000
Land Reserves (4)		464,858		457,711		466,421		463,372		450,882
Own farmlands leased to third parties		28,064		25,103		25,908		23,655		16,100
Total		883,531		867,014		882,349		888,885		867,399

 _______________________

(1)	Includes Brazil, Paraguay, Agro-Uranga S.A at 34.86% and 132,000 hectares in Concession.
(2)	Includes wheat, corn, sunflower, soybean, sorghum and others.
(3)	Breeding and fattening.
(4)	We use part of our land reserves to produce charcoal, rods and fence posts.

Our Principal Business Activities

During the fiscal year ended June 30, 2023, we conducted our operations on 27 owned farms and 100 leased farms.

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The following charts show, for fiscal year 2023, the surface area in operation for each line of business, as well as the hectares held as land reserves:

Agricultural Business

Land Transformation and Sales

Land Acquisitions

We seek to increase our lands portfolio, through the acquisition of large areas of land with high potential for appreciation. We also aim to increase the productivity of the land by applying state-of-the-art technology to improve agricultural yields.

Several important intermediaries, with whom we usually work, bring farmlands available for sale to our attention. The decision to acquire farmlands is based on the assessment of a large number of factors. In addition to the land’s location, we normally carry out an analysis of soil and water, including the quality of the soil and its suitability for our intended use (crops, cattle, or milk production), classify the various sectors of the lot and the prior use of the farmland; analyze the improvements in the property, any easements, rights of way or other variables in relation to the property title; examine satellite photographs of the property (useful in the survey of soil drainage characteristics during the different rain cycles) and detailed comparative data regarding neighboring farms (generally covering a 50-km area). Based on the foregoing factors, we assess the farmland in terms of the sales price compared against the production potential of the land and capital appreciation potential. We consider that competition for the acquisition of farmlands is, in general, limited to small farmers for the acquisition of smaller lots, and that there is scarce competition for the acquisition of bigger lots.

In September 2022, BrasilAgro acquired the “Panamby” farm located in the municipality of Querência in the State of Mato Grosso, Brazil. The property has a total area of 10,844 hectares, of which 5,400 are productive. The acquisition value was BRL 285.6 million (302 bags of soybeans per productive hectare) to be paid in two installments. On June 30, 2023, the company acquired the farm “Los Sauces”, with 1,250 hectares which 1,200 are productive agricultural hectares, located in the department of Conhello, in the province of La Pampa for a value of USD 4.5 million.

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The following table presents, for the years indicated and in real terms, certain information related to the fields acquired during the last 12 fiscal years ended on June 30:

FY	Number of farms acquired		Acquisition value (ARS MM)
2012 - 2016		-		-
2017		1		12,357
2018 - 2019		-		-
2020		1		20,901
2021 - 2022		-		-
2023		2		14,999

Land Sales

Occasionally we sell properties that have reached a considerable valuation to reinvest in new fields with greater potential. We consider the sale of farms based on a number of factors, including the future performance of the farm for continued farming, the availability of other investment opportunities and cyclical factors affecting global farm values.

On November 8, 2022, BrasilAgro completed the sale of a fraction of 863 hectares (498 productive hectares) of the “Morotí” farm located in the State of Boquerón, Paraguay. After this transaction, a remainder of 58,722 hectares of this field remains in possesion of BrasilAgro. The sale value was USD 1.5 million and with an initial payment of USD 748.5 thousand. The remaining will be paid in three equal annual installments. This fraction of the farm was valued on books at BRL 853 thousand and the internal rate of return in dollars achieved was 27.9%.

On November 17, 2022, BrasilAgro sold a fraction of 1,965 hectares (1,423 productive hectares) of the “Rio do Meio” farm located in Correntina, State of Bahia, Brazil, which was acquired in January 2020. After this transaction, the remaining of 5,750 hectares of the establishment remains in portfolio of the Company. The total amount of the transaction was set at BRL 62.4 million and the farm was valued on books at BRL 17.8 million. The internal rate of return in dollars achieved was 42.7%.

In March 2023, Brasilagro signed two contracts for the sale of the remaining surface of 5,517 hectares (4,011 arable hectares) of its Araucaria farm, located in the municipality of Mineiros, State of Goiás, Brazil. The first transaction was carried out on March 28, 2023, selling 5,185 hectares (3,796 arable hectares) at a value of 790 soybeans bags per arable hectare, equivalent to BRL 409.3 million as of the date of the transaction. The second transaction was carried out on March 29, 2023, in which 332 hectares (215 arable hectares) were sold for a value of 297 soybeans bags per arable hectare, equivalent to BRL 8.5 million on the date of the transaction.

In addition, on June 29, 2023, BrasilAgro completed the sale of 4,408 hectares (3,202 arable hectares) of the “Jatobá VII” farm, located in the municipality of Jaborandi - Bahia. The sale value was BRL 121.6 million (equivalent to 952,815 soybean bags).

For more information see: “Significant acquisitions, dispositions and development of business-Agricultural Business”.

Land productivity potential

We believe that our agricultural lands have significant productivity potential and, through the implementation of best agricultural practices and application of our accumulated knowledge and experience, we are able to enhance the value of our agricultural lands.

As of June 30, 2023, we owned land reserves in the region extending over more than 347,499 hectares of our own farmlands that were purchased at very attractive prices. In addition, we have a concession of 107,082 hectares reserved for future development.

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During this fiscal year, we added to our portfolio 7,062 productive hectares in the region: 1,452 hectares in Argentina, 2,784 hectares in Paraguay though BrasilAgro and 2,826 hectares in Brazil though BrasilAgro.

Newly Developed Area	2023		2022
	(hectares)
Argentina		1,452		2,358
Brazil		2,826		3,033
Paraguay		2,784		3,708
Total		7,062		9,099

Results

The following table shows the land transformation segment results for fiscal year 2023, compared to the preceding fiscal year:

	FY 2023			FY 2022			YoY var
							2023 vs. 2022
	(in millions of ARS)						%
Revenues		-			-			-
Costs		(74	)		(103	)		(28.2	)
Gross Loss		(74	)		(103	)		(28.2	)
Net result for changes in fair value of investment properties		(2,370	)		5,304			(144.7	)
Gain from disposition of farmlands		15,026			11,868			26.6
General and administrative expenses		(14	)		(17	)		(17.6	)
Selling expenses		(13	)		(407	)		(96.8	)
Other operating results, net		(2,526	)		2,309			(209.4	)
Profit from operations		10,029			18,954			(47.1	)
Segment profit		10,029			18,954			(47.1	)

Agricultural Production

Production

The following table shows, for the fiscal years indicated, our production volumes measured in tons:

Production Volume (1)	FY2023		FY2022		FY2021		FY2020		FY2019
Corn		291,236		401,104		342,726		433,910		194,352
Soybean		302,430		327,176		339,954		359,055		355,670
Wheat		21,419		35,398		36,594		43,862		37,378
Sorghum		8,978		15,469		26,704		5,895		1,721
Sunflower		9,617		3,493		4,846		2,573		6,428
Cotton		12,343		7,157		8,781		3,519		1,586
Other		6,890		15,068		16,628		8,676		2,103
Total Crops (tons)		652,913		804,865		776,233		857,490		599,238
Sugarcane (tons)		1,640,394		2,187,134		2,364,535		2,360,965		1,999,335
Cattle (tons)		9,743		8,746		9,956		11,783		11,173

 _____________

(1) Includes BrasilAgro. Agro-Uranga S.A. is not included.

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Crops and Sugarcane

Our crop production is mainly based on crops and oilseeds and sugarcane. Our main crops include soybean, wheat, corn, and sunflower. Other crops, such as sorghum and peanut, are sown occasionally and represent only a small percentage of total sown land.

Below is the geographical distribution of our agricultural production for the last four fiscal years:

2023 Season	Argentina		Brazil		Bolivia		Paraguay			Total
	(in tons)
Corn		159,246		117,642		819		13,528			291,235
Soybean		92,423		183,453		16,119		10,435			302,430
Wheat		21,419		8,588		-		3,755			33,762
Sorghum		4,899		-		-		-			4,899
Sunflower		8,710		4,091		-		(12	)		12,789
Cotton		-		752		155		-			907
Other		6,890		-		-		-			6,890
Total Crops and Other		293,587		314,526		17,093		27,706			652,912
Sugarcane		-		1,523,387		117,007		-			1,640,394

2022 Season	Argentina		Brazil		Bolivia		Paraguay		Total
	(in tons)
Corn		259,059		131,155		3,877		7,013		401,104
Soybean		129,276		180,509		17,391		-		327,176
Wheat		34,938		-		460		-		35,398
Sorghum		26,232		292		180		0		26,704
Sunflower		3,493		-		-		-		3,493
Cotton		-		7,157		-		-		7,157
Other		7,178		7,549		5		336		15,068
Total Crops and Other		448,477		327,306		21,733		7,349		804,865
Sugarcane		-		2,083,485		103,649		-		2,187,134

2021 Season	Argentina		Brazil		Bolivia		Paraguay		Total
	(in tons)
Corn		233,900		99,441		7,127		2,258		342,726
Soybean		151,808		168,747		15,907		3,492		339,954
Wheat		36,594		-		-		-		36,594
Sorghum		26,232		292		180		0		26,704
Sunflower		4,846		-		-		-		4,846
Cotton		-		8,781		-		-		8,781
Other		4,120		7,207		-		5,301		16,628
Total Crops and Other		457,500		284,468		23,214		11,051		776,233
Sugarcane		-		2,196,119		168,416		-		2,364,535

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2020 Season	Argentina		Brazil		Bolivia		Paraguay		Total
	(in tons)
Corn		334,821		89,900		4,264		4,925		433,910
Soybean		179,023		157,949		19,608		2,475		359,055
Wheat		43,862		-		-		-		43,862
Bean		-		4,371		-		-		4,371
Sorghum		5,895		-		-		-		5,895
Sunflower		2,573		-		-		-		2,573
Cotton		-		3,519		-		-		3,519
Other		4,133		172		-		-		4,305
Total Crops and Other		570,307		255,911		23,872		7,400		857,490
Sugarcane		-		2,217,714		143,251		-		2,360,965

2019 Season	Argentina		Brazil		Bolivia		Paraguay		Total
	(in tons)
Corn		157,079		29,903		6,143		1,227		194,352
Soybean		177,503		138,506		21,174		18,486		355,670
Wheat		37,378		-		-		-		37,378
Sorghum		1,364		-		357		-		1,721
Sunflower		6,428		-		-		-		6,428
Cotton		-		1,586		-		-		1,586
Other		2,103		-		-		-		2,103
Total Crops and Other		381,855		169,995		27,674		19,713		599,238
Sugarcane		-		1,932,235		67,100		-		1,999,335

Sales

Below is the total volume sold broken down into geographical areas, measured in tons:

Volumen of Sales (3)	FY2023			FY2022			FY2021			FY2020			FY2019
	DM (1)	FM (2)	Total	DM (1)	FM (2)	Total	DM (1)	FM (2)	Total	DM (1)	FM (2)	Total	DM (1)	FM (2)	Total
Corn	184.5	97.6	282.1	295.2	72.5	367.7	286.6	70.0	356.6	325.4	64.1	389.5	191.4	0.2	191.6
Soybean	163.9	114.7	278.6	255.0	128.0	383.0	229.3	56.1	285.4	310.2	110.2	420.4	166.4	101.9	268.3
Wheat	16.9	-	16.9	34.1	-	34.1	31.6	3.1	34.7	43.8	-	43.8	40.5	-	40.5
Sorghum	15.5	-	15.5	30.0	-	30.0	3.4	-	3.4	0.8	-	0.8	0.4	-	0.4
Sunflower	8.3	-	8.3	3.0	-	3.0	4.7	-	4.7	9.3	-	9.3	2.4	-	2.4
Cotton	6.9	-	6.9	3.3	1.3	4.6	7.2	-	7.2	2.4	2.1	4.5	-	-	-
Others	9.5	-	9.5	9.8	1.4	11.2	6.4	1.0	7.4	5.0	-	5.0	1.2	-	1.2
Total Crops (thousands of ton)	405.4	212.3	617.7	630.4	203.2	833.6	569.2	130.2	699.4	696.9	176.4	873.3	402.3	102.1	504.4
Sugarcane (thousands of ton)	1,640.4	-	1,640.4	1,997.3	-	1,997.3	2,169.9	-	2,169.9	2,226.2	-	2,226.2	1,723.0	-	1,723.0

____________

(1)	Volume of sales in domestic market.
(2)	Volume of sales in foreign market.
(3)	Includes BrasilAgro. Excludes Agro-Uranga.

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The following table shows the sown surface area assigned to crop production, classified into own, under lease, under concession and leased to third parties for the fiscal years indicated below, measured in hectares:

	2023 (1)		2022 (1)		2021 (1)		2020 (1)		2019 (1)
Own		113,720		113,452		109,576		105,799		94,062
Under lease		121,713		122,662		130,940		138,867		135,955
Under concession		22,314		22,121		22,771		26,409		18,638
Leased to third parties		27,994		23,778		24,133		13,837		14,325
Total		285,741		282,013		287,420		284,912		262,980

____________ 

(1) Includes double crops, all farms in Argentina, Bolivia, Paraguay and Brazil, and Agro-Uranga (Associated - 34.86%).

	Season
Stock of crops	2023		2022		Variation
	(in tons)				%
Corn		87,470		100,930		(13.3	)
Soybean		61,593		53,394		15.4
Sunflower		3,146		737		326.9
Sorghum		759		5,503		(86.2	)
Wheat		4,979		1,296		284.2
Cotton		9,589		4,064		135.9
Beans		2,915		-		-
Other		8,665		6,286		37.8
Total		179,116		172,210		4.0

We seek to diversify our mix of products and the geographic location of our farmlands to achieve an adequate balance between the two principal risks associated with our activities: weather conditions and the fluctuations in the prices of commodities. In order to reduce such risks, we own and lease land in several areas of Argentina with different climate conditions that allow us to sow a diversified range of products. Our leased land for crops is mostly located in the Pampas region, a favorable area for crop production. The leased farms are previously studied by technicians who analyze future production expectations based on the historic use of the land. The initial duration of lease agreements is typically one or three seasons. Leases of farms for production of crops generally consist of lease agreements with payments based on a fixed amount of Pesos per hectare or sharecropping agreements with payments in kind based on a percentage of the crops obtained or a fixed amount of tons of crops obtained or their equivalent value in Pesos. The principal advantage of leasing farms is that leases do not require us to commit large amounts of capital to the acquisition of lands but allow us to increase our scale in the short term and reduce the risk of inclement weather. The disadvantage of this strategy is that the cost of leasing can increase over time, in part, because increased demand for leased land increases the price of leased land.

In order to increase our production yields, we use, besides state-of-the-art technology, labor control methods which imply the supervision of the seeding’s quality (density, fertilization, distribution, and depth), crop monitoring (determination of natural losses and losses caused by harvester) and verification of bagged crop quality. In this way, we work jointly with our suppliers to achieve the best management of inputs, water and soil.

Wheat seeding takes place from June to August, and harvesting takes place from December to January. Corn, soybean and sunflower are sown from September to December and are harvested from February to August. Crops are available to be sold as commodities after the harvest from December to June and we usually store part of our production until prices recover after the drop that normally takes place during the harvesting season. A major part of production, especially soybean, wheat, corn and sorghum, is sold and delivered to buyers pursuant to agreements in which price conditions are fixed by reference to the market price at a specific time in the future that we determine. The rest of the production is either sold at current market prices or delivered to cover any futures contract that we may have entered into.

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Agro-Uranga S.A.

As of June 30, 2023, our holding in Agro-Uranga was 34.86%. This company optimizes production processes with special emphasis in soil conservation, the application of rational techniques and care of the environment.

At present, with the assistance of its foreign trade team it is seeking to develop new products so as to significantly increase export volumes, encouraged by the world’s growing demand.

Lease of Farmlands

We conduct our business on owned and leased land. Rental payments increase our production costs, as the amounts paid as rent are accounted for as operating expenses. As a result, production costs per hectare of leased land are higher than for the land owned by us.

Our land leasing policy is designed to supplement our expansion strategy, using our liquidity to make production investments in our principal agricultural activities. On the other hand, our leasing strategy provides us with an added level of flexibility in the share of each of our products in total production, providing for greater diversification.

Leases of farms for production of crops consist in lease agreements with payments based on a fixed amount of quintals of grain per arable hectare or sharecropping agreements with payments in kind based on a percentage of the crops obtained or a fixed amount of tons of crops obtained or their equivalent value in Pesos. Leases of farmlands for cattle breeding consist in lease agreements with fixed payments based on a fixed amount of steer kilograms plus a variable sum, assuming there is a positive net margin of the farm.

During the fiscal year 2023, we leased to third parties a total of 100 fields, covering 123,300 hectares, including 59,092 hectares in Brazil through BrasilAgro. Out of the total leased area 99,183 hectares were assigned to agricultural production including double crops, and 13,821 hectares to cattle raising. The properties for agricultural production were leased, primarily, for a fixed price prior to harvest and only a small percentage consisted of sharecropping agreements. 

The following table shows a breakdown of the number of hectares of leased land used for each of our principal production activities:

	2023		2022		2021		2020		2019
Crops (1)		99,183		100,470		107,013		111,001		117,397
Cattle		13,821		12,590		12,635		12,635		14,135

____________

1) Includes sugarcane

Due to the rise in the price of land, we adopted a policy of not validating excessive prices and applying strict criteria upon adopting the decision to lease, selecting those lands with values that would ensure appropriate margins.

Results

The following table shows the Company’s results for fiscal year 2023 for Crops and Sugarcane activities, compared to the preceding fiscal year:

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Crops

	FY 2023			FY 2022			YoY var 2023 vs. 2022
	(in millions of ARS)						%
Revenues		54,570			76,188			(28.4	)
Costs		(48,070	)		(74,433	)		(35.4	)
Initial recognition and changes in the fair value of biological assets and agricultural produce		4,297			26,227			(83.6	)
Changes in the net realizable value of agricultural produce		(2,528	)		(4,301	)		(41.2	)
Gross profit		8,269			23,681			(65.1	)
General and administrative expenses		(3,213	)		(2,962	)		8.5
Selling expenses		(5,862	)		(8,175	)		(28.3	)
Other operating results, net		(280	)		(4,799	)		(94.2	)
(Loss)/Profit from operations		(1,086	)		7,745			-
Share of profit of associates and joint ventures		(166	)		230			-
(Loss)/Profit from Activity		(1,252	)		7,975			-

Sugarcane

	FY 2023			FY 2022			YoY var 2023 vs. 2022
	(in millions of ARS)						%
Revenues		12,177			22,537			(46.0	)
Costs		(12,876	)		(20,814	)		(38.1	)
Initial recognition and changes in the fair value of biological assets and agricultural produce		(375	)		13,551			-
Gross profit		(1,074	)		15,274			-
General and administrative expenses		(824	)		(817	)		0.9
Selling expenses		(464	)		(412	)		12.6
Other operating results, net		458			248			84.7
(Loss)/Profit from operations		(1,904	)		14,293			-
(Loss)/Profit from Activity		(1,904	)		14,293			-

Cattle

Our cattle production involves the breeding and fattening of our own animals. In some cases, if market conditions are favorable, we also purchase and fatten cattle which we sell to slaughterhouses and supermarkets. As of June 2023, our cattle aggregated 75,992 heads, and we had a total surface area of 82,431 hectares of own and leased lands devoted to this business activity. In addition, we have leased to third parties 70 hectares assigned to these activities.

During the fiscal year ended June 30, 2023, our production was 9,743 tons, an 11.4% year-on-year increase. The following table sets forth, for the fiscal years indicated below, the cattle production volumes measured in tons:

	2023		2022		2021		2020		2019
Cattle production(1)		9,743		8,746		9,956		11,783		11,173

____________ 

(1) Production measured in tons of live weight. Production is the sum of the net increases (or decreases) during a given period in live weight of each head of cattle owned by us.

Our cattle breeding activities are carried out with breeding cows and bulls and our fattening activities apply to steer, heifers and calves. Breeding cows calve approximately once a year and their productive lifespan is from six to seven years. Six months after birth, calves are weaned and transferred to fattening pastures. Acquired cattle are directly submitted to the fattening process. Upon starting this process, cattle have been grazing for approximately one year to one and a half year in order to be fattened for sale. Steer and heifers are sold when they have achieved a weight of 380-430 kg and 280-295 kg, respectively, depending on the breed.

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Pregnancy levels, which have been improving over the years, showed satisfactory levels of efficiency notwithstanding the adverse weather conditions. Genetics and herd management are expected to further improve pregnancy levels in the coming years. Reproductive indicators improved thanks to the implementation of technologies, which have included handling techniques and females’ artificial insemination with cattle genetics especially selected for the stock which is purchased from specialized companies in quality semen elaboration for meat production. We use veterinarian products manufactured by leading national and international laboratories. It is important to emphasize the work of a veterinarian advising committee, who is external to us and visits each establishment monthly to control and agree tasks.

Currently, the cattle raising farms are officially registered as export farmlands pursuant to the identification and traceability rules in force in Argentina. Animals are individually identified, thus allowing for the development of special businesses in this area.

Our cattle stock is organized into breeding and fattening activities. The following table shows, for the fiscal years indicated, the number of heads of cattle for each activity:

	2023		2022		2021		2020		2019
Breeding stock		70,635		66,532		58,086		63,073		85,118
Winter grazing stock		5,357		4,798		4,972		10,539		13,993
Total Stock (heads)		75,992		71,330		63,058		73,612		99,111

We seek to improve cattle production and quality in order to obtain a higher price through advanced breeding techniques. We cross breed our stock of Indicus, British (Angus and Hereford) and Continental breeds to obtain herds with characteristics better suited to the pastures in which they graze. To enhance the quality of our herds even further, we plan to continue improving our pastures through permanent investment in seeds and fertilizers, an increase in the watering troughs available in pastures, and the acquisition of round bailers to cut and roll grass for storage purposes.

Our emphasis on improving the quality of our herd also includes the use of animal health-related technologies. We comply with national animal health standards that include laboratory analyses and vaccination aimed at controlling and preventing disease in our herd, particularly FMD.

Direct costs of beef production consist primarily of crops for feeding and dietary supplementation purposes, animal health and payroll costs, among others.

Results

The following table shows cattle activity’s results for fiscal year 2023, compared to the preceding fiscal years:

	FY 2023			FY 2022			YoY var 2023 vs. 2022
	(In millions of ARS)						%
Revenues		5,351			8,022			(33.3	)
Costs		(4,628	)		(6,724	)		(31.2	)
Initial recognition and changes in the fair value of biological assets and agricultural produce		(5,437	)		(535	)		916.3
Changes in the net realizable value of agricultural produce after harvest		(10	)		(6	)		66.7
Gross profit / (loss)		(4,724	)		757			-
General and administrative expenses		(439	)		(440	)		(0.2	)
Selling expenses		(366	)		(423	)		(13.5	)
Other operating results, net		14			(22	)		-
Profit/(loss) from operations		(5,515	)		(128	)		4,208.6
Profit from Joint Ventures		(3	)		2			-
Activity profit/(loss)		(5,518	)		(126	)		4,279.4

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Leases and Agricultural Services

We lease own farms to third parties for agriculture, cattle breeding and seed production, mainly in two types of farms. On the one hand, we lease our farms under irrigation in the Province of San Luis (Santa Bárbara and La Gramilla) to seed producers or enter into production agreements whereby we render production services to seed companies. These farms are ideal for obtaining steady production levels, given the quality of their soil and the weather conditions of the area, along with the even humidity provided by irrigation.

On the other hand, when market conditions are favorable, we lease farms recently put into production after agricultural development. In this way, we manage to reduce our production risk, ensuring fixed rental income until the new farms reach stable productivity levels.

In addition, in this segment we include the irrigation service we provide to our own farms leased to third parties.

Results

The following table shows Leases and Agriculture Services’s results for fiscal year 2023, compared to the preceding fiscal years:

	FY 2023			FY 2022			YoY var 2023 vs. 2022
	(In millions of ARS)						%
Revenues		2,828			3,350			(15.6	)
Costs		(1,700	)		(1,233	)		37.9
Gross profit		1,128			2,117			(46.7	)
General and administrative expenses		(229	)		(662	)		(65.4	)
Selling expenses		(171	)		(386	)		(55.7	)
Other operating results, net		(24	)		52			-
Profit from operations		704			1,121			(37.2	)
Activity profit		704			1,121			(37.2	)

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Others

We include within “Others” the results coming from our investment in FyO.

Results

The following table shows Others activities’ results for fiscal year 2023, compared to preceding fiscal year:

	FY 2023			FY 2022			YoY var 2023 vs. 2022
	(In millions of ARS)						%
Revenues		26,851			28,754			(6.6	)
Costs		(17,114	)		(20,978	)		(18.4	)
Gross profit		9,737			7,776			25.2
General and administrative expenses		(2,377	)		(1,675	)		41.9
Selling expenses		(2,470	)		(2,011	)		22.8
Other operating results, net		612			405			51.1
Profit from operations		5,502			4,495			22.4
Profit from associates		(869	)		116			(849.1	)
Segment Profit		4,633			4,611			0.5

Corporate

This segment includes, principally, the corporative expenses related to the agricultural business.

Results

The following table shows the “Corporate” segment’s results for fiscal year 2023, compared to preceding fiscal years:

	FY 2023			FY 2022			YoY var 2023 vs. 2022
	(In millions of ARS)						%
Revenues		-			-			-
Costs		-			-			-
Gross profit		-			-			-
General and administrative expenses		(1,397	)		(1,593	)		(12.3	)
Loss from operations		(1,397	)		(1,593	)		(12.3	)
Segment loss		(1,397	)		(1,593	)		(12.3	)

Futuros y Opciones.Com S.A. (FyO)

FyO is an Argentine company, leader in the agricultural business since more than 20 years that provides high-quality services, whose mission is to provide specialized agricultural products to feed the world in a responsible and sustainable way, generating opportunities and growth, integrating production services, process, logistics and marketing of special products from the farm to the final consumer. Working with top-level experts and suppliers, ensuring traceability and quality throughout the commercial chain, adding value to the agricultural production chain.

FyO owns 96.37% of Amauta Agro S.A. (AMAUTA), whose objective is to carry out activities of production, export and import, and national and international purchase and sale of raw materials and agricultural products, focused on soil nutrition. AMAUTA owns 100% of Amauta Agro SPA, from Amautagro S.A. and Amauta Agro S.A. These companies are located in Chile, Uruguay and Paraguay, respectively. The purpose of the three companies is the commercialization of consumer products. The company in Uruguay started operating last year and the companies in Chile and Paraguay will start operating in the year 2024.

FyO also owns a 96.37% stake in Fyo Acopio S.A. whose objective is the wholesale consignment of cereals and oilseeds, as well as the storage and conditioning service in the collection plant and the sale of agricultural inputs.

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Agrofy

During 2023, Agrofy has changed its approach to the market strategy, focusing on growth with profitability of the categories and clients defined as main.

Likewise, for the coming months, the implementation of the new version of Agrofy Pay is projected with the development of its own payment platform, seeking that the Transactions and Payments business units are the ones that sustain the growth of Agrofy in the coming years.

Farmland Portfolio

As of June 30, 2023, we owned, together with our subsidiaries, 27 farms, with a total surface area of 616,803 hectares.

The following table sets forth our farm portfolio as of June 30, 2023:

Potential use of farms owned and under concession as of June 30, 2023

Locality

Province

Date of Acquisition

Surface Area (has)

Main Business

Cattle (has)(3)

Sheep (has) (3)

Agriculture (has) (3)

Cattle (2) (Head)

El Recreo

Recreo

Catamarca

May ‘95

12,395

Natural woodlands

Los Pozos (4)

JV González

Salta

May ‘95

239,639

Cattle/ Agriculture/ Natural woodlands

32,697

18,399

37,519

San Nicolás (1)

Rosario

Santa Fe

May ‘97

1,396

Agriculture

146

1,199

Las Playas (1)

Idiazabal

Cordoba

May ‘97

1,497

Agriculture

1,490

La Gramilla/ Santa Bárbara

Merlo

San Luis

Nov ‘97

7,072

Agriculture Under irrigation

5,038

La Suiza

Villa Angela

Chaco

Jun ‘98

26,371

Agriculture/ Cattle

18,100

700

7,581

El Tigre

Trenel

La Pampa

Apr ‘03

8,360

Agriculture

223

6,685

4,806

San Pedro

Concepción de Uruguay

Entre Rios

Sep ‘05

3,584

Agriculture

1,255

2,260

580

8 De Julio/ Estancia Carmen

Puerto Deseado

Santa Cruz

May ‘07/ Sep ‘08

100,911

Sheep

85,000

Cactus Argentina

Villa Mercedes

San Luis

Dec ‘97

171

Natural woodlands

101

Finca Mendoza

Lujan de Cuyo

Mendoza

Mar ‘11

674

Natural woodlands

Establecimiento Mendoza

Finca Lavalle

Mendoza

Nov ‘03

9

Natural woodlands

Los Sauces

Conhello

La Pampa

Jun ‘23

1,250

Agriculture

1,200

Jatoba

Jaborandi/BA

Brazil

Mar ‘07

8,868

Agriculture

7,006

Alto Taquarí

Alto Taquarí/MT

Brazil

Aug ‘07

1,380

Agriculture

809

Chaparral

Correntina/BA

Brazil

Nov ‘07

37,182

Agriculture

24,306

Nova Buriti

Januária/MG

Brazil

Dec ‘07

24,212

Forestry

Preferência

Barreiras/BA

Brazil

Sep ‘08

17,799

Agriculture / Natural woodlands

8,436

11,433

São José

São Raimundo das Mangabeiras/MA

Brazil

Feb ‘17

17,566

Agriculture

9,163

Arrojadinho

Jaborandi/BA

Brazil

Jan ‘20

16,642

Agriculture

1,902

4,049

3,554

Rio do Meio

Correntina/BA

Brazil

Jan ‘20

5,750

Agriculture

4,729

Serra Grande

Baixa Grande do Ribeiro/PI

Brazil

Apr ‘20

4,489

Agriculture

2,757

Panamby

Querencia/MT

Brazil

Sep ‘22

10,844

5,379

Marangatu/Udra

Mariscal Estigarribia

Paraguay

Feb ‘09

58,722

Agriculture/ Natural woodlands

3,146

13,078

4,853

Las Londras

Santa Cruz

Bolivia

Nov ‘08

4,555

Agriculture

4,102

San Rafael

Santa Cruz

Bolivia

Nov ‘08

3,109

Agriculture

2,814

La Primavera

Santa Cruz

Bolivia

Jun ‘11

2,356

Agriculture

1,860

Subtotal Owned

616,803

66,006

85,000

117,023

70,326

Agropecuaria Anta S.A.

Las Lajitas

Salta

132,000

2,604

22,314

-

Subtotal Under Concession

132,000

2,604

22,314

-

Total

748,803

68,610

85,000

139,337

70,326

____________

(1)	Hectares in proportion to our 34.86% interest in Agro-Uranga S.A.
(2)	Does not include sheep or cattle in sold or rented fields.
(3)	Represents the use of the farms during de fiscal year.
(4)	On October 5, 2023, the company has informed that it has sold a 4,262 hectares fraction of land reserve with productive potential of “Los Pozos” farm, keeping the ownership of approximately 235,300 hectares of the property. For more information see: “Recent developments-Cresud’s Recent Developments-Los Pozos fraction sale”.

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Additional information about our Farmlands

Argentina

El Recreo

“El Recreo” farm, located 970 kilometers northwest of Buenos Aires, in the Province of Catamarca, was acquired in May 1995. It has semi-arid climate and annual rainfall, which do not excess of 400 mm. This farm is maintained as a productive reserve.

Los Pozos

“Los Pozos” farm located 1,600 kilometers northwest of Buenos Aires, in the Province of Salta, was acquired in May 1995. This property is located in a semi-arid area with average annual rainfall of 500 mm. The area is naturally suited to cattle raising and forestry activities (poles and fence posts), and it has agricultural potential for summer crops such as soybean, sorghum and corn, among others. For the fiscal year ended June 30, 2023, we used 18,399 hectares in agricultural production. As of June 30, 2023, there were 37,519 heads of cattle in this farm.

On October 5, 2023, we sold a fraction of 4,262 hectares fraction of land reserve with productive potential of “Los Pozos” farm, keeping the ownership of approximately 235,300 hectares of the property. The total amount of the operation was set at USD 2.3 million. For more information see: “Recent developments-Cresud’s Recent Developments-Los Pozos fraction sale”.

San Nicolás

“San Nicolás” is a 4,005 hectares farm owned by Agro-Uranga S.A., and is located in the Province of Santa Fe, approximately 45 kilometers from the Port of Rosario. As of June 30, 2023, 4,519 hectares were planted for agricultural production, including double crops, and 100 hectares were used for cattle. The farm has two plants of silos with a storage capacity of 14,950 tons.

Las Playas

“Las Playas” farm has a surface area of 4,294 hectares and is owned by Agro-Uranga S.A. It is located in the Province of Córdoba, and it is used for agricultural purposes. As of June 30, 2023, the farm had a sown surface area, including double crops, of 6,577 hectares for crop production.

La Gramilla and Santa Bárbara

These farms have a surface area of 7,072 hectares and it is located in Valle de Conlara, in the Province of San Luis. Unlike other areas in the Province of San Luis, this valley has a high-quality underground aquifer which makes these farms well suited for agricultural production after investments were made in the development of lands, wells and irrigation equipment. In the course of the 2022/2023 crop season, a total of 5,973 hectares were sown, including double crops. Also, we have leased to third parties 8 hectares, and the rest hectares were destined to land reserves.

La Suiza

“La Suiza” farm has, at the end of the fiscal year, a surface area of 26,371 hectares and is located in Villa Ángela, Province of Chaco. It is used for agriculture and raising cattle. As of June 30, 2023, “La Suiza” had a stock of approximately 7,581 heads of cattle. During the 2022/2023 season, we used 700 hectares for agricultural production and 18,100 for livestock production.

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El Tigre

“El Tigre” farm was acquired on April 30, 2003 and has a surface area of 8,360 hectares. It is located in Trenel, Province of La Pampa. As of June 30, 2023, 8,512 hectares were assigned to crop production, including double crops.

San Pedro

“San Pedro” farm was purchased on September 1, 2005. It has a surface area of 3,582 hectares (1,255 of which are used for breeding livestock) and is located in Concepción del Uruguay, Province of Entre Ríos, which is 305 kilometers north of Buenos Aires. In the course of the 2022/2023 crop season, 2,584 hectares were used for agricultural production, including double crops.

8 de Julio and Estancia Carmen

“8 de Julio” farm was acquired on May 15, 2007 and has a surface area of 90,000 hectares. It is in the Department of Deseado in the Province of Santa Cruz. Due to its large surface area, this farm offers excellent potential for sheep production. In addition, we believe the land has potential for future tourism and recreational activities, as the southeast border of the farm, a coast stretches over 20 kilometers. “Estancia Carmen” was acquired on September 5, 2008 and has a surface area of 10,911 hectares. It is in the Province of Santa Cruz, next to our “8 de Julio” farm.

Cactus

The feedlot has a surface area of 171 hectares. It is located in Villa Mercedes, Province of San Luis. Given its degree of urban development and closeness to the city, we decided to discontinue fattening activities in this facility.

Finca Mendoza

On March 2, 2011, the Company purchased, jointly with Zander Express S.A., a rural property composed of thirteen plots of land located in the District of Perdriel, Luján de Cuyo Department, in the Province of Mendoza. As a result of this acquisition, Cresud has become owner of a 40% undivided estate in all and each of the properties, while Zander Express S.A. holds the remaining 60%. The total agreed price for this transaction was USD 4 million; therefore, the amount of USD 1.6 million was payable by Cresud.

On June 8, 2017, a title deed for the sale of 262 ha was signed. The total price was USD 2.2 million. The Company has recognized a gain of ARS 11.8 million as a result of this transaction.

On April 17, 2019, we have purchased to Zander Express S.A. the 60% of the property, and the total price was USD 1.25 million. As a result of this acquisition, we have become owner of a 100% of the property.

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Los Sauces

On June 30, 2023, the Company acquired a 1,250-hectare farm, of which 1,200 are productive, located in the department of Conhello, in the province of La Pampa. The amount of the transaction was USD 4.5 million.

Establecimiento Mendoza

The farm is located on the north of the city of Mendoza, in the department of Lavalle. It consists of 9 hectares, which are currently not in use and are considered land reserves.

Agropecuaria Anta (concession)

The “Agropecuaria Anta” farm is located in the department of Anta, in the west of the Province of Salta. It is located 46 km from Las Lajitas and 87 km from Joaquín V. Gonzalez, both tows of the Province of Salta. It corresponds to a permit to use public land for 35 years with expiration in 2035, extendable to 29 more years.

Within the contracts framework with the state company Salta Forestal S.A., through which rural properties were granted to Cresud, the Government of the Province of Salta has decreed -through executive orders 815/20, 395/21, 396/21, 397 /21 and 398/21- the rejection of the hierarchical appeals filed by Cresud against the fees liquidation made by Salta Forestal S.A. and, depending on the campaign, by the Department of Agriculture Affairs for the 2013/2014, 2014/2015, 2016/2017, 2017/2018, 2018/2019 and 2019/2020  of corn, soybean and/or sorghum crops campaigns. In this context, Cresud has initiated the judicial action against the aforementioned executive orders and in return the province of Salta has initiated an executive lawsuit and a garnishment for the amounts of the disputed amounts. To date, garnishment have been processed within the framework of file 726737/20 and in relation to executive order 815/20, for the sum of ARS 42.5 million, in the framework of file 739946/21 and in relation to executive order 395/21, for the sum of ARS 44.7 million, in the framework of file 742573/21 and in relation to executive order 396/21, for the sum of ARS 45.5 million, in the framework of file 739937/21 and in relation to executive order 397/21, for the sum of ARS 69.2 million, and within the framework of file 740034/21 and in relation to executive order 398/21, for the sum of ARS 58.4 million  In this regard, and based on the executive orders issued by the Government of Salta and in accordance with what was reported by our external advisory lawyers, the contingency is estimated in the amount of ARS 450 million.

Brazil (through our subsidiary BrasilAgro)

Jatobá

Jatobá is a farm in the northeastern region of Brazil, with a total surface area of 8,868 hectares. Jatobá was acquired in March 2007 for BRL 33 million. We consider that this farm is in a very advantageous location for the movement of crops, as it is close to the Candeias Port, in the State of Bahia. During the 2022/2023 season, 7,006 hectares were used for agriculture.

On June 30, 2017, BrasilAgro sold 625 hectares of our Jatobá farm, 500 of which are arable, for a total sale price of BRL 10.1 million, equivalent to 300 soybean bags per arable hectare.

In July 2018, BrasilAgro sold 9,784 hectares of our Jatobá farm, 7,485 of which are arable, for a total sale price of BRL 164.8 million, equivalent to 285 soybean bags per arable hectare.

In June 2019, BrasilAgro sold 3,124 hectares of our Jatobá farm, 2,473 of which are arable, for a total sale price of BRL 58.1 million, equivalent to 285 soybean bags per arable hectare

In September 2019, we sold 1,134 hectares of our Jatobá farm, 893 of which are arable, for a total sale price of BRL 23.2 million, equivalent to 302 soybean bags per arable hectare.

In June 2020, we sold 1,875 hectares of our Jatobá farm, 1,500 of which are arable, for a total sale price of BRL 45.0 million, equivalent to 300 soybean bags per arable hectare.

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In August 2020, we sold 133 arable hectares, for a total sale price of BRL 3.8 million.

In May 2022, we sold 1,654 hectares of our Jatobá farm, 1,250 of which are arable, for BRL 67.1 million, equivalent to 300 soybean bags per arable hectare.

In June 2023, we sold an area of 4,408 hectares (3,202 arable hectares) in the Jatobá farm, located in the municipality of Jaborandi, in the State of Bahia. The total amount of the sale was 298 soybean bags per arable hectare, or BRL 121.9 million (approximately BRL 38,069 per arable hectare).

Alto Taquarí

Alto Taquarí is located in the municipal district of Alto Taquarí, State of Mato Grosso. The farm was acquired in August 2007 for BRL 33.2 million. Before we purchased it, the farm had been used for agriculture and cattle raising. Following its transformation, it is being used for sugarcane production and crop planting.

In November 2018, we sold 103 hectares of our Alto Taquari farm, all of which are arable, for a total sale price of BRL 8 million, equivalent to 1,100 soybean bags per arable hectare.

In October 2019, we sold 85 hectares of our Alto Taquari farm, 65 of which are arable, for a total sale price of BRL 5.5 million, equivalent to 1,100 soybean bags per arable hectare.

In May 2020, we sold 105 hectares of our Alto Taquari farm, all of which are arable, for a total sale price of BRL 11.0 million, equivalent to 1,100 soybean bags per arable hectare.

On October 7, 2021, we entered into an agreement to sell an area of 3,723 hectares (2,694 arable hectares) in the Alto Taquari Farm. The sale price was BRL 589 million (approximately BRL 218,641 per arable hectare) or 1,100 soybean bags per arable hectare. Part of such price corresponding to BRL 16.5 million was paid in October 2021 and an additional payment of BRL 31.4 million was made in November 2021. The remaining balance is indexed in soybean bags and will be paid in eight annual installments, starting in May 2022. The delivery of the area is expected to occur in two phases. The first phase took place in October 2021, consisting of 2,566 hectares (1,537 arable hectares), in the amount of approximately BRL 336 million, and the second phase is expected to take place in September 2024, consisting of 1,157 arable hectares, in the amount of approximately BRL 253 million. We intend to continue to explore and operate the areas that were sold until completion of each delivery phase.

Considering this sale, we sell all the plateau areas of Alto Taquarí Farm, leaving 1,380 hectares (809 arable hectares) in the portfolio.

Chaparral

Chaparral is a 37,182-hectare farm, with 24,306 hectares dedicated to agriculture production. It is located in the municipal district of Correntina, State of Bahia. The farm was acquired in November 2007 for BRL 47.9 million. The farm is being transformed into an area for crop grains and cotton.

Nova Buriti

Located in the municipal district of Januária, State of Minas Gerais, Nova Buriti has a surface area of 24,212 hectares. Nova Buriti was acquired in December 2007 for BRL 22 million. It is located in the southeastern region of Brazil and it is close to the large iron industries. We are currently in the process of obtaining the necessary permits in order to begin operations. Due to the difficulties BrasilAgro has been facing in regard to obtaining licenses for the farm, they are studying alternatives for the property. One such option is to sell the farm to offset the legal reserve, a mechanism contemplated in the environmental code pursuant to which holders of a legal reserve deficit can acquire another area to solve certain issues.

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Preferencia

Preferência is located in the municipal district of Barreiras, in the State of Bahia. It has a total surface area of 17,799, with 12,410 hectares of arable area. It was acquired for BRL 9.6 million in September 2008. The farm is being transformed into a pasturing area and will be later developed for agricultural purposes.

Sao José

Located in São Raimundo das Mangabeiras, in the state of Maranhão. With a total area of 17,566 hectares, with 10,137 hectares of arable area. It was acquired for a value of BRL 100 million in February 2017.

Arrojadinho

Located in Jaborandi, in the state of Bahia. With a total area of 16,642 hectares, of which 11,063 hectares of arable area. The Arrojadinho farm is suitable for grain production and cattle raising It was acquired in January 2020.

Rio do Meio

Located in Correntina, in the state of Bahia. With a total area of 5,750 hectares, of which 4,219 are used for agricultural activities. It was acquired in January 2020.

On September 20, 2021, the Company entered into a Purchase and Sale Commitment Agreement for a total area of 4,573 hectares (2,859 usable hectares), for the amount of 250 bags of soybeans per useful hectare, equivalent to BRL 130.1 million.

On November 8, 2022, BrasilAgro sold a fraction of 1,965 hectares (1,423 usable hectares). The amount of the operation was set at 291 bags of soybeans per useful hectare, equivalent to BRL 62.4 million on the date of the transaction.

After the sale, Rio do Meio Farm remained on our portfolio, with a total area of 5,750 hectares.

Serra Grande

Located in Baixa Grande do Ribeiro, in the state of Piauí. With a total area of 4,489 hectares, of which 2,904 are agricultural hectares. It was acquired in May 2020. This farmland started being transformed from forest to agriculture in 2020 and this development was completed in 2021.

Panamby

In September 2022, we acquired the Panamby farm, located in the municipality of Querência, in the State of Mato Grosso. The Panamby farm has an area of 10,844 hectares, 5,379 hectares of which are arable to be developed, and suitable for the cultivation of grains and cotton. The acquisition price was approximately BRL 285.6 million (approximately BRL 53,100 per arable hectare). For more information see “Recent Developments-Cresud’s Recent Developments-Panamby Farm (Brazil)”.

Paraguay (through BrasilAgro)

Marangatú / Udra

We own, through BrasilAgro, the “Marangatú/UDRA” farms, located in Mariscal José Félix Estigarribia, Department of Boquerón, Paraguayan Chaco, Republic of Paraguay, totaling 58,722 hectares, with 33,555 hectares of arable area.

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Bolivia (through BrasilAgro)

In February 2021, the company sold 100% of the shares of its indirectly controlled subsidiaries, Agropecuaria Acres del Sud S.A. (“Acres del Sud”), Ombu Agropecuaria S.A, Yatay Agropecuaria S.A., and Yuchan Agropecuaria S.A. owners of approximately 9,900 agricultural hectares in the core zone from Bolivia to BrasilAgro for the approximate sum of USD 30 million. 

Las Londras

On January 22, 2009, the bill of purchase for the “Las Londras” farm was cast into public deed; it has a surface area of 4,555 hectares and is located in the Province of Guarayos, Republic of Bolivia. During the 2022/2023 crop season, it was used for agricultural production.

Acres del Sud is the plaintiff in a lawsuit in the 2nd Room of the Agro-Environmental Court of Santa Cruz that seeks the invalidation of the Sanitation Final Resolution – RASS No. 0504/2021 of November 25, 2021, by which Instituto Nacional de Reforma Agrária e Servicio Nacional de Areas Protegidas - INRA (i) determined that the Acres del Sud fraction (previously known as Las Londras I, Las Londras II, and Las Londras III), is superimposed on the Guarayos Forest Reserve, declaring the illegality of the possession of Acres del Sud regarding the property called Acres del Sud in an area of 4,435.1 hectares; and (ii) declared it as non-available fiscal land, leaving only 50 hectares remaining out of a total of 4,485.1 hectares. The monetary value of this lawsuit is not yet measurable, and Brasilagro’s chances of loss are classified as possible. Brasilagro has not made any provision in connection with this proceeding. On September 13, 2023, the 2nd Room of the Agro-Environmental Court of Santa Cruz dismissed the lawsuit as unfounded, maintaining the Sanitation Final Resolution – RASS No. 0504/2021 of November 25, 2021, firm and persistent. Acres del Sud S.A will file an “Acción de Amparo Constitucional" in order to dismiss such decision.

San Rafael

On November 19, 2008, the bill of purchase for the “San Rafael” farm was cast into public deed. This farm is located in the Province of Guarayos, Republic of Bolivia, and has a surface area of 3,109 hectares, which were used for agricultural production during the 2022/2023 crop season.

La Primavera

On June 7, 2011, we acquired the “La Primavera” farm, with a surface area of approximately 2,356 hectares. During the 2022/2023 season, this farm was used for agricultural production.

Land Management

In contrast to traditional Argentine farms, run by families, we centralize policy making in an Executive Committee that meets on a weekly basis in Buenos Aires. Individual farm management is delegated to farm managers who are responsible for farm operations. The Executive Committee lays down commercial and production rules based on sales, market expectations and risk allocation.

We rotate the use of our pasture lands between agricultural production and cattle feeding and the frequency depends on the location and characteristics of the farmland. The use of preservation techniques (including exploitation by no till sowing) frequently allows us to improve farm performance.

Subsequent to the acquisition of the properties, we make investments in technology in order to improve productivity and increase the value of the property. It may be the case that upon acquisition, a given extension of the property is under-utilized or the infrastructure may be in need of improvement. We have invested in traditional fencing and in electrical fencing, watering troughs for cattle herds, irrigation equipment and machinery, among other things.

Principal Markets

Crops

Our crop production is mostly sold in the domestic market. The prices of our crops are based on the market prices quoted in Argentine grains exchanges such as the Buenos Aires Grains Exchange (Bolsa de Cereales de Buenos Aires) and the cereal exchanges in each country, which take as reference the prices in international grains markets. The largest part of this production is sold to exporters who offer and ship this production to the international market. Prices are quoted in relation to the month of delivery and the port in which the product is to be delivered. Different conditions in price, such as terms of storage and shipment, are negotiated between the end buyer and ourselves.

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Cattle

Our cattle production is sold in the local market. The main buyers are slaughterhouses and supermarkets.

Prices in the cattle market in Argentina are basically fixed by local supply and demand. The Liniers Market (on the outskirts of the Province of Buenos Aires) provides a standard in price formation for the rest of the domestic market. In this market live animals are sold by auction on a daily basis. At Liniers Market, prices are negotiated by kilogram of live weight and are mainly determined by local supply and demand. Prices tend to be lower than in industrialized countries. Some supermarkets and meat packers establish their prices by kilogram of processed meat; in these cases, the final price is influenced by processing yields.

Customers

For the fiscal year 2023, our sales from the agribusiness segment (excluding sales of farms) were made to approximately 30 customers. Sales to our ten largest customers represented approximately 55% to 60% of our net sales. Some of these customers included Cargill, FASA, Bunge Alimentos S.A., ACA, GLENCORE, QUILMES, COFCO and GROBOCOPATEL. We have signed non-binding letters of intent with some of our largest customers that allow us to estimate the volume of the demand for certain products and to plan production accordingly. We generally enter into short-term agreements with a term of less than a year.

Marketing Channels and Sales Methods

Crops

We normally work with grains brokers and other intermediaries to trade in the exchanges. We sell part of our production in advance through futures contracts and buy and sell options to hedge against a drop in prices. Approximately 87% of the futures and options contracts are closed through the Buenos Aires Grains Exchange and 13% in the Chicago Board of Trade for hedging purposes.

Our storage capabilities allow us to condition and store crops with no third-party involvement and thus to capitalize the fluctuations in the price of commodities. In addition, we store crops in silo bags. On the other hand, in Brazil we have a total storage capacity of approximately 52,000 tons.

Cattle

We have several marketing channels. We sell directly to local meat processors and supermarkets, as well as in markets and auctions. Our customers include Frigorífico Swift, Arre Beef S.A., Colombo y Magliano S.A. and Saenz Valiente Bulrich at prices based on the cattle market.

We are usually responsible for the costs of the freight to the market and, in general, we pay commissions on our transactions.

Inputs

The current direct cost of our production of crops varies in relation to each crop and normally includes the following costs: tillage, seeds, agrochemicals and fertilizers. We buy in bulk and store seeds, agrochemicals and fertilizers to benefit from discounts offered during off-season sales.

Competition

The agricultural and livestock sector is highly competitive, with a huge number of producers. We are one of the leading producers in Argentina and the region. However, if we compare the percentage of our production to the country’s total figures, our production would appear as extremely low, since the agricultural market is highly atomized. Our leading position improves our bargaining power with suppliers and customers. In general, we obtain discounts in the region in the acquisition of raw materials and an excess price in our sales.

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Historically, there have been few companies competing for the acquisition and leases of farmlands for the purpose of benefiting from land appreciation and optimization of yields in the different commercial activities. However, we anticipate the possibility that new companies, some of them international, may become active players in the acquisition of farmlands and the leases of sown land, which would add players to the market in coming years.

Seasonality

As is the case with any company in the agro-industrial sector, our business activities are inherently seasonal. Harvest and sales of crops (corn, soybean and sunflower) in general take place from February to June. Wheat is harvested from December to January. With respect to our international market, in Bolivia climate conditions allow a double season of soybean, corn and sorghum production and, accordingly, these crops are harvested in April and October, while wheat and sunflower are harvested during August and September, respectively. Other segments of our activities, such as our sales of cattle and our forestry activities tend to be more of a successive character than of a seasonal character. However, the production of beef is generally higher during the second quarter, when pasture conditions are more favorable. In consequence, there may be significant variations in results from one quarter to the other.

Urban Properties and Investments Business (through our subsidiary IRSA)

As of June 30, 2023, our investment in IRSA’s common shares amounts to 56.93%.

The following information corresponds to data of the segments extracted from our subsidiary IRSA’s Annual Report and Financial Statements as of June 30, 2023.

Overview

Shopping Malls

As of June 30, 2023, IRSA owned a majority interest in, and operated a portfolio of, 15 shopping malls in Argentina, six of which are located in the City of Buenos Aires (Abasto, Alcorta Shopping, Alto Palermo Shopping, Patio Bullrich, Dot Baires Shopping and Distrito Arcos), two of which are located in the greater Buenos Aires area (Alto Avellaneda and Soleil Premium Outlet), and the rest of which are located in different provinces of Argentina (Alto Noa in the City of Salta, Alto Rosario in the City of Rosario, Mendoza Plaza in the City of Mendoza, Córdoba Shopping Villa Cabrera and Patio Olmos (operated by a third party) in the City of Córdoba, La Ribera Shopping in Santa Fe (through a joint venture) and Alto Comahue in the City of Neuquén).

IRSA portfolio’s leasable area totaled 335,826 sqm of GLA (excluding certain spaces occupied by hypermarkets, which are not IRSA’s tenants). Real tenants’ sales of our shopping centers reached ARS 636,842 million in the fiscal year 2023 and ARS 548,935 million in the fiscal year 2022, 16.0%, in real terms, higher than in 2022. The tenants’ sales of our shopping centers are relevant to our income and profitability because they are one of the factors that determine the amount of rent that we can collect from them. They also affect the overall occupancy costs of tenants as a percentage of their sales.

The following table shows certain information about IRSA’s shopping malls as of June 30, 2023:

Shopping malls	Date of acquisition/ development	Location	GLA(1)		Number of stores		Occupancy rate(2)		Our ownership interest (3)		Rental revenue
			(sqm)				(%)		(%)		(in millions of ARS)
Alto Palermo	Dec‑97	City of Buenos Aires		20,629		141		100.0		100.0		7,480
Abasto Shopping (4)	Nov‑99	City of Buenos Aires		37,167		157		99.5		100.0		6,948
Alto Avellaneda	Dec‑97	Buenos Aires Province		39,457		122		92.5		100.0		4,653

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Shopping malls	Date of acquisition/ development	Location	GLA(1)		Number of stores		Occupancy rate(2)		Our ownership interest (3)		Rental revenue
Alcorta Shopping	Jun‑97	City of Buenos Aires		15,839		107		96.1		100.0		4,300
Patio Bullrich	Oct‑98	City of Buenos Aires		11,396		90		92.7		100.0		2,370
Dot Baires Shopping	May‑09	City of Buenos Aires		47,811		163		98.6		80.0		4,072
Soleil Premium Outlet	Jul‑10	Buenos Aires Province		15,673		74		100.0		100.0		2,154
Distrito Arcos	Dec‑14	City of Buenos Aires		14,458		63		100.0		90.0		3,499
Alto Noa Shopping	Mar‑95	Salta		19,427		84		100.0		100.0		1,413
Alto Rosario Shopping	Nov‑04	Santa Fe		34,859		131		93.8		100.0		5,061
Mendoza Plaza Shopping	Dec‑94	Mendoza		41,511		124		99.1		100.0		2,125
Córdoba Shopping	Dec‑06	Córdoba		15,368		98		97.7		100.0		1,627
La Ribera Shopping	Aug‑11	Santa Fe		10,531		67		96.8		50.0		430
Alto Comahue	Mar‑15	Neuquén		11,700		88		96.7		99.95		1,240
Patio Olmos (5)	Sep‑07	Córdoba		-		-		-				-
Total				335,826		1,509		97.4				47,372

____________

(1)	Corresponds to gross leasable area (GLA) at each property. Excludes common areas and parking spaces.
(2)	Calculated dividing occupied square meters by leasable area as of the last day of the fiscal year.
(3)	Company’s effective interest in each of its business units.
(4)	Excludes Museo de los Niños which represents 3,732 square meters in Abasto
(5)	Does not include the rental revenues of Patio Olmos. We own the historic building where the Patio Olmos shopping mall is located in the province of Cordoba. The property is managed by a third party.

Tenant retail sales

During the fiscal year 2023, the sales of IRSA’s shopping malls tenants reached ARS 636,842 million, increasing by 16.0% compared to the previous fiscal.

Tenants’ sales of shopping malls located in the City of Buenos Aires and Greater Buenos Aires increased a 18.7% compared to previous fiscal year, from ARS 375,763 million to ARS 446,076 million during the fiscal year 2023, while those in the interior of the country increased a 10.2% compared to previous fiscal year, from ARS 173,172 million to ARS 190,766 million during the fiscal year 2023.

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

	For the fiscal years ended June 30, (1)
	2023		2022		2021		2020		2019
	(in millions of ARS)
Alto Palermo		83,516		68,833		25,805		45,328		61,514
Abasto Shopping		91,100		70,320		22,463		46,095		65,239
Alto Avellaneda		62,367		49,316		18,693		40,727		58,511
Alcorta Shopping		49,166		47,048		19,605		27,025		34,702
Patio Bullrich		27,230		24,917		12,624		18,383		22,795
Buenos Aires Design (2)		-		-		-		-		2,984
Dot Baires Shopping		51,217		43,655		17,201		36,207		49,997
Soleil Premium Outlet		33,907		31,194		15,101		18,812		26,846
Distrito Arcos		47,573		40,480		21,963		21,243		24,697
Alto Noa Shopping		26,067		24,865		18,411		18,350		22,151
Alto Rosario Shopping		72,117		65,082		39,212		38,367		49,308
Mendoza Plaza Shopping		39,021		36,918		31,824		29,942		39,305
Córdoba Shopping Villa Cabrera		22,676		20,743		13,060		11,818		16,084
La Ribera Shopping (3)		11,438		9,891		4,835		7,830		11,508
Alto Comahue		19,447		15,673		7,149		11,214		15,802
Total		636,842		548,935		267,946		371,341		501,443

____________

(1)	Retail sales based upon information provided to us by retailers and prior owners. The amounts shown reflect 100% of the retail sales of each shopping mall, although in certain cases we own less than 100% of such shopping malls. Includes sales from stands and excludes spaces used for special exhibitions.
(2)	End of the concession term was December 5, 2018.
(3)	Owned by Nuevo Puerto Santa Fe S.A., in which we are a joint venture partner.

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Total sales by type of business

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

	For the fiscal years ended June 30, (1)
	2023		2022		2021		2020		2019
	(in millions of ARS)
Department Store		-		-		6,502		19,775		27,139
Clothes and footwear		372,285		328,373		153,507		203,180		278,634
Entertainment		18,208		13,103		1,988		11,404		16,809
Home and decoration		15,660		14,853		8,035		7,586		11,135
Home Appliances		70,555		49,305		20,409		41,827		56,163
Restaurants		73,815		51,912		42,775		52,938		62,859
Miscellaneous		11,084		82,546		4,514		4,437		5,985
Services		75,235		8,843		30,216		30,194		42,719
Total		636,842		548,935		267,946		371,341		501,443

____________ 

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

Occupancy rate

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

	As of June 30,
	2023		2022		2021		2020		2019
	(%)
Alto Palermo		100.0		98.0		98.4		91.9		99.1
Abasto Shopping		99.5		98.9		99.7		94.9		98.7
Alto Avellaneda		92.5		81.4		64.8		97.4		98.6
Alcorta Shopping		96.1		99.7		90.6		97.3		97.9
Patio Bullrich		92.7		92.4		87.8		91.4		93.5
Dot Baires Shopping		98.6		83.5		80.7		74.6		74.5
Soleil Premium Outlet		100.0		100.0		90.3		97.1		99.0
Distrito Arcos		100.0		100.0		100.0		93.8		99.4
Alto Noa Shopping		100.0		96.7		98.1		99.0		99.5
Alto Rosario Shopping		93.8		96.3		95.4		97.2		99.6
Mendoza Plaza Shopping		99.1		91.1		97.3		97.8		97.3
Córdoba Shopping Villa Cabrera		97.7		100.0		91.4		95.4		99.3
La Ribera Shopping		96.8		97.1		96.2		99.0		94.6
Alto Comahue		96.7		97.4		92.4		96.2		96.2
Total		97.4		93.1		89.9		93.2		94.7

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Rental price

The following table shows the annual average rental price per square meter of IRSA’s shopping malls for the fiscal years indicated:

	For the fiscal years ended June 30, (1)
	2023		2022		2021		2020		2019
	(in ARS)
Alto Palermo		275,047		219,502		93,536		188,684		274,302
Abasto Shopping		148,762		109,002		36,614		85,879		133,727
Alto Avellaneda		102,466		71,187		25,499		61,477		102,674
Alcorta Shopping		208,849		187,059		82,291		120,874		162,384
Patio Bullrich		155,930		107,383		45,548		94,795		124,433
Dot Baires Shopping		66,867		52,554		16,410		47,660		70,667
Soleil Premium Outlet		117,141		100,570		46,029		67,444		104,944
Distrito Arcos		195,871		156,425		90,440		133,048		193,000
Alto Noa Shopping		65,014		57,599		37,617		43,239		57,722
Alto Rosario Shopping		125,220		113,768		62,313		63,823		87,230
Mendoza Plaza Shopping		45,289		37,798		26,583		29,362		41,857
Córdoba Shopping Villa Cabrera		92,073		77,715		45,451		48,096		69,397
La Ribera Shopping		34,661		25,180		7,720		24,018		36,183
Alto Comahue		94,704		70,036		18,074		162,660		156,996

____________ 

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

Revenues from the Shopping Malls segment

When analyzing the composition of the income of the shopping malls segment between 2023 and 2022, we can observe a balance in the proportions, since both or each of the contingent rent, which is the one that depends on our tenants’ sales, and also Base Rent represented approximately 40% of the segment’s income.

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

	For the fiscal year ended June 30,
	2023		2022		2021			2020			2019
	(in millions of ARS)
Base rent		19,076		12,726		8,701			16,608			25,544
Percentage rent		19,516		18,055		5,101			7,810			9,479
Total rent		38,592		30,781		13,802			24,418			35,023
Non-traditional advertising		1,037		858		388			977			1,184
Revenue from admission rights		4,004		3,025		2,785			4,795			5,592
Fees		416		451		476			558			653
Parking		2,094		1,242		132			1,572			2,557
Commissions		1,147		886		636			824			1,701
Other		82		91		634			111			1,147
Subtotal		47,372		37,334		18,853			33,255			47,857
Other revenues (1)		66		35		32			37			-
Adjustments and eliminations		-		-		(71	)		(1,785	)		(2,505	)
Total		47,438		37,369		18,814			31,507			45,352

____________ 

(1) As of June 30, 2023, includes ARS 41 million attributable to Patio Olmos and ARS 25 million attributable to Apsa Media commission for advertising in Edificio del Plata.

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Rental revenue

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

	For the fiscal years ended June 30, (1)
	2023		2022		2021			2020			2019 (2)
	(in millions of ARS)
Alto Palermo		7,480		5,961		2,790			5,292			7,476
Abasto Shopping		6,948		4,926		2,003			4,540			6,970
Alto Avellaneda		4,653		3,357		1,632			3,186			5,004
Alcorta Shopping		4,300		3,658		1,705			2,822			3,678
Patio Bullrich		2,370		1,656		748			1,632			2,141
Buenos Aires Design (2)		-		-		-			-			280
Dot Baires Shopping		4,072		3,115		1,576			3,467			5,898
Soleil Premium Outlet		2,154		1,839		877			1,315			1,951
Distrito Arcos		3,499		2,805		1,468			2,436			3,354
Alto Noa Shopping		1,413		1,244		852			981			1,313
Alto Rosario Shopping		5,061		4,417		2,598			2,759			3,624
Mendoza Plaza Shopping		2,125		1,824		1,362			1,569			2,173
Córdoba Shopping Villa Cabrera		1,627		1,324		832			940			1,309
La Ribera Shopping(3)		430		300		112			313			463
Alto Comahue		1,240		908		298			2,003			2,223
Subtotal		47,372		37,334		18,853			33,255			47,857
Other revenues (4)		66		35		32			37			-
Reconciliation adjustments		-		-		(71	)		(1,785	)		(2,505	)
Total		47,438		37,369		18,814			31,507			45,352

____________

(1)	Includes base rent, percentage rent, admission rights, fees, parking, commissions, revenue from non-traditional advertising and others. Does not include Patio Olmos.
(2)	End of concession December 5, 2018.
(3)	Through our joint venture Nuevo Puerto Santa Fe S.A.
(4)	As of June 30, 2023, includes ARS 41 million attributable to Patio Olmos and ARS 25 million attributable to Apsa Media commission for advertising in Edificio del Plata.

Lease expirations ⁽¹⁾

The following table sets forth the schedule of estimated lease expirations for IRSA’s shopping malls for leases in effect as of June 30, 2023, assuming that none of our tenants exercises its option to renew or terminate its lease prior to expiration:

	As of June 30, 2023
Agreements’ Expiration (as of end of fiscal year)	Number of agreements (1)		Square meters to expire		Due to expire		Total lease payments(2)		Agreements
					(%)		(in millions of ARS)		(%)
Vacant Stores		40		8,843		-		-		-
Expired in-force		34		18,793		5.7		349		1.9
2024		414		95,943		29.3		3,284		18.0
2025		444		79,432		24.3		4,427		24.4
2026		392		77,343		23.7		5,582		30.7
2027 and subsequent years		185		55,472		17.0		4,537		25.0
Total (3)		1,469		326,983		100.0		18,179		100.0

____________ 

(1)	Includes vacant stores as of June 30, 2023. A lease may be associated with one or more stores.
(2)	The amount expresses the annual base rent as of June 30, 2023 of agreements due to expire.
(3)	Does not include unoccupied stores.

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New leases and renewals

The following table shows certain information about IRSA’s leases agreement as of June 30, 2023:

							Average annual base rent per sqm
Type of business	Number of agreements renewed		Annual base rent		Annual admission rights		New and renewed		Former agreements		Number of non‑renewed agreements (1)		Annual base rent amount per sqm Non‑renewed agreements (1)
			(in millions of ARS)				(ARS/sqm)						(in millions of ARS)
Clothing and footwear		311		5,326		896		118,556		53,860		490		87,063
Miscellaneous (2)		94		1,378		326		177,045		87,364		133		86,398
Restaurant		95		1,402		157		179,761		76,501		131		126,204
Services		20		202		16		45,806		14,596		40		55,916
Home appliances		34		542		50		124,872		61,115		39		87,148
Home and decoration		18		194		70		79,586		18,473		36		72,746
Supermarket		1		37		-		11,568		8,264		3		4,970
Entertainment		8		88		8		12,696		2,488		16		17,374
Total (3)		581		9,169		1,523		133,043		58,302		888		89,250

___________

(1)	Includes vacant stores as of June 30, 2023. Gross leasable area with respect to such vacant stores is included under the type of business of the last tenant to occupy such stores.
(2)	Miscellaneous includes anchor stores.
(3)	Weighted average for Average annual base rent per sqm related to Number of agreements renewed.

Five largest tenants of the portfolio

The five largest tenants in our portfolio (in terms of sales) account for approximately 9.4% of IRSA’s gross leasable area as of June 30, 2023 and represent 12.1% of the annual basic rent for the fiscal year ending on that date.

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

Tenant	Type of Business	Sales		Gross Leasable Area
		(%)		(sqm)		(%)
Zara	Clothes and footwear		5.9		10,771		3.2
Nike	Clothes and footwear		3.5		8,105		2.4
Fravega	Home appliances		3.0		3,378		1.0
Adidas	Clothes and footwear		2.4		4,581		1.4
McDonald’s	Restaurant		2.1		4,550		1.4
Total			16.9		31,385		9.4

Principal Terms of our Leases

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

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

Rent amount specified in IRSA’s leases generally is the higher of (i) a monthly Base Rent and (ii) a specified percentage of the tenant’s monthly gross sales in the store, which percentage generally ranges between 2% and 12% of tenant’s gross sales. Additionally, under the rent adjustment clause included in most of its rental contracts, the tenant’s basic rent is generally updated monthly or quarterly and cumulatively by the CPI index.

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

The tenants of the shopping centers have electricity, gas and water services and, if applicable, depending on the tenant's commercial activity, telephone switchboard, central air conditioning connection, connection to the general fire detection and extinguishing system, and provision of emergency energy through generator sets in common sectors. Each tenant is responsible for completing all necessary installations within their unit, and must also pay the direct expenses generated by these services within each unit. Direct expenses generally include electricity, water, gas, telephone and air conditioning. The tenants must also pay a percentage of the total costs and general taxes related to the maintenance of the common areas. IRSA determines that percentage or “coupe” based on different factors. Common area expenses include, among other things, administration, security, operations, maintenance, cleaning and taxes.

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

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

Control Systems

IRSA has computer systems equipped to monitor tenants’ sales in all of its shopping malls. IRSA also conducts regular revenues audits of our tenants’ accounting sales records in all of our shopping malls. IRSA uses the information generated from the computer monitoring system to prepare statistical data regarding, among other things, total sales, average sales and peak sale hours for marketing purposes and as a reference for the revenues audit. Most of its shopping mall lease agreements require the tenant to have its point of sale system linked to our server.

Competition

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

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The following table shows certain information concerning the most significant owners and operators of shopping malls in Argentina, as of June 30, 2023:

Entity	Shopping malls	Location	GLA		Market share (1)
			sqm		(%)
IRSA	Alto Palermo	City of Buenos Aires		20,629		1.76
	Abasto Shopping (2)	City of Buenos Aires		37,167		3.17
	Alto Avellaneda	Province of Buenos Aires		39,457		3.36
	Alcorta Shopping	City of Buenos Aires		15,839		1.35
	Patio Bullrich	City of Buenos Aires		11,396		0.97
	Dot Baires Shopping (3)	City of Buenos Aires		47,811		4.07
	Soleil Premium Outlet	Province of Buenos Aires		15,673		1.34
	Distrito Arcos	City of Buenos Aires		14,458		1.23
	Alto Noa	City of Salta		19,427		1.66
	Alto Rosario	City of Rosario		34,859		2.97
	Mendoza Plaza	City of Mendoza		41,511		3.54
	Córdoba Shopping	City of Córdoba		15,368		1.31
	La Ribera Shopping (4)	City of Santa Fe		10,531		0.90
	Alto Comahue	City of Neuquén		11,700		1.00
Subtotal				335,826		28.6
Cencosud S.A.				277,203		23.6
Other operators				560,317		47.8
Total				1,173,346		100.0

____________ 

(1)	Corresponding to gross leasable area in respect of total gross leasable area. Market share is calculated dividing sqm over total sqm.
(2)	Does not include Museo de los Niños (3,732 square meters in Abasto).
(3)	Our interest in PAMSA is 80%.
(4)	Owned by Nuevo Puerto Santa Fe S.A., in which we are a joint venture partner.

Source: INDEC - National survey of shopping malls.

Seasonality

IRSA business is directly affected by seasonality, influencing the level of our tenants’ sales. During Argentine summer holidays (January and February) its tenants’ sales typically reach their lowest level, whereas during winter holidays (July) and in Christmas (December) they reach their maximum level. Clothing retailers generally change their collections in spring and autumn, positively affecting our shopping malls’ sales. Discount sales at the end of each season are also one of the main seasonal factors affecting our business.

Information technology

IRSA keep investing in technological innovation. The advances of society and changes in consumer habits constantly challenge us and motivate us to apply the latest technological trends to serve the visitor’s experience in the shopping malls and learn more about our clients. IRSA continued with the company digital transformation, extending the use of cloud based purchases and auctions platform for cost optimization, Robotic Process Automation or RPA automation in different areas. IRSA also migrated its datacenter, aiming maximum system availability and started to renew CCTV system, to improve security and enabling future capabilities, such as the use of artificial intelligence of things (AIoT). 

This year IRSA continued the development of APPA, the application that facilitates the experience of consumers in shopping malls, through which you can pay for parking, book a place for events & shows, redeem gift cards, obtain discounts, benefits and participate in promotions, and prepares to launch payments and gift vouchers. During the year, users of ¡appa! carried out more than 700,000 transactions on the platform, including consumption in shopping malls, use of parking spaces, and redemption of Corporate benefits.

Offices

Management of office buildings

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

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Properties

The following table sets forth certain information regarding IRSA’s office buildings, as of June 30, 2023:

Offices	Date of acquisition/ development	GLA (1)		Occupancy rate (2)		Ownership interest		Total rental income for the fiscal year ended June 30, 2023 (4)
		(sqm)		(%)		(%)		(in million of ARS)
AAA & A offices
Bankboston Tower (5)	Dec-14		-		-		-		3.7
Intercontinental Plaza (3)	Dec-14		2,979		100.0		100		195.1
Dot Building	Nov-06		11,242		51.6		80		546.7
Zetta Building	May-19		32,173		94.6		80		2,644.4
261 Della Paolera (6)	Dec-20		8,516		100.0		100		1,003.5
Total AAA & A offices			54,910		86.9				4,393.4
B offices
Philips Building	Jun-17		8,017		41.9		100		190.1
Suipacha 652/664 (7)	Dec-14		11,465		-		100		0.3
Total B offices			19,482		17.2				190.4
Total Offices			74,392		68.7				4,583.8

____________

(1)	Corresponds to the total leasable surface area of each property as of June 30, 2023. Excludes common areas and parking spaces.
(2)	Calculated by dividing occupied square meters by total gross leasable area of the relevant property as of June 30, 2023.
(3)	We own 13.2% of the building which covers an area of 22,535 square meters of gross leasable area, meaning we own 2,979 square meters of gross leasable area.
(4)	Corresponds to the accumulated income of the period.
(5)	The office buildings were sold during the fiscal year 2021.
(6)	We own 23.7% of the building that has 35,872 square meters of gross leasable area, meaning we owned 8,516 square meters of gross leasable area. As a subsequent event, on August 9, 2023, IRSA sold and transferred one floor of the tower “261 Della Paolera” for a total leasable area of approximately 1,184 sqm and 10 parking lots located in the building. Also, on October 5, 2023, IRSA sold and transferred two floors of the tower “261 Della Paolera” for a total leasable area of approximately 2,395 sqm and 18 parking lots located in the building. For more information, see “Recent Developments - 261 Della Paolera floors sales”.
(7)	As a subsequent event, on July 24, 2023, we sold the entire building Suipacha 652/664. Excluding the sqm of this building, the occupancy rate of total offices would be 81.2%. For more information, see “Recent Developments – Suipacha 652/664 building sale”.

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Occupancy rate

The following table shows IRSA’s offices occupancy percentage as of the end of fiscal years ended June 30:

	Occupancy rate (1)
	As of June 30,
	2023		2022		2021		2020		2019
	(%)
República Building (2)		-		-		66.9		86.9		95.2
Bankboston Tower (2)		-		-		-		96.4		93.5
Intercontinental Plaza		100.0		100.0		100.0		100.0		100.0
Bouchard 710 (2)		-		-		-		92.5		100.0
DOT Building		51.6		92.6		84.9		84.9		100.0
Zetta Building (3)		94.2		92.2		84.7		97.5		97.5
261 Della Paolera		100.0		67.1		80.2		-		-
Philips Building		41.9		81.4		93.1		82.7		45.7
Suipacha 652/664 (4)		-		-		17.3		31.2		44.6
Total		68.7		73.3		74.7		86.1		88.3

____________

(1)	Leased square meters pursuant to lease agreements in effect as of the end of fiscal year over gross leasable area of offices for the same fiscal year.
(2)	The office buildings were sold.
(3)	In fiscal year 2022, excludes 815 sqm from the occupancy calculation because they were under construction for the development of the “Workplace Offices” project.
(4)	As a subsequent event, on July 24, 2023, we sold the entire building Suipacha 652/664. Excluding the sqm of this building, the total occupancy would be 81.2%. For more information, see “Recent Developments – Suipacha 652/664 building sale”.

Annual average income per surface area as of the end of fiscal years ended June 30:

	Income per square meter (1)
	As of June 30,
	2023		2022		2021		2020		2019
	(ARS/sqm)
República Building (2)		-		-		134,611		133,129		124,587
Bankboston Tower (2)		-		-		-		120,116		127,815
Intercontinental Plaza		65,500		106,056		168,134		72,046		81,767
Bouchard 710 (2)		-		-		-		142,164		130,087
DOT Building		94,247		67,276		102,706		129,341		106,160
Zetta Building		86,865		89,864		117,650		128,799		84,558
261 Della Paolera (3)		117,836		130,198		79,192		-		-
Philips Building		56,584		57,849		65,963		59,402		136,949
Suipacha 652/664 (4)		-		-		101,366		57,905		118,563

____________ 

(1)	Calculated by dividing annual rental income by the gross leasable area of offices based on our interest in each building as of June 30 for each fiscal period.
(2)	The office buildings were sold.
(3)	The building became operational in December 2020, due to which the contracts and related revenues are not comparable to previous years.
(4)	As a subsequent event, on July 24, 2023, we sold the entire building Suipacha 652/664. For more information, see “Recent Developments - Suipacha 652/664 building sale”.

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New agreements and renewals

The following table sets forth certain Information on lease agreements as of June 30, 2023:

Property	Number of lease agreement (1) (5)		Annual rental price (2)		Rental income per sqm (new and renewed) (3)		Previous rental income per sqm (3)		Number of non‑ renewed leases		Non‑ renewed leases annual base rent amount (4)
			(in millions of ARS)		(ARS)		(ARS)				(in millions of ARS)
Dot Building		1		51		2,861		4,018		2		108
Philips Building		-		-		-		-		3		102
Intercontinental Plaza		-		-		-		-		-		-
261 Della Paolera		-		-		-		-		-		-
Zetta Building		1		55		4,316		3,721		-		-
Total (6)		2		106		3,468		3,894		5		210

____________

(1)	Includes new and renewed leases executed in fiscal 2023.
(2)	Leases in U.S. dollars converted to Pesos at the exchange rate prevailing on the first month of the agreement, multiplied by 12 months.
(3)	Monthly value.
(4)	Leases in U.S. dollars converted to Pesos at the exchange rate prevailing in the last month of the agreement, multiplied by 12 months.
(5)	It does not include leases over parking spaces, antennas, terrace area and Workplace (Zetta y Philips).
(6)	Weighted average for total rental income per sqm (new and renewed) and previous rental income per sqm.

The following table sets forth the schedule of estimated lease expirations for IRSA’s offices and other properties for leases in effect as of June 30, 2023. This data is presented assuming that none of IRSA’s tenants exercises its option to renew or terminate its lease prior to expiration (most leases have renewal clauses):

Fiscal year of lease expiration (1)(2)	Number of leases due to expire		Square meters of leases due to expire		Square meter of leases due to expire		Annual rental income amount of leases due to expire		Annual rental income amount of leases to expire
			(sqm)		(%)		(in millions of ARS)		(%)
2024		7		29,748		60		2,257		57
2025		5		3,239		6		211		5
2026 and thereafter		21		17,154		34		1,504		38
Total		33		50,141		100		3,972		100

____________

(1)	Includes offices with leases that have not been renewed as of June 30, 2023.
(2)	It does not include vacant square meters and contracts from: parking spaces, terraces, antennas and Workplace (Zetta y Philips).

Intercontinental Plaza, City of Buenos Aires

Intercontinental Plaza is a modern 24-story building located next to the Intercontinental Hotel in the historic neighborhood of Monserrat in downtown City of Buenos Aires. IRSA owns a 13.2% interest in the building which has footage averaging 22,535 square meters of gross leasable area; meaning IRSA owns 2,979 square meters of gross leasable area in this building. The principal tenant currently is Total Austral, and as an added value Banco Supervielle (Bank Branch) and Starbucks Coffee providing different services to the building.

Dot Building, City of Buenos Aires

IRSA’s subsidiary Panamerican Mall S.A. developed an office building of 11,242 square meters of gross leasable area next to Dot Baires Shopping. This building was inaugurated in July 2010, which meant IRSA’s arrival at the growing corridor of the Northern Area with respect to offices for rent. The building’s principal tenants include Farmanet, Astrazeneca S.A., Carrier and HP, among others.

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Zetta Building

IRSA’s subsidiary Panamerican Mall S.A. built an office building of 32,173 square meters of gross leasable area and 11 floors located in the commercial complex “Polo Dot” in Buenos Aires City. This A+, certified LEED, Gold of Core & Shell standards of the US Green Building Council, was inaugurated in May 2019, continuing to consolidate IRSA’s position in the North Zone corridor of offices for rent. As of June 30, 2023, the building was occupied approximately 91% by Mercado Libre. On the ground floor, it is currently operating the first Workplace office space with 815 sqm sectors. The space offers private offices, fully equipped, furnished and fully operational, ready to use.

261 Della Paolera Building

261 Della Paolera is a 126-meters high triangular-shaped tower of AAA offices and 55,000 square meters of surface, plus 70 linear meters of Curtain Wall on the Río de la Plata, developed on the last vacant land plot of Catalinas Norte. Located in the most prestigious corporate area in Argentina, with approximately 35,000 square meters of GLA, 318 parking spaces, changing rooms, security, gastronomy services, 261 Della Paolera has become an icon of the city, built sustainability in mind and high quality design. This new A+ building was recently certified to LEED Gold of Core & Shell standards by the US Green Building Council. The rental process has been a success, achieving 100% occupancy with premium tenants. It is currently a highly valued asset for large corporations for the acquisition of floors, due to its characteristics and current contracts.

During the fiscal year 2023 and as a subsequent event, the company sold and transferred 11 floors of this building. After these operations, IRSA maintains the ownership of 4 floors of this building with an approximate gross leasable area of 4,937 sqm, parking spaces and other complementary spaces. For more information, see “Recent Developments-IRSA’s Recent Developments-“261 Della Paolera” floors sales”.

Suipacha 652/64, City of Buenos Aires

Suipacha 652/64 is a 7-story office building located in the office district of the City of Buenos Aires. As of June 30, 2023, we owned the entire building and 62 parking spaces. The building has unusually large floors, most measuring 1,580 square meters. The average footage of the building is 11,465 square meters of gross leasable area.

On July 24, 2023, the entire building was sold, for more information see “Recent Developments-Suipacha 652/664 building sale”.

Phillips Building, City of Buenos Aires

The historic Philips Building adjoins Dot Baires shopping mall, and faces Avenida General Paz, in the City of Buenos Aires. It has 4 office floors, a total GLA of approximately 8,017 sqm, and a remaining construction capacity of approximately 20,000 sqm. During the year 2023, a Workplace will be start rented in the building, and it is expected that it will be the place where the largest headquarters of Workplace Irsa will operate with 1,800 sqm.

Leases

IRSA lease their offices by using contracts with an average term between three to ten years for corporate offices. In addition, IRSA has two spaces named “Workplace by IRSA”, which are leased as a co-working place, that are fully equipped and all inclusive by using services contracts with semi-annually and annually average term.

Contracts for the rental of office buildings and other commercial properties are generally stated in U.S. dollars. Rental rates for renewed periods are negotiated at market value

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Competition

Virtually all IRSA office’s properties and other commercial properties other than shopping malls are in developed urban areas. There is a great number of office buildings, shopping malls, retail stores and residential houses in the zones where IRSA’s properties are located. It is a highly fragmented market and the abundant number of comparable properties in the vicinity may have an adverse impact on the ability to lease or sell office space and other properties and may have an adverse impact on the sale and rental price of properties.

In the future, both domestic and foreign companies are likely to participate in the real estate market in Argentina, hence competing with us when it comes to business opportunities. In addition, in the future IRSA may participate in the development of a market for foreign real property, and we are likely to find well-established competitors.

In the premium office segment, IRSA competes with other relevant market players, such as RAGHSA, who together with IRSA represent the 2 most important players.

Hotels

Hotel activity reached high levels of occupancy and sales during the fiscal year ended June 30, 2023, motivated by the boom both in domestic and international tourism. The exclusive Llao Llao resort, which the company owns in the city of Bariloche, in southern Argentina, reached optimal occupancy levels and is a great attraction for the high-income segment. Also, our Libertador and Intercontinental hotels in the City of Buenos Aires recovered strongly this year, increasing rates and occupancy.

During the fiscal year 2023, IRSA kept its 76.34% interest in Intercontinental hotel, 100% interest in Libertador hotel and 50.00% interest in Llao Llao.

The following chart shows certain information regarding IRSA’s luxury hotels:

Hotels	Date of Acquisition	IRSA’s Interest		Number of rooms		Occupancy (1)		Average Price per Room(2)		Fiscal Year Sales as of June 30 (in millions of ARS)
		(%)				(%)		ARS		2023		2022		2021		2020		2019
Intercontinental (3)	11/01/1997		76.34		313		66.4		27,772		4.118		1.723		463		3.826		5.570
Libertador (4)	03/01/1998		100		200		57.2		19,893		1.634		637		152		1.339		3.139
Llao Llao (5)	06/01/1997		50		205		76.7		70,608		9.212		6.910		2.641		5.568		6.971
Total					718		66.8		39,936		14.964		9.270		3.256		10.733		15.680

____________

(1)	Accumulated average in the twelve-month period.
(2)	Accumulated average in the twelve-month period.
(3)	Through Nuevas Fronteras S.A.
(4)	Through Hoteles Argentinos S.A.U.
(5)	Through Llao Llao Resorts S.A. and IRSA - Galerías Pacífico S.A. UT (until March 31, 2023).

Hotel Intercontinental, City of Buenos Aires

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

Hotel Libertador, City of Buenos Aires

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

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

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

In June 1997 IRSA acquired the Hotel Llao Llao from Llao Llao Holding S.A. Fifty percent is currently owned by the Sutton Group. The Hotel Llao Llao is located on the Llao Llao peninsula, 25 kilometers from the City of San Carlos de Bariloche, and it is one of the most important tourist hotels in Argentina. Surrounded by mountains and lakes, this hotel was designed and built by the famous architect Bustillo in a traditional alpine style and first opened in 1938. The hotel was renovated between 1990 and 1993 and has a total constructed surface area of 15,000 sqm and 158 original rooms. The hotel-resort also includes an 18-hole golf course, tennis courts, fitness facility, spa, game room and swimming pool. The hotel is a member of The Leading Hotels of the World, Ltd., a prestigious luxury hospitality organization representing 430 of the world’s finest hotels, resorts, and spas. The Hotel Llao Llao was managed by “IRSA- Galerías Pacífico S.A. - UT”, a Transitory Union constituted 50% by IRSA and 50% by Grupo Sutton until March 31, 2023, from that date it is operated by Llao Llao Resorts S.A. During 2007, the hotel was subject to an expansion and the number of suites in the hotel rose to 205 rooms. In 2019, began the remodeling of the Bustillo Wing in the hotel, where 42 rooms were modernized and valued, which have a differential value for having air conditioning equipment and modern plumbing.

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

On December 14, 2006, through IRSA’s hotel operator subsidiary, Llao Llao Resorts S.A., IRSA acquired a land covering 129,533 sqm of surface area in the City of San Carlos de Bariloche in the Province of Río Negro. The total price of the transaction was USD 7 million. The land is on the border of the Lago Gutiérrez, close to the Llao Llao Hotel in an outstanding natural environment and it has a large cottage covering 1,000 sqm of surface area designed by the architect Ezequiel Bustillo.

Sale and Development of Properties and Land Reserves

Residential Development Properties

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

In fiscal year ended June 30, 2023, revenues from the sale and development of properties amounted to ARS 4,382 million, compared to ARS 1,608 million posted in the fiscal year ended June 30, 2022.

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

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

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The following table shows information about IRSA’s land reserves as of June 30, 2023:

	Ownership Interest		Date of acquisition	Land Surface		Buildable surface		GLA		Salable Surface		Book Value
	(%)			(sqm)								(in millions of ARS)
RESIDENTIAL - BARTER AGREEMENTS
Córdoba Shopping Adjoining plots - Residential		100	May-15		-		-		-		2,160		502
Libertador 7400 (Quantum Bellini) Trust		100	Feb-21		-		-		-		186		145
Ancón (Luis M. Campos) Trust		100	Feb-21		-		-		-		1,014		671
Av. Figueroa Alcorta 6464 Trust		100	Feb-21		-		-		-		1,786		1,751
Coto Abasto air space - Tower 1 - City of Buenos Aires		100	Sep-97		-		-		-		2,018		1,311
Coto Abasto air space - Tower 2 - City of Buenos Aires		100	Sep-97		-		-		-		8,338		770
Zetol y Vista al Muelle - Uruguay		90	Jun-09		-		-		-		792		23
Caballito Ferro Plot 1 - CABA		100	Jan-21		-		-		-		2,908		2,044
Total Intangibles (Residential)					-		-		-		19,202		7.217
LAND RESERVES:
Luján Plot - Buenos Aires (5)		100	May-08		1,152,106		464,000		-		-		4,210
San Martin Plot (Ex Nobleza Piccardo) - Buenos Aires (5) (8)		50	May-11		159,996		480,000		-		-		20,949
La Adela - Buenos Aires		100	Aug-14		9,868,500		3,951,227		-		-		6,660
Puerto Retiro - City of Buenos Aires (4)		50	May-97		82,051		246,153		-		-		-
Ezpeleta plot (Quilmes)		100	Apr-22		465,642		521,399		-		-		7,932
Costa Urbana - City of Buenos Aires		100	Jul-97		716,180		866,806		-		693,445		172,562
La Plata - Greater Buenos Aires (5)		100	Mar-18		78,614		116,553		-		-		4,715
Polo Dot mixed uses expansion - CABA (7)		80	Nov-06		-		15,940		-		-		5,905
Caballito Ferro Plots 2, 3 and 4 - City of Buenos Aires		100	Jan-99		20,462		86,387		-		75,277		15,033
Subtotal Mixed-uses					12,543,551		6,748,465		-		768,722		237,966
Caballito Block 35 - City of Buenos Aires (3)		100	Oct-98		9,767		57,192		-		31,257		2,324
Zetol - Uruguay		90	Jun-09		-		-		-		51,228		1,485
Vista al Muelle - Uruguay		90	Jun-09		-		-		-		60,360		1,736
Neuquén - Residential plot - Neuquén (2) (6)		100	Jul-99		13,000		57,000		-		-		2,261
Subtotal residential					22,767		114,192		-		142,845		7,806
Beruti y Coronel Diaz Building - City of Buenos Aires		100	Jun-22		2,387		8,900		5,067		-		6,273
Subtotal retail					2,387		8,900		5,067		-		6,273
Polo Dot - Offices 2 & 3 - City of Buenos Aires...		80	Nov-06		12,800		-		38,400		-		10,694
Paseo Colón 245 Building - City of Buenos Aires.		100	May-23		1,579		13,690		9,500		-		2,167
Intercontinental Plaza II - City of Buenos Aires....		100	Feb-98		6,135		-		19,597		-		3,842
Córdoba Shopping adjoining plots - Córdoba (2)		100	May-15		5,365		5,000		4,823		-		739
Subtotal offices					25,879		18,690		72,320		-		17,442
Total future developments					12,594,584		6,890,247		77,387		911,567		269,487
Other land reserves (1)					3,289,199		-		7,297		262		10,082
Total land reserves					15,883,783		6,890,247		84,684		911,829		279,569

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(1)	Includes Zelaya 3102-3103, Chanta IV, Anchorena 665, Ocampo parking spaces, DOT adjoining plot. adjoining plot Mendoza Shopping, Pilar R8 Km 53, Conil land (Plot II), Pontevedra, San Luis Land and Llao Llao Land.
(2)	These lands are classified as Property for sale; therefore, their value is maintained at historical cost basis adjusted by inflation. The rest of the land is classified as Investment Properties, valued at market value.
(3)	“Caballito Manzana 35” consists of 3 residential buildings of 27, 22 and 18 floors.
(4)	This land is in judicial litigation.
(5)	Estimated maximum buildable area according to the projects, still pending final approvals.
(6)	Estimated buildable area according to the first draft, which to date is about 45,000 sqm according to the latest news from the Municipality.
(7)	Applicable to the expansion of the Zetta Building.
(8)	As a subsequent event of the fiscal year 2023, on August 31, 2023, we sold and transferred 100% of its stake in Quality Invest S.A. equivalent to 50% of the stock capital (for more information see “Recent Developments - Sale of Quality Invest S.A.”).

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The following table shows information about IRSA’s expansions on its current assets as of June 30, 2023:

Expansions	Ownership interest		Surface		Locations
	(%)		(sqm)
Alto Palermo		100		4,336	City of Buenos Aires
Paseo Alcorta		100		1,337	City of Buenos Aires
Alto Avellaneda		100		23,737	Buenos Aires
Alto Noa		100		3,068	Salta
Soleil Premium Outlet		100		17,718	Buenos Aires
Alto Comahue		100		3,325	Neuquén
Total in Shopping Malls				53,521
Patio Bullrich		100		20,000	City of Buenos Aires
Alto Palermo		100		14,199	City of Buenos Aires
Córdoba Shopping		100		7,000	Cordoba
Alto Rosario		100		15,000	Rosario
Philips Building		100		19,706	City of Buenos Aires
Total in offices + residential				75,905
Total expansions				129,426

Residential Properties (available for sale)

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

Intangibles - Units to be received under barter agreements

Córdoba Shopping Adjoining Plots - Residential

On August 18, 2022, the plot 1 of 3,240 sqm was bartered with Proaco, where two residential towers is expected to be built. IRSA expect to receive as consideration, within a period of between 36 and 44 months, functional units that represent 16% of the square meters, with a minimum of 2,160 square meters, together with garage units and, if built, also storage units. The value of the swap is USD 2 million.

Trusts: Ancón (Luis M. Campos 100 and Ancón), Figueroa Alcorta 6464 and Libertador 7400 (Quantum Bellini)

On February 9, 2021, as a result of the reorganization of Manibil S.A., IRSA received a participation in three trusts:

· Ancón Trust: The original project, which consisted in an office building, was changed to a residential building, of which 1,014 sqm and 10 garages units would correspond to us. As of the date of this Annual Report, there is a legal protection in relation to this project (amparo), thus the work is suspended;

· Figueroa Alcorta 6464 Trust: corresponds to 1,786 sqm of apartments and 11 garage units. As of June 30, 2023, the work has started; and

· Libertador 7400 (Quantum Bellini) Trust: corresponds to 923 sqm of apartments, 5 garages units and storage units. As of June 30, 2023, units have been sold, with the remaining of 186 sqm in stock.

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Coto Abasto air space - Towers 1 & 2 - City of Buenos Aires

IRSA owns an airspace to construct approximately 23,000 square meters above the premises of the Coto hypermarket that is close to Abasto Shopping in the heart of the City of Buenos Aires. On September 24, 1997, IRSA and Coto Centro Integral de Comercialización S.A. (Coto) granted a deed through which the Company acquired the rights to receive functional parking units and the rights to raise the property located between Agüero, Lavalle, Guardia Vieja and Gallo streets, in the Abasto neighborhood.

On October 25, 2019, IRSA transferred to a non-related third party the rights to develop a residential building (“Tower 1”) on Coto Supermarket airspace located in the Abasto neighborhood in the City of Buenos Aires. Tower 1 will have 22 floors of 1 to 3 rooms apartments, totaling an area of 8,400 sqm. The operation was set for the total of USD 4.5 million: USD 1 million was paid in cash and the balance in at least 35 functional units of departments, with a guaranteed minimum of 1,982 sqm.

As of June 30, 2022, the construction work of Tower 1 had been completed by more than 60% of the total project. In addition, on June 30, 2023, in compliance with the agreement into with Abasto Twins S.A. in June 2016, we signed the assignment of a parking unit and the right to build the Tower 2 of Abasto for USD 3 million. As of the date of this Annual Report, IRSA received the sum of USD 15,250 in cash as monetary consideration, and the right to receive at least 29 functional units that are part of the future tower as non-cash consideration. This non-cash consideration represents the equivalent of 20% of the square meters of the plans approved by the Government of the City of Buenos Aires for the construction of the tower, with a guaranteed minimum of 1,639 sqm.

Zetol S.A. and Vista al Muelle S.A. - Plot 2 Carrasco Boating - District of Canelones - Uruguay

On November 23, 2022, the barter of Plot 2 was completed with a surface of 17,754 sqm of the Carrasco Boating project to Carrasco Boating Trust, which is not related to the Company. The sale price was USD 8.3 million.

Mixed uses

Luján Plot of Land - Luján, Province of Buenos Aires

This 115-hectare plot of land is located in the 62 Km of the West Highway, in the intersection with Route 5 and was originally purchased by Cresud from Birafriends S.A. for USD 3 million. In May 2012, IRSA acquired the property through a purchase and sale agreement entered into between related parties, thus becoming the current owner. IRSA’s intention is to carry out a mixed-use project, taking advantage of the environment consolidation and the strategic location of the plot. At present, dealings are being carried out so as to change the zoning parameters, thus enabling the consummation of the project.

San Martin Plot (Ex Nobleza Piccardo Plant) - San Martín, Province of Buenos Aires

This plot of land is owned by Quality Invest. On May 31, 2011, Quality Invest S.A. and Nobleza Piccardo S.A.I.C. y F. (Nobleza) executed the title deed for the purchase of a plot of land extending over 159,996 square meters located in the District of San Martín, Province of Buenos Aires, currently intended for industrial purposes and suitable in terms of characteristics and scales for mixed-use developments.

The Master Plan, by which it is projected to develop a large-scale integral urbanization (residential, commercial, etc.), which includes the construction of approximately 480,000 sqm, was endorsed by the Municipality of San Martin through Decree 1589/19 and registered before the General Directorate of Urbanism and Directorate of Urban Planning of the Municipality. Likewise, the subdivision plan in accordance with the urban indicators was presented to the Directorate of Cadastre of the Province of Buenos Aires.

Additionally, during the fiscal year 2022, Quality Invest S.A. and the Municipality of San Martín signed the following documents:

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Peretz Club Agreement Closing Minutes: The Company paid the certificates owed for the work in question already completed, releasing both parties from any claim regarding the documents signed on January 20, 2015. The amount owed was ARS 18.9 million and the execution of the works are described, detailed and carried out.

Complementary Agreement with the Municipality of San Martin: The ending of the Rodriguez Peña work and the relocation and start-up of the Edenor substation are agreed, in accordance with the plan and specifications drawn up by the Company and that are part of the annexes of the same. In return, the certifications owed will be paid as follows: The total is ARS 26.1 million: ARS 15.0 million have already been paid; and the remaining amount (without any adjustment clause) will be paid at the time of provisional reception of the work, where will sign the Certificate of Delivery.

As a subsequent event of the fiscal year 2023, on August 31, 2023, IRSA has sold and transferred 100% of its stake in Quality Invest S.A. equivalent to 50% of the stock capital (for more information see “Recent Developments - Sale of Quality Invest S.A.”).

La Adela - Buenos Aires

During 2015 IRSA acquired the “La Adela” land reserve with an area of approximately 987 hectares, located in the District of Luján, Province of Buenos Aires, that was previously owned by Cresud. Given its degree of development and closeness to the City of Buenos Aires, IRSA intend to develop a new real estate project.

Puerto Retiro - City of Buenos Aires

At present, Puerto Retiro S.A. has an 8.2 hectare plot of land, which is affected by a zoning regulation defined as U.P. which prevents the property from being used for any purposes other than strictly port activities.

Puerto Retiro S.A. was involved in a bankruptcy extension judicial action initiated by the Argentine government, to which the Board of Directors is totally unrelated. Management and the Company’s legal advisors consider that there are sufficient legal technical arguments to consider that the request for the extension of bankruptcy will be rejected by the court. However, given the current state of the case, the resolution is uncertain.

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

On September 7, 2018, the Oral Federal Criminal Court No. 5 released the operative part of the Sentence, from which it follows that the prescription exception filed by Puerto Retiro was allowed. However, in the criminal case, where Puerto Retiro is not a party, it was ordered, among other issues, the confiscation (decomiso) of the property owned by Puerto Retiro known as Planta I. The reasons for the Court’s sentence were read on November 11, 2018. From that moment, all the parties might file the appeals. Faced with this fact, an extraordinary appeal was filed, which was rejected, and as a result, a complaint was filed for a rejected appeal, which was granted. Consequently, the appeal is under study in the Supreme Court of Justice of the Nation.

In the framework of the criminal case, the complainant denounced the non-compliance by Puerto Retiro S.A. of the precautionary measure decreed in the criminal court consisting of the prohibition to innovate and contract with respect to the property that is the object of the civil action. As a result of this complaint, the Oral Federal Criminal Court No. 5 filed an incident and ordered and executed the closure of the property where the lease contracts with Los Cipreses S.A. and Flight Express S.A. were being fulfilled, in order to enforce compliance with the aforementioned measure. As a result of this circumstance, it was learned that the proceedings were turned to the Criminal Chamber for the assignment of a court to investigate the possible commission of a disobedience crime. As of the date of this Annual Report, there has been no news regarding the progress of this case.

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In the face of the evolution of the legal cases affecting it and based on the reports of its legal advisors, the Management of Puerto Retiro has decided to record, during the fiscal year 2019, an impairment equivalent to 100% of the book value of its investment property, without prejudice to the reversal of the same in the event that a favorable judgment is obtained in the actions brought.

Ezpeleta Plot - Quilmes, Buenos Aires

Acquired in April 2022 as part of the payment for the sale of the Republica Building. The property is made up of four plots and has a frontage of 851 meters on the Bs As - La Plata Highway, on the side of the urbanized area the property has a frontage of 695 meters on Río Gualeguay Street between Tupungato and La Guarda streets. It has a total area of 465,642 sqm, with a usable area of 242,151 sqm and a buildable area of 521,399 sqm.

Costa Urbana - formerly Solares de Santa María - Costanera Sur, City of Buenos Aires

On December 21, 2021, the law from Buenos Aires City congress approving a New Zoning Regulations for the development of the property, was passed, and published. The Plot of approximately 70 hectares, owned by the Company since 1997, previously known as “Solares de Santa María”, is in the riverfront of the Río de la Plata, in the South Coast of the Autonomous City of Buenos Aires, southeast of Puerto Madero. The published law grants a New Zoning Area, designated: “U73 - Public Park and Costa Urbana Urbanization”, which enables a mixed-use development, combining, residential, office buildings, retail, services, public spaces, education, and entertainment.

IRSA will have a construction capacity of approximately 866,806 sqm, which will drive growth for the coming years through the development of mixed-use projects.

IRSA promised to give to the City of Buenos Aires 50.8 hectares designated for public use, which represent approximately 71% of the total area of the property and contribute with three additional lots of the property, two for the Sustainable Urban Development Fund and one for the Innovation Trust, Science and Technology of the Government of the Autonomous City of Buenos Aires, in addition to the sum of USD 2,6 million in cash and the amount of 3,000,000 sovereign bonds (AL35) which was also contributed.

In March 2023, measurement was approved with a proposal for subdivision, division, transfer of streets and public space and we are in the process of deeding the 3 parcels and the sector of the Public Park that is transferred for consideration.

Likewise, IRSA will oversee putting in place the infrastructure and road works on the property serving the new city blocks generated and will carry out the public space works contributing up to USD 40 million, together with the maintenance of the public spaces assigned for 10 years or until the sum of USD 10 million is completed.

On October 29, 2021, IRSA received in relation to a collective legal protection action, requesting the convening of a public hearing prescribed by art. 63 of the Constitution of the City of Buenos Aires and the suspension of the processing of Bill 1831 - J 2021 (Trial Court of Administrative and Tax Law No. 10, Sec. 19 - Cause “Civil Association Observatory of the Right to City and others against GCBA and others on Protection Action (Amparo) - Others” - EXP J-01-00166469-3/2021-0). The Company proceeded to answer the lawsuit on November 12, 2021, requesting its rejection and on March 10, 2022, the court issued a ruling partially upholding the (amparo) legal protection. On March 15, 2022, IRSA as well as the Government of the City of Buenos Aires -codefendant in the case-appealed the ruling. On March 6, 2023 the Room IV of the “Contentious-Administrative, Tax and Consumer Relations” Chamber (Room IV) resolved to revoke the judgment of first instance, and consequently reject the claim. Given that said judgment was not appealed, the case has concluded and as of the date of this Annual Report, the Company has not any judicial process in progress related to the Costa Urbana project.

“Costa Urbana” will change the landscape of the City of Buenos Aires, bringing life to an undeveloped area and will be an exceptional project due to its size, location and connectivity, providing the City the possibility of expanding and recovering its access to the Río de la Plata coast with walkable areas, recreation, green spaces, public parks and mixed-use.

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La Plata Plot of land

On March 22, 2018, IRSA acquired 100% of a plot of land of 78,614 sqm of surface in the town of La Plata, province of Buenos Aires. The transaction was consummated through the purchase of 100% of the shares of Entertainment Center La Plata S.A. that owns 61.85% of the property and the direct purchase of the remaining 38.15% from unrelated third parties.

The price of the acquisition was USD 7.5 million which has been fully paid. IRSA intends to use the property to develop a mixed-use project, given the property’s characteristics for a commercial development in a district with high potential.

On January 21, 2019, Ordinance No. 11,767 approved by the “Honorable Consejo Deliberante de La Plata” on December 26, 2018, was enacted. With this enactment, the uses and indicators requested to develop a project of 116,553 square meters were formally confirmed.

As of June 30, 2023, the mixed-use project is advanced.

Polo Dot mix uses expansion - City of Buenos Aires

On the plot where the Zetta Building is located, IRSA has a surplus buildable surface of 15,940 sqm, where alternatives are being analyzed to develop a mixed-use project.

Caballito Ferro Plots 2, 3 and 4 - City of Buenos Aires

Caballito is a property of approximately 20,462 sqm in the City of Buenos Aires, neighborhood of Caballito, one of the most densely populated of the city, which the Company purchased in November 1997. This plot will be used for the development of residential with retail and public spaces, with more than 85,000 sqm. This Project is approved by the GCBA authorities.

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

As of June 30, 2023, the development is awaiting the resolution of an appeal filed with the Government of the City of Buenos Aires.

Residential

Caballito Block 35 - City of Buenos Aires

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

As of June 30, 2023, the work for the concrete structure of Tower 3 was completed.

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

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

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IRSA to develop in these 13 plots, with a construction capacity of 182,000 sqm, an urban project that consists of the development and commercialization of 1,860 apartments. Such a project has the “urban feasibility” status for the construction of approximately 180,000 sqm for a term of 10 years, which was granted by the Mayor’s Office of the Canelones department and by its Local Legislature. Zetol S.A. and Vista al Muelle S.A. agreed to carry out the infrastructure works for USD 8 million as well as a minimum amount of square meters of properties. The satisfaction of this commitment under the terms and conditions agreed upon will grant an additional 10-year effective term to the urban feasibility status.

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

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

As a result of the plot barter agreements executed in due time between the IMC, Zetol S.A. and Vista al Muelle S.A. in March 2014, the parcel redistribution dealing was concluded. This milestone, as set forth in the amendment to the Master Agreement executed in 2013, initiates the 10-year term for the investment in infrastructure and construction of the buildings mentioned above. Construction capacity of the 13 plots is 180,000 sqm.

On November 15, 2018, the translation deed of sale of the first plot where the first Tower of Departments, Villas and single and double parking spaces is currently being built has been signed, the total exchange price was USD 7.3 million equivalent to 16% of all of the marketable built meters in the first Tower. 12% of it has been used to cancel part of the price balance maintained to date with the sellers of the plots acquired by Zetol S.A in June 2009.

As of June 30, 2023, 4 of the 6 units were received for the consideration of Tower 1 were sold, built on plot 2, and the infrastructure work concerning sectors A and B of the property has been completed. Including, among others, the road coastal, roundabouts, lights, landfills and stormwater and sewage connections for USD 3.2 million. Likewise, the barter of Plot 2 was signed with the same developer of Plot 1 and the works started at the end of 2022 (see “-Intangibles - Units to be received under barter agreements -Zetol S.A. and Vista al Muelle S.A. - Plot 2 Carrasco Boating - District of Canelones - Uruguay”).

Neuquén Residential Plot- Neuquén, Province of Neuquén

Through Shopping Neuquén S.A., IRSA owns a plot of 13,000 square meters with an estimated construction capacity of 57,000 square meters of residential properties in an area with significant growth potential. This area is located close to the shopping mall Alto Comahue and the hypermarket currently in operation.

Retail

Coronel Diaz and Beruti Building - City of Buenos Aires

In February 2022, IRSA purchased by means of public auction from the GCBA, a property located at the corner of the intersections of Beruti Street and Coronel Díaz Avenue. Such property is located in front of Alto Palermo Shopping, a shopping center owned by IRSA, located in the neighborhood of Palermo, one of the main commercial corridors of the City of Buenos Aires.

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The property has an area of approximately 2,387 sqm, consisting of a first floor, six upper levels and a basement area. Furthermore, it has a total covered area of approximately 8,137 sqm with future expansion potential.

The purchase price was ARS 2,158.6 million, which was paid in full by IRSA.

As of the date of this Annual Report, the transfer deed of ownership was signed. Simultaneously with the deed, IRSA is required to sign a bailment agreement with the GCBA, with the latter holding the property free of charge for a period of up to 30 months, in accordance with the conditions agreed upon in the auction.

Offices

Polo Dot offices 2 and 3 - City of Buenos Aires

These two parcels of 6,400 square meters with a construction capacity of 38,400 square meters each, are located adjoining to where the extension of Dot Baires Shopping is planned. As a result of important developments, the intersection of Av. General Paz and Panamericana have experienced great growth in recent years. In April 2018, both plots were unified into a single one of 12,800 square meters.

Paseo Colón 245 Building and Paseo Colón 275 Parking spaces - City of Buenos Aires

On December 28, 2022, IRSA was allotted by two Public Auctions (2901 and 2902) carried out by the GCBA, for a property located at Paseo Colón 245 and 12 parking spaces at Paseo Colón 275. The property, with mixed-use potential, has 13 office floors in a covered area of approximately 13,690 sqm and a basement with parking spaces. The purchase price was ARS 1,434.8 million, which was fully paid.

On May 29, 2023, the deed was signed and simultaneously was signed a bailment agreement contract with the GCBA, that will hold the property free of charge for a period of 18 months (with the option to extend it for 6 additional months under rental agreement), in accordance with the conditions agreed upon in the auction.

Intercontinental Plaza II Plot - City of Buenos Aires

In the heart of the neighborhood of Monserrat, just a few meters from the most trafficked avenue in the city and the financial center, is the Intercontinental Plaza complex consisting of an office tower and the exclusive Intercontinental Hotel. In the current plot of 6,135 square meters a second office tower of 19,597 square meters and 25 stories could be built to supplement the tower currently located in the intersection of Moreno and Tacuarí streets.

Córdoba Shopping Adjoining Plots - Residential

On the parking lot of the Córdoba Shopping mall, IRSA has a land on which we can build an office tower of up to 4,823 sqm, in accordance with Ordinance 12,860 of the Municipality of Córdoba.

Other Land Reserves

Conil - Avellaneda, Province of Buenos Aire

These plots of land we own, through IRSA, face the Alto Avellaneda shopping mall, totaling 2,398 square meters distributed in two opposite corners and, according to urban planning standards, around 6,000 square meters may be built. Its intended use, either through IRSA’s own development or sale to a third party, is residential with the possibility of a retail space as well. In November 2014, a barter deed was executed to carry out a residential development, in consideration of which IRSA will receive 1,389 square meters of retail stores located on the ground floors of blocks 99 and 95 at Güemes 836 and Güemes 902, respectively. The barter was valued at USD 0.7 million. Considerations for block 95 and 99 were stipulated to be delivered in January 2018 and September 2018, respectively. In June 2018 an extension to the barter agreement was signed. In consideration for the delay and as compensation, IRSA will receive an additional apartment (55.5 square meters) and one parking lot (14 square meters). On June 27, 2023, the closing of the barter was signed, which corresponds to the delivery of 2 retail spaces with 1,389 sqm, 2 apartments and 4 parking spaces, considered inventories and the reincorporation of Plot B as land reserve.

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Other Land Reserves - Pilar, Pontevedra, San Luis Plot and Llao Llao Plot.

IRSA grouped here those plots of land with a significant surface area the development of which is not feasible in the short term either due to their current urban and zoning parameters, their legal status or the lack of consolidation of their immediate environment. This group totals around 3.3 million square meters.

Others

La Rural (convention centers and fairs activities) and La Arena (Directv Arena concession)

In relation to the investment in La Rural S.A., its main activity includes the organization of congresses, fairs, exhibitions and events and is carried out by LRSA, both at the Palermo Fairgrounds and at the “Centro de Exposiciones y Convenciones de la Ciudad Autónoma de Buenos Aires” through a Transitory Union of Companies that obtained, by public tender, the concession of this property for a period of 15 years and the “Punta del Este Convention and Exhibition Center”. IRSA has an indirect participation of 35%.

Ogden Argentina S.A., indirectly controlled by IRSA by 70%, owns an 82.85% stake in “La Arena S.A.”, a company that developed and operates the stadium previously known as “DirecTV Arena”, located in the kilometer 35.5 of the Pilar branch, Tortuguitas, in the province of Buenos Aires.

During the fiscal year 2023, the entertainment and social events industry recovered the activity to levels existing prior to the Covid-19 pandemic, receiving numerous visitors and strengthening relationships with its long-standing stakeholders. The fair calendar recovered its maximum activity and, as a result, each fair, event, congress, business meeting had satisfactory results.

We believe that these trends position the segment very favorably for fiscal year 2024, in which it is expected to have a high level of trade fair activity, social and corporate events, as well as conventions, with the expectation of the return of international congresses, thus achieving the recovery of the business tourism sector. 

GCDI S.A. (real estate)

GCDI is a construction company listed on the ByMA which is mainly engaged in the construction of third-party projects and residential development projects in Argentina and Uruguay. As of June 30, 2023, IRSA holds a 27.82% interest in GCDI.

We are appa S.A. (formerly Pareto S.A.)

On October 8, 2018, the company We are appa was incorporated, with the social purpose of design, programming and development of software, mobile and web applications. As of June 30, 2023, We are appa S.A. had 53 employees and IRSA’s share of We are appa reached 98.67%.

We are appa’s mission is to minimize the friction of physical shopping by applying data science and artificial intelligence, connecting buyers and sellers in a unique experience.

Through its application, ¡appa!, We are appa provides shopping malls and tenants a 100% digital customer loyalty system that promotes benefits and discounts by facilitating the consumer experience.

During the year, users of ¡appa! carried out more than 700,000 transactions on the platform, including consumption in shopping malls, use of parking spaces, and redemption of corporate benefits. Of these, approximately 636,000 visitor transactions were identified in IRSA shopping malls, corresponding to consumption of more than ARS 3,100 million by 204,000 users. This information allows the teams of the shopping malls to manage their communications and actions in a more efficient and segmented way that results in greater loyalty and attractiveness of the shopping malls’ proposal towards its visitors.

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Avenida Inc.

As of June 30, 2023, IRSA indirectly owned 4.1% of Avenida Inc., a company dedicated to the e-commerce business.

Compara en casa

Compara en casa is a digital insurance broker that compares the policies of the main insurers in one place. They operate in Argentina, Brazil, Mexico, Paraguay and Uruguay.

As of June 30, 2023, IRSA indirectly owned 14.87% of Comparaencasa S.A.

Turismo City

IRSA owns indirectly 9,22% of Rundel Global Ltd., commercially known as Turismo City, which is a company that holds interest in different business related with tourism and travel assistance in Argentina, Brazil and Chile.

Banco Hipotecario

As of June 30, 2023, IRSA held a 29.91% of the equity of Banco Hipotecario. Established in 1886 by the Argentine government and privatized in 1999, Banco Hipotecario has historically been Argentina’s leading mortgage lender, provider of mortgage-related insurance and mortgage loan services. All its operations are located in Argentina where it operates a nationwide network of 62 branches in the 23 Argentine provinces and the City of Buenos Aires.

Banco Hipotecario is an inclusive commercial bank that provides universal banking services, offering a wide variety of banking products and activities, including a wide range of individual and corporate loans, deposits, credit and debit cards and related financial services to individuals, small-and medium-sized companies, and large corporations. As of April 2023, Banco Hipotecario ranked sixteenth in the Argentine financial system in terms of total assets and eighteenth in terms of loans. As of June 30, 2023, Banco Hipotecario’s shareholders’ equity was ARS 85,202.4 million, its consolidated assets were ARS 672,049.9 million, and its net income for the six-month period ended June 30, 2023, was ARS 8,670 million. Since 1999, Banco Hipotecario’s shares have been listed on the BASE, and since 2006 it has had a Level I ADR program.

Banco Hipotecario’s business strategy is to continue diversifying its loan portfolio. The Bank’s non-mortgage loans to the non-financial private sector, in nominal terms, were ARS 36,851 million as of December 31, 2019, ARS 40,522.8 million as of December 31, 2020, ARS 48,760.9 million as of December 31, 2021, ARS 61,353.5 million as of December 31, 2022, and ARS 76,970.5 million as of June 30, 2023.

Also, Banco Hipotecario has diversified its funding sources by developing its presence in the local and international capital markets, as well as increasing its deposit base. As of June 30, 2023, its capital markets debt representing 3.2% of its total funding.

Banco Hipotecario’s subsidiaries include BACS Banco de Crédito y Securitización S.A., a bank specialized in investment banking, asset securitization and asset management, from which Banco Hipotecario owns directly 62.3% and IRSA owns directly 37.7%; BHN Vida S.A., a life insurance company; and BHN Seguros Generales S.A., a property insurance company.

Regulation and Government Supervision of our Agricultural Business

Farming and Animal Husbandry Agreements

Agreements relating to farming and animal husbandry activities are regulated by Argentine law, the Argentine Civil and Commercial Code and local customs.

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According to Law No. 13,246, as amended by Law No. 22,298, all lease agreements related to rural properties and land are required to have a minimum duration of 3 years, except in the case of those designated as “accidental agreements” pursuant to Section 39, subsection a), Law No. 13,246. Upon death of the tenant farmer, the agreement may continue with his successors. Upon misuse of the land by the tenant farmer or default in payment of the rent, the landowner may initiate an eviction proceeding.

Law No. 13,246, amended by Law No. 22,298, also regulates sharecropping agreements pursuant to which one of the parties furnishes the other with animals or land for the purpose of sharing benefits between the parties. These agreements are required to have a minimum term of duration of 3 years, although the rule of Section 39 of Law No. 13,246 on accidental agreements for smaller terms also applies in this case. The agreement is not assignable under any circumstance whatsoever, unless expressly agreed by the parties. Upon death, disability of the tenant farmer or other impossibility, the agreement may be terminated.

Quality control of Crops and Cattle

The quality of the crops and the health measures applied on the cattle are regulated and controlled by the Servicio Nacional de Sanidad y Calidad Agroalimentaria (“SENASA”), which is an entity within the Agro-industry Ministry that oversees farming and animal sanitary activities.

Argentine law establishes that the brands should be registered with each provincial registry and that there cannot be brands alike within the same province.

Sale and Transportation of Cattle

Even though the sale of cattle is not specifically regulated, general contract provisions are applicable. Further, every province has its own rural code regulating the sale of cattle.

Argentine law establishes that the transportation of cattle is lawful only when it is done with the respective certificate that specifies the relevant information about the cattle. The required information for the certificate is established by the different provincial regulations, the inter-provinces treaties and the regulations issued by the SENASA.

Environment

The development of our agribusiness activities is regulated by a series of national, provincial, and municipal laws and regulations that promote the protection of the environment.

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

On November 6, 2002, the Argentine Congress passed Law No. 25,675. This law regulates the minimum standards for the achievement of a sustainable environment and the preservation and protection of biodiversity and sets environmental policy goals. Moreover, Law No. 25,675 establishes the activities that will be subject to an environmental impact assessment procedure and certain requirements applicable thereto. In addition, the Law sets forth the duties and obligations that will be triggered by any damage to the environment and imposes the obligation to restore it to its former condition or, if that is not technically feasible, to pay a compensation in lieu thereof. The Law also fosters environmental education and provides for certain minimum obligations to be fulfilled by natural and artificial persons.

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On November 28, 2007, the Argentine Congress passed a law known as the Forest Law which sets minimum standards for the conservation of native forests and incorporates minimum provincial expenditures to promote the protection, restoration, conservation and sustainable use of native forests. The Forest Law prevents landowners, including owners of native forests, from deforesting or converting forested areas into non-forested land for other commercial uses without prior permission from each local government that gives the permit and requires the preparation, assessment and approval of an environmental impact report. The Forest Law also provides that each province should adopt its own legislation and regional regulation map within a term of one year. Until such provincial implementation is carried into effect, no new areas may be deforested. In addition, the Forest Law also establishes a national policy for sustainable use of native forests and includes the recognition of native communities and aims to provide preferential use rights to indigenous communities living and farming near the forest. In case a project affects such communities, the relevant provincial authority may not issue permits without formal public hearings and written consent of the communities.

As a consequence of non-compliance with re rules we may be subject to criminal and administrative penalties, including taking action to reverse the adverse impact of our activities on the environment and to reimburse third parties for damages resulting from contraventions of environmental laws and regulations. Under the Argentine Criminal Code, persons (including directors, officers and managers of corporations) who commit crimes against public health, such as poisoning or dangerously altering water, food or medicine used for public consumption and selling products that are dangerous to health, without the necessary warnings, may be subject to fines, imprisonment or both. Some courts have enforced these provisions in the Argentine Criminal Code to sanction the discharge of substances which are hazardous to human health. At the administrative level, the penalties vary from warnings and fines to the full or partial suspension of the activities, which may include the revocation or annulment of tax benefits, cancellation or interruption of credit lines granted by state banks and a prohibition against entering into contracts with public entities.

The Forestry Legislation of Argentina prohibits the devastation of forests and forested lands, as well as the irrational use of forest products. Landowners, tenants, and holders of natural forests require an authorization from the Forestry Competent Authority for the cultivation of forest land. The legislation also promotes the formation and conservation of natural forests in properties used for agriculture and farming purposes.

In accordance with legislative requirements, we have applied for approval to develop certain parts of our land reserves and were authorized to develop them partially and to maintain other areas as land reserves. We cannot assure you that current or future development applications will be approved, and if so, to what extent we will be allowed to develop our land reserves. We intend to use genetically modified organisms in our agricultural activities. In Argentina, the development of genetically modified organisms is subject to special laws and regulations and special permits.

Law No. 27,566, passed on October 16, 2020, approves the “Regional Agreement on Access to Information, Public Participation and Access to Justice in Environmental Matters in Latin America and the Caribbean” (the “Escazú Agreement”) by Argentine Republic. The Escazú Agreement aims to guarantee the full and effective implementation in Latin America and the Caribbean of the rights of access to environmental information, public participation in environmental decision-making processes and access to justice in environmental matters, as well as the creation and strengthening of capacities and cooperation, contributing to the protection of the right of each person, of present and future generations, to live in a healthy environment and to sustainable development. It is the only binding agreement emanating from the United Nations Conference on Sustainable Development (Rio+20), the first regional environmental agreement in Latin America and the Caribbean and the first in the world to contain specific provisions on human rights defenders in environmental matters.

In addition to the current legislation, the CNV Rules provide that publicly traded companies whose corporate purpose includes environmentally hazardous activities should report to their shareholders, investors and the general public their compliance with the applicable environmental laws and risks inherent to such activities, so as to be able to reasonably assess such hazards.

Regulation and Argentine government Supervision

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

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Leases

Argentine law imposes certain restrictions on property owners, including a minimum lease term of three years for all purposes, except in particular cases such as embassy, consulate or international organization venues, room with furniture for touristic purposes for less than three months, custody and bailment of goods, exhibition or offering of goods in fairs or in cases where due to the circumstances, the subject matter of the lease agreement is the fulfillment of a purpose specified in the agreement and which requires a shorter term. For more information see “Item 3. Key Information—D. Risk Factors – Risk Relating to Argentina - Certain measures that may be taken by the Argentine Government, or changes in policies, laws and regulations, may adversely affect the Argentine economy and, as a result, our business, financial condition and results of operations.” 

Limits on lease terms

Under the Argentine Civil and Commercial Code lease terms may not exceed fifty years, irrespective of the intended use of the property (residential use, maximum term is twenty years). Generally, terms in our lease agreements go from 3 to 10 years.

Rescission rights

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

Other

Most of our leases provide that the tenants pay all costs and taxes related to the property in proportion to their respective leasable areas. Notwithstanding the foregoing, in accordance with the latest amendment to Article 1209 of the Argentine Civil and Commercial Code, the tenant is not responsible for the payment of charges and contributions levied on the property or extraordinary common expenses. In the event of a significant increase in the amount of such costs and taxes, the Argentine government may respond to political pressure to intervene by regulating this practice, thereby adversely affecting our rental income. Although the Argentine Code of Civil and Commercial Procedure allows the landlord, in the event of non-payment of rents, to proceed to collect the rents through an executory proceeding, there is a large amount of jurisprudence that holds that shopping center lease agreements do not fulfill the requirements of the law in force to be collected through the executory proceeding. In those cases, in which executory proceedings are granted, debtors have fewer defenses available to prevent foreclosure, making these proceedings substantially shorter than ordinary ones. In executory proceedings, the origin of the debt is not under discussion; the trial focuses on the formalities of debt instrument itself. The Code also permits special eviction proceedings, which are carried out in the same way as ordinary proceedings. The Argentine Civil and Commercial Code requires that a notice be given to the tenant demanding payment of the amounts due in the event of breach prior to eviction, of no less than ten days for leases for residential purposes and establishes no limitation or minimum notice for leases for other purposes. However, historically, large court dockets and numerous procedural hurdles have resulted in significant delays to eviction proceedings, which generally last from six months to two years from the date of filing of the suit to the time of actual eviction.

Development and use of the land

Buenos Aires Urban Planning Code. Our real estate activities are subject to several municipal zoning, building, occupation, and environmental regulations. In the City of Buenos Aires, where the vast majority of the real estate properties are located, there are the following regulations:

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Buenos Aires Urban Planning Code

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

Buenos Aires Building Code.

The Buenos Aires Building Code (Código de Edificación de la Ciudad de Buenos Aires) complements the Buenos Aires Urban Planning Code and regulates the structural use and development of property in the City of Buenos Aires. The Buenos Aires Building Code requires builders and developers to file applications for building permits, including the submission to the Secretary of Work and Public Services (Secretaría de Obras y Servicios Públicos) of architectural plans for review, to assure compliance therewith.

Sales and ownership

Buildings Law. Buildings Law No. 19,724 (Ley de Pre horizontalidad) was repealed by the new Argentine Civil and Commercial Code which became effective on August 1, 2015. The new regulations provide that for purposes of execution of agreements with respect to build units or units to be built under this the building’s regime, the owner is required to purchase insurance in favor of prospective purchasers against the risk of frustration of the operation pursuant to the agreement for any reason. A breach of this obligation prevents the owner from exercising any right against the purchaser such as demanding payment of any outstanding installments due - unless he/she fully complies with their obligations but does not prevent the purchaser from exercising its rights against the seller.

Protection for the Disabled Law. The Protection for the Disabled Law No. 22,431, enacted on March 20, 1981, as amended, provides that in connection with the construction and renovation of buildings, obstructions to access must be eliminated in order to enable access by handicapped individuals. In the construction of public buildings, entrances, transit pathways and adequate facilities for mobility impaired individuals must be provided for.

Buildings constructed before the enforcement of the Protection for the Disabled Law must be adapted to provide accesses, transit pathways and adequate facilities for mobility-impaired individuals.

Those pre-existing buildings, which due to their architectural design may not be adapted to the use by mobility-impaired individuals, are exempted from the fulfillment of these requirements.

The Protection for the Disabled Law provides that residential buildings must ensure access by mobility impaired individuals to elevators and aisles. Architectural requirements refer to pathways, stairs, ramps and parking.

Real Estate Installment Sales Law. The Real Estate Installment Sales Law No. 14,005, as amended by Law No. 23,266 and Decree No. 2015/85, imposes a series of requirements on contracts for the sale of subdivided real estate property regarding, for example, the sale price which is paid in installments and the deed, which is not conveyed until final payment of such price. The provisions of this law require, among other things:

The registration of the intention to sell the property in subdivided plots with the Real Estate Registry 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.

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Once the property is registered, the installment sale may not occur in a manner inconsistent with the Real Estate Installment Sales Act, unless the seller registers its decision to desist from the sale in installments with the Real Estate Registry. In the event of a dispute over the title between the purchaser and third-party creditors of the seller, the installment purchaser who has duly registered the purchase instrument with the Real Estate Registry will obtain the deed to the plot. Further, the purchaser can demand conveyance of title after at least 25% of the purchase price has been paid, although the seller may demand a mortgage to secure payment of the balance of the purchase price.

After payment of 25% of the purchase price or the construction of improvements on the property equal to at least 50% of the property value, the Real Estate Installment Sales Act prohibits the recission of the sales contract for failure by the purchaser to pay the balance of the purchase price. However, in such an event the seller may take action under any mortgage on the property.

Plan for the Transformation and Reconversion of the City of Buenos Aires Downtown.

In December 2021, the law for the transformation of the downtown area of the City of Buenos Aires was passed in order to convert that area into a residential, intelligent and sustainable urban area, through the promotion of the development of economic activities strategic activities, granting tax benefits to those who make investments aimed at the development of said area (such as the exemption of income derived from the development of strategic activities that will be exempt from gross income until December 2023). Additionally, it is expected that the Banco de la Ciudad will grant lines of credit aimed at promoting the realization of reconversion projects of real estate located within the downtown area (for example, incentives for the acquisition of housing and/or rental, “Move to the Microcentro” program), as well as for the acquisition of equipment related to the strategic activities to be developed in said area. Reconversion projects may be submitted until January 31, 2024.

Other regulations

Consumer Relationship. Consumer or End User Protection. The Argentine Constitution expressly established in Article 42 that consumers and users of goods and services have a right to protection of health, safety and economic interests in a consumer relationship. Consumer Protection Law No. 24,240, as amended, regulates several issues concerning the protection of consumers and end users in a consumer relationship, in the arrangement and execution of contracts.

The Consumer Protection Law, and the applicable sections of the Argentine Civil and Commercial Code are intended to regulate the constitutional right conferred under the Constitution on the weakest party of the consumer relationship and prevent potential abuses deriving from the stronger bargaining position of vendors of goods and services in a mass-market economy where standard form contracts are widespread.

As a result, the Consumer Protection Law and the Argentine Civil and Commercial Code deem void and unenforceable certain contractual provisions included in consumer contracts entered into with consumers or end users, including those which:

(1)	deprive obligations of their nature or limit liability for damages;
(2)	imply a waiver or restriction of consumer rights and an extension of seller rights; and
(3)	impose the shifting of the burden of proof against consumers.

In addition, the Consumer Protection Law imposes penalties ranging from warnings to fines from 0.5 to 2,100 “canastas básicas total para el hogar 3” published by the INDEC, the seizure of merchandise, closing down of establishments for a term of up to 30 days, suspension of up to 5 years in the State suppliers register, the forfeiture of concession rights, privileges, tax regimes or special credits to which the sanctioned party was entitled. These penalties may be imposed separately or jointly. For reference, the current value of each “canasta básicas total para el hogar 3” is ARS 229,199.46, according to the INDEC.

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The Consumer Protection Law and the Argentine Civil and Commercial Code define consumers or end users as the individuals or legal entities that acquire or use goods or services free of charge or for a price for their own final use or benefit or that of their family or social group. In addition, both laws provide that those who though not being parties to a consumer relationship as a result thereof acquire or use goods or services, for consideration or for non-consideration, for their own final use or that of their family or social group are entitled to such protection rights in a manner comparable to those engaged in a consumer relationship.

In addition, the Consumer Protection Law defines the suppliers of goods and services as the individuals or legal entities, either public or private that in a professional way, even occasionally, produce, import, distribute or commercialize goods or supply services to consumers or users.

The Argentine Civil and Commercial Code defines a consumer agreement as such agreement that is entered into between a consumer or end user and an individual or legal entity that acts professionally or occasionally either with a private or public company that manufactures goods or provides services, for the purpose of acquisition, use or enjoyment of goods or services by consumers or users for private, family or social use.

It is important to point out that the protection under the laws afforded to consumers and end users encompasses the entire consumer relationship process (from the offering of the product or service) and it is not only based on a contract, including the consequences thereof.

In addition, the Consumer Protection Law establishes a joint and several liability system under which for any damages caused to consumers, if resulting from a defect or risk inherent in the thing or the provision of a service, the producer, manufacturer, importer, distributor, supplier, seller and anyone who has placed its trademark on the thing or service shall be liable.

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

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

Pursuant to Resolution No. 104/05 issued by the Secretariat of Technical Coordination reporting to the Argentine Ministry of Economy, Consumer Protection Law adopted Resolution No. 21/2004 issued by the MERCOUR which requires that those who engage in commerce over the Internet (E-Business) shall disclose in a precise and clear manner the characteristics of the products and/or services offered and the sale terms. Failure to comply with the terms of the offer is deemed an unjustified denial to sell and gives rise to sanctions.

On September 17, 2014, a new Consumer Protection Law was enacted by the Argentine Congress -Law No. 26,993. This law, known as “System for Conflict Resolution in Consumer Relationships,” provided for the creation of new administrative and judicial procedures for this field of Law. It created a two-instance administrative system: (i) the Preliminary Conciliation Service for Consumer Relationships (Servicio de Conciliación Previa en las Relaciones de Consumo, COPREC); and (ii) the Consumer Relationship Audit, and a number of courts assigned to resolution of conflicts between consumers and producers of goods and services (Fuero Judicial Nacional de Consumo). In order to file a claim, the amount so claimed should not exceed a fixed amount equivalent to 55 adjustable minimum living wages, which are determined by the Argentine Ministry of Labor, Employment and Social Security. The claim is required to be filed with the administrative agency. If an agreement is not reached between the parties, the claimant may file the claim in court. The administrative system known as COPREC is currently in full force and effect. However, the court system (fuero judicial nacional de consumo) was transferred to the scope of the City of Buenos Aires. creating the Jurisdiction in Contentious Administrative, Tax and Consumer Relations of the City of Buenos Aires, enacting Law 6407 by which was statutory the New Code of Procedure for Justice in the Consumer Relations of the City of Buenos Aires, which is currently in force, attributing jurisdiction for all consumer disputes that arise in the City of Buenos Aires without disregarding the full force and effect of different instances for administrative claims existing in the provincial sphere and the City of Buenos Aires, which remain in full force and effect, where potential claims related to this matter could also be filed.

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Antitrust Law

Law No. 27,442 and its administrative regulation’s goals are to prevent and punish anticompetitive practices and, accordingly, it requires administrative authorization for transactions that according to the Antitrust Law constitute an economic concentration. Pursuant to this law, mergers, transfers of goodwill, acquisitions of property or rights over shares, capital or other convertible securities, or similar operations by which the acquirer controls or substantially influences a company, are considered as an economic concentration. The Antitrust Law provides that whenever an economic concentration involves one or more companies and the total business volume of the group of the affected companies (which include the acquiring group, the target company and the controlled companies, group or assets subject to the acquisition, but excludes the volume of business of the companies of the selling group), exceeds in Argentina 100 million mobile units that, according to Resolution 63/2023 of the Secretary of Trade of the Ministry of Economy, published in the Official Gazette on February 3, 2023, is equivalent to the sum of ARS 16,225,000,000 (since the adjusted value of each mobile was set by such resolution at ARS 162.55), then the respective concentration must be filed with the CNDC for analysis and authorization. “Total business volume” means to be the amounts resulting from the sale of products, the provision of services performed, and the direct subsidies received by the companies affected during the last fiscal year that correspond to their ordinary activities, after the deduction of discounts on sales, as well as on VAT and other taxes directly related to turnover.

The request for authorization may be filed, either prior to the transaction or within a week after its completion. Nevertheless, upon the first anniversary of the establishment of the new CNDC (which is yet to be set up), the filing requesting the authorization may only be submitted in advance.

When a request for approval is filed, the CNDC may (i) authorize the transaction, (ii) subordinate the transaction to the accomplishment of certain conditions, or (iii) reject the authorization.

The Antitrust Law establishes exceptions to the notification obligation, including when economic concentrations in which the transaction amount and the value of the assets absorbed, acquired, transferred, or controlled in Argentina, do not exceed, in each case, 20 million mobile units that, according to the Resolution of the Secretary of Trade of the Ministry of Economy, currently represent ARS 3,251,000,000, such transactions are exempted from the administrative authorization. Notwithstanding the foregoing, when the transactions effected by the companies concerned during the prior 12-month period exceed 20 million mobile units (as of the date hereof, ARS 1,105,000,800) or 60 million mobile units in the previous 36 months that, according to said Resolution, is currently equivalent to the sum of ARS 9,753,000,000, these operations they must be notified to the CNDC.

As our consolidated annual sales volume and our parent’s consolidated annual sales volume exceed ARS 16,225,000,000, in cases of concentrations in which we are the acquiring party we should give notice to the CNDC of any concentration provided for by the Antitrust Law, provided that cases of exception to the notification obligation of article 11 of the Antitrust Law do not arise.

Money laundering

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

Environmental Law

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

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

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On November 6, 2002, the Argentine Congress passed Law No. 25,675, which regulates the minimum standards for the achievement of a sustainable environment and the preservation and protection of biodiversity and fixes environmental policy goals.

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

On August 4, 2004, the Argentine Congress passed Law No. 25,916 by means of which the minimum environmental protection guidelines for the integral management of residential, commercial and industrial waste were established. This law denotes integral management as a set of interdependent and complementary activities, which make up a process of actions for the management of household waste (that includes residence, urban, commercial and/or industrial, among others) in order to protect the environment and the population’s quality of life. This law establishes that the integral management of household waste consists of the following stages: generation, initial disposal, collection, transfer, transportation, treatment and final disposal. Competent authorities are determined by local jurisdictions.

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

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

Insurance

We carry all-risk insurance for our shopping malls and other buildings covering damages to the property caused by fire, acts of terrorism, explosion, gas leak, hail, storm and winds, earthquakes, vandalism, theft and business interruption. We also have civil liability insurance covering all potential damages to third parties or goods arising from the development of our businesses throughout the whole Argentine territory. We are in compliance with all the legal requirements relating to mandatory insurance, including statutory coverage under the Occupational Risk Law, life insurance required under collective bargaining agreements and other insurance required by the laws and decrees. Our history of damages is limited to only one claim made as a result of a fire in Alto Avellaneda Shopping in March 2006, in which the loss was substantially recovered from our insurers. These insurance policies have all the specifications, limits and deductibles that are customary in the market and which we believe are adequate for the risks to which we are exposed in our daily operations. We also purchased civil liability insurance to cover our Directors’ and officers’ liability.

Sustainability

Sustainability is a central pillar of our organization. Our policy is based on the United Nations Sustainable Development Goals, and we work in that direction internally in our teams and externally through our value chain, operating as agents of social and environmental change. We seek to apply the best agricultural practices in our fields through the responsible use of natural resources and the most modern and sustainable technologies, with the mission of producing quality food for a growing world population.

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The agricultural activity that we carry out allows us to interact with communities throughout the national territory since we have fields from Salta to Santa Cruz. We live daily with nature and the social challenges that each region offers us. We listen to the communities and give individual responses to each one in order to accompany them in their development.

We work with schools, community centers and NGOs throughout Argentina. In the eight rural schools located in Salta, Santa Fe and Chaco, we focus our Social Responsibility programs taking education, health, and environmental care as pillars, while we have made building improvements. In our establishment “Los Pozos”, located in the north of Argentina and where we contribute with six rural schools (one of which was built by the Company), many students are already attending and graduating from high school remotely through satellite internet and we plan to improve the educational level by working together with civil organizations.

We promote transformations that boost economic activity in the territory, hand in hand with access to social, health and educational services, as well as housing and better infrastructure, including communications technology. Our view of development goes beyond business profitability and adds aspects associated with quality of life, in its broadest sense. The company contributes with its own role, but also aims to be an actor in innovation, social cohesion, and the construction of possibilities.

Environmental Management

Agricultural Business

Environmental management is a commitment assumed by CRESUD, which is declared through its Environmental Policy, and manifests itself in everyday management.

· We are committed to the environment.

· We innovate in the use of best practices for the development of our activities.

· We work to achieve a balance between the efficient use of resources and a growing production.

· We care about the relationship with our people and the communities where we choose to work, of which we are a part.

· We plan for the long term, seeking to develop in a sustainable way so that our environment can also be enjoyed by future generations.

· We work towards continuous improvement and compliance with current legislation and regulations, including those to which we voluntarily subscribe.

· We are part of a process of cultural change, which we share and extend to the people with whom we interact.

We are aware of the impacts caused by the activities we develop, and we strive to prevent and mitigate them. The responsible management of natural and human resources and the protection of the environment is part of our daily tasks:

· We comply with applicable and current regulations at the municipal, provincial, and national levels.

· We evaluate the environmental aspects and impacts of our operations and take prevention and control measures to reduce and mitigate them: We work in interdisciplinary teams to address the impacts and prevention and control measures.

· We make rational and efficient use of natural resources, applying the best practices in our fields, homes, and offices.

· We promote differentiated waste management through reduction, reuse, and recycling

· The gates of our fields are open to the community, regulatory bodies, customers, suppliers, employees, and other interested parties to share our work model, technological innovations and the results achieved.

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Environmental Certifications

2BSvs program (Biomass Biofuels Sustainability voluntary scheme):

The 2BSvs certification is a French scheme, which applies to the European Union, aimed at the sustainable production of biomass. It is relevant for producers, in which sustainability criteria are established for the use in biofuels the raw material must come from lands that have been agricultural as of January 1, 2008. There must be documentary traceability between the soybeans produced and the biodiesel distributed in Europe and biofuels must demonstrate GHG (greenhouse gas) emissions savings of 35% compared to fossil fuel, among other aspects related to good agricultural, environmental, social and labor practices.

During the 2022/2023 campaign, we certificated 40,000 tons of soybeans under this standard.

RTRS (Round Table on Responsible Soy):

The RTRS standard, renowned in the agricultural sector and highly valued by the international market, recognizes the Company’s commitment to compliance with laws and good business practices, the provision of good working conditions, respect and relationship with local communities, care for the environment and production under good agricultural practices.

This standard guarantees zero deforestation and zero conversions in soy production, taking 2009 as the cut-off date for native forest. The RTRS certification for Responsible Soy Production is valid for five years and involves mandatory annual follow-up audits.

CRESUD began the process of certifying soybean lots with this standard at its El Tigre establishment, in the province of La Pampa, and in June 2023, we certified 4,157 hectares of soybean production corresponding to the 22/23 campaign.

ProTerra Program:

The ProTerra Standard is based on the Basel Criteria for Responsible Soy Production, published in 2004. It has four basic objectives:

1. Promote good agricultural practices.

2. Guarantee the supply of NON-GMO ingredients for feed and food, sustainably produced and with complete traceability.

3. Protect the environment.

4. Encourage that rural workers and communities are treated with dignity and respect.

The packaging seal of ProTerra products is a means by which they can communicate directly to consumers and interested parties their commitment to sustainability and non-GMO use. The ProTerra seal guarantees the consumer that the product was produced in a sustainable and traceable manner and meets NON-GMO requirements.

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During the 2022/2023 campaign, we produced 28,268 hectares of NON-GMO crops in Argentina.

RWS (Responsible Wool Standard):

RWS is a global voluntary standard, which addresses the welfare of sheep and land management practices, providing key differentiation and full wool traceability. International Agricultural Organization (OIA), a leading certification company, audits each stage of the supply chain to ensure that all program requirements are met.

Products may contain 100% certified wool or blends, ranging from 5% to 99% certified wool. Only products containing 100% certified wool can be labeled with the RWS logo. The advantages are the protection of animal welfare, the preservation of the health of the land and the traceability of the supply chain.

Our 8 de Julio farm, located in the province of Santa Cruz, received the RWS certification in 2022 on good practices in shearing.

Urban business

As part of IRSA’s strategy, IRSA seeks to achieve high standards of environmental certification in its real estate projects with the aim of having a modern and sustainable portfolio. Our shopping malls located in the City of Buenos Aires are already part of the Circular Economy Network. It is an initiative of the Government of the City of Buenos Aires that creates an articulated workspace between the different actors that are part of society (companies, NGOs and universities) to build a more sustainable city. Alto Palermo Shopping, Dot Baires Shopping, Alcorta Shopping, Patio Bullrich, Distrito Arcos and Abasto Shopping have already signed the adhesion. 

It implies that the commitment and effort to work on different actions that strengthen recycling and promote the circular economy. This seeks to redefine what growth is, with an emphasis on the benefits for all of society. This implies separating economic activity from the use of non-renewable resources and reducing (or eliminating) the generation of garbage. It is made up of seven principles: reflect, reject, reduce, redistribute, reclaim, reuse and recycle.

Córdoba Shopping advanced with the second stage of the Comprehensive Waste Management Plan from the Circular Economy Paradigm. The implementation of new practices and habits was deepened to reduce waste generation, increasing reuse and recycling. The Circular Economy helps transform the economy towards a sustainable future. IRSA intends to implement this project in all the shopping malls in the country in the following years and Alto Palermo shopping mall joined this project with a diagnosis, survey and implementation of Comprehensive Waste Management under the paradigm of the circular economy.

The Ministry of Public Space and Urban Hygiene of the city of Buenos Aires granted the Green Seal to the Alto Palermo shopping:

· This Seal is part of the initiative of the Circular Economy Network.

· Alto Palermo is the first shopping mall that is certified. It obtained a 2-star rating, which implies good practices and a commitment to responsible waste management.

The certification process includes training for both tenants and their own employees and audits carried out by the local government.

During next year IRSA will carry out the recertification of Alto Palermo and soon IRSA will add Dot Baires Shopping to become the second shopping mall with a Green Seal. These actions not only benefit the malls but also encourage some tenants to certify this Seal. In this way IRSA helps a greater number of companies to be part of the Circular Economy Network.

Thanks to the Green Seal certification, IRSA’s professionals were able to participate in various workshops and work groups, provided by the local government, such as the Training “Green City Ambassadors”, “Waste Management in the City”, among others.

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The latest office buildings developed by IRSA, “261 Della Paolera” and “Zetta” have the LEED Gold Core & Shell (Leadership in Energy and Environmental Design) seal. This certification, renowned in the sector and valued by the market, recognizes IRSA’s commitment to sustainable real estate development, incorporating into construction aspects related to energy efficiency, improvement of indoor environmental quality, water consumption efficiency, the sustainable development of the free spaces on the plot and the selection and recycling of materials.

As of the date of presentation of the Financial Statements, 74% of the premium office portfolio has LEED certification and several tenants are in the process of certifying their interiors, promoting energy and environmental design, quality of life and healthy work spaces.

Energy, water and waste management

The efficient use of resources, as well as the proper management of the waste generated in our activities, are extremely important in our day to day. For this reason, we carry out various tasks to guarantee proper environmental management:

Energy: Actions are continuously carried out to minimize consumption as much as possible, which includes:

· Improvements in air conditioning technologies,

· facilities maintenance and constant monitoring,

· awareness campaigns on the care of the resource to own personnel, tenants, and customers,

· in IRSA’s offices IRSA automate the meeting rooms lights turning on and off through sensors that detect movement, preventing the light from remaining on when the room is not being used,

· IRSA automate the speed of escalators, slowing them down when they are not being used,

· regarding luminaires, in all our shopping centers the replacement towards LED technology is being carried out.

Water: Water consumption is mainly destined for sanitary supply, food court sector in shopping malls, facilities cleaning and irrigation.

· Sanitary facilities have a Pressmatic or similar command system that allows water savings of around 20% compared to past technologies.

· In those establishments where it is possible, thanks to the facilities and availability of the place, rainwater is recovered for other uses, mainly irrigation.

· Distrito Arcos is an open-air shopping mall with plant beds that are irrigated with rainwater. On rainy days, the water accumulates in underground tanks and is used to irrigate the beds on the days when it does not rain.

· The chosen irrigation system is drip, as it is highly efficient. In the latest office buildings developed by the company: 261 Della Paolera and the “Zetta Building”, rainwater is also used to irrigate their flower beds.

· In properties’ toilets, low consumption sanitary fixtures and fittings are chosen, through timers installations, infrared sensors and aerators, making an efficient use of the resource.

Waste: IRSA promote the reduction of waste, and is pioneer in management for recycling. In all our shopping centers, separation is carried out at source into Wet (non-recyclable) and Dry (recyclable) fractions. In four of them, Alto Rosario, Alcorta, Alto Palermo and Arcos Districts, a third fraction called Organic is separated, generated in the preparation of food in gastronomic establishments. These residues are removed by the Municipalities for composting. The material obtained is used for the landscaping of boulevards and public flowerbeds.

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In the southern part of the City of Buenos Aires, in addition to the separation of organics, arid waste, PET and pruning remains are collected. There is a modern aerobic fermentation plant that speeds up the composting process of organic waste.

IRSA continues working to add more properties and reduce the waste sent to landfills. IRSA works on a waste management system that allows to recycle a significant fraction of the material produced in its establishments. In turn, IRSA develop new ways and opportunities to integrate with social organizations and cooperatives in order to value the recovered materials.

With a frequency of four times a week, up to daily, the removal of recyclable materials is carried out. IRSA works with cooperatives and local organizations, that through the collection, classification and commercialization of recyclable materials, allow the neighbors to find a means of subsistence and a source of income.

IRSA works with tenants continuously reinforcing the correct management of waste, communicating through circulars and tours. Remembering the materials to be separated in each of the three fractions (recyclable, humid and organic), the corresponding bag color (according to current regulations) and the sectors where they are collected.

IRSA promotes the transformation into biodiesel of the vegetable oil used by the gastronomic tenants of our shopping malls. Used vegetable oils (UVOs) are generated in the kitchens of gastronomic stores that are used in frying and cooking.

Each tenant has a collection and accumulation circuit for these oils to be used as an input in a production process: the production of biodiesel. IRSA works with companies authorized for this purpose such as RBA Ambiental. In this way, contamination of the water is avoided by not draining the oils through the usual kitchen pipes and giving a second use to the resources.

Education and training program

IRSA has developed an education and training program in environmental management, regarding waste and efficient use of resources such as water and energy. Training and actions are carried out aimed at shopping mall staff, establishment tenants and related suppliers, involving urban waste recovery cooperatives to share their experience, learn about their work and the importance of carrying out adequate waste management.

Information Security

We believe that information security and governance of critical data is important to us. As a result, we have an information security management which is independent from the information technology management and is integrated into our compliance management. This information security management has an individual annual budget and a strategy which is based on two principles: (i) the continuous review and improvement of our information security model; and (ii) a National Institute of Standars and Technology (NIST)-based cybersecurity framework. 

This strategy allows to identify, protect, detect, respond to and recover our systems and data against potential threats, and is constantly being evaluated. This strategy also generates an adequate integration of security in business processes, minimizing the risks and impact that may materially affect us or our subsidiaries.

This strategy allows to identify, protect, detect, respond to and recover our systems and data against potential threats, and is constantly being evaluated. This strategy also generates an adequate integration of security in business processes, minimizing the risks and impact that may materially affect us or our subsidiaries.

Within this governance model there are controls and processes that allow us to supervise and monitor our corporate information security strategy and to carry out investments and initiatives which allow us to achieve our business goals.

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Cybersecurity

Our main Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) systems have the levels of protection and recovery against contingencies that allow us to be prepared for the constant evolution of cyberattacks. During 2023, some of our cybersecurity initiatives included raising awareness on various cybersecurity matters such as phishing, identity theft, secure password management and other cyber threats. Protective measures have also been strengthened through the use of expanded automated detection and response tools.

In recent years, the average number of cybersecurity incidents has increased significantly worldwide. Therefore, we focus on preventing the most frequent cyberattacks, which are related to ransomware (virtual file hacking), malware, phishing and executive impersonation (BEC - Business Email Compromise), among others.

Technological innovation

We know that investment in new technologies contributes not only to productive efficiency but also to the development of a sustainable and efficient activity in the use of resources. It is because of that:

· We strive to implement good agricultural practices such as crop rotation, direct seeding, integrated pest management.

· We use inputs efficiently to ensure the maximum return with the minimum environmental impact. Using tools such as directed applications of agrochemicals as well as variable planting by adjusting the number of seeds and fertilizers.

· Through the flight of unmanned aircraft with remote sensors, we monitor crops and obtain vegetation indices for a better agronomic diagnosis.

· Using satellite images, soil maps and rainfall maps, we define the capacity for land use and carry out activities based on their suitability, whether for livestock or agriculture. Soil analysis are carried out every year to assess their condition and if any correction is needed based on the crop to be planted. We are working with INTA to define an indicator that can help us monitor the state of our soils and their evolution.

· Every year we increase the area of “cover crops”. With the aim of improving soil fertility and water quality, controlling weeds and pests, and increasing biodiversity in agroecological production systems (Lu et al, 2000). Reducing the use of fertilizers and phytosanitary products, making a more rational and efficient use of water, whether from rain or irrigation.

· We also work on the integrated control of pests and weeds, carrying out constant monitoring and applications. In the case of weeds through the “WeedSeeker” technology, which applies phytosanitary products only where the weeds are found. In this way we reduce the unnecessary use of chemical products protecting the soil, water, flora, and local fauna.

· A large part of the planting area is carried out using variable planting technology, determining the potential of each environment within each lot with the aim of improving the use of inputs and making an optimal distribution of them, whether seeds or fertilizers. In some cases, the “Precision Planting” system is used to further improve planting quality.

· We carry out quality controls in all our tasks, sowing, harvesting, spraying, fertilization, etc. In addition, checks are carried out on each of our machines, before and during the work, to have the best quality in all our work.

· In irrigation, soil moisture, forecasts and satellite images are permanently monitored, to use the least amount of water possible. We have underground drip irrigation that increases the efficiency of the system, avoiding resource losses due to evapotranspiration. The groundwater is also monitored to ensure that there are no agrochemical residues.

· All the farms have meteorological stations for weather monitoring and the possibility of making productive decisions.

· Monitoring of natural resources is carried out through measurements of energy consumption, water, flora and fauna, quality of productive and reserve soils.

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Fundación IRSA

Fundación IRSA was created in 1996 with the purpose of generating programs and accompanying initiatives that promote the integral development of people with a special focus on education, human well-being and social inclusion. Likewise, it supports organizations in society with the conviction that only through joint work and networking can the true changes necessary to achieve full citizenship and an equitable and inclusive society be achieved.

The work of the Fundación IRSA is framed in 4 lines of action that open innovative paths in the construction of a sense of community. These pillars are:

Education: training, cultural learning and research in education are promoted to enhance the development of people. With the intention of accompanying and developing projects that provide new training opportunities in the formal and non-formal educational field for the growth of society.

Together with other social organizations, it works for the recognition of the value that exists in identity and respect for diversity, since its inception it finances the “Education Observatory” for the construction of statistical data on Argentine Education with evidence, consensus, and collaboration. Social. For 6 years, it has been promoting the training of young professionals in technical and bachelor’ degrees that make up the Argentine medical care system, with a special focus on nutrition, early childhood and nursing.

Human well-being: understanding human well-being as an aspect that crosses the whole human being and brings it closer to its needs for access to information, material goods, psychological, affective, inspiring to lead a dignified life, good health, food, and good social relations. Fundación IRSA seeks to focus on research and assistance to help reduce differences in a context concerned with health. Since 2014, it has been investing in improving hospital equipment and providing state-of-the-art devices and health supplies to hospitals and health centers in our country. Fundación IRSA, together with other entities, financed the creation of the GDFE Health Observatory, an initiative that seeks to contribute to the construction of public-private consensus for the design, implementation, and support of State policies with health rationality, a legal perspective and effectiveness tested.

Also, with the aim of contributing to the most vulnerable populations having a healthy diet, it allocates economic resources for more than 20 community kitchens and 2,900 people with the objective that they complement the monthly diet with fruits, vegetables, meats, and dairy products and can provide themselves with cleaning and personal hygiene items.

Insertion / inclusion: contributes with special interest in an area that worries society, in the context of an economic and health crisis; with two specific lines of action, associated with “Employability” and “Violence”. “Employability”, associated with the set of skills and talents that allow a person to be able to find and keep a job. With a focus on the age group over 40 years old, generating new opportunities for job insertion and reinvention. And “Violence” through research and generating evidence that can collaborate with the updating and improvement of the public policy system.

Since 2021, Fundación IRSA has been the main investor in the creation of the first “Observatory on First Practices for Addressing Child Abuse”. During the first year, together with “Red por la Infancia”, a first survey was carried out on the regulatory framework and current public policies on all forms of violence that have an impact on the lives of children and adolescents. After completing its first stage, it is proposed to gather evidence to contribute to the construction of a diagnosis of the situation and identify the degree of normative development, the pending challenges at the legislative level, the degree of progress in public policies and in the administration of justice in protection of children against violence.

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The need to influence 4 fundamental axes to generate a virtuous circle that produces systemic changes in prevention and response was confirmed:

1. Strengthen regulatory frameworks for the protection of children against violence.

2. Improve the architecture and design of prevention, protection, and response systems for violence against children and adolescents.

3. Influence the customs, beliefs, mandates, and values that tolerate, minimize, and therefore perpetuate violence against children intergenerationally.

4. Involve the private sector and the media in the protection of violence against children and adolescents.

Strengthening: strengthens the institutional capacity of non-profit organizations through their cooperation and alliance. In this sense, Fundación IRSA accompanies social organizations throughout the country so that they can achieve their mission, grow and develop.

Since March, for example, more than 1,060 outerwear and 170 items have been delivered to 5 foundations and NGOs through the “Revaluation of Materials” program, in which funds are collected and classified (lost objects of customers in shopping malls) to then be distributed.

Also, it continues with the internal MultipliDAR program through which all employees of IRSA companies are offered the possibility of multiplying their personal donations to civil society organizations in their reference world to strengthen their solidarity initiative. Through the Multiplidar program, the amount that the collaborator has previously donated to the entity is equalized, doubled, and tripled.

During the fiscal year 2023, Fundación IRSA worked with 87 civil society organizations making a direct social investment of ARS 250.4 million.

Puerta 18 Foundation

“Puerta 18” Foundation is a free space for artistic and technological creation for young people from 13 to 24 years old. Through a non-formal education proposal, it encourages the development of skills, vocations and talents in young people through the multiple resources offered by technology.

Throughout its 15 years, more than 5,000 young people received free training and today there are more than 250 who have found employment in areas related to their training at the institution. Two years ago, the foundation for pursuing objectives of “common good” achieved recognition from the IGJ so that through article 81c, the donations received can be deductible from profits, encouraging more companies to join and amplify the impact.

Our gaze is based on placing the young person at the center of the proposal, which revolves around his interests and needs, and where educators act as facilitators using technology as a tool. Some of the disciplines we work with are: Graphic Design, Photography, UX, Programming, Comprehensive Video Production, 3D Modeling and Animation, Videogames, Robotics, among others.

Currently, the Foundation offers activities for +70 young people per day on average, both in the 13-18 age bracket and +18, concentrating all its actions at the headquarters on Zelaya Street. In turn, together with #DigitAR, they awarded scholarships to 12 young people to continue their training studies in other study centers, expanding their social capital, deepening their knowledge, and significantly improving their job opportunities.

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Fundación Museo de los Niños

Museo de los Niños Abasto is an interactive museum that recreates the spaces of a city where children can play to be a doctor, cameraman, captain, sailor, banker, cook, broadcaster, journalist, nurse, actress, mom, dad and many more things.

The Museum proposes an enriching and alternative meeting space that integrates play, movement, perception, understanding and expression, encouraging curiosity, interest in knowing and imagination from a transforming point of view. Based on the Declaration of the Rights of the Child, it has been designed to encourage each child to develop their own potential: “learning by doing” and “playing and having fun while learning” are fundamental concepts for the Museum.

The Museum is dedicated to children up to 12 years of age, their families, educators and, through all of them, the community. And for the little ones, up to 3 years old, it has two soft rooms specially built to stimulate their activity.

In addition, it has an Exhibition Hall and an Auditorium where shows, film screenings, conferences, book presentations and various events are held.

Museo de los Niños has been declared:

- Of educational interest by the Argentina’s Ministry of Education. Resolution No. 123.

- Of cultural interest by the Secretary of Culture and Communication of the Presidency of Argentina. Resolution No. 1895.

- Of cultural interest by the Secretary of Culture of the Buenos Aires City Government.

- Of cultural interest by the INADI (National Institute against Discrimination, Xenophobia and Racism).

- Of tourist interest by the Secretary of Tourism of the Presidency of Argentina. Resolution No. 281.

- Sponsorship of the secretary of education of the government of the City of Buenos Aires. resolution no. 537.

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C. Organizational Structure

Subsidiaries and associated companies

The following table includes a description of our direct subsidiaries and associated companies as of June 30, 2023:

Companies	Effective Ownership and Voting Power Percentage	Property/Activity
Agro-Uranga S.A.	34.86%	Agro-Uranga S.A. is an agricultural company which owns 2 farmlands (Las Playas and San Nicolás) that have 8.299 hectares on the state of Santa Fe and Córdoba.
Uranga Trading S.A.	34.86%	Uranga Trading S.A. is committed to facilitate and optimally manage the trade of grains of the highest quality, locally and internationally.
Brasilagro Companhia Brasileira de Propiedades Agrícolas	37.88%(1)(3)	Brasilagro is mainly involved in four areas: sugar cane, crops and cotton, forestry activities, and livestock.
Futuros y Opciones.Com S.A.	49.55%	A leading agricultural web site which provides information about markets and services of economic and financial consulting through the Internet. The company has begun to expand the range of commercial services offered to the agricultural sector by developing direct sales of supplies, crops brokerage services and cattle operations.
Amauta Agro S.A. (formerly known as FyO Trading S.A.)	98.57%(2)	Amauta Agro S.A.’s purpose is to engage, in its own name or on behalf of or associated with third parties, in activities related to the production of agricultural products and raw materials, export and import of agricultural products and national and international purchases and sales of agricultural products and raw materials.
FyO Acopio S.A. (formerly known as Granos Olavarria S.A.)	98.57%(2)	FyO Acopio S.A. is principally engaged to the warehousing of cereals and brokering of grains.
Helmir S.A.	100%	Helmir S.A. is involved in investments in entities organized in Uruguay or abroad through the purchase and sale of bonds, shares, debentures and any kind of securities and commercial paper under any of the systems or forms created or to be created, and to the management and administration of the capital stock it owns on companies controlled by it.
IRSA Inversiones y Representaciones Sociedad Anónima	56.93%(1)(3)	It is a leading Argentine company devoted to the development and management of real estate.

(1)	Excludes effect of treasury stock.
(2)	Includes Futuros y Opciones.Com S.A.’s interest.
(3)	Includes Helmir’s interest.

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D. Property, Plants and Equipment

Overview of Agricultural Properties

As of June 30, 2023, we owned, together with our subsidiaries, 27 farmlands, which have a total surface area of 616,803 hectares.

The following table sets forth our properties’ size (in hectares), primary current use and book value. The market value of farmland is generally higher the closer a farmland is located to Buenos Aires:

	Facility	Province	Country	Gross Size (in hectares)	Date of Acquisition	Primary Current Use	Net Book Value (ARS Million) (1)
1	El Recreo	Catamarca	Argentina	12,395	May ‘95	Natural woodlands	113
2	Los Pozos (4)	Salta	Argentina	239,639	May ‘95	Cattle/ Agriculture/ Natural woodlands	11,155
3,4	San Nicolás/Las Playas (2)	Santa Fe/Córdoba	Argentina	2,893	May ‘97	Agriculture/ Dairy	1,364
5	La Gramilla/ Santa Bárbara	San Luis	Argentina	7,072	Nov ‘97	Agriculture Under irrigation	3,049
6	La Suiza	Chaco	Argentina	26,371	Jun ‘98	Agriculture/ Cattle	2,418
7	El Tigre	La Pampa	Argentina	8,360	Apr ‘03	Agriculture/ Dairy	3,231
8	San Pedro	Entre Rios	Argentina	3,584	Sep ‘05	Agriculture	2,520
9	8 de Julio/ Estancia Carmen	Santa Cruz	Argentina	100,911	May ‘07/ Sep ‘08	Sheep	803
10	Administración Cactus	San Luis	Argentina	171	Dec ‘97	Natural woodlands	49
11	Los Sauces	La Pampa	Argentina	1,250	Jun ‘23	Agriculture	1,204
12,13,14	Las Londras/San Rafael/ La Primavera (3)	Santa Cruz	Bolivia	10,020	Nov-08/Jun-11	Agriculture	6,708
15	Finca Mendoza	Mendoza	Argentina	674	Mar ‘11	Natural woodlands	-
16	Establecimiento Mendoza	Mendoza	Argentina	9	Nov’03	Natural woodlands	460
17	Marangatú/Udra (3)	Mariscal Estigarribia	Paraguay	58,722	Feb‘09	Agriculture /Natural Woodlands	13,562
18/27	Brasilagro (3)		Brasil	144,732		Agriculture/ Forestry/Cattle	61,821
				616,803			108,457

(1)	Acquisition costs plus improvements and furniture necessary for the production, less depreciation.
(2)	Hectares and carrying amount in proportion to our 34.86% interest in Agro-Uranga S.A.
(3)	See the section “Overview of BrasilAgro’s Properties”.
(4)	On October 5, 2023, the company has informed that it has sold a 4,262 hectares fraction of land reserve with productive potential of “Los Pozos” farm, keeping the ownership of approximately 235,300 hectares of the property. For more information see: “Recent developments-Cresud’s Recent Developments-Los Pozos fraction sale”.

Overview of BrasilAgro’s Properties

As of June 30, 2023, we owned, together with our subsidiaries, 14 farmlands, which have a total surface area of 213,474 hectares, acquired at a highly convenient value compared to the average of the region, all of them with a great appreciation potential.

		Total Area			Net book Value
Properties	Place	(ha)		Use	(ARS Million)		(USD Million)
Jatobá Farmland	Jaborandi/BA		8,868	Agriculture		7,916		31
Alto Taquari Farmland	Alto Taquari/MT		1,380	Agriculture		1,034		4
Chaparral Farmland	Correntina/BA		37,182	Agriculture		9,288		36
Nova Buriti Farmland	Januária/MG		24,212	Forestry		1,353		5
Preferência Farmland	Barreiras/BA		17,799	Cattle		2,049		8
São José Farmland	Maranhão/MA		17,566	Agriculture		6,555		26
Marangatu/ Udra Farmlands	Boqueron Paraguay		58,722	Agriculture		13,562		53
Arrojadinho Farmland	Barreiras/BA		16,642	Agriculture		7,128		28
Rio do Meio Farmland	Correntina/BA		5,750	Agriculture		8,039		31
Serra Grande Farmland	Piaui/BA		4,489	Agriculture		2,362		9
Las Londras/San Rafael/ La Primavera	Bolivia		10,020	Agriculture		6,708		26
Panamby Farmland	Mato Grosso/BA		10,844	Agriculture		16,097		63
			213,474			82,091		320

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Overview of Urban Properties and investment business

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

The following table sets forth certain information about our properties for the Urban Properties and investment business as of June 30, 2023:

Property(6)	Date of Acquisition	Leasable/ Sale sqm / Rooms (1)	Location	Net Book Value ARS(2)	Use	Occupancy rate
Bankboston Tower (13)	Aug-07	-	City of Buenos Aires	719	Office Rental	N/A
Bouchard 551	Mar-07	-	City of Buenos Aires	1,470	Office Rental	N/A
Intercontinental Plaza Building	Nov-97	2,979	City of Buenos Aires	5,198	Office Rental	100.0%
Dot Building	Nov-06	11,242	City of Buenos Aires	18,704	Office Rental	51.6%
Zetta Building	Jun-19	32,173	City of Buenos Aires	56,758	Office Rental	94.6%
Phillips Building	Jun-17	8,017	City of Buenos Aires	11,755	Office Rental	41.9%
San Martín plot (ex Nobleza Picardo)	May-11	109,610	Province of Buenos Aires, Argentina	20,949	Other Rentals	22.5%
Other Properties (5)	N/A	N/A	City and Province of Buenos Aires / Detroit U.S	14,900	Other Rentals	N/A
Abasto Shopping	Nov-99	37,167	City of Buenos Aires, Argentina	25,991	Shopping Mall	99.5%
Alto Palermo Shopping	Dec-97	20,629	City of Buenos Aires, Argentina	30,110	Shopping Mall	100.0%
Alto Avellaneda	Dec-97	39,457	Province of Buenos Aires, Argentina	17,874	Shopping Mall	92.5%
Alcorta Shopping (16)	Jun-97	15,839	City of Buenos Aires, Argentina	19,341	Shopping Mall	96.1%
Patio Bullrich	Oct-98	11,396	City of Buenos Aires, Argentina	8,212	Shopping Mall	92.7%
Alto Noa	Nov-95	19,427	City of Salta, Argentina	4,375	Shopping Mall	100.0%
Mendoza Plaza	Dec-94	41,511	Mendoza, Argentina	6,566	Shopping Mall	99.1%
Alto Rosario	Dec-04	34,859	Santa Fe, Argentina	17,542	Shopping Mall	9.4%
Córdoba Shopping -Villa Cabrera (11)	Dec-06	15,368	City of Córdoba, Argentina	5,048	Shopping Mall	97.7%
Dot Baires Shopping	May-09	47,811	City of Buenos Aires, Argentina	20,200	Shopping Mall	98.6%
Soleil Premium Outlet	Jul-10	15,673	Province of Buenos Aires, Argentina	7,495	Shopping Mall	100.0%
La Ribera Shopping	Aug-11	10,531	Santa Fe, Argentina	2,505	Shopping Mall	96.8%
Distrito Arcos	Dec-14	14,458	City of Buenos Aires, Argentina	10,560	Shopping Mall	100.0%
Alto Comahue	Mar-15	11,700	Neuquén, Argentina	6,252	Shopping Mall	96.7%
Patio Olmos	Sep-97	-	City of Córdoba, Argentina	3,778	Shopping Mall	N/A
Beruti Parking Space	N/A	-	Ciudad de Buenos Aires	2,221	Shopping Mall	N/A
Caballito Plot of Land	Nov-97	-	City of Buenos Aires	15,033	Land Reserve	N/A
Santa María del Plata	Oct-97	693,445	City of Buenos Aires	172,562	Other Rentals	25.9%
Ezpeleta Plot of land	May-22	-	Province of Buenos Aires, Argentina	7,932	Other Rentals	N/A
Beruti and Coronel Diaz Building	Jun-22	-	City of Buenos Aires	6,273	Other Rentals	N/A
Paseo Colon Building	May-23	-	City of Buenos Aires	2,255	Other Rentals	N/A
Catalinas Building	May-10	8,516	City of Buenos Aires	22,754	Offices and Other Rentals	100.0%
Luján plot of land	May-08	1,160,000	Province of Buenos Aires, Argentina	4,210	Mixed uses	N/A
Other Land Reserves (4)	N/A	N/A	City and Province of Buenos Aires	30,389	Land Reserve	N/A
Other Developments (15)	N/A	N/A	City of Buenos Aires	78	Properties under development	N/A
Buildable potentials (14)	N/A	N/A	City of Buenos Aires, Córdoba and Santa Fé	13,005	Other Rentals	N/A
Intercontinental Hotel (7) (12)	Nov-97	313	City of Buenos Aires	5,132	Hotel	66.4%
Libertador Hotel (8) (12)	Mar-98	200	City of Buenos Aires	936	Hotel	57.2%
Llao Llao Hotel (9)(10) (12)	Jun-97	205	City of Bariloche	7,194	Hotel	76.7%
Others (3)	N/A	N/A	City and Province of Buenos Aires	520	Others	N/A

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(1)	Total leasable area for each property. Excludes common areas and parking spaces.
(2)	Shopping Malls, Offices and Land Reserves are valued at fair value. Our Hotels are valued at cost of acquisition or development plus improvements, less accumulated depreciation, less allowances.
(3)	Includes EH UT.
(4)	Includes the following land reserves: Pontevedra plot, San Luis Plot, Pilar plot and Intercontinental Plot, Annexed to Dot Plot, Mendoza Plot, Casona Husdon Plot, Mendoza 2.992 East Av. Plot, Mendoza Bandera de los Andes 3027 plot, Güemes 902 plot (Conil), Córdoba plot, Neuquén plot and La Plata plot.
(5)	Includes the following properties: Anchorena 665, Anchorena 545 (Chanta IV), Zelaya 3102 y 3103, Madero 1020, Abasto Offices, Suipacha 664, La Adela, Paseo del Sol, Libertador 498, Beruti 3330/3336/3358 Paseo del sol.
(6)	Percentage of occupation of each property. Land reserves are assets that the company keeps in the portfolio for future developments.
(7)	Through Nuevas Fronteras S.A.
(8)	Through Hoteles Argentinos S.A.U.
(9)	Through Llao Llao Resorts S.A.
(10)	Includes “Terreno Bariloche.”
(11)	The cinema building located at Córdoba Shopping - Villa Cabrera is included in Investment Properties, which is encumbered by a right of antichresis as a result of loan due to Empalme by NAI INTERNACIONAL II Inc.
(12)	Express in number of rooms.
(13)	The offices were totally sold during the fiscal year ended June 30, 2021.
(14)	Includes buildable potentials related to the following shopping malls: Patio Bullrich, Alto Palermo, Córdoba Shopping and Alto Rosario.
(15)	Includes PH Office Park.
(16)	Includes “Ocampo parking spaces”.

Insurance

Agricultural Business

We carry insurance policies with insurance companies that we consider to be financially sound. We employ multi-risk insurance for our farming facilities and industrial properties, which covers property damage, negligence liability, fire, falls, collapse, lightning and gas explosion, electrical and water damages, theft, and business interruption. Such insurance policies have specifications, limits and deductibles which we believe are customary. Nevertheless, they do not cover damages to our crops. We carry directors and officer’s insurance covering management’s civil liability, as well as legally mandated insurance, including employee personal injury. We also provide life or disability insurance for our employees as benefits.

We believe our insurance policies are adequate to protect us against the risks for which we are covered. Nevertheless, some potential losses are not covered by insurance and certain kinds of insurance coverage may become prohibitively expensive.

The types of insurance used by us are the following:

Insured Property	Risk Covered	Amount Insured (in Millions of ARS)		Book Value (in Millions of ARS)
Buildings, machinery, silos, installation and furniture and equipment	Theft, fire and technical insurance		12,266		31,335
Vehicles	Theft, fire and civil and third parties liability		596		216

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Urban Properties and Investment Business

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

Control Systems

IRSA has computer systems equipped to monitor tenants’ sales in all of its shopping malls. IRSA also conducts regular revenues audits of our tenants’ accounting sales records in all of our shopping malls. IRSA uses the information generated from the computer monitoring system to prepare statistical data regarding, among other things, total sales, average sales and peak sale hours for marketing purposes and as a reference for the revenues audit. Most of its shopping mall lease agreements require the tenant to have its point of sale system linked to our server.

Item 4A. Unresolved Staff Comments

This item is not applicable.

Item 5. Operating and Financial Review and Prospects

A. Operating Results

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

The objective of this Management’s Discussion and Analysis section is to provide a description of our economic and financial condition as of June 30, 2023 and for the fiscal year then ended, particularly considering that the operating results for fiscal year 2021 have been affected by the restrictions due to the Covid-19 pandemic. Our shopping malls and hotels were closed for most of the year 2021 while the offices remained operational, even though most of the tenants adopted the remote work modality. In this sense, the purpose of this management’s discussion and analysis is to describe the impact of the pandemic and other macroeconomic or operational drivers over our business segments in order to explain the reasons or causes that originate our results of operations. 

General

We prepare our Audited Consolidated Financial Statements in Pesos and in accordance with IFRS, as issued by the IASB, and with CNV Rules. 

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We have determined that, as of July 1, 2018, the Argentine economy qualifies as a hyperinflationary economy according to the guidelines of IAS 29 since the total cumulative inflation in Argentina in the 36 months prior to July 1, 2018, exceeded 100%. IAS 29 requires that the financial information recorded in a hyperinflationary currency be adjusted by applying a general price index and expressed in the measuring unit (the hyperinflationary currency) at the end of the reporting period. Therefore, our Audited Consolidated Financial Statements included in this Annual Report have been adjusted by applying a general price index and expressed in the measuring unit (the hyperinflationary currency) currently at the end of the reporting period (June 30, 2023). See “Risk Factors-Risks Relating to Argentina-A high level of uncertainty with regard to these economic variables, and a general lack of stability in terms of inflation, could have a negative impact on economic activity and adversely affect our financial condition”.

Revenue recognition

The Company identifies contracts with customers and evaluates the goods and services committed therein to determine performance obligations and their classification between performance obligations that are satisfied at a given time or over time.

Revenue from satisfaction of performance obligations at a given time is recognized when the client obtains control of the committed asset or service considering whether there is a right to collection, if the client has the physical possession, if the client has the legal right and if they have transferred the risks and benefits.

In accordance with IFRS 15, the Company recognizes revenues over time from the sales of real estate developments in which there is no alternative use for the asset and the Company has the right to demand payment of the contract. When these conditions are not met, the income is recognized at the time of delivery or deed, depending on the case, when the risk transfers are completed, the collection is reasonably assured and there is a price already determined.

Revenue from satisfaction of performance obligations over time for real estate developments is recognized by measuring progress towards compliance with the obligation when it can be measured reliably. For this measurement, the Company uses the input method, that is, the effort consumed by the entity and determines the percentage of progress based on the estimate of the total development costs.

The Company’s revenue is recognized at the probable value of the consideration to which it will be entitled in exchange for transferring the products or services to the customer which is not expected to suffer significant changes.

Agricultural activities

Revenue from our agricultural activities comes primarily from sales of agricultural produce and biological assets, from provision of services related to the activity and from leases of farmlands.

We also provide agricultural-related (including but not limited to watering and feedlot services) and brokerage services to third parties. Revenue from services is recognized when services are effectively rendered.

We also lease land to third parties under operating lease agreements. Lease income is recognized on a straight-line basis over the period of the lease.

· Sale of goods

Revenue from sales of grains and sugarcane sales is recognized when performance obligations are met, which consists of transforming the significant risks and benefits of ownership of the goods are transferred to the purchaser, usually when the products are delivered to the purchaser at the determined location, according to the agreed sales terms.

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In the case of grains, the Company normally enters into forward contracts under which the Company is entitled to determine the sale price for the total or partial volume of grains sold, through the delivery date, based on formulas contractually agreed upon. In some cases, the formulas used to determine the sales price are stated in U.S. dollars.

Upon the delivery of grains, revenue is recognized based on the price determined for each client considering the foreign exchange rate on the delivery date when applicable. After the grains are delivered to the client, the quality and final weight are assessed, and the final price of the transaction is agreed upon, which result in adjusting the original contractual amounts, and any foreign exchange rate variation through the settlement date.

· Sale of farms

Revenue from sale of farms is not recognized until performance obligations are met, which consists of: (i) the sale be in completed, (ii) the Company has determined that it is probable the buyer will pay, (iii) the amount of revenue can be measured reliably, and (iv) the Company has transferred all risks and rewards to the buyer and does not have a continuing involvement. Usually this coincides with the buyer making the first down payment, moment when the transfer of possession is completed, according to the contractual terms. The result from sales of farms is presented in the statement of income as “Gain from disposal of farmlands” net of the related cost.

· Sales of beef cattle

Revenue from the sale of beef cattle is recognized when performance obligations are met, which consists of transferring the material risks and the benefits of cattle ownership to the buyer, usually when the cattle is delivered to the buyer at the specified place, in accordance with the terms of the sale agreed upon.

As for the sale of beef cattle, the Company’s operation consists basically of a project involving the production and sale of beef calves after weaning (this process is called rearing). However, some animals that prove to be infertile may be sold to meat packers for slaughtering. At Paraguay operations, the project consists in fattening and selling these animals for slaughtering. The pricing for sale of cattle is based on the market price of the arroba of fed cattle in the respective market (the arroba price is verified on the transaction date), the animal weight, plus the premium related to the category. The sale of cattle in Brazil and Paraguay operations, in turn, considers the price of the arroba of fed cattle or heifer/cow on the date of sale in the respective market, applied to carcass yields.

Urban properties and investments activities

· Rental and services - Shopping malls portfolio

Revenues derived from business activities developed in our shopping malls mainly include rental income under operating leases, admission rights, commissions and revenue from several complementary services provided to our lessees.

The Argentine Civil and Commercial Code section 1221 provides that tenants may rescind commercial lease within the initial six months by means of written notification. If option is used within the first year of the lease, the Tenant shall pay the Lessor, as compensation, the equivalent of one-and-a-half month’s rent, and one month’s rent if the tenant makes use of the option after that period. Given that the rule does not provide for advance notice, Lease Agreements include a provision whereby the lessee must give at least 60 days advance notice of its intention to terminate the lease. The exercise of such early termination could materially and adversely affect us.

We have determined that, in all operating leases, the lease term for accounting purposes matches the term of the contract. We concluded that, even though a lease is cancellable under law, tenants would incur significant “economic penalties” if the leases are terminated prior to expiry. We considered that these economic penalties are of such amount that continuation of the lease contracts by tenants appears to be reasonably certain at the inception of the respective agreements. We reached this conclusion based on factors such as: (i) the strategic geographical location and accessibility to customers of our investment properties; (ii) the nature and tenure of tenants (mostly well-known local and international retail chains); (iii) limited availability of identical revenue-producing space in the areas where our investment properties are located; (iv) the tenants’ brand image and other competitive considerations; (v) tenants’ significant expenses incurred in renovation, maintenance and improvements on the leased space to fit their own image; (vi) the majority of our tenants only have stores in shopping malls with a few or none street stores. See details in Note 24 to our Audited Consolidated Financial Statements.

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Lessees of rental space located within shopping malls are generally required to pay the higher of: (i) a base monthly rent (the “Base Rent”) and (ii) a specific percentage of gross monthly sales recorded by the Lessee (the “Contingent Rent”), which generally ranges between 2% and 12% of the lessees’ gross sales. In addition, in accordance with the standard terms of the typical commercial lease, the Base Rent is usually increased at that time by the Consumer Price Index (CPI) in Argentina.

In addition, some leases include provisions that set forth variable rent based on specific volumes of sales revenue and other types of ratios.

Rental income from shopping malls, admission rights and commissions, are recognized in the Consolidated Statement of Income and Other Comprehensive Income on a straight-line basis over the term of the leases. When lease incentives are granted, they are recognized as an integral part of the net consideration for the use of the property and are therefore recognized on the same straight-line basis.

Contingent rents, i.e. lease payments that are not fixed at the inception of a lease, are recorded as income in the periods in which they are known and can be determined. Rent revisions are recognized when such reviews have been agreed with tenants.

Tenants in our shopping malls are also generally charged a non-refundable admission right upon entering a lease contract or renewing an existing one. Admission rights are treated as additional rental income and recognized in the Consolidated Statement of Income and other Comprehensive Income on a straight-line basis over the term of the respective lease agreement.

We act as our own leasing agent for arranging and closing lease agreements for our shopping malls properties and consequently earn letting fees. Letting fees are paid by tenants upon the successful closing of an agreement. A transaction is considered successfully concluded when both parties have signed the related lease contract. Letting fees received by us are treated as additional rental income and are recognized in the Consolidated Statement of Income and Other Comprehensive Income on a straight-line basis over the term of the lease agreements.

Our lease contracts also provide that common area maintenance charges and collective promotion funds of our shopping malls are borne by the corresponding lessees, generally on a proportional basis. These common area maintenance charges include all expenses necessary for various purposes including, but not limited to, the operation, maintenance, management, safety, preservation, repair, supervision, insurance and enhancement of the shopping malls. The lessor is responsible for determining the need and suitability of incurring a common area expense. We make the original payment for such expenses, which are then reimbursed by the lessees. We consider that it acts as a principal in these cases. Service charge income is presented separately from property operating expenses. Property operating expenses are expensed as incurred.

Under the terms of the leases, lessees also agree to participate in collective promotion funds (“CPF”) to be used in advertising and promoting our shopping malls. Each lessee’s participation generally equals a percentage calculated based on the monthly accrued rental prices.

Revenue so derived is also included under rental income and services segregated from advertising and promotion expenses. Such expenses are charged to income when incurred.

On the other hand, revenue includes income from managed operations and other services such as car parking spaces. Those revenues are recognized on an accrual basis as services are provided.

· Rental and services - Offices and other rental properties

Rental income from offices and other rental properties include rental income from offices leased out under operating leases, income from services and expenses recovery paid by tenants.

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Rental income from offices and other rental properties is recognized in the Statement of Income on a straight-line basis over the term of the leases. When lease incentives are granted, they are recognized as an integral part of the net consideration for the use of the property and are therefore recognized on the same straight-line basis.

A substantial portion of our leases requires the tenant to reimburse us for a substantial portion of operating expenses, usually a proportionate share of the allocable operating expenses. Such property operating expenses include necessary expenses such as property operating, repairs and maintenance, security, janitorial, insurance, landscaping, leased properties and other administrative expenses, among others. We manage our own rental properties. We make the original payment for these expenses, which are then reimbursed by the lessees. We consider that we act as a principal in these cases. We accrue reimbursements from tenants as service charge revenue in the period the applicable expenditures are incurred and are presented separately from property operating expenses. Property operating expenses are expensed as incurred.

· Revenue from communication services and sale of communication equipment

Revenue derived from the use of our communication networks, including mobile phones, Internet services, international calls, fixed line calls, interconnection rates and roaming service rates and television, are recognized when the service is provided, proportionally to the extent the transaction has been realized, and provided all other criteria have been met for revenue recognition.

Revenue from the sale of mobile phone cards is initially recognized as deferred revenue and then recognized as revenue as they are used or upon expiration, whichever takes place earlier.

A transaction involving the sale of equipment to a final user normally also involves a service sale transaction. In general, this type of sale is performed without a contractual obligation by the client to consume telephone services for a minimum amount over a predetermined period. As a result, we record the sale of equipment separately of the performance obligations and recognize revenue pursuant to the transaction value upon delivery of the equipment to the client. Revenue from telephone services is recognized and accounted for as they are provided over time. When the client is bound to make a minimum consumption of services during a predefined period, the contract formalizes a transaction of several elements and, therefore, revenue from the sale of equipment is recorded at an amount that should not exceed its fair value and is recognized upon delivery of the equipment to the client and provided the criteria for recognition are met. We ascertain the fair value of individual elements, based on the price at which it is normally sold, after taking into account the relevant discounts.

Revenue derived from long-term contracts is recognized at the present value of future cash flows, discounted at market rates prevailing on the transaction date. Any difference between the original credit and its net present value is accounted for as interest income over the credit term.

These revenues have been recognized in discontinued operations (see Note 35 to our Audited Consolidated Financial Statements).

· Sales and Development activities

Revenue from sale and developments of real estate properties primarily comprises the results from the sale of trading properties. Results from the sale of properties are recognized only at the time in which the control has been transferred to the buyer. This normally takes place on unconditional exchange of contracts (except where payment or completion is expected to occur significantly after exchange). For conditional exchanges, sales are recognized at the time in which these conditions are satisfied.

The Company also enters into barter transactions pursuant to which the Company normally exchanges undeveloped parcels of land with third-party developers for future property to be constructed on the bartered land and from time to time the Company also receives cash as part of the transactions. Legal title to the land together with all risks and rewards of ownership are transferred to the developer upon sale. The Company generally requires the developer to issue insurances or to mortgage the land in favor of the Company as performance guarantee. In the event the developer does not fulfill its obligations, the Company forecloses on the land through the execution of the mortgage or the surety insurances, together with a cash penalty.

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The Company determines that its barters have commercial substance and that the conditions for recording the income from the transfer of parcels or land are met at the time the swap transaction is carried out. Revenues are recorded at the fair value of the goods delivered, adjusted as appropriate by the amount of cash received. In exchange for the parcels or land transferred, the Company generally receives cash and/or a right to receive future units that are part of the projects to be built on the parcels or land exchanged. This right is initially recognized at cost (this being the fair value of the land transferred) as an intangible asset in the statement of financial position. This intangible asset is not adjusted in subsequent years unless it is impaired.

The Company may sell the residential apartments to third-party homebuyers once they are finalized and transferred from the developer. In these circumstances, revenue is recognized at the time in which the control is transferred to the buyer. This will normally takes place when the deeds of title are transferred to the homebuyer.

However, the Company may market residential apartments during construction or even before construction commences. In these situations, buyers generally surrender a down payment to the Company with the remaining amount being paid when the developer completes the property and transfers it to the Company, and the Company in turn transfers it to the buyer. In these cases, revenue is not recognized until the apartments are completed and the transaction is legally completed, that is when the apartments are transferred to the homebuyers and deeds of title are executed. This is because in the event the residential apartments are not completed by the developer and consequently not delivered to the homebuyer, the Company is contractually obligated to return to the homebuyer any down payment received plus a penalty amount. The Company may then seek legal remedy against the developer for non-performance of its obligations under the agreement. The Company exercised judgment and considered that the most significant risk associated with the asset the Company holds (i.e., the right to receive the apartments) consisting of the non-fulfillment of the developer’s obligations (i.e., to complete the construction of the apartments) has not been transferred to the homebuyers upon reception of the down payment.

· Revenue from hotels

Revenue income from hotel operations mainly includes room services, gastronomy and other services. Revenue from the sale of products is recognized when the product is delivered and the significant risks and rewards of ownership are transferred to the buyer. Revenue from the sale of services is recognized when the service is provided.

Effects of the global macroeconomic factors

Most of our assets are located in Argentina, where we conduct our operations. Therefore, our financial condition and the results of our operations are significantly dependent upon economic conditions prevailing in such country.

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

	Fiscal year ended June 30,
	2023			2022			2021
	(inter‑annual data)
GDP (1)		(4.9	)%		6.9	%		17.9	%
Inflation (IPIM) (2)		112.8	%		57.3	%		65.1	%
Inflation (CPI)		115.6	%		64.0	%		50.2	%
Depreciation of the Peso against the U.S. dollar	(105.0		%)	(30.9		%)	(35.9		%)
Average exchange rate per USD 1.00 (3)	ARS 256.50			ARS 125.13			ARS 95.62

(1)	Represents inter annual growth of the second quarter GDP at constant prices (2004). Historical data is maintained, as exposed originally by us in previous 20-Fs.
(2)	IPIM (Índice de Precios Internos al por Mayor) is the wholesale price index as measured by the Argentine Ministry of Treasury.
(3)	Represents average of the selling and buying exchange rate quoted by Banco de la Nación Argentina as of June 30. As of October 18, 2023, the exchange rate was 350.10 per U.S. dollar.

Sources: INDEC and Banco de la Nación Argentina.

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Argentine GDP decreased 4.9% inter annually during the second quarter of 2023, compared to an increase of 6.9% in the same period of 2022. Nationally, shopping mall sales at current prices in the month of July 2023 relevant to the survey reached a total of ARS 166,472.4 million, which represents an increase of 137.9% compared to July 2022. Accumulated sales for the first seven months of the year 2023, represent a 142.2% in current terms and 12.3% increase in real terms as compared to the same period of 2022. The monthly EMAE as of July 31, 2023, decreased by 1.3% compared to the same month in 2022. As of June 30, 2023, the unemployment rate was at 6.2% of the country’s economically active population, compared to 6.9% as of June 30, 2022. On the other hand, in the second quarter of 2023, the activity rate stood at 47.6% compared to 47.9% in the same quarter of the previous year. While the employment rate rose to 44.6% in the second quarter of 2023, compared to 44.6% in the second quarter of the previous year. 

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

Effects of inflation

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

	Consumer price index			Wholesale price index
Fiscal year ended June 30,	(inter‑annual data)
2021		50.2	%		65.1	%
2022		64.0	%		57.3	%
2023		115.6	%		112.8	%

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

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

The rent specified in our leases generally is the higher of (i) a monthly Base Rent and (ii) a specified percentage of the store’s monthly gross sales, which generally ranges between 3% and 12% of such sales. In addition, pursuant to the rent escalation clause in most of our leases, a tenant’s Base Rent generally increases on a monthly or quarterly and cumulative basis following the IPC index. In the event of litigation regarding these adjustment provisions, there can be no assurance that we may be able to enforce such clauses contained in our lease agreements. See “Information of the Company-Business Overview-Our Shopping Malls-Principal Terms of our Leases.”

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Continuing increases in the rate of inflation are likely to have an adverse effect on our operations. Although higher inflation rates in Argentina may increase minimum lease payments, given that tenants tend to pass on any increases in their expenses to consumers, higher inflation may lead to an increase in the prices our tenants charge consumers for their products and services, which may ultimately reduce their sales volumes and consequently the portion of rent we receive based on our tenants’ gross sales. In addition, we measure the fair market value of our shopping malls based upon the estimated cash flows generated by such assets which, as discussed in previous paragraphs, is directly related to consumer spending since a significant component of the rent payment received from our tenants is tied to the sales realized by such tenants (i.e is a percentage of the sales of our tenants). Therefore, macroeconomic conditions in Argentina have an impact on the fair market value of our shopping malls as measured in Pesos. Specifically, since our tenant’s products have been adjusted (increased) to account for inflation of the Argentine Peso, our expected cash flows from our shopping malls have similarly increased in nominal terms since rent is largely dependent on sales of our tenants in Pesos.

Seasonality

Our agricultural business is highly seasonal due to its nature and cycle. The harvest and sale of crops (corn, soybean and sunflower) generally occurs from February to June. Wheat is harvested from December to January. Our operations and sales are affected by the growing cycle of the crops we process and by decreases during the summer in the price of the cattle we fatten. As a result, our results of operations have varied significantly from period to period, and are likely to continue to vary, due to seasonal factors.

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

Effects of interest rate fluctuations

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

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

Effects of foreign currency fluctuations

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

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

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

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For more information about the evolution of the U.S dollar / Peso exchange rate, see “A1. Local Exchange Market and Exchange Rates.”

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

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

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

· during the 2021 fiscal year, there was a 35.9% depreciation of the Peso from ARS 70.36 to USD 1.00 as of June 30, 2020 to ARS 95.62 to USD 1.00 as of June 30, 2021;

· during the 2022 fiscal year, there was a 30.9% depreciation of the Peso from ARS 95.62 to USD 1.00 as of June 30, 2021 to ARS 125.13 to USD 1.00 as of June 30, 2022; and

· during the 2023 fiscal year, there was a 105.0% depreciation of the Peso from ARS 125.13 to USD 1.00 as of June 30, 2022 to ARS 256.50 to USD 1.00 as of June 30, 2023.

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

In the past, purchases and sales of office buildings were usually settled in U.S. dollars, However, as a consequence of the restrictions imposed by the Central Bank on foreign exchange transactions, purchase and sales of office buildings are now usually settled in Argentine Pesos, using an implicit exchange rate that is higher than the official one (as it was the case in the operations carried out by IRSA in the last two years).

Factors Affecting Comparability of our Results

Comparability of information

Covid-19 Pandemic

The impacts of the Covid-19 pandemic on us as of the date of this Annual Report are described below:

· During the fourth quarter of fiscal year 2021, shopping centers in the Buenos Aires metropolitan area suspended their operations between April 16 and June 11, operating only those segments considered essential such as pharmacies, supermarkets, and banks. The impact on Revenues for the closing months due to the pandemic was 40.3% in fiscal year 2021. Due to the flexibility that has occurred in the economic activities since the beginning of this fiscal year 2022, and as of the date of this Annual Report, 100% of the shopping malls are operational.

· Regarding the office segment, although most of the tenants continue to work in the home office mode, they are operational with strict safety and hygiene protocols. As of today, we have experienced a slight increase in the vacancy rates, although we have not suffered a deterioration in collections.

· La Rural, the Buenos Aires and Punta del Este Convention Centers and the Arena stadium, establishments that we own directly or indirectly, were closed from March 20, 2020, to July 12, 2021, date from which the protocols for holding events, conferences and exhibitions were activated. Exhibitions began at La Rural and different corporate events and congresses were held both at La Rural and at the Buenos Aires Convention Center. As of March 2022, all the protocols for holding events as normal were released and in this way the operations of La Rural, the Buenos Aires and Punta del Este Convention Centers were able to resume their operations.

· The Libertador and Intercontinental hotels in the City of Buenos Aires have been operating since December 2020, although with low occupancy levels. The Llao Llao Resort, located in Bariloche, was able to operate during the fourth quarter with average occupancy levels thanks to the domestic tourism.

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The final extent of the Coronavirus outbreak and its impact on the country’s economy is still uncertain. However, although it has produced significant short-term effects, they are not expected to affect business continuity and the Company’s ability to meet its financial commitments for the next twelve months.

Office buildings

During the year ended June 30, 2020, we have incorporated as an investment property the building “Della Paolera” located in Catalinas District in Buenos Aires. It consists of 35,208 square meters of gross leasable area over 30 office floors and includes 316 parking spaces in 4 basements. On April 29, 2021, the Company inaugurated its newest office development in Buenos Aires, which was operational from December 2020. During the fiscal years 2023, 2022 and 2021, we sold and transferred floors of the building for a total area of approximately 9,500 sqm, 9,674 sqm and 2,369 sqm, respectively. As a subsequent event, on August 9, 2023 we sold and transferred one floor for a total leasable area of approximately 1,184 sqm and 10 parking lots located in the building. As of the date of this Annual Report, IRSA retains its rights for 4 floors of the building with an approximate leasable area of 4,937 sqm.

On July 15, 2020, we signed an agreement to sell a mid-rise floor with an area of approximately 1,063 sqm and 5 parking spaces of BankBoston Tower located at 265 Della Paolera in Catalinas district of Buenos Aires City. Likewise, on August 25, 2020, we sold and transferred 5 additional floors with a gross rental area of 6,235 sqm and 25 garages located in the building. On November 5, 2020, we signed a purchase and sale agreement with possession of 4 floors for a gross rental area of approximately 3,892 square meters and 15 parking lots located in the building, and on November 12, 2020, we have entered into a purchase and sale agreement with an unrelated third party pursuant to which it has sold 3 floors for a gross rental area of approximately 3,266 square meters, a commercial space located on the ground floor of approximately 225 square meters and 15 parking lots located in the building. After this transaction, IRSA has no remaining offices leasable area in the building.

On July 30, 2020, we sold the entire “Bouchard 710” tower, located in Plaza Roma District of Buenos Aires City. The building has 15,014 sqm of gross leasable area 12 office floors and 116 parking spaces.

On April 19, 2022, we sold 100% of the “República” building, located next to the “Catalinas Norte” area in the City of Buenos Aires. The tower has 19,885 sqm of gross leasable area on 20 office floors and 178 parking spaces.

As a subsequent event, on July 24, 2023, we sold the “Suipacha 652/64” office building, located in the Microcentro district of the Autonomous City of Buenos Aires. The class B building, with 7 office floors and 62 parking lots, acquired by IRSA in 1991, has a gross leasable area of 11,465 sqm, which was vacant at the moment of the transaction.

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Shopping malls

During the fiscal years ended June 30, 2023, 2022 and 2021, we maintained the same portfolio of operating shopping malls.

Business Segment Information

IFRS 8 requires an entity to report financial and descriptive information about its reportable segments, which are operating segments or aggregations of operating segments that meet specified criteria. Operating segments are components of an entity about which separate financial information is available that is evaluated regularly by the CODM. According to IFRS 8, the CODM represents a function whereby strategic decisions are made and resources are assigned. The CODM function is carried out by the President of the Company, Mr. Eduardo S. Elsztain.

Segment information is reported from the perspective of products and services: (i) agricultural business and (ii) urban properties and investment business.

After the merger of IRSA with IRSA CP, the structure of the urban properties and investment business segment is made up of the following five segments: Shopping Malls, Offices, Hotels, Sales and development, and Others.

The “Offices and Other Rental Properties” segment is renamed “Offices” and will exclusively includes the results from the company’s six office buildings. The other rental properties that were part of this segment were allocated to the “Sales and Developments” segment, which will include the results generated by these assets, as well as those from Land Reserves, Barter Agreements and Properties for Sale. Likewise, the “Others” segment is incorporated, which will group the results from investments in associates and foreign companies that were previously allocated in the “Corporate” and “International” segments. The “Shopping Malls” and “Hotels” segments did not undergo any changes.

Below is the segment information prepared as follows:

Agricultural business

· Agricultural production: segment consists of planting, harvesting and sale of crops as wheat, corn, soybeans, cotton and sunflowers; the sale of grain derivatives, such as flour and oil, breeding, purchasing and/or fattening of free-range cattle for sale to meat processors and local livestock auction markets.; agricultural services; leasing of the Company’s farms to third parties; and planting, harvesting and sale of sugarcane

· Land transformation and sales: comprises gains from the disposal and development of farmlands activities.

· Corporate: includes corporate expenses related to agricultural business.

· Other segments: includes, principally, brokerage activities, among others.

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Urban properties and investments business

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

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

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

· The “Hotels” segment includes the operating results mainly consisting of room, catering and restaurant revenues.

· The “Others” segment includes the entertainment activities through ALG Golf Center S.A., La Rural S.A. and Convention Center (Concession), We Are Appa investments in associates such as GCDI and the financial activities carried out through BHSA / BACS, as well as other investments in associates.

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

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

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

The assets’ categories reviewed by the CODM are: investment properties, property, plant and equipment, trading properties, inventories, rights to receive units under barter transactions, investments in associates and goodwill. The sum of these assets, classified by business segment, is disclosed as “reportable assets”. Assets are assigned to each segment based on operations and/or their physical location.

Most of the revenues from the operating segments are generated and the assets are physically located in Argentina, with the exception of part of the results of associates included in the “Other” segment located in the United States.

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

Until September 2020 we used to report our financial and equity performance separately in two Operations Centers.

On September 25, 2020, the Israeli court with competent jurisdiction decreed the insolvency and liquidation of IDBD and appointed a trustee for its shares along with a custodian over DIC and Clal shares. After this decision, the Board of Directors of IDBD was removed, therefore, the Company lost control on that date. For comparability purposes and as required by IFRS 5, the results of the Israel Operations Center have been reclassified to discontinued operations for all the years presented.

As of June 30, 2023, we no longer own any capital stock of IDBD while we have an investment in DIC that amounts to 1.5 million of shares representing 1.1% of its capital stock.

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 However, as described in Note 1 to the Consolidated Financial Statements as of June 30, 2020, during September 2020 we lost control of IDBD and, then, have reclassified the results of the Israel Operations Center to discontinued operations. As a consequence of the situation described, from October 1, 2020, we report our financial and equity performance through a single Operation Center. Segment information for the previous fiscal years has been recast for comparability purposes with the current year.

The assets and services transferred between segments are calculated based on established prices. Transactions between segments are eliminated, if applicable.

Below is a summarized analysis of the lines of business for the year ended June 30, 2023:

	June 30, 2023
	Agricultural business (I)			Urban Properties and Investment business (II)			Total segment information			Joint ventures (i)			Adjustments (ii)			Elimination of inter-segment transactions and non-reportable assets / liabilities (iii)			Total Statement of Income and Other Comprehensive Income/ Financial Position
	(million of ARS)
Revenues		101,777			72,303			174,080			(453	)		17,435			(657	)		190,405
Costs		(84,462	)		(13,287	)		(97,749	)		198			(17,751	)		-			(115,302	)
Initial recognition and changes in the fair value of biological assets and agricultural products at the point of harvest		(1,515	)		-			(1,515	)		-			-			221			(1,294	)
Changes in the net realizable value of agricultural products after harvest		(2,538	)		-			(2,538	)		-			-			-			(2,538	)
Gross profit/ (loss)		13,262			59,016			72,278			(255	)		(316	)		(436	)		71,271
Net loss from fair value adjustment of investment properties		(2,370	)		(51,342	)		(53,712	)		2,035			-			-			(51,677	)
Gain from disposal of farmlands		15,026			-			15,026			-			-			-			15,026
General and administrative expenses		(8,493	)		(19,528	)		(28,021	)		67			-			174			(27,780	)
Selling expenses		(9,346	)		(4,538	)		(13,884	)		27			-			301			(13,556	)
Other operating results, net		(1,746	)		(7,284	)		(9,030	)		(25	)		166			(25	)		(8,914	)
Management fees		-			-			-			-			(4,760	)		-			(4,760	)
Profit/ (loss) from operations		6,333			(23,676	)		(17,343	)		1,849			(4,910	)		14			(20,390	)
Share of (loss)/ profit of associates and joint ventures		(1,038	)		3,889			2,851			(1,271	)		-			-			1,580
Segment profit/ (loss)		5,295			(19,787	)		(14,492	)		578			(4,910	)		14			(18,810	)
Reportable assets		211,034			634,934			845,968			(3,513	)		-			226,898			1,069,353
Reportable liabilities (*)		-			-			-			-			-			(586,327	)		(586,327	)
Net reportable assets		211,034			634,934			845,968			(3,513	)		-			(359,429	)		483,026

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Below is a summarized analysis of the lines of business for the year ended June 30, 2022:

	June 30, 2022
	Agricultural business (I)			Urban Properties and Investment business (II)			Total segment information			Joint ventures (i)			Adjustments (ii)			Elimination of inter-segment transactions and non-reportable assets / liabilities (iii)			Total Statement of Income and Other Comprehensive Income/ Financial Position
	(million of ARS)
Revenues		138,851			55,174			194,025			(502	)		14,359			(1,248	)		206,634
Costs		(124,285	)		(11,534	)		(135,819	)		196			(14,820	)		-			(150,443	)
Initial recognition and changes in the fair value of biological assets and agricultural products at the point of harvest		39,243			-			39,243			-			-			415			39,658
Changes in the net realizable value of agricultural products after harvest		(4,307	)		-			(4,307	)		-			-			-			(4,307	)
Gross profit/ (loss)		49,502			43,640			93,142			(306	)		(461	)		(833	)		91,542
Net gain from fair value adjustment of investment properties		5,304			27,596			32,900			2,850			-			-			35,750
Gain from disposal of farmlands		11,868			-			11,868			-			-			-			11,868
General and administrative expenses		(8,166	)		(11,570	)		(19,736	)		58			-			174			(19,504	)
Selling expenses		(11,814	)		(4,834	)		(16,648	)		11			-			811			(15,826	)
Other operating results, net		(1,807	)		61			(1,746	)		-			121			(24	)		(1,649	)
Management fees		-			-			-			-			(8,988	)		-			(8,988	)
Profit/ (loss)		44,887			54,893			99,780			2,613			(9,328	)		128			93,193
Share of profit/ (loss) of associates and joint ventures		348			1,007			1,355			(1,775	)		-			-			(420	)
Segment profit/ (loss)		45,235			55,900			101,135			838			(9,328	)		128			92,773
Reportable assets		196,561			702,665			899,226			(3,183	)		-			244,866			1,140,909
Reportable liabilities (*)		-			-			-			-			-			(695,110	)		(695,110	)
Net reportable assets		196,561			702,665			899,226			(3,183	)		-			(450,244	)		445,799

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Below is a summarized analysis of the lines of business for the year ended June 30, 2021:

	June 30, 2021
	Agricultural business (I)			Urban property and investment business (II)			Total segment information			Joint ventures (i)			Adjustments (ii)			Elimination of inter-segment transactions and non-reportable assets / liabilities (iii)			Total Statement of Income and Other Comprehensive Income / Financial Position
	(million of ARS)
Revenues		105,231			35,754			140,985			(177	)		10,408			(1,286	)		149,930
Costs		(96,417	)		(12,189	)		(108,606	)		247			(11,243	)		-			(119,602	)
Initial recognition and changes in the fair value of biological assets and agricultural products at the point of harvest		50,472			-			50,472			-			-			670			51,142
Changes in the net realizable value of agricultural products after harvest		(2,085	)		-			(2,085	)		-			-			-			(2,085	)
Gross profit/ (loss)		57,201			23,565			80,766			70			(835	)		(616	)		79,385
Net gain/ (loss) from fair value adjustment of investment properties		19,479			(26,991	)		(7,512	)		(428	)		-			-			(7,940	)
Gain from disposal of farmlands		4,631			-			4,631			-			-			-			4,631
General and administrative expenses		(7,697	)		(10,941	)		(18,638	)		45			-			327			(18,266	)
Selling expenses		(9,701	)		(5,341	)		(15,042	)		75			-			308			(14,659	)
Other operating results, net		(7,806	)		(553	)		(8,359	)		(71	)		378			(15	)		(8,067	)
Profit/ (loss) from operations		56,107			(20,261	)		35,846			(309	)		(457	)		4			35,084
Share of loss of associates and joint ventures		(204	)		(14,102	)		(14,306	)		(1,361	)		-			(12	)		(15,679	)
Segment profit/ (loss)		55,903			(34,363	)		21,540			(1,670	)		(457	)		(8	)		19,405
Reportable assets		232,417			732,471			964,888			(5,246	)		-			239,379			1,199,021
Reportable liabilities (*)		-			-			-			-			-			(824,674	)		(824,674	)
Net reportable assets		232,417			732,471			964,888			(5,246	)		-			(585,295	)		374,347

(i)	Represents the equity value of joint ventures that were proportionately consolidated for information by segment purposes.
(ii)	Includes ARS (316) million, ARS (461) million and ARS (835) million corresponding to Expenses and FPC as of June 30, 2023, 2022 and 2021, respectively, and ARS 4,760 and ARS 8.988 to management fees, as of June 30, 2023 and 2022.
(iii)	Includes deferred income tax assets, income tax and MPIT credits, trade and other receivables, investment in financial assets, cash and cash equivalents and intangible assets except for rights to receive future units under barter agreements, net of investments in associates with negative equity which are included in provisions in the amount of ARS 1.00 million, ARS 17 million and ARS 50 million, as of June 30, 2023, 2022 and 2021, respectively.
(*)	The CODM focuses its review on reportable assets.

157

(I) Agriculture line of business

The following tables present the reportable segments of the agriculture line of business:

	June 30, 2023
	Agricultural production			Land transformation and sales			Corporate			Others			Total Agricultural business
	(million if ARS)
Revenues		74,926			-			-			26,851			101,777
Costs		(67,274	)		(74	)		-			(17,114	)		(84,462	)
Initial recognition and changes in the fair value of biological assets and agricultural products at the point of harvest		(1,515	)		-			-			-			(1,515	)
Changes in the net realizable value of agricultural products after harvest		(2,538	)		-			-			-			(2,538	)
Gross profit / (loss)		3,599			(74	)		-			9,737			13,262
Net loss from fair value adjustment of investment properties		-			(2,370	)		-			-			(2,370	)
Gain from disposal of farmlands		-			15,026			-			-			15,026
General and administrative expenses		(4,705	)		(14	)		(1,397	)		(2,377	)		(8,493	)
Selling expenses		(6,863	)		(13	)		-			(2,470	)		(9,346	)
Other operating results, net		168			(2,526	)		-			612			(1,746	)
(Loss) / profit from operations		(7,801	)		10,029			(1,397	)		5,502			6,333
Share of loss of associates and joint ventures		(169	)		-			-			(869	)		(1,038	)
Segment (loss) / profit		(7,970	)		10,029			(1,397	)		4,633			5,295
Investment properties		-			26,258			-			-			26,258
Property, plant and equipment		124,531			593			-			1,059			126,183
Investments in associates		1,673			-			-			861			2,534
Other reportable assets		41,055			-			-			15,004			56,059
Reportable assets		167,259			26,851			-			16,924			211,034

From all of the revenues corresponding to Agricultural Business, ARS 55,494 million originated in Argentina and ARS 46,283 million in other countries, principally in Brazil for ARS 41,398 million. From all of the assets included in the segment corresponding to Agricultural Business, ARS 68,025 million are located in Argentina and ARS 143,009 million in other countries, principally in Brazil.

	June 30, 2022
	Agricultural production			Land transformation and sales			Corporate			Others			Total Agricultural business
	(million of ARS)
Revenues		110,097			-			-			28,754			138,851
Costs		(103,204	)		(103	)		-			(20,978	)		(124,285	)
Initial recognition and changes in the fair value of biological assets and agricultural products at the point of harvest		39,243			-			-			-			39,243
Changes in the net realizable value of agricultural products after harvest		(4,307	)		-			-			-			(4,307	)
Gross profit / (loss)		41,829			(103	)		-			7,776			49,502
Net gain from fair value adjustment of investment properties		-			5,304			-			-			5,304
Gain from disposal of farmlands		-			11,868			-			-			11,868
General and administrative expenses		(4,881	)		(17	)		(1,593	)		(1,675	)		(8,166	)
Selling expenses		(9,396	)		(407	)		-			(2,011	)		(11,814	)
Other operating results, net		(4,521	)		2,309			-			405			(1,807	)
Profit / (loss) from operations		23,031			18,954			(1,593	)		4,495			44,887
Share of profit of associates and joint ventures		232			-			-			116			348
Segment profit / (loss)		23,263			18,954			(1,593	)		4,611			45,235
Investment properties		-			29,474			-			-			29,474
Property, plant and equipment		100,495			595			-			457			101,547
Investments in associates		2,154			-			-			1,613			3,767
Other reportable assets		46,391			-			-			15,382			61,773
Reportable assets		149,040			30,069			-			17,452			196,561

From all of the revenues corresponding to Agricultural Business, ARS 69,613 million originated in Argentina and ARS 69,238 million in other countries, principally in Brazil for ARS 63,952 million. From all of the assets included in the segment corresponding to Agricultural Business, ARS 66,563 million are located in Argentina and ARS 129,998 million in other countries, principally in Brazil.

158

	June 30, 2021
	Agricultural production			Land transformation and sales			Corporate			Others			Total Agricultural business
	(million of ARS)
Revenues		86,148			-			-			19,083			105,231
Costs		(83,129	)		(127	)		-			(13,161	)		(96,417	)
Initial recognition and changes in the fair value of biological assets and agricultural products at the point of harvest		50,472			-			-			-			50,472
Changes in the net realizable value of agricultural products after harvest		(2,085	)		-			-			-			(2,085	)
Gross profit / (loss)		51,406			(127	)		-			5,922			57,201
Net gain from fair value adjustment of investment properties		-			19,479			-			-			19,479
Gain from disposal of farmlands		-			4,631			-			-			4,631
General and administrative expenses		(4,851	)		(18	)		(1,552	)		(1,276	)		(7,697	)
Selling expenses		(8,272	)		(4	)		-			(1,425	)		(9,701	)
Other operating results, net		(14,780	)		6,189			-			785			(7,806	)
Management fees		-			-			-			-			-
Profit / (loss) from operations		23,503			30,150			(1,552	)		4,006			56,107
Share of profit/ (loss) of associates and joint ventures		213			-			-			(417	)		(204	)
Segment profit / (loss)		23,716			30,150			(1,552	)		3,589			55,903
Investment properties		-			38,890			-			-			38,890
Property, plant and equipment		116,416			937			-			324			117,677
Investments in associates		2,114			-			-			772			2,886
Other reportable assets		60,622			-			-			12,342			72,964
Reportable assets		179,152			39,827			-			13,438			232,417

From all of the revenues corresponding to Agricultural Business, ARS 56,995 million originated in Argentina and ARS 48,236 million in other countries, principally in Brazil for ARS 46,080 million. From all of the assets included in the segment corresponding to Agricultural Business, ARS 72,301 million are located in Argentina and ARS 160,116 million in other countries, principally in Brazil.

(II) Urban properties and investments line of business

Below is a summarized analysis of the urban properties and investments line of business for the fiscal years ended June 30, 2023, 2022 and 2021:

	June 30, 2023
	Shopping Malls			Offices			Sales and developments			Hotels			Others			Total
	(million of ARS)
Revenues		47,438			4,584			4,382			14,964			935			72,303
Costs		(3,213	)		(379	)		(1,333	)		(7,616	)		(746	)		(13,287	)
Gross profit		44,225			4,205			3,049			7,348			189			59,016
Net loss from fair value adjustment of investment properties		(11,169	)		(4,955	)		(35,105	)		-			(113	)		(51,342	)
General and administrative expenses		(6,682	)		(835	)		(2,560	)		(3,275	)		(6,176	)		(19,528	)
Selling expenses		(2,168	)		(103	)		(1,123	)		(1,028	)		(116	)		(4,538	)
Other operating results, net		(585	)		(69	)		(884	)		(143	)		(5,603	)		(7,284	)
Profit / (Loss) from operations		23,621			(1,757	)		(36,623	)		2,902			(11,819	)		(23,676	)
Share of profit of associates and joint ventures		-			-			-			-			3,889			3,889
Segment profit / (loss)		23,621			(1,757	)		(36,623	)		2,902			(7,930	)		(19,787	)
Investment and trading properties		186,816			117,191			273,161			-			804			577,972
Property, plant and equipment		585			3,549			5,134			9,231			877			19,376
Investment in associates and joint ventures		-			-			-			-			28,698			28,698
Other reportable assets		396			342			7,359			199			592			8,888
Reportable assets		187,797			121,082			285,654			9,430			30,971			634,934

From all the revenues, ARS 69,765 million originated in Argentina, and ARS 2,538 million in other countries, mainly in Uruguay for ARS 2,516 million and USA for ARS 22 million. No external client represents 10% or more of revenue of any of the reportable segments. From all of the assets corresponding to the business of urban properties and investments ARS 631,143 million are located in Argentina and ARS 3,791 million in other countries, principally in the USA for ARS 528 million and Uruguay for ARS 3,244 million.

159

	June 30, 2022
	Shopping Malls			Offices			Sales and developments			Hotels			Others			Total
	(million of ARS)
Revenues		37,369			6,556			1,608			9,270			371			55,174
Costs		(3,223	)		(632	)		(1,253	)		(5,331	)		(1,095	)		(11,534	)
Gross profit / (loss)		34,146			5,924			355			3,939			(724	)		43,640
Net gain/ (loss) from fair value adjustment of investment properties		1,192			(11,348	)		37,623			-			129			27,596
General and administrative expenses		(6,170	)		(821	)		(2,281	)		(1,574	)		(724	)		(11,570	)
Selling expenses		(1,826	)		(168	)		(1,988	)		(733	)		(119	)		(4,834	)
Other operating results, net		(306	)		(50	)		(103	)		(127	)		647			61
Profit / (Loss) from operations		27,036			(6,463	)		33,606			1,505			(791	)		54,893
Share of profit of associates and joint ventures		-			-			-			-			1,007			1,007
Segment profit / (loss)		27,036			(6,463	)		33,606			1,505			216			55,900
Investment and trading properties		197,838			144,137			300,318			-			927			643,220
Property, plant and equipment		563			9,005			5,135			9,570			2,311			26,584
Investment in associates and joint ventures		-			-			-			-			24,960			24,960
Other reportable assets		401			343			6,433			129			595			7,901
Reportable assets		198,802			153,485			311,886			9,699			28,793			702,665

From all the revenues, included in the segments corresponding to the business of urban properties and investments ARS 55,143 million originated in Argentina and ARS 31 million originated in the USA. No external client represents 10% or more of revenue of any of the reportable segments. From all of the assets corresponding to the business of urban properties and investments ARS 698,491 million are located in Argentina and ARS 4,174 million in other countries, principally in the USA for ARS 638 million and Uruguay for ARS 3,514 million.

	June 30, 2021
	Shopping Malls	Offices	Sales and developments	Hotels	Others	Total
	(million of ARS)
Revenues	18,814	9,488	2,740	3,256	1,456	35,754
Costs	(3,079)	(509)	(2,959)	(3,765)	(1,877)	(12,189)
Gross profit / (loss)	15,735	8,979	(219)	(509)	(421)	23,565
Net (loss) / gain from fair value adjustment of investment properties	(71,894)	19,910	24,873	-	120	(26,991)
General and administrative expenses	(5,062)	(1,538)	(2,510)	(1,506)	(325)	(10,941)
Selling expenses	(1,594)	(662)	(2,468)	(498)	(119)	(5,341)
Other operating results, net	(445)	(18)	(18)	(42)	(30)	(553)
Management fees	-	-	-	-	-	-
(Loss) / Profit from operations	(63,260)	26,671	19,658	(2,555)	(775)	(20,261)
Share of loss of associates and joint ventures	-	-	(57)	-	(14,045)	(14,102)
Segment (loss)/ profit	(63,260)	26,671	19,601	(2,555)	(14,820)	(34,363)
Investment and trading properties	192,018	256,167	220,787	-	905	669,877
Property, plant and equipment	852	7,258	4,620	9,103	753	22,586
Investment in associates and joint ventures	-	-	-	-	31,498	31,498
Other reportable assets	407	347	7,052	103	601	8,510
Reportable assets	193,277	263,772	232,459	9,206	33,757	732,471

From all the revenues included in the segments corresponding to the business of urban properties and investments ARS 35,694 million and ARS 60 million originated in the USA. No external client represents 10% or more of revenue of any of the reportable segments. From all of the assets corresponding to the business of urban properties and investments ARS 717,143 million are located in Argentina and ARS 15,328 million in other countries, principally in the USA for ARS 12,271 million and Uruguay for ARS 3,165 million.

160

Results of Operations for the fiscal years ended June 30, 2023 and 2022

	Agricultural business									Urban Properties and Investment business									Total segment information									Joint ventures (i)									Adjustments (ii)									Elimination of inter-segment transactions									Total Statement of Income
	June 30, 2023			June 30, 2022			Var.			June 30, 2023			June 30, 2022			Var.			June 30, 2023			June 30, 2022			Var.			June 30, 2023			June 30, 2022			Var.			June 30, 2023			June 30, 2022			Var.			June 30, 2023			June 30, 2022			Var.			June 30, 2023			June 30, 2022			Var.
	(in million of ARS)
Revenues		101,777			138,851			(37,074	)		72,303			55,174			17,129			174,080			194,025			(19,945	)		(453	)		(502	)		49			17,435			14,359			3,076			(657	)		(1,248	)		591			190,405			206,634			(16,229	)
Costs		(84,462	)		(124,285	)		39,823			(13,287	)		(11,534	)		(1,753	)		(97,749	)		(135,819	)		38,070			198			196			2			(17,751	)		(14,820	)		(2,931	)		-			-			-			(115,302	)		(150,443	)		35,141
Initial recognition and changes in the fair value of biological assets and agricultural products at the point of harvest		(1,515	)		39,243			(40,758	)		-			-			-			(1,515	)		39,243			(40,758	)		-			-			-			-			-			-			221			415			(194	)		(1,294	)		39,658			(40,952	)
Changes in the net realizable value of agricultural products after harvest		(2,538	)		(4,307	)		1,769			-			-			-			(2,538	)		(4,307	)		1,769			-			-			-			-			-			-			-			-			-			(2,538	)		(4,307	)		1,769
Gross profit / (loss)		13,262			49,502			(36,240	)		59,016			43,640			15,376			72,278			93,142			(20,864	)		(255	)		(306	)		51			(316	)		(461	)		145			(436	)		(833	)		397			71,271			91,542			(20,271	)
Net gain / (loss) from fair value adjustment of investment properties		(2,370	)		5,304			(7,674	)		(51,342	)		27,596			(78,938	)		(53,712	)		32,900			(86,612	)		2,035			2,850			(815	)		-			-			-			-			-			-			(51,677	)		35,750			(87,427	)
Gain from disposal of farmlands		15,026			11,868			3,158			-			-			-			15,026			11,868			3,158			-			-			-			-			-			-			-			-			-			15,026			11,868			3,158
General and administrative expenses		(8,493	)		(8,166	)		(327	)		(19,528	)		(11,570	)		(7,958	)		(28,021	)		(19,736	)		(8,285	)		67			58			9			-			-			-			174			174			-			(27,280	)		(19,504	)		(8,276	)
Selling expenses		(9,346	)		(11,814	)		2,468			(4,538	)		(4,834	)		296			(13,884	)		(16,648	)		2,764			27			11			16			-			-			-			301			811			(510	)		(13,556	)		(15,826	)		2,270
Other operating results, net		(1,746	)		(1,807	)		61			(7,284	)		61			(7,345	)		(9,030	)		(1,746	)		(7,284	)		(25	)		-			(25	)		166			121			45			(25	)		(24	)		(1	)		(8,914	)		(1,649	)		(7,265	)
Management fees		-			-			-			-			-			-			-			-			-			-			-			-			(4,760	)		(8,988	)		4,228			-			-			-			(4,760	)		(8,988	)		4,228
Profit / (loss) from operations		6,333			44,887			(38,554	)		(23,676	)		54,893			(78,569	)		(17,343	)		99,780			(117,123	)		1,849			2,613			(764	)		(4,910	)		(9,328	)		4,418			14			128			(114	)		(20,390	)		93,193			(113,583	)
Share of (loss) / profit of associates and joint ventures		(1,038	)		348			(1,386	)		3,889			1,007			2,882			2,851			1,355			1,496			(1,271	)		(1,775	)		504			-			-			-			-			-			-			1,580			(420	)		2,000
Segment profit / (loss)		5,295			45,235			(39,940	)		(19,787	)		55,900			(75,687	)		(14,492	)		101,135			(115,627	)		578			838			(260	)		(4,910	)		(9,328	)		4,418			14			128			(114	)		(18,810	)		92,773			(111,583	)

(i)	Represents the equity value of joint ventures that were proportionately consolidated for information by segment purposes.
(ii)	Includes gross profit / (loss) of ARS (316) million and ARS (461) million corresponding to Building Administration Expenses and Collective Promotion Fund (FPC), as of June 30, 2023 and 2022, respectively.

161

Agricultural Business

The following table shows a summary of the Agricultural Business lines for the fiscal years ended June 30, 2023 and 2022.

	Agricultural production									Land transformation and sales									Corporate								Others									Total
	June 30, 2023			June 30, 2022			Var.			June 30, 2023			June 30, 2022			Var.			June 30, 2023			June 30, 2022			Var.		June 30, 2023			June 30, 2022			Var.			June 30, 2023			June 30, 2022			Var.
	(in million of ARS)
Revenues		74,926			110,097			(35,171	)		-			-			-			-			-			-		26,851			28,754			(1,903	)		101,777			138,851			(37,074	)
Costs		(67,274	)		(103,204	)		35,930			(74	)		(103	)		29			-			-			-		(17,114	)		(20,978	)		3,864			(84,462	)		(124,285	)		39,823
Initial recognition and changes in the fair value of biological assets and agricultural products at the point of harvest		(1,515	)		39,243			(40,758	)		-			-			-			-			-			-		-			-			-			(1,515	)		39,243			(40,758	)
Changes in the net realizable value of agricultural products after harvest		(2,538	)		(4,307	)		1,769			-			-			-			-			-			-		-			-			-			(2,538	)		(4,307	)		1,769
Gross profit / (loss)		3,599			41,829			(38,230	)		(74	)		(103	)		29			-			-			-		9,737			7,776			1,961			13,262			49,502			(36,240	)
Net (loss) / gain from fair value adjustment of investment properties		-			-			-			(2,370	)		5,304			(7,674	)		-			-			-		-			-			-			(2,370	)		5,304			(7,674	)
Gain from disposal of farmlands		-			-			-			15,026			11,868			3,158			-			-			-		-			-			-			15,026			11,868			3,158
General and administrative expenses		(4,705	)		(4,881	)		176			(14	)		(17	)		3			(1,397	)		(1,593	)		196		(2,377	)		(1,675	)		(702	)		(8,493	)		(8,166	)		(327	)
Selling expenses		(6,863	)		(9,396	)		2,533			(13	)		(407	)		394			-			-			-		(2,470	)		(2,011	)		(459	)		(9,346	)		(11,814	)		2,468
Other operating results, net		168			(4,521	)		4,689			(2,526	)		2,309			(4,835	)		-			-			-		612			405			207			(1,746	)		(1,807	)		61
(Loss) / profit from operations		(7,801	)		23,031			(30,832	)		10,029			18,954			(8,925	)		(1,397	)		(1,593	)		196		5,502			4,495			1,007			6,333			44,887			(38,554	)
Share of (loss) / profit of associates and joint ventures		(169	)		232			(401	)		-			-			-			-			-			-		(869	)		116			(985	)		(1,038	)		348			(1,386	)
Segment (loss) / profit		(7,970	)		23,263			(31,233	)		10,029			18,954			(8,925	)		(1,397	)		(1,593	)		196		4,633			4,611			22			5,295			45,235			(39,940	)

Urban Properties and Investment Business

The following table shows a summary of the Urban Properties and Investment Business lines for the fiscal years ended June 30, 2023 and 2022.

	Shopping Malls									Offices									Sales and developments									Hotels									Others									Total
	June 30, 2023			June 30, 2022			Var.			June 30, 2023			June 30, 2022			Var.			June 30, 2023			June 30, 2022			Var.			June 30, 2023			June 30, 2022			Var.			June 30, 2023			June 30, 2022			Var.			June 30, 2023			June 30, 2022			Var.
	(in millions of ARS)
Revenues		47,438			37,369			10,069			4,584			6,556			(1,972	)		4,382			1,608			2,774			14,964			9,270			5,694			935			371			564			72,303			55,174			17,129
Costs		(3,213	)		(3,223	)		10			(379	)		(632	)		253			(1,333	)		(1,253	)		(80	)		(7,616	)		(5,331	)		(2,285	)		(746	)		(1,095	)		349			(13,287	)		(11,534	)		(1,753	)
Gross profit / (loss)		44,225			34,146			10,079			4,205			5,924			(1,719	)		3,049			355			2,694			7,348			3,939			3,409			189			(724	)		913			59,016			43,640			15,376
Net (loss) / gain from fair value adjustment of investment properties		(11,169	)		1,192			(12,361	)		(4,955	)		(11,348	)		6,393			(35,105	)		37,623			(72,728	)		-			-			-			(113	)		129			(242	)		(51,342	)		27,596			(78,938	)
General and administrative expenses		(6,682	)		(6,170	)		(512	)		(835	)		(821	)		(14	)		(2,560	)		(2,281	)		(279	)		(3,275	)		(1,574	)		(1,701	)		(6,176	)		(724	)		(5,452	)		(19,528	)		(11,570	)		(7,958	)
Selling expenses		(2,168	)		(1,826	)		(342	)		(103	)		(168	)		65			(1,123	)		(1,988	)		865			(1,028	)		(733	)		(295	)		(116	)		(119	)		3			(4,538	)		(4,834	)		296
Other operating results, net		(585	)		(306	)		(279	)		(69	)		(50	)		(19	)		(884	)		(103	)		(781	)		(143	)		(127	)		(16	)		(5,603	)		647			(6,250	)		(7,284	)		61			(7,345	)
Profit / (loss) from operations		23,621			27,036			(3,415	)		(1,757	)		(6,463	)		4,706			(36,623	)		33,606			(70,229	)		2,902			1,505			1,397			(11,819	)		(791	)		(11,028	)		(23,676	)		54,893			(78,569	)
Share of (loss)/ profit of associates and joint ventures		-			-			-			-			-			-			-			-			-			-			-			-			3,889			1,007			2,882			3,889			1,007			2,882
Segment profit / (loss)		23,621			27,036			(3,415	)		(1,757	)		(6,463	)		4,706			(36,623	)		33,606			(70,229	)		2,902			1,505			1,397			(7,930	)		216			(8,146	)		(19,787	)		55,900			(75,687	)

162

Revenues 2023 vs. 2022

Agricultural Business

Agricultural Production. Revenues from the Agricultural Production segment decreased by 31.9% from ARS 110,097 million during the fiscal year ended June 30, 2022 to ARS 74,926 million during the fiscal year ended June 30, 2023. Such decrease is mainly attributable to:

· ARS 21,618 million decrease in revenues from crop sales, as a result of lower yields linked to the effects of the drought, accompanied by a decrease in the volume of crops sold (833,600 tons in fiscal year ended June 30, 2022 versus 617,730 tons in fiscal year ended June 30, 2023), standing out corn and soybeans;

· ARS 10,360 million decrease in revenues from sugarcane sales, resulting from a decrease in sales in the fiscal year ended June 30, 2023, due to the decrease in prices, caused by lower demand for ethanol due to lower crude oil prices, coupled with a decrease in the volume produced and sold due to the burning of sugarcane plantations as a result of high temperatures;

· ARS 2,671 million decrease in revenues from cattle sales, primarily attributable to a decrease in tons of cattle sold and a decrease in prices compared to the previous fiscal year where prices performed better relative to inflation; and

· ARS 522 million decrease in revenues from leases and services as a result of a reduction in the volume of seed multiplication services operated at Agroriego, partially offset by higher income from leasing to third parties.

Others. Revenues from the Others segment decreased by 6.6% from ARS 28,754 million during the fiscal year ended June 30, 2022 to ARS 26,851 million during the fiscal year ended June 30, 2023, mainly attributable to a decrease in revenues from sales on consignment, brokerage and others due to lower traded volumes of fertilizers and inputs.

Urban Properties and Investment Business

Shopping Malls. Revenues from the Shopping Malls segment increased by 26.9% from ARS 37,369 million during the fiscal year ended June 30, 2022, to ARS 47,438 million during the fiscal year ended June 30, 2023. This increase is due to the fact that, during the fiscal year ended June 30, 2022, although the shopping malls were open, a policy of support for tenants was maintained in all shopping malls. In addition, there were more vacancies, reduced opening hours and less public attendance in fiscal year 2022. In fiscal year 2023, the increase in rental income occurred mainly due to: (i) an increase of ARS 5,894 million in base rent revenue; (ii) an increase of ARS 1,494 million in contingent rent revenue; (iii) an ARS 979 million increase in admission rights; (iv) an ARS 852 million increase in revenue from parking; and (v) an ARS 606 million increase in the revenue from averaging of scheduled rent escalation.

Offices. Revenues from the Offices segment decreased by 30.1% from ARS 6,556 million during the fiscal year ended June 30, 2022, to ARS 4,584 million during the fiscal year ended June 30, 2023. This variation is mainly explained by a decrease in revenue from leases by 28.8% from ARS 6,411 million during the fiscal year ended June 30, 2022 to ARS 4,563 million during the fiscal year ended June 30, 2023 mainly as a result of lower rental income due to the sale of the República building in April 2022 and the sale of floors in the tower “261 Della Paolera” (located in the Catalinas neighborhood of the Autonomous City of Buenos Aires). There is also a drop in the rate in real terms as the inflation rate was higher than the exchange rate variation.

Sales and Developments. Revenues from the Sales and Developments segment recorded a 172.5% increase from ARS 1,608 million during the fiscal year ended June 30, 2022, to ARS 4,382 million during the fiscal year ended June 30, 2023. This segment often varies significantly from period to period due to the non-recurrence of different sales transactions carried out by the Company over time.

Hotels. Revenues from our Hotels segment increased by 61.4% from ARS 9,270 million during the fiscal year ended June 30, 2022, to ARS 14,964 million during the fiscal year ended June 30, 2023, mainly due to higher occupancy with the consequent increase in revenues. The Hotel Llao Llao, and Libertador reached the pre-pandemic occupancy levels in fiscal year 2023.

Others. Revenues from the Others segment increased by 152.0% from ARS 371 million during the fiscal year ended June 30, 2022, to ARS 935 million during the fiscal year ended June 30, 2023, mainly due to the greater number of congresses and fairs held at the Buenos Aires Convention Centre (LA RURAL S.A. - OFC S.R.L. - OGDEN S.A - ENTRETENIMIENTO UNIVERSAL S.A. - Unión transitoria - (administrator of the Convention and Exhibition Centre of the City of Buenos Aires) and the fee charged by We Are APPA for the services of the APPA application for promotions and actions of the Shopping Malls.

163

Costs 2023 vs. 2022

Agricultural Business

Agricultural Production. The costs of the Agricultural Production segment decreased by 34.8% from ARS 103,204 million during the fiscal year ended June 30, 2022 to ARS 67,274 million during the fiscal year ended June 30, 2023, primarily as a consequence of:

· ARS 26,363 million decrease in costs of crop sales, mainly as a result of a decrease of tons in the volume of crop sold due to the effects of the drought, accompanied with higher direct fertiliser, service and labour costs in the fiscal year ended June 30, 2023 compared to the fiscal year ended June 30, 2022;

· ARS 7,938 million decrease in the costs of sugarcane sales, mainly as a result of a lower quantity of sugarcane sold compared to the previous year. This is evidenced by lower prices due to lower demand for ethanol as a result of a decrease in the price of crude oil and a decrease in the volume produced and sold due to the burning of sugarcane plantations as a result of high temperatures;

· ARS 2,096 million decrease in the costs of cattle sales, mainly as a result of a decrease in tons of cattle sold due to the effect of the drought, in the fiscal year ended June 30, 2023 compared to the fiscal year ended June 30, 2022; and

· ARS 467 million increase in costs of leases and services, mainly attributable to an increase in lease costs and seed purchases and the decrease in the Feedlot service cost.

Costs of the Agricultural Production segment, measured as a percentage of revenues from this segment, decreased from 93.7% during the fiscal year ended June 30, 2022 to 89.8% during the fiscal year ended June 30, 2023.

Land transformation and sales. The costs of the Land transformation and sales segment decreased by 28.2% from ARS 103 million during the fiscal year ended June 30, 2022 to ARS 74 million during the fiscal year ended June 30, 2023.

Others. The costs of the Others segment decreased by 18.4% from ARS 20,978 million during the fiscal year ended June 30, 2022 to ARS 17,114 million during the fiscal year ended June 30, 2023. The costs of the Others segment, measured as a percentage of revenues from this segment, decreased from 73.0% during the fiscal year ended June 30, 2022 to 63.7% during the fiscal year ended June 30, 2023.

Urban Properties and Investment Business

Shopping Malls. Costs associated with the Shopping Malls segment decreased by 0.3%, from ARS 3,223 million during the fiscal year ended June 30, 2022, to ARS 3,213 million during the fiscal year ended June 30, 2023, mainly due to: (i) a decrease in leases and expenses of ARS 480 million; partially offset by: (ii) an increase in maintenance, security, cleaning, repairs and other expenses of ARS 275 million and (iii) an increase in salaries, social security charges and other personnel administrative expenses of ARS 170 million. Costs associated with the Shopping Malls segment, measured as a percentage of the revenues from this segment, decreased from 8.6% during the fiscal year ended June 30, 2022, to 6.8% during the fiscal year ended June 30, 2023.

Offices. Costs associated with the Offices segment decreased by 40.0%, from ARS 632 million during the fiscal year ended June 30, 2022, to ARS 379 million during the fiscal year ended June 30, 2023, mainly due to (i) a decrease in leases and expenses of ARS 117 million; (ii) a decrease in amortization and depreciation charges of ARS 81 million; and (iii) a decrease in taxes, rates and contributions of ARS 61 million. Costs associated with the Offices segment, measured as a percentage of the revenues from this segment, decreased from 9.6% during the fiscal year ended June 30, 2022, to 8.3% during the fiscal year ended June 30, 2023.

164

Sales and Developments. Costs associated with our Sales and Developments segment recorded a 6.4% increase from ARS 1,253 million during the fiscal year ended June 30, 2022, to ARS 1,333 million during the fiscal year ended June 30, 2023 mainly due to (i) an increase of ARS 178 million in the cost of sale of goods and services which correspond to the barter agreement of “Lot 16” located in the province of Córdoba (Argentina), the sale of 2 units of Tower 1 of Carrasco Boating (Montevideo, Uruguay), the sale of a plot of land by Zetol S.A. (Canelones, Uruguay), and the barter agreement entered into with Abasto Twins S.A. (Buenos Aires, Argentina); partially offset by: (ii) an ARS 46 million decrease in fees and compensation services; and (iii) a decrease in leases and expenses of ARS 41 million. Costs in the Sales and Developments segment, measured as a percentage of revenues from this segment, decreased from 77.9% during the fiscal year ended June 30, 2022, to 30.4% during the fiscal year ended June 30, 2023.

Hotels. Costs in the Hotels segment increased by 42.9%, from ARS 5,331 million during the fiscal year ended June 30, 2022, to ARS 7,616 million during the fiscal year ended June 30, 2023, mainly as a result of (i) an ARS 1,555 million increase in the costs of salaries, social security and other personnel expenses; (ii) an ARS 523 million increase in food, beverages and other hotel expenses; and (iii) an ARS 184 million increase in traveling, transportation and stationery. Costs in the Hotels segment, measured as a percentage of revenues from this segment, decreased from 57.5% during the fiscal year ended June 30, 2022, to 50.9% during the fiscal year ended June 30, 2023.

Others. Costs in the Others segment decreased by 31.9%, from ARS 1,095 million during the fiscal year ended June 30, 2022, to ARS 746 million during the fiscal year ended June 30, 2023, mainly as a result of (i) a decrease in the costs of salaries, social security and other personnel expenses of ARS 283 million; (ii) a decrease in fees and compensation for services of ARS 115 million; (iii) a decrease in taxes, rates and contributions of ARS 23 million; partially offset by: (iv) an increase in amortization and depreciation charges of ARS 80 million.

Initial recognition and changes in the fair value of biological assets and agricultural produce at the point of harvest 2023 vs. 2022

According to information by segments (taking into account the (loss) / profit from operations from our joint ventures and excluding those related to building administration expenses and collective promotion fund and business inter-segment transactions), the (loss) / profit from the total initial recognition and changes in the fair value of biological assets and agricultural produce at the point of harvest decreased by ARS 40,758 million (103.9%), from a profit of ARS 39,243 million in the fiscal year ended June 30, 2022 to a loss of ARS 1,515 million in the fiscal year ended June 30, 2023.

Such variation was mainly as a result of:

· A decrease in profits from crops production of ARS 21,930 million, both from Argentina due to the effect of the drought, evidencing a decrease in yields and margins in Corn, and from Brazil, mainly due to higher costs (fertilisers, services and labour, mainly associated with the increase in the price of gasoil in the current year compared to the previous one) in the face of a slight increase in yields and cultivated area, and Beans due to a lower cultivated area, yields and prices;

· A decrease in profits from sugarcane production of ARS 13,925 million, mainly due to lower prices and a decrease in the volume produced and marketed due to the burning of sugar cane plantations as a result of high temperatures; and

· A decrease in profits from production and cattle holding for ARS 4,902 million, mainly due to the result in Argentina, where cattle prices had a downward trend in the current year, which was accentuated by the inflationary effect, accompanied by a lower production due to weather conditions.

Changes in the net realizable value of agricultural produce after harvest 2023 vs. 2022

Loss from total changes in the net realizable value of agricultural produce after harvest, according to information by segments, increased by ARS 1,769 million (41.1%), from a loss of ARS 4,307 million in the fiscal year ended June 30, 2022 to a loss of ARS 2,538 million in the fiscal year ended June 30, 2023.

Such variation is mainly generated by Argentina, due to prices performed better than inflation in the months with the highest stock levels, mainly of Corn.

165

Gross profit 2023 vs. 2022

Agricultural Business

Agricultural Production. Gross profit from this segment decreased by 91.4% from a profit of ARS 41,829 million in the fiscal year ended June 30, 2022 to a profit of ARS 3,599 million in the fiscal year ended June 30, 2023.

Land Transformation and Sales. Loss profit from this segment increased by 28.2% from a loss of ARS 103 million in the fiscal year ended June 30, 2022 to a loss of ARS 74 million in the fiscal year ended June 30, 2023.

Others. Gross profit from this segment increased by 25.2% from a profit of ARS 7,776 million in the fiscal year ended June 30, 2022 to a profit of ARS 9,737 million in the fiscal year ended June 30, 2023.

Urban Properties and Investment Business

Shopping Malls. Gross profit from the Shopping Malls segment increased by 29.5%, from a profit of ARS 34,146 million during the fiscal year ended June 30, 2022, to an ARS 44,225 million profit during the fiscal year ended June 30, 2023, mainly as a result of increased revenues and higher public attendance in shopping malls. Gross profit from the Shopping Malls segment, measured as a percentage of revenues from this segment, increased from 91.4% positive during the fiscal year ended June 30, 2022, to 93.2% positive during the fiscal year ended June 30, 2023.  

Offices. Gross profit from the Offices segment decreased by 29.0%, from a profit of ARS 5,924 million during the fiscal year ended June 30, 2022, to an ARS 4,205 million profit during the fiscal year ended June 30, 2023. Gross profit from the Offices segment, measured as a percentage of revenues from this segment, increased from 90.4% positive during the fiscal year ended June 30, 2022, to 91.7% positive during the fiscal year ended June 30, 2023.

Sales and developments. Gross profit from the Sales and Developments segment increased by 758.9%, from a profit of ARS 355 million during the fiscal year ended June 30, 2022, to an ARS 3,049 million profit during the fiscal year ended June 30, 2023. Gross profit from the Sales and Developments segment, measured as a percentage of revenues from this segment, increased from 22.1% positive during the fiscal year ended June 30, 2022, to 69.6% positive during the fiscal year ended June 30, 2023.

Hotels. Gross profit from the Hotels segment increased by 86.5%, from a profit of ARS 3,939 million during the fiscal year ended June 30, 2022, to an ARS 7,348 million profit during the fiscal year ended June 30, 2023. Gross profit from the Hotels segment, measured as a percentage of revenues from this segment, increased from 42.5% positive during the fiscal year ended June 30, 2022, to 49.1% positive during the fiscal year ended June 30, 2023.

Others. Gross profit / (loss) from the Others segment increased by 126.1%, from a loss of ARS 724 million during the fiscal year ended June 30, 2022, to an ARS 189 million profit during the fiscal year ended June 30, 2023. Gross profit / (loss) from the Others segment, measured as a percentage of revenues from this segment, increased from 195.1% negative during the fiscal year ended June 30, 2022, to 20.2% positive during the fiscal year ended June 30, 2023.

Net gain / (loss) from changes in the fair value of investment properties 2023 vs. 2022

Agricultural Business

According to information by segments (taking into account all our joint ventures and inter-segment eliminations), the total net (loss) / gain from changes in the fair value of investment properties decreased by ARS 7,674 million (144.7%), from a net profit of ARS 5,304 million in the fiscal year ended June 30, 2022 to a net loss of ARS 2,370 million in the fiscal year ended June 30, 2023, mainly caused by the lower valuation of farmlands through BrasilAgro due to a decrease in commodity prices.

Urban Properties and Investment Business

Total consolidated net (loss) / gain from fair value adjustment of investment properties, according to the income statement, decreased by ARS 79,753 million, from a net gain of ARS 30,446 million during the fiscal year ended June 30, 2022, to a net loss of ARS 49,307 million during the fiscal year ended June 30, 2023.

According to information by segments, the net (loss) / gain from fair value adjustment of investment properties went from a gain of ARS 27,596 million (out of which an ARS 1,192 million gain derives from our Shopping Malls segment; an ARS 11,348 million loss from our Offices segment; an ARS 37,623 million gain from our Sales and Developments segment and an ARS 129 million gain from our Others segment) during the fiscal year ended June 30, 2022, to a loss of ARS 51,342 million during the fiscal year ended June 30, 2023 (out of which an ARS 11,169 million loss derives from our Shopping Malls segment; an ARS 4,955 million loss from our Offices segment; an ARS 35,105 million loss from our Sales and Developments segment and an ARS 113 million loss from our Others segment).

166

The net impact in the Peso values of our shopping malls was primarily a consequence of: (i) an improvement in the estimate of the perpetual dollar discount rate, and (ii) more favorable macroeconomic projections in relation to the projected real exchange rate, which was partially offset by the moderation of the projected growth rate of some shopping malls. 

The offices market in Argentina is a liquid market, in which a great number of counterparties participate carrying out sale-purchase transactions. This situation results in significant and representative sale-purchase prices. Furthermore, lease agreements are denominated in U.S. dollars and are usually executed for three-year terms, hence this business produces stable cash flows in U.S. dollars. We use the Market Approach method to determine the fair value of our Offices and Sales and developments segment, the value per sqm, being the most representative measurement. The variation in the net loss from fair value adjustment of investment properties in the Offices and Sales and Developments segment was mainly due to the decrease in real terms of the exchange rate used, from the sales of Catalinas building’s floors during the fiscal year ended 2023 and the revaluation of Costa Urbana in the fiscal year ended 2022

Gain from disposal of farmlands 2023 vs. 2022

The total gain from disposal of farmlands, according to the income statement and the information by segment (taking into account all our joint ventures and inter-segment eliminations), increased by ARS 3,158 million (26.6%), from ARS 11,868 million in the fiscal year ended June 30, 2022 to ARS 15,026 million in the fiscal year ended June 30, 2023.

Fiscal year ended June 30, 2023:

·	On October 6, 2022, BrasilAgro completed the sale of a fraction of 863 hectares (498 arable hectares) of the “Morotí” farm located in the State of Boquerón, Paraguay. The sale value was USD 1.5 million and the buyer made an initial payment of USD 748.5 thousand. The remaining balance will be paid in three equal annual installments. This fraction of the field was valued on the books at BRL 853 thousand. After this transaction, a remainder of 58,722 hectares of this field remains in the hands of BrasilAgro.
·	On November 8, 2022, BrasilAgro signed a contract for the sale of 1,965 hectares (1,423 arable hectares) of the Rio do Meio farm, a rural property located in the municipality of Correntina - Bahia. The value to be paid was set at 291 soybeans bags, equivalent to BRL 62.4 million on the date of the transaction. The buyer made an initial payment of BRL 17.7 million. The contract establishes a schedule for the transfer of ownership and revenue is recognized in four stages. The first was completed on November 14, 2022 and a revenue of BRL 20 million was recognized. The other phases are scheduled for July of each year until 2025. This fraction of the field was valued on the books at BRL 17.8 million. After this transaction, a remnant of 5,750 hectares of said farm remains in the hands of Brasilagro.
·	In March 2023, Brasilagro signed two contracts for the sale of the remaining surface of 5,517 hectares (4,011 arable hectares) of its Araucaria farm, located in the municipality of Mineiros, State of Goiás, Brazil.
	The first transaction was carried out on March 28, 2023, selling 5,185 hectares (3,796 arable hectares) at a value of 790 soybeans bags per arable hectare, equivalent to BRL 409.3 on the date of the transaction. The amounts will be paid in 7 installments, the first on July 30, 2023 and the second on August 16, 2023 and the rest are scheduled for March 1 of each year until 2028. The domain transfer was made on June 15, 2023.
	The second transaction was carried out on March 29, 2023, in which 332 hectares (215 arable hectares) were sold for a value of 297 soybeans bags per arable hectare, equivalent to BRL 8.5 on the date of the transaction. The amounts will be paid in 5 installments, the first was collected on April 14, 2023 and the others are scheduled for March 30 of each year until 2027. The domain transfer was made on May 31, 2023.
·	On June 29, 2023, BrasilAgro completed the sale of 4,408 hectares (3,202 arable hectares) of the “Jatobá VII” farm, located in the municipality of Jaborandi - Bahia. The sale value was BRL 121.6 million (equivalent to 952,815 soybean bags). Payments will be in BRL and made in 7 annual installments, making the first of them at the time of signing the contract. The remaining installments are scheduled for July 31 of each year until 2029.

167

Fiscal year ended June 30, 2022

· On December 29, 2021, BrasilAgro sold 4,573 hectares (2,859 cultivable hectares) of the Rio do Meio farm, a rural property located in the Municipality of Correntina. The agreement signed on September 1, 2021 set the price of the area at 714,835 bags of soybeans, equivalent to BRL 130 million on the date of the transaction. Payments were divided into 13 installments, the first in the form of an advance and the rest in 12 semi-annual payments due in June and October, with the last installment on October 10, 2027. The gain recognized for the sale amounted to BRL 58 million.

· On October 8, 2021, BrasilAgro sold an area of 3,723 hectares (2,694 cultivable hectares) of the Alto Taquari farm, a rural property located in the Municipality of Alto Taquari - state of Mato Grosso. The total amount of the sale was 1,100 bags of soybeans per arable hectare or BRL 589 million (BRL 218,641 / arable ha). The handover of possession of the areas and, consequently, the recognition of sales income will be carried out in two stages. In October 2021 with 2,566 hectares (1,537 cultivable hectares), for an approximate amount of BRL 336 million and September 2024 with 1,157 cultivable hectares, for an approximate value of BRL 253 million. Brasilagro will continue to operate the areas until handover. During the fiscal year ended June 30, 2022, the portion corresponding to the first stage is recognized as a gain.

General and administrative expenses 2023 vs. 2022

Agricultural Business

Agricultural Production. General and administrative expenses associated with the Agricultural Production segment decreased by 3.6 %, from ARS 4,881 million in the fiscal year ended June 30, 2022 to ARS 4,705 million in the fiscal year ended June 30, 2023, mainly due to an ARS 251 million increase in expenses associated with crop operations; an ARS 7 million increase in expenses associated with sugarcane operations; an ARS 1 million decrease in expenses associated with cattle activities; and a ARS 433 million decrease in expenses associated with the agricultural lease and services business. General and administrative expenses of the Agricultural Production segment, measured as a percentage of revenues from this segment, increased from 4.4% during the fiscal year ended June 30, 2022 to 6.3% during the fiscal year ended June 30, 2023.

Land Transformation and Sales. General and administrative expenses associated with the Land Transformation and Sales segment decreased by 17.6% from ARS 17 million during the fiscal year ended June 30, 2022 to ARS 14 million during the fiscal year ended June 30, 2023.

Corporate. General and administrative expenses associated with the Corporate segment decreased by 12.3%, from ARS 1,593 million during the fiscal year ended June 30, 2022 to ARS 1,397 million during the fiscal year ended June 30, 2023.

Others. General and administrative expenses associated with the Others segment increased by 41.9%, from ARS 1,675 million during the fiscal year ended June 30, 2022 to ARS 2,377 million during the fiscal year ended June 30, 2023. General and administrative expenses of the Others segment, measured as a percentage of revenues from this segment, increased from 5.8% during the fiscal year ended June 30, 2022 to 8.9% during the fiscal year ended June 30, 2023.

Urban Properties and Investment Business

Shopping Malls. General and administrative expenses of Shopping Malls increased by 8.3%, from ARS 6,170 million during the fiscal year ended June 30, 2022, to ARS 6,682 million during the fiscal year ended June 30, 2023, mainly due to: (i) an increase of ARS 378 million in salaries, social security charges and other personnel administrative expenses; (ii) an increase of ARS 250 million in fees payable to directors; and (iii) an increase in bank expense of ARS 27 million; partially offset by: (iv) a decrease of ARS 67 million in maintenance, security, cleaning, repairs and other expenses; (v) a decrease in traveling, transportation and stationery of ARS 33 million; and (vi) a decrease in amortization and depreciation charges of ARS 28 million. General and administrative expenses, measured as a percentage of revenues from such segments, decreased from 16.5% during the fiscal year ended June 30, 2022, to 14.1% during the fiscal year ended June 30, 2023. The variation is mainly explained by the increase in salaries. Unlike previous years, salary updates were given to employees in June 2023, which also had an impact on the bonuses provided.

168

Offices. General and administrative expenses of our Offices segment increased by 1.7%, from ARS 821 million during the fiscal year ended June 30, 2022, to ARS 835 million during the fiscal year ended June 30, 2023, mainly as a result of: (i) an increase of ARS 53 million in salaries, social security charges and other personnel administrative expenses; (ii) an increase in fees payable to directors of ARS 34 million; partially offset by: (iii) a decrease in amortization and depreciation charges of ARS 72 million. General and administrative expenses, measured as a percentage of revenues from the same segment, increased from 12.5% during the fiscal year ended June 30, 2022, to 18.2% during the fiscal year ended June 30, 2023. The variation is mainly explained by the increase in salaries. Unlike previous years, salary updates were given to employees in June 2023, which also had an impact on the bonuses provided.

Sales and Developments. General and administrative expenses associated with our Sales and Developments segment increased by 12.2%, from ARS 2,281 million during the fiscal year ended June 30, 2022, to ARS 2,560 million during the fiscal year ended June 30, 2023. General and administrative expenses, measured as a percentage of revenues from the same segment, decreased from 141.9% during the fiscal year ended June 30, 2022, to 58.4% during the fiscal year ended June 30, 2023.

Hotels. General and administrative expenses associated with our Hotels segment increased by 108.1%, from ARS 1,574 million during the fiscal year ended June 30, 2022, to ARS 3,275 million during the fiscal year ended June 30, 2023, mainly as a result of: (i) an ARS 848 million increase in fees payable to directors; (ii) an ARS 384 million increase in fees and compensation for services; and (iii) an ARS 237 million increase in taxes, rates and contributions; (iv) an ARS 150 million increase in salaries, social security charges and other personnel administrative expenses; and (v) an ARS 61 million increase in maintenance, security, cleaning, repairs and other expenses. General and administrative expenses, measured as a percentage of revenues from this segment, increased from 17.0% during the fiscal year ended June 30, 2022, to 21.9% during the fiscal year ended June 30, 2023.

Others. General and administrative expenses associated with our Others segment increased by 753.0%, from ARS 724 million during the fiscal year ended June 30, 2022, to ARS 6,176 million during the fiscal year ended June 30, 2023, mainly due to (i) an increase of ARS 4,992 million in payable to directors; (ii) an ARS 522 million increase in salaries, social security charges and other personnel administrative expenses; (iii) an ARS 68 million increase in maintenance, security, cleaning, repairs and other expenses; partially offset by: (iv) a decrease of ARS 113 million in taxes, rates and contributions.

Selling expenses 2023 vs. 2022

Agricultural Business

Agricultural Production. Selling expenses from the Agricultural Production segment decreased by 27.0% from ARS 9,396 million in the fiscal year ended June 30, 2022 to ARS 6,863 million in the fiscal year ended June 30, 2023, mainly as a result of a ARS 2,313 million decrease in selling expenses related with crop operations, an ARS 52 million increase in expenses for sugarcane operations, a ARS 57 million decrease in selling expenses for cattle and a ARS 215 million decrease in selling expenses associated with leases and agricultural services. Selling expenses of the Agricultural Production segment, measured as a percentage of revenues from this segment, increased from 8.5% during the fiscal year ended June 30, 2022 to 9.2% during the fiscal year ended June 30, 2023.

Land Transformation and Sales. Selling expenses from the Land Transformation and Sales segment decreased by 96.8%, from ARS 407 million in the fiscal year ended June 30, 2022 to ARS 13 million in the fiscal year ended June 30, 2023.

Others. Selling expenses from the Others segment increased by 22.8% from ARS 2,011 million in the fiscal year ended June 30, 2022 to ARS 2,470 million in the fiscal year ended June 30, 2023, mainly due to the increase of ARS 459 million in selling expenses related to other segments. Selling expenses from the Others segment, measured as a percentage of revenues from this segment, increased from 7.0% during the fiscal year ended June 30, 2022 to 9.2% during the fiscal year ended June 30, 2023.

Urban Properties and Investment Business

Shopping Malls. Selling expenses of the Shopping Malls segment increased by 18.7%, from ARS 1,826 million during the fiscal year ended June 30, 2022, to ARS 2,168 million during the fiscal year ended June 30, 2023, mainly as a result of: (i) an increase in the charge of taxes, rates and contributions of ARS 222 million; ii) an increase in the salaries, social security charges and other personnel administrative expenses of ARS 186 million; (iii) an increase in the charge of doubtful accounts of ARS 155 million; partially offset by: (iv) a decrease in the charge of publicity, advertising and other commercial expenses of ARS 227 million. Selling expenses, measured as a percentage of revenues from the Shopping Malls segment, decreased from 4.9% during the fiscal year ended June 30, 2022, to 4.6% during the fiscal year ended June 30, 2023.

169

Offices. Selling expenses associated with our Offices segment decreased by 38.7%, from ARS 168 million during the fiscal year ended June 30, 2022, to ARS 103 million during the fiscal year ended June 30, 2023. Such variation was mainly generated as a result of: (i) an ARS 69 million decrease in the charge of taxes, rates and contributions; (ii) a decrease in the charge of publicity, advertising and other commercial expenses of ARS 24 million; partially offset by: (iii) an ARS 21 million increase in salaries, social security and other personnel administrative expenses and (iv) a decrease in the charge of doubtful accounts of ARS 10 million. Selling expenses associated with our Offices segment, measured as a percentage of revenues from this segment, decreased from 2.6% during the fiscal year ended June 30, 2022, to 2.2% during the fiscal year ended June 30, 2023.

Sales and Developments. Selling expenses associated with our Sales and Developments segment decreased by 43.5%, from ARS 1,988 million during the fiscal year ended June 30, 2022, to ARS 1,123 million during the fiscal year ended June 30, 2023. Such variation was mainly generated by: (i) an ARS 603 million decrease in the charge of taxes, rates and contributions; and (ii) a decrease of ARS 263 million in fees and compensation for services. Selling expenses associated with our Sales and Developments segment, measured as a percentage of revenues from this segment, decreased from 123.6% during the fiscal year ended June 30, 2022, to 25.6% during the fiscal year ended June 30, 2023.

Hotels. Selling expenses associated with our Hotels segment increased by 40.2%, from ARS 733 million during the fiscal year ended June 30, 2022, to ARS 1,028 million during the fiscal year ended June 30, 2023, mainly as a result of: (i) an ARS 106 million increase in fees and compensation for services; (ii) an ARS 83 million increase in salaries, social security and other personnel administrative expenses; (iii) an ARS 78 million increase in taxes, rates and contributions; and (iv) an ARS 12 million increase in publicity, advertising and other commercial expenses. Selling expenses associated with our Hotels segment, measured as a percentage of revenues from this segment, decreased from 7.9% during the fiscal year ended June 30, 2022, to 6.9% during the fiscal year ended June 30, 2023.

Others. Selling expenses associated with our Others segment decreased by 2.5%, from ARS 119 million during the fiscal year ended June 30, 2022, to ARS 116 million during the fiscal year ended June 30, 2023. Selling expenses associated with our Others segment, measured as a percentage of revenues from this segment, decreased from 32.1% during the fiscal year ended June 30, 2022, to 12.4% during the fiscal year ended June 30, 2023.

Other operating results, net 2023 vs. 2022

Agricultural Business

Agricultural Production. Other operating results, net, associated with our Agricultural Production segment increased by ARS 4,689 million, from a loss of ARS 4,521 million in the fiscal year ended June 30, 2022 to a profit of ARS 168 million in the fiscal year ended June 30, 2023.

Land Transformation and Sales. Other operating results, net, from this segment decreased by ARS 4,835 million from a profit of ARS 2,309 million in the fiscal year ended June 30, 2022 to a loss of ARS 2,526 million in the fiscal year ended June 30, 2023.

Others. Other operating results, net, associated with the Others segment increased by ARS 207 million, from a profit of ARS 405 million in the fiscal year ended June 30, 2022 to a profit of ARS 612 million in the fiscal year ended June 30, 2023.

Urban Properties and Investment Business

Shopping Malls. Other operating results, net associated with our Shopping Malls segment decreased by 91.2%, from a net loss of ARS 306 million during the fiscal year ended June 30, 2022, to a net loss of ARS 585 million during the fiscal year ended June 30, 2023, mainly as a result of: (i) an increase of ARS 542 million in the loss for lawsuits; (ii) an increase of ARS 58 million in donations, partially offset by; (iii) an increase of ARS 342 million in interest and allowance generated by operating credits. Other operating results, net, from this segment, as a percentage of revenues from this segment, increased from 0.8% negative during the fiscal year ended June 30, 2022, to 1.2% negative during the fiscal year ended June 30, 2023.

170

Offices. Other operating results, net associated with our Offices segment decreased by 38.0%, from a net loss of ARS 50 million during the fiscal year ended June 30, 2022, to a net loss of ARS 69 million during the fiscal year ended June 30, 2023, mainly as a consequence of (i) an increase of ARS 29  million in the loss for lawsuits; partially offset by: (ii) a decrease of ARS 6 million in donations. Other operating results, net from this segment, as a percentage of the revenues from this segment, increased from 0.8% negative during the fiscal year ended June 30, 2022, to 1.5% negative during the fiscal year ended June 30, 2023.

Sales and Developments. Other operating results, net associated with our Sales and Developments segment decreased by 758.3%, from a net loss of ARS 103 million during the fiscal year ended June 30, 2022, to a net loss of ARS 884 million during the fiscal year ended June 30, 2023, mainly due to (i) a loss from disposal of property, plant and equipment for ARS 684 million which corresponds to the sale of the 8th floor of the tower “261 Della Paolera” (located in the Catalinas neighborhood of the Autonomous City of Buenos Aires) which is occupied by IRSA; and (ii) a credit for the late payment penalty in the barter agreement with Fideicomiso Esquina Güemes for ARS 138 million. Other operating results, net from this segment, as a percentage of the revenues of this segment, increased from 6.4% negative during the fiscal year ended June 30, 2022, to 20.2% negative during the fiscal year ended June 30, 2023.

Hotels. Other operating results, net associated with the Hotels segment decreased by 12.6%, from a net loss of ARS 127 million during the fiscal year ended June 30, 2022, to a net loss of ARS 143 million during the fiscal year ended June 30, 2023, mainly due to lower revenues in other operating income of ARS 18 million. Other operating results, net from this segment, as a percentage of the revenues from this segment, decreased from 1.4% negative during the fiscal year ended June 30, 2022, to 1.0% negative during the fiscal year ended June 30, 2023.

Others. Other operating results, net associated with the Others segment decreased by 966.0%, from a net profit of ARS 647 million during the fiscal year ended June 30, 2022, to a net loss of ARS 5,603 million during the fiscal year ended June 30, 2023, mainly due to (i) an increase in the loss for lawsuits for ARS 6,318 million due to the constitution of a provision for the IDBD lawsuit; and (ii) a lower income from the royalty corresponding to La Rural S.A.; partially offset by (iii) the realization of currency translation adjustment due to the liquidation of Condor, Real Estate Investment Group VII LP and Jiwin S.A. generating a positive result of ARS 428 million. Other operating results, net from this segment, as a percentage of the revenues from this segment, increased from 174.4% positive during the fiscal year ended June 30, 2022, to 599.3% negative during the fiscal year ended June 30, 2023.

Management fees 2023 vs. 2022

The company entered into a management agreement with Consultores Asset Management S.A., which provides for payment of fees equivalent to 10% of our profits for advisory services in relation to any matters related to business and investments, such as farming, real estate, finance, hotel, etc. Management fees amounted to ARS 4,760 million and ARS 8,988 million for the fiscal years ended June 30, 2023 and 2022, respectively.

Operating results 2023 vs. 2022

Agricultural Business

Agricultural Production. Operating results of the Agricultural Production segment decreased by ARS 30,832 million, from a profit of ARS 23,031 million in the fiscal year ended June 30, 2022 to a loss of ARS 7,801 million in the fiscal year ended June 30, 2023.

Land Transformation and Sales. Operating results of the Land Transformation and Sales segment decreased by ARS 8,925 million, from a profit of ARS 18,954 million in the fiscal year ended June 30, 2022 to a profit of ARS 10,029 million in the fiscal year ended June 30, 2023.

Corporate. Operating results of this Corporate segment increased by ARS 196 million from a loss of ARS 1,593 million in the fiscal year ended June 30, 2022 to a loss of ARS 1,397 million in the fiscal year ended June 30, 2023.

Others. Operating results of the Others segment increased by ARS 1,007 million from a ARS 4,495 million in the fiscal year ended June 30, 2022 to ARS 5,502 million in the fiscal year ended June 30, 2023.

171

Urban Properties and Investment Business

Shopping Malls. Operating results associated with the Shopping Malls segment decreased by 12.6%, from a net profit of ARS 27,036 million during the fiscal year ended June 30, 2022, to a net profit of ARS 23,621 million during the fiscal year ended June 30, 2023.

Offices. Operating results associated with our Offices segment increased by 72.8%, from a net loss of ARS 6,463 million during the fiscal year ended June 30, 2022, to a net loss of ARS 1,757 million during the fiscal year ended June 30, 2023. Such variation was mainly due to an ARS 7,076 million decrease in the loss from fair value adjustments of investment properties. Operating results associated with the Offices segment, as a percentage of revenues from such segments, decreased from 98.6% negative during the fiscal year ended June 30, 2022, to 38.3% negative during the fiscal year ended June 30, 2023.

Sales and Developments. Operating results associated with our Sales and Developments segment decreased by 209.0%, from a net profit of ARS 33,606 million during the fiscal year ended June 30, 2022, to a net loss of ARS 36,623 million during the fiscal year ended June 30, 2023. Such decrease is mainly due to the (loss) / gain from fair value adjustments of investment properties. Operating results associated with the Sales and Developments segment, as a percentage of revenues from this segment, decreased from 2,089.9% positive during the fiscal year ended June 30, 2022, to 835.8% negative during the fiscal year ended June 30, 2023.

Hotels. Operating results associated with the Hotels segment increased by 92.8%, from a net profit of ARS 1,505 million during the fiscal year ended June 30, 2022, to a net profit of ARS 2,902 million during the fiscal year ended June 30, 2023. Such increase is mainly due to a higher occupancy with a consequent increase in revenues, reaching, for the most part, pre-pandemic occupancy levels. Operating results associated with the Hotels segment, as a percentage of revenues from such segments, increased from 16.2% positive during the fiscal year ended June 30, 2022, to 19.4% positive during the fiscal year ended June 30, 2023.

Others. Operating results associated with the Others segment decreased from a net loss of ARS 791 million during the fiscal year ended June 30, 2022, to a net loss of ARS 11,819 million during the fiscal year ended June 30, 2023. Such decrease is mainly due to the increase in administrative expenses and a negative result in other operating results, net.

Share of profit / (loss) of associates and joint ventures 2023 vs. 2022

Agricultural Business

According to information by segments (taking into account all our joint ventures and inter-segment eliminations), the total share of (loss) / profit of associates and joint ventures decreased by ARS 1,386 million (398.3%), from a profit of ARS 348 million in the fiscal year ended June 30, 2022 to a loss of ARS 1,038 million in the fiscal year ended June 30, 2023.

Agricultural Production. The share of (loss) / profit of associates and joint ventures in the Agricultural Production segment decreased by 172.8% from a profit of ARS 232 million in the fiscal year ended June 30, 2022 to a loss of ARS 169 million in the fiscal year ended June 30, 2023.

Others. The share (loss) / profit of associates and joint ventures in the Others segment decreased by 849.1% from a profit of ARS 116 million in the fiscal year ended June 30, 2022 to a loss of ARS 869 million in the fiscal year ended June 30, 2023.

Urban Properties and Investment Business

The share of profit / (loss) of associates and joint ventures, according to the income statement, increased by 442.3%, from a net loss of ARS 766 million during the fiscal year ended June 30, 2022 to a net profit of ARS 2,622 million during the fiscal year ended June 30, 2023, mainly due to the positive results from the Others segment.

Also, the net share of loss of joint ventures, mainly from Nuevo Puerto Santa Fe S.A. (Shopping Malls segment), Quality Invest S.A. and Cyrsa S.A. and Puerto Retiro S.A. (Sales and Developments segment), showed a 28.4% increase, from a loss of ARS 1,769 million during the fiscal year ended June 30, 2022, to a loss of ARS 1,267 million during the fiscal year ended June 30, 2023, mainly due to results from the joint venture Quality Invest S.A., mainly attributable to the (loss) / gain from fair value adjustments of investment properties.

172

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

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

Sales and Developments. The share of profit / (loss) of the joint ventures Quality Invest S.A., Cyrsa S.A. and Puerto Retiro S.A is recorded on a consolidated basis, line by line.

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

Other. The share of profit of associates from the Others segment increased by 286.2%, from a net profit of ARS 1,007 million during the fiscal year ended June 30, 2022, to a net profit of ARS 3,889 million during the fiscal year ended June 30, 2023, mainly as a result of the variation from our investments in GCDI by ARS 1,674 million positive, Banco Hipotecario by ARS 1,200 positive partially offset by our investment in Condor by ARS 838 million negative.

Financial results, net 2023 vs. 2022

The Company financial results, net recorded a variation of ARS 23,036 million, from a profit of ARS 47,304 million in the fiscal year ended June 30, 2022 to a profit of ARS 24,268 million in the fiscal year ended June 30, 2023. This was mainly due to: (i) a decrease in foreign exchange rate, net in the Agricultural Business and Urban Properties and Investment Business of ARS 43,411 million, from a profit of ARS 63,486 million, to a profit of ARS 20,075 million because of the appreciation of the Peso against the dollar in real terms, compared to the devaluation in the previous year; partially offset by: (ii) a profit of ARS 11,177 million corresponding to the inflation adjustment.

Income Tax 2023 vs. 2022

The Company adopts the deferred tax method to calculate the income tax for the reported periods, thus recognizing temporary differences as tax assets and liabilities. The income tax charge for the year went from a loss of ARS 4,262 million during the fiscal year ended June 30, 2022, to a profit of ARS 72,721 million during the fiscal year ended June 30, 2023, out of which a gain of ARS 8,117 million derives from the agricultural business and a profit of ARS 64,604 million derives from the urban properties and investment. During the current year, IRSA determined it was appropriate to reverse the provision for the income tax registered as of June 30, 2022 and 2021 for ARS 13,979 million, the provisioned interest accounted at the closing of the Annual Financial Statements for ARS 366 million and register in the deferred income tax, the updating of the remaining losses. In addition, for the year ended June 30, 2023, IRSA applied the systemic and integral inflation adjustment criteria as the restatement of its accumulated losses. See Note 23 to the Consolidated Financial Statements for more information.

Net profit / (loss) 2023 vs. 2022

As a result of the factors described above, our net profit for the year, including the effect of discontinued operations, decreased by ARS 57,636 million from a net profit of ARS 135,815 million in the fiscal year ended on June 30, 2022 to a net profit of ARS 78,179 million in the fiscal year ended June 30, 2023, out of which a profit of ARS 21,514 million derives from the agricultural business, and a profit of ARS 56,665 million derives from the urban properties and investment business.

173

Results of Operations for the fiscal years ended June 30, 2022 and 2021

	Agricultural business									Urban Properties and Investment business									Total segment information									Joint ventures (i)									Adjustments (ii)									Elimination of inter-segment transactions									Total Statement of Income
	June 30, 2022			June 30, 2021			Var.			June 30, 2022			June 30, 2021			Var.			June 30, 2022			June 30, 2021			Var.			June 30, 2022			June 30, 2021			Var.			June 30, 2022			June 30, 2021			Var.			June 30, 2022			June 30, 2021			Var.			June 30, 2022			June 30, 2021			Var.
(in million of ARS)
Revenues		138,851			105,231			33,620			55,174			35,754			19,420			194,025			140,985			53,040			(502	)		(177	)		(325	)		14,359			10,408			3,951			(1,248	)		(1,286	)		38			206,634			149,930			56,704
Costs		(124,285	)		(96,417	)		(27,868	)		(11,534	)		(12,189	)		655			(135,819	)		(108,606	)		(27,213	)		196			247			(51	)		(14,820	)		(11,243	)		(3,577	)		-			-			-			(150,443	)		(119,602	)		(30,841	)
Initial recognition and changes in the fair value of biological assets and agricultural products at the point of harvest		39,243			50,472			(11,229	)		-			-			-			39,243			50,472			(11,229	)		-			-			-			-			-			-			415			670			(255	)		39,658			51,142			(11,484	)
Changes in the net realizable value of agricultural products after harvest		(4,307	)		(2,085	)		(2,222	)		-			-			-			(4,307	)		(2,085	)		(2,222	)		-			-			-			-			-			-			-			-			-			(4,307	)		(2,085	)		(2,222	)
Gross profit / (loss)		49,502			57,201			(7,699	)		43,640			23,565			20,075			93,142			80,766			12,376			(306	)		70			(376	)		(461	)		(835	)		374			(833	)		(616	)		(217	)		91,542			79,385			12,157
Net gain / (loss) from fair value adjustment of investment properties		5,304			19,479			(14,175	)		27,596			(26,991	)		54,587			32,900			(7,512	)		40,412			2,850			(428	)		3,278			-			-			-			-			-			-			35,750			(7,940	)		43,690
Gain from disposal of farmlands		11,868			4,631			7,237			-			-			-			11,868			4,631			7,237			-			-			-			-			-			-			-			-			-			11,868			4,631			7,237
General and administrative expenses		(8,166	)		(7,697	)		(469	)		(11,570	)		(10,941	)		(629	)		(19,736	)		(18,638	)		(1,098	)		58			45			13			-			-			-			174			327			(153	)		(19,504	)		(18,266	)		(1,238	)
Selling expenses		(11,814	)		(9,701	)		(2,113	)		(4,834	)		(5,341	)		507			(16,648	)		(15,042	)		(1,606	)		11			75			(64	)		-			-			-			811			308			503			(15,826	)		(14,659	)		(1,167	)
Other operating results, net		(1,807	)		(7,806	)		5,999			61			(553	)		614			(1,746	)		(8,359	)		6,613			-			(71	)		71			121			378			(257	)		(24	)		(15	)		(9	)		(1,649	)		(8,067	)		6,418
Management fees		-			-			-			-			-			-			-			-			-			-			-			-			(8,988	)		-			(8,988	)		-			-			-			(8,988	)		-			(8,988	)
Profit / (loss) from operations		44,887			56,107			(11,220	)		54,893			(20,261	)		75,154			99,780			35,846			63,934			2,613			(309	)		2,922			(9,328	)		(457	)		(8,871	)		128			4			124			93,193			35,084			58,109
Share of profit / (loss) of associates and joint ventures		348			(204	)		552			1,007			(14,102	)		15,109			1,355			(14,306	)		15,661			(1,775	)		(1,361	)		(414	)		-			-			-			-			(12	)		12			(420	)		(15,679	)		15,259
Segment profit / (loss)		45,235			55,903			(10,668	)		55,900			(34,363	)		90,263			101,135			21,540			79,595			838			(1,670	)		2,508			(9,328	)		(457	)		(8,871	)		128			(8	)		136			92,773			19,405			73,368

(i)	Represents the equity value of joint ventures that were proportionately consolidated for information by segment purposes.
(ii)	Includes gross profit/ (loss) of ARS (461) million and ARS (835) million corresponding to Building Administration Expenses and Collective Promotion Fund (FPC), as of June 30, 2022 and 2021, respectively.

Agricultural Business

The following table shows a summary of the Agricultural Business lines for the fiscal years ended June 30, 2022 and 2021.

	Agricultural production									Land transformation and sales									Corporate									Others									Total
	June 30, 2022			June 30, 2021			Var.			June 30, 2022			June 30, 2021			Var.			June 30, 2022			June 30, 2021			Var.			June 30, 2022			June 30, 2021			Var.			June 30, 2022			June 30, 2021			Var.
	(in million of ARS)
Revenues		110,097			86,148			23,949			-			-			-			-			-			-			28,754			19,083			9,671			138,851			105,231			33,620
Costs		(103,204	)		(83,129	)		(20,075	)		(103	)		(127	)		24			-			-			-			(20,978	)		(13,161	)		(7,817	)		(124,285	)		(96,417	)		(27,868	)
Initial recognition and changes in the fair value of biological assets and agricultural products at the point of harvest		39,243			50,472			(11,229	)		-			-			-			-			-			-			-			-			-			39,243			50,472			(11,229	)
Changes in the net realizable value of agricultural products after harvest		(4,307	)		(2,085	)		(2,222	)		-			-			-			-			-			-			-			-			-			(4,307	)		(2,085	)		(2,222	)
Gross profit / (loss)		41,829			51,406			(9,577	)		(103	)		(127	)		24			-			-			-			7,776			5,922			1,854			49,502			57,201			(7,699	)
Net gain from fair value adjustment of investment properties		-			-			-			5,304			19,479			(14,175	)		-			-			-			-			-			-			5,304			19,479			(14,175	)
Gain from disposal of farmlands		-			-			-			11,868			4,631			7,237			-			-			-			-			-			-			11,868			4,631			7,237
General and administrative expenses		(4,881	)		(4,851	)		(30	)		(17	)		(18	)		1			(1,593	)		(1,552	)		(41	)		(1,675	)		(1,276	)		(399	)		(8,166	)		(7,697	)		(469	)
Selling expenses		(9,396	)		(8,272	)		(1,124	)		(407	)		(4	)		(403	)		-			-			-			(2,011	)		(1,425	)		(586	)		(11,814	)		(9,701	)		(2,113	)
Other operating results, net		(4,521	)		(14,780	)		10,259			2,309			6,189			(3,880	)		-			-			-			405			785			(380	)		(1,807	)		(7,806	)		5,999
Profit / (loss) from operations		23,031			23,503			(472	)		18,954			30,150			(11,196	)		(1,593	)		(1,552	)		(41	)		4,495			4,006			489			44,887			56,107			(11,220	)
Share of profit/ (loss) of associates and joint ventures		232			213			19			-			-			-			-			-			-			116			(417	)		533			348			(204	)		552
Segment profit / (loss)		23,263			23,716			(453	)		18,954			30,150			(11,196	)		(1,593	)		(1,552	)		(41	)		4,611			3,589			1,022			45,235			55,903			(10,668	)

174

Urban Properties and Investment Business

The following table shows a summary of the Urban Properties and Investment Business lines for the fiscal years ended June 30, 2022 and 2021.

	Shopping Malls									Offices									Sales and developments									Hotels									Others									Total
	June 30, 2022			June 30, 2021			Var.			June 30, 2022			June 30, 2021			Var.			June 30, 2022			June 30, 2021			Var.			June 30, 2022			June 30, 2021			Var.			June 30, 2022			June 30, 2021			Var.			June 30, 2022			June 30, 2021			Var.
	(in million of ARS)
Revenues		37,369			18,814			18,555			6,556			9,488			(2,932	)		1,608			2,740			(1,132	)		9,270			3,256			6,014			371			1,456			(1,085	)		55,174			35,754			19,420
Costs		(3,223	)		(3,079	)		(144	)		(632	)		(509	)		(123	)		(1,253	)		(2,959	)		1,706			(5,331	)		(3,765	)		(1,566	)		(1,095	)		(1,877	)		782			(11,534	)		(12,189	)		655
Gross profit / (loss)		34,146			15,735			18,411			5,924			8,979			(3,055	)		355			(219	)		574			3,939			(509	)		4,448			(724	)		(421	)		(303	)		43,640			23,565			20,075
Net gain / (loss)from fair value adjustment of investment properties		1,192			(71,894	)		73,086			(11,348	)		19,910			(31,258	)		37,623			24,873			12,750			-			-			-			129			120			9			27,596			(26,991	)		54,587
General and administrative expenses		(6,170	)		(5,062	)		(1,108	)		(821	)		(1,538	)		717			(2,281	)		(2,510	)		229			(1,574	)		(1,506	)		(68	)		(724	)		(325	)		(399	)		(11,570	)		(10,941	)		(629	)
Selling expenses		(1,826	)		(1,594	)		(232	)		(168	)		(662	)		494			(1,988	)		(2,468	)		480			(733	)		(498	)		(235	)		(119	)		(119	)		-			(4,834	)		(5,341	)		507
Other operating results, net		(306	)		(445	)		139			(50	)		(18	)		(32	)		(103	)		(18	)		(85	)		(127	)		(42	)		(85	)		647			(30	)		677			61			(553	)		614
Profit / (loss) from operations		27,036			(63,260	)		90,296			(6,463	)		26,671			(33,134	)		33,606			19,658			13,948			1,505			(2,555	)		4,060			(791	)		(775	)		(16	)		54,893			(20,261	)		75,154
Share of (loss)/ profit of associates and joint ventures		-			-			-			-			-			-			-			(57	)		57			-			-			-			1,007			(14,045	)		15,052			1,007			(14,102	)		15,109
Segment profit / (loss)		27,036			(63,260	)		90,296			(6,463	)		26,671			(33,134	)		33,606			19,601			14,005			1,505			(2,555	)		4,060			216			(14,820	)		15,036			55,900			(34,363	)		90,263

175

Revenues 2022 vs. 2021

Agricultural Business

Agricultural Production. Revenues from the Agricultural Production segment increased by 27.8% from ARS 86,148 million during the fiscal year ended June 30, 2021 to ARS 110,097 million during the fiscal year ended June 30, 2022. Such increase is mainly attributable to:

· ARS 21,934 million increase in revenues from crop sales, resulting from an increase in the volume of crops sold (699,500 tons in fiscal year ended June 30, 2021 versus 833,600 tons in fiscal year ended June 30, 2022), standing out corn and soybeans;

· ARS 3,981 million increase in revenues from sugarcane sales, resulting from an increase in sales in the fiscal year ended June 30, 2022, due to the strong increase in prices, mainly caused by the increase in the price of oil, which caused ethanol (fuel component, made from sugarcane) increased its demand, and consequently its price (from BRL 0.9 to BRL 1.3 per Kg. of sugar), this in the face of a slight drop in volume produced and sold;

· ARS 2,032 million decrease in revenues from cattle sales, primarily attributable to a 25% decrease in tons of cattle sold in the fiscal year ended June 30, 2022 compared to the fiscal year ended June 30, 2021; and

· ARS 66 million increase in revenues from leases and services attributable to an increase in services for seed multiplication due to better prices and more tons treated and the increase in leased hectares in Argentina, offset by a decrease in the area in leased hectares in Brazil.

Others. Revenues from the Others segment increased by 50.7% from ARS 19,083 million during the fiscal year ended June 30, 2021 to ARS 28,754 million during the fiscal year ended June 30, 2022. Such increase is mainly attributable to an ARS 9,671 million increase in revenues from sales on consignment, brokerage and others, and fees and others.

Urban Properties and Investment Business

Shopping Malls. Revenues from the Shopping Malls segment increased by 98.6% from ARS 18,814 million during the fiscal year ended June 30, 2021, to ARS 37,369 million during the fiscal year ended June 30, 2022. Such increase is due to the fact that during the fiscal year ended in 2021, a support policy was maintained for tenants in all shopping malls, where, due to the Covid-19 pandemic, the contractual monthly insured value (VMA) was not invoiced, but rather a percentage of sales. In the fiscal year ended June 30, 2022, although these policies were maintained in the first part of it, in the second half of the fiscal year there was evidence of a recovery in rental income, generating: (i) an increase of ARS 7,255 million in base rent revenue; (ii) an increase of ARS 12,497 million in contingent rent revenue; (iii) an ARS 1,113 million increase in revenue from parking; partially offset by (iv) an ARS 2,760 million decrease in the revenue from averaging of scheduled rent escalation.

Offices. Revenues from the Offices segment decreased by 30.9% from ARS 9,488 million during the fiscal year ended June 30, 2021, to ARS 6,556 million during the fiscal year ended June 30, 2022. This variation is mainly explained by the decrease in revenue from leases by 30.8%, going from ARS 9,268 million during the fiscal year ended June 30, 2021, to ARS 6,411 million during the fiscal year ended June 30, 2022, mainly as a result of a decrease in revenue from leases due to the sale of the Bouchard building and the sale of the floors of the Torre Boston building during the year ended June 30, 2021 and the sale of the República building in the year 2022.

Sales and Developments. Revenues from the Sales and Developments segment recorded a 41.3% decrease from ARS 2,740 million during the fiscal year ended June 30, 2021, to ARS 1,608 million during the fiscal year ended June 30, 2022. This segment often varies significantly from period to period due to the non-recurrence of different sales transactions carried out over time.

Hotels. Revenues from our Hotels segment increased by 184.7% from ARS 3,256 million during the fiscal year ended June 30, 2021, to ARS 9,270 million during the fiscal year ended June 30, 2022, mainly due to higher occupancy because of the effects of the Covid-19 pandemic in the fiscal year 2021, with the consequent increase in income. With the exception of the Hotel Llao Llao, Intercontinental and Libertador still do not reach the pre-pandemic occupancy levels.

Others. Revenues from the Others segment decreased by 74.5% from ARS 1,456 million during the fiscal year ended June 30, 2021, to ARS 371 million during the fiscal year ended June 30, 2022, mainly due to the sale of Stowe House in USD 3.45 million during the fiscal year ended June 30, 2021, generating a profit of USD 0.3 million.

176

Costs 2022 vs. 2021

Agricultural Business

Agricultural Production. The costs of the Agricultural Production segment increased by 24.1% from ARS 83,129 million during the fiscal year ended June 30, 2021 to ARS 103,204 million during the fiscal year ended June 30, 2022, primarily as a consequence of:

· ARS 16,658 million increase in costs of crop sales, mainly resulting from an 8.1% increase in the average cost per ton of crops sold in the fiscal year, from ARS 82,595 million in the fiscal year ended June 30, 2021 to ARS 89,296 million in the fiscal year ended June 30, 2022; and an increase of 134,059 tons in the volume of crops sold in the fiscal year ended June 30, 2022 as compared to the fiscal year ended June 30, 2021;

· ARS 4,694 million increase in the costs of sugarcane sales, mainly as a result of 40.3% rise in the average cost of sugarcane per ton sold in the fiscal year ended June 30, 2022, from ARS 7,429 per ton in the fiscal year ended June 30, 2021 to ARS 10,421 per ton in the fiscal year ended June 30, 2022, offset by a decrease of 172,636 tons (8%) in the volume of sugarcane sold in the fiscal year ended June 30, 2022 compared to the fiscal year ended June 30, 2021;

· ARS 1,654 million decrease in the costs of cattle sales, mainly as a result of 4,672 decrease in tons of cattle sold in the fiscal year ended June 30, 2022 compared to the previous fiscal year; and a 6% rise in the average cost of cattle sold; and

· ARS 377 million increase in costs of leases and services, mainly attributable to a ARS 468 million increase in lease costs and seed purchases and an ARS 63 million decrease in the Feedlot service cost.

Costs of the Agricultural Production segment, measured as a percentage of revenues from this segment, decreased from 96.5% during the fiscal year ended June 30, 2021 to 93.7% during the fiscal year ended June 30, 2022.

Land transformation and sales. The costs of the Land transformation and sales segment decreased by 18.9% from ARS 127 million during the fiscal year ended June 30, 2021 to ARS 103 million during the fiscal year ended June 30, 2022.

Others. The costs of the Others segment increased by 59.4% from ARS 13,161 million during the fiscal year ended June 30, 2021 to ARS 20,978 million during the fiscal year ended June 30, 2022, mainly as a result of ARS 7,817 million increase in other segments. The costs of the Others segment, measured as a percentage of revenues from this segment, increased from 69.0% during the fiscal year ended June 30, 2021 to 73.0% during the fiscal year ended June 30, 2022.

Urban Properties and Investment Business

Shopping Malls. Costs associated with the Shopping Malls segment increased by 4.7%, from ARS 3,079 million during the fiscal year ended June 30, 2021, to ARS 3,223 million during the fiscal year ended June 30, 2022, mainly due to: (i) an increase in maintenance, security, cleaning, repairs and other expenses of ARS 182 million; (ii) an increase in leases and expenses of ARS 80 million and (iii) an increase in taxes, rates and contributions of ARS 29 million; partially offset by: (iv) a decrease in amortization and depreciation charges of ARS 98 million and (v) a decrease of ARS 77 million in salaries, social security charges and other personnel administrative expenses. Costs associated with the Shopping Malls segment, measured as a percentage of the revenues from this segment, decreased from 16.4% during the fiscal year ended June 30, 2021, to 8.6% during the fiscal year ended June 30, 2022.

Offices. Costs associated with the Offices segment increased by 24.2%, from ARS 509 million during the fiscal year ended June 30, 2021, to ARS 632 million during the fiscal year ended June 30, 2022, mainly due to (i) an increase in amortization and depreciation charges of ARS 84 million; (ii) an increase in leases and expenses of ARS 61 million; (iii) an increase in taxes, rates and contributions of ARS 53 million; partially offset by: (iv) a decrease in maintenance, security, cleaning, repairs and other expenses of ARS 32 million and (v) a decrease of ARS 31 million in salaries, social security charges and other personnel administrative expenses. Costs associated with the Offices segment, measured as a percentage of the revenues from this segment, increased from 5.4% during the fiscal year ended June 30, 2021, to 9.6% during the fiscal year ended June 30, 2022.

177

Sales and Developments. Costs associated with our Sales and Developments segment recorded a 57.7% decrease from ARS 2,959 million during the fiscal year ended June 30, 2021, to ARS 1,253 million during the fiscal year ended June 30, 2022 mainly due to (i) a decrease of ARS 1,660 million in the cost of sale of goods and services; (ii) a decrease in maintenance, security, cleaning, repairs and other expenses of ARS 75 million; and (iii) an ARS 40 million decrease in taxes, rates and contributions; partially offset by: (iv) an increase in leases and expenses of ARS 37 million. Costs in the Sales and Developments segment, measured as a percentage of revenues from this segment, decreased from 108.0% during the fiscal year ended June 30, 2021, to 77.9% during the fiscal year ended June 30, 2022.

Hotels. Costs in the Hotels segment increased by 41.6%, from ARS 3,765 million during the fiscal year ended June 30, 2021, to ARS 5,331 million during the fiscal year ended June 30, 2022, mainly as a result of (i) an ARS 593 million increase in the costs of salaries, social security and other personnel expenses; (ii) an ARS 526 million increase in food, beverages and other hotel expenses; (iii) an ARS 319 million increase in maintenance, security, cleaning, repairs and other expenses; and (iv) an ARS 120 million increase in fees and compensation services. Costs in the Hotels segment, measured as a percentage of revenues from this segment, decreased from 115.6% during the fiscal year ended June 30, 2021, to 57.5% during the fiscal year ended June 30, 2022.

Others. Costs in the Others segment decreased by 41.7%, from ARS 1,877 million during the fiscal year ended June 30, 2021, to ARS 1,095 million during the fiscal year ended June 30, 2022, mainly as a result of the cost of selling properties due to the sale of Stowe House and also due to the development and implementation of Appa Shops generating and increase in salaries, social security costs and other personnel administrative expenses, both events in the comparative fiscal year.

Initial recognition and changes in the fair value of biological assets and agricultural produce at the point of harvest 2022 vs. 2021

According to information by segments (taking into account the profit / (loss) from operations from our joint ventures and excluding those related to building administration expenses and collective promotion fund and business inter-segment transactions), the profit / (loss) from the total initial recognition and changes in the fair value of biological assets and agricultural produce at the point of harvest decreased by ARS 11,229 million (22.2%), from ARS 50,472 million in the fiscal year ended June 30, 2021 to ARS 39,243 million in the fiscal year ended June 30, 2022.

Such variation was mainly as a result of:

· A decrease in profits from crops production of ARS 12,370 million, coming both from Argentina, due to a decrease in yields and margins of Corn and Sorghum, and Brazil, mainly attributable to soybeans and corn, due to higher costs, offset by a slight increase in yields and cultivated area, and beans due to a smaller cultivated area, yields and prices.

· An increase in profits from sugarcane production of ARS 4,202 million, as a result of better prices, offset by a lower volume produced; and

· A decrease in profits from production and cattle holding for ARS 3,059 million, generated mainly in Argentina, where farm prices in the fiscal year ended June 30, 2022 had a worse performance against inflation generating a negative variation in the result. Likewise, a decrease in the production result is observed, as a result of a lower volume accompanied by higher costs.

Changes in the net realizable value of agricultural produce after harvest 2022 vs. 2021

Loss from total changes in the net realizable value of agricultural produce after harvest, according to information by segments, decreased by ARS 2,222 million (106.6%), from a loss of ARS 2,085 million in the fiscal year ended June 30, 2021 to a loss of ARS 4,307 million in the fiscal year ended June 30, 2022.

Such variation is mainly generated by Argentina, since in the previous fiscal year prices had a better performance against inflation, while in this fiscal year, the variation in prices was lower than inflation in periods of higher stock, mainly of Corn.

178

Gross profit 2022 vs. 2021

Agricultural Business

Agricultural Production. Gross profit from this segment decreased by 18.6% from a profit of ARS 51,406 million in the fiscal year ended June 30, 2021 to a profit of ARS 41,829 million in the fiscal year ended June 30, 2022.

Land Transformation and Sales. Loss profit from this segment increased by 18.9% from a loss of ARS 127 million in the fiscal year ended June 30, 2021 to a loss of ARS 103 million in the fiscal year ended June 30, 2022.

Others. Gross profit from this segment increased by 31.3% from a profit of ARS 5,922 million in the fiscal year ended June 30, 2021 to a profit of ARS 7,776 million in the fiscal year ended June 30, 2022.

Urban Properties and Investment Business

Shopping Malls. Gross profit from the Shopping Malls segment increased by 117.0%, from a profit of ARS 15,735 million during the fiscal year ended June 30, 2021, to an ARS 34,146 million profit during the fiscal year ended June 30, 2022, mainly as a result of a reopening of Shopping Malls in the fiscal year ended June 30, 2022 unlike the fiscal year ended June 30, 2021 which had progressive openings and with more restrictions. Gross profit from the Shopping Malls segment, measured as a percentage of revenues from this segment, increased from 83.6% positive during the fiscal year ended June 30, 2021, to 91.4% positive during the fiscal year ended June 30, 2022.  

Offices. Gross profit from the Offices segment decreased by 34.0%, from a profit of ARS 8,979 million during the fiscal year ended June 30, 2021, to an ARS 5,924 million profit during the fiscal year ended June 30, 2022. Gross profit from the Offices segment, measured as a percentage of revenues from this segment, decreased from 94.6% positive during the fiscal year ended June 30, 2021, to 90.4% positive during the fiscal year ended June 30, 2022.

Sales and developments. Gross profit / (loss) from the Sales and Developments segment increased by 262.1%, from a loss of ARS 219 million during the fiscal year ended June 30, 2021, to an ARS 355 million profit during the fiscal year ended June 30, 2022. Gross profit / (loss) from the Sales and Developments segment, measured as a percentage of revenues from this segment, increased from 8.0% negative during the fiscal year ended June 30, 2021, to 22.1% positive during the fiscal year ended June 30, 2022.

Hotels. Gross profit / (loss) from the Hotels segment increased by 873.9%, from a loss of ARS 509 million during the fiscal year ended June 30, 2021, to an ARS 3,939 million profit during the fiscal year ended June 30, 2022. Gross profit / (loss) from the Hotels segment, measured as a percentage of revenues from this segment, increased from 15.6% negative during the fiscal year ended June 30, 2021, to 42.5% positive during the fiscal year ended June 30, 2022.

Others. Gross loss from the Others segment decreased by 72.0%, from a loss of ARS 421 million during the fiscal year ended June 30, 2021, to an ARS 724 million loss during the fiscal year ended June 30, 2022. Gross loss from the Others segment, measured as a percentage of revenues from this segment, increased from 28.9% negative during the fiscal year ended June 30, 2021, to 195.1% negative during the fiscal year ended June 30, 2022.

Net gain / (loss) from changes in the fair value of investment properties 2022 vs. 2021

Agricultural Business

According to information by segments (taking into account all our joint ventures and inter-segment eliminations), the total net gain from changes in the fair value of investment properties decreased by ARS 14,175 million (72.8%), from a net profit of ARS 19,479 million in the fiscal year ended June 30, 2021 to a net profit of ARS 5,304 million in the fiscal year ended June 30, 2022, caused mainly because in the previous fiscal year there was a considerable increase in the price of soybeans in Brazil, which caused a considerable revaluation of the farmlands.

Urban Properties and Investment Business

Total consolidated net gain / (loss) from fair value adjustment of investment properties, according to the income statement, increased by ARS 57,865 million, from a net loss of ARS 27,419 million during the fiscal year ended June 30, 2021, to a net profit of ARS 30,446 million during the fiscal year ended June 30, 2022.

According to information by segments, the net gain / (loss) from fair value adjustment of investment properties went from a loss of ARS 26,991 million (out of which an ARS 71,894 million loss derives from our Shopping Malls segment; an ARS 19,910 million gain from our Offices segment; an ARS 24,873 million gain from our Sales and Developments segment and an ARS 120 million gain from our Others segment) during the fiscal year ended June 30, 2021, to a gain of ARS 27,596 million during the fiscal year ended June 30, 2022 (out of which an ARS 1,192 million profit derives from our Shopping Malls segment; an ARS 11,348 million loss from our Offices segment; an ARS 37,623 million gain from our Sales and Developments segment and an ARS 129 million gain from our Others segment).

179

The net impact in the Peso value of our shopping malls was primarily a consequence of: (i) a solid real recovery in the performance of the shopping malls during the fiscal year ended June 30, 2022 and better future revenue prospects, (ii) more favorable macroeconomic projections, and (iii) improvements in operating margins, (iv) this was partially offset by a 100 basis point increase in the dollar discount rate at which projected cash flow is discounted.

The offices market in Argentina is a liquid market, in which a great number of counterparties participate carrying out sale-purchase transactions. This situation results in significant and representative sale-purchase prices. Furthermore, lease agreements are denominated in U.S. dollars and are usually executed for three-year terms, hence this business produces stable cash flows in U.S. dollars. In this sense, we use the Market Approach method to determine the fair value of our Offices and Others segment, the value per sqm, being the most representative measurement. The consolidated net (loss) from fair value adjustment of investment properties of our Offices segment was mainly due to the appreciation of the Peso against “dólar MEP”

The consolidated net gain from fair value adjustment of investment properties of our Sales and development segment was mainly due to the increase in the fair value adjustment of “Costa Urbana” and sales of República Building and floors of Catalinas Building.

Gain from disposal of farmlands 2022 vs. 2021

The total gain from disposal of farmlands, according to the income statement and the information by segment (taking into account all our joint ventures and inter-segment eliminations), increased by ARS 7,237 million (156.3%), from ARS 4,631 million in the fiscal year ended June 30, 2021 to ARS 11,868 million in the fiscal year ended June 30, 2022.

Fiscal year ended June 30, 2022

· On December 29, 2021, BrasilAgro sold 4,573 hectares (2,859 cultivable hectares) of the Rio do Meio farm, a rural property located in the Municipality of Correntina. The agreement signed on September 1, 2021 set the price of the area at 714,835 bags of soybeans, equivalent to BRL 130 million on the date of the transaction. Payments were divided into 13 installments, the first in the form of an advance and the rest in 12 semi-annual payments due in June and October, with the last installment on October 10, 2027. The result recognized for the sale amounted to BRL 58 million.

· On October 8, 2021, BrasilAgro sold an area of 3,723 hectares (2,694 cultivable hectares) of the Alto Taquari farm, a rural property located in the Municipality of Alto Taquari - state of Mato Grosso. The total amount of the sale was 1,100 bags of soybeans per arable hectare or BRL 589 million (BRL 218,641 / arable ha). The handover of possession of the areas and, consequently, the recognition of sales income will be carried out in two stages. In October 2021 with 2,566 hectares (1,537 cultivable hectares), for an approximate amount of BRL 336 million and September 2024 with 1,157 cultivable hectares, for an approximate value of BRL 253 million. BrasilAgro will continue to operate the areas until handover. During the fiscal year ended June 30, 2022, the portion corresponding to the first stage is recognized as a gain.

Fiscal year ended June 30, 2021

· On May 6, 2021, BrasilAgro sold a total of 1,654 hectares of the Jatóba farm. The first installment was divided into 2 payments of BRL 6 million, on May 6 the first payment was received as a condition prior to the transfer of the property and on June 30 the second. The remaining balance will be paid in six annual installments. The gain recognized for the sale of the transaction was BRL 47.31 million (ARS 2,981 million).

· The Company has signed a bill of sale with possession of a fraction of 2,440 hectares of its “San Pedro” farm, which includes 1,950 productive hectares of agricultural activity and its historic center. After this transaction, a remnant of approximately 3,580 hectares of said establishment remains in the hands of the Company. The total amount of the transaction was set at USD 8.6 million, of which USD 6.5 million have been collected to date. The remaining balance is approximately USD 2.1 million, and USD 0.8 million will be charged at the time of writing the fraction corresponding to the historic center planned for July 2021 and in 2 installments of USD 0.7 million in December 2021 and USD 0.6 million in December 2022. The gain recognized for the sale was approximate ARS 1,000 million.

180

General and administrative expenses 2022 vs. 2021

Agricultural Business

Agricultural Production. General and administrative expenses associated with the Agricultural Production segment increased by 0.6 %, from ARS 4,851 million in the fiscal year ended June 30, 2021 to ARS 4,881 million in the fiscal year ended June 30, 2022, mainly due to an ARS 36 million decreased in expenses associated with crop operations; an ARS 191 million decrease in expenses associated with sugarcane operations; an ARS 143 million decrease in expenses associated with cattle activities; an ARS 400 million increase in expenses associated with the agricultural lease and services business. General and administrative expenses of the Agricultural Production segment, measured as a percentage of revenues from this segment, decreased from 5.6% during the fiscal year ended June 30, 2021 to 4.4% during the fiscal year ended June 30, 2022.

Land Transformation and Sales. General and administrative expenses associated with the Land Transformation and Sales segment decreased by 5.6% from ARS 18 million during the fiscal year ended June 30, 2021 to ARS 17 million during the fiscal year ended June 30, 2022.

Corporate. General and administrative expenses associated with the Corporate segment increased by 2.6%, from ARS 1,552 million during the fiscal year ended June 30, 2021 to ARS 1,593 million during the fiscal year ended June 30, 2022.

Others. General and administrative expenses associated with the Others segment increased by 31.3%, from ARS 1,276 million during the fiscal year ended June 30, 2021 to ARS 1,675 million during the fiscal year ended June 30, 2022. General and administrative expenses of the Others segment, measured as a percentage of revenues from this segment, decreased from 6.7% during the fiscal year ended June 30, 2021 to 5.8% during the fiscal year ended June 30, 2022.

Urban Properties and Investment Business

Shopping Malls. General and administrative expenses of Shopping Malls increased by 21.9%, from ARS 5,062 million during the fiscal year ended June 30, 2021, to ARS 6,170 million during the fiscal year ended June 30, 2022, mainly due to: (i) an increase of ARS 737 million in salaries, social security charges and other personnel administrative expenses; (ii) an increase of ARS 361 million in fees and compensation for services; and (iii) an increase in traveling, transportation and stationery of ARS 92 million; partially offset by: (iv) a decrease of ARS 81 million in taxes, rates and contributions. General and administrative expenses of Shopping Malls, measured as a percentage of revenues from such segments, decreased from 26.9% during the fiscal year ended June 30, 2021, to 16.5% during the fiscal year ended June 30, 2022.

Offices. General and administrative expenses of our Offices segment decreased by 46.6%, from ARS 1,538 million during the fiscal year ended June 30, 2021, to ARS 821 million during the fiscal year ended June 30, 2022, mainly as a result of: (i) a decrease in fees payable to directors of ARS 321 million; (ii) a decrease of ARS 280 million in salaries, social security charges and other personnel administrative expenses; (iii) an ARS 55 million decrease in maintenance, security, cleaning, repairs and other expenses; (iv) a decrease of ARS 43 million in fees and compensation for services; and (v) a decrease in leases and expenses of ARS 33 million. General and administrative expenses, measured as a percentage of revenues from the same segment, decreased from 16.2% during the fiscal year ended June 30, 2021, to 12.5% during the fiscal year ended June 30, 2022.

Sales and Developments. General and administrative expenses associated with our Sales and Developments segment decreased by 9.1%, from ARS 2,510 million during the fiscal year ended June 30, 2021, to ARS 2,281 million during the fiscal year ended June 30, 2022. General and administrative expenses, measured as a percentage of revenues from the same segment, increased from 91.6% during the fiscal year ended June 30, 2021, to 141.9% during the fiscal year ended June 30, 2022.

Hotels. General and administrative expenses associated with our Hotels segment increased by 4.5%, from ARS 1,506 million during the fiscal year ended June 30, 2021, to ARS 1,574 million during the fiscal year ended June 30, 2022, mainly as a result of: (i) an ARS 61 million increase in taxes, rates and contributions; (ii) an ARS 29 million increase in fees and compensation for services; and (iii) an ARS 19 million increase in bank expenses; partially offset by: (iv) a decrease of ARS 52 million in salaries, social security charges and other personnel administrative expenses. General and administrative expenses associated with the Hotels segment, measured as a percentage of revenues from this segment, decreased from 46.3% during the fiscal year ended June 30, 2021, to 17.0% during the fiscal year ended June 30, 2022.

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Others. General and administrative expenses associated with our Others segment increased by 122.8%, from ARS 325 million during the fiscal year ended June 30, 2021, to ARS 724 million during the fiscal year ended June 30, 2022, mainly due to (i) an increase of ARS 370 million in fees and compensation for services; and (ii) an ARS 60 million increase in taxes, rates and contributions.

Selling expenses 2022 vs 2021

Agricultural Business

Agricultural Production. Selling expenses from the Agricultural Production segment increased by 13.6% from ARS 8,272 million in the fiscal year ended June 30, 2021 to ARS 9,396 million in the fiscal year ended June 30, 2022, mainly as a result of an ARS 1,310 million increase in selling expenses related with crop operations, an ARS 228 million decrease in expenses for sugarcane operations, an ARS 153 million decrease in selling expenses for cattle and an ARS 195 million increase in selling expenses associated with leases and agricultural services. Selling expenses of the Agricultural Production segment, measured as a percentage of revenues from this segment, decreased from 9.6% during the fiscal year ended June 30, 2021 to 8.5% during the fiscal year ended June 30, 2022.

Land Transformation and Sales. Selling expenses from the Land Transformation and Sales segment increased by ARS 403, from ARS 4 million in the fiscal year ended June 30, 2021 to ARS 407 million in the fiscal year ended June 30, 2022.

Others. Selling expenses from the Others segment increased by 41.1% from ARS 1,425 million in the fiscal year ended June 30, 2021 to ARS 2,011 million in the fiscal year ended June 30, 2022. Selling expenses from the Others segment, measured as a percentage of revenues from this segment, decreased from 7.5% during the fiscal year ended June 30, 2021 to 7.0% during the fiscal year ended June 30, 2022.

Urban Properties and Investment Business

Shopping Malls. Selling expenses of the Shopping Malls segment increased by 14.6%, from ARS 1,594 million during the fiscal year ended June 30, 2021, to ARS 1,826 million during the fiscal year ended June 30, 2022, mainly as a result of: (i) an increase in the charge of taxes, rates and contributions of ARS 653 million; ii) an increase in the charge of publicity, advertising and other commercial expenses of ARS 367 million; partially offset by: (iii) a decrease in the charge of doubtful accounts of ARS 703 million, and (iv) a decrease of ARS 86 million in salaries, social security charges and other personnel administrative expenses. Selling expenses, measured as a percentage of revenues from the Shopping Malls segment, decreased from 8.5% during the fiscal year ended June 30, 2021, to 4.9% during the fiscal year ended June 30, 2022.

Offices. Selling expenses associated with our Offices segment decreased by 74.6%, from ARS 662 million during the fiscal year ended June 30, 2021, to ARS 168 million during the fiscal year ended June 30, 2022. Such variation was mainly generated as a result of: (i) an ARS 313 million decrease in the charge of taxes, rates and contributions; (ii) a decrease in the charge of doubtful accounts of ARS 121 million; (iii) an ARS 47 million decrease in salaries, social security and other personnel administrative expenses; and (iv) an ARS 13 million decrease in fees and compensation for services. Selling expenses associated with our Offices segment, measured as a percentage of revenues from this segment, decreased from 7.0% during the fiscal year ended June 30, 2021, to 2.6% during the fiscal year ended June 30, 2022.

Sales and Developments. Selling expenses associated with our Sales and Developments segment decreased by 19.4%, from ARS 2,468 million during the fiscal year ended June 30, 2021, to ARS 1,988 million during the fiscal year ended June 30, 2022. Such variation was mainly generated by: (i) an ARS 606 million decrease in the charge of taxes, rates and contributions; partially offset by: (ii) an increase of ARS 78 million in fees and compensation for services, and, (iii) an increase of ARS 62 million in the charge of publicity, advertising and other commercial expenses. Selling expenses associated with our Sales and Developments segment, measured as a percentage of revenues from this segment, increased from 90.1% during the fiscal year ended June 30, 2021, to 123.6% during the fiscal year ended June 30, 2022.

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Hotels. Selling expenses associated with our Hotels segment increased by 47.2%, from ARS 498 million during the fiscal year ended June 30, 2021, to ARS 733 million during the fiscal year ended June 30, 2022, mainly as a result of: (i) an ARS 254 million increase in taxes, rates and contributions; and (ii) an ARS 60 million increase in fees and compensation for services; partially offset by: (iii) an ARS 45 million decrease in salaries, social security and other personnel administrative expenses; and (iv) an ARS 35 million decrease in leases and expenses. Selling expenses associated with our Hotels segment, measured as a percentage of revenues from this segment, decreased from 15.3% during the fiscal year ended June 30, 2021, to 7.9% during the fiscal year ended June 30, 2022.

Others. Selling expenses associated with our Others segment remained constant in ARS 119 million during the fiscal years ended June 30, 2022 and 2021. Selling expenses associated with our Others segment, measured as a percentage of revenues from this segment, increased from 8.2% during the fiscal year ended June 30, 2021, to 32.1% during the fiscal year ended June 30, 2022.

Other operating results, net 2022 vs 2021

Agricultural Business

Agricultural Production. Other operating results, net, associated with our Agricultural Production segment increased by ARS 10,259 million, from a loss of ARS 14,780 million in the fiscal year ended June 30, 2021 to a loss of ARS 4,521 million in the fiscal year ended June 30, 2022.

Land Transformation and Sales. Other operating results, net, from this segment decreased by ARS 3,880 million from a gain of ARS 6,189 million in the fiscal year ended June 30, 2021 to a gain of ARS 2,309 million in the fiscal year ended June 30, 2022.

Others. Other operating results, net, associated with the Others segment decreased by ARS 380 million, from a gain of ARS 785 million in the fiscal year ended June 30, 2021 to a gain of ARS 405 million in the fiscal year ended June 30, 2022.

Urban Properties and Investment Business

Shopping Malls. Other operating results, net associated with our Shopping Malls segment increased by 31.2%, from a net loss of ARS 445 million during the fiscal year ended June 30, 2021, to a net loss of ARS 306 million during the fiscal year ended June 30, 2022, mainly as a result of: (i) an increase of ARS 215 million in interest and allowances generated by operating credits, (ii) an increase of ARS 36 million in management fees, partially offset by; (iii) an increase of ARS 133 million in the loss for lawsuits. Other operating results, net, from this segment, as a percentage of revenues from this segment, decreased from 2.4% negative during the fiscal year ended June 30, 2021, to 0.8% negative during the fiscal year ended June 30, 2022.

Offices. Other operating results, net associated with our Offices segment decreased by 177.8%, from a net loss of ARS 18 million during the fiscal year ended June 30, 2021, to a net loss of ARS 50 million during the fiscal year ended June 30, 2022, mainly as a consequence of (i) an increase of ARS 111 million in interest and allowances generated by operating credits; partially offset by: (ii) a decrease of ARS 41 million in donations; and (iii) a decrease of ARS 22 million in the loss for lawsuits. Other operating results, net from this segment, as a percentage of the revenues from this segment, increased from 0.2% negative during the fiscal year ended June 30, 2021, to 0.8% negative during the fiscal year ended June 30, 2022.

Sales and Developments. Other operating results, net associated with our Sales and Developments segment decreased by 472.2%, from a net loss of ARS 18 million during the fiscal year ended June 30, 2021, to a net loss of ARS 103 million during the fiscal year ended June 30, 2022, mainly due to (i) an decrease of ARS 129 million due to the sale of shares of Manibil S.A. in the fiscal year 2021; (ii) a decrease of ARS 40 million in management fees; and (iii) an increase of ARS 35 million in the loss for lawsuits; partially offset by: (iv) a decrease of ARS 139 million in donations. Other operating results, net from this segment, as a percentage of the revenues of this segment, increased from 0.7% negative during the fiscal year ended June 30, 2021, to 6.4% negative during the fiscal year ended June 30, 2022.

Hotels. Other operating results, net associated with the Hotels segment decreased by 202.4%, from a net loss of ARS 42 million during the fiscal year ended June 30, 2021, to a net loss of ARS 127 million during the fiscal year ended June 30, 2022, mainly due to an increase of ARS 93 million in the loss for lawsuits. Other operating results, net from this segment, as a percentage of the revenues from this segment, increased from 1.3% negative during the fiscal year ended June 30, 2021, to 1.4% negative during the fiscal year ended June 30, 2022.

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Others. Other operating results, net associated with the Others segment increased by 2,256.7%, from a net loss of ARS 30 million during the fiscal year ended June 30, 2021, to a net profit of ARS 647 million during the fiscal year ended June 30, 2022, mainly due to an ARS 397 million recovery of fees for consultancy in Dolphin for and the income of fee charged to La Rural S.A in the fiscal year ended June 30, 2022. Other operating results, net from this segment, as a percentage of the revenues from this segment, increased from 2.1% negative during the fiscal year ended June 30, 2021, to 174.4% positive during the fiscal year ended June 30, 2022.

Management fees 2022 vs 2021

The company entered into a management agreement with Consultores Asset Management S.A., which provides for payment of fees equivalent to 10% of our profits for advisory services in relation to any matters related to business and investments, such as farming, real estate, finance, hotel, etc. Management fees amounted to ARS 8,988 million for the fiscal year ended June 30, 2022. During the fiscal year 2021 no results were recognized on this account.

Operating results 2022 vs 2021

Agricultural Business

Agricultural Production. Operating results of the Agricultural Production segment decreased by ARS 472 million, from a profit of ARS 23,503 million in the fiscal year ended June 30, 2021 to a profit of ARS 23,031 million in the fiscal year ended June 30, 2022.

Land Transformation and Sales. Operating results of the Land Transformation and Sales segment decreased by ARS 11,196 million, from a profit of ARS 30,150 million in the fiscal year ended June 30, 2021 to a profit of ARS 18.954 million in the fiscal year ended June 30, 2022.

Corporate. Operating results of this Corporate segment decreased by ARS 41 million from a loss of ARS 1,552 million in the fiscal year ended June 30, 2021 to a loss of ARS 1,593 million in the fiscal year ended June 30, 2022.

Others. Operating results of the Others segment increased by ARS 489 million from a ARS 4,006 million in the fiscal year ended June 30, 2021 to ARS 4,495 million in the fiscal year ended June 30, 2022.

Urban Properties and Investment Business

Shopping Malls. Operating results associated with the Shopping Malls segment increased by 142.7%, from a net loss of ARS 63,260 million during the fiscal year ended June 30, 2021, to a net profit of ARS 27,036 million during the fiscal year ended June 30, 2022. Such an increase is due to the fact of the recovery in rental income due to the end of restrictions from Covid-19 pandemic.

Offices. Operating results associated with our Offices segment decreased by 124.2%, from a net profit of ARS 26,671 million during the fiscal year ended June 30, 2021, to a net loss of ARS 6,463 million during the fiscal year ended June 30, 2022. Such variation was mainly due to an ARS 31,214 million decrease in the gain / (loss) from fair value adjustments of investment properties. Operating results associated with the Offices segment, as a percentage of revenues from such segments, decreased from 281.1% positive during the fiscal year ended June 30, 2021, to 98.6% negative during the fiscal year ended June 30, 2022.

Sales and Developments. Operating results associated with our Sales and Developments segment increased by 71.5%, from a net profit of ARS 19,658 million during the fiscal year ended June 30, 2021, to a net profit of ARS 33,606 million during the fiscal year ended June 30, 2022. Such increase is mainly due to the gain / (loss) from fair value adjustments of investment properties. Operating results associated with the Sales and Developments segment, as a percentage of revenues from this segment, increased from 717.4% positive during the fiscal year ended June 30, 2021, to 2,089.9% positive during the fiscal year ended June 30, 2022.

Hotels. Operating results associated with the Hotels segment increased by 158.9%, from a net loss of ARS 2,555 million during the fiscal year ended June 30, 2021, to a net profit of ARS 1,505 million during the fiscal year ended June 30, 2022. Such increase is mainly due to higher occupancy with the consequent increase in income, which was affected in the fiscal year ended June 30, 2021, due to Covid-19 pandemic. Operating results associated with the Hotels segment, as a percentage of revenues from such segments, increased from 78.5% negative during the fiscal year ended June 30, 2021, to 16.2% positive during the fiscal year ended June 30, 2022.

Others. Operating results associated with the Others segment decreased from a net loss of ARS 775 million during the fiscal year ended June 30, 2021, to a net loss of ARS 791 million during the fiscal year ended June 30, 2022. Such increase is mainly due to the decrease in gross loss and administrative expenses partially offset by a positive result in other operating results, net

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Share of profit / (loss) of associates and joint ventures 2022 vs 2021

Agricultural Business

According to information by segments (taking into account all our joint ventures and inter-segment eliminations), the total share of profit / (loss) of associates and joint ventures increased by ARS 552 million (270.6%), from a loss of ARS 204 million in the fiscal year ended June 30, 2021 to a profit of ARS 348 million in the fiscal year ended June 30, 2022.

Agricultural Production. The share of profit of associates and joint ventures in the Agricultural Production segment increased by 8.9% from a profit of ARS 213 million in the fiscal year ended June 30, 2021 to a profit of ARS 232 million in the fiscal year ended June 30, 2022.

Others. The share profit / (loss) of associates and joint ventures in the Others segment increased by 127.8% from a loss of ARS 417 million in the fiscal year ended June 30, 2021 to a profit of ARS 116 million in the fiscal year ended June 30, 2022.

Urban Properties and Investment Business

According to information by segments (taking into account all our joint ventures and inter-segment eliminations), the total share of profit / (loss) of associates and joint ventures increased by ARS 15,109 million (107.1%), from ARS 14,102 million loss in the fiscal year ended June 30, 2021 to ARS 1,007 million profit in the fiscal year ended June 30, 2022.

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

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

Sales and Developments. The share of profit / (loss) of the joint ventures Quality Invest S.A., Cyrsa S.A. and Puerto Retiro S.A is recorded on a consolidated basis, line by line.

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

Other. The share of  profit / (loss) of associates from the Others segment increased by 107.2%, from a net loss of ARS 14,045 million during the fiscal year ended June 30, 2021, to a net profit of ARS 1,007 million during the fiscal year ended June 30, 2022, mainly as a result of the variation from our investments in TGLT by ARS 6,000 million positive, Banco Hipotecario by ARS 4,556 positive and New Lipstick by ARS 1,987 million positive.

Financial results, net 2022 vs 2021

The Company financial results, net recorded a variation of ARS 25,364 million, from a profit of ARS 21,940 million in the fiscal year ended June 30, 2021 to a profit of ARS 47,304 million in the fiscal year ended June 30, 2022. This was mainly due to: (i) an increase in foreign exchange rate, net in the Agricultural Business and Urban Properties and Investment Business of ARS 26,424 million, from a profit of ARS 37,063 million, to a profit of ARS 63,486 million because of the appreciation of the Peso against the dollar in real terms, compared to the devaluation in the previous year; and (ii) a decrease in interest expense of non-convertible notes of ARS 19,898 million due to the payment of non-convertible notes Series XXV, XXVI, XXVII and XXVIII, partially offset by (iii) a decrease of ARS 22,931 million in the gain from the valuation at fair value of financial assets and financial liabilities.

Income Tax 2022 vs 2021

The Company adopts the deferred tax method to calculate the income tax for the reported periods, thus recognizing temporary differences as tax assets and liabilities. The income tax charge for the year went from a loss of ARS 98,772 million during the fiscal year ended June 30, 2021, to a loss of ARS 4,262 million during the fiscal year ended June 30, 2022, due to the impact on deferred income tax, out of which a gain of ARS 2,014 million derives from the agricultural business and a loss of ARS 6,276 million derives from the urban properties and investment. Such variation is mainly due to the modification in the income tax rates in Argentina according to the Law 27,630 published in the Official Gazette on June 16, 2021, which explains the increase in the expense on income tax during the fiscal year ended June 30, 2021, due to the impact on deferred income tax.

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Net profit / (loss) 2022 vs 2021

As a result of the factors described above, our net profit / (loss) for the year, including the effect of discontinued operations, increased by ARS 222,432 million from a net loss of ARS 86,617 million in the fiscal year ended on June 30, 2021 to a net profit of ARS 135,815 million in the fiscal year ended June 30, 2022, out of which a profit of ARS 60,158 million derives from the agricultural business, and a profit of ARS 75,657 million derives from the urban properties and investment business.

B. Liquidity and Capital Resources

Liquidity

Our main sources of liquidity have historically been:
·	cash generated by operations;
·	cash generated by our issuance of common shares and non-convertible notes;
·	cash proceeds from borrowings (including cash from bank loans and overdrafts) and financing arrangements (including cash from the exercise of warrants); and
·	cash proceeds from sale of investment and trading properties and property, plant and equipment (including cash proceeds from the sale of farmlands).

Our main cash requirements or uses (other than in connection with our operating activities) have historically been:
·	acquisition of subsidiaries and non-controlling interest in subsidiaries;
·	acquisition of interest in associates and joint ventures;
·	capital contributions to associates and joint ventures;
·	capital expenditures in property, plant and equipment (including acquisitions of farmlands) and investment and trading properties;
·	payments of short-term and long-term debt and payment of the related interest expense; and payment of dividends.

Our liquidity and capital resources include our cash and cash equivalents, proceeds from operating activities, sales of investment properties, trading properties and farms, obtained bank borrowings, long-term debts incurred and capital funding.

Our material cash requirements from known contractual and other obligations mainly consist of obligations under our borrowings. As of June 30, 2023, we expected to incur a total of ARS 262,052 million under our borrowings, consisting of ARS 102,701 million due within one year, ARS 142,707 million due within one to three years and ARS 16,644 million due within four to five years.

Cash Flows

The table below shows our cash flow for the fiscal years ended June 30, 2023, 2022 and 2021:

	June 30, 2023			June 30, 2022			June 30, 2021
	(in millions of ARS)
Net cash generated from operating activities		35,974			47,012			31,416
Net cash generated from investing activities		14,916			27,796			258,542
Net cash used in financing activities		(90,743	)		(79,799	)		(189,640	)
Net (decrease)/ increase in cash and cash equivalents		(39,853	)		(4,991	)		100,318

As of June 30, 2023, we had positive working capital of ARS 15,471 million (calculated as current assets less current liabilities as of such date).

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As of June 30, 2023, in our Agricultural Business, we had positive working capital of ARS 20,342 million (calculated as current assets less current liabilities as of such date).

As of June 30, 2023, in our Urban Properties and Investments Business, had negative working capital of ARS 4,871 million (calculated as current assets less current liabilities as of such date).

At the same date, our Agricultural Business had cash and cash equivalents of ARS 30,201 million.

As stated in Note 1 to the consolidated financial statements as of June 30, 2020, on September 25, 2020 the Court decreed the insolvency and liquidation of IDBD and appointed a trustee for its shares along with a custodian over DIC and Clal shares. After this decision, the Board of Directors of IDBD was removed from its functions, therefore, IRSA lost control on that date. For comparability purposes and as required by IFRS 5, the results of the Israel Operations Center have been reclassified to discontinued operations for the fiscal year ended June 30, 2021.

As stated in Note 4 to the consolidated financial statements as of June 30, 2021, due to the sale of Carnes Pampeanas S.A. on February 24, 2021, the results of this subsidiary have been reclassified to discontinued operations for the fiscal year ended June 30, 2021.

Operating activities

Fiscal year ended June 30, 2023

Our operating activities for the fiscal year ended June 30, 2023 generated net cash inflows of ARS 41,757 million, mainly due to (i) an operating income for ARS 47,696 million, (ii) a decrease in biological assets for ARS 22,442 million, (iii) a decrease in trade and other receivables for ARS 11,429 million partially offset by (iv) decrease in trade and other payables for ARS 34,293 million and (v) a decrease in lease liabilities for ARS 3,690 million.

Fiscal year ended June 30, 2022

Our operating activities for the fiscal year ended June 30, 2022 generated net cash inflows of ARS 49,657 million, mainly due to (i) a decrease in biological assets for ARS 50,182 million, (ii) a decrease in trade and other receivables for ARS 9,869 million, (iii) an operating income for ARS 7,549 million partially offset by (iv) decrease in trade and other payables for ARS 14,278 million and (v) a decrease in lease liabilities for ARS 4,107 million.

Fiscal year ended June 30, 2021

Our operating activities for the fiscal year ended June 30, 2021 generated net cash inflows of ARS 32,445 million, of which ARS 11,631 million are originated in discontinued operations and ARS 20,814 million are from continuing operations, mainly due to (i) a decrease in biological assets for ARS 41,122 million, (ii) a decrease in trades and other receivables for ARS 14,791 million, (iii) an increase in trade and other payables for ARS 2,309 million partially offset by (iv) an increase in inventory for ARS 16,399 million, (v) a net variation in derivative financial instruments for ARS 7,056  million, (vi) an operating loss for ARS 6,211 million and (vii) a decrease in lease liabilities for ARS 5,780 million.

Investment activities

Fiscal year ended June 30, 2023

Our investing activities resulted in net cash inflows of ARS 14,916 million for the fiscal year ended June 30, 2023, mainly due to (i) ARS 52,263 million proceeds from disposal of investments in financial assets, (ii) ARS 22,644 million derived from proceeds from sales of investment properties, (iii) ARS 17,843 million derived from proceeds from sales of property, plant and equipment partially offset by (iv) ARS 55,427 million used in the acquisition of investments in financial assets, (v) ARS 18,199 million used in the acquisition and improvement in property, plant and equipment and (vi) acquisitions and improvement of investment properties for ARS 5,904 million.

Fiscal year ended June 30, 2022

Our investing activities resulted in net cash inflows of ARS 27,796 million for the fiscal year ended June 30, 2022, mainly due to (i) ARS 56,001 million derived from proceeds from sales of investment properties, (ii) ARS 38,996 million proceeds from disposal of investments in financial assets, (iii) dividends collected from associates and joint ventures for ARS 7,890 million, (iv) ARS 6,196 million derived from proceeds from sales of property, plant and equipment partially offset by (v) ARS 58,608 million used in the acquisition of investments in financial assets, (vi) acquisitions and improvement of investment properties for ARS 13,224 million and (vii) ARS 8,671 million used in the acquisition and improvement in property, plant and equipment.

Fiscal year ended June 30, 2021

Our investing activities resulted in net cash inflows of ARS 258,542 million, of which ARS 155,908 million are originated in discontinued operations and ARS 102,634 are from continuing operations for the fiscal year ended June 30, 2021, mainly due to (i) ARS 112,852 million proceeds from disposal of investments in financial assets, (ii) ARS 65,523 million derived from proceeds from sales of investment properties partially offset by (iii) ARS 59,246 million used in the acquisition of investments in financial assets, (iv) ARS 7,149 million used in the acquisition and improvement in property, plant and equipment and (v) ARS 3,531 million used in the acquisition and improvement of investment properties.

Financing activities

Fiscal year ended June 30, 2023

Our financing activities for the fiscal year ended June 30, 2023 resulted in net cash outflows of ARS 90,743 million, mainly due to (i) the payment of borrowing and non-convertible notes for ARS 110,187 million, (ii) dividends paid for ARS 43,860 million, (iii) the payment of interest for ARS 34,268 million, (iv) repurchase of treasury shares for ARS 6,880 millon partially offset by (v) borrowings, issuance and new placement of non-convertible notes for ARS 104,947 million.

Fiscal year ended June 30, 2022

Our financing activities for the fiscal year ended June 30, 2022 resulted in net cash outflows of ARS 79,799 million, mainly due to (i) the payment of borrowing and non-convertible notes for ARS 89,811 million, (ii) the payment of interest for ARS 34,948 million, (iii) dividends paid for ARS 16,772 million partially offset by (iv) borrowings issuance and new placement of non-convertible notes for ARS 66,489 million.

Fiscal year ended June 30, 2021

Our financing activities for the fiscal year ended June 30, 2021 resulted in net cash outflows of ARS 189,640 million, corresponding ARS 63,982 million to discontinued activities, and ARS 125,658 million to continued activities, mainly due to (i) the payment of borrowing and non-convertible notes for ARS 330,808 million, (ii) the payment of interest for ARS 72,607 million, (iii) repurchase of non-convertible notes for ARS 23,671 million partially offset by (iv) borrowings, issuance and new placement of non-convertible notes for ARS 226,751 million, (v) proceeds for issuance of shares and other equity instruments for ARS 44,666 million and (vi) obtaining of short term loans, net for ARS 28,847 million.

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Capital Expenditures

Our capital expenditures were ARS 31,833 million, ARS 29,049 million and ARS 15,938 million for the fiscal years ended June 30, 2023, 2022 and 2021, respectively, including other goods and equipment acquired in business combinations.

Our capital expenditures consisted of the purchase of real estate and farms, acquisition and improvement of productive agricultural assets, communication networks, completion of the construction of a shopping center, construction of real estate and acquisition of land reserves.

Fiscal year ended June 30, 2023

During the fiscal year ended June 30, 2023, in our Urban Properties and Investments Business we invested ARS 6,886 million, as follows: (a) acquisitions and improvements of property, plant and equipment for ARS 793 million, primarily (i) ARS 11 million in buildings and facilities, (ii) ARS 303 million in machinery and equipment and others and (iii) improvements in our hotels Sheraton Libertador, Llao Llao and Intercontinental (ARS 13 million, ARS 432 million and ARS 34 million, respectively); (b) improvements in our rental properties for ARS 3,508 million and (c) the development of properties for ARS 2,585 million.

During the fiscal year ended June 30, 2023, we invested in the Agricultural Business ARS 24,947 million mainly due to (a) acquisition and development of owner occupied farmland for ARS 20,842 million (ARS 19,667 million of subsidiary Brasilagro); (b) ARS 1,844 million in bearer plant; (c) ARS 1,321 million in other building and facilities; (d) ARS 773 million machinery and equipment; (e) ARS 91 million in vehicles, and (f) ARS 76 million in furniture and supplies.

Fiscal year ended June 30, 2022

During the fiscal year ended June 30, 2022, in our Urban Properties and Investments Business we invested ARS 21,112 million, as follows: (a) acquisitions and improvements of property, plant and equipment for ARS 722 million, primarily (i) ARS 24 million in buildings and facilities, (ii) ARS 114 million in machinery and equipment and others and (iii) improvements in our hotels Sheraton Libertador, Llao Llao and Intercontinental (ARS 24 million, ARS 545 million and ARS 15 million, respectively); (b) improvements in our rental properties for ARS 6,103 million and (c) the development of properties for ARS 14,287 million.

During the fiscal year ended June 30, 2022, we invested in the Agricultural Business ARS 7,937 million mainly due to (a) acquisition and development of owner occupied farmland for ARS 4,555 million (ARS 4,495 million of subsidiary Brasilagro); (b) ARS 1,330 million in bearer plant; (c) ARS 875 million in other building and facilities; (d) ARS 873 million machinery and equipment; (e) ARS 267 million in vehicles, and (f) ARS 37 million in furniture and supplies.

Fiscal year ended June 30, 2021

During the fiscal year ended June 30, 2021, in our Urban Properties and Investments Business we invested ARS 9,593 million, as follows: (a) acquisitions and improvements of property, plant and equipment for ARS 5,853 million, primarily (i) ARS 558 million in buildings and facilities, (ii) ARS 2,054 million in communication networks, (iii) ARS 2,891 million in machinery and equipment and others, (iv) improvements in our hotels Sheraton Libertador, Llao Llao and Intercontinental (ARS 29 million, ARS 71 million and ARS 56 million, respectively) and (v) ARS 194 million in farmlands and (b) improvements in our rental properties for ARS 3,740 million, out of which ARS 3,546 million derive from our Operations Center in Argentina and ARS 194 million derive from the Operations Center in Israel.

During the fiscal year ended June 30, 2021, we invested in the Agricultural Business ARS 6,345 million mainly due (a) acquisition and development of owner occupied farmland for ARS 4,527 million (ARS 3,745 million of subsidiary Brasilagro); (b) ARS 535 million in bearer plant; (c) ARS 265 million in other building and facilities; (d) ARS 593 million machinery and equipment; (e) ARS 138 million in vehicles; (f) ARS 46 million in furniture and supplies; and (g) ARS 241 million destined to suppliers advances for proprieties acquisitions.

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Indebtedness

As of June 30, 2023, we had total loans in the amount of ARS 262,052 million. The following table sets forth the scheduled maturities of our outstanding debt:

Capital	Agricultural Business		Urban properties and investments		Total
	(million of ARS)
Less than 1 year		57,048		39,029		96,077
More than 1 and up to 2 years		33,334		27,146		60,480
More than 2 and up to 3 years		49,413		20,794		70,207
More than 3 and up to 4 years		4,676		7,025		11,701
More than 4 and up to 5 years		4,442		11,954		16,396
More than 5 years		250		-		250
		149,163		105,948		255,111
Interest
Less than 1 year		5,036		1,588		6,624
More than 1 and up to 2 years		-		203		203
More than 2 and up to 3 years		-		114		114
		5,036		1,905		6,941
		154,199		107,853		262,052

	Agricultural Business		Urban properties and investments		Total
	(million of ARS)
Non-convertible notes		113,339		96,511		209,850
Bank loans and others		24,921		2,575		27,496
Bank overdrafts		13,184		6,592		19,776
Others		2,755		1,720		4,475
Loans with non-controlling interests		-		455		455
		154,199		107,853		262,052

The composition and fair value of the loans as of June 30, 2023 and June 30, 2022 are as follows:

	Book value				Fair value
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
	(million of ARS)
Non-convertible notes		209,850		245,395		213,975		211,696
Bank loans		27,496		25,865		27,496		25,865
Bank overdrafts		19,776		30,112		19,776		30,112
Other borrowings		4,930		3,525		4,930		3,525
Total borrowings		262,052		304,897		266,177		271,198
Non-current		159,351		99,520
Current		102,701		205,377
Total		262,052		304,897

The following tables describe our total debt as of June 30, 2023:

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Agricultural Business

Agricultural business	Currency	Annual Average Interest Rate	Nominal Value	Book value
			(in million)	(in million ARS)
Cresud’s Series XXX Notes (1)	USD	2.00%	25	5,849
Cresud’s Series XXXI Notes	USD	9.00%	1	123
Cresud’s Series XXXIII Notes	USD	6.99%	13	3,337
Cresud’s Series XXXIV Notes	USD	6.99%	12	3,113
Cresud’s Series XXXV Notes (2)	USD	3.50%	42	10,778
Cresud’s Series XXXVI Notes	USD	2.00%	41	10,475
Cresud’s Series XXXVII Notes	USD	5.50%	24	6,239
Cresud’s Series XXXVIII Notes	USD	8.00%	71	18,731
Cresud’s Series XXXIX Notes	ARS	Badlar + 1.00%	5,122	5,339
Cresud’s Series XL Notes	USD	0.00%	38	9,775
Cresud’s Series XLI Notes	ARS	Badlar + 3.00%	4,147	4,861
Cresud’s Series XLII Notes	USD	0.00%	30	7,680
Bank loans	ARS	79.50%	1,800	2,279
Bank overdrafts	ARS	Float	-	13,088
Brasilagro - Notes	BRL	106.50% e 110.00% e Pré 5.37 + TLP 100.00%	296	16,514
Brasilagro - Bank loans	BRL	3.24% to 6.34% + CDI to 100.00%	162	9,180
Brasilagro - Bank loans	BRL	3.50%	29	1,600
Brasilagro - Bank loans	BRL	Pré 6.34% to 7.64%	25	1,378
Brasilagro - Bank loans	BRL	3.76% to 6.76%	28	1,575
Brasilagro - Bank loans	USD	7.00% to 9.50%	3	644
FyO - Notes	USD	0.00%	41	10,525
FyO - Bank overdrafts	ARS	Float	-	96
FyO - Others	ARS	63.94%	-	2,755
Helmir - Bank loans	USD	5.75%	35	8,265
				154,199

(1) On August 31, 2023, the principal was paid and was the notes were fully cancelled.

(2) On September 13, 2023, the amortization payment was made for 25% of the principal.

Urban Properties and Investments Business

Urban Properties and Investments Business	Currency	Annual Average Interest Rate	Nominal Value	Book value (in million ARS)
			(in million)	(in million ARS)
IRSA’s 2023 Notes - Series VIII	USD	10.00%	11	2,805
IRSA’s 2024 Notes - Series XI	USD	5.00%	13	3,310
IRSA’s 2024 Notes - Series XII (1)	UVA	4.00%	46	12,553
IRSA’s 2024 Notes - Series XIII (2)	USD	3.90%	30	7,696
IRSA’s 2028 Notes - Series XIV	USD	8.75%	157	40,131
IRSA’s 2025 Notes - Series XV	USD	8.00%	62	16,249
IRSA’s 2025 Notes - Series XVI	USD	7.00%	28	7,404
IRSA’s 2025 Notes - Series XVII	USD	5.00%	25	6,363
Loans with non-controlling interests	USD	5.00%	1	455
Related Party	ARS	Badlar	5	17
Related Party	USD	Libor + 2.25%	-	70
Bank loans	ARS	Badlar	2,000	2,325
Bank loans	ARS	84.00%	250	250
Seller financing	USD	N/A	2	599
Others	USD	3.50%	3	1,034
Bank overdrafts	ARS	Float	-	6,592
				107,853

(1)	Series XII denominated in UVA and payable in ARS.
(2)	On September 13, 2023, the amortization payment was made for 25% of the principal.

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Agricultural Business

Series XXX Notes

On August 31, 2020, we issued the Series XXX Notes, denominated in dollars and payable in Pesos at the applicable exchange rate, as defined in the issuance documents, with a nominal value of USD 25.0 million at a fixed rate of 2.0%, maturing 36 months from the date of issuance with quarterly interest payments and principal expiring at maturity. The issue price was 100%. On August 31, 2023, Series XXX notes was fully canceled.

Series XXXI y XXXII Notes

On November 12, 2020, the company carried out an exchange offer of its Series XXIV Notes, for a face value of USD 73.6 million A total amount of USD 65.1 million of Series XXIV Notes were tendered and accepted for the Exchange (for both Series) which represents 88.41% acceptance, through the participation of 1,098 orders.

As a result of the exchange, Series XXXI and XXXII Notes were issued, which are described below:

· Series XXXI: denominated and payable in U.S. dollars for USD 1.3 million at a fixed rate of 9.0%, with quarterly interest payments. The principal payment was set in three installments, as follows: 33% which was paid on November 12, 2021, 33% which was paid on November 12, 2022, and 34% to pay on November 12, 2023. The issue price was 100.0%.

· Series XXXII: denominated and payable in U.S. dollars for USD 34.3 million at a fixed rate of 9.0%, with quarterly interest payments. The principal payment was set in one installment on November 12, 2022. The issue price was 100.0%. On November 14, 2022, Series XXXII Notes were fully canceled at maturity.

Series XXXIII and XXXIV Notes

As consequence of the regulations established by the Central Bank, the issuance of the Series XXXIII and XXXIV Notes were carried out, in order to refinance the Series XXV Notes for a face value of USD 59,561,897. In this regard, the maturity and cancelation of the XXV Notes took place on July 12, 2021.

As a result of the exchange, Series XXXIV Notes were issued, which are described below:

· Series XXXIV: denominated and payable in U.S. dollars for USD 35.7 million at a fixed rate of 6.99%, with semi-annual interest payments. The principal payment was set in three installments of the capital: 33% which was paid on June 30, 2022, 33% which was paid on June 30, 2023, and 34% to pay on June 30, 2024. The issue price was 100%.

On July 6, 2021, we completed the exchange operation of the Series XXV Notes. The nominal value of Series XXV Notes presented and accepted on the exchange was approximately USD 18.8 million. The main characteristics of the issuance are detailed below:

· Series XXXIII Notes: denominated and payable in U.S. dollars for USD 18.8 million at a fixed rate of 6.99%, with semi-annual interest payments. The principal payment was set in three installments of the capital: 33% which was paid on July 6, 2022, 33% which was paid on July 6, 2023, and 34% to pay on July 6, 2024. The issue price was 100%

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Series XXXV Notes

On September 13, 2021, we issued in the local market Series XXXV Notes denominated in U.S. dollars and payable in Pesos at the applicable exchange rate for USD 41.9 million at a fixed rate of 3.5%, with semi-annual interest payments. The principal payment was set in three installments of the capital: 25% which was paid on September 13, 2023; 25% to pay on March 13, 2024, and 50% to pay on September 13, 2024. The price of issuance was 100.0% of the nominal value.

The proceeds were mainly used to refinance short-term liabilities and working capital.

Series XXXVI Notes

On February 18, 2022, we issued in the local Series XXXVI Notes denominated in U.S. dollars and payable in Pesos at the applicable exchange rate for USD 40.6 million at a fixed rate of 2.0%, with semi-annual interest payments. The principal payment will be in one installment, on February 18, 2025. The price of issuance was 100.0% of the nominal value.

The proceeds have been used to refinance short-term liabilities and working capital.

Series XXXVII Notes

On June 15, 2022, we issued in the local market Series XXXVII Notes denominated and payable in U.S. dollars for USD 24.4 million at a fixed rate of 5.5%, with semi-annual interest payments (except for the last installment, which will be due three months after the previous interest period). The principal payment will be in one installment, on March 15, 2025. The price of issuance was 100.0% of the nominal value.

The proceeds have been used to refinance short-term liabilities and working capital.

Series XXXVIII Notes

As a consequence of the regulations established by the Central Bank, on July 6, 2022, we completed the exchange of our Series XXIII Notes, in an aggregate principal amount of USD 113.2 million, maturing on February 16, 2023. On July 6, 2022, the expiration of the exchange offer was announced, USD 98.4 million of Series XXIII Notes were validly tendered and accepted, representing 86.98% of acceptance. On July 8, the exchange offer was settled, the Series XXXVIII Notes were issued, for an amount of USD 70.6 million, and Series XXIII Notes were partially canceled, consequently the outstanding amount is USD 14.7 million and on February 16, 2023, Series XXIII notes was fully canceled.

The exchange offer provided two alternatives:

- Option A: Cash payment for up to 30% of the total amount of participation in the exchange, and the difference to complete the exchanged face value, in Series XXXVIII Notes. For every USD 1 offered, the holder received USD 0.6913 plus the remaining amount to complete USD 1 for each USD 1 of Series XXIII Notes presented for the exchange, in Series XXXVIII Notes. Under Option A, 43.40% of the notes which participated in the exchange were accepted.

- Option B: For each USD 1 of Series XXIII Notes tendered and accepted the bondholder received in exchange USD 1,03 Series XXXVIII Notes. Under Option B, 56.60% of the notes which participated in the exchange were accepted.

In both options, the interest accrued as of settlement date was paid.

Series XXXVIII Notes will mature on March 3, 2026 and will accrue interest at a fixed rate of 8.00%, with interest payable semi-annually on January 3 and July 3 from 2023 to 2026, and at maturity. Amortization of principal will be in one installment on March 3, 2026. The issue price was 100%.

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Series XXXIX Notes

On August 23, 2022, we issued in the local market Series XXXIX Notes denominated and payable in Pesos for ARS 5.122,5 million at a variable rate (private Badlar + 1.0%), with quarterly payments. The principal payment will be in one installment at maturity, on February 23, 2024. The price of issuance was 100.0% of the nominal value.

The proceeds have been used to refinance short-term liabilities and working capital.

Series XL Notes

On December 21, 2022, we issued Series XL Notes in the local market, denominated and payable in US dollars for USD 38.2 million at a fixed rate of 0.0%, for which reason it will not have interest installments. The capital payment was set in three installments: 33% to pay on December 21, 2025; 33% to pay on June 21, 2026, and 34% to pay on December 21, 2026, at maturity. The issue price was 100.0% of the face value.

The funds were mainly used to refinance short-term liabilities and working capital.

Series XLI and XLII Notes

On December 21, 2022, we issued a total amount of USD 50 million in the local market through Series XLI and XLII Notes, the main characteristics of the issuance are detailed below:

· Series XLI Notes: issued for a nominal value of ARS 4,147.3 million, maturing 18 months from the settlement, that is, October 4, 2024. They have a variable rate (private Badlar plus a margin of 1.0%), payable quarterly and will amortize its capital at maturity. The issue price was 100%.

· Series XLII Notes: issued for a nominal value of USD 30.0 million, maturing 37 months from the settlement, that is, May 4, 2026; at a fixed rate of 0.0%, for which reason it will not have interest installments, and will repay its capital at maturity. The issue price was 100%.

Helmir bank loan

On May 11, 2021, our subsidiary Helmir subscribed a loan with Itaú Unibanco S.A. for USD 35 million with an annual fixed rate of 5.75% and semiannual interest payments, and as of the date the outstanding amount is USD 32 million. The maturity will be on May 11, 2024. The loan has as collateral 17,430,006 BrasilAgro ADRs shares and the proceeds were used to excercise BrasilAgro’s warrants.

Issuance of BrasilAgro Non-Convertible Notes

On May 5, 2021, BrasilAgro issued Non-convertible Notes, unique series, for a nominal value of BRL 240 million. They will accrue interest at a variable rate made up for IPCA (Consumer Price Index) plus 5.3658% nominal per year, payable annually and will amortize their capital in two payments on April 13, 2027 and April 12, 2028.

Series I Notes (issued by FYO)

On October 22, 2021, FYO issued its first bond in the local market for an amount of USD 12.3 million. The note is dollar denominated and payable in Pesos at the applicable exchange rate, with an annual fixed rate of 0.0%, for which reason it will not have interest installments, and maturity on October 22, 2023. The issue price was 100.0% of the nominal value.

Series II Notes (issued by FYO)

On July 25, 2022, FYO issued Series II Notes in the local market for an amount of USD 15.0 million. The note is dollar denominated and payable in Pesos at the applicable exchange rate, with an annual fixed rate of 0.0%, for which reason it will not have interest installments, and maturity on July 25, 2025. The issue price was 100.0% of the nominal value.

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The proceeds have been used mainly to attend working capital needs.

Series III Notes (issued by FYO)

On April 25, 2023, FYO issued Series III Notes in the local market for an amount of USD 20.0 million. The note is dollar denominated and payable in Pesos at the applicable exchange rate, with an annual fixed rate of 0.0%, for which reason it will not have interest installments, and maturity on Abril 25, 2026. The issue price was 100.0% of the nominal value.

Urban Properties and Investments Business

Series VIII and IX Notes (issued by IRSA)

On November 12, 2020, the company carried out an exchange offer of its Series I Notes, for a face value of USD 181.5 million.

Face Value of Series I Notes presented and accepted for the Exchange (for both Series): approximately USD 178.5 which represents 98.31% acceptance, through the participation of 6,571 orders.

As a result of the exchange, Series VIII and IX Notes were issued, which are described below:

· Series VIII: denominated and payable in U.S. dollars for USD 31.7 million at a fixed rate of 10.0%, with quarterly payments. The principal payment was set in three installments of the capital: 33% which was paid on November 12, 2021, 33% which was paid on November 12, 2022, and 34% to pay on November 12, 2023. The issuance price was 100.0% of the face value.

· Series IX: denominated and payable in U.S. dollars for USD 80.7 million (includes USD 6,505,560 that were subscribed in cash) at a fixed rate of 10.0%, with quarterly payments. The principal payment was due in one installment on March 1, 2023. The issuance price was 100.0% of the face value. On February 10, 2023, we announced the full redemption of the Series IX notes, which was effective on February 17, 2023, and the Series IX notes were fully canceled.

Series X, XI and XII Notes (issued by IRSA)

On March 31, 2021, the company issued in the local market a total amount of USD 65.5 million through the following Notes:

·	Series X: denominated and payable in Pesos for ARS 701.6 million (equivalent at the time of issuance to USD 7.6 million) at a variable rate (private BADLAR + 5.0%) with quarterly payments. Price of issuance was 100.0% of the nominal value. The principal was paid on March 31, 2022. On March 31, 2022, Series X notes were fully canceled.
·	Series XI: denominated in USD and payable in ARS at the applicable exchange rate for USD 15.8 million at a fixed rate of 5.0%, with semiannual payments plus, if applicable, the Premium Factor in the first year (as defined in the corresponding prospectus supplement) and principal expiring on March 31, 2024. Price of issuance was 98.39% of the face value (IRR 5.6%).
·	Series XII: denominated in UVA and payable in ARS at the applicable UVA value for UVA 53.8 million (equivalent at the time of issuance to ARS 3,868.2 million and USD 42.1 million) at a fixed rate of 4.0%, with semiannual payments and principal expiring on March 31, 2024. Price of issuance was 100.0% of the face value.
	The proceeds have been used to refinance short-term liabilities and working capital.

194

Series XIII (issued by IRSA)

On August 26, 2021, the company issued in the local market a total amount of USD 58.1 million through the following Notes:

·	Series XIII: denominated in U.S. dollars and payable in Pesos at the applicable exchange rate for USD 58.1 million at a fixed rate of 3.9%, with semi-annual payments. The principal payment was set in three installments: 25% which was paid on August 26, 2023; 25% to pay on February 26, 2024; and 50% to pay on August 26, 2024. The price of issuance was 100.0% of the face value.
	The proceeds will be used to refinance short-term liabilities.

Series XIV Notes (issued by IRSA)

As a consequence of the regulations established by the Central Bank, on July 6, 2022, the company completed the exchange of its Series II Notes, originally issued by IRSA Commercial Properties S.A., in an aggregate principal amount of USD 360 million, maturing on March 23, 2023. On July 6, 2022, the expiration of the exchange was announced, USD 238,985,000 of Series II Notes were validly tendered and accepted, representing an acceptance of 66.38%. On July 8, the exchange offer was settled, the new Series XIV Notes were issued for an amount of USD 171.2 million and the Series II Notes were partially canceled, the outstanding principal amount is USD 121,015,000. On February 3, 2023, we announced the full redemption of the Series II notes, which was effective on February 8, 2023, and the Series II notes were fully canceled.

The exchange offered two alternatives:

- Option A: Cash payment for up to 30% of the total amount of participation in the exchange, and the difference to complete the exchanged face value, in Series XIV Notes with a premium of 1,015 times. For each USD 1,000 tendered, the bondholder received USD 493.18 in cash and USD 514.42 in Series XIV Notes. Under Option A, 60.83% of the notes which participated in the exchange were accepted.

- Option B: For each USD 1,000 of Series II Notes the bondholder received 1,030 of Series XIV Notes. Under Option B, 39.17% of the notes which participated in the exchange were accepted.

In both options, the interest accrued as of settlement date was paid.

Series XIV Notes were issued under New York Law, will mature on June 22, 2028 and will accrue interest at a fixed rate of 8.75%, with interest payable semi-annually on June 22 and December 22 of each year, until expiration. Amortization will be in annual installments payable on June 22 of each year, each for 17.5% from 2024 to 2027 and the remaining 30% on June 22, 2028. The issue price was 100%.

Series XIV Notes due 2028 are subject to certain covenants, events of default and limitations, such as the limitation on incurrence of additional indebtedness, limitation on restricted payments, limitation on transactions with affiliates, and limitation on merger, consolidation and sale of all or substantially all assets.

To incur additional indebtedness, IRSA is required to meet a minimum 2.00 to 1.00 Consolidated Interest Coverage Ratio. The Consolidated Interest Coverage Ratio is defined as Consolidated EBITDA divided by consolidated net interest expense. Consolidated EBITDA is defined as operating income plus depreciation and amortization and other consolidated non-cash charges.

The Series XIV Notes contain financial covenants limiting IRSA’s ability to declare or pay dividends in cash or in kind, unless the following conditions are met at the time of payment:

(a)	no Event of Default shall have occurred and be continuing;
(b)	IRSA may incur at least USD 1.00 worth of additional debt pursuant to the “Restriction on Additional Indebtedness”;
(c)	and the aggregate amount of such dividend exceeds the sum of:

195

(i)	100% of cumulative EBITDA for the period (treated as one accounting period) from July 1, 2020 through the last day of the last fiscal quarter ended prior to the date of such Restricted Payment minus an amount equal to 150% of consolidated interest expense for such period; and
(ii)	any reductions of Indebtedness of IRSA on a consolidated basis after the Issue Date any reductions of Indebtedness of after the Issue Date exchanged for to Capital Stock of IRSA or its Subsidiaries.

Series XV and XVI Notes (issued by IRSA)

On January 31, 2023, the company issued in the local market a total amount of USD 90 million through the following Notes:

• Series XV Notes: denominated and payable in U.S. dollars for a total of USD 61.7 million at a fixed rate of 8.0%, with semi-annual payments. The principal payment will be in one installment at maturity on March 25, 2025. The issue price was 100.0% of the face value.

• Series XVI Notes: denominated and payable in U.S. dollars for a total of USD 28.2 million at a fixed rate of 7.0%, with semi-annual payments. The principal payment will be in one installment at maturity on July 25, 2025. The issue price was 100.0% of the face value.

The proceeds were used mainly to refinance short-term liabilities and working capital.

Series XVII Notes (issued by IRSA)

On June 7, 2023, IRSA issued in the local market a total amount of USD 25 million, the main characteristics of the issuance are detailed below:

• Series XVII Notes: denominated and payable in U.S. dollars for a total of USD 25 million at a fixed rate of 5.0%, with semi-annual payments (except for the first interest payment, which will be nine months from the settlement). The capital payment will be done in one installment at maturity on December 7, 2025. The issue price was 100.0% of the face value.

The proceeds will mainly be used to refinance short-term liabilities and working capital.

C. Research and Developments, Patents and Licenses

Investments in technology, in our agricultural business, amounted to ARS 155 million, ARS 75 million and ARS 43 million for fiscal years 2023, 2022 and 2021 respectively. Our total technology investments aimed to increase the productivity of purchased land have amounted to ARS 12,008 million since fiscal year 1995.

We reach our objectives within this area through the implementation of domestic and international technological development projects focusing mainly on:

· Quality and productivity improvement.

· Increase in appreciation value of land through the development of marginal areas.

· Increase in the quality of food in order to achieve global food safety standards. We aim to implement and perform according to official and private quality protocols that allow us to comply with the requirements of our present and future clients. Regarding official regulations, in 2003 we implemented the Servicio Nacional de Sanidad y Calidad Agroalimentaria law on animal identification for livestock in six farms. Simultaneously, in 2004 we implemented Global GAP Protocols (formerly EurepGap) with the objective of complying with European Union food safety standards and as a mean for continuous improvement of the internal management and system production of our farms. Our challenge is to achieve global quality standards.

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· Certification of suitable quality standards, since in recent years worldwide agriculture has evolved towards more efficient and sustainable schemes in terms of environmental and financial standpoints, where the innocuousness and quality of the production systems is becoming increasingly important. In this context, Good Agricultural Practices (GAP) have emerged, as a set of practices seeking to ensure the innocuousness of agricultural products, the protection of the environment, the workers’ safety and well-being, and agricultural health, with a view to improving conventional production methods. Certification of such standards allows to demonstrate the application of Good Agricultural Practices to production systems and ensures product traceability, allowing to impose stricter controls to verify the enforcement of the applicable laws.

· The implementation of a system of control and assessment of agricultural tasks for analyzing and improving efficiency in the use of agricultural machinery hired. For each of the tasks, a minimum standard to be fulfilled by contractors was set, which has led to do an improvement in the plant stand upon sowing, a better use of supplies and lower harvesting losses.

We have several trademarks registered with the Instituto Nacional de la Propiedad Industrial, the Argentine institute for industrial property. We do not own any patents nor benefit from licenses from third parties.

D. Trend Information

International Macroeconomic Outlook

As reported in the IMF’s WEO, worldwide GDP is expected to grow 3.0% in 2023 and 2024. As with the July 2023 WEO projections the rise in central bank policy rates to fight inflation continues to weigh on economic activity.  

Global headline inflation is expected to fall from 8.7 percent in 2022 to 6.8 percent in 2023 and 5.2 percent in 2024, according to IMF’s WEO. Inflation could remain high and even rise if further shocks occur, including those from an intensification of the war in Ukraine and extreme weather-related events, triggering more restrictive monetary policy. On the upside, inflation could fall faster than expected, reducing the need for tight monetary policy, and domestic demand could again prove more resilient. In this sense, the buildup of gas inventories in Europe and weaker-than-expected demand in China, energy and food prices have dropped substantially from their 2022 peaks, although food prices remain elevated.

The global recovery from the Covid-19 pandemic and Russia’s invasion of Ukraine is slowing amid widening divergences among economic sectors and regions. China’s recovery could slow, in part as a result of unresolved real estate problems, with negative cross-border spillovers.

Manufacturing activity and consumption of services in China rebounded when Chinese authorities abandoned their strict lockdown policies; net exports contributed strongly to sequential growth in February and March as supply chains normalized and firms swiftly put backlogs of orders into production. Nonetheless, continued weakness in the real estate sector is weighing on investment, and foreign demand remains weak.

In addition, banking scare remained contained and limited to problematic regional banks in the United States and Credit Suisse in Switzerland. Accordingly, since the April 2023 WEO, global financial conditions have eased, a sign that financial markets may have become less concerned about risks to financial stability coming from the banking sector. But tight monetary policy continues to put some banks under pressure, both directly (through higher costs of funding) and indirectly (by increasing credit risk).

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Argentine macroeconomic context

Shopping malls sales reached a total ARS 144,743.3 million in June 2023, which represents a 149.5% increase as compared to June 2022. Accumulated sales for the first six months, represent a 143.3% in current terms and 12.8% increase in real terms as compared to the same period of 2022.

The INDEC reported that, for the eight months ended August 31, 2023, industrial activity in Argentina decreased by 3.1% compared to the same period in 2022. The textile industry accumulated a 2.7% growth during the first eight months of 2023 as compared to the same period last year. Moreover, the EMAE as of July 31, 2023, decreased by 1.3% compared to the same month in 2022.

Regarding the balance of payments, in the second quarter of 2023 the current account deficit reached USD 6.351 million, with USD 3,662 million allocated to the goods and services trade balance, and USD 3,409 million to the net primary deficit, and a surplus of USD 719 million to net secondary income.

During the second quarter of 2023, the financial account recorded a net capital inflow of USD 7,602 million, which was the result of a net fall in external financial assets held by residents of USD 5,166 million and a net increase in external liabilities of USD 2,436 million. This represents an increase in the net capital inflow of USD 4,513 million in relation to with what was estimated for the same quarter of the previous year.

As of June 30, 2023, international reserves reached USD 27,926 million, which implied an accounting decrease of USD 11,134 million compared to the previous quarter. This effect is mainly explained by balance of payments transactions for USD 10,058 million, and by a decreased of USD 1,076 million, driven by the changes in currencies parities.

In local financial markets, the Private Badlar rate in Pesos ranged from 50.63% to 92.25% in the period from July 2022 to June 2023, averaging 70.83% in June 2023 compared to 38.06% in June 2022. As of June 30, 2023, the seller exchange rate quoted by Banco de la Nación Argentina was ARS 256.70 per USD 1.00. As of June 30, 2023, Argentina’s country risk decreased by 367 basis points in year-on-year terms. The debt premium paid by Argentina was 2,061 basis points in June 2023, compared to 229 basis points paid by Brazil and 376 basis points paid by Mexico.

As of October 12, 2023, the Private Badlar rate in Pesos peaked at 114.0625%. As of October 18, 2023, the seller exchange rate quoted by Banco de la Nación Argentina was ARS 350.10 per USD 1.00. As of October 17, 2023, Argentina’s country risk decreased by 461 basis points in year-on-year terms. The debt premium paid by Argentina was at 2,376 basis points as of October 17, 2023, compared to 204 basis points paid by Brazil and 372 basis points paid by Mexico as of that same date.

Likewise, in the national and international framework described above, the Company periodically analyzes alternatives to appreciate its shares value. In that sense, the Board of Directors of the Company will continue focusing on the evaluation of financial, economic and / or corporate tools that allow the Company to improve its position in the market in which it operates and have the necessary liquidity to meet its obligations. Within the framework of this analysis, the indicated tools may be linked to corporate reorganization processes (merger, spin-off or a combination of both), disposal of assets in public and / or private form that may include real estate as well as negotiable securities owned by the Company, incorporation of shareholders through capital increases through the public offering of shares to attract new capital, repurchase of shares and instruments similar to those described that are useful to the proposed objectives.

Agriculture and Cattle Raising Sector in Argentina

Agriculture

Argentina has positioned itself over the years as one of the world’s leading food producers and exporters. It is the second largest country in South America after Brazil and has particularly favorable natural conditions for diversified agricultural production: vast extensions of fertile land and varied soil and weather patterns.

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During the decade of the nineties, the Argentine agriculture and cattle raising industry experienced sweeping changes, such as a significant increase in production and yield (thanks to a sustained agricultural modernization process), relocation of production (crops vs. livestock) and a significant restructuring process within the industry, as well as increased land concentration. Taking advantage of a favorable international context, the agriculture and cattle raising sector has been one of the major drivers of the Argentine recovery after the economic and financial crisis of 2002.

According to the World Agricultural Supply and Demand Estimates Repro published by the United States Department of Agriculture on September 12, 2023, world soybean production for the season 2023/2024 is expected to be about 401.33 million tons, an increase of 8.4% as compared to the season 2022/2023. Argentina, is one of the major exporters of Soybean together with Brazil, Paraguay and Uruguay. Argentina’s soybean production and soybean exports for the season 2023/2024 are expected to be about 48.00 million tons and 4.60 million tons, respectively. This means a 92.0% increase in Argentina’s soybean production, and a 15.0% increase on its soybean exports; compared with the season 2022/2023.

World corn production is expected to be about 1,214.29 million tons for season 2023/2024, 5.08% more than in the previous season. Argentina is the world’s third largest corn exporter after United States and Brazil, and followed by Ukraine, Russia and South Africa. For the season 2023/2024 Argentina’s corn production and exports are expected to be about 54.0 million tons and 40.5 million tons, respectively. That means a 58.8% increase in Argentinia’s corn production, and a 76.1% increase on its corn exports; compared with the season 2022/2023.

The policies implemented by the new government ever since taking office have led to better projections for the agricultural industry. Mainly, the strong devaluation of the Peso, tax reductions on exports and special exchange rate for soybean products have improved the situation of agricultural growers.

World wheat production is expected to be about 787.34 million tons for season 2023/2024, a decrease of 0.4% as compared to the season 2022/2023. Argentina’s wheat production and wheat exports for the season 2022/2023 are expected to be about 16.50 million tons and 11.50 million tons, respectively. This means a 31.5% increase in Argentina’s wheat production, and a 155.6% increase on its wheat exports; compared with the season 2022/2023.

Cattle

According to the Argentine Ministry of Agriculture, Livestock and Fisheries and the Argentine Ministry of Economy, in June 2023, cattle represented 53.7% of total meat production, followed by poultry with the 34.7% and porcine with 11.7%. Compared to the previous year, chicken production decreased 1.7% and porcine production increased 0.4%.

In July 2023, cattle production reached 290 thousand tons, 2.4% less than the previous month and an increase of 10.7% compared to the previous year. Meanwhile, slaughtered heads amounted to 1.29 million in July 2023, 2% less than the previous month and an increase of 16% compare to the previous year.

When analazying the last 12 months to July 2023, 1.4 million more animals were slaughtered than in the previous 12 months, of which 54% were females. Furthermore, the slaughter of females was 48.6% in July 2023, following the high value of the previous 4 months.

Urban Properties and Investment Business

Evolution of Shopping Malls in Argentina

In August 2023, the CCI showed a 1.15% increase compared to July 2023, and a 18.95% increase compared to August 2022. Shopping mall sales increased 149.5% in the fiscal 2023 compared to fiscal 2022. Accumulated sales for the first six months, represent a 143.3% in current terms and 12.8% increase in real terms as compared to the same period of 2022.

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Evolution of Office Properties in Argentina

The corporate activity carried out remotely or virtual work that characterized this stage of confinement by Covid-19 brought with it a combination of lower demand, increased vacancies, and a slight decrease in the rental prices of category A + and A office buildings in Buenos Aires.

According to Colliers, the second quarter of 2023 closes with a vacancy in the order of 17.52% regarding the premium market of the City of Buenos Aires, slightly decreasing when compared to the previous quarter. Rental prices did not undergo major changes during the second quarter of the year 2023. Category A+ properties have an average price of 23.9 USD/sqm and class A properties of 18.7 USD/sqm. Regarding the average price per submarket, Catalinas and Norte CABA reflect the highest with records of 26.41 USD/sqm and 26.01 USD/sqm respectively.

Evolution of the Hotel industry in Argentina

According to the EOH prepared by INDEC, in June 2023, overnight stays at hotel and para-hotel establishments were estimated at 3.4 million, 17.1% more than the same month the previous year. Overnight stays by resident and nonresident travelers increased by 9.8% and 59.4%, respectively. Total travelers who stayed at hotels during June 2023 were 1.5 million, a 17.2% increase compared to the same month the previous year. The number of resident and nonresident travelers increased by 9.4% and 66.1%, respectively. The Room Occupancy Rate in June 2023 was 44.1%, compared to a 40.7% of the same month the previous year. Moreover, the Bed Occupancy Rate for the same period was 33.0%, compared to a 31.0% of the same month the previous year.

E. Critical Accounting Estimates

Not all of these significant accounting policies require management to make subjective or complex judgments or estimates. The following is intended to provide an understanding of the policies that management considers critical because of the level of complexity, judgment or estimations involved in their application and their impact on the Consolidated Financial Statements. These judgments involve assumptions or estimates in respect of future events. Actual results may differ from these estimates.

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Estimation	Main assumptions	Potential implications	Main references (1)
Recoverable amounts of cash-generating units (even those including goodwill), associates and assets.	The discount rate and the expected growth rate before taxes in connection with cash-generating units. The discount rate and the expected growth rate after taxes in connection with associates. Cash flows are determined based on past experiences with the asset or with similar assets and in accordance with the Company’s best factual assumption relative to the economic conditions expected to prevail. Business continuity of cash-generating units. Appraisals made by external appraisers and valuators with relation to the assets’ fair value, net of realization costs (including real estate assets).	Should any of the assumptions made be inaccurate; this could lead to differences in the recoverable values of cash-generating units.	Note 8 - Investments in associates and joint ventures Note 10 - Property, plant and equipment Note 12 - Intangible assets
Control, joint control or significant influence	Judgment relative to the determination that the Company holds an interest in the shares of investees (considering the existence and influence of significant potential voting rights), its right to designate members in the executive management of such companies (usually the Board of directors) based on the investees’ bylaws; the composition and the rights of other shareholders of such investees and their capacity to establish operating and financial policies for investees or to take part in the establishment thereof.	Accounting treatment of investments as subsidiaries (consolidation) or associates (equity method)	Note 2.3 - Scope of consolidation; “de facto control”
Estimated useful life of intangible assets and property, plant and equipment	Estimated useful life of assets based on their conditions.	Recognition of accelerated or decelerated depreciation by comparison against final actual earnings (losses).	Note 10 - Property, plant and equipment Note 12 - Intangible assets
Fair value valuation of investment properties	Fair value valuation made by external appraisers and valuators. See Note 9.	Incorrect valuation of investment property values	Note 9 - Investment properties
Income tax	The Company estimates the income tax amount payable for transactions where the Treasury’s Claim cannot be clearly determined. Additionally, the Company evaluates the recoverability of assets due to deferred taxes considering whether some or all of the assets will not be recoverable.	Upon the improper determination of the provision for income tax, the Company will be bound to pay additional taxes, including fines and compensatory and punitive interest.	Note 23 - Taxes
Allowance for doubtful accounts	A periodic review is conducted of receivables risks in the Company’s clients’ portfolios. Bad debts based on the expiration of account receivables and account receivables’ specific conditions.	Improper recognition of charges / reimbursements of the allowance for bad debt.	Note 17 - Trade and other receivables
Level 2 and 3 financial instruments	Main assumptions used by the Company are: ·     Discounted projected income by interest rate ·     Values determined in accordance with the shares in equity funds on the basis of its Financial Statements, based on fair value or investment assessments. ·     Comparable market multiple (EV/GMV ratio). ·     Underlying asset price (Market price); share price volatility (historical) and market interest rate (Libor rate curve).	Incorrect recognition of a charge to income / (loss).	Note 16 - Financial instruments by category
Probability estimate of contingent liabilities.	Whether more economic resources may be spent in relation to litigation against the Company, such estimate is based on legal advisors’ opinions.	Charge / reversal of provision in relation to a claim.	Note 21 - Provisions
Qualitative considerations for determining whether or not the replacement of the debt instrument involves significantly different terms	The entire set of characteristics of the exchanged debt instruments, and the economic parameters represented therein: Average lifetime of the exchanged liabilities; Extent of effects of the debt terms (linkage to index; foreign currency; variable interest) on the cash flows from the instruments.	Classification of a debt instrument in a manner whereby it will not reflect the change in the debt terms, which will affect the method of accounting recording.	Note 16 - Financial instruments by category (Financial liabilities)
Biological assets	Main assumptions used in valuation are yields, production costs, selling expenses, forwards of sales prices, discount rates.	Wrong recognition/valuation of biological assets. See sensitivities modeled on these parameters in Note 13.	Note 14 - Biological assets

(1) Reference to notes to our Audited Consolidated Financial Statements.

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Item 6. Directors, Senior Management and Employees

A. Directors and Senior Management

Board of Directors

Under the Argentine General Corporation Law, corporations are managed by a board of directors elected at a shareholders’ meeting. Pursuant to section 59 of the Argentine General Corporation Law, directors have the obligation to perform their duties with the loyalty and the diligence of a prudent business person. Directors are jointly and severally liable to the company, the shareholders and third parties for the improper performance of their duties, for violating the law, the company’s by-laws or regulations, if any, and for any damage caused to these parties by fraud, abuse of authority or negligence, as provided for in Section 274 of the Argentine General Corporation Law. The following concepts are considered an integral part of a director’s duty of loyalty: (i) the prohibition to use the company’s assets and confidential information for private purposes; (ii) the prohibition to take advantage of, or allow others to take advantage, by action or omission, of the company’s business opportunities; (iii) the obligation to exercise their powers only for the purposes set forth by law, the bylaws of the company, or the resolutions of the shareholders or the board of directors; (iv) the obligation to act diligently in the preparation and disclosure of the information provided to the market and to ensure the independence of the company’s external auditors; and (v) the obligation to look after the company’s best interests, so that the actions of the board of directors are not contrary, directly or indirectly, to those interests. In accordance with the Argentine General Corporation Law, specific functions may be assigned to a director by statute or a resolution of the general shareholders’ meeting. In such cases, the attribution of responsibility will be based on individual performance, provided that the assignment of specific functions had been registered in the Public Registry. Under the Argentine General Corporation Law, directors cannot perform activities in competition with the company without the express authorization of the shareholders’ meeting. Directors must inform the board and the supervisory committee about any conflict of interest they may have regarding a proposed transaction and must abstain from voting on such matters.

A director shall not be responsible for the decisions taken in a board of directors’ meeting as long as he or she states his or her opposition in writing and informs the supervisory committee before any claim arises. Except in the event of a mandatory liquidation or bankruptcy, a director’s performance approved by the company’s shareholders releases such director of any liability for his performance, unless shareholders representing 5% or more of the company’s capital stock object to that approval, or the decision is taken in violation of the applicable laws or the company’s by-laws. The company is entitled to file judicial actions against a director if a majority of the company’s shareholders at a shareholders’ meeting requests that action. If the company does not initiate a legal claim within three (3) months since the shareholders resolution was approved, any shareholder will be entitled to file the claim on the company’s behalf.

Under the Argentine General Corporation Law, the board of directors is in charge of the management of the company and, therefore, makes any and all decisions in connection therewith, as well as those decisions expressly provided for in the Argentine General Corporation Law, our by-laws and other applicable regulations. Furthermore, our board of directors is generally responsible for the execution of the resolutions passed by shareholders’ meetings and for the performance of any particular task expressly delegated by the shareholders. Under the Argentine General Corporation Law, the duties and responsibilities of an alternate director, when acting in the place of a director on a temporary or permanent basis, are the same as those discussed above for directors, and they have no other duties or responsibilities as alternate directors.

We are managed by a board of directors. Our bylaws provide that our Board of Directors shall consist of a minimum of three and a maximum of fifteen regular directors and the same or less numbers of alternate directors. Currently, our board is composed by twelve regular directors and six alternate directors. The directors will renew their positions at the rate of one third of the total number each year. For this purpose, once the amendment to the Company’s by-laws is approved, the first ordinary shareholders meeting will decide for the first time the duration of the Directors that are elected to comply with the above provisions. Notwithstanding the foregoing, each annual shareholders’ meeting will decide in each case the increase or decrease in the number of directors, their election and also, the duration in their positions, being established that in the hypothetical case that the Board of Directors is integrated with a number less than nine members, it may not be renewed in a partial or staggered manner, if the exercise of the cumulative vote is prevented in this way. The directors and alternate directors may be re-elected indefinitely.

Alternate directors will be summoned to exercise their functions in case of absence, vacancy or death of a regular director or until a new director is appointed.

The table below shows information about our regular directors and alternate (For information see, “Recent Developments- General Ordinary Shareholders’ Meeting”):

Directors (1)	Date of Birth	Position in Cresud	Term Expires (2)	Date appointed to the current office	Current position held since
Eduardo S. Elsztain	01/26/1960	Chairman	06/30/26	10/05/23	1994
Saúl Zang	12/30/1945	First Vice-Chairman	06/30/26	10/05/23	1994
Alejandro G. Elsztain	03/31/1966	Second Vice-Chairman and CEO	06/30/25	10/28/22	1994
Jorge O. Fernández	01/08/1939	Regular Director	06/30/24	10/21/21	2003
Fernando A. Elsztain	01/04/1961	Regular Director	06/30/25	10/28/22	2004
Mariana Renata Carmona	02/11/1961	Regular Director	06/30/26	10/05/23	2020
Alejandro G. Casaretto	10/15/1952	Regular Director	06/30/26	10/05/23	2008
Liliana Glikin	03/29/1953	Regular Director	06/30/24	10/28/22	2019
Alejandro Bartolome	12/09/1954	Regular Director	06/30/25	10/28/22	2019
Gabriela Macagni	01/13/1964	Regular Director	06/30/25	10/28/22	2020
Enrique Antonini	03/16/1950	Regular Director	06/30/24	10/28/22	2022
Nicolás Bendersky	04/21/1983	Regular Director	06/30/24	10/28/22	2022
Eduardo Kalpakian	03/03/1964	Alternate Director	06/30/26	10/05/23	2007
Ilan Elsztain	01/08/1992	Alternate Director	06/30/25	10/28/22	2020
Iair Elsztain	03/05/1995	Alternate Director	06/30/25	10/28/22	2020
Gabriel A.G. Reznik	11/18/1958	Alternate Director	06/30/24	10/21/21	2021
Pedro D. Labaqui Palacio	02/22/1943	Alternate Director	06/30/24	10/21/21	2021

_______________ 

(1)	The business address of our management is Carlos Della Paolera 261, 9th Floor, (C1001ADA) Buenos Aires, Argentina.
(2)	Term expires at the annual ordinary shareholders’ meeting.

Liliana Glikin, Alejandro Bartolome, Graciela Macagni, Enrique Antonini and Eduardo Kalpakian, qualify as independent, in accordance with the CNV Rules.

Our Chairman Eduardo S. Elsztain is the husband of our regular director Mariana R. Carmona, and they are both parents to alternate directors Ilan and Iair Elsztain. Eduardo S. Elsztain is also the brother of Second Vice-Chairman and CEO Alejandro G. Elsztain and cousin of the regular director Fernando A. Elsztain.

The following is a brief biographical description of each member of our board of directors:

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Eduardo S. Elsztain. Mr. Eduardo S. Elsztain has been engaged in the real estate business for more than thirty years. He is the Chairman of the Board of Directors of IRSA, Banco Hipotecario, BrasilAgro Companhia Brasileira de Propriedades Agrícolas Ltda., Austral Gold Ltd. and Consultores Asset Management S.A., among other companies. He also Chairs Fundación IRSA, is a member of the World Economic Forum, the Council of the Americas, the Group of Fifty and the Argentine Business Association (AEA), among others. He is co-founder of Endeavor Argentina and serves as Vice President of the World Jewish Congress.

Saúl Zang. Mr. Zang holds a law degree from the Universidad de Buenos Aires. He is a member of the International Bar Association and of the Interamerican Federation of Lawyers. He is a founding partner of Zang, Bergel & Viñes Law Firm. Mr. Zang is Vice-Chairman I of IRSA, Consultores Asset Management S.A. and Chairman at Puerto Retiro S.A. He is also director of Banco Hipotecario, BrasilAgro Companhia Brasileira de Propriedades Agrícolas Ltda., BACS Banco de Crédito & Securitización S.A., Nuevas Fronteras S.A., Fibesa S.A.U., and Palermo Invest S.A., among other companies.

Alejandro Gustavo Elsztain. Mr. Alejandro Gustavo Elsztain holds an agricultural engineer degree from the Universidad de Buenos Aires. He completed the Advanced Management Program at Harvard Business School. He is currently serving as Vice-President II of IRSA, and Vice President of Nuevas Fronteras S.A. and Hoteles Argentinos S.A.U. He is also director of BrasilAgro, a Brazilian agricultural company, FYO and Agrofy. He is also the president of Fundación Hillel Argentina.

Jorge Oscar Fernández. Mr. Fernández obtained a degree in Economic Sciences from Universidad de Buenos Aires. He has performed professional activities at several banks, financial corporations, insurance firms and other companies related to financial services. He is also involved in many industrial and commercial institutions and associations.

Fernando Adrián Elsztain. Mr. Fernando Adrián Elsztain holds an architecture degree from Universidad de Buenos Aires. He has been engaged in the real estate business as a consultant and as managing officer of a real estate company. He is Chairman of the Board of Directors of Palermo Invest S.A. and Nuevas Fronteras S.A. He is also a director of IRSA, Hoteles Argentinos S.A.U. and Llao Llao Resorts S.A., and an alternate director of Puerto Retiro S.A. 

Mariana R. Carmona. Ms. Carmona has a degree on Psychology from the Universidad de Buenos Aires. She is a founder and director of the Fundación Museo de los Niños and member of IWF Argentina. She is also the Vice President I of Consultores Asset Management S.A.

Alejandro Gustavo Casaretto. Mr. Casaretto obtained a degree in agricultural engineering from Universidad de Buenos Aires. He has served as our technical manager, farm manager, and technical coordinator since 1975. He joined as a member of the board of directors from 2008.

Liliana Irene Glikin. Ms. Glikin has obtained a law degree from the Universidad de Buenos Aires and a journalist degree from the Journalism School of the “Circulo de la Prensa”. She is also law professor at the Universidad de Buenos Aires. She is partner and legal advisor in “Stolkiner y Asociados” firm, and she is also partner of the law firm Glikin-Rapoport.

Alejandro Mario Bartolome. Mr. Bartolomé has a degree in agronomy from the Universidad de Buenos Aires and also has a Master of Science from the Reading University, England. He is an entrepreneur and wine producer. He is co-founder and ex director of GDM, former Don Mario, a leader company focus on genetics in the world. He has worked as production manager and CEO of the Company.

Gabriela Macagni. Ms. Macagni has a degree in chemical engineering from the Technological Institute of Buenos Aires (ITBA) and postgraduate degrees in business from the Harvard Business School and the Stanford Business School. She started her career in 1987 as a consultant at Accenture. She worked at Citibank since 1990, developing in the investment banking area, where he was responsible for structuring operations for more than USD 2,000 million, in the local and international capital markets. As a senior manager in commercial banking, she led the Media and Telecommunications unit. After the 2002 crisis, she was responsible for the Corporate Restructuring area and in 2005 she was appointed member of the executive board, in charge of Strategic Planning. In 2001 she was appointed as executive manager of Endeavor. From 2015 to 2019, she served as an independent director of Grupo Supervielle (NYSE: SUPV) where she was a member of the Audit, Human Resources, Compliance and Corporate Governance. She led the launch and operation of the Superville Corporate Venture Fund until March 2020. She is currently an independent director of HSBC Argentina, a member of the ITBA board of directors and a trustee of the San Andrés Civil Educational Association.

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Enrique Antonini. Mr. Antonini is a lawyer, graduated with honors from the Law School of the University of Buenos Aires. He works as Director of Banco Mariva S.A. from 1991 to date. He is a Regular Director of the Buenos Aires Stock Exchange.

Nicolás Bendersky. Mr. Bendersky has a degree in Economics and a Master’s Degree in Finance from CEMA University. He began his career in 2001 in the Corporate Finance area of IRSA and CRESUD and between 2004 and 2014, he held various positions at Consultores Asset Management S.A. where he currently works as CIO. Between 2015 and 2021, he was part of the boards of numerous leading public and private companies in Israel and is currently a regular member of the Board of Banco Hipotecario and IRSA. 

Eduardo Kalpakian. Mr. Kalpakian holds a degree in business from the Universidad de Belgrano. He has also an MBA from Universidad del CEMA. He has been director for 35 years of Kalpakian Hnos. S.A.C.I., a leading carpet manufacturer and flooring distributor in Argentina. Currently he is vice-chairman of such company’s board and CEO. He is also vice-chairman of the board of La Dormida S.A.A.C.E I.

Ilan Elsztain. Mr. Elsztain obtained a Bachelor’s degree in Economics from the University of Buenos Aires. For 5 years he worked in different group companies: Avenida and Fibesa S.A. He is currently alternate director of Consultores Asset Management S.A., where he carries out research work.

Iair Elsztain. Mr. Elsztain is currently working for a company called Upland, in which he has a temporary contract until February 2024. He is a member of the Board of Directors and founder of ISE (Israel Startup Experience), an 8 month experience for young people in Israel and is also alternate director of IRSA.

Gabriel A. G. Reznik. Mr. Reznik obtained a degree in Civil Engineering from Universidad de Buenos Aires. He worked for IRSA since 1992 until May 2005 at which time he resigned. He had formerly worked for an independent construction company in Argentina. He is an alternate director of IRSA.

Pedro Damaso Labaqui Palacio. Mr. Labaqui obtained a law degree from Universidad de Buenos Aires. Previously, he was a member of the Board of Directors of Bapro Medios de Pago S.A.

Employment contracts with certain members of our board of directors

We do not have written contracts with our directors. However, Eduardo S. Elsztain, Saul Zang, Alejandro G. Elsztain and Fernando A. Elsztain are employed by us under the Labor Contract Law No. 20,744.

Law No. 20,744 governs certain conditions of the labor relationship, including remuneration, protection of wages, hours of work, holidays, paid leave, maternity protection, minimum age requirements, protection of young workers and suspension and termination of the contract.

Senior Management

Senior management performs its duties in accordance with the instructions of our board of directors. There are no arrangements by which a person is selected as a member of our senior management.

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The following table shows information about our current senior management of the Operations Center in Argentina (designated by the board of directors meeting):

Name	Date of Birth	Position	Current Position Held Since
Alejandro G. Elsztain	03/31/1966	CEO	1994
Matías I. Gaivironsky	02/23/1976	Chief Financial and Administrative Officer	2011
Diego Chillado Biaus	09/15/1978	CEO of Operations in Argentina	2022

The following is a biographical description of each of our senior managers who are not directors:

Matías Iván Gaivironsky. Mr. Matías Gaivironsky holds a degree in business administration from Universidad de Buenos Aires and a master’s degree in finance from Universidad del CEMA. Since 1997 he has served in various positions at IRSA Commercial Properties, IRSA, CRESUD and in 2009 he was appointed CFO of Tarshop. Since 2011, he serves as Chief Administrative and Financial Officer of IRSA and CRESUD. Mr. Gaivironsky is also director of Banco Hipotecario. 

Diego Chillado Biaus. Mr. Diego Chillado Biaus obtained a degree in Administration and Agricultural Economics from Universidad de Buenos Aires. He has a master’s degree in Agribusiness from Universidad Austral. He is currently the Commercial Manager of Cresud, where he has served in several positions since 2005. He is also a member of the Board of Directors of FyO. Previously, he worked as Commercial Director of BrasilAgro and General Manager of Kumagro.

Executive Committee

Pursuant to our by-laws, our day-to-day business is managed by an executive committee consisting of a minimum of four and a maximum of seven directors and one alternate member, among which there should be the Chairman, First Vice-Chairman and Second Vice-Chairman of the board of directors. The current members of the Executive Committee are Messrs. Eduardo S. Elsztain, Saúl Zang, Alejandro Elsztain and Fernando A. Elsztain.

The executive committee is responsible for the management of our business pursuant to the authority delegated by our board of directors in accordance with applicable law and our bylaws. Pursuant to Section 269 of the Argentine General Corporation Law, the executive committee is only responsible for the management of the day-to-day business. Our bylaws authorize the executive committee to: 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 establish liens to secure our obligations; and perform any other acts necessary to manage our day-to-day business.

Supervisory Committee

LGS and the Argentine Capital Market Law require any corporation that has made a public offering in Argentina, such as us, to have a supervisory committee (comisión fiscalizadora). Pursuant to Law No. 19,950, only lawyers and accountants admitted to practice in Argentina or civil partnerships composed of such persons may serve as statutory auditors in an Argentine sociedad anónima.

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The primary responsibilities of the supervisory committee are to monitor the management’s compliance with the LGS, the applicable bylaws, regulations, if any, and the shareholders’ resolutions, and to perform other functions, including, but not limited to: (i) supervise and inspect the corporate books and records whenever necessary, but at least quarterly; (ii) attend meetings of the directors, executive committee, audit committee and shareholders; (iii) prepare an annual report concerning our financial condition and submit it to our shareholders at the ordinary annual meeting; (iv) provide certain information regarding the company, in response to the request of shareholders representing at least 2% of the capital stock; (v) call an extraordinary shareholders’ meeting when necessary, on its own initiative or at the request of the shareholders, or an ordinary one when our boards of directors fails to do so; (vi) supervise and monitor compliance with laws and regulations, the applicable bylaws and the shareholders’ resolutions; and (vii) investigate written complaints made by shareholders representing at least 2% of the capital stock.

In performing these functions, our supervisory committees do not control our operations or assess the merits of the decisions made by the directors. The duties and responsibilities of an alternate statutory auditor, when acting in the place of a statutory auditor on a temporary or permanent basis, are the same as those discussed above for statutory auditors. They have no other duties or responsibilities as alternate statutory auditors.

Our supervisory committee (comisión fiscalizadora) is responsible for reviewing and supervising our administration and affairs and verifying compliance with our bylaws and resolutions adopted at the shareholders’ meetings. The members of our supervisory committee are appointed at our annual general ordinary shareholders’ meeting for a one-fiscal year term. Our supervisory committee is composed of three regular members and three alternate members and pursuant to Section 294 of LGS must meet at least every three months.

The following table shows information about the members of our Supervisory Committee, who were elected in the annual general ordinary shareholders’ meeting which was held on October 5, 2023:

Name	Date of Birth	Position	Term Expiration	Position Held Since
José D. Abelovich	07/20/1956	Member	2024	1992
Marcelo H. Fuxman	11/30/1955	Member	2024	1992
Noemí I. Cohn	05/20/1959	Member	2024	2010
Roberto D. Murmis	04/07/1959	Alternate Member	2024	2005
Paula Sotelo	10/08/1971	Alternate Member	2024	2020
Cynthia Deokmellian	08/06/1976	Alternate Member	2024	2020

All members of the supervisory committee qualify as independent, in accordance with CNV Resolution No. 400/2002 Rules.

Set forth below is a brief biographical description of each member of our Supervisory Committee:

José Daniel Abelovich. Mr. Abelovich holds an accounting degree from the Universidad de Buenos Aires. He is a founding member and partner of Abelovich, Polano & Asociados S.R.L. -NEIXA, firm of Accountants member of Nexia International, a global network of accounting and consulting firms. Mr. Abelovich participates, among others, in the Supervisory Committees of IRSA, Pampa Energía SA, CRESUD S.A. and Banco Hipotecario.

Marcelo Héctor Fuxman. Mr. Fuxman holds an accounting degree from the Universidad de Buenos Aires. He is a partner of Abelovich, Polano & Asociados S.R.L. -NEIXA, firm of Accountants member of Nexia International, a global network of accounting and consulting firms. He is also a member of the Supervisory Committees of IRSA, Inversora Bolívar S.A. and Banco Hipotecario, among other companies.

Noemí Ivonne Cohn. Ms. Cohn holds an accounting degree from the Universidad de Buenos Aires. She is a partner at Abelovich, Polano & Asociados S.R.L. -NEIXA, firm of Accountants member of Nexia International, a global network of accounting and consulting firms. Ms. Cohn worked in the audit area of Harteneck, Lopez y Cía., Coopers & Lybrand in Argentina and Los Angeles, California. She is also a member of the Supervisory Committees of IRSA, Futuros y Opciones.com S.A. and Pan American Mall S.A., among other companies.

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Roberto Daniel Murmis. Mr. Murmis holds accounting and law degrees from the Universidad de Buenos Aires. He is a partner at Abelovich, Polano & Asociados S.R.L., a member firm of Nexia International. He is a member of the Tax Affairs Commission and of the General Council of the Argentine Chamber of Commerce. He formerly served as an advisor to the Secretariat of Public Revenue (Secretaría de Ingresos Públicos) of the Argentine Ministry of Economy. Mr. Murmis also is alternate member of the supervisory committees of IRSA, Futuros y Opciones.com S.A. and Arcos del Gourmet S.A., among other companies.

Cynthia Deokmelian. Mrs Deokmellian obtained a degree in accounting from Universidad de Buenos Aires. She is partner at Abelovich, Polano y Asociados S.R.L. – NEXIA, an accounting firm from Argentina that is a member of Nexia International, a global network of accounting and consulting firms. Previously, he was Senior Manager in the audit department of KPMG in Argentina. Furthermore, she is a member of the Supervisory Committees of IRSA, Futuros y Opciones.Com and FyO Acopio S.A., among other companies.

Paula Sotelo. Ms. Sotelo holds an accounting degree from Universidad de Buenos Aires. She is partner of Abelovich, Polano y Asociados S.R.L. – NEXIA, an accounting firm from Argentina that is a member of Nexia International, a global network of accounting and consulting firms. Previously, she was Senior Manager in the audit area of KPMG Argentina and also worked in the professional practice department at KPMG New York. She is a member of the Supervisory Committees of IRSA, Hoteles Argentinos S.A.U, Futuros y Opciones.Com S.A. and FyO Acopio S.A., among others.

Internal Control

Management uses the Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO Report”) to assess effectiveness of internal control over financial reporting.

The COSO Report sets forth that internal control is a process, effected by an entity’s board of directors, management and other personnel, designed to provide reasonable assurance regarding the achievement of the entity’s objectives in the following categories:

· Effectiveness and efficiency of operations

· Reliability of financial reporting

· Compliance with applicable laws and regulations Based on the above, the Company’s internal control system involves all levels of the company actively involved in exercising control:

· 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 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 area and, therefore, those of the entity as a whole;

· the other personnel plays a role in exercising control, by generating information used in the control system or taking action to ensure control.

Audit Committee

In accordance with the Capital Markets Law No. 26.831 and the CNV Rules, our board of directors has established an audit committee which focus on assisting the board in exercising its duty of care, compliance with disclosure requirements, supervise the operation of the internal control systems and the administrative-accounting system, supervise the application of the policies regarding information on the company’s risk management, ethical conduct of our businesses, monitoring the sufficiency of our financial statements, our compliance with the laws, independence and capacity of independent auditors and performance of audit duties both by our internal audit and our external auditors and issue a well-founded opinion regarding transactions with related parties in the cases established by this law. These responsibilities are meant to comply with the duties assigned by Law 26.831, the Technical CNV Rules, and other applicable laws.

On March 11, 2020 our board of directors appointed Liliana Glikin, María Gabriela Macagni and Alejandro Mario Bartolome, all of them independent members, as members of the audit committee. The board of directors named María Gabriela Macagni as the financial expert in accordance with the relevant SEC rules. We have a fully independent audit committee as per the standards provided in Rule 10(A)-3(b)(1).

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B. Compensation

Compensation of directors

Under the Argentine General Corporation Law, if the compensation of the members of the Board of Directors and the Supervisory Committee is not established in the bylaws of the Company, it should be determined by the shareholders’ meeting. The maximum amount of total compensation to the members of the Board of Directors and the Supervisory Committee, including compensation for technical or administrative permanent activities, cannot exceed 25% of the earnings of the company. That amount should be limited to 5% when there is no distribution of dividends to shareholders and will be increased in proportion to the distribution up to such limit if all earnings are distributed. For purposes of applying this provision, the reduction in the distribution of dividends derived from reducing the Board of Directors’ and Supervisory Committee’s fees will not be considered.

When one or more directors perform special commissions or technical or administrative activities, and there are no earnings to distribute, or they are reduced, the shareholders meeting may approve compensation in excess of the above mentioned limits. The compensation of our directors for each fiscal year is determined pursuant to the Argentine Corporation Law and taking into consideration whether the directors performed technical or administrative activities and our fiscal year’s results. Once the amounts are determined, they are considered at the shareholders’ meeting.

At our shareholders’ meeting held on October 5, 2023, a compensation for an aggregate amount of ARS 129,1 million was approved for all of our directors for the fiscal year ended June 30, 2023.

This compensation approved by the annual ordinary shareholders’ meeting pertains to the Company’s individual board and does not consider inflation adjustment. For accounting purposes, the consolidated compensation for the Board of Directors accrued during the fiscal year ended June 30, 2022 and 2023 was ARS 3,928 million and ARS 10,253 million, respectively.

Compensation of Supervisory Committee

Our shareholders’ meeting held on October 5, 2023 further approved by majority vote a compensation for an aggregate amount of ARS 8.5 million to our Supervisory Committee for the fiscal year ended June 30, 2023.

Compensation of Senior Management

Our senior management is paid a fixed amount established by taking into consideration their background, capacity and experience and an annual bonus which varies according to their individual performance and our results.

The total and aggregate compensation paid to our senior management of the urban properties and investment business and the Agricultural Business for the fiscal year ended June 30, 2023, was ARS 71.5 million.

Compensation of the Audit Committee

The members of our Audit Committee do not receive any additional compensation other than that received for their services as members of our board of directors.

Compensation Plan for Executive Management

We have a defined contribution plan covering the members of our management team. The Plan became effective on January 1, 2006. Employees may begin participation voluntarily on monthly enrollment dates. Participants may make pre-tax contributions to the Plan of up to 2.5% of their monthly salary, or the “Base Contributions”, and pretax contributions of up to 15% of their annual bonuses, or “Extraordinary Contributions”. Under the Plan, we match employee contributions to the plan at a rate of 200% for Base Contributions and 300% for Extraordinary Contributions.

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Contribution expense was ARS 441 million and ARS 369 million for the fiscal years ended June 30, 2023 and 2022, respectively. Employee contributions are held in a mutual fund. Contributions we make on behalf of our employees are held temporarily in a company account until the trust is set up. Individual participants may direct the trustee to invest their accounts in authorized investment alternatives. Participants or their assignees, as the case may be, may have access to 100% of our contributions under the following circumstances:

1.	ordinary retirement in accordance with applicable labor regulations;
2.	total or permanent incapacity or disability; or
3.	death.

In case of resignation or unjustified termination, the beneficiary may redeem the amounts contributed by us only if he or she has participated in the Plan for at least five years.

Long Term Incentive Program

The Shareholders’ Meetings held on October 31, 2011, October 31, 2012, and October 31, 2013, ratified the resolutions approved thereat as regards the incentive plan for the Company’s executive officers, up to 1% of its shareholders’ equity by allocating the same number of own treasury stock (the “Executive Plan”), and delegated on the Board of Directors the broadest powers to fix the price, term, form, modality, opportunity and other conditions to implement such Executive Plan.

In this sense and in accordance with the new Capital Markets Law, the Company has made the relevant filing with the CNV and pursuant to the comments received from such entity, it has made the relevant amendments to the Executive Plan which, after the CNV had stated to have no further comments, were explained and approved at the Shareholders’ Meeting held on November 14, 2014, where the broadest powers were also delegated to the Board of Directors to implement such Executive Plan.

The Company has developed a medium and long term incentive and retention stock program for its management team and key employees under which share-based contributions (after tax and social contributions) were calculated based on the annual bonus for the years 2011, 2012, 2013 and 2014.

The beneficiaries under the Executive Plan were invited to participate by the Board of Directors and their decision to access the Executive Plan is voluntary.

In the future, the Executive Participants or their successors in interest will have access to 100% of the benefit (Cresud’s shares contributed by the Company) in the following cases:

· 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.

While Executive Participants are part of the program and until the conditions mentioned above are met to receive the shares corresponding to the contributions based on the 2011 to 2013 bonus, Executive Participants will receive the economic rights corresponding to the shares assigned to them. In case that the conditions are not met, the contributed funds remain at the participant’s disposal.

The shares allocated to the Executive Plan by the Company are shares purchased in 2009, which the Shareholders’ Meeting held on October 31, 2011, has specifically decided to allocate to the Executive Plan.

On October 30, 2019, the shareholders’ meeting approved the implementation of a new incentive plan for directors, management and employees based on the granting of shares for the long term remuneration of its executives, directors and employees, which accomplish certain requirements in terms of seniority and internal category. In that sense, the shareholders approved a capital increase for up to 1% of the capital stock at the time of the execution of the plan. As of the date of this Annual Report, the incentive plan was not executed and thus, no shares were issued or allocated to it.

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Employee long-term incentive - Brasilagro

On October 2, 2017, the General Shareholders’ Meeting approved the creation of the Long-Term Share-Based Incentive Plan (“ILPA Plan”), a compensation program in which participants are entitled to receive a number of issued shares by the company if the objectives defined in the agreement are achieved. The ILPA Plan was divided into 3 programs and requires beneficiaries to remain with the Company for a specified period (consolidation period), in addition to having cumulative key performance indicators (“KPls”) that can define, increase or decrease the number of actions, classifying the result according to the 3 categories that make up the plan. The first compensation program (“ILPA 1”) was approved by the Board of Directors on June 18, 2018, and ended during the year June 30, 2021. The accumulated expenses of the plan reached ARS 116 million with compensation and ARS 81 million in charges.

On May 6, 2021, the Board of Directors approved the terms of the second share-based compensation program (“ILPA 2”), giving continuity to the ILPA Plan, establishing the characteristics and general rules of the new plan, such as a maximum number of shares and the list of eligible employees, appointed by a designated committee and approved by the Board. The structure of the 2nd program is maintained in accordance with the basic guidelines of the ILPA Plan, which basically include the permanence of employees during the accrual period and the achievement of KPIs accumulated between 1 July 2020 and June 30, 2023 (consolidation period).

As of June 30, 2023, ILPA 2 expenses totaled ARS 669 million.

C. Board Practices

For information about the date of expiration of the current term of office and the period during which each director has served in such office see “Item 6. Directors, Senior Management and Employees - A. Directors and Senior Management.”

Benefits upon Termination of Employment

There are no contracts providing for benefits to directors upon termination of employment, other than those described under the following sections: (i) “Item 6 Directors, Senior Management and Employees - B. Compensation - Capitalization Plan” and (ii) “Item 6 Directors, Senior Management and Employees - B. Compensation - Long Term Incentive Program”.

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D. Employees

As of June 30, 2023, we had 2,706 employees.

As of such date, we had 641 employees in our Agricultural Business in Argentina, including Cresud employees and FyO but not those of Agro-Uranga S.A. Approximately 30% are under collective labor agreements.

We employ 511 people in our International Agricultural businesses, composed of 455 employees of BrasilAgro, 31 employees in the companies located in Paraguay, 25 employees in the companies located in Bolivia.

Our Shopping Malls, Offices, Sales and Developments and Other businesses had 667 employees with 260 represented by the Union of Commerce Employees (Sindicato de Empleados de Comercio). Our Hotels segment had 622 employees with 528 represented by the Tourism, Hotels and Gastronomy Union from the Argentine Republic (Unión de Trabajadores del Turismo, Hoteleros y Gastronómicos de la República Argentina) (UTHGRA).

The following table shows the number of employees in the Company’s various businesses as of the dates mentioned below:

			Urban Business
	Agricultural Business(1)		Shopping Malls, Offices, Sales and Developments and Other Business		Hotels(2)		Shared Service Center		Corporate Areas		Total
June 30, 2021		964		633		652		209		90		2,514
June 30, 2022		1,053		656		750		212		84		2,706
June 30, 2023		1,152		667		622		235		84		2,760

________________ 

(1)	Agricultural Business includes CRESUD, FyO, BrasilAgro, Acres and Palmeiras.
(2)	Includes Hotel Intercontinental, Libertador Hotel and Llao Llao.

E. Share Ownership

The following table sets forth the amount and percentage of our shares beneficially owned by our directors, Supervisory Committee and senior management as of June 30, 2023:

		Share ownership
Name	Position	Number of Shares (2)		Percentage		Number of Warrants (3)		Percentage Fully Diluted
Directors				%				%
Eduardo Sergio Elsztain (1)	Chairman		228,519,673		38.5		35,138,100		38.7
Saúl Zang	First vice-chairman		7,146,475		1.2		2,092,830		1.4
Alejandro Gustavo Elsztain	Second vice- chairman / Chief Executive Officer		13,726,615		2.3		3,468,205		2.5
Jorge Oscar Fernández	Director		279,919		0.0		-		0.0
Fernando Adrián Elsztain	Director		590,874		0,1		606,061		0.1
Mariana Carmona	Director		-		-		-		-
Alejandro Gustavo Casaretto	Director/Regional manager of Agricultural Real Estate		198,581		0.0		49,874		0.0
Liliana Rene Glikin	Director		-		-		-		-
Alejandro Mario Bartolome	Director		-		-		-		-
Gabriela Macagni	Director		-		-		-		-
Nicolas Bendersky	Director		190,921		0.0		28,410		0.0
Enrique Antonini	Director		-		-		-		-
Gastón Armando Lernoud (4)	Alternate Director		228,749		0.0		46,672		0.0
Eduardo Ohan Kalpakian	Alternate Director		-		-		-		-
Ilan Elsztain	Alternate Director		14,470		0.0		5,422		0.0
Iair Elsztain	Alternate Director		725		0.0		108		0.0
Gabriel A. G. Reznik	Alternate Director		-