20-F 1 cresud_20f.htm FORM 20-F cresud_20f.htm

 

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.

 

 

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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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Table of Contents

 

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